Wednesday, May 26, 2010

Eventually, even the New York Times figures it out.

It would be difficult, at this point, to express my disgust with the New York Times, but I’m going to try.

I should preface this yet again. I am a political independent. As I have said in the early incarnation of this blog, most conventional political issues don’t interest me. My primary interests are philosophical, and all revolve around the fight to uphold standards of objective truth and ethics in the post-modern world. The fact that this has made me a “default conservative” is something that I’m willing and able to fully explain another time, but this post will do for now.

Let me get to the point. This week, the New York Times, to my knowledge for the very first time, realized the obvious: that the European social welfare model is failing.

This really should never have been a political argument; it's simply a mathematic and demographic reality. Why on earth the folks at the "Paper of Record" couldn’t notice this before they spent months cheer-leading Obamacare, I don’t really know (actually, I do really know, they are more loyal to their utopian fantasies than they are to reality).

Now, suddenly, the NYT runs an article titled “Europeans Fear Crisis Threatens Liberal Benefits”. I quote:

“With low growth, low birthrates and longer life expectancies, Europe can no longer afford its comfortable lifestyle, at least not without a period of austerity and significant changes.”

Well, I guess no one can sleepwalk forever. And yet even that statement is wishful thinking. Let’s put the emphasis on the “no longer afford” half of that quote, because the prospects for "austerity”, and “significant changes”, aren't very good. Merely the suggestion has already caused mass riots in Greece, and even the crowd-murder of three bank employees.

Greece is only the vanguard, because as even the New York Times admits in this article, this is not a Greek problem, it’s a European one; and with American political elites now hellbent on Europeanizing America, it is our problem too. This situation isn't going away. Let me go back to my credit theme from earlier posts. Do you want to make a long term bet on an aging society that will soon have a 1 to 1 ratio between workers and retirees? Do you want to buy their government bonds? And if you are from the ambitious half of European society that still has a work ethic, do you want to pay the taxes that support this situation?

Incidentally, this says volumes to me about which side, in our great bipolar political debates, I should believe. Conservatives have been saying this was going to happen for the past half-century and longer. For all that time, political liberals have called them stupid, heartless, and greedy for saying so.

Now finally the (pallorous) Gray Lady admits the same problem. Well, they say so in the news section at least, their editorialists still ignore the elephant in the room. And that elephant retired early with no children and wants a taxpayer funded pension.

Here’s an idea: since it was the conservatives who said all this in the first place, perhaps you just should have believed them. And perhaps you should start now.* And maybe, just maybe, what was truly stupid, greedy, and heartless, was your having thought that you could relax and let the labor of immigrants and someone else's 1.3 children support you for the non-working half your life.


* notice that I said "conservatives", not Republicans. When it comes to economics, the Republicans have pretty much been just the party that spent the same deficits on different things. That doesn't change this fact that the bad economic theories all originated on the left!

Chinese Migrant School

These are some more pictures that have been sitting around for a while. A few months ago, the family did some volunteering at a migrant school. These are kids of migrant workers from around China, who are here in the wealthy east mostly as construction workers. The school wasn't purpose built for them. As I understood it, it was supposed to be a regular school (and may yet be). It was far too nice of a facility to have been built for migrant workers, despite the fact that it was shabby, and freezing cold.

We were there to just do some basic little English activities. Some of these kids were pretty sharp.

I made sure to get a good clear photo of the girl in the center of the photo on the right. One thing that a lot of people don't know about China is how much ethnic variety there really is. The culturally, politically, and numerically dominant group are the Han Chinese. 90% of the population is Han (although considering that many of the ethnic minorities are either exempt from, or ignore, the one-child policy, it is interesting to speculate how long that will last).

In any case, I don't know if these kids are Han or not. They did speak Mandarin, but just about everyone speaks it as at least a secondary dialect, and I certainly don't understand enough to distinguish accents (or ask kids detailed questions about their backgrounds).

My point all that goes back to the fact that there is a lot of variety in China. The stereotypical Chinese "look" is not at all universal. It is a very common experience for me to see people in the street who, for all the world, look exactly like the Latino and American Indian students I have had over the years. I thought the that girl in the middle was a good example of that. If I were to see her in a different context, I might have assumed she was Mexican.

Finally, a photo I took from a window of the school's front gate. Note the reception dish mounted on top of a chair on the roof. Scenes like this keep my earlier comment about being in "wealthy" China a little bit in perspective, no?

Thursday, May 13, 2010

Are you threatening me?

Okay, I've already explained that I am conflicted/ambivalent/skeptical of Arizona's new immigration law. But this is just too funny. Following the lead of San Francisco, the city of Los Angeles has announced that they will be boycotting the State of Arizona.

Bankrupt cities in a bankrupt state are threatening not to do business with us. Considering that half the time they can't even pay their own state employees, I find that threat hard to take seriously.

Go ahead, Los Angeles. I think we can live without your IOUs.

- AzA

Saturday, May 8, 2010

Huangshan (Yellow Mountain)

This was never intended to become purely a political blog, I'm just leaving the family stuff out of it these days. Look me up on facebook for those photos.

These are some photos from a recent outing to Huangshan. Yellow mountain, as it is called in English, is probably the most famous mountain range in China, and it is very significant in the Chinese psyche. If it looks familiar to you, it is because a great deal of traditional Chinese art was painted here. Even now, you will find lots of artists along the trails, using traditional materials.

The hiking isn't terribly natural. All the paths are paved with handrails. That isn't to say that it is easy. It is about 6000 feet in elevation, and virtually every path is stairs. Some are quite steep. Me and the boy hiked a good 15 miles or so over two days.

Below are some of that stairs that have been cut into and sunk into the cliffs. This section of the mountain is quite spectacular, but it is off of the main trail, away from the famous peaks. There were relatively few hikers here, which was nice. The main trails get quite full. It is said to be the ambition of all Chinese to climb Huangshan at least once. Even the emperors were expected to do so. That means a lot of people can be there at one time. I've been told that during the May 1st holiday, there can be over 250,000 people on the mountain at one time. That sounds excessive to me, if only because of the logistics of buses and hotels for that many people. Then again, this is China, and the Chinese know how to do big crowds right.

We were there the week before the big holiday. That meant only mostly big crowds, instead of unbelievably big crowds.

More miscellaneous pictures.

There are several hotels on the mountain like the one below. All of the supplies for them, and garbage from them, are carried up by porters. They clog the main trails and make it quite hard to get around sometimes. Some of them carry pretty incredible loads. It exerts an amazing peer pressure.... stopping on the trail makes one feel pretty pathetic when a guy with 20 gallons of cooking oil on a bamboo yoke is coming up behind you.

I don't know if the building materials were carried up or not. There are no roads. There was a construction site near one hotel that had a small bulldozer and hydraulic shovel at work. Maybe they brought those in by helicopter.

On the right, there is a billboard of Deng Xiaoping visiting Huangshan, looking quite sporty in his shorts. Like I said, every emperor was expected to climb the mountain, and that includes the Communist ones too.

Tuesday, May 4, 2010

Don't cry for me Arizona.

Well, I'm from Arizona. It's even in the name. Therefore, I suppose I'm practically obligated to have something to say about an Arizona issue so big that it has made world news (last week I even watched it on China's English language news program). So here it goes. It's in list form, because I'm not willing to invest the effort to turn it into an essay. Considering how much I'm contradicting myself, that would be especially hard, anyway.

1. All nations regulate and control immigration. To not do so is to literally abandon national sovereignty itself. In the entire world, perhaps only the United States is under public pressure not to regulate immigration, or even to enforce its own immigration laws.

2. It never would have come to this if the federal government showed any interest in enforcing its own laws.

3. Mexico has used the porous American border as a safety valve to avoid unrest, and even potential revolution, among its own citizens. It also props up its own economy with the huge inflow of cash that come from remittances to family members from Mexican workers in the U.S. Yet despite it’s insistence that America not enforce it’s own immigration laws, the Mexican government brutally patrols its own southern border with Guatemala.

4. Cesar Chavez, whose name is invoked by activists, openly opposed illegal immigration.

5. Radical immigrant groups are nationalists and separatists. The useless media hyperventilates every time someone in Texas says anything even mildly secessionist. However, the "La Raza" activist groups promote it explicitly. I have personally worked with these types of “immigration” activists. I can tell you that their antipathy for the United States is profound, that their desire for secession is literal, and that they are perfectly transparent about it whenever they think that you can’t understand Spanish (and sometimes you don't even need that, like the link above shows). Considering that several major elected officials in Arizona and other states have deep ties to them, their agenda should not be dismissed as irrelevant and “fringe”. It is a legitimate danger to the republic.

6. The pro-business Right conveniently forgets that they wanted, and gain by, the labor of immigrants in the first place. They suppose that they can have free flow of capital and resources without having a flow of labor as well. It is deeply naïve. They need to admit that the workers are being drawn to the U.S. by legitimate free market principles. Free market conservatives should be leading the charge to streamline and shorten the process for legal immigration.

