Unilateral Action in a Multi-Polar World

Right before our eyes, the world has lost its goddamned mind. America's agencies are reducing resources to counter cyberattacks, which is problematic for our allies because we created the systems they're using, along with the backdoors and security deficiencies. To make matters worse, America is dissuading anyone flying on certain Middle Eastern airlines from bringing laptops, which basically shuts down all business class travel--the most profitable seats--on those airlines unilaterally deemed unsafe. Journalists everywhere discuss America's reduced role in the world, and all seems lost for non-isolationists.

Except it's all a brilliant ploy--if Machiavelli is your role model. Without "free" government cybersecurity help, foreign governments have to pay American security companies more money to help them, increasing American economic strength. Those airlines that aren't up to "code"? Well, they'll just have to hire American defense contractors to help them--for a major fee and multi-year servicing contract, of course. Oh, and if certain Middle Eastern countries don't want to play ball in the foreign policy department, we'll demand our more compliant allies bar their airplanes from flying the friendly skies, and just for good measure, institute an economic blockade (here's looking at you, Qatar). 

America is going to rule the world again while shifting costs to our allies. Take that, China. (Don't worry, Mexico, we haven't forgotten about the wall we want you to pay for.) 

Except it's all a terrible idea. At a time when we desperately need more, not less global cooperation, America has chosen to increase hostility. Does anyone know the rules of engagement for cyber warfare? One expert writes that as long as the costs of cyber warfare, including from North Korea and China, don't exceed 2% of GDP, America will not escalate to the physical realm. I imagine the day will come when a politician moves the bar to 3% because we can't predict the outcome if we actually act on our threat to directly attack countries that violate the stated threshold. What's the point of NATO and all the long-term defense contracts being bought if no one can figure out how to create a basic framework for cyberdefense with every ally and customer on the same page? 

What happened to the idea that corporations can think short-term because of rapidly changing competitive issues, but governments exist to act as a counterbalance, to impose order and institutional long-term knowledge? Without being able to formulate the "rules of the game," even in areas that are dead center in the American government's bailiwick, what is the use of government anyway? 

Also, does anyone in the current administration realize unilateral action no longer works in a multi-polar world? America's current Middle Eastern ploy is to encourage China to buy American LNG rather than Qatari LNG by making China's status quo contingent on interfering with a Saudi-led economic blockade against Qatar. (Say that five times fast.) 

If America and its allies try to isolate Qatar, NK, and Iran in 2017, they can still go to Russia or even Turkey, and that's where global politics becomes really interesting. Once major countries get involved in other major countries' political maneuvers in unexpected ways, there's no set playbook. China has wisely decided to use economic statecraft rather than military force to increase its influence, and it appears America will try to make China's economic alliances more complex. What's the endgame here? 

I don't know if any major country has good answers to the current chaotic situation, but chaos, even at a slow burn, should not be the status quo. Perhaps less assurances of stability will spur other countries to beef up their own cybersecurity and military prowess or to pay American corporations more money to do it for them. Maybe it will reduce the need for America's involvement as the world's police patrol, though with most commercial goods still needing transport across various oceans, I doubt the U.S. Navy will be less necessary. 

The problem with chaos as politics is one never knows the end result with any reasonable certainty. Greater disorder may act as a virus compelling white blood cells to multiply--resulting in better protection against the same or similar issues--or it may overwhelm the entire system, creating more and more splinters (Syria, anyone?). It seems current American officials are betting chaos will promote independently prophylactic behavior, or at least an admission that following America's military--and paying for the privilege--is better than going at it alone. Let's hope they are smarter than we are.

Bonus: from Kamrava's Qatar: Small State, Big Politics (2013). 

All of Elizabeth Warren's Questions, Summarized

Elizabeth Warren thinks she's taking on big banks but has chosen to focus on non-core issues--employment incentives and surface conflicts of interest--rather than systemic issues like shadow banking and derivatives. Part of this phenomenon is because shadow banking is difficult to understand from a regulatory standpoint, but also because her political donors, including unions, own stock in Wells Fargo and other publicly-traded banks. (Government pension plans assuming 7% interest rates need Wall Street more than they'd like to admit.) 

Without further ado, below is a summary of Elizabeth Warren's questions from all of her finance-related hearings and cross-examinations: 

1. "Why haven't you read everything on this issue?" 

