Wednesday, September 28, 2016

India's Pak policy

It is odd that India expects the world to declare its neighbour a terrorist state without itself doing so officially. It is equally strange that we want the world to impose economic sanctions against Pakistan while we continue to offer it MFN status.

Foreign policy needs to be logical and firm. Flipflops do not make a policy. Every nation in the world barring India ensures that its policy is first protective of its own interest. Any other dominant priority is misplaced.

The U S despite knowing that Pakistan is the most prolific generator of terror treats it with kid gloves. This is because the U S has to depend on Pakistan on some issues. Pakistan was protecting Osama Bin Laden and yet the U S was not willing to call Pakistan a terrorist country. Russia welcomes joint defence exercises with Pakistan for its own strategic benefit.

Since we are most vitally affected by cross-border terrorism, we have to defend ourselves muscularly. The world respects that nation which proves it is capable of defending its own interests. Let us not expect anything else from the world and get disappointed.

Wednesday, September 21, 2016

Stumpf stumped

John Stumpf, CEO and Chairman of Wells Fargo, was earlier a non-controversial bank executive. He was recently questioned by the U S Senate wherein Sen Elizabeth Warren found him to be a 'gutless leader'.

Wells Fargo was comparatively untainted by the banking excesses which characterised the 2008 crisis. It is now revealed that since 2009 the bank has been opening sham accounts and issuing fictitious credit cards. In effect, persons who had not requested opening of accounts were charged some fees unauthorisedly.

This fraud has been attributed to the pressure created to meet targets of individual employees. How could such an obviously egregious malpractice go on for seven years before getting outed?

Carrie Tolstedt was in charge of banking operations. She was aware of the problem. Stumpf admitted that no action was taken against her because her performance was otherwise spectacular. A similar treatment was meted out to Nick Leeson by Barings Bank because he was instrumental in generating huge profits. There is a lesson here. If supervision of performers by management becomes lax, they tend to degenerate into 'rogue' performers.

Management by targets suffers from two main weaknesses. Employees limit their performance to targets even if more is achievable. Secondly, the pressure to achieve targets may result in employees cutting corners and committing frauds.

John Stumpf is both CEO and Chairman of the board. It is moot whether combination of these two positions makes frauds more likely.

Sunday, September 18, 2016

Donald Trump or Hillary Clinton ?

The presidential contest between Donald Trump and Hillary Clinton is becoming more interesting by the day. Their styles are different, their abilities vary and the only thing common between them is their low level of credibility.

Trump is a rank outsider to Washington politics whereas Clinton was born and bred in it. Trump has been a longtime businessman facing both successes and failures. He has authored books (perhaps ghost-written) conveying practical lessons for doing business. If presidency is considered as CEO-ship, there is no reason why he is not acceptable as president.

Clinton (SHillary Clinton as Nassim Nicholas Taleb derisively calls her) is a past master of politics and intrigues. Her substitution of private email for legally mandated government email while functioning as Secretary of State under President Obama was typical of her guile. Well-connected and well-funded, she is a formidable contestant. However, she is not invincible as Obama's easy victory over her in presidential primaries in 2008 had showed.

Trump is waxing proud about his health despite his over-weight. Clinton's unseemly unsteadiness in a recent function in remembrance of 9-11 has certainly created suspicions in many minds. Her critics have pounced on this ill-luck to declare that her problem is both her health and her stealth. Her normally sophisticated expressions are in striking contrast to Trump's uncouth style of making polarising comments.

It is surprising that American media is overwhelmingly in favour of Hillary Clinton. This may create some sympathy for Trump in people's mind. This is one of the reasons why sometimes underdogs ultimately prevail.

Everyone looks forward in anxious expectation to November 8th which day will  decide global destiny for the next four years.

Added on October 11: It is a pity that the choice is between a groper and a schemer. There are two more candidates in the fray namely Mr.Johnson and Dr.Stein. Johnson is a Republican, a former Governor of New Mexico, a social libertine and a fiscal conservative. He is known for his abject ignorance of anything that is not American. Stein is a doctor from Harvard University and  an espouser of Green issues. She is  a Democrat.

Friday, September 16, 2016

Quota for teachers?

A PTI report warns that HRD Ministry intends to introduce caste-based reservation in teaching positions at IIMs. This move is as shocking as it is surprising. There are great teachers in all communities and castes; institutes are desperately trying to attract them into their fold. However, to compel IIMs or for that matter any educational institution to tweak their selection procedures on a caste basis is short-sighted.

