Tag Archives: Trump

Noblesse Obligee


Author Gary Moreau, aka Avam Hale in fiction

I am an avid reader of books. Perhaps it was all of that time I spent on an airplane over the years (well over one million miles). Perhaps it was my preference for solitude and the stimulation of my own thoughts. It doesn’t matter. I read a lot and have begun to share my thoughts on the many books I read via Amazon and Goodreads. (I am currently an Amazon Top 500 reviewer.)

There have been a rash of books, of late, regarding the economic, political, and social malaise engulfing the western world. The best among them, in my opinion, is Can Democracy Survive Global Capitalism? by Robert Kuttner, cofounder and coeditor of The American Prospect magazine, and a professor at Brandeis University. I can’t recommend the book highly enough. I’ve posted reviews on Amazon and Goodreads if you are interested.

Many contemporary books have resurrected the term “Fascism,” and drawn fearful parallels between the state of the world today and Europe in the period leading up to World War II. The most direct linkage is provided by former Secretary of State Madeleine Albright, in her book, Fascism: A Warning.

Kuttner has little to say about China directly but Albright and the others, too numerous to mention, do. And the core of their assessment appears to be that because the Chinese people do not go to the polls to elect their president in the way that Americans do, and because the government will figuratively silence political dissidents that it deems will disrupt social security and harmony, China must be “evil” in the same sense that Mussolini and Hitler were.

It is, I believe, a tragic and unfortunate misinterpretation of world events that is empowered by the western media’s own fascist pre-occupation with being able to say whatever it wants to say, true or not, and without regard for overall social harmony, which is the only time that productive change can actually take root.

I have long believed that one of the most important hallmarks of being an American is respect for authenticity. My father referred to it as “a man that is comfortable in his own skin.” To me it means a man or woman who speaks and behaves in a way that accurately reflects the person they are and the things that they believe in. And, of course, that he or she believes in the dignity of all people, regardless of wealth, class, race, gender, ethnicity, or ability.

The Chinese, I believe, are very authentic—once you understand their culture. If you evaluate Chinese behavior through American eyes you will, as many Americans do, conclude that the Chinese are a bit rude, don’t always tell the truth, and can be more than a bit pushy. These, however, are false impressions created by the American tendency to evaluate the world against our own standards. That is American culture and it is built on the Aristotelian belief in the linear logic of cause and effect.

What I like about Mr. Kuttner’s book, and believe me that he has not read or authorized this reference, is that he seems to appreciate that cause is less important than effect. Politically speaking, that means that a benevolent dictator that genuinely believes in the dignity of the common man is far superior than a man who is democratically elected (both Mussolini and Hitler were) but who, in his heart, believes himself superior to all others.

I grew up living only miles from a US nuclear air base that was the point of the spear of America’s “mutually assured destruction” (MAD) strategy in the Cold War with the USSR. As an elementary school student in the early 1960s I vividly remember practicing hiding under our desks at school, hands behind our heads, to prepare for possible nuclear annihilation by the Russians. (The kindergarten students, as I recall, were not disciplined enough to follow the protocol, so they all huddled beneath a large blanket.)

John F. Kennedy was the president of the US at the time and my parents trusted him. He was a lot of things that misaligned with their personal values, but they believed that he was a good man, so when he told them to sit tight during the Cuban Missile Crisis, they did just that. They talked about it; they asked questions; but they ultimately believed that Mr. Kennedy would do the right thing.


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First introduced in Homer’s Iliad, and later given prominence by the great French writer, Honoré de Balzac, the phrase noblesse obligee comes to mind. Essentially, whatever your personal pedigree, we all should have an innate commitment to our common humanity. And it is that commitment that ultimately matters in our assessment of our leaders. They may have gained power by the ballot box or the sword (and there is little difference, in the end), but it is what they do with that power that ultimately matters most.

In evaluating both China and the US, at the moment, I care not how wealthy President Trump is. I care not about his negotiating skills. I care not about what he says to the cheering crowds he assembles among the disenfranchised. I care only what he does or does not do.

In the case of Chairman Xi Jinping, I feel the same. I care not that he is a member of the Communist Party of China, the word communist itself bringing back terrible memories of the Soviet leaders who my teachers convinced me were anxious to take my life. I care not that his government does not allow full freedom of the press to say whatever it wishes. I care not that he employs whatever means necessary to maintain social harmony. I care, in the end, only about what he does and the degree to which he is authentic and committed to the common men and women of China.

And while we are in the early innings of a very long game on both sides of the Pacific, here is my tally to date:

USA: President Trump is authentic, but authentic in all of the wrong ways for a leader of the strongest nation on the planet. He is a corporatist in populist clothing. In the end he has only a romantic appreciation of the working men and women who made America what it is today. He is a New York elitist with an insatiable appetite for gold and limousines.

China: President Xi Jinping is not a Maoist but he is true to Mao’s original guiding light. Mr. Xi is not his father, but he is true to his authenticity. Mr. Xi, himself, is authentic. He truly believes in the Chinese Dream he talks so much about and has the personal and managerial skills to bring it to life.

If we evaluate a country and a culture not by the press’ ability to print anything it likes in the interest of selling its wares, but by the alignment of the government and the interests of the common person, China gets my nod.

I will share one specific example but there are many more:

While living in China my wife and I ventured down into one of the most popular walking streets in the heart of Beijing one Sunday afternoon to observe the throngs and to enjoy a taste of barbecue. In the middle of this very crowded street was an elderly couple from some far flung rural province that had ventured to Beijing to air some personal grievance with the local government where they lived. Both wore large sandwich boards and paper hats detailing these grievances.

Before long, the police, naturally, showed up. None of them, so far as I could tell, however, were armed. They wore no helmets and carried no shields or batons. The most senior among them, judging by his age, approached the couple and spoke to them in terms I did not understand, but his hands were clasped lightly behind his back the entire time. Nothing about the authorities was menacing in any way.

Eventually the police officer, a federal security officer to be precise, stood back and the couple was allowed to walk in a circle for several minutes. Everyone in China has a smart phone, of course, so the audience was large and many were filming the events. And after several minutes the couple walked toward the nearby police van and climbed in, with the policemen and policewomen’s deference and assistance.

My point here is not to fawn over President Xi Jinping, or to suggest that China does not have its challenges. It is, quite simply, to suggest that the ultimate democratic ideal is a commitment to truth and authenticity. And in that regard, the United States, in 2018, should stand in judgment of few others, and China is not among them.

He may ultimately prove me wrong. At the moment, however, Xi Jinping would have my vote, should China be so foolish, which it won’t, to give me one.

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My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

Corpocracy & the Trade War


Author Gary Moreau, aka Avam Hale in fiction

Lost in all of the furor over the trade war with China is a critical social and business distinction between the two countries. The US operates on a system that presumes the supremacy of the individual. China, on the other hand, operates on a system that presumes the supremacy of geography and ethnicity.

