Econ Mom is back!

Hi there, readers! I know I’ve been absolutely absconding on the blog front and have written simply nothing for the past 3 months. But well, I’ve been writing serious stuff for a change. And have come out with something like 10 reports on different aspects of local body elections for the State Election Commission of Maharashtra. And those too, completely formally written, not even a whiff of a joke. Its so not me, and its taken a chunk of my mind to be that serious!

Well, actually, I would have completely given up on Econ Mom, had it not been for Anagha, who’s not only my best friend, but also my blog follower and severest critic. It so happened that we met suddenly, without planning it, both of us after having dropped respective charges to respective classes and enjoying that “I am free for 50 minutes now!” mommy moment. I guess we could both recognize the slightly wild and loony look in each others’ eyes which only mothers are known to identify, and after laughing madly for a minute, got gossiping about this thing and the other.

And after a while, it came to why I’ve stopped writing. “Don’t you stop writing, Econ Mom,” said Anagha wickedly. “People may start thinking that Teenager doesn’t bother you anymore and that Hubby gives you five-star treatment at home.”

WHAT! That is a serious charge. Teenager grows more obnoxious by the day and Hubby, hmmm. The lesser said about him, the better. Nah, this won’t do! So I got down to writing the blog, pronto.

Three months of continuous election research has converted poor ole’ Econ Mom into a Political Mommy though. But I’m not complaining. It’s been exciting, using econometric methods on political databases, and it gives one a rare look into why the economics of decentralization and development just cannot work in this country. The representatives of the people are so ill-equipped to do any which developmental project at even the basic levels; hell, most of them do not even know what their own job is!

Last week. Around 5:30 p.m. The Phadke household was whirring quietly. Teenager was reading a book (I think he’s reading the Wimpy series for the 131st time or something), Hubby was browsing through newspapers, happily humming an old Geeta Dutt number. He was going wrong on the lyrics, but I was too busy to be reacting. Hmm, but it gives me ammunition for a fight later. Heehee.

I was peering quietly into my laptop, which was simply spewing up data on those candidates who had filed their nomination forms and affidavits for contesting the Pune Municipal Corporation elections. Hmm, 36% have a criminal charge against them. Of these, 30% have serious criminal charges- rape, murder, assault. 45% are Crorepatis or have patis which are Crorepatis. Interesting, of these Crorepatis, 45% have studied upto the 8th standard. My stats package gave out a negative correlation between education levels and assets, and I got worked up.

“Nonsense!” I exclaimed loudly.

 Hubby sauntered over, didn’t quite understand the SPSS screen and asked me, with evident interest, “What happened?”

“Oh, I’m so irritated, I can’t tell you. Look at these buggers who’ve got aspirations of becoming people’s representatives. “4th standard pass”, this particular entry says. And this other one is even better. It says the woman is not only B.A., but also XII pass, and also X pass and also 4th Standard. GAWD! If this woman does not understand that when asked for the education level, she has to only tick the MAX education level she cleared, tell me, what does she think she is going to do for my city? AAAAAAAAAAARRRRRGH, I am BUGGED!”

“You’re over reacting, honey. It’s ok, give that poor woman a break!”

“You know what? I would have, had there been one of this type. But there are something like 217 such completely idiotic applications and they feel they can represent ME!”

“Mom? Don’t yell. I’m getting disturbed. A child can’t even read peacefully in his own home these days!” That was Teenager, making stupid remarks, but quite obviously enjoying the “Mommy is mad at someone else” moment.  

“And you know what, young man..” I turned to Teenager, sharpening my claws for an attack, when the doorbell rang.

“I’ll get it!” said Teenager hastily, getting out of intellectual harm’s way.

Two women, wearing saris. Stoles around their neck, bearing the symbol of the political party they represent, were standing at the door. Teenager was quite taken aback at the visitors and hollered for me.

“Namaskar!” said one of the women. “I’m going to be contesting the election from this Ward and I thought I’ll come and see you all…”

“Oh! That’s so nice of you! Please do come in. You must be tired with your campaigning!” I was a bit intrigued that a candidate had come home.

She was a bit reluctant but did come in and accepted a cup of chai. “So Madam, why should we vote for you?” I asked her chirpily, even as a sharp intake of breath from Hubby told me that I was being rude.

“Ummm…” she faltered. I think she too was a bit taken aback at being asked this so openly. “Because…because, yes, because I’m going to really work for this ward!” she concluded triumphantly, with the other accompanying lady making strong, encouraging noises to egg her on.

“And, what work have you done in the past, Madam?” I asked, keeping my voice non-threatening and as even as possible.

“She has done great work!” That was the companion. “Last year, she held a vaccination camp for polio vaccination! You really should vote for her!”

