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Apr 10, 2008

Similarities between Indian and American Politics

Despite of the difference between basic democratic system of India and America there’s something very peculiar and common in between the politicians of the two countries.
And that peculiarity is in the politicians being politically reasonable, but economically irrational.

I am not one to suggest that most of the reasonably well-educated politicians are stupid or ignorant of fundamental economic principles. Yet I have seen that most of the politicians of India or America or anywhere else in democratic socialistic statistic system simply stresses over their political rationalities alone and forgets about economic rationalities.
Hillary Clinton and Obama both are promising great change and upbringing of millions of jobs, and removal of poverty, but none of them is ready to explain how they will do it.
It’s just as similar as the Indian congress’s election spree against BJP in the last session.
Despite the India Shining Campaign, ABV failed to provide the proposed development and creation of 1 million jobs and education for all every year. Congress attacked at the failure of the Shining India campaign and stressed over the general questions of inflation, poverty unemployment, illiteracy etc. and the “option less” India voted for MMS against ABV. It is redundant to say about who is better leader amongst them because on economic base, both are big failure.
MMS is a well-known and adulated economist, yet he forgot all economic fundamentals and stressed over political reasons alone and as a result got the big seat of Indian premiership too with the help of Madam Sonia, but was it genuine of MMS to promise or even say about creating and providing 1 million jobs every year and to provide help for rural weaker farmers and creating better situations for education and controlling inflation?
Now at the failure of Congress government at creating jobs and controlling inflation, BJP has started its campaign of Mahangai TV.
As a matter of fact, MMS must know being an economist, that
"Entrepreneurs create jobs. Business creates jobs. The Politician’s job is to get out of the way."
A person of MMS economical stature when says something about creating millions of jobs and controlling inflation should damn well be able to articulate exactly and eloquently how the government is going to create millions of new jobs in a manner that is more efficient and well-organized than the market. As a matter of fact, it is just unacceptable to expect the government creating jobs. What a socialist government can do at the most is to provide jobs by taxing its citizens and redistributing the money according to its own plans, which may or may not be beneficial or economically correct for the citizens, but yes, those plans will be politically correct and reasonable.
The best the politicians can do is to talk about “investing in infrastructure” of their politically strong and stable grounds. Yet in doing so, the political motives are always stressed over which causes a loss on overall economic progress (although public in general cannot grasp it).
This despicable habit of politicians to stress over political benefits and putting economical benefits of the citizens down causes hazardous situations. It’s a well known fact that Bihar, north-eastern states, UP, Laddakh, MP were never given enough importance for economical development because of which alone the naxalites and terrorists and Maoists got hold in these area of India. It was never like government was unable to control the situation and provide a homogenous development, but that is just not possible because socialism basically is a flop idea. On the name of Kashmir, Indian government kept looting whole Indian citizens via taxation, but no infrastructural development was ever stressed over in Jammu and Ladakh.. Bihar always felt lack of interest of economical developers and government never stressed over it. MP is now trying to get on the right lane yet Bastar has suffered a lot already on the hands of Maoists and Naxalites.
The reality is entrepreneurs create jobs, government regulations; restrictions and high taxes drive them away.
How can any average level mind even think that government at the central level, with all of its red tape and bureaucracy, will use all the taxes it collects more effectively than the thousands of taxpayers it will be confiscated from? The truth is that, as Thomas Sowell mentioned in his book Basic Economics: A Common Sense Guide to the Economy , there will always be people more in number who do not comprehend economics than people who do, and the kinds of empty-headed platitudes that these politicians spouts are always designed to appeal to a broad audience of economically unaware voters.
First of all, they misuses the definition of ‘job-creation’ from a free-market construct that people will freely chose to pay a mandatory tax with their free-market purchase which actually is not free as it will taxed and levied at various stages and by using that tax and the other income taxes government will provide legislated services—a necessary evil for the socialist governments.
Politicians do not create the citizen’s income, the citizens generates it. Politicians are merely forcible Robin Hoods which loots the hardworking and earning people via taxation and re-distributes money created by the citizens.
Second important thing is to be mentioned is, although by showing the dreams of investing in infrastructure, politicians can state that infrastructure development will create jobs, but will those jobs be appreciated?
Why an age-old farmer would like to work at a road or dam-construction site? The freedom to choose the job is needed and legislation cannot provide that.
The Soviet Union had a technical 0%unemployment rate but that didn’t meant they had a healthy and vibrant economy.
So even if government may provide some jobs by investing in infrastructural development, its not always sure that it would be appreciated, plus the politicians will always stress over investing at their politically strong areas. Hence, it is useless to expect politicians and governments to remove unemployment. Entrepreneurs, businessmen, innovators and the youth itself can only do it.
What government can do is to provide freedom, lack or removal taxations licensing systems and red-carpetism.
Recently, it was found that the Rs40 million provisions for help of rural unemployed areas were completely wasted in frauds and cheats of bureaucratic system. Even the various monetary help provided by world banks and UNO were being embezzled. It is just an indication that taxation and collective helping attitude can never work. Only individuals’ entrepreneurs can actually help (success of Vikram Akula in south is a proof of it).
Even the politicians cannot provide a developing education system. At the most they can stress over political benefits here again by announcing various reservations for various caste and sect based communities and hence further divide the people amongst themselves. Where poors are even not able to feed there children, how can one expect that more IIT’s IIM’s and more reservations will actually help the poor?
The only way for India is to keep economics aside of these politicians.
Economic freedom and reduction of taxes will not only help the common Indian to try to start creating job within and by themselves but also, it will decrease corruption, which is the necessary demon of the socialist taxation system.

1 comment:

  1. politics is the same everywhere...
    india,america or any othr place...
    the difference lies in ideologies wich must change...