Thursday, April 30, 2015

Telugu Cinema 1932-2000

I received 'Encyclopedia of Telugu Cinema (1932-2000)' by Dr. Vutukuri Venkata Satyanarayana. It was completed by him recently and not yet published. He kindly said that I can forward it to my friends. If anybody is interested, please let me know at
P.S. One of the comments on my wall from Balu Bold gives this reference to Indian Cinema
and  'Encyclopaedia of Indian Cinema'. Ashish Rajadhyaksha & Paul Willemen 

Wednesday, April 29, 2015

Tuesday, April 28, 2015

Some academics who are ex-bankers

thatb Itry to follow are Michael Hudson, Bill Black and Doug Henwood. Another I found recently is Michael Pettis. Apparently, he is also into music. Here is a portrait of him. Towards the end, there is a discussion of his ideas about China's position:
"Pettis' vision spans the globe, encompassing economic booms in postwar Japan , 19th century Argentina and the US. He positions modern China within a context broad enough that you start to see it isn't all as impossibly unprecedented as we might think.
He's certainly not afraid of being an outlier among commentators, having been one of the first to pick the scale of the slowdown China is now experiencing.
He has written that China's GDP growth rate will need to fall to between 3 and 4 per cent in the next few years if it is to successfully achieve the transition to a developed balanced economy.
As Bloomberg News noted recently, Pettis' research shows that "every investment-led growth miracle in the last 100 years has broken down". And it is very hard to escape the kind of enormous credit boom that China has just been through without a banking crisis.
The challenge for Beijing is to move fast enough with reforms to rebalance the economy before it hits what Pettis calls "debt capacity restraints".
But these days Pettis is not picking a GFC-style crash. He wrote in December that while a "banking crisis in China is always possible ... as long as Beijing implicitly or explicitly guarantees deposits, and as long as Beijing's credibility with Chinese households is solid, and I believe it is, I think we are more likely to see many years of Japanese-style 'zombie banks' than a banking crisis"."
Michael Pettis blog China Financial Markets. I do not think that I agree with his latest post.
"China thus is facing a universal problem of how to steer its economic surplus into new capital investment (including public infrastructure) and rising living standards to create a thriving domestic market. Its challenge will be to avoid repeating this fatal path that the United States and Europe have taken since the 1980s. The aim is to prevent the economic surplus from being absorbed by rising land rents, prices for monopoly goods and services (roads, commercial privileges, communications and the like), and banking charges for interest and fees.
Over the next twenty years China will have to cope with the same problems of urbanization, rising housing and land prices that Western economies experience. The most important way to view these universal problems is to ask who is to receive the economic surplus: the government as taxes, individual property owners as rent, or banks as interest? This is the basic trade-off. Whatever “free” rent-of-location the tax collector relinquishes is available (“free”) to be pledged to banks as interest."
There is more historical description of land rents in the west and then:
"But if land is not taxed – or if the real estate tax rate is lowered – this will leave the homebuyer loaded down with debt. The lower the land tax, the higher the mortgage debt, as rental income is turned into a flow of interest by new buyers as land prices rise – on credit.
This is the path that the United States and other Western countries have taken, while the post-Soviet states since 1991 have been the most extreme in taking neoliberal advice to favor real estate and finance over labor and industry. Their self-destructive real estate bubble has loaded down their labor force with high debt service and housing costs, whilst their giveaway of public infrastructure to insiders (with no price regulation) has led to high basic living costs. Their disastrous collapse, capital flight, emigration of skilled labor, shrinking GDP and corruption should serve as an object lesson for what China should avoid."
Apparently, there is a series of books edited by Michael Douglas and collaborators: "We founded this project over 20 years ago at the Peabody Museum, which is their archaeology and anthropology department. We wanted to do a series of books on how modern economies and practices began. Our first colloquium was in 1994 on Privatization in the Ancient Near East and Classical Antiquity; our second volume was on Urbanization and Landownership in the Ancient Near East, about how cities were created and how landownership and real estate patterns developed into a market for real estate. The third volume was on Economic Renewal in the Ancient Near East, about how debt cancellations restored the land to its citizen-cultivators to provide a means of self-support for the free citizenry.
These colloquia grew so popular that we added a fourth volume, Creating Economic Order: Record-Keeping, Standardization and the Development of Accounting in the Ancient Near East, on the origins of money and account keeping from Mesopotamia to Mycenaean Greece and Egypt. And then ten years ago we had our fifth colloquium on Labor in the Ancient World. There have been so many revolutions in archaeology and Assyriology and even Egyptology in the last ten years that we’re only publishing this volume now, to be completely up-to-date."

