Category: History – Various Lands

Davos Man

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The Book of the Week is “Davos Man, How the Billionaires Devoured the World” by Peter S. Goodman, published in 2022. As the now-cliche joke goes, “You can tell Monopoly is an ancient game because there’s a luxury tax and rich people can go to jail.”

Yearly, about three thousand, super-rich people gather in Switzerland at a five-day conference called “Davos.” The least wealthy people there consist of journalists, academics, diplomats, entrepreneurs, activists and senior government officials. The billionaire-attendees (whom the author called “Davos Man”) pay lip service to the world’s social, economic and environmental problems, and behind closed doors, discuss how to profiteer in connection therewith.

In the last half century, Davos Man has enriched himself through making campaign contributions to politicians who have legislated:

  • monopolistic practices
  • tax cuts
  • excessive deregulation and
  • gutting of social programs.

The above favor powerful, rich people in Silicon Valley, New York City and Washington, D.C. Their propaganda campaigns brainwash the masses into blaming:

  • China
  • immigrants whom they believe are taking their jobs away, and
  • automation

for the working classes’ job losses.

The author argued that the common people in most industrialized nations of the world should blame DAVOS MAN and politicians, who are sometimes one and the same!

Davos Man– the modern-day Robber Barons– salve their consciences through philanthropic activities that are comprised of a tiny, tiny percentage of their businesses’ profits. Plus, the author contended that it is a Cosmic Lie that tax cuts pay for themselves by spurring spending.

During the COVID pandemic, the American Davos Man enriched himself through incestuous corporate / political relationships: “The United States had employed a Rube Goldberg contraption, with [Steven] Mnuchin’s slush fund [in the U.S. Treasury] funneled through Jamie Dimon’s bank [JPMorgan Chase], and Larry Fink’s firm [BlackRock] buying bonds on behalf of the Fed, allowing Steve Schwartzman’s private equity empire [Blackstone Group] to borrow for free.”

The English government convinced many of its people that through Brexit, their nation could decide its own financial fate. But Davos Man actually ended up collecting a boatload of their hard-earned taxes. Meanwhile, Argentina was defaulting on its loans for the tenth time in the last half-century. The aforementioned Davos Man, Larry Fink, blamed Argentina for the resulting disastrous losses of his clients at BlackRock. BUT– his firm was the sucker that lent it the money!

Anyway, read the book to learn of: Davos Man’s activities in various countries of the world– that resulted in skyrocketing wealth for him, and plummeting economic security for everyone else; why the author is still optimistic that the world can reverse the current, cold-hearted global financial climate in which inequality between rich and poor is ever-widening (hint: creative ideas on community cooperatives are in the air, but also– read Amy Klobuchar’s tome on antitrust issues); and the economic history explaining how Davos Man has become so rich and powerful.

The Nightingale’s Song

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“Some looked on his cavalier attitude toward the facts as a harmless, at times amusing sidelight to his high-octane personality. Others seemed to view it as a disability for which he bore no responsibility, like a clubfoot.”

–regarding Oliver North’s lies and credit-grabbing but incredible work ethic in doing a job, and lack of accountability in the event of failure or wrongdoing

The Book of the Week is “The Nightingale’s Song” by Robert Timberg, published in 1995. In this large paperback, the author provided biographies of a group of Naval Academy-at-Annapolis graduates of 1958, 1959 and 1968. Their backgrounds provided insights as to their behaviors, and how they fared at the end of the Reagan Era. The group included John McCain, John Poindexter, Bud McFarlane, Oliver North, and Jim Webb, Jr.

During the Cold War, there were countless ways the United States government, through propaganda, incited phobia across-the-board that the Soviet Union might attack with nuclear weapons. In July 1958, the U.S., pursuant to such phobia, loaded nuclear missiles(!) into AD Skyraiders that would presumably counterattack if the Soviets got aggressive in Berlin or North Korea. For, the U.S. was distracted helping the president of Lebanon stay in power, as there had been a coup in Iraq. McFarlane participated in the Skyraiders endeavor, despite his alarm.

In late 1967, McFarlane was sent to Dong Ha, where he saw that the American senior military leadership was conducting the war extremely stupidly. They had pipe dreams of high-tech installations– while the infantry and artillery suffered shortages of basic supplies. A killing-the-enemy quota was imposed on the front-line soldiers, but the enemy was using guerrilla warfare.

Vietnam veterans such as McCain, McFarlane, Webb, North and Poindexter did their patriotic duty, and entered public service. While they were fighting, however, antiwar protesters and draft dodgers entered the professions and the political arena. “The president and many politicians appeared to be cheering them on.”

