The United States has handled its economic diplomacy with shocking myopia.

The US Treasury's attempt to cripple the Asian Infrastructure Investment Bank (AIIB) before it gets off the ground is clearly intended to head off China's ascendancy as a rival financial superpower, whatever the faux-pieties from Washington about standards of "governance".

Such a policy is misguided at every level, evidence of what can go wrong when a lame-duck president defers to posturing amateurs in Congress on delicate matters of global geostrategy.

Washington has enraged Britain by trying to browbeat Downing Street into boycotting the project. It has forced allies and friendly countries across the Far East to make a fatal choice between the US and China that none wished to make, and has ended up losing almost everybody. Germany, France, and Italy are joining. Australia and South Korea may follow soon.

The AIIB is exactly what the world needs.  Here's why...

I'm starting this HFR with tears in my eyes.  They are tears of joy and pride.

I just got an email with a link to a story last week (1/05) in the Marine Corps Times.  The story title couldn't be more uninteresting - Changing Sea Duty - but the first line is not:

"Marines and sailors are at the center of a test that could change naval warfare."

Someone in the USMC came up with a revolutionary way to deploy Marines more effectively and carried it through from conceptual creation in his brain to implementation at sea.

That someone, who has now changed US naval warfare for the better, is my son, USMC Captain Brandon Wheeler...

From the personal to nationally heart-warming news. 

The Oscar Nominations for the 87^th Academy Awards were announced yesterday afternoon (1/5) - with the voting members of the Academy of Motion Picture Arts & Sciences proving they are not racists by refusing to nominate actors and actresses just because they are black...

This is absolutely hands down - or is it pants down? - the best headline of the week:  Thief Demands Victim Drop Pants, Victim Kills Him...

Have fun, there's more.

Why do very successful nations often adopt policies that lead to their undoing?

After a revolution or major reform, some countries allow a high degree of economic freedom, establish the rule of law, protect private property rights and establish low tax rates with strict limits on government spending and regulation.

The economy takes off, the citizens become far richer and then the government mucks it up, usually by attempting to redistribute income and expand state control.

Is Chile, which has been one of the bright spots in the world economy, falling into this pattern under socialist President Michelle Bachelet?

For the past three decades, Chile has outperformed the other South American countries and now has the highest per-capita income in South America, averaging approximately $22,000 per year on a purchasing power parity basis.

The World Bank lists Chile as a "developed economy," and it was the first Latin American country to become a member of the Organization for Economic Cooperation and Development. The average Chilean has a per capita income about three times higher than in 1983.

And now the Chilean people seem poised to let Ms. Bachelet throw it all away.

The legendary violinist Jascha Heifetz (1901-1987) was strolling down 57^th Street in Manhattan one spring morning when a young man, looking lost, approached him.  "Excuse me, sir," he said to the virtuoso not knowing who he was, "could you tell me how to get to Carnegie Hall?"  Heifetz smiled gently, nodded sagely, and answered, "Practice, my son, practice."

It's a famous joke - Jack Benny was fond of telling it - that points to an eternal truth.  One of the principles of living a happy life is that it takes willpower, it takes discipline, and it takes practice in order to live well.

This may seem strange if your vision of happiness is ease and momentary pleasure. But ease and momentary pleasure are not what make for a happy life, any more than ice cream is what makes for a healthy diet.

In my work I talk about and teach a lot of different skills that can make for a happier life - if you practice them. Knowing about them, understanding them, thinking about them are fine intellectual exercises, but they will not improve your life.

What improves your life is practicing the skills of a good life; or, if you're more ambitious, practicing the skills of a great life.

If you want to see a bunch of really happy folks who think Christmas has come early for them and can't wait for the coming new year, come to the Capitol Hill Club, the power watering hole for Republicans in Washington.

There, you'll see GOP Congressmen, Senators, and their top staffers all slapping each other on the back and saying, "We're not in 2006 anymore, Toto," or "2006 is like, so over."  Happy, happy guys n'gals.

And why shouldn't they be?  The President's got their back and they've got the hapless Dems by the short hairs.  It's fun to be in DC this December.

What's that?  Do I hear you saying in a tone of cynicism, "Yes, Jack, but the Pubbies never know that when you've got your foe on the ropes, you put him down on the canvas.  As always, they'll let the Dems off the ropes rather than finishing them off."

There's a lot of history to justify such cynicism.  Arguing that it's different this time is like the definition of a second marriage:  the triumph of hope over experience.

Yet there are three good reasons for such hope:

Chapter Eight: Malinche

Aguilar found Malinali cowering in the lee of large sand dune. Perspiration was pouring off her, her chest was heaving with rapid breaths, and her eyes were glazed with panic and terror. “Doña Marina!” he cried, “What is wrong?!” He got a wet cloth and patted her brow. Her eyes slowly focused on him. Finally, she stammered “I… must talk… to Captain Cortez…”

Aguilar was startled. Nonetheless, he said he would relay her request. A few moments later he returned and beckoned, bringing her to the Captain’s tent. Cortez was sitting in his chair and looked up at her. Malinali stood still, legs quivering, desperately trying to subdue her breathing and her emotions. Cortez quickly saw the girl was abjectly terrified. He motioned for Aguilar to bring her a drink of water.

“Doña Marina,” said Aguilar, “What is it that you wish to speak of to the Captain?”

Malinali closed her eyes to listen to her father’s voice. “Ixkakuk!” she heard her father say, “a true queen is always in command of her feelings and fears!” As she opened her eyes, Cortez saw her transformed into a different person. Instead of a shaking slave girl scared out of her wits, suddenly standing before him was a regally erect woman of extraordinary beauty, poise, and calm. A woman who looked directly into his eyes as she said to Aguilar:

“I must ask Captain Cortez if he is a man or a god.”

Would you make an effort to find additional ways to reduce your tax burden if your tax rate was suddenly raised 50 percent?

The higher one's income, the more incentive a person has to find ways to minimize his tax burden -- which is why very high tax rates on the rich always fail to produce the projected revenue.

Republican congressional leaders have pledged to undertake tax and spending reform. To do so, they need accurate projections of the impact on tax revenues, job creation and economic growth resulting from their possible alternative reforms.

This requires realistic models of what is likely to happen, so they need to find the best possible experts to manage the Joint Committee on Taxation and the Congressional Budget Office.

These are two key questions I would pose to the candidates for these positions: