Archive for January 17th, 2017

How is it that CEOs of Indian Private banks don’t say anything different on any policy?

January 17, 2017

It is rare these times to read such an interview albeit of a former head of a bank.

There was a time when even banking heads appointed by the government had the courage to speak/criticise government and RBI decisions. You read banking histories of whichever bank and you come across quite a few of such stories of individuals standing up and expressing themselves even when appointed by government.

Now we have come to a time when even the heads of Private bank just agree whatever policy is made on banking. They all sing in similar tunes. See any budget or any monetary policy in last few years and you see most heads of private banks say the same thing. The same thing usually is:  It is a good budget/policy and in line with our expectations. And this is not seen just in this government but even previous governments as well.

They don’t realise by singing in a chorus they create more damage than good. By agreeing to whatever policies they may prevent immediate attention but create a long term damage.

Take the recent currency withdrawal case.

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Should Australia end its Federal State and become unitary state (like its colony England)?

January 17, 2017

As India moves towards GST which is seen as a decline of Federalism, in Australia talks are on removing Federalism altogether. This means the States in the country to be abolished and there will be just one central government.

Bede Harris of Prof of Law at Charles Sturt University writes on the issue:

Former prime minister Bob Hawke’s recent call for the state governments to be abolished is worthy of support.

Labor has historically been in favour of centralisation, while the Coalition has supported federalism. So, Hawke’s position is not surprising. But leaving aside party politics, there are good reasons why Australia should consider this change to its Constitution.

The reason Australia has a federal Constitution is a negative one. It was due to fear from the colonies of domination by each other or by the new national government.

Taken at its best, the adoption of federalism in preference to a unitary system was the necessary price of creating Australia as a nation. At its worst, it was a base compromise pandering to colonial jealousies, which now saddles Australia with an unnecessarily complex and expensive form of government.

Unlike in countries such as Nigeria, where federalism serves the purpose of providing for ethnic autonomy, Australian federalism solves no problem and confers no benefit.

The supposed major benefit of federalism is that it provides protection against tyranny by diffusing power. But federalism does not affect what governments can do to individuals, only which government may do them. Distributions of power are not as effective a protection of liberty as are restraints on power. Federalism cannot provide an effective limit to what the state and Commonwealth parliaments can in combination do to the individual. Only a Bill of Rights can do that.

So, Australia is left with nine governments and 15 legislative chambers for a population of 24 million. The costs of this are staggering. In 2002, the annual costs of federalism to the economy was estimated at A$40 billion – a figure that would be much higher today.

Hmm..

Further:

Making such a change would mean that, as in New Zealand and the UK, Australia would have a single (national) parliament with comprehensive lawmaking power. That parliament could delegate lawmaking authority to regions and/or local governments, in the same way as state parliaments currently delegate power to local authorities.

However, there would be no more disputes over which lawmaking power the national parliament had, and no doubt that national law overrode regional and local law. The legal system would be much simpler, and compliance costs to business and individuals radically reduced.

Australia would also have one department of education, one department of agriculture, one department of the environment and so on, instead of multiple agencies currently.

Disputes over shares of Commonwealth revenue allocated to the states is a constant feature of federal-state relations. All that would be a thing of the past. Expenditure could be determined according to the needs of people, irrespective of where they lived and without reference to artificial state boundaries.

The current focus on “reforming” the federation avoids the real issue: why have federalism at all? If we were writing a constitution from new, would we really recreate the current nine-government system? If the answer to that is “no”, there is a good reason to change it.

Interesting. Was not aware of this debate at all..

How culture shapes conversations about money, financial abuses and respectful relationships…

January 17, 2017

This is a part of economics/finance which is least studied but is important. Who controls financial purses (the male or female) in a household and why? Most of the time why is related to the cultural practices.

Prof Supriya Singh (Sociology in RMIT University) shares her recent research with a colleague on the topic. She looks at two cultures in Australia – Anglo Celtic and Indians:

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Should we replace money with guns/bullets?

January 17, 2017

Elaine’s Idle Mind blog has an interesting piece on history of currency in New England/Massachusetts.

The post says as money is nothing but an instrument of persuasion, what better than having guns to persuade :-). It further points how we actually had musket balls  a currency!: (more…)

Who compromised RBI autonomy more? UPA II or NDA II? Does it matter?

January 17, 2017

This blog has earlier posted on how most of economics advisory (should have added journalism as well) has become polarised and politicised. It is all about which political party one is siding with. Any article boils down to are you with the opposition or the ruling party?

One just came across this ET article which says critics of RBI losing autonomy have an axe to grind:

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Re-imagining St Thomas the Apostle’s epic backpacker adventure in the south India of 50-70 AD

January 17, 2017

Zac O’Yeah (a part-time travel writer and part-time detective novelist based in Bengaluru) has a superb piece in the Hindu Business Line. A kind of piece which tells you so much about economics and history than several books on the subject.

He travels through villages of Kerala to figure history of St Thomas travels:

I jump off the bus in the coastal Kerala town of Kodungallur. As far as I can make out I’m the only tourist here, which is a relief considering how Kerala tends to be overrun with backpackers and rich foreigners in search of ayurvedic rejuvenation. But I am soon to learn that thousands of years ago Kodungallur was as infested with foreigners as any beach resort is today.

Walking past the typical small-town businesses — laminators and pharmacies, a biriyani joint called City Restaurant, an Internet café offering ‘100% Job Oriented Computer Courses’, the Sitara Beauty Collection that sells gift items, the Cranganore Muziris Bakery, and showrooms for Sansui and Sony home entertainment products — I sense an overall vibe of comfort. A neat little town.

It’s a little hard to believe, but this humble municipality was once a royal capital of the mighty Chera kings, who were very welcoming to people from the West. Even though the Chera dynasty lent their name to the modern State, Kerala, there are no remains of their palace except a jungly compound known as Cheraman Parambu to the east of town. A rickshaw driver offers to take me there and the place is so tucked away that he has to stop and ask for directions time and again.

I’ve read archaeological descriptions of the spacious palaces for emperors, mansions for their ministers, shrines for their gods, and halls and theatres. Now, nothing is left. I take a walk and poke around a bit when I hear children scream at me. They make strange, swaying gestures with their hands. As I listen carefully, I make out what they’re shouting:

‘King Cobra! Watch out! King Cobra!’

Scrambling off and stage-diving into the waiting rickshaw, I consider the astonishing fact (once I’ve caught my breath, that is) that there is still a ‘king’ living in the compound.

Having paid my respects to the kings of yore, I move on to explore other sights: a mosque, a temple and a church. These turn out to be pretty modern structures, but their traditions go way back. For example, the small Cheraman Juma Masjid is said to have been founded during the prophet’s lifetime, making it one of the few mosques in the world with such an ancient pedigree. It is believed to have been converted from an abandoned Buddhist monastery gifted by a Chera king to Arab traders, possibly in return for helping make his port so prosperous. Therefore, the Cheraman mosque was named to honour the king. By 629 AD, when the original mosque was inaugurated, this had been a vital harbour for hundreds of years.

A longish piece but worth it.

Kerala and its amazing history barely finds any mention in textbooks on either economic or political history. But this is how it should start especially in economics. There is so much to learn and figure from this piece of land which was just so productive so long ago…


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