I’m here to tell you that America plunged its fingertips into the Middle Kingdom’s body politic across the 1970s, beginning with Nixon going to China in 1972 and culminating with Jimmy Carter’s normalization of relations in 1979. The first embrace allowed aged Mao Tse-tung to extinguish his nonstop internal purge known as the Cultural Revolution by firewalling his fears of Soviet antagonism. The second cemented China’s wary-but-increasingly-warm relationship with the United States and allowed Deng Xiaoping, who narrowly survived Mao’s insanities, to dismantle the dead emperor’s dysfunctional socialist model, quietly burying Marx with the most revolutionary of eulogies — to get rich is glorious!
Deng chose wisely: Reversing Mikhail Gorbachev’s subsequent logic, he focused on the economics while putting off the politics. This decision later earned him the sobriquet “the butcher of Tiananmen” when, in 1989, the political expectations of students quickly outpaced the Party’s willingness for self-examination. But it likewise locked China onto a historical pathway from which it cannot escape, or what I call the five D’s of the dragon’s decline from world-beater to world-benefactor: demographics, decrepitude, dependency, defensiveness, and — most disabling of all — democratization.
Let us begin this journey right where Deng did, with a focus on the family.
Category: Politics
Goldman’s pieties go too far
For sheer, toe-curling embarrassment, it’s hard to choose between last year’s populist attack on Goldman Sachs by the US Securities and Exchange Commission and this week’s cringe-worthy response from the investment bank.
Last April, when the SEC filed suit against Goldman, the bank could have fought back. The suit complained it had sold fancy mortgage securities without disclosing that a hedge-fund manager, John Paulson, was betting that those same securities would blow up. To which Goldman could have answered: so what? Any time an investment bank sells any derivative, it should be obvious to the buyer that somebody somewhere must be taking the other side. The SEC’s assertion that Goldman had misled customers about the nature of Paulson’s involvement was potentially more damaging, except that the SEC produced no evidence to make this charge stick.
It was surely not beyond the wit of Goldman’s publicists to communicate these simple points. Banks cannot be held responsible for the profits or losses of their clients, since middle-men necessarily have customers who lose as others win. But after one vain attempt to explain market making at a belligerent Senate hearing, Goldman’s boss, Lloyd Blankfein, gave up. He settled with the SEC, even though most lawyers think he could have beaten the charges. Then he ordered up an elaborate cleansing ritual to relaunch the firm of Goldman Sachs.
Several months later, the fruits of Goldman’s sun salutations are out. A 67-page manifesto of self-purification proclaims that “our clients’ interests always come first,” and that “if we serve our clients, our own success will follow.” But these pieties misrepresent the true nature of an investment bank just as surely as the SEC did.
Study: We’ve Got Plenty of Land for Biofuels
One of the great arguments against biofuels is the wisdom, if not the morality, of using land to produce fuel instead of food. But research out of Illinois suggests it doesn’t have to be an either-or proposition.
Researchers at University of Illinois Urbana-Champaign have found that biofuel crops cultivated on land unsuitable for food crops could produce as much as half the world’s current fuel consumption without adverse impact on food crops or pastureland.
The study, published in Environmental Science and Technology, identifies land around the world that is unsuitable for food production but could be used to raise biofuel feedstocks like switchgrass.
According to the researchers, many studies examining biofuel crop viability focus on yield — how productive the crop can be. They wanted to examine land availability to determine whether it is possible to produce sufficient biofuel to meet demand without sacrificing food production.
Politics & The Internet
FOR wizened cyberpunks, it is a seemingly timeless debate: does the internet inherently promote openness and democracy, or can it just as easily strengthen the hand of authoritarian regimes? A decade ago Andrew Shapiro’s book “The Control Revolution” argued the former, while Shanthi Kalathil’s and Taylor Boas’s tome “Open Networks, Closed Regimes” dissented. This week sees the publication of “The Net Delusion: The Dark Side of Internet Freedom” by Evgeny Morozov, which sides with the pessimists.
The argument usually ends in a stalemate of competing anecdotes. Street protests organised by mobile text messages successfully oust Philippine President Joseph Estrada in 2001; Iran’s supposedly Twitter-powered Green Movement gets quashed in 2009. And so on. Clay Shirky, one of the preeminent public intellectuals of the internet, who has previously sided with cyber-utopian optimists, has now elegantly squared the circle by establishing an intellectual framework to consider the topic in “The Political Power of Social Media”, an article in the current Foreign Affairs. (Users must register to access the complete essay, but it is free.) Mr Shirky’s essay makes three principal contributions to the debate.
Lessons in Scroogenomics
Ebenezer Scrooge came into the room slowly. He was, to my surprise, much as Charles Dickens had described him. How, I wondered, could he have changed so little over 170 years? It must be the benefit of being a literary character, I decided.
“Good morning, Mr Scrooge,” I remarked politely. “I have come to interview you about your best-selling new book Scroogenomics – or How to Do Well out of Doing Good.”