Persons who belong to a caste that has suffered historically from social injustice need preferential treatment to enable them to overcome social handicaps. Such students obviously need to be helped through quotas. Extending quota system to teachers,however, is a self-defeating exercise that is better not experimented with. Students belonging to any caste should not be denied the opportunity of being taught by the best teachers simply because such teachers belong to a caste that is already statistically over-represented in the teacher community. Similarly, students should not be forced to be taught by a teacher simply because the teacher is from a particular caste.

It may be politically expedient to introduce the quota system among teachers. But there is no surer way to stall or slow down the progress of future generations.

Copyrights and photocopying

In a historic (not necessarily just) judgment , the Delhi High Court has held that photocopying books is not an infringement of publishers' / authors' rights. Some activists and intellectual property lawyers are justifying this view as paramountcy of public good over private rights.

This view is debatable. Just as private rights cannot be at the cost of public good, public good also cannot be to the detriment of private rights. If there is no restraint on photocopying, publishers of books will have no incentive to continue their business. In the process, public will lose in the long run. The judge should have empathised with the publishers a little more.

Interestingly, the name of the judge who pronounced this judgment is Rajiv Sahai Endlaw.

Thursday, September 15, 2016

Entitled politicians

One former Finance Minister's wife and son were summoned by investigative agencies to obtain details about some alleged criminality. Both of them have refused to visit the investigators' office and are quoting laws as to why they cannot be summoned. The lady says that being one, she can be questioned only in her house. The son says that unless he is told the subject of investigation, he will not appear.

These arguments may be technically correct. But, do they try to ensure that others are also provided similar rights? The New Indian Express has published a series of articles referring to the alleged misdemeanours of the peripatetic son.

The present government makes noise about the scams of earlier government whenever it suits them, but does not take effective steps for prosecution and punishment. It is difficult not to entertain the thought that BJP and the Congress have an implicit understanding to keep barking and avoid biting. This is not in national interest.

Wednesday, September 14, 2016

Bitter Sweet

Following report shows how some Harvard professors connived with the sugar industry to sugarcoat sweets:

Sunday, September 04, 2016


Mother Teresa has been canonised; she was earlier awarded Bharat Ratna and Nobel Peace prize.

Despite her greatness, she was not spared by critics. Since criticism emanated from noted writers like Germaine Greer and Christopher Hitchens it gained easy currency.

Germaine Greer, a feminist of influence, was offended by Mother Teresa's unstinted opposition to abortion. Hitchens influenced by atheists like Richard Dawkins was put off by her religiosity.

Criticism was mainly about lack of modern medical facilities for the poor who were looked after by Mother Teresa and her receiving the best medical attention. This criticism was illogical because no individual however noble can afford to extend costly medical treatment to the multitude of the poor who were neglected by others before the merciful lady took them in her fold. It may be good rhetoric to argue that she loved poverty and not the poor, but it is bad reasoning.

We should be thankful that she accepted medical treatment for herself because it lengthened her life which benefited thousands of the poor and the uncared. Her aversion to abortion was a religious tenet.

To say that Mother Teresa was a fanatical fundamentalist fraud (Hitchens said so) is nothing short of a canard.

Saturday, September 03, 2016

Raghuram Rajan's legacy

As Raghuram Rajan demits office today (Sept.4th), it is tempting to dwell upon his achievements and failures though it may well be argued that it is too early to know the consequences of Rajan's actions as Governor as one of the most respected central banks in the world.

He has his share of admirers and critics. But no one can contest the fact that he made RBI Governorship more visible and more audible.  His argument that the Governor had a duty to be articulate on issues economic and quasi-economic may not have many takers. However, he religiously practised what he claimed was his duty.

He focused singularly on containing inflation. The government constrained him (most probably, he loved this constraint imposed on him) by holding him accountable to the single target of 4% plus or minus 2% inflation p.a. This was manna from heaven for a monetarist like Rajan. He made it appear as if he had a cross to bear and therefore he was forced to be insouciant to the need for growth.

Rupee was tumbling when he took charge. He stabilised it through innovative FCNR schemes. However, Rajan said oftentimes that these schemes were not his idea. He created many schemes for revitalisation of stressed assets. Results of these schemes could not have delighted him. He forced more transparency on commercial banks. Dirty linen became public but was not cleaned. Rajan was attempting a Sisyphean task.

Rajan's contribution towards turning the economy around may not be obvious, at least as yet. Still his willingness to attempt some bold steps like confronting the NPA problem head-on and making the banks more transparent which were not in the radar of former Governors deserves our gratitude.