Economic Incentives which may bring catastrophe

http://krugman.blogs.nytimes.com/2009/12/16/throwing-momma-from-the-train/

One of the best takes on Obama's leadership style..

http://www.nytimes.com/2009/12/04/opinion/04brooks.html?_r=1&hp

statement about US politics

underscore just how alarmingly expertise is discounted — or equated with elitism — in our increasingly democratized era, and just how thoroughly colorful personal narratives overshadow policy arguments and actual knowledge.

Impotant Questions for Finance as raised by many economists

Can the financial sector get too big, and if so how can we tell?
Can derivatives markets concentrate risk as well as spread it?
Is financial innovation fundamentally different and more dangerous than innovation in other fields, and if so what should we do about it?
Should central banks and financial regulators try to snuff out asset-price bubbles, and if so how should they go about determining when we're in bubble territory?
Is Hyman Minsky right that good times inevitably breed crises?

a nice article on gold standard

http://web.mit.edu/krugman/www/goldbug.html

of course need to discount krugman's political attacks..

cant copy everything

Found this example quite interesting.. Thats why a synergy between all aspects of a firm is important..

An example of those dangers is the adoption by the Detroit auto companies some years ago of the "quality circles" used by Japanese auto companies to increase productivity by encouraging their workers to suggest productivity-enhancing innovations. The quality circles failed in Detroit because the auto companies did not realize that what made the quality circles work in Japan was the practice of lifetime employment; our workers were reluctant to suggest productivity improvements because they knew it might well result in a smaller workforce and therefore in layoffs.

Many airlines tried to copy South Western and failed miserably. Its not only low price offering but making sure that operations including management are synchronised with low cost principle.. Ryan Airlines entrepreneur and CEO show a similar approach where he runs a tight ship for upper management too. Post-it notes and highlighters are banned. Executives bring in their own pen. The CEO himself travels Ryanair and doesnt use even the omnipresent blackberry for businessman. The concept and thinking is synchronised to create a concept and core competency. This is the most difficult to be copied since it is created from organizational interactions and an organizational thinking.

Wake Up Sid

Just watched the movie. Unlike all those who accompanied, I really liked the movie. Will rate it somewhere better than average. So lets hear first what is wrong with the movie so as to cover up the bad aspects with what I liked. It is too long. This may be because of pressures from distributor and I guess now multiplexes( need interval breaks for making popcorn money). Or the director dont know how to edit. This could have been made a smaller 1.5 hr movie which would make it small and sweet. So what is good about this? Many things . Havent seen a romantic Hindi movie with different characterizations for a long time. The background music and songs were apt and lovely. Camerawork and Set Designs were good. This is where Karan Johar excels. Though his movies sucks big time with hackeyned plot, wooden face characters and too much of emotion, he makes sure that movie is beautiful. This has also some nice shots of Mumbai and one of my favourite places Nariman Point. So in this movie, Karan Johar outsources the direction and hence story and else I guess to someone else but you can feel his presence in crafting sets and camerawork. Konkana sen is as good as expected. It is always nice to see Hindi heroines who dont have a singleton expression throughout the movie. But what really caught my eye is Ranvir Kapoor. I missed his first movie but let me make a prediction with the possibility of eating my word later, this lad is a new star on the horizon.

Good movie in all...

Lets strategize

Lets strategize

Core competency has to be found

Differentiation learnt,Organization dismembered

Consultant paid

Lets strategize

Its not theory its practice

No ex-ante only ex-post

So what it doesnt mean anything

Look concerned, look suave

Show efficiency, show effectiveness

Put things on power point

Lets strategize

collection of macroeconomic state after crisis blogs

http://economistsview.typepad.com/economistsview/2009/09/whats-wrong-with-macroeconomics.html

Branding - 1

"Intel Inside"

Intel advertised heavily with its "Intel Inside" campaign to create a brand awareness. This was an unusal move for a component maker who sells to computer assembler and not directly to consumers. The management was of the view that most of the value of uniqueness of patents underlying Intel chips was exproporiated by assemblers instead of Intel. The advertisement paid the company handsomely with a strong brand created. Intel was able to extract a premium from consumers with "Intel Inside" written on all computers.

"Devil's Envy"

I had seen this Onida Ad since childhood where a character is a devil depicting envy, jealousy for buying television. Thinking back, this was so apt as a brand identity. Television home owners was scarce and people bough television as to show that they have acheived something as a matter of social status. The feeling of making other jealous was part of this though not expressed. The ad makers were able to tap this through this advertisement. Dont know how successful was this but sure a good example of correlation between brand identity and feelings it want to evoke in customers.

"Natural vs Ayurvedic"

Read this statement that ayurvedic has the perception among people of treating disease from inside and hence more effective. Natural has just the perception of being fresh. The difference is for a cleansing or cosmetics product, natural brings a feeling of being not chemical, different from the artificial created product while ayurvedic products are non-chemical which solves the beauty problem using Indian tradition. Does this ayurvedic positioning work ? Need to see more examples .. will do so..

Strange data

I was discussing with a friend earlier whether dishtv has a potential market in rural areas. The advantage of dish tv is that one dont need cables and choce of channels. The disadvantage is that it is costly due to its high setup cost. Also there are questions over whether really a rural market with a high potential to be tapaed exists. Spending 1500/- for a cable connection seems high . And why will people go for dish tv of the local cable guys can provide cables with the very customized channel to local taste in an easier way. If people live far away from each other in a village, may be dish tv makes better sense due to high cost of cables. Or if cable service is not good while dish tv can provide better service through direct connection. Also mode of payment will be a concern in village due to lack of internet and credit cards. Probably mobile sim card is used as a payment facility.

Also this huge potential of rural market is circumspect in my view and i am not yet convinced. AN economy which revolves around agriculture growing at 4% cant produce enough income growth to justify a high set up cost item. If a few percentage of people in rural India does satisfy the income level, the cost of distribution is high to distant villages and dispersed demand. This high cost applies for dish tv also.

Today I saw one of the research carried out and published in newspaper that 70% of total dish tv connections are in villages. And this sector is also growing at a higher rate than villages. So a disconnect from what I was thinking earlier.

Shall we try to justify this number? Need to see more details of the research before I can comment. But the obvious reason would be that television being the only source of entertainment presents a very inelastic demand in villages and through use of good marketing and low setup costs, one will be able to sell dishTV. Never under-estimate consumers who is different from you.

difficulty in economic forecasting: 2005 (current account deficits)

http://delong.typepad.com/sdj/2005/09/the_coming_doll.html

dictators:: financial incentive?

Why there are dictators are in middle east? There could be many answers: historical, religious, climate or what not... There could be some truth in all of them . One of the argument that I heard was that presence of oil could have brought a perverse incentive for dictators to setup autocratic rule. Being oil rich country, the government dont need to control people but oil. Controlling oil is much easier through force and command and control mechanism rather than people on a long term basis. Oil provides much needed revenues for the government without taxing the people and hence less resentment among public about a dictator. Also oil gives valuable foreign currency to a country hence making the government immune to foreign pressures. The revenue from oil can be used for public benefits like road, hospital etc hence reliving the public pressure for democratic freedom. Russia has also gone from democratic tendencies to dictatorial powers of Putin. This can also be explained by oil rich reserves of Russia. Is this a generalization ? No certainly not.. Norway remains a democratic nation though it is oil rich. South east Asia like Indonesia which has some oil reserves have shown periods of dictatorship between bouts of democracy. Africa has lots of other natural resources like copper, gold, tin etc which may also explain the dictatorial regime in many of these countries..

misconception about rural development

There has been widespread support for government measures for growth in rural economy so as to usher India into a broad inclusive growth rather than a narrow growth led by manufacturing and service sector. The problem becomes acute since even now we have 60% of the population living in rural part of our country.

The solution brandished by government agency and intellectual elite is creating/improving the rural infrastructure in terms of credit availability, roads etc so as to unlock the rural industry and steps towards reducing vulnerabilities under poverty. Both these argument are valid but we can see that they are basically inadequate in long term. The poverty alleviation program which is an attempt to reduce vulnerability does help the rural people in short term. These programs are rightly funded from taxes from affluent people under principles of just and fair in a civilized society. The investment in rural infrastructure are supposed to unlock the economy and get them on a steady growth path. On the face of it, infrastructure are facilitators of growth. And certainly we can accept externalities from more enterprenurial activities and better price discovery for agriculture products. But if the rural economy primarily dominated by agriculture and associated acctivities keeps on growing at a lower rate of 3-4%, there is not much scope of growth in rural income. Infrastructure growth in many studies have been found to be a fringe factor while increase in productivity is a critical factor towards growth. Indifference of sucessive government on this front speaks volume about why rural incomes have stagnated over the years.

Not enough credit availability and building infrastructure etc will help rural economy to grow until the core issues of agriculture productivity is addressed. The alternative is to introduce other productive activity like animal husbandry, industry, services etc to rural economy. Migration can be considered a choice but with underemployment in urban areas and lack of skills/knowledge among rural population acts as a natural deterrent in this area. Stimulation of an economy is a complex task and a half hearted effort without understanding the basic shortcomings can only make the situation worse off as the over credit availability have only increased the indebtedness and not has kickstarted the agricultural growth.

charisma of bush

someone wrote this about george bush

"Mr. Bush is the triumph of the seemingly average American man. He’s normal. He thinks in a sort of common-sense way. He speaks the language of business and sports and politics. You know him. He’s not exotic. But if there’s a fire on the block, he’ll run out and help. He’ll help direct the rig to the right house and count the kids coming out and say, “Where’s Sally?” He’s responsible. He’s not an intellectual. Intellectuals start all the trouble in the world."

this thinking about leadership being one of them has been widely celebrated in politics all over the world and has been successful in cases.. do we need politicians who are like us and hence we celebrate their ascendancy in the hope that we also will one day be able to achieve the same or we want those who have uncommon intelligence to grace the big office is always a tough question.

the answer is a difficult one and a sociological study is required to get one..

american media continue to amaze me.....

http://www.conservapedia.com/Main_Page

This is like a wikipedia whereonly conservative views are present resulting in a very biased representation of history. Looking at pages for barack obama, bill clinton and ronald reagan, one can see how history can be rewritten easily for ones propaganda. Though I see one silver lining here. With the explosion of forms of media which is at least with the current technologies impossible to fully control, it will be very difficult to rewrite history according to ones agenda. But it will be easy to confuse people by loud rhetoric and finally it is about getting only 50% of the people on your side.

american media at its worst

http://tpmdc.talkingpointsmemo.com/2009/06/limbaugh-on-the-sanford-affair-its-obamas-fault.php?ref=fpblg

mr. rush limbaugh who is followed by millions of listeners in United states gives the reasons for Mr. Sanford going to Argentina for having an extra marital affair on Mr. Barak Obama as apparently Obama is driving America to hell and Mr. Sanford is fed up with this and hence has moved to a differnt country.. who said lunatics exist only in our country...

tax breaks...

http://www.voxeu.org/index.php?q=node/3651

according to this research, short men shall be paying less taxes ..Am i in for less

taxes in future?

big brother watching..

http://news.bbc.co.uk/2/hi/asia-pacific/8091044.stm
Chinese government takes internet censhorship to another level by mandating that all computers are sold with a screening software pre-installed. The reason given is to screen out the pornographic materials but could be easily used to prohibit politically explosive content as per the will of Chinese government.

Cicero quote.

"Extremism in the defense of liberty is no vice; moderation in the pursuit of justice is no virtue.”.. Marcus Tullius Cicero

Outsourcing ...

http://www.reason.com/news/show/29200.html

This article has facts which clears the popular misconception about outsourcing, imports for America.

Taxation policy United States (1980-2003)

http://www.nytimes.com/2003/09/14/magazine/the-tax-cut-con.html?scp=1&sq=The%20Tax-Cut%20Con&st=cse

An article by Paul Krugman in detailing history of taxation policy with explanation of political capital behind the policy. Mr. Krugman is a progressive economists and hence his bias towards opposing republican policies shall be taken into account. This will be handy towards similar debate that we will be having in near future in India about optimum tax policy.

Truthiness

"I don't trust books, they're all fact, no heart. And that's exactly what's pulling our country apart today. Let's face it folks, we are a divided nation…between those who think with their head and those who know with their heart" ...Stephen Colbert, a Comedy Central satirist, when he said to have invented a new word 'truthiness' with an intention to ridicule George Bush's penchant of decision making from the gut rather than informed policy decision making.

Stability is destabilizing

http://seekingalpha.com/article/76313-introducing-the-minsky-theory-stability-is-destabilizing

The author explains Minsky theory in a clear but concise manner. A nice read. Minsky's theory is that stability in financial matters has a perverse incentive of creating a destabilizing situation which ultimately leads to high risk and high leverage resulting in recession. A nice read.

Ten principles of economics

Here are ten principle of economics as dicatated in George Mankiw's book "Principle of Economics" which in my view nicely sums up the economic behavior.

How People Make Decisions:
Principle #1: People Face Tradeoffs.
Principle #2: The Cost of Something Is What You Give Up to Get It.
Principle #3: Rational People think at the Margin.
Principle #4: People Respond to Incentives.

How People Interact:
Principle #5: Trade Can Make Everyone Better Off.
Principle #6: Markets Are Usually a Good Way to Organize Economic Activity.
Principle #7: Governments Can Sometimes Improve Market Outcomes.

