Monthly Archives: July 2017

Guo for President in 2020

Author Gary Moreau

Taiwanese electronics giant Hon Hai Precision Industry Co., Ltd., commonly known as Foxconn, the manufacturer of all things Apple, recently announced that it would invest $10 billion to build a new manufacturing plant in Wisconsin. And, of course, President Trump, who at least saw fit to campaign in the state during his run for the presidency, immediately took credit. (In case you’re wondering, the plant will be built in Paul Ryan’s district. Imagine that.)

Wage costs in the US have long been blamed for the loss of manufacturing jobs here but that’s been a bit of a ruse all along. Corporations, with strong support from their friends in Washington, have long used that argument to cripple union organizing, push average wages down, and transfer retirement and health care costs back onto their employees.

As a former corporate executive and board member I assure you that companies don’t invest on the basis of labor costs. They invest on the basis of total cost. Those may be heavily influenced by labor costs, depending on the product or service, but not always. The cost of energy, capital, and transportation are often significant, particularly if the company is servicing the US market with a big, bulky product of modest value, and thus expensive to ship.

I, of course, was not privy to any of the discussions involved in Foxconn’s ultimate decision. I can say with the utmost confidence, however, that the company and its founder and chairman, Terry Guo, known as Guo Tai-ming in China, did not make it to please President Trump. At best, Mr. Guo knew that Trump would bring the company a lot of free publicity and that he would, without much prompting, twist the arms of American politicians in a position to offer lucrative tax incentives.

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And that they did. According to Wisconsin Governor Scott Walker the company was offered $3 billion in tax relief and other subsidies to seal the deal. That works out to about $1,000,000 for each of the 3,000 people that the factory will eventually employ, by its own estimates. (President Trump and Governor Walker will be quick to point out the investment will create 22,000 jobs indirectly through the multiplier effect, as economists refer to it. Fair enough. That’s still $136,000 per job.)

The relevant question, moreover, is not how much the politicians are spending per job, but how many good jobs could be created with a comparable investment in something else? And even if government spending is not a zero-sum game, as supply siders will argue, the pool of public incentives is not unlimited and is severely constrained in the short term. As a practical matter, that $3 billion is gone for now. It’s not available for things, dare I say it, like health care.

The idea that Foxconn is investing $10 billion, moreover, is more than a little misleading. Neither Terry Guo nor Foxconn is going to write a check for that much money. Most of that money will likely come from the US credit and equity markets. Foxconn will have to agree to pay back the money in some way, of course, but it’s a largely meaningless obligation, as we learned when Lehman Bros and AIG walked away from their role in the 2008 mortgage crisis thanks to the largess of US politicians spending taxpayer money.

Ten billion bucks is a lot of money. If amortized over twenty-five years, just paying it back works out to more than $3,000,000 per employee, or more than $130,000 per year per employee. Much of that investment, moreover, will likely go into robotics and other production and processing equipment. Some of those machines may be produced in the US but I suspect that Germany, Japan, and China itself will be the biggest beneficiaries. I have seen no media report that there was any domestic content restriction built into the deal by Trump or Walker.

If this were China, of course, the government investment would be considered in light of security, environmental, and other social considerations. Glass screens, I suspect President Xi Jinping would argue, don’t really serve any real military or environmental purpose. And while I enjoy my flat-screen tv as much as the next American, televisions aren’t quite as central to our way of life as, say, education is.

Even if you supported Trump’s decision to withdraw from the Paris Climate Agreement, moreover, this can’t be a particularly good deal for the American environment. Glass takes a lot of energy, most of which will undoubtedly come from fossil fuel. And the impact on the air, water, and soil, while it might be less in Wisconsin than many developing countries, won’t be zero.

One of the big attractions of manufacturing in the US is the low cost of energy. Natural gas is cheaper in the US that it is in any country on the planet, other than Kuwait, and, according to Boston Consulting Group, electricity costs in the US are 30% to 50% lower than elsewhere. That’s a good thing, of course, but if the utilities run out of sufficient capacity to provide electricity or the grids to support its transmission, we all know who will foot the bill for expansion. (Consumers in the US generally, by the way, pay a higher rate for electricity than companies do. In China it’s the other way around—industrial users pay more.)

The real irony of all of this, however, is the simple fact that of all the major industrialized nations in the world, the US is the only one that does not have a definitive national industrial policy. It has none. Nada. Zip. We have a lot of regulations, for sure, but they are a grab bag of onerous rules designed, more than anything else, to benefit the very industries they are intended to regulate.

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The proponents of US industrial non-policy argue that government policy conflicts with the invisible hand of free market capitalism that they attribute American greatness to. It’s a weak argument, however. Innovation and a remarkable work ethic put the US economy on the map, and both were driven, in large part, by immigration and education, the latter of which we can thank the Puritans for, truth be known.

The real cost of the industrial policy vacuum in the US, however, is that it allows politicians like Trump to make deals that serve their personal agenda but don’t serve the collective good on a planned and consistent, long-term basis. He gets the applause, but it is the people of Wisconsin who will be living with the plant, and the investment they made to get it there, a decade from now.

In fairness, the US does, in the end, actually have a national industrial policy of sorts. The US Tax Code is the single most powerful government force for social and economic engineering on the planet. The problem with it, and with the powerful permanent Washington bureaucracy that really runs the country, is that it is not democratic, not transparent, and makes no attempt to promote the common good. It is both designed and managed by the moneyed and political elite (a descriptive redundancy if ever there was one) for their own benefit.

My overriding disappointment in this whole affair, however, is not that Foxconn is investing here, that Wisconsin got the nod, or that Trump took a bow he really didn’t deserve. It is that Terry Guo is constitutionally ineligible to run for the US presidency in 2020. He is clearly the best dealmaker of the bunch.

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Forever a Foreigner

Author Gary Moreau

Dr. Daniel A. Bell, a Canadian-born Caucasian scholar who has lived and worked in China since 2004, speaks Mandarin, embraces Chinese culture, and is married to a Chinese woman, recently wrote a piece in the Wall Street Journal lamenting the fact that his Chinese friends and colleagues, despite all of these facts, do not consider him to be Chinese. In the eyes of the Chinese, he concludes, “… to be Chinese is to belong to a race.”

The over-riding point of the article is that China would benefit by embracing a leadership meritocracy without regard to ethnicity in all arenas, including politics, science, academia, business, and medicine. It’s a valid point, of course, that applies to virtually every country, including the US and Canada. And, as he insightfully notes, China has done just that at certain high points in its long and storied history.

It is his lament over remaining a foreigner in the eyes of the Chinese that appears to have received the most attention, however. And, not surprisingly, many commentators have taken him to task for confusing, in their opinion, race and ethnicity with identity. He might appreciate Chinese culture, they argue, but he can’t fully appreciate the historical Chinese identity because his own historical identity is one of white European privilege.

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Having lived and worked in China for almost a decade I understand Dr. Bell’s sense of eternal foreignness. I’ve written about it many times in this blog and in my books. I don’t, however, share his pain. I, too, have a Chinese wife and have a great appreciation for Chinese culture. In her eyes, however, she is married to a foreigner and that will be her perspective until the day she dies. To my Chinese friends I am likewise a friend, but a foreign friend nonetheless.

I am more than accepting of that reality—I actually applaud it—because I don’t believe the perspective has anything to do with race, ethnicity, OR identity. I think it comes down to the fundamental difference between Western and Eastern culture.

Western culture is based on a linear world view and the deductive logic that is at the heart of both science and monotheistic religion. More than anything else, Westerners believe in the linear and singular linkage of cause and effect, which is why a Westerner like Dr. Bell might lament non-assimilation. To our way of interpreting reality there has to be a reason for it, and in the case of cultural non-assimilation, it has to be a prejudicial one.

The same is true in reverse. There are many Americans who believe that foreign assimilation is the cornerstone of American greatness. If only the foreigners spoke our language and adopted our customs, their thinking goes. If only they were more like us everything would be fine.

The Chinese, quite simply, don’t have that perspective, but not for the reasons Dr. Bell suggests. They don’t understand the question. Their model of logic is much more circular. They do not put so much emphasis on the singular and direct linkage of cause and effect. I have a big Gallic nose and round eyes and was born in the US of Caucasian parents of French and Irish descent. Of course I am a foreigner. What else would I be?

The good news is that while a foreigner will always be a foreigner in the eyes of a Chinese person, that is a statement of reality, not a judgment of character or worth. It is no more pejorative than my observation that a dog is a dog.

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There have surely been Chinese over the course of history that held foreigners in low esteem. There are some still. I’m not sure that came from our facial features or our language and place of birth, however. The fact that a colonial foreign power flooded their country with opium in the 19th Century, and even went to war to insure a trade their own country had outlawed, or that foreigners have repeatedly invaded their country, pillaged their land, and treated their people in sub-human ways, surely has something to do with it.

Frankly, I would question my wife’s mental health if she started to refer to me as her Chinese husband or herself as my American wife. I certainly wouldn’t cheer it as a victory for American assimilation. American greatness is a mindset and a set of shared values. It is neither ethnicity nor identity.

We should classify people in the ways that really matter. The way you look, the color of your skin, and even your historical or cultural identity don’t really define who you are. Identity politics doesn’t promote identity issues in the end. It takes identity off the table of public discourse. The lines of identity are hardened, not erased.

There is much about American history, including slavery, Vietnam, the McCarthy hearings, Japanese internment, and many of our historical attitudes about race and gender, that I don’t identify with. That doesn’t make me any less American any more than my shared identity with much of Chinese culture makes me Chinese.

I hope my wife and Chinese friends never judge me by how I dress, or the language I speak, or even my admiration for China and its rich history. I would much rather be the foreigner with the big nose who is a person with strong personal values of integrity and compassion that they are proud to call friend and husband.

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Gary Moreau’s fictional novel written under the pen name of Avam Hale.

The Fallacy of the Obamacare Debate

Author Gary Moreau

You can’t get online in the US these days without being confronted with news about healthcare. I refer to it as news with an abundance of generosity, however, as there really isn’t anything to report. A lot of dust in the air. A lot of angst. And whichever side of the issue you come down on, a whole lot of misleading claims and predictions.

For the nine years that I lived in China I did so with what is not-so-fondly called a single-payer system. People who really hate the idea refer to it as “nationalized” health care, suggestive, as it is, of military troops storming the hospitals and doctor offices. It’s a visual that’s sure to get a rise out of voters in America, although the real irony is that it is American troops that do most of the storming around the world. (Not a judgment. Just an observation.)

During my nine years in China my family had health care emergencies and needs very typical to a family with young children. My daughters had concussions, athletic injuries, and the normal array of fevers and skin irritations. I had surgery within six months of my arrival, ultimately had a stroke, and had the normal barrage of tests, including a colonoscopy. I even spent some time with a Chinese psychiatrist born and raised there. (With some training at Harvard, mind you.)

I speak, in other words, from experience. And I can say, without hesitation, that the medical care I received while in China was very much on a par with the medical care I receive here in the US. There were a few differences, but none that compromised the quality of the care I received.

In my own experience I found Chinese doctors, for example, were generally cautious about prescribing drugs and focused more on lifestyle and personal habits of nutrition and exercise. My Chinese neurologist, on one occasion, told me that the American pharmaceutical company that made the drug she was prescribing for my cholesterol recommended an initial dose of 80 mg. She thought 10 mg was sufficient for most people, however, and suggested we start there. It made sense to me. And 10 mg did the trick, coupled with a couple of tweaks to diet and lifestyle.

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Critics will be quick to point out their perceived “gotcha,” of course. Yes, I went to a private hospital that many Chinese could not afford. They weren’t barred, however. Anyone could seek medical treatment there and many Chinese made that choice.

But therein lies the fallacy of the current health care debate in America. Critics of a one-payer solution, and Obamacare in general, always position their arguments in terms of choice and quality. Neither, however, has much of anything to do with the actual health care you receive. The only question is who is going to pay for it. And how much?

The Chinese do not get a free ride, contrary to popular perception. If they aren’t covered by the one-payer system funded by taxes on wages, they pay out of pocket. And pay they must – up front. Hospitals are under no obligation to treat anyone without the money to pay. And they won’t. At my own company, which operated its factory 24/7, we kept a cash box with enough money in it that the off-shift supervisors could take an injured employee to the hospital and pay for their care. The hospitals don’t give credit, even to US multi-national companies. (All patients ultimately pay for the cost of credit, of course, even in the US.)

There is no free lunch in life. To the extent the government covers the cost of health care the taxpayers ultimately have to pick up the tab. If they don’t pay it directly through taxes (e.g., the Medicare tax in the US), they pay it through the cost of the goods and services they purchase, or the government allows them to kick the burden down the road to future generations. However you disguise the cost, however, the citizens pay it in the end. The capitalists pay it to the same extent the socialists do. It’s just less transparent in the “free market” universe.

That’s why it strikes me as a bit ironic that there is so much venom directed at Obamacare’s boldest feature—mandatory participation.

The whole purpose of insurance is to spread the cost of major unpredictable costs over a large pool to minimize the potential impact on those who suffer such a loss. If your house burned down, for example, you probably couldn’t afford to replace it, unless you’re a one-percenter. You buy fire insurance, as a result, so if you do suffer the loss of your home the insurance company steps in and you don’t have to live in the street. If nobody bought fire insurance until their house actually burned down, however, there would be no need for fire insurance. Having insurance would be the same as not having it.

And, by the way, you don’t really have the right to opt-out of buying fire insurance. If you borrow money to buy the house, which most people are forced to do, the bank will demand it. They may even buy it directly and just charge you a monthly escrow fee. Even renting doesn’t get you out of the obligation. You just pay the cost of the fire insurance in your monthly rent. The bank isn’t the government, but it is empowered to charge you by the government. Either way, you have no choice.

When it comes to insurance, moreover, mandatory participation is already a fact of life here in the US on a few fronts. All but a few states make automotive liability insurance mandatory. You can’t register a car without it. There are no exceptions, short of breaking the law. Even those states that don’t mandate insurance do mandate some form of bond or impose a tax to cover the exposure.

I’m sure it’s true that the wealthy pay more for their car insurance. They probably take out better coverage and tend to drive more expensive cars. The mandatory cost of the right to own an automobile in the US, nonetheless, is still highly regressive in the same way that the sales tax is. In terms of impact, the poor pay more for the right to drive and shop.

The real issue, when it comes to healthcare, is not who pays, but how much it costs. And in the US our medical care costs more than it does anywhere else on the planet, however you measure it. And that is not just so that you can have access to better-educated doctors. My doctors in China, all Chinese, were often trained at the same universities that your local doctor was.

There are differences, however, that do ultimately impact the cost of the healthcare we receive. The biggest difference in the cost of healthcare in the US and elsewhere is the cost of healthcare administration here in the US.

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Private sector competition is supposed to drive down costs. And it probably does, when all else is equal. It isn’t. What differentiates the American healthcare system from all others is the amount of government oversight and regulation that already exists, even in the absence of a single-payer insurance system.

That regulation is not all bad. Life is full of dichotomies. What’s good is almost always not so good when viewed from a different perspective or in different circumstances. The FDA regulatory process for the approval of new drugs, for example, exists to protect consumers. The FDA is charged with the responsibility to insure that new drugs are safe and effective. And that’s a good thing. The downside is that the lengthy approval process is built into the cost of the drug once it is finally approved, drugs aren’t developed for people who need them for a disease that is not common enough to warrant the investment, or, in the case of a new life threatening disease, the afflicted may not survive long enough for the drug to get approved.

The same thing happens when states decide to license the professions. They do it in the name of consumer protection, of course, but the practical effect is to drive down competition and drive up costs. And, of course, the states make a lot of money from licensing. Most states, as a result, license every professional from brain surgeons to barbers. In my own state of Michigan barbers must receive (and pay for) 2,000 hours of training at an “accredited” school, a requirement I am sure the accredited schools pushed for and which ultimately gets passed on in the cost of a haircut.

And, of course, the government regulates the services that those professionals provide. It is very common in China, for example, even in the most prestigious private hospitals, for nurses to perform many of the common tasks reserved exclusively for highly trained doctors in the US. But the nurses don’t empty bedpans. Your family can do that for you. Or you can hire someone at a fraction of what you would ultimately pay a nurse who has to pay for his or her education to do it.

I could talk about the impact the lawyers and their litigious clients have on the cost of US healthcare, of course. Perhaps another day.

It is ironic, though, how much we talk about choice and transparency here in the US. In the end we have far less of both than our politicians and their lobbyists and issue activists like to tell us we have. Most of it is just talk in the end. It’s loud, for sure, but it’s neither transparent nor factual much of the time.

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Gary Moreau’s fictional novel written under the pen name of Avam Hale.

The US or China? The Latest Pew Survey Might Surprise You

Author Gary Moreau

According to data released by the World Bank, China’s economy is now three times the size of Germany’s, more than twice the size of Japan’s, and nearly five times the size of India’s. The US economy, however, the world’s largest, remains 65% bigger than that of the Middle Kingdom.

That’s not, however, what a surprising number of the citizens of America’s top allies believe. According to a recent Pew Research poll across 38 countries, a majority of the citizens in seven out of ten West European countries, including Germany, the UK, and France, believe that China is now the world’s leading economic power. Only one-in-four Germans picked the US for economic leadership. Even our cousins to the north—the Canadians—chose China over the US. And the residents of Australia picked China by a two-to-one margin.

