Harvard, A Pen Portrait. Part One: The Students

Harvard students are overachieving, intelligent, and supremely confident. I always thought that Georgetown students had a “spark” or "buzz" of energy around them, but they pale in comparison with the folks from Harvard.

If there one thing you learn in your first few days here, it is this: Harvard Is Elitist. There is no other way to put it. At the welcoming ceremony for new graduate students, the president of the university told us, "You are all here for a reason. We want you to be here. You are the best in the world"; not in those exact words, but with that exact striking bluntness. While speaking with my academic adviser about my future plans, including careers (as I don't think I want to jump into a PhD immediately) he said in a throwaway manner, "You know, for any big prestigious company, just being in Harvard is enough. Harvard is the Gatekeeper, the standard." This attitude still somewhat stuns me (and to be frank I'm still not very comfortable with it), but it permeates all levels of Harvard society, from the professors down to the undergrads.

Language classes, given their natural leanings towards open discussion, are a good way of taking the pulse of an institution. I am studying advanced Chinese here, and in class I hear students say things like "People from other schools have to worry about finding jobs, but not us!" and "Harvard teaches us critical thinking skills that other places don't!" My teacher once said "有一流的大学，可是哈佛可以算是超一流的大学！”; the scary thing was, everyone nodded in agreement.

Given that Harvard students truly believe that they are Number One, they do not show school spirit; you know you are the best, so why bother shout about it? Why bother letting the riff-raff know? Georgetown people were very upfront about proclaiming their pride in their school. I always felt that Georgetown had a certain sense of insecurity around it. Although my former undergraduate institution is indeed a highly prestigious school, Georgetown students usually carry with them the knowledge that they are not in the Ivy League, hence their need to “overcompensate”. Harvard students, on the other hand, are so confident in their knowledge that they are the best (or that the rest of the country considers them to be the best), that they don't feel the need to advertise their love for their school.

As a Master's student, I am in the unique position of floating somewhere between the PhDs and the undergrads. I get the best of both worlds; I can observe both the maturity, passion and professionalism of the PhD students (who, although they do not have the hyperactivity of the undergrads, are a highly formidable bunch in their own right) as well as the boundless energy and ambition of the undergrads. Harvard's admissions committee is excellent at parsing talent (and are probably no mental lightweights themselves), as all the students I have met here are absolutely top-notch. (Unfortunately, I do not have any interaction with the Law School and Business School students, as they live in worlds completely separate from the School of Arts and Sciences, which I am affiliated with.)

The undergrads, with their irrepressible energy and hyperactive personalities, are truly the stars of the university. They are extreme overachievers, juggling fifteen or more different things at the same time and subsisting on four hours of sleep a night. They talk as if they have so much going through their minds that they cannot wait to get it all out, and they talk really fast; relaxation does not come easily to them.

To succeed as a Harvard undergraduate, you obviously need good grades. However, this is merely the minimum requirement. At Harvard, you are judged not merely by your academic ability, but by your other activities as well. A successful undergraduate will have straight As in all her classes, but will also be the president/founder of an NGO helping poor children in Columbia and have string of prestigious internships lined up at various financial firms. However, you also need a passion of some sort. It does not matter what it is; it can be rowing, fencing, Chinese politics, Bolivian cuisine, or preserving forests in the wastelands of Siberia. Furthermore, you must follow through on your passion. Given all this, one wonders how these people find time to eat and sleep. The pressure comes not from the classes or the professors, but rather from each other.

There is a strong calendar culture here; Harvard students schedule everything going on in their lives. If you want to arrange lunch with an undergraduate, you literally need to make an appointment and hope that they can find time in their lives to fit you in (I can personally attest to having experienced this). I have had the misfortune of peeking at some of their calendars and they are overflowing with meetings, conferences, club activities and sports events. Oh, and classes too.

(The big exception to the “intense overachiever” rule is if an undergrad manages to join a “Finals Club”. These clubs are gatherings of the sons and daughters of the rich and powerful, and their friends whom they induct into their group. They party all night (and day) and never do any work, but given their connections can land any job in the world. They all become millionaires by the age of thirty; it is rumored that if you aren’t rich by then, the club will give you a million dollars so as to maintain the position of being a rich man’s clique).

This is not to speak lowly of Harvard's graduate students; they are smart and highly dedicated, as well as passionate about what they are studying. They are much more relaxed in comparison to the undergraduates, and seem to have “normal” energy levels. Nonetheless, they carry with them the Harvard traits of supreme passion for their chosen fields as well as a strong sense of confidence. They will become the world’s academic and scientific superstars.

I have also observed that the graduate student body is much more international than the undergraduate one, which is mostly American. There is a large proportion of Chinese graduate students, especially in the sciences and East Asian Studies. This clearly demonstrates one of the main strengths of America; many of these grad students will choose to settle and raise their children here, thus contributing further to the melting pot that is the United States. America’s ability to draw the best from all around the world will help fuel its status as a dominant power for years to come, and institutions like Harvard play a huge role in this.

So, these are Harvard students. One day, they will rule our world. (And be our bosses). Most days, I go about my daily business without thinking about it, but sometimes, when walking through Harvard Yard, I take the time to look at the students passing by. I then ask myself, “How many Bill Gates’s, Mark Zuckerbergs, Barack Obamas, Natalie Portmans and Yo Yo Ma’s are here with me right now?”

The thought still scares me, which is why I try not to think about it too much.

Abraham Lincoln's Path to History

[24/3 - Partly revised.]

I just came back from my daughter's class field trip to the New York Historical Society where they viewed an exhibition of Abraham Lincoln. That exhibition has been going on for a year since it opened on Mr Lincoln's 200th birthday and examines his Presidency's relationship to New York City.

I did not finish seeing the exhibit and for sure I cannot be mistaken for a scholar of Lincoln. But the exhibition made an impression on me because it reminded me that greatness is a difficult and arduous journey that feels anything but great when traveling on it.

What I learn from the exhibit is that Lincoln was given a political boost and became a political star due to the promotion of certain New York political barons of the (then nascent and comparatively social-progressive) Republican Party who wanted their own non-establishment candidate to challenge the establishment favorite William Seward. They wanted a Westerner candidate for the presidential election of 1860 to propel them out of their narrow political base; some one who would speak credibly about expansion to the West (free land, free labor, free men), lavish protection on industry (tariffs, railways, ports and canals etc.), anti-unions and be mildly anti-slavery. Lincoln proceeded to gave a famous and widely promoted speech at the Cooper Union in New York setting out his vision; which on slavery was actually a compromise whereby the South can keep their slaves but new territories would henceforth be free of slaves. He was not an abolitionist but was only against the expansion of slavery.

Aided by his powerful patrons, Lincoln soon gathered the support of many political forces that were against the Democratic Party: populists (who are anti-business), abolitionists (who are anti-slavery) but also neo-Fascist movements such as the "Wide Awakes" and the Nativist/xenophobic "Know Nothing Party".

The big businesses in New York favored the Democratic Party which was the establishment party; and businesses are wary of the abolitionist movement because they fear any rupture (or worse, war) with the south would mean disruption of business, loss of access to raw material supplies to the mills in the North and markets in the South.

Lincoln won the Presidency with only 40% of the popular votes. But wary of Lincoln's views on slavery, 7 Southern states seceded from the Union even before he took office. His popularity fell even further especially in the major cities of the Northeast.

But when Fort Sumner was attacked, patriotic fervor caused the North to rally around him; but within a year and many battlefield defeats (and war supplies corruption and mounting government indebtedness) later Lincoln found himself deeply unpopular. The newspapers and public opinion were deeply scathing. To raise money for the war effort, Lincoln instituted the income tax and a federal backed US dollar amidst widespread opposition. He strong-armed and wrestled many powers such as the raising and provisioning of armies from the States and into Federal control. His opponents were decrying the end of the United States and against him for trampling on the Constitution. There was huge outcry that he was resorting to dictatorial means. To put down dissent, he imposed martial law allowing detention by military tribunals without trial, which incarcerated 10-15000 people! Amidst all these, he suffered huge electoral losses during elections which resulted in openly antagonistic state governments /governors who were out to thwart him at every turn.

In a bid to recalibrate the reasons for fighting, which initially was about the preservation of the Union, and to get more Union recruits Abraham Lincoln issued the initial Emancipation Proclamation as a military order in his capacity as Commander-in-Chief. It was quite limited in scope at first being limited only to the Confederated States (but preserves slavery in some border states such as Delaware and Maryland) and primarily serve to pressurize the South. Later, it was extended to all lands seized by the Union army hence making abolition a Union war objective. He was also hoping to encourage slave revolts and gather freed slaves into the Union Army.

Granted, there were pragmatic reasons and risks if he were not more gradualist in abolishing slavery. Lincoln was concerned that outright abolition might tilt Northern slave states into joining the Confederacy. Maryland in particular was a concern because it was the crucial link between Washington DC and the North. Lincoln's abolitionist stand became more and more resolute after the Emancipation Proclaimation and in the end, became a non-negotiable term for ending the war.

As a military order, it did not have the force of law that an Act of congress would have. Belatedly, as the tide turned in the Civil War, Lincoln got Congress to entrench it as the XIII amendment to the Constitution, which was not ratified until after Lincoln's death when it was ratified by 2/3 of the states. Mississippi did not ratify that amendment until 1995.

If judged by popularity alone, it would be hard to make any assessment of Lincoln's greatness during his lifetime. For most of 1864 prior to his re-election, he did not think he was going to be re-elected. In fact, only when the tide of war turned in September 1864, two months before the election, before his victory became possible. Nonetheless, despite having only the Northern states participating in the election he was re-elected in 1864 with a respectable but far from heroic 54% of the vote. He would likely have lost the election had the Southern states participated. Especially in the South and amongst those opposed to the ascendancy of Federal government vis-a-vis the rights of the states Lincoln remained a much hated figure even after his death.

It an interesting and telling perspective on how a person is being judged by one's contemporaries as opposed to posterity.

"We are not bound to win, but we are bound to be true"

Last Saturday, President Obama gave Democrat congressmen a pep talk prior to eventually passing health care reform which happened late last night, in a historic and landmark achievement. It takes spending a few years in the US (and a few years living outside) to realise how ridiculously dysfunctional the US health system is. It spends 2x more per capita than other developed countries and yet leave 15% of its population to fend on their own uninsured; and as much more under-insured meaning they go broke if they fall sick. Meanwhile the costs are so out of control that it saps the competitiveness of US economy, cause real wages to be stagnant since the 1990s and costs the Federal Government 33% of its budget (rising to 50% at current rate in 2020).

There will be many things to be said for the President, but I came across this excerpt from the off-the cuff talk he gave last Saturday, which I feel has value in posterity for anyone in politics or in public service. When I first read it, I breathe hard and read it again. I thought of all the people in politics and in public life. And it convinced me that in the President we have a good man who deserve support and success.

(approximately 22 mins into a 30 mins pep talk - or 2 mins into this clip: http://swampland.blogs.time.com/2010/03/20/without-a-teleprompter/#more-23761

".......I know what it's like to take a tough vote. But what did Lincoln say? “I am not bound to win, but I am bound to be true.” Two generations ago, folks who were sitting in your position, they made a decision -- we are going to make sure that seniors and the poor have health care coverage that they can count on. And they did the right thing.

And I'm sure at the time they were making that vote, they weren't sure how the politics were either, any more than the people who made the decision to make sure that Social Security was in place knew how the politics would play out, or folks who passed the civil rights acts knew how the politics were going to play out. They were not bound to win, but they were bound to be true.

And now we've got middle class Americans, don't have Medicare, don't have Medicaid, watching the employer-based system fray along the edges or being caught in terrible situations. And the question is, are we going to be true to them?

Sometimes I think about how I got involved in politics. I didn't think of myself as a potential politician when I get out of college. I went to work in neighborhoods, working with Catholic churches in poor neighborhoods in Chicago, trying to figure out how people could get a little bit of help. And I was skeptical about politics and politicians, just like a lot of Americans are skeptical about politics and politicians are right now. Because my working assumption was when push comes to shove, all too often folks in elected office, they're looking for themselves and not looking out for the folks who put them there; that there are too many compromises; that the special interests have too much power; they just got too much clout; there's too much big money washing around.

And I decided finally to get involved because I realized if I wasn't willing to step up and be true to the things I believe in, then the system wouldn't change. Every single one of you had that same kind of moment at the beginning of your careers. Maybe it was just listening to stories in your neighborhood about what was happening to people who'd been laid off of work. Maybe it was your own family experience, somebody got sick and didn't have health care and you said something should change.

Something inspired you to get involved, and something inspired you to be a Democrat instead of running as a Republican. Because somewhere deep in your heart you said to yourself, I believe in an America in which we don't just look out for ourselves, that we don't just tell people you're on your own, that we are proud of our individualism, we are proud of our liberty, but we also have a sense of neighborliness and a sense of community -- (applause) -- and we are willing to look out for one another and help people who are vulnerable and help people who are down on their luck and give them a pathway to success and give them a ladder into the middle class. That's why you decided to run. (Applause.)

And now a lot of us have been here a while and everybody here has taken their lumps and their bruises. And it turns out people have had to make compromises, and you've been away from families for a long time and you've missed special events for your kids sometimes. And maybe there have been times where you asked yourself, why did I ever get involved in politics in the first place? And maybe things can't change after all. And when you do something courageous, it turns out sometimes you may be attacked. And sometimes the very people you thought you were trying to help may be angry at you and shout at you. And you say to yourself, maybe that thing that I started with has been lost.

But you know what? Every once in a while, every once in a while a moment comes where you have a chance to vindicate all those best hopes that you had about yourself, about this country, where you have a chance to make good on those promises that you made in all those town meetings and all those constituency breakfasts and all that traveling through the district, all those people who you looked in the eye and you said, you know what, you're right, the system is not working for you and I'm going to make it a little bit better.

And this is one of those moments. This is one of those times where you can honestly say to yourself, doggone it, this is exactly why I came here. This is why I got into politics. This is why I got into public service. This is why I've made those sacrifices. Because I believe so deeply in this country and I believe so deeply in this democracy and I'm willing to stand up even when it's hard, even when it's tough.

Every single one of you have made that promise not just to your constituents but to yourself. And this is the time to make true on that promise. We are not bound to win, but we are bound to be true. We are not bound to succeed, but we are bound to let whatever light we have shine. We have been debating health care for decades. It has now been debated for a year. It is in your hands. It is time to pass health care reform for America, and I am confident that you are going to do it tomorrow. Thank you very much, House of Representatives. Let's get this done. (Applause.) "

Power Influence in Southeast Asia - Comments from Anonymous

Anonymous said...

The question is always relative power vs absolute power. I think in terms of absolute power US influence is unquestionable. They have their navies, their internet, their Americana of American Idol, Glee & Lady Gaga. Heck even Yao Ming and Jackie Chan know where the center of the world lies.

Yet there is no doubt that the gap is getting closer and relatively it looks like China is on the move. It doesn't help that we tend to look at these things thru the stars & stripes tinted glasses of CNN, NBC etc and despite their protestations media neutrality, cultural bias is something that will always be difficult to remove.

Yet while US definitely has a head start, China has a natural advantage. Tell me an East Asian/South East Asian country that has not been touched by Chinese culture throughout its history and I'd probably tell you East Timor and Papua New Guinea doesn't really count. China is good at coddling South East Asian countries because it is an Asian country and it instinctively understands how Asians like doing things.

Not to say China does not have disputes with its neighbors. Japan, Vietnam & India come immediately to mind. However, China's rise coincides with Asia's rise, and are inseparable.On the other hand, one could argue that increasing Chinese influence in South East Asia merely reflects a return to normal status of the last 1500 years. Colonization & Pax Americana are a blip in history and it not a matter of If but When that South East Asia returns to the motherland.

Or as Deng Xiaoping has been know to say... "its too early to tell"...

Wednesday, March 17, 2010

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KH says:

Thanks for your comment "anonymous"! I applaud - and readily concede - your two excellent points on China's natural geograohical advantage and by taking the historical perspective.

My initial posting was a snapshot arguing that reports of the demise of America's influence in Southeast Asia is greatly exagerated. It does not pre-suppose that the same would be same for the future. Indeed, my closing argument was that unless we have some form of emperical measurement it would be difficult to discern the changes taking place.

In fact, when we look from the structural or historical perspective, China has an enormous built-in advantage. In terms of geographical location, there is no way Southeast Asia can ignore China. Evan at its weakest during the late Ching and early Republican era, China managed to profoundly shape Southeast Asia through migration. America can, if it chooses to, disappear from the region, but China? Never. China's proximity is an enormous source of power and influence. But one can also say that is a constant and that is supported by history. If anything, advances in technology can only strengthen China's position.

Another aspect which I neglected to elaborate on is the role of ethnic Chinese in Southeast Asia. Unlike first generation Chinese migrants, the question of identity for their ethnic Chinese population is now unambiguously localised. However, their cultural heritage and linguistic links makes it easy to "germinate" strong social-civic-intellectual connection with China.

My hypothesis is premised on the orientation amongst the country's elite. It may be no accident that the business elites (many of whom ethic Chinese) are more strongly drawn to China or more specifically to the economic opportunity in China's resurgence. But other than Singapore, Southeast Asia's political or military elite are rarely of Chinese ethnicity and hence less attuned to China. Nonetheless, as we saw with Hong Kong and Macau, when a society decides to reorientate itself to a different bearing things can change very quickly.

Which bring me to the question of what are the common interests for America to sustain its power and influence in Southeast Asia? And I could see none that is compelling. As powerful and influential as the US may be in Southeast Asia, America's power and influence has largely been by choice and not inevitable as in the case of China. With the end of the Cold War, America finds it difficult to justify the political and military investment that is needed to remain a power in the region. For years, the US also saw itself as the vanguard and defender of the global economic system of (open and capitalist) trade and commerce. However, that system is also becoming less American/Western centric as Southeast Asia, India, China and Brazil etc becomes bigger players in the global economic and commercial system.

Power Influence in Southeast Asia - China on the Rise and America on the Wane?

Let me shake off my long stupor of not posting since February by elaborating on a discussion I had with my cousin-nephew who is presently studying international relations (plus Chinese and Arabic languages) at Georgetown University in Washington DC.

My contention is a contrarian argument to the prevailing view that China is on the rise and America is on the wane in Southeast Asia. This argument often confuses China's enormous trade links, free-trade agreements and high-level political exchanges with Southeast Asia for power and influence. My argument is that the view is impressionistic and is not entirely supported by a rigorous and sober examination of many other key matrices for power and influence. My hypothesis is that while America power and influence is no longer dominant in Southeast Asia, it is still probably the strongest power in a region where China's power and influence has expanded enormously.

My model for understanding power and influence rests on examining 4 different facets of power and influence, and in each case focus on aspects that are largely measurable as opposed to a lesser reliance on subjective considerations such as "soft power".

My 4 facets - and they are not intended to be equally important at all times - are: economic, political, strategic/military and social-civic links.

China has enormous heft as Southeast Asia's largest (and fast-growing) trading partner, well-spring of funding, bilateral and regional economic cooperation and growing institutionalised relationships (FTAs etc.).

But economic links are not limited to trade. At the very least we should also look at investments (both inwards and outwards), monetary policy and commercial links. In Southeast Asia, the amount of cumulative investments by USA, Japan and Europe remains enormous, and in most countries far dwarfs China's nascent investments. Japan has been Southeast Asia's largest investor for many decades and those Japanese companies remain major employers and exporters in many Southeast Asian countries. How easily people forget but they are a hidden giant that should not be overlooked. So size of investment is one key measure.

As far as commercial links, precisely because so many US and European MNCs have operated so long in Southeast Asia they have become "invisible". People forget that AIA, Citibank, Facebook, Visa card, P&G (Pampers, Pantene, Duracell, Gilette etc.), Colgate Palmolive, Esso, Yahoo!, FedEx, Boeing are American companies; while Shell, HSBC, BP, Prudential, Nestle are European. Of course, the lines are often blurred because such is globalization that Nike may be American but the product is often made in China by a Korean invested firm financed by the Japanese. But all else being equal, China still has some distance to go in terms of commercial influence. After all, what is the largest Chinese company operating in Southeast Asia?

All those are in the realms of influence, but none more than monetary policy. There are many Southeast Asian currencies that are either pegged or linked to the US Dollar and for that reason their central banks keep large portions of their hard currency reserves in US Dollar. The power to influence so many Southeast Asian currency gives the US Federal Reserves significant leverage over the monetary policies in Southeast Asia - such as interest rates - that the People's Bank of China will not have until the RMB becomes a full fledged international reserve currency. Even as China becomes an enormous trading power with Southeast Asia, the terms of trade are still mostly done on US Dollar terms. These are all important measures on the economic power and influence.

Another important measure is foreign reserves/foreign investments, which for Southeast Asian countries are still mainly held in American or European assets. And the same can be said for holdings of Southeast Asian debt, which if in foreign hands are still predominantly held by Western institutions and funds; although given the growth of China's investment funds this could soon change. This is a source of influence (verging on power) that is easily overlooked but in times of crisis, holders of debt provides enormous leverage over the governments of the day (e.g., currently in Greece, but seen recently with Dubai, Iceland, Estonia, or Latin American countries from time to time). In times of conflict and international sanctions, there have been precedence of foreign assets being seized e.g. Iran, Iraq (after invasion of Kuwait), North Korea and Yugoslavia (sanctions).

Moving on to political links. For Southeast Asian countries China presents a seemingly simple political equation: unquestionable support for China's policies on Taiwan/Tibet/Xinjiang etc., no overt critisism of China , and in return China will grant a lot of personal respect, not pose any awkward questions on one's own political legitimacy or messing about with the opposition party, etc. And then, everyone can get down to business of economic growth. that is easy to like. America has tended to present a less diffident, more self-interested and incoherent relationship even as the host nation feels ignored.

At the senior leadership level, China pays a lot of attention with frequent exchange of visits with regional heads of states and government. Likewise there are extensive links at the ministerial and official level as befitting a major (even dominant?) regional political power. China plays a deft hand in this very Asian form of influence. The level of attention simply far outdistanced anything America (which has a more global spread of interests) can possibly muster in the region.

