Showing posts with label China. Show all posts
Showing posts with label China. Show all posts

Friday, November 28, 2014

Happy Thanksgiving !!!! (Hope you were thankful for a free market.)

“Any man worth his salt would fight for his home but only a damn fool would fight for his boarding house.”
                                                                    -Mark Twain


Here's a story that I first heard in China several years ago, and I'm probably going to re-run this post about it every Thanksgiving until I die.  The best online account I've found is on the World Socialist Website (chuckle chuckle).  It's about some Chinese farmers who got tired of starving. 


On one night in Nov. 1978, 18 villagers of Xiaogang, including (leader) Yan Jinchang, risked their lives to sign secretly an agreement, which divided the then People's Commune-owned farmland into pieces for each family to cultivate.

This was a bold move, as it was seen as "capitalist" and might have led to severe punishment from the government at that time.

Thus, on that secret agreement covered with villagers' seals and red fingerprints, there was a wobbly line saying that "If any word about this is divulged and the team leader is put in prison, other team members shall share the responsibility to bring up his child till he (or she) is 18. "


The original copy of this agreement is now in a museum someplace in China.  It had a huge influence.  Instead of farming the land together, and putting up with slackers, loafers, regulatory parasites and the other inevitable Socialist baggage, this brave group of Chinese farmers decided that each family would be responsible for a certain section of the land. 


That clause about agreeing to care for each others' children was a simple insurance policy.  To the best of my knowledge, none of the farmers agreed to care for the families of those who didn't share their risks.  In other words, you couldn't waltz into the agreement AFTER losing your head of household.  There's not even a hint of Obamacare in this document. 


The facts proved that it's worthwhile to take the adventure. Allocating farmland to each household, also known as "household contract responsibility system", fired the locals' enthusiasm for agriculture production, which had been contained in the outmoded planned economy, and helped poverty-stricken locals out of starvation.


That's just what happened when they agreed to stop the collectivist nonsense.  Think of what could happen if they'd been allowed to own the land, instead of having it allocated to them by their "leaders".   


The grains that a local farmer turned over to the state in the following year almost totaled what he did in past two decades, recalled Yan Hongchang, one of the 18 Xiaogang villagers who initiated the contract system.

Their practice was later supported by Deng Xiaoping, chief architect of China's reform and opening-up drive, and recognized by the Chinese government. Xiaogang has since been labeled as the pace-setter of the nation's rural reform.


Here's a similar story, from the Volokh Conspiracy.  This one hits closer to home.



Many people believe that after suffering through a severe winter, the Pilgrims’ food shortages were resolved the following spring when the Native Americans taught them to plant corn and a Thanksgiving celebration resulted. In fact, the pilgrims continued to face chronic food shortages for three years until the harvest of 1623. Bad weather or lack of farming knowledge did not cause the pilgrims’ shortages. Bad economic incentives did.


Time to quote Thomas Sowell for the 10,000th time.  Laws and policies should never be evaluated by their stated goals and objectives, but by the incentives they create. 


In 1620 Plymouth Plantation was founded with a system of communal property rights. Food and supplies were held in common and then distributed based on equality and need as determined by Plantation officials.


Like we're about to do with healthcare. 


People received the same rations whether or not they contributed to producing the food, and residents were forbidden from producing their own food. Governor William Bradford, in his 1647 history, Of Plymouth Plantation, wrote that this system was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. The problem was that young men, that were most able and fit for labour, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. Because of the poor incentives, little food was produced.


In other words, when the hardest-working, most creative Pilgrims realized that they were working themselves to death for people who didn't want to work as hard?  They started Going Galt.   


Faced with potential starvation in the spring of 1623, the colony decided to implement a new economic system. Every family was assigned a private parcel of land. They could then keep all they grew for themselves, but now they alone were responsible for feeding themselves. While not a complete private property system, the move away from communal ownership had dramatic results.



This change, Bradford wrote, had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. Giving people economic incentives changed their behavior. Once the new system of property rights was in place, the women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability.

Once the Pilgrims in the Plymouth Plantation abandoned their communal economic system and adopted one with greater individual property rights, they never again faced the starvation and food shortages of the first three years. It was only after allowing greater property rights that they could feast without worrying that famine was just around the corner.


And what have we learned from this? 

Nothing.  Absolutely nothing. 

Saturday, June 14, 2014

A hypothetical question about a 2nd-World Country

As I've stated below numerous times, I'm swamped at work.  We are busy, busy, busy.  We are so far behind that we occasionally look behind ourselves and think that we're in first place. 
I haven't had much time to write lately. 
However, after reading libertarian-ish stuff about economics, globalization, free trade, and economic development for the last ten years, I can see how my work stuff and my political stuff sometimes intersect quite nicely.  Theories and reality sometimes do come together! 

What follows is an email that I got from my friend and co-worker Darrell (one of our salesmen/project managers) about some display fixtures we're doing for grocery stores in Panama. 
Yeah.  
A Fort Worth TX company is doing display fixtures for stores near the Panama Canal.   
(As an FYI, there is a suburb of Panama City called San Francisco, not to be confused with Nancy Pelosi's fiefdom in California.)
Please enjoy Darrell's underlining, exclamation points!!, emoticons :)  and bold text.  Darrell types like he speaks.  Read his email, and I'll try to make my points later...

Greetings from Panama! It is after 2100 hours on Friday night and Edgar and I are getting ready for a good night’s rest here in the hotel.  A very brief report as we get ready to hit the hay and hit it hard again tomorrow.  

1.       The first container arrived today at 0900 at the San Francisco store – and it worked out perfectly that it was the La Cresta (what we thought would be the first store) container with all that we needed for the first install. The stores are not – as we were led to think – anywhere near ready to be open. We will have everything set up in all of the stores before they are ready to earn dollar one!

2.       The Solid Surfaces were ALL intact and unbroken. Kudos to the Jamie and the other guys at Infiniti (under the direction of Dan and Angel) for an excellent packaging job!

 

3.       The fixtures were completely intact and undamaged with the exception of one pretty big scratch (might have been done by one of the workers while cutting the foam and wrap away) on the a metal cabinet and one little bend in one of the pieces on the Checkout Counter. Extreme Kudos to one Clinton for his assistance in leading me in the packaging of all of the fixtures. It was excellence in every way possible! It is  very difficult to explain how significant Clint’s contribution was to this project!

4.       It is extremely “primitive” here in Panama City with no forklift and not even an available pallet jack to use in unloading the containers. Edgar and I worked and supervised a group of young men workers in unloading it “piece of piece by piece of piece.” It took 22 minutes to load by Mikey at Metal Shipping (In Texas) – and 2 hours and 15 minutes to unload (In Panama) – basically by hand. I have a short video of Edgar wringing out his shirt at the mid-point of the process that is priceless. He is now asleep already and snoring loudly. J


5.       Oh – the most important part…The clients ABSOLUTLEY LOVE the look of the fixtures. We are really close to getting the commitment on the next 6 of their stores. And (censored) was talking us up today about the prospects of the remodeling the rest of the 40+ (censored, not any of your damn business) stores in Panama and the 32 stores in Costa Rica. And – in the interest of a true long-term partnership with the parent company – remodeling a few dozen (censored) pharmacies and even more of (censored again; you're on a need-to-know basis) in Central America.

6.       It will be a long few days here – but the prospects are bright!

7.       Lastly, I have copied but a fraction of the Marco and Infiniti people that have contributed to this effort…and there were 19 names in either the To: or the CC: lines above (when I first tried to send this last night)!  And THAT is source of great pride for me. It should be to you all, also.  I am filled with gratitude for your help in this true TEAM effort.

Darrell (Last Name Censored)
Project Manager
The Marco Company

Ok, let's begin the economic and political and Libertarian analysis of each bullet-point in this email....

1) Shipping Containers.  These ugly metal boxes are so significant to our lives, so vital to the global economy, and so wonderful for trade, but most of us have little or no idea how much they have enriched our existence.  Prior to the invention of containers, manufacturers and shippers had to "break bulk" every time a shipment moved from truck to boat to rail to truck.  Theft was rampant.  20% losses were common. 
Back in the late 1950's a genius entrepreneur named Malcom McLean invented a metal box that could travel by truck, rail, or boat.  (Think about how many nations have different standards for their roads, their truckbeds, their railcars, and their harbors, and you'll understand the magnitude of his task.  Mr. McLean really, really, really wanted this system to work.) 
Unless you are a Luddite, a Nationalist, or a racist of some sort, you understand that Free Trade is the greatest economic concept ever devised.   Politicians rant against Free Trade, corporate lobbyists try to protect their industries from it, and government munchkins love being photographed rushing to the aid of those whose lives have been disrupted by globalization.  This makes as much sense as rushing to the aid of Blockbuster employees whose lives have been disrupted by Netflix. 
Thank you, Mr. McLean for increasing global trade by inventing the shipping container.  Because of this glorious metal box, one million people per month are leaving poverty in China alone!     

2) "The Solid Surfaces were all intact and unbroken..."  The unions hated McLean's shipping containers.  They hated the concept.  They still wanted to unload each container onto a boat when it entered each harbor, and then reload it when it went onto the rail.  And then unload the container and reload it when it went from the rail to a truck.  I swear to God, that's what they wanted to do.  You can read stories about it here.
But it's hard for The Teamsters and union dockworkers to steal from your shipment when the factory in China (or Fort Worth) puts a seal on the door and all container movement comes to a shrieking halt if the seal is broken. 
Thank you again, Mr. McLean, for inventing a shipping device that allows the Free Market to function smoothly.  Readers, unless you're in Asia, the device you're using to read this rant arrived in your nation via Shipping Container. 

3)  I'm not going to go off into who is at fault for the damage (that probably happened in the store, caused by store employees, and not by us). 
But had the display fixtures in question needed repair, the nation of Panama would've allowed Darrell to do the work. 
Contrast Panama's approach with that of The Peoples' Republic Of Canada, where a foreigner can't even carry his toolbox across the Canadian border because the Canadian government is afraid that doing so will destroy Canadian jobs.  Seriously.  Texans can't carry their own toolboxes into Canada without special permits, or paperwork explaining that it's for "warranty repair". 
Making foreign labor illegal is as harmful to your well-being as making foreign products illegal.
If you disagree, spend a few minutes questioning why we've had an embargo with Cuba since the JFK era. 

