Bird's Eye Shot

Hot air worth Rs. 70,000 crores

2010-10-07T02:26:00.005+05:30

The Income Tax Department of India had the chutzpah to put out an ad today proclaiming the success of the Commonwealth Games (see below, published in Mint - Page 29, Oct 6 2010).

Is the public memory of the events that unraveled before the games so short, that a government agency can get away with declaring the tainted games a success only 3 days after the opening ceremony?

PS: Don't miss the text in the left-bottom corner - a subtle warning towards the consequences of not paying your taxes.

What college graduates should get in to

2010-05-02T22:04:00.005+05:30

Jobs for college graduates should make them gain knowledge in at least one of these three areas: how to make something, how to sell something or how to support something.

That's Guy Kawasaki in an interview with the NYT. He makes some excellent points there, so if you are in college right now or a recent graduate, go read. He also has a bit to say about work in consulting / investment banking / private equity. Some of the best parts:

The issue with consulting is that if you go straight to work for a consultant, you develop this perspective that the hard part is the analysis and the decision. In reality, that’s not the hard part. The hard part is implementing the decision, not making it.

[...]

You can develop an absolutely incorrect perception of yourself as a great manager when, in fact, you haven’t implemented anything. You haven’t fired anybody. You haven’t introduced a product. You haven’t supported a customer. All you’ve done is make spreadsheets and PowerPoint presentations.
You can also throw venture capital into this pile. Going into venture capital straight out of school is a big mistake because entrepreneurs start sucking up to you and ask you stuff you know nothing about — like how to run a company.

Eight penguins

2009-09-29T23:33:00.004+05:30

From yesterday.

Everyday fallacies

2009-09-25T18:32:00.000+05:30

MichaelSmith's comment on this post at Cafe Hayek, is a pretty good list of fallacies we witness in daily life. I quote it here to make a note of the fallacies (though I am pretty sure that either I will commit one of them in my very next conversation or mostly tend to ignore them whenever I come across them).

Post hoc, ergo propter hoc -- plus the fallacy of exclusion (cherry-picking attribution of positive results while ignoring negative results) -- plus argumentum ad verecundiam -- plus the non sequitur that the truth of a proposition is a function of the number of its adherents.

(Note to myself: The list is not MECE)

Eulogizing our politicians

2009-09-04T23:00:00.002+05:30

Swaminathan Aiyar wrote this in 2004, after the general elections. An excerpt:

... For many years after, YSR's barytes mining operation was the subject of one scandal after another. Through the AP Mineral Development Corporation, he obtained a sub-lease on the land of one Vivekanandam, who got a court injunction against the lease. Nevertheless, YSR continued with the mining and took away minerals worth Rs 5 crore. A maternal uncle of Vivekanandam went to the then chief minister to protest. He was set upon by a gang, who broke his hands and legs. After that, few dared quarrel with YSR in the Cuddapah region.

There is more there on the rise of the 'Lion of Kadapa'. Link via India Uncut.

And while we mourn the death of a politician, lets not forget to read what Professor Boudreaux has to say on this.

A Reasoned Debate

2009-09-04T20:54:00.003+05:30

on corporate social responsibility, here. What stood out for me, though not related to CSR, is this excerpt from T. J. Rodgers' essay:

If one goes beyond the sensationalistic journalism surrounding the Enron-like debacles, one discovers that only about 10 to 20 public corporations have been justifiably accused of serious wrongdoing. That's about 0.1 percent of America's 17,500 public companies. What's the failure rate of the publications that demean business? (Consider the New York Times scandal involving manufactured stories.) What's the percentage of U.S. presidents who have been forced or almost forced from office? (It's 10 times higher than the failure rate of corporations.) What percentage of our congressmen have spent time in jail? The fact is that despite some well-publicized failures, most corporations are run with the highest ethical standards--and the public knows it. Public opinion polls demonstrate that fact by routinely ranking businessmen above journalists and politicians in esteem.

I am not so sure if the public knows that or not, but Rodgers nails it well.

