Why the rage when we know what to expect?

Ever since Donald Trump was elected president experts have been trying to predict what policies he is going to follow. He is being portrayed as an unpredictable lunatic given to passing Executive Orders on a whim. There are leaks from inside the White House about how he gets angry at negative coverage in the media and how he watches television because he is easily bored. There is a long article about how he is vengeful and is taking decisions based on his "intuitions, grudges, impulses, and obsessions". Studies apparently show that politicians in the west tend to keep their campaign promises. Trump is doing exactly what he promised in numerous speeches, during the campaign, and was elected on the basis of those promises. So why the outcry? There is even talk of restricting his access to the nuclear button. What do they intend to put in place, a debate in Congress? His cabinet members disagree with his policies. So is his term going to be full of arbitrary decisions and fights with cabinet members? An article by Professor WPS Sidhu explores 5 scenarios that may unfold during Trump's first term in office. The first is called Concert Redux where the US makes loose alliances with other powers, as happened in Europe in early 19th century. This will be prone to break up. The second is a world divided by regional powers into zones of influence. In Asia there could be competition between India and China, with India losing out. The third is a Fortress America scenario, which happened before and after World War I, leading to World War II. Ruchir Sharma drew a parallel with protectionism in the US from 1914, which led to the Great Depression and then to World War II. The fourth scenario is a coalition of western countries to contain Russia and China. That would be foolish because both countries have strongmen in power, who are unlikely to want to be contained. Russia is economically too weak to mount any serious challenge to US hegemony but China is an aggressive nation, intent on subjugating its neighbors. China has been enslaving nations in Asia and Africa by giving them huge loans and then forcing them to surrender to its demands when they cannot repay. The fifth and last scenario is probably the most likely, writes Sidhu, in which Trump will take "improvisational, seat-of-the-pants" ad hoc decisions which will be confusing for everybody. So far Trump has not taken any decision that he did not promise during the campaign so why this fear of him becoming ad hoc? Not just the US, countries in Europe may also elect leaders from outside mainstream parties. Therein lies the terror. Since the War a cozy club of politicians and wealthy elite have ruled the world to their own advantage. They are afraid that this may disappear. Fear leads to rage. That is what we are seeing. It will be fun.

Customers are for service, surveys are for feedback.

Treating taxpayers as customers may be more productive than the present system of treating people as dishonest, writes Aurodeep Nandi. "The problem is that the dishonest citizen doesn't roam around with a label around her neck," he writes. "So when the government decides to go after her, it inadvertently comes with such a heavy hand that a majority of the honest ones become collateral casualties." What if the tax dodger does not consider herself to be dishonest? Since all politicians are dishonest and use our money to finance their lavish lifestyles there is no guilt in avoiding taxes any which way. It cannot be wrong to pick the pocket of a pickpocket. Not just Indians, Americans hate paying taxes too. The reasons are curiously very similar. The laws are complicated, the adversarial system was inherited from the British, a colonial power, and the rich can use the laws to reduce their tax burden. The best example is Warren Buffet's assertion that he pays a lower rate than his secretary. Buffet was third on Forbes' list of the richest billionaires in the world last year. In India the rules are so complex that we have to take the help of a chartered accountant to file returns, who has to pay service tax on his fees. In effect, we have to pay a service tax to pay income tax. Isn't that nice? How to make taxes a pleasure? Collect feedback from citizens on the functioning of tax officers, suggests Nandi. Nobody will dare to complain against a government officer because the revenge will be vicious and anonymous feedback is of no use because it will be rejected as gossip. Tax fellows are agitating against the Goods and Services Tax because they may become redundant. Surely that is good for us ordinary people, but the Finance Minister has assured them that their jobs are safe. Still, all officers at the Central Board of Excise and Customs are going to wear black armbands from today. Oh dear, no one trusts politicians. Experts read books but do not understand what people feel. India has the largest number of VIPs at over 500,000. These people have all kinds of perks. To continue their grip on power they need to bribe voters with handouts. So, we pay taxes for the luxuries of VIPs who use our money to bribe voters to stay in power permanently. In a recent survey only 3% of the top 20% of those surveyed saw themselves as rich. Only a small fraction of the middle 60% considered themselves as middle class. Only 23% of households have private health insurance. 36% of the top 20% have private health insurance. Politicians and civil servants can get treatment abroad, we pay for every service. Over 400 police stations do not even have a telephone. No need to protect us from criminals but tens of thousands of tax fellows to extract the last drop of blood. Give us full health cover and pensions, we will gladly pay. Else continue the oppression.

Why go to the US if you don't like the way of life?

President Donald Trump has stopped entry of citizens from 7 countries for 90 days, including Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. So called liberals are up in arms. "This not who we are," tweeted Hillary Clinton. Strange. There was not a peep when the previous incumbent of the White House, Barack Obama was merrily blowing people away in the same countries, with drones. How many innocent people did he kill? Obama claimed the he had killed 116 innocent civilians, although they did not have precise figures. Conor Friedersdorf in the left wing, The Atlantic, started by praising Obama but then wrote that over 1,100 civilians could have been killed by drones. An article by the the Bureau of Investigative Journalism in 2014 estimated 2,400 killed in 5 years. The Russian news channel, rt.com, says that drones killed over 4,000 civilians. Whatever the true figure it is enough to have made Obama the inspiration for a new superhero in American comics, called the Drone Master. Citizens of Pakistan, Afghanistan and Saudi Arabia will undergo extreme vetting. Pakistan is the epicenter of terrorism in the world today and the Inter-Services Intelligence, or ISI, actively supports the Taliban, while 15 of the 19 hijackers during 9/11 attacks were Saudi nationals, supported by Saudi officials. The Pakistani army openly threatens terrorist attacks on India, vowing to bleed our nation through a 'thousand cuts'. These countries openly call themselves Muslim nations and the people identify themselves as Muslims, everyone else being either 'kafirs' or 'infidels'. If they accept every religion as equal, respect secularism in the US and stop demanding special rights for themselves there will be no conflict. Muslims in India refuse to accept the Uniform Civil Code, claiming that their religion is higher than our constitution. Secularism is guaranteed in Turkey's constitution but President Erdogan is making it more Islamic everyday, using the staged coup as an excuse. He has wide support among the Islamists in his country and easily wins elections on the Islamic vote. Trump has stopped migrants from Syria indefinitely. We read accounts of horrific injuries to children in Syria, which is taken as reason to allow refugees into the US and Europe. No one asks as to why over 3.7 million children have been born during the civil war. Why are ordinary people giving birth under bombing from both sides? Because their religion says so. When people behave in an illogical manner because of religion it is fanaticism. If the US is giving you refuge it has every right to demand respect for its constitution and way of life. You cannot demand one while rejecting the other. That is why people voted for Trump. Surely it is easy to understand.

