President Barack Hussein Obama

Tan Liyang Andrew | u0700107@nus.edu.sg
the ridge & NUSPA
A NUSSU Publication

At this moment, Mr Barack Hussein Obama has been confirmed as the 44th President of the United States of America. The Republican candidate, John McCain, has congratulated and conceded to Obama in a telephone conversation. In being voted into the highest office in the USA, Obama makes history by being the first “black American” to be president.

Photo: http://www.telegraph.co.uk/telegraph/multimedia/archive/01107/PF-Obama_1107124c.jpg

The term “black American”, along with other permutations such as first “African-American president”, first “minority President” or first “non-white president” were bandied about readily by the thousands of articles covering the election.

It makes me wonder, because Obama was born of a Kenyan father and a Kansan mother, effectively making him half-white and half-black. Why did the media, and pretty much everyone else, choose to focus on his black heritage? Perhaps the issue of race has not been put to rest completely, despite Obama’s historic win.

Speaking about race issues, the much talked-about Bradley effect failed to materialise in this election. This effect was so named due to the 1982 election where all polls pointed to Tom Bradley, an African-American, winning the post of governor of California by a comfortable margin.

At the actual voting, however, Bradley was beaten by his white opponent. It was theorised that the inaccuracy of the 1982 polls could be due to respondents’ unwillingness to indicate their reluctance to vote for Bradley, but voting for the other contender in the privacy of the voting booth where they wouldn’t be accused by being racist.

The presidential election system in the USA is interesting, because it does not go by popular vote, nor by proportional representation as some European countries do, but by an Electoral College system. States are allocated a certain amount of Electoral College votes; the citizens of the state will vote for their candidate, and the winner of the state’s popular vote takes all the Electoral College vote of the state.

For example, if candidate A gets even 1 more vote than his opponent, then candidate A sweeps all the votes for that state. This is how Bush managed to win the presidency despite narrowly losing the national popular vote in 2004.

In this election, though, Obama won both the Electoral College votes and the popular vote. At the time of this article, Obama won 324 Electoral College votes as compared to McCain’s 124. That’s a remarkable victory, winning twice the number of votes of his opponent. The popular vote, however, shows Obama winning by 51% compared to McCain’s 48%. The other 1% was held by Barr and Nader who ran as independents.

The Electoral College vote count constitutes a decided victory for Obama, while the popular vote shows a lesser contrast between the two candidates. This means that America on the whole is still a divided country. Obama may be one of the presidents with the greatest political power, after the Democrats made gains in the Senate and Congress elections also held on 5 Nov, but recent history should be kept in mind. Just eight years ago, political pundits predicted a Republican era after the Republican Party swept the presidency, senate and congress.

It took just eight years for their advantage to dissipate. Obama campaigned on a message of hope and change; many eyes would be on him, and expectations of him are so high that it is impossible not to disappoint some people.

I must admit to being a little conflicted on Obama’s win. I am happy about his win because I agree with him on most of the issues he championed. More resources to combat climate change, a promise to withdraw US troops from the unpopular Iraq war in 16 months, a refreshing message of hope and change, more engagements with the rest of the world, better international cooperation, and so on.

What I am apprehensive about, however, is the Democratic Party’s protectionist stance. Democrats are generally in favour of passing measures to protect the domestic industry. This may lead to implementation of trade tariffs.

With Obama as president, it is unlikely that the Doha trade talks would continue, while the number of Free-Trade Agreements (FTAs) between USA and other countries would likely drop. This is not a good sign for any countries exporting to the USA, including Singapore, as their exports would be directly impacted by the trade policies of the new administration.

However, the Democratic Party’s position is a guide of, and not a diktat for, Obama’s course of action. He may opt for a less draconian path that does not involve trade tariffs and angering other countries. While America ponders on the future and change that President Obama will bring, the rest of the world is waiting to see how he makes his first move.

The Credit Crunch and the Asian Entrepreneur

Karthik Balasubramaniam | zechestin@gmail.com.
the ridge & NUSPA
A NUSSU Publication

 

Photo: http://www.bankruptcylitigationblog.com/ist2_141437_arrow_graph_down_rev.JPG

Putting reasons aside, the credit crunch has led inexorably to a startup smash. Startups in the US are affected sorely, visibly by the financial meltdown, though it seems like Europe, though dented, has less affected areas to show. Let’s see how startups and venture capital firms are reacting.

