To Dr.Freud

Let me make no bones about it, Mr.Freud,
I have wracked my brains,
To know where you are coming from.
Where I am from, Mr. Freud,
Your subtleties and your caveats,
Your thousand insights into specifics,
Your bold assertions about generalities,
Sound like fairy-tale excursions into diseased minds.

I hear about the bride
Burned for dowry
By the surface monkey.
Thousands of brides
Burned by thousands of surface monkeys
In thousands of homes.

And horrific pictures from the war front,
Wars started by thousands of surface minds
That will give Cinderella to starving kids
And overlook the cinders of lost dreams.

Where is the magic wand
That can stop this malaise ?

Charity,
Like an inscrutable goddess,
Almost like a precious specimen in a museum
Show-cased to inspire awe,
Emerges in sporadic spurts of munificence,
To spreads her arms.
There’s my sculpture.
She is fully clothed.
That’s charity !

The dungeons of the mind
Carry wonderful gifts indeed !

Amidst the dread of hunger
And the nagging persistence of misery,
How do you coax archaic behemoths
To sanity ?
Tell me, and I will listen,
Let noble thoughts come to us from all sides,
Say the ancient Hindu seers.
Should we go looking for instinctual streams
That have evaporated in historical time ?
Or sift through the ceaseless refrains of our discourse,
Running in autocratic grooves,
For centers of meaning ?

by Choudhury Jayant Praharaj

US Federal Reserve intervention in the Mortgage Backed Securities market

The housing market collapse about two years ago led the US Fed to step in and buy MBSs worth about one trillion dollars. Now, the Fed is planning to unload its MBS while buying Treasury bonds at the same time. As the Fed buys Treasury bonds, Treasury yields should decrease, everything else remaining same. As the Fed unloads MBSs, MBS yields should increase, everything else remaining same. Will additional MBSs be issued and sold in this environment ( in addition to the ones already on the market or in the possession of the Fed ) ? Will additional MBSs be lapped up enthusiastically by investors, as they were before the crisis unfolded ? Probably not to the same extent as before the crisis, since the risk perceptions have changed. The “fundamental” price of an MBS is based on the expected cash flows from mortgage loan repayments. Market madness and bubbles can drive the prices to levels very different from “ sane “ valuations. However, the current environment is unlikely to sustain this kind of madness. The “ fundamentals “ have once again become paramount. With high mortgage default rates and an uncertain economic environment, MBSs are no longer the prized assets they used to be before the crisis. So, there will be much less enthusiasm for any new MBS issue.

What are the current realities in the housing market ? Housing starts are depressed. Sales of new houses are low. And all this while mortgage rates have fallen through the official recession and even after the end of the official recession. People’s affordability perception for new homes has changed due to the current economic difficulties. Therefore, the effective ( economic ) demand for new mortgages has most likely gone down, driving the market mortgage rates lower.

Moreover, the ability to repay a mortgage is very much a function of the interest rate on the mortgage, in addition to the individual’s expected income levels and assets. The market may have gone into a mode where the mortgage-issuers are issuing new mortgages only to individuals with high credit-worthiness and at interest rates that ensure repayment. It is difficult to gauge from the available literature if this is a factor or not.

Also, the higher default rates and the previous crash of the MBS market means that investors will be less interested in buying new MBSs. Therefore, much less new money will be available for lending on the housing market. The fact that interest rates have gone down despite this dynamic means that one or both of the factors described in the previous two paragraphs are applicable to the current housing market.

So, back to the original question. Will the Fed’s unloading of 1 trillion dollars ( at current, pre-unloading valuation ) worth of MBSs over a year or a year and a half or over whatever length of time the Fed wants to do it lead to a second housing surge, if not a boom ? In other words, is the stage being set for a mini-boom ? In ideal environments, the value of an asset should reflect the actual expected cash-flow from holding the asset. The fact that the Fed was able to distort this process by buying the MBSs in the first place is cause for concern. Now, the Fed is going to distort the prices by making MBSs artificially more attractive than the fundamentals warrant. Either investors will respond to this madness or they won’t. If they do, the stage may well be set for the issuing of new MBS, a mini-bubble and a possible second financial crisis. If they don’t, the Fed MBS sales will not be worth 1 trillion dollars. The Fed will then adjust the amount of its Treasury bond purchase to keep the total cash injection to the 600 billion dollar value it announced. Hopefully, fundamentals will carry the day in the MBS market.

Which raises the question, why does the Fed need to unload the MBSs at all ? Since its cash injection aim can be achieved through purchase of Treasury bonds, why distort the MBS market yet again ? Hopefully, the MBS market will go by the “fundamentals” rather than by factitious momentum created by the Fed.

Also, it may be high time for debates into market failures in laissez-faire economies. A money-printing entity that responds to the failures of economic entities encourages moral hazard in different shapes and forms. However, as long as the mechanisms to prevent such market failures do not exist, these interventions will continue to be a necessary evil. Regulation over overly complicated derivatives is one way of preventing the market from losing touch with reality. Also, some optimists will argue that the simplest fix to the problem is to make sure that lending euphoria is curbed by strict evaluation of credit-worthiness. Why did this strict evaluation not happen prior to the last crisis ? Is it because the lenders weren’t careful enough ? Or is it because their calculations were thrown off by the impact of the recession on the cash flows of families ? The timeline shows that the slump in the housing market happened before the beginning of the official recession. So, most likely, the methods used to evaluate credit-worthiness were themselves flawed. The public still does not have a clear answer as to whether the housing glut was created due to the inability to implement good credit-worthiness criteria for extending loans.

Feasibility analyses may need to be done on possible insurance schemes that help cover for such exigencies. If reasonable and affordable insurance schemes cannot be devised, then it may be necessary to completely revise economic paradigms in order to prevent this kind of failure.

The American public debt and the fairness question

Whenever there is a large build-up of public debt, the question of inter-generational fairness becomes paramount. Actually, it is slightly more complicated than that. In addition to inter-generational fairness, it raises questions about the kind of society we want to have, that is, the question of intra-generational fairness also becomes relevant. Specifically, the level of egalitarianism in society is an issue that cannot be avoided if one wants to address this question seriously.

Let us address the second issue first. One has to answer the question – why do we have a welfare system at all ? Several answers can be given. It should be a no-brainer that the desire to have a humane society should be a major motivator for having a welfare system. However, given the paralysis of the system when it comes to making welfare systems solvent or strong now and for the future, one wonders whether, as a matter of statistics, these humanitarian instincts are dominant or not in a country like the United States. Other more cynical-sounding reasons can be proffered, like economic efficiency reasons. Different societies have different emphases when it comes to this question. The fact that Congress after Congress in the United States, Republican and Democrat, have gone along with the current kinds of levels of public spending is proof that the democratic system has voiced its opinion that the current welfare system is something desirable.

Next, let us address the question of inter-generational fairness. At small levels of public debt relative to GDP or to tax revenue, inter-generational fairness is not a burning issue. However, at high levels of public debt like we have currently in countries like the United States and Japan, inter-generational fairness becomes a crucial question. Most reasonable people will agree that, as far as possible, current generations should pay for current expenses. Because if they do not, and if the public finances have to be made solvent in the future, then future generations will have to shoulder the burden. An exception may be made for developing economies, which tend to have much higher growth rates, and which often have urgent needs for building infrastructure. When the government of a developing country goes for a large spending spree on infrastructure and accumulates a huge debt, it is typically done with the justification that the growth resulting from these projects will raise more than enough future revenues to pay back the debt. The same argument does not apply to developed economies, which tend to have much lower rates of growth. Therefore, with current realities, it is impossible to justify a large build-up of public debt and a large shortfall of tax revenues if one cares about inter-generational fairness. Even in a developing country, a government must be held accountable if it goes for excessive build-up of public debt without at the same time creating the conditions necessary for rapid future growth.

Are these issues intertwined ? To some extent, but not so much as to confound public policy in a country that cares for fairness, humaneness and stability. So, this article ignores the question of how these issues, the one of humaneness, the one of economic efficiency and the one of fairness, are interlinked. It does little to add any further clarity to the discussion, especially in a situation of debt-to-GDP ratios that approach 100% or higher.

Optimists are incorrigible when it comes to their optimism. I am sure there are some who will think along lines like this – since the current rich, who are not paying enough taxes to cover current expenditure, will most likely bequeath a part of their wealth to their progenies, some amount of fairness will be restored due to the inheritance tax. This argument will work only if the current rich want to and will indeed bequeath a substantial part of their wealth to their progenies. If instead, the current rich spend most of the wealth that they get to keep due to the elitist tax cuts of the last decade, then inheritance tax will be unable to restore the balance in the public finance. No one in their right minds will entrust the future health of the public finances to such questionable sources of revenue. Inter-generational fairness is unlikely to be restored by this method.

The question of how deep tax cuts should be if they are implemented in response to recessions is something that has not be subjected to careful analysis. In addition, there is the question of how long deep tax cuts should continue, especially when they threaten to lead to a huge build-up of public debt. Neither the question of intra-generational fairness nor the question of inter-generational fairness will become such big headaches if more carefulness is observed when cutting taxes. Similarly, neither of these questions will assume the level of exigencies if the political system can muster the will to reverse deep and prolonged tax-cuts when common sense dictates so.

Taxes or spending ?

Whether the 1.4 trillion dollar US budget deficit should be balanced by increasing taxes or by decreasing spending is a question that is likely to be at the forefront of public policy discussions for quite some time to come. Republican intransigence will make it difficult to raise taxes. As for spending, the Republicans had control of the White House and of the Congress during the George W. Bush years. Yet even they could not cut spending to the level that could have balanced the budget, thereby proving that most of the spending is needed direly. The extra spending due to the wars started in the wake of the 2001 attacks is another matter. There can be different opinions about how necessary they were. But the build-up of the debt due partly to these wars has happened, and will create increasing strains on public finance in the future.

