Friday, December 31, 2010

Happy New Year

Wish you happy 2011 and thanks for stopping by!

Thursday, December 30, 2010

Change of Guard in Australian Dynasty

Ashes Series results are either 'graduation parties' or 'send off parties' to captains of Australia and England. The current Ashes Test Series is turning out to be a sad send off to Australian Test Cricket Team Captain Ricky Ponting. As expected, his 'injury' will not allow him to captain the last Test Match, but everyone knows the curtain is falling on another of great Australian Cricketing Legends - captain for 77 Test Matches of which at 60% winning rate he has won 48 Test Matches; the most by a Test Captain of any side. Now, that is not an easy achievement to surpass and for a long, long time that honor of Ponting is least likely to go away. With Ponting, it is not the Everest of winning highest Test Matches as a captain the only achievement. The guy has been within striking distances of one record or other without losing the core focus of playing Test Cricket to win matches. For example, he is the highest centurion on Australian side and for a while was within a striking distance of catching master batsman Sachin Tendulkar for number of Test centuries.

But for all these phenomenal achievements, he has been essentially bracketed between Allan Border and that top dog - Steve Waugh, the one who has Test Match winning record of over 70%, highest among all Test captains of any side. One can take an issue with Ricky Ponting that he neither has the durability of Allan Border (who captained 99 Test Matches, highest for a Test captain of any side) nor higher winning rate than Steve Waugh. But these statistics may matter less as these 3 Australian Captains, each one legend in their own rights, were extraordinarily accomplished batsman in the first place - each amassing more than 10K runs in Test Cricket at the average ranging from 50 to 53%; though by far Ponting was the superior batsman among 3. What would matter is what legacy each of the successful batsman / captain left behind. With Allan Border, he was the founder of Modern day Australian Cricketing Empire. Border systematically assembled everything from small pieces and showed the extraordinary endurance to see that Cricketing Dominance flourishes back in Australia. But it was Steve Waugh who redefined the Test Cricket with 3+ run rate per over, essentially bringing the dynamism of One Day Cricket but at the same time taking the 'art of Test Cricket Match as the game of wits, brains and strategy' to the highest level. I believe that innovation and renaissance of Test Cricket - whatever is possible given the Commercial Gorilla of One Day & 20-20 Cricket - are the singular contributions of Steve Waugh. That is where it is hard to read Ponting legacy anything apart from simply continuing the Steve Waugh formula. If it at all, he only ratcheted further the 'hard edge' of Australian badgering on field.

Test Cricket Captain is more than a captain compared to any other team sport with substantial more influence in shaping a team on ground and off ground. The influence of a Test captain is further amplified by the long duration of a Test Match. That is where Ponting's failure in terms developing Australian line up after departures of McGrath, Warne, Langer, Gilgrist and Hayden is clear. If Ponting wanted to continue as a true captain after departures of all these essential players of his era, in a way it was his responsibility to fill up / nurture those positions with right caliber and lead them to a success. Looking at the shambles in which current Australian Test team finds itself, it seems that is the missing piece in Ponting legacy.

What is surprising is Australian Cricket Board (ACB) also does not seem to have a well thought out post-Ponting Test Team plan. That is unusual to the stature of ACB considering that ACB basked in the full glory when the change of guard was so smoothly executed from Steve Waugh to Ricky Ponting. It seems dereliction of the duty on part of ACB. It is as if a Blue Chip company does not have a succession plan in place. But hopefully ACB would have sufficient time to plan for World Cup and Ricky Ponting would also get enough time to ponder over one more campaign - whether he wants to be the only captain in Cricketing universe to win World Cup 3 times. He has done it twice and is in the rarefied company of Clive Llyod of West Indies who won the first two cups. No other captain has been so lucky to win the world cup twice. His predecessors Border and Waugh have brought glory once each to Australia and that is where Ponting success, performance and legacy stands over and above both of them. Question is whether he would want to go repeating for the third time. But the truth is even if ACB were to allow Ponting to remain Australian Captain for World Cup, teams like England, India, S. Africa are much stronger than any Australian team at present and chances of Ponting pulling of any miracles to defend his title are slim. Obvious is the fact though that Ponting's contributions to Australia's World Cup dominance are immeasurable no matter what happens in 2011 World Cup.

Loss of Ashes, or inability to win Ashes in last 3 attempts cannot diminish what this man has achieved on the field. This one failure or disappointing circumstances in which Ponting has to depart Test Team, do not make him any smaller. It is just that he had had already attained his place in Parthenon of Cricket and he had the willingness to embrace defeats after all these achievements in pursuit of the core significance of Cricket and Sports in general - to keep playing and to keep trying.

Tuesday, December 28, 2010

England Retains Ashes

This is one heck of series dominance by English Team on Australian grounds - two test wins, each with an inning to spare! The second win in the 4th Test is actually the win by 2 innings because even after Australia played 2 innings it was behind by 157 runs, probably enough to bowl Australians completely one more time given the dominance of English bowlers. Amazing feat. It reminds kind of dominance Clive Lloyd's West Indies Team used to show in 80s; by far the greatest Test Cricketing Team in last 40 years (anyways that is the Gold Standard I use to measure any Test Cricketing Team). Andrew Strauss and his English Team have attained some dizzying heights of Test Cricket here; taking himself to the ranks of great English Captains like Tony Greg, Mike Brearley and Michael Vaughan in recent times. Really commanding performance.

(Looks like meanwhile the number one Test Cricketing Team - India - is on way to salvage some reputation in the second Test Match against South Africa.

- Indeed Indian Test Cricket Team redeems itself and assets why it is billed the number One Test Cricketing Team. Well deserved win by Indian Team, hopefully we will continue to see exciting Cricket in the last match as well.)

Monday, December 27, 2010

Numbered Days of Democratic Israel?

In one of the rare 'all revealed' posts of Jeffrey Goldberg, he concedes what most observers have been saying - unless Israel either stops expansion in West Bank or grant equal citizen rights to Arabs; Israeli Democracy is heading towards a tragic end. I thought it will be a birth of new apartheid regime of 21st century. But Goldberg is suggesting even more sinister possibility - substantial number of Arabs would head towards courts to demand their citizen rights and Goldberg did not say what courts would do.

Imagine courts reject rights of these citizens on some pretext and admonish these Arabs to go Jordon. Technically Israeli would turn the problem of Arab population simply into illegal immigrants (of direct descend or indirect by birth in most cases) who need to go back to Jordon and Israel may avoid apartheid formally. But do we need anyone to tell us that such a scenario means basically ending any possibility of peace, making violence inevitable?

On the other hand if Israeli court holds citizen rights of Arab population; the government occupied by hard liners would officially enter into endless legal wrangling along with consequent violence. This means, we are headed towards a disaster. Does this sound like Neville Chamberlain appeasement pattern of Middle-East variation - the whole world knowing very well that things are heading towards disaster, is unable to stop it?

Disaster, that is where we are going and there is no stoppage here. With Republican Politicians like Eric Cantor trying to usurp duties of Commander-in-Chief; America is simple helping to nourish this disaster and in the end will be a responsible party to the ensuing tragedy.

Sunday, December 26, 2010

Ashes and India in S. Africa

I missed the enthralling counter punch by Australia on WACA Perth which essentially salvaged the captaincy of Rick Pointing for now. English were simply out matched when it came to a very bouncy, fast paced wicket of Perth. One only has to hear Boycott's praise of Mr. Cricket, what made the difference there.

Like English Team, Indians were at sea on the bouncy fast paced wicket at Centurion in South Africa. Master batsman Sachin Tendulkar's 50th Test Century was definitely an occasion to cherish and celebrate, but it did not change the age old perception about the Indian Team - never able to overcome convincingly bouncy, fast paced wicket; especially in the first test match.

