Category Archives: Protests

China’s Challenges According to Jamie Dimon

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China’s Communist Party leaders believe that America is in decline. They believe this not only because their country’s sheer size will make them the largest economy on the planet by 2030 but also because they believe their long-term thinking and competent, consistent leadership have outshone America’s in so many ways, writes Jamie Dimon, CEO, JP Morgan in his 2020 annual letter to shareholders.

The Chinese see an America that is losing ground in technology, infrastructure and education – a nation torn and crippled by politics, as well as racial and income inequality – and a country unable to coordinate government policies (fiscal, monetary, industrial, regulatory) in any coherent way to accomplish national goals. Unfortunately, recently, there is a lot of truth to this, in the next 40 years, according to Dimon.

In recent years, China has been dealing with many challenges to its economic expansion, including pandemic-related curbs, an energy crunch, and an unprecedented crackdown on private enterprises. These challenges and the Communist government’s reaction led to 4% growth in China for the fourth quarter, according to JP Morgan.

Additionally, the government actions against COVID-19 have also kept domestic demand for goods and services suppressed, putting a lid on imports.

However, Dimon opines that “China will have to confront some serious socioeconomic and geopolitical issues”:

  • The Chinese lack enough food, water and energy to support their population;
  • Pollution is rampant;
  • Corruption continues to be a problem;
  • State-owned enterprises are often inefficient;
  • Corporate and government debt levels are growing rapidly;
  • Financial markets lack depth, transparency and adequate rule of law;
  • Income inequality is higher than in the rest of the world; and
  • Their working age population has been declining since 2012.
  • Capital outflows has caused the regime to tighten capital controls.
  • Lower rates make Chinese financial markets less attractive to global and domestic capital.

Additionally, China will continue to face pressure from the United States and other Western governments over human rights abuses (especially against the Uyghur population), democracy and freedom in Hong Kong, and activity in the South China Sea and Taiwan. The Uyghurs are an ethnic Muslim minority in China that have allegedly endured forced labor and other human rights violations.

Autocratic and authoritative leadership works well when you can manage top down and you are starting from a very low base. China’s recent success definitely has its leadership feeling confident.

Regardless of Chinese Communist Party’s opinions regarding its inevitable economic rise, only 100 million people of its more than 1.4 billion population in China effectively participate in the nation’s one-party political system. No other developed nation has such low participation. Growing middle classes almost always demand political power, which helps explain why autocratic leadership almost always falters in a larger, more complex economy.

Under autocratic leadership, a major risk is the allocation of economic assets (capital and people), which are, over time, used to further political interests, leading to inefficient companies and markets, favoritism and corruption.

In addition, autocratic leadership diminishes the rule of law and transparency – damaging the ability to create a well-functioning financial system (this certainly restricts the internationalizing of the RMB).

Disruption of trade is another risk China faces. The United States’ trade issues with China are substantial and real. They include:

  • Theft or forced transfer of intellectual property;
  • Lack of bilateral investment rights, transfer of ownership or control of investments;
  • Onerous non-tariff barriers;
  • Unfair subsidies or benefits for state-owned enterprises; and
  • Lack of rapid enforcement of any disagreements.

China will only comply with international trade agreements and only do what is in its own self-interest. Near term, we should expect challenge and conflict to characterize the relationship between China and the West over a range of economic, human rights and strategic issues.

There may, however, be areas where we will simply never agree. As the two largest economies in the world, China and the United States should continue to have a long-term interest in collaborating where we can on critical global issues, including climate change, global health and stability on the Korean Peninsula.

China does not have a straight road to becoming the dominant economic power. To put this in perspective, America’s GDP per person in 2019 was $65,000 and China’s was $10,000. Even if we do a rather poor job at managing our economy (growing at 2%), our GDP per person in 20 years would be $85,000. And if the Chinese do a good job managing their economy, their GDP per person in 2040 would still be under $35,000. While China is well on its way to becoming a fully developed nation, it may face more uncertainty and moments of slower growth in the future (like the rest of us) than in the past.

For the near term, if China and the United States can maintain a healthy strategic and economic relationship, it could greatly benefit both countries – as well as the rest of the world.

Another factor is the Chinese currency, the renminbi (RMB). The renminbi cannot be freely moved around the world; it can leave China only in limited amounts and can be invested only as the Chinese see fit. Thus the renminbi is a long way from replacing the U.S. dollar as the world’s reserve currency.

The Chinese currency is subject to their internal politics, laws and regulations. While the Chinese have done a good job building their economy and are slowly moving toward a more transparent society and financial system, they are a long way from having a currency that is fully “convertible” like the U.S. dollar.

References:

  1. https://reports.jpmorganchase.com/investor-relations/2020/ar-ceo-letters.htm
  2. https://www.wsj.com/articles/slow-meltdown-of-china-economy-evergrande-property-market-collapse-downturn-xi-cewc-11640032283
  3. https://www.msn.com/en-us/money/markets/could-chinas-economy-collapse/ar-AAPypxS
  4. https://warontherocks.com/2021/12/could-chinas-massive-public-debt-torpedo-the-global-economy/

Commercial real estate bust.

While the U.S. economy is likely to grow 6% in 2021 and 4% in 2022, the highest rate in decades, analysts project.

China’s economy has been faltering despite it’s exceptionally strong trade surplus and it’s authoritarian government’s heavy hand on COVID-19.

COVID-19 Vaccine Safe…Skepticism High Among Americans

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Gallup polling shows about six in ten Americans are willing while four in ten Americans remain skeptical about taking a coronavirus vaccine

Polling has shown that there is lingering skepticism among Americans in taking the vaccines. Most cite the fact that the vaccine has been produced in months rather than the years it normally takes as the reason for the skepticism.

A Gallup poll released November 17, 2020, found Americans’ willingness to be vaccinated against COVID-19 rebounded. Fifty-eight percent (58%) of Americans in the latest poll say they would get a COVID-19 vaccine, up from a low of 50% in September while 42% of Americans would not agree to get a vaccine approved by the Food and Drug Administration. A plurality of the latter said the rushed timeline was a concern. Others cited a need to confirm it is safe or effective. Twelve percent said they generally don’t trust vaccines.

Globally, 61% of the world strongly agree with the statement, “vaccines are safe”, according to Gallup.

Unfounded fears about vaccine safety

“The process of the speed did not compromise, at all, safety, nor did it compromise scientific integrity,” Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said. “It was a reflection of the extraordinary scientific advances in these types of which allowed us to do things in months that actually took years before.”

Former Presidents Barack Obama, George W. Bush and Bill Clinton have all indicated that they will publicly take the coronavirus vaccine once approved and as soon as available to them, based on the priorities determined by public health officials in an effort to promote the vaccine’s use and safety.

Public health officials face an uphill climb in convincing a good share of the American public that the vaccine is safe and to receive the vaccination.

References:

  1. https://www.11alive.com/article/news/health/coronavirus/obama-coronavirus-vaccine/507-43ebe52f-3ad5-45e1-916f-1386f6eda819?utm_campaign=snd-autopilot
  2. https://news.gallup.com/poll/325208/americans-willing-covid-vaccine.aspx

Doc Rivers

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Doc Rivers, Head Coach, NBA Los Angeles Clippers, expressing frustration and anger regarding the shooting in the back of Jacob Blake by a police officer in Kenosha, Wisconsin.

Additionally, Kenosha police officers, sworn to “serve and protect”, take no action to stop a white militia group member vigilante with a long gun who kills two protesters and wounds a third.

A Moral and Economic Imperative to End Racism

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The U.S. “has both a moral and economic imperative to end these unjust and destructive practices” of institutionalized racism. Raphael Bostic, President and CEO, Federal Reserve Bank of Atlanta

“Over the course of American history, the examples of such institutionalized racism are many, and include slavery, federal law (consider the Three-Fifths Compromise our founding fathers established to determine federal representation), sanctioned intimidation during Reconstruction, Jim Crow laws in southern states, redlining by bankers and brokers, segregation, voter suppression, and racial profiling in policing.”

Dr. Raphael W. Bostic, Federal Reserve Bank of Atlanta

“These institutions hurt not only the African Americans they’ve targeted, but the systemic racism they’ve codified also hurt, and continues to hurt, America and its economy. By limiting economic and educational opportunities for a large number of Americans, institutionalized racism constrains this country’s economic potential. The economic contributions of these Americans, in the form of work product and innovation, will be less than they otherwise could have been. Systemic racism is a yoke that drags on the American economy.”