Neoconservative counterrevolution in USA

The Neoconservative counter revolution by Andrew Hartman
"As George H. Nash convincingly argues, the conservative turn taken by the Jews at Commentary demonstrated that Jews were more of the mainstream than ever before.
“In 1945, Commentary had been born into a marginal, impoverished, immigrant-based subculture and an intellectual milieu that touted ‘alienation’ and ‘critical nonconformity’ as the true marks of the intellectual vis-à-vis his own culture,” Nash writes. “Two generations later, Commentary stood in the mainstream of American culture, and even of American conservatism, as a celebrant of the fundamental goodness of the American regime, and Norman Podhoretz, an immigrant milkman’s son, was its advocate.”
In celebrating the “fundamental goodness” of America and its institutions, neoconservatives believed they were providing an important service to the regime they loved: they were protecting it from the New Left that they thought was out to destroy it."

Some links to progress in India

Diversity deficit across apex bodies of Indian parties by Rukmini S:
"Among Hindus, who dominate all six parties, the BSP’s CEC has the most SC representatives, while both the CPM’s Polit Bureau and the Nationalist Congress Party’s National Working Committee have none.
The NCP is in fact the most upper caste party, followed by CPI(M), in this metric."
The parochial Indian by Nissim Mannathukkaren: "India set out to establish a sovereign, socialist, secular and democratic republic. Socialism and secularism have fallen off on the wayside; now it hobbles with sovereignty and a wounded democracy. Ambedkar had warned a long time ago: “There is no nation of Indians in the real sense of the world, it is yet to be created.”"

Monday, April 27, 2015

Does it pay to farm in India?

By Rukmini S in The Hindu:
"As you can see, a farm household needs to have at least 1 hectare[approximately two and half acres, one acre is approximately 4040 square metres] of land to make ends meet every month. But given that over 65 per cent of households have less than one hectare of land, this means that two out of three farm households are simply not able to make ends meet.
Unsurprisingly, what this translates into is debt. Over half of all agricultural households are indebted, and these are not small debts; the average loan amount outstanding for a farm household in India today is Rs. 47,000. For marginal farmers, making under Rs 4,000 per month, which doesn’t even cover their consumption, loans of over Rs 30,000 must be extremely heavy burdens.
The southern states stand out for their level of indebtedness."
P.S. Devinder Sharma:in his blog


"Rojava—the Kurdish word for “west”—consists of three leftist enclaves making up an area slightly smaller than the state of Connecticut, in territory dominated by ISIS. In mid-2012, Assad’s forces largely withdrew from the area, and the battle was left to the Kurdish militias: the YPG (People’s Protection Units) and the YPJ (Women’s Defense Forces), the autonomous women’s militias. These militias are not the same as the Iraqi peshmerga, though the U.S. press uses that name for both.......leftists worldwide should be watching the remarkable efforts being made by Syrian Kurds and their allies to build a liberated area where they can develop their ideas about socialism, democracy, women, and ecology in practice." from The Revolution in Rojava by Meredith Tax

Saturday, April 25, 2015

Religion and innovation

Do strong religious beliefs stifle innovation? from WSJ
"“In both international and cross-state U.S. data, there is a significant and robust negative relationship between religiosity and patents per capita,.....” 

Jhansi goes off to a temple, I stay back.

 I heard that a couple whose daughter is marrying soon organized a puja. I do not know whether it is related the marriage. The parents worked hard their whole lives and want to have big wedding for their only daughter. But the girl is refusing to have big wedding and wants to donate the money to some charity. And the boy's uncles have been working for dalits in Gujarat most of their lives. One hears some good news once in a while.

