Thursday, June 30, 2011

Smart Romney

What better way than to play a ‘genuine underdog’ to the incumbent? That is what Mitt Romney is doing here. Look at the background photo, how powerful it is to make a case against Obama.

I am not in a position to follow all nuances of Republican Primary race. But few things are very clear:

1. You are not going to get ‘constructive criticism of Obama’ from Mitch McConnells of the world as these Congressional Republicans are too blind folded by their parochial constraints. They would not hesitate to pull down America for their ideological reasons, but hopefully Republican Presidential candidates would start realizing enormity of the task; how to avoid yet another lost decade for America.

2. The only worth watching contenders are Romney, Bachmann and Pawlenty in that order where the odor of Pawlenty reaches to unacceptable levels. Bachmann is fun to watch, especially for creative ways by which she is trying to navigate the primary minefield.

3. But the real positive is Romney. He is doing good. He would not yet get my vote, but the guy is campaigning as like a real leader. Regardless of end result in November 2012 (abhi Delhi bahot door hai in Hindi, meaning - 'it is too early to predict'), if Romney stays on this course; it will be substantially positive contribution to American Political Discourse.

From Greece to USA

I was wrong to speculate that Greece would default, they avoided it by passing both bills. Looks like strong man Venizelos, the newly appointed Finance Minister, is making the magic. Good for European banks for postponing this crisis for a while. The other winner is French President Sarkozy. He is having all his ducks from IMF, to French Banks haircut to Libya all lined up; that is some effective politics there.

The crisis is not fully gone because medium term question marks remain. If Global Economy (including American) does not pick up in the second half of this year, we are very likely back to the square one third time in Spring of 2012. Further, it can be avoided only if Greek Privatization program succeeds and Greek population muddles through all the pain which is showered on them.

As like USA Today, one wonders, when would American Politicians show some gumption to come around their problems. More of fracas, grand standing and some nasty politics are all likely to unfold in America as the talks have failed and first guns in the political war have been shot. I can imagine White House would be going through which bills not to pay when American default occurs so that political pain is maximum to Republicans (like stopping Medicare and Social Security while paying full to Military) whereas GOP plotting how to ‘flub’ reasonable demands of erasing rich favoring tax cut loop holes as general tax increase. All in all ‘worst side’ of American Politicians will start unfolding. That is one way to celebrate 4th of July!

Update - This is why Politics is simply hard. While Sarkozy is doing good, one single news item can bring his opponent to a life.

Monday, June 27, 2011

Greek Default

It will be a surprise if Greek Parliament can pass the second vote of ‘implementation details’ in next two days. A ruling party minister has already sounded alarm and the potential for failure. It is too much for four or five MPs to withstand the torrent of protest which is underway in Greece. Even after both bills are passed - first the framework and second the implementation details - again it is a question of ‘collective will’ to go through all the pain in executing the plan. What Greek society is telling to politicians that they have reached the end of line here. If kind of tax proposals which are in the air (taxing low annual income of 8000 to 12,000 Euros too); it is understandable that why Greeks are balking at this stage. Even in USA your first $11K are standard deduction, so it is hard to accept that these new Greek proposals seem any fair.

Of course, this is not to argue that as a society Greece is not at fault. Fundamentally the mentality of ‘free ride from government’ seems to be well entrenched. Easy money, corruption, tax evasion and reluctance to undertake ‘roll the sleeves and let-us-get-to-the-work’ attitude; all that has contributed to this mess.

If this blogger can see writing on the wall that Greece cannot make it without default, rest of the folks in power see too. Hence the Plan B.

Basically, global powers simply want to keep buying time here. This is not at all about Greece or saving Greece Economy or ensuring whether Greece stands on a sustainable footing in the long term. As like any other state and society; those are the problems for Greeks to solve themselves. All this bailout and elaborate schemes are ways to delay the inevitable so that creditors get as much time as possible to sustain eventual losses. Greeks may have a point while this is all worked out - why make Greek people to pay such a heavy price then? Well, that is what happens to common people - they loose out in the short term first.

Is the strategy of prolonging this agony and charade any good? It is hard to say. General rule of thumb is sudden financial changes are always bad. In that sense, this continued saga is basically giving a breathing room to everyone to adjust. But Greek default looks certain. May be interested parties, including Greek Unions and People, are simply trying to stake out positions for the post-default world.

