Sunday, January 23, 2011

Looking ahead to 2011

Looking ahead to 2011

If 2010 was the year of "jobless recovery" we hope that 2011 will be the year of "Jobs' recovery" which many observers argue is even more important than recovery of jobs in the US. America is a land of heroes and gives the highest accolades to and places its highest hopes on the shoulders of a few. Recovery of Steve Jobs may well pave the way for recovery of American jobs.

Those who thought that banks had recovered from their self inflicted ills would have been disappointed to know that Goldman Sachs suffered a 37% decline in operating profit in 2010. On the other hand given the complexity of their business many are relieved (and surprised) to know that they were able to compute their profits at all - that too when the year had barely ended. Another redeeming factor was that the decline in the bonus was much smaller (only 5%) than the decline in profits - which shows that the banks may be faltering in managing their business, but have not wavered in their dedication to the fundamental reason of their existence - which clearly is to distribute bonus to their senior employees. It is rumored that some banks plan to progressively replace their ATMs with ABMs (Automatic Bonus Machines) as they fit in much better with their business objectives.

In the meanwhile the US census has discovered that America has a poverty level of 14.3%. The Republican party held a shotgun at the Obama administration to continue with the tax cuts for the rich Americans (a group significantly overlapping with the bonus receiving bankers). The poverty, it was argued exists because the rich do not have enough to give to the poor. Make the rich richer and there will be a trickle down effect making the poor less poor. Making the money flow through the rich will make the rich richer as well as the poor less poor, thereby increasing the general level of happiness.

The concept of happiness is what the British prime minister is using to divert the attention of the British public from their woes. Taking a leaf out of the Bhutan government's concept of Gross Happiness Index, David Cameroon wants the British to introspect and think about how happy are they. Americans always the more practical lot, already know the answer - thanks to a survey done using the Steve Jobs invented iPhone. Researchers found that the people were the happiest while "in flagrante". The relatively erectically challenged congressmen and senators (it is not politically correct to use the old word any more, as so many politicians face this condition) draw vicarious pleasure from screwing the economy. With proven worth and the enormous usefulness of the gadgets produced by his company we pray that 2011 be the year of Jobs' recovery.

In China the preoccupation seems to be to continue to sprint ahead in the economic race without actually being seen to be doing so, but at the same time wanting to receive the respect due to one who will soon dominate the world. The Chinese, therefore, will continue to resist the pressure to increase the value of the yuan, or pay more to their workers, while at the same time building the tallest buildings in the world, the best infrastructure, including the largest high speed railway network. The Chinese president is visiting the US to tell the Americans that he is willing to work together with them. The Americans are looking at the offer with their customary distrust of the East and wondering why they need help from the Chinese. Haven't we done a wonderful job putting ourselves in this spot?

In the Euro zone bets are being placed on which country will be the first to drop out of the common currency. The betting parties are reluctant to place their bets in Euro, as it may not be worth much when countries start dropping out. The stalemate on which currency should be used for the wager was solved by the Chinese offering the yuan to be the currency for the purpose.

India saw the much needed demise of the license raj, but only to be caught by the license Raja. A Raja, who till recently was the telecom minister of India, said that he wanted to put an end to the license raj by giving away the 2G licenses. With a proliferation of glossy magazines (girlie and boyie), and so many countries wanting to jump into bed with India, is the general theme for the country in 2011 to move from license to licentiousness? Experts disagree and feel that free licenses will not pave the way for free sex, as Indians will continue to pay heavily for sex throughout their lives in an institution known as arranged marriage.

Written by Ashok Sethi