Tuesday, September 20, 2011

Politics of Peace

           
             So last week Palestinian President Mahmoud Abbas announced in Ramallah that he will be demanding full UN statehood for his people at the United Nations this week. He plans to apply to the UN Security Council first before going to the General Assembly, where he might get two third majority for creating a new Palestinian state. As far as Security Council is concerned, the application will be dead on arrival since US is opposing.
           
             So, why is President Abbas short-cutting (or trying to) the process, even his prime minister, Salam Fayyad, is against the idea of going to UN for statehood? Some people think that Abbas wants to lose. The US veto, he hopes, will tell the world that Israel, backed by the U.S., is the barrier to peace. But this is no way to bring peace to the people. I am totally for the ‘Two State theory’, but real problems needs to be solved before any ‘unilateral’ actions are taken.

            To Abbas’s point, Israel’s President Benjamin Netanyahu has been leaning with his right wing leaders and hence no fruits are bore from the long standing, boring peace negotiations. But again, Abbas has been Netanyahu’s partner in crime. For one, the charters of both wings of the Palestinians: Fatah and Hamas – call for the elimination of Israel. And secondly, Abbas and not Netanyahu, is the one who has refused to enter negotiations without conditions. More importantly, Abbas is seeking something at the UN that was already offered to the Palestinians in 2003 (Camp David summit organized by President Clinton) and rejected by them.

            I have been to the place in question and it is beautiful. Both Israelis and Palestinians have suffered a lot and I think politicians needs to keep politics aside and become leaders for once. They need to be sincere in there acts and should put peoples interest first for they too have right to live there life in peace and harmony. Israeli and Palestinian children’s have suffered enough. From all the wishes I have, I really want to see peace in the Middle East before my life ends. 

Friday, September 16, 2011

The empire: United States of America

                                         
            So, is this the beginning of the end of the empire of the 20th century, the United States of America? Pessimists have been forecasting the decline of America since 18th century. But this time, it seems like they might be right. Are they?
           
            If you look back in history, once an empire loses its economic sheen, its political clout also shrinks. Either it be the Romans, the Ottomans, or the Great Britain. Their economic debacle was the reason behind their fall from grace. Is America going to be the latest entry in this list?
I highly doubt it.
           
            For one, the recent economic troubles, although severe, are not big enough to bring down the economic behemoth. Secondly, there is no heir apparent for the global leadership position. I know there are some names in the ring, first and foremost being China. Seriously!!
           
            There is no doubt that China has achieved a lot on their economic front. According to one study, since the last 30 years China has brought more then 300million Chinese out of poverty. That is a big achievement for a nation that is still developing. With all the money that China has (because of the favorable trade balances) and with its strong military, China is still lagging behind in political reforms. Now, I know people will say who cares about voting when citizens are rich!, But in the not so distant future a time will come when Chinese will ask for the same ‘rights’ that their counterparts have. It is that moment, I think China will either breakdown or become a true heir apparent to lead the political world. Till then, China will have to be content with their major economic leadership role.
           
            As far as Europe is concerned, the recent debt fears in the EU region is enough reason to discard their candidacy for the leadership role.
           
           There are some observers who think that the unipolar world lead by US is history and the future belongs to a multi-polar world, where countries like EU, China, India and Russia will play a very significant role. I Agree, but I think that they will still need the US to show them the way.

            Also, the single most important thing that America has is its freedom of thought and expression for its citizens. I think, that alone will keep America as the top nation of the world.  
           Constantinople fell to the Ottomans after two centuries of retreat and decline. It took two world wars, a global depression and the onset of the Cold War to lay the British Empire low. So it's a safe bet that the era of American dominance will not be brought to a close by credit default swaps or mark-to-market accounting!!






Thursday, September 8, 2011

29/10, 13/02, 7/12, 26/11 and now 07/09

             My condolences to Delhi victims and there families.

            So, the cycle starts again…Blast…Victims…Public agony…Statements denouncing blasts by both ruling and opposing parties…Suspect sketches…Governments promise to increase security…Potential suspect in custody…Bollywood condemns attack…Media headlines…Time lapse…Blast!! And it starts all over again.

            It’s a pity; just a fortnight ago we were celebrating the ‘victory’ (if we may) over political corruption. Terrorism is the only thing that is more dangerous then corruption. None of us blessed souls could even imagine the loss that the victim’s families suffered, no matter how pretty words we use to describe our anger and sympathy. On the national front I sincerely hope that India doesn’t create a new National security agency, for the one from 26/11/08 is still not ready yet.

            So what do we take from this; another blunder from the security forces? Is this the sign of an emerging power? We can’t safeguard our capital’s judicial courts, let alone securing common citizens. Or is this one of the ‘rare’ lapses that the intelligence agencies had ‘coz we don’t know from how many threats they save India from!! again I am not defending them, but just giving them the benefit of doubt and taking into consideration there genuine efforts .

            All the above dates are colored with blood of innocent victims of terrorism. Given the current situation the only question arising in my mind is what will be the next date? I don’t have much to say except to wish that terrorist incidence doesn’t become a ‘way of life’ for Indians.   


Inflation: “Please don’t hate me”


            So, there is going to be one more speech made by President Obama tonight, right before the NFL season opener!! This time around he has chosen to speak on ‘Jobs’ and why not, after all elections are only 14 months off and Republican candidates, a whole lot of them, are gaining ground on him.

            US was still reeling from the 2007-08 crises and the recent news of Europe’s debt has bring to a halt the US snail paced recovery. By now, we all know that US consumer spending accounts for about 70% of the GDP. And during sensitive times like this when unemployment is over 9% (16% shadow unemployment) confidence is low and hence consumers are  more hesitant to spend and hold back on major purchases like homes, vehicles and travel, to name a few. This will impact the GDP growth and private sectors ability to expand their businesses and job creation.
                       
            This is where I think government should step in. As per my precious post (The Story So Far) , I feel that the gap that is created by consumer should be filled up by government spending. I know there is a big hoopla of US deficit and debt, but look what happened after S&P downgraded long term US debt, it actually went up in value. In fact, it is more valuable then the debt of AAA graded countries like France and Germany.

            The current core inflation (ex-food & energy) in US is 1.6%; it’s no where near the danger zone (around 4%). Government needs to spend money and flood the system with dollars. It would impact the economy in the following ways:
  • Higher-than-normal inflation would lower the nation's debt in real dollars.
  • Government won’t have to cut spending and increase taxes.
  • US dollar will reduce in value hence make US goods more competitive.
  • The unemployment rate would fall because of increase in manufacturing activities.
  • Increase in employment will boost the prices of homes.

      The negative impact of a devalued dollar is going to be the commodity prices. But given the upside of the inflation on domestic economy, US have to think local. Also, Increasing inflation might not be an easy step for the government and the Fed to take, for US has adhered to the ‘Strong-Dollar’ policy for quite a while.  But I think the time is ripe to let the dollar loose.