Month: October 2008

I have been asked to write my opinion on Mr Raj Thackeray and his party, MNS. He is the nephew of Mr Bal Thackeray of the Shiv Sena and has been in the news of late because his followers have been attacking migrant labor from northern India to Mumbai.
Continue reading “Mr Raj Thackeray”

Every now and then I get to read stuff about the huge on-going economic crisis. But there is no economic crisis going on. It’s a financial crisis, not an economic crisis. I think it is important to make that distinction. The financial system is part of the economic system and it is an important part. But the two systems are not identical and cannot be referred to interchangeably.

Let me see if I can get this right. Let’s take the failure of a financial institution or a stock market crash. When things like those happen, the immediate effect is only on the financial and capital markets, not the real economy. What’s the real economy? The economy that you can “kick.” It’s buildings, and factories, and farms, and roads, and ports, and mines, and people, and stocks of goods, and so on. That’s real. The rest of the stuff is accounting. Money is part of the economy but it is not part of the real economy.

When the stock market crashes or some mortgage lender goes bankrupt, nothing in the real economy is lost. Houses suddenly don’t de-materialize. Factories whose ownership shares were being traded at the stock market do not suddenly rust into a heap of twisted iron and steel. Everything in the real world remains the same. What does happen is a change in the distribution of assets held by different people. The total amount of assets does not change; only the distribution changes.

Can a financial crisis have an effect on the real economy? Yes, of course. If an important subsystem of a complex system breaks, it is bound to affect the system. There are linkages between the two. But it takes time for the damage to show up. How much damage it will do depends on how the financial crisis is handled.

So how should it be handled? First of all, since the problem is financial, the solution will involve money. How and where to put that money is of course the 64 billion dollar question. Second, consumer confidence has to be regained. This requires leadership and wisdom, which is of course much harder to come by than money.

Let’s pray.

It is hard to point to a more illuminating example of a dangerous combination of stupidity and greed (even more than the on-going global financial meltdown) than an email that landed in my inbox this morning. The subject line was “If any body delete Shiridi Sai Baba message without darshan & forwa” and it was forwarded by one Mr K R Tilak. Evidently I was the lucky recipient after a few dozen forwards, and all the forwarding information was intact. The content appeared after pages and pages of long lists of email addresses to which the message had been forwarded. The content was brief: Continue reading “A Potent Combination of Stupidity and Greed”

Finally

India is catching up with the USSR (which does not actually exist anymore) of nearly 50 years ago. The Soviet lunar space mission got off the ground with Luna 1 in Jan 1959. Two days ago India gave a fitting reply to it by launching Chandrayaan-I on its way to the moon. Aside from crash-landing on the moon a probe with the Indian flag in it, Chandrayaan-I will map the surface of the moon for two years. It brings to mind the US Lunar Orbiter Program of 1966-7 which photographed the surface of the moon.
Continue reading “India’s Moon Probe”

Among recent political leaders, Mandela stands out. You may not agree with him on all matters, but one has to respect what he achieved. Here’s an article in Time magazine which I thought was worth reading and reflecting upon.