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Saturday, April 12, 2003 |
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The International Monetary Fund's top Western Hemisphere official said on Saturday that Latin American economies were "bottoming out" from last year's declines and he was optimistic on Argentina's chances for a new aid package.
"We have seen more evidence that the economic declines are bottoming out," said Anoop Singh at a press conference. "Our overall sense is one of cautious optimism."
In an unusual sign that an IMF agreement with Argentina is closer than previously thought, Singh said: "Argentina's situation is now starting to improve, and we are hopeful that the next stage of developing a sustainable medium-term program is close at hand".
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Saturday, March 08, 2003 |
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Glug-glug: Not normally a sound of foreboding. But mankind's most serious challenge in the 21st century might not be war or hunger or disease or even the collapse of civic order, a UN report says; it may be the lack of fresh water.
Population growth, pollution and climate change, all accelerating, are likely to combine to produce a drastic decline in water supply in the coming decades, according to the World Water Development Report, published today. And of course that supply is already problematic for up to a third of the world's population.
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Wednesday, November 20, 2002 |
The Bank of Japan has downgraded its forecast for the Japanese economy, just a day after a gloomy report on the country from the OECD. The share prices of Japan’s banks have fallen amid growing speculation that some of them will be nationalised in an effort to put the economy on a sounder footing
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Monday, November 18, 2002 |
Argentina’s decision to default on its loan payments to the World Bank will worsen the country’s economic predicament. And it will not make it easier for the government to reach a deal with the International Monetary Fund
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TOKYO Shares of UFJ Holdings Inc. shares fell sharply again Monday, as Standard Poor's Corp. warned it might cut UFJ's credit ratings if investors lost confidence in the bank, Japan's fourth-biggest by assets.
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Wednesday, October 16, 2002 |
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Lebanon Wednesday began pumping water from the Wazzani River despite Israel's threat of military action should the project go ahead and U.S. efforts to mediate between the two sides fail.
"It is our right to use the water defined in our share of the Wazzani spring," President Emile Lahoud told United Press International in an exclusive interview a few hours before the inauguration of the new pumping station on the Wazzani.
Lebanon wants to use the water from the river, which flows for about 2 miles inside the country before entering Israel, for border-area villages.
With the additional 4 million cubic meters Beirut plans to pump from the Wazzani, Lebanon will have a combined 10 million cubic meters from the Wazzani and the Hasbani rivers, well below the 35 million cubic meters allowed under a 1995 deal.
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Tuesday, October 15, 2002 |
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Mounting deflationary risks are an important case in point. In my view, the risks of global deflation are higher today than at any point in the past 70 years. Japanese deflation is unmistakable, and America’s GDP-based inflation rate of 1% hasn’t been this low in 48 years. The risks to Europe’s 2% inflation rate are decidedly on the downside, especially given pro- cyclical fiscal and monetary policies that are now bearing down on a weakened Euroland economy. Moreover, with the exception of Korea, the rest of Asia is already in deflation; that’s true of Hong Kong, Singapore, Taiwan and, of course, China
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China’s export-led growth dynamic now has increasingly important deflationary implications for the broader global economy. Nor am I alone in reaching this conclusion. As I travel the world, I find a growing consensus in policy and investor circles endorsing China’s role as an agent of global deflation.
. . .
this increasingly fragile global climate
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a weaker US dollar -- the world’s most important relative price -- will ultimately play a key role in sparking any such rebalancing.
. . .
this lopsided world economy. Yet left to its own devices, the endgame would find a world dominated by the American consumer and the Chinese producer. That’s hardly a stable alternative. Global rebalancing is only way out.
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Friday, October 11, 2002 |
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Fears are growing in Japan that the relentless slide in Tokyo's stock market might topple companies or major banks and further harm the already hobbled economy at a time when the government is finally getting serious about solving the nation's debt mess.
The main index on the Tokyo Stock Exchange plunged again Thursday, closing at a new 19-year low for the third time this week. The 225-issue Nikkei Stock Average fell 1.17 percent to 8,439.62 points, its lowest finish since April 8, 1983.
"Japan is going to sink and turn into a nation of beggars," said Masaoki Takahashi, 58, whose land development business has been struggling to obtain bank loans. "It's a big mess."
Like many Japanese, Takahashi was worried that Prime Minister Junichiro Koizumi seemed to have no plan to salvage the economy.
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Monday, September 30, 2002 |
Brazilian stocks fell to four-year lows Monday, while the real currency tumbled to a fresh record low before recovering as the market started to factor in a victory for leftist candidate Luiz Inacio Lula Da Silva in Oct. 6 presidential elections.
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As Japan fumbles for ways to stabilize its wobbly banks, another potentially destabilizing crisis is brewing in the nation's life insurance industry, the world's largest, which has also been hurt by the weak stock market, record-low interest rates and the sour economy.
Like the banks, the insurers hold huge amounts of stocks and bonds, and the collapse of one or more of them — something analysts say is a distinct possibility — could further rattle jittery investors. The potential for such a meltdown has risen as stock prices have fallen to near 19-year lows and left most insurers with losses in their portfolios.
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Friday, September 27, 2002 |
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In a global context such apparently small-sounding reductions [1% in global GDP] are significant. They also serve to underline the extent of the collapse in Argentina, a country whose problems, while not likely to have much of an impact on the world economy as a whole, are greatly exercising the IMF. By the end of this year, the IMF estimates that Argentina’s economy will have contracted by a cumulative 20% in four years—that is twice the contraction experienced during the Great Depression of the 1930s, and unprecedented for any economy in modern times except for those involved in war or in transition from Communist rule.
