Lessons from the Mob

5 days into Anna Hazare’s fast and you could surely tell that something was abuzz. You could almost sense the fever wherever you went. Crowds congregating in corners, some distributing pamphlets while others just euphoric about being part of something historic. Some IT parks even witnessed a few of their employees taking out solidarity walks.

In the din of this unspoken frustration, age-old grievances were being raised by various strata of society concerning their plights which we are all too familiar with. It has been said that this agitation has brought the middle class to the fore. However a small promenade into the masses in Ramlila would shatter this premise immediately. The single fact that brought all classes of society together this time is an endemic problem that has plagued our nation since the time of its inception. This in my opinion was the first and most important message that resonated with one voice to the Government.

In the battle that soon ensued, both Civil Society and the Political Class (as being seen elsewhere in the world) took their own extreme positions, waiting for each other to budge. The trump card that Civil Society had was an elderly man on a hunger fast, and that put the ball directly into parliament!! The Government had to budge for this was their only way out of the predicament, they maybe smarter though the next time someone pulls a “fast” on them. There were cries from various quarters that this my-way-or-the-highway approach does not really assist in rapprochement. Nevertheless, one just needs to go through the draft of the Lokpal Bill to notice the glaring omissions it has. Exclusion of almost all the MLA’s and MP’s (the sector which accounts for much of the corruption) from the reach of the bill and even more ridiculously, accountability of the Lokpal to parliament!

Anna’s Camp on the other hand had a very idealistic view of what the Bill should look like, as the Aruna camp would soon point out. The formation of such a body would the least be gargantuan and not without its own share of difficulties.  However, Anna’s camp did not back down and what seemed like a deadlock appeared unavoidable. Although it appeared to the public at large that a middle ground was necessary, all across the world such posturing is normally seen to be part of the culture of deal-mongering. Had Anna’s team bowed out gracefully in the early days and agreed to the Governments demands, I would be surprised if the government would have even tabled the Bill in this session!!      

The key point of this agitation was the Push for the Jan Lokpal bill to be passed before a date that was soon approaching. Civil Activists should have known that Parliamentarians do not make decisions as quickly as Corporates do despite the abundance of relevant data that they possess. Maybe that was one of the other indirect messages that Civil Activists/society was trying to send to the Government. “We acknowledge that your Parliamentarian Processes make take time and that you would need to include everyone’s opinion, but you would do so with a sense of urgency and not at your own leisurely pace”.

Days into the Crisis, Aruna Roy released her version of the Lokpal Bill. To the surprise of everyone, civil society was civil enough to put their differences aside and push for a resolution. Surprisingly though, politicians were unable to play Civil groups against each other (like they do to perfection sometimes) and instead had to bear the brunt of Civil Society cheered on by the silent majority tuned in from their living rooms. This was the third lesson that the government needed to acknowledge. “The extent of corruption had reached such a zenith that almost any party/NGO or living thing could hop on to a bandwagon carrying the tri-color and take potshots at a government whose efforts at tackling corruption had till date come to naught”.  

The Fast has now ended, and all the supporters have gone home. Rather than moving forward, politicians it seems are doing what they do the best “discussing how they let the Anna Hazare debacle get totally out of control”. Civil Groups are watching keenly as the government tiptoes its way in parliament and the crowd is now on a brief vacation.

First posted on http://indiapoliticalblog.com/2011/09/05/lessons-from-the-unheard-the-anna-hazare-fast-and-campaign/

The Clueless Commander

President Barack Obama has a tough job on his hands!! This is probably one of the most used cliché’s across the media for the past 2 years or so. His toughest job is actually not fixing the economy. At least not yet, for before he attempts to do that, he needs to surmount an even bigger obstacle called “Economic Theory“. If history has taught us anything, it is that this is probably unending!!

Since the dawn of his presidency he has been thrust into the middle of the age old debate of Classical Economics vs. Keynesian Economics. Of course this debate has raged over time and played itself out in different countries with different governments and under different circumstances.

John Maynard Keynes was in fact credited with rocking the boat of the neo-classists when he first arrived on the scene in the early days of the great depression (1929 – 1940) with his seemingly hair brained idea of deficit spending. It was then; out of sheer desperation that President Franklin Roosevelt launched his “New Deal“. This gush of government money that was hurtling towards a starved economy also came with a lot of legislation to prevent the occurred from re-occurring. It is however noteworthy to mention that this new deal did spawn a recovery (25% unemployment down to 15%). However, once the economy seemed steady in a comfort zone, President Roosevelt raised taxes in order to balance the budget. No sooner had he done that did the economy (almost as if it was on pills) went into a tizzy and almost collapsed yet again.

Through the ages we have had different Presidencies borrowing more than they can afford, only to leave it to future generations to pay back. In the 80’s, President Ronald Reagan whose ideology of Reaganomics could almost resonate with a majority of Republicans in fact turned the US from being the world’s largest creditor to the world’s largest debtor nation in his tenure. His policies of de-regulation, cutting taxes across the board and controlled government spending, meant that the US had to borrow to finance its military cold war spending.

Of course, with unemployment well below the 10% mark, no one was ready to blow the whistle on what seemed to be a bad precedent being set. Successive governments after that had no qualms about deficit spending since there were always national interests at stake (wars in Iraq, AfPak). There was a brief period in between when President Bill Clinton balanced the Budget with the help of Congress

What followed soon after was history in the making. What began with an unnecessary war acted upon unilaterally led to a burgeoning deficit, and when Lehman Brothers collapsed the entire nation went into shock. An already swollen deficit had to further carry the weight of the TARP so that the system would not shut down. Since then, as far as the deficit goes, we really have not looked back.

However, as they always say “this time it’s different”, this time it truely is different. Never before has any American President ever had to preside over a sovereign default for reasons that cannot entirely be attributed to him.

Of course, being the incumbent for 3 years now, there is a limit to the extent that one can indiscriminately use the line “these problems were inherited from the previous administration” though by and large, many analysts acknowledge this fact. From the Roosevelt days of the Great Depression to the promises of Universal Obamacare, opinions continue to pour in and newer angles of thought keep curling out of everywhere.  

Classical economists would point out to the thriving America that led the world in the last half century or so was made possible by the absence of strangling government regulation. Needless to say, this same unchecked profligate capitalism collapsed on its own greed and had to rely on a government bailout instead.

Now a few years down the line to what seemed like only yesterday, the Tea Party voices have risen from the dust. Their absolute Classical doctrine can be heard by the sound bytes of their torchbearers. Michelle Bachmann in her recent “let the nation default” statement to the press caused a lot of annoyance among her republican candidates, keen to distance themselves from her.

One can clearly see the dangerous path that the extreme right is treading on these days as the republican Right makes a return to extreme neo-classicalism. The Liberals on the other hand have headed for their safe havens in the Unions trying as hard as they can to make their case for controlled spending.

The Commander in Chief looks helplessly on as the battle between these 2 economic Ideas plays itself out relentlessly on Prime Time, Talk Shows, Rallies and now maybe even household dinner tables. The Great Depression cost the incumbent President, (Prez. Herbert Hoover) his job, with almost a year to go .. history may repeat itself.

First posted on: http://technorati.com/politics/article/the-clueless-commander/

The Age of Restlessness

The Cambridge Dictionary defines restlessness as the inability to stay still or to be quiet and calm, because one is either worried or bored. This definition by and large sums up the mood of the empowered electorate when viewed against the backdrop of the pandemonium to which they have been subjecting  metropolises across the world .

The time now is 6 PM GMT. As dusk deepens in Britain, the nation is still limping back to normalcy, trying to come to terms with the some of the worst riots ever seen in this country. Those of us who are privileged to live through this period, will balk at not only the profiles of these rioters but also the absurd rationale which they had for rioting. What is more worrying about this entire episode was that an overwhelming majority of the rioters were youth, restless youth.

