April 2007 has been the month of lucky number 13,* at least for New York City. The Yankees' A-Rod (whose jersey is #13) has been the hottest thing they have, with more than 13 home runs already and hits in most every game this season, while all else about the team is seemingly going to seed. And the Dow Jones Industrial Average has finally hit 13,000. Wow, amazing stuff.
For those in the game. I have never understood people's patience - neigh lust - for following the victories, trials, and tribuations of others' sporting efforts. Think about the amount of content in the US media dedicated to sports and to the results of folks gambling in the financial markets. That stuff truly sells, pretty much as well as any other soap opera. Then consider how much of your friends' and colleagues' idle banter relates to the same subjects.
I am lost in this universe. I absolutely love playing sports (baseball, football, tiddlywinks, etc.), and I follow my investments more closely than any rational being should follow anything. But I have never much enjoyed following or discussing the similar efforts of the rich and famous, unless there is something to learn that I can actually use.
I really do not like being this out of touch with most folks' delights, however. I have $13 for the person who can enlighten me and interest me in the New York Daily News.
* 4 + 2 + 0 + 0 + 7 = 13. Coincidence? I think not.
Saturday, April 28, 2007
Tuesday, April 24, 2007
"Corrupt" - "Altered from the Model" or "Morally Depraved"?
Caution: if you believe that Western means of government are the best, you will likely find this post patronizing.
China is often said to be corrupt. It is widely agreed that unpublished and therefore unpredictable fees - bribes - must often be paid to government officials if businesses wish to obtain results (e.g., licences, concessions, approvals, etc.). There are laws against this kind of behavior, within China, in the USA, and elsewhere. And violation of these laws in practice is certainly an alteration from the model.
But is it morally depraved? And could the answer to the latter question depend on the culture from which one comes? If one is willing to consider that sovereignty is a commercial enterprise, then how could one consider that a government official - say, one in charge of a particular agency whose approval is needed - should not be able to charge whatever price for the requested approval that the prevalent conditions will bear? In fact, that is just how things have long been viewed and worked in many parts of the world.
But, Western minds generally consider that sovereignty is not a commercial enterprise (query what it is then), and they elevate governments to a different plane. A plane where it is somehow morally depraved to demand a market-clearing price for a requested approval or other service. The best argument that occurs to me for this position is that the government has a kind of monopoly - it sets the requirements and also administers them, and it should not be able to command such concentrated power without published constraint. It is for this reason that no self-respecting Western society would countenance anything close to such a concentration of power in commercial markets, aside perhaps from the odd minor exception like the energy industry or the defense industry.
When the WTO joined the PRC, it took on a cultural integration project, and mutual understanding of longstanding business and bureaucratic attitudes and practices is critical - in both directions - if the team-up is going to work. The PRC states that it wants to tackle "corruption" in the Western sense, though I doubt the Chinese have attributed a "morally depraved" aspect to their definition. As we should well understand by now, that tackling process will evolve very slowly, growing out of the previous system. To expect sudden change to the Western model is silly. And to label thousands of years of customs as "morally depraved" is not constructive.
China is often said to be corrupt. It is widely agreed that unpublished and therefore unpredictable fees - bribes - must often be paid to government officials if businesses wish to obtain results (e.g., licences, concessions, approvals, etc.). There are laws against this kind of behavior, within China, in the USA, and elsewhere. And violation of these laws in practice is certainly an alteration from the model.
But is it morally depraved? And could the answer to the latter question depend on the culture from which one comes? If one is willing to consider that sovereignty is a commercial enterprise, then how could one consider that a government official - say, one in charge of a particular agency whose approval is needed - should not be able to charge whatever price for the requested approval that the prevalent conditions will bear? In fact, that is just how things have long been viewed and worked in many parts of the world.
But, Western minds generally consider that sovereignty is not a commercial enterprise (query what it is then), and they elevate governments to a different plane. A plane where it is somehow morally depraved to demand a market-clearing price for a requested approval or other service. The best argument that occurs to me for this position is that the government has a kind of monopoly - it sets the requirements and also administers them, and it should not be able to command such concentrated power without published constraint. It is for this reason that no self-respecting Western society would countenance anything close to such a concentration of power in commercial markets, aside perhaps from the odd minor exception like the energy industry or the defense industry.
