Wednesday, July 29, 2015

Empires on the go

When I was a boy in Australia, all our world maps showed the British Empire in red. It covered the world, pretty much; the sun never set on it. We felt lucky to be a part of it, and we pitied those nations that weren’t. It’s a measure of how narrow our world-view was, that we had no notion that the American Empire was on the way up, and the British on the way down.

A few years ago a well-travelled American friend of mine protested indignantly, “We don’t do empires”. He’s changed his mind, since. He could hardly not do. Today, the new Empire announces its presence with all the fanfare and arrogance of every past empire – the Roman, the Persian, the Mongol, the Turkish, the Spanish, the British, and so on. To outsiders, though,too many American citizens seem to be unaware of the historical context of their empire. 

From the time of the earliest foreign settlements in North America, the British and (later) Americans expanded their realms inexorably – sometimes in small increments, sometimes in large. The “Louisiana Purchase” from France in 1803 of nearly a million square miles was a false bill of goods, since the vendor didn’t own the territory and the buyer knew it. What was bought and sold was the exclusive right to steal it from the people in possession. Well, that’s how empires expand; they don’t ask permission from the conquered.

The forced transfer of half of Mexico in 1848 – also nearly a million square miles – was the same kind of acquisition. So was the purchase of Russian America in 1867 – only half a million square miles, this time. Several of Spain’s overseas possessions were added to the empire by force of arms in 1898: Philippines, Cuba, Puerto Rico...

Since then, America’s expansion has followed the broad method of the European trading nations between the 16th and 20th Centuries, with businessmen and troops moving more or less in lock-step. The military occupation of the Middle East was predictable. It’s what the British did in India. Local satraps can’t be relied on to provide the raw materials necessary for the prosperity of the imperial homeland – not without the presence of imperial troops to remind them of their duties.

Brutality is a natural part of the reminding-process, and psychopaths are hired to do the reminding. Human-rights have no part to play in the administration of empires, and are pretty much a dead letter in any imperial context. 

Non-Americans have no excuse for not recognising this truth. Europe remembers the excesses of Germany and Russia. Asia remembers China’s “Great Leap Forward”, Japan’s invasions, and the more recent holocausts in Cambodia and Vietnam. Latin America remembers its genocides of aboriginal peoples. Africa’s history is cluttered with similar savagery. 

Non-Americans in general are inclined to sympathize more with local resistance movements that pit themselves against foreign occupiers. We are more aware of history. The French civilians who resisted the German occupation were called terrorists. The local heroes who made the American Revolution were called terrorists by the British. Non-American politicians tend to condone their US colleagues’ use of terror-tactics to counter the resistance of the conquered – but not their constituents, in general.  

The bogey-man of worldwide Islamic terrorism is a conspiracy theory too far for most of us. We know that the entire Islamic community isn’t savage. Religious crusades are frowned on by most educated observers, today.

Nevertheless, we don’t doubt that the Oceania envisioned by George Orwell in “1984”, of America (and Israel, its Airstrip One), will endure for the foreseeable future – or at least as long as its currency can bear the expense. Empires’ lives are measured in centuries. There is nothing new under the sun.

Tuesday, July 28, 2015

Norwegian Wood

Ross gave me a glowing report on the property he was intending to buy – and eventually did buy with the help of his Norwegian bank. “And – listen to this, Dad – there’s a river runs through it!” Wow. I’ve never actually read the book of that title, or seen the movie, and I’m not sure he has. But I recognized the romance in the reference, and gave it the nod.

Actually, the “river” was – is – a downhill trickle from a natural mountain spring, but it made a satisfactory river-ish noise all the way down. It rained most of the time we visited (earlier this month), and the wet grass and undergrowth put us off exploring for the source further up the mountain in the forest. Next time…

So. The Barlow Family’s property empire now includes sixty acres of harvestable Norwegian trees in that nation’s wild, wild, west, to augment the forest cabin’s half-acre in the east. It hardly seems worth while listing our two little suburban blocks in the Caribbean. Yee-hah, though, eh?

The idea (not a plan, as such…) is to convert some of the rickety shacks into basic accommodation for the hostel trade. There’s a lot of conversion to do, and very little capital to do it with. Dreams and romance don’t transform easily into practicality, do they? We parents will give what encouragement we can – short of committing our retirement fund to the project. That would need a serious plan.

