The Corporate Sky-box Administration – March 2003

Interpreting the actions of this administration requires an understand of two conditions: 1) Bush was elected by big corporation interests and the country is being run for their benefit. 2) Bush has no interest other than politics and his decisions, when not a response to his corporate sponsors, are always political. Bush showed a bit of independent activism in his first eight months, then came the war. The only outside interest shown since 9/11 was when the Enron revelations threatened his sponsoring corporate chieftains. Enron demonstrated how the management of many publicly held companies had become corrupted by an orgy of bonuses and options. Corporate heads needed to cut short the resulting reform movement. They awakened Bush from his war fixation and distaste for new proposals. He announced support for, first a limited restriction on the ability to cash in shares received in 401K plans, and, second, against a plan to penalize management that makes off with huge option awards only to see their stock crash. Bush's efforts are an attempt to limit reform to something his mentors can swallow, although they have already reneged on the company stock holding time limitation. The Enron situation has the potential to correct the accounting problem and the excessive option awards that led to the cheating. Bush is trying to short circuit reform by putting soft proposals on the table. Next came tariffs on steel. This issue has been around for a long time. No president, not even Reagan, did anything because the dumping charges are empty. The war allowed the steel industry to place itself in the position of a needed national interest. The modern portion of our steel industry, so-called mini-mills using largely scrap, have been expanding year after year, and the efficient ones are profitable. Tariffs are terrible economic policy and worse for international relations. The whole structure of world trade, the foundation of a world of understanding interaction, has been undermined. Why did he do it? The only possible answer, other than responding to corporate sponsors, is politics - a hope of buying union votes. The champion of free trade suddenly turned to tariffs, at another loss of credibility and deepening distrust abroad. The decision was typically pragmatic relative to his corporate sponsors. It was blatantly protectionist, and a setback for both free trade and foreign relations, but it met the urging of his backers. The movement to foreign factories, or just buying from foreign sources, has been further encouraged. Steel users are far more important to our economy than the industry itself, but they failed to mount a strong counterattack. The key issue, though, appears to be politics, the hope of picking up votes in steel making states. We could see more tariffs, as Bush has revealed his willingness to sell out free market principles for votesf. Foreign competitive pressures are growing in many American industries, and Bush responds to the requests of his corporate buddies. Normally a president trying to lead an international war would avoid moves that harm allies and cast us in the worst possible light (remember the ABM treaty, unnecessarily given up for an anti-missile research program that was going to be worked on regardless). Other than intervening to help his sponsors, since 9/11 Bush has been interested only in sounding off with tough guy bully talk, building the worst foreign relations in American history, if a strangely based popularity in his own country. His talent for cheerleadering, first seen at Andover, is being applied on a national scale. In the meantime, he has nothing to offer, no recession fighting plan, no domestic anti-terrorist program, no oil dependency program, no nothing, just as would be expected of a far righter who thinks government, other than defense, is bad. A normal president would have seen recession fighting as his job, but Bush used it only for political advantage. He is so detached from anything other than his little war that he seems to be wound up daily by his handler, Karen Hughes, and sent out like a toy soldier to make ha daily speech, saying nothing except how brave we are, what cowards everyone else is, and what a great leader he is. At first it was the same speech, now he has about three variations. This man started running for reelection the day after inauguration and the pace picked up once he had an issue as a guide. Anyone getting in the way is termed unpatriotic. Bush became a popular hero because of the war, but the image is built on a strange foundation. His transformation from a smirking, shallow man interested only in helping his rich friends and big corporations into a great wartime leader is based on his single minded purpose in defeating terrorism. Now his lack of knowledge and interest in affairs of state, his child-like attitudes toward difficulties, his very simplicity, comes in handy. Bush seems resolute and engaged because of his extraordinarily narrow attention span. The focus on getting the evil doers is cast as great leadership, the empty braggadocio as inspiring. The almost daily round of flag waving speeches goes smoothly because he has the three variations down pat. The goofy-friendly manner is most unpresidential, but seems to make him liked. Reagan was a bit that way and got away with his cowboy act, but on him it seemed sincere, and he expressed himself in an intelligent witty manner. Bush overdoes the cornpone and nothing intelligent ever leaves his lips. The war made Bush seem more knowledgeable, but whenever caught in an unprepared situation, he comes across as dumb as ever. His lack of curiosity and thoughtfulness is covered up by flag waving. His handlers won't let him near an open press conference because extemporaneously his still comes across as uninformed and bumbling. It isn't the messed up grammar, it is what he says. What appears to be purposeful is a narrow minded inability to think about consequences. Though he is currently viewed as unbeatablke for re-election, the American people can't continue to fall for this act, they are not that dumb. It is important to remember that his popularity is based on the war, but this was never was a real war. How can the most powerful nation on earth fight a war against maybe 10,000 semi-beggars spread out over thousands of miles. Afghanistan did give us the sole concentration and the leader, but we bungled the job (while the generals and the administration have been strutting about their great victory). We popped off a lot of toys, but the only accomplishment was to driver the hidden enemy more underground and probably increase his numbers. in the worldThe phony war is not going nearly as well as we are told. Everyone but the generals knew bin Laden and most of his followers would get out through Pakistan and might have been cut off (apparently we overestimated them and failed to consider they would move on to fight another day). The U.S. has never shown much flanking ability (good in Iraq and Inchon, otherwise almost always straight frontal assault). From a post Afghanistan point of view, the impossibility of invading other countries is becoming clearer. Now Bush is stuck with a phony over-propagandized war and no place to go. The weird combination of bombast, bombs, and stupidity leaves us not trusted by the rest of the world. Foreigners see Bush as a combination bully-idiot-kid with a lot of scary toys to play with. Bush has to keep going because of the initial failure and the promise of a long war, but mainly because of politics. Despite the propaganda from the White House and the Pentagon, fighting a phantom enemy will inevitably degenerate into ineffective flailing. Since he needs to keep the war going at all costs for political purposes, it has been expanded to a war against "weapons of mass destruction". Iraq is the target, for lack of a terrorist one, but the rest of the world recognizes that Iraq has little relationship to terrorism and they are offended at aggressively invading any sovereign nation. They have seen this before, from the Romans, to Napoleon, to Hitler. As a result, Bush has failed to land Turkey as his mercenary ally and staging base. Apparently the right wing saw Turkey as buyable in exchange for Iraq's oil fields, but Iraq means Kurds and the Turks already have a serious internal problem with their own Kurds. They disappointed Bush in saying no. Europe has turned him down. It looks as if we have to put in our own troops, but there is no chance of the kind of strong coalition of 1990-91. Then we were repelling the aggressor, now we are the aggressor. Europe has long memories of aggressors. Neighboring countries have refused to serve as staging areas. Renewed fighting in Afghanistan is a great break, as would be another terrorist attack (for him politically). Politically he has to go for Iraq as the only alternative in maintaining his popularity, and enough foreign nations will be dragged along to cover up, at least in this country, the resulting bitterness against us. But the move against Iraq would probably harm the war against terrorism by being distracting and building hatred against us. Among the many dumb decisions resulting from these policies is the proposed increased in the defense budget. Bush used the "war" to try and foist off a major increase in defense expenditures. The circumstances of this war make it clear that heavy weapons are a thing of the past. The only conclusion I can draw is that the warmongers want to take in China, probably because they are a growing economic threat. But the lack of need for the new heavy equipment is going to make for a hard fight in congress. You don't need big weapons to fight a small guerrilla war. Bush has missed his period of great popularity to get through needed programs, of which internal defense against terrorism and a long term oil program are merely the most obvious. The reason is that he totally lacks genuine leadership, he ever avoids it because he has no understanding of the problems and holds the right wing position that governmental action is always negative. Bush showed once again that he has no interest in the general good, but will respond to special corporate interests. Certainly Bush has political talent, probably because that is his only interest, but his utter lack of engagement in national policy has led to a failure to use his popularity. The he internal defense program against terrorism is wallowing in ridiculous militia carrying unloaded rifles in airports and color coding. There is no program of any sort, like cleaning up the mess in the immigration agency, or tightening borders, or planning for another Oklahoma City like bombing (a more likely next step rather rather a jetliner bomb). 9/11 made clear that we must eliminate dependence on Moslem oil. Bush could get Alaska approved for his oil buddies, but it has to be part of a long term program to eliminate middle east oil through alternative means. Instead, Bush pushes the oil company line and pretends that Alaska would make us self-sufficient. Since the oil buddies do not want a plan for seriously cutting oil usage, we are unlikely to hear anything from Bush, though the need is so obvious perhaps even he will get the message. Thoughtless policy and an ineffective war have to be covered up. The means are flag waving, propaganda, and a blanket of non-information. This is the most secretive administration in history. What have they got to hide? Why is so little being discussed about the cause of Moslem hatred and how to meet it? Instead, Bush strikes out like a spoiled kid and makes the problem worse. We are sending terrorists under cover, but the resentments that brought on terrorism are growing deeper and more widespread. You can't bomb this kind of fervor away, it must be dealt with intelligently. We are fighting a guerrilla war and guerrilla wars are always embarrassing for the ruler-invader. Guerrilla wars are about harassing the bully boy. The Bushies can't see that it is this is the kind of war. Smash 'em with overwhelming power has always failed in guerrilla wars. We must deal with the underlying problems, for our present policy will only create more guerrillas. The battles go to the invader, the war goes to the home team. We played the invader with overwhelming force once before, and lost that one. We won't lose this one on the battlefield, but we are likely to lose by increasing hatred the point where terrorism becomes a greater threat. Bush can get all the support he needs against terrorism, but when it comes to invading countries just because we don't like then ,it is another matter. There is little evidence he understands the distinction. The war on terrorism isn't a big weapon war. It takes intelligence and working with the home country. The threats and stupid diplomatic moves harm the effort. The manifestation of the corporate culture in the administration is a don't give a damn attitude about anyone else. Arrogance was always Bush's worst problem. You can see this same quality in Ashcroft and Rumsfeld. The right is pillaging Powell because he talks reason and is not sufficiently macho. The results are bad tax policy and hopeless foreign policy. Bush is ruled by hard line right wingers who are dogmatic in doing things their way and to hell with the cost. His skill is in appearing to be a non-dogmatic good guy, but the actions say otherwise.