Just six months ago, the Arab Spring arrived most unexpectedly. The land of the Pharaohs, Egypt, was not exactly where the revolution began, but it was where it attained critical mass. The intense cries of indignation from its citizens at Tahrir Square, now gone down in history, eventually pushed the government over the edge. At the time of the protests, unemployment in Egypt was at 11.9 percent, with youth unemployment figures at an all-time high of 25 percent !! 25 percent of unemployed restless youth cannot be permanently kept on the hookah or playing soccer.

The Egyptian revolution set the stage for the other neighborhood revolutions to come. Since February though, a whole lot of water has flowed under the bridge and in some cases flooded it too. Yemen, Syria and Libya also routed for change and their restless children spilled out onto the streets carrying anti-incumbent placards demanding change. The glimmer of hope that they had seen occur in a country that was ruled for 30 years by a despot and his family just seemed to ignite a fire in their bellies and a belief that nothing is impossible.

Syria though, is quite different from Egypt. Its problems are more concerned with the absence of political freedoms, such as freedom of the press, freedom of expression, etc., combined with the tyrannical rule of the Baath party and its leaders since 1963. Extortion, extra-judicial killings and the likes of them are some of the crimes of which the administration is guilty. In fact, one could note the impunity with which President Bashar used tanks and marshalled his troops to dispose of protesters. Syria’s youth nevertheless, are restless for change and they march on, despite the odds stacked heavily against them.

The breaking news on TV today is that of the rumors of Colonel Gadaffi’s disappearance and alleged departure from Libya. Rebel troops are said to be in control of most of Tripoli. This would mean that after months of casualties on both sides of the battlefield, another dictator, at least for now, seems to have bowed out (not confirmed yet). This outcome, despite the odds of the trigger-happy and brutal rampaging army of Gadafi, would only serve to embolden the Syrian protesters even more.

Halfway across the world, in the world’s largest democracy, India, another kind of movement is gathering momentum. If the events that have unfolded since January this year have anything to tell us, it is probably that corruption or the continuous lust for the spoils of office” is an inherent part of almost any system. In India, it took the shape of a 73 year old national award winner cum civil activist, who is now on an indefinite hunger strike unless his version of an anti-corruption piece of legislation is passed in parliament as law!!

His audacity in expecting the impossible can be attributed to the massive support that he has been getting from nearly all strata of society. At last count, close to 60,000 people had gathered at Ram Lila grounds in Delhi, where his fast is in progress. When questioned, most of his supporters echoed the fact that they were so sick and tired of corruption and that unless an ultimatum is presented to the government, they won’t act

Interestingly, hoards of restless supporters (who number in the thousands) can be seen sloganeering in cities all across the country, with only one man’s name on their lips: Anna Hazare; enough to give any government sleepless nights. 

What started of as a promising Arab Spring has now led to an awakening of the restless masses. The laissez-faire approach once prevalent almost seems to have disappeared overnight, giving way to a group of citizens who are demanding what should already have been theirs. Whether it’s from the tyrannically ruled states or the democratic ones, their voices are clear .. we are in the age of restlessness.

Article first published as The Age of Restlessness on Blogcritics.

There has Never Been a Better Time

… to be an Economist .. of course. This is apart from the fact that a recent study conducted by the University of Arkansas showed that the job market for economists in Developed Countries has been on the wane. These statistics can however afford to be ignored since related research also does show that jobs for Economists in Developing Countries are on the rise.

Whether its the media savvy Ben Bernanke (Federal Reserve Chairman), the inconspicuous Jean Claude Trichet (ECB Chairman) or even the bespectacled Dr. Subba Rao (Reserve Bank of India Chairman), the press seem to be hounding their every turn each time a new statistic is broadcasted.

From the Private Sector, you have the globally renowned experts such as Nouriel Roubini who shot to fame after he predicted the 2008 crash. Marc Faber with his Doom and Gloom report follows closely behind. Mark Mobius, (Fund Manager at Franklin Templeton Investments) is another renowned figure who specialized more on Emerging markets. Then of course you have a whole host of Economists who work at various Financial Institutions across the globe who also get their share of screen time every time there is a rally.