How the Economy as a Whole Works:
Principle #8: A Country's Standard of Living Depends on Its Ability to Produce Goods and Services.
Principle #9: Prices Rise when the Government Prints Too Much Money.
Principle #10: Society Faces a Short-Run Tradeoff between Inflation and Unemployment.

Laudable achievement

Here are the two news items which have lighted the day for me. Two coahing institutes Super 30 and Rahmani 30 where poor students were provided coaching for IIT JEE along with accomodation. 40 students have successfully made it to IIT from these institutes. The achievement of these students will not only allow them and their families to get themselves out of the trap of poverty but will also inspire the other poor students from my state to aim for the best college in India. Without belittling the need for primary education as an important factor for social transformation, these developments are a great factor for development of an educated development oriented identity for Bihar.

http://www.bihartimes.com/Newsbihar/2009/May/Newsbihar25May7.html
http://www.bihartimes.com/Newsbihar/2009/May/Newsbihar25May6.html

quote

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics" FDR in 1930s

Surprised!!!

I have been completely taken aback at the current political crisis in England. Having observed and suffered at the hands of a political system in India where corruption has become an accepted evil of the political class and getting bribed supposed to be a right for politicians, the theatre of resignations and uproar in Britain about second home expenses come as a very pleasant surprise. So here is the detail that is what I have figured out from the wide coverage at BBC. Members of parliament in England were provided a second home expense allowance where they can claim for expenses required for their works during stay at the two houses - one at their constituency and the other in London for attending parliament. These expenses were reimbursed by the parliament after production of appropriate bills. Due to some ruling by parliament/court (I am not sure), the parliament was supposed to publish the details of second home expenses claimed by MPs over the last 4 years in July. Telegraph got these expense details through an informant and started publishing the expense details of individual MPs day after day and shaming them.

Now here there was no fraud committed by MPs in majority of cases. The bills that were submitted were not fradulent. And these bills were approved and agreed upon by the authorities in the house. But there was a huge uproar on whether the MPs have followed the law in its spirit. Seeking reimbursement for maintaineance of a swimming pool, dog food, television, security system etc are not what is required for working of MPs and it was alleged that MPs though have followed the rules in writing but have rigged the system for their own benefit. This has caused resentment and uproar among the common people aggravated by the global economic recession. The speaker of house has resigned and 5-10 MPs have decided not to contest the next elections scheduled next year. There is a possibility that many others will be defeated in the next elections. The leader of opposition has called for independent members to join his party and fight for elections showing how much discredit has been brought by this scandal.

So what do we take from this episode. First this is an example of the power of information in democracy. Corrupt practices which may not stand illegal in courts of law are completely a no-no in the courts of public opinion. This may lead to a generational shift in English politics towards a more transparent and less corrupt political system. Second this is a lesson for Indian democracy. We have politicians in India which have been charged with corrpution of millions of ruppees and still they are elected representatives of people. In the last elections, 20% of MPs have criminal charges against them. And learning from the English experience, it is not the rules that make up for cleaner political system but it is the public opinion that unseats the corrupt politicians. Rules can aid but ultimately it is required that the public opinion be guided towards yearning for a clean political system where corruption is a strict no-no and probity in public life valued with the highest respect. And this change in political opinion can only come through literacy and empowerement of masses where they understand how much each of their vote counts.

Capitalism in gutter!!

Here is a pic which says it all ..
http://www.nytimes.com/imagepages/2009/04/26/world/26icelandB.ca0.ready.html
overboard but some countries have faced the largest burnt of this crisis..

why charity is not popular in india?

I read in Greg Manikaw's blog

"conservatives who practice religion, live in traditional nuclear families and reject the notion that the government should engage in income redistribution are the most generous Americans, by any measure. Conversely, secular liberals who believe fervently in government entitlement programs give far less to charity. They want everyone's tax dollars to support charitable causes and are reluctant to write checks to those causes."

That is possibly one reason that we Indians not believe in charity and want the tax paying government to take care of income inequalities.

(P.S. No statistical or empirical proof are available for this analysis.. I found this interesting and thats why it is here)

Making of a great CEO

In a nytimes article http://www.nytimes.com/2009/05/19/opinion/19brooks.html?ref=opinion, the author describes a recent survey undertaken by Steven Kaplan, Mark Klebanov and Morten Sorensen to understand what characteristics of CEO matter? 316 CEO's across America were interviewed and a detailed personality assessment of CEOs and their companies performance were carried out to determine correlation. My reservation about this is the standard problem in regression. How to control for the factors which may be indirectly affecting the performance of the company. Also no details of analysis have been present, so there may be questions about conclusions derived from the study.

But since this is published in a reputed news magzine like nytimes and hence we assume that there is some credibility for the conclusions, we do come across a very interesting view of what makes a good CEO which is against the current popular understanding. According to the article "What mattered, it turned out, were execution and organizational skills. The traits that correlated most powerfully with success were attention to details, persistence, efficiency, analytic thoroughness and the ability to work long hours." It is about ability to emphasize on incremental gain rather than waiting for some exciting new breakthrough setting media in the frenzy.

In the course "Leadership skills", we studied about Level 5 leadership(http://www.imaginal.nl/articleLevel5Leadership.htm) which also explains that the most successful leaders are self effacing, builds enduring greatness through a paradoxical blend of personal humility and professional will. Manmohan Singh who is castigated repeatedly for being a weak leader will come in this category though he lacks in being resolute which is also a necessary criteria. And also he is a political leader where being charismatic is an important aspect of getting masses to listen and follow your policies.

If this becomes an accepted truth and HR recruitment starts leaning towards these characteristics in recruiting managers and CEOs, we will see higher insistence on excellent GPAs which arguably reflect the characteristics of doggedness and incremental efficiencies. Geeks are the one who look for big breakthroughs, boring guys get their heads in the books and study to get high grades.

One sad part is that the study also proves that "These sorts of dogged but diffident traits do not correlate well with education levels. C.E.O.’s with law or M.B.A. degrees do not perform better than C.E.O.’s with college degrees." So getting an MBA degree doesn't correlate with higher salaries but if I am aiming for middle management, will it help...

And always remember there are exception to rules...........

wall street quotes.

"To prove that Wall Street is an early omen of movements still to come in GNP, commentators quote economic studies alleging that market downturns predicted four out of the last five recessions. That is an understatement. Wall Street indexes predicted nine out of the last five recessions! And its mistakes were beauties"

Paul Anthony Samuelson

A case for outsourcing

Greg Mankiw makes a case for outsourcing ..
http://gregmankiw.blogspot.com/2006/05/outsourcing-redux.html.
Though need to build more arguments in favor of outsourcing... remember one
cant oppose outsourcing expecting the other countries to open their borders for
trade..

