Monday, October 22, 2012

Is Panama an Illusion?

(This is the second blog of a series written about "Living in Panama". Please refer also to "Is Panama Safe?",  "Pros and Cons of Living in Panama",  and "Further Notes on Panama Living")

What is the real story on Panama?  Does anyone really know whats going on here?

I have been in the middle of some interesting discussions today on the local Panama political issues.  Having been woken up at 7:45AM last Saturday morning by screaming protesters on megaphones shouting slogans in Punta Pacifica…I have been forced to read and face some of Panama`s political realities today, like the current political uprisings in Colon.  In 8 years of living here I have always sensed this cultural and political undercurrent that does not support the kind of modern face we have  revolutionizing the skyline of Panama City. Let’s face it, Panama is still a country in its infancy of a little more than 100 years since its breakaway from Colombia.  Even that breakaway was brokered more by foreign powers like the USA than by a local sovereign decision, revolt or ¨Declaration of Independence¨.

Panama is an interesting place no doubt…a small sample country of multiculturalism and racism.  It is a mirror in a small way of the issues confronting our whole world. A large majority are poor, uneducated and backward compared to first world countries.  Except primarily for the singular effect of the Panama Canal…these hundred years have not really brought development of a cohesive, singular culture or country.  Instead, it is a small country made up of small groups of a vast variety…from the indigenous native Indians such as the Cuna, Embera,  Ngäbe-Buglé and others from pre-Colombian times, to the Spanish families spanning back to when Panama was part of the Spanish empire for 300 years (1538–1821). Then, on top of that you have the variety of West Indians, Caribbean and Asian migrants who were encouraged to come build the Panama Canal at the turn of the 20th Century, making this country a very diverse and unique country at the hub of Latin America.  That diversity alone accounts for a lack of cohesion and unity among all those calling themselves ¨Panamanian¨.

One could argue that the REAL Panama is only just beginning, and like any newborn country or person…a sense of identity and solidarity with the rest of the world is difficult to define.  We have in the past decade seen a huge modernization of Panama City from a structural and development standpoint.  We are currently in the middle of the biggest canal expansion in the world since the canal opened in 1914.  Yet, underneath all the changes and Billions of dollars of investment in the country, there lies some fundamental lack of definition of what it means to be ¨Panamanian¨.  To some, Panamanians are defined by the post Bolivarian revolt for independence from Colombia which is celebrated on November 3 each year.  For others, their family roots are in the migration for building the canal.  For still others, they claim their identity to Panama as ¨Zonians¨,  having been born and raised in the Canal Zone which had a completely different set of laws and culture from the rest of Panama…primarily based on North American influence and European origins.  In this short history of an independent nation, one can question whether the vast majority here have ever been truly free and independent…meaning having equal access to markets, the rule of law and freedoms of expression most usually associated with the USA system of constitutional rights.

Recent history reveals three key eras of leadership and control of Panamanian governments.  From 1903 until 1968, Panama was a constitutional democracy dominated by a commercially oriented oligarchy which came to be controlled by mostly Spanish and Jewish families who owned most of the businesses and money flow outside of the USA government and canal resources. During the 1950s, the Panamanian military began to challenge the oligarchy's political hegemony and Panama became more of a military junta run by Omar Torrijos as a revolutionary of ¨the people¨, and later continued by Manuel Noriega after Torrijo`s mysterious death in an airplane crash. The most recent era began with the 1989 USA invasion which was prompted by a number of USA interests to back the restoration of democracy from the hands of the militarist Noriega regime. One would now argue that the oligarchies are back in control of big business and this reflects many back door deals to gain advantage of the investment interests in Panama.  After all, Panama is STILL the largest financial center in Latin America in terms of volumes of dollars and numbers of banks and financial institutions domiciled here...which to me is about the only explanation for current development levels.