Assets can be inherited, can democracy?

A new study by the Economist Intelligence Unit ranks the US as a flawed democracy, with a score of 7.98 out of 10. Australia, New Zealand, Canada, Ireland and the Scandinavian countries top the list with near perfect scores. The drop in rank for the US started from 9/11, according to the Pew Research Centre. People have lost faith in their institutions. Maybe, that is why they voted for Trump, because he is completely from outside the establishment. India seems to be ranked the same as the US, which is a puzzle. Marks are awarded according to 5 parameters: electoral process and pluralism; civil liberties; the functioning of government; political participation and political culture. India will score top marks in electoral process and pluralism, mainly because of the work done by our Election Commission. One of the reasons why people in the US are losing trust in their government is because of the growing inequality. The chart shows its Gini coefficient higher than that of India, which is puzzling because the International Monetary Fund warned that our Gini index has risen from 45 in 1990 to 51 in 2013. Political participation is limited to casting votes every 5 years but no ordinary person has a hope of standing or winning a seat in assembly or parliament. Parties choose criminals as candidates because they have the money and the goons to win seats. People vote for them in the belief that since all politicians are corrupt it is better to have one's own villain in power and possibly, a criminal will be able to extract services from crooked civil servants, who demand bribes for every service. But the biggest obstacle to a clean polity are the families who are in control of political parties through a system of patronage and extreme sycophancy. Power passes down succeeding generations, without any test of competence. It started with the Congress reverence for the Nehru-Gandhi family and spread to other parties. Dynasty politics is not restricted to India but voters in the US recently rejected both Jeb Bush and Hillary Clinton. Civil liberties depend on the legal and judicial system which is deliberately slow, so as to allow criminals to bribe or threaten witnesses into denying any knowledge of the crime. Functioning of our government is dictated by the need to win elections. Since the poor are in the majority they are bought with various tricks. The Congress used farmers' loan waiver, Nitish Kumar promised complete prohibition of alcohol while Modi resorted to demonetization, apparently to distribute black money among the poor. Cass R Sunstein cites Friedrich Hayek who wrote that the government must be tied to rules or else people suffer. At least an independent candidate in UP is honest. He said that he wants to win to make money. Don't they all?

It should be known as the Fiscal Irresponsibility Committee.

The government must address some moral imperatives in the coming budget, writes Rajrishi Singhal. India has signed up to the UN's Sustainable Development Goals, two of which are "Build resilient infrastructure, promote sustainable industrialization and foster innovation," and "Promote inclusive and sustainable economic growth, employment and decent work for all." To build great infrastructure and industries to provide jobs with decent wages will cost a lot of money and that can only come from high rates of economic growth. How to stimulate growth? "There are two ways to revive growth: either through consumption or through investment," writes Singhal. The government could try to increase consumption by reducing taxes but credit rating agencies would take a jaundiced view of rising fiscal deficit. India's credit rating is just above junk status, though stable in outlook. In the absence of consumption private sector will not invest so the government should increase capital expenditure. A recent survey found that Indian employers are most pessimistic about the effect of digitisation on employment. A World Bank report predicts that India will lose 69% of jobs due to automation and artificial intelligence. The report also suggests that China's one child policy improved nutrition of children, while 38.7% of children in India are stunted, which means that they will be unlikely to attain the desired level of education. Ajit Ranade suggests that tenant farmers should be given loans by the government, even though they have no assets. Apparently, such a scheme already exists in Andhra Pradesh. This is totally absurd because Ranade should know that this loan will never be repaid and what he is suggesting is really another handout. The Congress is promising a loan waiver in UP worth Rs 490 billion while the Akali Dal is promising a waiver of Rs 570 billion for its farmers. Punjab is already bankrupt. The budget for MGNREGA was Rs 385 billion this fiscal, the total spending since it was started must be around Rs 4 trillion. What is alarming is that the Fiscal Responsibility and Budget Management Committee has recommended that the government may exceed the fiscal deficit target of 3% this year. This is because the debt to GDP ratio is lower than before. When the government keeps borrowing in excess of 20% of its expenditure what magic keeps its debt ratio so low. It is inflation. Politicians force the Reserve Bank to lower interest rate. This reduces the rate of interest it has to pay on its borrowing and the resulting high inflation reduces the debt:GDP ratio. We get less interest on our savings, spend more on essentials and transfer our money to the government. Monika Halan cautions against a high fiscal deficit. There is only one answer. Reduce population, give handouts to those with no children. Will they do it? No. Increase the vote bank, to hell with the nation.

Should the US accept globalization with 'Chinese characteristics'?

Just as Bill Clinton reset trade policy with Japan, a quarter of a century ago, so Donald Trump is beginning to reset trade policy with China, writes V Anantha Nageswaran. In 1973, one dollar equaled 360 yen, by April 1995, the yen had strengthened to 79 to the dollar. "Japan was battling a recession, an enfeebled banking system stuck with a mountain of bad debt from collapsed real-estate and stock-market bubbles and several other economic woes. To offset the domestic economic stress, the country needed a weak currency. The US worked hard to ensure a different outcome for Japan. I do not recall 'Liberal' commentators despairing at the American treatment of democratic Japan," he writes. Japan's woes started with the Plaza Accord in 1985, by Ronald Reagan, when Japan was forced to accept a devaluation of the dollar relative to the yen. Liberals are enraged that Trump is accusing China of 'currency manipulation'. "Now, suddenly, China is the champion of global integration, President Xi Jinping is the only adult in the room and he is the darling of the Davos crowd," writes Nageswaran. Doing business in China is very difficult as its laws are vague and vary between local governments. Counterfeiting is very big business in China and western companies lose billions of dollars every year. Why then do they want to protect China? Probably because 1.36 billion people with a $10 trillion dollar economy gives it a lot of buying power. Goldman Sachs estimates that overall credit growth in China was 20% in 2016 and effective fiscal deficit was in excess of 6%. The government is battling to stop flight of currency abroad as citizens try to protect their wealth against a falling currency. The central bank apparently spent near $1 trillion last year in trying to protect the renminbi, which devalued 8% last year. Just a few months back the renminbi was included in the basket of currencies that constitute the Special Drawing Rights of the IMF, which means that the currency should be freely tradable. If that happened currency flight could become a torrent, leading to a precipitous fall in the value of the renminbi. That would give Trump a reason to declare China a currency manipulator and impose punitive taxes on its products. That is why Xi Jinping landed up at the World Economic Forum jamboree in Davos, the first time a Chinese president has attended a Davos conference. Capital controls mean that foreign companies find it difficult to repatriate their profits back home and China protects its industries with opaque laws so that foreign companies, like Google and Uber, cannot do business there. Globalization with 'Chinese characteristics' is a fake. It is time someone called their bluff.

How can you have digital cars, or even toothpaste?

India should "Leapfrog Beyond Manufacturing" to digital services, write Jayant Sinha and Arindam Bhattacharya. Jayant Sinha is Minister of Civil Aviation, having qualified from IIT Delhi and Harvard Business School. Arindam Bhattacharya is Managing Director of the Boston Consulting Group in Gurgaon, having qualified from IIT Kharagpur and IIM Ahmedabad. To become middle-income country with a per capita income of $12,000 we must grow at 7-8% per year for the next 3 decades. That will be almost impossible. So what is the answer? "All large countries have followed the twin strategies of (1) manufacturing growth and jobs, and (2) merchandise exports which typically added 1-2% to GDP growth," they write. "We differ from this consensus and believe that India must proceed on a different development journey, which accounts for different global circumstances and leverages India's strengths." They give the example of Uber which has created more jobs than all car rental companies put together. So should all of us become taxi drivers? Manufacturing industries are shifting to Internet of Things so we should forget about manufacturing and shift to providing digital services. They seem to forget that India has 1.30 billion people, 84 million children do not attend school, and of those that do, learning levels are very poor. Apparently, 900 million Indians cannot access the internet, although with people changing over to smart phones that number could decrease rapidly. As we change over to digital technology we will be open to hacking, not just by criminals, but by intelligence services of hostile neighbors, of which India has plenty. Prof Tyler Cowen blows the myth of economic miracles. He cites the example of Denmark, which has been growing at around 1.9% for over 100 years and has a per capita income of $52,000. Even if all of us became taxi drivers, someone has to produce cars. And bricks and cement to build houses, toothpaste and soap to clean ourselves, and clothes and shoes to protect us from the weather. Prof Ricardo Hausmann wrote that if we are to buy all these products we have to sell something in return and such trade is essential for innovation and productivity. While Donald Trump is forcing US companies to manufacture in the US we are looking to go beyond. Who will give us the money to buy all the products that we need for daily living? The world is suffering from technological stagnation. Airplanes go no faster, air conditioners have the same type of compressors and household goods are much the same as before. Connecting them digitally is not going to make them work better. All doctors are taught to follow the principle of 'Do No Harm'. The authors should be wary.

Getting elected should have been the beginning, not the end.

"Was Obama a Transformational President?" asks Professor David Greenberg, writing in Politico, which has been an ardent admirer of Barack Obama. What is a 'transformational' leader? "In contrast to 'transactional' leaders, who serve their constituents' interests as best as they can in exchange for political support (and leave the constituents essentially unchanged), transformational leaders bring their constituents aboard a moral or spiritual project, revising in some fundamental sense who they are," writes Greenberg. In the way that FDR, LBJ, Ronald Reagan or even Bill Clinton did. LBJ was from Texas, a racist who openly addressed blacks as 'niggers', who got Congress to pass the Civil Rights Act of 1964, smashed Jim Crow laws of the South, and tackled poverty by starting Medicare and Medicaid programs, which are in effect to this day. Greenberg finds similarities between Clinton and Obama, both Democrats, struggling with a hostile Congress, but the difference was foreign policy. " Where Obama broke from the Clinton script was in foreign policy, and not, alas, for the better," writes Greenberg. For those of us who live outside the US his foreign policy was a disaster. He used drones in thousands of extrajudicial killings. In 2014 the government admitted in a court filing that 469,000 people had been included in a database of "known or suspected terrorists", which means they were all fair game. Chilling. The newly created state of South Sudan is locked in civil war. Obama confessed that the aftermath in Libya was the "worst mistake" of his presidency, but insisted that it had been "the right thing to do". It is shocking that he learnt nothing from the disaster in Iraq consequent to the removal of Saddam Hussein. If this was a 'cerebral president' give us Donald Trump any day. At least we know what we are getting. If we don't he will let us know on Twitter. The Iran deal is suspect in many people's eyes as it allows Iran to certify its own program. If Iran is not making nuclear bombs why is it guarding its Fordow enrichment facility with S-330 anti-aircraft missiles, bought from Russia? Obama's classification of 'good terrorists' and 'bad terrorists' is plain stupid and his support for the rebels in Syria not only prolonged the civil war but resulted in the deaths of 300,000 people, and a flood of refugees into Europe, which could mean Angela Merkel losing in German elections and Marine LePen becoming the President of France. For all his talk he could not resist the temptation of 'regime change', engineering an armed coup in Ukraine, which prompted Putin to annex Crimea and a de facto division of the country. The world has become much more dangerous during his tenure. "To this day, the very fact of getting elected remains Barack Obama's greatest achievement," writes Greenberg. Exactly. The first black president. And maybe the last.

FRBM or no FRBM, that is the question.

Sajjid Z Chinoy, Chief India Economist at JP Morgan, cautions against a fiscal stimulus in the coming budget. The reason for his caution is that demand is going to pick up sharply as new notes replace the old ones. The effect of a fiscal stimulus will take a few months to kick in by which time demand will be rising anyway, which will be inflationary. Demonetization has hurt small and medium industries, which operate on cash, so supply will not pick up with demand. The gap could be filled by increased imports from China, since the rupee has appreciated by 10% against the Chinese yuan. That would increase our trade and current account deficits. However, a big unknown is what effect Donald Trump's economic policies will have. If the US erects barriers to free trade the dollar will become stronger and foreign funds will sell out Indian stocks and bonds. As this money is repatriated to the US the rupee will fall even lower. At the same time, the consolidated deficit of the states has gone up from 2.2% of GDP in 2014 to 2.9% in 2015 and is expected to be 3.3% in 2016. "...to completely abandon fiscal consolidation next year -- as some in the market are advocating -- will dent credibility, trigger a tightening of financial conditions and, therefore, neither be efficacious nor optimal," writes Chinoy. Professor Sudipto Mundle comes to an exactly opposite conclusion from his analysis of the same data. The real GDP growth in the present financial year could be 6.8%, or even as low as 6.1%, but the budget cannot take this into account because it has been brought one month forward, which is 2 months before the end of the financial year on 31 March. Housing sales have fallen by 44% in 8 largest cities, automobile sales are the lowest in 16 years, revenues of small and medium industries have dropped 50% and jobs by 35% and demand for relief under the MGNREGA has increased by 20%. So, "....if the fiscal deficit target of 3.5% for 2016-17 is breached and the 3% FRBM target for 2017-18 is eased in the forthcoming budget, this would not be a bad thing," writes Mundle. FRBM stands for the Fiscal Responsibility and Budget Management Act which was passed in 2003 to stop irresponsible spending by governments. This was blatantly ignored by the Congress, resulting in double digit inflation, a collapse of the rupee and a fall in GDP growth. Since the FRBM Act was passed by the previous BJP government it would be ironic indeed if the present BJP government breaks it. India has benefited hugely from globalization, if not as much as China, while the US and the European Union have seen their share of the world GDP shrink. If the US puts up trade barriers our growth could fall sharply. No jobs and no money, it will be tough.

What use is a right when the supply is broke,

The Annual Status of Education Report, or ASER, makes for very dismal reading. In 2016, only 47.8% of students of Class V in India were able to read a Class II textbook. Standards vary wildly between states, from 70.7% in Manipur to 25.5% in Arunachal Pradesh. Both are northeastern states so why such difference in standards? Class VIII students able to do simple division varied from 78.6% in Manipur to a low of 28.1% in Chhattisgarh. The only good figure was that 97% of students are enrolled in schools. On the other hand a government census in 2011 showed that 840 million children do not attend school at all and 7.8 million have to earn a living, even as they attend school. Sadly the BIMARU states of Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh have some of the worst figures. In UP only 7.2% of Class III students can read Class II text and a pathetic 7.9% could subtract a two-digit sum. Despite such dire figures it seems that MP is even worse. Poor children. Bihar and UP have the highest fertility rates in India. Educated women, even those who are just about able to read, have fewer children so illiteracy is a cause of high fertility. On the other hand, parents with a large number of children are unable to feed them, so send them out to work. Those who do attend school learn little as teachers in government schools are burdened with other tasks, such as census duty, election duty, Aadhar card registration, opening bank accounts and supervising midday meals. Mark Tully found that even poor rural folk preferred to send their children to private schools rather than government ones because of the difference in teaching standards. Sadly, cynical politicians do not hesitate to use little children to create a class divide, so as to get votes. The Congress passed the Right to Education Act, which forces independent private schools to reserve 25% of seats for children of poor people. This acted as a sly tax on the middle-class as school fees soared. Unfortunately, a lot of teaching is done at home and children of illiterate parents would be at a disadvantage. To prevent these children from failing in exams the Congress stopped all exams in schools. In the absence of exams teachers had no incentive to teach and since no one could judge whether children were learning anything at all in lower classes the failure rate at higher levels were shocking. Even a simply talking to babies results in permanent changes in the way the brain handles languages. No wonder then that cheating in exams is not seen as anything wrong. With Artificial Intelligence poised to take over 70% of jobs education of a high standard is absolutely essential. But, it is a game for politicians. To win votes.

Give them an incentive and people will pay, happily.

Milind Murugkar has written an article, in which he says that Prime Minister Narendra Modi got the idea of banning high denomination notes, known as demonetization, from a NGO, called Arthakranti, founded by one Anil Bokil. 'Artha' means 'money' and 'kranti' means 'revolution' or 'trying to proceed by subjugating others'. According to Arthakranti the only way to get rid of black money is to get rid of all notes. If every transaction has to pass through banks people will not be able to hide their incomes, and so will be forced to pay their share of income tax. Arthakranti also recommends replacing direct taxes with an indirect tax of 2% on every transaction. However, such tax will have a cascading effect on everything we buy and will be the exact opposite of the Goods and Services Tax, or GST, which the government is trying to bring in. "A government enjoying a majority support feels emboldened to disregard the advice of experts and plays with radical ideas, ignoring their long term impact. We have seen the consequences of such foolhardiness with the demonetization decision. It is a catastrophe," writes Murugkar, advising against acting without a rigorous study. It is a universal belief in India that most people avoid paying income tax. Income tax is easy to collect from salaried people, but only 20% of bread-winners are in salaried jobs. Of these, 16% are Grade IV employees, such as peons and sweepers, 1% are clerical staff and 3% are officers. Even among these lucky individuals up to 71% do not have written contract, which means they may not be working regularly. Why does the government need to raise taxes? Because 30% of the population lives below the poverty line and would suffer without government handouts. There are more than 1,000 schemes to support the poor so some are recommending a Universal Basic Income scheme. This will be easy to implement as everyone is paid the same amount and there will be no leakage as it will go straight into bank accounts. However, it will be too costly if given to every citizen so some selection of who deserves to be paid is inevitable. No one likes to pay taxes, especially in the US, but taxes are necessary to pay soldiers, police and firemen who are essential for our security. Income tax rate in India is less than that in the US and much lower compared to Sweden, Denmark or Germany. Why do Indians avoid paying tax? Because no one thinks that politicians pay their fair share and paying for their luxuries is infuriating. The most important reason for not paying income tax is that we receive nothing in return. Instead of treating us as thieves the government could allow people to pay as much as they can. Of that government will deduct, say 20%, as tax and treat the rest as investment in health insurance and old age pension. The more you pay the more you get. People will pay as much as they can, for themselves and also for family. Make it an investment. 

Will Trump be a disaster, as everyone says?

He could be the best president, he could be the worst president, depending on whether his policies work, whether he has the courage to push all his policies through, and on how much opposition he gets from his own party, the Republicans, in Congress. Donald Trump will be sworn in as the 45th President of the US today and many of the senior positions in his cabinet are as inexperienced in government as he is. The Republicans have a majority of 241-194 in the House of Representatives and a 52-48 majority in the Senate. This should make it easy for him to get his legislation passed by the Congress but the problem is that many in his party hate him, whether for personal reasons or because his policies will hurt their campaign contributors we do not know. While building a wall on the border with Mexico will not affect us in India Trump's views on H1B visas will affect our IT firms directly. Some of the larger companies are already hiring Americans to serve customers in the US. Will it be such a bad thing? It might reduce the number of Indians working as cyber coolies but, Americans being better trained, may help these companies move up the value chain and a stronger dollar may increase profits. However, Trump's views on trade have caused the greatest heartburn. Trump has promised to renegotiate the North American Free Trade Agreement, or Nafta, which has angered Prof Ricardo Hausmann, who argued that productivity gains from Nafta created 333,000 jobs in the US. During campaigning Trump proposed a 45% tax on goods imported from China. Experts are almost unanimous that it will cause a great deal of harm to the US because China will immediately impose tariffs on US goods and inflation in the US will rise. Speaking at the World Economic Forum annual jamboree at Davos, China's President, Xi Jinping warned of the dangers of protectionism. The irony of a brutal communist dictator, lecturing a roomful of rampant capitalists about free trade, is delicious. But is Trump such a lunatic as every expert is making him out to be? Levying a duty on Chinese imports will surely increase inflation rate but that is what the Federal Reserve has been trying to do since 2008, with near zero interest rate at first and then quantitative easing. A strong dollar will reduce some of the cost. If the Chinese economy slows down commodities will become cheaper, but energy costs for the US will be kept under control by shale oil and a strong dollar. Ruchir Sharma writes that economic growth is directly linked to population growth, so a strong growth in the US is impossible because of falling fertility rate. Maybe not. Future manufacturing is going to be highly automated and US companies are loaded with cash. Low running costs, along with cheap energy and no taxes on exports could be a real stimulus. As for India, our choices are simple, but stark. With a huge and exploding population there is no land. Maybe Trump will show the way.

