Biblical Politics

Biblical Politics
An upcoming Supreme Court case on the Ten Commandments could give the Dems a chance to reconnect to the faithful

By Howard Fineman

Feb. 16 - If you’re a homeless attorney in the city of Austin, Texas, a good place to hang out is the Texas law library on the sprawling grounds of the state capitol. It’s well-heated in winter, air-conditioned in summer and there is, Lord knows, plenty to read.

Thomas Van Orden was such a person, and as he whiled away the time in the law library he noticed something that bothered him. On the lawn outside the building was a 40-year-old monument to the Ten Commandments. Here, he concluded, was a violation of the U.S. Constitution’s First Amendment prohibition against the establishment of religion. With the help of some University of Texas law professors, Van Orden went to court in 2002 and has been going ever since. He’s lost at every turn; now he’ll get his day at the U.S. Supreme Court on March 2.

It’s a red-letter day for the lucky politician who gets to “defend” the Ten Commandments. He’s Greg Abbott, the 46-year-old attorney general of Texas and protégé of George W. Bush. The Department of Justice knows a PR bonanza when it sees one; it has requested time to help protect the Texas-Moses axis. Perhaps newly confirmed Attorney General Alberto Gonzales, who served on the Texas Supreme Court with Abbott, will want to join his Texas colleague on this legal Mount Sinai.

Why am I bothering to tell you about the case of Van Orden v. Perry? Because it’s the kind of cultural skirmish that illuminates larger matters: the strengths and weaknesses of the Republican Party as it enters the rococo phase of the Bush years, and the route the Democrats might follow to get out of the desert they’ve been wandering in lo these many years since the ’60s.

By now there isn’t a living American who doesn’t know that the GOP has prospered as the tribune of red state, Bible Belt culture. This alliance—arguably the most fundamental fact about American politics in the last 40 years—was first forged when Barry Goldwater (ironically, pretty much of a libertarian himself) took the Deep South out of LBJ’s Democratic Party in 1964.

Playing to a Bible-respecting Nation
This historical arc reached its zenith in South Carolina in 2000, when Bush won the GOP primary there in part by declaring that Jesus was his favorite philosopher. The remark caused gasps in press row and was laughed at by the usual suspects, but most Americans probably thought Bush was stating the obvious. This is, quite simply, a God-fearing and Bible-reading (or at least Bible-respecting) nation. And it has been that way from the beginning. For decades, the GOP piled up easy points by simply invoking our own history.

But that tactic may have reached the limits of its usefulness. For one, we’ve all been reminded—by the horror of 9/11 if nothing else—that we have a heritage of faith and a never-ending need for spiritual sustenance. That message is no longer the exclusive province of “faith-based” Republicans in politics. For another, the GOP has raised sectarian expectations that no secular—that is, constitutional—administration can satisfy and still pass muster in the courts.

Symbolic gestures—court cases about the Ten Commandments—aren’t enough to mollify this crowd. Disgruntled evangelicals are complaining that the Bush White House hasn’t done nearly as much as it had promised to do by way of funneling federal cash to “faith-based” charities around the country. The harder these groups push, the more they risk creating a backlash— from blue-state secularists, of course, but also from faith traditions competing with each other for the holy pork, not to mention flocks who view the government as evil.

A Plague of Reticence
As for the Democrats, there’s no reason they can’t make the Ten Commandments, and the Bible, their own. These days everyone wants to talk about values. But there is plenty in the Old and New Testaments—and in the commandments themselves—for them to cite. End Social Security as we know it? How does that “honor thy father and thy mother”? If the Lord wanted to honor His own creation—and wanted us to do so, too—by observing the Sabbath, what should that say about our respect for His handiwork (a k a the environment)? And of course there is a whole party platform in the social ministry of Jesus—if the Democrats would only get over their reluctance to talk about it.

Ironically, the GOP began connecting to the Bible Belt at precisely the moment when faith-based claims were making their deepest impact on the Democrats. In 1964, the emerging conscience of the Democratic Party was the Rev. Martin Luther King Jr. The civil rights movement he led was based in the churches. Democrats weren’t afraid of that link then, and they shouldn’t be now.

© 2005 Newsweek, Inc.

'Lovers lose ability to reason'

'Lovers lose ability to reason'

Scientists have found evidence that love really is blind. Scans of lovers' brains show that they lose their critical faculties when smitten, making them less able to spot flaws or potential problems.

Just which neurochemical suppresses areas of the brain responsible for critical judgments is not clear, although dopamine is a suspect.

Phillip Hodson, a relationship counsellor and author of How to Make Great Love to a Woman and How Perfect Is Your Partner? warns lovers against acting impulsively during the passionate first stages of a romance.

"People should not take any major life decisions when they are in this giddy state of love. People end other perfectly good relationships, they chuck in their marriage to run off with a Gambian beachcomber," he says.

This recklessness has been seen in celebrity marriages. Singer Britney Spears decided to wed her old friend Jason Alexander after a drinking spree, only to have their union annulled 55 hours later.

Hodson says: "I would advise people to enjoy their love affair knowing that this isn't going to happen more than two or three times in a lifetime but they should realise it is akin to being mad. You become deranged and lose your ability to reason."

The consequences of letting passion override rational judgment has been a common theme in literature. In Shakespeare's Twelfth Night, for example, Malvolio is persuaded to grin continuously and wear ridiculous cross-garters after he is conned into thinking that it is the wish of his beloved.

Scientists, however, do believe the suppression of critical judgment may have a useful purpose as it helps relationships to get started.

Professor Pamela Regan of California University says: "If you don't sweep away the person's flaws to some extent, you're likely to end a relationship."

Sunday Times, London

©Bennett, Coleman and Co., Ltd. All rights reserved.

Fiorina’s rise, fall shaped by traits

Fiorina’s rise, fall shaped by traits

BY GEORGE ANDERS THE WALL STREET JOURNAL

Posted on Sunday, February 13, 2005

URL: http://www.nwanews.com/story/adg/107852

PALO ALTO, Calif. — Unshakable. Self-reliant. Comfortable in the spotlight. Fond of the dramatic gesture. Impervious to criticism. Passionate about the big picture. The kind of person who bounds from project to project, embracing change as a way of life.

Those traits helped Carly Fiorina win the top job at Hewlett-Packard Co. in 1999, an unexpected outsider brought in to run one of Silicon Valley’s oldest and most traditional companies. Now, with her sudden ouster from Hewlett-Packard last week at age 50, her traits are sure to be seen as flaws as well.

Plenty of business issues shaped Fiorina’s rise and fall. After the tech boom ended, shareholders blamed her for the sagging stock price. Longtime employees faulted her for upending the company’s paternalistic culture, known as "The HP Way." Industry analysts chided her for failing to mend Hewlett-Packard’s sluggish computer businesses, even after she pushed through a $19 billion merger with onetime archrival Compaq Computer Corp.

Yet she became front-page news — and a frequent cover story for business magazines — not so much because people cared about server-industry market shares, but because she epitomized an alluring new breed of chief executive officers who combine grand visions with charismatic but self-centered and demanding styles. Psychologist Michael Maccoby called some of them "productive narcissists" in a recent book, arguing that in the right settings, they can accomplish great things. In the wrong environments, he wrote, such leaders fail. Among his examples were America Online Inc. ’s Steve Case and Apple Computer Inc. ’s Steve Jobs. Fiorina was different, of course. Many people called her the most powerful woman in corporate America. But she always said that leadership skills aren’t linked to a person’s sex and asked to be judged on her performance. Last week, Fiorina finally lost her most crucial ally, the Hewlett-Packard board.

1 Directors had bet heavily 5/2 years ago that she, an outsider from Lucent Technologies Inc., would be the dynamic cure for Hewlett-Packard’s stodginess at the time. When criticism of her performance flared in 2001 and 2002, during the height of a shareholder proxy fight over the Compaq acquisition, directors publicly declared that Fiorina was on the right track. This time, they decided she had to go.

Fiorina didn’t return calls and e-mails seeking an interview. At her home in the Silicon Valley foothills, two security guards in sunglasses stood outside the gate to intercept visitors on Wednesday, the day her departure was announced. Before her ouster, she had been scheduled to attend a meeting at the White House with members of the Business Roundtable.

People who have known Fiorina for years say that her spunk and go-it-alone grittiness can be traced back to her teenage years. Her father is a legal scholar and federal judge. During the late 1960s and early 1970s, he moved his family constantly, setting down briefly in California, North Carolina, London and Ghana as he pursued various legal projects. His three children had to make new friends, abandon them, then start over, again and again. "I was always landing in a whole new place," Fiorina recalled in an interview several years ago. "Moving my senior year was really hard. It’s a time of stability for most people. But you learn to be pretty selfreliant. It didn’t scare me any more."

Fiorina ended up in business by a roundabout journey. She majored in medieval history at Stanford University and briefly attended law school before dropping out and later earning master’s degrees in business. She was a rising star at Lucent in the 1990s and impressed people who watched her in boardroom settings with her decisiveness and her crisp presentational skills. But she lacked a technical background, and critics sometimes accused her of valuing boldness over precision or follow-through.

When Hewlett-Packard began a nationwide search for a new chief executive officer in 1999, Fiorina rocketed to the top of the candidates list. She was 44 at the time, and her vitality seemed to directors to be what was needed to speed up the company’s way of doing things. Of all the finalists in the search, she spoke most respectfully of the civic-minded values championed by Hewlett-Packard’s founders, David Packard and William Hewlett.

But once she got the job, Fiorina’s efforts to fit in with the HP Way hit some bumps. Soon after she arrived, an ad campaign featured her standing before what was portrayed as the one-car suburban garage where the company was founded in the 1930s. In fact, it was an ersatz garage erected on Hewlett-Packard property; camera crews couldn’t gain access to the real thing.

Fiorina aggressively reorganized Hewlett-Packard’s business units in her first year, then dismantled some of those changes when they created unexpected snags. She was forced to lay off 6,000 employees, about 7 percent of the work force, in 2001, as the economy stalled. It was Hewlett-Packard’s largest layoff ever and deeply jolted morale.

When she proposed the Compaq merger in September 2001, Hewlett-Packard’s stock stumbled badly at first. Powerful shareholders, led by Walter Hewlett, a co-founder’s son, waged a proxy battle to try to stop the deal.

Fiorina narrowly prevailed in a shareholder vote in March 2002, in part by portraying the merger as something that would help Hewlett-Packard achieve greatness. But close confidantes at the time say the merger battle took a toll on her. She became more brittle in confrontational settings, seldom giving ground, staying focused on facts, but doing little to warm her audiences.

With the merger falling short of expectations, Fiorina has repeatedly been on the defensive. Over time, that has grated on some Hewlett-Packard managers, causing them to jump ship and join competitors. Fiorina has said that she doesn’t believe Hewlett-Packard lost many valuable executives in the process.

Fiorina’s future is undecided. She has enjoyed good working relations with both President Bush and California Gov. Arnold Schwarzenegger, leading to periodic questions about the possibility of political ambitions. In prior interviews, Fiorina has generally demurred, saying: "I’ve never thought about the next job. Never."

Fiorina's Lesson for Female CEOs

For HP's now-sacked chief, here's why gender mattered: Like so many women execs, she never got the necessary operational experience

Before picking Carly Fiorina as CEO, the board of Hewlett-Packard (HPQ ) brought in a team of psychologists to determine one thing: Did she have the right personality to transform the company's egalitarian culture? By administering a 340-question test -- which seeks responses to statements like "I don't try to keep up with the Joneses" and "I seldom feel like hitting anyone" -- the corporate shrinks made the call that Fiorina and the icon of Silicon Valley were a good match.

But shortly after she accepted the position, an executive coach gave Fiorina a prescient warning. If she pushed for too much change, too fast, HP's "cultural antibodies" would attack her.

Turns out the coach was right -- but not for the cultural reasons one might have expected. From the day she took the top job at HP five years ago, Fiorina was steadfast in her refusal to discuss her gender as it related to her job. She declared there "was no glass ceiling" -- something that had the female masses of Corporate America murmuring in disbelief. She turned away any and all interview requests for stories related to her membership in a club so tiny -- the one of female CEOs of Top 500 companies -- that you could barely make two golf foursomes out of it.

CHARISMATIC SUPERSTAR. That's why the question continues to course through the Fiorina narrative: How much did her gender contribute to her failure? The answer isn't so easy. In one sense, she was replaced for the same reason male CEOs are replaced all the time -- an inability to show results. HP's stock price fell 32% during her tenure. But what doomed Fiorina's reign seems to have especially plagued other top-ranking female executives -- a lack of operating experience.

Gender certainly didn't hurt on the way up. The fact that Fiorina was an Armani-loving blonde garnered staid, old HP unprecedented media attention and helped it sell its turnaround story. Fiorina's style also drew massive critical scrutiny in her nasty proxy battle over HP's merger with Compaq.

Before she alienated workers with the private jet and the posse of security guards, HP workers loved the idea of the charismatic superstar and her bold plans for a shakeup. She took control at the height of the Internet bubble. Who didn't want a rock-star CEO? And who was easier to get on a cover of a magazine? Glamorous Carly or former HP CEO Lew Platt, who drove a Ford Taurus and wore old glasses with thick lenses?

A TOO-GOOD MARKETER. No one ever doubted that Fiorina was a master saleswoman. She read the company's "HP Way" five times, nailed solutions to what ailed the outfit, and knew how to put the pieces in place before anyone knew what the pieces were. She was a charming, funny, lightning-quick study.

She had one problem, though. Her background pretty much started and ended with marketing and sales. In fact, she may have been too much of a marketer for her own good, with her silver-tongued sales pitches winning the company more plaudits than it deserved.

Certainly, the evidence strongly suggests that she oversold the benefits of the fractious merger with Compaq, which has been a dud for shareholders. She also spent copious amounts of time glad-handing customers, politicians, and other CEOs when some of that energy may have been better spent on the operations. Fiorina was unavailable to comment for this story despite several efforts to contact her.

WRONG CHOICE? For all of the board's due diligence, they missed the obvious warning signs. Fiorina came from a different industry (telecom) and lacked the kind of manufacturing, engineering, finance, or research experience that would have helped her to execute her vision at HP.

Some insiders opine that she probably shouldn't have gotten the job in the first place. In fact, recruiters say it's rare that somebody without much operational experience would get a CEO job of such magnitude at such a complex company -- especially in an industry that was so new to the incoming exec.

Some blame the lack of broad-based operational expertise for Fiorina's missteps in setting unreachable targets for Wall Street, even as she pushed through a radical internal overhaul. During her tenure, the once-venerable computer giant missed expectations in 8 of 21 quarters-- more than twice the number of misses by IBM (IBM ) and Dell (DELL ) combined during a similar period.

MISSING KEY. Yet, Fiorina may have been emblematic of the issues facing her gender in one crucial way. She found out the hard way why women are in short supply as CEOs. Sure, some still face outright sexism from the whiskey-and-steak culture of the old boy's club. But the biggest problem may be that most women are never really groomed to run a major corporation -- often rising through the ranks of marketing, human resources, or other staff jobs associated more with female employees than males. The women often don't get broad profit-and-loss experience that exposes them to different functions in the company.

"If you look at what CEOs tell us, the key to rising to the top is being a good manager and getting line experience," says Ilene Lang, president of New York City-based women's research group Catalyst.

The figures bear Lang out. Though women make up half the managerial ranks in Corporate America, only 15.7% were corporate officers in 2002 (the latest year for which data are available), according to Catalyst. Of those, fewer than a third were line officers, or ones with direct operational responsibility. The large majority were in staff jobs.

CONTRADICTORY TRENDS. Yet, operational exposure is especially critical when you're a hotshot being handed a tough turnaround situation, as Fiorina and many other women often are. Add to this the sense that, in one former CEO's words, "as a woman in charge, you often feel utterly alone."

Following the money also tells the story: In a world where scorecards are made of paychecks, a tiny 5.2% of women are among the top-earning corporate officers.

When it comes to promoting women, two seemingly contradictory trends are at work. On the one hand, companies are often reluctant to put women in challenging senior positions for fear that they might fail in full public view. Yet, with so few women in the senior ranks, companies also have a tendency to pluck the hard-charging stars and plop them squarely in the spotlight before they're ready.

EXPERIENCE GAP. That's the best explanation of why the average age of female CEOs in the Standard & Poor's ExecuComp database, which tracks more than 1,500 small- to large-cap U.S. companies, is 51.5, vs. 55.4 for men. (The gap was even larger before Fiorina joined the tiny club of women top execs.) Many are sharp, accomplished CEOs with celebrity status. But when running a major corporation, four years of experience can make a big difference.

Consider the track record of Mattel's (MAT) Jill Barad. Like Fiorina, she was a crackerjack marketer and was credited with boosting the Barbie brand. But she turned out to be a poor team builder and financial naif who overpromised to investors. In her three years as CEO, Mattel went from a well-run, profitable toy giant to chaotic, money-loser. Earnings tumbled. And Barad was finally forced to quit in February, 2000.

Long-time board member William D. Rollnick called her "the best marketing person I've ever met." But she had little grasp of the other functions critical to her job, such as manufacturing, finance, and building a team of effective leaders at the top.

EXECS IN SYNC. Fiorina might have studied another, more positive lesson from Avon's Andrea Jung. She's closely teamed with Susan Kropf, Avon's president and chief operating officer, who has extensive operating experience. Jung is the leader in marketing, strategy, and vision. Kropf is the master at execution and operations. The duo are remarkably in sync when it comes to what needs to be done at Avon -- to the point, Jung notes, where "we actually finish each others' sentences."

That said, Jung argues that her 15 months as chief operating officer -- a job the board gave her in 1997 because members felt she wasn't ready for the top job -- were critical in preparing her for the CEO role. "It gave me greater scope as a CEO and a better appreciation of all the parts and linkages of this business to make the right decisions," she says. Promoting the marketing star before testing her in that role was out of the question, adds former CEO James Preston. "She had not had an operating position," he adds. "That's a different set of skills."

For Fiorina, a stronger footing in operations might have helped to raise her performance on the job at HP. Instead, for years, she steadfastly refused to even consider hiring a COO, questioning why her critics wanted her to have one while male CEOs at other big tech companies didn't. It was a convenient defense. Unfortunately it belied the evidence: HP had recurrent operational problems, and those other companies did not.

We may never know the extent to which she was denied the opportunity to learn operations -- or failed to recognize the need to broaden her experience before reaching so quickly and dramatically the top. But her fall, like that of all fallen corporate leaders, ultimately lay in her inability to effectively manage the myriad factors that have an impact on the bottom line.

A shoe-string Valentine's Day Special

A shoe-string Valentine's Day Special Hansa Subramanian

Anand has been looking forward to his first Valentine’s Day with Aprajita. Just one small problem, he is low on cash and does not know how to gift her something special. Do you want to gift her the moon but are unfortunately perennially bankrupt? Well, cheer up! There’s no need to despair; you do not have to make a dent in your wallet to tell her how special she is. Here are things you can do to tell the someone special in your life how much you love her. If she’s your Mona Lisa, be her Da Vinci If you are good at sketching then try sketching her portrait with a note attached to it, reminding her how special she is. Buy an ordinary coffee mug. Get acrylic paint and draw a heart and write the three golden words or something as simple as ‘You are special’. She is bound to find your gesture very touching. You can even flick a plain unused white cloth which might have been lying waste at home. Put it to better use. Paint your love on it, tell her all those things you have been wanting to tell her for a while now. If you know embroidery then try to embroider that special feeling on a pillow case or bed sheet. The three profound words that describe your feeling are a must here. Search the internet for e-cards. Make a collage. The photographs which have been kept inside the drawers will be of immense help here. From the first time you met her to the first day you went out together, the day you felt that she looked so pretty that you found it to difficult to take your eyes of her, if you have pictures that capture those moments this is the time to use them. Walk down memory lane and relive those special moments again. If you think you can do block printing get a potato cut into two halves and carve out a heart on one of the halves. Dip into red paint and try your hand at block printing. Feed her love Rather then spending time at an expensive hotel and shelling out money, try to make dinner or lunch at home. If you do not know how to cook take help from a recipe book. Cook a meal that she will remember. She will anyway, for it is not everyday that you volunteer to cook. Try to bake a cake, chocolate cake would be ideal. Try this recipe out – and don’t panic – our truly unique recipe doesn’t even require cooking! Rich Chocolate Slices Ingredients : Half cup butter preferably white 2 tablespoons honey 4.5 tablespoons cocoa 225 gms semi-sweet biscuits 2 tablespoons raisins 2 tablespoons chopped nuts (walnuts, almonds, or peanuts) Preparation : Crush the biscuits. You can do it by putting it into a clean bag, and then beat the bag gently, or use the electric grinder. also grind the nuts. Put the butter, honey and cocoa into a pan & put it onto gentle heat. Stir occasionally, and REMOVE as soon as the butter melts. Stir the butter, honey and cocoa together thoroughly. As soon as the butter mixture has cooled slightly, add the crushed biscuits and nuts. Stir thoroughly. Take an about 2 cups capacity cake tin, and grease it. Put half spoon of butter inside, and rub thoroughly at the base. Now pour in the biscuit mixture, and press in slightly. Put the tin in refrigerator to cool and set in. After sometime, you can put the tin in warm water, and then invert the tin on a plate. Cut in to thin slices and serve. Add the scoop of ice-cream for special effect. “EK ladki ko dekha to aisa laga” It is said Javed Akhtar penned this beautiful song for Shabana Azmi. You might not be a Javed Akhtar, but if you have a flair for writing, use it. Try writing a poem which reminds you of her and all those moments you have spent together. If you feel writing is not your cup of tea, you do have net to turn to. Download the poems from the net which best describe your relationship or your feelings. Or if you feel being poetic is too metrosexual for your liking, just take a paper and pen down what she means to you. Just write on a pretty notepad and you could stick cute love stickers on it. Strum your way to her heart If she happens to be a music buff and you can play the guitar like Eric Clapton then you practically need nothing to floor her except that guitar of yours. All you have to do is serenade. Get down on your knees and play her one of the Bryan Adam’s number like ‘Please forgive me’ or ‘Everything I do’. If you cannot play the guitar try singing, as long as you are a good crooner. There are a number of songs to choose from, remember, John Denver (A song for Annie) to Rod Stewart (Have I told you lately). Record all those numbers and gift it to her. She will be delighted. Incase you are not a good crooner, just download some love songs from the net. If you love listening to the radio then you can record it from the radio. Call it your love special. Do not have a recorder? Beg, borrow and steal from your friend. And for those of us who are avid radio listeners what better way can there be to woo someone than to dedicate a song to the people we love?

