Category Archives: economic growth

The Obama Legacy


Historians will debate the importance of the Obama Administration and its role in American history for decades to come, of course. The legacy which presidents leave behind them is always a concern of our chief executives, and it has been of even more importance to Barack Obama. As he marked a milestone in his tour of duty. leaving on a foreign tour, with a successor he opposed now chosen, he publicly drew his own optimistic record. He carefully picked, of course, in a press conference, what he considered the best interpretation of events over the last eight years. But at least for the time being, when his policies and their repercussions are still relatively fresh, it is hard to draw a balance sheet which is less than disastrous.
Obama, of course, perhaps more than any other recent president, is an ideologue – and he insisted in his political campaigns that he aimed at a “transformation” of American society. His framework for events is a combination of his studies of history but overlaid by the socialist and pro-Communist views of the little social-political group around the University of Chicago who launched his career.
There is no doubt that he has effected changes, whether they are indeed transformations, and whether any have been beneficiary, only time will tell.
But any honest examination of the effects of his strategies is a record of miscalculation and failures. Perhaps the most dramatic ones have been in foreign policy. His campaign to withdraw American power and decision-making from the international scene has demonstrated what had always been apparent to serious students of foreign affairs: the enormous power of the U.S., economic, political and military, has a role in any international confrontation even when Washington chooses to remain neutral or withdraw its influence. A world order without U.S. participation is not only unimaginable to our allies but something our adversaries always question as a possibility.
The Middle East is the most dramatic example of the failure of Obama’s effort to remove American leadership and power in the interelated conflicts there. First, his effort to weaken the U.S.-Israel alliance encouraged the Moslem terrorists in the area. Then, Sec. Hillary Clinton’s courted the brief Moslem Brotherhood regime in Egypt – overthrown by the military through popular demand. Obama and Hillary attempted to boycott the new military rulers thus providing an opportunity for Russian arms sales and influence where it had been expelled a half century ago by pro-Western Egtptians. In Syria, Obama’s initial declaration of opposition to the Basher al Assad regime was followed by withdrawal. Washington’s retreat assured the descent into a bloody, irresolute civil war sending a flood of millions of refugees into neighboring countries and Europe. The threat of force followed by its withdrawal has returned Moscow to a base in the eastern Mediterranean and helped extend Tehran mullahs’ state terrorisn excesses across the Fertile Crescent, even into Latin America. A treaty to curb Tehran’s nuclear weapons, never submitted to the Senate as the Constitution fdemands, is rapidly disintegrating
In East and South Asia, Obama’s ambivalent policies toward Chinese aggression have encouraged Beijing to aggressive territorial claims against its neighbors, discouraged unity among the Southeast Asians against Chinese Communist threats. Again Hillary’s much publicized pivot to the Western Pacific has failed to materialize. Slowly, the rape of the American economy by the Chinese through export subsides and currency manipulation – begun in the Bush Administrations — has become so clear that the Trump Administration qill have no option but a dangerous crackdown.
Obama’s role as the first American Afro-American president was, whether admitted in public discussion, seen as an important opportunity to continue to heal the historic American race problem. But whether in part because his own exotic background linked him neither to the rising black middle class nor the poor of the ghetto, he either took nondefensible positions on individual race incidents or neglected completely the mayhem of his own Chicago hometown. One has to assume that the American black leadership can only see these past eight years as a failure by a president, whatever his color, to contribute to solution of the race problem which appears to most observers to be in an even worse condition than at his entry into office.
Obama’s claim for his Affordable Care solution to long-term U.S. medical care is nearing collapse with skyrocketing costs and failure of the insurance framework which was to support it. His steady stream of executive directives for additional regulation and environmental restraints has contributed toward the slowest and most erratic economic recovery since World War II.
Despite his rhetorical skills and personal popularity as the first black president, Obama’s legacy will be a negative one. As the anti-Obama vote for Donald Trump has demonstrated, it will also cast a shadow on many of the techniques and political forms his very talented political team gave the nation.
sws-11-14-16

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The decision laying on the table


In the last critical hours before the American people decide their new leadership, the hyperbole will mount into near hysteria. Much, if not most, of what is said is either irrelevant or grossly inaccurate. Even the descriptive monologues of The Talking Heads are either exaggerated or dead wrong.
No, it is not certain this is the most important election in history, even recent history. That would have to left to historians with a more dispassionate view decades if not centuries from now.
No, it is not the most dramatic or controversial presidential election ever. Greybeards will remember when a dashing, young, handsome utilities executive organized the balconies at Philidelphia in 1940 to wrestle away the convention from the floor and domination of the historic Taft family of Cincinnati. [In many ways he set the style for the Kennedy brothers a generation or so later.]
No, not the most drama ever? going to work an early November 1948 morning on an overnight shift through an empty Time Square bereft of its NYC Democrats only to find a few minutes later that Harry S Truman had won a victory that surprised almost everyone included the professional politicians.
American presidential campaigns have always been as much show and tell as serious electoral proceedings. The parties were one of the few major governing features the Founding Fathers did not envisage. But even the otherise untouchable George Washington complained to his Thomas Jefferson follower, soon to be president himself, that Democratic-Republican critics were out of hand in their fight against they saw as the royalist Federalists around the first president.
None of this is to minimize the importance of the decision coming in next week’s voting booths. [Early voters by mail or whatever as a new innovation not to be discounted]. The voters are being given a choice of two candidates who may represent more differences than usual. They are not reflected in the policy arguments – which have been few and far between. Hillary Clinton, despite her enormous reliance on the Baracl Obama Presidency’s support, would likely drift quickly away from many of his policies, the disastrous Obamacare and the American overseas withdrawal where she is quietly much more hawkish.
But it is the tone that sets the two contenders apart, not their differences on policies. One has to take Donald Trump’s more flamboyant throw-away proposals with more than a dash of salt. Yes, Washington and the American people have tired of bearing what they consider an overload for the maintenance of the North Atlantic Treaty Organization. But the argument, like all policy conundrums, is complex: is the solution in an expansion of European forces in thegface of new Russian aggression in Georgia, Crimea, Ukraine. There are the complicated payments for resident American forces [which in any event would have to be maintained if in North America]. It’s an old and complicated argument, as old as the Treaty itself. But as the most successful alliance in history, NATO won”t be abandoned overnight whatever Trump’s throwaway suggestion.
But what Trump is adding to the political mix is a sense of the amateur, the non-professional political – one he rides to success on and cherishes. He may know, as he claims and which seems likely, that as a successful big businessman he has more than the novice’s share of understanding of how the system operates. That makes him, he claims in an interesting argument, the one to best tackle and reform it.
But what really sets this election apart – if, indeed, it is that unique – is that that the amateurism which Trump represents and the knowledgeable if tarnished professionalism of Hillary introduce a new and basic “feel” to the contest. There’s little doubt that Trump has reversed the traditional party roles, the mystic that the Democrats since at least Franklin Roosevelt’s time that they represented the little people and their Grand Old Party opponents were the creatures of Wall Street. We may never see those speeches Hillary gave at enormous fees for the corporations [nor Bill gold auxiliary speaking tours from the Clinton Foundation] but her ties to big capital are now well known.
The big policy questions may indeed be how much Trump could and would change major trends in the U.S. economy with his “amateurism”. Some of his [and Hilary’s] economic promises are downright foolish. Neither can nor would “return” the “jobs” they are promising. Washington’s actual contribution to the economy – even with such expensive outlays as FDR’s and Obama’s – has minimal effect. In fact, what business craves at the moment is the withdrawal of Washington’s bear hug. Meeting the demand for jobs against a tsunami of technology which is routinely eliminating them would be an enormous feat; America’s economy even traveling at its current slow rate demonstrates that new phenomenon.
So what’s at stake in a few hours is not thoughtful contradiction of ideas but the contest between a rank if talented amateur and a gifted is tarnished politico.
sws-11-04-16