The best example of the difference is the way in which the two countries dole out citizenship to newborns. In the US, if you have a baby on US soil, whether or not the parents are US citizens, or even here legally, the baby has the rights to US citizenship. While that may seem to suggest geography trumps lineage, it reflects the supremacy of the individual’s rights; in this case the baby’s.

In China, on the other hand, it is the ethnicity of the mother that drives the baby’s rights. A baby born in Beijing to a foreign mother has no rights to Chinese citizenship. A baby born to a Chinese mother in Houston, on the other hand, does have rights to Chinese citizenship.

To understand the business implications you must appreciate that under US law, a corporation is a person. They hold all of the rights, save voting, of every US citizen. As a result, they have the right to free speech and they can own property, like intellectual property, in the same way an individual can.

There are many implications of this. The first is the fact that the US taxes the corporation, not its location. It’s far more complicated than I want to get into here, but suffice it to say that the US is one of only a handful of countries that has historically taxed the worldwide income of its corporations. Those corporations could defer that tax, however, which is why so many companies were holding large amounts of cash overseas. The 2017 Tax Reform Act provided for a one-time exclusion in order to encourage companies to bring that cash to the US, and it introduced a hybrid territorial tax system, but the basic idea of treating the corporation as a person remains intact. (They are distinguished from individuals in terms of the tax rates they pay, however.)

China, on the other hand, does not treat its corporations as individuals and regulates them, instead, based on their geography. To the extent that a corporation is doing business in China, be it a foreign company or a domestic one, it will fall under Chinese regulations.

The best example is the way China treats the Internet. Foreign technology companies, including the Silicon Valley tech giants, are not allowed to just reach into the market of Chinese Internet users without being subject to Chinese Internet regulations. And there are regulations in place to require that foreign companies operating in China keep their local data on local servers (in the interest of national security) rather than on servers at the company headquarters in Chicago or Palo Alto.

The basic perspective is that China belongs to the Chinese people. If you, as a foreign company, want to make money off of the Chinese people, that comes with certain obligations. And one of those obligations is to pay taxes that benefit the people you are making money from.

American multi-nationals often charge their foreign subsidiaries enormous fees for what is characterized as corporate support from the home office. This can take many forms—from accounting to engineering—but is generally based on the perspective of the US corporate parent that “I own you” and I can, therefore, do what I want with the money you make in China. “Not so fast,” say the Chinese, however. Before we will allow the Chinese company to pay those fees we want to make sure that those services are really provided and were, in fact, truly necessary. The reality is that many of those fees are for the provision of services that could easily be provided within China at much, much lower rates. (Which would mean more Chinese taxes to benefit the Chinese people.)

The bigger impact of this distinction has to do with all of the fuss you are hearing from President Trump and others about intellectual property. If an American company develops new technology at a research center in China, it believes that it owns that technology. And that’s a perfectly logical position for a corporation to take if you believe that corporations are people and that the US parent company “owns” the Chinese subsidiary.


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That’s not so logical, however, if you have a more collectivist perspective. If new ideas are created by Chinese nationals working in China, in the collectivist view, those ideas should benefit the Chinese people. After all, those inventors benefit from their rights as members of the Chinese community. They go to Chinese-funded schools, drive on Chinese roads, enjoy the fruits of Chinese farmers, and the benefits of community funded police and fire protection.

Which is why there is so much fuss over the sharing of technology between US multi-nationals and their Chinese joint venture partners. (In certain strategic industries that the Chinese consider critical to the interests of the Chinese people, foreign companies must have a minority Chinese partner for their Chinese business.) The word “forced”, however, which Trump is tweeting regularly, is, in my experience, a gross exaggeration. It is nonetheless true that China does not want foreign companies manufacturing there to install antiquated production technology for purposes of skimming profits off of the Chinese economy. And it is true that this technology will eventually leak out, much as it did here in the US back when we were a manufacturing country.

For GM, for example, China is now its single biggest market, and it makes a lot of money there. And it has a minority Chinese joint venture partner. And while I know nothing privileged about the inner workings of GM, I’m sure that they deploy their latest production technology there. Otherwise, they could not compete, the Chinese government would not have allowed China to become GM’s largest market, and after all, it is their largest market. And I’m equally sure GM is concerned about the rising Chinese automakers having access to their technology.

But that is the same concern they have here in Detroit. All of the Big Three automakers use essentially the same supplier base, frequently trade employees, and back engineer each other’s products extensively. Can you tell the difference between a Ford and a Chevrolet at first glance? Why should it be any different for a Chinese automaker? If anyone has a legitimate beef about design and technology leakage it’s probably the Germans—and the culprit is the US, not China.


Named to the List of Best Books of 2017 by Kirkus Reviews (starred review)
“A deeply thoughtful book about business management today and the nature of thought itself.”

As a related aside, the Chinese brand of collectivist thinking tends to infuriate US companies who are accustomed to assuming all of the rights of citizenship. They don’t like being told what to do or how to think. And that arrogance, in turn, has not ingratiated the US corporate community to Beijing. And it is that conceptual friction that is, in the end, contributing greatly to a lot of the US corporate angst toward China that Trump is currently tweeting on behalf of.

Make no mistake, however; the current perspective of US multi-national corporations is NOT “the American way.” This is a very recent development in the US, coinciding with the ongoing incorporation of America. At the time of the Founding Fathers, there were no multi-national corporations and corporations did not enjoy the rights of corporate personhood. Corporations were licensed for very specific purposes, such as building a canal, for a very specific and limited period of time.

As recently as 1900 the average factory in the US employed fewer than ten people, the economy was very localized, and the role of corporations in American life was largely limited to providing employment and supporting the local community. It is only in the latter half of the 20th Century that US corporations were able to achieve the scale and the power they have today. (And from a corporate insider let me assure you that US corporate power today is far greater than you fear.)

The US government, to be fair, resisted the incorporation of America until the rise of the conservative movement in the 1980s. They did it largely through antitrust regulation that promoted healthy competition and protected American consumers and citizens from the dangers of corporate monopolies and oligopolies.

The corporations, aided greatly by the banks and Wall Street, however,  ultimately won, and it wasn’t a fair fight. The politicians, after all, have no power if they can’t get elected, and in order to do that they need money. And since the courts ultimately eliminated any restriction on corporate involvement in politics, it’s no surprise that the deepest pockets ultimately took control of the American political process.

As a result, the US is no longer a democracy; it is a “corpocracy.” Conceptually, the American corporation now plays the same role that the church did in Medieval Europe. The kings may wear the crowns, but it is the corporate “popes” that are really calling the shots.

