Media and the Electoral Process outwits Rigging Machinery
Electronic Media makes roaring business Monitoring Politicians
Images were not transmitted to the people merely by the parties themselves, their activities and by their struggles. The electronic and the print media played an important role in independent people forming their opinions based on facts rather than party campaigns. The electronic media sensed tremendous potential in TV channel business in West Bengal, especially given the CPM bullying of weaker elements. Covering the government and CPM with investigative and close monitoring would attract considerable viewer-ship to attract considerable advertisement revenue: Bengali channels mushroomed. Any event that would involve scandals, political violence, corruption, administrative inefficiency and police atrocities would have to be covered to attract viewers. About a score of Bengali channels would soon come up. As these would not always be sympathetic to the state government, the CPM reportedly bought shareholding in some channels to control content and coverage. In some cases, the cable operators being allowed to do business only with the patronage and protection of local CPM leaders, certain channels would be blocked in certain localities as they aired reports that adversely affected the image of the Govt. or the ruling party. But all this would not help: nothing could any longer be done in West Bengal that would remain outside public knowledge. TV coverage could make ministers and leaders exposed: one could try to become popular but also had to run the risk of revealing weaknesses, excesses, rash and rude behavior, inefficiency, inconsistency and other inadequacies that could be subject of public evaluation. One cannot just bully people secretly and go unnoticed. Such a media environment reduces the advantage a ruling party usually enjoyed over the opposition forces in the previous decades. Independent and politically unbiased opinions and reporting started weakening the force of Government propaganda and secrecy.
Election Commission makes Rigging Machinery Obsolete
Image and media exposure alone cannot determine actual voting in elections. Election management machinery of political parties had to keep pace with the administrative and technological advancements effected by the Election Commission. The party machinery to rig polls was being slowly made obsolete and useless by the Election Commission. The electoral rolls have been cleaned up considerably in the last few years. There are no more regular exodus illegal Bangladeshi immigrants that the political parties managed to convert into Indian citizens through inclusion of names in the electoral rolls. The fictitious entries in the electoral rolls have been considerably weeded out, though many non-CPM voters may still be outside the electoral list in traditional CPM stronghold areas. The phasing of elections on different dates helped the Commission control the deployment of officers, security forces and observers more effectively. The selection of officers to manage the work at the polling booths and their deployment and better coordination with the security forces, together with the alert electronic media helped reduced the incidence of booth capturing, false voting, and gaging of the EV machines. It had become difficult to rig elections. All this reduced the advantage of any ruling party over others. There was very little that the skilled machinery to rig elections could do now.
Given the improvements that the Election Commissions had made, the penetration and alertness of a highly competitive electronic media industry and the image the parties cultivated made the election outcomes more dependent on the preferences of the 5%-7% non-committed, independent voters. They were clearly not in favor of a BJP without integrated leadership, or in favor of the corrupt power hungry regional parties, or in favor of the obstructing and arrogant CPM and it left partners. They were sympathetic to the Congress that implemented pro-poor policies but were opposed by the BJP and the left in implementing economic reforms. In West Bengal they were not in favor of an arrogant, oppressive and opposition-demolishing CPM and in favor of the pro-poor role of Trinamul leader Mamata Banerjee’s as the only protector of the weak and the oppressed. And, these voters determined the outcome of the Elections in which INC and Trinamul showed a performance that beat the most optimistic forecasts of the opinion polls, political analysts and politicians.
So, what next? What would be the strategy of the Congress, the CPM, the BJP, the Regional Parties including the Trinamul Congress in future? We await later posts.
May 24, 2009
Trinamul's Image
Mamata’s Tantrums A Saviour of the Oppressed
In contrast to the valiant heroic image that the CPM sought to cultivate the Trinumul Congress led by Mamata Bannerjee cultivated an image of the striggling protector of the oppressed. All who suffered from the atrocities and displeasure of the CPM leadership found a sympathetic treatment from Trinamul. Whereever there was any incident of atrocities or violence against even an individual or group, even if they are not supporters of Trinamul, the Trinamil leaders rushed for help and protection. The pro-poor image, the protector image of the CPM was slowly but steadily shifting to Trinamul Congress and its leader Mamata. She along with only a few of her aides worked incessantly in agitating mood to rally around every person adversely affected by the State and CPM bullying and atrocities. Yes, Trinamul Congress and CPM supporters fought violent battles in different pockets. But the non-committed voters did not view this as Trinamul’s hooliganism against the CPM or the State as CPM had tried to make out. Rather, these incidents were seen as Government supported bullying of CPM over others, especially as the Chief Minister cam out as the distinction between “We” meaning the Govt and the CPM and “They” meaning all others in the State. Hardly surprising, even some smaller leftist parties had to come close to the Trinamul to have some unity against CPM onslaughts. The INC realized this later but very accurately when the left withdraw support from their UPA government: INC national leadership had the political maturity to foster an alliance with Mamata’s Trinamul. They well knew that if the BJP stands a threat, CPM and the left would again come to support to INC after the elections, but here was a chance to weaken the CPM strength in the Loksabha by supporting Mamata emerging strongly with an image of a protector of the people oppressed by the CPM. It released information that would show that the CPM government did much less to improve the conditions of the Muslim minority in West Bengal in comparison with other states. Mamata did create a problem for industrialization by supporting the agitation of a few hundred farmers who were reluctant to give up their lands to the Government of West Bengal for transfer to the Tata for the Nano car factory. But Mamata gained very positive image from this struggle. This was seen all over India as a struggle to protect the poor farmers. All of India recognizes the contribution Mamata has done through this struggle to stop Governments’ forced acquisition of farming land in any part of India anymore. Humanist from other states extended their support to Mamta’s agitation to protectr the poor and the oppressed in Nandigram and Singur and elsewhere. And, Mamata with great maturity maintained that she was pro-industrialisation but not anti-farmer and anti-agriculture. She offered a compromise that would still leave land for the nano factory. But the CPM could not work on the compromise to keep the Tata;s Nano factory in the State. While Mamata’s past image of an whimsical and immatured partner for any alliance still a disadvantage, there was no doubt of her honest struggle against oppression by the State and the CPM.
But images do not get projected on its own - it needs dissemination technology. See next post.
In contrast to the valiant heroic image that the CPM sought to cultivate the Trinumul Congress led by Mamata Bannerjee cultivated an image of the striggling protector of the oppressed. All who suffered from the atrocities and displeasure of the CPM leadership found a sympathetic treatment from Trinamul. Whereever there was any incident of atrocities or violence against even an individual or group, even if they are not supporters of Trinamul, the Trinamil leaders rushed for help and protection. The pro-poor image, the protector image of the CPM was slowly but steadily shifting to Trinamul Congress and its leader Mamata. She along with only a few of her aides worked incessantly in agitating mood to rally around every person adversely affected by the State and CPM bullying and atrocities. Yes, Trinamul Congress and CPM supporters fought violent battles in different pockets. But the non-committed voters did not view this as Trinamul’s hooliganism against the CPM or the State as CPM had tried to make out. Rather, these incidents were seen as Government supported bullying of CPM over others, especially as the Chief Minister cam out as the distinction between “We” meaning the Govt and the CPM and “They” meaning all others in the State. Hardly surprising, even some smaller leftist parties had to come close to the Trinamul to have some unity against CPM onslaughts. The INC realized this later but very accurately when the left withdraw support from their UPA government: INC national leadership had the political maturity to foster an alliance with Mamata’s Trinamul. They well knew that if the BJP stands a threat, CPM and the left would again come to support to INC after the elections, but here was a chance to weaken the CPM strength in the Loksabha by supporting Mamata emerging strongly with an image of a protector of the people oppressed by the CPM. It released information that would show that the CPM government did much less to improve the conditions of the Muslim minority in West Bengal in comparison with other states. Mamata did create a problem for industrialization by supporting the agitation of a few hundred farmers who were reluctant to give up their lands to the Government of West Bengal for transfer to the Tata for the Nano car factory. But Mamata gained very positive image from this struggle. This was seen all over India as a struggle to protect the poor farmers. All of India recognizes the contribution Mamata has done through this struggle to stop Governments’ forced acquisition of farming land in any part of India anymore. Humanist from other states extended their support to Mamta’s agitation to protectr the poor and the oppressed in Nandigram and Singur and elsewhere. And, Mamata with great maturity maintained that she was pro-industrialisation but not anti-farmer and anti-agriculture. She offered a compromise that would still leave land for the nano factory. But the CPM could not work on the compromise to keep the Tata;s Nano factory in the State. While Mamata’s past image of an whimsical and immatured partner for any alliance still a disadvantage, there was no doubt of her honest struggle against oppression by the State and the CPM.
But images do not get projected on its own - it needs dissemination technology. See next post.
CPM, the Fallen Hero
When the Hero Assumes a Villain Image
Now consider the performance and image of the leftists during the past five years. Among the communists and their sympathizers, the performance was very good. They have successfully been able to rein in the INC-led UPA Government from doing anything the leftists did not like. They continued to rule in the states of West Bengal, Kerala and Tripura without virtually any effective opposition and crushing opposition wherever required with state force. The communist supporters enjoyed the State support in securing jobs, land, business orders/ contracts, in sports bodies, in cultural initiatives, in education – practically in every field. The image was one of a gallant, unbeatable hero. The CPM General Secretary with control over 60 Members of the 442-strong Loksabha seemed to the boss of the Prime Minister of India and poised to bring in the historic first Communist-led Third Front Government in India. This was a great image one can dream off before the 2009 Indian Elections. But the voters outside the three CPM-ruled states unfortunately did not share this image. They did not relish the image of CPM as the Crown Price of India. Rather, they feared that a third front of greedy, power-hungry regional party faction leaders shepherded by the CPM implied a great disaster to India. They would not vote for the parties joining hands with the CPM.
Within the CPM ruled states, Tripura with just two MP seats did not matter much to Government formation at the Center. What was CPM’s image in Kerala? It was one of two state leaders fighting for control in Kerala and with utter disregards to the all-India Keralite General Secretary of the CPM. Such an image was not so conducive to attract voters who cast their votes independently of ideology and winning elections and India’s most literate state voters did not have a large industrial trade union based cultivation of communist ideas. Over the years the number of families becoming rich with non-resident income inflows had increased dramatically and with increase in wealth many would start harboring political ambitions without any commitment to communist ideology and without having to go through the seniority system in CPM. They were searching for alternative opportunities to rise in the business of politics in India. INC was set to exploit these conditions in the state.
West Bengal with 42 Loksabha seats is the real stronghold of the CPM. But its pro-people, pro-West Bengal image was getting tarnished. It was fast developing an image of intolerant, arrogant ruler more proud of its three-decade rule in West Bengal rather than a party that is capable of re-establishing West Bengal’s premier status in the Indian economy. The people at large was increasingly realizing that the CPM Employees Union dominated State Government employees would never make the Chief Minister’s dream of efficient government services to the citizen’s a reality. The bloodbath in certain pockets of Midnapore districts and elsewhere between CPM and other parties might have been liked by the committed CPM supporters but painted CPM government as an oppressive ruler among voters who are independent and l;iked CPM for long. The Chief Ministers distinction of “Good” and “Evil” synanomous with “We (CPM and its supporters)” and “They” created an impression that the Government was not willing to protect the citizens unless they completely align themselves with the CPM and compete with others to seek the favor of the CPM leaders at different levels. The CPM bullying even upset the other left front partners. This gave rise to an impression that the leftist alliance is really a divided one and CPM is the only party that a citizen ha no option but commit to. The Chief Minister seemed more interested in protecting and rewarding the obliging, loyal bureaucrats even if they had committed mistakes and meted out injustice to the common people as in the case of tragic death of Rizanur, a poor young professionally qualified Muslim falling in love and getting legally married to a Hindu girl of a rich Marwari business family and where the State police leadership intervened to break the marriage at the instance of the rich Marwari father of the girl. The independent voters clearly did not enjoy the Chief Minister interfering with the lections of the State Cricket Association nor did they rejoice the distinction introduced by the Chief Minister and others between ‘ CPM intelligentsia of intellectuals, celebrities in art, culture and education” and “anti-CPM intelligentsia of such personalities” for state patronage.
The selection of Delhi-based Brinda Karat and Yehchuri to represent West Bengal in the Rajya Sabha of the Parliament might have been a necessity of the CPM but was not liked by independent voters with pro-Bengal sentiment. The Speaker of the last Parliament became a Bengali icon rather then enhancing his image as a CPM party leader: his removal from the CPM party was seen as a great insult to West Bengal and a meek submission to an arrogant Keralite CPM General Secretary by the State CPM leaders.
The growing image of the CPM state leadership as an arrogant, oppressive party out to destroy all opposition within West Bengal and yet so dependent on mere English-competent Delhi-based intellectuals without any connection with grassroots of politics would fail to enthuse the independent voters, especially the younger generations.
What happened to Mamata's Trinamul Congress? See the next post/
Now consider the performance and image of the leftists during the past five years. Among the communists and their sympathizers, the performance was very good. They have successfully been able to rein in the INC-led UPA Government from doing anything the leftists did not like. They continued to rule in the states of West Bengal, Kerala and Tripura without virtually any effective opposition and crushing opposition wherever required with state force. The communist supporters enjoyed the State support in securing jobs, land, business orders/ contracts, in sports bodies, in cultural initiatives, in education – practically in every field. The image was one of a gallant, unbeatable hero. The CPM General Secretary with control over 60 Members of the 442-strong Loksabha seemed to the boss of the Prime Minister of India and poised to bring in the historic first Communist-led Third Front Government in India. This was a great image one can dream off before the 2009 Indian Elections. But the voters outside the three CPM-ruled states unfortunately did not share this image. They did not relish the image of CPM as the Crown Price of India. Rather, they feared that a third front of greedy, power-hungry regional party faction leaders shepherded by the CPM implied a great disaster to India. They would not vote for the parties joining hands with the CPM.
Within the CPM ruled states, Tripura with just two MP seats did not matter much to Government formation at the Center. What was CPM’s image in Kerala? It was one of two state leaders fighting for control in Kerala and with utter disregards to the all-India Keralite General Secretary of the CPM. Such an image was not so conducive to attract voters who cast their votes independently of ideology and winning elections and India’s most literate state voters did not have a large industrial trade union based cultivation of communist ideas. Over the years the number of families becoming rich with non-resident income inflows had increased dramatically and with increase in wealth many would start harboring political ambitions without any commitment to communist ideology and without having to go through the seniority system in CPM. They were searching for alternative opportunities to rise in the business of politics in India. INC was set to exploit these conditions in the state.
West Bengal with 42 Loksabha seats is the real stronghold of the CPM. But its pro-people, pro-West Bengal image was getting tarnished. It was fast developing an image of intolerant, arrogant ruler more proud of its three-decade rule in West Bengal rather than a party that is capable of re-establishing West Bengal’s premier status in the Indian economy. The people at large was increasingly realizing that the CPM Employees Union dominated State Government employees would never make the Chief Minister’s dream of efficient government services to the citizen’s a reality. The bloodbath in certain pockets of Midnapore districts and elsewhere between CPM and other parties might have been liked by the committed CPM supporters but painted CPM government as an oppressive ruler among voters who are independent and l;iked CPM for long. The Chief Ministers distinction of “Good” and “Evil” synanomous with “We (CPM and its supporters)” and “They” created an impression that the Government was not willing to protect the citizens unless they completely align themselves with the CPM and compete with others to seek the favor of the CPM leaders at different levels. The CPM bullying even upset the other left front partners. This gave rise to an impression that the leftist alliance is really a divided one and CPM is the only party that a citizen ha no option but commit to. The Chief Minister seemed more interested in protecting and rewarding the obliging, loyal bureaucrats even if they had committed mistakes and meted out injustice to the common people as in the case of tragic death of Rizanur, a poor young professionally qualified Muslim falling in love and getting legally married to a Hindu girl of a rich Marwari business family and where the State police leadership intervened to break the marriage at the instance of the rich Marwari father of the girl. The independent voters clearly did not enjoy the Chief Minister interfering with the lections of the State Cricket Association nor did they rejoice the distinction introduced by the Chief Minister and others between ‘ CPM intelligentsia of intellectuals, celebrities in art, culture and education” and “anti-CPM intelligentsia of such personalities” for state patronage.
The selection of Delhi-based Brinda Karat and Yehchuri to represent West Bengal in the Rajya Sabha of the Parliament might have been a necessity of the CPM but was not liked by independent voters with pro-Bengal sentiment. The Speaker of the last Parliament became a Bengali icon rather then enhancing his image as a CPM party leader: his removal from the CPM party was seen as a great insult to West Bengal and a meek submission to an arrogant Keralite CPM General Secretary by the State CPM leaders.
The growing image of the CPM state leadership as an arrogant, oppressive party out to destroy all opposition within West Bengal and yet so dependent on mere English-competent Delhi-based intellectuals without any connection with grassroots of politics would fail to enthuse the independent voters, especially the younger generations.
What happened to Mamata's Trinamul Congress? See the next post/
Opposition Bolsters Congress Image
Lack of Contructive Opposition Built Congress Image
Most politicians were all very busy in dreaming and scheming except the INC, the TMC in West Bengal, the BJD in Orissa and some others. There was considerable infighting going on about leadership and prominence in the BJP and the CPM in Kerala. The SP and BSP in Uttar Pradesh were preparing to fight among each other and against the BJP, ignoring that the Congress could still mobilize votes in UP a state whose citizens have suffered from the competitive corruption and fights between the SP and the BSP and their belligerent attitude to extract from the government at the Center. The BJP had a built up an image of a party that cares little for the people except doing high drama in the Parliament and supporting some Hindu’s past glory revivalists. The BJP did nothing constructive in the Parliament during the past five years. They seemed to be enjoying the plight of the leftist-oppression of the INC-led federal government and merely waiting for the fall of the Government so that they can get their turn. They not only did not seem to be a party with a cohesive leadership, they did not care to make the extra effort to keep their NDA-Alliance together. Such a passive, indifferent and disintegrated attitude did not help develop an attractive and vibrant image of BJP outside the state of Gujarat. Such an image was unlikely to enthuse voters to get attracted to them at the time of the elections.
On the other hand, the INC was concentrating on building up its organization in UP and other states, while at the same time pursuing alliances in regions where they cannot quickly strengthen the organization. Sonia and her son Rahul gave priority to strengthening the Congress organisation at the lowest levels, especially in Uttar Pradesh where the regional parties captured the Lok sabha seats,and Kerala where the Communists ruled and formed alliances with regional parties like DMK in Tamil Nadu and Trinamul Congress in West Bengal to weaken the strength of other regional parties with strong bases in these States.There was a very concerted endeavor to get higher number of seats in the Parliament so as to reduce its prevailing weakness of being black-mailed or brow-beaten by a handful of regional parties including the left that do not have much influence on the nation-wide electorate. It was at the same time consolidating the image of its pro-poor, secular policies by pursuing such policies that its leftist allies would never object. Whatever the goodwill benefits of the pro-poor policies they pursued with the support of or at the insistence of the leftist allies – all accrued to the INC for unlike their allies only the INC had a nationwide presence. On the other hand, the INC also fostered an image that being dependent on such always reform opposing allies like the leftists they were unable to deliver more benefits to the people at large, poor or the rich or the middle-class. This clearly projected an image of a part with good intentions and delivering results despite all odds from its own allies and constrained by unreasonable and corrupt regional elements. This is an image that would draw support to INC both from beneficiaries of pro-poor policies all over India (employment guarantee scheme, loan-waiver scheme and schemes directed at minorities and backward castes and classes) and from those adversely affected by the stalling of the economic reforms by the leftist allies. The blackmailing of the INC-led UPA government by the leftists on the issue of the nuclear deal with USA may have raised the leftist’s status of their heroism against the US among the anti-US voters in the intelligentsias largely concentrated in West Bengal and certain urban pockets, the large mass of the beneficiaries of economic reforms in business, skilled labor force in emerging sectors and professional all over India became more sympathetic to INC. During the months of CPM-led obstructions to the Union Govt. initiatives in the area of nuclear deal and reforms in banking and insurance, whenever I happened to meet business executives outside West Bengal in official meetings, they used to point out as if Bengalis like me from West Bengal are hurting national interest of India’s economic progress: my only answer was that all this was happening only because a Delhi-bred Keralite was in-charge of the communist battalion of the Bengalis. My friends outside West Bengal were reflecting the sympathy that the INC was drawing from voters outside the 6% or so communist-block voters in India. Clearly, the majority would not tolerate such miniscule minority obstructing what the non-communist majority thought as national interest.
About CPM and the leftists see later.
Most politicians were all very busy in dreaming and scheming except the INC, the TMC in West Bengal, the BJD in Orissa and some others. There was considerable infighting going on about leadership and prominence in the BJP and the CPM in Kerala. The SP and BSP in Uttar Pradesh were preparing to fight among each other and against the BJP, ignoring that the Congress could still mobilize votes in UP a state whose citizens have suffered from the competitive corruption and fights between the SP and the BSP and their belligerent attitude to extract from the government at the Center. The BJP had a built up an image of a party that cares little for the people except doing high drama in the Parliament and supporting some Hindu’s past glory revivalists. The BJP did nothing constructive in the Parliament during the past five years. They seemed to be enjoying the plight of the leftist-oppression of the INC-led federal government and merely waiting for the fall of the Government so that they can get their turn. They not only did not seem to be a party with a cohesive leadership, they did not care to make the extra effort to keep their NDA-Alliance together. Such a passive, indifferent and disintegrated attitude did not help develop an attractive and vibrant image of BJP outside the state of Gujarat. Such an image was unlikely to enthuse voters to get attracted to them at the time of the elections.
On the other hand, the INC was concentrating on building up its organization in UP and other states, while at the same time pursuing alliances in regions where they cannot quickly strengthen the organization. Sonia and her son Rahul gave priority to strengthening the Congress organisation at the lowest levels, especially in Uttar Pradesh where the regional parties captured the Lok sabha seats,and Kerala where the Communists ruled and formed alliances with regional parties like DMK in Tamil Nadu and Trinamul Congress in West Bengal to weaken the strength of other regional parties with strong bases in these States.There was a very concerted endeavor to get higher number of seats in the Parliament so as to reduce its prevailing weakness of being black-mailed or brow-beaten by a handful of regional parties including the left that do not have much influence on the nation-wide electorate. It was at the same time consolidating the image of its pro-poor, secular policies by pursuing such policies that its leftist allies would never object. Whatever the goodwill benefits of the pro-poor policies they pursued with the support of or at the insistence of the leftist allies – all accrued to the INC for unlike their allies only the INC had a nationwide presence. On the other hand, the INC also fostered an image that being dependent on such always reform opposing allies like the leftists they were unable to deliver more benefits to the people at large, poor or the rich or the middle-class. This clearly projected an image of a part with good intentions and delivering results despite all odds from its own allies and constrained by unreasonable and corrupt regional elements. This is an image that would draw support to INC both from beneficiaries of pro-poor policies all over India (employment guarantee scheme, loan-waiver scheme and schemes directed at minorities and backward castes and classes) and from those adversely affected by the stalling of the economic reforms by the leftist allies. The blackmailing of the INC-led UPA government by the leftists on the issue of the nuclear deal with USA may have raised the leftist’s status of their heroism against the US among the anti-US voters in the intelligentsias largely concentrated in West Bengal and certain urban pockets, the large mass of the beneficiaries of economic reforms in business, skilled labor force in emerging sectors and professional all over India became more sympathetic to INC. During the months of CPM-led obstructions to the Union Govt. initiatives in the area of nuclear deal and reforms in banking and insurance, whenever I happened to meet business executives outside West Bengal in official meetings, they used to point out as if Bengalis like me from West Bengal are hurting national interest of India’s economic progress: my only answer was that all this was happening only because a Delhi-bred Keralite was in-charge of the communist battalion of the Bengalis. My friends outside West Bengal were reflecting the sympathy that the INC was drawing from voters outside the 6% or so communist-block voters in India. Clearly, the majority would not tolerate such miniscule minority obstructing what the non-communist majority thought as national interest.
About CPM and the leftists see later.
Indian Elections 2009: Surprised Politicians
Independent Minority Voters Shift to Outwit Forecasters
The recent federal parliamentary (Loksabha, lower house of people’s representatives) elections prove the importance of independent voters. At the all-India level, no political party or analyst or exit polls or opinion survey could predict that the Indian National Congress (INC) would win more than 200 seats on it own, that the INC would need much support from other fronts or the left to rule, or the regional parties would lose their bargaining strength in the formation of the Govt. It is a new phenomenon that practically none of the regional parties could sweep the majority of the seats in their respective regions / provinces/ states. After more than two decades, voters in different regions/ provinces/ states have started showing varying preferences within their region insofar as the parliamentary elections. They may vote for a party at the federal elections that is different from the party they voted for in the State-level elections held earlier. This is happening because of the voters who shift their preferences according to their own assessment and will to exert their independent decision. As a result, the very few regional party is able to get a large chunk of the parliamentary seats in their provinces. This reduces the bargaining power of such parties in coalition formation unless two national parties get almost equal but far less than the number of seats required to form Govt. with very little or no support from alliances.
The second largest national party, BJP has seen a decline in its share of seats. The CPM has lost seats heavily in two of the three states in which it had traditionally been very strong. The SP and the BSP could not make any mark while the INC pulled off large number of seats in the State of Uttar Pradesh. The regional parties led byLalu Prasad and Ram Bikas Paswan lost out in Bihar. Sivsena, another regional party lost out in Maharashtra. The only regional party that made a remarkable come back was the TMC in West Bengal. In Tamil Nadu and Adhra Pradesh no single regional party swept the parliamentary seats in their states in their favor, weakening the bargaining power in the Central Government formation. In Orissa, the ruling regional party did well to get parliamentary seats even after breking out of their previous alliance with the BJP.
Why has all this happened this time that the shifting voters contributed to this kind of electoral outcomes that are very different from the past and all predictions became largely out of line with the actul election results? It may be interesting to explore this issue in the light of the developments during the last few years.
In West Bengal, the percentage of votes in favor of the dominant party ruling the State for over three decades without a break fell in 2009 elections by a few percentage points from the 2004 elections, correspondingly increasing the percentage of votes polled by TMC and INC who formed an alliance. But the result in terms of seats won changed dramatically. TMC increased its seats from 1 to 19. TMC- INC alliance got 25 out of the 42 seats while the CPM-led left alliance got 15 seats. The forecasts predicted 24-28 seats for the Left alliance after taking into account the brighter prospects of TMC and INC because of their nick of the time pre-poll alliance and the certain adverse events that put the ruling CPM-led Government in bad light in the media. What explains this surprise or unimaginable outcome in West Bengal. This has been explained by the leftists as the national wave in favor of the INC for stability of national government. But that is hardly any explanation as the national wave in favor of the INC itself was a surprise needing explanation especially as the CPM and other leftist parties were so sure of the possibility of forming a viable non-BJP, non-Congress third front that just two days before the election results were declared the CPM General Secretary Mr. Karat alleged that the US Ambassador to India was meeting various party leaders other than the leftists to lure them into supporting BJP or INC in government formation and ensure that the third front was not able to from a government. As an feeler to the INC the leftists even announced the INC the possibility of leftists’ support in the event that other regional parties rally around the BJP to scuttle the third front government initiative.
The recent federal parliamentary (Loksabha, lower house of people’s representatives) elections prove the importance of independent voters. At the all-India level, no political party or analyst or exit polls or opinion survey could predict that the Indian National Congress (INC) would win more than 200 seats on it own, that the INC would need much support from other fronts or the left to rule, or the regional parties would lose their bargaining strength in the formation of the Govt. It is a new phenomenon that practically none of the regional parties could sweep the majority of the seats in their respective regions / provinces/ states. After more than two decades, voters in different regions/ provinces/ states have started showing varying preferences within their region insofar as the parliamentary elections. They may vote for a party at the federal elections that is different from the party they voted for in the State-level elections held earlier. This is happening because of the voters who shift their preferences according to their own assessment and will to exert their independent decision. As a result, the very few regional party is able to get a large chunk of the parliamentary seats in their provinces. This reduces the bargaining power of such parties in coalition formation unless two national parties get almost equal but far less than the number of seats required to form Govt. with very little or no support from alliances.
The second largest national party, BJP has seen a decline in its share of seats. The CPM has lost seats heavily in two of the three states in which it had traditionally been very strong. The SP and the BSP could not make any mark while the INC pulled off large number of seats in the State of Uttar Pradesh. The regional parties led byLalu Prasad and Ram Bikas Paswan lost out in Bihar. Sivsena, another regional party lost out in Maharashtra. The only regional party that made a remarkable come back was the TMC in West Bengal. In Tamil Nadu and Adhra Pradesh no single regional party swept the parliamentary seats in their states in their favor, weakening the bargaining power in the Central Government formation. In Orissa, the ruling regional party did well to get parliamentary seats even after breking out of their previous alliance with the BJP.
Why has all this happened this time that the shifting voters contributed to this kind of electoral outcomes that are very different from the past and all predictions became largely out of line with the actul election results? It may be interesting to explore this issue in the light of the developments during the last few years.
In West Bengal, the percentage of votes in favor of the dominant party ruling the State for over three decades without a break fell in 2009 elections by a few percentage points from the 2004 elections, correspondingly increasing the percentage of votes polled by TMC and INC who formed an alliance. But the result in terms of seats won changed dramatically. TMC increased its seats from 1 to 19. TMC- INC alliance got 25 out of the 42 seats while the CPM-led left alliance got 15 seats. The forecasts predicted 24-28 seats for the Left alliance after taking into account the brighter prospects of TMC and INC because of their nick of the time pre-poll alliance and the certain adverse events that put the ruling CPM-led Government in bad light in the media. What explains this surprise or unimaginable outcome in West Bengal. This has been explained by the leftists as the national wave in favor of the INC for stability of national government. But that is hardly any explanation as the national wave in favor of the INC itself was a surprise needing explanation especially as the CPM and other leftist parties were so sure of the possibility of forming a viable non-BJP, non-Congress third front that just two days before the election results were declared the CPM General Secretary Mr. Karat alleged that the US Ambassador to India was meeting various party leaders other than the leftists to lure them into supporting BJP or INC in government formation and ensure that the third front was not able to from a government. As an feeler to the INC the leftists even announced the INC the possibility of leftists’ support in the event that other regional parties rally around the BJP to scuttle the third front government initiative.
Funny Democratic Number Games: Indian Case
Indian Elections 2009
In multi-party democracy, elections often produce funny arithmetic. In this number game sometimes, the powerless minority’s votes may assume great value. Here minority voters implies those who are prepared to shift their allegiance to particular parties for various reasons: generally, most voters get accustomed to casting their votes in favor of one party believing that the party each one of them votes for is better than or less evil than the other parties. If there were three parties (A, B and C), often one would find 5%-7% difference in the individual shares of votes of at least two of the parties, say A and B, claiming together 75% - 90% of the votes cast is only about 5% to 7% only. It is like A + B = 85 and A – B = 5 %, and, therefore, A = 45, B = 40 and C= 15. More strikingly, in most cases A will have more than 50% of the seats in the Parliament and rule the country or in the case of direct election of the Chief Ruler A becomes the President of the country having being discarded by the majority voters. In case of four or more parties, coalitions get formed so that two opposing coalitions have vote shares of 45% and 40% with the one with 45% rules the country
The other funny game is that the 5%-7% voters who are prone to shifting their allegiance raises the value of their votes as they can make A weaker and B stronger and B becomes the ruler. These voters shift not because they are not committed: they are independent-minded people who will not permanently commit their political thoughts and expressions in favor of a particular party for any reason whatsoever – whether ideological or practical or personal benefits. In extreme cases like political or social waves / turmoil, a larger percentage of voters may shift their preferences. But in general it is the 5%-7% voters who are more prone to shift their preferences for supporting a particular political party whom they start liking for reasons of the parties recent activities or voting against a particular party for reasons of disappointment with the recent activities of that party. But most such voters who shift their preference generally keep it extremely secret that they are shifting their preference and exit polls or opinion polls normally would not be able to track them in their samples. Yet, these voters who contribute to significant weakening of the predictive power or accuracy of exit poll and opinion poll based forecast of election outcomes. That is why after the elections, often political parties call the results as surprises or unimaginable.
In multi-party democracy, elections often produce funny arithmetic. In this number game sometimes, the powerless minority’s votes may assume great value. Here minority voters implies those who are prepared to shift their allegiance to particular parties for various reasons: generally, most voters get accustomed to casting their votes in favor of one party believing that the party each one of them votes for is better than or less evil than the other parties. If there were three parties (A, B and C), often one would find 5%-7% difference in the individual shares of votes of at least two of the parties, say A and B, claiming together 75% - 90% of the votes cast is only about 5% to 7% only. It is like A + B = 85 and A – B = 5 %, and, therefore, A = 45, B = 40 and C= 15. More strikingly, in most cases A will have more than 50% of the seats in the Parliament and rule the country or in the case of direct election of the Chief Ruler A becomes the President of the country having being discarded by the majority voters. In case of four or more parties, coalitions get formed so that two opposing coalitions have vote shares of 45% and 40% with the one with 45% rules the country
The other funny game is that the 5%-7% voters who are prone to shifting their allegiance raises the value of their votes as they can make A weaker and B stronger and B becomes the ruler. These voters shift not because they are not committed: they are independent-minded people who will not permanently commit their political thoughts and expressions in favor of a particular party for any reason whatsoever – whether ideological or practical or personal benefits. In extreme cases like political or social waves / turmoil, a larger percentage of voters may shift their preferences. But in general it is the 5%-7% voters who are more prone to shift their preferences for supporting a particular political party whom they start liking for reasons of the parties recent activities or voting against a particular party for reasons of disappointment with the recent activities of that party. But most such voters who shift their preference generally keep it extremely secret that they are shifting their preference and exit polls or opinion polls normally would not be able to track them in their samples. Yet, these voters who contribute to significant weakening of the predictive power or accuracy of exit poll and opinion poll based forecast of election outcomes. That is why after the elections, often political parties call the results as surprises or unimaginable.
May 12, 2009
Democratic Corporate Governance
Q: Why Corporate Governance is important?
A: Because Governance of countries are not corporatised.
Q: What do you mean?
A: Goverment is not organised as a corporation with shareholding distributed among the citizens equally.
Q: How can structure Govts. like publicly listed corporations?
A: Why, is there any problem. You can name the firm as National Democratic Corporation (NDC) with specified Vision, Mission, Chater of business activities, strategies, objectives, Plans and Performance Disclosures. The shares will be listed in the market. If the share price falls, it would mean the citizens are viewing the performance of the management of the Govt. as poor.
Q: So, the NDC's shares will be listed and publicly traded! But then the NDC's shares will be corned by the rich.
A: There will be two classes of shares. Class A shares will not be traded as each citizen is issued a share free of cost as soon as one is born and extinguished as soon as one dies. Class B shares are to be purchased by citizens if they wish to with money. Govt. can issue fresh shares at any time it requires money by issuing Class B shares at prices that will be accepted in the market. Class B shares will be traded in the market. The NDC can riase money by issuing bonds, debentures, certificate of deposits, etc. But that will be subject to a prudential leverage (debt-equity) ratio.
Q: What about voting rights?
A: Class A shares held by adults will enjoy political voting right only. Class B shares will have no such voting rights. But will be entitled to get dividend at the highest rate of dividend offered by any private company in the country or inflation rate plus 5%, whichever is higher. NDC can never be liquidated. If it defaults in payment to class B shareholders or to lenders/ creditors, the ministers and the entire set of lgislatures will be penalised as per the provisions of criminal law applicable to fraud or murder. The ministers and legislatures can go to court for justice but will autoimatically lose their positions ad fresh elections will be organized. Each candiate must hold a specified minimum number of class A shares to be eligible to become an election contestant. The elected legislatures and the ministers would have to deposit specified minimum class B shares to an independent custodian company till the time they hold office. During this period the class B shares deposited to the custodian cannot be withdrwan or traded. At the end of their term the legislatures can take back the shares.
Q: It is becoming increasingly complicated now.
A: But only complicated systems can ensure Corporate Governance. The legislators pass so many laws and appoint so many regulators to improve Corporate Governance. Now, they will make the same laws and regulators applicable to NDC and therefore to themselves. That will ensure that the legislators and ministers do not take irresponsible or imprudently risky decisions when making laws or policies or when implementing their decisions. It shouold be easy for democratic leaders.
Q; You mean Corporate Governance should begin at home - the political system and should be just the same as in corporations!
A: You are right. But that would be undemocratic. Democracy means different standards for legislators and ministers. They belong to Royal Class. So, you do not have to worry about Corporate Governance standards being imposed on the political parties or the Govt.
A: Because Governance of countries are not corporatised.
Q: What do you mean?
A: Goverment is not organised as a corporation with shareholding distributed among the citizens equally.
Q: How can structure Govts. like publicly listed corporations?
A: Why, is there any problem. You can name the firm as National Democratic Corporation (NDC) with specified Vision, Mission, Chater of business activities, strategies, objectives, Plans and Performance Disclosures. The shares will be listed in the market. If the share price falls, it would mean the citizens are viewing the performance of the management of the Govt. as poor.
Q: So, the NDC's shares will be listed and publicly traded! But then the NDC's shares will be corned by the rich.
A: There will be two classes of shares. Class A shares will not be traded as each citizen is issued a share free of cost as soon as one is born and extinguished as soon as one dies. Class B shares are to be purchased by citizens if they wish to with money. Govt. can issue fresh shares at any time it requires money by issuing Class B shares at prices that will be accepted in the market. Class B shares will be traded in the market. The NDC can riase money by issuing bonds, debentures, certificate of deposits, etc. But that will be subject to a prudential leverage (debt-equity) ratio.
Q: What about voting rights?
A: Class A shares held by adults will enjoy political voting right only. Class B shares will have no such voting rights. But will be entitled to get dividend at the highest rate of dividend offered by any private company in the country or inflation rate plus 5%, whichever is higher. NDC can never be liquidated. If it defaults in payment to class B shareholders or to lenders/ creditors, the ministers and the entire set of lgislatures will be penalised as per the provisions of criminal law applicable to fraud or murder. The ministers and legislatures can go to court for justice but will autoimatically lose their positions ad fresh elections will be organized. Each candiate must hold a specified minimum number of class A shares to be eligible to become an election contestant. The elected legislatures and the ministers would have to deposit specified minimum class B shares to an independent custodian company till the time they hold office. During this period the class B shares deposited to the custodian cannot be withdrwan or traded. At the end of their term the legislatures can take back the shares.
Q: It is becoming increasingly complicated now.
A: But only complicated systems can ensure Corporate Governance. The legislators pass so many laws and appoint so many regulators to improve Corporate Governance. Now, they will make the same laws and regulators applicable to NDC and therefore to themselves. That will ensure that the legislators and ministers do not take irresponsible or imprudently risky decisions when making laws or policies or when implementing their decisions. It shouold be easy for democratic leaders.
Q; You mean Corporate Governance should begin at home - the political system and should be just the same as in corporations!
A: You are right. But that would be undemocratic. Democracy means different standards for legislators and ministers. They belong to Royal Class. So, you do not have to worry about Corporate Governance standards being imposed on the political parties or the Govt.
May 11, 2009
Democratic Urge to Rule
Q: But, why do majority people want others, especially the rich to be taxed?
A: That is because modern democracy rules out the choice of zero taxes on all citizens. If you have a poll among the citizens where you ask each citizen whether he/ she would like the Govt. to withdraw all taxes on him/ her, everyone will vote for zero taxes.
Q: What if the question is: Tax others and not me'?
A: Everyone will vote Yes. But this cannot be implemented as it is impossible to leave each person without tax while making others pay taxes. You need a cut -off to satisfy jealousy. The poorer people would be allowed to be granted to effectively enjoy their choice based on jealousy. So the closest question one can try is : Tax only those richer than I am. Everyone will again vote YES. But you will get majority satisfied if you impose no taxes on the bottom 51% of income-earners.
Q: So, you mean to say that modern democracy is based on satisfaction of jealousy of the majority.
A: You are right. Assume there is no jealousy, all taxes will be rejected by referendum.
Q: That cannot be true. Many people will be willing to pay taxes to enable the Govt. to take care of national security, law and order, public health, education, public health.
A: Yes, most people would be agreeable to your view. But this is because of the assumption that the Govt. are not capable of running commercial businesses and making huge profits and not capable of doing philanthropy.
Q: What do you mean?
A: Assume that Govt can run the most efficient commercial business and make more money than the private corporations. Assume Govt. is philanthropic. The, a Govt. can earn as much money as it needs to meet all expenses is budgets for and the entire budget would be philanthropic efforts to provide national security, internal security, justice administration, education, health-care and infrastructure and science. Even the Govt. can seek donations from the people instead of taxing the people. Just like Bill Gates running Microsoft, Govt runs big businesses in competition with private corporations, makes huge money and uses the entire surplus profits to Govt. as donations to fund govt. expenditure. If Govts can make policies, guide and regulate companies, govts. may be well qualified to run businesses and do better than the private sector.
Q: Do you mean that 50% or more of the manufacturing and service sector companies/firms shall be owned and managed by the Govt.? That is nationalization ans socialism!
A: Whatever you choose to do you are going to aim at socialism only in modern democracy. You can have more of tax-dependent socialism or you can have more of tax-independent socialism. But. Govts. that are scared about controlling angry rebellious crowds of citizens generally rely more on tax-dependent socialism and call their countries liberal democracies. Those countries where Govs. have the muscle power to throttle opposition of any kind rely more on tax-independent socialism and call their countries people's democracy or republic. Which ever way one goes, democracy and republics will necessarily be a grand design of massive exploitation of the people by the Govts for the smart and mighty few.
Q: What is the solution then to end this extensive exploitation.
A: In the last millennium, the solution to the problem of exploitation of the people was found out by great philosophers time and again. As it turned out each of their solution (like monarchy to democracy, capitalism to socialism, multi-party electoral systems to single party dictatorship of the proletariat)have been successful in replacing exploitation of the people by another system of exploitation of the people.
Q: Philosophers and political thought leaders do not appear to be as smart, talented or gifted as the natural scientists or the actual politicians are. So long as one has the the strong urge to rule over others to make a worthwhile living, you have to curtail the freedom of others in exchange of impossible to keep promises to make others future brighter. One just will find ways to use theories and ideologies to innovate on how to exploit the others..
A: That is because modern democracy rules out the choice of zero taxes on all citizens. If you have a poll among the citizens where you ask each citizen whether he/ she would like the Govt. to withdraw all taxes on him/ her, everyone will vote for zero taxes.
Q: What if the question is: Tax others and not me'?
A: Everyone will vote Yes. But this cannot be implemented as it is impossible to leave each person without tax while making others pay taxes. You need a cut -off to satisfy jealousy. The poorer people would be allowed to be granted to effectively enjoy their choice based on jealousy. So the closest question one can try is : Tax only those richer than I am. Everyone will again vote YES. But you will get majority satisfied if you impose no taxes on the bottom 51% of income-earners.
Q: So, you mean to say that modern democracy is based on satisfaction of jealousy of the majority.
A: You are right. Assume there is no jealousy, all taxes will be rejected by referendum.
Q: That cannot be true. Many people will be willing to pay taxes to enable the Govt. to take care of national security, law and order, public health, education, public health.
A: Yes, most people would be agreeable to your view. But this is because of the assumption that the Govt. are not capable of running commercial businesses and making huge profits and not capable of doing philanthropy.
Q: What do you mean?
A: Assume that Govt can run the most efficient commercial business and make more money than the private corporations. Assume Govt. is philanthropic. The, a Govt. can earn as much money as it needs to meet all expenses is budgets for and the entire budget would be philanthropic efforts to provide national security, internal security, justice administration, education, health-care and infrastructure and science. Even the Govt. can seek donations from the people instead of taxing the people. Just like Bill Gates running Microsoft, Govt runs big businesses in competition with private corporations, makes huge money and uses the entire surplus profits to Govt. as donations to fund govt. expenditure. If Govts can make policies, guide and regulate companies, govts. may be well qualified to run businesses and do better than the private sector.
Q: Do you mean that 50% or more of the manufacturing and service sector companies/firms shall be owned and managed by the Govt.? That is nationalization ans socialism!
A: Whatever you choose to do you are going to aim at socialism only in modern democracy. You can have more of tax-dependent socialism or you can have more of tax-independent socialism. But. Govts. that are scared about controlling angry rebellious crowds of citizens generally rely more on tax-dependent socialism and call their countries liberal democracies. Those countries where Govs. have the muscle power to throttle opposition of any kind rely more on tax-independent socialism and call their countries people's democracy or republic. Which ever way one goes, democracy and republics will necessarily be a grand design of massive exploitation of the people by the Govts for the smart and mighty few.
Q: What is the solution then to end this extensive exploitation.
A: In the last millennium, the solution to the problem of exploitation of the people was found out by great philosophers time and again. As it turned out each of their solution (like monarchy to democracy, capitalism to socialism, multi-party electoral systems to single party dictatorship of the proletariat)have been successful in replacing exploitation of the people by another system of exploitation of the people.
Q: Philosophers and political thought leaders do not appear to be as smart, talented or gifted as the natural scientists or the actual politicians are. So long as one has the the strong urge to rule over others to make a worthwhile living, you have to curtail the freedom of others in exchange of impossible to keep promises to make others future brighter. One just will find ways to use theories and ideologies to innovate on how to exploit the others..
May 5, 2009
Tax away the Minority Rich
Q: The political leaders are against use of tax payers' money for bail out of private corporations whose executives acted irresponsibly and tooke away large sums of moneies as bonuses.
A: You are right. They also like corporations to pay more taxes.
Q: It means that corporations as a section of tax payers should contribute more money for bailing out corporates in difficulty.
A: That maybe one of looking at the issue. But corporates that need bailout now already contributed large amounts of taxes when they and the economy were doing good. The Govt. collected huge amount of taxes from the booming construction activity and financial services activity. Where did all these money go? Did the Govt. not save some of this taxes that could now be used for bail-outs? Bailouts do not help merely the bailed out companies but also the recession-afflicted economy in general.
Q: So where did the money go?
A: In democracy one does not go back to past: it is the current majority opinion on whom we like tomanage our future that matters.
Q: What is the majority opinion?
A: Tax the bad and the rich more and more of their incomes and wealth..
Q: Who are bad and who the rich are?
A: Corporate executives and the corporations, and of course the taxpayers in the top income bracket. Consider the US economy, the largest in the World. US population is a more than 300 million. Exclude the children, home-makers and the very poor who does not ean enough income to pay taxes, you get slightly less than 50% of the population who pays income tax. By majority rule, more than 50% do not pay tax. They could not have. Of those who pay tex, again by majority rule, 50% contribute only about 3.3% of taxes going to the Govt.This is good because they earn only 13.4 % of income of all tax payers. They are poor. It is better that these 50% of the tax payers do not pay taxes at all. Instead the top earning 5% tax payers whose share in all taxpayers' gross income is 33.4% and currently contribute 37% of the taxes collected by the Govt., pay just a little bit more,say 10 % more taxes (ie. contribute 40% of income tax revenues).
Q: That is a great solution. The top 5% contribute a little more and we reduce the number of tax payers' by half.
A: Yes, that is the appropriate application of the Goldebn Rule by Majority in modern democracy.
A: You are right. They also like corporations to pay more taxes.
Q: It means that corporations as a section of tax payers should contribute more money for bailing out corporates in difficulty.
A: That maybe one of looking at the issue. But corporates that need bailout now already contributed large amounts of taxes when they and the economy were doing good. The Govt. collected huge amount of taxes from the booming construction activity and financial services activity. Where did all these money go? Did the Govt. not save some of this taxes that could now be used for bail-outs? Bailouts do not help merely the bailed out companies but also the recession-afflicted economy in general.
Q: So where did the money go?
A: In democracy one does not go back to past: it is the current majority opinion on whom we like tomanage our future that matters.
Q: What is the majority opinion?
A: Tax the bad and the rich more and more of their incomes and wealth..
Q: Who are bad and who the rich are?
A: Corporate executives and the corporations, and of course the taxpayers in the top income bracket. Consider the US economy, the largest in the World. US population is a more than 300 million. Exclude the children, home-makers and the very poor who does not ean enough income to pay taxes, you get slightly less than 50% of the population who pays income tax. By majority rule, more than 50% do not pay tax. They could not have. Of those who pay tex, again by majority rule, 50% contribute only about 3.3% of taxes going to the Govt.This is good because they earn only 13.4 % of income of all tax payers. They are poor. It is better that these 50% of the tax payers do not pay taxes at all. Instead the top earning 5% tax payers whose share in all taxpayers' gross income is 33.4% and currently contribute 37% of the taxes collected by the Govt., pay just a little bit more,say 10 % more taxes (ie. contribute 40% of income tax revenues).
Q: That is a great solution. The top 5% contribute a little more and we reduce the number of tax payers' by half.
A: Yes, that is the appropriate application of the Goldebn Rule by Majority in modern democracy.
May 3, 2009
Democray Ruler is Always Right
Q: High tax regimes can cause problems of companies getting into trouble and individuals reducing work effort.
A: Yes, but the choice of level of taxation is democratic choice. If the highly taxed corporations suffer and are unable to create more and more employment directly or through linkage effects, the level of taxation may be reduced by a future Govt. through democratic choice. Both high and low taxes are good as and when the choice of high or low is made by governments chosen democratically. And in democracy, there is scope for opposite views: so the democratically chosen opposition party has the obligation to demand for lower taxes when ruling Govt. wants higher taxes and vice versa. In today's democracy, every policy is correct: so you apply the rule of majority to choose policy. That is the basic rationality. In earlier times, the choice was always wrong because the choice was not made by majority rule.
Q: But the high deficits financed by high debts are supposed to be bad.
A: Everything is Good in democracy since the choice is always made by democractically installed Govt. Truth depends on the majority opinion in democracy.
Q: But high debts incurred today will be a burden to the future generation. They are not fully participating in democratic choice.
A: You are right. But any debt created by Govt within the country by borrowing from its own citizens, is also an asset of the citizens. As the future generations bear the burden of repaying the debt, they also receive the proceeds of debt retired by Govt. in future. So, it is democratically fair.
Q: So we should not worry about high national debt?
A: Follow the majority rule and forget worries unless you are in the opposition whose task is to create worries over extant govt. policies.
Q: What about debt from other countries?
A: That is really the headache of foreign countries that give us loans.
Q: Why foriegn loans need not be repaid?
A: They have to be repaid. But such repayment is possible not by giving money. A foriegn loan taken is a purchasing power borrowed and is used to buy goods and services from abroad. Repayment of foreign loans will mean foreigners will have to paid by goods and services produced or owned by us. If the foreign country does not buy our goods and services, they cannot take back the loan.
Q: Then one day China has to buy up US goods and services to get repaid?
A: Yes.
Q: Then why does China give so much loans to America by supplying goods cheap to America.
A: Because China is a People's Republic. What their Govt. does is always correct.
A: Yes, but the choice of level of taxation is democratic choice. If the highly taxed corporations suffer and are unable to create more and more employment directly or through linkage effects, the level of taxation may be reduced by a future Govt. through democratic choice. Both high and low taxes are good as and when the choice of high or low is made by governments chosen democratically. And in democracy, there is scope for opposite views: so the democratically chosen opposition party has the obligation to demand for lower taxes when ruling Govt. wants higher taxes and vice versa. In today's democracy, every policy is correct: so you apply the rule of majority to choose policy. That is the basic rationality. In earlier times, the choice was always wrong because the choice was not made by majority rule.
Q: But the high deficits financed by high debts are supposed to be bad.
A: Everything is Good in democracy since the choice is always made by democractically installed Govt. Truth depends on the majority opinion in democracy.
Q: But high debts incurred today will be a burden to the future generation. They are not fully participating in democratic choice.
A: You are right. But any debt created by Govt within the country by borrowing from its own citizens, is also an asset of the citizens. As the future generations bear the burden of repaying the debt, they also receive the proceeds of debt retired by Govt. in future. So, it is democratically fair.
Q: So we should not worry about high national debt?
A: Follow the majority rule and forget worries unless you are in the opposition whose task is to create worries over extant govt. policies.
Q: What about debt from other countries?
A: That is really the headache of foreign countries that give us loans.
Q: Why foriegn loans need not be repaid?
A: They have to be repaid. But such repayment is possible not by giving money. A foriegn loan taken is a purchasing power borrowed and is used to buy goods and services from abroad. Repayment of foreign loans will mean foreigners will have to paid by goods and services produced or owned by us. If the foreign country does not buy our goods and services, they cannot take back the loan.
Q: Then one day China has to buy up US goods and services to get repaid?
A: Yes.
Q: Then why does China give so much loans to America by supplying goods cheap to America.
A: Because China is a People's Republic. What their Govt. does is always correct.
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