Monday, December 28, 2009

Lucky Obama

Indeed Obama Administration is lucky that on the Detroit bound plane it was an inept terrorist who tried to blow the plan. The plan flopped, fortunately no one died and essentially Obama Administration escaped.

However, in future the Administration is unlikely to be so lucky since there are no early signs that the Administration is eager to address the two critical failures:
- failure to block boarding of the suspect after knowing few details about him (UK had banned the suspect from entering) and
- failure to co-ordinate appropriate security check practices with foreign airports for USA bound flights (not that American airports have any great system of security checks).

With the ham handed handling of this whole affair by Homeland Security Secretary Janet Napolitano (first she claimed that the system worked and then admitted the failure); prospectus are not good here. So far observation of most Americans is she does not have a clue that it is actually her responsibility to get the act together.

Secretary of State Hillary Clinton unfortunately is also going to have tasks drawn on her hands - why did State Department fail in blocking visa for the suspect? It is very, very difficult to imagine someone who is dangerous to UK will not be dangerous to USA. This begs a question about the basic co-ordination with many other nations (at least with friendly nations like UK) in this matter. As news reports are, still the basic matching name of a terror suspect with the prepared list is not complete with all airlines, not it is accurate enough.

Unless President Obama finds some one better than the current Homeland Security Secretary who is more skillful at articulation as well, chances are that the Administration will have to be apologetic in future too. That Department has failed to alert Americans about the 'privacy compromises' which Americans have to do in order to minimize the risk.

Unfortunately next time, lives may not be spared and for sure that will be a political challenge (for right reasons) hard to contain for President Obama.

Sunday, December 20, 2009

Health Care Reform

With proposed Senate passage on December 24, 09; legislative process for Health Care Reform (HCR) is in the final inning. After that it will be Conference and then the bill will be on President's table to sign into the law of the land.

There have been many types of reporting about this year long saga - fiscal conservatives fighting for tight cost controls (Fred Hiatt of WaPo, Megan McArdlee of The Atlantic ); wonkish coverage by bloggers like Ezra Klein of WaPo, Chait of TNR and Karen Tumulty of Time; liberal coverage by NYT; Netroot Progressive / Lefty coverage by Daily Kos and Huffington Post and finally of course the GOP Media (Fox, Rush, NRO, etc.). Each of these media outlets and interest groups are finally passing their verdict on the final passage of this bill.

Left folks like Daily Kos and Huffington Post are withdrawing their support to the bill which they extended so far. In an anger directed towards to President Obama; these guys are opposing the bill (exemplified by the celebrated Op-Ed of Howard Dean) because it does not contain Public Option (PO). CBO has confirmed that PO would not have solved American Health Care issues given the limited play accorded to it - insurance for folks who are not covered at work. President Obama was right to be wary of this route from start and it is absolutely foolish and wrong to oppose this bill for the lack of PO. Further, it is wrong for Daily Kos os to take the high ground of claiming that Democrats who supported Iraq War are supporting this bill. That is BS. First of all, there is no logical reasoning to equate politics of Bush Iraq War with a domestic issue like HCR. Next, I opposed Bush's Iraq War from the start and for sure do not oppose HCR for the reasons Daily Kos is opposing, lack of PO. So that line of argument is yet another 'crap' coming out of Lefty organizations.

Another serious line of attack from Left is as espoused by Greenwald and Matt Taibbi types - Obama and Congressional Democrats are sold out to protecting interests of Corporate America. When Howard Dean argues that the proposed HCR is sell out to Insurance companies, it is a variation of this type of attack. This line of argument is bit sophisticated than the standard Lefty argument of 'lack of PO'. To be sure Daily Kos continues to criticize that the bill is way to easy on Insurance companies as well. In general this criticism is more valid regarding 'pro Banker' policy stance of this Administration and Congress. White House and Congress have been far more lenient towards Corporate Interests of Wall Street Bankers than players in Health Care Industry. Deals with Big Pharma companies (which also prohibit cheaper drug imports) and big hospitals (many of the strict cost control measures are not applicable to these big hospitals); do reflect the proclivity of this Administration in being soft with Corporate America. But without those buy-ins from Big Pharma and Hospitals, there would not have been backing of those industries to the HCR so far. Otherwise with multi-million dollar lobbying efforts and advertisements; HCR would have been derailed long back.

As President Obama points out, Howard Dean is wrong in saying that the bill is soft on Insurance companies. Substantial constraints on their existing industrial practices are proposed in these bills while the market is expanded by pulling in 30 million new patients. Further, in any case, as Ezra Klein has effectively argued, the real problem with American Health System is underlying runway costs and Insurance companies are just one bit upper layer on those provider costs. The fundamental mistakes done by Howard Deans and Progressives on Left are:
- to brow beat Insurance companies as if they are the ones who set the price (which is completely dictated by providers on which Insurance also have much less control in many cases to negotiate reasonable rates) and
- then to erroneously argue that PO is the answer to control the health care costs (which it cannot be due the huge % of population covered by employer provided care who will be outside of PO).

Progressives also forget that the mandate of 2008 election was 'for improving Health Care System' and was not for 'bringing Single Player System'; so none of these options like Medicare buy-in or so are relevant.

But it is not only Progressives or Lefty who are screwed up here. There has never been a consistent and logical argument in opposing HCR by Conservatives or GOP. They all have reduced to the pathetic levels of Sarah Palin and hence not worth to even bother about their criticism. Of course, late in the inning GOP does not have to undertake any political opposition when Howard Dean, Daily Kos, Huffington Post and MoveOn Org are doing their job so effectively and with aplomb! The Progressive Netroots are really running the true Opposition to Obama.

This leaves the group of Centrist or Fiscal Hawks or at times Budget Vigilantes (like our Bond Vigilantes in financial market). Fred Hiatt of WaPo and Megan McArdlee at The Atlantic have been vociferously opposing this bill for its lot weaker cost control provisions. But today WaPo Editorial comes with conditional, guarded endorsement of the bill. Essentially the editorial argues that the bill at least tries to put some cost controls where there are none today and it is worthwhile to grant this opportunity to the young Administration of President Obama. That is right and a worthwhile endeavor. However, one fact of the proposed HCR is certain - costs to government are increasing and it is an entitlement expansion. No matter what such fiscal expansion is going to happen. The bill is paying that expansion by proposed cost control measures and argument is those are weaker.

It is the question of what is worse - Fed budget busting by the existing runway costs because there are no effective cost controls at present (the so called status quo option) or increased risk to Fed budget by effective but weaker cost controls while cost / entitlement expansion is for sure (proposed HCR).

Megan McArdlee says the second choice is the worse and hence her opposition to the bill. I see lot of merit in that argument because as my earlier blog post shows, there are still many more loop holes in the proposed HCR from cost containment point of view. No matter how much scolding OMB chief Peter Orzsag does on Media (his famous rip of WSJ Editorial comes to mind), this bill of 2000 pages is full of 'land mines' where proposed cost control measures are going to blow. I am dumb, but even I slow learner like me can see how Democrats in Congress have stacked up the politics of this bill:
- first Senate Finance Committee proposes what is the high water mark of fiscal prudence,
- then full Senate dilutes that further which is what Sen. Reid has done (I believe single handedly Sen. Reid has done more damage, chaos and mess of this whole process than anyone else) and
- then finally when the bill is merged with House bill in Conference; it gets more near to the rank fiscal insanity of House Members.
No wonder with process like that McArdlees of the world see much less merit in supporting this bill.

Given all these different point of view, the persuasion of Ezra Klein and guarded endorsement of WaPo Editorial, the Editorial which has been quite vigilant so far; I feel more towards Left of Megan but not up to the point of backing this bill full heartedly . This is for the reason that every government guaranteed entitlement commitment is always fulfilled (that is what electoral democracies are for) but cost control measures are always 'iffy'.

May be as WaPo Editorial points, with every passing day as our budget crisis starts tightening up around America's financial neck; the political pressure to attack costs will keep on increasing and may be that will make the Congress eventually address underlying problems of HCR . However, one wonders between now and then whether the price will be as steep as like what America is paying now for the mistakes of Bush starting the Iraq war (so many lives and Trillions of Dollars?). I hope it is not.

Saturday, December 19, 2009

HCR - Cost Control Holes Remain

CBO report is out handing the necessary victory to Sen. Reid to close the Senate passage by Dec 24. However, browsing through the report it is clear that Sen. Reid would have retained all the holes which would not address the Cost Control Measures effectively. One specific hole is how Medicare Costs are controlled. Here is what the report has to say in that regard:

"The legislation also would establish an Independent Payment Advisory Board, which would be required, under certain circumstances, to recommend changes to the Medicare program to limit the rate of growth in that program’s spending. Those recommendations would go into effect automatically unless blocked by subsequent legislative action. Such recommendations would be required if the Chief Actuary for the Medicare program projected that the program’s spending per beneficiary would grow more rapidly than a measure of inflation (the average of the growth rates of the consumer price index for medical services and the overall index for all urban consumers). The provision would place a number of limitations on the actions available to the board, including a prohibition against modifying eligibility or benefits, so its recommendations probably would focus on:
• Reductions in subsidies for non-Medicare benefits offered by Medicare Advantage plans; and
• Changes to payment rates or methodologies for services furnished in the fee-forservice sector by providers other than hospitals, physicians, hospices, and suppliers of durable medical equipment that is offered through competitive bidding."

