"How the Noughties Were a Hinge of History"

Martin Wolf seems to think so. But it's rather doubtful in my opinion. Humans have a tendency to overestimate the importance of the moment. And every moment is a hinge in one way or another. I grew up hearing about Japanese supremacy and now it's common knowledge their economy is decline. Then there was the fall of the USSR and the 'end of history'. Now high school students hear about the inevitable dominance of China. Though China is a country whose growth has been driven by cheap surplus labor, and those days are either at an end now, or will be in the near future. Remember this was never the case for the United States , in fact the wages of free labor in the United States were always higher than Europe due to scarcity. So we will see how the China story plays out.

Wolf frets about the decline of relative Western economic power. But really, this would be a good thing for the vast majority of the world. Just maybe not for the Bilderberg folks and their like. Most of the world lives in Asia and most people there are very very poor. They need more economic 'power'.

Wolf quotes Benjamin Franklin : “We must all hang together or assuredly we shall hang separately.” Is Wolf addressing the world's elites when he says 'we', much as Franklin was addressing the nascent American ruling class ? Then what about the rest of us ?

1"How the noughties were a hinge of history"- Financial Times; Wolf

Where to Invest Surplus ?

David Harvey asks:

If we are to get back to three percent growth, then this means finding new and profitable global investment opportunities for $1.6 trillion in 2010 rising to closer to $3 trillion by 2030. This contrasts with the $0.15 trillion new investment needed in 1950 and the $0.42 trillion needed in 1973 (the dollar figures are inflation adjusted).

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What spaces are left in the global economy for new spatial fixes for capital surplus absorption? China and the ex-Soviet bloc have already been integrated. South and SouthEast Asia is filling up fast. Africa is not yet fully integrated but there is nowhere else with the capacity to absorb all this surplus capital. What new lines of production can be opened up to absorb growth?

I think there is more potential for growth than Harvey envisions. The massive rural populations of China, India and Indonesia have not been integrated into the consumer or credit markets. Of these countries, only China's rural population has been mostly integrated into production. There is still a long way to go. However, they are some fairly stiff infrastructure and cultural barriers to further extending capitalism, especially on the consumer demand side of things. If one had to guess though, capital will find a crack and open it up, much like water. This does not mean the process will be pleasant, efficient, peaceful or desirable. But capitalism has a long way to go unless it faces significant organized opposition.

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Having lived in the Philippines, this lack of integration in the rural areas is very evident. There are still a lot of people 'living off the land' in a pre-capitalist mode of production, and even the few who work in factories are mostly producing, not consuming. And no one has access to credit in the way a Westerner does.

1"Organizing for the Anti-Capitalist Transition" - David Harvey

China To Go Into Trade Deficit in 2010 ?

The E.U. is carrying a trade surplus, and the U.S. trade gap is dwindling. In both cases this is primarily a result of weakness in domestic demand. Likewise, China's trade surplus noticeably decreased last month.

Given their capacity issues, a trade deficit might force China to devalue their currency, even against the debased dollar. This could act as a trigger for the kind of dollar-carry reversal that many people only expect when the Fed raises interests rates in 201(?).

1"Europe's Trade Surplus Spikes" - The Business Insider
2"U.S. Trade deficit shrinks by 7.6%" - San Diego Union Tribune; Calbreath
3"China to stay a plodding "ox" in year of the tiger" - Reuters
4"In Asia, 2010 Likely to Be as Bad as 1998" - Seeking Alpha; Cooper
5"MOFCOM: China's trade surplus may further narrow next year" -People's Daily Online

"Arbeit Macht Frei" Recovered

From the BBC:

"The "Arbeit macht frei" sign stolen from Auschwitz in southern Poland has been found in the north and five men have been arrested, police say."

This is good news. However, the original sign should never have been left up. It's too important and too easy to steal on location. It should have been removed and put on public display in a safe area, under 24 hour security. A replica should be put in its stead. This type of replica replacement is not unusual.

1"Police in Poland find sign stolen from Auschwitz gate" - BBC

Copenhagen Marks the End of the Post World War 2 Order

A better world is possible, as is increased chaos, war and factionalization on a global scale.

From the UK Independent, and a 'source at the heart of the negotiations':

"this was the first sign that China is emerging as a superpower, which is not interested in global government, is not interested in multilateral governance that affects its own sovereignty or growth."

China is unlikely be a superpower in the sense most people think; it has too much extreme poverty and will continue to have for decades. It also has no Navy to speak of. Its resistance at Copenhagen was more a sign of weakness, not strength. They don't want to nuke their economy, which has coal as 70 % of its energy source. However, China combined with other so-called emerging capitalist economies now have the weight to at least push back against 'the West'. Is there room at the top for many more people, within a world economic system which has been dependent on cheap labor and energy for its development ? I'm guessing not.

