Impossible to get the monkeys of its back.

Everyone knows more than the Reserve Bank of India. As always, politicians and government officials have no doubts that policy rate must be lowered significantly. The Chief Economic Adviser, Arvind Subramanian wanted the rate to be reduced by at least 50 basis points. In June the Finance Ministry asked to meet all the members of the Monetary Policy Committee, to pressure them to reduce rates, but the MPC refused unanimously. "In recent times, seldom have economic conditions and the outlook warranted substantial monetary policy easing," said Subramanian in June this year, when the MPC kept the rate steady at 6.25%. In September 2015, Mr Subramanian was terrified of a looming deflation and even the eminent economist Arvind Panagariya was calling for a 50 basis point rate cut. To add to the fire, retail inflation fell to 1.54% in June. True, this is the first time in decades that prices are rising so slowly, but they are not falling, so there is no deflation. Giving in to the hysteria the MPC reduced policy rate by 25 basis points last week, but frustrated officials, who did not want to be identified, insisted that the RBI is 'behind the curve' and the rate should have been cut by 75 basis points. R Jagannathan thinks that "the RBI doesn't seem to know its backside from its elbow". He thinks that five of the economists on the MPC are idiots and only one, Prof RH Dholakia knows anything, because he recommended a 50 basis points cut. The RBI sets policy rate, not on the level of inflation at present, but on how prices will behave in the next 6 months to one year because policy rate takes a few months to have any effect. It has come under ferocious attack for its expectation of higher retail inflation when actually the rate has been falling. On the other hand, RK Pattnaik thinks that a rate cut was not warranted and the RBI acted just to get the monkey, or monkeys, off its back. Obviously, the RBI cannot blame the government directly, but Mihir Sharma points out that the RBI is quite clear that the fall in private investment is not due to interest rate, but due to the inability of banks to pass on the lower rates because of huge bad loans on their books and because implementation of infrastructure projects is too slow. Having advanced the Union Budget to January the government has already exhausted 80.8% of its predicted fiscal deficit in the first quarter itself. The farmer loan waiver is expected to cost Rs 3.1 trillion. Assam needs extra help because of floods. The Real Effective Exchange Rate, or REER, is 18% overvalued for the rupee, which makes imports, especially oil, cheaper. The US added 209,000 jobs last month and if this results in a rise in wages, interest rate in the US will rise, the dollar will get stronger and the rupee may fall. If that happens the monkeys will blame the RBI for rising inflation. 

The indecency of exposing personal details.

"The government claims 99% of people over age 18 now have Aadhaar. I, however, belong to the 1% who don't," wrote Tathagata Satpathy, a member of the Lok Sabha. Aadhaar is a biometric identity card that is being forced on all citizens to avail of any service, including opening a bank account, getting a mobile phone, and even for filing tax returns. The government and private companies are profiting from our personal data. "The biggest industrialist in India stated very clearly: 'Data is the new oil'," wrote Mr Satpathy. "If data is the 'new oil' and you are extracting that oil from me, it implies I am the resource. I should be compensated for providing that resource." He recommends a Universal Basic Income of Rs 12,000 per year to every citizen, regardless of wealth. A 9-bench Constitutional Court has been set up to decide whether privacy is a 'fundamental right' for citizens of India. The Court is considering splitting privacy into three levels, intimate, private and public. The judges are too learned. It is very simple: only humans need privacy, so privacy is a basic human right. Nandan Nilekani, who perpetrated this indecency on citizens, swore that biometric identity is completely safe. This was echoed by Union Minister Ravi Shankar Prasad. The government says that privacy is not eroded because religion, income or class are not included and it is safe because the information is encrypted, the database is secure against hacking and any attempt to hack into it will be a criminal offense. But many experts have grave doubts about its security and the possibility of identity theft. L Vishwanath that biometric data maybe stolen at the point of verification and once a person's data is compromised she cannot use it for life, because biometrics cannot be changed like a password or a pin number. As for the data being secure it has been proven to be a complete lie. One Abhinav Srivastav has been arrested for hacking into the Aadhaar database through Digital India App, which is has been created by the government. He even demonstrated to the police how easy it was. He is a hero and we should be raising a large sum of money through crowd-funding to reward him for exposing the lies told to us. Since he is an Indian he has been caught, but what if a foreign agency or terrorist hacks into the database. He can produce identity cards and use them to obtain phones and launder money to create havoc inside India. How will the government catch him? The chief of UIDAI claimed that no data was stolen. Should we believe him?  

Should we give tax sops to Apple?

Apple, makers of iPhone and iPad, has removed its VPN services from its app stores in China. VPN, or Virtual Private Network makes point-to-point connections, allowing users to bypass censorship with relative anonymity, and is encrypted, so that messages cannot be read. Both China and Russia have cracked down on VPNs because they want to eliminate online dissent in any form. Naturally, Apple CEO, Tim Cook defended the decision saying that the company always obeys local laws. Of course, it does, especially as revenue has fallen 14% in the first quarter of this year. Over 20% of Apple's profits come from China, so Cook will justify any government action so as not to annoy authorities there. The same Tim Cook took a highly principled stand against unlocking an iPhone used by the San Bernadino shooter Syed Farook. "At stake is the data security of hundreds of millions of law-abiding people and setting a dangerous precedent that threatens everyone's civil liberties," he said at the time. Ah so, who cares about law-abiding Chinese? Liu Xia, widow of Liu Xiaobo, who developed liver cancer while in prison for dissent and died last month, has been 'disappeared' by the government in Beijing so that she cannot talk to journalists. Bloomberg Gadfly explored both sides of the Apple story. Tim Cook is depending on sales in China to keep profits at high levels and keep shareholders happy. And high profits ensure juicy bonuses. Last year Cook home around $8.75 million, of which his base salary was $3 million and $5.37 million was bonus. Unfortunately, that was quite insufficient because he was paid a salary of $10.3 million in 2015. Apple links compensations to performance and revenue generated by the company was a mere $215.6 billion when the target was set at $223.6 billion. Operating income was $60 billion, instead of the expected $60.3 billion. As Lalu Prasad said,"I don't want them to die in poverty," when defending his sons against charges of Rs 5 billion land scam. Manufacturing and selling in China has other benefits, like avoiding taxes in the US, which increases profits. And bonuses. India also has 1.3 billion people, just like China, but most people are unable to buy expensive Apple products so the company refuses to produce its phones in India unless it is bribed with tax sops. Before we get excited we must remember that the European Union has asked Apple to pay $14.5 billion in back taxes. Principles cost money. So, is it a good apple that keeps the doctor away or a bad apple which we should avoid? Depends on the money.

Is anyone worth that much?

Gabriele Marcotti explains  "Neymar's record breaking move: What it means for Barcelona, PSG and more". Naturally, there are diverse opinions on whether any player is worth so much, 222 million euros or $260 million, whether Paris Saint-Germain is breaking the Financial Fair Play regulations, or whether Neymar will get his comeuppance for being so greedy. Writing for Bloomberg Gadfly, Lelia Aboud explains that Neymar's fees aren't that surprising  because "the players themselves aren't generally grabbing a larger share of the pie. It's just that the pie has gotten very, very big." Football clubs are earning so much that they can afford to pay such eye-watering amounts for players. However, for those of us who enjoy watching these wizards on television it still doesn't make sense. A player can miss entire seasons through injury, as O Fenomeno, Ronaldo did in 1999-2000. The tag of being the most expensive player on the planet raises expectations of fans to such levels that very few can fulfill their demands. Paul Pogba's transfer from Juventus to Manchester United last year, at 105 million euros, was the most expensive before this, but, although he has been good, he does not seem to have satisfied everyone. Gareth Bale was bought by Real Madrid from Tottenham Hotspurs in 2013 for 100 million euros, a record then. Real wants to unload Bale to buy Kylian Mbappe from Monaco. Seeing the amount of money Barcelona got for Neymar, Monaco has raised 18 year old Mbappe's price to 200 million euros, hoping that Barcelona will compete with Real to buy him. So, paying such astronomical sums is probably not good for clubs or players, and it is certainly not good for fans because the price of tickets and cost of sports channels on television go up. Manchester Untied bought Romelu Lukaku from Everton for 85 million euros. Manager, Jose Mourinho is probably looking for someone like Didier Drogba who performed so well for him at Chelsea. Lukaku has been quick to deny that he is at the same level as Drogba, probably realising the danger of such comparisons. It is like comparing a batsman with Donald Bradman, in cricket. It is usually a death knell for a player. Some people feel that paying such huge sums of money will ultimately destroy the 'beautiful game'. Only some football players command such salaries. According to Business Insider, basketball players earned the highest average salaries in all sports in 2016, beating Premier League and American Football. But there is no comparison. Basketball is limited to only those who are over 7 feet tall, while football is played by people of every height and it belongs to the masses, because there is no need for expensive gear. So maybe the players deserve what they get.

Not easy to give up power, is it?

Prof Ricardo Hausmann is saddened by "Venezuela's unprecedented collapse". He was once Minister of Planning in Venezuela, so was probably a citizen of that country. Why is he sad? Because, the economy has collapsed. "Venezuela is running out of food. Hospitals are overcrowded with sick children while doctors don't have enough medicine or X-ray machines. Electricity isn't guaranteed. About the only thing Venezuela has in abundance is chaos." So bad is the situation that "on 22 July, when the border with Colombia was reopened, 35,000 Venezuelans crossed the narrow bridge between the two countries to buy food and medicines". In 2010, one US dollar was worth about 8 bolivars, today it is worth 8,000 bolivars, and inflation is expected to reach 2,000% next year. Venezuela has the highest oil reserves in the world and from 1950 to 1980 it was the strongest economy in South America due to enormous public spending, based on foreign debt. The price of oil fell in the 1980s causing the economy to contract and inflation to rise to 84%. There was public rioting in Caracas in 1989. Hugo Chavez was elected president in 1998 and in 2000 oil prices soared, fell in 2004, but rose again to a peak in 2011. Like in the 1960s-70s, Chavez used the oil wealth to start social programs for the poor, while berating the rich as enemies and ranting against an imagined US conspiracy to take over Venezuelan oil. Chavez nationalized the oil industry, resulting in a fall in output by 1 million barrels per day. When prices fell in 2014 the economy collapsed. It needs a price of over $120 a barrel just to break even. Nicolas Maduro became president in 2013, when Chavez died. The opposition won a two-thirds majority in parliament in 2015, since when they have been calling for Maduro to resign. There have been violent clashes between police and protesters for months and over 100 have died. Maduro called for a vote to elect a new parliament but, it now seems, that there was massive cheating. Maduro has his own supporters who see protesters as agents of the elite wanting to take away social schemes started by Chavez. Once people have something they are extremely reluctant to give it up, as Donald Trump is discovering in his efforts to get rid of Obamacare. Having used violence against protesters Maduro is probably afraid that he will be prosecuted and jailed if he loses power, so he uses more violence to cling on. Perhaps, Prime Minister Modi should remember not to reach a point of no return as he seeks to consolidate his power by ranting against corruption, while announcing long lists of social programs for the poor. It can be very hard to give up power. Ask Maduro.

