2015 – the post recessionary world

Posted in Business, Current Affairs, India, Pax Americana, politics by Anuraag Sanghi on December 6, 2009

Hobsons choice?

Hobsons choice?


What is on the table

Two of the G-7 countries are bankrupt – US and Britain. Their industrial base was supported by raw materials and captive markets – acquired by genocide, and the loot of centuries.

European banks are emerging from the credit crisis bigger than before, posing more risk to their national economies. BNP Paribas, Barclays and Banco Santander are among at least 353 European lenders that have increased in size since the beginning of 2007. Fifteen European banks now have assets larger than their home economies, compared with 10 lenders three years ago. (via European banks growing bigger, sowing seeds for the next crisis).

Concentration of power

What this growth has done is increase the concentration of risk, capital, power, manipulation into the hands of a few people. With Europe, USA and Japan dominating the Fortune 500 listing, with Super-mega corporations, the  outlook for dilution of power and risk seems bleak and remote.

The other risk is again the full-employment economic model. Mega corporations, which can be easily controlled at arm’s length by the State, dominate the economic sphere. Power is concentrated in the hands of less than 0.1% of the population. Less than 300,000 people control the US economy of more than 30 crore people (300 million).

Jobs for everyone

So, what happens to the 99.9% people who do not control the economy?

They are given jobs. They become employees, associates, apprentices, trainees, understudies, etc – who will fulfill the purpose of these 300,000 people-in-power – from the media and academia, public and private sector, NGOs and Government, bureaucrats and business managers.

Sleight of hand

And while our attention diverted by war, crisis, threats, the real game is being played somewhere else – out of sight and out of bounds.

Self employment, independence, small business are driven out of business by channeling increasing amounts of debt to organizations controlled by the O.1% of the powerful people.

This growth in banks beyond the size or the home economies signifies greater concentration of wealth – and not less. The world would do well to remember that East India Company was after all a company, a private company!

Capitalism was always about controlling capital

Capitalism was always about controlling capital


Public sector economies of Europe

The economies of France, Germany and Italy are practically run by public sector monopolies – or subsidized behemoths, who make survival of competitors difficult by their ability to sustain losses – based on Government largesse.

Spain and Britain have all but collapsed! Which way will the US jump – will it also go the public sector way – go the Spanish way? By the way, the national industry in Spain these days is prostitution!

Which bring me to another question!

The lure of ‘capitalism’ …

Why is the West so keen on calling these publc sector, subsidy driven regimes as Capitalism? Capitalism depended on looted capital and slave labour to prosper – resulting in the famous ‘laissez faire’ quip. Capitalists wanted and got ‘laissez faire’ capitalism – which was a ‘coda’ for unlimited slavery. The restrictions on laissez faire were actually restrictions on slaves.

Coverup .. Papered over .. Spit and polish ...

Coverup .. Papered over … Spit and polish …

Now under socialism, they get unlimited protection from ‘destructive’ competition. Which is being papered over by names like crony capitalism, free market capitalism. etc.,  etc.

Look at Spain and Britain

Spain’s national industry today is prostitution. Britain is floating on the sewage of the Bretton Woods bilge! After the multi-trillion dollar bailout, which has just begun, and with more than US$4 trillion in debt with China, Japan, Russia and India, neither is the outcome certain nor is the outlook bright.

Last but not the least, we must remember the power wielded by the Chartered Companies of Europe – another word for public sector.  East India Company was a public sector company!

The Rest of the World needs to be careful of these public sector monsters!

Public sector or oblivion

During the Great Depression, more than 19 auto companies (similar to the number of banks today) were folded into the Big 3. The Big 3 lived to fight for another 70 years. In their death throes, the US Big Auto is likely to go the way European auto sector has gone – public sector or oblivion.

Saddam lives (through his words)

The way it looks, it will mean the Mother Of All Mergers. At which point, there is no team of accountants in the world who can figure out what is where, or what condition what is in? And then the evasions, the lies the obfuscation can continue for some more decades?

Which model will US follow – public sector or closure? Subsidies or welfare?

Each time the music stops. there are fewer players

Each time the music stops, there are fewer players left


Real low … real truth (seen an oxymoron like that?)


The real question – who will pay for it?

Not the Americans! No siree. Definitely not.

Neither the American super-rich or the American welfare-poor? Not the American tax payers or the American tax evaders? Not the American Whites or the American Blacks?