Meanwhile it looks like in the 4th Test, English Team has recovered solidly. To bowl Australia for a total in two digits on their home turf, that is out of this world. It is understandable why Australians think that as unprecedented humiliation. (It reminds 'that' wound on Eden Garden when Malcom Marshal & Holding of West Indies shattered Indians for the total of 90.) True, it shows Rick Pointing's team can be as weak as the weakest of Australian Teams ever been. This Pointing Team reminds early weak teams of Alan Border. But 6 catches by the wicket keeper Prior in one inning means English pace bowlers are on roll. One cannot wait to see England racks one more time over 500 runs in an inning, tightens the nose around Australia and makes the history. There after the question will be whether Australian Cricket Board (ACB) allows Pointing the honor of completing the final Test of Ashes or his own injury becomes an excuse to relieve ACB of the hard act of sacking Pointing. There is no doubt now that ACB has to start executing plans of post-Pointing Australian Team with urgency. This will be regardless of what happens in the second inning of the 4th Test unless Pointing makes a double century to carry single handedly the whole match which seems unlikely given his injuries and totally demoralized state of Australian Team.

Meanwhile, gasping of Indian Team continues in the second Test too. Nothing unusual, it is in keeping with the reputation of Indian Team - tigers at home lambs in foreign land. One hopes they are able to raise their game commensurate to their billing as number one Test Match Team to salvage some reputation and to make some interesting Test Cricket.

Black Swan

(Spoiler alert, may want to skip the post if you prefer to watch the movie without any preconceived ideas.)


If you want to achieve the transcendental level of mastery and artistry in Ballet, you have to go sexually wild to 'loosen up'. And if the ballerina is unprepared for this nerve wrecking path, she cracks and falls into the tragedy. That is what the director Darren Aronofsky seems like saying despite his forceful efforts to zero down on the psycho drama of the script.

Being not the industry insider, I am not aware of Ballet Professionals or Ballet Companies coming out in unison and saying that 'sexual wildness' is not a precondition to achieve the ultimate level in their art form - not a particularly flattering description of the profession. May be they have done that or may be not. Chances of Ballet Professionals and Ballet Industry not protesting the movie are there because this film brings the glamor with its commercial success, precious media coverage and 'false prestige' to the profession. In using the 'allegory format' where subject of story telling is fused with the vehicle of story (Swan Lake), the directory takes us to darker sides of Ballet Profession and Tchaikovsky's Swan Lake; but not in any realist way, instead in more exploitative ways.

The director is essentially trying to earn greatness in the art of film making by trashing another equally great art form of ballet dancing. Is that kosher? It can be as long as it is convincing. However, to me at least it failed to be a convincing argument for a simple reason that the director has assumed naivety of the protagonist dancer to a fault. You do not reach levels of winning the lead role of 'queen swan' while being so far away from reality and living in a cocoon. It is hard to believe that a professional ballet dancer would go on a binge trip of sex and drugs a night before the first performance on stage in lead role. Do such 'unripe' dancers work in these Ballet companies? Too much film making liberty in running away from reality. In the world of Darren Aronofsky's New York, laws of preventing work place 'abuse' are absent, domestic violence is easily occurring and old men traveling subway are sexually pervert.

Of course, trashing Ballet Dancing for great Film Making is the problem of Aronofsky; it is not of Natalie Portman. With gusto and guilt free mind, she has rendered a superlative performance; quite possibly all the way to Oscar. Equally fascinating and competent performances are cut for the roles of Company Art Director, dancer's mother and her rival dancer. That is where the film earns its respect - excellent performances and good execution.

Some of my favorite shots of the films are when Nina (Natalie Portman) is telling her mother the news of her selection in the lead role or when another senior dance instructor demonstrating intricacies of hand waving with her back to the camera where extraordinary details of back shoulder muscles of the instructor are revealed, most possibly acquired after decades of practice and discipline. But for these gems and attempts of the directory to make something good out of well worn cliches (a dancer from San Francisco portrayed as 'easy' on drugs and sex as if everything is squeaky clean in rest of America); the movie is worth watching once provided one is ready not to subject the art of film making for 'no other art form cannibalism' criteria.

Thursday, December 23, 2010

New START for Obama?

Rarely a president can go on a well deserved vacation with so much fulfillment and feeling of achievement. In the lame duck Congress session – little over 3 weeks in all – President Barack Obama has racked in:

- Tax Cut deal

- DADT repeal

- START Treaty

- Food Safety Bill

- 9/11 Responder Bill

at the cost of DREAM Act and abandoned appropriation bills. Credit for the last achievement goes to New York Congressional Delegation, especially the New York Senators Gillibrand and Schumer.

This is on top of what President Obama and 111th Dem majority Congress achieved in last two years:

- Stimulus bill

- Stress test and saving Banks in USA
(by Fed, Obama Administration & TARP from 110th Congress)

- Bailing out successfully Automobile Industry in USA
(by Obama Administration & TARP)

- Frank-Dodd Financial Regulation Act and

- Mother of all - Obama Care Health Act.

When Sen. Kyle declared his opposition to the START Treaty immediately after the Nov 2010 elections, I thought START would not pass. But looks like President Obama’s political skill did the trick including a way of buying Senators. Who would not see the connection between Tennessee based Oak Ridge National Lab getting more funding via New START Treaty to create or retain jobs in Tennessee and the last minute backing of Tennessee Senator Alexander Lamar? Anyways, rare is an occasion when one is happy to be proven wrong.

President Obama will be able to continue this streak of victories in 112th Congress if he understands that next few years of his presidency are more of ‘care taking presidency’ rather than ‘activist presidency’. He is wise enough to know that ‘care taking presidency’ can be equally good and effective for American People and that is all matters in the end.

Compared to totally gridlocked Indian Parliament or incapable European Leaders to agree for anything substantive; the performance of American Politicians is indeed impressive and that can be the new start for Obama.

Tuesday, December 21, 2010

Sino-American Deterrence

As the news of Chinese plans to build and commission a home grown aircraft carrier spreads, the talk about crystallization of Sino-American Strategic rivalry along the lines of Soviet-USA deterrence is back. Every great geopolitical rivalry of global nature has it's own dialect. With Soviets the dialect consisted of Nukes, ICBM, aircraft carrier, space age competition and Olympic boycotts. China has been smart enough so far not to get overly engaged in those fights of past directly; not only because overwhelming effectiveness of USA has been well established in many of those fields, but those areas were of much less core usefulness from Chinese point of view.

In Beijing Olympics Chinese did grab highest Gold Medals but were kind of pleased to see USA to retain the overall Medal count as symbolism of 'gracious hosts'. It is not just Olympics where the rivalry between China and USA is played in a different manner than the past era, nor it is just restricted to competitive courting of India by both USA and China. (Though the style of courting India revealed differences - President Obama undertook non-hyphenated, exclusive India trip by underscoring alignment of mutual interests in combating Terrorism by visiting Mumbai first whereas Chinese PM Wen Jiabao promptly followed a hyphenating visit to Pakistan after stirring the pot in India.)

Unlike Soviet-USA rivalry which was a classic geopolitical tussle to increase territorial influence along competing Political Ideologies; at heart the core game of China-USA dominance is played out on the economic field; at least so far. With basic 'de-coupling' of Chinese Economy from Western economies, effective refutation of American pressure to revalue Yuan, emphatic deployment of a strong stimulus to battle global recession and clear bouncing back of Chinese Economy; China has clearly established it's upper hand in this rivalry so far. China is still on course to surpass USA as the largest economy at around 2025. It is only now that USA kind of getting it's act together economically after two years of deep recession. Though USA Political Economy is still not showing clarity in answering effectively ascend of Chinese Economy; one can say USA is on way at least to stop further deterioration of its global economic influence.

With Euro and EU continuing their troubles, the talk of Euro replacing Dollar has vanished. What it also means, as American Economy gathers steam next year, Europe will continue to be mired in its existential threats. Overall in the field of Finance, despite mortal blows, American Banks and Capital Markets will continue their recovery in catching up with the Chinese Financial juggernaut.

