Americans travel the world giving out pearls of wisdom on finance & business. The subprime losses expose their utter folly and failure of any control and their hypocrisy.
Thank God, rupee is not convertible. Otherwise, losses of our banks would have run into billions. The poorer Indians would have also picked up the tab of the Americans' excesses.
US is unable to face the reality of excessive cosumerism. They have no qualms in importing oil for their multiple SUVs, MPVs with borrowed money. Their foreign policy is tailored towards their need for raw materials. No wonder, these have rubbed into the man in the street for living beyond his means. Their credit card debts are mounting. They feel they can live by printing their dollars forever. The reality jolt will have cascading effect. Already their big companies are going hat in hand for survival. They have avoided China with their $1.5 trillion reserves. It is only a matter of time, the dragon flexes its muscles and gobble up all in its way.
The sleek marketing by US has its limitations. Before long, old fashioned prudence will win the day. The US gives intant gratification to its top CEOs based on short term profits. By the time their follies are exposed, they have left the scene. Even if around, they are given hundreds of million pay outs.
We can learn a lot from US from their plusses of innovations & cretivity, but more from their excesses of living in a make believe world of opportunism.
RE:failure of controls
by Sid Batchu on Feb 09, 2008 12:51 AM Permalink
Well, somewhere along I get the feel that we are doing a US vs. India scenario here which I always disagree with. Both countries have different cultures and dynamics and macros which makes any comparison baseless. As far as excessive consumerism goes, all I have to say is that citizens with no money lead a better life in America although they maybe living on living on borrowed money. Where as in a country like india [although i hate comparisons]they dont even have that option.Afterall everyone has one life live. I agree there should have been more controls while disbursing loans, but no country is perfect, just have to learn from mistakes.
RE:failure of controls
by shiva on Feb 09, 2008 07:10 AM Permalink
Sid Batchu,
The thrust of my argument was US has to put its house in order to be credible. Their huge trade & current account deficits are unsustainable and will make the whole world monetary system go into a tail spin. I get the feel that the US is smug, as it has got away with printing dollars and attracting investment in Treasury Bills etc to meet the huge deficits.
The bottom has to give way at some time. Though we have our poverty to content with, let India be prudent, learning from the American excessess of capitalism while embracing the plusses with a pinch of salt.
RE:failure of controls
by Sid Batchu on Feb 09, 2008 08:21 PM Permalink
I agree, although I believe the economic boom in India is mostly a result of global cycle and availability of cheap labor. But, as in most instances India appears to be mimicking US and creatign a dangerous situation for itself. The same consumer credit issues are fast surfacing there. The current boom in India is a result of a global phenomenon and availability of cheap labor. Labor costs are rising very fast and how long can we sustain with a falling dollar.