So, how is it that with all this modernity…we still have constant social unrest?  We have socialist or communistic labor and student groups demonstrating and blocking the streets at will.  We have Indigenous people blocking the only highway connecting the city with the Interior as the only way they can think of to protect their Comarca private lands and water sources from mining, hydro dams and other commercial interests in the interior.  Now we have the ¨Coloneses¨ up in arms over privatization of public properties in the largest duty free zone in the hemisphere. While some would say you have similar scenarios throughout Latin America, I see Panama as being quite small to be so full of such dissension and political unrest.

While the army was deactivated after the 1989 invasion,  the current militarization of the police force based on justifications of the ¨drug war¨ or even potential guerrilla infiltration from the Darien border with Colombia has one wondering if we are not reaching new levels of a military buildup in this small country.  The dance between the President, the legislature, the courts and the police have one´s head spinning in the press on a daily basis. Some days it is hard to know who is in control of this country whose population is smaller than Greater Chicago.  For me, it doesn't take much to turn a small country like this into a broiling hotbox of contention and violence.

There is no doubt we are seeing increasing instances of crime in Panama.  Along with that come increasing police training and activation.  Every couple years we see massive police and security checks on most main roads in Panama.  Maybe a page they learned from Colombia of the past 20 years or so?  And now this week we see a new level of conflict over the Free Zone property rights in Colon.  With reports of 48 people arrested, several injuries and one dead child of 9 years of age…it reminds one that peace and tranquility is but an illusion, even here in small, beautiful Panama.

The distance between the haves and have nots has definitely increased during my past 8 years here. Cost of living in my personal experience is up 30-40% depending on what lifestyle you maintain here.  That is roughly 8% per year…and much higher than government indicators want you to believe. Believe me, the locals pay levels have not gone up at those percentages.  Yes, unemployment is lower than it used to be, but cost of living is higher.  The poorer populations are being pushed OUT of the city with rising real estate prices and transportation costs…yet most of the jobs are IN the city.  Commuting to Panama right now is every commuters nightmare.  Many of us are now choosing to work from home offices instead of trying to commute to an office.  Transportation is gridlocked most days, and the Panamanian aggression and law breaking behind the wheel is at an all time high.  

Average costs of new condos in Panama are around $2000 per Meter, yet rental prices do not support those prices if you are looking for real income. Who is going to buy all these myriad of developments STILL going up in the middle of the other dark, uninhabited towers?  Does somebody know something I don´t about coming hoards of tourists or businesses to Panama?  Where are they going to find the trained workers to fill all these offices they are building across the street from me? I personally don’t see it…and I like to think I get around. Billions have been spent on infrastructure…but educational spending as percentage of government expenditure is at the bottom of the barrel regionally according to these statistics. This fact will grow to be one of the most limiting factors in Panama´s future development potential.

So, what happens if the people or the industries don’t come as planned to Panama?  What happens if the American dollar is devalued against other currencies ( I have already seen the Colombian peso rise over 35% in value over the dollar the past 4 years)?  What will happen if a more Leftist leader comes to power in Panama and leads a Venezuelan style ¨Bolivian¨ revolt against the oligarchy or the perceived or real imperialism of the USA and other foreign powers over Panama? What happens if to meet its new gorging debt obligations, Panama is forced to levy new taxes and austerity measures on the people who can least afford to pay those debts?  We have already seen huge tax increases in Panama the past 5 years…from VAT to corporate to excise taxes on ¨luxury items¨.  At what point do we start seeing a reverse emigration of moneyed people and industries going to other countries in the region because of these combined causes?  I already know a number of foreigners and businesses who have reversed their decisions to domicile in Panama based on many of these issues.

I have been discussing some of today’s issues at a distance with people who I am convinced would rather see Panama and Panama City pull back from the modern city it is becoming.  There are many new voices of socialism and redistribution in Panama media and politics.  I sense a fire brewing…and I don´t see current leaders doing anything to douse those fires of insurrection and violent revolt.  Killing a 9 year old in Colon doesn't help…and militarism alone is not a medium or long term solution to the problem.  Yet, there seems to be no one capable right now to lead the wide range of interests in Panama in a unified direction.  If you watch the local news each day…and worse yet watch the Government Assembly in action on the local cable network…you will begin to realize how divergent and conflicted the interests are in Panama.  As throughout much of the developing world,  people are in a ¨gimme gimme¨ mode towards their governments.  They vote for whoever offers the most temporary support, or ¨candy¨ as I call it.  No one votes for reality or tough policies of correcting debt or corruption.  No one seems too excited about constitutional rights to due process of law. Only if you have enough money can you get access to due process…and that’s not just in Panama.