7. Bitter and enraged men like Russell Pearce of the Arizona State Legislature (a chief sponsor of the current immigration bill) are constant reminders to me as to why I’ve never registered as a Republican.

8. Any elected official who calls for an economic boycott of his own state is a first-class idiot, and a betrayer of his constituents. He should be run out of town on a rail. Raul Grijalva, this means you.

9. Illegal immigration and illegal immigrants are closely correlated to crime, including violent gang crime. To pretend otherwise is a denial of reality.

10. Republicans seemed almost determined to alienate Mexican-Americans. If they had any sense, they would realize that Hispanics are natural allies in the support for traditional family values.

11. Democrats have sold their souls to identity politics. If they had any scruples, they would stop their tactics of electoral divide and conquer by trying to stir up division between groups of American citizens. They need to quit using immigration as a propaganda tool to paint valid concerns by American citizens as “racist”. And if they were more intellectually honest, they would push for immigration law to be changed, rather than just acquiesce on the law being ignored.

12. If Hispanic (and any other minority group) voters were wiser, they would realize that no political party will ever lift a finger for any voting bloc whose votes they can take for granted.

13. Asking for identification is not the same thing as racial profiling.

14. The two stupidest memes in the entire immigration debate are as follows: For the right, it is “Of course they are criminals, they are ‘illegal’ immigrants.” For the left, it is “Show me a twelve foot fence, and I will show you a thirteen foot ladder”.

The first is a circular argument, in which the speaker tries to distract through verbal sleight of hand from the actual question. Everyone knows that it is “illegal”.... the point under debate is whether or not
that illegality is just. To reflexively turn back to the meaning of the word itself is semantic obfuscation.

As for the second, it is a lazy attempt to paint all immigration enforcement as futile. If the Left actually believed that government was so powerless, they would abandon all of their great grand schemes (of which they are so fond) to regulate every aspect of human behavior and opinion. They should just admit that they don’t want immigration law enforced and be done with it.

15. A great many Mexican-American citizens actually support strict immigration enforcement. It would be very hard for this new law to get the 70% support that it has without them.

16. Some of the very best students I ever had back in Arizona were illegal immigrants. There needs to be a much better and faster process for those that really do have something to contribute to our society to gain legal residency.

Thursday, April 22, 2010

Darth Vader goes Honky Tonk

This is totally stupid, but I haven't laughed this hard at something in weeks.

Thursday, April 15, 2010

Well that certainly explains a lot...

I've known for a long time that a lot of people believe that there are aliens visiting earth. After years of teaching high school, that doesn't even rank in my top 10 crazy ideas I've heard.

Based on a recent survey, 20% of people worldwide (or at least in selected countries) believe that aliens walk among us disguised as humans. That number is high enough. But apparently, in China and India, the number is 40%!

I've been pondering that all day today. Did 40% of the people I walked past today here in China believe that there were aliens walking among us? Were those aliens on the street right then?

Or maybe they think I'm an alien. I kind of hope that they do. I'm wondering if I can come up with some way to entertain myself by confirming their suspicions. That would be some good clean fun....

Tuesday, April 6, 2010

Give Me Some Credit, again

To return to an earlier theme: being "rich" just isn't as big of a deal as you think it is. After all, what place could possibly be richer than California?

To quote one of my favorite movies (Oh Brother, Where Art Thou?, but probably countless other movies as well), "It's all about the money, boys!". Or to be more specific again, all about the credit. And when it comes to that credit, Kazakhstan and Mexico are looking better than California.

This sort of thing is literally keeping me up at nights right now. It's not just California at this point. We're in a tight spot (to quote the same movie again), and the Obama administration is doing nearly everything it possibly can to replicate the problem on a national scale. If that happens, Americans, unlike those Californians fleeing to Utah, don't have anywhere to which we can "R-U-N-N-O-F-T."

Okay, I'll stop quoting the movie now.

Wait a sec, wasn't it set in the Great Depression?

Congress spends your money, and steals my jokes

I'm never going to be a proper blogger at this rate. I've had this post in mind for a week, but I'm only getting to it now.

In a history class several years ago, I was asked the following question by a very sweet, but extremely confused young woman: "How do islands float, anyway?".

Now, being the kind and gentle teacher that I am, I refrained from direct ridicule. However, that has not stopped me from milking that incident for jokes countless times over the years. It has been a very useful addition to my arsenal of "stupid questions", which all teachers collect and reuse endlessly, just to answer the question of "just how dumb could somebody be?"

Well, they could be a U.S. Congressman. Last week, Rep. Hank Johnson - Democrat, of Georgia, stated in a hearing with the House Armed Services Committee, an unexpected concern. Watch and listen.

Yes, that's right. The honorable congressman is concerned that, with an impending influx of U.S. military personnel, that the island of Guam might become overloaded and capsize!

Disclaimers have since been disseminated that Johnson was joking. I'm not convinced, and that explanation certainly doesn't seem to be gaining media traction. It has also been noted that Johnson suffers from Hepatitis C, which can cause disorientation and confusion. On that note, the man deserves sympathy. But why on earth can't he get that sympathy while he convalesces at home, rather than conduct national affairs and vote on how to spend our tax dollars, while all the while worrying about island buoyancy? And, even if the poor man is confused, he can't be the brightest bulb in the first place. His condition might well jumble his thoughts, but it can't generate them out of thin air.

Oh by the way.... When I got asked that question, I did have an answer. I told the girl that islands floated because they were built out of styrofoam. Now you might think that I handicapped her education, but it is now very clear that I did her a big favor. Thanks to me, she is qualified for a good career. The benefits are spectacular, and they hire new applicants every two years.


Thursday, March 25, 2010

Give Me Some Credit

Here’s a little historical question for you…

What caused the Great Depression?

Oh, I’m not asking for all the usual high school textbook answers: stock market crashes, trade protectionism, drought, indebted farmers. I’m asking about this from another angle. My question is more fundamental: How did a rich nation, in fact the world’s richest nation, grind to a halt?

Nothing real had disappeared. Everything tangible was still there. The workers were still available, the factories still stood, the banks and the farms hadn’t gone anywhere (excepting those that had been carried by a dust storm into the next state).

And then it all stopped.

What happened? Did America suddenly stop being rich? Did the factories disappear? Did the workers lose their skills? Did the resources run out? No. All those things were still there, just as they had been before. The Depression started for lots of reasons, but one simple and single factor links them all: the money stopped flowing, by which I mean that the credit dried up. No one would lend anyone any money anymore.

We say that America is rich. We are very rich. But rich matters a whole lot less than you think it does. A man with vast property is rich by definition, but that doesn’t necessarily mean that he can pay his bills. Wealth means little without income, and in the modern world, all income really depends on credit.

Credit is much maligned, and much misunderstood. While indebtedness is usually bad, credit is usually very, very good. Wonderful, actually, as it literally makes the whole system work. Using credit is not necessarily the same as going into debt. Think about your own household purchasing. Unless you use cash for literally everything, you are using credit all the time. If you use a check or card, even the supermarket “lends” you groceries until they get your money a few minutes, hours, or a couple days later. And absolutely all of the most expensive things you ever buy are bought with credit. Without credit, it might be years before you bought a house or a car, if ever.

Even the most successful business runs on credit, even if it doesn’t have any actual long-term debt. A business buys expensive capital equipment on credit, which is what makes it possible to make goods and services in the first place. It uses credit to stabilize its cash flow over time, so that it can meet day to day expenses. Without that credit, it is absolutely impossible to run a modern business, because an advanced economy requiring large capital investments and cash flows simply can’t depend on people physically carrying around cash. All of the things that are used to make everything else, the capital, labor, and resources, all are useless without credit.

The same is true for nations. They run on credit. America has a lot of physical capital, a lot of human capital, and a lot of resources. But none of those matter much without credit.

Some people say that America should do this or that important, ambitious, noble, or generous thing because we are rich. But rich doesn’t matter, credit matters. For one to borrow, another must lend. For another to lend to you, he must have confidence in your future. A lender is not interested in how rich you are, he is interested in whether or not you can pay him back. And he gets to make that decision, not you. You may think that everything is fine, but what matters is if he thinks everything is fine.

We spend a lot of time telling ourselves that everything is fine because we are rich. It is true that we own a lot of things, and it is also true that we do have a lot of money. But let me extend what I said above about "being" rich to the subject of "having" money. We have less money that you think, and what we do have matters less than you think it does.

I'll illustrate it this way. Do you remember the cartoons of Scrooge McDuck? He kept a big vault of money, and swam in it for pleasure. If Scrooge never made another dime in his duck life, he could have kept spending that money for a very long time before it would all be gone. Our money isn’t quite like that. Most Americans don’t have any money saved at all. If we tried to swim in our money like Scrooge McDuck, we would be painfully jumping into a big pile of consumer goods and/or the disposable packaging they came in, because that is what we spent all our money on. Actually, scratch that. We would be jumping into empty air, because half of that stuff we own hasn’t even been paid for with real money yet, it is getting paid for with future money that we expect someone else to give us right before we are due to pay the bill on the credit card we bought the stuff with.

