Jobs, Jobs, More Jobs!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
No matter which part of the world you are in, you hear the same refrain from politicians – Creating and sustaining employment. That they focus on jobs almost to the exclusion of anything else is understandable. Sustained employment is the source of livelihood of the masses. And the masses can be very rude at the polls if their purse is thin or they don't have a job on voting day! But much as jobs are today the visible sign of economic prosperity, should they be the only focus of our politicians? In fact, should job-creation even be on the politician's agenda?
Micro- and macro-economists see jobs as part of a larger picture in which a firm or a nation produces an (array) of outputs with several inputs of which labor is but one. The demand for labor and the change in it - which is what employment and job growth/loss measure - is itself derived from demand for products or aggregate economic activity. So, should we not instead worry about aggregate economic activity? A short-sighted, horse-blinded focus on jobs detracts from the larger task of maximizing the economy's growth. Besides, in socialist economies such as ours, a focus on employment - in particular a combination of labor-intensive policies and job quotas and reservations - will detract from profit maximization and turn our enterprises bloated with unqualified labor. Such unabashed support for maximizing employment has other micro- and macro-economic implications as well. First, firms are over-staffed and inefficient on account of a biased capital-labor ratio. Labor-intensive technologies and industries are favored over capital-intensive technologies. Second, the pressure to retain employees biases hours of employment, economics of production, and on a macro-economic scale, wages, the age of retirement, pension funding and even the labor-leisure trade-off. Third, cost-reducing technological innovation such as robotic automation and nano-technology have brought about new scale-economies in high-technology industries. Harping on labor-intensive policies excludes our economy from these advances, turns the clock of economic progress back and reduces our productivity, and in turn, international competitiveness.
These impacts are not necessarily anticipated (or for that matter, appreciated) by politicians with sights fixed for the day after elections. Come to think of it, there may be a 'political rate of unemployment' depending on who is in power, (while we measure the 'natural rate of unemployment' on the Phillips curve with 3SLS instruments)! In fact, the drama turns in to a comedy (I call it a tragedy) when unemployment and job growth are used as leverages by politicians conspiring with the industry (and labor unions?) to divert scarce public resources in to private investments that milk profits under the shelter of tax holidays in the guise of generating jobs for locals. In the days of yore when our country lacked investment, such policies could be passed off as part of the larger cause of nation-building. But in an increasingly competitive world, India can no longer afford its politicians ruining the financial state of the nation by promising jobs and subsidizing labor-intensive industries that play the petty, if enriching game. It is time our politicians desist from such ruinous practices in the interest of the nation - and for our voters and union leaders to understand that lop-sided emphasis on creating jobs could, paradoxically, hurt them in the long-run. If you ask me, there is no better time to reform labor laws, job reservations and the politician's mindset than when the economy is booming and job demand high.
Those who wish to second the motion, raise your hands.
Thursday, February 7, 2008
Sunday, February 3, 2008
Insurance Humor, Huh?
Insurance Humor, Huh?
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
It's been long since I wrote a humor column. Guess times have not been easy. So what makes me write one today? Did I chance upon a winning lottery ticket? Did someone claim Indian roads to be safe or clean? Did I hear a politician make a promise at an election rally? Or, did someone claim India was a democracy? Thankfully no! What got me thinking on the lighter side is the racket called 'insurance'.
In the US, medical insurance coverage jostle for the top slot with the Iraq invasion in voters minds. Insurance used to be the prudent part of one's savings that went toward ensuring financial stability in times of unexpected medical burden. But what it has turned out in to is a monstrous bureaucratic quagmire that squeezes every penny of earnings beyond breakfast money so lawyers may enrich themselves fighting off medical malpractice cases foisted by Las Vegas vacation returnees. So the choice before the familyman with modest means is either pay up and live in a shack, or join the millions who forego insurance, leaving themselves at the mercy of the state and the hospital should anything wrong befall them.
We in India, and I presume in other third-world nations as well, feel no such pressure. Life runs its course inspite of all the shortcomings of our various systems. To live thru a day and return home from work is a miracle in itself. Ask any Delhiite who walks as the Blue Line screams by, the Mumbaikar hanging precariously to the door of the suburban train rushing through tunnels, or the Chennai college student grabbing a window bar on the bus and hanging on for dear life till the next traffic signal. Why even I feel thankful to be alive everytime I drink a cola! In these days of insurance-administered 'statistics', who knows where one is a 'number'. You did not disclose all your health problems? Well, then you are a 'number' on the road today! Didn't pay a disputed broadband bill? God help you when you cross the street! (unless of course, you have an engagement of the nefarious or immoral kind). Then there are those communal, religious and national duties to discharge that sometimes involve showing up in mass protests or in locations where certain risks have been 'assigned' (They need 2 bodies from union workers to sanction the wage accord, so you better show up!). With all these risks to boast of, would anyone worry at all about insuring himself? If the chances of dying in the next twelve months are higher on the streets than in a hospital bed, would anyone care to buy medical insurance? Or, undergo costly medical procedures for chronic diseases? Why I predict a dramatic fall in the price of plastic surgery in terrorist infested towns! Ain't it amazing how the priority for medical insurance fizzles away by manipulating man-made risks?
Now that should give US policymakers a pause! Wanna go the Indian way? (We even have a software that assigns numbers 'randomly'. It was commissioned by...nevermind the details)!!!!!!!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
It's been long since I wrote a humor column. Guess times have not been easy. So what makes me write one today? Did I chance upon a winning lottery ticket? Did someone claim Indian roads to be safe or clean? Did I hear a politician make a promise at an election rally? Or, did someone claim India was a democracy? Thankfully no! What got me thinking on the lighter side is the racket called 'insurance'.
In the US, medical insurance coverage jostle for the top slot with the Iraq invasion in voters minds. Insurance used to be the prudent part of one's savings that went toward ensuring financial stability in times of unexpected medical burden. But what it has turned out in to is a monstrous bureaucratic quagmire that squeezes every penny of earnings beyond breakfast money so lawyers may enrich themselves fighting off medical malpractice cases foisted by Las Vegas vacation returnees. So the choice before the familyman with modest means is either pay up and live in a shack, or join the millions who forego insurance, leaving themselves at the mercy of the state and the hospital should anything wrong befall them.
We in India, and I presume in other third-world nations as well, feel no such pressure. Life runs its course inspite of all the shortcomings of our various systems. To live thru a day and return home from work is a miracle in itself. Ask any Delhiite who walks as the Blue Line screams by, the Mumbaikar hanging precariously to the door of the suburban train rushing through tunnels, or the Chennai college student grabbing a window bar on the bus and hanging on for dear life till the next traffic signal. Why even I feel thankful to be alive everytime I drink a cola! In these days of insurance-administered 'statistics', who knows where one is a 'number'. You did not disclose all your health problems? Well, then you are a 'number' on the road today! Didn't pay a disputed broadband bill? God help you when you cross the street! (unless of course, you have an engagement of the nefarious or immoral kind). Then there are those communal, religious and national duties to discharge that sometimes involve showing up in mass protests or in locations where certain risks have been 'assigned' (They need 2 bodies from union workers to sanction the wage accord, so you better show up!). With all these risks to boast of, would anyone worry at all about insuring himself? If the chances of dying in the next twelve months are higher on the streets than in a hospital bed, would anyone care to buy medical insurance? Or, undergo costly medical procedures for chronic diseases? Why I predict a dramatic fall in the price of plastic surgery in terrorist infested towns! Ain't it amazing how the priority for medical insurance fizzles away by manipulating man-made risks?
Now that should give US policymakers a pause! Wanna go the Indian way? (We even have a software that assigns numbers 'randomly'. It was commissioned by...nevermind the details)!!!!!!!
Global Warming In My Mittens!
Global Warming In My Mittens!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
I have had this creepy feeling about global warming for a long time. The phenomenon was recognized even in the sixties and received scant attention for decades. Then, when it did, the focus was on identifying impacts and preparing for them, not solving the problem. Which brings up the slimy prospect: what if global warming is beneficial to humans, if only on balance. No one disputes the real impacts on sea level from melting of polar ice and the Greenland icecaps. Or, for that matter, the increase in frequency of anomalous weather events. The former is likely to be slow relative to the pace of human resettlement so that it doesn't pose a problem in most countries. (Crowded islands excepted). The latter is easily anticipated and partially internalized by various calamity and agriculture insurance policies. Changes in diurnal temperature patterns are anyway dwarfed by temperature changes from day to day. An increase in humidity could affect asthmatics, but they have their inhalers. Even the impacts on glacial melt rivers can be anticipated by prudent water resource management policies. Weigh against this the large areas of semi-frigid land that will open up for agriculture (for a longer part of the year, with water aplenty), the boom in stock markets anticipating higher demand for renewable energy technology and air conditioners, the reduction in fuel bills in the temperates and beyond, and the increase in rainfall (and agricultural productivity) and suddenly, at least privately, one is not too sure if all the brouhaha about global warming is worth the squeeze on the purse that would follow if we tried to reverse it! I half suspect there are those countries that have strategically positioned themselves to capture these gains from global warming.
