Well it looks like this month’s unemployment figures will tick up by at least one person. I was informed this week that my position has been eliminated effective immediately. Another victim of the Obama economy. Let the funemployment begin!
Y’all better settle in, this is going to be a rather long rant. As a legal disclaimer, the opinions expressed here are my own and in no way represent the views or opinions of any other persons or entity.
All hyperbole and conjecture aside, my current unemployment is a direct result of actions by the US government. I’ve mentioned in the past that I worked in Human Resources for a Chinese company. My actual position was recruiter, and the company was Huawei. Huawei employs around 140,000 people and earned ~$32 billion in revenue last year. Huawei is now the #1 manufacturer of telecommunications equipment worldwide, recently surpassing Swedish giant Ericsson.
What does Washington have to do with Huawei and your humble Baron’s position being eliminated? Because Huawei designs and manufactures the equipment at the heart of communications networks – cellular access, core network, optical transport, switching, routers, etc. – and is based in China, the equipment is suspected of being easily accessible for espionage or network disruption by the Chinese government.
Most people in the United States have never heard of Huawei. We used to goof that it’s the biggest company no one’s ever heard of. Which is probably true if, like most Americans, you don’t watch 60 Minutes. (Yeah, yeah, sour grapes. But statistically, on their best night less than 4% of the US population watches it. I looked.) They recently did a
hatchet job cover story on Huawei. Please take a few minutes to watch the embedded video below.
Chris Johnson, former CIA analyst, opined that in China the communist party controls the economy and decides who the winners and losers are. Kroft then asks if the Chinese government asked Huawei to spy on the US could they say no. Johnson says it would be very difficult for Huawei to say no to the communist Chinese government.
Then Jim Lewis, China analyst who’s followed Huawei’s growth, notes that in China businesses are used to being told what to do by the government where here in the US businesses tell government what to do (obviously a Democrat and sounds like an Occupier to boot). He goes on to describe how Sprint was set to sign a $5 billion deal to upgrade their network to 4G with Huawei until their CEO got a call from the Secretary of Commerce demanding Sprint not use Huawei equipment in its network. He acquiesced.
It seems as if it’s equally difficult for a company in the US to say no to the government as it is in China, doesn’t it? Beyond that obvious contradiction there’s a lot more to decompress in their statements.
Does anyone believe the US government doesn’t control our economy? Maybe not extensively at the micro level, but certainly at the macro level with regulations, tax and monetary policy, and through awarding lucrative contracts to favored vendors?
Does anyone believe the US government doesn’t choose winners and losers in the economy? Did the marketplace decide wind and solar power are superior to coal or natural gas or nuclear power? Do companies favored by the US government get tax incentives and direct federal investment that improve their competitive position in the market?
Do companies in the US really tell the government what to do and not vice versa? Was it auto manufacturers who sent a missive to Washington stating they were going to increase Corporate Average Fuel Economy of their vehicles beyond what the laws of physics permit by 2020 or were those standards capriciously foisted upon them by the US government? FLSA, OSHA, FMLA, EEOC, EPA, FDA, OFCCP, FCC, etc. were all imposed by the indomitable will of US companies on the recalcitrant government who serves them?
Maybe we should ask the folks at Microsoft.
The Clinton administration brought antitrust charges against Microsoft after the Windows 95 operating system came preloaded with Microsoft’s browser, Internet Explorer. Though the case was in the hands of the Federal Trade Commission and the courts, Hatch brought Microsoft CEO Bill Gates before his Senate Judiciary Committee in 1998, and gave him a good dressing down, ostensibly for being a monopolist.
But it grated on Hatch and other senators that Gates didn’t want to want to play the Washington game. Former Microsoft employee Michael Kinsley, a liberal, wrote of Gates: “He didn’t want anything special from the government, except the freedom to build and sell software. If the government would leave him alone, he would leave the government alone.”
This was a mistake. One lobbyist fumed about Gates to author Gary Rivlin: “You look at a guy like Gates, who’s been arrogant and cheap and incredibly naive about politics. He genuinely believed that because he was creating jobs or whatever, that’d be enough.”
So yeah, on the one hand it may indeed be difficult for Huawei to say “No!” to hypothetical request by the Chinese government to spy on the US. Not demonstrably true, but theoretically possible. From a practical standpoint though, if Huawei ever did spy on any network though the use of hidden “backdoors” they would be finished as a company. No one would ever buy equipment from them again.
On the other, US companies being subject to government harassment and prosecution for refusing to “play ball” are numerous and well documented.
On the subject of “backdoors” to telecommunications infrastructure that might permit spying, did you know that federal law requires all telecom networks to include a “backdoor” so network traffic can be intercepted and monitored by government agencies? Did you know the NSA demanded and received billions of call records from Verizon, AT&T and BellSouth in the aftermath of September 11? Did you know the federal government monitors all communications under the guise of seeking terrorist activity right now?
What do you think wins out when the choice is between your information security and privacy or the US government’s “need to know”?
I know what you’re thinking. Sure, that’s all true. But the US government is well-meaning with an ultimate goal of ensuring our freedom, security, and economic success while the Chinese communist government only cares about subjugating its people and maintaining an iron grip on power.
I laughed as I wrote that because it’s funny. Funny that while the Chinese government is moving towards a market economy our own government is falling over itself to implement more centralized control over the US economy.
Don’t get me wrong, I have no love for communism. There are many, many well documented instances of abuse by the Chinese government against the Chinese people. But when the distinction between Beijing and Washington boils down to “It could never happen here” and the benevolence of our current leadership I’m not all that sure it could never happen here.
Anyway, back to Huawei and my situation. The House Permanent Select Committee on Intelligence investigated Huawei and despite zero evidence of any security flaws in any of Huawei’s equipment or any instances of security breaches caused by Huawei equipment (used by 46 of the top 50 telecom operators around the world) they strongly recommended that American companies not use Huawei equipment in their networks. And as it’s been well documented, when the US government makes a strong recommendation – particularly to the players in a heavily regulated industry like telecommunications – there is very little incentive to say “No!”.
Unable to compete in the marketplace based on the merit of its products and service, Huawei had no more need for a person to recruit new employees. So I got my walking papers. Do I seem a little bitter about the situation? I am. It’s one thing to lose fair and square. It’s another entirely to see your job go bye bye because of protectionism and fear-mongering by the US government.
So, you say, in response you’re blowing a big, treasonous, sloppy wet kiss to China and the Chinese government? No, this is not some Friedman-esque shout out to the effectiveness of China’s communist government versus our own. It’s a sloppy wet kiss to reality. Everyone in Washington D.C. must go to bed every night thanking the Lord they’ve got a boogerman called China to scapegoat when it comes to America’s economic problems.
The reason American manufacturing jobs are going overseas has a whole lot more to do with the regulations and restrictions the federal government has imposed on our economy than any actions by foreign governments. Given the choice nobody would shift their production to China. Your intellectual property may be at risk. When it’s Noon here it’s midnight there. Communication can be a challenge. Then there’s the matter of logistics and Customs and time to market. It’s more difficult to ensure quality and supply chain integrity.
Yet despite all that companies still choose to manufacture there and ship it back here. Why? Why do companies forgo the most productive workers in the world – American workers – for less efficient workforces elsewhere?
Politicians don’t want you asking that question. America’s economic decline is not inevitable nor driven by forces outside our control. We have elected to voluntarily surrender our long-term competitive advantages for a myriad of short-term comforts.
China is a market of 1,300,000,000 people who desperately wish to live like we do here in the US, with cars and HDTVs and smartphones and electric juicers and silly things we take for granted like refrigerators and indoor plumbing. Does it really strike anyone as a good idea to spark a trade war with what has the potential to be a huge market for US products?
Now consider where China is in its economic development. Pretty much where the US was in the early 1900s. Still mostly rural population, rather lax environmental regulations, pretty much unfettered from a labor protection standpoint, and without the infrastructure to support a modern economy. As they continue to grow and get richer the people will begin to demand environmental regulations and labor laws and other factors that the US economy has already built in.
But those reforms will take time. I don’t believe anyone is advocating a return to the days of Upton Sinclair’s Jungle and dumping waste chemicals in Love Canal, I’m not, but the next time you hear a politician decrying China for not playing by the rules you might ask what that politician has done to make the US more competitive with China.
Are carbon taxes and increased electricity costs going to make the US more competitive with China? Will increasing what companies have to pay for medical insurance make the US more competitive with China? Does adding $1,000,000,000,000 annually to our already $16,000,000,000,000 national debt (on top of our ~$70 trillion in unfunded SS and Medicare liabilities nobody talks about) make the US more competitive with China? Will going broke propping up windmill and solar panel companies (and telling our friendly neighbor to the north to bugger off, we don’t want their dirty shale oil) while China scrambles to secure more and more natural resources (including said dirty shale oil our friendly northern neighbor begged us to buy) around the globe make us more competitive with China?
That’s the reality Americans have chosen.
Frankly, I’m not optimistic about our future. Whining about fairness is the rallying cry of the loser. Yet that’s what our so-called leaders in Washington see as the solution to an admittedly ruthless competitor called China. China focuses on results, Washington focuses on fairness and feelings and shaking down the successful for sops to political supporters.
Why would China concern itself with sabotaging the US economy? We’ve already done a far, far better job than they ever could. National Security? Hell, in another twenty years the US won’t be able to bear the cost of slapping around Jamaica should they get out of line.
Our future as a country is pretty much set. The utterly unserious scapegraces in Washington will continue to intrude into ever smaller details of our lives while ignoring the now unavoidable collapse to which they’ve doomed us all. Me? I’m gonna take a couple of weeks to blow through a little of my savings and finish the remodeling I’ve been doing on Casa Von Ottomatic, then hopefully find another job.
Maybe at Discount Tire. People always need tires, right? Unless they’re low-cost tires made in China. Then it’s dumping and that’s not fair.