Crime and Punishment

Following is a report from NYTimes:

"WASHINGTON — Little more than a year ago, Jesse L. Jackson Jr. was a popular young Democratic congressman pushing to increase the federal minimum wage, an issue that fit his reputation as an advocate for the less fortunate, especially those in his Chicago-area district.

But on Wednesday, the former congressman was a felon standing in a federal courtroom in Washington to receive his sentence.

Mr. Jackson, 48, received 30 months in prison for spending $750,000 from his campaign on personal items. His wife, Sandi, 49, was sentenced to 12 months in prison for omitting $580,000 in income from the couple’s tax returns while they lived lavishly.

“The inescapable fact is that you and Sandra Jackson used campaign funds to sustain a lifestyle that you cannot afford,” Judge Amy Berman Jackson said before announcing Mr. Jackson’s penalty.

The judge granted a request from the couple, who have two children, ages 9 and 13, that they be allowed to serve their sentences one at a time. Mr. Jackson will report to prison on or after Nov. 1. When he is released, Ms. Jackson will have 30 days to surrender.

“I am the example for the whole Congress, and I understand that,” Mr. Jackson told the judge. “I didn’t separate my personal life from my political activity, and I couldn’t have been more wrong.”

Mr. Jackson wept as he stood before the packed courtroom in United States District Court. He apologized to his parents, who sat in the front row next to his siblings, and said he accepted responsibility."

The newspaper adds:

"A lawyer for Ms. Jackson, Dan Webb, sought to portray his client as a doting mother whose absence would cause deep psychological damage in the children. He had requested a sentence of probation with community service.

In rejecting that request, Judge Jackson said to Ms. Jackson: “The court did not put your children in this position. The government did not put your children in this position.” "

Would a similar thing ever happen in India? Will our courts work speedily, will our politicians feel remorse for their pervasive peccadilloes?

Scans and scams

In one of his rare contacts with Manmohan Singh, Obama thanked the Indian prime minister for supporting the U S's surveillance of foreign nations and assured him, "Yes, we scan". This elicited a spontaneous and truthful response from Singh, "Yes, we scam". Obama was not sure whether he heard the prime minister correctly. He is still reviewing the tapes of the telephonic conversation.

Obama ordered enhanced surveillance of Indian government ministries. He was amazed at the extensive use of American tactics by the Indian government. In a most secret meeting of Sonia Gandhi's trusted advisers which also doubled up as a high-powered ministerial committee, it was decided to do an "operation twist" and increase the scope of 'QE'. The committee was eager to gather 'bipartisan support' so that filibustering by the prime minister and his economist-friends would be prevented.

President Obama did not know that operation twist means resorting to ordinance instead of parliamentary legislation, QE is an acronym for questionable expenditure which will ultimately go into politicians' coffers and bipartisan includes both Soniaji and Manmohanji. GOI soon issued the Food Ordinance. 

S&P impoverishes America

At last the Rubicon has been crossed. Standard & Poor's has downgraded the American sovereign long term rating from AAA to AA+ and as if to add insult to injury has placed the rating in negative watch ( sorry, it is not negative watch; it is negative outlook  :  corrected after seeing the comment below) which means further downgrading is not ruled out.  China which is rated two notches below i.e. AA- has advised the American government to give up its addiction to debt and to learn to live within means. China, a communist country wants America, a capitalist nation to trim its bloated "social welfare" expenses. It is difficult to come across a greater irony.

Has S&P jumped the gun in an attempt to undo the damage that resulted from its inability to foresee the subprime crisis? In case this interpretation is correct, we need to appreciate that two wrongs do not make a right.

Moody's and Fitch have not downgraded America for the present. Is S&P trying to prove its leadership among ratings companies once again?

Whatever be the reason for this epochal decision, members of American treasury and Congress have only betrayed their boorishness by criticising S&P for its weighty decision. At present India is rated BBB- and any downgrade will mean slippage into speculative zone with all its attendant negative consequences. You can trust our politicians to test that possibility any time soon.

Respect for rule of law

So Dominique Strauss Kahn is out of IMF and is unlikely to be in the race for French presidency. The American law enforcement system has once again acted with celerity. This is in sharp contrast to what obtains in India. The New York police nabbed him just in time before he could depart to Paris, placed him on suicide watch and arraigned him before the judiciary in time. Status, wealth and political influence of the accused did not detract the investigating authorities from their job. Richard Nixon had to resign for committing a crime; Bill Clinton faced impeachment proceedings for a sexual misdemeanour. There was no escape from the long arm of the law.

Why is the situation in India different? The present Supreme Court Chief Justice, Justice Kapadia happens to be a bold and unbiassed deliverer of justice. Hence there are instances of criminals being caught and brought to justice, for a change. It is more than likely that his successor, whoever he is, will be less atypical and more amenable to political pressure. It will soon be business as usual in India. For example, it will not be too long before the accused in the 2G scam get back to their usual ways of skulduggery. The basic difference between India and America is that it requires a strong-willed person to set right the legal system in India whereas no one, however strong-willed, can crook the legal system in the US.

Toyota in trouble

The "Toyota Way" is no more the Holy Grail of automobile industry. Toyota is well on its way to set up a new record in the number of cars recalled for repairs. It is displacing Ford from this dubious position. Problems with accelerator pedals and floor mats have resulted in more than 8 million cars being recalled. Electronic systems also seem to be suspect.

Toyota has long been known for kaizen and quality. Why did Homer nod and Toyota recall? It has recently overtaken General Motors as the largest producer of automobiles. Focus on the topline seems to have diverted top management's attention from quality. The problem of sticking pedals has been aggravated by severity of cold conditions in the U S.

Spate of customer complaints is a new experience for Toyota and its CEO,Toyoda. It remains to be seen how the Japanese manufacturer will come out of this crisis. Japanese are infamous for their slow and studied response. They cannot afford that luxury now. American auto-makers are waiting on their wings to bounce back.

Fatal insensitivity

The Haiti earthquake has devastated the country beyond recognition. The American government acted with a remarkable sensitivity and rushed succour to thousands of the dispossessed. Hundreds of critically wounded Haitians were airlifted to hospitals in Florida and other neighbouring states for emergency treatment. Unfortunately that has now come to an abrupt end. Florida's governor has pleaded inability to take in any more injured unless the Federal government bears the cost of treatment. This tiff between the state and the federal government is bound to cause a bad name to the U S despite their earlier aid. Maybe philanthropists like the Gates Foundation can step in. In the meanwhile, time is fast running out for the critically injured and fractured.

The China puzzle

Stephen Roach, a well known economist, in his new book "The Next Asia" quotes none other than the Chinese premier Wen Jiabao as saying, "The Chinese economy is becoming increasingly unbalanced, unstable, uncoordinated and unsustainable". Very strong words indeed especially from a prime minister. The words were uttered in March 2007 and are now famously called as "four uns". He could as well have added that the Chinese statistics are unreliable, unsound, untrue and unscientific.
Combination of unbalanced economy and unreliable data is a potent mislead that will belie all our predictions and unsettle all our plans. Therefore the hype regarding this century becoming the Chinese century or even the Asian century is far-fetched.
American economy is a learning economy. It is also innovative. The lessons of ongoing economic crisis will enable the American economy to correct its extravagance, pull up its socks and reinvigorate itself. As time passes by, the Chinese threat to US economy will recede further.

Dollar in doldrums

There is a news report in The Independent that the Gulf countries, Russia, China, France, Japan and Brazil (there is a reference to India also) have recently decided to start quoting for oil in non-US Dollar currencies. The oil price will be linked to a basket of currencies including Yen, Yuan, euro, a new unified currency planned for nations in the Gulf Cooperation Council including Saudi Arabia, Abu Dhabi, Kuwait and Qatar and gold.
The authenticity of the report is not yet established. If true, it is a momentous event heralding a revolutionary change. If apocryphal which is more likely, it means that China and perhaps Japan are floating a balloon to test the waters. These two countries will feel the maximum impact of any change in the status of US Dollar. If the dollar is dethroned as the oil currency, it is likely to suffer a precipitous fall in value vis-a-vis other major currencies. Correspondingly, the values of forex holdings of China and Japan will fall by the wayside.
Dollar's status is linked to the puissance of the US as a global power. American GDP is around 14 trillion dollars and China's only 4 trillion. Those who are bearish on dollar argue that China is growing by 10% p.a. as against America's 2% growth and therefore China will catch up with America in economic size. This argument overlooks the imponderables afflicting China including its totalitarian political system and lack of credibility of its statistics and product quality in general. We may not be at an economic crossroads as yet.

Detention of Shah Rukh Khan

SRK was detained (?) at Newark airport for 2 (?) hours. Was he detained or was he only frisked? Was it over a period of two hours or a much lesser duration? Is it also true that he was not allowed to make telephone calls?

SRK figured in the list of 50 most influential persons in the world published by Newsweek sometime last year. Assuming that the airport immigration officials were unaware of SRK's identity (which is quite possible), they could have easily verified through Google search or any other method they were comfortable with. Is it possible that SRK did not suggest anything like this?

SRK was in America ,inter alia, in connection with his soon-to-be released movie "My name is Khan" where he acts as a Muslim who is not a terrorist. There are cynics (?) who claim that the "detention" was arranged by 20th Century Fox as a trailer.

If he was detained only because his surname is 'Khan' and the immigration officials made no sensible attempts to satisfy themselves about SRK despite his attempts to prove his identity, the episode can only be termed as religious prejudice masquerading as 'security consciousness'.

Robert S. McNamara

Robert Strange (yes, his middle name is indeed Strange) McNamara is no more. He contributed enormously to the success of Ford Motors and to statistical management. But he will be remembered more for the messy Vietnam war. He was Secretary of Defense under J F Kennedy and L B Johnson. He has been held atleast partially responsible for the ignominious Bay of Pigs invasion and Vietnam blunder.

An MBA from Harvard, he pioneered what may be christened as misanthropic misadventures. Vietnam war which resulted in mortality of millions was the military equivalent of economic meltdown. His successor MBAs from Harvard have ensured over-financialisation of economy resulting in economic apocalypse.

Why are Americans so naive?

There was a common enabling factor for both 9-11 crisis and CDO mess. Both were the result of typical American naivete. Prior to 9-11, security checks in US airports were cursory and trusting of passenger genuineness. An open door tempts a saint and 9-11 was waiting to happen.

Similarly, due diligence of mortgage customers was almost absent before the subprime crisis surfaced. Such an irrational naivete is difficult to explain.