Another disclaimer

It worries me when my blog starts getting too many (by my standards) hits. I am worried that I may be misleading people since I myself am confused. Recently it is crossin 500 a day sometimes and some of the posts may be construed anti-American. At a personal level some of my best friends are American and I seem to feel at home when I wander around the streets in USA. But the country's policies may be different from what people want or aware of. There was time when US tried to help other countries, but slowly it shifted from a surplus economy to a deficit one in the early seventies. Some things might have happened without actually planning and the country just took 'advantage' of what came along. And now, it may be clawing to keep some of those advantages. In any case, I am confused and exploring these issues. And when somebody says that his son has one of the best paid jobs in a bank or a big US company (like Satya Nadella), it does not make me happy. 

Friday, April 24, 2015

Juan Cole China's new pivot

Pakistan as China's Hong kong West: China's New Silk Road & US Failure:
"Chinese President Xi Jinping made a state visit, full of pomp and circumstance, to Pakistan on Monday, but its centerpiece was a $46 billion investment in the country, dwarfing the US Congress’s $7.5 bn. program initiated in 2008. Whereas the US likes to sell useless weapons systems that either rust in warehouses or foment wars like that in Yemen, China’s investment is divided between $11 bn. in infrastructure and $35 bn. in energy.....

But the China-Pakistan Economic Corridor (CPEC) is less about India and more about regional development for China and stabilization for Pakistan......

Since last June, Pakistan’s army has somewhat inexplicably turned on its former allies among the Pakistani Taliban with a big aerial bombing campaign (“Zarb-e Azb”) aimed at disrupting the Haqqani and other terrorist networks that had been targeting US troops and the Afghanistan National Army across the border. Haqqani leaders are said to have scattered. China appears to have made a defeat of the Pakistani Taliban insurgency a prerequisite for the CPEC, perhaps because of their links to Uygur fundamentalists. And, obviously, Pakistan can’t be Hong Kong West if it is routinely blown up by Taliban."

A Shamshad Begum song from Namoona 1949.Dancer?


The way of all flesh?

Vietnam forty years on: how a communist victory gave way to capitalist corruption by Nick Davies in The Guardian:
After the military victory, Vietnam’s socialist model began to collapse. Cut off by US-led trade embargos and denied reconstruction aid, it plunged into poverty. Now its economy is booming – but so is inequality and corruption
ed trade embargos and denied reconstruction aid, it plunged into poverty. Now its economy is booming – but so is inequality and corruption"

Some links on BIS-2

I like conspiracy theories. I would not go as far as Putin is a pawn of bankers (via Transmissions) but they indicate the possibilities. In any case, various groups, institutions and states seem be to working in a way that is not to the benefit of the common man. Here are some links for my own reference about Basel Committee and Basel Accords.
Wikipedia says BIS and Basel Committee are different though based in the same building. It seems BIS has a supervisory role
Basel 1,2,3:
Role Japan financial crash around 1990 from Basel 1 (1988): (eiht percent capital requirements)

Per Kurowski, a former executive director of the World Bank, has written extensively about the Basel Accords 2 and 3 (2004, 2009).
In the simplified language of Dumb Ideas:
"By allowing banks to hold only 1.6 percent in capital when investing in triple-A rated securities (e.g. tranches of subprime mortgages) or lending to sovereigns (i.e. like Greece, Italy and Spain), the regulations implied an authorized leverage of 62.5 to 1.
At the same time, regulations require the banks to hold 8 percent in capital when lending to job creating small businesses and entrepreneurs, i.e. an authorized leverage of 12.5 to 1.
What we see then are the large organizations being very well funded and sitting on more than a trillion dollars in unused working capital, while small businesses and entrepreneurs find it difficult and expensive to get financing.
Banks don’t exist to avoid risk, he argues. They exist to take intelligent risks on behalf of society. The current regulations push banks in the wrong direction. Should we really be surprised that we have major economic problems and a lack of jobs?"
See also his Casino model here "The result will be too much betting on what’s perceived as safe, and too little betting on what perceived as risky; something that of course makes the financial sector and the economy unsustainable.
Unfortunately, the IMF, the Basel Committee, the Financial Stability Board; and experts like Lawrence Summers, Ben Bernanke, Paul Krugman, and Martin Wolf, none of them wants to acknowledge the risk-adverse distortions in the allocation of bank credit to the real economy, that the current bank regulations produce."

