News New Mexico: 11/02/10

Armstrong Williams: Govern Don't Goad

Armstrong Williams

Today's election results likely will signal an historic shift in the Congress. In some ways, the final picture of what the actual makeup of the 112th Congress may remain hazy and unclear for several days. Just a few short months ago, no one but maybe an optimistic National Republican Congressional Committee Chairman Pete Sessions could have predicted such possible seismic shifts in the political makeup. And I've heard more than a handful of Republican friends and colleagues mutter to me, "Now what do we do if the prognosticators are accurate?" Let's begin with these six steps:

Dems Facing Biggest Mid-Term Loss in Many Years

The Republicans are poised to retake the U.S. House and narrow Democrats’ margin in the Senate, delivering a rebuke to President Barack Obama’s party in a campaign shaped by voter anxiety over jobs and the economy. Republicans, who need a net gain of 39 seats to take control of the House, may pick up at least 50 in today’s elections, capitalizing on concerns about government spending and a 9.6 percent unemployment rate. The party may win as many as eight seats in the Senate, just shy of the 10 needed for a majority. “It’s going to be one of those elections that 10 to 15 years from now people look back and point to as a midterm bloodletting,” said Stuart Rothenberg, editor of the Washington-based Rothenberg Political Report. Voters “are just in a foul mood,” he said. Read here:

GOP Awaits Revival - Dems Brace for Losses

From PoliticsDaily.net - The 2010 election campaign ended with a final burst of voting and unmistakable signs that change, once again, is coming. Two years after Democrats won the White House and four years after Democrats captured control of Congress, Republicans stand at the brink of a dramatic resurgence in Washington and in state capitals. President Obama and former president Bill Clinton were among the Democrats on the campaign trail trying to hold off the GOP tide. But polls, pundits and a grim national mood all pointed toward a Republican takeover of the House, substantial GOP gains in the Senate and a surge in Republican governors. Read here:

Albuquerque Red Light Cameras back on

From KOB-TV.com - By: Jeff Maher, KOB Eyewitness News 4; Taryn Bianchin, KOB.com - Eight out of nine city councilors voted to extend Albuquerque's expired camera contract at Monday night's council meeting. All of the cameras had been turned off for the past week because the city’s contract with Redflex, the Arizona-based company which owns the cameras, had expired. Now when the remaining 14 cameras return they won't ticket speeders, just those running red lights. Earlier this year, the state demanded the cameras at Coors and Paseo, Coors and Quail, and Paseo and Jefferson to be turned off because they were on state highways. Now the city will also terminate three more cameras at Academy and Wyoming, Eubank and

Central, and Menaul and Carlisle. The reason? Safety. A study presented to councilors on Monday showed that those particular intersections have seen a drop in injury-causing accidents but an increase in rear-end crashes. City Councilor Dan Lewis opposed the contract's extension. After conducting personal research he found that for every dollar the program generated for the city cost taxpayers $11, mainly because of how much the city was paying out to Redflex. "This program over a four year period took over 26 million dollars out of our local economy and sent much of it to an out of state contractor," said Lewis. Read more

Understanding China Part IV

The career of Hu Jiantao, (left) the current Paramount Leader of the CCP is still ongoing in 2010. Since Jiang’s gradual exit from the political stage in China it is worth noting that his appointees (Hu and others) mostly came from engineering backgrounds. For the investor it is comforting to know that the “problem solvers” are still in charge in China and the most scientifically educated elements of the intellectual community are well represented in Chinese leadership. It is also very noteworthy that while private property legal rights are crucial to economic development, and they have been enhanced and protected mightily since the launching of the first Special Economic Zones, by and large, lawyers have very little to say about the nature of economic policies that are enacted in China.

19th century Prussian mathematician Carl Jacobi (right) would be pleased with the adaptability of China's leadership. The Chinese have performed a Jacobian reverse on the rest of the world, at least in terms of gaining the edge in economic competition. The leadership in China has “inverted” the economic puzzle so it could be solved. More than any nation on earth, the Chinese have learned that the ideas of Karl Marx are economically impractical. This means the Chinese learned what policies and practices do not work.

On the other hand, the Chinese are not naive or foolish. They wisely concede that there are rare instances and situations where free markets simply do not function properly without some assistance. What the Chinese have managed to do is be practical. They do not endlessly waste resources debating the trite free markets versus central planning issues. Instead, the country, through wise, honest, and practical leadership has incrementally pulled itself away from the horrors of central-planning. And as it has done so, it has steadily prioritized market-based systems that tend to work so well. During this transformative process the Chinese have managed to enjoy a remarkable degree of social order, domestic stability, and breath-taking increases in living standards.