On the otherhand, if we look at what has been invested in terms of long term institutional presence in the region a more balanced picture emerges. America maintains large multifaceted (with political, economic, military, consulate, cultural (tourism, education etc.), public diplomacy functions) embassies in most Southeast Asian countries often they are the largest embassy in town. Often the US maintains consular offices outside the capital as well. China maintains comparatively large but by comparison a more modest presence that in many cases are behind those of the UK, France and even Germany. Granted, the person-to-person relationship is perhaps the most important measure for most Southeast Asian cultures; but it is important to remember there are other measures of political ties.

And not least, there is developmental aid as a measure of power and influence, although I often question the effectiveness of aid as a form of political leverage. In some countries there are still US-aid projects, but the scale is unlike during the height of the Cold War. I recall there is a US funded FELDA development near Seremban called "LBJ" after the US President Johnson! Likewise, aid from Japan which boomed in the 80s and 90s but are now a thing of the past. On the otherhand, official aid from China especially on infrastructure is expanding. This is definately also a source of growing Chinese political influence.

On the military/stretegic level, the starkest measure is obviously military presence by either China or the US in Southeast Asia. America clearly has a historic head-start: even with the closure of US bases in the Philippines it now has (official) access to bases in Singapore, Thailand and the Philippines, in addition to military advisors/liaison in other locations especially on counter-terrorism. That is before one considers the US Navy Seventh Fleet based in Japan and Guam which is present in the South China Sea at any one time.

China on the otherhand claim a policy against the stationing of any foreign military forces, hence precluding the stationing of the PLA outside Chinese territory - outside of UN peacekeeping or naval expeditions.

The US also has long term military alliances or mutual defence treaties with Philippines and Thailand (both are regarded as Major Non-NATO Ally) and use of military bases in Singapore. On another note, Singapore and Malaysia are part of the FPDA (Five Forces Defence Arrangement) which allows for Australia, New Zealand and the UK to come to be defence of Malaysia and Singapore. Brunei also has its own defence arrangements with the UK, British bases and military personnel. China's closest military partners in Southeast Asia are probably Cambodia and Myanmar.

In my view, another key measurement is the choice of supplies of armaments. When it comes to making significant long term investments (both in money and reliance on continuing training and technical support), Southeast Asian countries are still predominantly choose to be armed with US or European weapon systems. The US which supplied the backbone of the airforces of Singapore, Thailand, Indonesia, Philippines and Malaysia (apart from its Russian made the MIG-29s), France also has a strong position as an alternative supplier of choice especially for naval vessels and helicopters.

Taken together the above reality are very clear and unequivocal measures of US (and British) hard power in Southeast Asia.

Overall, regional sensitivities over China's role, historic enemities (such as with Vietnam), common borders with Myanmar, Laos and Vietnam - and lingering disputes such as over the Spartly Islands - is probably the biggest weakness in China's strategic influence in Southeast Asia. It is arguable if any Southeast Asian countries will tolerate very much Chinese military influence or presence, if ever, at all!

And the final facet is the social-civil aspect. A lot of this are sometimes characterised as "soft-power". I prefer to see this from the narrower prism of intellectual orientation of the ruling elite. Put simply, while everything from as mundane as baseball and hollywood movies or Korean soap operas - to ideas and ideals like capitalism, democracy and the rule of law - all exerts a pull on the public imagination; a more profound and immediate influence could be found in whatever that form the intellectual grounding of a country's governing elite and policy makers.

For decades, the elites of Taiwanese and Philippines are educated in the US and they bring about a distinctly American intellectual influence and extend America's influence into those countries via those personal networks. The same is true for the Singaporean and Malaysian elites and policy makers and their British influence. The modernisation of the Indonesian economy in the 1960s and 70s was led by what was called the "Berkeley mafia" of US trained economists. German-educated former President Habibie sought to orientate Indonesia to German technical experts.

Hence, for me an important indicator of China or America's influence is the where were Southeast Asia's leaders and elite educated? And almost as importantly: where do they send their children to be educated? Because that shows who they really admire. Right now, not many are sending their children for higher education in China. More esoterically, one can even look to where do Southeast Asian leaders and their family go for a holiday or buy private property as an indicator? That actually makes a difference when one considers that the leaders of Myanmar and Cambodia used to holiday or go for medical treatment in China a lot. Not any more one may assume?

More directly, another measure could be to look at the source of the society's intellectual input = its "mindshare". What is going into the minds of the country's leaders and policy makers? Where do they buy their books? And where are the authors of those books they are reading from? Who are the experts they get advise from? Countries look to those they wish to emulate for advise: economic and policy experts used to come from the old colonial masters, then in the 50s and 60s some got (ill)advisers from the Soviet Union or China, while others turn to American experts (including from NGOs like Ford Foundation or Rockerfeller Foundation). The strategic importance of the export of advisers is such that even Taiwan used to export agricultural experts as a diplomatic tool. And more recently there was a time when experts from Japanese were popular. It may not be as obvious now, but if Southeast Asian countries are hiring Arup for city planning, Goldman Sachs to advise on privatization or McKinsey to develop an economic strategy or even the World Bank/IMF, it simply reflects the reality of the continuing influence of the West, especially America in shaping Southeast Asia's thinking on the level fo government policy.

Even on the casual level, the media and news channel that currently dominate the mindshare of the educated middle class in Southeast Asia tend to be cable/satellite television and the internet that mainly of a Western (or American) origin. Rubbish or not, that is a measure of influence on the default world view and intellectual orientation of Southeast Asia. In this regard, take the example of the BBC which allows the UK to punch above its weight and Japan which has little influence relative to its importance in the region. It has been remarked that China is a world-to-itself in cyberspace and in its media (not only due to censorship but because of language and size that made it self-contained) but it has still little mindshare outside of Greater China. And even if language ceases to be a barrier, it has a steep hill to climb when competing for mindshare with the open uncensored media that Southeast Asia long has access.

In conclusion, I would like to submit that there is much more to America's power and influence in Southeast Asia than meets the eye. And plainly because we have taken them for granted we forget how pervasive and powerful America still is. China is the shiny new thing that seized our attention because its power and influence have been growing so quickly and so overtly that many have mistaken rate of change for size. I hope for a more emperical study that compare their power and influence both in real terms and in relative terms; for power and influence is not a zero sum game between the two powers: both could be growing or both could be waning because we should not forget that as the nations of Southeast Asia grows they also become less susceptable to being influenced and are regional powers in their own right.

Oldest Chinese Temple in America (Mendocino 1854)

This is something I have learnt: "Anything is Possible".

Last week I spent a magical week at a tiny coastal town in Northern California called Mendocino (pop. 1300).

I was there for the Core Value Mastermind retreat with Linda Chandler, an annual class for her mentorees from all over the world to learn, appreciate and reconnect with ourselves and with one another. In many ways it was an intensely enriching and meaningful experience.

Mendocino is a quintessential rural American town, sitting atop the craggy cliffs, inlets, rocks and the pounding waves on an achingly beautiful stretch of the Pacific Coast. Above, on the hills behind it, enormous Redwood trees stand majestically some of them as much as 2400 years old, amidst gentle rivers that gleam with jade-green water. The sun rises from behind the hills, so each day break I gasp at the views of the coast covered in golden spray from the pounding surfs while the hills are wrapped in golden ribbons of mist. The sights, sounds and the spiritual energies of its surrounding nature are beautiful beyond words. The towns are occupied by artists, artisans and all kinds of refugees from urban / material life. Almost everyone in this part of the world is white. Quite the last thing I would expect to find is a Chinese temple.

So imagine my delight when Low, a course mate from Singapore now living and working in Guangzhou, showed me a temple right in the middle of Mendocino. Moreover, it is in good repair, in use and the altar fittings and decorations are quite new. The temple was dedicated to Kuan Ti and a picture of him adorned the altar. I felt a good connection with it, not only because it was a nice surprise, but because for days that week I have been reflecting on the very same value that Kuan Ti (or Kuan Yu) symbolises: integrity, friendship and courage as they apply to my own life.