Where is the right in India?

Watching the Indian election news at BBC, I was struck by BBC's description of BJP as "Hindu nationalist party". I always had this thought ingrained in the mind probably by the Indian media that BJP is the party on the right while communists are on the left with the INC at the centre moving from left to right during its long history. So I get to research what does "right" and "left" means in terms of political divide.

In United States the republican party which are rightist have the small government as their major agenda while the democrats supposed to be party of the left favos presence of a larger benficial government . Similar divisions exist between Labor and Tory parties in England though the New Labor by Tony Blair deviated from the extreme left to much more centre left by reducing taxes on the rich though continuing large public spending. A more elaborate research is required to understand the historical legacy of these terms but lets take these two countries as example and see where the Indian political parties sit on the spectrum.

The communist parties are definitely leftmost of the spectrum with their agenda of large government with anti privatization and dis-investment policies. The Congress has been traditionally supporter of socialist governance, moved to 1991 towards market reforms but never espoused the agenda of free markets and smaller governments in its long history. In the last 5 years, it has moved more to the left and is certainly currently left of the centre in the political spectrum. So where does that leave BJP. BJP has actively supported self-dependence as its economic policies against the economic reforms of 1991. During the Vajpayee times, though it pressed on some of the market reforms, divested some of the PSUs. While fighting for the last elections, I also didnt hear any support of market during the speeches though I have to admit that I didnt went through their mainfesto. This puts BJP also in the left to the centre spectrum.

So what we have finally is that all Indian political parties exist on the left of the centre and there is none on the right. The reasons can be found out in the socialist past of India's history. There seems to be very people supporting Friedman, Anglo/Saxon economics.

Another thing we shall discuss here is that the "right" is also related to conservative movement. In most cases, we see the intermingling of the conservatives and the right. Conservativism means maintaining the status quo. So in economics, this in cases is interpreted as maintaining the status quo of earlier century where individualism entreprenurial spirit was given a higher priority than government in economic growth. The concept of welfare state is a very modern one in the history of civilizations. So here a conservative movement co-opts the right in the economic matters. But this conservative movement also extends its political policies in matters of faith. Here it means keeping the tradition which means more adherence to religious orthodoxy and issues like opposition to gay rights, abortions etc comes into play while the liberals wants accomodation of views of all so that no-one is persecuted due to their views.

Under this definition, BJP can be categorized as conservative movement but this also requires a re-visiting of history. If India as an entity is supposed to be under foreign rule under the Mughals, then the status quo will mean that all Muslims are foreigners and by that logic the Indian state shall favor Hindu customs and traditions and discriminate against othe religions if their beliefs come in opposition against Hindu beliefs. So it finally comes to reading of history for your own convenience and that is the case for any political party. Also BJP or its sister outfits has opposed western customs in cases and also their opposition against painters/artists who dont support their view of India set them in the conservative mould. But I have seen similar protests from the Congress in some cases for electoral gains. But if we compare these two, BJP will certainly win hands down in being the flagbearer of the conservative idealogy. The conclusion is that BJP can be described as occupying a Hindu nationalist conservative position.

RIght vs Left

I came across a very good post on "right vs left" on economic matters ....http://gregmankiw.blogspot.com/2007/12/how-do-right-and-left-differ.html .

Mr Greg Mankiw lists some of the differences in the right and left thinking and how does this finally lead to espousal of bigger/smaller government on two sides. Basically from an intellectual point of view, there is a marginal social cost of government intervention in any affair which shall be greater than the positive externality or less than the negative externalities out of government action. If this is the case, the govenrment action is fruitful else it is not. Both the left and right agree on this. The quarrel between the two sides is that the calculation of these costs since these calculations are not straightforward and brings in assumptions and time period which are debatable. Hence we have a situation where the two sides though agree on the common intellectual principle have different manifestations of the application of principle hence arriving at separate conclusions causing disagreements.

Norway : heaven!!!

In the fictional account "HitchHicker's Guide to Galaxy", two scenes/subplots have been my favorite. One was the plot when Earth was destroyed by inter galactic municipal system and the head exclaimed how ignorant these Earth beings are as they dont know abt this proposed destruction since such a notice has been posted at Proxima Centuari notice board for a long time. I felt aghast at those lines as they were able to show how vast the Universe is and how small we are which is what the writer supposedly aimed to create.

The second scene is more to do with writer;s love for Norway and he expresses it in the best possible manner. There is a character who designs planets and he was part of the team who designed Earth and he got a special award for designing fjords and Norway. This is the best complement one can give to a place in Norway. Other than the scenic beauty, Norway has a large amount of oil reserves and a very small population with one of the highest per capita income in the world. I came across this article in nytimes about Norweigan economy http://www.nytimes.com/2009/05/14/business/global/14frugal.html?ref=business.com which complements the fact that Norway is heaven not only due to its natural but also in the type of government and social environment. Here are some facts from the articles which exemplifies the previous statement. Norway's economy grew last year by 3% during the last year when the world went into a recession. Government has enjoyed a budget surplus over the year which has been well invested in a soverign wealth fund. And they have a social support system where the government takes care from cradle to grave. What else one can wish for?

Google: where is the diversification?

Google still earns 97% of its revenue from internet ad business. Here is a nice blog on business insider which lists all what Google promised but has failed. http://www.businessinsider.com/all-the-things-people-thought-google-would-do-but-it-hasnt. The list include

• Take over billlboards, TV,Print
• Replace advertising agencies
• Replace microsoft office
• Develop an operating system
• Build a google phone
• Become a nationwide ISP

among others.. Also google has failed to monetize its social networking website orkut while facebook and myspace has taken the lead both in United States and rest of the world. Youtube is still making losses and efforts to get a positive return on its large investment in buying Youtube has largely been a failure.

The internet advertisement business though remains strong and Google has been able to maintain and increase its market share of this business. But despite the oft repeated culture of innovation, Google has not been able to deliver a new revenue stream.

If we compare this with Apple, they have been more succeessful in going fromMac to ipod to iphone. Diversification is one of the biggest cry in the current business environment as we have seen banks betting huge on mortgage backes securities and forgetting about diversification has paid a large price. so what is in store for Google ?

The power of information

A recent example of the power of information is the expensese scandal in the British House of Commons. The British MPs were provided a second house allowance so as to carry out their works in London. As a method to line their pockets, many MPs rigged the system where they stayed within the rules but probably violated the spirit of the rules by claiming reimbursements for items like dog food, swimming pool maintaineance etc. I am not clear about the back story but the MPs agreed upon public pressure to publish these expense items in July. The Telegraph got hold of all these expenses and over the last week have published them in their newspaper shaming the concerned Member of Parliaments. The result is that many MPs have agreed to return the super-fulous expenses that have been claimed and call for a new system for reimbursement where there are more checks and balances. The hue and cry generated in the public and the corressponding public pressure seems to suggest that in future there will not be a single MP who will try to claim for expenses against the spirit of the rules for the fear of being exposed and shamed across the countries.

