Bracing For The Weirdest Summit Ever

According to news reports and a tweet from President Trump, there will be a summit meeting in the next two months between President Trump and North Korean dictator Kim Jong-Un.  The agreement to set up a meeting was brokered by the South Korean government, and the place and time of the summit is currently being determined.  In the meantime, North Korea has agreed that it will not engage in any more missile testing until after the summit occurs.

Whenever and wherever it happens — if it happens at all — the meeting promises to be the weirdest, most closely watched, most unpredictable summit in history.

donald-trump-kim-jong-un-ap-mt-171101_16x9_992Viewed solely from the standpoint of normal diplomacy, this meeting will be highly unusual.  North Korea and the United States have no diplomatic relations of any kind, and no American President has ever met a North Korean leader.  In fact, the United States and North Korea technically remain in a state of war, because the Korean War ended in an armistice, not a peace treaty.   Even President Nixon’s famous trip to China, which reopened relations between America and China, was built upon a prior period of thawing relations and more diplomatic prep work than would occur before this summit.

Add to that the fact that President Trump and Kim Jong-Un have been trading venomous barbs about each other and engaging in lots of saber-rattling talk until now, and are two of the most unpredictable leaders in the world besides, and you have to wonder what the talks between the two of them will be like.  The diplomats and underlings who will be present, from both sides, will no doubt be desperately hoping that Kim Jong-Un and President Trump follow whatever scripts their respective sides have prepared — all the while knowing that history teaches that they probably won’t.  And the media, which carefully analyzed a handshake between President Trump and Russian leader Vladimir Putin when they first met, will have a field day examining and breathlessly reporting on every wink, nod, and offhand comment.

North Korea has long been a problem that has been ignored by world leaders, hoping it would just go away — but the provocative, destabilizing conduct of North Korea has gotten more and more dangerous as it has worked to develop nuclear weapons and tested long-range missiles.  Something needs to be done to get North Korea off the path of confrontation and into more normalized relations with the United States and the rest of the world.  Will The Weirdest Summit Ever be able to achieve that?  The world will be watching the weirdness, and holding its breath.

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2016’s Rocky Start

It’s only the first official workday of 2016, and already the year is off to a very rocky start.

In the Middle East, tensions are high because Saudi Arabia — where Sunni Muslims predominate — recently executed a prominent Shiite Muslim cleric, Sheikh Nimr al-Nimr, for terrorism-related offenses.  That angered Iran, the Shiite power in the region, with protesters in Tehran setting fire to part of the Saudi embassy there.  Saudi Arabia has now given Iran two days to withdraw its diplomats from the Kingdom.  So, in a Middle East that is already aboil because of ISIS, fighting in Syria and Iraq, and the ongoing Israeli-Palestinian disputes, we layer on a conflict between Saudi Arabia, the money power and home to Islam’s most holy sites, and Iran, the revolutionary religious state that has long sought to be the leading Muslim power in the area.  And that dispute will not only increase the political turmoil in the region, it also might affect the world’s oil markets, which have been plunging recently.

1904But that’s not all.  In China today, stocks tumbled 7 percent, triggering a premature end to trading.  It’s not entirely clear why China’s markets have plunged — China’s economy is a black box, and many of China’s economic decisions seem the product of manipulation, rather than the workings of the law of supply and demand — but signs point to the fact that the Chinese economy is headed for the rocks.  Given the size of the Chinese economy, that’s bad news for the rest of the economically interdependent world that seems to be teetering on the brink of another recession, and other Asian stock markets also fell today.  We’ll see whether European and American markets follow suit.

So, even more contentiousness in the war-torn, terrorism-addled Middle East powder keg, and bad signs from one of the world’s largest economies and a principal engine of growth in recent years.  What about America?  Oh, yeah — it’s a presidential election year, which means we’ve got a lame duck President, and according to the polls the two currently leading candidates to replace him are a blow-dried bumptious buffoon and a dissembling also-ran who couldn’t comply with basic email security rules.  And we’ve got months, and months, and months of electioneering and campaign commercials in our future, too.