It was not open, though, both times when I visited last week, because the key is kept with a few town's people and the one Low know of was not in. According to the website (yes, it has one) the temple has been maintained by 4 generations of the "Hee" family.

A plaque outside the temple indicate that the temple was built in 1854 and is now in California's list of historical places. That means it was built only 5 years after the Gold Rush started in California and 2 years after Mendocino was settled. According to some, it is the oldest surviving Chinese temple in America.

Wow! all that right in this tiny little town of Mendocino. Life is full of wonderful discoveries.

[photo from online. Will post more when I receive them]

Soldiers of the Republic

Let me make a slight diversion before getting back to the topic of "Chinese History Revisited".

Today, 11th November, is Veteran's Day in the US. In Commonwealth countries, its Rememberance Day to commemorate the end of World War I.

Earlier this year, my office moved to Madison Avenue just one block away from Fifth Avenue where the Veteran's Day Parade is held in New York City. So I had the opportunity to get my first glimpse of the parade a little while ago.

Well, parades happen all the time in the city so this is not a big deal. As military parades go this is a relatively low key affair compared to parades in other parts of the world. But what struck me was the spirit of the parade which embodies the values that I admire in the United States of America.

First of all, the parade was a civic event and not an "formal" or "official" event: yes, there were troops marching but also school bands, beauty queens, hobbyists (like vintage car enthusiasts and Harley-Davidson bikers) and various veteran groups of old comrades who used to fight together, veterans who now work together (like a band of subway workers), veterans who now study together (such as a group from Columbia University) etc. Old soldiers came out in their old uniforms marching with the old comrades. Families of veterans (who died? too old to come out?) came out waving photographs of their man in uniform. There is a strong display of diversity and respect for self-organized groups and grass root initiative. I got a sense that the parade belonged to everyone no matter how "unimportant". The atmosphere was relaxed, informal and celebratory. By the way, although there is a small dias for dignitaries and VIPs, the real place for the VIPs in an American parade is leading and marching (or at least riding along in a car) in the parade itself. That's what the mayor did today.

Moreover, I was reminded of the values of a republic as opposed to the state. The parade was not to glorify the state or the military power, it is to show appreciation for the individual citizens in uniform; in active service, in the national guards, in the reserves and veterans. They come in all shapes and sizes and colours. They marched without weapons. The troops smiled and waved as they marched, as if they were sportsmen returning from the Olympics. It made me think of the classical notion of the soldier as a noble sacrifice and solemn responsibility that go hand in hand with the rights and priviledges of being a "citizen" of a republic; and not just a self-less and unquestioning tool of the state.

And then there was the show of appreciation and affection for the troops that is uncommon. The crowd lining the streets waved handmade signs that says: "Thank You", "We Salute Our Troops" etc. The soldiers both active and retired were greeted with applause and cheers by the crowds. I saw a man wish a soldier good luck as he march by and the soldier nodded and said thanks. When a large flag was carries past, people clapped and saluted. Nothing suggested it was anything but genuine or sponteneous.

In the city today, I see many soldiers going about proudly in their dress uniforms, some with wives or girlfriends at their elbows. In many pubs tonight, any one showing up in uniform gets a free drink. For me, its a reminder of the real source of America's strength.

---- update 15 minutes later ---

This speech yesterday is widely reported but not widely appreciated. I just read it and found it to be very good. I was most taken by the passage, "....instead of claiming God for our side, we remember Lincoln's words, and always pray to be on the side of God." Note his remarks that addresses the slain soldiers as individuals. And how it tries to explain the value of military service in a liberal democracy in times of plenty.

http://voices.washingtonpost.com/44/2009/11/10/obamas_speech_at_fort_hood_the.html

Neo-Slavery of African American

In Slavery By Another Name, a putlizer winner, Douglas Blackmon wrote an excellent book on how the Southern White de-enfranchised the African American through trick and terror and reinstated neo-slavery to the former Confederate states in the aftermath of 1865 Emancipation Proclaimation.

The book spoke about the lynching that frightened the African American into submission and servitude. The book spoke about how the African American were victim in the most appalling condition without respect and dignity, not to even mention right and lawful entitlement.

Black men toiled to death and black women were sexual play toy at whim of her White master. In the course of reading the book, I discern that a lot of lynching and attack on black were started by the unsubstantiated time-honored allegation of blackmen sexually attacking white girls.

The book elaborated in great details how the due process was manipulated by the White to convict large number of African American for seemingly minor or non-offence such as vagrancy and how these convict were quickly sold to labor or rather to be enslaved at various mines, farms and factory.

The working and living conditions were no different from a Gulag. The treatment meted out to the African American convict were inevitably inhuman and motivated by racism. The flogging, the whipping, the water torture were the daily routine every African American convicts had to face. The bloodhound were used to hunt down the run away. Many of them caught were first tortured and made to never live again.

The South was a society and a system where the justice was systematically denied to and cruelty was selectively applied to the African American. Almost every if not all Southern White institutions, media and church included, were innocent.

The segregation implemented in the South under the guise of the separate but equal doctrine was Apartheid, plain and simple.

No question that the White Supremacist's reign was morally untenable however the history shown that the emancipation was successfully highjacked and slavery was reincarnated with most American then stoodby and did little to live up to the American credo.

"It was a strange irony", in the word of Blackmon, "that after 74 years of hollow emancipation, the final delivery of African Americans from overt slavery and from the quiet complicity of the federal government in their servitude was precipitated only in response to the horrors perpetrated by an enemy country against its own despised minorities."

The turning point for the eventual success of the Civil Right movement stems more from American's akward position in treating her own citizen in reaction to the Nazist, Fascist and Communist ideologies.

It is like the old saying he who live in the glass house shall not throw stone. This was the awakening moment. The return of large number of African American soldier fighting the WW2
led to unprecedented civil right movement in taking discrimination to court.

One of which culminated in the landmark decision of Brown V. Board of Education 1954 that overruled Plessy v Ferguson 1896 which in turn led to the civl right legislation in the Johnson's Administration.

This is a great book to read and what I like best were the following passage where Blackmon reflected:

"whether any company or an individual, we are marred either by our connections to the specific crimes and injuries of our fathers and their fathers. Or we are tainted by the failures of our fathers to fulfill our national credos when their courage was most needed. we are formed in the molds twisted by the gifts we received at the expense of others. It is not our "fault". But it is undeniably our inheritance."

and in another passage:

"I had no hand in the horrors perpetrated by the 20th century slave masters who terrorized American Blacks for four generations. But it is nonetheless true that hundreds of millions of us spring from or benefit as a result of lines of descent that abided those crimes and benefited from them."

Moments from My Metropolis - What Price? Civilization

Two recent experiences in my metropolis reminded me of both the gift - and the economic reality - of enjoying the abundant fruits of civilization.

Exhibit No.1. Two weekends ago, we decided to spend the afternoon with our daughters at the main branch of the New York Public Library (NYPL); the imposing Beaux-Art marble palace dedicated to books and learning on 42nd street at Fifth Avenue now being cleaned to be readied for its centenary. The NYPL system is one of the great joys of New York city living. According to its website, its 4 research libraries and 85 branches carries 50.4m publications for the benefit of 2.2m members. And it is totally free.