An interesting point to note is in almost all of the recent crises till date, there were forewarnings issued by noted economists. In 1994, Paul Krugman published an article about the “Asian Economic Miracle” thereby predicting the South East Asian crisis 2 years before it would happen. Mark Mobius was one of the first in line to predict the Dot Com crash of 2001. Most recently however, it could so easily have been Nouriel Roubini who should have been credited for calling out the 2008 Financial Meltdown, except for the fact that there is now a queue of such candidates with similar claims.

Given the highly coupled age that we live in, the equations can really go haywire. A live example of this can be seen by how helpless Emerging Markets are in reining in inflation. When prices of global commodities can indirectly affect inflation, interest rates and consumption power of global citizens, the usual weaponry that these Central Bank Governors could wield to control their systems are rendered ineffective. Moreover, Central Bank Governors around the world are slowly discovering that Economics in a Free Globalized Market is a lot more unpredictable than how they imagined it to be.

Between periods of meltdown, or boom and bust cycles, economists always seem to take their place in the background, their opinion sought after now and then or when matters reach the hilt. Till then however, the spotlight would turn to Industry leaders such as Steve Jobs, Bill Gates, Jack Welch, Carlos Slim and many of the other Industrialists for their soundbytes. Someone once said, when Economists become highly sought after and gain in pre-eminence, then markets, nations and netizens have a lot to worry about.

First Published at Technorati : http://technorati.com/politics/article/there-has-never-been-a-better/

The Tea Party and Fiscal Insanity

Riots never seem to set in Britain these days. Just 5 days into the riots and the police are still trying desperately to put together a profile of the rioters, one that would allow them to pin the blame squarely at the feet of unruly mobsters.

The truth however may be far from the reality we see. As the picture slowly begins to emerge, we see not only mobsters but also a diverse range of educated people who’s livelihoods have been deprived of their due due to the stiff austerity measures that have been put in place as recently as last October to curb a runaway deficit.

What started off as an unrelated trickle of protests in autumn this year soon gathered force midstream and has now burst into a deluge downtown that has virtually shut down all major cities and prevented any semblance of normalcy from returning.

It is very tempting to compare the stark differences in the approaches taken to combat the crisis by the 2 colonial allies. On one hand, Britain has taken the neoclassical approach to cut spending by £80 Billion in order to prevent itself from going off the cliff. These cuts have in fact been quite painful and have been in areas that have hurt the middle class considerably such as tuition fees, armed forces, pension cuts, etc ..

A recent discussion on BBC on the riots were cautious enough to make a clear distinction between the 2011 riots this month versus the 2011 Budget Cuts Protests in March this year. However it would be rather difficult to look at the unfolding crisis in isolation and ignore the buildup to it.

The other superpower has to live with a tea-stained attire henceforth in government!! Much to the dislike of either party (Republicans or Democrats) the Tea party’s business of holding Congress hostage seems to have worked and they now have pretty much everyone else on the back-foot.

Before they go about celebrating their victory on how they pushed some element of fiscal sanity down Congressional throats, they should draw lessons from their other colonial cousin – Britain. A recent study by the Pew Group showed that the median wealth of Black families has dwindled to a large factor in America over time. Worse still, the middle class in America have seen the value of their homes fall and are still coming to terms with the new reality.

In such a volatile environment, Entitlement Cuts should be done with much caution and great deliberation. It will not be a surprise to find that the Political Middle has a consensus that both sides need to tilt inwards from their hard-line positions, whether it be making cuts to the entitlement programs or raising taxes on the super rich.

This is how politics is done and if extreme strands of eccentricity are forced on a nation in the name of fiscal sanity, then the likes of what you see in Britain (God forbid) may start to rear their ugly head in America. Then we may really have a situation on everyone’s hand.