The speed bumps and potholes in our progress.

Yesterday a High Court Judge in Karnataka criticised the government for collecting extra taxes on cars when there are 156 speed bumps on the road between Bengaluru and Mysuru and people are breaking their backbones because of potholes. Karnataka has a Congress government. Roads are a reflection of India's progress in the 67 years after independence. The letter of resignation from the Congress Party, written by Ms Jayanthi Natarajan, Minister of Forests and Environment from July 2011 to December 2013, to Sonia Gandhi, President of the Congress, vividly illustrates why our progress has been so poor. The letter is long, full of self-justification and constantly repeats her loyalty to the party. Not a word about loyalty to the nation or the people of India. Two sentences are particularly revealing and shocking. When she was sacked as minister the then Prime Minister, Manmohan Singh told her," Jayanthi, I have been told by Congress President, that your services are required for party work." Surely, the Prime Minister chooses his cabinet and only he decides who will serve as minister but Mr Singh was merely a messenger for Ms Gandhi, meekly obeying any order to hang on to his post. Ms Natarajan writes," I received specific requests [which used to be directives for us] from Shree Rahul Gandhi and his office forwarding environmental concerns in some important areas and I took care to honour those ' requests '." She held back 350 files which had already been cleared. Why did she take orders from Mr Rahul Gandhi, and what about her oath to bear ' true faith and allegiance to the Constitution of India '? Another woman, Foreign Secretary, Sujatha Singh has been asked to take early retirement because she ran her own foreign policy, repeatedly embarrassing the Prime Minister. Over the last 67 years we have been repeatedly humiliated by China and Pakistan who are occupying large tracts of our land because of our policy of submission. That is because there are people who support Chinese power over us while others point to the advantages of kowtowing to China, forgetting to mention that the cockroach-eaters despise those they consider weak. Why was it alright for Indira Gandhi to add socialism and secularism to the preamble of the constitution during the dark days of the Emergency and why is it wrong to remove them now? As for the Italian marines they dare not be jailed because they are Italian and they cannot be freed because the Congress maybe blamed. Perhaps we should allow them to escape and then let the CBI fellows travel to all the fleshpots of the world, looking for evidence, as they did with Quattracchi. At least they will have a good time.

The inscrutable economy.

We do not know what is happening inside China. Not many people do or understand. China has sacked 200 officers, including 21 generals in the People's Liberation Army. Since 2013, 4024 officers, including 82 generals have been under investigation for corruption related to infrastructure construction, property development, equipment purchase as well as personnel and fund management. We do not know if this is a genuine cleanup of corruption, an attempt to reduce waste of public funds for economic reasons or giving friends of the new administration a chance to accumulate wealth. A few days back Prime Minster Li Keqiang was in Davos promising that China will " continue to pursue a proactive fiscal policy and a prudent monetary policy " because the economy was facing problems. Which is extraordinary because last year the economy grew by 7.4%, among the highest in the world. But what if the growth falls to much lower levels? Except for the US, growth in the world has come to almost standstill, but here too the recovery has enriched the top 1% while income of the rest 99%, after adjusting for inflation, has actually fallen a little. The Eurozone shrank by 0.6% in January, Japan is battling to get out of recession, precipitated by the increase in sales tax from 5 to 8% in April, while Singapore has cut its interest rate, prompting its currency to fall. The Swiss National Bank  has set a negative interest rate of -0.75%, which means that savers will have to pay to keep money in the bank, to stop the Franc from appreciating against other currencies after the Bank abandoned the currency peg with the Euro. Denmark has also set a negative interest rate of -0.5% to protect its currency peg. China's economy is reliant on exports which cannot grow if the rest of the world is slowing down. The top 1% is hardly going to shop at discount stores for cheap, poor quality Chinese goods. It could stimulate the economy by increasing spending but that will only increase the levels of debt, and result in asset price bubbles. Along with growth fiscal revenue is also growing more slowly. The local governments are borrowing to service older loans. Capital is flowing out of the country. The People's Bank of China is having to support the Yuan to prevent it falling very fast. If the Bank reduces interest rate to stimulate growth more capital may flow out and the Yuan could fall further. The government had to ask people to buy stocks to support falling share prices. China wants the Yuan to replace the dollar as reserve currency so it cannot risk competitive currency depreciation with other countries. Will the Chinese economy crash with severe social unrest. Would be great for India if that happens.

Laws of economics do not apply to us.

In an article Kaushik Basu, Chief Economist at the World Bank, and Avinash Dixit, Professor at Princeton University, point out that the government has no interest in controlling corruption. " Most agents who comprise government - politicians, bureaucrats, law enforcement officers - benefit from corruption," they write. Indeed the previous government even proposed to punish bribe givers as severely as bribe takers. There are two types of bribe givers, ordinary people are forced to pay bribes to obtain services to which they are entitled. These are harassment bribes. Business people pay non-harassment bribes to commit illegal acts, such as obtaining licenses cheaply, cheating on taxes or getting control of precious national resources. Basu and Dixit point out that when a business bribes officials," The winning firm profits, but the efforts and expenses of all the losers more than offset this gain. Worse, to the extent that corruption acts like a tax and therefore deters future investment, it hurts profits and growth for all business." Thus in a corrupt environment everyone loses. They propose that businessmen in India should set up an informal institution which everyone will be invited to join by promising not to indulge in corruption. This will investigate all allegations of corruption in business and punish the guilty. Perhaps Basu and Dixit are overlooking the fact that almost all businesses in India, except new ones, such Infosys and Flipcart, are family owned and were set up during the time described as the ' license-permit raj ' when foreign competition was strictly restricted, allowing Indian companies monopoly control of the Indian market. Children of the original founders are steeped in the same tradition of rent seeking and entitlement. That is why there is no research, no innovation and no international success. We have no companies like Apple, Google or SpaceX. Apple sold 74.5 million iPhones in the last quarter, its revenue was $74.6 billion, more than the GDP of Denmark, and its profit was $18 billion, more than the GDP of Costa Rica. A team of Indians has won a prize of $1 million from Google for building a moon rover and hopes to win the full prize of $30 million for designing a rocket. A US company contributed the prize money and the Wall Street Journal reported it. Will any of our 103 dollar billionaires dream of spending any of their money on such research? Did any of them support Sarita Devi by filing a criminal case for cheating against AIBA in Switzerland? Perish the thought. They will build huge mansions in India, buy luxury apartments in London or New York and buy luxury aircraft with which to travel from the luxury mansions to their luxury apartments. Since they have no ideas they must bribe to stay in control. Sell companies that default on debt and allow companies to fail. The crooks will disappear.

Are we independent of the British?

Claims by some scholars of old Indian texts, such as the Vedas, that Indians had invented airplanes, plastic surgery and in vitro fertilisation thousands of years ago but had forgotten that knowledge, at the 102nd Indian Science Congress, were greeted with extreme ridicule and contempt by our usual pseudo-secular pseudo-intellectuals. Sadly, these are the same people who think that anything broadcast by the propaganda channels, BBC and CNN, is gospel truth and President Obama is some kind of latter day prophet whose homily on religious freedom was instantly construed as a vindication of their hatred for Hindus. To commemorate 70 years of liberation from Auschwitz some 300 survivors returned there for a service. Six million Jews were killed by Hitler and the world has not forgotten it but the 3 million starved to death in Bengal by Winston Churchill, the Butcher of Bengal, have been quietly buried by these same sanctimonious frauds. " I hate Indians. They are a beastly people with a beastly religion. The famine was their own fault for breeding like rabbits," was Churchill's contemptuous dismissal of the genocide. And what religion was he talking about? Hinduism, of course. The British constantly abuse Hitler but we have allowed the British to write our history that colonialism was good for us. Hey, they built the railways didn't they. So what if they killed 3, 10 or even a 100 million Indians. Over the years the British have very successfully managed to portray this villain as some kind of a colossus even secretly paying dock workers to lower cranes as his body floated down the Thames. Occasionally someone may acknowledge that Churchill was a " ruthless egotist, a chancer, and a charlatan" but only " at times " and we should forgive his little quirks. He was human after all. No he was not. He was a cruel, ruthless and inhuman moster, just as evil as Hitler, maybe even more evil because he defeated Hitler. Alexander Litvinenko worked for the Russian secret service, who defected to Britain after speaking out against his seniors. Secret service officers are bound by an oath of secrecy in every country as demonstrated by the conviction of a former CIA official in the US, 2 days back, for talking to the Washington Post. Litvinenko broke his oath and by defecting to the UK became a traitor. Traitors deserve capital punishment. He was poisoned with polonium in 2006, for which the British blame President Putin of Russia. Without any evidence. 9/11 was an attack on the US, which had nothing to do with Iraq. Yet British troops joined the US in an illegal war, torturing and mutilating innocent Iraqis, and then destroyed all evidence. We Indians owe it the world to research and reveal the true history about the British. It may save innocent lives in the future.

Afghanistan could become a backdoor entry for China.

President Obama has left India. Safely, thank God. There is a cacophony of analysis from our intellectuals. Most attention is focused on a joint declaration in which both India and the US seem to have expressed reservations about Chinese intentions in its neighborhood. " Regional prosperity depends on security. We affirm the importance of safeguarding maritime security and ensuring freedom of navigation and flight throughout the region, especially in the South China Sea," reads a paragraph in the declaration. This has been taken as an attempt to contain Chinese hegemony. China is too rich and powerful to be contained like the Soviet Union was. The Soviet Union was economically isolated and most of its trade was with Comecon countries while about 14% of US trade is with China and China has $4 trillion in foreign exchange reserves, of which about 70% is in US dollars. With its wealth China could have inspired the whole of Asia towards economic prosperity and ensured peace by maintaining military balance but, sadly, Chinese leaders were children during Mao's Cultural Revolution and brutality is all they know. President Xi Jinping was 15 years old when his father was jailed. If this brutality is contained within China it will destroy itself from within. It has to be done in regular increments, small enough not to provoke a muscular response from China but significant enough to be noticed by the cockroach-eaters. Japan has amended its constitution so that its Self Defence Forces can now cooperate with armed forces of other nations for ' collective self-defence '. India is to sell weapons and patrol boats to Vietnam. As usual China reacted savagely to the joint declaration calling the trip symbolic and advising India not to fall into a trap set by the US. But while our Prime Minister is right to try and build strategic relationships with the US, Japan, Vietnam and Australia he should not forget a near neighbor, Afghanistan. After the withdrawal of foreign forces economic growth has fallen from 14% to 1.4% and the central bank is spending $40-50 million twice a week to support the Afghani. Afghanistan is a treasure trove of minerals worth between $1 and $3 trillion. And this is where China comes in. The China Metallurgical Group, a state owned company, has already signed an agreement with the Afghan government and could ask for permission to send  the People's Liberation Army to guard the mines. China is already a friend of Pakistan so the ISI would be defanged. When the Soviet forces withdrew in 1989 it eventually led to the Taliban takeover of Afghanistan, leading to 9/11. China is infinitely more dangerous.

To clean India clean out the dross in government.

The Republic Day celebrations in the rain are over. The POTUS chewed gum and the FLOTUS looked bored. They will shortly fly out with the Beast and 1,600 security gorillas to offer condolences to the new Saudi King, who has dementia, over the passing of the old Saudi King, who was ailing for sometime. While Mr Modi looked tense and fully concentrated on his guest Mr Obama looked relaxed and in control. After all, India has a lot to gain from nuclear and defense collaboration with the US but what the US is looking to gain we do not know. Still, if Obama took time out to come all this way for a full state visit immediately after the State of the Union address it must mean that he expects some good to come out of his visit. India has no hope of becoming an equal partner of the US within a lifetime so the only way to exert influence over Washington will be to become very rich so that American companies can make lots of money over here. That is why China is so strong. Will any US prosecutor dare to humiliate a Chinese diplomat as they did with Devyani Khobragade or torture a Chinese schoolgirl the way they did Krittika Biswas? The Chinese scoundrel, Shang Ming who actually sent those obscene emails went unpunished. To produce wealth we need the best infrastructure, which will cost a minimum of $1 trillion to finance. Some of the money will come from loans from international lenders, some from the private sector and some from our taxes. The trouble is that a lot of the money we pay in taxes is wasted by our politicians and civil servants on themselves. Last year the central government spent Rs 2.54 trillion on wages on its employees. The central government employs 3.45 million civil servants while states and municipalities employ countless more. Despite being billionaires politicians keep increasing their own allowances and perks. It is in the interest of politicians and civil servants, therefore, to keep increasing taxes with which to finance their extravagant expenses. The Comptroller and Auditor General has discovered how civil servants were looting millions by false billing. Our tax fellows cook up new ways to increase taxes on individuals and businesses. They are demanding that companies pay taxes on advertisements and promotions. Why? Companies must be paying service and other taxes on advertisements while television and newspapers are paying corporate taxes. Software companies are being forced to pay both service and sales taxes. So they are shifting offices overseas and are paying taxes there. Including the Vice President the US has 16 cabinet posts and 7 others of cabinet rank while we have God knows how many. To really have a Swachh Bharat take the broom to the dross in government.

