Archive for the ‘Business News’ Category

Thank You, Mr Carrier

July 31, 2012

It got a little warm today, so I slunk into my favorite coffee shop, where the
manager, Phil, prefers having the air conditioning on. He’s my kind of guy.

Much of the rest of the country swelters in 90-100+ heat and humidity, while here in green Seattle it doesn’t get quite that hot; that doesn’t mean that it never gets uncomfortable. The average temperature in Seattle in July and August is in the mid- 70’s, but remember that Mother Nature throws her dice now and then, just to make it interesting. In summer of 2009, Michelle and I came to Seattle from Boston for a vacation, and it hit 104, making my promises of mild climate pretty untrustworthy.

Like many locals, we wanted desperately to find a nice, cool air-conditioned hotel room, since our hosts did not have it. We found out that only something like 16% of Seattle homes have a/c, simply because it does not get that hot very often.

But what about those places that regularly do get hot?

I was born and raised in the Washington DC area, and a/c is not a luxury — it’s a necessity. In summer you lead an air-conditioned life, going from home to car to office building; at the end of the day you reverse the order. Even brief exposure to the elements brings on perspiration galore, and then you get that weird combination of a damp chill when the a/c finally hits you and your icky, damp clothes.

Air conditioning takes up lots of electricity, and when the electricity is not flowing, there is no air conditioning, which makes for a lot of sweaty, unhappy people. I feel sorry for those hundreds of millions of people in India who are without power recently.

There are over 1.2 billion people in India, the world’s second most populous country after China, and those people need electricity. Maybe such luminaries as Edison and Tesla ought to take a posthumous bow for their crucial contributions to our welfare and comfort today. The power grid in India, however, is not as advanced or as reliable as in other countries. Massive power outages have caused cars to jam in a morass of molasses due to dead traffic lights; have stilled the overcrowded trains; and have led to outrageous heat in workplaces and homes.

Earlier this month, the 17th, was the 110th anniversary of the birth of modern air conditioning. We all know the Carrier brand of a/c, but what most do not know is that it was Willis Haviland Carrier (1876-1950), who brought us that air-chilling appliance we all love today. He was a mechanical engineer, and he solved the most important parts of the riddles concerning the temperature, humidity and cleansing of air.

To Willis Carrier, I would like to lift a toast, of a glass of very cold iced tea. I wonder how much I could get for it in India?

Testing the Envelope

September 3, 2011

International business provides one of the most interesting arenas to observe humankind at its best, and its worst. For thousands of years, traders have bought and sold over-priced goods and rendered shoddy services in the great market towns and port cities of the world. Vast numbers of stinky people would congregate and speak dozens, if not hundreds, of impenetrable languages while navigating myriad cultural differences with the dual purposes of making money and improving one’s situation.

Often, however, there would be someone else who wanted to make money and improve their situation, and that person could get in your way. This conflict, my friends, is called competition. Trust me when I say that business competition today looks the same on a stock exchange floor as it did when gladiators fought back in Rome’s Colloseum, only today they wear ties.

Fighting implies a winner and a loser, and when the need to win is high, some contestants cheat.

Market towns and ports also provided unique circumstances for learning, whether about new products and services to sell, or finding cool new ways to sell old products and services. Traders who imitated successful business practitioners and acquired new knowledge stayed ahead of the pack, giving themselves new opportunities to succeed. Success and wealth meant that they could buy Ferraris and then die while still young and beautiful. And if they couldn’t succeed honestly, they could learn new ways to cheat.

So just like children imitate their parents, businesses can imitate, or even try to copy, other businesses which they admire. And even at a more macro level, some countries may try to imitate other countries. India, it turns out, wants to be more like China; the land of Buddha wants to imitate the land of the dragon.

According to a recent article, in which many politicians and business owners in India were interviewed, Indians are envious of much of what China has accomplished in recent years: high if not stellar growth rates; herculean infrastructure improvement projects such as dams, bridges, railroads and airports; and – a shocker – its system of government. It is a “widely held view” that China is outperforming India because it is more “disciplined.” Indians feel that this is due to the fact that China’s Communist Party runs things unilaterally, while India has one of those typically sloppy, multiparty democracies that appears to be about as manageable as a herd of cats.

But do they really want to be like China? It is a “widely held view” that Dragonland is a hotbed of bribery and corruption. In 2006, Wal-Mart conducted a series of audits of companies in China making many of the zillions of low-cost items the world’s largest retailer sells. The auditors found that only a very tiny minority of Chinese businesses manufacturing products for Wal-Mart adhered to contractual agreements such as paying the legal minimum wage, paying for overtime work, not employing underage workers, and providing the equipment, training and working environment considered proper and safe when handling toxic or otherwise dangerous materials.

What popped my eyes out was that there are consulting firms in China that will help your company to cheat, by such means as: generating bogus employee time-sheets; coaching you on what to say to auditors and how to answer questions they are likely to ask; and providing helpful tips such as throwing blankets over the heads of the cheeky employees, the ones who are likely to tell auditors the inconvenient truth, and hustling them out of the factory when the audit teams arrive.  Unbelievable.

This year China has been mired in food industry scandals, as described on these pages, with such things as infant milk powder tainted with melamine. In your kitchen are probably spatulas and other items made of melamine, but do you wish to ingest them? Evidently, by judiciously adding amounts of finely ground melamine to the infant milk formula, testing instruments are fooled into thinking that the levels of nutrients are higher than they really are. So Chinese dairy managers figured they could cheat by adding ground up spatulas and feed the results to babies, and that would be OK, as long as they made lots more money.

