Tim Swanson

Tim Swanson is a graduate of Texas A&M University. He has worked in East Asia for more than 5 years and currently lives in China. He is the author of Great Wall of Numbers: Business Opportunities & Challenges in China

Tim Swanson has written 31 radical posts for the Libertarian Standard.

One of the best illustrations of hyperbole regarding China in some financial circles is the disingenuous belief that the PBoC, SAFE, CITIC and other Chinese agencies could use a mythical financial “nuclear” weapon by selling all of their US treasuries at one time — which in their RDF-minds would somehow decimate the US bond market.

And while I am hardly bedfellows with the Pentagon, some analysts at the DoD put together a well-reasoned bucket of cold water to throw on the faces of hysterics this election cycle.

Below are quotes from a thorough Bloomberg report (which is still blocked out here) regarding the DoD analysis: [Keep reading…]

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Economist Robert Gordon recently uploaded an NBER working paper regarding US economic growth that Mark DeWeaver recently passed to me.  Gordon makes the case that there are a number of headwinds (six by his count) that will prevent the US from growing more than one percent over the foreseeable future.

While I am bearish in some respects, I do not find any of the headwinds presented convincing.  In fact as I explain below, I find most of them simply non-issues and that other unmentioned policies to be much larger culprits in stymieing economic growth.

At the beginning, Gordon notes that this paper is an exercise in what-ifs.  Key to his point is, what-if the financial crisis did not occur after 2007 — what is the best-in-case growth trajectory for the US sans the financial correction?

[Keep reading…]

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For roughly three years I had the opportunity to live and work at two colleges out here in China.  I could describe any number of observations but one that sticks out at this time is the role the Communist Party plays in curriculum.

While the days of the Little Red Book (Mao zhuxi yulu) and cult of personality may officially be in the past, the Party still maintains control over what is and is not taught in classes.

For example, at both colleges I taught at, each department had both a nominal civilian leader as well as a de facto  Party leader.  While I had little daily interaction with Party leaders (I did meet them several times a semester at faculty dinners and they were actually very friendly to me — gan bei!), this form of governance  results in both direct overt censorship and self-censorship via “chilling effects.”

And because the faculty was limited to the Party approved curriculum, this hampered the instructors ability to inject new, different and simply foreign ideas into the classroom.  Thus you cannot foster creativity in a classroom without first dealing with the elephant in the room — the entity whose presence currently engenders the status quo.

The WSJ recently published a report noting how new Chinese graduates are having a difficult time finding jobs in part because of a skillset mismatch between what they learned in college and what hiring firms currently demand.

Before quoting the paper, I wanted to share one additional anecdote that involves this skillset mismatch.  While it may be hard to believe, but I never once in all of my teaching out here have espoused my personal opinions about libertarianism to the student body.  Not only do I think it is unprofessional to do so but I think it is short sighted (e.g., I would immediately lose my job and be deported) — and would accomplish nothing because there is no legal opposition group to rally around.  Thus martyrdom for laowai (which I do not encourage anyways) is self-defeating.

With that said, each semester there were always a number of students that would for better and for worse share their thoughts about the material they were studying in other classes.  And a handful of students, those with cajones, would even mention the material by name:  Marx and Mao.

You see, like many Western colleges, Chinese students are required to take specific courses each semester — with very few electives being offered (and none sometimes offered at all).  In addition to studying subjects like Chinese and English, all students (at the colleges I taught at and most others on the mainland) require that their students take several courses on the literature and philosophy of Marx and Mao.

And while they may have been sent on a fishing expedition to get their laowai instructor to divulge (my) personal opinions, several students each semester — those with cajones (because you could be publicly reprimanded for it) — would verbally complain about having to study the works of Marx and Mao.  Or in the words of one student I had two years ago, “if it doesn’t work in practice what good is learning an [anachronistic] theory semester after semester?  How will this help us get a job?” [He tried to say anachronistic but it didn't come out that way]

So while the North American blogosphere might complain about the futility and practicality of Underwater Basket Weaving or Virtual Reality Gender Studies, the fact that 6 million Chinese graduated this past year being indoctrinated with Marx and Mao should give First World bloggers a moment of solace and perspective.

Now back to the comment my student said two years ago, how will this help them find a job?  To quote the WSJ, it does not:

“High-end jobs that should have been produced by industrialization, including research, marketing and accounting etc., have been left in the West,” said Chen Yuyu, associate professor at Peking University’s Guanghua School of Management. Referencing the trade name of Hon Hai Precision Industry Co.,the Taiwan-based company that makes gadgets for Apple Inc. and others in Chinese factories, he said, “We only have assembly lines in Foxconns.”

Solving the problem is complex, involving a gradual overhaul of China’s education system as well as efforts to add more service-sector jobs. China’s Ministry of Education in 2010 unveiled new guidelines pressing universities to shift away from their traditional focus on increasing enrollment. It is also experimenting with giving faculty greater say over curriculum and school operations, though universities remain tightly controlled by the Communist Party.