Market Commentary – March 2003

My work tells me the market is not going anywhere, and if it does the direction is likely to be down. We are probably in one of these extended flat periods that can serve as an alternative to a gut wrenching bottom. I hope so, but what is the evidence we may go down? First, this appears to be a major bear market in the category of 1929-1932 and 1973-1974. Such declines are marked by major changes in the economy and the way the investors perceive equities. So far there is evidence of important change in the economy, though it is probably not yet reflected in stock prices, but investor perceptions have barely begun to adjust. The lack of attitude change is reflected in the way high technology stocks lead every rally, even though their earnings remain terrible and pricing high. High tech products continue to sell well, Dell for instance is selling more computers every year, but profits are down. That is not the magic formula to success, but you would not know it from the price of Dell’s stock. Wall Street thinks it is 1994, with its strategists recommending high equity exposure, and cash in mutual funds at low levels. Investors are waking up, but their minds are still influenced by Wall Street bulls. Bull/bear opinion statistics are positive (heavily bearish), but the all day stock market show has a parade of money managers selling the bull case. Mixed into the bull crowd are a few quiet bears. I suppose it is because I share their point of view, but these people sound thoughtful and intelligent, while the bulls sound like they are pushing stocks for a living. It is also comforting to have Warren Buffett and John Templeton in your corner (maybe you have to be seventy and have gone through a previous secular decline to get a feel for these things). The consumer held the economy together, but now consumer support is weakening. The downtrend in consumer sales gains has not reached zero, but getting close. It could weaken further with employment numbers making no progress and an indication consumers are tightening their pocketbooks because of worry about the future. Some of this tightening is from necessity, revealed in high and rising credit card and other consumer credit delinquency. The buying inspiration from no interest loans is old hat now. More directly, the great mortgage refinancing boom that injected hundreds of billions into the economy in the last two years appears to be over. Lower long term interest rates would extend refinancing, but that is likely only if the economy weakens, so the medicine is worse than the cure. Experienced hands have an uncomfortable feeling about the strength in housing. Every instinct says it can’t last. Enthusiasts say there is no housing bubble, but if not a bubble certainly a boom. If it ends, important support for the economy is removed. Some of the housing boom comes from conversion from apartment living, but apartment vacancies are rising and rents falling, so the mathematics is working against the trend. An end to the housing boom could mean trouble because, not only would the money coming out of refinancing disappear, but prices are likely to weaken, reducing the wealth affect and discouraging consumption. Housing will probably level off or slump a bit, not a catastrophe, but adding to the sluggishness of the economy. The dollar is going to weaken further, perhaps substantially. The happy folk say that is great because the trade deficit will ease as foreign goods rise in price and domestic products become more competitive, but the dollar is already off a lot and the trade deficit continues to rise (many far east currencies, notably China’s, are pegged to the dollar). The trade deficit guarantees that foreigners will be getting a large dollar inflow, but the weakness is leading to unloading those dollars. Our image as the land of opportunity has gone up in the smoke of internet and high technology disintegration. The exploding deficit is not a confidence builder, and our fecklessly aggressive foreign policy is alienating the rest of the world. Not only does this leave us isolated to pick up the cost of the foreign ventures, but it strains any desire by the rest of the world to help us out. We are in a bind. We probably ought to be raising taxes, but can’t in a weak economy, and Bush is so committed to tax cuts he would never reverse course, especially as his father’s responsible tax increase may have defeated his second term. Assuming Bush gets a second term and vigorously pursues the war on terror, we will be breaking new ground on deficits with unknown consequences. We have no trouble financing the exploding deficit at the moment, but suppose the economy picks up and there is demand for money. The right wing economists claim deficits have no influence on interest rates, citing the experience of the last year, but that is ridiculous, of course rising deficits influence interest rates. If the economy picks up enough to create demand for money, interest rates could go up rapidly. Then there is fiscal policy. A swing from a couple of hundred billion surplus to several hundred billion dollar deficit and interest rates going from over 6% to 1 1/4%, has merely succeeded in ending the decline. These numbers suggest that our problems are not the traditional ones. We are suffering a hangover from the greatest speculative blowoff of all time. Bush has no ideas for directly countering this drag. His only proposal is lower taxes, mostly for the upper brackets, under the theory they produce greater savings and greater investment, the old trickle down that lifts all boats. But upper bracket taxes were far higher during our years of greatest growth. There seems to be no connection between upper bracket tax rates and investment, it is a matter of opportunity, not tax rates. Good investments will find funding. With Wall Street having directed investment dollars down a rathole of sexy internet and non-earning high technology companies, and talked industries like utilities into idiotic diversifications, while the government acts like a spendthrift with low return weapons, we are not getting much return on capital. The apparent absence of good investment opportunity expresses the hangover of the speculative bust, and in time will correct, though less so than in the past because we are a mature economy. Not only are investors turned off by losses, the lack of investment opportunity in the U.S. is influenced by, to use one word where I mean many, China. We may be a consumer economy, I think the data is that industrial employment is only 15% of the total and industry makes up only 30% of GNP. It is a precious 30%, however, and the 30% is eroding. I wonder, what percentage of the products sold in Wal-Mart comes from abroad? And what is the trend? We bought a stock called Salton a few years ago. Salton has become the king of kitchen appliances, an original American business. GE, Westinghouse, Sunbeam, and many others in kitchen appliances, are disappearing, some of the brands names bought by Salton. Everything Salton sells comes from China, or a neighboring country. George Foreman grills, new innovative stuff, it all comes from China. Though undoubtedly included in our industrial base, Salton is not a manufacturer, it is a distributor of Chinese goods. We have been able to hold onto larger appliances like washing machines, ovens, and refrigerators, but GE is planning to get out, just as it did small appliances. Is there a message? Have you seen a U.S label on any item of clothing in recent years? Textiles, the foundation business of the industrial revolution, now going. We did save the automobile industry when it seemed headed abroad, so it isn’t a battle we must always lose, but we are losing. I feel the change when it comes to picking stocks. There is nothing exciting out there any more. I feel as if I am picking over the same old tired lists, looking for a stock whose only attraction is its price. Perhaps declining opportunity is why investors lost their head over internet stocks, though the absence of profits told experienced hands it made no sense. I recall visiting WD-40 thirty years ago when it had six employees and distribution only in the west. The opportunity was easy to see, the product was simple, and the manufacturing process was two men stirring a not very large vat in the back room. We hit a home run with Movie Gallery, but that was a special case of combining a weak market for small company stocks and recovery from a troubled period, allowing us in at an extraordinary price. There will be more of those, but how much better to find consistent growth companies. Movie Gallery has a couple more good years, but its market is tenuous, it’s not something to lock away in the safe deposit box. I see opportunity in health care, HMO’s for instance are very cheap, but the medical care area is in a crisis of rising costs, and HMO’s have not proven to be the hoped for answer. Being a price opportunist, I operate well in a flattish market, but I hoped a major bear market would allow us to get into solid long term situations in my old age. Drugs, maybe, but the growth rates are skidding and they are coming under more and more pressure because of runaway health costs. Remember how drugs plunged under the Hilary threat in 1993 and 1994? Well, we are going to end up with a Hilary-like plan to control medical costs (though not under Bush). Considering everything, I think it will be a break if the market follows the hinted direction and goes a lot lower. Then we can get the opportunity to make real money before I lose my eyesight. Maybe I should become an expert on China, but its too late to teach an old dog new tricks. Besides, those guys who claim to know all about foreign stocks don’t do as well as I do. I have been too gloomy lately. Next month I will write about the good stuff. I smell a good year out there, if I can avoid losing too much of your money first (we are off 4-5%, not bad considering that our companies are issuing one bad news bulletin after another, though discouraging with a 30-35% cash position and another 20% in conservative high dividend payers).