2. "Why aren't you taking positions on third party reports you haven't read?" 

3. "Why aren't you making generalizations about complex issues?" 

4. "Why aren't you making generalizations about proposed rules that aren't yet public?" 

5. "Why aren't you making general statements about all banks and instead taking a more measured case-by-case approach?"

You're welcome. 

Bonus: Here's what I would have asked Mr. Randal Quarles: 

Mr. Quarles, you have vast experience in the financial industry. As we both know, derivatives and shadow banking continue to be serious problems. I've noticed legislators do not focus on these two issues and instead choose to raise relevant but non-systemic risks. Please tell us what you believe are the top two systemic risks in the U.S. financial system today, and what can we do to minimize those risks. If shadow banking and derivatives are not part of your top two systemic risks, please address those risks as well. 

I've wondered why so many legislators do not focus on systemic risks. Part of it must be that such risks involve trillions of dollars and are so large--one might say, "too big to fail"--regulation is difficult. If true, such reasoning would seem to mandate greater focus on systemic risks, not less. Also, is regulation difficult because so many of these risky transactions take place abroad and require multi-party legislation? For example, if LIBOR and reinsurance are involved, wouldn't some cooperation be required between D.C., the U.K., and the EU to accomplish any effective regulation? If so, should legislators work more closely with international counterparts directly rather than rely on international bodies such as the Basel Committee and the IMF? 

Guess Who?

I ran across this page in a poetry book recently. You probably won't guess who it is, unless you're very familiar with his or her work. 

Political Cowards: Alameda's Malia Vella

The internet should have ushered in a new era where everyone could more easily access their politicians. Direct democracy could flourish, and voters would become better-informed, freed from the shackles of BigCorp media.

Of course that's not what happened. Instead, most American politicians, beneficiaries of gerrymandering, avoid online debate whenever possible, reasoning there's no upside to engaging with voters who challenge the prevailing orthodoxy. Why not limit your exposure to puppies and t-shirts printed with #Resist instead? In fact, that's partly the approach union-supported politician Malia Vella has taken when called out on her divisive rhetoric. Her Twitter account proclaims herself "Alameda City Councilmember, Wellesley Woman, Teamster, Lawyer, Educator, Culé, Art Lover, & Pragmatic Optimist." (Note: Wellesley is Hillary Clinton's alma mater.) Below is one of Malia's Facebook accounts. 

When I called out her prior mocking use of the hashtag #unionthugs on her personal FB page--which often replicates her official political page--she blocked me rather than engage. When I posted on her Alameda City Council page, she ignored it. Sadly, most American politicians today are mealy-mouthed risk-takers who would make the meekest accountant proud. Such behavior explains why so many Americans outside of California adore Trump. When your alternative is no discourse, any discourse is preferable.

Below are a few snapshots from the discussion--you'll see no admission that her prior conduct was wrong, or an acknowledgment that some voters' concerns about union coercion are legitimate: 

And that's when it got interesting. You see, Malia and are former law school classmates. We're trained to debate and use logic. My point is you cannot complain about Trump's language online while engaging in similar propaganda tactics yourself.  




Let's analyze Malia's logic. She's correct that not everyone associated with a particular incident is required to comment about the topic, but she still doesn't get it. A politician who has mocked people--including Trump, who's challenged labor unions' corruption--can't wash her hands clean when someone presents evidence that maybe, just maybe you shouldn't mock legitimate issues, especially when they concern the special interests who helped get you elected?

By not engaging publicly and by relying on carefully tailored images rather than practical issues to engage voters, politicians have created their own safe spaces. Meanwhile, in other countries, Cebu City's Tommy Osmena takes on all comers on Facebook and demonstrates no fear.

It is stunning that other countries have taken America's ideals of free speech and rigorous debate and utilized them better on American-owned social media than most American politicians. California in particular seems to attract a large share of political cowards because it's a one-party state. It wasn't always this way. 

When a questioner called out JFK's Catholic religion as potentially problematic, his supporters in the crowd jeered at the woman who questioned his loyalty. It was JFK himself who calmed the crowd, insisted on answering her question, and then delivered an inspiring response. Today, liberal American politicians claim to appreciate and even to idolize JFK while taking no risks whatsoever in political discourse. Meanwhile, voters worldwide have spoken. Except for the UK's Theresa May, they have demanded authenticity, even at the expense of civility and pragmatism. Admittedly, their choices seem atrocious when compared to the genteel politicians of yesterday. And yet, given the choices they've had, especially in California's political echo chamber, their approach makes sense: bravery over cowardice, bluntness over political correctness. Perhaps there's hope for the future after all. 

