The Book Clash of Titans: Reimagining Subbarao and Chidambaram

Dear Reader,

Hi! Ever since Dr. Subbarao published his memoirs, Mr. Chidambaram has lost his sleep. This piece was published under my column “Tweakonomics” in the Hindu Business Line today. You can see it at; else read it here directly. Enjoy!


It’s memoir time, much to the horror of the UPA in general, and P Chidambaram in particular. D Subbarao, the ex-Governor of the RBI, the original inflation-warrior of India is back, and how! In his book Who Moved My Interest Rates, Subbarao gives a dekko into the strange undercurrents between the Government and the RBI.

Faced with back-to-back droughts, high inflation figures, a scam-ridden coalition Government unable to take decisions and a global crisis, this RBI Governor was known not only for keeping the interest rates high, but also for sticking to his stance unfailingly.

Students of macroeconomics are often taught the IS-LM model, with the IS curve representing the fiscal side of the economy and the LM curve representing the monetary side. But, never have the IS and the LM curves cut each other so sharply, as in the time of the great Subbarao-Chidambaram tussle. The Government was worried about growth, and the RBI, about inflation. Repo rates were high, tempers, higher. Chidamabaram was red with anger. Subbarao shrugged calmly, and raised the rates some more.

Back in the rum old days of the global crisis, Chetan Bhagat was not yet decided whether to become an environmentalist, feminist or a plain economist. But the Subba story inspired him. Looking at some of those super high repo rates in the 8 per cent range, Bhagat decided to go the economist way. He had then offered to write Subbarao’s biography, Eight Point Someone. Subbarao considered the offer with his usual calm countenance, shrugged, and increased the rates promptly.

But this time, despite upping the rates, he was not very calm inside. The writer’s bug had caught him. Bhagat’s offer had stuck to his mind. “But I’ll be damned if I allow this man to write A Fort-Night at the RBI for me. Nah, I’ll write all of this myself! And God knows, there’s enough material here to create an encyclopedia! An entire Chamber of Secrets to be opened. Pride and Prejudice, unlimited. Malice in Wonderland. Oh, I’ll be the definitive Interpreter of Maladies. And to write the Lion, the Witch and the Wardrobe full of skeletons will be so much fun!” His thoughts complete, he was at peace. And he Atlas(t) Shrugged, and raised the rates some more.

He initially had thought of writing the 7 Habits of Effective Central Bankers. It would be a simple book with only one page:

Keep interest rates high.

Keep interest rates high.

Keep interest rates high.

Keep interest rates high.

Keep interest rates high.

Keep interest rates high.

Keep interest rates high.

Even as Subbarao was contemplating the title of his book, Chidambaram started reading The Game of Thrones. He was thrilled by the cutting dialogues, and feeling clever, called up Subbarao. “Inflation is so terribly final, while growth is full of possibilities.” But he had underestimated Subba. The RBI Governor simply said, “Spoke to Modi yesterday. Winter is coming.”

Chidambaram, enraged, tried the Scarlett O-Hara track, “Sir,” he cried, “You are no gentleman! You will be Gone with the Wind!”

Subbarao commented, “Frankly, my dear, I don’t give a damn.”

Chidambaram, ever the wily lawyer, changed tracks to Iron Man. “What’s the point of owning a race car if you can’t drive it?”

But this is Subbarao we talk about. He simply shrugged (Chidambaram turned white) and said quietly, “Jarvis, do me a favour and increase the rates some more.”


Econ Mom, Brexit and the Wimbledon finals

OMG. It’s that time of the year again, when Team Phadke moves into Antagonism Extremis.  As the loyal blog reader must know by now, we, the Phadkes, have never quite taken to the Amicable Extremis family model of the Smriti Irani prototype TV shows. We hate each others’ guts, and we’re superbly candid and proud about it. Even Lil One does not quite like his parents. Even when he was in third grade and all the ickle ones wrote reams and reams of stuff on “What I like about my mom”, Lil One had sat in school with a puzzled expression on his face, really not sure what he quite liked about Mommy dearest. He had finally ventured to write “My mother is funny. She makes faces while telling stories. She looks weird. I think I like her.” I hadn’t quite known whether to fret or be proud of the boy.

Well, so, to come back to the point, we don’t normally see eye to eye on most things, me n Hubby. But our usual arguments (which are fairly Ouch!) seem almost….sweet in comparison, when June arrives. Why? Because, June is TENNIS! The French Open followed by Winbledon, back to back. It’s enough to send our household into a complete, no-holds barred war scenario.

About a decade ago, when the Roger Federer – Rafael Nadal rivalry was at its peak, the June season at our place used to spark some of the worst marital issues ever. Even worse than who’ll do the dishes at night. Even worse than who didn’t fill the icecube tray after last use (That, single handedly is the cause of 73% of the famed Phadke arguments. BTW, it’s always Hubby. Though he’ll never agree to it. I am now thinking of putting in a mini camera in my ice-cube tray just to prove him wrong. Hehehe.) Even worse than who’ll clean the toilets. And that’s saying something. Sigh!

What with me supporting Nadal and Hubby dearest supporting Federer, emotions used to run sky high. French Open and the clay courts would normally bring out the best form in Nadal and the best scowl in Hubby. Oh God, after Nadal won the French Open final against Federer in 2007, Hubby had sulked and sulked and didn’t speak to me till Federer beat him back in the Wimbledon season. That I didn’t speak to him for an entire 2 month period post-Wimbledon is just a logical extension of the argument. Hubby is quite fond of that particular memory and gets this glassy eyed expression whenever he thinks of those two blissful months with me not shrieking at him.

This year’s been no different. “Nadal not playing French Open due to injury!” Hubby piped up suddenly, over morning tea whilst reading the news. “Tch. Tch. Tch. The poor man’s getting old. He should retire.” That came in a gleeful, teasing tone.  He spent most of the day passing idiotic comments on me and singing, “Mujhe buddhaa mil gayaa” and generally making me mad. Heehee. The next day Federer crashed out due to injury. I now joined in the singing fairly enthusiastically. By day end, we were getting on each other’s nerves and had a mother of a fight that evening. Even with both of them NOT playing, we again stopped talking to each other. AAAAAARRRRGH!!!!

Wimbledon was to start on the 27th June; in the meanwhile the Brexit referendum was held on the 23rd. The leave lobby won by a very slight margin; it was 52% voting for leave as compared to 48% voting to remain. I wasn’t amused. “I really don’t understand what they are going to gain by exiting.”I was talking to one of my colleagues on phone. “45% of UK exports are vis-a-vis Europe. How can one expect to create that kind of an export share with some other country? They are worried about the Syrians coming in and taking their jobs. But frankly, if Brexit happens, there won’t be too many jobs around in the first place for anyone to come in and grab. Brexit is so not a good idea!”

I have been reading up by the ton on Brexit analysis that is coming through and the more I look at the issue, I get a feeling that this is going to be one major setback for the EU in general, and UK in particular. Colossally bigger in scale and management than Greece was. The Grexit was about a fiscally indisciplined, small problem-child wanting to exit the family. UK has a fairly big presence in the EU and will create multiple issues upon exit. There’ll be something of a case that EU will want to make out of it and will make it painful for UK to exit, just so that others do not entertain similar fanciful ideas. The pain will obviously come in through squeezed out market access, high tariff and non-tariff barriers against UK, lower accessibility to capital flows etc. UK, which will be at the receiving end of the cold shoulder, does not have an immediate ally such as the US to help them tide over the crisis. Hmmm, Brexit is going to be fairly painful for UK.

“Mom! Are you coming here?” yelled Lil One from the living room. “The semi-final is just starting! Raonic vs. Federer!” OMG. Of course. I hurried into the living room. The tension was palpable. Hubby and Lil One turned blue, green and a delicate shade of yellow as Raonic unleashed those aces on Roger Federer. It was sad. Federer lost the semis and the final would now be between Raonic and Murray.

“I hope Murray beats him 6-0. 6-0, 6-0.” That was Hubby, brooding with a dark gaze on the dinner table. This is interesting. Hubby has never quite supported Murray, whereas I am well, not too fond of him, but I like his game.

“Gosh! Does that mean we ALL support the same player in the finals?” Lil One was quite impressed by the uniqueness of this situation. The poor boy has never quite seen his parents support the same player during tennis season. I wonder if he’ll be able to handle this spirit of bonhomie during Wimbledon finals.

“Yes, Lil One,” said Hubby winking at Lil One wickedly. “I so totally agree with Mom. Brexit is such a bad idea!”