Gurumurthy's views on Social Security - A rebuttal

I have a lot of respect for Mr. S. Gurumuthy, a columnist, chartered accountant, with several other distinguished laurels in India. I recently came across some YouTube videos on the Global Financial Crisis Impact to India, in which he aired his strong views on the Social Security system in the US. He said it is good India doesn't have it. If India had social security, he contends families will be destroyed - the US had literally nationalized families, and since the government cannot bear all the burden, and instead privatized government functions such as building roads, airports etc.

I don't agree with his assessment. The underlying problem is how much liability can you impose on a young Indian man or woman? How much will their income permit relative to their expense? Today, in India, most families feel two incomes are needed for a decent living (sending kids to good school, buying a nice flat) - typical desires of an average family are not met by one income. Just look at the matrimonials, and you'll see that most grooms are seeking working brides. This means the young man is not able to (or willing to) even support his wife and children with just his income. Why would he also be able to support parents, which can get pretty expensive in terms of medical bills, not to mention the emotional baggage of everyone living under the same roof? What sense does it make to require him to do so, instead of coming up with an alternative?

The case of young women is still worse. A friend of mine followed up on a matrimonial educated working girl as a prospective bride, and the response from the girls parents: "We are not really looking for a groom now, since her income is helping us get by - her dad is retired, and we have some hospital expenses..." The matrimonial was just to keep her happy that some search was going on. Such is the plight of imposing such direct liability on young men and women.

Mr. Gurumurthy acknowledges that the US came up with the social security system because sons were not able to (or not willing to) take care of ageing parents. The point of flare-up had happened way back in the 1940s, when the US "nationalized" the process of taking care of aged parents. The concept in simple terms - current young workers pay 6% of their income as social security tax, and the employer matches with another 6% - all this money is pooled and used to pay out current retirees a monthly minimum pension (social security benefit), and their medical expenses (medicare benefit). So, the US government is only acting like a broker or escrow, and this by itself is not a big burden. This works well if current generation population is higher than the past generation, as there will be more workers to pay fewer retirees.

I am sure Mr. Gurumurthy understands that other government functions such as building roads and airports are privatized for many other reasons - in fact, India is also privatizing roads and airports, even without this social security burden. Social security takes the emotional sting out of the system. The fact that I will not be on the street in my retirement, come what may, makes me more entrepreneurial, confident and relaxed in relationships.

The same elder abuse flare-up has happened in India too, prompting the government to act. They have recently passed the "The Maintenance and Welfare of Parents Act", to keep tabs on sons who inherited property from parents, which in my view is really a reactive, superficial, patch work and piece meal approach, typical of what contemporary India comes up with, as opposed to a well thought out, comprehensive approach such as the Social security system in the US. Instead of solving the problem, the law is aimed at sending an earning, economically productive young man or woman to jail - which means other productive young men and women will pay for his or her stay in jail, and there is an expense in maintaining courts and judges for this purpose. What about those who do not have enough property to pass on? What about those who do not have sons or daughters to take care of them? If sons and daughters can address elder needs, why should some Indians have guaranteed pension and Provident Fund benefits? How do you take the emotional sting out of the system? Imposing an emotional baggage only causes unethical, unlawful (domestic violence) behavior.

Mr. Gurumurthy also talks about how the west believes in contract based approach to managing relationships, and how this has caused the collapse of family as a cultural, economic and socially functional unit, citing 51% families in the US are single-parent. I respectfully disagree that there is collapse - none of the single parent families are interested in the relationship based approach, to get back into broken families that they were originally part of. They are instead exploring ways to successfully be a single parent functional unit.

Bottomline, I think with ongoing growth in India, the lifestyles permitted by the current and future wages, requirements to be in fast paced environment that has little time for taking care of people around, it is time for India to embrace the west in the "nationalized" approach for elder care, and adopt contract based approach to manage relationships like the west. I think it will happen over time, whether Mr. Gurumurthy likes it or not.

