Twofish's Blog

January 31, 2008

Notes on Rebecca MacKinnon

Filed under: Career, politics — twofish @ 10:34 am

I posted a comment to Rebecca MacKinnon’s blog, which I wanted to copy to mine, but unfortunately I didn’t save a copy.  I’ve asked her to send me back a copy since it makes some points that are worth repeating.

I do think that the headlines of China suppressing dissent isn’t going to wreck its Olympic image nearly as much as she thinks.  This is not necessarily a good or bad thing, but it just is.  The problem with treating human rights as a public relations issue is that it ends up being a balance between outrage and the need to stay in power, and I think there is going to be a lot less public outrage at Chinese human rights abuses than she thinks.

One big problem is compassion fatigue.  At some point, if you keep talking about Chinese dissidents, people just get numb to it.  People also have extremely short attention spans.  For something to happen, it has to be really outrageous.

The other problem is that one thing that is in the backs of people’s minds is “maybe the Chinese government is right after all” than there was ten years ago.   There are lots of people who regret going into Iraq, and Sadaam Hussein was a far, far nastier person than China is.  So if going to Iraq over human rights was a bad idea and it turns out that the West really doesn’t know how to run a country, then just perhaps pushing human rights on China maybe isn’t such a good idea.

On the other side.  The Chinese government has had a strategy of allowing certain types of dissent.  The strongest thing going for a dissident is the  Niemoeller argument, which is that if you don’t defend me, they’ll come for you.… 

The trouble is that this argument just doesn’t work in China, and the government has a very strong interest in not making the argument work.  So as a result, as long as you don’t cross any red lines and don’t do anything that obviously threatens the Party, they government doesn’t come after you.  This includes most things that people really want do discuss.  There is pretty active debate on things like monetary policy or bankruptcy law, and so most people in China really don’t think that the government is going to come after them, and so people don’t really get outraged over dissidents.

In fact it works the other way.  Because people *can* have debates over monetary policy and the role of Chinese courts, this keeps the Party from doing stupid things.  The Party allows a lot of discussion on some issues because it has figured out that discussion on those issues *helps* it to stay in power.  But if you have someone that acts in a way that clearly threatens the Party’s hold on power, that person will get stomped down.  What happens in practice it that people change their demands so that “Getting rid of the Party” isn’t one of them.

People are very adaptable, and they surprising get used to restrictions on free speech.  For example, I work in a large corporation and while I may or may not grumble about the management, I’m not going to put up a poster saying that the CEO should get fired or telling people that they should join my labor union.  I’d get fired.  However, at the same time within the limits of what I can say and do, I can get a lot done.  I can and do disagree with how things are run, and by expressing those disagreements in “approved forms” I can actually get quite a bit done.

The fact that I’m used to the type of restrictions on free speech in large corporations means that I’m not likely to get outraged when the Chinese government has similar restrictions, and this goes for lots and lots of other people who also work in large corporations.  That the restrictions on free speech in China are very similar to the ones in corporate America is not a coincidence as they are both large bureaucratic organizations.  Yes people of a liberal bent will get annoyed at all of this, but at the end of the day, who pays your salary?

Personally, I think that there is value in being about to say what you think, and I’m doing what I can to push China into a system that is more open.  But you have to look at how things are, and be able to talk about them.  The strategy of “human rights through headlines” I think just doesn’t work, because in order to get anything done requires years and perhaps decades of effort, and trying to change things via outrage just causes you to get burned out.

January 28, 2008

China macroeconomy policy – The Mirror World

Filed under: china, finance — twofish @ 7:02 am

The important thing about the dividends is that this is the first time that the PRC government has asked for dividends from the state owned enterprises. This is in part because this is the first time that SOE’s are making profits.

I think that in the PRC dividends are likely to be anti-cyclic. When the economy is booming, corporate profits are high, and having the state take dividends from the SOE’s and do something like buy back borrowing creates a Keynesian cooling of the economy. When the economy is in a down cycle, dividends are smaller which leaves more money for the SOE’s to invest.

Dividends are likely to play a different role in the PRC economy than in other economies for two reasons. Dividends in the PRC are going to mostly to the state, which means that they are basically a form of taxation. The second unique feature of the PRC economy is that most investment spending doesn’t go through the banks, but rather through invested reserves from the state owned enterprises. Hence, dividend policy is likely to be more effective than interest rate changes.

