Gujarat’s Economy – A Microcosm of What Ails the US Economy
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Dr. Susmit Kumar, Ph.D.
A politician’s job is to win elections, and after winning elections it is duty of his advisors to guide him in running the government. As discussed in my article Modi, the Best PM, India Has Ever Had, but He Needs to Stop Viewing India from the Prism of Gujarat, Mr Modi is the best Prime Minister, India has ever had. I will never doubt his sincerity and zeal to make a difference in the lives of ordinary people in India. But he is not getting good advice on the economic front. As discussed in my aforementioned article, Mr Modi needs to get out of his Gujarat-development mindset to come up with economic policies that would result in job-growth also along with the GDP growth.
As shown in charts 1, 2, 3, 4 and 5 below, the economy of Gujarat displays the same defects as the US economy. As discussed in the December 10, 2017 Hindustan Times news report quoted in Chart 1, despite increasing shares of both manufacturing output in the national economy and productivity, wages are lagging in Gujarat. The average productivity of a worker in a Gujarat factory – 1.8 times the all-India average. But the average factory wages in the state are less than the national average and among the lowest when compared to similarly developed states. On the other hand, Gujarat’s share in national manufacturing output was 18.5% in 2014-15, up from 13.8% in 2000-01. But the state’s share in the national manufacturing workforce, at 10.3%, is proportionately much lower and hasn’t changed much during the period. It indicates that growth was mostly driven by capital-intensive industries that created fewer jobs. India, the second most populous country in the world, needs more and more jobs along with the GDP growth.
As shown in Charts 2 and 3, the US wage as a percent of the GDP is at the lowest since 1940s whereas the corporate profit as percent of the GDP is the highest in the same period, i.e. workers are not benefiting from the increasing corporate profit. Except Chart 1, all other Charts are from my forthcoming book "India is a Country, not a Company - How Anglo-US 'Imported' Economists Misled and Mismanaged the Indian Economy" (out in a month). The book has 66 charts and tables to analyze the Indian, US, Chinese and global economies.
Modi, the Best PM, India Has Ever Had, but He Needs to Stop Viewing India from the Prism of Gujarat
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Dr. Susmit Kumar, Ph.D.
The present economic superpowers, apart from the US, China, Japan and Germany, have not become strong by following the US economic policies. Instead, they came up with their own economic policies to get to the economic superpower level. After passing the bachelor examination, without hard labor/study, dedication and good planning for a significant period one cannot get selected in the India Administrative Service (IAS). Similarly a country needs the same to become a superpower. Till now situation in India has been like a student who is just scrapping through the college examinations. India is in urgent need of a leader like Deng Xiaoping who can come up with a plan to take the country to its proper place, i.e. a superpower level in the world.
Trade Deficit and India’s Missing USD 1.5 Trillion FOREX
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Dr. Susmit Kumar, Ph.D.
China and India launched economic liberalization about the same time in the early 1990s, but whereas China is now the global economic leader India is nowhere. During these years, India have run trade deficits year after year whereas China had trade surpluses, enabling it to amass four trillion dollars of FOREX (FOReign EXchange), making it the undisputed country to replace the US as the world’s number one economic superpower. Yes, the growth rate of India in the last couple of years is the highest in the world but it is vulnerable to economic collapse, due to an economic crisis resulting from generating trade deficits year on year. Without trade surplus, India cannot even dream of becoming a super-power, and in the last 30 years trade surplus was not a priority of any Indian administration.
Like Lal Bahadur Shastri, Modi Should Go For Full Scale War If Attacked Locally by China
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Dr. Susmit Kumar, Ph.D.
There are reports that China has been amassing a large military force in South Tibet because of the tri-junction (where borders of India, Bhutan and China meet) border dispute with India. After winning the undeclared war with its neighbors and the US in South China Sea, after building several illegal artificial islands as military bases, China is trying to intimidate India. India is the only Asian country, with its world’s third largest defense forces, capable to stand before China. It is in the best interest of the US and its Western allies as well as of East Asian countries, to support India, in all possible ways, against China because this war would have profound consequences on containing the Chinese belligerence against its neighbors. If the coming India-China war ends in stalemate, like the 1979 Vietnam-China War, it will give a big blow to China’s claim of super-power status.