1"China stands accused of wrecking global deal" - The UK Independent

They Hate Us For Our Freedom

We Will All Be Speaking Norwegian

Or the UK will, at least. Hide your daughters proud Englishmen, Fish and Chips will become Lutefisk and Chips:

Norway's Sovereign Wealth Fund "has become so large that it now owns more than 1% of the world's shares, is Europe's biggest equity investor and speaks for 1.7% of all listed European companies" says the UK Guardian.

More forbidding is this: "The fund's exposure to the UK will soon increase further, as (CEO)Yngve Slyngstad is planning to invest into the UK property market in the coming months."The UK is the first property market we will go into," he says."

After all, "At £259bn, they (the fund) have never been higher and could easily cover the UK's £175bn budget deficit."

(substitute China for Norway ; would the Guardian be so sanguine ?)

1"Norway's sovereign wealth fund: £259bn and growing" - UK Guardian; Fouche

Green Tariffs !

China is driving the rest of the world's exporters into the ground. So it's natural that some type of resistance is going to concocted. After many generations of lecturing about Smoot-Hawley, it looks like 'green tariffs' is what Washington is coming up with to put a friendly face on a trade war.

...the Chinese refusal to accept verification measures could also lead to calls for punitive tariffs on Chinese goods coming into the United States. The House bill allows for the imposition of tariffs on goods from countries that do not constrain their carbon output. A group of 10 Democratic senators wrote to Mr. Obama two weeks ago warning that the Senate would not ratify any treaty that did not protect American industry from foreign competitors who do not have to meet global warming emissions limits.(1)

1"China and U.S. Hit Strident Impasse at Climate Talks" - NYT
2"Obama hard-pressed before Copenhagen meeting " - Xinhua

60 Votes in the Senate ?

I don't recall Bush II needing 60 votes to pass any of his favorite bills.

Democratic politicians are often as weak and craven as their conservative adversaries portray. But it's inherent in the politics, defending a system of private profit and property while grandstanding against its 'excesses'.

A World of Nation States

Marxian contradictions are more than apparent at Copenhagen:

From the Guardian :

"But tonight it appeared that many did not want to risk being pressured into signing an agreement they believe would be against their national interests."
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"One key point of contention is the US and EU insistence that emerging economies such as India, China and Brazil agree to peak their emissions by 2020. Developing countries argue that this would lock them into poverty."

1"Poor nations threaten climate deal showdown at Copenhagen summit" - UK Guardian

"India Deluged with Demands for New States"

The British used these factional divides in India to take control of the country. No one did Divide and Rule like the British.

Some anonymous Chinese bloggers have also mentioned it recently, as well.

It's worth mentioning that India's per capita income is lower than any country within the South American continent. And the U.S. brain-drains India of many of its professionals.

1"India deluged with demands for new states" - LA Times, Magnier
2"Does Beijing really want to “break up” India?" - The Hindu; Krishnan

"National Interest Trumps Everything Else"

As Indian Environmental Prime Minister Jairam Ramesh says.

It's a world of nation states. And failure at Copenhagen seems poised to be the historical marker for the end of the post-World War 2 order, as enforced by the United States. Capitalism without a systemic regulator means a collapse into spheres of influence; trade, proxy and shooting wars. We seem to be at the beginning of a major breakup and it is impossible to know what emerges at the end.

Can Atheists Get Their Own B.L.S. Category ?

Since the BLS has categories for many other areas of self-definition, why not add Atheist ? What if one wants to know the unemployment rate for Atheists ? And for that matter, why not classify student test results by religion rather than ethnicity ? (Maybe Atheists have high scores and low unemployment !)

More seriously, the BLS defines ethnicity as a socio-political construct, and goes out of their way to note it is not a genetic categorization. By their own standards therefore, there is no reason for ethnic categories to get such play as opposed to a myriad of other possibilities. It's poor and unilluminating social science.

When it comes to academic achievement, is there a stronger correlation between the rather hazy definitions of ethnicity and race as opposed to religion ? In fact, the strongest correlation is the educational background of the household a child lives in.

The reason for the focus on skin color and ethnicity is an outgrowth of nationalist left politics from the 60's. These type of movements are and were easily co-opted. After all, capitalism is about selling as much merch as possible, and money is a common denominator.

Meanwhile, the BLS can lump Hmong refugees and Hong Kong-Chinese engineers into a single category (Asian) and call it science - all rather silly, but much of the statistical analysis regurgitated by our government is.

So just give The Atheists their own slice of the pie, too. Call it Atheist Studies.


1"Atheists at Christmas" - Ap; Condon

How is EU / IMF Austerity Going to Go Down in Greece ?

The Greeks aren't afraid to riot.

Why Currency Revaluation in North Korea ?

This article states it was aimed at wiping out an emerging middle-class (or bourgeoisie).

This social strata is developing because of policies that permit private markets as a way to boost production. Those with moderate amounts of private capital are now wiped out. State connected 'elites' have their money in foreign banks or foreign denominations, and are unaffected. Likewise, workers and pesants basically have no money or saved capital, and are likewise unaffected.

