Robert Zoellick the president of the World Bank is leading a global search for the replacement of the American consumer. The American consumer served the world well over the past decade. They bought in large quantities, extravagantly and indiscriminately. They bought regardless of where the product came from, what it did for them and whether they had place in the house to keep it – which led to their having to buy larger and larger houses to keep the things that they bought.
The workers in far off lands of China, India and Africa toiled away in Dickensian conditions to satiate the American consumer demand. They worked 12 hours a day in sweltering workshops, with no overtime or social security to provide affordable goods to American consumers, who in turn obliged by consuming prodigious quantities of them. However, it is felt that American consumer can not do an encore of this remarkable performance in the coming decade. A desperate need exists to find a replacement. Someone, who could continue to fuel the global growth that we benefited from in the last decade – or else the world faces a recession.
The Chinese candidacy
In a number of circles the name of the Chinese consumer is being whispered as a possible candidate this role. Can the Chinese consumer spin the same magic as the American consumer and keep us on the growth trajectory? The advocates for designating the Chinese consumer as the replacement of the American sustainers of world economy argued, that the fact that there are four times as many Chinese as Americans is a good starting point and makes the Chinese consumer a good potential candidate. “But they don’t even have one tenth of the purchasing power,” argued Robert Zoellick. “That money is required to make a purchase, is an old-fashioned concept and is has been clearly demolished by the American consumer,” argued the advocates. Anyway money is a nebulous concept, we have seen trillions go here and there and none is wiser as to why and where it went and how it seems to be re-appearing again. What we do know is that when it re-appears it does seem to gravitate to the bonus packages of the American bankers. In fact sometimes it reaches the banker even before it reaches the bank, which itself needs to be kept afloat by funding from the State.
The clinching argument came from those who triumphantly revealed that it was anyway the Chinese money that the Americans were spending. Hence it wasn’t really the American consumer but actually the Chinese consumer who was providing the growth to the world economy. The Chinese consumers toiled in sweatshops and gave a part of their hard-earned money to Americans who used it to buy the goods that the Chinese workers sweated to produce. So it all worked out quite well – Americans did what they did best and are known for, and the Chinese did what their culture and tradition guided, giving them satisfaction of following their values of hard work, thrift and moderation.
Then why bother to change? Change will mean that both Chinese and American consumers will need to go against their grain. Imagine embarrassed and flustered Chinese moving through the supermarket aisles and staring at large packs of frozen dumplings or dried beef that they know they will not be able to eat, or looking at toys for their only child who they know does not need any more. At the same time, American consumers having to change their perception of a bank to a place where they save their money than where they borrow money from (and take out sub-prime mortgages from), is also an uphill task. Given the current image of the banks and the federal bail-outs, how will American consumers have the heart to trust their own money with a bank? For decades they have been guided by a belief that it is better to have the bank’s money with them than have their money in the bank and it will not be easy to change this principle which has served them so well over the years..
Status quo
Still immersed in deep reflection, Rober Zoellick concluded,” The solution is status quo - and even more status for the Americans and more quo for the Chinese”. Let Chinese workers labor more and produce even cheaper and better goods for the American consumers. Let them lend more money to their American brethren so that they can continue to stuff their large houses with more toys, electric drills, synthetic carpets and dildos made by Chinese factories. Only the Americans have houses large enough to accommodate more shopping any way.
President Obama congratulating Ben Bernanke on being the Person of Year for the TIME magazine for 2009 said, “Ben, you do us proud. You have done well so far. If you need more money – go East, young man. Work closely with your runners up in TIME magazine – the unnamed Chinese worker – and you might just save the world.”
Written by Ashok Sethi
Ashok.set@gmail.com
Tuesday, March 9, 2010
Thursday, January 28, 2010
Shoe for a shoe
Jail term for a pioneer
Wiser counsel seems to have prevailed. Muntadhar al-Zeidi, condemned for three years in Iraqi jail for throwing shoes at George Bush is out in six months They pronounced a three years sentence for a brave visionary who tried to change the world through innovative thinking! If we need to put Al-Zeidi, the Iraqi hero for flinging his shoes at George Bush behind bars, why not put all the marketing gurus and most of all Philip Kotler in jail, whose text book of marketing management clearly describes the marketing strategies of market expansion and product extension.
