I have been remiss in pointing out that George W Bush too has caught on to what I have been pointing out. It is the prosperity of the middle class that causes inflation. If you have a few rich people and lots of poor people, the poor would be free of inflation. It is the middle class in India and China that causes the problem. Ajay Shah explains better.
Look! I Can Do Economics Too!
My heartfelt commiseration to the unfortunate soul who complimented Dilip D’Souza on his “sound economic training”. It has been said in the Mahabharata that a lie that achieves a good purpose will save you from hell. But this false compliment not only did not do any good to society, it has also not made the recipient happy. The unfortunate soul has now been blamed for not keeping track of and complimenting Dilip for every instance in which he allegedly displayed his sound economic training.
Incidentally, if you wish to know the right answer to the problem in Dilip’s post, here it is:
Botswana And Zimbabwe
Two countries, neighbours, started off with similar levels of economic development. One has economic freedom and good governance. Another has repression. One is prospering. The other is experiencing ridiculous levels of inflation, poverty and economic discontent. A familiar story. (via Ajay Shah)
Intra-Party Democracy And Nuclear Disarmament
There are structural reasons why we do not have intra-party democracy in India, but I think that cultural reasons are important too. Internal democracy is like nuclear disarmament – you can’t do it unilaterally.
In India, the cultural norm is that if you openly speak out against the leader of the party, you are not just disagreeing, but signalling a revolt. Reporters will breathlessly ask the critic if he is preparing to quit the party. News channels will quote sources close to the “two camps” which will talk of how the morale of the party rank and file has been affected by the events. If you try to claim that there really aren’t any plans to split the party and the disagreements were just that – disagreements, the papers will speculate that the two camps are on the way to a patch up.
Fresh Off the Post-Modernism Generator
Did we ever have to be bothered by a kind of discursive scheme about right & wrong, good & bad, virtue & vice, prevailing in varying degrees at any place on earth inhabited by humans and from time immemorial, which is absolutely constructed on the foundations of gender- ie; on the worst of arbitrary division of the entire humanity into men, women, transsexuals, trans gendered, eunuchs, etc.?
This is how it starts. It only gets better from here. (via Blogbharti)
How I Manage My Investments
Aadisht was keenly interested in the spreadsheet I referred to in the post below. It so happens that I am inordinately proud of my creation. So, as a service to society, I have uploaded it to Google and shared it with the world. But:
- You need to be logged in to google to see it
- The data is scrubbed. All values are dummies, except the names of the funds in the first sheet – those are a subset of the ones I actually own. But everything else, including folio numbers, prices and number of units is fake.
- It is writable by anyone. I had to make it writable for you guys to see the formulas. But please don’t make any changes.
- On the last sheet are supposed to be two pivot tables. As I have explained, when I upload a .xls file, Google converts pivot tables into simple tables. But the pivot is self-explanatory and you can recreate it.
- You can download as .xls for your use. But a stupid bug will be apparent to you if you compare the last sheets. It is trivial to fix it.
- The spreadsheet is probably unusable unless you understand the thinking behind it.
The last lacuna, I shall now rectify with the following treatise on how I do my investing.
Ambani Fights Inflation
As I have explained earlier, concentration of wealth at the very top is an excellent way to cut inflation. Mukesh Ambani has done his bit to fight inflation by building an expensive house. Those who are decrying this as an example of conspicuous consumption are missing the point. If, instead of building an expensive house, Ambani had distributed the money as salaries to Reliance employees or as profits to shareholders, the money would have chased goods that the poor also consume. By keeping the money for himself, he has caused a reduction in prices. The consumption of the super-rich is different from that of the rich and the middle-class. As long as the super-rich spend money on status-goods and as long as their money goes to other super-rich people – such as when they pay M F Hussain for a painting, or Hafeez Contractor to design their house, it keeps money out of circulation from the general economy. The super-rich should, as a social obligation, take utmost care to ensure that their money circulates among themselves and does not leak out.
Calling Sainath
As we all know, India’s agriculture is in deep and continuing distress and its farmers are committing suicide in large numbers because the government has reduced its investment in agriculture and R&D. While all this is happening, the media is cheering the rise of the stock market and reporting on fashion shows. Worse still, now we have the shocking spectacle of a private corporation preying off the distress of farmers by spreading its tentacles all over the country and claiming to provide what the government should be doing. Read the story of this atrocity here. (Registration may be required.)
Google Spreadsheet Sucks
I have an insanely complex spreadsheet that I use to manage my investments. I decided that I wanted to upload it to Google Spreadsheets so that I don’t have to depend on access to my home laptop. Ran into two problems:
- Upload of the .ods doc failed. When I converted the same document to .xls, it uploaded. So much for Open Document support.
- It turns out that Google still does not support pivot tables. This is insane. How can you claim to be a serious competitor to Microsoft Excel if you don’t support pivot tables?
The second problem is a showstopper for me. Sigh.
Pragati on Liberal Nationalism
The May 2008 issue of Pragati is out. The focus this time is on liberal nationalism. I have an article claiming that liberals tend to ignore the need for nationalism and a need for a cultural shift before India can accept liberalism. Gautam Bastian writes of the conflict between liberal and nationalist ideals, and Raj Cherubal believes that a secular-right victory can occur through tactical alliances with the secular left. I disagree with the last view, and my view is somewhat at variance with Gautam’s so it was an interesting experience to edit the articles without injecting my own views.
The other articles are excellent too. I particularly recommend the interview with K Subrahmanyam.
A Modest Proposal to Cut Inflation
Our esteemed Prime Minister, Dr Manmohan Singh, has precisely the right solution. High salaries to employees of Multinational Corporations is the cause of inflation. Giving salaries to too many people causes them to chase goods pushing up their prices. Instead, salaries at the low levels should be cut and it should be increased at the highest levels. That will reduce inflation in two ways. First, the consumption basket of the rich is different. The likes of Anil and Mukesh Ambani do not compete with the poor people as much as people like me do for their consumption basket. Second, super-rich people save more than merely rich people, putting downward pressure on prices.
Increasing income disparity is just the right approach to controlling inflation.
The Future of Futures Trading
An expert committee set up over a year ago to study if futures trading influenced commodity prices will neither recommend a ban nor favour continuing trade in essential commodities, said a member of the panel. (AP)
When I heard this news a couple of days back, I could guess why. The panel is headed by an economist who also happens to head the planning commision. If he claims that Futures trading causes an increase in prices, his fellow economists will laugh at him. If he claims that it does not, he gets into trouble with his political masters.
Sharad Joshi, founder of Shetkari Sanghatana and the member of the panel referred to above, explains that there is more to it in a well argued article.