“Madam, it is Amitabh Bacchhan who gets the mothers into the camp with the Do Boond Jindagi Ke campaign. You have to tell me what it is that YOU have done about it!”

The lady was scared by now. “Yes! I remember! I…I..I held a Haldi Kunku in the Sankranti festival!”

The Companion nodded vigorously. “Yes! Haldi- Kunku! And she distributed gifts and spread cheer and good will! You really should vote for her!”

By now I was upset. As in, really getting into top form.

“Madam,” I began in my most steely voice (somewhere in the background I could see Hubby making frantic movements to get me to stop), “people in this ward really want some development. You have to tell me your plans for solving the traffic issue, for segregation of wet and dry garbage. I need better streetlights and safety. I can NEVER park my car anywhere in this God forsaken ward; you have to create parking spaces (My voice had climbed up 10 decibels and I was unstoppable). You can’t be serious, Madam. Your pitch for my vote is extremely weak; unless you tell me your solutions for my problems, how do you expect me to vote for you?”

The women were looking extremely frightened by now.

Hubby pitched in helpfully. “Oh, don’t worry, Madam!” he said in a booming voice. “She says that to every candidate! She will definitely vote for you!” (Teenager was busy suppressing a giggle). I glared at Hubs.

“No, I won’t. Tell me your plans, Madam!”

Madam was looking positively scared.

“Well, actually I don’t really have any such plans..But I still want you to vote for me!”

I think even she realized how terrible that sounded. And then, the poor poor woman ventured in a low voice, “Ma’m, I really don’t know what plans to talk about. Could you advise me, what should I say to the voters?”

I must admit, this threw me off balance. I wanted to laugh out aloud. Oh, the irony of it! The candidate was asking me what she should tell other voters! But I recovered, quickly, I must say. And I informed her snootily, but quite kindly, “Madam, you need to tell people your vision for this ward. For example, there are no parking spaces. Parking cannot be planned horizontally in a growing city. Build a 14-storey parking tower in Kothrud!”

“Why 14-storey, Madam?” The Companion asked me idiotically.

“Aaaaaaaaargh, any number of storeys will do! Rather these storeys that stories!” I caught Hubby’s eye, seeking appreciation for my well-placed pun. I instead got a “Please stop talking” look.

“Tell people how you plan to have compost pits in gardens or something like that..”

“Wow, Madam!” said the candidate, suddenly full of confidence. “Bas, this is it! I am going to put in a 14-storey parking tower in Kothrud…and have compost pits!” She had the damn thing by-heart.

 “Well, now, people want an educated candidate in the ward, and someone with Community Building experience, Madam..I am a researcher with the State Election Commission and see these reports?” I waved some of my reports to them…”In these reports, we’ve created strategies for…”

Hubby and Teenager were rolling their eyes at each other.

But the women were done with me. “We really really need to leave!” They said hurriedly.

“You have to vote for me! I’m going to put up a 14-storey parking tower!” The lady told me sheepishly on her way out. The Companion nodded vigorously. “Yes, yes…lots of parking. Vote for her!”

And that was that. As I closed the door, Hubby shook his head at me. “Have you lost it, woman? Why the hell did you wave your reports at them? Gawd, you positively terrified them, Manasi..please control yourself.”

Teenager was on the phone, talking to Best Teenager Friend. “Embarassing. She keeps on and on about her election work. It’s ok petrifying people outside home. At least I can pretend I don’t know her. But at home! Can’t even claim I don’t know her!”

Just then, the doorbell rang…

“We come from the best political party in town! We’ve got you your voter slips!”

“Oh, won’t you come in?”I said icily…And Econ Mommy continues…

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Econ Mom, voter perceptions and a dash of Tennyson

“Hi, Mom! What’s for dinner?” That was Teenager, back from his badminton practice at about 8:00 p.m.

“Well,” I said enthusiastically, “there’s roti, beans, dal and carrot raita in curd!” That was me, happy and secure in my belief that I’m feeding all the right stuff to my family.

“What? Beans? Uuuuuuuuuugggggggggggghhhh. NOONE eats beans, Ma, except us. And we eat it every third day! Beans, potato, beans, brinjal, beans, capsicum, beans…?”

I looked at him speculatively. Teenager has taken this one thing from me, for sure. He can exaggerate. The boy can have a golden career as an economist, I started thinking. “The GDP growth rate of India is 7%, nnnno, its actually 7.3%, nnnnnnnnaaahhh, it’s more like 7.8%!” Yeah, he can really do a fine career out of this wonderful trait. Put him in the RBI, and your CPI will go crashing down to 4% or wherever it is that Urjit wants it to be. Put him in NITI Aayog, and you will get your growth numbers right. Put him in the Commerce Ministry, and India’s trade to world trade ratio will cross the dreaded 3% psychological benchmark in a matter of minutes! Heehee, the boy has potential, I tell you. He simply HAS to become an economist.