What gives? In addition to being allies, these are some of the most educated and informed citizens on the planet?

Publicity, of course, plays a big role. China has gotten a lot of favorable press of late, most recently in terms of its leadership in the arena of climate change following the president’s decision to withdraw from the Paris Climate Agreement. And China came up frequently during the 2016 presidential campaign, often serving as the bogeyman for the “America First” rally cry that put Trump in the White House.

Publicity is publicity. As showman extraordinaire, P.T. Barnum, is credited with saying, “I don’t care what the newspapers say about me as long as they spell my name right.”

With all of that publicity, and all of the anxious handwringing about China’s emergence as a global leader, in fact, it is a bit ironic that a majority of US citizens picked the US in Pew’s survey. Forty-five percent, however, didn’t, yet another example of the divide plaguing the US at the moment. China got the nod for economic leadership among 35% of Americans and 10% picked Japan or the EU in equal proportion.

I’m not sure anyone can explain these results. One of the laws of the universe that I have come to accept as both universal and infallible, however, is the law of unintended consequence. Things seldom go as planned. For every action there is a reaction, to paraphrase Newton; but as often as not it is not the one anticipated or intended.

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During the time of British colonial rule of India, the British government, a popular anecdote goes, became alarmed at the growing population of venomous cobra snakes in Delhi. A bounty was offered for dead snakes and, at first, the population of cobras appeared to decline. Eventually, however, people began to breed the snakes for the income they could receive from killing them. The government ultimately realized what was happening and discontinued the bounty program. At which time the breeders simply released their now-worthless snakes, greatly increasing the threat that was the original target.

That’s just one of thousands of examples of unintended consequence, of course. Be careful what you wish for, my mother used to say; you’ll probably get it. That’s certainly been my experience.

I have to admit, therefore, that I find one of the great ironies of the Pew survey to be that many of the countries that chose China over the US are thought to be served by the most independent and trustworthy media in the world—the Western media.

At one level that seems quite counter-intuitive, of course. One can easily rationalize that a free press—the Fourth and Fifth Estates, as some define them—is the cornerstone of an informed society. The media makes that case on a daily basis. And it’s a pretty sound case, for sure.

There are, however, two sides of every coin.

It was Canadian scholar, Marshall McLuhan (1911-80), who said, “The medium is the message.” Contrary to popular misconception, however, McLuhan was not referring to the media as we think of it today. He defined a medium as an extension of ourselves and noted that once new technology became commonplace it is generally true that the impact is both good and bad. The automobile, for example, is an extension of our feet. And it has provided great benefits in terms of travel and convenience, but it has also given us air and noise pollution, traffic fatalities, and contributed to an increasingly overweight population.

Life is full of dichotomies. Understanding that duality is the key to understanding most things, including China and business, as I have argued in the first two volumes of the Understanding series of books I authored. (Both are available on Amazon and the third volume, Understanding Life, will be out soon.)

The Russians got it wrong, by the way, although Russia is not generally known for its media independence. Perhaps that’s just another dichotomy. While an independent media has the freedom to sell its agenda to the citizenry of Western Europe, the Russian media does not. The result, nonetheless, is the same—six of one, half dozen of the other.

The Mexicans did pick the US, as you might expect—or not. Colombians got it right, too, although it might be interesting to get their take on what powers the US economy.

The country that picked the US most often was South Korea, followed by Japan and Israel, all key allies of the US. And Vietnam and Hungary picked the US with the same frequency as Americans did.

Who knows what it all means. Perception is everything, however, and in that regard China’s stock is certainly rising. Or is America’s falling? You’ll have to decide that for yourself, but it would appear that some of America’s strongest allies, at least, have their doubts.

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Another excerpt from Understanding Business, now available at Amazon in paper and Kindle formats (direct links provided below):


With our blind obsession with process, it should be no surprise to any business leader that many customers consider the entities from which they purchase goods and services to be inflexible and insensitive to the customer’s needs. The employees, taught in much the same way that Pavlov taught his dogs, are stuck in the middle. Many inevitably fall back on process—the established policies—as a way to impersonalize the angst of the customer and defuse a negative situation. Of course, it seldom works.

