|March 27, 2012||Debunking Cyber Warfare and Other Illicit Derring Do||無評論|
|February 29, 2012||Linsanity too late for Soldiers Chen and Lew||1 評論|
|February 29, 2012||The Making of Renminbi on Becoming a Global Currency||無評論|
|February 29, 2012||Keeping Manufacturing in America Won't be Easy||無評論|
|February 29, 2012||Lesson from Taiwan's Recent Election||無評論|
|December 28, 2011||Time to Hold US Congress Accountable||無評論|
|December 28, 2011||Review of US China Bilateral Relations for 2012||無評論|
By now, everybody knows linsanity refers to Jeremy Lin, the basketball star from Harvard, undrafted by any of the NBA teams, who warmed the bench for two other professional teams before coming off the bench for the NY Knicks in an act of desperation by the coach. Lin promptly led his team to a win, the first of nine wins in the next eleven games. He became the toast of New York and an instant worldwide sensation.
The Knicks took on Dallas Mavericks, last year’s NBA champ and I saw a real deal. Lin drove through a forest of opponents for layups or passed to wide-open teammates. He sank long-range three pointers in crucial moments or he drew the defenders so that his teammates were unimpeded as they threw in three point bombs. He was fearless and physical as the game dictated.
In the post game analysis, the great Magic Johnson unequivocally declared that Lin’s star presence would be in the NBA for a long time. None of his fellow panelists disagreed.
Lin’s heroics on the court immediately drew a following from the Asian communities of the world, heretofore thought too small, too short and too frail to play this contact sport. But Lin didn’t just become a role model for Asian Americans. He has won the ultimate accolade: every kid--black, brown or white--on the neighborhood playground now aspires to be a Jeremy Lin.
Linsanity also caused me to reflect on the tragic fate of Danny Chen and Harry Lew, two American soldiers who took their own lives in Afghanistan. These were two unrelated victims of hazing by their fellow soldiers. Sadly the misery they experienced was so brutal and unrelenting that they found ending their young lives the only way out of their torment.
These incidents reflect a failure of American values and the leadership of the military: The former because America continues to regard people of Asian ancestry as not American, but as the other; the latter because the military not only failed to prevent such racism from their ranks but also failed to impose appropriate penalty on the perpetrators for the hate crimes.
Hate crimes against African Americans evoke high decibel outcries but hardly a murmur when perpetrated against Asian Americans.
It will be up to the Asian American community to make noise in order to rectify the wrong. During the first Gulf War, friendly missiles shot down two American helicopters. The pilots who pulled the trigger were exonerated but not Captain Jim Wang of the Awac flying surveillance.
The late Sam Chu Lin, a mainstream media star who became a voice of conscience, rallied the Chinese American community and with the help of the Committee of 100 made sure that Captain Wang had proper defense counsel leading to dismissal of all charges against him.
Wen Ho Lee was the designated scapegoat and sacrificial lamb in the political struggle between the Republican Congress and Democrat President Clinton. He would have rotted in jail as a spy for China had the Asian American community not come to his support. Sam played an active role in this case as well.
In this case, the American public took no pains to make the distinction as to whether Lee, who came from Taiwan, was Chinese or not. To this day, some still considers him a spy though the court found him not guilty of any espionage charges. Those that still accuse Lee of spying have also forgotten that the court did find the FBI lying in court under oath.
Maybe Jeremy Lin with his continued success will erase some of the prejudices that reside in America against Asians. Perhaps linsanity, had it occurred a couple years earlier, could have blunted some of the bias of the American soldiers and caused them to regard ethnic Asian in their ranks as less gook and more fellow soldiers.
But we can’t count on Jeremy Lin to carry entire load for racial equality on his shoulders. We, the Asian American community, must stand up and demand our rights as full fledged, tax paying, law abiding citizens to all the respect pertaining thereto just like the next person.
After the financial crisis of 2008, it became obvious that the dollar was on a long term path of declining value. While China has not been the only country to want to avoid holding on to too many dollars, China has been the busiest in entering currency swaps with its many trading partners. Bilateral currency swaps allow the participating nations to pay their trade invoices with their own currency and not with dollars.
Here is a compilation of swap agreements China has entered to date.