Bonus: from Alta Magazine (2019), 

April 2019

Margarito B. Teves: an Incredible Man

It's no secret I despise most politicians. The modern political era seems to have followed a path from the genteel general (Eisenhower) to blunt brutes (Nixon, LBJ) to charismatic rakes (JFK, Gary Hart) and now to bombastic idiots (too many to list).

Once in a while, though, the universe throws my misanthrope self a lifeline. I've just been gobsmacked by a former finance secretary I randomly ran into. I was going to Cebu's local casino--a great joint by the name of Waterfront Casino--when I happened to see a seminar of some sort. I saw the words, "economics" and "federalism," and after asking permission, walked in just in time to catch the final 10 minutes of Margarito Teves' speech.

I couldn't believe my ears. Every single word was practical and made sense. I blinked a few times to make sure I wasn't somehow experiencing the reincarnation of Lee Kwan Yew, but there he continued, making sense. As far as I know, no hashtags, selfies, or filters were mentioned during his speech. When questions were asked, he answered every single one of them directly. Who was this man, and how did he make it in politics?

It turns out he's the former Secretary of Finance of the Philippines. (You might think any man of his stature would automatically be honorable or interesting, but I've listened to Ben Bernanke at MIT and struggled not to fall asleep. The students must have agreed, because students started tossing around a beach ball in the middle of his speech.)

Upon doing more research, it turns out Mr. Teves might have actually saved the Philippines from financial disaster in 2008-2009. His background seems tailor-made for the perfect storm that occurred then: banker, economist, and lawmaker. Somehow, despite reading about economics voraciously since the age of 17, I've never heard of him. Isn't that interesting? The world prefers bombast, but the steady dignity and wisdom of men like Mr. Teves are what make the world go 'round.

During the speech, I went to the mic to ask a question. I obviously looked out of place being the only non-Filipino there. While Teves continued answered the previous question, an emcee named Dan stopped me from asking a question and told me he'd call security if I insisted on asking one. I explained I was a lawyer from California and I wanted to make a comment to Teves about his speech. The topic, after all, was "federalism," not just economics. He again threatened to call security. At this point, I had no idea who Teves was--only that I was amazed to be in the presence of such a practical, well-spoken man. (The only other person who's had such an impact on me was America's Julian Bond.)

I called Dan's bluff and stood at the podium and waited until Teves sat down. I shook Teves' hand, telling him, "I didn't hear your whole speech, but I wanted to thank you for your practicality. I wasn't able to make a public comment, but I'll just tell you we have no one like you in America now. We are falling apart because we lack men like you, who follow the successful Singaporean model of practicality before ideology."

Being a gracious diplomat, Teves told me he had no control over who could ask questions and invited me to talk to him after the event ended. I thanked him again and not wanting to bother anyone at his table, I went over to the emcee who'd prevented me from asking a question, shook his hand, and whispered in his ear, "You're a disgrace to Filipinos." (Filipinos are generally the most gracious and open people on the planet.) The emcee started squeezing my hand as hard as he could, but being half my size and lacking any athleticism, he wasn't able to accomplish whatever purpose he intended, couldn't muster any sort of witty response, and I slipped away and left.

The world today is filled with too many jackasses like emcee Dan and not enough gentlemen like Teves. It is of course Dan, of all the people at the event, most of whom were kind and open, who was chosen to work the microphone, proving again that until introverts rise up and master public speaking, the world will continue to burn under the weight of bombast and irrational fear. Ultimately, unless the West figures out how to attract and keep more men like Teves, Western politics will continue to devolve, and Asia will continue to rise--as long as it keeps men like Dan away from important matters. 

© Matthew Rafat (2017)

10 Reasons to Avoid Cuba (Part 3)

Part 1 is HERE.  

Part 2 is HERE. 

7. Castro's Revolution Has a Dark Side

We've all seen Fidel Castro in military garb, and he has legitimate claims to fending off CIA-backed fighters post-revolution. The problem is what he did after the revolution. As Orwell warned in Animal Farm, revolutionaries have a habit of becoming like previous overseers once in power. An excellent graphic novel, Cuba: My Revolution, shows post-revolutionary changes most people never see. 

"Leaving Cuba is not easy. The regime makes you quit working as soon as you apply for a visa even if it takes years to get it. An inspector inventories all your belongings. When you leave, all bills must be paid, your house left fully furnished, and your car turned in to the police station." 

"Fidel has abolished Easter, Christmas, New Year's Eve, and [the Feast of the] Epiphany." [Note: Fidel did not want holidays to interfere with the all-important sugar harvest. Cuba eventually allowed Christmas celebrations in 1998.] 

"I'm losing the pharmaceutical company. He's [Fidel] nationalizing everything. No one can have more than $800 in savings and all private practice will be abolished eventually." 

"UMAPs are camps established to eliminate counterrevolutionaries. Homosexuals. Jehovah's Witnesses and others are sent to remote areas, and sentenced to forced labor."

Bonus, from Wikipedia: "The UMAP camps served as a form of alternative civilian service for Cubans who could not serve in the military due to being, conscientious objectors, homosexuals, or political enemies of the revolution. The majority of UMAP servicemen were conscientious objectors... about 8% to 9% of the inmates were homosexual men, Jehovah's Witnesses, Seventh-day Adventists, Catholic priests and Protestant ministers, intellectuals, farmers who resisted collectivization, as well as anyone else considered 'anti-social' or 'counter-revolutionary.' Former Intelligence Directorate agent Norberto Fuentes estimated that of approximately 35,000 internees, 507 ended up in psychiatric wards, 72 died from torture, and 180 committed suicide." 

Some revolution, huh? 

8. Nothing Works Consistently in Cuba So Let's Dance Everybody

The prevailing image I'll have of Cuba is the owner of a small bakery holding his head in his hands. 

After a second day of heavy rains, the power went out--again. His bakery sells perishable items, including ice cream. The portable generator didn't work, and he propped the door open to prevent heat from destroying inventory. I wanted to take a picture of the owner but it felt inappropriate. Here he was, doing the best he could, selling excellent products, and it didn't matter--Havana's infrastructure was so poor, no matter how much he prepared, he could suffer losses quickly and unexpectedly. A handwritten sign on the wall asked, in English, "Looking for an investor." 

When small businesses start, they must find the cheapest rents--or the most comfy garages.  They do not get to start up in nicer locations, and if they do, their choice of increased costs might be one reason so many small businesses fail in the first four years (though such statistics are skewed by high-earning professionals creating a "fun" side business to a take a loss against income, then closing it after a few years). It takes time to build a book of business and loyal customers, and most business owners expect to lose money the first two years. 

In my case, when opening a solo law firm, I bought all my furniture from Goodwill and a consignment center and found a cheap annual lease in one of the oldest buildings in the city. (Tip: research the minimum lease period your state and city require for 60 or 90 days' notice to evict without cause, or you might have to move after just 30 days if you have a fickle landlord.) Despite no upgrades in many decades, things still worked. I knew the elevator would work almost all the time, the power would always be on unless the entire city went dark, and so on. It took a long time to get my business telephone and fax lines connected--and far too much money--but they got connected after about two weeks. (I disliked AT&T for many years after getting my costly business lines and eagerly hoped Vonage would gain momentum, but the quality of calls on Vonage was never very good--at least then. Today, I wonder how much the excessive cost of the business lines was due to a tax or fee imposed by the city rather than AT&T.) 

In any case, because of decent infrastructure, I could focus on work. Most importantly, I could open a business without needing to take out loans (I already had student loans), choose a fairly dismal location, and still compete with the rich, established folks in nicer areas. I had to charge lower prices, but that's the flywheel of business: you start out charging little and focus on learning as much as you can, and you can become an expert without needing to be profitable right away because you can pay lower set-up costs somewhere, and things still work. Even in one of Havana's most affluent neighborhoods, things did not work. The flywheel of small business creation, backed by enthusiastic elbow grease, couldn't get moving. 

In such an environment, where you cannot improve even if you work hard, why bother? Why not just dance and sing? 

9. Cuba Does Have Magic

It's not all bad. One humid day, I wanted an ice cream sandwich and asked a neighbor where I could find them. (Without WiFi regularly available, everyone relies on each other for information.)  He thought a store two streets down might have one, but they only had one flavor of ice cream pints, not the famous ice cream sandwiches (aka bocaditos de helado). 