“I am NOT going to eat this! Give me something interesting, Mom, I’m hungry! And I’m bored” That broke my reverie and jerked me back to reality. And the reality is that teenagers have absolutely no clue or interest in any career profiles. They have only two massive sensations. One, hunger and two, boredom. Sigh.

“Beans are great for health! And …”

“Mom, why can’t you make Chhole-bhature or pasta for dinner?”

“Because the former is oily and the latter is maida. Only calories. No nutrients. Beta, dinner has to be healthy! And this week, we’ve not really had beans for about…”

“20 hours,” piped in the Hubs, with a sly smile. “This time she has really broken all records and cooked beans within the usual 24 hour deadline!”

“Oh, shut up, both of you! And boys, you can’t declare a strike at 8:00 p.m. Food is ready, I am beat and I am not going to cook anything else. It’s too late for that.”

“This is so not fair!” Teenager, indignant with rage and upset at the gastronomical disappointment. “If it’s not possible to change the menu at the last minute, then ask me earlier, Mom. Next time, ask me when you go shopping for veggies. ONLY the vegetables I approve should be bought next week. Else you’ll keep on dishing out what you feel is right…”

That’s interesting! Thought Econ Mom, surfacing suddenly in Mrs. Phadke’s kitchen. Hmmm, isn’t that exactly what the State Election Commissioner had been saying, just a couple of days ago, in our meeting at Mumbai?

“We need to take a look beyond our usual role.” The Commissioner, as always, had come well prepared with his ideas on what needs to be done. “The role of the State Election Commission of Maharashtra (SECM) is to conduct local body elections in a free, fair and transparent manner. And we do that, to the best of our capacities and abilities. But the real question is, even if the election is conducted fairly, are people really getting a fair choice to choose from?”

For the uninitiated reader, let me just put in a little bit of gyan. When the candidates file their nomination forms for an election, that is when the voters come to know what is the mix of people from which they select a people’s representative for themselves. With great foresight and I must say, with a lot of gumption, the state of Maharashtra offers a “NOTA” i.e. “None Of The Above” option for its voters, so that the voters do not have to always choose the least of all evils. They are getting a choice to say that they want none of the candidates at all. And this, is supposed to be an absolute triumph for democracy.

However, deeper thought tells you that while NOTA is great for freedom of expression, the fact that hordes of people have this expression is itself worrisome. Thus, what is happening is that candidates filing nomination do not match the expectations of the electorate. The authorities know this, but they can’t do much about it. So, they decide to give the NOTA option to the electorate so that their voice can be heard loud and clear on the day of the election. “We do NOT like these candidates.” The problem is, that it is kinda late to do anything about this, just pretty much like it was too late for me to cook a different recipe for Teenager at 8 p.m.

“The true solution is to give them a voice before the elections.” That was what the Commissioner was saying in the meeting. Is it really necessary to do that? Even while this thought hit my mind, I got the answer. “Our job is to do everything in our scope to strengthen democracy. If the electorate is not happy with the candidature, we can’t just sit around offering NOTA. NOTA might bring the issue to light, but it certainly does not resolve it.” NOTA is the dressing on the wound. The team was brainstorming on why there is the wound in the first place.

And out of that emerged one solution. Accordingly, we’re currently doing a snap poll on voter perceptions, or what the voters want. What kind of a candidate do they really want? Do they want people who are clean, or is the priority on efficiency? How many voters feel that candidates ought to be well-educated in order to be a good representative? What proportion of voters feel that women make better representatives than men? How many people are of the opinion that good candidates stay away due to criminalization of politics?

Data analysis will soon reveal voters’ preferences. This is to be done prior to the filing of nomination forms, so that the political party heads too will get a pulse of what the common man wants. This will hopefully feed into a more scientifically designed ticket distribution process, with at least a few deserving candidates getting the tickets. Rather like buying only those veggies that Teenager approves of. This will truly give voice to the electorate and make the process more participative, which is exactly where we want to go, right?

Right, but, will this work? Even if the data analysis brings out these trends, are political parties going to toe the line? Are they going to go by statistics, or by the simple chemistry of dynasty and money? We all know the answer, don’t we? Then am I doing something futile? Why should we create this data-base on voter perceptions when we know that the true users of this data, the political parties, can, but won’t use it?

I sat in my chair, post dinner, brooding over the futility issue, when Teenager started a discussion with Daddy dearest on poetry. They were both arguing about what a line in some poem meant. I was far away from the discussion, disturbed and restless. Suddenly, Teenager propped his English text in front of my eyes. “Mom? Have you ever read these lines?” he asked.

And Econ Mom found her answer. In a dog-eared literature text-book. The answer to why a scientifically designed statistical survey has to bring out voter issues, political parties be damned. “Tis better to have loved and lost”, said Alfred Lord Tennyson, “than never to have loved at all.” Bravo.

 

Surgical, Purgical and Mergical Strikes in the Indian Budget

The surgical strikes carried out by the Indian Army have taken the imagination of the country by storm and rightly so.

In the meanwhile, “Surgical strike” has become the absolutely new buzzword in town. Such is the lure of the word that Chetan Bhagat has immediately decided on his new book: Surgical Strike-Point-(at)-Someone. The fellow is simply incurable.

Newshour has declared 8 weeks of Surgical Strike analysis and apparently been calling up Pakistani politicians furiously to book their dates for the period. This single-handedly has caused dizzying levels of relief for Indian politicians, who for the first time in many days, feel completely free to make idiotic statements and mini-scams without fear of being grilled by the One and Only. The PR team of the UPA scion’s Kisan Yatra is said to have collapsed amidst mingled tears of joy and relief. The Kisans though, are on the run.

B-Schools, tired with meaningless terms such as “leveraging marketing strengths to enhance ground zero” are simply overwhelmed by the discovery of such a powerful new word. Harvard Business School has now officially included a new strategy in the corporate mantras: The Strike with a capital S. Bewildered students are now being asked to “leverage marketing Strike potential to enhance ground zero”. Financial Management Journals, which hitherto described “Strike Price” as the price at which a security can be purchased due to an option, now also include the definition of the “Surgical Strike Price”. This is the price at which security can be enhanced when no options are left with us anymore.

Amidst such corporate celebrations, however, the FM has been sulking. Had he known the term before, he could have leveraged it to enhance ground zero, errr, to highlight main points of the fiscal policy. How? Well, getting the GST passed was no less than a surgical strike, was it? To trump the Opposition in LS elections so as to get the majority in the Lower House, and then to diplomatically isolate them by highlighting their attempts to stall the Bill, was just the start. And then, those incessant sessions with the State Committees to understand the sticky issues and accommodate the sensible demands. Hadn’t he too, spent sleepless nights, before the passage of the Bill?

Take the case of removing the Plan – Non Plan design of the Budget.  For the first time, the Budget will be presented, way before its usual February date, without the usual priorities as suggested by a Five Year Plan. The Budget accounts will only be classified into the Revenue and the Capital Accounts, with zero mention of the legendary Plan and Non-Plan Expenditure classification. To remove the influence of the Five Year Plan from the Budget as well as do away with a separate Railway Budget has been no mean feat; a “purgical” strike, anyone?

Hmmm. And that masterstroke of creating the Monetary Policy Committee (MPC), while at the same time allowing the Governor the autonomy of a casting vote. He had simply changed the dynamics of the game; now there would also be growth combatants together with inflation warriors within the RBI. He had successfully merged growth objectives with inflation management, and how! “Oh, I should have called it my “mergical” strike” he thought wistfully.

Of course, the decision of the MPC, in its very first policy review, to slash rates has not gone down well with all economists. Dr. Rajan, the erstwhile Governor shuddered delicately in Chicago, when quizzed about his reaction to the rate cut. “It’s more of a “splurgical” strike,” he said. “A classic case of too many cooks spoiling the Booth.”

 

Econ Mom as the confused driver!

Aaaaaaaaaaaaaarghhh! It’s been such a nutty week and poor Econ Mom is a complete, total, confused mess.

It all started a couple of weeks ago, when my car started making strange noises on applying the brakes. Now, a good ole Honda doesn’t ever create any which noise, forget strange noises, and I was spooked. I tried applying the brakes fiercely, gently, with a smile and with a professional pan-face. Nope.

The car wouldn’t be persuaded and was taken off for an overhaul. In the meanwhile, the Hubs sweetly offered me his car. I’d have liked it with the Hub-chauffeur, but no such luck. I got only the machine minus the man. And the main problem is that it is German.

We, of the Honda tribe, detest German engineering. Gott im Himmel! Hubby’s Polo doesn’t start till you apply some serious muscle tension to the key; and the reverse gear is the first gear plus tension. I tell you, I was unused to such tension in my regular driving life and it was freaking me out.

But, you don’t know the worst yet. The Polo indicator controls and the wiper controls are on the wrong side. The Germans may be marvellous at engineering, but the idiots don’t know their left from the right. OMG. This is magnificiently spooky. I was feeling like a right wing economist being forced into writing a poem “In Praise of Marx and Controls.”