Monthly Commentary – March 2003

My work tells me the market is not going anywhere, and if it does the direction is likely to be down. We are probably in one of these extended flat periods that can serve as an alternative to a gut wrenching bottom. I hope so, but what is the evidence we may go down? First, this appears to be a major bear market in the category of 1929-1932 and 1973-1974. Such declines are marked by major changes in the economy and the way the investors perceive equities. So far there is evidence of important change in the economy, though it is probably not yet reflected in stock prices, but investor perceptions have barely begun to adjust. The lack of attitude change is reflected in the way high technology stocks lead every rally, even though their earnings remain terrible and pricing high. High tech products continue to sell well, Dell for instance is selling more computers every year, but profits are down. That is not the magic formula to success, but you would not know it from the price of Dell's stock. Wall Street thinks it is 1994, with its strategists recommending high equity exposure, and cash in mutual funds at low levels. Investors are waking up, but their minds are still influenced by Wall Street bulls. Bull/bear opinion statistics are positive (heavily bearish), but the all day stock market show has a parade of money managers selling the bull case. Mixed into the bull crowd are a few quiet bears. I suppose it is because I share their point of view, but these people sound thoughtful and intelligent, while the bulls sound like they are pushing stocks for a living. It is also comforting to have Warren Buffett and John Templeton in your corner (maybe you have to be seventy and have gone through a previous secular decline to get a feel for these things). The consumer held the economy together, but now consumer support is weakening. The downtrend in consumer sales gains has not reached zero, but getting close. It could weaken further with employment numbers making no progress and an indication consumers are tightening their pocketbooks because of worry about the future. Some of this tightening is from necessity, revealed in high and rising credit card and other consumer credit delinquency. The buying inspiration from no interest loans is old hat now. More directly, the great mortgage refinancing boom that injected hundreds of billions into the economy in the last two years appears to be over. Lower long term interest rates would extend refinancing, but that is likely only if the economy weakens, so the medicine is worse than the cure. Experienced hands have an uncomfortable feeling about the strength in housing. Every instinct says it can't last. Enthusiasts say there is no housing bubble, but if not a bubble certainly a boom. If it ends, important support for the economy is removed. Some of the housing boom comes from conversion from apartment living, but apartment vacancies are rising and rents falling, so the mathematics is working against the trend. An end to the housing boom could mean trouble because, not only would the money coming out of refinancing disappear, but prices are likely to weaken, reducing the wealth affect and discouraging consumption. Housing will probably level off or slump a bit, not a catastrophe, but adding to the sluggishness of the economy. The dollar is going to weaken further, perhaps substantially. The happy folk say that is great because the trade deficit will ease as foreign goods rise in price and domestic products become more competitive, but the dollar is already off a lot and the trade deficit continues to rise (many far east currencies, notably China's, are pegged to the dollar). The trade deficit guarantees that foreigners will be getting a large dollar inflow, but the weakness is leading to unloading those dollars. Our image as the land of opportunity has gone up in the smoke of internet and high technology disintegration. The exploding deficit is not a confidence builder, and our fecklessly aggressive foreign policy is alienating the rest of the world. Not only does this leave us isolated to pick up the cost of the foreign ventures, but it strains any desire by the rest of the world to help us out. We are in a bind. We probably ought to be raising taxes, but can't in a weak economy, and Bush is so committed to tax cuts he would never reverse course, especially as his father's responsible tax increase may have defeated his second term. Assuming Bush gets a second term and vigorously pursues the war on terror, we will be breaking new ground on deficits with unknown consequences. We have no trouble financing the exploding deficit at the moment, but suppose the economy picks up and there is demand for money. The right wing economists claim deficits have no influence on interest rates, citing the experience of the last year, but that is ridiculous, of course rising deficits influence interest rates. If the economy picks up enough to create demand for money, interest rates could go up rapidly. Then there is fiscal policy. A swing from a couple of hundred billion surplus to several hundred billion dollar deficit and interest rates going from over 6% to 1 1/4%, has merely succeeded in ending the decline. These numbers suggest that our problems are not the traditional ones. We are suffering a hangover from the greatest speculative blowoff of all time. Bush has no ideas for directly countering this drag. His only proposal is lower taxes, mostly for the upper brackets, under the theory they produce greater savings and greater investment, the old trickle down that lifts all boats. But upper bracket taxes were far higher during our years of greatest growth. There seems to be no connection between upper bracket tax rates and investment, it is a matter of opportunity, not tax rates. Good investments will find funding. With Wall Street having directed investment dollars down a rathole of sexy internet and non-earning high technology companies, and talked industries like utilities into idiotic diversifications, while the government acts like a spendthrift with low return weapons, we are not getting much return on capital. The apparent absence of good investment opportunity expresses the hangover of the speculative bust, and in time will correct, though less so than in the past because we are a mature economy. Not only are investors turned off by losses, the lack of investment opportunity in the U.S. is influenced by, to use one word where I mean many, China. We may be a consumer economy, I think the data is that industrial employment is only 15% of the total and industry makes up only 30% of GNP. It is a precious 30%, however, and the 30% is eroding. I wonder, what percentage of the products sold in Wal-Mart comes from abroad? And what is the trend? We bought a stock called Salton a few years ago. Salton has become the king of kitchen appliances, an original American business. GE, Westinghouse, Sunbeam, and many others in kitchen appliances, are disappearing, some of the brands names bought by Salton. Everything Salton sells comes from China, or a neighboring country. George Foreman grills, new innovative stuff, it all comes from China. Though undoubtedly included in our industrial base, Salton is not a manufacturer, it is a distributor of Chinese goods. We have been able to hold onto larger appliances like washing machines, ovens, and refrigerators, but GE is planning to get out, just as it did small appliances. Is there a message? Have you seen a U.S label on any item of clothing in recent years? Textiles, the foundation business of the industrial revolution, now going. We did save the automobile industry when it seemed headed abroad, so it isn't a battle we must always lose, but we are losing. I feel the change when it comes to picking stocks. There is nothing exciting out there any more. I feel as if I am picking over the same old tired lists, looking for a stock whose only attraction is its price. Perhaps declining opportunity is why investors lost their head over internet stocks, though the absence of profits told experienced hands it made no sense. I recall visiting WD-40 thirty years ago when it had six employees and distribution only in the west. The opportunity was easy to see, the product was simple, and the manufacturing process was two men stirring a not very large vat in the back room. We hit a home run with Movie Gallery, but that was a special case of combining a weak market for small company stocks and recovery from a troubled period, allowing us in at an extraordinary price. There will be more of those, but how much better to find consistent growth companies. Movie Gallery has a couple more good years, but its market is tenuous, it's not something to lock away in the safe deposit box. I see opportunity in health care, HMO's for instance are very cheap, but the medical care area is in a crisis of rising costs, and HMO's have not proven to be the hoped for answer. Being a price opportunist, I operate well in a flattish market, but I hoped a major bear market would allow us to get into solid long term situations in my old age. Drugs, maybe, but the growth rates are skidding and they are coming under more and more pressure because of runaway health costs. Remember how drugs plunged under the Hilary threat in 1993 and 1994? Well, we are going to end up with a Hilary-like plan to control medical costs (though not under Bush). Considering everything, I think it will be a break if the market follows the hinted direction and goes a lot lower. Then we can get the opportunity to make real money before I lose my eyesight. Maybe I should become an expert on China, but its too late to teach an old dog new tricks. Besides, those guys who claim to know all about foreign stocks don't do as well as I do. I have been too gloomy lately. Next month I will write about the good stuff. I smell a good year out there, if I can avoid losing too much of your money first (we are off 4-5%, not bad considering that our companies are issuing one bad news bulletin after another, though discouraging with a 30-35% cash position and another 20% in conservative high dividend payers).