¨The People¨…in Panama and elsewhere…are insecure and angry.  If the powers that be do not take heed and salve some of their issues and wounds, there will soon be a ¨Latin spring¨ that could make the Arab one look like milk toast.  When that happens…I want to be somewhere else.

Tuesday, October 16, 2012

Go For It...


I have gotten to the point where I don´t like to watch a lot of professional sporting events on TV. It has become very obvious to me that today`s overly paid and highly exalted sports stars in many arenas are starting to cop out on their play.  

You see this the most in NFL football...you know...the quarterback runs and slides to the ground before he gets hit...often 1/2 yard short of a first down or touchdown.  But you also see it in other sports such as soccer, basketball, and baseball.  In soccer you see guys miss a key shot or header, then gets tapped by an opposing player who supposedly causes him to fall to the ground, writhing around like a spider in a hot frying pan...looking to draw a penalty and all too often getting the desired results from sympathetic referees.  Today's replay cameras seem to have no effect on what these players do even though they know the next day the evidence of their play acting is so damning.  In basketball and baseball we see more and more guys not jumping into the crowds to rescue errant balls or make a play.  It is as if to say...I am paid too much for too little time to take a chance ending my career by going for that ball.  For me, I miss the old guys like Johnny Unitas, Bart Starr and various other old style quarterbacks who used to do everything they could to reach a first down or touchdown.  Players back then were allowed to play with half as many rules and less padding.  Most of the older players never made more than a couple million dollars their whole careers but always played to win.  Many of today´s players make 10-20 Million per YEAR...and still wont take a risk.

In business...and life in general...I see this phenomenon playing out too often. People are not willing to ¨go for it¨ when it comes to reaching their goals or dreams.  It is much easier to take the safe road...play by all the rules and fit in to all the stereotypes of the society around us. I believe a majority of people I meet now are living lives of ¨quiet desperation¨...working in jobs or professions they hate...living in relationship to people they don't love, like or respect.  Others live in total solitude because they have been hurt in previous relationships and are not willing to risk ¨getting hurt again¨. For most people it seems more important to play politics and be a ¨team player¨ in corporate settings versus standing out or standing ON principles.

While the masses tend to shun individuality...they still elevate the few characters who are willing to live on the edge, take huge risks and live through tremendous highs and lows in this life. The masses are not willing to live or replicate the actions or attitudes of these few, but they sure love to talk about them and revel in their spectator-ship of these people who are truly ¨going for it¨.

I have been reading the newest biography of Steve Jobs, founder of Apple Computers, who died last year. Here is a guy who while obviously intelligent was one of the most erratic, unpredictable and often despised personalities of the Computer age. Steve had all kinds of hangups and psycho baggage from being an orphan and growing up in the tumultuous late 60s and 70s of anti establishmentarianism (see...I´m not afraid to make up a new word).  Yet, for all his weaknesses and lack of social graces, this guy pushed and focused on what HE wanted to do and create.  He allowed his brilliant mind and strengths to overcome his perceived doubts and weaknesses.  In his 57 short years he lived and tried more things...from lifestyles to religions to businesses...than a hundred other people might combined in that time-frame   He was willing to ¨break the rules¨ and live originally...and he despised other people who didn't.  He didn't care whether people liked or hated him...as long as HIS goals were achieved.

