American Exceptionalism

Many people talk about American exceptionalism. Let me try to figure out what this perception really means. To begin with, each country is unique to a certain extent. What makes a nation exceptional has something to do with its history, people, geography and political system. The requirement must be exceptionally great or inspiring, not exceptionally evil or mean spirited. I also want to compare America with other countries to further illustrate my points.

The idea of American exceptionalism originates from Alexis de Tocqueville, a French historian in the 1800’s who wrote about this newly-independent nation. There exist at least two parallel perceptions — Sinocentrism regarding China, and Whig history about Great Britain. Both have now faded into the history books. I can imagine many people believe that the ancient empires of Rome and Egypt were exceptional, too.

When people sing “from sea to shining sea”, they remind me of two other countries — Canada and Australia of similar geography and political system, but with a much smaller economy and military power. When people talk about liberty and democracy, they also remind me of a host of other countries where individual and human rights are protected by the national constitution.

Then what makes America exceptional? We must look at American actions because they are much more important than talks. To be exceptional, a nation must have done great things for her people and the world, thereby leaving an enduring beneficial legacy. The following are what I consider four great American achievements besides her superpower status:

1. America traditionally welcomes a large number of immigrants from all over the world, true to the ideal of “Give me your tired, your poor, your huddled masses yearning to breathe free”. The consequence is a continuous flow of labor and talents from a diversity of cultures that enrich the society, expand the domestic market, and provide a constant renewal. This “melting pot” serves to break down the barriers of various traditions, and render Americans more open to new ideas and practices. As immigrants starting a new life, Americans believe in a second chance, and accept failures as positive lessons to learn. If given a choice, most people will immigrate to America because it’s the land of opportunity and freedom despite her long agony of overcoming slavery and racial discrimination.

2. Within the context of laissez-faire capitalism, America signed into law in 1935 the Old-Age, Survivors and Disability Insurance Program (known as Social Security). It was later amended to include several social welfare and social insurance programs. This for the first time provides a safety net for the aged, the weak and the unfortunate. After the Second World War, more than 5 million veterans were eligible for the benefits of the Servicemen’s Readjustment Act passed in 1944 (so-called G.I. Bill) that includes tuition and expense subsidies, low mortgage, and low interest for starting a business. In 2014, the Affordable Care Act (known as Obamacare) went into effect after passage in 2010. It has reduced the number of medically uninsured from 56 million to 36 million, but was in the process of being repealed by the Republican Congress starting early 2017. Despite their imperfections and constant opposition from conservative groups, the above Federal programs have benefited millions upon millions of low-income citizens who need help that cannot possibly come from the for-profit private sector.

3. After WWII when Europe and Japan lay in ruins, America became a superpower with the possession of nuclear weapons and a domestic economy largely intact. While the Soviet Union, the other superpower, occupied Eastern Europe to establish a sphere of influence, America tried to promote world stability by creating new institutions such as the United Nations, the International Monetary Fund, and the Marshall Plan for European economic recovery. During the occupation years, America single-handedly remolded militarist Japan into a peaceful modern democracy. Although the post-War order serves American interests well, it also benefits the rest of the world by creating a stable and secured framework for recovery and growth. It is the result of American leadership and responsibility that has prevented a third world war from erupting since 1945.

4. Unlike the former European powers such as Great Britain, Spain and France, America is exceptional because she harbors little territorial ambition to colonize foreign countries. By leveraging her power, America takes the responsibility to lead and mold the world for peace, stability and growth, thereby also benefiting herself. During the process, failures were committed such as Vietnam and Iraq, resulting in a lot of ruined lives and wasted resources. These are the costs and valuable lessons that go with world leadership. America is exceptional because she can afford to bear the costs, and more importantly, Americans are generous enough to support their government for undertaking such responsibilities.

