Monthly Archives: November 2018

THE LAND THAT FAILED TO FAIL

Here is an interesting special report from the N.Y. Times on the amazing growth of the “Dragon Country.”

The Chinese economy has grown so fast for so long it is easy to forget how unlikely its metamorphosis into a global powerhouse was, and how much of its ascent was improvised and born of desperation.
China now leads the world in the number of homeowners, internet users, college graduates and, by some counts, billionaires. Not so long ago, three-quarters of its population endured extreme poverty. Not it’s less than 1 percent. An isolated, impoverished nation has evolved into the most significant rival to the United States since the fall of the Soviet Union.


Money helps China become a superpower

Under the muscular leadership of President Xi Jinping, China has cast off previous restraints, rejecting deference to an American-dominated global order.

Mr. Xi has sought to fill a vacuum. He has cast himself as the leader of the rules-based international trading system, even as China faces accusations of stealing intellectual property, subsidizing state-owned companies and dumping products on world markets at unfairly low prices.

Now, China is using its funds to make foreign investments, particularly in overseas infrastructure, with different terms from those offered by other nations.

Western money comes with rules. Investment from Europe, for instance, is conditional on protecting labor and the environment, and requires that projects be awarded to companies on the basis of competitive bidding.
China tends to distribute funds with simpler demands. Chinese companies must gain work, free of competition, while Beijing secures an international ally. In offering to finance infrastructure, China has positioned itself as an alternative to many Western development funds.

The renminbi is rebuilding the world

China is using its power and money to build a vast global network of investments and infrastructure that will reshape global finance and geopolitics.

Think of it as a modern-day version of the Marshall Plan, America’s effort to reconstruct Europe after World War II. But China’s strategy is bolder, more expensive and far riskier.

The NYT analyzed nearly 600 projects that China has helped finance in the last decade. Some highlights:

• 41 pipelines and other pieces of oil and gas infrastructure help China secure valuable resources.
• 203 bridges, roads and railways create new ways to move Chinese goods around the world.
• 199 power plants—for nuclear, natural gas, coal and renewables—open new markets for Chinese construction and equipment companies.
• Large ports in Malaysia, Pakistan and Sri Lanka—three countries along a major oil and commerce route from the Mideast and Africa—could someday double as naval logistics hubs.

China has financed infrastructure projects in at least 112 countries. Many of those initiatives have focused on neighbors—Pakistan in particular—to strengthen geopolitical relationships. Others, in volatile countries like Nigeria, Venezuela and Zimbabwe, involve risks that many other nations try to avoid.

Spinning up high-tech manufacturing from scratch

Now that it rivals the West, China wants to build homegrown champions in cutting-edge industries that stand up against companies like Apple and Qualcomm. That’s not just about powering growth: It’s also about national security and self-sufficiency.

But its approach has been unconventional:

• Instead of following the well-worn development playbook—first make shoes then steel, next cars and computers, and finally semiconductors and automation—China is trying to do all of them.
• By 2016, China had moved into more expensive good like cellphones and computers. And it was making even more of the cheaper stuff.
• The next step is vital, but difficult. China can’t make chips as small and as fast as the United States. Unless it catches up, it will remain reliant on other nations and vulnerable to global geopolitical pressures like a trade war.

China’s huge economy was built on its own terms

The nation’s explosive economic growth since the 1990s has been based on a heady mix of Western methods and its own, more authoritarian, approaches.

A prime example is the country’s membership in the World Trade Organization:

• To achieve the growth it desired, China had to join the W.T.O. In the process, it yielded to global demands—slashing tariffs, lowering trade barriers in finance and telecoms, and curbing subsidies.
• After it joined in 2001, exports doubled in three years, and almost tripled in four. Global manufactures moved entire operations to China; consumers around the world were able to buy cheaper stuff.
• But China didn’t really change. It has been slow to open up parts of its financial system. Other essential areas, like telecommunications, remain cut off. China has nurtured businesses aimed at meeting its own technological and political goals, and hasn’t fully relaxed its grip on the value of the country’s currency.

Next stop: conflict?

China’s rapid rise, and the acute sense of grievance and insecurity it has stirred in the United States, has led some to conclude that these two giants are destined for war, writes NY Times’s Mark Landler.

• For at least a decade, Americans have blamed China for shuttered factories and jobless workers. Public views of China swung from positive to negative in 2012, according to Pew Global Research, and have remained underwater since.
• But the current chill in the relationship seems different. It’s less a temporary rupture than a searching reappraisal of what a status-quo superpower should do about an ambitious, formidable challenger.

Now, amid an escalating trade war, tensions are ratcheting up:

• Conflict with China is intensifying amid unresolved concerns about American leadership and overreach that built up during the era of globalization, and in Afghanistan, Iraq, Syria and other distant battlefields.
• The Trump administration is torn over what comes next. Some of President Trump’s advisers, like Peter Navarro, cast the situation as an epic struggle over who will control the commanding heights of the 21st-century economy.
• Others, like Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross, and the director of the National Economic Council, Larry Kudlow, have tried to put the brakes on Mr. Trump’s most belligerent trade moves.

How likely is it that trade war turns into real war?

Graham Allison, a Harvard professor who worked in the Defense Department to reshape relations with former Soviet nations after the end of the Cold War, argues that a rising power like China is likely to come to blows with an established one like the United States.

But some China experts note that other areas of dispute, like Taiwan, have not become more fraught in recent years. Whatever the issue, they argue, a disastrous miscalculation is more likely without persistent engagement.

There seems no question that America/China relations are in transition. Will we end up as friends, rivals, competitors or outright enemies?

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CURRENT EVENTS – NOVEMBER, 2018

The Midterm Elections – A Split Decision

Unless you started your winter hibernation a little early, you know we had an election last week. There were no great surprises; the Dems took the House and the Repubs widened their lead in the Senate.

Both sides are claiming victory. The Blue Wave didn’t materialize. A divided Congress will produce gridlock and stagnation and a lot of noise in the House about investigations and impeachment, all of which will go nowhere.

A few interesting things: there are now 100 women in the House, first Native America and Muslim woman in the House, and the first openly-gay governor.

Granting Asylum Complicates the Whole Problem

Whether you’re talking about seven people or 7,000 all huddled together in a caravan, it’s easy to tell an immigration official that you want asylum in America. It’s not as simple as it sounds.

1. This is a business, a well-funded business by a group like Pueblo Sin Fronteras who organizes and recruits.
2. How do you check the accuracy of asylum claims in countries like Honduras?
3. If you claim asylum to a proper border official, they have to let you in—it’s the law.
4. You join a backlog of 700,000 and growing who are waiting up to three years or more to have their cases heard.
5. Even if you wait that long, do you bother showing up?

We can’t just open our doors and tell the world “you’re all welcome.” We would have chaos and costs.

Out of Wedlock Births Soar

In 1970, 10% of births were out of wedlock. In 2018, that number is 40%. The figures from the UN Population Fund breaks down: Whites, 30% out of wedlock, Asians 27%, Hispanics 57% and African Americans 73%.
Average for a first child in America is now 27. It was 22 in 1970.

Political/Sexual Correctness is Going Crazy

An actress, Kristen Bell, you probably know her. I mean, she’s got two little daughters, five and three. She tells Parents magazine that she is concerned about the message and Snow White the cartoon which was released in 1938. It’s 2018, so let’s do the math. This is 80 years ago.

Snow White was released, a cartoon, about a princess who is given a poison apple and falls asleep and is awakened by the kiss of a handsome prince. They fall in love, get married, and live happily ever after. That’s Snow White.

So, Ms. Bell says no! NO-NO-NO! She says to the Parents magazine, “Don’t you think it’s weird that the prince kisses Snow White without her permission, because he cannot kiss someone if they’re sleeping.”
Where’s the “MeToo” movement when we need them?

State Licensing is now Required for Lots of Jobs

Licensing directly affects more workers today than union membership and the minimum wage combined, but it wasn’t always this way. Some government restrictions on who can perform what job have been around for decades. In the 1950s, one in 20 workers needed government permission in the form of a license to work. Today, licensing has ballooned to ensnare one in four workers.

Licenses are now required not just for doctors, dentists, and lawyers but also for shampooers, makeup artists, travel agents, auctioneers, and home entertainment installers. According to the Council of State Governments, 1,100 occupations were licensed in 2003.

When the President and the Press are at War, Everyone Loses

One of the strategies of guerilla warfare is for resistance forces to cause constant mayhem, thereby making it impossible for the establishment forces to govern. During the Vietnam War, the Viet Cong communists were expert at disrupting the South Vietnamese infrastructure. That eroded the people’s confidence in the Saigon regime and drastically weakened it.

The same thing is happening today in America. While President Trump is branding many media outlets as “the enemy of the people,” he may be missing the larger picture.