Nacil seeks route monopoly

2009-08-26T22:33:00.003+05:30

State-owned Nacil has written to the Ministry of Civil Aviation to prevent Kingfisher from operating on New Delhi - London route. Excerpts from this piece of news:

The letter cited excess capacity on the India-UK sector and potential losses to Nacil should Kingfisher also be allowed to fly New Delhi-London...
...
“Adding more capacity on New Delhi-London route will result in further losses for all carriers operating in that sector,” one of the executives said.
...
Employees of Air India, claiming that excess capacity is the primary cause of the airline’s troubles, have appealed to Prime Minister Manmohan Singh for government intervention.
In a recent letter to Singh, they sought “directions and guidelines so that the domestic operators do not operate flights to one and the same destinations more than their requirements”.

Shivaji statue in the Arabian Sea

2009-08-26T22:16:00.005+05:30

Came across this news today, quoting an excerpt:

... the Maharashtra government has announced Rs 350 crore for a statue of the Maratha warrior king Shivaji in the Arabian Sea off the Marine Drive.
...
The statue is to be 309 feet high, higher than the statue of liberty. It will also have a museum dedicated to Shivaji.

Each Maharashtrian will be forced to pay 32 bucks for the construction of this statue, though the report doesn't explicitly mention that. Well, that's where Rs 350 crore is going to come from.

Source for population data: Census of India Projection for 2009

World's Most Powerful Crime Syndicate

2009-07-18T14:00:00.002+05:30

From JohnK, a commenter on this Cafe Hayek post:

To put a man on the moon the world's most powerful crime syndicate had to demand "protection" money under threat of force to finance a completely pointless operation simply to prove that they were indeed the world's most powerful crime syndicate.

The Philosophy of Liberty

2009-06-05T21:45:00.003+05:30

Spread the word :)

Crime and Public Policy...

2009-06-05T20:10:00.005+05:30

... in India are indistinguishable. When a man on the street robs me to get a day's meal, it's a crime. When the government does the same, it is popular public policy.

A government that cannot guarantee national security or local law and order will now try to ensure food security.

Taxing Us Hollow

2009-06-03T22:15:00.005+05:30

Here is one of the most bizarre articles I have read in recent times. What the author is really pitching for is "a more lucrative tax system". Now, I don't know where to start criticizing this article, it's full of absurdities, overpowering generalizations and original research. I will quote the most WTF parts here for the shortage of time:

A combined fiscal deficit of at least 11% of gross domestic product (GDP) has left the new government in India with limited fiscal space for any more of this much-needed stimulus spending. The rationale and the circumstances for increasing marginal income-tax (I-T) rates, or the rate for the highest tax slab, have thus never been clearer nor more favourable.

Spend the money on wasteful schemes like the farm loan waiver and NREGS and then tax the hardworking aam admi for the same, either through direct taxes or through inflation. Makes great sense to me.

Well-respected commentators indulge in sophistry, reasoning that some of the gains from the robust growth in tax revenues in recent years should be passed on to the taxpayers by lowering taxes. Such claims are specious, self-serving and smack of deception.

Why so?

Our tax system is riddled with exemptions that are effective subsidies to specific categories of taxpayers.

Giving tax exemptions is equivalent to providing subsidies. So why not remove all subsidies and taxes altogether? Without so many subsidies you wouldn't require so many taxes.

Accordingly, companies paid an effective tax rate of only 20.6% in 2007-08.

Only? You keep one-fifth of the revenue of a company without so much as batting your eyelids and thats only so much?

The Planning Commission has estimated that we need to invest $500 billion, or almost half our GDP, over the next five years in infrastructure alone. To put this in perspective, nearly 60% of our total tax collections in 2007-08 ($145 billion) went into welfare transfers and interest payments.

How many targets has the Planning Commission met in the past so many years? Did 60% of our tax collections really go into welfare transfers and interest payments or into the pockets of civil servants and politicians of Mr. Natarajan's ilk?