The Finns choose


Do the Finns know something we don’t?
Reporting out of Helsinki – as deficient as ever with the mainstream media – says the Finns have negotiated what amounts to a military alliance with Washington. Finnish Defense Minister Jussi Niinistö says he hopes the deal – incorporating joint military training, information sharing and research – will be concluded before the U.S. presidential elections.
Given Finland’s long and tortured effort to maintain its neutrality, one has to speculate. The move appears to fly in the face of growing American criticism and perhaps support of the North Atlantic Treaty Alliance as well as the Obama Administration’s general withdrawal.
Helsinki’s No. one concern [with its 5.5 million], of course, has to be its giant Russian neighbor [143.5 million]. It’s not a new one, nor a simple one: when Moscow grabbed Finland in its wars with the declining Swedish Empire, it made a distinction. The Grand Dutchy of Finland was not part of the Tsarist Empire; an Helsinki statute memorializes favorably the ill-fated Nicolas II as Grand Duke since he continued to permit Helsinki autonomy.
But in 1939 Josef Stalin made demands Helsinki would not meet, the Finns gave Moscow a black eye in the three-month Winter War. With their white-clad ski troops and wirery little Uzi submachine gun, the Finns held off the Russians long enough to win the hearts of most of the democratic world. Even the hardest-nosed U.S. “isolationist” cheered the Finns [except for an Communist English professor at Chapel Hill, N.C. – where else! – who set up an “Aid for the Soviet Unuion” desk!]
But the cheering didn’t include breaking the American Neutrality Act and the West Eutopean democracies were still appeasing dictators to avoid the outbreak of War. According to later statistics by Soviet Dictator Nikita Kruschev, 1.5 million Soviet men were sent to Finland and one million of them were killed, while 1,000 aircraft, 2,300 tanks and armored cars and an enormous amount of other war materials were lost. Little Finland’s losses were limited to 25,904 dead or missing and 43,557 wounded.
But in the end, the Finns paid a heavy price, reparations originally totaled $300 billion [1938 prices] in electrical goods, shipping and motors. But ironically the goods shipped to the Soviets – which did not do much for an already crippled economy there – industrialized a former agricultural country.
Even the territorial concessions were stark, in the long term, including abandoning the heartland of the old Finno-Urugian heartland in the Karelian peninsular [where workers were once recruited for building Peter the Great’s Petrograd window on the West]. More than 400,000 Finnish Karelians,] or 12% of Finland’s population, had to be relocated. But their generally higher skills and education spread across the remainder of Finland helped build the new economy wqhich by the 2000 was leading the world’s wireless telephony.
Stalin, who said he feared an alliance of the Finns with Nazi Germany because of its prominent Baltic German minority, produced a self-fufiling prophecy. Nazi troops employed Finnish bases after Hitler’s attack on Poland opening World War II. [The Finns held out against some of the more notorious Nazi repression, including moving against its small Jewish population.] In the postwar settlement, Finland lost access to the Arctic and more of Karelia. [But, again ironically, even large recent Finnish investments in Karelia timber and minning where Stalin moved in other Empire settlers, has left it a crippled appendage of Moscow.]
Successive Finnish governments since World War II have tried to maintain a neutrality between the Blocs in the Cold War, sometimes aided at its back by a nominally Swedish neutrality. [Swedish neutrality has often been honored more in the breach than in its observance: Stockholm permitted transit of Nazi troops to Norway in 1940 and was an important German source of high-tech weaponry during the War].
Helsinki has already signed a similar agreement with the U.K. and both Sweden and Finland have taken part as observers in recent NATO meetings and military exercises. Finland spokesmen, with a 800-mile border with Russia, say the option of joining NATO is open, but opinion polls show a majority opposed. Although Vladimir Putin has publicly announced the withdrawal of Russian troops on Finnish borders, that is not the case, and the threat – also hinted at in relations with the Baltic States including against fellow Finno-Urguians just a short ferry ride away in Estonia with its large Russian-speaking minority.
The general speculation is that Finland is abandoning neutrality because of the growing threat from Putin. But it may well be just the opposite: despite the recent attempt to rebuild Russian military forces after breakdowns in the August 2008 attack on Georgia, there is a widespread view that Putin is bluffing, that continuing threats against Ukraine and the Baltics are only feints. Russian Federation forces, more and more dependent on Moslem recruits from Central Asia, are in sad shape.
If that were the Helsinki view, it might well explain why neutrality before a diminished foe is less an option than an alliance with even an increasingly reluctant American intervention and a NATO badly needing reconstruction. And there are the American elections which could turn U.S. policy around.
sws-08-24-16

What to do about Turkey?


Vice President Joe Biden’s highly publicized visit to Turkey next week is likely to prove critical, if inconclusive. Whether he is able to establish a new relationship with a North Atlantic Treaty Organization [NATO], the one with by far the largest military forces after the U.S., is crucial to the whole Middle East as well as the U.S. bilateral alliance and with its European NATO allies.
Biden is seen as trying to make a new bargain with Pres. Recep Tayyip Erdoğan. In the past few months, Erdogan has accelerated his accumulation of power through the usual machinations of a popular leader but with authoritarian tendencies, shucking elements of Turkey’s secular constitution. The recent failed military coup – apparently by the last remnants of the secularists who through military dominance have been the guardians of an effort to maintain the non-Islamic state – has been an excuse for increased repression and rampant anti-American propaganda.
The fear is that Erdogan is now turning his back on almost a hundred years when the country tried to move to a modern state with top-down Westernization. The abandonment of the state capitalist role for liberalization of the economy over the last decade had delivered unprecedented growth and prosperity. But that boom has ended, in part another victim of the worldwide economic slowdown.
Turkey had always been a model for other Moslem governments trying fitfully to break away from traditional Islam which combines government with religion. That struggle goes on among the 1.3 billion people in the Arab-Moslem world – from Morocco to Indonesia. And while no adequate response has yet surfaced, Turkey had been perceived to have made the transition. That now appears dubious at best.
But once again, the world is in one of those periods when 1500-year-old concepts of Arab-Moslem conquest and forced conversion has been part of the religion’s creed. That many, perhaps most, Moslems would ignore this concept is not enough to block a determined, fanatical minority from jihad – propounding the duty of a Muslim to maintain and spread his religion by whatever means.
Erdogan has played a clever game. He has managed, despite the bitter rejection by many outspoken European Union officials, to continue the hope of Turkish adherence to the Bloc. His flirtation with the Islamists — with such moves as reestablishing the death penalty — has now, however, vitiated that prospect.
He blackmailed German Chancellor Angela Merkel for free movement of Turkish nationals within the EU, swapped for Ankara stemming the flow of Syrian and other Middle East refugees into Western Europe. But Merkel’s original welcome resulting in more than a million migrants entering her country last year is increasingly producing a backlash. Integrating newcomers with completely different cultural values has failed spectacularly, demonstrated in highly publicized crimes including rape.
Unlike the Europeans, Biden has the luxury of negotiating from a stronger hand, unlike the Europeans’ proximity and increasing problem of their growing largely unassimilated Moslem minorities. He can exploit Erdogan’s wildly fluctuating foreign policy which has failed in establishing a neo-Ottoman regime building on its once imperial presence in the region. A flirtation with Moscow – which supplies half its energy thereby running a huge trade deficit — is a feint aimed at Washington and its European allies. But just as they find themselves on different sides in the Syrian civil war, Erdogan cannot ignore Moscow’s threatening attempt to reinstall the Soviet role in the Black Sea and the Balkans.
Biden has to come home with something. One trophy would be at least promises for Turkey to tighten its borders, stop permitting aid to flow to the Muslim terrorists, and promising a more active Turkish collaboration in fighting Daesh [ISIS and ISIL], hoping that Erdogan recognizes that his Islamicism will not protect him from rising Moslem terrorism. But getting Turkey firmly back into the Western alliance would require stronger leadership of those partners than the Obama Administration can muster.
sws-08-16-16

