Archive for January, 2016

Don’t call politicians/leaders Nazis, call them National Socialists instead..

January 29, 2016

B.K. Marcus has an interesting post on labelling certain politicians/leaders by the dreaded N word.

He says it is not needed. Just call them National Socialistst:

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The market doesn’t solve problems, people do

January 29, 2016

A superb piece by Louis Rouanet which sums up quite the core of philosophy of market economics.

One of the most important debate in economics is state vs markets. There is little doubt that most economists are on the side of markets. The oft quoted phrase in economics is let the markets work. But what is this market? How does it work?

Rouanet says well markets is the people:

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Why South African test team did not get its laurels?

January 28, 2016

What a piece by Jarrod Kimber of espncricinfo.com. In these days when all kinds of journalism is getting mediocre and flashy one wonders what keeps the espncricinfo.com writers going. I  mean one piece after the other. This one by Kimber is couple of notches above their usual good standards as well.

This one is on the South African test team. This is a team which despite a terrific test record between 2006-15 (till India and recent Englad series which they lost badly) does not get any the same laurels. Leave laurels, they are not even mention anywhere. The One Day choker ghost sticks to them despite they performing much better in the gold standards of cricket – test matches. Even better is their performance away from home.

So what is special about the period 2006-15? Well, the team did not lose a single test series away from home in the same period:

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SBI vs shareholders: Case of e-voting in shareholder meetings..

January 28, 2016

Capital market regulator SEBI has made it obligatory for listed companies to provide remote e-voting facility to its shareholders.

In this context, an interesting case has emerged between SBI and its shareholders. The bank which is trying its best to don an e-avatar, says the SBI Act 1955 does not allow for any such facility!:

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Greek Business confidence decline in 2015: Varoufakis effect or Troika effect?

January 28, 2016

Yanis Varoufakis, the former and regular blog writing finance minister of Greece defends himself in this piece.

In his end-of-2015 missive, Holger Schmieding of the Hamburg investment bank Berenberg warned his firm’s clients that what they should be worrying about now is political risk. To illustrate, he posted the diagram below, showing how business confidence collapsed in Greece during the late spring of 2015, and picked up again only after my resignation from the finance ministry. Schmieding chose to call this the “Varoufakis effect.”

There is no doubt that investors should be worried – very worried – about political risk nowadays, including the capacity of politicians and bureaucrats to do untold damage to an economy. But they must also be wary of analysts who are either incapable of, or uninterested in, distinguishing between causality and correlation, and between insolvency and illiquidity. In other words, they must be wary of analysts like Schmieding.

Business confidence in Greece did indeed plummet a few months after I became Finance Minister. And it did pick up a month after my resignation. The correlation is palpable. But is the causality?

It was actually the Troika effect:

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The marketing of the American President..

January 28, 2016

Nina L. Khrushcheva of The New School writes on one of the biggest marketing exercises in the world.

When it comes to political entertainment, it doesn’t get much better than presidential election season in the United States. Foreign observers follow the race to determine who is best equipped to lead the US – and, to some extent, the world – toward a more stable, secure, and prosperous future. But in America, entertainment is king, and Americans tend to focus on excitement above all – who looks better, has a catchier sound bite, seems most “authentic,” and so on, often to the point of absurdity.

This is not a new approach, of course. Edward Bernays, the father of modern public relations, examined it in 1928, in his book Propaganda. “Politics was the first big business in America,” he declared, and political campaigns are “all side shows, all honors, all bombast, glitter, and speeches.” The key to victory is the manipulation of public opinion, and that is achieved most effectively by appealing to the “mental clichés and emotional habits of the public.”

A president, in other words, is nothing more than a product to be marketed. And, as any marketer knows, the quality of the product is not necessarily what drives its success; if it were, Donald Trump would not be regarded as a serious candidate for the Republican Party nomination, much less a top contender. Instead, a president must serve as a kind of imaginary friend: a beer buddy for men, an earnest empathizer for women, or a charming Twitter user for the millennials.

Thankfully, it happens once in four years:

Tracking investment portfolio to figure which politician is corrupt..

January 28, 2016

Interesting piece of research. It says one could actually figure corrupt politicians by looking at their investment portfolio. Corrupt politicians usually have more riskier portfolio (have a higher share of equity). I had earlier pointed to another such research on Mumbai politicians as well.

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Does India need to no longer be an Ashokan republic, but a Chanakyan one?

January 27, 2016

We should really debate this question raised by Sanjeev Sanyal. It questions basic premise of idea of India since independence.

The author says we have adopted values of  Ashoka’s republic who actually saw disintegration of Maurya empire. Ideally, we should be following Chanakya’s ideals who shaped the Mauryan empire at the first place:

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How truly disruptive innovation can cause societal crises and pushback..

January 27, 2016

Ajit Balakrishnan writes on how we forget the broad reality when it comes to innovation. It is the impact on the so called incumbents who are suddenly found grasping for survival. And when the incumbents are a sizable lot, one should expect a pushback:

He picks this brutal case of medical innovation:

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Creation of Paris as a top world city..

January 27, 2016

A fascinating story of Paris transforming from being a squalor to the great city of today. Most top cities have a similar story which is quite remarkable. Just shows how certain humans shape all these great living places against all odds.