Saviour of soles
The shoe factories in Guangdong province of China were reeling under the impact of financial crisis. The anguished migrant workers losing their jobs and dreading the prospect of being reunited with their families in their rural abodes were desperate. “Stimulate domestic demand as a substitute for exports” cried out the venerable economists, eager to give advice and bring succor to the lives of the affected poor in export reliant countries. But can even the 1.3 billion Chinese consumers match the demand created by Americans, who on an average used to buy 30 pairs of shoes in a year!
It was a remarkable demonstration of the innovative thinking that the Guangdong Shoe Export Association hired Al-Zeidy to throw a pair of shoes at George Bush and demonstrate a new use for the product to boost its sagging demand. Imagine, if people started throwing shoes as well as wearing them? With millions of appropriate and deserving targets and billions of potential throwers, the factories can open their gates again and the workers can get back to the task of stitching the uppers to the soles. The Chinese government’s buy-in and support was secured, and the Prime Minister Wen Jia Bao himself volunteered to be the spokesman and a target for shoes in Cambridge University earlier this year.
A whole new world
Special shoes will be designed for bankers, made from sub-prime materials and leveraged at the heels. The politicians will get thick leather shoes to match the thickness of their own hides. The insurance companies will get shoes, the risk of wearing which will match the risk profile of the assets that they insured. We could even get rating agencies to rate the shoe in terms of aerodynamics, the speed and distance to which it can travel, and how much it will hurt when it will hurt the target.
The market could be segmented both by the thrower and the throwee – stilettos for the highbrow, the humble canvas shoe for the amateur, sneakers for the nimble, athletic types and budget shoes for those on a shoe-string. Shoes could be color coordinated for maximum impact – black shoes for Obama, white for Bush, brown for Manmohan Singh and yellow for Wen Jiabao.
Shoe for a shoe
The mind boggles at the opportunity, if the principle of “a tooth for a tooth and a nail for a nail” could be extended to “a shoe for a shoe”. The great leaders and the eminent public speakers, would then come to the meetings equipped with their own set of shoes, to fling them back at any miscreant who dares to throw one at them. Imagine public meetings, in which shoes are flying like rockets in each direction and every swing contributing to the rescue of shoe industry in Southern China, and ultimately to the rejuvenation of the global economy.
“Let me make it very clear,” president Obama said. “White House will not abandon the view that a shoe is a wearable accessory, whose primary role is protection and adornment of the feet. However, if it can find additional utility as a saviour of the global economy, I am sure Secretary Geitner will welcome it with open arms.”
In Dongguan in Guangdong province of China, as the shoe factory worker Lian Ping uses his chopsticks to voraciously swirl multiple strands of noodles from his bowl to his mouth, he can be rest assured that his next bowl of noodles or rice is not imperiled by the lack of demand of shoes in the world. He has to thank Al-Zeidy for this - who would not have spent six months in jail for nothing – he would have saved our soles.
Written by Ashok Sethi
Ashok.set@gmail.com
Wiser counsel seems to have prevailed. Muntadhar al-Zeidi, condemned for three years in Iraqi jail for throwing shoes at George Bush is out in six months They pronounced a three years sentence for a brave visionary who tried to change the world through innovative thinking! If we need to put Al-Zeidi, the Iraqi hero for flinging his shoes at George Bush behind bars, why not put all the marketing gurus and most of all Philip Kotler in jail, whose text book of marketing management clearly describes the marketing strategies of market expansion and product extension.
Saviour of soles
The shoe factories in Guangdong province of China were reeling under the impact of financial crisis. The anguished migrant workers losing their jobs and dreading the prospect of being reunited with their families in their rural abodes were desperate. “Stimulate domestic demand as a substitute for exports” cried out the venerable economists, eager to give advice and bring succor to the lives of the affected poor in export reliant countries. But can even the 1.3 billion Chinese consumers match the demand created by Americans, who on an average used to buy 30 pairs of shoes in a year!
It was a remarkable demonstration of the innovative thinking that the Guangdong Shoe Export Association hired Al-Zeidy to throw a pair of shoes at George Bush and demonstrate a new use for the product to boost its sagging demand. Imagine, if people started throwing shoes as well as wearing them? With millions of appropriate and deserving targets and billions of potential throwers, the factories can open their gates again and the workers can get back to the task of stitching the uppers to the soles. The Chinese government’s buy-in and support was secured, and the Prime Minister Wen Jia Bao himself volunteered to be the spokesman and a target for shoes in Cambridge University earlier this year.
A whole new world
Special shoes will be designed for bankers, made from sub-prime materials and leveraged at the heels. The politicians will get thick leather shoes to match the thickness of their own hides. The insurance companies will get shoes, the risk of wearing which will match the risk profile of the assets that they insured. We could even get rating agencies to rate the shoe in terms of aerodynamics, the speed and distance to which it can travel, and how much it will hurt when it will hurt the target.
The market could be segmented both by the thrower and the throwee – stilettos for the highbrow, the humble canvas shoe for the amateur, sneakers for the nimble, athletic types and budget shoes for those on a shoe-string. Shoes could be color coordinated for maximum impact – black shoes for Obama, white for Bush, brown for Manmohan Singh and yellow for Wen Jiabao.
Shoe for a shoe
The mind boggles at the opportunity, if the principle of “a tooth for a tooth and a nail for a nail” could be extended to “a shoe for a shoe”. The great leaders and the eminent public speakers, would then come to the meetings equipped with their own set of shoes, to fling them back at any miscreant who dares to throw one at them. Imagine public meetings, in which shoes are flying like rockets in each direction and every swing contributing to the rescue of shoe industry in Southern China, and ultimately to the rejuvenation of the global economy.
“Let me make it very clear,” president Obama said. “White House will not abandon the view that a shoe is a wearable accessory, whose primary role is protection and adornment of the feet. However, if it can find additional utility as a saviour of the global economy, I am sure Secretary Geitner will welcome it with open arms.”
In Dongguan in Guangdong province of China, as the shoe factory worker Lian Ping uses his chopsticks to voraciously swirl multiple strands of noodles from his bowl to his mouth, he can be rest assured that his next bowl of noodles or rice is not imperiled by the lack of demand of shoes in the world. He has to thank Al-Zeidy for this - who would not have spent six months in jail for nothing – he would have saved our soles.
Written by Ashok Sethi
Ashok.set@gmail.com
Tuesday, December 30, 2008
A Black Year
It was Queen Elizabeth II, who I first heard using the phrase “annus horribilis”. It wasn’t a part of Prince Philip’s anatomy that she was referring to, but to the travails of the recently concluded year of 1992, in which she witnessed the break-up of several family marriages and a fire at Windsor Castle. More recently, the Economist referred to the year 2008 as Wall Street’s annus horribilis – at the end of which, of Wall Street’s five big securities firms, only Goldman Sachs and Morgan Stanley still remain in recognizable existence.
It has been a shocking and all-pervasive black year – even extending to the White House. However, with a Black in the White House and a Brown at 10 Downing Street, the Indian community is celebrating a hard earned victory, and preparing itself for an age of Indian domination of the world. Black - a color which used to be dreaded in all its shades, and at all places, but particularly on the skin of the female offspring, is no longer an anathema. We expect the Sunday editions of Hindustan Times to soon carry matrimonial advertising mentioning “wheatish skin” with a sense of pride, rather than a tone of apology.
Unilever India, which swelled its corporate coffers on the sales of Fair & Lovely, is already thinking of phasing out the product and is evaluating preliminary concepts of Dark and Comely. China, another country with fondness for fair skin, except on Western journalists (and where, Olay the market leader, refers to the product category more precisely as whitening creams, rather than fairness creams) has started a campaign to educate its people on the benefits of black color. Chinese companies, which are desperately trying to remain in the black, as the rest of the world plunges further into red, also support the change.
The real question is to what extent this victory will benefit the poor blacks who have been receiving a raw deal from the world. A prime example is Michael Jackson, who was sued by the son of King of Bahrain for failing to write a new song and was expecting to be bailed-out by Obama. Michael also received inspiration from Obama’s victory and was seen humming “It don’t matter if you are Black or Brown” but was eventually disappointed and was last reported to be writing Chapter 11 of his autobiography.
Al-Zeidi, the Iraqi journalist, who threw his shoes at George Bush, said that he will continue to throw shoes at all American Presidents, regardless of their color. Asked whether he will match the color of the shoes with the color of the President, he said that in shoe throwing a contrasting, rather than a matching color makes a better mark. That is the reason why he threw a black shoe at Bush and soon plans to order white shoes, in case an opportunity arises to use them on Obama.