What Does Rupee Appreciation Mean for the Economy?

What Does Rupee Appreciation Mean for the Economy?

by M Rafeeque Ahmed*

Currencies appreciate when the economies are doing well and the rise in their values is a cause for celebration. The high value of the Deutsche Mark when Germany was the trendsetter for the world economy in the 1960s and the 1970s, the high value of the Yen in the 1980s when Japan Inc seemed set to take over the world, and the Dollar's high value in the later 1990s when the US new economy brooked no competition were sources of immense pride for the respective countries. An appreciating currency is the natural corollary of a booming economy with rising exports, and is normally looked upon favourably. Before we analyse the effect of the appreciating rupee on various segments of the Indian economy, let us examine the causes of the appreciation.

The causes for the rupee's appreciation after years of continuous depreciation are apparent. The current account surplus for the first time in years (it has since reversed), due to increased merchandise exports and invisibles, has resulted in supplies of foreign currency going up sharply. The huge FII inflows into financial asset markets (over $3.9 billion net inflows in the first 10 months of this fiscal), and increasing reliance on low cost foreign loans (the RBI has approved ECB borrowings to the tune of $1.7 billion in the April-June quarter alone) add to the supply, and help power the rupee higher.

The heartburn on the rupee's appreciation against the dollar is due to the fact that most of India's external trade is invoiced in dollars, and any change in the dollar's rupee value has a disproportionate effect on the various stakeholders in the rupee's external value such as importers, exporters, borrowers, lenders and consumers of imported goods.

Though exporters have seen their profit margins shrink, exports on the whole do not seem to have been affected seriously by the rupee's appreciation. The slowdown in exports in the past few years has been more due to global economic conditions than due to the rupee's rise. There is also no direct co-relationship between appreciation /depreciation of the rupee and fall/rise in exports.

Exports in dollar terms grew by an impressive 17.2 per cent in 1999-2000 when the rupee depreciated by 2.90 per cent. For the period 2000-01, when the rupee depreciated by 7.07 per cent, exports grew by a slow 1.7 per cent. In 2001-02, when the rupee depreciated by 4.78 per cent, exports crawled up 1.74 per cent. The trend continued in 2002-03. Contrary to expectations, however, exports registered their highest growth of 11.06 per cent in the April-June 2003 quarter when the rupee appreciated by a high 2.11 per cent.

Exporters are particularly perturbed by the fall in profits arising out of the recent surge of the rupee. The international buyer is not willing to pay to the exporter the extra price accruing from currency appreciation. The appreciation percentage has hence to be borne by the exporter which lowers his export proceeds, and erodes his profit margin. Firms find that their exports are being especially hurt as competitor countries with fixed currency, like China, are quoting very low prices for their goods thereby making the buyers switch over to such countries for purchases, resulting in loss of orders for Indian companies. Exporters also complain of incurring a loss between the period of invoicing and realization of export proceeds on account of rupee appreciation.

According to a survey conducted by some leading organisations, the strengthening of the rupee is particularly detrimental for the low import intensive and price sensitive terms such as textiles, leather and bulk commodities. The possible impact on some thrust segments of the services and goods exports sector could be thus:

Software exports (including ITES) accounted for an estimated 17.9% of the country's exports in 2003-04.

It may be mentioned that while the rupee has appreciated against the dollar, it has actually depreciated against the euro for the period between August 6, 2004 and December 1, 2004. It is important to note here the contribution of the US to the total revenues of software companies, which are dollar denominated.

For the software services companies in India, 85-90% billing is in US dollars. Therefore, the recent rupee appreciation will have a negative impact on the software sector. The magnitude of impact is likely to differ for companies. Many software services companies have hedged themselves against the dollar for the next twelve months, and to that extent, the impact is mitigated. The new contracts that are likely to be signed will factor in this rupee appreciation, and to that extent, there will be a negative impact.

The rising rupee is expected to dent realisations of the Indian textile industry in the current financial year. Textiles, including garments, forms a major part (about 19%) of the export basket and is one of the main contributors to the forex kitty. A one per cent rise in the rupee would lead to a decline in profitability by 1.2 per cent, textile industry sources say. Therefore, on an average, 6.45 per cent of the export earning is being affected due to appreciation of the rupee. Garment exports grew by only 1.25% in April 2004, whereas the textile sector showed a marginal growth of 4.5% in the same period.

Leather is also a price sensitive sector, particularly finished leather, leather components and travel goods. In shoes and garments, the industry is moving up the value chain and, therefore, is able to absorb the appreciation. However, the sector as a whole was affected, and showed a growth of only 6.06% in April 2004.

The gems and jewellery industry remains unaffected by the rising rupee. The diamond industry has more than 90% import intensity and rupee appreciation has considerably reduced the cost of their inputs. The increase in demand on the contrary led to 52% growth in April 2004, as compared to the corresponding period in 2003

The auto ancillary sector has been one of the biggest drivers of export earnings in recent years. About 15-20 per cent of the total auto component production is exported. However, only 30 per cent of the billing in the auto ancillary sector is dollar-denominated. For some big companies, almost all their billing is euro-denominated and the rupee has remained weak when compared with the euro. So, the impact of the rising rupee has been cushioned to that extent.

The biggest beneficiaries from rupee appreciation are importers, as the dollar is now worth less for every rupee or, to put it in different terms, less rupees can buy more dollar-denominated assets / commodities / goods. Companies that source raw materials from the global markets and are largely domestic demand driven can potentially witness margin improvement.

The Indian consumer is a big beneficiary too, as costs of a host of imported goods - from petro products to electronic, electrical and consumer items - would be higher, but for the rupee's appreciation. The rupee's appreciation is one of the reasons for the current low inflation rate.

The weakening dollar is bringing in money into the country, which is likely to be short term, because once the US raises interest rates again (which is more likely), the India story might fade away, and the current strength being witnessed on the back of strong FII inflows will weaken.

In this era of globalisation, a stronger rupee would also mean that Indian companies can now acquire overseas assets at a lower cost. Indian companies going abroad to acquire foreign companies should find the going better as the rupee gains. This should make overseas acquisitions attractive for domestic companies.

courtesy:http://www.fieo.com/fieonews/2005/january/ahmed.html

We don’t talk anymore

We don’t talk anymore

As Bihar goes to polls, have you listened to the national debate?