He bought it for the view, which is magnificent: two or three thousand feet above a valley with a real river and a very cute town. Snow-capped mountains in the far distance, even in the summer. In the winter it’s ski-territory, and by gosh it must be cold then. Linda and I huddled in Ross’s coats and woolly hats, on top of our own – while the young Norskie grandchildren cavorted (yes they did – they cavorted, shamelessly) in short-shorts and T-shirts, and bare feet. Madness.

The place came on the basis of “as is, where is”. Electricity, but no hot-water tank or pipes; a little stove and fridge (!), lights and a heater, but no sink or shower or washing machine, or TV. Oh, and the toilet facilities were – uh, as simple as you can get, pretty much. I hadn’t used one of those places since 1955 when we left Hannaford; I’m not sure Linda had ever used one, at least in a Western country. The only good thing about it is that the seat was warm. I’m guessing it will need to be upgraded before the local authorities grant any licences.

Or maybe not. Norway is a surprisingly relaxed place: cheerful and friendly to a fault. Ross once ran across the Prime Minister of the day while waiting for a ferry. “Are you good for a selfie, squire?” “Well, why not?” Something like that. It’s a nice photo for his Facebook page – Ross’s, at least: maybe not the PM’s.

That PM has come down in the world since then, regrettably. Today he’s Secretary-General of NATO – doing the US’s bidding, and complicit in that organisation’s war crimes. Sigh. Oh well. He has publicly scoffed at the idea that Russia poses an imminent threat to Europe, so we must hope he can keep his idiotic generals from starting World War III. (One of them is actually called General Strangelove, for goodness sake. Well, Breedlove, which is even sillier.)

I’m always disgusted by double standards, and my heart breaks to note that Norway’s are as disgusting as anybody’s. In the exact same week in 2011 that Anders Breivik slaughtered 69 members of a youth camp on the island of Utoya, Norway’s air force was slaughtering an unrecorded number of civilians in Libya as part of NATO’s unprovoked attack on that nation. Nobody seems to have noticed the irony. (This was before Stoltenberg took over, by the way; some Danish politician was in charge.)

The hypocrisy of mourning the one event while celebrating the other is too much for me to stomach. Norwegians were themselves victims of an aggressive-war machine in the 1940s. Is there a qualitative difference? I can’t see it. Aren’t Libyans humans, too? If we bomb their legs off, do they not bleed? 

Running with the NATO dogs of war invites comparison with that old German aggression, and the comparison demeans Norway’s gentle image in the civilized world. Norway’s people are gentle, and well-mannered, and humane. They deserve a more moral leadership and representation. 

Sadly, all the peaceful forest in the world can’t cancel out the wickedness of crimes against humanity.

Tuesday, June 9, 2015

FIFA – Where were the auditors?

In the murky world of international commerce, the directors and auditors of companies are responsible for guarding against operational carelessness and naughtiness of all kinds. Watching them from above are state supervisory authorities; and down in the boiler-rooms are the salaried managers and minions. I’ve been all those things, in my time, except a state supervisor, so very little happens in the world of international commerce that is new to me.

Directors are paid handsomely to direct the strategy of their companies. With the cooperation of outside auditors the directors are obliged to ensure that the Profit & Loss Accounts are a “true and fair” statement of the operations and that the Balance Sheets give a “true and fair” statement of the assets and liabilities. 

There’s nothing particularly onerous in this second, shared, duty. It might require a long time, and cost a lot of money – and they might never uncover any errors. And, there may be no errors to discover. BUT if there are some errors to discover, and they aren’t detected, then the directors and auditors deserve to be held accountable.

Regrettably, good directors and auditors are not as easy to find as they used to be. As long as directors observe the formal regulations set out in their companies’ charters, and as long as auditors pay lip-service to the relevant GAAP rules (Generally Accepted Accounting Principles), then the regulatory authorities tend to give the published Financial Statements a pass.

The blame for every corporate fraud in history rests with the directors and auditors of the enterprise. For some reason, auditors never get as much flak as directors. Speaking as a former auditor, that’s not the way it should be. After all, a company’s auditors only have the one job. They are independent. They have the run of the entire premises of the company, with carte blanche to inspect what they want. Nobody can deny them access to any records – or any physical equipment, come to that.

They can write their own audit programs. As a young man I once got the thrill of my life when one manager rather reluctantly gave way to my request to see some record or other. “I don’t know what use that will be to you”, he said. “Nobody’s ever asked for it before.” The record was indeed of no value to me, in the event – but it was a useful reminder to him that I set the limits to my investigations, not him.

