Are you ready for this?

NO, it’s not an excerpt from the Queen song.

I am referring to the path-breaking choice that Americans may have to make in the presidential elections in November.

Never has the world’s most powerful democratic nation been confronted with as unprecedented a choice — in fact two choices — at least concerning one half of the electoral process.

Would they elect a white woman or a black man to the presidency of the most influential nation on earth?

Never before have the gender and color barrier ever been breached in the contest for the American presidency. The Rev. Jesse Jackson tried and failed to secure his party’s nomination for the presidency, and Geraldine Ferraro, although managing to gain her party’s confidence, was only running for the post of vice president.

But a woman or a black man for the highest elected post in perhaps all of the world? Is America ready for this? Is the world even ready for this?

All the way from George Washington to George W. Bush — 43 presidents and 212 years later — there has never been a person of color of any gender or a female person of any color who has managed to occupy the highest office of the land. And even that exclusive club is limited still.

White Anglo Saxon Protestants (WASPs), with the exception only of a few with Irish-Catholic roots, have tended to keep the office of the presidency as a virtual monopoly for themselves.

Only the Americans themselves can really say if they are ready. As a shining beacon of hope, democracy and liberty to the rest of the world, is the nation finally at a stage where it can actually practice what it has preached for so long?

Oh yes, indeed. We forget that among America’s nation-students, many have already breached the gender or color barriers long ago. Even a conservative male-dominated Moslem country has had Benazir Bhutto as prime minister, and an ethnically more homogenous Peru has elected a Japanese-Peruvian, Alberto Fujimori, as its president.

But in America, the land of the free and the home of the brave, where women and persons of color have enjoyed success in almost any field of endeavor, the long line of almost exclusively WASPs has remained unbroken — that is until this year’s election rolls along.

The Democratic Party will certainly break the mould first, for the first time nominating a candidate belonging to either category as its standard bearer for the electoral contest. Because apart from Hillary Clinton and Barack Obama, everyone else in the party has put away his or her presidential ambitions on hold, at least for another four years.

But the bigger question remains — can America go all the way and break the mould as a nation, by choosing whoever it is that the Democrats put up for the public vote?

It all remains to be seen, of course, because America today is saddled with a host of serious problems that have neither to do with race nor gender. Its economy is badly in need of rejuvenation, and issues of security continue to haunt its collective consciousness — both problems which Democrats have not been known to be very good at solving, apart perhaps from the Clinton years being economically prosperous times for the nation.

But the implications for America will be significant if it does go ahead and break new ground. For it will give the rest of the world the unequivocal message that all of us — black or white, male or female — are truly equal as people on this earth.

(asbb.mbm91@aimalumni.org)
Published in the Sun.Star Cebu newspaper on February 9, 2009.

In the eye of the storm (Conclusion)

WE have seen the enemy, and it is us.

As far as the American consumers and the current financial crisis are concerned, the above phrase could not be any more appropriate. The biggest share of the collective blame lies squarely with them, and the way the United States lives today.

Many of us have friends and family in the United States. A good number will have been there ourselves.

Therefore, when I make a statement like this, it should come as a surprise to no one. How many of our friends and acquaintances Stateside own large SUVs? How many live in nice homes, with all the furniture and furnishings obtained through easy credit? How many generally live a lifestyle that seems to be beyond their reach, and act as if money is always there when they need it?

The truth is, watching the crisis unfold has been like witnessing a runaway train in slow motion.

We all knew the accident was bound to happen at some point, but everyone was powerless to stop it.

All the fingers are now pointed at the banks, the financial institutions and the car companies, for all having acted irresponsibly and caused the world to fall down. But if we really stepped back a bit from the burning rubble and tried to sift for evidence, we would probably conclude that the fire had its origins somewhere else.

Take the car companies, who are now being accused of making the “wrong” cars and not being “sensitive” enough to the needs of their consumers.

