SAVING IS SIN, SPENDING IS VIRTUE

This was worth giving a thought:



Written by an Indian Economist



Japanese save a lot. They do not spend much. Also Japan exports far more than it imports. Has an annual trade surplus of over $100 billions, yet Japanese economy is considered weak, even collapsing. Americans spend, save little. Also US imports more than it exports. Has an annual trade deficit of over $400 billion. Yet, the American economy is considered strong and trusted to get stronger. But where from do Americans get money to spend? They borrow from Japan, China and even India. Virtually others save for the US to spend.


Global savings are mostly invested in US, in dollars. India itself keeps its foreign currency assets of over $50 billions in US securities. China has sunk over $160 billion in US securities. Japan's stakes in US securities is in trillions. Result: The US has taken over $5 trillion from the world. So, as the world saves for the US, Americans spend freely.


Today, to keep the US consumption going, that is for the US economy to work, other countries have to remit $180 billion every quarter, that is 2 billion a day, to the US! Otherwise the US economy would go for a six. So will the global economy. The result will be no different if US consumers begin consuming less.

A Chinese economist asked a neat question. Who has invested more, US in China, or China in US? The US has invested in China less than half of what China has invested in US. The same is the case with India. We have invested in US over $50 billion.


But the US has invested less than $20 billion in India. Why the world is after US? The secret lies in the American spending, that they hardly save. In fact they use their credit cards to spend their future income. That the US spends is what makes it attractive to export to the US. So US imports more than what it exports year after year. The result: The world is depend! ent on US consumption for its growth. By its deepening culture of consumption, the US has habituated the world to feed on US consumption. But as the US needs money to finance its consumption, the world provides the money. It's like a shopkeeper providing the money to a customer so that the customer keeps buying from the shop. The customer will not buy, the shop won't have business, unless the shopkeeper funds him.

The US is like the lucky customer. And the world is like the helpless shopkeeper financier. Who is America's biggest shopkeeper financier? Japan of course. Yet its Japan which is regarded as weak. Modern economists complain that Japanese do not spend, so they do not grow.
To force the Japanese to spend, the Japanese government exerted it self. Reduced the savings rates, even charged! the savers. Even then the Japanese did not spen! d (habits don't change, even with taxes, do they?). Their traditional postal savings alone is over$1.2 trillions, about three times the Indian GDP. Thus, savings, far from being the strength of Japan, has become its pain.


Hence, what is the lesson?



That is, a nation cannot grow unless the people spend, not save. Not just spend, but borrow and spend. Dr. Jagdish Bhagwati, the famous Indian-born economist in the US, told Manmohan Singh that Indians wastefully save. Ask them to spend, on imported cars and, seriously,
even on cosmetics! This will put India on a growth curve. "Saving is sin, and spending is virtue." Before you follow this neo economics, get some fools to save so that you can borrow from them and spend. This is what US has successfully done in last few decades.

Outsourcing to Brilliant Indians: The real face

We all talk "India and its brilliance" we say we get more jobs because we are smarter than the rest of the world. well I see a different reason to it. Read the article below: Source mentioned




ECONOMICTIMES.COM[ WEDNESDAY, JULY 07, 2004 09:29:18 PM ]
Outsource your job to get a new one! This is the new mantra doing the rounds in the US IT sector.

Programmers are outsourcing their software modules to cheap and efficient labour in India. This way they get the best of both worlds- more money and more time. They earn doubly - one from the outsourced job, other from the new job they undertake.

According to this concept the techie is able to give himself a promotion outsourcing the specific modules to one or more Indian techies . While he takes the charge as a overall project manager.

You can utilise the time in updating yourself to new technologies as well as learning a different domain thereby enhancing your market value considerably .

Says a programmer on Slashdot.org who outsourced his job: "About a year ago I hired a developer in India to do my job. I pay him $12,000 out of the $67,000 I get. He's happy to have the work. I'm happy that I have to work only 90 minutes a day just supervising the code. My employer thinks I'm telecommuting. Now I'm considering getting a second job and doing the same thing."

Smarter techies are working for three to four companies at the same time, outsourcing all the coding and just supervising them for few hours a day. This way they are able to earn four to five time more than what they used to.

