A Beautiful Crime

Art exists in many forms – Van Gogh found it in painting, Frank Lloyd Wright found it in architecture, and Michael Jackson found it in dancing and singing, etc. And for Philippe Petit, he once found it in crime.

I found this article about Philippe Petit, a famous French tightrope walker, and his history of crossing between the twin towers of World Trade Center on a wire back in 1974. The crossing is not only made by Philip, but by the friends of Philip and those who were entertained by such a dangerous idea. At first I thought I was watching a group of professional criminals trying to destroy the towers. They spent several years of efforts to "premeditate" the crime together - they even had an insider in one of the extremely secured towers. However, I later discovered that this "artistic crime of the century" - named by Time Magazine - is neither a crime nor a serious villainy futile. In fact, it is simply a pursuit of the passion and happiness. Perhaps the story of Philip is an extreme example of having a passion they can die for, but I think we should learn the attitude of Philip: If you have a passion, it must be pursued at any price, if you fail or even die because of the pursuit, it is a beautiful failure.

Philippe Petit's interesting quotations:
- "My crime is purely artistic. If I have to ask for permission to do it and I am refused, I will still do it anyway. To me, this is obvious: there is no need to ask for permission when we want to accomplish something beautiful. It just needs to be done."

- "Being a tightrope walker, it is not a profession but a way of life. Crossing on a wire is a metaphor for life: there is a beginning, an end, progression, and if you make a wrong step, you die."

- "To me, it seems so simple that life should be lived on the wire, meaning to see every day, every year, every idea as a real challenge."

China's Very Own Cola

As I was doing some routine blog readings, I came across this blog post about Future Cola, one of the successful Shan Zhai businesses that I mentioned in my recent article. I think it would be interesting to elaborate more on its rise.

Although it copied the packaging of Coca-Cola, Future Cola actually researched substantially on what flavor was tailored for the Chinese palate. Eventually, it came up with the taste, which it claimed to represent a healthy way to cool off the Chinese youngsters and clean out their fiery livers. With a strategy similar to BaWang’s, Future Cola targeted at overlooked consumers in lower-tier cities and rural areas. Taking advantage of Shan Zhai to achieve low production costs, Future Cola rapidly imported state-of-the-art equipment and localized production facilities. Furthermore, it leveraged the resources of its parent company, Wahaha Group, in order to establish a vast distribution network in target markets. More important, it launched an aggressive but very focused marketing campaign to build a brand image as “the Chinese people’s own cola.” Once mocked as a cheap copycat of Coca-Cola, Future Cola has now grown into the third-largest player in China’s carbonated soft drinks market after Coca-Cola and Pepsi, with a competitive edge in less developed markets. To expand its market presence further, Future Cola is even planning to challenge the two beverage giants by entering the first-tier markets.

This is just one of many stories about venturous and innovative Shan Zhai businesses.

The era of Shan Zhai seems to be on its way.

Chinese Democracy in Becoming a Star

While many people nowadays may still see China as a community nation where the Party takes total control of its people, I recently found democracy in this Chinese television show called Super Girl.

Considered as the Shan Zhai version of American Idol, Super Girl is an open competition any female contestant regardless of her age, origin, appearance, or the way she sings. But unlike the U.S. show, Super Girl judges are selected from different backgrounds in the society – some of them are even picked from the audience. And the most astounding part is that in the final stages the winners are not chosen by judges at all; instead they are elected by viewers from all over the country by telephone and text messages.

It has turned out that such fearless form of democracy has culturally conquered China. The 2005 season finale was one of the most popular shows in Chinese broadcast history, drawing over 400 million viewers, more than the China Central Television New Year's Gala – the usual number one show every year – earlier that year. Think about it. The number is even bigger than that of the U.S. population! Further, roughly over 600 million votes on average were casted in every season, making this show one of the most democratic phenomena in contemporary Chinese history.

Super Girl has evidently created incredible commercial success and unprecedented social impacts. Though there remain some opposing voices, particularly from the government, that accuse the show of polluting the Chinese culture with foreign ideologies and promoting a low culture to the youth, they have to realize that globalization, which today continues to assimilates various cultures, is inevitable and unstoppable. To put this way, Chinese people watching Super Girl is roughly the same idea as Westerners learning Chinese after all.

Probably they might change their mind after watching Jane Zhang’s spectacular performance in The Oprah Winfrey Show.

Building Earth on Earth? Save Enough Money First

The Arabs have got the bad habits of Westerners - they don't save enough money for luxuries.

Human Fat Trafficking: A Price Worth Paying for Beauty?

Four people were arrested in Peru early this month for trafficking human fat, which could be linked to sixty disappearances. Seven other people were wanted, including two Italians. According to the inspector, the fat was to be sold later to cosmetics laboratories in Europe. Moreover, human fat may cost as much as 10,056 euros (approximately USD15,000) per gallon in European countries.