New type of farmer, new type of problems. Same result.

"In the winter of 1988, the feisty farmer leader from Uttar Pradesh, Mahendra Singh Tikait, laid siege to Delhi, with thousands of his followers and their cattle gathering on the boat club lawns near Parliament," wrote S Bera. But the farmers of today "are not our dhoti-clad, topi-wearing, hookah-smoking farmers". They are educated and tech-savvy. In 1988, agriculture contributed 30% of GDP and employed 60% of workers in India, whereas today, it contributes just 15%, while employing 55% of workers. Farmers are protesting again. Why? "The fundamental root of the agrarian crisis is the intense pressure of population on land. Demographic pressure has pushed down the land:man ratio to less than 0.2 hectares of cultivable land per head of rural population," wrote Prof S Mundle. "Around 83% of rural households are entirely landless or own less than 1 hectare of land." They are forced to sell their produce to licensed traders who pay them 25% of what consumers pay wrote R Kaundinya. With rising input costs, despite subsidies given by the government, about 52% of agricultural households are in debt, the average size of debt being Rs 47,000. Crops are planted according to previous year's demand and when there is excess production prices crash causing acute distress. After a shortage of pulses last year the government pushed farmers to shift from cotton to pulses with the result that the price of pigeon peas crashed this year, while the price of cotton has gone up. The government is committed to buying a certain proportion of crops at a fixed price, known as the Minimum Support Price. This provides a floor for market prices and so prevents prices from falling too far in the event of bumper crops. The present government has been raising MSP at less than the rate of inflation. If prices of food items go up in India the government immediately bans export of those products to increase supply in local markets, while importing those products at lower prices from abroad. In 2015-16 the government spent Rs 1.4 trillion on imports of agricultural products. Why spend such a huge amount in paying foreign farmers, instead of paying Indian ones? Because food and beverages constitute about 46% of our consumer price index, so forcing food prices down keeps retail inflation in check. Retail inflation rate was at 1.54% in June 2017. This allows the government to apply pressure on the Reserve Bank to reduce policy rate. So, the government is forcing poverty on farmers to force interest rate lower. Why? Because politicians and civil servants believe that a low interest rate will stimulate the economy. But, are prices likely to stay down or is this temporary? We shall see. Meanwhile, farmers will keep protesting.

Civilizational problems are not that uncommon.

At the insistence of Germany, which holds the presidency of the G20 for 2017, an annexure was added to the Leaders' Declaration, which stated, "The Partnership intends to support related initiatives of the G20 and facilitate investment compacts between interested African countries, international organisations and interested partners to support private investment, sustainable infrastructure and employment in Africa." Why is Germany suddenly so concerned about Africa? Because of the flood of migrants coming into Europe, with an average of 55% of Europeans wanting a complete stop of Muslim migrants. So fierce is the opposition in some countries that Austria sent tanks to its border with Italy to stop migrants crossing over. Africa is enormously rich in natural resources, with a total population of 1.216 billion people, less than that of India, with an area 10 times the size of India. So, every person should be incredibly rich. Sadly, Africa's riches have been looted by other nations for centuries, helped by local despots who derived their power from the money paid by the same foreigners. This is not some conspiracy theory. Kofi Annan, the former Secretary General of the United Nations pleaded for a stop to the exploitation. Annan is from Ghana. As the competition for resources has heated up, with China entering the fray, rich countries shifted to digital exploitation, trying to tie African countries to a completely free and open Internet, with no customs duties, no transfer of technology and no commitment to recruit local people. While Europe has slapped a fine of $2.7 billion on Google for not giving equal listing to products of competitors, and Apple has been ordered to pay $14.5 billion in back taxes, Africa is being asked to give complete freedom to western companies. No wonder they walked out. Africa is making progress but not as much as it should, wrote Prof Noah Smith, because it has not been able to improve quality. Why not a Marshall Plan for Africa? Indeed, Germany has proposed a 'Marshall Plan with Africa' to stimulate African economy. Will it work? President Emmanuel Macron of France said that Africa has "civilizational" problems, which include "failed states, complex democratic transitions and African women giving birth to seven-eight children". There are 2.8 million people of Indian origin living in Africa so India should be able to increase investment across the continent. But, African nations must improve their governance so that their citizens do not have to seek refuge abroad. Same applies to India.

The fiction of 'all-under-heaven'.

Dressed in combat fatigues, Xi Jinping issued a threat to all China's neighbors saying,"I firmly believe that our heroic PLA has the confidence and capability to defeat any intruder." Just as Recep Erdogan wants to establish an  Ottoman caliphate, Jinping wants to become an emperor of Asia. China claims territory of all its neighbors, so every other country becomes an intruder according to Chinese fiction. The recent face off with Indian troops in Doklam, which is in Bhutan, but overlooks the Indian state of Sikkim, is an example of Chinese duplicity. After having intruded into Bhutanese territory China resorted to repeating its claims, and aggressive rhetoric against India. But if the PLA has the "capability to defeat any intruder" then so has the Indian army. China got a bloody nose from the Indian army in the Nathu La sector in 1967, and then got a spanking by Vietnam in 1979. China should remember that our soldiers have been battling a fanatic enemy, Pakistan, on our western border since independence, and so our army has earned a lot of experience through the blood of our soldiers, whereas China has not fought a real battle against a determined enemy. "An oft repeated exhortation in China is 'use the past to serve the present', wrote Prof Suisheng Zhao. "What they celebrate is an imperial China reconstructed as the benevolent centre of East Asia, to advance the agenda of China's rise as a return to the harmonious state to reassure neighbours who worry about the nation's rising threat. The leaders insist that a powerful China can be peaceful." Chinese scholars have imagined "a benevolent Chinese empire Tianxia, all-under-heaven, based on the royal ethics, or wangdao". However, western scholars studying Chinese history, find that wars were constant and both Qing and Ming dynasties were built on military power. What is most amazing is that China sees no contradiction in repeating its myth of 'benevolent Chinese' while building military bases on artificial islands created on reefs on the South China Sea, based on another Chinese fiction, the nine-dash line, which passes through territorial waters of other nations with coastlines bordering the Sea. A Court of Arbitration ruled that China has no claim over the Sea, to which the Chinese response was that the US and Japan are 'eunuchs' and 'paper tigers'. Not at all civilized, are they? Former President of Philippines, Benigno Aquino, compared China to Nazi Germany. Xi Jinping is personally behind building islands on the South China Sea. We hope there will be no Ping dynasty, like Qing and Ming. 'All-under-heaven' can only come if there is no China. 