In the meanwhile, sipping black coffee in snow white Alaska, Sarah Palin was heard vehemently denying allegations that she is unfamiliar with the concept of contraception. Having five children was her single handed attempt to populate Alaska and increase its share of the electoral college – a mantle that she successfully passed to her sixteen year old daughter. “I hope we will have a black child in our family soon,” she said, hoping that her future generations may succeed in the task that she failed in.
Written by Ashok Sethi
Ashok.set@gmail.com
It has been a shocking and all-pervasive black year – even extending to the White House. However, with a Black in the White House and a Brown at 10 Downing Street, the Indian community is celebrating a hard earned victory, and preparing itself for an age of Indian domination of the world. Black - a color which used to be dreaded in all its shades, and at all places, but particularly on the skin of the female offspring, is no longer an anathema. We expect the Sunday editions of Hindustan Times to soon carry matrimonial advertising mentioning “wheatish skin” with a sense of pride, rather than a tone of apology.
Unilever India, which swelled its corporate coffers on the sales of Fair & Lovely, is already thinking of phasing out the product and is evaluating preliminary concepts of Dark and Comely. China, another country with fondness for fair skin, except on Western journalists (and where, Olay the market leader, refers to the product category more precisely as whitening creams, rather than fairness creams) has started a campaign to educate its people on the benefits of black color. Chinese companies, which are desperately trying to remain in the black, as the rest of the world plunges further into red, also support the change.
The real question is to what extent this victory will benefit the poor blacks who have been receiving a raw deal from the world. A prime example is Michael Jackson, who was sued by the son of King of Bahrain for failing to write a new song and was expecting to be bailed-out by Obama. Michael also received inspiration from Obama’s victory and was seen humming “It don’t matter if you are Black or Brown” but was eventually disappointed and was last reported to be writing Chapter 11 of his autobiography.
Al-Zeidi, the Iraqi journalist, who threw his shoes at George Bush, said that he will continue to throw shoes at all American Presidents, regardless of their color. Asked whether he will match the color of the shoes with the color of the President, he said that in shoe throwing a contrasting, rather than a matching color makes a better mark. That is the reason why he threw a black shoe at Bush and soon plans to order white shoes, in case an opportunity arises to use them on Obama.
In the meanwhile, sipping black coffee in snow white Alaska, Sarah Palin was heard vehemently denying allegations that she is unfamiliar with the concept of contraception. Having five children was her single handed attempt to populate Alaska and increase its share of the electoral college – a mantle that she successfully passed to her sixteen year old daughter. “I hope we will have a black child in our family soon,” she said, hoping that her future generations may succeed in the task that she failed in.
Written by Ashok Sethi
Ashok.set@gmail.com
Tuesday, November 18, 2008
Joe the Plumber
The more astute observers saw it coming. First it was the clogged toilet of the international space station and then the defective plumbing in the offices of Lehman Brothers forcing them to spend precious time to walk to the public toilet. Insiders say that the financial engineers at the legendary investment bank couldn’t handle being torn between the fear of an opportunity loss of millions of dollars by their temporary absence from their desks and the urgency of relieving themselves. Plumbers sabotaged further by connecting the plumbing pipeline with the financial pipeline and substituting debt paper with toilet paper.
For John McCain and Barack Obama It was the fear of being forced by unusable toilets in the White House and the prospect of walking up to the public WC at the Capitol in the middle of a discussion on the Iraq war, that prompted them to reach out to the plumber lobby with unprecedented concessions and incentives.
Needless to say that members of other professions are not amused at this blatant discrimination. A representative of the baking industry issued a statement, “Our products are the reason why plumbing is so important”. Jack the baker remarked that, “the inspiration of the financial experts to make the stock market rise to such frothy heights came from our success in use of self-rising flour. It is unfair that the plumbing industry is singled out for tax breaks”.
Bill the butcher is also peeved and contemplating his next move. His industry’s effortless shift from prime-cuts to poor quality sub-prime cuts provided the relevant theoretical foundation and the terminology for sub-prime mortgages. The industry has been facing significant hardship as misplaced health concerns drive more and more consumers from steaks to grilled fish and sausages to cucumbers. If special incentives are not provided to stimulate consumption of meat and butchers’ cleaver not supplied at a subsidized rate, there will be more financial havoc for all and more will be sent to the slaughterhouse. “Don’t kid with us – the steaks are high,” Bill the butcher warned.
