DUBAI, April 2012

Posted on June 16, 2012 by Tim Kochis

Las Vegas on the Gulf…in Arabic.

As part of a series of meetings with the Financial Planning Standards Board, I visited Dubai for a week in April, 2012.  Penelope was able to join me for a part of that time.  First impressions are always both very sharp and unreliable as reflective of a greater understanding, but I may never have the occassion to return, so here goes.

Sheik Zayed Road, 5AM, with rail lines
Dubai, most outward-looking city of the UAE (United Arab Emirates, the capital is Abu Dhabi) does not lack charm…but the charms are subtle in an environment of little subtlety.  The land is barren, the sea and sky a white-washed gray much of the time, unbearable heat (I’m told) in the summer months, but still fog from the Gulf and “shamal”…a fine cloud of dust… from the desert.  The recently constructed physical infrastructure is stunning: vast roads, impressive urban rail, and countless tall…including the world’s tallest…buildings with fanciful shapes, unlike anything to be seen anywhere else.  The architects were given license to play!  But, it may be a long while before they are close to being full. And the interiors are a true spectacle:  either completely “over the top” pretentious or the epitomy of elegance and sophistication depending on whether you happen to like the specific venue.
But, it is a very disciplined place, with, I sense, a strong determination to be unique, combining what it perceives as the “best” of two worlds.  You quickly notice that it is very clean…no litter…none, and no graffiti.  There are frequent, but very gentle, reminders of the call to prayer on public amps and TV’s and display screens in the stupendous shopping malls show a small, discrete outline of a mosque and minaret to alert the observant. About a quarter of the men and maybe 40% of the women wear traditional garments (white or pastels for the men, black or some other very dark color for the women), but few of the women are completely covered.  Islamic sensibilities are observed and respected, but not imposed.  There are no public displays of affection and Muslim couples do not always walk together, but at a few steps remove.  Still, men, especially young, are often arm-in-arm or holding hands as just a marker of friendship.  Taking someone’s photo, without permission, is not only rude; it can result in criminal penalties.

Dubai sets out to be a tolerant, Western-oriented oasis between, literally, the fundamentalism of Iran across the Gulf, to the East, and Saudi Arabia in the desert just beyond, to the West.  It appears that they are succeeding.  One feels personally very safe here.  And it is designed to make business feel very safe as well.  Ironically referred to as Dubai’s “Vatican City”, the DIFC (Dubai International Financial Center) is a portion of the city with its own laws, it’s own governing officials, its own courts, modelled on Western notions of contract law and legal procedure.  The expectation is that from that core, general economic liberalism and a westernized commercial regime will gradually spread throughout the region.

The Burj Khalifa, in shamal
However, there is never any question about where the real power lies.  So unfamiliar to American sensibilities, Dubai is as close to an absolute monarchy as the 21st century still observes. Sheik Muhammad bin Rashid al Maktoum, Vice-President and Prime Minister of the UAE, is the ruler of Dubai (The Sheik of Abu Dhabi, its ruler, is the UAE President) and their photographs are seen everywhere, including on giant billboards along the main roads.  His comings and goings, and those of his sons and heirs, are front page news in the local paper, every day.

Most of the people are not Emiratis.  Those few tend to be very wealthy and work, if they do, in government ministries.  The many others are European, US, and Asian financial expats, and workers from elsewhere in the middle east, Africa, and south Asia. The Emiratis are surprisingly tall…and especially good-looking.  Unsurprisingly, the food is varied and delicious.  But prices in the best restaurants are beyond belief (over $400 for two, with a not very special wine).  Alcohol is available and very expensive…but only in hotels (where the best restaurants are always located).  But the taxis are very cheap, so no excuse not to go out and explore!

Posted in Uncategorized | Comments Off

India Revisited

Posted on February 1, 2012 by Tim Kochis

Just returned from my second visit to India, the first was in 2005. In the meantime, it has become hard to recognize. Before, as well-travelled as I am, I found it too chaotic, too poor, too squalid thus outweighing it’s thrilling exoticism, its color, and uniquely complex and fascinating history (Dravidians, Aryans, Mughals, British, out-sourced American call centers and German engineers…see below…to be horribly oversimplified).