At least, not if he wanted a “clean” audit report. Such a thing was held in higher regard then than it is today. After all, incredibly few companies in history have ever gone bankrupt without a clean audit report. What does that say about changing auditing standards? 

Cayman’s own financial scandals have all arisen because of inadequate auditing. BCCI (Bank of Credit and Commerce International), Parmalat, Enron – and now FIFA. Not a dollar should have gotten past the auditors of any of them, never mind millions. What’s gone wrong, in recent decades?

Every one of those companies’ auditors had an excuse, and I know what it is. The “audit budget” was too tight. Overall budgets (so many hours at so much an hour) are agreed each year between one of a company’s directors and one of its audit firm’s partners, often during a round of golf. The audit partner divides the dollar total by his preferred hourly rates, and the minions are ordered to do their work within the calculated number of hours. (As a mid-level minion, years ago in Canada, I was seriously threatened with firing when I insisted on extra time, beyond the budget. My fellow minions all took the easier path. Ah well, that’s a story for another time.)

The term Enron accounting has entered the dictionaries, but it ought to be called Enron auditing. The current FIFA furore should be bringing down the auditors as much as the directors and officers. The BCCI investigation in the 1980s did result in the demise of one of the world’s biggest audit firms, but all their hotshots quickly found employment with the others. There is little downside in being an audit partner. (I’ve got a personal story about the principles that prevailed in that audit, too, for another day…)

Monday, May 18, 2015

Cayman’s entitlement culture

Following an English Army’s conquest of Jamaica in 1655, European and African refugees and drifters became the Cayman Islands’ indigenous/aboriginal inhabitants, as far as we know. There is no evidence that any native-American tribes ever lived here. It is those first settlers’ bloodline descendants who still rule Cayman today, and claim preferential rights to all manner of privileges. Migrants have always been tolerated, but full acceptance has come only after mating with someone of the bloodline.

As in other communities around the world whose governance is founded on bloodline or tribal inheritance, Cayman’s local rulers have found it difficult to give up their tribal privileges – even impossible. Like Saudi Arabia and the Gulf Emirates, Cayman has been lucky to have found a steady source of state revenue without imposing an income-tax on their subjects. 

Every Arab tribal autocracy has its oil, Cayman’s has its “offshore” international tax-haven. Those sources produce oodles of Public Revenue, and every ruling tribe produces plenty of members ready to claim first dibs on it by virtue of their bloodline. Historically, their political representatives (who must be fellow-aboriginals, by law) have created an entire system of governance that caters to that sentiment – regardless of consequences.

Cayman’s current representatives have their knickers in a twist, trying to resolve the consequences. An uncomfortable number of the tribe’s members are coming up short in the following respects:-

·        Unschooled beyond a minimal level
·        Unemployable because of an anti-work attitude
·        Untrained and undisciplined in the management of their personal finances
·        Intolerant towards foreign ethnic groups

Those deficiencies have steadily worsened in recent years; the drift to full dependency on government handouts has passed the point of no return. There is no apparent solution on the horizon. It looks as though, in time, our “native” citizenry will become overwhelmingly dependent on welfare.

Most Caymanian families will rely on the plethora of government bureaucracies for food-vouchers; most Caymanian children will rely on charities to feed them before, during and after school; most Caymanian old folk will receive free Meals on Wheels, free healthcare, and pocket-money. Already, a huge segment of our bloated Civil Service is occupied with forcing private-sector businesses to hire and promote bloodline Caymanians ahead of immigrants, regardless of experience or (often) education.

The four deficiencies listed above have achieved unstoppable momentum. None of the four is ever publicly spoken of as a dependency by ethnic Caymanians, or acknowledged as a predictable product of the culture of entitlement. Expats know better than to argue, for fear of being punished by the authorities. The problems could all be fixed if Caymanians allowed expats to participate in the fixing – but expats are not to be trusted.

The schooling could be improved with the help of expat teachers and employers – if they were trusted. The unemployables could be made employable with the help of expats – if they were trusted. The financially incapable could be taught by expat volunteers – if they were trusted. The intolerant could be educated out of their narrow tribal prejudices – if their community would trust the outside world.

