Tuesday, September 27, 2005

Cont... Whither B-School Rankings!

This is just a continuation of the previous post on the futility of relying on B-School Rankings...

Since then, one more publication has come out with rankings... and so here is a scorecard as of now.

would these really help an MBA aspirant help making an educated choice?

...or maybe, we seriously need a "B-School Ranking Regulatory Authority of India" :0)

Friday, September 23, 2005

Invade!... but at least change "the script"!!!

Perhaps, they should seriously think about changing the script justifying the invasion of a sovereign country.

Back in Oct 2002, the CIA's National Intelligence Council page had stated:

"Iraq has largely rebuilt missile and biological weapons facilities damaged during Operation Desert Fox and has expanded its chemical and biological infrastructure under the cover of civilian production."

3 years later, today,a US States Dept spokesman said:

"We have no doubt that if Iran continues on the path that it has chosen to follow for these past years, pursuing nuclear weapons under the cover of a civilian nuclear program, that they would be reported, and should be reported, to the Security Council..."

Just google "Under the cover of civilian nuclear program", and the stale - and noble -justification for "preemptive war" loses its novelty - and ethical - value

...and in case, if wants to shrug this away as a semantic coincidence, here is another curious repeat of history (Some earlier posts - e.g., "The New "Axis of Evil" - or emerging Geo-Political "Continental Shift"", "The Collapse of Dollar Economy?", etc. - had touched upon this):

A news-report earlier this month - Will the Iranian Oil Bourse Threten the Dollar? - states:

"Tehran reconfirmed that it plans to create a euro-based exchange in oil — to compete with the London and New York dollar-denominated oil exchanges, both American-owned.... The proposed March 2006 launch of the Iranian oil bourse (iob), if successful, would give the euro a foothold in the international oil trade, solidifying its status as an alternative oil transaction currency. This, in turn, could be a catalyst for a major currency flight from the dollar to the euro—and a disaster for America."

Rings a bell?

well... back since 2000, Iraq had also started selling oil in Euro !!!

...thus setting the stage for Gulf War-II

1. US Brushes off lack of support for action on Iran
2. CIA 2002: Iraq’s Continuing Program for Weapons of Mass Destruction
3. Google: Under the cover of civilian nuclear program
4. "The New "Axis of Evil" - or emerging Geo-Political "Continental Shift""
5. "The Collapse of Dollar Economy?"
6. Will the Iranian Oil Bourse Threten the Dollar?
7. CNN.com: U.N. to let Iraq sell oil for euros, not dollars
8. Gulf War II: Saving the US$ against Euro

Tuesday, September 20, 2005

"B-School Surveys" Misguide....Period!!!

The B-School Ranking Season is here... and confusion galore!!!

If B-Schools claim that they teach the students how to make wise decisions amidst ambiguity and uncertainty, then the learning process certainly starts for the wannbe MBAs when they consider the numerous published B-School Rankings to chose where to apply.

So far in this season, only 3 publications have published their unique - and mutually contradictory - rankings.

However, last year 6-7 publications had ranked the B-Schools on their self-selcted criteria... so one can safely anticipate that more rankings will be getting published in the coming months... In fact, given the craze of media to rank everything, anything goes - more rankings, more critereia, more clarifications in small prints... and more confusion...

... I mean, there is no law which says that, say, Femina, Chandamama, or Janasatta - or for that matter, Banta Singh Santa Singh Foundation for Whatever- cannot rank B-schools, is there?.

What has made the process of ranking slightly tough for the publications this year is the decision by all IIMs not to participate in the ranking (I guess, the same for FMS Delhi, but am not sure)... and XLRI, Jamshedpur is participating on a selective basis.

But, the 3 rankings - by Business World, Outlook and AIMA-Business Standard - published so far are worth looking at:

A. Business Today (June 19, 2005)

A couple of years back, BT had decided that since verifying the information given by the B-Schools is virtually impossible, it is more convenient to evaluate the B-Schools as "Brands". This year too, the ranking is based on "Brand Loyalty + Price Premium", etc.

...er ...pardon this extremely stupid question: when you select a B-school to study in, is it really like buying a soap?)

Their 2-stage methodology is interesting:

Stage 1: How do you shortlist the 30 B-schools to be ranked?
Just ask

  • 101 MBA aspirants (out of more than 100,000 who sat for CAT, and more than 50,000 who appeared for XAT), and
  • 75 recruiters (sample: "a mix of managers from companies with revenue less than Rs 500 crore and more than 500 crore" - so precise!!!)

    Stage 2: And how do you arrive at the magical rankings?
    Interview another 108 current MBAs, 88 young executives and 77 functional heads

    Total Sample for survey: 449

    (they ranked almost 1000 B-schools in the country!!!)

    But Presto! - here are the rankings:

    1. IIM, Ahmedabad
    2. IIM, Bangalore
    3. FMS, Delhi
    4. IIM, Calcutta
    5. XLRI, Jamshedpur
    6. IIM, Lucknow
    7. IIFT, Delhi
    8. Symbiosis, Pune
    9. JBIMS, Mumbai
    10. NMIMS, Mumbai

    ... Which may look OK at a first glance, till you look at the details in the pages that follow. Some startling revelations from this study:

  • IIM, Bangalore does not feature in the Top-10 list of Recruiters' Choice.

  • A recruiter would rather go to KJ Somaiya or to Symbiosis or to IIFT (nothing against these institutions - they are good in their own ways) than to IIM Calcutta

  • An MBA aspirant, given a choice between ITM Ghaziabad and IIM, Calcutta, is likely to join the former

  • For that matter, an MBA aspirant is likely to select ITM Ghaziabad or Alliance or Amity over XLRI Jamshedpur (which does not even feature in the Top-10 of the Wannabe MBA's choice.

    Needless to say, such findings would shake one's faith in reality as one knows it!!

    B. Outlook (September 15th, 2005)

    This one looked like a more comprehensive and rigorous ranking - what with 6-7 well-defined parameters. Pretty honest also, since the magazine mentions that out of the invitations it sent to 950 B-Schools, only 234 responded. To clarify to the wannabe MBAs, as to why there were so many B-schools who refused to participate in the survey, page 62 clarifies:

    "The were all wrong: they didn't have a clue about how B-School rankings are done; many, who sat in their cosy, air-conditioned offices, were criticising it only because their particular institutes had been ranked low in some surveys; then there were those who were shell-shocked by their institute's ranking and opted out of most of surveys."

    Notable among these B-Schools, who
    (1) had no "clue about how B-School rankings are done", and
    (2) "were shell-shocked by their institute's ranking"
    were the IIMs, XLRI (and I guess, FMS, Delhi), who refused to participate in the ranking survey

    Nevertheless, for some myterious reasons (or not so mysterious either - I mean, how do you justify the validity of your objective B-School Rankings, if they don't feature the IIMs in the top-10), the magazine did rank IIM A/B/C... Based on "secondary data"...

    So here goes... Have your pick:

    1. IIM, Ahmedabad*
    2. IIM, Bangalore*
    3. IIM, Calcutta*

    4. MDI, Gurgaon
    5. SP Jain Instt, Mumbai
    6. IIFT, New Delhi
    7. NMIMS, Mumbai
    8. XIM, Bhubneshwar
    9. ICFAI, Hyderabad
    10. IMI, Delhi
    (* did not participate in the survey - ranking based on "secondary data")

    Ok, if MDI did not feature in the top-10 of the earlier BT survey, or if the FMS Delhi or XLRI Jamshedpur does not feature in this list... Well, your luck!... Take your pick!!!

    C. AIMA-Business Standard (BS, September 15, 2005)

    Ah.... Finally a "politically correct" survey!

    This one does not "rank" but "grades" the B-Schools - and publishes them in "alphabetical" order (don't know how many people read the fine print that the following are the Top 10 A+ B-Schools, and are not ranked from 1-to-10

  • Bhavan's SP Jain Instt, Mumbai
  • DMS, IIT Delhi
  • IIFT, New Delhi
  • IMT, Ghaziabad
  • IRMA, Anand
  • MDI, Gurgaon
  • NITIE, Mumbai
  • University Business School, Chandigarh
  • XIM, Bhubaneswar
  • XLRI, Jamshedpur

    OK, OK!!!... we will ignore the fact that "SP Jain Instt of...." is actually - and technically - "Bharti Vidya Bhavan's SP Jain Instt..."... . Frankly, I did not know this... and therefore will naturally lead the pack of A+s

    Just a slight of hand (or pen), one will say... :)

    Postscript: Since the issue/dynamics of "Why Rank/ Be Ranked/ Rely on Ranks" has alrady been covered in an earlier posting - The Maya of B-School Salary - I have skipped that...

  • Friday, September 16, 2005

    Manufacturing War (1): Kosovo Bombing

    When Hitler's Minister of propaganda, Dr Joseph Goebbels said: "Tell a lie hundreds of times - and it becomes a truth", he knew what he was talking about.

    Mordern wars and media (more specifically, PR agencies) have grown together (after all, the PR industry was an born out of WW-I).

    Here are excerpts from an interview with Mr. James Harff (director of Ruder & Finn Global Public Affairs) given to Mr. Jacques Merlino, associate director of French TV 2, in Paris in October 1993.

    (Ruder & Finn is a public relations company, and was working for "the Republics of Croatia and Bosnia-Herzegovina, as well as for the opposition in Kosovo" during the early 90s...)

    Harff: For 18 months, we have been working for the Republics of Croatia and Bosnia-Herzegovina, as well as for the opposition in Kosovo. Throughout this period, we had many successes, giving us a formidable international image. We intend to make advantage of this and develop commercial agreements with these countries. Speed is vital, because items favourable to us must be settled in public opinion. The first statement countsThe retractions have no effect. .

    Question: What are your methods of operation?

    Harff: The essential tools in our work are a card file, a computer, and a fax. The card file contains a few hundred names of journalists, politicians, academicians, and representatives of humanitarian organizations. The computer goes through the card files according to correlated subjects, coming up with very effective targets.

    The computer is tied into a fax. In this way, we can disseminate information in a few minutes to those we think will react (positively). Our job is to assure that the arguments for our side will be the first to be expressed.

    Question: How often do you intervene?

    Harff: Quantity is not important. You have to intervene at the right time with the right person... ...

    Question: What achievement were you most proud of?

    Harff: To have managed to put Jewish opinion on our side. This was a sensitive matter, as the dossier was dangerous looked from this angle. President Tidjman was very careless in his book "Wastelands of Historical Reality". Reading this writtings, one could accuse him of of anti-semitism.

    In Bosnia, the situation was no better: President Izetbegovic strongly supported the creation of a fundamentalist Islamic state in his book "The Islamic Declaration". Besides, the Croatian and Bosnian past was marked by a real and cruel anti-semitism. Tens of thousands of Jews perished in Croatian camps. So there was every reason for intellectuals and Jewish organizations to be hostile towards the Croats and Bosnians. Our chalenge was to reverse this attitude. And we succeded masterfully.

    At the beginning of August 1992, the New York Newsday came out with the affair of (Serb) concentration camps. We jumped at the opportunity immediately. We outwitted three big Jewish organizations... We suggested to them to publish an advertisement in the New York Times and to organize demonstrations outside the U.N.

    This was a tremendous coup. When the Jewish organizations entered the game on the side of the (Muslim) Bosnians, we could promptly equate the Serbs with the Nazis in the public mind.

