Amartya Bhagwati or Jagdish Sen?

Even as the bitter slugfest between the two Economics pundits continues, both are feeling the heat and are desirous of reaching a decent patch-up. That is why Amartya Babu has started saying that he was never against growth and Jagdish Bhagwati claims he is not supporting either Narendra Modi or Rahul Gandhi.

But the damage has been done. The whole world has been witness to how low great minds can stoop to score a point over a deemed adversary. Chandan Mitra has contributed his share to the entertainment seeking cancellation of Bharat Ratna award given to Amartya Sen. Sen could have gracefully ignored Mitra, but chose to observe that he would surrender the award if so asked by Vajpayee. Sen knows only too well that Vajpayee is unfortunately in no condition to apply his mind.

It in interesting but has been generally overlooked that Sen is now distancing himself from the methodology adopted for Food Security. There are obviously limits beyond which he will not stake his academic reputation at the altar of political opportunism.

Political trespass

In best of times, the line dividing economics and politics is imperceptibly thin. During surcharged times as at present, the distinction gets even more blurred and economists charge into political terrain as if it is their own. No wonder therefore that even a sensitive economist like Amartya Sen deems it perfectly in order to comment on prime ministerial fitness of aspirants. Narendra Modi is a no-no because he is not ' secular enough'. So there are degrees of secularism which an economist can measure and advise you. Sen certainly deserves the Nobel!

Rahul Gandhi? Sen cannot comment on him because he is not aware of the latter's political instincts! That Rahul is inexperienced, callow and politically inert is known to everyone including perhaps the famous economist. But apparently these qualities do not in limine disqualify him for prime ministership because he is adequately secular! Sen's sycophantic encomium that Rahul Gandhi was a keen student in England is laughable.

In economics, secular means 'in the long run'. It will be healthy if economists confine themselves to pontificating on secular trends in economic sense rather than religious sense. Equally perplexing is the publicised view of Sankaracharya of Kanchi Mutt that Modi should be our prime minister. Political India will suffer if theoretical economists and religious leaders freely wade into politics. 

Distress in Detroit

"The low end of the market is a gold-mine, not a ghost town, if your vantage point is Delhi instead of Detroit", say V.Govindarajan and Chris Trimble in their best-selling book "Reverse Innovation: Create far from home, Win everywhere". This prophetic observation stares us in the face as Detroit files for bankruptcy.

Municipalities going broke is not a big deal. But a motown with an impressive heritage is an odd candidate for Chapter 9 bankruptcy. What will happen to the pensions of ex-municipal employees? Debts in the range of $17 billion for a population of around 700,000 are a big burden. We may wait and see if there is a ripple effect tempting some more municipalities to seek insolvency protection. Times are dangerously uncertain.

It is a sobering thought that America is solvent only because its foreign commitments arising from imports and other transactions are met by printing more dollars which surprisingly are lapped up by rest of the world. The day the dollar bluff is called, America will become one big Detroit. Till then, Dollar is king and in America, we trust.

Asiana Airlines Accident: jinxed by 7 ?

A Boeing 777 flight of Asiana Airlines, a South Korean airline crashed at San Francisco International airport on 6th July. It was already 7th July in S.Korea. (7th day of 7th month). The flight number was 214 (adding upto 7). There were 16 crew members. It was the 25th year of operation for the Airlines. It is worth noting that this was the first-ever fatal accident involving Boeing 777. Sadly, two passengers died and more than 190 out of 300 passengers were injured, some of them seriously.

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. 

Finance Minister's influence on Indian banks

P.Chidambaram is known for his assertiveness and does not like any non-compliance to his diktat. CMDs of banks, atleast a vast majority of them, are known to be extremely faithful to Finance Ministry.

Public sector banks are now under pressure from PC to reduce their base rates and hence interest rates on loans. Though PC argues that reduction in interest rates will increase credit offtake, many studies have pointed out that interest rates are now not a deterrent to borrowers.

Public sector banks are listed in the stock market and their managements are supposed to protect the interests of all shareholders. Forcing them to reduce interest rates is not conducive to corporate governance. It is unfortunate that banks' regulator, RBI is becoming more subservient to the ministry.It is in a way SEBI's responsibility to ensure that interest of banks' shareholders is protected. But then SEBI also is controlled by tentacles of Finance Ministry.

Unless public sector banks are truly independent from governmental influence, professionalism will be absent. Though the government is certainly a shareholder, a major one at that, it has no right to dictate managerial decisions to banks. Let bank managements manage; don't make them puppets.

Edward Snowden and Charudutt Deshpande

Everyone in the world knows Edward Snowden, everyone in India now knows Charudutt Deshpande. The U S government is hunting for the former; Tata Steel is alleged to have harassed the latter to death. Is there a parallel between the two?

Snowden threw open the modus operandi of American National Security Agency to the world at large. The government is peeved. The most charitable reason for NSA's snooping is to deter terrorist activity. The likes of Salman Khurshid may shamelessly twist facts and justify NSA's activity as just a "pattern analysis". We can expect the U S government to adequately reward Khurshid, but not his country. This is not diplomacy, but craven behaviour as pointed out by Brinda Karat. If the American government is convinced about legitimacy of NSA's activity, it would not be desperately looking for Snowden. The government seems to be tensely awaiting the 'gotcha' moment.

What about Tata Steel? It is alleged that ever since Forbes India magazine published an article on the company's present predicament Tata Steel has been paranoid on who had 'leaked' corporate information to the magazine. (I had gone through the article but was not sensitive enough to spot any unsavoury information.) The company allegedly found the Chief of Corporate Communications and PR, Charudutt Deshpande 'responsible' for outing the information. According to his friends, Deshpande was a responsible professional who would not 'betray' his company. Deshpande reportedly became very despondent over the company's alleged snooping on him even after his resignation. Did he end his life because of Tata Steel's strong-arm methods?