What this means is the Board would not recommend changes in lot many cases as Medicare Expenses would not increase faster than 'average of consumer price index of medical services and general CPI growth'. I believe originally it was only 'CPI of medical services' which might have been improved further to include average with general CPI as well. But the most desired proposition is it should be only 'general CPI'. This is because general growth rates are highest for over all Medical Services (say 10%), then for Medicare (say at 5%) and then for general CPI (say at 3%) in decreasing order. To bend the curve means to bring the Medicare growth rates more aligned to general CPI. There is no reason to have any correlation with growth of Medical Services overall. In this particular example it is not clear whether Lieberman-Rockefeller amendment in this regard is accepted.

This is just one example what one blogger can dig into. For sure, more such 'land mines' are planted all over the 2000 pages of this bill. Now that Nebraska Sentor Nelson is on board, it is very very unlikely Sen. Reid would make any changes in the bill. This means the bill will be passed with all these 'land mines' and much weaker and ineffective Cost Controls. Mix this one with House Bill which has almost 'no cost controls' and general thinking is Conference Bill will be more near to House Bill than Senate version.

All this means, despite all the scolding of Media by Peter Orszag; White House is going to give far more importance to passage of the bill than having right cost control measures. This is bad and it means essentially White House and President Obama are not sticking to their words of 'strict cost control' measures. People are tired of telling Congress to be prudent here. Democrats in Congress and Senator Reid in particular are 'shameless' and appear to have decided to pass a bill with no regards to 'cost control measures'. Tragedy is we hoped President Obama will be vigilant in this regard, but all signs point that he would let go this bill as is and will not bother 'watering down' of cost control measures which Congress is undertaking.

Avatar

B+

Clips

There seems to be 2 technologies at play - one which mixes facial expressions of actor actresses with digital figures and the other one is movie in 3D. Both technologies deliver on their hype and there James Cameron has lived up to his reputation. In no uncertain words one can say that this movie has revolutionized movie making and movie delivery.

Gholum character in Lord of the Rings was fabricated in a way where facial expressions, eye movements and bodily actions were all mixed with digital processing. But apart from that, this movie is the one where such 'digital character' technology has matured and has come off the age. Clearly this technology is not for James Cameron to monopolize. It is not known to be patented / proprietorially managed so as no one else can use it. That is not the case and hence others will consume this technology too. But Lucas Films in San Francisco has not come out with their version of such a technology; movie Star Trek did not have that. What this all means is Cameron and certain select studios in Hollywood will have an edge in making such movies going forward. It is also clear that not for very long we will see movie making with traditional casts only. That is the revolution Cameron has brought. It is a phenomenal achievement.

The second revolution is in 3D delivery. For so many times in last few decades Hollywood has tom tomed 3D technology that one is reluctant to believe the hype this time too. However, here it is for real. Again it is doubtful whether audience will enjoy any movies without this technology. There were previews of Disney's Alice in Wonderland and NASA's Hubble 3D movie as pre-movie entertainment and both were unbelievable. So going forward it will be very hard to accept any movie without such breathtaking delivery system. Again it was very visionary for Cameron to work hard to deliver Avatar as a 3D movie.

The question is then why B+ rating? Have you watched latest 'Star Trek' movie released in Summer of 2009? Cameron needs to understand the importance of 'script' in Science Fiction. Compare Avatar with Star Trek and one realizes how feeble the script of Avatar is. Again, what about 'District 9' - that script, plot and technicality of direction; all are miles ahead of Avatar.

Avatar's main plot of 'greedy and dumb' Corporate America is quite boring. Of course, when greed of Corporate America and million dollar bonuses of Bankers are well known and here to stay, it is not that the plot is not realistic. But where is the creativity in this plot and script? Though Cameron is Master Story Teller, he has based the story on number of well ingrained cultural artifacts / clutches and in that sense simply given up on the need to come up with any intriguing and original story. Ex Marine with legs lost, another retired Marine serving Corporate interests, young but dumb brash Corporate Chieftain caring for interests of share holders, European colonial style outpost exploiting indigenous people and their livelihood, a scientist with missionary zeal, allies coming together to resist human evil (WWII similarities?), air battles ending in one on one combat, etc.; all these are well worn subplot gimmicks which Cameron deploys so as probably he is free to concentrate on the technology. All that is depressing and nothing new there.

But not all things are old and there are few things which are indeed creative - Pandora, life on a moon instead of the main planet, that is dreamy but plausible. It is deeply romantic when Jupiter like Planet occupies the huge swath of Pandora sky. Another equally plausible idea is how reluctant Mother Nature, who only keeps balance of Life, comes to help when that Life itself is threatened by Humans. Bioluminous plants and exotic creatures of Pandora, whole of that imagination and imagery is exceptional; very fruitful result of decades of thinking by Cameron and worthy of hundreds of millions dollars poured over years. These are the reasons the movie is worth watching despite the weaker script. Though there is much less scope for traditional 'acting', actor Sam Worthington has rendered Jake Sully cutely. That is one bright spot too.

Cameron and 20th Century Fox will for sure make money, Billion Dollar or so in early months or at least in the first year. There is nothing to be taken aback by a Billion Dollar tag because you know Dollar is worthless and hence Billion Dollar is the minimum mark new Hollywood franchise has to make; especially when the production cost runs at $300 millions. Avatar as a new franchise will surely achieve that financial mark, setting the stage for a sequel. But looking at the early response and my anecdotal evidence, Avatar may not be that block bluster money spigot. When I watched the movie, there were still 5 to 10% seats empty on the first day. Industry reports also indicate the slow North American start, further hampered by winter storms and snow on East Coast. But may be world wide it will make lot of money, enough to sustain Cameron for follow on releases.

Wednesday, December 16, 2009

Fed Chairman Ben Bernanke

"It just seems unlikely that Time magazine will name any other person as the 'Person of the Year' than Ben Bernanke."

-- Blog post 'Bernanke' on 21st Century Politics, Monday, August 24, 2009.

So that is the case today. Time announced Bernanke as their Person of the Year 2009. In a way it was easy to see considering universally recognized deft handling of Great Recession by Fed.

However, America needs to understand that going forward there is only one task for Fed - unwinding of the liquidity and other measures put in motion to fight the recession. It will not be Fed which will provide the employment or expanded credit to businesses. It is going to be policies adopted by the Congress and pursued by this Administration which will have the direct impact. Bernanke effect will be muted in 2010 and beyond. The only relevance of Bernanke will be how systematic unwinding of the Fed liquidity takes place.

In any case, Bernanke's hands are full in fighting the Congress which has folks like Ron Paul who basically wants to destroy Fed and if not that then at least add the crippling audit of Fed's books. Law makers have a point since Fed, all said and done, does have more autonomy and freedom than a normal accountability what People would demand. Agreed that it is the same freedom and flexibility which precisely helped Bernanke in fighting the Great Recession; but that is also another name of 'getting away' with the neglect when Alan Greenspan essentially mismanaged American Economy and brought America and the Global Economy to the stand still. Congress is trying restitution of Fed sins before Bernanke, the sins to which even Bernanke was partially responsible. How to bring a sense to such Fed regulations and how to thread the needle; that is a tough problem which this blogger can not speculate. However, for good or bad Congress does not have that luxury and it will have to address it as a part of ongoing Financial Regulation Bills which are proceeding through the labyrinth of Congress. Hope is Congress gets it right in this delicate re-arrangement of Fed otherwise America is likely to miss competent masters like Bernanke.

Monday, December 14, 2009

Sen. Joe Lieberman

With one single Sunday Talk Show appearance Sen. Lieberman has raised a political storm. Looking at the fierce reactions from Ezra Klein, Matt Yeglesias, Daily Kos, Huffington Post and many other bastions of Liberal netroots as well as Ezra’s scuffle with WaPo establishment - editorial board member Chuck Lane; it is clear that this story has legs.

True, we are not talking here re-election of Lieberman since he is unlikely to seek that. There may not be obvious political ramifications of this, but sense is that this particular incident – wanton behavior by a Senator to kill Health Care Reform for the sake of it without any serious policy objections – will be remembered long and there will be consequences of it.

To start with it will not be simple for White House to say Sen. Reid to compromise with Sen. Lieberman after the strong reaction from the Liberal base. It is clear that there are no serious policy objections from Sen. Lieberman since he is all over policy map. As the viral video shows (Greg Sargent of The Plum Line); same Sen. Lieberman endorsed the particular policy he is opposing now – buy in Medicare for folks older than 55 years. If Sen. Lieberman opposed these policies, he should not have agreed to Sen. Reid in the first place for the Medicare buy-in.