The first day on the Polo and some weirdo who came from the opposite side of our super narrow street flashed his headlights at me. Now this, is a pure-ghee Indian driving phenomenon. The person flashing lights first apparently has the moral right of way, other things be damned. “Oh yeah, I’ll show you who goes first,” I thought viciously and flashed the light indicator viciously to be met by a most efficient German water jet on my windscreen, causing me to jump madly in my seat. “Hell,” I thought, automatically moving my left hand towards the wipers, in the process switching on some indicator lights. “Oh, this is really quite merry”, I thought with gritted teeth as cyclists and bikers behind me started to swear, not quite sure where I might eventually turn. By now, in addition to switching on all possible headlights and indicators, I had also started the wiper on the backscreen. My car does not have the feature and I was terrified. Germans, you back stabbers!

I had a real bad first week with the Polo. Even the radio wouldn’t play soothing songs and after listening to that idiotic woman pleading “DJ waale babu mera gaana bajaa do”, followed by Yo-Yo Honey Singh informing me conversationally in the middle of the downpour that “Din Hain apparently Sunny Sunny Sunny Sunny Sunny Sunny”, I was completely disheartened. I had had it.

Hubby was absolutely enjoying the whole process and had started taking unusual amount of interest in my daily “Aaj ki Polo khabar” ravings and rantings. After listening to my conspiracy theory on how the same radio stations were playing different songs for the Polo drivers, he couldn’t control his glee at all. “You could try writing “Who moved my indicator controls? We’ll get Subbarao to write the foreword for your book,” he suggested wickedly. “Oh, shut up. I’ll write Econ Mom and the Cursed Car instead,” I muttered darkly.

Sigh! As if I did not have enough on my plate, J K Rowling, of all the people, had decided to come out with a badly written book.  Lil One and I had quite a merry little boxing bout the day it arrived home, which I won mostly by virtue of tickling him (“That’s cheating, Mom!”) and then packing him ceremoniously off to school. But I was so badly, badly disappointed. The max humor content the book has to offer is when Albus Potter tells Scorpio, “Yeah, you can’t be Voldemort’s son. You’ve got a nose!”

Oh, really. C’mon, is this Rowling? To read a Potter without the witticism and the detailed plots and well-developed character nuances was such a culture shock. It was exactly like putting a Honda driver into a German car.

And then, the GST Constitutional Amendment Bill was passed. Such a rude shock for us economists! I mean, how could they? The monsoon session had started properly enough, with Rahul Baba dozing off and the rest shouting madly. Now, technically, this fervour had to be followed up with paper balls, flinging of chairs, and well, maybe pepper spray for high drama. Chidambaram had to shout that the NDA does not know its economics, and Subramaniam Swamy had to follow it up by saying that nobody in the world knows economics. An apoplectic-with-moral-rage Arnab, falling markets and a witty Tweakonomics piece by Yours Sincerely would wrap it up nicely.

So there I was, waiting for the Amendment not to go through, when it went through! Unanimously! And that is BIG news. It’ll mean a lot of changes in the short run, but the longer run gains should make up for the trouble. A single-window for indirect taxation, lesser administration, more transparency, lesser subjectivity in assessments, lesser time in transit and hopefully, a fair sharing-between-states system. It is what every economist had dreamt of.

And yet, there I was, confused. How can the UPA behave so professionally? Now whom will we blame for the low-pace in reforms? When you have all politicians rooting for taking reforms ahead, rather than play their own silly partisan games, it creates a rude shock in the minds of innocent citizens like me. Exactly like putting a Honda driver into a German car.

Epilogue

After driving the Polo for about 10 days, I got my car back. Oh, the feeling! I could have run to it and honked in slow motion! God must have sensed the romance and sent a small drizzle my way.

I immediately sat in my car and then, to my horror, started reflexively moving my right hand to start the wipers. To my consternation, the indicator lights started ticking, while the wipers wouldn’t budge. The radio informed my frayed nerves that “Hafte mein chaar Shaniwar hone chahiye”. OMG. Now I’m a German driver in a Japanese car. Help!

 

 

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!”

 

 

 

 

 

 

 

 

How to be Economist

Become an engineer

This is crucial. If you aspire to be Economist, it absolutely is crucial that you don’t enrol for an undergrad program in Economics. Do not let those marginal microeconomic nano-particles get into your systems at the margin while in a carefree, young age. Get an engineering degree instead. Our professional field is anyway full of engineers. Might as well get an engineering degree and learn how to change a light bulb or do something useful.

Since you are an engineer, they will automatically assume that you know Maths (only other engineers know that you don’t) and will unleash some crazy Hamiltonians onto your poor, innocent, relatively harmless engineering mind at Masters level. But look at them in the eye and pretend that you can see the solution. Just pretend. Remember, they cannot. So, you pretending to know will be enough. Just wind up the discussion by saying you can’t quite see that second differential equation getting solved in three variables, and say that you’ll submit the solution for the third variable hopefully by tonight. That should get them into a right sweat.