In the intervening 7 years, it’s 7.5 to 8% annual GDP growth is on display. It’s not as poor, not as squalid, not as chaotic…and not as exotic. Virtually all the men are only in Western attire and most of the women seem to have left their spectacularly coloful garments at home. And the enormous infrastructure deficit is rapidly being filled. Where the airports had been small, dark, and cramped, Mumbai, Bangalore, and Delhi all have brand new ones that put anything in the US to shame…well, just maybe Denver could play in the same league. New broad roads; a giant fly-over bridge that cuts about 45 minutes off the trip to the heart of Mumbai (by the way, it only costs about $1.50 to use it); 5 star business hotels abound.

The first world and the third world are still right next to eachother here, but there’s much more first…and less third…and you can now drink from the taps. And the food is still great!

A particularly ambitious 43 year old relationship manager sought my advice about breaking away from his very well compensated job at a major multi-national bank and plunging into the life of an entrepreneur to serve his clients in his own business. “It’s only been in the last five years that a professional can make as much or more than a business owner…and so much more than I ever thought I would make when I finished school.” I got the strong impression that he would be willing to leave the safety of a fat paycheck, but his wife and children and servants weren’t as eager.

Bangalore, or Bengaluru in the new respelling, re-pronunciation of many Indian cities (Kolkata = Calcutta; Chennai = Madras; Mumbai = Bombay; old-timers just roll their eyes and use the old names), was a revelation. Upon arrival, I got a taxi to my hotel and after announcing its name, the driver asked, “stadtmitte?” (German for city center, or “downtown”). Staying with the unexpected cosmopolitanism, I responded “Ja!” The next evening on my flight to Delhi, the plane was full of mostly Western business people, including quite a few tall, blondish Germans. At 3000 feet above sea level, Bangalore has a pleasant, mild climate year-round (where Mumbai, on the Arabian Sea, is hot and humid even in January and Delhi is chilly and prone to thick morning fogs this time of year). My host provided the transportation most of the day and actually drove himself…a rarity, I believe. Most professionals who can afford nice cars can afford drivers. On passing a major street, marked only “M G Road”, I asked what that stood for. With a withering sigh, I was told that it stands for Mahatma Gandhi Road: “Every town in India has one, there’s no point in actually writing it out”.

Delhi, as before, impresses you with it’s strong European look: broad avenues, landscaped traffic circles; handsome civic buildings and monuments in classical Western proportions. The British created this look to make themselves feel at home in their imperial capital, ironically with some of the most majestic structures finished only a decade or so before they left it all behind. Delhi is marking it’s 100th anniversary as India’s capital (the Brits moved it from Calcutta before that); while 100 years is not much on India’s time scale, the modern, independent country itself is only 65 years old. I happened to be there the day before Republic Day, roughly the equivalent of our 4th of July. Preparations were intense for the parades and speeches and the millions(!) of spectators expected the next day.

Probably due to that timing, there was some conversation and a fair amount of media attention on the idea of India emerging as a significant world power…to match its rapidly growing wealth. Like China’s, India’s wealth and power stalled for several centuries as the Europeans’ advanced. Like the other Asian giant, India is starting to see itself as properly reclaiming its ancient ascendancy and even besting China in the process because of its considerably younger and more broadly diverse population. Democracy (while especially messy and, many believe, openly corrupt) seems an advantage, long term; and, of course, English is spoken everywhere.

Many people thus believe that India and the US are eachother’s natural allies in advancing joint prosperity and cultural sway…and counter-balancing the power of China.

There’s much more to learn and it will be hugely exciting to watch closely….and even better, to participate. When I left India the last time, frankly, I was in no rush to return. Now, I can’t wait to get back!

Posted in Uncategorized | Comments Off

Optimism Inspires Optimism

Posted on November 23, 2011 by Tim Kochis

2011 involved quite a bit of overseas travel for us, some for pleasure and some for business…usually both.

Madrid was a wonderful experience for the art, the food, the architecture and the weather (very warm and sunny and very long days, with dusks that seemed to last well into the night…a nice congruence with the dining patterns of not beginning to go out for dinner until about 10PM). The city is handsome and the museums, especially the Prado, are among the finest in the world, not just for their spectacular collections but for the grace and ease of the buildings that house them. Don’t miss the Thyssen-Bournemissa.