Jobs, jobs, jobs…


In the hot lather of an unusually rambunctious presidential political campaign, more than a little nonsense is being slung about by the rival candidates about ending the current lethargy of the U.S. economy.
First of all, of course, the world’s job market is not a finite number.
When the international economy is robust, it is so intertwined that creation of jobs in one national economy is bound to produce them among their trading partners. That’s why it is wrong to talk of the Chinese and other low priced labor having “stolen” American jobs.
True, China is running a huge trade surplus with the U.S. In 2015, Beijing’s export surplus to the U.S. over American goods to China was a record $365.7 billion. But beyond the statistical review lies a basic consideration for both countries’ economists and officials: China is accepting a debt of an increasingly devalued U.S. currency for its labor and its own resources and imported raw materials sold to the U.S.
One could, indeed, make the argument that while subsidizing its exports and manipulating the currencies, Beijing may be “stealing” foreign employment, But it is also – an essentially poor country – exporting capital. Few of those who are blathering about the current American economic scene are remarking on the low=cost consumers’ goods that these Chinese policies have produced for the American consumer.
The campaign promise made by both candidates to “return” jobs from China and other low wage producers, is equally subject to criticism. If, as is generally assumed, this would be done by erecting tariff barriers against these imports, it would mean higher prices [and presumably less consumption] by the U.S. consumer. That could produce additional revenues for the federal government, of course – indeed, the main source of revenue for the American government before the enactment of the 1913 Sixteenth Amendment to the U.S. constitution permitting a direct tax which did not – as the Constitution requires, a per capita distribution among the States.
But what may be far more important is speculation about what these “jobs” would actuallybne were they “returned” to the U.S. Given the incredible speed with which the digital revolution has revolutionized all phases of American life, including manufacturing and services, it seems likely that any “return” would produce quite different employment than that which departed. Increasingly, perhaps more than the “escape” of jobs abroad,, American unemployment is produced through the introduction of these advanced technologies/ What ever happened to “dispatches” for delivery networks or to the old-fashioned highly trained “cashier” at the retail checkout?
What often seems the logical solution to this problem is the reeducation and retraining of workers for new and different, and usally enhanced, jobs. Enormous sums have been devoted over decades to the problem of reeducating.
But over the decades enormous sums have been expended with out great effect by both the various levels of government and by private employers. Most studies show that displaced factory workers in the United States on the average have lower wages after retraining to other positions This si also true for tiaison jobs which develop from the offshore “escape” of American industry.
These rehabilitation programs have built in handicaps. Often the worker who is to be retrained is in mid-career, older and less amenable to retraining than a young person just entering the workforce. It also presents a difficult problem due to the individual personality of some workers. Researchers estimate that under the best conditions one expensive academic year of such retraining at a community college increases the long-term earnings by about 8%t for older males and by about 10 percent for older females. But in an age of increasing technological tools, that problem appears to be magnified in any future attempt to find employment for these workers.
Rather than talk in terms of “bringing back: jobs which have been outsourced overseas, the politicians – and their economists – had best be working on the expansion of the economy with new more sophisticated jobs and careers, both for the unemployed and those new entries into the workforce.
sws-08-14-16

Bratton goes, crime goes on


The departure of William Bratton as New York City police commissioner comes at a moment when police establishments all over the country are under extreme pressure.
Bratton, a veteran of not just New York City but Boston and Los Angeles police departments, represents the best of what being a policeman in American has meant. He is the refutation of the current campaign of calumny and destruction led by those who use the relatively rare incidents of police brutality and discrimination against minorities to condemn all law enforcers.
It was under Bratton’s leadership that New York City’s Mayor Rudy Giuliani dramatized the obvious but often forgotten necessity not to tolerate violations of the law, however minor. Any excuse of crime, no major how small [breaking windows for sport], was the beginning of the breakdown in civil order, they argued. And Giuliani’s campaign to eliminate minor infractions of the law as well as the more egregious crime was eminently successful.
Some of the methodology – the ability to stop and search suspects on the street without a warrant, for example – has been under fire from sincere guardians of our human rights. Yet it is clear that these methods, kept in their proper place and perspective by commanding officers such as Bratton, have been remarkably successful in eliminating what had become an environment of criminality of the 60s and 70s in the New York City.
Any fair minded observer recognizes that there have been police abuses in the past. Like any organization, the police have their “bad apples”. But the current campaign to use such instances, publicized by a sensationalist and often twisted media, is an effort to undermine all that Bratton has stood for in the crusade to maintain order and civility in our busy and complex urban culture.
Unfortunately, some of our public figures have lost their balance in confronting the issue. Courting such radical and pernicious groups as “Black Lives Matter!” is the most outrageous example. Its origins in Ferguson. Missouri in a supposed violation of a black man’s rights and death by a police officer is bogus. Witnesses, local authorities and the Department of Justice after extensive investigations have all confirmed that what happened was, instead, an attack on a policeman by a veteran criminal offender.
Even more destructive, marching through the streets by Black Lives Matter supporters calling for the death of policemen was rewarded by the Obama Administration with invitations to the White House. Responses from others who have fought for law and justice in policing that “all lives matter” were answered with insults and accusations that past racial discrimination was at the root of their argument for elimination of prejudice.
The continuing campaign against the police carried on by Back Lives Matter and its affiliated organizations threatens to contribute to the demoralization of our guardians of peace and security. The decline in major crime in the last several decades has already taken an upturn, presumably as police are prevented from exercising discretion in pursuing possible criminal activity. Blaming crime on poverty and inadequate public facilities is a [to coin a phrase] cop-out. The world and American life is full of instances of the majority of individuals strong enough to overcome the worst of these deprivations to live good and successful lives.
Baltimore has seen outrageous exploitation advantage by elected politicians and public prosecutors of the old wounds of racial discrimination for purely narrow political gain. Such outrageous behavior by public officials is erodes the whole concept of police responsibility and the fair application of law and order for all citizens, whatever their racial and ethnic background.
We can only hope that Bratton’s departure – and we are reminded he has taken his leave before and returned – is not now a signal of the a new era of policing in which attacks on police and their diminished activity is to be the order of the day.
sws-0806-16

Dumbing down?


We seem to be going through one of those periods – real or imagined – when “nothing works”.
Our digital revolution has given us a welter of new “systems” covering, seemingly, virtually all human activity. But try as we may, something almost always seems to go wrong – the internet salesperson doesn’t know they don’t ship to post office boxes so a purchase wanders around for weeks, the courier [even with his Global Position System] insists our address doesn’t exist, expensive telephone “information” gives us a wrong number, the instructions for reading our telephone messages appears to be translated from Japanese, etc., etc.
We have a terrible, frightening suspicion that the essence of American economic management which introduced our improvements on the industrial revolution may have gone too far. The essence of the system was to reduce complicated manufacturing jobs or other economic positions to a single decision. Then, poorly trained or inefficient members of the workforce could do minimum damage and the system would move on.
Digitalization has simplified, in theory, the whole process even more.
Now computers bear the burden of much of the decision-making and the individual worker just pushes a button for a single action. Thus the once vaunted role of cashier – an individual who could engage the customer, calculate the purchase or purchases, pacl them into containers, take the customer’s money or examine his personal bank check, calculate the change, and send him on his way with a generous greeting and welcome back is gone.
Today – and all signs point to even this single action going by the boards [to coin a phrase] tomorrow – is to move the items across a sensor and either take the currency offered or more likely watch anonymously as the customer swipes his xredit card on an automatic machine.
You have to wonder what are the psychol
But, ultimately, decision-making has to take place at some human level in every organization. And despite what is generally regarded as intensive training – in the so-called business schools and company programs – we have to wonder if the dumbing-down process hasn’t seeped up the salary scale.
ogical implications of this change in the cashier’s role, from celebrated multitasking expert to an anonymous robot facing the customer as he departs.
It’s all done in the name of efficiency. Take for instance the decision to move “call centers”, that is central inquiry and instruction service, overseas to cheaper wage respondents.
More than once recently we have had the maddening experience of reaching a call center in India or Timbuku or even the Philippines where the respondent was neither a native English speaker nor had a clue about American geography. After an excruciating circular conversation, mostly one-sided as the respondent overseas while speaking some kind of English answered in rote messages, a screaming session took place calling for a supervisor, who if luck were with you, was an English-speaking native back in the U.S., who immediately solved “the problem”.
We cannot believe that there is anything efficient in that whole system, and that, in fact, instead of saving money, it isn’t costing the operators in time and expenses. Wages, after all, are measured in service to the operation rather than dollars and cents [or pesos and paisa].
Bottom line: the dumbing-down process which has reduced the individual worker to one motion, one job, one idea, may well so cripple his psyche that he isn’t even very good at that one action. And we don’t even want to think about the possible destruction of a normal healthy personality this process incurs.
sws-07-29-16

