Category: arbit

The fundamental problem with the world economy

… is that wages are sticky.

With increased globalization, it has become significantly cheaper to produce certain goods and services in countries that were hitherto “low income” or “less developed’ or whatever you call it. In the past, in part due to protectionism at various levels and in part due to high transaction costs (transport, communication, etc.) “developed economies” such as the US or Europe had got adjusted to a reasonably high wage structure. In fact, it is possible that in the absence of trade with the rest of the world these countries might still be able to support that structure.

However, with the walls of protectionism and transaction costs falling, these traditionally high wage economies haven’t been able to compete with the up and coming economies where production costs are significantly lower. And because wages are sticky, i.e. it is impossibly hard to cut wages across the board, this has resulted in unemployment. Worse, a lot of other benefits (such as Social Security or Medicare in the US) have been set based on the high wage structure these countries used to enjoy.

And then you have unions, which makes it even tougher for you to cut wages which might make you competitive. It’s a combination of sticky wages and unionism that the various austerity measures in Greece haven’t managed to go through (of course, Greece has another set of problems in terms of law enforcement and tax collection).

And so, in short

1. Wages are sticky. Even though your current wages are not competitive enough, you can’t cut wages

2. That leads to high unemployment

3. That leads to lower economic activity and thus depression

4. The government needs to spend more to “stimulate” the economy, but hasn’t collected enough in good times. And the “level” of the economic cycle itself has gone down now. And the government itself has other obligations linked to the high wage levels

And so it goes. One thing I can think of is “devaluation” (in these times of floating currency rates, that term has lost all meaning), but then now these countries import so much that will again not be a good idea.

Fun!

PS: please note that this post has been filed under “Arbit”

Growing Old

I must admit I’m growing old. For the first time ever, earlier this week, I used a mousetrap, successfully, too. In my younger days, I didn’t ever need such deception to handle mice. I’d ruthlessly hunt them down, with a plastic pipe and a broom, and beat them to death. This time (for the first time after I moved to this house, I must say), there were a couple of occasions when I spotted the rodent, but it managed to give me the slip both times before I could hunt it down. I blame it on this house’s lack of doors (open kitchen and all that).

Back when I was a rat-hunter, I would feel no remorse while I hunted it down and killed it. The moment of remorse, and the feeling of having committed sin, would occur when it was time for me to throw out the carcass. I would feel terrible, though I never became sick. Near the earlier house, there were some vacant fields where I’d dump the carcass, for the benefit of some crow or hawk.

This time, the moment of remorse happened earlier, before I had even killed the mouse. After the mouse had been trapped, it was making a hell of a lot of noise trying to extricate itself from the mousetrap. And not knowing what to do with it, I followed the wife’s recommendation (her “native house” is frequently infested by rats, I learn) to dunk the mousetrap, along with its inhabitant into a bucket of water, thus killing by drowning. I thought this was a cowardly way to kill, rather than hunting down and beating. I remember singing “ding dong bell” as I performed the murder.

Mouse, given the havoc you created in my kitchen, and the cushions you chewed up, I think I’ve been justified in killing you. Now you can rust in peace.

I’ve done it yet again

I quit my job earlier this week. I did so on Wednesday, the fourteenth. In hindsight, I should have waited another day and quit on the fifteenth, to coincide with the anniversary of the demise of Lehman Brothers. So for the fourth time in five years of career, I’ve quit a job without knowing where I’ll go next. The plan for the first month is to just chill and detox, and get back my sanity. Once that’s achieved, I’ll start thinking about where my next paycheque is going to come from (my employer promptly put me on Garden Leave, thus effectively giving me a month of  “free salary”).

You know what I miss the most about student life? The annual vacation! That once a year, you are entitled to spend two months or more doing absolutely nothing. I remember that friends chose to do academic projects during that time. Others got internships in companies. A few others chose to travel then. I used to do none of the above. I’d just sit at home in Bangalore and fatten myself (to compensate for the weight loss during the semester), and that ensured I started each semester in fairly high spirits (no I didn’t indulge in those spirits back then). The only time I did something “productive” during vacations was when it was an academic requirement to do a project.

I seriously miss having that annual two-month detox period. Yes, I know that my last employer gave me over twenty days of paid leave per year, but it wasn’t the same. You knew that it was a rationed resource, and you’d try to use it effectively. You’d go on vacation and immediately get on to a flight. You would land in Bangalore and head back to office within the next twenty four hours. You would sometimes need a break, take a day off from work, and then feel supremely guilty. It was on one such day sometime in the recent past that I realized that I miss vacations.

There exists a reasonable chance that I might choose to be self-employed (if things work out the way I intend, that is) but otherwise I need to find myself a job that gives me substantial vacation days a year, which I can take without any guilt. I realize that is absolutely necessary for me to keep myself charged up, and that if I had access to vacations the way I did during school/college I wouldn’t have taken a career break so many times after I started working.

My other objectives for this vacation are to travel (but it’s a bit tough given that the wife works and is subject to the twenty-days-of-paid-leave rules) and more importantly figure out for myself what my tradeoffs in life are. During my last job, I realized that I’d grossly misunderstood between my tradeoff between time and money. The other tradeoff I need to understand is the one between money and perks. And I want to write more.

Going postal over verification

Sometime in the recent past, I had to go to the post office to claim some money (some deposit my late mother had made there). As in other government offices, they needed my “address proof and ID proof” before they gave me the money. While my driving license was enough proof of identity, they being the post office got their address proof in a unique manner. They asked me to write down my address in some form, and sent a letter to that address. All I had to do was to produce that letter the next time I went there and my address had been verified.

So here’s how I’d adapt this process relative to the UID Aadhaar card.

  • When you apply for Aadhaar, you apply simply with an ID proof. Address proof not required. You simply fill in an address in the required column.
  • The Aadhaar organization sends a letter to this address. You need to pick up this letter and go to the office again, and now your address is “verified”.
  • Now that your address is “verified”, your unique ID is now mapped to this address (note that this function need not have an inverse)
  • If you change residence, all you need to do is to go to the Aadhaar office and submit a new address. They send a letter to this new address which you pick up and take to them, and thus “verify” this address. Now your ID is mapped to this new address. Aadhaar can charge a fee for this “address change” service.
  • The next time you need to prove your address somewhere, you go to the Aadhaar office and ask for an “address proof certificate”, and it can be a simple automated process for them to produce a printout verifying the address you’ve registered with them.
Now, you need an address proof to apply for Aadhaar (if I understand it right), in order to prove that you exist. I understand that a lot of people, especially at the bottom of the social strata, don’t have a proof of address, and that is holding up the spread of the UID process. And I also realize that this address proof requirement is so that the same person cannot have more than one UID card. Isn’t there any other way to prevent duplicate issuance of the UID? What does the Income Tax department do in order to prevent multiple PAN accounts?
If this duplicate problem is fixed, then Aadhaar-as-address-proof will simplify several of the problems we currently have. All that needs to be done is to “go postal” for verification!

Useless Hobbies

After a while, “hobbies” also start becoming “work”. As you progress in them, and get better at them, your own expectations of your “performance” in the hobbies goes up, and consequently you’ll stop enjoying as much as you used to.

For example, over seven years back writing started as a hobby. I started writing for myself, and managed to get some readers. I continued writing, and the readership grew. Soon I realized I was writing for an audience, so I’d to be more conscious about what I wrote. I got some articles published, and that upped expectations further, and now that I think of writing being a possible avenue of income-supplementation sometime in the future, it has ceased to be a hobby.

It was the same with the game of chess. Back when I was 12 years old, I started playing competitively. The first few tournaments were good. I may not have done that well, but I enjoyed it enough to think of playing at higher levels. I hired a coach, went for a few more tournaments, and soon found that I was buckling under my own pressure. And I had this particular weakness under incandescent lamps, and would blunder away in all my evening matches. Tournaments would be frequently followed by fever. Soon I stopped enjoying it, and at the ripe old age of fourteen, I “retired”. I still can’t enjoy a simple game of chess without being worked up. It’s not a hobby any more.

In this context, it is always useful to have a couple of things to do that you’re not so good at, so that you have no expectations of yourself, and you can just have a good time while “performing” the hobby. It was the reason I bought a guitar (having been trained in the Carnatic classical style in the violin; speaking of which you HAVE to read this Krish Ashok post; completely empathize with that), and have decided to not learn it formally, but generally strum it. Playing the guitar gives me mental peace, because I have no expectations out of it.

It was on a similar note that I took up the sketch book and pencil (helps having an artist wife, which ensures supplies of such materials at home) and drew that thamma hazare caricature. Later on that evening, I flipped around the page of the sketch book, borrowed paints from the wife and started painting. Randomly. It did help that I’m a horrible painter. That meant I didn’t set any expectations for myself. I felt totally at peace at the end of it.

So along with your “regular hobbies”, which you can use to fill up your resume, it’s important to have a portfolio of “useless hobbies”, stuff you aren’t good at, since those are the ones that will give you “inner peace”.

Internal Conflict

When a bunch of friends and I described ourselves as a pantheon a few years back, I was War. Part of the reason was that in Hindu Mythology Karthik is the God of War, but more importantly, I was War because I was always at war with myself. With three others being conveniently called Disease, Hunger and Madness, and another being Death, we formed a formidable force indeed.

True to the name that these guys gave me all those years ago, for the last six months or so, I’ve been absolutely consumed by internal conflict. It mostly has to do with my professional career, which hasn’t particularly taken off the way I imagined it would when I graduated from IIMB some 5 years ago. For the first time ever, I’ve completed two years in a job, and things don’t particularly look rosy, especially if I evaluate myself based on where I could have been had I not made those big blunders.

A part of me wants to go easy upon myself, and not be too harsh. Everyone goes through tough phases, that part tells me, and that mine has been a wee bit longer than most people’s. This part tells me to not worry about peer pressure, and to concentrate on keeping myself peaceful and enjoying the good things in life. This part further asks me to not worry too much about the future and that things will get into a flow. And that despite my corporate career not exactly taking off, life isn’t all that bad.

The other part, on the other hand, holds me responsible for all my troubles. It tells me that it’s because of my mistakes in the past that I’m where I am, and that I need to work really hard to rectify them. This part takes me to LinkedIn, and shows me the wonderfully sculpted oh-so-successful careers some of my old associates seem to be having, just to prove the point that I’ve messed up. This part wants me to conform, and be a good employee, and climb the stairs in the same way others have, and follow the well-trodden path into successful corporate whoredom. And this path is also supported by those pesky relatives who ask you uncomfortable questions about your career every time you are unfortunate enough to bump into them.

The first part is quite worried about my health, both mental and physical, and believes that messing up one’s health is too high a price to pay for corporate success and the associate perks that it brings. The second says I need to learn to adapt, and somehow reduce the impact of my health, while still being a good corporate whore.

And like in that old Coffy Bite ad, the argument continues. Except that these two parts of myself have completely ravaged my head over the last few months. I’m reminded of the story of the Bherunda bird (the “state bird” of Karnataka) which has two heads and one body. The two heads get into a quarrel. One of them gets so upset that he drinks some poison, thus killing “both of them”. These two parts of me, by means of their continued conflict have ended up completely consuming me, and my head.

And here I am, trying to figure out once again what it means to chill.

Cartooning

For the first time ever in my life, yesterday, I tried my hand at cartooning. It’s a very shady cartoon. Basically I was playing around with a sketch pad and pencil, drawing random lines, and didn’t have any idea about what I was going to draw till I drew. And then once I realized a theme was emerging, I force-fit a caption on it and finished the cartoon.

From 2011-08-28

I realize that some people have easily caricaturable features and some don’t. For example, it was insanely easy for a first timer like me to fairly accurately represent Anna Hazare (called thamma (younger brother) hazare in my cartoon. I hope to make this a series). Given his gandhi topi, triangular face, kurta-pyjama, etc. it wasn’t hard at all to represent him.

Ishant Sharma was next – given the long hair and goatee. Though, when my wife saw my caricature she thought I’d drawn Jesus Christ. I thought Harbhajan will be easy, given he’s a surd, but my cartoon of his looks like a young Bishen Singh Bedi! I guess I need to retract my earlier statement that all turbaned Sikhs look like one another.

The hardest of all (for a novice like me) were the other Indian fast bowlers – Sreesanth, Zaheer Khan, Praveen Kumar and Munaf Patel, while having idiosyncratic faces, don’t have any idiosyncratic features that makes it easy to caricature them, and hence it requires a greater degree of skill in order to draw them.

Thus, the trick with good caricaturing, I guess, is to identify those features of a person which are easily sketchable, and which (given minor context) will make them identifiable. Yes, I need to definitely improve my drawing skills, which I know are abysmal. But I also need to learn how to represent people without really drawing them accurately.

Romantic Comedies in Hollywood and Bollywood

Assumption: The median age for marriage in urban India is much lower than the median age of marriage in urban United States of America

Hence, romantic comedies in hollywood, usually end up having characters who are older than corresponding comedies made by Bollywood. Thus, Hollywood romantic comedies can be made to be more mature than corresponding Bollywood romantic comedies.

Data point: Serendipity was remade as “Milenge Milenge”. I was watching the latter movie a few days back (couldn’t sit through more than five minutes of it, as I kept comparing each scene to the corresponding scene in the original). In Serendipity the protagonists are around 35, and thus show a maturity that corresponds to that age. You can see that in the way they behave, go about things, etc. And here, in Milenge Milenge you have Shahid Kapur and Kareena Kapoor singing and prancing around like Jackasses. You can’t watch too much of that, can you?

Tailpiece: My all time favourite romantic comedy (across languages) remains Ganeshana Maduve, starring Anant Nag and Vinaya Prasad. I’ll talk about the virtues of the movie in another post but I can’t think of any other movie that even comes close to this one. Meanwhile, if you haven’t watched this movie, get hold of a subtitled copy of it and watch it. Now.

The Importance of Discipline

I’ve never been a fan of discipline. I think it is a major constraint and hinders creativity, and puts too many walls within which you need to live your life. Despite constant exhortations by my father, I never wanted to join the army. Hell, I tried my best (successfully) in order to even avoid NCC when I was at IIT. I pride myself on being some sort of a free spirit who isn’t held back by any arbitrary rules that I create for myself to live my life by.

A really nice article that I read today, however, makes me think twice about this stand. So this article is about “decision fatigue” and is not very dissimilar to what I’d read a long time back (again in the NYT) about the Law of Conservation of Willpower. So this article talks about how every time you need to make a decision it consumes some part of your mental energy. Irrespective of the size of the decision that is to be made, there is some willpower that is lost, and that causes you to be suboptimal in your decision making as the day progresses.

The article really struck a chord with me, and I realize I’m also heavily prone to decision fatigue. Sometimes the smallest decisions take away so much energy from me that I simply put NED. And yeah, on a related note, I’ve got the wife upset innumerable times solely because of my indecisiveness, a part of which can be attributed to decision fatigue. I even remember not going to a wedding reception some three years back because I couldn’t decide which shirt to wear! And no, I’m not making this up.

So on that note, here’s where I think discipline has a part to play in life. By putting certain constraints on your life, you are reducing the number of decisions that you have to make. And that implies your willpower and mental energy will be reserved for those things where it’s really important that you decide carefully. By making a schedule for yourself, you are outsourcing to you-the-planner all the trivial decisions of your life. Yes, you might feel constrained at times. But it saves you so much energy by way of saving you from several trivial decisions.

Of course, feeling constrained can also affect your mental energy in a negative way, and prevent you from giving your best. Nevertheless, this decision fatigue thingy implies that discipline may not be all that bad. Or maybe I need to think about it some more.