why stimulus fails to stimulate

I am publishing this great excerpt from MJ's (a good and wise friend) email, that I think is worth sharing...

"Too many policymakers, business leaders and other experts are looking for ways to stimulate growth once again. The problem is they want to get back things to the way they were. Almost all efforts at stimulation would prove counter-productive...they will make the problems worse. Key idea to remember is that we had too much growth compared to our preparedness to assimilate growth. And growth at any cost is the strategy of the cancer cell not of a healthy one. First, tumors and other malignant stuff has to be removed. Only then tonics and exercise can deliver results. "

rubik's cube - a layman's howto

I have, recently, picked up solving the Rubik's cube. The key reason I wanted to do that is that it brings you closer to the intuitively understanding 3 things -

1. Algorithms
2. 3D visualization and memory
3. Permutations

I figured out the first layer based on my hit and trial. This is relatively easy for 2 reasons -

1. You don't have to worry about disturbing any pieces that are already in their place.
2. The algorithms involved, because of point 1, are simple and easy to derive visually.

What you need after that is a higher level algorithm around which pieces need to get solved in what order. While there are many options out there you need to pick one that is relatively easy. In addition you need to standardize on some kind of notation for representing different faces of the cube and rotation directions.

I picked up one of the many higher level algorithm based on minimal research. I was impatient to get to solve the cube first and worry about optimizations later. The algorithm i picked is a layer by layer solution which further breaks into sub-steps. Then comes the mechanical step of memorizing and applying specific algorithms to achieve each of these sub-steps.

Ideally, I'd have loved to solve the cube all the way by deriving my own algorithms but I am not sure I am bright enough or patient enough to do that. It was too hard for me to get an intuitive feel of the cube without any guidance. I decided that the I will use an existing algorithm to understand the cube and its positions better and then create variants at each level to further optimize my efforts.

It is amazing how practicing existing algorithms give you a good intuitive feel of the behaviour of the cube, enabling you to derive other algorithms. I am now at 3 minute level for solving the cube and I think i will need 2 kinds of changes to get really better. I need a different higher-level algorithm and I need to improve my speed of execution. Right now my hand positions are not at all optimized and cube movements are very labored.

The great thing about the cube is that it fills in a lot of idle time that we have and don't put to great use like the wait at the doctor's office, sitting in a car while your wife is driving, waiting in the parking lot while your wife is shopping etc etc etc. I am very happy to be engaged in active mental calisthenics during this free time.

capitalism - gone wrong!

I have been finding ways to justify extraordinary amount of money being made by the folks at Wall Street and in the financial sector, in general. I know, for a fact, that financial industry has some of the smartest (analytically) people that I have come across. So, while the equation of smart people making more money in general has been directionally correct, what has troubled me is that the relative value created by the financial industry has not been commensurate with these vertigo inducing paychecks.

I am now convinced that our system has created an incentive structure that is directing our smartest away from the most pressing problems of our time. For a while, I was trying to justify it through the rationale that creation of investable surplus requires financial wizardry which in turn funds research and innovation in the real economy. The concept of leverage, aggregation, NPV and numerous others to create a financial structure that fosters innovation and continues to be, IMHO, a critical requirement for sustained investment into future technologies. But I think the value of these innovations pales in comparison to the challenges facing us in the real world with energy and range of other real world challenges. We need our best and the brightest to focus on solving these challenges and not working on creating fancy financial instruments which, as we now know, create a lot of destruction when they do not work as expected.

No human created system is a silver bullet solution including free markets or socialism. It needs to be clear that in the end these are approximate models of human behaviour in a wide range of circumstances that have more unknowns than knowns. Ideologues do a great dis-service to mankind and are singularly suited to media soundbytes due to the inherent simplicity of their position. World is complex with complex problems and our positions need to be nuanced and subtle while actions need to be decisive.

We, in the US, are so attuned to creating camps around free-marketers and neo-socialists that we fail to even present a nuanced argument that may not lie in either camp. Too often do I see masses and mass media giving preferential treatment to simplicity rather than accuracy.

I have been studying the current economic situation along with a wide range of geo-political issues and I have come to a conclusion, like many others, that we are in uncharted territory. We keep hearing the Great Depression etc, but while the effects may or may not be greater than Depression era, the underlying problems are deeper than what we saw during the Great Depression.

Our current financial tools are not going to solve the problem at hand and may just defer the situation. The solution lies in addressing the real world issues arising out of scarcity of resources and unsustainable growth models and the whole virtual wealth that is predicated on these unlimited and faulty growth assumptions. It is time for us to take a bitter pill and recognize the laws nature and once again tame the forces to serve human life.

Our best and the brightest need to be looking at these fundamental issues and all of the rest have a role to play too. Most importantly, we need to brace ourselves for bigger sacrifices, from hereon.

Blagojevich scandal -Indians at the center of the controversy

Chicago Tribune is reporting here about the potential involvement of 2 Indian-American businessmen in the "pay to play" scandal around President-elect Obama's senate seat. I am expecting late night show jokes on outsourcing corruption tonight.

GEICO vs Metlife car insurance

Yesterday, I was reading this message from Warren Buffet. Here he has strongly endorsed buying car insurance from GEICO, one of Berkshire's subsidiary. He claims that close to 40% of consumers will save money by going with GEICO. Given Mr. Buffet's credibility, I decided to try out GEICO. I was pleasantly surprised.

I have been a Metlife Auto Insurance customer for 7 years now. I went with them, largely, because they were the only big name willing to sell insurance to fresh immigrants like me, at a rate that seemed reasonable at that time. This was due to their existing relationship with my employer, Lucent Technologies. Since then shopping for car insurance deals has been the last thing on my mind.

But given the current economic situation, Mr. Buffet's personal recommendation and the fact that my auto insurance is up for renewal, I called up GEICO to get a quote.
The operator was more than friendly, he took all my information on the phone and gave me a quote (in 5 minutes) that was less than half of what I was paying Metlife and the coverage and deductibles were much better with GEICO. Needless to say, I changed my provider in a New York minute. It really amazes me that there is such a vast difference in insurance premiums across these providers.

Either GEICO is taking risks that are too high or Metlife's auto business will be dead before long. For now though GEICO rules. The skeptic in me wants to look deeper at GEICO and see if there is a catch.

The Taj, The Oberoi - what about good ol' VT

Is it me or others also feel that there has been disproportionate amount of coverage of the Taj and the Oberoi than the death and destruction in CST railway station. It is no co-incidence, IMHO. "Not all lives or deaths are equal" - this is so deeply ingrained in our pysche that, we are only moved by death and suffering of people that we can relate to. We often blame the Western media about only talking about western casualties. There is great truth in these observations. But what we are blind to is the fact that it happens everywhere, at each level.

I do not remember Indian media talking about death and destruction in Africa. I dont remember Indian media covering numerous other attacks on Indian soil with as much rage and passion, as this one. The reason is that the media comprises of people who are urban and cosmopolitan. These are guys closer to Harvard than to Dharwad. These are guys who feel closer to guys dining in the Taj than they guys serving in Udipi. Guys just like me.

In general, though,Indian media is doing a great job of covering the length and breadth of the country/globe to provide a balanced view of the world. But we have a long way to go. It is naive to think that death of a homeless guy on the streets of Rewa will become equal to the death of film star in the tinseltown, any time soon. But it is a goal worth pursuing. It is the death of a unit of human aspiration and potential.

does India need a different form of government

I am increasingly getting convinced that India needs a Presidential form of democracy like the US. The executive arm needs two critical things to operate with strength, speed and conviction -

1. Ability to act without the need to worry about losing its job during its tenure.
2. Ability to draw upon the experience and expertise from a wider pool of talent from different walks of life to serve as Ministers rather than thoroughly incompetent populists that we elect into our legislatures.

The parliament should still serve in its legislative role and provide the counter balancing force to unbridled executive power. When I see world leading economists , four star generals, corporate executives in the Executive branch in the US and compare them to the Ministers in India who have hardly any qualifications and executive experience to manage such complex issues, i am convinced that we need meritocracy in the Executive branch and not populist democracy. Again, there may be exceptions in India where some ministers have had both the democratic mandate and the qualifications to execute with success but these are just that - exceptions.

I am not sure if the case for this has been made in the past ( I believe Arun Shourie has been a strong proponent of this thought). I am not an expert in Politics and Consitutional Law but it seems to me that amongst whole host of changes required in India, a massive change in the political system is required.

It has become fashionable to blame George Bush for all his failings post 9/11. But in all the noise, we forget that the US has not seen another attack, of any significant magnitude, since 9/11. To me this is an indicator of the effectiveness of Presidential form of democracy with clear mandate for leveraging wide range of expertise and the executive powers to make big decisions. The fact that the President is elected every 4 years prevents the President to become a monarch. The Congress and the Senate work to provide counterbalancing force during the term of the President. I think it is time to rework on India's underlying political power structure to reflect its needs. The current structure is designed to position populists into position of power and executive responsibilities, which only results in incompetence and corruption.


I'd like to hear from more and more people on their viewpoints in this forum.