Indians are really very honest about paying income tax.

Socialists in India always moan about how few people pay income tax. The implication is that there are masses of people hiding their income so as to avoid paying tax. Which is partly true. All income from farming is exempt from tax and there are millions of people, such as plumbers, masons and electricians, who earn more than the tax threshold of Rs 250,000 per year, but do not pay tax because they are paid in cash. Village life is uncertain as it is dependent on weather, so every year millions migrate to cities. About 4 million Indians have migrated abroad while around 315 million have migrated inside the country. While they earn more in cities the cost of living, including rent, is very high. So, why do they come? Because they can earn throughout the year, quality of life is much better and they can avail of better healthcare and education. In the US life in cities has been found to be safer, healthier and wealthier. But the real truth is that most Indians do not earn enough to pay direct taxes. When the poverty line is pegged at an earning level of Rs 32 per day in villages and Rs 47 per day in cities then it is easy to see why the majority of people are classed as above poverty line, but they still do not earn enough to pay taxes. As these pictures show there is poverty in the US as well but see the number of cars in the background. If 47% of Americans are too poor to pay federal income tax then surely twice the number of Indians do not earn enough to pay taxes. At least we have a threshold of Rs 250,000 a year, there is no threshold in the US and tax rates start from 0 earnings. So how is it possible for so many people to pay no tax? Because the government provides social security for everyone. It is in the interest of people to file tax returns honestly, which is used by the government to provide assistance to those in need. In India, 51 million people file tax returns, out of a population of 1,250 million, and only 13 million actually pay income tax. Despite the phenomenal rise in the number of services being taxed, the rise in the rates of taxes and services contributing 52% to the GDP, direct taxes paid by such a small number of people contribute 51% of total tax collection. Is it any wonder that people feel aggrieved at paying so much to the government, for which they get nothing in return. No income support, no education support, no healthcare and no pension. It maybe that high levels of service tax are encouraging more services to demand payment in cash. Which may account for the sudden rise in the amount of cash in circulation. Indian firms are looking at transferring to Ireland where corporate tax rates are very low. Seems that Indians are really very honest about paying income tax. Congratulations to them.

Speak in a hushed voice if you want to stay hidden.

Cockroaches love the dark, as do thieves. Surely our political masters are honorable people who welcome the sunlight of complete transparency? Apparently not. Yesterday, in the Rajya Sabha, the dumping ground of discarded politicians, extreme indignation was expressed against the Right to Information Act by members of all parties. Normally there is complete unanimity when they award themselves eye watering perks, which would make US Senators drool. " Anyone can pay Rs 10, some 'paanwadi' (betel leaf seller) or 'chaiwala' (tea vendor) can also ask who made a missile or anything about international affairs," said Mr Praful Patel, of the Nationalist Congress Party which was a partner in the last government which passed the act. Mr Patel has probably been nursing a resentment for a long time. It was under this act that an activist exposed the fact that Air India was ordered to fly a larger plane to Maldives so that his daughter could fly business class with her in laws. More than 50 seats went vacant on each leg of the journey. He was responsible for the merger of Air India with Indian Airlines which was a spectacular failure requiring Rs 300 billion to keep it afloat, and it is not going to make any profit this financial year, as the government had expected. The loss this year is over Rs 26 billion. The deal with a consortium, known as DIAL, to improve Delhi Airport has been criticised by the Comptroller and Auditor General for a loss of Rs 1.67 trillion to the government. That was when Mr Patel was Minister for Civil Aviation. Is it any wonder Mr Patel would love to remain in the shadows? In which case he should have spoken in measured terms. The arrogance in his speech is breathtaking. Those who sell paan and chai are Indian citizens who have every right to know how they are being shafted by their politicians. Is he saying that poor people are incapable of making informed decisions? In which case they should not be allowed ot vote. Is that what he is saying? Maybe he is because he was ignominiously booted out by the same paanwadis and chaiwalas in the last elections in 2014. That he is still leading a life of luxury on taxpayer money is a disgrace. His party was in power in Maharashtra when the massive irrigation scam took place. Rs 350 billion is said to have been pocketed. A contractor has revealed how 22% of the cost of any dam has to be paid in bribes. A drought is an act of nature and Maharashtra has suffered 2 years of severe drought. If the irrigation money had not been stolen maybe so many farmers would not have to commit suicide. We, the people, need more rights to information and withholding such information must be made punishable by heavy fines and prison terms. Squash the cockroaches.

The world is at the edge. Can we pull back?

A survey has found that a majority people in poor countries consider themselves to be 'global citizens' while most people in richer countries do not. Which is not surprising. After all, wouldn't 73% from Nigeria, 70% from Peru and 67% from India love to settle in the west with 24 hour electricity and water supplies, clean surroundings, unbroken roads, and strictly applied laws, where politicians cannot get away with plunder of the exchequer? And it is not surprising either that they do not want us. When people read of a couple with 9 children asking for free IVF treatment for having more babies they must be getting disgusted. What is surprising is that, with its economy in recession, with no prospect of improvement in the near future, a large majority of Russians do not see themselves as 'global citizens', which means they are proud to be Russian. Exactly opposite, 71% of Chinese consider themselves as global. Well-to-do Chinese women are travelling to the US to give birth so that their babies will get automatic US citizenship and will be able to sponsor their parents to the US when they grow up. We do not know whether the government is covertly encouraging these women. The sole purpose of Unit 61398 of the Peoples Liberation Army is to hack into US companies to steal industrial secrets and US citizens of Chinese origin regularly spy for the mainland. Germans are dubious about accepting more Syrian refugees and also about inter-racial marriage. So is Europe lurching to the far right? Right-wing parties are gaining strength right across Europe, 29% in Switzerland, 18% in Finland, 13% in Sweden, 21% in Austria and 14% in France. These numbers may seem small but could change fast. The Cosa Nostra has declared war on migrants in Sicily with the Mayor of Palermo saying," Palermo is a Middle Eastern town in Europe." Curiously, although the French people seem to be more tolerant of immigrants the government is very anti-Semitic. After the Charlie Hebdo attack an Israeli company offered a software capable of detecting terrorists from the mass of data received by intelligence agencies but the French government refused. The technology may have prevented the Paris attacks in November last year. In a brazen criminal act, reminiscent of the 'extraordinary renditions' by the US, following 9/11 attacks, China has abducted 45 Taiwanese citizens, accused of a telecom scam, from Kenya. Doubts are being raised about the shooting down of MH17, following which sanctions were imposed on Russia which crippled its economy. Russia is entitled to feel aggrieved. The Kurdish PKK has warned Turkey to expect a long fight for freedom. Who will the US support? NATO member Turkey, or the Kurds, the only forces fighting ISIS on the ground? Whether there will be an economic apocalypse remains to be seen, but the signs are ominous. We are at the edge. Will we tip over?

Why no wealth effect despite very high asset prices?

What creates a wealth effect? " The rule of thumb has been that for every $1 increase in household's equity wealth, spending increased 2 cents to 4 cents. For residential real estate, the increase is even greater: consumer spending increases 9 cents to 15 cents," says an article in Bloomberg. If that is so wealth effect in India should be huge because both stock and real estate prices have soared in recent years. Yet, the Governor of the Reserve Bank, Raghuram Rajan has cautioned against euphoria. According to World Bank figures he is right. Comparing China, Vietnam, Indonesia and Bangladesh with India, we are the lowest in cell phone subscriptions, last in cereal yield and lowest in fertilizer consumption, but the highest in cost to export. Port charges are very high, turnaround times at ports are very long and it costs a fortune to transport goods across the country because of delays at toll plazas and high toll charges. The IMF forecasts are also cautious. Growth will remain the same for the next 2 years, volume of exports will remain low and inflation will be stubborn at above 5%. The interesting bit of information is that gross national savings will fall to around 30%. It was above 35% in 2007. The Federal Reserve Bank of Dallas states that "higher incomes and household wealth boost spending. Higher, real (inflation adjusted) interest rates - reduce current spending". There must be great wealth effect in India because savings are dropping, which means that people are spending more. This would seem to be borne out by the high inflation rate. Less than 1.5% of Indians invest in stocks, compared to 10% in China and 18% in the US. Just 2% of household savings in India are in stocks, compared of a long term average of 45% in the US. The real estate sector has been stagnant for 2 years. Recently Mr Rajan advised real estate developers to reduce prices to attract buyers. But developers are unwilling to reduce prices despite sitting on large unsold inventory. Why so? " We need action on real side (as) also on transparency on land acquisition, on transparency on construction and on sales," said Mr Rajan. What he means is that they should eliminate black money on buying land and cheating investors by delaying handover of properties or taking money for not building any property at all. The RBI has lowered interest rate from 8% to 6.5% but that has not increased corporate borrowing. Instead personal loans and credit card use are going up, causing tension. Yet there are only 21.1 million credit cards in India in a population of 1,300 million. Credit card use is white money, so why the anxiety? Because they want the black money to come out from the shadows. Life is not easy, is it?

Working faithfully is not enough, seize the narrative.

Ideas are important in a democracy but telling a good story is more important, writes a professor. He gives the examples of Ronald Reagan, who promised to bring down taxes and to lower inflation by raising rates, of Bill Clinton, who coined the slogan," It's the economy, stupid " and of Barack Obama, who brought hope to African Americans that anyone could aspire to the highest office in the land. In 2012 a video of Republican candidate, Mitt Romney, saying that 47% of people pay no federal income tax was leaked to the media which was quickly seized on by the Democrats to portray him as a wealthy man out of touch with the electorate. Obama easily won re-election. Romney was right. 47% of people earn too little to pay tax. Today Donald Trump has won primaries in 5 states with near 60% of votes. He was able to see that Americans are unhappy with the economy, and worried about their future, and promise a prosperous future by bringing jobs back to the US. Mr Modi was elected Prime Minister in 2014 because of his promise of reducing corruption and increasing jobs but he is allowing the opposition to define the narrative at present. This is causing a lot of frustration for supporters of Modi. No one can understand why he has not worked vigorously to expose the crimes committed by the Congress and its allies during their 10 years in power. Thus Mr Rahul Gandhi, a man who has never worked in his life is able to brand the government as 'suit, boot ki sarkar'. He promised voters that he will deliver," Shirt ki sarkar, chappal ki sarkar, kurt-pajama ki sarkar." Of course, he will. And it will be a great improvement. For the last 68 years, of which the Congress has been in power for 55 years, it has delivered a langoti ki sarkar, so anything more will be welcomed joyfully. By passing the Land Acquisition Act the Congress has made it impossible for farmers to sell their land, so that they remain locked in a cycle of poor monsoon, failed harvest and borrowing from local moneylenders, which leads to either suicide or generations of bonded labor. " In the fever swamps of the far right, many people believe that the Nehru-Gandhis deliberately kept India backward in order to nurture a poor and ignorant vote bank," supporters hoot in derision. Are they wrong? Despite seeing the Soviet Union disintegrate and socialism failing miserably in Brazil and Venezuela, which has introduced a 2 day week, why do they still continue with their toxic policies? The Congress will not allow any bill to be passed by disrupting the Rajya Sabha. Mr Chidambaram is still defending his role in altering an affidavit on Ishrat Jahan, a terrorist. He sees nothing wrong in being guilty of treason. If he wants to improve India Mr Modi has to seize the narrative. Expose the crooks, the rogues and the traitors. 

When sugar is bitter, why blame cricket?

The Bombay High Court ruled that all IPL cricket matches, scheduled to be played after 30 April, must be moved out of Maharashtra even though BCCI, Board of Control for Cricket in India, promised to use only treated sewage to water the grounds. India is cursed with an abundance of activists who file Public Interest Litigation at the slightest pretext and judges are happy to pronounce judgement on matters outside their jurisdiction, while other cases with genuine grievances are kept hanging for decades. In response to another PIL, the Supreme Court is deciding on whether to publish the names of people who have defaulted on bank loans, against the objections of the RBI. The RBI is a regulator of banks and is independent of the government. Its board consists of economists entrusted with looking after the wealth of the nation so interfering with its decisions can have serious consequences. The decision to move IPL matches seems short sighted at best. The court has not banned washing of cars or watering of lawns, including their own. The biggest irony is that sugarcane, a very water intensive crop, is grown in the driest areas of Maharashtra. "....it needs just over 2000 liters of water to produce 1 kg of sugar, which means 2 million liters to produce 1 tonne. The estimated water usage of all the 20 IPL matches in Maharashtra is 6 million liters. That's three tonnes of sugar. Maharashtra produces in excess of 10 million tonnes of sugar per year," says an article. If the court really wants to remedy the sugar scarcity it would take up the irrigation scam of the previous government, in which an estimated Rs 350 billion were stolen, and punish the guilty expeditiously. Is it a big deal? Indeed. One of the driest places in India, Jaisalmer in Rajasthan, has grown Rs 3 billion worth of crops this year, thanks to an irrigation canal. The IPL is also serious business. It allows younger players, who are not picked to play for India, to show their quality, allows young players to earn a lot of money, provides an incentive to players to be fit and definitely improves standard of play. Politicians and civil servants have been against it from the beginning probably because the teams are owned privately and they are unable to cream the tournament for private gain. Faced with constant assaults the BCCI is thinking of moving the IPL abroad which will be an enormous loss in taxes. India is totally dependent on the southwesterly monsoon. After 2 failed monsoons the government must plan long term on storing water. Las Vegas, a city in the desert, uses 7.5 million gallons, that is around 29 million liters of water, everyday for its hotels and casinos. It gets just 4 inches of rain a year and has suffered from drought for 16 years. Still it manages. How? We need to learn. Socialists are always howling about redistribution to the poor. How will they get Mother Nature to redistribute water? If they really want to help the poor bring down the population. Then we will be able to watch the IPL on screens while splashing around in swimming pools. Else wait for Mother Nature to do it.

Is Xi Jinping the new Mao?

A complete disintegration of China would be great for India but, with a large number of nuclear weapons and missiles, it could cause enormous destruction, both within and outside the country. President Xi Jinping was born in 1953 and lived through the Great Famine that killed up to 45 million people. This was followed by Mao Zedong's Cultural Revolution in which elders and party leaders were humiliated and beaten by Red Guards. President Liu Shaoqi was beaten and imprisoned. He died in prison in 1969. Since he became president in 2013 Xi Jinping has been accumulating power by purging top officials on corruption charges. Recently he has been named a 'Core' leader, a title previously enjoyed only by Mao and Deng Xiaoping, who crushed the peaceful protests at Tiananmen Square in 1989. A few days back Xi was named Commander in Chief of the armed forces and was seen addressing officers at army headquarters in an army uniform. So, does Xi Jinping see himself as today's Mao Zedong? It is important because even though China was very weak under Mao it invaded Tibet in 1950 and is occupying large tracts of land after its invasion of India in 1962. Under Xi China claims the entire South China Sea as its territory and has built artificial islands on reefs. In January it landed civilian planes on one such reef and a military plane landed on the same reef this month. Its megalomania knows no bounds. China is planning to build 20 floating nuclear power plants on the South China Sea to supply power to the reefs and for exploration for minerals. Obviously, it feels that it has a right to do whatever it pleases and if neighboring countries are harmed then tough luck. So where is China's power coming from? From its economy. Decades of double digit growth has propelled China to become the second largest economy after the US which is why it is able to spend so much on its armed forces. Economic growth was built on exports which are falling because of the fall in global growth following the crisis in 2008. The economy is slowing down rapidly so the government will have to stimulate the economy. But how? China's debt is 248.7% of GDP. Following 2008 the private sector non-financial debt has risen by $6.5 billion per day. Property prices are increasing again, giving rise to the fear of a bubble. Chinese banks are sitting on huge non-performing assets and cannot raise money from the market because their shares are trading at below book value. Growth is being maintained by debt, driven by the real estate sector. Overcapacity and excessive debt are leading to deflation so some stimulus is needed by raising money through government bonds instead of through bank credits. We do not know whether Xi Jinping is like Mao Zedong or Kim Jong Un. The only hope for peace is if the economy collapses totally. We can only hope.

A humble salute to our lords and masters.

Seems that India's politicians are becoming more autocratic by the day, enforcing bizarre rules to make us more miserable than we already are. No wonder India is 118th on the World Happiness Index, below Somalia, China, Pakistan and Bangladesh. Having lost in the Supreme Court the Maharashtra government has passed stringent rules to prevent a return of girls dancing in bars. By banning alcohol, tips and suggestive postures Maharashtra is using force to stop the bars from reopening. The same government has no problem when Malaika Arora earns Rs 25 million dancing in hotels during New Year eve. Presumably they serve holy water in these hotels. Apparently women in India refuse to be goody two-shoes because they are showing interest in using sex toys. Shock and horror! How does Mr Fadnavis think that India has a population of 1.3 billion? If he really wants to help women he should make it easier for them to work instead of being mean and nasty to poor women. He should concentrate on tackling serious crimes, which will keep women safe anyway. In an effort to win power by any means Mr Nitish Kumar has banned all forms of alcohol in Bihar. If he has time perhaps he would read this short history of Al Capone who built his power on bootlegging during Prohibition in the US. This ban got him votes of women and will help 'gooda raj', who are his partners in government, in making a fortune from smuggling. A toast to 5 years in power. The central government is determined not to allow doctors to settle abroad after training but has no problem in allowing civil servants to make merry in foreign lands, sponsored by international agencies. What agencies are we talking about? The CIA, MI6 or even the ISI? The logic is that the government spends a lot of money in training doctors so they must work in India to pay back the debt. A huge lie. Because of reservations most doctors are having to pay huge capitation fees to qualify from private medical colleges. They have to work night and day, as interns and residents, for their training. Doctors will be punished if they accept any gift from pharma companies. Doctors will be struck off for 3 months for a gift of Rs 5,000 and for 6 months for a gift of Rs 10,000, which is good, but civil servants can accept a gift of Rs 25,000 from friends. Maybe because they are so pure anyway. Our medical education is very poor so even if a few return after training abroad they are passing on latest knowledge to our doctors. Finally, even after paying huge taxes and tolls we are restricted from driving in Delhi by a tyrant but our trillionaire MPs can whizz through toll plazas without paying a paisa. We are vassals, they are our masters.

Should children be used for political gain?

We have written many times about the pernicious Right to Education Act, which forces private, fee paying schools to reserve 25% of seats for poor students, which makes it an act of lottery, leaving 75% of poor students to the mercy of government schools and increasing fees for the middle class by over 300%. Middle class people are frustrated with the present government for not getting rid of the act, says an article. " By outlawing detention before eighth grade, the law effectively delinks advancement from educational achievement," says the article. Why did the Congress stop all exams up to Class X so that no student maybe failed? Because parents of poor students are very often illiterate so they would be at a great disadvantage. According to socialist thinking, inequality is most easily solved by bringing everybody down to the same level. It has the added advantage of getting votes. It has lowered standards so that " percentage of rural children in grade four capable of double-digit subtraction dropped from 58% to 40% ". " In effect, RTE has created the dreaded licence-permit raj in education," says the article." The National Schools Alliance estimates that more than 5,500 schools have been forced to close....At least another 15,000 have been threatened with closure. Some schools survive only by paying inspectors to look the other way..." The US government went the other way. A law, No Child Left Behind, enacted in 2002, mandates standardized tests for all schools in the country regularly and schools that did not show progress of children would be severely penalized, including firing of teachers and shutting down of schools. The act has led to stagnation, instead of improvement, and has resulted in "....widespread cheating, teaching-to-the-test, narrowing of the curriculum, heartless cases of neediest children being thrown out of schools and more ". A generation has been lost. Many states in India have asked the center to revoke the RTE Act and bring back exams for Class X students. Indian politicians enjoy their power to terrorise citizens so instead of repealing the punitive act they add more violence to it. The AAP government in Delhi asked private schools to list every piece of apparatus, such as microscope and petri dish, and little things, such as " fire extinguishers, TVs, photocopiers, typewriters, desks, dissection equipment, table tennis table and library books ". What about pencils, pens and erasers? Clearly, they want to create animosity between parents and teachers, let the children go to hell. The first act of the same government was to increase their own salaries by 400%. We got rid of brutal white skin tyranny to inherit a more brutal brown skin one. We must be so lucky.

Why are educated women so unhappy with their marriage?

More than 20,000 housewives in India committed suicide in 2014 compared to 5,650 by farmers, nearly 4 times as many, and yet this does not receive any coverage in the media, as do farmers. The surprise is that female activists, who get extremely agitated about access to Hindu temples or the building of dams for irrigation, show no interest in why their sisters are killing themselves. It has been left to foreigners to research the causes of housewife suicides in India. A study in The Lancet in 2012 found that in women older than 15 years of age the rate of suicides in India is 2.5 times that in high-income countries. In western societies "marriage confers protection from suicide to married women". So, why is marriage killing our young women? " We found that female literacy, the level of exposure to the media and smaller family size, were correlated with higher suicide rates," said one researcher. Counterintuitively, women in traditional large families, which probably means rural, have much lower suicide rates. A glib answer is to blame dowries, but dowries are more prevalent in traditional families. It cannot be strained relations with in laws because an educated, working woman is likely to "forge a strong alliance with her husband and persuade him to break off from his parents and set up a nuclear family on their own". Is it because of unfulfilled expectations? In villages most women would eat the same kind of food, wear the same kind of clothes and do a lot of physical work, looking after their families, looking after dairy cattle and helping out in the fields. In cities, standards of wealth, and hence standards of living, vary enormously. Expenses are much higher and jobs maybe very stressful. A 5 year study in the US showed that 82% of wealthy are happy while 98% of poor are unhappy, 87% of wealthy are happy in their marriage while 53% of poor are unhappy, 93% of wealthy liked their work while 85% of the poor did not and 0% wealthy were unhappy with their finances while 98% of the poor were. A civil servant writes that happiness is of 2 types, positive and negative. Positive happiness comes from acquisition and is therefore never satisfied while negative happiness comes from absence of unhappiness, which means an inner peace. Our negative happiness is spoiled by an oppressive state which imposes unjustified restrictions on our lives, like the odd-even rule of driving in Delhi. A book Sex and the Single Girl, published in 1962 promised women that they can 'have it all' but a woman writes that it has made women slaves to their work and to their bodies and provided free sex to men, without the commitment of marriage. Is the rising incidence of abortions in Indian cities a hint of why our young women are unable to bear it any more? We need to ask.

No need to convince us, convince your own.

In an article, 'Islam is Non-Violence', Ms Sadia Dehlvi seeks to differentiate between Sufis and other sects. " Extremism feeds on selective retrieval of sacred texts and history, creating irrational fears that require urgent remedial measures. Terrorists employ this methodology to evoke rage Salafi Wahhabi groups to promise a return to some imagined historic ideals as the only route to paradise," she writes. " Sufism gained in strength in the 8th century as a reaction to the Islamic Caliphate's obsession with conquests and wealth; forgetting the egalitarianism and simplicity of the Prophetic message." " Perhaps the slogan 'Islam is peace' should change to,'Islam is non-violence and non-coercion," she writes."Prophets were not sent to establish peace, but to alleviate suffering, establish law and preach the Oneness of God." But how can you alleviate suffering if there is violence because the weak, the old and children will suffer at the hands of those with arms, as they are doing now in the Middle East, in north Africa and in Pakistan and Afghanistan? And what about those who believe that God maybe a Goddess and will hear our prayers if they are sincere and please do not impose your beliefs on us?  A professor and member of the Congress Party, which was in power for 10 years to 2014, writes that Indian Muslims have not joined Islamic State so far but will do so if Hindutva and ultra-nationalism are allowed to flourish. Why is nationalism a crime? India is a nation and has every right to defend itself from attacks from across its borders. Jamiat-Ulama-i-Hind claims that since Muslim personal laws come from the holy book so it can ignore any judgement of the Supreme Court, which puts it above the law. The Muslim Law Board has warned the Prime Minister to stay away from triple talaq because it comes from Shariat. So secularism and rule of law apply only to Hindus and Muslims are to be allowed to do whatever they please, or they will take to terrorism. Scary. But it is not just in India. a program on BBC showed that one in three of British Muslims believe in the right of a man to have 4 wives, 39% think that women should always obey their husbands and 25% sympathized with the killers of Charlie Hebdo journalists. A Jewish journalist was spat at, called a dog and threatened on the streets of Paris. Migrants have created 900 no-go areas in Europe, giving rise to a backlash by the locals. An Al Jazzera poll last year showed 81% of Arabs support Islamic State, although the number may have fallen after several defeats. It is not surprising that other people are sceptical and angry. It is time to accept that the Caliphate has gone, Genghis Khan has gone, the Ottoman empire has gone, Taimur Lang, Nadir Shah, the Moguls have gone. That does not make you victims. It means it is time to accept that others are equal. Which means you are not superior. That is the real difficulty.

He could have, but did not.

President Obama is to visit Saudi Arabia, apparently to reset relations with the kingdom. But do the Saudis trust him any more after his support for the Muslim Brotherhood in Egypt, the killing of Gaddafi and the nuclear deal with Iran? Will it end in the same way as the present of a 'reset' button to Russian Foreign Minister, Sergey Lavrov has done, with a civil war in Ukraine, resulting in a division of the country? Putin and Poroshenko have just agreed a prisoner swap. In a puzzling development the US and Saudi Arabia have just applied sanctions on terrorists in Pakistan. Which is joke unless you apply sanctions on the masters of terror, the Pakistan army and the ISI. The mystery is that Obama has refused to release 28 pages from the report on the 9/11 attacks. They are so secret that members of the Congress can read them but cannot take notes or be accompanied by their aides. The feeling is that the pages reveal Saudi government support for the 9/11 hijackers. After all, 15 of the 19 hijackers were Saudi citizens. Maybe, but why would the Saudis support Osama bin-Laden whose initial rage was against the Saudi royal family, for allowing infidel American troops to be stationed on Saudi soil, which he saw as a holy land? It is equally possible that the secret pages contain evidence against Obama's friends, Pakistan who so conveniently handed over bin-Laden to US forces in 2011 so that Obama could win re-election in 2012. A cable has come to light which shows how the ISI financed attacks on US soldiers in Afghanistan. What we have written many times. However, parts of the cable have been redacted. Why? Why is Obama still protecting the ISI? Hope it is not quid pro quo. Obama was quick to withdraw US troops from Iraq which allowed ISIS to take over large parts of the country. He is supporting some rebel groups fighting against Assad but not the Kurds who are providing actual soldiers on the ground. Why? To please Turkey or to please Iran? A huge explosion in the center of Kabul yesterday was witness to failed policy in Afghanistan. Obama thinks that killing Gaddafi was a mistake. Was it? He did not learn from the mess in Iraq following the removal of Saddam Hussein. Maybe, he just likes to kill. After all, he has killed thousands of innocent civilians and hundreds of children by the indiscriminate use of drones. In South Sudan, touted as a great foreign policy triumph, a fierce civil war has been raging, creating such famine that mothers are being forced to eat the flesh of their children. The sad 'resource curse' of Africa. Obama will be only 55 years old as he leaves office next January. Plenty of time to observe the world descend into bloodshed and hunger. Will he proudly say," Yes, I did."

