So, the economic policy paralysis that critics castigate is no aberration: it is Najib political policy
After attacking politics for than a year, and spiritedly trying to prove that there was an alternative mechanism for bringing about change, Team Anna has crossed over to the other side. It wasn't left with too many options- the momentum in the movement had slackened, and public support, though present was not quite as visible. The media too, had shed its adulatory stance and had begun to view the movement with presumptive suspicion, brought about in part by the somewhat scattered actions and utterances of Team Anna and in part by the compulsions of the news cycle- it was time for a new version of an old story, and the failure of the movement made for better headlines. It was quite clear that regaining the influence that the movement once had would be very difficult, and yet it would be foolish to throw away the capital that had been accumulated by way of public support, hence the reluctant decision to plunge into politics.
The move has been greeted with smug self-satisfaction by the political class; after this been a victory enabled by tacit collaboration between apparent enemies. While it was the government that played the lead role in dreaming up ways fair and foul to discredit the movement, it was aided, when it came to the crunch, by the entire political class beginning with the BJP. The reasons for the smirks on the face of party spokespersons as they 'welcome this move' lies in the fact that Team Anna has moved into a terrain that is both treacherous and unfamiliar, and the parties know that. Winning elections in India involves much more than just popular support, and the possibility of power is a deeply corrupting incentive, as evidenced by the internal politics of most parties. More importantly, the smugness of the political parties is founded on the numerical vastness of the Indian electorate that dwarfs any seemingly popular upsurge by its sheer demographic muscle. What seems to be spectacular support on a television screen often shrinks into deposit-losing insignificance when translated into votes. In the past too, the kind of mass movements that have converted themselves into electoral victories are largely those that have used regional or sub-regional issues involving identity rather than those involving questions of governance. There is a danger that Team Anna may have overplayed its hand in making this move, particularly because this shift has happened at a time when the movement is not at its peak.
In a strategic sense, even looking back, the most important miscalculation made by the movement was in its not being clear about the role that it could possibly play. Structurally it was a numerically small group) that had managed to accrete disproportionate influence. It best bet was to be a catalyst from outside, rather than a direct agent. Team Anna mistook its indirect influence for its direct strength; it read its own success too literally. There was no question that the kind of power that it managed to garner for itself was unprecedented; it forced an entire political class to seriously examine a bill that it emphatically did not want. But the power it seemingly enjoyed was never really its own; the combination of Anna Hazare's persona, the anger of the middle class and the power of the media lent a disproportionate edge to the movement's influence. The need for change preceded the belief in Team Anna; Anna Hazare's key role was to look the part and that of the team was to keep the focus on a single issue, without allowing too many distractions. This did not happen partly as a result of the machinations of the government and partly because Team Anna just did not know how to keep quiet. Too many members said too many things, opening new fronts by the day, and making their own task that much more difficult.
The key issue was in knowing the limits of their influence. As this column has argued through the length of the movement, a little more flexibility shown by Team Anna would have gone a long way in scripting a different kind of ending. The radical idea that Team Anna was espousing was not, as it believed, the silver bullet called the Lokpal bill, for no one act of legislation can by itself bring about transformational change, but in the principle that legislative change can be brought about by the direct action of the people of the country and not only through its elected representatives. At a time when the political system has become a self-enclosed and self-justifying enclave that works largely for itself by using power as a license to rule rather than serve, and where there is little internal impetus for meaningful change, the idea that people can force the moribund system to act is a truly revolutionary idea. Team Anna's job was not to enact the law, for it could never do that, but to establish a new principle. Even if the law passed was not perfect, the journey would have begun. By overestimating its own role and pushing too hard in too specific a manner, the movement has reached a point where it now needs to participate in a game where outright victory is nearly impossible.
At this stage too, there is a critical role that the movement can play. If it makes peace with its role as a trigger for change rather than as its lead protagonist, , it can still act as a strong pressure group for transformation. It should not aim to necessarily succeed at politics, but to transform it by providing a benchmark that forces other parties to take heed and follow. Team Anna's role is not so much to win elections, but to change the way elections are fought and won.