Next, Democrats in Senate will be more inclined to accept compromise with Sen. Ben Nelson, Sen. Olympia Snowe than with Sen. Lieberman. This means either abortion amendment of Sen. Nelson is in or public option becomes a trigger as wanted by Sen. Snowe; or both.

Further, Dems will also evaluate the possibility of ‘reconciliation’ which White House does not favor since it will involve de-assembling of the whole bill into ‘passable components’ one at a time.

Finally, public pressure to consider ‘filibuster’ procedural reforms will keep on increasing. Not sure whether it will translate into any concrete change the way dysfunctional Senate works, but the chances of procedural reforms increase with such intransigent behavior by few Senators.

All in all this is a typical and clear demonstration of how American Senate is broken and petty politics by few Senators essentially destroys well being of all Americans.

Saturday, December 05, 2009

Pakistan - the war is coming home

The latest terrorist attack on a mosque in Rawalpindi kills at least 27 people of which 17 were children, mostly of Pakistani Military Servicemen. If ever any proof was needed that playing with snakes (terrorists) can eventually bite your own progeny, this is it.

These and other recent terror attacks on Pakistani Army should amply wake up General Kayani, PM Gilani, Nawaz Sharif and his brother who is Punjab CM so that finally they are ready to discard 'terrorism as the strategic weapon'. Pakistani Army and political establishment has reached a fulcrum now - either it rips all bad elements of her armed forces or finally concede 'space and initiative' to militants paving the way for destruction of Pakistan and establishment of fundamentalist states (yes multiple, Pakistan will no longer remain united in that eventuality).

With experts like Farid Zakaria pointing to real possibilities of Pakistan loosing control of nuclear weapons to terrorists; challenges in Pakistan are becoming grave by every passing day. If President Obama's new addition of troops to Afghan theater helps there, it will be a much needed help at a critical time. It is also heartening to read that President Obama and CIA want to increase the Predator attacks and now want to cover hitherto untouched Balochistan too. Pakistani establishment needs to realize that for the short term political comfort (because Pakistani population naturally dislikes Predator attacks completely); they cannot afford to be any less aggressive here. All means and weapons need to be used to finally cleanse these terrorists. Otherwise there will not be a nation called Pakistan.

Friday, December 04, 2009

Krugman Misleads

If you read Paul Krugman's latest NYT Op-Ed, you would be mistaken to think it is the Centrist Democrat who are the real problem especially when Krugman blesses the bill for it's cost control measures. But if you read the Time article which points out critical failures of the proposed bill on cost control account; you can clearly see Krugman is simple 'spinning' the bad bill in making.

That is sad. We need folks like Krugman continue to insist upon Congress to summon the courage in limiting the costs. Read the travesty of Medicare Commission and one realizes it is not the Centrist Democrats, but Sen. Reid who is the villain here. Unfortunately, for all the talk of toughness, Obama White House is letting Congress this bad bill.

Krugman on so many occasions compromises factual information to purport his ideological agenda. In that sense he is no different that ideologues on Right. In the end, folks like Krugman bring more damage to this country and it's good debate than being helpful. It is a disgrace and shame.

Monday, November 30, 2009

Obama's Afghan Response

It looks like after a review lasting for many months and 10 high level meetings, President Obama is likely to order around 30K new soldiers to the theater. The number is more than this blogger felt some time back - around 10K. But as everyone says, number is not the issue. The issue is what these soldiers would do.

The two best takes on this response are by - Fred Kaplan and Joe Klein. I agree with Klein who basically points the centrality of Pakistan to the whole affair of stabilizing Afghanistan. To repeat again, stabilizing Pakistan is the necessary condition for a peaceful Afghanistan and subsequent vanquishing of any terrorist threat emanating from that corner of the world. If President determines that 30K troops are needed to achieve this containment of Pakistan, then so be case; America needs to send that many troops. Erring on more number of soldiers is not bad either even if many Liberals want to point the cost factor and borrowed money.

The question is will this increase solve the Pakistan problem. Not really. What these increased troops would do is to help pacify Afghanistan so that trouble makers in Pakistan get lesser opportunities to create problems. Relatively peaceful Afghanistan, where General Petreous and General McChrystal have bought peace with less radical Talibans and few other Pashtun leaders, would allow America to continue to focus on Pakistan and let many policies to start working in Pakistan. The policies of America in question are those espoused by Hillary Clinton and Kerry-Lugar bills - the carrot and stick approach to align national interests of Pakistan away from expediency of using terrorism. Devolving the power of nuke buttons to Pakistani PM from Pakistani President is one right step in that direction. Calming down South Waziristan is another one. Getting China involved indirectly and getting their buy-ins is another one. All these measures will start helping more if Afghanistan is more peaceful and if 30K additional troops would help there, it is that much better.

Between Afghanistan and Pakistan, so many things are interlinked that it is hard to isolate which is the cause and which is the effect. So better is to locate things which are 'actionable' for America so by acting upon that you start the chain reaction of positive outcomes. Sending soldiers is relatively straight forward 'actionable' item though expensive (blood and dollars). Actionable items on Pakistan side are relatively tough. Hence, one has to support President Obama's policy of sending more troops now, even if it is reluctantly one does so.

Wednesday, November 25, 2009

Dubai Default?

As this NYT news shows, possibility of Dubai Default is no more a fiction but actual reality. It is true that Dubai provincial government is only asking for 6 month reprieve in debt repayment and Dubai government is no UAE sovereign government. It is not a sovereign default and Abu Dhabi, the governing entity of UAE is not involved. Rather Dubai default is happening because Abu Dhabi is refusing to back all sorts of crazy investments of Dubai at full tilt.

Nevertheless, defaults involving governments always start by 'stop payment for few months' and so on. Though payment restructuring request from Dubai has been expected for a while and in that sense this news is not a surprise; what this news proves is that all those conservative investment gurus who have been pounding the table for long might be correct. Unbridled growth financed by boat load of borrowed money, without channelling to right 'productive means'; on most occasions end bad. Dubai is no exception.

This means fears of sovereign defaults by Yen, Pound and Dollar are not totally misplaced. One only wishes this news does not give a 'fit' to global financial markets and push the fragile global recovery back into the dreaded 'double dip'. That is something to watch for this week among Asian Markets while Americans are taking the Thanksgiving off.

On a practical level, this development has yet another consequence too. Asian economies need to develop deep 'debt markets' to go away from the reliance on American debt market (and hence American / Fed debt). With Dubai fiasco, chances of 'deep non-American debt markets' get pushed aside. As a result over reliance on Fed and American Debt market continues and over dependence of the world on Dollar does not get stemmed. More pilling of American debt as a result hardly removes the fear of Dollar/ American Sovereign default.

We still don't get out of the hole in which we all are.

Sunday, November 15, 2009

Health Care Reform Non-sense

We get two reports, both by Centers for Medicare and Medicaid Services (CMS) - one saying how House bill increases the cost by $289B over ten years and the another one reporting how Medicare paid $47B and Medicaid paid $18B all in improper bills, essentially how Tax payers money was wasted there.

Despite all these types of reports coming out, New York Times writes an editorial portraying how Congress intends to 'take on the cost control' issues in proposed slate of House and Senate Health Care Reform bills. It is the same line what the prominent Health Care Blogger Ezra Klein takes - poor Americans who cannot get or cannot afford Health Care will not wait until the 'cost problem' is solved but rather it is a moral imperative for the government to expand the coverage now. All these Progressives argue that as long as Health Care Reform (HCR) includes all these diverse cost cutting measures, it is sufficient because we do not know which ones work in reality. However, there is scant attention to what are the realistic chances of any of these cost cutting measures are adopted strictly and not simply glossed over.

The problem is we know that none of these cost control measures will work as long as Congress continues the current practices of financing Medicare and Medicaid. As Doc fix showed (where Senate attempted to pay $250B over 10 years in a separate bill to cover cuts in Medicare fees to Doctors and Hospitals); Congress always finds a back door entry to overwrite all these proposed cuts in Medicare. With such an inability to control entitlements,HCR is nothing but expansion of already costly entitlements with an argument that we are anyways going to be bankrupt as a nation so what is the harm in accelerating that process?

It is a moral imperative to payback all those who lend you the money too. With a possibility of American default not so remote, how can we ignore that 'moral' duty of honoring Fed bond buyers?

Truth is acceleration of a process which will bankrupt this nation is not necessary in responding to the calling to help 'have-nots'. If Congress and Progressives wanted so desperately to do something for poor; they could have opted for removing Medicare & Medicaid waste upfront and then use that saved money to cover socially weak citizens. With CMS reports, we know that at 10%; we are talking here around $60B saving per year (Medicare $40B + Medicaid $20B), essentially $600B over 10 years instead of the current boondoggle at $900B over 10 years called as HCR which likes of NYT want to justify so vehemently. Realization of savings needed is upfront because we cannot believe Congress when it says it proposes to save 'so and so' amount. (Otherwise also all the current Congressional bills assume half of the money to come from disciplined operations of Medicare and Medicaid.)

Interesting thing is expert bloggers like Ezra Klein very well know that the core problem is 'price control / cost control' in our current system and proposed excise tax on insurance for 'Cadillac plans' is the nearest what you get in an attempt to keep a lid on these costs. Everything else are platitudes, good intentions of Congress to address this problem in future and some half hearted attempts to undertake some experimentation. Nothing concrete there. As of now, prices set by Providers in this country (Doctors, Hospitals and other Health Care Service Providers) do not have any worthwhile and direct control. We do not talk about a 'fee schedule' in this country as like many in Europe use. Not that in this 'market only approaches' country we do not have 'price controls'. The famous working example is Public Utilities Commission which sets utility prices (electricity, gas and water) at State level and private companies compete in that market on those rates and still earn money. Unless we have such controlled pricing for providers, all other things are mute - private or public insurance, coverage and mandate, etc.

Senate bills have such MedPac or iMAC commission mechanisms included; but those are watered down with no intention of Congress to follow on those. House bill does not have this provision and so it is no brainier that the joint Conference Committee would adopt at the most a watered down version of such provisions.

With the core problem of 'provider prices' unaddressed, no amount of blathering or NYT Editorializing would save the looming disaster here. Any Congress member who takes solace in faultily argued support of current bills, would no doubt be setting himself or herself for the 'throw these bumps out' reaction by the electorate. Congress has wasted a critical year in arguing and politicking HCR when it should have devoted the entire energy for revising economy, employment and financial regulatory reforms. Not only Congress has just simply wasted this crucial time, it has accelerated the push of this country towards bankruptcy due to uncontrolled entitlement expansion. It was originally President Obama's idea to take up HCR this year and for the whole year he has allowed the Congress to digress from a fiscally responsible road. So he is equal party to all this non-sense.

No wonder, as time passes, less and less number of people are believing in the value of HCR the way Congress has designed so far. This is quite a blatant political as well as policy failure heaped by Dem majority when America could ill afford such disasters. For 8 years this country endured ideologically driven Neocon policies which have cost this country Trillions of dollars and now Dems are taking their turn in repeating same. A country is journey towards a bankrupt dead end has bi-partisan support in USA!

Friday, November 13, 2009

The Cricket Boss Speaks

Times of India reports that all time great Mr. Sachin Tendulkar says

"Mumbai belongs to all Indians. I am a Maharashtrian and am extremely proud of that. But I am an Indian first,"

The boss is speaking 'where his mouth is'. With hundreds of millions of worth endorsement contracts at stake at national level showered by India's businesses; it makes sense for Mr. Tendulkar to say this. It is plain and simple business.

But Mr. Tendulkar has one more thing, as sterling as his batting record and cricketing prowess - his credibility. So when he says what he said above, we believe it, we salute him and then we make an attempt to incorporate that in our life.

There comes an occasion in nation's life when these celebrated sports persons can play the role beyond stadiums. Mr. Tendulkar has done that today with flying colors, as strong as his emblematic power shots.

Touche!

Mr. Tendulkar, you are the boss.

Thursday, November 12, 2009

Finally a Right Approach for Afghan War

If these reports are any true (Washington Post and AP News) it is very clear that President Obama is finally asking real questions which need to be raised in the case:
- how can America's commitment be close ended instead of being open ended and
- how can America sustain increased involvement when the Karzai government is incapable to provide the basic partnership based on non-corrupt governance to win hearts and minds of Afghan people.

Implicit to all militarist solutions demanding increasing American soldiers in that theater is an assumption that in these early stages of Afghan Nation State History, you got to work with a corrupt government and that is the price of eventually calming down or stabilizing Afghanistan. But when the level corruption at any time negates any realistic possibility of nation building, we need reexamination of such assumptions. A stead fast refusal of this assumption is what is required and whenever President Obama shows that courage, we Americans are in far better shape. What better and significant it can be than Commander-in-Chief showing this maturity and steely character on Veterans Day.

Argument is what can you do even if the local government is corrupt and incapable of cultivating a government which eventually, in finite amount of time, would take over the task of pacifying the population and rule towards prosperity? What can you do is, you can use Predators in such cases if there is no point in putting additional American boots on the ground. America will be least liable in those cases to bomb a region in pursuit of self interest, the region which does not show any sign whatsoever of throwing up any viable partner. If President Karzai wants to show the disdain of American nation building efforts by claiming that the only thing Americans are bothered about is fighting terrorism and no longer term prosperity of Afghans, let him demonstrate that by staying in power for a week without American support. That weak weed will be over run by Talibans in no time. Precisely these tendencies of local powers to blackmail America have to be avoided and if President Obama shows that clarity in dealing with that one Mr. Karzai, that will be one giant step for America's Foreign Policy and a true response to extricate America from losing mechanisms by which America engages with rest of the world.

Argument will be, did we not do similar things in Iraq - partner with corrupt local politicians? But there are number of reasons why that analogy cannot be applied straight forward to Afghanistan - Iraq had had at least 3 credible elections compared to Afghanistan where the election has come a cropper. Iraq had had number of institutions which could help in rebuilding the nation whereas Afghan has literally no institutions and hence it is imperative that the first modern institution - the central government - functions. That does not function and then there is no hope of it working as long as the level of corruption is not reduced dramatically.

So the right approach is to question why there needs to be unconditional support to Karzai government. To imagine and to dare to think possibilities of conducting America's security interests without subjugating the policy to sheepish following of open ended engagements, are the precise reasons why President Obama was elected. Any time a politician walks the road promised to his voters, we have got fulfillment of the mandate.

Monday, November 09, 2009

Some Stupidity of one Nidal

This Fort Hood murder had some nerve to advocate that American Military to relive Muslim American soldiers from fighting against other Muslims in Iraq and Afghanistan! Surprise is how was he not 'court marshaled' at that point itself. How did American Senior Military Professionals allow that non-sense then?

Do we need examples here? What about so many Indian Muslim soldiers died in the war against Pakistan in defending Hindu majority India? Sometimes one really wonders, this country - America - does not get what is Secularism and how to live in a society where people of different religions come together.

This whole Fort Hood affair is tragic but disgrace to Professionalism of American Armed forces and hopefully they would deal with it resolutely.

Update - Andrew Sullivan reports a moving story of a Muslim American soldier sacrificing his life for his comrades in Afghan war.

Monday, November 02, 2009

A Year Later (Foreign Policy)

It is quite clear that President Obama has made solid efforts to fulfill his vast promise which was apparent during the campaign and for what he was elected. Fundamentally the tone of American Foreign Policy is changed and rest of the world is comfortable with it. Not only that, rest of the world would like President Obama to continue this approach (and hence the pre-mature Nobel Peace Prize).

Overall President is sticking to what he said about Iraq - planned withdrawal and continued engagement to sustain Iraqi Political structure. It is the other war - Afghanistan - where he is digging his heels. The initial commitment of troops in Spring of 2009 was swift and a clear signal of his intentions to own this war. The Administration also understood need of a local Afghan Partner for a successful war on Taliban and other terrorists. Credible local partner was supposed to come after the Afghan elections. However, what is surprising is how this White House tolerated the Afghan Election fiasco. It is true that most of the things about this election were decided during Bush term and Obama Presidency had less to do with the preparation. But it would have been apparent to anyone that problems were brewing there and some action was desired. Looking back it seems White House essentially missed the bus and failed to be more vigilant and demanding in that election. Considering all complications of working with Karazi (now that his opponent has backed out of the second round); it would have been much helpful if President Obama was more alert and pro-active about this election.

Compared to that Obama Administration has been quite pro-active and engaged with Pakistan. VP Biden has substantially contributed to this policy, honed by his decades of experience in this matter. Senator Kerry continued his 'carrot and stick' approach via Kerry-Lugar aid package and Sec. Clinton as well delivered a message of 'tough love' courageously. This intense American pressure as well as a challenge raised by terror attacks, finally made Pakistani Establishment to undertake cleansing operations in Southern Wazaristan. There is a long way to right the ship in AfPak theater, but Obama Presidency has at least made a right start in Pakistan.

The White House also intended to make a right start in case of Iran and it did so when it agreed for unconditional diplomacy. However, the Iranian hand is turning out to be a tough one for President Obama. First, it was the brutal suppression of Opposition by Ayatollahs. Not necessarily Iranian Opposition would have been easy to deal with in nuclear matters (listen to recent comments by opposition leaders regarding Western proposal of shipping bulk of partly enriched uranium); but it would have helped surely in reducing tensions. After loosing that opportunity, now comes the news that Iran is effectively rejecting the latest offer of Western countries. Earlier President Obama had good success in lining up Russia and China for these diplomatic efforts, but now these diplomatic efforts are likely to come short. In order to keep the credibility, White House will not have any option apart from going for proclaimed sanctions. Question is will Russia and China deliver on that.

