India Still Has Potential
India held its last election in 2004 and due for another one in 2009 or earlier. The party in power is Congress and they won primarily for their agenda for the lower castes and/or the poor. India has been having great economic performance as well. India still has potential to be exploited. This potential can be achieved when the social integration of the untouchable is successful. And investments in that area require a tacit knowledge.
CNN made a mistake in using the word class. It could have been a typo if class were used consistently through out its content. However, class and caste are used inter-changeably in the content. That seems to suggest the difference between caste and class is misunderstood. Class can be ascribed, as Plato suggests. Caste is innate.
Prior to Congress’ victory, many foreigner investors considered the previous government led by BJP as more investor friendly. This is to argue otherwise.
BJP’s core value was Hindutva. That was to ask: who is Indian? That came as polarizing as Bush was to the States. Yes the poor were ignored and that constituted as a block of votes for Congress. However, investors need this much needed Congress for political stability is the first requirement for any investor into long term investment cycle.
Violence in the rural areas can be instigated by religion as well as by caste differences. This is only one case that gets to the media.
Labour upgrade is difficult because education is not as accessible to the lower castes as the upper castes, not necessarily just the untouchables. Jobs, lending practices are sometimes not favourable to the untouchables in some areas.
Although the federal government has strong affirmative action laws for the lower castes since the first legislature, social inequality continues. And sometimes it can turn violent with great organizational support.
Differences in religion can be just as problematic. And with the separatist movement at the far corners, although calming down in recent years (or decades now), managing such a diversity requires great political skill.
Having investments in that area requires all this local knowledge. The current Congress is just as pro-economic growth as BJP. In fact the current government is much better equipped than anyone else to manage growth in India. They have a good finance minister from a major seaport of India. They have a long history of governance. In a country where they have strong regulation and a lot of oligopolies, this is an important asset. The current government is also the party that can unite different castes, religion, promote peace in the region and continue its relationship building effort with its greatest perceived threat of China at the same time.
Dalai Lama Meeting China? What Can They Accomplish?
China wants to meet Dalai Lama’s representatives. Why is it announcement now? What can this meeting accomplish?
Beijing made the announcement today because EU trade delegation arrived Beijing. Currency exchange rate is a big topic, trade barrier is of course another. Some of it is very logistics, such as business visa issuance. In any event, having a nice announcement today can delay and defuse some tensions.
CNN reports the story here. Similar to other media outlets, CNN has already put sandbags on this meeting: don’t expect much because this meeting could be a PR ploy to defuse all the possible upcoming Tibetan activists may stage. And even if Dalai Lama is fully convinced that this meeting is unproductive, Dalai Lama will still send his representatives to meet China.
Why will Dalai Lama still want to meet China for an unproductive meeting?
If he does not, he will be blamed as spoiler. However, China probably wants this meet bad enough that they must have relaxed the conditions of meeting. After all, Dalai Lama already said both sides have been in contact since early April. So they are already in talks for weeks to set up a talk. The announcement from the Beijing is an indication that at least Dalai Lama is comfortable with the agenda, even if that agenda may have unproductive outcome.
There are a few things we can observe. If we see a series of talks stretching out, then please do not celebrate that as an indication of progress. That only means to stall the protests word wide and divert political pressure of the foreign governments from their domestic constituency asking for do-something.
The place is likely to be within Mainland China, to symbolize that it is an internal affairs. If it were in a third party, China would be afraid that the meeting has evolved into a nation-to-nation meeting. However, the question remains: where will it take place, in China? The location would be an indication how serious Beijing takes this meeting.
Will this be a publicized or secretive meeting? The press of course would not get invited during the talk. But will there be photo op announced to the press in advance? Will there be joint announcement? If there will be joint announcement, then this will be a meeting of substance.
Even if Beijing is not intent to just stage another stall tactics and meant well to accomplish something, it is still practically difficult. Positions of both sides are clear since they already spent a few decades to sort out the differences. Beijing hates to be seen as to giving concessions to separatists. Beijing waited for 8 years for President Chen of Taiwan to retire from office and waited a few decades on the issue of Dalai Lama. Holding off another 5 or 10 years does not bear additional political costs, both domestically and internationally.
Beijing simply is stretched at this moment to have a serious talk. All resources are diverted to Olympics. And Beijing sees that it is much easier to accomplish something from the Taiwan problem. Therefore, for whatever remaining energy and resources from the top leadership will be dedicated to Taiwan. For Dalai Lama, the meeting has to be measured against the level of civil servants Taiwan enjoys.
Learn It From Shrimp and Election
In any given year, I would see the following news story by CNN as a human rights issue. Not this year. In a year where we have a long and arduous primary on the left side, the Thai shrimp story is a good way for a non-profit to get the attention to the topic it cares the most: free trade. Here is the link to the story:
http://edition.cnn.com/2008/WORLD/asiapcf/04/23/shrimp.workers.report/index.html
Who sponsored the study? According to CNN, it is an “international nonprofit allied organization of the AFL-CIO”. Even if AFL-CIO did not intend to project this issue on the stage of primary race, the media is doing the job.
What is the interests of this story? This story is to drive the readers to import products are morally tainted. To prevent that is to establish a higher labour rights overseas among our free-trade trading partners. That will increase the costs of production overseas and thus make the domestic products more competitive, at least domestically. And even though US may not import shrimps from Thailand, the image that “imports are morally tainted” is implanted in the minds of the voters.
This is the same tactic (or effect) that the Tibet protests / Olympic torch protests achieve. If the timing of these stories are timed and are in a sequence, then they can build up a very effective momentum to force the issue from an individual story into a campaign issue where all candidates cannot afford to ignore.
Of course, the organization has to have some sort of ground level organization to make it work effectively, such as “concerned citizens” asking the right question in town hall meetings when the candidates attend. And such schedule is easy to obtain. Better yet, find out which media outlet and the name of the reporter were attending. (planting)
And when third party campaign work (i.e. soft money) in conjunction with these releases, they become powerful. While the media attention is on the issue, fundraising can get a much better lift of response rate. The metric of one time donor amount will see a spike. This is also a wonderful time for donor acquisition. Elections are exciting, even for shrimping!
Obama vs Clinton: A Lesson on Advocacy / Non-Profit
This 2008 election proves to be a textbook material for advocacy, fundraising and electioneering, even better than 2000 election. Clinton’s victory will certainly encourage her to continue her race. What Clinton shows this time in Pennsylvania is similar to what Obama showed when he was the underdog: money does not buy election victory all the time. Clinton won by 10%, CNN reports.
http://edition.cnn.com/2008/POLITICS/04/23/us.primary.intl/index.html?iref=hpmostpop
An indecisive Obama Super Tuesday victory brought this “lengthening, torturous” race because, as always, an indecisive result invites the loser for a re-match. And Clinton gladly took on the challenge of a re-match.
Obama out spent Clinton by 2 to 1. Obama enjoyed the positive media attention. And he had the momentum, the most important thing of all. And he yet he was behind by 10%. A lot of people may expect him to win and would not be surprised by a loss. But 10% probably is the threshold for “failure”.
The real loss of this race so far is Ralph Nader. He and/or his party have not improved their platform, i.e. the product, much since 2000. Neither did they improve their election techniques. Ralph Nader does not have the charm Obama has. However, the electioneering could have been improved when in fact Obama took the great leap.
Clinton won by canvassing, the most important virtue of a politician. Politics is a service industry. Responsiveness to voters, not leadership, is the virtue promoted by democracy. She canvassed hard in every county, in every city hall. And she mobilized her daughter and husband in the state. The air war of TV and Radio ads rained down by Obama did not bring him a victory just like money did not the Iowa victory for Clinton. Obama won Iowa by the activists. Clinton won by her hard work and her organization’s (or Governor Ed Rendall’s organization) hard work.
