Politicians, financial experts, and economists from the developed world (and even our own self proclaimed God of capital markets from CNBC TV18) always preach us about free markets. However, what they practise is exactly oposite. On more than one occassion US government has intervened in the form of bail outs of large financial institutions instead of letting them fail:
- JPMorgan, Fed come to rescue of Bear Stearns
- U.S. seizes Fannie and Freddie
- Fed bails out AIG with $85B loan
Are "free markets" a myth and just an impractical theroy? I was wondering whether contrary to the generally pereceived notion that Capitalism is a superior economic theory (compared to socialism or communism), whether there is any single good or bad economic theory in absolute terms. The recent events in US suggest that actions of the US government were not in line with the principles of free market. Government intervened and supported financial institutions at the cost of tax payers' money instead of letting the financial institutions on the wrong side of the market fail. Those who have suffered in this mess are gullible retail investors, employees of failed institutions, and taxpayers. While top managements, credit rating agnecies, and regulators have been spared. Some US analysts and economists are pointing out that US has manipulated its key indices to wrongly reflect the health of the economy. Read this: Wall Street: The dark theory
Socialism and Communism are considered to be inferiror to Capitalism. But may be they are as good as capitalism and the problem was with their faulty implementation just as in this case. My question is whether is it a wise governance and economics for developing countries such as India to blindly follow the free market economy in absolute terms and completely close doors on other economic theories.
Saturday, September 20, 2008
Sunday, March 2, 2008
Markets - US, China and India
Wednesday, February 13, 2008
Politics of Migration & Side effects of skewed growth - Lessons from Mumbai
Over the last week the national media has given significant coverage to events in Mumbai. To a large extent, these events are undesirable espcially for a country crusing along the growth expressway. National media has criticised Raj Thakre, Maharashtra government, and Mumbai police for their actions and inactions. Raj and his party workers and deservedly so, have been criticised for their acts of violence against North Indians in Mumbai. However, such a huge media coverage has transformed Raj into a leader of marginalised and small regional party into a national figure. Thats suits Raj and his party for the upcoming elections municipality elections in Mumabai. Arrest of Raj Thakre is treating the symptom and not the root cause. I don't justify the attacks on North Indians in Mumbai. However, there is a problem of migrants in Mumbai.
For political gains and to marginalise Shiv Sena, Congress has systematically made attempts to change the demographics in Mumbai by encouraging North Indian settlements in Mumbai and transforming them into their vote banks. This has been done by illegally grabbing and encroaching government land. Not only incessant deluge of migrants in Mumbai strains existing insufficient infrastructure but also creates hurdle in improving the infrastructure. And no wonder the Mumabaikar at all levels feels marginalised. The poor middle class feels marginalised because he is loosing jobs to migrants and the middle class Mumbaikar is concerned because the city is simply decaying under the load of migrants in Mumbai.
What we need is inclusive growth. Growth of one class at the cost of others will always create social tensions especially in a society such as ours which is so divided by class, creed, caste, region, language, religion, etc, etc... Nandigram, Kalingar Nagar, and now Mumbai like situations cannot be avoided unless the basic issues are undressed.
In the last few days, I have heard ridiculous, frivolous, superficial discussions and debates on TV channels mostly by thinkers and analysts operating from their ivory towers. While there were references to constitution, right to work and move freely in the coutrny, there were hardly any discussions about issues arising out of migrant population, lack of growth in backward areas of the country, which causes migrations and solutions to these issues. There are lessons to be learned from Mumbai. We just can't leave events in Mumbai to Raj and his arrest.
For political gains and to marginalise Shiv Sena, Congress has systematically made attempts to change the demographics in Mumbai by encouraging North Indian settlements in Mumbai and transforming them into their vote banks. This has been done by illegally grabbing and encroaching government land. Not only incessant deluge of migrants in Mumbai strains existing insufficient infrastructure but also creates hurdle in improving the infrastructure. And no wonder the Mumabaikar at all levels feels marginalised. The poor middle class feels marginalised because he is loosing jobs to migrants and the middle class Mumbaikar is concerned because the city is simply decaying under the load of migrants in Mumbai.
What we need is inclusive growth. Growth of one class at the cost of others will always create social tensions especially in a society such as ours which is so divided by class, creed, caste, region, language, religion, etc, etc... Nandigram, Kalingar Nagar, and now Mumbai like situations cannot be avoided unless the basic issues are undressed.
In the last few days, I have heard ridiculous, frivolous, superficial discussions and debates on TV channels mostly by thinkers and analysts operating from their ivory towers. While there were references to constitution, right to work and move freely in the coutrny, there were hardly any discussions about issues arising out of migrant population, lack of growth in backward areas of the country, which causes migrations and solutions to these issues. There are lessons to be learned from Mumbai. We just can't leave events in Mumbai to Raj and his arrest.
Monday, December 17, 2007
India Outeperforms Global Markets
Tuesday, November 13, 2007
Every Breath Bernanke takes...
An extremely hilarious parody of the song "Every Breath You take" produced by students of Columbia Business School.
Robert Glen Hubbard, who is the central character in the video is the Dean of Columbia Business School. A section of the media had speculated Hubbard to be nominated as the Chairman of Federal Reserve. Eventually Ben Bernanke made it to chairmanship. The video depicts Hubbard's supposed disappointment at not receiving the nomination to be Chairman of the Federal Reserve.
Enjoy!!!
Robert Glen Hubbard, who is the central character in the video is the Dean of Columbia Business School. A section of the media had speculated Hubbard to be nominated as the Chairman of Federal Reserve. Eventually Ben Bernanke made it to chairmanship. The video depicts Hubbard's supposed disappointment at not receiving the nomination to be Chairman of the Federal Reserve.
Enjoy!!!
Saturday, November 10, 2007
Key Indices - How they moved in the last 12 months?
Dow Jones and Sensex (Mumbai)
Dow Jones and Shanghai
Dow and Hang Seng
Dow and Nikkei
Dow and FTSE
Monday, October 29, 2007
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