Did you know?

Did you know that Mahatma Gandhi stayed in Bayswater, as a student in London? Did you also know that I lived in Bayswater, when I had to work in London? My hope is that the similarity between the two of us doesn't end there.

Silly statements aside, what I take away most from having started "My Experiments with Truth", is the story of redemption. From Babu to Bapu. From a shy insecure barrister to the leader of a nation. Interestingly, what endears us to any great historical figure, say Gautama Buddha or Jesus Christ, is this transcension beyond human frailty.

I think the success of Obama's electoral campaign was because he couched himself in subtly messanic terms. I mean, his autobiography was called "The Audacity of Hope". Humans are a sucker for hope. :) Of course, only time will tell if he is going to deliver on his message.

Topic change, and inappropriate joke (no offense meant to anyone) :

Why did the fashion show in the West Bank end with a bang?

There was suicide bomber.

(*You may now laugh*)

Price Stability

The Big B (Ben Bernanke, of course) on price stability :

Price stability plays a dual role in modern central banking: It is both an end and a means of monetary policy.

As one of the Fed's mandated objectives, price stability itself is an end, or goal, of policy. Fundamentally, price stability preserves the integrity and purchasing power of the nation's money. When prices are stable, people can hold money for transactions and other purposes without having to worry that inflation will eat away at the real value of their money balances. Equally important, stable prices allow people to rely on the dollar as a measure of value when making long-term contracts, engaging in long-term planning, or borrowing or lending for long periods. As economist Martin Feldstein has frequently pointed out, price stability also permits tax laws, accounting rules, and the like to be expressed in dollar terms without being subject to distortions arising from fluctuations in the value of money.³ Economists like to argue that money belongs in the same class as the wheel and the inclined plane among ancient inventions of great social utility. Price stability allows that invention to work with minimal friction.

Let me elaborate briefly on the relationship between price stability and the other two goals of monetary policy. First, price stability promotes efficiency and long-term growth by providing a monetary and financial environment in which economic decisions can be made and markets can operate without concern about unpredictable fluctuations in the purchasing power of money. As I have already noted, the dollar provides a reasonably secure gauge of real economic values only when inflation is low and stable. High and variable inflation degrades the quality of the signals coming from the price system, as producers and consumers find it difficult to distinguish price changes arising from changes in product supplies and demands from changes arising from general inflation. Because prices constitute a market economy's fundamental means of conveying information, the increased noise associated with high inflation erodes the effectiveness of the market system. High inflation also complicates long-term economic planning, creating incentives for households and firms to shorten their horizons and to spend resources in managing inflation risk rather than focusing on the most productive activities.

More recently, the evidence has mounted not only that low and stable inflation is beneficial for growth and employment in the long-term but also that it contributes importantly to greater stability of output and employment in the short to medium term. Specifically, during the past twenty years or so, in the United States and other industrial countries the volatility of both inflation and output have significantly decreased--a phenomenon known to economists as the Great Moderation (Bernanke, 2004). This finding challenges some conventional economic views, according to which greater stability of inflation can be achieved only by allowing greater fluctuations in output and employment. The key to explaining why price stability promotes stability in both output and employment is the realization that, when inflation itself is well-controlled, then the public's expectations of inflation will also be low and stable. In a virtuous circle, stable inflation expectations help the central bank to keep inflation low even as it retains substantial freedom to respond to disturbances to the broader economy.

Given the spectacular (and going to be even more spectacular) debt levels of most western nations, it would be interesting to see how things turn out over the next few years. Paraphrasing Hamlet, to print, or not to print, that is the question.

Whats with the strikes?

Lufthansa employees on strike. British Airways employees on strike. Greek unions strike after government freezes pay. Boeing employees strike after threats of job cuts. Strike and what? Decrease profits even more?

Don't they know that all it will do is lead to even bigger layoffs down the road e.g. GM/Chrysler/Ford? Profitability issues slowly morph into spectacular losses and bankruptcy (or near bankruptcy as in the case of Ford.). Maybe apart from Greece, most of these countries have pretty good labor laws which really obviates the need for unions. Unions end up behaving like a cartel, basically holding the company hostage to extract a disproportionate share of economic output.

