The News Bias


There exists a political bias in almost all news organizations. Most famous ones such as CNN, MSNBC, The New York Times and The Washington Post are considered liberal, which means “leftist” in the U.S. News organizations such as Fox News, The Wall Street Journal and countless others are best characterized as conservative, which means “rightist” in the U.S. There is hardly any neutral news organization or publication anywhere in the world. The closest that I have seen are The Hindu newspaper in India, and The Guardian in the U.K. There may be others that I do not know, and my lack of mentioning others does not mean that there are no other neutral publications or TV news channels.

There is nothing wrong with some bias, as news editors are, after all, human beings, and have certain orientations and thought processes in their heads as they handle news and news analyses. However, they are not supposed to twist or tweak the factual news to their advantage, with an insidious purpose in mind. It could be that they wish to provoke an anti-government or anti-establishment public reaction, which goes against the grain of news gathering and publishing. The editorials could convey what the editor(s) wants to comment on the main news of the day, but the reporting has to be absolutely factual, as otherwise it could turn dangerous, as we have seen recent instances especially in India with fake news (“faked” news) dominating and corrupting the public’s view of the happenings. Such reporting happens in many countries around the world, and is designed to serve the political orientation of the editor or owner of the publication.

It is becoming increasingly clear that there has to be a law to regulate news, much like in the old days when news publications could be prosecuted for incorrect news reporting which results in public mayhem, destruction, deaths, violence, etc., (this used to be called “censorship” in old times). There is nothing wrong in seeking to enforce law and order against what is famously known as the “Fourth Estate”. I am not inclined to believe that a carefully calibrated law and order enforcement against an erring news publication or TV channel or news organization can be termed as shutting down press freedom. Everyone is subject to the same laws, so what is so unique about one segment of the society?

Well, we might need a “news ombudsman” to ensure impartiality, and to enforce actions against all publications without fear or favour. It is easier said than done. Any government appointee is going to be at least slightly biased, and so it is critical to select someone with the involvement of the government of the day, the political opposition in the parliament and the judiciary, and to embed sufficient powers in the office of such an ombudsman, who can issue orders to law enforcement, much like the Election Commissioner, or the Head of Anti-Corruption Agency.

News organizations should also include all social media platforms such as FaceBook, Twitter, Instagram, et al. They need to be regulated simply because they are more powerful than any brick and mortar news producer. News on such platform posted by anyone spreads at exponential speeds and rumours could create havoc. We have also recently witnessed how FaceBook sacrificed the personal data of millions of people who use their platform for monetary benefit. Given the proclivity of the younger generation to take up social media platforms with amazing speed, it becomes essential to moderate such platforms without causing damage to the neurons of youngsters at a very young age.

I enjoy flipping the news channels between CNN, BBC, Fox News, CNBC, and other local / regional channels. The priority given to news coverage varies across the channels. Sometimes what you think is a very important piece of news does not even merit a mention in some of the channels. If things do not go well for the audience of Fox News, then the anchors distract them with some unimportant sidelights. And so on and so forth. Of course, it requires a worldly intelligence to segregate fake news from what is real. It is not an easy skill, as fake news could easily be debunked and thrown away upon a refresh of the news website; it could be worded in a convincing way which reflects in certain measure some amount of truth, or it could be covered by a famous news anchor. If Russia is disliked by most news channels for ideological or political reasons, it is very easy to spot that dislike. If China is berated for trade or intellectual property thefts, that also gets highlighted in a big way. There are hardly any counter arguments that you would hear in the world famous TV news channels against their own governments or allies. It is not unnatural, but it is not normal in a news reporting organization. There are, of course, good examples of news reporting which is balanced and also good analysis of news with differing viewpoints which we get to see sometimes, but such balanced coverage is slowly declining in my opinion, as the audience wants “supportive” analyses, not “destructive” analyses by political commentators. There is also disdain of these commentators or opinion-producers amongst the common public, as they are repeatedly used throughout the year, with more or less the same views. They are either “supportive” of the government, or in some cases “destructive” of the government’s stand on issues. Eventually, people will realize that anyone on this planet can have a view of his/her own on any issue which may or may not affect him/her. Nothing wrong with that position either. The point is that fast-talking commentators have not helped to define a news organization, they only reflect their own biases in their opinion piece.

Looking at the overall stained news scenario, it is but normal to conclude that we should make up our own news – what I mean is that, you pull together pieces of news from various publications using some software which can generate your own news as per your own criteria. If I am a conservative, rightist kind of person, then my filters would produce news that I am looking for! Tomorrow, I could become a liberal and I will then get to enjoy the “liberal” view of world news and happenings!!

Well, folks have a good weekend, and avoid drinking alcohol,

Cheers,

Vijay Srinivasan

14th April 2018 (Today is TAMIL New Year, Wishes to my Tamil Friends and Families!)

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Why is the West always against Russia?


In the world of geopolitics, there are two constants: spying and deterrence.

Almost every major nation has an army of spies – whether they are directed to obtain the military, political or technological secrets of their most important competitor nation(s) or not, it is a fact that they do exist formally (as part of embassy operations) or informally, as undercover agents. Both Russia and the U.S. are masters in the art and science of spying, and we have to include the U.K. and increasingly, China, in this list of major spying countries of the world.