The move has been greeted with smug self-satisfaction by the political class; after this been a victory enabled by tacit collaboration between apparent enemies. While it was the government that played the lead role in dreaming up ways fair and foul to discredit the movement, it was aided, when it came to the crunch, by the entire political class beginning with the BJP. The reasons for the smirks on the face of party spokespersons as they 'welcome this move' lies in the fact that Team Anna has moved into a terrain that is both treacherous and unfamiliar, and the parties know that. Winning elections in India involves much more than just popular support, and the possibility of power is a deeply corrupting incentive, as evidenced by the internal politics of most parties. More importantly, the smugness of the political parties is founded on the numerical vastness of the Indian electorate that dwarfs any seemingly popular upsurge by its sheer demographic muscle. What seems to be spectacular support on a television screen often shrinks into deposit-losing insignificance when translated into votes. In the past too, the kind of mass movements that have converted themselves into electoral victories are largely those that have used regional or sub-regional issues involving identity rather than those involving questions of governance. There is a danger that Team Anna may have overplayed its hand in making this move, particularly because this shift has happened at a time when the movement is not at its peak.
In a strategic sense, even looking back, the most important miscalculation made by the movement was in its not being clear about the role that it could possibly play. Structurally it was a numerically small group) that had managed to accrete disproportionate influence. It best bet was to be a catalyst from outside, rather than a direct agent. Team Anna mistook its indirect influence for its direct strength; it read its own success too literally. There was no question that the kind of power that it managed to garner for itself was unprecedented; it forced an entire political class to seriously examine a bill that it emphatically did not want. But the power it seemingly enjoyed was never really its own; the combination of Anna Hazare's persona, the anger of the middle class and the power of the media lent a disproportionate edge to the movement's influence. The need for change preceded the belief in Team Anna; Anna Hazare's key role was to look the part and that of the team was to keep the focus on a single issue, without allowing too many distractions. This did not happen partly as a result of the machinations of the government and partly because Team Anna just did not know how to keep quiet. Too many members said too many things, opening new fronts by the day, and making their own task that much more difficult.
The key issue was in knowing the limits of their influence. As this column has argued through the length of the movement, a little more flexibility shown by Team Anna would have gone a long way in scripting a different kind of ending. The radical idea that Team Anna was espousing was not, as it believed, the silver bullet called the Lokpal bill, for no one act of legislation can by itself bring about transformational change, but in the principle that legislative change can be brought about by the direct action of the people of the country and not only through its elected representatives. At a time when the political system has become a self-enclosed and self-justifying enclave that works largely for itself by using power as a license to rule rather than serve, and where there is little internal impetus for meaningful change, the idea that people can force the moribund system to act is a truly revolutionary idea. Team Anna's job was not to enact the law, for it could never do that, but to establish a new principle. Even if the law passed was not perfect, the journey would have begun. By overestimating its own role and pushing too hard in too specific a manner, the movement has reached a point where it now needs to participate in a game where outright victory is nearly impossible.
At this stage too, there is a critical role that the movement can play. If it makes peace with its role as a trigger for change rather than as its lead protagonist, , it can still act as a strong pressure group for transformation. It should not aim to necessarily succeed at politics, but to transform it by providing a benchmark that forces other parties to take heed and follow. Team Anna's role is not so much to win elections, but to change the way elections are fought and won.
Private eye P Balasubramaniam has emerged from hiding to drop yet another bombshell - that there was a second attempt to bribe him when he was in exile in India, this time to smear PKR de facto leader Anwar Ibrahim.
Speaking to Malaysiakini in an interview in Kuala Lumpur last month, Balasubramaniam claimed that he was approached about a week before the Sarawak state election in April last year.
"You know these guys, they already got ‘good news' from Perth and they needed more ‘good news' from India," said Balasubramaniam cryptically, though he declined to elaborate further.
At the time, the campaign machineries of both sides of the political divide had been in high gear as every and all possible means were being used to woo voters in the crucial state election.
It was also around this time Raja Petra Kamaruddin's interview with TV3, which was done during the controversial blogger's visit to Australia, hit the airwaves.
In the interview which was also carried by the mainstream TV stations, Raja Petra disavowed his statutory declaration (SD) linking Prime Minister Najib Razak's wife Rosmah Mansor to the Altantuya Shaariibuu murder case.
Raja Petra, who is in self-imposed exile in United Kingdom, alluded that his SD was based on information ‘planted' by PKR leaders desperate to prevent Najib, who was then deputy prime minister, from succeeding Abdullah Ahmad Badawi.
Bala keeps lawyer in the loop
In Balasubramaniam's case, the private eye claimed he was asked to implicate Anwar and PKR leaders of paying him to commit perjury in his 2008 SD linking Najib with murdered Mongolian national Altantuya.
He said he was approached by the same people who had threatened and subsequently paid him a substantial amount to sign a second SD to say that his first sworn statement was made 'under duress' - businessman Deepak Jaikishan (right) and a police officer by the name of Suresh.
A key figure in the controversy surrounding the murder of Altantuya, Balasubramaniam fled to India with his family after signing the second SD.
Apparently promised RM5 million for his about-turn, Balasubramaniam said he received a total of RM750,000, in instalments, before the payments eventually stopped.
According to the private investigator, he was contacted by Deepak and Suresh through a mutual friend, Siva, about one week before the Sarawak election.
Siva, a businessman, had called Balasubramaiam's wife at their home in India as the private investigator was at the time taking a former staff on a temple tour in northern India.
Balasubramaniam's wife was told that Suresh and Deepak wanted to speak to him and she relayed the message to him.
"I told my wife I didn't want to speak to anyone."
After she conveyed his response to Siva, Suresh subsequently called her repeatedly on the phone.
"They were ‘torturing' my wife like hell. My wife could not take the pressure."
To spare his wife the harassment by Suresh, Balasubramaniam said he finally agreed to speak with Suresh and Deepak, but only after seeking advice from Americk Sidhu, his Malaysian lawyer.
Video recording was to tarnish Anwar
Americk told him to play along, and to document the events as they took place.
"Speak to them, get whatever evidence... it's for your ‘insurance'," Balasubramaniam said his lawyer told him.
Suresh then contacted him directly, after his wife gave his phone number to the police officer.
He said Suresh told him: "This is the deal: RM200,000 cash and a condo in Berjaya Times Square and after this, after everything is okay, I'll let you come back, and then maybe we will give you a project."
When Balasubramaniam asked Suresh what they wanted in return, Suresh told him that they wanted him to read out a statement they had prepared and for this to be recorded on video.
Asked what the statement was about, Balasubramaniam described it as "tarnishing PKR number one (Anwar)".
Part of the statement that was given to Balasubramaniam states: "I had to change my second SD because I was approached by Anwar who convinced me that he will become the new prime minister very shortly."
It also says that Anwar gave him RM200,000 "in a bag" and that RM50,000 would be banked into his account monthly.
The statement adds that both Balasubramaiam and Padang Serai MP N Gobalakrishnan would be made senators "to safeguard the rights of the Indians", and that the private eye had finally decided to come out with the "truth" because Anwar had betrayed the Indian community.
Initially Balasubramaniam refused to record the video on his own. He asked Deepak and Suresh to fly to India together with TV3 andUtusan Malaysia journalists, and he would do as they asked.
However, after a whole day had passed and further negotiations took place - this time with Deepak himself - Balasubramaniam finally agreed to make the video recording after it was stressed upon him that they needed the footage urgently.
Suresh then banked in RM100,000 into an account in the name of Balasubramaniam's wife. Then, through Siva, Deepak and Suresh handed over a copy of a sale-and-purchase agreement for the Berjaya Times Square condominium.
However, Balasubramaniam said he played his trump card after leading both Deepak and Suresh on.