Speaking of strikes. Lets talk about a strike out. Whats with the fun crap shoot in Iraq, when it is turning out to be that the nukes are in Iran after all? All Saddam did was build big palaces, abuse the football team for losing matches and defile historical sites by having his name inscribed on every brick. It saddens me though. Countries like Iraq, Iran and Afghanistan were at the forefront of art and culture for 3000 years. Why are they in such a mess now? At least India and China are coming back after a century or two of colonial dacoity.

Ridonculous

US college graduation rates by state. By not completing college, one loses the 50% boost to lifetime income. Its also a waste of state resources to have an institution where over half the students don't even graduate. (Click on the picture for more detail.)

Amusingly, only 22.4% percent of students in Alaska complete college. Hmm. Gets one thinking.

Bloomberg Headline

"Allied Rockets Kill 12 Civilians in Afghan Fighting; McChrystal Apologizes"

A single murder leads to jail, but a mass killing leads to a sincere apology. Oh well.

What is..

the similarity between these two songs?

- Gold Digger by Kanye West

and the R&B classic

- I got a woman by Ray Charles

Answer (highlight to see the text): The hook for the first song is lifted straight out of the second. Amusingly, Ray Charles sings about a woman who "gives me money when I am in need, a friend indeed", while Mr. Kanye refers to those who prefer to take rather than give. "Gives me money" becomes "takes my money". "Friend indeed" becomes "trifling friend indeed". Tsk tsk Kanye. Ray Charles was blind for much of his life, and lost his parents as a teenager. So, Kanye do you really need to complain about women you take all your money?

Red Earth and Pouring Rain

What could my mother be
to yours? What kin is my father
to yours anyway? And how
did you and I meet ever?

But in love our hearts are as red
earth and pouring rain:
mingled
beyond parting.

- Cempulappeyanirar

Its a translation of a poem from Karunkotai, a 2nd century collection of Tamil Sangam poetry. Interestingly, I read a book by Vikram Chandra called "Red Earth and Pouring Rain", which quotes these as its opening lines. Just happened to come across the verse again.

Another one I liked -

Only the dim witted says its evening
when the sun goes down
and the sky reddens,
when misery deepens,
and the mullai begins to bloom,
in the dusk.

But even when the tufted cock,
calls in the long city,
and the long night
breaks into dawn,
it is evening:
even noon
is evening,
to the companionless.

- Milaipperun Kantan

A couple of nice ones from a 7th century collection of Sanskrit poetry by Bhartrihari. Yes, most of the poetic structure has most likely been mangled in translation.

For one short act, a child; next act a boy
In love; then poor; a short act to enjoy
Status and wealth; till in the last act, Man,
Painted with wrinkles, body bent with age,
Ending the comedy which birth began,
Withdraws behind the curtain of life's stage.

---

A man lives long who lives a hundred years:
Yet half is sleep, and half the rest again
Old age and childhood. For the rest, a man
Lives close companion to disease and tears,
Losing his love, working for other men.
Where can joy find a space in this short span?

---

In former days we'd both agree
That you were me, and I was you.
What has happened now to us two,
That you are you, and I am me?

---

Her face is not the moon, nor are her eyes
Twin lotuses, nor are her arms pure gold:
She's flesh and bone. What lies the poets told!
Ah, but we love her, we believe the lies.

---

The ignorant are quickly satisfied,
And argument will soon convince the wise;
But Heaven's own wisdom scarcely will suffice
To contradict a half-baked scholar's pride.

Not bad eh?!

Gita and Oppenheimer

We all know of the of the famous Robert Oppenheimer when the first atomic bomb was exploded.

If the radiance of a thousand suns were to burst at once into the sky, that would be like the splendor of the mighty one. Now I am become death, the destroyer of worlds.

Obviously, there is a connection with the mechanics of an atomic bomb, and the destruction it leaves in its wake.

However, I think there is a deeper significance to the quote. In the epic Mahabharata, the Bhagvad Gita comes right before the battle as Arjuna, his charioteer Krishna and the Pandavas, face their cousins the Kauravas in battle. Arjuna has serious misgivings about the war - whats the point destroying one's own kith and kin for a kingdom? Of what value is a kingdom obtained by such means? Krishna, an avatar of Vishnu, talks to him about the value of karma (or duty) and not getting swayed by attachments.

Oppenheimer, not being psychotic like Adolph Hitler, possibly had serious misgivings about the work he was doing. He in some ways felt like Arjuna, as he (rightly) felt that the result of his work could lead to untold death and destruction for years to come. Like Arjuna, he did his duty as a scientist.