Sunday, January 31, 2010

Have Faith in the System

If you are a first timer, please read the following pieces first. It will provide you with important background information.
1. Why I created this blog?
2. How am I going to operate this blog?

The following is a speech I gave at a local toastmaster club.

I received an email last Thursday for the citizenship interview. I am going to be a United States citizen.

Becoming a US citizen is really hard for an immigrant from China like me. It took me 12 years. Actually, if I earned something really hard, I will treasure it. And often, if I get something out of nothing, I trash it. That's human nature.

According to a Gallup survey last year, 37% Americans consider China to be the world's leading economic power; only 39% choose the United States. I am waiting for the 2010 numbers. And Americans as a whole are pulling their investment dollars from domestic equity funds and putting them into China fund and other emerging markets last year. They voted by their dollars.

In 2009, all my savings stay in the United States. I voted by my dollars and my application for the US citizenship. I believe in the long run, the United States will maintain her status as the number one economic powerhouse because she has a wonderful self-adjusting system. The self correcting system will ensure long term prosperity despite the current economic difficulties.

Three recent events strengthened my faith in the system.

Event number one: The presidential proposal to reestablish the great wall between commercial bank and proprietary trading.

After lessons from depression, people learned that unchecked greed backed by other people's money will cause disaster. And congress passed laws to separate commercial bank and speculative trading. The United States is depression free for 50 years until people began to take it for granted. In 1996, the great wall was torn down. And after only 10 years, the United States had her first real encounter with depression over more than half a century. To save time, I don't even want to dive into the serious conflict caused by peeking into your clients' trading account while trading for your own account.

Event number two: The new healthcare reform.

The link between health insurance and employment is preventing employees from becoming entrepreneurs. If I can find affordable health insurance without pre-existing condition restraints outside my employment, I am more likely to set up my own business and hire people.

Event number three: The election of Scott Brown.

Although the healthcare reform has many potential benefits, the huge cost and pork barrel spending in a high deficit environment worry most people. People elect Scott Brown to break the super majority enjoyed by Democrat in the Senate. And the congress has to reduce the scope of healthcare reform and hopefully eliminate all the pork barrel spendings.

I see a pattern. After fixing a problem, the system goes on smoothly for a while. And then it goes astray and has another problem. Then the system finds a solution to fix the new problem with minimal social and economic cost. Of course, after a while, the system will go strayed again. And I believe, it will find a solution and fix itself again.

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