4) Point number 4 is interesting.  A guy named David Mason and I once loaded a 53-foot Wal-Mart trailer in 18 minutes.  There were about 25 skids and 30 boxes, and we did it in 18 minutes.  I repeat, and I might want this included in my obituary, we loaded that trailer in 18 minutes.  Mikey got this shipment done in 22 minutes.  And it took more than two hours to unload in Panama because they don't have forklifts!

So here's the economics question....  Which process "saved or created" the most jobs?  Loading in 22 minutes or unloading for two hours without a forklift or a pallet jack? 

Well, working without the modern tools created the most work and the most jobs.  But creating jobs is not the purpose of work.  The purpose of jobs is to produce something.  Something that people want.  Here's a famous Milton Friedman anecdote that might make the point more clearly....

The story goes that Milton Friedman was once taken to see a massive government project somewhere in Asia. Thousands of workers using shovels were building a canal. Friedman was puzzled. Why weren’t there any excavators or any mechanized earth-moving equipment? A government official explained that using shovels created more jobs. Friedman’s response: “Then why not use spoons instead of shovels?”
That story came to mind last week when President Obama linked technology to job losses. “There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers,” he said. “You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”
The president calls this a structural issue—we usually call it progress.

The writer goes on to dissect a few more paragraphs of Barackaganda.  Hit the link up top to read it all, and for a more thorough explanation of the difference between jobs and production.   250 years ago, 98% of us were farmers.  That's what it took to keep us alive.  Anybody want to turn back the clock? 

5)  Regarding how much the customer loves the displays, and how we've got the potential to do a lot more stores for (censored) in Panama and Costa Rica, and elsewhere in Latin America....
I was born in 1961, on a farm between Merigold and Drew Mississippi.  If you had told me as a teenager that U.S. companies would be exporting fruitstands, bakery racks, and other display fixtures into Latin America, I would've said that you were insane. 
Don't they have trees for wood in Panama?  Don't they have metal shops in Costa Rica?  They produce lots of oil in South America, so they make their own plastic? 
Yeah, they have all the raw materials down there, but they also have a choice....
Leave them alone, and they choose to buy their freakin' fruitstands from a U.S. company.  Could they make 'em cheaper in Latin America? 
Definitely. 
But Latin America is best at growing bananas and fruit and cattle.  West Fort Worth is best at making display fixtures.  It's called "comparative advantage", and with the exception of Ron Paul, I don't think any major American politician has ever understood it.
We really would be better off if without laws stating that Olympic and Army and Navy uniforms have to be made in the USA.  For the love of God, let everyone, everywhere, do what they're best at doing.  

6)  "It will be a long few days here - but the prospects are bright!"  Compare that sentence to the current Keynesian mess that our political system encourages. 
Presidents want the economy to improve now, so they mortgage our children's' future. 
Keynesian economists want to create full employment now, so they borrow from the next generation.
Going through a recession?  Create a "stimulus", using borrowed money via loans cosigned by infants. 

But in the private sector, Darrell works hard now so that in the future we might have brighter prospects. 

7)  Darrell makes a slight mistake in that last bullet-point.  He thanked everybody for the "team" effort. 
Most of us had little or no idea of the bigger picture.  Some of us were making metal brackets, some were cutting laminated sheets, others were painting parts. 
Very few people involved in the project were aware of the big picture.  The teamwork in the process was a matter of passing each part along to the next stage, in shops located miles apart. 
If one master craftsman had tried to do it all, it would've taken years to finish.  Nobody is good enough in all areas to do something like this. 


This guy has a good explanation of why that is the case:

In the first chapter of  “The Wealth of Nations”, Adam Smith, explains the optimum organization of a pin factory. Traditional pin makers could produce only a few dozen pins a day. However, when organized in a factory with each worker performing a limited operation, they could produce tens of thousands a day. This was the reason why Smith favored division of labor.

Karl Marx believed that this "Division Of Labor" would create a "loss of self" in workers.  Karl Marx was usually full of crap. 

So here's a hypothetical question about Panama....
Are Panamanians better off or worse off because of buying display fixtures from Fort Worth, Texas?

That's all I have to say about this email. 
It's been a long, long day. 

Wednesday, March 19, 2014

On the U.S. trade deficit

I'm making this argument here for the last time.  THERE IS NO TRADE DEFICIT. 

As long as a trade isn't the result of theft, deception, fraud or government mandate (pardon all the redundancies), all trade is balanced.  There are no surpluses; there are no deficits. 

I give Starbucks $2.12 and they give me a double-espresso. 

They buy no freight or warehousing services from me. 

China provides me with fruitstand components.  I provide China with pieces of paper that have Benjamin Franklin's picture on them.  It's balanced. 

And there's only one place where you can swap Benjamins for other goods and services. 

That would be in the USA, or with someone who will eventually spend them in the USA. 

It's always balanced. 

Those who claim otherwise have ulterior motives. 

Thanks for listening. 

Wednesday, January 22, 2014

Because Larry Page and Sergey Brin were allowed to get filthy rich....

Larry Page and Sergey Brin, the founders of Google, are now filthy rich.

They supposedly give a lot of their money to Democrat and (LOL) "progressive" causes.  I don't hold that against them. 

I think they deliberately lowered their Blogger/BlogSpot (their program that powers this site) search rankings so that conservative/libertarian voices will be muted.  I don't hold that against them any more. 

Their house, their rules. 

Because they were allowed to get filthy rich, my world is a better place.  I've taken on a new job in purchasing, and therefore I search the crap out of everything via Google.  Sheet metal.  ABS plastic.  Janitorial supplies.  1/4-20 hex cap bolts.  Extruded aluminum F-channel.  You name it, I'm looking for it, and Larry and Sergey help me out. 

Here's why I'm writing this.....   I got a weird-assed email from a Chinese vendor today, and it referenced some earlier conversation that was in Chinese. 

20 years ago, this would've been a huge problem.  I don't read Chinese very well.  But I just went to "Google Translate", copied and pasted, and there you have it.  It's not perfect, but it made sense.  Here's what I got, kinda sorta.  Mandarin Chinese is on the left, English is on the right.  What everyone wanted to say, but couldn't, is at the top:

 (Victor says that according to Allen Patterson, Frank is supposed to deal with Victor's next consignment shipment.  Allen thinks you can work it out.  This is probably Allen's way of dumping his responsibilities onto you.  Please let me know you got this and send a return receipt.  That way, the monkey is on your back.) 


Just as an FYI, Frank (who speaks perfectly good English because he's from Missouri) later said that Allen Patterson shouldn't dump this problem at Frank's door, and that Allen and Victor should work it out through other channels, namely, some other vendor. 

Larry and Sergey have done some good stuff.  They've made some wise decisions about which fields of online....."stuff"....(sorry, I'm very old) to invest in, and which stuff to avoid. 

But what if they'd been subject to FDR's "Undistributed Profits Tax"? 

This was a New Deal abortion that declared that if a big business didn't immediately plow its profits into dividends or wages, any profits could be taxed at up to 27%.  (This is a tax rate that most of us would now kill for, so please up it to around 75% to put it in perspective.) 

What if Larry's and Sergey's profits, every year, had been taxed at 75%?  Well, they would have hidden the money, unless they had something they could immediately pump it back into.  To hell with planning, to hell with putting some aside for a rainy day, and to hell with research and development.  It Google couldn't invest it in dividends or wages, Obama was going to get it to spend on the Democrat Vote Farm. 

What is Larry and Sergey were subject to the 90% tax rate that American Lefties always claim grew the Middle Class back in the 1950's ?  (Nobody paid 90%, by the way.  There were loopholes in the tax code.) 

What if they'd been required, at gunpoint, to "give something back"? 

What if Larry and Sergey had been forced to end "income inequality" by giving their money to Crack Whores?   

What if Larry's and Sergey's money had been used to fund Obama instead of Google Translate? 

I'd still be wondering what the hell Victor's email meant.  If there was such a thing as email. If there was such a thing as the internet (and no, politicians didn't invent it).  If there was such a thing as a computer.  If there was such a thing as a cell phone. 

The best way for us to get great stuff at a low price is to allow the Larrys and Sergeys to get filthy, stinkin' rich. 

Good for them.  And guys, thanks for inventing Google Translate.  Or to put it into Mandarin Chinese....

谢谢,Larry和Sergey,发明了谷歌翻译 

 

Sunday, December 8, 2013

Why Detroit Will Remain A 3rd-World Country

In the early 1980's the Chinese government, mostly because of citizens starving to death, decided to liberalize their economy.  They did this by opening some "Special Economic Zones" on their east coast.  These would be places where businesses and individuals would be left the hell alone to make money and provide for themselves as best they could (relative to the rest of China, of course). 

The experiment was a huge success, and has changed the world. 

Here's Wikipedia:

Special Economic Zones of the People's Republic of China (SEZs) are special economic zones located in mainland China. The government of the People's Republic of China gives SEZs special (more free market-oriented) economic policies and flexible governmental measures. This allows SEZs to utilize an economic management system that is more conducive to doing business than in the rest of mainland China.
Since 1980, the PRC has established special economic zones in Shenzhen, Zhuhai and Shantou in Guangdong Province and Xiamen in Fujian Province, and designated the entire province of Hainan a special economic zone.

Here's a chart showing the changes in GDP in each economic zone. 



Xiamen is where I used to go as a Quality Control supervisor, and is probably the most hog-stomping example of free-market capitalism I've ever seen.  The government doesn't care how rich you get, as long as you don't get too powerful.  Therefore people are clawing all over each other to get in. 

This is what Shenzen looked like before the government got out of the way, circa 1978.  The main industries were fishing and harvesting bamboo.  The city had 30,000 people and not a single traffic light:


This is Shenzen now.  There's a good chance that the device you're using to read this was partially manufactured in Shenzen. 
(Some of you may be offended by this picture, as there is now more income inequality in Shenzen than 30 years ago.  Despite pulling millions and millions of people out of bone-grinding poverty, the people who accomplished this miracle are condemned by many because they are now filthy, stinkin' rich.)

