Getting to the root of world’s real problem – Global poverty (Part 3 of 3)

April 15, 2013 Leave a comment

Now for the finale… having understood what the problem is, what the current system is doing to amplify this problem… time to get a glimpse of what a to-be state of the economic system should be.

Amongst many other details of the futuristic economic system, I see 5 key pillars:

1. Understanding that world’s resources are in abundance and not scarce as proposed by economists like Adam Smith

2. Recognize the problem of poverty and solve it to offer home, health, and food security as a fundamental right of all human constituents

3. Manage resource control effectively… important to understand that all the world resources can be classified as either belonging to an individual, the State, or the public

4. Ensure equitable distribution of wealth by making sure that individuals/ organizations don’t hoard wealth but rather use it thereby increasing wealth circulation (think of this as if a neighborhood is independently run as an economy and there are $1,000 worth of wealth and everything has to be run within itself, if people start hoarding cash and not using it, eventually, everyone will have cash but there wouldn’t be any means of earning for so many people who could have otherwise been employed to offer goods/ services for that wealth)

5. Focus on productivity in creating a “real” economy
_ Do not sell what you do not have (you can see how not following this principle has screwed the whole financial services industry and precipitated the crisis)
_ Introduce the gold and/or silver standard to support real wealth creation and not just currency paper printing
_ Eliminate interest from the economy and introduce profit-loss sharing in all financial transactions


Getting to the root of world’s real problem – Global poverty (Part 2 of 3)

April 14, 2013 Leave a comment

Continuing from my previous post, I hope we all recognize that “poverty” is a real problem and a flagrant violation of fundamental rights of many of our fellow mankind.

Now, what is the current system doing to exacerbate this problem? Let’s apply different lenses…

1. Everyone in the multinational forums talks about reducing poverty by 50% by 2020… So, does it mean that millions of people (just 300 children die of hunger every hour) are destined to die of hunger since we cannot solve the problem soon enough. Nothing more to be said on this…

2. Capitalism… it’s just a virtual economy with no “real economy” fundamentals
_ Dollar and the gold –> Back in the times, currency was tied to the dollar to ensure that we don’t over-inflate our wealth by just printing money. Now, that this linkage is gone, value of currency paper can be set by the whims of people in power. Just the other day, I was trying to do simple math that if an economy had real wealth of $1 trillion and is spending $1 million every day, it would take them ~2,700 years to exhaust just that $1 trillion.
_ Regulations –> Society has become more individualistic where rules have been changed as deemed fit for certain section of the society to remove all regulations and allow individuals to hoard wealth thereby taking it out of circulation. The power of a real economy is in the continuous circulation of wealth to allow for an equitable wealth distribution.
_ Stock inflation –> Just because some analysts/ investors forecast great returns (remember, nothing is predictable), the stock price shoots through the roof… take some of the recent IPOs for example. There is no real alignment with what happens on the ground.
_ Usury explosion –> In my opinion, this is at the core of this economic system menace… people with more wealth are able to rip off the not-so-privileged by lending money at unfair terms (high interest rates) which means a common man borrowing will have to pay more to afford the same kind of goods/ services.

Getting to the root of world’s real problem – Global poverty (Part 1 of 3)

April 12, 2013 2 comments

Over the last few years starting with my pre-MBA job, then the business school, and subsequently my current occupation… I have heard and seen closely the issues facing organizations. More often than not, what happened since 2008 is easily blamed on the “financial crisis” without delving any thought to understanding what’s behind this so-called crisis and what the fundamental underpinnings on this issue are…

At the heart of all this is the collapse of the economic system… the primary purpose of an economic system is to ensure economic well-being of all constituent individuals – a fundamental right to live for all mankind. Unfortunately, we have often taken this economic system as given, reclining to the belief that some people have to go hungry for some other people to have a lavish dinner spread.

Why poverty

So, now it’s a question of who falls into which bucket? And so does the flawed theory of “survival of the fittest” find its way. There are countless of articles on economic system and what can be done. I have decided to take a different approach and start with what is the prime objective of a “rational and just” economic system… and then build on how the ideal economic system will handle it robustly than the current systems – be it capitalism or socialism.

Even before we get there, let me share what someone says in support of what I am about to share…
“The causes of the economic crisis are a combination of greed, incompetence, and a number of additional negative character traits.”
– Steven Pearlstein, a Pulitzer Prize winner and a Washington Post columnist

(1) At the core foundation, the purpose of an economic system is to ensure economic well-being of every individual by solving the problem of poverty.

(2) This economic system has to co-exist in harmony with the other important systems of any well-run civilization – the social system, the political system, the legal system, and the moral system. What we see today is exactly the absence of this… where the ecosystem is so corrupt and degraded that I cannot think of any of these five systems being in a good shape.

(3) Now, everyone is very well aware of poverty in developing countries… how rare is it to see images of starving children in Asian countries or malnutrition-related deaths in almost the entirety of Sub-Saharan Africa? However, what we are not aware of is that hunger has embraced shores of the “developed world” as well. The US Department of Agriculture’s Economic Research Service reports that ‘in 2011, 50.1 million people lived in food-insecure households and prevalence rate of food security in the US has gone up from ~10% households in 2000 to ~15% households in 2011’. Even the so-called glorious boom years of 2003-2007 did little to stem this rising tide.

(4) We, living in America, have no clue about this given the media whitewash such fundamental issues get. It was eye opening for me to see a CBS video on “hunger in America” to show how one in six Americans are going hungry every night. So, even within the capitalist stronghold, there are one in six Americans who need a REAL CHANGE!!!

(5) And to add urgency to the situation, it was touching to see how some regions in the world have seen hungry push people back to the stone age… with adults selling off their kids just to afford food. This is really the bottom a civilization can get to… even though all this is happening away from many of us who are fortunate to live easy lives, it is our collective responsibility to rise above the “individualism” mindset to solve this problem.

What the new economic framework will entail…

March 24, 2013 Leave a comment

When we talk about economic framework, there are two different fundamental issues – economic science and economic system. This is because there is a fundamental difference between the method of production of goods and services (economic science) from the manner of their distribution (economic system). Economic science is universal and scientific with no effect from ideology or mindset. However, the distribution of resources, how goods and services should be given to the public, whether they should go to the rich or the orphans, the aristocracy or the landlords is different and dependent on either the belief system or ideology.

In an ideal setup, a human is neither an economic unit (as viewed in a capitalistic system) for whom all decisions from marriage to pensions to drugs to education are viewed from an angle of economic effect and cost. Neither is a human simply matter (as viewed in a communist system), just one aspect of nature, nothing more. A human is in fact someone composed of organic needs and instincts, all of which requires answers on how to satisfy them.

This economic system is built upon three principles:
1. Ownership
2. Disposal of ownership
3. Distribution of wealth amongst the public

However, economic science is left untouched to avoid interference in the production of wealth and let that be driven by human curiosity and quest. There are no rules on economic science since it is dependent on scientific advancement of society.

It has to be recognized that humans will undertake a number of actions to survive. These range from the buying of food, taking ownership of property, selling goods, investment, agriculture, taking loans, exchanging currency, taking up employment and giving work, setting up a company, importing and exporting abroad, disposing of assets, etc. Hence, the economic system has to put forward clear rules to seamlessly facilitate acquisition of goods and services (ownership). And the means of ownership/ possession are limited to just five which are:
1. Work
2. Inheritance
3. Obtaining wealth for the sake of life
4. State granting wealth to the citizens
5. Wealth and commodities that individuals take without exchange (gifts, donations and the like)

It cannot be claimed that this framework is restrictive and hinders economic activity because it has rigid rules, which cannot evolve with time as economic activity increases and changes via the invention of new technologies. This is because humans want to own things in order to survive.

This system will bring in equality and bridge the gap between the haves and have-nots while ensuring fundamental rights for everyone (no exception whatsoever). One emerging trend we are seeing in the world is homelessness. Current sociologists and economists, both capitalist and communist alike, try and explain the causes of homelessness: poverty, mental illness, disability, unemployment, alcoholism, drug abuse, domestic violence and so on. And after hundreds of years, it is clear that all the “political solutions” have not ended this misery.

The calamity of homelessness, it seems, is one of the defining features of current economic systems, and one of the bitter prices paid for the delusion of freedom, wherein the weak must sacrifice their material wellbeing for the benefit of the strong. It seems like freedom in a democracy means the freedom to be able to fail, and to suffer a life of great hardship, alone and destitute in the streets of the worlds’ richest and busiest cities.

When are Social Security numbers required?

May 4, 2012 1 comment

This is from a Herb Weisbaum article on MSNBC (article link).

Since I had the very same questions… I found this very useful and so am sharing for the benefit of others.

I previously wrote about why a medical office would require a Social Security number , but readers reacted with a slew of more questions regarding that coveted piece of identification. Nan in Oregon wants to know who else can ask for it, Jerry in New York wonders if he could be discriminated against if he doesn’t reveal his Social Security number, and one reader may have just been duped into giving it out.

You wrote about giving out Social Security numbers at doctors’ offices. Who else can ask for this information?

Any business can request your Social Security number, but that doesn’t mean you are legally required to give it to them. Here’s the problem: Social Security numbers were never meant to be a personal identifier, but they’ve become just that. Ed Mierzwinski, Consumer Programs Director at U.S. PIRG, points out that “there is no law that prevents a business from discriminating against you or not doing business with you, if you do not provide the requested information.”