In more pluralistic western democracies, there are no markets more “free” than the elections that determine political power. In America and Western Europe, this particular “free market” is one that clearly “does not always work.” In fact, these free markets are economic Achilles heels (right). In the west, during each election cycle, the free market battle for election victories involves the market manipulating forces of a variety of hucksters and demagogues. Amazingly, the vast majority of westerners routinely accept half-truths and exaggerations (lies) as part of the so-called “freedom” process. And in each instance, regardless of political party, western candidates allow themselves to become slaves to the dishonesty associated with the so-called “free market” for political power in their democracies. Accordingly, ambitious “leaders” literally trip over each other trying to attract the support of various voter constituencies with more special interest giveaways. And in the ever complacent plurality of the west, this is allowed. In the “free market” for attaining political power, the voters are dulled to the realities of finite resources.
By contrast, Chinese leadership is not forced to commit the same “free market” folly. Instead, the engineering culture, which has increasingly defined the heart of Chinese leadership since 1989, has been able to maintain a more scientific approach to good government based on facts and truths.

    In China there are very real policy debates based on the merits. Unfortunately for the false sensibilities of the west, these debates are held behind closed doors with only qualified participants listening and evaluating.
    Conspicuously, Chinese leaders in Beijing (left) continuously weather relentless criticism from the self-described morally superior leaders (in the west) for China’s “democratic failings.” China is repeatedly demonized for “only” allowing it’s best-educated to play an active role in government decision-making. Ironically, China has carefully avoided one of the market-based systems that is consistently failing in the west.
    Having emerged from the depth of Marxist despair and delivered well for its citizens, Chinese leaders have the uncommon luxury of having exceeded the expectations of the vast majority of the population for thirty years. And accordingly, Chinese leaders find themselves in the welcome position of being able to under-promise, and then over-deliver.
    It would seem that in the first decade of the 21st century, the Chinese leadership is far ahead of those claiming the democratically “moral” high road in the west. This is so because the leadership understands, at least in economic terms, which parts of the free markets work and which parts should be regulated for the “greater good.”

Understanding China Part III

Readers of the biography of Jiang Zemin, The Man Who Changed China, will conclude the book is a must-read for the informed investor in China.
    While Deng “initiated” reform, it was Jiang (left) who systematically implemented cataclysmic changes. Again, without spending much time going over the inner political workings of China, it suffices to say that Jiang began to gather power at the behest of Deng as soon as he rose to power in 1989.
    Like Deng, Jiang Zemin was the product of the pre-WWII era. When Jiang was a student, China was occupied and terrorized by brutal Japanese soldiers. However, unlike Deng, Jiang is an engineer, not a military figure. This is a critical piece of academic background information on Jiang that helps mightily with the understanding of his remarkable leadership and the makeup of current rulers in China.
    The depth of Jiang’s talents, character, and magnetic personality are hard to overstate. Above all else, Jiang was a leader who loved the process of learning. If you think of the wisest, most well-read, most practical, and most people-skilled person you have ever met, you are describing a person very similar to Jiang Zemin.
    To summarize what happened in China under Jiang Zemin, is to understand how China has managed to position itself to dominate the 21st century world economy. No doubt part of the reason why the 21st century will be dominated economically by China is based on what the United States has failed to do. But history will also give great credit where it is due. And China is positioned as it is economically, due in great part to the vision and ability to execute of Jiang.

Originally it was Jiang who caught Deng’s eye as an able administrator of Shanghai (right) after Jiang helped shape and administer the Special Economic Zones. By the end of 1992, Jiang had a firm grip on the reins of power in China. And it was in 1992, at the behest of Deng, that Jiang boldly, almost astonishingly introduced the idea of a socialist “market” economy. Prior to this event “market” was a dirty word in Chinese politics. Oddly, it is becoming a dirty word in America.
In the end, Jiang has so many credits associated with his rule it is very difficult to list them all. Each item deserves more discussion than is given below.

• Jiang travelled all over the world (photo of Jiang and President Clinton left) and positioned China internationally as a trustworthy neighbor and broker for peace while simultaneously continuing to resist the temptation to engage in imperialism.
• He reformed the Chinese military and eliminated the conflicting practice of military officials corruptly engaging in private trade.
• Thanks to his scientific/engineering background, he understood the importance of and emphasized the rapid development of high technology industries.
• Jiang modernized the nation’s currency and made it convertible, thus freeing up the flow of foreign capital into China. Then, he courted international investors.

• He kept his solemn promise to allow both Hong Kong (right) and Macao to operate as Chinese provinces under their own free market economic systems.
• He closed down and/or allowed private ownership of countless State Owned Enterprises (S.O.E.). While risking temporary unemployment, he was able to shed the most inefficient drags on the Chinese economy.

