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IAC: Opacity is bad strategy!

As an IAC supporter, I know that IAC is deliberately non-transparent about its internal discussions. Ignoring the moral issues (all is fair if it helps India) and knowing that most IAC folks genuinely want good for India, I argue that non-transparency is a bad strategy for IAC in its goal to free India.

Example: Should IAC release to its supporters and public video recordings of core committee meetings (with sensitive discussions removed in rare cases)?

Arguments against transparency and rebuttal:

1.      Forces democracy: Arvind Kejriwal has contributed the most to IAC and he is the best. Transparency forces decision-making by majority votes – one vote per person. AK deserves a greater say and rightly does not like this. So, he tries to control by having yes men around him and by being non-transparent.

Better to have transparency and give more than 1 vote to AK (or anyone who contributes more). Internal democracy does not mean equal voting rights…it means voting rights in proportion to your contribution just like shareholders who own more shares have more votes. Similarly, instead of getting an unfair veto power. Anna should have more votes.

2.      Reveals our strategies: I was with IAC in August 2011. Government was very vindictive and, even in Mumbai, we assumed that all our conversations were recorded. Yet, we simply did not alter our actions since there was nothing to hide. Operational stuff like planning of surprise actions can be hidden.

3.      Eliminates spontaneous emotional response from people: Everyone knows that part of the popular emotional surge in August was due to government’s stupid behavior. IAC hopes to re-create those emotions, force govt to do similar mistakes by sensationalizing things & keeping their cards closed. AK’s high pitched fast and sudden announcement to enter politics were arguably part of this strategy. Subjective but my view is the attempt actually backfired and one cannot ‘create’ August-like atmosphere. It just happens.

4.      Shows that we have differences: It is actually a good thing. People on both sides of an argument will know that there is somebody arguing for them and raising the points they want to. Media can sensationalize differences only if we fake consensus. Having differences does not stop us from voting, arriving at a majority decision and presenting a united face. We will be in a better position to counter opposition by showing that we have duly considered both viewpoints.

5.      Shows that we ‘fight like cats and dogs’, are ill-prepared, etc.: Yes, transparency highlights all our weaknesses but it also forces us to behave and shape up. It allows our supporters to help us overcome our weaknesses. Those members who refuse to learn will rightly stand exposed.

6.      Prevents members from speaking their mind: Transparency only forces one to think before he speaks. One can still speak his mind but will need to speak coherently, avoid loose talk or tall claims, differentiate between opinion, rumors and fact, etc. Difficult initially but improves discussion quality and communication skills.

7.      Encourages playing to the gallery and populist arguments: Transparency gives an opportunity to other members to explain why an argument is without merit. Deliberate misleading becomes easier to identify; one should call the bluff and get rid of such members.

8.      Our ignorant / foolish / status-quoist population does not deserve transparency: Transparency will educate and win over many people and those people will gradually educate and win over the rest. In any case, how does opacity help to keep the skeptics on our side?

Ultimately, the case for transparency is obvious (see this link) and I am nobody to preach transparency to AK (who worked on RTI that mandates extremely high levels of transparency). Everyone believes in and many struggle for transparency. Unfortunately, most gradually become secretive once they become ‘insiders’. Sometimes its ill-intent but, more often than not, its fear of losing control or failure to put oneself in the shoes of ‘outsiders’ who need and yearn for transparency.

The most arrogant and secretive folks like Sibal, Khurshid, Chidambaram, Mukherjee or any other ‘educated’ politicians or journos like Karan Thapar, Rajdeep, Barkha were not born this way. Infact, they have been our hope and heroes in the past; power and proximity to power has done this to them and they do not even know they are causing such great harm to the nation they still love.

For the sake of millions of suffering Indians, let us hope and pray that IAC, which promises a ‘different’ type of political party, is indeed different!


IAC: Arguments in favour of transparency

1.      Some IAC member may, either by mistake or by choice, present wrong facts or hide material facts before the committee. Transparency will reduce this since others can correct him later.

2.      The committee may misinterpret or miss certain facts or certain aspects of the issue. Transparency will allow the public/supporters/critiques to point deficiencies, contribute new ideas and improve decision-making.

3.      Encourages / forces members to prepare well for discussions, contribute more and behave.

4.      Transparency forces committee to take note of and punish deliberate/repeat mistakes instead of hiding/ignoring them. Infact, it also empowers the committee to punish mistakes since there will be less controversies or manipulations around what actually happened.

5.      Educates the supporters, general public and the media about various facts, issues and pros and cons of various solutions

6.      Less speculation or rumors or lies about what happened and who said what at the meeting

7.      Inspires confidence and removes doubts that there is some personal hidden agenda or manipulation or high command culture or dictatorship. The decision to contest elections infuriated many hardcore volunteers. Many of them agree with the decision but have problems with the non-transparent and undemocratic manner. Many of those who disagree with the decision assert that they would have been fine if it was a transparent and democratic decision. IAC leaders have had to spend a lot of time trying to explain the motives, etc.

8.      Helps take positions on complex issues. 2 or 3 broad views possible on almost everything. IAC has to take one of the sides just like any other party (and risk losing supporters). ‘Different’ type of politics requires taking similar decisions but transparently and democratically

eg: Many people (including me) believe FDI in retail is good while many (including Arvind Kejriwal) genuinely opposed it. I wondered about the logic and if AK or core committee or a sub-set took this decision. A transparent decision would have changed my position or atleast made me comfortable.

9.      Pressurizes/sets an example for other parties/organizations to follow suit.

How should Team Anna enter politics?

This is a discussion draft. Invite suggestions.

Suggested way forward:

  • Form a political party (‘Swaraj party/andolan’)
  • Recognize/openly admit that we are too young to have enough good leaders, organization base, mass presence and money power to win/form government on our own. (To win in any constituency, you need 35-40% of votes!)
  • Since we can’t be the ‘king’ (govt. is the ‘king’ in current unfortunate system) and changing the king is anyways not the aim, we should try to be the ‘kingmaker’ (political pressure group) atleast in the immediate term

A political pressure group can work in 2 broad ways:

  • Pre-elections outside legislature: Campaign in most constituencies in favour or against particular parties or candidates and ensure good people win
  • Post elections inside legislature: Focus on winning 5 to 10 % of seats in parliament / state assembly and help one of the large parties in forming a stable government in return for clean governance

Swaraj party should adopt a combination of both approaches. Its best leaders to contest in some seats where we expect good support. In other seats, campaign for a decent party / good candidates and help them win.

Other points:

  • Target/focus on upcoming assembly elections in HP (or Gujarat)
  • Challenging but Swaraj party needs to maintain its anti-corruption focus/identity and, at the same time, transparently decide and communicate certain broad principles/policies it stands for: eg: Complete Transparency, Maximum Decentralization, Lokpal and anti-corruption, More democracy by means of electoral reforms, Judicial and police reforms, Individual liberty, Press independence, etc.
  • Above principles like transparency and decentralization should apply to the party (not just governments). Infact, the party and its leaders should meet higher standards to win popular support. Increase in popular support due to higher standards being followed by Swaraj party will also pressurize other parties to adopt some good practices. This, in itself, will be a huge victory.
  • Bring various other political and pressure groups on board by being receptive to their ideas and moulding ours, if appropriate. Be firm on rejecting ideas that are clearly bad.
  • Best leaders: Recognize that only known faces are  likely to win. Given that Anna won’t contest, we should ensure that atleast the rest of the top leadership is willing to put reputation on stake and contest. Convince celebrities like Anupam Kher, Shekhar Kapur to come forward to contest/campaign
  • Supporting good candidates vs supporting parties: On seats that Swaraj party itself does not contest, finding enough candidates who are ‘good’, willing to contest and ‘known faces capable of winning” is very tricky. Selecting candidates to support will be controversial and split supporters. Also, power eventually resides with parties and not candidates. Hence, we should consider pre-poll alliance with existing parties (even if they are not totally clean). This party can support us in the seats we contest on and we can support them in the other seats. Post elections, it is not necessary for Swaraj party to do what its allies do. It can support any party to form government as long as clean governance is first promised and then delivered.

Come on Team Anna….please do this!

Let’s say India Against Corruption (‘IAC’) wants to prevent people with pending criminal cases from becoming MPs/MLAs.

This is how it can do this:

Announce that IAC will positively campaign for ANY political party that gives tickets to the least number/percentage of criminal candidates in the 2012 Himachal assembly elections.

For starters, not many can criticize such a positive move.
Will Congress/BJP play ball?
Criminal candidates get party tickets because parties expect a net positive impact on their win prospects (either because of money, muscle power or caste equations). IAC’s campaign support for clean candidates can tilt the balance and make the criminal candidates a net liability for the parties.
Hopefully, both BJP and Congress will want IAC support. Atleast, they will want to avoid IAC campaigning for the other party. They get IAC support simply by fielding less number of criminal candidates vs. the other party. Not a bad deal!
One party reducing criminal candidates will force the other party to do the same (to keep its image). Might create a positive race among the parties instead of the current race to the bottom.
If both parties snub IAC thinking it can’t swing votes, then IAC should support one of the smaller parties and prove itself. I see no reason for smaller parties to reject IAC support.
Can IAC succeed?
Ultimately, the success of this strategy depends on IAC’s ability to increase vote-share and no. of seats for the party it supports.
If IAC can swing even 3% of total votes towards its partner party, the no. of seats can change meaningfully. The average % vote difference between the winner and 1st runner-up in any constituency is not more than 5 to 7%.
Like competition in a free market, this can change things rapidly
Reducing criminal MLAs in Himachal might seem like a small start but the key is to establish a replicable and scalable model.
IAC success will encourage other citizen groups to improve and use this model in all elections and to achieve various reforms. People will realize the power of getting/voting together to influence issues. We can use our existing representative democracy to move to a true participatory democracy.
Competition among various citizen groups will keep IAC in check and force us to continuously improve.
IAC owes this to the nation!
IAC is in a unique position to establish this model. IAC is well known, has some popular support, has funding, strives for change and is not power-hungry.
I am a passionate IAC supporter and I urge IAC not to squander this once-in-a-life time opportunity.
IAC’s other options?
1) Fasting, etc:  Awesome to create visibility and awareness but fails to achieve tangible change
2) Contesting elections / supporting independent candidates:
  • contesting elections or even identifying clean and capable candidates will divide us, create controversies & deflect focus from real issues. IAC lacks organizational depth / structure to handle these
  • most independents and IAC leaders (except top few who won’t contest) will lose (need ~40% votes in a constituency to win)
  • history (BJP, Mamata, etc.) repeatedly shows that getting power is a long process and people change by the time they get power. IAC’s troubles already indicate we’ll be no different
  • winning an election is not a replicable model
Poor governance frustrates us but aiming for instant/complete relief by trying to become PM/CM is the most common  mistake that clean, inexperienced guys do. Our first past the post system requires us to work with the big parties. Congress is a pro at this game and it wants us to do the mistake of going solo against them.
If IAC campaigns well but fails to create impact, then
  • people do not mind criminal candidates (either live with this or educate the people); OR
  • IAC does not enjoy any popular support…it should reform itself and come back!

Instead of all this, shouldn’t we ask for Lokpal / other reforms?

Govt. won’t/can’t implement any meaningful reform. IAC has to prove its electoral relevance and push / empower the govt. to implement those ideas.

Stimulus, Austerity, Reforms or Reality!