By taking Bush's East European Missile Plan off the table, hope has been that Russia would back White House for Iranian sanctions. When Administration claims that it adopted this change in E. European Missile Defense Plan because there are more effective solutions to address Iranian missile challenges; there is an element of truth in that. But the largest expected payout is in case of Iran. Time has come now when that hypothesis will be tested. One can be wrong here, but propensity here is Russians would disappoint.

Even more harder battle is with China. Neither do China has any strained relations with Iran nor is it uncomfortable with strong hand politics of Ayatollahs. (Differences on religion, those can always be skirted by Communists when it comes to the question of business.) China's graduation to undisputed Super Power status is hardly linked to solving the issue of Iranian nuclear ambitions or solving the Israel-Palestine dispute. For all that matter, China can perfectly imagine a world where Iran is nuclear as a result of American failures. That is the realization one expects this White House internalizes - necessity of containing Iranian nuclear ambitions (what would happen to Sunni Arabs? why would they be far behind?) which may need more than diplomacy and at the same time to make tangible progress on Israel-Palestine dispute.

Arab Israel dispute is the creation of British Empire and America has essentially inherited the British mantle; at least in eyes of rest of the world. The dispute is intimately related to the history of Western Europe, again the leadership of that falls with America. President Obama understands this primacy and hence has been undertaking appropriate policy measures which can bring Israel to the negotiation table. Asking Israel to stop settlements was a right approach in that respect. However, a staunchly conservative Israel government of Bibi and general Israeli opinion about Present Obama that he is soft on Palestine; both are not helping at all. As a result Obama Administration is not able to stick to it's original demands of stopping Israeli settlements and is required to climb down. It is unknown at this point whether such a tactical retreat will help the Administration. But what is more important is that White House understands many more such months without any improvement in Arab Israel conflict and then the world is inviting currently pregnant violence to the real world.

A Year After (Domestic Policy)

Here is my take on domestic policies of President Obama and his Administration since his election last year.

Tom Friedman in his latest NYT column mentions that Obama Presidency is lacking a narrative and as a result his 'nation building' is sounding like a 'work project' which Americans feel just to slough through without much emotive force. Essentially Friedman is alluding that this White House is operating as some kind of 'Program Management Office' devoid of projecting any stronger overreaching purpose for the entire nation. On the same pages, Maureen Dowd explains why it might be the case so - Obama has to encounter the reality of America's two wars and Great Recession. But then intellectual expectation from Obama is despite these wars and lack money, he would articulate and execute a plan and 'narrative' which will ignite American imagination.

The reason why this might not be happening is the choice President Obama made for his nation building - in the midst of severe recession and collapse of Capitalism, he decided to make Health Care Reform as the top priority. The reform will very likely pass soon (by January end for sure). But the price it has extracted is make this Congress unable to take any other legislation seriously. It has jammed out all other important initiatives. Because this Health Care Reform has a hefty price tag with a strong realistic possibility of Uncle Sam requiring to foot unexpected bills in future, President Obama still cannot talk about deficit, tax reforms and better fiscal management. Further, Administration has been bit lax in forcing Congress to adopt 'prudent fiscal path' in the Health Care Reform which sustains a belief that Obama Administration and Dems in particular are not very vigilant in spending tax dollars.

How much of a serious mistake is this - taking Health Care Reform before anything else? Well, most people backed Obama in April when this reform process started on the premise that Obama Administration will be able to do multi-tasking competently. In fact President Obama forcefully rebutted his critics when they pointed President Obama was taking too much.

But forcing critics to shut up in a debate is one thing and 'walking the talk' is another. The two glaring omissions which are become apparent during these months are:

- active intervention to kick start employment and
- financial regulatory reforms.

Administration claims that it created or saved one million jobs due to stimulus package. But as the blogsphere is awash with the statistics which show that indeed the stimulus so far has been disappointing in creating jobs fast; it is apparent that we are nowhere compared to what we were promised. Again Administration critics who pointed then the aggressive assumptions of the Administration in projecting employment effect of stimulus were derided. The debate whether more stimulus is needed or more deficit spending is needed; all that is a policy debate where this Administration is expected to have some hold. With such a disappointed showing so far of the first stimulus package, Administration is short on credibility here. No matter deficit spending or not, one thing is very clear - funds have to be spend fast, smartly and intelligently to generate jobs. That is not happening and this is something President Obama will have to own now. For example, after the stimulus bill, by May - June it was clear that Small Businesses were getting hurt because of the credit freeze. Still it took October for President Obama to take this issue seriously and even today it is not clear how Administration actions would fundamentally solve this particular problem. As whatever 'push' effect of the stimulus wears down, there is a real possibility of renewed challenges to economy and there are no signs on the horizon that American rulers are any ready for those challenges.

For the other issue of financial regulatory reforms, Rep. Barney Franks in House is taking the initiative. But reading all sorts of early reports indicating how these bills are getting compromised during the sausage making in Congress; things do not look very hopeful here. The way derivative market and swaps are proposed for regulation, it is possible that big fishes will leave the net easily. It is also obvious that this Administration did not take any concrete actions in controlling compensation of Bankers, even though Pay Czar issues few orders for some companies owned by Fed. It is not just compensation, it is unclear why AIG honored all bets to Big Banks which essentially benefited too much at the expense of taxpayers. Meanwhile, there is no serious movement in controlling rating agencies which contributed so significantly to the mess we all have landed into.

People recognize that rebooting of the Capitalism is needed. Agreed that entirely new framework of Capitalism is required and that task cannot be done all by the White House alone. But leadership is never about only executing when intellectual clarity is there. While such haze is there, fog is there; White House is still needed to put forward steps to rectify excesses of Capitalism; especially immediate things which are beneficial for average person. It is perplexing that so many of these things politically winner, but the Administration is not undertaking those. This fuels the suspicion that as like any other American Administration, and despite multitude of vows by President Obama; this Administration is no different than others when it comes to withstanding the pressure exerted by Big Banks and Financial Industry. I am not denying the culpability of Congress here and ultimately they are the ones who own most in these matters; the Administration has not set any great examples here as well.

Bernanke, Geithner, Romer, Summers and President, all can argue that saving Big Banks was necessary to avoid collapse of our Economy and there is no denying that. Their fundamental call of not going for nationalization (Paul Krugman and Simon Johnson turned out to be wrong there) is great and probably one of the most important accomplishments of this Administration. But the impression still remains - this whole American Capitalist System is rigged against common man as articulated by NYT commentator Frank Rich sometime back. This Administration has so far been quite lacking in removing such an impression as well as falling short in creating jobs for common people. Automobile Industry bailout (another excellent domestic success, even though bond holders got unfair haircut there) is only one isolated example where some concrete actions by this Administration helped Labor. Apart from that, we are still waiting. Will it be the waiting forever or the wait ends soon; that will be the story of coming year.

Sunday, November 01, 2009

Lessons of hatred

Alissa Rubin writes a thought provoking article in NYT about what is her take away from Iraq - not to undermine the power of hatred and historical animosities. As she mentions at the end, indeed one wishes Americans do not forget this issue as Americans start addressing issues in Afghanistan and Pakistan with a newer strategy. Hilliary's last week trip must have given her that dose first hand.

So all the care and precaution which Obama White House is taking in plotting next moves in Afghanistan and Pakistan; those all are welcome. Not that lengthy deliberations are any guarantees for smart policies, but it will at least give appropriate time for thorough understanding of the situation as well as conducive political developments on grounds (new Presidential term in Afghan and developments in Pakistan's internal battle in South Waziristan).

The general perception of Pakistani and Afghan population is that Americans were only interested in them while fighting Soviets and when that part was done; Americans abandoned them. Of course, there is some truth to that. What was required after the Soviet departure was continued American involvement in that region to carefully handle simmering fanaticism and supporting moderates and middle class in those countries, especially Pakistan. Bill Clinton did not find anything attractive there to continue diplomatically (apart from some high profile visits) nor he found worth while to invest politically at home so as to fund large American aid supporting those societies (instead of just military aid). In some sense there was no pay off to Afghanistan and Pakistan for their support to America in the war against Soviets. American Presidents continued to live with dictators and democracy was skirted aside. It is true that Bill Clinton did see democratic governments in Pakistan and he encouraged those to certain extent. But when those democratic forces started to whittle away, he did not get involved as much as needed. Seeds of 9/11 were sowed in this background.

Coming back to Rubin's article, the involvement cannot be blind or crude without understanding the regional and ethnic divides in those societies. All in all there is no escape for America other than to get involved in this region for a long haul and at great expense. Past mistakes cost a lot. In Bill Clinton's time political environment was favorable to America - it was the only superpower of consequence in those times, American budget was in surplus, Dollar was strong and America had capacity to spend then. Whether America sends more troops today as General McChrystal asks or it does not; it is going to be an expensive endeavor no matter what.