Scrooge smiled. “Yes,” he responded, “I had to show that Joel Waldfogel’s Scroogenomics, cleverly reviewed by your John Kay, merely portrayed my unenlightened self. But Dickens, albeit a talented writer, was just a sentimental fool. He never understood what my change over that Christmas was about. I learnt, above all, to appear benevolent. That, with my business acumen, turned Marley & Scrooge into a global enterprise. Fortunately, that philanthropy has become less painful, since my charities are tax deductible. What can be less painful for a miser than state-subsidised charity?”
I was shocked by his candour. He must have drunk too much at the book party earlier. After the abstinence described by Dickens, one drink would have a big effect.
On Net Nuetrality
To whom it may concern:
I have always loved humor and laughter. As a young engineer I got an impulse to start a Dial-a-Joke in the San Jose/San Francisco area. I was aware of such humor services in other countries, such as Australia. This idea came from my belief in laughter. I could scarcely believe that I was the first person to create such a simple service in my region. Why was I the first? This was 1972 and it was illegal in the U.S. to use your own telephone. It was illegal in the U.S. to use your own answering machine. Hence it also virtually impossible to buy or own such devices. We had a monopoly phone system in our country then.
The major expense for a young engineer is the rent of an apartment. The only answering machine I could legally use, by leasing (not purchasing) it from our phone company, the Codaphone 700, was designed for businesses like theaters. It was out of the price range of creative individuals wanting to try something new like dial-a-joke. This machine leased for more than a typical car payment each month. Despite my great passion and success with Dial-a-Joke, I could not afford it and eventually had to stop after a couple of years. By then, a San Francisco radio station had also started such a service. I believe that my Dial-a-Joke was the most called single line (no extensions) number in the country at that time due to the shortness of my jokes and the high popularity of the service.
2011: And Still No Energy Policy
“First generation [corn] ethanol I think was a mistake. The energy conversion ratios are at best very small.”
– Al Gore, speaking at a Green Energy Conference on November 22, 2010
“Ethanol is not an ideal transportation fuel. The future of transportation fuels shouldn’t involve ethanol.”
– Secretary of Energy Steven Chu, November 29, 2010
No one knows what brought on the blast of political honesty in the last eight days of November. Having been a rabid ethanol booster for most of his political career, there was former Vice President Al Gore reversing course and apologizing for supporting ethanol. Of course Gore’s reason for taking that position was perfectly understandable — for a politician. As he told the Athens energy conference attendees, “One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers of Iowa because I was about to run for President.”
Translated from politics-speak into English, pandering to farmers gets votes. But if your claimed position is to plan some sort of energy policy for everyone else, then getting farmers’ votes shouldn’t determine what’s the right thing to do for the nation’s fuel supplies.
Regulators Look at Farming Landscape
Food prices are back on the march, and the powerful U.S. farm lobby faces a day of reckoning on Wednesday as the Obama administration wraps up a yearlong study into competition and consolidation in the agricultural sector.
The Departments of Justice and Agriculture are holding their fifth and final workshop to review the competitive landscape in food production and livestock rearing after a unique collaboration that has left some of the industry’s largest players looking nervously over their shoulders.
Monsanto Co. is already embroiled in a Justice Department investigation into alleged anticompetitive practices linked to the sale and distribution of genetically modified seeds that dominate U.S. farming. Dean Foods Inc., the country’s largest milk producer, has also seen antitrust officials move to block a small acquisition.
Lawmakers already have had to wrestle with external forces on the sector, such as the rise of speculative funds that critics contend have inflated prices. The latest run-up in commodity prices has also reawakened the long-running food-versus-fuel debate as Congress decides whether to renew subsidies to the ethanol industry.
Some Data-Miners Ready to Reveal What They Know
Seeking to head off escalating scrutiny over Internet privacy, a group of online tracking rivals are building a service that lets consumers see what information those companies know about them.
The project is the first of its kind in the fast-growing business of tracking Internet users and selling personal details about their lives. Called the Open Data Partnership, it will allow consumers to edit the interests, demographics and other profile information collected about them. It also will allow people to choose to not be tracked at all.
When the service launches in January, users will be able to see information about them from eight data and tracking firms, including BlueKai Inc., Lotame Solutions Inc. and eXelate Inc.
Additional tracking firms are expected to join once the system is live, but more than a hundred tracking firms and big Internet companies including Google Inc. and Yahoo Inc. are not involved.
Wall Street owes its survival to the Fed
For a brief, surreal moment, the prevailing narrative in Washington was that the 2008-09 bail-outs were not really so bad. In September, Treasury secretary Tim Geithner called the government’s troubled asset relief programme “one of the most effective emergency programmes in financial history”, claiming that the final cost to taxpayers would be less than $50bn.
Steven Rattner, the Wall Street banker who oversaw the Obama administration’s rescue of the auto sector, wrote in the Financial Times in October that “without exaggeration, this legislation [establishing Tarp] did more to keep America’s financial system – and therefore its economy – functioning than any passed since the 1930s”.
But Wednesday’s document dump from the Federal Reserve – a congressionally ordered “WikiLeak moment” – puts this bargain-bail-out patter in a new perspective. The post-Lehman rescues were far broader than Tarp, and far riskier for taxpayers, even if the alternative of a systemic meltdown would have been worse.