Wednesday, May 27, 2015

U.K vs U.S election questions

In following the United Kingdom’s general election this year, I noticed some interesting differences in the policies and priorities of the people of the U.K vs. the policies and priorities that are very commonly discussed during an election cycle in the United States.

Since the demographic and political culture might be a little different between the U.S and the U.K, this might not be an apple-to-apple comparison, but still an interesting one. Here are a few I observed –

1.      Health Care:
·        U.K: Every major party in the U.K wanted more funding for their universal healthcare system - the National Health Service (NHS). The question was always about which party’s ideas had a better prospect to acquire more funding for their NHS and never about reducing the funding.

·        U.S: In contrast, in the U.S, many republican politicians have been talking about defunding the Affordable Care Act (Obamacare) for the last two years without actually providing a solid alternative for the current beneficiaries of the Affordable Care Act.

2.      Marriage Equality:
·        U.K: Marriage Equality was never a topic of discussion in the U.K elections. This is no surprise given the fact that sometime in 2014, legislation was passed in England, Scotland and Wales allowing gays to legally marry. The only place gay marriage is still not recognized is in Northern Ireland and I am not sure if candidates from those constituencies had to face this question.  

·        U.S: Politicians contesting for office in the U.S are repeatedly hammered on this topic. In fact, if one wants to run for office in the U.S, he better be ready to answer questions on this topic on day one (and make sure the answer satisfies his constituents).

3.      Immigration:
·        U.K: The two major parties in U.K – Conservatives and Labour – wanted to reduce net immigration from both the European Union and non-European countries.  Many smaller parties like the U.K. Independence party were also for reducing net immigration. And all these parties also wanted to cut back the benefits given to immigrants. They were in consensus that the “free movement of people” should not be misused to turn it into “free to claim” benefits. The question among these parties was only about how far one would go to reduce net immigration (and claiming of benefits).

·        U.S: In the U.S, the question on what to do with the illegal (or undocumented) immigrants has been going on for quite a while without solid answers. And same with the benefits – some wanted to give benefits to immigrants who are already in the U.S illegally for many years, and some do not.

To put it in other words, major U.K. parties seem to be in consensus that the incentives given to unskilled or low-skilled or illegal immigrants need to be cut back so as to reduce the attraction of immigrating to the U.K just to claim welfare benefits. In the U.S though, whether those incentives even need to be cut back is still a question that is debated across party lines and among the people themselves.

4.      Neck Ties:
·        U.K: During election debates, the politicians in the U.K seem to be wearing more colorful ties than the ones in the U.S J

·        U.S: Most politicians in the U.S more or less stick to blue or red…more fanciful colors are hard to see in a U.S politician’s tie than in a U.K politician’s tie J

Tuesday, May 19, 2015

Where are we heading?

There were two financial reports coming out of the United Kingdom today – housing prices and general inflation. These reports petrified me – just as similar data from the US these days is causing a concern to me.

The housing prices in the U.K. have been going up at a pretty pace recently. The annual housing prices went up by 9.6% in the year to the end of March. The annual house price inflation in Scotland during the same period was 14.6% – the fastest since 2007.

Now, the general inflation in U.K. (as measured by the Consumer Price Index) turned negative (-0.1%) in April (year-over-year).

The two contradicting data above points to eerily similar situation during the housing boom before 2008. For the last decade, we have been facing this constant problem of asset price inflation not in line with the inflation of the prices of general goods and services. Now, remember, the central banks base their interest rate decisions on the consumer price index and not on the housing price index. In fact, before the 2008 recession, many central bankers thought that housing price inflation was not something to worry about. They did not believe that there could be a nation-wide housing market collapse – as they thought that housing price depends of various factors, many of which are regional. But what they failed to see was how the housing market was directly linked to the very heart of the global finance and how the collapse of the housing market could cause a chain reaction across many large financial institutions.

It would be hard to believe for anyone to think that the central banks did not foresee the link between the housing market and the banking system – as even in a traditional banking model, it is the banks which lend to the home owners and so anyone would have known that there would be an impact if the housing bubble bursts. But the irrational calculation that the central banks did at that time was that a bank, run by extremely savvy individuals, would not hurt itself by sub-par lending standards (we would call this “no-regulation”, but the central banks called it “self-regulation”). But what the central banks missed to see at that time was – it was no longer necessary for the banks to worry about the creditworthiness of the borrower – as long as the banks could securitize those loans and sell it to market participants, they thought that the risks were minimized. In fact, they thought that by selling these newly innovated financial products, the risks were shifted from just the lenders to the many number of financial market participants – participants who were more in number than one lender and who were thought to have the capacity to absorb the hit if in case the borrower defaults. These securitized loans were complex financial instruments that went under the radar of the supervising agencies of the government. So when the housing market collapsed, it set up a chain reaction with these financial instruments acting as a trigger that led to an incredible worldwide turbulence in the global financial markets - a turbulence whose effects are still being felt today, and a turbulence that brought us close to the complete shutdown of the global financial system as we know it.

Today, after ‘n’ number of new regulations introduced, various bank stress tests conducted, billions in fines paid and bills like the Dodd-Frank passed, we are again looking at data that points to assets like houses and equities going up when wages and inflation of general goods remain stagnant. Where did we go wrong? More importantly, where are we heading?

Thursday, May 7, 2015

A complete mug or a dodgy prime minister

Just a light-hearted post:

Today, May 7th, is the general election in U.K. I am not a British citizen and I have no facts in hand to comment (and probably no right too :)), but I am going to say this - I am rooting for David Cameron of the Conservative Party to win the election. How can one not vote for this guy? - especially after watching him obliterate the Labour Party leader Ed Miliband during many "Prime Minister's Questions" sessions in the House of Commons!

Tomorrow will be interesting to see if David Cameron who called Ed Miliband "a complete mug" or Ed Miliband who called David Cameron "a dodgy prime minister surrounded by dodgy donors" will become the next prime minister of U.K. :) 

Gotta love those British accented face-to-face funny yet intense Q&A sessions in the House of Commons!

Wednesday, May 6, 2015

The Free Speech for a Rational Mind

When I hear incidents like the Charlie Hebdo shootings in Paris or the one in Garland, Texas this week, I am immediately reminded of someone called Periyar E.V. Ramasamy. Periyar, who was born in 1879 in British India to Hindu parents and went up to live until 1973 - which was by then a free India - was an atheist and was the founder of the "Self-Respect" movement and a strong figure in the Dravidian movement that took roots in the southern part of India in the 1920s, especially in the state of Tamil Nadu. 

Periyar, through his self-respect movement, fought against what he said was the oppression of "backward" caste people by the "forward" caste people. He claimed that this oppression stemmed directly from the ills of the Hindu religion and said that the northern-aryanic brahmanism, a concept that he said was foreign to the southern dravidian race, introduced countless superstitious beliefs within the Hindu religion that led to people being marginalized and oppressed across caste lines. 

Periyar, to whom freedom of speech was not at all foreign, criticized the Hindu religion, its gods and goddesses and its belief system in ways and words that were considered extremely offensive to the millions of Hindus. He called anyone who believed in God a fool and even organized rallies where he broke the statues of Hindu gods and called upon his followers to do the same. He even compared the forward caste man, who is of the priest class in the Hindu society, to a "snake" who surrounds the legs of the oppressed people - where the snake doesn't allow the oppressed people to move (up the economic ladder) and if one still tries to move, the snake bites.

In a society that was vigorously religious, Periyar gained millions of followers. They called themselves "rationalists". Even religious people saw in him a figure that questioned the very faith that they were afraid to question. They saw in him the courage to use his "God-given" intellectual capability that they themselves were afraid to use to question the gods and goddesses. 

Periyar might have been very offensive in the ways he questioned Hinduism, but he also put forward "rational" thoughts and begged people to use their "thinking" capability to question everything rather than just blindly accept them. He hated when people called him an atheist, for he believed that that term was misused against anyone who used their thinking prowess and questioned the logic behind an assertion.   

Periyar admired Buddha - for he thought that Buddha was a rationalist of his time who questioned the Hindu religion and its practices. He refused to believe that Buddha was any form of divine incarnation and he didn't believe Buddhism was a religion. But he openly advised many oppressed and backward caste people to convert to Buddhism to break out of the "evil" machinations of Hinduism. But when some asked him to convert to Buddhism as a form of solidarity, he refused. And the reason he gave was that that it was easier (and in some ways logical and even ethical) to stay within the bounds of Hinduism to criticize Hinduism. 

Out of many millions of his followers, some went out to form political parties. And these parties and its atheist members have repeatedly been elected by the vastly religious society to govern the state of Tamil Nadu in the last five decades. And so was atheism accepted by the religious people of Tamil Nadu. In fact, today people demand that these atheists stay true to their atheism as a form of trust to their rational thinking and leadership. 

Periyar's free speech to question the ills of Hinduism was very effective because he stayed within the system to question the system. No one was able to question his freedom to speak against the Hindu religion for he himself belonged to the Hindu society. No one could deny him that right even during the pre-constitutional era. And I wonder if today's free speech against a religion's ills needs people like Periyar, who will not only have the courage to beg the people to question faith, but will also be members within that faith-system to make that very free speech as not just a constitutional right, but rather an intellectual tool that leads to rational thinking and real transformation instead of just a provocation.