A Social Stability Problem

A well-known Tulsa CEO told an “inside baseball” story about his company.  It would seem that persons unknown on a daily basis tried to hack into the company’s computer and accounts. It got so bad that the FBI made a call.  What they did was show from where in China the hacks were originating.  It was multiple locations within China.

As recently as last week, the Washington Post reported in an article entitled “Obama Should be Angrier about China Hacking U.S. Security Clearance Info” that confidential information from the databases of the Office of Personnel Management (OPM) had been lost.

The agency had initially reported that the files of 4.2 million federal workers were “filched” from the OPM databases.

This figure has now grown to between 18 and 30 million personnel files.

The information is from security investigations of current, former and prospective federal employees and contractors. It also includes military files, social security numbers and thumbprints. The “background checks often unearth sensitive and intimate matters and the loss may put many at risk of blackmail.”

The Washington Post wrote, “President Obama ought to be far more steamed about the break-ins than he appears.”

They went on, “This was an unforgivable failure of stewardship that should lead to firings for incompetence.”  The OPM Director Katherine Archuleta refused to shoulder any blame saying, “I don’t believe anyone at the agency is personally responsible.” “If there is anyone to blame, it is the perpetrators.”

At a time when China is expanding its sovereignty in the South China Sea some 700 miles from their homeland and with impunity trying to steal military and corporate secrets, what is the president’s reaction?  On July 8th, it was to announce plans to cut 60,000 soldiers from Army ranks.

This also comes on the heels of setbacks in Iraq against the Islamic State.

Infantry brigades at Fort Benning will be reduced to battalion size.  U.S. Army units will be twice the size of the Marine Corps, which is not considered a land force, but an amphibious one. Marine units are now berthed aboard foreign ships since the Navy has lost much of its transport.

Not everything is coming up roses for the Chinese regardless of how hard our president looks the other way.  Most of the world’s dictators have taken their full measure of Mr. Obama and found him wanting.

The Chinese would have you believing that their economy is superior and doing very well.  Well, it’s not.  They build cities and buildings collapse.  Their pollution is cutting short life expectancy and now their middle class is on the verge of being wiped out through foolish stock market investments.

At this writing, nearly 33 percent of the Chinese stock market has disappeared.  At least 1,331 companies have halted trading on China’s mainland exchanges. This is to prevent further stock sales and loss of collateral values.  Chinese companies are allowed to use their own stock as collateral for loans.  In the United States, hard assets such as accounts receivable , inventory and real estate are used – not one’s own stock.

Most Chinese companies carry high debt levels.  In order to get those debt levels down, companies were urged to go public and use the proceeds to pay down debt.

One hundred million Chinese investors were also urged to invest in these stocks.  Sophie Wang, a 32-year-old teacher, is quoted in the Wall Street Journal as having opened a stock trading account two weeks ago on “the advice of my hairdresser.” She lost her investment.

About $3.2 trillion has been lost in the last three weeks.  The numbers are probably greater since the Chinese cannot be trusted to give out correct information.

With so many Chinese having lost their savings, this creates a “social stability problem” for the government. The public has lost confidence in their communist leaders. Perhaps the Chinese will back off their worldwide plans until the United States is rid of Mr. Obama?  Maybe there is still hope?