A 'clever' blog of a 'free' mind
Posts tagged recession
Protectionism of economy.. continued
01064 days
I wrote my thoughts yesterday on how the economic protectionism could come back and harm the economy in the long term and I did put a comment on Sramana Mitra’s blog about this to request her comment. She has been kind enough to respond back and point me to one of her earlier blog article on Forbes.com that talks about Perilous Protectionism.
One particular impact she states in her article was about the eventual cost increase if the outsourcing to other countries were to stop. She has also given an example of how Motorola will find it difficult to keep the prices of its cellphones down, if its been forced to operate in the US only region for manufacturing its goods.
I would recommend a read on this article who wants to know more on this topic.
Protectionism – is it good for economy in the long term?
01065 days
I have been having this question in my mind since a very long time and unfortunately could not find anything that would give me right answer.
After reading much about President Obama’s stimulus plans & his policy over outsourcing jobs, things do not look very promising for Indian companies. There is a good news article written on BusinessWeek.com that outlines how his policies would affect Indian IT & outsourcing companies in India. In one of his policies, Obama outlines how he plans to prefer giving jobs to more native americans than immigrants. Sort of protectionism !
I can obviously understand the rationale behind him doing so, i.e, to create more job opportunities for the americans and try to revive the economy. Good enough reason ! On another note, he is not ‘forcing’ the companies to stop doing outsourcing to other countries, he has only stopped them from availing the tax benefits. If the company thinks they get good profit by moving work offshore (at lower labour & operating costs) they might as well continue to do so, but obviously need to pay more tax.
What impact this change in policy will have on US itself? Is it being more protectionist and changing its image of the most open economy in the world? Is it moving towards protectionism?
I have heard cries about how US is playing its foul play and being protectionist over its economy and assets and how they should not do it. In this context, when I think of India, I do not find much difference itself in what India have been doing in past.
Protectionism has been happening in democratic India since a very very long time. May be from the time of its independence from the British rule. The very form of protectionism in India is called “quote & reservations” in education, government jobs & quite a few other areas for few typical casts & religions. The original idea of cast reservations in education & jobs was to give the backward class sectors an opportunity to learn and upbring themselves on par with other (so called advanced) societies in India. However, over the years, this has become misused over and over again and has totally lost its original meaning.
Year on year, the governments in India have been unable to remove, or even reduce the reservations and unfortunately moving towards allocating it to more casts. Considering today’s world, I believe the concept of “reservations” is outdated for for a developing country like India. We need talented individuals to come forward and help build the nation.
What worries me, in long term that, if the countries such as US & those in Europe go further on the way of protectionism and impose policies that would stop (or significant impact on) immigration and inflow of talents from India and other developing countries, where would this talent pool go? The dearth of opportunities for higher education and government jobs in India for talented individuals is making them look for private sector or move out of country for seeking better opportunities and if the developed countries shut their doors, what will happen?
Another story on recession ..
01069 days
by Swapnil
in Random thoughts
I do not know who is the author of the story, so can not direct the credits to the author. This was forwarded to me by one of my friends and thought worth putting on my blog.
So here you go,
A very poor uneducated villager starts a snacks centre on a busy street in city with a small rocket stove, pan and some basic equipment. Initially there is very slow response and slowly people start liking it. Rush increases day by day and he upgrades to a better bigger stoves, larger equipment, recruits a few helpers and his business goes in boom. By that time his son just graduates and he brings the son also in business. Few days go by and one fine day son tells father – ‘Dad, do you know there is a recession?’,
"no, what is it?"
"dad, everywhere in the world there is recession, all newspapers, TV channels, share market .. .everyone is talking about it. it is going to hit all the businesses and all classes of people. we need to plan for recession dad." …. and he explains everything in details.
The man thinks son is a educated person, he reads newspaper, he understand what is being explained on TV etc. so he better knows the thins and I should listen to him. Next day he sells some of his stoves and equipment, reduces staff by half and reduces overall production in anticipation of bad times. By that time the rush was no less…. people start hitting the snacks centre only to realise there is not enough stock for a couple of weeks…. it spreads and they stop coming to the snacks centre. the rush decreases drastically and it becomes very difficult to even sell a few snacks which he used to sell in his early days.
The man thinks…his son was right. The recession hit them as well. It was good that he heard his educated son’s advise.
That’s what recession is. Its all mindset and more so it is ‘so called’ highly intelligent people’s mindset.
Moral story indicating current recession in IT
01086 days
by Swapnil
in Random thoughts
One of my friends forwarded this story to me which perfectly makes sense when you look at the way IT has scaled in general. I am not sure if this was written by someone who was utterly frustrated but, I suppose everyone in IT can probably relate this to his / her world and find similarities in a way there are too many people who “manage” the things rather than actually “work” !
The story goes as follows,
Once upon a time the government with Ruling Party XYZ.. had a vast scrap yard in the middle of a desert.
Ruling Party XYZ Said.. – “Someone may steal from it at night.”
So they created a night watchman position and hired a person for the job. Then Ruling Party XYZ
Said..
- “How does the watchman do his job without instruction? ”
So they created a planning department and hired two people, one person to write the instructions, and one person to do time studies. Then Ruling Party XYZ Said..,
- “How will we know the night watchman is doing the tasks correctly?”
So they created a Quality Control department and hired two people. One to do the studies and one to write the reports. Then Ruling Party XYZ Said.. ,
- “How are these people going to get paid?”
So they created the following positions, a time keeper, and a payroll officer, then hired two people. Then Ruling Party XYZ Said..,
- “Who will be accountable for all of these people?”
So they created an administrative section and hired three people, an Administrative Officer, Assistant Administrative Officer, and a Legal Secretary. Then Ruling Party XYZ Said..,
- “We have had this command in operation for one year and we are $18,000 over budget, we must cutback overall cost.”
So they lay off the night watchman.
Recession, economic downturn and how reality bites ! – Part 2
01091 days
by Swapnil
in Mind thoughts
I did post some of the experiences of the recession and its effects happening in the office world yesterday here, there are several things happening at nearby places where I live, making the effects of credit crunch more visible.
Some of the things that have happened and are obviously known to everyone, most notably the closure of the Woolworths stores across UK (one was near to my house) and several other key high street retailers are giving out closure notices to customers and going on closing down sales ! The situation is really pathetic here in UK and you see general worry on the faces of most of common people 
One particular instance that I felt really bad was the fact that a corner grocery shop next to my house was forced a closure because those could not really afford to keep the shop up and afford the regular expenses of it. They are a very nice Sri Lankan couple and really good guys. They had recently opened a new Asian groceries store next to their off-license shop and I was really looking forward for them to make good economic progress due to it, but nonetheless it was not to be. Finally after 3 months of having the shop opened, they had to close it due to affordability issues. I felt really bad for them for the closure of their shop ! Good to see at least their off-license shop is working as it used to work.
The sterling value is also dropped significantly against all other major currencies in the world and obviously a worry for all of us in general.
Anyways, I really hope this gets over, and rather soon ! Finally, just to make my mind free, I want to say “F**k you” to all those banks, their senior management and policy makers and the people who are responsible for this state of economy.