A precariat for the future?

"In the US, 31% of workers are now self-employed, freelancing or in gig economy work. But India is ahead of the US; about 75% of our labour force meets the same criteria," wrote Sabharwal and Chakraborty. About 50% of our labour force is self-employed. What is wrong with that? "This huge self-employment is not some overweight entrepreneurial gene among Indians; the poor cannot afford to be unemployed so they are self-employed." Which means that they are surviving somehow, but always on the brink of penury. "Since India has 60 million enterprises, but only 18,000 of them are companies large enough to have a paid-up capital of more than Rs 10 crore, it's clear most Indians enterprises are dwarfs that are built on self-exploitation. (Russian economist Alexander Chayanov made the self-exploitation case to Jawaharlal Nehru for the viability of small firms that comes from not having to pay yourself or your family market wages). Bad self-employment is not a solution to India's poverty." So is the gig economy working great in the US? Only for those who live in nice suburbs, it seems. They are able to rent their apartments, or spare rooms, through Airbnb for extra income. This is passive investing, like investing in index funds. For others, who find find work through apps there is no job security or regular earning. The future of those with poor education is probably in low wage healthcare sector, caring for increasing number of old people with physical problems. For such people there is no prospect of promotions or of climbing up the social ladder. But the informal sector in India, which employs 111 million people, is not growing, even as earnings of workers has increased. Gross Value Added has increased by Rs 11.5 trillion, which can only mean that there has been a substantial increase in productivity. Is it because of the government's war on cash, we do not know. The Indian economy is a tale of two narratives, wrote Sajjid Chinoy. On the one hand, fiscal and current account deficits and retail inflation are all down which are signs of macroeconomic stability. Bankruptcy law and the Real Estate Regulatory Authority are expected to help reduce bad loans in banks and protect buyers from rogue builders. On the other hand, the economy has been slowing since March last year, well before demonetization, exports have fallen drastically and the agriculture sector is in deep distress, despite good monsoons. If things are going so good why do we feel so bad, asked R Sukumar. Thermal power plants may have to shut down due to falling price of solar power, laying off thousands of workers, the pharmaceutical industry profits are down, as demand for generics in the US is weak, and IT companies are laying off workers. The precariat are perhaps a cross between precarious and proletariat. That is really poor.

Will it be acceptable if parents ask for it?

The Origin of Species was published by Charles Darwin in 1859, which postulated that animals evolve by the natural selection of traits which give an advantage in the fight for survival, so that these traits pass on into succeeding generations while others die out. This is most beautifully illustrated in how some animals have developed extremely toxic poisons even as their prey have developed resistance to them. "In 1883, Francis Galton, Charles Darwin's lesser known half-cousin, decided to take his famous relative's ideas to the next level," wrote Rahul Matthan. "Galton believed that if nature could achieve such remarkable results through natural selection, the same could be used to improve humankind." "He called the process eugenics..." This had support of thinkers of the time, such as HG Wells, and some states in the US passed laws to allow sterilisation of men and women suffering from certain diseases, and for criminals. Passing judgement in Buck v Bell, Supreme Court Judge, Oliver Wendell Holmes wrote,"It is better for all the world that instead of waiting to execute a degenerate offspring for crime, or to let them starve for imbecility, society can prevent those who are manifestly unfit for continuing their kind." The Nazis took 'eugenics' to mean elimination of anyone they considered to be inferior and this led to the establishment of death camps. Eugenics is now a dirty word but sex offenders are offered chemical castration, and if you cannot have sex you cannot have children. Today there is a way to modify the human genome easily and cheaply. It is only natural that parents will want to make their babies more intelligent, more beautiful and more physically athletic through gene modification. Which was the original intention of eugenics, as proposed by Galton. This is leading to all kinds of strange rules. While calling for abortion of female fetuses to be made illegal, couples are allowed to choose the gender of their child through genetic selection at the time of conception. Britain is considering a law to allow people to choose their own gender. That would be great fun for men to ogle women in female changing rooms by claiming that they are women. Will white people ask for blonde, blue-eyed children, while blacks ask for blacker children? On the other hand, skin lightening is practised by some 70% of African ladies. So will black people opt for white children? If everyone becomes white will that end racism? People feel comfortable with their own kind so they congregate together. Will genetic eugenics get rid of racial differences, or make them worse? 

Is it possible for trade to be really free?