• He sponsored and supported the push that ultimately landed the 2008 Olympic Games in Beijing (Olympic Stadium in Beijing left).
• He boldly called for the inclusion of entrepreneurs and other private business owners in the Communist Party. This was as revolutionary as calling for a socialist “market” economy.
• He supported more academic/scientific freedom and he supported the arts.
• He modernized the media and gradually loosened the party’s reins on the dissemination of information.
• He led by consensus in the party rather than dictating his own personal orders to the party.
• He facilitated a smooth transition of power to the next generation of Chinese leaders including his successor Hu Jintao.
China now boasts over $1 trillion in currency reserves, a vibrant economy, and the strongest national balance sheet in the world. Jiang’s ideological legacy of governing is simplified in the concepts he called the “Three Represents”
1. advanced economic production
2. advanced cultural development
3. advance the fundamental interests of the vast majority of the people
Thanks to the respect for Jiang’s leadership and enduring influence, these ideas were written into the Chinese Constitution in 2002.

Understanding China - Part II

See Understanding China Part I.

There is no question that the historic partitioning of China by foreigners and particularly the brutal occupation of China by the Japanese during WWII had a profound affect on the psyche of the first three Communist Chinese leaders (Mao, Deng, and Jiang). Historically aware, Mao, Deng, and Jiang each maintained a steadfast suspicion of any outside interference in the “internal affairs” of China. And based on the frequent history of foreigner’s violent incursions into China, this suspicion seems completely understandable.

It is noteworthy that of all the leading nations of the world, China’s resume as a NON-imperialistic country, is by far the cleanest. Even in its conflicts with Taiwan, a dispute in which the Chinese feel most justified, they have resisted all temptations to use militarily force to enforce its goal of repatriating the island.

Suffice to say, the Marxist economic ideology that Mao attempted to implement in China failed miserably. As an economic system, government managed central-planning did not work any better in China than it did in the former Soviet Union, former Iron Curtain countries of Eastern Europe, North Korea, or Cuba. However, besides the mere economic folly of Mao’s ridiculous and ever-shifting economic policies, there were many other egregious mistakes China made in the wake of the communist takeover in 1949.

It is difficult to create a short list of all of the things that life under Mao did to destroy the underlying confidence of the Chinese people. Under Mao it was as if the entire nation and ruling party were being held hostage by a mad man. Safe to say his reign of oppressive terror profoundly impacted the philosophies of future generations of China's leaders. Essentially, Mao crassly manipulated an entire nation repeatedly with one mini-revolution after another. His Cultural Revolution (1966-1976) could well serve as a case study of perhaps the largest state-sponsored effort at disorganization in human history. In the end, it was all about Mao and his ability to maintain control. If nothing else, Mao created a bit more reluctance by future leaders to encourage the nasty habit of hero worship in the people.

Modernization of China began under Deng Xiaoping. Not surprisingly, Deng, the man who would turn the nation by 180 degrees in the opposite economic direction, was unable to avoid being purged by the machinations of Mao on several occasions. Deng was not the hand-chosen successor of Mao.

There is not enough room here to provide a clear understanding of the subtle intricacies of political infighting in China, especially the maneuvering that led to Deng Xiaoping’s ascendancy to the top of the CPC leadership heap. What is important is to understand is that Deng (right) began a process that emphasized “thinking” over stubborn Marxist dogma. This process is still underway and the Chinese rulers are fast becoming advanced economic thinkers.

To a great extent Deng engineered the beginning of the modernization of China. Two choices emerged in China in the years directly following Mao’s death. They were:

1. The “Two Whatevers” promoted by Mao’s hand-picked successor Hua Guofeng. Essentially this choice meant, “whatever Mao said and whatever Mao instructed.” or 2. Seeking TRUTH from FACTS, which was promoted by Deng. This process offered the party leaders an intellectual alternative to allowing Mao to rule through Hua from his grave.

When Deng’s practical message eventually won the internal political struggle with Hua, Deng began a slow and tedious process of weaning the party (and to a lesser extent the people) off of the “cult of personality” system. Naturally, Deng did not mind wielding and enhancing the force of his own personality from time to time when it suited his purposes. Still, in the final analysis and despite the autocratic methods of Deng, he must be credited with initiating the greatest national economic transformation in human history.
Deng began the transformation by reforming agriculture and introducing market forces for the benefit of farmers all over China. The response was predictable. Incentives to increase farm production precipitated large and consistent gains year after year.

There is no question that the horrible incident at Tiananmen Square (right) in 1989 temporarily stalled the economic and social reform processes achieved under an aging Deng. Sharp criticisms of China, by virtually all nations in the world, caused the country to temporarily turn inward and reject outside interference. But the proverbial genie was out of the Chinese bottle. Selected personally by Deng, it would Jiang Zemin who would be given the responsibility for re-igniting the transformation of China in the post Tiananmen era. In Part III we will examine the profound impact of Jiang Zemin's leadership on China and the rest of the world.

Top 10 Obama Officials Watching Closely

From The Hill.com - Many Democrats are nervous about Election Day, but some are especially nervous. Some administration officials have worked well with Republicans in Congress, but others have infuriated GOP lawmakers during the first two years of the Obama presidency. Republicans on Capitol Hill crave the oversight power that would come with winning a House majority. It would arm the GOP with something they have not had in four years: subpoena power. The Obama administration will be held accountable “like they’ve never been held accountable,” Rep. Darrell Issa (R-Calif.), who would be chairman of the Oversight and Government Reform Committee should the GOP win the House, said recently. Read here about the top 10 administration officials (outside of the White House) who have the most on the line:

Seven Quotes Explain the Day

From Townhall.com by John Hawkins - If you ask the Left, they'll give you every excuse in the book for why they're going to get their brains beaten out today. The economy is bad, Obama cooperates too much with the Republicans, the American people are irrational, it's Bush's fault -- it goes on and on. What you will very seldom hear are liberals admitting that they richly deserve to be decimated today because of their poor performance, terrible policies, and astonishing arrogance.

Most conservatives are willing to admit that the American public rejected the GOP in 2006 and 2008 because the Republican Party did a lousy job. Read here:

Sowell: Guess Who?

Thomas Sowell

Guess who said the following: "We have tried spending money. We are spending more than we have ever spent before and it does not work." Was it Sarah Palin? Rush Limbaugh? Karl Rove? Not even close. It was Henry Morgenthau, Secretary of the Treasury under Franklin D. Roosevelt and one of FDR's closest advisers. He added, "after eight years of this Administration we have just as much unemployment as when we started. . . And an enormous debt to boot!" This is just one of the remarkable and eye-opening facts in a must-read book titled "New Deal or Raw Deal?" by Professor Burton W. Folsom, Jr., of Hillsdale College.

Read here:

Understanding China – Part I

Since China has an impact on our everyday lives News New Mexico has created a brief synopsis of thousands of pages of research on the ancient nation. Fortunately, a historical overview of China, written by our favorite historian Will Durant (left), was available in Volume # 1 of The History of Civilization. Early on in our read of what Durant has to say on the subject of China, we reached the conclusion that the biggest mistake any American can make in attempting to analyze China would be to view China through the Judeo/Christian/American prism.

While America’s history is relatively short, China’s history is very long. The contrasting differences in our two nation’s backgrounds are so stark the perspective necessary for gaining a better understanding of China, is to leave all preconceived American notions and moralistic baggage at the proverbial research door.

China’s recorded history spans 5,000 years. When the west first encountered China, it quickly became the marvel of the western world. Reports on all aspects of Chinese society during the days of Marco Polo (right - 1254 -1324) suggest it was by far the most advanced in the world at that time. Evidence of ancient Chinese culture suggests the society has always produced citizens with the ability to innovate (printing press, paper, gun powder, ceramics, and the compass). Knowing China’s ancient accomplishments in engineering feats, including the early use of hydraulics, metals, and other mechanical processes is informative. At one time long ago, China’s incorporation of technology exceeded that of anything in the Middle East or Europe.

Unfortunately for the subsequent advancement of living standards for the Chinese, like the nations dominated by Islam, (also once a marvelous cradle of advanced scientific knowledge) China began to gradually fall behind other cultures in the world, due primarily to an unwillingness of its leaders to open its culture, borders, and thought-processes so the nation could simply benefit by learning from others.

Eventually, mired in rhythmic alternations between various forms of feudalism, and the weakness and corruptions associated with hereditary monarchies, China became the target of imperialists in both Europe and Japan. Foreigners occupied and repeatedly humiliated the sovereignty of Chinese rulers (left) particularly during the Qing Dynasty (1644-1911). Atrocities by outsiders against Chinese citizens became an increasingly commonplace occurrence leading up to the 20th century.

Early in the twentieth century, revolution finally came to China. Citizen activists interested in breaking away from the chains of monarchy, feudalism, and the partitioning of Chinese territory by foreign interests sought new ideological platforms. Conveniently, the Russian Revolution broke out around the same time. Once Lenin (right) achieved revolutionary success in Russia, Marxism quickly ascended to the top of the popular revolutionary ideological heap in China. In Part II we will examine how revolution affected China during the 20th century and how Mao's rule made an impact on the leadership that has succeeded him to this very day.

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