Book Review - Creating a World Without Poverty

Creating a World Without Poverty - Muhammad Yunus: Many of us are aware of Muhammad Yunus' work in micro-finance bank in Bangladesh, that fetched him the Nobel prize. This book provides insights into his herculean efforts in making that Grameen Bank happen, the challenges he faced from financial businesses, goverments, world bodies, and how was able to overcome those and come out ahead. What was more interesting is his perspective on social businesses (that is, run as a business for the benefit of the society as a whole as opposed to money profits), and how they compare and contrast with profit-maximizing businesses, capitalism, non-profits or NGOs, social entrepreneurship and government. Great learning from a distinguished economist, sharing and spreading his knowledge.

Book Review - The Logic of Life

The Logic of Life - Tim Harford: A very well written book providing an economic perspective on peoples' rational behavior - that incentives are not just about money, but love, managing risk and other factors also contribute to what people may consider a logical choice. Compared to somewhat similar books like Freakonomics or The Economic Naturalist, it is somewhat more intense to read, but was worth my time. The chapter on divorce confirmed my suspicions that "No Fault" divorce reduces domestic violence, and only resulted in a instantaneous peak in divorce, while other factors are responsible for the increase in divorce rate. Another perspective I liked was his dig on Jeff Sach's "The End of Poverty" - Tim explains that Malaria and insulation of countries are not necessarily reasons for countries not growing; Malaria affects children the most vs. productive adults, and countries like US and Australia have been insulated, but has shown growth and prosperity.

Problem with Everything being Natural

When my wife was carrying twins, I had a little rendezvous with her gynecologist that gave me a new perspective on Nature. She was suggesting a planned cesarean was the way to go, since that is the best way to ensure the safety of mom and the two babies. I argued with her that we should try to make it as natural birth as possible, and not plan to use artificial methods like C-section when it is not needed. She explained that she was cool with my approach, except that I need to realize by leaving it to nature, some babies or moms will die during pregnancy. Especially with twins, the second baby undergoes a lot of stress and increased heartbeat before coming out, which can pose an increased risk of survival. If I am cool with taking that risk, then she was perfectly willing to follow the natural process. What she was suggesting was a process by which she could better guarantee the safety of both the babies and the mother. It made me rethink about leaving everything to natural way! These days I tend to think inventions and discoveries are driven by and are part of nature, that almost nothing can be called artificial.

Book Review - Doing Business in 21st century India

Doing Business in 21st century India - Gunjan Bagla: I was surprised to find this fairly new book in the library. I quickly grabbed it, and was definitely worth the few hours it took to go through it in entirety. Gunjan Bagla has done an awesome job covering a broad range of business, cultural, political, financial and legal issues that one needs to be aware of before venturing into Indian territory. The book fills some of the gap of lacking case studies about India in B-school. I shook my head in disbelief that Gunjan was able to document so many Indian gestures ("making an 8 with the nose" and "tilting sideways to carry on") and their meaning! As well, the Indian use of words like Dicky or Stepney for the car trunk, Scheme for Plan, and Intimate for Inform - there are dozens of them in the book that brings a smile, while educating the clueless. He offers new perspectives for certain typically Indian behaviors that we may not agree as acceptable behaviors - such as the sevice person multitasking and maximizing thruput with multiple customers (I think everyone would want her full attention and privacy), people not waiting for their turn in lines, or arriving 30 minutes late to appointments. It is difficult to write a typical or comprehensive book about India, and the author has accomplished this feat, and made it easy for us to read.

Half Knowledge is Dangerous

These days, it is easy to quickly search on google and educate oneself on almost any topic. Many of us use it to look up medical conditions and ask intelligent questions to our doctor. This is all good, but we must realize that half knowledge is dangerous, and the web information does not substitute expertise from years of learning and working. Here is my rather amusing personal experience.

After reading up on liver problems caused by acidity and all that, I went for my physical checkup.

