Saturday, July 31, 2010

Indo-USA Nuclear Accord - Advantage Russia and France

India and USA complete the next stage of Indo-USA Nuclear Accord by signing the nuclear reprocessing pact.

But we have seen this pattern of American ham handedness before. When Bush invaded Saddam's Iraq, everybody said eventually American Oil Companies will win all oil contracts in free Iraq. Reality is hardly any bid is won by American companies, those oil contracts have gone to European and other non-American companies. So in the end hardly there is any material benefit from thousands of American lives lost and hundreds of billions of American tax dollars poured. (We are not talking here any strategic and political advantages or how America acquired an edge in the geopolitical balance; as how will be claimed by Neo-Conservatives. That is a separate topic of discussion.)

One of the motivations behind Indo-USA Nuclear Accord has been it will benefit American nuclear technology companies. But as American government refuses to extend any liability cover for American companies erecting or operating nuclear projects in India; American companies are losing to Russian and French companies, the governments of which are underwriting such liability covers for their companies doing business in India. It is one more thing where Obama Administration rhetoric of promoting Export does not match with actions on ground. There is complete incoherence and incompetence by Obama Administration and American Government in these matters.

The good thing is overall India should get some good deals whether those are American companies or Russian or French. In light of the totally botched liability claim against Union Carbide in case of Bhopal Gas Tragedy; it is high time that Indian Government remains alert in providing / securing 'liability covers' for any nuclear power plan accident in India.

Friday, July 30, 2010

Bollywood, beware Hollywood is coming after

It is becoming now a conventional wisdom that Hollywood has to make more money outside of USA. India is becoming the battle ground. Will we see more fights or co-option of Bachchan by Steven Spielberg?

We love our old Pharaohs

That is what American way of life is, to hate the incumbent President while cherishing old lions who are out office.

Sunday, July 25, 2010

Britain in 21st Century

Hasan Suroor pulls off an excellent and widely circulated article about Britain's place in this century. It is hard to imagine anything different than what Suroor argues so well his column. But the question remains as and when UK Political Elite wises up to throw up their melancholy, what is the best way for Britain to see herself in today's world which benefits maximum to her own people.

I believe Nordic countries is the right model in the end for Britain. It is true that none of the other Nordic countries had any colonial empire outside of Europe like Britain. And that is one thing which Britain has to deal first. If ever Britain in the end aims to gain respect with rest of the world, it will squarely have to deal with its Imperial Past. Rest of the world understands that if Britain were to engage in 'just reparation' of wealth of past colonies, it will simply become bankrupt. So that is not a path rest of the world can recommend to Bratain with a straight face. Nevertheless, despite all the multi-decade efforts after WWII by Britain to give generous international aid, Britain is still lagging in aid giving and it needs to at least match its Nordic neighbors like Norway, Sweden and Denmark. (USA is even worse than UK even though Tea Party folks believe that it is the foreign aid which is causing American deficit!)

Beyond aid, as far as 'soft power' goes; spreading and nurturing English Language, promoting games of Cricket, Rugby and Soccer all over the world and spreading Classic Rock (carrying forward legacy of Beatles, Led Zapplin, Eric Clapton and others); all these are worthy pursuits for Great Britain. Nurturing centers of excellence like Cambridge, Oxford, London School of Economics and scientific publications like Nature; all that can contribute to the allure of a dominant 'soft power' if done right.

For Continental nations, allegiance to Europe and Euro at once give them a shot at the status of global power. In an ideal world, France's seat in UNSC should be replaced by EU if Germany continues to invest in the stronger Europe. For Britain, the reality is to accept the dilution of her powers at UNSC. If it were a smart country, Britain would actually take an initiative in transforming UNSC. This is because, though the 'real politik' may look like a zero sum game; the only path available for UK is to establish its credentials as a honest power broker. Arab-Israel conflict and turmoil in South Asia; these are two areas where British can still contribute substantially as long as its honesty credentials are intact.

Assuming that Britain resolves the dilemma of further integration with Europe in favor of more independence from Europe, her currency of Sterling Pound offers a credible and viable vehicle for the free trade nirvana. Among Europeans, UK is the one which can more freely float its currency and debt overcoming stringent fiscal restrictions of EU. With freer Capital Markets housed by a leading global financial center like London, UK can liberalize its entire trade regime as the number of manufacturing jobs to be lost is not significant. That is a trick available to Britain - to develop its economy as fully free traded economy combined with a strong regulatory discipline which provides framework for the global Capital to roam all over the world.

Britain has the capacity to exert and execute regulator framework for the global Capital (though recent history may not be that reassuring), given depth and strength of its Democratic System. Smartness is to utilize this phenomenally strong democratic setup to create an environment which is a true custodian of Global Capital. To a certain extent Switzerland on the Continent achieves that. That is where Britain's future prosperity may lie apart from energy independence or energy export status based on 'wind and wave' based alternative energy generation.

Saturday, July 24, 2010

Turkey fooling Hillary

Earlier Turkey agreed with Hillary Clinton to stay away from Iranian nuclear mess. Expectation was Turkey will not dabble into these proliferation matters outside of UN and IAEA framework. But clearly that is not the case. Obviously Hillary's word and America's writ no longer carry any weight in this matter. So long as America is mired in Economic distress and China continues its ascend on the economic ladder, it seems that the world really does not give any damn to America. With this flipping by Turkey on its earlier commitments, it will be more difficult for America to believe Turkey going forward. Beyond further deterioration of Turkey-USA relations, this all points in the direction of possible air attacks on Iranian nuclear sites.

The more rest of the world starts ignoring America and the more America is unable to 'grow her way' from the recession, exasperated by liberalized trade in recent years; even Obama Administration may not remain immune to no new military undertakings in rest of the world to assert the American writ. Heated rhetoric on Korean Peninsula will be one more avenue where Hillary's dreaded 3AM call may materialize.

As we know, things can deteriorate literally on a dime in these matters of war. The more one thinks, it is clear that it will be better for rest of the world to navigate these issues carefully along with America. Agreed that emerging powers like China, Brazil and Turkey may be tempted to brandish their newly acquired power. But economically hobbled old giant like USA with its military capacity still reasonably intact and domestically ultra-conservative forces on upswing, may loose balance to ignite flares of war. Granted that American history does not portray a picture like how shackled Germany tried to seek way outs by catastrophic wars. Nevertheless, all these global developments are straining America's 'international restrain abilities' to a limit and one wonders how President Obama will be able to handle these challenges on top of what he is facing domestically.

Friday, July 23, 2010

Indian Ineptitude

S D Pradhan has some sane advise for Indians while dealing with Pakistan, considering the ongoing fracas between these two countries.

Stopping terrorism and actions against terrorist must be non-negotiable for India. It cannot and must not be contingent upon any other issue in any circumstances. Either Pakistan is with India, USA and rest of the world in dealing with Terrorism or it is simply against the world run by laws. What is sad is PM Dr. Singh was required to state this separation of issues at the start of any Indo-Pak peace talks. India must continue its policy of 'solving terrorism' issue as the precondition of discussing any other outstanding issues with Pakistan.

I understand this tension is exactly what Pakistani Army wants to use to justify its continued avaricious stealing of Pakistan's precious resources to itself as well as to keep it's supreme political broker position intact. But for India, settlement on Kashmir issue means at best formally retaining areas within India's control with more of International recognition. India is more likely to loose land from her side in any such settlement (not because of any historical or legal reasons but because Pakistan would not settle anything less). There is no Indo-Pak settlement in the world possible where India can accrue any additional area apart from some exchange of land. Given that, what is there for India to even start addressing the Kashmir issue? It is not as if by talking Kashmir issue first, India is going to be in any advantageous position. India will have to continue to play cards on the basis of 'whatever it controls she needs to preserve that'.

Indian Prosperity can keep going regardless of the resolution of Kashmir issue. As long as India manages Kashmir in her control well (which is incidentally not happening, going by recent riots in Valley); 'moving on' is indeed a better way for India. No improvement in any of these peace talks with Pakistan means danger of more 26/11 like attacks. But to resume talks and succumb to Pakistani demands is basically same as ending the project called 'Republic of India'. Indian politicians need to look at Sri Lanka. Had Lanka given up to terrorism by Prabhakaran, Lanka would have been divided with still no peace.

In the end, for India to compromise on terrorism and allow Pakistan to get away dealing with perpetrators of 26/11 will be an effective 'nod' to terror tactics of Pakistan. Rest of the world, including the big sufferer of terrorism USA, will NOT come to the side of India and will not support the more righteous policy of India. But a country of 1 Billion plus people with a Democratic & proud Republic of over 60 years should find enough spine, moral force and certitude in herself to deal with Pakistan and not to compromise in her fight against terrorism.

Tuesday, July 20, 2010

Kudos to Sen. Lindsey Graham

"No one spent more time trying to beat President Obama than I did -- except maybe Senator McCain," Graham said. "I missed my own election. I voted absentee. But I understood we lost. President Obama won, and I've got a lot of opportunity to disagree with him. But the Constitution, in my view, puts a requirement on me as a senator to not replace my judgment for his, not to think of the 100 reasons I would pick somebody differently or pick a fight with Miss Kagan. It puts upon me a standard that stood the test of time: Is the person qualified? Is it a person of good character? Are they someone that understands the difference between being a judge and a politician? And quite frankly, I think she's passed all those tests."

In Kagan's hearings in late June, Graham told the solicitor general that her experience in liberal politics wouldn't bar her from the Supreme Court. “The fact that you've embraced liberal causes and you have grown up in a liberal household is something we need to talk about, but that's just America,” he said. “It’s OK to be liberal. It’s OK to be conservative."

-- The Senate Judiciary Committee approved Elena Kagan's nomination to the Supreme Court by a 13-6 vote on Tuesday. One Republican, Lindsey Graham, voted for her.

This is quite interesting since Sen. Graham had every reason to join the bandwagon of GOP to oppose the nomination. (I do not have any opinions in the matter of Kagan Supreme Court nomination.)

Sunday, July 18, 2010

America's Europe Problem

Simon Tisdall writes a very readable article about the estranged relationship between Europe and USA, though I doubt he is able to identify what are the exact causes or historical reasons for these fried relations as well as what are the remedies. The article is quite catchy, compilation of all such sexy sentences:

...columnist and pundit Charles Krauthammer led the charge on Fox News:

"Obama says, 'In America there is a failure to appreciate Europe's leading role in the world.' Well, maybe that's because when there was a civil war on Europe's doorstep in the Balkans, and genocide, it didn't lift a finger until America led. Maybe it's because when there was an invasion of Kuwait it didn't lift a finger until America led. Maybe it's because with America spending over half a trillion a year, keeping open the sea lanes in defending the world, Europe is spending pennies on defense. It's hard to appreciate an entity's leading role in the world when it's been sucking on your tit for 60 years."

"...What is going on? For let's be honest: Krauthammer is a bit of a clown. And he has a very European surname."

This is cool, you never leave an opportunity to applaud when someone rightly identifies the true profession of Charles Krauthammer - to entertain Americans by his stupidity.

"Fear, envy, anti-colonialism, anti-imperialism, cultural inferiority-superiority complexes, trade, political and military rivalries, and America's quest for identity all fed anti-European feeling as the new country sought to differentiate itself from the old countries whence most of its people came. Many of these phenomena remain relevant today."

Tisdall is right on money here.

"...a compilation of factors supposedly explaining the certain demise of Europe's failed utopian experiment: sluggish, state-regulated economic growth, high unemployment, high social entitlements, a mortifying museum culture, and the abandonment of the Christian tradition, which encouraged the growth of "pseudo-religions" -- among them environmentalism, multiculturalism, and hedonism."

Yup, that rings a bell.

"The European collectivist "soft power" model is under serious challenge after the near implosion of the European Union's vaunted Constitution and amid bitter argument over Greece's bankruptcy bailout and the euro's possible collapse. The American "hard power" model has been undermined by the U.S. military's inability to "win" two major wars, in Iraq and Afghanistan, and by the global financial crisis, a capitalist heart attack from which the patient has yet to recover."

This is probably the crux of the matter and nearest what Tisdall comes to pin point what is going on here. My favorite argument is Americans see where the VAT lubricated entitlement train leads in Europe. With such high taxation, Americans see that Europe got addicted to unaffordable entitlement paying State and in the process lost any ability to compete with China and other emerging world powers. Americans fear that that is where this country will go. As is obvious, GOP and Tea Party are exploiting such a fear to the hilt (Health Care Reform bill is the blatant example of that). The collateral damage of this fear is the tendency to 'go away from anything European' within this country.

On the other hand, what would save Americans from their military overreach which is plundering their treasury and making them dependent on Chinese lending? Neither Europe has ever bothered to pay for any serious military capabilities after WWII nor any commendable & effective pacifist traditions are presented to the world by Europe. Essentially Europe has conveniently decided that USA is the police of the world, let it run the world, let it take the burden with consequent high military spending and modern Roman Legions on borrowed money while Europeans will continue to sip Chardonnay on their Mediterranean beaches. Further, Europe always does a great job of mourning and post killing 'communal healing'; but just don't ask Europe to do any preventive actions to stop any such killing. (Here is the link and photos of that shameful chapter in European history in recent times - Srebrenica massacre.) So it is not Europe where Americans are going to find any wherewithal or leadership insights to wean away from her mounting military engagements. If at all, Americans will have to return to their roots in history where so many of American leaders showed the path of 'intelligent isolation' and the approach of minding America's own business only. Europe does not come into the picture here and as a result - 'Europe, what is Europe?' reactions come from Americans.

"Don't forget who saved your ass twice, buddy. If it wasn't for the good ole US of A you'd all be speaking German!"

That was then, but present is different. I believe this is where Tisdall drops the ball. Obama Administration is sensing, rightly, that the center of gravity in Europe is slowly crystallizing with Germans even though not whole of Europe will be talking in German. Merkel's Germany, her Conservative policies and her emphasis on 'austerity in the middle of recession' do clash with Obama and the Keynesian philosophy his Administration generally follows. But Larry Summers and White House are not blind to see the admirable performance of the German Export machine, even though it is coming at the cost of other European nations. The way things are unfolding in post Euro crisis Europe, it is clear that either way - whether Euro remains a single currency progressing along the currently charted path or Euro unravels under the crushing weight of debt and subdued recovery - Germany is going to be the true power which matters. Given that, better relationship with Europe means practically keeping Germans happy. Naturally, Obama Administration and for that matter any American Administration, would like to simplify / reduce the task of managing foreign relations with Europe. Who wants to deal with the unwieldy contraption called Europe with all its contradictions so manifest when more or less the same result is obtained by dealing with only one single nation state called Germany? I am not sure whether it is the 'British thingy' which prohibits Tisdall to see the increasing super heavy weight status of Germany in the world affairs and blinds him from seeing how America is entailing more with Germany.

There is one more country in Europe which is likely to matter more in days to come - Poland which is on a solid economic and political upswing. Again it makes sense for America to focus on a specific country rather than spreading the love all cross the Europe. In other words, there is still lot going on in America's interactions with Europe, it is just that it is likely to be more focused on certain countries than the entire Europe as a single entity. That is how it should be too. Until the time these existing and emerging powers within Europe completely submerge their national interests with the European Union so as it becomes a cohesive, single political entity; it is hard to fault outside powers like USA when they interact more on individual nation by nation basis. Recent political and financial earthquakes in Europe simply encourage this trend.

Saturday, July 17, 2010

Burqa Ban – Assertion of French Secularism

Passing of a new law by the French Parliament on July 14, 2010 (the day when Bastille was stormed in French Revolution of 1789) will result in forbidding Muslim women wearing burqa in public places. I am with Christopher Hitchens in this regard. So I find it bit strange for Shikha Dalmia to argue against any such ban.

Dalmia compares French Secular politics with Indian Secularism and argues that tolerant Hindus got it right when they allow multitude of Muslim women to continue the buraq. This is because Dalmia conveniently forgets that many sects in Hinduism (for example Rajput community and many more all across India) equally force ‘burqa equivalent’ dress code on Hindu women themselves! To expect Caste ridden, male chauvinistic Hindu society (Khap Panchayat – any takers) to object about burqa of Muslism women is to too much to expect. Dalmia forgets the basic history of India – how Hindu males and Muslim males have collaborated over centuries to continue their oppression of women of both religions.

Agreed that Muslim women wanting to wear burqa have to pay the cost of fighting the true enemy here – Muslim clergy and conservative men who are trying to force their suppressive ways on Muslim women. But far too many times we give ‘free pass’ to these fanatics under the name of ‘religious freedom’. There is such an obvious feminist case to be made here that it is surprising that enlightened commentator like Dalmia missed it. If any body politics we would expect to correct this non-sense, it can be very well the politics of France which is the origin of Secularism.

Friday, July 16, 2010

Summer of 2010

Here is the NOAA data.

Where do you find blue spots in northern sphere? Some of the notable places:

- My home area, California, which I can vouch that for last couple of years is actually experiencing 'cooler' summers than what we saw in earlier parts of this decade. North West corner of continental USA as well continues to experience cooler weather.
- In Europe Scandinavia is experiencing cooler summers apart from a singular tiny blue spot in Spain.
- Islamabad and surrounding area seems to be lucky.
- India's Rajasthan desert may not be getting that hot compared to yesteryears.
- Dalian, Taiwan and Hong Kong in China seem to escape otherwise scorching temperatures in rest of China.
- Central Australia seems to reverse the trend of otherwise hotter Australia.
- Rest of the humanity seems to be on the way to get roasted, as per the script of Global Warming. It is hard to identify areas of human settlement which are not experiencing hotter summers (or hotter winters in case of Southern Africa and Southern America).

In a sense rest of the humanity is toast. Actually all of the humanity since few places not getting hotter may not count that much at all.

Thursday, July 15, 2010

Some Respite to President Obama

1. Goldman Sachs to settle with SEC for around half Billion dollars. That should make some dent in the charge of GOP that this administration is totally business unfriendly.
2. Financial Regulation Bill is done which will reduce lot of uncertainty for Capital Market.
3. BP cap is working at least for now.
4. President at a car battery manufacturing plant in the recession ravaged state of Michigan.

I am sure this is the day Obama Administration must have been waiting for a long time to come, given the brutal political mauling it has suffered in last few weeks. Question is how Obama and Dems will start to build upon this and how do they plan to come out of the deep political hole they have dug for themselves.

Tuesday, July 13, 2010

Disgusting House Democrats

Politico has a story about the drama unfolding between House Democrats and White House. At stake is the money to save jobs of teachers. Politico story talks about the dispute as from where the money should come. But it fails to elaborate on 'jobs of which teachers' will be saved by these proposed funds. The way current the system works and the way precisely how House allocated funds will be utilized, it will be jobs of union teachers regardless of 'competence and track record' which will be saved by this additional funding. Worse, because of that many competent and young teachers will loose jobs while saving positions of old timers who have been hiding behind unions to cover their incompetence in numerous cases.

But the worst is House wants the money from Education Secretary Duncan's program of Race To Top where funds are utilized to reform education riddled with waste and non-accountability brought in by Teacher Unions. It is like taking the money reserved for a medicine to cure an addiction to buy more meth! It is that disgusting politics of House Democrats is.

House Appropriations Chairman Dave Obey - the one who is leading this fight from House side - is a respected politician and all along his long career he has played by rules. His is an exemplary, honorable career. He is one of the few true Progressive stalwarts of American Politics. Further, he also has what is missing with most politicians - that rare ability to sense when to retire. After a long, fruitful and proud career he has declared his retirement at the end of this term in November 2010. But even such a seasoned House Democratic Member could not avoid succumbing to pandering of Teacher Unions. Now we understand how deep decease infected House is on Democratic side when it comes to true reforms which matters.

But Media has failed to highlight this conflict and report how right White House is in this fight. As is the wont, Politico story talks more about the veto and essentially renders this as nothing but usual politics where partisans are combating for their pet projects. That is stupid. The Politico story never mentions how layoffs of unionized teachers take place, but rather try to argue like Glen Beck and Rush when it says White House is trying to brandish it's 'business friendly credentials'. Who cares for such meta narrative from Politico? We are talking here jobs and reforms for America.

In a way Media is setting up Democrats for a disastrous showing come this November. The only realistic and effective way for Congressional Democrats and White House to earn confidence of Americans is to show the 'spine' when it comes to taking on entrenched public sector labor and entitlements. Dems are failing miserably there resulting in catastrophic losses of political capital and when White House takes some tentative steps to correct that, Media only finds glee in reporting the infighting without any regards to who is actually more right for America. Media tries for false 'balanced report' and in the process reduces White House at par with discredited House.

Monday, July 12, 2010

It is all fault of Politicians

Like he did at the time of Bush Iraq war, Paul Krugman is wedging a lonely battle while arguing for 'doing something to address high unemployment'. This blogger cannot decide whether Krugman is right or not in this case - it is hard to decide whether this is Krugman's Bush Iraq war call (prescient) or his bank nationalization call (flatly wrong). Personally I feel the right strategy for America's Economic challenges is:
- earn credibility / political capital by adopting austerity in reigning in entitlement costs (Medical Spending and Social Security at Fed level) and public sector labor cost (meaning labor reforms to rationalize their wages, their medical and pension costs) as well as reigning subsidies to rich; and
- use that political capital in triggering massive public infrastructure spending on 'smart grid, broadband, road, transportation and other infrastructure'.

Dems are not in a position to earn any such credibility since they are beholden to public sector labor as well as loath to reduce entitlement costs (where GOP is not any particularly exemplary too) or subsidies offered to rich in America. And Obama Administration has decided not to spending any political capital in persuading Congress to undertake any deficit financed stimulus spending.

Krugman knows this reality since he can read political news as like anyone else. So he is turning to Bernanke Fed and exhorting it to undertake some unusual steps. It is unclear and unknown how any of that can be achieve what Krugman is looking for - reducing unemployment.

But Krugman wonders why Fed would not be acting in this situation. He ponders:

"So why not try to do something about it? The closest thing I’ve seen to an explanation is a recent speech by Kevin Warsh of the Fed’s Board of Governors, in which he declared that doing what Mr. Bernanke recommended back in 2002 risked undermining the Fed’s “institutional credibility.” But how, exactly, does it serve the Fed’s credibility when it fails to confront high unemployment, while consistently missing its own inflation targets? How credible is the Bank of Japan after presiding over 15 years of deflation? "

I think the answer is very simple. Our current politics has made it simple - GOP blames Obama for this recession while at the same time asking him to reign in deficit as if they have some 'magic wand' to improve the economy once in power. In other words, when Politicians have ensured that they will be marked for this failure of the economy, why would Fed bother to do anything and highlight its culpability in the eyes of public? In other words, politicians have ensured that they would shield Fed and no one will see Fed's responsibility here. Bernanke is smart and he can also see, clearly understand this dynamics making him least interested in taking any action. That is how Krugman's perplexity about Bernanke Fed can be explained - American politicians are taking arrows for Bernanke.

Sunday, July 11, 2010

Comentario de la Copa Mundial - Saludo a España suave como la seda

(World Cup Commentary - Salute to Silky Smooth Spain)

So even third time Dutch are unlucky whereas the patience and composure of Spaniards made them to realize their full glory very first time they appeared in the final.

Dutch lost the only match in this tournament, unfortunately the one which mattered most. It almost looked that they never thought they would win this match. There was a good option and a bad option to break the rhythm and composure of the Spanish Team. Dutch opted for the 'yellow card' ridden approach and it was clear that they were on the slippery road as so many commentators suspected. Those interruptions did manage to halt the Spanish rhythm but not to the point where Spanish Team could not recover or play their natural game. On top of that Dutch lost couple of extraordinarily simple golden chances. Same was also of course true for Spain. Clearly the 'finish' in the game was not worthy of a world cup match.

But in modern times when one in ten of humanity is glued to a TV set to watch the World Cup Final spectacle, we are expecting too much from these young players not to make any mistakes. The success and media hype of FIFA World Cup has attained such a dizzying height that appearing in the cup final itself puts extraordinary pressure on these players. All that is left at that level is to retain the composure and try for a normal and usual game. That is what Spain did and they were rewarded.

The obvious legacy of this Spanish win will be that the 'silky passing game of Barcelona' will get more popular and will be adopted more in rest of the world. As this commentary says

"Great teams in other sports beat their opponents. Great teams in soccer beat both their opponents and the game. That sounds like a critique of soccer unless you've seen for yourself what a marvelous thing this can be."

That is what Spain did today. For last few FIFA cups we have not seen any prominent stylistics or strategic exposition of any particular type of methodology in winning the cup. Spain is different, they have shown that its unique Barcelona approach is worthy of winning World Cup following its success at European Championship. This is a big deal and it is not just another world cup win. Many more worthy soccer pundits will elaborate on this point than this mere football fan.

The real question is when separatist sentiments are at its highest in Barcelona and Catalonia in general, whether this Soccer pinnacle will help Spain to come together or not. From Tennis, Cycling to Soccer; Spanish Sports is flourishing under the "Rojigualda" and it is kind of providing the badly needed reprieve to this recession ravaged country. Here is an opportunity for Soccer to unleash its peacemaking power now that contest for the trophy is over and united Spain has prevailed.

Worsening Gridlock in Japan and Importance of South Korea

There are no signs of things improving in Japan. There was some hope that the new PM Kan would bring in some fresh air and Dem agenda will be continued. But he talked increasing taxes prematurely and that has cost that party the control of upper house. (I am sure Obama and Pelosi Dems are taking a note of this.)

AP notes that as a result

"The projected losses were worse than expected and will make it difficult for Prime Minister Naoto Kan's party to pass bills and forge ahead with plans to slash wasteful government spending, improve transparency and put more cash in the hands of consumers."

When will sun ever rise in that land? Or should Japan plead back Junichiro Koizumi to take charge again, the only Japanese PM who has provided any kind of leadership in more than 2 decades? It is very rare that in today's modern and mature democracies, the system is unable to whip up capable leaders for such a prolonged period. What history shows us is whenever democratic system fails to fulfill it's role, extremism flourishes. That problem does not seem to be with today's Japan and as a result it is on a unique path of 'peaceful oblivion'. Needless to say, it has been a happy show for China for many years and loosing ground for America's foreign policy interests. America's, West's and those who are reluctant to accept China hegemony in Asia (likes of India, Vietnam, Russia, etc.); interests can be compensated to a certain extent by the rise of Korea to fill the Japanese void. The ultimate goal will be 'united Korea' with a firm grip of South Korean democratic system established all across the non-nuclear Korean peninsula. Though Japanese opposition to such united Korea (which actually means more pressure on North Korea to whittle down) is increasingly becoming less effective due to weakening of Japan, roaring China is making it difficult to control recalcitrant North Korea by every passing day. We have not reached a point where cost of managing North Korea for China is higher than the issues created as and when North Korean State collapses.

Given all that, for America the priority should be to continue to hitch America's North Asian policy around the lynch pin of South Korea in days to come. Current South Korean leadership is exemplary (despite losses of ruling party in latest elections) and Obama Administration is on the right track here to support and work with South Korean President Lee Myung-Bak. Obama Administration is continuing Bush Administration policies further. But Congress needs to play its role and pass the Free Trade Agreement with South Korea. I suspect as more of Detroit moves to 'electric cars' market, opposition of automobile industry lobby to South Korean FTA will lessen; the real road block for FTA with South Korea. Or at least that is the pitch Administration needs to sale to Congress as Korean car makers are not yet strong in 'electric car' market even though in traditional car market Korean cars have made serious inroads in American market while successfully competing against Japanese and German cars.

It is not clear whether Congress will have the gumption to take South Korean FTA before November elections. For Obama Administration, it will be easier to get this FTA passed from a Congress which has more Republican presence; so they would have inclination for waiting till January 2011. That means America to loose precious time till then even though there is some breathing room for America.

Saturday, July 10, 2010

The Guru Speaks

Apart from PIMCO guys (Bill Gross and Mohamed A. El-Erian), one more person in private finance world this blogger has some respect is Stephen Roach from Morgan Stanley

Few points from this interview of Roach:
- He would not have confirmed Ben Bernanke as the Fed Chairman
- China is in control of its property bubble unlike USA and China will be able to ‘soft land’ in essence
- Austerity for private citizen in USA is the right course
- Unemployment in USA will continue to be high in years to come.

Nothing much is startling or surprising here except that being Wall Street Journal interview, it did not bother to ask him what should be the policy prescription to increase the growth rate and employment in USA.

Practically we all are at dark or political divisiveness in USA is so sharp that America is unable to unclog the situation any further.

Friday, July 09, 2010

World Cup Commentary - Touché Aleksandar

Greatest Moment: When Ghana's Gyan took the first penalty in the shootout against Uruguay, moments after he missed the penalty in the overtime that would have changed the history of the World Cup by placing his team in the semi-finals. The whole of Africa and large chunks of the rest of the world wanted him to score that one and then he missed. A lesser, less courageous player would have forgone taking part in the shootout, but Gyan stepped to it and scored a perfect penalty. I had tears in my eyes.

No, this blogger does not have such a keen eye to spot the extraordinary drama like a needle in the haystack. It is Aleksandar Hemon's commentary at The Goal Post.

Wednesday, July 07, 2010

World Cup Commentary - German Fairy Tale Ends

It is understandable that the whole Germany may be crying for Schweinsteiger as his heroics did not pan out. Spain was systematic. I felt that as long as Spain could hold Germany without any goal in the first half, they had a good chance. Spain did more than that. Adopting 'Barcelona Football' style Spanish players retained the possession by continuing their silky passes and overall sublime game. German defense did well by continually luring the whole Spain squad in its half without conceding any goal. Unfortunately German 'break outs / counter attacks' did not pan out. Germans had much less number of break outs compared to their normal successful game. On the other hand Spain missed so many slam dunk opportunities of field goals, demonstrating its poor finish once again. Well, but one corner kick and the header were sufficient to break the German advance in this cup. Two times in row the German machine has stopped in World Cup Semi Finals. But all said, German performance in World Cups has been unbelievable consistent over years, shoulder to shoulder with Brazil.

Being the 'giant killer' team, Spain has an upper hand in the final. However, Dutch will be loath to reach the final for the third time and still not make the cup whereas Spain will want to go for the full glory in its very first appearance in the final. Dutch has not lost any game so far in this world cup whereas Spain lost once in group matches.

Come this Sunday and the world will have the 8th country as the new world champion. FIFA world cup is unfolding with some interesting dynamics - constant presence of uber super powers Brazil and Germany attempting to extend their claims to the cup every four years, followed by next tier of soccer powers like Argentina, Italy, France and other familiar faces battling for the supremacy with sprinkling of few other countries as cameo appearances. Only 7 champions so far out of 76 countries which have played world cup matches; one is talking 10% success rate. With 2010 Final, at least we will have insurgents succeeding at the top level by breaking open the most exclusive club in the world of sports.

Tuesday, July 06, 2010

World Cup Commentary - All European Final

Not much to write about the Dutch - Uruguay semi-final match. Chances of Uruguay Team repeating anything what it achieved way back in ancient times were slim. (Uruguay was the winner of the inaugural FIFA cup in 1930 hosted in Uruguay itself and again the winner of 1950 cup after prolonged hiatus due to WWII.) Still actually Uruguay Team gets honors of this match considering the controversial second goal by the Dutch Team as well as their good game. I guess the quality of the first Dutch goal and the emphatic third goal may make Dutch as the worthy winner after all.

The match was perceived as a 'low voltage drama' and that was it though the game was solidly entertaining. One hopes Dutch Team betters its game in the final now that it has attained this enviable height.

Monday, July 05, 2010

Can America get some lessons from Dr. Singh?

Matt talks about the climate debate component about UPA government's petroleum product subsidy ending policy decision and Bharat Bandth in opposing that.

What folks like Matt also need to understand is this is equivalent of President Obama been able to withstand pressures from Sen. Lincoln Blanche when American Government ends subsidies to Agriculture. It is that radical. Can our Messiah Barack Obama pull that off? Not in million chance that USA will end Agricultural subsidies. But we have a humble Indian PM ending India's biggest subsidies for petrol and cooking gas (next are fertilizers, that is a battle for another day) with a full resolve to end the subsidy for diesel too. He will do that too for sure.

If maturity of a political system is to be determined on the basis of how short term tough but long term beneficial policies are adopted by that system, a 60 year old Republic is far ahead of an ossified dead wood of 234 years.

The best part of Dr. Singh's decision is latter - he wants to use this money saved in the Central budget for providing subsidies to national nutritional program and national education program. At this point it will be better to call Dr. Singh to give a speech to American Congress about 'what is leadership'. That might help our politicians to show some spine when they are gutting admirable program of our Ed. Sec. Duncan's 'race to top' to retain some incompetent teachers as per the 'last in first out' disastrous Teacher Union policy.

No doubt the political calendar in India helps Dr. Singh to inflict this short term pain - there are no major state or bi-elections till next year March (when West Bengal will go the state poll where Mamata Banerjee is waiting for the coronation as the Chief Minister). But that cannot take away the credit Dr. Singh deserves for this courageous decision. This will free balance sheets of State Oil companies which are unfairly punished while absorbing the true burden of these subsidies for so long. However, the adroit money manager what Dr. Singh is, simultaneously RBI is increasing the interest rate in a clear attempt to preempt consequent inflation bout due to the structural imbalances of Indian Economy. That is really smart. Matt Yeglesias can only dream of such co-ordindated and proactive policy from our own Bernanke Fed.

You see, in the end, not all economic successes of India (and China too) can only be attributed to demographics. You got to give credit where it is due. Now, one only wishes such wisdom dawns on our Congress and President. Yah, you never give up hoping against all odds. We are stuck here in USA with politicians who refuse to learn anything.

Sunday, July 04, 2010

Somber Birthday

America is not doing good. We cannot miss the 'malaise', it is just that the Jimmy Carter 'bad omen' which prohibits politicians from talking openly about that. Of many cogent cases to analyze America's sad predicament today, Robert McCartney makes one good case in Washington Post. (For sure, as and when the 'damn BP hole' in Gulf of Mexico is plugged, there will be some uplifting of American spirits. But that will come by August and things can still be wrong there too.)

It is not just on going two wars which are not going well, but we have American Hero Andy Grove exhorting Americans to get prepared for possibly a third war too when he says

"The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars—fight to win.)"

When the high priest of techno-capitalism, the Intel founder, entertains ideas of going against the conventional wisdom of free trade based capitalism; the situation is dire. In addition to Red-Blue division in the country and the ragging battle of 'deficit financed stimulus versus the new European fad of cutting deficits in recession'; we are now talking the intellectual confusion about our trade policy too.

That the situation is dire is clear from weak employment reports which come out month after month. The policy of raising deficit spending to kick start employment further is politically not getting sold. President Obama and Democrats have lost credibility here because expectations about the original stimulus spending ran ahead of what was possible realistically. Obama Administration 'over promised' there. On top of that when the frightening crash of heavy individual entitlement oriented economies of Europe is happening in front of our eyes, we have new health care entitlement passed in this country with at best limited controls on the heart of that spending - provider cost. Further, having passed this health care reform act in a manner which gives the impression that 'this is the best what we can do here'; there is simply no political appetite to reopen the debate about entitlement reduction. Core threats to America's Public Finances are medical spending paid by Federal government and our military commitments and nothing is getting changed there in immediate future. President Obama's Tax commission, which will be all news next year, will be only talking the revenue side of Federal Budget. However, America's problem continues to remain the expense side of the Federal Budget. Needless to say, increasing taxes or introducing VAT is not the real answer here.

At the state level, wages of public sector employees, their health care costs and their pension burden; all of that are essentially wiping out State Finances. (States of Illinois, New Jersey, New York and California; all are the representative basket cases here.) Again there is no concentrated showing by Democrats in controlling these high public sector employee costs. All of this is seriously curtailing ability of Democrats and Obama to sell any further stimulus. In minds of American Public, rightly or wrongly Obama agenda is perceived as 'wealth redistribution' agenda. Unless it gets changed to, or at least perceived accordingly, 'wealth creation' agenda; we will not see any possible movements by Congress to address our serious economic challenges.

After Nov 2010, GOP will exasperate this inaction further as well as possibly institute more austerity. All this means, the malaise and decline of America's economic well being will continue further. If at all America to address this colossal challenge of regaining prosperity, we will need Trillion Dollar infrastructure spending on 'smart electric grid, broadband expansion, roads and transportation improvements' along with continuation of education reforms as instituted by Ed. Sec. Duncan and genuine control on provider costs for health care. The key for any future spending will be what kind of political message it gives - as long as the spending is benefiting all Americans or communities at large rather than individual targeted entitlements (extended periods of unemployment benefits or individual medical benefits), there is a chance that it may be accepted more widely. This further needs to be complimented with concrete and enforceable commitment to reduce entitlement spending. Today's situation is neither GOP is talking anything like this nor Dems are in any position to enact any of these steps. Given all this, it is hard to be cherry on our national birthday.

Update - Bloomberg Businessweek has an interesting take about Paul (Krugman) versus John (Paulson). In a sense it is a classic take on what is happening and what is at stake. Paulson may get early wins, but as long as unemployment is not reduced, economic and political challenges to American State remain as is. One celebrated trader making more money is hardly an answer when lives of million people gone astray resulting in 'building of political pressure'.

Update II - If at all if one needs to know how Democrats are 'beholden' and 'totally sold out to Teacher Union even if it means pulling America down'; one needs to read how House is short changing America. Question is whether President Obama withstands this 'militant politics of Teacher Unions'. President Obama will do well for USA if he does not tolerate this Teacher Union pandering advocated by House Democrats. No wonder Americans cannot believe these Democrats when it comes doing something good for America.

Saturday, July 03, 2010

World Cup Commentary - Europe is back

As Spain squeezes by a solitaire goal over Paraguay, European Teams have fully exerted their traditional rights of dominating global soccer. When France and Italy failed miserably to get past group matches and when England and Portugal had ignominious exits (both against European Teams); Media was all gaga over the run of South American Teams (and unfortunate elimination of many deserving African Teams). But not only we have seen exists of tournament favorites Brazil and Argentina, with the defeat of Paraguay, the only non-European team left is Uruguay.

For a continent which is battered by bad economic news in recent days and has come to be known as the declining political power; these wins might help it get back some of its mojo and confidence. Especially for Spain, this win will be uplifting nationally considering negative news all around Spain in last few months.

The game was not good. Anytime penalty kicks are missed so blatantly, feeling of mediocrity is inevitable. It was only the superb passing game by Spaniards which kind of entertained to some degree. Considering the hype of Spanish Team, it should not have been so difficult for Spain to win this match. But now that it has won this match, it will meet European rivals Germany in the semi-final.

World Cup Commentary - German Masters at Work

England - checked (4-1), Argentina - checked (4-0); who is next? (winner of Spain vs Paraguay). That is the way German machine is unfolding in this world cup. Looks like in general European Masters are finally tightening up their grip in South Africa.

So what was flawless in this German victory - the defense which did not concede any goal or the attack which resulted in 4 goals on the back of clinical finishes? Probably both. Counter attacks, as usual, were exploited by the German Team flawlessly. At the end of the first half I felt unless Germany wins by a difference of 2 goals, it will not be an emphatic victory. For sure, the German Team delivered in the second half and ensured that the first goal in the 3rd minute was not a fluke. Looking at this performance, Germany's opponents will not have anything easy at all in the semi final.

On Argentinian side, the loss is bit sad. They played well so far in the cup and with a reasonable sportsmanship too. 'Maradona as the reformed child' was playing good in Media. He was successful to create a bit of sympathy for all the distance he has traveled so far from the darker corners of his life. So it was not easy watching Maradona desperately clutching to a rosary as he was praying for some kind of miracle. But when you are 3-nil down, miracles are hard to come by. Argentina still attempted for an attack play and continued to lob and kick against German goal post till the end; that was great to watch. Unlike Brazil, Argentina Team did quite well on the ground even though scores look different. Soccer scores do not tell a complete story beyond a point.

As usual Germans were good on the ground and their celebrations quite subdued and decent compared to melee and piles of bodies which have become mandatory in soccer celebration. Same can be said of German fans, they were well behaved. It is quite possible that given South African history with Afrikaners, most spectators in the stadium would not be finding easy to cheer Germans. So it was excellent to see African President Zuma and Chancellor Merkel enjoying exploits of German victory. That is good politics for all. By Merkel standards in fact she was the one who was bit excessive in her exuberance! But one can understand how exhilarating she must be feeling to go away from the treacherous domestic politics and enjoy some brief moments of national comity. Chancellor Merkel needs this break. All signs are pointing towards continued good refuge for the Chancellor in German celebrations in days to come. It is high time that the third consecutive appearance in World Cup soccer semi-finals better ends with the cup for Germans.

Friday, July 02, 2010

World Cup Commentary - Dynasty Is Out

No more 6th world cup for Brazil and that is good for Soccer. Holland is one of the most deserved national teams which has never won the cup. Holland symbolizes heart breaking losses, that is the imagery ever since Franz Beckenbauer slayed the magic of Dutch Total Football in 1974. So any time Holland defeats one of these dynasties of Soccer, one cheers.

Brazil generally never looses honorably. Usually they loose ugly and today was no exception. With a red card and all sorts of ‘dramas and fake injuries’; Brazilian Team was essentially trying to fill the well of sympathy back home. I doubt all that will work. With so many multi-million dollar worth pairs of legs on ground for the Brazilian side, the loss will not sit well with Brazilian Public and their sponsors who had paid bundles. There will be recriminations and all sorts of washing of dirty linen in public. The brand ‘Kaka’ will have to follow the path of David Beckham - future in modelling rather than on field. Dunga in all probability will pack his bags as the coach.

The good thing for Brazil is since the next world cup (2014) is in Brazil, they will get the automatic berth there. It would have been too much to see Brazil team in 2010 semi-final / final and potentially again in 2014 when their performance in last few world cups have been already so dynastic - 2006 (quarter final), 2002 ( world cup winner), 1998 (runners up) and 1994 (world cup winner).

So today's result is all good for the world of Soccer. Now it will be interesting to see how far the Dutch team will redeem itself in South Africa in coming days. Their game today was more work man like rather than flashy. They lost so many better chances to score the third goal. This Dutch team is not a magic team though one could see the glimpses in those ground hugging clean passes. Leave alone the original miracle of Johan Cruijff of Total Football, it is a hard act for contemporary Dutch Teams to surpass the glamour of Euro Champion 1988 Dutch Team (Marco van Basten, Rud Gullit and the company). But they deserved this win and one wishes good luck to them going forward. May be this Dutch Team will attain it's own glory; who knows.