Special Relationship II


Back in 1887 the famous poet and storyteller Oscar Wilde quipped: ‘We [English] have really everything in common with America nowadays except, of course, language’. We got another example of this malediction in the blah-blah-blah which has attended Britain’s decision to leave the European Union. What is most apparent to all but the Talking Heads is that London’s negotiating a two-year exit from the EU will result in a revival not only of the vestiges of empire – as much legend as reality – but a renewed emphasis on the Anglo-American alliance, “the Special Relationship”
Like so much of traditional diplomacy, Pres. Barrack Obama and his former secretary of State, Hillary Clinton, gave that relationship short shrift. Obama, imbued with the Left’s religion of anti-colonialism – a view of the world which is not only unrealistic but ignores the actual relationship of the Metropoles of Britain, France, Italy, and once Germany, to their 19th centuries acquisitions. True, they were exploitive relation ships but they also accelerated the arrival of at least portions of modernism to pre-industrial societies.
As Obama’s attempts to “transform” American foreign policy have either miscued or collapsed over the last seven-plus years, his attempt to derail the historic relationship between the U.S. and Britain has also gone astray. Common language, shared democratic values and concepts, special interests throughout the work, have made a working relationship between Washington and London an irreplaceable part and parcel of U.S. internationalism.
The combination of Obama’s war on this tradition, his buffoonish attempt to influence British voters on withdrawal from the EU which boomeranged, and the U.S.’ expanding interests in the post-World War II world have tended to eclipse that relationship. That illusion was enhanced when London seemed to be throwing in its lot with the movement for a united Europe, one which had been a special project of American strategy for a half century, but not always with its final destination in view.
Now, the latter project is in deep trouble. Few Europeans want to face the reality of German domination as by far the largest and economically the most powerful of the EU states. That will halt the perfectly “logical” calls by Berlin that the EU must go forward to further political integration or collapse. But the French, once Germany’s twin partner in European unity, in a miraculous and real transformation, are for the first time abandoning dirigisme, French promotion of economic planning and control by the state, under the pressure of the competitive drive of “globalization” is being abandoned – and that under a socialist government! The concept had defined the distinctive character of French politics, inherited in part from its royal and multi-republican past, and which it had passed on to the Brussels Eurocrats it had largely supplied and still dominated.
London ‘s withdrawal — although it will continue to bargain for special trading and other economic rights inside the EU, whatever it means in the short-term — means a return to Britain’s diminished but continuing role as a world economic power. The good sense and good luck that kept Britain out of the EU’s now faltering monetary union means that once again, in parallel with the dollar, sterling will resume an stronger international character.
London’s City, which was ceding its role to Frankfurt and Zurich, will be reinvigorated in the longer term by the British withdrawal. That role of London as the world’s second financial center after New York will be felt all the way through the Middle East oil countries [with their traditional ties to the Colonial Office] to Hong Kong and beyond. [What the Japanese will do with their heavy investments in British manufacturing as a base for the EU remains to be seen. But it would not be the first time that Japanese business has had to make major adjustments to its successful formula for being the only non-European power to have made it to First World status].
The revival of the Special Relationship will have new and totally different aspects – again, despite Obama’s original high-priced energy policies, the U.S. and its Shale Revolution has put a new floor under world energy prices. It is one the Mideast producers can meet, of course, but not without cutting back on their enormously spendthrift policies of the past. It could well be that Special Relations II will see the U.S. as Britain’s major supplier of energy and energy technology for development of its own shale resources, environmental freaks notwithstanding.
Prime Minister David Cameron may have to go as a sacrifice on the altar of City business interests and the universal “internationalization” panacea which has dominated both U.K. and U.S. politics under his Conservatives – as well as the Democrats in Washington. And that may introduce new uncertainties along with some disturbing personalities.
But the dye is cast: Special Relationship II has begun with the British voters’ decision that they wanted autonomy and not collaboration at too high a price in cultural values with a Continental bureaucracy and its economy That bureaucracy, too, is now fatally wounded and events will lead to new and likely unpredictable changes in Paris, Berlin,.Brussels and the other EU capitals.
sws-06-24-16

Troubled Britons


No matter the outcome of the British referendum June 23 on leaving the European Union, the argument over the U.K.’s role in Europe and the world is up for grabs. It promises a troubled British political scene for some time to come.
The argument over whether to leave the European Community, or stay in and try to bring it closer to what London would like it to be, has split the Conservative Party. Whatever the outcome of the referendum, it probably means the end of the tenure of Prime Minister David Cameron who has opted for staying in against the Party’s possible majority of “Euroskeptics” At a time when the opposition Labor Party leadership has been grabbed by ultra-leftists who want to go back to the old socialist tenants of the movement, that is likely to produce a fractious political scene, trimming Britain’s traditional worldwide commanding role.
In turn, it is going to limit the supporting – and often leading – relationship that Washington has relied upon with Britain’s traditional worn but still abundant worldwide imperial heritage. Pres. Barack Obama not only chose not to use it, but made a fetish of his anti-English prejudices. A new president, however, even Hillary Clinton who quietly is rejecting much of her support of Obama as his secretary of state, is likely to again look to the traditional “special relationship: between the U.S. and the U.K.
Britain, of course, always had its reservations about joining the EU. London’s City role as one of the principal world financial centers, in part based on the universality of the British pound sterling, always negated joining the EU’s monetary union. But now with the Euro under attack, Germany’s Angela Merkel and her allies in the rest of Europe, not only want to reinforce the Euro but to move toward further political integration. In effect, there is a general consensus on the Continent among the advocates of the EU that if it doesn’t move further toward integration, it will fall apart. But the growing criticism of the EU’s inroads on what many British see as their independence and every day life is anathema in London.
Pro-Brexit Tories have been infuriated by Cameron’s campaign to keep Britain in the bloc and his dire warnings about the consequences of leaving. There is more and more questioning of his political achievements and the debate has turned very nasty. The usually mild manner former Conservative Prime Minister Sir John Major, an advocate of staying in, has called his Tory opponents “dishonest”, “deceitful” and “squalid” for favoring withdrawing from the EU.
Cameron initially promised a referendum on Britain’s EU membership to quell a rebellion by Conservative Eurosceptics but it has turned out to be the opposite, producing a bitter fight which cuts across all party lines. That’s only a year since the Conservatives won a resounding national election but promises now to end Cameron’s reign long before its promised four more years.
The Conservatives have been divided for more than a quarter of a century over the issue. The argument has turned on whether the U.K.’s membership affords it additional trade and economic rewards or if interference by the unelected Brussels Eurocrats in sometimes minor British laws and customs is worth the price.
Cameron had already promised to quit the Party leadership before the 2020 election, and the referendum has given a platform to the contenders to succeed him. That could be Boris Johnson, the former Conservative mayor of London, a much more controversial figure. The offspring of upper class English parents living in New York, he has been called an elitist, lazy and dishonest and accused of using racist and homophobic language. Whether accurate or not, these accusations contrast with what had been a much more generally acceptance of Cameron, and promises political fireworks in the months ahead.
sws-06-17-16

America’s growing China problem


The U.S. and China are facing a collision on a wide spectrum of issues, from economic to a gamut of political and military concerns.
The arguments flew thick and fast at the annual Shangri-la discussion in Singapore last weekend. Curiously enough, China has a new defense against economic protests from the Europeans as well as the Americans. Finance Minister Lou Jiwei in the annual bilateral meeting of the two countries’ cabinet ministers this week in Beijing asked where foreign suppliers were when China was in full expansion a few years ago. Why didn’t they see the oversupply [and consequent dumping] coming?
Lou also argued that China is no longer a centrally planned economy with its private sector now going full blast, producing a disproportionate amount of the surpluses. That seems unrealistic given the tendency of the huge government monopolies with their preferred access to capital to go their own way whatever market conditions. Hidden in Lou’s explanation, of course, is Beijing’s call on the U.S. and the other members of the World Trade Organization to call label it a “market economy’, thereby loosening even more strings on production.
The truth is that Chinese Soviet-style planners have, indeed, lost control of their model. True enough, a private sector has arisen which is contributing disproportionately to the total production in many industries. That’s especially true for steel which the Chinese are dumping in Europe and the U.S. at below costs on already embattled Western industries.
China’s four government banks, under political pressure from local Communist Party officials, are overextended. In the process, with the usual Chinese commercial genius, debt centers and private banking has further extended credit to failing manufacturers creating overcapacity throughout the economy. Export subsides and currency manipulation send these surpluses on their way to foreign markets, especially with China’s own once fast growing economy now in the doldrums.
Equally troubling are the growing Chinese claims for regional naval dominance. Building military outposts on enhanced reefs in the South China Sea a thousand miles of the China mainland appear a challenge to nearer neighbors, the Philippines, Vietnam and Malaysia. Beijing adamantly rejects Manila’s approach to the World Court for a decision on conflicting claims, seeking support from Moscow who faces similar threats over its actions in Ukraine.
The Chinese threaten to declare a zone of international air control in the area as they did – with foreign rejection – in the East China Sea near Japan. It’s true that Chinese export manufactures and imported commodities such as Mideast oil make up the largest part of the region’s traffic. But the U.S.’ traditional advocacy of freedom of the seas throughout the world going back to its earliest days of its first foreign wars against the Barbary Pirates – is at stake.
Perhaps the most dangerous aspect of the U.S.-China encounter is its relationship to the internal politics of China’s ruling party. Pres. Xi Jinping is trying to make himself into another all-powerful Mao Tse-dung. Differences with the U.S. are used by his opponents in the intra-Party scuffles. His domestic concerns were reflected in a comment at the annual Sino-US Strategic and Economic Dialogue: “Some differences can be solved through hard work. [But] Some differences cannot be solved at the moment.”
Xi may have been referring in part to the growing difficulties in cutting back on overproduction at the regional and local levels. A warning in the People’s Daily, the official voice of ruling Party, about high levels of debt was widely interpreted as a signal to Mr Xi from Party opponents not to waver from making difficult economic reforms. However, analysts doubt local governments’ willingness to close plants and lay off workers in oversupplied industries such as steel. That comes at a time Beijing is increasingly coming down on foreign investors, apparently in another effort to placate local Party and industry interests.
As Xi argues, the relationship between the world’s largest developed country and the world’s largest undeveloped economy may be the most important in the world. Mired in the continuing Mideast crisis and its resultant refugee flow, it has taken second place at best for the Obama Administration. That isn’t likely to be the case for the new executive taking over January 2017.