The size of Argentina’s problems (the remedies for which are the subject of an increasingly bitter dispute between Argentina and the IMF) and the financial pressures which neighbouring Brazil now faces in the run-up to its presidential election have prompted the IMF to question the reliance of many emerging-market economies on capital inflows which, if they suddenly become outflows, can wreak havoc with economic policy and performance.
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Despite nearly daily news of economic strife in Brazil and Argentina, a growing number of economists and governments around the world worry that the biggest risks to the global economy are emanating not from Latin America or Asia but from the United States and Europe.
Bankers and finance ministers will descend on Washington this weekend for the annual meetings of the International Monetary Fund and the World Bank, anxious about economic imbalances in the United States, the possibility of war in Iraq and foot-dragging on free-trade by rich countries.
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Thursday, September 26, 2002 |
 The International Monetary Fund has revised its forecasts for the world economy downwards. It says that, despite plunging stockmarkets and war jitters, growth should continue. But there are now more reasons to worry
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Suddenly Europe has woken up to the truth that it has a budgetary crisis. But the method chosen to tackle it – easing the EU's so-called Stability and Growth Pact – merely emphasises how serious the problem has become. It does nothing to solve it. Until Europe tackles its debts, it will continue to underperform in economic terms and run huge long-term political risks.
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Japan's leading stock market index erased all its gains from one week ago, when the nation's central bank startled investors by announcing a plan to buy company shares held by banks.
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Wednesday, September 25, 2002 |
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A plunge in share prices poses a serious threat to world economic growth, the International Monetary Fund warned today.
In a gloomy forecast, the IMF yet again cut its expectations for global growth in its latest "World Economic Outlook" from its previous economic projections in April.
"There is a significant risk of a more subdued recovery, especially if the impact of recent equity market declines in both the United States and Europe proves greater than presently expected," the IMF said.
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The global economy has not recovered as well as expected, will likely perform below par next year and the situation is likely to get worse rather than better, the International Monetary Fund said on Wednesday in its bleakest assessment of global prospects in years.
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Saturday, September 07, 2002 |
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Lethargic global growth and rising budget deficits in the euro-zone's biggest economies are expected to dominate a meeting of European Union finance ministers opening Friday.
European officials are increasingly pessimistic about hopes of an early economic recovery, fearing growing tensions over Iraq could push up oil prices and further dampen prospects for growth.
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The International Monetary Fund formally approved a record $30.4 billion loan for Brazil on Friday, hoping the size of the package will help convince investors that South America's largest economy is not in danger of defaulting on its foreign debt.
In a brief statement, the 184-nation lending agency said the new credit line will be in effect through December 2003, with Brazil able immediately to tap $3 billion of the loan amount. An additional $3 billion will be available by the end of the year, after the IMF completes a review of the Brazilian economy's compliance with IMF conditions including keeping the government's budget deficit under control.
The remainder of the loan would be disbursed in four installments next year, the agency said.
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The European Commission lowered its economic growth forecast for the fourth time this year today as exports slowed and manufacturers scaled back investment.
The economy of the dozen nations sharing the euro will expand 0.3 percent to 0.6 percent this quarter, the commission said, less than a previous estimate of 0.6 percent to 0.9 percent. It grew 0.3 percent in the second quarter.
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Wednesday, September 04, 2002 |
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The main Japanese stock index plunged 3.2 percent today, reaching a 19-year low and reawakening fears that Japan is about to be swept by another banking crisis.
With American markets closed for the Labor Day holiday on Monday, Japanese analysts, investors and money managers seemed to be taking their cues today from mounting evidence that Japan's mild recovery may halt or reverse if the American economy falters again.
Figures released by the Japanese government last week confirmed that Japan's economy remains highly dependent on exports for the meager growth it has managed recently. Any slackening of demand in the United States for Japanese goods could throw Japan back into recession. And the signals from the United States have not been very promising.
Japanese banks are very vulnerable to slides in the stock market because they hold huge portfolios of stocks and depend on them for much of their capital. In the past, the banks had great leeway in deciding how to value the stocks on their books, and could ignore short-term market swings; the portfolios were useful in generating capital gains on appreciated stocks to cushion profits.
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Wednesday, August 21, 2002 |
Nearly two weeks after the Bush administration threw its support behind a $30 billion loan to rescue the Brazilian government from financial collapse, American officials and the International Monetary Fund are worried about whether big international banks will keep lending to Brazilian private industry.
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Wednesday, August 14, 2002 |
Less than a week after Brazilian markets received a much-needed shot of confidence from a $30 billion International Monetary Fund loan package to the country, fears over Brazil's economic prospects dragged down stock and bond prices and the beleaguered real.
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Wednesday, July 31, 2002 |
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Brazil's battered currency reached a new low today, as concerns grew about the nation's fragile finances.
The government dispatched a mission to Washington today for talks with the International Monetary Fund in an effort to calm market fears. Finance Minister Pedro Malan said a deal with the fund to extend or increase its current $15 billion program that expires in December could be sealed "in the next days or weeks."
And the central bank said late today that it had earmarked another $1.84 billion, or about $50 million a day, to spend in the foreign currency markets to defend the currency, the real, continuing a policy begun earlier this month that has so far failed to halt a slide. Today, the real ended down about 3.8 percent, to nearly 3.3 for every United States dollar — the weakest the currency has been since its debut in 1994. The real has now lost about 30 percent of its value against the dollar this year.
Brazil sent the mission, headed by Amaury Bier, a top Finance Ministry official, and Ilan Goldfajn, the central bank's economic policy director, to Washington after a telephone conversation between Mr. Malan and Horst Köhler, the managing director of the I.M.F., on Monday.
Haunted by the specter of the collapse in neighboring Argentina, Brazil, South America's largest economy, has been pummeled in recent weeks by market fears over its political future, its capacity to meet payments on its burgeoning $250 billion public debt and mixed signals over whether fresh I.M.F. aid would be made available.
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Saturday, July 20, 2002 |
Turkey is the International Monetary Fund’s biggest borrower, an applicant to join the European Union, the only Muslim country in the NATO defence pact and a key strategic partner of the United States. Now its government is collapsing
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Thursday, July 18, 2002 |
The yen hit a 17-month high against the dollar in foreign-exchange trading on Monday. This will make reform more difficult, as exports are the engine for Japanese recovery. Critics had already been saying that Prime Minister Junichiro Koizumi has failed to deliver the changes he promised when he swept into office in April 2001
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Monday, July 08, 2002 |
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n. Power based on intangible or indirect influences such as culture, values, and ideology.
The US's best soft power analyst is Harvard's Kennedy School dean Joseph Nye, who defines the concept as "co-opting people rather than coercing them".
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Wednesday, June 26, 2002 |
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"The president says it may be impossible to reach any agreement with the International Monetary Fund, the head of the central bank is giving up and going home, and the economy minister embarked tonight on a desperate quest to pry $18 billion from foreign lenders."
"For Argentina, an already disastrous economic crisis is suddenly threatening to become even more calamitous."
"'Argentina needs a very rapid agreement, but it doesn't depend on us,' a dejected President Eduardo Duhalde said in a television appearance here late on Monday. 'I hope we don't have to wait until September, because the situation in the region is getting worse every day.'"
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Friday, June 07, 2002 |
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" Japan's economy expanded by 1.4 percent during the first quarter of this year, the government said today, ending a recession that had dragged on for a year."
"A 6.4 percent rise in exports and a 1.6 percent increase in consumer spending — which together account for more than half the economy — helped to revive Japan's economy, the second largest in the world after the United States. The return to economic growth was slightly less robust than analysts had forecast because corporate capital spending dropped 3.2 percent compared with the last quarter of 2001. But it was the strongest growth in two years."
"But today's growth numbers do little to ease doubts about the sustainability of Japan's recovery, which is still largely driven by exports rather than domestic spending. Production has picked up — particularly of cars, electronics and semiconductors — but most of these products are being shipped overseas rather than used in Japan. Exports account for only about 10 percent of Japan's total economic output. Should economic growth slow in the United States, traditionally Japan's biggest export market, Japan would probably fall back into recession."
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"Japan's economy grew 1.4 percent in the first quarter, springing back from three straight quarters of contraction and marking the strongest growth in two years, the government said Friday."
"But analysts and government officials warned against too much optimism that the positive reading will continue in months ahead. The Japanese government is expecting the economy to grow zero percent in the fiscal year that began in April."
"The Cabinet Office said gross domestic product, which measures the total output of goods and services produced in the nation, grew at an annual rate of 5.7 percent in the three months through March."
"A big push in growth came from exports, which climbed 6.4 percent, on the back of recovery in the United States and the rest of Asia. Household consumption rose 1.6 percent, while public investment increased 4.1 percent."
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Thursday, June 06, 2002 |
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"The International Monetary Fund (IMF) has said it will resume talks about fresh loans for the troubled Argentine economy. "
"Argentine President Eduardo Duhalde's aim is to secure initial loans of $9bn (£6.2bn) which would be used to stabilise the country's economy. "
"Earlier this week, the Fund's Managing Director Horst Koehler said that an agreement could be reached within 45 days."
"The Fund agreed to send a delegation to Argentina next week after finding that the country has complied with the bulk of its demands for economic reforms. "
"The IMF's main conditions were that Argentina would push through:
- changes to its bankruptcy law in an effort to protect creditors
- changes to an economic subversion law in an effort to protect foreign investors
- the implementation of spending cuts by the country's provinces
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Friday, May 17, 2002 |
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"Japan declared Friday that the country had finally turned the corner on its 18-month recession, but a number of experts said the prognosis appeared to be motivated more by political pragmatism than the health of the economy. "
"In its monthly report on the state of the economy, the government said that although the conditions remained 'difficult,' the economy had "bottomed out." The statement, while not statistically official, means Prime Minister Junichiro Koizumi believes Japan's third recession in a decade is over. " "But the report Friday acknowledged that a timid recovery was linked mainly to an improvement in the economies of Japan's major trading partners in the United States and Asia, rather than to any improvement in domestic conditions."
"The turnaround overseas has helped bolster Japan's exports, stimulating production and driving down inventories. But there is widespread skepticism that an export-driven upturn will lift other parts of the economy. Japan, experts say, remains too dependent on growth overseas. "
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Thursday, May 16, 2002 |
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"Recently we've seen some interesting cases of Chinese officials getting up at seminars and press conferences and, for no apparent reason, revealing that things aren't so rosy in the Middle Kingdom."
"In March, Premier Zhu Rongji said that without the fiscal stimulus spending of the last few years, China's economy would have 'collapsed.' Then Finance Minister Xiang Huaicheng last month suggested that if other engines of growth aren't found, China is approaching a time when that collapse can no longer be forestalled. He called the country's fiscal situation 'grim' and said that the government could not maintain its current level of spending for much longer."
"Just ahead of the May 1 Labor Day, China's Labor Minister Wang Dongjin warned that the employment situation is also 'grim' and social stability is in jeopardy. Even if the economy continues to grow at an annual rate of 7%, he explained, unemployment is set to soar, since on net only eight million new jobs will be created each year while the labor forces grows by as many as 13 million people. In March, the central bank Governor Dai Xianglong admitted that the bad loans of the four big state banks, which dominate the Chinese banking system, are actually much higher than official estimates and could represent as much as 30% of their total lending. If they continue to rise, the national debt could be pushed to a dangerous level."
