An Open Letter to President-elect Obama

Mr. President

In case you have wondered why the economic crisis continues to get worse in spite of all the medicine in the world from the best experts in the world, the reason is simple: we have the wrong diagnosis (that this is a liquidity crisis) and we are therefore administering the wrong medicine.

You will not only be tempted to put the interests of the USA first, you may well consider it your duty to do so.

However, from your Administration, a fresh impetus towards open markets would be most welcome. The alternative to free trade is protectionism, which will ineluctably result in conflict - or War.

The parallels to the end of the previous phase of globalisation, in 1873, are chilling.

Lead us not towards the same mistakes. Lead us towards a form of capitalism which includes the possibility of a humane future for everyone in the world by means of a global level playing field for capitalism.

The Achilles' heel of the current phase of globalisation was the WTO's deliberate avoidance of a level playing field in terms of health, safety, environment, pensions - indeed, minimum standards in virtually all areas. I admit that the problem was compounded:
_ because of the pre-existing tendency to debasing money ("inflation"); and,
- because of legalising the possibility of gambling with money meant for other purposes, without requiring anyone even to keep track of who was betting how much - and indeed whether they even had the money with which to bet.

The result is that the world faces an unprecedented crisis whose true dimensions are being systematically ignored or underplayed.

The heart of the global problem is not currency misalignment or inter-bank liquidity or toxic assets - these are all important, but the key challenge is the derivatives/hedge funds/ credit default swaps (CDS) industry, whose global overhang is $1,144 Trillion (or 1.14 Quadrillion). That is as much as 23 times the total quantity of actual wealth in the world - Global GDP only amounts to some $50 Trillion. Even if we mark such trades at 5% of their value, as is usual, that still makes these trades roughly equal to world GDP.

In other words, the mass of outstanding CDS/Derivative/ Hedge Funds cannot be supported by all the money that all the governments in the world can provide. As there is no registration of such deals, no one knows who holds how much of these "acid assets", no one knows who will be required to cough up massive sums of money at what point, and whether such a person will have the capacity to pay or borrow such massive amounts. That is why not even banks trust other banks, let alone companies or individuals.

Moreover, in view of the current low appetite for long-term bonds, it is not at all clear whether even governments will be able to raise the quantities of money that have already been promised by them. So it is possible that some 30 countries are already bankrupt or well on the path to bankruptcy.

Much more innovative and substantial action is therefore needed. Any analysis of the contemporary phase of globalisation (the last 20 years or so) shows that our global economic system suffers from alarmingly large booms and busts. These may be inevitable, but intelligent ways are well established in the research literature for smoothing both booms and busts. High growth is always politically attractive, but it is much more important for growth to be sound, otherwise the illusion of so-called growth is quickly exposed as being hollow.

Here, therefore, are some key proposals:

1. As the purpose of CDSs was to provide insurance, and it is clear that insurance cannot in reality be provided by these at present, all CDSs should immediately be declared illegal, and the challenge of the actually-existing non-insurance should be met by government commitments to provide minimum insurance, but no more - that is, insurance that would enable all companies that were "going concerns" (say, at the end of September 2008) to continue trading. The initial amounts invested, provided those were before say 30 December 2007, could be returned to the original investors. The consequences for governments and for companies need to be worked out in detail but those could be good broad principles on which to act, essentially unwinding as safely as possible the huge industry which should never have come into being in the first place, at least on this sort of scale.

2. Derivatives and hedge funds have two purposes: (a) to provide insurance and (b) to provide speculative gain. The first function should, in accordance with item 1, also be taken over on a similarly minimum basis by governments, while all hedge fund and derivative activity which was oriented towards speculative gain should be immediately declared illegal, and compensation should be provided to the extent of returning the amounts originally invested.

3. All future speculative financial activity (hedge funds, derivatives, CDSs...) should be regulated by means of (a) standard templates (developed by the financial services industry) which provide transparency, measurability, gradeability and accountability, and (b) registration on, and sale exclusively through, recognised exchanges. At least seven global exchanges need to be established and maintained by law: competition is an important principle to uphold, specially when the scale of activity is so enormous.

4. The different types of financial activity (insurance, commercial banking, retail banking, investment banking, asset management...) should be separated by new global laws, so that speculation cannot be carried out with money originally supplied for other purposes. Certainly leveraged betting should be banned.

5. In order to make rescues of companies by governments viable, no company's turnover should be allowed to grow to a size of more than 0.5% of the GDP of the country where it is registered. As soon as any company is within 20% of that range, it should be required by law to start planning to spin out parts of the company; if a company does not do so, the national authorities must intervene with such plans - which will in any case go into effect as soon as company size does arrive at the borderline.

6. Countries within the UN, the WTO, Bank of International Settlements (BIS) and other such global bodies should agree to avoid printing more money than is justified by their GDP. Debasing a currency can provide a short-term spurt to an economy, but sound money is essential if solid growth is to take place. Any country violating this principle should be considered to have disqualified itself from belonging to the community of civilised countries with whom trade is possible.

7. Financial institutions (FIs) currently lend 12 times (or more) of the amount they actually have in money deposited with them. The greater the proportion that they lend, the more vulnerable they are to lack of depositor confidence at any time, and the consequent possibility of bank runs. FIs may therefore not lend more than 6 times the amount of deposits they hold at any one time. The rate of credit growth should always be below the rate of GDP growth for every country within the BIS, WTO, and similar treaties. Whenever the rate of growth of credit in a country comes within 20% of the rate of its GDP growth, the amount FIs may lend should immediately drop to 5 times what they have in deposits. Contrariwise, when the rate of GDP growth slows to 2% or less, the amount that FIs can lend should be increased to 7 times what they hold in deposits. If the GDP growth rate drops to 1% or less, the amount that FIs can lend should be increased to 8 times deposits. The intention of such a policy is to be counter-cyclical and to be well within safety margins, so that it would be unnecessary for FIs to be rescued by governments. Variable lendable quantity is an important but ignored lever, in addition to the equally-important but highly-attended-to-lever of interest rates, in order to influence debt, economic activity and sound growth within the global economy.

8. Tax and other positive and negative incentives should be used to discourage credit-based growth for individuals, families, companies and countries. Instead, investment-based growth should be encouraged.

9. The current monopoly of currencies (Yen in Japan, Dollars in the USA, the Pound Sterling in the UK, et al) needs to be complemented by currencies which are specifically designed to be cycle-dampening. The literature on cycle-dampening currencies and the experiences with them around the world are well known.

10. As accelerating stock market activity over recent years has speeded short-termism, two classes of stocks (Long Term and Short Term) should be immediately deemed to have been created for all publicly-quoted companies, and all existing stock holdings should be immediately considered to have been divided equally into these two classes. New stocks may be purchased only in equal quantities of Short Term stocks and Long Term stocks. Short Term stocks can be traded at any time. Long Term stocks may be traded only once a year on the date of purchase. This will eliminate "day trading" and so slow down the rate of economic activity, but at the same time enable growth to be much more solidly and healthily based. The exact proportions of Short Term and Long Term stock issuable and purchasable can be varied by global agreement from time to time, say every 3 years.

11. The 100 richest families in the world may be required by law to invest (invest, not donate! - whether through existing vehicles or through vehicles that develop for the purpose) 2% of their total wealth in democratic countries that are Least Developed. In addition, the 1000 richest families in each country may be required to invest 1% of their wealth in micro-enterprises in their own country, or to funds devoted to that purpose. Note that the intention is not to encourage micro-lending at the sorts of scandalous rates that are considered acceptable; rather, the intention is to encourage micro-investment.

12. Regulatory arbitrage around the globe should be immediately prevented through global frameworks, global minimum standards and global approaches to health, safety, pensions, minimum income, environmental protection, and tax (for the last, minima and maxima can be established depending on the level of achievement of a country). If a level playing field cannot be established around the world straightaway, there should at least be rational and agreed principles on which different levels of playing fields are recognised and established from time to time.

CAVEATS: Whether or not any or all of these proposals find favour, the vast majority of people in the world would deem the following to be completely unacceptable:
- attempts to form a world government, and
- attempts to create a world currency.
This is because we view such things as constituting, or at least laying the foundation for a slide towards, global totalitarianism. The world has had 20 years of casino or jungle capitalism. On the rebound, there is a real danger that there will be a temptation to rush into authoritarianism.
Global stability and sound global growth are essential. But these can only continue on a secure footing if we conserve and nurture political, economic, fiscal, financial, business, social, religious, ideological and lifestyle freedoms around the world.

Yours faithfully
Prabhu Guptara Sphere: Related Content

India's place in the community of nations

As our people seem incapable or unwilling to do anything systematically to raise the level of our country, it is sad to us continuing among the unsuccessful nations.

According to the just-released Standards Compliance Index, which ranks a country’s compliance with the TwelveKey Standards for Sound Financial Systems (Standards and Codes), India ranks 47th! That is below such countries as Brazil, Chile, Kazakhstan, Romania, Thailand, and even Colombia!

In the Business Indicator Index, India actually ranks 71st, with only the following countries worse off: Bolivia, Bangladesh, Indonesia, Cameroon, Syria, Algeria, Vietnam, Thailand and Iran!

The Business Indicator Index ranks a country’s overall political, economic, and business environment.

For full details see: http://www.estandardsforum.org/ Sphere: Related Content

Is it possible to defend Credit Default Swaps?

On Reuters.com today, I see an attempt to defend Credit Default Swaps (CDS) titled "Demonization of CDS mis-states real role in crisis".

If I recollect aright, I have earlier explained on this Blog that CDS have two roles. First, they have an insurance function, and are used to protect against the risk of a company, government or other borrower not paying back their debt. When a borrower fails, the party that buys the protection is eligible to be paid the full amount insured.

Second, however, CDS can be used to gamble, in that one can speculate on the likelihood of a company or government or other borrower not paying back their debt.

The defence of CDS on Reuters needs to be seen in the context of the size of this market: currently CDS are worth $55 trillion (that is, more than all the real wealth in the world). What one thinks of CDS therefore has huge consequences.

Rising to the defence of CDS is Professor Roy Smith of the Stern School of Business at New York University who, according to Reuters, is reported to have said that CDS are "nothing more than an insurance contract .... You can't have a good or an evil insurance policy." He completely ignores the fact that CDS can be used, and indeed have largely been used, for the purpose of incredibly large-scale gambling.