When the WTO joined the PRC, it took on a cultural integration project, and mutual understanding of longstanding business and bureaucratic attitudes and practices is critical - in both directions - if the team-up is going to work. The PRC states that it wants to tackle "corruption" in the Western sense, though I doubt the Chinese have attributed a "morally depraved" aspect to their definition. As we should well understand by now, that tackling process will evolve very slowly, growing out of the previous system. To expect sudden change to the Western model is silly. And to label thousands of years of customs as "morally depraved" is not constructive.
Thursday, April 19, 2007
Caveat Emptor
Very interesting letter to The Economist from James Hutchin published in the April 14th-20th 2007 volume. Mr. Hutchin asks if it is rational for US taxpayers to support a further investment in the Iraq war, an enterprise "without a business plan, and with no targets and deadlines". How many folks think of their tax payments to the goverment in the same way they think of their other large investments? But why should things not be as he articulates them? Would you spend 15, 20, 30% or more of your gross income on anything else without critical study of what the investment was getting you? Think how carefully you track your home's value, your 401(k) plan's returns, or just your houshold budget for most folks.
Most people seem to send checks to their government - not without complaint often, mind you, but without requesting any direct accountability. The most folks might do is tune in to the public debate on the media-selected "political" issues of the day and consider which side of those force-fed issues they take. Usually the talking heads present two of the many possible views as the two "sides". That way, we barely have to think. To appear knowledgeable and interested in a government's activities to our similarly-behaving friends and family, all we have to do is know and chat about what's on the front page of our newspaper or in the lead stories on the national TV network news program.
Here's an idea. Challenge yourself to track your investment in your government as closely as you track your other large investments. Investigate how much gets spent on what, and how successful the effort is. Focus on the subjects that concern you the most, regardless of what the media has decided is hot. And understand how other governments are dealing with the same issues. For US taxpayers, the OMB publishes these charts, which make for a fascinating start.
Most people seem to send checks to their government - not without complaint often, mind you, but without requesting any direct accountability. The most folks might do is tune in to the public debate on the media-selected "political" issues of the day and consider which side of those force-fed issues they take. Usually the talking heads present two of the many possible views as the two "sides". That way, we barely have to think. To appear knowledgeable and interested in a government's activities to our similarly-behaving friends and family, all we have to do is know and chat about what's on the front page of our newspaper or in the lead stories on the national TV network news program.
Here's an idea. Challenge yourself to track your investment in your government as closely as you track your other large investments. Investigate how much gets spent on what, and how successful the effort is. Focus on the subjects that concern you the most, regardless of what the media has decided is hot. And understand how other governments are dealing with the same issues. For US taxpayers, the OMB publishes these charts, which make for a fascinating start.
Friday, April 13, 2007
Bush's accelerated Iraq pullout
Don't believe what the White House says. Not only is the White House unopposed to a scheduled withdrawal from Iraq. In fact, the US has effectively already withdrawn. As it stands today, a major Baghdad bridge over the Tigris can be brought down and a suicide bomb set off in the heavily-protected Parliament building (killing legislators) within hours of each other. And these things can be done with all the force and surge of the US military seeking to prevent them from happening.
In what sense, then, is the US "there"? To the distant observer, only two sad answers appear. First and foremost, US children are putting their lives at risk, and they are dying "there". Second, the US is seen throughout the world as the military force that is unable to control security "there" in any real way.
Acknowledging that these are HUGE ways to be "there", I am unwilling to consider that these are the goals of the Bushies in their stated opposition to scheduled withdrawal. So perhaps the latest events will persuade the Bushies that we have already withdrawn under the current strategy. If not, the world should give up any remaining hope that the reality of the at-risk kids (US and Iraqi) can ever match the Bushies' reckless and inexplicable fantasies.
In what sense, then, is the US "there"? To the distant observer, only two sad answers appear. First and foremost, US children are putting their lives at risk, and they are dying "there". Second, the US is seen throughout the world as the military force that is unable to control security "there" in any real way.