Paris owes its transformation to a George-Eugène Haussmann:

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India and liberalisation : There was a 1966 before a 1991

January 25, 2016

There is always this debate in Indian economy academia that when did India start to liberalise its economy. Most obvious answer is 1991. But some people say – it was  with 1985 VP Singh budget, 1980 India Gandhi started tweaking some ideas, 1977 emergency, 1966 Shastri was receptive to reforms but for his untimely death and so on. So for all you know, 1991 was just a fire which caught on but was ignited much earlier.

Ankit Mital makes a case for 1966 in this article. He is apparently writing a book on 1991 story. :

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To tax or not to tax Bollywood movies…

January 25, 2016

An interesting story in Indian Express on UP State Government taxing Bollywood movies.

The states govt impose their own tax rates on movis tickets making them exorbitant. You only get to know the difference once you buy a ticket for a tax free movie. The govts usually free a moveie from taxes if it has some social message and so on. The govt loses revenues from such movies but it helps boost the sale of tickets for that movie.

It has so happened that UP State Govt has exempted quite a few movies in recent past. This has led to loss in tax revenue.  Moreover, there is no consistent policy of tax exemption from movies:

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Why not include behavioal approaches in Indian policymaking?

January 25, 2016

One does not know why really.

Debhashish Basu of Moneylife says by nature people are lazy, selfish & vain. We should be aware of these traits while making policy.

famously said: “All writers are vain, selfish and lazy”. He could have said this for almost the entire human race. There are many altruistic people, and most of us sometimes do not fit this characterisation, but these are undoubtedly our default traits. Anybody who tries to persuade the public to behave in a certain manner must accept them or risk failure; or at the very least, be prepared for a long hard slog. The has understood this very well and created billion-dollar businesses that millions of people use daily for a cab ride (Uber), purchases (Amazon), information (Google) or other social purposes (Facebook, Twitter). Can intelligent policymakers and well-meaning politicians, who try to persuade millions to either clean up garbage, follow traffic rules, stop taking or giving bribes, learn from them? Lets first look at these characteristics.

As we tend to copy whatever west does in economic policies, there is an incentive to copy. British are already doing it:

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Driving a 1914 Ford Model T today..

January 22, 2016

Hannah Elliott writes on her experiences of driving the iconic brand. The one that started all this car business.

Unfortunately, her experience was not a great one:

You have to get into and out of the car from the passenger-side door, since the driver door is blocked by the meter-long emergency brake. There is no power steering or braking. The horn is a literal brass horn. There are no actual sides to the thing—later models had curtains that would unfurl to help keep in warmth, but otherwise these were open-air beasts. And the 10-gallon fuel tank lacks a gauge, so you must guess how far you’ve gone and assume you get about 20 miles to the gallon. (It lacks any gauges, for that matter.)

But if you find such quirks adorable rather than annoying, you’re in luck. Despite the fact that this car is 100 years old, it’s not especially rare. You should be able to find one on EBay or Craigslist for less than $10,000.

It’s not the easiest car I’ve driven, nor the most fun—and it’s definitely more twee than stylish. But it is a tangible piece of history, one of the few icons you can still touch and operate and say, without a doubt, that this one changed the world. If you get the chance to drive one, take it. 

Hmm..

Does the role of the Rajya Sabha in the legislative process require reform?

January 22, 2016

This is a superbly argued post by Suyash Rai of NIPFP. I hardly know anything about the subject so no comments on the author’s suggestions on reforming the Rajya Sabha. What is interesting is the way Suyash writes about various aspects of Rajya Sabha working and its role in Indian polity.

There is a lot of criticism on Rajya Sabha’s role in thwarting progress. Author says the purpose of Rajya Sabha was to slower things, so it is just doing its role:

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Don’t question Indian macro data, get the analysis right..

January 22, 2016

India’s chief statistician TCA Anant says this in this interview. I would think both data and analysis are connected. Poor data surely leads to poor or distorted analysis. Though, this does not mean good data always leads to good analysis.

He says we need to look beyond monthly volatility and look at compsition of data:

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A good president makes history, a bad president changes history books..

January 21, 2016

Well, how this thing of either making history or changing history is so common across countries. In a country like India we are continuously debating over our history and what should be taught and not taught. Most Indian politicians draw some parallels or justify their actions based on some historical construct. This makes history a fairly dangerous subject as well.

Anam Naqvi has this interesting post on South Korean policy deciding on what to be taught in  their history:

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The dark side of Uber and other such app based travel companies

January 21, 2016

Prof Benjamin Edelman discusses the other side of Uber and such companies.  There always are ill effects especially of things that are too good to be true.

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What happens in an economy when banks close down?

January 21, 2016

Ben Norman and Peter Zimmerman have this fascinating post on financial history.

Greece banks closed last year and the post draws parallel from Irish example in 1970s. Now unlike Greece banks Ireland banks closed due to strikes. What happened was interesting:

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Govt of Karnataka enforces and withdraws luxury tax on ICUs..

January 20, 2016

Missed this bit. Coup,e of days ago, Karnataka Govt imposed luxury tax of 8% on ICUs. Now it seems the tax has been withdrawn amidst protest.

What brought the tax?

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