That is why some people (rather more eminent people than myself, but including myself), consider CDS as "evil", "acts of Satan" and "financial weapons of mass destruction". CDS have played a key role in spreading the risks of immoral mortgage-lending decisions globally. CDS have also encouraged banks and insurers to take on more risk than they could handle, sometimes causing not only their collapse but also threatening systemic collapse, such as when they affected Lehman Brothers or Goldman Sachs. The latter had outstanding leveraged bets (such as CDS) worth more than $1Trillion, when its own capital base was "only" $43 billion.

Professor Smith, however, argues that the tool itself is not to blame for lax risk management.
"You could criticize demon rum, or anything that might serve some other purpose that which can be misused," NYU's Smith said. "There are lots of ways to abuse many things."

True. But we forbid juveniles from being able to buy rum and all other forms of alcohol, we don't have rum running free through the public water supply system, and we don't actually pay people to drink rum (don't forget that people were actually making huge sums of money from issuing CDS that they knew they could never honour).

If the abuse of some thing has huge global consequences, then it is right and proper to regulate who can buy or sell, how much they can buy or sell, and for what purpose they can and should buy or sell.

Like Professor Smith, I believe in free markets. But there is (or should be) a difference between a free market and a jungle.

You can have free markets that systematically ignore and subvert even existing safegaurds - as was the case in the global economy over the last decade and more. Or you can have free markets in line with rules and safeguards - like a football match or other sports or athletic event.

There is all the difference in the world between saying "May the better boxer win" and saying "Every murderer should be allowed to get away scot free". Sphere: Related Content

What should be expected from the G20 Conference convened by President Bush on 15 November 2008

After a week in the UK, followed by a week in the USA, and a week of work back in Switzerland, I am in Moldova on a badly-needed break for a couple of days.

In fact, I am even headed to Transnistria in order to get an experience of the last Soviet-style government in the world (well, apart from a few other oddities such as North Korea and Byelorussia), so that we know what to try to ensure is AVOIDED by the G20 as a result of their conference on November 15....!

From that conference, we should expect a fresh wave of globalisation, which I am sure we will all welcome, especially if it includes progress towards a level global playing field through agreements on global standards, frameworks and approaches on such subjects as environmental protection, child labour, health, pensions and minimum income.

Alternatively, we can expect a fresh wave of protectionism eventually resulting in wars - or War - which would in any case be terrible.

The parallels to the end of the previous phase of globalisation, in 1873, are chilling.

Let us not make the same mistakes.

Let us move towards a form of capitalism which includes the possibility of a humane future for everyone in the world by progressing towards a global level playing field for capitalism.

All the problems produced by the current global crisis were caused initially by the WTO´s deliberately avoiding a level playing field - though it is true that these problems were compounded by debased money and by legalising the possibility of gambling with money meant for other purposes and, further, without requiring anyone even to keep track of who was betting how much and indeed whether they even had the money with which to bet. Sphere: Related Content

Kashmir and India's mission to the moon

Any and every attempt to defuse the tension between Pakistan and India must be welcomed, and so must each attempt to improve life for Kashmiris across both sides of the Line of Control separating Indian- and Pakistan-controlled parts of that area.

While I also am naturally proud of India's successful launch of our first unmanned spacecraft to the moon, I do wonder whether that is the right signal or indeed substantial effort for a country where millions are now freshly sliding into poverty as a result of the global crisis.

All very well for us to map the distribution of minerals and elements on the moon. But we probably need right now some attention to the state of our own nation here on earth. Sphere: Related Content

Jim Wallis's principles for citizens thinking about who to honour with their vote in any election

Jim Wallis has just produced his list of priorities in deciding how to vote in the coming US elections. India's national elections may be less than six months away....

Wallis's is also a good starting point for anyone considering how to vote in any election anywhere in the world, so I provide it below, with my comments in capitals.

"With more than 2,000 verses in the Bible about how we treat the poor and oppressed, I will examine the record, plans, policies, and promises made by the candidates on what they will do to overcome the scandal of extreme global poverty and the shame of such unnecessary domestic poverty in the richest nation in the world. Such a central theme of the Bible simply cannot be ignored at election time, as too many Christians have done for years. And any solution to the economic crisis that simply bails out the rich, and even the middle class, but ignores those at the bottom should simply be unacceptable to people of faith. NEITHER THE DEMOCRATIC NOR THE REPUBLICAN PARTY IN THE USA HAS ANY PLANS TO HELP THE POOR, AS FAR AS I CAN SEE.

"From the biblical prophets to Jesus, there is, at least, a biblical presumption against war and the hope of beating our swords into instruments of peace. So I will choose the candidates who will be least likely to lead us into more disastrous wars and find better ways to resolve the inevitable conflicts in the world and make us all safer. I will choose the candidates who seem to best understand that our security depends upon other people’s security (everyone having "their own vine and fig tree, so no one can make them afraid," as the prophets say) more than upon how high we can build walls or a stockpile of weapons. Christians should never expect a pacifist president, but we can insist on one who views military force only as a very last resort, when all other diplomatic and economic measures have failed, and never as a preferred or habitual response to conflict. ON THIS BASIS, PRESIDENT BUSH MAY BE CONSIDERED DISQUALIFIED, AND PROBABLY MCCAIN - THOUGH I AM NOT SURE ABOUT THAT. OBAMA MAY BE QUALIFIED, BUT IT IS DIFFICULT TO TELL AS HE HAS NOT REALLY RUN ANYTHING SO FAR, AND IT IS DIFFICULT TO TELL HOW HE WILL REACT UNDER PRESSURE. THERE IS ALSO THE OPPOSITE DANGER OF APPEASING POTENTIAL HITLERS.
HOW ONE BEHAVES AS A PERSON IS AN ENTIRELY DIFFERENT MATTER FROM WHAT ONE JUDGES TO BE THE BEST OF IMPERFECT CHOICES AMONG CANDIDATES. WALLIS UNDOUBTEDLY PREFERS OBAMA ON THIS BASIS.

"Choosing life" is a constant biblical theme, so I will choose candidates who have the most consistent ethic of life, addressing all the threats to human life and dignity that we face — not just one. Thirty-thousand children dying globally each day of preventable hunger and disease is a life issue. The genocide in Darfur is a life issue. Health care is a life issue. War is a life issue. The death penalty is a life issue. And on abortion, I will choose candidates who have the best chance to pursue the practical and proven policies which could dramatically reduce the number of abortions in America and therefore save precious unborn lives, rather than those who simply repeat the polarized legal debates and "pro-choice" and "pro-life" mantras from either side.
God’s fragile creation is clearly under assault, and I will choose the candidates who will likely be most faithful in our care of the environment. In particular, I will choose the candidates who will most clearly take on the growing threat of climate change, and who have the strongest commitment to the conversion of our economy and way of life to a cleaner, safer, and more renewable energy future. And that choice could accomplish other key moral priorities like the redemption of a dangerous foreign policy built on Middle East oil dependence, and the great prospects of job creation and economic renewal from a new "green" economy built on more spiritual values of conservation, stewardship, sustainability, respect, responsibility, co-dependence, modesty, and even humility. OBAMA HAS A CONSISTENTLY ANTI-LIFE VOTING RECORD ON ABORTION. IT IS UNCERTAIN IF HE HAS ANY IDEA OF HOW TO TACKLE, OR IF HE IS EVEN CONCERNED OR KNOWLEDGEABLE ABOUT, DARFUR OR GLOBAL POVERTY OR CHILD MORTALITY. UNFORTUNATELY, I HAVE NO IDEA OF WHAT WALLIS MEANS BY "practical and proven policies which could dramatically reduce the number of abortions in America". SO I SEE NO ALTERNATIVE BUT TO STICK TO AN OVERALL "PRO-LIFE" POSITION.
ON THE ENVIRONMENT, IT IS WORTH KEEPING IN MIND THAT A REPUBLICAN-SPONSORED NAFTA WAS SIGNED BY A DEMOCRATIC PRESIDENT CLINTON AND VICE-PRESIDENT AL GORE - AND THAT WAS THE TEMPLATE FOR THE WTO AGREEMENT WHICH HAS PRODUCED MORE ENVIRONMENTAL DAMAGE THAN ANY OTHER SINGLE THING IN THE ENTIRE HISTORY OF MANKIND. I DON'T FIND EITHER MCCAIN OR OBAMA EVEN CONSIDERING ANYTHING IN TERMS OF GLOBAL MINIMUM STANDARDS, GLOBAL RULES AND GLOBAL VALUES - THOUGH PRESIDENT BUSH'S CALL FOR THE G20 TO MEET ON NOVEMBER 14 MAY SIGNAL SOME FRESH THINKING ON THIS.

"Every human being is made in the image of God, so I will choose the candidates who are most likely to protect human rights and human dignity. Sexual and economic slavery is on the rise around the world, and an end to human trafficking must become a top priority. As many religious leaders have now said, torture is completely morally unacceptable, under any circumstances, and I will choose the candidates who are most committed to reversing American policy on the treatment of prisoners. And I will choose the candidates who understand that the immigration system is totally broken and needs comprehensive reform, but must be changed in ways that are compassionate, fair, just, and consistent with the biblical command to "welcome the stranger." ON THIS, OBAMA CLEARLY WINS.

"Healthy families are the foundation of our community life, and nothing is more important than how we are raising up the next generation. As the father of two young boys, I am deeply concerned about the values our leaders model in the midst of the cultural degeneracy assaulting our children. Which candidates will best exemplify and articulate strong family values, using the White House and other offices as bully pulpits to speak of sexual restraint and integrity, marital fidelity, strong parenting, and putting family values over economic values? And I will choose the candidates who promise to really deal with the enormous economic and cultural pressures that have made parenting such a "countercultural activity" in America today, rather than those who merely scapegoat gay people for the serious problems of heterosexual family breakdown." THIS IS TO MIX UP TWO OR MORE SEPARATE ISSUES. HOMOSEXUALITY IS THE RESULT OF FAMILY BREAKDOWN AND DOES LITTLE TO FAMILY LIFE, BUT CERTAINLY ALSO LITTLE TO CAUSE FAMILY BREAKDOWN. HOMOSEXUALITY IS, HOWEVER, CLEARLY ANTI-SOCIAL. FAMILY BREAKDOWN SEEMS TO ME TO BE CAUSED MORE BY GREED, AMBITION, AND NEGLIGENCE - ALL OF WHICH ARE ENCOURAGED BY THE SORT OF CASINO CAPITALISM THAT HAVE BEEN THE RESULT OF ACTIONS ON THE PART OF THE DEMOCRATIC AS WELL AS THE REPUBLICAN PARTIES.