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Certainty: Poison Arrows & Weasel News

Author Gary Moreau

My two daughters, a freshman and junior in high school, spent some time with me over the July 4th holiday. Among many other activities we spent a day at the Detroit Zoo, where we sat down to a basket of chicken fingers in the shadow of the Polar Bear exhibit. (The Polar bears, unfortunately, were all asleep in their caves and nowhere to be seen.)

We were reminiscing about the house we had lived in at the time of their birth and, quite randomly, the conversation turned to feng shui, the Chinese philosophical system of harmonizing our physical surroundings with the invisible forces of qi that many Eastern cultures believe binds the universe and everything in it.

Feng shui is closely related to Taoism and has millions of followers worldwide, including the US, where you can hire feng shui consultants to help you choose and decorate a new home in places like California and New York. I am not a disciple. After living on this earth for more than six decades, however, one of them among the Chinese, there are few belief systems I dismiss out of hand.

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I noted, as a result, with no intention of defending the idea, that our previous family home had very bad feng shui because it was located at the tip of a poison arrow—it sat atop a “T” in the road it fronted. While feng shui had little to do with our choices in landscaping the property, I playfully joked that we had planted a large tree in front of our front door to dissipate the negative energy before it could enter the house.

While I thought the conversation was all in good fun, however, my daughters immediately jumped to judgment. “How can you believe in such nonsense?” my eldest daughter asked with obvious incredulity. “The blood of a tree is sap, which is water filled with nutrients and minerals, not some mystical force that can’t even be seen with a microscope.”

Fair enough. But I am a card-carrying contrarian and my own sap is filled with curiosity. I was intrigued and decided to pursue the conversation. “Why,” I asked, “do you dismiss something simply because you can’t see it or touch it? Wouldn’t science itself suggest neutrality? The existence of qi, after all, has not been disproved, and there is no logical reason that nutrients and qi can’t co-exist.”

You’ve already heard the rest of the conversation I’m sure. This proved to be just one of many discussions in which my daughters—already my oratorical equals—took exception with my reservations about one-dimensional notions of cause and effect. The best I could hope for in any of these debates was an exasperated draw. I seldom moved the needle into the zone of doubt, much less acceptance of alternative interpretations of commonly held Western beliefs.

In the end, to be honest, I actually agreed with most of the positions they took. I am a bona fide Westerner. I was quite unnerved, however, by the certainty with which they took them.

Many of my readers will quickly dismiss all of this as merely another example of the challenge of living with teenagers who are constantly testing the boundaries of their knowledge and identity. If not a false parenting rationalization, however, it is a dangerous one. When we start stifling curiosity and fortifying the mind against healthy doubt, we sow the seeds of social and personal stagnation, if not destruction.

But isn’t that what we—the adults of the world—are currently doing? Are we teaching our children anything quite as consistently and fervently as we are teaching them by our example to be certain in their beliefs?

As I write this world leaders are wrapping up the G20 summit in Hamburg, Germany. And despite my earnest attempts to stay abreast of developments at this very important gathering, I know virtually nothing about what really transpired. Nearly all of the “reporting” I read from both sides of the political divide could easily have been written well in advance.

The problem with certainty, of course, is the problem with any myopia. You may be right or you may be wrong. Certainty, however, makes it certain that you will never know. Understanding, like knowledge itself, is a continuum, not a destination.

Certainty is a noun. And it is self-fulfilling. Once we believe something with certainty everything we observe tends to reinforce that certainty because we inevitably filter all observation and thought in the interest of efficiency. We see and hear, in the most literal sense, exactly what we expect to. Our certainty, as a result, fossilizes.

Certainty, in fact, is the breeding ground of the contemporary notion of “fake news” that is so hotly debated in the US political arena these days. Fake news may or may not be factual in any literal or narrowly defined sense. It is inevitably misleading, however. It’s weasel news.

“Weasel words” is a term coined by author Steward Chaplin in 1900, and popularized by Theodore Roosevelt. They are the words and phrases that suck the meaning out of claims, much like the weasel sucks out the meat of the egg while leaving the shell intact. By compromising the context within which a claim is made, they provide cover for those who wish to mislead or misinform without being blatant about it.

In the context of news, words like “many”, “few”, “might”, and “suggest”, are typical weasel words; suggestive but not dimensional. “Many experts,” for example, is somewhere between a handful and a boat full.

Politicians and the news media use weasel words all the time to make things that aren’t supported by fact sound like they are. In the narrowest sense, the words are factual. The intent, however, is far from neutral.

Weasel news typically employs weasel words but is slightly broader in context. Typically honest words can become dishonest when used in a certain order that may not violate the formal rules of language but compromises clarity and camouflages subjective innuendo.

