23 July 2016

'Star Trek Beyond': Review

Review of 'Star Trek Beyond':

In 2009, Paramount Pictures rebooted the Star Trek movie series. Director J J Abrams and scriptwriters Roberto Orci and Alex Kurtzman (Transformers series) made Star Trek (2009) and Star Trek Into Darkness (2013). For the third movie, Paramount made two disastrous changes. First, Abrams went away to direct Star Wars: Force Awakens. So they replaced him with Justin Lin (Fast & Furious series!). Second, scriptwriters Orci and Kurtzman were replaced with actor Simon Pegg (!!!) and rookie Doug Jung.

Hollywood action movies have a formula: beginning action scene + middle plot sequence + ending action scene. Star Trek Beyond follows this formula, but screws up 2 out of the 3 parts:
a) Beginning – Justin Lin's dal-roti is cars racing on the road, not spaceships fighting in space. So for the opening spacebattle sequence, he copies Michael Bay – yes, the jerky camerawork that gives you a headache. The over-complicated battle scene is badly shot and edited.
b) Middle – There is not much of a plot here. At best, it is a plot for one TV episode. Simon Pegg plays Scotty here, and Benji in the Mission Impossible series. His one-point agenda in writing this script was to give himself a Tom Cruise scene (hanging from a cliff). The entire middle is poorly written and directed.
c) Ending – Here Justin Lin dumps Michael Bay and tries his own thing. The result is a climax that is at least watchable. (Any Beastie Boys fans around? Kirk and co destroy an entire alien invasion fleet just by playing their song 'Sabotage'!)

The cast (Chris Pine, Zachary Quinto, etc) do the best they can with this average script. And why hire a good actor like Idris Elba (the villain) just to wear a plastic mask on his face? Heck, I could have done that job (for a lot less money). This year is the 50th anniversary of Star Trek. Hollywood has reduced the classic sci-fi saga to a mediocre product from its assembly line. Creator Gene Roddenberry must be rolling in his grave. Star Trek Beyond joins this year's big-budget duds: Star Wars: Force Awakens, Superman Vs Batman, Avengers: Civil War and X-Men: Apocalypse. Mainstream Hollywood is as dead as mainstream Bollywood. (STB has a Rotten Tomatoes score of 85%. This puts one more question mark on the honesty of American movie critics. The cynics seem to be the only honest guys around)

PS: I felt so guilty about dragging my parents to this B-grade show that in the interval I booked tickets for a Kannada movie for the next day – to atone for my sin :-p

13 July 2016

Universalism and Particularism

Everything in the world can be divided into two categories:
1. Universals – ideas, concepts, principles
2. Particulars – things, events, humans

# Giving importance to universals is universalism. Giving importance to particulars is particularism.

# 99% of humans are particularists. 1% of humans are universalists.

# Universals are fundamental. Particulars are expressions of universals.

# Universals are permanent. Particulars are temporary.

10 July 2016

2008 American Financial Crisis (AFC)

In 2005, Raghuram Rajan (IMF's chief economist) warned that America was headed for a major financial crisis. Most American economists ridiculed him. 3 years later, his words came true. The 2008 American Financial Crisis (AFC) was the worst since 1929. And it plunged all the industrialised countries (America, Europe, Japan) into the Great Recession - the worst since the Great Depression of the 1930s.

In 2010, Rajan wrote a book called 'Fault Lines: How hidden fractures still threaten the world economy' to explain the causes of AFC:

1. In 1980, something strange happened in America: the salaries of the majority of Americans stopped increasing - and instead started decreasing. Why? From 1980 onwards, technology started advancing very rapidly. So demand for high-skilled workers (with a college degree) went on increasing and demand for low-skilled workers (with a high-school degree) went on decreasing. So salaries for people with college degrees went on increasing, whereas salaries for people with high-school degrees went on decreasing. Majority of Americans do not have a college degree. Hence their salaries have gone on decreasing.

2. Since 1945, America has been having a recession almost every decade. But every time it recovered quickly: the lost jobs came back within a year. In 1991, another recession struck. But this time, the recovery was much slower: it took 2 years for the lost jobs to come back. As a result, President George Bush (senior) lost the election that year.

3. All industrialised countries have an unemployment support system. That is, the government pays money to unemployed people. America has the weakest unemployment support system among the industrialised countries. Both the money paid and the duration for which it is paid is the lowest. This made problem #2 worse.

4. In 1992, Bill Clinton became President. He had to deal with both the immediate problem #2 and also the longer-term problem #1. The solution for problem #1 (and also problem #2) is to increase the education level of the people. But this requires changing the education system - which is very difficult. So he chose an easier solution: to give low-interest loans to poor people, especially for buying houses. America's central bank - under its chief, Alan Greenspan - supported this solution by keeping the interest rate low.

5. In 2000, the dot-com bubble burst and America had another recession. This time the recovery was even slower than in 1991: it took 3 years for the lost jobs to come back. That year, George W Bush (junior) became President. Faced with a similar (but worse) problem as Clinton, he also opted for the same solution. He not only continued Clinton's scheme, but expanded it. And again, the central bank under Greenspan supported it.

6. Poor American families (mostly black and Latino/Hispanic) with no job, salary or property applied to banks for home loans - and got them. The banks packaged these loans together and converted them into 'financial assets'. They kept some of these 'assets' themselves and sold the rest to other financial companies (mutual funds, pension funds, etc). Rating agencies - whose job is to certify the quality of financial assets - gave these 'assets' a good rating.

7. With the government pushing more and more low-interest loans and poor families buying more and more houses, house prices went on increasing. The bubble went on growing. But at some point, the borrowers had to start repaying their loans - which they obviously could not do. The bubble finally burst in 2008. Borrowers started defaulting on their loans. And the whole process went into reverse gear - at a much faster speed. House prices crashed and the 'financial assets' became worthless overnight - bankrupting the banks and financial companies that owned them. The American government had to step in with a huge rescue package to save the largest banks.

'Fault Lines' is a very good book that dissects a complex topic and explains it in a simple language to people who are not economists.

03 July 2016

'Free State of Jones' (Slavery in America)

In 1600, white Europeans started going to America. Almost immediately, they also started 'importing' Africans and using them as slaves. Northern America is cold and dry, with rocky soil. Southern America is warm and wet, with fertile soil. So the south is good for large-scale agriculture. There, whites started large-scale plantations (of tobacco and cotton) using large numbers of slaves. By 1850, America had about 50 lakh slaves and slaves made up one-third of the south's population.

In 1861, the anti-slavery Abraham Lincoln became America's President. Immediately, the 11 southern states left America and declared themselves a separate country: the Confederate States of America (CSA). The north declared war, and the American Civil War began.

The south's rich planters - who owned slaves - took their states out of America and started the Civil War. But none of them (or their sons) fought in the war. All the soldiers in the south's army were ordinary farmers - who did not own slaves. One of them was a man called Newton Knight from Mississippi state's Jones district. Disgusted with this situation, he left the war and went back to his district. There he hid in a swamp/marsh with some blacks.

More soldiers started leaving the south's army. They went and joined Newton Knight. This band went on increasing in size. They started protecting the district's farmers from the looting raids of the south's army. Next they started fighting the south's army directly. Eventually they defeated it - and overthrew the south's control over their district. They declared their district to be a free country: the Free State of Jones. They held the south's army at bay till 1865 - when the north defeated the south and the Civil War ended.

In 2001, historian Victoria Bynum wrote a book about this episode. And now, director David Ross (Seabiscuit, Hunger Games) has made it into a movie - starring Matthew McConaughey as Newton Knight.

David Ross has made Free State of Jones with a slow and precise style. This makes FSJ an excellent history movie, but not necessarily a mass entertainer. This is a pity. Because FSJ is an exciting and inspiring story - about slavery in America, about an amazing episode in America's history and the life of a true American hero. A movie like this should be seen by everybody. If only David Ross had spiced up FSJ with more drama and action (like Steven Spielberg), it would have achieved this objective. This was especially important this year - when the Donald Trump campaign has shown how strong racism is in America. So Free State of Jones is - unfortunately - a golden opportunity missed.

When will Hollywood make a movie on the anti-slavery crusader John Brown - one of America's greatest heroes?

02 July 2016

GDP Components: India and Other Countries

GDP components of major countries:

Country
C
G
I
X
-M
India
60%
12%
31%
19%
-22%
America
69%
18%
17%
13%
-16%
China
38%
14%
43%
23%
-18%
Japan
60%
20%
21%
19%
-19%
Germany
54%
19%
20%
46%
-39%

C = Consumption
G = Government
I = Investment
X = Exports
M = Imports

GDP = C + G + I + X - M

28 June 2016

Financial System and the Economy: America Vs Europe

What is a financial system? It is a system that supplies money for economic activities - like buying a tractor, building a factory or starting a company. What is the need for a financial system? Only rich people have money. So a financial system is needed to provide money to ordinary people for economic activities.