'Deepak's furious call recorded'
"It (the video) was ready, already keyed in, I just (needed to) mail it. What I did was to mail it to my lawyer. When Deepak called, I told him I was sorry, I pressed the wrong button and mailed it to my lawyer instead."
On hearing this, Deepak was livid with anger.
"He was shouting at me like hell - that recording is with my lawyer - our last telephone communication, (and) I recorded it."
Asked if this was his intention right from the beginning, Balasubramaniam said "yes" and gave a hearty laugh.
"You know, this was the best opportunity I had. I did not come to ask (him for) money, I did an (first) SD, (and they) all came and jumped (on me) and sent my whole family (away to India).
"I lost my mother, I lost everything, what is left? I am sitting in Malaysia, my wife is sitting in India."
According to Balasubramaniam, his mother died when he was in hiding in India. It was only later, after Najib became prime minister, that he was able to make secret trips to Malaysia.
The private eye said he transferred the RM100,000 Suresh put in his wife's bank account to his lawyer's client account, and asked it to be returned to Deepak, who has a carpet business and is a close friend of PM's wife, Rosmah. The sale-and-purchase agreement of the condominium is also with his lawyer.
Balasubramaniam disclosed that he had recorded some of the conversations he had with Deepak and kept a logbook detailing everything that took place.
The evidence, he said, was being kept for his protection.
Speaking to Malaysiakini in an interview in Kuala Lumpur last month, Balasubramaniam claimed that he was approached about a week before the Sarawak state election in April last year.
"You know these guys, they already got ‘good news' from Perth and they needed more ‘good news' from India," said Balasubramaniam cryptically, though he declined to elaborate further.At the time, the campaign machineries of both sides of the political divide had been in high gear as every and all possible means were being used to woo voters in the crucial state election.
It was also around this time Raja Petra Kamaruddin's interview with TV3, which was done during the controversial blogger's visit to Australia, hit the airwaves.
In the interview which was also carried by the mainstream TV stations, Raja Petra disavowed his statutory declaration (SD) linking Prime Minister Najib Razak's wife Rosmah Mansor to the Altantuya Shaariibuu murder case.
Raja Petra, who is in self-imposed exile in United Kingdom, alluded that his SD was based on information ‘planted' by PKR leaders desperate to prevent Najib, who was then deputy prime minister, from succeeding Abdullah Ahmad Badawi.
Bala keeps lawyer in the loop
In Balasubramaniam's case, the private eye claimed he was asked to implicate Anwar and PKR leaders of paying him to commit perjury in his 2008 SD linking Najib with murdered Mongolian national Altantuya.
He said he was approached by the same people who had threatened and subsequently paid him a substantial amount to sign a second SD to say that his first sworn statement was made 'under duress' - businessman Deepak Jaikishan (right) and a police officer by the name of Suresh.A key figure in the controversy surrounding the murder of Altantuya, Balasubramaniam fled to India with his family after signing the second SD.
Apparently promised RM5 million for his about-turn, Balasubramaniam said he received a total of RM750,000, in instalments, before the payments eventually stopped.
According to the private investigator, he was contacted by Deepak and Suresh through a mutual friend, Siva, about one week before the Sarawak election.
Siva, a businessman, had called Balasubramaiam's wife at their home in India as the private investigator was at the time taking a former staff on a temple tour in northern India.
Balasubramaniam's wife was told that Suresh and Deepak wanted to speak to him and she relayed the message to him.
"I told my wife I didn't want to speak to anyone."
After she conveyed his response to Siva, Suresh subsequently called her repeatedly on the phone.
"They were ‘torturing' my wife like hell. My wife could not take the pressure."
To spare his wife the harassment by Suresh, Balasubramaniam said he finally agreed to speak with Suresh and Deepak, but only after seeking advice from Americk Sidhu, his Malaysian lawyer.
Video recording was to tarnish Anwar
Americk told him to play along, and to document the events as they took place.
"Speak to them, get whatever evidence... it's for your ‘insurance'," Balasubramaniam said his lawyer told him.