 
So what's the difference between the SEZ's and the rest of China?   Back to Wikipedia:
  1. Special tax incentives for foreign investments in the SEZs.
  2. Greater independence on international trade activities.
  3. Economic characteristics are represented as "4 principles"  (See 4-7)
  4. Construction primarily relies on attracting and utilizing foreign capital
  5. Primary economic forms are Sino-foreign joint ventures and partnerships as well as wholly foreign-owned enterprises
  6. Products are primarily export-oriented
  7. Economic activities are primarily driven by market forces
SEZs are listed separately in the national planning (including financial planning) and have province-level authority on economic administration. SEZs local congress and government have legislation authority.
Leong (2012) investigates the role of special economic zones in liberalizing the Chinese and Indian economies and their impact on economic growth..... The presence of SEZs increases regional growth but increasing the number of SEZs has negligible effect on growth. The key to faster economic growth appears to be a greater pace of liberalization.

Liberalization, of course, is being used in the old-school sense of the word, meaning "leave people the hell alone".  The American sense of liberalization means "how many ways can the government f**k with your life".   

You have no idea how much better off the Chinese are in these SEZ's.  It's a brand new world for them. 

Meanwhile, on the other side of the world, in a city that's just as screwed up as pre-reform China:

This week, Senator Rand Paul, who is likely running for president, suggested that Congress act to pass legislation which would declare Detroit an economic “freedom zone.” That is to lower taxes in Detroit to near 0% levels, spurring business activity and development.

We at "Against Crony Capitalism" wholeheartedly agree with this idea. We even called for something similar last year. Unleash the market in Detroit and the city will bloom.
Few cities have been as ravaged by inept governing and crony capitalism as Detroit has. Because of decades of mismanagement and neglect, what was once one of the great cities of the world is now a rusting heap. But it need not remain so.
Detroiters are now presented with an incredible opportunity in the proposed Freedom Zone. In the face of despair and economic ruin, they can show that the city which spawned Joe Lewis can become a contender on the world stage – again.
Seems a bit optimistic given where Detroit is now to imagine the city solvent, never mind thriving. But if the power of the market were unleashed in the city, if Detroiters and entrepreneurs from across the country and around the world could realize the simple benefit of keeping almost all of the fruits of their labor in the city, Detroit would roar back to life.
Michigan would see massive wealth inflows. The young and ambitious would come from the coasts instead of the other way around. People would actually WANT to buy homes in the city. If Detroit truly became a nearly tax fee zone, with services engineered through the market, the ambitious and smart, not to mention moneyed, of the world will come.
Here's why Detroit won't see these simple, common sense reforms take place in my lifetime.

1.  The current president of the United States is a class warrior.  He has persuaded a majority of us that it's better to keep everyone down than to allow entrepreneurs to get rich  (and in the process make all of us better off).  They'll never to allow an entrepreneur to increase his wealth by 10,000% if it increases the well-being of the rest of us by only 10%.  We now have a zero-sum mindset. 

2.  Detroit's government is full of bureaucratic parasites, goldbrickers and featherbedders.  Worse than most.  The city has 40 people who do nothing all day but write checks by hand.  They still have a blacksmith on staff, just in case departments that haven't had a horse in 50 years need to have a horse shoed / shod / given new horseshoes.  (Sorry.  I don't know the tenses of the verb "to shoe). 
Chinese bureaucrats are some of the worst people in the world, but they could easily be commanded by decrees from Beijing.  If they resisted, they were propped against a wall and shot.  Detroit's parasites have more autonomy than China's. 

3.  Any possible improvements to Detroit will be burdened with race-based set-asides. 

4.  Detroit hasn't hit rock bottom yet.  The city is still getting money from Uncle Sugar without having to change anything. 

Great idea, Mr. Paul.  But they'll never do it.


 

Monday, December 2, 2013

Since Chinese loans are paying for ObamaCare anyway....

I have a good friend who is working deep, deep in the bowels of the Obamacare website.  What he describes isn't pretty.  The project is so segmented that no one knows where responsibilities begin and end, and there appears to have been little or no coordination of the big picture. 

We ridicule him constantly, of course. 

I got this message from him a few days ago:
So I have a new story to share as part of the continuing saga of building out the Affordable Care Act (sic). 
So, I am on call this week and received a phone call for assistance at 9:00 p.m. 

It was weird because we were working with our west coast subsidiary called (deleted company name). They had a lot of people with heavy accents that I have never met before on the phone.

So I am discussing this with my Senior Director this morning.

(Big Computer Outfit), our parent company has outsourced the programming of the application development of the ACA to Chinese contractors.

So....we have outsourced the framework and database access that holds PHI (Personal Health Information) of all Americans to China.

Yes we can!
This prompted another buddy of mine to respond as follows:
So another country has access to our most intimate healthcare information while the FDA has ordered 23 and Me to halt sales of genetic testing kits to individuals who want to know about their own genetic make-up.  Chinese officials can know I got the crabs in 2009 but I can't find out if my own body is genetically predisposed to getting prostate cancer.  Sounds reasonable. 
 
I really don't know what else to say.  Hell, the Chinese are the ones paying for our government spending orgy anyway, so we're kinda obligated to give them the user names and passwords, right? 

Tuesday, May 14, 2013

The Odious Chinese Nachos Story

I’m not a picky eater. My father was a big advocate of “Eat what they set before you”, and my mother likes to try different recipes, mostly Southern Living Magazine’s fried salad/fried watermelon offerings. Good stuff.

When I cook, recipes are nothing but points of departure – a suggestion on how the other person once did it. If you’ve never run short on ingredients and hollowed out a Pop-Tart and used the crust in place of bread crumbs, you have no business calling yourself a cook.

But creativity has limits….

One of my China trips was supposed to last only 3 weeks (typically I’m gone for 5). Problems had erupted, solutions were rejected, and the bosses asked me to stay for another week. I failed in that week’s missions, so they asked me to stay yet another week.

After week four in the land of Mandarin Chinese, I was ready to speak some English. I can usually entertain myself with the contents of my head (one of the many, many advantages of an old-school Liberal Arts education) but I found myself bothering Texas co-workers on Skype more than necessary, and called home too many times at odd hours only to learn that the grass was still growing and that no dachshunds had died.

I started lurking in the lobby of the Xiamen Princess Hotel, hoping to catch other manufacturing exiles who could talk football, food, politics or even American Idol. After several nights of reading downstairs, advertising my availability like a Shanghai harbor whore, I saw someone going through the buffet line, a guy that looked like an American. He had on a John Deere Tractor T-shirt!

I ran over and introduced myself. (I may have offered to buy him a drink, given him my phone number, my room number, and told him how fit and manly he looked in his John Deer T-shirt.) He sensed my desperation level, and asked if I wanted to hang out with him and a buddy the next night. I’ve forgotten the guy’s name (Jason?), but he turned out to be from Memphis, Tennessee, and he and I had actually deer hunted on the same land in Tallahatchie County, Mississippi. His family had a successful business manufacturing high-end dresses in a factory two hours from Xiamen.

One night later, I met Jason and his friend Jeremy (?) in the lobby. We were going to go to Xiamen, China’s first Mexican restaurant. Let me be clear: we were going to go to Xiamen, China’s first Mexican restaurant.

I’m an optimist. Having already experienced Cleveland, Mississippi’s first Chinese restaurant, Jackson, Mississippi’s first Thai restaurant, and Merigold, Mississippi’s first ever restaurant, I didn’t think things could go too wrong in Xiamen’s first Mexican restaurant.

Jeremy, who was somewhat fluent in Mandarin, explained the sign over the front door – “Xiamen’s House Of Mexico”. The place had a ragged tourist-trap sombrero hung on one wall, and a map of Texas and Mexico painted on another. (Chinese people generally don’t know the shape of Mexico, but everyone knows the shape of Texas, and perhaps the Lone Star State was included as a point of reference. You are about to eat food from the little country south of the nation of Texas. Canadian singer/songwriter Fred Eaglsmith likes to talk about how proud Texas is of its shape. We’ll put that shape on anything.) If not for the mariachi hat and the Texican wall map, the place could’ve been any other noodle shop.

Well, except for the menu….

Veteran China travelers often collect examples of bad “Chinglish”. The menus at this place were in Spanese. Or Chinish. Whatever you call it when you cross Manchu Wok with Taco Bell. After we ordered our beers, Jeremy determined that the menu item “Chips Beef Medley Layer Family” was probably nachos. You can’t go wrong with nachos.

Here’s how they went wrong with nachos:

These restauranteurs had never seen, smelled, tasted, eaten, chewed or shat Mexican food in their lives.

My theory was that everything on the menu was created from photographs, with no other guidance.

Let’s start at the bottom of the “Chips Beef Medley Layer Family”, shall we? Where god-fearing Mexicans would put some corn tortilla chips as a foundation, Xiamen’s House Of Mexico had a layer of rice chips. Not a problem. They don’t grow much corn in China. When in Rome, etc., etc., etc.

Most nachos continue upward with a layer of sliced and spiced chicken or beef. The Chips Beef Medley Layer Family nachos got by with a thin layer of shaved pork. I’ve never seen this stuff outside of Asia, but it’s pretty good. Take some pig meat and repeatedly run it across a cheese grater for a couple of years. It has a good taste with almost no texture. Dust it on the rice chips of your Chips Beef Medley Layer Family, shortly before adding your….cheese.

Asians (stereotype alert!) generally don’t like cheese or dairy. They think that cheese tastes and smells like baby vomit, which, when you come to think of it….it does. That’s why one cheese is as good as another to them. Take some leftover Limburger and Munster, or any combo that smells worse, throw them in your Crock Pot and melt it until it can be smelled throughout the Middle Kingdom, from Beijing to Hong Kong. Apply liberally to the pulverized pork, and you have the stinky middle child of your Medley Layer Family in place.