Me: "Doctor, I have pain in my liver" (touching below my left chest with my hand)
Doctor: "Do you have pain on the left side or right side?"
Me: (Touching again below my left chest) "The pain is here. I think it is acidity."
Doctor: "The liver is on the other side."
Me: (Now looking stupid) "Oh! Could it be pain in my heart?"
Doctor: "No, I think it is just gas."

Obviously, I went a bit far on the web search before checking whether the liver is on the right or left. Next time, I just listened to what the doctor said.

Bogasora (Bakasura?) sentenced to life

Rwanda's former military colonel Bagosora was sentenced to life for the Rwandan genocide - news.
I was surprised to see the name aptly rhymes with Bakasura, a demon in the Mahabharata epic, who supposedly ate one villager each day and was eventually killed by Bhima, the prince. Perhaps, Bagosora is Bakasura's rebirth, but this time around there was no death penalty, so he got away with life sentence held responsible for the deaths of a whopping 500,000 Rwandans.

Japan experience

Some tid-bits from my Japan business and tourist experience below.

Getting around - Airport to Hotel: Tokyo or Osaka are the main cities that one might fly in, and in both cases, the airport is quite far from the city - takes about 1.5 hours. I have used two options, the limo bus and express train. There is a counter at the airport to get the tickets for limo bus. They may accept credit card, but it is a good idea to get some Yen cash at the airport currency exchange counter as cash is the norm in many places. One can quickly notice extra hands (double checking cashiers, queue usherers, elevator operators) doing little help that may not be absolutely needed, but that's Japan's way of employing everybody. .

Train Rides: Trains are a popular and efficient mode of transport in Japan, very clean and punctual. After a couple of trips, I could find my way to the train (much of the directions are in Japanese, though airport and railway stations have some English). From Osaka, I took Kansai express (called Haruka express from Kansai International Airport to Shin-Osaka)that goes to Shin-Osaka (New-Osaka). First, I asked tickets for Osaka, and they assumed the old town, and confused me with hopping two trains - I knew that wasn't needed, and corrected myself. There is also bullet train from Osaka to Tokyo called the Shin-kan-sen (New truck line). The ride goes through historic towns of Nagoya, Kyoto, Tennoji and gives an impressive rustic view of Japan. From Tokyo, it is Narita express, and that takes us to the Tokyo Central Station.

Taxi Rides: Once I reached the city railway stations, I took a cab to the hotel (I think I paid around 1000 yen or about USD 10) . I stayed at the Imperial Hotel in both Osaka and Tokyo, and it was important to say "Teikoku Hotel", since the cab drivers don't understand the english name. Cab drivers are honest and impeccably dressed, mostly in suit and gloves, though it can be difficult to communicate since most can only speak and understand Japanese. Some Japanese taxis have a mobile broadcast TV, so it is possible to watch local channels during the ride.

Imperial Hotel: True to its name, staying at the Imperial has always been a royal, safe and pleasant experience. The hotel has an impressive ambience, and 5-star service, and is located ideally. In Tokyo, it is across the Imperial palace and right next to Ginza (the equivalent of New York Times Square). In Osaka, it is right next to a river offering nice views from the room, and next to the Osaka Amenity or Business Park (OAP) that provides a nice ambience and places to shop and eat. I usually have a good breakfast (buffet) at the Imperial, so I wont have to worry about what I get for lunch while I am out hunting.

Business Etiquette: I am sure there are many books on doing business in Japan, but here are some snapshots that quickly come to my mind - just as a flavor:

• It is good to pick up some Japanese vocabulary that may help break the ice. At a minimum, Konichiwa (Hello), Ohio Gozaimus (Good Morning). Ari-gatho (Thank you). And, Ici, Ni, San is 1, 2, 3. (the last one is from "Big Bird in Japan"!). When I saw "Sanwa bank", it occurred to me that it is "Third Bank". I heard someone say "Neon", and that actually meant 24 (Ni On).
  