If engineering is really not quite the thingy for you, any other stuff will do. A nice major in Literature should do quite well, except that they’ll automatically assume you don’t know Maths and will unleash some crazy Hamiltonians onto your poor, innocent, relatively harmless literary mind at Masters level with double zeal and energy. Look at them in the eye and pooh-pooh it. Oh yeah. Just do what I say. If you have a bit of an actor in you, say with hitherto unsuspected vengeance and contempt,” Maths is just a tool to reach the solution. Once you get there, call me”. Gently drift away, leaving the buggers open-mouthed.

Pssst! You already are in the second year undergrad Economics? How could you, my dear…but, ok, let me tell you, all is not lost. So this is what you do. Ignore the texts. Um-hmm, you read right. Ignore it. It is important to remember that you can’t take the marginalists too seriously. They are designed to make young kids crazy with marginal ideas.  Clear your exams, thank the Almighty and move into an MBA degree immediately.

It’s full of engineers too, who are busy trying to act like they understand stock markets immaculately. Unleash your frustration onto them. Use the word “marginal” into every statement of yours. Tell them that their stock market analysis might just work using the law of averages, but if any kind of a downside risk enters the domain at the margin, then the marginal effect may just create unnecessary tensions in the system. Gosh! What an amazingly stupid statement! But believe me, they like this kinda stuff.

But, I dither. Because this blog is about how to be economist. If you are in an Economics undergrad program, you are already not in the right queue, dearie. You’ll have to move into that MBA. Wait for my next blog on “How to be MBA”.

Learn music

It is important to have a taste in music. The more eclecticer your taste, the exoticer you are as an economist. Its alright not to understand repo rates, but the Lord help you if you don’t know breathing under water. Nah, dear, I am not talking about actually breathing under water. We economists are not about doing the physical underwater stunts right. That we can cause entire economies to submerge under debt burdens is another thing altogether. I dither again, right? Well, so, Breathing Under Water is an Anoushka Shankar album.

Also learn to hum, especially with clients who are anxious about some forecast gone wrong. That helps them to breathe underwater, sorry, couldn’t resist that one; that helps them to breathe easier because they think you know how to troubleshoot. Trouble is you don’t. So, hum. It has multiple benefits. It eases your mind, calms the client and saves you the trouble of doing stupid small talk. Also, if the bugger sitting opposite you also starts humming, it’s time to hum something even more exotic. Even the worst will shut up when you eventually hum Yo-Yo Honey Singh. That man always works.

Write a paper titled “The wage differential in paddy field cultivation in two adjacent districts in West Bengal and Orissa: Is it a cultural overhang?”

By this time, they will be eating out of your hands. You have just delivered the perfect six. Remember, the key words are paddy and overhang. You can substitute cultural with sociological, political, paternalistic or coastal. It does not matter. If you can overhang, please do so immediately. Also, look out for a real exotic journal to get the stuff published in. “The International Journal of Regional and District Dynamics” should do the nicely. There. You are almost ready. One last thing..

Grow a beard

Men, you really really need this accessory. It creates several delightful options in the mind of anyone who sees you. A bearded economist could be

  1. Leftist
  2. Communist
  3. Communist-rightist (That’s tricky)
  4. Rightist, with a left past (My fav ones!)
  5. Leftist, with a right past (Nope. Not happening.)

It leaves the client in dilemma, whilst you hum behind that beard. If you are a pathetic singer, the beard provides just the right amount of muffling. If you are humming Yo-Yo of course, no muffling works. If you are a good singer, the hum plus the beard is an extremely reassuring signal. I’ve even heard that the beard protects you from face burn whilst on the paddy field to do your dissertation on cultural overhang.

I know, I know, you are thinking what do the girls do? Simple. Try the bindi. You either need to wear a huge one or don’t wear one at all. The huge one creates a Smriti-Sushma effect and the zero one pushes you into Didi mode. Both images have been known to help in making the entire world sit up while you do your forecasts in style. Remember, earrings are prohibited, unless you are male with no beard.

Are we ready?

 

 

 

 

 

 

 

 

 

Econ Mom, a Goa vacation and the Tiebout model

Disclaimer 1: Econ Mom is an economist and hence has basic inherent rights to drool on and on about issues that may not be fun/ relevant/ interesting/ exciting/ amazing according to you.

Disclaimer 2: Unless you read all the serious boring stuff on public finance in the beginning of the blog, you anyways won’t understand what Econ Mom is thinking at the end of it.

Disclaimer 3: Yeah, sure! There’s wickedness coming your way, but you are going to have to plough through the basics for that. Lazy readers are advised not to read on.

Disclaimer 4: Econ Mom reserves rights to appear when she feels like in the blog. In the present one, she chooses to appear only in the end. What the hell, it’s MY blog! So here goes..

I have been reading up on fiscal federalism these days. It’s a part of my research interest.

Centre-State fiscal relations mainly span the collection of taxes and sharing of the same. While control over taxes is defined constitutionally under the “Union list” and the “State list”, the sharing of the same has been mostly formula-driven, again constitutionally. The Constitution has provisions for creation of the “Finance Commission”, which can then really decide how the Centre shares its taxes with states.

And then, there is also the Planning Commission, which willy-nilly, has played a part in Centre-State relationships. Well, even the Planning Commission has used some kind of a formula (the Gadgil-Mukherjee formula or some version of it) for tax sharing with states; however, not all tax shares are governed by formulae. Increasingly, in a reforms driven India, there is evidence that states received tax shares based not only on their economic fundamentals as encompassed in the “formulae”, but based on their political goodwill. Thus, states going to elections have received more tax shares, states that are politically more “aligned” with the Centre seem to have received higher tax shares.

Thus, a lot of modern empirical literature is into proving the existence of a political economy factor in determining Centre-State relationships. In my readings on the subject, I kind of went into the subject in a reverse timeline. I stumbled on a really interesting paper by Stuti Khemani (World Bank 2003) in which she spoke about how “political alignment” with the Centre has been a central idea in a 2001 paper on Swedish municipal councils. So I got reading that, which put me on an Avinash Dixit paper written in the 1980s on a game theoretic approach between two levels of Government. And well, since by now I already was neck deep into the subject, I decided to go backwards the whole way to the Big Bang, which happened in 1954.

The Big Bang of Public Finance, so to say, was created by Brahma, Vishnu and Mahesh. They just have different names in our field, and are called Paul Samuelson, Richard Musgrave and Charles Tiebout. And then there are plenty of other deities such as W. E. Oates and James Buchanan, who lent their mental Vajras and other weapons to sharpen the arguments.

The entire discussion started with Paul (Brahma) Samuelson defining public goods; his argument was that since the consumption of public goods (such as a street light) is necessarily, well, public, no one will be willing to pay for the same and hence, the market by itself will underprovide for the provision of public goods. In other words, capitalism may be wonderful. But free markets do not provide optimally for public goods.

Vishnu aka Richard Musgrave took the discussion further and classified public goods to be “non-excludable” as well as “non-rival”.

Hmmm. Nice. But it is Maheshji’s job to provide the necessary churning to the world created by Brahma and Vishnu, right? So here goes.

Enters Charles Tiebout, with a radically different viewpoint from the one provided by Musgrave. Says, are public goods always “non-rival”? Nnnnaah! Not really! Especially, if we are looking at “local” public goods such as a public park. Sure, you can’t exclude anyone. So it definitely is non-excludable. But it’s not always “non-rival”. If there is too much crowding into the park, then there exists rivalry in consumption of the good.

So, this is what Tiebout says. He firstly puts forth an idea that we need to look at public good provision from the perspective of a “local Government”. He likens local Governments (like Municipalities) to suppliers of different baskets of public goods at different prices (taxes). If a household does not like either the basket of goods that is being provided or the price at which it is being provided, then it can “vote with its feet” i.e. it may well choose to migrate away from that locality to another wherein the supply of public goods and its price matches its utility. This solves the problem of preference revelation effectively, as people’s preferences and their utilities get revealed through their decision to migrate. It is exit, rather than voice, that helps to reveal consumer preference.

Local Governments can closely observe the utility profiles of the public and hence, would be able to tax the people more accurately. They also are able to gauge the optimal quantity of public goods that need to be provided in an area. Thus, provision of public goods ought to be done by local Governments, who can then also tax the public for the provision.

Thus, according to Tiebout, there does exist a solution to the problem posed by Paul Samuelson. Provision of public goods need not be always sub-optimal; you just need local governments to take care of the thingy! Let local governments compete and voila! Optimal public goods is what the public will get.

What an interesting theory! He is suggesting that there is effectively, a political solution to this rather economic failure of the market mechanism. Politics to solve economic problems! What a wonderful thought! Though extremely impracticable, as Econ Mommy realized on her vacation to Goa. Yup, Goa it was, this year.

Goa. Blue skies, endless lines of coconut palms, backwaters, mangroves and the sea! Simply marvellous! We felt our spirits turn distinctly salty (just joking, guys!) as we drove down to the sea from Pune. The drive down the quaint little villages was just the balm I needed for my tired body and soul.

“We three are just like the three friends from Dil Chahta Hain,” suddenly announced Lil One with a grin at us. “We’re driving to Goa and we are really cool! At least….I am!” he said uncertainly, looking at the not-so-cool parents. Sigh!

“So who is Aamir Khan?” I asked no one in particular and grinned to see all three hands raised in the car.