ON THE BASIS OF HIS PRIORITIES, WALLIS HAS MADE IT CLEAR THAT HE PREFERS THE DEMOCRATS THIS TIME AROUND. IN ONE OF MY PREVIOUS POSTS, I HAVE MADE CLEAR THAT IF I WAS A U.S. CITIZEN, I WOULD VOTE FOR THE REPUBLICANS THIS TIME AROUND - THOUGH I PREFERRED THE DEMOCRATS FOR THE LAST TWO ELECTIONS.

WHAT AMERICANS WITH HUMAN VALUES NEED TO DO IS TO GET TOGETHER, FIRST TO CALL FOR ELECTORAL REFORM IN ORDER TO RID THEIR ELECTIONS OF THE INFLUENCE OF BIG MONEY, AND THEN FORM A PARTY THEMSELVES IN ORDER TO MAKE CLEAR THE MORAL, SOCIAL, ENVIRONMENTAL, ECONOMIC AND FINANCIAL POLICIES THAT ARE NECESSARY FOR A NEW GLOBAL FRAMEWORK THAT IS HUMANE.

WALLIS OUGHT TO GET TOGETHER WITH RICK WARREN, CHUCK COLSON AND OTHERS - AND THEY WILL FIND THAT THERE IS MUCH TO UNITE THEM AND LITTLE TO DIVIDE THEM IF THEY STOP THINKING ABOUT THE CURRENT CHOICES AND CURRENT AGENDA, AND START PUTTING FORWARD THEIR OWN AGENDA AND PERHAPS EVEN THEIR OWN CANDIDATES. Sphere: Related Content

The case against Obama

After having felt instinctive support for Obama as the first non-white to have been able to run for the Presidency, I have been examining my position more rationally.

Fortunately, I have not had to do that earlier, nor indeed do I have to do that now - as I am not a US citizen and cannot vote in the election. However, as the President of the USA is the most important single influence in the world for the duration of that Presidency, it is right for everyone in the world to think about the issues at stake and the character of the individuals who call for our support.

1. On economic issues, it is fairly clear that Obama would go for infrastructure and other such Keynesian measures, whereas McCain would go for more monetarist-type measures. My own instinct is for Keynesian measures but, at this point in the fortunes of the global economy, it is unclear what sort of effect either (or both!) sets of measures would have. So, on the immediate economic future, I don't think we have any evidence on the basis of which to support one or the other. On the long-term economic future, I don't see any evidence that either candidate (and either party) is willing to look at the sorts of measures that many people (including myself) have been advocating. So whichever party and whichever individual is elected, we will continue to have no measures to smooth the boom-bust nature of the current economic and financial system.

2. On foreign policy issues, it is similarly unclear whether there is any clarity regarding whether one or other would be more effective. I prefer Obama's commitment to early withdrawal from Iraq, but I am not sure whether he has the experience or instincts on the basis of which other key foreign policy issues will need to be influenced if not settled by the President.

3. Obama has the more able potential deputy (Biden), but McCain is clearly more able than is Obama - so as long as McCain is alive, he will make the more competent President. Obama has in fact run nothing in his life (except for this Presidential campaign - and that is not the same as running anything normal like a company or a municipality).

4. On other issues, I have just read the latest issue of Family News from Dr. Dobson, and I find that overwhelmingly persuasive (I append it below). As far as I can see, everyone committed to human values and to the culture that nurtures and supports freedom should consider supporting McCain this time round - in spite of all the reservations one feels about him and his policies, the reservations one feels about Obama and his policies are much greater.

It is an enormous pity that US citizens must choose betweeen two such flawed options. However, as that is the choice, one must then choose the less-worse option, and I consider that to be McCain.



Family NewsFromDr. Dobson
October 2008

Dear Friends,
Can you feel the tension in the air? The nation--and indeed, the world--is holding its collective breath as the final days of the presidential campaign wind down and the candidates engage in one last round of electioneering and debating. By this time next month, we'll know whether Senator John McCain or Senator Barack Obama will be inaugurated in January as the 44th President of the United States.

Considering the stark differences between the two presidential candidates and the critical issues that are hanging in the balance, it's not difficult to understand why Campaign 2008 has been such a spirited affair. I'd like to take a few moments to consider what is at stake in this year's election, particularly for those of us who embrace a biblical worldview. Please understand that I will share these thoughts under the umbrella of Focus on the Family Action™, which has supported the preparation and distribution of this newsletter. Focus Action is, in turn, supported by contributions from those who do not receive tax deductible receipts for them. Thanks so much to you who made it possible.

Let's start with the need to elect a pro-family, pro-life President. The importance of this objective cannot be overstated. Between 2009 and 2012, there will likely be two or more opportunities for the President to nominate new justices to the Supreme Court. Some court watchers say there could be as many as four resignations. That alone should give us serious pause as we consider for whom to cast our votes. In the months ahead, the Supreme Court will likely hand down rulings that will impact America for generations to come. We need a President who will nominate conservative, strict-constructionist judges to the Court. If that doesn't happen, the highest court in the land could become stacked--even more than it already is--with justices who will endeavor to legislate from the bench and impose a liberal agenda on the nation. It will likely affect the definition of marriage, religious freedom, and the protection (or lack thereof) of life in the womb.

It's probably obvious which of the two major party candidates' views are most palatable to those of us who embrace a pro-life, pro-family worldview. While I will not endorse either candidate this year, I can say that I am now supportive of Senator John McCain and his bid for the presidency. This is not because I am beholden to the Senator from Arizona or to the Republican Party. Anyone who has even a passing familiarity with my views knows that I have agonized at times during this election process, and have been strongly critical of Senator McCain and the Republican Party on numerous occasions. My concern is for the biblical and moral values that I and millions of Americans hold dear. I will gladly support politicians of any stripe who are willing to defend the sanctity of human life, support the institution of traditional marriage, protect the country from terrorism and advance the cause of religious liberty. While certainly not perfect, the 2008 Republican platform comes closest to embracing those ideals by a wide margin.
In recent weeks, I have received some measure of criticism from those who feel that my "change of heart" toward John McCain is unwarranted. I understand those views and concede that the Senator continues to embrace positions that concern me. I don't apologize, however, for reevaluating our options in this election year. John Maynard Keynes, whose views I have disagreed with strongly, said this about reversing course: "When the facts change, I change my opinion. What do you do, sir?"1 In this instance, Keynes' perspective is correct. Every thinking person will eventually have reason to change his or her mind as circumstances evolve, as they have done during this long political ordeal.

There are four primary--and I believe compelling--reasons why I now view the McCain presidential candidacy favorably:
During the "Saddleback Forum" on Aug. 16, Sens. Obama and McCain fielded questions from the Saddleback Church pastor Rick Warren. Senator McCain gave very solid and encouraging answers to questions about the sanctity of life and the institution of marriage, whereas Senator Obama came down at the other end of the argument. You will recall the following interchange during the forum: Pastor Rick Warren: "At what point does a baby get human rights, in your view?" Senator Obama: "... Answering that question with specificity, you know, is, uh, is, above my pay grade."2 With all due respect, Senator, if this question is above your pay grade, then so is the job attached to it.

The Republican Party's 2008 national platform is a remarkably conservative document.3 Indeed, it is the strongest pro-life platform in the history of the party, surpassing even the pro-life advances of the Reagan years. It was approved and sanctioned by the McCain campaign.
Senator McCain selected an astonishingly strong pro-life, pro-family running mate in Governor Sarah Palin. Although he could have embraced a liberal Vice Presidential nominee, such as Senator Joe Lieberman or Tom Ridge, he made the bold decision to join forces with a VP pick whose views reflect those of the party's conservative base. I'll discuss Governor Palin's candidacy in greater detail in a moment.

The longer the campaign continues, the more concerned I have become with Barack Obama's liberal views. Certainly, he is an attractive and very charismatic candidate who has embarked on a campaign of historical proportions. However, the majority of his policies represent the antithesis of principles I hold dear. Senator Obama's record is more liberal than that of any other Democrat in the Senate4--and that's saying something! For example, when he was a state senator in Illinois, he voted four times in three years against legislation that would have saved the lives of babies that managed to survive the abortion process.5 The U.S. Senate subsequently passed similar legislation called The Born Alive Infant Protection Act by unanimous consent.6 (Obama was not a U.S. Senator at the time.) State Senator Obama was chairman of the committee that opposed this protection of babies, and in 2001 and 2002 was the only legislator who rose to argue against the Illinois Born Alive Act.7 That is an undeniable fact!
My good friend, former Pennsylvania Senator Rick Santorum published a scathing analysis of Senator Obama's pro-abortion record earlier this year. Here is an excerpt of what he wrote:
In March 2001, [Senator] Obama was the sole speaker in opposition to the bill on the floor of the Illinois Senate. He said: "We're saying they are persons entitled to the kinds of protections provided to a child, a 9-month child delivered to term. I mean, it would essentially bar abortions, because the equal protection clause does not allow somebody to kill a child."8 So according to [Senator] Obama, "they", (babies who survive abortions or any other preterm newborns,) should be permitted to be killed because giving legal protection to preterm newborns would have the effect of banning all abortions.9

To further underscore Senator Obama's radical devotion to abortion rights, he has promised that "the first thing I'd do as president" would be to sign the Freedom of Choice Act.10 The FOCA is a devastating piece of legislation that would overturn nearly every local, state, and federal anti-abortion law passed in the last 40 years.11 In fact, it's so broadly written that legal analysts suggest the bill may prevent institutions and physicians from refusing to provide abortion services by invoking the conscience clause.

Earlier this year, while talking about sex education and abortion, the Senator said the following: "I've got two daughters, 9 years old and 6 years old. I am going to teach them first of all about values and morals. But if they make a mistake, I don't want them punished with a baby."12 In other words, a pre-born baby is viewed as a form of punishment, and can therefore be murdered in the name of convenience.

It is a matter of historic significance that Barack Obama has become the first African-American to capture the nomination of a major political party for the office of President of the United States. I applaud that remarkable accomplishment. Nevertheless, I cannot support his candidacy because the positions he holds on moral, social and family issues place him at the extreme left of the political spectrum. What the Senator believes and the policies he would seek to implement are on a collision course with the biblical principles and beliefs I have fought to defend for more than 35 years.

Turning the corner, the significance of Governor Palin to the 2008 presidential race is also worthy of further consideration. Here is a woman who is a deeply committed Christian, and who is pro-life not only with regard to her policies, but in her personal life. She and her husband welcomed their latest child, Trig, into the world even though he was diagnosed with Down syndrome while still in the womb. Approximately 90 percent of babies with Down syndrome are aborted,13 but Governor Palin carried her precious child to term and now loves and cares for him despite the challenges associated with a special needs child. Similarly, her teenage daughter, Bristol, who became pregnant out of wedlock, could have bowed to cultural pressure to seek an abortion. Instead, she and the father plan to get married and raise their child together. Governor Palin has been married for 20 years, and by all accounts, she is a portrait of Christian motherhood and womanhood.

As for Governor Palin's qualifications to be Vice President of the United States and to assume the mantle of President, should that ever become necessary, she is much better suited for the job than the talking heads on the liberal Left would have you believe. She came out of nowhere to win the Alaskan gubernatorial race against a powerful incumbent. While in office, she bravely fought widespread corruption--including that within her own party--in the face of great opposition. Govenor Palin's critics suggest that her experience as mayor of a "small town" is somehow a liability, but it is an asset. In fact, her time as Mayor of Wasilla and then as Governor of Alaska gives her a greater degree of executive experience than Senator Barack Obama can claim. Her qualifications to be Vice President, I would submit, exceed those of Senator Barack Obama, who spent only 143 working days in the U.S. Senate prior to announcing his run for President.14 He authored no significant legislation during that time.

I'm sure you have heard the shrill voices from the political Left decrying Mrs. Palin for any and every reason under the sun. They gloat over the pregnancy of her daughter Bristol and claim it as "evidence" that abstinence education, which Sarah Palin strongly supports, is somehow a sham. They criticize Governor Palin for daring to hold political office and run for Vice President while having a baby at home, even though the Left has for decades supported a woman's right to do just that. The attacks on Governor Palin and her family in recent weeks have been astonishingly unfair and mean-spirited. If she were a liberal Democrat, she would be praised and lauded for making the same decisions for which she is now being criticized. The double standard is obvious.

Governor Palin's decision to run for Vice President while raising a baby with special needs has given pause to some conservative voices as well. Some have even questioned my enthusiasm over Governor Palin's candidacy in light of these circumstances. It's important to note that although I have often said stay-at-home moms are vitally important to raising the next generation, I have never suggested that it is wrong for mothers to work outside the home. Indeed, Focus on the Family® has hired thousands of mothers over the years. I have said, however, that if a mother is going to enter the workplace, she and her husband must first find a way to meet the needs of their children. Sarah Palin appears to have done that. Todd, her husband, is actively involved in the raising of their children, and it seems obvious that Sarah will continue to be a positive force in her children's lives even as she carries out her duties in the political arena. Regardless of your political views, may I suggest that the Palins need our prayers, not our disdain, at this critical moment in our nation's history.

Senator Obama's selection of fellow liberal Democrat Joseph Biden (Del.) is also extremely revealing. While the National Journal ranked Obama the most liberal Senator last year, Senator Biden was ranked 3rd on their list--just ahead of Vermont's Bernie Sanders, a self-avowed socialist.15 While the Senator of 36 years from Delaware stands in blatant opposition to the pro-family movement, many of you will remember him from his vociferous opposition to several of our finer Supreme Court justices, namely, Chief Justice John Roberts and Justices Alito and Thomas.

Returning to our theme, America's future seems to hang in the balance at this time. Our next President will have a dramatic impact on countless legislative issues. Since being relegated to minority status in 2006, House Republicans have skillfully used the rules of parliamentary procedure to frustrate many of the Democrats' attempts to pass bad legislation. To this point, that effort has almost always been backed by a President who is willing to use the veto pen when necessary. The threat of President Bush's veto on hate crimes legislation and issues regarding the sanctity of life have kept a Democrat-controlled Congress from implementing its liberal agenda. Will our next President stand up to Congress in the same manner, or will he side with them, thereby giving the Democrats free reign to impose their liberal values on America?
It is likely, say the pundits, that both the House and the Senate in the 111th Congress will still be controlled by Democrats. If that party also takes the White House, a wave of anti-family, pro-homosexual legislation is almost guaranteed to pass in 2009. The bills put forward and advanced this year by Democrats reveal where they want to take the country. For example, they inserted hate crimes language into the 2008 Defense Authorization Bill, but were forced to remove it in conference, again under the threat of veto.16 While in the Illinois Senate, Senator Obama voted for a bill authorizing "comprehensive" sex education beginning in kindergarten. Defenders have attempted to downplay its significance, citing the fact that it called for the content to be "age appropriate" and "medically accurate"--dubious and subjective qualifiers given the sensitive nature of the topic and innocence of the audience!17 (When criticized for supporting this legislation, the Senator was dismissive and said proudly, I quote, "It's the right thing to do."18)
Large portions of the agenda promoted by homosexual activists will also be enacted. The implications for a federal hate crimes law are clear. People speaking against homosexuality have already been prosecuted under hate crimes laws both in the United States and abroad. If a federal hate crimes law passes, there will be little to prevent the government from endeavoring to control and curtail religious speech, especially from the pulpit. It is entirely possible that a pastor could be charged with inducing a federal hate crime simply by preaching from one of the many biblical passages that address homosexuality.

Congressional Democrats will also seek to pass the Employment Nondiscrimination Act, meaning businesses will be forced to accept and condone homosexuality--and possibly transgenderism--in making employment decisions. Further, business owners, including religious businesses, will not be able to make hiring and firing decisions based on their religious convictions. Earlier this year, Senator Barack Obama said, "I will place the weight of my administration behind the enactment of the Matthew Shepherd Act to outlaw hate crimes and a fully inclusive Employment Nondiscrimination Act."19

Finally, I am deeply concerned about the tax and spend policies Senator Obama will impose on the American people if he is elected, especially in light of the current financial crisis. This is not the time to be taking money out of the economy, yet, he has proposed enormous new federal programs and entitlements that will cost multiple billions of dollars. These initiatives cannot be effected without huge increases in taxation on businesses, which will be passed on to the public and to individual families. This will almost certainly require a return of the odious marriage penalty tax that plagued families for 34 years!

The races for the White House and the Congress are hardly the only matters worthy of concern in this election cycle. At the state and local levels, numerous policies and pieces of legislation are being put to a vote, and many of them are directly related to family and moral issues. For example, the definition of marriage is on the ballot in Arizona (Proposition 102), California (Proposition 8) and Florida (Amendment 2). Voters in Colorado will be given the opportunity to expand the definition of "personhood" to include all human beings from the moment of fertilization (Amendment 48). In South Dakota, voters will be asked to ban all abortions except those involving cases of rape and incest, or when the pregnancy seriously jeopardizes the life or physical health of the mother (Measure 11). Michigan is considering whether to legalize embryonic stem cell research, which would result in the killing of tiny human beings. In California, voters will also get the chance to decide whether minor girls should be required to give 48 hours' notice to a parent or adult relative before having an abortion (Proposition 4). Arkansas voters will decide whether to prevent couples living together out of wedlock--heterosexual or homosexual--from adopting children or serving as foster parents.
These are just a few of the important issues that, depending on which state you live in, will be on the ballot next month. I implore you to spend the few days remaining before the election researching the various amendments, ballot measures, and local and national candidates. Then, exercise your responsibility before God to vote on or before November 4th. Please, let your voices be heard. For more information, visit Focus on the Family Action's Web site.
Regardless of your political views, I want to urge Christians everywhere to be in prayer about this election. There are many scriptural references wherein King David "inquired of God" when he was faced by troubling circumstances (1 Samuel 23:2,4; 30:8; 2 Samuel 2:1; 5:19,23). It is time for Christians everywhere to turn to Him for guidance and wisdom. Find some time to be still and listen to what He wants to tell you. The National Day of Prayer Task Force, led by my wonderful wife, Shirley, has embarked on a national campaign entitled "Pray for Election Day." All around the country, individuals and groups are being encouraged to gather every Thursday leading up to November 4th between 12-noon and 12:30 p.m. Spend time with the Lord, asking Him to guide and direct those privileged to cast a ballot. If you are able, I would also encourage you to fast and pray immediately before the election. After all, it was the Reverend Billy Graham who once said that "To get nations back on their feet, we must first get down on our knees."20 Amen, Dr. Graham.

This election is about the future of the nation, but it will also go a long way toward determining the culture your children and grandchildren will come to know. I know you will vote with your children and your children's children in mind. That certainly puts the election in a different light, doesn't it?

You know my heart on these issues, and I hope you understand that I am less concerned with politicians and political parties than I am with the timeless biblical principles that those parties have the power to either strengthen or damage. No candidate is perfect, whether in this election or any other. Please don't make your decisions lightly. There is simply too much at stake. May God grant each of us wisdom as November 4th approaches.

Sincerely, Sphere: Related Content

Archbishops, the financial system, and the FT

In its Comment ("Canterbury tales", September 25), the Financial Times criticises Archbishops Sentamu and Williams for not having "a proper grasp of how modern finance works". See: http://www.ft.com/cms/s/0/e07ff498-8b2a-11dd-b634-0000779fd18c.html

As readers of my Blog will know, Archbishops are hardly my favourite characters. However, to the degree they may not have such a grasp, the FT is right to excuse them - for the reasons it gives.

But I notice that the FT defends the current system by saying that "Everything from home-ownership to old age pensions relies on a successful and sophisticated financial sector".

What reasons or excuses should be adduced for the FT's failure to acknowledge that what we actually have is rather different from its purely rhetorical defence of modern finance.

What we actually have is a supposedly sophisticated financial sector that has shown itself to be so massively and totally unsuccessful as to threaten to subvert all human organisation around the globe.

Many folk may even now not see the threat. But it is looming. In spite of all that American politicians can do to avert it. Unless much more profound and fundamental changes are put in place - regarding which I have commented earlier in my Blog as well as other places. Sphere: Related Content

Understanding the Chinese government mentality

I thought my view of India-China relations was my utterly singular. So I am a little astonished to see that it is shared by Arun Shourie - with whom I rarely find myself in agreement!

