Many people write or speak to tell us what we should think. Some want to be believed because they are experts, or think they are. Some want to be believed because they claim to speak for us. Some have had revelations. Others want us to trust them because they communicate through prominent media outlets. Many tell us what we should think. I write to encourage my readers to think for themselves. I write to ask you to inquire. Question me. Have fun.

  
Comment of the Day
The Editorial Board should have no opinion

Jul 11, 2020

The WSJ Editorial Board expressed its opinion about the case of Michael Flynn. It does not matter what they said; in my book, the Editorial Board should have no opinion on any topic. Editorial boards’ job is not to lecture, but to facilitate views from individuals who can present valid arguments. The Editorial Board's job at the WSJ is to guarantee to me, a subscriber, that the different opinions presented are fact-checked. I pay a subscription for the WSJ because I do not have the time nor the means to fact-check whatever is written and posted on the internet. I do not pay for the subscription to be brainwashed by whatever the self-anointed authority of the Editorial Board believes is right. I can make my judgment based on the facts and their interpretation by other individuals.

PREVIOUS COMMENTS
More parenting is needed
Aug 01, 2019
Peter Gray in Psychology Today advises for less parenting. The problem is exactly the opposite: There is not enough parenting. In the past, when most of our ancestors lived in self-supporting households, often a farm, out of necessity, children were an integral part of whatever adults needed to do during their daily life, and they learned that way. Now, we do not need to do as much at home. Work is outside the home, food is brought in, heat is turned on and off, and mysteriously magical, colorful screens are the center of most activities. If we leave children free to explore what they find the most attractive, they will play video games. There might be some educational value in it, but one needs to learn much more. Hence, we need more effort in parenting, with parents doing more in the home than is otherwise required, and spending more time with children outside in order to introduce them to the real world. This realization hit home after I witnessed the surprise of a 7-year old seeing apples on my apple tree.
More
Less fight more work
Jul 30, 2017

The fight over Obamacare repeal is over, at least for now. The GOP can start to work on a new proposal that each of us can look at it, and then compare how my particular health care solution would play in it, as compared to Obamacare. In a television interview, HHS Secretary Tom Price said that Obamacare “may be working for Washington, it may be working for insurance companies, but it’s not working for patients.” Maybe it is time to consider patients’ involvement in the preparation of an Obamacare alternative? It could be that Obamacare repeal failed just because it has been prepared by Washington with consultation from insurance companies. Let us start with addressing 19 health care issues that politicians avoid talking about.

More
How to pay for the wall?
Apr 04, 2017

If you want to build the wall, pay for it with your own money. How much of your own money are you willing to donate? Trump received 62,979,879 votes. If each of Trump’s supporters voluntarily donates at least $1,000, which corresponds to about $42 per month for the next two years, and if we encourage those who are more affluent to double their donations, then Trump can have on hand about $100 billion, which may suffice for a substantial piece of the wall. Hence, all of you who are talking loudly about spending my money on building this wall, stay away from my wallet, but open your own wallet and send money to the “Build the Wall Fund.” Put your money where your mouth is.

More
What is wrong with Russia?
Dec 22, 2015

It appears that Russian leaders cannot free themselves from the medieval concept of regional influence, where weaker neighbors were subdued into becoming serf states. Is anyone capable of explaining to them that in these times of a global economy, any influence comes from economic strength? Russia, thanks to its size, natural resources and well-educated labor force, has everything that it takes to maintain a dominant position in the region, just by maintaining free trade with all its neighbors. It can do so without military interventions in Georgia and in Ukraine. Russia has everything that it takes to be a respected wealthier neighbor, to whom everyone in the region would turn for help when needed. Instead, it is a bully and a hooligan. It would take so little to change that. But it is so hard for Russia to do it. 

More
Closed mind for closed borders
Nov 19, 2015

Known to some as a libertarian, Llewellyn H. Rockwell Jr. speaks against open borders. His argument is that it is an infraction against private property. He misses the point that most people migrate just because Mr. Rockwell’s neighbors want them on their private property – for picking apples, washing the dishes or writing a computer code. Then, Mr. Rockwell wrongly laments that those foreigners invited by his neighbors violate his private property rights by loitering in the public spaces that he frequents. He wants the government to deny the rights of his neighbors to do on their private property whatever they wish, so he will not need to face immigrants in the public spaces. Mr. Rockwell left the train called “liberty” at the station called “xenophobia.”    

More
They do not know…
Sep 14, 2015

Mr. Trump says: “A lot of what I’m doing is by instinct.” I prefer that our President would make decisions based on systematic due diligence. The instinct that guides Mr. Trump in his professional life arrives from his vast experience, starting when he was growing up under the mentoring of his successful father, followed by a solid education and years of practice. Mr. Trump's confidence is misguiding, as it gives his supporters the illusion that someone who mastered real estate dealing can be equally skillful as President. It is similar to the illusion surrounding Dr. Carson, that he can be as good a President as he is a brain surgeon. If both gentlemen were humbler, they would realize that they qualify to be President equally as much as Mr. Trump qualifies to conduct brain surgeries and Dr. Carson to run Mr. Trump’s real estate empire. The problem is not that they do not know many things they should; the problem is that they do not realize that.

More
More Comments

A wrong way about Huawei

Or why the Wall Street Journal does not tell it like it is?

In a recent article, the WSJ details how Huawei was propelled by Beijing’s billions. In the online version, the WSJ editors mark this text as a news exclusive. Indeed, the WSJ did extensive research estimating exactly how much help Huawei got from the Chinese state. It should not be considered news that it was a lot, because it is commonly known that the Chinese government heftily supports businesses perceived as pivotal for the strength of its nation. The numbers brought out by the WSJ are most likely true, but the article is not news at all. It is an opinion piece but, by not putting the numbers into a broader context, it is not journalism either; it is finesse propaganda.

From zero to one
On every possible occasion, Huawei leaders bring up that the company is still relatively young, starting literally from nothing in 1987. Ren Zhengfei, its founder, in every step acted exactly as Peter Thiel advises startups to do in order to succeed. With an obsessive perseverance he looked for and then executed opportunities of unexplored market niches, obtaining, at least for some time, a dominant position. When in the 1980s China began promoting private enterprises, every new business needed a small phone system. Every municipality in China needed to upgrade its obsolete phone systems as well, and so did the Chinese military. Mr. Ren determined whatever was the best in the world in this category, and as every startup in this position, he did reverse engineering and figured out how to manufacture in China the phone switches that were suitable and affordable for the local market. Huawei hit the sweet spot in the market, going primarily after small businesses and rural municipalities, mostly dismissed by the major market players. After getting some market presence, the bigger contracts arrived, including a pivotal contract from the Chinese People’s Liberation Army (PLA).

From the early days, the focus of Mr. Ren was not on acquiring existing technologies but on taking “wheels” that were already available and inventing the new ones. When entering the wireless telecommunication technology, again, Huawei focused on edge markets, mostly in rural communities, this time all over the world, and gradually expanding into major networks. Huawei became the dominant worldwide vendor of cellular switches and antennas. According to the WSJ, in the first three quarters of 2018, it provided 28% of all 4G equipment installed worldwide.

In 5G, Huawei is the world’s leader
The WSJ did not ask the most obvious question, how the American telecommunication industry lost its dominant position. Instead, it took a magnifying glass to find out if Huawei, a Chinese company, had been playing by American rules. From the start, it omitted the fact that, when looking for the technological advantages of future technologies, in 2009 Huawei spotted the work of professor Erdal Arikan, a Turkish scientist with an engineering degree from Caltech and a Ph.D. from MIT. From the earlier WSJ publication, we know that its editors knew about this key factor. Mentioning this detail did not fit the thesis of the article, that Beijing money, not business acumen and hard work, had propelled Huawei.
The art of digital communications boils down to compressing data and then sending it with as few errors as possible. The key theory quantifying how it could be done had been formulated by Claude E. Shannon in 1948. As a student, professor Arikan was interested in some aspects of Shannon’s theorem that could make communication networks more efficient. He developed his ideas in his doctoral dissertation at MIT in 1986 and presented the final concept in an article published in 2009, discovering the so-called polar code. Interestingly, at MIT professor Arikan worked under the supervision of professor Robert G. Gallager, who was under strong influence of Shannon; first as his student, then as the junior colleague at MIT. To make things even more intriguing, in the 1960s professor Gallager invented the Gallager code, which did not find a practical application until the late 1990s, and now, known as a low-density parity-check (LDPC) code, is commonly used in digital data transmission. In particular, when it comes to standards for 5G, LDPC is the major alternative to the polar code invented by professor Arikan.

