Marathi Manoos

I thoroughly enjoyed watching Raj Thackeray interviewed by Arnab Goswami last Sunday. Delighted, in fact, for it provided the rare occasion where Arnab was lost for words, and resembled a castrated cat. Part of the problem, I guess, was that Raj chose to respond in Marathi. It's kinda obvious, but I missed the beginning so maybe Raj offered a particular explanation for not answering in English. And it wasn’t clear whether Arnab understood Marathi or if they ended up using an interpreter, which explains his constipated questioning. (I am ruling out the possibility that Raj doesn't know English.)

Raj, though, was perfectly composed and his answers, while uncompromising, were logical and rational. He basically pointed out that all states have a responsibility to their residents, and Maharashtra in general, and Mumbai in particular, shouldn’t have to bear the brunt of poor governance elsewhere. He also begged to differ from the popular opinion that Mumbai is a commercial and financial hub becauseof its migrant population. Rather, he noted, that because Mumbai had all the characteristics to be such a hub, that people flocked in. On the question of preferential treatment for Marathis, he simply pointed to agitations in Tamil Nadu and Karnataka, where representation for localites has always been an issue. In Bangalore, for example, I recall a recent push by the local film industry to ban screening of Tamil and Telugu films because Kannada films have no viewers! On Chhat puja, he was enraged that, except in Mumbai, the event is not organized at such a scale anywhere else. I think he gave the example of Maldives that has a significant immigrant population.

His analysis of the situation is spot on. The root cause, of course, is the asynchronous pace of development, which also explains the urban-rural (India-Bharat) divide to an extent. But Raj neither has the ability nor the inclination to attack the root so he is simply going after the symptom. One can only question his approach rhetorically and ask, were the tables reversed, then would he, a migrant, accept being subjected to such discrimination by natives? Same goes for the migrants too – would they, as natives, watch in silence when their cities and towns start filling up with migrants?

Paths of Glory

Wanted a break from serious reading so picked up Jeffrey Archer's Paths of Glory last week. It is an engrossing account of Goerge Leigh Mallory's attempt to conquer Mt. Everest in the 1920s. Dont let that turn you off for this book is as good as any of Archer's thrillers.

My only experience with rock climbing is going up an artificial 20-ft mobile rock in an offsite during my MBA program. I managed to climb up, but was so tired when I got there that I let the safety wires bring me down. Agreed, I am not the epitome of fitness, but the experience did give me some idea of how tough it is to climb mountains. So to even think of climbing the Everest in the 1920s sounds like sheer madness. The use of oxygen was considered "cheating" at that time and the only cover from the -40 degree temperature was multiple layers of clothing. Which sound like minor inconveniences when you consider that no one had done it before so one had no clue of what route to take and what the conditions will be like.

Archer is in good form despite the dry nature of the subject and refrains from launching into monologues on mountaineering. In some ways, this is a romantic novel where the protagonist happens to be a mountaineer.

If you have never heard of George Mallory, I recommend reading this book first before googling him. Even if you do happen to know about his life and times, this is still worth a read.

Scarcity in Abundance

I was baffled the first time I came across a STOP sign in the US. Thankfully, it was before I started driving there. I saw vehicles approach the sign from all directions, stop for a moment or two, and proceed without any commotion or confusion. I tried my best to crack the code, but gave up, and asked an American colleague. She gave me a ridiculous look and said, well, whoever approaches the STOP sign first, gets to go first. #@$@##@!!

Of course, STOP signs will never work in our country, but even signals are under pressure. On my way to work, I stopped at a red light, put on the hand brake and waited for the signal to turn green. Obviously, I was a novice. The professionals don’t believe in relaxing. Rather, they are on the lookout for the signal to turn green for the cross-traffic, judge how long it would remain so, and slowly start inching towards the intersection as it turns amber, such that by the time our signal turned green, they zip off a clean 5 seconds ahead of us. That’s an important 5 seconds though for they manage to reach the next signal ahead of the pack, and in front of the line.

I am quite certain I have indulged in similar acts of desperation, either on the road or elsewhere, so I don’t consider myself any different. But what drives our behavior? I believe it is the deep sense of insecurity embedded in our national psyche. Generations have grown up in misery and scarcity where life was a zero-sum game. You won only if your neighbor lost. Although the situation has considerably improved, these fears have not been fully alleviated.