His latest book, just published is: ARE WE DECEIVING OURSELVES AGAIN?

The reference is to India's self-deception in response to Chinese assurances of peaceful intent in relation to India between roughly 1950 and 1962 (when the Chinese invaded India).

China has astonishingly risen to world power status in some 20 years. Equally rapidly, as I have suggested in this Blog, it may find itself descending again, speeded on the way by the current global crisis. Meanwhile, China's rise, under authoritarian rule, is the first direct challenge to liberal democracy since Fascism in the 1930s. The Chinese modus operandi of promising peaceful intent, but then employing force to change facts on the ground, is well documented by Shourie. And India is not the only country that has to learn to deal with the realities of China.

I strongly recommend this book to governments in the USA, the EU, Switzerland, Russia, Japan, Taiwan, South Korea, the Philippines, Vietnam, Laos, Malaysia, Brunei, Indonesia, Singapore, Myanmar, Bangladesh, Sri Lanka, Nepal, Pakistan, Afghanistan, Tajikistan, Kyrgystan, and Kazakhstan and Mongolia - though some of them have their own, even older, experience of China - an experience that is hardly less painful. Sphere: Related Content

Does America have too much regulation - or too little?

As I am not a citizen of the US, I can afford to cock a snook at both Presidential candidates.

It is interesting to see Mr Obama reminding the US: "There’s only one candidate who’s called himself ‘fundamentally a deregulator’ when deregulation is part of the problem.”

However, Mr Obama clearly does not understand (as Mr McCain does not understand) that the problem is not whether there is too much or too little regulation in the USA.

The problem is rather that the US has too much regulation of the wrong kind.

What it needs is very much less regulation, but regulation of the right kind.

What is the right kind of regulation? That which tends to create global transparency, reliability and steady growth (as distinct from boom-bust) for the economy. Sphere: Related Content

A very interesting review of the book"RSS, School Texts and the Murder of Mahatma Gandhi: The Hindu Communal Project", written by Aditya Mukherjee, Mridula Mukherjee and Sucheta Mahajan, is to be found at:
http://www.dnaindia.com/report.asp?newsid=1191244

The spirit of Gandhiji is still being murdered afresh every day and every moment by the ideology of Savarkar and Golwalkar. Sphere: Related Content

Democrats and Republicans tussling over the rescue package

Apparently, a struggle is taking place in the US Congress regarding the exact terms of the rescue package for the US (and international) financial system. Equally apparently, the proposed bill was supposed to have been $500bn, is now $700bn - and no one knows what the final size of the bill may be.

A statement issued on behalf of Nancy Pelosi, the speaker of the House of Representatives, reportedly says: “Congress will respond to the financial markets crisis by taking action this week in a bipartisan manner...(but the Democrats) “will not simply hand over a $700bn blank cheque to Wall Street....(and would like to have) independent oversight, protections for homeowners and constraints on excessive executive compensation.”

Protections for homeowners are needed and will be popular. Constraints on excessive executive compensation are equally needed but will be unpopular (at least with the executives of financial institutions).

However, the real question is whether the US legislative system has the nous to put together with any speed anything like the brief required to put together any agency for "independent oversight".

Indeed, the US needs to ask whether another agency is what is needed. Rather, can the entire fragmented US system not be put together within one framework that, at the same time, avoids the overlapping monopolies of the different agencies there while allowing for much more competition? Sphere: Related Content

The King is Dead, Long Live the King: On the Fall of Investment banking (and its potential rise)

So Goldman Sachs (GS) and Morgan Stanley (MS), the last surviving global investment banks, have become regulated banks! That is to say, they are now subject toregulation by the Fed.

In addition to giving GS and MS the ability to take deposits from savers, thus reducing their reliance on funding in the short-term repo market, both GS and MS can now take advantage of loans from the Fed against the various kinds of collateral that are acceptable to the Fed.

It is worth recollecting that investment banking started as a separate industry following the consensus, after the Depression, that the "mixing" of insurance, mortgage, investment banking type activities with much more mundane banking activities, was at least one key cause of the Depression. The Glass-Steagall Act separated the two kinds of financial activities, till the Gramm-Leach-Biley Act stripped away towards the end of 1999 the regulations separating banking from investment companies, insurance companies and mortgage guarantee companies.

The Glass-Steagall Act's separation had been removed for only a few years before the current collapse, and many (including myself) would argue that the inter-relationship of investment, insurance, mortgage and banking industries that the Gramm-Leach-Biley Act allowed, was one key factor that led to the collapse.

If this analysis is correct, bringing GS and MS into the regulation of the Fed is only a partial solution.

Morever, there must always be room for creativity and innovation in the financial services industry as in every other industry.

I am not convinced that the current plans by the US government are adequate - though I hope and would like to think so! However, if and when, and for whatever combination of reasons, we recover from the current crisis, I have no doubt that innovative investment bank type activities outside the regulation of the Fed will reappear significantly. That would be altogether healthy.

However, one key regulation should be put in place now. Unregulated financial activity must never again be allowed to become many times the size of the regulated activity.

What should be the limit? We can argue about it. We need innovation but we also need system stability. Here is my offer, as an initial stab the limit: how about 25% of the regulated activity?

What should happen if unregulated activity starts exceeding such a limit? The top 10 firms involved in unregulated activity should be immediately made subject to regulation.

Innovation and creativity are important, and they have their place. Sphere: Related Content

How best to discourage tourists from visiting India

A friend's message prompts the following thought.

"How to most thoroughly discourage tourists from visiting India" must have been the subject of several intensive brainstorming sessions for the best minds of India over several years.

The results have been very thoroughly implemented.

It is no longer possible, for example, to get a visa by post in the UK.

So, wherever in the UK you live, whether relatively nearby (say an hour away, in another part of London) or across the water in e.g. Northern Ireland), you have to first arrange to travel to London, then you have to arrive at the office during working hours, join the long queue to submit your papers, stay somewhere overnight, and come back to join the queue the next morning for (you hope!) your visa. That's two days. A pity that India's best brains could not come up with something more complicated, so that it would take longer - and several more visits.

However, India's best minds haven't done too bady. Naturally, there is no guarantee that the visa will be issued. Bureaucrats can usually find something wrong with your application - for example, that the signature is too large or that there is something not quite right with the photo.

This is real progress for the tourist industry. So now a much greater number of tourists from the UK can be expected in India than in the bad old days.

Very good for the country during the global economic crisis, and other sources of income for the country are going to be limited anyway. Sphere: Related Content

Comment regarding my post, on Western media coverage of the ethnic cleansing going on in Orissa and other parts of Idia

Dear Prof. Guptara,

I am surprised to learn that the killing of Christians and destruction of their habitat is considered by the Western media to be by what you term"religious nutters".

In fact it is a planned attack on Christan's by VHP (VIshwa Hindu Parishad) and Bajrangdal on the tribal Christians in Orrisa because these tribals and backward class people have found freedom in Christianity from the caste system and from bondage to the upper castes.

The upper castes, who constitute only 10% of the total population of India, are agitated because the tribals and other backward class people are finding the true meaning of life and freedom in Jesus and are therefore no longer prepared to believe that they were born simply to serve the upper castes.

Thus it is not that a large number of Hindus are becoming Christians which is disturbing the VHP and Bajrang Dal but the new ideology of Christianity that all are created in the image of God and are therefore equal.

Upper caste Hindus cannot see the masses of people, whom they treated as slaves for centuries, now going out of their cluthes due to the good news of Jesus Christ.

Thanks,

Praveen Sphere: Related Content

Elections (USA) and Elections (Indian)

A friend commiserates with me today over the way that the Indian elite is now totally preoccupied with the global economic meltdown and the US elections.

Not that we should avoid paying attention to these matters. B

ut that we should be paying at least equal attention to the future of the country in terms of the next national elections in India - which can, if I understand aright, in the normal course of affairs, take place any time after April 2009 (which is only a few months away, specially if one discounts December/ January due to Christmas/ New Year).

It seems to me that this election could be decisive.

India is now locked in a struggle between the sort of secularism that was established by Gandhiji et al before/ after Independence (which may be on its last legs), and a double challenge from the Naxalites (who now control 10% of India's disticts, according to Government figures), and from Hindutva forces which are already on the rampage in six Indian states as a prelude to the elections (presumably, the rampage will move to other states as well).

If my analysis has any merit, then we have to consider the roots of INDIAN secularism (which is/ was very different from secularism in the West), as well as of Hindutva and Naxalism.

We should look also at the opportunity/challenge that is represented by the BSP and associated parties that claim to represent the OBCs and SCs (in principle 65% of India); they can either renew Indian secularism or take us in the direction of Zimbabwe....

But there is little if any debate taking place about all this... Sphere: Related Content

Is BPA the culprit behind the vast increase in heart disease and diabetes in the developed world?

Regular readers of my blog will be aware of my scepticism regarding the usual explantions of the causes of diabetes and heart disease.

Now comes the first piece of research which indicates what may be the truth:
http://www.telegraph.co.uk/global/main.jhtml?view=DETAILS&grid=&xml=/global/2008/09/17/noindex/Chemical-in-food-tins-doubles-the-risk-of-heart-disease-and-diabetes.xml&source=EMC-exp_17092008

If this is not *the* truth, that truth will be something like this - in other words, cancer-causing substances (for example) will be some thing or things ubiquitous in the developed world but not in the non-developed world. Sphere: Related Content

What advice for countries at this time of crisis?

A friend who is a top economist from a developing country, asks what advice I have that might be useful for his country.

As it is a country I don't know very well, I can only offer this generality:

The crisis is the result of an unprecedented growth around the world of unsound currencies (too much money being printed, along with artificially low interest rates), as well as lax governance and regulation.

So, now that the pendulum is swinging the other way, the country that deflates first (safely!), and puts in the best regulations and governance, will win the most.

Of course that won't solve the instability of the global system - if we want to do that we have to look at entirely different solutions. These are explored in a paper that I hope to put soon on my Blog (as soon as it is published formally in the Proceedings of a Conference). Sphere: Related Content

Are two independent global investment banks enough?

Now that we have only two independent global investment banks (IGIBs) in the world, how can that be considered enough? Will politicians and regulators call for the breakup of these two, or the creation of at least a few more?

To examine the possibilities, let's look at a field that has a parallel: accountancy and audit (A&A) firms , of which there are only four. And four global A&A firms are usually not considered sufficient to maintain healthy competition.