The Royal Palace, Madrid
Atahualpa

The history is also fascinating, though Madrid is not an ancient city…a relative newcomer among Europe’s capitals. The impact is, I think, greatest on an American (North and South American, that is) since the real history of Madrid begins with the conquest of most of those two continents by a tiny number of Spaniards and their now well-known chief allies: guns, germs, and steel. The American empire’s gold and silver…and coffee, and cacao, and tobacco, and maise returning across the Atlantic made Spain hugely rich and caused it to rank first among European nations for nearly 400 years after Columbus sailed. The most impressive building in Madrid is the Royal Palace. High above its main entrance are two monumental statues, one of Moctezuma and the other of Atahualpa, acknowledging the source of the grandeur Madrid came to enjoy.

Today, the pace is relaxed (at least in August) and the spirit of grandeur seems to be replaced by a sense of a final moment of comfort on the eve of an unknown but probably unwelcome next chapter. Not exactly pessimism, but a resignation that not so good times are ahead…and that there’s not much to be done about it, but muddle through. In the midst of the August version of the European soveriegn debt crisis coming to a head, in one of the most significantly vulnerable locales, there was a puzzling non-chalance. It may have been that the Madrilenos were away for their August holiday and the tourists couldn’t really care…besides, the Pope was due to arrive soon for World Youth Day (week?) celebrations, so why worry about the economy when the food is so good and the weather is so nice? At the least, I’d say that you sensed no urgency to action.

In fairness, the Spanish have since then just elected a new government, committed to long term solutions to Spain’s fiscal problems and to reducing structural impediments to its long range economic success. I wish them very well in these efforts, for all of our sakes and especially for theirs. I’m eager to return.

Shanghai (July) and Hong Kong (October) were mostly business: speeches, interviews, meetings with fellow professionals, potential clients, and with government officials, awards presentations, a true blizzard of card exchanges. In both of these cities, the forward perspective and optimism were palpable. Things were so much better (bigger, more modern, taller, cleaner, more fun!) than they had been before and they were going to be even more so soon. Everyone had an idea for their own success and how that contributed to, or relied upon, the success of the country as a whole. In either event, the whole society had a common stake. In contrast to the non-chalance of Europe, China is on the make…especially the women. Women were disproportionately represented in every entrepreneurial venue we encountered.

A sense of confidence is everywhere. No challenge is too great, no accomplishment beyond reach…and what are we waiting for?…let’s get busy!

I give you just two examples: from workaday to the height (literally) of publicly visible luxury.

The Hong Kong subway goes everywhere (including under the harbor of course), is cheap, full of passengers at every hour, and was built in just a few years! Imagine the obstacles, time, and cost it would take to match it in the US? I’m not sure that we’d even try. The now tallest building in Hong Kong (that claim seems to change every year or so; the most impressive buildings in town when I made my first visit here in the early ’80′s are now in the shadow of newer neighbors) has at its top floors the Ritz Carlton Hotel and its dining room at the very top. The setting, materials, and super chic design are almost beyond description in their beauty and power to impress. It’s not at all the only public space designed to “blow you away” with it’s elegance…just, for now, the highest above sea level.

This is not to say that China has no serious problems to cope with. It does, naming just a few: rural poverty, bad age demographics, risks of asset bubbles, an eventually unsustainable central political control, and a delicate balancing of its economic power throughout the world, its cultural influence, and its potential military power in East Asia and the Pacific. However, the strong impression you get is that the Chinese are not afraid of these challenges and have great confidence in their ability to achieve results that are well beyond merely okay.

Posted in Uncategorized | Comments Off

Solving the Healthcare Mess

Posted on March 3, 2010 by Tim Kochis
Anyone who has had even passing experience, recently, with the delivery of health care and the insurance financing arrangements that attend it comes away yearning for improvement; there must be something that can be done. The current political debate about what steps our society can take have raised the issue to fever pitch, but no convincing solution, at anything close to affordable cost, seems to be seriously on the table. I’m not optimistic that the present political environment will yield good results. What follows is my attempt to sort out some of the more important issues…if only for myself…so the conversation I have with myself and with others is not so frustratingly muddled. For ease of reference, I’ve identified themes as (D) Democrat, (R) Republican, or (N) Neither.