The incorporation accelerated greatly during the dot-com 90s when young entrepreneurs were preaching disruption and libertarianism. It is ironic, indeed, that this “common man” perspective has now produced among the biggest and most powerful corporations the world has ever known. And they pulled it off, quite impressively, while the anti-trust regulators stood by and watched. (Why would they complain, the politicians were benefiting as much as the entrepreneurs.)

Although Trump is a willing water carrier for American corporate interests, the American corpocracy is ultimately unsustainable. It will implode and the Trump revolution, ironically, is ample evidence that the implosion is already underway. (One of the many contradictions of the Trump era and the man himself.)

Perhaps the ultimate twist of history, however, is that Trump would never have been elected, and the trade war with China would never have been necessary, if the US had, just a few decades ago, adopted the collectivist perspective the Chinese are now applying. We sold our souls; we shouldn’t expect others to do the same.

photo credit above: iStock.com/400tmax

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My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

US Investors are Relieved but Advantage: China


Author Gary Moreau, aka Avam Hale in fiction

US investors went into this past weekend with severe anxiety, the major markets posting their worst week since January 2016. On Monday, however, the DJIA soared 669 points, the largest single day increase since 2008, while the tech-heavy NASDAQ jumped 3.3%

While there are plenty of experts offering an explanation for the wild turnaround, CNBC’s Jim Cramer suggests that China had a lot to do with it. And while that may seem like stating the obvious, Cramer does get China in a way few Americans currently seem to.

Having been a member of the American Chamber of Commerce in China for eight years, I can say with confidence that US corporations, as a group, have close to zero concern with China’s steel and aluminum exports to the US. Trump’s recently announced tariffs would hurt American allies, like Canada, far more than China.

And, of course, Trump knows this perfectly well. We often think of Trump as the first pure businessman to occupy the White House. But he’s not a businessman; he’s a real estate developer; and there’s a big difference. Perhaps more importantly, he is a man without any discernible economic or political ideology. He lives, in other words, for the deal alone.

In announcing the new steel and aluminum tariffs, Trump and his supporters suggest that he made a “successful” deal. He took on the Chinese when no administration in recent memory had the courage to. And he scored one, on the surface, for a core constituency that helped him to capture the White House in 2016.

But he has not fooled the Chinese. The Chinese know exactly what American business wants:
1. More protection for intellectual property (IP).
2. More access to the domestic Chinese markets for American companies in the tech, banking, and professional services sectors.

Everything else is just noise.

What happened over the weekend, according to Cramer and many others, is also pretty simple. China did not crush the American tech sector in response to Trump’s opening trade salvo on steel and aluminum. Investors breathed a sigh of relief and the markets soared.

The main thing to keep in mind, however, is that the Chinese did not pounce on the US tech sector for one very simple reason—they don’t need to. They have the upper hand.

Forget about President Trump’s relationship with President Xi Jinping. It is true that the Chinese put even more cultural, political, and business emphasis on relationships than their American counterparts do. But the emphasis is on the relationship, not the personalities involved. If China defers to the relationship it has with the US you can be assured it has little to do with the personal relationship between the two leaders. Chinese leaders do not have personal relationships.

The bigger issue is the amount of protection governments are willing to give to intellectual property. And here’s the really important news for US investors:

1. The US has the most individual-centric business culture on the planet. And Silicon Valley (SV) is the center of that universe. China, however, has a collectivist culture. The Chinese simply don’t view IP in the saw way that the SV libertarians do. (By the way, many Americans also believe that the government has gone too far in protecting IP rights for wealthy US tech companies. How can we say that Amazon ‘owns’ the one-click, which the US Patent Office says it does?)

The Chinese fully appreciate the role of IP in the West, and will ‘honor’ Western standards to the extent necessary to do business in the global arena. BUT, and it’s a big but, their heart will never be in it to an extent that will satisfy Wall Street or Silicon Valley. (Nor would most Americans want them to if they truly understood how far SV has pushed the concept for its own benefit.)

2. The IP debate is moot anyway. Now that Google and others have digitized the world, IP advantage has lost any sense of real long term value. Digital data is, by definition, discoverable. Security protocols like blockchains, while promising, are far from ready for prime time.

As a practical matter, therefore, digital technology, like water, will inevitably seek its own level globally. We can only slow it down. Which is why the US, China, Russia, and the EU should be focusing as much effort on how to deal with the military implications for global security as they are on grabbing headlines with revelations about teenage troll farmers.

3. The Chinese made a brilliant decision, but they made it decades ago. Unlike the US, which thought it could take over the digital world, the Chinese government decided from the beginning that the Chinese Internet belonged to the Chinese people for both economic and security reasons. At this point, as a result, neither China nor the Chinese people need Facebook. They don’t need Twitter or Instagram. They ‘like’ Apple because the Chinese like Apple’s products, the company employs a lot of Chinese, and Tim Cook has long agreed to play by their rules. (He was, coincidentally, in China over the weekend.) That’s not to say, however, that they are beholden.


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Over the past weekend the Chinese government did announce that it would reduce the forced technology transfers previously required of US companies wishing to do business in China. But that train left the station a long time ago. The train I’m talking about, however, is not the one you might be thinking of. In the end, this concession will be of almost no practical benefit to US tech companies.

Following World War II, both Japan and Germany built advanced industrial economies on the back of their automotive industries – the tech companies of that era. And how did they do it? Both had national industrial policies that both drove the growth of car ownership (e.g. the Japanese paid substantial fines to drive cars more than a few years old) and protected the domestic industry, largely through incentives and non-tariff barriers.

The US has no industrial policy. None. At least not a public one. (If the US markets were truly free, as we are constantly told by our politicians, there would be no need for corporate lobbyists.)

China, like Japan and Germany, has a very transparent national industrial policy that it actively manages. (Tech, not surprisingly, is at the top of the list of priorities.) And, more importantly, now that China boasts the second largest economy in the world, and is home to 1.4 billion potential consumers, it has the domestic scale to make that industrial policy work. It doesn’t need our technology or our products. While the US tech companies need to push beyond US borders to achieve scale, the Chinese tech companies have no similar need to push beyond China’s borders in the short term. Advantage: China.

The bottom line is that if US investors had reason to be concerned about China on Friday, nothing has changed. If they are betting their collective futures on the world domination of the American tech industry, they really should be quaking in their boots.

Trump will continue to make his string of relatively insignificant deals. He will not take on China. And they won’t take him on. They don’t need to—and they know it.

At some point, however, the US would be far better off politically just accepting the reality that China is not the new global bogeyman that the Soviet Union once was. China is behaving entirely rationally and in the best interests of its people.

The US, on the other hand, appears insistent on sacrificing the American people at the altar of American corporate capitalism and its false dogma of absolute individualism. We should stop blaming the Chinese government for protecting its own interests and start asking the US government when they are going to start protecting ours.

photo credit above: iStock.com/sdlgzps

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My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

Teaching Our Children Contempt


Author Gary Moreau, aka Avam Hale in fiction

When my wife first arrived in the US in 2016, having never before traveled outside the northeast regions of China, she made two rather prompt observations.

The first was to note, “There are no people.” I was perplexed, to be honest, given that we were leaving the Detroit airport at the peak of rush-hour traffic, crawling bumper to bumper among the suburbanites leaving the city center at the end of the work day. “Are you kidding? Look around. The traffic is terrible. Just as I remember it.”

“Those are cars,” she noted, “not people. It’s different.”

Her second observation came some days later, after having experienced American television and what we call the news. “The poor people in America appear very sad. Or angry. That seems strange to me.”

She, in fact, had lived in poverty virtually all of her life. At less than one hundred pounds in total body weight, her shoulders had long since given out from the work she began at the age of eighteen at the state-owned flourmill where both of her parents worked, and on which her family relied for virtually everything, including their apartment. She lifted 25 kg (55 lbs) bags of flour off of a conveyor belt, stitched the top shut, and then piled them on a platform for removal and shipment. And she did it for 8 hours per day, six days per week, and was paid $5 per month.

She is not pious, naïve, or deprecatingly arrogant about her personal history. I have met few in my life who are as candid and matter of fact about the reality of her circumstances. She does ‘get it,’ to use the common American phrase.

But it was Confucius who said, “Wherever you go, there you are.” And few people throughout history have embodied their culture or their heritage more completely than he did. Having lived in China for so long I easily imagine the 1.4 billion Chinese currently living there thinking the same thought with frequency throughout each day.

I offer here no ode to the poor and unfortunate. I don’t sing their praises as defined solely by their poverty. I do not mean to put them on an ethical pedestal. But I admit my bafflement that any of us, rich or poor, famous or ignored, imprisoned by bars or by circumstance, believe that our financial worth, or our social network, or even our Twitter following, is defined by things that should make us happy or sad, proud or bitter.

They are what they are, pure and simple. And while that doesn’t mean we shouldn’t change them, we should change them for the right reasons and in the right ways.


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While Chinese culture is built on a collectivist foundation that turns on personal obligation, American culture is built on an individualistic foundation that turns, so we think, on performance. We inevitably measure, as a result, success and failure of any kind, in personal terms. The successful are gifted, hard-working, and well organized. Those who fail are lazy, unmotivated, and, most likely, deserving of their failure.

The inevitable result is not a contest of ideas, but a contest of competing virtues. ‘Because my ideas are better, I am better.’ It’s just a short hop to contempt. And that, of course, is where sadness and bitterness come from.

On March 14 students across the country took to the street to protest the fact that very angry young men are allowed to buy military assault rifles and kill large numbers of their fellow students. They should be angry. The fact that we are even debating what to do is a sure sign of just how far we’ve fallen from our true American heritage. (When the Second Amendment was adopted in 1791 the only guns in existence had a capacity of only three shots per minute in the most capable hands and were accurate at little more than 20-30 yards.)

And who are the media heroes of this fight? Judging from the coverage it is the students with the loudest voices and the most contempt. And, of course, no politician gets time in front of a television camera today unless he or she is virtually seething with contempt for somebody.

Contempt, of course, seldom solves much of anything. It destroys lives, in fact. It feeds addiction, shortens lives, and leads, inevitably, to sadness and despair.

The reason our politics and our social intercourse is so vile and acerbic at the moment is not the result of Trump’s election or Pelosi’s fund raising skills. It is the result of our unwavering commitment to individualism; to the belief that the individual, either competitively or inclusively (which is really the only difference between Republicans and Democrats, respectively), stands at the center or our economy, our ecology, and our culture.

It worked, with some obvious exceptions (e.g., slavery, the lack of women’s rights), when our world was far less crowded, much more localized, less industrially advanced, and less technologically integrated. It worked, in other words, on a relatively small scale.

The message we should be teaching our children is not that they should feel contempt for the death that surrounds them, but that they are literally all in this together. And in light of that reality there is no room for contempt. There are only solutions that promote the common good. It’s the difference between shouting for the cameras in a gesture that Washington will soon forget, and, say, organizing school watch programs, or student aid programs that help the most alienated children find their social footing before they resort to violence.

In my latest book, We, Ourselves, and Us, I note that early in my career corporate executives felt a strong sense of personal obligation to the employees and the community. My first CEO wanted nothing more than to raise wages and would never have even entertained the idea of closing the factory on which the community relied and moving production to Mexico or China.

Corporate executives today often lament the change, but blame it on globalization or activist shareholders, both of which are beyond their control. It’s bunk. No law has been passed that in any way restricts corporate executives from exercising the kind of obligation they did just a few decades ago. It is merely their sense of individualism that precludes them from accepting their collective obligation.

Individualism without obligation is fatalism. Individualism with obligation is collectivism, what I call we-ism.

When I lived in China I witnessed poverty on a daily basis. It was no-running-water poverty. My friend referred to his own upbringing as a three-bath life (once when you are born, once when you get married, and once when you die). But that never once influenced how he felt about his life or the people around him.

In his latest book, Radical Inclusion, retired general Martin Dempsey notes that when he had to console troops who had lost a comrade, he always said, “Make it matter.” It’s great advice. But it won’t matter if we don’t accept we’re all in it together.

That, I believe, is the message we should share with our children and each other. Once we do, the violence will dissipate. And the newsmakers won’t be quite so full of contempt.

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My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

Good for Everyone


Author Gary Moreau, aka Avam Hale in fiction

This past week the Western media seized on the news out of China that the Communist Party of China has lifted the 10-year term limit placed on the office of the president following the death Mao Zedong. The Western coverage was, as would be expected, alarmist in tone, even though Xi Jinping has just begun his second five-year term and the amendment is largely meaningless for the time being.

That’s not entirely true, of course, as it will preclude Xi having to govern with ‘lame duck’ status as his second term winds down. And that is a good thing, to be sure. President Obama’s lame duck status in 2016 certainly didn’t serve Americans all that well. If nothing else, it changed the profile of the US Supreme Court rather profoundly, and, in the eyes of many, rather illegitimately.

Western journalists, of course, couldn’t resist the comparison to Mao, and whenever they speak of Mao they can’t resist talking about the Cultural Revolution. The word “authoritarian” was bandied about with great consistency. Virtually no Western account of the change, and I looked pretty hard, applauded the move. Virtually every report implied a doomsday scenario and, without exception, tough sledding for the US and our ‘interests,’ without ever specifying, of course, what those interests are, other than the ability to have our way in the world.

I was initially rather neutral on the announcement but with time I have concluded that this is a very good thing for China and the US both. Transitions of power seldom go smoothly and as we’ve seen over the last year a lot of mistakes are typically made when a rookie takes control of the big red button. There’s a lot to learn, experience does count for something, after all, and as much as we dislike political alliances when they stand in the way of what we want to accomplish, they are a necessity of political life in every nation on the planet, and they do take time to take shape.