(Of course there are some expat cronies and stooges whose lives are spent giving comfort and assurance to the intolerant. There always are people like that, aren’t there?  Those expats brave enough to disagree openly, have given up. Their independence is viewed with suspicion; they will never be called upon, except as prospective stooges. What a waste of useful resources it all is!)

Every year, the Caymanians-only government schools add more inadequately educated graduates to the ranks of the unemployable, the financially irresponsible and the intolerant. All expats whose home this is, would love to be called on to help stop the rot – but they never will be, because they aren’t trusted. 

An uncomfortably large segment of our native Caymanian community is addicted to its protectionist culture. Government-school standards stay low because entitlement is more important than education. Respect for foreign ways is absent because mistrust of foreigners is so strong. Personal financial responsibility is pointless when every need is met by handouts.

It all reminds me of Bob Dylan’s famous song of the 1950s about a drug-addict friend of his who, trapped by her dependency, could find “no direction home”, he said. She was like a rolling stone, he told her brutally. By the same token, the native-Caymanian community (as a whole) will find no way out of its social confusion, until it casts off its dependency on its entitlement culture.

Wednesday, May 13, 2015

Fixing up George Town

The way things are going, George Town (our main commercial centre) will lose most of its relevance within the next ten years. Camana Bay – four miles to the north – is very up-market, and a much more attractive place for stopover tourists and cruise-passengers alike. It would be unfair to say that George Town is looking seedy, yet – or even particularly tired; but it does have some tacky retail shops and eating-places, not appropriate for middle-class visitors. There’s a lot of chatter about sprucing GT up, to compete with the new town. 

Camana Bay was established just a few years ago, designed by the best town-planners Ken Dart’s infinite supply of capital could buy. As the owner of the whole development Mr Dart has had the freedom to negotiate the re-siting of roads and the allocation of land-units. He has done a superb job.

Predictably, his commercial park knocks the socks off downtown, as an attraction for visitors. GT grew up before the days of professional town-planning. Confined in a haphazard layout of mildly congested streets and lanes, financial-sector offices rub shoulders with cheapo T-shirt shops and rowdy bars. Wild chickens share the sidewalks with pedestrians. (Actually, they’re quite cute, especially when they hang out around the KFC shop, but – well, let’s just say it’s not quite in accordance with the image that our “offshore” hotshots would like to project!)

Downtown merchants are increasingly indignant at the bussing of cruise-passengers up to Camana Bay, to shop and wander around, but are relying on government to help them out and to pay for whatever it costs. That’s pretty pathetic, but par for the course, in a Cayman in which people are encouraged to suck on the government teat rather than find their own sustenance. 

Regrettably, Cayman is no longer a self-help society. A couple of months ago, in a blog-post called Give a kid breakfast, I grumbled about the welfare mentality that encouraged parents of schoolchildren to rely on charities to feed those children. Some of the parents are genuinely not competent to manage the money they earn, but most seem to believe that they are entitled to mooch off the rest of society at every opportunity. The entitlement culture, we call it.

Charity recipients are supposed to be means-tested, but most people I speak with believe the testing-system is corrupt. Certainly, many of the kids applying for the free school-meals come from homes with fancier cars than Linda and I can afford!

Ah well…  We can’t blame the politicians and government bureaucrats for turning a blind eye to the corruption that allows self-reliance to be thrown out the window. After all, it’s the absence of self-reliance that keeps them all in their well-paid jobs. Their secret aim in life is probably to abolish self-reliance altogether. 

(Outside the offshore-finance sector, Cayman is galloping towards full socialism. Already we have quasi-communist state control of the entire workforce, and already there are moves to control day-to-day operations of commerce, too – offshore-finance excepted.)

As a general statement, our downtown merchants are milking the entitlement culture as much as the free-breakfast mothers. They (the merchants) want government to make their place more attractive, and seem unwilling to do anything substantive themselves – or to pay for the refurbishment demanded. They’re too cheap to even set up a Merchants Association, for goodness sake. If they’ve even thought about it. 

Thirty years ago our Chamber of Commerce was slapped awake from a long sleep by an enlightened group of local businessmen, just in time to fight off a proposed Income Tax that would have destroyed Cayman’s prosperity. It was a narrow escape, and the total cost was a mere $100,000. Who will slap today’s downtown merchants awake, and persuade them to finance a war-chest of $100,000 or so? 

If they can’t find an enlightened group from within their number, they won’t deserve to survive. Sadly, it seems that all the get-up-and-go of earlier times has simply got up and gone.