Friday, June 24, 2011

Darling of Progressives

The man who executes a neat deal with Unions, the man who delivers fiscal sanity and now the man who delivers same sex marriage - why would Cuomo not be our hero when Barack Obama is failing miserably? May be there are some smart progressives in this world, may be there is hope in this world and may be there is a place for progressives to live in this country.

Cheers to Andrew Cuomo, that is the way to go.

Update - No blog post on this subject can be complete without a hat tip to Andrew Sullivan. You don't need Dr. King every time. You just need to have basic 'humanity' to be an 'open' person. Thanks Andrew to make all of us bit more humans here.

Thursday, June 23, 2011

Cantor Ejects

Ezra has the straight forward take on what is happening. My impression is Boehner would in the end take on this challenge and with a full risk to his job he may even entertain making a deal between establishment (non-Tea Party) GOP, House & Senate Democrats and the President. And if he does, despite Tea Party, my sense is Boehner will survive and may even prosper politically. May be I am delusional here and underestimate abilities of GOP to push us on the brink of default.

But this is assuming that the deal is hard one for Cantor to accept. On the contrary all signs are that President Obama will cave into Cantor’s demands and shelf any revenue increase measures.

What Obama needs to reply to Cantor is - you Tea Party say that ‘stimulus did not work and government intervention does not work’. Even though it is a Trillion Dollar Price Tag, we only tried it for 2 years. But fair enough, we will wind down that policy. But then what about Bush Tax Cut Policy running for a decade with a cost of 4 Trillions? That has not worked too. So then why insist on that?

The deal is:
- either both parties wind down their policy of tax cut inducement or stimulus to move the economy and just focus on running the government as a tight ship with balanced budget (and hence expiry of various tax cuts);
- or both parties get equal opportunities to charge America in running their policies.

Allowing only one policy measure run amok while all other choices are closed, that is not politically fair. Is President ready to take this high ground? Why that cannot be a winning argument politically with Americans?

Sadly we all know, chances of Obama facing his ‘moment of truth’ are very low. That is abduction of duty.

Oil Moves

I like the timing of this move. Generally after Memorial Day, American oil price peaks and moves downward in anticipation of stabilization of market in Fall. I believe Oil prices generally represent demand 2 to 3 months down the line. So you want to do any such release when natural market price pressure is already going downwards. You add supply to that, the price goes down emphatically (expected to breach $100 per barrel mark, up to $90). It is easier to demonstrate effectiveness of your move in already downward moving market.

No matter what illusion American Economists have - reality is Oil Prices impact American Economy as like any other third world economy, say India. So it is bit of a stimulus for embattled American Consumers any time Oil price goes down. If that happens, political dividends to the White House are obvious and hence the outrage by partisan Chamber! Chamber in this case is a person with no cloths (as if they were at anytime...shush Evan Bayh is going to clean the Chambers). The other reason Chamber of Commerce howls here is Oil companies are the dominant group in that organization and any such ‘socialistic’ intervention by Federal Government produces a dent in their already ultra-high profits. When is the next Koch Brothers sponsored Tea Party agitation to ‘oppose any such renewed Socialism’ of Obama? It will be coming soon, it is on order. Or wait a minute, may be Tea Party members themselves would like this move, any move which dampens the price of oil?

Monday, June 20, 2011

Kicking the can down the road

“Eventually, this White House has to figure out how to make Republicans say yes.”

No, I would say Obama White House is all interested in ‘kicking the can down the road’, keep paying the ransom demanded by GOP and just simply bid the time as much as possible all the way to the end of his first or second term assuming Obama gets elected.

Now it is true that President Obama mildly surprised progressives at 2010 year end by brokering a deal with GOP and he can do the same again. But remember, the deal then was about ‘how much to charge’ to America’s Credit Card; meaning all borrowing. Now we are talking about how to pay the ‘racked up’ charges so far. So it is fundamentally a different ball game which GOP always makes it one sided by sticking to ‘no tax increases in any circumstances’.

So long as President Obama believes that ‘confrontation with GOP on taxes’ brings more misery than any good to Americans; all of America’s political deals are going to be one sided and in the longer term much more harmful. Glance any Wall Street Journal edition and it is full of ‘made up benefits’ of tax cuts to rich. In the end, President Obama has simply allowed this non-sense to rule, and to ruin, America. He will be party to this mess because of his excessively conciliatory approach to his political opponents who are nothing but protecting interests of ‘rentier class only’.

Sunday, June 19, 2011

Sun is setting for Gates

“I’ve spent my entire adult life with the United States as a superpower, and one that had no compunction about spending what it took to sustain that position,...It didn’t have to look over its shoulder because our economy was so strong. This is a different time.…

To tell you the truth, that’s one of the many reasons it’s time for me to retire, because frankly I can’t imagine being part of a nation, part of a government … that’s being forced to dramatically scale back our engagement with the rest of the world.”

That is what happens for a country which refuses to address the core problem of uncontrollably exploding Medical Costs, the country which refuses to come to an agreement about how to grow and the country where half of Politicians (Republicans) never ever consider widening wealth gap as something which is pulling this country inexorably towards a banana republic, towards a failed society and that such a gap needs to be addressed.

Friday, June 17, 2011

Happy Father’s Day

“It’s WASP rot. They drop out of the country club. The drinking eases the pain. They don’t pull Ted out of college; he quits and says he wants to be a chef. The daughter ends up living with a jazz musician who beats her.

It’s as if they, and the United States, have lost their luck.“

God Damn it, but I came to this country and became a father here because I thought this country always finds it’s first love in the end - American Pragmatism. Where is that Pragmatism today? I do not see her. Does Congress know where she is? Do any American know?

Daley Be Diligent

Don’t just be frustrated and throw your hands in air. What we need is the White House which follows diligently each and every request and complaint raised in this darbar. Doing so will do two things - if complaints and requests are not appropriate or without any merit, it will help put dent in the meme that Obama Administration is over regulatory and if these issues are indeed genuine then the White House gets ready made opportunities to demonstrate how it solves ‘now and here’ to promote business and consequently employment.

Until any magic wand for employment is pulled off, we need this White House to be ‘ultra responsive’ to valid needs of businesses in America. Practically we are talking about some kind of ‘America’s Program Office’ in White House. Say anytime any business in America is generating more than 1000 permanent annual jobs for at least 3 years, that case can get attention of an under secretary. You are talking 5000 jobs, you get attention of a secretary and so on all the way up to President. Why not if that helps to create jobs in this country? Businesses would love such kind of ‘personal attention Socialism’ where White House is actively involved in doing their bidding. As long as it does not result in crony and corny capitalism, anything that brings jobs quicker to America should be welcome. One does not have to wait till Tim Pawlenty Presidency for American Bureaucracy to adopt Six Sigma.

So Daley, you do not get a chance to be frustrated and simply tune off.

Thursday, June 16, 2011

Reduction in Tax Expenditures

Sen. Coburn and Sen. Feinstein set the ball rolling here. Question is how far along House would come on this path. House Money Boss Rep. Ryan is positive about it, but we will have to wait and see. Now that GOP is at least ready to put stop losses on tax expenditures, real questions are - how far such reductions will be there in the final Debt Ceiling Deal and will GOP take the next step of even any increase in taxes. Later part seems unlikely and the deal will have to be settled on the first part only.

President and Market would take that. Everyone is anxious given the backdrop of Greece, where default is mere formality. No one wants addition of escalated American problems to the toxic mix of unstable Middle East / Arab nations and Europe downing in the mess of its own making.

Sunday, June 12, 2011

Erdogan - Strongman of Turkey

It is not a joke to get elected thrice in a row and rule an emerging democracy like Turkey for 10 years. That is what Edrogan has done. Quite a performance for a political leader with a reasonably clean record. Without the strong economic growth under his rule, this would not have been possible. (Barack, do you get it? When is Erdogan visiting your house Barack, so as you learn few tricks from him? Any state dinners planned?)

Despite a setback in Libya where Edogan was loath to cut short his warm relations with Gaddafi, Turkey is all set to continue its ascend in Middle East. I do not share fears of ultra-left that Erdogan would bring an Islamic rule. Turkey has been sufficiently Europeanized for her to go under so easily to a regimented life. And there is no harm if Turkey’s Army gets little bit boxed further. For a country like Turkey - midsiz, aiming to become a Trillion Dollar Economy and with relatively not so direct military threats - total civilian rule is all fine.

Just because American Politics is broken does not mean that there are no other countries who do not get their politics right. It is glad to see, so many People of the World are taking their destinies in their hands and making wise collective decisions.

Saturday, June 11, 2011

My Choice for IMF

But as Dr. Doom - Roubini - says in this article, he is late to the game. By throwing her cap for a while in World Bank Presidency next year, Hillary created a tantalizing buzz of ladies heading world of finance. But as the buzz died down and reality of ‘double dip’ checks in, what better person than a very competent banker Fischer?

Not going to happen is a different thing. By now we have learnt that more things ‘which ought to happen’ do not happen in this world.....

Thursday, June 09, 2011


GOP Tax Cuts any time is a classic example of this ‘now-more-than-everism’ syndrome.

Tom Friedman’s insistence for American brokered Middle-East Peace Plan comes to mind as another example. Grape wine, or conventional wisdom depending upon how well versed you are with Washington DC political parlor, is on the insistence of Friedman and Fareed Zakaria, President Obama uttered words about 1967 border and then the world turned. It turned, Bibi came out victorious and nothing else is going to happen there. Experts (e.g. Aron Miller) took Obama to task by asking what did he achieve by uttering those words?

My argument is Obama’s play here is to bring some distance in American Policy from Israel so that it gains required independence in deflecting impeding ‘isolation’ at UN when Palestine brings the resolution to recognize their nation. But if you discount this argument, then indeed whole of that fuss about 1967 border has been a loss in the end.

As we know, Truth does not matter in Politics and what matters is what your are able to sell. So all this impulse of Friedman / Zakaria duo under the heavy influence of ‘now-more-than-everism’ essentially again resulted in a loss to the White House. Reality is Israel will become an apartheid kind of state eventually and then in few decades upon uprising by a Jewish Mandela; things will be resolved. Till then job for everyone will be how that ‘tinder box’ does not explode beyond a limit. Other than that, America needs to forget this urge to midwife ‘peace’ and let those players themselves handle it.

Update - I think Jewish Mandela is a wrong analogy. It should be Arab Mandela.

Saturday, June 04, 2011

Insular American Politicians

For decades I had been raised listening Indian Politicians blaming ‘economic situation' outside of the country - typically Europe, America and Oil Producing Middle East - as the reason for economic failures on domestic front. This was before upswing in Indian Economy which started in 1992 when Dr. Singh helped open Indian Economy to the world. Such ‘blame to outside causes’ used to be valid to a certain extent because Indian Economy indeed been vulnerable then as it was hardly a fraction of today’s more than a Trillion Dollar Economy. But a part of the reason to blame outsider was to hide incompetence and insularity of Indian Politicians too.

Considering the trajectory of American Economy and Political Economy, I had been sensing for a while that eventually America will need to start understand the impact of global clues. President Obama pretty much did so today and weak / minnow status of American Economy is now officially confirmed. What a fall from grace to American Economy!

It also implies that ‘de-coupling’ of global economy from USA is happening quite fast. Weaknesses in certain parts of global economy now have magnified impacts on American Economy. It used to be the case that whenever ‘America sneezes, rest of the world’ catches the cold. It is kind of reverse now - American Economy is the ‘sick man’ of global economy and its sickness is much more chronic whereas large swath of humanity is learning to move on. Of course it is good for rest of the world, while it is tragic for America.

Paul Ryan wants to fight this ‘declinism pervading in America’ and he claims this declinism is essentially embodied by President Obama. Paul Ryan has a simple solution for this predicament - cut entitlements brutally and cut taxes and then magic happens. These ‘dream merchants of Republican style snake oil peddlers’ never go away and that completes the Republican Part of Insular Politicians in this country. They all work for Grover Norquist, representing America - that is a second thought if possible.

President Obama and Dems are the other part of this culture of insular politics. They have equally contributed to make ‘deficit cutting’ as the number one issue in Washington DC when it should have been employment generation and growth. Imagine if President Obama had been saying all along - he is all in for ‘deficit cutting’ but let us not loose the sight of job growth while such growth need not come by increasing deficit. His focus in job growth peters away after few speeches and we are stuck with depressing economy as a result.

The fundamental reason is GOP has successfully made the case with Americans that the government in the end is simply incapable of generating any meaningful growth. Of course, they refuse to realize that just because American Federal Debt is reduced does not mean businesses are going to hire new employees. Businesses would hire when they see the demand.

Today demand in USA is cratered. For all successful American companies like Apple, Intel, Cisco, Microsoft and Boeing; more than half of the demand is outside of USA.

How long would you argue then that phony over-regulation by Obama Administration is thwarting businesses? Solution is not to relax regulations so much that more of BP Gulf Crisis incidence happens. Otherwise Fukushima is staring in our face.

Supply siders do not bother about the demand and hence we continue to limp. As a class, the entire set of politicians in USA is essentially turning its back on Americans in need; to continue their ideological games in Washington DC. ObamaCare and Obama Stimulus are turning out to be far more costly affairs to USA because those essentially ended any political acceptance for governmental intervention to create demand or solve any other domestic problem. GOP may gloat on that, but how does that gloating make life of a common American better?

As like Japan, we know having democracy and elections hardly result in better lives for people. (That is the main attraction of Chinese System and with these extreme insular tendencies of American Politicians, American Politics is fundamentally giving a fillip to more wide spread acceptance of the Chinese Model .) That is where American Politics going. Congress is becoming more and more irrelevant to lives of Americans.

In India, pervasive corruption by Politicians finally prompted non-political entities like Baba Ramdev and Anna Hazare to force politicians to listen demands of common Indians. It is still work in progress. May be that is where American Politics is heading. In that sense it is a victory of Conservative Ideology - convincing Americans that Congress is least capable of solving their problems and hence they themselves have to mend outside of American Political System. All those over arching claims about American Exceptionalism and triumph of American Political System - may be time has come to throw those propositions to a dustbin then. And meanwhile American Presidency, it is possibly no different than the ceremonial office of Queen of England. May be Obama would have got some tips from her about how to be more irrelevant to lives of Americans in his last trip to UK.

Thursday, June 02, 2011

Japan - Descend Continues

There seems to be no respite to Japanese woes. Many are natural calamities, but lot many are in their own hands too. (UN criticizing anyone? That is not heard often except in regard to Israel. So now even UN is taking pot shots at Japan. That UNSC seat? Forget about it.)

I thought it would have been no brainer to let continue the unpopular PM Kan in order to have the dirty laundry done and then political bosses reaping fruits of all this cleaning done by the previous guy. That may be happening, but I guess Japanese back benchers and people need to allow some sufficient time to PM Kan to clean the house (literally and figuratively) as much as possible.

Medium to longer term - there does not seem to be any catalyst for Japanese situation to improve and so Japan seems to be on its way to the ‘third decade lost’.

Wednesday, June 01, 2011

Speaker Boehner - Showing Some Leadership?

On dark days - when economy is showing one bad number after the other - it is not Rep. Ryan’s standing ovation ‘kick a**’ spanking to President which is showing any leadership. His criticism of President - well, as usual very well misplaced - this President showed leadership when he exhorted his Dem Caucus to pass ObamaCare despite all the demagoguery by Republicans and when he presented a plan for $4 Trillion deficit cut.

Rep. Ryan - he is going Palin way; all applause but no service to Americans.

It is Speaker Boehner who is showing some wisdom when he says:

“We’re not going to solve America’s problems by cutting spending alone. You have to have real economic growth,” Boehner said, citing uncertainty about tax rates and government regulations.

Of course he played to his tune implying Obama is creating uncertainty about tax rates (by way of insisting upon tax increase); but stating inadequacy of spending cuts is the first step for Republicans. That is a good acknowledgement. Rep. Ryan - he is all for getting ‘cheap applaud’ on the clueless context of Palin and Trump. Anybody can pull off the posture of intellectual rigor when compared to Palin and Trump. That is not the leadership. Who knows, may be Speaker Boehner is on his way to demonstrate some leadership as a mercy to Americans.