They themselves seem to be perfectly happy with the existing situation though even they might welcome more firms in the field if only because that would fend off criticisms of oligopoly. But no one is rushing to create a fifth one, given that such an enterprise would probably cost billions (and it is not clear that there is enough talent in the world to create a fifth such giant without emasculating the existing four).

Ah! I can hear the exclamation from my analyst friends who follow the financial sector. There is a huge difference between A&As and IGIBs. The latter don't need anything like the infrastructure that A&A firms do - and there is plenty of investment banking talent available in the market at present.

Moreover, new IGIBs could be created by legislators seeking to break up other conglomerates if the Glass/Steagall act (or some version of it) is brought back - as it may well be, given that any rational analysis shows that the repeal of the Glass/Stegall Act was at least one key contributor to the current crisis.

So is a season of fun and games ahead for the M&A industry? Sphere: Related Content

The monetarist gods that have failed

The collapse of the largest insurance company, the two largest mortgage companies, and three out of the five largest investment banks - all within the last few weeks! - means that if we are not *in* something like the 1929 recession, we are certainly very near it.

Many people (including myself) have for some years now been trying to present solutions for the inherent instability of the global financial system. But there are none so deaf as those who do not want to hear! Regulators were even pressed to avoid implementing the few safeguards that existed! Entirely needlessly, tens of thousands have lost their jobs, and other tens of thousands have lost their homes in the West, while over 100 million people have been thrust into poverty around the world.

Even after such spectacular failure, some people persist in their blind trust in the market - or in regulation - or, now, increased liquidity - which will, even if it works, soon increase inflation.

Why do we not want to look at real solutions? Because a spiritual change is needed before we can be released from our addiction to greed and speculation, and turn instead to safe growth. Sphere: Related Content

Why are US corporations (Cisco, Sun Microsystems and so on) funding Hindu Terrorist organisations in India?

According to a report in The Hindustan Times (New Delhi) today, $1.7 million was raised last year by the India Development and Relief Fund (IDRF) from individuals and corporations in the United States (including Cisco and Sun Microsystems) to distribute among Sangh parivar agencies, which are now established as the premiere terrorist organisations in the country.

On what basis are these the premiere terrorist organisations in India today?

First, by the body count and general destruction and duration of terrorism this year by such Hindu Terrorist organisations.

Second, by their tactics: almost all other terrorist organisations in the country operate by stealth through individual assassinations or surreptitious bombs; by contrast, the Sangh organisations are the only ones that operate by mass action in the open.

What do U.S. corporations - not to mention the U.S. Government - propose to do about this?

(As I write, the BBC reports their attack on a police station, killing a policeman and taking several others hostage.) Sphere: Related Content

What is the nature of the current economic crisis and how does it relate to the art market?

When I was a child, at various festivals, we set off fire-crackers as part of the celebrations. Some of these fire-crack
rockets, volcanoes, some were sparklers, some were like bombs or single detonations, but some were strings of bombs, one setting off the other after an interval, as the initial explosion lit the fuse to the next bomb which exploded an indeterminate number of seconds later.

Well, the current crisis is not like a volcano, and certainly not like a sparkler. It is certainly not like a bomb either. It is most like a string of bombs, with one crisis sparking another.

The only difference is that, between the explosions, we have the huge global flock of money still trying to find safe places on which to land while the issue for the global economy is how to "squeeze excess liquidity out of the system" - that is, how to reduce the floks of money and restore money to something like its true value.

The initial problem of over-valuation started with real estate, then spread to commodities (including oil), and then to certain currencies such as the remnimbi and the euro.

I am therefore interested to see that while the financial towers tremble and some of them even tumble, the bubble in art prices still continues to inflate, as testified by the following story.

Golden calf helps Hirst auction hit £70m
Sep 16 2008 02:32
An experimental sale of new works by Damien Hirst surpasses expectations with the top lot, the 600kg bullock 'The Golden Calf', selling for £10.3m, writes Peter Aspden
Read more >>
http://link.ft.com/r/J0VG55/TVU7X/QOTI/RHQLY/8MPA2/SN/t

Watch out: the higher the prices rise, the more they are going to fall. Sphere: Related Content

How to shoot yourself in your own foot - the case of Kashmir and Hindu Fundamentalists

There are many ways of shooting oneself in one's own foot. How's this for a classic?: the opening paragraph of an email that I received today from a Hindu Fascist group is a classic (keep in mind that they want to continue to keep Kashmir in India (or "Bharat"):

"Dear Hindus The photos on the below link show the anti-Nationalism of Kashmiri Separatists who want freedom from India. How Kashmiri separatist can dare to burn Indian National Flag? Indians should force Indian Government to take strong action against such anti-National people immediately. They should be forced out of Bharat." Sphere: Related Content

Today's bomb blasts in Delhi

So terrorists have struck again in Delhi! Following other recent attacks in
Hyderabad, Bangalore, Jaipur. ...

Yet the government has proceeded painfully slowly on counter-terrorism cooperation with other countries. For example, the EU-India security dialogue was held only twice in the last four years. The counter terrorism meeting took place in 2008 after a gap of three years.

We Indians have a serious problem, not because the problems we are facing are serious (they ARE serious!) but because we refuse to regard them as serious.

I repeat once again my call for a Government of National Unity to address all the problems of the country in such a way that Government works for the good of the common person, and not merely for lining its own pockets. Otherwise the country will continue to deteriorate - and that rather quickly. I repeat once again that India has only 2 years in which to be seen to at least start doing something substantial about such issues. Sphere: Related Content

Sovereign Wealth Funds - China

Those who decline to advocate special rules for Sovereign Wealth Funds from non-democratic funds might wish to consider evidence that China, at least, is using financial muscle for political purposes:

Beijing uses forex reserves to target Taiwan
Sep 11 2008 23:30
The secretive government agency that supervises China's foreign exchange reserves used its funds to help convince Costa Rica to switch ties from Taiwan to Beijing last year, according to files obtained by the FT
Read more >>
http://link.ft.com/r/ZE9K33/WA3J1/KTN4/1ARDE/RU7KF/6C/t Sphere: Related Content

Comments on Western media coverage of current developments in Orissa, India

Western media coverage almost uniformly takes the view that this is merely "religious nutters" (mad or crazy people) attacking each other. Is this really the case?

What are the real reasons for the sustained and widespread attempt in Orissa to identify and kill Christians by members and agents of the Word Hindu Organisation or Vishwa Hindu Parishad (VHP)?

Here is my analysis:

1. When people who want to exit the dominant caste-based Hindu system turn to Buddhism, Christianity, Islam OR Maoism (Naxalism), why is it that Christians are most often attacked, rather than the others? After all, only 2.3% are Christians, while 11% of the country's population is Muslim; Nepal has just become a Maoist country, and already 10% of India's Districts are now controlled by Maoists (according to the Government's figures): Maoism is clearly a much bigger challenge. So why do "nationalist Hindus" not go after the "bigger targets"? First, precisely because the "smaller target" has fewer numbers. Second, and more important, because most Indian Christians are committed to avoiding any violent response, in accordance with the teaching of Jesus. By contrast, whenever Muslims, for example, have been attacked by VHP-types, sufficient numbers of them fight back with violence, to give pause to the VHP.

2. The violence has been caused by rich and powerful Hindus, who have benefited for some thousands of years from whatever could be squeezed out of the country by the caste system. Why do not all Hindus use such violence? Because most Hindus (like most human beings) instinctively find violence distasteful (that is why armies have to resort to mood-inducing music or drugs such as alcohol in order to get even trained soldiers to do any actual killing - I am speaking of aggressors, not defenders). Why, then, have more and more upper-caste Hindus turned to violence? Because they have found, in the last few decades, that their position and benefits are being eroded by democracy and freedom - without any parallel rise in their opportunities for upward social and economic mobility in a globalising world. Of course there has to be a body of thought propounded by such people which ensnares others. Such a body of thought started with Savarkar, and started being inspired later by Mussolini and Hitler (that is the main reason, why members of VHP-type branches wear most un-Indian boxer-type short trousers for their morning "exercises"). The fact is that "extremist Hindus" are not primarily anti-Christian (if they were, their leaders would not send their children to Christian schools in the cities). Rather the philosophy and actions of "Hindu extremists" are against democracy, freedom, egalitarianism, meritocracy, the rule of law, and other such modern ideals.

3. What we are seeing in Orissa is not an *equal fight" between Hindus and non-Hindus. What we are seeing is the use of violence by traditional, rich and powerful Hindus who wish to prevent the most oppressed from leaving their oppression.. Non-Hindus are from among the historically poorest and most downtrodden.

4. Fundamentalist Hindus like to accuse Christians of "alluring" the poorest to become Christians. But the government limits the amount of money that can be brought in - and then monitors thoroughly and systematically whatever is brought in. Despite the Government's thorough control and scrutiny over the last half century, not one case has come to light where such "allure" could be shown to have been the case. In fact, people continue to become Christians (or Buddhists or Marxists or whatever) in spite of all the traditional and modern violence that Hindu Fascists direct against them.

5. But there is a more fundamental point. Inside India, there is far more money in Hindu hands than there is in Muslim, Christian, Buddhist or Marxist hands.. Why don't these Hindus improve the lot of the poorest, so that alleged "allure" by Christians loses its allure?

6. The fact that the Government has not been able to stop all these attacks against Christians (steadily increasing since 1964 and accelerating since 2000) is a symptom of a wider weakening and indeed breakdown of civil and government institutions in the country. The only sector that is booming in the country is business. Every other sector is degenerating slowly - from the police to the defence forces, from the bureaucracy to politics, from the electricity supply to the judiciary. We like to look disdainfully down at Pakistan. Perhaps Pakistan disintegrated earlier only because it is a smaller country, and it won't be long now before India disintegrates too? I shiver as I write this. God forbid.

7. However, because of this danger, I have called for a Government of National Unity (unconditionally including the Maoists) in order to stop the rot in the country, which is entirely caused by politicians (of all parties) ignoring the real needs of the country and focusing their time and energy mainly on lining their own pockets. If a Government of National Unity changes the focus to building up the country on a basis that genuinely focuses on helping the poorest, then India has a chance.. Otherwise, in my view, the country only has 2 more years before the rot becomes irreversible. Sphere: Related Content

On Facilitating delicate meetings

As I have some experience in this area, I get invited to do this sort of fraught work. Not sure why I accept!