It is the Chinese, the Russians, Indians, Brazilians and above all the Africans will pay for this! They have done, what bankers call non-recourse lending! The Chinese, Russians, Indians, Brazilians and the Africans, have no recourse. Who will the Chinese go to, for redeeming their US$2 trillion?

The bankrupt US of A? Welcome to the real world.

Transportation – US auto is down – but not yet out. It will limp along for few more decades.

Chinas ARJ21 - Advanced Regional Jet for the 21st Century

China’s ARJ21

Boeing will face fresh competition from BRICS – Brazil’s Embraer, Russia’s (Ilyushin)  and the Chinese (passenger jet programme). US electronics is stagnant – and fading power.

Computing Equipment – The US is still the prime force in the computing industry – though not on the manufacturing side. Chinese manufacturing is the dominant force in computer manufacturing.

Energy – US oil industry no longer dominates international markets the way they did in mid-20th century. The US Nuclear industry faces increasing competition from a public sector French and Russian industry – and India is planning to add its ‘frugal engineering’ muscle to this segment.

Higher education may save the day – What will sustain the competitiveness of the US industry – with out the dollar hegemony? The US education system is still significantly productive (measured in terms of patents, Nobel prizes, innovation, output, research papers, etc.). The US higher education system is notoriously hobbled by a weak school education system. How long will that advantage last – without an infusion of foreign talent?

The US entertainment industry remains the biggest in the West – and by many measures in the world also. Partially controlled by the Japanese, it however remains significantly competitive and dominating.

Agriculture is more fragile than estimated … The seemingly strong position of the US in agriculture is based on two aspects. Massive direct subsidies – of more than 8 billion dollars. And indirect subsidies of possibly another US$ 8 billion. Most of which goes to the 46000 farmers who account for 50% of the US agricultural production.

Communication technology – The communication sector has again seen the erosion of US competitiveness – with the domination of GSM technology seemingly solid for another 10-15 years. The long term direction for that industry anyways seems like IP-protocol systems. This may well result in commoditization of network equipment and terminal – and the increased importance of content. Low and medium switching technology may see greater commoditization with the eclipse of Cisco by the Chinese switch companies.

Green is still in the red … Environment engineering provides no major advantage to the US. Solar panels, wind energy equipment, hydrogen technology have all seen greater diffusion of leadership and market share. It may not give greater opportunity to the USA.

Finance and banking – The global financial markets were dominated by the US organizations in the past – but with the global financial crisis and the end to dollar dominance may see reduced clout for US firms. Their position will become broadly similar to current position of Swiss banks – mildly competitive, solid history, fading reputation.

Outlook – With such an outlook over the next 10-25 years, what the US leadership may focus on is Arctic oil. Oil will remain a strategic asset only with high prices (slower production increase and faster demand growth) and if no other energy source appears. Oil finds in the Atlantic and Pacific republics may spoil the party – for instance, Cuban oil.

Much like the respite of the North Sea oil to Britain, Arctic oil may provide a temporary halt to the slide in US economic dominance.

If the US can lay its hands on a significant part of it!

France, Germany, Canada, Italy  and Australia (not in G7) are tethering on the brink – under the weight of their social security system, and most of their business is in the public sector. A geriatric Japan is dependent almost entirely on exports to these declining seven. Japan’s investment in India and China has been negligible.

The US strategy

Most ‘future-of-China’ debates are incomplete as they miss a very important element –  the American template for co-opting client states. Let us call this as US-Client-Acquisition Programme (USCAP). The outcome and China’s economic future is tied to access to US markets, capital, technology, businesses – very closely.

Club de USA. (Cartoonist – Gary Varvel; publication date – 30-10-2008; source and courtesy – thedailynews.com). Click for larger image.

Club de USA. (Cartoonist – Gary Varvel; publication date – 30-10-2008; source and courtesy – thedailynews.com). Click for larger image.

The US has successfully executed US-Client-Acquisition-Programme (USCAP) a most out-sized ‘conquest’ in history. By using these economic levers, it has successfully created client states across Europe, SE Asia, Japan, etc. Some economies have taken the bait, used US incentives and become ‘successful’ client states.

Some prospective  clients states have fallen by the wayside. South American failures, the Middle East, Pakistan, post-Gorbachev Russian reluctance have been signal failures of  American recruitment.

The 2 trillion trap

Similar to the success of the Europeans, the Japanese, Koreans and the Asian Tigers, China too has embraced the US-client state model. Booming exports to the US, massive FDI by the US in the Chinese economy, has put China in the earlier position of Japan and Korea – prime sub-contractors to the US economy. Where the Chinese economy seems to ‘partially different’ is the military side. On foreign policy and ‘American’ culture, the Chinese have been ’superficially’ resistant and nominally ‘assertive’.

The Chinese miracle, much like the ASEAN, Japanese and European miracles before, is using exports to the USA as a stepping stone. Chinese growth and expansion depends on access to the US markets and a devalued currency. For how long will the US allow the Chinese to do that? Another 5 years – or is it 10 years.

As for India

India is unlikely to drastically change its trajectory.Its economic success will continue evenly, based on its entrepreneurial class. Its public sector engagement will reduce.

It is likely to improve its relation with China, Russia and the US. EU will continue with own perception of self-importance. The crucial factor defining India’s position will be Pakistan. Will India continue whine about Pakistan – or will take some covert /overt action against the twenty off terrorist training camps? Will it take charge of stabilizing Afghanistan?

China’s assertiveness will lessen in the face of resolute Indian actions – and not moral posturing or protests. While the moral under pinning is certainly essential, the Indian position will need reinforcement.

5 Responses

Subscribe to comments with RSS.

  1. Dr. Jessie Mercay said, on December 7, 2009 at 4:19 pm

    It seems that the majority of westerners have their heads in the sand regarding what is really happening in the the west. The common people, working class and poor are completely unaware that they are being sold a bill of goods (a big bill by the way) that will cowt them their life, liberty and pursuit of happiness. My forefathers fought for freedom in the American Revolution – they must be rolling over in their graves.

    This was a frightfully accurate article. Aside from the fact that I love the country, culture and ancient knowledge, no wonder I keep on thinking of moving to India.

  2. opsudrania said, on December 7, 2009 at 6:21 pm

    Dr. Jessie Mercay,

    The present day Americans are nothing but the descendents of British, yet there is so much aversion in the everything American against the British – their own kith and kin. The reason is that the western world puts primary importance to “this world” which is regarded by the “Ancient Indian Traditions” as ephemeral, transient, false and painful.

    Unfortunately, the India being colonised by “The British” ; by its non-white race and native colonised inferior race (master-slave psychology), they tried to undermine and downplay its (Indian) every custom and practices as of no value. This is blatantly reflected in the minutes of Lord Macaulay (1833 and 1835). He admits of no knowledge of any Indian scriptures and languages, yet he was determind to impose “English” in its every aspects on Indians. He succeeded in his mission with the tacit collaboration of Governor General William Bentinck on 7 March 1835 who wrote,”the great object of the British Government ought to be the promotion of Europian literature and science among the natives of India”, but imagine, at what cost.

    India is the only philosophy, I am convinced, that can save the “Present Day Wayward Humanity”. Secondly, it slowly deprived the world of its enormous wealth of extremely useful knowledge and education, if developped, could have helped to save the ‘Humanity’ from its great many inhuman tragedies. Macaulay later himself quotes Lord Baron, “The 9/10th calamities of this world are due to a combination of high intelligence with low desires.” Does he excuse himself from his quote?

    Jesus said,”Man can not live by bread alone”. He was thoroughly exposed to the Indian way of thinking at the Buddhist monasteries during “His lost 16 years of self-exile”. He knew the value of old Indian traditions through Buddhism. Vedic culture is the only deep spiritual concept which exhorts you to recognise the transient nature of this “Physical World”, to the extent that the Indian enlightened monks and sages derecognise their every worldly identities including their name given by birth. I can recapitulate no other cult or religion that can match the vedic concept. This is the reason that “India is rightly called a land of Spirituality”. It has a very deep significance. You need a really good 2ndlook-View from a Square Prism. Far above the mean intellect of Lord Macaulian style myopic flat western prism.

    Thousands of years of so called “slavery” on this Indian peninsula could not wipe out the present “vedic sanskriti” from this land, is in itself a sufficient proof of its deep roots based on “Truth”. I finish with the vedic quote,”Dharmo Rakshati Rakshitah, Paap Mool vinaashanam”. (Righteousness protects the righteous; unrighteous is the root cause of destruction). It is this very sustainable philosophy that still advances the ‘Welcome’ to the adherents of this very vedic philosophy from India. I am convinced that until the world body realises this basic truth, they are alluding the peace as much the peace is alluding them.

    In this regard, I strongly laud the writings of Mr Anurag Sanghi very highly and emancipating and salvaging to the world, edging on the brink of modern scientific holocaust and annihilation. The sooner the world bodies realise it, sooner it is better.

    The current raging controversy between ‘Islam’ and Western society is an ample proof of the legitimacy of the Indian “Eternal Vedic Culture”. Please do not take my words vis-a-vis. All should examine its veracity and truth through their own square prism.

    Dr. O. P. Sudrania

  3. Dr. Jessie Mercay said, on December 8, 2009 at 12:38 am

    Dr. Sudrania,
    You comments are well put. But I must make one correction, the majority of americans are not British descendents. Most of my bloodline is French, Swiss, and German. (42% of americans are of German descent, 32% Irish – and don’t dare say they are British- they won’t like that-, almost 25% African; and only 24% English.18 % Mexican, 15% Italian, and 20% native American… then some smaller groups…)That point aside, I couldn’t agree more that India holds the knowledge to “save the world.” I am deeply indebted to vedic knowledge for my own sanity. Your quote from Manu Smirti (I believe it is of that origin) is very well related to the topic at hand. If you check back in previous posts, I posted the quote of Lord Macaulay. My first encounter with that quote was a number of years ago during a lunch stop at an establishment in Kumbakonan, Tamil Nadu. I drew all of my students arount the quote which was posted on the wall outside. I made them read it out loud so that they would always remember that but for the tenacity of the people of India, we would not have the great and profound knowledge that we were ther to study.

    Dr. Jessie Mercay
    Body American, heart and soul Indian

  4. opsudrania said, on December 8, 2009 at 4:24 pm

    Dr Jessie Mercay,

    Thank you with my deep sense of gratitude to for your kind update on my poor historical knowledge. I have a broad grasp, but correct me if I am wrong again, the initial 13 colonies of America were perhaps mostly from the Britain, or wasn’t it. I thought that the present conglomeration is a later development. Now, of course, you have a lot of people from India, Pakistan and other adjoining countries.

    When we are both on Macaulay, may i quote you a paraphrase that is in wide circulation in Indian subcontinent:”LORD MACAULAY`S ADDRESS TO THE BRITISH PARLIAMENT, 2 FEBRUARY, 1835

    I have traveled across the length and breadth of India and I have not seen one person who is a beggar, who is a thief. Such wealth I have seen in this country, such high moral values, people of such calibre, that I do not think we would ever conquer this country, unless we break the very backbone of this nation, which is her spiritual and cultural heritage, and, therefore, I propose that we replace her old and ancient education system, her culture, for if the Indians think that all that is foreign and English is good and greater than their own, they will lose their self-esteem, their native culture and they will become what we want them, a truly dominated nation”.

    I know that he was in India at this time and the word parliament used only signify the ignorance of the even literary geniality. I have failed to get a direct proof in Macaulay’s available literature. But you will agree that those were the days when the recording systems were very primitive. Even if he did make this remark, it may be difficult to arcieve. On perusing the British parliamentary archieves, they do not have any records before 1837. Further the records of colonies were even otherwise treated as nominal and trivial.

    Can you do a bit more digging? If you get more information, please do send me. Secondly spirituality is my favourite subject, please do feel free to interact on my mail:

    God bless

    Dr. O. P. Sudrania

  5. Dr. Jessie Mercay said, on December 8, 2009 at 8:07 pm

    Thank you Sir for your comments. It is interesting that the English settled Massachusits, the Dutch first settled New York and PA; the Spaniards settled Florida; and the Mexicans were in California, Arizona, New Mexico and Texas. All at about the same time. Of course, the indigenous Native Americans have been here for centuries and were disenfranchised by all of the invaders.

    I have tried in the past to learn more about Lord Macaulay but have had little success. Some writers have defende him while others did the opposite. Regardless of the facts, I believe that the British acted in India the same way they did everywhere else: Pretend to be saving the natives from ignorance and take all of their natural resources.

    Unfortunately the source of most of this colonialization is due to the few wealthy bankers. This has been the case for hundreds of years. We are now in the same situation as we were 200 yrs ago – the bankers are taking over the world in a new form of colonialization.

    Jessie Mercay

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: