The downfall of privilege and the Epstein effect

 The soap opera of the British Royal family is endlessly entertaining. The Brits love it. Tabloid newspaper front pages are seldom free of their images and TV chat shows discuss for hours the machinations of the royal household.

Likewise in the United States where President Trump tries to rule like a king. His administration fuels a daily outpouring of news which would not be made up by Hollywood screenwriters, because it is too implausible. The world laughs at Trump's goofy antics, just as the Brits are entertained by the shenanigans of the daft and dysfunctional royals.  

It is a stark reality that the shady and secretive world of a pervert the world had barely heard of five years ago, before he died in an American prison cell, is setting Jeffery Epstein up as one of the world’s most influential people of this decade. His actions and anyone associated with them are no laughing matter. The soap opera and knock-about entertainment you can pass off as  light-hearted has become much more serious.  

From beyond the grave, Epstein has already sent a wrecking ball through the British Royal Family and it is more than possible his ghost will do the same to the US Presidency. It remains to be seen whether the pedophile phantom will upend the Trump administration. It is a story you need to watch closely as it has global ramifications and could well affect your life here in Taiwan viv-a-vis China.

What links all this together is privilege and entitlement. The idea you are so privileged in terms of your position in society as to be untouchable under the law. Or that you are so rich, or have so many rich friends you can effectively ignore the law and behave in a way that ordinary mortals would suffer a fast arrest and imprisonment for.

The ability of the privileged to close ranks whether via the power of influence or money has rightly been bleeding away in the past decades largely as a result of the changing face of the media and the advent of social media. This has been evident in the west as the press barons of old are no longer free to control the narrative unless they pour money into doing so via other ventures.

It’s different in Taiwan where mainland money and ownership heavily influences the media here and the pro-China bias is glaringly obvious. Even then, dissenting voices soon step in to powerfully voice an opposing view on social media which is easily and freely available to ordinary people. Full disclosure, I’m married to one.

Let’s look at how this changing media dynamic has impacted the British Royal Family. The story is no longer frivolous nonsense about Princess Diana’s silly son Harry and his knockabout comedy routine with B-list actress Meghan Markle. Nor about King Charles decades long affair with now Queen Camilla while he was still married to Diana. That is all fairly vapid and light compared with what has just gone down with the third child and second son of Queen Elizabeth II, Andrew. 

His antics that were for so long kept quiet and covered up by those pandering to the privilege of power have been blown away. No longer can a few press barons aid the so-called ‘ruling classes’ in covering up bad behaviour as they have done so many times in the past. 

While the monarchy has been much reduced in terms of power, the vestiges of the establishment powerbase remain to this day. There are still many in the ranks of the nobility, otherwise known as the British peerage. In order of importance there are five hereditary titles: duke, marquess, earl, viscount, and baron. Titles are passed down through a family line, typically to the eldest son.

Historically, these people were powerful land owners and were in place to carry out the wishes of the monarch. The gang members and enforcers, if you like. Even the late Queen Elizabeth referred to her family as ‘The Firm’ which is a reference to the slang term for a gang of criminals or a group of hooligans. I’m sure she meant this to be seen as a joke, sadly it’s closer to the truth and is something that stains her legacy given her behaviour when alive.   

While the peerage system is pretty much symbolic today these people continue to wield influence on many levels, although their right to directly influence law making via their seats in the House of Lords was only taken away from them in 1999. They can still be disruptive however. 

So we come to the downfall of the now commoner Andrew Mountbatten-Windsor. A more spectacular fall from grace is hard to imagine and the titles lavished on this particular buffoon have now been taken away, exemplifies just how crazy this archaic system is. 

He is no longer a Prince and has been stripped of all his other titles, namely the Duke of York, the Earl of Inverness, and Baron Killyleagh. He has also lost the honors of the Order of the Garter and the Knight Grand Cross of the Victorian Order. He can no longer call himself His Royal Highness and has been stripped of his military titles.

All this because of his relationship with Epstein who helped him pander to his sexual proclivities and arrogance in treating people he considered as playthings in any way he wished. 

I met him once when he was Trade Envoy to the United Kingdom. I was South Asia Editor for Reuters at the time based in Mumbai and was invited to a reception to meet Andrew and his trade delegation when he came to the city.  I can best describe him as a preening, self-important dullard and so very like a number of his older family members. It was easy to see where he got his massive arrogance from.

I was personally embarrassed in the way he talked to the waiters and Indian officials. The many stories since about his awful behaviour towards his staff and others bear me out on this. He is a vile individual and in my opinion deserves everything that is happening to him. 

It is at least, justice at last. Particularly for Virginia Giuffre who was used by him and died by suicide aged 41 earlier this year at her home in Western Australia after what her relatives described as “being a lifelong victim of sexual abuse and sex trafficking.”

I have not lived in the UK for more than 25 years so it’s hard to judge, but it seems to me there is still a love-hate relationship for the Royal Family among Brits. There are many who love the royal family, while others despise the privilege they enjoy. In many ways it defies the left and right of UK’s politics and is counter-intuitive in as much as many working-class poorer families are fiercely pro-monarchy, while at the same time the richer elements of the UK establishment are also pro-royals.  

Go to many golf-clubs in rich areas and stockbroker belts around London and you will see a picture of the late Queen Elizabeth or now King Charles hanging in the clubhouse. At the same time, walk into many working men's clubs in the industrial north of the country and you will see the same. As a Brit, I’ve never understood quite how the Royal Family remains so popular across Britain's demographic, much less try to explain it.       

This despite the fact that details are now coming to light about the disgusting behavior of the past which the royal establishment managed to cover up at the time. Like The Kincora Boys' Home in Northern Ireland that was the scene of serious organised child sexual abuse. It caused a scandal and led to an attempted cover-up in 1980, with allegations of state collusion. 

Lord Mountbatten, the British statesman, Royal Navy officer and close relative of the British royal family is implicated in the abuse at that children’s refuge in the 1970 and there are ongoing investigations about a high level cover up by establishment about the abuse. 

There are other examples of how badly the royal family can behave such as Edward VIII, the former British monarch who abdicated his throne in 1936. Otherwise known as "The Traitor King" due to suspicions of his sympathy with Nazi Germany and potential treasonous actions during World War II. Britain has been ruled over by more than its fair share of kings, queens  and nobles who were everything from benign and good, to psychotic and tyrannical to useless and idiotic, and even traitorous.

The Epstein ghost has likely finished haunting the British Royal Family for now with Andrew thoroughly disgraced. It remains to be seen whether his spectre will find renewed energy to wreak havoc on the Trump administration, and others, a story which is currently unfolding in such dramatic fashion on the other side of the Atlantic.

The latest cringe news is former US Treasury Secretary Larry Summers has resigned from the board of OpenAI and paused all public engagements and teaching at Harvard because of his close relationship with Epstein.  He said he was “deeply ashamed” about his relationship with the convicted sex offender which makes you wonder why he has not said all this out-loud before the files proving his involvement were just released. 

If he was that ‘ashamed’ why did he not come forward earlier? Because he thought the files would not be released and the Trump administration’s suppression of them would succeed?

Trump’s giving in to the huge pressure to release the files is opening a can of ugly worms which will continue to play out in the coming days and certainly continue to be world’s top news story.

I covered Summers when I was on the global economy beat for Reuters and he was President Bill Clinton’s Treasury Secretary and I met him on a few occasions, although never interviewed him. My US colleagues did that and as a humble Brit, I never got the chance. He seemed a pleasant guy and quite ordinary, not power crazed or ranting like Trump and many of his current acolytes.

