Trade deficits and why it matters

Recently was shopping in one of the famous retail stores in California. There were these group of teens. The conversation was to this effect. Why should all the products in the store have to come from China? Why isn’t there anything that is made in the USA. Immediate came the reply from one of his friend that - it is child labour. I wondered what a stereotyped answer it was. It was a typical answer for a classic youngster growing up in the western countries. That is what the media and the thought process do it to you. America has an enormous trade deficit with the rest of the world - It is to its advantage whatsoever. Rather than a bad thing for the western world - in fact they should be thanking China and other Asian economies for sending them goods all through the year. It is a result of hard labour from their part. The western countries readily consume its fruits.

As said by one famous economist - America gives a bad name to capitalism while China gives good name to communism. Whatever may be the underlying economic principle of a country in operation - whether its capitalism, communism, fascism, monarchism, feudalism - everything revolves around one big parameter - there is a significant portion of the society that is "very productive". Usually in theory all systems work. Everything tries to achieve the maximum productive nature of the society. None of them are designed for failures. But the way it is preached and practiced (over a period of time) is what makes it fail. If communism can fail in Russia - capitalism can fail in western world , provided the spirit of the ideology is not followed. Communism did not fail Russia - the way it was practised made it fail.

There is an enormous trade deficit the western countries in general, and USA in particular have against developing Asian and some European economies. It is the difference between the import and export a nation has. More import than exports would increase the trade deficits. It adversely affects the long-term prospective nature of the country. It is not logical for a high importing country to be successful economically for a long time. The current US President Trump - acknowledges this anomaly unlike his predecessors. However the way to solve it by introducing tariffs is probably not the right way. USA has a trade deficit of $800 billion dollars a year. It is roughly a quarter of its annual budget. 

The way it all started - nations don't export for the sake of exporting. They export more of what they have and import of what, they don't have enough. That is the primary principle of exports. Ideally the export is not to send goods to other countries without the local economy not utilizing it but instead it is the surplus resource generated by the "productive" population - that is privileged to send it over to other nations that need it - so that we can import those we don't have or insufficient nature of it. Every exports results in a monetary advantage. No one would send products to a consumer without being paid for it. Unfortunately the payment made are usually the "new money". It is just like any other private sector employment. Employers hire workers for what they can "export" out of their daily work - so that at the end of the pay cycle they "import" salary. Exports has to be higher than the import for a productive employer/employee relation and hence productive employment. Any distortion in the set-up leads to a break-up of this relationship. The same principle applies to nations. It cannot be different.

The last couple of decades has seen clear malfunction in the trade deficit patterns of the world. The consuming nation like the western world - keeps consuming for ever. The exporting nations do the hard work for the rich nations. Because countries like the USA don't have anything much to offer to the world as goods and services - the exporting nation is unable to import sufficient amount of goods. There by resulting in the accumulation of reserves by the exporting nation. Even though USA spearheads in certain areas like internet and other technologies - the exports of that is not enough w.r.t the imports of other products resulting in trade deficits every year. On the other side - exporting nations have trade surplus. This accumulated reserves - usually called the forex reserves keep going higher and higher. This money is often visualized to be for the "rainy day" - when money flows outwards of poor & exporting  countries. But in fact - they end up owning more reserves than they actually need. With this reserves fast accumulating and sitting idle in the coffers of the exporting nation - is swindled back as investment money - again to those same nations that don't export enough. Recently we have seen trends where sale of critical pieces are being blocked in the US for fear of run over by foreign governments. Countries like China, which has enormous savings and very high forex reserves of multi-trillions would easily buy-out star companies like google, Microsoft with a fraction of the money. The US would definitely wouldn't like that to happen and put regulation so that they absolute take overs don't happen. In one sense - it might make sense, but it is a bad deal for those nations which has consumed less - and saved/exported enough over may years. They are not able to import enough nor make smart investments.

Going back to the child labour being in question - If it is true - the western countries and all exporting countries from China should feel them so privileged that Chinese children are doing them this great service, while their children are having cushy life with video games and recreation being bulk of the day-to-day activity. Let us not under estimate the hard work of the people who make products that the world needs. There shouldn't be any complains until we give export to serve these hard working kids. Savings come from hard work and under-consumption. Every investment made with the savings - are someone's hard-earned money. Taking advantage of that is both economically and morally bad. So instead of younger generation in the US blaming countries like China for their trade-deficit - they have to think about how to reverse that change. Having a truly free market capitalistic society would be the answer to it. Unfortunately western countries are not that anymore.

Contrast Capitalists

I recently visited a jewelry shop in my native town. Even though I have been there quite a few times - i observed some interesting thing. The shop was more than 100 years old. Its larger than most of its neighbors. I have heard about the quality products (gold and silver obviously) they offer. They have loyal customers who extend for generations. You see the cashier's place in the front - there is a person who is easily in his sixties - and you can guess he is the owner. The politeness and attention to details on everything happening around him cannot miss anyone's attention. Behind his chair is photos of this great grandfathers - at least six generation photos. A simple glance at them would reflect they 100 years they were in this business. Their traditional commitment to business and track record is impeccable. There is jewels all over the place. I am sure they pack everything everyday end of business, put it in an iron locker and next morning come again and put them all on display. There has to be some procedure like that to ensure the assets are all safe every single day. A careless mistake on a day, might ruin the whole business in one day.In India - it is very common to see family businesses like this that have been run for centuries. It is not only big entities - even small eateries are run over generations. Even though they had the might and intelligence to spread the business to other parts of the country - it was not a norm to do that. They often restricted themselves to their own cities and towns. They services their community with their needs. It is also very true that they employ people from successive generations. They provide livelihood to families. There is no corporate ascending ladder that you jump fast - it is a stable, slow, efficiently run businesses.

I was in a corporate meeting in my office today. There was a business proposal for a start-up company and someone was explaining the sales pitch to get some investors in. The way it works - you have some idea typically using the internet. You explain the idea to people with money. Make them invest some of their money into your firm. You use that as your seed funding and take your idea to the next level. During the presentations, I just saw something that caught my eye and left me completely mind boggling. Trying to show-case the new start-up in good limelight - they have introduced a notable silicon valley investor as a board member. The intention is to communicate that he is part of the board and his past qualification - it goes on to say investor who has made "successful exits". It left me wondering - why would someone exit his successful business? He should continue to run it, expand it and satisfy his customers. instead why would someone exit (sells) that too multiple times? Can someone be so good at so many businesses. As it turned out - he is just an investor who throws in money at prospective companies only to sell it to someone who can afford to pay more than you had invested. The investor cashes out of that business. In corporate financial sense - this is perfectly rational. The investor provides capital, flips it on a profit when things are good. Wonder - when things are good, why not stick to it and make it bigger? Probably the answer to it is - why take risks when you could sell it and take a handsome return. The whole mentality of buying / selling stocks in the open market has taken a step forward and crept into buying/selling "service" companies. People just do the flips - wonder if they are real businesses that help the society.

In the above two examples - we have seen both edges of capitalism in play. In corporate America - the usual rule is to start a business, take it to the next level where it can be sold. Move on to the next big idea. This is very prevalent in service based companies rather than manufacturing firms. The concept of customer loyalty is organization based. It is the corporate mentality of doing business. In western countries - it is also very common to keep expanding your business. You read business newspapers - every CEO would say they want to multiply the business by 10 times by next year or something similar. Needless to say - you need to talk like this to be a CEO.

It just turns out the whole mindset of an Indian business is completely different from their western counter parts. Ethics and culture are embedded into their business models. 

The biggest con - Bitcoin

As I write this post, its Aug 16th, 2017 the US market is open and trading mid-day and one bitcoin is trading around $4300. What a run it has had so far. The market share of bitcoin is around $70 billion USD. With the Dow and S&P hitting all time highs - giving handsome returns, wonder why investors would ride the bitcoin speculative wave, as everyone knows - it might be very risky. So far - the investor have been handsomely rewarded. How long could this last? Frankly no one knows!