This is truly an example where the information has played a critical role in getting public servants to behave in a manner that upholds the dignity of their offices. In India after passing of the Right to Information bills, we do have instances where the information has helped to get justice for commonn people but I hope that the events that unfolded in England would be repeated in India where certainly the belief is that Members of Honorable Parliament are certainly not honorable. Who is going to take the lead?

Fundamentalism

"Fundamentalist movements use the fear and prejudice of each other to sustain themselves" - Anonymous.....

The extreme right of the Hinudu fundamentalism needs the hardcore fundamentalists on the muslim side to create an environment of hatred and fear among the moderate Hindus and get their allegiance to their cause.. Cow slaughter is one of the examples...In the moderate sufi version of Islam which persisted during the Mughal times, with exceptions cow slaughter was banned so as not to hurt Hindu sentiments and this not being core to Islam practices.. But the hardline ulemas in cases had advocated cow slaughter as probably the issue on which they want to test the identity problem. The Hindu rightist party took up this issue to get the moderate Hindu in their fold by creating the environment where the whole of Islam has to be resisted to protect Hindu beliefs.... Similar examples can be found on the other side.

Another way the fundamentalists thrive is re-writing history. History is a funny business since by nature, it has lots of ambugities which with the help of some imaginations and lying can be interpreted to suit their agenda. Here history includes what is written in holy books and the books of foresight as they are called. The interpretation of scriptures written hundreds of years ago is a very subjective process. The fundamentalists usually take this route to create a place in the larger scheme of history and hence able to demand legitimacy among both the hardliners and the moderates who are their targets..

Is management more difficult in boom times?

The popular thinking is that true managers are discovered when the going gets tough. Coal metamorphs into diamonds when it is put under high pressure deep beneath the earth. The best leader is one who radiates enthusiasm among his followers during dire times and finds a way out of the darkness. The mettle of a person is tested when the whole world stands against you. Though there is no denying the fact that leadership during times of adversity is very challenging and needs the best out of person to wade out of big waves, I believe that there are many things present which are of assistance to leaders in such times. But in times of boom, leadership can be trickier.

As the saying goes that "The only way now is up because you are at bottom". If you are down and out and we have a charismatic leader, he/she can marshall his followers easily to follow him. The trick is to have the people believe in him/her which is easy since the people are all down in the dark and it is human nature to follow that white lone light. The challenge is to make sure that you are convincing "the light is bright " and its the only one which in this analogy requires that the voice of leadership is clear and adresses the problems infested in darkness. Certainly charisma and clear ideas are critical requirements in a leader in such times.

Now lets think about the times of boom. The things are all going fine and the feeling in the team could be that why the hell the leader is required. They can chart their own courses and be successful. In such times, the greed to be agressive fuelled by external surroundings and take more on the plate is big and then the common sense takes a backseat. As with the example of banks, "when the music is playing, you need to dance". When everyone is earning money, risk assessment policies were relegated to the background and everyone betted big out of the greed. Each of the crisis infested banks had leaders who were blinded by this greed and didnt take any steps to stop the dance. The reasons of agency problem does exist but there was also the pressure from the shareholders and employees. If you are not earning and taking risk similar to other banks, you as CEO can be removed by the board. There are evidences where the CFOs of these banks made the role of the risk assessment department smaller and smaller so as to concur with CEO and board's assessment for taking larger risks. What we learn here is that it is very difficult for people to stand, raise their hands and say that this policy is wrong since that is going against what the market and external surroundings are saying. The herd behavior was followed by all the banks with no leadership shown by any of the parties.

The reason is that Leadership in getting people to stop what they are doing and chart a new course is very difficult since getting support for this is near impossible. It is easy in the times of the recession since the people have no other way out. But to get people to follow a difficult path when they have a choice to follow a smoother one on the other side is the most difficult things to do and that is what is required in a true leader.

Essence of capitalism

"The essence of capitalism is creative destruction" -- Joseph Schumpeter .

By saving the banks, are we breaking the basic tenet of capitalism?

Hue and cry about nothing?

There has been widespread condemnation of the recent announcement of anti-tax haven policy by the United States government in the Indian media and people have expressed concerns that this will lead to job migration back to United States from India. Mr. Obama in his speech also emphasized this point that the new policy aims to reward companies that create jobs in Buffalo rather than Bangalore. But the tragedy behind this that both the public and media have not separated the populist speeches and the real effect on the current labor market.

In India also during elections and policy announcements, we see politicians making hyperbole claims as part of playing to the gallery and this policy announcement is also a similar example. The first question we need to look here is how much tax rates play a part in the final investment decisions. Though the differences in instutionalised tax rate can be large as 30% in India to 40% in United to zero in Cayman Islands, the actual tax rate paid by companies cab vary a lot from this rate since the government subsidies and the very complicated tax laws present in every country plays a role. Even if the difference in tax rates can create a positive difference in NPV for two investments, other factors like availability of resources both human and machines, strategic policy, local laws, competitive advantage etc are more important in making investment decisions.

Even if the argument is made that tax rates does make a difference, the question is how much of an influence will it have for jobs in India. According to Wall Street Journal Editorial " The current tax law in United States require US multi-national to pay taxes according to local tax rates and when the company brings the profit back to US for paying dividends or investment, the US company is liable to pay tax at US rate at this profit while claiming a credit for the tax paid in local country. So if say in Ireland where tax rate is 12.5%, the US company brings back the profit to US, then the company will pay a tax at the rate of (40%-12.5%) where tax rate in US is 40%. What the Us government's new initiative aims to do is that the period for which profit that can be kept in foreign locations is reduced so that the company can bring those profits quickly and invest in United States." But by this logic, this new policy doesnt have much influence for India since India has already high tax rates and the investment in India is not due to tax arbitrage but due to labor/knowledge arbitrage.

I read that Mr. Yashwant Singh made this also a poll issue which shows how much the politicians all over the world are well connected in criticising each other and in the end getting their own way with their respective electorates.

I dont have any knowledge about tax laws and may be these policies would have effect on Indian jobs in future but the underlying thing remains that taxes are not the only input towards investment decision and till we maintain a liberal investment climate with availability of quality human resource, we will continue to attract investments and creation of Indian jobs. Globalisation hopefully in its second avtar is an irreversible phenomena and any attempts for protectionism will backfire.

"Rush Limbaugh" post....

So i was hearing the name "Rush Limbaugh" many times in the last month out of my timepass of watching CNN nowadays. One out of five speakers/expert I guess used to refer this guy and so I decided that lets find out more about him. So here is what I find out about him. He hosts a radio show where he views his conservative views. He is prinicipally opposed to liberal politics and wants the republican to go back to its conservative roots. This conservative roots refer to espousal of policies like small government, minimum taxation, individual liberty (no gun control), anti abortion, belief in faith(religion) and possibly opposition to affirmative action as no identification of race as any criteria for affirmative or discriminative action(not sure of this). Can you believe it that there are clubs/committees in USA which supports zero taxation policy? It was difficult for me to believe that. But lets not digress from the topic.

So I visited his website(www.rushlimbaugh.com) and read some(emphasis on some...) of the transcripts of his radio shows. I did expect conservative views but this guy is just a petty showman in my view. In one of the shows, he supports/propounds the theory that Obama is supported by liberal conspiracy to destroy America and he is an agent of George Soros, Saudi Arabia and any other(u name it)... I cant follow his logic and reasoning and this is what I understand is my fear behind this insistence on logic. By logic one can I believe prove a monkey a man and vice versa. And hence by bizaare reasonings, this gentleman is running his radio shows and he is pretty popular and earning millions of dollars. I have heard similar bizaare logic when I hear of leaders from VHP, Bajrang Dal in India how the muslims is out to kill all the Hindus in India and or how CIA is bank rolling all Indian politicians .

A recent incident was after Mumbai terrorist attacks when a mullah on Pakistani television was supporting that this incident was the handiwork of RAW intelligence and RSS to do something I forgot....I was of the opinion that this type of ultra-stupid logic was the output of immature democracies like ours and Pakistan and as we mature, we will be able to put them to grave.. But Mr. Limbaugh broke this dream..

My conclusion is that the right wing conservatives or for that matter left wing dreamers will always have listeners and in times of trouble, their supporters are going to increase... we just have to make sure that we find the best ways to keep them in check and not to wreak havoc on the society by coming to power directly or indirectly...

"Politics and power are same everywhere..Politics breeds power...power breed meglomania ..and meglomania brings corruption which in turn completes the circle by encouraging politics..."

"Pakistan" the new buzzword!!!

While growing up, I saw Indian foreign policy overly concerned with getting "Kashmir" discussed in the world forums. There was a strange reluctance in Indian government to discuss Kashmir and the whole of Indian foreign policy effort was spent in making sure that Kashmir word is not spoken either at United Nations or in the bilateral talks. I remember the opposition parties making issues whenever any bigger power foreign minister uttering the word and the Indian foreign minister spending all his energy to convincing the country that there is no internationalization of Kashmir issue. The argument put forth was that Kashmir is not the issue but Pakistan is and the discussion shall be performed on how to stop the increasing islamisation of Pakistan and make it stable. But the top powers never listened and we kept on wailing. I found it demeaning the way the top powers treated India on this aspect and the use of Kashmir buzzword as a way to let Pakistan score points.

Now the situation has reversed. After September 11 and the ouster of Taliban from Afghanistan to Pakistan, we see Pakistan becoming the new buzzword. Being stuck with the television where the only watchable channels are CNN and BBC, I have observed the increased frequency of usage of Pakistan as the new hot spot of world problem other than Iran, Middle East and in some measures North Korea. The American President Mr. Obama has emphasized that the war in Afghanistan is the top priority and Pakistan-Afghanistan is the new axis of the same problem - Talibanisation. Gordon Brown also talked on similar lines when he visited Afghanistan and Pakistan in the last month. All the TV military experts and opinions (source: nytimes) are speaking in the same tone.

So now we have a situation where what Indian foreign policy wanted has been placed on their plate by the unfortunate circumstances. Kashmir has taken a backseat and Pakistan is the new flashpoint. It will be very interesting to see how the Indian foreign policy is shaped by this new circumstance. There has been talks of including India in any discussion on Afghanistan both by the White House and opinions in the print media. And now it is incumbent upon India to take the lead and take the seat of superpower in Indian subcontinent which it aspires to become.

"Diamonds are forever"

http://www.theatlantic.com/doc/198202/diamond

This article spanning seven pages is one of the most interesting piece I have read in recent times. It explains how the advertising campaign "Diamonds are forever" was coined and successfully advertised throughout the world to make this one of the enduring and everlasting campaigns of the last century. The interesting aspect of this campaign is not only in its origination but how the advertising campaign was modified over time to make it in sync with operational strategy.

To quote from the article "Since "young men buy over 90% of all engagement rings" it would be crucial to inculcate in them the idea that diamonds were a gift of love: the larger and finer the diamond, the greater the expression of love. Similarly, young women had to be encouraged to view diamonds as an integral part of any romantic courtship.

Since the Ayer plan to romanticize diamonds required subtly altering the public's picture of the way a man courts -- and wins -- a woman, the advertising agency strongly suggested exploiting the relatively new medium of motion pictures. Movie idols, the paragons of romance for the mass audience, would be given diamonds to use as their symbols of indestructible love. In addition, the agency suggested offering stories and society photographs to selected magazines and newspapers which would reinforce the link between diamonds and romance."

............"Since Great Britain has such an important interest in the diamond industry, the royal couple could be of tremendous assistance to this British industry by wearing diamonds rather than other jewels"...............

Another interesting aspect is that how diamonds were made popular in Japan. To quote "Until the mid-1960s, Japanese parents arranged marriages for their children through trusted intermediaries. The ceremony was consummated, according to Shinto law, by the bride and groom drinking rice wine from the same wooden bowl. There was no tradition of romance, courtship, seduction, or prenuptial love in Japan; and none that required the gift of a diamond engagement ring. "

Pretty difficult for a company where your product is not part of the culture and you have to start a new tradition. So what De Beers worked out a slow but steady information campaign where diamonds became an integral part of advertising campaign. To quote "J. Walter Thompson began its campaign by suggesting that diamonds were a visible sign of modern Western values. It created a series of color advertisements in Japanese magazines showing beautiful women displaying their diamond rings. All the women had Western facial features and wore European clothes. Moreover, the women in most of the advertisements were involved in some activity -- such as bicycling, camping, yachting, ocean swimming, or mountain climbing -- that defied Japanese traditions. In the background, there usually stood a Japanese man, also attired in fashionable European clothes. In addition, almost all of the automobiles, sporting equipment, and other artifacts in the picture were conspicuous foreign imports. The message was clear: diamonds represent a sharp break with the Oriental past and a sign of entry into modern life."

And the next part of the story is the icing on the cake. De Beers and its allies lost their monopoly over diamond trade when diamond mines were discovered in Siberia. De Beers entered into an agreement with the Soviets to maintain the single channel for controlling the world supply for diamonds. But Soviet diamonds were smaller and hence De Beers has to reconsider its advertising strategy from its earlier encouragement and advocacy of dimaonds of large size.

"A strategy for small diamond sales" was outlined, stressing the "importance of quality, color and cut" over size. Pictures of "one quarter carat" rings would replace pictures of "up to 2 carat" rings. Moreover, the advertising agency began in its international campaign to "illustrate gems as small as one-tenth of a carat and give them the same emotional importance as larger stones." The news releases also made clear that women should think of diamonds, regardless of size, as objects of perfection: a small diamond could be as perfect as a large diamond."

From an opionion poll conducted by the advertising agency, this very interesting insight was obtained which was exploited by the agency in its promotion. "Women are in unanimous agreement that they want to be surprised with gifts.... They want, of course, to be surprised for the thrill of it. However, a deeper, more important reason lies behind this desire.... "freedom from guilt." Some of the women pointed out that if their husbands enlisted their help in purchasing a gift (like diamond jewelry), their practical nature would come to the fore and they would be compelled to object to the purchase."

....................

"Man plays the dominant, active role in the gift process. Woman's role is more subtle, more oblique, more enigmatic...." The woman seemed to believe there was something improper about receiving a diamond gift. Women spoke in interviews about large diamonds as "flashy, gaudy, overdone" and otherwise inappropriate. Yet the study found that "Buried in the negative attitudes ... lies what is probably the primary driving force for acquiring them. Diamonds are a traditional and conspicuous signal of achievement, status and success." It noted, for example, "A woman can easily feel that diamonds are 'vulgar' and still be highly enthusiastic about receiving diamond jewelry." ............

A very interesting read....

Goldman and Morgan Stanley chart separate paths

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.DWey.dMKrw&refer=home
The article at bloomberg describes the separate paths taken out by Goldman Sachs and Mogran Stanley in this crisis. While Goldman has increased its risk appetite by taking a higher amount as Value at Risk and reporting a record revenue of $9.4 billion, Morgan Stanley has maintained a conseervative stance pulling out of propreitary trading and decided to focus principally on its role as financial advisor and broker and in the process posting a loss of $177 million. Though the figures for profit and loss are debatable due to the murky accounting practices being followed by banks and hence are nor reliable, it is pretty clear that the banks have charted a different course in risk taking. Morgan Stanley CEO has said that the credibility of bank has to be strengthened and its current weak position warrants reduced risk taking and this policy will help the bank to reap dividends in the long term.

Goldman sources are of the opinion that the risk was there to take according to situations. The competition was less and the available large bid-ask spread in some securities make the risk taking a well planned strategy. And it is finally down to the firm's DNA. "Goldman is Goldman". The risk taking is part of the firm's gene and will remain so. Their offer of giving back the TARP money and hence get out of any possible government censure in future is part of its strategy to reward the risk taking behavior as they have done till now.

Which strategy is better- only time will tell? The market is fluid and dynamic and a servere downturn or upswing in the economy will decide. But this is an example of the distinction in business strategies advocated in times like these. One strategy will be to remain conservative, count your chickens, consolidate your position and keep on the lookout for the situation to improve. The alternate strategy is to use this times to increase your market share due to reduced competitive forces operating in the market place. Which strategy a firm adopts is entirely dependent on the circumstances facing the specific firm and the marketplace in which the firm is operating.

In this case, Morgan was in a more precarious position than Goldman during the crisis and hence a conservative stance is warranted but arent they in danger of losing market share and opportunity to earn precious revenues by following this stance... well time will tell........

Why keynes is popular during recession?

With this recession, we again see keynesiasm raising its head vis a vis monetarists and all the major governments including United States, Britain, China taking the path of spending out of this recession. In his landmark thesis, Keynes said that to get out of recession, fiscal measures are critical since that will lead to increase in demand and hence finally getting out of recession. Mr. Roosvelt followed the advice in bits and pieces and the notion of large government took centre stage in American politics. But during times of Regan, Margaret Thatcher, Bush, Clinton and Blair, monetarists took a precedence over Keyneisians and we saw the government taking a back seat letting the invisible hand of market to take care of business cycles. But with this recession , now both the American and British government has announced broad fiscal measures to start public spending and hence increasing the role of government in economy essentially following the prescription of Keynes disregarding the monetarists "who believe that government intervention is going to make the situation worse and the government shall allow the natural business cycle to take its own course".

The question is why keynes becomes popular whenever there is recessionary tendencies in the economy. The answer can be found in what types of government are in power. Britain is currently governed by Labor party whose leader Gordon Brown has distanced the party from "New labor" belonging to era of Tony Blair. The new budget with measures to tax the rich gives the notion that this Labor party wants to capture the imagination of policies using the socialist mantra of old labor with cries of class war etc. Similarly in United States, we have a democratic president who will be regarded as socialist if some of the republicans have their way. Certainly Mr. Obama is not a socialist but his policies are left to the centre where the belief in large government interventions in health care, education etc and taxing the rich being major part of his policies.

So after estabilishing that we have political parties in power in the top two developed countries which are left to centre and hence they are spending and taking fiscal maesures to spur the economy. But underlying this is why these parties become popular during recession. The reason why these parties are in power may be mutifold but I belive one of the reason is their love of keynesiasm during the times of recession. Recession invariably leads to increase in unemployment, worsening of living conditions of people etc. If the government follows the monetarists' advice, then the politicians will be telling their electorate that the misery is part of business cycle and this will pass and we shouldnt intervene because in long term, any measures hence taken will come back to bite us. Instead if the government follows Keynes, the politicians would be giving the impression of doing somethinng to ward away the recession. They will look busy and always announcing spending policies and the electorate will be safe in the notion that the politicians are doing something to get out of this economic condition.

This, I believe, is the major reason that the politicians in power would like to follow Keynes rather than monetarists and do nothing. Keynes make the politicians look powerful and that is what all leaders want. Either prove that they have powers to change the destiny of their followers or "give the impression" that they do have such powers.

Another reason that Keynesiasm works that the government fiscal measures increases the expectation of people that economy will improve since someone is doing something. The confidence in economy is a virtuous circle which has the power to finally bring the economy out of the recessionary cycle. Thats why possibly the talks of "green shoots" by all the politicians and bankers. The argument against this is that people may think that the government spending in long term will lead to higher taxes in future and hence one shouldnt invest now. But people generally are not long sighted and took these short term fiscal measures as confidence building and start investments and spending.

Management steps during recession

Possible management steps in recession in decreasing order:
Reduce operating costs
Increase productivity
Introduce new products/market offerings
Reduce capital investments
Restructure
Hire talent that otherwise would not have been available
Seek merger or acquisition opportunities
Leave certain markets
Increase Hedging
Other
No steps


No action is the step followed by majority of the companies since the belief is these are temporary changes or even if permanent changes then what else they can do. Communication to investors is one of the prior steps to increase confidence among investors before share buy back.

(Source: One of the online polls )

Is globalisation under pressure to survive?