What that mean for us is that we would visit the Children's Room at the library, which carries a wonderful collection of children's books (in many languages), with a space to the side for children's activities and we would - literally - empty out whole stacks of books from the shelves and borrow them home. On that particular Saturday, we came out with about 30 books which we could keep for weeks - although the girls needed only a few days to run through them. For the past few years, we hardly bought any books because wherever we wanted we would find at the library. We can reserve them online and they would be delivered for collection at a nearby branch.

I imagine that is what a book loving multi-billionaire would feel, to collect and build up an endless collection of books (and CDs and DVDs) at his disposal. For us, we can enjoy the same thing as the billionaire - and its totally free.

Exhibit No.2. The next day we were out for some exercise and fresh-aire in Central Park. The weather promised to be warm(er) and sunny. I had brought along the children's kick-scooters so that they could ride along the lake/reservoir. But what we did not anticipate was that a slight shower of rain broke the moment we got there - so we sought refuge at the Metropolitan Museum of Art, one of my favourite places in the world.

Housed in yet-another giant Beaux-Arts mansion, but one built of sandstone unlike the library which was built of marble, we dove into its 1.3m pieces of enclyclopaedic collection from civilizations around the world. We wondered around the Byzantine arts, to the medieval collection when Hue, our 5-year old daughter, wanted to see the mummies. So I went with her to learn about the mummies while Mewyee went with our 7-year old Ning (who is terrified of mummies) and we agreed to meet at the American Wing. Along the way, Hue and I saw and learnt about arms and armours, art and furnishing from the Middle Age Europe and finally mummies and other sacred art work from Ancient Egypt. Eventually, we had lunch at the museum cafeteria and by then the rain cleared and we resumed our original plan.

A few days later, Mewyee and I decided to visit the Met on an impulse. We ended up spending an hour on a gallery tour about the meanings behind costumes through-out the ages led by an expert curator. Such tours brings the collection to life by bringing out the meaning and significance behind the art. We have been on many such gallery tours and there are perhaps a dozen each and everyday (in multiple langauges and for different age groups) but this one stood out as the best we have ever heard for as long as we could recall.

And all the while, I was thinking how wealthy does one have to be to enjoy what we just did? A multi-billionaire would take years and billions to build and house a world-class collection like the Met - even if that is at all possible this day and age - and even more to engage world class brains and experts to create intellectual enjoyment for a lay-person like me. And for that, we paid $5. The suggested entry is $20 but payment is actually voluntary; once I stood behind a person who paid 10cents.

I was profoundly humbled by thoughs and experiences like these. What is the meaning of wealth and abundance? What is the meaning of a civilized society? And what price the "haves" of society should be willing to bear in exchange for a civilized society?

In many ways, New York is a great case study for that last question. Unlike the major capitals of the world - London, Paris, Washington DC - that host the national intellectual and cultural collections, New York do not enjoy state patronage. The great public institutions and collections in New York are privately endowed for the general public by the wealthy; many from the 19th century but contributions continue to pour in to this day from the great and the good of local society. One of the most attractive social tradition about New York City is that the wealthy tend to keep a low profile. For a city full of real estate moguls, the tradition is never to put one's name in bright lights on the building (one reason why New York is usually scornful of a certain Mr Trump, who is from New Jersey by the way). The only exception to this low profile is when it comes to giving: come charity balls and naming rights to a new concert hall, hospital wing or museum pavillion, one sees the New York high society in ferocious competition to see who is giving how much.

And the city as a whole is richer from all those giving. That is how even a homeless person can (if he wants to) read a different book a day for the whole of his life, or a small child get to learn to draw by sketching a Degas, or a delivery boy can listen to Placido Domingo at a public performance in the park, or new immigrant parents can get books for their children to learn English (and DVDs in their native language for themselves).

And I think about all manners of public services, the police for keeping the peace, the fire brigade for rescues in distress, the public buses that takes people about without need for a car, the utilities that brings us clean water, the public schools for giving everyone an education - with the glaring exception of a decent health system that keeps one healthy without costing personal financial ruin. On public schooling, it was said that despite the Great Depression in the 1930s and 1940s a whole generation got the best education in the world in the New York Public school system, which at the time was staffed by brilliant emigre scientists and intellectuals escaping from totalitarian regimes in Central and Eastern Europe.

Everywhere I looked and the more I learn the more I realise public services and amenities are not ill-afforded luxuries, or creeping socialism, or ill-deserved rewards for the poor amd unsuccessful. They are the very foundations of a civilized society; one where the rich, no-so-rich and the poor made a choice that their society shall stand and fall together; and who resolved that a civilization is sustainable only when it is not to be enjoyed in isolation but one to be shared.

As one casts one's eyes to the many societies and metropolis that are developing all around the world - across Southeast Asia China, India, Latin America and the old-Soviet Union - often we see enclaves for the wealthy esconced behind high walls, security guards, manicured lawns, satellite TVs, lavish shops, spas, private hospitals, private schools and darkened car windows. And beyond that are the rest of society; one of indifferent infrastructure, crime, corruption, pollution, poor schools and trash. And I am sure the conclusion must be that the value of civilization is indeed priceless.

Thinking in Trillions

The US economy is a multi-trillion dollar train-wreck. President Obama said it correctly last Monday during his news conference when he explained that it is not your usual recession. As a matter of fact, his Q&A - thanks to the precision and power of his thinking - makes an impressive education to the layman of what is going on and his logic for the stimulus package.

And I have been tempted for sometime to explain how that is so based on my understanding of economics. Here I shall try.

The total financial asset of the US economy is about US$55 trillion ("T"). That is the aggregate value of all homes, fixed assets, corporations, personal savings, stock, bonds, real estate etc. Think of that as total net worth.

The US economy produces US$14T of GDP a year. That is approximately 23% of the global GDP which makes the global GDP to be about US$60T. Think of that as income.

The US Federal Government makes up US$2.9T of the GDP, which is the amount it spends. To fund it, in 2008 it collected US$2.6T in taxes. The rest US$0.3T is the deficit funded through borrowings.

The total US Federal Government debt is nearly US$11T, which has risen US$5T within the last 8 years.

The stimulus package will add US$500bn of new spending (the remaining US$300bn will be tax cuts) in the next two years. Pro-rated to US$250bn of new spending a year means adding 8.3% to the federal budget annually. If the entire stimulus - both spending and tax cuts - were to be totally debt funded (which is likely), it will add 7.2% to the US Federal Government debt.

The stimulus spending of US$250bn per year is half the defense spending (38% if the running costs of wars in Iraq and Afghanistan are included); which is about the same as the amount for debt service (in 2008); which is about 40% of Federal expenditures on Medicare and Medicaid.

Now, lets consider the first of four crises, the mortgage crisis.

The total value of US home mortgages is about US$10T. Banks holds those mortgages as "assets" both through direct mortgage lending as well as an investor in mortgage derivatives.

The home mortgages are collateralized against the value of homes. The aggregate value of US homes peaked at US$13T in 2006 and has fallen to about US$8T - 8.5T, meaning US home mortgages as a whole is US$1.5-2T under-water. The "wealth" destroyed by this asset-deflation/bursting-of-the-bubble is bourne by both homeowners and banks.

Which brings us to the second crisis, the financial crisis.

The total capitalisation of US banks is about US$0.6T.

As the banks' asset value which were held as mortgages (or mortgage derivatives) decline, that will need to be written-off against the bank's capital base. Assuming that homeowners take the first hit (because banks tend not to lend 100%) the exposure of banks are still between US$0.5T - US$1.0T ... and growing by US$0.1T for every additional 1% fall in house prices. At this rate, US$0.6T in total capital base can disappear quite quickly and that's how banks become insolvent.

Hence the US has been under a financial crisis (at least since March 2008) because as banks are straddle with bad assets and fighting against insolvency, the ability of the US financial system to keep functioning comes under threat.