“To be fair, we have made some progress. Legal reforms have erased many of those historical institutions that caused so much pain and violence, and further reform essential for helping end harmful practices is under way in many places. But the legacies of these institutions remain, and we continue to experience misguided bias and prejudices that stem from these stains on our history. These have manifested in the worst way possible—in the deaths of George Floyd, Breonna Taylor, Ahmaud Arbery, Dana Martin, and, sadly, so many others.”

“It is time for this cycle to stop. It is time for us to collectively embrace the promise of an inclusive America, one where everyone can participate fully. We are each being challenged to rise to this occasion through education and action. All of us, especially our white allies, must learn the history of systemic racism and the ways it continues to manifest in our lives today. Furthermore, we all must reflect on what we can do to effect change at every turn.”

“A commitment to an inclusive society also means a commitment to an inclusive economy.”

To read the entire text: https://www.frbatlanta.org/about/feature/2020/06/12/bostic-a-moral-and-economic-imperative-to-end-racism

Dr. Raphael W. Bostic is president and chief executive officer of the Federal Reserve Bank of Atlanta. He is a participant on the Federal Open Market Committee, the monetary policymaking body of the Federal Reserve System.

Punishing Reach of Racism for Black Men | New York Times

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The burden of race and racism in America. Racial disparities in income and generational wealth are among the most visible and persistent features of American society.

The defining feature of the American Dream is upward mobility – the aspiration that all children have a chance at economic success, no matter their background. However, there are substantial barriers to economic opportunity that prevent Americans, specifically Black males, from rising out of poverty and achieving better life outcomes. “Black and white boys have very different economic outcomes even if they grow up in two-parent families with comparable incomes, education, and wealth, live on the same city block, and attend the same school,” according to the Equality of Opportunity Project.

In 99% of neighborhoods in the United States, black boys earn less in adulthood than white boys who grow up in families with comparable income.

Black boys raised in America, even in the wealthiest families and living in some of the most well-to-do neighborhoods, still earn less in adulthood than white boys with similar backgrounds, according to a sweeping new study that traced the lives of millions of children.

White boys who grow up rich are likely to remain that way. Black boys raised at the top, however, are more likely to become poor than to stay wealthy in their own adult households.

According to the study, led by researchers at Stanford, Harvard and the Census Bureau, income inequality between blacks and whites is driven entirely by what is happening among these boys and the men they become. Though black girls and women face deep inequality on many measures, black and white girls from families with comparable earnings attain similar individual incomes as adults.

African-Americans made up about 35 percent of all children raised in the bottom 1 percent of the income distribution. They made up less than 1 percent of the children at the very top. White children are more likely to start life with economic advantages. But we now know that even when they start with the same advantages as black children, white boys still fare better, only reinforcing the disparities seen here.

In reality, whites and blacks are not represented equally across the income spectrum. More than two-thirds of black boys are raised by poor or lower-middle-class families, while more than half of white boys are raised by rich or upper-middle-class families.

The most promising pathways to reducing the black-white income gap are efforts such as mentoring programs for black boys, efforts to reduce racial bias among whites, interventions to reduce discrimination in criminal justice, and efforts to facilitate greater interaction across racial groups.

Essentially, society needs to create the same opportunities for black men to thrive as you see for white men. That would involve things like mentoring programs, reducing racial bias, creating more racial integration within schools and within neighborhoods, so black and white kids have similar opportunities.

Read more: https://www.nytimes.com/interactive/2018/03/19/upshot/race-class-white-and-black-men.html

Source:

  1. “Race and Economic Opportunity in the United States: An Intergenerational Perspective” by Raj Chetty, Nathaniel Hendren, Maggie R. Jones and Sonya R. Porter; the Equality of Opportunity Project.
  2. https://opportunityinsights.org/race/
  3. https://www.pbs.org/newshour/show/black-men-face-economic-disadvantages-even-if-they-start-out-in-wealthier-households-new-study-shows

CEOs Condemn Police Brutality but Oversee Segregated Corporate Boards and C-Suites

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Updated: June 7, 2020

CEOs comments condemning racism and police brutality towards Black and Brown American citizens, with few noteworthy exceptions, appear little more than marketing campaigns

In the past couple of week, many American Fortune 500 CEOs have released statements both internally to their employees and externally to the public condemning George Floyd’s murder in Minneapolis, Amy Cooper’s weaponizing the police against a black man in NYC Central Park, Ahmaud Arbery’s ‘running while black’ shooting death in Georgia, and Breonna Taylor’s assassination inside her Louisville, KY, home.

