Carpe Diem

India, Inc. Fights Back Against Anti-Outsourcing Rhetoric With Full Page Ad in Chicago Tribune

1. CHICAGO: India Inc., which is facing the heat from U.S. Presidential candidates who blamed ‘shipping jobs’ to China and India for rising U.S. unemployment, has launched a counter-offensive here telling Americans that the industry is creating new work opportunities for them and “gifting” thousands of jobs to Americans and not “stealing” them.

A full-page advertisement in the Chicago Tribune on Tuesday, by industry body FICCI (Federation of Indian Chambers of Commerce and Industry), gives an elaborate account of how the legendary Tata Group, along with several others like Ranbaxy, Mahindra USA, Bharat Forge, ITC Kitchens of India and HCL America have created thousands of jobs in America by investing in different sectors of the US economy. According to FICCI, Indian corporate investments in the U.S. were over $10.25 billion in 2007.

2. Watch a video here from India Reuters on India Inc.’s ad.

3. The Chicago Sun-Times and more than 70 sister newspaper titles throughout the metro area have entered into an agreement to outsource most of its print and online ad production. The outsourcing agreement with Elgin-based Affinity Express Inc. is expected to reduce operating costs by $3 million a year at The Sun-Times News Group. Affinity, with production offices in India and the Philippines, was chosen because of its “extensive infrastructure and expertise in the field of advertising production for news companies,” including the Charlotte Observer and the Columbus, Ohio Dispatch.

Comment: Wouldn’t it have been ironic if the production of the FICCI’s full-page ad in the Chicago Tribune had been outsourced to India?


It’s possible the only way that the U.S. newspaper industry can remain profitable and survive in the future is with increased outsourcing to India? In other words, although some ad production might be outsourced to India, those outsourcing efficiencies and cost savings might end up helping to save thousands and thousands of U.S. newspaper jobs.

Carpe Diem

Body Count: 85-100 Million Dead From Communism

The Black Book of Communism: Crimes, Terror, Repression” documents communist crimes against humanity, but also crimes against national and universal culture, from Stalin’s destruction of hundreds of churches in Moscow to Ceausescu’s leveling of the historic heart of Bucharest to the widescale devastation visited on Chinese culture by Mao’s Red Guards.

As the death toll mounts—as many as 25 million in the former Soviet Union, 65 million in China, 1.7 million in Cambodia, and on and on—the authors systematically show how and why, wherever the millenarian ideology of Communism was established, it quickly led to crime, terror, and repression. An extraordinary accounting, this book amply documents the unparalleled position and significance of Communism in the hierarchy of violence that is the history of the twentieth century.

Essentially a body count of communism’s victims in the 20th century, the book draws heavily from recently opened Soviet archives. The verdict: communism was responsible for between 85 million and 100 million deaths in the century.

HT: NCPA

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Stagflation Update: Monetary Base

Stagflation update: the chart above compares the growth of the monetary base during the peak of the stagflation period of the 1970s (the 85 month period from December 1974 to December of 1981) to the growth of the monetary base over the last 85 months, from January 2001 to January 2008. (The monetary base is set to equal an index value of 100 in the beginning month of each sample period.)

Notice that there is a significant difference between the two periods: During the 1970s, the monetary base grew by more than 70%, compared to less than a 40% growth during the last 7 years.

Bottom Line: The money supply data (M1, M2 and monetary base) don’t support the position that we are entering a period of 1970s-like stagflation.

Carpe Diem

Stagflation Update: M2 Money Supply

As an update to this CD post on stagflation using M1 money supply, the chart above compares the growth of M2 during the peak of the stagflation period of the 1970s (the 85 month period from December 1974 to December of 1981) to the growth of M2 over the last 85 months, from January 2001 to January 2008. (M2 is set to equal an index value of 100 in the beginning month of each sample period.)

Notice that there is a significant difference between the two periods: During the 1970s, M2 grew by almost 95%, compared to a 50% growth during the last 7 years.

Bottom Line: The money supply data (M1 and M2) don’t support the position that we are entering a period of 1970s-like stagflation.

Carpe Diem

1970s Stagflation? Don’t Buy It for a Nanosecond

The topic of stagflation was discussed tonight on CNBC’s “Kudlow and Company,” and guest John Browne, former member of British Parliament and ultra-stagflationist, argued that we are facing a “far, far worse situation than the 1970s,” and further predicted that we are “facing a massive recession.”

Larry Kudlow disagreed, and said “Stagflation is a total canard.”

The money supply data support Larry Kudlow, not John Browne. The chart above compares the growth of M1 during the peak of the stagflation period of the 1970s (the 85 month period from December 1974 to December of 1981) to the growth of M1 over the last 85 months, from January 2001 to January 2008. (M1 is set to equal an index value of 100 in the beginning month of each sample period.)

Notice that there is a significant difference between the two periods: During the 1970s, M1 grew by almost 60%, compared to a 24% growth during the last 7 years. And for the last 3.5 years, M1 has been flat, with almost 0% growth!

Like Larry Kudlow, when it comes to stagflation, “I don’t buy it for a nanosecond.” Not gonna happen.

Carpe Diem

Get Over It MDs: Wal-Mart Is Good for Your Health

“The medical establishment is opposed to drop-in clinics in Wal-Marts and other retail stores. But self-interested doctors need to get over their archaic ways of doing business,” says Dr. Rahul K. Parikh, a member of the American Academy of Family Practice, and the American Academy of Pediatrics, writing in Salon.com:

The medical community needs a second opinion. Retail clinics are good for American healthcare. By giving doctors a run for their money, they force us to do something we don’t do well: innovate. At their best, retail clinics can make doctors look like smart entrepreneurs instead of a self-interest group futilely trying to protect archaic ways of doing business.

HT: NCPA

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The Decline of Detroit vs. the Rise of Indianapolis

Fifty years ago, Detroit was the fourth largest city in the United States, with a population of 1.7 million people, and at $8,500 per year, one of the richest cities in terms of per capita income. It was 3.5 times the size of Indianapolis, the 26th largest city, whose income was almost identical on a per capita basis (see population chart above, click to enlarge). Today, Detroit and Indianapolis are the 11th and 12th largest cities, respectively, with Detroit’s population cut in half from 50 years ago (and losing 3,000 people per year this decade), while Indianapolis has grown by 70% during the same time frame. Remarkably, Indianapolis now has a per capita income 50% greater than Detroit’s.

How did this happen? One answer, according to the Mackinac Center for Public Policy, is that Detroit’s city government is far larger, more regulation prone, and more bureaucratic than Indianapolis’s city government: the ratio of residents to city employees, a key measure of city government productivity, is 50:1 in Detroit, one of the worst in the United States, but is 203:1 in Indianapolis, one of the best. More broadly, the central issue in political economy concerns the optimal delineation of the sphere of government activity versus that ascribed to markets, and in this essay we examine this question from the vantage point of municipalities.

Another answer: Indianapolis Mayor Stephen Goldsmith took office in 1992, committed to a turnaround based on privatization of city services, and creating a climate more conducive to entrepreneurship. During his eight-year tenure as mayor, the city’s population increased by nearly 50,000 residents, induced by a more business-friendly environment and its corollary, smaller government. The Indianapolis turnaround was engendered via a three-part program that included privatization and transparency.

From “
The Privatization of Public Services,” by John Chapman of the American Enterprise Institute.
Carpe Diem

Emerging Markets to the Rescue

NEW YORK (CNNMoney.com)Personal computer and printer maker Hewlett-Packard reported strong gains in sales and earnings for its fiscal first quarter Tuesday, a sign that the tech giant is gaining market share against key rivals and that its cost cutting is paying dividends. Shares of HP surged nearly 6% in after hours trading.

For its first quarter, which ended in January, HP’s net revenue jumped 13% to $28.5 billion, ahead of the $27.6 billion that analysts were expecting.

The company said that 69% of its first-quarter revenue came from outside the United States. Revenue from emerging markets Brazil, Russia, China and India grew 35% from a year ago.