This is called the principle of 'comparative advantage', whereby you concentrate on you core strengths outsourcing the non competitive areas.

The idea has given rise to firms named as micro multinationals. These firms hire a small number of sales and marketing people in the US. The software products are developed in Bangalore, Pune or Hyderabad.

The concept of micro multinationals is antithesis to the theory of 'Incubation'. Incubator firms are venture capital funded startups which divest some business functions to their investors.

Solidcore Systems, a security software developer with headquarters in Silicon Valley, is a micro-multinational. Solidcore has 20 employees in New Delhi and six subcontractors in Pune, India. The company also has 20 employees, including its CEO, CTO, and sales reps, in the US.

While micro multinationals purchase non-core services from outside concentrating on their core competetive advantage. An example may be the call centres themselves outsourcing the non essential services of security, food catering or maintenance to outside firms.

Says Rosen Sharma, president and chief executive of Solidcore: "We were a micro-multinational from day one. It didn't mean I hired fewer people in the US," he says. "It meant that I could hire more people in sales and marketing, because I didn't have to concentrate on building R&D in America."

Venture capitalists these days compulsarily demand that the companies they finance outsource what labor they can. Yogen Dalal, a partner at Mayfield, says more than half the companies he funds have offshore workers.

The wisdom of outsourcing applies to businesses great and small. When companies have some of their operations performed elsewhere, they reduce costs and allocate capital and labour instead to those activities that cannot, or should not, be subcontracted.

When businesses use capital and labor efficiently, they can better explore expanding markets. And faster growth creates a need for new workers. The result is almost always a net gain in employment.

Outsourcing is change. As ever, change will be unacceptable to a few; there will be "dislocations," to use the jargon of labor economists. Some people will be too old, too inflexible, or otherwise unable to find new work.

But most Americans can relax. Cheap overseas labor means more jobs in the US, not fewer. And working for a company that's both global and small might just be the best of both worlds.

Over the past 10 years, 325 million jobs were eliminated in the US, but 342 million jobs were created. According to the Information Technology Association of America, some 372,000 technologists were laid off in the recent recession. Some fraction of those positions moved to India.

But the ITAA also predicts that outsourcing will create 317,000 entirely new jobs in the US over the next four years as a result of cost savings. And outsourcing generated 90,000 jobs in 2003 alone.

PRAGMATIC THEORY OF TRUTH (Article)

The subjects like truth, god, right/wrong are purely PHILOSOPHICAL but there are a few theories which define these. Check out the work done in this field . With heavy dosage of PHILOSOPHY.

The three theories of truth (pragmatic, correspondence, and coherence) all deal with different methods of analyzing and evaluating ideas and beliefs to determine whether or not it is a true idea or belief. Consequently these theories have ideas that object and argue against the basic principles of the theories themselves.



THE ACTUAL ARTICLE STARTS HERE

The pragmatic theory of truth states that a belief is true if it works, if it is expedient, and if holding the belief leads to good consequences. It is also said that this theory provides practical value and success for beliefs. Truth or an idea is something we can use as actions for future knowledge. The pragmatic theory should lead to success when these truths and ideas are implemented in the world.

The pragmatic theory of truth explains that ideas are either true or false. Ideas that lead to frustration and confusion are false ideas. Ideas that are progressive, gives satisfaction, and leads you somewhere are true ideas. Pragmatists believe that, "Truth happens to an idea"(p.194), some other circumstances occur to make the truth within the idea more evident. Pragmatists also believe that just by having a belief, it is much more likely the belief will be true, especially if it leads to good consequences.

i.e. A person believes that they are the smartest

person ever. This would be a true belief for

that person because it makes them feel good

about themselves; they work hard because

they have high expectations of themselves;

and this belief could give them the confidence

and courage to accomplish goals they would

not have been able to otherwise.

The pragmatic theory of truth is used as a problem-solving function of beliefs. If a real problem leads a belief or statement to the successful solution of that particular problem, then the belief or statement is true. (Theories of Truth)

THE CORRESPONDENCE THEORY OF TRUTH

The correspondence theory of truth states that a belief is true if it matches up with the way that the world works. Bertrand Russell argued against the pragmatic theory of truth, emphasizing that truths and ideas need to be made true by facts and not on comfort and personal satisfaction.

