Carpe Diem

Globalization’s Creative Destruction and The Fate of Letter Writers in India

G.P Sawant, a professional letter writer in Mumbai for 25 years, is a winner and loser due to globalization. Mr.Sawant had made a profession out of writing more than 10,000 letters in Hindi for the poor and illiterate, who often traveled miles to the city to get letters written by him. With the telecom revolution, the price of telecommunication has dropped and his customers now use cell phones and ubiquitous telephone booths and stands. Mr. Sawant hasn’t written a letter now in three years.

But the same telecom revolution that effectively killed Mr.Sawant’s business has created an economic wave for his children’s generation to ride. In the very years that the telecommunications revolution was squashing the letter writing business, it was plugging India into the global networks that would allow its IT industry to explode. Mr. Sawant’s daughter works for India’s IT giant Infosys and earns $9,000 per year, three times as much as her father did at his peak.

Read more here in the NY Times, and watch a video here.

(HT: Sanil Kori)

Carpe Diem

Cartoon of the Day and Mencken’s Political Wisdom

H.L. Mencken is often regarded as one of the most influential American writers of the early 20th century. Here are some of his quotes on politics, democracy, government and elections.

1. Every election is a sort of advance auction sale of stolen goods (see cartoon above).
2. A good politician is quite as unthinkable as an honest burglar.
3. A politician is an animal which can sit on a fence and yet keep both ears to the ground.
4. Democracy is a pathetic belief in the collective wisdom of individual ignorance.
5. Democracy is also a form of worship. It is the worship of jackals by jackasses.
6. Democracy is the art and science of running the circus from the monkey cage.
7. Democracy is the theory that the common people know what they want, and deserve to get it good and hard.
8. Every decent man is ashamed of the government he lives under.
9. If a politician found he had cannibals among his constituents, he would promise them missionaries for dinner.

Read more here.

Carpe Diem

Business is Booming at Orlando Theme Parks

The nation’s economic jitters that contributed to lackluster holiday retail sales in December seemingly failed to make a serious dent in year-end travel to Central Florida as theme parks filled and hotels had few vacancies.

Large hotels in Central Florida’s core tourist areas say they had no problem filling rooms during the final two weeks of December. Theme park parking lots swelled past capacity, and pedestrian concourses at Walt Disney World, SeaWorld Orlando and Universal Orlando resembled Manhattan sidewalks during rush hour.

The outpouring of tourists belied consumer concerns about an economy facing a significant housing industry slump, tightening credit markets and volatile financial markets. Hoteliers acknowledged the concerns, but those catering to the higher end of the market said they haven’t seen a pullback.

Read more of this Orlando Sentinel article here.

Carpe Diem

The Redolent Smell of Profits Crosses All Borders

From the FT article “US Studios Get Taste for Bollywood“:

International investors are preparing to make an unprecedented onslaught on Bollywood this year, with several Hollywood studios and a group of London-listed funds looking to take a share of the world’s most prolific movie-making market.

Studio groups such as Sony Pictures Entertainment, Viacom – which controls Paramount Pictures – and Disney are working on new releases and partnerships that will give them an entry into India’s once closed and idiosyncratic movie industry.

Bottom Line: As developing economies like India grow and prosper, and as their middle classes emerge with increasingly higher disposable incomes, they become increasingly attractive as profitable consumer markets for firms in developed economies like the US. International trade and globalization are win-win, not win-lose as you would think from Lou Dobbs and the media. The “smell of profits” has a strong odor, penetrates globally across all international borders, and U.S. studios have picked up the redolent scent of profits in the booming Indian movie market.

Carpe Diem

Faux Populism

“You can’t create a job without a business. And unless an investor finances a business, you ain’t gonna have any jobs, you’re not going to have a middle class, and you’re not going to have any consumers. Therefore, this faux populism is a lot of crap.”

Larry Kudlow on tonight’s CNBC “Kudlow and Company,” in reponse to the anti-investor, anti-business, pro-government faux populism and political rhetoric of Huckabee and Edwards.

Carpe Diem

Is the USD Making a Comeback vs. the Euro?

Using foreign exchange data from FT.com, the chart above shows the one-year forward discount or premium of the USD vs. the euro from January 2006 to January 2008. (Mid-month rates were used for the months between January 2006 and December 2007, and yesterday’s quote was used for January 2008.) After trading at a one-year forward discount vs. the euro for at least 23 consecutive months, the dollar has been selling at a one-year forward premium vs. the euro for the last two months, and is now trading at a one-year forward premium of .40%. Over the last 6 weeks, the dollar has strengthened by about 1.5% vs. the euro in the spot market.

Carpe Diem

Homo Politicus: The Strange and Scary Tribes…

It’s a land where things are often not what they seem — at least to outsiders. They are, in fact, the opposite of what they seem. In his new book, “Homo Politicus: The Strange and Scary Tribes that Run Our Government,” Dana Milbank describes this place as Potomac Land, also known as Washington, D.C.

‘Potomac Land’ Speak Select phrases, followed by their English equivalents:

“You’re doing a heckuva job.”
You will be fired in ten days.

“Frankly…”
The following statement is false.

“You are either with us or against us.”
You are against us.

“The senator will deliver a major policy address.”
The senator is desperate to get on television.

And my favorite:

“I will continue to do the people’s business.”
I expect to be indicted.

From a story this morning on NPR.

Carpe Diem

The Coen Brothers’ Green Guilt and Their Purchase of Eco-Indulgences: The Eco-Extortion Scam

The credits of the Coen brothers feature film “No Country for Old Men” state that the film’s production was “carbon neutral,” thanks to carbon-offset credits purchased through Native Energy.

From the September 2007 LA Times article “Can You Buy a Greener Conscience?“:

The race to save the planet from global warming has spawned a budding industry of middlemen selling environmental salvation at bargain prices. The companies take millions of dollars collected from their customers and funnel them into carbon-cutting projects, such as tree farms in Ecuador, windmills in Minnesota and no-till fields in Iowa.

In return, customers get to claim the reductions, known as voluntary carbon offsets, as their own. For less than $100 a year, even a Hummer can be pollution-free — at least on paper.

Driven by guilt, public relations or genuine concern over global warming, tens of thousands of people have purchased offsets to zero out their carbon impact on the planet. Beneath the feel-good simplicity of buying your way to carbon neutrality is a growing concern that the idea is more hype than solution.

In this related commentary “Carbon Offsets: Eco-Extortion, Green Guilt, and the Selling of Indulgences,” Frank Pastore writes:

The selling of “voluntary carbon offsets”—eco-indulgences—is a $55 million per year industry, involving over three dozen companies worldwide. Total sales are anticipated to double both this year and next, and entrepreneurs are clamoring all over themselves for a piece of the action.

And it’s all a scam.

Yes, the money is very real, but the alleged benefits to the environment are fake. Paying someone to plant a tree to “offset” the carbon footprint of your SUV is just plain silly. Yet there are thousands of people spending real money on these kind of indulgences every day.

Why? The answer is that it’s part green guilt, part eco-extortion, and part just plain novelty.

MP: Both articles point out this part of the scam: Native Energy and other companies selling eco-indulgences often contribute only 1% of the total cost of windmill projects and alternative energy plants, yet they claim and sell 100% of the carbon reductions.