Well just a year ago—and probably even more recently than that, what their consumers wanted were large gas-guzzling SUVs. Back in the days when petrol was more affordable, did anyone, apart from Leonardo DiCaprio and Cameron Diaz, ever consider being seen in a hybrid car? I don’t believe so. So really they were not being irresponsible, they were just being market savvy.

And what of the savings banks which were all rushing to grant more outrageously priced mortgages, the investment banks tripping all over themselves to package the loans and sell them off as investment-grade Collateralized Debt Obligations (CDOs), and the insurance companies like AIG thinking they could benefit from the whole situation by insuring the CDOs by means of Credit Default Swaps?

If we are really being very honest about it, they were just acting according to their roles in a free market. They saw a demand, and went ahead and tried to fill it. This is, after all, the mantra of capitalist economics—give the consumer what he or she wants, and your business succeeds.
The consumers want cheap loans, give it to them. They like to ride in large SUVs, make some for them.

We cannot, and most especially the Americans, cannot have their cake and eat it too. The capitalist world (and today this means all the world) has made a choice, and it is a simple one. It wants free markets to work without state intervention. It resents overregulation, and prefers only minimum oversight to ensure the compliance to laws and regulations, but not a sense check of their “greater good” to society.

In such a society, where the free hand of the market governs, the premise is that the ultimate responsibility lies with the consumer. This is the whole premise of a capitalist society—that no matter what happens, we believe that we should be free to make our own choices, and to create our own opportunities.

Unfortunately, this choice has a flipside, too. We should also be responsible for our actions, and accountable for the consequences of our excesses.

This crisis is simply a reminder to all of us consumers, and to the American consumer in particular, that the buck stops right here.

(http://asbb-foreignexchange. blogspot.com)
Published in the Sun.Star Cebu newspaper on December 05, 2008.

The modern business of slavery

IT is a well-know fact, even to basketball-crazy Filipinos, that football—for most parts of the world - has become the equivalent of religion.

In Manchester, for example, Church of England Sunday services are now rarely attended, especially by younger parishioners. In contrast, Old Trafford, home of the world-famous Manchester United team, draws tens of thousands to its Sunday matches.

It is, thus, a surprise when one hears a word that is probably not always equated with successful phenomena of this magnitude. That word is slavery.

Yes, slavery. A word with connotations of squalor and poverty. One that denotes bondage and oppression, and so far-removed from the success and opulence that those in the game now enjoy.

Sepp Blatter, president of football’s governing body FIFA, made the allusion recently in describing the situation facing Manchester United’s Cristiano Ronaldo—arguably one of the game’s best players today—and who is reportedly linked with a move to Spanish giants Real Madrid.

The move makes good commercial sense for both parties.

Ronaldo has recently won the Champions league with United —an accomplishment seen as second only to winning the World Cup. Real Madrid, on the other hand, although considered “Kings of Europe” for having won the tournament the most number of times, has not done so in recent years. For them, having a player of this caliber just might propel them to their former heights of glory.

For Ronaldo, on the other hand, winning it with another team will prove that he did not achieve victory the first time around simply by riding on the coattails of a great team like United. It will recognize him as a truly one of a kind player that wins tournaments for teams, and not just with them.

Just one hitch stands in the way of this dream partnership, however. Ronaldo is still contracted to United for a few years to come yet—until the Olympics come around to England in 2012, to be exact.

This is where Sepp Blatter steps in and pronounces the player’s situation as “slavery.” He further advises United to respect his wishes, and to let him go to Real Madrid, should it be his desire to do so.

FIFA has never had good relations with English football for a variety of reasons, and Blatter and Alex Ferguson, United’s fiery Scottish manager, have never gotten along particularly well over the years. But this perceived interference by Blatter in the club’s affairs did not exactly qualify as diplomacy on Blatter’s part.

