On Mon, Feb 20, 2012 at 6:32 AM, Deepak Shenoy <[email protected]> wrote: > Technically everyone's manipulating currency. China's done it for > years, India has been doing it until Subbarao decided in 2010 that > they won't intervene, a strategy that lasted exactly one year: Last > December saw the biggest RBI intervention to strengthen the rupee > since the Lehman disaster. (and the second highest ever)
Oh sure, the US is just the biggest manipulator by far with more than likely the longest history of doing so. Minor irony then that they still pressurize China as if it were the only one doing it. http://www.nytimes.com/2012/02/16/business/global/appreciation-in-chinas-currency-goes-largely-unnoted.html The falling USD has put a lot of inflationary pressure on China, and it's something China has to take mostly lying down for the moment. > Europe is doing things far worse than the US now, accepting even > toilet paper as collateral to bail out the peripheral economies. This > is not to defend the WB. WB in fact drove some of the attempts to > manipulate by suggesting, in the asian crisis of the late 90s, that > asian economies should please hoard dollars and euros as "forex > reserves" which will help them tide over moves later. What that did > was just make the eurozone and America borrow a truckload more at > cheap prices and eventually, we're here. A strong Euro and a weak dollar will see America's economic dominance into the next decade - or at least that's the driving belief behind all this. The Fed's emergency line of credit to the ECB is show that everything that can be done, will be done to make sure the Euro stays. When it's all invented money anyway, it's just a matter of loosening the right economic screws to restore confidence. > > That said, to Manmohan's credit, his leadership has seen the > > introduction of NREGA (National Rural Employment Guarantee Act) and > > the RTI (Right to Information) Act, both of which are hallmark steps > > in advancing the social net and democracy. > > RTI is useful, but NREGA? All we're doing is helping people do > nothing. You can't use a single piece of machinery in an NREGA > project, no? How is that useful in any way? Btw, I'm also for removing > tax concessions on housing, exports and fertilizer/oil subsidies. I > think NREGA, like those, are evils and in the context of thinking > beyond five years at a time, retrograde. As a social net the concept is undoubtedly good. As far as implementation goes, I have only heard mixed reports. There is evidence that NREGA is reducing deaths due to poverty - in many parts of India untouched by the economic miracle NREGA is the only source of income which doesn't depend on the local landed and wealthy. It's a source of calories if you will. Still the cases of fraud and misappropriation of funds is scary { 27 JAN, 2012, 02.08PM IST, NITIN SETHI,TNN Poor labourers pledged Rs 100, get Re 1 for day's work under NREGS http://economictimes.indiatimes.com/news/politics/nation/poor-labourers-pledged-rs-100-get-re-1-for-days-work-under-nregs/articleshow/11645672.cms } Not everything is about better economic sense - economic policy has to be tempered with humanity and kindness - the latter words are strange concepts that aren't uttered very often in the corridors of power. > > Real wages are falling in India like elsewhere in the world that has > > swallowed the pill of economic progress. That the idli is being > > replaced by the McAlooTikki if of little consolation. > > Real wages aren't falling in India at all, no matter how you look? Our > per capita income is up, our wages in general are up and afaik, more > than inflation. Do you have a source I can look at? At the macro economic level you maybe right - the economic dashboard numbers are all trended upwards. There are new income opportunities where there were none, GDP/PPP indicators are all higher now than they were a couple of decades ago. However it just means that gains in certain sectors are masking massive failures in others - the real wages epidemic is somewhat unnoticed because it has just not fallen at the same rate as the US/EU/JAPAC - so it is less visible. { 25% of India Inc reports flat or drop in real wages PTI Jan 17, 2011, 02.54am IST http://articles.economictimes.indiatimes.com/2011-01-17/news/28428026_1_wages-freeze-indian-companies } { The truth behind rural wages in India Real wages in the hinterland have stagnated despite zooming economy Akshat Kaushal / New Delhi Oct 14, 2011, 01:46 IST http://www.business-standard.com/india/news/the-truth-behind-rural-wages-in-india/452453/ } (BTW, I am not denying the genuine economic progress that has happened in some places, there are definite improvements in specific industry segments and social pockets, but so too there are other sections of society that have been adversely affected by inflation and urbanization.) If you are a bank employee at a nationalized bank, or a government employee or otherwise salary scale bound you will find that real wages haven't kept up. You can no longer buy a flat within central parts of any major or even minor Indian city on a government salary, or enough gold for an Indian wedding. Land and gold prices are important because they are true sources of wealth - they will persist even when the cash economy fades in importance or undergoes a crisis of confidence. Or for example, if you are a landless farmer, or a tribal your real wage has practically nose dived. http://en.wikipedia.org/wiki/Farmers'_suicides_in_India I should have expanded on the McAloo Tikki comment, it was more a sociological statement than an economic one - urban population density, urban poverty, urban environmental devastation, rural population flight, farmer suicides, divorce rates, nuclear families are all staggeringly higher now than they were in the 80s, and 90s. That is not very good progress is it?