Vandita Mishra

Angry voices filled television screens. Shared outrage at the abduction of school-going children in Bihar was only broken by the comment from one of the talking heads. So electorally futile, he shrugged. Laloo has yoked nearly 17 per cent Yadav to 16.5 per cent Muslim and that adds up to a 33.5 per cent vote which is mostly rural — outside the pale of Patna and TV and outrage over kidnapped children. Kishalay is back home and after the first round of voting, exit pollsters have predicted cracks in the Muslim Vote. But as a crucial state in the world’s largest democracy goes to polls in the year 2005, the picture remains the same: it features a dehumanised rogue creature and bloodless calculations of electoral math. It is ghoulish, this easy oscillation from apolcalypse-now to political sums. We need to ask whether the tenor of public debate on Bihar reflects unhealthy things not just about Laloo and his Bihar but also about the terms of national debate. We need to wonder about the larger complicities in Bihar’s much advertised secession from the nation’s heart, its imagination. The danger, once more, is this: Laloo Prasad Yadav will have his day out — that process began on February 3. But the ways in which we talk about Bihar, the ways in which we imagine its future, will remain unexamined. For all our sound and fury, we are content to sketch the contest in such apolitical ways. It is, always, Laloo versus Anyone But Laloo. The state languishes at the bottom of the development heap. Laloo’s been in charge, directly and by proxy, for the last 15 years. So where is the alternative leader, what is the alternative agenda? The poverty of options in Bihar is only matched by the reluctance of public debate to dwell on the matter. Look around Laloo, it’s the same difference. Nitish Kumar is presumably striving for a ‘‘secret’’ pact with Ram Vilas, as he told the media recently, with that remarkable lack of bashfulness about keeping secrets from the voter. Paswan? He’s fighting Laloo but supporting Congress which fights and supports Laloo. Paswan has got a number of local strongmen to switch sides to his party to match the RJD’s menagerie of local mafiosi. We view this lack of alternative at ground level with implacable inevitability. We have surrendered all the deliberative spaces at our disposal to interrogate the lack of responsible leadership in Bihar, possibly even to coax it out of its traps. What explains the great estrangement of Bihar from the national debate? It is the state’s ‘‘sunset’’ politics, centred on the state, economist Shaibal Gupta argued in this paper recently. Bihar remains un-integrated with states where a ‘‘sunrise’’ politics flourishes, the market at its centre. This is the ‘‘burden of history’’ argument. It plays back the fact that Bihar was among the states saddled with the more iniquitous land tenurial system — the zamindari system — as opposed to the ryotwari system which allowed the growth of incentive structures for investment and entrepreneurship. This argument dips into colonial history. But the story of Bihar’s terrible alienation from the national mindscape can also be told from a nearer vantage point in the 1990s. Beginning in the 1990s, Indian politics was reconfigured in deep and structural ways. The one-party dominance system, which had the Congress as centrepiece, collapsed and splintered. Politics shifted its primary locale from the Centre to the states. Mandalisation reframed the rules of the political game with backward castes breaking free from the patron-client relationships forged by the Congress and announcing their political independence through parties like the RJD, SP, BSP. Political competition became more intense at the Centre and in the states. At the Centre, national parties were forced to make space for regional parties. The urban middle classes, keepers of the national debate, have had to come to terms with a shift in the centre of gravity away from themselves: away from the Centre to the states; from national party to regional parties; from upper castes/classes to backward castes/classes. But a decade and half after the political dynamic became apparent, the discomfort persists. It comes up in proposals of electoral reform that lobby for closing the field to new entrants and smaller players. It was there recently in CEC’s Krishnamurthy’s recommendation to make it mandatory for regional parties to tie up with a national party and to fight on the latter’s symbol in parliamentary elections. The onus is still on regional parties to prove their innocence. This story has taken a few reassuring turns of late from the perspective of the urban middle classes, there are signs of a return to order. At the Centre, the contest is settling down between two coalitions, each run by a national party that seeks to domesticate regional partners. After the churning, a process of bipolarisation is visible in most states. Either a straight two-party competition or a competition between two coalitions has become the format of political competition in the states. But not in Bihar. Bihar remains an obstinate exception to many rules. The state where the electoral field remains carved out in many mutinous pieces. A state where the national parties remain bystanders as regional parties slug it out. Where the fight for power has become an internal matter to the bloc of backward castes and the small percentage of upper castes may not manage a casting vote. At the same time, Bihar is also a state where this intense social churning has neither stilled nor delivered. It goes on and on, an end in itself, unwilling to transcend its own ineffectual motion. The politics of empowerment is tragically stillborn in Bihar. It has yet to find a purpose larger than itself. Empowerment for what, we could ask, in a state where the universities are dying and entrepreneurs are discouraged? But we don’t ask. So upset are we at Bihar for being the recalcitrant state, we don’t talk to it anymore. Except at election time, and then with a bare civility. We certainly don’t engage with its vexed questions that might suck us into the hard search for answers. Leading democratisation theorist Alfred Stepan recently proposed a more ‘‘useable grammar’’ to meet the maturing practice of federalism in countries like India. ‘‘National’’ parties could be called ‘‘Polity-Wide’’ parties and ‘‘Regional’’ parties renamed as ‘‘Centric-Regional’’. As we stare unseeingly at Bihar going to the polls, the distinction is less esoteric than it seems.

URL: http://www.indianexpress.com/full_story.php?content_id=64417

Baby Elephant Walk

Baby Elephant Walk

The Nepal crisis has exposed India’s limitations as a major power: We do not offer carrots that are attractive enough for our neighbours to love us; yet our stick is not strong enough for them to fear us

PRATAP BHANU MEHTA

The crisis in Nepal has brought home India’s limitations as a major power. Not only did the King blatantly ignore India’s advice and concerns, the timing of the dismissal was designed to cause maximum embarrassment to India. But even more importantly, it has exposed how limited India’s options are when it comes to dealing with its neighbours. A great power ought to be loved or feared or both. We do not offer carrots that are attractive enough for our neighbours to love us; yet our stick is not strong enough for them to fear us. We yet again helplessly watch Nepal drift by. We do not appear to have the military capabilities to transplant democracy or bring the Maoists to heel. Nor do we have other forms of soft power to greatly influence the outcome. We once again are left to pick up the pieces. The same goes for our relations with Bangladesh. We do not have enough incentives to offer to make the regimes there be more accommodating. On the other hand the threat of force seems, at best, empty. Think further down of Myanmar. The need to solicit their cooperation in dealing with insurgency in the North-East has made us warm up to a junta whose own brutal history should have made us more wary. With SAARC again we are caught in the middle. There may be good reasons to have postponed the SAARC summit in Dhaka, but it is difficult to escape the impression that once again we have not been strong enough to read out the riot act to our neighbours in public. Denying the King a photo-op, or avoiding going to Dhaka in the middle of an Awami League protest against the assassination of a former finance minister may have been sound reasons to cancel the summit, but then we ought not to have hid behind MEA euphemisms like the security concerns in Bangladesh or the crisis in Nepal. Some might think such a stance to be arrogant, but the fact that we do not have the luxury of being arrogant is a true measure of our power. No one seems to see our humility the way we do: as humility rather than incapacity. To be fair to India, we are surrounded by regimes that are so determined to undermine the welfare of their own people that they do not respond to normal incentives. There is a Chinese saying that some people pick up rocks to crush their own feet. The actions of the regimes in our neighbourhood have this quality. Nepal would rather stop development than listen to India; Bangladesh would rather impoverish itself than trade energy with us; Pakistan remains too uncertain about its identity to think long term. This makes it more difficult for India to offer the usual incentives that countries respond to. There is a line of thinking that suggests that India’s relative weakness comes from its reluctance to use force. This is true enough, but the question is whether we have the relative capability to successfully deploy force with our neighbours even if we wanted to. Our own experience with the IPKF in Sri Lanka, or dealing with home-grown insurgencies, suggests otherwise. Another possible option is to target regimes through low-level warfare of the kind that Pakistan engages in with us. But this has serious limitations. This kind of warfare is good at inflicting damage but it rarely transforms regimes. In the short run it may even embolden them. And if escalated, they could unleash general chaos whose consequences are not easy to control. Our options on the use of force are limited. And the simple truth is that no nation is feared unless it has the capacity to use overwhelming force. India can also take some consolation in the fact that the 20th century is replete with examples of weak states creating havoc enough for strong ones. The Americans in Vietnam and Russians in Afghanistan were both brought to heal by nominally weaker adversaries. Cuba has forever been mocking the US, Our neighbour, Pakistan, is an even more curious case in point. There is something admirably roguish about the way in which Pakistan, for years, subverted the two greatest foreign policy objectives of its mighty ally: nuclear non-proliferation and terrorism. Of course, the Americans needed Pakistan for their own strategic purposes, but that is precisely the point. Despite Pakistan’s immense dependence on the US, the US could do relatively little to prevent Pakistan from sustaining its two worst foreign-policy nightmares. Or even if they do not inflict outright defeat, weak powers can cause considerable damage. They can partly do this by playing other powers against each other, as Nepal will try with China. They can also do this because diffused violence and infiltration turn out to be something very difficult to combat. Weak states can be very obdurate. The lesson in all this is the following. Most foreign and military policy is premised on matching strength with strength, surpassing force with more force. But such policies have relatively little effect on groups or states that, conscious of their relative weakness, can nevertheless devise strategies to inflict substantial costs on their more powerful adversaries. It is easier to deal with adversaries that trade in the currency of power than it is to tame groups that turn their relative weakness on its head. And it is easier to deal with regimes that are playing the same game as you are, not with those that are on the path of self-destruction. So perhaps India ought not to take what transpired in Nepal too personally. In terms of the structure of our relationships we just have very limited options and we ought not to pretend otherwise. But we need to rethink our long-term strategy for the region. As Machiavelli suggested, there is no such thing as being half-loved or half-feared. But our entire strategy for the region seems to have been premised on half of each: so we lose credit for our generosity and take the sting out of fear. Unfortunately the time may have come where we may have to make a choice about consistency in strategy. If we are not shy about our power, we have to devise strategies to effectively project it so that it is an effective deterrent. On the other hand if we are not sure that we can project power, at least let us go all the way we can with what might be called the love strategy, otherwise known as the Gujral doctrine. But meanwhile, while we procrastinate over what kind of power we want to be, we can be forgiven for those who are singing an adaptation of the old Raj Kapoor song, ‘Chino Arab hamara, Hindustan hamara/Nepal, Bangladesh nahin hain, par sara jahan hamara’. Welcome to Great Power status.

URL: http://www.indianexpress.com/full_story.php?content_id=64420

Carly Fiorina Out at HP: Why Her Big Bet Failed

Carly Fiorina Out at HP: Why Her Big Bet Failed
Buying Compaq hasn't paid off for Hewlett-Packard's investors. Not by a long shot. Now, nearly three years after the merger, there is still no easy solution to HP's problems.
FORTUNE
Wednesday, February 9, 2005
By Carol J. Loomis

Editor's Note, February 9, 2005: The chairman and CEO of Hewlett-Packard is leaving the company immediately, after being forced out by the board. "While I regret the board and I have differences about how to execute HP's strategy, I respect their decision," Fiorina said in a statement. Fiorina, one of America's most powerful women in business, had engineered the purchase of Compaq. As Carol Loomis's cover story from the February 7, 2005 issue of FORTUNE explains below, buying Compaq hasn't paid off for HP's investors. And there's no easy way out.

It has been just over six years since Carleton S. Fiorina, now 50, burst upon the national stage—and we will acknowledge straight out that FORTUNE played a role in putting her name in lights.

Back at the takeoff point, in 1998, she was the accomplished, high-energy president of Lucent Technologies' core business. FORTUNE, publishing its first-ever ranking of the 50 most powerful women executives in the U.S., put her smack at the top of the list. A line heading the accompanying article said, "It may surprise you that our No. 1 woman is someone you've never heard of."

That was the end of Fiorina's quasi-obscurity. Less than a year later she was named CEO of Silicon Valley's famous Hewlett-Packard. That post, making her the head of a company that now has $80 billion in revenues and is the 11th largest in the U.S., vaulted her to a level in the corporate hierarchy that a woman had never before attained. For years she had a near lock on first place on our annual list of women executives (though she was edged out last year by eBay CEO Meg Whitman). Her reputation bloomed, heading toward rock-star celebrity. She became one of the few businesspeople identifiable by her first name: She was just "Carly." Totally poised, she gave countless speeches; she became the only woman extant who never had a bad-hair day; she was the subject of endless rumors that she might move on to politics.

But celebrity, as everybody knows, isn't an achievement in itself. Beneath the public image are the yardsticks against which executives are—and should be—measured. So it is right to ask whether this whirlwind has succeeded. And inevitably that question must be answered in two parts. First, under the only lens that matters, did the famed merger that Fiorina engineered between HP and Compaq produce value for HP's shareholders? Second, with that merger nearly three years past, is HP in shape to thrive in its brutally competitive world?

Losing the HP Way

Walter Hewlett

Losing the HP Way
Carly Fiorina may have triumphed over Walter Hewlett, but the effort to save her company's share price came at a cost: Silicon Valley's soul.

- - - - - - - - - - - -
By Jeff Goodell

March 22, 2002 | So the proxy battle of the century appears to be over. Carly Fiorina won. Walter Hewlett lost. The jazzy, boardroom-smart CEO of Hewlett-Packard will get her wish, and the hoary old Silicon Valley legend will gobble up Compaq, forming a $20 billion monster that will do battle with Dell and IBM. It will be years before anyone can judge whether this is a brilliant move or just a mindless "What the hell else are we gonna do?" attempt to boost HP's sagging stock price. I tend to think it'll be the latter, but then, I'm not an investment banker or HP executive who stands to make millions off the deal if it goes through.

I do, however, have strong feelings about what was at stake in this battle. I grew up about two blocks from HP's Cupertino campus, which was sited in the middle of an old apricot orchard, and my uncle worked for the company for over 20 years. I heard stories of Friday beer bashes and free donuts and coffee; everyone I knew who worked there seemed to love their work -- they couldn't say "HP" without throwing their shoulders back a little bit and standing a little straighter.

