Honorable Supreme Court.

The Supreme Court in the US is split 5:4 along political lines with conservatives in the majority. So partisan are the judges that Sandra Day O'Connor retired during the Bush presidency so that he could appoint another conservative in her place. Chief Justice William Rehnquist also died during the Bush years. Now within the past one week the Court has shown that it is not swayed by political considerations alone. First the Court struck down 3 parts of the Arizona Immigration Law saying that immigration is a federal matter therefore the state could not legislate on it. While upholding the right of police officers to check the immigration status of someone stopped for a separate offence, say speeding, the Court ruled that state officials cannot arrest someone without a warrant just because they have probable cause to believe that the person is an illegal immigrant. Then the Court upheld the Affordable Healthcare Act which is also known as Obamacare and is hated by conservatives, especially the part known as the " individual mandate " which seeks to penalize people for opting not to sign on for health insurance. Chief Justice John Roberts, appointed by Bush, voted with the 4 liberal judges to uphold the law causing fury among conservatives who see this as a betrayal. While President Obama, who used to teach law at Harvard, reasoned that a penalty is not a tax Justice Roberts ruled that the penalty is a tax and since the Congress is empowered to levy taxes the Act was legal. In 1961 President Kennedy passed Affirmative Action by executive order which made it illegal to discriminate on grounds of color or gender. This was meant to encourage positive action by universities and employers to give more opportunities to African Americans. Universities were operating a points system for admission where being black earned you extra points. This was seen as reverse discrimination by some and struck down by the Supreme Court in 2003 saying that while taking race as a factor for admission into college was allowed a strict point system was unconstitutional. Consider the Supreme Court in India which has repeatedly upheld the 50% " reservation " for lower caste people who can gain admission into prestigious colleges with much lower marks. This was justified by the specious argument that lower castes were treated badly by upper castes in the past so it was the turn of the upper castes to suffer. A sort of institutionalised revenge. But surely lower castes were not treated as badly as blacks in the US who were captured in Africa, transported in chains in holds of ships where many died due to suffocation and then sold to whites who treated them worse than animals. However, judges also need a sinecure after retirement. Justice Ahmadi, of Union Carbide fame, was Chairman of Bhopal Memorial Trust Hospital built for the victims of the gas poisoning and Justice Balakrishnan is Chairman of National Human Rights Commission. Ironic what?

Immunity for business bandits.

Politicians have usually been immune to prosecution for the crimes they commit but now business chiefs have been added to the list. The sub prime crisis was caused by large banks selling toxic mortgages to gullible people while secretly hedging against them. When the market collapsed banks were rescued by governments because " they were too big to fail " and the managers continued to receive massive bonuses. One of the reasons that the economy in Europe continues to ail is because banks are using the money given to them by governments to clear their own books instead of lending to businesses. In May JP Morgan Chase announced a loss of $2 billion on trades in its London branch where a trader, Bruno Iksil, known as The Whale, had been taking huge positions on corporate credit default swaps. He and the head of the chief investment office, Ina Drew have resigned but JP Morgan Chief Jamie Dimon just shrugged off the loss saying that the bank will still make a profit. He did, however, announce that he will forego his pension for this year. What a sacrifice! Indeed he has quite brazenly continued to argue for reduced regulations on banks since then. Today we learn that the loss could be anything between $6-9 billion. However, trading losses are for shareholders to worry about but in the last couple of days Barclays Bank in Britain has been fined 290 million pounds for fixing the London Inter Bank Offered Rate or LIBOR which is the rate at which banks lend to each other. This is also used to calculate mortgage costs for ordinary people and for companies to borrow from banks. Criminal investigations are going on against 20 banks in various countries but Barclays CEO, Bob Diamond has refused to resign. In 2001, the European Commission fined 8 drug companies a total of 855.2 million Euros for fixing the price of vitamins with Hoffman-La Roche fined 462 million and BASF 296 million. In 2008, LG Display Co, Chungwha Picture Tubes and Sharp Corp agreed to pay $585 million for fixing the price of liquid display panels in the US. In 2004, 4 executives of German chip maker, Infineon received reduced sentences of 4-6 months in prison in the US and were fined $250,000 each after agreeing to cooperate with authorities. Recently we saw Rupert Murdoch and his son James suffer a complete loss of memory in front of the Leveson inquiry into the phone hacking scandal which has been making headlines in Britain. Previous editor of the News of the World, Rebekah Brooks was visibly angry when arrested for perverting the course of justice. Seems that the immunity of politicians has been passed on to business chiefs probably because they pay for election expenses and effectively buy politicians. Perhaps a complete collapse will focus minds and get the crooks into jail.

Killing makes good TV.

BBC correspondent, Ian Pannell was reporting live when rebels hid an Improvised Explosive Device beside a road hoping to blow up any government tank that came along. Not only was he in Syria without a valid visa but he was witnessing an attack on the official army without informing authorities, thus being a party to the crime. What makes western white skins think that they can violate the sovereignty of any country and instigate violence with complete impunity? Surely that makes them legitimate targets for government forces. Yet, we saw widespread condemnation of Syrian forces when Marie Colvin of the Sunday Times and French photographer, Remi Ochlik were killed by a shell in Homs in February 2012. However, Britain and the US are not so sympathetic when the situation is reversed. On 23 April 1999 a NATO rocket demolished the Radio Television of Serbia building killing 16 employees and wounding many others. Survivors were trapped in the wreckage for days only able to communicate with rescuers through phones. On 13 November 2001 a US missile took out the Al Jazeera office in Kabul. No one died. On 8 April 2003 a US missile hit the electricity generator of Al Jazeera TV in Baghdad killing a reporter, Tareq Ayyoub and injuring another. The then British Home Secretary, David Blunkett says in his autobiography, "There wasn't a worry for me because I believed this was a war and in a war you wouldn't allow a broadcast to continue taking place." Which is a complete lie because Al Jazeera is based in Qatar, a country friendly to both the US and Britain, and had no link to Saddam Hussein's government nor has it any link to the Taliban in Afghanistan. And the war in question was not sanctioned by the UN Security Council and hence illegal. Indeed, if a leaked memo is to be believed George Bush and Tony Blair were discussing bombing Al Jazeera headquarters in Qatar on 16 April 2004 during Operation Vigilant Resolve on Fallujah which resulted in a massacre of civilians. During the Iraq war BBC and CNN journalists were " embedded " with US forces and kept their eyes deliberately shut when massacres were taking place. This explains the rage of the US government on Julian Assange who exposed how US helicopter pilots were laughing while hunting for Iraqis in Baghdad killing over a dozen innocent people including 2 Reuters journalists. While deaths in Syria are shown in every gory detail these propaganda channels are not so keen to report from Iraq. Just today a series of bomb blasts have killed 12 and wounded 40. At least 200 have been killed in Iraq since 13 June. Thousands of people have been killed by western interference but, hey, dead bodies covered in blood make very good pictures for television. White skins are united while colored ones are not. That makes us weak and easy meat.