The Three Gorges Dam, a huge, late-1990’s project of which the Chinese are really proud, already shows signs of cracks and leaking, and scientists are worried that no number of little Dutch boys will be able to fix it. During an inspection of dykes that suffered more than expected damage after floods along the Yangtze River in 1998, then premier Zhu Rongji discovered that some had melted away “like bean curd” due to corrupt and shoddy compliance with best engineering practices. Cutting corners and bribing inspectors, no matter if public safety is involved, is the Chinese way.

The recent bullet train catastrophe has caught the world’s attention, and two of the key railway ministers reportedly pocketed billions of dollars. The railway minister and the boss of the high-speed train system, is Liu Zhijun. He was fired back in February, and it is estimated that he received approximately $320 million in bribes. His second in command, Zhang Shuguang, deputy general engineer of the railway ministry and director of its transportation department, was found back in March to have been the recipient of many fat envelopes too. Reportedly he has $2.8 billion squirreled away in Swiss and foreign bank accounts, this on a purported $1220/month salary.

Officials from the Chinese telecomm industry have just joined the party. Zhang Chunjiang, at one time the vice chairman (ha ha, “vice” chairman) of China Mobile, the largest mobile phone service provider in the world (if measured by number of subscribers), has been a bad boy. In July, he was charged with accepting somewhere in the vicinity of $1.15 million in bribes. (He should have worked for the railroads.) He was sentenced to death, which was reduced for good behavior, which in China means that he has to share his ill-gotten gains with the Central Committee.

Last week, Li Hua, the former chairman and general manager of the Sichuan branch of China Mobile, was convicted of accepting more than $2.5 million in bribes. Like Zhang, Li was sentenced to death, but will also receive a commuted sentence — I understand that the poor bastard will be forced to watch videos of Jo Calderone for the rest of his days.

As everybody knows, India has been very successful at out-sourcing, which has been made possible by a well-educated workforce. These highly trained Indians  are paid less than their American counterparts, which helps to keep costs down. One area in which they excel is the medical industry. For example, Indian doctors, many of whom trained in the US, analyze x-rays which have been sent by American doctors. At the end of an American’s workday, a radiologist can send an x-ray over the Internet to a doctor in India. This doctor, due to time differences, then receives the x-ray and examines it while the American sleeps. Then when he or she is done, the doctor in India, at lower cost than is possible in the States, sends the report back to the US doctor, who sees the results first thing the next morning.

Similarly, workers in the Indian software industry can receive umpteen lines of code from an American software engineer, assess the work, provide revisions and corrections as necessary, and then send it back for use in the US. Again, costs for such work in India are lower than in the US.

Call centers, as many Americans know, have been in the forefront of Indian out-sourcing. Many of us are familiar with the movie (2006) and TV show (2010) of the same name, “Outsourced.” We are also aware that when we call a large company to order something, or if we try to get some tech support, instead of speaking to an American operator, we are likely to get connected to someone in India. This is pretty easy to tell, since the person in the monster cubicle field, perhaps in Mumbai, has that unmistakable accent, as in “Thankyouverymuchplease.”

By bribing people from Beijing to Bangalore – which was horrible – this intrepid reporter has discovered that India and China are about to sign an unusual agreement. We know that bribes flow through China like blood through an Olympic gymnast. But lately, there is growing fear of getting caught and then severely punished.

(The Chinese don’t worry about bribery and corruption as being morally wrong; almost like little children they are just frightened that they might get caught and spanked.)

While China knows that India has a competitive advantage in out-sourcing, and can provide many services at prices far below those charged in other countries, India wants to be more like China and learn more about Chinese business practices.

Here’s what I found: Chinese companies have signed contracts with Indian out-sourcing firms to perform off-shore bribery services.

These pioneering Chinese firms hope to save money and still enjoy the many benefits of offering and accepting bribes, while reducing the risk of being caught; Indian businesspeople will get their wish and learn how to be more like the Chinese.

Using nude photos of celebrities downloaded from the Internet — no, sorry, there isn’t a link — I bribed officials on both sides of the arrangement, and uncovered the new schedule of bribe transaction fees that will be used. It looks like India will be able to dominate this new sector by providing high-quality, out-sourced bribery services at cut-rate prices.

Formerly, to gain approval of a contract to obtain, say 1,000 tons of yttrium, it would cost the foreign firm $500,000 in bribes to a Chinese official or manager.  But by out-sourcing to India, and taking advantage of exchange rate fluctuations, a firm might spend only $350,000 and still enjoy the same relative benefit (“bribe power equivalency” or BPE).  In the old days, in order to bribe railway or construction inspectors in China for a large-scale project, a firm would have to spend around $1.25 million to pass a routine inspection.  But as an out-sourced bribery, India can perform the same service for only $700,000.

In order to gain expertise in this “theatre of dissimulation” the less knowledgeable Indian firms have been gathering works on the subject and have been schooling themselves on the finer points of what the Chinese call “guanxi.” The Indian companies have also purchased a large quantity of an excellent publication by The Economist, a detailed report on global bribery. These companies feel that this primer on the protocols and etiquette of bribery will give them a leg up on this age-old way of doing business.

Bribery economists at the University of Massachusetts, where William M. Bulger used to be president, estimate that India could become the world’s leader in out-sourced bribery within 5 years.

To run the new Indian bribery call center in Mumbai, rumors have spread that Li Hua, the former telecomm executive has been hired. Evidently, those wishing to offer or accept a bribe will be given a discount on processing fees, if they call using their China Mobile account.

There is no word on whether spanking will ever be out-sourced.

How Do You Spell Yttrium?

August 25, 2011

Former Massachusetts Governor Mitt Romney has a very nice house on the beach in Southern California. Let’s stop right there for a massive ooh and a heartfelt aah. We do not know if Gidget or Annette Funicello are regular visitors, but if I owned a beach house in Southern California they would be.

Mitt feels that his 3,000 square foot abode is no longer big enough for his needs. A spokesman has mentioned that Romney has five grown sons and 16 grandchildren, and that when they get together for family barbecues and volleyball parties there is simply not enough room. So they are knocking down the old pile of rubbish and building a new 11,062 square foot mansion there in La Jolla, just north of San Diego.

If we calculate the approximate number of party-goers involved, we have Mitt and his wife Mittsy, the five sons and presumably their wives, plus 16 grandchildren, which gives us 28 people. (That does not include the Southern California standard number of servants per rich person, which is 2.25, giving an additional 63 people.) Divide the original 28 into 11,062 square feet, and we have roughly 400 square feet per rich person. By comparison, my wife and I used to live in a 457 square foot Boston condo, which works out to about 230 sq ft per person, which was OK when an elbow wasn’t in your ear or your nose. We didn’t have to worry about 16 grandchildren visiting us, which might have been a little cramped, whether we counted the cat or not.

Some critics have jumped up to say, “Good heavens!”, does he really need a house that big?!? Why does it have to be so much bigger than the average American home, that is, the average American home on a Southern California beach. How often are all these kids and grandkids going to be there anyway, and don’t they have their own palatial homes on beaches somewhere? Could there be another use for a structure almost as big as the Pentagon? Does Romney have an ulterior motive?

This intrepid reporter has been poring over building plans, architectural sketches and other publicly available documents in libraries, museums and briefcases buried under twenty feet of dirt. The results are astounding. If the results were not astounding, you wouldn’t be glued to your computer screen as you are now.

You may have read recently that there are scarce and valuable minerals used for all sorts of modern products, like cell phones, hybrid cars, and glow-in-the-dark breakfast cereals. A few of these special elements are cerium, scandium, and of course yttrium. (If you had never heard of yttrium, you should be ashamed of yourself.) These are called rare earth elements, and their prices have been skyrocketing lately, because, according to experts, the Chinese have been playing a sort of cat and mouse game, which in that part of the world would be called a ‘dragon and lotus blossom’ game.

The Chinese like to roam the earth, investing in whatever they want, enjoying unfettered access in this mostly free-market world. But when it comes to outsiders investing in China, the government insists on carefully controlling the flow of foreigners salivating to get in, like a bouncer at an exclusive nightclub keeping the undesirables on the wrong side of the velvet rope.

Let’s get back to our discussion of rare earth elements, and for this you had better break out your old high school chemistry book and look up lanthanoids. What’s that? You didn’t keep your high school chemistry book? What were you thinking? Didn’t you believe that it — and your trigonometry book and your geography book and all your other textbooks — would come in handy one day? Harrumph.

By the way, the label “rare earth elements” is a bit of a misnomer, because some of them are relatively plentiful, it’s just that they are bloody difficult to find and are very expensive to get at. Anyway, China boasts the world’s largest known supplies of these rare earth metals, and the Chinese government is playing its usual version of supply and demand hardball with other countries and other companies.

As China has become the world’s low-cost manufacturer, and makes more and more of the things we want, these rare earth materials are becoming more important, so supplies are crucial; China wants to keep an iron grip on the supply. (No, iron is not one of the rare earth materials.) It’s kind of like the competitive display the Chinese put on recently during a “goodwill” basketball game in China.

This exhibition game was between the Georgetown University college team, the Hoyas, and a professional Chinese team, the Bayi Rockets, made up of men who serve in the Chinese army. The game must not have been lopsided enough in favor of the Chinese, since the officials — Kung Pao, Krak Sznap and Zhap Bhonk — started calling three times as many fouls on the Hoyas as for the Rockets, for infractions like having wavy blonde hair. These same officials did not call the vicious fouls committed by the Chinese players, who evidently wanted to reshape the multitude of American ears and noses by using their elbows and knees. It soon turned into a full-blown brawl, with the Bayi players throwing punches, stomping on the Georgetown boys and using folding chairs to gladiatorial advantage.

I guess you could say that the Chinese didn’t want to lose.

And now, using what the World Trade Organization has determined to be unfair trading practices, the Chinese don’t want to risk losing the rare earth game either. Which takes us back to Romney’s very capacious house. Companies controlled by him have been quietly buying up the biggest drilling and earth moving equipment in the world. Geologists from Harvard, MIT, Oxford and Switzerland have made visits to San Diego for secret meetings with Romney people.

If you start in Southern California, and drill way down into the Earth, and then turn left a bit, and keep going, you will come up in China. You can look it up in your trigonometry book. That is what Romney is working on! He is calling it the Romney Undetected Drilling Enterprise (RUDE). They plan to use the huge new house as a cover for the enormous drilling and excavation equipment, and then to dig all the way to China — well, not ALL the way to China, since they want to stay under the surface. Then, while still underground, they can extricate the rare earth elements at will and transport them back through the big tunnel and right up into Californian markets. It’s a very cunning plan.

Another cunning aspect of this ambitious plan is to raise money while the project is in progress. My sources tell me that Libya’s Col. Muammar el-Qaddafi is already tired of hiding in the warren of tunnels under his beleaguered palace. There are plenty of South American drug lords who would love a vacation. And Casey Anthony is tired of being hounded wherever she goes. The smart money inside the Romney camp says that the new mansion will provide a safe and comfortable haven for selected refugees with big wallets. Security for the entire operation will be handled by Romney’s old Boston friend, Whitey Bulger, who has extensive ties with law enforcement.

An insider so close to Romney that he knows that after the great man has had a wee-wee, he doesn’t even put the toilet seat back down, says that Romney has one final wish after scoring big in rare earth metals. After he corners the market, an odd thought considering that we live on a sphere, he plans to build, at the North Pole, an exact replica of the Fortress of Solitude, and live there like Superman for the rest of his days.

Project Abacus

August 20, 2011

Reclusive North Korean leader Kim Jong Il is visiting Russia, partly because he loves ballet and borscht. He is also a big fan of Boris Spassky, and uses what he has learned about chess to manipulate relations with China and South Korea, as well as the United States and other major and minor world players. He also is known to have a deep appreciation for Russian culture.

Why is he in Russia? Why doesn’t he stay in his perfect, fertile, abundant-with-everything, wonderful country? (Ha ha!) North Korea analysts believe he is there to negotiate a deal to bring back 50,000 cases of Weetabix, to feed to his happy but starving citizens, and to do some wheeling and dealing. Another deal on the table is to make arrangements to transport natural gas and oil from Russia through North Korea to South Korea. One source suggests that a giant pipeline will be constructed through some 500 miles of North Korean territory. This could provide North Korea not only with income while the pipeline is being built, but also with ready supplies of energy it could tap into. In addition, it seems feasible to extract fees for allowing the oil and gas to cross North Korean soil, whether on some time or percentage basis.

If viewed from the perspective of a chess board, one South Korean editor looks at this as Kim’s latest maneuver to “…add to its increasing portfolio of potential hostage issues for times when inter-Korean relations chill.” Clever. And speaking of hostages, North Korea has been kidnapping South Koreans since the 1950’s, and prefers to return them, after hefty ransoms have been collected, by shooting them from huge cannons across the Korean Demilitarized Zone. (In North Korea this method of transporting people across the border is called the ‘Glorious Rainbow of Dear Leader’s Benevolence’.) Since North Korean military personnel are entertained by this, Kim feels that he doesn’t need to feed or pay them. Another South Korean newspaper speculates that the pipeline could be used to supply the Pyongyang palace with the vast quantities of hair spray and styling gel required to keep Kim’s coif in place.

During Operation Kim-Chi, when I went deep underground to sniff out what was really fermenting, I heard rumors of communications between Pyongyang and Beijing regarding trains. Since the recent high-speed train crash in China, the government railways ministry has ordered a recall of train cars, and the company that manufactured them, North Locomotive and Rolling Stock Ltd, a state-owned company, doesn’t seem to know what to do with them. A shrewd shopper, Kim wants them at a big discount (a “fire sale”?), as part of a novel method to transport oil and gas through poverty stricken North Korea.

According to Kim Jong Il’s favorite masseuse, who goes by the stage name of Yum Yum Hands, Kim wants to construct a grid system that looks like an abacus with ten parallel tracks fanning out from close to the Russian border town of Khasan, at North Korea’s northeastern-most tip, through North Korea, down to South Korea, coming to an intersection like the ropes on a hammock. Rather than install one big pipeline with valves and electronic controls, which would be the cheap and smart way to do it, Kim Jong Il wants to put hundreds of railway cars to use, going back and forth. Each car will be converted into a tank car, capable of carrying a large quantity of natural gas or oil. This will allow North Korea to keep more of the liquid energy inside North Korea for longer periods of time, and will allow it to play a sort of shell game, so that it might spirit away cars full of gas or oil for its own use, or to sell for cash. This is ironic, because the Shell Oil Co (along with Russia’s Gazprom) is involved in the project.

One last theory for Kim’s visit and his abacus train project comes from my contacts in Switzerland, who yodel oodles of intell to me. Kim Jong Un, one of Kim Jong Il’s sons and the heir-apparent to take over the North Korean regime, was largely raised and schooled in Switzerland. By all accounts, he is an immature, spoiled brat, which doesn’t surprise me. One Swiss miss in particular told me that as a child, he liked playing with his toy trains. As he got older, his train sets got bigger and bigger. Last month he threw a violent temper tantrum when his father refused to build him a grand-scale, nation-wide train system he could play with, and in his anger he shot and killed several members of his palace staff.

According to my contact, the Pyongjang palace chef that night served “borscht” as a shift meal for palace employees. Evidently it left a bad taste in their mouths.

The Empirical Method

August 6, 2011

Did you have a chemistry set when you were a kid? I did. It was an important step in my science education. Educational toys, building toys like the Erector set, science toys — these were vital parts of my upbringing. My father was an electrical engineer, and part of the DNA he passed along to me was an interest in science and empiricism, and a curiosity about how the world works.

Since the early Enlightenment days of Hooke, Wilkins, Boyle, and particularly, Bacon, people performed experiments to learn about the natural laws that govern the behavior of matter and living things. These men helped to develop the foundations of chemistry, physics, anatomy, botany and so very much more. I like to think that those chemistry sets and science kits linked me to those inquisitive minds, those great contributors of the Royal Society.

Recently in Sweden, a do-it-yourselfer decided it would be cool to learn about radioactivity. He performed a variety of experiments in the kitchen, presumably to see if he could develop brownies that glowed in the dark, which would make them easier to find. The Swedish police found that he bought a science kit over the Internet from Radioactive Products Inc, a Pakistani firm that specializes in selling dangerous scientific toys to India.

The 31-year old Richard Handl should be given credit, since he tried to do what usually takes years and zillions of dollars to accomplish. The results of his work (in the photo at the top) looks amazingly like the results of most of my chemistry set experiments: burnt, brown sludge that my mother made me throw out right away. Maybe I should have grown up in Sweden where such endeavors are more graciously welcomed.

Among the goodies Mr Handl bought for his table-top reactor were radium, uranium and americium-241, which he said he bought at a farmer’s market from a man wearing a hoodie. That he was arrested by Swedish authorities is not important; what is important is that he was experimenting to find out what worked and what did not. Some people forget that finding out that something does not work is still a contribution to knowledge.

Important scientific work is being done in Texas right now, and soon they will learn that prayer does not do a darn thing.