You know, 2015 really wasn’t that bad.

One Child, Two Child

Imagine living in a society where the government strictly dictated how many children you could have, and imposed crippling fines if your family exceeded its limit.  It is an Orwellian concept, the kind of repressive, intrusive, Big Brother/Big Government run amok plot line that has given rise to countless movies and books about soulless future societies.

Except that such a government and policy actually exists, and has for decades — in China.  Since the ’70s, China has limited families to one child, in an effort to curb its population growth.  China’s leader at the time, Deng Xiaoping, instituted the policy so that “the fruits of economic growth are not devoured by population growth.”  That decision was applauded by some advocates who were urging governments to take aggressive steps to control overpopulation; indeed, the United Nations Fund For Population Activities actually gave China an award for its decision.

As the New York Times reports, China’s one-child policy has had brutal consequences that include forced abortions, infanticide by rural farming families that prefer boys over girls, and a resulting lopsided imbalance in males and females in the Chinese population.  And now China is changing its policy — not because it was inhuman and indefensible in the first instance, but because China realizes it has miscalculated.  As a result of the one-child policy, China’s birth rate isn’t sufficient to support its rapidly aging population, so now China is declaring that couples can have two children.

There’s skepticism, however, about whether China’s abrupt policy change will work.  Even if couples of child-bearing age decide to have a second child, those offspring won’t be part of the Chinese workforce for years.  What’s more, China’s population has now been conditioned to accept one-child families, and couples are very sensitive to the economic and emotional costs of having a second child.  And even if the birth rate increases as a result of the policy change, China’s population will begin to decline and the imbalance of young workers versus old pensioners will continue to grow.

Those who advocate aggressive government decisions to address perceived social problems would do well to consider China’s one-child policy, which shows that governments not only can be brutal, but they can also be dead wrong.  And if you were an older member of Chinese society, how comfortable would you be with your position in the face of bad demographic statistics and the economic burdens of supporting a growing number of retirees?  Would a government that enforces a one-child policy in an effort to control its economy hesitate to take steps directed at the other end of the age spectrum to restore what it considers to be a proper balance to its population?

Death Drivers Of The Orient

It sounds like a bad urban legend, but apparently it isn’t:  in China, there are recorded instances of a driver striking a pedestrian, then backing up to run over the fallen victim again and again to make sure they are dead.  In two of the more appalling cases, drivers ran over a little girl, and a grandmother, multiple times.

Why?  Because the tort and criminal system in China provides a financial incentive to make sure that the victim of a hit-skip incident is dead.  The one-time compensation to be paid to the family of a deceased victim typically ranges between $30,000 and $50,000.  If the victim is seriously injured and requires ongoing care, however, the driver has to pay for the care for the rest of the victim’s lifetime — which obviously could run into considerably larger sums.

Hence, the death driver scenario.  In the split-second after an accident, Chinese drivers have to decide between their pocketbook and their humanity and decency — and for a number of drivers, the pocketbook wins out.

It’s discouraging to think that money could turn a distressingly large percentage of drivers into cold-blooded killers, but perhaps we shouldn’t be surprised.  The historical record consistently demonstrates that people respond to economic incentives and disincentives — just ask anyone who lived in the old Soviet Union.  The Chinese death driver example simply shows how far economic incentives can go in influencing decision-making and behavior.  It isn’t a pretty picture.

At The Whim Of Immense Forces Beyond Your Control

Trying to save for your eventual retirement these days can be a pretty wild ride.  Everything we read tells us that we simply cannot count on our chronically underfunded Social Security system to provide the principal source of our retirement funds, even though we have been contributing to it for decades.  So, you need to “save and invest” to provide an alternative, supplemental source of funds.  But where to invest?

Bonds and other debt instruments offer only a modest return these days, and no bank pays much in the way of interest on savings accounts anymore.  That leaves investing in the stock markets — where, unless you are an insider, for the most part you invest your savings on a wing and a prayer and often feel that your money is out there at the whim of immense forces beyond your control.  It’s not exactly a warm, confident sensation.