Americans forget, perhaps, that the Founding Fathers didn’t stipulate term limits for the presidency. Hamilton and Madison, in fact, argued for a lifetime appointment, although, in fairness, most of the Founding Fathers didn’t want the president to be elected, either. They preferred a congressional appointment, although it would appear they ultimately concluded that would make congressional collusion too tempting to resist. (It appears Congress’ trust ratings were low even before there was a congress.)


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President Franklin Roosevelt, of course, was elected for four terms during the course of the Second World War. And while the 22nd Amendment was ratified in 1951, limiting any subsequent president to two four-year terms, I’ve never seen any historical analysis of Roosevelt’s presidency depicting his reign with quite the same sense of authoritarian doom and gloom they are depicting President Xi’s.

I often fear that I speak too frequently of the inevitable dualities of life and the universe so I won’t go there now. I will note, however, that while most Western journalists now depict Xi’s battle against corruption as they would depict a Soviet purge, that is not an accurate depiction at all. Shortly after his election in 2012 Xi issued what came to be known as the ‘eight rules.’ These applied to all members of the government, not just his political foes, and had as much to do with efficiency, wasteful spending, and decorum, as corruption. One of the rules, for example, was, “All government meetings shall be short, clear in focus, and all empty and courteous comments should be eliminated.” A good rule for any government, in my book.

As I was living and working in China at the time, and one of my important markets were the upscale hotels and restaurants that catered to government officials and the citizens lobbying them, I can say from experience that Xi was serious. While Chinese culture still turns on a shared meal, the alcohol is gone and the menus are modest. And there are no exceptions, foe or ally.

The title of president, truth be known, is probably Xi Jinping’s least authoritative title. It has long been a nominal role in China and in fact has not always been filled. That’s not to say that Xi Jinping isn’t powerful. He is. But we shouldn’t apply our American norms to others without getting the facts first.

In my own book, We, Ourselves, and Us: Creating a More Just and Prosperous America, I actually argue that we in the US should extend our own presidential term limits, although I do likewise argue for limiting any one president to one ten-year term.

There are three reasons for my recommendation. The first is that we have to take the money out of our politics or special interests are going to drive us over the cliff. Human nature being what it is, however, neither the politicians nor the wealthy interests that support them are ever going to do that voluntarily. The only way to get the money out of politics is to take the politics away from the money. One 10-year term for the US presidency would essentially provide less than half the chances for money to buy an election. And, if nothing else, I think the parties—and the voters—would think twice about which candidate they nominate if they knew going in it was a 10-year choice. (It might also lead to younger candidates, which isn’t all bad.)

The second reason is the accelerating pace of change in the world today. If the world is changing faster, of course, that would seem, intuitively, to argue for shorter terms of office. I think this is one of those cases, however, where counter-intuitive is the sounder choice. It’s like standing on the gunnels of a canoe. When you first step up the canoe is going to rock like heck. Once you get it stabilized you’ll want to just hold it there for a while. Do we really want to go through the lame duck/first year transition every four years? I don’t think so. The world is moving too fast to waste that much time and effort today.

And thirdly, I argue for a 10-year presidential term limit because nobody else in our government has a term limit, and given that we are a three-branched republic the net result is that nothing gets done when the president’s term in office is so limited. Senators Hatch and McConnell, and House Speaker Ryan, have served in the US Congress for 41, 33, and 19 years, respectively. Their Democratic counter-parts, Senator Schumer and Representative Pelosi have served for 37 and 31 years, respectively. And the members of the Supreme Court, of course, serve for life. Justices Kennedy, Thomas, and Ginsburg have served for 30, 27, and 25 years, respectively, a period during which they have very much interpreted and made law.

Critics, of course, will point out that the members of Congress are re-elected every two (House) and six years (Senate), but that’s not true in any practical sense. Between gerrymandering and the powers of the purse that an incumbent enjoys, Americans, as a practical matter, exercise their right to kick their politicians out with an infrequency that borders on nil.

But getting back to China, the country has just completed a period of extended development and global ascension unlike the world has ever seen. Xi Jinping himself, however, would be the first to admit that a lot of work remains. And much of that work, such as the building out of the One Belt, One Road initiative, domestic legal reform, and the establishment of stability in the region are all going to take time. Having a steady hand at the helm is going to be in everyone’s best interests, including those of the average Chinese and American.

I admit that I might not feel that way if the president in question was not Xi Jinping specifically, but it is, and I think he is the right person to lead the country forward. As Henry Kissinger once observed, the Chinese have a knack of picking the right leader at the right time, and I think that Xi Jinping is no exception.

I’ll let you decide for yourself if we Americans share the same skill.

______________________________________

My newest book, We, Ourselves, and Us: Creating a More Just and Prosperous America, is now available on Amazon in paperback (click here) and Kindle (click here) versions.

If you read any of my books and like them  I would greatly appreciate it if you will take the time to post a review on Amazon, Goodreads, or whatever book site you enjoy. Thank you in advance.

We’re Not in Kansas Anymore

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Author Gary Moreau, aka Avam Hale in fiction

Exactly one year ago, President Xi Jinping delivered a speech to the United Nations office in Geneva, entitled, Work Together to Build a Community with a Shared Future for Mankind. It was collective in its vision: “China is ready to work with all the other UN member states as well as international organizations and agencies to advance the great cause of building a community with a shared future for mankind.” And it was long term in its perspective: “Building a community with a shared future is an exciting goal, and it requires efforts from generation after generation.” The sentiment would later be enshrined in a formal resolution at the 55th UN Commission for Social Development, as “a human community with shared destiny”

Jump ahead one year to January 26, 2018, and United States President Donald Trump spoke to the World Economic Forum in Davos, Switzerland, at its annual conference of the heaviest of the heavy hitters in global politics and business. The man elected on the simple platform of “Make America Great Again” (MAGA), like Xi Jinping before him, delivered his vision for the future of the world.

Trump opened with the warning that “I’m here to represent the interests of the American people…” And, as expected, most of the speech was devoted to his personal contribution to “helping every American find their path to the American dream.” Specifically he spoke to the surging stock market, job creation, small business confidence, deregulation, and, of course, “…the most significant tax cuts and reform in American history.” (Which, on a side note, is not true.) As you would expect from the MAGA president, it was all about America, and, not surprisingly, him. After all, MAGA has everything to do with individuals, he being the biggest and most powerful “I” among them, and almost nothing to do with “human community,” as President Xi described it.

Trump’s would have been the perfect speech had it been delivered by President Dwight D. Eisenhower, a fellow Republican, in the 1950s. It would have been even more appropriate, in fact, given Eisenhower’s military fame, and the fact that the only references Trump made to the US’ role in the world had to do with our self-appointed role as the world’s policeman, and “making historic investments in the American military”, already the world’s largest, costing $1,900 per year for every man, woman, and child in America, at a time when 80 million Americans have little or no health insurance.

