And The Brick Finally Drops

5 Lessons From the Rise of the BRICs

STATE CAPITALISM WORKS

Only one of the four BRIC economies could be considered free: India. The other three are deeply capitalist, sure -- finding success on international markets has been a big part of their rise -- but their version of capitalism includes the strong guidance of the government. State capitalism means state-owned firms like the massive China National Petroleum Corporation or Gazprom, but it also means heavy regulation, frequent intervention, and sometimes a degree of state control over markets and firms that doesn't look so capitalist. But this a statist means to a capitalist ends, designed to maximize long-term growth and encourage development. It doesn't always work out that way, but their success is hard to ignore, especially as the great free market stalwarts -- the U.S., Europe, Japan -- fall on increasingly hard times.  

The state capitalist model will be an attractive one for other developing economies. Rising neighbors in Asia, Africa, and Latin America may seek to engage with the global markets but, rather than opening everything overnight and letting Westerners conquer their entire economies, protect and grow domestic firms that can compete internationally and will funnel money back into development. But the West can learn as well. As free markets -- especially financial markets -- fail and fluctuate, free marketeers in Washington and London and elsewhere may want to ask if a bit more state intervention and regulation is worth considering.

On Corporate Power

Corporations Have No Use for Borders

The decay of Canada illustrates two things. Corporate power is global, and resistance to it cannot be restricted by national boundaries. Corporations have no regard for nation-states. They assert their power to exploit the land and the people everywhere. They play worker off of worker and nation off of nation. They control the political elites in Ottawa as they do in London, Paris and Washington. 

"India's income inequality has doubled in 20 years"

India's income inequality has doubled in 20 years

NEW DELHI: Inequality in earnings has doubled in India over the last two decades, making it the worst performer on this count of all emerging economies. The top 10% of wage earners now make 12 times more than the bottom 10%, up from a ratio of six in the 1990s.  

Moreover, wages are not smoothly spread out even through the middle of the distribution. The top 10% of earners make almost five times more than the median 10%, but this median 10% makes just 0.4 times more than the bottom 10%.  

... 

Wage inequality has driven more general income inequality in the country. India has got more unequal over the last two decades-India's Gini coefficient, the official measure of income inequality, has gone from 0.32 to 0.38, with 0 being the ideal score. In the early 1990s, income inequality in India was close to that of developed countries; however, its performance on inequality has diverged greatly since then, bringing it closer to China on inequality than the developed world.

There is evidence of growing concentration of wealth among the elite. The consumption of the top 20% of households grew at almost 3% per year in the 2000s as compared to 2% in the 1990s, while the growth in consumption of the bottom 20% of households remained unchanged at 1% per year.  

In comparison, the income of the bottom 20% of households in China grew at double the rate in the 2000s as compared to the 1990s, while the increase for the top 20% of households was much slower. In Brazil, household incomes have been growing faster among the poorest households than among the richest for the last two decades.  

The Slow Death Of BSNL

BSNL does a U-turn on buying GSM gear through auction:

Bharat Sanchar Nigam Ltd has scrapped plans to buy GSM equipment through a 3G-like reverse auction process . The company has instead floated a revised tender with the old system wherein vendors quoting the lowest amount will be selected. 

Though the bids will be made online, the telecom major has done a U-turn on its earlier plan to allow equipment vendors to revise its offer through a reverse auction mechanism.

... BSNL insiders suspect that the change may have happened at the request of some of the equipment vendors which feared that a reverse auction could lead to aggressive price cuts by the Chinese players. “In a reverse auction, the vendor with deep pockets and good financing back up, stand to gain as they would be able to cut down on price. While this is good for BSNL in terms of getting the best price it may edge out some of the bigger European vendors out of the play,” said a market watcher.

...BSNL workers' union, meanwhile, has shot off a letter to the Communications and IT Minister, Mr Kapil Sibal, on the issue. 

“The present tender for procurement of 14.37 million GSM lines through e-tendering could not reach anywhere for the last more than a year, due to sheer incompetence and extremely poor decision-making capabilities. In the meantime, it decided to float new tender, scrapping auction mechanism. This is simply atrocious, fully exposing professional integrity, very poor understanding on part of management and to top it all its total lack of concern as far as revival of BSNL is concerned,” said Mr G.L. Jogi, General Secretary, Sanchar Nigam Executives Association, in a letter sent to the Minister in October.

Why would the government let this kind of thing continue unless they want to kill off BSNL?  Pathetic morons.  Nice work by the European vendors too.  Nice to watch Capitalism at work.

Tax Avoidance - The US Corporate Way

Tax Avoidance on The Rise.

Airplane Boarding Woes

Most Annoying Airline Delays Might Just Be in the Boarding:

It now takes 30 to 40 minutes to board about 140 passengers on a domestic flight, up from around 15 minutes in the 1970s.

The invisible hand! Competition! Progress!

Fishy Definitely

On the menu, but not on your plate.

It happens for a range of reasons, from outright fraud to a chef’s ignorance to the sometimes real difficulty of discerning one fillet from another. But industry specialists say money is commonly the motivator: It’s a way to increase profits - a cheaper fish sold as something more pricey - on the assumption that customers will not detect the difference.

Here's What The Wall Street Protesters Are So Angry About...

Drug Companies Rigging The Markets?

From The Hindu:

...the real story goes way beyond the question of Prozac. This new study — published, paradoxically, in an open-access journal — tells a fascinating story of buried data and of our collective failure, as a society, over half a century, to adequately regulate the colossal global $550b pharmaceutical industry.

The key issue is simple. In any situation, to make any kind of sensible decision about which treatment is best, a doctor must be able to take into account all of the available information. But drug companies have repeatedly been shown to bury unflattering data.

Sometimes they bury data that shows drugs to be actively harmful. This happened in the case of Vioxx and heart attacks, and SSRIs and suicidal thoughts. Such stories feel, intuitively, like cover-ups. But there are also more subtle issues at stake in the burying of results showing minimal efficacy, and these have only been revealed through the investigative work of medical academics.

One example came just last month (January). As I reported at the time, a paper in the New England Journal of Medicine dug out a list of all trials on SSRIs that had ever been registered with the U.S. Food and Drug Administration, and then went to look for those same trials in the academic literature. There were 37 studies which were assessed by the FDA as positive and, with a single exception, every one of those positive trials was written up, proudly, and published in full. But there were also 33 studies which had negative or iffy results and, of those, 22 were simply not published at all — they were buried — while 11 were written up and published in a way that portrayed them as having a positive outcome.

But I thought the markets were sifting the wheat from the chaff, rewarding the good companies and punishing the bad. But what do I know.