Hitting China with Tariffs only Hurts Americans

I am one of the few unpopular minorities who is not very happy when Obama became the President of the United States. I am only happy for him to be the first black President of the United States in terms of social progress prospective. When Martin Luther King said “I have a dream,” his dream is now answered. However, I was and I still am very doubtful for his competence to save America from getting stuck in the current economic recession.

Why am I so doubtful about him? It’s because Obama is not old school enough. I’m not an expert of American history, but I do know a few things about Franklin Roosevelt, Harry Truman and Ronald Reagan. These three great individuals had something in common --- they were always optimistic about American future with mental toughness. Those were the days when the Americans believed they could turn America to be the giant in the international politics by subduing the aggressive Germans during World War II, confirmed their legitimacy as a superpower by dropping the Hiroshima bombs to end the latest World War and finally emerged as the most powerful country in the world by disintegrating the Soviet Union in 1989.

But what have Americans become now? It is now a nanny state which takes care of the whining Americans when they lose money in their business. The government used taxpayers’ money to save Bank of America, Citigroup, and AIG, saying that they are “too big to fail.”

Consider the British in the 1910s. At that time, the stock market in London was stuffed with railway stocks. Like any other financial crisis, the bubble finally burst and hundreds of railway companies went bankrupt. However, tough time never lasts. London thrived again after World War II and the stock market went prosperous with the financial stocks. Although the railway stocks almost disappeared and became less significant, the stock market itself never died.

And last time I checked, I could still see trains running on railways in Britain.

Yes, there are crisis, disaster and even collapse in economic and investment cycles, but there is nothing like the end of the world in stock market as long as human race exists.

Why don’t I like when I see the American government bailed out the banks? It’s because it’s so un-American. Let the other foreign banks, such as the banks from China, Japan, South Korea and even Brazil to buy shares or even take the majority holding of the American banks. Yes, time is tough but it will eventually pass. One day, when America gets stronger, Americans could buy back the shares or even kick out the foreign ownership and be the sole owner again. That’s what the traditional Americans are supposed to be.

But what is happening now? When the banks lose money, they just ask for help like an ugly whining baby unable to admit any defeats and mistakes. Now, Obama is even imposing tariffs on the rubber tires imported from China with a whopping 35% penalty. Why don't they think of beating China by improving the quality of their rubber tires? I'm not a scientist but why don't they think of something else, like making tires out of some other cheaper but environmental friendly materials, or some self-inflating tires like I see on James Bond's movies? There is always something to be done instead of facing away the challenges from China.


However, the tariff will only hurt the Americans the most, not the Chinese. First, China has a lot of options. If Americans are not buying, they can sell the tires to France, Germany, Brazil and even India. The tariff may hurt their business but they can always get them sold. Second, most tire companies in China are owned by foreign companies like Michelin, Bridgestone and Goodyear. Obama’s stupid move is only hurting his own American companies, raising their manufacturing costs, and in turn, only the consumers will get hurt by paying up for the rubber tires. Third, we need to consider one thing --- who are buying the cheap rubber tires made in China? It is the low-income families in America who could not afford to buy the expensive rubber tires made in America!

This tariff, therefore, will only hurt the Americans themselves. While Obama is trying hard to sell his healthcare program to the Americans, he is taking away the quality of living of the low-income families in America. It seems that the poor or the Americans who want to save a few bucks have to stick with their old tires in the upcoming winter.

Obama’s famous quote is “Yes, we can.” However, what he is doing to America simply proves that “No, he can’t.”

Everybody Has a Price: Life for Sale in Wall Street

A lot of people have recently found the occupation “Investment Bankers” is equivalent to “Devil.” It sounds cynical and radical but sometimes it does have a point. After the implosion of mortgage-backed securities in 2007, the Wall Street is going to invent a new form of securitized product that packages life insurance policies. Yes, it is true. Your life is going to be technically for sale in near future.

According to an article posted on New York Times on September 5, Goldman Sach is going to buy out insurance policies from people, repackage them into bonds and sell them to different institutions. A few years ago, Goldman Sach used the values of our homes to design a bubble that ignites the explosion of the global economy. This time it is using the prices of our lives to create another bubble.

What is it all about? Let me give you an example. Most of us pay a few hundred bucks per month for a life insurance policy. Say, if we pay $100 USD per month for 10 years, our children would collect $1 million from the insurance company if we decease. However, not many people could make the $100 USD per month commitment. Let’s say there is a man who cannot pay after making 5 years of monthly $100 payments. If he wants to cancel the policy, he can only, say, get back about $25,000 from the insurance company.

And here comes the bankers – they are going to buy out the insurance policy. They are going to pay the people who are going to discontinue the policy for about $60,000 (that is the five years of $100 monthly payments, I’m just guessing that is the maximum bankers are willing to pay, any amount more than that the bankers would find it charity work), but take their life insurance policy. If the person dies, the bank is going to get $1,000,000! In other words, the bankers want the person dead to make money!

The bankers are going to package all different life insurance settlement polices into bonds with different maturities and sell them to other institutions. Goldman Sachs is going to make millions of dollars just for the service fees. And technically speaking, our lives are put on the gambling tables where the investment banks and insurance companies are placing their “long” and “short” bets on how long we will live.

And not to mention there will be more exotic derivatives products that could only be invented by extraterrestrial life forms, such as “Policy Default Swaps,” “Death Protection Warrants” and “Collateralized Life Insurance Obligations.”

Do you know what I am afraid of? First, insurance companies are going to raise our premium. Since the insurance companies are afraid we’re going to die soon and pay large sums to the banks, they have to make us pay for putting up more premiums to prevent their loss. So Goldman Sachs robs the insurance companies and the insurance companies in turn rob us. Indirectly, every one of us who has an insurance policy is paying for their gambles although we never have a chance to share their profits!

And what happens if one big insurance company makes the wrong bet and we do suddenly die of a widespread disease? By that time, the banks who want people dead got their wishes come true and the insurance companies have to make the final payouts. And who knows what kind of crisis we will get into? If the bets continue, will the insurance companies even fail to pay for the life settlement insurance? In other words, if we die, we may leave our children penniless because the insurance companies cannot pay. And eventually, who pays? The government comes to the rescues and uses the taxpayers’ money to pay again. The banks rob us and it is us again who save ourselves.

Despite my concerns, I am betting that we WILL see something like that happening in the next few years, probably as early as 2010. By that time, everybody does have a price.