Cyber Indictment reflects badly on the Obama Administration

This piece has been posted on New America Media and subsequently published in May 29, 2014 issue of China Daily, USA edition.
--------------------------------------------------------------------------

Last week the Department of Justice announced an indictment of cyber theft against five members of China’s PLA. Since there is no possibility of these charges ever coming to trial, one has to wonder as to the purpose of making these allegations.

Since the revelations by Edward Snowden, everybody in the world knows that no entity in the world is busier at cyber hacking than the NSA of the U.S. government.

Thus it was important for Attorney General Holder to draw the line and define certain kinds of cyber intrusion as acceptable—at least by American standards—and others not. No surprise that the NSA type of cyber activity is not nefarious but justifiable in the name of national interest.

According to Holder, the Chinese cyber activity is criminal because he alleges that the cyber theft of intelligence goes to help specific Chinese companies gain a commercial advantage, obviously a crass activity entirely beneath the hackers at NSA.

By its very clandestine and esoteric nature, an understanding of the intricacies of cyber hacking eludes most of us. Fortunately we do not simply have to take the DOJ’s version of the story; we have the analysis of Jeffrey Carr, an independent cyber security expert, to provide another point of view.

Carr examined the DOJ charges and came up with some illuminating conclusions.

The Chinese hackers were accused of stealing the secrets of SolarWorld, a maker of solar panels, but Carr pointed out the panel maker was using obsolete technology, losing money for three straight years and in the process of plunging into bankruptcy all by itself. Chinese panel makers were using more economically competitive, thin film technology and adopting SolarWorld’s technology would have been going backwards.

The Chinese were also accused of stealing designs of nuclear power plant from Westinghouse, but apparently Holder did not realize that technology transfer was part of the deal to sell power plants to China. By agreement, Westinghouse had willingly handed plant designs over to China, which meant there was no need for cyber thievery.

Carr went on to show that the other alleged victims/plaintiffs in Holder’s indictment, US Steel, Alcoa and Allegheny Technologies, had no technology of value to China and weren’t damaged by any of the alleged cyber activity.

To paraphrase Carr’s words, if those cases were the best the DOJ could do to level cyber theft charges against China, the U.S. government is in a lot more trouble than he thought.

So other than just another case of the U.S. proclaiming, “don’t do what we do but do what we say we do,” how can we explain the action to indict?

The timing seemed particularly bizarre coming on the heels of full honor arrival ceremony welcoming PLA general Fang Fenghui to the Pentagon. General Fang is chief of general staff of PLA and the visit was billed as another step to building a trusting relationship between the two governments.

But then of late, the Obama Administration seemed to be particularly adept at wrong footing.

After Secretary of Defense Hagel and Secretary of State Kerry visited China in their respective efforts to strengthen a working relationship, President Obama then took a swing through Asia and undid their efforts.

Despite his disavowing any intention to antagonize China, his words in Japan and Philippines clearly showed his sympathies in their disputes with China. In exchange, he was looking for reinforcement by way of concessions for his pivot to Asia but came home empty handed.

Ironically, while the stumbling diplomacy damaged the bilateral relations with China, Russia’s Vladimir Putin may have been the unintended beneficiary.

Putin was in China for a two-day state visit. He needed to conclude a long-term gas supply deal to burnish his global image, especially after being pilloried by the West for his maneuvers involving Crimea.

The long-term supply contract had been in negotiations over a ten-year span. Now he needed to close the deal and show that there were other customers and partners for Russia’s energy than Western Europe.

He was privately rueful and observed that the Chinese were tough negotiators and wondered whether the deal was going to get done before the end of his visit.

Then came the announcement of the U.S. indictment, and China’s president Xi Jinping may well have decided to leave some money on the negotiating table and finish the gas supply agreement.

It became more important for the world to see a newly strengthened alliance between China and Russia and for the two countries to jointly thumb their noses at Washington.

It’s sadder still if the Obama Administration is showing that when it comes to foreign policy, members of his team are clueless as to what others on the team are doing.

How about a NATO in the Pacific?