There are certain times when Social Security numbers must be used. This is not a complete list, but here are some of the major situations when they are required:
– Most financial transactions
– Employment records
– Tax returns (federal and state)
– Medicare benefits
– Contact with the Social Security Administration
– Applications for a hunting, fishing or other recreational license.

Some states have their own requirements for providing Social Security numbers. For instance, in Washington you must list your Social Security number the first time you apply for a driver’s license. Federal law (The Intelligence Reform and Terrorism Prevention Act of 2004) prohibits states from displaying your Social Security number on your license or vehicle registration forms, but they can still collect this information.

Because the Social Security number has become a personal identifier, you will need to use it for many other transactions — basically anything that involves a credit check or background check. A potential landlord or prospective employer will probably request it. And anyone lending you money or extending credit will need it.

“We really are in a terrible situation today with the abuse and overuse of Social Security numbers,” says Beth Givens, director of the Privacy Rights Clearinghouse. “Just try getting a credit card or insurance without providing your Social Security number,” Givens says. “You’ll also need it to get a professional license and to apply for college.”

You may even be asked to provide your Social Security number when starting utility or cable service. Before you give it out, ask if you can provide some other form of identification, such as your driver’s license number. They may be willing to accept it if you prepay the first month’s bill, which is the law in California. For people who live in other states, you may need to talk to a supervisor to make this happen. A driver’s license number is much less useful to an identity thief than a Social Security Number.

I’d like to know why credit card companies want my SSN. You must give it to them or you cannot open an account. I only give my number to companies that will pay me interest; not vice versa.

The bank or store issuing a card wants to check your credit history to see what sort of credit risk you are. They’ll also want your credit score to set the initial interest rate. If you have a good credit score you’ll get a lower interest rate than if you have a bad score. This may not seem fair, but it’s how the system works. You may be able to find a bank that will give you a card without requiring your Social Security number — if you provide other identification –- but I don’t know of one.

Can you refuse to provide a Social Security number on an employment application? Could this be a form of discrimination?

You aren’t required to provide your Social Security number, but there’s a very good chance you’ll eliminate yourself from consideration if you do not. The potential employer probably wants to do a background check on you and that’s easier to do with your Social Security number. Asking for this information is not a form of discrimination.

During a routine traffic stop, the officer looked at my driver’s license and then requested my Social Security number? Why would he need that and do I have to give it to him?

I contacted a couple of police departments and was told there are several reasons why an officer might ask for a Social Security number, and they all involve making a positive identification. This can happen if you have a common name, if the officer believes you are giving false information, or if the police computer indicates there’s a warrant out for your arrest. The officer will want to use a second form of identification (your Social Security number) before making an arrest. In these situations, if you decided not to provide the requested information, you could find yourself in the back of a patrol car headed to the police station.

Recently Verizon Wireless wanted my Social Security number before I could get cell phone service. I refused. Can they do this to me? Should I sue them?

Yes, they can do this. No, you shouldn’t sue them. Verizon wanted your Social Security number in order to do a credit check before giving you service. This is a common practice in the cell phone industry because they are extending you credit, allowing you to make calls each month and run up charges before your bill arrives. Verizon Wireless spokesperson Georgia Taylor says there is another option. “You can go with a pre-paid phone that lets you buy a specific number of minutes in advance,” she says. With these pay-as-you go plans, the phone company does not need to check your credit, so you don’t have to provide your Social Security number.

I called the toll-free “opt-out” number to stop the avalanche of unsolicited credit card offers I get in the mail. I was asked to leave my Social Security number on an answering machine. I am very leery about giving my Social Security number to anyone and now machines are asking for this information. What a joke. I will contact the credit bureaus via U.S. mail.

I understand your concern and I know this seems rather strange, but this is actually how the opt-out program works. The major credit bureaus run this program that lets you make one phone call to stop most pre-approved credit offers. The number is 1-888-5-OPTOUT (1-888-567-8688). Because the credit bureaus identify you via your Social Security number, you need to give them that number if you want to opt-out.

Even if you write, you’ll have to give them your Social Security number. I think as long as you initiate the call to this opt-out line, it is not any riskier than sending that information in writing. By the way, I called the opt-out line many years ago and saw the credit card solicitations drop dramatically after just a few months.

One downside to this program: it won’t stop the hotels and airlines you do business with from sending pre-approved credit card applications. I find that highly annoying. I get mail I don’t want and it increases my chances of being the victim of identity theft. I wish these travel companies would join the opt-out service and respect my wishes to not get these unsolicited offers.