I know for a fact that the Master Chef at Xiamen’s House Of Mexico had never been exposed to salsa. Or Picante, Pico De Gallo, Ranchero, Guacamole, Chimichurri Sauce, Habaneros, or Chipotle. This guy had never even seen a bottle of Wal-Mart’s Old El Paso Picante Sauce from New Jersey. So he improvised. The upper stuff in his nacho photos was red. Tomatoes are red. He needed red stuff.  So he took a large can of Campbell’s Tomato Paste and put three thick slices of it on top of the Limburgermunster cheese. We could still see the ring marks from the Campbell’s can.

Remember my Chinese stereotype, the one where they don’t like cheese or dairy? The chef's photo of nachos probably showed a dollop of sour cream on top of the Chips Beef Medley Layer Family. Native Chinese can’t imagine eating sour cream.

What to do, what to do?

Instead of sour cream, they topped off the rice chips, the shaved pork, the Dr. Scholl’s Shoe Insert Cheese, and the slices of tomato paste with…. A big ol’ scoop of Kool Whip.

I’ve probably spent six months in China, and have had only four or five bad meals. Of the bad meals, this was the one I enjoyed the most. Jason, Jeremy and I didn’t act like The Ugly Americans. We were polite. We used the rice chips to dig out the shredded pork. We drank. We bonded. We drank some more. 

Having learned our lesson, we decided to stop experimenting with Asian/Mexican Fusion Food. We vowed to eat the next night where the Chinese eat, to experience what the locals were eating. The next night, we ate at Kentucky Fried Chicken.

Sunday, May 5, 2013

How Nations Succeed: What's the secret to ending poverty?

Ever since I started going to China for work, I've been haunted by the bone-grinding poverty that my Chinese friends endured for decades while places like Taiwan and Hong Kong (with almost no natural resources but the same language and ethnicity) were able to thrive and prosper. 

So I've been taking the Marginal University online course in Developmental Economics.  I want to know more about why El Paso and Juarez have such radically different standards of living.  Yes, I am a geek.  Check it out when time permits.  You watch a video, you take a test.  You watch another video, you take another test.  You take a mid-term.  Repeat.  With a final. 

And for those who don't have a couple of months to watch videos on why The Bahamas prosper and Cuba fails, this is a quick alternative.... Thanks to the Fund for American Studies, here's a six-minute video  which tells the story of a nation whose typical citizen had to work 6-7 days a week, with no cell phones, virtually no indoor plumbing, no internet and very few automobiles, and how those people were able to pull themselves out of abject poverty in a relatively short amount of time. 

Enjoy !

Thursday, January 31, 2013

Socialism Does NOT Lead To Marxism

Socialism Does NOT Lead To Marxism.  Not all the time, anyway.  
But it does have a fairly consistent record of leading to cannibalism.  

I was doing some research on the total disaster known as North Korea.  Parents over there are eating their children.  Go here.  Parents are eating their children.  Parents are eating their children.  (On the upside, North Koreans have free healthcare, excellent gun control, and less of an income gap between rich and poor than the capitalist countries.)

I found this gem on Libertarian Reddit.  The blog from which it came has been taken down, but the horrors mentioned below are well-documented elsewhere.  

Freeze prices, take away the free market, eliminate incentives, eliminate property rights, all "for the common good" and for "fairness", and people will start eating each other.  It really is that simple.  


Socialists are everywhere these days. They loosely model themselves after the hippy movement; they drink PBR, smoke from elaborate bongs, and pretentiously advocate a form of socialism that they can’t quite define. They are unapologetically anti-American, anti-West, and usually, they aren’t worth anyone’s time, but lately, it has become overwhelming, so I would just like them to know one thing: socialism (i.e. abandoning property rights), wherever it has been tried, in whatever form, on whatever scale, has resulted in starvation and cannibalism. I compiled just a few examples for you:
North Korea: “We started seeing cannibalism. When one is very hungry, one can go crazy. One woman in my town killed her 7-month-old baby, and ate the baby with another woman. That woman's son reported them both to the authorities. I can't condemn cannibalism. Not that I wanted to eat human meat, but we were so hungry. It was common that people went to a fresh grave and dug up a body to eat meat. I witnessed a woman being questioned for cannibalism. She said it tasted good.”
Ukraine: “Some went insane. They never did become completely still. One could tell from their eyes–because their eyes shone. These were the people who cut up and cooked corpses, who killed their own children and ate them. In them the beast rose to the top as the human being died. I saw one. She had been brought to the district center under convoy. Her face was human, but her eyes were those of a wolf. These are cannibals.”
Soviet Union: “It is now and only now, when in the regions afflicted by the famine there is cannibalism and the roads are littered with hundreds if not thousands of corpses, that we can (and therefore must) pursue the acquisition of [church] valuables with the most ferocious and merciless energy, stopping at nothing in suppressing all resistance.” –Lenin
China: “Most of the culprits on the list practiced necrophagy, either eating those who had passed away or exhuming and eating cadavers after burial. When a team of inspectors was sent to review the Quiatou commune in Shizhu county, Sichuan, in early 1961, they were startled by the extent of cannibalism. In some cases, only parts of a body were eaten Zemin’s heart, for instance, was scooped out. Some people covered the meat in hot peppers.” (p. 323)
Cambodia: “When I got to the spot, I hid in a thicket from which I could watch the “ceremony” without being seen. But I was so horrified by what I saw that I nearly fainted. The condemned man was tied to a tree, his chest bare and blindfold over his eyes. Ta Sok, the executioner, using a large knife made a cut in the stomach of the poor man. In pain, the man screamed like a wild beast. Even today his cires still ring in my ears. Blood rushed out everywhere, his insides were all laid bare, and Ta Sok cut out his liver and cooked it on a little stove that Ta Chea had just heated up. They divided up the liver among them and ate it hungrily.” Another witness reports, “They ate many human livers this way.”
Angola: "The commander gave Kakule his knife, told him to pare the skin from an arm, a leg. He told Kakule and his other assistant to build a fire. From their satchels, the soldiers brought cassava bread. They sat in a circle. The commander placed the dead man's head at the center. He forced the two loggers to sit with them, to eat with them the pieces of boiled limb. The grilled liver, tongue and genitals had already been parceled out among the commander and his troops."
Jamestown, VA:  (Yes, Jamestown was founded as a Socialist Paradise.  The failed experiment ended when their government said "every man for himself".  The settlement then prospered.  Hit the Thanksgiving label at the bottom of this post. - TWS)  “So great was our famine that a savage we slew and buried, the poorer sorte tooke him up againe and eat him; and so did divers one another boyled and stewed with roots and herbs. It were too vile to say and scarce to be believed, what we endured: but the occasion was our own, for want of providence, industrie and government, and not the barrennesse and defect of the Country, as is generally supposed.”
“Can you really find anyone who is guilty? Just go and ask, and they will all tell you that they did it for the sake of virtue, for everybody’s good. That’s why they drove mothers to cannibalism.” -Ukraine


Wednesday, November 21, 2012

Happy Thanksgiving !!!

“Any man worth his salt would fight for his home but only a damn fool would fight for his boarding house.”
                                                                    -Mark Twain


Here's a story that I first heard in China several years ago, and I'm probably going to re-run this post about it every Thanksgiving until I die.  The best online account I've found is on the World Socialist Website (chuckle chuckle).  It's about some Chinese farmers who got tired of starving. 


On one night in Nov. 1978, 18 villagers of Xiaogang, including (leader) Yan Jinchang, risked their lives to sign secretly an agreement, which divided the then People's Commune-owned farmland into pieces for each family to cultivate.

This was a bold move, as it was seen as "capitalist" and might have led to severe punishment from the government at that time.

Thus, on that secret agreement covered with villagers' seals and red fingerprints, there was a wobbly line saying that "If any word about this is divulged and the team leader is put in prison, other team members shall share the responsibility to bring up his child till he (or she) is 18. "


The original copy of this agreement is now in a museum someplace in China.  It had a huge influence.  Instead of farming the land together, and putting up with slackers, loafers, regulatory parasites and the other inevitable Socialist baggage, this brave group of Chinese farmers decided that each family would be responsible for a certain section of the land. 


That clause about agreeing to care for each others' children was a simple insurance policy.  To the best of my knowledge, none of the farmers agreed to care for the families of those who didn't share their risks.  In other words, you couldn't waltz into the agreement AFTER losing your head of household.  There's not even a hint of Obamacare in this document. 


The facts proved that it's worthwhile to take the adventure. Allocating farmland to each household, also known as "household contract responsibility system", fired the locals' enthusiasm for agriculture production, which had been contained in the outmoded planned economy, and helped poverty-stricken locals out of starvation.


That's just what happened when they agreed to stop the collectivist nonsense.  Think of what could happen if they'd been allowed to own the land, instead of having it allocated to them by their "leaders".   


The grains that a local farmer turned over to the state in the following year almost totaled what he did in past two decades, recalled Yan Hongchang, one of the 18 Xiaogang villagers who initiated the contract system.

Their practice was later supported by Deng Xiaoping, chief architect of China's reform and opening-up drive, and recognized by the Chinese government. Xiaogang has since been labeled as the pace-setter of the nation's rural reform.


Here's a similar story, from the Volokh Conspiracy.  This one hits closer to home.



Many people believe that after suffering through a severe winter, the Pilgrims’ food shortages were resolved the following spring when the Native Americans taught them to plant corn and a Thanksgiving celebration resulted. In fact, the pilgrims continued to face chronic food shortages for three years until the harvest of 1623. Bad weather or lack of farming knowledge did not cause the pilgrims’ shortages. Bad economic incentives did.


Time to quote Thomas Sowell for the 10,000th time.  Laws and policies should never be evaluated by their stated goals and objectives, but by the incentives they create. 


In 1620 Plymouth Plantation was founded with a system of communal property rights. Food and supplies were held in common and then distributed based on equality and need as determined by Plantation officials.


Like we're about to do with healthcare. 