As for increasing taxes, there is what appears to be a conspiracy of inaction on this question. Any kind of excuse is brought forth about this. If there is a mild recession or a deep recession, then many pundits argue that increasing taxes is not a good idea. The justifications are often unclear. The usual argument goes like this. If, say, corporate taxes are raised, companies will invest less since their future profits will be taxed at a higher rate. This argument has serious problems. In a capitalistic economy, where most companies have strong competitors for most of their products, innovating and investing are necessary for competition. That my future profits will be taxed at a higher rate does not mean that I will stop innovating and investing and give my competitor a free run. Unless there is collusion between companies, a large-scale investment freeze due to higher tax rates is difficult to understand in a free market competitive environment. A large-scale investment freeze due to depressed economic sentiments makes more sense than one due to tax rate increase. When the public debt is not very burdensome, this kind of efficiency arguments can carry force. However, during times of high debt levels, this conventional wisdom may need to be challenged and subjected to scrutiny. Also, corporate tax revenues do not constitute that large a percentage of the total revenue. The historical data shows an increase of 100-200 billion per year in corporate tax receipts from lower corporate tax rates. However, this is small compared to the deficits.

Right now, companies are holding on to large amounts of cash. Whether they are doing it due to uncertainty about tax rate policy, or whether they are doing it due to a general environment of negative economic sentiments and depressed demands, is not clear. Once again, in a competitive environment, and in a world where new products need to be introduced almost as a matter of routine, the tax-policy component of this lack of investment enthusiasm is difficult to make sense of since any particular company and its competitor will face the same tax rates.

Also, if I am an owner of stocks, I and everybody else who has expendable money to buy stocks will face the same tax rates. Also, as a stock owner, to what extent will I forego the opportunity to buy additional stocks in a company that has an excellent innovation that it intends to incorporate in a new product ? Also, if I have money to buy stocks, and if the capital gains taxes are raised, will I buy more or less stocks ? It is a complicated question, and the response to higher capital gains taxes can be to buy more stocks or to buy less stocks depending on the circumstances of the individual.

How about income taxes ? What happens when income taxes on high income earners are decreased by a lot ? This is most likely to lead to a re-allocation of income towards luxury good compared to basic goods. If high income earners tend to save a larger fraction of their retained earnings, then it can also lead to an increase in savings available for investment. This can spur growth and create new jobs. However, it has to be correctly quantified lest its effect is exaggerated. Also, the question arises, why did this factor not lead to high enough revenue increases during the George W. Bush years to offset the effect of lower tax rates on the revenue ? In fact, if one compares the trend of income tax receipts as a percentage of GDP through the 1990s and the first decade of this century, it is quite clear that, depending on which year of the Clinton period is compared with which year of the George W. Bush period, income tax receipts as a percentage of GDP remained either the same or decreased from the 1990s to the middle of the last decade. If one compares the middle of the Clinton years with the middle of the George W. Bush years, which were non-recessionary periods, the income tax receipts were almost the same as a percentage of GDP. If one compares the highest income tax receipts of the Clinton years with the highest income tax receipts of the George W. Bush years, then they decreased from about 10% of GDP to about 8% of GDP. Also, GDP growth was no better during the George W. Bush years than during the Clinton years.

Even when the economy is out of a recession, there is paranoia about increasing taxes. Again, many of the same arguments are given, often without any cogent logic to them. High tax rates have existed in the past, and have had a positive effect on public finances. This is consistent with some of the arguments outlined above about competing companies, about the response of investing entities to increases in corporate or capital gain taxes and about the fact that GDP growth rates do not respond to tax decreases so drastically as to offset the effect of lower income tax rates.

What about a situation that involves a combination of deep recession by historical standards and also an alarming level of public debt, like now ? Even here, the paranoia about higher taxes may well need to be challenged. Actual historical effects of tax rates on GDP growth and on investor confidence need to be quantified. The bigger evil has to be identified. Excessively alarmist sentiments about higher tax rates can prove fatal. It may be better to have lower GDP growth rates if the reward is the avoidance of crisis-like situations like a debt default in the future. What about unemployment ? Is it better to risk lower growth and higher unemployment to make the system solvent now, or is it better to wait for the economy to recover ? The question is a difficult one, and I have not come across deep quantitative studies that address this trade-off. The instinct of this writer is that it is better to restore some of the higher income tax rates on the super-wealthy. The economy is growing according to official statistics even though unemployment numbers have stayed at >9.5% for more than a year. This is a better time to judiciously fix the revenue side than to wait for a crisis like a sovereign debt crisis. If a debt default occurs, all the trade-offs will become more difficult. Also, the reality is not encompassed by the efficiency aspect alone, as is often made out to be the case in debates. There is a fairness aspect also that tends to get overlooked. Alarmist sentiments can be justified only so much and not more. Judiciously identifying areas where taxes can be increased without affecting growth very negatively will be one of the tests of a mature administration and a mature Congress. Employment generation, growth and identifying ways to increase revenue are things that need to be addressed simultaneously, and not in sequence.

European countries typically tend to have high income tax rates and high payroll tax rates. This may be a good model to adopt in America as well. With such a distribution of tax rates, a lot of the problems facing the American economy now could have been avoided. The corporate profit plough-back component of investment is not affected directly by these tax rates. The stock ownership component, as argued above, can move in either direction, in response to higher income taxes. Whether such a judicious approach to revenue restoration will be followed may well determine if a bigger future crisis can be averted in America.

Need a debt to revenue ratio metric - the dangers of inducing complacency and creating economic time-bombs

There is a lot of talk about the exploding debt to GDP ratio of the United States. In fact, the situation is dire around the world, with major economies like Japan sitting on mountains of debt. The official Chinese debt to GDP ratio is most likely misleading because it does not include debts of provinces and other government obligations. It is not clear if the official figure includes Chinese sterilization bonds. Japan has a debt to GDP ratio of over 200%, probably a record for advanced peacetime economies.

In this kind of situation, it is imperative to switch to other kinds of metrics that really characterize the true seriousness of the situation. Taxes cannot be increased or raised overnight because of political realities. Thanks to right-wing politicians and decades of intellectual brainwashing by right-wing economists, raising taxes to meet public finance needs is an uphill task. A debt-to-revenue ratio is a better metric for capturing the true urgency of the debt problem.

The public is often not aware of the dangers of exploding debt. Right-wing politicians talk glibly about balancing the budget by cutting spending, forgetting ground socio-economic realities. Public welfare systems provide much-needed and often indispensable assistance to those in distress. Also, doing away with too much of the welfare spending can easily have a negative impact on economic recovery during these difficult times. Even during good economic times, drastic welfare cuts can induce economic panic and recessions.

The United States gave a large tax cut to the wealthy and to corporations as it entered into major war spending around the world. Wars are supposed to be periods that require economic sacrifice. And common sense dicates that the rich, who have most to gain from security, should sacrifice more during wars. Just the opposite happened. And the community of economists were unable to highlight this incongruity to any significant extent. Right-wing economists of different colors and stripes are naturally enthusiastic about tax cuts. Left wing economists lacked clout in the right-wing Bush administration. War co-existed with a domestic picnic in the form of low tax rates for the wealthy and a booming housing market. I wonder what Mr. Tom Brokaw has to say about this generation - the most selfish generation ?

The battlelines have been drawn. Today's rich refuse to shoulder the burden of war expenditures and the burden of a much-needed welfare system. The stage is being set for significant economic distress for future generations. There may be a sovereign debt default by Japan and the US down the road, thereby constraining the ability of these governments to raise the debt necessary to meet their deficits. Given that the public is not well-versed in the nitty gritty details of public finance, politicians will not try to increase taxes due to their unpoularity. They will try to take the easier way out and try to do drastic cuts in public spending.

The United States had high tax rates in the 1990s with no deleterious effect on economic growth or corporate enthusiasm. A surplus was turned into recurring deficits due to decade-long tax cuts in the wake of a mild recession in the early 2000s. Throughout this decade, figures like Alan Greenspan called for reducing the deficit, always revealing their preference for spending cuts rather than reversing elitist tax-cuts. The damage has been done. It is very difficult to arouse the public will or the political will to raise taxes and to set the fiscal house in order during times of distress.

Future generations in these countries may well have to bear the major brunt of this mismanagement. Will social disturbance become the norm rather than the exception in these circumstances ? One is reminded of a poem by Langston Hughes, written in a different context and a different time, but which may hold lessons for this situation.

What happens to a dream deferred?

Does it dry up
like a raisin in the sun?
Or fester like a sore--
And then run?
Does it stink like rotten meat?
Or crust and sugar over--
like a syrupy sweet?

Maybe it just sags
like a heavy load.

Or does it explode?

Will a future society, groaning under an unmanageable public finance, and faced with the prospect of having to deal with new problems like green investment, explode in reaction to the fundamental and inherent inequities in the system ?

If a sovereign debt default does happen, will Japan, or the United States for that matter, have to go for shock-therapy-like steps involving drastic welfare spending reductions ? Will the tens of millions of Americans who depend on these payments and who have made significant contributions to the economy take such measures lying down ? At what level of economic pain will the public begin to lose faith in the rhetoric about efficiency ? What will the reaction be towards a political class that has mismanaged the public finances to such an extent ? Will the public take kindly to the rich of today, many of whom have lobbied Washington for tax cuts, and who have not showed a spirit of sacrifice when the country needed it ? Why will the class that supplies the majority of the war dead live in a spirit of compromise with the rich elites who do not sacrifice now for the country, and do not intend to sacrifice in the future for the country, if the welfare system becomes badly damaged due to deficits ? Rich innovators and rich entrepreneurs depend on a complex economic web that supports them and provides the conditions under which they are able to create wealth. As public finances become stressed, the poorer people will begin to question the value and utility of such innovations. Society itself may have to re-examine its priorities. National groups like Japan and the United States may have to re-examine what exactly it means to be a nation. At what level of economic parochialism does national cohesion becomes a meaningless thing ? What is the breaking point beyond which the public loses patience with the lack of a spirit of sacrifice on the part of the rich ?