As long there is finance there will be havens.

The revelation that a law firm in Panama was helping to set up shell companies to conceal wealth, known as the Panama Papers, has put many politicians in trouble. David Cameron was forced to publish his finances and the Prime Minister of Iceland was forced to resign. In the US Bernie Sanders is campaigning on increasing taxes on the rich to help the poor. In India tax avoidance is a hot topic. The government is actively seeking money hidden abroad. But the government has a double tax avoidance treaty with Mauritius which allows companies and non-residents to avoid paying taxes in India. No one knows how much Indians are hiding abroad but it is estimated to be around $181 billion. The tax department admits that it cannot collect Rs 7 trillion worth of taxes because some are under litigation, in some there are not enough assets and in some the payee has disappeared. There is great rage at how the rich are able to game the system to avoid paying taxes at home by hiding money overseas. They employ an army of accountants and lawyers to hide their money through complex financial instruments, which are very difficult to trace, and can pay off corrupt politicians to protect them. But is it all corrupt? Everyone wants to be rich without having to take risks or having to work hard. This is what Charlie Munger, Warren Buffet's deputy thinks," Of course the public market, which operates every day with transactions, is an ideal casino. There is a whole bunch of people who want to own a casino and make a lot of money without losing on inventories or credit..." And again," Even if you do that very honestly, I don't consider it much of a life. Just being shrewd about little pieces of paper, shrewder than other people, is not and adequate life." We are being constantly harangued not to buy gold but to invest in stocks or mutual funds because a deep financial market provides the money for new investments, which create new jobs. Trouble is if you tax too heavily it will just move to another part of the world where taxes are lower and we lose out. Recently the US government stopped a $160 billion merger between Pfizer and Allergan because that would have allowed Pfizer to become domiciled in Ireland where the corporate tax rate is 12.5%. Bernie Sanders is campaigning on higher taxes on the rich. US laws demand that Americans living abroad have to pay tax in the US even though they have paid tax where they live, forcing some to renounce US citizenship. Sanders receives $174,000 salary as a Senator and gets $46,213 from Social Security. In India we get nothing in return for the taxes we pay. The only solution is to have uniform tax rates and benefits in every country in the world. There will be no need for tax havens. But then how will politicians throw handouts to win elections? Therein lies the nub of the problem.

Sudden name change is an expensive inconvenience.

A fierce debate has broken out over the renaming of Gurgaon, a town southwest of Delhi, as Gurugram, by the state government of Haryana. A Fulbright scholar has written a scholarly article expressing her disapproval. She has no problem in renaming Bombay as Mumbai, Madras as Chennai and Calcutta as Kolkata, because these were reminiscent of the brutal British occupation of India but she has a problem with honoring Dronacharya, who was a teacher in martial arts in Mahabharata. She accuses him of caste prejudice because he demanded the thumb of a lower caste man as payment for teaching him archery. But was it caste that motivated Dronacharya to make such a savage demand or was it fear that a man so adept at archery may tilt the balance in favor of the Kauravas in the war that was sure to follow? In today's anti-Hindu animus prevailing in India who needs logical thinking. Another writer feels that those who are opposed to the name change are shallow elites who prefer names, such as Casa Bella and Palm Springs, in silly imitation of California. He feels that there is no harm in using a name that local people will find easier to pronounce. Others have resorted to mockery by punning on gaon, as in " gaon with the wind ", and on gram, as another name for chickpeas and as a unit of weight. Since India has many languages some of the new names are difficult to pronounce for non-native speakers. For instance, Trivandrum is far easier to pronounce than Thiruvananthapuram, Baroda is easier than Vadodara and Ooty is definitely simpler than Udhagamandalam. Another mocks the preference for brands by those who work in MNCs. Sometimes renaming can be senseless. Renaming Uttaranchal, which sounds much sweeter, as Uttarakhand was stupid because all vehicle number plates start with the letters 'UK', which is giving free advertising to the United Kingdom. In all this cacophony no one is focusing on the cost of changing a name. Changing a name of a place suddenly on a whim means that all the businesses will have to change their stationery or waste time in updating their web addresses and people will have to print new business cards, discarding their old ones. If the Haryana government had warned that the name would be changed next year it would have given everyone time to use up their old stationery and saved an awful lot of money. But then Indian politicians see themselves as our masters and believe that winning an election gives them the right to bully citizens at will. Thus Delhi Chief Minister has again imposed car restrictions on us even though a study by IIT Delhi shows that the previous abuse did not improve air quality. Politicians in Tamil Nadu are promising a ban on alcohol even though there are many examples that prohibition results in increased crime. Politicians in India are a curse. We pay.

Will the Republicans help in electing a socialist president?

The empire maybe winning against Donald Trump but may lose the war. From the beginning he has faced abuse like no other candidate for president. Arianna Huffington, who founded the Huffington Post, called him a 'dangerous buffoon', like Kim Jong-un of North Korea. The New York Times cannot find a " scarier nightmare " than Donald Trump. Never mind that the killing of Saddam Hussein, on a lie (Huffington Post), by George Bush led to the rise of ISIS. Obama has just admitted that killing Gaddafi was the 'worst mistake' of his presidency. Bombed into near oblivion in Syria and Iraq, ISIS is shifting to Libya, where it can replenish its coffers if it gains control of Libya's oil. Libya has become the new starting point for migrants after the deal between Europe and Turkey, closed the Greek route. Which means ISIS can send in many terrorists from Libya. So why has Trump won so many primaries? There is a large section of people who feel left out of the political process. They are mainly white, without college degrees and are afraid of terrorism. These people are more concentrated in liberal areas which may seem counterintuitive, but maybe because liberals see them as stupid white racists. Liberal anger was expressed against voters who were labelled as "piggish, racist, sexist, xenophobic". If Trump is so bad why does the media waste so much time on him? Because it increases their ratings. Trouble is the Republican Party leaders are against Trump. Maybe because they are scared that, as an outsider, Trump will be hard to control, but mainly because they think that he will be trounced by Hillary Clinton, who is still the presumed candidate for the Democrats. Will he? Donald Trump is certainly unpopular with an unfavorable rating of 67%, but Hillary Clinton is tied with Ted Cruz on 53% unfavorable rating. Bernie Sanders has just won Colorado with 63% of votes. Sanders is more popular than Clinton and both Republican front runners, Trump and Cruz. Why is a socialist so popular among Americans? Because of Republican Party machinations. They have been after Clinton for years, first over the death of Ambassador Chris Stevens in Benghazi in September 2012 and then getting the FBI to investigate whether she used her private server for confidential emails as Secretary of State. A trumped up charge against Trump's campaign manager by a female reporter has been dropped. Ted Cruz won the all delegates in Colorado by dubious means and now seems to have won the delegates in Georgia even after losing the primary. Apparently leaders of the Republican Party can ignore results of the primaries and choose their own candidate for president by a system of 'brokered convention'. If Bernie Sanders wins in November the Republicans would have been instrumental in electing a socialist president. Will they feel the Bern?

Have we reached a crossroads?

Since the beginning of the year there is a rising fear of a global recession, with central banks resorting to unconventional monetary policies such as negative interest rates and quantitative easing. The IMF has just reduced the growth forecast for this year calling it " Too slow for too long ". A professor of economics writes that if 'conventional unconventional monetary policies' do not work it maybe time for 'unconventional unconventional monetary policies'. Paralysed by the fear of losing elections politicians are unable to carry out structural reforms which have " front-loaded costs and back-loaded benefits ". Quantitative easing " has benefited holders of financial assets, it has also fueled rising inequality ". A 70 year study, starting in 1946, has shown startling inequalities in British society. Even 67% of British Oscar winners attended expensive private schools as children. Inequality starts before birth and carries on throughout life. A study in the US shows how government policies and the tax system cause inequality. Authors suggest that lifetime inequality is more important than at one particular point in time. But ordinary people do not form opinions based on studies. Their decisions are based on perceptions and what they see is that politicians take a victory in elections as a licence to do whatever they like, which they see as a betrayal. The reason why Donald Trump is ahead in the race to be the Republican candidate for president is because white working-class Americans are becoming poorer and they see no one talking for them. Republicans take no responsibility for the plight of these people because they caused the problem in the first place by extending permanent normal trading relations with China, which decimated manufacturing in the US and resulted in low wages by creating a large pool of unemployed people. People would be even more angry if they understood that cheap goods from China kept a check on inflation, helping to keep interest rate low for a long period, thereby leading to the real estate bubble. Obama has been a polarising president and is despised by a large section of Republicans. His secretive nature and his paranoid persecution of whistleblowers has put off even liberal journalists. A leaked tape in Brazil showing the Vice President practicing an acceptance speech for the post of president is being seen as a sleazy betrayal by supporters of President Dilma Rousseff. People in Germany are furious with Angela Merkal for welcoming millions of migrants. In India we have no real debate because the government controls the press by being the largest advertiser and the wealthy do not support think tanks financially because they are making money from licenses and scams, with politicians and civil servants. To be fair, politicians cannot foresee sudden changes in other parts of the world or natural catastrophes but widespread anger is bubbling up all over the world. So much anger is cannot be good. 

What is it that the IMF is not telling us?

The International Monetary Fund has cut its prediction for growth in the global economy from 3.4% to 3.2%. India's growth rate was predicted at 7.5% but the report says," Fiscal consolidation should continue, underpinned by revenue reforms and further reduction in subsidies. Sustaining strong growth over the medium-term will require labour market reforms and dismantling infrastructure bottlenecks, especially in the power sector." Which is another way of saying that government must not exceed its spending target, so that inflation does not rise, the GST bill must be passed, labour laws must be reformed, population must be reduced to cut the subsidy bill and politicians must be stopped from promising free power to win elections. The Purchasing Managers' Index in March was 52.4 and output prices are rising. Core inflation, which does not include volatile food and fuel prices, rose to 4.9%, which means there is an underlying tendency for prices to rise. If the monsoon is good this year it will bring down food prices, which will mean lower retail inflation, but rural consumption will rise pushing up core inflation. It will be interesting to see what the RBI does with the interest rate. A lot will depend on the rupee. If it goes down it will help exports but increase prices of imports, especially oil, which will push up inflation, but if the rupee strengthens imports will become cheaper which means the Prime Minister's efforts of 'Make in India' will be that much harder. The strength of the rupee denotes its exchange rate against the dollar, which depends on what the Federal Reserve does with interest rate in the US. China has been gradually devaluing the yuan against the dollar, to protect its exports, and the Fed has been restrained for fear of upsetting China. The IMF has projected a healthy growth rate of 6.5% for China this year, as it restructures its economy away from investment towards domestic consumption and services. But some believe that China is not rebalancing its economy but is creating another real estate bubble instead. At the moment it is in a 'sweet spot' between bubbles but a hard landing is almost inevitable. Chinese companies are withdrawing their bonds from sales, $7 billion worth of sales were cancelled last month. Yet the level of debt is increasing. The non-financial private sector debt is 205.2% of GDP and the general government debt is 43.5%, for a total of 248.7% of GDP. It was 234.2% of GDP in December 2014. Since the crisis of 2008 non-financial debt has risen by $6.5 billion per day in China. Central banks have run out of ammunition to stimulate growth, prompting some economists to suggest a common currency for the entire world. We have one Greece because of the Euro, imagine 100 Greeces. Things must be pretty desperate if they are discussing fruit-cake ideas. Maybe they are not telling us the whole truth. Oh boy.

Should India trust these seductive whispers?

US Secretary of Defence, Ashton B Carter is in India. But why? Apparently because India and US are strategic partners, locked in an embrace that " will build a bright future that benefits both our nations ". " We share a commitment to important principles, including peaceful resolution of disputes, freedom of navigation and overflight, countering terrorism and a belief that countries should make their own security and economic choices free from coercion and intimidation," he writes. Do we? He should ask his boss, President Barack Obama who saw no difference between terrorist attacks on India, orchestrated by the ISI of Pakistan, and those inside Pakistan, by extreme jihadist groups, in a joint statement with Nawaz Sharif in October 2015. He presumed to lecture India on nuclear weapons, again equating us with Pakistan. Will the US guarantee safety of " navigation and overflight " over artificial islands that China is building in the South China Sea? The US supplied sophisticated military weapons to Pakistan in 2013, is supplying F16 fighter aircraft and has promised to supply attack helicopters to Pakistan, despite repeated attacks on India, originating from Pakistan. So much for being " free from coercion and intimidation ". This is certainly Obama's gratitude for Pakistan handing Osama bin Laden over in 2011 so that he could win re-election in 2012. So why is Secretary Carter filling us with gas? " While in India, I will work to advance our cooperation on aircraft carriers and jet fighter technology, and new agreements for science and technology cooperation," he writes. Aha, now we understand. He wants to sell us outdated aircraft carriers and fighters for huge amounts of cash. Have we not learnt any lessons from the Baku/Admiral Gorshokov/Vikramaditya saga which cost us in excess of $2 billion for a rust bucket of 1988 vintage? The US is building smaller nuclear weapons, raising tensions in the world. Not being prepared for the aftermath of the killing of Gaddafi in Libya was a mistake Obama said recently. It was not a mistake, it was a heinous crime. Not to learn from the chaos precipitated by the removal of Saddam Hussein in Iraq is the act of an imbecile. To unnecessarily invite tension with Russia by instigating an armed coup in Ukraine was also the act of an imbecile. But Obama is no imbecile, although he may think he is too smart. Elected by a combination of black racism and white political correctness he probably wanted to show his relevance by a complete lack of scruples. Mr Carter is " confident that now more than ever, the strategic handshake between the United Sates and India will continue to benefit each of our nations ". God save us. Must never trust the seductive whispers of a forked tongue.

Maybe a dose of 'voodoo economics' is the right medicine.

The Sixth Economic Census shows that the growth in the economy from 2005 to 2013, during the reign of Dr Manmohan Singh, with a D Phil in Economics from Oxford University, did not create regular jobs. In fact, 5 million jobs were actually lost between 2004 and 2010. The share of jobs in non-agricultural establishments fell from 89.18% in 2005 to 82.57% in 2013, which is very bad because a proven way to reduce poverty is to move people out of agriculture into other long term employment. In 2005, 19.54% of rural people were employed in agriculture which increased to 31.01% in 2013 while employment in non-agricultural establishments in rural areas fell from 80.46% to 68.99%. Countries which have reduced poverty have done so by encouraging big enterprises, with high productivity and innovation. In India most enterprises employ less than 5 people. In 1990, 93.41% of establishments had less than 5 workers, accounting for 54.45% of total number of workers. After 23 years the number of establishments employing less than 5 workers has risen to 95.5%, employing 69.52%. Micro and small enterprises provide 84% of employment in manufacturing in India, while in Malaysia it is 27.5% and 24.8% in China. No wonder then that China beats India on every parameter from infrastructure to Human Development Index to medals tally at the Olympics. A lot of the growth that occurred was in the construction sector, which employs mainly daily-wage laborers, and was based on black money generated from a plethora of scams. A combination of very high real estate prices with rising circle rates, which is the market price estimated by the government, has resulted in a slowdown in this industry. In India politicians are always looking to increase taxes to pay for handouts, to win elections. In the US, Ronald Reagan's policy of lower taxes with tighter government spending was derided as 'voodoo economics' but resulted in creation of 20 million jobs and a growth rate of 3.5% of GDP. Reagan inherited a decade of stagflation, that is slow growth with high inflation, but did much better than Obama has done. Median household income shot up 10% under Reagan but has remained flat under Obama and national debt was 53% of GDP while it has grown to 102.7% of GDP under Obama. Reagan had a strong faith in the constitution of the US, which would have made his policies highly moralistic. Our politicians are only interested in self enrichment and continue with failed policies which are keeping the country poor. Ted Cruz, who is campaigning to be the Republican candidate for president, proposes a flat tax of 10% and a reduction in the powers of the Inland Revenue Service. Here the extortion of taxes is such that the tax department has had to refund an excess of Rs 1.17 trillion. Policies to help the poor only increase poverty. The US teaches how to get rich. Will they learn?

The whole world is angry, except those who should be. Why?

India is an unhappy country, coming 118th in the world happiness index. We can see that people are angry by the fatal incidents of road rage everywhere. But how can we be less happy than Somalia at 76, Pakistan at 92 or Palestinian Territories at 108, which are all failed states. Is it because people in these countries are resigned to their fates because everyone, except politicians, army officers and jihadists, is equally poor, while in India society is divided into different layers of prosperity and people feel frustrated because they feel they are being denied their potential? But India is not alone. The whole of the Middle East is in turmoil. There was great elation in 2011 when Zine el-Abidine Ben Ali, the President of Tunisia, scarpered to Saudi Arabia when the country erupted after a street vendor, named Mohamed Bouazizi, set himself on fire. People have become disillusioned with the revolution as corruption has not diminished, there are no jobs and they feel poorer. With nothing to do and no future to look forward to young men in Tunisia are joining ISIS, Al Qaeda and the Al Nusra front. Arab Spring has turned into Arab Winter as Yemen, Libya, Iraq and Syria are in turmoil, Egypt has elected a general as president and Lebanon does not have a president. There is anger all across the Middle East. There is anger in Europe as governments seem paralysed to stop millions of migrants from pouring in. They are worried about becoming minorities in their own countries and consequent loss of culture. Although the US is number 13 in happiness people there are also angry. This was noticed by Donald Trump who has become a big headache for the establishment Republicans. People are worried about the economy, about jobs, about illegal immigrants and about terrorist attacks, especially after San Bernadino. People are angry in Britain as the economy falters and the government tries to balance the budget by cutting social security. Britain will be voting in a referendum on 23 June whether to remain a part of the European Union with both the sides accusing each other of dirty tactics. The Brits are worried about the economy, about immigration from Europe, with the fear of rising crime and the jump in the price of real estate, which is preventing the young from buying their own homes. We Indians are angry because we have no control over our lives. Politicians are elected by a minority of people, based on religious divide, caste or handouts and then impose policies on us, not because it helps the country, but because they want to enhance their own powers by increasing divisions. Thus, the Delhi government is enforcing odd-even rules for men car owners when studies show that it is of no benefit. The Congress is celebrating Muslim votes in Assam by allowing unchecked infiltration from Bangladesh. And honour killings continue in Tamil Nadu, probably in anger against 69% reservation in the state. So much anger will surely explode. What happens then?

If there is not enough water how can there be enough jobs?

The rate of unemployment in rural India is 7.15% and in urban areas it is 9.62%, overall rate in the whole country is 7.97%. Are the goons working for 'syndicates' in Bengal counted as employed? " There are four pillars on which Trinamool Congress is standing, bribes, extortion, syndicates and chit funds. Using these they came to power, and using these they want to stay in power,' said a CPM official. Of course, but will it be any different under the CPM or Congress? Having committed so many crimes the Trinamool has to stay in power somehow, revenge will be swift and bloody it they lose. No wonder, Trinamool MLA Sabyasachi Dutta claimed that his syndicates are providing jobs to thousands of young men, thus sustaining thousands of households. Is it going to get better? Difficult to be optimistic. The fall in the price of oil is causing a lot of Indians to lose their jobs in Gulf countries. Indian colleges just give theoretical knowledge so that students are unprepared for the changing jobs market. We are now in the midst of the fourth industrial revolution. India missed out on the previous three, it will be a disaster if we miss out on this one. Artificial intelligence and robotics will change how people work so that only a few, with the right education, will flourish. What a pity that the fees at IIT colleges have been increased from Rs 90,000 to Rs 200,000 per year. This gives an instant advantage to the rich. Politicians insist that students should take loans from banks because they will get high paying jobs once they finish, so repaying will be easy. Will it? Bernie Sanders, a 73 year old Senator with socialist ideas, is drawing large crowds of young people and giving Hillary Clinton a run for her money in the race to be the Democratic candidate for presidential elections in November. Why are young Americans gravitating towards socialism? Because jobs with good salaries are scarce so that many are struggling to pay off their student loans. Surely colleges in emerging nations are not as expensive as in the US? Fights are breaking out in colleges in South Africa because poor students are finding it increasingly difficult to afford a university education. It will be much worse in India because reservation students will not pay a paisa even if they are extremely rich. There is something very fishy about the published rate of unemployment because 75% of women in India do not work. When it comes to permanent jobs the ratio is one woman for every 4 men. Anyone who can get a job in an IT company tries to get transferred to the US. If nothing at least give birth in the US so that the baby can get US citizenship. The drought in Maharashtra is a warning that there are too many people in India. There can never be enough jobs for so many. Without jobs there will be 'syndicates' everywhere.

How about a tax on genetic inheritance?

Ever since Professor Thomas Piketty wrote his bestseller, 'Capital in the Twenty-First Century', there has been a flood of articles on inequality. The trouble is that pundits use the word 'inequality' when they mean 'poverty'. But they are not the same. After all, a man earning $1 million a year cannot compare with Bill Gates, but is not going to resort to " violence and instability ". An article seeks to make a case for reducing inequality, apparently because it results in economic growth. It gives the usual figures about the effects of poverty on development of children and lauds the socialist policies of Latin America because,"...progressive policies were at the heart of the economic expansion itself: a new generation of better-educated workers entered the labour force, earning higher salaries and reaping the dividends of social spending." If socialist spending was responsible for higher growth should it not be blamed for the recession in Brazil and the collapse of the Venezuelan economy, with rising poverty? How do you make everyone economically equal? One way would be to make every beggar a billionaire. But how? Everyone is born, not only in different circumstances, but with different talents and abilities. There is only one Narayan Murthy or one Sundar Pichai, because they are exceptional. So the only way to make everyone equally rich would be to print lots of notes and distribute them equally. That will result in a collapse in the value of the currency, with resulting hyperinflation, and a collapse of the economy. The other way is to reduce the wealth of the rich by taxing them heavily. Communism was a highly idealistic system, where all assets belonged to the state which rewarded citizens according to need, not ability, and created a classless society. It turned out to be a highly brutal system, giving rise to Josef Stalin, Mao Zedong and Brother Number One, Pol Pot, among others. People hate being restricted. Even in Stalin's Soviet Union people smuggled Western music into the country, etched on X Ray plates. The Panama Papers show how the wealthy avoid paying taxes by hiding them in tax havens. The Chinese are transferring large sums of money overseas because they are worried about the falling value of the yuan. Finally, many countries in the world levy an inheritance tax in the belief that inheritance creates unfair inequality because it is a windfall gain for beneficiaries, who have not done anything to earn it. So should Mr Mukesh Ambani have been forced to pay crippling taxes when he inherited his father's business? In which case what about Ms Ashwarya Rai? She is rich because of her great beauty.  Beauty cannot be acquired, it is in the genes inherited from parents. So should there be an inheritance tax on genes? And if on Ms Rai, what about geniuses like Einstein or CV Raman? Forcing equality on human beings does not work. Focus on eliminating poverty instead. Honestly.

Local solutions cannot improve global weakness.

Managing Director of the IMF, Christine Lagarde thinks that there are political dangers to the global economy. She sees " weak growth, no new jobs, no high inflation, still high debt - all those things that should be low and are still high ". " What we fear is this sort of very new mediocre," she said. Countries need to carry out " structural reforms, fiscal stimulus and monetary policy ". Politicians are reluctant to carry out structural reforms, which maybe painful, and fiscal stimulus may lead to increasing deficit, which is seen as irresponsible, so the entire weight has fallen on monetary policy, which has seen negative interest rates in Japan, Eurozone, Denmark and Switzerland and quantitative easing in the US, the UK, Eurozone and Japan. With virtually no interest to pay average household credit card debt in the US has reached, $7,800, the highest since the recession of 2008. Easy borrowing means that the global real estate market will see investments of over $1 trillion this year. Low interest rates help only those who are credit worthy, which means the rich, while the steep rise in real estate prices means that the poor are unable to buy assets and have to pay increased rent. Which is why Lagarde said that the " cards are stacked against the common man - and woman - in favor of elites ". The US unemployment rate is down to 5% so why is the Federal Reserve holding back from raising rates? Because the global economy, especially that of China, is weak, a large number of people in the US are long term unemployed and wages are stagnant, while stock prices are near all time high and corporate profits are soaring. The global debt has reached over $200 trillion, which is 3 times the size of the entire global economy. China's debt has gone up from $10 trillion to $30 trillion but experts believe that there is no danger of a meltdown like 2008. Trouble is if banks in China and emerging markets have to clean up their books lending will fall, growth will slow down, commodity prices will fall further and we will be in another recession. When Tata announced its intention to sell its loss making business in Britain it sent shock waves around the country with the fear of losing 40,000 jobs. The Business Secretary rushed over to hold talks with the Tata Chairman in Mumbai. Why such panic? Because poor children in Britain are dependent on free food they get in schools and have to starve when schools are closed, during vacations. Why is Tata making such losses in Britain? Because China is dumping steel on other countries at very low prices because there is less demand in its slowing economy. The EU wanted to impose an anti-dumping duty of 66% but David Cameron blocked it because he thought he could increase trade with China. It is so bad that a right wing newspaper is accusing Margaret Thatcher of being responsible. Politicians can focus only on their country, so nothing improves. Unless there is a crisis.