Saturday, May 11, 2019

My Projection Puts Modi At 300-350

My projection puts the Modi-led NDA at 300-350. And if he gets another five years, he will be unbeatable in 2024. The Indian economy is projected to have become larger than the US economy by 2030, adjusted for purchasing power parity. I can imagine Modi being Prime Minister in 2030 when that happens.

Modi has clearly spoken against hate crimes. And there are laws in India against hate crimes. Those laws have to be actively enforced.






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Modi And Rahul

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Friday, May 10, 2019

Could Arithmetic Force Modi And Rahul To Team Up?

What the final tally will be is anybody's guess right now, but let's say this is how it rolls: "...the post-poll scenario will be dictated by regional parties that will climb back to the pre-2014 situation with 223-225 seats.......my estimate is that BJP’s tally will be around 170-180, down from 282 in 2014 and Congress’ may rise to 140-150, which will be phenomenal from 44 in 2014 ..... "

 BJP and allies: 170-180
Congress and allies: 140-150.
Federal Front: 200-220

Most people might suggest this means the Federal Front will get the Prime Minister with outside support from the Congress. But then no regional party might get more than 30 MPs.

Another option would be for the BJP and the Congress to come together with Modi as Prime Minister and Rahul Gandhi as Deputy Prime Minister. That might be a more stable government. In a democracy, you respect the people's verdict. Modi has made remarkable progress on issues like ease of doing business and infrastructure, whereas Rahul Gandhi has come up with the wonderful idea of a Universal Basic Income for the bottom 20% of the people. Country above party, as both like to say.




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The US China Tension: Creative Or Destructive?

The US-China trade war is more political than economic. Economic theory is largely pro-trade. But considering military tussle is not an option, the two powers are engaged in a trade war to score the many political points.

The US saw a declared socialist Bernie Sanders emerge a serious candidate for president in 2016, and he is running again. This is a new development. Socialism used to be a clearly dirty word in US politics.

Most US manufacturing jobs have been lost to automation, not China or Mexico, and that is set to accelerate, also inside China. That is an argument for abundance economics policies like Universal Basic Income and massive investments in human capital, namely education, and health.

The trade tussle might be more to do with the fact that China is now neck and neck to the size of the US economy. It might be a prestige issue.

If the Chinese economy opens up more as a result, that would be a good thing. But the more likely effect could come in the form of a global recession if there are miscalculations and the trade war goes full-fledged.

The chances of a full-fledged trade war are low. The US and Chinese economies might more or less stay on their projected paths. The real question is, where will the US economy stand in 2020, and what would that mean for Trump politically? The US economy is projected to hit a recession this year or the next with or without the trade war.

China is not projected to replace the US as the number one power in the world. Numerous powers are projected to emerge in various parts of the world.


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India 2019: The Scenario Of A Federal Front Lead



Fasten your seat belts on D-Street: Major horse trading ahead post May 23 As per my assessment, the post-poll scenario will be dictated by regional parties. ...... the post-poll scenario will be dictated by regional parties that will climb back to the pre-2014 situation with 223-225 seats. Regional parties belonging to the NDA will likely see a downdraft from 54 to 25-30 seats along with the declining vote and seat share of the BJP. ...... my estimate is that BJP’s tally will be around 170-180, down from 282 in 2014 and Congress’ may rise to 140-150, which will be phenomenal from 44 in 2014. At these levels, the Congress could be back to its 2004 tally of 145 when UPA-1 government came to power after overturning the ‘India Shining’ narrative of the Vajpayee-led NDA government. Hence, the NDA score could be around 210 seats, down from 336 in 2014 ....... a sub-200 tally for the BJP is a realistic projection, in my view, and this will restrict the NDA tally to around 200-220.
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China US Trade War Escalation



How Goes the Trade War? by Paul Krugman Donald Trump ... provided us with many iconic quotations .... extremely clear examples of bad ideas........ foreigners paid none of the bill, U.S. companies and consumers paid all of it. And the losses to U.S. consumers exceeded the revenue from the new tariffs, so the tariffs made America poorer overall...... These price hikes led to substantial changes in behavior. Imports of the tariffed items fell sharply, partly because consumers turned to domestic products, but also in large part because importers shifted their sourcing to countries that aren’t currently facing Trump tariffs. For example, a number of companies already seem to have begun buying goods they previously bought from China from Vietnam or Mexico instead........... Consider the following example: pre-tariff, the U.S. imports some good from China that costs $100. Then the Trump administration imposes a 25% tariff, raising the price to consumers to $125. If we just keep importing that good from China, consumers lose $25 per unit purchased – but the government raises an extra $25 in taxes, leaving overall national income unchanged.......... Suppose, however, that importers shift to a more expensive source that isn’t subject to the tariff; suppose, for example, that they can buy the good from Vietnam for $115. Then consumers only lose $15 – but there is no tariff revenue, so that $15 is a loss for the nation as a whole........... But what if they turn to a domestic supplier – say, a U.S. company that will sell the product for $120. How does this change the story? ......... Here the crucial thing is that producing a good domestically has an opportunity cost. The U.S. is near full employment, so the $120 in resources used to produce that good could and would have been employed producing something else in the absence of the tariff. Diverting them into producing what we used to import means a net loss of $20, with no revenue offset. ....... in practice any manufacturing jobs added by the Trump tariffs are probably offset by losses of other manufacturing jobs. ........ most of the tariffs are on intermediate goods – inputs into production, so that job gains in, say, steel are offset by losses in autos and other downstream sectors. Beyond that, the tariffs have probably contributed to a rising dollar, which makes U.S. exports less competitive.
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Thursday, May 09, 2019

Modi Expecting A Larger Victory Than 2014



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