Randian Hero...

For some strange reason, I follow American politics....
hang on.. 
That's not true - I know the exact reason - It's a great show! and superbly packaged (which brings up the reason why I don't follow Indian politics closely - I don't find it entertaining enough) 

My sources - the :

• The NPR - It's All Politics Podcast!
• Fareed Zakaria's GPS &
• Harvard Historian Niall Ferguson's & Nobel Laureate Economist Paul Krugman's  ongoing slug fest 

ensure that the drama unfolds intriguingly...

So this year, we are made to understand is a tight race between a somewhat aristocratic, not so conservative, uber rich, mormon republican and the incumbent, first African American President, great speech maker democrat who's feeling the heat of a lackadaisical economic performance..

As if that set up wasn't partisan enough - Mitt Romney added a certain Paul Ryan to the mix as the vice presidential candidate. I first heard of Paul Ryan when Professor Ferguson talked him and up and Krugman talked him down on Fareed's show. 
But here's what takes the biscuit - Ryan is apparently a Randian, seriously - A Howard Roark wannabe or something like that..

Krugman says here :

"For those who somehow missed it when growing up, “Atlas Shrugged” is a fantasy in which the world’s productive people — the “job creators,” if you like — withdraw their services from an ungrateful society. The novel’s centerpiece is a 64-page speech by John Galt, the angry elite’s ringleader; even Friedrich Hayek admitted that he never made it through that part. Yet the book is a perennial favorite among adolescent boys. Most boys eventually outgrow it. Some, however, remain devotees for life.

And Mr. Ryan is one of those devotees."

Reading the piece got me reflecting on my own Ayn Rand association. I read the Fountain Head when I was in my early to mid 20's - not quite adolescent - yet impressionable nevertheless and was floored. Let's face it - when someone makes such a compelling case for something like 'the virtue of selfishness' - it's bound to appeal. It still does when I live within my head, but when I step onto anything that is remotely associated with the physical world - I find it and how do I put this succinctly - stupid!

My take on Rand is that she took a fledgling thought that was justified by the circumstances she was raised and extrapolated it into the "be all and end all" virtue across all contexts. The thoughts seeded in Communist Russia took wing in her writings and appealed to an American populace that in all likelihood was looking for an alternative philosophy. However despite all the book sales and the cult status of her work - it remains little more than a popular fad. 

Former Fed. chairman Alan Greenspan was another fan and consequently a true believer of the free market. And as we know the worst financial crisis happened under his watch...!

There's something inherently dangerous about casting policy around a philosophy because one gets implicitly tied to the context that the philosophy was conceived under. So if America was anything like the Proletariat worshiping Russia of the early 90's - then yeah maybe Randian'ism would have worked out, but it isn't. There is a good reason that Howard Roark is a fictional character and has no precedence in history.. 

It's all nice and dandy for a philosophy to stay with the realms of a best seller, but it should never 'consume' a policy maker - The operative word being  consume, I'm sure that there may be several aspects of the Randian philosophy that a policy maker could use as a guidance for certain circumstances, but little else....That's my take!

Getting back to the elections :
Therefore the contest is between a liberal who's been labelled as a socialist on one corner and a mermom who's convictions no one knows about and a sidekick Rand fan boy on the other! (with all due respects to Joe Biden - but there's no scoop on the man!). 

Interesting...I will continue to watch closely...

Disclosure 1 : My insight into Rand is only from her books - The Fountainhead, a bit of Atlas Shrugged and We the Living. In fact the only thing that is likely to remain common between the great economist Fredrick Hayek and myself is that the both of us haven't got through Atlas Shrugged
Disclosure 2 : I am not a US resident and have no political affiliations whatsoever in my country of residence or visit. 

Open Letter to Paul Krugman

Paul Krugman - Sir,
Firstly you have my vote as the 'current' winner of the saving vs. spending debate. But for a software geek interested in economics - this is beginning to appear like a deliberate ploy orchestrated by armchair intellectuals to sell books, newspapers and online print. Not that there is anything wrong with that, but with my 10000 feet vantage point and the backing of my wide eyed enthusiasm for macro economics - I honestly believe that this debate can be emphirically put to rest. 
-Let me outline how - 
The Input Parameters we have are :

• Debt to GDP ratio
• Current Deficit
• Inflation average at current levels
• Current Unemployment Levels
• Rate at which jobs are being added
• Cost of Borrowing (Bond Yields)
• Growth Rate
• Interest Rates
• Sectors which have lost the most jobs
• No. of unemployed folks with redundant skills
• Private sector spending
• Sectors which have deficit skills
• Cost of Unemployment Support
• Cost of Infrastructure improvements

and I'm sure a few more..
To this we add the proposal for a stimulus :

• An objective amount that needs to be injected - Let's say 2 trillion dollars

And the output we need to compute is - 

• Effect on inflation - What exact levels would it jump to and would that be acceptable.
• Commodity price increase owing to the above inflation
• No. of jobs created
• Effect on cost of borrowing
• Rate of increase of deficit for 5 years
• Deficit outlook for 5 years in light of the above stimulus
• Growth rate in this period

and I'm sure a few more..
In effect, I'm asking for a sheet that says if you stimulate - this is the quantified effect. Shouldn't that be possible ?Instead what one gets to hear is hyperbole, dumb analogies or hindsight induced proof points (from both sides of the debate) - all of which make an interesting read, but are hardly of any 'real' use to seal a debate of this significance!


PS 1 - From what I hear, there is no clear guidance on how to use a stimulus package to effectively...well, stimulate the economy ? If things had played out differently, that would probably have been the topic for my Phd and my Nobel, but since that's not gonna happen, it would be good to see someone work on this critical guidance.
PS 2 - As naive as this may sound, I'd like to think that I'll get a repsonse :)