• When introducing yourself, it is important to hand over the business card with both hands. Likewise, receive the other person's business card with both hands. Make sure you take a good look at their business card, and not just put it in your pocket. You can say "Hajme Mashte", or just "Pleased to meet you", and speak your name and your title or responsibility slowly and clearly. Bow! Bow! Bow! The more you bend, the more you respect, but don't overdo it or make it too obvious. Even in stores or other places, it is good practice to use both hands for giving out or receiving credit cards or even cash.
• Once discussions start, you may notice there may be a dozen people in the room, but only one person speaks. Others will only chime in if this person makes a request. They may be silent and speak only in Japanese, but many of them understand English, so if we speak slowly and clearly, they will understand. Usually, there is an interpreter and things get lost in translation, so it is important to pay extra attention to make sure the right, unambiguous messages are conveyed.
• Generally, it is also easy to tell the hierarchy from the attire. The director or senior manager wearing a suit, followed by the manager wearing a tie, and the engineer with no tie or suit. It is better to dress in suit when soliciting business. When I take my engineers along, I remind them before their flight to bring their suit as well (or just tie and blazer - doesn't have to be a formal suit).
• Japanese tend to work longer hours, way into the evenings and night. Thus, it is OK for employees to sleep in meetings! They understand the guy or girl is just tired! This may come as surprise for some of us int he US, where sleeping at work can get you out the door for good.
• In Japan, people smoke quite a bit, and there is also a lot of booze (from Asahi beer to shochu or sake shots). I was also surprised to note it was an open society - a friend of mine said infidenlity runs as high as 70% in Japan. I have answered a lot of inquisitive questions on my age, marital status even on a first meeting, but my friend tells me that could just be curiosity with no further intent.
• Japanese people gesture with kind of prodding with the palm facing upward, which I have found unique and enjoyable.

Going around: Again, I can only provide a pinch of flavor here - it is possible to write a book on Japan tourism and culture. The Imperial hotel has bus tours with english speaking drivers/guides, to take you around Tokyo, Mt. Fuji, or in the case of Osaka, to the historic town of Kyoto. I have taken the Tokyo bus tour and my friends took a private car ride to Kyoto from Osaka, and it was a safe and fulfilling experience.

• In Tokyo, I have hanged out in Ginza area right behind the Imperial hotel. There are innumerable shops, places to eat, some of them interestingly built under the overhead freeways, railway tracks, providing employment to so many common people. My friend tells me Ginza is like Las Vegas on steroids! One thing to watch out, the restaurants vary dramatically in prices - I have spent less than $10 all the way to $80 on sushi per person. Some places are so good, that people wait 2 hours in line just to get in! Other than sushi, there are also good places for Okonomiyaki, Tapan Yaki and of course, Thai, Italian and Indian restaurants in the Ginza area. I can't reproduce the Japanese names of the restaurants, and addresses are somewhat complex in Japan as well - goes by block and building names, as opposed to streets and numbers.
• For shopping, BiCamera is a good store to visit in Tokyo, near Ginza - it has several floors of electronic and household goods, somewhat like Frys in the US.
• It is also easy to walk to the Imperial Palace sprawling lawns diagonally across the Imperial hotel. We can't go in, but can take good pictures of the palace from outside.
• The Tokyo bus tour takes us to the Tokyo TV tower, where we can get half way to the top, and see pretty much all of Tokyo - a concrete jungle, and a glimpse of Mount Fuji.
• It also takes us to Asakusa, which has a Buddhist temple, and adjoining shops where one can get nice little gifts and mementos. You can also get a similar or better experience in Kyoto.

Joke - US Bank

You'll understand this joke if you have been to a bank in the US.

What can you tell about the titles of the employees when you visit a bank? It's easy - anyone who's standing is a Teller, and anyone who is sitting is a Vice President.