The globalisation in its second birth after the highly globalised world economy before the first world war has been kicking and raring to transform the world. With the technological innovation of internet and new business models like global business delivery and outsourcing in manufacturing and services, the globalisation seems to have been turning a new leaf with the possible results of being fully connected everywhere. The migration of goods across the borders was made easy and there has been spectacular increase in world trade after agreement on GATS principles. Agreements on trade policies turn the tide towards enforcement of national treatment for multi-national companies and hence flow of investment from west to east and north to south did occur. The nature of investments may be debatable but the specatacular growth of economies of south east asian countries and china does owe a lot to the world trade.

But this recession which is supposed to be as bad as great depression is going to test many governments and economists with the decisions on whether to encourage globalisation or not. Global depression of 1930s is supposed to be one of the prime reasons why globalization in the first phase reduced and finally led to an era of over-protectionism. Looking at this recession and the noises emnating from various quarters in government and society in general, the fears of the re-emergence of bottlenecks for globalization cant be ruled out. There has been demands of protecting indingenous industries both in America and European countries. To quote French president Nicolas Sarkozy "I want us to stop out-sourcing and if possible in-source. If we give money to the auto industry to restructure itself, it's not so we can hear about a new plant moving to the Czech Republic or wherever" . Euro which is " the charming example of a possible united global order" is under pressure in the new recession. In one of the articles at troymedia.com, Dr. Stephen Murgatroyd outlines the challenges faced by Euro in this recession. All the countries by adoption of Euro has lost control on their monetary policies and it is now the European Central Bank that will decide the interest rates who will need to take care of whole of Europe and not of individual countries constituting European Union. When such a challenge like a recession is present before the countries, then the real mettle of unity in a single union is rightly tested.
Demand for protectionism is the foremost reaction for any society whenever there is increase in unemployment which will definitely be one of the consequences of this recession. The bigger countries in the European Union will have to drag along the other poorer countries in Europe which aimed to take advantage of being part of European Union.
China on the other hand has decided on a large fiscal boost so as to encourage domestic demand and hence reduce its dependence on exports for growth.
Is the time coming where after 5 years from now we will see a reverse trend in globalization and see a reduction in world trade levels from now? Well that is an ominous news for the LDC countrires which were hoping to use world trade to get out of poverty...........

A brave president

Mr. Barak Obama in a speech at CIA headquarters said :What makes the United States special, and what makes you special, is precisely the fact that we are willing to uphold our values and our ideals even when it's hard, not just when it's easy; even when we are afraid and under threat, not just when it's expedient to do so. That's what makes us different" ..The speeches that we have heard but rarely implemented in our modern times. In this age of nationalistic jingoistic world of ours, I have rarely seen a president/national executive telling his armymen/intelligence that I am going to make your task harder. And here we have an American President saying it to its troops, sorry boy no torture, your job is to bring in good intelligence without torture.. that is surely a brave thing to do..right thing !! well we will know in the future..

In the same speech he said that we have made mistakes in the past and its time to admit the mistakes and go ahead. Accepting mistake by predecessor is easy to do..i would judge him when there are mistakes in his presidency(of course there will be) and then what he does abt it.. the "no torture" policy will also be trial when there is another terrorist attack( i pray not..but terrorists also pray) and we will see how much Obama is faithful to his values and ideals..

Ending torture as method of interrogration, talking to europe and south america as equals, speaking about a nuclear free world, this President has made all the right speeches and pressed the right notes in his first 100 days..On the home front, saving banks and pressing for clean energy has been the right steps in my view while there could be arguments on both sides whether he has been too conservative or lenient in fiscal measures..

This president is faced with the most difficult economic , social and political conditions when he assumed power.. the way foreward is only UP but it needs careful management to make sure that America and we world doesnt fall in abyss..

So after his 100 days , I will give a high five to his presidency and sincerely hope he continues on this path when it will be more difficult.....

the spirit of benjamin button....

Some years before I have heard a quote in my favorite soap "Seinfeld".
Thus spake George Constanza "The lord of losers"

"The most unfair thing about life is the way it ends.
I mean, life is tough. It takes up a lot of your
time. What do you get at the end of it? A death.
What's that, a bonus? I think the life cycle is all backwards.
You should die first, get it out of the way. Then you
live in an old age home. You get kicked out when
you're too young, you get a gold watch, you go to
work. You work forty years until you're young enough
to enjoy your retirement. You drink alcohol, you
party, you get ready for high school. You go to grade
school, you become a kid, you play, you have no
responsibilities, you become a little baby, you go
back into the womb, you spend your last nine months
floating......... then you finish off as an orgasm."

The movie "Benjamin button" seems to be inspired from this.
Though the end is not happy for Mr. Button in the movie as suggested
by George, the idea is something astonishing ..so simple and surprising...

The alternate thinking sometimes does bring surprising statements to the fore
which makes up for the fun in life...

soft learning from east asian

Hearing many times from fellow software engineers that we in India do all low grade software job in India while the real innovative work is done by Americans. The industry is based on wage arbitrage which will go away once the other countries catch up. Then either wages will go down or software industry will die in the same spectacular fashion as it has risen in India..

Studying up the Japanese and other East Asian tigers'growth in the last 40 years between 1950-90, I find an uncanny resemblance between current status of software industry in India and the manufacturing sector in East Asian Tigers at the start of their growth period. Many of the technologies for manufacturing sector were licensed from their American counterparts primarily acquired through extensive interaction from the export led economy. The wage arbitrage and government support through various government measures helped the nascent manufacturing sector. And what finally happened was remarkable. Japanese got their best engineers to work on the shop floor and not on the design and they improved the manufacturing processes. Total Quality control, Just In Time Inventory were the products of this process improvement and in due time these firms became more efficient than their American counterparts. Toyota though has gone in red for the first time in 20 years is in a much better position than GM and ford.

The software sector in India has also used the licensed technology mostly from developed world (America and European countries) and started an industry based on wage arbitrage and small government support(like export incentives). What the industry need here is to use this arbitrage opportunity to develop processes which makes the Indian firms more efficient and simultaneously move up the value chain. This will not only provide the industry required differentiation in the increasingly competitive industry ( competition from other low wage countries) and will also allow industry professionals to earn higher wages due to higher skill required when moving up the chain.
But what the industry require is that the best brains as in the case of Japanese manufacturers like Toyota to work and improve the processes and not crave for the high funda work which is the current norm in the industry. Design is what geniuses shall do but if customers are paying for the processes, that shall be the focus of the genius.

This will allow the software industry to grow and have a large impact on Indian GDP. Though the impact will not be same as what manufacturing did for east asian countries, as the labor intensity for the software industry is low and the level of education in India do require a growth in manufacturing and agriculture sector for India to achieve an inclusive growth.