China

China FlagIn the years since the Communist Revolution, the public face of China has been very difficult to read. Politically and economically, it has appeared at once uniform and homogenous, standing by a staunch Maoist line and keeping all non-oldguard ideas at bay, as well as open and curious about western capitalist opportunities, modernism, diversity, and cooperation. In the west, China has been viewed as somewhat of an enigma: suppressing freedom of expression and communication (the Chinese government is infamous for extreme censorship of any and all media), openly violating globally accepted standards of human rights while claiming ignorance or slander, and military posturing that is meant to discourage nations such as the United States from looking too closely at what goes on behind their closed doors; all the while urban Chinese are quickly embracing modern technoloy and communication methods such as the Internet, cities have turned into boomtowns where everything is for sale, and the Chinese government has made efforts to draw in western industry and capitalize on business and growth that would send them in a direction opposite the Communist ideals of Chairman Mao and his Cultural Revolution. For many thousands of years, the Chinese culture has been one of walls. Finished in the earliest days of unified China--during the Qin dynasty--the Great Wall literally surrounds much of the nation. This is more symbolic than functional, but the years since its completion have seen many more political and cultural barriers built, intended as much to keep Chinese pride and culture in as they are to keep the western world out. The age of colonialism came early for China, as armies swept across much of Southeast Asia conquering lands for their emperors. But as of the sixteenth century, westerners began knocking on China's doors in droves--beginning with the Portuguese, in 1516, and soon followed by the British, French, Americans, Germans, Russians, and more. So many outside China Mapnations wanted a part of China that they literally divided up the country among themselves into "spheres of influence." This was the beginning of the economic pillaging and a cultural oppression that eventually led to such calamities as the Opium Wars, America's "Open Door" policy, the Boxer Rebellion and China's civil war, and finally to the Chinese Communist Revolution itself. A smaller nation than before (although, at roughly 1 million square miles, still huge by any account), with a much larger population, weaker economy, and rash of environmental and other problems to face, China is now making some efforts to align itself with western policies, without totally abandoning the Communist foundations upon which modern Chinese culture is based. As China tip-toes into new-world economics, and as the voices of dissent begin to grow too loud to ignore, it will be very interesting to see if this ancient and great culture evolves from being defined by walls, to being identified with its openness and eagerness to join the modern world. Traveling in China Visas are required by all foreigners to enter mainland China, with the exception of a 24-hour reprieve for anyone with a ticket for a connecting flight out of the country. Visas can be gotten from Chinese consulates and embassies in most countries. Currently, a visa is not required for western nationals to enter either Hong Kong or Macau. The environment in China is varied--from the soaring and snowy Himalayas to the flat plains of the Yangzi River valley and the Inner Mongolia Plateau. The most dramatic region of China, from a geologic point of view, is arguably the Yunnan-Guizhbou Plateau in the southwest. Here, the limestone bedrock has been carved away by the elements, creating jaw-dropping waterfalls, underground caverns, and gorge rapids to make the most expert river runner nervous. Unfortunately, because of over-population, pollution, and the effects of stripping the land for agriculture, many of China's indigenous species are either endangered or extinct. The few that remain, however, include some of the world's most appreciated--including the panda, snow leopard, yak, and elephant. Plant life has suffered as well, though not quite as much as fauna; the northern subarctic region is home to China's largest forest, and the steamier south has more diverse plant life in its rainforests. The bottom line is, this is a country of more than a billion people; under the pressure of such a huge population, and without the govenmental or economic support needed to encourage conservation, much of China's potential for ecological wealth has been destroyed. Health risks include rabies, bilharzia, dengue fever, malaria and cholera. Immunization against cholera, hepatitis A and B, Japanese encephalitis, polio, rabies, and typhoid is necessary before going to China. Weather in China Weather is China varies greatly, as expected in a country of its size. Most people visit in the spring (March through April) and fall (September through October), when average daytime temperatures range from the mid-60s to the mid-80s (in degrees Fahrenheit). This is, however, the hottest time of year in the south, and coincides with typhoon season along the southern coast. It's best to do your research according to where you'll be and when. Otherwise, it is very difficult to try to predict weather for the entire country. People's Republic of China Informaton Population: 1.25 billion Government: Communist republic Square Miles: 9,596,960 sq km (mainland) Capitol: Beijing (pop 13.8 million) Official Language: Putonghua (Beijing Mandarin dialect), Cantonese People: Han Chinese (93%), plus 55 ethnic minorities Religion: Confucianism, Buddhism, Taoism (no stats available); Muslim (14 million), Christian (7 million) Major products/industries: Iron, steel, coal, machinery, textiles

