## Monday, October 06, 2008

### Václav Klaus: Notes from American Northwest

Update: Now there are parts I-V, including the final portion about the Grand Canyon and the approved bailout.

Well, I obviously disagree with some comments of the Czech president about the financial crisis (as well as about the purpose of education, the future of IT, and the importance of elegance in clothing) but I still think it's interesting enough a collection of essays to quickly translate for you - and many readers will surely agree with all his points.

Notes I (Sept 29th)

On Monday noon we arrived to Portland, the major city of the state of Oregon: the flight from Prague took almost 14 hours. It's a nice summer weather over here, about 81 degrees, and from our Hilton Hotel we can see Mount Hood (11,249 feet) near the horizon. It's something in between Ararat and Popocatepetl: simply beautiful.

Portland is a city with half a million people. It has arguably too much industry, a river, hills around it, bridges, European-style villas, and Czech streetcars produced by Škoda and imported by Inekon. It is a city of the Democrats, more precisely the champions of the Democratic Party. It is said to be a "City of Roses" but I haven't seen any. Finally, it's the greenest U.S. city (in the ideological sense) that wants to produce 100% of electricity from renewable sources. It is also a city of microbreweries. It has its own "soul" that a European visitor can feel: it's not the emptiness of the cities of the middle America. The downtown is alive and pleasant. Much like in Boston or Philadelphia, one can walk here: in other words, it's not a city of cars and huge distances.

In the microbrewery Bridgeport that was recommended to us as a must-visit by Mr Láďa Jakl, a beer superexpert, you can get eight small glasses with specimens of beer on a plate and you should choose one. All of them were good. The idea about our (Czech) beer exclusivity is mistaken as I've known for some time.

In the afternoon, we have seen the local waterfalls (second largest in the U.S.), the Columbia river, and the beautiful local forests and hills. The landscape is non-dramatic (unlike Arizona or California) but lovely and friendly. The people near the water falls unbelievably ignore the importance of appropriate and elegant clothes - to an extent that is impossible in the rest of the world. My previous trip ended in Tokyo and the difference between the quality and attention paid to clothing in these two places can't be overstated.

The evening debate with the organizers of my trip was difficult because our day was 9 hours longer than theirs and it was difficult to keep the eyelids open. The Americans are bothered by low chances to elect a high-quality president much like the government's attempts for a bailout of Wall Street and its bankers and financiers. But they're proud that the Congress has rejected Bush's bailout plan. They understood it as a proof that the lawmakers listen to their constituents who don't want anything like that.

The most amazing experience of the day was the wind. In the afternoon, we took our cars and went to see the panorama above the river to experience something that we can't know from Central Europe. The reason is that our climate is too ordinary. However, in the huge valley of the river, there is a permanent wind blowing somewhere from Canada towards the Pacific Ocean. They told us that the wind is the same every day but it was difficult to stand and take photographs because the wind was moving with us all the time. I was worried that my glasses and cell phone would fly away: a completely unknown feeling.

Notes II (Oct 1st)

The first night following a 9-hour shift in the time zones is always tough because a person of my kind first wakes up around the midnight. After 3 a.m., it is impossible to sleep at all. Moreover, the "warmed-up" America usually prevents one from opening the windows and their not-quite-newest air-conditioning systems are making a lot of noise.

In the morning, when the city was still almost empty, I made a small walk through the city. But in the peaceful Portland, almost nothing is going on. And in fact, I didn't see too many interesting things here.

America talks about the Congress' courage to say "No" to Bush's bailout plan. The newspapers are full of details about the votes of individual lawmakers. The arguments of the opponents - that it is a bad plan and it is impossible to give a USD 700 billion bianco cheque to the government - are completely correct. However, my understanding is that even the lawmakers want to distribute USD 700 billion but to the places they prefer: less money to the banks and more money to the real economy. Let's see what they'll invent.

I am going to meet a Czech American who is one of the descendants of John Amos Comenius, the Czech teacher of nations. But he's no scholar: he is a real estate agent. A press conference will follow. It will be mostly dedicated to my book about global warming but also to the opinions how to solve the U.S. crisis. I don't want them to teach us which is why I wouldn't dare to tell them what to do, either. The only thing I remind them of is that after 50 years of communism, we had some bad loans, too. And all of our American advisers used to be so surprised to hear it.

Afterwords, I give a speech at the lunch organized by Cascade Policy Institute. It is titled "Panic about global warming is unacceptable and it must be confronted." Almost 300 people in the room mostly agree with my opinions. Dr Haber who acts like my assistant is surprised that the audience gave me standing ovations after I spoke.

After a "live" interview on radio, I meet the editors of "The Oregonian" to discuss the same topics as during the morning press conference.