India is Europe.

India is now in the proud position of being economically equal to Greece, Spain and Ireland. Greece was running a huge budget deficit, had an enormous bureaucracy with guaranteed benefits and most people do not pay tax. Last year India had a deficit of Rs 5.2 trillion which was 68% of government revenue of Rs 7.7 trillion. Including public sector companies and the Railways the government has 34.1 million employees whose salaries were increased by 80% in 2008, who get 75% of salary as Dearness Allowance, have good pensions, incredible opportunities for theft and bribes and such secure jobs that they are rarely sacked even when caught red handed. The RBI announced on 6 June that government bank employees earn 150% of private sector banks. " This is despite the fact that pension expenses of PSU banks are not fully reflected in their expenses," the RBI said. Spain and Ireland had huge property price bubbles which have left banks with such debts that they had to be rescued by the EU. Property prices in India increased by 1000% between 2002 and 2012. The market has not crashed because 50-60% of the cost of any property is paid with black money so people will starve themselves to avoid foreclosure. This black money and uncontrolled spending caused inflation to zoom, Consumer Price Index in May was 10.36%, and the rupee to fall by 30% which, in turn, further stoked inflation. The RBI raised rates 13 times without success. When yields on government bonds reached 7% Ireland capitulated and asked for help from the EU. Yields on Spanish debt is 6.8% which, the government says, is unsustainable. Yields on Indian government securities is in excess of 8%. So desperate is the government that the RBI has just allowed foreign investors to buy $20 billion in Gsecs, up from $10 billion. With a dollar buying Rs 57 today foreigners can invest in Gsecs, get 8% interest and convert back to dollars anytime the rupee strengthens for mouth watering profits. The hope is that if the rupee strengthens imports, such as oil, will become cheaper reducing inflation allowing the RBI to reduce interest rates. However, low interest rates only help those who have the means to borrow, which means the rich, and helps the rich to get richer while the poor have no collateral so remain where they are. To keep the poor in their place the micro finance industry has been decimated. While the government is helping foreigners to get rich it has decided to levy 12.36% service tax on remittances sent by Non Resident Indians. Since a lot of money comes from laborers working in inhuman conditions in Gulf countries it will hit them hard while the rich will send money by hawala thus increasing black money. Our most revered Finance Minster has been kicked upstairs to become President so that he can roam the world with family at taxpayer expense like the present one did. The World Famous Economist is in charge. Time to pray.

Education is the key.

The main reason why India continues to remain poor and undeveloped is the poor quality of higher education. The Congress and assorted idiots equate merit with elitism. Because lower castes were deprived of education hundreds of years ago 50% of seats are reserved for them in colleges. Naturally, they are unable to cope so there is a constant effort to lower standards so that they have the same degrees as deserving students. This is why salaries in IT companies are increasing by 25% every year so as to retain what talent they can discover out of the dross that passes out of colleges every year. In the first term of Congress Mr Ramadoss tried to destroy AIIMS and it was decided that since IITs have a good reputation 7 more new colleges will be opened with the IIT brand. Now Mr Sibal wants to change the entrance exam so that ordinary students can compete with intelligent ones. Nowhere is the lack of education so obvious as in architecture. Builders erect buildings to make black money so there is no time for aesthetics, beauty, conservation of energy or the use of light and space so that walking around is an enjoyable experience. While the rest of the world, including the much maligned sub-Saharan Africa, uses hollow bricks so to create cavity wall insulation and save on air conditioning we still continue to use solid bricks which get so hot during the day in summer that indoor temperatures remain near 40'C through the night. While Australia, Germany and China are researching into solar energy all you can buy in India are solar rice cookers or solar water heaters. In western states like Gujarat and Maharashtra going down to the south winters are so mild that all you need is a small water heater in the bathroom for a couple of minutes everyday. The months of April, May and June are extremely hot with blistering sunshine. What we need is air conditioning run by solar power. Every house could have solar panels covering the entire roof which would keep the top floor cool. Electricity generated would run a compressor throughout the day and the cold air would be pumped throughout the house. Instead of a thermostat the compressor would have a timer to switch on and off so that it does not burn out by constant running. Every house should be colored white so as to reflect the sun. Even roads should be white instead of the traditional black. But for this to work houses have be redesigned so that walls are insulated. Seems that the price of solar panels have crashed by 80% and the government is thinking of producing 20,000 MW of electricity from the sun by 2020. TOI, 26 June. However if there is affordable air conditioning and better quality houses our energy savings would be colossal. But for that to happen we need high quality education for the meritorious and not legions of sheep each with a useless certificate but no knowledge.

Another 2008 will be disaster.