I also heard from other sources that the group of traffickers typically kill farmers or indigenous people who are fat and live in isolated villages. Then they roast the victims' limbs to extract the fat. Without doubt, this is extremely disgusting and inhumane, I thought the movie "Fight Club" in which people produce soaps with human fat was a little exaggerated, but it does happen in reality. There are indeed people who kill others of their own kind to make a living. I do not know else I can say. This is really really sad.

The Purpose of Spam

You don't make much money doing that, right? So what is the purpose of Spam?

The Dream Prison

Filipino prisoners at CPDRC dancing to Michael Jackson's Thriller.

How Much Is an Andy Warhol?

This article talks about an interesting scandal in the history of art at "Art by Telephone" by Andy Warhol. A man named Joe Simon bought a red self-portrait of Andy Warhol silkscreen on canvas in 1989 for investment. But then the Andy Warhol Authentication Board refused to certify the work, even the painting was signed by the artist. In other words, the painting is worth nothing. The committee explained that Warhol was not present during the creation of the work - he gave the printer instructions by phone. While Andy Warhol is famous for producing artworks in a mass scale with the help of a telephone and the execution of his assistants and printers, the Board aims to eliminate the "ready made" to preserve those that are rare. Thus, Andy Warhol's "art by phone" has triggered controversies on authorship in general.

I think that "the art by telephone" gives a delicate gray area on the authenticity of an artwork. The works of "art by phone" are not created by the artist himself, but the artist permits, or even demands, the production of the works. It's really difficult to decide whether a work is authentic or not. But I probably agree with the committee - only works that artists create themselves should be considered authentic. Perhaps art investors should be more careful when they encounter "ready made" artworks, especially those of Andy Warhol!

A "Novel" Way To Read Newspapers

Alfred Sirleaf’s ‘Daily Talk’ newspaper reaches thousands of Liberians every day in the tiny African country’s capital, Monrovia, but he always produces only one copy - he writes the day’s biggest stories on a large blackboard beside a busy road, something Sirleaf has done since he founded The Daily Talk in 2000.

Mario Garcia said, "I have found great inspiration in Sirleaf’s model of a newspaper that serves its purpose in grand style, yet he produces it daily by just writing with chalk on a board. It proves that storytelling is more about the stories than the medium or the technology. If we ever needed a reminder of this, then Sirleaf’s newspaper on a blackboard is the ultimate testimony." Well said.

All Cities Should Have Sisters

A beautiful example of globalization.

What Remains of Our Love?

Paris, the City of Love, is not full of love anymore. In response to the severe divorce problem in France, Nouveau Départ (translation: New Starting Point) – the first fair about divorce, separation and widowhood – will take place in Paris on the coming 7th and 8th. According to the organizer Brigitte Gaumet, the fair is intended to help women with marital problems find a new starting point in their lives. I think that the fair, to a certain extent, brings out the trend that marriages and relationships nowadays are generally fragile. More and more people look for practical advantages, such as money and social status, in a relationship rather than the ideal person that they can spend the rest of their lives with. Worst of all, many people always want to be loved, but they failed to realize that they have to be giving in order to make love more rewarding. If we continue to have such attitude, true love will not exist anymore!

George Soros' Open Society

George Soros lectured yesterday on the concept of open society (see link), which argues that capitalism may not seem as applicable to today's world as it was before. He also emphasized that the society would function better if roles as political participants and those as market participants are separated. This is a very interesting read that critically challenges many economic principles that we learn in class. Enjoy!

Clowns and Jesters on the Economic Crisis

To me, there are two major kinds of jokes: those made by clowns and those by jesters.

Clowns make jokes by being the jokes. Slamming a door on their hands, tripping over their own feet, and falling into a pit are just a few examples. Others laugh at clowns simply because they find their jokes foolish, and sometimes to the point of being ridiculous. On the other hand, jesters make jokes by delivering the truth. Although their jokes may often sound outrageous, they merely reveal the implausible-but-true sides about the very world that we live in. People laugh at jesters because they find their jokes too witty, too true, too overwhelming, and perhaps too sad, to the point that they can do nothing else but laugh.

In his various appearances on CNBC and Fox News during 2006 and 2007, Peter Schiff predicted that a financial crisis was on its way and that the U.S. economy would enter a longer-than-ever recession. What’s more, he further stressed in that the subprime mortgage problem would transform into a large-scale mortgage crisis in which sky-high real estate prices would crash back down to Earth. At that time, most economists and financial forecasters laughed at Schiff in denial, thinking that he was full of nonsense.

Later in 2007, the U.S. housing market collapsed, which then turned into an ongoing series of economic crises throughout the world.