A fast transfer to the airport follows. The flight to Seattle, a coastal city close to the Canadian borders, only takes 40 minutes. In this context, the word "nearby" means something like 100 miles. Seattle is the most rainy city in the U.S. if not in the world. According to statistics, it only has 58 sunny days a year in average.

I was intrigued by the information that Seattle is the most educated U.S. city - 52% has a college or university degree, usually Bc, and 93% have completed a high school. This sounds pretty absurd because the structure of employment surely can't match these numbers. People are "overeducated" relatively to the real demands in the job market. If that is so, isn't it just a game about formal education? Is the education real? I don't believe it. Education is not an abstract notion: it must be functional. Our (Czech) minister of education unfortunately doesn't know it, either.

At the airport, my luggage was the only one that was opened by the cautious inspectors. Their gadgets were indicating a suspicious chemical compound. It turned out that this compound was included in a book with photographs about the Oregon state. A juicy detail is that I received the book from the governor of this state.

Notes III (Oct 2nd)

Seattle, with more than half a million people, is the largest city of the Washington state. It is another strongly Democratic state of the union - in the last five presidential elections, they always voted for the Democratic ticket. Seattle is a beautiful coastal city near the Pacific beaches that is almost as picturesque as San Francisco or nearby Vancouver. The city is a surprise for me - it is a modern, alive (as opposed to provincial) city even though it is the most distant one from the East Coast U.S. metropolitan areas.

We begin with a very business-oriented breakfast with the local World Affairs Council who want me to tell them something about Europe and our presidency in H1 of 2009. They incorrectly assume that it is an opportunity to do something essential. I explain them it's not.

The program continues with a very pleasant item. In America, people like me have always suffered when they had to drink the American coffee (which is a beverage similar to coffee but it is not real coffee from our viewpoint) - up to the point when the Starbucks chain was born. I didn't even know that this company has headquarters exactly in Seattle and that I would be invited to meet their president and founder, H. Schultz. It's interesting to notice the strong correlation between the U.S. GDP growth and Starbucks' profits - which is why the company goes through hard times right now. If I didn't see it, I wouldn't believe that the Americans (and Britons) react so sensitively.

After the lunch, another pride of Seattle is on the program: Microsoft. I am no computer or internet fanatic but I couldn't miss this opportunity. When they were showing us their future IT home, I was scared that I could live to see this thing in reality. But let's hope that we will defend ourselves against this development. I was thinking how their modern IT and software kingdom compares to Infosys in Bangalore, India that I have also visited: I couldn't see much difference.

In the evening we have the main event why I am here: the Columbia Award presented to me during a dinner organized by the Washington Policy Center. My talk is titled "Freedom and Free Market Principles Are As Important to Fight For Now as in the Past, Maybe More" and my book, Blue Planet in Green Shackles, will be presented there. The organizers tell me that it was the most visited event of this kind in their history, with 1,100 guests. So I had to sign a few hundred of copies of my book and pose for hundreds of pictures with the participants. The price for the dinner was between USD 300 and USD 15,000. Only those who paid a figure with at least three zeroes could have had a picture with me and one additional zero was needed for my signature.

Because we're discussing various proposed tax reforms back at home, we should know that the Washington state (almost 6 million people) has a regressive tax system - richer people pay a lower rate than the poorer ones. And because it is a state governed by Democrats, our Social Democrats should think about it.

P.S. USA Today announces that 74 faculties of law in the U.S. already teach a course about "animal rights". A decade ago, it was only 12 schools. It seems that the people have finally lost their minds.

Notes IV (Oct 3rd)

We're leaving a very nice and friendly Seattle where a pretty sunny day is followed by a - supposedly standard and ordinary - rainy weather. From the vicinity of Canada, we are suddenly getting closer to the borders of Mexico: even the pilot speaks both English and Spanish to the passengers. We're flying to Arizona's Phoenix and getting ready for a temperature shock. In Seattle we had about 63 degrees (around 17 °C) while it is 102 degrees (39 °C) in Phoenix. The difference is incredible 39 degrees (22 °C). Nevertheless, I intend to survive this massive warming even though some alarmists consider the increase of the global mean temperature by 0.74 °C per century to be a catastrophic event.

Yesterday I forgot to write that the laudacio - e.g. the speech defending the choice of the Columbia Award winner (myself) - was given by Charles Simonyi who is a Hungarian who fled communist Hungary in the 1960s to quickly become one of the closest collaborators of Microsoft's Bill Gates. He was even one of the main engineers behind Word and Excel. He earned quite a lot of money so in February 2007 he was able to be one of the first private citizens to pay for a space trip as a tourist. He described the experience to me very colorfully and he especially emphasized that he planned his second space trip from Baikonur in April 2009.