An American Aristocracy? – March 2003

In trying to figure out why George W. Bush bothers me so, I may have found the answer in the book, Founding Brothers. Adams and Jefferson had years of correspondence after retirement and in discussing the differences between the U.S. and Europe they got into an argument over aristocracy. Both believed that superior people must provide leadership, but Adams leaned toward the idea that ability was inherited and Jefferson thought the cream would rise to the top in a free society regardless of inheritance. Of course, Jefferson’s view is the heart of democracy and it made this country, but in their day the ability of a common man to rise from nothing had not yet been demonstrated. The Virginians, especially Washington, Jefferson and Madison, were of the landed aristocracy, if not so much by inheritance as by force of personality and rich wives. Washington appears to have taken on imperial airs as president, but his deeply felt sense of justice and common sense made him a true democrat. Ironic that the Boston (Adams) view is pro-aristocracy, but it makes sense: Adams was the only founding father with a son, who later became president. Both Adams’ were among the least successful presidents (both were one termers). My discomfort with Bush arises out of experiences in school with those I call "WASP elites". Some elites were smart and had a lot on the ball, but their attitude of entitlement made them ill-equipped to govern in a democracy. My partiality does not eliminate everyone. Jim Baker, a Princeton classmate, was definitely a WASP elite, Texas version. Baker, though, is different. I don’t know how he got into running campaigns, but as I recall he first emerged running Ford’s reelection, then Bush’s run in 1980. Both were defeats, Bush’s leaving his supporters with an empty feeling. He acquired the designation "wimp" out of that campaign. Despite these failures, Baker so impressed his rivals that he was invited to run Reagan’s campaign. Then as part of a triumvirate in the White House chief of staff position, he rose to the sole post, even though the other two were Reagan cronies. He then maneuvered himself out of the White House into Secretary of the Treasury in the second term, ran Bush’s successful campaign, then got State. Bush’s wife blames the second term loss on him for not taking charge of the campaign from the beginning, indirectly a huge compliment to Baker. Then Baker masterminded the stealing of the 2000 election for his old friend’s son. This is a wildly successful man whose proven ability easily overrides my objection to WASP elites. So, what is the difference with Dubya? It starts, appropriately, with father. He earned the wimp label, despite flying off aircraft carriers, phi beta kappa, success in business, and an amazingly varied career of important appointments. When he got the leadership of the country he came across as a nice guy, but weak. His great triumph, the Iraq War, turned to nothing by an unwillingness to follow through and throw out the most oppressive dictator in the world outside Africa. I still recall discovering with amazement during my St. Paul’s reunion in 1993 that a majority of my class had voted for Clinton (more class members went to Yale than any other college, as well). They had a kinship with Bush and he didn’t come across as a winner, so they voted against him. Now we get sonny boy, unlike his father a man of no accomplishment (if you can say that of someone winning the biggest prize in the world) and who indeed appears dumb. Partly it is father. If father didn’t have it, why should son, who seems a man of much less ability and certainly much less experience. Son is a better politician and a forceful schmoozer, but can you make a presidency on those talents? After reading the book, my feeling developed around the Jefferson/Adams exchange over aristocracy. The trouble with Europe and the rest of the world, the reason we ended up on top, is that we don’t have aristocrats and are led by men who rise on the basis of merit. There is no inherited station in this country. Yes, there is inherited wealth and Rockefellers and Kennedys did become successful political leaders, but they are the exception and the Kennedys would not be considered aristocrats. Money undoubtedly did it for them and money does talk in this country, but these families produced outstanding individuals. Aristocrats in the old world originally earned position through ability, but after generations passed and the successors retained position without ability, aristocrats dragged down those countries. In Dubya I think we have an aristocrat who didn’t in any way earn his position. He got there purely and simply because of his father. Papa had a senator father, who was apparently a very forceful figure, but Bush Sr. did make it on his own. His route to the presidency was a strange one: almost 20 years of appointed positions of stature (first envoy to China, UN envoy, head of the CIA, vice president), in none of which he made much of an impression. If his resume is strange in the variety of appointed positions, it is still remarkable. Dubya, on the other hand, would probably have been a total loss without father: no Yale, no Harvard Business School, no Texas Rangers, no governorship, no presidency. He is just another good time Charlie, probably a broker in the Houston office of a Wall Street firm. And that, I think, is what bothers me about W. We don’t want sons of aristocrats as our presidents. It is a sign of a weakening nation. On the subject of aristocracy, Adams names five pillars: beauty, wealth, birth, genius, and virtues. To me W qualifies only on birth. These qualities may provide a clue to the visceral hatred of Clinton. The president by his very position becomes an aristocrat. In Clinton’s case, he wins on beauty and genius, perhaps the two qualities most likely to provoke jealousy. He failed on wealth, birth and virtue, which led to an almost pathological hatred among those who consider themselves aristocrats. They could not accept such a man as one of them. Since he was an impostor, they felt justified in sleezy maneuvers to bring him down. The sense of entitlement among American aristocrats may actually have won the election for Dubya. The anti-Clinton ardor among the elite got them to thinking that any means were legitimate to win. This sentiment slipped over to Gore, whose great shortcoming as a potential aristocrat is an absence of beauty (even Tipper got fat, taking away some of his cover). I could never have imagined anyone attempting to win an election restricting the vote, as the Republicans did. I also could not have imagined that the Supreme Court would intervene decisively where they did not belong and endorse the act of restricting the vote. Baker, on the other hand, understood that enough justices felt they belonged to the aristocratic elite and shared the anti-Clinton/Goreism. Thus, he had the vision to push on to the Supreme Court despite being summarily rejected in Florida and the regional federal courts. Visiting this subject raises the question of whether we may be developing a wealthy positional aristocracy. Dubya himself is the best example. One of the foundations of an American aristocracy is elimination of the inheritance tax, something the new president is passionate about (noteworthy for a man who is not passionate about much). Recently, I heard a far-righter say, “I challenge anyone to find a justification for the inheritance tax.” The justification is to reduce the possibility of creating a moneyed aristocracy in this country. The proliferation of $100 million and up individuals may pose a problem in the future, for a 55% tax on a billion still leaves $450 million. Many of the very rich I have known share my feeling. The foremost example is Warren Buffett, who points out the critical role the estate tax plays in promoting economic growth by helping create a society where success is based on merit rather than inheritance. He is fearful that leaders will be created by money rather than competition. "Without the estate tax you in effect will have an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit". One of the most interesting developments of Bush’s stand on eliminating the inheritance tax is the banding together of a group of wealthy people to speak out against the proposal. This is a matter that both expresses Bush’s aristocratic viewpoint and his political incompetence at the policy level. He sees what is beneficial to him as good for everyone, when his interests are far apart from what helps the man on the street. He just does not get it when it comes to his personal prerogatives and in the end that is likely to bring him down.

