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Not everything has to be about democracy

This is one of those articles that make no sense to me.  Why does everything have to be an ideological competition?  The failure of the US is “bad for democracy’ only because people have made *everything* into some sort of ideological competition.

The US has a health care system that’s fundamentally broken.  So fix it.  I have this weird idea that maybe the US should deal with the COVID-19 situation not to make some sort of political statement, but because it’s the responsibility of a government to serve its citizens.

The end of the old world

One thing that I find maddening is the lack of any real economic discussion about what’s going on.  Because, Trump has decreed that it’s all going to be good before May, the Republicans cannot ask “so what if it doesn’t.”  The Democrats aren’t much better since they just want to return to the era of Clinton and Obama, and that’s not going to happen.

Let me start with an obvious observation.  Most Chinese households have money in the bank.  Most Americans don’t.  This means that if you have to shut down the economy for three months, most Chinese households have cash in the bank that can time them over.  Most Americans (particularly young Americans) are in debt, and if they lose their job, it’s a complete disaster.

If you look broader that reveals another dirty secret about the United States.  The United States is only able to maintain it’s standard of living through massive borrowing from China, Russia, and Saudi Arabia.  As long as you had an interconnected economy this system would work.  China would provide the US with cheap goods.  Russia and Saudi Arabia would provide the US with oil.  The US would print dollars to buy the goods, and then China, Russia, and Saudi Arabia would recirculate the cash back to the US.

But that system has collapsed.  China is going to have to do massive economic restructuring, so it’s going to have to use its savings for domestic use.  This completely cuts off foreign lending to the US, and so the US is going to make a lot of hard decisions.  In particular, I do not see how the US can continue to spend nearly a trillion dollars a year on defense without destroying its economy the way that the Soviet Union did.

In previous economic crisis, the rest of the world bailed out the US.  This is not going to happen this time.  Basically, the military hawks have annoyed China and Russia enough so that they won’t supply funds, and the Saudis have their own worries since the oil is not going to last forever.  One thing is that the US *could* undertake a program of recreating a manufacturing base, but that’s going to require trillions of dollars in investment.  As far as science and technology, a lot of the science and technology infrastructure was provided by Chinese and Indian graduate students.  If you remove the welcome mat from those groups because they are “spies” then you end up killing the US science infrastructure.

So the US is going to  have to make some hard decisions.  The good news is that I think the system will work, and that something sensible will happen.  What is going to be tempting is to *blame China* and I worry a bit that things will go out of control.  But the logical consequence of that road is nuclear war, and I think people have too much sense for that.

But the first thing that you have to do is to face harsh reality.  I expect that this will happen by early June at the latest.

Utter insanity

This is the type of nonsense that is destroying America.

So the basic misunderstanding is that China has absolutely no strategic interest or  ideological interest in exporting its system of government.  After a century of misery, China has found a political system that basically works for China, but if other countries want to have basically different political systems, that’s fine.

The problem is that by obsessing over China and this ideological battle that doesn’t exist, the US government is forgetting to fix America, and by not focusing on fixing the United States, the US is making extremely terrible errors that make the US system of government less attractive.

Right now, everyone is basically looking at the United States and wondering how the richest most advanced country in the world can’t get basic personal protection equipment for its hospitals, and a lot of this is that the US government has been spending far too much of its time in this crazy ideological battle rather than worried about the  domestic economy.

And seeing everything  in ideological terms also has some terrible impacts.  First of all, if you try to make the world think you are perfect, you can’t deal with the fact that you aren’t.  The US is forced to argue that everything about the US is good, whereas everything about China is bad.  And the world just does not work this way.

Second, once you make everything about democracy versus authoritarianism, then you can’t learn from other people’s mistakes.  The Chinese government severely mishandled the early phases of the COVID-19 outbreak, but because this is seen as “authoritarianism versus democracy”, there was a failure to realize that some of the things  that China did wrong were also mistakes that the US government made. There was a period of about two weeks, in which you had a lot of bureaucratic denial and inertia, but that ended when Beijing realized that they were in a bad situation, and dealt with it. However, the factors that led to the slow response are *exactly* the same factors that existed within the US and EU.