May be more, after I absorb these a bit.

Thursday, April 23, 2015

Some links on BIS-1

Ruling the world of money by Edward Jay Epstein of diamond trade exposes in 1983:  “most exclusive, secretive, and powerful supranational club in the world.”

Developments up to 2015 from Chris Powell:
"In the part of his book excerpted tonight by Zero Hedge, LeBor notes that the enormous power, secrecy, and unaccountability of the BIS are inconsistent with the democracy purportedly maintained by some of the bank’s major members.
But reviewing LeBor’s book two years ago for The New York Times —
Michael Hirsh was probably right that the BIS “has been more of a witness to history than a maker of it, more Forrest Gump than Superman.” For, as Hirsch observed, “International finance is now largely dictated by global banking corporations, the Federal Reserve, the European Central Bank, and the other major central banks that make up the membership of the BIS. More often than not, they base their policy on national or regional interest.”"
Another from 2013, a bit more strident and comrehensive The Bank for International Settlements Who Rule the World by Frank De Varona:
"According to Adam Lebor, Gianni Toniolo with Piet Clement, and James C. Baker, authors of books regarding the history of the Bank for International Settlements, this supranational banking institution was created with unprecedented powers and privileges. The central bankers who created the BIS held politicians with contempt, the exception being if the politician was one of their own. The BIS founders wanted to build  a transnational financial system that could move large amounts of capital free from political or governmental control. The central bankers demanded and received   incredible immunity from their own governments, free from any type of regulation, scrutiny, or accountability for the BIS directors and members as well as their employees.....
Dr. Quigley described the international banking network in the following manner: “The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. The key to their success, was that the international bankers would control and manipulate the money system of a nation while letting it appear to be controlled by the government.”"

Wednesday, April 22, 2015

From four years ago

"If the Qaddafi government goes down, it will be interesting to watch whether the new central bank joins the BIS, whether the nationalized oil industry gets sold off to investors and whether education and health care continue to be free." from
Libya: All About Oil or All About Banking?. 11 April, 2011
A little more at Central Banking and "Rogue" Nations from June 2012

Tuesday, April 21, 2015

Mixing up in the garden

and small farms. Plant with this and that" The science and folklore of companion planting:
"In Iroquois legend, three sisters — namely corn, beans and squash — are inseparable, growing and thriving together. But more than a legend, this hints at something important for growing: Science shows that planting certain crops together can yield more bountiful results and potentially keep pests at bay.
Known as “companion planting,” it’s something farmers, horticulturists and perhaps even your grandmother all do with varying degrees of success. According to Kate Garland, a horticulturalist at the University of Maine Cooperative Extension, some plants just do better when planted next to each other.....
And if all else fails, next spring, try again."
I have arrived at this sort of thing; particularly the last bit.

Sometimes I think

but usually try to follow any news vaguely related to poverty and development. Since my background is in mathematics, I do not have the theoretical or practical experience to fathom such problems.Many brilliant people have spent their lives thinking about such problems without any lasting solutions. Thinking about such problems with limited resources is likely to lead to some impatient band aid solutions. So I try to let diverse views flow and hope for some patterns to emerge. These keep coming but keep changing too. May be there are no solutions though there are some insights from thinkers like Marx. But even he made mistakes says Yanis Varoufakis. One source for me is popular Bollywood cinema, where common people had some influence, since the success of the films depended on their patronage: money at the bottom of the pyramid.The elite art forms had to be diluted and appear in short formats in film songs and dances. There was some resistance and film songs were even banned from All India Radio. There were also contradictions in the process of making films, since capital was needed. Some of these explored in this essay by Ashish Rajadhyaksha: The Curious Case of Bombay's Hindi Cinema:The Career of Indigenous Exhibition Capital.: ""Shri 420 is an unusual melodrama in the way it directly thematizes upon the aspects of capital regulation that underpin the production context of melodrama in post-War Bombay. I want to use the film to explore the career of what I shall call indigenous capital."
The essay says Part 1; I do not know whether there is a follow up. It is mentioned here, in a blog post by Aswin Punathambekar from  the Department of Communication Studies at the University of Michigan-Ann Arbor. There are many other wonderful studies by academics (for example 'Signal and Noise by Brian Larkin,mentioned earlier in this blog, mostly from USA and UK. There seem to be courses in several departments about India Cinema. Here is a course syllabus from this year which mentions the above paper of Ashish Rajadhyaksha.

Sunday, April 19, 2015

US primacy ebbing?

At Global Economic Gathering, US primacy seen as ebbing from NY Times. Compare also Michael Hudson articles at his site, in particular Institutional discontent and its follow up Odious debts.

Russian economy

What sanctions? Russian economy is growing again from Newsweek:
"Not only is Putin still standing, but the Russian economy, against most expectations, is recovering. Its stock market is one of the best performing globally this year; the ruble, after losing nearly half its value against the dollar over the course of a year, is rebounding; interest rates have come down from their post-sanctions peak; the government is taking in more revenue than its own forecast expected; and foreign exchange reserves have risen nearly $10 billion from their post-crisis low........What’s bailing out Moscow? For the second time in two decades, Russia is showing that while a sharp drop in its currency’s value does bring financial pain—it raises prices for imports and makes any foreign debt Russia or its companies have taken on that much more expensive in ruble terms—it also eventually produces textbook economic benefits. Since a devaluation raises import prices, it also paves the way for what economists call “import substitution,” a clunky way to say that consumers switch to buying less pricey products produced at home instead of imported goods." And more in the article.
Russia's economy steps back from the brink from Bloomberg
"One question is whether a resurgent ruble will cut off any homegrown recovery. It's the world's best-performing currency so far this year, having gained almost 16 percent against the U.S. dollar. That said, policy makers don't want it to rise much more. Economy Minister Alexei Ulyukaev says he considers 50-odd rubles per U.S. dollar a fundamentally justified rate, and central bank governor Elvira Nabiullina said Friday that the central bank is ready to lower its key interest rate, a move that would help put a lid on the ruble's rise. "
More from RT News.
More from Michael Hudson about long range politics, IMF, World Bank etc
"So Russia realizes that when the World Bank and the AID [International Development Association (?)] came in with the Harvard boys, and with Larry Summers playing a key role, that they were totally screwed by this.
So they’ve learned to take a different development tack, to be independent in food and other manufactures, and independent of the kind of warped development strategy that the United States has. And especially this is designed to finance two things. It’s to finance Chinese and other infrastructure development. Rather than having the U.S. expensive firms come in and build roads and airports and things, the Chinese will do it.
But there’s another reason for this, that the United States has already started a financial Cold War against China, Russia, and the BRICS. And it’s been going to country after country. In Ukraine, for instance, it said, try not to pay the debt that you owe to Russia. It’s gone to Sri Lanka and said, let’s back a right-wing dictatorship or a right-wing group that doesn’t pay China. So China has had great trouble collecting on the vast infrastructure investment that it’s made and is supposed to be paid for by these countries. And the U.S. is trying to stiff it in trying to have countries default on loans that are to the BRICS and default to any country that is not in the U.S. military Cold War orbit.
And so China thinks, well, if we have an international bank on the same stature as the World Bank and the IMF, then when countries owe foreign debts, just as they don’t write down the foreign debts to multinational institutions like the World Bank or IMF, so they won’t write down their debts to the China Development Bank, because we have France, Italy, England, and other Asian countries all in it together. So this protects China’s investment abroad and China’s loans to government to help develop the infrastructure, whereas under the United States, when countries can’t pay to dollars, then the IMF comes in and imposes austerity. There’s no indication that China’s going to come in and impose the same kind of crippling austerity that the World Bank and the IMF have been imposing on countries."
Continuation here.

