Comments for The Back-Benchers' Blog

Comment on About the Lokpal and Jan Lokpal Bills – I by Ofertas,Ofertas y descuentos, ofertas mayoreo, ofertas tablets

Ofertas,Ofertas y descuentos, ofertas mayoreo, ofertas tablets — Fri, 03 Feb 2012 04:53:33 +0000

Ofertas,Ofertas y descuentos, ofertas mayoreo, ofertas tablets…

[...]About the Lokpal and Jan Lokpal Bills – I « The Back-Benchers' Blog[...]…

Comment on Dr.Swamy and Freedom of Speech by Aditya Kuvalekar

Aditya Kuvalekar — Fri, 20 Jan 2012 01:10:24 +0000

Vivek, thanks for the comment.
Your point about the compulsion of listening to others is very important in my opinion. It is true that most noise on the internet comes from people who don’t listen to others and only yell. That’s probably the reason why we have such a low IQ of public discourse on the net.

Comment on Dr.Swamy and Freedom of Speech by vivek

vivek — Wed, 18 Jan 2012 09:05:32 +0000

I think all newspaper articles which are not news should be peer reviewed, just like what we have for science journals :P. On a serious note, what we need is a culture and platform for debate, good debate I mean. For the speakers who shout for freedom-of-speech, I suggest there should be a law of compulsion-of-listening-to-others too. The worst penalty I can think for Swamy is to send him to a most peaceful-only-Muslims- village in a remote corner of India for a month or two. On a personal note I won’t mind sending him to Pakistan (erstwhile a part of Hindustan) too.

Comment on Aircraft Hijacking of 1978 by Aditya Kuvalekar

Aditya Kuvalekar — Fri, 23 Dec 2011 22:31:53 +0000

Indeed Atanu. The state of affairs must be fixed. It’s quite heartening to see your blog. More and more people should read it.

Comment on Aircraft Hijacking of 1978 by Atanu Dey on India's Development » Blog Archive » Hijack a Plane, Get Rewarded by Govt of India

Fri, 23 Dec 2011 22:03:34 +0000

[...] [Hat tip: Aditya Kuvalekar.] [...]

Comment on Aircraft Hijacking of 1978 by Atanu Dey

Atanu Dey — Fri, 23 Dec 2011 21:25:59 +0000

Aditya, thanks for the post. Most interesting. I did not know this and I am sure that 99.999999 percent of Indians don’t know this. This state of affairs have to be fixed.

Comment on An anecdote after Sargent’s Nobel by News You Can't Use!

News You Can't Use! — Thu, 10 Nov 2011 06:10:01 +0000

[...] friend Aditya Kuvalekar recalls an anecdote of Thomas Sargent (Nobel laureate in [...]

Comment on And the drama continues by lg lcd monitor reviews

lg lcd monitor reviews — Sat, 05 Nov 2011 07:42:15 +0000

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[...]And the drama continues « The Back-Benchers' Blog[...]…

Comment on Why Baba is not Anna and what Anna needs by gouty diet

gouty diet — Thu, 20 Oct 2011 02:06:29 +0000

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Comment on Redistributive policies, inflation and the trade-off by Gadadhar

Gadadhar — Wed, 21 Sep 2011 08:50:18 +0000

1. “extremely high tax rates are known to induce strong disincentives for working”.

I can understand, but there are many lands where this doesn’t happen. E.g. Denmark (48%), Sweden (46%), Belgium (43%), Finland (43%). These countries usually run trade surpluses, which means they produce more than they consume.

Why industrialists can still take up projects in these countries is because tax rate might be the same for employees and the business owners, but the tax structure is different. Owners get to write off all the expenses (including the salaries of the employees) and losses first, and then pay tax only on the profit. But employees pay tax first and then get to spend from whatever is left.

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2. “Firstly, if you look at the above example it is conceivable that since the demand for food products will increase, we are likely to face inflation.”

Not necessarily. When manufacturers/farmers see that there’s going to be demand, they increase their efficiency and produce cheaper and better goods. Computers and cellphones have been getting cheaper for years on end.

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3. “But then, is it a bad thing from society’s perspective? In fact, this could even be taken as a success of the policy that overall consumption of the essential commodities is now higher.”

Contrasting my point (2), consumption doesn’t mean a thing unless the country increases production. In fact, the consumption can’t increase till production increases. It can increase if there’s no production, but only if you take on debt. There’s no other way to increase consumption.

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4. “Those suggesting that Consumer Price Index rose after NREGA came need to take a course in causality”

CPI is a stupid measure. It’s to fool the masses. The real inflation has always been higher, nay much higher, than what CPI (or WPI) suggests. Inflation doesn’t mean something going up or down (i.e. prices), but something inflating. Real inflation is the expansion in money supply. I agree that it eventually causes price inflation, but CPI as a measure of price inflation is flawed. The basket of goods that it measures is outdated, and it shows much lower numbers than reality, and keeps the vote bank relatively happier.

Also, as most tax breaks are indexed to price inflation calculated using CPI, it swindles the masses. Let me explain. If M3 of India has become 10 times since (say) 10 years ago, the real inflation is much above 50%. But CPI is tweaked to show ~10%. Then if you sell something and you must index your capital gains to the prices 10 years ago, you’ll get tax breaks only using the 10% inflation, and not 50%+ inflation rate.

CPI is just not something to look at.