Right now  it’s difficult for me to listen to Trump because when I read the People’s Daily, I’m struck at how *rational* the Chinese government is about the post-COVID world.  There appears to be a decision that the focus of the economy after COVID will be on anti-poverty, and that the goal will be to pull up the poor parts of  China.  The proposed economic measure seems sensible, and it’s sort of refreshing to have a political leader that can think in complete sentences.

By contrast, Trump is very delusional.  He is wasting his time with conspiracy theories that were discredited months ago.  The idea that the virus was some accident from the Wuhan laboratory circulated in Chinese social media in early February, and the Chinese government managed to deal with the rumours by having the director of the lab denounce those rumours and also by having the investigative journalist who broke the Wuhan story look into it and they found nothing.

One thing about the Chinese press is that the government has this tricky balance with the press and social media.  They do not want the press or social media to be “kingmakers” but at the same time the Chinese government wants a limited about of press freedom so that *they* know what’s going on.  This leads to a tricky balance, but in this case it worked.  The whistleblowers in Wuhan were able to raise the issue to Beijing, and once they saw that there was a mess, they acted.  It turns out to be a system that’s very different from the West, but it basically works for China, and if you don’t like it, then you don’t need to adopt it, China doesn’t care.

As a Chinese-American, I ultimately have faith in the common sense of the American people and that the American political system will correct itself.  Rather than admit mistakes, Trump is trying to deflect blame for his own errors to China.  I think this is a very highly dangerous game, because I’ve seen in Hong Kong how easily you can open pandora’s box, and how quickly politicians can lose control of public anger.

But I think that common sense will prevail, and that once people start asking questions about how the US got itself into this economic and political disaster, that something sensible will happen.  At the same time, there are some stupidly dangerous people in the US government that are driving the US off a cliff, and I’m just hoping that some common sense will prevail.

The thing that China learned from the fall of the Soviet Union, is that you are better off developing your internal economy, and that it’s a bad idea to get too ideological.  The mistaken lesson that the US learned was that the US system is “inherently superior” and that it’s not necessary to fix the domestic economic problems.  The sad thing is that the political idiots basically shot themselves.  By spending trillions of dollars on wars in Iraq and Afghanistan, and on 12 carrier battle groups rather than spending money on healthcare and education, the idiots created a situation in which the US has lost a considerable about of political and economic power, and they are still in denial about what a hard road its going to be to get the US out of this hole.

Trump seems to think that this is all going to be over by May.  This is nonsense.  Even if the virus trends down, you are still looking at trillions of dollars that are needed to fix the economy.  There is absolutely no way that the US can afford to spend the money that it need to restructure it’s economy and afford a cold war with China.

The good thing about idiots is that they end up destroying themselves.  The bad thing is that when they blow themselves up with a nuclear bomb, they can to a ton of damage in the process.



Back up

Well I’m back.  It’s been a hell of a year, and it’s even getting more interesting.  I haven’t posted in the last year, because things were just too depressing.  But the world is changing, and I’ve gotten back in stride.  I don’t feel good, but the old world has fallen apart, and I’m moving into the new one..  And then new one doesn’t seem that bad.

So I’ve reconnected with the MIT alumni network, and I’ve gotten into brokering medical supplies.  One thing that has happened is that when I look at the world, I’m not longer depressed.  I’m angry, but the good thing about anger is that it gets you motivated to do stuff.  I’m looking at the complete mess that exists in the world, and the fact that people are dying because they can’t get basic medical supplies, and the sheer magnitude of institutional incompetence just causes me to go crazy.

The thing about makes me angry is that there is absolutely no freaking reason, we should be low on supplies.  We aren’t talking about diamonds or plutonium, we are talking about equipment that shouldn’t be that hard to manufacture.  So what I’ve been doing is to develop some networks to get supplies from point A to point B.  And in order to organize this, I’ve come up with a set of forms that I’m beta testing.  The idea is that someone that needs supplies or has supplies should be able to fill out a one page form that gets passed around.

There is some deep theory behind all of this.  I’ve started with the forms and systems used by FEMA in the Incident Command System.  However, the issue with FEMA is that it assumes that supplies are prepurchased and stockpiled.  We are in a situation, where the stockpiles are empty so you have to order supplies direct from the factory, and that means that you have to include not just the supplies but the funding mechanism. So you need to put in not only the FEMA request but also something that looks like an ISDA term sheet.

I’ve got about five or six suppliers of medical equipment, and so part of the reason I’m creating a bureaucratic system is so that I can organize this effort. Right now I’m doing a quick beta test of the forms, and will publish them in two or three days, once I get some feedback.