In fact, one possibility is that interest rates in China might work the reverse than they do in the West. Most companies in the West are consumers of capital. When interest rates increase companies borrow less and so the economy slows. In China, enterprises have large cash reserves so when interest rates increase, this provides more return to the companies which allows them to spend more.

For households, the possibility exists that interest rates are a Giffen good. When interest rates decrease, households save *more* in order so that they can spend more on funding social welfare and pension needs. So when interest rates increase, households save *less* so sense they have more money available.

This would nicely explain why interest rates increases in China don’t cool the economy and why other tools like dividends, reserve rates, and forced sterilization are necessary.

January 25, 2008

Davos/New York Times does something right

Filed under: china — twofish @ 10:21 am

I’m usually very critical of the New York Times’s articles on China, particularly those of Howard French, but there are two things that the NYT has done recently that I think are examples of very good journalism.

The first is the blog that they can on the World Economic Forum in Davos

which is one of the best examples of the use of internet to do journalism that I’ve seen in a long time.  Rather than report on Davos with just a two page summary, they have a diary that goes through each talk and basically lets people that can’t afford a ticket to Switzerland have a seat at the table.  I think this is a good model for what “conventional media” can do with blogs, and I’m awaiting someone doing this sort of thing on the 2008 campaign trail.

The next example of good journalism is the coverage of the Societe Generale debacle.  The initial press releases by SG extensively used the word “fraud” which I thought was a way of framing the situation.  What’s interesting about the New York Times article is that it doesn’t use that word, and asks the obvious question, how could a bank let someone lose $7 billion?

January 17, 2008

Please keep talking President Chen….

Filed under: china, taiwan — twofish @ 3:48 am

It seems that Chen Shui-Bian is trying to destroy whatever little chance Frank Hsieh has of winning the March Presidential elections.  Whatever Hsieh does, he needs to develop his own voice and own policies, so while Ma Ying-Jeou is going on think tank after think tank talking about what he would do if elected President, Frank Hsieh isn’t saying anything because the moment he tries to say something, Chen Shui-Bian opens up his mouth and drowns him out.  Personally, I have absolutely no idea what Frank Hsieh is going to do as President.  All I know is what Chen Shui-Bian would like him to do, but I don’t know anything about Frank Hsieh.

The other thing that Chen is doing is just convincing everyone that he really can’t be trusted.  He’s been quoted in the China Times as saying that he has gotten an invitation to visit Washington after 5/20 by the head of the American Institute for Taiwan.  This may be the case, but I doubt that AIT would have wanted that news released to the press right now.  It’s this sort of thing that’s losing Taiwan allies and potential friends.

It’s also that Chen is rather out of touch with the situation.  He points out that he won the election with 50.1 of the vote while the DPP won only 34 in 2004 and the DPP has increased its vote totals this year.  All true, but the TSU had 9% of the vote in 2004 and got demolished this time.

Anyway, it’s already late in the day, and converting a defeat into a victory is going to be a challenge for Frank Hsieh.  He has to articulate a vision for Taiwan, overcome organizational chaos among his supporters, and take advantage of any missteps by the  Kuomintang.  Difficult, yes.  Impossible, no, and if it one thing that I learned in 2004, it’s that anything can happen in an election, and not to assume you’ve won until after the votes are counted.

However, the more Chen Shui-Bian talks, the harder the job it’s going to be for Frank Hsieh to pull off a miracle.  Chen has made it extremely difficult for Frank Hsieh to portray himself as a moderate.  He is also making it very different for Frank Hsieh to set the agenda for the election.  For example, Frank Hsieh *could* point to his administrative experience as mayor of Kaohsiung, or campaign as the “nice candidate”, but Chen is closing those avenues off for him.  Also by saying anything, Chen is making it difficult for people to imagine Frank Hsieh as President.  Frank Hsieh really needs to be out there, shaking hands, giving speeches, and looking like a leader.

So keep talking President Chen…..

January 15, 2008

Stanley Fish shows how awful academia has become…

Filed under: academia, history — twofish @ 6:53 am

There are these sad and awful writings by Stanley Fish that I think illustrate how out of touch and useless academia has become, and why we really need to rethink the entire system of higher education.

I happen to come from an intellectual tradition that believes that the role of the intellectual in society is to serve as leaders and examples for the community and to carry the eternal flame from past generations to future ones. The fundamental belief is that if people think about what they are doing, and learn from the past, that in the end society benefits. One reason I find myself outside of academia and in the world of business and commerce is that I find far more people on Wall Street who are trying to use their skills to make the world a better place than I’ve ever found in academia. Something I find shocking is that academics don’t really try to use their skills and their learning to make even academia a better place.

You can’t argue that a state’s economy will benefit by a new reading of “Hamlet.” You can’t argue – well you can, but it won’t fly – that a graduate who is well-versed in the history of Byzantine art will be attractive to employers (unless the employer is a museum). You can talk as Bethany does about “well rounded citizens,” but that ideal belongs to an earlier period, when the ability to refer knowledgeably to Shakespeare or Gibbon or the Thirty Years War had some cash value (the sociologists call it cultural capital). Nowadays, larding your conversations with small bits of erudition is more likely to irritate than to win friends and influence people.

Utter nonsense.

Great art and great literature let’s people try to answer or at least ask the really important questions. For example, “why do I want to be attractive to an employer?” “what does an employer find attractive?” Reading Hamlet to be personally very useful because it gives you an appreciation of irony and of tragedy which is really useful for day to day official social interactions. How is Byzantine art useful to an employer? I don’t know, maybe an expert in Byzantine art can tell me, but one thing that I’ve found is that creative people are always on the look out for something new and different and you can often find something new in something old. As far as the Thirty Years War and Gibbon, it might not be that useful when you are at parties, but it is deadly serious that you know something about history when you go to vote.

It’s a pretty idea, but there is no evidence to support it and a lot of evidence against it. If it were true, the most generous, patient, good-hearted and honest people on earth would be the members of literature and philosophy departments, who spend every waking hour with great books and great thoughts, and as someone who’s been there (for 45 years) I can tell you it just isn’t so.

That says something really, really bad about literature and philosophy departments and not something bad about literature and philosophy. Academia nowadays actually discourages people from thinking big thoughts and coming up with great ideas.

As far as the usefulness of literary analysis. Prof. Fish points to an example where he analyzes a line an in old poem. Interesting. Now the ability to do that sort of analysis comes in to be *really* useful if you start using it on a 30 second television commercial or if you are writing a 30 second television commercial. Look at any campaign ad or ad for orange juice. It’s in effect a poem that wants to get you to feel something and once you feel that something, it makes you want to go out to do something. If you can analyze what it trying to make you feel and why, then you can make more intelligent decisions about whether you really do what to do that something.

Do humanities courses change lives and start movements? Does one teach with that purpose, and if one did could it be realized?

If the answers to these questions are (as I contend) “no” – one teaches the subject matter and any delayed effect of what happens in a classroom is contingent and cannot be aimed at – then the route of external justification of the humanities, of a justification that depends on the calculation of measurable results, is closed down.

That says something bad about humanities professors and not about humanities.

Assuming that if they had been schooled in the right texts (Paul Krugman rather than Milton Friedman, Cornel West rather than William Buckley) they would have devised better policies is a fantasy, and indeed, it is the same fantasy the neoconservatives buy into when they argue that if we were to introduce radical Muslims to the writings of Jefferson, Madison and J.S. Mill, they would learn to love freedom and stop wanting to destroy us. The truth is that a mastery of literary and philosophical texts and the acquisition of wisdom (in whatever form) are independent variables.

No. This isn’t true. I doubt that anyone who has read Aristotle, Thucycides, or Gibbons would have make the same mistakes that the neoconservatives made. Also if you are widely read, you would have read the Koran and the writings of Islamic jurists to understand the culture and the mindset of the middle east. As far as introducing radical Muslims to Jefferson, Madison, and Mill, I don’t know how they would react. Give them some of those texts and start having a dialogue. Find some suicide bomber, give him a copy of Jefferson, and ask “what do you think about this?” I’m pretty sure that the answer to that is going to be more useful than if you try drowning him.

I should point out that this is a shockingly simplistic notion of what it means to be educated. Because educated means *reacting* to texts, not merely passively absorbing them. It means being part of a conversation with the author even if the author has long since been dead. Someone who is educated makes what they read part of them, even if they disagree with it.  It’s not a matter of the “right texts” or the “wrong texts”.  It’s a matter of being exposed to a wide variety of contradictory information and trying to make some sense out of it.  Someone really can’t claim to have been educated in economics for example, unless they’ve tried to read both Adam Smith and Karl Marx (Marx is more fun to read the Smith).

The Wrong Conspiracy

Filed under: china, finance, globalization, new york city, taiwan — twofish @ 6:11 am

Something that I find rather amusing is how people focus on the wrong conspiracy and miss things that are happening under their noses.  Tenement palm talks about a “China threat” writer that warns about the Chinese conspiracy to attack the West via nanotechnology, while missing completely the true devious and underhanded plans Beijing really has.  The real conspiracy is that China plans on becoming a great power by convincing people that they will become very rich and benefit them personally if they help China become a great power.  The most devious and sneaky part of the plan is that the easiest way that Beijing can convince people that a rich and powerful China will make them rich and powerful is to undertake policies that will actually make people rich and power if China becomes rich and powerful.

Beijing figures that if most people have their interests aligned with China’s, that there will be much less resistance to China becoming a great power.  So it is useful to Beijing to have lots and lots of cash to shower on people.  Now in order to have lots and lots of cash, you need a good economy, so part of this underhanded and devious plan is to restructure the economy so that China generates lots and lots of wealth.  This is where Wall Street comes in.  Since people on Wall Street know how to make money, China is bringing in lots of expertise so that it can figure out how to create wealth that will make lots of people rich.

Of course the China threat theorists would have us believe that China is really intent on using military force on destroying the West and taking over the world.  This notwithstanding the fact, that China is in no position to undertake an arms race with the United States, and history has shown that more weapons often leads to less security, both by diverting money that could be used to fund civilian ventures, and by scaring away your potential allies.  By contrast, you make more friends by smiling and throwing around a lot of cash, and if your friends can figure out ways that you end up with even more cash…. Well so much the better….

China does have this advantage of having had people think about how to structure a state for several thousand years.  The notion that the basis for a powerful state is strong economy rather than a strong military can be found in pretty much any writer from the Warring States period.  There has been several thousand years of discussion on exactly what economic and political policies are most beneficial and the latest discussions are part of a conversation that has been going on for a long, long time.  There is a similar body of knowledge in the Western canon, which unfortunately seems to be unused.  All of the stuff that is happening in the news today would have been familiar to Confucius, Sun Zi, Aristotle, and  Thucydides.  The difference is that in developing and thinking about grand strategy, the Chinese leadership does try to make use of history, while I don’t think that similar discussions are happening in Washington.

January 12, 2008

Wow….. News from Taiwan Elections

Filed under: politics, taiwan — twofish @ 4:55 pm

Wow……..  The KMT won 86 seats in the legislative elections.  That’s absolutely amazing.  Much better than I imagined.

Politics is a hard thing.  It’s hard when you lose.  It’s even harder when you win.  Now comes the hard part of trying to figure out how to turn an electoral mandate into something that benefits society.  So why did the KMT win big?

1) The new electoral system was wildly biased in favor of the KMT.  Taiwan just moved to a single member district system.  This benefits the KMT is a lot of different ways.  Single member districts magnify small differences.  The rules are set up so that every county has at least one seat which gives the KMT 10 seats for free.  Northern counties tend to be 60% in favor of KMT whereas southern counties are 90% for DPP, and a single member district magnifies that.  The KMT was able to marginalize the PFP whereas the DPP was less successful with the PFP.  The electoral system that was used in this case was so wildly in favor of the KMT that had the KMT been in power all of this time, the DPP would have (rightfully) been screaming.  However since the DPP agreed to this, they don’t have any grounds to complain.

My guess as to why the DPP agreed to this electoral system is that Chen Shui-Bian seems to want to make policy without consulting technical experts, and this is an example in which it was disastrous for the DPP.

2) Chen Shui-Bian would not shut up.  Chen has a popularity rating of 20%.  In this situation, the logical thing to do is to have Frank Hsieh portray himself as a “new fresh start” and to distance himself from Chen.  The trouble here was that Chen would not let him.

3) Taiwan has changed in the last eight years, and the KMT recognized how Taiwan has changed whereas the DPP has not.  The DPP under Chen has been stuck in the late-1990’s or even the late-1980’s and taking about themes that make no sense to Taiwanese voters today.  The DPP’s theme was about KMT oppression and corruption, and they haven’t had the recognition that they have been in charge the last eight years.  You have a new set of voters that were born completely after the KMT authoritarian period and when they think “corrupt party” they think DPP not KMT.