This is aptly summed up by Shashi Kapoor in the movie, Deewar. The scene shows Shashi Kapoor being interviewed for a manager position. The interviewers like him and offer him the job when a young lad barges in. He apologizes for the delay and explains that he had to walk as he was out of money for the bus fare. The interviewers turn him away because the job has already been offered. Unable to see the young lad in misery, Shashi Kapoor rejects the job citing poor pay. The job goes to the lad, who recognizes this gesture and is extremely grateful. Shashi Kapoor simply suggests that “Yeh zindagi ek third class ka dibba hain dost. Main baith jaata, tho tum khade ho jaate.”

Austerity and Keynesian Economics

I am not the best articulator of economic concepts but this is too tempting to let go. The government has decided to cut costs. MPs and ministers are being asked to fly economy and use state guest houses.

This move is an economic disaster, especially when we are yet to fully recover from the recession. The GDP of a nation can be expressed as a sum of consumption, investment, government spending and net exports:

Z = C + I + G + NX

Roughly, GDP is the total value of goods and services produced by an economy. Now, for the economy to be in equilibrium, production must equal consumption. Therefore, GDP equals aggregate demand, which equals aggregate supply.

According to Keynes, the aggregate supply drives the GDP of an economy in the long run. That is, the resources available with a nation, both natural resources and people, will eventually determine what a country can produce, and therefore, what is available for consumption. In the short run, however, it is the aggregate demand that rules. When demand goes up, supply levels will adjust upwards to meet this increase.

Now, looking at the above equation, one way to increase GDP growth is to increase consumption, which means put more money in people's hands so they can spend. This is precisely the logic behind stimulus packages. But what's the guarantee that I will spend the money? As it is, the economy is gloomy, so I might rather put it in a bank deposit. To make that option unattractive, central banks cut interest rates, so you either spend or invest your money, both of which will boost the economy as can be seen in the above equation.

Government spending is much more effective in getting economies out of recession. Every rupee spent by the government has a multiplier effect, because it creates demand, which fuels more demand and so on. Tax cuts work in a similar manner. When people have more disposable income, well, they dispose it off in some way, which boosts consumption again.

So the present government's decision to embark on an austerity drive is an economic blunder. If ministers do not stay in hotels, the hospitality industry will suffer a slump. Hotels will have to make some cut backs that will result in people losing jobs and their vendors such as catering and laundry guys losing business. When these people have less money to spend, they will cut back on festival purchases such as apparel, which is the boom season for the retail industry. So now the retail industry will get into a slump and so on.

Of course, these effects would kick in only if the government stopped "spending". I doubt if our government was ever prompt in paying for its services, and has probably accumulated several years of unpaid dues so we shouldn't worry too much.

Anyway, with solid corruption, money will still be flowing freely in the black economy that will at some point trickle into the mainstream and boost demand. I can't remember right now, but I believe at least one well-known economist actually made the point that the underground economy plays the role of a stimulus package.

Farce India

Force India's fortunes have undergone a dramatic turnaround in the last two races, and our media has spared no effort to shove this piece of trivia onto our face. I fail to understand why this is a matter of notional, let alone national, importance.

The team has been part of the F1 scene for years under various names. The owners, unhappy with its performance, found a sucker in Mr. Mallya. Ever the publicity seeker, he promptly made much noise and named it Force India, which actually reminds of the old Air India joke. We all know how well his decision to start an airline as a marketing campaign for liquor brands is working out. What makes us think he will do any better with an F1 team? Anyway, except for Mr. Mallya, nothing in the team is remotely Indian. Not the engine, not the crew and definitely not the drivers. Mr. Mallya is not even the full owner although he has pulled off the brilliant gimmick of attaching our nation's name to the team.

So, it irks me to no end when he makes statements such as "Force India carries the hopes of a billion people." The words that come to my mind are too strong to mention here. I doubt if any self-respecting F1 fan is actually cheering for Force India. The ones doing the cheering are either in the media or are people just content with "India" and some variation of "victory" being used in the same sentence. (I shouldn't blame the second group for those are indeed rare occasions.)

Far from protesting the embarrassing reference to our country – until recently, the drivers were finishing in double digit positions and were engaged in duel to not finish last - we have found cause for celebration.