In 2016, the election of Donald Trump showed that things took an ugly turn. America seems tired of her world leadership and responsibility. Due to her middle class being squeezed for over two decades now, a large segment of the population feel that they have been left behind. Trump was quick to mobilize these angry voters to defeat all his rivals. He used foreigners as scapegoats for America’s domestic woes such as job losses due to technological change, health care inflation due to corruption, huge national debt, illegal immigration, decaying infrastructure, terrorist threat, and crimes in inner cities due to continuous neglect. All of the above are summarily blamed on “foreigners eating our lunch”, thus the policy of “America first”. These slogans are dangerous because they cannot fix the domestic problems but unsettle the rest of the world. Trump is blind to the fact that modern technology can enlarge the pie by creating new industries so that every country will benefit instead of going back to play the zero-sum game and beggar thy neighbors.

The world now sees America turning inward, with the tendency to become an international bully. America once called the Soviet Union “the Evil Empire” without realizing that she is becoming the empire of mean spirit, and may slide further to become an evil one. The only hope to rely on is the basic goodness of the American people who have the collective power to reverse this dangerous trend. Otherwise, American exceptionalism will fade and become a thing of the past.

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Replacing Obamacare

The repeal of Obamacare by the Republicans is easy. They have done it repeatedly for over 40 times in the House during Obama’s presidency but could not overcome his veto power. Now that they have Trump as President and a majority in the Senate, the repealing will certainly be completed very shortly. The next step is to replace it, which will be difficult and carry a lot of risks. The other problem is that they do not seem to have a plan.

Obamacare was passed in 2010 thanks to a short-lived Democratic majority in both the House and the Senate. It had zero Republican support. After implementation in 2014, Obamacare has now covered over 20 million citizens in two years out of a total of about 55 million without health insurance. Despite all its imperfections, its repeal means the Republicans will wind up back in square one owning all the problems of the American health care system characterized by high prices, limited access, a huge number of uninsured and a shrinking market consisting of more older and sicker people. I wonder why any political party wants to own such a can of worms.

There exists a big political risk that is so obvious. After repeal, more than 20 million Americans will lose their Obamacare coverage overnight. These angry people will come out to vote in the next election cycle, that is, in 2018 for Congress and 2020 for President. Can the Republicans afford losing 20 million votes next time? Their margins of winning in key swing states are usually small. In 2016 where three states determined the outcome of the presidential election (Pennsylvania, Wisconsin and Michigan), the Republicans’ combined margin of victory was only about 100,000 votes.

The difficulty for replacing Obamacare is of course money. In essence, Obamacare subsidizes low-income people to enable them to buy health insurance. The amount of subsidy per person averages about $300 per month. With 20 million now covered, the total federal subsidy amounts to $6,000 million per month! This will unnerve the insurance companies because without the Obamacare subsidy, the health insurance market will shrink by this much. Everybody knows that the bigger the market, the better for the insurers because their risks are reduced.

How can you replace Obamacare with a better alternative? It can happen in a very complicated way, but the 20 million people must wait for a long time if they lose Obamacare immediately after the repeal. There is no way for the Republicans to quickly deliver a better alternative except to grant a subsidy equal or bigger. As you are aware, big federal subsidy is a “no no” for the Republicans. Their trick is to cut taxes and make it sound like a subsidy beneficial to the people. However, those 20 million covered by Obamacare belong to the low-income group. How much tax benefits can they receive? It will certainly be much smaller than the average $300 federal subsidy per month per person. In addition, a tax cut does not mean that they will use the money to buy health insurance. So the number of uninsured will certainly rise. This will make a less stable society full of sick people. Also, the insurance market will shrink, causing the insurers to raise rates again and again to compensate for increasing risks.

The American health care system is a vicious circle of price inflation since the early 1990’s. Even a government subsidy like Obamacare cannot keep prices down as it is supposed to do. The Republicans always give the public the illusion that a free market will help. Don’t we have a free market in America all along? The markets for food, housing, autos and other consumer goods are subject to competitive market forces. However, health care is not because it is a necessary package of products and services where everyone should have some reasonable access.

I think the health care problems in America is a result of corruption. Look at the tremendous profits piled up by the drug companies, the insurers, the hospitals, and the top health care professionals. On the other hand, look at the sufferings of the middle class as they are being squeezed. The government does not want to do anything about it. Why? Because the laws made it legal for the health care industry to continually raise prices while bribing legislators and top government officials to subdue their conscience and remain silent. At this point, little can be done to reign in health care costs except to let them rise to a level so unbearable that the people will rise up and revolt. Before it reaches that point, the government can do something drastic like imposing price controls. Somebody will cry out loud that it would be like communism. Well, in 1971 when the US was ripped by high inflation, Richard Nixon, a Republican President, imposed price and wage controls to stabilize the economy. Nixon was no communist but that was the past. Does any politician at present have the guts to do it?