sws-06-15-16

The Saudi revolution


The Saudi family is engaged in a struggle to overhaul their notoriously pragmatic if autocratic regime.
Younger, foreign [many American] educated members of the farflung family recognize that The Shale Revolution has changed the whole nature of the world energy market. They recognize that despite opposition from enviromentalists and lack of technology in some countries, the exploitation of shale oil and gas deposits widely distributed around the world is going to continue to produce fossil fuel surpluses. That may even be the case if the world economy and consumoption take an upturn from the near-recession conditions in Europe and China reverse.
America is again emerging as a gas and oil exporter to challenge the longtime hold of the Saudis as the arbiter of world prices. Pres. Barack Obama’s “deal” with the Iranians, whether successful or not, for ending their pursuit of weapons of mass destruction, has begun to lifted sanctions against the Tehran mullahs. And Iran is slowly moving back into world markets with its reserves, among the largest in the world. Other smaller producers are emerging in West Africa and throughout Asia and Latin America. To some extent they will compensate in the world market for any temporary blocs against Libyan, Syrian or other Mideast producers.
Thirty-year-old Mohammed bin Salman, the deputy crown prince and the king’s favorite son is leading the charge for a radical departure from the norm. Saudi policy in the post-World War II era, after securing a tacit alliance with Pres. Franklin D. Roosevelt, has been preservation of the status quo. As the guardians of the Moslem holy shrines in Mecca, they have had disproportionate influence not only on their fellow Arabs but throughout the Moslem world. [One of the religious duties of all Moslems is to make at least once in a lifetime to these shrines.]
Bin Salman recognizes that the kingdom’s public finances are unsustainable and unlikely to rebound in a future oil market . He wants to radically change all that with. “Vision 2030”. The plan aims to slash wasteful government spending, develop a non-oil economy and wean the population off its total dependency on cradle to grave benefits. It also aims to boost private sector investment and job creation. Khalid al-Falih, the new chairman of state-owned oil company Aramco, recognizes that he is unlikely to hold the central role in the Organization of Petroleum Exporting Countries [OPEC], that in the past dictated world oil prices.
The Saudis are late in following in the footsteps of their oil-rich neighbors who have moved away from crude oil. Abu Dhabi, much wealthier on a per capita than Saudi Arabia, has struggled to do so. But fellow emirate Dubai has engineered a transformation over the past 40 years that has weaned it almost entirely off oil, which once contributed 50 per cent of its GDP.
The planned changes will be extremely difficult to execute. Public wages are to be reduced as a proportion of the budget to 40 per cent by 2020 from the current 45 per cent currently, a goal that could increase public opposition given expectations of rising inflation. It would mean a decrease in total salaries from Sar480 billion to Sar456 billion by 2020, with two-thirds of Saudi workers state-employed.
Other equally difficult targets include raising non-oil revenues to Sar530 billion from Sar163.5 billion last year by 2020 through an increase in government fees and taxes, including a sales tax, income taxes on non-Saudi residents and “sin taxes” on harmful products such as tobacco. The Saudis aim to balance the budget by 2020, with debt rising to 30 per cent of GDP by 2020 from 7.7 per cent currently. But the IMF forecasts a budget deficit of 14 per cent this year.
All this is to be accomplished while the Saudis continue to try to mobilize their fellow Arabs – with American support – against the continuing threat of Daesh [ISIS or ISIL], terrorists in Syri and Iraq threatening its neighbors. Crossing the Sunni-Shia, these Saudi enemies will try to exploit the traditional unrest among Saudi Arabia’s Shia minority in the critical southeastern oilfields.
No Middle East phenomenon matches the long-time outcome of these events in Saudi Arabia.

sws-06-15-16

The retreat from democracy


Often the question of what is “democracy” is in the eye of the beholder, a third century BC Greek saying about “beauty” that has echoed down the centuries, acknowledging how the concept is largely subjective.
Whether one is thrown into jail in Turkey for making critical comments about Pres. Recep Tayyip Erdogan or held for extensive pre-trial periods in Poland, individual rights are eroding. Even in the West the movement is back toward more historically authoritarian governments in the traditional backwaters of freedom in Central and Eastern Europe.
The Soviet Communists turned tricked elections into an art form. And in many countries today, so-called free elections are not really a guarantee for individual rights, the ultimate test for democracy. One of the ironies of the current situation is that the more rigid tests applied to restrictions on personal freedom in the U.S., are being used by the opponents of freedom throughout the world. Their argument is the one so favored by children, which is if a companion is doing something, it shouldn’t be forbidden or punished nearer home. Naïve Americans who have not lived or traveled widely abroad, too, often suggest violations of freedom in the U.S. are the equivalent of repression in countries which have no tradition of individual freedom.
Pres. Barack Obama’s international strategy puts more emphasis on reaching agreement with traditional opponents while sometimes neglecting our friends. It intensifies this movement away from freedom. The Administration’s pursuit of a nonproliferation agreement with Iran, for example, made it the only issue under negotiation. Whether the agreement is successful, of course, remains to be seen – what with the Tehran mullahs going ahead with great publicity on an intercontinental ballistics missile program, the only use for which would be to deliver a weapon of mass destruction. But leaving this argument aside, it is an irony that Obama, the darling of American liberals, has place human rights on the back burner in all his negotiations with foreign governments, whether the Iranian religious fanatics, or the Castro Brothers’ continuing repression in Cuba.
It is true, of course, that a rational foreign policy must place high priority on attempts on reaching at least a working agreement with potential enemies. And it is also true that in the past and probably in the future American policy may have to swallow hard over domestic abuse in countries which are armed to the teeth – such as North Korea – in order to reduce the possibility of war.
Yet freedom of the individual is as necessary as other conditions in the U.S. for a continued opportunity for economic advancement, one of our cardinal sales points in the family of nations. Even Europeans, for example, are sometimes surprised at how easy it is to start a business in the U.S.
It is a cliché worth repeating, of course, that democracy is a way of life, revolving around an attitude toward living with fellow citizens as well as the more formal ingredients such as representative government, an honest and responsive executive and a balanced judiciary. It was this country’s great fortune that we inherited these values from the British, even fought the Mother Country when they were violated by it.
Today the democratic system is again in jeopardy in many of the countries where the U.S. and its allies imposed it after they won their cardinal victory against oppression in World War II. But when we Americans fall off the cliff – as when our universities refuse to protect and hear dissenting voices – we put in jeopardy not only our own democratic values, but we encourage the always present movement toward oppressive government lurking abroad.
There is little sign of it yet. But one can only hope that as the presidential campaign matures there will be in Abraham Lincoln’s plea at Gettysburg “that this nation, under God, shall have a new birth of freedom”, an effort to reframe and restate the American devotion to freedom always in jeopardy in a world so seemingly more complex.
sws-6-12-16