Other accomplishments noted by Trump were “eliminating 22 burdensome regulations for every new one,” “…no longer turning a blind eye to unfair economic practices overseas,” and “lifting self-imposed restrictions on energy production,” even though all restrictions are self-imposed and according to the laws of the universe energy is not produced, but merely transformed (and thus fixed in quantity). And, of course, insuring that all nations “contribute their fair share” to the cost of the American agenda.

All told, Trump’s individualist agenda was summed up by this simple claim: “When the United States grows, so does the world.” Perhaps unconsciously, it was the exact same sentiment that Charles Wilson (1890-1961), the CEO of General Motors, made during his confirmation hearings as Secretary of Defense under Eisenhower. When asked about a potential conflict of interest between the interests of the US and GM, he is rumored to have said, “What is good for GM is good for the country.”

The world of today, however, is not the world of the 1950s. The world’s population has expanded three fold, from 2.5 billion people at the end of World War II to 7.5 billion people today, even thought the world’s land mass and its inherent ability to sustain life have not changed at all. As a result, the earth’s climate is changing, in less than desirable ways, and clean air and clean water are among the world’s most precious resources, and disappearing fast.

Technology has made the world smaller and virtually eliminated the concept of local communication and debate. Information flows to a far wider audience but is transmitted by global super-monopolies like Facebook and Google, who rule the world by algorithms that are developed with their own inevitable bias but remain virtually unregulated.

In short, this is not the 1950s. And any desire to turn back the world clock in search of that era is sure to fail. People and technology cannot simply be put back in the bottle. That would require the type of totalitarian dystopia that Orwell wrote about and the Great Generation had just sacrificed countless lives to vanquish.


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The U.S. Constitution, one of the most famous documents in global political history, begins with the words, “We the people.” Yet it is “Me the individual,” that Donald Trump embodies and best represents the America of 2018. My identity, my rights, my tax cut, my income, my freedom—whether it’s my freedom to own assault weapons or my freedom to marry who I like—are at the heart of both the conservative and liberal political agendas.

The conservatives want to pull the rest of us along through individual exceptionalism. The progressives want to push us along through the acceptance and inclusion of all micro-group identity. Neither, however, will work, because both are built on the notion of an individualized world that simply doesn’t exist any more. Both would have been legitimate competing worldviews in the 1950s. Both are obsolete today.

Whether we want it or not, we will face the “shared future” that President Xi Jinping referenced more than one year ago. We will not have the option to choose who will be a part of that community. We all will. Whether you are a Dreamer, a Tea Party supporter, a member of the Rainbow Coalition, a misogynist or a feminist, a white supremacist or a believer that Black Lives Matter, will not matter in the end. We will be forced to live as a single, global community, consuming resources that are fixed by the laws of the universe.

We really only have two choices: 1. We can kill each other. (Or die trying.) 2. We can turn “Me” into “We.”

We have, of course, been here before. Eisenhower and the Great Generation faced the very same dilemma. And, unfortunately, following the great tragedy of World War I and the even greater human tragedy that followed, as the victors sought revenge on the losers, the “we” side of the option ultimately morphed into brutal forms of fascism and communism. They, in turn, gave us the Nazis, the Holocaust, the gulags of the Soviet Union, and the killing fields of the Khmer Rouge.

As a result, many of today’s most ardent individualists believe that any form of collectivism is, as the 20th Century seemed to show, inherently flawed and will only lead to brutal totalitarianism. That, however, is simply not true.

More importantly, however, it doesn’t matter if it is or not. Whatever form of individualism we pursue, the elite, however that is defined, will be forced to squash the many in the fight for limited resources. One percent of the world’s population already controls more than half of the world’s wealth. What will happen when it controls 90%? (And it will, if nothing changes.)

What will happen, in contrast, if the coalition of oppressed micro-identities overthrows the oppressors? All will be well, of course, if the former oppressors all accept a new micro-identity. But what if they don’t? And what about human psychology suggests that they will?

We may not agree with Presdient Xi Jinping’s politics. We can’t, however, plausibly deny his vision of a shared future. An economically and militarily elite America will not and can not pull the world along. A progressively elite America, even if elected, and even if it is truly inclusive, cannot push the world along.

We’re not in Kansas anymore. And the sooner we realize that the less pain we will be forced to endure.

Note: Author Gary Moreau was recognized by the World Economic Forum as a Global Leader for Tomorrow in its inaugural class of 1993.

You may contact the author at gary@gmoreau.com
Visit my personal blog at www.gmoreau.com

Follow on Twitter @gmoreaubooks

Summary for We, Ourselves, and Us:

In this new guide to American politics and economics, Gary Moreau wants to turn the “I” into “We.” As he argues in We, Ourselves, and Us, Americans’ cultural sense of individualism is hindering rather than helping the country. Moreau instead argues for a change to political, economic, and social systems to refocus them on the collective good. As he proposes this important change, Moreau argues that

  • both major political parties are offering ineffective solutions to the problem,
  • the model America was based on is no longer realistic for a modern society,
  • both communism and socialism fail because they are still based on the idea of individuality,
  • the unequal flow of power is responsible for a prejudiced and unbalanced society,
  • the concepts of obligation and self-interest are intrinsically connected,
  • individual advancement means nothing without collective advancement, and
  • all of society is interconnected in nuanced and important ways.

Moreau does not equate collectivism with communism or other political movements. He isn’t arguing for the elimination of private property or other drastic changes. Instead, he simply gives you a new way of viewing systems of power and important suggestions that could lead to satisfactory results for the entire nation.

 

What Would Sun Tzu Do?


Author Gary Moreau, aka Avam Hale in fiction

With North Korea’s recent successful test of a Hwasong-15 missile that reached an altitude of 2,800 miles, more than ten times the altitude of the International Space Station, Kim Jong-un is back on the front page. This, experts suggest, gives the hermit nation the established ability to strike Washington, D.C. with a pre-emptive nuclear strike launched from within its own borders.

When confronted with the issue by reporters, Trump, characteristically, was dismissive: “We will take care of it.” How, exactly, no one knows. Sanctions clearly haven’t worked and whatever diplomacy Secretary Tillerson has been pursuing behind the scenes apparently hasn’t either. (Adding even more urgency to the issue, Tillerson, the one politician even broaching diplomacy, is rumored to be on the way out.)

According to The Washington Post, “A growing chorus of voices in Washington is calling for serious consideration of military action against North Korea,” although it is inconceivable that such options have not already been considered and ruled out as impractical. The loss of life, particularly in South Korea, would easily rival the 20 million Russians who perished during World War II, redefining the geopolitical landscape for decades to come.