This race broadened the voter base of Democrats in Pennsylvania. And this is what advocacy / non-profit groups want. The organization itself need not lend its name in the campaign in order to reap the benefit of it. It’s the board members responsibility to participate in individual campaigns in order to gain the political access to the politicians, even though they may be the city council politicians. It is this type of occasion that the cause focused groups can cultivate the next group of volunteers, big ticket donors, board members, fundraisers. A broadening base means a longer list of “concerned citizens”.
When an election gets voters excited, voters are more willing to increase their level of civic participation, be it scrutineer, dropping flyer for an advocacy group, phone bank caller for a fundraising campaign of MADD, or even better attendance for the local recycling organization. Although this race is dragging on, this serves as an opportunity for all non-profit groups to enlarge their voice and base.
Leadership is wanted when voters are unable to specify their needs. When change is wanted without a laundry list is change for the sake of change. A victory by promoting leadership shows people want to be led, people expect someone who knows better than they do.
Why is Hamas ready for peace?
Carter says Hamas is ready. Why is Hamas “ready for peace” all of a sudden? What does it mean to us? Carter’s full transcript is here:
http://abcnews.go.com/print?id=4641038
Middle East is a difficult place to negotiate peace. It is even more difficult between Israel and the rest of the Middle East. Israel, due to historical baggage or lack of military depth, does not deal with anyone who does not recognize its existence.
Hamas understands they do not much chips to bargain with since Palestine is small, no resources to fight. The best they can do is to use their quantity and determination to maximize the damage in order to draw a negotiation. Their pledge to destroy Israel could be a real commitment among the religious zealots but cannot be taken seriously among the politicians in Hamas.
The question for Hamas should always have been timing: Are we ready to negotiate? They could have been ready for a while and we just do not hear much about it. These are the reasons they could be ready: they are confident they will be able to direct the debate in the next referendum, should a truce be produced with Israel and Abbas; Egypt is pushing toward an end game; they have completely digested their political gain from 2006 and military seizure of Gaza.
If peace deal is produced, Hamas would want to defeat it if it is not to the Hamas’ liking. Given that they are a grass root movement and they had a good election infrastructure proven by 2006 election victory, they should be able to feel that they are the ones who will have the veto power of the next peace process product: a truce.
Ever since Israel no longer manages the Gaza border with Egypt, this border became open and thus the border management became the responsibility of Egypt. And it would be difficult for Egypt to say no for people moving in and out of Gaza. So, this border management issue became a refugee management issue literally. For Israel, since peace means co-existence, two-state is inevitable. So, why border with it? Let it be someone’s problem. And if it became Egypt’s problem, Israel can make the argument that Egypt is failing in the war against terrorism. Now Egypt may have a greater incentive than before to push for a quicker resolution.
Hamas would not want to get eat more than they can chew. They were the underdog; they had to win over Fatah in order to face Israel. Then they won the election without “representation” internationally. Now they have a complete control of some territory, they now do not only have some vague concept of militia before the international media, but the military force in Gaza, electoral majority from 2006 election, they can be ready.
Hamas have a few good chips on their hands: 1) any deal needs democratic affirmation and they had the majority, so their opinion counts; 2) they out gunned everyone in the last battle (Gaza), they are here to stay and no one can get rid of them; 3) the pledge of “destruction of Israel” is on the table for negotiation.
For Israel, they know they will always be outnumbered. Even within Israel the Arab population is the fastest growing population. Peace cannot come from military might, for it requires an extinction of the enemy. When Hamas did not have any kind of mandate, Israel could afford not to negotiate to Hamas. After 2006, it would be a difficult proposition. Both sides needed a proper stage to facilitate en entry.
Carter may want to project this issue in the election. If Bush really wants to accomplish something like he said he was going to try, he could use this opportunity. Israel would want to wait and see who the next president is to formulate their next course of action. 2008 is unlikely to be the year for this kind of breakthrough.