The last few weeks have brought this ever-present feeling up to gut-punch level.  The U.S. indexes have dropped like a stone, shedding a significant chunk of their value, and the end of trading day stories about the declines can only offer speculation about why — and whether more declines are in the offing.  Then this week China surprisingly decides to devalue its currency, which has roiled the markets even more and caused more declines in global stock values.

Why has China done this?  Who knows?  China’s regulation of its economy remains a black box, and it seems clear that, when it comes to China, geopolitical factors beyond simple market forces like the law of supply and demand are influencing its economic decisions.  When China’s stock market experienced some sharp declines recently, one news article mentioned that a sign of the underlying issues was that the stock market hadn’t increased, as expected, on the Chinese Premier’s birthday.  When trading on stock markets is expected to be influenced by politician birthdays, you know you’re not exactly operating in the kind of world conceived by Adam Smith and his invisible hand.

So, what should the non-insider individual investors do in the face of these massive forces whose inexplicable decisions threaten to slash the value of their nest eggs and crush their dreams of a warm retirement some day in the future?  In a world where there aren’t many good alternatives, you can only do what you always do when you find yourself on a wild ride — hold on tight, don’t panic, and hope that it ends sooner rather than later.  Who knows?  Maybe the Chinese antics will cause the global money interests to conclude that the regulated U.S. stock market, where politician birthdays don’t affect buy-sell decisions, is a good, safe place to invest, and thereby trigger a new bull market in the U.S. of A.

The Doctor’s Park

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Vancouver’s Chinatown has probably seen better days.  It’s right next door to the street where there are throngs of homeless people, vagrants, beggars, and other vaguely menacing types, and many of them apparently wander over to the Chinatown district — giving it a distinctly seedy, low-rent feel.

There is, however, a small oasis of peace, quiet, and beauty in Vancouver’s Chinatown.  It’s Dr. Sun Yat-Sen Park.  With its water lilies, small pagoda, bamboo shoots, and picturesque trees, it is a fine place to sit.  Dr. Sun — who helped to overthrow the Qing dynasty and found the Republic of China — no doubt would be proud.

Documenting The Axis Of Evil

In his 2002 State of the Union speech, President Bush described Iraq, Iran, and North Korea as parts of an axis of evil in the world. He was criticized by some for not engaging in constructive dialogue with those entities, but now a detailed United Nations report shows just how extraordinarily evil the North Korean regime really is.

The 400-page report was released by a specially appointed UN Commission. It compares the crimes being committed in North Korea to those that occurred in Nazi Germany, and for once the conclusion is apt rather than reckless hyperbole. Through interviews with refugees and victims, the report documents the starvation, torture, discrimination, and repression that are key elements of the North Korean regime. It describes how North Korea operates a system of unspeakably cruel labor camps and prisons, where inmates are starved, murdered, raped, and subjected to forced abortions; escapees described prisoners being forced to drown their own children and dig their own graves before being murdered by guards with hammers.

The atrocities in the labor camps have caused the deaths of hundreds of thousands of North Koreans, and hundreds of thousands more have died through starvation as a result of governmental policies that use the supply of food to keep the population under control. The report finds that North Korea also practices discrimination against women and others in a rigid, state-assigned class system, prevents the free exercise of thought, conscience, and religion, and operates a police state in which security forces use violence and cruel punishments to create a climate of fear.

The UN report reminds us of the Holocaust and calls for prompt international action to end the atrocities of an evil government, but that is not likely to happen. North Korea denies all of the allegations of the report. More importantly China, North Korea’s ally and protector, indicates that it will not support any intervention. As awful as the North Korean regime is, and as terrible as the suffering of its people may be, the international community has few options short of invasion — and there does not seem to be much appetite for such a step.

So, we are left with a report that probably will not change the reality in North Korea — but that report nevertheless serves a useful purpose. There truly is evil in the world, and it is important for us to be periodically reminded of that unfortunate fact.