The other side of the Outsourcing coin

Recently, I happened to visit the USA on work. I was in Raleigh, North Carolina for over a week, and had gone round the town with my cousin, who lives there.

I distinctly remember my earlier visit to the same facilities of my employer about four years ago. My colleagues in the US had recommended me a hotel as the one to go for, since it was not too far away from the office, and, more importantly, was right opposite a huge mall, which housed some of the biggest names in US retailing – Sears, Circuit City, Best Buy, et al, not to mention the usual Abercrombie, Toys r Us, and the plethora of clothes shops. And not to forget, the many options for eating, including a massive outlet of The Cheesecake Factory. I am a sworn veggie, and, not surprising, subsistence on the veggie fare in the US has never been a problem.

My visit in 2005 was memorable for a few things – I was awed by the sheer size of my office campus – about 13 blocks, with a capacity of over 25000, and a few assembly units housed in, as well. The second was, my difficulty in getting myself lodged in this hotel of choice- the waitlist was significant, because Raleigh used to be a bustling centre for Technology and Research. The third was the bubbly crowds thronging the mall in the evenings- I used to enjoy the time I had there, hanging out with my colleagues, chatting away on office-nothings, while enjoying the cheesecakes.

Cut to August 2009. The first surprise came from the hotel. I was able to get accommodation without a whimper. “This is the school vacation time and so people may prefer to visit the sunny beaches instead of workplace”, I thought to myself. The second surprise was in store at JFK. Gone were the long lines in front of immigration. Sure, they had added more counters to make the traveler experience a little smoother. “The biometric scanning system has surely reduced the service time per entrant, plus the added counters have eased the pressures”, I told myself. I landed in Raleigh shortly, and, surprise of surprises, the hotel was just not crowded. “Is it the school vacation time that is causing the drop in occupancy?” I asked the hotel front desk – and got back a wry smile in return. I still did not quite comprehend the meaning of it then.

I was greeted in the office by empty parking lots. “The same school vacation time”, I consoled myself, and immersed myself in meetings. As I interacted with the local folks, I could clearly see desolation and fear in their mannerisms. A sense of déjà vu, as it were. I was told later, that the occupancy level of these company-owned premises is only about 30%. I could see the symptoms of something sinister, but could neither fathom it in full, nor the undercurrents of it. As it turned out later, not just my employer, but almost all employers in that area, as in many other areas in the country, have cut back on jobs, causing unprecedented levels of low-occupancy.

The usual gathering for supper turned out to be rather unusual. The colleagues turned in, as usual, and we took a quiet corner of the Cheesecake Factory outlet, chatting away to glory. But the usual humdrum in the restaurant was missing. The crowds clearly were thin. I asked my American colleagues what the matter was. The same wry smile, in return. One of them finally down the remnants of the Screwdriver in his glass, cleared his throat, and told me something that was heart-wrenching. He said “blame it all on Outsourcing”. That is when reality hit me on the face. The Cheesecake stopped being cheesy from that moment. I was putting up a brave front in front of my colleagues, and kind of brushed aside that point, but deep inside me, I was badly shaken. I went through the motions of supper, got back into the cozy confines of my hotel bed, and was deep in contemplation.

Clearly, America is a nation in transition, but to me, in the path towards terminal decline. The 70s and 80s saw manufacturing jobs being put on those huge transcontinental cargo ships to Asia, never to return. “Motor city” (Detroit) soon turned into “city of rusted steel”. Manufacturing was all but wiped off the face of the Land Of Opportunities, to the point that even toothpicks were imported. America had then consoled itself in “moving up the value chain” by focusing on the Services Sector. But that did not last long, either. What started as a trickle of I.T. programming outsourcing, had soon turned into a deluge of outsourcing everything from simple programming, to backend office processes, to HR to R&D… this deluge has clearly inundated Raleigh and the other cities with jobless families, struggling to make ends meet. People have resorted to literally selling their family silver. “For sale” boards in front of what once were cozy homes for happy families are now ubiquitous.

The many I.T parks and the economic prosperity that one now witnesses in India, to me, are clearly at the expense of the US and other developed western Countries. For every house that has risen in value of a house in Jayanagar, Bangalore, from a few lakhs of Rupees not so long ago, I felt that one house in Raleigh (and other towns) is going up on distress sale, as it were.

The typical confused Indian in me suddenly woke up. “Is this not Adharma (injustice)? Is my country’s prosperity not directly linked with the downfall of another nation? Am I not prospering by pulling houses down on the other side of the globe?” The socialist within me explained “ well, the British did exactly this to India for centuries, plunging the country into penury from which we are struggling to extricate ourselves, and maybe this is pay-back time- after all the Chinese showed no such compunctions when manufacturing jobs were transplanted into China”. The sham of a scientist within me woke up and said “well, this is typical Darwinian theory – survival of the fittest. So don’t be too bothered, because, tomorrow, someone else will overpower you when your fitness level goes down, just as is happening to the US now”. The economist in me tried to pacify “the law of Diminishing marginal Utility will make sure that India will be shown its right place on the economic ladder soon, unless it learns to move up the value chain fast”.

Is what we are doing as a nation right or wrong? Are we justified in (metaphorically speaking) snatching some else’s job and prospering at the expense of their well-being? What will happen to those families who had built their lives around dreams of a more prosperous future, only to see them crumble like the Twin Towers, right in the front their eyes? Is this righteous, or is this plain Adharma? Why does one nation have to prosper at the expense of the other? Isn’t the world big enough to offer opportunities to all, so that one does not have to step on another’s toes? I have been struggling to find an answer for this, ever since my return, a month ago.

Somewhere, back in my mind, the echo of my mother’s feeble recitation of a Sanskrit prayer mildly reverberates,

“Kayena vacha manasendriyairva
Buddhyatmana va prakrite swabhavath
Karoomi yadyad sakalam parasmai
Narayanayeti samarpayami” , which broadly translates to

“Whatever I do with my mind, body, speech or with other senses of my body,
Or with my intellect or with my innate natural tendencies”
I offer everything to Narayana (God).

©Dilip Subramanian

Cash for Clunkers

I arrived in the US yesterday on a week's visit on work.

I am hearing a lot of "exciting" things about this Cash For Clunkers program has apparently has been hugely popular.

Crudely put, this is what I understand of the program. if your car gives less than 18 miles per Gallon ( God knows why the Yankees stick to such 18th century units of measurement, when the rest of the world has moved on), then you could buy a new "Quasi Green" car which will give more mileage, and , in the process , get upto $4500 off the bill... that is almost 25% to 15% rebate on the car, depending upon the model.... the biggest to gain is Ford so far, and the Govt is serisouly debating extending this program, to give a second chance to the two candidates on death-bed - GM and Chevy.

Back to the basics. Who gains? Those guys who indulged in the gas-guzzling SUVs and Hummers of yore, when the going was good, at the expense of the those who thought it more prodent to go in for more fuel efficient cars. And who foots the bill? All tax-payers, collectively.
Net of it, you collect tax money from all and sundry, including the 'responsible" and "rckless" guys, and put that money in the hands of those " irresponsible" guys...

Much like the "bail-outs" which really set the precedent for all bad behaviour to be encouraged.

This, to me, is communism gone awry!!!

Cathode Ray tube and Copper tube

I rolled on the floor and laughed at the news item released on Times of India an hour ago (reproduced below).... Blame it on Mr. Ghulam Nabi Azad! Indians are known the world over for lateral thinking, and what better standing example ( no pun intended, seriously!) can be shown, than this masterpiece from the minister!!! India desperately needs electrification - for lighting rural homes and for pumping water. Farmers want to pump water, and the minister says not to, and that too in such a novel fashion!!! Now I know the secret of Karunanidhi giving away free television sets to all and sundry... he is a genius ... he quietly collaborated with Ghulam Nabi Azad and wanted to replace copper tube (Copper-T) with Cathode ray tube ... and how stupid we all were, thinking rather naively that he was giving TV sets to garner votes... let us leave the politicians do their job ( I mean, of population control!). P.S: Heard in the grapevine ... the Union Law minister is about to propose to enact a new law, which mandates that every adult shall either stay awake and watch TV all night, or at least leave the TV on from dusk to dawn, so that there shall be light. Penalty for non-compliance - watch Doordharshan continuously for 72 hours!!! Read on !!!!!!!!!!! Cheers..... Dilip ======================================================================= Village electrification can curb population growth: Azad IANS 11 July 2009, 07:26pm IST Print Email Discuss Bookmark/Share Save Comment Text Size: | NEW DELHI: Health and family welfare minister Ghulam Nabi Azad on Saturday became a votary of rapid electrification of villages in India but for a different reason - to curb population growth by ensuring access to television. "Electricity in our villages can help control population growth. Electricity will lead to television in houses, which will lead to population control. When there is no light, people get engaged in the process of population growth," he said while addressing a function on World Population Day. "Don't think that I am saying this in a lighter vein. I am serious. TV will have a great impact. It's a great medium to tackle the problem," he added. "When light will reach (villages), 80 percent of population growth can be reduced through TV," he said, adding that the current United Progressive Alliance (UPA) central government is working to ensure greater rural electrification. He also exhorted media and TV channels to provide quality materials and highlight positive news. The minister said that population growth needs to be controlled as it will have positive impact on "all Indians". "It is the duty of all MPs, ministries and of all individuals to help in curbing the population growth," he said adding that India contributes to 17 percent of the global population but the land area of our country is just 2.5 percent of the total land available in the world. "We need to think that more children means more problems," Azad said. India with over a billion people is second only to China in terms of sheer number of people and experts believe if the current trend of growth continues, then the country may surpass China by 2030.

US National debt

Grave reading....http://www.cnbc.com/id/31723265

Of particular interest is this snippet below....The odometer-style "debt clock" near Times Square — put in place in 1989 whenthe debt was a mere $2.7 trillion — ran out of numbers and had to be shut downwhen the debt surged past $10 trillion in 2008. The clock has since beenrefurbished so higher numbers fit.

Markets update

I had mentioned earlier that I made a wrong call during the elections -that the markets would go down after a Hung Parliament emerges ...Subsequently I have got back in slowly, and am now sitting on a profit of 20% onmy portfolio . Today, I have booked partial profits in "momentum plays" like commodities andRealty. I intend taking out some more on Monday after the budget finishes, onCommmodities. I intend leavin the balance over.I know I missed the Election ferviour, and am determined not to miss this one.I have a funny feeling that the markets go through the much needed correction,either starting on Budget day ( if the budget is screwed up) or sometimethereafter ...it is very difficult to time the market.For the past few days, the market has been very edgy, and on very thin volumescomparatively. Over the last couple of weeks, FIIs have been pulling out money,and DIIs are getting in.Globally, credit is getting tightened again. California is techincally abankrupt state now. Unemployment is flirting with 10% in the US. Inflation islikely to come in again. treasury yields are getting more attractive again-indicating potential "flight to safety".Which means we could see strengthening of the Greenback again for sometime, andglobally the stock markets could possibly go through one more round ofcorrection....All this is guesswork at this stage, since I dont have the luxury of hard , andall this could go wrong again... but, this is my call right now, andtherefore, barring the long term investments, I am likely to pull out all mytrading money from the market.I am eyeing the Auto Sector and Realty now as a contrarian play like I did for sugar, essentially in the midcap space. Still testing the waters there, andwould like to see some correction before I put in big money there. Auto Sectormaybe in the next 3 months, and realty in another 6 possibly...

Federer

I think that of late, Federer has started making more and more unforced errors compared to what he used to, by his own high standards... which is one reason why is tends to lose more often, of late...

But I am fervently hoping that this poetry in motion continues for eternity.....

Match

What do you call today's semi-finals between Andy Murray and Andy Roddick?
















......MATCH OF THE AANDIES !!!!!!!!!!(Andippandarams!)