The Sum of All Fears. .

I saw this train coming down the tracks long ago. I didn’t need a high school diploma to make economic predictions, at least in the face of the drama in Euroland. 

Sooner or later the European Union was going to turn East. Unless you’ve been happily hiding under a rock, everyone knows that with Greece and Italy dragging the rest of Europe along into its economic mess, it was only a matter of time before they went to the one source they would rather avoid. China, that is. 

Knocking on China’s door comes with strings attached, and that is where anyone will imagine Nicolas Sarkozy and Angela Merkel scratching their chins.

Every economic historian will point out that China’s rise to stardom occurred through some radical reforms and not-so-admirable antics. The West spent the past 50 years criticizing the Chinese for their disregard for individual freedoms and many aspects of free enterprise. The Chinese didn’t budge, haven’t budged and with the global financial landscape heading to hell in a hand basket, the Chinese are unlikely to rethink their strategy. The only trouble is that the Chinese economic landscape is riddled with humanitarian landmines, well documented and criticized.

China is the largest holder of foreign currency reserves in the world with more than $3 trillion in its secret stash. Even more, the Chinese economy is growing fast, whiles others are still struggling to make sense of debts and fiscal mismanagement. With Europe begging for salvation from Beijing, the Chinese have every right to think “who’s laughing now?”

The United States in their part has done well by hooking its economic engine to the Chinese train. That’s a conversation worth its own blog, but at least it still maintained its dignity and leverage with market size and spending power. The African countries hitched onto this train long ago. The EU will do anything at this juncture to save the lingering gloom.

 Not so fast. . .

You can bet Chinese President Hu Jintao will be asking what’s “in it” for him. It’s one thing bailing out a wobbly company, or even a country. It’s an entirely different ball game trying to nudge a trade bloc or customs union to act. While China will be the logical savior of the European crisis, there is still a school of thought that feared this day.

Of course there are many people who dislike that thought of the world sitting at China’s feet. The world can only whine, bark and cry at any geopolitical or economic issues it crosses hairs with, - but can’t do “diddly squat” about it. That’s the crux of the fear but the West has itself to blame, but perhaps the West has had its time to bask in the sun. 

The next decade promises to be interesting and tricky, but one thing we know for certain is that the sun will be rising from the East.

Friends with Benefits

An almost mistaken notion that has floated in many economic circles in the United States is the assertion that US economic survival hinges on China’s success. True, - except that there is another side to that coin. China’s and the Asia Pacific region’s economic success is equally stuck to the hip of the US economy.

The moral of the story, - both countries will be well served to - not only acknowledge - but embrace this vital interdependency rather than going to war over currency manipulations and trade tactics to “have their cake, and eat it too.” In the end, no one wins, and both trading partners are too busy fighting over who will flood global markets with short-term economic gains.

If I was a fly on the wall at the Asia-Pacific Economic Cooperation (APEC) summit this past weekend, that is the underlying storyline I will be dying to hear. Through no fault of theirs, the United States general public equates China and Asian economies as the parasite to domestic success. Outsourcing and offshoring of manufacturing jobs have taken their toll, especially in cities and starts that previously boasted of assembly lines and manufacturing jobs.  But no one took the time to explain the dynamic of the global markets and the role of technology in modern society.

The times changed, - globalization opened markets and gave access to cheaper labor, efficient business models and huge potential profits. Every country has had to rethink its value proposition and rethink its international service offerings. As you would expect in a world where trade ad international business is gradually turning into a mutually exclusive battle ground, - there will be winners and losers. 

It helps to let both sides understand that just as the United States presents a ready-made market for most products and services, Asia Pacific brings the world's second-largest economy to the table. Economic theory therefore suggests that both entities stand to gain, as long as both are not going to war over the same market share. Welcome to the future; - the name of this game will be innovation, - end of story.  