As a kid, I used to ride my Stingray bicycle around in the HP parking lot, attracted by the mystery and wonder of what was going on behind those tinted-glass windows. It was not only the cool technology HP built that wowed me, but the sense that it was helping to build a better world. For an entire generation of Silicon Valley entrepreneurs, including Steve Jobs, who has often said that HP was the inspiration for the freewheeling corporate culture at Apple, HP represented the dream of a company that was not just fun to work for and treated its employees well, but which was built upon a foundation of loyalty, trust and community service. It was the embodiment of ethical capitalism. Indeed, it's hard not to contrast HP's proxy battle with the sorry unraveling of Enron, a company whose most deeply held ethical commitment seemed to be making sure the strippers were tipped generously before they left the party.

During the proxy fight, Fiorina's intelligence and commitment to pushing ahead with the $20 billion deal were impressive. Nevertheless, I was rooting for Hewlett all the way. In his day job, Hewlett runs the William & Flora Hewlett Foundation, the 19th largest foundation in the U.S., and has served on the HP board since 1987. It wasn't that I was convinced that his vision for HP was shrewder than Fiorina's (basically, Hewlett argued that HP should avoid the cutthroat PC business and focus on printers and related hardware). I mostly just liked the fact that a Silicon Valley native was speaking out against the reigning ethic of more, bigger, faster. Naturally, the pro-merger spin machine dismissed him as an "an academic and musician" (he has a Ph.D. in music and plays 10 instruments) who knows nothing about how to run a business.

Oddly, the real battleground in this deal was not the spreadsheets of the 21st century, but the Palo Alto garage where the company was founded in 1939. The garage was, as HP's pro-merger ads tirelessly reminded readers, the birthplace of Silicon Valley. To her credit, Fiorina has always understood the mythic power of HP's past. Not long after her arrival in 1999, HP started its "Back to the Garage" ad campaign -- a patently absurd notion for a company with 96,000 workers all over the world. But paying homage to the gods of the garage gave Fiorina some much-needed street cred, while also providing cover while she slashed jobs and reorganized the company.

During the proxy fight, Fiorina employed a similar strategy. Her pro-merger team brilliantly neutered Hewlett's emotional appeal by co-opting the iconography of the past -- for weeks leading up to the vote, you couldn't open the business pages without seeing pictures of Bill Hewlett and David Packard in their shirtsleeves, looking like primal geeks from the 1940s. Fiorina argued that her grow-fast-or-die strategy reflected the founders' true entrepreneurial spirit -- pro-merger ads quoted David Packard: "To remain static is to lose ground." The whole subtext of this battle, ostensibly about HP's future, in fact turned on one key question: "What would Bill and Dave think?"

Casting herself as the true heir of the HP Way was a tricky strategy for Fiorina to pull off -- not only because Bill and Dave were manly men, deer hunters, engineers and mountain climbers, while Fiorina, who has a Yorkshire terrier named Pooh Bear, is all corporate polish and saleswoman savvy. It was also tricky because the past doesn't usually carry a whole lot of weight in the high-tech industry -- you don't see Microsoft running many ads with a teenage Bill Gates and Paul Allen huddled around an old Altair. And it's especially difficult to argue that you're channeling the true spirit of the company founders while you're simultaneously dissing the co-founder's son.

Hewlett, of course, rarely spoke about the past. He didn't have to. He personified it. Indeed, if Hewlett were simply a rich 57-year-old academic with a few million shares of HP stock, this deal would have been a slam-dunk. As it was, he used his moral authority, as well as his millions, to lobby shareholders, to ask tough questions, and most important, to force controversial issues into public debate -- such as the proposal made at an HP board meeting for Fiorina and Compaq CEO Michael Capellas to receive a $115 million windfall if the merger went through. In effect, he acted as HP's corporate conscience. And now that he's lost the battle, it's unlikely he'll stick around for long. His spot on the newly merged HP-Compaq board will undoubtedly be taken by more of a team player, and pretty soon there will be no one left at HP with a sentimental connection to anything but the bottom line.

If nothing else, Hewlett's campaign demonstrated one reason why start-ups have such an advantage -- if a company is only 6 months old, there are no old-timers like Walter Hewlett around to cause trouble. When it comes to inventing the future, the past can be a real drag. But that doesn't mean it isn't worth remembering.

- - - - - - - - - - - -

End of a hatchet woman

Carly Fiorina delivers the keynote address at the Consumer Electronics Show in Las Vegas in January.

End of a hatchet woman
Hewlett-Packard's ousted CEO Carly Fiorina destroyed a great company's creative soul and trashed its business.

- - - - - - - - - - - -
By Lawrence M. Fisher

Feb. 10, 2005 | Carleton S. Fiorina's fall from grace was dramatic, as was most of her career. But don't cry for Carly; her way of doing business remains ascendant, and has already triumphed over that quaint set of humanistic values known as "The HP Way."

I well remember my first meeting with Carly, who from an early date seemed destined to be one of those first-name-only stars like Cher or Madonna. Months before Hewlett-Packard named her its chief executive, the company had invited me and John Markoff, my friend and colleague at the New York Times, to spend a day with the engineers at its legendary research labs. But midway through our morning in nerd nirvana, Carly paid us a "surprise" visit.

She was, of course, charming, well-coiffed and coutured, as nearly every article at the time would mention. And as I watched her perform, amid an awkward group of guys who really were wearing short-sleeved sta-press shirts with pocket protectors, I realized I was seeing the new and old faces of Silicon Valley, up close and personal.

On one side of the hall were these unassuming but enormously bright individuals who came to work each day on Page Mill Road, in Palo Alto, Calif., not to make a killing in high tech, but for the sheer joy of inventing cool things. On the other was the perfect pitch person, singing Wall Street's tune absolutely in key.

From early in her six-year reign, Carly's mendacity was breathtaking, as she methodically eviscerated HP of everything the company once stood for. Is that too harsh? Recall the "invent" campaign, launched soon after she joined, where she plastered billboards and ads with the image of Bill Hewlett and Dave Packard's sainted Palo Alto garage, even as she was slashing the company's research budget and laying off scores of real-life inventors. After all, tinkering with the outer reaches of particle physics may be cool, but it's hardly a bottom-line contributor, not this quarter anyway.

At the same time, the truly inventive side of Hewlett-Packard, as well as its historical heritage, was being spun off as a separate company, now known as Agilent. To be fair, HP's board initiated this thrilling bit of stupidity before hiring Carly, but she had plenty of time to stop it and did not.

HP's test and measurement instruments, direct descendants of the audio oscillators that launched the company in 1939, were and are considered the best that money can buy. Despite increasing global competition, these products command a premium price and maintain high profit margins because they are simply higher performing, better built and more innovative than the offerings of other companies. They are, in a word, "differentiated."

Yet Carly and the HP board chose to dump this profitable business to concentrate on commodity products like printers and PCs. Why? The answer at the time was that securities analysts accustomed to following straightforward companies such as Dell Computer really couldn't understand a complex business like test and measurement. And, to be sure, Wall Street's shills fell into lockstep, praising the divestiture as a brilliant strategic move that would, in that tired phrase, increase shareholder value.

As HP's best and brightest headed for the doors, whether they jumped or were pushed, some of them were not shy about calling a reporter who had covered the company for many years. As I talked to these talented people from every level of the company, one interpretation of events emerged with remarkable consistency. Carly had no intention of sticking around Hewlett-Packard for very long, these folks said. Her real intent was to do a quick, Lee Iacocca-style turnaround, accompanied by the best autobiography money could buy, and in 2004 run for the U.S. Senate, against Barbara Boxer.