Bombay Stories

Editor's Note: Marshall Schoenthal is a Washington, D.C.-based manager for a technology company, living in Bombay, India, for one year. The following travel log aims to illustrate not just elements of Indian culture, but also the thoughts and reactions of a twenty-something Westerner transplanted into a new and different world. We hope to offer regular updates from Marshall in the coming months.Wednesday, March 26, 2003 Folded Laundry (notice the tag)Not much to talk about today other than work, which continues to be busy. We have landed a couple of new project that require us to hire some new people (always a challenging task, especially here). Daily life is what continues to fascinate me. I got back my first load of laundry last week. Although my mother at an early age did a good job with laundry and my old roommate would sometimes fold my clothes, I have to say I enjoy the service here. Having everything done for you does not come without a cost. First of all, not everything comes back, and sometimes you get someone else’s clothes. Secondly, everything gets tagged which requires a hole to be punched in all your clothes. This hole is not reused--the next week a new hole is punched. While the holes themselves are small, I expect most of my clothes to be left in Mumbai at the end of the year. I have not seen the cleaning process but it is supposed to be quite amazing. Sunday, March 23, 2003 Sunday was spent touring Bombay. We walked around the Gateway of India, built to commemorate the visit of King George V and Queen Mary to Bombay. Then we went to get some good bargains. I decided to buy a 1914 brass compass build by the Brinton Compass company. This would have been great if there was such a thing as "Brinton Compass," it is actually the "Brunton Compass" and the one I have was build in India, not England, in 2001. Oh well, lesson learned. Sunday night my roommate and I avoided our apartment while 15 guys from the office watched India get crushed by Australia in cricket. Needless to say they left rather disappointed. Saturday, March 22, 2003 Bombay Royal Yacht ClubI have come to terms with the general idea that nothing is the same in Bombay as in the rest of the world. Saturday was the day I had been looking forward to. Getting out on the water, having a couple of races, drinking some beer and enjoying time away from the office. Although I enjoyed the day immensely, it was not the same as a day back at Fishing Bay. The best way to explain the differences is to just go step by step through the day. Pre-Race Activities Prior to leaving the club, there was the typical amount of confusion, "Where is my crew?", "Where is my boat owner?", "Do we have water?", "How many races?" etc..., but this is where most of the similarities stop. First of all, I didn't have to run to the store for my bottle of water, I purchased it for 10 rupees (20 cents) at the club. After getting all my needed supplies, we walked over to the Gateway of India to be taken out to our boat in the launch. Stepping on the boat I was a little nervous, I figured the J-24 would be in horrible condition. What I forgot is that it cost next to nothing to have someone take care of your boat full time. The deck was spotless and down below looked like it was right out of the box (no mold, no pool of water, no smell of stale beer and two-year old bag of chips). The sails (softer than my bed sheets) were already on the deck, everything was rigged up, and we were ready to go sailing. Sailing Racing would include six five-leg races on a triangle course with the longest leg taking no more than ten minutes, each race was over in thirty minutes. With only three J-24s on the line the starting strategy was simple stay away from the other two boats who decided they would rather match race each other. The other three guys on the boat had not sailed together very often so crew work left a little to be desired. I worked the fore deck which kept me away from what I figured would be the yelling in the back of the boat. This didn't happen. Confrontation is not a big thing with Indians, so even when we hit someone or someone hit us, very little was said and no protest flags were flown; everyone just did their turns without saying a word. It was strangely civilized. We had a good day of racing with one 1st, three 2nds, and two 3rds. Lunch was not on the boat and I figured that I would just go hungry. I was use to not having much food on a boat so this was not a big deal. But after the third race, we were approach by the lunch boat that gave us our sandwiches and drinks. After racing I started to make up lines and roll sails, but was told to wait until we had the boat boy help us. Post Sailing Activities After a day of sailing in the hot sun, I was excited to relax at the club and have a couple of cold King Fishers (a popular Indian beer). This did not happen. We had finger sandwiches and tea. Again very civilized compared to my States-side sailing experiences, but something I think I will work on changing over the next year. The awards ceremony was put on hold until Monday night because racing and the Sunday night party had to be cancelled due to the World Cup Cricket match. Overall it was a great day on the water, with great people. Friday, March 21, 2003 I finally left the office early to have drinks with Cyrus who is helping me get a temporary membership to the yacht club here. Although I arrived in Bombay toward the end of the sailing season it will still be good to have a place to relax... While out with Cyrus, I was asked about Iraq; I responded with "What time does the sea breeze usually pick up?" Thursday, March 20, 2003 Prior to departing for India, I had resolved that the War in Iraq was the last thing I wanted to discuss. Not that I was tired of hearing about it, or that I did not care, but I felt that it was a conversation that would cause tension with my host and colleagues. I have done my best to hold to this principal. Back in Washington [D.C.], you get tired of everyone talking about the last "happening," be it the latest election or the president's actions. While it is enlightening to watch current events from the other side of the world as a minority in a foreign country, I will say, I miss the opportunity to debate and argue. Most people here have been interested in my thoughts on the Iraq situation, and on the U.S. in general, but I continue to avoid heated discussions. I look forward to learning from living abroad during this period in time. With that in mind, I must say, I think Martin Sheen, is completely wrong. In his Op/Ed in the Los Angeles Times, recently, he stated: "And although my opinion is not any more valuable or relevant merely because I am an actor, that fact does not render it unimportant. Some have suggested otherwise, trying to denigrate the validity of this opinion and those of my colleagues solely due to our celebrity status. This is insulting not only to us but to other people of conscience who love their country enough to risk its wrath by going against the grain of powerful government policy. "Activism by celebrities does carry added responsibilities. Statements, demonstrations and marches that include public figures undoubtedly receive a measure of press, providing access to a stage that others often cannot reach. As a result, we are often called to give voice to the voiceless and a presence to the marginalized." I feel that Sheen is misguided in why his opinions are broadcast around the world. It is not because he is a voice for the voiceless, but solely because he is an actor who plays the role of the president of the United States on television. The voiceless do have a voice, it is called a vote. Sheen was not elected by the "voiceless" to speak for them, he was given a pulpit it speak because he is an actor on a highly rated television show. If Sheen so desires to speak for the voiceless then he should run for office, if successful then he deserves to speak for the masses. Until this time he should speak on issues he is knowledgeable about and for people he represents: actors, actresses, producers, television and movie studio executives, etc... Just my thoughts...I will return to telling stories of the culture and of places I see. Tonight I am having drinks at the Bombay Royal Yacht Club with the commodore, hopefully they will let me join. Tuesday, March 18, 2003 Holi--I had no idea what this was until today. I will say that I was warned by everyone in the office not to go out or I would be hit by water balloons, shot with water guns, and have colored powder dumped on me. Waking up this morning I didn't think much about it, but Mike my flat mate was already gone. Thinking that he had some inside info, I hurried to get to the office before the celebrating began. The ride to work was the most pleasant of my stay here, few cars on the street, less smog, fewer people, etc. Arriving in the office, I joked with Mike that everyone had overblown the extent of this celebration. Holi Celebration all over usLooking out over the city we saw very little going on. We had expected to see mass water and color fights, drinking, basically I wanted to see the Mumbai version of Mardi Gras. Getting back to work, we figured we had escaped Holi. We had not... Fraser (the head of the office here) would not let us be in India without, as he said, getting a little color. Here is the outcome. I am waiting at the office for a videoconference, looking forward to the reaction of my clients in London, when they see me covered in color. The security guards in the office are having a great time laughing at the foreigner who now has a little color. Monday, March 17, 2003 I finally was able to go out on my own yesterday. Since I arrived, everyone has been great, taking me to lunch, driving me home, helping me buy a phone, etc. So it was nice to just walk around Bandra for a couple of hours and see if I could make it home all by myself. I will say that it was different being alone, I was much more aware of what was going on around me especially when I was "attacked" by a gang of Indian kids. Attacked is a strong word, but it was the first real shock of the trip. While standing at a corner trying to figure out how I was going to get home and looking completely lost, I was suddenly hit by about a cup of water. It only hit my leg so I didn't really think much of it. When the next water balloon hit my hip, I started to think, Does the flight leave for D.C. at 10 or 11 A.M.? Once I heard the laughter of children, I understood that I was just the subject of their good fun. I finished my walk home feeling proud of such a small accomplishment. Sunday night I finally met some people outside of work. The two girls among the group who I had some association with have a company called Diva Make-up that does make up on "Bollywood" movies. I felt like I had it easy when I arrived compared to their journey. I was picked up at the airport, shown a place to live, given a desk at work, and basically cared for. Virginia and Lindsey essentially came over here and figured it out on their own, so while I might be adventurous, I am not in the same league as a lot of people. Anyway, I had dinner with them, talked about the culture shock that I am supposed to be going through, the war (not something I tend to ever bring up), life in Mumbai, differences between here and the U.S., etc. It was nice to finally talk about something other than project plans, testing resources, JAVA code, and delivery dates. I also had my fortune read with tarot cards, the end conclusion is my past was not that great, but the future is looking bright. Lindsey started to read more into it, but I felt that I should leave it simple. Sunday, March 16, 2003 Friday night was spent with some of the guys from the office at Janta, which was described to me as a bar. It was more like the Indian version of the "He-Man Woman-Haters Club." Basically this was a room of tables for men to sit around, smoke, and drink. Not only were there no women in the bar, but no woman had ever even thought of going there. Otherwise, it was basically the same experience you have anywhere, coworkers sitting around griping about work and making fun of each other. I went home early. Saturday, was my first trip to South Bombay. The purpose of the trip was for me to go sailing with some guys from the Royal Bombay Yacht Club but this didn't go so well, because we were a little late getting started, so I didn't make the start of the race. I did get a tour of the yacht club and it is very nice--exactly what I would imagine from a club built by the British over 150 years ago. I am supposed to talk to the commodore of the club next week about membership and racing in their J-24 match race next weekend. Hopefully this will work out and I will be sailing soon. We had lunch at Leopold's, a well known dining spot in Bombay. I could tell that this was more of a tourist spot than Bandra, many more western people walking around. Didn't do much Saturday night other than cook up some sausage and eggs to get my stomach back on track. Friday, March 14, 2003 So I went out for the first time last night, a place called Olives - basically the "Daily Grill" [Washington, D.C. restaurant] of Bandera (this is the pop.1,000,000+ suburb that I live in). As Rakshit (a friend of mine from work) said, this is not India. Other than everyone being Indian, it could have been any bar in the U.S., except I only spent $10 for five drinks and was "angry" that it cost so much. Tuesday, March 11, 2003 Bombay (Mumbai), IndiaWhen I arrived in Mumbai Sunday at 2 A.M., the only way the guys from my office found me was to look for "the guy who looked the most lost"--that was me. After a nine-hour flight from London with a horrible hangover, sitting next to a smelly Frenchman who knew nothing about arm rest etiquette, I was ready to be anywhere but on that plane. My stay in India started with a very traditional Indian cultural event, drinking beer until 5 A.M. Saturday was rather simple, wait for someone to pick me up, get lunch, buy a mobile phone, have dinner, and sleep. Since Sunday, I have done nothing but work and sleep (my priorities are out of whack). If you want my initial opinion of Mumbai (otherwise known as Bombay), it is exactly what people told me. Bigger, dirtier, more polluted, with more people than any city you have ever visited. What nobody told me what that it is inhabited by mad rickshaw drivers who drive right at you before swerving at the last minute. Stores smaller than a 7-11 have more stuff than a Super Wal-Mart. When you try to do things like get your own water in the office, people look at you as if you’re mad. Finally and most importantly, the people here put "Southern hospitality" to shame. Nobody will let me eat alone, much less take a rickshaw home alone. All in all, the first couple of days have been sensory overload, but I think it is going to be fun (if I can get away from work).

Capturing the Human Spirit: Thoughts and Images from the 2002 Salt Lake Winter Games

Photographs by Jamie Schapiro









As spring of 2003 begins, I find myself looking back to a year ago, when the Salt Lake Olympic Games were coming to a jubilant close. It was a period of great pride for me to witness representatives from around the world coming together in the spirit of competition, friendship, and humanity. I remember the moment I learned that Salt Lake City would be hosting the 2002 Olympic Winter Games. It was the summer of 1995 and just thinking about a new millennium was daunting, much less a millennium that would begin with the celebrations and excitement of these games in a place so familiar to me. At that point I did not realize that, when the games began almost seven years later, they would provide an opportunity for my entire family to come together and, more poignantly, a chance for our country to begin recovering from one of the greatest tragedies it has ever suffered. I am fortunate to be a part-time resident of Park City, Utah--not far from Salt Lake City--and there was never any doubt that my family would be present for the Olympics; however, I could never have guessed that my brother, photographer Jamie Schapiro, would have earned the perfect vantage. After a seven-year bout with the professional world in San Francisco, Jamie decided to quit his job at a dot-com in the beginning of 2001 and spend eight weeks traveling in New Zealand. He bought a car, slept in a tent, and rediscovered his true passion for photography amid the sweeping glaciers, snowy peaks, herds of sheep, and fresh Kiwi air. Upon his return that April, Jamie decided to establish himself as a professional photographer, unaware that the opportunity of a lifetime would come to him less than a year later, when he was offered the position as one of three photographers hired by the Salt Lake Organizing Committee to capture the "human element" of the 2002 Olympic and Paralympic Winter Games. As it turned out the games were much more multidimensional than I anticipated. The footage on television hardly addressed the myriad of cultures that meshed together in Salt Lake that winter. At every event, fans frantically waved flags from dozens of nations, cheering for skiers from traditionally underrepresented countries like Sri Lanka and Bermuda. Every emotion imaginable could be seen in the faces of the athletes and the spectators. Volunteers in their yellow uniforms, and their National Guard counterparts greeted everyone with a smile and a wave of their metal-detecting wands. Kids from around the globe jumped together over an Olympic fountain in Salt Lake, while others swapped pins at the Coca-Cola trading posts. The games were truly a joining of people: different backgrounds and cultures were not ignored but celebrated, and as this small section of the United States quickly transformed into a global community, everything seemed to be underscored by ideas of liberty and acceptance--ideas that, to me, represent cornerstones of American culture. Somehow Jamie managed to catch every nuance that made the 2002 Olympic Winter Games so extraordinary. One of the benefits of attending the games was being able to share them with my family. Jamie, however, was often hard to find. He would stay out late, setting up his equipment on building tops to get shots of Salt Lake City in its limelight, then wake up early the next morning to capture a glowing sunrise over the Rockies. We would hardly go anywhere without stopping to wait for him as he photographed the lines of buses or hundreds of practitioners of Falun Gong meditating on the side of the road in peaceful protest to the Chinese government’s censure of their beliefs. Nevertheless, what often seemed a too-hasty shot nearly always turned out a fitting example of the human element at that moment, and one you would barely have noticed had it not caught the corner of your eye. If a picture speaks a thousand words, Jamie’s photographs tell a story all by themselves. They speak neither of controversy nor of victory, but simply of humanity. This month, Travel Outward is exhibiting a selection of Jamie’s photographs from the 2002 Salt Lake Winter Games. Those interested in learning more about his work, or purchasing prints can do so at http://www.jamieschapiro.com.

