Business to the Buddha

Tag: recession

  • Fiscal Cliff – TRIZ solution







    Fiscal cliff? What’s that?

    I asked Professor Mankad (Sir). He explained it to me in detail. I loved learning that big picture from him. I must admire President Obama for the way he has put in his plan. Everyone in US Admin knows that “We are in trouble”. But how to get your idea win, should be learnt from Obama & Team.

    When Sir explained whole thing with immense patience, I thought about what could be the solution. Sir also suggested that  what are the possibilities and what could be the likely future? I felt – we are (going to be) in deep trouble. Sir suggested that this trouble could be even deeper, longer and disappointing than the 2008 melt down.

    I’m scared. For all such troubles I always look at the other side as solutions. OTHER SIDE here means socialistic approach to solving capitalistic problem. I smsed Sir – could “Sanjha Chulha*” be the solution? It would help provide few  jobs for people in Sanjha Chulha and reduce expenditure of unemployed on food. When that happens, Govt can reduce expenditure of unemployment benefits.
    *Sanjha Chulha means community kitchen.

    The other approach I thought was using TRIZ. Actually that is what Govt must be doing (without the jargon of TRIZ). Before discussing the solution framework, a brief on Fiscal Cliff (Details – About link and Wiki link).

    Fiscal Cliff – is a deep impact due in the budget of Govt. Because as per “Bush tax cut” (of 2003) the taxes would increase at the same time Govt has to reduce spendings e.g. unemployment benefits offered for 99 weeks would reduce to 52 weeks, defense budget reduce by say 50% etc. All of this would result in recession in the USA. The challenge for Govt is – how to control it? Fiscal Cliff is also a function of debt reaching a ceiling % of GDP.

    In TRIZ there is a solution type for such issues. That is named as physical contradiction, which means you want something and you dont want that at the same time. You want Tax cut and you dont want that. You want reduced expenditure but you dont want that.

    Simple solution is – “increase ceiling debt as % of GDP”. Other solution would be, TRIZ offers solution by separation principle.

    1. Separate tax collection based on condition. This is tried arguement is on tax ceiling (Obama says 400k, Congress says 1M).
    2. Separate tax collection based on organization vs individuals. In TRIZ it is kind of separation of parts Vs the whole.
    3. Separate tax collection on time. This separation could be coupled with solution 1.

    1. Separate spends based on condition. spend ceiling on spends of different types
    2. Separate spends based on community vs individuals. Healthcare Vs unemployment benefits
    3. Separate spends on time. Delay spends which could be avoided.

    For testing all these ideas a very simple mathematical model and “goal-seek” of Microsoft Excel can be used. (Though its not that simple – but who wants to complicate things? Objective is to simplify life) politicians/consultants like complexity, who can leverage it.

    Relevant news Euro debt reaching 90%

    Separation principle

    Related blogs –

    1. Double dip

    2. Euro is it dead

    3. Need of the hour

  • Where is growth?







    The mobile was ringing, suddenly phone was picked and the statement – wait! Mumbai Indians needs only 5 runs to win in last 6 balls. I said ok Sir I will call you in five minutes. The turmoil of thoughts continued in my mind. What am I thinking, what are the questions in my mind, so many things how do I connect all these dots etc. Mumbai Indians eventually won, Prof Mankad informed me in next five minutes.

    We started talking – the market is steady, if not bull than not bear too. Indian Prime minister and Finance minister both are making statement that “We are going to grow at 6.9% if not at 8%”. Still, there is some uncomfortable feeling. I told Prof Mankad, “Sir I am not convinced. Further to it I said – news is Facebook is licensing the AOL patents – owned by Microsoft now – for close to 550 million. Next thing which I forgot to ask him was – news of bribing in Mexico by senior executive of Wal-Mart. Wal-Mart was running behind growth – sometimes in 90’s – and got in this trouble recently when the case was surfaced. I further added that Italy and Spain are showing -ve growth (to be precise signs of recession), where is growth?

    As always these questions were simple to answer for Prof Mankad. What he said very closely resembled to my thinking of inclusive growth. He said – hold your horses, the questions are right, this growth is notional and specific to IT and finance industry, largely to few services industries so to speak. The questions are pertinent, sir said. If I remember correctly he also informed me that Italy not only Spain has declared recession, French election would surely put more light on the already tough Euro crisis. Sarkozy is likely to lose, and then there are more elections coming up in Europe e.g. Germany etc. Political parties in Holland have agreed on austerity measures. Growth would happen and thus recession would be arrested only once we see growth in all the industries otherwise we are in a bad shape. It is not possible to say that we are growing at so and so rate when only one or two industries are showing signs of growth.

    This reminded me of my most loved theory of the Buddha – Interdependent Co-arising. I have written on this often and the current situation shows us yet once again that we are all connected, nothing can be isolated and growth is a collection of small growth in each industry. Each industry is a building block for the overall movement of the engine of economy world across (with few riders). No China can survive without US or Europe, no India or Philippines can grow its service industry until there is overall growth in the demand of service industry in developed nations.

    Where is growth? There would be growth when we all learn that we need to think about each other and help each other grow – we are all interdependent and we would successfully grow only when we grow together.