People received the same rations whether or not they contributed to producing the food, and residents were forbidden from producing their own food. Governor William Bradford, in his 1647 history, Of Plymouth Plantation, wrote that this system was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. The problem was that young men, that were most able and fit for labour, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. Because of the poor incentives, little food was produced.


In other words, when the hardest-working, most creative Pilgrims realized that they were working themselves to death for people who didn't want to work as hard?  They started Going Galt.   


Faced with potential starvation in the spring of 1623, the colony decided to implement a new economic system. Every family was assigned a private parcel of land. They could then keep all they grew for themselves, but now they alone were responsible for feeding themselves. While not a complete private property system, the move away from communal ownership had dramatic results.



This change, Bradford wrote, had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. Giving people economic incentives changed their behavior. Once the new system of property rights was in place, the women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability.

Once the Pilgrims in the Plymouth Plantation abandoned their communal economic system and adopted one with greater individual property rights, they never again faced the starvation and food shortages of the first three years. It was only after allowing greater property rights that they could feast without worrying that famine was just around the corner.


And what have we learned from this? 

Nothing.  Absolutely nothing. 

Thursday, October 4, 2012

How Mitt Romney will really harm the middle class

Almost every day of his life, George Mason University Economics professor Don Boudreaux writes a letter to the editor.  He's been doing this for years in a vain attempt to correct economic misinformation. 


Here's a recent corrective that Boudreaux sent to The Wall Street Journal, explaining that the John The Baptist Of ObamaCare is just as goofy as the founder of ObamaCare:

John Taylor is correct that Mitt Romney’s economic policies are less likely to thwart growth than are those of Pres. Obama (“The Romney Cure for Obama-Induced Economic Ills,” Oct. 4). The bar, alas, is low. Because entrepreneurs and investors aren’t keen to produce and take risks when the president threatens them with higher tax rates, saddles them with crushing regulations, and scolds them for allegedly being selfish, ungrateful, predatory, and (to boot!) not especially important to economic growth anyway, entrepreneurs and investors respond by producing less and taking fewer risks.

Mitt Romney does seem to be less hostile than is Barack Obama to entrepreneurship, commerce, and private investment.

Get ready people.... Get ready.  Here comes the patented Don Boudreaux Karate Kid Crane Kick !  THIS IS GONNA HURT !!!



But contrary to Mr. Taylor’s claim, Mr. Romney’s trade proposals are not clearly better than are the president’s. Mr. Taylor writes that “Mr. Romney intends to move ahead on trade agreements and create global enterprise zones to remove barriers to trade.” That would be grand. Yet what we hear most loudly about trade from Mr. Romney isn’t about freeing trade; it’s about restricting it. Mr. Romney repeatedly boasts that he’ll raise taxes on Americans who buy imports from China.

So rather than making a principled case for removing barriers, Mr. Romney’s singular trade obsession seems to be to raise barriers and thereby make trade less free.

Sincerely,

Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

John Taylor, consider yourself bitch-slapped.  Please offend us no more in that way.  Boudreaux WILL come back. 
The Mason Nation logo at the top came from the George Mason University bookstore site.  My arch-nemesis, Dr. Ralph, was good enough to get me one of the shirts, which I wear often.  You know you're a political geek when you wear your favorite university shirt because of the economics department, not the football or basketball team !! 

Monday, August 20, 2012

The Chinese Washing Machine Story 2.0

I'm totally buried at work. 
No time to post anything new. 
There's a chance I'll be going back to China soon. 
I'm trying to put together an e-book of these stories. 
Hope you like this one.  It's a re-post from 2007.  This is how it really happened !

**********************

I've been posting old emails from my China trips any time I'm too tired to think but too wired to sleep. This one's from a little more than a year ago, when I made a Quality Control trip to a vendor called "Aifei" in Xiamen.
Wendy is Aifei's #1 sales rep., and translator.

Here goes....


Dear family, friends, co-workers, Moderate Baptists, retail booksellers, and people from the Starbucks on Camp Bowie,

I hope everyone is doing well. I still don’t have Internet access at the new apartment, and haven’t had much free time outside of working at the factory and getting moved into the new place. I’m writing from the Coffee Bar near our new apartment.

Our company apartment is bigger, nicer, and more luxurious than anything that 99% of the Chinese can afford, or have ever seen. I never doubt for a moment that I’ve been blessed, and am very fortunate to have been born where I was born.

All that obligatory gratitude aside, the apartment was designed to look like the Jettson’s. Unfortunately, the utilities were provided by The Flintstones. It’s on the 27th floor of a high-rise that’s still being built by small angry people with lots of hammers.

Let’s start in the kitchen: There is a double sink with cold water only. The left-hand side sink is about the size of a piece of photocopier paper. The right-hand side sink is about the size and depth of a shoebox. Fran will tell you that I can dirty enough dishes, forks, ladles, and colanders to fill both of these sinks just by microwaving one pack of popcorn.

To the left of the sink is the space where the microwave ought to be. But that’s the only space where I can chop up whatever small animals that I’m having for dinner. (The food suppliers, restaurants, and I have a mutual “Don’t Ask, Don’t Tell” policy....) So the microwave stays on top of the fridge until needed. There is a dual surface gas cooktop that works great.

Below that is a Thing that’s not quite a Dishwasher. They call if a “sterilizer”. When I asked Wendy why I needed the sterilizer after the dishes had already been hand washed, she said “Bad Water”. I know all about the Bad Water from the medical disaster of my first trip. She also suggested that I leave the dishes in the sterilizer at all times. I asked why. She said “Bad Air”. Considering that they’re always burning huge piles of leftover Asbestos, DDT, Napalm, Agent Orange, etc. all over the countryside, I’m taking her advice. Good Karma.

The refrigerator is small, but will keep beer cold. The only ice trays they sell here are about the size of two playing cards placed end to end. The ice is all dice-sized cubelets. Made from Sparklett’s, because of Bad Water. A minor hassle.

I’ve got two great balconies. One of them overlooks other high-rises, but the other one has a great view of the lake and the bay. That’s where I have my new washer/dryer. (All in one machine.) It has two digital dials, and about 20 buttons. The owner’s manual is only in Chinese, which I’m slowly trying to translate with a Character-Finder dictionary (don’t ask how that works, it’s too tiresome to explain. But I feel like I’m on the Medieval Committee that turned all the Greek, Latin, and Hebrew into the King James Bible.)

For reasons that I don’t understand, this Washing Machine can be programmed to wash one load for up to 20 hours. Yes, 20 hours. I think it has a similar capability for drying times, but I’m afraid to find out. I might incinerate something.


Combine all this with a safety feature that won’t let you open the door when there is ANY water or ANY heat in the machine, and it’s time for ADVENTURES IN LAUNDRY ! ! ! My first load washed for about 3 hours, and dried for about half that many. I don’t have accurate times for the 2nd load on Sunday, because there was a lot of starting and stopping involved - I’d call it 9 hours total. Every time I tried to move from washing to drying, it started a new wash cycle for a random length of time. And of course, the door wouldn’t open. Then, when I did persuade it to go from wash to dry, after about 3 hours of drying, the damn door still wouldn’t open because of the excessive heat.

It was ridiculous. My shirts were held hostage. All the crowbars were back at the factory.

Most businesses here have a little Buddhist mini-shrine/altar somewhere on the premises. They burn incense on the altar in front of the Buddha statue about twice a day. If things are going badly, they will even place sacrificial fruit in front of the statue (apples, oranges, plums, etc. etc etc. Some people try to fake it with plastic fruit, but I bet that doesn’t work as well..)

Anyway, I thought it would make for a funny photo to show Wendy if I took a picture of some fruit in front of my washing machine, as a sort of hostage exchange for my shirts. I put some bananas, oranges, and grapes on the balcony in front of the washer, and went to get my camera. When I went back on the balcony to take the picture, the door was open. The Chinese Washing Machine was apparently satisfied with my offering.

You can’t make this stuff up

My shirts had been washed so many times they were almost transparent. And they will now fit my little daughter perfectly.

The washer/dryer works very hard, and it works for long, long hours. It’s very complicated. And you’re not going to get anything out of it until it’s ready to give it to you. So I’ve named it Aifei….

My driver just showed up to take me to the factory.

There’s more to tell, like the hot water heater that doesn’t hook to either of the sinks or to the shower, but maybe is what keeps the toilet water so nice and toasty. The bed has a Chinese-style mattress - a term I wasn’t familiar with until this trip. “Chinese Style Mattress” translates into English as “If you have a Basketball, you can dribble on it.” But this email is already over-long. This coffee bar has 6 CD’s in the music rotation, and one of them is Christmas music. When “Joy to the World” comes over the speakers, the Chinese workers and customers don’t know the difference, but all the Westerners in the place look up from their laptops and smile at each other. It’s great. I’ve met people from all over the world in this place. I love this country.

Go here if you have time to read the Chinese Dog Story. 


Friday, July 20, 2012

On Olympics uniforms made in China

Here's Don Boudreaux of the Cafe Hayek blog, on purchasing Olympics uniforms from China:

Sen. Harry Reid (D-NV) – a leader of a party whose members publicly preen themselves on their alleged devotion to science and realism – throws a conniption fit because the uniforms to be worn by U.S. athletes at the 2012 Olympics were stitched together in China rather than in America (“Burn US Olympic uniforms because they’re made in China,” July 12).

Mr. Reid’s outburst reveals his ignorance of a foundational conclusion of economic science, namely, that people are enriched when they’re free to purchase from whomever they choose regardless of political boundaries. Yes, there are economists who emphasize (mostly purely theoretical) exceptions to the case for free trade – none of which are relevant here – and even a few fringe economists who reject that case altogether. But economists’ overwhelming, non-partisan, and research-based consensus today is, as it has been for years, that free trade (even when unilateral) is beneficial. Mr. Reid’s temper tantrum proves that he is either inexcusably dimwitted about matters on which he legislates, or interested, not in science and realism and truth, but in scoring political points by appealing to the uninformed emotions of constituents.

If Mr. Reid had announced that locating water in the Mojave is easily done with divining rods, that cancer is best cured with crystals, or that the Senate chamber is haunted by Daniel Webster’s ghost, he’d be laughed out of office. But let him make a similarly laughable remark about trade and he continues to be treated as if he and his opinions deserve respect.