Not only because of its Nature, but also because of its politics, Arizona is completely different than Oregon or Washington. It is a bastion of the Republican Party. John McCain has been its Senator for more than 20 years. He replaced famous Barry Goldwater in 1987. Arizona is a dry desert with multicolored sand, palms, and very large cacti. And, of course, the Grand Canyon. And the heat. It is the hottest state of the Union. When we debated options for further privatization in the U.S., they told me that only 15% of Arizona's territory is privately owned - the rest are public forests, parks, and natural reservations. It proves that despite dozens of visits, there are still important things about America that I don't know.

In Phoenix with its 1.5 million people (which has Prague as one of its twin cities), the temperature is around 35 °C throughout most of the year (during days). I have been here twice and it was always suffocating. The swimming in the hotel swimming pool is nice if you realize that October is beginning. Around this big city, there are brown rocks that could be used in a Western movie.

During a generously visited evening event, I am collecting the Barry Goldwater Award for Liberty [Klaus's speech is here]. Goldwater was, as a presidential candidate in 1964 (losing against Lyndon Johnson) famous for his sharp anticommunist rhetoric and his staunch defense of the free markets.

The financial crisis continues. Radio and TV pundits inform, in a serious voice, that the stocks have fell again - by more than 400 points.

Notes V (Oct 4th)

Let me return to yesterday's evening. While I was giving my talk in Phoenix, the two vice-presidential candidates were debating. Naturally, I thought that no one would arrive to listen to me. But the hall was full and the organizers promised to replay my recorded speech right after it was over, using two huge TV screens. The VP debate was truly "American": the Democrats wanted to see the more experienced Biden to brutally win over the inexperienced Palin. The Republicans were afraid that Palin's performance could turn into a catastrophe. It didn't. In the morning, Arizona's newspapers wrote very accurately: "Biden wins, Palin passes." In plain Czech [or English], Biden was better but Palin did just fine. However, the polls won't be affected by this fact, not even slightly. But it was the Republicans who were more worried - I spoke to many of them right after the debate - and their relief was obvious.

After 39 years, I visited the Grand Canyon again. It hasn't changed. It is still equally beautiful, equally bizarre, equally undescribable, equally majestic. Four decades ago, I was there as a student who was "just" walking on the Southern side of the Canyon. This time, the organizers placed us into a small aircraft that was flying above the Canyon for quite some time. My impression was equally spectacular. Those few hours in the air taught me several new insights:
• The Grand Canyon is amazing but there are many more smaller, equally beautiful canyons in the area
• Arizona is dry, scorched, un-green. The only green areas in the state - whose territory is four times larger than the Czech Republic - are the golf courses. So that's something unnatural, something that violates Nature's equilibrium. Shouldn't Al Gore protest? Doesn't it change the temperature? Doesn't it waste energy? Our Czech counterparts of Al Gore don't even want us to protect the Bohemian Forest against the bark beetle.
• My neighbor in the airplane, the ex-president of the Barry Goldwater Institute and a former local Arizona state Senator, was showing me extensive complexes of luxurious villas that belong to the Sun City system. My eyes betrayed a misunderstanding what's going on so he explained that these are "villages" for people above 55 years of age who want luxury, recreational activities, opportunities for sports, bars, and dancing places and, most importantly, who don't want to be interrupted by their children. The children may visit them but not too often. Well, people apparently "couldn't live" without such an arrangement. Or is it an expression of the young seniors' desire to live freely once again, without being limited by anyone? In the same way that the youth could live so far?
The U.S. Congress has approved the bailout of the financial system. It was too fast and, as I have said several times, it will act as a reduction of the painful consequences of the financial crisis by taking pills against pain, not as a surgical intervention to the system. But USD 700 billion is a large amount. I looked at some statistics. To put the figure into its context, let us mention that
• the total U.S. federal budget for 2008 is 2.9 trillion dollars
• welfare programs cost 608 billion dollars a year
• the Pentagon receives 481 billion dollars a year (plus direct funding of Iraq and Afghanistan wars)
• the budget deficit is estimated to be 400 billion dollars
• last year, the U.S. GDP was 13.8 trillion dollars.
I think that the numbers make it clear that USD 700 billion is not a small amount.

The sunset proceeds very quickly and allows us the very last glances at the mysterious strings of mountains that surround Phoenix. We enter an aircraft of British Airways and fly to London and then to Prague. Our trip is over.

#### 1 comment:

1. Recently an insurance company nearly wind up....

A bank is nearly bankrupt......

Who fault?

The top management of the Public listed company ( belong to "public" ) salary should be tied a portion of it to the shares price ( IPO or ave 5 years ).... so when the shares price drop, it don't just penalise the investors, but those who don't take care of the company.....If this rule is pass on, without any need of further regulation, all industries ( as long as it is public listed ) will be self regulated......

Sign a petition to your favourite president candidate, congress member again and ask for their views to comment on this, and what regulations they are going to raise for implementation.....If you agree on my point, please share with many people as possible....

http://remindmyselfinstock.blogspot.com/