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."

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"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....