Lil One felt he was the truly wicked one and hence qualified to be Aamir Khan. I was Saif Ali Khan, since I was always getting teased by the other two and Dad, he said loyally, was the thinker. Akshay Khanna. Hmmm…

Hubby, on the other, said that it was far too much fun pulling Lil One’s leg and hence Lil One was Saif and he himself, the leg puller, was Aamir. “Mommy’s Akshay Khanna,” he said with a grin, “because she is the sentimental types. Cries on seeing that foul movie. Whatisit called..”

“Kabhi Khushi Kabhi Gam,” supplied Lil One helpfully and suddenly extremely high energy. “And Hum Saath Saath Hain..And Dad, do you know, she was crying watching Kuch Kuch Hota Hain yesterday!”

“Oh, shut up,” I said. It’s their favourite topic these days. Tell me, is it so bad to cry on seeing a movie? Yeah, I mean, even I agree that those movies are complete nonsense, but God alone knows why, Karan Johar makes me want to wail real real loudly, the bugger. I have given this a lot of thought as to how this happens to me and this is my analysis. I think my defences are already lowered by the complete lack of any brain usage for around 50 minutes and then, when I see all these idiotic melodramatic situations, it causes me to cry.

Sorry! I come back to Goa. “Who runs a humor column? I do! That means I qualify to be Aamir Khan!” I said bossily causing Lil One and Hubby to make rude faces at me. “And in any case, only I can sing Tanhai…it’s way beyond your skillsets, got it, boys?” The boys looked sulky about it. Hubby looked positively alarmed at him being chosen to be Saif Ali Khan because he can do the “flap flap” dance, and Lil One happily hummed “Kaisi hain hain, ruta kii jisme”.

We stopped in a picturesque village lane for a small picnic. And sauntered out of the car after our meal, just looking at the pretty little houses with slanting rooftops. Every house has a small yard in the front, mostly hosting coconut palms, with the familiar pepper creepers running up them. How pretty! Hubby said with a real longing in his voice, “Manasi, I wish we could settle here. I could stay here forever!” He had said the same in Kerala. “Goa or Cochin?” I asked with a grin. “Well, both!”

It is such a tempting thought. If you think of what a life you can have in Goa versus the one you have in Pune, Goa takes the cake and eats it too, royally. Look at the basic infrastructure. The roads are so beautiful. I mean, if you can have those smooth kind of roads when you are simply swamped with monsoons, I wonder why Pune has to have road-shadow, even when we lie in the rain-shadow zone. That brings me to the second point.

Rains. Water. OMG. To see all that water and greenery in Goa, just across the border from Maharashtra, was such a slap in the face. I have recently been on the roads in drought prone zones in Maharashtra and we all know about the monsoon issues that Marathwada and Vidarbha are facing. And in Goa, there is simply no water problem at all.

Plus, its cheap. Oh no, not the hotel stay. But petrol at Rs. 59. Aaaargh! And the basic fruits and vegetables. Its so cheap! There were hawkers on both sides of the roads into Goa, hawking mangoes, coconuts, jackfruits, karmals, karvandas, bimlis, bananas. It was really too much for my poor vegetarian soul to see all these fruits being hawked so cheap. I took it personally and gorged so much on the fruits in Goa in the last one week that I think I have single-handedly caused the fruit prices to go up. That last wrinkle on Dr. Rajan’s already lined forehead (no, not that big one, that one was created by Subramaniam Swamy), yeah, that little one there, that’s the one I created with the inflation index going up one tiny little notch, all thanks to my gluttony.

There aren’t too many things I agree with Hubby on, but this one was really really tempting. Wah, to settle down here! But what about our careers. And Lil One’s schooling. And our friends. And family.

Households are not really that mobile, after all. Even if Municipal Corporations are service providers offering baskets of services, households don’t really move around freely. Their personal choices come first and hence, even with the most tardy of service offerings, people stick around with the Pune Municipal Corporation (PMC).

Thus, even with decentralization and creation of municipal corporations and gram panchayats competing with each other, we may not really find optimum provision of public goods taking place. And what that means is that people will keep flocking to the Tier 1 and Tier 2 cities, causing their municipal corporations to really crash under that huge migratory burden. Consequently, public goods provision will be bad.

But the so long as the losses on the public life are more than made up by gains on the personal front, people will be okay grumbling about it and life will go on, in a most un-Tieboutish manner. The Tiebout model goes wrong, because it makes the most impractical of assumptions, such as assuming perfectly mobile households.

Oh, why is it that the most interesting ideas are the ones that are mostly impractical?

Epilogue:

I came out from the waters and walked to Hubby, who was lounging in the sand, enjoying himself. He was singing. How romantic! I thought. May be he’s singing, “Sagar jaisi aakhon waali…”

Hmmm. He looked into my (sagar jaisi) eyes and sang, “Ye kahaan aa gaye hum, yoo hi saath saath chalte!”

Aaaargh! Why is it that the most interesting ideas are the ones that are mostly impractical?