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Evolution Is God’s Creation

Everywhere I look, I cannot stop marveling at the complex wonders of the world, especially how plants and animals evolve. As for myself, I know that I become wiser and more adaptable everyday because I learn new things. I also wonder what I am and where do I come from.

I cannot understand the perennial conflict between the religious nuts and the scientific nuts. The former denies evolution because they think that humans are special because they are created by God. Thus humans cannot evolve from a single-cell creature, leading to a monkey and then to a human through millions of years of evolution. Why not? This essentially makes humans special because we have become the most sophisticated creature, superior to a monkey, a rat or a snake. The religious nuts don’t have a clue about God’s plan, only to follow the Bible literally and blindly. God might have created just a single-cell creature and also designed its ability to evolve so that He can take a permanent rather than just a few days’ rest.

As for the scientific nuts, most of them are not even scientists. They think that everything occurs randomly and humans just happen to be here. If so, why there exist countless natural laws revealed in science that shows all living and non-living things follow defined patterns of growth and behavior that are either unchanged or slowly evolving? Are all these defined patterns such as the laws of gravity and thermodynamics random? They are not because one can predict the outcome as you need energy to jump up, and once the energy is exhausted, you will come back down. The universe in fact behaves in such a non-random manner that leads Stephen Hawking, a renowned scientist, to say that God has little choice once having created the universe.

There is plenty of scientific evidence to show that all living things begin with the simplest one-cell creature. Its evolution process is guided by an auto-pilot we may want to call natural selection or survival of the fittest. None of these can occur at random because they all follow from pre-defined natural laws of physics, chemistry and biology. However far we  want to trace their origins, we will eventually come to a common point where our intellect will call it creation, because nothing comes out of nothing. In modern days, we try to mimic the same process of creation and evolution by designing software that can learn and perform better, which we call artificial intelligence. The only difference is that it is artificial, meaning created only by humans and not out of nothing.

So I think that evolution must be part of God’s creation. They are by no means mutually exclusive. They form the whole package. Evolution is designed into this grand scheme so that all living things have the ability to learn to become more adaptable in order to survive.

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Technological Change

Technological change is the fundamental driving force that shapes history. It has a dynamics of its own due to human curiosity about the world and the rest of the universe. Since humans cannot be stopped from being curious, the advancement of technology will go on. Only the adoption of technology can be slowed or speeded up subject to human desire.

To see how fast a country develops, one must consider how eager its people want to embrace new technologies, just like how eager a person wants to learn new things. There always exists a segment of the population resistant to new things due to culture, religion, self interest, or pure ignorance. When the resistance overpowers the desire for technological change, the whole country falls behind in its development.

Technological change in modern days has brought two biggest consequences — globalization and climate change, both are affecting our lives with increasing speed.

Globalization means the spread of technology and knowledge worldwide with the result that goods can be made somewhere else and shipped back to the home market at much lower costs. This encourages companies to outsource production and cut domestic employment.

On the other other, climate change means that today’s technology is not good enough to sustain the natural environment of tomorrow. It requires constant advancement to prevent a cataclysmic disaster that can be called Mother Nature’s revenge.

In Europe and the United States, a wave of backlash is generated against modern technological change as seen in the 2016 Brexit vote and the election of Donald Trump respectively. The backlash centers around a few main problems — job loss, stagnant wages, the middle-class squeeze, and non-white immigration which many people are not used to. There are ways to solve these problems but the politicians have turned them into emotional scapegoat issues such as “Foreigners are eating our lunch!” and “Let’s take our country back!” They have no plans for a solution except to arouse emotions and gain votes.

Most of the job losses are caused by globalization that cannot be stopped. Do we really want to bring back those jobs where foreigners are willing to accept much lower wages? Those jobs are lost forever due to our higher living standards. They might come back if the reverse was true. Do we really want to continue making typewriters or Kodak-film cameras which have been wiped out by new technology? It’s the ever-advancing technology that drives those jobs overseas. However, the people who lost their jobs should be taken care of. This is done by both the private and public sectors through job training and government subsidy to ease the transition, but not much has been done, only talks and scapegoating. The result is the unexpected protest votes by a large number of angry voters who justifiably think that they are the forgotten ones left by the wayside due to advancing technology.

With respect to climate change, why must we always choose between job creation and cleaner environment? Can we achieve both? Certainly, because they are not mutually exclusive. A cleaner environment requires advancing technologies to improve efficiency and recycling. This is where the potential lies for new industries. Also, this is where new jobs are created. We will fall behind if we are obsessed with preserving old jobs in outdated industries at the expense of creating new jobs in modern ones.

In fact, an energy revolution is in the making for over a decade now in the form of fuel efficiency and electrification. This is evidenced by reduced consumption of fossil fuels in the world economy as reflected in falling oil prices (China’s slowdown is only part of the equation). Wherever you look, you will find better fuel-efficiency in cars, airplanes, house lighting and heating, and industrial production. You will also find fast-rising industries that generate electricity from renewable sources such as wind, solar, and agricultural products. The next big thing will likely turn out to be the energy revolution where electricity generated from clean sources will make burning fossil fuels obsolete.

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The Dangers of Reductionism

Recently I came across a Youtube video of Peter Zeihan dated 11/24/2014 telling Americans not to worry about their country. I find it childishly entertaining. The following is my response:

Zeihan’s magic tricks:

* Select a few pieces of convenient data (maps, the US geographic endowments and age distribution) then draw broad and misguided conclusions about the future of an increasingly complex world.

* When failing to explain, Zeihan says something funny. This distracts the audience from questioning his arguments.

* Zeihan has a fossil fuel agenda as he trumpets eagerly for shale oil. He also belittles “cloudy” Germany’s leadership in solar energy.

* Zeihan’s shallow perspectives allow him to entertain but not to illuminate.

Flaws in the arguments:

History is mostly about people and cultures, and how they succeed or fail in managing their talents and physical resources. The human story is 80% management and 20% endowment (The Pareto Principle applies here too). This explains why resource-poor Japan and Singapore achieve First World status, and why resource-rich Indonesia, Brazil and many others continue to wrestle with their own development. The age distribution graphs used in Zeihan’s arguments are not valid because it says nothing about the resourcefulness of the people, who can overcome their dwindling young numbers with increasing efficiency, productivity and innovation.

A Chinese saying goes like this — If you just sit there and eat, pretty soon you will eat away your mountain of wealth. No country experiences more ups and downs than China during its long tortuous history. The good times never lasted long enough before complacency set in and corruption took over, and the country plunged back down again. The US became a superpower only after WWII. Seven decades of relatively good times are never long enough to guarantee the future, which has to be forged, not inherited. Therefore, I would never accept a monkey suggested by Zeihan to manage the country, not even my backyard.

In trying to project the future, one must consider the effects of rapid technological change and how the people embrace it as a fundamental driving force. Zeihan completely ignores this point. His simplistic worldview assumes that the future is guaranteed. That’s why he says not to worry about anything, which is a very dangerous proposition.

Plenty of things to worry about:

1. Middle class squeeze (more than two decades in the making and getting worse):
*Wage stagnation, globalization’s blessing and curse.
*Jobs lost due to foreign competition. Can we bring them back? Do we really want to? *Can’t we create new industries and new jobs?
*Health care inflation, one major illness away from bankruptcy.
*Reduced health coverage and increased deductibles.
*Health insurers are digging their own graves if allowed to cherry-pick customers. Why?
*College tuition for the young and their mounting debts, which already exceed all consumer loans combined.
*Most families need two incomes to get by.
*Expensive childcare for married working couples.
*Almost zero household savings.
*Future cuts in Social Security and Medicare.

2. Financial meltdowns:
*Will the banks invent another gimmick after the subprime mortgage?
*Do you entrust your assets to the stock funds which always blame the market they control for your loss?
*If the system is rigged, the stock market is one of them due to its non-transparency and control by big players.
*How big an influence the finance elites (most of the top 1%) exert on the government?

