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Mechanistic Destruction: American Foreign Policy at Point Zero
The following article by Canadian historian Gabriel Kolko comes with a "must read" recommendation from Scott Burchill.
The United States has rarely lost any conventional military battle since at least 1950. Nor has it, at the same time, ever won a war. It has successfully overthrown governments through interventions or subversion but the political results of all its efforts-as in Afghanistan in the 1980s and Iran in 1953-have often made its subsequent geopolitical position far, far more tenuous. In a word, in international affairs it bumbles very badly and it has made an already highly unstable world far more precarious than it otherwise would be if only the U.S. left the world alone. No less important, Americans would be far better off thereby. Because-to repeat a critical point-it has failed to attain victory in any of the real wars it has fought since Korea. Its adversaries learned as long ago as the Korean War that decentralization would stymie America's overwhelming firepower, which was designed for concentrated armies, and provided a successful antidote for massive, expensive technology.
All this is very well known. The real issue is why the U.S. makes the identical mistakes over and over again and never learns from its errors.
At the present time it is losing two wars and creating a vast arc of profound strategic and political instability from the Mediterranean Sea to South Asia, it has resumed the arms race in Europe, and it is making Russia an enemy when it could easily have been friendly. Economically, it has run up the biggest deficits in American history, brought on the decline of the dollar, and wherever one turns this administration has been at least as bad as any in two centuries of American history-perhaps even the worst. We now have an unprecedented disaster in the conduct of American power, both overseas and at home, in part because of the people who now rule-ambitions men and women who calculate only what is best for their careers--but also because the imperatives and inexorable logic of past policies and conventional wisdom have brought us to this critical juncture. All the old mistakes have been repeated; nothing had been learned from the past, and official myopia is timeless.
A large part of the United States' problem, whether Republicans or Democrats are in power, is that it believes it has the right and obligation to intervene everywhere, in whatever forms they choose, and that its interests are global. Interventionism-so the consensus among Republican and Democrats goes-- is the cost of its global interests and mission, because it has been convinced for almost a century that it was preordained to remedy the world's many wrongs-and to do so by whatever means it chooses. There is nothing whatever that is unique in this regard in the present Bush Administration. This pretension, which first began during the 19th century and which Woodrow Wilson articulated, is simply not functional and it has led it into countless morasses, bad for the U.S. and far worse for the countries it has interfered with. The fact is that no nation has ever been able to assume such an international role, and those that have attempted to do so came to no good end-they exhausted their resources and passions and follies.
Political conflicts are not solved by military interventions, and that they are often incapable of being resolved by political or peaceful means does not alter the fact that force is dysfunctional. This is truer today than ever with the spread of weapons technology. The U.S. is not exempt from the facts that have guided international affairs for centuries.
The U.S. has already lost the wars in Iraq and Afghanistan for the very same reasons it lost all of its earlier conflicts. It has the manpower and firepower advantage, as always, but these are ultimately irrelevant in the medium- and long-run. They were irrelevant in many contexts in which the U.S. was not involved, and they explain the outcome of many armed struggles over the past century regardless of who was in them, for they are usually decided by the socio-economic and political strength of the various sides-China after 1947 and Vietnam after 1972 are two examples but scarcely the only ones. It is a transcendent truism of global politics that wars are more determined by socio-economic and political factors than any other, and this was true long before the U.S. attempted to regulate the world's affairs.
But Why?
But all this still begs the issue of why the U.S. repeatedly makes the same drastic errors. Are there vested interests in preparing for war? Are illusions based on them, or ideologies-or both?
In part, expensive equipment and incredibly inflated military budget is premised on the traditional assumption that owning complex weapons gives America power, which is determined by arms in hand rather than what happens in a nation's politics and society. In fact, the reverse is often the case, especially when enemies find the weaknesses in this sort of technology and exploit it-as they increasingly have done over the past decades. Then the cost of fighting wars becomes a liability-and America's technological military an immense weakness when the government has huge deficits or lacks funds to repair its aging public infrastructure--a fact that was highlighted when the collapse of a bridge in Minneapolis earlier this month led to the striking revelation that 70,000 bridges in the U.S. are rated deficient. The Vietnam War should have resolved the issue of the relevance of technology to the America's military ambitions, but it did not. The real question is: why?
To a critical but scarcely exclusive sense, the Pentagon's penchant for military toys makes an ambitious, aggressive foreign policy essential. Without enemies and conflicts, real or potential, there is no reason to spend money, and this reality often colored its definition of Soviet goals after 1947-despite the objections of senior CIA analysts. But the Defense Department, and national security establishments in general, are immense and all kinds of constituencies exist in them: there are procurement experts who draw up budgets and go after equipment mindlessly, people who have always dominated its actions, but thinkers too. Each does their own thing and they are often very different. It has always had these contradictions.
But that those who run military establishment have technological illusions, which many ordinary people share in this and other domains of human existence, keeps immense sums of money flowing to arms manufacturers and their minions. There is a very profound consensus between the two parties on arms spending, which began under the Democrats a half-century ago and it will not go away-no matter how neglected the bridges and infrastructure, health, or the like. Arms lobbies are not only very powerful in Washington but create crucial jobs in most states and military spending keeps the economy afloat. Weapons producers make money regardless of whether the Pentagon wins or loses its wars-and making money is their only objective. It is surely a key causal factor even if it is far from being the sole explanation of why the U.S. intervenes where it shouldn't.
It is close to impossible to assign some weight or priority to the arms industry but it must be taken into account that the arms manufacturers have power, strategic lobbies in Washington, contribute heavily to politicians who need campaign funding, and gain financially whether American wins or loses it wars. They are the "x-factor" in the equation but scarcely the sole one. But, at the least, they are very important even when not decisive.
