Monday, January 30, 2012

Tax Cutters Gone Wild

It is all right for past Senator Simpson of Simpson-Bowles fame to blame Obama saying he got terrified and hence dragged his feet in proposing deficit reduction; but not all right to point out what is obvious - how GOP candidates are out to 'sell this country totally and make it bankrupt'. Apparently, the bright bulbs at Washington Post have finally woken up and now pointing out what is so obivious - how these GOPers are placing their faith on totally discreted economic policy that tax cuts to rich generate jobs and under the influence of the 'this drug' are proposing more tax cuts to bury America once and for all. 

This is one example of how Tea Party Supporters and Members defy simple logic when they ignore how proposals of their candidates would ruin this country further. Hopefully more in Media start voicing this non-sense without which Americans will not have any clue what damage GOP is all set to do - more tax cuts to rich in the name of balancing deficit and in the process to dig deeper a hole to all Americans (because no GOP candidate in Florida dare to talk about how Medicare cost will be adjusted).

"But if the candidates can’t level with us now, they’ll have no mandate then. "

That is right, Barack Obama and eventual GOP nominee; all are their to 'deceive Americans' and then enact some non-sensical policies after November election which may or may not have anything to do with our deficit crisis. That is a perversion of Democracy and Barack Obama is equally party to that as like GOP. Obama can point out that he proposed his plan when he accepted $4Trillion deficit reduction plan during the debt limit increase debt of Summer of 2011. He needs to keep that offer open on the 'table' and then keep on hammering GOP to come forward to accept that or face the election of 2012. That honesty for sure is missing from the President. One never had any expectations of such honesty from GOP jockers. But Barack was supposed to stop joining the rank 'sell out' of America which GOP candidates are undertaking and he has failed in that. 

As of today, there is nothing apart from 'crushing of America' under the ever escalating debt. We as a nation are destined to follow a path traveled by Japan and Europe unless some kind of political revolution occurs here.

Saturday, January 28, 2012

Indian Cricketers don't want Accountability

There is no other interpretation than this when one reads Sehwag saying 'there is no need for anyone to retire'. Look at their numbers:

Innings 50s 100s Total Average
Sehwag 8 2 0 198 24.75
Gambhir 8 1 0 181 22.62
Dravid 8 1 0 194 24.25
Tendulkar 8 2 0 287 35.87
Laxman 8 1 0 155 19.37
Kohli 8 1 1 300 37.50
Dhoni 6 1 0 102 17.00
Ashwin 6 1 0 163 27.17

And here is one dire assessment

India's greatest bowling squad - Bedi-Chandra-Prasanna all got creamed in the 1978 Pakistan Tour when Javed Miadad and Zaheer Abbas tore them to pieces and made that bowling squad to rest in peace permanently. That is the same job done by this Australian Team to India's greatest batting squad of Sachin-Sehwag-Dravid-Laxman.

Still these multi-millionaire players don't want any accountability. Ian Chappell may like to put a finger on what is wrong with Indian Cricket - the 'star culture'. But I doubt BCCI and Indian Players are in any mood to listen to anything. The only language Indian Players and BCCI understand is 'ringing the cash  register'. When these collapsing TV advertisement rates for Cricket start to pinch, these inflated egos and 'free rider mentality' will have a chance to go away. Till then shenanigans of Indian Cricket Players will continue. 

Wednesday, January 25, 2012

State of Union

No, the most important event was not Obama speech to Congress. The most important events were:
- dare deviling act undertaken by Bernanke in his second coming after saving American and Global Economy in 2008; and

That is what Obama speech attempted to ride on - fair share argument and he did not make much persuasive argument; Romeny did that job. 

No matter what some nuanced commentary says, 'fair share argument' is fully entrenched and Obama is determined to exploit it for his re-election. The good part is America needs that argument. But that is politics. One way or the other it will get resolved by November 6, 2012. What matters in between is Bernanke Revolution II. Great job Ben, keep fighting for us. (Barack, you may get our vote but not yet our minds and hearts.)

Saturday, January 21, 2012

Broken Party

It is hard to write anything good about Newt Gingrich win in South Carolina today. Generally SC brings worst of GOP and today was no exception in electing a 'garbage can' in the nomination race for the sheer 'hate' of non-Christian Romney. Of course, Romney's own dilly-dallying about taxes and lackluster performance in debates did not help him. But fact of the matter is Romney has engaged in much less kind of Washington Politics Gingrich practices - pure lust of political power, selling that craving for power to misguided Americans as principled following of an ideology and in the process basically giving 'shaft' to real needs of real Americans. This is how Gingrich has been all along in his career, except  last few years interrupted by shamelessly working as lobbyist. The guy does not have any shame in personal life nor in public life. All his intelligence goes in dazzling public so that all his true weaknesses are hidden. Nothing good is likely to come out by his candidacy. He is the evil spirit - he will bring worst in himself and will do same for others. 

Ok Umesh, we got it. But tell us, how will he be in White House? May be actually not that bad. That is basically because Newt can be 'bribed' and Democrats in Congress will bribe him. If and when he gets elected, he will have so many enemies in GOP that there will be many 'one night stands' with Democrats. Exhibit A - love couch photo with Nancy Pelosi. And that is why it is perplexing that GOP is backing this rotten to the core horse.

Florida will be tough now. The state GOP is getting its wish of playing a 'king maker'. Jeb Bush is likely to endorse Romney at some point and then it will be interesting to see what filth the 'gutter named Newt' brings. All that means, GOP's nightmare continues at least for few more weeks.

Basically, GOP started with a weak slate in the first place. Romney had always been only B+ candidate. All of their A candidates like Indiana Governor Mitch Daniels or New Jersey Governor Christie or even Rep. Paul Ryan; they all stayed out. Add to this weak field, the whole farce of Newt Gingrich. This cannot be any good news for GOP and consequently for America. Thank God tomorrow is league championship of NFL so that it will help little bit to forget all this sorry affair.

Update - Jeb Bush says he will not endorse Romney yet. But don't worry, Newt nevertheless will continue his ultra negative campaign. That is because he does not have anything positive. 

Tuesday, January 17, 2012

Reelection Prospects

Ezra Klein is right to compare Andrew Sullivan's 2007 case for Obama in pages of Atlantic with his current case for Obama in the pages of Newsweek. Both are seminal, much better than what the vaunted Obama Campaign can produce.

But that aside, Ezra is correct in saying 

"If Europe manages its problems and the economy grows steadily in 2012, Sullivan's take on Obama's record is going to find a lot of support. If Europe falls apart and the American recovery slows to a crawl, the retrospective evaluations of Obama's presidency will not be so kind."

My take - it is possible that despite Greek defaults, Euro manages somehow to peddle through the third year of this crisis. Chances of American Economy holding on that context are bright, especially given that China will not hard land.

The real wild card is Iran and Oil Price. Come Spring, as usual prices will start climbing in USA. Today the oil price base is high meaning by Memorial Day to Labor Day it is very much possible that gasoline will be over $4 per gallon in USA on sustained basis. There will be the political drama of releasing Oil from Stategric Reserve and GOP pouncing Obama for Keystone Pipeline as if like a magic it will be build in no time and start flowing the Canadian Oil to USA. (Look for #8 question in Ponnuru's list - despite multi-billion dollar American Media, American Media will not ask such basic questions to our presidential candidates.)

Irrespective of what anyone says, history clearly shows that spikes in Oil Prices contribute to the recession. In Summer of 2008 price of Oil was very high - $140+ and then the recession followed. So the real danger is of Oil Prices. Besides Iran & Israel can always do crazy things to lit the fire in Middle East. I am not sure Political Analyst, including Ezra Klein & Andrew Sullivan are considering this possibility seriously. All we know, suddenly the whole thing can flare in the face of Obama and his chances of re-election would simply immolate in that chaos. 

Sunday, January 15, 2012

Reality Check

After a beautiful weekend filled with Sports & NFL, what you hear is you cannot go against the political gravity. Seems like Romney is the nominee of GOP contesting against Obama. 

Just like Greece reality does not go away, you have to wake up to Mondays and face the world as it is rather than what soothsayers say about.

Down Under Misery (Test Cricket)

With back to back heavy home away series losses, (first England and then followed by Australia) the entire sheen of Dhoni's World Cup success is gone. So when he admitted he is the main culprit, it is all true. The guy simply does not seem to have any heart in these series, even though it is true that his Team thrashed the same English Team in India subsequently; but that was at home. As like New Orleans Saints Football Team would confirm, what matters is the home away win.

May be the core reason is so far he and Indian Cricket Team have not been required to 'pay any' price of these utterly despicable performances. It is rare for a Test Cricket team to incur back to back innings defeats. Indian Team has completely given up to put any resistance. BCCI is talking about easing out VVS Laxman and I hope possibly Virendra Sehwag too followed by Rahul Dravid and Sachin Tendulkar. But BCCI needs to execute on that. With seniority in sports, one expects these seniors to know when to time out there exits. Apparently that is not the case here. These players are carried away with their grandiose sense of achieving larger than life cricketing achievements. But they are not able to 'walk the talk'. As BB King would say - 'the thrill is gone baby....'.

Even new comers did not do well. Except for couple of half centuries in 6 innings, they hardly stayed on the pitch. Same with bowlers too, except for one or two performances; nothing much to notice. But as Gavaskar said, it is much more preferred to lose 0-3 with younger players than these oldies who are in their twilight and hardly any addition to Indian Sport.

Sheer basic competence, mental aptitude and willingness; all those are missing with visiting Indian Team. But the root cause may be that Test Cricket hardly brings any money to these players and their gold mines are IPL, 20-20 and 50 over day matches. In that sense, their interests are simply not aligned with their performance in Test Cricket. Hence 'grandiosity in statistical records'; that is the only motivating factor. No wonder you see so many old players selected on their reputation rather performance. Corollary to this second class treatment of Test Cricket is no interest for BCCI in making 'fast pitches' in India like WACA at Perth and decades after decades Indian batsmen continue to struggle with fast bowlers in home away series. 

Already advertising rates for Cricket are heading south in India and even though Test Cricket does not make much money for players and organizers; the consequent negative publicity is actually harmful to the business of Cricket. Test Cricket is not dead in the court of public support to an extent where it can be neglected completely and hence Cricket playing nations cannot very easily turn away from that. No matter how much fans of shorter version of Cricket deride Test Cricket, most people in the end come to the conclusion that ultimately it is the Test Cricket where pure cricketing competence, extra-ordinary team play and leadership by the captain; all that manifest. The best in cricket is in Test Matches. BCCI and Indian Team have no choice but collect pieces from here and build a good team.

Kudos to Australian Test Cricket Team for their performance. Before start of the series, they were looked down upon as presenting an opportunity to Indian Team to win a home away series. But they have demolished the Indian Team in a royal fashion and laid down foundation of possibly yet another ascendancy of a great Australian Team. This series win will give good confidence to Australian Team. They cannot be carried away by this success as they need to prove their mantle against top teams of England and South Africa. Nevertheless it is a great start for post Ricky Pointing era.

Saturday, January 14, 2012

Busy Weekend and Great Start for Bay Area

4 lead changes in last 5 minutes between San Francisco 49ers and visiting team New Orleans Saints. Great game for 49ers and fantastic last minute football by Vernon Davis of 49ers. So after a long time a Bay Area Team has a shot at the pinnacle of football

So that is the first of the 4 top class NFL matches scheduled for this weekend. America is busy (and oh ya, it is all worth).

Update - Politically incorrect, but I just enjoy the way Tebow was creamed today by Tom Brady and New England. Of course, Teabow is a good player and he has future to come back. But today, the day was Coastal in America - Left Coast and East Coast cursing further in NFL.

Wednesday, January 11, 2012

Obama in Trouble

It is still early for November Election time, but things are not going well for President Obama. Here are 4 signs:

3. Way too early explosion of one of the most potent weapons against the presumptive opposition (I am with Joe Klein here, indeed it is bad for Democrats that Bain issue came so early and worst that it would not sink Romney candidacy at this stage as Newt starts backtracking.)

Can Obama do anything to reverse this? I am not sure appointing a devout Jew as the Chief of Staff is going to bring Jews of Florida on board; even if another prominent Jew Opposition Leader likes the choice. It is helpful but way short of what would be needed.

