What is Democratic Capitalism?

[Saab]

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Footnote to the above article.

David Walker is a serious man. Director of the GAO [General Accounting Office] until last April, he is famous for having compared, in a speech in August 2007, the U.S. to the Roman Empire, as regards "decline and fall."

The article he published today in The Financial Times is of special interest. We'll retain the first two paragraphs of his analysis, because this expert on tax and budget accounting, who does not fail to give a political dimension to his assessments, implicitly raises the supreme question and this is indeed enough ... In a word, everything is in his analogy: it was said that AIG, Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch were the titans of finance and credit and, accordingly, "too big to collapse"; they have, in one way or another, "collapsed." It also said that "really, the U.S. government is 'too big to fall'..." Do you want to press the analogy further? [...]

Walker continues through various technical, accounting, and budgetary assessments. The important thing is obviously that he asked this question, that he ultimately evokes this assumption that ignores the final taboo of this belief in the invincibility of the Americanist government, seen as an absolute given. This belief is obviously an act of faith, but the fundamental act of faith of the belief in the American model, in the Anglo-Saxon structure that holds the whole system together. In the case of the U.S. government, through the various emergency decisions that it has been lead to take, is that it is increasingly binding its fate to the stability, and even survival, of the financial system. It is resulting increasingly in the system in distress being identified with the U.S. government, hoping that this government will correct this system. Thereby is established a link of responsibility of the government vis-à-vis the system. The substance of the link so established is obviously understood, since all our valiant ideologues of neo-liberalism are no longer afraid to act as good old socialists, by rushing headlong into nationalizations. But this action is, of course, in no way constructive, but urgent action undertaken under the rule of necessity, it is this need that establishes a link between the government and the financial system at risk. A collapse of this system would immediately entail a vital menace against the stability and structure of the U.S. government, since the responsibility of this government would be engaged. Before even discussing more precise general assumptions, we can envisage such a situation leading immediately to powerful centrifugal tensions in the very structure of the Americanist system.

(To illustrate this point, we recall that the last attempted secession of a State of the Union dates back to 1933, from the State of Montana, that made its Congress vote on a proposal to secede from the federal structure (the proposal was rejected) by opponents of Washington's economic policy at the depth of the Great Depression.)

 

[Saab]

Here is a write-up from the Bhaaratheeyan perspective. My congratulations to Sri R.Vaidyanathan.

Saab

Decline of the West a prerequisite for Hindusthan as global power

http://dharma1. blogspot. com/2008/ 09/decline- of-west-prerequi site-for. html
Tuesday, September 23, 2008 3:16:00 AM (DNA)
Failure of American financial institutions is a reason to rejoice
R Vaidyanathan
The decline of the West is a pre-requisite for the emergence of India as a global power.

I have been closely watching the reaction of our press, particularly the business papers and TV channels, to the implosion that has taken place in the Western financial markets and institutions.

Lehman Brothers, the original cotton trading company of the mid-nineteenth century fame from Alabama, is no more.

US government is acting like the erstwhile Soviet Union in nationalising institutions and bailing out market mayhem.

Our experts and analysts are pathetic in responding to this. Some of them are whining and the rest ad nauseam repeating about globalisation and impact on India, etc. It proves once again that the colonial gene is embedded in all of us and it refuses to recognise opportunities and turns advantageous as disasters.

First thing first. The decline of these institutions — many more to come — is the best thing that has happened to countries such as India, which are poised to play a larger role in global financial affairs.

Let us have some facts. India had 25% of global income in 1500 through 1700; by 1820, this was down to 17% and by 1951 to 5%; in 1998, the country's share stood at 5.5% (according to Angus Maddison in The World Economy: A millennial Perspective, OECD Development Centre Studies -2007; Table-B-20 Appendix B; pp263).

We need to reclaim our position in the world — it is just returning to where we were. By 2025, we should have at least 25% of global GDP.

This requires strategic thinking and a new mindset. We are not going to be easily accepted as a global power. There is going to be a tussle between existing powers, declining powers and emerging powers.

Nobody is going to offer the seat in the top table to us by request or by supplication. We need to earn it and be in a position to demand it. We need national purpose and a single minded devotion to achieve it.

The decline of the global financial institutions provides great opportunities since our growth is primarily due to our domestic savings.

Foreign direct investment and foreign institutional investment put together is not more than 8% in relation to our gross savings in any one of the past several years.

Also, nearly 80% of our domestic savings of 35% comes from household savings. In comparison, the USA has meagre or negative household savings.

It has been running a consumption economy for too long, sustained by the savings of other countries, particularly Asian. It has also taken financial convergence to the extreme — anybody can do anything.

Otherwise, it would be difficult to explain a good old traditional insurance company such as AIG having such significant exposures in derivative products.

It is important to recognise that Europe is past, USA is the present and countries like India are the future. USA is slowly getting into a situation of the UK, which started declining after the Second World War.

What should India have done?

Immediately after the collapse of Freddie Mac and Fannie Mae and the crisis in many investment banks, our finance ministry should have called a meeting of major banks, industrialists and some — shall I say obscenely rich — NRIs and announced the readiness of some Indian groups to acquire some of these institutions after due diligence.
This is just to put the cat among pigeons and announce to the world that we have arrived. It is not required that we should acquire these sick entities.

It is just to express our readiness and also to tell the world that we want orderly transition as a responsible global power. It is not late even now, since many more commercial banks of US origin are in the queue.

However, India was silent and generally mumbling that we are not affected, etc. It was behaving like a small sidekick country.

The country should call for an alternative global financial architecture, which is built on the real economy and not on the paper economy.

The disconnect between stock markets and the real economy was accentuated by the derivative markets where the tail had begun to wag the dog.

This fact has been told many a time by many from countries such as India.
India and China should play an important role in evolving the alternative global financial architecture and for which we should start working.

The existing institutions have failed and the existing market mantra has been exposed in the most compromising position wherein the market and government are caught in the act.

Unless we internalise the fundamental truth that the decline of the West is a pre-requisite for the emergence of India as a global power, we are not going anywhere.

To do that, we need to be pro-active and not supplicant. After all these acts of thievery, thuggery and market manipulations and mis-sales, it is interesting that no one categorically and unambiguously and unequivocally proclaims that the US financial system is a big sham and the regulations are totally ineffective and the marauders and vandals have been running major institutions from smoke-filled pubs .

That is the fact.
To build a new architecture, India should take the lead. Unfortunately, we have the US lobby, Chinese lobby, Pakistan lobby and all sorts of lobbies in the Capital, but no India lobby yet.
Until we do, we cannot but be mouthing inanities and discussing inconsequential things.
The author is professor of finance, Indian Institute of Management — Bangalore, and can be reached atvaidya@iimb. ernet.in.
The views are personal and do not reflect that of his organisation.
http://www.dnaindia .com/report. asp?newsid= 1192432

 

[Saab]

'Corrupt Asians' feel vindicated by Wall St bust

The global financial crisis has left a lot of glum faces on Wall Street. (Photo: AP)


Reuters
24 Sep 2008 07:37:00 PM IST
KUALA LUMPUR/SEOUL: A decade ago, Federal Reserve Chairman Alan Greenspan declared that Asia would realise that "market capitalism, as practiced in the West, especially in the United States, is the superior model".Asia never quite saw it that way. Now the region's policymakers can feel that the collapse of Wall Street investment banks and Washington's planned $700 billion bailout vindicated their suspicion of freewheeling capitalism.The implications for investors in the region are enormous, if not immediately obvious. Governments may slow deregulation, rush to rescue of troubled companies or clampdown more quickly on market ructions.Greenspan made his comments to U.S. lawmakers to justify a bailout for Asia's collapsing economies during the 1997/1998 crisis. He is now in the dock, charged by some economists with pursuing a lax monetary policy and loose regulation that helped create the bubble that led to Wall Street's financial implosion.Asian policymakers have not forgotten the hectoring they got from the United States and the International Monetary Fund, which dispensed cash in exchange for hiking interest rates, closing banks, slashing spending and opening markets."At that time, (IMF and U.S. officials) behaved as if they were treating an owner of a small business just about to go bankrupt," said Chung Duck-koo, chief South Korean negotiator with the IMF in 1997, when he was a deputy finance minister.Malaysia, which spurned both the cash and the IMF advice by fixing the value of its ringgit currency and imposing capital controls back in 1998, sees Washington's rescue efforts as proof it had converted to its way of thinking."We are now seeing the West, particularly the U.S., ignoring the standard IMF prescriptions and implementing the same measures that Malaysia had done during the 1997 crisis," said Nor Mohamed Yackop, a top Malaysian finance ministry official, who in 1998 helped impose capital controls.BITTER MEDICINETen years ago Asia was on its knees as a financial meltdown rocked the region after a series of crises in Latin America that later bankrupted Russia. Despite high growth and low inflation, Asia's tiger economies succumbed due to overvalued exchange rates, persistent current account deficits, speculation in financial markets and dependence on short term capital.Most countries applied the IMF's bitter medicine and consequently South Korea's economy shrank 7 percent in 1998, Indonesia contracted by 13 percent and Thailand by 10.5 percent, according to the Fund's data.But the region recovered quickly, amassing in the process trillions of dollars in foreign currency reserves, first as defence against another crisis and later thanks to windfall profits from the global commodity boom.Ironically, much of those reserves are invested in U.S. Treasury bonds, bankrolling Washington's efforts to contain today's crisis, with the latest plan to buy toxic debt alone earmarked at $700 billion and the total cost estimated at up to $1.8 trillion.The irony is not lost on nations that took draconian steps in return for $35 billion the IMF initially offered in 1997 to rescue Indonesia, South Korea and Thailand and later topped it up with extra $77 billion.Critics say the "Washington Consensus", a term referring to the market liberalisation pursued by the IMF and the U.S. administration, has led to today's meltdown."It was so patronising, first it was the lazy Latinos, then it was the corrupt Asians and their crony capitalists," said Professor Stephany Griffith-Jones, a leading authority on capital flows and developing economies."The lesson is you need to regulate everything. Any deregulated market in developed and developing countries leads to these results," said Griffith-Jones, Executive Director of the Initiative for Policy Dialogue at New York's Columbia University.BUBBLES TO STAYOthers, however, say the IMF-bashing goes too far and that the crises that rocked Latin America and Asia were largely of their own making.They also argue that it is impossible to staunch the capital flows that finance growth in many developing economies."No doubt capital markets have plenty of problems, often they generate these bubbles. The bubble explodes and then there is a financial crisis," said Domingo Cavallo who was Argentina's finance minister from 1991-1996."So far there has been no recipe for avoiding these problems," said Cavallo, who was the architect of Argentina's plan that fixed the dollar-peso exchange rate at parity, crushing inflation and boosting growth and investment."We thought it was good for Latin America, it was not an imposition of Washington."South Korea's Chung says rich nations may tighten regulation and see more government intervention, but developing countries can ill-afford to reverse to pre-1997 policies."In developing or underdeveloped countries, in which each government has the mission to improve overall welfare and overall income level, there is no choice for them but to continue to accept and pursue globalisation."Paul Luke, an investment banker and fund manager who lived through emerging market crises from Brazil in the 1980s to Russia in 1998, says those who ignored the IMF advice, not those who followed it are now at the centre of the global upheaval."A lot of the countries that have followed it are countries that have done rather well," he said."It is two countries in the Organisation for Economic Co-Operation and Development, the U.S. and Britain, who haven't been following the Washington Consensus."

 

[Saab]

U.S. will lose financial superpower status-Germany


NOAH BARKIN
Reuters
September 25, 2008 at 6:30 AM EDT

BERLIN — Germany blamed the United States on Thursday for spawning the global financial crisis with a blind drive for higher profits and said it would now have to accept greater market regulation and a loss of its financial superpower status.

In some of the toughest language since the crisis worsened earlier this month, German Finance Minister Peer Steinbrueck told parliament the financial turmoil would leave “deep marks” but was primarily an American problem.

“The world will never be as it was before the crisis,” Mr. Steinbrueck, a deputy leader of the centre-left Social Democrats, told the Bundestag lower house.

“The United States will lose its superpower status in the world financial system. The world financial system will become more multi-polar.”
Mr. Steinbrueck, whose efforts to secure greater transparency on hedge funds during Germany's G8 presidency last year collapsed amid objections from Washington and London, attacked what he called an Anglo-Saxon drive for double-digit profits and massive bonuses for bankers and company executives.

“Investment bankers and politicians in New York, Washington and London were not willing to give these up,” he said.

He proposed eight measures to address the crisis, including an international ban on “purely speculative” short-selling and an increase in capital requirements for banks in order to offset credit risks.

The collapse of U.S. investment bank Lehman Brothers and financial woes of other financial institutions like insurer AIG have prompted the U.S. government to propose a $700-billion rescue package for the country's financial sector.