In the case of Space Exploration, again China is continuing it's march and with total confusion on American side as far as how NASA should adopt to the post-shuttle era; things are along the familiar lines - China winning the stakes. However, one Elon Musk Technological and Entrepreneurial breakthrough is enough to bring back America into the race. To understand the significance of what Musk has achieved, compare India's lack luster DRDO program to make long range rockets. Indian Defense Establishment has been trying this now for around 4 decades with army of thousands of engineers working years and years at enormous cost to Indian Tax Payers. (Don't even talk about the opportunity cost of diverting money to DRDO from many other pressing needs in India.) That DRDO is barely able to make a long range Rocket whereas a privately funded company of 1200 employees started by an immigrant at the age of 39 years delivers such long range rockets within few years. Even mighty Boeing and Lockheed Martin are not daring where this private company is going. Obviously we not referring here to much celebrated entrepreneurial success of Elon Musk which he clearly deserves; but we are talking here fundamental advantages of American Political Economy to exploit ingenuity of private efforts in such efficient manners. If Chinese has the usual advantages of dictatorial Political Economy; American system equally has superlative mechanics to harness power of private efforts and immigrants in equal parts. That is why it is clear that notwithstanding the royal hash Congress has done of NASA's future direction; enough vitality is present, alive and kicking in American Space Industry to answer any Chinese challenges.

Given all this, many on Conservative side even speculated that it will not be long before China starts taking its aim at America's last bastion of power - it's armed forces, it's Navy and it's Military Technology capabilities. The geopolitical context of Chinese power is dominance on land as it is one of the biggest land masses in the heartland of Asia with number of land locked countries surrounding it whereas context of USA is projecting military capabilities over surrounding oceans. As some observers would describe this as a bit of skewed competition - one focusing on land whereas the other on water. However, with Chinese Economy so crucially dependent on raw materials reaching to it's shores from oceans, things change for China. The need to protect resource supply lines, to protect sea lines to secure passage of exporting goods as well as to claim new sources of resources (South China Sea disputes with other Asian nations); all that is what propelling China to go for Aircraft Carrier Naval capabilities.

Fearing all these Chinese Naval capabilities, Conservatives in USA have been deriding the so called decline of American Naval Power for some time now. One such study which made waves was by Commander James Kraska published for Foreign Policy Research Institute in 2009 where he rendered a war game scenario in which he argued bloated aircraft carrier laden bulky American Navy receiving thrashing by Chinese Navy based on submarines and missiles. Notably his argument China did not require Aircraft Carrier to defeat USA. Such arguments were sufficient for American Conservatives to cry wolf and criticize Democratic Administration of Obama. Then, why is today China opting for an 'aircraft carrier based' naval approach?

Part of the answer could be - in the end American emphasis on aircraft carrier based naval power projection is after all still relevant in today's world. But this also means China kind of abandoning a strategic approach different than USA and giving up on bringing forth any 'disruptive technology or naval warfare'. So when Chinese power projection resigns to American ways of doing things on seas; it gets reduced to 'catching up' game and things indeed do not look any brighter there for China when USA practically operates more than half of world's naval force and has more aircraft carriers than all other nations combined. One is not arguing that an aircraft carrier would not be useful to China in securing it's oceanic vital trade; but what it means is Conservative arguments about American Naval decline ring hollow.

All in all that is where the Sino-American deterrence stands - Americans are by and large are on way to retain their advantages while needing to beef up their act when it comes to economy.

Update - I alluded to India's Space Program only through DRDO, but ISRO is the actual civilian arm of Indian Government which is primarily focused on developing rocket technology which generally DRDO consumes for weaponization. As mentioned in the post, India's pursuit of Rocket Technology is not going well and this particular setback to an ISRO launch vindicates that.

Saturday, December 18, 2010

Andrew's President Delivers

DADT is waiting for President Obama to sign. President's Politics is clear and delivering what Andrew Sullivan, countless other activists and above all the actual gay and lesbian soldiers wanted so long. Here are Andrew's money quotes:

"It means, as it did for the first black soldiers who fought for the union, that this country is truly theirs' for the first time - because they have finally been allowed to fight and die for it without lying about who they are."

"This, in the end, was not about the right to be gay, but the right to serve America. Like all great civil rights movements, it is in the end about giving, not taking."

"What the gay rights movement should, in my view, be about is not the the [sic] creation of a separate, protected class of victims. It should be about enlarging the circle of human freedom so that there are no excuses left, no classes of pre-ordained victims, just individual citizens living different lives with no group-based discrimination."

-- Andrew Sullivan, The Daily Dish

Tax Cut Deal, DADT and possibly START; it is Merry Christmas at the end of 111th Congress which is what this President is delivering. Setbacks on DREAM and Dem Budget - those are the sacrifices, for now.

Friday, December 17, 2010


Barack Obama is having hard time to make sense of his war in Afghanistan. He may be right when he says sacrifice by American Soldiers is still making sense.

Who knows? But what one wishes is Afghans like the taste of freedom which is manifest in this beautiful song. In the end most probably success of Barack Obama's and America's Afghan campaign will be measured by the extent of Bollywood & Cricket absorption in that war and corruption raven country.

A young Afghan woman singing fearlessly a Bollywood popular romantic song - what better symbol there can be of Taliban defeat? To be sure I do not know where exactly and when this song is sung and who is the singer. It is quite possible I am over reading in all this symbolism, but I could not resist.

Decisive Difference

That is what one can note when USA Politicians get their act together whereas European faltering continues. That is the difference between United States of America and some ramshackle political union called European Union.

True, it is deficit increasing Tax Cuts which is what Americans agreed among themselves whereas Europeans are fighting over austerity measures and who pays the bill of the wild party so far. Nevertheless, the stimulant effect of Obama Tax Cuts cannot be ignored whereas 'economy derailing impact' of European fracas cannot be ignored. Come next year and these traders who are busy planning Christmas and Year End Party will be awake starting the usual game of 'shorting European Bonds'. It will be 2010 saga as is in 2011.

Tuesday, December 14, 2010

Mr. Long Game goes to UN

If this is what this non-conventional President is following, all good wishes to him and that is one heck of a poker game Obama & Hillary are playing. When does Mr. Long Game reach UN? I suppose it will be immediately after the start of the Second Presidential Term in 2013. Till then, keep walking.

Sunday, December 12, 2010

Delusional Indian Pundits

Looks like so many pundits in India are falling for Assange as the liberator of humanity (here and here). I guess the old Leftist fetish die hard - anytime anything bad happens to USA these dudes will be happy. It would have been very interesting to see how these pundits would react if any of these Assange files would have breached India's national security secrets or would have portrayed Indian Leaders in compromised position.

These same Indians would argue that whatever historical assets are there in British Museums which landed up during British Raj time were all ill-gotten, essentially stolen. Now with information, once it is stolen and published; it cannot be returned. What were historically precious artifacts to 20th century; state business information is to 21st century. One would expect contemporary Indian pundits, where Economy so crucially depends on Information Technology and Data Processing, would have basic respect for 'ownership of information'. So there cannot be any justification for 'stealing' of the information and that is what Assange supports. A lowly soldier in American Military on duty to State Department stole the information and Assange published that without any scruple - that is the reality. Any Publisher which publishes such information is supporting such stealing and NYT is no exception to that.

The difference between investigative journalism / whistle blowing reporting and Assange is he is refusing to subject himself to any national laws or international treaties. There is very little difference in that sense between Assange and Bin Laden - both wants to blow up national and international system and do not want to submit to consequent accountability. States may appear to be above accountability, however not only there are elections to throw away those who commit crime while conducting state affairs but also there are international systems to deal with cross border transactions. Events of last few years and Barack Obama Presidency in particular clearly show that USA cannot be above these international norms nor does it intend to bypass these standards. So stealing standard diplomatic transactions while people are conducting affairs of state cannot be justified for the sake of sensationalism, media exploitation and blowing up already fragile system of international accountability. It is pathetic to see so many Liberal Pundits and America Haters attempt to draw 'moral' lessons out of a 'small' guy who cannot even control his libido and is ready to engage anytime some unknown person is willing to participate in those acts.

Whether Assange is traitor or not is irrelevant. Fact is he is the conduit of stolen information, not ready to subject himself to any laws and system and in general simply following the politics of nihilism - just blow whatever existing power structure is. There are no good examples in human history where such Nihilism has produced anything good.

Update - Assange says Pentagon prosecution is imminent. What does he think Americans tax themselves to fund some impotent soldiers or what?

Wednesday, December 08, 2010

Reaching to Moon?

Well, to be precise reaching to lower orbits, but by Private means....

WSJ and James Fallows are right to highlight this brilliant triumph of Elon Musk.

What is happening in Socialist America of Obama - tax cut deal, Citi winding down Uncle Sam investment with hefty profit, AIG on the way to repeat and now comes a genuine success of private sector ingenuity and perseverance? (Update - Add to it the reignited culture of giving... that is powerful. No wonder Bill Miller is so bullish.)

Rush, Drudge Report; any clues?

Meanwhile let America devour Falcon 9 and dream about reaching to Moon again...

Tuesday, December 07, 2010

Obama Tax Cut Deal

Months back when White House helped to engineer Democratic Congress to post-pone the Tax Cut debate after election; was it 'all part of the plan' as Special Agent Oso would say? Was that tactic a clear acknowledgment of political reality that:
- original stimulus was short,
- but Administration was unlikely to get any other opportunity to pass more stimulus regardless of GOP control of Congress because of already moved Public Opinion,
- as a result most what White House can do is to try hold on existing stimulus measures and
- the best opportunity to get that is trade 'tax cuts for rich'?
It is hard to read any such sophistication with conviction in the Obama play when all this can be nothing but attempts to make 'lemonade out of lemons' of botched Tax Cut Politics.

If one accepts primacy of stimulus in the current environment considering continued weakness in Economy, Europe dangers and expert opinions, it may appear as though Pete Rouse is presiding on a political accomplishment. No doubt his footprints are visible in 'cool handling' of this whole affair considering how deep White House had boxed itself. But clearly this is a plan, if it is a conscious plan, which must been hatched months back earlier. Who knows this may be the parting gift of now retiring NEC Chief Larry Summers. If so, Larry is about to take considerable flack from Krugman and Left Base for filling in the stimulus gap in this manner; the stimulus gap for which Krugman himself has been pounding the table so long. To be sure, Tax Cuts in general and Tax Cuts for Rich are stimulative but with least multiplier effect. But after the shellacking in 2010, Obama does not have luxury here for kind of stimulus he can offer, he has to do with whatever is available.

Even if one credits Obama and White House for turning Bush Tax Cuts into mini-stimulus; fact remains that it is coming at the risk of cutting back longer term entitlements. The cost of all this package is surely going to set in stone the coming compromise on Social Security. That seems to be the most logical play for Republicans as decreased revenue collection would expose further uncontrolled entitlements of Fed. It is bad in the sense that it brings focus to Social Security whereas the focus needs to be on medical costs. Unfortunately, repealing ObamaCare and by that to remove whatever smaller cost controls Obama tried to put in place, it is a wrong play Republicans are hooked to.

As far as Market liking this deal - I regard on most occasions Market favors short term gains versus any longer term view. So traders and Wall Street employees getting their cherished Bush Tax Cuts mean Market will rejoice. Whether that rejoicing is coupled for the longer term vibes of more co-operation between two political parties; I am not sure. This is simply because I cannot be hopeful here that Obama and GOP will be working together further on many more hard nut problems. Jury is out on that.

Bottom line - a case can be made that Obama did not 'lose' this battle entirely (and has kept the powder dry for 2012 when he expects strengthened Economy would offer him a strong hand to expire Bush Tax Cuts for rich). His Left Base is unlikely to buy into this, but 2 years is a long period for Obama to turn around his Base.

Monday, December 06, 2010

Ashes - Down Under Down

Defeat by an inning and 71 runs - that is Test Match Victory!

"...Andrew Strauss and his men will retain the Ashes unless Australia can win at least two of the remaining three Tests, a monumental task given that they have now gone five Tests without tasting victory..."

-- Cricinfo

That is what happens when you play Test Matches with weak bowling compartment. In the end Test Match is all about 20 wickets and there are no miracles without those hardworking bowlers.....

Sunday, December 05, 2010

Ashes - Four for 551

"Pietersen was in virtuoso form, clubbing 31 fours and jumping down the wicket to launch a six off the hapless spinner Xavier Doherty in his chanceless knock.

Cook's occupation of the crease earlier ended on 148 in the 97th over when he inside edged paceman Ryan Harris to wicketkeeper Brad Haddin. The Adelaide crowd rose to their feet to cheer Cook from the field after his 15th Test century and third against Australia. Cook has now scored 450 runs in the series for two dismissals at an extraordinary average of 225. The Essex left-hander has now occupied the crease for almost 22-and-a-half hours and faced 865 balls in the series.

Dominant England have now amassed 1,068 runs in their last two innings of the series for the loss of just five wickets."

-- Times of India

Oh boy, indeed this Christmas Down Under for this English Team is looking like a blast in summer. This also reminds how critical Glenn McGrath and Shane Warne were for the countless Aussie wins in Ashes. Clearly Australia simply does not have any Test Class Bowlers at present.

Saturday, December 04, 2010

Let Thousand Flowers Bloom

Rabbi Michael Lerner has a point, a challenge from Left to Obama would restore some political balance. One name he did not mention in his list was of Paul Krugman. It will be interesting to see one Nobel Lauret pitted against another one making the field fully open for Sarah Pallin to cast Left-Democratic field as nothing but 'elitist' contest compared to authentic force of 'no nothing Tea Party' represented by her majesty Queen Bee Sarah Palin herself. And just to complete the spectrum let us throw in couple of Center-Right and establishment GOP candidates like Mitch Daniels or Bloomberg and Mitt Romeny.

Americans would get a full menu of political choices in such 2012 primary/presidential election. The campaign would be totally divisive and cacophony of policy prescriptions, giving an impression that things are unhinging compared to orderly politics of two parties so far. May be such a chaotic political campaign would shake up this country from the slumber into which it has gone. Because today, Americans do not have agreement in terms of how to solve their monumental problems. Our politics has reached unbelievable, bizarre level where while deficit cutting proposals are issued for a dime in Washington DC; back room negotiations to increase short term and long term deficits are hatched. Our President runs away from a real political battlefield and grim unemployment numbers for a political 'feel good' ritual in a far away battlefield where he does not have any gumption to bring an order on a totally wild battle; the battle which has its own life and not responding to any steering from Washington. Really Washington and American Politics is cutting truly a surreal picture because underlying political wishes of citizens have not been reconciled to make necessary compromises. An election where candidates campaign for major strands of political choices would help crystallize people's choices, their own accountability and responsibility. The winner from this context would have clearly identifiable 'coalition partners' to forge post-election compromises. Today in the two party system and an awkward President who is reluctant to take the leadership of his caucus in Congress; we have a haphazard process of compromises resulting in 'sale out' for true backers of a leader. In other words, such clear contest would help to 'cleanse' the broken American Political Process so as Americans are better geared to digest necessary compromises to overcome our mountain of problems.

It is possible that no one is going to invest financially and politically in such grass root efforts just to loose in Primary and may even insist on getting the candidate's name on the final ballot, albeit a separate party candidate. With the example of electoral success and political clout of Tea Party; Americans have tested the blood and may not settle for bland two political party system. They may no longer be ready to wait late in the campaign season when leaders of established political parties wake up to throw few incoherent red meat pieces to curry the favor.

There is a smell of rebellion in the air, question is will few souls rise here to pick up the gauntlet to clear the fog. Protracted cesarean/truly excruciating divorce between Left and Obama is reaching final stages whereas there is a calm before the storm on GOP side where Tea Party members are yet to wake up for the rude 'sale out', referred fondly as 'governance' in Washington DC. These are the times when we need our politics to break out.

Friday, December 03, 2010

Away From Real Battlefield

Firedoglake explains it best why President runs away from Washington to visit a far away battlefield. Inability to get their act together in full display, the nervous breakdown of Democrats is complete. Republicans have truly won the 2010 election as vanquishing of the opponent is complete now.

This shall pass too and American Progressivism will learn to live beyond the 'great capitulation reign of Boy Pharaoh Barack Obama'.

Monday, November 29, 2010

Federal Pay Freeze

I don't know about other demands of Tea Party, but I think Obama is right politically to concede this pay freeze demand. Routinely in Silicon Valley competent engineers have seen pay freeze and in many cases pay cuts too, for last 2 or 3 years. Taxes of these engineers and so many unemployed are supporting government employees. So what is wrong if they contribute to deficit reduction? We all know this is not going to solve the deficit problem. But it is the question of showing that Obama is not beholden to any partisan concerns like always increasing salaries of government employees no matter how rest of the country is doing.

Generally it is not easy to disagree with Bernstein, the classy blogger; but I would say emphatically that this is a good politics and a right move for the nation. I would not support indiscriminate lay-offs of government employees because not only it brings misery to the person losing the job; collectively we all go down by decreased purchasing power. Even hiring freeze is fine too. Goal should be to protect jobs of those who are already working albeit with compromises on part of these employees. For Federal Government, there does not seem to be a problem of pension of these employees as like State employees and that is good. Otherwise more cost cutting would be needed there too.

New Jersey Governor Christie has got it right here - private sector unemployed person pays taxes which should not be used to give increments to government employees.

As far as good people leaving Federal Government, that danger is real. But right now so many competent people are in the job market, it should not be hard to find replacement.

All in all good politics here by President.

Ashes - 500 for 1

“One for 500 is a pretty demanding scorecard, isn’t it,” Ponting said.

That too in the second inning of the team and third inning of the test match. Looks like the pitch was really bad for bowlers. Let us see whether next matches get any better pitches or not.

Sunday, November 28, 2010

Obama Administration and Economic History

Brad DeLong has a classic Keynesian critique of Obama Administration. This one is for an instant classic. Another one is an equally brilliant take by Paul Krugman about Dark Ages on Macro-economics. Together these two presentations commemorate an important milestone in the intellectual history of this country. Simply brilliant and must read.

Saturday, November 27, 2010

Black Friday

I think those watching American Holiday Shopping Season are likely to see much better Black Friday, based on my anecdotal experience; needless to say unscientific observations of a blogger. Question is whether American Economy builds on this perceived solid holiday shopping. Chances are good, though nothing is given.

All this and continued weakness in Europe mean a decent recovery for Dollar. One just wonders whether all these signs of 'traction / sustainable growth' in American Economy may append Bernanke Program of QE2. If so, politically it will be interesting - even though Paul Ryan's of the world are correct (Fed should not go for QE2, economy will come on its own), in the end improved economy will benefit Obama.

On the other hand if non of this pan outs, the worm would not have turned and the story of 2010 will continue - slog months of building recovery unless of course Europe does not disturb this apple cart too much in which case we will be back to square one.

Update - Looks like indeed my observations were unscientific as numbers are not that impressive. Seems like things are still improving gradually rather than in leaps and bounds.

Friday, November 26, 2010

Krugman Trapped?

The forceful argument which Paul Krugman does here to argue the case of Ireland People against Banks is the exact kind of argument Tea Party has against TARP regardless of its success. Krugman has to have both political and economic arguments to indicate why TARP was justified in American context and why did it succeed whereas what problems he sees with the Ireland bailouts. In absence of that Krugman's Ireland argument remains baffling.

Few pointers for any such justification of TARP are:

1. Currency - While USA has full sovereign currency, Ireland is stuck with Euro which primarily serves German Economy, typically at the cost of all other peripheral, small economies. Of course in the case of Dollar, being a reserve currency it is not such a free ride for USA as last few years have shown that in times of economic distress 'flight to safety' continues to keep Dollar overvalued. China's currency manipulation further erodes this advantage for USA.

2. Size of Economy - I suspect that is one more reason why things were different in case of USA. TARP layout was commensurate with the size of American Economy which is still the largest in the world and quite diversified with global competitive advantage intact in many industries.

3. Geithner Stress Test - European copy cat Bank Stress Tests have been already exposed by failure of Ireland Banks. The European Financial Bureaucrats, ECB and its brethren, simply did not have the political acumen and strength to pull off this affair. ECB and EC are still beholden to nationalistic pressures, still hesitant to offend any national economies instead of having clarity to steer through all these contradictory national pressures to convince the market. Geithner / Summers pulled off one of the most high wire acts of Public Finance in many many years; Americans are beneficiary of that whereas when Europe attempted to pull that off, it failed miserably.

4. Stimulus - It is no small reason that along with TARP, Obama pushed his stimulus to kick start the economy. That was the Fiscal component of the medicine for the 2008 Great Recession. Yes, as Krugman argues it was insufficient and political ham handling by White House (committing specific unemployment percentage at 8% as payoff the stimulus) compounded the politics of any such fiscal remedies. But the fact is that stimulus nevertheless helped to keep moving American Economy forward which in conjunction with TARP helped USA to avoid Ireland kind of situation. On European soil, with Germany firmly against any such committed stimulus; there never were so emphatic efforts on fiscal side.

These are few of the aspects what this blogger could think off. But clearly it is for public intellectuals like Krugman to argue for a coherent case of why American Bailout was relevant. True, Krugman advocated Bank Nationalization instead of TARP so he can argue that it will be the job of Geithner and Summers to put forward the case here. But let us try to understand the politics here - in absence of any cogent argument in support of TARP and Stimulus; Obama and Dems are going to be with these millstones until their political decimation is complete. For Americans, improving economy will be the only pardoning of Obama, Dems and their discredited bailout politics; which for a surprise may happen after all.

Thursday, November 25, 2010

Korean Knot

It is a very disappointing article by B.R. Myers because it hardly tells what options USA has in this case. Of course it is better than this latest Palin Pearl; but hardly useful. Also it is hard for me to agree with my blogger friend Raymond Turney's assertion that China is using North Korea fully to expose limits of American Military Power. Obviously China would love to expose limits of American Military but China knows that ridding a difficult to control tiger for short term gains is not a longer term strategy when China herself has difficulties in containing recalcitrant North Korea in the first place.

Generally it is held by most analysts that USA-South Korea Alliance will prevail in the end when an actual Korean War starts. But the problem is thousands of artillery guns pointing to Seoul, proximity of South Korean Capital to the danger zone and ability of North Korea to deliver nuke bombs (supposed to be around 10) on South Korea and potentially Japan. What can USA do about it? Is it not in the end call of South Korea to indicate that it is willing to take the pounding and potentially Japan also? Only when South Korea is finally ready for all these possibilities of catastrophes that USA can open the fire in DMZ.

Next Korean War will not be where USA will have to necessarily commit large number of boots on the ground. It is unlike Iraq and Afghanistan where 'occupation and nation building' have been the objective. That job will be done by South Korea here. The only possibility of requiring large number of American soldiers on the ground will be when China starts taking part blatantly in this Korean War. That will be repeat of last Korean War. Now the question is how far China will go in committing PLA for this war. Refugees from North Korea is China's immediate issue. Second, strategic objective for China is not to have American presence next to it's border, even though Americans are already there in South Korea. If there is some understanding for that among China, USA and South Korea - though a diplomatic uphill - there is a possibility that China may be restrictive in this fight while USA and South Korea are attempting to neuter North. Very clearly American strategy for any future Korean War will be total 'air power war' like Powell's Gulf War. The goal will be to minimize the damage on South side by trying to take out North Korea fire power as early as possible. The qualitatively improved 'air power edge' compared to America's earlier engagement on Koreas Peninsula; is the real key for minimizing America's presence on the ground.

But China needs to buy this. It is not like 1950s when immediately after the glow of WW II victories USA could think about taking on China as just another belligerent. Today USA simply cannot pull off that. All this means, there needs to be clear understanding among China, South Korea and USA about what happens after the war concludes (assuming that South Korea and Japan are ready for all the heavy and potentially catastrophic price of a nuclear attack) - how the division of North Korean Territory would work. Giving some pieces of land to China along with some population (meaning South Korea's border moving up of 38th parallel as much as possible); that can be attractive to China. But when China is already global economic engine with 3rd largest land mass and highest population; what few million acres of land and few million people can attract her?

The third issue for China is partially united Korea - assuming some territory is permanently gobbled by China - will be a stronger competitor than present day South Korea. Equally for the same reason Japan would be reluctant to do all that. Similarly, Russia would support any such North Korean land barter only if it perceives that China's designs on its Far East Regions are lessened by all this arrangement.

Given all this, it is true that it is much easier for China to continue the current status quo as the Korean entangle will continue to be a thorn for Americans. But if as reported China has less control on North Korea, the possibility of North Korean stupidity and aggression crossing a line cannot be ruled out. In absence of such truly unacceptable incident; getting full understanding among China, Japan, Russia and South Korea about post-war arrangements is not easy. Neither America has the diplomatic clout to bring all these powers to a table and propose a solution acceptable to everyone and get the buy in from all; nor South Korea or Japan are anywhere near to accept the price of war with North Korea. Till then maintaining the status quo i.e. being fully committed to South Korea with full readiness of a war; is the only thing what America can do.

Wednesday, November 24, 2010

Nitish Kumar - India's Lula?

Now, that is Progressive Politics and emphatic electoral victory. Nitish Kumar has great potential to become India's Lula, he is delivering to masses where it matters most. (He is much more natural and better suited national leader for BJP/NDA than the other rival - Gujarat CM Narendra Modi.)

I was wondering, may be in a growth phase of Capitalism; it is easier for Socialist Politicians to move to Right and Center and deliver the goods. Lula has established that pattern firmly on global scale. Dr. Singh started the same in 1990s and of course China is there, though its politics is not changing. But in electoral democracies, it is becoming a recognizable pattern that Socialist Politicians are riding the Capitalism and as long as they do that in careful and prudent manner; electoral success is there. In case of Nitish Kumar, the true benefit is he is genuinely attempting to make his governance in more transparency. In a corruption ridden country like India, this has far more significance. Besides, with growing Economy; it is becoming easier to conduct politics beyond all caste calculations and Nitish Kumar is precisely practicing that. All in all very impressive and truly positive for India. Kudos to Nitish Kumar and best wishes for him to succeed in what a great work he is doing for Indian masses.

Monday, November 22, 2010

Conservatives from America

They know that Ireland poses an issue.

It is just that American People do not know that the policy of American Conservatives is nothing but to take away Obama years as soon as possible so that any 'state intervened successes' go away from the memory of America. What do you do when your 'dharma' is 'market forces' but reality is much more biting? You try to hide as much as possible which is what American Conservatives are up to.

There is no option today than bid for time until majority of Americans realize what is happening, especially when Obama has decided 'caving in' to demands of Paul Ryans of the world rather than to fight for principles of Paul Wellstones of the world.

Friday, November 19, 2010


"Time is of essence. Europe must give serious consideration to a wider range of approaches. It is in a good position to do so given the undeniable strength of core Euro-zone countries, anchored by a fiscally sound and economically robust Germany."

-- Mohamed A. El-Erian, CEO and co-CIO of PIMCO, Blog post on Reuters website.

I think a point clearly forgotten by people like El-Erian is what if Germany has vested interest in not exploring any other approaches? The logic is very simple - more weaker economies like Ireland and Greece in Europe; more is the underwriting of these weak economies by Germany and there by keeping the Euro weaker. Weaker Euro clearly translates into higher German Export which means better German Economy. Then why bother exploring other approaches? Just keep on pushing draconian methods down the throat of these weaker European economies along with few Euros thrown in the mix. For example, a competitive advantage Ireland had like lower Corporate Taxes which has been luring lot of companies to Ireland will be gone as a result of accepting German backed Euro terms (Versailles - I guess old habits die hard for Europeans). Why would not Germany like less competitive Ireland? Why would it not support harsh terms for Ireland and Greece for few more Euros?

The G20 coordination, for all the froth that is being said in public, is nothing but a 'currency devaluation tango of 3 currencies' - Germany playing Euro by keeping weaker economies on the Euro book, Fed undertaking QE2 and China not budging from fixed rate Yuan. Britain does not have much of an export sector left to benefit from weaker Pound. On the contrary stronger Pound is basically good for core Financial Industry competence of British Economy when around 25% of British GDP is tied to the Financial Sector in and around London. Japan is simply not in a position to bring around any international weight to keep Yen down. Ever since the Plaza Accord, Japanese Economy has been neutered effectively by overvalued Yen. (That Plaza Accord, apart from the fear of how a stagnant economy drove Soviets to ground, is another nightmare scenario Chinese Communist Party wants to avoid at any cost; meaning China will be loath to agree to currency accord in itself.) Brazil, Canada, Australia, India & South Korea are small individually to matter with their respective currencies in the global economy. So all in all it is a threesome tango of Dollar, Euro and Yuan devaluation at global level.

Euro provides a perfect cover for Germany to continue to grow it's already formidable economic power further; typically at the cost of many other weaker economies. The thing is even smart people are unable to read in between here. Bernanke seems to be one of the rare folks who is trying to retort Germany and China in the code language what they can understand.

Dr. Singh in Rough Waters?

In the event of Dr. Singh's resignation for the 'Raja Mess'; it could be Pranab Mukharjee who will be India's next Prime Minister. That is not a bad choice considering important State elections next year in West Bengal. He is well qualified, has well earned his place and has demonstrated political adroitness. However, all that is speculation. In the first place, I doubt the Raja case would develop to a point where Dr. Singh needs to resign.

Failure to act upon quickly on a plea to prosecute Minister Raja after explosive CAG Report - well, let us face it; can it be a serious breach of law? Raja has resigned and he can very well be prosecuted going forward. Prime Minister's Office is always busy and apart from issues of national security; all other issues can be potentially delayed. Just because CAG said 'things have gone wrong' does not mean Prime Minister has to drop everything else what he is doing and immediately start prosecution of the alleged guilty. It is not like that Minister has been convicted and Prime Minister is needed to take the action right now. No mistake here, Minister Raja has quite possibly emblazoned money. Corruption has taken place here; but it is always the question of proving it in a court.

Point is, smart legal minds can indeed find lot of valid reasons why Prime Minister's Office was delayed in granting 'prosecution of a minister'.

Obviously, resignation of PM Dr. Singh, if it comes to that, will not be because of some such delay in a bureaucratic matter. If at all, it will be for the simple political reason of allowing the Raja mess on his watch. After making crusade against corruption by sacking Maharashtra Chief Minister Ashok Chavan for the Adarsh Society Scam and removal of Suresh Kalmadi for CWG corruption; it will not be easy for PM Dr. Singh to remain slow in the case of addressing corruption of ex-Minister Raja. The political narrative is very simple - Dr. Singh is simply a puppet who allows all sorts of corrupt practices in his Cabinet. Clearly, Sonia and Rahul Gandhi - the true powers in Congress - cannot face electorate with this impression. That is the danger and that will be the reason, if at all, for which Dr. Singh may have to go.

But Delhi is still far away and it is very much possible that Dr. Singh is able to ride this crisis instead of being a victim of it.