There are few who argue that may be America should restrict all this involvement in AfPak region. Liberal Left is prominent in demanding that and then there are pundits like Tom Friedman who advice along this line now. The case with Friedman is surprising - he was the guy who was at the fore front in backing Bush's Iraq war regardless of realistic cost estimates and now here he wants America to contain her involvement because he fears China, Russia and Brazil all are going to be happy for a perennial entanglement and bogging down of America. It is true that indeed China will be happy for America digging it's own grave in AfPak region. But that still does not absolve America from past omissions and it is imperative for her to still get involved and solve those issues so as these are not fertile grounds of terrorism against America and her allies. Deepening relationship with India and eventual peace in AfPak region; these are worthwhile additional gains too. While executing this undertaking, America needs to be smart and incorporate all lessons which America stumbled upon in Iraq.

Friday, October 30, 2009

Right Signals

Indian PM Dr. Singh is giving absolutely right signals to Pakistan and all S. Asian countries when he says that "we see our security and prosperity in their progress and stability". I wonder if any other Indian leader has been so categorical and emphatic in expressing these right sentiments in so clear words.

Sad part is Pakistan is in much weaker capacity to reciprocate these gestures because of it's fratricidal conflict. But may be, just may be, Hillary undertaking straight talk in her latest visit; Pakistani elite may make the necessary amendments. This is in addition to screw tightening via Karry-Lugar aid package. It was really refreshing for Hillary to say how hard it is to believe when Pakistani Government says that it does not know whereabouts about Al-Qeda Leadership and other terrorists. She meant at least some section of Pakistani establishment is quiet likely aware of these details. It was also music to ears when she alluded to the possibility of how peace with India can be a true harbinger of prosperity for Pakistani society. And finally, it was absolutely correct for Hillary to set the expectations right - that it is not USA which can dictate peace between India and Pakistan but it is for these two countries to address their own problems. Despite objects from some foreign policy 'formalists' one can understand how fantastic a job Hilliary is doing. There cannot be any more potent symbolism when Hillary was talking with Pakistani women about War and Peace with authority and composition. And she is daring to do all this when opinions about USA are totally inflamed in Pakistan. No wonder Andrew Sullivan is all praise for her.

With Kerry delivering in Afghanistan as well as with Pakistani aid package, Biden pounding the table against McChrystal and Hillary going in the lion's dean to deliver some tough love; these Democrats are doing remarkable 'fire fighting' and 'diplomacy' for the Commander-in-Chief President Obama. Hope is something concrete comes out of these efforts.

It is clearly synchronized for good that Dr. Singh extends this 'hand of peace' in this context. With all these wheels turning in right direction, indeed there is much less room for Pakistani establishment (Army Chief Kayani, ISI Chief Pasha, Punjab Chief Minister Sharif - brother of Nawaz Sharif, Pakistani PM Gilani from PPP Party and the President Zardari) to complain about rest of the world. No doubt their political task is monumental - to turn population away from decades of nurtured views about 'good / acceptable terrorism versus terrorism against Pakistan' and to punish folks which are at the heart of such terrorism. That is not going to happen unless the Pakistani establishment:
- dares to define vision of Pakistan which is much more than simply correction of some historical grievances (like getting back certain land in Kashmir from India) and
- unequivocally denounces terrorism of any kind without worrying about whose wars Pakistan is fighting.

Truth is Pakistan is fighting 'its own war' for survival. It is not carrying water for USA or India whenever a terrorist in that land is wiped out. When it undertakes these right steps, it is only serving to the vision of it's founding father Jinha and people of Pakistan.

Update: It all started by Obama's Cairo Speech - campaign style politiciking in other country to achieve some diplomatic goals. Hillary's Pakistan tour is an exhibit A of such public diplomacy, an attempt to shape public opinions in a far way land. These are some 'high wire acts',quite impressive.

Tuesday, October 27, 2009

Harry Reid

The Senate minority leader in 2004 who led Dems through their most perilous period (2004 to 2006), the Senator who crossed the red line and said 'We lost the war in Iraq' on the Senate floor only to turn out that indeed America could go away from the precipice, the Senate majority leader who has been more or less listless during these early months of Obama Presidency; has final taken a decision of momentous proportion by putting forward a health care reform bill with 'opt-out' Public Option. It is difficult to believe it is all driven by leadership or statesmanship. In the end it is all driven by his electability in Nevada in 2010. As of now he has no chance to win that Senate re-election. With this 'red meat to base' he is hopping right back. True, this is how democracy works; but the decision does not seem to be done with best interests of Americans in mind.

Public Option in itself without 'iron clad' built in mechanisms to control costs is of no use. It can very well exasperate the cost burden on Federal Government. Though Senate Finance Bill has provisions for an independent Medical commission to control costs; back door attempts, like last week, to reimburse doctor fees at $250 Billion over ten years outside the scope of Health Care Reform bill make you nervous. It makes you nervous because Congress has so far no history in managing costs and there are no signs that it would change soon. In stead of focusing on getting a fiscally responsible bill, to strengthen Baucus Bill further so that it withstands cost irresponsible pressure from House; Sen. Reid simply joined the chorus of Public Option and essentially gave up efforts to get a consensus among 60 Senators. In the process he let go Sen. Snowe's vote too which otherwise President Obama was chasing for right political reasons.

One is compelled to say, Sen. Reid threw caution to wind, as Ezra Klein points, because it will be difficult for many centrist Democrats to block the cloture of this bill by filibustering it. Though such Democrats would in the end may vote against it in the final passage; cloture will be there now. In that sense, Health Care Reform with Public Option has come quite near to reality.

Things could still change further if like Sen. Reid, some more Senators feel back home political pressure in their respective states, making them to take strong positions. Or the bill after the conference will be really badly compromised so as many centrists in House and Senate would not accept it. In a way, the perverse signal from Sen. Reid's this move is to abandon any consensus, national interests and to simply respond to electoral pressures / compulsions. You can find many House Members and Senators in similar positions who may abandon caution and discipline which can result pretty quickly in unraveling of the whole thing. That will be the worry for White House. Of course, White House would prefer to err on the Left side if that is what is needed to get the Health Care Reform rather than insisting on a perfectly fiscally balanced reform. The thinking will be, erring on Left will play to the Liberal Gallery resulting in keeping the Dem hold on Congress and that will enable President Obama to take any necessary actions to rectify the excesses on Left side. But as like despite playing to the base Sen. Reid's reelection may be still challenged; many other Dems can still find themselves in harder spots for the next year's election. Coming looses in Virginia Governor race and possibly in New Jersey Governor race too will set in motion a political wave 'checking the influence of' Barack Obama.

Saturday, October 24, 2009

End of Regional Identity Politics?

Mr. Balasaheb Thackery, the patriarch of Marathi Manoos, writes a desolate editorial in Samana (October 25, 2009 issue) after latest Maharashtra polls, the Western State in modern India. There is no history of Marathi Folks (those from the state of Maharashtra) without Mr. Balasaheb Thackery - for good and bad. His party was trounced in the latest assembly polls. An eighty four year old need not write such an editorial in Samana - the newspaper founded by Mr. Thackery himself. Life should have spared him here.

One can understand his anguish and sadness. It takes bit of 'end of the world' tone when he declares that he no more believes in God.

Those who believe in God would not find it amusing when a mere loss in a single election should prompt to a life long devotee to become atheist at this stage. Or on the other hand did it require Mr. Thackery that many decades to realize 'belief in God' is nothing but simply 'crutches' to deal with vagaries of Life? Truly tragic part is, whichever camp one is, Mr. Thackery has reached the end of the road literally and figuratively. He does not have any more years left to battle out. Hence his tragic editorial.

One can wonder what is the point in rebutting an 84 year old man's writing since it is questionable what can he understand in all these replies. Besides, it is obvious that he must have been offered sane advice for all thse decades but it did not have any impact on him. Though his political outfit getting trounced is a seminal event, at the end of the day his party still has around 20% members of State Assembly. His political party is not yet finished. In a way, Marathi folks still owe to him in at least engaging with him politically; we should not just 'pass on or move on'.

His is a classical step in 'denial' - he is blaming Marathi people for not voting him. His argument is that his party has been the only one to cater needs of Marathi people and those very same people have turned on him. This raises number of questions:
- What Mr. Thackery considers 'needs of Marathi'; are those indeed the real needs of Maharashtrians or do they need lot many different things than what he is offering?
- Is he ready to accept that it is not the monopoly of Shiv Sena only to serve Maharashtrians? Why is he never ready to accept a fact that for large sections of Maharashtrians other political forces might have delivered and cared?
- Finally, what about a simple fact that there are multitude of Maharashtrians who do not simply associate with 'Marathi identity' which he has been assiduously pursuing at the exclusion of everything else?

There is no point for Mr. Thackery to grouse about how other regional forces are thriving on the basis of identity politics. Did it ever occur to him, may be some of those are delivering to their people (Modi in particular) or simply that all of those regional outfits aiming to rule on the basis of linguistic and regional identities are in the end swimming against the global tide of more unifying politics?

Whatever answers Mr. Thackery wants to give to these questions, reality is as follows:

- He failed to grow Shiv Sena in more unified manner and that led to the division. Marathi Manus 'did not break' Shiv Sena. It is Mr. Tackery's continued nepotism that broke the Shiva Sena leading to a division of Sena. As a result in the first past poll method of Indian election; his party lost dramatically. Why does he not want to own this failure? Do we need to tell a patriarch of 8 decades, what 'unity' means and why it is needed? If Leadership is not bringing people together, to hold them together; then what is it? Why does he want to ignore failures in not cultivating 'institutionalized' power sharing and party management? Who's failure is that?

- True, Marathi Manoos speaks Marathi; but that does not mean he or she can make living in today's world by sticking to suffocatingly narrow and restrictive agenda of Shiva Sena. Marathi Manoos, as like every other humans and societies on this planet change, his needs change and Shiv Sena fails to understand.

- Whenever opportunities were given to Shiva Sena - what did we get? Corrupt government not delivering basic needs and prosperity. Not that non-Shiv Sena governments are corruption free; but those deliver more - basic security to non-Marathi people living in Maharashtra and economic development. Shiv Sena does not have any sterling record when it comes to delivering governance and that is not the failure of Marathi Manoos.

- Finally, did he ever bother to get out of this narrow linguistic chauvinism and govern by much broader and accommodating politics? How can you be a legitimate political force while you want to run your politics on such a narrow basis when today's dramatically 'in flux' societies need much broader agenda and political basis? It is hard to believe in the world where Barack Obama gets elected and a Prime Minister from minority community rules a country of Billion plus people; Mr. Thackery still expects Maharashtrians stick to his narrow vision of Marathi Manoos.

Truth is, Marathi Manoos is indeed 'growing and emancipating' whenever he shows the ability to out grow ultra restrictive confines of any political party, including Shiv Sena.

So Mr. Thackery, actually you do not need to be so sad. Your life long project of igniting imagination and vitality of Marathi Manoos is indeed succeeding. Do not undermine that success in the failure of Shiv Sena where remedies of political come back are well established. If Mr. Thackery or Shiv Sena wants, obviously it can incorporate much needed ideology, policy and institutional changes and then not just Marathi Manoos, but all Maharashtrians will back Shiv Sena.

Update - Some may wonder why do I even bother for some obscure state level election in India. Reasons are:
1. First of all it is personal - my ethnic roots are strongly Maharashtrian and Marathi. So it is incumbent to be aware of what happens in that world. Most of my family members, as well as of my spouse, are intricately linked to Marathi way of Life.
2. We have to understand, many state level elections in India are equivalent or larger than elections in many countries of the world. If we report what happens in German Election or Japanese Election; why not for one of the most important states in India which has population more than 100 Million?
3. Mr. Thackery espoused a peculiar brand of politics, very typical for a young Democracy with non-developed economy. Hence, what happens to that 'polity' is an experiment of much significance.

Sunday, October 18, 2009

Mopping the left out area

Many opportunities have been presented to the Obama Administration to correct the reckless bonuses of big banks and each of those opportunities have been squandered; with total disregard to 'what is fair to taxpayers' and what is good for American Economy in coming years. It is obvious that reckless risk for higher compensation and bonuses created market for CDOs which should not have been sold in the first place as well as mortgagees which should not have been given to start with. That brought American and global economy to knees, TARP was approved and by Summer of 2009 American Banks were saved, economy was saved on the basis of taxpayer money. In normal circumstances that would have prohibited the banking industry to stop bonuses.

But that has not happened and American Congress and Administration have failed so for to stop it; having left things for banker's own decisions without any disciplinary actions. Time has come for Congress and Administration to undertake and implement tough compensation policy. Bothering compensations may seem like a less important concern when it comes to saving economy since many argue that 'corporate transparency' is the real key there. It may sound vindictive too. But that is all false. It is the question of accountability and fairness. Democratic politics is all about fixing responsibility on those who caused such a great grief and who still continues to have such a potential to pull all of us down into another hole in future.

What needs to happen as far as compensation reforms go?

1. As Fed Chairman Bernanke mentioned in a testimony to Congress, banks which undertake risky transactions, banks which have large portfolio and banks which are intricately interrelated with the global financial system (i.e. those who pose 'systematic risk'); need to maintain higher capital base. Meaning Goldman Sachs and JP Morgan in today's world need to maintain higher capital reserves than yesterday. The Architect of this Great Recession - Alan Greenspan - in the end agreed to this proposition too. (He went further to support the contention of dividing these large banks as well, not that his advice has anymore credibility apart from admission of the mess he created.)

2. As long as banks do not confirm to these higher capital reserve ratios, no bonuses should be paid to any employees of those banks. Relaxation of 'mark-to-market' rule is helping many banks to show higher capital reserves artificially, Wells Fargo is the case in point, and that essentially leaves these banks to continue the payout of huge bonuses. These relaxed rules will be going out soon, starting from next year; but as far as bonuses go; those rules must be applied today. Further, any bank which has received tax payer money in last 12 months should not be allowed to pay out any bonuses as well.

3. Bonuses which have been paid after TARP injection of funds need to be claw backed as per the regulation. If that is difficult, bring that money into the bank reserves. If that is difficult, hold out money to all those employees in future assuming paid bonuses as advance future compensation. And if those employees have left banks; apply retrospective income tax of 75% payable in next few years. Yes, it is vindictive. But what do you want - a fair system or nuance in being easy on bankers?

4. If Congress is going to take time for promulgation of these laws, then Administration should undertake execution of various existing legal provisions to prevent these bonuses. What is wrong in having 75% income tax on all bonus income above 100K limit for employees of all banks or financial companies, private or public, which do more than run of the mill 'loans and savings' transactions? The reason is Technology companies or Public Utility Companies did not bring the Great Recession. It is these big banks and financial institutions which brought this recession. Now is the time for them to payback.

So the question is - is Obama Administration ready to 'mop up the area' which it has left so far or it wants be beholden to Financial Industry?

Thursday, October 15, 2009

That is why no one believes Dems

Social Security Administration declared that there will not be any payment increase for 2010 in light of 'deflation'. Now that is for sure bad for seniors who depend on Social Security money since many other costs are relentless, especially the health care cost. This means suffering. In order to redress this suffering, our compassionate President has declared to award one time $250 to each Social Security recipient. Being mindful of not so good state of Social Security Fund, President also said that he would not like this bonus to come from that fund, but he did not mention from where!

Since we still do not have any technology to 'generate money from thin air', this means $13 Billion dollars cost of this program is going to come from the general budget; meaning - pass the hat to Chinese; more borrowing. Our esteemed Congressional Leadership of Nancy Pelosi, Harry Reid and Charles Rangel are not to be left behind when it comes to compassion and hence they have promptly agreed to borrow money to support President's humanitarian Social Security Bonus.

New Hampshire Republican Senator Judd Gregg got it right when he opposed such payment saying that what was the point in the first place to have such arrangement, of linking payout to inflation, in Social Security? Now we see why no one believes Democrats when they say Congress will stick to reduced Medicare Payments in the proposed Health Care Bill.

It does not stop here. It gets even more interesting. Some bright bulbs in Senate are pushing for a separate bill to the tune of $250 Billion to pay money to Doctors over the period of 10 years so that they are compensated for the proposed cuts in Health Care Bill. And the argument is 'oh, that will keep the Health Care Bill' as budget neutral!

Now is the time to ask Rep. Barney Frank, Congress and oh yes our beloved, rock start, Nobel Peace Prize Winning President - which planet these Democratic Politicians live?

This is beyond disbelief and totally disingenuous and irresponsible by Dem side. What is wrong then when Republicans say let this Health Care Reform die? True, Republicans spent like drunkard when they were in power. But we Americans do not get out of the hole when 'one drunkard is replaced by another one'; we get deeper into the hole.

Solution for Social Security non-increase is not 'not paying' those $250 per person. But if the Administration and Congress wants to do that, balance that money somewhere else - increasing some tax or cancel some spending. Doing gimmickry or unending borrowing is not the solution. Sermons like Christina Romer when she says President is not at all comfortable with Budget Deficit; that is all empty talk when neither President is doing anything nor is able to avoid 'digging more'. As Senator Bayh said, the current arrangements of 'cost control' in the Health Care Bill are not tight enough and behavior of Democrats so far confirms the worst fears of critics of this bill.

And by the way as far as one time Social Security increase to Seniors goes, we give damn to the political necessity of this Administration to placate Seniors when Republicans shouted that the proposed Health Care Bill is a raw deal to Seniors. That is the pickle of Administrations own making.

Update - Many in blogsphere contend that Obama plan is fiscally responsible because it is avoiding the base 3% increase in Social Security payment, as would be the normal case or the increase needed to yield $250 on an average. Instead it is only one time increase without having the increased base in subsequent years. Contention is that is some kind of saving. Again, the point is whatever increase outside the Social Security Fund is planned; how is it financed - by increasing deficit or by cutting some expenditure somewhere or by generating new revenue.

Wednesday, October 14, 2009

WaPo Af-Pak Remedy

Washington Post puts forward it's remedy for nullifying challenges posed by Taliban. One crucial point, and the right one, which this editorial makes is that Taliban not only are aiming to capture back Afghanistan, but would like tohoist eventually on Islamabad too.