Further, the younger generation of civilians appointed by Robert McNamara (Secretary of Defense in Lyndon Johnson’s administration) behaved haughtily toward the former old-school military leaders (WWII and Korean veterans) who were then serving in the federal government. The former were comprised of a “pampered, unbloodied elite.” Congress scapegoated senior military leaders over Vietnam. The usual egregious hypocrisy abounded over Monday-morning quarterbacking. There was serious brain drain from the Navy, and budget cuts, too.

North, McFarlane and Poindexter had met at Annapolis and were reunited in the National Security Council during Reagan’s first term. In early 1982, critics claimed there was a lack of foreign policy experience. That was disputed at a meeting of Reagan’s top staffers. Meanwhile, McCain was still recovering physically and psychologically from having been a prisoner of war in the “Hanoi Hilton” for five years and change.

In mid-1981, McCain insanely decided to run for Congress from the state of Arizona, even though he was labeled a carpetbagger. Having never lived in Arizona, he joined his wife’s family there. His campaign had a very short year and a half before election day, to get his name and platform known, raise money, etc., etc., etc.

All through the Reagan years, there was a constant tug-of-war between the policy makers in the White House, and the military men in the Pentagon. As a consequence, countless dangerous situations ensued; one occurred in the early 1980’s: each gave contradictory orders to a troopship off the coast of Lebanon. The men appointed to high-level policy positions in the White House (i.e., the major perpetrators of the Iran-Contra scandal) eventually went rogue– ignored the chain of command, and thought nothing of it.

In the mid-1980’s, the men in the Reagan administration argued over what to do about the mentally unstable Libyan dictator Muammar Gaddafi. They decided against killing him altogether. The reasoning went that he’d be viewed as a martyr, prompting Arab terror groups to counterattack with vicious vehemence. Poindexter simply wanted to humiliate Gaddafi, and maybe ordinary Libyans would be grateful, and finish getting rid of him themselves.

Of the Iran-Contra scandal, the author wrote, “If nothing else, the administration acted in a muddleheaded, thoroughly unprofessional manner… Administration spokesmen denied any American involvement [on the the CIA-Contra aspect of it] but evidence that they were lying piled up quickly.” By the mid-1980’s, Americans of “Generation X” and older, could see that the Cold War hysteria about Central America generated by the American government was overblown. The region was like Vietnam all over again, complete with guerrilla warfare.

In July 1987, North became a TV star when he testified at the Iran-Contra hearings. He launched a blistering attack on Congress. He considered himself a man of honor in actually helping the Contras because he kept his promise that he would. His other defenses were: the goal was to free six American hostages in Iran; secure supplies for American troops because their lives were at risk. On the other hand, North engaged in very illegal activities: shredded documents, committed perjury, broke federal law by skirting Congress and the president in funding operations that affected numerous people’s lives– and even put lives at risk.

Curiously, the author failed to provide significant information on a major component of the Iran-Contra story: William Casey and his CIA. Casey was conveniently dying of a brain tumor (a smart career move) when the scandal broke. This book, therefore, is missing a major ingredient. It is like baking a cake, and omitting the sugar!

Anyway, read the book to learn additional numerous factoids about the above and other major Reagan-Era characters whose common military schooling gave them a particular mentality and shaped their generation.

Around the World in Fifty Years – BONUS POST

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“What kind of people would so violate the customary rules of survival as to pillage a disabled vehicle and steal the equipment we need to repair it?”

No, the above does not refer metaphorically to a political system on its way to dictatorship, but rather, lawless tribesmen who stole the author’s traveling group’s gas cans, bootjacks and some tools from their Land Rover and trailer in 1966 in the border area between Afghanistan and Pakistan.

The Bonus Book of the Week is “Around the World in Fifty Years, My Adventure to Every Country on Earth” by Albert Podell, published in 2015.

According to the book (which appeared to be credible although it lacked a detailed list of Notes, Sources, References, Bibliography and an index), the author risked his life countless times in all kinds of circumstances. In March 1965 in Algeria, he was lucky not to have been blown up by land mines.

The author had to take flights and other means of transportation back and forth thousands of miles out of the way of his destinations due to diplomatic difficulties between or among territories. He had to postpone visiting a bunch of countries because at the time he applied for a visa, the United States wasn’t on the best of terms with them (such as Chad and Angola). Luckily, he had contacts who helped him get onto their soil via extralegal means. It seemed he had a death wish. Why would a sane person want to visit ultra-dangerous countries that have extremely low living standards, for fun?

Well, in countries such as Chad, Angola and North Korea, up until the late 1990’s, the people who dominated release of information about themselves to the rest of the world, were those in the government or journalists with a martyr complex.

Nowadays, it’s those who have World Wide Web access. So the only way to obtain accurate information about the common people in those countries (most of them did not have Twitter) was to visit them personally. So that is what Podell did.

Of course, the author’s stay was supervised and severely restricted as to what he was allowed to see, but he got clues just by making observations about his surroundings.

Read the book to learn the details of the travels of this James-Bond wannabe.

ENDNOTE: Those who are spreading hate-speech on Twitter are shaming themselves and their own countries– projecting a childish image for people such as Albert Podell, who want to learn about other cultures. As has been recently revealed by a probe led by Jim Jordan (Republican Congressman from Ohio), more of his own supporters launched mean-of-spirit Twitter attacks against the Democrats rather than vice versa. Here’s a little ditty that describes the situation.

OOH, TWITTER

sung to the tune of “Moon River” with apologies to Henry Mancini, Johnny Mercer and any other rights-holders this may concern.

Ooh, Twitter
both sides of the aisle, are sick of Jim Jordan today.

You deal-maker,
you reputation-breaker.

Name-callers need the trolling,
so they’re not GO-ing away.

Smearers and fibbers, angry at the world.
Their political aims are easy, to see.

It’s the same old pol-it-i-cal show, and,
what a huge waste of time,
on the taxpayers’ dime.

Ooh, Twitter, spare me.

Ooh, Twitter
both sides of the aisle, are sick of Jim Jordan today.

You deal-maker,
you reputation-breaker.

Name-callers need the trolling,
so they’re not GO-ing away.

Smearers and fibbers, angry at the world.
Their political aims are easy, to see.

It’s the same old pol-it-i-cal show, and,
what a huge waste of time,
on the taxpayers’ dime.

Ooh, Twitter, spare me.

The Silent War

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The Book of the Week is “The Silent War, Inside the Global Business Battles Shaping America’s Future” by Ira Magaziner and Mark Patinkin, published in 1989. When Magaziner worked for Boston Consulting Group, he would conduct extensive research on industries, markets, businesses and people in order to generate reports that would presumably help his clients (consisting of big-name companies). He argued that America was economically falling behind the rest of the world because it was resisting global trade and because its federal government wasn’t financially assisting business and industry.

One time, in the mid-1970’s, Magaziner’s report’s conclusions contradicted those of his client, a big steel mill company. He asked where the executives got their information. Each one’s source material, “… was all the same– all based on one original study done a few years earlier by some professors.” The executives’ groupthink and herd mentality in relying on old, faulty data led to financial trouble for their industry.

In another case, in the late 1970’s, when General Electric partnered with Samsung to make microwave ovens, they struggled to arrive at the most profitable arrangement for both of them. One major cultural difference was that the South Koreans (unlike the Americans) worked sixty to eighty hour weeks because they believed in making sacrifices for future generations. Incidentally, they sent their children to universities in the United States to be educated, and taught them the value of hard work.

Obviously, Americans too, wanted better for their children, but their labor unions and a different mentality prevailed in their workforce. South Korea eventually became an economic powerhouse, not just with the help of American financial aid, but also through maximizing its exporting of goods.

In the 1960’s and thereafter, Singapore’s leader, Lee Kuan Yew, tried a few different territory-wide economic initiatives that failed. One included legislating a 10% wage increase for all workers. Foreign companies, with all the then-availability of sweatshop labor, simply moved their factories to Thailand and Malaysia, where workers were paid less so that goods could be produced more cheaply.

One successful economic program Yew executed was to train his citizens’ factory workers in connection with an Apple-Computer partnership in the 1980’s. The workers made the sacrifices to attend night-school (tuition-free) after a long day’s work two to three times a week, for two to three years. The benefit for the partnership was that the workers’ experience allowed them to submit innovative ideas to improve manufacturing efficiency. Again, in the United States at that time, labor unions discouraged new ideas lest workers automate themselves out of jobs. Which happened to them, anyway. But the non-unionized Singaporean workplace was such that workers weren’t laid off– they were retrained for higher-level positions.

Yet another reason the United States began to economically trail the rest of the world in the latter half of the twentieth century, was that its securities markets accelerated impatience in America’s corporate psyche. American industry became unwilling to finance and do the hard work of, continuing research and development and take a loss in bad times to keep pace technologically with Asian competitors. It wanted to prop up stock prices instead and make its executives rich quick. Still does.

One company that bucked the trend was Corning. In late 1983, (finally, after sixteen years of losses!) it had the cutting-edge technology in fiber-optics for telecommunications, ready to deliver finished products to its first big customer, MCI, to turn a profit. Corning did it on its own– receiving scant financial help from the United States government.

Times have changed little since the 1980’s, when photovoltaic scientist Paul Maycock remarked, “I hated the whole concept of buying oil from the Persian Gulf and spending $50 billion a year defending that part of the world.” He wasted a lot of time and effort on environmentally-friendly business initiatives. Sadly, those were incompatible with the United States’ strategic interests. The start of the Reagan Era saw the Department of Energy nix further funding for solar-technology research. The solar panels (installed during the Carter administration) on the White House roof were removed.

Further, since in the 1990’s (after the book’s writing) there has arisen an orgy of patent litigation in software and computer hardware. Technologically inexperienced patent clerks and court personnel have made legal decisions that have been economically damaging to the country. Additionally, the American government has a history of eagerly funding innovations that have military applications while denying funding for innovations that have commercial applications.

And yet, astute perpetrators of American foreign policy have damaged other nations’ economies not only by waging war, but also through dispensing bad advice on “shock capitalism” and other subtle (“classified”) methods of indirectly causing mass destruction. So the United States remains the economically dominant nation in the world, despite suffering its share of financial crashes and certain sectors’ damaging policies that weaken it economically as a whole; sectors such as healthcare and education.

Anyway, read the book to learn: of additional business cases that related to the aforesaid themes, and the four major reasons the Japanese technology sector achieved great success in the past.

How I Cracked the Alpha Code – BONUS POST

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“The new guys were preoccupied with being reelected, the demands of which were not well served by ridiculous fantasies like fiscal discipline.”

American politics? Rogers was actually referring to the money managers of the euro in the early 2000’s. He was cautiously optimistic about the euro when it was first launched. Oh, well.

The Bonus Book of the Week is “How I Cracked the Alpha Code” by Jim Rogers, published in 2013. This was a partially autobiographical, extended essay that gave tips on how to gauge economic prosperity and prospects in different places. At all times, Rogers is on the lookout everywhere for investment opportunities. He made his (take this job and shove it) money and retired from investment banking at 37 years old.

Born in 1942, Rogers and his wife and young children tried living in Shanghai and Hong Kong (where there was horrible air pollution) beginning in 2005, before deciding to move to Singapore from New York City.

Singapore requires no security at public events, so it is safe for children. He claimed that the education and healthcare systems are excellent. It has entitlement programs in those areas and in home ownership that are roughly equivalent to health savings accounts and 529 plans in the U.S. with contribution-matching through employers, but administered by the government. The public schools require parents to volunteer to help in various capacities. Medical treatment is a great value compared to that in the U.S. No surprise there. It also has the equivalent of America’s E-ZPass system on toll roads and for parking, too.

However, Rogers merely listed the positive aspects of Singaporeans’ lifestyle. He listed no negatives, except for potential, general economic threats that could affect any nation. Another glaring omission of inconvenient information was cryptocurrencies. But he did reveal his basic philosophy: one’s real worth is what one would be worth if one lost all of his or her money. And let financial entities fail so as to encourage creative destruction. Do not bail them out.

Rogers listed some of the kinds of policies and practices that bring a country down economically: wars, litigation, and incompetent leadership. This blogger would add one more: excessive deregulation. He gave tips on what a nation should do to try to reverse its serious financial position: reform the tax system so as to encourage savings and investment, not consumption; “change the education system” and reform healthcare and litigation.

Read the book to learn more cherry-picked information that bolstered the author’s too brief, too pat pronouncements.

The Death of Money / Dealings – BONUS POST

The first Bonus Book of the Week is “The Death of Money, The Coming Collapse of the International Monetary System” by James Rickards, published in 2014. This was an all-over-the-map hodgepodge of generalizations on global financial trends, economic theory and what the author claimed was the devastation those trends could lead to, as of the book’s writing.

Prior to 9/11, the CIA possessed no expertise in the nefarious goings-on in the securities industry that could presage the occurrence of a terrorist attack. America’s law enforcement and security agencies had plenty of data, but inter-agency rivalry inhibited information-sharing and creativity– that would have allowed them to “connect the dots” in getting more specific information.

Prior to 9/11, American intelligence did detect irregular trading patterns in the stocks of the two airlines whose planes were targeted in the attacks. A tiny percentage of those trades were illegal because they were made by insiders– by the terrorists who knew those airlines’ share prices would soon plummet; the remaining percentage of anomalous trading was done by those who noticed the unusual activity (but not the reason for it) and jumped on the bandwagon.

After the attacks, threat-detection software was created for monitoring not just stock trading, but also currency and precious metals trading. The author wrote that a recently trendy means for bringing down an enemy-nation is: doing serious economic and financial harm rather than physical harm. Assaults on a nation’s technology and infrastructure such as the money-handling parts of cyberspace, aviation, dams and utilities, instead of targeting a country’s military and weapons or people of a specific ethnic group, is becoming the new normal.

The author remarked that China’s institutions are actually at risk for attacks, because the country’s government, economically, owns a large chunk of the means of production and arguably, labor; not to mention, capital. Wealthy Chinese business owners and executives have a co-dependent relationship with (corrupt) government officials. Besides, there are: “cross ownership, family ties, front companies, and straw man stockholders.”

The author warned the reader that a global financial crisis is likely in the offing due to prevailing circumstances in the economic heavy hitters of the world (like, the United States and China); among those circumstances: misallocation of investment funds; employers’ power to minimize benefits and compensation; red ink and the ever-widening, (allegedly alarming) gap between rich and poor. Financial panic is correlated with social unrest. That can lead to revolution.

The magnitude and accelerating frequency of financial bailouts of the last twenty-five years just shows how fragile the economic systems of the world are. In the United States, excessive deregulation fueled out-of-control greed, etc., etc., etc. In Europe, the group of nations that agreed to adopt one currency (the euro) thought the other nations would help mitigate their own economic problems, when in reality– they were putting all their eggs in one basket. In effect, they had to get permission from the others to make significant changes to their economic policies; they were forced into unhealthy co-dependent relationships.

Read the book to get the lowdown on: all the different groups of nations which were trying to diminish the U.S. dollar’s hegemony (hint: BRICS, BELL, GIIPS, SCO, GCC) at the book’s writing; the United States’ economic system explained for laypeople (via a Venn diagram, along with how the author defined “money” and “death”– both buried in the middle of the book); and everything you ever wanted to know about the value of gold, among other factors in the American dollar’s declining power in the world.

The second Bonus Book of the Week is “Dealings, A Political and Financial Life” by Felix Rohatyn, published in 2010. This bragfest described the life of the typical alpha male who rode a fabulous career in the securities industry, starting in the 1950’s.

The aforementioned first Bonus Book described the trends indicative of a dire future global financial situation. Many such untoward events have already occurred in the last couple of centuries (!), and keep happening. Every time, the seeds of financial disaster are sown decades prior to when it hits the fan.

The selective memory and cherry-picking of data of participants and victims (not to mention propagandists!) cause readers to perceive that those kinds of events are unprecedented, or are becoming more frequent. Excuse the cliche, THERE IS NOTHING NEW UNDER THE SUN (For more info, see this blog’s posts: Serpent on the Rock, A Fighting Chance, Since Yesterday, Why I Left Goldman Sachs, The Zeroes and Dot Bomb).

Rohatyn described a few major stressful economic near-disasters that he was asked to help remedy. One situation was early 1970’s Wall Street, which was a house of cards about to collapse. Another was the near-bankruptcy of New York City in the mid-1970’s.

The late 1950’s saw the city becoming a bloated, bureaucratic civil-service gravy train, due to the increasing power of unions. The costs of generous contracts (along with other sociological factors) was eroding the city’s tax base. Local politicians stayed in power by staying friendly with the unions. One hand washed the other.

At the dawn of the 1970’s, the city needed more and more short-term loans from banks. Creative accounting allowed the debt explosion to continue. The city got subsidies from the state and federal governments, but only at the end of its fiscal year, so its deficit ballooned annually before then. The city got generous borrowing terms because it was in the state’s and fed’s best interest (excuse the pun) to deregulate the lending banks, as they were political patrons, too. Eventually, push came to shove.

In June 1975, Rohatyn was appointed to a bipartisan (truly bipartisan!) committee to help New York State governor Hugh Carey draft a bailout plan for the city, three weeks before the date on which the city would be forced into bankruptcy. Fortunately, Carey possessed the right temperament for saving the world.

Read the book to learn more about how the author helped impose some adult supervision in various, serious economic episodes in his career, and more about his career itself.