We are completely exposed. Hackers have nothing to boast about.

Writing for Bloomberg, Leonid Bershidsky finds that hacking seems to have become a public sport, which is bad. While the world was fixated on the hacking of emails of the Democratic National Committee, by someone calling himself Guccifer 2.0, no one noticed that another group calling itself Shadow Brokers were boasting of acquiring a huge cache of malware, by hacking into another group of hackers, they called the Equation Group. The malware obtained from the Equation Group was targeting Iran, Russia, Pakistan, India, Afghanistan and China. This led to the conclusion that the Equation Group is none other than the National Security Agency, which was tapping into phone calls of heads of state of friendly nations, such as Germany, for decades. What goes round, comes round. Shadow Brokers announced that they were 'going dark' after failing to attract any buyers for their material. On the same day Guccifer 2.0 reappeared, denying that he had any connections to Russia and accusing US intelligence of fabricating evidence. While Russians like to disguise themselves the US is open with its accusations. "The tools that have been revealed and analysed so far are meant for intelligence gathering and disrupting critical infrastructure," writes Bershidsky. "Now that knowledge is in the open, used for threats and innuendo-filled media reports. This is no longer cyber espionage, it's a publicity war." Since this is a new type of warfare its rules have to be written. Couple of weeks back Pakistani hackers defaced the National Security Guard website. The NSG is an elite anti-terrorist unit whose training is so tough that up to 70% of recruits are forced to drop out. Israelis are experts in hacking into any smartphone that exists. A US company, calling itself NSO, has its offices in Israel and was apparently responsible for creating the Stuxnet virus that disrupted Iranian centrifuges, enriching uranium. An Israeli company, called Cellebrite, sells its services to police forces around the world, to break into phones used by criminals. They claim to be able to break into any phone that exists. If the US is unable to protect its servers, what hope has India got? Turns out, not much. In October, 3.2 million ATM machines were hacked. A hacker group, Legion, claimed responsibility and said that our banks' security is deeply flawed. Another group, Suckfly, has targeted government systems. The Scorpene submarine systems were hacked. Firewalls are expensive so banks and government agencies are not going to update them. The government is forcing us to link our biometric Aadhar details to our bank accounts. As identity theft is the commonest form of cyber crime anyone will be able to steal our details from banks. Terrorists will use stolen identities and government goons will persecute innocent citizens. They should use identities of politicians.

Are Indians the most amused people in the world?

India is a loincloth economy where everyone, except politicians and civil servants, is expected to live in loincloths, because of the example set by the Father of the Nation, MK Gandhi. Our leaders are proud that the Hunger Index for India has dropped from 46.4 in 1992 to 28.5 in 2016. We are above Pakistan and Zambia but below Bangladesh, Laos, Mali and Guinea. Naturally our leaders work tirelessly round the clock to serve the numerous poor who vote them back to power, in their gratitude. The recent demonetization of high value notes was solely for the benefit of the poor, who cheered to the rafters because it was perceived to be hurting the rich by delegitimizing their black money, even though Frank Holmes wrote in the Forbes that it reduces our freedom and Pronab Sen wrote that it will damage the economy, perhaps permanently. All this service for the poor needs a lot of money. One way of getting money is to borrow from the market. This year the government set a target Rs 4.2 trillion. This leads to fiscal deficit, which means that the government spends more than it raises in taxes. At 6.70% our deficit is less than that of Saudi Arabia, Brazil and Argentina but more than other emerging market nations. At 28.1% of GDP the government expenditure is less than that of China and Vietnam but higher than other countries so, naturally, at 68.5% of GDP our debt is the highest in the region. For some reason revenue calculation is done in Purchasing Power Parity against the dollar. Why that is relevant when most of the debt is in Indian rupees is difficult to understand. Expenditure is only going to increase as politicians keep increasing handouts in a bid to bribe the poor but the government is committed to keeping the fiscal deficit below 3.5%. According to Professor Himanshu of JNU in Delhi, the government does not publish relevant figures on expenditure and tax data, so the figure for economic growth is a bit of flimflam. The other way of financing expenditure is to raise taxes. That is where the annual circus, The Budget, comes in. Everyone begs for lower taxes. The Finance Minister must feel like a God, floating high above us, throwing manna down to the begging populace. Naushad Forbes, President of the Confederation of Indian Industry writes about how more investment is required to create more jobs and then begs for lower corporate tax at 18%. We the people are begging for a reduction in personal income tax because an income of Rs 250,000 is totally inadequate for survival. The auto industry is begging for some help, while real estate fellows beg for 'tax incentives'. Meanwhile, the GST will probably be a nightmare for companies, with multiple rates and horrendous paperwork, while Andy Mukherjee, writing for Bloomberg, is incensed by a presumed tax on sale of Indian assets by foreign investment funds. Aren't we lucky to have a bunch of jokers keeping us amused?

Rejection is so painful to bear.