Sad.

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

Wednesday, July 11, 2012

Why I am a Libertarian - Hong Kong

Among the hundreds of reasons that I'm a libertarian is this little essay by P.J. O'Rourke.  It's from "Eat The Rich", a book on economics for the mainstream reader who would otherwise never pick up an economics text.  Parts of it are laugh-out-loud funny. 

 
The essay is about the miracle of Hong Kong.  Hong Kong is full of Chinese people.  They have the same work ethic as China.  Same past experience as China.  Hong Kong has worse land than China; it's just a rock in the ocean.  No natural resources except for the people.  With Hong Kong and mainland China you have a near-perfect subject/control group setup for an experiment....


In the previous century, China went into full-blown Marxist/Commie/Socialism.  Those poor people went through government-induced famines, economic disasters and purges that had body counts ten time greater than that of The Holocaust.  Hong Kong had the good experience of going as Free Market as possible, given the circumstances. 


Time magazine just named Hong Kong the best city in the world for 2012.

This may or may not be related to The Heritage Foundation giving Hong Kong the #1 spot in their index of economic freedom.

And yet, just 70 years ago, Hong Kong and China had almost identical standards of living.  One became a typical socialist shithole while the other prospered.   

(China started liberalizing their economy in the early 80's, but they still have a lot of catching up to do.) 

How did this happen?  By leaving people the hell alone as much as possible.  There were no calls for government to "do something" every time the stock market blipped or someone's puppy ran away. 

Here's P.J., from Eat The Rich:
 

How a peaceful, uncrowded place with ample wherewithal stays poor is hard to explain. How a conflict-ridden, grossly overpopulated place with no resources whatsoever gets rich is simple. The British colonial government turned Hong Kong into an economic miracle by doing nothing.

Hong Kong is the best contemporary example of laissez-faire. The economic theory of "allow to do" holds that all sorts of doings ought, indeed, to be allowed, and that government should interfere only to keep the peace, ensure legal rights, and protect property.

The people of Hong Kong have been free to do what they wanted, and what they wanted was, apparently, to create a stewing pandemonium: crowded, striving, ugly, and the most fabulous city on earth. It is a metropolis of amazing mess, an apparent stranger to zoning, a tumbling fuddle of streets too narrow and vendor chocked to walk along, slashed through with avenues too busy and broad to cross. It is a vertical city, rising 1,800 feet from Central District to Victoria Peak in less than a mile; so vertical that escalators run in place of sidewalks, and neighborhoods are named by altitude: Mid-Levels. Hong Kong is vertical in its buildings, too, and not just with glossy skyscrapers. Every tenement house and stack of commercial lofts sends an erection into the sky. Picture Wall Street on a Kilimanjaro slope, or, when it rains, picture a downhill Venice.

And rain it does for months. Hong Kong in monsoon season has a climate like boiled Ireland. Violent air-conditioning wars with humid heat in every home and place of business, producing a world with two temperatures: sauna and meat locker. The rainwater overwhelms the outgrown sewer system, which fumes and gurgles beneath streets ranged with limitless shopping. All the opulent goods of mankind are on display in an air of shit and Chanel.

It is a filled-in city, turgid with buildings. The Sham Shui Po district of Kowloon claims a population density of more than 425,000 people per square mile-eighteen times as crowded as New York. Landing at Kai Tak Airport, down one thin skid of Kowloon Bay landfill, you can watch women at bathroom mirrors putting on their makeup. You can tell them that their lipstick's crooked.


There is no space in Hong Kong for love or money, at least not for ordinary kinds of either. A three-bedroom apartment in Central rents for 1,000 $/month, but there isn't room in any of these bedrooms to even have sex with yourself. The whole home will be 700 square feet less than ten yards long by eight yards wide, with windows papered over because, outside those windows, a hand grab away, are the windows of the apartment next door. And anything you're going to fix in the kitchen had better be something that can be stood on end-like a banana. This is how middle-class people live. Poor people in public housing will have three generations in a fifteen-by-twenty-foot room.

But when they come out of that room, they'll be wearing Versace and Dior-some of it even real. Hong Kong is a styling city, up on the trends. Truly up, in the case of platform sneakers. You can spend an entertaining afternoon on Hollywood Road watching teens fall off their shoes. Over the grinding hills, in the blood-clot traffic, men nonetheless drive their Turbo 911s.The S-class Mercedes is the Honda Civic of Hong Kong, and for the soccer-mom set, a Rolls and a driver is a minivan.

Jesus, it's a rich city. Except where it's Christ-almighty poor. Hong Kong is full of that "poverty midst plenty" stuff beloved of foreign correspondents such as myself who, when doing a Hong Kong piece, rush from interviews with day-laboring "cage men" in barred flophouse partitions to dinners in the blandly exclusive confines of Happy Valley's Jockey Club, where I could sample the one true Hong Kong luxury-distance between tables. But, those poor are going to get rich. Just ask them. You can call the old lady selling dried fish on the street on her cell phone.

The bippity-beep of cell phones all but drowns the air-conditioner racket. And each time a cell phone rings, everyone within earshot goes into a self-administered frisk, patting himself down to find the wee gadget. You can go weeks without talking to an answering machine, because you're not really dialing a telephone, you're dialing an armpit, purse, shirt pocket, or bikini top.

The cell-phone has to be there, or somebody might miss a deal. Everything is a deal. In a store you ask: "What's your best price?" then "What 's your Chinese price?" and on from there. I was trying to buy a bottle of cognac in a restaurant. The owner produced a brand I'd never heard of for 100$ and a brand nobody's heard of for 80$. I got my friend Annie, who let fly in Cantonese, and we had a bottle of Remy for one dead U.S Grant. I didn't know you were going to bring my sister in here", said the owner. "Hwa-aaah!"

It is a Cantonese exclamation halfway between oi vey and fuhgedaboutit. Which is Hong Kong in a nutshell-a completely foreign city that's utterly comprehensible. It's a modern place, deaf to charm, dumb in the language of aesthetics, caught up in a wild, romantic passion for the plain utilitarian. The only traditional touches are the catawampus walls and whichaway entrances dictated by feng shui, the art of placing things so as to ensure luck and not to disturb spirits. One building in Repulse Bay has an enormous square hole in its middle so that a certain invisible dragon can get from the mountain to the sea. Knowing Hong Kong, it was probably a scam with a paid-off fortune-teller helping architects and construction companies boost their fees. Some of Hong Kong may believe in geomancy, but it was my local bookstore in New Hamphire that had thirteen feng shui titles.

Everything else quaint within reach in Hong Kong has been torn down. Just a few poky colonial government buildings are left. Landfill has pushed the waterfront a thousand feet into Victoria Harbor. Ferry terminals block the water views, and tides are cramped into a raging flume between Central and Kowloon.

The statue in Statue Square is of a business manager, the nineteenth century chief executive of the Hong Kong and Shanghai Bank. Behind the square, the Hong Kong and Shanghai Bank Building itself rises. Here the local taste for functionalism has been carried to an extreme that arrives at rococo: a massy, looming, steel Tinkertoy of a thing with its whole construction hanging, suspension-bridge fashion, from eight enormous towers. Very functional, indeed, whatever that function is. Maybe to be expensive. It cost a billion dollars to build.

To the west is Jardine House, an aluminium-skinned monolith covered with circular pothole windows-Thousand Assholes, as it's known. To the east is the I.M.Pei-designed Bank of China Tower-all big diagonals and tricky, skinny angles. Its purpose was to be the tallest building in Asia, which it was for about five minutes before being overtopped by Central Plaza a few miles away, and then by twin towers-the tallest enclosed structures in the world-being built at Kuala Lumpur.

A competitive place, Southeast Asia. And it attracts some types that can compete with anything I've seen. I sat at dinner one night between a tough-as-lug-nuts young woman from the mainland who lives in New York and deals in used motor oil-sparkling table talk-and a large and equally adamantine chick from the wrong side of somewhere's tracks in America. I turned to the suicide blond.

"I'm uh arht cunsultunt," she said.

"Come again?"

"Un arht cunsultant."

"That's interesting. Who do you art-consult for?"

She named a large Saudi prince.

"What kind of art does the prince like?" I asked.

"Nineteen-cenchury reuhlist-you know, Uhmerican"

"Any particular artist?"

"Andrew Wyeth"

I'd been under the impression that Andrew Wyeth was still alive-rare in a nineteenth-century artist. And you'd think Hong Kong would be a strange place to look for one of his paintings. But who knows? They shop hard in Hong Kong. Buy hard. Sell hard. They drink hard, too. On Friday nights, police are posted in the Lan Kwai Fong bar district because people have actually been crushed to death during happy hour. Nobody takes it easy in Hong Kong. The only idleness visible is on Sundays, when thousands of the city's overworked Filipino maids come to Central, spread cloths and plastic sheets up and down the sidewalks, and picnic in the least attractive and most heat-baked part of town.

The Filipino maids are Hong Kongese, too. They are in Central because it is practical to get there on the subways, trams, and buses. Hong Kong is a practical place, down to earth, or, rather, down to concrete. The complimentary city guide in my hotel room gave advice on pricing whores and noted, "Some of the conservative hotels don't allow a man to toddle in with a rent-in-bird in the middle of the night. But, as you can imagine there are plenty of 'cheap guest houses'."

In the window of an antique shop, I saw an ivory carving of the familiar row of monkeys:" see no evil, hear no evil, speak no evil; but this one had a fourth monkey with his hands over his balls: fuck no evil.

City of hardheads. City of rough tongues. You are a gweilo right to your face, meaning a white goblin or foreign ghost or old devil or any number of other things, according to how it is said (none of the meanings being complimentary)You can give back as good as you get, however(or try to, since gweilos are famously dim).For instance, the Cantonese really cant distinguish ls from rs.

"Ah,you ordered flied lice," said Annie's gweilo husband, Hugh. "That's fried rice, you plick," said Annie.

I met two women who seemed barely into their twenties but were the publisher and the sales manager of a prominent Hong Kong business magazine.