So, humans could possibly emerge happier from global warming, especially if it is tackled with a bit of sensitivity to the poor. Does that mean all is well and we can get back to sipping tea? It all boils down to how much we care for the impacts on the plant world, the animal world and outlines of geographic features on the globe! Do we care about dogs dying in the extreme heat of the summer exacerbated by global warming and air conditioner exhaust? Does it matter that ships and ocean liners fly kites as they sail the 'northern passage'? Do we care about whales and creatures of the sea going haywire figuring out why the sea is getting warm even as it gets polluted? Does it matter that the mango tree flowers in August to yield fruit on the coldest day of January? Would it hurt your enjoyment of the symphony orchestra if the currents in the oceans turned weaker or reversed directions? Or, animals experienced altered behavior patterns and lower sperm count? Would your grandchildren care that the many biological, chemical and physical phenomena taught to us – carbon cycle, acid rain, eutrophication, desertification, migration, diurnal/seasonal phenomena, glacial melting – to name a few would be altered with unpredictable impacts on plants and animals and their interaction with the environment. Does it matter at all to our policy makers that some of these environmental impacts are essentially irreversible? Why do our leaders and strategists negotiate global warming as if it were merely a human problem? The bottom line, if you ask me, is that as much as we care about our longevity and survival, the human race gives a damn about calamitous impacts of its existence on flora, fauna and the environment (at least not until they drop in to the list of endangered species, by which time it is already too late). Our policies to date have been largely anthropocentric. Will we ever regulate for the plants and animals in Noah's ark?
And here's the frightening prospect (just between you and me). At the end of the day (a few decades from now), we may just find comfort in a hotter world in which the tropics are infested not by insects but humans, while the temperates enjoy the bounty conferred by global warming. And 'we' will suffer hotter summers from warming the world with our coal-fired utilities while 'they' profit from selling us more wheat from an expanded cultivation area and lengthened growing season? In other words, what if it is not 'global collusion', but collusion of the developed world against the developing world - a 'You Pollute For Our Second Rainbow' strategy?
Don't scratch your brains out!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
I have had this creepy feeling about global warming for a long time. The phenomenon was recognized even in the sixties and received scant attention for decades. Then, when it did, the focus was on identifying impacts and preparing for them, not solving the problem. Which brings up the slimy prospect: what if global warming is beneficial to humans, if only on balance. No one disputes the real impacts on sea level from melting of polar ice and the Greenland icecaps. Or, for that matter, the increase in frequency of anomalous weather events. The former is likely to be slow relative to the pace of human resettlement so that it doesn't pose a problem in most countries. (Crowded islands excepted). The latter is easily anticipated and partially internalized by various calamity and agriculture insurance policies. Changes in diurnal temperature patterns are anyway dwarfed by temperature changes from day to day. An increase in humidity could affect asthmatics, but they have their inhalers. Even the impacts on glacial melt rivers can be anticipated by prudent water resource management policies. Weigh against this the large areas of semi-frigid land that will open up for agriculture (for a longer part of the year, with water aplenty), the boom in stock markets anticipating higher demand for renewable energy technology and air conditioners, the reduction in fuel bills in the temperates and beyond, and the increase in rainfall (and agricultural productivity) and suddenly, at least privately, one is not too sure if all the brouhaha about global warming is worth the squeeze on the purse that would follow if we tried to reverse it! I half suspect there are those countries that have strategically positioned themselves to capture these gains from global warming.
So, humans could possibly emerge happier from global warming, especially if it is tackled with a bit of sensitivity to the poor. Does that mean all is well and we can get back to sipping tea? It all boils down to how much we care for the impacts on the plant world, the animal world and outlines of geographic features on the globe! Do we care about dogs dying in the extreme heat of the summer exacerbated by global warming and air conditioner exhaust? Does it matter that ships and ocean liners fly kites as they sail the 'northern passage'? Do we care about whales and creatures of the sea going haywire figuring out why the sea is getting warm even as it gets polluted? Does it matter that the mango tree flowers in August to yield fruit on the coldest day of January? Would it hurt your enjoyment of the symphony orchestra if the currents in the oceans turned weaker or reversed directions? Or, animals experienced altered behavior patterns and lower sperm count? Would your grandchildren care that the many biological, chemical and physical phenomena taught to us – carbon cycle, acid rain, eutrophication, desertification, migration, diurnal/seasonal phenomena, glacial melting – to name a few would be altered with unpredictable impacts on plants and animals and their interaction with the environment. Does it matter at all to our policy makers that some of these environmental impacts are essentially irreversible? Why do our leaders and strategists negotiate global warming as if it were merely a human problem? The bottom line, if you ask me, is that as much as we care about our longevity and survival, the human race gives a damn about calamitous impacts of its existence on flora, fauna and the environment (at least not until they drop in to the list of endangered species, by which time it is already too late). Our policies to date have been largely anthropocentric. Will we ever regulate for the plants and animals in Noah's ark?
And here's the frightening prospect (just between you and me). At the end of the day (a few decades from now), we may just find comfort in a hotter world in which the tropics are infested not by insects but humans, while the temperates enjoy the bounty conferred by global warming. And 'we' will suffer hotter summers from warming the world with our coal-fired utilities while 'they' profit from selling us more wheat from an expanded cultivation area and lengthened growing season? In other words, what if it is not 'global collusion', but collusion of the developed world against the developing world - a 'You Pollute For Our Second Rainbow' strategy?
Don't scratch your brains out!
Thursday, January 31, 2008
An Online Market for Easements?
AN ONLINE MARKET FOR EASEMENTS?
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
At the rate land is gobbled up by the rich, commercial establishments and real estate companies, (and looking at the exponent on the price projection) you might be excused for putting up your neighbor's land for sale and running away with the proceeds to Tonga! But seriously, in a land of a billion people, land is increasingly scarce. After all, we need land for roads, parking spaces, parks, cinema 'complexes', stadiums, malls, offices, palatial bungalows, cottages, hotels, entertainment parks – the list is endless. Look what suburban sprawl did to the US. If we followed them, there would be no rural hinterland to talk about. Even as things stand, our forest cover and our bio-diversity is being raped by an economy that only cares for GDP growth and profits at the bourses. If things continue at this pace, India will be one vast stretch of concrete interspersed with asphalt from Kargil to Kanyakumari!
Now, I am no tree hugger who would brave beheading for the cause of the environment. But, we as a nation can do more than piously recite the statistics bemoaning the loss of forest cover and bio-diversity. One of the primary tasks facing the nation is to conserve its natural heritage. We simply cannot afford to turn our green hinterlands in to SEZs where factories dump waste because the land was provided free with a 15 year tax holiday to top it. A country with a declining forest cover and disappearing fauna must pro-actively put aside land away from 'development' at the hands of our marauders. While issuing a fiat to reserve land around parks and forests would be straightforward, it would not be necessarily efficient. Land parcels are often not available contiguously or at the same time. Besides, the question of compensating owners is likely to embroil such policies in to failure.
Let us explore a market-based alternative, as sketchy and tentative as it may be. To begin with, let's propose an externality in the sense that capitalist development of land ignores the value of environmental services and passive WTP values associated with undeveloped land. Left unattended, the situation will take a turn for the worse, eventually resulting in the extermination of forest cover, and the flora and fauna contained in it. To counter this eventuality, we presume the government issues a funded mandate to increase the green cover from, say, 15% to 30% over a period of two decades. This mandate is implemented annually thru an 'conservation easement subsidy vouchers' scheme that provides subsidy for purchase of easements. The government issues a certain amount of vouchers to each state which in turn distributes it among its various districts. The district authority calls competitive bids for the vouchers. Those participating – real estate firms, individuals, national parks, conservation groups, environmental trusts and organizations bid for the subsidy vouchers. The authority issues conservation easement-cum rezoning vouchers in order of increasing subsidy bids limited by its subsidy budget. Bid winners receive the subsidy when they provide proof of land/easement purchase.
At this point, we have a demand for easements derived from the mandate, and a formal means to provide subsidy to the initial participants in the conservation easements market. What is necessary now is an online market for trading these easements across various classes of market players – commercial developers, speculators, investors, environmental trusts, national parks, conservation groups and so on. The online easements market could run parallely or as part of a traditional real estate market that trades land parcels much like one trades shares. (Easements will remain easements as long as they are traded in the easements market. A developer who seeks to purchase and convert easement for development must have it re-zoned before moving it to the 'land' section of the online market.). Easement and land prices will reflect their supply and demand as perceived by various participants in the market and their intentions/objectives. Higher demand for land development will boost easement prices, providing the necessary incentive for land holders to offer their land as easements. The scheme provides for inter-spatial, and even inter-parcel land-easement arbitrage. Thus, the market provides a dynamic equilibrium between easement prices and prices of commercial land parcels. Such arbitrage between multiple uses for easements and land is on one hand likely to reveal the shadow values associated with unpriced/unappreciated uses/services of land, and on the other bring about a dynamic equilibrium that equates marginal values across parcels of easements and land across space and time.
The 'easement voucher cum online easement–land market' could enable the nation to achieve its green cover goal flexibly at a much lower cost and at an earlier date with the voluntary participation from all stakeholders.
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
At the rate land is gobbled up by the rich, commercial establishments and real estate companies, (and looking at the exponent on the price projection) you might be excused for putting up your neighbor's land for sale and running away with the proceeds to Tonga! But seriously, in a land of a billion people, land is increasingly scarce. After all, we need land for roads, parking spaces, parks, cinema 'complexes', stadiums, malls, offices, palatial bungalows, cottages, hotels, entertainment parks – the list is endless. Look what suburban sprawl did to the US. If we followed them, there would be no rural hinterland to talk about. Even as things stand, our forest cover and our bio-diversity is being raped by an economy that only cares for GDP growth and profits at the bourses. If things continue at this pace, India will be one vast stretch of concrete interspersed with asphalt from Kargil to Kanyakumari!
Now, I am no tree hugger who would brave beheading for the cause of the environment. But, we as a nation can do more than piously recite the statistics bemoaning the loss of forest cover and bio-diversity. One of the primary tasks facing the nation is to conserve its natural heritage. We simply cannot afford to turn our green hinterlands in to SEZs where factories dump waste because the land was provided free with a 15 year tax holiday to top it. A country with a declining forest cover and disappearing fauna must pro-actively put aside land away from 'development' at the hands of our marauders. While issuing a fiat to reserve land around parks and forests would be straightforward, it would not be necessarily efficient. Land parcels are often not available contiguously or at the same time. Besides, the question of compensating owners is likely to embroil such policies in to failure.
Let us explore a market-based alternative, as sketchy and tentative as it may be. To begin with, let's propose an externality in the sense that capitalist development of land ignores the value of environmental services and passive WTP values associated with undeveloped land. Left unattended, the situation will take a turn for the worse, eventually resulting in the extermination of forest cover, and the flora and fauna contained in it. To counter this eventuality, we presume the government issues a funded mandate to increase the green cover from, say, 15% to 30% over a period of two decades. This mandate is implemented annually thru an 'conservation easement subsidy vouchers' scheme that provides subsidy for purchase of easements. The government issues a certain amount of vouchers to each state which in turn distributes it among its various districts. The district authority calls competitive bids for the vouchers. Those participating – real estate firms, individuals, national parks, conservation groups, environmental trusts and organizations bid for the subsidy vouchers. The authority issues conservation easement-cum rezoning vouchers in order of increasing subsidy bids limited by its subsidy budget. Bid winners receive the subsidy when they provide proof of land/easement purchase.
At this point, we have a demand for easements derived from the mandate, and a formal means to provide subsidy to the initial participants in the conservation easements market. What is necessary now is an online market for trading these easements across various classes of market players – commercial developers, speculators, investors, environmental trusts, national parks, conservation groups and so on. The online easements market could run parallely or as part of a traditional real estate market that trades land parcels much like one trades shares. (Easements will remain easements as long as they are traded in the easements market. A developer who seeks to purchase and convert easement for development must have it re-zoned before moving it to the 'land' section of the online market.). Easement and land prices will reflect their supply and demand as perceived by various participants in the market and their intentions/objectives. Higher demand for land development will boost easement prices, providing the necessary incentive for land holders to offer their land as easements. The scheme provides for inter-spatial, and even inter-parcel land-easement arbitrage. Thus, the market provides a dynamic equilibrium between easement prices and prices of commercial land parcels. Such arbitrage between multiple uses for easements and land is on one hand likely to reveal the shadow values associated with unpriced/unappreciated uses/services of land, and on the other bring about a dynamic equilibrium that equates marginal values across parcels of easements and land across space and time.
The 'easement voucher cum online easement–land market' could enable the nation to achieve its green cover goal flexibly at a much lower cost and at an earlier date with the voluntary participation from all stakeholders.
Saturday, January 12, 2008
Corruption, Desi style!
Corruption, Desi Style!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
Many heads have pondered over it, much has been written on it, and many a shelves have been filled investigating it that you'd wonder what I have to add to the phenomenon of corruption - short of suggesting the use of electric eels on the corrupt with divine or better yet, satanic intervention! But seriously, is corruption merely the lubricant that turns the wheels of the economy or is it the proverbial spanner in the wheels of progress? From the farmer who must bribe the bank officer before he signs the loan papers, the widow who must borrow to bribe to receive her husband's death certificate that qualifies her for insurance, the anxious parent in two minds about bribing the Principal to secure his child's admission, to the impatient guy all too willing to part with a few big notes to the license officer to drive away with his new SUV, all are examples of how corruption pervades the daily life of commoners. But much as this corruption is pervasive in our society, should it really be the focus of our attention?
Is it passe to target retail corruption ignoring corruption at the higher levels of society and the economy? Retail corruption will always be. Much as we are warned not to tip public servants, some such as the postman, are so familiar that one is only too willing to share the festivities. And is money for a cup of tea to your garbage handler corruption? Even if it is, is it that pernicious to our economy? Shouldn't corruption be choked in the higher echelons of power? Corruption defined not necessarily by the money that changes hands, corruption that takes many hues unknown to the public – corruption of the ideals, suppression of the intelligent, the moral and the hardworking (and lately, the green and the left-leaning), corruption in the issue of industrial licenses and environmental permits, limits on (or perversely increases in) FDI investments, defence purchases, pollution regulations, rate regulations, minimum support prices, monetary policy, or deals that extend across generations or in to the family of the in-laws (We'll make sure your son-in-law is on the ONGC board). Corruption manifests in other more pernicious forms such as the accommodation of foreign suggestions in the budget and monetary policies (Can't let down the republicans and business houses who supported our stock markets). I suspect even the timing of mid-term elections are negotiable with 'those-who-should-not-be-named'! (Three cheers to the NAM!) If this is not subverting the popular mandate to secure private riches, I don't know what is.
Surely, the motives of corruption at those stratospheric levels is not the upliftment of the masses, much as such 'policies' may be portrayed to be and shown to be welfare enhancing? Should we not prioritize these instances of corruption before castigating the CVC for failure to monitor the various government agencies and bureaucrats for corrupt practices? If favors are granted by the size of the eventual payoff, then shouldn't the CVC turn its attention first to ministers and the senior policymakers who, by their policy pronouncements and regulations change the fortunes of industries? And how does one distinguish between just assignments to the deserving and sham ones meant to reward the wrong so others may follow that path? What worsens the already sordid state of affairs is that our politicians have found a way to share the spoils with all concerned – ruling party cadres, opposition party leaders, trade unions, stock market participants, the greens and the left, perhaps even the press. Who else but our politicians are capable of committing such a leap of faith – transforming a patently illegal act in to what economists term 'pareto superior' – a 'win-win' proposition for all but the true Gandhian. (And true Gandhians will always take a hit for the good of the nation!) But don't be fooled for a moment. If you are wondering whether anyone pays at all, just look around. Your child will pay dearly every time he drinks milk or switches the power on. Your grandson may be burdened at birth with mortgage loans to pay off. Your great grandchild is already sold to the devil!
'Punarjanma' anyone?
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
Many heads have pondered over it, much has been written on it, and many a shelves have been filled investigating it that you'd wonder what I have to add to the phenomenon of corruption - short of suggesting the use of electric eels on the corrupt with divine or better yet, satanic intervention! But seriously, is corruption merely the lubricant that turns the wheels of the economy or is it the proverbial spanner in the wheels of progress? From the farmer who must bribe the bank officer before he signs the loan papers, the widow who must borrow to bribe to receive her husband's death certificate that qualifies her for insurance, the anxious parent in two minds about bribing the Principal to secure his child's admission, to the impatient guy all too willing to part with a few big notes to the license officer to drive away with his new SUV, all are examples of how corruption pervades the daily life of commoners. But much as this corruption is pervasive in our society, should it really be the focus of our attention?
