South Asian Socialism

hamidm, Pardesi, Behram1,

All this chart means is that if your 1 US$ was worth 100 cents in 1982, it is still worth about 97 cents. Purchasing power is a function of interest rates minus inflation and is only eroded by inflation if there are `negative` interest rates, and NOT if the `Real` interest rates remain positive throughout. This is the case in USA. The US Fed has always targeted domestic inflation very effectively as its top priority.

Re Behram`s point re `huge credit liability`, this is also an imagined myth. Let`s examine his issue.

The total consumer credit outstanding as of March 2006 is $ 2.16 trillion. That looks huge, but dissect it and it turns out to be rather puny. The total number of US households as per the 2000 census is 105.5 million. Do the simple math for household debt and it comes to $ 20,500/- per household. Is that too much? The 2004 median household income was $ 45,000. The average US household thus owes less than half of their annual earnings.

Let`s drill a bit more into this consumer credit stuff. Out of the total $2.16 trillion, the `revolving` debt is just $ 806 billion i.e. those of you guys who pay only the minimum on credit cards and rollover the rest. The balance of $1.36 trillion is in home mortgages and auto loans i.e. non-revolving and less susceptible to default. So where`s the consumer credit bubble?

The fact is, the US economy is immensely strong. Instead of arguing `it is not`, the question that should be asked is `how did it become to be so?`.

RE#251,

Arjun,
u have a great sense of humor :-))))

u misunderstood the word ``work force``,

in Paki ``work force`` does not mean what u think.......




http://www.nytimes.com/2006/05/18/world/africa/18somalia.html


FOREIGN Islamist FIGHTERS Are Reported in SOMALIA


By THE ASSOCIATED PRESS
Published: May 18, 2006


NAIROBI, Kenya, May 17 (AP) — A secular alliance of warlords battling fundamentalist Islamic militias in Somalia said Wednesday that the militias were being strengthened by FIGHTERS FROM from the Middle East, PAKISTAN and elsewhere........


``Foreigners were fighting alongside the local terrorists and were killed,`` said Hussein Gutale Ragheh, a spokesman for the alliance.............................

Before the usual suspects start voicing their envy by saying the poor Indians are being exploited, you should know that Pakiland`s prez is begging for Pakiland to produce exploitable pakis...albeit without anything to show for it..

From the mouthpiece of the evil corporatists, the Wall Street Journal..

`Sunnyvale, You Have a Problem`
India`s Latest Outsourcing Frontier
Is Servicing Computer Networks,
But Hurdles Remain
By RASUL BAILAY and PETER WONACOTT
May 18, 2006; Page B2

NOIDA, India -- In the wee hours of a May morning, the computer system for Advanced Micro Devices Inc. started spitting out alerts. The technician taking note was nowhere near AMD`s computer servers in Sunnyvale, Calif., or Austin, Texas. He was working the evening shift from an office cubicle in this suburb of New Delhi.

The latest wrinkle in outsourcing has come to this: The network-computer guy working for American and European companies is an Indian engineer -- working in India. Industry executives think the market for long-distance monitoring of computer networks, dubbed ``remote infrastructure management,`` could be worth tens of billions of dollars, as multinationals try to cut costs and Indian outsourcers tighten security checks on corporate data they manage.

Growth is expected as factories become more computerized and remote services expand to include controlling plant temperatures from afar and even monitoring who enters and exits the premises. ``Theoretically,`` says Azim Premji, chairman and founder of India outsourcing company Wipro Ltd., ``anything on a network can be managed remotely from India.``

The market is still small. Revenue for Indian outsourcing companies from remote infrastructure-management contracts ranges from $300 million to no more than $1 billion a year, according to industry estimates. But the market`s size is set to swell as foreign companies look for ways to slash operation costs by shifting information-technology services abroad. India`s software lobby, the National Association of Software & Service Companies, or Nasscom, estimates that as much as 60% of the business of managing corporate IT systems could be handled from abroad, creating a $55 billion market.

U.S. companies led by International Business Machines Corp. and Electronic Data Systems Corp. in the 1990s pioneered the practice of managing IT systems remotely and still dominate the field. But Indian companies are gaining ground, partly by pricing services as much as 40% cheaper than the likes of IBM, says Vineet Nayar, president of HCL Technologies Ltd., one of India`s biggest outsourcing companies by revenue.