However, the most telling response came from Sally the stripper, who has been unsuccessfully lobbying for several years for exemption of entertainment tax on strip dancing by demanding it to be declared it an art form. “We are the only ones with untainted assets now,” she proclaimed. “And they are available for inspection to anyone for a small fee. If only there was as much transparency in investment banking as in our profession, we wouldn’t have been in this mess!”
Written by Ashok Sethi
Ashok.set@gmail.com
For John McCain and Barack Obama It was the fear of being forced by unusable toilets in the White House and the prospect of walking up to the public WC at the Capitol in the middle of a discussion on the Iraq war, that prompted them to reach out to the plumber lobby with unprecedented concessions and incentives.
Needless to say that members of other professions are not amused at this blatant discrimination. A representative of the baking industry issued a statement, “Our products are the reason why plumbing is so important”. Jack the baker remarked that, “the inspiration of the financial experts to make the stock market rise to such frothy heights came from our success in use of self-rising flour. It is unfair that the plumbing industry is singled out for tax breaks”.
Bill the butcher is also peeved and contemplating his next move. His industry’s effortless shift from prime-cuts to poor quality sub-prime cuts provided the relevant theoretical foundation and the terminology for sub-prime mortgages. The industry has been facing significant hardship as misplaced health concerns drive more and more consumers from steaks to grilled fish and sausages to cucumbers. If special incentives are not provided to stimulate consumption of meat and butchers’ cleaver not supplied at a subsidized rate, there will be more financial havoc for all and more will be sent to the slaughterhouse. “Don’t kid with us – the steaks are high,” Bill the butcher warned.
However, the most telling response came from Sally the stripper, who has been unsuccessfully lobbying for several years for exemption of entertainment tax on strip dancing by demanding it to be declared it an art form. “We are the only ones with untainted assets now,” she proclaimed. “And they are available for inspection to anyone for a small fee. If only there was as much transparency in investment banking as in our profession, we wouldn’t have been in this mess!”
Written by Ashok Sethi
Ashok.set@gmail.com
Why can’t they be more like us?
Fearing the polluted air, the American Olympic cycling team arrived in Beijing wearing masks. The West continues to wonder why China can not fix its problems, and think and behave like them. President Bush’s address to the world on the eve of the Beijing Olympics raises some important questions…
On behalf of the United States of America, I congratulate the Chinese people and leadership for the impressive preparation they have made for hosting the 2008 Olympics. But while I say this, I must also urge the Chinese to learn more from the great nations of the world – particularly America.
We run a benign state, providing generous loans to our citizens, to buy houses which are larger than their incomes would allow, to live in a comfort that they can not afford. We allow them to live from month to month, borrowing from one credit card to repay the debt of another, to continue to flourish in an end less circle of debt fuelled luxury. The Chinese citizens are deprived of these benefits and need to pay 30% down payment for their apartment, and provide income certificates to apply for a mortgage.
I acknowledge that our poor are now facing unheard hardship, including facing the threat of losing their 4 bedroom sub-urban mansions, Most glaringly their very livelihood is threatened as they are unable to afford the gasoline to drive their 3 gas-guzzling sedans to work. The Chinese poor live in villages on their farms and struggle to feed their families and provide them with clean drinking water.
America has been tottering on the verge of recession, lost trillion of dollars in ingeniously crafted collateralized debt obligations and its legendary manufacturing enterprises are making losses in billions of dollars. China’s economy, on the other hand, staged a record growth of 11.4% in 2007 and managed to grow at 10.4% in the first half of 2008, despite the chaos that we inflicted on the world.
We take natural disasters in our stride, neglecting hurricane Katrina till the man made disaster overshadowed the natural one. Chinese, also frequently blessed with nature’s fury, fly their Prime minister to Sichuan within two hours of the being struck with an earthquake, and mobilize the entire nation to bring succor and comfort to the afflicted.
Our citizens quake to step after dusk in downtown streets of Chicago, New York and other great American cities, because of fear of getting mugged, stabbed or raped. The Chinese youth roam freely and happily in Shanghai, Beijing and Chengdu, while solemn faced Chinese policemen patrol in total oblivion of their merriment.