Two Worlds, One Dubai

Dubai’s financial districtIn 2001 my boyfriend and I traveled to the United Arab Emirates (UAE) to visit a friend who had been working there since 2000. Realizing an opportunity to tour this unique Arab nation with someone who knew his way around the place wouldn’t come again soon, we began the tedious process of obtaining visas and invitations from what would be our host country for a few weeks that winter.We arrived in Dubai, one of the seven emirates in the UAE, after stopping in Zurich and Saudi Arabia. What we found was a city that seemed to grow even in the short time we were there. Dubai is an emerging tourist destination and apparent refuge for expats in the heart of the Middle East. At its core, it is a symbiotic blend of opposites: camel races occur every Friday, women are veiled, the ruling Sheikh Maktoum bin Rashid Al Maktoum has six wives (but only five palaces), and drinking alcohol is forbidden if you are Muslim; yet cell-phone-talking, sports-car-driving nationals proliferate in this city where some of the most daring and original examples of modern architecture--including the Burj al Arab, the ambitiously tall hotel that towers over every other hotel in the world--stretch skyward in defiance of old ways. Presumably the significant expatriate population, combined with Dubai’s openness to visitors makes it a city with a consistently malleable personality. Sun-lit mosqueWhen I woke up the first morning, groggy and out of sync with the inordinate amount of sunlight streaming into my room, I was immediately awed by how well tradition merged with an unceasing desire to be modern. At first I was jarred--though, eventually calmed--by the sound of a nearby bell ringing. I looked out the window and identified the source of this sound: a beautiful, tall mosque with delicate minarets perched atop round foundations. A moment later, I witnessed a Ferrari racing past our building. It took a few days, but I quickly grew accustomed to this juxtaposition. Dubai has built an aggressively modern city while clinging to important traditions. Religion, predictably, has a prevailing influence. The call to prayer is itself meditative, as bells chime men and women throughout the city toward their religion five times daily. Since non-Muslims are not allowed inside places of worship, I could only peer in after the devout dozens unbuckled their sandals and entered to pray. Perhaps the mosques retain their mystery that way--I am unable to imagine what exactly draws the majority of a country inside to prayer and meditation each day, and while the answer may not be found within those hallowed walls, admittedly, I found myself curious for a look. Shoppers at a soukThough the mosque was off limits, I could explore the rest of the city freely. Dubai expands along both banks of a long and famous creek, and its central business district is divided into two parts: Deira on the northern side of the creek, and Bur Dubai to the south. Each side is full of mosques and busy souks (markets), impressive buildings, shopping malls, hotels, schools, and residences. Outside this center, the city extends to the neighboring mercantile emirate of Sharjah to the north, and south and west along the Gulf, through the more conservative emirates of Abu Dhabi, Ajman, Umm All Quwain, Fujairah, and Ras Al Khaimah. Each emirate has a distinct personality, and Dubai is the most westernized and open to tourists.
The advantage to traveling in Dubai is that Westerners are rarely excluded. Female tourists need not don burqas, nor must they confine themselves to certain areas of the city. I explored every corner I could. Dubai is earnest in its invitation to tourists, particularly Europeans, with the hope of establishing a livelihood that will last when the oil runs out. However, their openness does not always lead to comfort. To explore the business district of Dubai, I first had to take a flat, barge-like boat, called a dhow, across the harbor. Each boat carried approximately 50 passengers, and I was the only woman each way. To step off the boat required several leg-stretching steps that made exiting in a skirt appear unavoidably immodest. These boats did not cater to women; women found little place in the massive, yet intriguing, new architecture that housed Dubai’s impressive list of foreign companies: HSBC, Merrill Lynch, and more. Across the creek and past these giants of architecture, one enters one of the larger shopping districts of Dubai. I happily skipped over the business area to explore these markets. Dhow crossing Dubai CreekHuge sacks of spices flank the walls of interconnected open-air markets. I loved this place. Strong smells of coriander and fenugreek wafted through as veiled women negotiated and wide-eyed tourists searched for unique souvenirs. In true Dubai fashion, markets found their opposite across town in huge modern shopping malls, boasting boutiques full of Chanel instead of coriander. Supposedly, the women in Dubai love to shop and wear designer clothes under their traditional dress, and if the sheer availability of designer wear is any hint, in addition to the number of gorgeous heels I saw poking out from beneath drab burqas, this rumor may be true. Compared to its neighbors, the UAE is not as restrictive of its women. Women can drive. They are educated. They sometimes hold jobs and are often not entirely covered. Men typically wear a white, loose-fitting garment that floats to the ankle, called a kandoura, or dishdasha. The women’s robes--or abayahs--are similar, but colored black. Men and women both wear head coverings (for men the gutra, for women, if it also protects the face, the burqa) ostensibly to protect them from the sun. The patterns and colors of the men’s head coverings reveal a man’s homeland, but a woman’s is simply black. Women in Dubai and throughout the UAE wear makeup and jewelry, and sometimes paint themselves with henna, in intricately beautiful patterns. I wish women in my family had such a custom. I grew up in a small town in New England; as a child, I wasn’t even allowed to wear eye shadow, never mind such detailed and artistic patterns in ink, painted all over my hands, arms, and forehead. It’s painstaking work to paint these designs; it takes time and great patience, which seem to translate easily in this special art. Though tradition does ground Dubai somewhat, it is a city that abounds in difference and choice. The people who live in Dubai come from all over, and the expatriate population, whether from Pakistan, Nepal, or Europe, comprises almost three-quarters of the total population. The variety of cuisine alone is indicative of Dubai’s diversity. While visiting, I ate Moroccan, Indian, Turkish, French, and I had some of the best sushi I’ve had anywhere. Part of Dubai’s uniqueness is in its variety--in its firm decision to be different and undefined by its Middle Easternness. Set just above the eastern part of Saudi Arabia, lying next to Oman, and barely bordering Qatar, Dubai is trying to reposition itself culturally, even if its geography is fixed. This attempt is evident in its welcome to foreigners, its call to McDonald’s and the Gap, and its leniency toward women. Yet, like other countries in the region, it remains strictly devoted to religion, traditional clothing, its monarchy, and its industry.
Dubai did not spring up overnight, though it sometimes feels that way. Although regional history dates back roughly to the Bronze Age, it wasn’t until the 1800s when Dubai--just a small fishing village at the time--was taken over by the same family who rules today (the Al Maktoum family); the majority of its development did not begin until the discovery of oil in the 1960s. But while its oil-rich neighbors may be a source of income for Dubai, the city’s reputation is first as a trade center--once rich in pearls, textiles, and gold, it is now a trading post for everything and anything under the sun. A port on the Persian Gulf just a short distance from Iran, India, and other headline neighbors, Dubai has always been a progressive trade center and importer, with some of the largest souks on the Gulf Coast. As trade developed there, merchants from nearby countries began to settle permanently in the area. This growth precipitated Dubai’s relationship with Great Britain as a preferred trade partner, and eventually protector (until the British left the Middle East in 1971), and led to its inclusion in the federation known today as the United Arab Emirates. The emirates prospered shortly after their coming together, due to the discovery of oil in 1966, which rapidly transformed everything about the UAE; but Dubai was able to keep hold of its place as the region’s "free-trade" center, where capitalism and opportunity reign. Remnant of a wind towerDubai entered its current period of swift growth in the late 1960s and early 1970s. Much of its current architecture was built only a few decades ago, and just occasionally will you witness one of the old wind towers, an early form of air conditioning in Dubai. This tactile sense of modernity and sudden growth is evident throughout the city, so much so that when I encountered an older building, such as a mosque that had been standing since the nineteenth century, I did not quite know quite what to make of it. Many of these "artifacts" were exciting to me simply because of their rarity. There is one historical and archaeological museum in the city that contains Bedouin-crafted clay pots, the remnants of original buildings, evidence of the pearling industry, and memories of a more nomadic culture. Touring this museum meant leaving the present Dubai behind. The museum chronicled the city’s growth from its early days as a stop-over destination for nomadic Bedouin tribes, to its period under British protection, to its discovery of oil just a short time ago--the majority of the pictures are post-1960s. I had never before seen a museum with such a bereft historical record. There is still, however, the palpable feeling that Dubai did not grow up all at once, but rather out of a tradition. And there are pieces of that tradition and elements of pre-oil Dubai, as a center for trade and fine crafts. Dubai still has some of the most beautiful and heavily traded gold in the world. The neighboring emirate of Sharjah still trades rugs that are handmade by families who have been honing that craft for generations. But Dubai is consistent in its contradictions, as evidenced by the rivaling billboards near where I stayed: one, a picture of Sheikh Maktoum waving and reminding all of his power; the other, an advertisement for the Gap, encouraging individuality through denim and striped scarves. Beyond the city, the UAE is not easy to define either. Situated on the Persian Gulf and in between deserts, those visiting the UAE can enjoy recreation in either extreme. In the desert you can hike through mountainous dunes and ride "quads" (pared-down ATVs) through them. I am unsure of the ecological damage these vehicles cause, but even I have to admit, as someone who dislikes jet skis, snowmobiles, and anything resembling an ATV, they looked like a good time. There is also "wadi bashing," where a group explores the dried-up creek beds, or wadis, of the desolate mountains and desert region, in search of new discovery. The desert is the only inland playground near Dubai. It is the only undeveloped expanse of land available for romping around and exploring freely. On the shore, there is a gorgeous stretch of white sand beach, but no one seemed to enjoy it--at least not in the winter. The water is a clear, seemingly creature-free aqua, and with daily temperatures at a steady 80°F (in January and February, when we visited), I never understood the aversion to the beach. My friend told me that since this was the coldest part of the year, most people abandoned the beach. They saw the ocean as the only respite from the unbearably hot summer, and did not want to waste their time sunbathing in the winter. As a native New Englander, I found it vexing to deny a good swim in 80° sun, but then again, there were many things I did yet not understand about this place. The apartment my friend lives in is on the beach, and I never tired of looking out to see if anyone snuck in a quick swim around lunchtime, or thought to put down a blanket at sunset. But no one did. Many people come to Dubai to work, not to vacation. During the unbearably hot summers, manual labor does not cease. The state law dictates that once temperatures rise to 60°C, laborers may not work. People say that even on the hottest of days, every meteorologist reports a "scorching 59°," and everyone goes to their job. The municipal projects in Dubai are unbelievably efficient. Even in the few weeks I was there, I saw what seemed like more progress on a nearby hotel than I have seen on any one section of Boston’s notorious "Big Dig" in five years. Dubai draws labor from nearby countries like Pakistan and Nepal where the wage is so low and the quality of life is so poor that these immigrants are willing to work throughout heat and long hours for the higher pay. Thus, Dubai has become a refuge to heads of families from all over the Middle East and Asia, working to send money back home while enjoying a better life in Dubai. On a brief excursion to nearby Fujairah, we found that people did take advantage of the water. After several days in Dubai, we drove east to snorkel near this small town. Fujairah, at the easternmost tip of the UAE, lies on the Arabian Sea, a body of water that is not as bold a turquoise as the Persian Gulf. From behind my snorkel and mask, I viewed small sharks, sea turtles, coral, and many kinds of brightly colored fish. The fish darted by as we paddled around a small rock formation that provided good hiding places for the underwater natives. Fujairah is simply another reminder of the UAE’s diversity, both geographically and historically. It is not cosmopolitan like Dubai; the road to it is relatively barren, mountainous, and hard to build on. There was an occasional open-air market, which provided the only color we saw along the way: bright fruit and tropical plants. The UAE is less populated inland and away from Dubai, and thus it feels more open. Its buildings are neither as tall nor as close together, and in only a couple of hours, Dubai seemed far behind us. Camels led onto race courseAs a sports spectator, those traveling to or living in Dubai have options. Weekly camel races occur each Friday and last hours. Tiny young boys are recruited from nearby places to ride animals I'd never thought of as speedy. But the camels are fast, and the boys are light, and somehow the hours pass as the humps stream by with little arms and legs keeping hold atop them. After one race, my friends and I talked to a few of the riders and camel trainers. My host, who fortunately speaks Arabic, related the praise one trainer spoke of his animal and about how fortunate the boys are to ride them. According to the trainer, it is very lucky to be chosen as a camel rider because your family is paid well and you achieve social status. Many families, trying to take advantage of this opportunity, move from a less desirable country to live in Dubai. Many of the young jockeys were from Bangladesh and would earn more money in one race than their fathers did in a month of labor. I never decided if I thought this was good or bad. The boys, we learned from our friend, woke early, trained hard, and were forced to live apart from their families for long stretches of time. Very few of them were more than nine years old, and many people view the practice of putting these children through the hardships of this lifestyle as unjust. On the other hand, their quality of life apparently did improve, they were fed well, and it at least appeared that they bonded with their animals. More famous than the camel races is Dubai’s World Cup, one of the most prestigious horse races in the world. An ingenious decision on the part of Sheikh Maktoum to host this race, as well as a tennis open (both of which occur in March of each year) and a fast-growing multinational golf tournament, the World Cup draws tourists and much international attention. The purse is huge, the tourists are wealthy, and everyone congregates to enrich Dubai literally and figuratively. Dubai’s leaders know that the emirate cannot rely on oil forever, nor can it function solely on trade. It has thus invested in international tourism instead. As a relatively newly developed country, I think Dubai struggles more with its identity than other places. It is still deciding exactly what kind of place it wants to be. Shiekh Maktoum loves his horses, his billboards, and his wives. No one is yet forcing Dubai to decide on any one identity. As turmoil has erupted in the Middle East, many in the region openly resent Americans. The climate in the Middle East has shifted, even in such an open-minded place as the UAE. My friend, who still lives and works in Dubai, sends reports of new bullet-proof glass in most offices buildings. I am glad we traveled when we did. I like to think the camel racers would be as friendly now as they were then, and the Nepalese woman who worked at my hotel would still want to tell me her life story. I like to think the drivers of the creek-crossing dhows would smile in the same welcoming way. But, of course, the future remains uncertain. The UAE is carefully balanced between old and new, open and critical, progressive and traditional. And for now, that balance holds steady.