This extended to the independence theme.  One trouble with talking about Taiwan independence is that in a polarized political context, people will try to change the meanings of words and define terms to mean what is most political favorable to them.  It’s a neat trick in political debates, but it makes trying to figure out what people really want to be difficult.  Different people want different things, and people want complex and often contradictory things.  My sense of the Taiwan electorate is that most Taiwanese really don’t care that much about a seat in the United Nations.

They do care about self-government and they really care about “Mainland arrogance” but Beijing has been very quiet and careful about this.  Every time Beijing opens its mouth, something stupid comes out that makes people in Taiwan angry so in most situations the best thing for Beijing to do is to just shut up.  That’s what they did in this situation.  Also what has helped a lot is the communications between the KMT and Beijing.  I’m pretty sure that people from the KMT were quietly advising people in the Taiwan Affairs Office on what to do and say and what not to do and say, and Beijing was listening since the KMT knows more about the electoral politics of Taiwan than anyone in Beijing does.

Personally, this is one reason I do like multi-party parliamentary systems.  It’s a bad thing if you have a single group of people in power for a long period of time and that goes for any group, and the nice thing is that Taiwan has come up with a system in which power can shift without anyone getting killed in the process, and that’s a tremendously difficult thing to bring about.

It makes life difficult for politicians and people who are passionate about politics.  One reason to enjoy moments of victory is that they don’t last for very long.  I remember how dark things were for me in 2000, and I also remember how scared and depressed I was in 1996 during the Taiwan straits crisis.  There have been moments of shear defeat before, and they will happen again, but as much as I disagree with the DPP, knowing something about how they *feel* right now makes me act in nice ways since I hope they will return the favor when the KMT gets defeated in a massive landslide at some point in the future.

One thing that helps me think about politics is to think about people playing roles as actors on a stage.  I turned out to be an ardent Chinese nationalist and reunificationist largely because of who my parents were and because of events in my life and their lives that were almost random.  Change history, then I turn into a different person.  The side that you play in a historical drama is something that you can’t control.  What you can control is how you play it, and that’s where being honorable and gracious comes in.

Another thing that politically passionate people forget is that most people don’t think like them.  The reason *I* support the KMT is that I’m a strong Chinese nationalist with emotional attachments to the cause of Chinese reunification.  People that think like me make up a very, very small fraction of the Taiwanese electorate so one thing I have to do is to come up with arguments and ideas that appeal to much larger numbers of people.   I don’t hide what I believe and what I want to do, but I do realize that it is irrelevant for most of the people I try to convince.  One thing that makes me different from a lot of the people in the DPP, is that I don’t think that people “naturally” believe things.  You have to spend a lot of work thinking about how to package your ideas and present arguments that people care about.  One of the hardest things for someone who is politically passionate to do is to *SHUT UP AND LISTEN*, but listening to people is the most important part of what you need to do.  Even the simple act of listening to someone and taking what they say seriously helps you to get their votes.

About Chinese reunification, one thing that makes me strongly supportive of Taiwanese democracy is how much closer we are to Chinese national reunification than we were in 1980.  We aren’t close, but we are much closer.  The process of national reunification involves undoing damage that took decades and it’s going to take decades, and in the mean time the world changes.  Taiwan is much more firmly integrated into the greater Chinese economic community than it was in 1980, and as long as no one panics, we could see a “temporary agreement” that freeze things while people make the necessary political and economic understandings to make things happen.

A lot of conversations that I’ve had with people involve “Ha!!! Ha!!! This poll shows that Taiwanese are against you so *give up*.”  I don’t react this way to polls, since what I believe is too important to me to give up even if everyone  else disagrees.  If it turns out that 30% of the people in Taiwan agree with me, then I’ll think of ways to turn that into 35%.  If 5% agree, I’ll think of ways to turn that into 10%.  If only one other person in Taiwan agrees with me, I’ll find that one person and see we can turn two to three.  Yes, it feels lousy to be in a room when everyone else things you are crazy, but you get used to it.  It’s in defeat that you have to think about what you really believe and why.

Anyway I’ve been thinking what I would do if I were a DPP supporter.  I have some ideas on what Frank Hsieh should do, but I don’t want to give away too many ideas to the other side, but I’ll mention something obvious.  The big challenge he has right now is to avoid demoralization of his supporters and to outline a vision that prevents organizational collapse.  He has to do this and he has to do this quickly.

As for me, I’ll have to spend the day thinking about how this fits into my own plans…………..

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