The correspondence theory of truth argues that a "true" belief is one that has been deemed so by evidence and facts that correspond with the way that we see the world around us. (p.201) In a sense, a true idea is an agreement between ideas, facts, and other established beliefs. If a statement corresponds to the facts, truth then becomes a property of that statement. (Epistemology: Kant and Truth)

i.e. A person is walking and sees an apple core

on the ground. The person either thinks that

someone threw it on the ground because they

were too lazy to put it in the garbage or the

person left it there so the birds and squirrels

could eat it. This would be a true belief

because it makes sense with the way the

world is.

COHERENCE THEORY OF TRUTH

The coherence theory of truth states that a belief is true if it matches up with other beliefs or statements that we already have. The new belief requires a strong connection in order to cohere with the existing beliefs. There is absence of contradiction between these beliefs; the elements must come together and flow consistently. A belief or statement is true if it is supported mutually by a set of existing coherent beliefs. (Theories of Truth)

i.e. If the president of a bank notices that some

money is missing and is unable to be

accounted for. He does not know what

happened to the money, so the president

analyzes the information that he does know

and connects it to other information until he

figures out the truth of what happened to the

money.

Nature and reality are two elements that are said to be coherent. Given this, if we make our ideas and beliefs more and more coherent, we will get closer to understanding the truth of the world.

Along with the definitions of these different theories of truths, come arguments against them. Each theory has its own objections to why that particular theory does not work and should therefore be rejected.

The pragmatic theory of truth states that a belief or idea is true solely based on whether it works. But whom exactly does it have to work for? A belief or idea that might be useful and successful for one person, would believe it to be true; while that same idea or belief might be false for another person who it does not provide usefulness and success. If one group of people believes an idea to be true while another group believes it to be false, which should it be?

There is contradiction within this theory of truth. If a person tells a child that a monster will get them if they go into the street, does not make it true because that person is protecting the child from getting hurt. It is true that the belief leads to good consequences, however, that itself does not make it a true belief.

The correspondence theory of truth states that a belief is true if it corresponds with the way that the world is. A big objection to this theory is that correspondence cannot be used as criterion. (Epistemology: Kant and Theories of Truth) How does anyone really know whether something is really factual? We believe certain ideas to be true based on facts and evidence because we do not know anything apart from our knowledge. Which really is not justified since we do not know whether our perceptions and knowledge about an idea or belief are adequate.

The coherence theory of truth states that a belief is true if it is coherent with other existing beliefs. It also assumes that nature is coherent, but what if it was in fact not coherent with any element? Then there would be absolutely no way that we would be able to understand the truth of the world.

An objection to this theory is the ongoing "advance in knowledge". The world's knowledge is constantly advancing to new levels, and this new knowledge might not cohere with that of old knowledge. In some fields of study there is always going to be new knowledge that upsets the old knowledge. Just because this new knowledge does not cohere with the old knowledge does not mean that we should disregard it. The old knowledge might not fit together with the new because the old knowledge might not be as coherent as it once originally seemed.

Initial beliefs are not true based on their relation to other beliefs. When our initial beliefs are formed, our other beliefs are nonexistent. We do not have those other beliefs to compare to the initial beliefs.

All three of these theories of truth have their faults. Not one of these theories is entirely an absolute guide to deciding whether or not an idea is truth. It then becomes a matter of choosing the lesser of the evils. Which theory of truth causes the acceptance of more beliefs to be true?

I think that the correspondence theory of truth fits those criteria the best. Truth is based on facts and evidence rather than on personal satisfaction and comfort. It also is not required for the belief to cohere with a set of existing beliefs to be true. It makes more sense that a belief would be true if it corresponds with the way the world is.

If truth is defined as conformity with fact and agreement with reality, then it seems to be difficult to disregard the correspondence theory because the basis of it's principle are facts and our realistic view of the way the world works and how those facts fit into it.

A article on datawarehousing

dataWarehouse.com | Brought to you by DM Review

The Dreamer in me

Visit http://www.mandelia.blogspot.com