Usually, however, it is "merely professional" matter, in which I have nothing at stake personally, and simply wish the best for the organisation concerned.

I have just finished what turned out to be the toughest Facilitating assignment that I have ever done! This was a weekend with about 15 people, all outstanding and rather experienced in their own areas, and all with strong opinions.

What made it difficult was not the strength or diversity of opinion among the participants (that is exactly what Facilitator Training equips you to handle). What made it difficult was that I myself had strong opinions on certain aspects of what was being discussed.

Naturally, my effectiveness as a Facilitator dropped every time I dropped my Facilitator's hat and expressed my own opinion (something that happened, I'm afraid!; for example, through my body language - though I regret to say not only through that!).

In this particular situation, the participants were most gracious and forgave me, and even complimented me at the end.

However, trying to Facilitate a meeting where one has views oneself is, if not impossible, certainly most tiring.

Best to go in not knowing anything about the issue or the people or the history of the matter (though that is impossible in practice).

Second best, go in with no settled opinion, at least on the issue under discussion. Sphere: Related Content

on References

I find that it is becoming a disease to ask for a reference from anyone and everyone for posting on social networks, such as Xing and Facebook.

Someone I have met several times but do not know well, has just asked for a reference as an "Expert Resource" at various international organisations.

What can one do in such a case? I could only respond: "Dear XXX, I am honoured that you ask me for a Recommendation as Expert Resource at .... But surely I must be one of the least qualified people to do so, as I have no personal experience of your work? Moreover, I have no standing in relation to such bodies, so even if I did write a Recommendation, it would have no value in the eyes of any one who has any sense, as it will be immediately obvious that I cannot know anything in relation to your work at first hand?" Sphere: Related Content

So it WAS the Maoists!

It gives me no pleasure at all to find that I was right in my comments posted on August 25, 2008:

The Central Committee of the Communist Party of India-Maoist, released a statement on September 1, saying not only that it is indeed responsible for the killing of the far-right Hindu fascist leader, Laxmanananda Saraswati on August 23, but also that it warns the VHP of “more such punishments” if the VHP behaves in unacceptable ways - i.e. "if it continued violence against religious minorities in the country”.

The Maoists even had the gall to call for a ban on extremist groups linked to the Sangh Parivar, such as the VHP, its youth wing Bajrang Dal, and right-wing Hindu political parties (Shiv Sena and the Bharatiya Janata Party).

Sadly, therefore, my assessment was correct. We may indeed take the murder of Laxmananada Saraswait as the "coming out" of the Maoists ("Naxalites").

So I reiterate my call, made in my post of August 25, for a Government of National Unity. I reiterate my assessment that India has only 2 years in which to address its key problem of institutional decline, or the country will fall to the Naxalites - as Nepal has done. Sphere: Related Content

Western investments in Russia, China and other countries without the rule of law

As has become clear over the last year or so, the West needs to systematically rethink its attitude to investing in countries without the rule of law.

Russia's actions and attitudes in relation to the BP-TNK joint venture have made it clear that the BP investment in Russia was a complete mistake.

Similarly, it will become clear in time that Western investments in China have been a mistake.

Any country that does not have the rule of law is bound to be one that, in crunch times (however defined by the ruling elite in the country in question), is going to resort to actions that are entirely illegal.

That raises of course the question of what exactly IS "legal". In the absence of a global agreement on this question, it is clear that investors must decide which definitions of the word they find most congenial - and there can be hardly any doubt that it is the European/ North American definition (for all the minor differences between them) that will find favour.

Why then do individuals and companies want to invest in countries without the rule of law? Because their own markets are more or less fully exploited, and pastures that are far away always appear greener than those that are at hand.

Emerging markets are still markets from which it is difficult to emerge in an emergency. Sphere: Related Content

So the West is indulging in empty words again - this time to Russia

I see that some parts of the West have united in a chorus to discourage Russia from considering retaking Moldova, Ukraine and the Crimea: http://www.ft.com/cms/s/0/54acc1fc-743d-11dd-bc91-0000779fd18c.html

Whether this will be any more useful or effective than the Vatican telling off the Indian government for its actions and inaction in Orissa remains to be seen. So the result regarding Russia will depend on whether the West actually stations army/ navy/ air force contingents in positions to protect places such as Moldova and Crimea.

At present, there is no sign of this happening.

Failing that, as I have already argued for some years, it is fairly clear that Russia will indeed retake these and other areas right across what was the former USSR - and possibly beyond. Sphere: Related Content

Vatican interference in India's internal affairs

I see that the Vatican has dared to publicly criticise the Indian national and state governments for their handling of the troubles in Orissa.

Quite apart from the Vatican's own mixed record in this sort of area, what India does or fails to do in terms of its own internal affairs is none of the Vatican's business.

Indians who are Roman Catholics have of course a right to express their views to the nation - as they have been doing.

But it is one of the challenges for Indians who are Roman Catholics to avoid whingeing to the Vatican when they cannot, for good reasons or bad, express their point of view persuasively to their fellow Indians.

Fortunately, Indian Protestants and the (centuries older) Eastern Orthodox have no tradition of a state (such as the Vatican) interfering in the internal affairs of India.

Nor do Muslims, Buddhists and other religious communities.

That is why the Indian government should tell off the Vatican, and nevertheless do what is right - that is, restore law and order, bring the guilty to book, and compensate as well as in every other way support those who are affected. Sphere: Related Content

Indian Express now produces a nonsensical editorial on the Orissa massacres

A friend draws my attention to the following as a "balanced" piece:
http://www.indianexpress.com/story/353621.html

I'm afraid I disagree. The IE editorial says, inter alia: "Pravin Togadia, whose political emasculation by Narendra Modi in Gujarat makes him keen on finding other hotspots, has attacked Navin Patnaik is good proof of the administration’s impartial handling of the VHP versus Christian missionaries conflicts." Just because Togadia has "attacked" Patnaik, that proves that the administration is "impartial"???

If the Indian Express means "as incompetent in the case of preventing the murder of the Swami, as of preventing the murder of Tribals and Dalits; equally incompetent in bringing the guilty to justice in both cases", then the IE is right.

However, the IE is fundamentally wrong in portraying this as a conflict between Christian missionaries and VHP. It is basically a conflict between all the poor of the area (Dalits and Tribals) who are mere pawns in the game between larger forces because the state and national governments have failed in their duty to provide education, infrastructure and an environment conducive to economic progress. Instead, the state and national governments have focused primarily on lining their own pockets (all political parties). It is, for example, highly dubious whether the huge Posco deal will produce any real benefits for the poor of Orissa.

The result is this mess, in which people on all sides rush to make whatever capital they can - expressing their frustration against whatever targets they can find. The real culprits are the politicians in Orissa and Delhi. Sphere: Related Content

"I cannot sleep tonight because of Orissa; can you, Sir?"

Though the situation in Orissa is quite complex, there is no excuse for either the state or the central governments failing to protect innocent citizens of whatever caste or creed. Similarly, there is no excuse for failing to bring the culprits to justice, whether in the case of the murder of the Swami, or in the case of the murder of tribals and other economically disadvantaged individuals and families.

Meanwhile, I have received a copy of the following message to Shri Navin Patnaik, Chief Minister of Orissa, and am putting it on my blog with the kind permission of Shri Kostka.

Many will be interested to see whether he receives any response from Shri Patnaik.

I CANNOT SLEEP TONIGHT BECAUSE OF ORISSA; CAN YOU, SIR?

Dear Sir,

I am an Indian professional who, after having spent about half my life overseas, has recently returned to work towards the development and progress of India.

When I left India the last time in 1999 it was with the haunting images of Graham Staines and his two innocent sons burnt alive as they slept in a jeep in rural Orissa.

My first Christmas back in India, last year, was against the backdrop of innocent SC and ST Christians having their churches and homes torched, pursued and persecuted, forcing many to spend cold weeks in the jungles.

If that was not bad enough, this past week, following the heinous murder of the Swami and his colleagues reportedly by Maoists/Naxalites, even worse terror has been unleashed on the hapless Christians in your state.

Surely, having learned from last December's experience, you would know better to dispatch police and para-military forces immediately to the sensitive areas.

Instead we are reading reports of your officials standing "helplessly" as Hindutva mobs rape, beat up, burn (alive), hack to pieces and just simply kill Christians as well as destroy their personal and institutional properties.

I certainly cannot sleep while this goes on; can you, sir?

Aghast, ashamed, anxious and awaiting your urgent response to turn around the situation,

Ivan Kostka
Chief Visionary Officer
FORWARD!

PS: I am praying and fasting for you and the state of Orissa. Sphere: Related Content

Companies continue to dump social responsibility while crying ever louder about it

Defined benefit pensions fall further
Aug 25 2008 22:30
About half of larger employers expect to try to get rid of their remaining liability within a decade, according to a biennial survey of 134 private sector schemes
Read more >>
http://link.ft.com/r/P75VYY/Y7C7Z/WZOR/8XMTS/2C4PV/W1/t

From the beginning, the usual "pension" was a "defined benefit" (i.e. "x" proportion of your final salary, or some such formula).

Some years ago, companies started changing this to "defined contribution" (i.e. you contribute "x", and we can't tell what that might be worth, if anything, by the time you retire).

All this while raising the range and volume of propoganda about Corporate Social Responsibility and joining organisations such as Global Compact. No wonder: talking, and joining compacts, and providing representatives to speak at conferences on the subject is much cheaper than actually looking after your retired employees. Sphere: Related Content

Does Rio Tinto know something the public does not know about China - or is Rio Tinto simply trying to "talk up" the market?

I see the following news item:

Rio Tinto predicts post-games boom
Aug 25 2008 23:57
A surge in demand from China could cause a bounce in commodities prices as restrictions on industrial activity around Beijing are eased after the Olympics
Read more >>
http://link.ft.com/r/P75VYY/Y7C7Z/WZOR/8XMTS/CXSOX/W1/t

In any case, it will be most interesting to see if Rio Tinto is right. Sphere: Related Content

Lakshmanananda Saraswati, the Start of the Naxalite-Hindu Parishad Mahayudha, and a Proposal for a Government of National Unity

There have been skirmishes between various Hindu and Marxist groups in India for several years.

Minor Marxist functionaries have been killed by the VHP and its allies, and minor VHP or VHP-ally functionaries have been killed by the Marxists of various stripes.