Mr. Steinbrueck welcomed U.S. efforts to stem the crisis but said it was neither necessary nor wise for Germany to replicate the U.S. plan for its own institutions, which are under pressure but do not face the same risks as their U.S. counterparts.

The German Bundesbank said earlier this week that the financial market turbulence would hit the earnings of Germany's big commercial lenders, its publicly-owned Landesbanks and its co-operative banks.

Tighter credit in the wake of the crisis could also constrain household consumption and corporate investment, increasing the likelihood the German economy will fall into recession this year.

But Mr. Steinbrueck said German regulator Bafin believed German banks could cope with losses and ensure the safety of private savings, calling the turmoil primarily an American problem.

“The financial crisis is above all an American problem. The other G7 financial ministers in continental Europe share this opinion,” he said.
“This system, which is to a large degree insufficiently regulated, is now collapsing – with far-reaching consequences for the U.S. financial market and considerable contagion effects for the rest of the world,” Mr. Steinbrueck added.

He advocated stronger, internationally co-ordinated regulation, saying the crisis showed that national action was not enough.

“The International Monetary Fund should become the controlling authority for the application of worldwide financial market standards,” he said.

 

[Saab]

The tables have turned on Wall Street


MARCUS GEE
Globe and Mail Update


September 24, 2008 at 6:00 AM EDT

As far as we know, U.S. President George W. Bush didn't exactly ask China for help when he discussed the Wall Street crisis with Chinese President Hu Jintao on the telephone Monday. Mr. Bush is a proud man and the United States a proud country, still certain of its position at the centre of the economic and financial universe.

But the shift in power from West to East must have been palpable all the same. Wall Street, the citadel of Western capitalism, is in its worst crisis in decades. The American economy, once the powerhouse of the world, is on the brink of recession. China, meanwhile, continues to grow at a pace of more than 10 per cent a year, with most experts predicting only a modest slowdown as a result of the troubles in the United States.

Two famous U.S. investment banks, Lehman Brothers and Merrill Lynch, have vanished from the face of the earth as independent entities. Two more are transforming themselves to survive.

China's four biggest banks all report healthy balance sheets and big cash reserves. None has been seriously compromised by the Wall Street debacle.

The biggest bank in the world, based on its market capitalization as of Sept. 15, was Chinese: Industrial & Commercial Bank of China. In fact, three of the top 10 banks by that measure are Chinese (while four are American).

After it bails out Wall Street, the United States will be another $700-billion (U.S.) in the hole. Its government budget deficit is already the highest ever recorded in dollar terms. Next year, with the bailout costs added in, it could approach $1-trillion, which would also make it one of the biggest on record as a percentage of the economy.

China, meanwhile, sits Buddha-like atop $1.8-trillion in foreign exchange reserves. Its debt and deficit are negligible by American standards.

The United States needs China, economically and financially, as never before. For some time now, China has helped prop up the U.S. economy by plowing the earnings from its soaring exports into U.S. government securities such as Treasury bonds. That has effectively financed the growing U.S. government debt, at the same time keeping U.S. interest rates relatively low and (until recently) the dollar relatively high. That, in turn, has allowed U.S. consumers to snap up Chinese-made consumer goods for cheap, buoying the American standard of living.

The Wall Street crisis means that Washington relies even more on Chinese wealth. Just three years ago, American legislators felt confident enough to spike the purchase of Unocal Corp., a leading U.S. oil producer, by China National Offshore Oil Corp. It was a snub to Beijing from a United States that felt uneasy about seeing its corporate assets snapped up by a foreign power.

Today, slices of Wall Street corporate giants are being shopped around to Chinese investors like so many used cars. China Investment Corp., Beijing's $200-billion sovereign wealth fund, is being courted to increase its 9.9 per cent stake in Morgan Stanley, for example. Suddenly, Chinese money doesn't look so bad.

It's a breathtaking reversal of fortune. Remember that in past financial crises – Russia's loan default of 1998, the Asian financial crisis of the late 1990s, the Mexican devaluation crisis of 1994 – it was Washington or its stand-in, the International Monetary Fund, that galloped to the rescue. Now it is Wall Street that is in need of rescuing.

No, it hasn't quite come to the point where Mr. Bush is pleading to Mr. Hu for a lifeline. Even if he did, Asian governments are trying to steer as far away from the Wall Street mess as they can. But Asia's new influence is being felt all the same. The dominoes started falling in the first place partly because Asian investors were getting frightened about the money they had tied up in U.S. mortgage giants Freddie Mac and Fannie Mae. When they started pulling some of their money back, the mortgage twins began to crumble.

It is not just the U.S. financial system that has been weakened by the past week's crisis. It is the whole brand of U.S.-style capitalism. Henry Paulson, the U.S. Treasury Secretary, has been fond of delivering lectures to Beijing on everything from how they value their currency to how they run their banking system. Just imagine him trying to do that now.

 

[KRS]

This is an excellent artcle, posted by Sri Vaidyanathan, but again it illustrates how even a few of the intellectuals and educated in India do not understand how and what supports American Capitalism (as opposed to pure Capitalism).

Firstly, a side comment:

India was second in estimated GDP from 1500 to almost 1675, following China. during 1675 to 1700 it attained the top rank. Do you all know when this happened? Moghul kings ruled India during this period, and India attained the top ranking during Aurangazeb's rule! It started declining thereafter. I wonder what the Hindutva crowd in this Forum has to say about this?

Capitalism is not based on the Financial Markets only. Fairly free financial markets are needed to fuel the economic growth. The actual growth is provided bt various company entities in different sctors, benefiting from the work (productivity) and the ingenuity (innovation) of their workers. I do not think there is any country on earth who can compare to American workers in this regard.

With all due respect to Prof. Vaidyanathan India can become a GDP giant (currently USA GDP is at least 10 times more than India's), only if the following occur:

1. India's middle class continue to grow.
2. India's infrastructure (esp. Power) meets the demand going forward, year after year.
3. Only if India sheds it's regressive human resources policies such as quotas, reservations, sops etc. Money that are wasted on these, should be redirected towards obtaing a strong quality education to every child till the last High School grade.
4. Only if India gets out of this vote bank policies and start functioning as a true egalitarian society with equal opportunities for all. This can only happen if the impossible occurrs: that the country matures in to a true democracy where people vote based on issues (majority of the voters anyway - because prejudics will always exist) and not swayed by sops and vote for Gunda Raj.
5. People have to think that they are Indian first.
6. Merit should be the only criterion for getting hired.
7. Free all businesses that should be run by private sector from the Government's clutch. Air India is a prime and only one of numerous examples.
8. Eliminate the second economy supported by the black market, created by corruption (start with political corruption) - elimination of corruption should be run by a politically neutral entity, with oversight from may be the Supreme Court, as this is a national security issue.

I am sure I have left out a few more. If India does all of the above, financial glory will follow. Better than a gimmick of buying some failing financial institutions in the west.

Regards,
KRS

Here is a write-up from the Bhaaratheeyan perspective. My congratulations to Sri R.Vaidyanathan.

Saab

Decline of the West a prerequisite for Hindusthan as global power

http://dharma1. blogspot. com/2008/ 09/decline- of-west-prerequi site-for. html
Tuesday, September 23, 2008 3:16:00 AM (DNA)
Failure of American financial institutions is a reason to rejoice
R Vaidyanathan
The decline of the West is a pre-requisite for the emergence of India as a global power.

http://www.dnaindia .com/report. asp?newsid= 1192432

 

[Saab]

Dear Admin and friends,

I feel quite uncomfortable posting anymore seeing some other postings in other threads. I am taking a holiday.

Regards,
saab

 

[Desi]

Dear Saabji,

You were educating the readers with various view points sometimes with articles that were even contradictory to one another so people can know all sides of the unheard of global economic crisis.

I understand your predicament when you decided to stop posting. I have seen constant heckling and deriding and opposition for opposing's sake being carried out against you. you have logically thought something that has happened to the other thread might happen to yours too. You are too much of a gentleman to stand up for the ruffian so have decided to stop further posting.

It is our loss.

Hope the situation would improve so we can have the benefit of your participation.

Regards,

 

[KRS]

Vow! Ruffian! Only a bully knows the other!

Posting contrary opinions is not 'harrassment' (I am even shocked you know such big words!). Have you seen me hurling any four letter words aagainst the originator of this thread? Of course not! It is because as long as you do not throw any four letter words towards me, I will not do so either.

But then, what would you know about all this? Your only asset is your sailor's mouth with a matching brain the size of a millionth of a small pea. I am even astonished that you were reading the postings under this thread. Where are you now? On the second posting or still on the first? Grow up, then at least you will not be called a runt.

My apologies to the thread originator - this guy intruded and charecterized me here; and so I have to respond.

KRS

 

[pannvalan]

As a person who have studied economics, international business/forex and banking for long, I venture to submit some of my viewpoints.

1. Democracy and economic growth have no correlation.
2. During the last 15 years or so, the private savings in U.S.A. has declined to less
than 7 %, as against the average of 33% in India and China and other Asian
countries like Japan, Malaysia and South Korea.
3. Scandinavian countries are also famous for broken families, atrocities against
women, all sorts of crime in the society. (Remember the assassination of Olof Palme
in the aftermath of Bofors?) It is quite incidental that their income and wealth
levels are on the top, but can that justify all the nonsense taking place there?
Economic progress accompanied by cultural degradation will have no meaning and
it will spell doom and disaster ultimately.
4. I do not know where from the finding that India was at its best during Aurangazeb
regime was obtained. I have no facts to confirm the veracity of this statement.
(The concepts of GDP, national income, per capita income etc. were not there
during Aurangazeb period. Then, how these were measured?) It was only during
Aurangazeb's rule, forcible conversion and mass killings of Hindus took place, on an
unprecedented scale.

All historians have recorded the period of Guptas as the golden age of India.

5. I told my friends at Mumbai in 2001 itself (before 9/11) that U.S. Dollar would lose
its shine and vanish totally from the forex market in about 50 years. It was not a
mere prediction, but a responsible forecast.

Recent happenings in US only confirm my observations.

6. With the collapse of the whole banking system in USA, what is going to happen
next? This is uppermost in the minds of all, throughout the world. With the US
congress rejecting the 700 billion dollar bail-out plan, things are getting murkier
and their repurcussions are already felt here in the capital market.
7. Thankfully for us in India, our economy is not fully integrated with US markets.
But, the export sector taking the hit is unavoidable.

Let us see what happens next, keeping our fingers crossed.

 

[KRS]

Dear Pannvalan,

Thank you for responding to my posting. While I have also studied basic economics, my knowledge comes purely from reading various books/journals. Anyways, my answers are in blue below:

As a person who have studied economics, international business/forex and banking for long, I venture to submit some of my viewpoints.

1. Democracy and economic growth have no correlation.
There is definitely a connection between a free market (or capitalistic) economic growth and democracy. Autocarcy, dictatorship, communist societies clearly control the market direction, flow of capital and the distribution of resultant wealth. Democracies which are based on diverse populations tend to veer towards free market concepts. Look at all the affluent countries around the world. You will see democracies. While one can not say that all countries with strong economies are democratic, over time countries with strong economies clamour to have democracies - somewhat akin to following Maslow's principle. Even China is trending towards that and India, South Korea etc., are examples of this phenomenon. So, I humbly disagree with you on this.
2. During the last 15 years or so, the private savings in U.S.A. has declined to less
than 7 %, as against the average of 33% in India and China and other Asian
countries like Japan, Malaysia and South Korea.
USA is never known for it's internal savings rate. I think that in a global economy where consumer spending is also a very important part of the economy, this does not matter. It has already been shown that in India the savings rate will decline as the credit markets develop and consummer spending increases.
3. Scandinavian countries are also famous for broken families, atrocities against
women, all sorts of crime in the society. (Remember the assassination of Olof Palme
in the aftermath of Bofors?) It is quite incidental that their income and wealth
levels are on the top, but can that justify all the nonsense taking place there?
Economic progress accompanied by cultural degradation will have no meaning and
it will spell doom and disaster ultimately.
What you consider as cultural dis-integration, the people there think as progress. Anyways, by all accounts for global standards of living they score the highest. The point is that because they are homogeneous and more or less agree on certain internal principles, they can be socialistic.
4. I do not know where from the finding that India was at its best during Aurangazeb
regime was obtained. I have no facts to confirm the veracity of this statement.
(The concepts of GDP, national income, per capita income etc. were not there
during Aurangazeb period. Then, how these were measured?) It was only during
Aurangazeb's rule, forcible conversion and mass killings of Hindus took place, on an
unprecedented scale.
All historians have recorded the period of Guptas as the golden age of India.
Please look at various references available on India's economy between 1500 to 1700 A.D. especially in Wikipedia, where more references are cited. Sri Vaidyanatha cites this - I only said who was ruling in these periods. Yes, Gupta regime is considered to be 'golden' age for a Hindu kingdom. But I do not know whether research is available to compare India during that time with any other empires on earth.
5. I told my friends at Mumbai in 2001 itself (before 9/11) that U.S. Dollar would lose
its shine and vanish totally from the forex market in about 50 years. It was not a
mere prediction, but a responsible forecast.