Which brings us to the third crisis, the credit crisis.

Banks are just one of many players in the financial sector. At any given time, financial transactions take place between any combination of counterparts: brokerages, insurance companies, pension funds, investment funds, credit card companies, trade credit, hire-purchase, car loans, student loans, commercial credit lines, consumer pre-payments, notes/bonds (issued by governments, local governments, municipalities, corporations, public bodies etc.). They all have one thing in common: credit i.e. people parting with their monies because they believe they have enough trust the counterpart to get the money back.

Since September 2008, many of these markets are in different degrees of dysfunction. However, due to aggressive intervention by the Fed in September and October, the worst did not come to pass. Nonetheless, there is still a significant contraction in the amount of credit available within the financial system (e.g. the commercial paper market shrank from US$2.2T in mid-2008 to US$1.6T in Feb-2009) and any that is available is a higher cost.

Which brings us to the inevitable - the economic crisis.

The economic crisis is not about the wealth of the US economy rather it is income (remember, the US$14T a year).

Imagine the US economy as a human body (as we will discuss later, it is not even a particular healthy one). It just encountered (1) a huge trauma - lets say it has a seizure from partying for 72 hours running [the mortgage crisis] - which reduced the blood flow to the heart causing (2) a heart attack [the financial crisis] which caused (3) a sudden (but thankfully temporary) fall in the blood flow to around the body [the credit crisis], which unsurprisingly caused (4) massive cell damage leading to organ failure [the economic crisis].

However, the US economy itself is the only thing that can fix all its other crises - and over time, there is no doubt it will because the US economy has structural advantages such as favourable demographics to push growth along. For as long as the US economy keep going, it will generate US$14T of economic output a year to slowly plug the hole from lost asset value from the mortgage crisis, to recapitalize the financial system, to generate cash flow to pay and reassure creditors ... and ultimately to make the economic wheel go around again i.e. maintain the productive capacity* of the economy to generate the next US$14T or more of economic output.

What has been fuelling the productive capacity of the US economy has been personal consumption - 72% of the GDP - partly debt fueled. Personal consumption in the US has been on uninterrupted growth since 1978. With the fall in house, equity value and pension funds, the total fall in US personal net wealth in 2008 was almost US$9T - coupled with the tightening of the credit market - personal consumption is falling drastically.

The current estimate is that the US economy at current rate will fall US$1T below its productive capacity annually for the next 2 years i.e. a -7% contraction in GDP. The stimulus package @US$0.4T annually will not make up the entire shortfall.

And critically, consumption - unlike investment - does not by itself grow the productive capacity of the economy. If we think of the productive capacity of the economy as cells in the body. During injury or illness, cells tend to die, even-though the body needs to have them in order to recover. Anytime a worker is laid off, investment is reduced, production is cut, technology/R&D is cut, the productive capacity of the economy is reduced. For the US economy, the body has been keeping itself alive (or even look outwardly robust) mostly through junk food that merely kept the body going but did nothing to keep it healthy or growing. What this also means is that the productive capacity of the US economy has not been growing at a self-sustaining manner through a positive return-on-investment. Instead, it has been growing in a zero-sum-game through consumption which do not have a return.

Any visitor to the US expecting to see 21st century infrastructure or technology would in most case be disappointed. Airports, highways, telecommunication systems, public transport are often 25 years or older. In fact, many date back to the Works Progress Administration projects by FDR as his stimulus program to bring the US out of the Great Depression.

That is both a challange as well as opportunity for the Stimulus Package. Because so little investment has been taking place the return on investment should be pretty robust - every $ invested may yield a large multiplier of economic effect - which in turn will expand the economy's productive capacity. That is important because there is no point to an economic recovery by merely going back to where it was before. To recoup the costs of the Stimulus Package - plus the much larger costs of recapitalizing the financial system and restore the wealth lost to the mortgage bubble - the US economy need to grow to have more productive capacity than what it had earlier. That is the key: because every 0.1% in additional growth in the GDP will over 25 years painlessly recoup the costs of the Stimulus Package ... and doing so in the right way by growing the productive capacity.

So I believe it is right that Obama included billions in what he called "down-payments" for his goals to invest in other areas for economic reforms: alternative energy, energy efficiency, health care reform, education, scholarships and infrastructure. If anything, I hope he will use this as a springboard to reform and reinvest in those critical areas of the economy even more in the months to come.

Investing in structural reforms of the economy stands to repay the short-term spending many fold in the years to come. It is true they are not the purist view of stimulus for stimulus-sake because they take longer to implement and so the effects are slower but the return-on-investment - from structural changes to the economy - is potentially huge. They are the catalysts to shape the "creative destruction" of the current economic model as it evolve into one hope to be a larger, stronger and more sustainable one. For example, US$2T of annual US economic output comes from the most wasteful healthcare system in the world. If reforms means the US spends as much per capita as Canada (who does not seem to be doing too badly) that is US$1T a year of additional lift to the US economy - and lesser drag on the competitiveness of US corporations for whom employees' healthcare is part of payroll costs. Likewise for energy and transportation infrastructure.

It is a dillemma that policy choices during a downturn is often counter-intuitive and contradictory to the longer term choices. Whatever the virtue of cutting personal consumption, if it keeps falling too drastically that is a lot of productive capacity to be lost making recovery even harder. So personal consumption has to be brought to a soft-landing, particularly stimulus spending can double as a social safety net targeted at maintaining the health, shelter and food needs of the unemployed and for his family. In the US, if you lose a job, you lose healthcare for the whole family and without the income you may lose your home, and the downward spiral beckons. Whatever the arguments for and against a welfare state, there is a social and economic cost to ignoring anyone to lose his health or his home or not being able to feed himself. What is broken often takes longer to fix and by ignoring his plight society makes it harder for him to be productive again. So this component of the Stimulus Package cannot be ignored.

Lastly, it should not be forgotten that in the US, most public services are provided by the States through their own budgets raised from local taxes. Because of their heavy reliance on property tax and sales tax, state budgets are decimated by the economic crisis. What is making it much worse is that most states have a balance-budget-requirement in their constitutions; i.e. when tax revenue falls they are legally obliged to cut their expenditure accordingly. So what gives? State and local level taxation maintains the school system, public hospitals, funds public transport, funds the police, paramedics, fire service and local services like parks and libraries ... which is just about all the most important services that underpins a civilized society. The Stimulus Package allows the States to get an infusion of Federal money for the State's portion of Medicare and Medicaid obligations (which often consumes the largest share of the budget - and in a recession this can only go up as more people fall into poverty), thus cushioning the amount of cuts that will be required on other areas.

One often forgets the difference between a civilized society and the uglier faces of capitalism (think of how many cities where the rich live behind walls keeping crime and squalor outside) comes down to public services that maintain a minimal quality of life for everyone. The impact of cutting one public bus line, or closing the local park, or letting crime go up, or cutting funding for schools means a lot to society. I read in St Louis that as the city considers which bus route to cut, hundreds worry about having having no means to get to work, seniors cannot get to the hospital etc. For others, these are jobs: bus drivers, policeman, librarians etc.

Going back to our patient, its been said in cardiology that "time is muscle". The faster you treat a heart attack, the less the muscle damage and the better the chance for recovery. What has been done so far only stablizes the patient: the Fed provided emergency blood transfusion (The Fed and FDIC flooding the market with US$trillions in funds and guarantees) and the Stimulus Package provides shot of drugs to keep the heart pumping and stimulate tissue-repair. Unless policy makers act quickly to save the destruction of the heart muscle (i.e. the productive capacity of the economy undermined through job-loss, good companies going bust, investments pulled), it would be very difficult to fix the heart attack [financial crisis] and to allow the body to recover from the trauma [mortgage crisis].