2008, December - South Korea, 180 bn yuan since extended
2009, January - Hong Kong, 200 bn yuan since doubled to 400 bn in Nov 2011
February - Malaysia, 80 bn yuan, extended 2/12 & increased to 180 bn yuan
March - Indonesia, 100 bn yuan
- Belarus, 20 bn yuan
- Argentina, 70 bn yuan
June - Brazil, no exact amount known
2010, June - Iceland, 3.5 bn yuan
July - Singapore, 150 bn yuan
2011, April - Uzbekistan, 0.7 bn yuan
- Mongolia, 5 bn yuan
June - Kazakstan, 70 bn yuan
November - Turkey, no exact amount known
December - Thailand, 70 bn yuan
Pakistan, 10 bn yuan
Japan, no exact amount known
2012, January - U.A.E., 35 bn yuan
Other imminent swap deals currently under discussion include Nigeria and South Africa. The number of deals are likely to accelerate. As more countries hold and accept Reminbi, the more appealing the yuan will become as the alternative to holding too many dollars and more bilateral swap agreements will result.
Even if all the swap agreements were drawn down in full, there might be as much as two trillion yuan circulating outside of China. This might be enough liquidity for the renminbi to act as a de facto global currency but not enough to replace the dollar as the hard currency.
We can sure, however, is that the dollar will cease to be the only global currency because no one will be satisfied with owning a currency that decrease in value with time. Japan has entered a currency swap deal not just with China but also with India, and Turkey with Malaysia. These are some examples how others are looking for ways of going around the dollar.
A lengthy analysis on why jobs are flowing to China based on the Apple iPhone experience appeared in the New York Times. One of the most important findings of the NYT piece was that America simply no longer has the skill sets to meet Apple’s demands for a high quality, technology product. America has lost the edge to make things.
Advanced manufacturing depends on staffing the factory floor from the production line to the line supervisors with people possessing technical skills. The training programs Obama talked about might serve as temporary Band-Aids that might keep certain production from leaving in the short term. But to maintain a world leadership position, the US will need far more technicians, engineers and scientists than the country is producing.
For many years long before the 2008 financial meltdown, the smartest and brightest of American graduates were pursuing careers on Wall Street rather than careers in science and engineering. Making financial products was easier and more lucrative than manufacturing hard goods. Value was created more rapidly and more profitably by financial manipulation than by selling hard goods.
During the height of Japan bashing in the 1980’s, the late legendary Akio Morita, CEO of Sony, said America was good at moving money from one pocket to the other but not in making anything.
For decades the majority of Americans, most of the so-called 99%, have been getting a basic education inferior to what their parents received. Although politicians readily acknowledge the importance of public education, budget allocations did not follow lip service. Classroom size got bigger and kids were taught fewer hours in a day and fewer school days in a year.
To meet the required budget cuts, schools are forced to cut out arts, music and other non-core courses and after school activities. Bare bones programs leave students uninspired as they sleep walked to graduation not much wiser than when they started. Teachers waved the students through rather than making sure that the lessons took hold.
Of course, there are pockets of exception. Perhaps 5% of the Americans can afford to subsidize their local school budget out of their pockets and help raise the quality of education for their children or send their kids to better quality private schools. But that leaves a lot of untrained minds that will not realize their full potential.
In some parts of America, pro science is regarded as anti-religion, or worse yet pro religion is ipso facto considered as antithetical to science. The local sentiment that religious concepts should be taught on same footing as science, such as creationism vs. evolutionism, would leave young minds poorly prepared for a productive adult life in a technology driven world.
Out of the forty 2012 finalists of Intel Science Talent Search, 14 have been identified as ethnic Chinese, 7 with South Asian surnames and 5 others with some other Asian surnames. For many years now, more than half of the finalists, high school students with outstanding aptitude in sciences, are first generation immigrants or sons and daughters of immigrants from Asia.
Immigrants from China, India and Russia, in particular, come from cultures with deep respect for learning and science. They have not been in America long enough for the anti-science mentality to rub off.
So long as we are not able to turn out enough science and engineering graduates of our own, then President Obama is correct when he said we need to welcome foreign students to stay after they graduate and not push them away.
But even if immigrants lead in the development of innovations, as we see in Silicon Valley, America still needs a solid pyramid base of people with skills that would turn innovations into commercial successes. President Obama spoke of keeping and building leading edge manufacturing in the US. This is not going to happen unless there is a fundamental shift in the American attitude about the importance of math and science.
Ma won by a 6% margin, less than the 17% landslide from his first election but nonetheless a surprisingly comfortable lead considering the widely anticipated wire photo finish with his opponent from the opposition party. There were no last minute shenanigan, such as an election eve assassination attempt, to interrupt the proceedings. Some observers have even gone to proclaim that Taiwan's orderly exercise in democracy should inspire their brethren on the mainland.
Actually, I think Taiwan could serve as a lesson for America. Essentially three out of four voters in Taiwan turned out to vote. In the US, one out of two would be doing good. Nearly 200,000 Taiwanese flew back from the mainland, where they were working to vote in the election. Uncounted thousands even flew from the San Francisco Bay Area to vote. Since Ma won by more than 800,000 votes, the oversea returnees can't be said to spell the difference.
But we can say, they went back to Taiwan to vote because they cared. We have not seen such voter concern and passion in the US for many elections. Just the opposite is happening. We are inundated with negative lies and deliberate distortions funded by the rich to the point that we no longer give a damn. For decades America has not been a democracy of the people but has become corrupted by highest bidders.
One of the viral email that I received gave me the idea for this blog. According to this email, Warren Buffett, in a recent interview with CNBC, offers his solution to the debt ceiling: "I could end the deficit in 5 minutes," he told CNBC. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election."
The 26th amendment (granting the right to vote for 18 year-olds) took only 3 months & 8 days to be ratified! Why? Simple! The people demanded it. That was in 1971...before computers, e-mail, cell phones, etc.
Of the 27 amendments to the Constitution, seven (7) took 1 year or less to become the law of the land...all because of public pressure. This is one idea that really should be passed around.
Let's call it the Congressional Reform Act of 2012:
1. No Tenure/No Pension. A Congressman collects a salary while in office and receives no pay when they are out of office.
2. Congress (past, present & future) participates in Social Security. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.
3. Congress can purchase their own retirement plan, just as all Americans do.
4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.
5. Congress loses their current health care system and participates in the same health care system as the American people.
6. Congress must equally abide by all laws they impose on the American people.
7. All contracts with past and present Congressmen are void effective 1/1/12. The American people did not make this contract with Congressmen. Congressmen made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.
Whether Mr. Buffett actually voiced the ideas above doesn't matter to me. The ideas stated in this email have merit in their own right irrespective of who gets credit for originating them. I have already seen an op-ed in a major daily that essentially presented the same view (without acknowledging possible role by Buffett).
We need to hold Congress accountable and if there is enough ground swell in favor of such a movement, we may then begin to institute some real change.
One of the most contentious issues bedeviling the bilateral relations has been the proper value of the Renminbi and its alleged impact on the placement of manufacturing jobs, i.e., whether jobs have fled the US because an undervalued yuan.
My chat friends have called attention to a series of articles that would shed light and dispell much of the confusion surrounding this subject.
A professor of economics from Tokyo presented a careful deconstruction of the cost of an iPhone (3G) designed in the US and made in China. The value added in China in assemblying the iPhone was $6.50 out of a total export price of $179. The difference between China's value add and the export price represents the cost of bill of material consisted of parts and components purchased from Germany, Japan, Korea and the US. In calculating the trade deficit, the entire $179 is credited to China's account and not just 3.6% of the total.
Another analysis revealed that Apple captured 58.5% of the profit from each iPhone sold while China's share of the profit was 1.8%. In other words, for every dollar China made on the iPhone, Apple made $32.50. Both authors went on to say that with more than 60% margin, Apple could afford to make a little less and have the iPhone made in the US but choose to have it assembled in China to maximize its profit.
The same case can be made about Apple's latest "insanely great" product, the iPad. China's value added is about $8 out of $499 cost of the product. Apple's share of the cost for design and marketing is about $150. Ironically because the iPad sells for a higher price inside China, Apple makes even more money for the iPad made in China and sold in China and it doesn't even show up in trade statistics--except of course for those made in America parts and components that were imported by China to put into the iPads.
Basically iPads make in China and sold in America inflates the trade deficit while iPads sold in China reduces the actual deficit by the amount of made in America parts put into the iPad. This is not a new story. When Zhu Rongji was premier and was asked about the trade deficit, he pointed out then that a pair of Nike sneakers that retail for over $100 in the US contained only a couple of dollars of value added from China.
Maybe Congress and the watchdogs of Washington can be fooled by derivatives and home mortgage swaps, but it doesn't take advanced degrees in rocket science to understand that trade deficits are greatly exaggerated. Politicians are not stupid enough to not understand, they just don't want to.