Recent happenings in US only confirm my observations.
May be you are correct. But as many economists have said, it is dangerous to bet against the strengths of America. The strengths of the American society will still be there in fifty years. They control the global economy. I don't see how the dollar will disappear in fifty years, on what assumptions.

6. With the collapse of the whole banking system in USA, what is going to happen
next? This is uppermost in the minds of all, throughout the world. With the US
congress rejecting the 700 billion dollar bail-out plan, things are getting murkier
and their repurcussions are already felt here in the capital market.
The banking system has not collapsed - it is being consolidated. The issue is liquidity and the credit markets, nothing more. There are ways to infuse confidence and the 700 Billion infusion is only one of the ways to do it. Yes, this will affect the global capital markets for a while. Yes, there may be a recession. But I think that declines and even recessions are part and parcel of a capitalistic system (in this case, this could have been avoided).
7. Thankfully for us in India, our economy is not fully integrated with US markets.
But, the export sector taking the hit is unavoidable.

Let us see what happens next, keeping our fingers crossed.

 

[pannvalan]

Dear KRS,

Thanks for your detailed reply. Please let me add/clarify certain points.

1. It is agreed that it is a temporary setback for the USA. Because, in the larger
interests of other developed countries and some Asian countries like China and
India, who are net creditors to the USA, the U.S. economy will not be allowed to
crumble at this juncture. At the same time, some more bank/Savings organisation
failures in USA are inevitable. How long this can go on?
While some rogue companies may be merged with or absorbed into a larger entity,
it cannot be gainsaid the strength of the merged entity will not be all the same,
post-merger.

2. This game will continue for some more decades, until the European and Asian
economies put together become mature and strong enough to function as a viable
alternative for the U.S. economy. In essence, developing nations need not
depend on U.S. economy alone to thrive. Alternative markets will emerge by then.

3. I do not support either free market enterprise (euphemism for capitalism) or
socialism (again, euphemism for excessive state intervention). What we need is
a conducive atmosphere for growth and availability of variety of choices for the
ultimate consumers, to avoid monopoly and exploitation. To ensure stability and
trust, government must continue to act as a regulator, in a broader sense. If
necessary, government must not hesitate to intervene - intervene effectively.

4. Any economist will agree that nationalisation of losses is tantamount to rewarding
inefficiency and irresponsibility. Now, it appears that USA commits this blunder.

5. In capitalism, profit alone can be the motive. Social objectives are least cared for.
Can anyone be compelled to produce and offer something which entails losses or
a slender margin of profit? Irresponsible capitalism may destroy a whole nation.
There are ample examples in the past.

6. My complaint is this:

We Indians overdo everything- socialisation or globalisation.
While the central and state governments should ensure uninterrupted availability
of certain basic goods and services at an affordable cost to the public at large,
privatisation in other sectors may be permitted - even encouraged.

In the name of globalisation, we miserably failed to protect our poor farmers that
led to massive suicides in Andhra Pradesh and Maharashtra. Similarly, it is our
great mistake to have let down our exporters to face the onslaught of vested
foreign interests, who are bent upon manipulating the Indian capital and forex
markets, to suit their requirements.

7. With unchecked inflows of foreign money, in the form of FII in capital market
(through overseas mutual funds), money market and debt market and in the form
of FDI in Infrastructure and other strategic sectors, like Agriculture and Food
products, banking, insurance, media etc., more harm will be done, than the
benefits they bring. Emergence of online trading in commodities is another calamity
in waiting.

8. Please tell me what the capitalistic world could do to check the spread of
terrorists' networks everywhere. Similarly, it is the very same capitalistic nations
which initially funded Osama Bin Laden and the like and gave them arms and
training too.

9. Let us not take extreme positions in this kind of situations. Let us face the
criticism honourably and try to correct the mistakes ourselves. Before we learn
lessons - sometimes very costly lessons - from the past, we may not be alive
here.

 

[KRS]

Dear Sri pannvalan Ji,

I agree with your view that unbridled Capitalism is not the answer. Private enterprise in my opinion has to follow only two edicts:

1. It has to make optimum profits for it's business, providing value (meaning what the society and people need and want).

2. While doing so, it has to follow the law.

The second factor is how one controls the 'evils' of captalism. This is the social policy side of tempering the unchecked greed generated by the free markets. Capitalism, in my mind is purely an economic enterprise to generate wealth with the best available efficiency. It is then up to the society through the government to employ all the checks and balances.

I have visited China several times. Both India and China have some deep 'structural' problems in their societies currently that would preclude them to over take USA in any near future. I have enumerated several such factors that are constraining India elsewhere in this thread.

While globalization may be viewed in negative sense in some quarters, I really think that is the level playing field offered to the developing nations in a long, long time by the western countries. They are opening up their markets to the developing nations to compete with their own businesses. It is a risk on their part, but they are counting on their ingenuity and entrepreneurship to dominate. But for a country like India, it is a golden opportunity to compete (as Tatas, Reliance, the IT pure plays are doing). I think this will allow India's living standards to increase over time and would attract more global investments to build infrastructure and the like.

The reason why the USA can have such a budget deficit is because they attract such a huge investments by foreigners in their markets. This is why they do not worry about financing their development through domestic savings. India should understand this model. As the capital markets get globalized, with free flow of investments, the global investments will go after the opportunities in countries which have long term political stability, intellectual capacity, people brawn and huge consumer markets. And this over the long term favours India. We will abolish poverty as we know it.

If our villages get prosperous, then India will come out of this long history of feeling as a 'poor' nation and will take her rightful place of pride in the world. This is a very once in a lifetime excellent chance to eradicate poverty through globalization with the right policies.

There is no one in the world telling India not to safeguard the interests of her farmers. It is India's business alone to do it with correct policies. I do not think that 'globalization' is the one to be blamed here.

The Afghan war against the soviets and to defeat them at any costs by the 'free' world powers unfortunately has created the islamist monster. USA not investing in Afghanistan after the Soviet withdrawal unfortunately was short sighted and has contributed to the current terrorist problem globally. But America also has paid quite a price for this.

Regards,
KRS

 

[malgova.mango]

Sri Pannvalan!

Me no good in economics - but with some common sense can i post this for your consideration...

The banking system failed in US due to huge influx of fundings - they don't know what to do with the excess , So they overlent it and found it to hard to get the returns.

But on the otherhand the fund managers or brokers raise capital and invest in every nooks and corners of the world. There investment in US back fired and it results in temporary chaos. But can I assume with some takers like Warren Buffet, it is going to bounce back. Because these companies are not small , it has assets in every corners of the world to recover and to stand back on its feet?

am i somewhere near to the realities ..... or is it over simplification?

Regards

 

[pannvalan]

DEMOCRATIC CAPITALISM​

1. It is wrong to copy the western philosophies and economic models, as they are.
2. It is true in a free market economy, individual initiatives, talent and merit are accorded
due weightage and encouraged. Here also, subjectivity and bias play a major role.
3. When the desire to maximize profits reaches the level of greed, all problems arise.
4. Widening of disparities amongst the same group of population leads to frauds,
cheating and white-collar/cyber crimes, using the sophisticated technology.
5. On the other extreme, reservation and quotas kill one’s creativity and enterprise and
retard overall progress.
6. The western nations prescribe abolition of farm subsidies in India, but offer still
huge subsidies to farm sector in their own country. It is nothing but hypocrisy.
Industrialization on a grand scale could not prevent farmers’ mass suicides in
Maharashtra and A.P. Only because the Vajpayee government and Chandrababu
government failed to feel the pulse of the common man, their parties got defeated
in the polls. (Chandrababu Naidu was the only south Indian, Bill Gates wanted to
meet, when he visited India)
7. The stories of Mittal, Jindal, Tata Steel, TCS, Infosys and Lord Swaraj Paul are
quite interesting, but very rare. In case of Tatas and Mittals, they could acquire
only sick companies abroad.
8. Even the USA, considered a role model for India and others, has not fully opened up
its markets to us. Trade barriers still exist in one form or the other.
9. In the name of IPR/TRIPS, basic formulations and generic drugs of our pharma
majors (e.g. Dr. Reddy’s, Ranboxy etc.) are denied entry into USA.
10. Pollution and environmental/ecological degradation are larger issues that affect
only poor, developing nations like Srilanka, Bangladesh, Vietnam and also India
and China. Textiles, Leather and certain Chemical industries are a case in point.
The developed nations enjoy only the fruits, without the accompanying perils.
11. Who were the real culprits, in the case of holes in the Ozone layer?
12. As for the recent developments in the U.S. banking and insurance sectors,
unethical practices of the respective managements, huge, unbearable exposure to
bad assets and derivatives and major deviation from core functions (unrelated and
unwanted diversification) only caused such a catastrophe. Therefore, the Federal
Reserve going to their rescue, though understandable, is not at all justified.
13. The immediate fall-out of the failures in U.S. will definitely be found in other countries
who are their net creditors. Their investments in USA and the other
MNCs in which US Companies are the major shareholders, wherever they are
located, will shrink in value and sometimes become negative too.
14. Since the financial sector performance is bound to affect all other sectors in the
country, severe repercussions could be felt everywhere.

We must learn to strike a balance between industrial growth and development on
one side and social objectives aimed at well-distributed growth pattern amongst all
the sections of the society on the other.

Is that craving for too much?

 

[malgova.mango]

Sri Pannvalan!

You strike a good chord. But would you consider this?......

You need unfallible intelligence as a guide to meet your above-said objectives not mere human intelligence.

Regards

 

[spectator]

Dear Sri Pannvalan/Sri Malgova,

I am a retired economist. In my old age I am staying with my children in one place or another. Now I am staying in Canada and am looking closely at what is happening in the U.S. from a proximate point with an Indian eye.

Mr.Saab was posting great many relevant writings of knowledgeable people from divergent point of view. I could see he is quite knowledgeable in religion, history and political economy. He was giving readers some in-depth view.

Please listen to my friend Sri Venkatesh at http://video.google.com/videoplay?docid=4343898391323537541

He made the speech in Feb 2008. It is about an hour long but it is worth spending that time.

 

[KRS]

Dear pannvalan Ji,

My response in 'blue':

Regards,
KRS

DEMOCRATIC CAPITALISM​

1. It is wrong to copy the western philosophies and economic models, as they are.
I am confused here. In the modern economy, and government, there can only be two types on each extreme - pure private enterprise on one extreme and total controlled economy on the other. Almost all the countries practice somewhere in between. Is there an 'indegenous' Indian model, that is different from the 'western philosophies and economic models?'
2. It is true in a free market economy, individual initiatives, talent and merit are accorded
due weightage and encouraged. Here also, subjectivity and bias play a major role.
Please elaborate a bit more for my understanding - what subjectivity and bias play a majpr role in what?
3. When the desire to maximize profits reaches the level of greed, all problems arise.
I totally agree. But we can not count on people to observe this from purely an internal censorship based on 'dharma' alone. Like anything else you need societal controls.
4. Widening of disparities amongst the same group of population leads to frauds,
cheating and white-collar/cyber crimes, using the sophisticated technology.
True. Unfortunately in the post industrialized society, which is diffused, this is a problem. I don't know how one can go back to the Vedic time model or even to our golden pre industrial age to achieve the dharmic society. This is why, religion in modern times is important.
5. On the other extreme, reservation and quotas kill one’s creativity and enterprise and
retard overall progress.
Totally agree.
6. The western nations prescribe abolition of farm subsidies in India, but offer still
huge subsidies to farm sector in their own country. It is nothing but hypocrisy.
Industrialization on a grand scale could not prevent farmers’ mass suicides in
Maharashtra and A.P. Only because the Vajpayee government and Chandrababu
government failed to feel the pulse of the common man, their parties got defeated
in the polls. (Chandrababu Naidu was the only south Indian, Bill Gates wanted to
meet, when he visited India)
The issue is not subsidies. The issue is pricing in the world markets. They do not want 'dumping'. Again, India should take care of the suicide problem I don't understand how Bill Gates meeting with Naidu has any connection to what we are discussing.
7. The stories of Mittal, Jindal, Tata Steel, TCS, Infosys and Lord Swaraj Paul are
quite interesting, but very rare. In case of Tatas and Mittals, they could acquire
only sick companies abroad.
Sir, I beg to differ. There are so many Indian businesses today, without the high profiles of the companies you have mentioned above that are thriving in the global economy. (by the way, I thought Mittal is a British company). Acquiring companies which are troubled for cents on a dollar and turning them around is a sound business tactics. As the Indian companies have more cash, they will expand by acquiring more sound companies. By the way, what is 'Jindal?'
8. Even the USA, considered a role model for India and others, has not fully opened up
its markets to us. Trade barriers still exist in one form or the other.
True. But as a member of WTO, any nation now can bring a legal action with specific instances to that body, which is fairly even handed as evidenced by a few rulings against the western countries in the recent past.
9. In the name of IPR/TRIPS, basic formulations and generic drugs of our pharma
majors (e.g. Dr. Reddy’s, Ranboxy etc.) are denied entry into USA.
What I know is that they both are in US markets. USA DEA regime is quite rigorous. And has a step by step approach to marketing here. Any company that is certified, can do business here. Only when the rigid manufacturing standards are not followed, problems arise.
10. Pollution and environmental/ecological degradation are larger issues that affect
only poor, developing nations like Srilanka, Bangladesh, Vietnam and also India
and China. Textiles, Leather and certain Chemical industries are a case in point.
The developed nations enjoy only the fruits, without the accompanying perils.
Unfortunately, the west got industrialized before the perils of industrialization are known. Climate control is a complex issue and it affects all the countries.
11. Who were the real culprits, in the case of holes in the Ozone layer?
West was and is still a major contributor to this, with China and India now contributing. If you are arguing that industrialization is the cause, I agree. But now there seems to be a consensus emerging that this is happening.
12. As for the recent developments in the U.S. banking and insurance sectors,
unethical practices of the respective managements, huge, unbearable exposure to
bad assets and derivatives and major deviation from core functions (unrelated and
unwanted diversification) only caused such a catastrophe. Therefore, the Federal
Reserve going to their rescue, though understandable, is not at all justified.
Agreed. By the way, US Treasury is the one trying to go to the rescue not the Federal Reserve. Technicality apart, this is why the original 700 billion bill did not pass in Congress - because a lots of Americans are angry at these fat cats.
13. The immediate fall-out of the failures in U.S. will definitely be found in other countries
who are their net creditors. Their investments in USA and the other
MNCs in which US Companies are the major shareholders, wherever they are
located, will shrink in value and sometimes become negative too.
May be.
14. Since the financial sector performance is bound to affect all other sectors in the
country, severe repercussions could be felt everywhere.
Yes.