We must be strong to be respected.

Amitav Acharya, Professor at American University at Washington DC, argues in an article that we do not live in a unipolar or multipolar world but in a multiplex world, much like a cinema complex where different halls show different movies with entirely different stories, set in different locales. Today the world is not controlled by Great Powers but " is also shaped by newer and regional powers, global and regional organizations, corporations, social movements and shape-shifting terrorist networks." Then he says that there is " a shared vulnerability to transnational challenges like climate change, terrorism, pandemics etc." Precisely. Therefore, it is not really a multiplex world, wherein each story is complete and unconnected with others, but more a multidimensional world, rather like the universe, where space-time is continuous but curved by the gravity of objects within it. Prof Acharya opines that India's attitude to trade and non-proliferation is " marked by a an exaggerated sense of its needs and priorities, a refusal to make concessions and a tendency to accept only those agreements that are highly favourable to India " and that we should show a " greater willingness to make concessions and compromises." That is not true. Every nation does the same, especially the US and Europe who gang up against developing countries in the WTO. The US wants India to stop subsidies on agriculture while it pays over $14 billion to its own farmers. The conference on climate change at Copenhagen ended in disaster because the US, which has the highest greenhouse gas emission per head of population, refused any reduction unless countries like India, with very low emission rate, made equal sacrifices. The US grants extensions on drugs, whose patents have expired, based on cosmetic changes by pharmaceutical companies and aggressively defends its position, even if the rest of the world relies on cheap generic medicines from India to treat poor patients. The far left party Syriza won general elections in Greece after 5 years of crushing austerity humiliated the nation. In this period the hypocrisy of the Germans has been breathtaking. Germany sells 58.2% of its exports within the EU because its goods are priced at the same rate everywhere. The Euro being a common currency other countries cannot take advantage of currency devaluation to make German goods more expensive. Even though it objected strenuously Germany has the most to gain from the Quantitative Easing just announced by the ECB. The fall in the value of the Euro will make German exports cheaper to countries outside the EU, Germany is getting paid for borrowing money and the Greeks see their savings losing value. Only the strong are respected, the weak have little hope.

Everyone should be equal. But how?

Following a report by Oxfam, which says that by 2016 the richest 1% of the world will have greater wealth than the combined wealth of rest of the 99%, inequality has become the main topic of discussion at the annual jamboree of the rich at the World Economic Forum at Davos in Switzerland. An article in The Economist explores the similarities between the ' robber barons ' in the early 20th century, who became fabulously wealthy by controlling transport and minerals, with the ' silicon sultans ' of today, who have also become similarly wealthy by controlling technology. These men became so wealthy by building huge monopolies. At one time John D Rockefeller controlled 80% of the world's oil supply while Google controls 90% of the search market in Europe and 67% of it in the US. When Rockefeller retired his wealth equaled one thirtieth of the entire GNP of the US while Bill Gates has managed to reach only 1/130th of it. So, these men were and are genuine oligarchs. Is it bad to become so rich and were these men selfish villains? The US is the richest and the most powerful country in the world because these men have made it so. Henry Ford did not invent the motor car, he produced them so cheap that every American could afford one. Cars used to cost $4,000, which was twice the average annual income, but the first car he produced cost $850 which came down to $360 in 1916 and just $290 in 1924. He did this by mass production along an ' assembly line ' so that every car was the same, illustrated by his famous quote when he said," Any customer can have a car painted any color that he wants, so long as it is black." Today, the poorest person carries a mobile phone, Skype allows you to talk to a person in the US for free while you can search for any topic on Google, also for free. Extreme inequality leads to resentment and may lead to violence. Thousands lost their heads during the French Revolution which coined the slogan liberte', egalite' and fraternite' which meant liberty, equality and fraternity. But can human beings be truly equal? After all, nothing is equal in nature. The elephant is huge while the ant is tiny, the cheetah runs at 70 miles an hour while the tortoise crawls along and the deer eats grass while the lion eats the deer. Communism was supposed to create an equal society by distributing wealth but created poverty instead. The Soviet Union collapsed, North Korea is on an edge while China is aggressively capitalist. Unemployment is rising in France and Europe, forcing the ECB to start quantitative easing to stimulate growth. But only those who can repay will be able to borrow cheap and multiply their assets. The unemployed cannot borrow. So inequality will grow.  At least the robber barons created jobs. Technology needs fewer workers. Will there be more revolutions? Who knows.

Parade and Taj Mahal maybe, but symbolism very important.

Obama is coming, and for the next 4 days the center of Delhi will be a no-go zone for the residents. All 430 rooms at the Sheraton have been booked for him. A no-fly zone has been declared over Raj Path, a 7 layer security zone has been set up and 71 high rise buildings will be completely taken over by the police. Every nook and cranny will be sanitised, said an anonymous but senior police officer. That will certainly be good for health. Hope all the paan stains will also be removed. His car, known affectionately as The Beast, has been airlifted over from the US of A. It weighs 20,000 lbs, which is 10 tons, has tyres that do not puncture and has grenade launchers in the trunk. Around 1,600 US security agents will be lurking with intent. No doubt they will be carrying an assortment of weapons on our streets. Hope there are no Raymond Davis types among them. Long term bosom friend, Pakistan has been warned not to stage any terror attack during the visit, which will make it difficult to portray the ISI as a club for jolly good fellows in dark shades. There are many firsts certainly. No President has visited India twice, the date of the State of the Union address had to be adjusted, no President has been part of the national day of another country and the visit is only to India, although a few stopovers on the way cannot be ruled out. Absolute security is a must. Our Prime Minister is a target for Islamic terrorists because he openly flouts his Hindu identity as opposed to all the pseudo-secular politicians who would happily wipe out Hindus to get ' minority ' votes. Obama is famous as the ' Drone Master ', having killed hundreds of terrorists and civilians in drone attacks in the North Waziristan region of Pakistan, in Yemen, in Somalia and now in Iraq. No one is expecting very much to come out of this visit but the symbolism will be enormous. " He's going to India basically for a parade and a visit to the Taj Mahal," said Julie Pace, a journalist, snarkily. Maybe. He is also firmly in the lame duck period of his presidency, but he still has 2 full years left. Our previous Prime Minister visited the US 11 times but achieved little. He was tied down by his meek acceptance of the supremacy of Ms Sonia Gandhi, to hang on to his chair for a full 10 years, his acceptance of the destructive socialist policies of the National Advisory Council and his inability to modify the Nuclear Liability Act, to make it acceptable to US companies. Modi is a lot more friendly to Israel, a staunch US ally. Upgrading relations with Japan, Vietnam, Israel, the US and possibly Philippines could make China and Pakistan pause before thinking of attacking India again. That will be the real gain.