Professor WPS Sidhu discusses two reports published recently: 'The Global Risks Report 2017, published by the World Economic Forum and the 'Global Trends: Paradox of Progress', published by the US National Intelligence Council. Global Trends is more pessimistic, and even predicts a nuclear war between India and Pakistan in 2028. Anything is possible, but it is perhaps more possible that Pakistan will descend into civil war or break apart before then. With the economy faltering the government is allowing China to build an economic corridor from Kashgar in Xinjiang Province to the Gwadar Port in Balochistan. This will hand over vast tracts of land to the Chinese. Balochistan is rich in natural resources which are being looted by the government. The Baloch have been fighting for independence from Pakistan which has been ruthlessly put down by eliminating suspected separatists. The army is raising a special unit to guard the Chinese workers along the Corridor. Both the reports talk about rising disparity in income and wealth, about rising polarization of societies and the rapidly growing use of disruptive technologies. Both reports agree that there is a problem with democracy and that "democracy can no longer be taken for granted". Those who are mourning the end of liberal democracy fail to acknowledge that the problems of the world today are precisely because of such policies. Clearing Zuccotti Park, of Occupy Wall Street protesters, in a night time raid was easy but a price had to be paid in the victory of Donald Trump. What were they protesting against? They were angry because the fortunes of the top 1% increased after the financial crash of 2008, while ordinary people were losing their homes to foreclosures. Today, just 8 billionaires have as much wealth as the poorest 3.6 billion people in the world. The richest 1% in India own 58% of the total wealth of the nation. How has this happened? Globalization allowed multinationals to transfer manufacturing to poorest corners of the world. Avoid taxes by taking advantage of tax policies of different countries, which allows fat bonuses for the executives. Import of cheap goods keeps inflation low, allowing central banks to keep interest rates at low levels. This allows the rich to borrow cheap money. The total debt of the world has reached $152 trillion, 225% of the total GDP of the world. The rich buy up assets by borrowing cheaply, which makes them richer. As for democracy, it has long lost its Greek meaning of 'rule by the common people'. It has come to mean an election every few years where people have the opportunity of electing opposing sets of villains. That is why Trump's slogan of "drain the swamp" has resounded with Americans. If only he would get rid of the bunch of criminals who have grabbed power in India. It is hard to accept rejection. We understand. 

Old Chinese proverbs may not suffice, we need some new ones.

Although no such saying apparently exists in the Chinese language, those who are not Chinese think that "May you live in interesting times" is an old Chinese curse. An authentic Chinese proverb says,"Better to be a dog in a peaceful time. than to be a human in a chaotic (warring) period." Both the proverbs may come true for China in the coming months. China is to seal its border with Pakistan to prevent terrorists sneaking into the Xinjiang region, the home of the Muslim Uighur people. At the same time, China protects terrorists in Pakistan who mount attacks against India. It is diverting the waters of the Brahmaputra River by building dams on its tributaries. Barring a catastrophic event, Donald Trump will be sworn in as the 45th President of the US on Friday. Trump has repeatedly said that he is not willing to accept the huge US trade deficit, which is nearly $800 billion per year. The trade deficit with China was nearly half that amount, at $367 billion in 2015. Trump has promised to impose a tax of 45% on Chinese imports. China has threatened to hit back by stopping US imports but it has much more to lose. Writing in Forbes, Gordon G Chang says that Xi Jinping is at the World Economic Forum at Davos, where he will be asking for greater investment in China, but he will have some convincing to do because he has been penalising foreign businesses to give unfair advantage to local ones. After Trump accepted a phone call from Taiwan's President, Tsai Ing-Wen, China reacted sharply, reminding Trump that there can be no change in 'One China Policy', under which Taiwan is supposed to be a province of China. Why China thinks that it can threaten every country in the world is a mystery. India has been kept weak by its politicians but not the US. MIT Professor, Yasheng Huang writes,"There is no method to Trump's madness." "Trump is antagonizing China for no good reason. Worse, by announcing that the US will withdraw from the Trans-Pacific Partnership (TPP) -- designed, at least in part, to shape global trade and investment flows, according to Western rules, rather than China's mercantilist vision -- Trump is also abandoning a US policy that could have checked China's surging influence in Asia," he writes. Really? Almost all Asian countries, except the rogue states of North Korea and Pakistan, will be glad to see a complete breakdown of China. China's economy is suspect. China's debt burden has reached 250% of GDP, much of it corporate debt. Corporate taxes are very high in China and profits of some companies are less than 2%, writes Zhang Jun. Wonder if there is an old Chinese proverb about getting bitten if you play with venomous snakes. 

The budget has been brought forward. To entertain us?

The annual circus, called the Union Budget, has been brought forward by one month to 1 February. Which means it is just before assembly elections in 5 states, starting with Punjab and Goa on 4 February. Naturally, opposition parties see this as a cunning trick by the BJP to get some free airtime and a sly way of announcing handouts, to bribe voters. In 2013, the Supreme Court asked the Election Commission to frame a model code of conduct for political parties saying,"Freebies shake the root of free and fair elections to a large degree." The Model Code of Conduct of the Election Commission clearly states that,"All parties and candidates shall avoid scrupulously all activities which are 'corrupt practices' and offences under the election law, such as bribing of voters, intimidation of voters...." Following all this the Aam Aadmi Party won assembly election in Delhi in 2015 by promising 20,000 liters of water and 400 units of electricity free. Opposition parties went to the Supreme Court, seeking postponement of the budget till after the elections but the Court refused to hear the petition saying,"There is no urgency in it." We can only hope that the matter is heard before the budget has been read, and not after. Half of the budget, which gives last year's figures for government spending, revenue collection and fiscal and  current account deficit, is useful but the other half, which announces anticipated figures for the next year, is complete fantasy. The Finance Ministry cannot possibly have any idea what the price of oil will be, depends on what OPEC does, what the exchange rate of the rupee against the dollar, which determines the price of fuel and gold in India, will be or how our exports, little as they are, will fare, depending on monetary policies of central banks of other countries and on changes in visa rules, such as the H1B visas in the US. The natural tendency is to correct revenue collection on the higher side and so taxes are increased every year. Then, there is the Prime Minister who, in an effort to win the elections by neutralising black money of other parties, suddenly banned all high denomination notes in the country. When it was tried in Myanmar it led to severe inflation while the USSR may have broken up when it was imposed there. Retail inflation fell to 3.63% in November, because of a sharp drop in food prices, and the Finance Minister boasted of excess tax collection, based on very high excise duty on fuel. Excess direct tax is collected in advance and we have to file for refund. Last year there were claims for refund of over Rs 1.5 trillion. Those who forget to file for refund, due to old age or lack of knowledge, lose their money. Thus, the budget is really a con trick on the nation and should be restricted to a profit and loss account for the previous year. Just tell us how much more we have to pay in taxes and cut out the blather. Save us the headache.

Does democracy need permission of others?

Noah Feldman, a professor at Harvard, writes that India's Supreme Court indirectly helped Hindus in a recent ruling which held that any reference to religion or caste will disqualify an election result. An earlier judgement held that Hinduism is not a religion but a way of life. "Thus Muslim candidates can't invoke their creed to win votes, but Hindu candidates can," writes Feldman. Seems that Feldman has little knowledge of Indian society. Hindu and Muslim names are distinct, Muslims often dress differently to deliberately differentiate themselves, and there is no restriction in being seen alongside a priest or a Mullah. The Founding Fathers may have stated clearly that the US is not founded on Christianity but would Hussein Obama have any hope of being elected president had he not converted to Christianity in childhood? "In effect, secularism and Hinduism are treated as identical," objects Feldman. Is it wrong? Hindus not only have millions of gods, but goddesses as well, which infuriates Muslims, since they see women as inferior to men. Each god has been assigned an animal, which makes all animals sacred. Even plants are seen as living things, perhaps an early form of protection of environment. But most importantly, Hindus do not convert which means there is no need to conquer other faiths and force them to convert. Surely, this tolerance of every faith and living thing is secularism? Is everything great about Hindus? No. Caste has become more entrenched, as politicians have ruthlessly exploited caste and reservation for votes, and the explosion in population has resulted in conflict between humans and animals, as habitat has been destroyed for cultivation. If Feldman is trying to create friction between Hindus and Muslims perhaps he should be more worried about the US and Europe. On interrogation the 9/11 mastermind, Khalid Sheikh Mohammad told Dr James Mitchell that Muslims will triumph "through immigration and by outbreeding non-Muslims". "He said like-minded jihadi brothers would immigrate to Western democracies and to the United States, they would wrap themselves in our civil liberties for protection, they would support themselves in our welfare systems while they spread their jihadi message, and then, when the time was right, they would rise up and attack," said Mitchell. A report by the Pew Research Center said that Muslims will outnumber Christians by 2070. A Clash of Civilizations has already been predicted and there are conflicts in almost all Western countries, which are being masked by political correctness. After all, there is a long history of such conflicts with copious amounts of bloodshed. Perhaps, Feldman is trying to divert attention to India. Futile.

People can only change politicians. Not economists.

Writing for Bloomberg, Noah Smith despairs about rational economic policy under Donald Trump. "There is a broad consensus that the kind of policies that our president-elect has proposed are among policies that will not work," said Joseph Stiglitz at the annual conference of the American Economic Association. Stiglitz is a Nobel laureate so we are entitled to ask him why economic policies did not prevent the Great Recession of 2008. Smith fears that Trump will not listen to the science of economics. Trouble is that economists do not agree with each other. What is "technocracy" to Smith is derided as "mathiness" by Paul Romer. Trump has picked Peter Navarro as Trade Secretary. "He picked Navarro because Navarro's ideas on trade -- basically, that China is screwing the US -- align closely with what Trump already believed," writes Smith. Is he wrong? The US had a trade deficit of a record $343 billion with China in 2015, imports reached a record $483.9 billion, which is about 2.5% of the US GDP of $18 trillion. If some of these imports were manufactured in the US it would create thousands of precious jobs. Besides it is impossible to understand why economists do not accept that China exports disinflation to the US and, by keeping prices low, encouraged the famous Greenspan put, which was largely responsible for the subprime crisis. Smith feels that "....wise, expert leaders should steer policy for the good of all...". How can he say that when the gap between earnings of blacks and whites has increased to 1950s level? "The elite, supported by the vast majority of the economic profession, took the virtues of free trade as a given..." writes Smith. But, Dani Rodrik of Harvard does not agree on the virtues of free trade. Rodrik thinks that the death of the huge trade agreements with Asian countries and Europe, known as TPP and TTIP respectively, is a good thing. Avinash Persaud agrees that global trade lifted over a billion people out of poverty worldwide, but for every $1 earned by the poor the elite took a cut of 44 cents. In a scathing attack Paul Romer wrote,"For more than three decades, macroeconomics has gone backwards." Anantha Nageswaran cites figures to prove that financial markets are teetering on the edge of collapse. In an earlier article Smith himself wrote that monetary policies are not working and maybe it is time for unthinkable ideas, such as increasing interest rates to increase inflation. The rising gap in salaries between the top and bottom is fueling rage in ordinary workers. This was the rage tapped by Karl Marx, what the Germans call "Wutburgers", which means 'angry citizens', writes Jochen Bittner. Citizens cannot change professors, but they can and do change politicians. Professors have to adapt.

Why is the CIA taking orders from the Brits?

A former MI6 agent, which means British, was told by former FSB agents that Donald Trump paid prostitutes to perform sex acts inside the Presidential Suite at the Ritz-Carlton Hotel in Moscow and also in St Petersburg. The Russian government, read Vladimir Putin, has video and audio tapes of this 'kompromat', which means 'compromising material' in Russian spy lingo. The Brits passed it on to the CIA, who found it credible. It is possible for a rich man to pay for the services of women but the story sounds like something out of a C grade movie. Firstly, a hotel is not a top secret facility and all the staff would have known about it. So, it should be easy to verify. Secondly, it is the duty of the CIA to protect the US. This is deadly material, because it makes the future President of the USA vulnerable to blackmail by Russia. If the CIA had knowledge of this earlier why did they not reveal it during the primaries when Republicans would have had the chance to choose another candidate. Why now, just 8 days before the swearing in? Not just Democrats, even some Republicans are trying very hard to discredit Trump. People knew about Gennifer Flowers before election and voted for Bill Clinton anyway. Donald Trump did not just win the presidential election he inspired a huge down-ballot sweep for the Republicans. When Obama won in 2008, 28 state governors were Democrats, now 31 are Republicans. Democrats have lost 919 seats in state legislatures. Republicans now have 4,100 seats out of a total of 7,383, the most since the 1920s. It seems that whenever there is something dirty afoot the Brits are behind it. So what is their game? Trump has clearly stated his desire for better relations with Russia and recently said that those who opposed it are "stupid people" and "fools". The British have not recovered from the loss of their empire and cling on to their 'Special Relationship' with the US, as their only chance of strutting around on  the world stage. Brexit means that they have lost any influence in Europe so they are terrified of good relations between the US and Russia, which will make them totally irrelevant. The mystery is why the US has put up with this excrescence on its foreign policy. Margaret Thatcher forced George HW Bush into the first Gulf War in 1990 by saying,"Remember George, this is no time to go wobbly." Iraq is still suffering, while Iran has become extremely powerful for that stupidity. More recently, David Cameron got Obama to bomb Gaddafi. Libya is a mess today. Once political correctness wears out Obama will be judged on his record, which is terrible, especially in foreign policy. But why is such a large section of liberal elites so terrified of Trump? What have they got to lose? If Trump survives till 20 January he will be able to get his team in place. We will know after that.

When it comes to the economy, every action could have a worse opposite reaction.

