India through students' lenses

* Thanks again for everything! The trip was amazing!
* Thanks for all that you did for us on the trip!
* Thanks for a fan-tabulous January!
* Thanks again for everything.  It was a great trip and an
experience I will never forget!

**From LM**
Flipping over to how globalization has impacted India's economy you can
visually see how it has helped,and hurt them. Globalization has created
job opportunities for many educated Indians. However, it is not
possible for everyone to get an education. We found out that parents
send their kids to school and pay for it. Public education is free,
but you have to pay to go to college. So, those with money get educated.
Even with free public education parents don't send children to school
because the schools are either too far away, or the child helps bring
money in to the family and they lose that source of income with the child
at school. So, on one hand India benefits from the jobs made available
to them by companies who decide to outsource there, but on the other hand
many Indians do not have the education that will allow them to apply
for or succeed in these jobs. Globalization leaves the poor class poorer
and the rich class richer.
   I believe that globalization might more effectively help the Indian economy
if the whole “trickle down economics” phenomena was actually applied. I am a
very big skeptic of trickle down economics because you rely on the morals of
company owners. Indian companies have to make a conscience effort to put money
back into the economy around them, but it's hard especially because the money
goes back to the parent country. I did not see much of an effort from the
local companies to put that money back into the area around them and
I am not sure they have much control over that. 3i said that they were helping
the economy because the government was bringing electricity to them, and
therefore the area surrounding them. It did not sound a lot like they were
doing anything consciously to help those around them though. Not to say
that all those who own companies are morally corrupt. Infosys definitely
helps those around them, but the company began in India so they're investing
in their parent country.
India is on the turnaround with all of the foreign investment they are
receiving, but we have yet to see an effort from these foreign companies to
help all of India really improve itself. I believe that when companies
begin to feel more responsible for the impact that they are making, that
India will have a better chance at becoming a developed nation. There is
a rich culture and a long history of tradition that needs to be accounted for when
looking at that impact. When these big companies outsource to India or any
other country, they need to look at the background and traditions of that
country to understand how they are helping and hurting not only the
economy but the foundation of that country's beliefs.**

**From PM**
India is a place of great imagination, entrepreneurship, and contrast. It was exciting to be able to visit India at this exciting time during its development. There were so things that I was exposed to during the three weeks we traveled. One thing that particularly struck me was India's position on the evironment. The country seemed to be dirty with trash collection a difficult matter, and recycling almost impossible. 

On one side India seemed dirty and polluted by the people who would then use the same water for drinking, yet there was much more than could be seem by the common eye. The trash that was piled up along the streets to be collected by the government was not just sitting to be collected for the landfill. At a closer look, people would come to rummage throught the piles and find things that could be reused. The cans and jars would be washed out and then sold to a shopkeeper for a few ruppees. While exploring India, we encountered such stores that would seem crazy to America's consumerism, however they were actually quite resourceful and creative.

Cans were not the only thing recycled, newspaper was also used in a very special way. It was collected and then sold to store owners for a variety of uses. Many times street venders would turn the paper into an icecream cone shape so that it could be used for corn, popcorn, or other vegitable mixtures. It was one of the most disorganized yet efficent ways of recycling. There was no centralized system of recycling, only people who would themselves recycle and reuse. It was truely one of the most facinating things that i have seen.

In a country so poor, it was such a contrast to see how environmentally friendly and conscience the people were. In hotel rooms, signs were posted to remind international guests, who were treated like kings, to turn their lights off before they left their rooms. However, very geniously guests required to keep the key in the slot to keep the lights turned on. The inconvience for guests charging electrical equipment while out of their rooms was much small than the amount of electricity saved. It was not just hotels that were trying to save electricity, but the entire country. During our visit to Visteon, I noticed that the company had cleaverly created slots in the ceiling so that light would come into the factory naturally. There were not lights on at all. The use of skylights is someting that even developed countries could learn from India. It was even better than solar or wind energy.

The country does have a plan for its energy problems and shortages. It is planning a mix of nuclear, solar, and wind power. In the future, clean energy should replace dirtier methods. The only thing stopping India from developing clean is capital. It still doesn't yet have the money to use much green energy, but its goals are working towards that. In India, it is hard to forget about the impact one person makes on the globe because of the sheer number of people there are, and because of the amont of trash visible everywhere. I am excited to see India's growth. Because India is developing in the 21st century, it might well surpass America in ecofriendlyness one day.

