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Archive for the ‘Politics’ Category

MalalaMalala is right about women’s education. This little girl eloquently says what we all should agree on- that girls need to be educated. She’s even been attacked for saying something that has such strong roots within Islam.

Had it not been that Aisha (RA) was a scholar or that Fatima (RA) was a scholar, we would not have known explanations of many verses in the Qur’an.

Malala deserves to be lauded within our community.

Why the West is so excited about her struggle and her suffering, is an entirely different matter.

The suffering of Malala will be used again and again to kill her fellow citizens and fellow Muslims- her brothers and sisters. Her story will be told every time a bomb is dropped from drones, and more hearts stop beating.

Drone attacks that played a part in creating the TTP.

In every newspaper, every TV channel, whenever Malala comes up, pundits shake their heads at the brutality of the TTP- an organization that their government planted the seeds of in the 80’s.

A very close parallel is the brave Malalai Joya, who’s been touted before as the voice of Afghan women when she condemned the Taliban. As soon as she started demanding West withdraw from her country, Western media started ignoring her.

Malala Yusufzai can make sure she will be heard, loud and clear, if she goes up to that podium and says no thank you.

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GDP of a country gives some idea about how well it is doing in terms of production. In the last two centuries, Western economies overwhelmed others by far.

In the 1950s, US and Europe combined made up 60% of world economy. That’s not counting Canada, Mexico and Australia.

If we look at the fractional share of US+major European countries over the last four decades:

GDP of the US and Europe as fraction of world GDP

We see that their share has been falling over the years. From 62% in the early ’70s, to about 47% now.

So who’s gaining?

There’s a lot of talk about the so-called BRIC (Brazil, Russia, India and China) countries. These countries are supposedly rising stars in the world economy- and have seen unprecedented economic rise. Let’s see if that’s true.

Here is BRIC’s share of world economy over the years:

Fraction of world GDP controlled by the BRIC countries

So it did indeed go up from about 8% of world economy to about 16% now. Impressive.

However, it’s not the whole picture. Let’s examine each of the countries separately. First, Brazil-

Brazil’s GDP divided by the GDP of the world

Brazil has seen a steady rise in the last decade in it’s share of world economy. It now commands about 2.7% of world economy, not very unlike it’s share in 1996 (2.9%), 1982 (2.7%), and 1976 (2.6%). So its position now is by no means “unprecedented.”

Next, Russia:

Russia’s share of world GDP

Russia saw a steady decline in it’s share of world economy through the ’90s. It has recovered it’s strength of the early ’90s now. It had 2.5% of world economy in 1990, now it has about 2.7% too.

What about India?

Indian economy as a Fraction of world GDP

We can see that India has seen a steady rise in it’s share of world economy from the ’90s from about 1% to 2.2% now. But it’s nowhere near it’s best days in the early ’60s share of 3.5%. (Note that we fought two major wars right around that time- with China and Pakistan, and focus shifted from development to armament.)

So, as you’ve guessed, among the BRIC countries only one that has seen real unprecedented rise is China. Here is how it’s share of world economy have changed over the years from a mere 2% to about 7% over the last two decades. It is interesting to note that it had a share of world economy similar to India in the ’60s. Now China’s economy is four times that of India’s.

China’s GDP/world GDP.

But that’s not all. Here is the total share of the major Muslim economies in the world (Turkey + Indonesia + Malaysia + Saudi Arabia + UAE + Qatar + Pakistan + Bangladesh + Libya + Algeria + Kazakhstan).

Fractional share of Muslim economies in the world (total gdp of Muslim countries/world gdp)

That goes up from a baseline of approximately 2.7% in the ’90s to 5% (and rising) now.

This list includes Kazakhstan (became free only in 1991) and Bangladesh (created in 1971). Excluding Kazakhstan, and Bangladesh we see the following:

Fractional share of Muslim economies in the world (Excl. Kazakhstan and Bangladesh)

Therefore, Muslim economies have yet to reach the share they had in the ’80s, in spite of their rise in the last decade. I can only hope and pray that their growth will not be stifled this time. Ameen.

It would be good to know the causes and be able to make some predictions.

Data is from Wolfram Alpha.

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This was first published as part of a separate post, but it should be it’s own post.

There is a lot of talk about the “subprime mortgage crisis,” but there is not much talk about the underlying systemic reasons that led to the crisis.

The main problem was that property values in the US were overinflated. Average house prices in the US hovers around $200,000. Compare that with the average household income of around $46,000, which means that the average house is more than four years worth of income of an entire family. If the cost of financing is factored in (because most Americans buy house that way), then the cost become in excess of $400,000. Nine years worth of income of an entire family-  twenty to thirty years worth of saving of an entire family. It makes no sense.

As early as mid 2000s there was an indication that prices will start to adjust (i.e. reduce) due to a saturated market. However, US consumer spending is closely tied to property value due to ubiquity of mortgage. As a result of price adjustment, then, the total size of US economy would have shrunk, and would have cause significant short term uncertainties.

It meant there will be major upheaval if the establishment allowed markets to adjust itself (which means “let prices fall” in this case.) So they panicked.  They decided to pump up property values by stimulating demand by encouraging mortgage lending. The banks played along because it cost them very little to lend, and they earned big. Banks started giving out loans without verifying ability of the person to pay back. For a while.

But then it came to the brink of collapsing.

As people (so called subprime) failed to pay their monthly instalments, their houses were seized (foreclosed) and banks were left holding property. (It is transfer of “real wealth” from “market” to “bankers” because the banks got these properties for free- the money the lent out to the mortgage holders were created out of thin air. It’s not an anomaly- that’s how US economy works.) However, the banks don’t know what do with this wealth. First of all, they don’t trade in houses, moreover, if they start selling these- prices will plummet.

What happened at this stage is unclear, but Robert Scheer of truthdig.org claims that the banks threatened to bring down the economy unless they were bailed out. Maybe they were threatening to sell these properties which would have brought property prices down thus bringing US economy down. Who knows what happened behind closed doors. Anyhow, the government saw potential for trouble there, and decided to bail the banks out- so that the banks can hold on to these properties until they can sell them at current market values. It’s ended up working well for the banks, although they are not entirely responsible for what happened.

Even after bailout, the main problems remain. Unemployment remains high. Production is low. Wages are stagnant. It seems, therefore, that property values still are inflated. Manifestation of that imbalance has only been delayed but sooner or later markets will have to “adjust.” Something has to give.

The establishment is not done yet. Fed is going to print 600 billion in order to “stimulate the economy.” Not sure if it’ll help the US economy- likely the money will flow out of the country as investments/purchases into surplus (exporting) economies. But more importantly it’ll hurt anybody who holds US dollars. It’s a involuntary transfer of real wealth of sorts. A stick-up.

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Just watch him spurt banalities about how financial markets are affecting everyone. He does not give me the impression that the understands what is going on. (The interview is towards the end, around 17 minutes mark, about 5 minutes long.)

(more…)

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This is likely a conspiracy theory that has no basis whatsoever.

Wikileaks is merely the messenger. They are publishing internal memos and reports etc of the US army, and of course that will be written in the US perspective. Much of these are first information reports- not all of them are factual. (For example the people killed with the Reuters photographer were logged as “insurgents.”)  We should not take these documents at face value, and certainly not conclude that WLks is trying to push US interests.

Here is why: these documents provide legal basis for the US to be sued at International Criminal Court for specific instances, including it’s personnel. Two, they portray a horrid picture even from the US’s own perspective. They will never want that out. I mean 60% of the people they killed could not be passed off as insurgents. Do you really think they will want this stuff out? Are they mad?

Don’t shoot the messenger.

I seriously think Julian should get the Peace prize. Now that will be a real bold move by the Nobel committee. Let’s see if they have the courage. It’s easy to grant Chinese dissidents Nobel. It’s another thing to recognize western dissidents.

I am also wondering how the internal documents of Indian army in Kashmir, Pakistani Army in NWFP, and Israeli army in Palestine will reveal, if they were ever to come out. Who knows?

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Saudi Weapons deal

Saudis are buying $60 billion worth of military hardware from US. It is not a wise decision on the part of the Saudis, IMHO.

Wasted money.

It will bolster the weakening military-industrial complex, which is a longer term security problem for the Saudis themselves.

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Israel has been a strategic asset for the US since the late sixties when the Arab countries turned to USSR for friendship, and has benefited greatly from the relationship. US relied heavily on Israel to counter Syrian and Egyptian governments in the region, and provided Israel with aid,  intelligence, expertise, equipment and political support. The cold war is over, and what Israel is worried that US may not care about it as much.

The Israelis came in with a belligerent attitude onto the Turkish ship Mavi Marmara, killing nine people from close range. Incidents that was certain to cause uproar in Turkey, and sour Turkish-Israeli relationship. This appears to be a deliberate goal of the campaign.

But Israel had a friend in Turkey in the region, even until 2008.

Which begs the question: why? Why alienate their only ally in the region?

It appears that now they see Turkey as a regional challenge. Turkey has been a staunch ally of the US for longer than 60 years,  recently has risen economically, and now the size of Turkish economy is three times that of Israel. They used to be comparable not so long ago.

Israel is afraid to have a country that is an ally of the US in it’s neighborhood that is much more important politically and economically than itself. It fears that Israel will become insignificant to the US (compared to Turkey) in the region. It therefore wants to sabotage the relationship between the US and Turkey by forcing US to choose between the two- so as to remain the only ally US has in the region. They want US to depend on Israel in that region and only on Israel. It will open US to blackmail.

Which is very clever, if not found out.

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