Other important experimental work is being done in China. In rural and urban regions across that large and populous country, citizens have conducted experiments in democracy. These attempts to shed light on darkness have resulted in mostly predictable outcomes, ranging from being harrassed by uniformed and plain-clothes police, to being placed in “protective custody” to being thrown in prison.

One punishment becoming more frequent in China is having small children apprehended or brutally kidnapped by members of the Harmonious Relocation of Potentially Wayward Children Ministry. This relatively new arm of the Peoples Bullying Party was formed, ostensibly, to uphold China’s One Child And That’s It policy, and to punish those horrible, evil, unspeakably vile parents who want more than one child. Plausible social media originating in China strongly suggest that local government officials steal infants and then sell them on the very black market to “adoption agencies” who in turn provide them — at a high mark-up — to western parents who believe they are adopting orphans.

This heinous and arbitrary punishment is being meted out to more categories of crimes, as more and more behaviors — those considered a threat to the “harmony” of the Communist Party’s grip on power — are being labelled as crimes.

Sources in China reveal that an increasing number of brave amateur scientists are purchasing “Freedom Kits” and “Democracy Sets” from the United States, the UK, and other advanced western countries. These social science kits contain such documents as copies of the Magna Carta and the US Constitution, and other materials used in the experiments. Deluxe kits also contain censorship-free Internet servers, allowing the owner unfettered access to information, without fear of the Chinese Communist Party slamming shut the doors to independent thought and expression.

Rather like our Swedish amateur scientist trying to build a miniature reactor in the kitchen to see how it worked, some Chinese homes have tried to concoct miniature democratic organizations based on law and democratic principles, to see how they work. But then, just as the results of these ground-breaking experiments start to become tangible and observable, the authorities get wind of it, and bundle the perpetrators off in the middle of the night in unmarked government vans. Transcripts of hacked mobile phone conversations provided by News of the World reveal that many Communist Party members take classes to hone their ability to detect the faintest whiff of disharmony.

Perhaps in a later column, this crack investigative reporter will be able to compile substantiated evidence to prove a growing rumor correct. Susurrous murmurs suggest that an international conspiracy is forming to adopt illegally procured Chinese infants, and then to inculcate in them a love of democracy. Then, like little black-haired time bombs, they will be replanted clandestinely in Chinese society. The results of this audacious experiment? Stay tuned.

Your Cheatin’ Chinese Heart

May 10, 2011

Eating and drinking in China has recently become a very dodgy proposition. You can’t trust that the food in your bowl or the wine in your glass is safe. (“Safe” being a relative term.) People there are wary and growing nervous, suspecting not only street food, but also restaurants and packaged foods from grocery stores. Some are even getting angry, and sharing their anger online.

Moved by cut-throat competition and greed for profits, many Chinese farmers, dairies, food manufacturers and participants of the enormous food supply chain are finding creative and dangerous ways to cut corners and reduce costs. There are far too few food inspectors to cover the immense territory and overwhelming number of food industry players, and these comestible cops are ill-trained, ill-equipped and peppered with bribes. In this pressure cooker of a business environment, those food companies compelled to cheat feel that the risks of being caught are totally outweighed by the chance to make huge piles of money.

Something to keep in mind is that many of the largest companies are directly or indirectly controlled by the Peoples Bullying Party, and exist in order to benefit the government.

You might remember the food scandal a couple years ago, when some Chinese firms were caught mixing melamine — the plastic stuff used to make your spatula — into powdered baby milk. My high school chemistry teacher thought enough of me to call me “gourd head,” so keep in mind that my analysis and explanation may be a bit iffy. Apparently the chemicals in melamine ‘fooled’ instruments used to measure nutritional value, the test results suggesting that the milk powder was better for you than it really was. Hundreds of thousands of kids became sick, and some died.

The public backlash pressured the government into forcing the guilty milk powder producers to relabel the product as industrial glue. This glue was then sold to Chinese construction companies, who used it to build schools and hospitals. Sadly, these schools and hospitals collapsed shortly after they were filled with low-cost, low-quality desks and beds, which themselves had originally been waffles fortified with cardboard.

The government named a task force populated entirely by Chinese food industry executives to police the food industry. The head of this blue ribbon group, Wee Spanq-Yu, promised to be “the new sheriff in town.” The sheen is off his badge, however, since 26 tons of melamine-laced milk powder, supposedly outlawed and destroyed by now, were discovered a couple weeks ago in a Chongqing dairy company.

One horror story after another has turned up in the Chinese media, which in itself is a minor miracle, given the government’s paranoia about keeping bad news out of the public eye. The foods affected are common, everyday foods like pork and eggs, not exotica like lobster mac and cheese. Pork, for example leads all other meats in China, representing about two thirds of all meat consumed. As noted in the linked article in the first paragraph, there have been reports of pork found to be tainted with the drug clenbuterol, a steroid used in weight loss pills which can cause tremors and excessive sweating. Some pork had been sold as beef, after being braised in borax, a detergent additive handy for washing 20-mule teams. (“Beef with a clean aftertaste!”) Authorities found rice laced with cadmium, a heavy metal element that is spelled much like “calcium” but is not nearly as good for you.

The list goes on, with soy sauce spiced with arsenic, which should prove popular for families in small apartments eager to rid themselves of elderly relatives. And for those who want a tasty snack while enjoying a movie, food detectives have discovered popcorn and mushrooms enhanced with fluorescent bleach. Not only is your popcorn clean, but you can see it in the dark! How convenient for theatre-goers who drop their popcorn on the floor. Even eggs have been compromised. Yes, eggs, that most virginal of foods, protected by a shell as white as a wedding dress, have been despoiled. Rather than getting them the old fashioned way by catching them as they come out the business end of a chicken, Chinese authorities have found companies doing things Betty Crocker would never do. These fake eggs are made from a chemistry set, including such non-egg-istent ingredients as gelatin and paraffin. Now, I don’t remember what Mr Fawley may have taught us about paraffin, but I know it’s a hydrocarbon, and depending on its mood, it can be a solid, a liquid, or a gas — and it’s flammable. Your egg can be an omelet, AND a candle!

I don’t wish to sound insensitive, but even food from the irradiated parts of northeastern Japan sounds better than this.

Chinese wine drinkers are also in trouble. Wine drinking is relatively new in China, but growing fast. Hong Kong has become a hotbed of wine activity. Traditionally, Chinese mostly drink beer and baijiu, a white liquor distilled from frog sweat and mixed with rice vinegar, which sounds delicious. (To “skate on a lilly pad” is to be really tipsy on baijiu.) The growing middle class and exploding economy has allowed and encouraged greater discretionary spending, but now I sound like an economics professor.

Deep in the Chinese psyche — and I know a lot about the Chinese psyche because I prop up my laptop with Sun Tzu — is the need to display one’s status and prestige; appearance is everything. Often that prestige is propped up like a house of cards from parading imitations of brands like Gucci, Chanel and Rolex. So whenever middle managers host a banquet for family, friends, bosses and subordinates, they make sure that bottles of famous, expensive wines like Château Lafite and Pétrus are on the tables.

Now here’s the funny part: a Chinese wine drinker will pour himself a hefty glass of sensuous Bordeaux, and then … add Coke to it. (?) This is hard to wrap one’s mind around, and I am by no means a wine snob. Wine is wonderful because of its complexity, its variety of enticing flavors, and its unique ability to gain in complexity as it ages. All those delectable smells and flavors and nuances will be pretty much spoiled, lost in that sugary soda invented by a Georgia pharmacist in the 1880’s. (Coca-Cola is currently celebrating its 125th birthday.)

In a November, 2009 New Yorker article, Evan Osnos tells how Chinese wine drinkers were fond of mixing wine with soft drinks, and relates a popular saying, “Red wine and Sprite — the more you drink, the sweeter you’ll be.” Other observers note that “some Chinese consumers are said to dilute even the most expensive clarets with lemonade.” (“Claret” is actually a British term for red Bordeaux. Interesting that the famous ‘claret jug’ that is the prize — along with cash — for the British Open golf tournament is a beautiful silver jug for French wine.)

Rocketing demand for the elite wines not only propels the prices into outer space, but causes shortages; unfortunately those pesky principles of demand and pricing obey the laws of economics, not physics. Wine lovers are peeved that prices of the good stuff are climbing out of reach, while the hyperyummy vintages are getting really hard to find. (“Hyperyummy” is a technical wine-tasting term.)

On the one hand, selling mountains of cases of wine is what every winery and distributor wishes. But on the other hand, the winemakers want their products to be appreciated and cherished. Wine that has taken years if not decades to produce, requires grape vines to be planted and allowed to mature, if Mother Nature is on your side. Each year the grapes grow and once again plenty of luck is involved, since the combination of sun, rain and temperature must be just right. The grapes get picked and then the juice ferments into wine, which is then aged in costly wood barrels for years before the wine is finally bottled. Most reputable wineries age the bottled wine on site to ensure that it is well looked after during its adolescence. It is a time-consuming, hands-on process involving luck, skill, passion and patience. To turn the contents of an exquisite bottle into the prime ingredient for a wine cooler causes chafing in sensitive emotional areas.

There are a variety of shady techniques used to cheat Chinese wine drinkers. Similar to a common ruse in the Old West, when bar owners watered down whiskey to make more money, some Chinese wine merchants will buy big quantities of wine, and then dilute it with water, and add sugar and various chemicals to ‘improve’ the taste. Another strategy used by unscrupulous wine salesmen in China is to buy empty bottles of famous vintages, the big name stuff that is sought after the most. They are forthright in asking that the bottles be in pristine condition with perfectly clean labels. They then fill the bottles with lesser wine — or “plonk” to use one of my favorite British words — and sell it as the real stuff for exhorbitant prices. Unbelievable.

Respectable people in the China wine trade, such as Westerners there to teach the Chinese about wine, insist that empty bottles be thoroughly smashed after use, to ensure they won’t go into this perfidious pipeline.

In the latest Chinese wine scandal, evidence of corruption and conspicuously luxurious consumption at Sinopec has fueled an angry outpouring from regular citizens. Sinopec is an oil refiner and China’s largest company, if measured by revenue and not by the number of employees or the sharpness of their pencils. It is 75% owned by the Communist Party, and top officials are appointed not by a board of directors, as in corporate America, but by the secretive Chinese government. Top-level Sinopec managers bought nearly 100 cases of exquisite wine for around $250,000. Some bottles cost more than $2,000 each.

Helping to light the fuse of popular anger was the fact that gas prices had just hit new highs, and Sinopec’s profits were 25% higher than the previous quarter’s. One seething blogger asked, “is Sinopec an oil company or a wine merchant?” It is not clear if the wine was consumed with Coke — some of the wine has been quaffed — or if it was intended for gifts or bribes. Evidently the Guangdong district manager on whom the spotlight fell has been demoted but not fired.

My sources reveal that he has an interesting new function at Sinopec. One of my deep-cover intelligence gatherers, disguised as a window cleaner, sent a Morse code message by tapping his squeegee. He was cleaning windows outside a conference room, and he overheard the executives hammering out a plan for a new wine to be marketed by Sinopec. It’s to be made by mixing gasoline, paraffin and other chemicals, red food color and Coke.

The disgraced manager is to be the chief taste tester.

“Your cheatin’ heart will make you weep
You’ll cry and cry and try to sleep
But sleep won’t come the whole night through
Your cheatin’ heart will tell on you.”
~Hank Williams

The Shine’s off of Sheen

April 5, 2011

This weekend Charlie Sheen showed the world what he is made of at his first rantfest “concert” in Detroit. He claims to possess a mixture of Adonis and warlock DNA, but the truth of that has been torpedoed. It appears that the lab running the blood tests, purportedly not affiliated with BALCO, has made a tiny mistake.

While Sheen did indeed deliver supernatural rants after the initial applause died down, this premature curmudgeon was roundly booed within an hour of the beginning of his “performance.” Many of those who attended, some having traveled far and having payed a whopping $75 per ticket, demanded their money back.

Interesting that the 5,000+ tickets for this first show at Detroit’s Fox Theatre sold out in minutes, nearly the same length of time required for the crowd to start booing the self-proclaimed Martian rock star of “Two and a Half Men.” Sheen’s considerable PR skills were on display when he reminded a heckler that  “I’ve already got your money, dude.” Here at the Fountain we don’t like to abuse our audience, and we hope you don’t have to ask for a refund.

There is considerable disgreement among mental health professionals as to the reasons for Sheen’s crash and burn and burn some more. Some feel that he has had too much sex with his live-in, porn star “goddesses” and that the result of all that violent activity rivals the brain injuries suffered by NFL players. Others believe that his personal trainer is Greg Anderson, the enthusiastic amateur pharmacist who assisted Barry Bonds with his performance supplements. Still others point to Sheen’s contact with the Chinese, when he was hired to assist the Peoples Bullying Party with public relations. They say that while in Beijing, Charlie developed an addiction to powdered baby formula, which had been tainted with melamine, a substance commonly used to make plastic spatulas. On numerous occasions he revealed an inexplicable desire to use his bare hands to scoop up fried eggs right from the pan.

Using a metallurgical metaphor for his deteriorating mental condition, Boeing engineers suggest that Sheen is experiencing the same sort of destructive metal fatigue as seen recently in the fuselage of the 737 on Flight 812 from Phoenix to Sacramento. Passengers had just paid too much for very mediocre food, and so were not in the mood to see a huge hole open up right above their heads, interrupting the screening of “Mars Needs Moms.”

High-level rumors from Washington suggest that negotiations for a complex deal rivalling an inter-league MLB trade is underway. Hollywood agents and United Nations diplomats are looking at a possible three-way geopolitical solution to a unique, multi-organizational problem.

Follow this carefully — you may need a scorecard.

I can reveal here that according to top-secret sources Charlie Sheen is being short-listed to take over the voicing duties for the Aflac duck; Gilbert Gottfried, who had been the Aflac spokes-quacker and had been fired for making over-the-top insensitive Twitter tweets about Japan, will assume control of the government in Libya; and lastly, Colonel Muammar el-Qaddafi will leave Tripoli and become the new star of “Two and a Half Men.”

Top US government strategists believe that this new arrangement will satisfy a variety of policy goals: Sheen gets to continue indulging in fowl play and making noise; Gottfried is sent as far away from the US as possible; and CBS and Warner Brothers can get back to generating high ratings and obscene cash flows from an irascible character who loves voluptuous blonde nurses.

Should all these myriad machinations go belly-up, number-crunching gnomes at Lloyds of London have released odds suggesting that the only avenue left for Sheen will be to travel the world conducting assertiveness training seminars.

Auriga Leader Spotted

December 28, 2010

We have scaled back here on productivity recently, partly due to the holidays and partly due to our chronic illnesses, ranging from bronchitis and a lung infection, to a cold featuring 24/7 coughing. This kind of constant coughing means that neither of us has slept much in the last two weeks. I’m sure our usual output will resume in a few days.

But what I must mention is the gigantic ship that glided past our East Boston window this morning, on its way into port. The Auriga Leader is a Japanese car transport ship that derives part of its energy needs from solar power.

The ship is squat and chunky, like the former Washington Redskins full-back John Riggins. (It’s 650 feet long with a 100-foot beam.) When it came into view cruising north in the Boston Harbor channel, it was on a course parallel to Meridian Street. From initial perceptions, I had expected a much bigger vessel like the tankers we see occasionally, and expected to watch its progress for much longer. But soon the blue brick of a ship was out of view and gone.

Its name was unusual, to I had to look it up, and discovered the ship itself is unusual. Launched in 2008 the ship, built by a partnership of Nippon Yusen, a huge Japanese shipping company, and Nippon Oil, set the marine world alight by the revelation that it is, at least nominally, a solar ship.

Approximately 300 deck-mounted solar cells produce 40 kilowatts, or only about 0.3% of the energy needed for engine-based devices and roughly 7% of the electricity needed for lighting and other purposes, but green pundits contend that this is significant nonetheless.

A blogger named John wrote: “This is probably not for propulsion so much as for electrical power when in port. Things like diesel power generators on board ships, and trains and trucks transporting cargo to/from the ships, cause big pollution problems in and around ports. With major ports such as Los Angeles charging ever-higher fees for supplying electricity and hefty fines for excess emissions from on-board diesel generators I can see why shipbuilders are responding with equipment like this.”

This makes plenty of sense. If a large ship can produce clean power at least part of the time, say while anchored in a dirty port city, that would be an important contribution to the health of the planet’s atmosphere. If, on the other hand, that green contribution is outweighed by the pollution produced by the extra cars being delivered by such giant freight ships, that’s another question.

Oslo, We Have a Problem

December 9, 2010

China hit new public relations highs and lows recently. In their paranoid passion to keep anyone from enjoying the Nobel Peace Prize award ceremonies this month, much less the guy who won it, the Peoples Bullying Party has harrassed and harrangued 20 countries into not attending. These countries are hard to spell and not very important, like Kazakhstan, Sudan and Tunisia, but it still shows China’s determination to call the dance.

As a knee-jerk reaction to the prestigious prize ceremonies in Norway, China has with blinding speed created their own competing peace prize ceremony, to be held the day before the one in Oslo. The Confucious Peace Prize is to pay homage to the ancient Chinese philosopher and ping pong partner of Socrates. Confucious is famous for such sayings as: “Always eat fortune cookies BEFORE the meal,” and “It’s bad karma to throw innocent people into jail for espousing democracy,” and “Harrass not those parents who demand justice when their children die in faulty school buildings constructed and inspected by corrupt companies and government officials.”

Taking advantage of an opportunity to kick sand into the face of the world, and China is the globe’s biggest exporter of sandbags, Tan Changliu refered to Europe as “full of small countries that don’t understand peace.” Apparently Tan is the prize pupil of Fling Dung, the head of the Politburo Standing Committee’s propaganda division.

At the same time they are fighting off the brutal, idealic savagery of a Nobel Peace Prize, China is battling incursions on the religious front. The Catholic Church in China is due to elect new senior members of the organization, but the Peoples Bullying Party has instead installed their own puppets, I mean people, into the key posts. The Vatican threatened to send Bishop Thomas Paprocki, just back from his Baltimore refresher course, to exorcise the demons clearly evident in the Communist Party of China.

Members of the Vatican-sanctioned Catholic Church in China were ordered to attend instead a gathering choreographed by the Politburo. Rather than attend, many refused or went into hiding; they were rounded up and forced to appear in what was described as a Communist Party photo-op. Battalions of heavily-armed Chinese police were required to drag away Bishop Feng Xinmao, after a six-hour contretemps held entirely in Latin.

Beijing grows suspicions that Chinese intellectuals and supporters of Liu Xiaobo will attempt to escape government control and make it to Norway for the peace prize ceremonies, any way they can. This intrepid reporter reviewed secret documents made available by WikiLeaks that prove two dozen Chinese nationals paid to stow away on the Falcon 9 rocket that blasted off from Cape Canaveral today. The eighteen men and six women concealed themselves in a cargo compartment made in China, and then shipped to Florida where it was loaded onto the Falcon. The Falcon 9 rocket was built by Space Exploration Technologies Corporation, nicknamed SpaceX. SpaceX is a pioneering American firm that wants to provide cargo and passenger services in space, like the Planet Express Corporation in Futurama. The radar app on my Droid phone will alert me if the Falcon 9 descends towards Northern Europe instead of the Caribbean.

China is furious that dissenters slipped away from its grasp, and vowed retribution by shutting down access to MasterCard, Visa, and Sears credit cards. Fling Dung, his face purple with rage, told western reporters at a hastily arranged press conference that SpaceX was complicitous, and that “falcon” translated into Chinese means “instability” and “disharmony.”

Egg Foo Blonde

November 24, 2010

Many pros in publishing say that the hardest work of an investigative journalist is to find connections. Sometimes we can back up assertions for these perceived connections with facts, and sometimes we use more complex techniques involving intuition and guessing. This is one of those times.

In the international news we learn that poor Russian women earn money by selling their hair in the global market for hair extensions. If a woman is blonde, their hair is worth more money than other colors, like blue. According to an article in the New York Times, Russian women can receive $50 for a 16-inch braid of blonde hair, in a region where the average monthly wage is $500.

In a seemingly unrelated article, we learn that China is hungry for coal. Everyone thinks that the coal is to be used to fuel China’s meteoric economy. However, the Chinese are sitting on a gold mine worth more than coal, but they want to keep it a secret. This intrepid reporter has unearthed the dark secret, or is it a light secret?

The big secret – and grab onto something, because it is going to shock you – is that Chinese are actually naturally blonde.

That’s right: Chinese hair is not naturally black. Because they so revile and distrust the Western World – while coveting Western luxury goods like French Bordeaux wine, Italian clothes and German cars – they hide their golden tresses from the round eyes of the West. The coal is not used for energy; it’s used to dye the hair of billions of Chinese.

In more recent years Chinese coal mines yielded billions of tons of coal, which was diverted either to “top industries,” which produced hair dyes sold through government controlled drug store chains; or to “bottom industries,” those that burned the coal in furnaces to generate electricity. But as the years went by, and the Chinese population exploded, domestic coal production could not keep pace. As technology evolved and allowed other types of power generation to develop, such as nuclear and solar, a higher proportion of the coal mined went to the top industries.

Before coal was used to dye hair, ink was used. Evidence of the Chinese ink industry dates back to the 12th century BC; other countries such as India came to the party later.  While other cultures used ink to produce written documents, drawings, maps and so much more, the Chinese used ink for cosmetic purposes, such as dyeing hair.

As any seasoned observer of China will tell you, the Peoples Bullying Party only reluctantly allows Chinese nationals to leave the country, fearing that the secret of their honey hair will be let out of the bag. Just about everybody has seen young Chinese in the United States and Europe, with hair a strange copper color.  Many observers reckoned that this was the result of attempting to dye their hair a lighter color, but what is really taking place is that the black dye is wearing out, allowing the true color to show through.  When Chinese hair dye fades, the hair begins to turn a reddish hue, and then turns blonde.

Since the hair dyes found outside China are inferior, young Chinese people, usually college students going to Western universities to learn advanced fast food technologies, are at risk of having their hair revert to blonde. This is what Chinese leaders fear. On the surface, it seems benign at worst to dye one’s hair, but over a lifetime of prolonged exposure, American health experts theorize that hair dye toxicity could build up, affect the brain, and cause a diminution of ratiocination powers.

Could this be why the Central Committee of the Chinese Peoples Bullying Party makes such unreasonable decisions, such as preventing Liu Xiaobo from accepting the Nobel Peace Prize at ceremonies next month in Norway?  Come back next week and we’ll answer this question and many more.