I’m filing this story on Friday so a lot can happen between me writing this and its publication so there could be huge developments in the meantime. Regardless of that, I think it is important to bear in mind that the common man, for want of a better phrase, is now more able to hold those in power to account. It beholds us all to care and watch for malpractice among those who put themselves up to rule over us. We need to be there to avoid those who chose to go-rouge.

The former Taipei Mayor is a case in point and while he is innocent until proven guilty, it remains to be seen whether privilege, or perceived privilege, played a part in the actions he is accused of. 

There is a select group of individuals who have influenced the world, most of which were from a time when the global population was counted in millions and not billions. On the religious side Buddha, Confucius, Jesus Christ and the Prophet Muhammad spring to mind. 

Various inventors like the Wright Brothers with flight, Thomas Edison with light bulbs and Ernest Rutherford's work on the nuclear front paving the way for nuclear energy also present themselves. Remembering, of course, Rutherford also gave us the knowledge of how to blow ourselves all to kingdom come. 

Genghis Khan, Mahatma Gandhi, Martin Luther King Jr. and Alexander the Great all shaped the world we live in today, as did Adolf Hitler. 

Epstein will never make this list but his name will certainly live on in the history books as the man who, even after death, had a huge impact on the order of things in countries of importance globally. (OK the UK not so much any more but the impact on the US has yet to fully unfold)  

Tinkerty Tonk

Bubbles - AI set to take a bath

Are we living in an Artificial Intelligence (AI) bubble which is about to burst? It is a question many are asking so it seems like a good time to take a step back from all the hype and reflect on lessons from the past, and the part human nature plays in all this. 

The first bubble I covered as a journalist was the 1987 stock market crash when the Dow Jones Industrial Average collapsed 22 pct in a single October day, which is still the largest ever single-day percentage drop.

There have been many bubbles including the Tulip Bubble in the 1630s, the Railway Bubble of the 1840s, the debt-fuelled Asian Crisis bubble of 1997, the Dot-com Bubble around 2000, the Cryptocurrency Bubble of 2017 and the Non-fungible Tokens (NFTs) bubble which burst in 2022. 

This is by no means an exhaustive list, but bubbles basically form as a result of two simple factors. Fear and Greed. Fear of losing out and greed in what is perceived to be an easy route to riches. Human nature takes over as rationally flies out of the window.  

There have been other market collapses such as the 2008 crisis which don’t strictly meet the criteria of a bursting bubble. Although even then you could argue that it was a bubble in terms of everyone wanting to invest in property which was, so they thought, an asset that would always go up in value. 

I was in Singapore when the Dot-com Bubble burst. I was heavily invested in tech-funds and riding the huge rally. My main fund was up 137 percent in just over a year but I took my profits at the end of 1999, much to the chagrin of my broker who said I was mad not to stay in the market. The market collapsed soon after with many analysts urging people to buy the dip. This was appalling advice as the tech-heavy NASDAQ continued to decline for the next two years. It only got back to pre-crash levels in 2014 - more than 10 years later.    

I got out because obviously unreasonable hype was circulating about what the internet could do. Claims that ignored not just reality, but human nature. There was a widespread belief that internet growth would be limitless, and that companies involved would expand exponentially.

What tipped the balance of my decision to exit came when I attended an in-house seminar and the presenter told me that I would soon be buying a refrigerator with a screen on the door connected to the internet which would automatically order butter or milk via the internet when I was running low. Apparently this smart fridge was coming to stores within a couple of years and this would help make my life perfect.   

I stuck my hand up and asked why that morning I had been sitting in a high-tech newsroom surrounded by the latest technology, my internet feed had been down for hours. This kind of ridiculous hype made no sense and I decided to take profits. Twenty-five years on, my current fridge can still only cool things down, freeze stuff and make ice.   

The internet did transform the way we live and many aspects of life, but when claims get exaggerated it is time to prepare for the bubble to burst. It is easy to see how those with a vested interest will claim almost anything to keep the investment money rolling in. This is why you can’t open a news feed without seeing Sam Alman, Mark Zuckerburg and their ilk pontificating on how AI is the absolute future for everything. (Ok Mark, we will quietly forget about the Metaverse disaster which was ‘the next big thing’.)

So we have an almost perfect bubble scenario with a new innovation which will make a material difference to the way we live, which has already created a huge flow of investment money on the back of fear of losing out and greed seeking easy large returns. All this is compounded by huge hype and unrealistic claims by those with a vested interest of what Artificial Intelligence can achieve in reality. 

Smart Money/Dumb Money

This where another financial market truth kicks in - Smart Money vs Dumb Money. Banks and large investors typify smart money, retail investors typify dumb money. Smart money has access to experts, analysts and market instruments that retail investors do not. They are pretty much fully invested by the time large fund managers get hold of the research and then their money helps keep the market rising.

Never lose sight of the fact that financial markets will only rise if money is flowing in, the rally stops when the liquidity flow stops. Rallies in any market run on liquidy, very often in all the hype, investors lose sight of that very simple fact. 

The end of a rally, such as that we are seeing now with AI, comes when the retail investors are sucked in with stories of untold riches mainly in the media and speeches by those with a vested interest in attracting more money to keep the rally going. 

Many years ago I was told by a trader “If you land in Hong Kong and your taxi driver tells you to buy a certain stock. When you get into the office, the first thing you should do is short-it.”

Which raises the issue that professional investors are able to play both sides of a market while, generally speaking, retail investors tend to only buy and hold as they don’t have access to short-selling instruments. It means retail investors are playing in the market with one hand tied behind their backs. It is an unfair fight and why money tends to flow away from retail investors into the hands of professional investors.  

Professional inventors are also able to track liquidity flows in the market and can see the end of any rally coming as the last vestiges of retail interest dries up. This when they aggressively take profits and short-sell, which explains why rallies are slowly paced and declines savage and steep.

The other issue which accelerates a market decline is margin calls, where investors who have borrowed money to buy stock turn into distressed sellers who are forced to sell stock to cover margin payments on the loans they took out. They have no option and have to sell. 

So such corrections can be extremely rapid and severe. Investors need to keep a close eye on their portfolios and not forget the Hong Kong taxi driver - if you are reading in a newspaper that xxx company is a good stock/bond to buy, you are already too late. Or, if you are invested, and the newspaper says buy, you should likely take profits.  

UBS, widely considered to be the largest and most sophisticated global investment banks, estimates that companies will spend $375 billion globally this year on A.I. infrastructure, and that is projected to rise to $500 billion next year. You have to question whether that level of investment is sustainable and also ask - where is that money going to come from? 

By their nature bubbles burst quickly. One day everything is fine, the next day it is not. The warning signs come slowly and are usually clearly observable, but fear of losing out and greed for profits clouds any rational viewpoint and the wagon keeps rolling. Until it doesn’t. 

The 1997 Asia Crisis was a classic in this regard. I was in Reuters Singapore newsroom on July 2 1997 when I received a call from the Bangkok bureau who read me a fax from the Thai Central Bank saying they had decided to devalue the baht. This came after months of speculative pressure on the fixed currency and precipitated the entire Asian Currency/debt/economic/financial crisis. On July 1 things were under pressure, but fine, by the next day all hell broke loose. These things happen quickly when the turning point comes.    

I believe the AI bubble will burst and when it does, it will be a fast and extremely rapid correction for the reasons outlined above. Retail investors beware and please keep a close eye on things. Wild claims about AI are not unlike Elon Musk’s claims of colonising Mars, at best, a long way off.  

It took years for the internet to really settle down and turn into something that was universally useful and helped companies become more productive. It was also years before the dark side of the internet revealed itself in terms of hacking, the potential harm social media can do, cyber bullying, spreading lies and conspiracy theories. 

Inflated expectations

It is possible to see a picture of this. It is called the Gartner Hype Cycle and while it has its critics, it demonstrates nicely what happened during the Dot-com bubble in the run up to it bursting in the early 2000s.

It has five stages -

New Technology - Research and development kicks things off and initial proof-of-concept stories find their way into the media and the hype starts to build. After all, everyone loves technology, right? Commercial viability is yet to be proved but everyone starts to believe - this is going to be huge.

Inflated expectations - The publicity becomes such that wild claims start to be believed, fear and greed kick in, venture capital pours in and it becomes difficult to persuade investors to put their money into anything else. The bubble forms at this point.

Disillusionment - Not all those who invested make money as the inflated expectations are not met and the technology is not as super-fantastic as it was hyped up to be. This is the “oh yes, it’s useful and will help, but we need time to implement it and we need to find more money” stage. Some early adopters fail.

Enlightenment - There is more evidence of its usefulness and productivity gains start to become real. The technology settles down, is more widely understood and next generation products come on line. Companies remain cautious.

True level of productivity - The technology becomes mainstream as early issues are resolved and viability become commercially proven and companies improve margins because of it. The slope from here depends on whether there are other or new adaptations for the technology or whether it is too niche.

 It is easy to see how you can apply this picture to the current position of AI in the global collective psyche. It tends to be confined to technology developments and certainly works for the way the internet Dot-com era panned out. 

Likewise, if you think about electric vehicles (EVs), it is turning out to be a similar picture. Early huge excitement and massive investment with governments falling over themselves to hand out huge subsidies and tax breaks and even passing laws banning the sale of petrol fuelled vehicles by a certain date. The peak of expectations was very clear. 

Then all the issues about range anxiety kicked in and the lack of infrastructure (charging points) coupled with the apparently unseen massive expense of changing batteries and the collapsing second hand value of EVs led to many early adopters being disappointed and disillusioned.

So having gone through the cycle, it would seem EVs are gradually approaching the Plateau of Productivity and things are settling down. There are still some big issues to be sorted out, but the world is getting there in terms of wider adoption of electric vehicles and governments are rowing back on dates for banning the sale of petrol vehicles. 

Elon Musk is a perfect example of a vested interest ramping up hype to ridiculous levels. “It’s financially insane to buy anything other than a Tesla,” he told a Palo Alto audience in 2019. 

“It would be like owning a horse in three years. I mean, fine if you want to own a horse. But you should go into it with that expectation.”

Like most of Musk’s shameless boasts and predictions, it has not aged well. But it perfectly demonstrates how those with vested interests are willing to say almost anything if it is to their benefit. 

For AI, it would appear clear that CEOs are believing the hype and the predictions of vast swathes of professions will disappear as a robot brian takes over their workforce's jobs. Free workers, what CEO could resist? (At this point I would be happy to argue with anyone who thinks just because someone reaches the heights of becoming a CEO, it automatically makes them a business guru. Look up the story of car hire company Hertz and the absolute shambles they made of piling into electric cars at the height of the Inflated Expectation curve.)

OpenAI CEO Sam Altman is telling us that 40 percent of jobs will be replaced by AI and predicted super intelligent AI in five years. Microsoft founder Bill Gates has confidently predicted that in ten years you won’t be able to see a doctor when you get sick as AI will have replaced him or her. He has also talked about teachers being unnecessary in this new world and AI will be doing that too. He even said humans will not be needed “for most things” in ten years time.

I'm cynical and don’t expect any of this to be a reality until I’m long dead. Sure it’s possible but is this going to happen as quickly as many predict? I doubt it very much. Like Musk’s almost constant ‘by the end of the year/next year this is possible’ predictions about several things - a lot of this is wishful thinking or just so much hot air.

Futurists

I remember well in the 1970s, so-called futurists were making a good living in predicting what the world would be like for us youngsters now at college. They were happy to go on TV and pontificate about robots doing all the manual labour and computers all the office jobs. When I was at college these people were telling me my biggest problem in life would be all the spare time I would have on my hands, as the huge productivity gains from free labour via robots and computers would mean I’d be paid for doing nothing. 

I remember thinking at the time…this is so cool, why the hell am I bothering with collage and exams? But my life has not been neverending leisure but slogs of 12 hour days and unpaid overtime for decade after decade.  

What they failed to predict was that while computers and robots have indeed made us all hugely productive with 100 car assembly workers replaced by a dozen robots with a single engineer keeping an eye on them. Salaries have stagnated in many countries while many companies have become hugely profitable on the back of increased productivity and created a world where billionaires now control governments.

Young people are already struggling to find work and salaries have stagnated to a level where buying a place to live is way out of reach for those exiting the education system. Many governments are so debt-ridden they can’t afford to help those who are not working. If Gates is right and humans will not be needed “for most things” he would appear to be predicting something close to the collapse of societies around the world.   

Yes, AI will be transformative and will affect the workplace but amid all the hype of the current bubble, the time for some more rational thinking must be close and the more crazy predictions will unwind. 

That will very likely lead to a shockwave through the financial markets. The trouble with that is it will drag the entire market down and impact everyone whether they are invested in AI or not.

Tinkerty Tonk

Political Metaphor - and being wise after the event

I was thinking about writing a piece about Taiwan’s (big) recall and the political, social and constitutional machinations surrounding it. 

 Then I was obviously struck by the boiling frog metaphor given the way the KMT is using its tiny majority with the TMD to take tiptoe steps, which no-one cares much or notices, to achieve closer ties with mainland China. Actions which prompted the recall campaign in the first place.  

It’s certainly an apt metaphor given the apathy, disinterest and laissez-faire attitude of many Taiwanese voters, plus an apparent lack of critical thinking about how their actions now within the current democracy will affect their future or generations to come.

 The stupid frog is happy in cold water but it is too dumb to realise the water is getting hotter…until it dies.     

 However, on passing the idea by my Taiwanese wife, she quickly dismissed the frog metaphor as it has become cliched because the local media use it all the time. Understandably so, as it seems many Taiwanese are sleepwalking into closer ties with China. The last general election kind of proved that.  

 The boiling frog lesson is clear. Beware slow and small changes that will not noticeably alter your normal course of life and do not make a noticeable difference at the time.  Once you realise the cumulative effect is huge, like the frog who finally realises the water is boiling… It is too late.

 The Camel’s Nose

 The camel's nose is a metaphor from the Middle East for the same situation, where allowing small, apparently innocent acts will open the door for larger, undesirable actions. It too can be applied in Taiwan’s case. 

An ancient saying in the Arab world, by the late 1800s it was being told as ‘An Arab miller allows a camel to stick its nose into his bedroom, then other parts of its body, until the camel is entirely inside and refuses to leave.’ 

In the early part of the last century, Horace Scudder, an American scholar and editor ends his missive The Arab and His Camel ends with: "It is a wise rule to resist the beginnings of evil." 