When reporters noted that violent protestors greeted Trump’s first G20 meeting, you might assume that the protestors were there because of their anger toward the US President alone. That, of course, may or may not have been the case in any verifiable scientific sense. If challenged on the implication, however, the newscaster can claim that the observable violent protests took place at a meeting that was, indeed, Trump’s first.

Confidence, of course, can be a good thing. Every parent wants to build confidence in his or her children. Confidence gives us the strength to do the right thing in the face of choice. And it contributes to the efficiency of our actions and behaviors, allowing us to do the right thing more often.

Life is a dichotomy, however, and the state of certainty is no exception. Certainty is also an essential element of hate, racism, and ignorance. It is a medium, used consciously or not, for disinformation since we all know from experience that the presence of certainty itself enhances our willingness to fall for undocumented innuendo.

Both the members of the G20 (Referred to as the G19 by one news outlet, in yet another example of “fake” but technically defensible reporting.) and my daughters are all back home now. And while I have no opinion about what progress may or may not have been made at the G20, I am saddened that my daughters do not greet me in the morning, at least until their next visit.

Whether or not my daughters ever accept the existence of poison arrows, I love them dearly. Of that I am certain. And flipping the dichotomy of certainty once again, genuine love is the best kind of news there is.

Contact: You may reach the author at

Another sample from the author’s latest book, Understanding Business: The Logic of Balance, available at Amazon in paperback and Kindle formats.

So, while it is true that a company must actively manage its employees in the interest of performance, it is equally true that dehumanizing employees to the extent that relationships and connections are inhibited is counterproductive. Some balance between the recognition of our individual humanity and the need for collective performance must be struck.

Hong Kong: 20 Years On

Author Gary Moreau

July 1, 2017 marked the 20th anniversary of the return of Hong Kong and the surrounding islands known as the New Territories to Chinese control. President Xi Jinping himself, in the company of his wildly popular wife, Peng Liyuan, spoke at the commemoration ceremony during his first state visit to the autonomous region.

There was little to no rancor in the streets, as some Western media predicted, and perhaps hoped, there would be. It would appear that the Umbrella Movement of 2014 has lost much of its momentum, although there was a modest march for diverse causes—some having nothing to do with democracy—after Xi’s departure.

Many Western commentators, of course, continue to believe that the passion for American-style democracy runs deep in Hong Kong and that any reduction in crowd size was more a function of government oppression than a loss of enthusiasm. As one CNN contributor put it, Xi’s speech “shows just how deeply Beijing misunderstands Hong Kong.”

As I have maintained in prior posts, I continue to believe that any dissatisfaction with Chinese rule in Hong Kong is more likely to be economic and social than political. Just as many Americans have taken to the streets to voice their dissatisfaction with Washington, I have no doubt that there are some, if not a material many, whatever that means, who would like Hong Kong to enjoy more political autonomy.

Understanding China is available at Amazon in paper and electronic formats.

Political desire, however, more often than not, fails to recognize the dichotomy of our existence. Politics is but one thread in a multi-dimensional tapestry. Citizens around the globe inevitably want to eat their cake and have it too when it comes to politics, which is one of the reasons that politicians the world over are so universally unpopular with the citizens they dole the cake out to.

As is often the case where news is concerned today, moreover, any assessment of the pro-democracy sentiment in Hong Kong is conjecture in the end. Opinions may be supported by personal observations, but observations are greatly influenced by perspective and are conclusive only in a very relative sense. As always, I think it more informative to dig into the context in which current events are unfolding.

Hong Kong was incorporated into China during the Qin dynasty (221-206 BC), where it remained until the Treaty of Nanking (August 29, 1842) ceded control to Britain, marking the end of the First Opium War (FOW).

The FOW was fought over Britain’s right to sell opium to Chinese citizens, a trade that provided the British with precious silver that they needed to fund trade with India. Recognizing the negative social impact of opium addiction, the Qin rulers attempted to outlaw the use of opium in China, a move the British monarchy had already taken in the UK. Fearing the loss of its primary supply of silver, the British invaded, and ultimately won. And with the military victory came the spoils of war, allowing the UK to add Hong Kong to the colonial holdings of the British Empire.

Tensions with China never really went away, however, and the British were constantly worried that China would re-take that which had been taken from them. In 1898, therefore, at the Second Convention of Peking (the former name of Beijing), the British secured a 99-year lease on the New Territories that made up the border between Hong Kong, Kowloon, and the mainland.

