Thursday, July 27, 2006

Jet Airways

My brother insists my experience on Jet Airways was atypical, and the crowds that swell India's airports mean that even a labor-ready country like India has started to incentivize electronic check-in with free frequent-flyer miles and the like. Just how much has travel increased? In 1996, there was one flight a day between Chennai and Bangalore (two cities about a half-hour flight apart) and one train line, both operated at some loss by the federal government. Today, there are no less than 31 flights, 4-5 train lines, countless sleeper and nonsleeper buses, almost all by private operators, and yet it's virtually impossible to get a ticket on any of these modes of transport on short-notice.

Even the flight attendants on my Jet Airways flight reflected a change from the India of past. They were attractive women dressed in skirts rather than the traditional garb of a sari, although at least one of them seemed not to appreciate her natural aesthetics, donning enough makeup to serve as an endorsement for a budding rouge maker.

The meal ... yes, Indian air operators still offer more than peanuts ... was delicious, leaving me tempted to ask if I could buy another serving, and was served on china and with silverware - a welcome fact for a food-loving tree-hugger like myself.

The Nation's Capitol

'Home Sweet Home' is a special series on my visit back home to India after 3 years, hoping to document not just macroscopic changes in the world's populous democracy, but my own emotions on being back.

There were claps all around. As the acceleration kicked in our solar plexus, we were all glad to be off the ground. It had been a long 4.5 hours, sitting on the tarmac at Newark International, as rains had prevented us from taking off. Especially rough when you are at the start of a 14-hour flight to Delhi. Some time earlier, we were told that if we didn't make it by 53 minutes past midnight, we would have to call the whole venture off. As the deadline loomed, many of us were praying hard ... a cancellation would have been disastrous for me, with another local flight to catch in India. The takeoff was hence all the more exhilarating! Later, I managed to have a great chat with the head steward of the flight, talking about procedures and donut holes - no, not the food, but the fact that pilots are required by federal law to retire at 60, but can't claim pension benefits till 65! Turns out if we had returned to the gate under inclement weather, federal law would have required a new crew, which could have delayed departure even further. Hmm, a reminder that sometimes things aren't as simple as they seem ... I wish one of those serial complainers ("why can't they just return to the gate and reboard when they are ready to leave") could have heard!

I got into Delhi well past midnight, and was rather excited to catch up with an aunt of mine. She works for a large publishing company and represents an interesting generation of worker caught between a traditional and a new aggressive paradigm. The new model, inspired by the new breed of MBAs, seek short-term explosive growth, often at the expense of a core business of some heritage value, and a lot of social values. What is the purpose of a business, and what are its social commitments? This is an interesting question even in mature economies like the US, but especially in a nascent economy like India where you cannot depend on governments alone to address the problems that plague the country.

The next morning, I headed to Delhi's domestic airport, only to be shocked by the plethora of airlines operating. When I left India for the US, a private competitor had just come on to take on the federally run monolith, Indian Airlines. Now several private players controlled the market, and the effect was obvious. I waited for checking-in less than 10 min (something even operators in the US can't manage) and boarding was a breeze. I waited to board in a hall more reminiscent of a Greyhound bus stop than a plush airport (although a lot cleaner and with none of the seedy characters that dominate the landscape of the bus terminus in the US). The waiting room of the airport is an interesting place to watch people, and I think I got some perspective on Indian life, but none more interesting than that from a kid!

This kid was playing on the ground and periodically engaging strangers including yours truly. If this had been in the US, the mother would have freaked out and held on to the child tight, but here the mother actually seemed to be encouraging the child to interact more ("what's that uncle's name?" and other such nudges). As it turned out, the family sat next to me on my Jet Airways flight, and I pointed out my observation to them. The lady was surprised that any parent would not allow their child interaction with the public phase. We love it when he plays with strangers, she said, it means he's learning important social skills.

The family themselves represented an interesting demographic. He ran an Eicher dealership selling tractors, trucks and buses. Business had been very good recently, thanks to a booming economy, and they said there was no place better to see it than Faridabad, a sprawling industrial town outside of Delhi. I had noted the flood of new cars in Delhi, but they tell me it's peanuts compared to what's happening in the small towns, where industrial small businesses (as opposed to service workers) are truly reaping the benefits, and more importantly, spending money like never before. The change in spending patterns is new, and while at least partly represents a desire for present comforts over defered gratification, in some degree represents a confidence that the present boom isn't a cyclical uptick.

This has become a long post, what with the lack of time to write, and I have a speech to prepare, to give at a local school on environmental issues, so the blogging will have to wait till I'm a little more in control of that.

Thursday, July 20, 2006

Home Sweet Home

I will be blogging a special series titled 'Home Sweet Home', about my current visit to my homeland, India after 3 years. While much of it is couched in nostalgia and may be trivial information unworthy of anyone's attention but my own, my intent is to log my own experiences as sentiments to be able to revisit to get a sense for the nature of change and staticism in this dynamic land.

Sunday, July 16, 2006

The Deficit Does Matter

Mike Norman wrote an article for the Motley Fool website arguing that the trade deficit is not a bad thing. His reasoning was something like this: ordinary people run trade deficits, with your grocer, your barber and what have you, buying goods and services from them, and selling nothing to them, and that's a good thing. Ditto for the country!

Ah, but Mike forgot one little detail: true, we do run deficits with most of our vendors, trading services for IOUs (and cash really is a tradeable IOU). But there is at least one vendor we run a large surplus with, your employer - you export services to your employer, and in return, your employer gives you a large IOU called a paycheck, which you then use to import from your vendors. As long as you export more than you import, you have an excess of IOUs that can be invested and you are increasing your net wealth. However, when you have more imports, you are living on credit (like millions of Americans do).

Now, indebtedness is by itself not awful if two conditions are met: the cost of borrowing is cheap, and the credit is used for additional revenue-generating assets. The Chinese have made sure the first is true, but what about the second? Most of their investments have been in government securities, and it is questionable if our governments are investing them in revenue-enhancing activities. (Think of the difference between investing in a rental property versus a car)

And as an individual, you do have to worry about the spigot turning off. That's why you pay your way out of even a mortgage. In the case of the US, the trade deficit keeps increasing. What happens when foreign borrowers are now longer satisfied with their risk-reward profile? After all, a credit card gives you money because that's how it makes money, but at some point, the returns on a risk-adjusted basis are no longer appealing, and the spigot of easy money is turned off. How will the US cope in this event?

Wednesday, July 12, 2006

Perspectives on Terror

The world has seen two very different responses to acts of terror in recent days. While Israel sought to attack Lebanon to recover its kidnapped soldiers, India has thus far maintained a much less aggressive tack after the Mumbai blasts that killed 200, at last count. Till earlier this evening, I wished India would adopt Israel's aggression, striking militant camps in Pakistan rather than waiting for its neighbor to seek them out. Over dinner, watching the Newshour gave me another perspective.

I would encourage you to listen to or read the comments of Hisham Melhem, the Washington bureau chief for the Lebanese newspaper An-Nahar, and host of a weekly program on the Arab satellite channel Al-Arabiya on the Newshour. He made a lot of sense about how retaliation pushes the moderates out of the political space. For example, in the Lebanon case, he argued that the Lebanese government is not in a position to do anything about Hezbollah, not because they don't want to, but because Hezbollah is militarily more powerful than the government itself. The Lebanese government then has to try to coax the militant group to lay down its arms, something the recent offensive makes a lot more difficult.

Postscript Soon after I posted this, I read this column by Saisuresh Sivaswamy arguing for a aggressive response, just as the US had done in the days after 9/11.

The US Aint No Unhappy Place!

I love how some crazy organization will periodically perform a study on happiness, and eventually tell us how unhappy people in the US and other rich countries are. And news organizations will report it as the holy word, so that you and I can sit and either feel miserable about our affluence, or pleased with our lack of it. Well, hooey! MSNBC reported that Vanuatu was rated as the happiest place in the world while the US, Russia and the UK came in at 150, 172 and 108 off the 178 places in the world. The conclusion - happiness is not correlated with economic success.