We must learn to strike a balance between industrial growth and development on
one side and social objectives aimed at well-distributed growth pattern amongst all
the sections of the society on the other.

Yes. But who should do this for India?

Is that craving for too much?

 

[pannvalan]

DEMOCRATIC CAPITALISM



1.It is wrong to copy the western philosophies and economic models, as they are.

I am confused here. In the modern economy, and government, there can only be two types on each extreme - pure private enterprise on one extreme and total controlled economy on the other. Almost all the countries practice somewhere in between. Is there an 'indegenous' Indian model, that is different from the 'western philosophies and economic models?'

Why not? Indigenous/Swadeshi models are available. But they vary depending on the purpose, focus, size of operation and geographical area of the markets. I denounce the theory ‘One size fits all’. For instance, for some segments, Gandhian models are best suited. For certain others, 'Sarvodaya' (KVIC) models (Agri and Rural based) are best suited. For a few others, SHGs are the best bet. For some more, Indian PSU models (popularly known as 'navarathnas') using the indigenously developed technologyare the best. In some other cases, PPP (Public Private Partnership) are ideal. The list is endless. The underlying principle is the optimum use of local resources, with just relevant technology and use of manpower of the right kind.

2. It is true in a free market economy, individual initiatives, talent and merit are
accorded due weightage and encouraged. Here also, subjectivity and bias play a
major role.

Please elaborate a bit more for my understanding - what subjectivity and bias play a majpr role in what?

If you recall how the Reliance empire in India registered a meteoric rise in the early 80’s, answer to this question can be had.

3. When the desire to maximize profits reaches the level of greed, all problems arise.

I totally agree. But we can not count on people to observe this from purely an internal censorship based on 'dharma' alone. Like anything else you need societal controls.

Here the role of the regulator is important.

4. Widening of disparities within the same group of population leads to frauds,
cheating and white-collar/cyber crimes, using the sophisticated technology.

True. Unfortunately in the post industrialized society, which is diffused, this is a
problem. I don't know how one can go back to the Vedic time model or even to
our golden pre industrial age to achieve the dharmic society. This is why,
religion in modern times is important.

It is here the ‘Welfare State’ concept the most apt one.

5. On the other extreme, reservation and quotas kill one’s creativity and enterprise
and retard overall progress.

Totally agree.

No explanation is required.

6. The western nations prescribe abolition of farm subsidies in India, but offer still
huge subsidies to farm sector in their own country. It is nothing but hypocrisy.
Industrialization on a grand scale could not prevent farmers’ mass suicides in
Maharashtra and A.P. Only because the Vajpayee government and Chandrababu
government failed to feel the pulse of the common man, their parties got defeated
in the polls. (Chandrababu Naidu was the only south Indian, Bill Gates wanted to
meet, when he visited India)

The issue is not subsidies. The issue is pricing in the world markets. They do not
want 'dumping'. Again, India should take care of the suicide problem I don't
understand how Bill Gates meeting with Naidu has any connection to what we are
discussing.

Subsidies do affect pricing and marketing. If mass suicides of farmers is termed
an internal problem of India, what should I say? I lived both in Maharashtra and
A.P. for many years, when this problem was at its worst. (Bill Gates chose to meet
Mr. Naidu, because it was in his own business interests. What was A.P. before
1993 and what it became after 1999, my friends from A.P. will be in a better
position to tell)

 

[pannvalan]

PART II



7. The stories of Mittal, Jindal, Tata Steel, TCS, Infosys and Lord Swaraj Paul are
quite interesting, but very rare. In case of Tatas and Mittals, they could acquire
only sick companies abroad.

Sir, I beg to differ. There are so many Indian businesses today, without the high
profiles of the companies you have mentioned above that are thriving in the global
economy. (by the way, I thought Mittal is a British company). Acquiring
companies which are troubled for cents on a dollar and turning them around is a
sound business tactics. As the Indian companies have more cash, they will
expand by acquiring more sound companies. By the way, what is 'Jindal?'

Many SSIs in India are thriving on global economy. The very same SSIs had to
seek the alms of Union Government, in the form of hike in Duty Drawback and
Interest Subvention, when the U.S. Dollar depreciated badly against Indian Rupee,
between February and November, 2007. Don’t you know that?

Mergers and Acquisitions are a big subject by themselves. They are accompanied
by hiving off some units, massive job losses, cultural incompatibility, having two
different classes of workers in the merged entity etc. that pose great problems for
all, including the government. (All these issues are not talked about in minute
detail beforehand, as the process of merger itself will fail if it is done honestly).