Ever-widening circle: of Greed, Corruption, and Devasation

A few days ago, I met some bright MBA students at a highly regarded graduate school in India. These students used the word "recession" in describing the Indian economy- they were quite apprehensive about the job market when they graduate in a year. Their attitude was quite downbeat, considering that India's GDP is estimated to grow in excess of 5% this year. In addition to the global macro factors, domestic spending seems to be curtailed, and corporate scams like the one involving Satyam are being feared. This was also reinforced during my discussions with academics and business leaders in India.

This experience ties in very well with the U.S. storyline. Some of my students who were promised internships for the upcoming summer are being informed that the offers are being withdrawn. Large firms like Starbucks and Boeing are doing RIFs (Reduction in Force). In addition, companies like IBM are stealthily doing layoffs. Microsoft, Intel and others have added to significant layoffs announced this month.

The root cause of these ailments to be addressed, rather than propping up the patient through infected band-aids. Highly corrupt, immoral leadership at the top of organizations-both in the private sector and in the government, is the source of these problems. For instance, rather than working on serious plans to educate and develop the workforce, Obama's team is working on creating a bank to take on the bad assets of other banks- effectively telling shareholders of Wall Street that their noble actions are to be blessed. Obama's actions thus far have been disappointing on this front, adding to the notion that his administration, like others, is morally defunct. More news is filtering out that managers of AIG, BoA//Merrill and others have fattened their wallets through the largesse of the government and the public taxpayers. One of the exports from the U.S. to other countries has been this type of greed and corruption.

The road to recovery, as reflected in the infrastructure of the U.S. and India, is tortuous and filled with huge potholes that can crater even a good vehicle.

Family and Friends Plan-Work less, Make Less, Care Less

Back on December 11, in my post Lousy Economy deserves a French Riviera Vacation I had written that "With companies continuing to cut labor, it is just a matter of time before alternatives like shorter workweeks and work without benefits become attractive options when faced with the option of no work. Perhaps people will work less, earn less, and be happier..... The one complication is the standard of living, or the ability to afford certain lifestyles."

Today, the NYT carried an article titled "More Companies Are Cutting Labor Costs Without Layoffs" which states that "A growing number of employers, hoping to avoid or limit layoffs, are introducing four-day workweeks, unpaid vacations and voluntary or enforced furloughs, along with wage freezes, pension cuts and flexible work schedules. These employers are still cutting labor costs, but hanging onto the labor. And in some cases, workers are even buying in. Witness the unusual suggestion made in early December by the chairman of the faculty senate at Brandeis University, who proposed that the school’s 300 professors and instructors give up 1 percent of their pay. “What we are doing is a symbolic gesture that has real consequences — it can save a few jobs,” said William Flesch, the senate chairman and an English professor.......The rolls of companies nipping at labor costs with measures less drastic than wholesale layoffs include Dell (extended unpaid holiday), Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada casinos (four-day workweek), Honda (voluntary unpaid vacation time) and The Seattle Times (plans to save $1 million with a week of unpaid furlough for 500 workers). There are also many midsize and small companies trying such tactics....In San Francisco, a Web design firm called Hot Studio laid off a handful of workers when the dot-com bubble burst in 2000. But the company’s owner, Maria Guidice, said the tactic was painful, and she did not want to repeat it. This time, her first step is to take away bonuses — for the first time in the company’s 12-year history — and instead give people paid time off over the holidays. “In 2000, it was like ‘cut the heads,’ ” she said of the ethos of the era. This time, she says, it feels different. “Our No. 1 priority is to keep people employed and to do that we’re going to bank the money and keep it for when we need it,” she said, adding, “I know some people are super bummed, but they understand we’re trying to keep the work force intact.” Several employees at Hot Studio said they did not mind the policy, particularly as they have heard of layoffs elsewhere in the economy. “People feel they’d much rather have a job in six months than get a bonus right now,” said Jon Littell, a Web designer......"

While I have seen this coming, being right does not make it less painful!

Nightmares about 4 more years of McBush...

Heard on NPR today that over the past few months, GWB had added a trillion dollars to our national debt. Yet, as he once said, he likes to go to bed early, before 9 PM, no matter what the circumstances.

The economy has serious structural problems, created over many years of crooked administrations rigging the system to overwhelmingly and unethically favor the investor class. If Obama is elected President, the best case scenario would be a status-quo or mild improvement in the economic situation over the next four years. Debt will go up, but we might likely see some infrastructure improvements. If McBush is elected, the situation would deteriorate much further, with much higher debt levels, and perhaps another war to jump start the domestic economy.

On another note, the "moralistic" crooks who support the right to bear arms, and the right to kill, but then strangely oppose a woman's right to choose, have some more deaths to answer to. Recently an 8-year-old boy who accidentally shot himself to death Sunday had his father's permission to participate in a machine gun shoot at the Westfield Sportsman's Club. Christopher Bizilj, of Ashford, Conn., was firing a 9 mm Micro UZI machine gun at a pumpkin around 2 p.m. when he lost control of the automatic combat-type weapon and shot himself once in the head. He died at Baystate Medical Center in Springfield. (from

Yesterday, during Halloween, a child was killed in South Carolina while he was out trick-or-treating.

Out of Breath with the BnB 1-2 Punch

Today, Dr. Ben 'Helicopter' Bernanke and President Bush both talked about the economy, albeit at different venues.
According to the NYT, "In testimony before the Senate Banking Committee, Mr. Bernanke avoided the word “recession” in characterizing the current economy, noting instead that consumer spending and exports were keeping growth “at a sluggish pace” while the housing sector “continues to weaken.”

He added that spending for personal goods had “advanced at a modest pace so far this year, generally holding up somewhat better than might have been expected given the array of forces weighing on household finances and attitudes.”

While the risks to the overall economy were still “skewed to the downside,” he said, inflation “seems likely to move temporarily higher in the near term.”"

The same article quotes Mr. Bush as saying in a press conference that "“My hope is — is that people take a deep breath and realize that their deposits are protected by our government,” the president said. He added that economic growth “was not the growth we’d like” but expressed confidence that the country would overcome “a time of uncertainty.” The nation’s troubled financial system is "basically sound," he added." When a reporter asked what the short-term advice for Americans was in light of the high gas prices, Bush's main response was "There is no immediate fix. This took us a while to get in this problem; there is no short-term solution. I think it was in the Rose Garden where I issued this brilliant statement: If I had a magic wand -- but the President doesn't have a magic wand. You just can't say, low gas. It took us a while to get here and we need to have a good strategy to get out of it."

While Dr. Ben, along with Hank and Cox, is taking extra-ordinary measures to bail out and lend a helping hand to the financial and quasi-financial institutions with public money, Mr. Bush thinks that people should a deep breath and keep the faith. Perhaps he should add that by singing 'Don't Worry, be Happy" everything would be all right.

Sliding into the Future

Oh baby baby it's a wild world,
it's hard to get by just upon a smile.
..............Cat Stevens

How many roads must a man walk down
Before you call him a man?
Yes, 'n' how many seas must a white dove sail
Before she sleeps in the sand?
Yes, 'n' how many times must the cannon balls fly
Before they're forever banned?
The answer, my friend, is blowin' in the wind,
The answer is blowin' in the wind.
.........Bob Dylan

As one looks back over the past seven years there is plenty of evidence that suggests that the Internet bust, 9/11, the subsequent technological, financial and military developments have, in the language of Intel's Andy Grove, created an inflection point. This piece will take a stab at laying out the landscape for the next decade or two, especially from a US perspective. The rationale will be developed in subsequent pieces.

The forecast. (CAUTION: the reliability or the error rate is about the same as that of your local weatherman or weatherwoman).

#1. The median standard of living of living in the United States will come down 'substantially.'
#2. The role of the US as the world's police force will diminish.
#3. Real Inflation, not the bogus ones reported by governments, will go up substantially.
#4. Significant new business models will come from other countries, along with new managerial systems.

While some of these changes have been going on for the past few years, this blog will examine the pace of change and what factors drive it.