The most important thing is Hamas will recognize a referendum. Hamas refusal to recognizing Israel will be dropped if the populace takes peace and precedence. Hamas cannot recognize Israel without a price.
What Can Non-Profits Do For Climate Change?
Bush announced his goals on climate change. Sierra Club already says Bush’s plan will require a miracle to save our planet. Even McCain’s ideas are more agressive than Bush’s. Very little is said about climate change in yesterday’s Pennsylvania presidential debate between Clinton and Obama. Why is Bush anouncing something so useless and so late? Is it part of his last minute legacy plan? How does it relate to my non-profit organization when it is not an advocate of climate change?
This is his stall tactics.
Getting a bill passed requires a process in the congress and senate. It goes through committee, agenda arrangement, scope definition, text proof reading among members and aides, negotiation among members, parties and administration. By providing something (anything), it takes off some of this momentum to his goals.
Bush realizes that something will get passed in the next administration. But providing something so vague, he can drag the bargain wide open for the next round of lobbying and thus provide a possibility of pushing a resolution less aggressive than it otherwise would be.
In other words, he is not aiming for any kind of success. He is aiming for a pay back to his constituence. He is not even aiming for a legacy.
However, one point is worth noting: if Bush recognizes the need to address this issue, it will be difficult for anyone in the future to deny climate change. The remaining question will be what and how: what should be done and how to get it done.
A lot of attention will be focused on what the emission will be. However, the how question will affect more people in a wider range than media will be able to focus on. Advocacy groups/nonprofit organizations representing interests not directly affected by the emission will have to pay attention on the how question. Unfortunately, since media do not focus on the how part, advocacy groups and nonprofit usually lose their sight of it. Here are two examples to achieve the same goal with different implementations and their corresponding effects outside of pollution.
Example: emission legislation requires enforcement. This will increase the government budget, i.e taxes. Who gets the worst of it? Small business since cost of compliance always takes up a higher proportion of cost than a big business. Emission can also be achieved by placing a higher gas tax and increasing personal income tax exemption at the same time without affecting the federal government’s revenue as well as its budgeting. And the effect will be significantly different in aspects outside of the pollution.
The former will increase government participation in the overall economy. The latter will not. The latter will at the same time help elevate the tax burden on the lowest income bracket tax payers, same the $10k/year income group. Now, the poverty group suddenly have an interest in how the goals are achieved.
When attention is so focused on emission, attention on other pressing issues are forgotten. That is why climate change can be percevied, as an elitest cause, as a competing interest against other interest groups, say proverty groups. It needs not be. In fact, groups of different causes can exploit opportunities of any issue to further its own goal without sacrificing the issue of the moment.
And exactly because advocacy groups and nonprofit organizations may not be able to follow these legislation details as well as being not able to provide these suggestions to complement the legislation to achieve its goals (piggy bag), politicians now can service the interests of the lobbyists’ paying customers without much scrutiny. Therefore, if the issue of the moment is to discourage a certain behaviour (pollution), then your organization can always advocate to tax that behaviour and cut taxes (or spend that same tax revenue) for your constituence (seniors, students, low income, domestic abuse victim).
Fiscal policy is boring. However, that is the most effectively way to modify the aggregate behaviour to achieve a goal. Aggregately, people adjust their behaviour to the most use of their budget. Even people who do not subscribe to that specific ideology now gets taxed and contributed to the cause. An issue completely unrelated to your organization’s goal can help you when the implementation can be compromised to your favour. In fact, you can suddenly become an ally of any issue of the moment, if you can demonstrate you can mobilize votes to support a legislation.
When Will Gov’t Get Us Out Of Recession?
McCain promises a gas tax relief to fight recession, see chart. This is another political talk completely for electoral consumption. This piecewill explain why. In a time like this, mergers are expected. And this industry is very sensitive to the price of oil. If it were not because of pilot union and anti-trust issues, mergers in airline industry could have happened long agon. Will a recovery prevent more mergers?
More importantly, when will we get out of this recession?
We can buy all sorts of data. We can then plug the data into all kinds of models. Depending which economist and which paper / website you land on, you get a different estimate. Of all these estimates, only one (1) of them will be correct. So, as you get more and more estimates, the probability of getting the correct one among these will turn to zero (probability = 1/N, as N increases, probability goes to 0). So, when will the government get out of this hole? What can the government do to get us out? This is an election year, they better say something! Right?
This piece does not interpret economics based on knowledge from the discipline of economics. This piece explains some of the political certainties around this recession.
We are in an election year. In particular, an open race election year. That means no one can play and say “well, I will just stick with the same guy this time. Although I did not vote for him and I don’t like him much, I feel even less certain about the other guy. If I vote for the incumbent, at least I know what is in store.” Everyone is forced to choose for a new guy.
This is a political risk to the equity market, to the currency market. As the output of US slowly decrease in proportion to the rest of the world, more of the investment $ are from outside. So, while all the money want to find a place to wait this out, they naturally take the money home for a couple months. So, even if we were having a boom, our boom would not be as smooth. And of course if we go down, we go down harder, faster and longer.
Political risk will evaporate when the election result is settled. Given our interesting history, I doubt all the players have a fixed date in mind as to when the election will be settled.
Similarly, no politician wants to get their hands dirty at this time of the political cycle. They are either busy running their re-election campaign and therefore no time to study the fix of the recession legislation or they are waiting for the next White House tenant and bargain their best deal out of any kind of recession fix. So, no meaningful fix can come. We will get a tax rebate. However, this rebate is not a meaningful fix. A tax rebate is a political fix during a recession, i.e. to make the voters feel good enought to vote for the incumbent.
Next, when the election is settled, the out going president is unable to fix anything. And he should not. For if he passes any legislation or even by executive order, how can such action be honored by the next president? It would only get messier. A responsible outgoing elected official would not do such a thing.
Then it comes the new President. Now, when will this happen? That would already be 2009 January. A new President still has to check the pulse and any other mess under the carpet that the previous president did not pass along “informatively”. But the time the new guy can have prescrition, we will be looking at another 2 or 3 months. That will work out to be 2009 April.
When there will be an idea, a decent idea, it has to get through the negotiation with the House and Senate. Every Joe, Dick and Harry has his own pet proect, pet cause, pet donor to put on a price to pass the legislation and what not. That will also take a little of time. Let’s give it a month for all phone tags, tea times, the favours and scores to get settled over with. We are now looking at 2009 May. Forget about the summer and all that. Any economic plan to overcome a recession will not work over a weekend.
If the economy will come back based on government intervention, the earliest time will be by the fall of next year. We have two (2) recessions that lasted 16 months (73 and 81) in the last 60 years. If an economy can only get back on its feet based on government intervention, then this is usually not a recession. This probably is a depression.
So, don’t listen to the political talk. These “solutions” usually cannot do a dent. The effects of government fiscal policies and programmes do not affect the economy in such a time span (as in months). These interventions affect the market set up and their effects are measured in years and decades.
Short term interventions require government’s active participation in the market (whatever market we are concerned with). This kind of short term interventions are effective when the action 1) is rare and 2) is taken shiftly.
Interest rate fluctuation is the first kind, however the Fed has been too active and its effect is wearing out.
Shiftly is a time element. The reaction has to be quick. Such a quick action can only be carried out by an undemocratic institution, like the Fed. And China’s interventions are effective because they are undemocratic. They can shut down all real estate transaction given one day’s notice in order to freeze the price drop. But we do not want that kind of life, do we?
The checks the federal government cannot save you, right? “They are better than nothing” is exactly what it is. It is a feel-good thing. It does not save you and the politicians knew it. It is for them to say they did their work and it is unfortunate that it did not work you, in this case.
The moral of the story is that expect government interventions to be ineffective to save us given the time frame we wish a recovery will happen. Some of the government interventions will be effective though, if we can sit with a much longer time span.