    Nobody understood what was happening in Yugoslavia. The great majority of Americans were probably asking themselves in which African country Bosnia was situated. But, by a single move, we were able to present a simple story of good guys and bad guys, which would hereafter play itself.

    We won by targeting Jewish audience. Almost immediately there was a clear change of language in the press, with the use of words with high emotional content, such as "ethnic cleansing", "concentration camps", etc. which evoked images of Nazi Germany and the gas chambers of Auschwitz. The emotional charge was so powerful that nobody could go against it.

    Question: But when you did all of this, you had no proof that what you said was true. You only had the article in Newsday!

    Harff: Our work is not to verify information. We are not equipped for that. Our work is to accelerate the circulation of information favorable to us, to aim at judiciously chosen targets. We did not confirm the existence of death camps in Bosnia, we just made it known that Newsday affirmed it... We are professionals. We had a job to do and we did it. We are not paid to be moral.


    As another article mentions:

    "Public relations firms have also played a major role in misinforming the public by sending out a steady stream of press releases to the American and European media, as well as to the United Nations, with the primary purpose of painting the Serbs as barbarians. Ruder Finn, a major PR firm, sent out reports that Serbian men had raped 50,000 Muslim women. This highly publicized report led women around the world to condemn Yugoslavia, and the Serbs in particular. A subsequent investigation by the United Nations revealed that 800 rapes occurred, and that they had been committed by Serbs, Croatians and Bosnian Muslims alike. Again, the correction went unnoticed by the media.

    In 1995, the city of Srebrenica, a terrorist base for Islamic forces in Bosnia, was attacked by Serbian troops. The media reported the massacre of 8000 Muslim men, and the Serbs were immediately accused of a campaign of genocide. Such accusations brought pressure to put Serbian leaders on trial, and a War Crimes Tribunal, controlled by NATO and held in the Hague, proceeded to do just that. Nevertheless, the bodies from the alleged Srebrenica massacre have never been found, leading one to ask, on what did the tribunal base its charges of genocide? Three weeks after the battle of Srebrenica, Croatian General Agim Ceku led a devastating artillery bombardment of the Krajina, a Serb-inhabited region of Croatia. Nearly 250,000 Serbs were ethnically cleansed from the Krajina in advance of the Croat onslaught. Since the US had covertly aided the Croats in what was called Operation Storm, the massive Serbian tragedy went virtually unreported in the North American media, in contrast to the media blitz covering Srebrenica."

    ... Of course, the Kosovo massacre/liberation/bombing (or whatever!) was neither the first - nor the last - in a recurring phenomenon of the violent 20th century. We still carry its legacy - and illusions - into this century...

    Western PR Wars
    PR Firms Create an Appearance of "Genocide"
    Media on Trial
    Operation Storm

    Monday, September 12, 2005

    9/11 vs. Belgrade '99

    Disaster's - specially the man-made ones - are always painful and sad spectacles, wherever and whenever they occur.

    But some get converted into a "brand" (and their "brand value" is leveraged for many new forays and expansions). Others, unfortunately get forgotten - they fade away as mere cruel footprints on the shifting sands of history.

    Nothing demostrates this phenomenon more accurately than these parallel picture of

  • 9/11 (when the suicide bombers crashed their planes into WTC), and

  • Belgrade '99, when the NATO planes (headed by U.S. Air Force General Michael Short) bombed it to primitive ages (78 days, 10,000 sorties, 7000 tons of explosives (including depleted uranium bombs and cluster bombs), to destroy 50 bridges, 6 trunk roads, 5 civilian roads, 20 hospitals, 30 health centers, 190 educational institutions, 12 railway lines... Among numerous lives)

    [try if you can distinguish the "terrorist attack" from the "collatoral damage"]

    1. Emperor's Clothes - Death on a Very Small Planet
    2. Damage to Civilian Infrastructure in Yugoslavia
    3. Anatomy of Collateral Damage

  • Thursday, September 08, 2005

    On Managing Natural Disasters...