The Great Recession and economic justice

So, the Great Recession is here. American unemployment rate is 9.6%, the highest since the Great Depression. American poverty rate is around 17%, the highest since the 1960s. And add to that mind-boggling poverty in countries like India. For example, India has anywhere between 300 million and 500 million people in poverty. The growth rate that gets advertised in India is confined mainly to urban areas, and that too, mostly to a narrow self-serving elite. And the future growth trajectory of the world economy as a whole does not inspire great optimism at the moment. Add to that possible long-term losses due to environmental catastrophe, and the picture turns pessimistic.

Despite the presence of incorrigible optimists who would work on nothing other than space exploration technology, the time is one for deep introspection about how to order society in the economic domain. All of a sudden, some old dictums have become very relevant. And the ones I have in mind are from socialistic parlance. One says “ From each according to his ability, to each according to his need “. The other goes “ From each according to his ability, to each according to his work “.

American Republicans will probably eagerly embrace the second dictum. They have spent and intend to spend most of their fire-power to defeat the first dictum. They do believe in a particular version of “ from each according to his ability “, that version being the capitalistic free-market demand-supply version. And the version of “ from each according to his work “ that they are okay with is that represented by the free-market wage. If you are illiterate or old or disabled, and if the unemployment rate is high, most of the Republicans are happy with a “ take care of your own needs “ kind of principle.

Of course, with CEOs of top companies drawing millions in salaries as the job market suffers, the principle being followed sounds more like “ from each according to his superficiality, to each according to his greed “. Given how the American establishment has genuflected before Reaganomics and Social Darwinist ideas, this should not come as a surprise. And yes, there is a precedent – of robber barons carrying out their agenda of greed while America reeled from the Great Depression.

While America is not a right-wing dictatorship, there are aspects of it that make one wonder if it is any different. The amount of investment in the creation and satisfaction of artificial wants and the utter lack of urgency about the welfare system effectively means a decoupling between the well-to-do and the struggling masses, somewhat similar to the urban-rural divide in India. If this decoupling becomes more pronounced, and if right-wing attempts to destroy the public school system and the welfare system succeed, we may well see a slide towards a state of affairs described by “ to only the few who have power “.

The actual final equilibrium can be anywhere between “ to each according to his needs “ and “ to only the few who have power “. The latter state of affairs is untenable, and much conflict may result to pull society towards some semblance of the former. In countries like India, that process is already underway in the form of food riots and violence. America, staid America, fastidious about adherence to a locally optimal rule-of-law, will have to find its own way to solve the economic justice problem.

India - The land of denial

About 90 years ago, an American tourist named Katherine Mayo wrote a scathing attack on the contemporary Indian scenes and what she understood to be Indian attitudes about important socio-economic questions. The book, called " Mother India ", pulled no punches in its denunciation of Indian attitude to women's health, untouchability etc. The reaction was swift, and equally scathing. Gandhi described her book as a " drain inspector's report ". The Mahatma lost no time in berating her for focussing on the country's seedy aspects. Lala Lajpat Rai was equally acerbic in his denunciations of the American tourist, basically stating that this is a writer that looks for mud, and wallows in it when she finds it.

About 90 years have passed since Miss Mayo wrote her criticism of Indian society. Somewhere between 300 million and 500 million Indians live in dire poverty in 2010. Millions of children die from preventable causes every year. Caste distinctions and caste-based exploitation are still realities in India. What would the Mahatma say if he saw today's India ? In many ways, the " drain " that the Mahatma referred to so sarcastically has become more pervasive and more ubiquitious.

How do you explain away such gargantuan failures ? By pointing to a few successful software firms and a few billionaires ? And dismissing the travails of the country's majority as a case of " drains ", as Gandhi did 90 years ago ? No matter what the merits of Miss Mayo's book, or of the counter-attack against her, today, in 2010, the " drain " is a living reality and it stinks. It stinks even more than it did 90 years ago because we live in the 21st century.

Words and action in India

India is a land of appalling poverty and vices. Today, sixty years after independence, the number of people in poverty is a staggering 300 million to 500 million. There are more people living in abject poverty than there were people in India in 1947, when the country became independent.

The explanations for this sorry state of affairs are diverse. Initial conditions having to do with the state of the country when the British left and the exigencies of dealing with wars, defence budgets and terrorism are often proferred as the reasons for this gargantuan economic failure. Others go for facile explanations like socialistic inefficiencies during the first few decades of independent India, conveniently overlooking the fact that almost twenty years after economic liberalization, poverty and the accompanying evils continue unabated, with little or no change in the trend of poverty reduction. Those who believe in cultural factors as being paramount determinants of economic performance will pounce on the fatalistic oputlook of Indians. Or the propensity to keep women and untouchables in an uneducated and unenlightened state. Whatever the major reasons for India's dismal economic state may be, and whatever the proportions in which these different factors contributed to the current sorry mess, the evidence is now overwhelming that when it comes to poverty eradication, there has been a yawning gap between words and actions, between stated intent and actual implementation.

Indian leaders during the British rule differed subatantially in their outlooks about the right way to approach the questions of poverty, untouchability and inequality. Gandhi brought his concept of God into almost every discussion about Indian society, believed in self-sufficiency and expressed his distrust of modern industry. Nehru was explicit about his atheism and believed in big industry.

Gandhi has stated somewhere that he intuitively believes that natural disasters are ways for God to express his anger at man's failings. For example, he has stated that the 1934 Bihar earthquake was a punishment for India's lack of progress in dealing with untouchability. It is interesting to note here that Gandhi has himself come under attack from leaders of India's untouchable classes for his gradualistic approach to the untouchability problem. Moreover, by making such pronouncements, Gandhi was leaving the field open for those in Hindu society who argued, and still argue, that being born an untouchable was itself a punishment for past sins. Gandhi clearly believed in the transmigration of souls. While making this statement about his intuitive belief about natural disasters as a tool of retribution, Gandhi was clearly forgetting that other people might argue that India's subjugation to the British was possibly retribution for past sins, or that untouchability itself was possibly retribution for past sins or that war stemming from human greed was possibly retribution for past sins. Surely, Gandhi must have been aware that the same kind of " intuitive " arguments are very much used by reactionay elements in Hindu society when it comes to untouchability.

By taking Gandhi's " intuitive " argument to its logical conclusion, arguments may be made that God has punished Indians with crushing poverty. And surely, the lack of initiative and action on the part of most Indians about socio-economic issues must, if Gandhi's moral framework is valid, invite further retribution from the same God. It reminds one of facile arguments that give kudos to India for its democratic framework and its avoidance of catastrophic famines, when, in fact, a slow and prolonged holocaust takes place in the form of starvation deaths and deaths from preventable diseases. Gandhi's argument seems even more strange when one takes into account the fact that untouchability was not limited to any specific region in India. The question will surely be asked - What kind of God punishes a region to send a message about a national problem ? Useless theorizing and neglecting " intuitively " correct action is an Indian malaise. No wonder, almost 80 years after Gandhi's statement, all the makings of a retribution-like environment still exist in India. It would be interesting to know what Gandhi would say about today's challenges pertaining to environmental disasters and poverty.

The scum also rises

I am heartbroken today. I am reading a book about a former US politician. I am aghast to find out the extent to which crime, sex and money power has had a stranglehold on US politics. I always knew that the Americans take a superior attitude on the world stage. And they are callous to the extreme about foreign lives during wars. However, the level of cynicism in internal US politics is disturbing, to put it mildly. I guess it goes with the territory. Only a group of politicains that are this corrupt can behave like brigands on the world stage.

Mobocracy, democracy and secularism in India

Sinister undercurrents of majority Hindu fundamentalism have waxed and waned in their hold on the Indian political process through recent history. Democracy, enshrined in the constitution, and dutifully executed as yet another religious ritual in election cycle after election cycle, has sometimes proved dominant over these instincts and sometimes, it has lain supine as communal madness has swept the country. At other times, political fronts and cliques have worked insidiously and assiduously to misuse existing structures, bend them beyond recognition in order to achieve their narrow sectarian aims and in the process reduce democracy to a mere circus.

Majority fundamentalism based on atavistic notions of cultural supremacy is a dangerous component in the political process of a democracy like India. In a recent High Court judgement, such atavistic considerations were laid out as justifications for the court’s decision. I have discussed this issue at some length in other articles. What I intend to do here is discuss how India’s democratic ethos has hemorrhaged from the attacks of communal forces.

Whenever the current constitutional system becomes inconvenient for the right-wing Hindu fascists, they try to involve the mob. Now, on the far left, Maoists also think that the constitutional system cannot solve the problems of the nation, and they also resort to extra-constitutional means and the use of force. That the far right wing and the far left wing both think that the constitution is an inconvenient barrier to realizing the most just society is a well-known fact in India. What is interesting, however, is how the right wingers, who themselves resort to violent means and themselves flout the law for their ideological objectives, waste no time in denouncing the tactics of the Maoists.

Take the demolition of the Babri mosque in the early 1990s, for example. A nationwide yaatra or journey with the aim of energizing the Hindu base resulted in the destruction of the most controversial structure in the country. An utterly careless administration in the state and an utterly irresponsible political formation combined to create a situation where mobs went on a rampage and destroyed the mosque. In typical Indian fashion, the constitutional system responded sluggishly. All the individuals responsible for this drama have yet to be brought to justice.