Now, I live the US, and I know it certainly couldn't be the happiest place in the world, but come on ... 150! Something fishy ... Turns out the (Un)Happy Planet Index is an "innovative measure" (quotes from website) of true happiness. Except that they rigged the index to make industrial nations do poorly. The HPI is defined as:

HPI = Life satisfaction x Life expectancy/Ecological Footprint

Look at that for a moment. Assume life satisfaction surveys indicate that about the twice the percentage of people in the US are satisfied with their lives, as compared to oh say Malawi (a random African nation), but the US consumes 10 times as much. To achieve the same HPI, the US would have to have life expectancies 5 times as high as the Malawians, which means the average Malawian would have to live to less than 20 years of age.

Listen, I don't believe affluence alone brings happiness. I think there are far more important factors, including social structures and a rich faith tradition. But to create "innovative measures" to justify poverty the world over makes me sick (which is what most leftist groups try to do)! The reality is that the average farmer in each of those purportedly happier countries would gladly accept higher incomes, better healthcare, and not having to commit suicide because the monsoon failed!

Tuesday, July 11, 2006

Time for Action

The recent blasts in Mumbai, India are a grim reminder that the barbarian threat of terror still looms large. In the days to come, there will be much print dedicted to individual horror stories, and much condemnation of the gruesome acts. None of this is new. And yet, if every country condemning the acts were sincere, we have to ask if groups such as LeT and JeM would exist. And what of that most-wanted Dawood Ibrahim, terrorist financier, sought by India for well over a decade and a half now? And it is time the Indian political class go beyond photo-ops after rushing to the scene of the terror, and put the weight of the nation's largest democracy and second-most populous nation to exert pressure on the countries that allow these thugs to exist (read Pakistan, Saudi Arabia, and a handful of Gulf nations).

The retarded Home minister, Shivraj Patil was on record as stating that an attack was expected, but no specifics were available as to location and timing. Why then were public places not put on high alert? Could it be that the pols were more busy with populism, be it quotas or bureaucratic battles, to bother about the issues that truly affect people?

Customer Nonservice

That's it - I'm officially sick and tired about the nincompoops who work at customer nonservice centers. My latest run-in was with a nitwit at Capital One. I applied for a credit card that promised me 0% APR on purchases and balance transfers, but when I activated, I was told I was getting 0% on purchases only. I tried to explain to the genius that that's not my offer stated, that I had my offer right in front of me, and yet he kept parroted like a broken record that the APR was for purchases only, and that I must be looking at the wrong offer (even after I pointed out that I had notated the offer for my records). After a tiring exchange that had me feel like I was talking to a wall, I asked for his supervisor, only to be put on hold for 15 minutes before I gave up and hung up!

What the hell is wrong with companies these days? Why do they think they can treat us like worthless pieces of crap, and that we will put up with it. I for one would never use Capital One, unless my letter to the complaints department yields an apology and more. Shame on you, Capital One, for forgetting that old adage in business - customer is king!

Thursday, July 06, 2006

Quote of the Day

Former House Speaker and architect of the GOP's Contract with America, Newt Gingrich on Democrats and their bloggers:
This is a core problem [the Democrats] have. ... I don't think you can write a Contract with Vermont and San Francisco. ... Al Gore has refused to endorse his vice presidential running mate [Lieberman]. A party which is so driven by its left that—I don't know if you saw the blogger meeting in Las Vegas? From the standpoint of an average American, some of that stuff was weird. Candidates out there run a risk of resembling the people they're trying to appeal to. Normal people I think become distanced by that stuff. I think the Republican Party has few allies more effective than the Daily Kos. It puts them into an echo chamber of listening to each other. There was a reason [2004 Democratic presidential nominee John] Kerry looked normal—because Howard Dean looked so strange. So you have Dean as national chair, you have Gore coming back as a true left winger to Hillary's left, you have Lieberman unacceptably pro-national security, you have Nancy Pelosi from San Francisco... Let's drop Nancy Pelosi into a typical exurban swing district and see how she does. You listen to her talk and it's all about the counterculture, unilateral disarmament type of babble.

Tuesday, July 04, 2006

History Repeats Itself?

You've been hearing it all the time recently - the rise of India and China, how the US is losing out to the competition, how the Asian Tigers are where all the action, and profits, are. Oh, and China is manipulating it's currency, and if we just impose anti-dumping tarrifs on Chinese imports, American manufacturing will be A-OK. Well, in line with my recent obsession to learn from history's lessons, I have been reading (ok, only a few pages at a time) Bill Emmott's historic book, 'The Sun Also Sets'. Why historic? Because writing at the height of the Japanese boom, he called for a collapse in the Japanese economy. OK, I haven't gotten to that part, but it amazes me how much alike the Japan story of those days is to India and China today - booming economies, increased consumer spending and the wealth effect, speculative asset bubbles in stocks and real estate ... Oh, and let's not forget Washington politicians accusing the Japanese of manipulating the yen rather than tackling America's self-made problem with trade deficits.

To be sure, there are several differences between the Japan of past and India and China today, not least of which are size and demographics. Nevertheless, the next time you come across a story suggesting you learn Chinese, you may just want to pass.

Sunday, July 02, 2006

Alter on Flag Burning

My brother sent me this wonderful piece by Jonathan Alter on the recent efforts by the Senate to pass a flag-burning amendment. I thought John Glenn put it best, as quoted by Alter:
Those 10 amendments we call the Bill of Rights have never been changed or altered by one iota, not by one word, not a single time in all of American history. There was not a single change during any of our foreign wars, and not during recessions or depressions or panics. Not a single change when we were going through times of great emotion and anger like the Vietnam era, when flag after flag was burned or desecrated. There is only one way to weaken our nation. The way to weaken our nation would be to erode the freedom that we all share.”

The Lankan Destroyers

Wow, this is only my third-ever sports post. And this time it's on a sport only a small subset of my blog readers understand, let alone follow. But the Lankan destroyers merit attention ... a lot of it! If you haven't been following cricket recently, the Sri Lankan visitors (ranked #6) just massacred England (ranked #2) 5-0 in the recent one-day (ODI) series. The Lankans were far superior in all aspects, but what really caught my eye was the top 3 batsman for Lanka. Here's how they did:

Game 1 2 3 4 5
Tharanga 120 17 41 60 109
Jayasuriya 11 122 23 14 152
Jayawardane 24 66 126 100 12

Between them, they had six 100's and two 50s - I don't think I've ever seen a similar domination by the top 3 of any side! Just for a contrast, compare the figures of England's top 3:

Game 1 2 3 4 5
Trescothick 67 9 36 44 121
Strauss 12 18 32 39 41
Bell 7 40 77 30 18

That's one 100 and one 50 for you. Incredible! Beating England at home isn't easy ... making them look like a second-rate team no mean achievement.

Free and Clear

Money magazine has some great specials about individuals who paid off debt or saved and invested their way to wealth. One such story is that of Doug and Tina Koch who paid off $30,000 of debt acquired by the marriage ceremony within 11 months! It truly is revealing, and as Tina points out, if we could save even a fraction of that every month, we'll all be in good shape!

Saturday, July 01, 2006

Quote of the Day

Syndicated columnist Mark Shields duscussing his reaction to the flag burning amendment, which failed in the US Senate, on the Newshour with Jim Lehrer:
It made me angry, because I listened to those speeches. I listened to the people advocating it, and they talked about our fighting men and women. If they really were remotely authentic or sincere about our fighting men and women and honoring them, how about body armor? How about armoring Humvees? How about not cutting veterans' benefits? How about not putting our troops in a position where they're ordered to perform torturous acts? How about sending enough troops into battle? I mean, I just -- I mean, this was hypocrisy at its worst.