When asked which code is better, professor Arikan answered diplomatically that it depends on the application. Huawei bet that the polar code is the best for 5G. After years of work, in 2016, in lab tests they got speeds as high as 29.3 Gbps. Judging from the tremendous political pressure from the United States, it appears that experts agree that the polar code is the way to go with 5G. Although Americans had prior inside information about its development, Huawei swept this technology from under Americans’ noses. Now, as WSJ confirms, Huawei holds most of the key patents and is at least one year ahead of its competitors in having 5G switches ready for deployment and they’re cheaper than others’. On the top of that, Huawei spends a tremendous amount of money for research and development, $15.3 billion in 2018. In short, it has no meaningful competitor worldwide, and there is no one around to challenge its position in the foreseeable future.

As it is
This means that in the strategically important telecommunication technology, the United States lost its dominant position. The challenge for American political leaders is that this loss is to China, which clearly aspires to use its newly gained economic power and technological advancement to increase its political and military position in the world.

In wireless telecommunication systems, prior to 5G, the progress was measured in enhancement of the performance of our cell phones and tablets. The 4G technology, where implemented and working to its full capacity, can satisfy most of the current and anticipated needs of our portable devices. High-speed and low latency 5G networks open a plethora of new applications, often called the internet of things (IoT). Self-driving cars are mentioned most often. With each vehicle being a link in the network, we can imagine a system where safety is not only obtained from analysis of sensors on the car, as it is done now, but by knowing the locations and activities of other vehicles in the surrounding area. Potential commercial applications are plenty and possible military uses are endless. For these reasons American political leaders are getting nervous, realizing that they lost to China on 5G.

Americans would not be so panicky if Huawei were just one isolated instance of China getting ahead of the United States technologically. According to the experts in the U.S. Department of Defense, besides 5G, China already has an “insurmountable” technological lead over the United States in drones, batteries, electric vehicles, hypersonics, solar energy, high-speed rail, mobile devices manufacturing and a few more.

Somehow, they missed geo-navigation. Since 1970s, the U.S. government operates the global positioning system (GPS) developed originally for the military and gradually released for civilian applications. Currently, this is the dominating system worldwide, giving the U.S. government the power to limit its use, as was done to the Indian military during the military skirmishes with Pakistan in 1999. China has just completed BeiDou, its worldwide alternative to the American GPS. In the American GPS, communication is available only from the satellites to the receivers. BeiDou offers two-way communication, which makes it much more attractive than GPS for many new commercial and military applications.

They do it faster and better
When writing about Huawei, which exemplifies this tremendous success of China, the WSJ editors find it worthy to bring up that 21 years ago, Huawei got in trouble with China’s equivalent of the IRS. If the WSJ editors were entrepreneurs themselves, they would know that being creative in avoiding taxes is a part of a surviving strategy for every startup, often leading to troubles with the IRS. The IRS has no interest in taxing startups to death. No political cloud is needed if one can present a reasonable argument that some leniency now can bring more money to the Treasury in the future. This is how it works in the United States. One can reasonably assume that Chinese tax authorities are not much different. The sensational tone of the WSJ reporting that in 1998 Huawei needed to be rescued by high-ranking politicians from Beijing due to the alleged tax fraud does not sound convincing for someone who knows firsthand how matters of this nature are resolved in the United States.

The WSJ laments as well that “China Development Bank and Export-Import Bank of China in the last two decades made available more than $30 billion in credit lines for Huawei’s customers.” Fairly, they report as well that, according to Huawei, rarely is more than $3 billion of that credit line used. With Huawei’s revenue of $122 billion in 2019, it is not convincing that money from Beijing propelled Huawei’s growth. It is correct, however, that Huawei offers financing for their products, but mostly from its own cash flow.

For the record, since 1934 the U.S. Export-Import Bank has done in the United States the same work as the China Development Bank and Export-Import Bank of China do in China. The WSJ quotes the opinion of Fred Hochberg, the former chairman of the U.S. Export-Import Bank, who candidly states that in providing financing for their products, Huawei outsmarts their competitors. The WSJ editors did not notice that this one quote derails the main argument of their article.

The WSJ editors write with indignation that between 2014 and 2018, Huawei got about $2 billion in discounts when buying from the Chinese government the land for its newest research center in Dongguan. The design of the recently opened campus flamboyantly mimics the most impressive architecture from European cities. Planned for 25,000 workers, it had about 17,000 employees at the beginning of 2019. Just recently, Huawei got a permit to add next to it a smart manufacturing complex with the capacity for the work and housing of 40,000 people. The bitterness in the WSJ comments can come from the comparison that in 2017 Foxconn was offered $3 billion in tax incentives for building in Wisconsin a factory employing 13,000 people. So far, not much has happened, and likely, if anything is realized, it will be a small fraction of the original plan. It is painful to see that the Chinese can make it work, when Americans do not.

The research by the WSJ editors confirmed as well that the Chinese government, by grants and tax discounts, heavily supported research and development work at Huawei. It was 17 times of the amount that in the same time Nokia, one of the major Huawei competitors, received from the government of Finland. Not to mention that another competitor, Ericsson of Sweden, got nothing from its government. The question one should ask: What would be a proper size of government support, if any? Should it be related to the size of the given company market, or to the aspirations of growth? Should the government’s support be proportional to the country’s population, or maybe to the country’s need to advance itself? The population of China is about 255 times larger than that of Finland, and despite tremendous progress, China is still an emerging economy. If the government of China sees telecommunications as a way of advancing the prosperity of its people, then who has the right to judge how much it should invest in the development of new technologies? Especially when a reasonable person has to acknowledge that if put in China’s position, they would do exactly the same.

The faith in America has been lost
As on every occasion, the WSJ brings up again that for many in the United States, Huawei is a security risk, “should Beijing request network data from the company.” It is reasonable to expect that others, including China, spy on America. Behind the panicky fears that the Chinese government can compel Huawei to be a part of its spying operations is an unspoken assumption that Americans do not have the talent and the skills, as good as China does, to timely detect potential security threats. Ironically, for the Chinese government, it would be unwise to risk the prosperity of its own company; it is much smarter to find a way to plant spying bugs in the equipment produced anywhere else but not in China.

This WSJ article illustrates how American political elites have been intellectually paralyzed by the rise of China. The president is promising to make America great again, but no one remembers how America became great in the first place. The 19th century for the United States was the same as that last 40 years have been for China. Europeans had been yelling and screaming that Americans were stealing their patents. Railroads connected the newly built cites across the continent. Europeans were looking at America with the same disbelief with which Americans now look at China.

By now, the self-confidence of Americans that anything can be done has been replaced with a self-contentment. Then, China happened, and Americans cannot think straight. Instead of whimpering that Huawei succeeded because it received billions from Beijing, the WSJ is afraid of asking the most obvious question: If the American companies had all the money in the world, would they be clever enough to capture the invention of professor Arikan and develop it as Huawei did?

In the video about how to pre-empt the Huawei threat, the WSJ shows a supposedly American intellectual who, with disapproval in his voice, reports that the Chinese want to be a leader, that this is the goal of the Chinese Communist Party. Should the CCP ask Huawei to hold their horses because the United States of America has a god-given destiny to be the leader in telecommunications for eternity? That kind of iconoclastic thought did not cross the minds of the WSJ editors. Instead, they did a lot of investigative work to assemble a collection of petty arguments to cover the plain truth that there is nothing wrong with Huawei, despite the fact that their leaders might not be saints, as not all of the industrialists who built America in the 19th century were saints either. The WSJ does not ask the most obvious question: What is wrong with the United States that it cannot compete with China? The article tells us something that the WSJ editors may not realize themselves, that they have already lost faith in America. And, this is the real problem.

Originally published at https://www.datadriveninvestor.com on January 14, 2020.

Leave a Reply

About me

I was born in 1951 in Gdansk, Poland.
Since my high school years, I have interest in politics and love for writing. During my college years, I started writing to student papers and soon became freelance author to major Polish political magazines.

In 1980 I wrote a book “Czy w Polsce może być lepiej?” (“Could it be better in Poland?” – this book is available only in Polish) analyzing major problems in Poland at the time and outlining possible solutions.

I was among those Polish political writers who by their writings contributed to the peaceful system transformation that finally took place in 1989. Since 1985, I live in the Chicago area. I went through the hard times typical of many immigrants. Working in service business, I have seen the best and the worst places, I met the poorest and the richest. I have seen and experienced America not known to most of politicians, business people, and other political writers. For eleven years, I ran my own company. Presently, I am an independent consultant.

My political writing comes out of necessity. I write when I see that the prevailing voices on the political arena are misleading or erroneous. Abstract mathematics and control theory (of complex technological processes) strongly influenced my understanding of social phenomena. In the past, my opponents rebuked my mathematical mind as cold, soulless, and inhuman. On a few occasions I was prized for my engineer’s precision and logic.

I have a master’s degree in electronic engineering with a specialization in mathematical machines from Politechnika Gdańska (Technical University of Gdansk).

... more