It is hard to think of a more apt metaphor than China worming its way into Taiwan as the KMT takes small steps that no one notices while the camel (China) sticks its head further into the tent and eventually gets right in. Then refuses to leave.

If You Give a Mouse a Cookie

I particularly like this one. It is from a 1985 American children's book by Laura Joffe Numeroff to illustrate that if you let someone take an inch, they will take a mile. (yet another example of how widespread this idiom is). 

 The story begins with a boy who feels sorry for a little mouse and gives him a cookie. The mouse devours the cookie gratefully but then asks for a glass of milk to wash it down. 

 The boy provides the milk but the mouse then asks for a straw to drink the milk and a napkin and a mirror to check he has no milk on his snout. Then he asks for scissors to cut his hair as he already has a mirror and also a broom to sweep up his hair trimmings. 

 The mouse is tired after all this activity and wants a nap, but only if he has a story read to him. After his nap he draws a picture and hangs it on the refrigerator but looking at the refrigerator he gets thirsty and asks for a glass of milk. “Oh, but I need a cookie to go with my glass of milk,” says the mouse.  

 The circular demands of the greedy and devious mouse have much in common with modern politics and, indeed, to demands by voters when benefits or handouts are on the line. 

 Evidence of this is the KMT’s promise of TWD 10,000 to everyone in Taiwan. That’s the Cookie. They know it will sow discontent if A) they are prevented from handing out the money B) if alternative goodies are not on offer and C) they will look good whether the 10k happens, or not. 

 If there is no handout, the DPP looks bad for opposing it. If it happens, the KMT will look wonderful for making it happen. 

 It’s a horribly cynical political move which takes no account of the actual state of the fiscal account in Taiwan. But blatant and cynical moves which bear no relation to Taiwan’s economic or geopolitical situation are the KMT’s usual mode of operation. Evidence opposing defence contracts… and some other things… ****** 

 Thin End of the Wedge

 From my own neck of the woods, the United Kingdom, this situation is usually summed up by saying a situation is ‘The thin end of the wedge’. 

This comes from the carpentry and logging industry where wedges of iron or steel were used to split wood. The small effort of hammering a wedge can eventually split a massive log.

 It is yet another metaphor illustrating the danger of small things leading to huge consequences.

 There are so many versions of this from around the world which would seem to illustrate that the danger of allowing small steps to quietly lead to much bigger things is a well recognised danger. All of them would seem to apply to Taiwan and the mainland, not just the boiling frog.

 The list is exhaustive but here is a small selection. "Give the peasant freedom, and he will hop on your bed"- Greece. "If you give them a finger, they will take your arm" - India, Italy, Germany and pretty much the rest of Europe. “A rolling snowball will be harder to stop” - Norway. "Give them a dog, they want an elephant” - Vietnam. "Give them an inch; they'll take a mile." - UK, China, Turkey. "If you let the pig under the bed today, tomorrow it will demand to be on the bed" - Bulgaria. 

 The Slippery Slope

 The slippery slope argument is a negative one where there is an attempt to stop  someone from taking a course of action because it will lead to an undesirable  conclusion.

 Away from these folklore sayings handed down over generations warning that small changes can easily lead to cumulative disaster, others refer to this phenomenon as Creeping Normality.

 In 2005,  American scientist Jared Diamond explained it in his book Collapse: How Societies Choose to Fail or Succeed. Diamond sought to explain why the natives of Easter Island in the southeastern Pacific Ocean, in the course of long-term environmental degradation, irrationally, chopped down all their trees.

 “I suspect, though, that the disaster happened not with a bang but with a whimper. After all, there are those hundreds of abandoned statues to consider. The forest the islanders depended on for rollers and rope didn't simply disappear one day—it vanished slowly, over decades,” Diamond wrote. 

It would seem wise to take note of this ancient and global wisdom of not ignoring the small things because they quite often turn into big things without anyone really noticing until it is too late.

Tinkerty Tonk

Taiwan’s recall vote for closer ties with China is clear to all the world

The results of the Big Recall last weekend sends a strong message to the rest of the world that the island’s people are happy to see closer ties between Taiwan and China. 

 The landslide victory for pro-China members of parliament, meaning they still have a slim coalition majority in the legislature, basically tells the foreign media, politicians and diplomats that the people of Taiwan want to be closer to the mainland.  

Also, they would likely be more than happy with a Hong Kong style of living under Beijing rule. Remembering of course the Hong Kong handover was brokered by the British which, ironically, is seen as the beacon of democracy. 

Look at Hong Kong now. 

The headlines are telling. Many major overseas news outlets lead by linking the pro-China stance of these MPs to the outcome of the recall.

BBC - 'Pro-China' politicians survive Taiwan vote to kick them out. 

Associated Press -  Taiwan votes to decide whether to oust lawmakers from China-friendly party in closely watched poll. 

New York Times -Taiwan President’s Gambit: Time for a Tougher Stance on China. 

Washington Post - Voters in Taiwan reject bid to oust China-friendly lawmakers in closely watched poll. 

ABC Australia - 'Hostile China will be very pleased': Taiwan politics in crisis. 

CNN - Taiwan is paralyzed by political gridlock. A mass recall of ‘pro-China’ lawmakers could break that.

I’m sure there are many at home who will tap their nose wisely and say “Ah, but they are foreign media, they don’t understand.” If I had USD100 for every time someone has told me that from the UK, to Japan, to China to India, I could go on, I’d be a rich man. It is naive, parochial and simply lacks a broader outlook. 

Perception is a powerful thing and to underestimate it is extremely dangerous. Politicians often act on media perception, diplomats less so, but diplomats have to convince politicians. It can be, if I can put it this way - an unvirtuous circle.    

It is equally dangerous to believe that somehow Taiwan is different because of its recent turbulent history with China and Japan, or that it is in some way special. Taiwan is a small island of just 23 million people and the only thing it has going for it on the world stage is semi-conductors.

It is not a giant oil producer which the likes of the US rely on for economic survival, evidence of past Middle East conflicts, and is worth going to war over. Taiwan is not in the same league.  

TSMC will save us? 

While hugely important to the world, Taiwan’s TSMC will not in itself save the country from China and as time goes on and C. C. Wei cuddles up to the United States with promises of billions of dollars worth of investment, the island’s grip on this premium will diminish.  

Wei has promised to increase investment in advanced semiconductor manufacturing in the U.S. by $100 billion with three new fabrication plants, two advanced packaging facilities and an R&D center.

It’s too easy to explain away KMT support with fear, and a chain of thought that if you don’t upset China they will forget they want to take physical and political control of Taiwan. Which takes us back to the word - naive.

For an island constantly over-flown with fully armed Chinese fighter jets, its surrounding seas patrolled by the PLA Navy and a constant stream of bellicose comments by countless generals of imminent invasion, it would seem desperately naive to think they do not mean business. 

Earlier this year China’s defense ministry spokesperson told Taiwan “We will come and get you, sooner or later”. Oh yes, that means they are happy to keep the status quo?

Bear in mind that no western power regularly makes any comment about these daily direct threats to Taiwan’s sovereignty. Direct criticism of China’s bullying is brutally absent on the world stage in any way that keeps pace with the regularity of the fighter jet incursions. No one really cares.  

Is it fear of a military invasion which worries people into voting for the KMT in a belief that sops engineered by the KMT to help Chinese wives, or give concessions to healthcare for Chinese families? If that is the thinking, we come back to the word, naive.

My fear for Taiwan is that it is a democracy. Overseas democracies could well be thinking…’Well, if they are voting for the KMT they clearly want closer ties with China, why should we bother even thinking about defending them in the future?” Particularly if their semiconductor trump card becomes weaker.

All Taiwan’s potential friends and allies in the world have gigantic domestic budget problems which they can’t cope with now. If their politicians start to think Taiwan’s solid democracy is actually voting to be closer to China, then that is what their people want. It’s a fine excuse not to budget for a fight with China. 

On top of which all China’s potential friends have huge financial interest in remaining friends with China. Trump is in the White House for the time being and his Make America Great Again would take precedence over helping tiny Taiwan defend itself from the mainland. That much must be clear to any Taiwan voter. Germany, France and Britain are the same. 

The polls and the status quo   

A University I used to teach at, National Chengchi University (NCCU), produces an excellent poll called The Changes in Unification - Independence Stances of Taiwanese. A better title would be Independence vs Beijing rule but it illustrates well the change in attitude of Taiwan voters. 

When you look at the 1994 to current trends, the most noticeable was in 2018 when the DDP bombed in the local council elections. This was seen at the time as a vote of no confidence in President Tsai Ing-wen administration, both because of relations with China as well as economics and social issues like pollution, labor laws and wages. The change in the poll is quite striking if you look at the chart.

The feeling that Taiwan should ‘maintain the status quo but move towards independence’ and ‘maintain the status quo indefinitely’ both jumped. While the hitherto highest polling category ‘maintain the status quo and decide at a later date’ collapsed. The other polling questions are not statistically relevant.

The point is the chart now shows overwhelmingly that voters say their wish is for the status quo to be continued indefinitely. This would appear to be a fine expectation, peace in our time. (European history buffs would know what I am referring to here, search Neville Chamberlain).

Which brings me back to the word naive. Expecting the mainland to just stop it and allow things to carry on as they are is ridiculous, they have already invested too much in their power plays and belligerence. They are unhappy with the status quo, the fact that voters are happy with it, is irrelevant.

Unless the Democratic People’s Party (DDP) stops their soft acceptance of lies, gaslighting and deception it will likely continue to carry public opinion.

One has to wonder how many of the pro-KMT votes were based on the money promised to voters in the form of a free government handout. To those voters who went to the polls with that in mind, please think more carefully about what your future may look like under Beijing. Who are not known to give money away to ordinary people.

 Nine-in-One Elections   

Next year sees the local council elections which are more important than many people think. In the above example we can see how the local elections changed political sentiment in Taiwan in 2018. These elections in 2026 could well be a similar turning point and the DPP obviously knows this, how could they not? After the recall embarrassment, the question is will they take action? 

Subnational elections can seem unimportant but in Taiwan the way the city to city relationships via the parties feeds up to the central government is seldom noticed by the central government. It explains why local council elections in many countries are largely ignored by voters but actually have a large impact on central government. 

The trips by some of the newly elected MPs to China underscore this. Their influence on the central government is substantial. The so-called Hualian-King being a case in point. Their influence via local temples is huge and feeds through to the higher authorities in Taipei. Since their defeat in late 1949 the Kuomintang has had huge power in this particular local base.    

In any battle, an attack is quite often met with a counter-attack. The DPP generally doesn't do this, or their response is weak and ineffective. Taking the moral high-ground it all very well but it’s not working for the DPP politically. They are clearly losing the fight and if they fail, Taiwan will become the next Hong Kong. Just another notch on the bedpost for the mainland.

Tinkerty Tonk   

Politics of the Kindergaten

Unless you have been living under a rock for the past few of years, it is hard not to notice that the quality of some of our Members of Parliament has been spiraling downwards in a spectacular race-to-the-bottom. 

As a British national I’m well used to the politics of the madhouse. That said, the deranged days of Brexit, a succession of short-lived Premierships for a succession of reasons from uselessness and lying in office to crashing the economy, some semblance of normality has now returned. 

(Liz Truss lasted for just 44 days in office as Prime Minister after crashing the economy)           

Here in Taiwan, where I have lived for ten years, the quality of our political representatives appears to be getting worse by the day. Their rhetoric and outlandish statements seem to be designed to inflame and anger, rather than make sensible political points. 

Which is all out of Trump’s playbook of endless lies designed to fool the electorate, and it is clear many Americans believe even the most ridiculous lies he tells.

KMT Chairman Eric Chu seems to have run out of his own ideas to become a Trump Mini-Me, or repeating utterances from our communist neighbour. 

Chu has asserted the DPP’s William Lai is doing to Taiwan’s opposition parties essentially what Hitler did in 1939.  After the German office protested at this outlandish comment, he refused to  back down and said...

"If Germany has truly learned the lessons of the Nazi era, it must deeply reflect on how the Nazis exploited so-called "legal procedures" to gradually eliminate dissenting parties and all opposition forces."

After half a dozen foreign offices in Taiwan stood by Germany's protest, Eric Chu doubled-down, asserting that foreign governments should not interfere in Taiwan's internal affairs.

First, they are not interfering in Taiwan’s internal affairs, they are merely pointing out that what you said is uneducated, absurd and wrong. (Chu should also bear in mind that Taiwan will need all the friends it can get if things with China get bad, insulting them is not a smart move.) 

Second, lessons about Nazism and The Holocaust are mandatory in German schools and most students will have visited at least one concentration camp on a school trip. I have a German student at my university who attested to this. I also have the evidence of my Taiwanese wife who was NOT taught about the White Terror. It is taught in schools now, but who would you say the Kuomintang acted like during Martial Law by suppressing such education? 

Is this the kettle calling the pot black? 

The rise of Nazism was multifaceted and bears zero relationship to what is happening in Taiwan at the moment. There were broadly five factors involved. 

There was the Great Depression which saw hyperinflation, huge unemployment and widespread poverty, the German people were desperate. The Nazis exploited this. The Treaty of Versailles, imposed on Germany after World War I, was humiliating, prompting a sense of injustice. The  Nazi’s also exploited this by claiming the military had been betrayed by politicians, communists, and Jews.

The Weimar Republic, established in 1919, was weak, unstable and riddled with conflicting ideologies. The Nazis sold themselves as a strong and unifying force. There was a huge fear of communism in Germany, particularly after the Russian Revolution in 1917. On top of all this, Hitler was highly charismatic and had an extremely effective propaganda machine.

To compare the way the Nazi’s used all these factors to gain power to the situation in Taiwan now, is patently absurd. Chu's simplistic assessment of the Nazi’s use of the then German  constitution is partly correct but if the German people had not flocked to support the Nazi’s because of all the above factors they never would have been in power. In 1928 the Nazis only had 2.6 percent of the vote, by 1930 it was 18.3 percent and by the July 1932 election it was 37.3 percent making it the largest party.

All democracies have gaps in their constitutions which allow politicians to use clever or devious ways to gain the upper hand. Like the KMT standing in the way of allowing new judges in the constitution court so it cannot sit or rule, or like the KMT physically locking other MPs out of the chamber so votes are put through on the nod without proper discussion.

Flinging about mindless accusations hoping people will just believe you is not how proper  leaders should behave, although Chu does have a bit of a track record in this regard.

Is it just huge arrogance that they are somehow way smarter than everyone else in the country? A feeling they will just get away with it? That it doesn’t matter if they make themselves look stupid or they don’t care if they look stupid? 

Or, worst of all, if it works and they get power, the end will justify the means…er, back to Trump.           

Chu is at the vintage end of Taiwan politics, let’s look at someone on the junior end.   

The latest example of just how bad it has become is put perfectly in focus by Keelung’s KMT member of parliament Lin Pei-hsiang. Rich and clearly entitled, he recently proudly announced he and his ilk were "are the top one percent of outstanding people." 

With mind boggling self-importance he even felt the need to say that he is ‘outstanding’ and a member of the ‘elite’. “We are members of parliament, there are 23 million people, we should be the tip one percent of elite people.”

He’s only 48, bless him, so a political teenager in the grand scheme of things, but someone  needs to quietly tell him that this is not the way to go about connecting with your electorate, muchless avoid being recalled. His hubris is what caused the recall attempt in the first place. 

While I’m sure his parents - Dad was a mayor twice and Mum was an MP - have always told him he is a Prince among men, brilliant beyond other mere mortals, and a member of their laughably-mini political elite, he has clearly made the mistake of believing them.

As the old cliche has it when looking at a wayward child - ‘I blame the parents’.  

The amazing political stupidity of not realising that telling your electorate you are massively smarter than they are and clearly the person to tell them what to do, in fact the top one percent of the entire population, might just rub them up the wrong way. 

I defy anyone to provide me with evidence that just because someone has enough money and clout to be able to finagle their way into politics that they are smarter than anyone else. There are hundreds of examples of stupid acts by stupid politicians - I certainly have plenty of evidence for that. 

The top one-percent, what utter tosh! It is an elitism mentality in its most acute form. I would ask every voting individual in Keelung to ask themselves…are you not as smart as your MP? Because he certainly does not think so. He thinks he is way smarter than you and you just need to listen to him and do what he says.    

What drives this kind of political stupidity and a belief that, like Trump in the United States, you can get away with making absurd statements like Pei-hsiang? President Donald Trump's self-appraisal is that he is “a very stable genius” he has said it many times.

Elsewhere in the exclusive world of the political elite, the DPRK’s Kim Jong Ii scored a perfect 300 the first time he bowled, according to North Korean media. He was also better at golf than Trump with five hole-in-ones for 38-under par round in his first game of golf.

It beggars belief these people say all this out-loud. For Pei-hsing to say, pretty much, that everyone is stupid except him is either simply aping Trump - or worse - he actually believes it of himself.

You see this kind of Warlord like behaviour elsewhere in the world. Which is likely due to the fact the KMT has lost a lot of wealth and power in recent years as the DPP stripped away their assets and property. “The KMT is running on cronyism, it used to be centralized but now distributed,” said Recall spokesman Mitch Yang.

“The property and assets were illegally obtained and have all been confiscated by the government. Because they now don’t have those resources, they have started to do what they can to make money,” added Yang, who was out on the streets of Keelung on Sunday urging voters to sign the recall petition there. 

“The central KMT control has gone and each of the local guys are getting stronger and they are likely getting money from the CCP.” 

This fragmentation means the likes of Pei-hsiang and the Hualien King can speak and act like they are running their own little fiefdoms for their own ends, whatever they might be, rather than for the good of the people who voted for them.  

With the old KMT money gone, is it fair to assume cash is coming to them from elsewhere?

What exactly was behind last year’s China visit by eighteen Kuomintang legislators to mainland China?  They met with Wang Huning, a member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee and Chairman of the Chinese People's Political Consultative Conference, and Song Tao , Director of the Taiwan Affairs Office of the State Council.

A cultural, or political visit? I’ll let the reader decide.   

With daily military threats from China from both the air and sea, it is exactly why the KMT recalls are happening.

The China friendly stance of a number of hugely arrogant KMT MPs is something Taiwanese voters need to urgently take note of. Taiwan is a democracy and the people voted for the KMT and TPP knowing they were both China friendly and the narrowly claimed a majority in parliament is what they are left with. 

Through these two party’s actions over the last year and a half, it is very clear they are actively seeking closer ties with China. 

Those who have a vote in the latest recall might be able to change that worrying dynamic.

Tinkerty Tonk...

Financial Markets - Never try to catch a falling knife

A large chunk of my over 40-year journalistic career was spent covering economics and financial markets. It was my job to talk to those in the field, from foreign-exchange, stock and bond traders, to top bank economists and strategists. With political economists thrown in.

What follows are purely observations of the dynamic of the stock market crashes I have witnessed and reported on, together with what I currently teach at Universities here in Taipei  and elsewhere, in terms of understanding financial market structure. 

This is not investment advice. Merely my observations of past market volatility I have witnessed and covered first hand, and some investments that were obvious at the time, and some that were pushed by banks and others that did not turn out for the best.  

WHERE DOES THE MONEY SIT

Let’s first understand the dynamic of financial markets in terms of professional vs retail investors. 

I, like many of you reading this, are retail investors. We are not sophisticated, we mostly buy or hold with a view/hope, prices will rise. Retail investors’ share of total trading volume rose from just above 10% in 2011 to over 22% in 2021, according to Bloomberg Intelligence.

But the wider picture of your money in the market then extends to your pension fund, your savings in the bank, your bank deposit or any other stavings you keep with an institution. It’s your money. Never lose sight of the fact that market stories, volatility, crashes and rallies are all happening on the back of your money and affect your personal wealth in some way.

Like it or not, we are all involved, and affected by, the political ‘game’ that is playing out globally at the moment, driven by the orange chap in the White House. The reality is retail investors like yourselves have pretty much zero control over what is affecting your money. Unless you decide to trade in or out of volatile markets on a daily basis with the spare money you have and accept the huge danger that involves. 

DUMB MONEY VS SMART MONEY

The first thing to understand about sharp market movements, either up or down, is that professional investors have a huge advantage over the vast majority of retail investors.

By and large, retail investors buy and hold on the hope of a rise in price before they sell to realise their profit. Professional investors, with access to more sophisticated financial instruments can play two sides of the market by selling assets they don’t own with a view to covering that ‘short’ position at a cheaper price later - and pocket the difference. 

This dynamic is a long standing and somewhat depressing one whereby retail investors who only trade with one weapon, that of going long, are fighting professionals who have two weapons - going long and short. Most retail investors try to fight the market with one hand tied behind their backs as they don’t have the sophistication, or ability, to short the market in a downturn.

During less volatile times retail investors are not privy to high level data and market information, much less risk analysis, or even basic or technical analysis of market conditions.  

This is why financial markets tend to have a saw-tooth pattern as retail investors buy-in during good times to push the market higher slowly over time. Then, when something bad happens, the professionals aggressively go short to rip that accumulated wealth out of the market. The sad reality is the flow of money is from retail to professional investors and it happens over and over again when markets top out, for whatever reason. 

Make no mistake. Banks and professional investors will have made billions from the lastest downturn in global markets. The losers will be retail investors, pension funds and the personal wealth of individuals, whose investments are not nimble or sophisticated enough to cash in and take advantage of the sharp and savage downturn. 

THE ANATOMY OF A BULL MARKET 

It is no surprise that financial markets fluctuations, much like life itself, happen in cycles. Gross Domestic Product, ie. The value a nation creates broadly follows an upward trend over time as long as a government is doing its job and creating conditions whereby the people can enrich themselves and improve their standard of living.

Stock markets follow this as, obviously, companies linked to an economy will become more profitable on the back of economic growth. This is when ordinary people buy into stock markets as a means to further enrich themselves, whether through equity funds, pension plans or via direct investment by purchasing shares in a particular company.

When conditions are right, professional investors, I mean the big banks, and institutional investors all start to advise their clients to buy. Using themselves as the brokers to the deals, of course and charging a fee. There are free services but they just sting you on the spread of the asset you are buying or selling, which makes up their commission. It’s not ‘free’. 

Once these big investors are satisfied and fully invested, the professionals will allow their research into the open market which is when you will start to see newspaper articles saying this, or that, is a good buy. This is when retail investors jump in to buy the last part of the rally. 

The last part of any asset market rally is typified by the high level of retail investor interest. They are all getting in once the professional players are fully invested. It’s the icing on the cake for professional investors who are ready to rip money away from a bull market by dealing fast in the spot market or using futures or options to aggressively short. 

I’m going back years, but there was an off-quoted rule of thumb in Hong Kong about the market which went…”When you land at Kai Tak and your cab driver on the way into town tells you to buy the market, or a particular stock…the first thing you do when you get to the office is to sell it.”

It is also well to remember that stock markets only continue to rise if there is money flowing into them. They don’t rise by magic without fresh liquidity. Once a market is full of money, it will stop rising and correct. Huge buying by individuals is usually the last gasp of this liquidy. 

PAST MARKET CRASHES

The first stock market crash I covered was the 1987 collapse. From 1986 there was a powerful bull market that started in the summer of 1982 which soared following the so-called Big Bang which was the sudden deregulation of financial markets. This bull market was fueled by hostile takeovers, leveraged buyouts and merger mania. Companies were scrambling to raise capital to buy each other out.

The panic to get out was typified by the inability of investors to sell because systems were jammed and some countries closed their markets to try and prevent more selling. There were cases of brokers being shot by frustrated investors who were unable to escape the carnage. 

It was a similar situation in 1997 when the massive bull market created by the Tiger Economies of Asia fell apart, mainly because governments relied on fixed exchange rates which did not allow for the economic pressure they created to dissipate and in July 1997 the whole thing fell apart and millions were thrown into poverty.

The over-promise of the internet in 2000 created a huge bubble in tech stocks with venture capital pouring in to find websites that never had any chance of making money. I sold a tech-fund I had after it made a 137pct profit over about a year, in December of 1999. My broker told me I was mad for selling it and I should stay invested.

After the massive fall in 2000 when the internet market bubble burst the tech-heavy NASDAQ index fell from around 5,000 to around 1,400. It didn’t recover back to 5,000 until around 2015.

I clearly remember some market analysts were urging people to buy at the lower levels as the market ws a ‘bargain’ but it never really recovered and the index languished for years. I daresay you have heard ‘experts’ telling investors to buy into this latest orange inspired crash. 

This is where the old market wisdom of ‘Never try and catch a falling knife’ comes from.   

I see echoes of this over-promise now with AI and the billions being poured into it, likewise crypto, but that’s something for another story.  

Smart investors never try to catch the very top, or bottom, of any market. If you catch the bulk of a market run you are doing well and missing out on the last 10 pct of a move is the wise thing to do. Any professional investor or trader will tell you there is no such thing as bad profit.

Trying to call a top or a bottom exactly is a fool’s errand and often leads to disaster. Never forget that financial markets run on fear and greed. Take those emotions out of your personal investments and you will do well. Give into them and risk a lot.

I have shares. What am I doing you may ask, given I've witnessed and written about many stock market crashes. In nearly every case, stocks recover relatively quickly and my losses at the moment are significant, but only on paper. I’ve ridden out every stock market crisis since 1980 when I started writing about financial markets for Reuters. I’m doing the same now.     

MARGIN CALLS

The one thing retail investors often forget is the dynamic that margin calls have on markets. 

If an investor has borrowed money to buy stock, which many do, they secure the loan on the value of the stock. If they buy a stock and it goes up, fine. If it goes down, the lender will ask for a margin payment to cover the difference between the loan and the value of the holding. 

If an investor gets hit by a margin call they will be forced to sell the stock to cover the margin call. In the recent orange stock market collapse, forced margin selling exacerbated the downside considerably. 

It is this dynamic which causes suicides and bankruptsies during market collapses. Never let greed take over investment decisions. Trade within your limits and understand your maximum loss. Beware of futures or options where it is possible to lose everything because of the way they are leveraged. Taking a 20 pct hit on a stock holding is one thing. Losing your entire investment, or more, is quite another.

UNCERTAINTY IS THE WORST THING FOR MARKETS

Uncertainty is something financial markets hate. I’ve lost count of the number of market analysts saying as much in stories I’ve written over the years. We currently have a hugely uncertain situation as the orange one keeps changing his mind. 

Yesterday he was going to war with the world over trade and boasting how world leaders were but panicked when the markets collapsed and backed down on Wednesday by suspending tariffs by three months for everyone other than China.

He claimed that other countries were calling and "kissing my a**" to negotiate tariff rates just before they went into effect. “They are dying to make a deal. 'Please, please sir, make a deal. I’ll do anything sir,'” he imitated a begging foreign leader. 

I’d really like to meet anyone who believes that. From a proven liar who is barely able to form a 

coherent sentence, it’s a leap to believe any self-respecting country leader would debase themselves like that. 

By doing a massive U-turn on the tariffs because he was panicking over the stock market crash, only increases the uncertainty as to what his malfunctioning synapses will come up with next. 

The bottom line is no major corporation will move quickly to rebase to the US because the orange administration changes its mind, almost on a daily basis. His actions are not pragmatic, they are driven by panic. His actions are not strategic, they are scattergun.

It’s hugely expensive to rebase manufacturing to the US and takes months, if not years. This is what the orange man wants but some large companies like General Motors and John Deere are already calling his bluff and are happy to wait it out and carry on with plans they already have in place. General Motors to drop 14,000 jobs in North America and close five plants as well, sending a clear message it was prioritizing global expansion over Trump’s nationalist agenda.

Farm machinery manufacturer John Deere has said it will push ahead with plans to move some of its production from Iowa to Mexico. The orange one is clearly furious and has been making all sorts of threats against both companies.      

Which would seem to be a wise move given the current administration seems to change its  mind almost daily on major US trade policy. You simply can’t run a major company with that degree of uncertainty hanging over you. 

Besides, the US mid-term elections are coming in November. There are just too many variables in place for businesses to make long term plans on the basis of the current chaos. Who knows what madness is coming next? Invasion of Greenland? Invasion of Panama, taking Gaza? 

Or, indeed, the US, one way or another, abandons this madness and we can all get back to business as usual. 

But the chaos looks set to continue and unless you think you can second-guess the orange one, it’s probably best to take a hands-off approach to things. If you are thinking of second-guessing him and putting money into the market, I wish you the very best of luck.   

Tinkerty Tonk...

 

Freedom of Speech - well, not all the time

“The world turns and the world changes, but one thing does not change. In all of my years, one thing does not change, however you disguise it, this thing does not change: The perpetual struggle of Good and Evil,” is a quote from a play called The Rock by  T.S. Eliot, a poet, essayist and playwright (1888-1965).

Mankind has to accept the world changes, but at the same time we do not have to accept that  somehow this justifies a shift from good towards evil. 

The bullish and aggressive narratives which currently dominate our lives, largely, it seems, as a result of social media, is clearly making for a more dangerous and unstable world. Sure we all accept the world will constantly change, but why do we apparently have to accept it changing for the worst?   

The understanding of what the truth and freedom of speech actually mean is horribly clouded and people already shrug and say “Ah, we are now living in The Post Truth Era.” That such a phrase actually exists is absurd. Do we really accept that lying is now OK? Does that not undermine the whole rule of law, much less morality?

Let’s take freedom of speech, a long-cherished and hard fought for right of democracies everywhere and something billions of the eight billion of us on this planet, do not enjoy. 

The recent headline stealing story of a mainland Chinese woman married to a local man who has had her Alien Resident Card (ARC) card revoked and is being deported from Taiwan, has thrown the issue into sharp relief.

Let’s look at the details of that case before we get into the broader issues of what exactly is freedom of speech and how the understanding of it is currently being distorted, mainly by those in a position of political power.  

For our home example, I’ll use her TikTok label of Yaya.

Yaya’s assertion that her human rights were being violated because under Taiwan’s constitution she had the right of freedom of speech and her TikToks saying Taiwan was an awful country and China was well able to attack and take the island over and should do so, were protected speech. 

Quite why she stayed here and did not return to China with her family if she thought Taiwan was such an awful place, is another question. 

But her assertion that her rights to freedom of speech were violated is wrong because freedom of speech is not absolute. 

It would seem that under law, her defence to deportation is flawed as her speech strays into the area of sedition and that is why she is being kicked out. Sedition is broadly defined as “conduct or speech inciting people to rebel against the authority of a state or monarch”. I’m a journalist not a lawyer, but it seems she is being ejected not for saying Taiwan should be part of China, but for advocating that China should take Taiwan by force. 

She was strongly supported by the KMT and you don’t need to be a genius to analyse their motives.   

By their actions in parliament and general rhetoric it seems obvious to all but the meanest intelligence that the Kuomintang are actively working to help China take control of Taiwan. This despite the almost perfect irony that the Kuomintang were founded on the principle of waging war against the CCP. Go figure? 

‘By their actions shall you know them’ is a paraphrase of The Bible’s book of Matthew which basically says judge people's character and authenticity by their deeds and actions, not simply by their words or appearances.

But I digress. 

Whether Yaya is simply seeking clicks and views and the accompanying money from TikTok, or whether she is something more sinister like an agent provocateur in the pay of Beijing is obviously open to question. You have to ask yourself if destroying your life and splitting up your family so effectively is not something you expect to be ultimately rewarded for?

Call it a conspiracy theory if you like, but parading in front of journalists and courting publicity even as she was thrown out of the country are the actions of someone expecting to be rewarded somehow. Or she is just as stupid as a rock.      

To my mind, she is rightly being deported and the less of such people in Taiwan seeking to promote a China takeover, particularly by force of arms, the better. 

But it does raise the issue that while some countries have strict sedition laws which can be used to stifle freedom of speech, Taiwan does not. The question is, should such laws be tightened given the threat from the mainland given that for Taiwan it could mean bombs, invasion and mass slaughter of civilians, not just a threat to the existing government.

Since martial law ended in July 1987, Taiwan has junked its strict anti-sedition laws and embraced democracy with a strong emphasis on freedom of speech. Clearly, this latest case of the outspoken Yaya means the government might need to look again at how sedition should be defined and handled in the future. 

There would seem little hope of that while the KMT hangs onto its tiny parliamentary majority and is actively seeking closer ties with China, but when things change it would be well to revisit this and finesse the sedition laws here. Given the oft-made threats of direct violence and war towards the Taiwanese people by China, this would make a lot of sense.

But it is a tricky balancing act. Taiwan was right to pretty much abandon the strict sedition laws as they can easily be misused to subdue democracy and have been used historically to subdue populations and prevent political opposition to an incumbent administration.

During Taiwan’s White Terror Period (1949-1992) sedition laws were used to great effect by the KMT. This era ended in September 1992 with the repeal of Article 100 of the Criminal Code, allowing for the prosecution of "anti-state" activities. Therein lies an issue about perhaps changing the code, particularly given the ‘enemy’ is the same, China. 

Thirty three years later, China is again a huge threat as it was in 1949. Maybe time for a rethink?     

India and Hong Kong have both found their sedition laws particularly useful at times to stymie opposition groups. 

In Hong Kong, the century old laws were used to great effect to prosecute democracy activists and these convictions sparked concerns over the impact on freedom of speech, in the wake of the Beijing-imposed national security law.

In India, the laws of sedition are still a powerful sanction used by the authorities to criminalise dissent and arrest critics of the government. The ruling Bharatiya Janata Party (BJP) government uses these old laws to crack down on journalists, activists and others.

Surprise, surprise, sedition laws were pretty much a product of the Colonial Era which to a large extent came under British rule, certain in the case of Hong Kong and India that is the case. Other countries are just as guilty but these old laws in most parts of Asia are throwbacks from the Colonial Era, whichever powerful country involved was.

Do a Wikipedia search <Colonial empire> for a full list (which, incidentally, includes the United States…a nod to Trump’s ambitions for Greenland and the Gaza Strip). It really is an interesting list if you have not studied this subject or had much time for history and were too busy earning a living.

Many countries have laws of sedition but most don’t use them and some have softened them much like Taiwan has. However, the definition of Freedom of Speech is very much in play in global politics and it is a phrase being bandied about more and more.    

The fact is there is no such thing as absolute freedom of speech, it seems daft that Elon Musk has declared himself to be a “free-speech absolutist”.

Much like the man, this is clearly absurd. Having bought Twitter he promptly banned a whole bunch of people from it who he didn’t like so is clearly a hypocrite. There is nothing illegal about being a hypocrite but it serves to remind the entire world the man is morally bankrupt and a fraud, Nazi salute notwithstanding.  

On top of this, he cannot be ‘free-speech absolutist’ as he is threatening to sue Jamaal Bowman, an American politician and former educator for calling him a “thief and a nazi” during a television interview. Which is exactly why there is no such thing as absolute freedom of speech. If there was, defamation would not exist and that is preposterous. 

Aside from the largely pointless ramblings of the likes of relative nobody in global terms like  Musk, more insidious are the moves by US President Donald J Trump who is currently moving to stifle news reporting in a thinly disguised revenge attack on organisations critical of him in the past. Using free speech as a cover.  

What we are not seeing cuts to the quick, as suddenly…freedom of speech becomes a problem.   

Associated Press (AP) was banned for resisting Trump’s demand to rename the Gulf of Mexico as the “Gulf of America” and other news organisations like Reuters and some European publications have been similarly affected. 

Trump’s war on the truth and freedom of speech, together with his moves to replace it with slavish sycophancy from supportive outlets must be music to Chinese state media who are filling the vacuum with their own brand of world news.

Just as Trump is making inroads into the US Constitution, this attack on the First Amendment is an obvious one. Like dictators before him, including Hitler, Stalin and Mao, Trump seeks to directly control the narrative. His seemingly endless lies will be with us for a while yet until the American electorate comes to its senses and dumps him. 

Surely, by now, most right thinking humans who have devoted some critical thought time to the subject must realise that Trump will sell Taiwan down the river if it suits his own ends, just like he has tried to do with Ukraine and their rare-earths. 

Rare-earths…semiconductores, pause for thought. (not forgetting Greenland, Gaza etc) 

"Democracy Dies in Darkness" is the official slogan of The Washington Post. Sadly for us all the United States, that one-time bastion of free speech, freedom and democracy is entering a darker phase where all those rights are at risk, even for America’s own population.

Tinkerty Tonk...