IBM has responded to these threats by beefing up its operations in India and playing to its global strengths. With nine locations around the world and 12 years of experience, IBM is competing on more than just price, says William J. Ireland, an IBM director in Bangalore for global-service delivery for India. IBM`s prices for remote infrastructure management, he adds, ``are extremely competitive.``

Tapping Indian outsourcers for managing computer networks still marks a big leap in faith for foreign companies. Although Indian engineers have long been hired to produce specific software projects or to handle various chores on IT systems, they generally haven`t managed entire networks or production sites before. For many multinationals, this type of outsourcing is loaded with a big question: What is to prevent proprietary information from falling into the wrong hands?

Last year, Indian police arrested employees of outsourcing company MphasiS BFL Ltd. for allegedly stealing $350,000 from the accounts of four Citibank customers in the U.S. Though security lapses also occur in the U.S., the incident fanned fears that data theft could stem from inside Indian software firms. In a recent report, researchers at Gartner Inc. predicted these security concerns would have a detrimental effect on providers` ability to capture new business.

India`s software companies have taken a number of steps to reassure potential customers. Nasscom has trained Indian law-enforcement agencies to detect data theft and is building a database of employees at software companies to make tracking them easier if they commit crimes. The database will include a person`s date of birth, education, family background and a biometric, such as a fingerprint.

``The goal is to reassure customers that their data will be taken care of, perhaps even better than if it was at home,`` says Kiran Karnik, Nasscom`s president.

Shobhit Joshi at HCL is at the front lines of these new computer defenses. The 27-year-old team leader is one of 200 people at HCL who work from a warren of office cubicles monitoring AMD`s computer network from thousands of miles and several time zones away.

When he sees an alert pop up on his flat-panel computer screen, he can usually tell what city it came from. The alerts typically turn out to be false alarms, but they signal potential dangers such as overloading of a server or possible breaches in a network firewall from virus or hacker attacks.

If a genuine threat emerges, he will try to fix it immediately. If he can`t, he will forward it to a group within HCL that specializes in network capacity or security issues. The final option is to alert HCL experts on call.

``We can do everything from here,`` says Mr. Joshi. AMD didn`t respond to requests for comment on work it has outsourced to HCL.

Led by the likes of HCL, Indian companies are making market inroads. In January, HCL signed a multimillion-dollar deal with European retailer DSG International PLC to run its computer systems.

India outsourcing titan Infosys Technologies Ltd. says its infrastructure-management unit has been growing 100% annually from its inception four years ago and is expected to grow as much as 80% a year over the next three years, according to Priti Rao, vice president for infrastructure-management service at Infosys.

I believe this what Behram Gore , after whom he is named, & whose cousin Al Gore is now contemplating to re-enter the Kaakh-e-Sufaid is trying to tell us.

The system of , as it has now become, & which he has aptly termed ``corporatism``, has become incestous & self-serving. The legal-framework to watch-dog over them has , perhaps deliberately, been designed to close the barn door. It is a mirrror-image of the
elected bodies who instead of serving the constituents end up getting lobbied & serve as those who join in the gluttonous feasts.

It is the same syndrome as `` Jobbery`` a term the Quid-i-Azam used to warn the nation about in his, probably, the first address to the nation. The feasting on the nation treasury by those who are supposed to be the very custodians--the bureaucrats & the army.

Prashaad LaDDoos are never eaten by idols. They are consumed by prohats, mahints & Pundits ( read: Chairman, Directors, and CeOs). A corporation is a phantom ``citizen`` created to enjoy all the benefits of a citizen yet cannot be jailed or executed. Unless & until this personal liability exemption is not removed it will continue to rob the nation.

1. All associated with the corporation --read partnership of investors with a label, must be held personally liable.
2. There should be no tax, hence no deductions, either on corporations but only on Individual`s assets & expenses NOT incomes.
3. Only short-term consumable (food clothing), depreciable, & production-oriented machinery & equipment , public projects etc should be exempt from Expense tax.
4. A very stringent credit-rating system for individuals who want to launch to raise money must be publicised in the prospectus alongwith his public service record & genuine community work, if any. Simply making good profits should not be the ONLY criteria.

Voodo astrology witchcraft etc are genuine arts whereas Economics, Psychology and other such sham subjects would be nothing if they are not propped up by licenses & registrations--and jobs (jobbery?). The sunni/shias of economis led by Friedmans & Samuelsons have extinguished the lamps of many a households.

O , purveyor of economics,what else is there in your books, except the chicaneryof rationalising greed & exuses for a blood-bath.........Allama Iqbal.