The American Exception


“American exceptionalism” is a term being bandied about a good deal these days by politicians and The Talking Heads. The Founding Fathers, of course, believed quite rightly that they had created a new and unique form of government even though they borrowed heavily on their English origins, and had, indeed, started their rebellion seeking to secure “the rights of Englishmen”.
But quite ironically the current phraseology if not the concept came out of Communist politics. In the early 1930s Josef Stalin was consolidating his role as dictator of the Soviet Union and arbiter in the international Communist apparatus, the Comintern, Moscow had built to bring Communism to other countries. Stalin had not completely achieved his totalitarian state which was to be the most oppressive regime the world had ever known.
Jay Lovestone, head of the then still semi-independent American Communist Party, told Stalin & Co. that a violent workers’ revolution would never come to America. Lovestone, then a loyal apparatchik, was not arguing on moral principles. but pragmatically. He argued that the American worker had too high a living standard – even in the worldwide Great Depression — and too much attachment to the American Dream of permanent progress to buy into Moscow’s violent revolutionary line.
Instead, Lovestone argued, to overcome resistance to socialism and communism, the Comintern should acknowledge that “the revolution” had to come to the U.S. through the ballot box. Stalin was having none of that, and Lovestone barely escaped Moscow with his life, returning to the U.S., first to lead a new “reformed” Communist splinter party, but eventually to become one of the most active and effective anti-Communists, with the international wing of the American Federation of Labor and CIA.
In most ways, today America is still the great exception.
Alhtough now the U.S. is in what the oldline Communists would have called “a revolutionary situation” with its institutions somewhat discredited, particularly its political class and the old political parties. The votes piling up for Donald Trump and Sen. Bernie Sanders, most coming from the same kind of disaffected voters, are the result of this wave of opposition to the established politicians, on both sides of the aisle, and not that much unlike each other.
But Sanders even has gone so far, if softly peddled, to echo slogans of the 1920s and early 1930s calling for “democratic socialism”. As always has been the case, it is less than clear what Sanders’ democratic socialism means except for a further enlargement of the federal government and a further transfer of economic resources into government hands from the private sector and individual consumers. Perhaps some younger voters want that “free stuff” but for most of the protesters it ironically represents just the opposite of their goals of less government interference in the economy even where some contradictorialy would want enlarged social welfare benefits.
We reckon that America is still the venue it has always been for continued revolutionary changes. Thomas Jefferson had written, “I hold it that a little rebellion now and then is a good thing, and as necessary in the political world as storms in the physical.” But the continuing American revolution must continue within that marvelous framework which The Founders laid out for a balance of power among the three arms of government, legislative, executive and judicial – and reserving the sovereignty of the states as a counter to an overanxious authoritarian central government. It is the erosion of the latter which has led to much of the current dissatisfaction. The ability of the 50 states to experiment regionally with new ideas of government has always been an essential part of the system. But it has recently been inhibited by the growth of rapid communication and transportation which has helped enhance the role of the feds.
We don’t need Sanders’ socialism which has proved such a failure in so many countries. And we could do with a little less histrionics from Donald Trump. What we need are candidates unreservedly committed to returning government – for example education and health – to state and local levels where it is most responsive to public opinion, and where, therefore, it would be most effective.
sws-06-03-16

The pathology of American socialism


If you are 20 and not a socialist, you have no heart. But if you are 40 and are a socialist, you have no brain. That old French aphorism describes better than more learned tomes the appeal and the reality of more than a hundred years of seeking to find the ideal society through either Christian socialism based on appeal to the Scriptures or “scientific” socialism based on Karl Marx’s writings.
It’s not clear when Sen. Bernie Sanders espouses “democratic socialism” he knows this long tortured history or is ignoring the fulminations of European socialism including its American versions. Most Americans are unaware that socialism had a thrust toward power in the early part of the 20th century when Eugene V. Debs, a trade union radical and his colleagues traded on social problems of the rapid U.S. industrialization. Even though Pres. Woodrow Wilson, “a progressive”, sent Debs to prison for his ironclad pacifism and opposition to American entry into World War I, he garnered more than a million votes in the 1920 presidential election.
But the socialists faded, shorn of their Communist radicals who bolted the party, in the enormous prosperity of the 1920s. They left one important addition to the national scene, the income tax, which could only be implemented with the Sixteenth Amendment to the Constitution which was deemed to have excluded all such direct taxes. When the Great Depression struck in 1929, much of the socialist rhetoric [along with proto-fascist ideas as well] were adopted in the wildly heterogenic New Deal of Pres. Franklin Delano Roosevelt.
Norman Thomas, a former pastor from the Christian socialist tradition — a tall, handsome man, a splendid orator with a booming voice — took over the rump of the movement. Thomas, although a respected figure to whom thousands of European and Asian refugees came with notes of introduction during the turbulent 30s, was a failure as a politician. The Party dwindled under a series of crises; the first in 1936 when most oldtime socialists supported FDR against Thomas for the presidency. Thomas also followed the Europeans in their Popular Front, a partnership with the Communists aimed at halting the rise of Adolph Hitler’s Nazis and Benito Mussolini Italian Fascists. The anti-Communist socialist splinter, mostly New York Jews, broke away taking the famous old Rand School which had educated immigrants and a Borsch Belt resort. But here and here old memories remain: a Young People’s Socialist League on the University of Missouri campus in 1946 formed to end racial segregation on their campus.
Although the Party continued in name, maintaining a New York headquarters and continuing to publish a weekly version of its once powerful The Call, it played no role in U.S. politics. It was not until post-World War II when some old stragglers from the movement successfully persuaded Washington to wean the West European parties away from neutralism against the high tide of Communism in France, Italy and West Germany. On the Continent as in the British Labor Party, the European socialists came to brook no rival in their opposition to Moscow where the Communists had developed a totalitarian state, ready in the postwar period as one of the victors to absorb most of Central Europe.
Although the socialists blossomed in power in Scandinavia – in Sweden building a highly sophisticated industrial base, not least by collaborating with Hitler in WWII as a ostensible neutral – increasing social and political problems of their own making have undermined their hold on power. Mistaken references in the American debate to Denmark ignore its steady move away from socialism today.
Sanders calls himself a “democratic socialist”, presumably in the Thomas and European anti-Communist traditions. But in Israel he chose to live for two years among kibutzim [members of communal settlements] with ties to Moscow. His flirtation with the Castros’ Cuba and their allegiance to the Soviet Union until its demise as well as the pro-Communist Sandinistas in Nicaragua puts the question what he really believes. Like so many other self-proclaimed socialists before him – currently it is the case in Venezuela –in power they have had to choose backtracking toward more conventional positions or trying to institute “socialism” with dictatorial regimes.
Just where is Sen. Sanders?
sws-05-31-16

Plus ça change, plus c’est la même chose


The French, as always, have a word for it: the more things change, the more they are the same.
Looking around the world just now, one has to take that into account. After the cataclysmic destruction and rehabilitation of World War II, we would have thought that patterns of political life were so changed forever that nothing of the old would remain. That’s true, of course, to a certain degree.
But looking around the world just now, you will excuse old men from seeing much, in some instances far too much, which is the same.
With all the blood spilled in Europe and in Asia– over 60 million people killed, about 3% of the 1940 world population (estimated at 2.3 billion) – it would have seemed that old patterns were completely destroyed. Yet a look around the world some 60 years later suggests the opposite.
We might begin with European anti-Semistism, that unreasonable but merciless hatred of the Jews. True, there has been a change: except for the 400,000 or so Jews who live in France – and who are now rapidly emigrating for just this reason – The Holocaust destroyed the bulk of European Jewry, the six million lost souls. But the themes continue and we now have anti-Semitism without Jews, proving once and for all how nonsensical is this hoary Western sin.
Then there is European nationalism, which brought on the centuries of dynastic, religious and nationalist wars in one of the most sophisticated regions of the world. European economic and then political union was to finally end all this. And while we may not be facing warfare among the European nationalities, we are again seeing an effort to form a union falling apart from many of the same old ailments. Moscow’s Ukrainian aggression suggests even war may not be that far away.
Of course, the problem at the center of the European political conflict for generations was the overwhelming and always growing strength of a Germany, late to united but always hovering over the European scene. That, we were led to believe, would no longer be the case with a federal Germany dedicated to democracy and having given up its goal of unification with an Austria whose existence and neutrality would be subsumed in a united Europe guaranteed by the major powers. But one problem stalking the Europeans today is again the overwhelming strength, this time with an emphasis on the economic factors, of a strong Germany. Having exported part of its wealth to its neighbors on credit, it is now being forced into billcollecing – not an enviable role. And it is one that again puts Germany’s strength and power, seemingly threatening, against the center of European speculation as the united construct at Brussels shakes loose.
Pearl Harbor, it seemed, had decided once and for all the argument over America’s participation in world politics, a disputed role going back to The Founders. The success of U.S. arms in World War II not only preserved the world from Nazi barbarism and Japanese colonialism, but it placed Washington at the center of world’s disputes as arbiter and conciliator. But with the access to power – rather inexplicably – of a young and inexperienced historian-manqué as a “transformative” president, the old argument is back. The call of Donald Trumpet may not be called “isolationism” but it bears all the hallmarks of the all the old arguments updated with 21st century figures against what used to be called :”interventionists”, those who see an undeniable dominant role for the U.S. in world affairs.
One could go on with this analysis, of course. But the point is all too obvious. The question is, of course, what does it mean? Karl Marx, quoting the German philosopher Georg Wilhelm Friedrich Hegel that “xxx all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce.xxx” True enough, when we observe some of those playing out these old roles now, we see them as buffoonery. But the sad part of any commentary must be that we will have to try to work our way to some sort of solution of all of the issues, as we have done in the past.
sws-04-17-16

Viva Mexico Libre!