There was a time long long ago - carts were pulled by horses or bulls. Some people contemplated the idea of operating a cart without an animal tied to it. The idea was stupid, it was thought then. The common sense was the cart wouldn't run without an animal in front of it, given what was reality at that time. History turned a new page, with the invention of mechanical motors that would operate a wheel rolling over again and again to cause forward motion. The automobile replaced carts/animals. Even though it was considered dumb at one point of time - humans then conceived that it could happen.

Is Bitcoin such a revolutionary idea that would change the world we live in on how people use money as medium of exchange?

Before we get into what it is going to be, lets see what it is now. Bitcoin as they say it is a "Digital currency". There are thousands of digital currencies on the internet.Not sure if bitcoin is any superior or inferior compared to others. There is also no guarantee this bitcoin is the best digital currency for next few years. They are being traded actively though. Bitcoin stands-out from the rest as most popular of the crypto-currencies. Even after you read multiple articles on digital currencies - it is very hard to get your head around it. Lot of things are more confusing. It is complex to the core. Something like currency should be lot simpler than that.

The biggest characteristics of bitcoin (or any digital currency for that matter) is its finite availability. It could rival to any fiat currency - that the government can print at will.

If there is an unlimited supply of bitcoin - there wouldn't be a market for it. Even though it sounds promising with respect to that fact - there is infinite number of digital currencies available over the same medium. With market forces determining the value or worth of each of them, its quite unstable.

Bitcoin is not used in day-to-day trade. Smart people would call it a financial asset rather than a currency. For now even people who own bitcoin do not consider/think them as as store of value that they plan to keep for their retirement. They think it just like any stock. They want to hold it until they think its a right price to sell. Unlike companies that have factories and machinery- bitcoin has nothing to back itself except the confidence of the bitcoin buyer. It is really a risky speculative trade. People are speculating the price of bitcoin and pushing it higher as more buyers step in than sellers.

Digital currencies would go down in history as the most successful marketing campaign that created lot of hype that would only result in an eventual and complete collapse.

In the 2000 dotcom bubble - many companies that were valued very heavily went to zero. In my opinion - bitcoin and other digital currency are no different. They will and have to go to zero. Investors would lose every bit in this speculative bubble. Of course some would make money. But the concept of digital money is fundamentally flawed.

The bitcoin endorsers use the word "Mining" that is intentionally distracting. I just checked the dictionary meaning of mining. It is digging up the earth for coal or other minerals like gold. Mining of minerals has always been an occupation since human beings first arrived on this earth. Some people took the effort to get some thing out the ground that was rare and attractive, sold it to someone who is willing to pay the price of it. This has happened generations after generations for centuries. Since the bitcoin community wants to equate the process of creating a new bitcoin - they smartly enough, borrowed a word from the real money - gold. Put in a word mining - to get the feeling to the public as though this is being "mined". They apparently "mine" bitcoins from multiple computers and by solving difficult mathematical problems - that is what they say. This is no replacement for mining something that is tangible like precious metals. Using the word mining is completely illogical for crypto assets.

The mere fact that its not being accepted to buy any significant purchase of merchandise like grocery, furniture or a hair-cut proves that its not a currency - at least yet. People exchange the bitcoins for dollar or Euro. Rather than the bitcoin itself - the dollar value behind the currency is what makes it attractive. There might be some one who is selling drugs online and would want to accept bitcoin for the convenience of being anonymous - that would at this stage be an exception and not an example. So far, the universal acceptance is not there. None of the central bankers have really backed this so far. With a large population in Africa, Asia and Latin America completely unaware of technology - a platform that offers digital currency is no where in the picture.

Gold has been a commodity all along human history. It has been elevated to money for centuries for its unique properties unlike any other metal on the periodic table. During the last bull run - it touched a high of $ 1900 for an ounce. If bitcoin can go until $4300 and possibly even more - When this bubble finally burst spectacularly- this money would flow back to the ultimate safe haven asset which is gold. It bitcoin can hit the numbers what it is now - there isn't an upper limit for gold. It could go up multiple times with ease from its current level of $1300/ounce.

What a mess?

Alan Greenspan, very famously told this about quantitative easing and zero percentage interest rate that - It was like urinating in the bed in the night. Until you wake up in the morning you don't realize what a mess you have created.

After the 2008 financial crisis - the US Fed announced to the world of the extra-ordinary measures needed to save the global economy from a 1930s style great depression by bringing down the federal funds rate to zero and buying back trillions in treasuries and mortgage bonds to support an ailing economy. We are almost nine years since and have not reached the 1% mark yet. The other Central banks of the world were no different and followed the US Fed with its quantitative easing programs.

If you can recollect what happened in 2007 - this is just before the bursting of the  US housing bubble - everything seems to be going great until one thing happened. The Fed started rising the funds rate aggressively.

It is no different now.

Its like an ailing patient on a ventilator. The patient is just fine until he is on the ventilator. The moment it is taken away - the patient is going to have complications. In medical terms - its called weaning. The patient is taken off the ventilator and the hope is he can live without it. But as soon as there is a complication - which includes unable to breathe and possibility of instant death, the patient is hooked back to the ventilator. That would be a apt description of how the US economic state is now. The 0.25% federal funds rate increase in December of 2015 and then again in December of 2016 were just token increases for the Fed to save its faces rather than for economic tightening. The patient being on ventilator for too long had become the biggest ailment than the initial disease.

With the employment numbers well under the Fed's target and inflation now creeping well above the 2% mark - also with the Dow Jones index hitting 21K - with historic consecutive winning sessions - an act not seen in last 30 years, it can be agreed that the economy is heating enough and warrants a rate hike.

If the Fed reacts, it will burst the monster bubble it created.

If the Fed doesn't react - the bubble would only get bigger and bigger, to cause a 1930 style great depression - which exactly the Fed is taking credit for saving the world from.

The bubble in the silicon valley is very obvious. If the Nasdaq 5k was a bubble in year 2000 - it is a bubble now too with Nasdaq lingering around the 6k mark. The fundamentals have not changed. The start-up environment in the silicon valley is so much heated up - it just doesn't make monetary sense. Recently Snapchat published what it thinks was its valuation of 24 billion dollars - and admitted that it may never be profitable. Any investor that is in sound mental health knows - not to throw a penny to it. If this is not a bubble what else is? Why would you want to invest money on a company which themselves say - it will only take in more money than giving it back. Who would take the loses from those transactions?

Company valuations, particularly start-up companies are simply ridiculous. There is no way - they are worth what they say they are. Investors are going to rush out of the silicon valley and no one will be spared. The party might just be over.

It is very striking that the Snapchat IPO and Dow hitting 21K on the same day - would be recollected in history as the peak moment for the whole big bubble.

For anyone who has lived through the 2003-2008, can easily re-collect the pain from the crash in the US housing prices. Proxy-government entities like Fannie Mae and Freddie Mac had loaded toxic mortgage backed securities with AAA ratings on unsure investors. It was the biggest piece of odourless crap ever assembled as investment material. When everything started collapsing the US government and treasury had to step in to save the market by buying these mortgage bonds - that no one would buy. In the process - the government only managed to increase its own debt. What wasn't good for the investor - was not good for the government. Except that it was left out in the open as the only buyer in the market. The house prices have retraced their path to the top now, thanks to the low lending rates. Now there are lot of hedge funds that have bought in to the real-estate hype and the result would be no different than what happened in 2007/2008. The mere scale of it might be much larger than 2008.

With the government and global Central banks stepping in to the bond market - the whole market is artificially priced. With all the risks mitigated by the policy makers, there isn't a free market for bonds. Why do you want to hold bonds when you could make a lot of money on a stock market running on steroids? In that case - the yields on the bonds fall dramatically and as is the case - the price of bond increases. Sovereign debt funds are squashed with bonds. What is really not priced in is the serious consequence of inflation that could have a lasting effect on bonds sold already. Just imagine the inflation reaches a 4% mark - why would you want to hold to a 10-year US treasury bond that yields 2.5 % or less.  Already the spread between the CPI and yield on the 10-year is bad. So whatever bursts the bubble - one market that is sure to get ruined is the bond market. With the patient in a ventilator for a decade- the bond market was never in fair play.

For the US Fed - It is damn if you and damned if you don't moment finally.

If the recessions in 2000 and again in 2008 were painful - the one that is getting formed in the horizon is bigger than both combined. The bigger the bubble, the bigger the consequences.

This cannot end well. Buckle up folks, it just may be dawn!

Economic Facts that just doesn't make sense!

If everyone pays taxes, India will be a developed country.

You still in this myth? What a con. The government needs a percentage of your salary every month. They take this money and do some goodies for you - Roads, Water, electricity, law & order. Everyone knows how each one of them is working out now in our country. Not to mention we pay for it individually (as electric bill, water bill) from what is left from our salary. The political establishment in the country gets this taxes and squanders it at will. It is only to ensure their political survival. The more you give them, the more they squander. Just imagine - everyone in India pays taxes. They will happily get it and shower it with their friends and family. Did you ever imagine if  you are sick and you don't get paid for a month - the government doesn't get you any help that month. But it still needs a big chunk of your next month's salary. What a disgrace.

Money is best used by the person who earns it.

India will be a super power if there are "no taxes"

Indian Re is losing value because of "something"

You can see news article every other week to justify the reasons of why the Indian Rupee is going down against the other global currencies this week. Sometimes its the current account deficit, sometimes its the fiscal deficit, sometimes its FII outflows and many times - its the global investor sentiment. No one knows who that guy really is. Experts get away by saying its my pension fund. What you usually don't see is - When current account deficit or the fiscal deficit are well below global standards (meaning good) - the rupee does not appreciate either. Usually you hear that FIIs are withdrawing money and hence rupee is losing value. I would think - the opposite should be true. But what puzzles me, is when the FIIs pumped in those money - the rupee didn't perform any better - it still went down.

A normal Indian would get into a depression state of mind, if he watched how Rupee always goes down - no matter what. At least they can stop saying the various reasons to help this patient.

Bringing back all the black money would make India prosperous

With Narendra Modi government in-place for more than a year now, we as Indians should admit - the black money isn't coming back. Black money is a private person's money. No one would surrender that money - because it was accumulated 'with hard work' in his point of view. This is not the "tax money" - which the government would have used to lift "poor people". Even if the money was "paid in taxes" during those times - it wouldn't make any difference to our poverty level .

Even if its brought in - it wouldn't help others. Distribution of that huge new "uncirculated" currency notes will only increase inflation. The person who worked hard to get it should be allowed to decide on what he wants to do with it. At least his spending would create some new jobs. The government trying to distribute that money would only increase poverty.

Indian Passenger with excess gold is a smuggler

You see this news often. Do you? Someone is "caught" in the airport with more than the allowed quantity of gold is a national criminal. Lets step back a minute and dissect this. Just say, a Indian citizen makes money in a foreign country. He pays his tax due there and has the rest in his pocket. It is his freedom of choice to buy anything with it. He can buy gold or just tissue papers, if he wishes. He can then decide to take it to India because he might need it there. So now this officer in the airport - so called customs is refusing to allow the person to enter with such a quantity of gold. It is unlawful and they demean the traveler in the next day newspaper. Remember, if he brought in the same worth of tissue papers - the customs officer is just fine. It doesn't make a difference if its tissue paper or gold or cow dung. Anyone can buy whatever he wants and can bring it to his permanent place of residence to fund his future consumptions.

Stopping the person from bringing gold is not economics. It is called stealing by the government. If the passenger makes a cut to the government (as taxes), the country is just fine economically.


Oil prices in India are market driven

I just checked the global Brent crude oil price. It is somewhere around $38 USD. Until sometime back a barrel cost more than $120 USD. It is almost a 2/3rd fall in recent prices. So it would be logical for me to assume that the price I pay at the pump has gone down 2/3rd. But actually no. It has only come down from say around Rs. 80/- to Rs. 60/-, a quarter percentage reduction. Anyone with a reasonably sound mind can figure out the part - that the prices of petrol / diesel has not been decontrolled as publicized by the government. In reality what happens is, when the price of oil goes up, the government subsidizes it. When it goes down, the government cashes-in (like now).

A real decontrol would be to leave it alone. Heavy taxation is heavily affecting productivity. An oil a liter is probably around Rs. 30/-. Just imagine how much stimulus that would give to our slowing economy.

Petroleum products are heavily taxed in our country. This is where it gets bulk of its money. India has a vast population that doesn't pay taxes on salaries or income. So the government is left with no option but to heavily tax a commonly used commodity - that is where oil perfectly fits in. For me, I do not want the government to subsidize when prices go up and at the same time, want the complete advantage when the prices go down.

One thing that always happen in India : Prices of a commodity go up significantly in a hype. but NEVER comes down to the same levels ever again.

 

PM Modi - India's frequent flyer

The Indian Prime minister has been going around the world quite a lot since he took over. In general, the Indian media portray him positively. There is an illusion that the country cannot prosper without the foreign investments, and they can come in only if the PM reaches out to them in their country and shook their hands, convince them to invest in India.

The recent one is Prime Minister Narendra Modi's US visit particularly to the bay area. Rubbing shoulders with the top silicon valley CEOs. and maintaining huge optimism for the future. This also highlights how far the country has moved on from a socialist democracy to a corporate democracy. Few years back - an Indian politician wouldn't like to be pictured with really rich corporate CEOs. Not sure, if things has changed recently. May be the people are just watching out without a voice. In classic CEO style, the PM was optimistic. Have you ever heard a CEO being pessimistic ? Dick Fuld was optimistic about Lehman brothers until the last day, it went belly-up. Optimism about the future is particularly not a bad thing. But being publicly very optimistic just before a big crisis would be naïve on a world leader. Probably if its just a bad timing. Only time will say, if its a PR flop for the Prime minister's himself.

With the cheap money flowing in all directions around the world, thanks to the Fed which maintains zero percent interest rate and the ECB that is doing QEs. Things are really hot than what it ought to be. Almost seven years of ultra loose monetary policy with at least 3 QEs has created huge bubbles not only in the western world but also in Emerging markets. Market are addicted to this easy money right now. The Fed confirmed its fear by not raising the interest rate to 0.25 basis points  this month - which most market watchers expected. This raises the question - Do they know something that the rest doesn't?
The whole so called recovery would come down crashing when interest rates start to rise. The Fed knows it. It is impossible to believe - the US economy is not in a bubble. The most obvious indicators

1. Tech-centric NASDAQ hovering around the 5000 mark
2. Housing prices at historic highs even though home ownership is at its multi-decade lows
3. Stock Market - Dow and the broader S&P at its historic highs.

Previously the NASDAQ was at the 5000 mark just before the dotcom burst in 2000.
Housing prices hit the peak in the US, in late 2006 before the house prices crashed that created the great recession in 2008.
Stock Market highs has historically been signs of downturn. The more it rose, the bigger the fall.

There is ample evidence the air might come out of the bubble anytime.

India is no exception to this crisis. Valuations of start-ups are mind boggling. Recent example is OLA running into few thousands of crores. You really have to be a fool to believe OLA is worth that much. All they have is a mobile App and a network of drivers. It is not hard for anyone to compete with them. I am sure the taxi service industry would be diluted. Do they add value to the society? Of course they do. Are they really worth so much money. Definitely not.

The cheap western money is flooding markets in India. The start-up valuations are just a reflection of that. When the easy money tap is closed, the flow dries out gradually. The reality would set-in, and bad business ideas would be very hurt. Businesses cannot be run on valuations. They always have run on value addition for customers and their resulting profits.

With these gloom and doom hanging over the world economy, the PM probably choose a bad time to go with the silicon valley crowd. It looks he himself is probably in a bubble. Real growth comes from within. Foreign money should flow in based on growth and confidence in our country. Not by pep talks. What matters is the nuts and bolts of what is happening in the country and how to improve that. The audience in San Jose - is probably the persons with different aspirations who will not get us there.

We see in the news today, that a man is killed in a mob attack for storing beef meat at home. This has happened few miles from Delhi, and this is exactly what the PM should be fixing. Some people of his own affiliations are involved in this presumably. This is a criminal act and it needs punishment for murder. With ridiculous things like this happening in our backyard - wonder what is the PM doing in San Jose entertaining a crowd with intangible talks. I am not sure how his party or himself can sell this to the ordinary Indian out there who is yet to get sufficient drinking water, electricity in his home that sits on a bad, dusty road.

It is possible, the Modi bubble would burst before the monetary bubble the world central banks has created. With this time in history - the PM has to be articulate and clear hurdles in how India works. Only those will make this country prosperous. All he needs to do is deliver on his promises here. I really wish he succeeds., but the performances so far since June 14' is just simply pathetic.  Just like in a bubble - there is more hot air than real substance in governance.

The political alliance of the Executive and Judiciary

A lot of things annoys us about India. The close nexus between the politicians in power and the court systems are one such. I just read a news, saying the Mumbai high court has ruled that the decision by the Maharashtra government to ban beef is valid. I am pretty sure, the litigation will be moved to higher courts and would be struck down.

Bottom line, it makes no sense for the government to dictate what its citizens have to eat. It would be individual liberty. If there is a market for it - so be it. Passing a legislation to ban a particular kind of meat doesn't sound a rational decision. The government has no role to play in this, with sufficient other things to do, on its plate. Would it ban a particular vegetable next? How to enforce that? The police in the vicinity should go around the city to make sure - there is no one out there slaughtering cows? And make sure, the place that slaughters goats is not slaughtering cows ? Can this be done daily, 24 x 7 for the rest of the foreseeable future? Cops have to go around looking for beef-eaters?  There are many states in our country that sells alcohol. Lately we don't hear bans on them.

This is a classic example of government trying to do needless things. Why do they pass legislation like this, if it cannot be enforced. This is to please a section of the party or its followers. Just that. In reality - nothing would change. There will definitely be a black market for beef.  Local heavy weights and unlawful but powerful big-shots make a dishonest living of this. Only in our country people make a 30-40 year career doing "unlawful" petty stuffs. The mere existence of insane laws help them. The corrupt policemen and government officials exploit the situation.

Law - is a serious doctrine that people of a country or a region should abide by. They are gospel like. Making such "unenforceable" laws make the rest of the laws look bad too. Why would you abide by some of it and not abide by some of it. There is no "weightage" of any kind around them. They all should be "equally enforced" in real world.

When a particular party is in power, the courts and the government seem to be in the same page. Cases against ruling party men suddenly go cold. There is no word of it in the media. But cases against its political rivals speed up. We read this in newspapers daily. This is very confusing. We were all taught in schools, that judiciary and executive are two separate pillars in democracy. In reality, both the government and the courts are in same line at any given time. An independent and authoritative court system is what India needs. If they are hand-in-glove with the current government - the reason they exists do not hold good. What is funny - people just cope with it. They are willing to wait for another five years, to see the other side. When the congress is in power, lot of BJP MPs/MLAs are dealing with courts. When the BJP comes to power, all congress leaders are involved in fighting cases against them. Naveen Jindal is charge sheeted for his role in obtaining coal blocks in Jharkhand. Why is he being charge sheeted now? Why not when Manmohan Singh was the Prime minister? Where were the courts then? We don't hear an explanation about that ever.

This is very obvious in the southern state of Tamil Nadu. The DMK and the AIADMK have rotated being in power alternatively for 25-years. As soon as the DMK comes to power - all cases against AIADMK politicians come to the forefront. Media pages are filled with this entertainment. When the AIADMK is voted to power after 5-years, you don't hear about those cases anymore. Instead it will be about the court cases against the DMK politicians. Media pages are filled with this entertainment now. All along this entertainment creates a false feeling among the people that - the judiciary is working and doing its job. But it isn't for anyone - who can think!

Foisting cases on political rivals after coming to power - is a ritual in our country. It makes sense, court cases are initiated when a new government comes to power. However what doesn't make sense is, when these people come back to power again - the cases go cold from there. The notion of independent judiciary is just imaginative. Instead of trying to fix the rule book better - it would be wise to throw it out and write a small rule book - that is clear and unambiguous. There has to be clear distinction between bailable and non-bailable offences. Right now - everything is at the discretion of the judge. Lets get that word out from the rule book. Some people are stuck in jail for a murder, but some are out there on bail for the same kind of offense. It just doesn't add up.
Make the rule book simple - so that the common man can understand. Do not make it such that only the lawyers can interpret.