Deterrence is a simple concept which has evolved into a key policy initiative of large countries. The idea here is that the arsenal of weapons at the disposal of a major power is such that it would make any potential attacker think many times before launching a direct attack, or even a proxy attack. An important extension is that nations communicate their policy framework allowing them to cause an asymmetrical, disproportionate damage on the attacker, ensuring that it is almost impossible for the attacker to defend himself or launch a second attack. I am only providing a layman’s understanding of these important concepts, and there are many resources from which one could derive a better and stronger understanding.

When combined, these two constants form the basis of a “siege” or war-like mentality, at least in the minds of military planners. Options such as pre-emptive attack, and counter-attack dominate the minds. Various military scenarios are played out in computer simulation, laying out options and the abilities to deal with these options. The whole idea is how to put the enemy out of business for good. But then, such a conclusion is not inevitable. The enemy never goes away from the world ecosystem.

In the past, the U.S., the U.K., and France justified spying as legitimate activity as something which is crucial in a cold war mentality. It was necessary, no doubt about it. Spying was used both for good and bad outcomes, as we all know. Any student of political history which has transpired in the past seven decades would understand that not all decisions made by the so-called “good” nations were actually good for anyone, and not all decisions by the “bad” countries were actually bad, and vice versa. Nations have their reasons for taking decisions, but unfortunately the cost of those decisions were never fully understood at the time of making decisions, and we all know the repercussions.

In today’s world, the West is not unfortunately enjoying the good name it had in the past. Due to various misdeeds, and misguided decisions taken by the West, millions of people have been annihilated all around the world. This cannot be justified based on the principle that “good” outcomes trump the means to achieve them. Means are as important as the desired ends, and no sacrifice, intentional or otherwise, should be planned into decisions.

Russia is not guilt-free either – it has been the cause of millions of deaths in the past due to the power of the Soviet Union. Communist ideology failed to take off in the Soviet satellite countries, and even in Cuba. In a clear analysis, it is not impossible to conclude that the five Security Council Members have been the cause of the maximum number of war deaths in the world, post the Second World War. Most of these wars were unnecessary, as these were fought on ideological grounds.

So, now the West is against Russia due to multiple reasons, not the least of which being the chemical poisoning of an ex-Russian spy and his daughter in the U.K. While no proof has been offered, it is clear that the chemical was invented in Russia. What is not clear is how it made its way to the U.K. Diplomats have been ejected from many Western countries as a show of support to the U.K. Russia has countered by ejecting similar number of  Western diplomats last week.

So, who is going to gain? No one is going to benefit as a result of this tit-for-tat expulsions. The diplomatic situation is fast deteriorating, and it is not inconceivable that we will very soon see the advent of Cold War 2.0 with the world getting divided into two blocs. Of course, China will always be behind Russia, so there you have two veto-wielding Security Council Members fighting back against the West.

I also believe that the West is strongly against Vladimir Putin, the President of Russia (who just got re-elected for yet another 6 year term). It is a strong personal revulsion of the individual. They cannot trust him, and they want him to go away, hopefully to be replaced by a more pliant president that they can control in some way. Russia as a country is a big market, with a preference for Western products, and why would the West walk away from a market of 160M people? Further, Russia seems to be doing all right economically, though not great. It is all about one individual, who is intimately controlling Russia, and who has apparently no flexibility at all towards the West.

Now that Putin is re-elected, what would the West do? They will create disturbance in Russia, support the opposition candidates (like Alexei Navalny), and do a variety of things that Russia could not find and retaliate about. The West will continue to constantly irritate Putin on a number of factors on which they have better control. They will push Russia and China into a tighter bond. We do not know if Putin or his coterie is responsible for the chemical attack in Salisbury, probably we will never find out. Given that plausible scenario, it is surprising how the U.K. reacted and pushed forward with the formation of a “coalition” of like-minded Western countries to expel Russian diplomats. It is an unusual act by a country which cannot do much against a bigger superpower at its doorsteps, with or without NATO. Likewise, the U.S. chose to retaliate rather strongly against Russia, which was promptly returned in kind by Russia.

And, so on and so forth. It will never end. There is simply no dialogue happening, and I will not be surprised if the diplomatic relations are downgraded which will be a very serious setback to normal relations between world’s most important military powers.

No one knows where all this will end, but one thing is very clear. Vladimir Putin is an ex-spy and spymaster, and he is not about to give up his chess game easily. He has the tools, techniques, weapons, and the most important thing – nuclear deterrence.

Have a good weekend, and a great Easter break,

Cheers,

Vijay Srinivasan

31st March 2018

 

 

 

The terrible loss of privacy


Privacy is a funny aspect of life.

Most institutions and corporations we deal with in our lives demand that we sign off on dotted lines when it comes to providing them access to our very personal data. Most consumer companies do the same thing. Governments have always asked for our data. However, the phenomenon of giving away our total freedom and personal data to social media giants did not bother us for a long time. Until last week.

I am referring to the data breach on 50M Americans who have accounts with Facebook. Well, this is not the first instance, but in terms of scale it is the biggest ever. There have been hacks on Apple’s iCloud, releasing personal data of celebrities. There have been other hacks such as the bad one on Yahoo mail.

But, people forget and forgive, the reason being that they still need the services of the social media companies, cloud service providers and email operators. There is just no alternative to leading one’s life today – if an individual is not on Facebook, he does not exist – not just virtually, but physically as well! He or she is ignored for lack of digital savviness, or inability to be in sync with the rest of the world which seems to be rushing into Twitter, Instagram, Snap, WeChat, WhatsApp, Line, Google’s variety of offerings including of course Search, and so many such digital tools.

So, things will be back to normal after a few months for Facebook. They will undergo detailed investigation that is reserved for Russian hackers, questioned on Capitol Hill, excoriated in the “adult” networking circuit, and punished in some way, like being forced to implement tougher security measures. Facebook’s reputation currently is in the dumps, and they should not be trusted as they have traded their users’ data. But apart from all this, do you think that anything substantive will happen to them? There are more than 2B users who depend on Facebook for communication. Not me however – I never seriously used the consumer version of Facebook, though I have an account with very sparse data on myself (I however use a corporate version of Facebook behind my company’s firewall for internal teamwork and collaboration, along with other tools such as Microsoft Teams and Yammer).

So here I am – not a regular user of the consumer version of Facebook, Instagram, Twitter, et al, but a serious blogger on this WordPress platform and LinkedIn user. I select what I wish to do, and cannot be led to use some tool that I do not wish to use. Further, I am careful not to accept terms and conditions of these tool makers and platform owners, and do not click to give access to all my data voluntarily. Neither do I agree for unsolicited marketing communications from these folks or their marketing collaborators, though sometimes it is made difficult not to agree.

The question is – what is more important: maintain privacy or lose it due to either the lack of security of the provider or his desire to sell off my data for money? In my case, the answer is crystal clear – I would rather forego the convenience of “checking into” Facebook and detailing what I am up to, or posting my photographs enjoying a vacation with my family, but safeguard whatever little privacy that I still have. It is not necessary for the entire world or my friends and relatives, or for any government, to know what I am doing at this moment (I am blogging now!). It is irrelevant to them, but it is critical for maintaining my sanity. It is not that I am anti-social – I am in multiple WhatsApp groups – but I wish to remain private. I do not respond to LinkedIn invites from people who I have not yet met. I should know the person through a referral or I should have met that person before I would even consider accepting the invite.

Nothing wrong with wanting to be a private individual. However, we know that most teenagers willingly give away their most personal data on the Facebook platform. The issue is that Facebook cannot be trusted to keep that data totally private and secure.  We do not know for sure that the data is safe and secure. We also do not know if they had traded our data for money. We never knew that Facebook gave away the data on 50M Americans to a U.K. Professor for some vague research, who in turn handed that out to the now infamous Cambridge Analytica.

It is more important to spend F2F (“Face to Face”) time with friends, relatives and family, like in the old times. It is more important not to be influenced by hate speech and lectures that are posted on all social media platforms. Did we live without a mobile phone or social media platforms in the past? Did we live a life without networking? We did live well, but I believe we did not learn to adopt technology well in the 21st Century. We just blindly jumped into all that is new without much analysis.

I am not against any of these innovative tools and platforms which have created enormous value to equity investors and users. I think we need to be extra careful in how and why we use these in our lives. Do we give our date of birth or place of birth to our neighbours or strangers? We don’t. We do not share any personal data in public. The same caution applies when we venture into digital space. We cannot ignore the fact that digital platforms are fast proliferating across our lives, and will come to dominate all facets of our existence. We may not be able to order ice cream without a social media account in future, or something as ridiculous as that.

Welcome to a world less private, more intrusive, less secure, and more dangerous as a result.

Hope you enjoyed your weekend.

I am happy to share the fact that I am now allowed one glass of wine, and I will soon be posting on the wine I had and the experience of de-addiction to wine.

Cheers,

Vijay Srinivasan

25th March 2018

Falling Markets


We saw that the major equity markets around the world suffered steep losses during the week which just ended.

There are always multiple reasons why the equity investors fret at times and start a major selling operation of their holdings. Mostly it is sentiment, sometimes emotions, but almost always there is a reason or many reasons why the market sell-off happens.

In the current scenario, the negative sentiment is driven by multiple factors afflicting the U.S. economy, aggravated by bad government policies which appear to keep shifting all the time under the wise administration of President Trump. To start with, there has been a series of exits of experienced people from the administration – the latest being General McMaster who was the National Seecurity Advisor to the President. He has been replaced by the rather hawkish hothead – John Bolton, who is likely to plunge the U.S. into another back-breaking war, either with Iran or North Korea.

So, you have a combination of the following factors:

  • a huge deficit budget of USD 1.3T which has just been signed off by the President, necessary to keep the government running till end of September 2018, which has a massive allocation for the military (not all of that is necessary);
  • a possible credit squeeze, with the Federal Reserve planning to raise the interest rates at least twice if not more times during this calendar year;
  • a high dependency on China which buys most of the U.S. Treasury Bills;
  • a looming trade war primarily with China, with the President planning to impose tariffs worth USD 50/60B on imports from China, and the already planned retaliation by China;
  • a strong noose tightening around the President’s neck – the Russia investigation of Special Counsel Robert Mueller – Trump cannot fire Mueller as that would lead to unforeseen consequences, but he might still do it, plunging the U.S. into uncertainty;
  • more potential exits from the Trump administration – Jeff Sessions is one clear possibility;
  • sex scandals threatening Trump from a series of women – the courts are admitting the cases against the wishes of Trump and his lawyers;
  • the clear possibility that Kim Jong Un might refuse to enter into talks with the U.S. if John Bolton is involved; North Korea termed Bolton as a “scum” and a “blood sucker” in 2003/04 and is unlikely to talk to him if Trump deputes him or brings him along to threaten Kim Jong Un, which will very likely happen;
  • the Iran nuclear deal imbroglio; Trump might refuse to certify the continuance of the deal when it comes for his quarterly certification signature as required by the U.S. Congress, in which case Iran will be free to walk away from the deal, and that might lead to Bolton arguing his case to bomb all of Iran’s nuclear facilities;
  • the continuing loss of elections to the Democratic Party as just happened in Pennsylvania – the potential loss of both the House and the Senate majority, which is not likely, but appears possible now;
  • and, so on and so forth…………there are many such factors