While I am not alluding that Steve Jobs as a person should be our role model of human behavior...I do think his devotion and passion for what he set out to accomplish SHOULD be one of the most inspiring models of our generation.  He wasn't always right...but he was right more than he was wrong.  He failed at a number of things, but he succeeded in two or three key goals that made him who he was and brought all the security financially he needed in this life.  Yet...he was never really about the ¨money¨.  He was about the hunt or pursuit of his dreams. He was about pushing boundaries further and further outside of his and others comfort zones.  In these instances, it started with vision, proceeded with total devotion, and usually ended up with  unprecedented success. Even in his last dying months...he continued to try and paint things his way...even for a future that he would not share.

I don´t want to be Steve Jobs, but I do want to emulate his dedication to independent pursuits of ambition and dreams.  I do want to emulate his ability to bring others along behind him in his pursuit of excellence. And yes, I do want to emulate his ability to disregard institutional limitations and mass critique.  I think that was central to his ability to produce as much as he did in the same amount of years I have already lived.

So...I now am GOING FOR IT in my business pursuits like never before.  I am GOING FOR IT in playing new music that I have never played before and it is about what I like more than about what others like.  I am GOING FOR IT in challenging others around me to think and do more than they currently are or think they can do.  Most of us are operating at less than half our potentials.  This should be unacceptable to us the second we recognize we are doing that.

So...no matter what age you are, how much money you have or haven't ..do not make excuses for not living your dreams.  Quit playing it safe.  Dont be afraid to fail or get hurt. As my old coach used to say...¨no pain, no gain¨. It is never too late to start...and I would rather die trying than to never try at all and live out the rest of my life in the quiet misery of mediocrity.

Sunday, October 14, 2012

Obama Reality Check...


I had a whole other blog 90% written after the first Presidential debate between Barack Obama and Mitt Romney. It was meant to balance the ¨reality¨ blog I wrote about Romney a few weeks back. My how the pendulum swings in today´s media driven political world.

Instead of the previous plethora of confrontational views on Obama politics...I have decided it is simpler and more meaningful to focus on one quote from his last ¨State of the Union¨ address in January...

¨We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same set of rules.¨

I was reminded of this statement from this interesting article in ¨The Economist¨, and for me this embodies the impracticality of Obama´s ideas and the Democratic platform of this day and age.

The main issue I take with this core statement is...WHO IS MAKING THE RULES? My answer would be that the ¨rules¨ are being made by politicians who are primarily funded by BIG business.  That goes for both sides of the political aisle in the USA.  So...while you have these statements continually coming from all these governmental lying lips about ¨fairness¨ and ¨equality¨...don´t you believe them for one minute.  They are almost all for whatever preserves the status quo for THEM...and by THEM I mean career politicos and the financial people that support them.  Without funds...these politicos would be POWERLESS.  So one first has to ask...who is funding their ideologies?  Who pays for the private jets Nancy Pelosi and other Congressmen commute to their homes on?  Who pays for the entitlements and PRIVATE benefits package a Congressperson gets once elected that is much better than the plans they legislate for the rest of us?  How have so many of these lifetime politicians become millionaires with huge accounts on and offshore...but are trying to take out of OUR reach as regular citizens? These people making the rules are NOT Robin Hoods or Mother Theresas. They just try to convince you that they are...

Obama and the Dems have successfully hyped this seasons campaign into a divisive campaign of class warfare and rich versus the poor.  Both sides seem bent on twisting and hyping data, running fast with ¨facts¨, flip-flopping on and distorting views of all kinds. But to focus on what I perceive as Obama and the Democrat´s delusions of reality, lets examine the rest of his statement above.

I agree that in today´s America there is a ¨shrinking number of people who do really well¨.  During his four years at the helm, unemployment has seen scant improvement, macro business factors and markets have been falsely supported by huge Wall Street bailouts by Obama´s Federal Reserve team, and many moneyed individuals and companies have fled America in record numbers. In order to stem the tide of fleeing moneys from our bankrupt system, instead of providing more investment incentives, lowering regulations and providing tax incentives for business to come to the USA...they have instead added new exit taxes for Americans while giving tax incentives to FOREIGNERS who come TO America. To me that obviously points to the increasingly unfair trade and incentive practices that the American government has practiced against its own citizens for decades now.  Foreign held companies have had tremendous advantages over USA domestic companies because foreigners have not paid the same taxes whether it be corporate or personal taxes on their dividends and capital gains. In many industries, American companies have been subject to more strict regulations and taxation than the next door competitor who just happens to be foreign.

While the Dems constantly deride companies that move OUT of the USA taking jobs with them, they do not give honest shrift to the real reasons in many cases. Its not so much about cost of labor in the USA though that is an obvious issue. In many cases the main reason is the non-competitive tax structure in the USA compared to many other legal jurisdictions in the world. To compete across the globe, companies have to maintain competitive profits. If they are paying governments more than double what a main competitor is in another jurisdiction...they will soon be out of business...and jobs will continue to disintegrate.

It seems now that the USA big government approach by both of the main parties is about taxing and fleecing successful businesses. This is primarily because they have already spent most Americans individual tax obligations many times over in just 4 years. The cycle is madly becoming like a socialist or even communist model of redistribution. Recent governments from both main parties have successfully pilfered the USA economy to the point where it will implode...and their irresponsible reaction is to legislate MORE taxes, print MORE money...and then claim it is for the growing poor. It would be like a bankrupt business raising more money saying they are going to buy more equipment or pay down their debt...then turning around and giving themselves bonuses and raises until that money is gone too. Only governments...and churches in some cases...can get away with these actions. For anyone else it would be fraud and conspiracy.

As for giving every American a ¨fair shot¨ at a new competitive economy and growth...if you really believed that Mr. President, you would have given those trillions of Federal Reserve loans to every small business owner or entrepreneur...you know, the people who employ a majority of Americans?  That money COULD have gone directly into small business ventures that create jobs more quickly and effectively. Instead you gave the bailouts to your banker buddies, failed corporate behemoths and failed government entities such as FANNIE MAE and FREDDIE MAC. Don´t start with that fair and even distribution BS.  Your record is dismal on that one.

Finally...the idea of everyone playing by the same set of rules is another pipe dream in today`s America. Justice in America is based on what you can afford to pay to pursue it.  There are so many games being played through ¨minority business¨ acts and the tax code, no one can keep up with all the shenanigans. When people can make more money on unemployment than they can on minimum wages after taxes, the system is a total failure. As the Economist article states it...

 Why should people who prefer leisure to income face lower tax rates? Why should parents and homeowners get tax breaks single renters don't get? Why should young black men get longer sentences than young white women who commit the same crimes? Why should some industries get subsidies unavailable to others? In every case, they shouldn't...
Mr Obama argues it's unfair when foreign governments subsidize their manufacturers. On the other hand, he seems to think subsidizing American manufacturing is not only not unfair in the same way, but is somehow required by fairness.
My main problem with this President...and most in recent memory...is that their actions speak so loudly, I don´t hear a word they say.  America needs a tough leader, willing to dole out tough medicine and tell the truth to ALL the American people.  Sure, you can possibly win an election, like Hugo Chavez just did in Venezuela, catering to the majority of the poor which your government programs have helped grow into increasingly dependent followers with false expectations of government handouts. But in this universe of ¨cause and effect¨, you can´t promise people something you don´t have...and our constitution does not grant you the power to take from others in order to give to your voters.  Your followers need to learn how to fish...not just how to consume them. The days of $30 an hour union jobs for pushing a broom are over as well. If Americans think that is coming back any time soon, you had better put on your reality glasses.

Whether you want to admit it or not, the answer IS in private sector companies, jobs and competitive tax rates for ALL...not higher numbers of government jobs. The answer is in educating people to make something for themselves versus just offering more unemployment payouts and soup lines. I do still think that competition and private opportunity drives healthcare and medical improvements and the possibility of curing Cancer and other diseases that plague us better than ^Obamacare¨. I`m not sure who God is...but you are not him Mr. President.  So please... give freedom, competition and free enterprise a chance. The whole world will be glad you did...at least over time.