    One of the chain-mails floating on the net is about comparison between the recent Mumbai floods and the disaster that struck New Orleans - and how the two were handled so very differently.

    It is an unfair comparison for number of reasons...

    But this comparison - with a category 5 hurricane hitting Cuba last year - has much learning value for dealing with natural disasters (The following are excerpts from an article "The Two Americas" by Marjorie Cohn, which was published earlier this week. I have edited out the political content, but for those interested, the link to URL is given at the end of the post:

    "Last September, a Category 5 hurricane battered the small island of Cuba with 160-mile-per-hour winds. More than 1.5 million Cubans were evacuated to higher ground ahead of the storm. Although the hurricane destroyed 20,000 houses, no one died.

    What is Cuban President Fidel Castro's secret? According to Dr. Nelson Valdes, a sociology professor at the University of New Mexico, and specialist in Latin America, "the whole civil defense is embedded in the community to begin with. People know ahead of time where they are to go."

    "Cuba's leaders go on TV and take charge," said Valdes.... "Merely sticking people in a stadium is unthinkable" in Cuba, Valdes said. "Shelters all have medical personnel, from the neighborhood. They have family doctors in Cuba, who evacuate together with the neighborhood, and already know, for example, who needs insulin."

    They also evacuate animals and veterinarians, TV sets and refrigerators, "so that people aren't reluctant to leave because people might steal their stuff," Valdes observed.

    After Hurricane Ivan, the United Nations International Secretariat for Disaster Reduction cited Cuba as a model for hurricane preparation. ISDR director Salvano Briceno said, "The Cuban way could easily be applied to other countries with similar economic conditions and even in countries with greater resources that do not manage to protect their population as well as Cuba does."

    ... Cuba, where homeland security means keeping the country secure from deadly natural disasters as well as foreign invasions,...

    ...When Hurricane Ivan hit Cuba, no curfew was imposed; yet, no looting or violence took place. Everyone was in the same boat.

    Fidel Castro, who has compared his government's preparations for Hurricane Ivan to the island's long-standing preparations for an invasion by the United States, said, "We've been preparing for this for 45 years." ....

    [Marjorie Cohn, a contributing editor to t r u t h o u t, is a professor at Thomas Jefferson School of Law, executive vice president of the National Lawyers Guild, and the US representative to the executive committee of the American Association of Jurists.]

    The Two Americas

    Wednesday, September 07, 2005

    Footprints of The Empire

      "There was no corner of the known world where some interest was not alleged to be in danger or under actual attack. If the interests were not Roman, they were those of Rome's allies; and if Rome had no allies, the allies would be invented. When it was utterly impossible to contrive such an interest - why, then it was the national honor that had been insulted. The fight was always invested with an aura of legality. Rome was always being attacked by evil-minded neighbors. The whole world was pervaded by a host of enemies, it was manifestly Rome's duty to guard against their indubitably aggressive designs."

    ...this was how Joseph Schumpeter described the Roman Empire's "manifest destiny" back in 1919.... sounds familiar??!!!

    But to build/ maintain an Empire, it is necessary to have army installations across the regions.

    A couple of days back when, when Gen. John Jumper, the outgoing US Air Force's Chief of Staff stated that US warplanes will remain in Iraq "more or less indefinitely", his statement got obscured in the news about Hurricane Katrina.

    In fact, this was also not really a "news", since US has been building up 14 permanent military bases in Iraq since long (e.g., Camp Anaconda, 50 miles north of Baghdad, is already functional: it houses 22,000 soldiers, occupies a 15-square-mile compound with four dining halls, two swimming pools, a first-run movie theater and even a Burger King franchise).

    In fact, most US military bases are made for a long time usage, with full amenities and conveniences. For instance:

    Camp Bondsteel:

    This 955 acres complex was established in 1999, after Kosovo was liberated (or "bombed to stone age", if you please, and the privatisation started). With a perimeter of around 7 miles, Bondsteel has two large dining facilites - besides, a 24-hour section for sandwiches, coffee, fruit, and continental breakfast items, salad bars, potato bars, etc. One can buy anything - from plastic bins to DVD players and TVs - from its two storied mechandise building, where Burger King, Anthony’s Pizza and a Cappuccino bar are also located. Naturally, there are living quarters for more than 7000 soldiers, the recreational facilities include gyms, basketball/volleyball courts, billiard tables, internet and video-conferencing facilties... And since, one is likely to stay there for a long time, one must not miss out on future career opportunities: The Laura Bush Education Center offers variety of college courses, and University of Maryland and Chicago University are represented at the base camp.

    But such bases are only a very small slice of a much larger global presence.

    According to the Defense Department's annual "Base Structure Report" (2003)[pdf], the Pentagon currently owns or rents

  • 702 overseas bases
  • comprising of 44,870 barracks, hangars, hospitals, and other buildings, which it owns (plus 4,844 leased facilties).
  • in about 130 countries
  • which deploy more that 250,000 uniformed personnel (and equal number of dependents and DOD civilian officials) - in addition to around 45,000 locally hired foreigners.
  • and has another 6,000 bases in the United States and its territories.

    US Military Presence across the Globe

    Here are some snapshots of this network of installations:

    US European Command:

    Major Air Force Installations in Europe

    US has currently 259 military installations in 5 countries. These comprise of 62,000 active component troops and 3,000 reserve component troops in 19 brigade equivalents, supported by 11,000 civilians and 11,000 local national employees; with 100,000 family members and 4,000 retirees. This structure equates to a Total Army population of about 199,000 (a majority of which are in Germany).

    US Pacific Command:

    Okinawa Japan: occupied since 1945

    Okinawa, the southern most island of Japan, is the base for 2/3 of the 40,000 US troops in Japan, and "hosts" ten Marine Corps bases, including Marine Corps Air Station Futenma occupying 1,186 acres in the center of that modest-sized island's second largest city. (Manhattan's Central Park, by contrast, is only 843 acres.).

    Okinawa is only one of the many installations US has in the pacific region. Others would include South Korea (95 installations - 41 troops installations, and 54 small camps and support sites); Guam (base for numerous naval commands, occupying 8,800 acres, and housing more than 7,000 army personnels); Thailand, Philippines, Australia, etc.


    Central Command:

    US Presence in Middle-East & Central Asia

    Needless to point the obvious, this is the largest deployement of US forces right now (see the data on world-wide deployment of US troops)

    ...and the list goes on: Southern Command, School of Americas, Guantanamo Bay, Honduras, Bosnia, Panama, Peru, Ethiopia, etc., etc.

    It also explains the following diagram:

    In a 1999 New york Times article - Manifesto for the Fast World - Tom Friedman (the current Earth-is-Flat enthusiast) had made an insightful observation/ provocation: "(Economic globalisation) requires a stable geopolitical power structure, which simply cannot be maintained without the active involvement of the United States.... The hidden hand of the market will never work without the hidden fist—McDonald's cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley's technologies is called the United States Army, Air Force, Navy and Marine Corps."

    Gen John Jumper's Statement
    Enduring Bases in Iraq
    Camp Bondsteel
    Operation: Enduring Presence
    The Next American Empire - The Economist article
    America's Empire of Bases
    DOD's Base Structure Report(2003)[pdf]
    Deployment of US Troops across the World

  • Sunday, September 04, 2005

    "Looting" vs. "Finding": Hidden Persuaders in Media

    One of the postings in August was about 12 Laws of Media Matrix, and about how media subtly changes our perception of events.

    I found this posted on the antiwar.com blogspot that I often visit.