It seemed a little far-fetched, but soon the photo-op shots of Carly in the company of high-ranking Republicans began proliferating. Even as Carly's script for HP ran into harsher realities, even as Boxer retained her seat, the story never really died. And in retrospect, it offers the only explanation that makes any sense at all of Carly's biggest strategic move. I'm referring here to the acquisition of the Compaq Computer Corp.

Prior to launching that deal, Carly had said her intention was to pattern HP after Lou Gerstner's version of IBM, which had successfully leveraged its low-margin hardware business to sell high-margin consulting services. To that end, she initially negotiated to acquire the consulting arm of PricewaterhouseCoopers, the global accounting firm. She punted at the last minute, and IBM ultimately acquired PwC's jilted consultants at a substantial discount.

Undaunted, in 2002 Carly moved to acquire Compaq, which was bleeding market share to Dell and losing money at an even faster rate than HP's PC business. Never mind that no big merger in the history of high tech had ever really worked; never mind that Compaq itself had already made two big acquisitions -- Digital Equipment Corp. and Tandem Computer -- that had failed to add any value; never mind that Dell rapidly seized on the inevitable uncertainty to take even more customers away from both HP and Compaq. Even the pointed opposition of founder's son Walter Hewlett didn't dissuade Carly and the HP board from this historic blunder.

At the time, I was on staff at a consulting firm that was retained by one of the family foundations to analyze the merger. In the process, we spoke with a number of people close to both companies and their remarks were stunning. "The collision of two garbage trucks," was how one put it. "Doubling down on a dog," was another take. Without naming the firm, or their specific recommendations, it was obvious to anyone who cared to look that Carly's projections could only materialize if IBM, Dell and Sun Microsystems took a collective nap for the next five years, and every single one of her rosiest scenarios came true at once. Any resemblance to the Bush budget is entirely coincidental, I'm sure.

So why did she do it? For one reason: Wall Street loves big mergers. The investment banks collect immense fees for their roles as advisors, regardless of the ultimate soundness of the deal. And their securities analysts all write positive reports, which prompt a lot of rubes to buy shares, which generates a flood of trading commissions. Big mergers and acquisitions are almost always a net negative for the companies and communities involved, but a win-win for the bankers, lawyers and other deal makers.

A second reason is that it should have worked well enough for Carly to declare victory and move on to the political stage. Despite their dismal long-term success record, big mergers usually can "achieve synergies," Wall Street-speak for massive layoffs, which reduce costs enough to show a big if fleeting bump in earnings per share.

There was a brief period where the credulous might have believed that this merger was working, thanks entirely to such redundancies eliminated and other corporate bloodletting. But it didn't last, as Carol Loomis' masterful article in last week's Fortune magazine made all too clear. Loomis did the tough analytical work that the board should have done, published it for all to see, and in the end, HP's recalcitrant directors had to act.

To those who will inevitably say that Carly has been singled out for harsh treatment because she is a woman, nonsense. Anne Mulcahy of Xerox, Meg Whitman of eBay and Carol Bartz of Autodesk, among others, have all shown that a Y chromosome is no prerequisite to performing the CEO's role with quiet competetence. What these leaders share besides their gender is they don't make promises they can't possibly keep.

As the Fortune article makes clear, Carly's numbers didn't work because they couldn't work, which is of course what folks like Walter Hewlett were saying three years ago. And so a once great company is a shadow of its former self, and Fiorina is out of a job. But don't cry for Carly. Given her way with numbers, there's surely a spot for her in the Bush administration. Secretary of the treasury, perhaps.

- - - - - - - - - - - -

No western monopoly on modernity

No western monopoly on modernity

By Martin Jacques

American dominance is bound to wither as Asia's confidence grows.

IN HIS inauguration speech, American President George W. Bush pledged to support "the expansion of freedom in all the world," deploying the words free or freedom no less than 25 times in 20 short minutes.

The neoconservative strategy is quite explicit: to bend the world to America's will; to reshape it according to the interests of a born-again superpower. Even though the Iraqi occupation has gone seriously awry, the United States still does not recognise the constraints on its own power and ambition.

This was something that Europe learned the hard way: two world wars, the rise of the United States and the Soviet Union, and the anti-colonial struggle have taught the European continent the limitations of its own power. That is why Europe today, with the partial exception of Britain and France, and exemplified by Germany, is so reluctant to use military force. The U.S., of course, is the opposite. It measures its power not by its relative economic and technological prowess, which would suggest restraint, but its military unassailability, which implies the opposite.

Nor is this attitude simply a product of the neoconservatives. It also draws on something deeper within the American psyche. The birth of the United States and its expansion across the American continent — the frontier mentality — was an imperial enterprise, involving, most importantly, the

subjugation and destruction of the American-Indians. This is part of the American story, and it helps to inform and shape its global strategy and aspirations.

It is not difficult, of course, for the United States to throw its weight around in the Middle East, a poor and defeated region, one of the big-time losers from globalisation. The world's superpower versus a failed region is a hopelessly unequal contest, especially when the former can rely on the support of its regional policeman Israel, to do its bidding. But this is not the dominant story of our time, even though the Bush regime, in its desire to exploit the country's status as sole superpower, has chosen to define this conflict as the central narrative. History will judge differently. The rise of China and India will have a far more profound effect on the world than a small band of Islamist terrorists.

Indeed, there is something faintly bizarre about the psychotic worship of American values, the incantation of its applicability to each and every country, at an historical moment when, for the first time since its emergence half a millennium ago, the modern world will, in the not too distant future, no longer be monopolised by theWest. It is not difficult to imagine that, by the middle of this century, both China and India will rank among the top five largest economies in the world, with China perhaps the biggest. Nor is this just an economic story, which is how it is generally told. With economic strength comes, in due course, political, cultural and military influence: such has been the case with the emergence of all great powers.

The fact and significance of this, of course, has been hugely underestimated. The dominant view of globalisation is that it is overwhelmingly a process of westernisation: indeed, the neoliberal form of globalisation espoused by the Washington consensus has deliberately sought to define it as such. The prevalent western view is well-articulated by Chris Patten in his book East and West, where the differences between western and east Asian countries, like China, are explained simply in terms of historical timing. The closer they get to western levels of development, the more they will come to resemble the West. Or, to put it another way, there is a singular modernity, and that is western.

Given that modernity is not simply a snapshot of the present, but a product of history, not only a function of markets and technology, but the creation of a culture, then this is utterly mistaken. One cannot make sense of American modernity — and how it diverges from European modernity — without understanding its history, in particular that it was a settler society, without any prior experience of feudalism.

If Europe and the U.S. differ because of their diverse pasts, even though they palpably share a great deal in terms of history, culture and race, then how much more true it will be of countries like China and India, whose civilisational roots — from religion and ethnicity to history and geo-location — are completely different to those of the west.

China and India, of course, will take on board a great deal from the west in their modernisation. But that can only be part of the picture. They will also draw from their own history and culture. The outcome in each case will be a complex hybrid, its character varying from country to country. In future, international discourse — the word "international" is now invariably shorthand for the west — will no longer be overwhelmingly western.

- Guardian Newspapers Limited 2004

© Copyright 2000 - 2005 The Hindu