A few Fortune 500 CEOs have gone a step further and commented on the unjust plight and persistent racial and economic inequities experienced Black people in America.  One example is Amazon’s CEO Jeff Bezos. “‘Black lives matter’ doesn’t mean other lives don’t matter.” Jeff Bezos replied to an upset Amazon customer. “Black lives matter speaks to racism and the disproportionate risk that Black people face in our law enforcement and justice system.”

Randall Stephenson, AT&T Executive Chairman and CEO, has come out strongly imploring corporate CEOs to “speak up for racial justice” and to take deliberate action to combat racial economic inequality. He stated that that it is difficult to conduct business in an environment where “a large class of our people are perceiving and experiencing injustice.”

Additionally, Apple CEO Tim Cook strongly condemned the murder of George Floyd by a Minneapolis police officer. He acknowledged that racial injustice persists in America and that “…many people may want nothing more than a return to normalcy, or to a status quo that is only comfortable if we avert our gaze from injustice.” And, Amazon posted on Twitter a statement condemning the “…inequitable and brutal treatment of Black people in our country must stop.”

However, many of the hundreds of CEOs comments condemning racism, police brutality and social injustice towards Black and Brown American citizens appear little more than marketing campaigns written by their corporate marketing officers and legal counsels to position their organizations on the morally and politically correct side of these protests.

Only about 1 percent of CEOs in the S&P 500 Index are black, and last year (2019) 37 percent of corporate boards had no black members, according to Black Enterprise magazine.

The question to ask these suddenly enlightened CEOs is how have they led their respective corporations to right the many social and economic wrongs perpetrated on Black and Brown people over the past decades.

In areas where CEOs exercise immense influence and control over their respective organizations, we must ask these chief executives ‘what have you done lately’ for Black and Brown people. Are your corporate boards and senior executive leadership (C-suite) teams segregated (predominantly white male only) or are they inclusive and desegregated with people of color and women? Are your corporations engaged with and involved in improving the conditions for the citizens in the marginalized communities in which they’re headquartered? Finally, are you using your corporate lobbying influence in state and federal capitals to address racial and economic inequities?

Real societal change can occur only when people of color and women are included in the hard conversations about race, social justice and economic equality of opportunity, and they have more than a token voice at the table. Additionally, societal change is possible only when corporate executive leaders’ values and monetary incentives (salary, benefits, bonuses and stock options) are aligned with solving these long ignored wrongs.

“America must see that riots do not develop out of thin air. Certain conditions continue to exist in our society which must be condemned as vigorously as we condemn riots.” Dr. Martin Lither King, Jr.

“We cannot lose sight of the fact that racism is tearing our communities apart. One lesson we should all learn is that silent carriers help spread racism,” IBM’s CEO Arvin Krishna commented in a message to employees. “This is why it falls on all of us to do away with the legacy of bias, prejudice and racism that has led to these unspeakable events. The tragedies that have occurred should strengthen our determination to do more.”

References:

  1. AMERICA’S FEW BLACK CEOS ARE SPEAKING OUT ON KILLINGS AND PROTESTS, https://adage.com/article/news/americas-few-black-ceos-are-speaking-out-killings-and-protests/2260381
  2. https://www.theatlantic.com/politics/archive/2020/06/wesley-lowery-george-floyd-minneapolis-black-lives/612391/

Silence is not an Option

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“We have to stand together with the victims of murder, marginalization, and repression because of their skin color, and with those who seek justice through protests across our country.”  Ben & Jerry’s Ice Cream

Many Fortune 500 corporations and their CEOs have released statements condemning police brutality and racism within American society.

In my view, most of the statements or pledges to fund Black organizations are nothing more than marketing statements and platitudes created by corporate marketing and legal teams trying to position their organizations on the moral and politically correct side of this legitimate protest. Words don’t change much, actions do!

One glaring exception is the ice cream company Ben & Jerry’s press release. Their statement stands as one of the few exceptions to the norm:

Silence Is NOT An Option (by Ben & Jerry’s)

“All of us at Ben & Jerry’s are outraged about the murder of another Black person by Minneapolis police officers last week and the continued violent response by police against protestors. We have to speak out. We have to stand together with the victims of murder, marginalization, and repression because of their skin color, and with those who seek justice through protests across our country. We have to say his name: George Floyd.

George Floyd was a son, a brother, a father, and a friend. The police officer who put his knee on George Floyd’s neck and the police officers who stood by and watched didn’t just murder George Floyd, they stole him. They stole him from his family and his friends, his church and his community, and from his own future.

The murder of George Floyd was the result of inhumane police brutality that is perpetuated by a culture of white supremacy. What happened to George Floyd was not the result of a bad apple; it was the predictable consequence of a racist and prejudiced system and culture that has treated Black bodies as the enemy from the beginning. What happened to George Floyd in Minneapolis is the fruit borne of toxic seeds planted on the shores of our country in Jamestown in 1619, when the first enslaved men and women arrived on this continent. Floyd is the latest in a long list of names that stretches back to that time and that shore. Some of those names we know — Ahmaud Arbery, Breonna Taylor, Oscar Grant, Eric Garner, Trayvon Martin, Michael Brown, Emmett Till, Martin Luther King, Jr. — most we don’t.

The officers who murdered George Floyd, who stole him from those who loved him, must be brought to justice. At the same time, we must embark on the more complicated work of delivering justice for all the victims of state sponsored violence and racism.

Four years ago, we publicly stated our support for the Black Lives Matter movement. Today, we want to be even more clear about the urgent need to take concrete steps to dismantle white supremacy in all its forms. To do that, we are calling for four things:

First, we call upon President Trump, elected officials, and political parties to commit our nation to a formal process of healing and reconciliation. Instead of calling for the use of aggressive tactics on protestors, the President must take the first step by disavowing white supremacists and nationalist groups that overtly support him, and by not using his Twitter feed to promote and normalize their ideas and agendas. The world is watching America’s response.

Second, we call upon the Congress to pass H.R. 40, legislation that would create a commission to study the effects of slavery and discrimination from 1619 to the present and recommend appropriate remedies. We cannot move forward together as a nation until we begin to grapple with the sins of our past. Slavery, Jim Crow, and segregation were systems of legalized and monetized white supremacy for which generations of Black and Brown people paid an immeasurable price. That cost must be acknowledged and the privilege that accrued to some at the expense of others must be reckoned with and redressed.

Third, we support Floyd’s family’s call to create a national task force that would draft bipartisan legislation aimed at ending racial violence and increasing police accountability. We can’t continue to fund a criminal justice system that perpetuates mass incarceration while at the same time threatens the lives of a whole segment of the population.

And finally, we call on the Department of Justice to reinvigorate its Civil Rights Division as a staunch defender of the rights of Black and Brown people. The DOJ must also reinstate policies rolled back under the Trump Administration, such as consent decrees to curb police abuses.

Unless and until white America is willing to collectively acknowledge its privilege, take responsibility for its past and the impact it has on the present, and commit to creating a future steeped in justice, the list of names that George Floyd has been added to will never end. We have to use this moment to accelerate our nation’s long journey towards justice and a more perfect union.”

“Bravo Zulu” / well done to Ben & Jerry’s Ice Cream.

Source: https://www.benjerry.com/about-us/media-center/dismantle-white-supremacy

George Floyd Murder and the Dominoes of Racial Injustice | The Daily Show with Trevor Noah

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“That’s the thing people don’t understand sometimes. We need people at the top to be the most accountable, because they are the ones who are basically setting the tone and tenor for everything we do in our society. It’s the same way we tell parents to set an example for their kids, the same way we tell captains or coaches to set an example for their players, the same way we tell teachers to set an example for their students. The reason we do that is because we understand in society that if you lead by example, there is a good chance that people will follow that example you have set. If the example law enforcement is setting that they don’t adhere to the laws, then why should the citizens of that society adhere to the laws when in fact the law enforcers themselves don’t?” Trevor Noah

https://youtu.be/v4amCfVbA_c

On a recent episode of “The Daily Show,” Trevor Noah delivered a passionate commentary of George Floyd’s murder at the knee of Minneapolis Police Officer Derek Chauvin, the activism across the nation and world his death has spurred, and the mixed reactions of Americans to those protests, unrest and looting — particularly calling out those denouncing looting.

Read more:

https://www.vanityfair.com/hollywood/2020/06/trevor-noah-george-floyd-protests