Another explanation is ambitious politicians, who will say and do whatever is required to stay in power or gain it. This factor is so familiar that it scarcely requires repeating, but the cynical ways politicians treat polls and American public opinion is a crucial aspect of this question. There are indeed problems with the public but it invariably senses realities and its constraints well before the politicians-who use he public and then ignore it. The party out of office will cater to mass opinion but usually forgets it once it comes to power-as the recent Democratic Party trajectory shows. This is usually the rule but public opinion is an element that cannot be merely gainsaid, and the Korean and Vietnam wars proved, it could play a decisive role. An increasing majority of the people think the war in Iraq is not worth fighting, and the President is among the most unpopular in history. The public may be impotent or far too passive for its own good, and generally is, but it is far less brainwashed than the advocates of "manufactured consent" concede. How, when, or if its role becomes more crucial is a matter of conjecture. Its influence is usually negligible and takes far too much time to have an impact. Follies are committed long after the public condones them. But that it eventually becomes critical is a fact of life which one cannot make too much of, or too little.
Consensus on ideology and goals is crucial also but that policies fail to work and are increasingly dangerous as a guide to action has been true for a long time and in more obvious as years elapse. The Bush Administration encapsulates it but the basic problem has existed for many decades. What the Bush coterie has seen is the culmination of a logic that is much older. It presides over a catastrophe that began many years ago.
But all in all, these factors have delivered us to our present mess, which may very well exceed any in American history.
Some of the most acute criticisms made of the gross simplisms which have guided interventionist policies were produced within the military, especially after the Vietnam experience traumatized it. My history of the Vietnam War was purchased by many base libraries, and the military journals treated it in detail and very respectfully. The statement at the end of July by the new chairman of the Joint Chiefs of Staff, Admiral Michael G. Mullen, that "no amount of troops in no amount of time will make much of a difference" if Iraqi politics fails to change drastically reflects a current of realism that has existed among military thinkers for some decades (whether he acts on this assumption is another matter and depends greatly on considerations outside of his control). Like the CIA, the military has acute strategic thinkers, and the monographs of the U.S. Army's Strategic Studies Institute-to name one of many-- are often very insightful and critical. Academics tend to be irrelevant and dull by comparison.
The problem, of course, is that few (if any) at the decisive levels pays any attention to the critical ruminations that the military and CIA consistently produce. There is no shortage of insight among U.S. official analysts-the problem that policy is rarely formulated with objective knowledge as a constraint on it. Ambitious people, who exist in ample quantity, say what their superiors wish to hear and rarely, if ever, contradict them. Iraq is but an example, for the entire mess there was predicted. If reason and clarity prevailed, America's role in the world would be utterly different.
Those in power simply ignore the critical military's insights, and the vast bulk of officers obey orders. Many of them know better. They have learned the hard way-experience. Neocon intellectuals and scribblers utterly lack it.
We are at point zero in the application of American power in the world: the U.S. cannot win its extremely expensive adventures nor will it abstain from policies which increasingly lead to disasters for the nations in which it intervenes and for itself as well. All the factors I have mentioned-its myopia regarding technology, the policy consensus that binds ambitious politicians and often makes public opinion irrelevant, the arms makers and their local interests, or the limits of rational inputs-have all combined to deliver us to this impasse. It is difficult not to be pessimistic when-as it should be--realism rather than illusions guide our political assessments. But realism is the only way to avoid cynicism.
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Happy Feet - and another reality check for the Sinofantasists
John Pratt says:
Well, they may need that aid at home soon, because looky here:
The Chinese economic "miracle" is being funded to no small extent by monetary hocus pocus based on pegging its exchange rate.
This in turn ensures the cost of any imported commodities, such as mineral resources, technology, etc, keeps ramming up inflation.
Likewise, the growth at home to meet the export demand because of the rigged exchange rate keeps putting more pressure on inflation.
And the low exchange rate also attracts huge amounts of speculative investment, which is why the Hong Kong stock exchange just keeps going through the roof.
And rams up the inflation rate even further.
Meanwhile, official interest rates on Chinese one-year bank deposits are capped at 3.6 per cent - which means investors receive an after-inflation, before-tax return of minus 2.9 per cent.
So there's nowhere to run for cover if the speculative boom falters. As it must eventually.
Which means the government needs to keep fending off calls to float its currency because that would cut off the capital inflows.
What we've got here, folks, is a massive bubble set to burst.
But that's just reality. Café society and the Babbling Classes just keep on "marvelling' at China's "economic miracle".
I heard George Miller at a function last week burbling on about how "The American economy is about to be overtaken by China."
Really?
That means China's economy is then about to also overtake Japan, Germany, Britain and France which are also bigger than China's, Japan's alone being about five times as large as China's and the USA's about eleven times bigger.
Maybe George should stick to making cartoons. That way fantasising actually accrues an economic reward.
A progress(?) report.
Gen. Petraeus went to Washington ...
He is interviewed on DemocracyNow!.
Film maker Rick Rowley is also interviewed.
As is David Cole.
Tom Engelhardt - Imperial Autism The Petraeus Moment Blots Out the World.
Ray McGovern was ejected from the House - here's his account.
Some Senate reactions to Petraeus' testimony.
And some Reps.
On 9/11 - Greg Palast on the hands off the Saudis issue. Links to video and transcript. Got to look after your friends, especially when there's money to be made. Not exactly oiling the wheels of justice - not that oil isn't involved, somehow.
Sorry we loaded nuclear weapons by mistake.
The fail safe system on US nuclear weapons is not so safe. What if these weapons had be dropped on Iraq or Afghanistan?
nuking Iran stopped by whistle blower?
HI John, I think ,but am not sure, that you have missed the significance of this AMAZING event.
Decomissioned? Advanced Cruise missiles? To Barksdale? hmmm.
Then he told me something I had not heard before.
There are those in the military against nuclear pre-emptive attack. It is worth considering who gave the order to move the missiles and why on earth were they not transported by rail/road as usual and dissembled ,as usual, not ready and armed. ADvanced Cruise missiles...
And later on the same site a commentator says it so well:
What it also apparently shows it that tje mistake was not found,ie five nukes leave the base via a B52 until the plane landed in Barkdsdale and was checked. So have any other ACMs gone missing into B52s heading for Iran? Interesting this appears to have been leaked adn also intersesting that the Army Times ran it.
