Archive for April, 2011

The Fall of Federalist Empires: Sun Tzu’s Perspective

Wednesday, April 20th, 2011

Throughout  history, empires have fallen apart for 3 basic reasons:

1. War–either defeat by an enemy or waging a prolonged, long-distance war

2. High taxes on the people

3.  Ignoring problems of the citizens while maintaining spending on those in power.

In the Art of War, Sun Tzu emphasized that “war is for peace.”  “War is a last resort.  It should be quick and fast.  Long-distance wars exhaust a country’s resources.  The condition of the citizens must always be a concern. The goal is to keep a strong economy and a united citizenry.” 

The American government has been bogged down recently by the issue of balancing the budget. Rather than identifying the true problems and creating solutions, they have been caught up in locking horns over ideological issues.   No matter what proposals are offered, if they do not see what the real problems are, the so-called “proposals” are worthless. 

Sun Tzu said, “Know yourself; know the terrain.” If you don’t know what the problem is, how can you expect to solve it?  If a tree has a problem, and you confine the discussion only to the leaves, how can you deal with the problem, which may actually emanate from the roots and the trunk?

By now, Americans are disgusted with the political games and want the members of Congress to remember that they were elected to serve the people, not just their campaign contributors.

Sun Tzu said “Know yourself.”   It is time for our congressmen and women to acknowledge that for the most part, they have been serving their special interest supporters rather than the greater good of the country. They continue to cry “Cut the budget,” and  focus on ways to give  Social Security or Medicare the axe.  But no attention seems to be given to the $670 billion dollar military budget.

Sun Tzu would of course support having an adequate military—but not an overextended military buildup to support. That is a budget that can be cut. What kind of war are we actually facing, anyway?  For all the expense, what is the purpose?  Is it really related to strategic interests, or is there a political agenda?

Medical  expenses bilk the insurance carriers and Medicare for reimbursement costs that are far more than the actual, real-time cost of  the service or procedure.  Whether you are an individual paying  insurance companies, or the government using the people’s money to pay, it is still the individual who has money taken out of his/her pocket to foot the bill. Congress could take action to no longer permit the excessively high medical billing that is at the root of the problem. 

  In addition, pharmacy costs equally bilk the public.  Those who have had prescriptions filled in Canada know that the medication costs far less than what the American public and insurers are billed for. Whether the insurance is government-subsidized or paid for by employers or the individual, the escalating payouts always create higher premiums for the individual.

Another obvious solution is that the government could do much more to encourage public education about personal health maintenence and healthy lifestyle to avoid the illnesses in the first place.

In The Art of War, Sun Tzu emphasized the prime importance of maintaining a stable economy to keep a country strong and to avoid the possiblility of civil unrest.  Social welfare costs are another area where costs could be cut.  Data base capability needs to be upgraded to more effectively determine an applicant’s assets, so that people who actually have a comfortable income do not collect government checks. 

Tax reform would certainly close up the loopholes that permit untold amounts of lost revenue to slip through the system.  A simple percentage-of-income tax for everyone, regardless of income, would be a solution.  Not only would it eliminate the loopholes for special-interest groups, but it would eliminate a whole army of  bureaucracy the taxpayers have to support just to process the paperwork in the present system.

Another way to cut expenses and increase revenue would be to close the loopholes that allow corporations to set up headquarters in Bermuda to avoid paying taxes.

All of this boils down to item number 3— the well-being of the citizens. The last thing the people need right now are higher taxes. As stated, the revenue is available—from budget cuts. 

The continually fluctuating prices of gasoline certainly is a  burden to the people.  The price increases usually have nothing to do with the viability of the oil producers or the refineries .  They are more likely the result of greedy speculators on Wall Street. The government has the right to intercede for the best interests of the citizens and, they should do so.

Credit card costs have been squeezing Americans.  Banks have been allowed to offer low introductory rates, and then increase the interest in a matter of months.  In the end, people who do their best to protect their credit by paying the bill have less cash to flow into the economy. Congress needs to take action here, also.

The solution is always evident in the midst of the problem. Therefore, if the Congress really cares about the American people, the  solution is quite obvious: Reduce spending, revise the tax system, get serious about bank regulation and energy speculation.

Y.K. Wong, April 20, 2011

To learn more about Sun Tzu’s Art of War and how it applies to finances and investment, read The Art of War Applied to Wall Street by Y.K Wong

 

http://www.artofwaronwallstreet.com/

Libya: What Would Sun Tzu Do if He Were Alive Today?

Wednesday, April 6th, 2011

Commentators and experts continue to talk endlessly about Libya, despite the fact that no one can really predict the outcome.  What would Sun Tzu, the author of THE ART OF WAR, the definitive treatise on war and foreign affairs, say about the action in Libya?

Primarily, Sun Tzu’s initial words of wisdom are, ”War is serious business.”  He would say that “War is the last resort, to be employed only when all diplomatic means have been exhausted.” 

He would say that “Everything must be taken into consideration.”

He would say that once a decision has been made to go to battle, then the purpose is above all, to win as expediently as possible, and with as little collateral damage to the land and the people as possible.

Sun Tzu would say that if the leader of a country tells another leader to “step down,” then he has to stand by his statement, lest he be perceived as being merely insulting without serious intention. President Obama may have made this “suggestion” hoping that other voices would join his and pressure Mommar Gadhafi into a peaceful regime change. Nonetheless, it is certainly regarded as a challenge.  Now that he has stated his position, President Obama is going to have to stand by it.   Sun Tzu always emphasized the power and importance of “image.”  If the United States backs down from the challenge it has set up, instability and unrest is likely to escalate as other policital forces come forward to fill the void in leadership.

Now that the United States has become involved in Libya, it would be worthwhile to explore the situation from The Art of War perspective.  A primary principle of A of W is to find the enemy’s weakness. In Libya’s case it is the fact that the government is a military dictatorship.  Historically, there is no real loyalty between dictators and their military forces.  in the end, the militaryalways looks out for its own interests, not the dictator’s.  There is always the strong likelihood that the military will turn against its leader if it becomes advantageous. This is the major weakness of the Gadhafi regime.

 In addition, as a result of the brutality of his regime, there is little true support among the population for Gadhafi. Furthermore, the Gadhafis know that militarily they are in the weaker position. When Gadhafi’s son said that the essence of his military plan is “to fight and die here,” he is indicating that he knows they are overmatched.  In fact, years ago, when Gadhafi dropped his nuclear program, under American pressure, that was an indication that he knew he was not in any position to defy the United States. 

Thus the internal weaknesses are evident.  The fact that Gadhdafi’s Prime Minister recently fled to England makes it clear that there are serious problems in the Gadhafi government.

 Sun Tzu says “Know yourself.”  America’s position is stronger because it has the support of the United Nations, NATO, most of the Europeans, plus it has superior military power.  Add to that its noble goal of supporting human rights and democratic principles.  Real trust of America can be gained when the United States is effectively furthering human rights in the world.

In Chapter 13 of The Art of War, Sun Tzu advocates the strategy of using citizens and military officers with grievances against their leaders. “Use the enemy’s own spear to pierce  his shield. Tempt them to go against their leaders. “ Even the Libyan Prime Minister can see the wisdom of aligning with the United States. Those who are fighting for Gadhafi are not religious fanatics who are going to martyr themselves for their leader.

The Gadhafi forces are much more likely to recognize the obvious superiority of the American and NATO forces.  It was one of  Sun Tzu’s principles that display of military strength serves to erode the adversary’s confidence.  It is actually a psychological tactic—which is essentially at the heart of everything that Sun Tzu taught. 

 For Sun Tzu, the psychology of intimidation creates conditions for quick surrender.  Quick surrender reduces the “collateral damage”  0f  loss of life and infrastructure. Sun Tzu was very clear that it was far preferable to gain quick surrender and thereby spare the people and the country itself from undue suffering and damage, not to mention sparing the economic drain and loss of morale engendered by protracted warfare.

If you would like to learn more about Sun Tzu’s teachings in The Art of War, get the most updated translation available today at

  http://www.artofwaronwallstreet.com/ 

 or as an ebook at

 http://books.google.com/books?id=h1OQYbHVbW4C&printsec=frontcover&dq=art+of+war+on+wall+street&hl=en&ei=8xmRTajKNoKctwfXrv13&sa=X&oi=book_result&ct=result&resnum=1&ved=0CEYQ6AEwAA#v=onepage&q&f=false

Y.K. Wong, April 2011