Today people have found out that Schiff was not a clown who cried wolf, but a helpless jester who tried to warn everyone that all the great things happening before the crisis were just too good to be true. Indeed too much consumption and borrowing rather than production ended up harming the well-being of the U.S. economy. Indeed aggressive speculative buying and incomplete lending standards turned out damaging the health of the local real estate market. Not only have Schiff’s revelations ultimately won him a penny from Arthur Laffer, but they have probably brought a triumph for Austrian economics over supply-side economics – having low tax rates, as well as lenient monetary and fiscal policies as incentives for businesses to increase the supply of goods did not promote the U.S. economy at all; most Americans plainly could not afford to consume any of them because they did not produce or even save enough to accumulate wealth in the first place. When the credit market – a vital source of “income” for Americans – tumbled, so did the entire economy. And it did, both theoretically and actually. What the critics of Schiff can do now is to laugh, and be laughed, at their own stupidity.

But Schiff was not completely right.

Also as a zealous believer in “the holy invisible hand,” Schiff asserted that the government should not intervene at all since the current economic crisis was rather a solution. To some extent, it makes good theoretical sense. The main theme of capitalism has always been that good businesses survive and bad ones do not. The deaths of greedy and irresponsible businesses, such as Lehman Brothers, are merely what were needed to make capitalism work.

However, capitalism as a theory contains a number of flaws. An important and blatant one has to be the widening of the rich-poor gap. Adhering to the laissez-faire spirit, advantaged businesses and individuals continue to succeed while disadvantaged ones continue to fail. As a byproduct of such mechanism, the poor unfortunately have to become poorer as the rich get richer and fatter everyday. It is only capitalism that can make a place both heaven and hell at the same time (see Hong Kong).

The current crisis also presents another undisputable defect: under the market economy system, where everyone is free to act upon their self interest, things can go out of control at any second. All the major aftermaths, expected (see the 2008 stock market crash) and unexpected (see Bernard Madoff’s investment frauds), that have broken out over the past three years clearly explain this argument.

And to be frank, the “capitalism” we experience in America is not Adam Smith’s good old capitalism anymore. Like many other western administrations, the U.S. government nowadays tends to pursue the Middle Way between socialism and capitalism in order to ensure the stability of the economy. The establishment of Federal Reserve, U.S. Treasury and various regulatory agencies probably serve as an implicit acknowledgement that there should at least be minimum standards and limited regulations so that the economy can grow in a manageable manner.

Anyhow, pushing too unrealistically for an economy with almost zero government intervention in order to validate an ideology created several hundred years ago may not be a sound idea. Perhaps Schiff deserves some giggles for being too “capitalist” after all.

Let’s face it. Adam Smith does not rule the world anymore – the U.S. government itself has already leveraged billions of trillions of taxpayers’ money on bailing out “too big to fail” banks and carrying out a “too big to possibly repay China” stimulus plan.

Although this is what we all need to learn to accept, one must say that Fed Chairman Ben Bernanke’s decision to create over 1 trillion new dollars really challenges everyone’s tolerance. Having previously failed to see the subprime mortgage crisis snowballing like other “clowns,” Bernanke has now printed such an enormous amount of new money to subsidize failing investment banks, to acquire toxic assets, and to replace the collapsing credit market with the Fed. While Bernanke, based on his extensive research on the Great Depression when he was still a scholar, believes that such move would save the economy from a worse collapse, he is actually exposing the U.S. economy to another potential danger: hyperinflation. This seems to me somewhat of a radical strategy that tries to ease a short-term pain by inflicting a long-term one.

Moreover, Bernanke should realize that the current economic crisis is much more convoluted than the Great Depression. Nassim Nicholas Taleb suggested that nowadays the Internet and globalization generate too many extreme variations that are underestimated by economic models relying on mathematics and theories. Therefore, using an outdated case study – here, the Great Depression – to formulate solutions for the current crisis is probably not very responsible of the most powerful central banker in the world to do.

Maybe there are times when we do not know whether we should laugh or be mad at someone’s outrageous action – well, it’s still too early to make a judgment.

Even though many critics (see John Kay and Liaquat Ahamed) remain unhappy with those who are in charge of the world’s financial system for being too theoretical and academic, what’s done is done. While keeping our fingers crossed for those critical measures to eventually work out, we should focus on coming up with feasible reforms in attempts to prevent an even bigger economic crisis from happening in the future.

As for myself, I would rather listen to the street-smart all-time winners than those book-smart pedantic scholars. One great role model to learn from would be George Soros, who was the biggest winner during the 1997 Asian Financial Crisis and made a solid 8 percent return last year (see his recent article on financial reform for details). Like an intelligent jester, Soros can shed light on the present economic climate just in a few concise sentences, and then offer insights about financial reforms with a sense of humor – he jokingly made an analogy between credit default swaps and buying life insurance on someone else’s life while owning a license to kill him. Most importantly, what Soros preaches is not theoretical reasoning, but wisdom based on experience.

Dear straight-A economists and bankers, perhaps it is time to stick less to theories and models, and pay more attention to what is actually going on in the economy. Also, think carefully for yourselves before and after you laugh. Because you never know who would end up being the clown.