Americans don’t actually have money, so much as we have a lots of movement of money. What comes around goes around, and no sooner do we get money then do we pass it along to the next guy. When it comes to our buying habits, we don’t really have the money today, we just always assume that we will have money tomorrow.

In an advanced economy, everyone is doing this, including individuals, businesses, and the government itself. Most, if not all, of our long term plans are actually based on tomorrow’s money. Therefore, all our projections are meaningless if the money doesn’t keep flowing, and once again, that all comes back to credit. Once upon a time, the credit necessary to run the U.S. government came from the savings of Americans, who used those savings to buy U.S. treasury bonds. We don’t do that much anymore. Instead, we mostly let the Japanese and the Chinese do it. They will keep giving us credit only so long as they believe in our future ability to pay. The moment they lose confidence, they don’t lend.

And when that moment comes, everything stops. It doesn't stop in that future year that we showed on our charts and spreadsheets. It stops at that moment. Then it no longer matters what factories, stores, infrastructure, human skills, or resources we have. The economy stops.

For the time being, we are still okay. The Japanese and Chinese haven’t lost confidence in our economy just yet. Luckily for us, they don’t really have too many other places to put their savings anyway. But ask yourself this question. Would you buy U.S. debt if you had other options?

Let’s look at just a few items from America’s balance sheet.

Social Security is supposedly going to run out in some year or other at some point in the future. I think I remember the exact year, but I’m not even going to bother to look it up. Last year’s biggest-in-American history “stimulus package” which was spent on virtually everything under the sun except those things that are generally considered to actually “stimulate” an economy, involved a specific amount that is supposed to be repaid by a certain time. I think I remember those numbers too, but I’m not going to bother to look those up either. I’m not being lazy, I’m making a point. Would it really matter if I told you the numbers anyway? They are already so big that we can't even visualize them as abstractions. They have no frame of reference. How do you describe a trillion, anyway? Do all those analogies about how deep the ocean is, or how many times around the equator, or how far away the moon is, really tell you anything? They might as well be imaginary numbers.

Actually, they pretty much are imaginary numbers. They change all the time, as they are purely based on predictions. Do you remember all that talk of surpluses when the Clinton administration ended? What happened to it? If you are inclined to be partisan and blame Bush for losing it (okay, fair enough, I'm also inclined to blame Bush for losing it), just think of it like this: If Bush lost our money, then Obama has found it and gone to Vegas.

But of course, in reality, there was no money to lose. That surplus wasn't cash in a Scrooge McDuck vault, it was only a prognostication for the future. And just like in those time travel science fiction movies, the future is always changing. Just today, news came out that as of this year, the government is paying out more for social security benefits than it is taking in from social security taxes. That wasn't supposed to happen until 2016.

And now comes our latest and greatest must-do-it-because-we-are-rich spending scheme, Obamacare. This bankruptcy in the making has been promoted with numbers that are worse than imaginary. This time, they are flat-out lies. They are based on the next ten years of tax collection, but only on a six year period of expenses that doesn’t even start for another four years. And for that matter, the promised cost "savings" over those ten years literally equals only about half of what the U.S. Federal government spent last month!

So forget all the numbers. Let's get back to credit. None of the numbers matter one bit unless the credit keeps flowing. And for that, we’ve got to keep selling government debt, and people have to keep believing that it is safe to buy it.

Is it still safe to buy it? Last week, it was announced that Moody’s Investment Services, is warning that the U.S. bond rating may be downgraded from AAA status. In fact, as far as the free market is concerned, it already has been downgraded, because it is now considered safer to invest in several private companies than it is to buy short term U.S. treasury bonds!

That is unprecedented. U.S. Treasury bonds have traditionally been the safest investment in the world, and now people trust them less than bonds from Berkshire Hathaway, Procter & Gamble, Johnson & Johnson, Lowe’s Home Improvement Warehouses, Abbot Laboratories, and the Royal Bank of Canada.

Investors now trust U.S. treasury bonds less than those of four major corporations, one more that you've never heard of, and a Canadian Bank. I wonder how investors got that idea?

Right now, foreign investors are still buying our debt and giving us credit. They still have confidence. Pray that they don’t lose it, because when and if they do, we will all find out very, very, quickly that being the “richest” country doesn’t really matter all that much.