The financial system is to the economy what the circulatory system is to the human body. The body needs blood to function - and the circulatory system supplies it. Similarly, the economy needs money to operate - and the financial system supplies it. Banks are the best-known part of the financial system. The stock exchange is another. There are many more.

In 2003, Raghuram Rajan and Luigi Zingales (professors of finance at the Chicago School of Business) wrote a book called "Saving Capitalism From Capitalists". In it, they argued that the best financial system is a free/unrestricted financial system - like America's. 5 years later, the 2008 American Financial Crisis happened - the worst financial crisis since 1929 (which had caused the Great Depression of the 1930s). Most economists blamed America's unrestricted financial system for this crisis.

In 2014, Raghuram Rajan wrote a 10-page afterword titled 'Lessons from the Great Recession'. In it, he talks about the recession that the financial crisis caused - rather than the financial crisis itself. Further, he blames the recession on long-term economic and political trends - rather than the financial system. He is slightly casual both about the financial crisis itself and the unrestricted American financial system that caused it.

The sub-title of the book is 'Unleashing the power of financial markets to create wealth and spread opportunity'. The authors argue that a free/unrestricted financial system (like America's) is the best financial system because it supplies the maximum money to ordinary people and small companies. On the other hand, they argue that an unfree/restricted financial system (like the European countries) supplies money only to rich people and big companies.

If this argument is correct, then America must perform better than the European countries. Is this so? America's per capita income is higher than all the European countries, yes. But the authors argue that America's free/unrestricted financial system is the best for supplying money to poor people and lifting them out of poverty. So we should look at the income of the poorest 10% of the people. And in this, America is one of the worst among the industrialised countries.

The authors may argue that the poorest 10% in Europe have a higher income due to government handouts. Then let us look at upward mobility - the degree to which the poor can come out of poverty. In this also, America is beaten by:
a) North Europe (Norway, Sweden, Finland, Denmark)
b) West Europe (Germany, France, Holland, Belgium)
c) British colonies (Canada, Australia, New Zealand)
Only South Europe (Spain, Portugal, Italy, Greece) is worse than America.

The authors may argue that this is not due to the financial system, but the larger economic system. To this, we can make two points. The first point is trivial and technical. Yes, the financial system is not an independent system. It is only the sub-system of a larger system - the economic system. But in that case, it is the performance of the system that really matters, and not the performance of the sub-system. What is the use if the sub-system works well, but the system does not?

The second point is more fundamental, about philosophy. Every country has a philosophy, and it builds all its systems (political, economic, financial, etc) on the foundation of that philosophy. No country builds one system on one philosophy, and another system on another philosophy. America is no different. And it has built both its economic system and its financial system on the same philosophy - Darwinism (ie, natural selection and survival of the fittest; or 'every man for himself, devil take the hindmost'). So it doesn't make sense to praise the financial system but criticise the economic system when both are built on the same philosophy. (Another view: You cannot expect the financial-economic system to treat ideas, products, services and industries in one way - and people in another way)

But these criticisms aside, "Saving Capitalism From Capitalists" is a very informative and interesting book about the financial system and also about economic history.

18 June 2016

America: Stupidity + Ignorance + Racism = Donald Trump

Donald Trump is a real-estate tycoon with zero political experience. His campaign has been a series of stupid, ignorant and racist statements. Now he is the Presidential candidate of one of America's two political parties. He is one step away from becoming the leader of the world's most powerful country. How did this happen?

The core ingredients of Donald Trump's campaign are:
1. Stupidity + Ignorance
2. White Racism
3. Anti-Immigration
4. Anti-Globalisation
5. Christian Fundamentalism

1. Stupidity + Ignorance

In any industrialised country, this is an automatic disqualification for politics - especially for the highest office of the land. Not in America. Why? Because Americans are the perhaps the most ignorant people among the industrialised countries. How? How can the world's most technologically and economically advanced country be the most ignorant (among its industrialised peers)?

America is the world's most techno-economically advanced country due to its scientists, engineers and managers. These are the most intelligent and knowledgeable people in the world. But they are just 1% of the country. The remaining 99% of the people (factory workers, shopkeepers, clerks, etc) are stupid and ignorant. This is due to history and geography. First, America has no history to speak of - it was born only in 1600. Second, it is cut off from the world by two oceans. Third, its population is small compared to its area. So half of Americans live in 'small towns' (actually villages) which are far from one another.

So in America, stupidity and ignorance is not a disqualification for politics - even for the highest office in the land. It can even be a qualification due to the "He is one of us" factor. Example: George W Bush.

2. White Racism

Today's America was born in 1600 - when white Europeans started going there, exterminating the natives and stealing their land. This wasn't enough. They also started 'importing' Africans and using them as slaves. This slavery went on for almost 250 years. In 1865 they stopped slavery - but didn't accept blacks as citizens. They kept blacks as non-citizens for another 100 years. Only in 1964 did blacks become citizens. So racism is deeply embedded in America's DNA.

In 1968, the Republican Party became the party of racist whites. Since then it has carried on a campaign of racist propaganda. Over half a century, this has kept racism alive in America. Enter Donald Trump with his explicit racism. Previously, Republican Party leaders (like Nixon and Reagan) were implicit in their racism. Explicit racism is a disqualification, you may think. It is not. Republican Party voters embraced Trump hysterically.

When Trump launched his campaign, the violent white racist group Ku Klux Klan (infamous for killing blacks) declared its support for him. America was horrified. Even Republican Party leaders were embarrassed by this open display of racism. They called upon Trump to denounce Ku Klux Klan and distance himself from it. Trump did nothing of the sort.

Trump's campaign slogan is "Make America great again". It means "Make America white again".

3. Anti-Immigration

This is Trump's - well - trump card. After dominating America's politics for almost half a century, the Republican Party lost two Presidential elections in a row in 2008 and 2012. The reason was simple. Racist whites voted for the Republican Party. Non-racist whites, blacks and Latinos/Hispanics voted for the Democratic Party. Republican Party leaders did a lot of head-scratching. They came up with the solution: To win, all they had to do was somehow get the Latino vote. And how to do this? Simple: 'immigration reform' - ie, give citizenship to all the illegal Mexican immigrants.

There was just one problem. For half a century, the Republican Party had taught its voters to hate all non-whites - which is not just blacks but also Latinos. Now these voters exploded with rage. Enter Donald Trump with his solidly anti-immigration campaign. He had launched his campaign by calling Mexican immigrants as 'rapists' and 'drug-dealers'. Again, Republican Party voters embraced him hysterically.

America has 1 crore illegal Mexican immigrants. They do low-paying jobs that whites are not willing to do. Without them, many sectors of the American economy will collapse. Trump says he will deport all of them. He says he will build a wall along America's 3,000 km border with Mexico. This will cost $25 billion, but he says he will make Mexico pay for it. How? Only he knows.

4. Anti-Globalisation

Starting with the Industrial Revolution, transportation and communication technology advanced - and helped to connect all the different parts of the world together. This process accelerated after World War 2. People, goods, services, money and information started flowing freely all across the world. The world was 'becoming one'. This process is called globalisation.

Before globalisation, products were made in the place where they were sold. The 20th century was a honeymoon period for America. Being the largest Western country, it had the largest market in the world. American industry boomed and Americans prospered. With just a high school education, lakhs of lower class whites got a job as a worker in the local factory - and lived a middle class life (house + car). This was the American Dream.

After globalisation, products could be made anywhere in the world. Industry's aim is to maximise profits. The best way to maximise profits is to minimise cost. And a major cost is workers' wages. So the best way to maximise profits is to produce in a place where the wages are lowest - ie, poor countries. So multi-national companies started moving their factories from rich countries to poor countries. Specifically, America's factories started moving to China.

As a consequence, America's factory workers - ie, lower class whites - started losing their jobs. Their American Dream became a nightmare. With just a high school education, they could get only low-skilled and low-paying jobs. Today they are angry - very, very angry. Enter Donald Trump saying he will reverse all this and 'bring the jobs back from China'. Lower class whites embraced him hysterically.

What Trump says is impossible. You don't need a PhD in economics to know this. A minimum knowledge of today's world is enough. Yet a large number of Americans believe Trump and support him. Why? See point #1.

5. Christian Fundamentalism

Donald Trump has appealed to Christian fundamentalists also, even though this is not his strong point. He said his favourite book is the Bible. But when asked for his favourite verse, he didn't have an answer. In spite of this, Christian fundamentalists have also embraced him enthusiastically.