If there is any hope for win-win economic gains, it will start with cooperation, sustained growth and long-term relationships based on mutual interests, rather that smokescreens and protectionist barriers. For the US, APEC is the friendship that is turning out to be vital to its growth – and job creation.  In his own remarks, President Obama sees any connection with Asia as a chance to “increase trade, spur innovation, promote ‘green growth’ and ease barriers to travel and interactions.” I admit my naivete and economic delusions, but I have a feeling the sentiment is no t too different from the other side.

The operative world is fairness. As long as there is mutual benefit and all countries get their fair share in export revenue, most economic onlookers will nudge the US ease the pressure on their Asian counterparts especially and allow free market forces to lead the way. 

But [and there is a big “but”] for that to work, the Chinese especially, will have to hold their end of the bargain with currency devaluation and protection for intellectual property rights.

Either way, this is a classic case of “friends with benefits”, - there will always be secrets and suspicion.

Just a thought.

The African-UK Homosexual Fiasco

Ghana is not the first - and certainly won’t be the last - country to define its moral and sociopolitical sovereignty, and making significant international tradeoffs in the process.

UK Prime Minister David Cameron has recently proposed cutting financial aid to countries that have “failed to respect gay rights.” The swift response from African countries where homosexuality has no place in the cultural fiber was unanimous, and perhaps the only person to find this surprising will be David Cameron himself.

For African countries whose economic survival latches onto other developed countries in the West, they only have themselves to blame for the inevitable tradeoffs. Its one thing threatening to disengage from a business transaction with a country (for whatever personal reason), but it’s an entire different story line (a shameful one at that) for social standards to be a prerequisite for donations.

Lest we forget, as progressive as David Cameron will want the rest of the world to believe that gays and lesbians in the UK (or in the West) have all the fundamental rights, the UK has its own social problems that it is still struggling with. Flip the script: - Imagine Ghana’s president asking the UK to perform rituals and pour libation to ancestors on national celebrations, as a precondition to any international trade. You can easily imagine the response.

No one is telling the UK how to run its business, or define its moral and social culture, - and probably no one ever will, - because it didn’t show up begging for international aid. Case in point, many people around the world think the monarchy in England is a pointless tradition but as long as no person’s fundamental human rights are violated, the Queen can have as many celebrations as she wishes, and that’s her business.

Never mind the African cultural definition of marriage being a union between a man and a woman, thus have no need to recognize any other union, - assuming African countries heed to the Cameron proposition, what’s next? How much of the African moral ideology is David Cameron willing to rewrite. 

In all fairness, the US is 235 years and still dabbling with hundreds of social crises, with gay and lesbian rights being one of them. African countries are still struggling with fundamental democratic institutions (as straightforward as that may seem to Western nations) that have being foreign to its society, who is to say what such a “foreign” concept does to its society. For those with short anterograde amnesia, be reminded that there are Americans in 2011 who believe they can “pray the gay away”, and still unsure of how to honestly accommodate the LGBT community.

While on his moral crusade, David Cameron might be well served to chat with Iran, Saudi Arabia and perhaps share his point of view to the Arab League as well. Something tells me they won’t be too diplomatic with their responses.

My point? Not long ago, the rest of the world looked at the USA with disdain because of the assertion that the USA attaches strings to every decision, and makes it their business telling everyone else how to live their lives. The USA figured this out, and subsequently identified what issues it chooses to abstain from. Let Obama explain it, [and that’s where Cameron should take note] besides genocide, and other human right abuses, there is a level of respect accorded every sovereign nation to conduct itself as it fits its social and cultural values. There are some that outsiders will find archaic and utter nonsense, but as long as fundamental human rights are respected and no one is crucifying anyone for being tall, short, gay or black; - everyone ought to mind their own business.

As a side note, David Cameron comments came at the just ended Commonwealth Heads of Government Meeting in Perth, Australia, where the alluded to the legalization of homosexuality as being critical to “the future relevance of the Commonwealth.” I am dying to ask when was the last time the commonwealth was relevant? And relevant to whom?

Back to my main point; - there is a fine line between respect for human decency and a pointless cultural witch-hunt. 

For instance, reports surfaced last year of a crackdown on homosexuals in Ghana, supposedly ordered by a high ranking government official. Such subjective repressive acts on individuals [in my opinion], is no different from the Tutsi-Hutu genocide in Rwanda, the Darfur massacre in Sudan and the tribal disaster by Slobodan Milosevic in Kosovo. I can see David Cameron asking governments to respect the fundamental human rights; I am a strong advocate for the same. But to ask African countries to legalize homosexuality regardless of what their internal social and cultural structures can accommodate it, is a stretch. Making it a precondition for international aid is where it gets ridiculous.

The Italian Job

Prime Minister Silvio Berlusconi is no stranger to controversy and public pressure. That may very well be his middle name. Somehow he survives, or maybe the Italians let him “slide.” Depending on who you ask, Berlusconi is the last person to be Prime Minister or anything, let alone a country whose economy is pivotal to the survival of the European Union as a whole – and by that extension, the rest of the world.

Everyone thought Berlusconi was on the verge of resignation, and a critical vote today was supposed to be the straw that breaks the camel’s back; but somehow the camel is still walking. It is too early to assess the economic ramifications of the Italian parliamentary vote, just as it is premature to speculate how much longer Silvio will ride this ship before his coalition falls apart, and is thrown out of power.

With what we know, Italian government's borrowing costs continue to rise. Yields on Italy's 10-year bonds [an indicator of how the viable the economy is over the long-term] is sitting at an unsustainable 6.71 percent. Key word is “unsustainable.”People who know anything will tell you that Italy’s debt is the catalyst for the economy’s self-inflicted turmoil.

[Allow me to digress] Just last week, all eyes were on Greece, and the highly publicized “50% haircut.” On the grand scale, the EU can afford to babysit Greece until it s economy solves –or even pretend to care about- fundamental economic problems.

Italy is a different story. There is no bailout cash in store, and as the third largest economy in the EU, its debt crisis is sure to give Angela Merkel and Nick Sarkozy sleepless nights. That is the only reason why most pro-Euro zone onlookers think Silvio Berlusconi is part of the problem, not the solution.

Breaking news from Reuters – “A key vote in Italy's Chamber of Deputies indicated Berlusconi has lost his parliamentary majority, piling further pressure on him to resign.”

The fact remains that Berlusconi’s 308 votes, was below the absolute majority he needed in the in the 630 seat Chamber. Whether or not that is enough proof of the country’s no-confidence is a different question.

At the end of the day, there are protesters calling for Berlusconi to quit. Others are pushing for technocratic transitional government to steer Italy through the turmoil and the economic mishmash it finds itself in.

Maybe the Italians will shock the world this time, but if Silvio Berlusconi survives this latest uncertainty and public anxiety, don’t be the least surprised. This is familiar territory.

Driving through a Centennial

100 years of anything is a pretty long time. Under normal circumstances the world bows at your feet and marvel at your timeless wisdom amassed over a century. But that’s under “normal circumstances.”

General Motors’ recent financial fiasco leaves a few people betting on the fence rather than jumping on the GM-success bandwagon. There are many who doubt [understandably so] that somehow the company may have rediscovered its winning ways, and rekindled the vision that sparked its ascension to auto stardom some 100 years ago.

Fair to say, GM has become an icon in an industry that has seen its fair show of downturns and manufacturing musical chairs, - many thanks to globalization, offshoring and automation.

Whether or not Dan Akerson [GM CEO] is still treading the line that carriage maker William "Billy" Durant envisioned, or has any long-term fixes to market forces, is a different story. Billy Durant could never have prepared his company for a world where the Japanese and European manufacturing outfits pose formidable competitive threats to every market share.

Let GM tell their story, their recent misfortunes is only a blip in the legacy and culture of innovation, not a microcosm of organizational inefficiencies and managerial incompetency, but of course, that’s GM telling their own story.

Many years ago, all the company headaches revolved around labor strikes and union wars, notably with the United Auto Workers. Somehow GM cruised through that era without many lingering bumps and bruises, but was completely blindsided by market shift in the new millennium.

Talk to any GM believer [or employee] and they will gladly explain how ultimately the GM story is Americas story, standing tall even in the face of all the undercutting turmoil. True, - Chevy and GM are American icons, more than just a car and a car manufacturer. Cities like Detroit [USA] share the GM story unlike any other, and as a result, have seen their fair share of automobile glory and gloom.

Back to my main point: GM has every reason to tout its centennial celebration, and owes its successes to everyone [including me] whose purchase has kept the brand and company afloat.

A 100 years of survival is worth the celebration for anyone [and anything], but if General Motors tiptoes through another market irresponsiveness and financial fiasco like it had over the past five years, it might not see another 100 years.

Being Herman Cain

America’s political system is as ruthless as any other, if not worse. It boasts of democratic institutions and rule of law, albeit true, but it fails to warn admirers that it can chew a person alive, and spit it out, long before the person knows what bit him.

Don’t go too far down memory lane, - Bill Clinton, George Bush, Sarah Palin, Barack Obama and [insert any politician here], gave cynics, critics, observers and pundits enough material to poke fun at, and air dirty laundry for decades. The very nature of the First Amendment’s right to Free Speech encourages anyone to say anything, and literally get away with verbal “murder.”

Enter Hermann Cain. 

I have not taken the time to delve into his policies, hence I have no intent on embarking on any campaign analysis and break down his poll records. What I know, Herman Cain jumped onto the stage as a Washington outsider, with his own “angle”; - the Pizza Guy. Of course he is richer that the typical “pizza guy” who shows up at your door on Friday evenings, but it made people find him intriguing nonetheless.

The trouble with Hermann Cain is that he “shoots from the hip.” So far, the media and general public have been kind to Cain’s personality, and most haven’t taken him any more serious than John Huntsman and Newt Gingrich. For that reason, anything Cain says or does out-of-line gets some “slack”, especially since you can guarantee Michelle Bachman and Rick Perry to say something much juicier for tabloid headlines.

 The only trouble with American politics [unlike being on the frontlines of war], you can’t shoot first and ask questions later. Public opinion is an inquisitive as it gets, and everyone you met along the way will be in line for their own payday, at your expense.

Herman Cain torpedoed into the national spotlight on the [Mitt Romney –bound] GOP platform, certainly not because he is black, or his catchy 9-9-9 plan, or even being left handed [like Obama], but perhaps because the Republican polls seem to be managed by the same production crew that gave us FOX TV’s American Idol and X-factor.  But just as Cain is turning into a national celebrity, he is learning the strangest paradox in American politics, - that the heat turns up but it also gets coldest at the top.

Never mind Herman Cain’s assertion that Black people whine too much, - or that the Occupy Wall Street protesters are a bunch of dweebs, - or that he will electrocute Mexicans along the southern border. The point being, Herman Cain has made a few goofs in his campaign, and he has himself to blame.

Latest reports claim that two women accused Herman Cain of sexual harassment in the 1990s while he led the National Restaurant Association, and that a financial settlement was reached to keep the story quiet. Oopsie!

Welcome to the national spotlight, nothing will be quiet, and definitely not when you’re the GOP front-runner [whether or not you have a real chance against Obama next November]. People watching closely claim, Cain went from "no comment”, to knowing nothing about the case, to knowing a little about the case, but that he didn't know there had been a settlement. Finally he said there have been an "agreement" and not a "settlement."  

I can hear Herman’s mother quietly whispering to herself, “no son, say it ain’t so.” Remember a guy called Weiner? Sooner or later he recognized the strange man in the photos.

Call me an idiot, but I have a feeling Herman Cain is a straight-up guy, and perhaps have some good ideas for America. I don’t have a crystal ball to tell his political future, but American politics can is honestly cruel, and certainly such blunders do little to help. My bet is, Cain will learn; but American politics is always on the lookout for the next train wreck.

If Herman Cain survives to live another day, he will also learn way Barack Obama learned along the way; - presidential politics have no mercy for rookies with captivating smiles [see Herman Cain ad].