On Oct 8th, 2008, the angel investor Ron Conway advised his companies on their retreat strategies during the credit crunch. Not that he is losing confidence; having promised to keep investing, he is just describing how to prepare storm provisions.

On the same day Sequoia Capital sent an erudite 56 slide presentation to its portfolio company’s CEO’s, mentioning the huge US foreign debt, the US consumer having barely enough to spend (they call it a low disposable personal income) and corporate earnings in Silicon Valley down by 18 percent. No one seems to have much money, and that makes venture capital firms like Sequoia Capital worry a lot: their presentation ends: Get Real, Go Home.

Benchmark Capital put up its own storm warning signs a day later, telling it’s companies to get ‘tight control of their finances’, which, seems like jargon for keep the cash under the floorboards. So much for the top.

TechCrunch, the newsblog tracking the fortunes of tech ventures and startups, has a particularly depressing online survey/counter tracking the number of layoffs post-meltdown. Go here if you are interested: http://www.techcrunch.com/layoffs/.

The survey operates by tipoffs from workers, and October seems to be the month when the credit crunch finally made tech companies hurt where it matters most: the work force. Interestingly enough, even Ron Conway’s letter (also available on Tech Crunch.) says, in several words, if you can’t raise money cut costs, ‘lower burn rates’ that is, fire a few employees.

Benchmark’s long advisory letter zeroes in on the same ‘dispensable’ commodity, labour. It makes sense in a way, though. How else would you cut costs? Save electricity by switching off workstations? Walk to office? Use less of the internet? The rich get poorer, the poor get broke.

Layoffs, low investor confidence, downturns in public markets, etc are the new buzz words, and they all speak the same language of penury to tech start ups, which depend more than anything on investors and money in the kitty early on. Fledgling startups are likely to be affected: they will cease to exist, go into suspended animation at best.

Can we probably decide that this is much like the 1999 dotcom crash, and that the web, and Cyber, Inc. will be back, upgraded, updated and never better?

In this regard, Benchmark Capital’s letter to its portfolio companies is highly illuminating. Observing that the 1999 crash was worse in that it was caused by tech speculators themselves, hence kicking the spiral further inward on the tech field, it also understands that the recent crunch will be felt for much longer, affecting as it does public markets the world over.

What is more important, when money is lost from all sides, it is hard to put it in what is at present only a small, stumbling startup. And money, as is apparent from the credit crunch, is being lost from all sides, from all pockets.

The letter points to an upside though. Money might be getting lost, but still, we can depend on angel investors, and the deep core of venture capital firms like Benchmark, whose investors are generally private, conservative and extremely long-range in their thinking. These are unlikely to cut off funds from the very tech start ups that might play a pivotal role in the reversal of the recession later on.

Which brings us to Europe and its ostensible reaction to the credit crunch. Europe is playing its cards with a very wooden poker face indeed. Everyone has a bad hand, and the Old World doesn’t see the need to scream and agonize along with the others. They are, instead, going for the jugular quickly and cleanly, with Fleck selling out, and other companies quietly shutting down and reapplying to companies.

More importantly the European milieu has thrown up the usual ‘why didn’t you say so earlier’ reaction, with a prominent young investor accusing Sequoia of not warning his company soon enough. However, Allen and Co, another VC firm, did cry wolf early enough, and Fon, his company, was able to make the adjustment soon enough.

Hence, we have two major centers of technological entrepreneurship rocking under the credit crunch and taking all the measures required to stay low and survive. How does this affect Singapore?

Asia has not been affected much by the credit crunch, least of all Singapore, what with Singaporean investment funds Temasek and GIC buying up huge shares of Merill Lynch and UBS. Sitting on huge paper losses they might be, but let the market turn around, and Asian money will have bailed Western banks.

But most Asian products are bought by the US customer, whose pockets are empty right now, perhaps ultimately affecting even the tech venture balance in Asia’s favour, with money and opportunity now at Asia’s leash. They may not be able to buy our ideas or services, but then again, they can’t buy anything. Perhaps we could start the investing, and the buying, and eventually present to a recovered world a lot of Asian tech companies, a lot of western banks owned mostly by Asians. Buy Asian, be Asian.

To conclude, we here have a nice opportunity to put our stereotypical caution and perseverance to great effect. A well known complaint of most Asians I know is that ‘we are behind, by too many years’. The edifices and institutions built in those years of advantage are now empty, for us to move into if we want, and we are moving in to stay. Where else can we get our minds into?