THE ASPIRATIONAL SOCIETY VS. THE ENVIOUS SOCIETY
Hong Kong. Why is Hong Kong succeeding while New York City is receding? They are both world-class cities with about the same per-capita income and great natural harbors. New York is about 15 percent larger in population, while Hong Kong is about one-third larger in area (but unbuildable because of the steep terrain). Both have large immigrant populations who are seeking better lives. Last week, I explained how much of Hong Kong's success was a result of it having the freest economy in the world, with low levels of government spending, low tax rates, a minimum of government regulation and the rule of law. There is more. Hong Kong, like Singapore, South Korea, Chile and Switzerland are aspirational societies, rather than societies consumed with envy, like France. Work, saving and investment are not punished in aspirational societies, and there tend to be less social conflict and a higher level of civility. (It was U.S. venture capitalist Terry Anker who first used the term "aspirational society" to describe Hong Kong during our meetings in this glorious city this past week. It is a more inclusive term than "opportunity society" that Newt Gingrich and Jack Kemp frequently used to describe their vision for the United States.) The United States used to be an aspirational society, but has increasingly become an envious society.
THE BREAKUP OF BRITAIN?
Powerful investors across the world have woken up to the possibility that Scotland may vote to break up the United Kingdom next week (9/18), with some already preparing defensive action that risks a potentially dangerous flight from sterling and Britain's bond market. Japan's biggest bank, Nomura, has advised clients to slash financial exposure to the UK and brace for a possible collapse of the pound after polls showed the independence campaign running neck and neck, warning that the separation of England and Scotland after more than 300 years would be a "cataclysmic shock." Stephen Jen, head of SLJ Macro Partners and a Chinese-speaker from Taiwan, said Asian investors are flabbergasted by the sight of an ancient and successful union tearing itself apart for no obvious reason. "It is totally bizarre. They simply don't understand it, and nor do I. Until a week and half ago everybody thought there was a zero probability of Scotland voting Yes," he said. "We have always assumed the United Kingdom would stay united, but now everything we thought about the UK has suddenly been tested, and will have to be repriced." Simon Derrick, from Bank of New York Mellon, said the UK is leveraged to global financial cycle and has become a magnet for the "carry trade", sucking in funds from Japan, the Middle East and other regions searching for yield. Mr. Derrick said a 15% plunge in sterling is "quite conservative" given the dangers of a messy divorce. "We think the high $1.40s against the dollar is entirely feasible. People always underestimate how far sterling can fall when the tide turns," he said.
HALF-FULL REPORT 09/05/14
One of Hollywood's legends is that their deaths always come in threes. This proved true when Joan Rivers' came yesterday (9/04), which followed that of Lauren Bacall (8/12), and one day earlier, Robin Williams (8/11). They were marvelously gifted, and we should be grateful for the joy they brought to our lives. As Howie Carr of the Boston Herald notes this morning (9/05), in Massachusetts bad news also come in threes - as it did this week. On Wednesday (9/03), Secretary of State Lurch hinted he might run in 2016, as did Governor Incompetence and Senator Talking Bull. ...Two months from today we'll know if we're going to suffer the undiluted Curse of Zero for another 28½ months, or if it will be diluted enough to render Zero impotent. Here's this week's Sitrep. ...You can't blame Mitt Romney for capitalizing on his clairvoyance. The entire Zero-worshipping Enemedia made fun of his "gaffe" when, during the 2012 campaign, he told Wolf Blitzer that Russia was "without question, our number one geopolitical foe. They fight every cause for the world's worst actors." Since it's now blindingly obvious he was right, you can't fault his timing by penning a piece in the WaPo yesterday (9/04): The Need for a Mighty US Military. However, Mitt is playing catch up with Rick Perry. Right now, Rick's the Pub front-runner for 2016. He showed why in his fabulous speech in Dallas last Friday evening (8/29). I encourage you take 24 minutes to watch it all. He quotes Thomas Paine: "The duty of a patriot is to protect his country from its government" - and goes from there. Enjoy:
HOW TO PROTECT AMERICA AND HAVE ISLAM BE A RELIGION OF PEACE
A POST-ZERO FOREIGN POLICY
It's hard to see how US foreign policy under Zero could get much worse - but it certainly can as it continues to spiral downward. President Pandora, as Jack Kelly calls him today (9/04) won't close his box of evils until he no longer infests the White House. Nonetheless, the world is filled with opportunities, and it's helpful to focus on how a pro-American president could maximize them. Then we can see how candidates as they enter the 2016 fray stack up in their understanding of them and how they would implement their maximization. At the top of the list, of course, is repairing the monumental damage Zero has done to the American economy, and concomitantly, the willingness of foreign companies and countries to do business with it. This means repealing FATCA as step one, with many steps to follow - such as those listed in The Speech I'd Give If I Were Running for President (July 2011). Next comes rebuilding alliances with our friends. Zero's policy has been to spit on them, as he has done with Israel. A post-Zero pro-American foreign policy would be to spit on our enemies instead. Naturally, this starts with ISIS and other assorted Islamic crazies. ISIS, it turns out, is a perfect example of the Chinese "danger=opportunity" equation.
