Thursday, May 31, 2012

Take it for the team?

I have not done enough of home work to know details, but is it that John Edwards is taking for the 'team' here? It is much advantageous for Obama Administration to 'loose' this case but meanwhile establish the 'bona-fide' of being non-partisan when it comes to 'rule of law'.

I am no fan of John Edwards and in my books he is a failed politician, a failed 'person' in the end; based on how he treated his spouse. But despite that, all this simply leaves the taste that the guy has taken 'all this pain' for the team....

Obama Administration - as WaPo Editorial mentions correctly; it is time to move on.

Sunday, May 27, 2012

Inability to look beyond

"None of this makes the Internet any less revolutionary. But it’s created a cultural revolution more than an economic one. Twitter is not the Ford Motor Company; Google is not General Electric. And except when he sells our eyeballs to advertisers for a pittance, we won’t all be working for Mark Zuckerberg someday."

Part of what Douthat, Taylor Cowen, Matt Yeglesias and gang are saying is true. There is enormous component of Internet Economy, so called Web 2.0, which is much less about 'value' addition in human life materially than running after quarter Trillion Dollars Advertising market. That market can only increase in proportion to 'real / total' economy; not any faster.

Not for a reason why so many in Silicon Valley have then disdain for Facebook and many other such Web 2.0 companies. Cisco, Juniper make routers and switches and all the infrastructure on which this Internet runs (apart from host of chip companies which essentially power these equipments). Of course they have to solve real problems of 'physics' and they cannot be content on providing a simple 'timeline or friending button' on the Website. Make no mistake, no-one is down playing the algorithmic complexity of problems like Facebook or Netflix type of companies are solving. And for sure that component of these companies is real value addition to human endeavor.

Point is there are real companies in Silicon Valley which make all this Internet and Cloud make happen on your computer screens. My favorite example is VMware, essentially a division of EMC. How many of these critics like Douthat know of companies like VMware? How much of homework these folks have done to understand the 'real value addition' by such companies and what those companies do? What about the path breaking work Google is doing for 'automated driving car' and all the value it brings along with ubiquitous Web 2.0?  How much of all these 'out side tech' folks know or have taken labor to understand? Even company like Yahoo - what do people know about the value of 'Hadoop' which it has given to Tech world? Same goes for many things like 'Trift Technique' and so on which were developed at Facebook.

I believe there is bit of superficiality to analysis  and criticism by these folks. I wish these folks are more informative and careful in their dismissal of Web 2.0 as well as lot more appreciative about many companies which are doing rock solid work to advance our state of technological competence. Deriding Facebook as Web 2.0 company is very easy; but do not ignore so much of breathtaking work which happens behind the screen; all in the service of truly advancing human race.

Tuesday, May 22, 2012

Syriza's Challenge

"Empty threats! There's no way they're going to kick us out. There won't be a euro zone if they do that...

No one can force us to leave the euro. Now that they have us, they're stuck with us...

If they change the laws to force us out, then there will be no euro zone. They're just barking to scare us but actually they're the ones who are scared," 

-- Greeks embrace some new myths about life with the euro, Reuters

It is all right for 'pundits' to fret about dangers of electing Syriza in the next round of Greek Elections, but reading this commentary one wonders what is wrong for Tsipras to play the gambit of tearing down EU austerity pact? He has rightly figured out that Europeans would finally come to senses in realizing 'self damage or collateral cost' in throwing out Greece from Euro. Of course it is gun point diplomacy and terrorism by another name; given the fact Greek Politicians first cooked books to enter Euro while Greek People are hardly ready for fair taxes and reforms. But why to practice 'reforms' when one can do without it? That must be the thinking of one Tsipras. The playbook was there 'crying' for someone to pick and here is one young, ambitious politician ready to embark upon that ploy. The way Politics works, how hard it is for someone to argue for 'change' to capture the power and then once in power; do the full U turn? What worst can happen, an election loss or two. But Greek politics being a life long profession; eventually you come back. Pandering to base - what is wrong? That is what politics is generally.

Appealing senses of common people, that is one way of dealing with this situation which non-Syriza Greek Parties, global pundits and rest of Euro are attempting. But at best it can be a weak strategy since there is no leverage while the political competence required to 'turn public' opinion away from short term benefits towards longer term advantages is off high order; generally absent. That means two things can or should happen:

- Syriza wins the election, tries to call the bluff of Europe; but Euro / IMF folks do not heed his demands and manage to control the damage of kicking Greece from Euro. Meanwhile Greece joins the club of  Third World / Fourth World countries instantly. That deprives Syriza of credibility and it gets completely wiped out politically. Importance of this is not about Greece, but rest of European Population and Politicians get the hard message of undertaking badly needed reforms instead of being captivated to silly populism. Also in the process Euro folks convince the market that indeed they can erect the appropriate 'firewall' and can limit the damage.

- Or rest of the European Politicians articulate a 'convincing narrative' - that Greece can very well tear the austerity pact and still stay in the Euro; it is just that they will not get any more money and will have to do the 'hard default' unless reforms are done. Whatever Euro Bonds and all those pro-growth solutions Europe wants to undertake to solve current mess, all those measures will simply skip Greece. Sure, that will be ostracization or discrimination of the worst order; but then that is the price you pay. European austerity first crowd has ignored importance of 'growth' for too long whereas Greek Politicians do not have any gumption to undertake needed reforms so as to grow; then you do pay price like division of Euro Project.

Monday, May 21, 2012

Politics about Capitalism

It is quite early in the game, but there is a feeling in the air that we have got a crucial moment in hardening of America's political opinions about coming November elections. First it is about the Presidential ticket, then rest of the ballot follows.

Jennifer Rubin is right to say that Obama's campaign built around 'shiny objects' is falling through. But I am not sharing her opinion that Obama's Private Equity argument is crumbling nor I share David Brook's evaluation that it is not creative for Obama to re-run the same campaign against Romney as like past elections - that Romney is beholden to Capitalism and does not care much about common people and their jobs. If at all, there is even more acute need 'now' to argue for the case against Capitalism as it has been practiced in last two decades.

Obama is right in this case to 'double down'. People can argue lot how much good has come out of Private Equity. But sitting in Silicon Valley, we know the difference between good 'private equity' of Kleiner Perkins, Sequoia, NEA, Lighspeed and may other Technology Venture Capitalists and 'ravenous scavenger type' equity of Bain Capital. All these Conservatives are on different planet to sing paeans about Bain Capital style private equity just after a blowout at JP Morgon and failure of Market Capitalism in 'pricing Facebook properly'. I would say Obama's instincts to fight this battle are right. My fear is two fold:
- he will quit this battle in between and
- will ignore to articulate effectively the other side of the coin: a) respectful plan / principles to contain deficits and b) a plan to grow American Economy with higher employment.

Obama is short on credibility when it comes to specifying concrete solutions. He is enduring insults from Senate Minority Leader in this regard. And generally loosing precious time in coming clean with Americans about how he would contain the 'entitlement costs'. Clearly none of that Romey is doing and he will for sure sink further our Economy by doubling down on tax cuts for rich. But Conservatives will all overlook these shortcomings of Romney, especially when it comes to slamming Obama; as that is such a fulfilling sport!

Wednesday, May 16, 2012

Mourning Pakistan

"Pakistan is losing the best chance in its history to gain political control over all of its territory — including the warlike tribal areas along the frontier."

David is too much of a good man to see the 'possibility of good' in the first place in the middle of this 'condemned to hell' situation of South Asia. Coming from South Asia (India), I never expected Pakistani rulers to be so enlightened in the first place. Well, it is not just Pakistan; India is no different - all our leaders are essentially there to 'sale our nations'.

I guess General Kayani must be thinking that - yes Tribal warriors are snakes which he is freeing them right now; but in the end he will be able to 'kill these snakes'. That is the confidence these leaders from South Asia have.

But then being 'over confident' and trying to hide all sorts of misdeeds - that is nothing new to South Asian Politicians. Just look at Imran Khan - Pakistan's next Prime Minister who effected death of innocent Pakistanis just because some American soldier flushed Koran in an Afghan toilet. Narendra Modi in Gujarath can probably serve the role model for Imran.

Some things just don't change, especially in South Asia.

Monday, May 14, 2012

Possible Opening?

President Obama is right to claim that JP Morgan loss indicates the need to be vigilant about Wall Street. Loss of face for Jamie Daimon - it cannot get any better politically for President Obama considering how much 'noise' JPM CEO has been making against Frank-Dodd law all along. 

If situation in Europe gets worse - and there are very high chances of that - President Obama can also go to American Electorate arguing for a 'safer and tested hand' during economic turmoil. He needs to base his argument for a calm and stable handling during recessionary times and Americans can find that as much more comforting than changing 'a horse midstream'. Another corollary of weaker European Economies is 'contained oil prices' which are already visible. Besides,  it can even give an opportunity for America and Isreal to embark upon Iranian adventure as there will be room for Oil Prices to climb without paying a political price.

So, it all depends on how smartly President Obama plays his given hand. All that he has to do is 'go away from social issues' for a while rather than simply keep regurgitating.

Sunday, May 06, 2012

Weakness of Obama's Reelection Case

So the President is back on the campaign trail making a case that he helped to downsize or end foreign military engagements and the savings from which he wants to use in parts to reduce debt and in parts for development back home. He is also out with Julia. The first case is at least reasonable, whereas I find the whole Julia thing very repulsive and I suspect most Americans would find it so too. May be Obamas are visualizing future lives of their daughters there if he had not been to White House. Whatever is, I sense that this 'Julia' tack is simply a wrong way for America. Where is there 'morning in America'?

But campaigns are multitudes of arguments and the President will make many such arguments in months to come; (now that collectively American Politicians have stopped any governance). Here is one such appraisal of Obama's basic case for reelection.

By and large Americans would find Obama's foreign policy handling reasonable and on better side. Essentially he kept the word - ending of Iraq war despite warmongers like Sen. McCain making lot of noise. In Afghanistan, though Americans would wish to end that campaign too; they would understand Obama's reasoning in continuing that engagement at some level. Regardless of flouting of International Laws and accepted conventions, in general Americans would be supporting of 'all those drone attacks' and of course love the way Obama finished OBL. That is all fine. Obama's general support to Arab Spring and effective handling of Libya situation (without additional commitments); all that is good in eyes of average Americans. Iran is still work in progress, but so far Obama's support to Israel by America will be perceived at an acceptable level; regardless of hyperventilation by GOP on that matter. Americans find continued engagement of Obama Administration with China 'OK'. Overall Americans should find it satisfactory the simple, cool down demonear of Obama Administration with rest of the world; especially when compared to  'sword flashing cowboy diplomacy' of the predecessor.

It is the domestic policy where the water is muddy. Handling of recession and banking mess will be considered as a net positive for Obama. However it is possible that 'navigation of economy during 2008 recession' will be an undersold accomplishment for various reasons. Auto industry bailout - that would raise eyebrows for Americans; but everything which ends well will be considered well. It is the stimulus and over selling of that in terms predicting reduced unemployment rate; that will continue to weigh on Obama's political record. It is a surprise that Obama does not argue forcefully that of the total stimulus amount one third was the tax cut for middle and lower income folks, one third was direct help to States and only the remaining was spend as stimulus. Obama could argue that as indeed inadequate government support in recessionary times.

Lack of strong convictions, absence of solid commitments and visible efforts thereof to contain debt while increasing short term spending; that is where perceptions about Obama go most negative among Americans. People understand that GOP is one pony trick only - tax cuts for rich to trigger some hypothetical growth while ruthlessly cutting everything on which weaker sections of society depend. Further American People do know that GOP has been equally irresponsible when it comes to debt curtailment. But that does not mean American People are ready to accept a President who does not have a firm debt reduction plan and commitments. Simply stated, President Obama is lacking here and there are no signs that he would propose any credibly policies in this regard during the campaign season. That is shame. It is because, Obama Campaign seems to have fully double downed on 'arousal of base' as the electoral strategy rather than articulating a persuasive, decisive policy argument. (No wonder Obama critic Jennifer Rubin's criticism holds here.) In other words, Obama is simply playing defensive with a complete lack of well articulated 'political agenda' to take our problems head on.

Finally, it is the Affordable Health Care law where Obama is going to have the hardest time convincing Americans. The core argument against Obama here is - he simply overstepped 'conservative limits' in proposing the mandate. The mandate may or may not be legal; but the point is why did he and Democrats resort to such a legally risky policy? Another time, another place; such a policy might have worked. But Obama and Democrats allowed definition of American Center constructed by Tea Party. When neither you are careful in avoiding legislation which may not get public support, nor you are vigilant in defending those policies; the resultant political vacuum is an ideal setting for your opposition to manifest in a new avatar. That is what Tea Party means. Given all this, one wonders why did Democrats not come up with less risky mechanics than the mandate? In the name of 'controlling health care costs'; essentially Government landed underwriting more entitlements. Yes Americans understand that unless health care 'reach' is increased; the cost does not come down. But what is less convincing to Americans is how all this increase in coverage is going to reduce the overall cost exactly when any serious implementation of ObamaCare starts in future. Obama Administration needed to be much more prudent, scrupulous and convincing in this regard. Meanwhile the whole 'process of sausage making' (passing the bill in Congress) has left a bad taste with Americans. The contradiction of Obama 2008 Campaign claiming to 'cleanse Washington' but adopting essentially the same corrupt practices; is too glaring for Americans to ignore or digest. The fundamental thing to watch in the reelection campaign is whether Obama can douse these doubts in minds of Americans - that he may resort to corrupt process to pass 'nanny state' laws. So far Julia's of Obama Campaign hardly help to douse those doubts.

(Lightly edited and corrected the title on Monday, May 07, 2012.)