Publisher: "You are really well-dressed."

Sales manager: "For a journalist. We understand you are a popular writer."

Publisher: "In Japan."

City of straight faces. I was looking at some animal figurines representing Chinese astrological signs. The ancient woman behind the shop counter asked, "What year you born?"

"1947"

"Hwa-aaah. Year of pig! Good luck!"

"Oh, 'Good luck! Good luck!'" I said. "That's what Chinese always say to shopping gweilos. Stolen Ming dynasty grave offerings: 'Good luck!' Can of tuna fish: 'Good luck!' Lacoste shirt: Good luck!'"

"Not so!" she said. "Some years bad luck."

"Such as?"

"Year of buffalo."

"Which year is that?"

"This one."

"This one" being 1997.

I had come to Hong Kong to watch the best contemporary example of laissez-faire be surrendered to the biggest remaining example of socialist totalitarianism.

Hong Kong was (and to be fair to its new commie rulers, remains for the moment) socialism's perfect opposite. Hong Kong does not have import or export duties, or restrictions on investments coming in, or limits on profits going out. There is no capital-gains tax, no interest tax, no sales tax, and no tax breaks for muddle-butt companies that can't make it on their own.

The corporate tax in Hong Kong is 16.5 percent of profits. The individual tax rate is 15 percent of gross income. Hong Kong's government runs a permanent budget surplus and consumes only 6.9 percent of gross domestic product (compared with the 20.8 percent of GDP spent just by the federal government in the U.S) The people of Hong Kong have not been paylings of the state. They are owned their own. They have been able to blow it, Dow Jones it, start a sweater factory, hire, fire, sell, retire, or buy a farm (And there actually are some little-bitty farms in the New Territories).

Hong Kong has never had democracy, but its wallet-size liberties, its Rights-of-Man-in-a-purse, have been so important to individualism and self-governance that in 1995 an international group of libertarian think tanks was moved to perhaps overstate the case and claim, "Hong Kong is the freest nation in the world."

Free because there's been freedom to screw up, too. Hong Kong has no minimum wage, no unemployment benefits, no union-boosting legislation, no Social Security, no national health program, and hardly enough welfare to keep one U.S trailer park in satellite dishes and Marlboro Lights. Just 1.2 percent of GDP goes in transfers to the helplessly poor or subsidies to the hopelessly profitless.

Living without a safety net, people in Hong Kong have kept a grip on the trapeze. The unemployment rate is below 3 percent. In America, a shooting war is usually needed to get unemployment that low. The "natural rate" of unemployment is considered to be about 5 percent in the U.S., which rate would cause natural death from starvation in Hong Kong. But they are not dying. Although smoking is the city's principal indoor athletic activity, life expectancy in Hong Kong is about seventy-nine years, compared with seventy-six in the States. And the infant-mortality rate is comparable to our own. This from people who consider crushed pearls, dried sea horses, and horns from the dead rhinos of Tanzania to be efficacious medicine. Even the babies are too busy to die. Economic growth in Hong Kong has averaged 7.5 percent per year for the past twenty years, causing gross domestic product to quadruple since 1975.With barely one-tenth of 1 percent of the world's population, Hong Kong is the world's eighth-largest international trader and tenth-largest exporter of services.

I'm not exactly sure what "exporter of services" means, unless its fly-by dim sum, but, anyway, it's a fine statistic and helped make dinky, terrifying Kai Tai Airport the third-busiest passenger terminal in the world and the second-busiest air-cargo center. And Kai Tak's solitary runway sticks out into a container port that is the world's most busy of all. Hong Kong's per capita GDP is $26,000.Average individual wealth is greater than in Japan or Germany. It is $5,600 greater than what Hong Kong's ex-colonial masters back in Britain have, and is creeping up on the U.S per capita GDP of $28,600.

Besides Americans, only the people of Luxembourg and Switzerland are richer than those of Hong Kong. And these are two other places where capital is allowed to move and earn freely.

True, there has been an "Asian crisis" since the above statistics were compiled. The Hong Kong stock market has flopped. Indonesia, Thailand, Malaysia, South Korea, and maybe Japan are experiencing depressions. The entire business world of Asia is supposed to be in ruins. But a mere continent wide financial collapse is unlikely to faze the people of Hong Kong.

Hong Kong's economy was destroyed by the Japanese occupation of World War 2, destroyed again by the UN embargo on trade with the Communists in 1951,and almost destroyed a third time by worry about the 1997 handover to China. The territory has been squeegeed by ty-phoons, squished by mudslides, toasted by enormous squatter-camp fires, and mashed by repeated refugee influxes. Hong Kong has no forests, mines, or oil wells, no large-scale agriculture, and definitely no places to park. Hong Kong even has to import water. So in Hong Kong they drink cognac instead, more per person than anywhere else in the world. They own more Rolls-Royces per person, too. So what if there is no space at the curb? They'll hire somebody fresh from the mainland to drive around the block all night.

Why did the British allow this marvel of free enterprise? Why did Britain do so little to interfere with Hong Kong's economic liberty? This is especially hard to answer because, back in London, an ultrainterfering socialist Parliament had taken charge after World War 2.This government would bring the U.K's own economy to a halt like a hippo dropped on a handcart.

Actually, the British did piss in the colonial soup when they could. The crown government held the title to almost all the land in the Hong Kong and the New Territories, and dealt it our slowly to keep sales revenues high. Thus the crowding in a place which, in fact, comprises some 402 square miles of dry ground-enough, in theory, to give everybody a bean-sprout garden. Instead, half the population is stuck in claustrophobic government housing. Then in the 70's,one of Hong Kong's thicker governors, Sir Murray Maclehose, set aside 40 percent of the colony as parkland - cramped comfort to the fellow living in 300 square feet with his wife. Mother, kids, and their Tamagotchi pets.

But the British never tried to install a European-style Pampers-to-June Allyson welfare system in Hong Kong. Maybe the Labour M.P.s were unwilling to invest vast quantities of groundnut scheme-type pinko planning geniuses across the border. Maybe the colonial administrators were overwhelmed by the number of refugees from pinko planning jamming into town. Maybe the mother country was too broke from ruining its own economy in the British Isles. Or maybe the Brits just did not care about pushing social justice down the throats of people who were, after all, only Chinese.

On the other hand, the British were not irresponsible. The "doing nothing" system mentioned at the beginning of this chapter is a relative term. Laissez-faire is not Tanzanian administrative sloth or Albanian popular anarchy.

Quite a bit of government effort is required to create a system in which government leaves people alone. Hong Kong's colonial administration provided courts, contract enforcement, laws that applied to everyone, some measure of national defense (although the Red Chinese People's Liberation Army probably could have lazed its way across the border anytime it wanted), an effective police force (Hong Kong's crime rate is lower than Tokyo's), and bureaucracy that was efficient and uncorrupt but not so hideously uncorrupt that it would not turn a blind eye on an occasional palm-greasing illegal refugee or unlicensed street vendor.

The Brits built schools and roads. And the kids went to school because they knew if they did not, they'd have to hit that road. And the U.K gave Hong Kong a stable currency, which it did totally by cheating-first pegging the Hong Kong currency to the British pound and then, when everyone got done laughing at that, pegging to the U.S dollar at a rate of 7.8:1.Now when there are any money-supply dirty work to be done, Hong Kong can blame everything on Alan Greenspan.

Hong Kong was also fortunate in having a colonial government which included some real British heroes, men who helped of these the place stay as good as it was for a s long as it did.

The most heroic of these was John Cowperthwaite, a young colonial officer sent to Hong Kong in 1945 to oversee the colony's economic recovery. "Upon arrival, however," said a Far Eastern Economic Review article about Cowperthwaite, "he found it recovering quite nicely without him."


Cowperthwaite took the lesson to heart, and while he was in charge, he strictly limited bureaucratic interference in the economy growth or the size of GDP.

(Sorry for the interruption, but I've gotta throw this in....Cowperthwaite famously refused to collect economic statistics, "for fear that I might be forced to do something about them")

The Cubans wont let anyone get those figures, either. But Cowperthwaite forbade it for an opposite reason. He felt that these numbers were nobody's business and would only be misused by policy fools.

Cowperthwaite has said of his role in Hong Kong's astounding growth: "I did very little. All I did was to try to prevent some of the things that might undo it."

He served as the colony's financial secretary from 1961 to 1971.In the debate over the 1961 budget, he spoke words that should be engraved over the portals of every legislature worldwide; no, tattooed on the legislators' faces:

"....in the long run the aggregate of decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is less likely to do harm than the centralized decisions of a government; and, certainly the harm is likely to be counteracted faster."
Even Newsweek has been forced into admiration: "While Britain continued to build a welfare state, Cowperthwaite was saying 'no': no export subsidies, no tariffs. No personal taxes higher than 15 percent, red tape so thin a one-page form can launch a company."

During Cowperthwaite's "nothing doing" tenure, Hong Kong's exports grew by an average of 13.8 percent a year, industrial wages doubled, and the number of households in extreme poverty shrank from more than half to 16 percent.

"It would be hard to overestimate the debt Hong Kong owes to Cowperthwaite," said economist Milton Friedman. And it would be hard to overestimate the debt Hong Kong owes to the Chinese people who sanctioned and supported what Cowperthwaite was doing or, rather, doing not.

Because Hong Kong did not get rich simply as a result of freedom and law. Economics is easier than economists claim, but its not as easy as that. Chinese culture was a factor in Hong Kong;s success. And yet, almost by definition, Chinese culture must have been a factor in mainland China's failure. Culture is complex. Complexities are fun to talk about, but, when it comes to action, simplicities are often more effective. John Cowperthwaite was a master of simplicities.

Yeung Way Hong, publisher of Hong Kong's most popular Chinese language magazine, Next, has suggested erecting an heroic-scale statue of John Cowperthwaite (To be paid for by private subscription, thank you).

In less than one lifetime, Hong Kong created the environment of comfort and hope that every place on earth has been trying to achieve since the days of homo erectus in the Olduvai Gorge. And Hong Kong's reward? It has been made a "Special administrative Region" of the People's Republic of China.