The news that Mexico is moving one more step to break the monopoly of Petróleos Mexicanos [Pemex], the government-owned producer and until now monopoly retailer, is big and good news.
With the world’s tenth largest economy, Mexican growth at between four and five percent over the past few years is considered well below its potential. The World Bank reckons less than 2% of Mexico’s population lives below the international poverty line but the Mexican government estimates a third of its population in moderate poverty and some ten percent of that in extreme poverty.
Competing with Brazil as Latin America’s largest economy, the country has vast disparities of income, including between those more prosperous states bordering the U.S. Mexico City and the south. Growing remittances, largely from the U.S.’ southwest, are an important part of the country’s income, more than $22 billion in 2012. But all this produces tax revenues of less than 20 percent of GDP [2013], the lowest among the 34 OECD countries.
Although Mexico is the sixth largest oil producer in the world, its exports have fallen from just under 62% of total exports in 1980 to just over 7% in 2000. Most observers agree this is a result of the inefficient monopoly over its oil resources and distribution by Pemex which has neither the capital – even though it provides more than 60% of government revenues – nor the technology to expand to meet domestic and foreign demand. But long the holy of holies for Mexico’s left, opening it up to competition and collaboration with foreign oil companies has been fought at every step since the 2014 decision was made to privatize at least some aspects of the monopoly.
Now the government has announced it will allow private companies to import gasoline for the first time since the late 1930s. That will permit the country’s independently owned 11,400 filling stations now all bound to Pemex franchises to link with other companies. The government had already permitted Pemex to form joint ventures with foreign companies to explore for more oil and increase production. But that may be years away given the bureaucracy and the long neglected technological aspects of the company.
Opening service stations to other franchises is going to be the most visible aspect of the new more liberal strategy and, hopefully, encourage faster development of the whole process. London-based Gulf Oil International already has plans to slap its Gulf de Mexico brand on a few stations in the largest cities, to expand to a wide scale national network. Motorists will be enthusiastic because of the poor service of most Pemex stations including shortchanging customers according to widespread convictions by Mexico’s consumer-protection agency.
Still, it is going to be a slow process. Mexico already imports more than half of its daily consumption of gasoline from the U.S. because the country has only six refineries. Pemex controls virtually all of the oil and gas infrastructure — pipelines and storage facilities — and the government is encouraging investors to expand the infrastructure to supply the newly freed stations. .
With trade running at well over $530 billion in 2015, the U.S.’ number three trading partner, American have a special interest in seeing more rapid liberalization and growth of the Mexican economy. Mexico, whose free trade pact with the U.S. produced a trade surplus of nearly $60 billion last year can afford to see an increase of U.S. imports – along with an accompanying investment and technology transfer for what has become its dormant oil industry. Hopefully, the Obama Administration will be pushing these developments ahead of its curious interest in the Cuban Communist dictatorship.
sws-04-01-16

The ghost of Bork rides again


Robert Heron Bork was a renowned American legal scholar, serving as a Yale Law School professor, U.S. Solicitor General, Acting Attorney General, and a judge of the United States Court of Appeals for the District of Columbia Circuit. Bork was also in his time the foremost advocate of “Originalism” – an interpretation of the Constitution as fixed in the time of enactment. Originalists insist the constitutional meaning can only be changed by the procedures for amendment set out in Article Five . Bork saw this interpretation as the only way jurists could be prevented from creating new law without a popular consensus through legislation. Bork’s Originalism with its delving into origins is sometimes confused with another school on the right, Textualism, which holds to a narrower interpretation that the law’s meaning can not go beyond its stated language. Scalia saw himself as a Textualist.
The current dispute over the naming of Scalia’s replacement on The Court, recalls an earlier dramatic conflict. In 1987 President Ronald Reagan nominated Bork to the Supreme Court. The almost immediate violent opposition from the left to his elevation never questioned his credentials, neither his scholarship nor his practical experience on the bench. But less than an hour after Reagan’s announcement, Ted Kennedy eviscerated him in a nationally televised speech from the floor of the Senate. “Robert Bork’s America,” Kennedy said, “is a land in which women would be forced into back-alley abortions, blacks would sit at segregated lunch counters, rogue police could break down citizens’ doors in midnight raids, schoolchildren could not be taught about evolution, writers and artists could be censored at the whim of the Government, and the doors of the Federal courts would be shut on the fingers of millions of citizens.”
Although the views as well as the credentials of nominees to the courts had been questioned all through U.S. history, the controversy over Bork’s appointment marked a departure in which his political/judicial leanings would be a test. Then Sen. Joseph Biden presided over a committee hearing of Bork’s nomination, generally considered fair despite the uproar in the liberal media which had left no charge unmade. [It was, ironically, during a period when Biden’s own campaign for the presidency was falling apart.] On October 6, Bork’s nomination was rejected in committee by a 9–5 vote.
Despite the fact that a committee rejection made a negative vote by the full [Democratic controlled] Senate almost certain, Bork continued what had become a losing battle on principal. He maintained that “xxx there should be a full debate and a final Senate decision. In deciding on this course, I harbor no illusions. But a crucial principle is at stake. That principle is the way we select the men and women who guard the liberties of all the American people. That should not be done through public campaigns of distortion. If I withdraw now, that campaign would be seen as a success, and it would be mounted against future nominees. For the sake of the Federal judiciary and the American people, that must not happen. The deliberative process must be restored.”
But Bork’s political support went mum. Bork even complained of Reagan’s lukewarm continued endorsement. And on October 23, 1987, the Senate rejected his confirmation, with 42 Senators voting in favor and 58 against. The vern “Bork” entered the dictionaries. New York City. Feminist Florynce Kennedy later would lead a movement to defeat the nomination of Clarence Thomas, saying, “We’re going to bork him. We’re going to kill him politically. … This little creep, where did he come from?” But Thomas, perhaps in no small part because of the color of his skin, was not Borked, but confirmed after a contentious confirmation hearing.
It now remains to be seen whether “turn-about is fair play”, whether Obama’s nomination of Merrick Garland, again a justice with the proper credentials but unacceptable for his political beliefs to the conservative majority in the Senate, will make the grade. Or will he be Borked.

sws-03-17-16

Moslems, Islamists, Terrorists and Islam


 

The time has come, and indeed, has long passed for a frank and open discussion of the growing confrontation between the Western democracies and the Moslem world.

Were there no other issue than the fact that there are some 1.3 billion world inhabitants who consider themselves Moslem, whatever their differences, the issue is moot. Now the combination of the continuing chaos in the Arab and Moslem world and the massive Moslem migration into the formerly non-Islamic societies requires it.

It perhaps goes without saying that the issues are complex and fraught.

Islam, despite its hundreds of millions of peaceful adherents, has never been a “religion of peace” as so many contemporary politicians espouse, including Pres. George W. Bush. From its very origins, Islam – a political as well as a religious movement – has confronted the Judeo-Christian West, more often than not relying on its sword to settle ensuing arguments It is equally false, as Pres. Barack Obama has repeatedly said, that Islam has played a great role in the development of the American ethic; indeed, the opposite is true when the first U.S. armed conflict abroad was a war against pirates espousing the Islamic cause on “The Barbary Coast” of North Africa.

In the current explosion of old arguments, Moslems are far more likely – given their inferior military and other effects of stable government – to seek other means than military to win arguments and concessions. In fact, the most powerful transnational organization in the Islamic world today is the Moslem Brotherhood whose origins lie in a strategy of using such Western institutions as representative government to gain influence, power. However, as the brief regime of Egypt’s Pres. Mohammed Morsi proved, the Brotherhood concept is “one man, one vote, one time”.

The cliché that Islam is an “Abrahamic” religion thereby sharing the concepts of Christianity and Judaism today toward the two other beliefs is false. Yes, Islam does borrow from the Jewish and Christian legends but it has never met the test and modifications of the Jews through 19th Century Haskalah [Enlightenment] and the Christian Reformation and the Counter-Reformations. Ironically, the highly influential 12th century Spanish Moslem philosopher Averroes [Ibn Rushd] contributed mightily to the origins of modern syncretic Christianity, but Islam lost the 12th century debate to the fundamentalists from which it has never recovered.

Toleration of all religions is a foundation of modern democratic society. In countries today where Moslems are in the majority, such tolerance is next to zero. Even Pakistan, with its enormous inheritance of British Indian law and pluralism, restricts Christian practice, and there is almost monthly violence – often deadly — against “nonbelievers”. The concept that, sharii, the great and ambiguous body of Islamic law, could have precedence over the American Constitution is unacceptable.

How, then, is the West to respond to these new demands of Moslems as individuals and sometimes as organized entities to participate in the power structures of the nation states created even in Afro-Asia by the European world?

The only response is that Moslems and their faith must meet the requirements of modern tolerant and pluralistic democracy in the same way as other religions and philosophies. The current tendency to accommodate Moslems and Islam through special courtesies is mistaken and can only lead to disaster. This is true not only in legal and political terms but also in the world of culture. When Simon & Schuster create a new imprint called Salaam Reads targeted to young Moslem adults, it is a misplaced effort. The publisher says it is to help integrate these new arrivals into our culture. But Simon & Schuster do not have Catholic, Jewish or Buddhist subsidiaries. And they are abandoning the essence of the American concept that the U.S. was created as a place that welcomes immigrants from all over the world precisely so they can have the freedom to believe what they wish live unbound by birth or class or government restriction – or incentive.

Nor can the great bulk of Moslems be excused from facing the cold fact that Islam, however falsely, is the foundation on which the contemporary world’s greatest threat to peace and security arises. They, above others, must be able to discuss openly and honestly why this is the case, and what concepts remain still unpurged from Islamic belief that give rise to these attacks on the civilized world.

Open covenants openly arrived at was not just a cliché which Woodrow Wilson hoped would be the foundation of the peace after World War I, but is as appropriately applied today to the problem of Islam and Islamic terrorism. Ignoring or obfuscating the problem of Islam in the 21st Century is as much a threat to world peace and stability as the acts of terror themselves.

sws-01-27-16

 

 

 

 

An Argentine renaissance?


 

It’s been said that the only problem that Argentina has is that it is populated by Argentineans. With its incredible endowment of resources – the richest soils in the world, a variety of climates including a huge temperate zone, mineral resources including oil and uranium, vast hydroelectric resources, a homogenous population of European descent –.it should be one of the world’s most prosperous and stable societies.

It’s in the lost annals of history that less than a century ago, Argentina seemed destined to become just that, one of the major countries of the world, just behind Italy. In fact in 1909, per capita income in Argentina was 50% higher than in Italy, 180% higher than Japan, and almost five times higher than in neighboring Brazil. Buenos Aires was – and remains — one of the leading cultural centers of the Ibero-American world.

But Argentina’s dependence on unprocessed agricultural exports set it up as a particular victim of the Great Depression and the adverse terms of trade for commodities. What followed were decades of far-fetched efforts to industrialize through state capitalism under demagogic leadership, most famously represented by Juan Peron and his consort, Evita – romanticized in the U.S. but in fact an insidious influence..

Pres Barack Obama’s short visit to Buenos Aires scheduled for March 23 and 24 is a recognition that something is afoot. In fact it’s a revolution in Argentine politics brought about by the election last November of the U.S.-educated, pro-business conservative Pres. Mauricio Macri, former mayor of Buenos Aires One of Macri’s announced principle aims is too strengthen Argentina’s foreign ties after years of combative relations under his leftist predecessors, particularly with the U.S.

“We believe this is really a new beginning and a new era in our relations with Argentina,” top Obama foreign policy adviser Ben Rhodes says. Recognizing this, French President Francois Hollande and Italian premier Matteo Renzi scooted in for visits just ahead of Obama.

Macri’s election was a surprise and he has an enormous job ahead of him..Although Argentina’s 38 million live in Latin America’s third largest economy, a $100 billion default in 2001 made it a financial pariah, closing it out of international capital markets.

Macri has moved swiftly to try to clear the remaining $9 billion in claims by offering a $6.5 billion settlement. Within days of taking office, he whacked 21,000 public sector workers from the bloated public payroll, devalued the peso and zeroed out long-running fuel subsidies, Macri has made it clear that he is against a government role in promoting industry,. He has proposed tax cuts for upper-income groups. That suggests that budget cuts are in the offing, since Macri has pledged to reduce the government deficit.

But Macri’s rapid policy moves have already created largescale opposition. Within a few weeks of his taking office, he was already hit by public sector workers as a protest against rocketing inflation — at a stubborn 30%.– and his job cuts. Polls indicate Macri still has the approval of much of the electorate that put him in office, with polls saying support runs relatively high at 60%. Still it has fallen 11 percentage points in the two months since he took office. And some 12% of those polled who voted for him said they would change their vote now.

Macri has made his new orientation for Argentine foreign policy clear. He has denounced the taking of political prisoners by the increasingly leftist dictatorial government in Venezulea and called for it to be tossed out of Mercosur, the South American politico-economic alliance. His pro-U.S. sentiments have been made equally clear,

Instead of continuing his flirtation with the Cuban Communist dictatorship, Obama and the U.S. would be better served with some kind of dramatic gesture of support for Macri, perhaps new and more liberal insurance to back promotion of U.S. investment.

sws-01-24-16

 

 

South Carolina: more than politics


 

As the candidates pick themselves up off the floor and dash on to Nevada and elsewhere, South Carolina will settle back into another important pursuit.

The news that a Chinese company has decided to plump down with a textile yarn mill in the Palmetto state is another feather in the cap of Columbia’s effort to reverse the national trend toward deindustrialization and escaping capital investment. Actually the yarn mill joins earlier Chinese investments in a golf course at Myrtle Beach and a $500-million investment in an automobile plant by the now Chinese-owned Volvo.

All told, the Chinese have put about $300 million into South Carolina producing a thousand jobs. But more is probably coming as the state’s effort to attract foreign investors has been one of its primary and successful campaigns for a decade. There are about 130,000 workers now in European-owned South Carolina plants, attracted by the intense wooing they have received, tax concessions and a large and willing workforce.

Anything to do with textiles, of course, has a special poignancy for the state which like the rest of the South seduced northern mills to move there in the early part of the 20th century only to see their flight to low-wage countries, including China. Although it has wreaked havoc in many circles [not least the stock market], the Shale Revolution which has sliced energy costs is having its effect. Petrochemical plants with their main feedstock natural gas are finding it attractive to come back to the U.S. as you will notice if you have recently looked for where that plastic film is coming from.you are using in the kitchen

All this to say that with its new energy costs and the abundance of digital expertise, there is no reason why the U.S. should not be creating new jobs and attracting some of those which escaped earlier to overseas environments. It would help, of course, if we had an administration in Washington that believed, first, in the future of America, and secondly, in the free enterprise system that gave this country its high living standards and made it the leader in industrialization since World War II.

The caterwalling which passes for debate among the Republican contestants for the presidency notwithstanding, these are the issues that ought now to be debated. We won’t even mention the Democratic side of the debate. That Bernie Sanders, who claims to be a democratic socialist, is increasingly rolling up the votes and suffocating a wooden Hillary Clinton, is beyond denunciation. At a time when even the old social democratic states of northern Europe – yes, and including Denmark which is where we were supposed to look for Bernie’s model – are turning to competition and even sometimes calling it free enterprise is abundant evidence that democratic socialism doesn’t work much better than its illegitimate offspring, Communism.

Several of the Republican contenders have, indeed, laid out economic plans. But we suspect that in the long run, the important element will be the general attitude of the winning candidate later this year toward “business” in general. That attitude will dictate policies and even legislation which in the end can help – for government in the end has a limited role – turn the economy around and return us to prosperous growth. That doesn’t mean we shouldn’t do something about banks that are too big to fail, for example. But it does mean that the autocratic demands of Obamacare which have cost jobs and limited expansion of small business have to go – and quickly.

By the way, the last thing a new government should do is promise a new “comprehensive” medical reform. The way to successful reform in this country has always been incremental and, for example, just removing the nice little conspiracy between the insurance companies and most state legislatures to prevent cross-stateline selling would go a long way toward beginning the competition which would be the lifeblood of the medical arts and sciences as the rest our institutions and economies.

sws-01-20-16