Oops.  By directly and indirectly interfering with curriculum, the Party planners have unintentionally outsource — re-sourced — high skilled jobs to the developed world (see also tangentially labor arbitrage).  This is not to say that there are not opportunities for say software programmers (I personally have about 10 business Chinese students at this time who work for a very large American semiconductor company as chipset and driver programmers in Shanghai) — but this is the exception rather than the rule.

And as the same WSJ article notes those graduates that do find jobs are not making big yuan:

A survey of more than 6,000 new graduates conducted last year by Tsinghua University in Beijing said that entry-level salaries of 69% of college graduates are lower than those of the migrant workers who come from the countryside to man Chinese factories, a figure that government statistics currently put at about 2,200 yuan ($345) a month. Graduates from lower-level universities make an average of only 1,903 yuan a month, it said.

Thus the next time you hear someone from the the Professional Protesting class such as the Occupy Wall Street movement complain about making a mere $10 an hour at Walmart, kindly explain to them that college graduates in the worlds 2nd largest economy make less than $3 an hour despite increasingly higher costs of living — which is another anecdote I can vouch for (seeing as hundreds of my former students have now graduated and began their sobering careers).

One last note

Chinese students wishing to further their education via graduate school on the mainland are required to take another lengthy entrance examination (akin to the original gaokao) in which a students knowledge of Marx and Mao are again tested.  A foreign colleague of mine has a Chinese wife who bitterly complained about having to take those portions of the test simply to apply to a grad program in translation and interpretation.  Several of her other, talented friends opted out and instead used guanxi to get government jobs.

Which brings me to this slight twist of fortunes: do you know what the #1 desirable job is now in China?  According to a recent survey from ChinaHR: working for the government — for the old fashioned Iron Rice bowl (tie fan wan) once again.

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Conrad Schumann fleeing East Berlin

Who built the Berlin Wall and why?  According to a recent piece by Keith Veronese at io9:

The Berlin Wall spanned 155 kilometers, combining concrete walls and razor wire topped fences to create the border. Numerous checkpoints and over 300 watchtowers stretched along the wall. The German Democratic Republic constructed the wall to keep anti-socialist individuals present in West Germany out of East Germany.

Au contraire.  In contrast to the propaganda that Keith apparently fell for (back in the day, the GDR used very similar words that Keith used), the GDR actually built the wall to stymie a brain drain, the exodus of East Germans fleeing to the West.

Just how big was this exodus?  Between the partitioning and gerrymandering of Germany following WWII with the Potsdam Declaration in 1945 and 1961 (when the wall was built), there were roughly 3.5 million East Germans who fled to the West.

So yea, Keith’s claim is quite a head scratcher — who are these “anti-socialistic individuals” trying to get into the East?  David Hasselhoff?  Heidi Klum?  Thomas Mann?

[Keep reading…]

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Years ago there was a great Non Sequitur (or maybe it was The Far Side) cartoon in which the main character, a man, opens the door and looks up at the sky.  The caption read something along the lines of “Bob likes to make sure whoever is watching him, thinks he is happy” (kind of like what Jim Carrey did in The Truman Show).

I would of course be able to locate the comic but alas, Google Images is basically blocked in China and I (smugly) out of principle – try not to use proxies and VPNs (otherwise it makes you feel too comfortable, distorts the reality of the adolescent geopolitics in this country).

Which brings you to the recommended weekend reading courtesy of Wired: Hidden History: America’s Secret Drone War in Africa

It is jam packed with good solid numbers about how many UAVs & UCAVs are being used in Somalia and elsewhere.  If War Nerd was still around, he would surely be able to use it to (rightly) agitate F-22 and F-35 fanboys.  After all, if less than a few hundred relatively cheap drones are able to do the work of dozens of manned airwings, there really is no military justification for spending $1.5 trillion building out the F-35 fleet.  Let alone the $40-50 billion for a next-generation bomber.

If you’re looking for your fill on what drone warfare is shaping up to look like, be sure to check out the definitive repository from Reason.  The ACLU also has a dedicated section on domestic drones.

My own thoughts: the civil libertarian in me shakes my head at this but government owned and operated drones are probably not going away, anywhere.  In fact, they probably already operate – or will very soon – above every big metro in the G-20.

And as I mentioned yesterday, I think the surveillance panopticon both developing and developed countries are building is something that would have occurred freely and voluntarily anyways due to so many narcissists, land appraisal/land management, and to prevent insurance claims against negligence (e.g., apartment property owners building CCTV networks to lower their insurance premiums against vandalism, carjacking, etc.)  In fact, here is a privately funded domestic drone you can by from Amazon for a mere $300.

Now back to the matter at one: one wonders if Bob in the comic strip was smiling at the new Eye in the Sky from the Army or Key Hole successors like Misty from the NRO.  Maybe Alice knows (see this entry for the corny inside joke).

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