Has the Chinese century started yet?

Surprisingly quickly we have gone from looking at China as some evil purveyor of shoddy goods to the rest of the World, to anxiously regarding it as the economic saviour of the planets economies. Just a handful of years after Tiannamen Square and the global outcry as to its violent outcome, everyone is now counting on the country to save us all. How are they going to do it? By becoming history’s greatest export based economy? Because even though my economics education ended a few decades ago, I cannot help but wonder who is going to buy their stuff, when we don’t have the money to do so? In fact, all those years ago, my fellow students and I were bad mouthing another country for doing much the same thing – Japan. One of the favourite jokes going around at the time was that ‘The English may make the best lovers in the World (Well, it was our race!), but the Japanese made them better, faster, and cheaper.’

The more I think of these two nations and their economies, the more they become similar, too. Although the Japanese have a recent history of innovation and invention that appears to be missing in the Red Empire, I cannot help but think that this current Far Eastern global saviour is nothing more that the Japanese Miracle turned out to be – A bubble economy. Both inside and outside the country, the Chinese way of life is changing at almost head-spinning speed, and these changes will have an effect for all of us if we continue to spend our last few bucks on their exports.

As their economy grows, more workers are being turned from farmers to assembly line workers. As the communications revolution spreads, and cannot help but find it’s ways into the nooks and crannies of everyday Beijing life, more and more educated offspring will find out what is happening everywhere else, and demand more. There have already been protests concerning work being shipped offshore to Bangladesh, where labour is cheaper. In a world where being connected to anyone, anytime is becoming a more vital way of life, how long will it be before today’s children demand to be part of a global community, and want what everyone else has. In other words, exactly what happened to Japan: Twenty years isn’t a log time when you are looking at macro-economic trends, but that boom of the early nineties has turned into a stagnant economy for more than half of that time.

Every country prides itself on being able to honour their elderly by keeping them alive and fitter, longer. The Japanese have done this so well, that those over retirement age and collecting benefits forever are over a quarter of the country and growing. In the Western world, the aged are growing in number, and when you look at the US, combined with the loss of 8.5 million jobs over the last two years, and one in twenty residential properties being ether in foreclosure or underwater, we are close to saturation point already and the baby boom has only just started to cease sending taxes to their Government.

Is this the start to the Chinese Century? A race to the bottom of the lowest common denominator of price and value in manufacturing, and a rise in those taking from the economy instead of giving to it? Will they start to hide their money under the mattress instead of trusting banks, like we have? The danger of looking to them as an economic exporter is that we won’t be able to buy from them very soon, and they will have to make changes to their own exchange rates in order to look after their own – even as their own tax payers demand more freedoms.

South of the Border Blues

Reading about the fare loony right of the US Republican party recently, of which there is about 1,000 in the entire country, it appears, I was reminded of a conversation I had a few years back with an American citizen on a plane. During this he questioned the Canadian Health Care system, the only time he ever compared the two countries, stating that he couldn’t believe that we would pay taxes for” Someone else to use.” Being relatively new to North America at the time, and being interested enough in politics to gather a lot of US political information I thought that everyone South of the border thought this way. Today’s ‘tea-partiers’ not only reminded me of that conversation, but also of the fittingness of revolutionary dress when glaringly contrasted with a modern day US chain hotel’s surroundings – as if a time traveller has been beamed to the local Hilton. I now realise that not only is this point of view isn’t shared by everyone, but also what kind of hell we have wrought by trying to make our politics as bland as we can.

 These Republicans are, after all, only trying to regain the political ideals they always felt were there own, and health care is the touchstone in their argument. – it has always been one of the few differences between Democrats and Republicans – that is used by both parties as a barometer  of the state of the nation, an Atomic Clock pointing toward doomsday. If the two parties hadn’t tried so hard to please the middle ground voter, and compromised their more homely (read extreme) supporter, we wouldn’t be bored to tears by these guys, and their own Operatic Brunhilde, Sarah Palin, today. Remember that these guys were around during the Bush administration, getting just as much airtime as they are now.

 Amazingly to me, though, is the eye of the hurricane in the US health care debate, the illegal immigrant. I recently had the same discussion with a Canadian on this subject and the thought that there are people desperate to change everything about themselves and uproot their lives and come to a new country, just to claim welfare cash, I find ridiculous. The true case here, is why are illegal immigrants employed, because if they weren’t, they wouldn’t come. Why are there jobs for them that people, living here just won’t so? Why do these jobs still exist? Remember if you are paying an illegal immigrant, you are part of the problem, as the Tea Partier’s say. What is the real cost, if you don’t concentrate on anchor babies? According to the Kennedy School of the Government Council on Foreign Relations, here’s the skinny as of January 2009:

If all working illegals were gone from the US, the economy would lose $1.8 Trillion.

Average working weekly pay would rise by $25 for high school drop outs.

Average annual working incomes as a result of immigration would drop by $1,200.

The US GDP would drop by 0,07%.

There, now. That wasn’t that tough, was it? Now all we have to deal with is the fact that the rest of the World have realised that mass immigration is a reality, and the US cannot go it alone on this issue and, of course, the big question: Why do these musket wielding, tri-corn wearing boobs get as much TV face time as they do?

Canaries in the mine?