PRESIDENT PANDORA
The first big step President Barack Hussein Obama took to implement the new strategy he outlined in his much ballyhooed speech in Cairo in June of 2009 was the war of dubious legality he waged to oust Libyan dictator Muammar Gaddafi. He wouldn't fight Islamists, as George W. Bush had done, Mr. Obama said. He came to Cairo "to seek a new beginning between the United States and Muslims around the world; one based upon mutual interest and mutual respect." Islamists seized control of Libya's capital, Tripoli, Aug. 25. The descent of Libya into a bloody civil war Islamists are winning is fraught with symbolic significance, because it was here President Barack Hussein Obama opened Pandora's box. In Greek mythology, the god Zeus gave Pandora, the first woman or Greek Eve, a box (a jar in Hesiod's original story), and a warning never to open it. When Pandora cracked it open, out rushed all the evils that plague mankind. In the modern version, Americans in an act of masochistic naïveté gave such a box to Obama in 2008, who promptly opened it - and then to compound the masochism, they insisted he keep it open in 2012.
THE UNFINISHED WAR
The war with Hamas is not over. What we are experiencing today is a temporary cease-fire. The most basic reason the war is not over is because Hamas has no existence outside its war against the Jewish state. Hamas exists to obliterate Israel. The goal of each round of fighting is to soften Israel up for the next round. Hamas will only stop fighting when it is defeated. And Israel did not defeat Hamas. Not only did Israel not defeat Hamas, but incredibly, according to the Israeli newspaper Haaretz, senior IDF commanders are now lobbying the government to in effect surrender to Hamas.. The General Staff's behavior isn't the only reason that Hamas thinks aggression is the way to go. The US and Europe have gone out of their way, both during the fighting and today, to show Hamas that they are right to attack Israel. Mr. Obama in particular.
FROM TINY SEAPORT TO WORLD FINANCIAL GIANT
Hong Kong. How did this small city-state of 7.3 million people go from having a per-capita income of only a few hundred dollars per year to a per capita income that is equal to that of the United States in only 50 years? Hong Kong became a British colony in 1842, and the adjacent "New Territories" were leased for 99 years in 1898. In 1997, Hong Kong was returned by the British to China, with an agreement that it would become a Special Administrative Region (SAR) -- "one country, two systems." Hong Kong retained the British legal system, most individual liberties, and a high degree of local autonomy, except for foreign policy and defense. The amount of democracy has been limited -- with the British serving as the ideal benevolent dictator and the Chinese as a somewhat less benevolent dictator for the past 17 years. Hong Kong is about as close to the ideal free-market capitalist model that you can find on the planet -- which came about largely by accident.
AMERICA’S CRISIS OF GREEDY GOVERNMENT LOOTERS
America is in crisis because the people responsible for governing the country are looting it instead. Obamacare has sent health insurance premiums and budget deficits soaring, clobbered employment, dragged down economic growth. But it's been a bonanza for big health insurance companies, to whom President Obama plans to hand $8 billion more taxpayer dollars. "Renewable" energy firms produce little electricity at exorbitant cost, but reap billions in taxpayer subsidies. Illegals have committed more than 3,000 murders and 8,000 sexual assaults in Texas since 2008, the governor said. More flood across the border because Democrats see them as future Democrat voters; big business sees cheap labor. More than 500 veterans died or were seriously injured last year due to "inappropriate" care at Veterans Administration hospitals, according to internal documents. The Office of Special Counsel is investigating 67 claims of retaliation against whistleblowers at 45 VA facilities in 28 states. Managers altered records to conceal neglect, and to obtain bonuses they hadn't earned. It's hard to find a government agency anywhere that isn't run mostly for the benefit of those who staff it.
“WE DO NOT HAVE A STRATEGY” IS OBAMA’S LATEST LIE
He does have a strategy, but prefers to appear indecisive. That's because the strategy would likely provoke even greater criticism than the false confession of endless dithering. The actual strategy is detente first, and then a full alliance with Iran throughout the Middle East and North Africa. It has been on display since before the beginning of the Obama administration. During his first presidential campaign in 2008, Mr. Obama used a secret back channel to Tehran to assure the mullahs that he was a friend of the Islamic Republic, and that they would be very happy with his policies. The secret channel was Ambassador William G. Miller, who served in Iran during the Shah's rule, as chief of staff for the Senate Select Committee on Intelligence, and as ambassador to Ukraine. Ambassador Miller has confirmed to me his conversations with Iranian leaders during the 2008 campaign. Ever since, President Obama's quest for an alliance with Iran has been conducted through at least four channels: