Monday, June 17, 2019

The US Economy Is In Trouble

The numbers are rosy. The unemployment rate is officially the lowest it has been in 50 years. The stock market is riding high. The growth rate last year was approaching 4% and even now is fairly solid. What could go wrong? Those numbers hide the fragility.

The unemployment numbers are so low because a lot of people have simply stopped looking for work. The actual unemployment rate in the US might be more like 12% or 15%. Nobody really knows. The numbers for low employment are structurally cooked.

The stock market is riding high just like in 2007 the real estate market was riding high. This is the sugar high from stock buyback programs. The super rich, flush with cash, finding no productive use for the money, are simply buying back stocks. The corporate interests are in this vicious cycle. That is further exacerbating inequality.

It feels like the US and the world simply kicked the can further down the road when 2008 happened. No lasting solution was put into place.

The US deficit and debt are real problems. In the depth of 2009, Obama struggled to put together a trillion dollar stimulus package. I think he asked for more but got only 700 billion. These days the US runs a trillion dollar deficit as a matter of fact. What was thought of a big deficit in 2009 these days is simply routine. A massive budget deficit has become business as usual.

The debt is so big and getting bigger, it is not even talked about. It has been archived in the denial file.

No, I am not talking about Trump. He never was the solution. A lot of people who have stopped looking for work were people who thought Trump was it. And then they realized they have been duped. And in shame, they stopped simply looking for work. It is not a good feeling to realize you have been duped.

I am talking about economic theorists and political theorists and thinkers in general. Where are the economic theorists at? Abstract thinkers like Paul Krugman and Raghuram Rajan do show up in the mainstream media. But I don't see them offering solutions. The very paradigm needs to shift. Big thoughts are needed. The band-aid remedies are as misleading as Trump's demagoguery. There is a poverty of imagination.

Maybe it is time to delink the global economy from the dollar. Just like there was a time to delink the dollar from gold. The place of the dollar in the global economy is the very reason why the US runs such large deficits and debts. And those large deficits and debts come up with a price paid for by ordinary Americans. The current arrangement is not a healthy arrangement perhaps. For a national currency to also serve as the global currency is perhaps too much of a burden on that national currency.

Perhaps the WTO needs a new round of negotiations. Trade is a good thing. There is sound economic theory behind trade, still largely undisputed. But maybe the WTO cannot act holier than thou about the resulting inequality. People are not abstract. People are real. Trade perhaps can no longer be delinked from the inequality it creates. Rises in productivity are good. But the resulting inequality is existential. There is a need for a redesign. People are hurting for lack of jobs in the US. People are hurting for jobs in India. Neither the ruling party nor the opposition party, in either case, seem to have any real solutions. In such a scenario the very democracy will get questioned given enough time.

Trump is but the American Boris Johnson who argues for a "hard Brexit." That hard Brexit will turn Britain into the new Greece. But Boris Johnson trades in anger. He does not care. Those who trade in anger and feast on that anger simply want more people angrier. The best case scenario is self-destruction. A bad scenario is large scale destruction. The world avoided a Great Depression in 2008. This time it might be harder to do the same. Back then the leaders were at least talking. This time that "talk" is missing. Irrationality holds sway.

Elizabeth Warren is the only one with a plan. Her wealth tax is that plan. She has not yet linked that to the idea of a Universal Basic Income. Andrew Yang talks about UBI. But that UBI does not stand on sound financial footing yet. He has not linked it to some kind of a wealth tax. Not yet. But even the wealth tax is mere tinkering. It is sound tinkering. It is a start. But a real solution is a much more ambitious redesign. Where are the thinkers at?

Should there be a 2008 style meltdown, and you never know with Trump playing with fire, the US central bank has little to no option left. When the interest rate is already near zero, how do you further cut it? My thought is the Fed will be forced to do a UBI, a quantitative easing for the people. It will be forced to issue new money and simply give it to every American in the form of a direct deposit each month. The Fed will have nowhere else to go. There is no room for interest rate cuts. The banks are already flush with cash, as are the corporations. So it is not lack of cash that is hurting the economy. There is no room for quantitative easing for the banks. The only option left is a quantitative easing for the people.

But that can only go for a few years. A real UBI will have to be designed and implemented as a conscious choice made by elected leaders. The crisis might force the introduction. But there will be a need for a conscious second act.



भारत पाकिस्तान वार्ता तीन तह पर करिए

जब सोवियत संघ अफ़ग़ानिस्तान पर कब्ज़ा बना कर बैठा हुवा था और वो बात अमेरिका को पसंद नहीं था तो अमेरिकी ख़ुफ़िया एजेंसी सीआईए (CIA) ने बिन लादेन को रूस के विरुद्ध प्रयोग किया था। वही बिन लादेन बाद में हेडेक बन गया था अमरीका के लिए। हाल में फिर से सीआईए (CIA) ने आईसस (ISIS) को सीरिया में प्रयोग करने का प्रयास किया था।

जगजाहिर है पाकिस्तान की ख़ुफ़िया एजेंसी आईएसआई (ISI) कुछ आतंकवादी समुह को काश्मीर में प्रयोग करने के प्रयास मे रहती है। लेकिन पाकिस्तान के भितर जितने आतंकवादी समुह हैं सब के सब पाकिस्तान सेना के बटालियन के तरह हैं ये कहना गलत होगा। जब मुसर्रफ पाकिस्तान के तानाशाह थे तब एक ही हप्ते में दो दो बार उन पर जान लेवा हमला हुवा था। आये दिन समाचारे छपती है कि पाकिस्तान के भितर आतंकवादी समुह ने अटैक बोल दिया। सेना पर अटैक होती रहती है। आतंकवाद से पाकिस्तान खुद परेशान है।

जब मोदी नवाज से बातचीत कर रहे थे तो बात बिगाड़ने के लिए क्रॉस बॉर्डर स्ट्राइक करा दिया गया। किसने कराया? पाकिस्तान के सेना ने?

पाकिस्तान की अर्थतंत्र बहुत कमजोर अवस्था में है।

वार्ता दोस्तों के बीच नहीं दुश्मनों के बीच ही तो होती है। शान्ति वार्ता आप दुश्मन के साथ नहीं करेंगे तो क्या दोश्त के साथ करेंगे? मोदी और पुतिन के बीच दोस्ती है। उन दोनों के बीच शान्ति वार्ता की जरुरत नहीं है।

वार्ता नहीं शिखर वार्ता करें। और तीन चरणों में तीन तह पर करें। सिर्फ प्रधान मंत्री का प्रधान मंत्री से बात हो उससे शायद काम नहीं चलेगा। प्रधान मंत्री का प्रधान मंत्री से, सेनापति का सेनापति से, और पाकिस्तान की ख़ुफ़िया एजेंसी के प्रमुख का भारतके ख़ुफ़िया एजेंसी के प्रमुख के साथ।

शिखर वार्ता एक दो तीन करिए। एक काठमाण्डु में। दो ढाका में। तीन कोलंबो में। नेबरहुड फर्स्ट भी हो जाएगा लगे हाथ।



جب سوویت یونین افغانستان پر قبضہ کررہا تھا اور امریکہ پسند نہیں کرتے، امریکی انٹیلیجنس ایجنسی سی آئی اے نے اسامہ بن لادن کو روس کے خلاف استعمال کیا تھا. اسی طرح اسامہ بن لادن کو امریکہ کے لئے ایک ہیڈیک بن گیا. حال ہی میں، سی آئی اے نے شام میں آئی ایس آئی کا استعمال کرنے کی کوشش کی.


یہ معلوم ہے کہ پاکستان کی انٹیلی جنس ایجنسی آئی ایس آئی کشمیر میں کچھ دہشت گردی کے گروہوں کو استعمال کرنے کی کوشش میں رہتا ہے. لیکن یہ کہنا غلط ہے کہ پاکستان میں دہشت گردی کے تمام گروپ پاکستان کے بٹالین کی طرح ہیں. جب مشرف پاکستان کا ڈیکٹر تھا، تو وہ ایک قسط میں دو مرتبہ یا دو بار حملہ کیا گیا تھا. یہ دنوں سے واضح ہے کہ پاکستان کے دہشت گرد گروہ دہشت گردوں کی طرف سے حملہ کیا گیا تھا. فوج پر حملہ ہو رہا ہے. پاکستان خود دہشت گردی کی طرف سے پریشان ہے.


جب مودی نواز شریف سے بات کررہے تھے، تو اس معاملے کو خراب کرنے کے لئے سرحد پار سرحد پر حملہ کیا گیا تھا. کس نے کیا پاکستان کی فوج؟


پاکستان کی معیشت بہت کمزور ہے.


دوستوں کے درمیان بات چیت، دشمنوں کے درمیان نہیں ہوتا. دشمن کے ساتھ امن مذاکرات نہیں کریں گے، پھر آپ دشمن کے ساتھ کیا کریں گے؟ مودی اور پوتین کے درمیان دوستی ہے. ان کے درمیان امن مذاکرات کی کوئی ضرورت نہیں ہے.


سربراہی اجلاس پر بات مت کرو. اور تین اطراف تین مرحلے پر. وزیراعظم کے وزیراعظم سے گفتگو کرتے ہوئے، شاید وہ کام نہیں کریں گے. بھارت کے انٹیلی جنس ایجنسی کے سربراہ کے ساتھ، وزیر اعظم کے وزیر اعظم، کمانڈر کمانڈر آف پاکستان اور سربراہ پاکستان کے سربراہ کے ساتھ.


دو یا تین سربراہ اجلاس کرو ایک کنگھائی میں ڈھاکہ میں دو کولمبو میں تین پڑوسی سب سے پہلے بھی ہاتھ لگے جائیں گے.


भारतको चाहिए कि इमरान से वार्ता करें
Imran Khan Could Bring Peace
Narendra Modi And Imran Khan Should Solve Kashmir And Bag A Joint Nobel



Modi, Imran Khan Spent 9 Hours in the Same Room, But It Wasn't Really 'Pleasant' when Modi met Chinese President Xi Jinping, Modi reportedly said that his efforts to initiate peace with Pakistan have been “derailed” as the country was not addressing the need to create an atmosphere “free of terrorism”........ Modi and Khan also stayed about 30 km away from each other in Bishkek, Indian Express reported – Khan was in the Al Archa Presidential Palace of Kyrgyz President Sooronbay Jeenbekov with other SCO leaders, but Modi was at the Orion Hotel...... Another opportunity the leaders had to speak to each other was at a round-table dinner for eight leaders at Frunze restaurant. Even though they were almost facing each other, the Indian Express says, “there was no exchange of pleasantries”. It was clear that the two were giving each other the cold shoulder. ...... Modi hit out at Pakistan by talking about countries allowing and funding terror being held accountable. Khan replied by condemning “State-terrorism against people under illegal occupation” – a reference to Kashmir. ....... While Pakistan had given permission for Modi’s plane to fly over its airspace on the way to Bishkek, the Indian prime minister did not take that route.
PM Modi-Imran Khan exchange pleasantries during SCO Summit in Bishkek



Letter From a Pakistani to an Indian Friend: Can We Please Have a South Asian Union? Relations between our countries must improve, for the sake of the people. We may have nuclear arms, but India and Pakistan can’t feed, clothe and educate millions of their citizens. Tensions between us hinder development in the entire South Asia region. And yes, Pakistan is part of South Asia, not the Middle East. ....... India must stop human rights abuses in Kashmir, one of the world’s most heavily militarised regions, and withdraw troops from Kashmir that many Kashmiris see as occupation. Soldiers are victims too. They don’t choose where to be deployed. As you’ve noted, more soldiers have been killed in Kashmir in the last five years than the previous 15 combined....... The military dictator in the 1980s nurtured militants in the first Afghan war against the ‘godless Communists’ at the behest of the US and Saudi Arabia. The ‘mujahideen’ of those years morphed into the Taliban, Al Qaeda and other groups...... militants have killed over 70,000 Pakistani civilian and 10,000 security personnel since 2001 when the next military dictator tried half-heartedly to reverse earlier policies. ..... Politicians like Modi know that the 24/7 media beast thrives on conflict and will amplify war cries. ..... why can’t we fight over who will first eradicate poverty and illiteracy? ....... India and Pakistan must see Kashmir not as a territorial dispute but as a matter of the lives and aspirations of the people, who must be involved in any dialogue about their future. ...... it’s the land that India’s dominant narrative focuses on. The Kashmiris can go to hell. ....... It made no headlines when on a few days’ notice, hundreds joined the Global StandOut for Peace in South Asia demonstrations against the war hype between India and Pakistan in the first week of March, in some 20 cities from Kolkatta to Karachi, London and Oslo to San Francisco and LA, you in Delhi, me in Boston. It would have gone viral if participants had turned violent....... if historical enemies France and Germany can join a European Union, why can’t India and Pakistan be part of a South Asian Union? Why can’t we have a visa-free region? Let people meet, trade and travel.