3. Corruption and cronyism:
*Money politics, large campaign contributions are made legal by the Supreme Court.
*Increased corruption in both private and public sectors.
*Government gridlock due to conflicting self-interests.
*How much talents are wasted in a corrupt society?
*A wealthier country can afford a higher degree of corruption. The question is, how much corruption will generate a vicious circle leading to a downward spiral?

4. Racial and religious tensions:
*Race has brought us slavery, the Civil War, segregation in the South, the Chinese Exclusion Act, and mass incarceration of blacks in modern days. What’s next?
*The 9/11 attack has brought religious tensions to the fore. The problems are: The terrorists are non-state actors from within and without; they can hit the homeland at any time; and we would be foolish to retaliate with an aircraft carrier that Zeihan proudly brought up. What to do? The smart way is not to inflame religious tensions, use drones and special forces to minimize our footprints. Do not give the terrorists a reason to recruit more young people.

5. Immigration:
*Do we need immigrants? Do they add values?
*If yes, how to integrate them and manage an orderly flow?
*If no, build the wall on four sides because we attract them. On the contrary, if our economy is going down, they don’t want to come anymore.

6. Foreign misadventures (wars of choice):
*Vietnam 1964-75.
*Afghanistan since 2001 although officially ended.
*Iraq since 2003 although officially ended.
*Next one: Iran, ISIS, North Korea or somewhere else?
*The entire US defense industry is in private hands. They just want to maximize their profits. They lobby the government to make wars in the name of freedom. So we repeat the same disasters again and again.
*The US has won only three land wars — WWI, WWII, and the Gulf War where we led an Arab coalition which paid the bulk of the costs. All the other wars have proven to be quagmires. The Korean war ended luckily in a no-win armistice.
*One may argue that the US was fighting with one hand tied. That is not true judging from the money spent and the high technology involved. The US dropped more bombs in Vietnam than in WWII. It is obvious that we lost when we deliberately chose to fight a stupid war.

7. How can government afford to spend?
*Mounting deficits, borrowing and national debt.
*US national debt amounts to $19.8 trillion in 2016, about 106% of annual GDP (normal among developed countries).
*Major foreign owners of US debt in trillion dollars: China 1.25, Japan 1.15 , Ireland 0.27, Brazil 0.26, and Hong Kong, Taiwan and India, each holding less than 0.24. Those countries are competitors which buy US debts to keep the dollar afloat so that they can export more. This means the US finds itself in a vicious circle of more imports and more debts.

8. Mother Nature objections and revenge:
*Climate change and environmental pollution. What to do?
*What if coastal cities got flooded as ocean level rises?
*What if multiple years of massive crop failures?
*Can we just ignore climate change confirmed by science?
*Why do we have to choose between creating jobs and protecting the environment? Can’t we achieve both?
*Do we want to cede leadership of the renewable energy revolution in the making to other countries? This will turn out to be the next big thing.
*Francis Bacon says, “Nature to be commanded must be obeyed”. It means we must obey the laws of nature to build a sustainable economy of the future.
999. At the end of this long list, the least I worry about is Mexican drug cartels killing their American counterparts. Zeihan says this is the thing Americans should worry about. However, he contradicts himself by saying that this is the reason why our crime rates are falling. What kind of logic is that?

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Message and Messenger

Despite all the fuss about the characters of both candidates during the 2016 American presidential election, the result clearly demonstrates the deciding factor of an election — the message and the messenger. An election is about connecting with the people so that they will take the trouble to go out and vote for you. This connection is an emotional one that requires the right message and the messenger who is able to articulate the message effectively.

If a candidate can do it right, it does not matter his/her personal flaws because the result is simply a final vote count. This is the risk that a democratic society must take to elect a leader who may turn out to be a devil. There is no better human system when you compare to a tribe, a monarchy or a dictatorship, all of which cannot prevent a devil from assuming the leadership.

The US Constitution imposes no standards regarding a candidate’s education, experience, morality and temperament except that he/she be born in the USA. So all the fuss generated during the election campaigns is reduced to irrelevance.

From the very beginning, we could see Trump beating the other Republican challengers easily just by hammering on the messages that people want to hear such as job loss, health care costs, immigration and the Moslem religion. Their viewpoints and solutions may seem crazy and dangerous, but the messages are clear and Trump hit them right.

On the other hand, Hillary was off-message telling people how bad Trump was. She did not offer an inspiring message to lift up the people’s spirit resulting in a lack of enthusiasm especially for those she was counting on to win. Hillary’s communication problems were evident at the beginning when she was beaten by Bernie Sanders in many states during the nomination process. This should not come as a surprise after she lost the nomination to Obama back in 2008. Her fatal mistake this time was to take Wisconsin and Michigan for granted, thus allowing Trump to move in through the backdoor. With all the help she got from Obama, Michelle, Biden and other celebrities, she even failed to win Pennsylvania. This further testifies to the fact that she was not a good messenger.

In short, this election has shown that Hillary has failed to bring out the best in us while Trump has succeeded in bringing out the worst in us.

Of course this is not what the majority of the population want, but this is what we get from an imperfect system. For the Democratic party, if they care about winning four years hence, they should stop complaining about the imperfect system, but start thinking about the message and the messenger.

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Think, Democrats, Think!

Being a Republican turned Democrat, I wish to offer some reasons for our 2016 presidential defeat. I proceed from the premise that if a student blames her math teacher for her failure, that student will never learn math. It’s always wise to look ourselves in the mirror and reflect what was wrong to have led to our defeat.

First, never assume that the 59.7 million nationwide who voted for Trump are crazy or stupid, because we will need some of them to win come 2020. The fact is, Hillary’s winning margin in the national popular vote is razor-thin around 250,000.

Second, an election is really about emotional connection with your supporters so that they will take the trouble to come out and vote for you. This is a subtle thing and it’s never easy. Only a few leaders succeed including good and evil ones. However, I can name many things that may not be relevant in an election: temperament, experience, knowledge, qualifications, campaign money, political organization, high-profile surrogates, in which Hillary beat Trump to a great extent.

Third, Hillary is not a good candidate who connects well with the people. Simply put, every word she says seems to have been well prepared without any spontaneity. She seldom shows her human side, for instance, as a caring grandma, a nurturing mother, and a loving wife who forgives her cheating husband. These can easily disarm her critics about her emails and other things. Consequently, more white women voted for Trump than her (Don’t assume that those women voted with their angry white men). Her campaign speeches always listed Trump’s weaknesses without uplifting the audience about her strength nor giving them vision and hope. The result is lack of enthusiasm. No wonder she could not turn out enough white women, millennials, blacks and latinos to deliver the victory she needed. Don’t blame her emails or political baggage for her defeat. Trump has worse things than hers. Also look at her challenger, Bernie Sanders, the old man who has greatly excited the millennials by giving them ideals, hope and change, not to mention the great success of Obama. In short, Hillary fails to inspire the best in us, but Trump succeeds in bringing out the worst in us.

Fourth, Hillary made two fatal strategic mistakes by taking things for granted. In 2008, she lost the nomination to Obama because she thought she could win easily until it was too late. History repeated itself in 2016 when she thought that Wisconsin (10 electoral votes) and Michigan (16) could not turn red thus allowed Trump to enter through the back door. She could have won Pennsylvania (20) with the help of Obama, Michelle, Biden, Springsteen and other celebrities, but she lost, thus exposing her big handicap. These three traditionally blue states with a total of 46 electoral votes could have put her over the top. She did not even need Florida and Ohio to win.

Fifth, Hillary’s campaign staff and advisors should also bear half of the responsibility for defeat. I notice there are quite a few holdovers from her previous campaigns. These old timers should all be retired from the Democratic structure. They could not produce new ideas as demonstrated, and they will not. Why didn’t she borrow some talents from Obama’s campaign staff?

Sixth, the Democratic party needs new blood. Their top tier now consists almost entirely of old people except Obama who will retire soon. By contrast, the Republican party boasts a few rising stars as seen in their nomination process despite its circus nature. That’s why I ask the Democrats to think, think and think for 2020 if they are really serious about winning.

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