Let’s start with the philosophy of where major societal solutions should come from. Acknowledging the over-generalization, one (D) approach is to rely on a wise and benevolent government to provide, or at least catalyze, the solution. The other key philosophical approach (R) is to rely on private solutions, harnessing the aggregate wisdom of millions of participants’ self-interest. Philosophically, that latter approach appeals most strongly to me. We rely on private solutions (and tolerate major societal disparities) on such basic human needs as food, clothing, shelter, transportation. In our system, no-one expects the government to provide food, or housing, or an automobile comparable to what the wealthy can afford. In fact, extreme examples of consumption in these realms are usually matters of admiration, a plateau of size, quality, speed, or fashion that most are willing to strive for, without the expectation of any particular help from the government. But none of these examples are pure. Government subsidies (e.g. food-stamps or heavily subsidized public transportation) are often at work to establish a floor level above which private consumption can reach virtually unlimited heights.

Maybe a better example would be education, for there too, as in health care, society, itself, has a substantial interest in every member of that society having access to good quantity and quality. But while government, thru tax revenues, provides a comprehensive system of education at all levels, private alternatives abound and, especially at the primary and secondary levels, are generally considered superior (often very much so) to their public alternatives. If it didn’t generally deliver excellence, private education’s consumers would look elsewhere and it wouldn’t survive. Public education, even where it delivers horrible results, manages to survive because of its governmental aegis. It is often barely tolerated only by those who can’t afford to escape it. If society has an interest in broadly available, high quality health care, I’d argue that it has an even greater interest in high quality, broadly available education for its members. Education primarily benefits society through those who have their productive lives mostly ahead of them; health care is mostly spent on those who have already made the bulk of the contributions of which they are capable. So, if health care needs fixing, maybe education needs it even more; and the education “public option” (D) has not made a great case for its providing the solution to either.

Still, a private health care situation can’t make a great case either. If it were really able to provide the solution, why hasn’t the market place already done so? I think I know a number of reasons, all of which, I believe, can be managed, in time. But, still, some governmental support (direct subsidy and/or tax allowance)(D) may be necessary to “jump start” a better plan.

  • Refocus attention on good health outcomes, not on transactions/procedures, regardless of their impact on actual results. Here are some actual ways to do that.
  • Change our mentality about the role of health insurance. It is the problem, not the solution. Today, some tend to think of that coverage as needing to provide access to the ultimate in procedures, or treatments, or medications, regardless of cost, from the first dollar. When we insure our homes, we don’t expect that coverage to apply to the replacement of burnt-out light bulbs, but some seem to behave as if health insurance should cover small things, as if by right. I happily acknowledge the benefit of this stunning example from David Goldhill’s excellent article in The Atlantic, Sept, 2009. I owe much of my current thinking about how to solve our health care problems to his wise analysis. So, instead of thinking of health insurance as a “first dollar” proposition, view it as catastrophe level coverage that would provide extreme care, rarely, to keep anyone from having to exhaust their other resources to meet extreme needs. Because of the very high deductibles and very substantial “co-pays” that this would involve, this catastrophe level coverage could be very inexpensive (if other features apply…read on). To make this “core” insurance coverage especially cheap, we could mandate that everyoneacquire it (D), broadening the pool of premium payers and reducing the liability risks of the insurers. This would mean including in the mandate especially the young and healthy. For those very poor for whom even this cheap coverage would be difficult to afford, we could provide some government subsidy (D).
  • Since the threshholds of actual coverage would be very high in this regime, individuals would have substantial incentive to carefully evaluate the cost/benefit calculus of their healthcare use (R)…as they do in every other realm of their economic activity. That consumer consciousness would go a long way to discipline the delivery system on quality and cost, forcing providers and the insurers themselves to provide good value for money.
  • To make sure people don’t just ignore their health situation until extreme care becomes necessary, the mandated core insurance could cover a comprehensive physical examination at appropriate age intervals, with “discounted” costs for therapies that are identified and promptly pursued as a result of such periodic examinations.
  • Expand HSA’s (Health Savings Accounts) by making the deductible contribution larger and making the HSA funds eligible for payment of premiums for coverage in addition to the mandatory core. But, as a counterpoint, and as a way to make this tax-neutral, eliminate (gradually) the non-taxability of employer provided health insurance. This is an idea whose time has passed (a large industrial employer-based solution, inaugurated when wage controls precluded cash wage increases; the times, they have a changed!)
  • Enable a nation-wide health insurance market (R), to provide access to very large policy-holder bases (reduces premium costs and liability risks).
  • Cap malpractice awards (R). Some argue that this is a very small problem in the overall tally of costs. Even if true, I’m not sure why it’s being small should permit us to not solve a problem that many believe exists. More important than the direct malpractice recovery costs, however, are the impacts on practitioners’ insurance costs (passed on to health care consumers) and the mentality of practicing “defensive medicine”.
  • Finally, and this is the big one: gradually eliminate Medicare (N). Start by raising the eligibility age from the current 65, by 2 years, every 4 years. In 40 years, the threshhold elibility age would then be 85; then, 40 years from now, bring the program to a complete close. Anyone today older than 40 would get some, diminishing Medicare benefit. Anyone today 40 years old or younger would be on notice that they will have to fend for themselves…even in their very old age. But with decades of opportunity to accumulate reserves in HSA accounts and with their mandatory core, catastrophic insurance policies in place, everyone (younger, or older, than 40, today) will probably be in a much better place to wisely manage… and pay for… their health care needs than most other aspects of a comfortable life in old age. And, in the meantime, society as whole will have saved an enormous cost.
Posted in Uncategorized | Comments Off

Removal of Stimulus should be GOOD News

Posted on February 18, 2010 by Tim Kochis
After the close of US markets today, the Federal Reserve raised it’s discount rate (the rate at which it lends to eligible institutions, generally commercial banks) to 75 basis points. This was the first increase in three years and is part of the already announced plan to gradually reduce the significant monetary stimulus that it has engaged in as part of the global effort to combat the recent severe credit crisis. This is important evidence of the Fed’s belief that the economic recovery underway in the US is real and sustainable (though still fragile…the rate is only .75%). Taking an even medium term view (weeks or months), investment markets should rejoice in the prospect of fundamental economic growth continuing. Instead, the perverse initial response appears to be more than modestly negative. Asian markets have declined today by more than 2% and, if the same mentality prevails, one can expect the same directional movement in Europe and the Americas as the new trading day unfolds.The immediate fear that reduced governmental stimulus (even if only a very modest reduction and only gradual) will stall the recovery seems to be trumping the notion that the withdrawal of government stimulus is precisely what must occur if the world’s economy is to stand on it own feet. Of course, it is true that the Fed and its counterparts around the world could get it wrong: the withdrawal of stimulus being too early or too much. But, they could get it wrong in the other direction, as well: too little and too late, with consequent inflation and renewed asset bubble risks…the very error of recent times probably contributing to the problem of excessive leverage that we are now suffering through.

My bet would be on the monetary authorities getting it more right than wrong. Consequently, if one has long term confidence in market performance but is tempted to time market entry based on “irrational” behavior, this will probably turn out to be a good day to be buying.

Posted in Uncategorized | Comments Off

When does History Begin?

Posted on January 31, 2010 by Tim Kochis
Just returned from a week in Cambodia. Traveling with The Asia Foundation gave the visit an especially insightful focus on the country’s economic, social, and governmental development. What a story !…though only vaguely in mind to Americans, despite the fact that some of the most significant events occured quite recently and were in part the outcome of the regional destabilization our military activity in Vietnam caused. You’d think we’d be more aware, but attention spans are both short and narrow. There is no substitute for actually experiencing a place first hand.

In some ways, it’s amazing that this country still exists at all. Roughly one quarter of its people (especially including all “elites”) were annihilated in a few years in the mid to late ’70′s under Pol Pot’s ultra-communist Khmer Rouge regime. Phnom Penh, now a blur of vibrant activity, was completely depopulated by the KR as it moved all of it’s people to agricultural collectives in the countryside under the inspiration of the worst of Maoist Chinese excesses. Eventually, the country was rescued by the army of its historical foe, Vietnam, supported by the Russians. The French, having stronger interests elsewhere, left peacefully in 1953…but it was another 45 years before that power vacuum was filled by a political stability that we would recognize as “comfortable” today.

You are struck by how gentle and open the Cambodian people are. They are very young (65% under 25), still very poor (GDP per capita under $600/yr), with a very weak education system and a culture of petty corruption at all levels. Still, they are optimistic, deeply devoted to their families, and eager to welcome visitors. It’s easy to see why many wealthy Westerners have engaged in private philanthropy to assist education and preserve local culture. The attraction of this place is stunning and the needs are very great. The Cambodians appear genuinely grateful for even small attention and meager support; but you feel that so much more is truly deserved.

Angkor: Cambodia’s capital, Phnom Penh, has the bustle of a developing country’s major city, a very fine National Museum, a royal enclave of exotic state buildings, reminiscent of Bangkok’s Grand Palace, and the Silver Pagoda (the King’s own Buddhist temple) where the entire floor is paved in silver tiles fashioned from melted coins. But the reason tourists come to Cambodia is its old capital, Angkor. Angkor Wat (the largest religious structure ever built) is merely the largest of hundreds of major and minor sites that together comprise an absolutely breathtaking assembly of ancient architecture and the evidence of a once great empire.

A few observations/recommendations:

  • Come in January, the dry and relatively cool season and spend at least 3 days; I would have been happy to spend twice that long. There are many 4 and 5 star accomodations and more on the way. You can “rough it” if you want but there’s no need to leave Western luxury behind.
  • Make sure you devote time to some of the “lesser” sites like Preah Kahn and Ta Keo; this place is immense. The UNESCO park that encompasses the major temple areas is 144 sq. km, about half the size of Chicago.
  • The great builder of many of these sites was the king Jayavarman VII (“J7″) who reigned for 34 years. All of his many constructions, start to finish, were done in that brief time, with gigantic pieces of stone quarried many miles away and moved only by human and animal power and then carved, with stunning beauty, after they were in place (as high as 280 feet above ground level): in only 34 years! The great European cathedrals were tiny by comparison and took centuries.
  • Religious extremism is nothing new: The Hindu pantheon and cultural legacy forms the backdrop for most of the architecture, but J7 used his building campaign to aggrandize himself, of course, but also to provide suitable venues for devotion to Buddha. Many hundred thousand statues and other carved images of Buddha were the central theme of these temples. The very next king reverted devotion to Hinduism and had all of the Buddha images removed or destroyed…all of them. An enormous amount of work, done, and then undone.
  • The city that surrounded and maintained these edifices in the 9th-15th centuries is estimated to have had a population of one million people! (The largest European cities at the time had maybe 50,000). All physical traces of their habitations (all wooden, including the royal palaces) are long gone to the monsoons and forests.
  • Consider what is means to “preserve” this world treasure. There are many competing points of view: all in evidence as you explore different sites that have been, still are, and are expected to still receive attention. Should we restore the structures to a pristine state, with toppled stones replaced and fresh stone installed where former pieces are missing (but… Buddha…or Vishnu?); should we merely make them safely accessible, as is, to modern tourists, enthralled by the “Tomb Raiders” romance; or something else? The monsoons, the forest, and earthquakes are not going away; and the people who built and used these temples are not coming back. When does history begin? *

*Thanks to John Sandey, our guide and teacher on our first encounter with Angkor and the author of this question.

Posted in Uncategorized | Comments Off

Thoughts from Vietnam

Posted on January 22, 2010 by Tim Kochis

Mid-way through a visit to Hanoi and eager to share some “first” impressions. I say “first” with qualification because I was in Vietnam before, in Dec ’69-Jan ’70, in the US Army during what people here call The American War. That time (40 years ago) and place (remote countryside not far south of The Demilitarized Zone in then South Vietnam) was very different from contemporary Hanoi. No-one here, by the way, seems to much care about that fact. The war is now largely historical artifact and most of the people (this is a very young country) were born after that conflict came to an end. I’m told that the official history taught in schools is that Americans were evil aggressors, but that nobody takes that very seriously. There is, again I’m told, nearly universal apathy about political ideology. Politicians are seen as venal if not corrupt and everybody seems to be in a gigantic hustle to enjoy greater participation in western culture and first world prosperity.

Still, the people are patriotic and proud of their accomplishments (ousting the French and then the Americans in the space of a two decades) in achieving a unified and independent country. Ho Chi Minh is revered as a combination of the father of his country and a saint (temples have statues of him next to Buddha and prayers and burned incense are offered to him as well); but the fact that the political regime is formally one of the few remaining Communist vestiges (if “vestige” is a word that could apply to China) seems largely beside the point.

On a considerably more mundane level, here are a few travel advisory notes:

  • It’s better to come here when it’s not grey and constantly raining, I’m sure. One of the premier side-excursions, to Halong Bay, was pointless with the current weather.
  • Don’t freak-out trying to cross the road or wait for the traffic to stop. It won’t…just do as the Vietnamese and walk right into it; the drivers are watching you and if you walk smoothly and directly, they’ll make their way around you. Our guide yesterday explained that everyone drives slowly, watching out for other drivers (mostly motorbikes) and people on foot. If you run, they don’t know how to guage your progress and, worse, you might fall; but if you just walk, they’ll manage around you. It’s scary at first, but it works.
  • As many in America already know from the many Vietnamese restaurants now in the US, the food is great! You’ll encounter some vegetables, fruit, and seafood items you may never have seen before; go ahead be daring.
  • The art scene is worth getting to know. Still relatively inexpensive and some unique applications (lacquer works using paint, mother of pearl, metallic leaf, and duck egg shells). Penelope and I have bought 4 items (so far) without spending a great deal of money.
  • About the money: the denominations are so big (about 17000 Dong/dollar) that most places price, and transact, in dollars. But you won’t have to spend a whole lot in any event. Lunch for 2, with drinks: $15; silk ties, $8.
  • The people are getting richer, but are still poor (per capita income: $1,100/yr), so tip generously. We’ve had tour guides during the last 2 days who speak good English (they apologize, however, indicating that they speak much better Russian…remember, while it is pretty irrelevant today, Vietnam was a Russian client state for years while many here were going to school and Russian was the key foreign language on offer for the bright and ambitious). Guiding tourists is a quite respectable occupation here. For example, our guide today has as his day job working in the Ministry of Health’s Bureau of Tropical Diseases, specializing in malaria. He studied biology for 4 years in St. Petersburg. He agreed that we needed to take malarone when we got to Cambodia, but “you’re OK anywhere in Vietnam…except in the jungle, of course”.

More, soon

Posted in Uncategorized | Comments Off

We need tax policy, not tax opportunism

Posted on January 12, 2010 by Tim Kochis
Sadly, today’s news contained two examples of how we should not be approaching generating government revenue: a special tax or fee on (unspecified) banks which had received TARP money and application of an increased Medicare tax on “investment” income. One hopes for a comprehensive tax policy that is durable and that fosters broadly agreed upon goals for economic growth and social welfare. What members of Congress and the Administration decided to float today was just the opposite: an opportunistic grab at temporary targets of perceived riches or of populist disdain.If we want more robust economic activity, adding additional tax burden (a new, unrelated “Medicare” tax, at an increased rate, at that) on the results of investment is not the way to get it. Raising the price of success means that we will get less of it.

Imposing a punitive tax or fee on the banks (even those which have repayed all the TARP money…with interest) reminds one of Willie Horton’s response when asked why he robbed banks. Such a tax/fee would bear no relationship to the expense that the government incurred (…repaid, with interest!) and could even violate the Constitution as a “Bill of Attainder”, levied specifically at individual entities by government officials.

Probably, neither of these proposals will end up as law; forces in opposition are probably strong enough. What is especially disheartening, however, is the unapologetic effort to pander to populist misunderstanding of what TARP intended to do and the success it has had thus far and the brazen grab for money wherever it can be found. Where are the statespersons…on either side of the aisle and at either end of Pennsylvania Avenue?

Posted in Uncategorized | Comments Off