China has clearly noted that it would consider any pre-emptive strike by the US to be an intolerable violation of sovereignty. Such military aggression, moreover, would be senseless unless the US was willing to follow its ordnance into the country to pick up the pieces and reshape the nation, and there is virtually no way the Chinese would allow this to happen without their strongest possible resistance.

Depending on whether Trump or China is higher on their derisory priority list on any given day, many Western media outlets have attempted to position the latest missile test as either indicative of China’s failure to follow through on the perceived commitment to resolve the Korean Peninsula issue, or Trump’s foolhardiness for believing he had that kind of personal pull in Beijing.

Personally, I think there is little incentive for China to do anything except sit back and watch. If it believes that Kim’s regime will ultimately collapse, it has little to gain by getting its hands dirty now, short of preventing the US from establishing a US military presence on the 880-mile border China shares with North Korea. Let it collapse and then step in to either push for a unification of the Korean Peninsula, with security and political assurances from the current South Korean government, or turn North Korea into an autonomous Chinese political zone not unlike Hong Kong, Macau, or Tibet. (The latter, I believe, is the more likely scenario, all things considered.)

Two things, I believe, we can say with certainty:

1. Given any say in the matter, the people of North Korea will choose a Chinese protectorate over a US protectorate. Unless South Korea takes significant steps to distance itself from the US they will not, in all likelihood, even choose unification over China. Dennis Rodman’s diplomacy aside, the North Koreans do not see the US as Donald Trump sees us.

2. China will do nothing to give Trump face. In other words, he will accomplish nothing with China’s help if they believe he stands ready to take credit for it. He is quite literally shooting himself in the foot by touting his relationship with Xi Jinping in the context of his great self-acclaimed negotiating skills. To give Trump credit would be to compromise the Chinese Dream that is at the heart of Xi’s political agenda and legacy. He won’t do it; he has no incentive to.

To this latter point, I am quite confident that China did not release LiAngelo Ball and his UCLA basketball teammates after being arrested for shoplifting in Hangzhou because Trump asked them to. They did so because they concluded that it was in their best interest. It may, in fact, have been a simple test to see how Trump would respond.


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Trump’s reaction, in fact, could not have been worse in terms of his future ability to influence Chinese behavior. In his willingness to start a Twitter feud with LaVar Ball, Trump demonstrated beyond a doubt that he has no understanding of Chinese culture and the importance of face, particularly in the political arena. Certainly someone in Washington understands this.

I believe the most effective option for the US and the world remains the same. The US must withdraw its military presence from the Korean Peninsula unilaterally, while maintaining its commitment to protect South Korea from aggression using all of its resources, including nuclear weapons, if necessary.

Given the unlikelihood that a contained exchange of cannon fire along the 38th parallel will be sufficient to convince Kim Jong-un to dismantle his nuclear capabilities, it is hard to see how a military withdrawal from the Korean Peninsula would materially compromise the US’ treaty obligations to South Korea or Japan.

Nor would it, in fact, cause a US loss of face in the region. As famous Chinese military general Sun Tzu is often quoted to have said, “The supreme art of war is to subdue the enemy without fighting.” In the eyes of Asia, it would take a strong and courageous America to unilaterally to pursue such a strategy, putting the clear burden for resolution of the North Korean problem at the doorstep of Beijing’s leadership.


photo credit: iStock.com/alancrosthwaite

The proof is in the rhetoric. Why has China not seen fit to rattle its sword to the extent President Trump has? Why are there no anonymous quotes coming out of the Great Hall of the People? Is it because China is afraid? Or is it because China is clever and understands the importance of face in true diplomacy?

China can resolve the North Korean problem. And it will, if we allow them to solve it at their own pace and in their own way. In the meantime, North Korea is contained. There is no way that China will allow Kim Jong-un to unleash a single nuclear device on Guam, Japan, or the US. And there is no way that China would not know of such an attack long before the missile leaves the ground.

What is it that American diplomats are so afraid of? Does the Munich Pact still haunt the souls of our diplomatic core? The times and the circumstances could not be more different.

This would not be peace through appeasement. This would be peace through strength and confidence and a willingness to put humanity above any one individual’s standing in the polls. This is not an issue for Twitter. This is an issue for men and women of greatness to take the lead in the name of peace and stability.

If they fail to do so, history will not remember them kindly.

You may contact the author at gary@gmoreau.com
Visit my personal blog at www.gmoreau.com

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Follow on Twitter @gmoreaubooks


Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)
click here

The latest in the Understanding Series is now available.
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Sen. Rubio and Rep. Smith Chide China?


Author Gary Moreau, aka Avam Hale in fiction

Senator Marco Rubio (R-FL) and Representative Chris Smith (R-NJ), (not shown above), released a very predictable opinion piece to CNN over the weekend. It comes on the cusp of an upcoming triple news play on Sino-US relations. On Wednesday, October 18, the 19th Communist Party of China National Congress will convene in Beijing. (See my previous post for the significance and my predictions.) On Thursday, the US Congressional-Executive Commission on China (CECC), of which Rubio and Smith are chair and co-chair, respectively, will issue its annual report delineating China’s alleged human rights violations and unfulfilled commitments to reform. And next month, of course, President Trump himself will travel to China for his first official visit to the Middle Kingdom. (I can’t fathom what a media circus that will be.)

Also predictably, China is sure to release its annual answer to the CECC report, detailing, in lengthy detail, America’s poor treatment of women, minorities, and children. Income inequality, climate change denial, and military aggression abroad are also likely to receive prominent treatment in the Chinese rebuttal.

Alas, you don’t have to be a Chinese apologist to accept that the Chinese do have a point in slinging right back at their American critics. The fact that American politicians still feel entitled, indeed obliged, to point out the faults, perceived or real, of the rest of the world, is perhaps the strongest evidence yet of just how out of touch America is with reality and itself at the moment.

After a week filled with salacious revelations about the exploits of Harvey Weinstein, who is most certainly not the exception to the rule in Hollywood, Trump’s threats to incinerate the people of North Korea, and Trump’s slap to the face of a country whose culture turns on face (i.e., Iran, if you have been away), Rubio and Smith apparently believe that China’s refusal to bend to US arrogance is worthy of America’s limited and painfully stretched supply of attention.


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Prominent in the Rubio/Smith piece is the accusation that “It [China] is increasingly dismissive of international norms and ‘Western’ ideas…” Say it ain’t so. How could China fail to yield to “principled American leadership,” as they call it? That we have to ask the question, once again, is ultimately both ruefully recursive and, quite frankly, beyond comprehension.

As is typical of the CECC report every year, this report will, if the Rubio/Smith letter is representative of the final product, focus on the alleged suppression of the freedom of expression in China. The Hong Kong “umbrella movement,” Tibet, religious expression, and, of course, the alleged repression of activists of all stripes, in areas from the environment, where it was the US which backed out of the Paris Climate Agreement and ceded environmental global leadership to China, to, of course, the Internet and the media, where our digital gatekeepers are being openly criticized for not censoring Russian propaganda during the 2016 election, but censoring at least one Twitter account and a domestic political ad.