Today’s players of Ronaldo’s caliber are simply no slaves, in whatever terms we may describe slavery to be. They earn in a day far in excess of what even top executives in the Philippines can hope to make in a year. They and their dependents are set for life, and this through doing the thing they love the most – playing football.

How many of us can claim to enjoy such privilege?

The business of slavery is alive and well in the modern world.

Young girls from Eastern Europe and Asia are trafficked against their wishes to brothels in the West, where criminal gangs make huge amounts of money from exploiting them.

Modern sportswear manufacturers realize huge amounts of profit by sub-contracting their goods with sweatshops in China and India, employing child labor at ridiculously low wages. And back home, syndicates employ street children to beg and steal for their benefit.

Yes, slavery is still a thriving business in the modern world. But it would do Sepp Blatter well next time to think twice before comparing Ronaldo’s dilemma, to the real slavery that confronts us every day in our part of the world.

(http://asbb-foreignexchange.blogspot.com)
Published in the Sun.Star Cebu newspaper on July 26, 2008.

Counting the Cost of Iraq (2)

Is it, or is it not? This seems to be the question on everyone’s minds, but as yet, it seems that economists are divided over the answer.

Whether or not America is already in recession is something that people may still be debating about, but really purely on semantics. In reality, the slowdown is already very much upon the economy, and signs of it are everywhere.

Whoever has not heard of the sub-prime mortgage market before has surely been well educated about it by now. Already claiming a number of iconic American financial institutions like Bear Stearns, it has also caused the downfall of Northern Rock, one of the United Kingdom’s most trusted names in mortgage lending.

Of course, weakness in the financial system is never good, at least not for an economy that relies on borrowed money (and time) to finance itself. America -- as is all too familiar to most of us who have lived or visited there -- does not dwell in the present, as far as financing its consumer spending goes. Not in the least do consumers think about how much they earn before succumbing to that temptation to spend, but only about how much their credit limit can afford. Thus it is not uncommon for someone who subsists on survival wages to own expensive goods, all financed by plastic, and paid monthly in instalments so insignificant that in reality, it will take the borrower’s entire lifetime to ever repay.

As long as things stay on the up and up, living dangerously – in the financial sense – seems to be sustainable. Since the Clinton years, Americans have enjoyed an unprecedented period of economic prosperity that has made their economy the envy of those in the rest of the world. Set against the backdrop of economic confusion in the European Union, the stagnation of the Japanese economy, and fiscal mismanagement just about everywhere else, it seems the United States could do no wrong.

Clearly, with such a buoyant mood comes a certain sense of invincibility, and inevitably, recklessness. It is probably unwise to blame the financial community for causing the problem in its entirety, but it is not totally without basis to say that not-so-prudent instruments such as risky sub-prime mortgages and questionable asset-backed securities saw their heyday during the boom years.

Enter the “shock and awe” of George Bush’s Iraq adventure.

Without question, the decision to invade the Middle Eastern country was also spurred on by the same sense of American dominance that prevailed in the economic arena. After all, prosperity is power, and America certainly was feeling pretty powerful in those days.

Those days, unfortunately, are now long gone.

However little you remember of your economics classes all those many years ago, this you must not forget – psychology and economics are inseparable twins. The failure of the U.S. to impose its will on Iraq, the seeming hopelessness of the American occupation forces in the face of their enemies’ hit and run tactics, and the uncertainty of global oil supplies as a consequence of the protracted conflict, have all but depressed the American consumer into thinking that all cannot be well for the future. And as we already said, whatever the mind thinks, the economy mirrors. The result is an impending economic slowdown that now threatens to derail the global economy.

George W. Bush may have been motivated by dreams of historical immortality when he invaded Iraq – to be remembered like the war-time presidents who are forever worshipped in America's collective memory. But all he has managed so far is to awaken the nation’s most harrowing nightmare – that of an economy waking up to the fact that all along, it has been living on borrowed time – and the payback is drawing nigh.

Published in the Sun Star Daily, Saturday, April 12, 2008

Counting The Cost of Iraq

Whatever it was that George W. Bush must have been thinking when he decided to sponsor the invasion of Iraq, at the recent passing of its fifth anniversary, all those thoughts would have long been part of his distant memory. For never perhaps in his most pessimistic estimates would Bush have envisioned that Iraq would turn out the way it has—the killing fields not only of American soldiers, but the burial ground of its economy as well.

As far as casualties go, it is not quite on the scale of America’s previous engagements, such as the Great World War, the Second World War or even the more confined Vietnam conflict just yet. Those campaigns cost the United States whole generations of men and women—killed or wounded, with the latter both in physical and psychological terms. The Iraqi war has so far eluded the high body counts of Vietnam, but the impact it has had on the country cannot be underestimated.

They called Vietnam “a war made for television,” and unlike any other before it. It was responsible for exposing the horrors of armed conflict to the average family in middle America. It coincided, of course, with the rise of television as the medium of choice for news and information, and TV made sure that every twist and turn of that conflict made their way to America’s living rooms every evening, without fail.

The result was a generation of politicized Americans so horrified by the images of war that played out before their eyes, it took the US many years to even consider intervening in other countries’ troubles ever again.

History, however, has a way of glossing over the horrors of the past, especially once the generation that saw those horrors firsthand are no longer as traumatized with the experience. This was especially true with the administration of the current President Bush.

Unlike his father—who was a World War II fighter pilot—and even latter-day political stalwarts like John Kerry and John McCain, Bush did not fight in any conflict America was involved in, preferring instead to serve his country through the relatively safer duties of the Texas Air National Guard. Without demeaning the service, nor the patriotism of those who serve in the Guard, Bush was able to avoid actual conflict, and as a result, was probably less horrified by the prospect of waging war, and its deadly consequences.

He was thus able to rationalize his intentions as being purely motivated by America’s national security interests, and divorce himself from the emotions that the likes of Kerry and McCain would have, by definition, brought into the decision. In a manner of speaking, it was easier for him to send young Americans “in harm’s way,” because he himself had no idea what “in harm’s way” really meant to those soldiers on the ground.

Today, however, his memory vividly aided by the seemingly endless chain of flights ferrying back the dead and wounded from the battlefields of Iraq, George Bush must be one well-informed man indeed—well informed that is on the true horrors of war.

As it is, the scene of grieving widows and orphans must be enough to give any president sleepless nights over the propriety of his actions. But that is just one aspect of the cost of this terrible war—the other dimensions are just as damaging, and perhaps, even more damning for the legacy of this two-term president about to end his turn in power.

More next week.

Published in the Sun Star Daily, Saturday, March 29, 2008

Economic Diet (Part 2)

America, certainly, is a land of the obese and overweight.

Despite the obsession with Size Zero among the anorexic Hollywood crowd, the average American is a great deal many sizes more than your waif-like A-lister. Years of supersizing on burgers, fries and shakes tell their toll on a population that is probably, pound for pound, among the most overweight in the world.

What is going on in their physical state is exactly mirrored in their economic affairs as well.

Maxed-out credit cards—the financial equivalent of obesity—seems to be the norm among most Americans these days. The availability of cheap credit to people who are not used to financial prudence has given rise to this phenomenon, and fuelled what could yet be a time-bomb waiting to explode on the world.

One of the problems with our modern eco-nomy is that it has become too complicated for most of our consumers to understand. And one of the most misunderstood elements is personal credit—manifested by the now ubiquitous plastic credit card.

As they were conceived, credit cards were meant to replace cash in financial transactions. Convenience was its key feature, in that consumers no longer had to carry and count cash and change whenever and wherever they shopped. The operative word here, however, is “replace.”

The assumption is that the card holder still has the “cash” to purchase something with, just that payment is not actually made with the physical cash during the actual transaction.

Herein lies the big problem.

Today, credit cards are not looked at as replacements for cash transactions anymore, but as “supplements” to one’s actual cash funds. In other words, with an income of $2,000 per month, and a credit card with a $10,000 limit, most would assume that they could spend more than their monthly cash income.

But how could this be sustainable. If one consistently spent $2,000 plus per month on credit card purchases, and yet earned only $2,000 per month in income, how could one possibly hope to pay for all of his or her debt?

The answer is—one cannot.

Many Americans carry perpetual credit card balances, which they just transfer from credit card to credit card, without any prospect of ever paying for it in full. In good times, this practice is OK for a while, but when credit tightens in the event of an economic slowdown, all hell breaks loose.

What America, and indeed most of the West, now need is a re-education in personal financial prudence. People need to get back to basics and understand what personal financial responsibility is all about.

Before the invention of credit cards, this huge debt problem that now plagues America did not exist in this magnitude. With the plastic economy that we have today, somehow the issue seems to be spiraling well out of control.

I certainly would not advocate banning all personal credit altogether, because it has its important place in a functioning modern economy. What I would suggest, however, is moderation from consumers in spending with credit, as well as from financial institutions in extending that credit.

With a little bit more responsibility from both sides, whilst we still will not be able to avoid economic cycles altogether, it will be one hell of a smoother ride, I can guarantee you.

Published in the Sun Star Daily, Saturday, March 15, 2008

Economic Diet

Watching the Academy Awards ceremony last week, one would be forgiven for thinking that all is well in the United States of America. The endless parade of the Hollywood glitterati through the red carpet—in their designer frocks and million-dollar blings—would never give away the fact that storm clouds are a-brewing in the American economy.

And dark storm clouds they seem to be as well too.

Yes, for ordinary Americans, 2008 would seem to be a very difficult year indeed. The housing market is in the doldrums, unemployment is on the rise, and business confidence is at an all-time low. To compound the situation further, fuel prices show no sign of coming down, just as the war in Iraq seems to go on forever and ever.

One need not be an economist to tell that all is not well indeed!

It is amazing how today we know so much more about our health and well being. It used to be that in the past, dieting and exercise was the preserve of either the idle rich, or movie stars who need it to continue earning a living. Today, the general population is quite aware of their lifestyle habits, and most people know what they need to be doing to stay physically healthy.

Funny enough, we are being told now that the best diet is a no-diet. In other words, if one ate sensibly, exercised regularly and stayed away from excessive drinking and smoking, this lifestyle would benefit our health much better than indulging in excess, and then going on starvation diets to burn off the excess poundage afterwards. The latter not only stresses the heart but harms other vital organs as well, such as our liver.

In other words, for our health, the key is moderation.

A bit amazing therefore that what we know to be good for our physical health, we still haven’t quite figured out would be good for our economic health as well. One only needs to look back a few years ago at the American economy to understand what we mean.

During the good years, money, it seemed, was no object to the American consumer. Fuelled by the availability of cheap credit, everyone went on spending sprees, buying everything in sight—from fancy houses, expensive cars, flashy jewelry, designer clothes and grand vacations.

This orgy of spending, in turn, benefited a lot of businesses while it lasted. Companies expanded to meet the demand, employing more people to support their growing businesses. The newly employed, in turn, took it upon themselves to fuel the spending spree even more, creating still more demand and feeding a growing cycle of prosperity that seemed to go on and on.

But as the unhealthy soon find out about their condition, so does the economy realize that all is not well.

Like a chronic disease slowly manifesting itself over time, certain triggers eventually lead to a correction. High fuel prices tell their toll first. Rising business costs compel some to save money elsewhere, often by reducing their workforce. Sometimes they outsource a number of their processes overseas, for the same financial benefits, and also with similar consequences to their employees.

Of course, people without jobs lose the capacity to buy, and also the ability to pay for their past purchases.

More next week.

Published in the Sun Star Daily, Saturday, March 01, 2008