In early 19th century, David Ricardo proposed that "trade between nations could be mutually beneficial, even if one nation was more efficient than the other in all commodities", wrote Ajit Ranade. "Sure, free trade might hurt some people, but it's worth it, because in the end everyone is a winner." "The winners can compensate the losers and yet be ahead." That is within a nation, but why would a rich nation transfer wealth to a poor one? Western countries became rich by looting their colonies, as the British did to India. Moreover, politicians are not elected to make other countries richer, which is clearly illustrated by Germany. Chancellor Gerhard Schroder reformed social benefits, known as Hartz reforms, which forced people to accept lower wages, resulting in booming employment and low wage growth. However, Germany benefits hugely from a weak euro, which is common currency for the 19 countries of the eurozone. This has boosted German exports. Normally, when a country becomes wealthy its currency becomes stronger so that its goods become pricey, compared to those of others, but economic problems in other countries, like Greece, keep the euro weak and Germany takes full advantage. Germany had a current account surplus of $297 billion in 2016, more than China, which is giving heartburn to other leaders, including Donald Trump. Thus free trade does not help every nation. "For instance, the North American Free Trade Agreement, that came into force in 1994, was supposed to create 200,000 new jobs due to exports to Mexico. But by 2010, the increased trade deficit had eliminated close to 700,000 jobs, with job losses in every state." Prof Dani Rodrik wrote that economists have never acknowledged that many people lost out due to globalization, and that has created enormous public anger. Nations resort to currency manipulation, exploitation of labor and degradation of environment to increase profits. So what of India? Frustrated by the gridlock in the Doha round of WTO talks India signed free trade agreements with neighboring countries and regions. Trade deficits with Asean nations, Korea and Japan have more than doubled. India hoped to gain in services, but, while goods can be easily transported across borders, services need humans and every country has visa restrictions. Infosys is hiring 10,000 workers in the US, and more than 50% of Wipro employees in the US will be Americans, because of Trump's threat on H1B visas. In a speech in Delhi, former prime minister of Canada, Stephen Harper admitted that globalization suits the elite who can easily cross borders but not the poor who are restricted within national boundaries. If we are losing from free trade what should we do?

Isn't it time to be truly independent?

The House of Representatives, of the US Congress, voted almost unanimously, at 419-3, to stop Donald Trump from lifting sanctions against Russia. Will Hurd, a Republican, said that Russia is "our adversary and not our ally.Why? The Soviet Union was an ally in World War II and paid the heaviest price in terms of casualties. Even today the Russians believe that the USSR would have won the war on its own, without US and British help. Germany, Italy and Japan constituted the Axis powers, who caused the deaths of millions of people. Yet today, all three are friends of the US and Russia is not. General Douglas MacArthur protected the Japanese Emperor, Hirohito, and an ex-general, George Marshall conceived of a plan to channel $13 billion to regenerate Europe, including Italy and Germany. The Soviet Union, a communist dictatorship, refused to participate, fearing US dominance over all of eastern Europe. The Soviet Union disintegrated in 1991, following which there was a chaotic period during which the West, especially Bill Clinton, did everything to destroy it both economically and militarily. What a difference between farsighted statesmen, as MacArthur and Marshall, and a vain politician. That led to the rise of Vladimir Putin who is hated by the West, but extremely popular in Russia. Lisa Dickey discovered that Putin has given Russians a pride in their nation. Barack Obama slapped sanctions on Russia for allegedly interfering in the US elections last year. Yet the US has been meddling in other countries for decades, not forgetting the illegal wars in Iraq and Libya which gave rise to the Islamic State, resulted in the deaths of tens of thousands and a mass migration into Europe. Donald Trump came into office planning to improve relations with Moscow but he has been completely neutered by the Congress which has started innumerable investigations into supposed Russian help for his campaign. How did this start? It started when an ex British spy made wild allegations against Trump, which was seized on by the Democrats. Donald Trump is so unpopular in Britain that he has postponed a proposed visit to the country. yet, British Prime Minister, Theresa May was the first foreign leader to rush to meet Trump after he was sworn in and we saw photos of her leading him by the hand, like a pet dog on a leash. That is because of a British creation known as the 'special relationship' which allows Britain to project itself as a world power, despite being reduced to a small island in the North Sea after it lost its empire. In a speech in 1962, then Secretary of State, Dean Acheson dismissed Britain saying,"Great Britain has lost an empire and not yet found a role." Harold Macmillan believed "we are Greeks to their Romans", meaning the British are the thinkers while the Americans are merely foot soldiers. The US celebrates Independence Day on July 4. Seems that the Brits are still dictating to them.

A real Goldilocks scenario, or a fairy tale?

Growth in US and UK will be lower this year, predicted the International Monetary Fund, although the global economy will grow by 3.5% this year and 3.6% next year. It revised its forecast for the euro area up from 1.7% to 1.9% due to stronger growth in Spain, Italy, France and Germany. China was also revised higher. A poll of economists by Reuters predicts that growth in major economies will be slower in 2019 than this year. Inflation will remain suppressed. Emerging economies will grow at 3.5% in the next 3 years. These figures prompted A Nageswaran to ask,"Is global economic recovery statistical or real?" After analysing all the data he found that recovery in China is because of export growth to the US, helped by the Federal Reserve's caution in raising the low cost of borrowing. "America's rolling 12-month trading deficit had widened to $780 billion in May this year, from a recent low of of $745 billion in September 2016." The eurozone has done better by earning a trade surplus but 60% of the population of France, Sweden and Italy has seen a decline in real incomes. Markets are euphoric everywhere. US markets closed at record levels yesterday, boosted by companies reporting earnings higher than expected. If major economies are growing more slowly, which should mean lower exports, as shown by the increase in trade deficit, and if wages are not growing as fast despite a low unemployment rate, probably because most of the increase in employment is in the low-wage gig economy, then what is driving demand? The Office of Budget Responsibility in Britain thinks that a recession is almost inevitable as debt levels are high, so any increase in government spending, to stimulate growth, will result in unsustainable increase in fiscal deficit. Meanwhile, defaults on credit cards, personal loans and overdraft are soaring, as households are unable to service unsecured borrowing. "The combination of higher-trend growth and below-trend inflation is what the folks at the Bank of America-Merrill Lynch fund manager survey call the Goldilocks scenario," wrote M Chakravarty. Which means that interest rates will continue to remain low. The same bank reported that "private client cash levels have dropped to a record low as a percentage of total assets", which means people are putting more money into riskier assets, such as stocks. So what about India? Our markets are also in record territory, in sync with the rest of the world. Our fiscal deficit, current account deficit and retail inflation rate are all down and GST is being touted as the ultimate steroid for the economy, wrote Sajjid Chinoy. On the other hand, exports are growing by only 3%, the agriculture sector is in distress and state finances are stressed because of loan waivers. So, is it going to be cheers, or tears? All fingers and toes crossed.

The letter of the law.

A 10 year old girl has become pregnant after being raped by her mother's own brother over several months. The child is forced to get permission for an abortion from a judge because she is 26 weeks pregnant and the law allows abortion up to 20 weeks of pregnancy. A court in Chandigarh refused permission for abortion fearing for the safety of the child. Leaving aside the bestial nature of the crime, which is sadly all too common in India, there are many issues which are impossible to understand. Why didn't the mother take her to a doctor earlier? We can only guess, but it maybe because the girl has not yet had a period, so the mother was not alerted by her daughter 'missing a period'. Also the nature of the crime is so shocking that no ordinary parent can even imagine it happening to their own child, even if we read about more sickening attacks on children everyday. The Supreme Court has ordered examination of the child by a medical board before it decides on whether to allow the girl to undergo an abortion. By then the girl will be about 28 weeks pregnant. A little girl, practically a baby herself, raped by an adult she trusted, now undergoing a terrifying ordeal of attending courts full of formidable adults looking through every letter of the law to decide on her fate. At least the girl is still alive, whether that is a blessing for her only the future will tell. Not so lucky were children in Nithari, where poor children were raped, murdered and cannibalised. That is a classical case of police and politicians colluding with a rich criminal, Moninder Singh Pandher, to destroy evidence and prolong the investigation unnecessarily, in a bid to subvert the case. We see that everyday in India. Yesterday, both the accused were sentenced to death, but both are still protesting innocence. Unbelievably, Pandher has been out on bail since 2014, which is unique to India. For reasons unknown, no one in India uses the word 'pedophilia', including the press. In the West pedophilia is taken extremely seriously and there are dedicated police departments to go after these perverts. In India, on the other hand, there seems to be a silent conspiracy never to mention this crime. Thus, Ruchika Girhotra was continuously referred to as a teenager in the press, when she was just 14 years old, which allowed Rathore to escape with a laughable prison sentence of 6 months. As in everything we have laws against sexual abuse of children but everything is done to see that the perpetrators escape justice. No wonder pedophile tourism is a lucrative source of revenue for governments in India. Even now Pandher's son is defending his father saying,"...we will appeal against the CBI court's judgement." He should apologize to the families of victims and change his name. At least have some shame.

Can we create a pristine world again?

The earth is slowly getting covered in plastic waste, reported Jonathan Amos. In the last 65 years 8.5 billion tonnes of plastic has been produced, of which half was made in the last 13 years. Only 13% is still in use today and only 9% has been recycled. The rest has gone into landfills or is floating on the oceans, killing animals and fish. Prof R Vasudevan has patented a method of using waste plastic in building roads, which is cheap and makes the road virtually weather-proof. The patent was obtained in 2006, eleven years ago, and should have become the standard of road building in India by now but a short drive through any part of Delhi is still a nightmare of potholes and deep trenches filled with filthy rainwater. There are 8 agencies in charge of roads in Delhi, which means that not one claims responsibility and each blames the other for problems. This year is the same. The good news is that fossil fuels will gradually disappear as we shift towards renewable energy, once battery technology is able to store vast amounts of electricity produced from sunlight and wind. Trouble is that as renewable energy becomes more widely available the price of oil will drop, making it more attractive. At any price over $50 a barrel US shale oil becomes profitable to produce, which sets a limit on the upside. The population of the earth is set to increase to near 10 billion by 2050, which means more pressure on land for agriculture. The Bay of Bengal is said to have reached a tipping point from the run off of fertilisers, leading to growth of algae and bacteria. This is reducing oxygen tension in the water and if this falls any further it will lead to a 'no oxygen' status. A company in the US, constructing vertical farms, is attracting investors from across the world. Indoor farms will be able to produce fruits and vegetables but will they produce enough grains. About half the land in the world is used for grazing livestock and to grow fodder. If everyone became vegetarian it would reduce pressure on land, reduce the number of livestock and result in less production of methane. Barry Ritholtz wrote that the world is going to change even faster and new technology will disrupt old ways of life. What happens to all those who are unable to adapt to the rapid changes, or are made redundant by technology? Tens of thousands of migrants flooding into Europe is a sign of what to expect if numbers of people keep on increasing while technology takes away old jobs. How long before there is civil war in Europe as previous inhabitants get displaced by new arrivals? Shahbad Dairy, somewhere in the northwest of Delhi, is where the human flotsam has been dumped, Drugs, crime and rape are rampant and police are reluctant to go there. Is the world reaching its tipping point?

There is always someone.

The Supreme Court has set up a 9 judge constitutional bench to hear petitions against mandatory biometric identity cards. Previously, smaller benches of the Supreme Court have been giving confusing judgements, sometimes saying that privacy is a fundamental right, while denying it at other times. More recently, the Court opined that Permanent Account Number, or PAN cards, of taxpayers must be linked with Aadhaar number, while ruling that government handouts cannot be linked with Aadhaar. In fact, biometric identity was touted as solution to prevent leakages in government subsidies, which means stealing by local civil servants and politicians. But now, long-suffering taxpayers are to be forced to provide fingerprints and iris scans, like common criminals, while those stealing from the poor are free to carry on. In the case of biometric cards the government has been insisting that citizens of Indian have no right to privacy, while in a case against Facebook the government submitted that personal data is integral to life and dignity. For ordinary people like us, it is ridiculous that the government should be allowed to get away contradicting itself and the lawyer should be fined heavily for wasting the Court's time, but the government is probably arguing in support of its monopoly right to inflict violence against citizens, without actually saying it. There should be no need for such a case. Animals have no concept of privacy, and no one can be human without privacy. To argue that Indians have no right to privacy is to claim that all Indians are animals, which is a crime against humanity. Also, people may provide false personal information on social media but providing false information to the government will lead to arrest. However, citizens are trying to fight back against a ruthless state by not linking their PAN cards with Aadhaar. How are they doing it? Some have avoided linking by submitting their returns before it became mandatory to do so, while others are filing their returns manually, instead of online. Who is responsible for setting up the abomination of biometric identity cards? A man named Nandan Nilekani, who is a billionaire, with a glittering CV. He dismisses all opponents of Aadhaar, contemptuously calling them Khan-market liberals, JNU types, privacy-wallahs and said that "In India half are fake....Fake is the operative word". Yesterday, Nilekani said that there should be a law against "data colonisation", meaning that social media companies should not be allowed to use personal data provided by the users. Clearly, this man is a shameless stooge of the government, despite his immense wealth. What the government wants is to force WhatsApp to open its end-to-end encryption, so that it can spy on citizens. WhatsApp is free and Mark Zuckerburg cannot assault us, whereas we pay huge taxes to the government to lie to us and coerce us. All because some people are willing to sell themselves.

Quacks and chickens are reasons for immortal bugs.

"Indian poultry farms are breeding drug-resistant superbugs," wrote Natalie O Pearson. Per person chicken consumption is the highest in India, probably because other meats, such as beef, are more in demand in other countries. We will consume 4.5 million tonnes of chicken this year. "Worldwide, animals receive about twice the volume of antibiotics that humans do. Much of it is administered in doses that speed growth in livestock, but aren't strong enough to kill all the bacteria, leaving mutant germs to not only survive, but thrive and potentially spread." How antibiotics promote growth of livestock is a mystery. The FDA in the US permits the use of hormones to promote growth in livestock. Is that why sperm counts are dropping in the West? "More than 56,000 newborns die annually in India because of bloodstream infections that aren't cured by first-line antibiotics..." But, we do not have to wait for antibiotics to reach chemist shops. Effluents from drug factories in India contain concentrations of antibiotics a million times the safe limit. Why waste money treating effluent? The more the infections the more the sale of antibiotics. The government of India has started an Antimicrobial Resistance (AMR) Surveillance Network, wrote Sanchita Sharma. "The objectives are of enhancing awareness, strengthening surveillance, improving rational use, reducing infections, promoting research and supporting neighbouring countries in our collective fight against infectious diseases," said Health Minister, JP Nadda. Infections do not come from trees, but is passed on from someone who is infected. Overcrowding and lack of trained staff have been known to cause infections. These were the reasons why so many babies keep dying in hospitals in Bengal. Patients often stop taking treatment because of side effects or more commonly because they are feeling better and do not see any reason to continue to spend money on buying medicines. That is why tuberculosis is spreading and is increasingly becoming resistant to first line drugs. One major reason for inappropriate use of antibiotics is because there is no law against someone calling herself a doctor and writing prescriptions. The WHO found that 57% of 'doctors' in India do not have any medical qualification, and 31% of so-called doctors , who practice allopathic medicine, are only high school pass. This is probably an underestimate because thousands qualifying from very dubious homeopathy, ayurveda and unani colleges also call themselves doctors. Politicians are reluctant to ban them because that will create an acute shortage of doctors. Better to let quacks treat people and blame registered doctors. When you have a huge population quantity is better than quality.

BJP is the new Congress, including cow.

"Can Hindutva-based politics deliver growth over the long run, as Hindutva votaries claim? Or would it derail progress, as their opponents argue?" asks Roshan Kishore. Prof Jared Rubin has explained why the Arab world fell behind the West even though the Ottoman empire was much more advanced in every walk of life. "The rulers of the Arab world drew their legitimacy from the clergy. While this allowed the rulers to maintain order in a violent world without having to take recourse to military action very frequently, it also meant that the clergy came to have an outsized influence on Arab society and economy, stifling its growth over the long run." But why don't the elite protest? It is because "people supportive of change refrain from expressing their true preferences for fear of punishment or social opprobrium" said Prof Timur Kuran. This is known as "preference falsification". So what of India, where killing people in the name of saving cows has become commonplace, ever since this government came to power? Was the Congress any different? Not really, according to Steven Wilkinson who pointed that "whether or not the Congress party acted to suppress Hindu-Muslim conflicts in a particular region depended on the local party dynamics and the extent of Muslim support for the party in the region." Chief Minister of Bengal, Mamata Banerjee, is an ardent supporter of Muslims, suppressing news of attacks against Hindus. Ronojoy Sen wrote that the BJP is using handouts for getting votes, exactly as the Congress used to do, and forming governments in states by bribing opposition politicians. The BJP is using governors it has appointed to interfere with functioning of state governments. Kiran Bedi, who was a decorated police chief in Delhi, is spoiling her reputation as the Governor of Puducherry, by interfering with the workings of the government, while events in Nagaland have reached a level of chaos. Modi came to power promising "minimum government, maximum governance", but has he delivered? He has appointed 75 ministers at the center. Rupa Subramanya found more repression and little governance, while Yamini Aiyer wrote that the government is very good and coining slogans but poor at delivering on his rhetoric. The government is to milk oil companies, that it controls, of Rs 2 billion to build a statue to Sardar Patel. It forces companies to pay huge dividends to plug revenue gap, exactly as the Congress used to do. Farm loan waivers will cost Rs 2.57 trillion, much more than Congress spent. Populist policies carry the risk of stagflation, as during Congress regime, wrote A Nageswaran. Cow protection is a naked deception to fool people into believing that BJP is different from the Congress. Ironic that Indira Gandhi's election symbol was a cow and calf. No wonder, Fali S Nariman is reminded of June, 1975.

A little baby boy at the center of adult drama.

Charlie Gard, a baby boy, just 11 months old, is at the center of an international drama, involving his parents, the Pope, President Donald Trump, the US Congress, the Great Ormond Street Hospital (GOSH) and various British Courts. Little Charlie suffers from, what is known as, Encephalomyopathic Mitochondrial DNA Depletion Syndrome, a genetic disorder. Seems that, normally the mitochondria in a sperm breaks down at the time it fertilises an ovum so that only maternal mitochondria is passed down to babies. Why Charlie's mitochondria is depleting is not known, but since mitochondrial DNA has to be present in every cell his muscles and brain have suffered extensive damage. Nucleoside therapy is highly experimental and has never been tried in anyone with Charlie's condition, so the doctors at GOSH did not use it on him, presumably for fear of killing him. Doctors must function according to the principle of 'Do No Harm', which is part of their training. The doctors at GOSH appealed to the courts to switch off Charlie's life support systems, which was granted. However, Charlie's parents refused to give up and appealed first to the Court of Appeal and then to the Supreme Court, losing both times. At this point the case became a public drama. A US doctor claimed that nucleoside therapy may help Charlie, the Pope and Trump made statements of support and now the US Congress has offered permanent residency to Charlie. Meanwhile, a sympathetic public has contributed 1.3 million pounds to a fund set up for Charlie's treatment. Though extremely sad the whole case has become a bit of a farce. Why are British doctors and courts refusing to transfer Charlie to the US? There is enough money to transfer him by air ambulance with full life support. Once Charlie is out of the hospital their responsibility ends. We understand that parents love their son and are unwilling to accept his death but it is impossible to understand why they want to keep him alive in a vegetative state. Since mitochondria is inherited from the mother it is possible that Charlie's mother feels guilty about his condition and is stubbornly insisting on keeping him alive in the hope that some treatment maybe invented which will cure him. The boy who inspired the film 'Lorenzo's Oil' lived for 22 years. But to what end? At least he was able to breathe on his own, which Charlie is unable to do, which means he will need 24 hour intensive care. How long can that be sustained? As for politicians, they have no business meddling into something they do not understand and those that are using this unfortunate boy for publicity should be ashamed of themselves. For little Charlie's sake, courts in Britain should allow him to be transferred, doctors in the US should not experiment on him and his parents should accept that science cannot control nature. Our abilities are finite. 

Inflation rate maybe the same but India is not the US.

"The nosedive in consumer price inflation to 1.5% in June prompted Arvind Subramanian, the government's chief economic adviser, to talk of a paradigm shift in the inflationary trajectory," wrote M Chakravarty. Not just in India, CPI for June fell to 1.6% year-on-year (y-o-y) in the US, the fourth successive month that it has fallen. In China CPI for June was 1.5% y-o-y, "well below the government's 3% target" and in Japan the CPI for June was 0.4%, "way below the target of 2%". This seems to be a long term trend globally. Why? Because the price of oil is down and likely to remain so. The OECD-FAO predicts that "real prices of agricultural and fish commodities are anticipated to follow a slightly declining trend, keeping them below previous peaks over the next 10 years." Bad news for Indian farmers who cannot export their way out of trouble in the event of a bumper crop, wrote R Kishore. The Bank of International Settlements has pointed to suppressed wage inflation because labor has lost its bargaining power as manufacturing has shifted to low wage countries in Asia and because of the rise of automation. In the case of India, the present government has changed the base year for calculating retail inflation to 2012, when the average rate of CPI was  9.3%. While the rate of CPI was almost the same between the US and India in June the difference is that the interest rate in India was left unchanged at 6.25% by the RBI in June, while the Federal Reserve increased its Funds Rate by 25 basis points to 1.25% in the same month, a difference of 500 basis points. Why the difference? India has a history of high inflation because of limitation of supply. Food and beverages make up a large part of our consumption basket and agriculture is largely dependent on monsoon, which is unpredictable. The government runs fiscal and current account deficits which are plugged by borrowing from the market. Government debt has reached 46% of GDP and 77% of its borrowings are used to pay interest on existing debt. The central government has reduced its deficit to 3.5% of GDP but states are having to borrow more to pay off loans to farmers. A decade of near zero interest rate has resulted in household debt reaching an eye-watering level of $12.7 trillion in the US, which is 6 times the GDP of India, while the federal government has a debt of $19.9 trillion. The US can print dollars, which is the reserve currency of the world, but if India prints rupees then the value of the rupee will fall. The stock market is in record territory, with price/earnings ratio at a record 23.11%. A hefty cut in interest rate could see a fall in the rupee and an outflow of foreign funds which will result in a crash in share prices and also in the value of the rupee. The US, Japan and Europe want inflation to rise, do we?