I recently was an invited guest on a radio program on the somewhat rhetorical question: Namely, is it time to consider forming a NATO like alliance in Asia?

Some of the questions and issues raised in the program include:

1. Not clear as to who the members of the alliance should be and who the alliance is intended to oppose.
2. NATO like alliance is a western idea and not one consistent with Asian cultures.
3. There is no analogy between the confrontation between former USSR and the eastern block and western Europe then to the situation in the Pacific now.
4. The oldest democracy and the largest democracy in Asia have been examples of how not to govern.
5. Uncle Sam is still not financially healthy. Anyone in a hospital gown should think carefully before pivoting too quickly lest his whole backside becomes exposed.

Go the this link to listen to the entire show.

Obama on Wrong Side of History and Gary Locke's Redemption

An edited and revised version was published in New America Media.

On his recent tour of Asia, President Obama's first stop was Japan where he blundered and tarnished the prestige of the Presidency. At about the same time, as if to atone for his former boss's misstep, Gary Locke, the first Chinese American to be a state governor, a cabinet secretary and as ambassador to China, paid a personal visit to the Nanjing Massacre Museum. 

In his typically understated style, Locke did not announce his intention to visit in advance and thus went to the museum without fanfare. When the media caught up to him, he made it clear that his was a personal visit and had no bearing on the official position of the U.S. government.

This was his first visit to the museum. Keeping his visit a routine matter reflected a sincere interest to see first hand various acts of Japan's WWII atrocities, free of grandstanding and limelight that politicians crave. He effectively reminded the government of Japan that all Chinese and most of Asians are still waiting for Japan to finally admit their heinous acts of inhumanity and stop pretending to be the victims rather than perpetrators of the War.

In contrast, Obama's visit in Tokyo was bathed in bright lights and he said just about everything Japan's prime minister Abe wanted to hear, including the willingness of the U.S. to help Japan in the event of military conflict over the disputed Diaoyu/Senkaku islands.

Until Obama's statement, the U.S. official position was that when the administrative control of the islands was turned over to Japan in 1972, the U.S. government took no position on the rightful ownership of those islands.

China had been demanding that Japan abide by terms of unconditional surrender as described in the Potsdam Declaration. The terms specified that Japan renounced all claims to offshore islands other than the four main islands of Japan.

Not only did Obama showed ignorance of history but he got nothing in return. Abe was all smiles but gave no concessions that Obama sought. Obama gave up the good vibes from the Sunnyland summit with China's Xi Jinping for no good reason.

In August 2001, not long after he was elected to Congress, Mike Honda visited China and he made sure the Nanjing Massacre Museum was on his itinerary. Despite his being ethnic Japanese, Honda understood the right and wrong of history. He has been among the most vociferous members of Congress in demanding redress from Japan for their crimes against humanity.

Later Honda even guided then freshman Congresswoman Judy Chu to the Nanjing Museum so that she can become acquainted with this dark chapter of WWII history. Chu born in America was not familiar with the war atrocities committed by Japan's Imperial troops.

At the massacre museum in Nanjing, leis of paper folded cranes made by school children from Japan can be seen as offerings of regret and apology. Schools from Japan organized periodic tours to Nanjing so that their students do not forget.

The right wing government does not represent the majority of Japanese people. Even if Americans do not pay attention to history, the people of Asia will not let Abe and his ilk forget.

Book Review: Fortunate Sons

“Fortunate Sons” told the story of the first group of 120 young boys to be sponsored by the Manchu government in Beijing and entered the U.S. for a western education. The first cohort rode on the newly completed transcontinental railroad from San Francisco to Hartford Connecticut in 1872. These boys grew into adulthood in America and played important roles the early bilateral relations between China and the U.S.

Sending boys to America for a western education was Yung Wing’s idea. He had undergone just such an experience, becoming the first Chinese to graduate from Yale in 1854.

When he went back to China, he eventually met and became a trusted assistant to Zeng Guofan, the most powerful official at the imperial court. Zeng felt the sting of Western imperial powers and the unequal treaties imposed on China. He asked Yung for his ideas on modernizing China, Yung proposed sending boys to the U.S. for further education.

By the time Yung accompanied the first of three batches of 40 boys to America in 1872, Zeng had died and succeeded by Li Hongzhang, who became Yung’s chief patron in court. Li shared Zeng’s desire to modernize China.

With the help of Yung’s friendship and connection with the Christian missionaries, the boys were dispersed to families in Connecticut to attend schools preparatory to entering leading universities in America.

By and large these boys, at ages of 12 and 13, adapted to American life and quickly became fluent in English. Some even excelled in baseball and all worked diligently to get to the top of their class. Anti racist bias had not yet found their way to the eastern parts of the U.S. Their female classmates found the Chinese boys exotic and more attractive than their more ordinary white classmates.

The first group of students graduated from high school in 1876 and they were accepted into such elite schools as Yale, MIT and other Ivy schools. The race riot that rampaged through Chinatown of San Francisco incited by Dennis Kearney was a year away in the future.

By 1881, Li Hongzhang came under severe political pressure at the imperial court and was forced to abort the mission to educate the boys sent to the U.S. Only two had completed their college education and received their degrees. Over 60 of them were sprinkled in various colleges; Yale had the most with 22, MIT with 8, Columbia with 3 and Harvard 1.

The last contingent was to return to China in September 1881. Before boarding ship in San Francisco, the now young men challenged the local team to a baseball game. The local team couldn’t hit against the lefthander on the Chinese team and lost.

Some of these men found positions in the government. Others built some of the first railroads in China. Others found schools and universities. Among the more notable were Tong Shaoyi and Liang Dunyan.

Tong was one time the right hand man under Yuan Shikai before becoming disillusioned by Yuan’s greed for power. He led a delegation to Lhasa and successfully negotiated a treaty with the Brits that gave possession of Tibet back to China.

Liang was the southpaw pitcher who became Minister of Foreign Affairs. He convinced America to use some of the indemnity funds to send Chinese students to America. He started Tsinghua prep school to prepare the student before sending them overseas.

The book was as much devoted to the life of Yung as the boys he brought to America. By accident, he became the hero of his Yale freshmen class by scoring the equivalent of the winning touchdown in the traditional annual scrum between the freshmen and sophomore class.

Yung met or intersected with the lives of many historical figures. Besides Zeng and Li, Yung met some of the leaders of the Taiping Rebellion and flirted with the idea of joining them. In the U.S. he met Mark Twain and shook the hands of President Ulysses Grant.

Yung was to cross the Pacific numerous times in the service of the Chinese government. On March 2, 1875, he married Mary Kellogg. By then he was in his early 40”s, well past the age when Chinese men married for the first time.

The book did not record whether Yung met Anson Burlingame during his stay in China. There was no question that he and his charges benefitted from the Burlingame Treaty of 1868 which respected the sovereignty of China and stipulated that citizens of each was to protected by the other.

By the time, the last of Chinese mission returned to China, it was just one year before the Exclusion Act of 1882. It was an America radically different from the one Yung first entered.

In September 1898, the famous 100 days of reform came to an end, and Kang Youwei and Liang Qichao, the lead proponents of reform had the escape beheading by sneaking out of China. They did so with Yung Wing’s help.

Yung himself was not so fortunate. His US citizenship was revoked for no justifiable reason and he had sneaked back into the U.S. He died penniless and alone in a San Francisco flophouse on May 29, 1912 less than one year after China became a republic.

The FBI has a checkered history of investigative integrity

The affidavit filed against Leland Yee described the way the FBI skillfully led Leland Yee on with the promise of easy cash in exchange for Yee's promise to commit a crime or two. The undercover agents were most persuasive and Yee's defense would likely have grounds to plea entrapment.

Whether the court will find that FBI had over reached in Yee's case remains to be seen when his case comes to trial. We do know that the FBI has a history of over zealous and bias prosecution of Chinese Americans.

The first major cause celebre was John Huang, at the time a member of the Clinton administration. President Bill Clinton’s political enemies sought all kinds of ways to embarrass him and bring him down. They accused Huang of raising illegal campaign funds from China and elsewhere from Asia to help Clinton get elected.

Huang was eventually allowed resign his post and fade away to his home in California. He was never charged and did not spend a day in jail but paid dearly in emotional stress, drastic reduction in net worth drained by legal bills and the dismay of seeing the dirty side of American politics.

Unlike John Huang who was an enthusiastic campaign fundraiser because he thought he was participating in the exercise of democracy, American style, Norman Hsu simply ran a con by pretending to be a legitimate bundler of big donors. His ability to get closer to major political candidate, such as Hillary Clinton, gave him credibility that enabled him to operate a Ponzi scheme.  He is now in jail.

Wen Ho Lee also spent 10 months in jail based on evidence fabricated by the FBI, even though he didn’t conduct any of the activity he was accused of doing. He was clearly a victim of racial profiling and the desire of Clinton’s political opponents to use anti-China sentiments to embarrass the administration.

In the end, the presiding judge had to apologize to Lee for government misconduct, but nonetheless to justify Lee’s 10 months of solitary confinement, Lee had to plead guilty to unauthorized downloading of confidential information.

Even when the government makes a mistake, the victim pays. The usual approach is to force the victim to plead guilty to some misdemeanor in exchange for freedom and thus justify judicial abuse.

The most recent example was the Bo Jiang case in Virginia. The FBI took him off the departing plane and put him in detention After seven weeks in jail, the government had to let him go because they did not find any evidence of illegal activity except for xenophobic accusations by Congressman Frank Wolf. Jiang had to plea guilty to downloading pornography into his government computer in exchange for the jail time already served before he was allowed to go home to China.

Like Bo Jiang, Dr. Su Haiping was a subcontractor doing work for NASA in Moffett Field in Mountain View. The FBI asked him to take a lie detector test and then abruptly escorted him off the premises. NASA asked that his employment be terminated, but his employer, a NASA contractor refused, because they could not find any fault in Su’s work. Su is now suing the U.S. government for his treatment and when he wins, it will be a major historic event.

Probably the most shameful in the annals of FBI misconduct and government prosecutorial abuse was the case involving Denise Woo, at the time one of FBI’s own agents. Her superior took offense when she indicated that her undercover work could not substantiate his suspicion of the surveillance target being a spy.

Instead of dropping the investigation, he had her prosecuted for allegedly abetting the enemy agent despite failing to find any evidence that the target was an agent of any kind. Woo had to cop a misdemeanor plea in order to get on with her life, albeit no longer employed by the FBI. As for her supervisor agent, JJ Smith, he was later forced to retire after he was found sleeping with Katrina Leung, otherwise known as the central figure of the Parlor Maid affair. To this day, the FBI could not decide as to which country Leung was spying on and for.

There are other cases where the FBI action against Chinese Americans is based on the presumption of guilt until proven innocent--exactly opposite of the due process according to law. 

If you are a Chinese American and the FBI comes calling, it doesn't matter as to subject matter and whether you are the person of interest or merely a third party query, it would behoove you to have ready an attorney standing by advising you of your rights.

What Can We Learn from the Leland Yee Affair?

The arrest of Leland Yee, California state senator, accused of graft, is the latest of a string of Chinese Americans that were ensnared by the FBI, some caught red handed and others that were unwitting victims cornered by a bureau of investigation that frequently acted beyond the laws they were sworn to protect.

In the case of Yee, based on the FBI criminal complaint, he was almost an accidental by-product of a 5-year undercover investigation on a gangster that proclaimed that he has reformed and gone legit since getting out of jail. According to the FBI, Raymond Chow, the main person of FBI’s interest, offered to help Yee in the gun running business and that’s how Yee came to the FBI attention.

According to the affidavit by the FBI agent, Yee was driven by the need to pay off a debt of $70,000 incurred from his unsuccessful run for mayor of San Francisco. Yee faced term limit on his Senate seat and, since the unsuccessful run for mayor, was planning to run for Secretary of State.

Before he could raise campaign funds for his next campaign, he had to pay off his previously incurred debt. Thus according to the FBI, Yee was tempted by the undercover agent into offering illegal undertakings in exchange for illegal contribution to his political campaign.

Yee is now on bail and his attorney indicated that he plans to plead not guilty. The whole story and where the truth lie remains to be told and pending Yee’s day in court.

At this point, the media’s reports on Yee draw primarily from the FBI affidavit in the 137 page criminal complaint and inevitably presenting only the government’s side of the story. Even so, a careful reading leads one to conclude that the undercover FBI agents masquerading as unsavory underworld characters are gifted actors with enterprising minds, excellent in proposing and initiating unlawful schemes to tempt the unwary and those looking for a fast buck.

Apparently Yee in playing the game of trying to be a successful politician faced the constant pressure of having to raise money and fell from grace. By any measure of the way American politics is played today, the amount of money Yee needed to keep him viable was pathetically minuscule compared to the hundreds of millions the upper 1% of 1% can donate to super PACs, and all legal and according to Hoyle.

The US Supreme Court has just ruled that campaign contribution is another form of free speech and should not have to face restrictions of any kind. This will simply mean that politics will be a game only for the wealthy and folks of limited net worth, such as Yee, might as well not get into the game. It's that or find illegal sources of fund and risk going to jail.

The More Things Changed, the More the World Stays the Same

"We are, perforce, one world, mutually dependent upon complex trade patterns and the distribution of diminishing resources."

Does the above quotation seem particularly relevant to today's world? It was actually an excerpt from a novel, Harlequin, written by Morris West. The copyright for this book of fiction was 1974. That's 40 years ago.

The arch villain in this book was someone who ran computer services for large corporations. They didn't have the Internet then. Today, the analogous villain would be running the cloud services.

As they say, the more things change, the more they stay the same. Egad, what will the world look like forty years from now?

When is Terrorism Not?

The item below has been posted on New America Media.
________________

Eight assailants dressed in black wielding knives and daggers plowed through the crowd at China’s Kunming train station, slashing and thrusting at random human targets on the night of March 01, 2014. By the time the carnage ended, 29 civilians died and over 140 injured.

By any civilized measure of humanity, the random killing of innocent people, elderly and children included, qualified as an act of terrorism. Indeed, China’s official newswire promptly reported the incident as a terrorist attack and held the Xinjiang separatist movement responsible for the massacre. 

Western mainstream media such as AP, CNN, New York Times et al. re-reported the story as they learned from Xinhua and other Chinese sources. Since no one from the western media was on the scene, their reports attributed the news to Chinese sources and put quotation marks around the word terrorist to indicate that they were quoting from Chinese reports.

China's People's Daily promptly took umbrage about the use of quotation marks and accused the Western media for harboring double standards. China claimed that when acts of violence took place in the West such as 9-11, the perpetrators were ipso facto terrorists. When victims were Chinese in China such as the slaughter at the Kunming train station, there was a wink and nod intimating that the attackers were freedom fighters.

Indeed when the White House spokesperson were first asked about what occurred in Kunming, she grudgingly allowed that it was an act of terrorism, but only after much prompting from the press corp.

China’s thin-skinned reaction can be explained by a history of one story, two interpretations, i.e., China’s official version and a western version tinged with a dose of anti-China bias. 

In the case of Xinjiang, one clear example of the bias was what happened to the Uighurs rounded up in Afghanistan as suspected members of Al Qaeda. After years of internment in Guantanamo, they were not handed over to China at China’s request but released to some willing eastern European host nation. Apparently the mere possibility of their fighting for the non-existing East Turkestan state was enough to render them less than full-blown terrorists and should not fall into the clutches of Beijing.

Seven days after the massacre, the American consulate general from Chengdu went to the Kunming train station to lay a wreath expressing condolences to the victims of terrorism. Subsequent official statements from the US government also acknowledged that it was an act of terrorism-- without equivocating quotation marks.

China side seemed mollified by the subsequent US response. They seemed ready to turn their attention to the unofficial, informal visit of the First Lady, Michelle Obama, and her daughters to China taking place later this month.

Nonetheless, the world has come to expect the rule of double standards in American diplomacy.

For example, the US is persistent in criticizing China for their record on human rights and for one party rule rather than rule by free election. Democracy is the only acceptable form of government so far as Washington is concerned, notwithstanding the many democracies that have failed or are failing.

Further, the US has not been true to its own pro-democracy stance but has made exceptions when the exceptions were more conveniently aligned to its national interest. Past examples that come to mind: The CIA orchestrated collapse of the freely elected government in Iran and later in Chile because the elected leaders were not to Washington’s liking.

Egypt is a more recent example of American exceptionalism. Mohamed Morsi was the rightfully elected leader until deposed by street protesters which led to Egypt’s military strongman, General Abdel Fattah el-Sisi, to take over. Since Morsi’s support base is the Moslem Brotherhood, not exactly on the White House favorite guest list, Washington is not complaining or interfering.

Ukraine is an even more blatant example. By most accounts, Yanukovych is a corrupt leader and he does not like the West but is pro-Russia and in Putin’s pocket. But he has not been vacated as the elected leader of Ukraine by any legitimate due process. Even so the U.S. couldn’t act fast enough to support the ad hoc opposition in Kiev.

Washington needs to get off the holier than thou, ideology based high horse and work to develop pragmatic relationships based on shared interests. China has to deal with terrorist organizations and so does the US. In a globalized world, terrorists can move to anywhere. Being the two major powers most susceptible to attack, the US and China need to cooperate to more effectively deter terrorism.

Gary Locke's China Legacy is for all Americans

There were strong murmurs of dissatisfaction within the Chinese American community over Gary Locke's performance as ambassador to China. Their disappointment seemed similar to Beijing's official criticism upon his departure--namely too much harping on human rights according to official party line from Washington and not enough effort on being a friend of China.

Expecting Locke to be more empathetic to China's position was unfortunately based on the wrong assumption. He was appointed by the U.S. to represent the official position of the Obama Administration. That was his mandate which he carried out as best as he could. It's certainly debatable whether he is even qualified to represent Chinese Americans point of view steeped in Chinese culture and history. As an American born Chinese, he did not have the necessary background and exposure to Chinese values and he probably did not have the personal inclination to become a bridge to both sides.

Even so, he played a vital albeit unwitting role in the Wang Lijun affair which led to the downfall of Bo Xilai. The drama is not yet over but we may yet find out that in ensuring the safe delivery of Wang to the central authorities, Locke thwarted an attempt to overthrow the current regime and be replaced by a rogue and corrupt cabal. When (and if) all the sordid details of the attempted coup are ever revealed, Beijing may yet acknowledge the positive contribution by Locke and the U.S. government.

As I had anticipated in my blog, written when he was first nominated, Locke's task as the ambassador was more challenging than just any plain old white guy because of expectations associated with his ethnicity that he cannot fulfill. Sadly for him, based on the official lambasting farewell sendoff that he received, he may not even be welcome in the future as a "friend of China." Unlike his predecessor ambassadors, he may have difficulty developing a lucrative advisory practice based on his rolodex built during his Beijing stay.

Ironically, there was even some speculation in Washington circles that Locke could never be counted as a member of the U.S. establishment because there were always some doubt as to "which side he is on." (It happened to the late Matt Fong during his Senate confirmation hearings when he was asked hypothetically as to which side of the Pacific his loyalty lay.)

This won't be a problem for Max Baucus. He is white with many years of service in Congress. Few can claim his kind of inner circle credentials. He will be able to talk to any members of Congress and perhaps alter some deeply ingrained China bashing attitude. He should find receptive listeners in Secretary of State Kerry and President Obama, both former colleagues in the Senate. He has the real potential to construct and strengthen the communications link between Beijing and Washington. 

Chinese Americans should take pride in Gary Locke becoming the first Chinese American governor of a state and first cabinet secretary. He made history by being the ambassador to China, though not quite on par with Anson Burlingame becoming the ambassador from China. Instead, Locke is a role model for all Americans, not just Chinese Americans.

Export Control Reform Remains on the To-Do List

Accelerate sensible US export control reforms. Export controls are an important part of ensuring the security of the United States. The Obama administration should continue its reform efforts that will ensure US security is not undermined while eliminating unnecessary licensing controls on products no longer a threat to US security. Such reforms will boost US exports and help support and create jobs. The United States should move forward more quickly with modifications of non-controversial items even as more difficult reform vetting continues. Those modifications should include items that can be delisted for countries such as China because they are available on the open market from non-US sources. 

The US-China Business Council recently published a list of priorities for the bilateral commercial relations. This is just the third such publication of priorities in its forty+ years of existence as the most influential business organization related to doing business in and with China. One of those priorities that caught my attention is about the need for US export control reforms as I have excerpted in the preceding paragraph.

The suggestion to "accelerate sensible US export control reforms" has been couched in highly diplomatic language, but if one were to read the passage carefully, one would come to disheartening conclusion that when it comes to Federal bureaucracy and export regulatory red tape on exporting to China nothing much has changed.

In Obama's first term of office (around September 2010), the White House announced the intention to reform the existing export control policy towards China. The announcement admitted that the export control procedure has been too complicated and goods for export to China were over regulated. At the time, the announcement was warmly welcomed by American businesses active in China. It was titillating to imagine that reform was finally on its way.

Since then other than Gary Locke leaving the post of Secretary of Commerce to become the ambassador to China, nothing has come to public's attention to indicate that any serious reform has taken place. The February 11, 2014 posting of the priorities from the Business Council continues to suggest that nothing much gets done in Washington.

Cruising the Eastern Caribbean Islands

Earlier this month, my wife and I got on the Celebrity Summit in San Juan, Puerto Rico and headed south along the strand of islands that form a crescent between Puerto Rico and Venezuela on the South American continent.

We weren't much into sun, sand or shopping, the three major themes for most of our fellow passengers (in addition to unrestricted alcohol consumption) but we were interested in learning more about these islands and took in a bit of sightseeing at each port of call.

We were told that the Arawak Indians were the first to inhabit these islands as they migrated by boat from the South American continent. These hunter gatherers were peaceful. They were followed by the warlike Carib Indians, who believed in eating their fallen male adversaries and assimilating the women and children. By the time Columbus "discovered" these islands, only the Carib Indians remained to greet him.

The Spaniards that followed Columbus to the new world were only interested in finding gold to plunder. These islands didn't have any and therefore the Spaniards did not stick around. It took another 100 to 150 years or so before other western powers led by the Brits concluded that the conditions on the islands were excellent for growing sugar cane.

This was before the age of mechanization, and growing and harvesting sugar canes and squeezing the canes for the juice and refining the juice into sugar were labor intensive. The few surviving Indians weren't enough to go around and thus the cheapest form of labor was to bring in slaves from Africa.

The booming sugar industry from the Caribbean islands grew on the backs of massive import of African slaves. More slaves were brought to the Caribbean than were imported to work on the cotton farms of the United States.

The economic importance of sugar has faded and in any case there are other places in the world that can produce sugar more cheaply than on the these islands. Sugar from sugar beets in the U.S. thanks to heavy government subsidy is one of these.

Most of the islands are now economically dependent on tourism. Unemployment is as high as 20%. One indicator of how well an island is doing is the female to male ratio. High ratio, say 5 or more to 1, means that the island has plenty of service jobs and women come from other islands to find work. We were told this by our guide but would require further verification.

While there are certainly a lot of poor folks living on these islands, the climate attracts the wealthy from around the world to buy a vacation home or even retirement home there. One of the more interesting and somewhat unique investment we visited was Stony Hill on St. Lucia.

This villa on a ridge overlooking one of the scenic harbors of St. Lucia is owned by the Soni's. Dr. Soni is no longer a practicing neurosurgeon, having retired from a successful practice on the Caribbean islands. He invested in the property which he developed into Stony Hill. To go with the spectacular view, he cleared the native vegetation and put in a lovely three acre garden around the villa. He and his wife live on the property and they also host weddings and catered to special events to offset some of the cost of living in their private paradise.

View from the terrace of Stony Hill in St. Lucia.