Note to Classical String Musicians re: Vibrato

Vibrato is icing, not the cake. Icing without cake makes one sick after a while. And there is plenty of substance to cake without any icing.

Space Based Solar Power

It's coming, or at least, the Pentagon and Washington hope so:

California regulators on Thursday went where no regulators have gone before — approving a utility contract for the nation’s first space-based solar power plant.

The 200-megawatt orbiting solar farm would convert solar energy collected in space into radio frequency waves, which would be beamed to a ground station near Fresno, Calif. The radio waves would then be transformed back into electricity and fed into the power grid.

Most of the United States' economic decline comes not from China, the boomers, bad morals, or Wall Street greed, but from the moment the U.S. became a net importer of energy. Peak Oil in U.S. domestic production triggered an ongoing long-term outflow of wealth. The wealth drain of energy costs was cited specifically by Volcker when he took over the leadership of the Fed in the late 70's.

The U.S. ruling class has fought against this through a long string of reckless wars and alliances which have further drained the country. Space based solar power offers the somewhat fantastical possibility of reversing these setbacks.

It won't come from earth based solar power - with its intermittent energy source, and storage and gathering problems.

1"Solar Plant in Space Gets Go-Ahead" - NYT

A World of Nation States

As one of America's leading gangsters reinforced yesterday :

Fed Chairman Ben Bernanke on Thursday rejected the idea that low U.S. interest rates were helping to fuel speculation overseas and potentially inflating dangerous new asset bubbles.

"It's not the United States' responsibility to ensure that there are no misalignments on every economy in the world," Bernanke said. "I think it needs to be understood that United States monetary policy is intended to address both financial and economic issues in the United States."

Earlier this month, a senior Chinese official charged that the Fed's pledge to keep U.S. rates low for an extended period, coupled with the weak U.S. dollar, were creating "new systemic risk" for the global economy.

1"Bernanke: overseas bubbles not fault of low U.S. rates" - Reuters

What the War on Terror Has Brought the Philippines

State supported and financed private armies to oppose guerrilla movements in Mindanao. One of these private armies just went on a killing spree of journalists, peasants and opposition politicians recently. And the leaders of this private army were President Arroyo's 'men in Mindanao' - people who delivered her hundreds of thousands of votes in the last disputed election.

What To Make of China Car Sales Numbers ?

GM sold more cars in China last month than the U.S. Is this the result of increases in private consumption, or state-backed 'investment'.

Gordon C Chang says the later:

While optimistic analysts point to astounding car sales–up 70.5% in July, 94.7% in August and 83.6% in September–there are reports that central government officials have ordered state enterprises to buy fleets of vehicles and that these businesses are storing them in parking lots across the country. These stories are as yet unconfirmed, but they are consistent with statistics showing that gasoline sales have been flat this year–up only 6.4% in August, for instance, and sliding since then from all indications.

This is a somewhat crucial question, it seems to me.

Fed Balance Sheet Hit 2.2 Trillion A Few Weeks Ago

Looking at the pretty chart, over half of these 'assets' are MBS purchases - in other words, mortgage backed securities not dissimilar from those which precipitated the beginnings of the financial crash. They are garbage if sold on the open market now; the Fed will hold them until they can be sold for something.

While the wall of de facto money printing is being sucked up in the West to pay down debt, it is inevitably going to cause bubbles in the developing world.

Surviving Banks Are Swelling Even Larger

BNP Paribas has assets at 125 % of French GDP, and Barclay's 108 % of British GDP, according to Bloomberg.

Finance remains mostly in the hands of the West. But production continues to shift to emerging Asia, and at least for now, it seems that consumption slowly is as well.

U.S. Public Education is in Crisis !

Kennedy said it's so:

"That public education is in a state of crisis today is well known. There is less agreement on the cause and on the cure. I can only hope that those who recognize the urgent need of improving public education in this country will not exhaust their efforts in looking for a scapegoat, but will join in attacking the problem at its very roots."

Science and math education sucks :

"The teaching of the physical sciences and mathematics in our secondary schools has declined; about half of those with talents in these fields who graduate from high school are either unable or uninterested in going to college; and of the half who enter college, scarcely 40 percent graduate. The task of reversing these disturbing trends is in large measure up to our public schools and their teachers. It is up to our teachers' colleges and their graduates."

and, the Soviet Union will bury "us" (substitute China and India, as Thomas Friedman would):

"The Soviet Union already has available for this work more engineers and scientists than we presently have in any capacity in this country, and very nearly as many as this country and Western Europe combined. In recent years, the output of new engineers and scientists in the U.S.S.R. has surpassed that of the total United States and Western Europe graduating classes in these fields - their current enrollment of such students in institutions of higher education exceeds our own - and we are already falling short of even our current needs. Their lead may become even more serious, and in the most critical areas of technical knowledge within the next decade, according to Allen Dulles of the CIA, "unless we quickly take new measures to increase our facilities for scientific education."

From: 1960.