The air is so hot and humid, here in Mumbai, you can boil an egg in it.
Last night, we ventured out of the hotel for an authentic Mumbai experience. We went out the front door, around the corner, and a half block down the street to a restaurant called Indigo.
We would have taken a taxi but the only thing worse than walking in Mumbai is taking a cab. Taxis are everywhere…small black and yellow cars. They are banged up veterans of many years on Mumbai’s chaotic roadways.
If the car doesn’t break down or get in an accident, you merely suffocate.
This morning, our driver sounded his horn, then started the engine. Cars are never taken in for repair in India unless the horn doesn’t work. You can drive without brakes, but not without a horn. Maybe that’s why 110,000 people die on India’s roads and railways every year.
We were on our way to CNBC, where we were being interviewed. For some reason, your editor has achieved minor celebrity on the subcontinent. The announcer told his audience that we were a “venerated western economist.” Other interviewers ask for autographs. Many have read our books. All want to know what we really think.
This is probably because our views flatter them. Unlike the US, India is not at the end of a 50-year credit expansion. It’s only at the beginning. Investors might look forward to many years of growth.
“In the West, the situation is very different,” we explained. “The Western economies – especially the Anglo-Saxon economies, and particularly Britain and America – have been on a spending binge for many years. That reached its zenith in 2005-2006; now, it will be very hard for these economies to grow. They can’t do it by expanding consumer spending and consumer credit. In the first place, consumers already have too much stuff. In the second place, the consumer has neither the income nor collateral to justify more debt. So, the economy needs to find a new model to move forward.
“In India, on the other hand, people don’t have so much stuff. There are people sleeping on the sidewalk outside my hotel room. They have nothing except the clothes they are wearing. And they certainly don’t have credit cards and home equity lines. So India can grow for many, many years simply by providing basic goods and services to its own people. And the nice thing about it is that India doesn’t seem to be capable of central planning…or any planning at all. The country can expect a long spell of prosperity, until the central planners get in position to lead. Then, you’re in trouble.”
CNBC didn’t like what we had to say. Even if we were generally optimistic about India, we were definitely not cheerleading for world economic growth. And CNBC…along with most of the other mainstream financial media…like to keep viewers smiling.
“Sorry that you are so gloomy,” said the interviewer, adding to the audience that “those are just his views.”
Of course, dear readers know we’re not gloomy at all. Around the office they call us Mr. Sunshine. Why? Because we welcome a depression in the economy like we welcome a hard freeze in the winter; it kills off the parasites.
for Markets and Money