Evidence from across the world provides enough proof that inequality reduction (and broad-based economic growth) is best achieved by way of government transfers and better quality public services, not by reduction in taxes.

Show us this so called evidence, Sir! Please!

And now for the most WTF part of the article:

Classical liberals argue that governments have no right over people’s incomes and that direct taxes penalize effort, and thereby reduce economic efficiency by distorting incentives. Yet, recent research from labour economics provides ample evidence to the contrary.

The anonymous evidence rears its head again.

And then the civil servant goes on to speak that the rich have what they have all due to luck, and little else. I think what we require most is to do away with lucky civil servants.

Update: Aristotle The Geek rips apart the article here.

Government's Role in Causing the Downturn

2009-03-02T09:23:00.007+05:30

I mentioned in an earlier post that the government and the central bank's role in causing the present downturn is hardly being questioned. The folks at Cafe Hayek though, have been doing just that over the past couple of years. Cafe Hayek is a brilliant blog with trenchant commentary on the role of free markets and government policies. In a recent post, Don Boudreaux has posted some letters that have recently been published in WSJ. They sum up my views on the present crisis perfectly:

"The Weekend Interview with Nouriel Roubini: 'Nationalize' the Banks" (Feb. 21) once again demonstrates that the credibility of economists is inversely related to their level of celebrity and their proximity to political power. To paraphrase Lord Acton: Celebrity corrupts, and political celebrity corrupts absolutely. Mr. Roubini tells us that markets fail and have failed to clear because of excesses, greed and irrational exuberance.

Amazingly, Mr. Roubini makes no mention whatsoever of the government interventionism that is largely the cause of our current crisis. Was the Federal Reserve's policy of holding interest rates below the real rate of interest and thereby causing a credit bubble and debt-fueled consumption a market failure? Or was the market failure that market participants did not read F.A. Hayek's "Monetary Theory and the Trade Cycle" and divine the peril that was not being signaled through the price mechanism? Or does Mr. Roubini consider it a market failure that lenders were coerced by the government to make mortgage loans that never would have been made based on market-driven underwriting standards? Is the failure of unqualified homebuyers to decline the cheap, no-down-payment loans that lenders were coerced to offer them another market failure? Was it market failure that lenders knew they would never have to suffer the consequences of reckless underwriting when they could dump their rotten portfolio on the taxpayers via the government-backed Fannie Mae and Freddie Mac?

Robert Drane
Lakewood Ranch, Fla.

It is a matter of public record how we reached the point where the idea of nationalizing the banks arose. I doubt even the most cunning and unscrupulous member of Congress foresaw the ultimate prize, when under the guise of minority home ownership, they put us on the path to crisis.

Now picture the likelihood that a Sen. Chris Dodd or a Rep. Barney Frank could pressure loans to be made or withheld, and this without public knowledge of where money is being directed. Political contributions would flow from the chosen back to politicians.

It is not enough to control the federal Treasury. By nationalizing the banks, a huge slush fund, safe from prying eyes will be created. Who needs a dictator when we have the U.S. Congress?

Joel Brandes
Chestertown, Md.

Mr. Roubini totally misses the mark about what Alan Greenspan got wrong. The former Federal Reserve chairman spent a career playing the Wizard of Oz, pulling the levers to set the price of money. As the ultimate master of the universe, free markets were not allowed to set interest rates and properly allocate capital. Far from taking Ayn Rand's view of the world to an extreme, his implementation was just the opposite -- he knew better where to set the price of money. Sadly, now that the wizard has been revealed, we have so many willing to accept his explanation on how free markets let us down. No, Mr. Greenspan, you did.

Dale Meyer
Madison, Wis.

Many people wrongly correlate Alan Greenspan's actions as the Fed Chief with Ayn Rand's Objectivism. Ayn Rand, though, was strongly against fiat currency and the Federal Reserve and was a strong proponent of the gold standard. Anyone who has read Rand and has a basic understanding of the Fed or the policies of Greenspan would clearly see the distinction between the two. Sadly though, in these rhetoric-filled times, ad hominem arguments are more lucrative than facts and reasoning.

Aside: Cafe Hayek has been added to the blogroll.

Ten Principles of Sound Public Policy

2009-02-27T21:29:00.005+05:30

1. The government should only do what people (individuals and associations) cannot do for themselves.

2. A sound public policy would impose the same standards, norms and punishments for non-performance on government as are imposed on the non-state providers.

3. A sound public policy will enhance:
> Choice
> Competition
> Freedom

4. A sound policy would consider long-term consequences over all groups of people, not just the good intentions behind the policy.

5. Subsidiarity: A sound policy would enable governance (decisions about taxes and expenditure) closest to the people.

6. A sound policy would place incentives according to Friedman's Law of Spending:
(i) Spend your money on yourself.
(ii) Spend your money on someone else.
(iii) Spend someone else's money on you.
(iv) Spend someone else's money on someone else.

7. A sound policy would rely more on participatory instead of representative democracy (referendums, tax allocations by citizens' choice).

8. A sound policy will not sacrifice the rights of an individual for the interests of many.

9. The premise of sound public policy should be that people are responsible, resilient and self-governing given the right set of incentives and framework of law.

10. A sound policy should have an expiry date (sunset clause).

This post is from a pamphlet I received during the I, Society & Public Policy Seminar - I have uploaded it as I was not able to find a copy of this online. The pamphlet was the topic of a 1.5 hour session during the seminar. The philosophy behind the principles lies in the classical liberal/libertarian spectrum. I plan to write a more detailed post on each principle in the future.

Lawrence W. Reed has a similar list here.

Gold Prices during the Great Depression

2009-02-23T19:27:00.009+05:30

Today I was reading 'Great Myths of the Great Depression' (available here) and came across the following lines:

Congress gave the president the power first to seize the private gold holdings of American citizens and then to fix the price of gold. One morning, as Roosevelt ate eggs in bed, he and Secretary of the Treasury Henry Morgenthau decided to change the ratio between gold and paper dollars. After weighing his options, Roosevelt settled on a 21-cent price hike because “it’s a lucky number.” In his diary, Morgenthau wrote, “If anybody ever knew how we really set the gold price through a combination of lucky numbers, I think they would be frightened.”

The whole document is especially relevant in today's times when free market capitalism is again being blamed for all our woes and the role of government and central bank policies in precipitating the present crisis is hardly being questioned.

Richard Lederer on Writing

2008-10-14T00:17:00.001+05:30

Writing is...
by Richard Lederer

For me, writing is like throwing a Frisbee.

You can play Frisbee catch with yourself, but it’s repetitious and not much fun. Better it is to fling to others, to extend yourself across a distance.

At first, your tossing is awkward and strengthless. But, with time and practice and maturity, you learn to set your body and brain and heart at the proper angles, to grasp with just the right force, and not to choke the missile. You discover how to flick the release so that all things loose and wobbly snap together at just the right moment. You learn to reach out your follow-through hand to the receiver to ensure the straightness and justice of the flight.

And on the just-right days, when the sky is blue and the air pulses with perfect stillness, all points of the Frisbee spin together within their bonded circle—and the object glides on its own whirling, a whirling invisible and inaudible to all others but you.

Like playing Frisbee, writing is a re-creation-al joy. For me, a lot of the fun is knowing that readers out there—you among them—are sharing what I have made. I marvel that, as you pass your eyes over these words, you experience ideas and emotions similar to what I was thinking and feeling when, in another place and another time, I struck the symbols on my keyboard.

Like a whirling, gliding Frisbee, my work extends me beyond the frail confines of my body. Thank you for catching me.

This is from Richard Lederer's "A Man of My Words". I read it on India Uncut (link here) a while back and it has been resonating in my brain for the past couple of days.

What makes an engineer?

2008-01-23T19:15:00.000+05:30

Brilliant.

(Youtube link courtesy nsitlounge.in)

Test

2008-01-18T18:22:00.000+05:30

This is a test post.

Behind the camera is the Matrimandir, Auroville.