Is it passe to target retail corruption ignoring corruption at the higher levels of society and the economy? Retail corruption will always be. Much as we are warned not to tip public servants, some such as the postman, are so familiar that one is only too willing to share the festivities. And is money for a cup of tea to your garbage handler corruption? Even if it is, is it that pernicious to our economy? Shouldn't corruption be choked in the higher echelons of power? Corruption defined not necessarily by the money that changes hands, corruption that takes many hues unknown to the public – corruption of the ideals, suppression of the intelligent, the moral and the hardworking (and lately, the green and the left-leaning), corruption in the issue of industrial licenses and environmental permits, limits on (or perversely increases in) FDI investments, defence purchases, pollution regulations, rate regulations, minimum support prices, monetary policy, or deals that extend across generations or in to the family of the in-laws (We'll make sure your son-in-law is on the ONGC board). Corruption manifests in other more pernicious forms such as the accommodation of foreign suggestions in the budget and monetary policies (Can't let down the republicans and business houses who supported our stock markets). I suspect even the timing of mid-term elections are negotiable with 'those-who-should-not-be-named'! (Three cheers to the NAM!) If this is not subverting the popular mandate to secure private riches, I don't know what is.
Surely, the motives of corruption at those stratospheric levels is not the upliftment of the masses, much as such 'policies' may be portrayed to be and shown to be welfare enhancing? Should we not prioritize these instances of corruption before castigating the CVC for failure to monitor the various government agencies and bureaucrats for corrupt practices? If favors are granted by the size of the eventual payoff, then shouldn't the CVC turn its attention first to ministers and the senior policymakers who, by their policy pronouncements and regulations change the fortunes of industries? And how does one distinguish between just assignments to the deserving and sham ones meant to reward the wrong so others may follow that path? What worsens the already sordid state of affairs is that our politicians have found a way to share the spoils with all concerned – ruling party cadres, opposition party leaders, trade unions, stock market participants, the greens and the left, perhaps even the press. Who else but our politicians are capable of committing such a leap of faith – transforming a patently illegal act in to what economists term 'pareto superior' – a 'win-win' proposition for all but the true Gandhian. (And true Gandhians will always take a hit for the good of the nation!) But don't be fooled for a moment. If you are wondering whether anyone pays at all, just look around. Your child will pay dearly every time he drinks milk or switches the power on. Your grandson may be burdened at birth with mortgage loans to pay off. Your great grandchild is already sold to the devil!
'Punarjanma' anyone?
Sunday, January 6, 2008
Party Time at the Stock Market!
Party Time at the Stock Market!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
http://gprasadrao.blogspot.com/
A party at the stock market? Which stock? Which scrip? When? Try stocks of political parties traded on the stock exchange much like the common stock of firms? Incredulous? Why? Is it that outrageous? Political parties exist for a purpose – to serve the public in matters of politics (equity), policy, administration or governance. They have leaders, an executive board besides officials and members. They are governed by rules, traditions, and elections. Their goal, arguably the seat of power, or more appropriately, as many seats and as much power as possible, is analogous to the pursuit of profits by entrepreneurs. Clearly, our constitutional fathers presumed, much like Keynes did, that the invisible hand would ensure that the larger national cause is served even while political parties pursued their private goals. Six decades later, the answer – depending on one's political viewpoints – varies from prevarication to a resounding 'No'. If our nation has progressed so much in such a short span of time, it is despite the political parties, not because of them.
The root causes underlying this failure are quite obvious. Politics is the route to power, the power to change policies and the fortunes of various industries. Industrialists court leaders of political parties, whether ruling or in the opposition in the pursuit of industry-friendly policies. The lure of holding on to that power induces even the most astute politician/leader to give in to short-run policies of appeasement ignoring their long-run deleterious impact on the nation. Vested interests corner concentrated benefits in the immediate term even as costs are distributed broadly and imperceptibly across time and space. Politicians have perfected the art of enriching themselves with money and power while granting 'pork chops' to the industry and distributing peanuts among supporters and constituency voters. This 'please all' and 'bleed the future to enrich the present' strategy turns the nation economically and environmentally unsustainable. Nation building indeed!
Wouldn't it make matters worse if we turned our political parties in to publicly traded stocks? (I presume they are already invested in the stock markets anyway, and not in the retail section going by the PSU IPOs sanctioned!) Not if their strategies are anticipated and the system designed properly. Consider political parties – ruling and opposition - incorporated as 'holding companies' much in the fashion of Berkshire Hathaway and 'endowed' (on a matching grant basis?) with a representative basket of stocks, like the Nifty 500 Index, or better yet, a combination of 10-year futures on Nifty 500 and 30-yr bonds, in equal or some proportionate manner. The opposition parties would be endowed with either the same basket of stocks, or conceivably, another self-chosen combination of stocks and bonds more appropriate to their ideology. The stocks of these political entities would then trade on the stock market perhaps as a distinct category in itself.
Foremost, this proposal would bring about a mechanism in which investors – small, large, domestic, FIIs and pension funds – could signal their 'vote' on government policies and party positions by their purchases and sales of the stocks of political parties. Thus, political parties would find it attractive to differentiate themselves policy-wise to attract different classes of investors. Second, it'd be a convenient tool to 'legalize' and internalize the monetary benefits that a political party receives by way of its decisions and parliamentary votes in the running of the government. Third, the market 'price' would serve as a signal to party leaders to gauge their policy performance as well as investor and voter perceptions on the economy. Policies and the choice of leaders could be evaluated in the stock market (Hell, If I can speculate on coffee beans and tea leaves, I can do so with the fortunes of my country as well. Right?). Voters and investors need no longer wait years to opine on matters – a wait so long that many forget what it was all about. Under the proposed system, investors could short the stock of the political party that hoists a leader with a dubious record, delivering an immediate verdict – one that both punishes the party and prods it in to taking corrective action. Relative price movements would also reveal the change in the odds of winning at the ballot box at any particular instant – a substitute to the opinion polls that is currently in vogue. Expectations of political moves, choices, strategies and policies would be reflected in market volumes and prices.
One might argue that while recourse to the stock market provides a mechanism to internalize the long-run impact of current policies, it still does not internalize non-market affects like HDI, communal peace and environmental sustainability. A 'non-market social index' that reflects these and other parameters could be published weekly so investors take account of this information as well in making their political investment (to the extent they do not reflect in the price of long bonds). Trading the fortunes of political parties provides a means for voters and investors to judge party performance from a long-term perspective on an ongoing basis – a distinct attribute of the stock market and something that is sadly lacking in the current system driven by short-term electoral contingencies. It'd radically change the political landscape, empowering the common man, voters and indeed the international investor with a stick to use on the mortifying politics that characterizes our nation.
And a means for our parties to test waters on various issues, choices and policies. Party on!
Elections are round the corner
Next month, or is next year?
I used to have a say
(that coalition of ours was quite shaky!)
now its them -the World Bank and the G-9!
(if money talks, big money barks)
Alliances I seek, votes by the block
try groups of all kinds
unions, social, religious, sports, even online ones
It does beat door-to-door canvassing
by a mile and a half!
(Standing through the sun roof has its risks,
and I don't mean the oppressive heat!)
A leader of politics I am
Astute and aggressive
My opponents have ganged up
I must counter-attack
Shall I court leftist unions in their pocket
and trade my minorities in?
Shall I switch positions on SEZ
now that the tide is turning?
(I hear the GEF has money to invest
Yes, easements we have heard of!)
Shall I promise job reservations, subsidies,
two eggs for mid-day meals,
topped it with an iron tablet or two
That'll qualify for some gender money,
and community insurance funds will come handy
But the JNURM fund accounts?
Surely, you don't expect me to keep!
A leader of politics I am
Astute and aggressive
The digital age is upon us
It ain't that friendly no more
Tons of email to trash
Many an online column to ignore
No, not those opinion polls again
I take them but with a grain of salt
I must counter-attack,
I'll must do one better
Let's celebrate our mentor's birthday
A congregation blocking traffic, blaring music?
Yes, the perfect backdrop for my plans
Have the industrialist approach me
I just might gladden him during my speech
with a populist policy or two!
A leader of politics I am
Astute and aggressive!
Silver screen heroes,
Come, try your hand at politics
In these days of multiple degrees
earn your political halos too!
(Instant mass recognition
who else can boast of?)
My ideals you will embody
my memory will you cherish
my followers you will keep
(your fans are welcome too)
A leader of politics I am
Astute, aggressive
(and now ready to retire!)
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
http://gprasadrao.blogspot.com/
A party at the stock market? Which stock? Which scrip? When? Try stocks of political parties traded on the stock exchange much like the common stock of firms? Incredulous? Why? Is it that outrageous? Political parties exist for a purpose – to serve the public in matters of politics (equity), policy, administration or governance. They have leaders, an executive board besides officials and members. They are governed by rules, traditions, and elections. Their goal, arguably the seat of power, or more appropriately, as many seats and as much power as possible, is analogous to the pursuit of profits by entrepreneurs. Clearly, our constitutional fathers presumed, much like Keynes did, that the invisible hand would ensure that the larger national cause is served even while political parties pursued their private goals. Six decades later, the answer – depending on one's political viewpoints – varies from prevarication to a resounding 'No'. If our nation has progressed so much in such a short span of time, it is despite the political parties, not because of them.
The root causes underlying this failure are quite obvious. Politics is the route to power, the power to change policies and the fortunes of various industries. Industrialists court leaders of political parties, whether ruling or in the opposition in the pursuit of industry-friendly policies. The lure of holding on to that power induces even the most astute politician/leader to give in to short-run policies of appeasement ignoring their long-run deleterious impact on the nation. Vested interests corner concentrated benefits in the immediate term even as costs are distributed broadly and imperceptibly across time and space. Politicians have perfected the art of enriching themselves with money and power while granting 'pork chops' to the industry and distributing peanuts among supporters and constituency voters. This 'please all' and 'bleed the future to enrich the present' strategy turns the nation economically and environmentally unsustainable. Nation building indeed!
Wouldn't it make matters worse if we turned our political parties in to publicly traded stocks? (I presume they are already invested in the stock markets anyway, and not in the retail section going by the PSU IPOs sanctioned!) Not if their strategies are anticipated and the system designed properly. Consider political parties – ruling and opposition - incorporated as 'holding companies' much in the fashion of Berkshire Hathaway and 'endowed' (on a matching grant basis?) with a representative basket of stocks, like the Nifty 500 Index, or better yet, a combination of 10-year futures on Nifty 500 and 30-yr bonds, in equal or some proportionate manner. The opposition parties would be endowed with either the same basket of stocks, or conceivably, another self-chosen combination of stocks and bonds more appropriate to their ideology. The stocks of these political entities would then trade on the stock market perhaps as a distinct category in itself.
Foremost, this proposal would bring about a mechanism in which investors – small, large, domestic, FIIs and pension funds – could signal their 'vote' on government policies and party positions by their purchases and sales of the stocks of political parties. Thus, political parties would find it attractive to differentiate themselves policy-wise to attract different classes of investors. Second, it'd be a convenient tool to 'legalize' and internalize the monetary benefits that a political party receives by way of its decisions and parliamentary votes in the running of the government. Third, the market 'price' would serve as a signal to party leaders to gauge their policy performance as well as investor and voter perceptions on the economy. Policies and the choice of leaders could be evaluated in the stock market (Hell, If I can speculate on coffee beans and tea leaves, I can do so with the fortunes of my country as well. Right?). Voters and investors need no longer wait years to opine on matters – a wait so long that many forget what it was all about. Under the proposed system, investors could short the stock of the political party that hoists a leader with a dubious record, delivering an immediate verdict – one that both punishes the party and prods it in to taking corrective action. Relative price movements would also reveal the change in the odds of winning at the ballot box at any particular instant – a substitute to the opinion polls that is currently in vogue. Expectations of political moves, choices, strategies and policies would be reflected in market volumes and prices.
One might argue that while recourse to the stock market provides a mechanism to internalize the long-run impact of current policies, it still does not internalize non-market affects like HDI, communal peace and environmental sustainability. A 'non-market social index' that reflects these and other parameters could be published weekly so investors take account of this information as well in making their political investment (to the extent they do not reflect in the price of long bonds). Trading the fortunes of political parties provides a means for voters and investors to judge party performance from a long-term perspective on an ongoing basis – a distinct attribute of the stock market and something that is sadly lacking in the current system driven by short-term electoral contingencies. It'd radically change the political landscape, empowering the common man, voters and indeed the international investor with a stick to use on the mortifying politics that characterizes our nation.
And a means for our parties to test waters on various issues, choices and policies. Party on!
Elections are round the corner
Next month, or is next year?
I used to have a say
(that coalition of ours was quite shaky!)
now its them -the World Bank and the G-9!
(if money talks, big money barks)
Alliances I seek, votes by the block
try groups of all kinds
unions, social, religious, sports, even online ones
It does beat door-to-door canvassing
by a mile and a half!
(Standing through the sun roof has its risks,
and I don't mean the oppressive heat!)
A leader of politics I am
Astute and aggressive
My opponents have ganged up
I must counter-attack
Shall I court leftist unions in their pocket
and trade my minorities in?
Shall I switch positions on SEZ
now that the tide is turning?
(I hear the GEF has money to invest
Yes, easements we have heard of!)
Shall I promise job reservations, subsidies,
two eggs for mid-day meals,
topped it with an iron tablet or two
That'll qualify for some gender money,
and community insurance funds will come handy
But the JNURM fund accounts?
Surely, you don't expect me to keep!
A leader of politics I am
Astute and aggressive
The digital age is upon us
It ain't that friendly no more
Tons of email to trash
Many an online column to ignore
No, not those opinion polls again
I take them but with a grain of salt
I must counter-attack,
I'll must do one better
Let's celebrate our mentor's birthday
A congregation blocking traffic, blaring music?
Yes, the perfect backdrop for my plans
Have the industrialist approach me
I just might gladden him during my speech
with a populist policy or two!
A leader of politics I am
Astute and aggressive!
Silver screen heroes,
Come, try your hand at politics
In these days of multiple degrees
earn your political halos too!
(Instant mass recognition
who else can boast of?)
My ideals you will embody
my memory will you cherish
my followers you will keep
(your fans are welcome too)
A leader of politics I am
Astute, aggressive
(and now ready to retire!)
Friday, December 28, 2007
Environmental Progress thru Competition!
Environmental Progress thru Competition!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
Lok Sabha TV is a pleasant surprise. Yeah, they telecast some sessions of the Lower House, but it is far more than a peek in to the hell-house that we elect our representatives in to. And I don't just mean the cultural presentations. Late night this week, I happened to switch in to the Principal Advisor of the Planning Commission, Suresh Sethi, discussing energy policy matters on the channel. For once, I did not switch to the F channel. Believe me, my right hand almost twitched!
Much of what he said was, for want of a better word, relevant, and though I did not see his way at many points along his talk, one sentence caught my attention. Mr Sethi said, and I quote (though not verbatim) “Competition (among producers) will enhance the environmental performance of our industry”. Well, I fervently hope so. Because my training in micro-economics and energy economics suggests an entirely different outcome. So different that I thought it would be a great to elucidate my suspicions in my blog.
An industry's environmental performance is typically measured in the three media – air, water and land - and in indoor and outdoor spheres. Outdoor pollution is regulated by various state and central pollution control authorities while indoor exposure, to the best of my knowledge, is covered under occupational exposure and hazards regulations. Competition needs no definition. It pits the fortunes of one firm against another within an industry, sometimes across political boundaries. The virtues of competition are familiar. Competition among producers stimulates the incentive to innovate and lower costs as a means to undercut competitors. Larger market share translates to larger profits, (and for those executives with stock options, higher stock prices). By the same token, competition is, at least superficially, friendly to consumers who benefit from lower prices and choice. All hunky dory. Right?
Wrong! Competition is also a fight for survival (though, I suspect our bureaucrats and regulators will never permit annihilation of any firm of any significant size). The fight for survival engenders various competitive and anti-competitive strategies - from advertisements, product differentiation by branding, positioning in niche markets, pricing wars, to monopolistic and switching regimes strategies and more. It may be that competition in service industries begets practices that are considered internationally acceptable, thus enabling domestic firms to reach out to the international client̬le for their business. But competition in basic industries is not the same as competition in the IT industry. Consider the iron and steel industry. It is entirely raw-material intensive. From applying for environmental clearance, environmentally sustainable mining, transportation, to benefication, refining and pollution control Рevery step is resource-intensive. In other words, it costs money. Money reflected in the bottom-line of the quarterly report submitted to SEBI that drives many an investor frenzy. Despite the scale of production, pollution control costs are a significant fraction of total variable cost. Introduce competition in these industries and what happens is that the firm at once seeks to further lower its cost of production (wary as it is of its competitor's richer ores or closer mines). It seeks lower-priced raw material inputs, higher labor productivity, ...., and to cut corners environmentally. If its hands are tied with regard to iron ore and coal supply (gotta apply for fresh licenses and 'linkages' from the Steel and Mines Ministry), and the labor union leader has a permanent scowl on his face (who could those guys on motorbikes waiting outside the factory gate be?), then can one be sure that all pollution control procedures were followed? (Why, the workman assigned to that task took paternity leave!) When the going gets tough in the market, the squeeze is inevitably on activities that do not add to the bottom line of the firm. Is it then any wonder that firms under competitive pressures are hard-put to abide by the resource-draining environmental obligations? I half-suspect environment regulators and the commerce ministry officials are all-to-ready to look the other way if the firm's management is smart enough to suggest production cut-backs or 'labor-shedding'. And the Competition Committee would not look kindly about plant closures either! (And need I say anything about where the bull-runners stand?)
Pray what chance the environment has under these extremely 'competitive' times?
Come my friend, compete with me
Times are tough, input prices rising
The unions seek more, always
Where else do we cut corners
but of course environmentally
(The Minister did attend our luncheon
And did we not pay in to the Rehabilitation Fund?)
Times are tough, the market's rising
Oh no!, our shorts have failed
Who'd have anticipated
a government so friendly overnight!
Not a pie have we to spare
Where are the margins to justify
pollution treatment beyond the cursory?
Yes, our waste-water is clarified
(it sort of pooled up in the ditch)
Besides, the village well is more polluted!
(Hydrologist? No, we have none!)
Be ever my competitor,
but do complain 'bout competition
Yes, it is the bane of this industry
Compete, lest the consumers complain
Compete, lest they break me up!
(Standard Oil? Sounds familiar!)
Compete, so the Competition Committee may survive
(We need them too, you do understand?)
Times are tough, do me a favor
Compete with me, won't you my friend?
I'll return the favor and compete with you,
all of next year, infact for ever!
Let's compete and aid the Planning Commission in nation-building
Let's compete to realise their version of environmental utopia!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
Lok Sabha TV is a pleasant surprise. Yeah, they telecast some sessions of the Lower House, but it is far more than a peek in to the hell-house that we elect our representatives in to. And I don't just mean the cultural presentations. Late night this week, I happened to switch in to the Principal Advisor of the Planning Commission, Suresh Sethi, discussing energy policy matters on the channel. For once, I did not switch to the F channel. Believe me, my right hand almost twitched!
Much of what he said was, for want of a better word, relevant, and though I did not see his way at many points along his talk, one sentence caught my attention. Mr Sethi said, and I quote (though not verbatim) “Competition (among producers) will enhance the environmental performance of our industry”. Well, I fervently hope so. Because my training in micro-economics and energy economics suggests an entirely different outcome. So different that I thought it would be a great to elucidate my suspicions in my blog.
An industry's environmental performance is typically measured in the three media – air, water and land - and in indoor and outdoor spheres. Outdoor pollution is regulated by various state and central pollution control authorities while indoor exposure, to the best of my knowledge, is covered under occupational exposure and hazards regulations. Competition needs no definition. It pits the fortunes of one firm against another within an industry, sometimes across political boundaries. The virtues of competition are familiar. Competition among producers stimulates the incentive to innovate and lower costs as a means to undercut competitors. Larger market share translates to larger profits, (and for those executives with stock options, higher stock prices). By the same token, competition is, at least superficially, friendly to consumers who benefit from lower prices and choice. All hunky dory. Right?
Wrong! Competition is also a fight for survival (though, I suspect our bureaucrats and regulators will never permit annihilation of any firm of any significant size). The fight for survival engenders various competitive and anti-competitive strategies - from advertisements, product differentiation by branding, positioning in niche markets, pricing wars, to monopolistic and switching regimes strategies and more. It may be that competition in service industries begets practices that are considered internationally acceptable, thus enabling domestic firms to reach out to the international client̬le for their business. But competition in basic industries is not the same as competition in the IT industry. Consider the iron and steel industry. It is entirely raw-material intensive. From applying for environmental clearance, environmentally sustainable mining, transportation, to benefication, refining and pollution control Рevery step is resource-intensive. In other words, it costs money. Money reflected in the bottom-line of the quarterly report submitted to SEBI that drives many an investor frenzy. Despite the scale of production, pollution control costs are a significant fraction of total variable cost. Introduce competition in these industries and what happens is that the firm at once seeks to further lower its cost of production (wary as it is of its competitor's richer ores or closer mines). It seeks lower-priced raw material inputs, higher labor productivity, ...., and to cut corners environmentally. If its hands are tied with regard to iron ore and coal supply (gotta apply for fresh licenses and 'linkages' from the Steel and Mines Ministry), and the labor union leader has a permanent scowl on his face (who could those guys on motorbikes waiting outside the factory gate be?), then can one be sure that all pollution control procedures were followed? (Why, the workman assigned to that task took paternity leave!) When the going gets tough in the market, the squeeze is inevitably on activities that do not add to the bottom line of the firm. Is it then any wonder that firms under competitive pressures are hard-put to abide by the resource-draining environmental obligations? I half-suspect environment regulators and the commerce ministry officials are all-to-ready to look the other way if the firm's management is smart enough to suggest production cut-backs or 'labor-shedding'. And the Competition Committee would not look kindly about plant closures either! (And need I say anything about where the bull-runners stand?)
Pray what chance the environment has under these extremely 'competitive' times?
Come my friend, compete with me
Times are tough, input prices rising
The unions seek more, always
Where else do we cut corners
but of course environmentally
(The Minister did attend our luncheon
And did we not pay in to the Rehabilitation Fund?)
Times are tough, the market's rising
Oh no!, our shorts have failed
Who'd have anticipated
a government so friendly overnight!
Not a pie have we to spare
Where are the margins to justify
pollution treatment beyond the cursory?
Yes, our waste-water is clarified
(it sort of pooled up in the ditch)
Besides, the village well is more polluted!
(Hydrologist? No, we have none!)
Be ever my competitor,
but do complain 'bout competition
Yes, it is the bane of this industry
Compete, lest the consumers complain
Compete, lest they break me up!
(Standard Oil? Sounds familiar!)
Compete, so the Competition Committee may survive
(We need them too, you do understand?)
Times are tough, do me a favor
Compete with me, won't you my friend?
I'll return the favor and compete with you,
all of next year, infact for ever!
Let's compete and aid the Planning Commission in nation-building
Let's compete to realise their version of environmental utopia!
Thursday, December 20, 2007
Zip, Zap, Suuueee me!
Zip, Zap, Suuuuee me!
Ganga Prasad G. Rao
http://myprofile.cos.com
Euro vehicle pollution standards and lead-free gasoline are so much in the news that one can't be faulted to presume the air is getting cleaner around us. But wait before you breathe too deeply! Would you care to walk out of your thickly curtained air-conditioned bungalow? At around 8:30-9 am on a cold morning to be precise. That's when the neighbor revs up his two-stroke scooter releasing a white plume. Now who would protest refreshing some benzene and carbon-monoxide to accompany your cuppa chai?! Join me as we find our way to work through the potholes and the braving the death-defying motoring strategies of the two- and three-wheelers. What's that smell? It can't be....thankfully, it isn't. It's only the foul smell from the rickety diesel-guzzling lorry in front of you. Defying all laws of physics, it seems to exist merely to spout soot and other toxics in to your lungs. Pardon me, how is diesel subsidized? By the age of the vehicle and the inefficiency of its engine? I zip past it only to find the light changing at the intersection. At this distance in the turning lane, it will be the third cycle before I get through. Just as I notice how environmentally competitive our sedans have turned over the years, I notice the phat phatees, those hybrids that seem like scaled-up autos or ultra-mini vans. These were endemic to North India. How and why they migrated to the South is a mystery, perhaps even a conspiracy. So clean in their first few months of introduction, I was half-deceived in to endorsing them. After all, they did take the pressure off the public buses. As time wore by, some of them have turned true rivals of their more polluting cousins on the road. Very likely, vehicle inspection is many months away; besides, all it takes is a tweak of the valve and a few notes in the hands of the middle-man.
Ahh, there's the free stretch of road. Shall I turn the window down for some fresh air? Let me, just a .....What's tha...? Black smoke in my face. Where did that come from? Oh, an SUV. Those macho, muscular 4x4s that were designed for pure pleasure .... to the owner. Why care for those pedestrians in the rear view mirror, black-faced, and gassed out as they are likely to be! And why is the bus overtaking me? Did I say the lorries were dirty? My God, that was nothing, compared to these buses. Rivaling the lorries in age and crowded with subsidized passengers beyond all human limits, these paleolithic buses fulfill their environmental duty unswervingly, everyday – distributing sooty exhaust throughout the urban limits and even into suburbs (Gotta hang on to the bus for dear life and breathe smoke and dust to qualify for HRA at Class I city rate!). With extended hours, they ensure that even the early morning walker is not spared his fresh breath of air! Lorries, buses, phat-phatees and SUVs. Does that cover the whole ambit of polluting vehicles? You didn't forget vans did you? So convenient, and yet, so polluting. The very van that picks and drops your child to and from school also pollutes the road, even your living room. That's the irony of India. To obtain convenience, one must sacrifice health. In the long run, it may not even qualify as a zero sum game!
Come January, new rules are likely to be enforced and the existing ones applied to more cities and towns. Does that herald cleaner air? Despite the government's claims, No. Very likely, the increase in emissions from the entry of new vehicles (Remember, the UTI Auto fund must make money?) will swamp any reduction in emissions from the existing fleet. More vehicles on the road also means more congestion and more time idling at the intersection. That should reduce emissions some. Not! As for the vans, as much I might hate its exhaust, the fact that they are safer than three-wheeled autorickshaws, only portends to their more widespread use, both in the urbs and suburbs. And with many of us 'upgrading' to, or adding an SUV to declare our income to Aayakar Bhavan, the air isn't going to get cleaner, any time soon, claims to the contrary notwithstanding. So, if you are one of those old-timers waiting for fresh cool summer breeze or a cold blast of fresh wintery air for your walk, I have news for you.
Don't wait for packaged Alaskan air!
To pollute is my birth right
To protest not yours
Be a patriot, look away and ignore,
any transgressions of the commons
Remember, a developing nation are we,
can't put on the airs of the developed
We must lay to waste this air, water and land
to reduce cost this generation
(Why, the lung is a regenerable organ!)
so we may make money cleaning up in the next (or the one after)
Those are the lessons of Indian capitalism,
learn it, forgive it, live it!
(psst: Tried Johny Walker with Kurkure? Kya majha aata hai bhai!)
Ganga Prasad G. Rao
http://myprofile.cos.com
Euro vehicle pollution standards and lead-free gasoline are so much in the news that one can't be faulted to presume the air is getting cleaner around us. But wait before you breathe too deeply! Would you care to walk out of your thickly curtained air-conditioned bungalow? At around 8:30-9 am on a cold morning to be precise. That's when the neighbor revs up his two-stroke scooter releasing a white plume. Now who would protest refreshing some benzene and carbon-monoxide to accompany your cuppa chai?! Join me as we find our way to work through the potholes and the braving the death-defying motoring strategies of the two- and three-wheelers. What's that smell? It can't be....thankfully, it isn't. It's only the foul smell from the rickety diesel-guzzling lorry in front of you. Defying all laws of physics, it seems to exist merely to spout soot and other toxics in to your lungs. Pardon me, how is diesel subsidized? By the age of the vehicle and the inefficiency of its engine? I zip past it only to find the light changing at the intersection. At this distance in the turning lane, it will be the third cycle before I get through. Just as I notice how environmentally competitive our sedans have turned over the years, I notice the phat phatees, those hybrids that seem like scaled-up autos or ultra-mini vans. These were endemic to North India. How and why they migrated to the South is a mystery, perhaps even a conspiracy. So clean in their first few months of introduction, I was half-deceived in to endorsing them. After all, they did take the pressure off the public buses. As time wore by, some of them have turned true rivals of their more polluting cousins on the road. Very likely, vehicle inspection is many months away; besides, all it takes is a tweak of the valve and a few notes in the hands of the middle-man.
Ahh, there's the free stretch of road. Shall I turn the window down for some fresh air? Let me, just a .....What's tha...? Black smoke in my face. Where did that come from? Oh, an SUV. Those macho, muscular 4x4s that were designed for pure pleasure .... to the owner. Why care for those pedestrians in the rear view mirror, black-faced, and gassed out as they are likely to be! And why is the bus overtaking me? Did I say the lorries were dirty? My God, that was nothing, compared to these buses. Rivaling the lorries in age and crowded with subsidized passengers beyond all human limits, these paleolithic buses fulfill their environmental duty unswervingly, everyday – distributing sooty exhaust throughout the urban limits and even into suburbs (Gotta hang on to the bus for dear life and breathe smoke and dust to qualify for HRA at Class I city rate!). With extended hours, they ensure that even the early morning walker is not spared his fresh breath of air! Lorries, buses, phat-phatees and SUVs. Does that cover the whole ambit of polluting vehicles? You didn't forget vans did you? So convenient, and yet, so polluting. The very van that picks and drops your child to and from school also pollutes the road, even your living room. That's the irony of India. To obtain convenience, one must sacrifice health. In the long run, it may not even qualify as a zero sum game!
Come January, new rules are likely to be enforced and the existing ones applied to more cities and towns. Does that herald cleaner air? Despite the government's claims, No. Very likely, the increase in emissions from the entry of new vehicles (Remember, the UTI Auto fund must make money?) will swamp any reduction in emissions from the existing fleet. More vehicles on the road also means more congestion and more time idling at the intersection. That should reduce emissions some. Not! As for the vans, as much I might hate its exhaust, the fact that they are safer than three-wheeled autorickshaws, only portends to their more widespread use, both in the urbs and suburbs. And with many of us 'upgrading' to, or adding an SUV to declare our income to Aayakar Bhavan, the air isn't going to get cleaner, any time soon, claims to the contrary notwithstanding. So, if you are one of those old-timers waiting for fresh cool summer breeze or a cold blast of fresh wintery air for your walk, I have news for you.
Don't wait for packaged Alaskan air!
To pollute is my birth right
To protest not yours
Be a patriot, look away and ignore,
any transgressions of the commons
Remember, a developing nation are we,
can't put on the airs of the developed
We must lay to waste this air, water and land
to reduce cost this generation
(Why, the lung is a regenerable organ!)
so we may make money cleaning up in the next (or the one after)
Those are the lessons of Indian capitalism,
learn it, forgive it, live it!
(psst: Tried Johny Walker with Kurkure? Kya majha aata hai bhai!)
Holy Smokes!
Holy Smokes!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
We Chennaites, conservatives and 'traditionalists' to the bone, may have adapted to rap tamil songs to accompany the annual Carnatic music festival, but when it comes to January, reading The Hindu while the cup of decoction coffee is still piping hot is still the 'in thing'. And January brings with it, besides the shrill religious music that interrupts many a tender moments, another traditional festival, Bhogi, the precursor to Pongal, the harvest festival. My ardent love for religion and Hinduism is quite well known. For the same reason, I generally stay clear of religious matters. But this one deserves attention. Over the years, the growing wealth among Indian families has been ostentatiously displayed in many ways including, unfortunately, overt displays of fireworks and the like. Come festival time - and the trend is to celebrate any and all festivals, election victories, five day match victory, ODI victory, Ganguly sixers and Kumble lbws - we are inundated by a mad cacophony of sound and light that serves no purpose than boost the ego of those lighting it. Why I even suspect an informal 'mafia ring' that goes around the localities handing out its 'evaluation' of whether households have spent enough on festival purchases. The more sound and light, and the more firecracker waste strewn around on the streets, the higher you are on their informal ladder of respect (and safety?) !
And whatever festival garbage remains on the streets despite the best efforts of the Corporation (Hey, we are entitled to our lighter moments!), is fuel for the traditional Bhogi fire. Diwali waste, garden waste, sweet boxes, styrofoam packings, plastic wrappings, you name it, the Bhogi fire consumes all. The 'holy smoke' from garbage burning mingles with the fog on the windless Bhogi morning made ever more dreary by the occluded sun to create something uniquely south-indian, the infamous 'Bhogi smog'. How divinely dangerous (and not just to the planes flying with reduced visibility)! Just when you thought your soot and cold-start benzene-exposed lungs could not be damaged more, what have you but the most toxic mix of pollutants in the air to herald the new year. (I guess, it's an early hurdle test. If one is to die from lung disease later in the year, he might as well die before the good times of harvest!).
Time was when nobody noticed but the asthmatics, the environmentalists, and of course, the garbage collectors. Today, environmentalists, meteorologists and pollution experts are ready with satellite readings and GIS software to monitor the direction of the dioxin plume. (I believe there is a way, at least informally, to exploit these trans-boundary transgressions monetarily. I fervently hope that it turns formal and hurts palpably) One also hopes, with so many TV channels, FM and AM stations around blaring public service messages, and the free TVs that were distributed with great fanfare, that the message pervades to all parts of the society, especially down to those elements who light fires with gay abandon. But then, what are the chances they 'd listen? So what does that leave us with? Another, 'I-told-you-so' fiasco? If you ask me, I'd have the mayor fund an annual campaign that doubles or triples the price of (unrecyclable) plastic (and other toxic) waste at recycle marts between Diwali and Bhogi. That would entice the waste-mongers to scrounge for plastic on streets and turn them in for their meal. And we might save a life or two, a few cancers and innumerable visits to the emergency room by asthmatics. You don't suppose the health and life insurance firms want to pitch in???
Shall we burn our waste early
and claim to avoid the Bhogi smog?
Shall we source segregate it
so urchins may light 'plastic only' fires?
Shall we hoard plastic for Bhogi day
knowing it'd fetch a price so high?
Shall we instead walk away
turning the proverbial blind eye?
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
We Chennaites, conservatives and 'traditionalists' to the bone, may have adapted to rap tamil songs to accompany the annual Carnatic music festival, but when it comes to January, reading The Hindu while the cup of decoction coffee is still piping hot is still the 'in thing'. And January brings with it, besides the shrill religious music that interrupts many a tender moments, another traditional festival, Bhogi, the precursor to Pongal, the harvest festival. My ardent love for religion and Hinduism is quite well known. For the same reason, I generally stay clear of religious matters. But this one deserves attention. Over the years, the growing wealth among Indian families has been ostentatiously displayed in many ways including, unfortunately, overt displays of fireworks and the like. Come festival time - and the trend is to celebrate any and all festivals, election victories, five day match victory, ODI victory, Ganguly sixers and Kumble lbws - we are inundated by a mad cacophony of sound and light that serves no purpose than boost the ego of those lighting it. Why I even suspect an informal 'mafia ring' that goes around the localities handing out its 'evaluation' of whether households have spent enough on festival purchases. The more sound and light, and the more firecracker waste strewn around on the streets, the higher you are on their informal ladder of respect (and safety?) !
And whatever festival garbage remains on the streets despite the best efforts of the Corporation (Hey, we are entitled to our lighter moments!), is fuel for the traditional Bhogi fire. Diwali waste, garden waste, sweet boxes, styrofoam packings, plastic wrappings, you name it, the Bhogi fire consumes all. The 'holy smoke' from garbage burning mingles with the fog on the windless Bhogi morning made ever more dreary by the occluded sun to create something uniquely south-indian, the infamous 'Bhogi smog'. How divinely dangerous (and not just to the planes flying with reduced visibility)! Just when you thought your soot and cold-start benzene-exposed lungs could not be damaged more, what have you but the most toxic mix of pollutants in the air to herald the new year. (I guess, it's an early hurdle test. If one is to die from lung disease later in the year, he might as well die before the good times of harvest!).
Time was when nobody noticed but the asthmatics, the environmentalists, and of course, the garbage collectors. Today, environmentalists, meteorologists and pollution experts are ready with satellite readings and GIS software to monitor the direction of the dioxin plume. (I believe there is a way, at least informally, to exploit these trans-boundary transgressions monetarily. I fervently hope that it turns formal and hurts palpably) One also hopes, with so many TV channels, FM and AM stations around blaring public service messages, and the free TVs that were distributed with great fanfare, that the message pervades to all parts of the society, especially down to those elements who light fires with gay abandon. But then, what are the chances they 'd listen? So what does that leave us with? Another, 'I-told-you-so' fiasco? If you ask me, I'd have the mayor fund an annual campaign that doubles or triples the price of (unrecyclable) plastic (and other toxic) waste at recycle marts between Diwali and Bhogi. That would entice the waste-mongers to scrounge for plastic on streets and turn them in for their meal. And we might save a life or two, a few cancers and innumerable visits to the emergency room by asthmatics. You don't suppose the health and life insurance firms want to pitch in???
Shall we burn our waste early
and claim to avoid the Bhogi smog?
Shall we source segregate it
so urchins may light 'plastic only' fires?
Shall we hoard plastic for Bhogi day
knowing it'd fetch a price so high?
Shall we instead walk away
turning the proverbial blind eye?
Tuesday, December 4, 2007
Nuclear Devastation via Coal Power?
Nuclear Devastation via Coal Power?
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
If you are an avid reader then perhaps you have noticed how certain articles are 'friendlier' than others, and not merely because they are well-written. I happened to come across one such undated piece on the internet. Authored by Alex Gabbard of the ORNL, it reveals how coal-fired power plants emit many times, repeat, many times more nuclear irradiating particles than nuclear plants. (I forwarded it to the MoEF). And we thought nuclear plants had monopoly rights on human irradiation!
Surprising, yes, but is it a cause for concern? Consider this. In an age of global warming, half the world is unabashedly moving toward coal. India and China have turned coal in to a religion of the 'modern' day industrial revolution. China, as we hear, is adding a coal-fired power plant every week. And, going by the news in business papers, India is no laggard. (Any wonder coal beats other fuels by a mile when power plant are awarded on the basis of bidding 'levelized' tariffs – indexed to fuel price inflation??). With government-sponsored rural electrification, free or almost free power for agricultural pumpsets, subsidized power for residential consumers, unabated population growth and a booming economy, power demand is exploding through the roof. (Don't believe me? Look at the returns in Reliance Diversified Power Mutual Fund). What this means for global CO2 emissions and climate change is the subject of many articles, documents and reports. But, what does that imply for radiation exposure? For now, let's take a giant 'leap of faith' (believe in the divinity of God's followers!) and presume that we manage to stabilize CO2 emissions, if necessary by cooking up afforestation numbers and sequestering carbon. Coal-fired plants will then expand their share of power generation. As we move to coal of incrementally lower quality, radioactive ash emissions will further increase. Will Gibbard's radiation emission numbers stand up? Are they too conservative? Do we risk overshooting his estimates in search of a 'higher growth trajectory'. Does it even matter? Hey, what's a little irradiation for an extra scoop of ice-cream in the stock market?!!!!
On a tangent, we may yet save the polar ice and the disputed island with Bangladesh, but at what cost? Does it matter to the raccoons whether they were killed by warmer temperatures or bulldozers laying landing strips on their humble habitat? Does it matter to the whale whether its low sperm count was caused by warmer temperatures or 'non-toxic water-based/acrylic paint'? Are asthmatics any better off in a cooler world with lower humidity while breathing benzene from high-octane gas emitted by vehicles in the 'start and 'idle revving' cycle by the nasty neighbor? And, would you prefer power plant irradiation while preserving our abundant thorium deposits for a post-scorched earth world? I don't know about you, but I like 'subzi' made from fresh vegetables before they turn stale in the fridge and are cast to the bins!
Choices, conscious and unconscious
Private choices, choices for the family
Choices for today, and those for the 'morrow
Choices this generation, choices for decades and centuries beyond
Choices for humanity, choices for pets, animals and plants
Choices for this earthly life, choices beyond
Choices, choices and Hobson's choices!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
If you are an avid reader then perhaps you have noticed how certain articles are 'friendlier' than others, and not merely because they are well-written. I happened to come across one such undated piece on the internet. Authored by Alex Gabbard of the ORNL, it reveals how coal-fired power plants emit many times, repeat, many times more nuclear irradiating particles than nuclear plants. (I forwarded it to the MoEF). And we thought nuclear plants had monopoly rights on human irradiation!
Surprising, yes, but is it a cause for concern? Consider this. In an age of global warming, half the world is unabashedly moving toward coal. India and China have turned coal in to a religion of the 'modern' day industrial revolution. China, as we hear, is adding a coal-fired power plant every week. And, going by the news in business papers, India is no laggard. (Any wonder coal beats other fuels by a mile when power plant are awarded on the basis of bidding 'levelized' tariffs – indexed to fuel price inflation??). With government-sponsored rural electrification, free or almost free power for agricultural pumpsets, subsidized power for residential consumers, unabated population growth and a booming economy, power demand is exploding through the roof. (Don't believe me? Look at the returns in Reliance Diversified Power Mutual Fund). What this means for global CO2 emissions and climate change is the subject of many articles, documents and reports. But, what does that imply for radiation exposure? For now, let's take a giant 'leap of faith' (believe in the divinity of God's followers!) and presume that we manage to stabilize CO2 emissions, if necessary by cooking up afforestation numbers and sequestering carbon. Coal-fired plants will then expand their share of power generation. As we move to coal of incrementally lower quality, radioactive ash emissions will further increase. Will Gibbard's radiation emission numbers stand up? Are they too conservative? Do we risk overshooting his estimates in search of a 'higher growth trajectory'. Does it even matter? Hey, what's a little irradiation for an extra scoop of ice-cream in the stock market?!!!!
On a tangent, we may yet save the polar ice and the disputed island with Bangladesh, but at what cost? Does it matter to the raccoons whether they were killed by warmer temperatures or bulldozers laying landing strips on their humble habitat? Does it matter to the whale whether its low sperm count was caused by warmer temperatures or 'non-toxic water-based/acrylic paint'? Are asthmatics any better off in a cooler world with lower humidity while breathing benzene from high-octane gas emitted by vehicles in the 'start and 'idle revving' cycle by the nasty neighbor? And, would you prefer power plant irradiation while preserving our abundant thorium deposits for a post-scorched earth world? I don't know about you, but I like 'subzi' made from fresh vegetables before they turn stale in the fridge and are cast to the bins!
Choices, conscious and unconscious
Private choices, choices for the family
Choices for today, and those for the 'morrow
Choices this generation, choices for decades and centuries beyond
Choices for humanity, choices for pets, animals and plants
Choices for this earthly life, choices beyond
Choices, choices and Hobson's choices!
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