Read almost any newspaper or watch network or most cable news, and you will absorb negative stories about the Trump administration ad infinitum. The latest being the President is partially responsible for the terror bombs and the Synagogue massacre because of his persona and rhetoric.

The cold truth is that the vast majority of the American press is fighting a guerilla war against the President, hoping to wear him out and turn public opinion against him. In turn, Donald Trump counter attacks and creates ill will toward the press by disparaging his constant critics.

Then the media complains about the “harsh rhetoric.”

This is one of the biggest cons ever perpetuated in this country. The fix was in the moment President Trump defeated Hillary Clinton. The media chieftains and their corporate masters immediately launched a guerilla campaign to bring down the Trump administration. And that’s what we are seeing playout. It is far beyond ideological disenchantment. It is a brutal war of words designed to destroy.

Medicare For All – At What Cost?

The current Medicare plan for people 65 plus is a great plan; however, as the deficits keep rolling along, it will be bankrupt in five years or so.

At the same time, we have the progressive Democrats like Bernie Sanders and former president Barack Obama ginning up support to have Medicare for all.

According George Mason University, the additional cost would be 150% or 1-1/2 times our current national debt.

Doesn’t sound too practical to me!

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WHAT I LEARNED FROM MY MOST MEMORABLE EXPERIENCES

Several blogs ago I wrote about “Three Experiences That Shaped My Life.” In the interest of space, I didn’t try to explain how each affected me. Here in today’s blog, I’ll try to explain what I took away from each of those experiences.

My college experience at UCONN, as part of an inter-cultural fraternity, was such an important factor in my life because it validated all my early beliefs that people were people and that race or religion didn’t matter. You would like someone or not as individuals.

I not only got to know the 70 odd members of that house individually but I was the House Steward, nominally in charge of the kitchen and dining room (the chef really was) but I did the bookkeeping, learned a little about a very small business and dealt with the vagaries and problems the members had with the menu and/or the food (two meals a day).

My biggest problem was my friend Morty who always wanted credit for a meal “because of his ulcer” and then I would find out he ate at the greasy spoon called Fred’s off campus.

I became the third president of the fraternity after the two founders graduated and had to weather the storm of a few people who wanted a quota system on new members.
All-in-all, it was a genuine learning experience about people and the operation of a small, very small, business.

My eight or nine years as part of the Phoenix Jaycees was meaningful on a number of different levels. First, it was a lot of fun and learning on a whole different scale. I gained a lot of experience in planning and executing community affairs, as well as in non-partisan politics. The projects that benefited the community were satisfying and fulfilling and led in no small way to my career in association management and producing tradeshows.

As treasurer of the 500-member organization, I was again involved in the business operations of an organization, including the renting and operation of our own building.

The Jaycee experience gave me a chance to spread my wings and expand my horizons beyond just trying to make a living and support a growing family.

Most of all, I learned about myself. Having lost two elections for president (a record), I found out I was not an out-front personality; and although I had some interest, I would never be a good political candidate. On the other hand, I was a very good backroom staff planner. That was my forte.

The exhilaration and excitement I felt on coming back to my first personally produced Arizona Home Beautiful Show at the Phoenix Coliseum that Friday night has never been surpassed. I had arrived in a number of ways.
I saw the crowds and I saw a bunch of business executives somewhat befuddled about what to do. The Fire Marshal instructed the coliseum staff to stop selling entry tickets. There was a confused waiting crowd trying to get it. The crowd inside was somewhat confused as well. They couldn’t get through the aisles or find floor seats to watch the Dancing Waters Show.

I put some sponsor executives in the ticket booths and had them start to resell tickets and then I had the chains removed to the seating areas and allowed people to have comfortable seats to watch the show. Lucky for me, all the coliseum management had left to go home.

I’m not sure exactly how, but I was able to take charge and direct people to do what was needed. I’m not even sure how I knew, but I did.

I was hooked. I learned that this was something I had to do more of. It was too good to be over.

The exhilaration I felt was a high and the satisfaction of reorganizing and solving a crisis was very fulfilling.

The Labor Day Fishing Derby, the Christmas party for the southside children, the model legislature, the mock constitutional convention and the extended effort to try modernizing the Arizona Constitution with me as chairman, as well as participate in the 4th of July fireworks show and the annual rodeo and parade—they were all eye-opening experiences.

I certainly learned from many other experiences, but perhaps none more forcefully than these three. They each made an impact that formed the parameters of my career, the start of my business, and my personal life.

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