Mmmm, crunchy coating

Before leaving the apartment complex, we had asked around about ice cream sandwiches, and another neighbor suggested the store we visited. On the way back, my neighbor called to a few people on their terraces in Spanish, asking them where we could find ice cream. When we got to the apartment complex, he took me to his apartment, and lo and behold, his little brother was on a small stool in the kitchen, happily scooping ice cream out of a generic tub. Somehow, in 15 minutes, the neighborhood had heard my Cuban neighbor's request and gotten his family ice cream. Show me any other country where that happens. 

My first day in Cuba, when I mentioned I wanted to try Cuba's famous bocaditos de helado, my landlord called out in Spanish through a window and then took me to the narrow hallway between my apartment and the one next to it. An outstretched hand awaited us with a bocadito de helado. The neighbor's side hustle was selling ice cream sandwiches. I exchanged money for ice cream without seeing her face because the alley was too narrow to have a proper introduction. 

I eventually found a place selling ice cream sandwiches with multiple flavors about a mile away, but the sandwiches didn't taste as good as my neighbor's. It's hard to compete with the first impression of an unexpected hand outside a window, offering ice cream. 

10.  Competition and Choices

The Dominican Republic, which also has beautiful beaches, is near Cuba.  Why visit Cuba when you can visit Caribbean beaches in a more comfy environment? 

Dominican Republic. Not Cuba. 

Conclusion

So I suppose I lied. These are not ten reasons to avoid Cuba. They're only nine. I visited Cuba when I was 39, the same age as Che Guevara when he was executed. Had Che lived longer, he would have learned that revolutionary ideals need sound economics and sustainable trade agreements to flourish. To be fair, America and other debt-ridden capitalist countries aren't exactly shining economic models, either. Maybe in the end, whatever label you give any system, it all decays because you're just following someone else's idealized version of society rather than your own moral conscience.

© Matthew Rafat (2017)

Cebu, Philippines: Osmena's Good Governance as a Lesson in Urban Planning

I'm in Cebu, one of my favorite cities in the Philippines. I'm not a beach guy--I prefer waterfalls and forests. If you like diving, Cebu is near Apo Island, but I prefer the forest in Bohol/Panglao, and the waterfall and hike in Kawasan Falls. 

It was the only clean shirt I had that day, I swear. 

I visited Cebu almost exactly one year ago, and it's clear Mayor Tomas "Tommy" Osmena is doing a great job. 

The airport has improved, and traffic conditions have improved since last year. It's challenging to maximize land value without resorting to the usual tactics: build hi-rise condos and neglect parking (ahem, Manila); allow the same generic malls to sprout everywhere, which also increases traffic congestion (ah, Bangkok); and forcibly remove existing residents who lack title to their houses to make way for "progress." 

Developing countries tend to have more poor people than developed countries, but unlike America, the so-called poor aren't as stressed because they tend to have cheap transportation options (e.g., rickshaws, jeepneys, habal-habals) and stable housing, the kind that use corrugated aluminum as roofs. We'd call them "shantytowns," but I call them "Stress-free, non-mortgaged, multi-generational housing." (Say that ten times fast--I dare you.)  

The view outside my Airbnb condo in Cebu.

In fact, most mayors worldwide can be judged on one question: how do they increase land values without selling or leasing too much land, especially beachfront land, to foreign interests while balancing the interests of existing residents, many of whom lack official title to their housing structures but have lived there for decades?

Here's where regulation plays a key role. Mayor Tommy Osmena, along with the national Philippines government, requires new housing and condo units to have a certain percentage of land for open space. Most developers use the open space for swimming pools, small trees (a must-have in humid climates), and basketball courts. This regulation avoids the "Manila problem," where every other block appears to have new skyscrapers being built year-round but no new roads. 

While Mayor Osmena has allowed major malls to be built, he's wisely chosen diversity in developers. It's not just behemoth developer Ayala (OTC stock tickers: AYALY, AYAAY) in Cebu, but also SM and Robinson's. Osmena is luckier than most--Cebu is near the water with a port and lots of open space. The newest mall, SM Seaside, is one of the largest malls in the world, but it's in the middle of nowhere--near mostly undeveloped seaside. As a result, Cebu has managed to accomplish the ideal development trifecta: go big, thereby increasing potential tax and other revenue; use land without displacing residents; and ensure sufficient parking. SM Seaside now has excellent private bus service, jointly owned by two entities, one in Manila and one in Cebu, minimizing upfront capital risk and increasing management expertise. Technology is another way to measure a city's progress, and the private buses here operate on a fairly hi-tech payment system: riders need to purchase payment cards that can be used at multiple locations, including retail. 

To appreciate why I call a simple bus card "hi-tech," one must realize San Francisco, one of the most expensive cities in the world, still allows cash for its buses, segregates each of its transport options (BART, Caltrain, etc.) on different systems, and doesn't allow its cards to be used for retail purchases. In fact, to top up a BART card, one usually goes to a brick-and-mortar store to purchase credits, indicating a relationship between the retailer and the transport authority--but without the ability to use the card in the store. One gets the feeling Americans don't understand capitalism at all, or at least not as well as developing countries. Meanwhile, Hong Kong has a single "Octopus" card that can be used in the subway, buses, and multiple retailers. 

Governments worldwide benefit by lowering or eliminating the use of cash, which reduces money laundering while consumers benefit from convenience and negotiated discounts from retailers who enjoy another advertising venue. There are tradeoffs, of course. Privacy issues exist because as governments promote a cashless society, they could potentially track anyone's spending as well as location history. (The day indebted governments sell everyone's data to balance budgets might not be too far off.) Spending on outside software and security firms also increases, creating potential conflicts with entrenched special interests. Forward-looking governments will pay equal attention to security and privacy issues or eventually lose credibility. 

Mayor Osmena's next challenge is increasing Cebu's port business while maximizing the nearby sea's potential as a tourist destination. Unlike Seattle, which is too cold to have to worry about the latter goal, Osmena has a wealth of options. In fact, I'm already a bit sad because I notice more cars and foreign-owned businesses in Cebu than before, indicating the character of the city might soon change. 

Korean Spa -- one of the many Korean-owned businesses in Cebu. 

Excellent coffee here. Note the small print: "koreaberry." 

As more business-minded players enter any communal culture, they favor more rule-oriented employees. The worst ones take advantage of local workers, demanding they do unpaid out-of-scope work to keep their jobs. Yet, even the best business owners must generate a return on their investment, and many are absentee landlords or joint owners with outside interests who rely exclusively on P&L statements rather than long-term relationships or customer service to measure success. If you don't speak the language and don't live in the country, it's difficult to think long-term. The monthly P&L statement prevails. That's why foreign capital is so tricky--without it, most developing cities cannot grow or produce better-paying jobs as quickly, but too much of it changes a city in undesirable ways. 

Here's where additional background might be helpful.  Cebu is derided in the Philippines as being "countryside," similar to the way coastal Americans portray rural Southerners as "hicks" and "rednecks." People here even have their own dialect, Cebuano, which isn't commonly understood outside the region. Despite their negative reputation, I've had excellent hospitality here, and I have never received poor customer service. My Airbnb landlord just added a brand-new bed after I pointed out her advertised listing didn't match my room's layout. She said, "It was an honest mistake." Cebu is one of the few cities where I'm inclined to believe her. 

I should point out she's from Cebu and lives in the city, so she has a direct interest in preserving the city's reputation for hospitality. As more foreign owners--as well as domestic owners subject to greater foreign competition--change the incentive structure from the cultural norm of "Make the customer happy at any cost, even if it creates lower profits," to "Maximize revenue from each customer," I sense rumblings in the air.

I'm sitting in a cafe I used to frequent a year ago. One of its employees was leaving to Australia for short-term work and another had a birthday. When one of the owners found out I was leaving Cebu, they added my upcoming departure as another reason to throw a going-away party. The party was wonderful, and I got to hear fascinating stories from the people who attended. The cafe I'm in now is not located in the same place. It moved next to a hotel that doesn't serve breakfast, filling a perceived need. By coincidence, the employee who left to Australia recently returned, is married to an Australian, and is waiting for the Australian immigration authorities to clear her return. It's obvious the other employees--whom I don't know--don't have a clue how to make a decent espresso. They hovered over her while she prepared one for me. 

Two other employees from the original location no longer work in the cafe. I Facebook messaged them and was told one the owners suddenly wanted them to clean their houses. When they refused, they were fired. "We apply for barista, not house keeper... They got angry when we refuse to do... It's not part of our job... Thanks for remembering us."  Although Philippine law apparently requires a small severance to be paid if forcibly dismissed, only recently did the owner pay the employees the required money. (Correction: the owner agreed to pay the required severance but "until now [sic] she did not give it to us." They have not been paid yet.) 

The cafe's new menu is more limited than before, its breakfast less hearty, and its WiFi more spotty. The new employees also lack the camaraderie of the old location. One of them is taking a nap in her chair. No one talks to each other for long stretches of time, in stark contrast to the previous environment. No P&L statement will show this reduction in quality, nor the fate of the two employees who were forcibly removed, who are unemployed. I will not be back. I've been here for three hours, and only one other customer came. It's obvious the new location was chosen to prioritize breakfast at the expense of everything else. What happens if the hotel decides to add its own breakfast? In a country where labor is plentiful and cheap, such a development is more likely than not. 

Although not immediately obvious, when Americans talk about socialism vs. capitalism, they are talking about the erosion of communal ties and the displacement of informal obligations as P&Ls and ROI take precedence over the old ways. Without expressly realizing it, civic-minded people are also concerned about a system that lacks incentives for long-term thinking and therefore makes each individual more dependent on random forces and events.  They may use other names to describe their problems--immigration, elitism, globalization, precariat--but at the end of the day, they mean the shift from long-term to short-term thinking and the reduction of the power of the honest individual, even in local affairs. The large-scale political battles in developed countries are encapsulated right here, in the story of a small cafe in Cebu. 

Cebu's undeserved reputation as a city of bumpkins also makes me wonder if big city folks use their advantageous media connections to put down potential competitors. In a world where global capital is always looking for investment opportunities, every city competes with each other, and reputation matters. 

This brings me to my final point: I'm appalled by American media's unfair portrayal of President Duterte. Once you understand politicians in developing countries should be judged by how they've run their cities, it's obvious why Duterte is so popular. As the former mayor of Davao City, he cleaned up the entire place and changed it from a corrupt backwater into a safe tourist destination. Yet, like Batman in Gotham City, he's maligned by journalists who don't understand how things work. (Side note: I'll single out Costa Rica's Alajuela as another well-run place, and I hope Mayor Roberto Thompson enjoys a long career. Like Cebu, Alajuela enjoys status as a mid-sized transport hub. Is this a favorable pattern?) 

The more I travel, the less I rely on mainstream media for anything. In most cases, your own two eyes will give you all the information you need. Right now, my eyes see vast potential in Cebu, but also a changing culture. How will this story end? 

Bohol / Panglao

Bonus: Tommy Osmena's Facebook post on July 4, 2017 is a work of art. He explains everything in a matter-of-fact, clear, and practical way. Some highlights:

On Garbage Collection Difficulties and Corruption: "I would like to assure you that your government is doing the best it can with what it has... Please allow me to explain. There are two major capabilities to consider when discussing garbage: collection and disposal..."

He goes on to discuss a web of incompetence and corruption, insinuating the previous mayor may have been in the pockets of Chinese companies: "The previous mayor purchased P175 million worth of Chinese garbage trucks and now only 18 out of 52 are in running condition. All are faulty and many are beyond repair." [That's right--Osmena is such a bad-*ss, he's calling out Chinese manufacturing on Facebook, hitting China right where it hurts: its perceived reputation--sometimes deserved, sometimes undeserved--for faulty production.] 

Look what he writes after his detailed explanation: "So those are our problems. What do we do to solve them?" He goes on to offer many practical solutions.

Have you seen any American politician with such common sense and clear prose? Are we sure it's the Philippines, not America, that's a so-called "third-world" country? If so, maybe America needs to learn from "developing" countries.

On Taxes: "I will not tolerate a family of billionaires who think they can pay 35 pesos for a whole year. I will fight. They did not elect me, you did. And you did not elect a coward."

Did you get goosebumps? I did. And it gets better: "If you cheat our city, I will kick your *ss." (Cue "Eye of the Tiger.")

I predict Tommy Osmena will become president of the Philippines. I'm not sure when, but it will happen at some point after Duterte's maximum term expires. Hopefully, sooner rather than later.