Maybe they sense an early election because there are a spate of articles full of lies and hate speech in the Congress supporting press. The strategy has 2 prongs. One is to abuse Hindus, ridicule our religion as Hindutva and praise so called " secular " politicians who would pass special laws for " minorities " even if they are against the constitution. The second prong is to praise all the social schemes started by the Congress in 2008 to win elections in 2009. One was the MNREGA scheme which pays poor people in villages Rs 162 per day for 100 days a year, for doing nothing. This scheme is praised for decreasing poverty in villages, boosting rural economy and increasing rural consumption thereby helping to increase sales of companies selling consumer goods. Sounds terrific. Only a mean, selfish person would grudge a little help for the poor. But the result has been terrible, not just for the poor, but for the whole economy. If people are paid for doing nothing naturally they would avoid work resulting in shortage of labor in villages resulting in food prices rising by over 10%. Since the poor spend most of their earning on food rising prices have hit them the hardest. A survey in Andhra, MP and Rajasthan in 2010-2011 showed that people claimed for just 45, 37 and 52, instead of 100, days of work under the scheme. TOI, 25 June. Which means either that the poor do not need the scheme or that states are not using money, given by the center, for the scheme. Also people were being paid Rs 94, 98 and 79 per day which means that local politicians and civil servants were pocketing rest of the cash. Government playing Robin Hood in robbing the middle class with extortionate taxes to throw money at the poor did not work for Communist countries and will not work for the Congress however much the freeloading press may lie. Besides the poor are also citizens of the country and should be treated with dignity and not converted into irresponsible beggars just to win votes. In 2008 the Congress increased salaries of useless, thieving civil servants by 80%. This meant that government school teachers are now earning Rs 30,000 a month as opposed to private school teachers who earn just Rs 15,000 a month on average. This colossal increase was not accompanied by any productivity agreement so these teachers continue to avoid teaching and poor people prefer to send their children to private schools. Hence the Right to Education Act which forces private schools to reserve 25% of seats for poor children for whom the government will pay an insufficient amount every month. Which means schools will have to employ someone full term who will be roaming around government offices begging for the money to be released and the middle class will have to pay higher fees. Another sly immoral tax. High inflation, falling growth, a diving rupee and falling credit rating, all because of 2008. Has the Congress learnt its lesson or is it determined to destroy the country to win the next elections?

Goldilocks was fairy tale.

According to S&P around 2 dozen India companies are expected to default on Foreign Currency Convertible Bonds this year. TOI, 23 June. These are bonds which give lenders the option of converting their money into shares on maturity and were issued when share prices were high and the rupee was strong. Now share prices are down so the bondholders are demanding their money back and the rupee is down some 25% so the cost of repayment has risen very high. About 80% of the bonds pay less than 2% interest and 60% are zero coupon bonds, which means they do not pay any interest at all, which means that if the companies borrow to repay the money their interest costs will rise significantly. The total amount to be repaid is $5 billion which will put further strain on the rupee. Foreign Direct Investment has dropped to $7.8 billion from January to April compared to $8.5 billion in 2011 and Foreign Institutional Investors have also been pulling funds out if India in recent weeks. The amazing thing is that these companies had made no provisions for redemption of the bonds believing that India will continue to grow forever. Why do Indian politicians, economists and businessmen think that we can keep growing infinitely? Commodities such as oil, coal and iron are finite and if all the countries in the world were to start growing prices would reach such high levels that no one would be able to afford them. The growth of just one country, China caused prices to rise all over the world leading to inflation. Brent crude was selling at $125 a barrel but is down to around $90 because of the prospect of global recession. The IMF is predicting a doubling of oil prices in a decade's time. When oil prices are high alternative sources such as shale or deep sea drilling become economical but if prices drop significantly companies will stop these activities causing a shortage which will again push prices higher. Only about 25% of the earth's surface is land, the rest being water, and of this only about 15% is arable. As economies grow people eat more and better food pushing prices higher. The poor end up starving. This is why economies go through cycles of boom and bust. Western leaders understand that growth in their countries is only possible at the expense of other countries. That is why they are refusing to make any concessions in the Doha round of trade talks at the WTO or in talks on environment. They are gambling that if conditions become so bad in poorer countries that large numbers of people are dying of starvation they will surrender in desperation. The only solution for India and other developing countries is to reduce population by 50 to 80%. That is why China enforced a one child policy which resulted in double digit growth. If there are no poor there will be no poverty. Sounds crude because it is true. Only fools believe in a Goldilocks economy.

Who is bluffing?

On 21 June a Syrian MIG fighter jet made an emergency landing at King Hussein air base in Jordan and the pilot, Colonel Hassan Merhi al-Hamade asked for asylum which was quickly granted by the Jordanian government. Syria said that it was on a training flight and branded al-Hamade a traitor which he is, just like Bradley Manning. On 22 June a Turkish F4 Phantom was shot down in the Mediterranean by Syrian air defense off the coast of Syria. Syria said that the plane was flying low and fast from the direction of northern Cyprus and was shot when just 1 km from the coast. The plane burst into flames and crashed into the sea 10 kms from the village of Omal-Tuyour in Latakia province. Turkish President Abdullah Gul said," These are not ill-intentioned things but happen beyond control due to the jet's speed." How was it possible for the pilots to come so far inside Syrian air space by mistake and why did the pilots ignore the warning that radar had locked onto it? Are Turkish pilots so poorly trained? Turkey is a member of NATO so the pilots should have been well trained. Recently Russia is said to have supplied new surface to air missiles to Syria so was this an attempt to check out their efficacy in case NATO decides to enforce a no fly zone over Syria like it did on Iraq and, recently, on Libya? Just after midnight on 6 September, 2007 Israeli jets bombed a suspected nuclear installation in the Deir ez-Zor region of Syria in, what was known as, Operation Orchard. Syria will not have forgotten that insult. We can only speculate but incidents such as this can easily lead to all out war. Meanwhile in Egypt another game of poker is going on between the military and the Muslim Brotherhood. Result of the presidential election held a week ago has not been declared because of allegations of cheating by both sides. However, the Brotherhood has declared that its candidate, Mohamed Morsi has won and has been holding demonstrations in Tahrir Square. Is this a bluff to intimidate the army into declaring Morsi a winner even if he has fewer votes than his opponent, Ahmed Shafik or is it a warning to the army to stop it from overturning a legitimate victory for Morsi? Rumors are that Shafik has won by getting 50.7% of votes cast, an extremely narrow victory. So, does the wafer thin margin of victory indicate a genuine result or is the army being extra cunning so as to avoid the charge of vote rigging? But if Shafik does win the Brotherhood may resort to violent protest which will give the army the excuse it needs to crack down on it. The 1 Coptic Christians, who are 10% of the population, will support the army as they fear an Islamic state and it will depend on the youth, who really started the protests against Mubarak, how much bloodshed there will be. Blood will be shed, the question is how much.

Is speech more free in Pakistan?

The media in Pakistan has been critical of the verdict by Supreme Court Chief Justice, Iftikhar Chaudhry making Yousaf Raza Gilani ineligible for the post of Prime Minister for contempt of court. This is because Mr Gilani refused to heed court orders to investigate corruption charges against President Asif Ali Zardari on the grounds that a president in office is immune from prosecution. Commentators in Pakistan alleged that this was to divert attention from claims by real estate tycoon, Malik Riaz Hussain that he had paid Rs 342 million to Arsalan Iftikhar, the son of the Chief Justice to influence cases in the Supreme court. TOI, June 21. The Express Tribune called it a " judicial coup " and the Dawn said that it was " an extraordinary and unfortunate step ". Contrast this with India where 3 journalists and the publisher of Mid-Day were sentenced to 4 months in prison for contempt for writing that sealing of high street shops by Justice Sabharwal of the Supreme court was to benefit his sons who had signed a business partnership with mall developer, Purushottam Bagheria. TV news channel Times Now were fined Rs 1 billion, yes 1 billion, in November 2011 for mistakenly showing he picture of retired Supreme Court justice, PB Sawant while reporting a provident fund scam involving several judges. Times Now ran a scroll apologising for their mistake for 5 days but Justice Sawant was not satisfied and filed a case for defamation. So arrogant and puffed with self importance are the judges in India that even legitimate criticism is taken as contempt and punished and since their is no higher authority than the Supreme Court we are totally helpless. Yet, justice in India is a joke because judges allow lawyers to prolong cases for years by allowing postponements for frivolous reasons. Often the plaintiff is dead by the time judgement is delivered. Politicians and their relatives are treated with servility. Amarmani Tripathy, convicted for the murder of Madhumita Shukla, was allowed to go to Gorakhpur to perform his mother's last rights. Only victims have no rights. Meanwhile Julian Assange is seeking asylum in the Ecuadorean Embassy in London to prevent being extradited to Sweden and then on to the US. The US government is after him for publishing confidential documents passed on to him by Bradley Manning. Why is the US not prosecuting several newspapers which collaborated with Assange in publishing these documents? On 5 June, 2004 Rabinder Singh, Joint Secretary and head of R&AW's South East Asia department defected to the US with several " sensitive files ". He is now living in Virginia. Surely the US government is just as guilty of " terrorism " against India as Assange is against the US, according to charges? So, do Pakistanis enjoy the greatest freedom of speech compared to India and the US? Who would have thought that?

Europe maybe helpful to India.

Contrary to what people are saying a financial crisis in Europe may be of great help to India. Provided our fellows take the right decisions, of course. If Greece exits the Euro and there are runs on banks in Spain and Italy foreign funds will immediately withdraw money from emerging markets for the safety of the US and Germany. That will result in a precipitous fall in property prices and the Sensex, which are the main avenues for investing black money. Once most of the black money is out of the system inflation, which has not been controlled by 13 rises in interest rates, will fall. The outflow of FIIs will tend to deplete foreign exchange reserves and put downward pressure on the rupee but this will be more than offset by the fall in commodity prices, especially oil which is the largest import cost for India. Non resident Indians will seize this opportunity to buy assets here increasing remittances in dollars. The fall in inflation will allow the RBI to reduce interest rates but this must be done with extreme caution so as to keep inflation down at 3% and prevent a property price bubble from forming again. On no account must the RBI allow property prices to get ahead of inflation thereby keeping a lid on black money which it cannot control or tax. A relatively high interest rate will encourage savings which is falling and is the reason why banks were unable to pass on the recent 50 basis points cut in interest rate to borrowers. Preventing an asset price bubble will prevent reckless borrowing and protect banks. At least 10% of loans to the real estate sector are stressed but banks are saying it is 3-4%. ET, June 20. Indian banks have sought to restructure $12 billion of corporate debt through the Corporate Debt Restructuring Cell, an increase of 156% over the previous year. Analysts reckon that banks are hiding bad debts by advancing new loans to cover the old ones so that they are not shown a Non Performing Assets on their books. This is called " evergreening " and makes the situation worse by increasing the debt load. At SBI 43% of restructured loans were declared non performing within 2 years. Low inflation will allow the government to increase the price of diesel and reduce the price of petrol, thus reducing the difference in price and the incentive for people to buy diesel cars. The government must reduce expenditure and push foreign investment in retail and in infrastructure and reduce taxes on infrastructure industries like airports, roads and power. As the economy grows the rupee will tend to strengthen. The RBI must buy dollars to keep the rupee from gaining too much. This will increase dollar reserves and help local industries by preventing excessive imports. This is not a Nobel Prize winning theory in macroeconomics but simple common sense. We could see the present crisis in 2008 because of what the Congress did to win elections in 2009. Let us hope that they have minimum patriotism not to destroy the country to win in 2014.

Why do Indian politicians love secrecy.

In today's news Google has revealed, as part of its " transparency report ", that on 101 occasions authorities in India had asked for removal of 255 items between July and December of which 130 items because they were considered defamatory. This maybe because corruption has become so all-pervasive in India that the truth will be considered " defamatory ". Even the definition of honesty has changed so that a man is acclaimed as " honest ", when he has presided over the theft of hundreds of billions of rupees, only because he has not taken any himself. The conviction of former Goldman Sachs Director, Rajat Gupta for insider trading has puzzled everyone here. How can he be guilty of any wrongdoing when all he did was help his friend Raj Rajaratnam, founder of the Galleon Group without making any profit himself? In spite of Harshad Mehta, Ketan Parikh and other scams insider trading is rampant in India. TOI, June 19. Apparently, Blackberry is loved by traders because the sender and the recipient cannot be tracked once the message is deleted. There is no shame anymore. The bigger the crook the more he is respected. It is all part of the game and " Sab chalta hai " which means anything goes. Choosing the next President of India is a perfect illustration. Last week SP chief, Mr Mulayam Singh Yadav emphatically supported Ms Mamata Banerjee, of Trinamul Congress, against the Congress candidate, Mr Pranab Mukherjee. They jointly declared their own choice of candidate but within 24 hours Mr Yadav changed position and backed Mr Mukherjee. Whether this was planned before hand we do not know but it certainly humiliated Ms Banerjee who has been a thorn in the Congress flesh for sometime. Immediately afterwards Mr Digvijay Singh of the Congress described her as " erratic " and " immature " and Congress MP, Mr Adhir Choudhury mocked her saying," Now Didi is crying after her loss of face as also after losing the political battle. And the Left Front is laughing." Mr Yadav's daughter in law, Dimple Yadav was elected to the Lok Sabha unopposed from Kannauj in UP in a bye election on June 9. The Congress, the BJP and the BSP did not put up a candidate against her thereby depriving the people of Kannauj any say in who they want to represent them in parliament. It is facile to say that the seat was held by Ms Dimple's husband, Mr Akhilesh Yadav who resigned to become Chief Minister of UP. She had lost from Firozabad, also vacated by her husband, in 2009. A parliamentary seat is not a family property to be passed around within family members. This was in effect a political coup against the right of the people to choose their representative. To say that is considered defamatory and that is why politicians hate the internet. How can the parliament be the " light pillar of democracy " when the darkness of corruption has enveloped the country?

Cleanliness before reforms.

Faced with economic slowdown Indian companies are looking to sell off non-core assets. Lured by low interest rates and a growth driven by temporary factors they have diversified into areas in which they have no competence and have huge loans on their balance sheets. Real estate was an obvious attraction as prices were rising by 50% a year so every company, no matter what their business, built residential and commercial properties with loans. Rich people bought properties, not for personal use, but for speculation. Prices have now reached such levels that buyers are becoming scarce. Videocon group, which is in electronics and energy, wants to sell land in prime locations in Delhi and Mumbai. Infrastructure projects were grossly mismanaged by the government. Construction companies were promised 30 years of monopoly toll collection from roads they would build. So enthused were they that they paid the government to be awarded such projects. The annoyance of having to stop at toll stations every 20km, the expense of paying toll and the rise in the price of petrol meant that few people would dare to drive for long distances. Now companies are looking to sell $10 billion worth of completed roads. India has 100 billion tonnes of coal reserves but has to import 70 million tonnes every year. The Comptroller and Accountant General reckons that the government has lost Rs 1.8 trillion by not auctioning coal blocks. But auctioning mines for development will escalate costs and raise cost of electricity. Best way would be to allow coal to be mined on a revenue sharing basis or to collect a small tax per tonne. The problem is that inspectors will take bribes and allow companies to pocket most of the money. These are not difficult things to do. Germans were building autobahns at one mile per day during WW II. Australia earns vast sums of money from mining. The technology and knowledge is there; all we have to do is allow foreign collaboration and we could have world class infrastructure without cost overruns due to delays and shoddy planning. The problem is that the Congress is still set in a socialist mindset of high taxes and social schemes. Appeals against Rs 860 billion of tax demands are being heard by various courts and tribunals. TOI, June 10. The tax department wins only 10% of such cases while companies win between 40-50%. This shows - 1. Civil servants are ignorant of tax laws or 2. They file frivolous demands to scare companies into paying bribes to settle claims. 3. Tax laws are poorly framed. Companies, with millions of rupees of claims hanging over their heads, have to set money aside in case verdicts go against them which means they cannot invest in new projects. The old methods of crony capitalism, blatant stealing, tax and spend to bribe the electorate and fantasising about growth have to stop. But that can only happen if politicians have any shame and patriotism.

Greece is still there.

Yesterday's election results in Greece seem to be a mixture of fear and defiance. For weeks various people have been trying to terrify the Greeks by making these elections a referendum on whether to stay in the Euro or to go back to the Drachma. British Prime Minister, David Cameron said at the NATO summit in Chicago in May," We are coming to a decision point where Greece is going to vote. It has to be absolutely clear there is a choice: they can stay in the Eurozone and meet their commitments, or they can vote to give up up on their commitments and effectively give up on the Eurozone." Blinded by arrogance it did not occur to Cameron that he was interfering in another country's democratic process. Also, the UK not being part of the Euro it is none of his business what Greece does. He was effectively trying to bully the Greeks into decades of miserable poverty to prevent the UK economy from sinking further into recession which is because of his own incompetence. The unelected World Bank President, Robert Zoellick said, " There could be a Lehman moment if things are not properly handled." The Greeks have spoken. The New Democracy Party has 129 seats in the 300 member parliament, Syriza has 71, PASOK has 33, extreme far right Golden Dawn has 18 and Democratic left 17 seats. This means another unstable coalition which will try to stick to the severe austerity that Greece signed up to. But will this suffice? Spain has been loaned $126 billion to recapitalise its banks. Spanish Prime Minister, Mariano Rajoy has claimed that this is not a bailout for Spain, like that received by Ireland and Portugal, but only for its banks but experts point out that Spanish banks do not have the ability to repay the loans so they will devolve on to the government, raising its deficit. Already Spain's budget deficit is 8.9% of GDP which the government finds impossible to reduce. Last week Spain's 10 year bond yield briefly rose above 7% before settling down at 6.87%. People are predicting that Spain will need a bailout soon. However, does the pain of austerity really work? The 10 year bond yield for Greece is 27.13%, Portugal 10.52% and for Ireland, which voted for austerity in a referendum a week ago, 8.21%. No reward for all the pain the people are suffering. The key is the German Chancellor, Angela Merkel who has the money to stimulate growth in these countries which will increase tax collections and reduce the need for savage cuts in public spending. But she wants a fiscal union where a central institution will control revenue, spending and budget deficits of member countries and a banking union which will tightly supervise banks. This means Eurozone countries will have to give up some of their sovereignty and guess who will do the supervising? The Germans of course. It is ironic that David Cameron of the Tory party, which still celebrates victory over the Germans in WW II, is begging Merkel to take over Europe. Germany may have lost the war but they look like winning the peace.

Top job for a loyal servant.

At last we know that our most revered Finance Minister, Pranab Mukherjee is the Congress choice for the post of President of India. But should he be celebrating? The present incumbent, Ms Patil is alleged to have been chosen for her absolute loyalty to The Family which is an absolute prerequisite for anyone to advance in the Congress Party. Mr Fakhruddin Ali Ahmed signed the papers for the Emergency, the most shameful period after independence, when Indira Gandhi met him at midnight on 26 June 1975. Mr Zail Singh said of Indira Gandhi," If my leader had said I should pick up a broom and be a sweeper, I would have done that. She chose me to be President." That is not to say that Mr Mukherjee has been cleaning 10 Janpath or that our present Prime Minister will be declaring emergency but it is most likely to be for loyal service over many decades. He is said to have been banished from the Congress for a short while by Mr Rajiv Gandhi and even formed his own party, Rashtriya Samajwadi Congress, which is a definite black mark, but made up with the boss after a short time and merged with the Congress, which would deserve a pat on the head. This is what makes the Congress the most formidable political party in India. Other parties such as DMK, AIADMK, TDP, SP, BSP and the Akali Dal are confined to their states. The Trinamul Congress and the YSR Congress are merely breakaway parties and would probably like to be invited back. The Janata Dal has presence in a few states but is too fragmented to offer any worthwhile challenge. The BJP is the only other party which can offer an alternative to the Congress at the center and was in power for 6 years from 1998-2004 but it is not united as various people fight to be its candidate for prime minister. They could easily hold an internal ballot to decide who the rank and file would prefer but will not because others fear that Narendra Modi would win easily. They do not seem to understand that by fighting among each other they will ensure that they no one becomes prime minister because the Congress will win again in 2014. Many pundits are discounting the Congress to win in 2014 because of its dismal performance in recent state elections, especially its trouncing in UP, which sends the largest number of MPs to parliament. But the main strength of the Congress is the unity of its members in genuflecting to The Family. To be in the Congress is to be a totally spineless creepy-crawly and to make tea, sweep floor or kill on the say so of The Family. Indeed, so powerful is The Family that no politician dares to question or criticise its activities. The BJP did not dare to investigate Bofors in spite of being the government for 6 years. As long as The Family lasts Congress members will coalesce around it and that is its biggest strength. The Eurozone crisis might help the Congress wriggle out of the economic crisis that it has created. More of that anon.

Cameron was too friendly.

The Leveson Inquiry was set up by Prime Minister, David Cameron to look into phone hacking by News International journalists. Earlier we saw family amnesia from both Rupert and James Murdoch who could not remember whether they had been told about or seen any emails regarding phone hacking. However, that did not prevent Rupert Murdoch from remembering that the then Prime Minister, Gordon Brown told him in a phone conversation in April 2009," Well your company has declared war on my government and we have no alternative but to make war on you." This was after News International decided to switch support from Labour to the Tories from 30 September 2009. Gordon Brown testified that such a conversation " never took place ", which has now been confirmed from records released by Downing Street which do not show any phone call to Murdoch during that month. So either Murdoch lied under oath or has become so senile that he is hallucinating. Being a lawyer by profession Tony Blair was smooth and, while he acknowledged that newspaper owners had too much power, he said that he chose to manage his relationship with Murdoch rather than confronting him because that would have interfered with his duties as prime minister. David Cameron seems to have been much too friendly both to the Murdochs and to CEO of News International, Rebekah Brooks. Born in 1968, Brooks was editor of the News of the World from 2000-2003, editor of The Sun from 2003-2009 and then was CEO of News International from 2009-2011 when she had to resign over the scandal. She married actor Ross Kemp in 2002 and spent a night in jail for assaulting her husband on 3 November 2005. She married her present husband Charlie Brooks in June 2009. She is also a personal friend of Cameron and sent him a text message on 7 October 2009 which said," I am so rooting for you tomorrow not just as a proud friend but because professionally we're definitely together! Speech of your life! Yes he Cam." Sounds more like a girlfriend. In his testimony Cameron flatly denied that there was any " overt or covert ", or indeed any " nod and wink " agreement with Murdoch under which Murdoch would be given an easy run to take over 60.9% of BSkyB, which he was desperate to buy, in return for the support of his news empire for the Tories. However, he went ballistic when Vince Cable of the LibDems was caught saying that he had " declared war " on Murdoch's bid to buy BSkyB in a sting operation by the Daily Telegraph but has been staunchly defending Culture Secretary, Jeremy Hunt who was in constant contact with James Murdoch and PR man Frederic Michel and seemed to be doing everything in his power to make the deal successful. He may deny as forcefully as he can but Cameron will never be able to erase a suspicion of a quid pro quo. The British are masters of whitewash so let us hope that this inquiry will be more productive than the Hutton inquiry into David Kelly's death.

Nobody gives up power.

Last year when Hosni Mubarak of Egypt resigned as President there was great rejoicing and western journalists were waxing lyrical of how people power can bring democracy and how Egypt would become a shining beacon of freedom in the middle east. They were hoping that Egypt would be like Turkey where secularism is enshrined in the constitution. At that time we thought that there was greater possibility of Egypt turning out like Pakistan where the army runs the country behind a weak civilian government and Islamic fanatics gradually grow in power until a low level civil war continues for years. A new parliament was elected in Egypt in January 2012 where the majority of seats went to the Muslim Brotherhood's Freedom and Justice Party and the hardline Salafists. According to the new rules one third of seats of the 508 member house were reserved for individual candidates who would be outside party lists. The Muslim Brotherhood won 100 of the 235 seats with its members standing as individual candidates. During the revolution the Brotherhood had promised not to run for president but promptly broke their word by putting up Mr Mohamed Morsi as candidate. The parliament also passed a law which banned any former official of the Mubarak regime from contesting the presidential elections. That meant that Mr Ahmed Shafik, a former air force general and the last prime minister under Mubarak, would be ineligible to run. Now the Supreme Constitutional Court, established by Mubarak some 3 decades ago, has ruled that Mr Shafik is eligible to stand as candidate for president and the election of all the individual candidates are cancelled, thus effectively dissolving parliament. Those candidates are banned from standing again. The Muslim Brotherhood is naturally incensed because their power will be decreased while other MPs are delighted because they did not want the Brotherhood to hijack the revolution which was spontaneous and essentially secular. The people are confused, not knowing whether to be angry at this fiendishly clever soft coup by the army or to be pleased that the Brotherhood has not grabbed all the benefits of the revolution which was independent of them. The presidential election is on Sunday between Mr Shafik and Mr Morsi. If Mr Shafik wins he will become president without any parliament to challenge him and will be a dictator elected by the will of the people. A really clever move by the army who get to keep all their powers and privileges. It will take time to write a new constitution and elect another parliament which will give General Tantawi, Chairman of the Supreme Council of the Armed Forces, time to weaken the Muslim Brotherhood. Why blame army fellows, no one likes to give up power. India, which likes to show off as the largest democracy, is really a police state controlled by political gangs ruled by families which pass power down from one generation to the next as some family heirloom. We desperately need citizens corporations.

Economists do not run the economy.

When George Bush became president in 2001 he was left a budget surplus by Bill Clinton. So he decided to play Father Christmas and gave away unnecessary tax cuts by passing the Economic Growth and Tax Relief Reconciliation Act of 2001. Then came 9/11 so, being from Texas, he decided to shoot from the hip first and think later. First the US attacked Afghanistan and then, stupidly, Iraq. Instead of increasing taxes to pay for the wars he passed another Jobs and Growth Tax Relief Reconciliation Act in 2003 building up a deficit of $14 trillion, equal to the GDP. During this time the then Fed Chairman, Alan Greenspan left interest rates low which resulted in the property price bubble, also called the Subprime crisis. Now the Federal Reserve has published a survey that it carries out every 3 years which shows that the median US family had no more wealth in 2010 than it had in the 1990s, a loss of 2 decades of prosperity. A median family is one that has half of families above and the other half below it. Net worth had decreased from $126,400 in 2007 to $77,300 in 2010. This was compounded by by 7.7% fall in income. The middle 60% of families suffered the most while the top 20% and the bottom 20% suffered less. This is because middle class families put more money in buying houses and home equity had dropped from $110,000 in 2007 to $75,000 in 2010. Fewer families were able to save anything, down from 56.45 to 52%, and those that could were saving for emergencies rather than for retirement, education or for down payment to buy a house. More than $1 trillion is outstanding in student loans of which $902 billion is federal and $140 billion private loans. Now 94% borrow to earn a bachelor degree as opposed to 45% in 1993. Average debt for students was $23,300 in 2011 with 10% owing more than $54,000 and 3% owing more than $100,000. Nearly 10% of those who started repayment in 2009 defaulted in 2 years and payments were continuing in only 38% of loans. This should be sobering reading for those who keep shouting for increased tuition fees for colleges in India. There is an outcry among bankers, business leaders and politicians in India for an interest rate cut to stimulate the economy. This will cause a fall in the value of the rupee and a rise in inflation. Brainless growth will help only the rich while the middle class and the poor will suffer a fall in standard of living due to inflation. Also there is an enormous property bubble hanging over the economy. Lowering interest rates may prop up the property market in the short term but will only make it bigger in the long term. Perhaps the only hope is for a crash in the Eurozone. This will cause foreign investors to withdraw money from India leading to a fall in the share market and property prices making them accessible to middle class people while the fall in commodity prices will decrease inflation and allow the RBI to cut interest rates to stimulate the economy and create jobs. However, with the World Famous Economist in charge and elections in 2014 who knows what our fellows will do.

India is very different from the US.

Commenting on a previous post one Mr Sharma has expressed anger that S&P downgrades India's credit rating while keeping that of the US intact when the US has so much debt. The S&P did downgrade the US from AAA to AA+ on 5 August, 2011 for which its chief Deven Sharma had to resign. But India and the US are totally different. India has one billion people while the US has just 300 million with 3 times the amount of land. The dollar is the world's reserve currency which only the US can print. When the subprime crisis exploded the Obama government instituted a program called Troubled Asset Relief Program which distributed $700 billion to US and foreign banks to recapitalise them. General Motors, which was emerging from Chapter 11 bankruptcy, received $25 billion. Today General Motors is again the world's largest auto maker and is making profits. In 2008 the Federal Reserve bought $600 billion of Mortgage Backed Securities and in 2010 it bought $600 billion worth of Treasury Securities to increase liquidity in the market. This was called Quantitative Easing. India's total foreign exchange reserve is a mere $280 billion. Increasing money supply should cause the dollar to weaken and inflation to rise but inflation in the US is below 3% unlike over 10% in India. Countries such as China, Korea and Thailand buy up dollars to keep their own currencies weak so as remain competitive in exporting their goods. The RBI should never have allowed the rupee to strengthen to 42 to the dollar and, instead, should have bought dollars to keep the rupee at around 48. This would have increased our dollar reserves. The US has strong institutions headed by independent people. Federal Reserve chairman, Ben Bernanke used to be an economics professor at Princeton University. Our lot are civil servants, who are the most corrupt in the world, appointed by politicians to do their bidding. The US has the world's top education institutions which are independent of politicians. Harvard has an endowment fund of $30 billion while Yale has $20 billion. Here first Ramadoss tried to destroy AIIMS and now Sibal is trying to destroy the IITs. That is why the US has Google, Apple and Facebook while we have to do with " jugaad ". Because our politicians are trash they cannot tolerate excellence. The US has a strong legal system. John Edwards, a presidential candidate in 2004, barely escaped prison for misuse of campaign funds. They have District Attorneys who are elected and are free to investigate anyone. Here convicted murderer Manu Sharma was allowed out on parole to attend a wedding and that putrid slime, Rathore got a derisory 6 months for pedophilia. Freedom of speech is enshrined in the US constitution so people can and do question their politicians. Here the scum are constantly trying to censor the internet, cartoons and any criticism. RTI activists are being murdered regularly. Criminals love secrecy to hide their crimes. The US is not a paradise. Guns kill 16000 every year yet no one can ban guns. The US has carried out more genocides than any other nation. Yet Indians risk their lives to emigrate to the US. How many Americans want to emigrate to India?