In another instance, a government led by right-wing elements has looked the other way as mobs went on the rampage in the aftermath of a train-burning incident. What should have been a straightforward law-and-order problem became an exercise in mobocracy. The state where this occurred has been aptly described by some writers as a laboratory of hatred. It is the standard tactic of those trying to impose their views of Hindu supremacy on the public.

The killing of Christians and the burning of Christian homes in India is another instance where the right-wing formations resort to extra-constitutional means to enforce their agendas along lines of cultural supremacy, cultural purity and a parochial interpretation of nationalism.

The right-wing political and ideological formations have succeeded in taking India down a road where the norms of constitutional democracy have been compromised and mobocracy has become an important element, if not the dominant element, in the nation’s affairs. The implications for the country’s future are grave. That the judiciary, in its recent verdict in the Ayodhya case, has put a stamp of approval on the ideologically motivated lawlessness of the past is a legitimization of these mobocratic trends. It is a shot in the arm of those who use these mobocratic methods to their advantage. It is a sign that undercurrents of Hindu fascism have finally manifested themselves in some of the most sacred quarters of the democratic system. How the same judicial system can justify prosecuting violent leftist ideologues is beyond the comprehension of this writer. No democracy can uphold the rule of law when the judiciary buckles under the pressure of mobocratic elements or actively colludes with them. That is what has happened in India. When future historians look back at the history of the first hundred years of independent India, they may well find that India’s journey from the Constituent Assembly to the tumultuous and violent days of the early 1990s represented a brief period of sanity when it tried to make some Western-style methods work in the best interests of all its citizens, irrespective of their group affiliations. The rest may well appear as a steady degeneration towards a mobocratic state of affairs that is ill-suited to India’s pluralistic society.

Democracy and the rule of law are inconvenient things when you want to pursue narrow agendas. You cannot pick and choose. You cannot charge the Maoists with being a danger to the country and at the same time try to impose a de-facto Hindu theocracy in the country by using non-democratic means or by deforming the democratic systems beyond recognition. The laboratory of hatred has now spread its tentacles beyond the streets of Gujarat. It now has a stranglehold on the sanctum-sanctorum of our democratic system, namely the judiciary. The signal is quite clear. The dilution of high democratic standards is likely to be the norm of the future. Mobocracy is here to stay in India.

Reclaiming history and destroying a nation

India is a country of divisions. It is said that Winston Churchill believed independent India would not remain a cohesive unit for long. Others thought so too, believing that British rule held India together, and that fissiparous tendencies and mutual incompatibilities would tear the country apart. When Churchill died in 1965, India was still one nation and a functioning democracy, albeit one struggling with poverty and the need to provide social justice to the broad masses. Today, in the 21st century, India still is a democracy struggling with the issues of poverty and social justice. But something more dangerous has been added to the mix. Notions of civilizational supremacy and Hindu fascism have made their way into the mainstream of the political process and even into the corridors of political power. Pronouncements by judges prove that the secular ethos of the country has been severely compromised. These strands were always there in post-independence India. But their recent successes in gaining a stranglehold on the power structure of the country is a new reality that any serious analysis of India needs to contend with.

The notion of reclaiming the Hindu glory of the past is a passion for many in India. I am a skeptic when it comes to these ideas. For one, they are anachronistic. Also, in the public arena, they do smack of fascism. And also, they completely miss the multi-religious nature of the country. There are those in India who would have you believe that all of India’s ills are due to the non-authentic character of its political system. These people would also have you believe that all of India’s economic failures and its social evils will vanish when what is called Ram Rajya is established in India. Ram, who is an incarnation of God Vishnu according to Hindu belief, is held as the paragon of virtue. Ram Rajya, or the Kingdom of Ram, is the land of lost content for the Hindus. It is a mythical utopia where morality is uppermost and where everything proceeds from this adherence to morality. A little bit like the Biblical notion of a “ shining city on the hill “ that Ronald Reagan invoked in the US. Hindu fascists would have you believe that this moral kingdom is the pre-requisite for all positive transformation. It is a dangerous idea in a country with massive poverty and with built-in social injustice. It indirectly implies that the law and the constitution, by themselves, are incapable of upholding social morality to a reasonable extent. This group would have you believe that a society that proceeds from Ram-like morality, based on atavistic notions of purity and rigid rules of social behavior, is the one that will ensure the future success of India in every field. There are those who want to harness these archaic impulses to gain political power. They also happen to be what the media calls the Hindu nationalists. As opposed to the secular nationalists in the secular parties. Hindu nationalists, who swear by the notions of Hindu purity mentioned above, are not that different from the other political outfits though when it comes to things like corruption or the nexus between crime and politics. But they are the ones who constantly shout about purity and morality in India.

Experience and analysis both show that this constant hankering for the moral kingdom actually undermines the quest for social justice and economic justice in serious ways. For example, the right-wing Hindu nationalist parties are often at odds with lower caste parties during elections and in the parliament. Also, while Ram is held as the paragon of virtue, the notion of the ideal woman as enshrined in the mythologies surrounding Ram is a misogynist one by modern standards. For one, an ideal woman in a Ram Rajya would be expected to maintain high standards of sexual purity and chastity. Whatever your personal views about this may be, it does not jell with modern notions of separation between religion and state. If the woman obediently adheres to these values, Ram-morality will elevate her to a divine status. Everything has a cost associated with it. To obtain this high position of respect within the ambits of Ram-morality, the woman has to be subservient to man in many ways. She must behave according to old Hindu norms where the husband is the equivalent of God. Finding a good basis of morality is a tricky philosophical question, and I am not trying to argue that this way of thinking cannot lead to the best society possible, but the fact is that in practice, this kind of thinking leads to exploitation of women in India. So, till the Ram-moralists lay out a clear plan as to how everybody’s happiness will be enhanced by following their archaic prescriptions, skepticism towards these notions is the right attitude.

And one of the pre-requisites for attaining this moral kingdom is the dilution or elimination of notions that are foreign in nature. For example, systems dating back to the Muslim rule in India, or systems stemming from the British rule in India or more recent trends due to the spread of American culture are things that are often anathema for this group. Somehow, they think that they can work towards these aims while simultaneously working towards geopolitical alliances with the West. Using selective amnesia, killing of Indian Christians by Hindu groups can co-exist with the courting of the West in areas of economic co-operation and strategic alliances. Calling America a “ natural ally “ and working towards an internal state of ideological purity that leads to violent confrontations with Christians are two seemingly incompatible things that these groups pursue, and also carry off with some reasonable success. Also, people celebrating Valentine’s Day in India have recently attracted the opprobrium of this group. Much tough love rhetoric issues from the mouths of Hindu groups about the undesirability of having Western notions of love pollute the old Hindu innocence.

But much more serious than the killing of Christians is the desire of these groups to eliminate some of the vestiges of Muslim rule. For example, old mosques built by Muslim rulers that may have had Hindu temples prior to the construction of the mosques become targets of political and physical attacks by these groups. Apart from provoking riots across the country, these campaigns aimed at “ reversing history “ divert attention away from the more serious tasks of nation-building in the areas of poverty reduction and other economic matters. The Hindu nationalist politicians proceed under the assumption that scientists and engineers will build the country’s missiles, and solve the “ trivial “ problems of satisfying economic want. And the politicians can go about their merry business of policing morality and enforcing morality according to some archaic norms. Both aspects of this line of thinking are terribly dangerous. One, that something beyond good constitutional ethic and good law enforcement is required for social morality. And that the economic problem is trivial compared to the morality problem. It is a line of thinking that has led to some serious problems for the nation. In the field of social morality, it has led to willful flouting of the nation’s laws, attacks on its secular fabric and a justification of mafia-like activities in the name of national purity. As for the economy, the negative impacts are both short-term and long-term in nature. Past cultural glory is no guarantee of present or future economic success. And harping too much on the halcyon days of the past is a recipe for compromising the nation’s scientific and economic achievements. Mindset is everything when it comes to science and the economy. It is an empirical reality that in the economic and scientific challenges that Mother Nature confronts man with, she does not care so much about national boundaries or even about supposedly high moral standards. A nation that does not realize this may well be consigned to historical irrelevance.

Fundamentalism and judicial fundamentals in India

The recent judgement by the Allahabad High Court about the Babri mosque site in India revealed some interesting facets of the Indian polity. Fundamentalism has taken precedence over judicial fundamentals in India in a way that does not portend well for the future of the country and its internal cohesion.

The Babri mosque CONTROVERSY is, at its core, a political phenomenon. However, at the same time, the Babri mosque COURT CASE is technically a land dispute. The controversy is not the same as the court case. It is not clear if the communal parties involved in the controversy ( not the court case ) are ready to accept the court's verdict if it does not help further their divisive aims. If one or more parties have laid claim to the site, the ownership dispute must be decided first before the question of who builds what on that site can be considered. The desire of communal groups to build this or that on that site cannot take precedence over the issue of ownership of the land. In the case of a verdict that looks partial to one or more communal groups, riots are a definite possibility in this kind of case. To what extent a court can and should take this kind of danger into consideration is an interesting question that scholars of jurisprudence can debate to death. However, a few things about how Indian judges in places like Allahabad think can be gleaned from the recent judgement. Statements by judges to the effect that the site is " the birthplace of Ram " or that the site is " the birthplace of Ram according to Hindu belief " do not inspire confidence in the Indian judiciary as one that can be objective, impartial or competent.

A court can decide disputes and impose sentences on those who have broken the law. A court can direct a government or a group to work in such a manner as to preserve communal harmony. However, there is only so much the judiciary can do for communal harmony when there are powerful political groups hell-bent on fostering inter-communal hatred. In a country where state governments led by communal parties have been known to adopt a posture of passive collusion while blood flowed due to communal riots, the ability of courts to ensure communally amicable outcomes is limited. The recent Allahabad High Court judgement about the Babri mosque site is a case where the court has seemingly tried to juggle two aims - that of deciding the ownership of a site and also to ensure outcomes that are acceptable to different communally sensitive groups in the country. In the process of doing so, the judges have made some strange pronouncements and have set some dangerous precedents. For one, the judgement sets the ridiculous precedent that a judge can decide the birthplace of a mythical character. It sets the stage for other potential judgements where religious fundamentalists in India will demand that the court put a stamp of approval on their myths and personal beliefs. The second dangerous aspect of the judgement is that extraneous considerations having to do with religious beliefs have been made into explicit justifications for judgements concerning allocation of ownership of a site.