So, the equity markets falling was expected by all and sundry. If I recollect, the U.S. market ran up by more than 6,500 points (DOW) in about 14 months from the time Trump took office, allowing him to tout the market gain as one of his signature achievements. Now out of this increase, 3,000 points are gone, and it is likely that the sell off will continue into next week.

A government that is so critical for world peace and stability cannot be tottering every day. One has to just see CNN News and the U.S. Talk Shows by major news organizations, to get the full import of what is going on in Washington D.C. The Trump administration has become a laughing stock, even within the U.S.

The only silver lining is that Trump is the first U.S. President who has succeeded in pushing North Korea to the negotiating table (mostly by harsh tweets from Trump!), though both Koreas claim that they decided to play the Olympic game together and cool off the rhetoric. The other achievement of Trump is that he is the first U.S. President to stand up to China without any fear of repercussions and challenge them to a trade war.

While these are great to see and hear about, we have to recognize that Trump has still not won any battle with either one of these countries. He could not even win the Border Wall case against Mexico, which refused to foot the bill. It is going to be very tough for the U.S. to negotiate when Trump has surrounded himself with foreign policy and military hawks such as Mike Pompeo (the new Secretary of State, yet to be confirmed by the Congress), John Bolton (the new National Security Advisor who does not need Congress confirmation), Gina Haspel (the new CIA Director nominee who needs to be confirmed by the Congress), and the perennial lady hawk Nikki Haley who is the U.S. Ambassador to the U.N. A war is surely looming with such hot heads around the President, who himself is a strong hot head who will not take a slight from anyone, or advice from anyone. All the major departures have happened apparently due to the fact that the concerned person begged to differ from the views of the President.

So, here we are, with markets having fallen all around the world, including India’s SENSEX. We are entering an uncertain phase in world history and diplomatic relationships. Everything can come off unhinged. No relationship is going to remain sacred. Continuous drama at the White House is going to rock the markets on a daily basis. The markets can no longer afford to do their own business disconnected from political and economic realities.

So, we are all in for a rocky ride, folks.

Enjoy the ride however.

Cheers,

Vijay Srinivasan

24th March 2018

Six More Years


What could this title possibly mean?

Any guesses?

Is it the time taken to accomplish something momentous in the history of this planet?

Is it the time that India will take to supercede the U.K. and Germany and become the fourth largest economy in the world?

Is it the time that will need to transpire before all wars in the world come to an absolute and final end?

Does it indicate the time when most of us would have retired for good?

None of the above, of course.

We are going to have 2 plus 4 more years of Donald Trump as the President of the U.S. and 6 more years of Vladimir Putin as the President of Russia.

You don’t agree?

Then you must be really out of touch with world affairs.

Donald Trump has no serious contender, either within his own Republican Party, or in the opposition Democratic Party, today or in the next U.S. Presidential Elections due by November 2020. Do you honestly think that the Democratic Party veterans can fix their house and elect an electrifying politician as their leader (like they did with Bill Clinton and Barack Obama)? I do not think so given the state of affairs afflicting the Democratic Party. If a Democratic Party candidate (Conor Lamb) had to embrace Trump’s philosophy and policies to win the Pennsylvania House Elections, then you can understand the ideological challenges that they are facing. According to the Democratic Party, more of Trump’s policies are good as these will help them to win elections in a convoluted twist which can only happen in the U.S.

So, my conclusion is that Trump will start working with Democratic Party House Representatives and Senators ever more closely in the coming months, as they will keep winning elections against Trump’s own party! Trump will be known as the first ever President to cross the aisle!!

Given that the heartland of the U.S. is unlikely to give up on Trump, and given that there is no serious contender, it is likely that he has a good chance to retain the Presidency, and continue his policies (albeit in a watered down fashion as he has to increasingly work with the Democrats to pass legislation) for another 4 years after 2020. This is a hypothesis which I would like to challenge, but I am not finding coherent arguments in favour of any one else at this time.

Trump will do several things to retain the Presidency. He will surely launch a war (potentially against Iran), put China on the dock for trade violations, censure Russia to please the Democrats, and get back to the negotiating table for trade deals with NAFTA and TPP. He will continue to tweak Tax Reforms to ensure that Americans have more money left in their pockets to spend on, well, America-made goods. And so on, and so forth.

Let us now look at President Putin. He is an amazing guy, with a toughness that the Western Allies cannot emulate easily. He flexes his muscles at the time and place of his choosing. He has put the ex-Soviet states on notice, and it is not a secret that countries on Russia’s borders are feeling shaken by his actions (like his recent announcement on missiles that can take out any part of the planet), and his feelings about ex-traitors (as we recently witnessed in the U.K. though there is no proof linking the chemical attack to Russian operatives). Putin has also been measured when it comes to dealing with the U.S. He is yet to take retaliatory action against Obama’s expulsion of Russian diplomats and his shuttering of the Russian Consulate in San Francisco. But it does not appear that he is that considerate when it comes to smaller nations such as the U.K. as we read today that he has retaliated against the U.K.’s expulsion of Russian diplomats, and also tacked on additional measures to incite the wrath of Theresa May and Her Majesty’s Government.

President Putin has a 80% chance of getting re-elected for a third time as the President of Russia, and that should be real bad news for most of Western Europe, the U.S. and its allies. Putin does not forget or forgive slights that others invoke on his Mother Russia, and we can expect the emergence of a new Cold (Hot) War in the immediate future. Whether Russia is in the top 10 economies of the world or not (it is not) does not matter to Putin. He wants Russia to be respected and feared. As long as the West disrespects Russia and Putin by extension, continues sanctioning Russia against its perceived or real misdeeds, and challenges its world view, things are going to deteriorate toward the levels that the world witnessed in the 1960s to 80s. Looks like Putin is not going to go away anytime soon, and the Democratic Party of the U.S. has to put up with him for a fairly long time, it appears!

So, there we go – two Presidents of two of the top countries of the world, are going to continue as Presidents till 2024. On the other hand, we also saw that President Xi Jinping of China has been accorded the very rare privilege of continuing as the President of China for his lifeterm. So only the U.K. and France are left out!!!

We are going to have some real fun watching how the world morphs under these three hugely important and historically significant leaders in the coming years. Belt up, folks, here we go.

Enjoy your weekend, I am off wine for a few weeks under duress, so I am writing this post without wine, and am discovering the fact that I am still able to think and write some decent English while expressing some thoughts of value to my readers.

Cheers,

Vijay Srinivasan

17th March 2018

 

Doing the right things for America


I have been ambivalent when it comes to judging President Donald Trump of the U.S.

In my initial observations (more than a year ago), I took his side, and even my family did not like my views. There were a number of friends who disagreed with me on this subject, especailly my point that “President Trump is the best thing that could have happened for America”. I tried to justify my orientation towards Trump but it did not carry weight.

Then, I became vexed with his constant shift in stance towards global foreign policy matters, and the constant barrage of almost stupid stuff that his people in the White House were spewing out on a daily basis. I started moving away from my earlier position in support of Trump, but then I had no one else to support as the Opposition Democratic Party was in a worse situation with no coherent strategy or leadership to counter Trump (they still continue to bask in President Obama’s legacy and their great idealism). So, here I am with no one to propagandize in the U.S. Politics (please take note that I am not a U.S. Citizen, however I feel that as a global citizen concerned about global affairs, I have not only an obligation but a right to express my views and debate with others who are equally concerned about the status of affairs in global policy matters, which should bother and concern all of us).

Of late, I am seeing a new Trump (though inconsistent in messaging and incompatible with his own team due to lack of coordination apparently) from the manner in which he is tackling (a) gun violence; (b) budget-related issues; (c) trade matters; and, (d) immigration.

Let us look at gun control issues, now raging in the U.S. due to the most recent mindless killing of 17 people in a high school in Florida. The gun lobby (read NRA – National Rifle Association) has come under severe pressure from the student and teacher community, and also from the general public. As I have written in my past blog posts, the U.S. is unique in allowing gun ownership in a rampant manner under the cover of the 2nd Amendment to the Constitution of the U.S. which permits citizens to bear arms. I do not understand how this will be relevant in the 21st Century. Not only that, even a 18-year old can buy “assault rifles” which are used only in times of war by the military. What is the need for such high velocity, high magazine rifles in the hands of normal citizens, and more specifically, in the hands of a 18-year old?

President Trump has taken a tough stand, and is holding his ground against his own Republican Party and the NRA in a high-profile standoff. He is more credible in this effort than President Obama would ever have been. We have to of course, see what happens eventually in the gun legislation that needs to pass both the Senate and the House of Representatives, and I believe given that both Parties have avid gun owners amongst their ranks, it is unlikely to pass either legislative body. However, let us compliment President Trump for his principled stand, and his threats to sign executive orders banning “bump stocks” which converts an ordinary rifle into a high-discharge rifle.

On Budget issues, again President Trump has won where President Obama failed. The U.S. has to reduce Corporate Taxes to enhance its business competitiveness and bring trillions of dollars stashed away by big corporations in offshore locations. There are pros and cons, but it is critical to pass a Budget Reform Bill, and then may be they will keep tweaking it. This is a very important and significant legislative victory for President Trump and his Republican Party. The Democratic Party failed in its strategy to modify the bill, and finally let it pass without much of a fight.

On Trade matters, President Trump is finally taking action against countries which dump their goods below costs in the U.S. Yesterday, he imposed tariffs of 25% on Steel and 10% on Aluminium, and more are coming. While such tariffs will distort trade, anger important allies, and raise the cost for U.S. Manufacturers, nevertheless the action sends a very important message to the world that the U.S. will make its own decisions to suit its own government and people, rather than engage in endless persuasion. There is a strong message to China in this whole matter, though China is not one of the top 5 steel or aluminium exporters to the U.S. China should be aggressively rethinking its strategy as its “take no prisoners” kind of tactics will no longer work with the U.S.