So I see the Stimulus Package as the necessary first-shot in a multiple-course treatment. Collectively as a society, asking to borrow and spend 3% of the annual income or 0.7% of the total wealth to keep the economy and society from crashing, it is small money especially when compared to the scale of the challenges and compared to the potential for pay-back. It is a small start to a long and expensive treatment that will continue with finding the US$1 - US$1.5T to recapitalise the financial system ... and eventually to structural reforms that will require US$20T to fund the health care and retirement of the US baby boom generation ... and move to a alternative energy economy .... to educate the largest number of school age children in US history.

---

This article is partly inspired by a marvellous must-read article in the NYT. The Big Fix - The Real Economic Challenge for Barack Obama

http://www.nytimes.com/2009/02/01/magazine/01Economy-t.html

2 Days Before Valentine

This coming February 12, 2009 is a very special day.

On this day 2 centuries ago, February 12, 1809, it was an exceptional day of human history. 2 great men were born on each side of the Atlantic.

The first man contributed the theory of Natural Selection. He is Charles Darwin, a British scientist and explorer.

His theory becomes known as the theory of evolution providing an unifying logical explanation for the diversity of life in the biological world.

This new understanding of lifes upstaged the prevalent theocratic if not mystical explanation of life that dominated the largest of our human history. The proposition that every life forms are attributed to a certain divine creation, though is no longer mainstream, is still common in certain societies where tolerance and moderation are not the general rule.

The second man is Abraham Lincoln, arguably the most well regarded American President in history.

Among his many firsts, Lincoln was the first President from the Republican Party and the State of Illinois. None really matters.

What count was his deeds and words. Lincoln is a very rare President whose deed is praised and celebrated everywhere and whose speech is memorized and recited again and again by successive leaders of all stripes. He is an unifying figure across the political divides.

Lincoln succeeded in ending the civil war and reunited the country. His term was brief but what he accomplished was really belonging to the ages.

He inspired a nation with renewed purpose and introduced moral vigor into the American constitution.

Don't forget to propose a toast to Darwin and a toast to Lincoln on February 12, 2009 on their bicentenary.

A personal note:

My convertion into atheism at the age of 13 was in large part supported and sustained by Darwinism. It was a rare excitement for a young boy to challenge and contradict the religious orthodoxy. To atheism and by extension Darwinism, I owe my emancipation from religion.

Abraham Lincoln recalibrated my views on public duty and political ideal. This is in large part thank to BHO who tried to mimic AL. No surprise, I came to know Abraham Lincoln much better only late last year after reading the Team of Rivals.

President Obama: Letter to My Two Daughters

With each passing day, I am reminded that we are witnessing a great presidency of historic significance. Only in hindsight will we survey and appreciate the details, but I know this because we have a good man in the Office and he is acting from the higher energy - "the better angels" - as Lincoln calls it. I came across this carried in a newspaper in Kenya. It first appeared in the "Parade" magazine 18 January 2009. Appreciate the words he chose and the motivations he shared.
--------------------------

""Dear Malia and Sasha,
I know that you've both had a lot of fun these last two years on the campaign trail, going to picnics and parades and state fairs, eating all sorts of junk food your mother and I probably shouldn't have let you have.
But I also know that it hasn't always been easy for you and Mom, and that as excited as you both are about that new puppy, it doesn't make up for all the time we've been apart. I know how much I've missed these past two years, and today I want to tell you a little more about why I decided to take our family on this journey.
When I was a young man, I thought life was all about me—about how I'd make my way in the world, become successful, and get the things I want.
But then the two of you came into my world with all your curiosity and mischief and those smiles that never fail to fill my heart and light up my day. And suddenly, all my big plans for myself didn't seem so important anymore. I soon found that the greatest joy in my life was the joy I saw in yours. And I realized that my own life wouldn't count for much unless I was able to ensure that you had every opportunity for happiness and fulfillment in yours.
In the end, girls, that's why I ran for President: because of what I want for you and for every child in this nation. I want all our children to go to schools worthy of their potential—schools that challenge them, inspire them, and instill in them a sense of wonder about the world around them. I want them to have the chance to go to college—even if their parents aren't rich.
And I want them to get good jobs: jobs that pay well and give them benefits like health care, jobs that let them spend time with their own kids and retire with dignity.
I want us to push the boundaries of discovery so that you'll live to see new technologies and inventions that improve our lives and make our planet cleaner and safer.
And I want us to push our own human boundaries to reach beyond the divides of race and region, gender and religion that keep us from seeing the best in each other.
Sometimes we have to send our young men and women into war and other dangerous situations to protect our country—but when we do, I want to make sure that it is only for a very good reason, that we try our best to settle our differences with others peacefully, and that we do everything possible to keep our servicemen and women safe.
And I want every child to understand that the blessings these brave Americans fight for are not free—that with the great privilege of being a citizen of this nation comes great responsibility.
That was the lesson your grandmother tried to teach me when I was your age, reading me the opening lines of the Declaration of Independence and telling me about the men and women who marched for equality because they believed those words put to paper two centuries ago should mean something. She helped me understand that America is great not because it is perfect but because it can always be made better—and that the unfinished work of perfecting our union falls to each of us. It's a charge we pass on to our children, coming closer with each new generation to what we know America should be.
I hope both of you will take up that work, righting the wrongs that you see and working to give others the chances you've had. Not just because you have an obligation to give something back to this country that has given our family so much—although you do have that obligation. But because you have an obligation to yourself. Because it is only when you hitch your wagon to something larger than yourself that you will realize your true potential.
These are the things I want for you—to grow up in a world with no limits on your dreams and no achievements beyond your reach, and to grow into compassionate, committed women who will help build that world. And I want every child to have the same chances to learn and dream and grow and thrive that you girls have. That's why I've taken our family on this great adventure.
I am so proud of both of you. I love you more than you can ever know. And I am grateful every day for your patience, poise, grace, and humor as we prepare to start our new life together in the White House.
Love, Dad ""

A New Era of Responsibility - BHO

My fellow citizens:

I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition.
Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.

So it has been. So it must be with this generation of Americans.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.
These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land - a nagging fear that America's decline is inevitable, and that the next generation must lower its sights.

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.
On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted - for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things - some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.

For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.

For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn.
Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.

This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions - that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act - not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.

Now, there are some who question the scale of our ambitions - who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

What the cynics fail to understand is that the ground has shifted beneath them - that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.

Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public's dollars will be held to account - to spend wisely, reform bad habits, and do our business in the light of day - because only then can we restore the vital trust between a people and their government.

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control - and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart - not out of charity, but because it is the surest route to our common good.

As for our common defense, we reject as false the choice between our safety and our ideals. Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience's sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort - even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet. We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.

For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West - know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.

To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.

As we consider the road that unfolds before us, we remember with humble gratitude those brave
Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us today, just as the fallen heroes who lie in Arlington whisper through the ages.

We honor them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment - a moment that will define a generation - it is precisely this spirit that must inhabit us all.

For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.

Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.

This is the price and the promise of citizenship.

This is the source of our confidence - the knowledge that God calls on us to shape an uncertain destiny.

This is the meaning of our liberty and our creed - why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.

So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:

"Let it be told to the future world...that in the depth of winter, when nothing but hope and virtue could survive...that the city and the country, alarmed at one common danger, came forth to meet [it]."

America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.

Thank you.

God bless you. And God bless the United States of America.

Youtube link http://hk.youtube.com/watch?v=VjnygQ02aW4