Buoyant airborne turbine

From last year reports, it will be tried over Alaska.  A recent report. Report of another effort.
Video from the company. See also the comments. No projected costs,

Saturday, April 18, 2015

Hummingbird in a wind tunnel

via 3quarksdaily

Chillies and flowers in my backyard

Weeding done but not well

Some early chrysanthemums

About Saudi intervention in Yemen from Al Jazeera

US generals: Saudi intervention in Yemen 'a bad idea':
"Michael Horton, a Yemen expert close to a number of officers at SOCOM and a consultant to the U.S. and U.K. governments, picked up on this debate. Within days of the Saudi intervention’s start, he said in an email that he was “confounded” by the intervention, noting that many in SOCOM “favor the Houthis, as they have been successful in rolling back AQ [Al-Qaeda] and now IS [the Islamic State in Iraq and the Levant, or ISIL] from a number of Yemeni governorates” — something that hundreds of U.S. drone strikes and large numbers of advisers to Yemen’s military had failed to accomplish."

Friday, April 17, 2015

Two articles about Chinese economy

The first from Bloomberg The Major Paradox at the Heart of the Chinese Economy:
"Step back from conflicting daily headline numbers, and a different economic reality emerges. China is the midst of an ambitious, and risky, rebalancing act -- away from its old growth model of credit-fueled, investment-led and export-powered growth that astounded the world with 10 percent annual average GDP gains from 1980 to 2012.
The long game is to transform China’s $10.4 trillion economy into a more sustainable one, featuring a vibrant service sector and a more diversified finance industry that doesn’t rely so heavily on state-owned banks to allocate capital. It will be a messy process and will result in sub-par growth, at least by Chinese standards." And goes on to describe the efforts.
The second from WSJ, may be good for developing countries if it pans out:
"The conventional wisdom is that for foreigners to become big holders of yuan, China has to run a trade deficit. (Then foreigners are left holding yuan earned by selling stuff to China that they don’t need to buy stuff from China.)
But there’s another route. China could instead simply give yuan to other countries to invest in (presumably Chinese-made) equipment and know-how, as the United States’ Marshall Plan gave Europe dollars with which to rebuild. This, says Mr. Gave, is China’s strategy: “For China, financing foreign infrastructure projects, even at relatively low returns, is a more attractive proposition than keeping foreign reserves in low-yielding U.S. or eurozone bonds.”
For China, the key to making the yuan a rival to the dollar is political will: When your currency becomes a reserve currency, you get more influence in the world, and in return the world gets more influence over you. Given China’s global aspirations, that trade-off is going to look steadily more appealing."
See also the previous posts about AIIB

An unusual story

Sirai in Tamil by Anuradha Ramanan. It was made into 1984 Tamil film Sirai, and as Siksha in Telugu 1985. It is the story of a village priest Raghupaty's wife, raped by a landlord Antony, then abandoned by her husband, confronts the rapist, lives in his house for thirty years without any physical relations with him, though known as Antony's woman in the village. But regard for each other develops during the period. The only physical contacts is when the Antony was about to die. After Antony's death, the priest who came to know of the facts of her life in Antony's house comes to her and requests her to come back. She rejects him saying that she would rather be known as Antony's widow than go back to the man who rejected her and throws away her mangalasutra which falls on Antony's rifle.
There is a long article 'Life after rape' on the story by Rajeswari Sunder Rajan "Real and Imagined women: ender, Culture and Post Colonialism" which is also available in "Borderwork: Feminist engagements with Comparative Literature".

Thursday, April 16, 2015

Leverage in the old days

"[E]nslavers had already—by the end of the 1820s—created a highly innovative alternative to the existing financial structure. The Consolidated Association of the Planters of Louisiana (despite its name, the “C.A.P.L.” was still a bank) created more leverage for enslavers at less cost, and on longer terms. It did so by securitizing slaves, hedging even more effectively against the individual investors’ losses—so long as the financial system itself did not fail. Here is how it worked: potential borrowers mortgaged slaves and cultivated land to the C.A.P.L., which entitled them to borrow up to half of the assessed value of their property from the C.A.P.L. in bank notes. To convince others to accept the notes thus disbursed at face value, the C.A.P.L. convinced the Louisiana legislature to back $2.5 million in bank bonds (due in ten to fifteen years, bearing five percent interest) with the “faith and credit” of the people of the state. The great British merchant bank Baring Brothers agreed to advance the C.A.P.L. the equivalent of $2.5 million in sterling bills, and market the bonds on European securities markets." from Quick note on Slavery, Finance, Minsky, and the Panic of 1837 by Lambert Strether.

Dean Baker on redistribution

posted by Mark Thoma with comments in Economist's View. Mark Thoma's comment:
"Just one comment. I don't like the word "redistribution" as it is used here since it implies the current distribution of income is correct and just. I don't think it is for a variety of reasons I've hammered on over the years. Returning income/wealth to its rightful owners is not redistribution in the sense the word generally implies (i.e. taking from someone who has earned the income and giving it to someone who has not -- it's the opposite, taking it back from those who haven't earned it, generally those at the top of the income distribution, and returning it to those who have)."

Dumb ideas?

Martin Wolf latest article An economic future that may never brighten (may need google search) is drawing a lot of attention. Per Kurowski, a former executive of the World Bank responds
"Sir, roulette is a game where absolutely all bets produce exactly the same expected financial payout; in this case a small loss since the house wins when the zero comes up. What would happen if regulations forced casino to increase the payout for “safer” bets, like betting on a color, than for “riskier” bets, like betting on a number? Easy, the game of roulette (and the casinos) would not be sustainable.

But, to forcefully alter the payouts and introduce a disequilibrium, is exactly what bank regulators have done by allowing banks to leverage much more their equity, and the support they receive from taxpayers, with assets perceived as safe than with assets perceived as risky.

The result will be too much betting on what’s perceived as safe, and too little betting on what perceived as risky; something that of course makes the financial sector and the economy unsustainable.

Unfortunately, the IMF, the Basel Committee, the Financial Stability Board; and experts like Lawrence Summers, Ben Bernanke, Paul Krugman, and Martin Wolf, none of them wants to acknowledge the risk-adverse distortions in the allocation of bank credit to the real economy, that the current bank regulations produce.

And, without considering that, then the whole discussion to which Martin Wolf refers to in “An economic future that may never brighten” April 15, becomes incomplete and unproductive… or in franker terms… nonsensical. "

The first link is to an older article of his  " The Bastle 2 Roulette manipulation"

This idea seems to date back at least to 2009 and is also discussed in Forbes by Steve Denning in A worthy competitor for the world's dumbest idea: bank capital regulations:
"In my article, The World’s Dumbest Idea: Maximizing Shareholder Returns, I implicitly challenged readers to show why the maximizing shareholder returns wasn’t a dumb idea, but also to submit ideas that they thought were even dumber.
Of the 46 comments received on the article so far, most have agreed that maximizing shareholders has been a disastrous idea for the economy.

A competitor for the world’s dumbest idea

I did however receive from a reader, Per Kurowski, a former executive director of the World Bank, an interesting competitor for “the world’s dumbest idea”: bank capital regulations." and goes on to explain the idea. 
Steve Denning's article The Dumbest idea in the world: maximizing shareholder value is also worth a read.
Here is the video explaining Per Kurowski's idea

Finally East-West Link Deal

Malcolm Maiden in The Age "Credit and blame are fairly evenly shared in the East West Link tollway contract dispute that Victorian Premier Daniel Andrews announced on Wednesday had been provisionally settled after months of tense negotiation.
Let's allocate the blame first.
Labor lit the fuse ahead of last November's election, by expanding its opposition to the project to include a commitment to kill it off.
It did so without knowing what the legal and financial consequences were, and its warning that Labor would kill the project if elected raised sovereign risk –the risk that the Victorian government would be regarded as untrustworthy in its dealings with the private sector.
The Napthine government and the East West Connect consortium led by Lend Lease also contributed to the debacle, however, by pushing ahead with a project that was set to return only 45¢ in the dollar, using Infrastructure Australia's cost-benefit methodology.
They pushed the project to its financial close ahead of the election, triggering the first big debt drawdown by the consortium, and they agreed on a side letter to the contract stating that compensation payments set out in the contract would flow if the tollway project was halted, or derailed by a legal challenge. East West was locked in the face of Labor's warnings, and the side letter was written because of them."
More details from The Age

Wednesday, April 15, 2015

Another view of AIIB

"American diplomats are upset that dozens of countries — including Nepal, Cambodia and Bangladesh — have flocked to join China’s newinfrastructure investment bank, a potential rival to the World Bank and other financial institutions backed by the United States. 
The reason for the defiance is not hard to find: The West’s environmental priorities are blocking their access to energy.
A typical American consumes, on average, about 13,000 kilowatt-hours of electricity a year. The citizens of poor countries — including Nepalis, Cambodians and Bangladeshis — may not aspire to that level of use, which includes a great deal of waste. But they would appreciate assistance from developed nations, and the financial institutions they control, to build up the kind of energy infrastructure that could deliver the comfort and abundance that Americans and Europeans enjoy.
Too often, the United States and its allies have said no." from An Environmentalist call to look past sustainable development
Another excerpt: “We shouldn’t be talking about 10 villages that got power for a light bulb,” said Joyashree Roy, a professor of economics at Jadavpur University in India who was among the leaders of the Intergovernmental Panel on Climate Change that won the 2007 Nobel Peace Prize. “What we should be talking about is how the village got a power connection for a cold storage facility or an industrial park.”

Tuesday, April 14, 2015

A duet from Aage Badho 1947

Long read from Michael Pettis on AIIB

Will the AIIB one day matter? posted also in Naked Capitalism with lots of comments in both places:
"More importantly the RMB will not become a major reserve currency any time soon, and while its importance as a trading currency will probably continue to rise,..."
Dollar becoming a reserve currency seems somewhat unplanned as David Runciman explains here. Pettis also says "...I think the dollar will eventually lose its reserve status, not because it will be replaced by the RMB but rather because the US will eventually figure out that it entails too a high cost and that it is no longer willing to pay that cost."
For a different view, see "Winds of change in Asia" by Martin Khor.

Monday, April 13, 2015

What is dharma?

Saw it on Rahul Banerjee's walI

"Dharma is not merely a hope. Nor speculation. Nor rituals. Nothing which is inspired by anger, greed or fear.... It is the will to shape oneself, men and situations, by rising above weaknesses.No, that is not enough; Dharma for each one is, to weld the vision, the will and the deed - they are not three but one" - K.M Munshi in "Krishnavatara".

I am not into this stuff at all. Rahul Banerjee is one of those people who is erudite and spent most of his life working for the poor and claims that he is an anarchist, which version I am not sure. May be, he started wondering about this because of comments on his wall. 

There are several posts about Rahul Banerjee in this blog since 2007, when I got to know his book Recovering the lost tongue.
P.S. Rahul Banerjee responds on my wall "I am indeed an anarchist and so was Krishna if one goes by some of what he is supposed to have said in the Gita. I liked this particular quote because it firmly puts the onus of ethics on the individual leaving no room for making excuses and is in the same mould as the Buddha quote I had mentioned earlier."
I question him again "Rahulji, I am not sure about how much the individual is separate from the values and norms around. He already comes with some baggage. What are you saying is a bit like what the mainstream economists say "..the theory of action that comes with economists’ analytical style is hardly compatible with the basic premise of much of the human sciences, namely that social processes shape individual preferences (rather than the other way round). " May be you are talking at the next level when compatibility of values of different groups come in or when philosophers question the values."
More in the conversation ( I do not know how to connect to facebook pages). Here is one more comment from Rahul Banerjee:
"The institution of marriage and family is a very late development following on the neolithic revolution about 10000 years ago when it became necessary for men to identify their male progeny to whom they would pass on their private property. Before that in the anarchist phase men and women slept freely with each other within a small group or clan and there was no family and no identified children. Marriage and family thus institutionalised patriarchy which had come into existence 5000 years earlier. Initially as humans began to walk upright about 20000 years ago it resulted in the shortening of the pelvis and so childbirth became more difficult and also the head of the child had to be smaller as compared to that required by the intellectual development of humans. So the child after spending 9 months in the womb was born helpless and had to spend another year or so developing the head to the appropriate size. Since mortality rates were high, it became imperative for survival that women have babies regularly and tend to them and this evolutionary requirement pushed them into the domestic sphere and men became socially powerful and informal patriarchy was established. 
As for morality it is constructed by a combination of many factors environmental, economic, social and political and I doubt whether there can be any absolute morality."