That, of course, was the lease that expired in 1997, at which time Prime Minister Margaret Thatcher decided to return the entire colony, including Hong Kong and Kowloon, the two islands at the heart of what most Westerners know as Hong Kong.

The economic integration of Hong Kong and the mainland, however, was already well underway. The Bank of China Tower, the Hong Kong headquarters of the Beijing-based and state-owned financial powerhouse that has symbolically and literally dominated the Hong Kong skyline ever since, was finished in 1989, nearly a decade before the handover. It was built, in large part, to facilitate the economic integration of Hong Kong and the mainland that was already well underway.

I traveled to Hong Kong during the Bank of China Tower construction as my employer at the time sourced a lot of products there. And at that time Hong Kong was very much a manufacturing center of Asia, although the transition to becoming a global financial and trade powerhouse had begun. Hong Kong companies were already moving their production to the New Territories and to the mainland province of Guangdong, Hong Kong’s immediate neighbor and the most prosperous of China’s twenty-two provinces.

At the dawn of China’s political and economic opening in the late 1980s I was actually granted permission to travel into Mainland China. The trip was arranged by the owner of a Hong Kong supplier and my host was a Communist Party official in GuangZhou, then called Canton. The two men were brothers, a relatively common business scenario at the time, from what I could tell.

Today Hong Kong is a glittering world-class city. It’s one of my personal favorites and I highly recommend a visit if you haven’t made it yet. You can expect London and New York prices, but it’s delightfully easy to get around, the accommodations and restaurants are both plentiful and outstanding, and nearly everyone speaks some English, many fluently. (With a British accent, in most cases.)

Almost nothing is manufactured in Hong Kong anymore. It does, however, export 55 billion USD to the Chinese mainland, almost all of it imported from outside of China. And it imports 273 billion USD from China , most of which gets exported to destinations around the world.

Guangdong Province, Hong Kong’s neighbor whose residents typically speak Cantonese, the Chinese dialect of Hong Kong, has an annual GDP of 1.1 trillion USD, more than 10% of China’s total. Hong Kong, while wildly prosperous, has an annual GDP of less than 1/3 of that, and most of that is a result of the aforementioned trade with the mainland.

And what about the social costs to the residents of Hong Kong’s 7 million residents? One of the critiques I recently read noted, in a rather critical tone, that an influx of non-HK-Chinese is making it harder for Hong Kongers to gain access to health care and education.

There is little doubt that mainland Chinese are seeking access to the world-class services offered in Hong Kong. But accessing the services of a neighboring metropolis is universal. New York City, Chicago, London, and Sydney all experience the same enhanced demand for what services they offer from surrounding areas. The only difference is that these urban centers have had more time to accommodate the demand.

The same opportunity, moreover, is benefiting the Hong Kongese. For the 9 years I lived in Beijing my daughters attended one of the best international schools in the world. And over that nine-year period the student population became increasingly Asian in its roots. And guess what, many of those students were from Hong Kong.

The city of Shenzhen, a metropolis of 11 million people that many consider to be the Silicon Valley of China, sits less than 25 miles away from Hong Kong in Guangdong Province. That’s closer than New Rochelle, in Westchester County, is to New York City. It’s hard not to think of both as part of the greater metropolis, boundaries aside.

Governing is tricky business, as Americans know well. There will always be political dissent in places like Hong Kong, just as there is in virtually any country in the world. And the Western media, no doubt, will continue to give it a voice. Whether that’s news or the cloaked pursuit of its own political agenda is for each of us to decide.

As a practical matter, however, it is no more likely that Hong Kong will be granted complete political independence from China than Houston or San Francisco will be allowed complete autonomy from Washington. Or that a sufficient number of Hong Kongese will even want it to.

Setting all of our opinions aside, that is the context of the matter at the moment.

Contact: You may write the author at

Understanding Business: The Logic of Balance, the author’s latest book, was released on June 27, 2017 and is now available at Amazon.

A sample:

It is, in fact, the Western distinction between philosophy and science, a gulf that has been expanding rapidly in the last three to four decades, that is at the heart of what ails much of corporate America today. The slide began the minute someone suggested that there could be such a thing as management science. When business schools and management consultants began to market the idea that successful business management could be modeled and graphed, corporate America lost more than its old habits. It lost its equilibrium. And with that, the long stumble began

Copyright © 2017 Gary Moreau