There’s also some deep history.  China has had a bad century, but one thing about history is that you have stories about how people organize in response to crisis.  So I’ve been reading a lot of Mao Zedong to understand how to conduct a people’s guerilla war against the virus.

But what makes me angry is that we are in deep crap if I’m having to organize this.   I’ve got a ton of very inflamatory thoughts and feelings about the COVID situation, but I’ll save some of that, since it can get pretty ugly and nasty if I let it all out.

Notes on the HK protests – What’s different from 2014

Vastly different. History never repeats because history happens. Occupy 3.0 can’t be the same as Occupy 2.0, because Occupy 2.0 happened.

The big differences….

People are simply not as angry or upset as they were in 2014. The economy is picking up. Rents aren’t totally crazy. It’s not great, but you don’t have the level of frustration that you had in 2014.

The Chief Executive is not that unpopular. One problem that the previous CE had was that the pro-establishment people never liked or trusted him, and when the pan-democrats turned against him, he had no one. The current CE has the very strong backing of the pro-establishment camp.

You have large segments of the Hong Kong population that were fed up with Occupy 2.0 and can be expected to be against Occupy 3.0. The particularly segment are working class blue-collar people, bus drivers, construction workers, taxi drivers, policemen. These people are people that would vote for Trump if they were in the US. The thing about this group of people is that they are doing economically quite well. During Occupy, this group of people were not mobilized until late in the day, whereas they provide “silent majority” support for the government.

The students are leaderless. Occupy 2.0 were lead by two student groups. Scholasticism under Joshua Wong and the HK Federation of Students. Neither group exists now, because after Occupy, they had vicious internal fights that lead to them collapsing. Also the extradition bill is not something that arouses a huge amount of passion on students. It’s a “please sign this petition to save the whales” as supposed to “I will stand in front of the tank.”

The people that tried to organize this set of protests are the pan-democrats. These are middle aged sensible people with kids, jobs and mortgages. The trouble with having middle aged sensible people leading a demonstration is that they very quickly lose control to “angry youth” that start throwing bottles and trying to storm Legco. A lot of motivation for “angry youth” is rebellion, but they aren’t going to take orders from the sensible pan-democrats any more than from Carrie Lam.

The police have a lot better tactics. The big one is that the police have discovered that smart phones exist. In 2014, the demonstrators were able to coordinate using smart phones and chat groups, and the police had no idea that they were there. This time the police were monitoring the chat groups. Encryption and secret chats don’t work, because the purpose of the group is to broadcast a message getting thousands of people to come to location X, and if you limit the people that read, you defeat the purpose. Also, in 2014, the police had static formations (and I suspect that this comes from the 1967 riots). This time they used the static locations as base areas, but they were willing to move forward. Also, you had tons of reporters following the police, which helps with the media war, and some of those reporters were very pro-police. In the meeting of a police action, it’s easy to get really graphic pictures, but if you have sympathetic reporters also taking pictures, you get them from a different angle.

Notes on the Hong Kong protests

Will be posting questions from quora.

Not being able to register for fintech/blockchain conferences because I do fintech/blockchain

OK. I have a reputation for being grumpy.  Let me explain why.

I’m trying to attend a blockchain conference (it actually doesn’t matter which one.)

Unfortunately, they only take eventbrite/paypal.  It turns out that I do not have a Hong Kong credit card, because all the banks canceled my personal accounts because I do bitcoin.  I do have a US bank account and debit card, but paypal can’t deal with the concept of a HK resident with a US bank account.

Also while I’m doing this, google realizes that I’m interested in fintech, so I get all these ads from banks talking about the stuff they are doing with fintech, and these happen to exactly the same banks that won’t open accounts for me.  It’s really annoying to get an ad, that makes you angry, and having no way of writing back “this ad makes me even more angry, so please stop sending them.”

So I’m spending two or three hours trying to get blockchain.  So when I start going to the conferences and dealing with VC’s and blockchain people, I’m often in a really bad mood.  Having people talk about the wonderful future sometime gets annoying when you talk about the annoying present.

Also the main goal of customer service in that situation is to “deflect anger.”  It turns out that I know why the systems are they way they are.  I can tell you how the payment systems work, so explaining the system doesn’t help.

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