    Update: Needless to say, many in the blogosphere noticed this subtle difference in captions. The Photo Controversy led to removal of caption by the news-agency.

    Saturday, September 03, 2005

    A World Waiting for Katrina

    This photograph below shows what happened in New Orleans...

    In 2002!!!

    The caption below reads: "It's a matter of when, not if. Eventually a major hurricane will hit New Orleans head on, instead of being just a close call. It's happened before and it'll happen again."

    This five part series Washing Away ("It's only a matter of time before South Louisiana takes a direct hit from a major hurricane. Billions have been spent to protect us, but we grow more vulnerable every day.") featured on nola.com more than 3 years back.

    But why did this series give this dooms-day prophesy?

    ...because, as it goes on to say: "Water is never far from New Orleanians. Just outside the city, saltwater intrusion is destroying marshes... Now that cypress trees and other vegetation have died, erosion will accelerate, further stripping the region of its natural protections against hurricanes... With the land around us constantly sinking, our natural storm protection is disappearing. Levees protect us, but they're not enough"

    In a way, Louisiana represents a microcosm of the world...

    In July this year, a landmark assessment report - Millennieum Ecosystem Assessment Report - part of the UN Millennium Goals was released - and went, by and large, unnoticed in the mainstream media. Its verdict was:

    "Over the past 50 years, humans have changed ecosystems more rapidly and extensively than in any comparable period of time in human history."

  • More land was converted to cropland since 1945 than in the 18th and 19th centuries combined
  • 20% of the world’s coral reefs were lost and 20% degraded in the last several decades
  • Withdrawals from rivers and lakes doubled since 1960
  • 50% of all the synthetic nitrogen fertilizer ever used has been used since 1985
  • 60% of the increase in the atmospheric concentration of CO2 since 1750 has taken place since 1959
    Etc. etc...

    The impact on global climate has been tremendous, as the following graph on increasing floods, in the recent times across the globe, shows:

    Floods Posted by Picasa

    Similarly, about a year back, Greenpeace posted this on their site: "Extreme weather, International — Hurricane devastation in the US, flash floods in Japan and a UK village washed into the sea. As climate change gathers pace, devastation caused by extreme weather is becoming more common."

    Meanwhile, here we are - a planet, that is sitting and waiting for Katrina to happen... so that we remember - attend to - what we know...

    ... and the Standard & Poor's report on "Impact from Katrina Big, but How Big" has the good news for investors of Disaster Capitalism:

    "...The near-term disruption cuts real GDP in the quarter of the hurricane. The damage is limited, however, since activity usually revives quickly after such an event and the expenditures on repair, rescue and reconstruction are offsets... After the current quarter, the impact on GDP is positive because of the rebuilding activity... Fundamentally, all the damage to net domestic product will appear as a positive to GDP over the coming few quarters."

    Washing Away
    Millenium Assessment Report
    Global Warning - Greenpeace
    S&P: Report on Impact from Katrina

  • Thursday, September 01, 2005

    Macro-Economics for Dummies

    Not my own - had got it in one of the mails sometime back (have also edited it a bit):

    ....suppose you, as a successful capitalist... hire 100 guys to make 100 widgets, and sell the widgets for $1 apiece, and thus GDP is $100.

    So far, so good. Then a few days pass, and...

    we find that you raised the price to $2, and you also figured out a way to make widgets with only 50 employees! The hike in price, unfortunately, reduces widget sales by 25%.

    But GDP jumps to $150!

    But because you fired half the employees, labor costs plummeted, and the next thing you know someone jumps on an airplane and flies down to visit your factory and give you an award as Proud Poobah of Productivity, which you deserve because productivity has soared.

    In the old days, it took 100 guys to make 100 widgets. Now it takes only fifty guys to make seventy-five widgets, and you doubled the price to more than make up for it.

    You're a genius!

    But unemployment is up by 50%, total sales volume is down, and inflation has soared to 100%.