"It's 690 seats this year; another 964 seats are up for grabs next year, with the general election to follow in 2019," writes Rajrishi Singhal, trying to explain the apparently ruthless actions of Prime Minister, Narendra Modi. He has taken all the Congress schemes, such as Aadhar, MGNREGA, Ghar nu Ghar, and forced them on the nation with scant regard for what damage he may be causing. Elections to assemblies of UP, Punjab, Goa, Uttarakhand and Manipur are to take place in the next 2 months, of which UP is the prize that he craves. Since elections are fought with cash, demonetization was planned to wrong-foot political opponents and the budget was brought forward by one month so as to be able to announce goodies for the poor, and maybe some cosmetic tax cuts for the middle class. "The World Bank's World Development Report 2015 -- titled "Mind, Society and Behavior" -- states clearly that penalties or incentives have failed to improve tax compliance across the world," writes Singhal. Human beings do not like being forced. As an admirer of China, Modi believes in a strong government and his slogan of "minimum government, maximum governance" was a red herring, believes Manas Chakravarty. Modi announced more sops in his New Year speech. Unfortunately, the Finance Minister will find it tough to give away too many goodies in the budget. According to the Central Statistics Office, growth in the first half of the financial year, up to the end of October, has been mainly due to government consumption. Demonetization started on 9 November so that has not been factored in. Government consumption was just 3.1% last year but will be 33.3% this year, private consumption will be 51.2%. Growth in all sectors are down, except in public administration, defence and other services, which are up. The Reserve Bank predicts that Gross Non Performing Assets, as bad loans are called, will rise from 9.1% in September 2016 to 9.8% in March 2017 to 12.9% in March 2018. Which means that public sector banks, which are owned by the government will need vast amounts of funds to comply with Basel III norms by 2020. Banks have lost money by not charging for ATM and debit card transactions till 31 December and are still not being allowed to charge for card purchase of petrol. Modi wants to bring the informal sector, which survives on cash, into the formal economy. The Goods and Services Tax would have done it anyway but Modi wants to make sure by taking away cash altogether. The problem could be that the informal economy thrives because it is cheap and because it serves the millions of poor who live on the margins. Since handouts are not going to make them middle class overnight the loss of jobs could be a hammer blow to the poor. Demonetization is going to cost in excess of Rs 1 trillion so that will have to be paid for in the budget. If Jaitley was an economist he would cry.

Are we really safe or is it post-truth?

China and Europe will do poorly in 2017 feels Financial Consultant Anantha Nageswaran. The yuan will fall further and growth in Europe will fall. A recession is almost definite in the US and the stock market is a bubble waiting to burst. He is predicting that the dollar will fall but others predict that it will get stronger. All this is moot until we get to know the economic policies of the Trump administration, after 20 January. Ajit Ranade foresees a "dollar winter" this year. Past episodes of strengthening of the dollar resulted in the Latin American crisis of 1979, the Japan crisis of 1985 and the East Asian crisis of 1997. If the Federal Reserve tightens interest rates and Trump gets US companies to repatriate funds they are holding overseas, so as not to pay tax in the US, the dollar will become very strong. Greater spending on infrastructure will increase deficit in the US and raise inflation, because of the tight labor market, leading to greater trade deficit with China. This will result in a boom, which will lead to a bust later on, writes Sanjeev Sanyal. There have been 12 boom-bust cycles in the US since the war. Special Economic Adviser to the Japanese Prime Minister, Koichi Hamada writes that large public debts are not always bad for the economy. "Excessive government debt can be highly damaging. In inflationary periods, high outstanding government liabilities impair fiscal policy, because higher taxes are needed to finance the same level of real government spending. Making matters worse, governments can be tempted to inflate their debts away -- a power that has been abused since the age of monarchs, resulting in uniform inflation tax on asset holders," writes Hamada. This is exactly what successive Indian governments have been doing. The government spends over Rs 2.5 trillion, or 12.66% of the budget, on subsidies. 21% of government spending is financed by borrowing, which is why taxes are so high in India and retail inflation is allowed to run at over 5%, to reduce government debt. The debt to GDP ratio for India has dropped from 90% in 2003-04 to 68.5% in 2013-14, this when the Congress was consistently running high fiscal deficit. The average retail inflation was 3.79% in 2004 and rose to above 6% after that, rising to 12.11% in 2010. However, this has not happened in Japan where the increased consumption tax is acting as a break despite enormous monetary stimulus. What will happen to our economy we do not know. If interest rate in the US and the dollar go up it will create an enormous stress on corporate debts of emerging market countries. Non-financial corporate debt has increased from $4 trillion in 2004 to over $18 trillion in 2014. Apparently, India will not be badly affected. With the severe contraction in money supply what happens to the rupee will be key. We fear the worst.

No one can be anti-poor in a loincloth economy.

The poor are the greatest elite in India. Every leader, starting with MK Gandhi, every political party, starting with the Congress, and every policy by every government, including VP Singh's infamous OBC reservation, works most diligently for the poor. So successful have we been that we have the largest number of poor people in the world, earning less than $1.90 per day, by Purchasing Power Parity. Naturally, being anti-poor is the worst crime any politician can commit. So, Rahul Gandhi has angrily accused Prime Minister, Modi for being anti-poor for banning high denomination notes. The BJP had been off the mark much earlier, branding Gandhi as anti-poor, accusing him of being born with a golden spoon, which is post-truth because he is living on Rs 900,000 borrowed from his mom. When in opposition the BJP denounced a ban of notes printed before 2005 as anti-poor. To prove that he is not anti-poor Modi has brought the annual budget forward by one month, which will release funds for the poor one month early. Naturally, the opposition has objected. They suspect, perhaps correctly, that it is an attempt to announce more handouts for the poor just before assembly elections in 5 states, including UP and Punjab. Logically, if they start spending early the funds will finish early, so the government can be accused of being anti-poor. To preempt that the BJP has said that accusing the government of being anti-poor is anti-poor. Demonetisation is going to cost the economy in excess of Rs 1 trillion in printing and transporting new notes, in man-hours wasted on standing in queues and in loss of business. The poor are happy because the government is mounting surgical strikes against all the anti-poor elements in Indian society. Farmers cannot pay their laborers so they cannot prepare their fields for the next season. Wholesale prices for vegetable have crashed, so farmers are losing money, while retail prices are still high, so the middlemen are making windfall profits. But there is MGNREGA to help the poor by providing dole for 100 days every year. It does help the poor but, by depriving factories of labor, it may drive automation, which will reduce employment in the long term. As farmers earn less for their produce they will reduce planting in the new season to raise prices by creating scarcity. Meanwhile, the informal sector, which avoids paying taxes, by operating in cash, will be forced into the open . Modi says it will increase tax collection which he can then distribute to the poor. The number of poor will increase even more, proving Modi is not anti-poor. MK Gandhi is the Father of the Nation. MK Gandhi dressed in loincloths. If everyone is in loincloth no one can be anti-poor. That is why ours is a loincloth economy.