It is not the job of judges to publicly bless anyone's religious beliefs. That is the job of popes, swamis, imams etc. In a Western country, statements of this sort by judges would elicit howls of protest about judicial activism. In the ultimate analysis, labels are irrelevant. Only the facts matter. Activist or not, the judges who have made these parochial considerations into the basis of their ruling have, by their statements, cast serious doubts about the quality of Indian jurisprudence, about the character of the Indian nation and about the ability of the Indian system to prevent a slide towards a Hindu theocracy.

Recession metrics

We live in a strange period when unemployment rates that are high by historical standards co-exist with pronouncements by economic bureaus that the recession has ended. This has happened before in America also. All this is explained away by the term “ jobless recovery “. It is kind of an euphemism for a recession that has not really ended.

It will be useful to have two different recession metrics. One based on GDP and the other based on jobs. For one, people get desensitized to the unemployment issue if, on TV and in newspapers, they hear or read five times that the recession has officially ended, and another five times that unemployment is high. The announcements of the official end of recession will be taken by many, if not most, to mean that job growth is round the corner. However, this is not a given. The current level of unemployment in the economy can be of concern to those who are employed due to a number of reasons. First, a high rate of unemployment can be an indicator that further economic distress is possible, or that a slide towards a double-dip recession is possible. Secondly, there may be concern that the joblessness rate can increase.

Allowing governments and public officials to announce the official end of recessions while unemployment is high means that they can drag their feet on solving the pressing issue of job creation. In a capitalistic economy like the US, job creation is not an easy thing for a government to do. However, there are certain stimulus measures that the government can take and then hope for the best.

The other danger of announcing ends to recessions when unemployment rates are very high is that political groups that are enthusiastic about drastically reducing government spending can use the official end of recession as a cover to push their agendas. Drastic reductions in government spending when unemployment rates are high can have a severe de-stimulus effect, and can potentially cause a double-dip. In other words, unless the government is close to broke, drastic reductions in government spending in the midst of high unemployment is not a good idea. That in the current scenario, the federal and several state governments do have severe fiscal problems in the midst of high unemployment is unfortunate, and is the subject of a different debate about how things came to this pass in the first place. Republicans will parrot their usual lines about “ wasteful government “, and Democrats will parrot their usual lines about how tax-cuts for the super-wealthy are not conducive to either good fiscal health or good overall economic health.

Coming back to the topic of the article, it is believed by many that announcements by economic bureaus and governments determine overall economic sentiments among the general public, stock market etc. To that extent, there is a desire to publicize the positive changes more than the negative changes. However, that line of thinking can be allowed to determine public pronouncements only so much. A recession metric based on jobs may be a good idea.

Food prices and the Indian growth story

Food price inflation has been in the news in recent months and years, both around the world and in India. In India, the reality is compounded by the fact that overall inflation, as measured by the consumer price index, has also been high recently. For example, according to an Indian Finance Ministry document that I downloaded from their website, from April-June 2009 to April-June 2010, Indian nominal GDP grew 21.7% and real GDP grew 8.8%. From this, one can form an idea that overall inflation was probably higher than 10% during this period in India. I am using “ probably “ because latest official numbers are difficult to come by.

A document I downloaded from the Reserve Bank of India website tells me that in 2009-10, food price inflation outpaced overall consumer price inflation by about 3%. If one considers specific food items like sugar or wheat, the prices have gone on a wild ride in recent months and years. Once again, the internet has a lot of information about this issue, but obtaining official numbers isn’t easy. However, a reasonably clear picture emerges from the available news items and documents. The very recent overall price inflation in India may be due to the money that was pumped into the economy in the aftermath of the global financial crisis back in 2008-09. However, food prices are going up not just due to this component, but also due to their own supply-demand dynamics. In fact, for some food items like sugar and wheat, supply-demand may well be the deciding factor. Again, I have to use phrases like “ may well be “ because with the documents I am going by, it is not that easy to reach quantitative conclusions that are both official and reliable or both credible and reliable.

But the thing I am really trying to come to is what the food price inflation means for the advertisement of the growth story in India. For many in India, which has a large number of poor, food prices form a major component of daily and monthly expenditure. As a quick and dirty calculation, one can take the 3-4% by which food price inflation is higher than overall inflation, and subtract it from the real GDP growth. Subtract another 1% for population growth. As far as the reality of day-to-day existence goes for a vast majority of Indians, this means that the advertised real GDP growth rate of 8.8% is not the true story. The reality is more like the doldrums. And basic food security is at risk for many. Remember, the weighted average consumer price index incorporates food items, fuel prices, rents, automobiles, luxury items and other items. For those living at the edge of poverty, and for whom food security is the critical issue, the food price increase matters way more than the overall consumer price index. And from this perspective, the growth story repeated in the media based on the overall GDP is grossly misleading.

That trickle-down in India happens too slowly to enable inclusive growth is a fact that is backed by the experience of distant decades and recent decades. The recent food price problem is proof that not only is trickle-down too slow, but when it comes to affordability of basic items, it may well be non-existent. It is time for the proponents of laissez-faire and trickle-down in India to face up to the fact that further complacency based on blind belief in these concepts can lead to disastrous consequences. What may be a short-term supply-demand morass, if not attended to with the sense of urgency it deserves, can turn into the long-term systemic human rights nightmare of the future.

Science, climate change and realization

Oil companies who sponsored research aimed at alternative views of climate change that were skeptical about anthropogenic climate change, especially about the effect of human-activity-generated CO2 on global temperatures, are often cast as the villains by climate change progressives in the entire climate change debate. Analysts will debate this issue for quite some time to come. However, there is a bigger picture that has implications for the human race. And that is the amount of time the experts had to determine the level of seriousness of the issue and the limited options they have for mitigating and controlling some of the serious fallouts of climate change caused by human activity.

A longer historical perspective is revealing in many ways. The science of radiation absorption by molecules was the subject of intensive study by a number of leading research groups around the world about sixty years ago. That carbon dioxide absorbed in the infrared was well-known. That carbon dioxide caused a greenhouse effect was also well-known. That factories emitted carbon-dioxide, especially in developed countries, was also well-known. Since economic growth is exponential in nature and carbon-dioxide emission in a conventional non-green economy is expected to closely track economic growth, it was in principle possible to predict back then that serious global warming could occur by the year 2000. The growth of countries like China may or may not have been predictable. However, a case can be made that had there been sufficient cross-fertilization of ideas among the fields of molecular radiation, atmospheric sciences and economics, the possible catastrophic nature of global warming could have been predicted. Of course, as recent experience has shown, the effect of global warming on polar ice and other such effects are more difficult to quantify and predict. However, the alarm bells could have started ringing way back then. I have not come across any studies that made such predictions. May be there are some such studies. May be they are in obscure journals or obscure books. I don’t know if Keeling of Keeling curve fame had an idea about how the curve would look like when he started measuring CO2 concentrations decades ago. For example, did he anticipate the exponential growth ?

Coming back to the last twenty years and the furor about the delay caused by scientists who took a skeptical position on global warming, it is interesting that just fifteen years of delay could tip the balance of the earth in certain dangerous directions in some key areas. Solar power, wind power and other green alternatives for energy, for example, still have a long way to go before they can fully replace technologies that emit CO2. Research into efficiency improvements of energy generators like solar cells still continues and new ideas are still being discovered. Would a fifteen years head-start have helped the human community or particular nations to reduce CO2 emissions in time to lessen the severity of global warming ? It is very difficult to tell. Fifteen years seems like too small a time span for the human community to deal with civilization-changing trend shifts.

There is now talk of what is called geo-engineering, which involves things like spraying sunlight-reflecting sulfur aerosol layers, to reverse the effects of global warming. These are early days to know if these technologies can be made workable. It is a sobering thought that human arrogance in the field of science and technology has received a walloping from the global warming nightmare.

Ads in the 2010 US elections

Most political ads in the US election campaigns are lies at worst and distortions at best. Too many statements taken out of context leave too little room for the truth. And the debates really don’t offer a convenient format to dispel wrong notions. But, they are here to stay.

Among the recent defending ads, the best so far is from Christine O’Donnell in Delaware. “ I’m not a witch. I am just like you. I will go to Washington and do the things that you do “. Or something like that. A very good ad to answer a nonsensical objection and a nonsensical question by whoever her opponent is. Who cares if she is a witch or not ? Who cares if she WAS a witch or not ? Who cares if she believes in witchcraft or not ? Christian belief has space for angels, spirits, angels talking to saints, angels talking to poets, the Devil and the Devil’s minions. So, why not witches ? I would be more interested in things like - Is there something similar to what Jerry Brown says about Meg Whitman in California ? Like laying off many people from her company while drawing multi-million dollar salaries herself ? Everything depends on the details of the case, but at least it is a more germane topic for voters than witchcraft, I think.

Then there is the Carly Fiorina ad berating Barbara Boxer for putting style before substance. So, a general or an army officer calls you ‘ ma’am “ instead of ‘ Senator “. Yeah, whatever.

Then there is the Boxer ad saying Fiorina shipped jobs to China as CEO of HP. In today’s economic environment, a CEO would be amiss not to ship jobs to China if it is required to maximize investor profits. That’s the job of a CEO. USA is a capitalistic society, and if Boxer’s objections were to be taken seriously, then most or all CEOs of big companies won’t be able to run for public office. Now, what does Fiorina plan to do as senator to stop jobs from going to China ? That’s a different question. And the voters will most likely not know the answer before the elections given the nature of the debate formats. That’s the nature of American democracy.

And the one that I think deserves the most serious thought and analysis. The Jerry Brown ad saying he will never raise taxes in California without consulting the voters. A dangerous stance of economic populism. What does the public know about debts, deficits and the details about the expenditures of the state ? Or about possible fallacies of composition when it comes to the standard of living and the level of taxes ? Just enough to vote every four years on these issues, I guess. But not every year. The kind of practice Brown wants to follow would require education camps where the broad public can get educated about the nitty gritty details of tax policy. Of course, every one wants to pay less taxes. But the implication of tax policy for broader society is something that the cognoscenti and intellectuals and public policy framers are better at deciding. Alas, they are bitterly divided. Is he going to consult the voters every time he wants to REDUCE taxes ? I guess not. He will probably use some libertarian argument like – taxation is coercion. Relief from taxation is relief from coercion. But, these are quaint eighteenth century ideas. We don’t live in that kind of society any more. That taxation is coercion is an obvious truth, but that’s what living in a society like this entails. Let me not put words into his mouth though. Will he ? Will he consult the voters before reducing taxes also ?

I am having a moment of déjà vu. Seriously. As I am writing this. I am not a wizard. Smoke. I am not even a spirit. Smoke.

Risky trade wars

So a tariff bill directed against China has been passed by the House and probably the Senate. As even straight F students in economics should know, increasing tariffs in the middle of something that has words like “ Great “ and “ Recession “ is a risky business. The Smooth-Hawley tariffs are sometimes held as a major causal factor in the prolongation of the Great Depression. And trade wars are definitely not the way to go in the middle of a worldwide slowdown.

A House document cites economist Paul Krugman’s calculation that a low yuan costs America 1.4% of GDP. It is not clear if this calculation refers to a 1.4% GDP level shift with no growth dynamics incorporated. In good times, American GDP grows by 2-4% annually. So a 1.4% GDP shift should be relatively negligible compared with what 2-4% growth can bring year after year. And that really is the big American problem right now.

Also, the 1.4% GDP level shift cannot happen overnight. There needs to be slack capacity in precisely those manufacturing sectors for the thing to happen quickly. There is no clear text out there that says that this tariff bill has been designed in a way as to quickly shift manufacturing from China to the US in specific goods.

Overall, it looks like a risky thing just like the yuan pressure diplomacy being pursued by the Obama administration on the global stage. It is not clear if the short-term and long-term objectives and consequences have been thought out prior to this onslaught.

Yuan diplomacy to wreck the world economy

The Obama-Geithner duo is busy pursuing yuan pressure diplomacy, with statements to the effect that the global community should make the Chinese increase the value of the yuan vis-à-vis the dollar. Also, recently Donald Trump took the Obama team to task for not exerting enough pressure on China to let the yuan appreciate. What exactly does Donald Trump want the administration to do when he talks about using muscle against China ? He has charged that the Chinese use their best and brightest brains while the Obama administration does not. What exactly does Trump want the US negotiators to do ? Engage the Chinese mandarins in a battle of sophistry, confuse them into believing that they should increase the price of the yuan and have them walk away scratching their heads ? Or does he want the administration to use the threat of nuclear weapons ? Or does he want the Obama economic team to dazzle the Chinese team with false and misleading computer models about how a more expensive yuan is better for everybody ? And then have four laughing Buddhas go about the job of lifting the yuan higher ?

Coming back to this Obama-Geithner obsession with the yuan, if the yuan appreciates, all Chinese goods become more expensive. Since China and the US specialize in different areas of the value-added chain, one possible scenario is that the Americans end up buying less from the Chinese and the Chinese end up buying less from the Americans ( although the relative amounts shift towards more purchase of US goods ) and the overall volume of trade shrinks. In this scenario, jobs will be lost both in China and in the US. Clearly not a good thing in the middle of a job slump.

The other possibility is that if American demand for low and medium value added Chinese manufactures is inelastic, then Americans will buy about the same amount of Chinese goods despite the higher yuan, leading to inflation in America. Whether the Chinese buy more American goods or whether they end up buying more American bonds or whether they end up buying more of other forms of American assets is anybody’s guess. Without computer modeling, it is very difficult to predict if the first scenario, the second scenario or some other scenario will obtain. Nothing that I have read or heard assures me that the Obama team has done such modeling to predict the impact and to understand the cost-benefit aspects.

The first scenario leads to job losses in the US ( and may be inflation as well ). The second scenario leads to inflation in the US, with no clear indication as to whether it will reduce the trade deficit. Either way, it looks like the team in charge in Washington has a visceral dislike for the current crankshaft, while it has no idea about what to do about the engine, the transmission, the axle or the wheel. Clearly, tinkering with the crankshaft alone without changing the entire design is a dangerous exercise. And it seems that is precisely what the administration is hell-bent on doing. China is being increasingly regarded as the manufacturer to the world, and the Obama economic team wants to make Chinese goods more expensive for everybody. This may be a recipe for unnecessarily forcing a worldwide double dip recession when everybody wants to avoid it.

Primitive thinking in a modern nation

A court system does not a modern judicial system make. The exercise of voting in elections does not a democracy make. Sixty years after independence, India still has severe problems distinguishing appearance from reality.

The recent judgement in one of India's most high profile cases, namely the Ram Janmabhoomi Babri Masjid case, reveals several interesting features of the way India works. In particular, it reveals a lot about how the Indian elite goes about its business. It is proof positive that modernity is yet to permeate the Indian psyche and that when it comes to systems introduced by Westerners, the Indian elite mistakes appearance for essence. Clearly, not everything Western fits Indian realities. However, Indians, and especially the Indian elites, pride themselves on a Western-style constitution and Western-style judicial systems. In fact, these are some of the factors that underlie the thinking of the Indian political class when it calls America a " natural ally ". However, the recent judgement in this case reveals how haphazard and scatter-brained the Indian approach to these systems is.

The judges ask the three claimants to the site to split it among themselves. That is not the strange aspect of the judgement. It is the reasons cited by some of the judges, however, that leave one wondering if one is reading about a modern nation or about an obscurantist, superstition-ridden society. One of the judges states outight that the site under dispute is " the birthplace of Ram ". Ram is one of the incarnations of God Vishnu according to Hindu belief. It is not much of a stretch to say that Ram can be considered as an incarnation of the Lord Himself on earth according to Hindu belief. Serious questions arise, however, as to how judges in some of the top courts in the country reach their conclusions. In fact, this kind of statement raises disturbing questions as to whether one can trust the objectivity of these judges.

How did judge Sharma determine that Ram was born at this site ? From the most popular versions of the mythical stories associated with Ram, he was born to King Dasrath and Queen Kaushalya in Ayodhya. Have archeaologists uncovered the remains of Dasrath's palace at the site ? Clearly not. There is disputed " evidence " that a temple existed at that site before the Muslim emperor Babar built a mosque at that site. The presence of a previous temple, even if true, is not proof that the site is Ram's birthplace.

Another judge, Justice Agarwal, states that Ram was born at that site according to Hindu belief. Which Hindus ? North Indian Hindus ? East Indian Hindus ? South Indian Hindus ? In fact, this is a gross mischaracterization of Hindu belief. Very few Hindus have any firm conviction about that particular site being the birthplace of Lord Ram. This is a canard spread by a group of politically motivated people that want to impose a communal agenda on India's secular character. This entire drama about the exact birthplace of Ram has never constituted the essence of Hindu belief, and it has never been a top priority item for Hindu belief except when it gets enmeshed with politics. And it is the pet agenda of a Hindu political cabal that has made no secret about its penchant for violent confrontation as a means of settling grievances.

And most importantly, when it comes to deciding land ownership, how does it matter whether or not God Ram was born there ? It is not an idle or unimportant question. If judges can make careless statements like these and use specious justifications like these in a high profile case, what should the common Indian expect from the Indian judicial system in terms of objectivity and intelligence ?

It is time for deep introspection for the Indian elites. Do they want to bolster modern systems and make them work for the people and for society ? Or do they want to turn their back on criteria of objectivity and fairness, and allow dangerous ideas of cultural supremacism to color judicial decisions ?

A misnomer called Social Darwinism

The term “ Social Darwinism “ has been used to describe scenarios where laissez-faire economic systems allow only the “ fittest to survive “. The term is one of the stupidest misnomers ever invented, of course. Darwinism and the survival of the fittest in the biological context refer to the survival value of traits. And it is based on a mechanism of genetic inheritance, and a complex and slow process of natural selection of genetic variations that help cope with the natural environment better. The basic characteristic of this mechanism is that individuals with genetic constitution that helps cope with the environment better will pass on these positive traits to their off-springs.

“ Social Darwinism “, as opposed to a system of socialism, for example, refers to a scenario where no one who is economically unviable is allowed to persist, that is, no welfare system is allowed to come to the aid of “ weak “ individuals. Of course, there are huge problems with this point of view. Is a person who is “ economically unviable “ now likely to remain “ economically unviable “ always ? It also has relevance for contemporary debates about poverty. If a man is starving, or if a penniless man has malaria, and he will die if food or treatment don’t reach him, he is clearly economically unviable. If a well-to-do person helps him by giving him food and medicine, he becomes economically viable. He can even become a contributor to overall prosperity because of division of labor. In other words, the person who helps the starving guy does not necessarily harm his own economic interests. The analysis can be extended to a person who is not exactly destitute, but has fallen on bad days. Then the concept of “ Social Darwinism “ becomes even more untenable. The basic failure is one of comprehending the dynamic nature of economic viability.

