And stop blaming the “bania.” So says Swami. A good article after a long time-
Through history, said my former editor Girilal Jain, whenever things go wrong, Indian rulers blamed the bania. The US is no different. After the global meltdown, US politicians are baying for the blood of financiers. They have just legislated a 90% tax on bonuses of staff at AIG, the insurance giant rescued by the US government. Legislators were angry that financiers responsible for AIG’s collapse could be rewarded with bonuses, and sought to expropriate these.
Many Indians will cheer. Yet, banias alone are rarely responsible for disasters: many others are usually responsible too. The financial crisis occurred in the most regulated sector of the US and world economy. So it was a failure not just of bankers but of the state, regulators, investors, and all other participants. If you can tax AIG staff, why not all the others?
For starters, what about a retrospective 90% tax on the two Fed chiefs, Alan Greenspan and Ben Bernanke? They knew bubbles were forming in housing and stock markets, but instead of halting this they claimed it was best to let the bubbles burst and then sweep up the mess.
Next, tax all US legislators who for decades sought to make all Americans home owners through excessive implicit and explicit subsidies. One law forced banks to lend to sub-prime poor borrowers. Legislators created Fannie Mae and Freddie Mac, government-sponsored entities that bought or underwrote four-fifths of all US mortgages, and enjoyed exemption from normal regulations. Politicians repeatedly rejected stiffer regulation despite Greenspan’s warning that these under-regulated giants posed huge risks…
I was wondering about all the craziness that I have witnessed over the past year – in politics, in economics, in everything. And for some strange reason, all I could think of was the Humpty Dumpty rhyme. And then I found this senseless verbiage-
“I don’t know what you mean by ‘glory,’” Alice said.
Humpty Dumpty smiled contemptuously. “Of course you don’t – till I tell you. I meant ‘there’s a nice knock-down argument for you!’”
“But ‘glory’ doesn’t mean ‘a nice knock-down argument,’” Alice objected.
“When I use a word,” Humpty Dumpty said in a rather a scornful tone, “it means just what I choose it to mean – neither more nor less.”
“The question is,” said Alice, “whether you can make words mean different things.”
“The question is,” said Humpty Dumpty, “which is to be master – that’s all.”
Alice was too much puzzled to say anything, so after a minute Humpty Dumpty began again.
“They’ve a temper, some of them – particularly verbs, they’re the proudest – adjectives you can do anything with, but not verbs – however, I can manage the whole lot! Impenetrability! That’s what I say!”
And it fits – senseless politics and senseless sentences make a nice pair. All these politicians and economists – from Barney Frank to Krugman, from Chidambaram to Amartya Sen, deserve the Avicenna treatment-
Anyone who denies the law of non-contradiction should be beaten and burned until he admits that to be beaten is not the same as not to be beaten, and to be burned is not the same as not to be burned.
The “paradox” of thrift, fiddling with the economy, irritating people to no end and robbing them blind, “protecting” capitalism by regulating it, and then “reinventing” it. Imbeciles – they, and every body who believes them.