Obama has lot of heavy guns gathered / gathering in Chicago to work out the politics of re-election - David Axelrod, David Pluffe, Robert Gibbs, Jim Messina and now joining Bill Daley. But I am old school, so my prescription is nothing dramatic - Basically, the problem with American Politics in last few years has been 'over reach' and 'misplaced mandate reading' by elected representatives, senators, governors and presidents. Because American politics is so divisive in last few decades (no overwhelming majority for any party or ideology or policies); elected folks are very much tempted to drive a hard bargain and push the ideological envelop as much as possible. Thinking is you never know when you are going to get the next chance to implement your pet policy proposals. This overreach pisses of Americans, for valid reasons, and then we get opposition folks in power. Again they misread the election results and continue the gamble of ramming their pet policies on essentially centrists America. (For those from India - it is Tamil Nadu on national scale; keep switching political parties in power...)

Obama did campaign on the platform of Health Care Reform. But Americans thought that with 2008 recession raging all over the place, Obama would give first priority to fixing Economy permanently (say Tax Reforms and deficits). That did not happen and ObamaCare passed even though it is a helpful policy for Americans in the longer term. To compound the issue Obama failed to defend the utility of ObamaCare - how it helps to reign in the continued health care cost increase. To worsen the problem, he turned to 'mandate' which as a candidate he was not enthusiastic while campaigning against Hillary (who was pro for that). And worst part was the process of making the ObamaCare law - Obama left erroneously crafting of ObamaCare to Congress for too long and engaged in exactly abhorring 'backroom' politics like Nebraska Cronhusker which he had campaigned to avoid as a part of altering the culture of Washington. So in a nutshell, people felt ObamaCare as the overreach, politics as usual and Obama never took the pains to defend it.

Given all this, there will be two things American will be looking for:
- Would Obama take care off rendering a vision where his policy prescriptions are well laid out with a little room for anyone to speculate what would Obama's second term bring and
- Would Obama generate enough trust among Americans to believe that he will stick to this vision rather than wandering to fantasy land of Leftist Policies barring some crisis.

That is the core requirement here. Bashing already unpopular Congress or to chase populist inequality in America - all that is fine but unlikely to bring him the necessary votes. He has to generate the above mentioned trust while continuing to make difference in lives of Americans concretely by executive power driven policy implementations. 

So is he there? Not yet and until then his chances of re-election will continue to dim despite how pathetic Romney candidacy is.

Sunday, January 08, 2012

Tobin Tax

Looks like UK PM is digging deeper in his confrontation with EU for the financial transaction tax called Tobin Tax. It is understandable that he would be concerned about protecting Finance Industry considering its importance to London and how important London Economy is to overall UK Economy. London GDP is at around $600B whereas UK GDP at around $2400B i.e. $2.4 Trillion; so roughly London Economy is 25% of UK Economy. 

However, such opposition by Cameron to Tobin Tax will paint him more in the corner as protectorate of Big Finance and Bad Bankers of Capitalism who brought the global economy to kneels recently. This will be despite all his talk about trying to give share holders more power about executive pay. (Reforms so as share holders have last say on executive pay, Cameron should do those anyways as that is a right step so that his counter parts across the Atlantic in America would learn a thing or two too. The Tea Party which is so alert about rights of tax payers hardly bothers 'rights' of share holders and that is how Tea Party becomes a stooge of Capitalists rather being a force to fight for little people.) 

Cameron's Liberal Democrat Partners are already piqued by his protection of Big Finance. Opposition Labor is essentially eating the lunch of Liberal Democrats while Cameron Conservatives continue to carry the water for Big Finance and Cameron continues to play to the gallery of 'deep blue backbenches' in confronting EU. What we are seeing is 'class warfare' in starkest term. Capitalists are smart, they would never give an opportunity to create an open confrontation. But Tobin Tax issue is basically unveiling of this smartness forcing 'protectors of Capitalists' to come out in open.

There is no chance in the world that Americans would agree for any kind of Tobin Tax. That is what Tea Party is all about - no taxes in any case. Occupy Wall Street and all that; that hardly scratches with obdurate GOP in American Politics. GOP is on the journey of falling over the cliff while going with ultra-conservative stridency and not even Santorum's feral cry for Blue Collar Jobs likely to help here. Tea Party driven GOP is 'drunk on it's love with principles'; principles of zero or minimalist intervention by government including tax collection. In other words, unless the 'end state of GOP intransigence' is achieved - either electoral route or bringing whole America down as like how Bush's ill fated Iraq war pulled down America - America is 'tone deaf' to anything like Tobin Tax. You cannot talk Obama or Geithner or Democrats preemptively 'trading Tobin Tax with Tea Party for something else' unless in the first place GOP is ready to see utility and validity of reigning Finance Sector. There are no such signs.

For France and especially for Germany, it makes sense to support Tobin Tax. The entire German Economy is based on non-finance sectors, especially export driven high end manufacturing and France would like to emulate that in one way or the other. Economy like Sweden, which is in EU but does not use Euro, may be interested in such arrangement too since High Finance is not something which brings worthwhile wealth to Stockholm houses. Same goes for Spain, Italy, Poland and many other new members of EU. Germany wants to shove down the throat her manufacturing driven economy model for every other Euro member and in some sense everyone of them also sees salvation in that route. Tobin Tax perfectly fits in this agenda.

Is this good then? Types of Larry Kudlow would never back anything like this since for them it is 'government picking winners' or like in this case 'government pulling down a sector'. One can imagine how in particular it will be painful to type of Kudlow for whom basically the first love is Finance. (Kudlow Gets Angry in Columnist Confrontation)

I am more on populist side in this debate. Santorum talking about encouraging Manufacturing Sector is good, but with GOP or without GOP; in the end prosperity of America and country like UK is intimately tied with controlling High Finance which has gone amok in recent decades. Given all this, Cameron trying to hitch UK acceptance of Tobin Tax to global acceptance is essentially backdoor way of exploiting Grover Norquist Pledge of Tea Party members of House. He knows very well that, lunatic opposition of Tea Party Members to any tax will do the 'dirty work' for him. UK PM Cameron is simply trying to get a 'free ride' here. 

Wednesday, January 04, 2012

Capital Ignorance

Generally erudite Clive Crook pens a very poor column in Bloomberg making a case for Capitalism. You do not need any brains to argue how Capitalism is superior to long dead Socialism. But comparing Capitalistic System with a long gone relics of history hardly equips us to deal with what we have to address today.

Fundamentally, the Anglo-Saxon (American and UK and I specifically want to exclude German and Swedish systems) Capitalism is determined by primacy of Finance and hard money capital (read Wall Street and Bankers). Finance being the most dominant force, in America our system cannot control the 'short term benefit at any cost' mentality of Bankers. That irrational exuberance caused Clinton-Rubin-Summers fueled Dot Com boom & bust at the turn of century and subsequently the Housing Bubble encouraged by Bush and Greenspan. In other words the way Capitalism is practiced in America and in UK, 'bubbles' cannot be avoided and bubbles cannot be controlled. Simply stated, we do not have a system in place by which chances of bubbles are minimized in the first place and bubble aftermaths are healed quickly without weaker sections of the system paying dearly. American and UK systems do not have the necessary 'social compacts and work sharing ethos' in decreasing the cost paid by employees during recessions. CEOs continue to reap advantages while rank and file workers pay the price - that is a too often picture in these Capitalistic societies. The resultant livelihood raptures for vast swath of population devastates economic and social fabric from time to time. All that in the end would show in typical 'setting of sun' on Anglo-Saxon economies.

Those are the core problems of American Capitalism. Singing paeans to Finance dominated Capitalism or loathing Occupy Wall Street or simply adopting 'straw man strategy' in elevating Capitalism while comparing no more practiced Socialism; all that hardly resolves contradictions of today's Capitalism. You do not need Karl Marx to see what is wrong with our system nor the alternative needs to be Socialism.

What we need is 'making of a political case' in pin-pointing this challenge of bubbles and political will to deal with that (have you seen relentless attempts by GOP to gut Frank-Dodd instead of further inoculating our financial system from new bubbles?). 

Monday, January 02, 2012

Iowa Caucus

Now that Newt Gingrich balloon has been properly deflated and the circus of Herman Cain gone, Romney has asserted his presumptive nominee status emphatically. He had not invested so heavily earlier in Iowa, wary of evangelicals; but has sized an opportunity in recent days and has established himself the front runner. This is a strong and politically positive show by Romney.

Not for nothing you get Ross Douthat writing so eloquently about Ron Paul and that is showing in his strong polling in Iowa. He has the game there and he is all set to exploit it fully. The way he is making 'unpalatable' policy positions debated in GOP, this campaign is lot more constructive for America. Of course, his bogus theory of Gold Standards and Fed Demolition has been thoroughly deconstructed by Paul Krugman. Further Rick Santorum has argued effectively perils of extreme 'international isolationism' advocated by Paul. In other words I agree with Douthat here, Paul's campaign - leaving aside questions about his commitment for racial and social equality - brings positives; but it is hard to imagine President Ron Paul; nor it will be a good presidency for America.

That leaves the true star here - Rick Santorum; the candidate who has gumption to talk about Capital Gain Tax and to take on 'supply siders'. Of all the GOP candidates, it will be Santorum who will give 'run for money' to Obama in the Mid West / Rust Belt states where he is arguing for 'blue color manufacturing' jobs to the hilt. 'If you do not accept layoffs of Bain Capital, then to go to Moscow' line of argumentation of Romney is completely blown away by this Santorum Populism. This is the exact kind of 'populism' America needs desperately to address the inequality we are witnessing all along. There is something to the Santorum candidacy that none of other GOP candidates are bringing - authenticity and principled policy ad-vocation. Romney's phoniness, his rich Capitalistic slash & burn privileged background and his endless flip-flops; all that make him pale compared to what Santorum brings to the table. WaPo blogger Jennifer Rubin had been mentioning Santorum Campaign positively all along. Likes of her get attracted to Rick Santorum candidacy for his consistent Conservative policies. On Social Policy he is a hard liner and for any Liberal it will be hard to accept his policies. But between the choice of 'tax cuts for rich' and 'social conservatism'; Americans will accept 'social conservatism' any time so long as 'fundamental and equatable economic order' is proposed. That is the true opening for Santorum in the general election against Obama. One can very easily imagine that all of West Virginia, Pennsylvania, Ohio, Michigan etc. Blue Collar White Hillary Democrat types will flock to Santorum deserting Obama and defeating him in the battle ground Mid-West & Rust belt. Among GOP candidates, Santorum poses the greatest risk to Obama; at least on the policy front. On 'organizational & grass root game' level, it is Romney who is strong and Santorum very likely fails there as so many pundits speculate. But what I think will be most beneficial to America will be campaigns like Santorum who are talking revival of Blue Collar Manufacturing in America. (Financial Times speculates that America is going to be on upswing as far as closing the Manufacturing gap with China goes; what better way to cement a place in History than to exploit the underlying secular trends?) 

This is the opportunity Iowa has - to bring forth GOP candidates who will help right policy questions to surface and American Politics is lot better served when that happens.

Sunday, January 01, 2012

Balmy Winter?

I agree that it is never prudent and politically correct for a Californian to boast about a great weather, but this New Year's Day has been unbelievably great here in Bay Area. Here are few local images:

Bright sunlight in clear sky, at 2.30 PM, Cupertino.

My son enjoying a bike ride on the hanging pedestrian bridge on I280 at the end of Mary Avenue in Cupertino at 2.30 PM.

Same bridge at 2.30 PM, riders enjoying blue sky and 67 Fahrenheit degree (around 19 degree Celsius) outdoor temperature.

Farmer's Almanac predicts that large part of California will have below normal rains this year. That has been the case so far, none to negligible rains. Last few years my observation has been that Winter and Rains get pushed out, so even this year too Rains may catch up in Spring or so. Winter 2011 was great, in keeping with good precipitation winters of last few years. But things look different this year so far. Drought for Bay Area is primarily dictated by snow pack on Sierra. So even if Bay Area receives low rains, it results in weaker replenishing of local water table but not necessarily water shortage. 

Anyways, you enjoy fantastic weather while it lasts. Indeed a great way to start a new year.

Happy New Year!