I recently purchased something over the Internet and used my credit card. They asked me for the last four digits of my Social Security number. Is this common or am I being set up?

This sounds very strange. You do not need to provide your Social Security number or any part of it when using a credit card and I cannot see any reason why a merchant would need this information in order for you to make a purchase. Jay Foley at the Identity Theft Resource Center says they’ve heard about this and advise people that “no legitimate companies are doing this.” Chances are you’re being set up for some sort of scam or identity theft.

Call your credit card issuer right away and have the account closed. You should also contact the big three credit bureaus and put a fraud alert on your credit file. If you live in a state that lets you put a security freeze on your credit file, I would do that. You might want contact the Identity Theft Resource Center at 858-693-7935 where a real human can give you some help with this.

World-changing men don’t change diapers??

April 21, 2012 2 comments

I just happened to come across a Forbes article with the same title (article link).

While it is such a shame that influential men who made it to Time 100 didn’t talk about their “other” role or didn’t feel important, this article also brought to my mind a more important issue… How should working dads balance their professional and personal roles better?

I am a proud father of a 15-month old and am embarking on a consulting career. The onus is on me to create my own professional life which provides me a good work-life balance. There is no cookie-cutter approach whereby I could talk to a few colleagues and then pin down on one colleague’s approach as mine. Circumstances are very case-based. And with changing circumstances comes changing priorities. I have realized that it is important to prioritize and then set appropriate expectations both at work and at home. This way, you keep both parties happy!

As for a working dad’s role at home, if the mom is also working, parenting has to be shared “equally”. Even if the mother is not working, I see huge joy of parenting in parenting teaming up and spending time with the kid(s). For example, I could see one parent cooking while the other helping with feeding the kid. Or one parent giving the kid a bath while the other preparing the clothes and other stuff for the kid. And it is important for both parents to jointly spend significant time with the kid and help with learning/ playing. At the end of the day, kids draw on their life lessons from parents’ actions.

Talking about parents’ actions… it was just yesterday when on our drive back to the hotel after visiting a friend’s parents, me and my wife were talking about how gracious and courteous my friend’s parents were and that their nature/ character very clearly showed up in their son. And in the same vein, my wife mentioned being at the airport in Riyadh and seeing a Saudi family with 4 children… who were so well-mannered that when my kid went towards those kids, they were so gentle and caring. Just goes on to show, how the parents behave with them at home and how they act with others. And just to drive home the point, I personally learnt a lot from seeing my dad help mom with household chores every weekend he was home… and in a way, I have tried to emulate that with my wife.

At least I wanna be one world-changing man who is proud to have changed the diapers also!

Putting the ET article on “Double MBA” into perspective…

March 23, 2012 3 comments

Ever since this article was published in the Economic Times today morning featuring my story… I was surprised to see so many compliments coming my way and not to mention, some brickbats in the general media.

In all this unnecessary attention, I think the whole message was lost and hence I found it important to put things into perspective.

Pursuing a second MBA is not prescriptive for everyone but is very circumstantial – dependent on what career aspirations one has, their journey thus far, and its timing. If someone has graduated from IIM and have got into a career that he/she is satisfied with and see no reason to accelerate or change anything about it, there is no question of even considering another education stint. However, if someone feels the recalibrate their careers and update their management toolkit (this is often the most important reason for people in the current times), then MBA or maybe another specialized masters might be the way to address that.

Also, it is no way to question the caliber of IIMs. As I have professed time and again, IIMs do a great job at what they are designed to do. And in no way is it an apples-to-apples comparison to peg them against the ivy league schools. Each system serves a different purpose based on different fundamentals. IIMs are there to take in fresh undergraduates and equip them with a broader management toolkit that is more general in nature and softens their technical skills from undergrad. And sometimes, that isn’t sufficient enough to propel one all through their careers thereby meriting a second stint to build an advanced toolkit. In contrast, international business schools assume that incoming students have that general management toolkit through their pre-MBA careers (often 4-5 years of work experience on average) and that they need to bridge that gap required to get into a specialized management role. You can refer to my other article dedicated to this conversation: IIMs vs. Ivy League MBA Programs

A constructive inference from this news article (which I would have expected from the article author) should be that:
(a) MBA aspirants who haven’t embarked on this journey should understand the differences and make the right judgment – get to IIMs right after undergrad or work for a few years and then explore international schools;
(b) Professionals who already have an MBA can see this as an option ahead of them to recalibrate their careers, only if necessary.

Finally, this isn’t a new trend at all… there are a number of IIM graduates who have been going the “Double MBA” route. One such instance has been Pepsi’ Indra Nooyi going to Yale after her first MBA at IIM Calcutta.

In response to the Economic Times article titled Road to successful global careers: ‘Double MBA’ is becoming the next big tag