Our citizens have freedom – freedom to sell sub-prime mortgages, freedom to buy them, freedom to disguise them as respectable debt instruments, freedom to give them as AAA ratings, freedom to gamble (absolute luxury, when they can lose so much in the financial markets), freedom to buy guns (to escape from it all, if nothing else works), freedom to bomb Iraq (to share and divide the misery that we feeling our own country). The Chinese enjoy none of this freedom and are tightly controlled by a draconian regime with a misguided determination to protect its citizens from harming themselves.
While in most areas we want the Chinese to become more like us, there is one area where we want to retain our unique position and unassailable lead. We are the largest emitter of greenhouse gases in the world. Unfortunately this is one area in which China is becoming more and more like us. But our position as number 1 polluter is unshakable. We will not let the Chinese poor benefit from electricity, motorized transport or air travel. As we steadfastly refuse to sign the Kyoto protocol, we are determined to use all our power to prevent the Chinese from enjoying an excessive lifestyle which threatens the world with dire consequences of global warming.
I wish a great success for the Olympics and hope that they will change China for the better.
Written by Ashok Sethi
Ashok.set@gmail.com
On behalf of the United States of America, I congratulate the Chinese people and leadership for the impressive preparation they have made for hosting the 2008 Olympics. But while I say this, I must also urge the Chinese to learn more from the great nations of the world – particularly America.
We run a benign state, providing generous loans to our citizens, to buy houses which are larger than their incomes would allow, to live in a comfort that they can not afford. We allow them to live from month to month, borrowing from one credit card to repay the debt of another, to continue to flourish in an end less circle of debt fuelled luxury. The Chinese citizens are deprived of these benefits and need to pay 30% down payment for their apartment, and provide income certificates to apply for a mortgage.
I acknowledge that our poor are now facing unheard hardship, including facing the threat of losing their 4 bedroom sub-urban mansions, Most glaringly their very livelihood is threatened as they are unable to afford the gasoline to drive their 3 gas-guzzling sedans to work. The Chinese poor live in villages on their farms and struggle to feed their families and provide them with clean drinking water.
America has been tottering on the verge of recession, lost trillion of dollars in ingeniously crafted collateralized debt obligations and its legendary manufacturing enterprises are making losses in billions of dollars. China’s economy, on the other hand, staged a record growth of 11.4% in 2007 and managed to grow at 10.4% in the first half of 2008, despite the chaos that we inflicted on the world.
We take natural disasters in our stride, neglecting hurricane Katrina till the man made disaster overshadowed the natural one. Chinese, also frequently blessed with nature’s fury, fly their Prime minister to Sichuan within two hours of the being struck with an earthquake, and mobilize the entire nation to bring succor and comfort to the afflicted.
Our citizens quake to step after dusk in downtown streets of Chicago, New York and other great American cities, because of fear of getting mugged, stabbed or raped. The Chinese youth roam freely and happily in Shanghai, Beijing and Chengdu, while solemn faced Chinese policemen patrol in total oblivion of their merriment.
Our citizens have freedom – freedom to sell sub-prime mortgages, freedom to buy them, freedom to disguise them as respectable debt instruments, freedom to give them as AAA ratings, freedom to gamble (absolute luxury, when they can lose so much in the financial markets), freedom to buy guns (to escape from it all, if nothing else works), freedom to bomb Iraq (to share and divide the misery that we feeling our own country). The Chinese enjoy none of this freedom and are tightly controlled by a draconian regime with a misguided determination to protect its citizens from harming themselves.
While in most areas we want the Chinese to become more like us, there is one area where we want to retain our unique position and unassailable lead. We are the largest emitter of greenhouse gases in the world. Unfortunately this is one area in which China is becoming more and more like us. But our position as number 1 polluter is unshakable. We will not let the Chinese poor benefit from electricity, motorized transport or air travel. As we steadfastly refuse to sign the Kyoto protocol, we are determined to use all our power to prevent the Chinese from enjoying an excessive lifestyle which threatens the world with dire consequences of global warming.
I wish a great success for the Olympics and hope that they will change China for the better.
Written by Ashok Sethi
Ashok.set@gmail.com
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