Hindi as National Language

India's law panel does not want to adopt Hindi as official court language - news. Apparently, judges cannot learn the language at their age, which is one of the reasons they feel this wouldn't fly. Some years after India's independence from the British, it was decided that Hindi will replace English as the "Official language" with time frames like 15 years, though it has not taken off in decades.

When I was in grad school, I used to get into arguments with some Hindi speaking friends, who'd express surprise that someone from India doesn't speak it's "national language", and ask if I was really from India. Much of the argument would be defensive,with some absurd points that wouldn't go anywhere. Over time, I think I have become more persuasive.

First, why is such a "national language" is needed. Usually the answer is for "national integration". Then drawing a parallel - why not enforce a "national religion". If everyone is Hindu, then that will also contribute to national integration. If you can have national integration with no national religion, then it should be possible to have national integration with no national language. This is fairly convincing, and the proponents of national language will likely give up, except that it can be argued religion is personal, but language affects two or more people communicating. That begs the next question.

Which two (or more) people are going to communicate? Largely, it is going to be within a state, where most people speak the same language. Mostly, people talk to family, neighbors, school, work, stores, most of this is in the local lingo. This is true by definition, since India chose to create linguistic states. So, the vast majority of the communications don't need a national language, but only certain situations like people traveling to another state or dealing with national or inter-state level communications will have need for common language. That begs the next question.

Why not just let these people who travel learn the other language? People learn based on the incentive caused by the need to make money or such interest, which is easier, than being forced as a rule. Indians who go to US take the trouble to pick up English, and students write TOEFL exam. The Marwaris or Sindhis who come to Tamilnadu to open clothing retail learn Tamil - fact is they have a Tamil accent and dialect of their own in Chennai. Likewise, if anyone goes to neighboring China,which might be nearer than a far-away state like Kerala, they will feel compelled to pick up Mandarin or Cantonese. National and state boundaries are just conceptual lines. It is unlikely a the local milkman needs to travel to another state often, so he wouldn't need to pick up any other language. It is going to be people who do business or seeking work elsewhere, and their families. They can learn the local lingo, since they are the smaller population relative to the larger static population that remains local. But, that begs the next question.

What if we forced all the milkmen to learn hindi, from when they were kids? Wouldn't that be a convenience, since no one needs to learn the local lingo? Easily said than done. At the time the national or official language policy was discussed, more than 70%of population was illiterate. meaning most hindi speaking folks themselves can't read/write hindi. Given this, how can we expect the similar 70% illiterate population in another non-hindi speaking state to pick up hindi? They cannot even read or write in their own mother tongue. Adding to this, the grammar is different. the script is different. Hindi is relatively easy to learn to speak, but it is not reasonable to assume so for hundreds of millions of people.

If learned judges can't easily pick up the language, it is difficult to expect others to learn. Hopefully hindi speaking folks who think all of India can and should speak in hindi, realize some or all of this above. Promoting Hindi as a national language is about solving the wrong problem. Better approach would be to encourage a multi-lingual approach, where regional languages are also used when necessary, provide learning incentives such as free hindi classes to quietly promote, as opposed to enforcing rules or adopting unrealistic policies to promote hindi to fill a seeming gap.

Mumbai terror - Leadership failure

Mumbai was in the limelight last few weeks on the audacious terror attacks at multiple sites, that left close to 200 people dead. Ironically, Mumbai was also in the news in 1993, for terror attacks at multiple sites, and around 250 people died. At that time, I remember my roommate who was from Mumbai feeling sad that these are happening in cosmopolitan Mumbai. Fifteen years later, nothing has visibly changed, and people have been sitting ducks all along.

First, I am not sure why some call this 9-11 of India. The 9-11 death toll was around 3000, which is more than a 10x impact. I am not convinced Taj hotel is equivalent to the World Trade Center, nor are the damages in dollars or rupees comparable. I also saw some call it 26-11, using the Indian way of writing the date - but I think this got so much attention due to Americans and Jewish casualties, and the slow response really hurt the Indian pride . But, anything helps to prod sitting ducks to call for action.

We see a lot of public outrage blaming politicians. The home minister Shivraj Patil resigned, followed by the Deputy Chief Minister and the Chief Minister of Maharashtra state. However, in a democracy, the people are to blame for their choice. One can argue Mr.Patil was actually defeated in elections, but Sonia Gandhi and the Prime Minister Manmohan Singh found him a Upper-house seat which was a way to make him the home minister. Thus, both of them are accountable and should feel remorse for putting the wrong person in charge of something of national importance. Why was he a wrong choice? Mr. Patil is said to be an honest politician, patriot, and has been elected before by the Indian people several times. Unfortunately, none of these qualify to bypass the process of appointing from currently elected leaders, unless he was a distinguished national security expert, which wasn't the case. Drawing a parallel, Manmohan Singh himself was appointed Finance Minister in 1990s without being elected, using this upper-house method, but then he was a distinguished economics expert worth bypassing the process during a moment of crisis. This was purely a political appointment that proved costly, for no fault of the people (other than the fact they trusted Ms. Gandhi and Mr. Singh to put right people on the job). Though task of keeping the nation secure was complex, and we really can't blame one person for failure, the last straw was having to send commandos from Delhi to Mumbai to fight the terrorists. With prior attacks all over, and prior intelligence sites where there are lot of foreigners will be attacked (which would trigger 5-star hotels in any sensible mind), there isn't an excuse for not being prepared with standby commandos in major cities.

People can be directly blamed for electing the Chief Minister, Vilas Rao Deshmukh, and the Deputy Chief Minister R.R. Patil. Mr. Patil apparently commented small incidents like this happens in a big city like Mumbai, and that the terrorists had planned to kill nearly 5000 people, which would have made it major incident. He needs to be told terrorists do not give thanksgiving deep discounts. Instead of focusing on spending his time on improving security, he has been spending his time and energy on improving so-called morals in a cosmopolitan city, by banning bar girls from dancing, depriving them of the little livelihood, and wasting police time, money and energy that could have been used to put in a decent response system. The CM of Maharashtra has held up well with the situation, and apparently said he came from a humble background, and was proud to have served the state. While someone from a humble background accomplishing this far is nice to hear, it hasn't translated into strong leadership. We hope people make a choice next time based on those who can deliver and perform, rather than humble, honest, moral and so forth.

The railway minister Laloo Prasad Yadav also should take some blame. The attack was Chhatrapathi Shivaji Terminus - Maharashtrians pride themselves with the legendary hero that fought Muslim rule bravely. People were essentially sitting ducks in a station named after such a hero. On top of this, Mr. Yadav is credited for making the railways profitable - which means he could have made the investment to put in a decent security system in place.

The top brass in the police force should also feel remorse. Some of them may be working hard. given the resources and talent at their disposal, and given the politics they have to deal with, and some of their peers have actually laid down their lives. But these folks are paid the best by the government, and given the authority to make things happen, and they must think through all possibilities and influence those in charge to do the right thing. They are very reactive with the investigation and prosecution after events like this, but haven't done well on the prevention in the first place. Perhaps, prevention is not as rewarding as later investigation and prosecution. I noticed one police officer that had resigned in disgust over corruption back in year 2000, mentioned the bullet-proof vests worn by the senior officers killed may have been low-quality and not fit for this job. That's a shame.

Hotels such as the Taj or Oberoi charge anywhere from $200-$600 a night, and there shouldn't have been a dearth for money to put in a decent security. Executives like Ratan Tata should have had more foresight and paranoia to invest in the safety of their guests, as well as their employees, rather than trusting a government that is not known to have the best resources or system. Hopefully they will do more introspection. Now. it's not just the hotels, other establishments such as hospitals, marriage halls, malls where lot of people assemble should be wary as well.

My heart goes out to those impacted, but things will change only over time, and some events such as these only contribute to waking up to the problem, and feeling the need for change.