How to avoid / get out of economic crises:

Irresponsible people advocate stimulus i.e. low tax rates and high govt spend

Responsible people advocate austerity i.e. high tax rates and low govt. spend

What we need is capitalism / small government i.e. low tax rates and low govt. spend

What we get from politicians is socialism / big government i.e. high tax rates and high govt. spend 😦

How could Greece borrow so much?

A single currency (like Euro) should have kept Greek sovereign debt in check. 

Without ability to print money, the government’s debt is no longer risk-free. This ensures (should ensure) that markets lend less money to Greece at high interest rates.

How did Greece manage to borrow so much?

India’s state of Bengal is in poor financial shape.

Depsite India’s fiscal union, Bengal’s inability to print money and lack of a central guarantee limits its debt (its Debt to State GDP is only ~ 50% and still it cannot borrow anymore).

Greece, despite poor credit worthiness, could borrow so much (Debt to GDP close to 200%) at low interest rates for 2 reasons:

  • Greek central bank regulations required Greek banks to load up on sovereign debt even though it was not safe
  • Eurozone politicians kept lying to the markets that no Euro country can/will default.

As a result, immediately after Euro introduction, the significant spreads between Greek & German sovereign debt simply vanished due to this ‘guarantee’.

Greece is now crashing since Germany has rightly shown reluctance to honor this guarantee. Honoring this guarantee requires massive money printing (inflation) effectively redistributing wealth from savers (Germany) to borrowers (countries like PIIGS). Germany may choose to do so (effectively become one nation) but there is no compulsion and it will only avoid explicit default. It will NOT make Greece productive.

See why Greece should default and remain within the Euro.

Euro is great but the politicians are killing it!

India’s Bengal is effectively in a monetary union without a fiscal union since India’s Central Govt. is refusing to bail out Bengal. Should it exit the Rupee and print its own currency? Thankfully, the unanimous answer here is No.

Similarly, Euro (a monetary union without a fiscal union) is fine. While Greece has to default, it should remain within the euro.

How can an unproductive Greece recover without devaluation?

Greece govt should restructure/default on most/all of its debt and firmly declare that it will NOT quit the euro (it does not need anybody’s permission to do this). Consequences (this is already happening in slow motion):

  • Lack of funding will limit the Greek govt’s spending to available tax and non-tax revenues.
  • To spend, politicians will be forced to reform the tax system and privatize (if they are smart, they will also deregulate, cut tax rates and encourage GDP growth)
  • Many Greek banks that have lent too much to the govt. will face a run and fail.
  • There will be unemployment, under-utilization of other factors of production like land, fixed assets and capital, susbtantial drop in discretionary spending as well as imports.

The good news

The ‘banking system’ will continue to function.

  • Deposits (and other paper assets) are currently leaving Greece for fear of being redenominated to Drachma. Once the threat of Euro exit is gone, deposits (and other banking activity) will stay within Greece but will leave ‘weak banks’ and move to local branches of strong (local, european and global) banks.
  • The weak banks’ shareholders will lose their investment but its creditors, strong banks and/or other investors will acquire/restructure (the assets of) these weak banks and run them.

The above is already happening.

The really good news

Productivity will increase due to fall in prices, rents, interest rates and wages.

  • Low costs of living and doing business will retain/attract local and foreign talent, capital, etc. The immense benefits of Euro/EU (single currency, free markets, capital and labour mobility, etc.) will strongly facilitate that.
  • When a country tries to print / devalue its way out of trouble, it experiences inflation.

The KEY:   Financial crises generally mean inflation but, for Greece, Euro will ensure deflation!

In a world of no bailouts and no inflation, hardworking Greeks will do well even if the Govt goofs up. Deflation will improve productivity and ensure high value for the low income and savings. (The govt. can also help this recovery by swift deregulation making it easier to do business in Greece. In any case, its ability to do damage will be curtailed.)

No doubt, there will be pain for unfit individuals, businesses and govts. in Greece (and other euro nations) but its unavoidable and default within the Euro will remove excesses in the system and incentivize everyone to shape up.

Also See: How did Greece manage to borrow so much money in the first place?