If India is the cheapest, we should be the richest.

A map, just published, shows the most expensive and the cheapest places in the world to live in. Switzerland came out as the most expensive and could have got a whole lot more expensive earlier this month after the Swiss National Bank abandoned the currency peg against the Euro which saw the Franc soar by 30%. What is surprising is that Venezuela came in at number 3 after Norway at 2. It maybe because the government of Venezuela has no money to import essential goods and the currency is trading in the black market at 150 to the dollar, when the official rate is 6.8 to the dollar. The collapse in the price of oil has produced such a crisis that people selling their places in queues are earning more than doctors. But, perhaps the biggest surprise is that India has been found to be the cheapest country in the world. The survey looked at the costs of Groceries, including meat, bread, rice, eggs, fruits, vegetables and alcohol, Transportation, including one-way tickets, monthly passes, taxi fares,petrol price and the cost of running a Volkswagen Golf car, Meal prices at expensive, mid-range and inexpensive restaurants and Utilities, including electricity, heating, water and internet prices. To put it another way, if the cost of living is the lowest it means our money buys the most amount of goods and services in the world. So we should have the highest standard of living in the world? Unfortunately, in the quality of life index India is down at 51 position, below Panama, Mexico and Turkmenistan. It is possible that with the fall of the rupee against the dollar since last year India looks cheap to foreigners but for us, who earn in rupees, life is very tough because of soaring inflation in the last 5 years. And what we earn is a pittance compared to what others get. In the US, which is the 24th most expensive country in the world, the median monthly salary is $5,000 per month,or $60,000 per year, whereas in India the median income was a tiny $616 per year, coming in at 99 among 131 countries and the lowest among the BRICS countries. Despite such low income levels India has probably the highest taxes in the world which take goods and services beyond our purchasing power and why we come a lowly 135 in human development index. It is shameful when the US has to tell us to reduce taxes on generic medicines which have been off-patent for 100 years. The government sets targets for tax officers who then use gestapo tactics to extort money from individuals and businesses. No wonder more than 300,000 direct tax disputes, involving Rs 4.36 trillion, are held up in litigation. And for all the taxes we pay we get no services from the government. Cases of Swine Flu are mounting but we have no information as where the virus is coming from and how to avoid it. Cheap country with cheap life. 

Idiots excel amidst confusion.

Houthi rebels from the northwest of Yemen have captured the whole of its capital, Sana'a, including the presidential palace. Houthis, not to be confused with Hutus who are far away in Ruanda and Burundi, belong to the Zaydi branch of Shiite Islam which should not be confused with Yazidis who are partly Christian. Yemen is now effectively divided between Shia Houthis in the northwest and Sunni Al Qaeda in the Arabian Peninsula, also known as AQAP, in the southeast, who hate each other but are united in their hatred of the US. The attack on the French magazine, Charlie Hebdo in Paris, earlier this month, was claimed by AQAP commander, Nasr Ibn Ali Al-Ansi as revenge for French attacks against Al Qaeda in the Islamic Maghreb, AQIM. Apparently the attack was planned by Anwar al-Awlaki, a US citizen by birth, who was supposed to have inspired the Fort Hood shootings, before he was killed by a drone strike in 2011. A few days later another drone strike killed his 16 year old son while having dinner at a restaurant with a cousin. The third killer in Paris, Amedy Coulibaly, who shot a policewoman and then killed 4 people in a kosher supermarket, claimed to belong to ISIS, which is the Islamic State in Iraq and al-Sham, and not the Goddess Isis, who was a beautiful Egyptian lady who brought her brother, Osiris back to life and then married him. Also this month 2 Saudi guards were killed by a suicide attack in the north where Saudi Arabia shares a long border with Iraq. The Saudis have decided to build a 1000 km ' wall ' on the border with Iraq, consisting of 5 layers of fencing, watchtowers and ditches. Saudi Arabia follows Wahhabism which is a strict Sunni brand of Islam and finances terrorism all over the world but hates and fears Sunni terrorist groups such as the ISIS and Al Qaeda. These groups would love to capture Saudi Arabia, which would give them control over the 2 holy mosques at Makkah and Medina and control over all the Muslims in the world. But so would the Shias. The area of Iraq bordering Saudi Arabia is Shia and also shares a border with Shia Iran. Ironically, it is they who are preventing the ISIS from advancing towards Saudi, so as to protect their holy cities of Najaf and Karbala. According to the friends of the US in Pakistan, the ISI, Ronald Reagan invited Jalaluddin Haqqani to the White House. The Haqqani network was declared a terrorist organisation by Obama in 2012. George Bush named Iran in the " axis of evil " and then made it immensely stronger by removing Saddam. Obama was determined to remove Bashar al-Assad, of the Alawi branch of Shia, but is now helping him by bombing Sunnis. The middle east is a cauldron of confusion constantly stirred by stupid Americans. Idiots all.

Will deflation bring peace to the world?