Acknowledging that these are HUGE ways to be "there", I am unwilling to consider that these are the goals of the Bushies in their stated opposition to scheduled withdrawal. So perhaps the latest events will persuade the Bushies that we have already withdrawn under the current strategy. If not, the world should give up any remaining hope that the reality of the at-risk kids (US and Iraqi) can ever match the Bushies' reckless and inexplicable fantasies.
Tuesday, April 10, 2007
Connect the China Dots
The Economist ran a special report on China last week. A couple articles buried separately toward the back of the issue were as helpful as the report itself. These articles alone would tell a very useful story were somebody to connect them. The first article asks whether multinational corporations are really investing as much in China as one would expect given all the hype about China's increasing commercial importance. The article states that multinationals' revenues and especially business growth potential in China far outstrip their infrastructure and human resources in China.
The second article points out how corporate borrowers globally these days command ever more leverage in negotiating debt terms with their lenders. The article describes the evolution of the world's commercial lender base from multinational banks to multinational funds of various stripes, and it points out that fewer lenders seem to be bothered with loan terms that regulate borrowers' business activities in any way at all.
Spot the connection? Neither did The Economist. A very real and important story here, though, is how much money is flowing into China (and elsewhere) on the kinds of terms that have proven so dangerous in the past - institutionally and anonymously, without regard for investor-investee (eg, lender-borrower) relationships or commercial leverage points. Post-Asian currency crisis, it should be clear that the first kind of investor to be forgotten in a time of stress is the anonymous investor who has nothing further to offer a struggling business - and no ability to hurt it. On the other hand, that business' critical and ongoing commercial/trading relationships are treated better longer. But these relationships require resources "on the ground".
Multinationals are over-weighting the known-to-be dangerous kinds of investment in China and under-weighting the more secure. And they likely haven't done enough homework even to notice. But Chinese business owners must be delighted.
The second article points out how corporate borrowers globally these days command ever more leverage in negotiating debt terms with their lenders. The article describes the evolution of the world's commercial lender base from multinational banks to multinational funds of various stripes, and it points out that fewer lenders seem to be bothered with loan terms that regulate borrowers' business activities in any way at all.
Spot the connection? Neither did The Economist. A very real and important story here, though, is how much money is flowing into China (and elsewhere) on the kinds of terms that have proven so dangerous in the past - institutionally and anonymously, without regard for investor-investee (eg, lender-borrower) relationships or commercial leverage points. Post-Asian currency crisis, it should be clear that the first kind of investor to be forgotten in a time of stress is the anonymous investor who has nothing further to offer a struggling business - and no ability to hurt it. On the other hand, that business' critical and ongoing commercial/trading relationships are treated better longer. But these relationships require resources "on the ground".
Multinationals are over-weighting the known-to-be dangerous kinds of investment in China and under-weighting the more secure. And they likely haven't done enough homework even to notice. But Chinese business owners must be delighted.
Friday, April 6, 2007
Oh Dick
So Dick Cheney remains a dog with a bone. Saddam was cooperating with Al-Qaeda, no really. Really, he was.
This latest pronunciation comes on the heels of yet more DoD evidence that Saddam was in fact not cooperating with Al-Qaeda. Dick, that's your own DoD. If you ain't got them, who have you got? And what is the limit on your perception of the stupidity of the US voters?
That Dick could engage in this 1984-speak, without material consequence - other than appearing utterly out of touch to anybody who is thinking (a trivial loss) - is just amazing. That he would choose to pursue the subject some three-four years after the idea was discredited wholesale is also pretty amazing. There must be something for Dick to gain from the step. Who among us knows what it is?
This latest pronunciation comes on the heels of yet more DoD evidence that Saddam was in fact not cooperating with Al-Qaeda. Dick, that's your own DoD. If you ain't got them, who have you got? And what is the limit on your perception of the stupidity of the US voters?
That Dick could engage in this 1984-speak, without material consequence - other than appearing utterly out of touch to anybody who is thinking (a trivial loss) - is just amazing. That he would choose to pursue the subject some three-four years after the idea was discredited wholesale is also pretty amazing. There must be something for Dick to gain from the step. Who among us knows what it is?
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