Whose $1 Trillion China is Spending on One Belt One Road (OBOR)?
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Dr. Susmit Kumar, Ph.D.
Under the OBOR (One Belt One Road) project, China is planning to spend more than $1 trillion to reshape the global economy. The question is whose $1 trillion China has been spending so far in making countries all over the world like colonies of the East India Company, by providing them loans which they would not be able to payback at all. Sri Lanka is already in China’s debt trap not being able to pay an $8 billion infrastructure loan from China. Sri Lanka's debt situation is severe. The country is currently in $58.3 billion deep to foreign financiers. 95.4% of all government revenue is currently going towards paying back loans. Out of every one hundred dollars the government brings in, only $4.60 is going towards essentials like education and public services (“China Tells Sri Lanka: We Want Our Money, Not Your Empty Airport”, Wade Shepard, www.forbes.com, July 31, 2016). Still China is willing to give another $24 billion to Sri Lanka as a part of OBOR ('China willing to give Sri Lanka $ 24 billion more as part of OBOR', PTI, May 17, 2017).
Niti Aayog: Why does it need new direction and a new leadership?
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Dr. Susmit Kumar, Ph.D.
By watching the grand show of China’s OBOR (One Belt One Road) Summit, attended by 65 countries, including US and Japan, all Indians are feeling dejected. This is one more step taken by China in its goal to replace the US as the super-power. Both China and India started the economic liberalization nearly at the same time in the early 1990s, but China is now the global economic leader whereas India is nowhere in the global economy. Since 1990s, India have run trade deficits year after year whereas China had trade surpluses, enabling it to amass four trillion dollar FOREX (FOReign EXchange), making it the undisputed country to replace the US as the world’s number one economic superpower. Hence, Indians have to blame the economists and the political leaders who depended on the former, for letdown.
In recent years, India has been boasting about its economic growth rate, projecting it to be the highest in the world, surpassing that of China. All over the world economists are predicting that India’s growth rate would now surpass that of China, resulting in India’s GDP to be the second largest in the world by 2040, behind China and surpassing the US. Indians use this data as a ticket to super-power status. But there is a fundamental difference between the growth rates of India and China. Behind India’s phenomenal growth rate, the country has trade deficit year on year for more than two decades whereas China has trade surplus in the same period. History has shown us that the Indian economy has the potential to collapse if subjected to an economic crisis whereas the Chinese economy can withstand it. In the recent three years, our trade deficit with China has been increasing as usual year after year like the US trade deficit with China. As explained in my two articles Is "Make In India" Theme Helping Indian Economy? - Part I and Is "Make In India" Theme Helping Indian Economy? – Part II, the Niti Aayog and also the “Make-in-India” policy of the Modi government have no significant positive bearing on India’s trade deficit.
Niti Aayog Is Missing Its Number One Priority – Trade Balance and Self-Sufficiency of Essential Mass Consumption Items - Part II
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Dr. Susmit Kumar, Ph.D.
Please click here for its Part I: Niti Aayog Is Missing Its Number One Objective – Trade Balance and Self-Sufficiency of Essential Mass Consumption Items - Part I
As I have written in my recent articles, even before thinking to become a super-power, a country needs to generate trade surplus, which the US did for more than 30 years after World War II, China since early 2000s, and both Japan and Germany in recent decades. The last two countries are economic super-powers but are too small to be military super-powers. Without having trade surplus and becoming self-sufficient in essential mass consumer items, India has no hope of becoming a super-power. Please read my article for details: Is "Make In India" Theme Helping Indian Economy? – Part II
Two Competing Models in the Global Economy
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Dr. Susmit Kumar, Ph.D.
The two tables and six charts shown below prove which economic model India should follow, either:
- The US economic model that lost millions of jobs related to
- a decrease of nearly 35% (from 14.2% in 2000 to 9.3% in 2008) of the world export market in just eight years (thereafter it is hovering around 9%) and also
- the goods for its own consumption corresponding to record increase in trade deficit since mid 1990s (as shown in Chart 1), or
- The Chinese, 3.7% in 2000 to 8.4% in 2008, a 127% increase, and the German which has kept a steady percentage despite the rise of the global Chinese workshop.
Niti Aayog Is Missing Its Number One Objective – Trade Balance and Self-Sufficiency of Essential Mass Consumption Items - Part I
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Dr. Susmit Kumar, Ph.D.
Development, without the aim of “Trade Balance” and “Self-sufficiency of Essential Mass Consumer Items” (to insulate its economy from factors, beyond its control) has no meaning. Time and again the history of global economy has shown that a FOREX (FOReign EXchange) crisis can bring down a country’s entire economy, within few months, for years to come. Unless the Indian economy achieves “Trade Balance” and “Self-sufficiency of Essential Mass Consumer Items,” it will be always vulnerable to collapse due to factors beyond its control. Niti Aayog needs to modify all their three recently approved key documents for the country - 5-year vision, 7-year strategy and 3-year action plan - and have these two as their top priorities/objectives.
India, China and Growth Rate
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Dr. Susmit Kumar, Ph.D.
In last couple of years, India is boasting about its highest economic growth rate in the world, surpassing that of China. Economists world-wide are predicting that India’s growth rate would surpass that of China now onwards, resulting in India’s GDP to be second largest in the world by 2040, behind China and surpassing the US. Indians use this data as a ticket to the super-power status. But there is a fundamental difference between the growth rates of India and China. Behind its exemplary growth rate, India has trade deficit every year in last more than two decades whereas China has trade surplus in the same period. As history has shown us, Indian economy has potential to collapse in an economic crisis whereas Chinese economy can withstand it.
Narendra Modi, Indira Gandhi and Economy
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Dr. Susmit Kumar, Ph.D.
After his party’s resounding victory in the recent assembly elections, PM Modi is now considered to be India’s third mass leader after Jawahar Lal Nehru and Indira Gandhi. PM Modi talked in his victory speech about a “New India’ which he sees as the India of the dreams of the youth, that fulfills the aspirations of women, and provides opportunities for the poor. We see a parallel between PM Modi’s “New India” slogan and Indira Gandhi’s “Garibi Hatao” slogan which she gave during late 1960s and early 1970s.
Is "Make In India" Theme Helping Indian Economy? – Part II
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Dr. Susmit Kumar, Ph.D.
Please click here for its Part I - Is "Make In India" Theme Helping Indian Economy?-Part I
As shown in Charts 1 to 8, India’s foreign trade is following in the footsteps of that of the US, a bankrupt country surviving on printing its currency which happens to be the global currency. As explained in Part I of this article series, before even thinking to become a super-power, a country needs to generate a trade surplus, which the US did for more than 30 years after World War II, China since early 2000s (Chart 6, 7 and 8), and both Japan (Chart 4) and Germany (Chart 5) in recent decades. The last two countries are economic super-powers but are too small to be military super-powers.
Is "Make In India" Theme Helping Indian Economy? - Part I
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Dr. Susmit Kumar, Ph.D.
Before even thinking to become a super-power, a country needs to have trade surplus, which the US had for more than 30 years after World War II, China since early 2000s, and both Germany and Japan for last several decades. The last two countries are economic super-powers but are too small to be military super-powers.
Dr. Kumar's Past Presentations
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International Studies Association (ISA) South 2012 Annual Conference, Atlanta, Georgia, October 12-14, 2012.
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2012 Annual Meeting of the Georgia Political Science Association (GPSA), Savannah, Georgia, November 9-10, 2012.
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Third Annual Middle East Dialogue (DOMES), Washington D.C., February 21, 2013.
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International Studies Association (ISA) ISSS-ISAC Joint Annual Conference, George Washington University, Washington D.C., October 4-6, 2013.
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Western Political Science Association (WPSA) Annual Meeting, Seattle, Washington, April 17-19, 2014.
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International Studies Association (ISA) West 2014 Annual Conference, Pasadena, California, September 27-28, 2014.
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International Studies Association (ISA) South 2014 Annual Conference, Richmond, Virginia, October 25-26, 2014.
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International Studies Association (ISA) Midwest 2014 Annual Conference, St. Louis, Missouri, November 7-9, 2014.
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"Global Islamic Fundamentalism" - Annual Middle East Dialogue (DOMES), Washington D.C., February 26, 2015.
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(i) ISIS Crisis - A Panel Discussion, (ii) Arab Spring and Modernization of Islam - A Paper Presentation, 2015 Annual Meeting of the Southwestern Social Science Association, Denver, Colorado, April 8-11, 2015.
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"Saudi Arabia and Pakistan, to be Devoured by their Frankensteins, IS and Taliban" - Annual Middle East Dialogue (DOMES), Washington D.C., February 26, 2016.
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"Modernization of Islam and Unification of Human Civilization" - The Institute for Defence Studies and Analyses, Indian Ministry of Defence institution, New Delhi, India, March 31, 2016.
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“Reason behind Islamic Terrorism and when and how it would end” by Dr. Susmit Kumar, Society for Policy Studies, New Delhi, India, May 24, 2016.
Dr Kumar's Presentations
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Dr. Kumar's Press Interviews:
Dr. Kumar's presentation at 2015 Middle East Dialogues Conference, held in Washington DC (his presentation is after 50:00 minutes in video below) :
Dr. Kumar's presentations on Youtube:
(1) Please click here to view "Islamic Militancy, Islamic Empire and Modernization of Islam" Youtube video presentation.
(2) Please click here to view "Karma, Mind and Quest for Happiness" Youtube video presentation.
Dr. Kumar's latest publication: "The Arab Spring and modernization of Islam: A major step towards the unification of human civilization," in Modern East: Conflict & Reforms, Edited by Mohammed M. Aman and Mary Jo Aman, Westphalia Press, Washington DC, 2014, pp 71-113. Please click here to download the paper . Please click here to buy the book.
Dr. Kumar's coming presentations:
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Western Political Science Association (WPSA) Annual Meeting, Seattle, Washington, April 17-19, 2014.
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International Studies Association (ISA) West 2014 Annual Conference, Pasadena, California, September 27-28, 2014.
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International Studies Association (ISA) South 2014 Annual Conference, Richmond, Virginia, October 25-26, 2014.
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International Studies Association (ISA) Midwest 2014 Annual Conference, St. Louis, Missouri, November 7-9, 2014.
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"Global Islamic Fundamentalism" - Annual Middle East Dialogue (DOMES), Washington D.C., February 26, 2015.
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(i) ISIS Crisis - A Panel Discussion, (ii) Arab Spring and Modernization of Islam - A Paper Presentation, 2015 Annual Meeting of the Southwestern Social Science Association, Denver, Colorado, April 8-11, 2015.
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"Saudi Arabia and Pakistan, to be Devoured by their Frankensteins, IS and Taliban" - Annual Middle East Dialogue (DOMES), Washington D.C., February 26, 2016.
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"Modernization of Islam and Unification of Human Civilization" - The Institute for Defence Studies and Analyses, Indian Ministry of Defence institution, New Delhi, India, March 31, 2016.
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“Reason behind Islamic Terrorism and when and how it would end” by Dr. Susmit Kumar, Society for Policy Studies, New Delhi, India, May 24, 2016.
Please click here to see Dr. Kumar's past presentations
Book Review:
Giving * * * * * out of 5, ForeWord Clarion Reviews commented on Dr. Susmit Kumar's Casino Capitalism book (2012): "Frighteningly thought-provoking ... easily understood ... the Occupy Wall Street crowd will find vindication in this book." Please click here to read the entire review.
Trickle Down Economic Policy would not work for India Part II
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Dr. Susmit Kumar, Ph.D.
The US educated economists think that trickle-down economy is the best - i.e. tax cuts, mainly to rich would create jobs as they would invest in creating new firms and technologies. But it is completely bogus theory. Let us consider following three cases – if you give one crore rupee to:
The Hidden Cost of Imported Items and The Need to Redefine Modi Administration’s “Make in India” Policy
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Dr. Susmit Kumar, Ph.D.
If you live in India and purchase a "Made in China" commodity instead of "Made-in-India" commodity, then your home country loses not only a factory job but also indirectly associated jobs such as in schools, hospitals, and auto sector. Instead your purchase of the imported commodity creates such lost jobs in China.
There are two major hidden costs to India when you buy an imported item.
Unlike Demonetization, the Action against Benami Property would bring a Windfall for Government
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Dr. Susmit Kumar, Ph.D.
The demonetization action taken by the Modi government may not have yielded significant windfall for the government, but the action against benami property, to be taken next, may yield a windfall for the government.
Arthakranti will make rich richer at the expense of poor and bankrupt India
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Susmit Kumar, Ph.D.
After proclamation of demonetization, Arthakranti proponents have been claiming that the government has taken the demonetization step due to the Arthakranti proposals. It is a wrong claim. The demonetization step taken by Prime Minister Modi has nothing to do with Arthakranti. In the early 1970s, the Wanchoo committee on black money had recommended withdrawing high value banknotes. Although the then Indira Gandhi administration did not implement the findings of the Wanchoo committee report, Morarji Desai government withdrew Rs 1,000, Rs 5,000 and Rs 10,000 notes from circulation in 1978. The present NDA government has no plan to implement the two percent bank cash transaction tax, after eliminating all present taxes except import duties, which is the very fundamental of Arthakranti.
Dissolve Pakistan, a greater evil than ISIS
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Susmit Kumar, Ph.D.
Russia, US and other Western countries have been bombing to destroy ISIS. They need to realize that Pakistan’s army and its ISI (Inter-Services Intelligence, Pakistan’s equivalent of the CIA) are bigger threats, to the world, than ISIS, as they have been sponsoring terrorism globally. In majority of attacks world-wide, terrorists are linked with Pakistan; some of the examples are - Spain (2004 Madrid train bombing), Denmark (2007 and 2010 Copenhagen terror plot), UK (2004 London Fertilizer bomb plot, 2005 London train bombings), US (9/11 attacks in 2001, 2001 Shoe bomber, 2006 Seattle Jewish Federation shooting, 2015 San Bernardino attack, 2016 New York Bombing), France (2012 Toulouse and Montauban shootings), Indonesia (2002 Bali bombings, 2003 Marriott Hotel bombing), China (several 2011 Xinjiang attacks), Saudi Arabia (2016 Madina, Jeddah and Qatif bombings), and also all the terrorist attacks in India and Afghanistan. Top al Qaeda leaders, like Osama bin Laden, Khalid Sheikh Mohammed, Ramzi bin al-Shibh, Abu Zubaydah, Abu Laith al Libi and Sheikh Said Masri were either killed or captured in Pakistan.
Present Islamic Terrorism is Just the Trailer of a Grisly Movie, Yet to Come
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Susmit Kumar, Ph.D.
Since September 11, 2001, suicide attacks, using passenger airlines, in US, the Islamic terrorism has been increasing over the time. In the beginning, terrorist attacks world-wide were attributed to Islamic militants, trained in Afghanistan and Pakistan which were considered as their breeding ground. But now several regions in the MENA (Middle East and North Africa) region, like Iraq, Syria, Libya, Tunisia, and Yemen, have joined the list. Apart from this, lone-wolf attacks in Western Europe, the US and countries like Australia, have been increasing in number.
Modi Government Should Thank Low Crude Oil Price, Not RBI Governor Rajan, For Stable Rupee
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Susmit Kumar, Ph.D.
Published at South Asia Monitor on August 9, 2016.
After the onslaught of criticism by Subramanium Swamy, Raghuram Rajan decided not to pursue the second term as RBI Governor due to not getting enough political support. This led to the US economic media to write the obituary for the rupee and Indian economy. Nearly all of them were giving Rajan the credit for the stability of rupee during his RBI tenure after the turbulent 2011-13 period which saw drastic devaluation in rupee. But the truth is that rupee is stable mainly due to the drastic drop in global crude price.
Chinese yuan replacing US dollar as global currency: A not so distant prospect
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Susmit Kumar, Ph.D.
Published at South Asia Monitor on May 1, 2016.
During World War II, only the US and UK deliberated about the future of global economy, culminating into the 1944 Bretton Woods Accord. At that time, entire Europe was under Hitler and countries like India and China did not have any economy to have a say in the Accord. Under British Plan, which was rejected, there would have been one Global Currency (say Bancor) manage by an international bank and also an International Clearing House to oversee export and import of each country.
India Needs to Treat Its Foreign Trade Same as Defense Sector, Part-1
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Susmit Kumar, Ph.D.
Published at South Asia Monitor on May 17, 2016.
A country spends significant amount of money on its defense without thinking about any monetary benefit from defense sector. For an example when India buys an aircraft carrier or dozens of fighter aircrafts, it does not get any monetary benefit out of them. In this two-part article, we will see that a country like India needs to treat the increasing negative Balance on Current Account same as it does with the defense sector. Balance on Current Account is defined as the sum of the balance of trade (goods and services exports less imports), net income from abroad and net current transfers.
India Needs to Treat Its Foreign Trade Same as Defense Sector, Part-2
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Susmit Kumar, Ph.D.
Published at South Asia Monitor on May 18, 2016.
Instead of becoming an exporting country like China, India is becoming an importing country like the US. In 2004, India trade deficit was in upper $20s billion whereas in 2015 it was $137 billion. On the other hand, China’s trade surplus was $177.5 billion in 2006, $298.1 billion in 2008, $160.0 billion in 2011, $382.46 billion in 2014 and $602 billion in 2015. Due to $100+ a barrel crude oil price, the current account deficit of India was $78 billion and $88 billion in 2011 and 2012, respectively. The trade deficit for these two years were $162 billion and $200 billion, respectively. Due to drastic reduction in crude oil price in last couple of years, the trade deficit has gone down somewhat.
Islamic Militancy, Islamic Empire and Modernization of Islam
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- Parent Category: Islam
Susmit Kumar, Ph.D.
Until the early 1900s, nobody was predicting that democracy would replace kingdoms in most of Western Europe, or that African and Asian countries would gain independence within five to six decades. World Wars I and II were necessary to change global socio-economic and political environments of those times. Had those wars not occurred, much of Europe might still be ruled by monarchs, and most Asian and African countries might still be awaiting independence from their colonial masters. Today Islamic civilization is going through what Europe went through between World Wars I and II. At the end of this crisis, the majority of Islamic nations will become secular and democratic, like Turkey: the world seat of the Islamic Caliphate since 1517, Turkey shed its fundamentalist rule in 1923 and has remained free ever since. In addition to undergoing secularization, Muslims worldwide will start to follow the spiritual aspects of Islam more than its social and militant aspects and Sharia.
Is Muslims' Demand of only Civil Code of Sharia in Non-Muslim Majority Countries Justified?
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Susmit Kumar, Ph.D.
(This is reply to an Indian Muslim who wrote to Dr Kumar that India should continue to have religion-based civil code).
Yes, you have a valid point about common code, i.e. there should be religious freedom. But why do you stop at choosing only civil code and not criminal aspect of Muslim code? If the court convicts a person, he will go to prison if he is a non-Muslim (Hindu, Christian, Parsi or Sikh), but if he is a Muslim, his limbs (hand/leg) will be cut off, eye put out or death by stoning according your Sharia law. Why do not you ask for this in India, i.e. criminal aspect of Muslim code? You can not choose what you like in your religion and discard what you do not like.
Why Pakistan Has Become the Epicenter of Islamic Terrorism
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Susmit Kumar, Ph.D.
Pakistan was created by Muslim leaders like Muhammad Ali Jinnah and Liaquat Ali Khan who were originally from Hindu majority states in undivided India. Once these top leaders were gone (Jinnah died in 1948, Khan was assassinated in 1951), Pakistan became leaderless politically and the Pakistani army generals took over the country. The US supported these dictators and hence democracy could not take deep roots there. In all wars it has fought, the United States claims to be fighting for freedom and democracy. However, in all its Cold War battles it did not hesitate to deal repeatedly with military dictators instead of democratically elected leaders as they tend inevitably towards a socialist or participatory style of government. After the end of the Cold War, almost all countries are leading towards the path of peaceful democratic states, barring a few such as Pakistan and Afghanistan.
Rise of China due to Reaganomics—A Treason
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Susmit Kumar, Ph.D.
Reaganomics is the biggest fraud created in the history of the United States. Not only did it create large debts, it also transferred money from the middle class to the richest 2 percent. Without the 1944 Bretton Woods Agreement, which made the US dollar the global currency, Reaganomics would have died in its infancy. Reaganomics was paid for initially by Japan during the 1980s to the early 1990s, and thereafter mainly by China, which is a potential enemy of the United States. In a similar situation, when the Soviets needed money for their “glasnost” (freedom of speech, transparency in government) and “perestroika” (reconstruction of the economy, economic reforms) campaigns during the late 1980s, German banks stopped giving loans and instead started demanding repayments, causing the Soviet economy to collapse.
Trade Deficit - Reason For The Present Global Economic Crisis
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Susmit Kumar, Ph.D.
One common factor for all Western countries in crisis is that they had significant trade deficits during the last ten years. These countries have two type of deficits - budget and trade deficits. Until 6-7 years ago, all Euro countries had similar budget deficits. But in last 6-7 years, the countries in crisis are facing trade deficits as well as significant budget deficits. Domestic and foreign banks operating in these countries invested heavily in non-productive sectors. These banks invest to get maximum return and get it in risky markets -- trading, finance, and real estate. Following such types of investments the economies of these countries boomed, keeping budget deficits in check. After the 2008 Great Recession nearly all the Western countries suffered from the effects of the collapse in real estate which caused an increase in budget deficits, but the countries in crisis (for an example, US and PIIGS in Europe) are affected the most (due to losses of jobs and of revenue collection). Due to pressure from the IMF, countries are now being forced to pay foreign investors who made loans to private sector operators and this is causing a further increase in budget deficits.
Human Brain - Beyond Any Man-Made Computer
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(From Dr. Susmit Kumar’s new book Karma, Mind, and Quest for Happiness iUniverse, 2012)
The brain is the center of the nervous system in all vertebrate, and most invertebrate, animals, including humans. For an example, humpback whales, great apes (like chimps and orangutans) and dolphins have "human" brain cells and they can think.[1] Like humans, chimps and orangutans too plan for the future.[2] Birds can distinguish our languages. [3] Human brain, weighing on average about three pounds, is an extremely complex structure that has evolved over millions of years. The difference between a human brain and the brains of other creatures is that the human brain has several capabilities that others do not have. Ours is the most advanced brain of all. According to David Linden, a professor of neuroscience at Johns Hopkins University: "Just as the mouse brain is a lizard brain with some extra stuff thrown on top, the human brain is essentially a mouse brain with extra toppings."[4]This is one of the proofs that which establishes Darwin’s theory of evolution: Humans have evolved from animals.
Collapse of Indian Currency (Rupee)
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Susmit Kumar, Ph.D.
Note: This article is from my book "Casino Capitalism" published early this year. I have written the same, i.e. collapse of Indian currency, in my 2010 article at this blog, titled "Stop Blaming China – It is the Structural Failure of the Global Trade System" (please see the last paragraph).
In 1991, India had to go to the IMF to get a loan because its FOREX was worth only three weeks of essential imports, and India was on the verge of default. One of the main reasons for this economic crisis was imports of luxury items during the late 1980s under the Rajiv Gandhi administration. India had to airlift sixty-seven tons of its gold reserves to London as collateral in order to get $2.2 billion from the IMF. In addition, India had to liberalize its economy and sell several of its profit-making public firms at throwaway prices to US firms such as Enron.