Suresh then contacted him directly, after his wife gave his phone number to the police officer.
He said Suresh told him: "This is the deal: RM200,000 cash and a condo in Berjaya Times Square and after this, after everything is okay, I'll let you come back, and then maybe we will give you a project."
When Balasubramaniam asked Suresh what they wanted in return, Suresh told him that they wanted him to read out a statement they had prepared and for this to be recorded on video.
Asked what the statement was about, Balasubramaniam described it as "tarnishing PKR number one (Anwar)".Part of the statement that was given to Balasubramaniam states: "I had to change my second SD because I was approached by Anwar who convinced me that he will become the new prime minister very shortly."
It also says that Anwar gave him RM200,000 "in a bag" and that RM50,000 would be banked into his account monthly.
The statement adds that both Balasubramaiam and Padang Serai MP N Gobalakrishnan would be made senators "to safeguard the rights of the Indians", and that the private eye had finally decided to come out with the "truth" because Anwar had betrayed the Indian community.
Initially Balasubramaniam refused to record the video on his own. He asked Deepak and Suresh to fly to India together with TV3 andUtusan Malaysia journalists, and he would do as they asked.
However, after a whole day had passed and further negotiations took place - this time with Deepak himself - Balasubramaniam finally agreed to make the video recording after it was stressed upon him that they needed the footage urgently.
Suresh then banked in RM100,000 into an account in the name of Balasubramaniam's wife. Then, through Siva, Deepak and Suresh handed over a copy of a sale-and-purchase agreement for the Berjaya Times Square condominium.
However, Balasubramaniam said he played his trump card after leading both Deepak and Suresh on.
'Deepak's furious call recorded'
"It (the video) was ready, already keyed in, I just (needed to) mail it. What I did was to mail it to my lawyer. When Deepak called, I told him I was sorry, I pressed the wrong button and mailed it to my lawyer instead."
On hearing this, Deepak was livid with anger.
"He was shouting at me like hell - that recording is with my lawyer - our last telephone communication, (and) I recorded it."
Asked if this was his intention right from the beginning, Balasubramaniam said "yes" and gave a hearty laugh.
"You know, this was the best opportunity I had. I did not come to ask (him for) money, I did an (first) SD, (and they) all came and jumped (on me) and sent my whole family (away to India)."I lost my mother, I lost everything, what is left? I am sitting in Malaysia, my wife is sitting in India."
According to Balasubramaniam, his mother died when he was in hiding in India. It was only later, after Najib became prime minister, that he was able to make secret trips to Malaysia.
The private eye said he transferred the RM100,000 Suresh put in his wife's bank account to his lawyer's client account, and asked it to be returned to Deepak, who has a carpet business and is a close friend of PM's wife, Rosmah. The sale-and-purchase agreement of the condominium is also with his lawyer.
Balasubramaniam disclosed that he had recorded some of the conversations he had with Deepak and kept a logbook detailing everything that took place.
The evidence, he said, was being kept for his protection.
Investors are awaiting the miraculous delivery from crisis by the ECB and the Fed, but they are waiting in vain. The economic problems in the U.S. and Eurozone are mostly structural, not monetary. Unfortunately ideologues and politicians on both sides of the spectrum are interested in quick fixes rather than the real groundwork of economic progress.
Consider the new U.S. unemployment announcement. If you are a college graduate, there is no employment crisis. 72.7 percent of the college-educated population age-25 and over is working. The unemployment rate is 4.1 percent. Incomes are good.
If you have less than a high-school diploma, however, you are barely scrapping by. Only 40.4 percent of those without a high-school diploma have a job. Their unemployment rate is 12.7 percent. Incomes are too low to make ends meet.
There are two Americas: the college-educated crowd that may have taken a hit in their retirement accounts, but who are generally doing well. Then there are the rest, around 60 percent of the population, who are increasingly dropping out of the middle class. Nearly one-half of American households are now classified as low-income, within twice the poverty line.
Most observers other than the ideologues and economists can see why this is so. Those at the top have been favored in three ways during the past 30 years. The ongoing digital revolution has been their friend, adding heft to the knowledge economy. The globalization of trade has brought a surfeit of low-priced consumer goods (including the computers and smart phones that are their daily companions). And the money-fed political system has ensured a stream of political favors for the affluent: low tax rates, offshore tax havens, financial deregulation, mere hand-slaps for corporate abuse, and more.
The rest of the labor force, however, is hurting. The digital revolution has automated millions of jobs. Globalization has offshored millions more jobs. And politics has increasingly neglected the bottom half of the population. The bottom half are fodder for TV-based campaign propaganda but not for policymaking. Tax cuts at the top are paid for by budget cuts on education, environment, and infrastructure. The Democrats are slightly better than the Republicans on this count, but the practical as opposed to rhetorical differences should not be exaggerated.
And then there are the three miracle cures. Keynesians propose to solve the unemployment problem by another dose of temporary deficit-financed stimulus. The approach doesn't work. A stimulus might at best create another temporary construction bubble. Yet the effect would be at best temporary and the hangover would again be serious. In practice, the outcomes of stimulus packages are even more meager. The temporary tax cuts and transfer payments in the recent Obama packages have been more saved than spent, adding to public debt rather than to aggregate demand even in the short term.
Quantitative easing by the Fed is a similarly weak salve. Monetary easing can potentially stoke more asset bubbles large and small, but cannot solve structural problems. Arguably the monetary hangovers are as bad as the fiscal hangovers. We are, after all, still digging out from the Hayek-type crisis of misplaced investment in real estate caused by excessive liquidity expansion during the past decade.
Tax cuts combined with budget cuts are the third miracle cure: the idea of getting government "out of the way" to let the private sector lift the economy out of its doldrums. The absurdity is that this policy is that it's the opposite of what's needed to overcome a structural crisis of insufficient education and job skills. Poor kids need society's help, not its neglect.
The Eurozone of course has its own added structural challenges. When German banks over-lent for most of a decade, and Spanish, Greek, Irish, Portuguese and Italian banks over-borrowed, the boom-bust cycle crossed national boundaries. ECB President Mario Draghi cannot solve the basic political problem that resulted. Southern Europe's debts need to be written down, and owners of German banks need to bear the losses. If that means that the German taxpayer ultimately must pay to recapitalize the banks, then so be it.
A few northern European countries have successfully avoided the deep structural problems. They've done this not through monetary, Keynesian, or tax-cut policies, but by ensuring that every child receives a decent education and skill training, no matter whether they are born poor or rich. Families are backed by generous family support of various kinds. Active labor market policies promote school-to-job transitions.
Therein lie the successful formulas of the German social-market economy, Scandinavia's famed social democracies, or the Netherland's polder model. In all of those countries, ample public financing levels the playing field across households. Structural crises between the haves and have-nots have been contained even as market forces have tended to widen income and skill inequalities.
So where does that leave the U.S. and Europe in macroeconomic policymaking? The U.S. needs long-term public investments -- in education, skills, and infrastructure -- so that its dual economy can once again become an inclusive middle-class economy. Out kids should be in school and training, rather than in unemployment or low-skilled work. The Eurozone needs debt relief, cleaned-up banks, and social inclusion in the south that matches the more successful north. The entire rich world needs to understand that it faces a new era, in which its growth will be earned the hard way, by having sufficient skills and technology to warrant a significant wage premium over the emerging economies.
And all countries rich and poor will need to plug two more structural holes. The first is the explosion of tax havens, the kind where Mr. Romney reportedly keeps his savings. Without adequate taxation of corporate and high-end income, there is no way to close budget gaps in the U.S. and Europe. The second is ecological. No economic trick, no amount of education and training, will suffice, if we do ourselves in by human-induced droughts, heat waves, famines, and floods. It's time, in short, to put away the gimmicks and to start thinking about the sustainable economic prosperity, built on education, skills, social inclusion, and environmental responsibility.
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