P.S: I might have rambled, but it is not a rant.:)

#247 behram1

No. All it means is that if I go to buy same basket of goods (e.g., bread, car gas, medical help) it will cost me about twice the number of dollar bills. Some goods have become much more expensive (e.g., medical) while others might not have appreciated so much (e.g., bread). 3-4% is about average as tracked by the government. That`s why social security payments for elders have gone up by similar amount every year.

Whether americans borrow, steal or earn those dollars have nothing to do with it.

Regards.

Pardesi, Zeemax,

Do purchasing power take into consideration the huge credit liability on most americans?

Just curious.

Respectfully submitted,

Zeemax, Khurram,

It seems that some thing is not right with the posted chart.

Inflation has been running at approx 4% from early 80s to early 90s and at 3% or so after that. So, cumulatively dollar has lost at least half of its purchasing power since early 80s.

http://inflationdata.com/Inflation/Inflation_Rate/HistoricalInflation.aspx

Masadi,

OK. One more time, you can be fickle minded as usual, and escape the intelligent enlightened crowd at chowk. I am unable to figure you out, or what your national origin is? Are you a mohajir or an arab? Why does that matter? To have a better understanding of your interacts with you, and also to figure out what is your level of rational mind? I know that you are somebody who constantly writes about that Power Elite book. (granted not on this board). Heck, I picked it up the other day myself, and found it just some commie stupidity.

Now, you have suggested that you are not a communist, and you are not a fundoo. So, what are you? Do you want me to consider you as an intellectual? OK, I will consider you as an intellectual.

But, then again you become religious. You can not be both at the same time. Or can you? Being an intellectual with imbedded religiosity? or a religios person with imbedded intellectual ability?

You decide.

Respectfully submitted,

Re: # 243

... but you have a lot more dollars than in 1982 ...... hopefully if you had a 100 dollars then, you have more than 103 now ! ....... if zeemax is right with his graph than i should be filthy rich - how come i am not ?........ maybe it is because i, like all americans, am spending money like a mad man - all those lattes at starbucks add up, you know ..........

Re: # 243

... but you have a lot more dollars than in 1982 ...... hopefully if you had a 100 dollars then, you have more than 103 now ! ....... if zeemax is right with his graph than i should be filthy rich - how come i am not ?........ maybe it is because i, like all americans, am spending money like a mad man - all those lattes at starbucks add up, you know ..........

Re: # 242 zee
[... Dollar has only lost 3% of its `consumer` purchasing power...]

Dollar has lost purchasing power?... are you sure that graph is correct?... I thought americans are buying more and more stuff ever before...

#240 by khurram

Doesn`t that mean that the purchasing power has been falling every year?

No. The negative numbers mean % change over the base period which is 1982-4. So if the number is -3 now, it means Dollar has only lost 3% of its `consumer` purchasing power (not asset prices) compared to 1982-4.

Isn`t that amazing?

hamidm says that all economics is voodoo. this is largely true. traditional economics (classical, keynsian, neo-classical, monetary) has been rendered largely obsolete due to the information revolution - while classical economics dealt with limited resources that can be consumed, the information resources can be consumed and saved. as Peter Drucker wrote in one of his books, the economics textbook for the information age has yet to be written.

No doubt some brilliant soul like masadi will write that textbook. (just kidding, dont get offended masadi).

Oak and behram: thanks for your responses. I look forward to reading them a bit later when i have mroe time (since i see they are a bit lengthy), and if I feel the urge will also respond to them.

Zeemax #236,

Perhaps you can educate me on how to read this chart.

Looks like the y-axis says ``12 month % change`` and it is all negative numbers. Doesn`t that mean that the purchasing power has been falling every year?

...... all economics is vodoo economics .......

...... so what if the interest goes up to 16% ...... been there, done that and life has always been better ...... in 1981 i bought my first house at 12%, walked into a bank with 5000 dollars and walked out with a 16% cd and a color tv ! ..... i still have that tv as proof that life keeps on getting better regardless of the interest rate .......... next time when i walk out of a bank with a 20% cd, i hope to get a 40 in plasma hdtv !

......... and if toyota takes over gm, it wil be just fine by me - unlike gm, they pay their bills on time, give you nice presents and wine and dine you, and as long as you are not a woman you are safe working with the japanese !

.......at the end of the day, the business folks - corporatists, capitalists, venture capitalists, behram`s beloved entreprneurs and the private equity firms - and not the economists determine what really happens ..........