Tuesday, November 16, 2010

START Stopped Permanently

I was naive to expect that GOP would eventually support START. But with Sen. Kyl turning on this one, the fate is sealed now. Surprises are always possible, but those cannot be expected rationally.

I think consequences are going to be serious - hardly anyone would be interested to negotiate anything substantive with America. President Obama will be seriously crippled in his nuclear containment policy. Rest of the world now knows what 'bar' Obama cannot clear. Practically, any serious foreign policy victory requiring Senate vote is gone until Obama manages to get elected back; which does not look easy for now. Foreign policy areas where Obama can hope to make any difference will be those for which he does not need Senate approval; like Arab-Israel resolution or stabilizing Afghanistan. Even there as well, it is questionable why would anyone listen to a so crippled leader.

I guess it must have been like this in American Political History all along - politics trumping national interests on so many occasions. Nevertheless, this is a breathtaking moment; not only harbinger of 'bad blood' which is going to spill in Washington DC in days to come (starting with snubbing of President for a meeting with Congressional Leaders), but fundamentally setting the devilish framework of American Politics for next two years.

Gridlock days - days to take America down by deeds of our own politicians - have arrived.

Saturday, November 13, 2010

Continued Political Insanity of Democrats

In democracy we are used to see losing political party to do stupid things in the aftermath of an electoral loss until it finds its grooves. But there is nothing compared to total communication and policy breakdown which President Obama and Democrats are showing in the context of Bush Tax Cuts for rich. What is going on? Jonathan Chait gives up when he says:

"....why the Democrats won't do the obvious thing. ...exhaustion and demoralization keeping them from thinking straight. That's the best explanation I can think of."

Indeed that seems to be the case. Otherwise David Axelrod would not have talked all that non-sense on Huffington Post.

Apart from inability to think straight, President Obama and his White House indeed have a communication problem. I mean it is bizarre that President has to reiterate his tax policy on a foreign soil in Seoul while collecting pieces in the aftermath of Korean Trade deal collapse. Where do we start - dazed by election losses to think clearly or communication failure or political ineptitude in not having worked out trade deal while allowing to raise expectations about the trade deal? (1) Anyone one reason or all? Really Obama Political Machine is looking more as a fumbling rookie, bunch of inexperienced people trying desperately to man a big ship on which they are completely out of their own league.

Coming back to the tax cut mess, my thinking is Obama knows that he does not have votes in Senate and Dems like Nelson of Nebraska, Joe Lieberman, all that gang is simply not on board. The solution for President Obama is to expose that non-sense and hypocrisy of these Senators. What will be the cost - these Senators will not come with him and GOP will have effective caucus in Senate. But seriously, how bad is that going to be? Is Harry Reid still not the majority leader not to allow anything senseless to come on the floor even if he is not able to bring anything positive? True, that means tax increases across the board until Congress caves in. But to who Public is going to blame for that? Congress or White House? If Barack Obama does not have any confidence of waging this basic Presidential Politics 101 battle in bringing Congress on mat, we have real serious problems here. Seems like Karl Rove is right - the guy simply does not have 'political smarts', nowhere near to Bill Clinton. Unless Americans see that this President is strong enough to take on political opposition to do what is right for America - reduced deficit in this context - there is going to be no respect to President Obama. The message of the last week election was not for Obama to join the 'looting of Uncle Sam by American Rich to exasperate already high deficit'; but to 'stand firm regardless of political ease to reduce ballooning deficit'. It is really inexplicable that the President who lamented to give in 'tax cuts' without negotiations with GOP in the Stimulus Act is giving all these wrong headed concessions even before the political negotiations start.(2) There is also equal lack of foresight in touting any significant 'middle path' of applying these tax cut funds to businesses in order to leverage employment generation.

It is no longer an issue of domestic politics but is a question of international credibility too. Cameron of UK and Merkel of Germany are to the Left of Obama when it comes to Tax Policy. China is planning new taxes to stop rampant housing boom. Compared to that here we have an American President who is simply caving into his political opposition to accept misguided tax cuts. Nothing but it enforces the image of American Political System as completely unable to rein in its budgetary deficit.

Rarely there is a sweet spot where both national interests and global economic interests converge (3) and this is the political sweet spot Obama and Democrats are simply wasting. Foreign Leaders and Public can read these leadership failures equally and will stop bothering about American President who cannot deliver anything. Seeds of more Korean trade bill like failures and further 'roughing of America in G20' are sowed by all these actions.

Update - With a headline picture alluring to 'Tank Man'; Frank Rich has a devastating critique of American System which is practically ruining this Republic because of its inability to get the tax policy right for super rich. Of course Eric Cantor, John Boehner and Mitch McConnell of the world would not bother to answer this criticism. The new refrain in American Politics is 'it is a free country so anyone can criticize politicians' and meanwhile these politicians are free not to answer any of that criticism. The only hope is few in Tea Party sense the 'political opportunity' here and start attacking the establishment GOP.

(1) " don’t send the president overseas to fail to get an agreement. Wasn’t anybody taking notes when he went to Denmark to fail to get the Olympics for Chicago?"
Gail Collins

(2) "Perhaps he should not have proposed tax breaks as part of his stimulus and instead “let the Republicans insist on the tax cuts” so it could be seen as a bipartisan compromise. "
Interview with NYT.

(3) “National responsibilities are conflicting with global responsibilities for both the U.S. and China. That is a real problem for the global economy.”
Mohamed El-Erian, the CEO of Pimco.

Thursday, November 11, 2010

Praise where it is due

Generally I do not get any opportunities to praise Charles Krauthammer, but here is one. He is no Prof. Drezner, but still it is good to read Charles making a relevant point emphatically.

But what about the American Power Lady?

As a British reporter said "you lose 65 seats, you resign. Period."

It is nonsensical for Pelosi to argue that it was not her leadership which cost those Dem seats, but the Economy and the Senate. A leader cannot go with that argument anywhere. With the position of House Speaker, the third ranking in USA Federal Government, she had a bully pulpit to argue a political vision. Faithful to her ideology (which was worst manifested when House passed fiscally irresponsible Health Care Bill which was thankfully turned down); she put a political vision and for right or wrong reasons that vision has been repudiated fully.

Job of a politician is to get reasonable popular support for his or her political vision. You do not say all the time 'I am going to prescribe Spinach only' with no willingness of Public to eat that Spinach. As President Obama is finding, to get that Public backing is not easy. In elections when you do not get that backing, you relinquish the leadership. Plain and simple.

Time for Nancy to move on.

Update - The other American Power Lady is however rocking with continued upward approval ratings.

Monday, November 08, 2010

Saturday, November 06, 2010

Beyond Shellacking

It is conventional wisdom in punditry that with a political gridlock - GOP majority in House coupled with Democratic majority in filibuster infested Senate - nothing worthwhile likely to pass in 112th Congress in next two years. There is a merit in this commonsensical observation, given that the scorched earth policy of saying NO to everything what Obama proposes has produced handsome dividends like 65+ seats in House for GOP. The gridlock will unfold by flurry of GOP House passed bills which GOP will claim as its attempt to repair America. GOP will blame Democratic Senate and President in turning down those highly partisan, ideological driven House Bills which are unlikely to solve any of America's problems. And so the blame game and vilification of Obama will continue in full speed. Democrats will tend to argue 'but what about the quality of those bills'? But that is not a passable argument with American People. The smarter approach here would be to publicly subject every legislation for two litmus tests - is it fiscally balanced / funded and whether it generates employment. Only when Dems and Obama start sounding very early, preferably before the flood of House bills, how these criteria are critical to evaluate every political and policy measure; American Public will understand how GOP House sponsored bills are nothing but pure political ploy.