Taken in total, these accusations against China calibrate just how far America’s media myopia has progressed. If hateful social media platforms, fake news, and infantile political name-calling are the standard of a free and noble media, then the Chinese should consider themselves lucky to be ruled by such alleged oppression.

Finding bogeymen in the same old places, the letter also accuses China of “Coercive enforcement of population control policies continued in violation of international standards.” It is an unfounded and logically inconceivable accusation given that China already accounts for 20% of the world’s population (China’s population has tripled in size since it’s founding in 1949.), but where the government not only guarantees, but funds, a woman’s right to control her own body. The US, on the other hand, is one of only two countries in the world (Papua New Guinea is the other) that does not provide for paid maternity leave and even now operates the most expensive, and selectively available, health care system on the planet.

This kind of moral grandstanding is what our politicians discern to be worthy of their time? This, despite the reality that our prisons, part of the largest institution of incarceration in the world, are disproportionately filled with young men of color, an entire race of Americans feels compelled to call out selective use of force by the police, a single man can buy enough military-style weaponry to mow down more people than there are US governors, all because we nonetheless guarantee multi-millionaire professional athletes the right to kneel on the job during the playing of the national anthem.

I have nothing against kneeling, mind you, but I am deeply offended by hypocrisy. And that is why, no doubt, I felt so welcome during the nine years I lived in China. I was a foreigner, for sure. But the Chinese I met never pretended to be anything that they weren’t and that courtesy to be who we are was universally extended to my family and me as well.

The closing line in the Rubio/Smith letter actually made some sense to me. “President Trump would do well to remember, even in the midst of heightened diplomacy on North Korea (author: I’m really not sure where that comment is coming from. What diplomacy?), that governments which trample on the basic rights of their own citizens are unreliable international partners.”

Well said, Senator Rubio and Representative Smith. But who, exactly, are you referring to there? Us or them? As you and your colleagues have repeatedly taught us, the choices are digital. If we’re not with them we must be against them.

I only hope that the Chairman Xi Jinping and the leaders in Beijing don’t share that perspective.

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You may contact the author at gary@gmoreau.com
Visit my personal blog at www.gmoreau.com


Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)
click here

The latest in the Understanding Series is now available.
click here

Face Trumps Diplomacy, Again

Author Gary Moreau

With North Korea’s recent launch of an unarmed intercontinental ballistic missile that experts believe is capable of reaching the US mainland, President Trump took to Twitter to publicly reprimand China. “China has been taking out massive amounts of money & wealth from the U.S. in totally one-sided trade, but won’t help with North Korea. Nice!” Trump tweeted.

That’s the President’s opinion, of course, and everyone expects the President of the United States to have one. Both here and abroad American politicians are known both for having opinions and for sharing them.

The bigger issue for me, however, is not whether the President is right or wrong, but whether or not his is the best strategy for influencing Chinese behavior. Diplomacy is not a real estate transaction, and even if it were, the Chinese negotiate employing a very different model than Westerners do.

All Chinese culture revolves around personal relationships and the obligations that flow from them. Both are governed by universally accepted norms established over centuries that include elements of Confucianism, Taoism, and Chinese folk religion. The public expression of those norms, and whether or not they are being adhered to, is generally referred to as “face.”

There is good face and bad face. You can give face or lose face. You can save face and you can fritter it away.

Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)

Face is a lot like respect, but broader and more nuanced in meaning. It is both subtle and fragile. Volume and vulgarity, or even gestures involving the lone digit, have little to do with it. Content is everything. What you say and what you do is all that matters when it comes to face.

The other big difference between respect and face is that respect is essentially one-directional. If my enemy disrespects me I may show disrespect in return. Each incident of disrespect, however, stands on its own. When face is lost, on the other hand, it is bi-directional from the start. He who causes a loss of face generally loses face at the same time.

President Trump’s tweets regarding China’s alleged non-intervention—I say alleged because the Chinese government is criticized by the West for nothing more vehemently than it is criticized for a lack of transparency, so how do we know what China has done or not done diplomatically—may or may not be a loss of face for President Xi Jinping. The norms of obligation are complex and delicate. North Korea shares both a border and a history with China and the North’s current intransigence with the West keeps American troops on the far side of the 38th parallel.

Trump’s behavior is, nonetheless, clearly a loss of face for Trump and the United States. I am merely observing, but for right or wrong, the President will not change the opinion of a single Chinese with his public rant. And, admittedly, that’s probably not his intent. He is talking to the American public, not the Chinese. (Perhaps, anyway. I don’t pretend to know the man’s thinking.)

I do wonder if he will change many American minds either, however. Since returning to the US in 2016 it has been my impression that most Americans have pretty set opinions on China and Chinese intentions. And they certainly have rigid opinions about Trump himself. It’s hard to imagine anything that he or his critics could say that is going to change many minds.

Having traveled the world for much of the four decades of my working career I have come to accept face as a more effective model of behavior than respect or the lack thereof. Our choices do have consequences for all involved, after all. They might as well be acknowledged. Most of life’s worst pain is self-inflicted in the end.

Because it is an individualistic standard, moreover, a social contract built around respect naturally encourages the marauder and the bully. Face, in contrast, is a collectivist perspective. It tempers the excesses of the wolf that defies the pack.

The other benefit of the standard of face is that it really eliminates the gambit as an effective strategy of influence. A barrage of insults may impair the insulter more than the insulted since, in the world of face, the intent of the blow is more meaningful than the landing of the blow itself.

Available in paper and electronic formats.

It does seem that Trump’s pre-emptive negotiating ploy is to start every negotiation with, “Screw you, just in case.” That will work some of the time, particular where victory and domination are both measured in the moment. It’s seldom a good long-term strategy, however, which is why mobsters make sure to kill the son along with the father. Revenge doesn’t expire.

North Korea will be a nuclear power. That much seems certain. China will not stop it because it is not in its best interests to do so. And Trump, of all people, should understand that. He got to Pennsylvania Avenue on the “me first” bus, after all.

President Trump claims he has a solution. “If China is not going to solve North Korea, we will,” Trump told the Financial Times. Trump is quick to bluff, however. And bluffing is a bit like taking hostages. Once you kill the hostage, or show your willingness to bluff, you lose all leverage.

One of the keys to face is knowing when to hold your tongue. Silence can speak volumes, but empty threats are more than just unproductive. In a world governed by face, they are counter-productive.

The thing about face is that it trumps all other considerations (pun intended). Even what China wants will be subordinated to what China must do to save face. “Just in case” is now a sure thing. Trump should face it. He’s on his own, now more than ever.

Contact: Reach the author directly at gary@gmoreau.com

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.

Contact: You may reach the author at gary@gmoreau.com

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