There is another problem with “ Social Darwinism “ as a way of ordering human society. “ Social Darwinism “, in its purest manifestation, would lead to an elimination of the public school system and of subsidized education. Since school education is a significant component that decides what kind of jobs an individual gets, the presence or absence of a public education system will have a huge impact on the allocation of labor and talent that the society ends up with. And in the absence of a publicly funded education system, mostly kids from rich families will end up getting the better jobs. This labor and talent allocation may or may not suffice to keep economic prosperity going. Even if it does, it calls into question the internal consistency of the system since it can and will lead to “ elimination “ of individuals who are economically more viable while several who are economically less viable will survive. This may be a sustainable system if resources are plentiful and economic management is a trivial science. However, till now, mankind hasn’t enjoyed that kind of economic security. So, in practice, “ Social Darwinism “, if taken to its logical conclusion while allowing for inheritance and parent-funded ( but no public ) education, can and most probably will lead to a process of obsolescence wherein mankind’s survival itself may be imperiled. And, the other problem is that in that kind of scenario, full employment or a universal security net would be easily affordable. Persisting with “ Social Darwinist “ methods in that kind of society is equivalent to unadulterated sadism.

The term “ Social Darwinism “ should be banished from intelligent discourse. If “ Social Darwinism “ is used to refer to individuals alone with no reference to off-springs, then the Darwinist part makes no sense, apart from a resemblance to the ability of organisms to cope with their environments. If it does refer to things like inheritance, parent-funded education and the absence of publicly funded education, then also, the Darwinian part makes no sense. In the latter case, it simply means - if my dad is a winner, and I don’t piss him off, I am a winner if inheritance taxes are low enough. Or if my dad has connections in the right places, I become a winner. One may be able to call that Social Nepotism, not Social Darwinism.

The sequencing error

It is fashionable in countries like India to blame socialist policies for what are commonly categorized as “inefficiencies”. And there is a plethora of superficial advertising out there that tries to create the impression that since the onset of neoliberal policies starting in the early 1990s, things have mostly been rosy for India. And similarly, there is a lot of analysis that tries to make it seem that all of China’s progress since the early 1980s is due to the adoption of capitalism. For example, commentary in magazines and newspapers like the Wall Street Journal abound in such superficial analysis.

In fact, in the case of India, not only is this a gross distortion of the truth, it completely mischaracterizes the reality. If you look at basic indicators of progress like poverty rates, literacy rates and the human development index, very little has changed as far as rates of amelioration go since the liberalization policies started. The neoliberal phase of the last nearly twenty years can’t escape the responsibility for the gargantuan failures in the areas of human development during this time. It can’t be allowed to take credit for a lop-sided growth that favors the super-wealthy while trickle-down brings scant relief to the destitute masses at the bottom.

In the same way, the “ socialist “ policies of post-independent India from independence in 1947 till the beginning of the neoliberal phase can’t be blamed for all of India’s failures till then, and not be given credit for the good things that happened during that time, and since then. After all, the superstructure on which the recent lop-sided high-growth phase and the recent spurt in exports in fields like software are based was created by the “ socialist “ framework of the past. This eagerness on the part of proponents of laissez-faire to forget the contribution of the “ socialist “ phase to later growth has been characterized by one Indian politician as “ the vulgar kicking of the ladder “. After all, recent mushrooming of private engineering colleges offering software degrees notwithstanding, the scientific and technical pool from which the Indian software companies drew their talent were to a large extent from government-run and highly subsidized engineering colleges. These colleges, whatever their defects may be, were necessary in order to identify, train and promote engineering talent from a broad pool, irrespective of economic status. How can the successes of the Indian software companies and their contribution to India’s foreign exchange security be ascribed purely to laissez-faire policies when “ socialist “ policies regarding education helped identify and train a broad talent pool for them ?

The other aspect that seems to get missed is that “ socialism “ can’t be blamed for those ills of post-independent India where it hasn’t had a chance to function. In many ways, “ socialism “ in India was a “ socialism for the relatively rich “ and “ socialism for the urbanites “. Rural development was ignored to a large extent while entrenched power groups jostled for political influence. You can’t blame socialism for the economic travails of rural India when the kind of socialism India practiced wasn’t designed to bring rapid development in rural areas.

Opinions can be divided as to how much of post-1980s China is capitalistic and how much of it is socialistic. After all, a country’s export sector doesn’t necessarily typify its economy. Government-owned companies have played and still play a pivotal role in the functioning of the Chinese economy. Also, just like in India, China’s success in the export sector cannot be disentangled from the communist regime’s policies in the fields of poverty, health and education. A near-universal literacy rate by the early 1980s cannot possibly be brushed aside when it comes to analyzing China’s subsequent economic successes. Commentators like Amartya Sen have made this argument for countries like Taiwan and South Korea, which reached high levels of literacy under dictatorial regimes before their growths sky-rocketed. What applies for dictatorial capitalist regimes also applies to dictatorial communist regimes when it comes to education and health serving as a basis for subsequent growth.

The basic error in many of these analyses is that too much emphasis is placed on systems, and too little emphasis is placed on “ stages of development “. This is especially true of developing countries, and analyses that take a parochial view that systems matter way more than stages of development will inevitably lead to erroneous conclusions.

The easy moral problem ?

Easy moral problem – You have money, a person is hungry and asks you for money for food. I have categorized this problem as an easy moral problem because to me, it seems like a no-brainer. After all, ostensibly, there is sufficient food production for all of the world’s population of nearly 7 billion. If everyone who has money gives enough to those who can’t afford food, it should be a reasonably easy distribution problem to solve, barring some logistical problems having to do with transporting food around the world, responding to famines etc. Also, there are the examples of developed countries that have eliminated poverty.

However, it isn’t clear if at the end of the first decade of the twenty-first century, the majority of mankind sees the last problem as an easy moral problem. In fact, mankind seems almost hopelessly lost when it comes to this problem. Six million kids die every year from preventable causes like minor diseases and malnutrition. Billions live at the edge of poverty, barely eking out a living, and not getting sufficient nutrition.

There are several reasons why this state of affairs continues. There is paranoia about “growth” and “efficiency”. One argument of the paranoids could go like this. If there is too much charity for food, a large proportion of the working population will stop working. Growth will suffer and the economy will contract. There will be less money overall, and taken to its logical conclusion, it will lead to starvation for everybody. This extreme argument is wrong because of very simple economic efficiency reasons, and also simply because it doesn’t make sense.

Another argument could go as follows. Capitalistic enterprises are efficient. Anything not driven by the profit motive, like a charity, is inefficient. Therefore, I won’t give money to charities. Sounds okay ? It may sound okay for some charities, but it is untenable when it comes to something as basic as food.

Yet another argument could go like this. I don’t know if charitable organizations and NGOs are honest. I would rather spend my money on an expensive luxury item. At least I know that I am giving it to somebody honest, that is, the store owner. This argument fails both because it is dumb and because there are reasonable number of high-profile and reputable charities and NGOs like the World Food Program that work to provide food to the poor.

The other reason may have to do with paranoia about economic competition and the way it can affect one’s progenies. If those living at the edge of poverty are given too much help, they will become competitors for jobs. This argument could be especially potent in resource-strapped countries like India. If the size of the pie isn’t increasing fast, the privileged may think it’s not a good idea that the poor should come up too fast. Even if the size of the pie is increasing fast due to high growth at the top, the privileged may again think it’s a good idea to not empower the poor because they can pose a threat by competing for jobs at the top. Of course, this argument works for things like education, but not for food. However, in people’s minds, the problems of educating the poor, feeding the poor and healing the poor become bundled into one problem – that of caring for the poor, and thereby empowering them. So, even something as basic as food security may get neglected. This line of thinking takes a very cynical view of the way people think, but there are enough reports that it operates at many levels. For example, higher castes do their utmost to keep the lower castes poor in many villages in India, according to reports in the media.

The other reason may have to do with an “ out of sight, out of mind “ kind of thing. The vast majority of the well-to-do population thinks it is the responsibility of the government to ensure minimum standards of living for the poor. However, the political establishments that run the government may not have it in their priority list. This becomes especially significant when the number of poor is large, but forms a minority. The economist John Kenneth Galbraith analyzed this problem of minority poor. If the bottom 30% are poor, they don’t form enough of a vote bank to threaten reactionary establishments, especially if they aren’t well-organized and are uneducated, and are divided along lines like religion and caste in a country like India. The problem with the “ out of sight, out of mind “ thing is that while it may or may not absolve the vast majority of the well-to-do, it definitely doesn’t absolve the intelligentsia and the political elite. In the modern world, the uplift of the poor is ultimately the responsibility of the educated elite, and that too, primarily that of those who analyze and frame policies. If this elite is lazy, apathetic or stupid, the emancipation of the poor happens very slowly.

The “ out of sight, out of mind “ mechanism plays a very important role when it comes to the problem of getting rich countries to help poor countries that are very much cash-strapped and resource strapped, and caught in vicious cycles. For example, while President George W. Bush made a commitment that the US will contribute 0.7% of its annual GDP to the Millenium Development goals, the actual sum has never materialized because Congessional budget allocations are caught in massive wranglings about domestic spending, and voters are impatient about results at home first before they worry about foreign countries. But a large portion of the same population may support expensive wars in foreign countries based on justifications like “ spreading democracy “ or “ protecting democracy “. Somehow, poverty isn’t glamorous enough to make it to the top of the concern list.

Another example of the “ out of sight, out of mind “ mechanism is the burning of grains in North American prairies while people starved elsewhere in the world. This kind of co-operative efforts designed to raise food-grain prices have happened in the past. Instead of burning the grains, they could have been contributed to some kind of food security fund ( may be one run by the United Nations ) that gave food to starving people in remote areas of the world, basically ensuring moral outcomes while allowing the farmers in rich countries to avoid economic losses. However, widespread apathy and insouciance meant that destruction of this basic necessity of life was the outcome rather than the more humane option of transfer of food-grains to the utterly poor.

Yet another example of the “ out of sight, out of mind “ mechanism is the large-scale diversion of food-grains towards alcohol for automobile fuels. Since food-grains serve as close substitutes for each other, this leads to an increase in food prices worldwide. People at the edge of poverty are pushed further into poverty, and starvation becomes more widespread. There is an almost blind belief in the ability of markets to bring benefits to all. Basic common-sense moral problems like alleviation of mass starvation remain neglected.

There is another strange strand of thinking that asserts that only free-market capitalism and trickle-through can solve the problems of poverty, even in disease-ridden and starvation-ridden countries. This makes no sense, of course, since people that are suffering from malaria and AIDS, and people that are grossly malnourished, are not and cannot be meaningful parts of any kind of economy, let alone capitalism, till these fundamental problems are taken care of. However, this line of thinking provides a convenient intellectual cover for people that want to prevent egalitarian measures out of selfishness or sadism.

So, the moral problem of alleviation of starvation and malnutrition is, de facto, a difficult problem to solve in the world we inhabit ( although some countries have a much better record in this area than others ). At first blush, it looks like a slam dunk, but the record of countries like India, which haven’t been able to make good progress in this area over the past 60 years, shows that it is a much more intractable problem than what one would naively expect. The one strong conclusion that emerges from this is that selfishness and hypocrisy trump more humane instincts in human affairs to an extent that should be distasteful to civilized society.

New study about Himalayan glaciers

Okay, so there is a new study out ( http://www.sciencemag.org/cgi/rapidpdf/328/5984/1382.pdf?ijkey=PdRTX0ybYaIjY&keytype=ref&siteid=sci ) that says that the Himalayan glacier recession scenario isn't as scary as the IPCC's 2007 Fourth Assessment Report projected ( http://www.ipcc.ch/publications_and_data/ar4/wg2/en/ch10s10-6-2.html ). That report's projection was based on research that wasn't peer-reviewed, according to an article in New Scientist. The IPCC 2007 report stated that Himalayan glaciers that feed rivers are likely to disappear by 2035. The new study, which appears in the journal Science, tries to establish two things. One, that the rate of recession isn't as scary as the 2007 IPCC report suggested. The other is that the rivers with higher ratio of snow and glacier upstream discharge to downstream natural discharge will see a bigger effect on irrigation capabilities, ability to sustain agriculture etc. The final conclusion - the Indus and the Brahmaputra basins will feel the most negative impact on the ability to sustain populations. The Ganges basin and the Yangtze and Yellow river basins won't see as severe an impact.

Since the scientist who authored the non-peer-reviewed article started this all-important debate, he deserves a special word of thanks from the scientific community and the human community. The IPCC deserves credit for being bold enough to highlight this critical issue using whatever data was available. I haven't read the apology from IPCC for using this article as the basis of its claims, but I don't understand what there was to apologize for in the first place. Climate change is an inexact science, and as the only scientific work that dealt with this issue at this crucial juncture in human history, it couldn't possibly have been ignored.

What should the implications of the new study be for environmental policy, agricultural policy, water supply infrastructure policy etc ? I am not sure that anything changes. Do we really want to take the assurances of this new paper literally ? The study projects up to 2050. So, what happens between 2050 and 2100 ? There is no guarantee that temperature stabilization goals from the Copenhagen thing can be achieved by 2050 given the voracious appetite for growth in developing countries and the sloth-like pace of progress in climate change legislation in countries like the United States. If the stabilization goals aren't achieved, we should be looking forward to 2100 for worst-case scenarios regarding reduced river flows. Don't genetically modified crops require more irrigation water to work ? The neo-liberal line of thinking will say that growth is the only answer. Basically, growth is the answer to everything. But growth for whom and what kind of growth ? It has already been revealed over the last 15 years that high growth rates have done little to accelerate poverty reduction rates in India. It would be foolhardy to expect that growth as we know it in India will be able to deal with challenges of this magnitude that are local in nature, and that involve poor populations whose weighted-average contribution to India's GDP growth hasn't been as high as the overall GDP growth ( exception must be made here about rich Punjabi farmers who are well-integrated into the global economy, but even they will face difficulties if flow rates in the tributaries of the Indus decrease substantially.The new study doesn't say anything about the tributaries of the Indus ). Since the rivers can't sustain so much population relying on agriculture, they need to be sucked into the trajectory of either industrial or service sector growth. The sad thing is that India's elitist growth model offers little hope that this will happen. In many ways then, these populations in the river basins will be left at the mercy of nature, and if the past is any indication, the urban population will treat this issue with benign neglect. Unless, of course, these changes lead to extreme food scarcity situations. In which case the urban population, given its past cynical approach, will try to maintain food security for itself while offering the bare minimum or even less to the beleaguered agricultural population. In extreme scenarios, the attendant rise in poverty rates may even lead to concentration of agricultural lands in the hands of a few, despite the stated goals of land redistribution and economic equity.

A projection up to 2100 for different cases will be useful, like Copenhagen-implemented and Copenhagen-not-implemented. I don't think policy-wise, the reassurances of this paper matter much. The fact still remains that large populations that rely directly on rivers for their livelihood will be extremely vulnerable over the next several decades. And even the urbanites who are shielded from the direct impacts may experience hardships due to things like reduced hydroelectricity generation, food insecurity and the need to provide a modicum of economic security to the poor rural population. What the paper tries to argue is that armageddon isn't here. But, it does nothing to allay fears of economic distress.

A ridiculous method

A recent article on slate.com by Michael Levi discusses a paper that ostensibly establishes scientific credibility based on statistical analysis. Levi's article can be found at http://www.slate.com/id/2258088/. The paper, one published in the Proceedings of the National Academy of Sciences, can be found at http://www.pnas.org/content/early/2010/06/04/1003187107.full.pdf+html. The paper uses the number of articles written, number of citations etc as criteria to argue that climate skeptics are inferior scientists compared to climate change non-skeptics. And according to Levi's article, the White House tweeted a statement saying that this article proves that " climate skeptics " aren't " cream of crop ".


Make no mistake. I believe in anthropogenically caused climate change. I believe in it strongly, almost irrevocably. But what this article describes is exactly the kind of thing we shouldn't be wasting time over. I tend towards the view that the number of publications can't be a criterion for " cream of crop " or whatever. An example of how the political elite is spending more time on playing the cheap blame game instead of solving our problems.If these scientists are fringe lunatics with no credibility, they couldn't possibly be the reason climate policy change was delayed, right ? And if they weren't important, the blame for the delay should lie elsewhere, right ? And the White House is achieving what exactly by using this questionable study to brand scientists ?

The publications of these scientists are out there, and the content of those publications can be criticized by the non-skeptics. This study is a huge waste of time.And in the future, if there is a scientific controversy, the credibility of the arguments should be judged how exactly ? How should it be judged 1 year after the controversy starts, and how should it be judged 5 years after the controversy starts ? Based on the number of papers ?

And who exactly from the White House stands behind the study which says that particular scientists aren't up to par ? The president himself ? The cabinet ? Is this method going to be standard from here on out when there is a new scientific controversy ? Is the Congress going to pass a censure motion against these scientists based purely on the number of papers they have published ? And whether the White House is or isn't up to par will be judged how exactly ? Employment numbers ? GDP growth ? Success in social welfare ? Or some looney statistical method that compares it to, say, the Johnson administration ?

There are other problems with this method. How can a group of scientists be branded as inferior ? Shouldn't this same analysis be carried out then at the level of individual scientists ? Should the career level of the scientist matter when you use this statistical analysis ? As you can see, this method is rife with contradictions. In fact, the National Academy of Sciences should take a hard look at this article, and the authors, who I think have revealed their utter ignorance of the way science works by writing this article, and pass either a vote of endorsement or a vote of censure about it, since the article has implications for all fields of scientific enquiry.

Albert Einstein was one of the few voices in the first half of the twentieth century against the probabilistic interpretation of quantum mechanics. The Einstein-Podowlsky-Rosen paradox is famous as an argument that was forwarded as an objection to the Copenhagen interpretation of quantum mechanics. The vast majority of the physics establishment believed and still believes in the probabilistic interpretation of quantum mechanics. If the method sketched out by these PNAS article writers is applied to this debate, then Einstein may well need to be branded as a substandard thinker on quantum mechanics. Many think he was wrong about quantum mechanics, but few, if any, will brand him as a substandard thinker about quantum mechanics.

Another example comes to mind. The Big Bang versus the Steady State theory of cosmology was a hallowed debate of physics till it was settled in favor of the Big Bang theorists. I don't know the paper number distribution of these two groups of scientists, but the debate was settled based on logic and empirical evidence, not on the basis of the number of papers.

Should national groups and ethnic groups be judged by this method when it comes to scientific credibility in any subject ? Should the indicators used in this study be normalized to the size of the population of the group in that case ? For example, can the group " Indian climate scientists " be compared with the group " US climate scientists " using this method ? After normalizing for population ? If the method leads to the conclusion that one of these national or ethnic groups isn't " cream of crop " in a particular subject, does this mean that the publications of any scientist belonging to that nationality or ethnic group should be ignored ? This question can't be brushed aside that easily since the method uses number of papers and citations as a criterion. How do you know which kind of groups can be compared using this method ? One could argue that only groups on two sides of a scientific controversy should be compared using this method ? But why ? Why can't it be applied to compare any kinds of groups ? And to produce rankings of groups ?

And if I remember correctly, the non-skeptics themselves underestimated things like Antarctic ice melting. So, the " skeptics " were bigger underestimators than the " non-skeptics ". At the end of the day, looks like both groups underestimated the importance of something that affects human future so critically. So, how can the " skeptics " be singled out for criticism ? This is a ridiculous and utterly wrong method. It can't be used to establish scientific credibility.