According to the WaPo Editorial the remedy is not emptying the Afghan theater of war, presumably by adding more soldiers there. The problem here is, the only fully flushed out Afghan war plan from Pentagon is the General McChrystal plan where he wants to go away, on purpose, from 'fighting a war with Taliban' to 'protecting Afghan population from Taliban'. Now that is quite a difference of strategy and objectives. Unless WaPo Editorial puts forward a war plan to fight Taliban in Afghanistan; the proposed remedy appears to be non-implementable until then.

America's current forces in Afghanistan have achieved removal of Taliban from Kabul and have kept it that way. Credibility of Afghan presidential election is the issue to be sorted going forward there. Such an approach without adding substantial troops can create a vacuum for Taliban to re-occupy part of Afghanistan; that danger is there. But by engaging in Pakistan, if Taliban or more important terrorist / militant outfits are cleared; that will be a core redress of the problem on hand. Then to co-opt part of Taliban (Afghan version of Sunni participation in Iraq?) or to always keep them away can be handled since already the half of part keeping them 'away from power in Afghanistan' is attained.

Sunday, October 11, 2009

Afghan Resolution

It is classic Obama process - let the Public, Media and Events eventually coalesce on a policy he wanted, as a result of which it becomes politically feasible to sale the policy. Notwithstanding foolish and utterly irresponsible interpretation by California Senator Feinstein (look for her awful Sunday talk show comments) and many like her in Senate; following things indicate how finally the resolution to Afghan problem is unfolding:

- Richard Hass writes a classic Op-Ed in Washington Post arguing for the middle course;
- Fareed Zakaria presents a compact case for not adopting McChrystal recommendations; and
- Rawalpindi attack on Army HQ starts percolating minds of people and make them ask serious questions.

This all means it now seems quite possible (I would bet now on that):
- President Obama is unlikely to adopt McChrystal recommendation as is and he at the most may order 10K additional soldiers under the grab of training troops.
- Afghan President Karzai will have to share the power or have the entire election nullified (UN Chief is finally speaking now). Better will be he is booted. But it seems tough now he will be allowed to have his free reign of the affairs continued.
- Administration will play a hard ball with Pakistan in forcing them to accept all the proposed (or even some new) conditions attached to the aid package.

And as far as folks like Sen. Feinstein and Sen. McCain go, who never learn from their disastrous Iraq vote (oh yes, she was one those laughable Senators who backed Bush without applying her own judgment); probably the world will move on. I wish Sen. Feinstein reads Frank Rich's column in New York Times and makes some honest efforts in being a responsible senator rather than abducting her responsibilities of sound strategic judgement in national interests. We only talk about folks who has some chance to repair; Sen. McCain is beyond repair when it comes to war related policies.

Frank Rich Hammer

Another must read column by Frank Rich in New York Times:

"Two Wrongs Make Another Fiasco"

Pakistan - A Nightmare

On the background of brazen militant attack on Pakistani Army Headquarters in Rawalpindi, few nightmare scenarios come to mind:

1. Militants get hand on the nuke information and mounts an attack on some nuclear facility. Militants actually capture a nuke or two and the news sends shock wave through world capitals. America sends a crack force of 5K soldiers on the site and along with remaining Pakistani State Loyal forces, starts the immediate counter attack. In an emergency UNSC meeting, China and Russia side with America to make the necessary military intervention in Pakistan. American navy moves all sorts of assets in Arabian Sea with space and on surface abilities to stop any rouge nuke missile flying from militant control. The battle rages for some 1 to 2 days with a full blood bath. Remaining Pakistani State imposes complete news black out and all subsequent news are relayed only in controlled manner. After lot of American blood nukes are controlled.

2. Despite Pakistani court finally indicting Lakhavi yesterday and some other LET perpetrators of various terrorist attacks, main power brokers, in LET are still at large. These power brokers align with stupid political parties in Pakistan, like of cricketer Imran Khan's party, to ignite further anti-American sentiments for various American Aid Conditions proposed. Political situation goes out of hands and millions of Pakistanis are mobilized by these fundamentalist political parties to literally bring down moderate Pakistani government. Extremist Political Party in conveyance with some major component of Pakistani Army stages a coup and captures the power and nuke control. It starts rattling the region by flaring up Kashmir dispute with India on eastern side and starts alliance with Taliban on Western side. America and rest of the world powers can hardly do anything and the world sees the rise of another Iran, except that it is much more dangerous with actual nukes in hand.

3. Part of Pakistani Army and ISI aligns with some political faction of a Western region of Pakistan and declares independence along with some additional area from Afghanistan. Under the counter insurgency plans adopted by American forces and the policy adopted where by premium is placed on securing certain Afghan population rather than land; there are no American forces while such secession is taking place. With armed forces of thousands and some air power, this nascent rogue independent state is able to hold the fort with embattled Pakistani Army for months as well as American forces. With the inability of American forces, for various domestic, logistic and UN political reasons to clamp down this rebellion for months; the quasi nation state provides necessary cocoon to nurture and plot another terrorist attack either on India or America. With an attack on India, India starts the war with Pakistan. With an attack on America, finally America is forced to start another ground attack.

The point is number of such nightmarish, Halloween type scenarios can be visualized. Clearly, adding 40K forces to Afghanistan as per the General McChrystal plan is not the solution here and nor will it address the challenges posed by this unstable region. For those American Politicians (Sen. McCain for example) to demand and behave as if the key to region's success lies in just more boots in Afghanistan is literally being irresponsible.

So it is imperative that American establishment throws away the bunker view of what is happening in this region. With the attack on Pakistani Military HQ, there cannot be any more dire warning than the dangers emanating from there. America needs to get deeply involved in Pakistan and at least need to move along what has been laid out in Kerry-Lugar bill. The bill demands that:
- military chain of command is exposed to America,
- military budget of Pakistan is revealed,
- Pakistan helps to dismantle nuclear weapons networks operating in the country, and
- cracks down terrorists (otherwise loose the financial aid),
- does not use American funding to attack India.

But the nagging issue is whether even this will be sufficient or not. For example, as like CIA and American Media did in case of Iraqi militants, it may be needed to publish a running list of 'whose who' of Pakistani militant gang and publicly track taking down of these members one by one. America needs to pressurize remaining Pakistani state in taking out these militants in some 'time bound' manner.

Will all this be sufficient? What more is needed? Resolution of Kashmir mess? Will India come on board? For example, will India accept to formalize line of control as the international border? Will Pakistani Establishment accept that? In other words those of Pakistan who politically depend on keeping alive Kashmir controversy, will those agree? Or identifying such folks early and removing them is the key? Will China co-operate in all this?

The thinking so far as has been Kashmir is a hard knot to solve, it is better for America and the world to by-pass it and just box the situation in Af-Pak region. But doubts are starting to come whether this can be any more possible or not. In immediate term, 'boxing of the problem' is necessary, but every passing day indicates the need to start the parallel track of diplomacy on Kashmir issue. May be in the coming visit of Indian PM to Washington, ice is broken on this topic.

Friday, October 09, 2009

Obama Peace Nobel

This is a surprise. I think it is quite early in the game for this President. There was a hunch that eventually this President was going to win the Nobel Peace Price. But so early in the inning is a surprise.

This means that contrary to what many Americans think, the world seriously thinks that this President has started the inning quite well. Of course, two years of a solid presidential campaign and to be the first African American President count too.

Obviously, keeping with more activist role of Nobel committee in recent years (look for yesterday's literature Nobel to a Romanian born German writer, 10th German writer!); this prize is more towards keeping an eye on future. It is an attempt to ensure that this young Presidency continues the current path of 'deliberation' in world matters instead of veering on the road of ill fated Bush adventures. It is also to strengthen his hand against Iran and against Conservatives in shrill Afghan policy debate. The prize is also a nod for reducing the missile menace to a some extent on E. European soil. (VP Biden is going to have far easier trip now to Eastern Europe.) The world liked when President Obama presided the UNSC meeting with the unanimous vote for the eventual nuclear disarmament. President Obama's efforts in moving to next stages of START (nukes and missiles treaty with Russia), is also a welcome move.

In no small measure, America's co-operation with world economies and G-20 to address current crisis is well worth too. (Larry Summers - behind the screens must be a happy guy; he contributed immensely to these rescue efforts. Eventually he and Fed Chairman Ben Bernanke will get their Economic Nobel too.) Helping to bring G-20 to forefront, that has been a good contribution too.

Looking forward, Iran negotiations, Copenhagen Climate Treaty and China Bilateral Relations; all may have some positive effect. It will be hard for Obama (and Congress as well) to go to Denmark and not to have serious 'climate control' commitments from America.

On the other hand, this prize may put little bit of 'expectation burden' on this Presidency. But it is expected that President Obama and his Administration will be able to handle this burden very well. There is no doubt that he is capable of so and chances are that he will deliver on this promise.