The net result of all this posturing will be a drought of legislative measures to remedy America's multitude of problems. However, it need not be bad as Barack Obama is finally realizing that 'governance does not mean legislation only'. With his acknowledgment of failure of communication, 'selling the vision of America' becomes obvious vocation for President for the next two years. Practically it will be reenactment of what he did during 2007 and 2008 on campaign trail to win presidency. But this time it will be different due to his incumbency and what with all the baggage of Health Care Reforms and not so stellar handling of unemployment situation. There are few obvious themes which President Obama needs to consider for this extended phase of campaign for re-election while the Congress is gridlocked.

1. To start with, time has arrived for President Obama to start a straight dialogue about the core contradiction of America's fiscal mess - people's expectations about entitlement do not reconcile with what they are ready to pay as taxes and fees. We need public debate and general acceptance for what % of GDP should be government budget and what % of shortfall is acceptable. Going next step, we also need 'variable tax rates' depending on overall economic situation and unemployment. For example, if Congress wants to extend Bush Tax Cuts for Rich (which is what fiscally minded GOP wants to do!) then are those to be in perpetuity or could those be linked to unemployment rates? Does it make sense as Economy grows and unemployment is reduced, these Tax Cuts are still in force without any recalibration? If for banks we think about 'counter cyclical capital requirements' (less capital in recessionary time whereas more capital in boom times); why not for tax rates? Will not such an approach essentially triangulate Conservative demand of 'tax cuts' all the time?

2. If failure to communicate benefits has been a reason for unpopularity of Affordable Health Care Act, the need to correct that failure does no go away. If President and Democrats continue the current line of saying they are open to improve this reform further and indeed actually work to put changes to address concerns of American people, that will be good politics and good for American people; provided GOP comes along. Unfortunately GOP has more incentive in keeping that legislation flawed for obvious political benefits. The trick is to show the true motive of GOP here - no interest in fixing Health Care but intention to use it as a 'pinata' to flog Obama. When that game is exposed, public is bound to see through this cynicism. Constantly bringing public attention to 'relentless health care costs' would provide the necessary backdrop to continue the second stage of this debate. With 2010 MidTerm Elections, it is clear that Obama cannot avoid his responsibility to correct the course there.

3. President Obama has not be emphasizing enough the importance of funding Education, Research & Development and Infrastructure for America to compete in today's global world. Trade barriers and currency devaluation are not sustainable solutions and GOP majority in House would be supportive in that respect. Analogy here is does not a family take a loan to fund 'college education' of kids knowing that without it those teenagers do not stand any chance to compete? Harder part of the job here is to persuade Americans that funding these activities is indispensable. If wars in Iraq and Afghanistan are good enough to fight on borrowed money, why is it not good to borrow to invest in Technologies which will produce tomorrow's Google? Until Americans are presented these stark choices in blunt wording, muddling of budget which GOP undertakes, will not be challenged politically.

4. Immigration is another issue where Democratic supporters probably have reached a limit. President Obama needs to make the case why immigration means improving Economy in Medium to Longer Term. Not only will it redress the political blind spot for Democrats, hesitating further due to the fear of how GOP would engineer political backlash is not going to untie Democrats from their current predicament in any of future election.

5. Finally, at some point fantasies of American Exceptionalism need to be squarely faced so that Americans understand working with emerging democratic power houses like India, Indonesia, South Korea, Poland, Brazil and Chile is much more beneficial than locking horns with China. There is an opening for bi-partisan understanding here as these sentiments on Conservative side show. What Obama needs to do here is unshackle Liberal Orthodoxy on nuclear proliferation and labor protection. President Obama's current trip to some of these countries is a right step, what he needs to do here is to keep building on it rather than leaving it half way through.

The goal in attempting to put forward this agenda forcefully in front of Americans is stir clear of ideological blindness of both Left and Right and utilize better next two years in rendering a vision on the background of gridlocked Congress. There is no other road for President Obama than this if he wants to get re-elected.

Wednesday, November 03, 2010

Mid-Term Elections

1. GOP Tea Party wave was estimated on bit of lower side and as usual the pendulum has reached the other extreme with GOP winning the House by 65+ seats. Dems have been lucky to hold on Senate with 51 to 53 seats.

2. Overall this is bit of a tolerable result for President Obama, given the bashing expected. Except holding onto Senate and victory in CA governorship; there is nothing much positive for Democrats apart from good fights in many Senate races like PA, IL and governor races in OH and FL; all lost by Dems. Reid winning Nevada is the only high profile notable victory for Dems.

3. Tonight's stars are Ron Paul and Marco Rubio and to some extent Harry Reid and Jerry Brown on Dem side. John Boehner is for Media, I am not so enamored for him. He is an old hand and House Majorities are more of a collective work rather than an individual. Meanwhile President Obama is clear loser here having been unable to pull off any hard fought electoral victory in MidWest and on East Coast.

4. With House emphatically under GOP, people will perceive this as the divided government; meaning GOP sharing the responsibility as well as blame for any governance lapses. If Economy does not turn as expected in next 2 years, Republicans will be not be able to get off the hook so easily here.

5. On the other hand if Economy recovers respectably, 'grid lock as the Goldilocks' perception will be entrenched among Americans, howsoever misplaced it is, and possibly that economic recovery will help Obama to get re-elected.

6. In terms of policy, Public Opinion has clearly shifted to Center-Right and Krugman feared 'retrenchment in government spending' policy will be in full force.
- For Health Care, Republicans will focus on 'de-funding Obama Health Care Reform' wherever applicable as they will realize that outright repeal is not possible. Failure to repeal outright Obamacare will be disappointing to Tea Party Base and GOP will be conflicted here. GOP will be limited here since any Health Care Fights are more of backward looking rather than a forward vision. This is because GOP corrections of Health Care will not fix unemployment. If passing Affordable Health Care Law was a distraction in the first place for which Dems paid the price, GOP will be foolish in paying repeat price due by getting distracted while fixing that same Health Care.
- In the first budget, GOP is aiming to cut around $100 Billion from the discretionary spending resulting in potential layoffs of government employees and cutting of many services. But this is going to be really hard for GOP to pull off without losing some political capital.
- Bush Tax Cuts for Rich will be clearly passed by Congress and President Obama will meekly accept that. Such a failure by Obama and Dems to pick up 'defining fights' will continue to dilute a strong political identification for Democrats and will continue to cost them in future elections as well.

7. Longer term, in absence of any policy framework to reconcile demands of Americans for entitlements like Social Security and Medicare and unwillingness to pay/collect taxes; fiscal imbalance will continue more or less as is. Congress will accept some recommendations of President Obama's Committee on Deficit and will essentially adjust Social Security even though the crisis there is not so alarming, not requiring draconian solutions. On the other hand the core problem of Medicare and unabated Health Care Costs - Republicans will not be able to stop it and will not be much interested in addressing this issue as well. Malpractice Reform - that one positive outcome is possible since President Obama will trade that to preserve some of the gains of his Affordable Health Care Act. But in itself 'malpractice reform' does not solve America's core problem of relentless health care cost increase.

8. Further, apart from an amorphous policy of being 'business friendly'; lack of any cohesive vision to grow America will continue stymie longer term American economic growth. In other words, American Political System will hardly make any dent in addressing longer term structural issues. Few Trade Deals will pass through Congress and there will be pressure on all non-Dollar currencies; but in themselves these things will not revive American Economic Growth.

9. In case of Foreign Policy, START II will continue to face resistance before passing eventually. President Obama will continue to muddle through Afghanistan war listlessly for next two years just to ward off any political attacks from GOP. Essentially General Petraeus will run that war with a solid GOP backing in Congress and President Obama will allow that without much resistance to avoid picking any costly political fights before re-election.

10. Finally, early in the game Sen. McConnell's plan of making President Obama as the one term President seems to be on track. Unless President Obama becomes more attuned to Public Opinion and is laser like focused on Job Growth (even though he has less means to do anything substantive there) policy wise these two years will be a drought for Obama and Democrats. He has an opportunity to keep his game plan simple and winning - doing all he can for employment growth and pointing out fiscal insanity of Republicans. Question is whether he wants to do it aggressively or to continue to be meek in taking on any political fights.