At midnight on June 30,1997,the British sold six million five hundred thousand souls. No,gave them away. Nearly a Londonful of individuals, supposed citizens of the realm that invented rights, equity, and the rule of law, got Christmas-goosed in July. Hong Kong was on the cuffo, a gimme, an Annie Oakley for the mainland Communists. At the stroke of 12, I was watching TV in my Hong Kong hotel room. The handover ceremony was being broadcast from the hideous new convention center three-quarters of a mile away.

A British military band wearing hats made from Yogi and Smokey and Poo played: "God save the Queen." The Union Jack went south. Prince Charles had just given a little speech. "We shall not forget you, and we shall watch with closest interest as you embark on this new era of your remarkable history." In other words, "Goodbye and bolt the door, bugger you."


Outside, on my hotel-room balcony, the floodlit convention center was all too visible on the harbor front, looking like somebody sat on the Sydney Opera House. Directly below the balcony, a couple thousand not very noisy protesters stood in the rain in Statue Square, looking like somebody was about to sit on them. They were listening to democracy advocate Martin Lee. Mr. Lee was a member of the first freely elected legislature in the history of Hong Kong. And the last. It was unelected at midnight. Mr. Lee was speaking without a police permit. And speaking. And speaking. Every now and then a disconsolate chant of agreement rose from the crowd. Mr. Lee kept speaking. No one bothered to stop him.

Back inside, on the TV, president of China Jiang Zemin was speaking, too-introducing himself to his instant, involuntary fellow countrymen with a poker-faced hollering of banalities in Mandarin.

"We owe all our achievements most fundamentally! To the road of building socialism! With Chinese characteristics! Which we have taken!!!" he said, interrupting his speech with episodes of self-applause, done in the official politburo manner by holding the hands sideways and moving the fingers and palms as if to make quacky-quacky shadow puppets.

The big men on the convention-center podium-Jiang, Prime Minister Li Peng, and Foreign Minister Qian Qichen-seemed to have made their own suit jackets at home. Tung Chee-hwa, the Beijing-appointed chief executive of the new Hong Kong Special Administration Region, came to the microphone next, making pronouncements that combined a political-reeducation-camp lecture ("Our thoughts and remembrance go, with great reverence, to the late Deng Xiaoping)"with a Dick Gephardt speech ("We respect minority views but also shoulder collective responsibility. We value plurality but discourage open confrontation. We strive for liberty but not at the expense of blah,blah,blah.").

This also was said in Mandarin, which is not the native tongue in Hong Kong. In fact, no one uses it there, and having the HK chief executive lipping away in an alien lingo was like hearing an American politician speaking meaningless, bizarre...it was like hearing an American politician speak.

Outside on the balcony again (covering the Hong Kong handover required a journalist to give his utmost-what with AC-chilled binocs fogging in the tropical heat and a minibar running low on ice)? I watched the HMS Britannia pull away from the convention-center dock. A non-descript, freighter-shaped vessel painted white, Brittania looked to be more an unfortunate cruise-ship choice than a royal yacht. It steamed through Victoria Harbour, hauling butt from now foreign waters. On board were the last British governor of Hong Kong, the aristocrat currently known as Prince of Wales, any number of other dignitaries, and, I hope, a large cargo of guilt.

Would the limeys have skipped town if Hong Kong was full of 6.5 million big, pink, freckled, hay-haired, kipper-tucking, pint-sloshing, work-shy, layabout, Labour-voting¡­Well, in that case¡­

Maybe Hong Kong just was not one of those vital, strategic places worth fighting for-like the Falklands. Maybe the Poms only intervene militarily where there's enough sheep to keep the troops entertained.

Why did not the British give back some other island to China. Britain, for example. This would get the U.K. back on a capitalist course-Beijing being more interested in moneymaking than Tony Blair. Plus, the Chinese have extensive experience settling royal-family problems.

Or why did not Britain sell England to Hong Kong? Hong Kong can afford it, and that way anyone who was worried about the fate of democracy in the Special Administrative Region could go live in Sloane Square, and the rest of England could be turned into a theme park.

There's quaint scenery, lots of amusements for the kiddies ("Changing of the Wives") at Buckingham Palace is good), and plenty of souvenirs, such as, if you donate enough money to the right political party, a knighthood.

But, this didn't happen. And the people of Hong Kong (unless they were very rich) were stuck in Hong Kong. Sure, they had British passports. But, these were "starter passports"-good for travel to...Macao.

Of course, they could have gotten passport upgrades. For a million Hong Kong dollars, they could have gone to Toronto. Very fun.

Oh, lets give the limeys a break. It's not as if we Americans gave a damn, either. We could have threatened to stealth-bomber the Red Chinese or, for that matter, Margaret Thatcher when she started gift-wrapping Hong Kong for Deng Xiaoping. We could have told China to go kiss Boris Yeltsin's ass if it wanted to be a most-favoured nation. And we could have handed out 6.5 million green cards.

Imagine 6.5 million savvy, hardworking citizens-to-be with a great cuisine. What a blessing for America. And how we would hate them. Pat Buchanan would hate their race. The AFL-CIO would hate their wage rate. The NAACP would hate their failure to fail as a minority. And, Al Gore would hate 6.5 million campaign contributors who didn't have to sneak pro-free-trade money to the Democratic National Committee anymore but could go right into polling booths and vote Republican.

The surrender of Hong Kong was a shameful moment. But if you missed Martin Lee's soggy peroratition in Statue Square, you might never have known it.

The stock market was still on a swell, up 30 percent from a year before, with bulging, steroidal gains in the so-called red chips, the mainland holding companies promoted by the ChiComs. Trade and foreign investment were at unexampled heights. No one was running from the real-estate market. Tiny condominiums in unglamorous districts were going for $500,000.

A five-day weekend was declared, though no one closed shop. Retail sales were 30 percent to 40 percent above the usual. Important people had flown in from all over the globe. I saw the back of Margaret Thatcher's head in my hotel lobby.

On July 1("Dependence Day," I guess) people who should have known better sent messages of cheer, fulsomely printed in the South China Morning Post:
"China has made important commitments to maintain Hong Kong's freedom and autonomy".-- Bill Clinton

"Hong Kong can be an ever better place in which to live and work."-- Madeleine Albright
"I feel pretty relaxed about it."-- George Bush

 
Skyrockets splattered in the evening skies. The British Farewell Ceremony for 10,000 invited guests had featured not only bands from the Scots Guards, Black Watch, and various other men without pants, but also from Hong Kong Philharmonic Orchestra and (I saw this) a dance troupe with performers dressed as giant deutsche marks, enormous circuit boards, and huge powdered wigs. At the other end of the lifestyle continuum, there was a One Nation Under a Groove 11 p.m to 9 a.m rave.

In between were thousands of parties, from impromptu expat booze-ups in the Wan Chai lap-dancing district to dinners with courses incalculable by abacus at Hong Kong mogul David Tang's China Club.

Here the whole food chain was ravaged, from depth of sea slug to bird's nest height. The China Club is decorated colonial style in big-wallah mahogany, except the walls are covered with Mao-era socialist-realism art, and the waiters and waitresses are dressed as Red Guards. Meaning? I have no idea.

I also have no idea why my hotel kept giving me handover gifts: a bottle of champagne, a coffee-table book about Hong Kong titled Return to the heart of the Dragon (less ominous-sounding in Chinese, I gather), and a silver mug bearing crossed British and Chinese flags, and inscribed:

Resumption of Sovereignty


To China


1 July 1977


Hong Kong

To which I intend to have added:

Bowling Tournament


2nd place
Whimsical handover T-shirts, many making hangover puns, were for sale around the city, as such humorous novelties as "Canned Colonial Air-Sealed before June 30th." I suppose the same sort of things were being marketed in Vienna in 1938: "Last Yarmulke before Anschluss," and so on. Maybe in occupied France, too: "Vichy Water," ha-ha.

There were grumbles in Hong Kong, of course, such as dissidentish shows by artists objecting to censorship, in case there was going to be any.

Martin Lee and his fellow Democratic Party members gave a glum press conference, at which they promised to keep representing their electoral districts, even if they didn't anymore. And a certain amount of fretting in the press was seen, but mostly of the affectless editorial page kind that mixes After Genocide-Wither Rwanda? With After Gretzky-Wither Hockey? Hong Kong on the whole, was awfully darn cheerful.

Why weren't 6.5 million people more upset about being palmed off to an ideology-impaired dictatorship that has the H-bomb? Even one of Taiwan's top representatives in Hong Kong was quoted saying, "As a Chinese person, I think it is a good thing that Hong Kong is coming back to China." Chiang-Kai-shek, please.

There is the colonialism issue.

How did the Chinese of Hong Kong really feel about being ruled by England? It's a complex question. Or, as a number of Chinese people said to me, "no, it isn't." Being an American, an Irish-American to boot, I was maybe, told certain things that the English did not hear. "We hate the English," for instance.

When a Chinese friend said that, I said, "wait a minute was in Vietnam not long ago, and nobody seemed to hate Americans. If the Vietnamese can forgive the Americans for napalm, carpet bombing, agent orange, and what-all, surely you can forgive the English for the odd opium war and some 'Land of Hope and Glory' karaoke"

"It's a different thing," said my friend. "You just killed the Vietnamese; you never snubbed them."

Hong Kong's people are also realists. Calling in to complain on the Larry King Show wasn't going to do much. Thus the tepid response to the handover's endless television and newspaper "streeters", the interviews with random locals: "Excuse me, I understand you're about to get secret police in your neighbourhood. Would you care to tell the world how much you hate Jiang Zemin?"

There are real reasons for Hong Kong's realism. In 1945 the population of the territory was only 1.2 million. Today, the whole city is filled with refugees and children of refugees. Until 1981,Hong Kong had a "touch base" asylum policy where, basically, anyone from the mainland who made it to downtown could stay.

The Chinese who fled the civil war, the communist takeover on the mainland, and the lunatic deprivations and slaughters that followed know that there's only one real safe haven: money.

And they are serious about making it.