Wednesday, September 22, 2010
Saturday, September 18, 2010
America Without a Middle Class - I
Elizabeth Warren : On the disappearing American Middle-Class
Can you imagine an America without a strong middle class? If you can, would it still be America as we know it?
Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.
The crisis facing the middle class started more than a generation ago. Even as productivity rose, the wages of the average fully-employed male have been flat since the 1970s. But core expenses kept going up. By the early 2000s, families were spending twice as much (adjusted for inflation) on mortgages than they did a generation ago -- for a house that was, on average, only ten percent bigger and 25 years older. They also had to pay twice as much to hang on to their health insurance.
To cope, millions of families put a second parent into the workforce. But higher housing and medical costs combined with new expenses for child care, the costs of a second car to get to work and higher taxes combined to squeeze families even harder. Even with two incomes, they tightened their belts. Families today spend less than they did a generation ago on food, clothing, furniture, appliances, and other flexible purchases -- but it hasn't been enough to save them. Today's families have spent all their income, have spent all their savings, and have gone into debt to pay for college, to cover serious medical problems, and just to stay afloat a little while longer.
America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety. Paying for a child's education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them hurtling over an economic cliff.
America without a strong middle class? Unthinkable, but the once-solid foundation is shaking.
Friday, September 17, 2010
Asatyameva Jayete.
A few days ago I was in a panel discussion on mergers and acquisitions in Frankfurt, Germany, organised by Euroforum and The Handelsblatt, one of the most prestigious newspapers in German-speaking Europe.
The other panellists were senior officials of two of the largest carmakers and two top insurance companies — all German multinationals operating in India.
The panel discussion was moderated by a professor from the esteemed European Business School. The hall had an audience that exceeded a hundred well-known European CEOs. I was the only Indian.
After the panel discussion, the floor was open for questions.That was when my “moment of truth” turned into an hour of shame, embarrassment — when the participants fired questions and made remarks on their experiences with the evil of corruption in India.
The awkwardness and humiliation I went through reminded of The Moment of Truth, the popular Anglo-American game. The more questions I answered truthfully, the more the questions got tougher. Tougher, here means more embarrassing.
European disquiet
Questions ranged from “Is your nation in a coma?”, the corruption in adminstration, even in judiciary, the possible impeachment of a judge, the 2G,teecom scam and to the moneyin billions, parked illegally in tax havens.
It is a fact that the problem of corruption in India has assumed enormous and embarrassing proportions in recent years, although it has been with us for decades. The questions and the debate that followed in the panel discussion was indicative of the European disquiet. At the end of the Q&A session, I surmised Europeans perceive India to be at one of those junctures where tripping over the precipice cannot be ruled out.
Let me substantiate this further with what the European media has to say in recent days.
In a popular prime-time television discussion in Germany, the panellist, a member of the German Parliament quoting a blog said: “If all the scams of the last five years are added up, they are likely to rival and exceed the British colonial loot of India of about a trillion dollars.”
Banana Republic
One German business daily which wrote an editorial on India said: “India is becoming a Banana Republic instead of being an economic superpower. To get the cut motion designated out, assurances are made to political allays. Special treatment is promised at the expense of the people. So, Ms Mayawati who is Chief Minister of the most densely inhabited state, is calmed when an intelligence agency probe is scrapped. The multi-million dollars fodder scam by another former chief minister wielding enormous power is put in cold storage. Prime Minister Manmohan Singh chairs over this kind of unparalleled loot.”
An article in a French newspaper titled “Playing the Game, Indian Style” wrote: “Investigations into the shadowy financial deals of the Indian cricket league have revealed a web of transactions across tax havens like Switzerland, the Virgin Islands, Mauritius and Cyprus.” In the same article, the name of one Hassan Ali of Pune is mentioned as operating with his wife a one-billion-dollar illegal Swiss account with “sanction of the Indian regime”.
A third story narrated in the damaging article is that of the former chief minister of Jharkhand, Madhu Koda, who was reported to have funds in various tax havens that were partly used to buy mines in Liberia. “Unfortunately, the Indian public do not know the status of that enquiry,” the article concluded.
“In the nastiest business scam in Indian records (Satyam) the government adroitly covered up the political aspects of the swindle — predominantly involving real estate,” wrote an Austrian newspaper. “If the Indian Prime Minister knows nothing about these scandals, he is ignorant of ground realities and does not deserve to be Prime Minister. If he does, is he a collaborator in crime?”
The Telegraph of the UK reported the 2G scam saying: “Naturally, India's elephantine legal system will ensure culpability, is delayed.”
Blinded by wealth
This seems true. In the European mind, caricature of a typical Indian encompasses qualities of falsification, telling lies, being fraudulent, dishonest, corrupt, arrogant, boastful, speaking loudly and bothering others in public places or, while travelling, swindling when the slightest of opportunity arises and spreading rumours about others. The list is truly incessant.
My(MOHAN'S) father, who is 81 years old, is utterly frustrated, shocked and disgruntled with whatever is happening and said in a recent discussion that our country's motto should truly be CHANGED TO
Asatyameva Jayete.
Europeans believe that Indian leaders in politics and business are so blissfully blinded by the new, sometimes ill-gotten, wealth and deceit that they are living in defiance, insolence and denial to comprehend that the day will come, sooner than later, when the have-nots would hit the streets.
In a way, it seems to have already started with the monstrous and grotesque acts of the Maoists. And, when that rot occurs, not one political turncoat will escape being lynched.
The drumbeats for these rebellions are going to get louder and louder as our leaders refuse to listen to the voices of the people. Eventually, it will lead to a revolution that will spill to streets across the whole of India, I fear.
Perhaps we are the architects of our own misfortune. It is our sab chalta hai (everything goes) attitude that has allowed people to mislead us with impunity.
No wonder Aesop said. “We hang the petty thieves and appoint the great ones to high office.”
(The author is former Europe Director, CII, and lives in Cologne, Germany. )
Tuesday, September 14, 2010
Transportation Innovation : Now in India
Last Month, I came across the MegaBus, Chinese Transportation Innovation. Now India seems to be not that far behind. Transportation Pods are being planned in Gurgaon, Delhi.
Wednesday, September 8, 2010
One in three Indians 'utterly corrupt': watchdog head
Pratyush Sinha, who retired as India's Central Vigilance Commissioner this week, said the worst part of his "thankless job" was observing how corruption had increased as people became more materialistic.
"When we were growing up I remember if somebody was corrupt, they were generally looked down upon," he said. "There was at least some social stigma attached to it. That is gone. So there is greater social acceptance."
Transparency International, the global anti-graft body, puts India 84th on its corruption perception index with a 3.4-point rating, out of a best possible score of 10.
New Zealand ranks first with 9.4 points and Somalia last on 1.1 points.
The campaign group has said that each year millions of poor Indian families have to bribe officials for access to basic public services.
Sinha told the Mint newspaper in an interview published on Tuesday that 20 percent of Indians were "honest, regardless of the temptations, because this is how they are. They have a conscience.
"There would be around 30 percent who would be utterly corrupt. But the rest are the people who are on the borderline," he said, adding that corruption was "palpable".
Sinha said that in modern India "if somebody has a lot of money, he is respectable. Nobody questions by what means he has got the money."