I wonder if we have some military dissenters present ? The comments are interesting in that site.
And just ot put perspective on who are losing WMD and who are trafficking WMD here is all about Mr Meyer in SA:
He "...was arrested on charges that he was building a nuclear weapon," said Meyer's lawyer Heinrich Badenhorst."...Press reports said that Meyer, who lives in Pretoria, was a member of an international ring involved in the smuggling of nuclear components to Asian countries, Pakistan in particular...."
WMD are a serious concern, but there are plenty of real red lines being crossed elsewhere.
Loading nukes onto a B52 to take to the forwarding base for the ME is rather a concern ,especially when we know there are those in the administration who openly talk of pre-emotive nuke attack against Iran. Now.
Was this the real thing? Was it blown out by a whistle blower? Not the kinda thing that is easy to prove from the public level. I bet behind the scenes there is a scramble going on.This happened on the 30th August.
Cheers
Not only Kolko...
But also Tom Engelhardt is highly recommended, as I do regularly and none more so than this piece, Empire of Stupidity. Lots of internal links to follow and I highlight this one by Gary Kamiya, The waning power of the War Myth, from the Note concluding the piece. The other article linked in the Note is the title piece of this thread.
John, on the matter of China spreading its wings, here is an article I think will be of interest.
US is taking a back seat to China on the world stage.
As China spreads its wings, the US is tied up in the Middle East. While China is funnelling billions of dollars in aid. The US is spending its billions in destruction. We should forget ANZUS and try ANZCHINA.
Hey Craig
Craig Rowley
Well yes......
Lets get one thing straight Craig: I do not know you personally. I have no doubt you are a very nice person. There is no reason why I would suspect otherwise.
I am not on this site to debase, defame or even debate you. I read what you write (I find a lot of this site and the people on it interesting), and I take the time to reply to it. That in my mind is as far as it goes. If a vote came for my beliefs I would be killed. I have accepted that fact a long-time ago. I do not come to a site like this to prove anything. I come to it for intellectual enjoyment.
I do not expect you to ever agree with my views. There is little chance of me agreeing with yours. That does not mean we cannot write back and forth our beilefs for years to come (and find interest). This is not, and has never been a personal issue. Outside of one person (not the obvious) I have never viewed a post as such.
So lets cut out the shit, hey?
PS Unless you are looking for political office. All politicians (potential or not) deserve to be put through the mill!
Details ... on increasing economic inequality
Time for some more details on the reality of increasing economic inequality.
As pointed out earlier, the Gini coefficient for the United States in 1980 was 0.403, rising to 0.428 in 1990 and to 0.462 in 2000.
Now I'd like to point out that the Gini coefficient for the United States in 1994 (according to the Census Bureau) was 0.456.
So when Ronald Reagan served as the 40th President of the United States (from January 1981 to January 1989), he presided over an increase in economic inequality that added about 0.025 points to the Gini coefficient.
When George Herbert Walker Bush served as the 41st President of the United States (from January 1989 to January 1993), he also presided over increasing economic inequality in the United States. In fact, economic inequality within the United States increased at a faster rate under Bush -- the Gini coefficient gained about 0.028.
In contrast, Bill Clinton served as the 42nd President of the United States (from January 1993 to January 2001) and between 1994 and 2000 the Gini coefficient put on only 0.006.
The greater increases in Gini coefficient during the terms of the two Republicans is likely to have had as much or more to do with their decisions during the lead up and aftermath of the recession of the late nineteen-eighties than with US migration inflows during the period.
Perhaps The Policy Proposals Are A Secret?
Gareth Eastwood
I tend to agree with your ideas. My personal favorite would be abolishing intellectual property patents. A clear case of government enabled crony capitalism.
A little off-topic but something I find ironic:
There is a rising trend in both North America, and Europe of reverse migration. Older and established westerners are moving to third-world nations, whilst younger non-established, non-westerners are moving to the first-world. Indeed through forever rising taxes, and charges these new immigrants will be forced into paying for the improved lifestyles (through pension repatriation, rents, investments ect) that will be sustain the lifestyles of those that have left.
Craig Rowley
Still waiting for some concrete fairer globalisation proposals.
Not surprising when one also looks at the rising population - especially through migration. This does not alter the fact people continue to come to the USA in great numbers, and that across the board people are indeed wealthier. America is the land of possible dreams; not the land of communist dreams.
Why would he? The UN is a government agency by any other name.
Indeed Our Enemy Is The State.
Economic Inequality for Dummies
It seems that some can't comprehend even very simple concepts like this: Economic inequality refers to disparities in the distribution of economic assets and income.
Economic inequality can measured using the Gini coefficient, a ratio with values between 0 and 1.
A Gini coefficient 0 corresponds to perfect equality and 1 corresponds to perfect inequality.
Here's the Gini coefficients for the United States at various times:
1967: 0.397 (first year reported)
1968: 0.386 (lowest coefficient reported)
1970: 0.394
1980: 0.403
1990: 0.428
2000: 0.462
2005: 0.469 (highest coefficient reported)
The United States has increasing economic inequality. The coefficient started heading in the wrong direction after the Nixon Shock and clearly the rate of increase in economic inequality was accelerated during the Reagan years.
Details Craig?
Craig Rowley:
I am still waiting to hear your proposals for a fairer globalisation.
Unfortunately there are no conspiracies. The brand of globalisation you speak is pushed by the consumer - that is the people, even socialists.
The increase in economic inequality (whatever that means, one house as opposed to two perhaps?) is not as important as the across the board rises in the standards of living over the past fifty years.
The people who have gained most from globalisation (and will continue to do so) are those that embrace it. For example regions such as the Middle East, and Africa have gained little. I would expect this to continue for however long present trends of illiberal society in this part of the world continues. For example: A man marching around an Iranian square with a bomb, and an AK47 has a limited future earning potential. Burning the American flag may be good for kicks - it unfortunately is not adding to retirement savings. Any controlling national government is a recipe for failure.
Rather than go about creating more failure (world-wide), I would suggest concentrating on narrowing the "economic inequality" by attempting to educate people (as opposed to scaring them) about globalisation, and the benefits of it. It is a fact of life, and it will continue to be a fact of life (yes one day even for Iran), and there is nothing a socialist table of wisdom, and doom merchants can do about it.
Noam Chomsky (the last great trot) gives speeches all the time about the inequality of taxation (tax is indeed a crime). Noam believes that tax favours the "rich". Yet Noam, and friends would like to see more control, and taxation - go figure. I agree with Noam. Taxation does hurt the poor. That is why I would like to see the end to all taxation - hopefully government as well. Noam is though in a structured tax-shelter (for his childrens sake apparently). Nothing wrong with that we all love our children and want what is best for them. And Uncle Sam is indeed a greedy beast. I would think Noam could help his audience more by sharing his tax secrets with them (free of charge of course) rather than attempting to push them into paying more, dont you?
Note: If any person was silly enough to take the Ann Pettifor wishful thinking seriously (debtonation day), and had of acted accordingly, they would have taken a serious hair-cut at the worst possible time. They would now be feeling some very personal "economic inequality".
UN MDG's
Craig Rowley, inequality may well have risen, but overall the world’s poor have improved their standard of living in recent times. The world is on track to meet the Millennium Development Goal of halving extreme poverty. I guess it’s a case of the poor getting richer and the rich getting even richer, at least everyone is heading in the right direction.
What measures would you like to see implemented in order to address inequality between nations? In addition to the MDG’s, my own favorites are genuine free trade (remove US/Euro agricultural subsidies, remove Australian bans on various agricultural items under bio-security laws etc) and allow more open migration from the third to the first world (especially unskilled migration).
UN Millennium Develop Goals Progress 2007
Gareth, have you had a look at the Millennium Development Goals: 2007 Progress Chart (.pdf)? Did you see all the 'biege' boxes showing all the instances where the target is not expected to be met by 2015, and, more importantly, see the far too numerous 'red' boxes showing: "No progress, or a deterioration or reversal"?
Gareth, I agree with you that we are generally headed in the direction desired to see the goals achieved at some time (contrary to the straw man put up by some to misrepresent my position on these issues) and I think we could do better with reasonable regulation of critical systems, e.g. democratically decided laws designed to curb the worst of free market excesses.
Progress toward the Goals: Ban Ki-Moon's view
Also Gareth, having read the Progress Report did you notice that Ban Ki-Moon says this in his introduction:
He's not exactly calling for the same kind of thing we're hearing is 'inevitable' from our anarcho-capitalist proponent and his 'no-goverment nirvana' nonsense.
Free market globalisation & economic exploitation
The particular brand of free market globalisation pushed by free market ideologues is indeed increasing exploitation.
From the Contribution by the International Labour Office to the Fourth Coordination Meeting on International Migration in 2005:
The ILO also released a report entitled “A global alliance against forced labour” in May 2005. The report is the most comprehensive analysis ever undertaken by an inter-governmental organisation of the facts and underlying causes of forced labour in the world today. The report states, among other things, that nearly 10 million people are exploited through forced labour in the private economy, out of which a minimum of 2.4 million are victims of human trafficking; and that forced labour is a major global problem which is present in all regions and in all types of economies.
Free market globalisation and economic inequality
The particular brand of free market globalisation pushed by free market ideologues is indeed producing increasing economic inequality.
The UNDP Human Development Report of 1992 stated:
The UNDP Human Development Report of 2002 stated:
And:
And:
Bound For Failure
Eliot Ramsey
A reason why any such attempts will fail. In the same way similar attempts failed during the cold war. People will exercise their democratic rights (choice) through their decision making. The same way people do by filling out anti-globalisation forms then visiting their local mall (for the latest bargain) or travel agent.
The USA is a fascist state
John Pratt says:
Yes, only when the West starts showing the same high regard for human rights that is shown in the Muslim world will we be in a position to offer criticism of others.
By the way, according to this Washington Report on Middle Eastern Affairs, Islam is the fastest growing religion in the United States.
Just imagine how much faster it will grow once the United States shows the same high levels of religious tolerance as, oh I dunno, Iran or Saudi Arabia?
Love and respect is the only way to have long term victory.
Eliot: I am not sure of the point you want to make. Do you think we should take up the tactics of Al Qaeda, by getting down into the gutter or do you think we should lead by example and show that love and respect for human rights, is the only way to have a long term victory.
Cheers John
Details?
Craig Rowley
Well I think this claim would be a matter of personal perception. Many have gained dramatically from globalisation, and economic liberalism.
People can opt out of globalisation at anytime of their choosing. Some wish though to force every person to opt out. Globalisation is not a conspiracy of a mythical rich elite. It is not a conspiracy of any one group of people, and that is why it will never be controlled.
A lot of nice platitudes but not much detail. I did read the links you provided, and apart from sounding very similar to a one world socialist dream I found little else of any substance. Would you like to give any details of proposed policy?
Sounds like a political speech.
Obviously you look at any disagreement with your views as abuse. A reason I am glad you are not making the globalised rules.
During America's
Torture and abuse no problems, but don't tell the truth!
In the Bush/Howard book on the Art of War, torture, and sexual abuse are permitted. But under no circumstances should you tell the truth.
You say Globalisation. I say the Internationale
The top-down, command economy alternative you are proposing is more than passing similar to the socialist, internationalist models of days bygone.
They weren't without their merit. I mean, the Soviet Union wouldn't be what it is today without them, after all.
Imposing top down economic controls, and the political imperatives required to enforce them, obviates against democracy virtually by definition.
If people don't like economic controls at one level, and choose to opt out of the top-down control type system and do their own thing locally, then the whole top-down, centralised, controlled model starts to fall to pieces.
Witness the history of the entire 20th Century, for example.
This is why the earlier advocates of top-down command systems regularly resorted to extremes of central government control while:
a) calling everyone else fascist
b) redefining 'democracy' in a way consistent with command models - eg: the German Democratic Republic (an actual prison complete with walls); Democratic Kampuchea (a nation-wide extermination centre); the People's Republic of China (go figure).
c) forming bread lines around polluted rust-belt slums
You say I proposed; I say you misrepresent
The comment headed You say Globalisation. I say the Internationale misrepresents my position on globalisation:
I have proposed no such thing.
Boom/bust
Michael Coleman, I prefer to consider prosperity in broader terms than just economic growth. A growing population is sufficient to achieve economic growth. Things like life expectancy, access to food/clothing/shelter etc would also be required aspects of prosperity in my view. In the last hundred years (or whatever period you’d like to use), the vast majority of the world’s population have enjoyed rising real incomes, rising life expectancy and so on. The way I see it, the majority have ‘prospered’ in recent times.
Re “Prosperity implies economic growth requiring increased consumption of energy and raw materials by expanding populations.” Prosperity implies none of these things. I reckon increasing prosperity implies a more efficient use of resources, not an increase in their consumption. A rising population automatically results in increased resource use, not rising prosperity.
Re, “no-one has been able to make the case that exponential growth can continue indefinitely when constrained by a finite resource base.” I’m not making that case Michael. Has anyone here actually made that claim?
Re “your idea that prosperity is the natural order is just silly.” Regarding silly ideas, consider what they say about ‘glass houses’ Michael before you get carried away.
Re “I contend that boom and bust is the true natural order of life.” This doesn’t contradict my view or the comments by JD Rockerfeller. Each period of ‘bust’ is eventually followed a period of ‘boom.’ Sometimes the folks suffering through the bust aren’t around to enjoy the subsequent boom (and vice versa). Sounds like you actually agree with me and JD?
They devour their reason
Globalisation, as it is currently conceived and operated is producing increasing economic inequality, exploitation and instability. These outcomes are not an automatic product of globalisation per se, rather they are the results of the particular brand of free market globalisation which is being imposed by free market ideologues amongst the elite.
I see the potential in another brand globalisation, l'altermondialisme as some call it, one which is a positive phenomenon holding out new opportunities for human co-operation, peace, shared wealth and social solidarity. I described that kind of possibility in a post published on Webdiary -
They devour their reason and scarce think: the globalists come to the island nation.
That's what the concept of progressive globalisation is about. It's about seeking to strike a balance between commercial self-interest and the ideals of equality and social justice and the simple good sense there is in ensuring we're engaged in sustainable activities given our environmental situation.
All Paul Morrella can come up with to critique my view of how globalisation can be shaped positively is cliché again and, even more pathetic, abuse.
criminal US policy, but who benefits?
Kolko is the kinda guy who can put pen to paper and write this perceptively the day "Mission Accomplished" was declared.:
[Counterpunch extract]
SO how come everyone is taking so long to know what he knew then...? OR has it all been so obvious to those without neoconblinkers?
Foreign policy but really,for whose benefit? Certainly not the average mortgage paying american whose job has just gone awol in multinational wetdream Globalisation. Even Haliburton has moved offshore to UAE. Who benefits this US foreign policy? Means motive opportunity for any crime investigation.. The current direction of Us policy is criminal.
Cheers
Globalisation Is As Globalisation Does
Eliot Ramsey
I would think it would be apparent to reasonable people. People can make any rules they like. Whether or not people will follow them is another matter.
Yes, the types we all call delusional.
Obviously the delusions become a lot worse. Eventually leading to one claiming everyone is lying. Including the markets!
Craig Rowley
Attempting to control what "choices" people make is bound to fail. Obviously you do not agree with the current choices being made? You would not be attempting vainly to "shape" anything if you did.
Globalisation is neither perfect nor imperfect. Globalisation is just a fact of life. Those looking to control it are bound to fail.
The world is based on flaws. There is no such thing as perfection. Fixing one flaw merely creates another. I do not wish to waste my time jousting with windmills. I do not view globalisation or markets as anything that need to be "fixed". It and they are what they are.
Note: Obviously the market has made strong gains since "debtonation day". It is obvious to all but the blind, Ann Pettifor's predictions were incorrect.
Fair
"The second group includes individuals who take a broader systems (institutions and laws) approach to globalization in order to address global problems."
I think that's the group I was referring to below. You know, the group which will tell everyone else what they should think is 'fair' even if they don't actually think it themselves.
The triumph of the will not.
Paul Morrella says:
The reason some folk cannot get their head around this is because they cannot acknowledge that other people - the people making up various publics including markets - will go ahead and make decisions for themselves, according to their own lights and without regard for your or my definition of what is 'fair'.
The people who have most difficulty understanding this think they can impose their personal definition of 'fair' on everyone else through an exercise of their personal willpower, usually by simply announcing their intention to do so.
That if they rant at everyone long enough we'll all fall into line.
There Is No Argument Or Case
Craig Rowley:
Unfortunately that you wish me to "mount a case" is the problem here. Globalisation has already happened. You are attempting to make an issue about right and wrongs when no such thing exists in this instance. Markets are markets and they behave accordingly. There will always highs, and there will always be lows. What is fair or just has nothing to do with the matter.
I see the present situation as opportunity. I and no doubt some others have gone about acting as if this were the case. Winning a non-existent argument has nothing to do with it. I (and them) will be either rewarded for our courage and foresight or we will be punished for our follies.
Eliot Ramsey:
"Progressive globalisation" sounds nicer.
Yet more cliché from Paul
Exhibit 1: The title Paul Morrella chose to put on his earlier comment: “Reality Proves My Point”
Exhibit 2: What Paul Morrella then said in that comment: “There is nothing to argue or prove.”
Exhibit 3: The title Paul Morrella chose to put on his latest comment: "There Is No Argument Or Case".
And yet ...
***
Paul Morrella: "Globalisation has already happened."
Actually, Paul, it is still unfolding and I'm satisfied that we have both the need and the power to shape it:
So does Angela Merkel:
Now Angela Merkel and I might have different views on what the right political framework and fair rules might be ... but we agree that the kind of globalisation we have was shaped by the choices people made and the globalisation we can have in future will be shaped by the choices people make.
***
Paul Morrella: ""Progressive globalisation" sounds nicer."
Yeah, it does Paul ... but using it as some kind of feeble retort is just another cop out from you. It's yet another device you're using to avoid offering any considered critique and I'm led to conclude that you've not yet read the discussion paper on Progressive Globalism. When you do you'll notice the part that says:
I assume you, Paul, are in the first camp, whereas I'm in the second camp. How about you tell us why those in the first camp don't want to fix the flaws?
I have a question
Craig Rowley says:
It's important to look at how US foreign policy impacts on the global economy and then in turn how that impacts on communities around our world, so we could, for example, start talking about an alternate (sic) American foreign policy approach that supports what some have termed "Progressive Globalism". Anyone up for that?
Okay, I have a question. Going to the link you provided, I immediately noticed this:
How is that different from free market Globalisation? Indeed, how does creating markets in the global south for high value-added first world products (not just American products) differ from what's already happening?
And how does one distinguish between a "fair wage to migrant workers" and wages that reflect worker productivity?
The Bizarre Life
Craig Rowley:
Opinions are from time to time known to differ. At least I was not accused of being part of a world conspiracy. This gives me hope a meeting with at least plastic utensils (at the table) may one day be possible.
Paul's Bizarre Comment
Paul Morrella: "At least I was not accused of being part of a world conspiracy. This gives me hope a meeting with at least plastic utensils (at the table) may one day be possible."
What on earth was this bizarre comment by Paul all about?
In my opinion it can only signal that Paul can't present reasoned arguments on the topics at hand. Sure, he can present cliché after cliché, unlike Gareth Eastwood who can actually mount a reasonable case.
Richard: Sometimes it's good too a walk around the block. In opposite directions, if you don't mind. Mornings litke this I'm glad my offspring is female.
Any chance you two could wind back the tense-i-ometer a couple of notches?
Winding back the tense-i-ometer
G'day Richard, I'm happy to stick to debating issues relevant to the topic of this thread, which is as the title of Kolko's article suggests: American foreign policy.
At the moment the conversation (aside from the odd bizarre comment) has narrowed to discussion of the economics aspects of American foreign policy and that's fine. It's important to look at how US foreign policy impacts on the global economy and then in turn how that impacts on communities around our world, so we could, for example, start talking about an alternate American foreign policy approach that supports what some have termed "Progressive Globalism". Anyone up for that?
Doom
Craig Rowley, I think increasing minimum capital requirements is a pretty blunt instrument. The financial world has advanced from that era. The world’s banks are already preparing for Basel 2 which will consider a variety of underlying risks (i.e. credit, operational, market risks etc) when calculating a bank’s minimum capital requirements. Off balance sheet risks will be covered under Basel 2 via the recognition of related credit and market risks, which are included in the calculation of capital requirements. Some banks actually use off-balance sheet instruments (e.g Credit Default Swaps) to mitigate credit risk, not increase it. Banks in this situation will be able to hold less capital under Basel 2, than previously required under the original Basel framework.
Australian banks (including my employer) are hoping for (virtually expecting, depends on APRA though) a reduction in capital requirements under Basel 2. I reckon the BIS is heading in the right direction with Basel 2. I don’t think that increasing capital reserve requirements would do much good for credit markets.
Michael Coleman, re “The idea that prosperity is the natural order of things, based on a mere 92 years of past performance is hardly credible.” Ok, exactly how far back would you like to go then, 200 years, 500 years? What do you consider a sufficient period of time?
Re “debt-financed economic system” what system are you talking about Michael? We operate within what is essentially a global economic system now (the impact US mortgages can have are a great example of this). For every borrower there is an equal and opposite lender, as a whole the economic system doesn’t work from a position of debt.
In my view, recent events in the financial markets are evidence of their resiliency, not a sign of the collapse of civilisation.
Busted
Prosperity implies economic growth requiring increased consumption of energy and raw materials by expanding populations. I suspect you don't want to go there, but no-one has been able to make the case that exponential growth can continue indefinitely when constrained by a finite resource base. Unless you can explain how this might happen, or point to people who are prospering without consuming ever more of the planet's finite resources, your idea that prosperity is the natural order is just silly.
I contend that boom and bust is the true natural order of life. Evolutionary processes depend on busts, population crashes and extinctions. It happens to civilisations too. The evidence is there if you're willing to look.
I Agree Gareth
Gareth Eastwood
I believe the meaning of the term "financial crisis" is a matter of opinion. I do not agree with Ann Pettifor's opinion, and I think it would be fair to say neither do you. Time will tell which opinion is valid. I will though say that if one had of started accepting the Pettifor opinion a few years back many potential gains would never have been realised.
Markets have always had highs, and lows. I agree with the J.D quote. I see no reason why this situation will not continue into the future. Re-regulation of markets will not alter this fact.
Monetary Madness
US home prices are tumbling and the trend will accelerate:
The USA is going to choke on the reckless lending binge kicked off by Alan Greenspan and the Federal Reserve after the highly speculative stock market bubble popped at the turn of the century. A recession is what the markets needed, but negative real interest rates were what we got.
The derivative market exploded from a few tens of billions of nominal value to around 500,000 billion USD in the space of seven years. The connection between financial and physical reality has been totally smashed as the nominal value of the derivatives market now represents many years of global production of goods and services. The derivative products are so opaque that no-one can readily assess the risks of collapse in this market.
Too bad that so many Hedge and Pension Funds around the world are holding highly leveraged derivatives stuffed with mortgages that will never be repayed and backed by house prices that were never sustainable against purchasers' incomes.
Gareth Eastwood, you seem determined to dismiss the evidence that all is not well in the world of high finance. Your trust in JD Rockefeller is touching, but, in my view, very misguided. Every prospectus I have read has included, in the fine print, a warning that past performance is no guarantee of future outcomes. The idea that prosperity is the natural order of things, based on a mere 92 years of past performance is hardly credible. It ignores the stark reality that exponential growth cannot be sustained against a finite resource base. Without growth, how is a debt-financed economic system to survive?
Cheap energy is a crucial resource constraint facing our civilisation. Despite consistently high prices, global oil supply has not increased for some years. Most oil exporting nations are booming due to the money rolling in, and their domestic consumption of oil is booming too. Even if they manage to keep production flat, the oil available for export will decline, driving prices even higher. It is worth noting that the US fiscal position has been on the wane since their transition from a net exporter of energy to a net importer in the early 1970's.
The planet is littered with the skeletal remains of civilisations that have flourished and died. Many ran smack-bang into the irresistible force of resource constraints. I have no doubt that some of the citizens of these failed civilisations tried to warn their peers of the folly of their ways, but it seems that we humans are not very good at planning for the future. Perhaps most of us are instinctively prone to fall for some variation of the Rockefeller spin you espouse.
Chill
Craig Rowley, I tend to agree with the line Paul is taking here. Ann Pettifor has made numerous unsupported claims, some quite bizarre. I don’t believe her statement “It is deregulated finance that has forced down the price of labour” has been proven anywhere, she hasn’t provided any basis for this assertion. Paul may not be providing much to support his opinion, but than again neither did Ann. Fair’s fair Craig.
Regarding a few of your own comments, I think you’re reading too much into recent events. For example “The "credit crunch" came about because for a decade the lack of reasonable regulation generated an excess of "easy credit".” Exactly what sort of ‘reasonable regulation’ do you think is required? A credit crunch comes about when financial institutions are unwilling to extend credit; you can’t force them to lend money.
Ross Gittins has yet again added a sane version of what the central banks have actually been doing over the last few weeks, from the SMH.
“the central banks haven't been giving anyone any free rides. They haven't been printing money or surreptitiously lowering interest rates. They've been doing what they do every day, but doing a lot more than usual because of the special circumstances.”
Ann Pettifor included a quote from JD Rockefeller, dismissing it as an example of ‘spin.’ Ann might like to review the quote again, JD has been proven right. Unlike her own hysterical piece which appeared to be accurate for about a week, it looks like Ann was a little premature in calling this a “prolonged financial crisis.” History may see her “debtonation day” as little more than a buying opportunity. I really like JD’s quote, one to remember when fear grips the financial markets.
“These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again."
Fair's fair
Gareth Eastwood: “Paul may not be providing much to support his opinion, but than [sic] again neither did Ann.”
Gareth, you are entirely correct on the point that Paul Morrella has not been providing much to support his opinion … but it is then fair to say only that Ann Pettifor hasn’t provided supporting material for that particular statement on the price of labour.
Even so, you’ll find that it is true that in western economies the growth rate of real wages has been falling lower and lower over decades. I suggest Gareth that you go look at a chart of growth in real wages in major western economies over the past 40 years. And take on board the view of ANZ Bank's chief international economist, Amy Auster, as reported in The Australian by David Uren:
Gareth Eastwood: “Regarding a few of your own comments, I think you’re reading too much into recent events.”
I think you, Gareth, are not comprehending what I’ve actually written about recent events. For example, you echo Paul in stating the obvious – “A credit crunch comes about when financial institutions are unwilling to extend credit; you can’t force them to lend money.” What I’ve pointed out, reflecting Ann Pettifor’s point, is that a cause of lenders being suddenly “unwilling to extend credit” is found in the long period where a lack of reasonable regulation had allowed lenders to make credit too easy to get in the first place. The argument is not about adding regulation to add to liquidity now, it is about the failure to use reasonable regulation to avert a sudden credit crunch in the first place.
Gareth Eastwood: “Exactly what sort of ‘reasonable regulation’ do you think is required?”
I think that after we are clear of this credit crunch, we'll still need to deal with the underlying debt crisis. So, for a start, a reasonable regulation would be increasing reserve requirements for banks (i.e. expand the reserve net to include some of the off balance sheet risks that the banks have embarked on).
Prophecy prroves mine...Mark Of the Beast
As the lunar eclipse approaches, bullion has closed today at $666. US dollars, of course. Take your omens where you find them, I always say.
(Sorry to interrupt, fellas, thought I'd throw that in. )
What happened to Nuclear disarmament?
Hans Blix is right, we hear a lot about the Non-Proliferation Treaty, it is a double bargain, it is time for the nuclear weapon states to commit to nuclear disarmament. Otherwise the spread of nuclear weapons is inevitable.
Reality Proves My Point
Craig Rowley
There is nothing to argue or prove. I do not have to convince anyone that my opinion has merit. Look at the market since "debtonation day". This is called reality.
The finance sector is already regulated. Why would any reasonable person think more regulation would work? A credit crunch is a lack of liquidity. Making money harder to come by is not going to resolve a credit crunch. It will only make matters worse.
Perhaps you could first tell me the problem with using a limited resource such as gold?
Conflict control??? During the period spanning 1945-70??? Surely you jest?
Yes, like I said: Red-tape.
I have not; and will not, give you any advice.
Probably longer than the predicted attacks on Iran.
If central banks entering markets means "financial crisis". We most go through a lot of them.
Since "debtonation day" I have turned what was looking a rather slim year into a quiet a healthy one. I hope a "financial crisis" comes along every week!
Actually it proves a few of mine
Exhibit 1: The title Paul Morrella chose to put on his comment: “Reality Proves My Point”
Exhibit 2: What Paul Morrella then says in his comment: “There is nothing to argue or prove.”
You know for someone who thinks there is nothing to argue or prove he’s certainly trying very hard (but unsuccessfully) to argue and prove that his opinion has merit . That is called “contradiction”.
***
Paul Morrella: "The finance sector is already regulated. Why would any reasonable person think more regulation would work? A credit crunch is a lack of liquidity. Making money harder to come by is not going to resolve a credit crunch. It will only make matters worse."
The "credit crunch" came about because for a decade the lack of reasonable regulation generated an excess of "easy credit".
Yes, liquidity is what the world's financial network is lacking at the moment, but the liquidity crisis happened because of questions regarding the value of several types of securities, which in turn had been used as collateral for outstanding loans.
With all your claimed knowledge of economics, Paul, you should know that in a fiat money system, where credit can be created on demand, investors armed with limitless supplies of borrowed money tend to bid returns on investment down to absurd levels. Eventually lenders become desperate for new borrowers and make irresponsible loans. Then they try to sell interests in these 'toxic waste' loans to someone else as quickly as possible ... and guess what? They were able to find suckers to buy interests in these loans because major Wall Street credit rating companies were giving investment-grade ratings to tranches of high-risk loans.
Paul Morrella: "Perhaps you could first tell me the problem with using a limited resource such as gold?"
I could. But let's cut to the chase and instead I'll acknowledge there was a problem using a gold standard as part of the Bretton Woods system. Indeed, from the very beginning gold was the vulnerable point of the Bretton Woods system. Bretton Woods worked reasonably well for 25 years, but it was flawed in its underlying assumptions. By pegging international currency to gold at $35 an ounce, it failed to take into effect the change in gold's actual value since 1934, when the $35 level had been set.
But you must remember, Paul, that the United States owned 80% of the world's gold reserves at the time they championed the establishment of the Bretton Woods system. They wanted the gold standard.
John Maynard Keynes preferred establishing a system that would have encouraged economic growth rather than a gold-pegged system. He proposed that the goal of the United Nations Monetary and Financial Conference (which gave birth to the Bretton Woods system) was "to find a common measure, a common standard, a common rule acceptable to each and not irksome to any."
Unfortunately, the United States preferred the plan offered by its representative, Harry Dexter White.
White prefered gold. White was wrong. Perhaps Keynes wasn't.
Paul Morrella: "Conflict control??? During the period spanning 1945-70??? Surely you jest?"
Yes, Yes, and No, I do not jest.
Paul, you must have never heard of Pax Americana.
Anyway ... Bretton Woods had the original intention of smoothing out economic conflict, in recognition of the problems that economic disparity causes. The nations that agreed the system knew that these economic problems were at least partly a root cause of WWII, and that economic reform would help to prevent future wars. The rest of your comment is a load of rubbish echoing two losers.It needs no response.
We All Make Our Own Choices
Craig Rowley
I am not here to "prove" anything to you. What you do with your own finances is your business. I have merely given my opinion on the worth of the Ann Pettifor advice.
Ann Pettifor's bizarre attempt to control markets through re-regulation (there will always be highs and lows) will fail. The way it failed in the glory years (her opinion) she highlights. The re-introduction of excessive red-tape will not cure any ills. That a person could even believe markets are controllable is enough for me to steer clear of any advice given by such a person.
Ann Pettifor:
It may rain tomorrow or it may not. Say something enough and cover all the bases, and one day because of the law of averages you will be right. The opportunity cost of waiting is the downside. How long has Ann Pettifor been predicting collapse?
Ann Pettifor:
The market has not collapsed so the market is "lying". Self delusion is indeed an affliction.
Cliches or comprehensive critique - Your Choice
Paul Morrella: "I am not here to "prove" anything to you."
Like I said Paul, you've "proved" nothing with your constant unconvincing clichés ... but that's fine with me.
Paul Morrella: "What you do with your own finances is your business."
Yes, what I do with my own finance is my business. I'd ask what the point of your comment on that could be ... but I really don't care why you fill your comments with clichés.
Paul Morrella: "I have merely given my opinion on the worth of the Ann Pettifor advice."
Yes, without presenting any argument supporting that opinion and convincing anyone that your opinion has much merit ... but again that's fine with me. Just keep asserting your opinion, giving us nothing but more clichés if you like, Paul.
Paul Morrella: "Ann Pettifor's bizarre attempt to control markets through re-regulation (there will always be highs and lows) will fail."
If you can get beyond the clichés perhaps you could tell: What makes you think Ann Pettifor has 'attempted' to control markets? What exactly is so bizarre about the actual ideas Ann Pettifor raises (not the ideas you imagine she's raised)? Why would reasonable regulation of the finance sector automatically fail?
Paul Morrella: "The way it failed in the glory years (her opinion) she highlights."
Feel like explaining your opinion on what exactly was so wrong during the period covered by the Bretton Woods system?
You know some say that until the early 1970s the Bretton Woods system was reasonably effective in controlling conflict and in achieving the common goals of the leading states that had created it (especially the United States); can you demonstrate the converse, Paul?
Paul Morrella: "The re-introduction of excessive red-tape will not cure any ills."
Who said anything about "excessive red-tape"? Only you Paul. From what I've read Ann Pettifor is simply calling for greater transparency
Paul Morrella: "That a person could even believe markets are controllable is enough for me to steer clear of any advice given by such a person."
That you choose to reframe reasonable regulation as 'controlling markets' is enough for me to steer clear of any advice given by you.
Paul Morrella: "It may rain tomorrow or it may not."
Gee ... who'd expect yet another cliché from you Paul?
Shall we get into a recurring cliché and counter cliché loop?
How about: "When it rains, it pours"? Let's not.
Paul Morrella: "How long has Ann Pettifor been predicting collapse?"
If you read what she wrote, Paul, before coming up with clichés instead of critique, then clearly you would learn the answer to that question.
What central banks do....
See that phrase in there, Paul ... the one about how central banks had to 'jump-start stalled financial markets'?
Er, isn't that what central banks do?
Yup. It's what they do.
Yup it's what they do at times of financial crisis
"... acting as a "bailout" lender of last resort to the banking sector during times of financial crisis (private banks often being integral to the national financial system)."
See that, Paul, someone else is pointing out what Ann Pettifor had. It is a "time of financial crisis" as evidenced by the need for central banks to act as a "bailout" lender (pumping liquidity into the system). As Ann Pettifor put it: