Mediaboss Marketing

Democracy is when the indigent, and not the men of property, are the rulers. -- Aristotle

India is proof that democracy is more powerful than quantitative easing. There has been much written over the excitement of India's election results, with many arguing that a new era is coming in the world's largest democracy. Oddly, talk of India as a "Fragile Five" member has gone quiet, but make no mistake about it: If everyone is talking about a crisis, it either already happened or it never will. The crisis in India never existed, and a massive up-move has seemingly taken everyone by surprise.

Last year, the Federal Reserve's QE program was credited for sending the S&P 500 (INDEXSP:.INX) up 30%. The WisdomTree India Earnings Fund ETF (NYSEARCA:EPI) is up about as much so far in 2014, with no stimulus in place. The narrative that QE is so effective seems to be at odds with the reality of how other countries have behaved. Markets don't move based on money -- they move based on hope. Clearly that hope can be a powerful force in the beginning stages of a sea change on the fiscal side. Sometimes that hope lasts, sometimes not.

In the case of Japan, for example, hope failed to maintain the bull trend. Despite numerous intelligent arguments for why Japan is due for prolonged strength, nearly all of last year's huge move on Abenomics occurred in the first five months of the year. Take a look below at the price ratio of the WisdomTree Japan Hedged Equity Fund (NYSEARCA:DXJ) relative to the S&P 500. As a reminder, a rising price ratio means the numerator/DXJ is outperforming (up more/down less) the denominator/SPY. A falling ratio means underperformance.

Click to enlarge

Japan on a relative basis has been an abysmal performer. Democracy and the return of Abe caused a lot of hope for escape velocity, but markets simply haven't reflected that for nearly a year now, despite continued QE by the Bank of Japan. India may be undergoing a similar situation, although clearly the reflation/debt trap dynamics are very different, as well as the country's growth prospects from a demographic and industrialization standpoint. However, the notion that one should chase QE is simply invalid. India is proof of that, with its markets now being the best-performing on a global front since March 2009.

I'll take the will of the people over the will of the Federal Reserve any day. How about you?

Twitter: @pensionpartners

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Here is the original post:
Democracy Is the New Quantitative Easing

TERMING the current system as a sham democracy, Dr Tahirul Qadri has promised genuine democracy in Pakistan through a revolution. Given his impressive religious credentials, one is thankful to him for championing democracy vociferously, for some religious leaders out-rightly reject democracy. One also agrees with his critiques of current Pakistani democracy and his desire for a better democracy. However, one disagrees with his preferred method, ie, revolution.

Before jumping into the discussion, it is appropriate to follow French philosopher Voltaires advice, who famously said, If you wish to converse with me, define your terms [concepts]. Blending popular desires with academic definitions, one can say that genuine democracy is when elections are regular and credible; corruption is low; government services are high-quality; people feel secure and rights are respected.

If one reviews all events generally branded as revolutions, three features emerge. Firstly, revolutions refer to fundamental changes in political and/or economic systems, ie, from monarchy to democracy or capitalism to communism.

Secondly, they are led by people outside current power structures. Thus, palace and military coups are excluded.

Thirdly, these outsiders use extra-legal measures, eg, war or demonstrations, to achieve change since current legal structures disallow peaceful change efforts.

It is debatable whether one should call it a revolution if outsiders topple the elected Sharif government through demonstrations and instal another elected government since there would be no structural change in the political system; at most a more competent elected government would replace a less competent one.

More fundamental is the issue of what revolutions have achieved globally, for there is not one revolution which delivered enormously improved governance immediately. Take the highly celebrated 18th-century American and French revolutions. All they achieved was to replace monarchies by highly imperfect democracies no better or even worse than Pakistans today. It was decades later by the middle of the 20th century that governance reached the high levels prevalent today.

Consider next the Arab Spring revolutions. Governance quality has either deteriorated or stayed unchanged. Ethiopias 1970s revolution which toppled Emperor Selassie actually produced massively worse governance.

The 1948 Chinese revolution created mixed results, with land reforms combined with starvation, death and repression. It was only after Deng Xiaopings 1978 peaceful ascension that China started its development spree.

Iran certainly has independent foreign policies since its 1979 revolution but its actual governance is no better than Pakistans. It lags behind Pakistan on the Transparency corruption index and on many sub-dimensions of the World Bank Governance index. Moreover, there is more openness and freedom in Pakistan.

The rest is here:
Genuine democracy - Newspaper - DAWN.COM

FILIPINO HUMOR overwhelms Facebook and other social networking sites as netizens parody the new tourism slogan. But its good news for Philippine tourism, says DOT. itsmorefuninthephils.com

Its more fun in the Philippines observers of Philippine democracy could very well apply our tourism slogan to our political landscape. Hard-won after centuries of colonization, years of occupation and decades of dictatorship, Philippine-style democracy is colourful, occasionally chaotic and arguably inspiring.

Take elections, for example, the cornerstone of democratic institutions. Voters see their power to choose their leaders as their strongest check on the behaviour of the government, their one chance to exact accountability.

Analysts and commentators have branded political campaigns in the Philippines as highly entertaining. The mix of old political clans, showbiz personalities and the ubiquitous song and dance that pepper the campaign trail provide plenty of amusement. But be not deceived; the power to choose is a right and responsibility that Filipinos hold dear.

Indeed, ballots are almost sacred in the Philippines. Voters have risked their personal safety to exercise the right. In many cases, the public has seen it as their one weapon against those who abuse their position.

Beyond balloting, democracy is a government by discussion (to quote the Indian economist Amartya Sen), characterized by public dialogue and interaction. The vibrancy of democracy in the Philippines hinges largely on the quality of this dialogue and interaction. A government that engages its citizens, is inclusive in its decision-making and, most importantly, enjoys the trust of its electorate, can almost certainly count on public support when making tough decisions. The reverse has also been seen, as in the case of a leadership facing a crisis of legitimacy that was seen to make decisions out of political expediency rather than the public good; in this case the peoples mandate, won squarely in an electoral contest, has proven itself to be a potent force for positive change.

The authors of a working paper for the National Bureau of Economic Research argue that democracy is good for economic growth for various reasons, including the ability of democracies to implement economic reforms. They present evidence from a panel of countries between 1960 and 2010 showing that the robust and sizeable effect of democracy on economic growth suggests that a country that switches from non-democracy to democracy achieves about 20% higher GDP per capita in the long run (or roughly in the next 30 years).

We can see this in the case of the Philippines, which has enjoyed 60 straight quarters of economic growth since the 1997 Asian financial crisis. Average GDP growth from 2010 to 2013 was recorded at 6.3%, significantly higher than the 4.5% average GDP growth registered from 2001 to 2009. That this relatively higher rate of growth has happened alongside a series of economic reforms backed up by a strong electoral mandate should not be taken as pure coincidence. Closing loopholes in tax collection, an overhaul in customs administration, and passing key legislation on excise taxes these would not have taken place in an environment which was not supportive of or indeed, craving for reform.

Outside of economic reforms, this strong mandate has also enabled the passage of social sector reforms among them legislation allowing women access to vital information and facilities pertaining to their reproductive health, and a measure extending the education cycle to meet the global standard. These measures had passionate advocates on both sides, and a less committed leadership could have wavered at any point.

Improved government via more efficient tax collection and customs administration, access to vital information and services and a better standard of education: how could one argue that this is not what voters want when they take to the polls?

See the original post here:
More fun in the Philippines?

Professor James Allan: Democracy in Decline NZ tour
The New Zealand Initiative hosted Professor Jim Allan in May for a lecture tour to promote his new book "Democracy in Decline."

By: NZ Initiative

Link:
Professor James Allan: Democracy in Decline NZ tour - Video

Modi must remember India is a Parliamentary democracy: Moily
This is what ex-Oil Minister Veerappa Moily said when we asked what advice he would like to give Narendra Modi, India #39;s PM-in-waiting.

By: IBNLive

Here is the original post:
Modi must remember India is a Parliamentary democracy: Moily - Video