8. Even the USA, considered a role model for India and others, has not fully opened
up its markets to us. Trade barriers still exist in one form or the other.

True. But as a member of WTO, any nation now can bring a legal action with
specific instances to that body, which is fairly even handed as evidenced by a few
rulings against the western countries in the recent past.

Dear friend, have you forgotten the Doha round of talks, which saw for the first
time all developing nations including India rallying around, on common agenda,
in defiance of the bullying tactics of the western nations? Even today, many issues
remain unsettled.

9. In the name of IPR/TRIPS, basic formulations and generic drugs of our pharma
majors (e.g. Dr. Reddy’s, Ranboxy etc.) are denied entry into USA.


What I know is that they both are in US markets. USA DEA regime is quite
rigorous. And has a step by step approach to marketing here. Any company that is
certified, can do business here. Only when the rigid manufacturing standards are
not followed, problems arise.

I vividly remember the cases of Dr. Reddy’s and Ranboxy because, inspite of their
receiving certification from none other than WHO, inspite of their demonstrating
the effectiveness of their drugs at the time of ‘El Nino’ and later, they lost their
case in U.S. recently, only because of the partiality of the FDA.

10. Pollution and environmental/ecological degradation are larger issues that affect
only poor, developing nations like Sri Lanka, Bangladesh, Vietnam and also India
and China. Textiles, Leather and certain Chemical industries are a case in point.
The developed nations enjoy only the fruits, without the accompanying perils.

Unfortunately, the west got industrialized before the perils of industrialization are
known. Climate control is a complex issue and it affects all the countries.

But, the question here is who is a great loser? Are you aware that chemical,
industrial and even nuclear wastes of the western countries are dumped at the
backyard of the developing countries, including India?

11. Who were the real culprits, in the case of holes in the Ozone layer?

West was and is still a major contributor to this, with China and India now
contributing. If you are arguing that industrialization is the cause, I agree. But
now there seems to be a consensus emerging that this is happening.

Whoever does this mistake, is answerable to the whole world. But as of now, the
share of India and China in this sin is relatively much smaller.

12. As for the recent developments in the U.S. banking and insurance sectors, unethical
practices of the respective managements, huge, unbearable exposure to bad assets
and derivatives and major deviation from core functions (unrelated and unwanted
diversification) only caused such a catastrophe. Therefore, the Federal Reserve
going to their rescue, though understandable, is not at all justified.

Agreed. By the way, US Treasury is the one trying to go to the rescue not the
Federal Reserve. Technicality apart, this is why the original 700 billion bill did not
pass in Congress - because a lots of Americans are angry at these fat cats.

But, it will get passed very soon.

13. The immediate fall-out of the failures in U.S. will definitely be found in other
countries who are their net creditors. Their investments in USA and the other
MNCs in which US Companies are the major shareholders, wherever they are
located, will shrink in value and sometimes become negative too.

May be.

Yes, it is the real problem faced by other countries now.

14. Since the financial sector performance is bound to affect all other sectors in the
country, severe repercussions could be felt everywhere.

Yes.

No explanation is needed.

We must learn to strike a balance between industrial growth and development on
one side and social objectives aimed at well-distributed growth pattern amongst all
the sections of the society on the other.

Yes. But who should do this for India?

We the citizens of this great country have to do it collectively.

Is that craving for too much?

 

[malgova.mango]

Many thanks to you spectator ji!

This is illuminating and simple..... Hats off to the speaker.

Regards

Dear Sri Pannvalan/Sri Malgova,

I am a retired economist. In my old age I am staying with my children in one place or another. Now I am staying in Canada and am looking closely at what is happening in the U.S. from a proximate point with an Indian eye.

Mr.Saab was posting great many relevant writings of knowledgeable people from divergent point of view. I could see he is quite knowledgeable in religion, history and political economy. He was giving readers some in-depth view.

Please listen to my friend Sri Venkatesh at http://video.google.com/videoplay?docid=4343898391323537541

He made the speech in Feb 2008. It is about an hour long but it is worth spending that time.

 

[KRS]

Dear pannvalan Ji,

For brevity of time and space let me respond to your detailed posting, in a summary fashion.

1. The 'Indian' modles of economics you cite have been part of other nations as well for a long time. They are not unique. Sarvodaya and other models you describe focus mainly on distribution of wealth not on how to create them optimally in the modern economy. I would argue that the so called 'Navratnas' you cite actually keep on wasting more resources than they produce. Their returns in general are abysmal. In fact if they are floated in the stock market as independent firms, most of them will starve for adequate capital infusion through stocks. The government uses them for their own political purpose, killing their evolution to markets and products where the free market would lead them.

2. A 'welfare' society can be one which is supported by various segments of the society, not a government. Governments tend to perhaps trickle down barely cents on the dollar to reach the people they want to reach. This is true for any government all over the world. How about giving incentives for NGOs to bring any needed services to the segments of the society efficiently? Why should the big government do it? Government should be in the business of safeguarding the security of the nation, while promoting equality and justice for all. I think they should take care of the basic necessities of the poor and old and the children in the country. Nothing more, nothing else.

3. Gandhi Ji's programme was applicable during a specific time. I do not think with today's industrial models, it can apply widely. It can be applied to some small specific industry niche's but then there also it has to account for constant changes in the climate.

5. WTO was formed exactly as an avenue to resolve the East West problems. If you think that any country should just give in, irrespective of their size and wealth, then you are mistaken. The very fact that the Doha rounds are dragging on indicates that every country is looking out for each one's welfare. There is nothing wrong with this.

6. The plight of the farmers in Maharashtra and AP, I wiould squarely put down at the feet of the local administrations. Nothing to do with any foreign hand or even Bill Gates. This is the direct result of corruption and goodaism in Indian politics. How about straightening out these problems, before citing the foreigners as a reason for these suicides?

7. I believe that India's financial potential is enormous, only if the country adopts to free markets over time and abolish the government sops and repeal the odious quota system.

Regards,
KRS

 

[KRS]

A very well written article about the recent financial crisis (and Capitalism):

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/15/AR2008101503166.html

Regards,
KRS

 

[KRS]

Another very interesting article about the 'death' of Capitalism. If at all there is a consensus emrging, it is that the government has to put controls for an unfettered Capitalism. Again, in my opinion, Capitalism has no moral responsibility. It just needs to create wealth and follow the societal laws. This article really shows that there are still idiotic people who think that Communism can work!

http://www.ibnlive.com/news/thats-capital-how-karl-marx-forecast-market-crash/75982-7-p2.html

Regards,
KRS