Last week the Swiss National Bank discontinued the Swiss Franc's currency peg with the Euro without any warning. When the crisis in Greece became evident in 2009 the Euro became weak and fund managers started buying the Swiss Franc as a safe haven. This pushed up the value of the Franc and made exports too expensive so in 2011 the SNB determined to maintain the value of the Franc at 1.20 to the Euro by buying Euros from the market. So far they have spent $199 billion in suppressing the rate of the Franc. However, accumulating loads of Euros meant mounting losses as the Euro kept getting weaker. Meanwhile, the European Central Bank has almost finalised a plan of Quantitative Easing by buying European government bonds worth $635 billion in an effort to release more funds into banks to force them to lend more to businesses, which is what the Federal Reserve did in the US. Inflation in Europe is down to 0.2% and while we in India are cheering the fall in the price of oil the same fall is adding to the risk of deflation in Europe. Bond buying will release a flood of Euros and drive down its price even further making it too expensive for the Swiss to defend the currency peg. So they gave up. Those who have borrowed in Swiss Francs suffered big losses while Indians, who have black money in Swiss banks, will be celebrating. Will QE work? No one knows. Japan started its own QE in 2013 when the new Governor of the Bank of Japan promised to double money supply by buying government bonds worth $1.4 trillion. But instead of lending more to businesses banks just sit on their cash or invest in shares, which is one reason why stock markets all over the world are booming. Japan seems to be stuck in a liquidity trap. Last year China grew by 7.4% which is the slowest in 24 years. China may be forced to devalue the Yuan this year to and try to stimulate growth by making exports cheaper. So what of India? The IMF is predicting that India will grow faster than China in 2016. As China slows its demand for commodities will fall, resulting in a fall in commodity prices, which will help our Prime Minister's efforts to increase our manufacturing. The Reserve Bank reduced interest rate by 0.25% a few days back, which should increase consumer spending and encourage businesses to invest more. Foreign investors are buying Indian stocks and debt, bringing in large amounts of foreign exchange into India. Not much point in increasing manufacturing if our goods become too expensive because of a stronger rupee. So what will the RBI do? What if the US resorts to another bout of QE, bringing down the value of the dollar? Hyperinflation in Germany resulted in Hitler coming to power, what happens if the entire world falls into deflation? In a deflation people stop consuming as they wait for prices to fall even further so we may all turn into monks and there will be peace. We hope.

Rabbits can never be predators.

A study by Oxfam has suggested that the top 1% of the world's population owned 48% of all the wealth of the world in 2014 and by 2020 this will rise to 54%, which means that the combined wealth of 99% will be less than that. Of the remaining 52% of wealth, not owned by the rich in 2014, 46% was owned by 19% of the rest, leaving just 5.5% of wealth to be shared by 80% of the people in the world.  The combined wealth of the top 1% was $1.9 trillion last year, which is equal to the GDP of India, a country of 1.2 billion people. While a rich person delays a flight and throws out the chief steward from the plane because of daring to serve macadamia nuts in a bag instead of on a plate, discount stores have to hold sales to entice the poor to spend their money. But is it wrong for rich people to be rich? A study has suggested that really wealthy people are ' scary smart ' and are more likely to have attended elite colleges, such as Harvard. Liberals argue that only the children of the rich are able to afford expensive private schools which gives them an advantage when it comes to finding places at elite institutions. Those who go to elite colleges build up an ' old boys network ' of friends which helps them become richer, so it is not what you know but who you know that maybe more important. Prof Thomas Piketty wrote a book in which he suggested that much of the wealth of the rich is inherited, is due to controlling assets, such as real estate, is generated from non-productive financial manipulations and by getting politicians to pass laws favorable to them. Critics snarl that Piketty's book is nothing but ' legal plunder ' where money is looted from those who have worked hard and doled out to lazy scroungers. But there maybe something in what Piketty suggests because one of the first orders of business in the new Republican-controlled House, in the US, has been to try and dilute the Dodd-Frank Act, which was passed in 2010 to control renegade bankers. Prof Nouriel Roubini wrote that technology, such as robots, will replace humans not only in manufacturing but also in services, such as education and healthcare, which will leave vast numbers of people redundant. His solution is a continuous system of education and re-skilling so that workers are abreast of advances in technology. Prof Dani Rodrik writes that Europe responded to the first industrial revolution by creating a welfare state providing a safety net for those who were left behind by new inventions. His solution is that governments should create venture funds which will invest in new research and thus create new wealth with which to help the poor. But the Pope has said what these gentlemen dare not when he said that you do not have to breed like ' rabbits ' to be good Catholics. Reduce supply to increase your value. Sound economics.

Democracy comes from ideas.

Counting the present incumbent India has had 15 Prime Ministers since independence in 1947, out of which 7 have been from the Congress and 8 from other parties. Of the 67 years since independence the 7 Prime Ministers of the Congress ruled India for a combined total of about 55 years while the other 8 were in power for a combined total of just 12 years, of which Mr AV Vajpayee of the BJP was Prime Minister for 6 years, from 1998 to 2004. So the 6, who were neither from the Congress or the BJP, held office for a total of 6 years. Only Mr Vajpayee and Mr Modi have never been associated with the Congress while all the others started life in the Congress Party but left it for personal ambition. Of the 7 Congress Prime Ministers, Mr Narasimha Rao was in office for a full 5 years, Mr Lal Bahadur Shastri held the post for 2 years, until his mysterious death in Tashkent in 1966, and Mr Gulzari Lal Nanda was twice Prime Minister for a shameful total of just 26 days. All these numbers indicate that the Nehru-Gandhi family has ruled India for 48 years. You may argue that Mr Manmohan Singh was the Prime Minister for the last 10 years from 2004 to 2014 but he kept his seat at the pleasure of Ms Sonia Gandhi who ruled the country as an extra-constitutional authority, with full power but no accountability, with the advice of a bunch of communists in the National Advisory Council. So ineffective was Mr Singh, who boasts a DPhil in Economics from Oxford no less, that he left the country bankrupt, with eye-watering fiscal and current account deficits and a sizzling double digit inflation. Our credit rating was reduced to BBB-, which is one notch above junk status. In the north Chinese soldiers crossed into India at will, Pakistan in the west sent in terrorists and Mr Singh was in Sharm al-Sheikh 6 months later to beg for peace, to the south Sri Lanka arrested Indian fishermen from international waters and invited Chinese submarines to dock in its port and troops from Myanmar in the east crossed our border to harass local citizens. Yet there are journalists who hate Mr Modi and want the Gandhis to come back power. One of these poison pens writes," The fact is that the very issues on which the Congress lost the election are still there. They are the fanciful notion that one man has arrived and saved a nation of 1.2 billion. That honesty and integrity are in the possession of only a single politician. That India has successfully used force to impose its will on Pakistan at the border," and so on. Yes, one man has always made the difference. Through ideas, eg Karl Marx, Buddha and Louis Pasteur. Sarcasm does not need facts. But the writer is right to compare the Gandhis to the Mughals. Both came from abroad to rule us with the help of traitors. Like the writer.

Bicycles and goats work, but laptops are dicey.

In response to a request by the Electoral Commission of India the Ministry of Home Affairs has prepared a note for the cabinet suggesting that bribing voters during elections will be made a cognizable offence. Currently bribing voters is a non-cognizable offence under sections 171B/171E, which attracts a prison term of one year and/or a fine. But if it is made cognizable then the police will be allowed to start an investigation or make an arrest without a warrant. Very pious indeed, but what constitutes bribery of voters? The ministry wants to outlaw distribution of bundles of cash, or alcohol to men and saris to women, a few days before an election in an effort to buy their votes. But this is a very narrow definition. Mr Nitish Kumar promised bicycles to all girl students in Bihar which increased female attendance in schools and made him very popular. Trouble is that elections come round every 5 years and, having raised people's expectations, you have to go one better. So Mr Kumar is now thinking of promising tablets and laptops, as his buddy Mr Akilesh Yadav did in UP. Problem with that is that Mr Yadav's father, Mulayam Singh now blames the laptop scheme for the thrashing received by his party in the parliamentary elections last May at the hands of the BJP who took 71 out of 80 seats in UP. These laptops, ironically called ' Mulayam wala laptop ' in UP, are being sold online for Rs 14,000. The original cost was Rs 19,000. Ms Jayalalithaa was even more generous. She promised mixies, grinders, fans, milch cows, goats, solar powered greenhouses and marriage assistance for women, which included Rs 25,000 in cash, 4 gram gold coin and household items. She won an absolute majority in assembly elections and then promised the same for the Lok Sabha elections in May last year. Here her party won 37 seats. But nothing comes for free. The Tamil Nadu government has run up a debt of over Rs 800 billion which will rise to over Rs 1 trillion by 2016, when the next assembly elections are due. To increase its revenues the government sells alcohol, including local hooch in plastic pouches, through the Tamil Nadu State Marketing Corporation or TASMAC. However, all this is loose change compared to the massive bribery by the Congress in 2008 to increase the number of its MPs from 145 in 2004 to 206 in 2009. The NREGA scheme, the waiver of loans to farmers and the Sixth Pay Commission cost trillions of rupees, caused double digit inflation and resulted in a soaring fiscal deficit. The Congress crashed from 206 to a meager 44 seats in last May's elections. Poor fellows. People are so fickle.

Do we hear our children weeping?

Take it from the top. Only 10% of the 3,54,421 graduates from 3,364 management schools in India last year are employable. Why so? A lot of the institutions are rubbish, run by politicians or shady business fellows, charging vast fees from students, desperate to increase their value in the extremely competitive job market. Why are our students so desperate that they and their families are willing to spend so much for dubious degrees? Because only 37% of our college graduates are employable, of whom 38% are women and 34% are men. Again reputations of different colleges vary widely and those with unwanted degrees from low grade institutions look for ways to stand out from the crowd. Social prejudices play a strong role. Every parent wants to boast that her son is a manager. It is not just that managers are paid a higher salary but the enhanced status helps in getting a pretty bride for the son, because no mother would want to give her daughter in marriage to an artisan, even if he is earning much more than someone with a desk job. Those who have rich parents can buy their way into good private colleges by paying cash under the table, called capitation fees, but those who cannot afford the millions of rupees required resort to cheating or bribery to get a piece of paper which may help them earn a living. But why do these children end up in third rate colleges? Because most of our schools, especially government ones, teach nothing. Teachers are not competent to teach even classes 1-5. According to the Annual Status of Education Report shows how badly our children are being betrayed. Only 23.2% of class 8 students know how to subtract, 74.6% can read class 2 text and 68.2% can make sense of a sentence in English. Under the Right to Education Act the Congress stopped all exams in schools, apparently to reduce stress on children. With no way of judging whether children are being taught anything at all teacher attendance in primary school, classes 1-8, has dropped from 86.4% in 2010 to 85.8% in 2014. Although salaries of teachers in government schools are higher even poor people prefer sending their children to private schools. Apparently. it will need Rs 2.32 trillion, on top of the vast sums already being spent, to bring government schools up to par with private ones. Spending on public schools is higher in every state, varying from 8.1 times that on private schools in Goa to 0.9 times higher in Bihar. And yet private schools far outperform in results. The only solution is to pay private school boards to run public schools but there will be tremendous resistance, even violence, from the teachers who know they are useless but want to protect their earnings. So our children have no future to look forward to. Do we hear our children weeping?

Three cheers for the RBI? Depends on who you are.

Yesterday the Reserve Bank suddenly cut the repo rate by 25 basis points to 7.75% from 8%, well before its monetary policy review meeting on 3 February, causing the Sensex to zoom up by over 700 points. " It will lead to more money in the hands of the consumer and greater spending. It is a positive for the Indian economy. It will certainly help in reviving the investment cycle the government seeks to restore," said our Finance Minister. Really? Half of our top companies are nose deep in debt and will need around Rs 7 trillion to survive. According to a report by the Bank of International Settlements, till the end of June 2014, Indian banks and non-banks had borrowed $204 billion from abroad. The rupee fell on news of the rate cut and since most of the foreign debt is in dollars a significant fall in the value of the rupee could see many firms going bust. It does not mean more money in the hands of the consumer because interest paid by banks on term deposits will also fall and since that is a significant portion of our savings it will result in a fall in income, especially for pensioners. Also 25 basis points is too little for people to rush out to take loans to buy cars and other luxury goods. Debt of Indian households has grown 7 fold in cities and 4 fold in rural areas in the 10 years from 2002 to 2012. About 22% of households in cities and 31% of rural households are indebted. Besides low interest rates help only those who have the means to repay loans, which means those with high incomes, but are of no use to the middle class and the poor. Still the cut in the repo rate is good news because it shows that the RBI is now comfortable with the decline in inflation and does not see rising prices in the near future. If oil and other commodity prices remain subdued for the rest of the year the RBI could cut rates further, in steps. Industry fellows want a reduction of at least 200 basis points which will really make a difference. It will allow them to decrease their borrowing costs by paying off old loans with new ones and will allow banks to cut down their non-performing assets. Banks hold $48 billion in Non-Performing Assets and $52 billion in restructured loans so if banks can clean up their books they will be able to start lending again, especially for infrastructure projects which have a very long gestation period. However, the really resounding cheer is for the real estate sector which is beginning to stagnate. As prices rose so state governments increased taxes on properties which added to the cost. Besides since the white money portion of the cost of any property has increased hugely it is difficult for people to account for that money. With sales falling real estate companies are finding it difficult to borrow so they are cheering to the rafters. If prices collapse all the black money will be wiped out. We do not want that do we?

Confusion of central banks amusing. Good for India?

Last year one man, Steven Major in the US, was convinced that yields on 10 year US Treasuries will drop to 2.1%. Since yield is inversely related to the price he was betting that prices of bonds will go up. So, when others were selling he was buying. Bond prices tend to drop when interest rates go up so that yields are in line with the interest at which the Fed is raising money. So, what Mr Major was betting on was that the Fed will not be raising interest rates any time soon and says that yields could drop to 1.5%. One or two people even think that the Federal Reserve may have to restart bond buying, also called Quantitative Easing, in late 2015 as the weak global economy impacts the US and the strong dollar cuts exports. Major says that the weakness in the global economy is similar to that after World War II and it will take a long time to start growing again which means that inflation will stay low, thus obviating the need to raise interest rates. Public debt globally reached 108% of GDP in 2012 and will be around 106% this year. The global bond market has soared 40% to $100 trillion as governments have borrowed to support banks and the fall in tax receipts, because of the slowdown, means that governments are sitting on big debts and a higher interest rate will increase the amounts of interest the governments will have to pay. In Britain inflation rate has fallen to 0.5%, raising the fear of deflation, wherein prices keep falling as people postpone big purchases hoping for prices to fall still further. Sterling has fallen to its lowest level in 18 months against the dollar. In the Eurozone inflation rate is even lower at 0.3% and the European Central Bank wants to buy back bonds worth $593 billion to encourage some inflation. But Germany is against any quantitative easing because they think that buying Greek sovereign bonds means rewarding irresponsible spending and will encourage bad behavior in the future. The German Constitutional Court has referred the matter to the European Court of Justice in Luxembourg to decide whether the constitution of the ECB allows it to buy bonds. Japan has revealed a record budget to beat recession. After suffering a decade of deflation the government is determined to raise inflation rate so that wages start rising and people start spending again. Government debt of Japan is at a record 227% of GDP and the government wants to raise tax revenues to cut its debt. But when it raised the sales tax to 8% from 5% in April of last year public spending fell and the country went back into recession. China is trying to maintain its high growth rate by infrastructure spending and increasing bank lending. It may be forced to devalue the Yuan to stimulate growth. All central banks in a state of confusion. Amusing.

Democrats not friendly to our democracy.

Bad news for the residents of Delhi. The government is going into ' overdrive ' to ensure the security of Barack Obama during his visit for the Republic Day celebrations. At least 10,000 paramilitary troops will reinforce 80,000 Delhi Police, which means the entire force, to guard just one person. The center of Delhi will be cordoned off for days as the fellows practice how not to fall over as they keep barging into each other. There will be massive traffic jams as the center and north of Delhi are cut off from the south, causing people to miss their trains, to be late for work, unless they start at dawn, and patients to die because they could not reach hospital in time, as has happened many times before. However, since we have invited Obama then the onus is on us to ensure his safety, regardless of the cost or inconvenience. The point is whether such a march-past is justified, or even decent, in a democracy. March pasts are reminiscent of Nazi Germany and Russia during the Soviet Union, when photographs were keenly analysed to see who was still in favor and who had been purged. Today North Korea still holds such parades as does China. When we keep shouting from the rooftops that we are the largest democracy in the world does it behove us to be seen in such company? And why on Rajpath, in the center of Delhi? We know that Delhi is the capital of India and that the Rajpath leads from India Gate to the Rashtrapati Bhavan, where the President resides, but it was built by the British for the then Governor and is thus a reminder of the centuries we spent as slaves to the British, and the Moguls before them. Should our politicians be celebrating a republic by disrupting the lives of 25 million people, crammed into this city, by showing that they are our new masters and that we are still not really free? Apparently, US Secret Service personnel will take control of nearby high rise buildings, such as North and South Blocks, Rail Bhavan, Vayu Bhavan, Shastri Bhavan, Krishi Bhavan, Udyog Bhavan and Jawahar Bhavan, all of which house ministries of the central government, and Indians will not be allowed in there. Which means that our sovereignty will be handed over to the Americans for a couple of days. Wonderful. And what do we stand to gain from such servile generosity? What gifts does this Obama come bearing for us? His last 6 years in office have not been exactly friendly. His administration has constantly griped about our patent laws and tried to restrict our IT companies while supplying sophisticated weapons to Pakistan, with which to kill Indians. Bill Clinton imposed sanctions on India while turning a blind eye to Pakistan's nuclear program. Bush got rid of them and signed the nuclear treaty with us. Republicans have been better for us than Democrats. Is it likely to change? We shall see.

Find what attracts Americans.

The Prime Minister is working hard to expand India's manufacturing sector many times over. The US being the largest economy in the world, sucking in around $240 billion worth of imports every month, it makes sense to lay it on as thick as possible when Barack Obama visits Delhi for the Republic Day functions on 26 January. Thanks to the scorched earth policies of the Congress, with shortages of coal, power, and roads, our infrastructure is unable to cope with the present low base of manufacturing and there is no money for the massive investment required. The Private Public Partnership model was defective from the start when companies paid a premium to be awarded projects with very low bids, knowing that the government would bail them out in the end. Sadly, the economy tanked, deficits went out of control, leading to a severe contraction in government expenditure, and the outcry against corruption meant that the usual fun and games had to stop. Companies are deep in the red and banks are unwilling to lend to borrowers who have defaulted on their payments. So the onus is on the government. But there is no money. Much of the growth in the much vaunted years of high growth during the Congress decade was because of high inflation but now that the rate of growth has fallen revenue collections have fallen with it. Even while the fiscal deficits of the center and states was between 6 and 10% during the Congress years the ratio of debt to GDP was falling. The ratio fell from 90% in 2003-04 to 68.5% in 2013-14. How could public debt be declining when the government was borrowing heavily to finance its deficits. The Congress wrought this magic by generating inflation above 10% which brought down the cost of its debt. Inflation, especially of food, hurts the poor, which the present government cannot afford. The Consumer Price Index rose to 5% in December, compared to 4.38% in November, but is still lower than before. The government has already spent 99% of fiscal deficit for the entire year in just 8 months so it will have to reduce its borrowing to keep fiscal deficit within its target of 4.1%, while continuing to fund the social schemes started by the Congress and finding the trillions needed for building infrastructure. Talk about a Gordian knot. The government has to raise tax collections by increasing taxes on petrol and diesel, as their high prices are already factored in, sell stakes in public sector companies, sell off loss making units, such as Air India, reduce non-essential spending and increase spending on infrastructure, which will generate jobs and encourage business. Americans are good at innovations. If only we can make it attractive for them.

Are the poor happier than the rich?

An article by Arun Maira, former member of the Planning Commission asks a very pertinent question: What we really want? He says that concentrating solely on accelerating the growth of the GDP of India would be a mistake. For instance, India has 10 cars per 1000 people while Korea has 300 and the US has 600. What would happen if the number of cars in India were to increase 30 times to reach the level of Korea? More cars would cause more accidents and more pollution, leading to higher medical costs, higher clean-up costs and higher litigation costs, all of which would lead to a higher GDP, because GDP is a measure of gross economic activity, without distinguishing between good and bad. There are many things that cannot be measured by monetary means and yet increase a nation's well-being, such as dignity, trust in one's neighbors and a sense of fairness. Bhutan has pioneered an index of Gross National Happiness which elevates satisfaction felt by citizens above that of material wealth. India ranks a lowly 111 on this index, below Pakistan and Bangladesh. But could it be that people in India are unhappy because they do not possess cars or are unable to fly because they cannot afford to? It is instructive that the top 10 countries on the list are all rich western countries, Australia coming in at number 10 with its vast mineral wealth. Mr Maira cites the example of the French who work fewer hours and take longer vacations and asks would the world be a better place if the productivity of the French increased to the level of the Americans? The unemployment level in France is 10.4%, while it is 25.4% for those under the age of 25 years. In the US the rate is 5.6%. Trouble is that you need people to work to pay taxes which can finance welfare payments. The higher the productivity the more the taxes that accrue. Socialist policies breed a sense of entitlement in those who have jobs, who restrict competition, to hang on to their perks. The French would rather close down a factory than lose their privileges. In the long run it destroys the economy, reduces employment and reduces the power of the trade unions by decreasing the number of members. Which is what happened in Bengal. If everyone would be happy with a minimalist existence then the hippie culture would not die down. A comparison of the weekly food shopping in countries across the world shows that happiness cannot buy food, money does. A family in Germany spends 320 pounds sterling on food every week, in Luxembourg it is 298 pounds, in India it is 25 pounds while in Bhutan it is a meager 3 pounds 20 pence per week. The quantity of food depends on Purchasing Power Parity but even so the comparison is glaring. Surely, it is better to be a well-fed rich than a happy poor.

Utopia or pressure cooker. We wait to see.

The world is a much safer place since the end of World War II. And there are figures to prove it. More people are living in democratic nations, which means that the majority of dictators have been eliminated. President Mahinda Rajapaksa of Sri Lanka has just been thrown out of office. Brutality won the war against the Tamil Tigers but, as with any dictator, he did not know how to win the peace. He apparently asked the army to use force to overturn the election result to keep him in power. The army refused. Corruption, appointing his brothers to key ministries and sending General Sarath Fonseca to prison on trumped up charges, which would have been insulting to the army, resulted in his defeat. Globally, death from wars and homicide are markedly down, absolute poverty has been reduced, nutrition of populations across the world has improved and even rates of malaria are coming down. Although people continue to die of HIV/AIDS, numbers of new cases are falling slowly. The levels of education are rising everywhere. In India even illiterate people have become aware of the value of education, with even daily wage earners striving to send their children to good schools. Whether the availability of cheap televisions, bringing pictures of the world to our living rooms, and mobile phones have spread this awareness we do not know. If so, it would mean that entertainment is a valuable educating tool. Rapid increase in technology is improving the quality of life. The advances in fracking have brought down oil price, helping to reduce the cost of transport of goods and making travel cheaper. So, is it a chance to rejoice? Is Utopia finally here or is it the " End of History " as Francis Fukuyama predicted in 1992, who thought that with the collapse of the Soviet Union there will be no more wars in a unipolar world under the dominance of a benign US? The attacks in Paris in the last few days have shown that it is not so. In the 1970s and 80s you would never see any woman covered in a burqa in the UK or in Europe. Today it is a common sight. Will there be a Clash of Civilisations after all? The steep fall in the price of oil, while good news for India, is devastating for the economies of Russia, Nigeria and Venezuela. Europe is looking at the possibility of deflation and if Russia were to default on its debt European banks will take a massive hit. If Venezuela or Russia do default on their international obligations there will be a stampede out of emerging markets, and their currencies, which will be very bad for India. Incidence of suicides are the highest in low income countries. So is the world becoming a happier place to live in or is it a pressure cooker waiting to explode? Time will tell.

Just tax it like smoking.

Even before funerals have been held for the victims of the killings in Paris the excuses have started pouring out. These are just a handful of criminals, the rest of them are wonderful chaps really. And, this has nothing to do with what is written, it is a " perverted interpretation " of the text. Apparently, ' blasphemy ' does not exist but has been invented by vested interests to further their own agenda. If only a few perverted criminals have invented the crime of blasphemy as an excuse for killing then why has a blogger been sentenced to 10 years in prison and 1000 lashes in Saudi Arabia. According to Pakistan's constitution blasphemy is punishable by death. So what happened in Paris is not an aberration, a crime carried out by a few misguided individuals, but state policy of the faithful. Congress MP, Mani Shankar Aiyar justified the killings as a reaction to attacks on their communities, drawing enormous criticism from the chatterati. But he is not totally wrong. These attacks are happening because western idiots removed Saddam Hussein and Gaddafi, thus letting the proverbial genie out of the bottle. China reacts very differently to such attacks. But if we say anything it will be branded as stereotyping, racial profiling or hate speech and we might end up in prison. Why are our politicians so careful and polite in dealing with terrorism when innocent citizens are being killed regularly? Because they gain from it. Enormously. It gives them the reason for Z+ security, official cars and luxury bungalows in the secure zone of Lutyens Delhi. It also gives them the excuse for greater surveillance of ordinary citizens with biometric identity cards, CCTV cameras everywhere and curtailing our right to free speech. Not just in India but also in the citadel of free speech, the US, which sees nothing wrong in a film which shows Kim Jong Un's face being blown off. Thus, a low level of terrorism allows ' democratic politicians ' to add to their powers enormously while keeping the great unwashed under control. It also allows for an increase in the defence budget which increases profits of those industries and contribution to campaign finance. As long as those fellows do not get out of hand and start blowing up planes because that results in massive insurance payments and losses for the companies. It is like smoking. There is now no doubt that smoking kills. It affects virtually every organ in the body. Even passive or secondary smoke is dangerous for human health. Smokers are treated as pariahs. You cannot smoke in public places, cigarettes cannot be kept in plain view and taxes are astronomical. But surely if something is that harmful it should be banned? Not a single country has banned it. Why? Taxes bring big money. Start taxing terrorists heavily. That will make them think.