This weekend Marxists/ Maoists/ Naxalites killed a senior Orissa VHP leader, Lakshmanananda Saraswati, and four other VHP folk. As far as I can recollect, he is the most senior VHP-type leader that has been killed by the Maoists.

The killing of such a senior VHP figure bodes ill for India. It may be tantamount to a declaration of war by the Maoists on the VHP.

Most members of the Congress, the BJP (the political wing of the VHP) and the administrative machinery of India have occupied themselves mainly with lining their own pockets.

The business community is mostly in hock to the politicians, and provides token help to the poor while indulging in ever-more grandiose displays of wealth and opulence.

The secular NGOs, Churches and liberal intellectuals are the only ones who at least make some gestures towards helping the vast majority of the country who are poor.

Now that Nepal has succumbed to Maoist rule, while inflation has risen to intolerable levels for the average Indian, it seems that Maoists have been emboldened to think that their moment has arrived in India. They may have decided that the main obstacle to taking over power in India is the VHP and its allies.

I therefore fear more attacks on VHP personalities as well as on the general political and administrative machinery in India.

There is no military solution to the Naxalite/Maoist problem in India. The only solution is for all right-thinking people to get together, form a government of national unity and invite the Naxalites to join unconditionally.

What should such a Government of National Unity do?

First, it should apologise to the poor for having focused on looting the country (our brown sahibs have looted the country much more effectively in the last 60 years than the British did in some 350 years)

Second, the new Government should set up a Truth and Reconciliation Commission under internationally-known personalities (including from South Africa) to identify the most corrupt people in the country - and to work on agreed actions (including restitution) which would result in their rehabilitation as "normal" citizens ("deshbhakt" instead of "deshbhrashtthh").

Third, none of our 5-year plans (except the First) focused on improving the lot of the rural poor India. A new programme of extensive deregulation combined with genuine national development needs to be conceived and implemented concentrating on improving the lot of the average Indian - who still lives on the equivalent of US$2 a day while having dangled before the eyes the mega-mirages of Bollywood and the monstrous realities of Indiagate.

If we take the murder of Lakshmanananda Saraswati as a wake-up call to the nation, we could still have a solution that can work for the whole country. It is the only solution that I can foresee to the rise of Maoism in India.

My forecast is that we have two years in which to address the issue, or the challenge will be beyond us. Sphere: Related Content

Resignation of President Musharraf of Pakistan

An opportunity has been presented to Pakistan by the resignation of President Musharraf.

The question is whether the country's political leadership will seize the opportunity to build a national consensus to lead the country away from Islamism, tribalism, lingualism, terrorism, corruption and the distinction between "true Pakistanis" and "immigrants from India" (i.e. at the time of partition from India, over 60 years ago!).

Given the history of the country, I am doubtful.

But my prayers and best wishes are with the country - and I hope that all Indians will pray and offer their best wishes to a country whose instability and lack of progress does good neither to the citizens of Pakistan nor to the citizens of India. Sphere: Related Content

Indian theories of Karma as one explanation for the persistence of corruption and the failure of the rule of law in India

In Indian thought, karma is considered to be of three kinds : (1) prarabdha - i.e. karma which has already started bearing fruit; (2) sanchita - i.e. accumulated karma, which will bear fruit in the future, and (3) kriyaamaana karma - i.e. that which will be performed by us and which will bear its own fruit in future.

When a person becomes "spiritually liberated" (or attains moksha or nirvana) in this life, the person ceases to generate any further karma as, at the moment of enlightenment, all sancita karma is destroyed - though the person continues to work out her/ his prarabdha until death.

However, according to some commentators a jivanmukta is liberated from all the three kinds of karma at the moment of liberation.

Whichever explanation is followed, it is not entirely surprising that spiritual leadership and moral leadership do not always go together.

That divorce of spiritual and moral is essential to understanding why corrupt spiritual leaders cozy up to corrupt political leaders rather than challenge them - and why the rule of law fails in our country.

That gap between spiritual and moral also explains why movements such as VHP and BJP (which ought to offer some hope) have so far largely failed to do so, focusing only on manipulating religious feelings to bring to leadership people who are largely spiritually and morally bankrupt. Some VHP and BJP leaders are of course better than others. And this is also the case in other political parties. But that is the broad-brush picture of politics and spirituality in our country.

It is also the broad-brush picture of business and morality in our country - though the most international of our businesses have, since liberalisation, begun to understand that our traditional cronyist ways of doing business will not enable us to succeed in the global arena.
That is why, as Indian businesses begin to have international success, they tend to become less and less traditional, caste-oriented and corrupt.

I do not mean that continued liberalisation by itself will make India as corruption-free as northern Europe. I do mean that liberalisation has helped and will continue to help make at least Indian business less corrupt, as it is more and more exposed to international trends.

However, a re-connection of morality and spirituality( such as happened in Europe with the Reformation) is essential if corruption is to be reduced in India.

And that is only possible with the rejection of Advaita and such related philosophies and practices. Sphere: Related Content

How far will oil prices (and other commodity prices ) fall?

The markets are now very disconnected from realities and are based on "sentiment" or "herd instinct".

I predict therefore that the oil price will fall to around $50 before recovering (at some point in the future) to $70-80. I don't anticipate prices arising to over $100 again for some considerable time.

There will be similar drastic falls in commodity prices before a parallel recovery.

How long will it take for the global economy to recover? It will not start recovering earlier than say 3-4 months after any actions by the new US President (and her/his team) - assuming that such actions are effective.

Before any recovery can happen, it is necessary for the global economy to clean out "excess liquidity" (i.e. absorb the money that has been printed without regard to the total national value of goods and services, most notably in China and the US, but also by most other countries, since the dot.com bust).

In other words, I don't see a recovery before Summer 2009 at the earliest. Recovery should, in fact, take much longer - but the global economy has stopped responding to any "should" and has become entirely irrational.

Much more fundamental changes (and of the right kind!) are necessary for the world to see sensible and stable economic growth, but whether the changes that will come are of the right or wrong sort remains to be seen. Sphere: Related Content

More on Bulgarian corruption now aided and abetted by the EU

Here is further information from my correspondent:

"It’s interesting that there are EU funds available for smaller businesses. But the universal experience has been that there is not only a vast amount of effort involved (in getting hold of the funds) - the process is effectively filtered by the current government, (so that) it’s almost impossible to get the required approvals without involving a Minister or Deputy Minister in the process financially.

Consequently these smaller business no longer bother to participate and generally believe that these funds will never find their way into the “real” economy and will be largely stolen in one form or other by the associates of the current government. Business seems to be doing business in areas which don’t involve the approval of the State we have two parallel system one fully dysfunctional, corrupted from within, and the other (real estate etc) proceeding apace. The latter however cannot create deep economic benefit or long lasting benefit - the country needs production and it’s hard to see (that that is going to develop).

Yes, it really is depressing. I just cannot see resolution of this. If the EU renews the funding flow to Bulgaria this would be almost criminal. The EU needs to flex what muscle it has. I thought that Accession would have been good for Bulgaria - I now believe that it might be in the very long term but in a reasonable timeframe it would have been better for the EU to have withheld membership for 2 years. This would have seen the real implementation of the Laws passed. The Bulgarians just enacted and “normalized” various regulations as a ruse - they never had any intention whosoever of auctioning these law. How could they? They would have to act against their own interests - and as we can see they are NOT willing to take action against the obvious criminal elements in Bulgarian Society and as a result Bulgaria is sinking deeper into the mire of immoral business practices." Sphere: Related Content

How Norms-Based is the EU?: The Case of Bulgaria

In view of how consistently the EU claims to be norms-based, the following private email from a friend makes sobering reading:

I was thinking of you this morning. The reason was my rumination on the state of the Balkans - and your steadfastness about morality in business. So obviously the rumination was good.

Seems to me that business here has become a lot more difficult since Bulgaria joined the EU. There was much “structural change” and much “legislative reform” but this was all a mask. There has been no real reform - no change - excepting for the negative. Corruption has become worse not better – it has become more systemic and now the Ministers are even more brazen in their requests for an interest in all deals of significance. Seems that nothing now gets done in Bulgaria without an interest to a politician. It’s pretty dismal image and I can see no end to this.

I still however stand by my principles and just can’t bring myself to participate in such practices. I feel that local business and probably much foreign business has formed the view that to do business in this environment you just have to be corrupt. XXX is much the same - could lead this country - has the drive and determination but, after having spent much effort, can’t participate in the necessary corrupt practices to get into the Parliament as XXX says she has morals - morals from the old times. She is precisely the sort of person that this country needs - I say this without hesitation. Unfortunately I see no others of merit - they are all compromised - all corrupt.

An interesting interlude was had the other day. I was doing 83 kmph in a 60 kmph zone - just did not see the sign. The police officers did not speak English. They asked for money - about USD50. Naturally I refused to pay - they said we would have to go to the court - I was actually pretty abusive - they turned up with a piece of paper with amount of money written on it. I told them to do what the law said and indicated that if they asked for money again I would go straight to the prosecutor’s office and lodge a formal complaint. Along with a few expletives they would know but would never have heard from a motorist before. After some argument I was a little too much for them and they said go go.

This is the Balkans. I can’t see a resolution - the EU has not the political will to rein in a member state in any meaningful way. The Government is managed by old commies and the police and the state secret service and they really do still pull the strings - there is a huge amount of money laundering from all sorts of illegal activity - prostitution, drugs, illegal import/export, armaments. I also suspect that Bulgaria has become a funnel for the laundering of money from Kosovo and Serbia and a channel into the EU for drugs. I have no idea how this will improve. It really is a most dismal picture here. "

My response to him was that as long as people such as he are prepared to take such matters to the court of public opinion, there is always a hope that things will in fact change for the better.

We would need to start getting worried only if people and institutions stop being vocal about such issues. Sphere: Related Content

How much is China opening up?

Today's Financial Times (London) has a story which seems to indicate that at least part of the ruling elite is continuing to resist any opening up:

China seeks to muzzle quake victim parents
Jul 01 2008 23:31
Chinese security forces are pressing parents to abandon demands for a full investigation into why so many schools collapsed in the May earthquake in Sichuan
Read more >>
http://link.ft.com/r/4RNQTT/7D5QR/R0HE/N3OEI/B4GF1/RF/t Sphere: Related Content