The Momentum of Stupidity

For eight long years, GW Bush ruined America, taking down with him several good things he inherited from Bill Clinton's presidency. For several years longer than that, India was hijacked by archaic notions, too much government control, protectionism and corruption. Corruption still exists, but impacts us a little less these days because the government has given up some of its control. In hindsight, India was down the wrong path up until the time we nearly became bankrupt and then Manmohan Singh came along with reforms that slowly brought us to the light.

In George W Bush's case, he had the support of most of the morons in his country who were willing to panic under the threat of terrorism - to the point where they continued to support the very government that had allowed Sept 11th, attacked the wrong country, did not find the perpetrators of the greatest act of terror on its soil, lied to its people about threats, gave no bid contracts in billions and essentially stole all semblance of order! In India's case, we simply had no experience with democracy and even less with self governance. We were too busy being pious and holy that we never realized for a long time that we needed a strong economy! It took a near catastrophe to wake us up and take up reforms.

In both cases, stupidity gained momentum, simply because there weren't enough minds applied against it. What is it about humans that allows stupidity when it is so obvious? Just fear of bucking the momentum? How does stupidity gain momentum in the first place? Panic? Collective ignorance? A pathological attraction to the 'wrong' choice in case the right choice looks too good to be true?

The financial crisis that started in Wall Street and is threatening to hit a lot of people around the world is no illusion. It is the unmasking of a bag of illusions. Americans thought for a long time that they could continue building their wealth on speculation rather than productivity, by just juggling money. Stupidity again, but nobody questioned it for a long time. Now, they are being forced to re-evaluate a lot of things. India has reacted with fear in the stock market, panicked at the marketplace and is still scared for no great reason. We should have known when we made our future plans based on an exaggerated expectation of continuous growth in the foreign currency dependent outsourcing business that there could be trouble. We didn't. Stupidity gathers momentum much faster and stronger than intelligence.

The CEOs of Indian companies in the IT and BPO sectors aren't leaders but Chief Emulation Officers, who seem to blindly replicate the models of the companies they aspire to be like. Well if Citibank was one of those companies, we should be seeing a one shot 50,000 strong layoff in India soon. News just came in that our marquee "Indian" CEO of Citigroup is likely to be fired. Sounds like a good plan to me if he allowed Citigroup's market value to drop 50% in three days.

If there is one thing to learn from becoming "global" it is that there are enough and more people in senior management circles unwilling to be individually chastised for being different and visionary, while very happy to be found collectively guilty of massive stupidity later. Why shouldn't these overpaid fools lose their jobs for failing to warn their companies of impending doom? If they are "helpless" why the heck do the companies need them in the first place? A duck would be equally helpless, and would even lay eggs at a fraction of the salary. Is anybody questioning the logic of hiring dummies with MBAs? Not with the helpless watching game called stupidity that is pervading corporate India right now.

Every downturn is supposed to bring opportunities with it. With the reduced demand in oil and lowered consumption, environmentalists should be really happy that there won't be so much carbon di oxide in the atmosphere for a while, but in reality they will be unhappy that cash crunches will hold back investment in newer technologies! Add to this lower oil prices and there is no incentive at all for anyone to complain about burning more oil. The next time oil goes up, it will be at the most inopportune time and then we will look back at the stupidity of not running away from oil when we could afford to, which is now, when we have extra money that we didn't spend on expensive oil! But we're so scared now that we're most likely to make mistakes. Humans don't take pressure all that well.

Last night came the news that the big automakers in the USA didn't get the handouts they wanted. It is kind of stupid to start with, like losers asking for medals, but when the BIG 3 are not likely to share profits with the taxpaying public, why the heck should taxpayers' dollars be used to bail them out for not being competitive enough? If Toyota and Honda can do well in the same market with the same pool of labour and skill, there is no reason for GM to be complaining. Of course this has to do with not knowing how to make a single good car, but just because the impact would be huge if GM, Chrysler and Ford went bankrupt, that doesn't mean taxpayers should bail them out. That is just thievery, and the thieves have been fended off for now. There are big auto ancillary manufacturers in India that supply the big three and many are OEMs (Original Equipment Manufacturers). They're going to hurt, without a doubt. That's the thing about momentum - you cannot stop it unless you oppose it with an equal or greater force.

Indians are going to lose their jobs. No question about that. Quite simply because we are great at competing against each other here at home, but lousy when competing against the rest of the world. While it is unlikely that Eritrea will be making more steel than India in the next fifty years, it is highly likely that we find our economy has bloated because of IT dollars and a higher standard of living that we briefly subscribed to is suddenly going to be unsustainable. We don't have to look far - we don't sell software to end users, we write software for others who sell products and solutions. The "others" are mostly American and some European. These people aren't going to do anything new for a while, and we would have rolled in the momentum of their stupidity! They're owning up to their failed economic models, but we're yet to own up to our overdependence on the US dollar. More stupidity that is not being questioned right now, because of some dangerous remnants of optimism. After all, when we love the Americans so much, you bet we bought some of their delusionary talents too!

The Indian real estate industry is getting the wake up call right now, but is not responding to it. If you ask one developer why he isn't dropping prices, he will tell you nobody else is, so he is going to wait and watch! Momentum. Nobody escapes it, and very few want to escape it. Sheep falling off the cliff, and more to follow. About a billion. The only reason Indians won't get killed jumping off the cliff is because so many of us jumped before us that the valley has been filled! When we do see prices drop, we still won't see sales pick up because people will expect prices to drop some more! That will throw more panic into the industry, and builders won't be cashing in on cheaper cement and steel prices because their moneys are stuck in unsold properties. The biggest ones will see the opportunities and wait out the trough, but the bottom feeders will all look for other industries to play in. We haven't seen the worst panic yet, but the show is coming!

Somehow the Indian government, as if it is qualified to talk about this, is throwing out assurances, based on absolutely nothing, that India is not likely to see layoffs! This is beyond stupidity. It is delusion, which has had momentum a lot longer than stupidity.