Eventually, the trade matter will settle down and the stock markets though rocked will reach some equilibrium status. Nothing much to worry on that count. However, President Trump is sending decisive communications to all countries that he is his own man – not even a “party man of the GOP”, and he has innate thoughts on many global affairs that he thinks would require reckoning under his rule.

I will write separate blog post on the U.S. Immigration Policy changes.

Welcome to the new U.S.

Enjoy your weekend,

Cheers,

Vijay Srinivasan

3rd February 2018

The impotence of the global order


I return to one of my favourite topics after many months!

It took a serious struggle in the U.N. Security Council for the 15 members to agree to a humanitarian ceasefire for 30 days. What does that say about our global peacemaking council, and what does that say about armchair leaders in world capitals who dictate to their U.N. Ambassadors about how to vote for the Security Council resolution? After all, the 30 day truce was just for delivering food and medical aid to the suffering civilians who have been bombarded constantly.

It is OK for them that innocent civilians die every hour in Eastern Ghouta region near Damascus in Syria. While I am not fond of Nikki Haley’s vituperative outbursts every time she encounters Russia at the U.N. Security Council, I am now questioning the motives of Russia. It is collaborating with Syrian government in bombing the civilian areas in Eastern Ghouta, and apparently, the U.S. or allied forces cannot help the rebels holed up in this region as it will inevitably lead to a war with Russia. While I am also not supporting the misadventure of the U.S. in the Syrian struggle, I think wherever these two great nations have interfered, it has led to serious wars and bloodbaths such as in Afghanistan starting from the late Seventies. What do these countries gain? Of course, power and influence, the ability to maintain a naval or air base, and to counter each other in this global warfare. Unfortunately, the people who are dying are not the military forces of either side, but poor civilians long suffering under the brutal President Bashar al-Assad’s rule. President Bashar apparently likes to clean out his own countrymen along with the rebels fighting him. And, President Putin of Russia is his most ardent supporter.

For good measure, we have Turkey, Iran and Iraq also involved in this war in someway or the other. Turkey does not want the U.S. to collaborate with the Kurds who are helping in the fight against the ISIS in Syria. Iran seems to be having its own plans. In a nutshell, Syria is a total mess.

My suggestion would be to bring the entire country under the auspices of a U.N. Peacekeeping Force. This would require a hardcore negotiation with President Bashar, but Russia will stop any such initiative dead on its tracks, as it does not want any direct U.N. involvement. It suits Russia and the U.S. to directly get involved and oppose each other in a huge proxy battle with the Syrian civilians as the casualty. This is a total and abject failure of the U.N. system and the global leaders who are responsible to bring any genocide to a complete stop. Just because people live in a rebel-controlled area (they have always lived in the area) does not mean they are traitors to the Syrian government. This interpretation is totally wrong and completely objectionable. Where will these people go anyway in the face of continuous bombardment? Why should civilians suffer like this even in the 21st Century? The same is the case in Yemen, with Saudi Arabia bombarding the people there because it does not agree with the political situation in that country. Thousands of people are dead in the Yemen war.

There is no respite in the Middle East, which must be the most bombed region after the battles in the Second World War. The Western nations (the U.S., the U.K., France, Australia) have used all their latest ammunition in the Middle East wars over the past 17 years (and even before that in the Kuwait vs Iraq war). Russia is now trying out its latest gear in Syria to ensure all their equipment do indeed work, and also to demonstrate to Europe and to the U.S. that it has missiles and planes which can deliver big damage, so don’t mess with us………….

Unfortunately, the only global mechanism we have is the U.N. and its almost useless Security Council.

There is nothing much else that can be achieved if the big countries who hold veto power cannot see eye to eye. I also believe Nikki Haley should use her considerable negotiation tactics instead of just shouting at the Russians who simply ignore her. There is just no point – she needs to work with her allies to get Russia into backroom negotiations and offer sops to Russia like not enhancing the already stiff sanctions regime that has been imposed on Russia for its indiscretions in Ukraine and Crimea. One cannot keep punishing a global power continuously, and blaming it domestically for election interference all the time, while expecting cooperation on tough global war-like matters, like in Syria. What is the point? The manner in which Nikki Haley operates is inconsistent with her boss’s approach – and the boss is President Trump, who wants to “work with” Russia, of course.

So, in a nutshell, it all again goes back to super power rivalry. The U.S. diplomats may not like Russia or President Putin. The Western nations may not like them either. But, do they have a choice?

Absolutely not.

And, where is the other super power – I mean, China? Just behind Russia, all the time. You get not one veto, but two.

Negotiate in good faith and without the theatrics and drama.

And, achieve peace for all. Stop the bombing, and save the remaining people, all of them.

Stop the total failure of the U.N. system.

Cheers,

Vijay Srinivasan

25th February 2018

 

The Digital World


The “Digital World” is happening rather fast in our lives today.

In countries like Singapore (wherein I reside), the government actively and constantly encourages adoption of digital mechanisms in daily lives of citizens. Singapore probably is the most advanced digital economy in the world today. Almost all transactions are going cashless, and the transportation system just announced that they would not accept cash in stations, people would have to use electronic payment cards to use the bus and train systems. Very few people go to bank branches. I keep some 50 dollars in the wallet, and mostly there is no need to use it. I pay for lunches with a pre-paid card, and if there is no balance in the card, I can pay for lunch by tapping my Visa or Master card on the credit card terminal – there is nothing to sign (the danger is if someone gets hold of your credit card, they can not only eat all your lunches, but can also spend a lot of your money using the “pay by wave” mechanism, which does not need your signature or entry of your PIN into the terminal, like it is required in India). All corporate and even personal applications are moving to the cloud, which is more cost-efficient and available any time on demand – there is no need to start up any hardware. All cars on the road are going to be monitored via satellite sometime starting in 2019. Citizens have to make a compromise between safety/security/convenience and lack of some privacy.

Other countries are way behind, but it is only a question of rather short time when every one catches up as the digital movement is inevitable. I was (and still am) amazed at the rapid advances that India has made in several areas in the digital world – the one which personally impacted me was the Income Tax System, which has recently introduced an e-vault mechanism for added security. I submitted an online complaint using their grievance portal, and got a message that any documents to be uploaded have to be in PDF format, and multiple documents have to be Zipped together in one Zip file!

I wondered how many citizens would know how to use digital systems, especially in India. As the tax net widens to capture many people who have not paid income taxes in India till now, there should also be an education system which delivers the modus operandi of filing taxes electronically. How will a farmer who has never used a laptop going to understand and file taxes? Even folks in cities have trouble with various things such as digital signature needed to file taxes or rectification of tax data. So, the need for chartered accountants still continues to remain strong (in India).

In Singapore, I am not filing any taxes as there is a special “no tax filing” mechanism – the Income Tax Department gets the income details of each and every employee electronically, and computes the tax automatically. Only if you disagree with the computation, you have to log in and file a complaint. It is that simple. No need for digital signature or uploading documents – they have all documentation and my identity.

As we move aggressively into the digital world, it is critical to take the older generation along with us – no one should be left behind. This means investment in a support system which guides these folks as they are gently migrated to the digital world. For the folks who are already employed in the information technology industry, it should be rather easy. How about other industries, and how about people employed at the lower rungs of the corporate ladder? Here is where India needs to learn from Singapore – constant communication is the key.

In large countries like China and India, there is also the worry about workforce displacement due to the influx of digital technologies. Again, this is inevitable in all industries, not just in information technology industry. People have to constantly keep themselves updated with new technologies, and enhance their skill levels to compete with technology even while adopting it. There is always a place for skilled people in any industry, and so it is absolutely essential for each one of us to keep ourselves moving in sync with technology. We cannot be complacent, we cannot be slow, that is the reality of today’s life. In fact, we have to be ahead of robots – how? I don’t know, but we have to see how robots are entering our digital lives and identify areas wherein we can collaborate or leverage robots to achieve our corporate or personal goals.

Looks daunting? Yes, it is.

But human mind is innovative, it is complex, it can constantly come up with solutions to new problems and challenges.

I am sure in the digital world as well we will see the ingenuity of the human mind. The key thing is to identify opportunities in our own lives to leverage and benefit from the incessant adoption of new technologies – I am not talking just about apps on our iPhone or Android phone – there is much more going on around us. Look out, read up, skill up…………and enjoy the digital ride of our lives.

Cheers,

Vijay Srinivasan

24th February 2018

 

The Culture of Materialism


The premise of this post has been to establish the link between materialistic greed of (certain) people and corruption and overall destruction of value for citizens who lead normal lives. I went for an event today, and this topic was discussed among a set of trusted friends who had very different views. As an author, I am supposed to state my views in a non-diluted manner, while accepting criticism or praise in equal measure, which is exactly what I am going to do now – I have not changed any of my views in this final version which is getting published this evening (Saturday evening in Singapore), though I did think about some of the alternate views expressed by friends today on this topic.

Here is my view in a few bullets (this is not the normal way I write, but I thought it would be good to highlight):

  • Countries which unabashedly focused on the material well-being of their citizens in the 1970s and 80s, paved the way for economic growth to be the dominant factor in their countries’ vision – examples would be South Korea, Taiwan, Hong Kong, and Singapore – the four “Tiger Economies” of Asia. This meant that citizens were led to believe on the economic vision of their leaders, in turn, leading to rapid growth over the past 3 to 4 decades, rapidly enhancing the GDP per capita of these nations, and focusing on generating material wealth for the citizens. This has already happened – Singapore now is the 4th richest country in the world in just one generation! There are pros and cons, but one cannot argue with the fact that economic progress has been clearly accomplished.
  • Countries which focused on political philosophies and social development in an Utopian manner did not progress fast due to the debilitating bureaucracies that these countries established, leading to slow progress and corruption as the main driver for faster movement of business. There are many examples of such nations, mostly democracies and some dictatorships, but I am not going to name them. Established mechanisms of corruption and nepotism led to stealing of wealth from ordinary citizens to line the pockets of politicians and bureaucrats, and the wealth generation was isolated in few family run businesses. Not surprising, however.
  • Over the past decade or so, these large countries have seen what the smaller countries have accomplished, and are trying to adopt some of the policies though in a much belated and haphazard manner. However, the institutionalized corruption continues irrespective of change in governments as the essence of bureaucracy has stayed the same. This implied focus on materialistic economic growth will take a very long time to trickle down to ordinary citizens, and will again benefit few individuals and families, as we are seeing. Tax payers’ money is being stolen brazenly to benefit these folks.
  • So, the derivation is that the focus on materialistic wealth generation is not going to work for larger countries since institutional changes and policy frameworks have not changed for the better. This would mean that corruption would accelerate and lead to larger financial scandals, while ordinary citizens would see probably a lower impact of routine corruption due to e-governance initiatives (the only major benefit, yet to be realized however).

In a nutshell, the culture of materialism will lead to skewed economic growth for larger countries, benefiting the same businessmen who benefited in the past. Lifting millions of people out of poverty towards a USD 5,000 income per capita is not a simple challenge – it cannot be compared with the easier task that the Tiger economies had with their singular focus on trade. So, there is going to be very hard time befalling on millions of honest working folks and farmers, who would be held subservient to the governments by paying more taxes and more fees to obtain banking, insurance, and other services.

This is indeed a sad situation. Expecting millions of ordinary folks to understand economic and digital principles is foolhardy, as the base of education and healthcare has not been laid out over the past many decades. When ordinary people see how the rich people fleece money in an illegal manner from the same banks and governmental institutions, what ideas would they get? When these powerfully connected and rich people escape without so much as an indictment, what message does that send to others? While a French revolution is not in the offing, ordinary people would have to take some kind of action within their control, right?

Fascinating, but also saddening. Think about the whole complex situation developing, and you will see that WhatsApp messages and Fake News do not tell the entire story. The deeply maligned people are going to scot free, and no one can do anything. This is the result of all our democracies and institutions in action. Even the U.S. is not spared, as you see in daily news, day in and day out.

The culture of materialism is destructive. It will lead to serious social divisions in society which cannot be fixed in one generation.

Think, probably with a drink like what I am doing now!

Cheers,

Vijay Srinivasan

17th February 2018

Gini Coefficient


I am not going to explain what exactly is the Gini Coefficient or how it is computed for a country or society.

Suffice it to state that the Gini Coefficient is a good measure of income inequality – how wealth is distributed in a country. A perfectly income-equal country (where everyone earn the same amount of income) has a Gini Coefficient of 0, and a completely unequal wealth distribution leads to a Gini Coefficient of 1 (wherein one person has all the income, and the rest have none at all).

There is, of course, no country in the world with a Gini Coefficient of 0 or 1. The dispersion lies somewhere between these two figures, but the best “equal income” countries have a Gini Coefficient below 0.5. It is not practical to expect a figure better than that (like a 0.2 or 0.3) in a largely capitalistic world that we live in. Examples of such countries include South Korea, Canada, and many Western European countires. The Gini Coefficient has been deteriorating over the decades, as concentration of wealth in the hands of few people increases, as we have seen in many countries.

Governments are severely handicapped when it comes to tackling income inequality in their respective countries. Economic and taxation policies do not curtail the increase in the concentration of wealth. Many governments allow fixed capital formation in their countries with little tax impact, in order to attract investments and wealthy folks to their countries. As societies become prosperous in developed nations (in Asia that would include Hong Kong, South Korea, Singapore), the desire for further wealth accumulation increases in an unfettered manner based on past successes. Real estate prices go up in an uncontrolled manner, leading to a societal segmentation which segregates society into multiple fragments, and engender a more unequal income to be the cause of undesirable thinking in the disadvantaged populace. An “entry” price is eventually established for each such segment of the society, and the wealthier sections of the society become distanced from the so-called proletariat, even in advanced countries. This kind of “pricing” manifests itself in multiple ways – more BMWs, Jaguars, Bentleys, Ferraris, Lamborghinis on the roads is a good example; the other example is the inherent price fixation in real estate for exclusive high-end zones which precludes consideration by even the “above-average” dual-income couples who aspire to move into a better accommodation in such zones. General cost of living increases, and economic fundamentals adjust to serve the needs of the well-heeled. Gradually, the segmentation sets in firmly, and several enclaves form to cater to the respective segments, leading to even more dispersion.

While many of us have heard about the Gini Coefficient not so frequently, it is a commonly used economic term which concerns global multilateral economic and financial institutions. The global concern about unequal wealth distribution and concentration of wealth in the hands of few oligarchs is well placed and requires urgent tackling. Socially progressive governments in countries such as Switzerland are actively and very seriously considering various policy actions in this regard.

The problem with the fast developing countries such as China and India is more acute as the embedded inefficiencies in these countries allow for faster wealth accumulation in fewer individuals due to nepotism and favouritism, and other factors. Wealth created by family-run conglomerates far exceeds that by public sector corporations (or largely state-owned enterprises, which are publicly listed in the bourses). While it is commendable that the private sector wealth creation and capital formation is driving the business in India, it is also responsible for increased income inequality in a country with 1.25B people.

There are no easy answers for solving this rather intractable problem, I will let you think about potential solutions. In the meanwhile, I am returning to my usual weekend glass or red wine, while thinking about the solutions. What can we all do to reduce such inequality? Such thinking is even more important and relevant in wealthier countries such as Singapore, wherein the folks who earn far below the per capita income are very disadvantaged to sustain themselves in a fast-moving, economically-driven society.

Have a good weekend folks, and please think.

Cheers,

Vijay Srinivasan

10th February 2018