It is time to get all of my receipts together for tax time. Yes, it is the first week of February, and yes, I am that anal. Digging behind my drawers looking for the T4 from the third of four companies I worked for last year, I came across some forgotten press items that I had kept from May 2008 and exactly one year later. It’s amazing what you can learn from donning those hindsight glasses:

May 2008 – “Real GDP figures in the US understate the pain that home owners are feeling from a collapsing housing market. Their net worth is deteriorating and unemployment is climbing. Strong exports are masking the their domestic weakness. GDP aside: “ Basically every indicator you can hake a stick at is screaming recession”

This was closely followed by: “ Eastman Kodak Co. said yesterday that it was raising prices by an average of 20% because of soaring prices of energy and raw materials.” Wow, did you really think that this was the best time to do it? On the other hand:

“In Stockton, California ..three out of four homes for sale are in or on the path to foreclosure” Hmm…Did Eastman Kodak know that?. Chief Executive of Lowe’s Co’s Inc., yesterday said population growth and the aging of America’s more than 130 million existing homes provides a favourable long-term outlook for the home improvement industry.”. Especially when it’s in foreclosure, and you have taken your parents in, in the spare bedroom.

From 2009, one year later to the month, a stock broker mused: What if the Fed’s safety net is about to be pulled like a rug from under the economy, because the Fed wants to be sure that (stock) traders start   minding their risks? What happens to stock manipulation, Speculation, and downright investment start to pull back? Who’s going to kick start the economy, then? So not only is a Socialist style capitalist rescue OK, but there may be a wrong time to put Capitalism into first gear! Amazing. Oh, and look…

“U.S Home sales continue freefall”. Isn’t this what was forecast a year ago, when homeowners were spending all of their spare cash at Lowe’s and deciding whether to put Mom into a care home to rent out the spare room in order to afford the mortgage?

And, finally – Banking: “ING Direct has made massive inroads into the domestic banking market by nor offering branches, and running with less than 1,000 employees world wide – many of them in low paying, entry positions. A the end of March 2009, it had $23.6 Billion in assets, up from $2.8 billion eight years earlier.”

No more homes, existing homes worth less, everyone spending their spar time making improvements to their own houses, because there is nothing to move up to, Kodak going bust because it thought that people would spend more for an ageing technology, and all of our banking secrets have to be talked about over the phone to someone in Pakistan, because your high street bank is run by the same guys that tax you. This is the future, people. Look at these headlines NOW , not one or two years in arrears, and do your taxes in February, before they run out of money before paying you, your refund.

Today, I read that China’s Economy is a Bubble! Oh, Sh*t!

Haiti: THIS is what we can do

The frightening images from Haiti over the last 36 hours may appear to be just the latest in a never ending episodes of Mother Nature’s Revenge against a species that has pushed it’s luck once too often. As a firm believer in my species’ part in recent and rapidly expanding climate change problems, I, too, am as likely as the next person to simply take in this information, throw up may hands, and thank God that it wasn’t me, this time. This time, however, may prove to be a turning point, thanks to the area that has been devastated: A turning point in the way that Human’s can change an area for the positive.

In past disaster’s, the emphasis has been on Government’s getting face time on TV to pledge support, the rapid deployment of initial emergency response to immediately save lives, and then the almost expected negative press some months later on promises being reneged on, and people still starving when the mighty battleships go home. Can we ‘turn the tide’ this time? Thanks to Haiti’s geography (I.e. In the West), can we do something long term in this instance to raise the future as well as the immediate present of this financial basket case?

In these situations, the first item to be addressed has to be the immediate. Already, only 36 hours after the earthquake hit, emergency response is on the way from the U.S, Canada, and the U.N. The immediate concern is for those that are saveable, the badly injured, and the young that will have the chance to be nursed back to health. Then comes the care of those not as badly hit, and those that made it through and are able to assist in the recovery. A few years ago, in the Thai Tsunami, the vast majority of aid ended here, because (let’s be honest), it’s Asia, so outside of those minority pockets of Asians in our community, who cared? But here is an area on our doorstep. Although the Haitian ex-pats in the West may be small in number, this toilet of a place has lasted in their current position of corrupt government, and lawless neighbourhoods for decades, and we all felt that we couldn’t do anything about that, because it is Sovereign Territory. Their lives may be screwed, but a sit is their land, we cannot do anything about it. Well President ‘DubYa’ changes the rules in Iraq, so let’s do it again. We can force a better life onto a people, apparently, for whatever reason we think fit, and the thousands of impoverished and ill Haitians reaching North American shores for asylum in the near future has to be looked upon as a threat to our social security welfare. Let’s change it.

Yes, the short-term targets remain the same, but let’s stay and get some long term goals met, too. Lets move the capital to the other side of the bay more than 15 Kilometres from the epicentre of this earthquake. Let’s build structures that can withstand the next one (when was the last one?). Let’s put people to work using their own talents to show them that a life can be lived just as fully and rewarding on their own island. Let’s re-vamp the electoral system, after all there isn’t one to speak of at the moment, and hasn’t been for years. The online community has proved that they can receive and send messages even though there isn’t an infrastructure left, so let’s begin industries aimed at making this Island paradise – and it could be – into a member of the global networked community, and make oit pay for the populace. Let’s take the dead, incinerate them all, build a monument to them and get in with a new and better life. One that allows these people to realise their own destinies, and stop them trying to be part of a Ice Hockey playing nation’s.

Looked at in this way, this disaster could be a golden opportunity to rebuild an entire country: One that is on our doorstep and deserves more from the ultra-rich than the lip service it has received for the past half century or so. Or – put another way – let’s do the right thing for a change.