Why be scared about drones?

Pakistani authorities are fuming over recent statements by US Defense Secretary, Leon Panetta who said that the US had no intention of stopping drone attacks in Pakistan and was running out of patience with it for not doing enough to take out Taliban fighters in North Waziristan. If drone attacks are an invasion of Pakistani sovereignty why does it not take out the drones? The older MQ1 Predator and MQ9 Reaper are propeller driven and can fly at only 100 mph whereas Pakistani air force boasts of the Dassault Mirage 5 which cruises at 600 mph and can reach 1500 mph. The newer RQ-170 Sentinels are more difficult to detect by radar and can fly at just under the speed of sound. Still no match for a Mirage. Before the Bin Laden raid Sentinels flew between seams of radar to escape detection. Nuclear scientist AQ Khan has said that Hamza missiles can easily take out drones. Serbian air defenses destroyed 15 drones during NATO bombing of Yugoslavia in 1999. There were rumors of shooting down a drone with a machine gun from the open door of a helicopter. In 2002 a Predator drone armed with Stinger missiles took on an Iraqi MIG fighter and was quickly destroyed. On 4 December, 2011 Iran brought down a Sentinel near the city of Kashmar in north eastern Iran. The US claimed that it was shot down but the Iranians showed it on TV relatively undamaged and claimed that they were able to override its GPS system. Apparently that is its greatest weak point and a stronger signal can reset its coordinates and make it land to order. On 9 May, 2012 a US drone crashed in Pakistan, near the Afghan border. The US says that it malfunctioned but the Taliban are claiming that they shot it down. So why is Pakistan not taking them out? One reason maybe that the US will see it as an act of war and cut off all aid, without which Pakistani economy will crash. After all, the US is the largest contributor to the IMF. The main reason is that the Pakistanis are using US drones for there own purpose. Drones can recognise buildings but cannot know where individuals are hiding. This information is being supplied by ISI spotters. Last week the Al Qaeda second in command, Abu Yahya al-Libi was killed in a drone attack. In 2009 Baitullah Mehsood was killed possibly because he was involved in the assassination of Benazir Bhutto. Thus the ISI is taking out people who it wants but leaving behind those it considers its assets. Al Qaeda leaders, especially foreigners, are considered expendable but Taliban leaders, such as Mullah Omar, are protected because the ISI considers the Taliban as " strategic asset " to take over control of Afghanistan when US forces leave in 2014. Meanwhile the Pakistani government feigns great anger and protests formally to the US against this invasion of sovereignty thus inciting its population to greater hatred of the US. This is what is frustrating the US and hence the warning from Panetta. Maybe, Pakistanis are trying to be too cute and soon the west will lose patience and cut off all aid but for the moment they are in the driving seat. In biology drones are impotent male bees. Human drones are not much better are they?

A very big government.

in 2007-08 total government revenue in India was Rs 5.4 trillion and spending Rs 7.1 trillion with a deficit of Rs 1.7 trillion but in 2011-12 revenue increased to Rs 7.7 trillion but expenses shot up to Rs 13.2 trillion, a deficit of Rs 5.2 trillion. Fiscal deficit is 68% of revenue which means that the government is spending two thirds more than it earns. Some spending is fixed, for instance defense spending which is Rs 1.8 trillion, interest payments Rs 2.8 trillion and subsidies Rs 2.2 trillion. Of this interest payments would come down if spending was reduced and we had a budget surplus. Much of subsidies are lies put out by politicians and spread by the freeloading press. The government levies huge taxes at source and then pretends to sell at a discount as in petrol or gives away free electricity to farmers and slums and then increases prices for those who pay thus increasing taxes for the middle class. The real subsidies are what the government spends on criminal politicians and useless, parasitic civil servants. There are 341 million civil servants including railways and Public Sector Undertakings or PSUs incurring a wage bill of Rs 591.43 billion. Air India has 27000 employees earning Rs 36.09 billion. Railways wage bill, including pay, allowances and travel allowances, is Rs 265.85 billion. MNREGA scheme which pays Rs 162 per day for 100 days every year to rural poor for doing nothing costs Rs 400 billion. This was a totally cynical scheme started by the Congress in 2008 to win the elections in 2009 and has pushed up rural wages and resulted in double digit food inflation which is killing the middle class and the urban poor. National Rural Health Mission costs Rs 120 billion. This is so corrupt that it has already resulted in the deaths of 2 Chief Medical Officers in UP. The Center has asked state governments and utilities to restructure loans of electricity distribution companies to the tune of Rs 1.5 trillion. This is probably to protect banks which are already having to deal with Rs 350 billion of bad loans from the textile sector and Rs 180 billion from Air India apart from other companies which are in trouble. It must be a joke because most state governments are already running huge deficits and the state electricity boards are bankrupt. They only way is to stop waste of electricity, which exceeds 40% in Delhi, due to blatant pilferage. Our trade deficit was $ 185 billion last fiscal. Already S&P is warning that it could reduce our credit rating from BBB-, which is the lowest investment grade, to junk status. In a report titled " Will India Be The First Bric Fallen Angel " S&P says," Setbacks or reversals in India's path toward a more liberal economy could hurt its long-term growth prospects and, therefore, its credit quality." Only a World Famous Economist can make such a dog's breakfast of the economy.