"What does this outburst of apparent candor mean? There are several reasonable guesses one could make. The most obvious is that China's reform process is in danger of stalling, and those at the top are trying to generate a sense of urgency in order to overcome bureaucratic inertia. Another is that at a time of leadership transition, factions or individual ministers are airing some of the dirty laundry in order to gain some advantage." [via BrinkLindsey.com]
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"To travel on this side of the Atlantic with Secretary of State Colin L. Powell is to catch a brief glimpse of a parallel universe: the heedless, insular, bellicose, unilateralist America seen by many European eyes."
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The latest terrorist outrage in Kashmir has pushed India and Pakistan a little closer to the brink. Could this spark the first war between nuclear powers?
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Tuesday, May 14, 2002 |
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"With Argentina's foreign currency reserves dwindling and its ability to borrow abroad blocked by past defaults, its government is facing a desperate cash squeeze and is asking the World Bank to let it put off repaying $800 million in loans that come due this week, President Eduardo Duhalde said today."
"The country's economic crisis, already the most severe in its history, is taking one turn after another for the worse, and Argentines are becoming more and more nervous. Labor unions aligned with the Peronist party of Mr. Duhalde have called a nationwide strike on Tuesday, and rumors over the weekend that several banks were about to collapse led to a run on automated teller machines."
"With international markets and banks watching Argentina closely for any sign of further deterioration in the government's already weak finances, an outright default on the World Bank loan due this week would be disastrous, and would cut the country off from its last source of credit."
"'Not repaying is suicide,' the president's spokesman, Eduardo Amadeo, acknowledged over the weekend."
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Friday, May 10, 2002 |
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"The United States urged Japan on Friday to more aggressively tackle the bad loans weighing down its banking sector.
In a meeting between Japanese and U.S. business leaders and government officials, U.S. delegates praised Japan's effort to pinpoint the problem loans but said Tokyo must do more to dispose of them.
"Accelerating the process of moving forward on this would be helpful for the economy," Randall Kroszner, a member of President George W. Bush's Council of Economic Advisers, told reporters after the meeting."
"Kroszner said it was important for Japan's banks to clear their books and start afresh with new loans to worthy business in order to keep the economy growing. He did not offer specific steps the government should take."
"Tokyo has said that problem loans at the nation's banks total 36 trillion yen ($281 billion). But private economists warn the problem is likely much bigger."
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Tuesday, May 07, 2002 |
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By THOMAS L. FRIEDMAN
"Wisam's views are widely shared by millions of Muslim youth. They are a product of many things: a reaction to America's war on terrorism and Ariel Sharon's war on Yasir Arafat, the failure of Muslim states to master modernity, Muslim resentment at being blamed for 9/11, unquestioning Congressional support for Israel and outright incitement against Israel and Jews in Arab and European media and Web sites. Stir it all together, and what comes out is a single big idea melding in the minds of many young Muslims: America, Israel and the Jews are working together to undermine Islam and dominate the world."
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Sunday, May 05, 2002 |
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By Joseph E. Stiglitz
Review of On Globalization by George Soros
"Seeking to explain what is wrong with globalization . . . special interests in the United States benefit from the current arrangements. . . . Global civil society has, at times, been able to overcome these established forces."
"Anyone who has watched the change in attitudes, both inside the institutions and in the general public, over the past five years must recognize the power of global civil society. It is now a commonplace that the international trade agreements about which the United States spoke so proudly only a few years ago were grossly unfair to countries in the third world. . . . practically all the people I see recognize the inequities and hypocrisies of American government policies."
"Soros is one of the growing band of experts who, while recognizing the power of globalization to increase wealth, also recognize its adverse effects. His indictment is simple: globalization has hurt many people, especially the poor in the developing world. Globalization has distorted the allocation of resources in favor of private goods at the expense of public goods. And global financial markets are prone to crisis."
" . . . while the links between poverty and terrorism are complicated, few would deny that poverty, and especially high unemployment rates among young men, provide fertile ground on which terrorism can grow. Ensuring that globalization will be more helpful to the poor thus becomes not just a moral imperative but also something that should be viewed as a matter of self-interest."
" . . . the IMF, the WTO, and the World Bank. . . . All of them take an important part in the unfolding drama of globalization, and they accordingly bear much of the blame for its failures. As Soros says, 'They are being operated for the benefit of the rich countries that are in control, often to the detriment of the poor ones....'"
"Globalization entails more interdependence, and interdependence requires cooperation. Soros makes a convincing case for the need for larger expenditures on global public goods, including health and economic development. Just at the time when we have urgent need for international economic institutions such as the IMF and the World Bank, confidence in these institutions is at its lowest. The solution is not to abolish them, but to reform them . . . "
The SDR Proposal
" . . . the US has benefited from the increased demand for dollar reserves, while the developing countries have paid a heavy price to obtain them."
" . . . the sum of the world's trade deficits must equal the sum of the surpluses; so if a few big countries, like Japan and China, insist on having a surplus, the rest of the world must have a deficit. . . . And as a country finds itself with a large deficit, it may face a crisis. If investors sell its currency, its central bank may be forced to push up interest rates in order to keep the currency from falling precipitously. The high interest rates may slow the country's growth and cause a recession."
"The only thing that keeps the system working at all is that the United States, the richest country in the world, has become the "deficit of last resort." This is the ultimate irony: the financial system allows the United States to live year after year beyond its means, buying abroad far more goods than it sells, even as the US Treasury, year after year, lectures others on why they should not do so. And the total value of the benefits that the US gets out of the current system exceeds, by a considerable amount, the total foreign aid the US gives. What a peculiar world, in which the poor countries are in effect subsidizing the richest country, which happens, at the same time, to be among the stingiest in giving assistance in the world."
Reform of Foreign Assistance
" . . . much of today's international assistance is hampered by the requirement that it pass through governments, whose agendas and interests do not always coincide with helping the poor of the world."
The Global Financial System
"It is not surprising that some of Soros's most penetrating insights concern the global financial system. . . . The problem, he rightly points out, is with their fundamentalist market ideology, a faith in free, unfettered markets that is supported by neither modern theory nor historical experience. . . . Those views have been far more muted following the failures and scandals of recent years, including the Enron debacle; the publicly orchestrated but privately financed bailout of Long Term Capital Management; and the revelations of the criminal use of secret offshore banking accounts."
"Soros explains that the case for free movements of capital is far less clear than that for free trade. He could have gone further: the evidence is that liberalizing capital markets does lead to increased risk but does not lead to increased economic growth. Soros explains something that most observers of the recent stock market bubble know intuitively, but that market fundamentalists deny: 'Financial markets, left to their own devices, are liable to go to extremes and eventually break down.' . . . Those who believe in market fundamentalism 'are reluctant to accept that the system may be fundamentally flawed when it is working so well for those who are in charge.'"
"Soros rightly notes the marked slowdown of flows of funds to the emerging markets after the 1998 crisis. 'Taking resident lending, portfolio investment, and private credit flows together, there has actually been a net outflow from emerging markets since 1997, going from positive $81.7 billion in 1996 to a negative $106 billion in 2000, offset by slightly larger inflows of foreign direct investment and by official financing.' This is an odd situation, and for anyone who believes that the key problem of development is lack of finance, it is deeply troubling."
"Markets may provide discipline, but they are fickle and erratic disciplinarians, overlooking important sins at some times, and at other times punishing countries for sins of others."
International Trade and the World Trade Organization
" . . . when goods from rich countries can flow without restriction to the poor countries, the poor countries may find it extremely difficult to build up their economies, because of the strong competition from imports. Meanwhile, the well-to-do countries that officially praise free trade frequently use tariffs and subsidies to limit imports from poor countries, depriving them of the trade they need to relieve poverty and pursue their own economic growth."
"'The WTO opened up a Pandora's box when it became involved in intellectual property rights. If intellectual property rights are a fit subject for the WTO, why not labor rights, or human rights?'"
Global Values
"Global leadership requires not only being against something; it requires being for something. We have an alliance against terrorism. We should also have an alliance for more global justice and a better global environment. Globalization has made us more interdependent, and this interdependence makes it necessary to undertake global collective action. The United States must take the lead to provide global public goods—including law and order. It should be working to bring about reforms in the world economic order, away from the 'Washington consensus'—the ideologically driven 'model' of market fundamentalism. But as Soros also points out, for the US to be a leader will require some deep changes:
We must abandon the unthinking pursuit of narrow self-interest and give some thought to the future of humanity.... [We need] a reassertion of morality amid our amoral preoccupations. It would be naive to expect a change in human nature, but humans are capable of transcending the pursuit of narrow self- interest. Indeed, they cannot live without some sense of morality. It is market fundamentalism, which holds that the social good is best served by allowing people to pursue their self-interest without any thought for the so-cial good—the two being identical —that is a perversion of human nature."
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Friday, May 03, 2002 |
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" . . . the main reason Europeans hate Israel is that they hate America; and the main reason they hate America is that they really hate themselves."
" . . . Europe's problems with Israel and America can be boiled down to these two attributes: guilt and arrogance."
"The Europeans, as we all know, are now the backseat drivers of history. They had their hands on the wheel for a very long time, and the world is better off for it — an assertion which is, sadly, politically incorrect on both sides of the Atlantic, but no less obviously true for being so. Were it not for European civilization leading the way for much of the last thousand years, humanity would be in a ditch. To suggest otherwise is to dabble in fantasy.
But, around the middle of the last century, the Europeans got lost and America had to get into the driver's seat. This was very embarrassing for the Euros . . . "
"As a way to compensate with this indignity, and with its own errors, Europe internalized the moral conclusions of the Left. The churches stand empty across the Continent. Nihilism, relativism, postmodernism, subjectivity, deconstructionism: These are the tools used to dismantle and diminish the accomplishments of a once-great civilization."
"But — most of all — imperialism and colonialism are now the original sins of European Man."
" . . . the collapse of empire has done more to shape the modern West European mind than the lessons of World War II did. . . . Europeans decided to justify their withdrawal from empire as a moral epiphany rather than a surrender."
" . . . American leftists can be counted on to explain away or justify just about any inner-city pathology, Europeans are likely to make excuses for their former subjects ad nauseum unless someone — usually America — shames them out of it. . . . across the Atlantic a continent of guilty white liberals has spent a generation coming up with excuses for their former colonial subjects, making the same kind of allowances for violence and 'pent-up rage.'"
"But white liberal guilt, here or abroad, is relatively harmless by itself. It only becomes dangerous when — mixed with moral relativism and an arrogance so colossal it threatens to throw the planet off its rotational axis — it becomes policy. The Europeans are the enablers of barbarity for the simple reason that it makes them feel like they're still in charge in some way."
"The Europeans still believe they are the avant-gardes of history. They believe they are more enlightened, more sophisticated, more capable of reading the map to the future."
"This attitude causes European 'intellectuals' to predict the imminent comeuppance of the U.S. If schadenfreude is the joy one feels at another's misfortune, then we need a word for the rage that comes with anticipating a misfortune that doesn't happen."
"In short, they can lecture us all they want about colonialism, but it falls on deaf ears over here because we were never like them."
"The Europeans see the United States and Israel through the lens of their own nostalgia. . . . the French increasingly assume the mantle of victimhood against an imperial America."
"Meanwhile, Israel is cast as the seat of the American raj in the Arab world. The analogy is, of course, absurd. But absurdity goes hand-in-hand with being a nation of so many cheeses. Israel isn't a colony and, except as refugees, the Israelis have no place to go."
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Wednesday, May 01, 2002 |
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"Mirroring the growing view that Japan will emerge from recession later this year, the Bank of Japan upgraded its economic forecasts today in one of its twice-yearly reviews. But it gave no sign of abandoning its ultraloose monetary policy, with short-term interest rates effectively at zero."
"The central bank said today that it now expected Japan's $4.1 trillion economy, the second-largest after the United States, to contract by about 0.5 percent in the fiscal year that began April 1. It had previously predicted a 1 percent contraction."
"But new statistics today showed that domestic demand remained anemic. Construction orders for March were 12.9 percent lower than in March 2001, and housing starts fell 6.3 percent from a year ago. And crude oil imports — Japan must import nearly all of its energy — were down 6.4 percent from a year before."
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Tuesday, April 30, 2002 |
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"Human intelligence sources in Venezuela and Washington told STRATFOR April 14 that the Central Intelligence Agency and the U.S. State Department may have been involved separately in the events that took place in Caracas between April 5 and April 13. If the information is correct, the reinstatement of President Hugo Chavez less than 48 hours after he was toppled by a civilian-military coup could have disastrous implications for the Bush administration's policy in Latin America."
" . . . if the Chavez regime produces convincing evidence of U.S. government involvement in the failed coup -- that it could poison Washington's relations with governments throughout Latin America. Efforts to win regional support for increased U.S. military support to Colombia, and to other Andean ridge countries battling the twin threats of international drug trafficking and nominally Marxist insurgencies, would be set back significantly in Latin America and Washington. The Bush administration's efforts to pursue more free trade agreements in the region also would be undermined."
"This also would give a tremendous boost to Chavez's leadership status and credibility with populist and nationalist groups across Latin America that view the United States as a threat and that oppose U.S.-style capitalist democracy. "
"If the sources are correct, the Bush administration's carefully laid plans soon may backfire."
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"Last Wednesday, April 24 [2002], an obscure deputy in the Iranian parliament went to the podium at 10:45 in the morning to read a prepared statement. Few in that hall could have known what was coming: a fatwa issued by one of the country's most prestigious and revered religious leaders, the Grand Ayatollah Montazeri. His message was directed far beyond the boundaries of Iran, to all members of the Shia faith. It was a powerful and politically important message: Suicide terrorism is antithetical to the teachings of Islam, and those who practice it, and kill women, children, and babies, are doomed to eternity in hell. The struggle between the Palestinian people and Israel must be resolved by other means, above all by negotiations."
"This is an event of enormous importance, for it is the first time that a leading Iranian cleric has condemned suicide terrorism, and it is an explicit attack on the Iranian regime, which has praised the terrorists and called upon Iranians to volunteer for suicide missions."
"Over the weekend, new demonstrations broke out near Tehran, where many workers have not been paid for a year! At Friday prayers, in an amazing confession of failure, Ayatollah Janati — the head of the Council of Guardians and one of the five most powerful men in the country — admitted to the faithful that Iran was in desperate economic straits. Iran, he said, was as badly off as Argentina, perhaps even worse."
"And what are [U.S.] leaders doing about this? They are doing nothing. No, they are doing worse than nothing. . . . The Iranian people need to hear and see that America believes in them, supports their cause, and hates their oppressors."
"The stakes are very high. The fall of the mullahs in Tehran would send a devastating message to the entire Islamic world: Theocracy has been tried, and it has failed. Osama bin Laden's vision has been rejected by the people of Afghanistan and the people of Iran, by Sunnis and Shia alike."
"The most important thing is our leaders' words to the Iranians. We want the fall of the regime. That is what the war on terrorism is all about. To remain silent is to be complicit in the repression of Iran. There is no diplomatic 'solution.' We want a free Iran. Don't we?"
— Mr. Ledeen is an NRO contributing editor & resident scholar in the Freedom Chair at the American Enterprise Institute. He is author, most recently, of Tocqueville on American Character.
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Hu Jintao, who will in the autumn probably take over as leader of China’s ruling Communist Party, arrives in the United States this weekend for his first official visit. Will it mark the start of a beautiful friendship with President George Bush? Not if recent Sino-American tensions are any guide
" . . . China 'opposes the strong [U.S.] lording it over the weak and the big bullying the small.' China . . . 'has long pledged not to seek hegemony' in its region."
"Mr Hu's travels follow a trip by Mr Jiang that ended on April 20th and which took him to, among other countries, Libya and Iran . . . "
" . . . China's view of the Israeli- Palestinian conflict: that it was critical of 'Israeli killings', and that Israel should withdraw from all occupied territories."
"But China's main concern, and the one that is likely to be top of Mr Hu's list in his talks with the Americans, is much closer to home. This is American military and political support for Taiwan, which China considers its own."
"The Chinese were deeply disturbed and were none the happier when it was reported that Mr Wolfowitz had repeated words used by Mr Bush last year, that America will do 'whatever it takes to help Taiwan defend itself'."
"To China, all of this feels like a slap in the face. 'China tried to co-operate with the Americans in the war against terror, but the Bush administration is not doing much to promote the relationship' . . . the dominant line coming from China is that the Taiwan issue 'could become a problem, not that it is a problem'. The tricky bit in diplomatic negotiations is judging where the 'red lines' are."
"It is one Mr Jiang's basic policies, and one he hopes will form part of his legacy, that China can stay stable and grow stronger only if it avoids serious conflict with the United States. The apprentice leader will be aware that Mr Bush could stay in power for another seven years. The chemistry between the two men could set the tone for Chinese-American relations for a fair time."
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Monday, April 29, 2002 |
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"The United States largely has avoided the fallout from Argentina's financial collapse. That could change if the crisis in South America's second biggest economy worsens. The worry is that a serious recession and Argentina's plunging currency could spill over to neighbors still trying to emerge from last year's global slowdown - and eventually reach the United States."
"'The global economy remains very fragile with troubles in Argentina, Japan mired in a decade-long recession and Germany struggling,' said Mark Zandi of Economy.com. 'If something goes badly wrong, it could quickly spread to our economy.'"
" . . . the bigger threat was to trade rather than the flow of investment. Argentina's $3.9 billion in purchases accounted for less than one-half of 1 percent of total U.S. exports last year. But U.S. sales to the rest of Latin America could suffer if Argentina's slowdown depresses growth in the region. Brazil, South America's biggest economy, does nearly one-third of its trade with Argentina."
"'The Latin American economies, like the rest of the world, are trying to recover from the global recession and Argentina's troubles will be a significant limitation on growth'"
"'The Argentine people are suffering and they are blaming foreign banks, the IMF (International Monetary Fund) and the U.S. government . . . The whole process of political reform could be undermined.'"
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These are times of change in the bond markets. While lenders to sovereign debtors are still searching for a formula that will save them time and money in the event of a default, the holders of corporate bonds are learning to throw their weight about—particularly over the restructuring of hard-pressed telecoms companies
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Sunday, April 28, 2002 |
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"The news from Europe sounds grim."
"The ultranationalist, xenophobic right is manifestly on the rise, and not just in France. In the most recent national elections in Austria and Switzerland, anti- immigrant parties got 27 percent and 23 percent of the vote, respectively. In Antwerp, the hypernationalist Vlaams Blok won nearly 40 percent at the last local elections, in 2000. Last month one in three of the prosperous burghers of Rotterdam gave Pim Fortuyn, a flamboyant gay populist, their backing: half of all Dutch voters under 30 support his proposal to ban Muslim immigration and say they'll vote for him and his party in the country's national elections next month."
"The antiforeigner Danish People's Party won 12 percent of the national vote last November. Even in Britain, there is similar sentiment. The anti-immigrant, ultranationalist British National Party scored an unprecedented 14 percent of the vote in some decaying industrial towns with large Asian populations."
"These groups have in common three interlocking obsessions: crime, immigration and the loss of national 'identity.'"
"'France' or 'Denmark' is a concept with which men and women can identify, for good and ill, and on whose behalf prejudices and fears may be mobilized. 'Europe' is not."
" . . . the European social crisis of which the far right is a pathological portent will not disappear, and on this score Americans have grounds for anxiety. It has for some time now been clear that Europe and America are drifting apart. On free trade, Iraq, the Middle East, international courts and many other post-cold war international issues, the Western allies are at odds. Yet the most important difference of all frequently passes unmentioned."
"Europeans today are being forced to weigh the social costs of abandoning the postwar welfare state. The far right offers one solution — close the borders against change and newcomers and confine state-provided social and welfare services to the 'native' community. The left would retain the ideal of the social democratic state, at the expense of profit and efficiency if need be. And both sides juxtapose their European understanding of the good society, the cohesive community, to the American market-driven variant. This widely debated contrast is the common, binding thread at the heart of European anti-Americanism, and it is set to grow, not diminish."
"Fair-weather or not, the Europeans are our closest friends. But many Europeans see the world very differently, and it is a dangerous illusion to suppose that the logic of globalization must needs bring us together. Recent events in Europe suggest that the opposite may be happening. And that would be grim news indeed."
Tony Judt is director of the Re marque Institute at New York University.
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Anti-Semitism arises again.
"What is intolerable is Jewish assertiveness, the Jewish refusal to accept victimhood. And nothing so embodies that as the Jewish state."
"What so offends Europeans is the armed Jew, the Jew who refuses to sustain seven suicide bombings in the seven days of Passover and strikes back."
"And this time the Christ-killers come in tanks. Just when Europe had reconciled itself to tolerance for the passive Jew -- the Holocaust survivor who could be pitied, lionized, perhaps awarded the occasional literary prize -- along comes the Jewish state, crude and vital and above all unwilling to apologize for its own existence."
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Saturday, April 27, 2002 |
"The government succeeded today in taking two steps to restart the stalled economy, allowing banks to operate, though only partly, for the first time this week, and naming an economy minister, a post that had been vacant since Monday."
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Thursday, April 25, 2002 |
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Michael Prowse reviews Marx's Revenge by Meghnad Desai.
"Many people imagine that markets and democracy represent a final destination, the highest imaginable development of social organisation. After the Berlin Wall collapsed, Francis Fukuyama expressed this insight pithily with his claim that "history had ended". But if Marx was right, capitalism, like feudalism, will go under once it has exhausted its potential. And the irony about recent efforts to deregulate economies is that they will hasten rather than retard this process."
"So long as capitalism was shackled - by high taxes, tariff barriers, capital controls and so forth - its development was stymied. The truest friends of socialism, Desai thus hints, are the conservative leaders who liberalised markets. They restarted the historical process that will lead, ineluctably, to a socialism that is genuine because spontaneous rather than imposed by revolutionary upstarts."
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Crown Prince Abdullah, ruler of Saudi Arabia, has arrived at President George Bush’s ranch in Texas against a backdrop of virulent anti-American protests across the Middle East. America’s support for Israel in its conflict with the Palestinians brings political headaches to all its Arab allies
"Of all the region’s countries, it is Saudi Arabia, the world’s biggest oil-exporter, and site of Islam’s holiest shrines, whose stability has caused the most nail-biting since September 11th. The 5,000 princes and princesses of the House of Saud have to cope with their own dynastic squabbles while managing a population that is growing by 3% a year and accommodating a clergy that has helped foster the Saudi extremists who went to fight in Afghanistan. The aloof, spendthrift and corrupt ruling elite are thus vulnerable to domestic pressure to resist American demands. That greatly complicates American policy, and in particular its desire to replace Iraq’s Saddam Hussein."
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"Presidents of the five states bordering the Caspian Sea failed to agree Wednesday on how to divide its wealth, leaving the vast undersea oil and gas reserves untapped."
"During the talks, Iran said it wanted to maintain its 50 percent share, and Putin publicly did not spell out Russia's position clearly. The other three want a share based on national sectors."
"The Caspian oil has taken on strategic importance as Western nations seek alternatives to Persian Gulf oil. Meanwhile, both Russia and Iran want to counter a buildup of American military influence in Central Asia that followed the Sept. 11, 2001, terrorist attacks in the United States."
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"Ebullient they are not, not by a long way yet. But Japanese consumers expressed a marked improvement in their outlook in a new survey released today by the Japanese government, and analysts are calling it a positive sign that the stumbling Japanese economy is beginning to find its feet again. On a scale where 50 is the dividing line, with pessimism below and optimism above 50, the government's quarterly index of consumer confidence jumped to 38.4 in the survey, conducted in mid-March. That was up from 36.9 in mid-December."
"One great frustration for economists and political leaders trying to revive the Japanese economy has been consumers' extreme caution. Avid savers even in boom times, Japanese consumers have reacted to recession by snapping their wallets shut, pushing prices down and driving retailers to the wall."
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Wednesday, April 24, 2002 |
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"Presidents of the five states bordering the Caspian Sea failed to agree Wednesday on how to divide its wealth, leaving the vast undersea oil and gas reserves untapped. The cache of undersea oil and gas is believed to be the third largest in the world. Even a vague general declaration that had been expected to be signed on the exploitation of the Caspian eluded the presidents of Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan."
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"The banks were shut, the cash machines were empty, his friends and neighbors had no money to lend, and now he couldn't even use a credit card to buy gasoline."
"This country of 37 million people has been crippled for months by the worst economic crisis in its history. But last Friday afternoon, after banks and many businesses had closed for the weekend, the Argentine economy entered the financial equivalent of the twilight zone. To stop an accelerating flow of money out of bank accounts, President Eduardo Duhalde ordered that all bank transactions simply be halted until further notice."
"Since business resumed on Monday, an eerie stillness has prevailed across Argentina, with shops empty as consumers tried to limit their expenditures to the bare necessities. Workers cannot cash their paychecks. Department stores, newsstands, flower vendors, restaurants, taxicab drivers and others who deal in what are now seen as frivolous luxuries have seen their sales plummet to almost nothing. Even lottery vendors have been hit."
"Those hit hardest by the government's measure are ordinary working families on fixed incomes."
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Tuesday, April 23, 2002 |
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"Government officials . . . said they were forced to act because there was no longer enough money in the banking system to meet obligations. But the drastic measure also appears to reflect the government's growing anxiety at its inability to reach an agreement with the International Monetary Fund that would inject up to $20 billion in new funds into the economy."
" . . . 'we run the risk of having the entire system explode' unless the monetary fund and other foreign creditors relented on the issue of provincial spending. 'The crisis affects the entire country and above all the public sector . . . It isn't that a lot is being spent in the provinces, but because people have stopped paying taxes as a result of the crisis. The governors are doing what they can.'"
" . . . Mr. Duhalde's government was proposing legislation that would forcibly convert bank deposits into long-term bonds."
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"But the measure of Israel's concessions ought not be how far it has moved from its own starting point; it must be how far it has moved toward a fair solution."
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"ere is the essential point: The Palestinian mainstream learned via Oslo that its cease- fire would not produce a fair solution in the form of sovereign and equal states, and that its real interests had been sacrificed on the altar of geopolitics. In effect, negotiations would be bargains reflecting the realities of power and control rather than either a pathway to some mutually acceptable form of parallel states or what many Palestinians had expected--namely, resolution by reference to international law. It is important to appreciate that on virtually every issue in contention, the Palestinians have international law on their side, including the Israeli duty to withdraw from land taken during a war, the illegality of the settlements under Article 49(6) of the Fourth Geneva Convention, the right of refugees to a safe return to the country that wrongfully expelled them and the generalized support for a Jerusalem that belongs to everyone and no one."
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" . . . the government's apparent preference for a soft short-term landing makes a mockery of Prime Minister Junichiro Koizumi's claim that he will spare no sacred cows in overhauling the economy. In fact, the continuing mountain of bad bank loans, coupled with the country's weak growth and an accelerating decline in prices, has analysts asking whether, after a decade of policy Band-Aids, Japan can keep riding this economic roller coaster without losing control."
"The problems are huge, Mr. Kanno and others say, and they need to be tackled now. Prices have fallen for three years in the worst bout of deflation since the Great Depression. Profits have eroded, and companies are having a harder time repaying their debts, swelling the amount of nonperforming loans held by the banks. To keep up, companies are cutting borrowing, wages and jobs, and that depresses spending."
"A host of other issues also loom large, including how to deal with an aging society and pension shortfalls."
"'Policy-making over the past decade . . . has been all about system preservation and refusal to face up to the scale of the problems, which seems to be where we are currently heading.'"
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"The massive third world immigration into Europe in the last twenty years or so has seen the system stretched to breaking point resulting in a surly, resentful and thoroughly balkanised polity that is starting to express itself through people like Le Pen in France and Pym Forytun in Holland. The ossified Eurocrats are starting to reap what they have so blithely sewn."
"But it isn't just the Napoleonic welfare-state which is to blame. The
post-war political class was shot through with post-colonial guilt and haunted by the horrors of Nazi Germany to the extent where they saw 'European culture' as something which had to be curbed, repressed and, preferably, phased out. Europeans were required to demonstrate open- ended 'tolerance' while immigrant communities were required to do quite the opposite. It was an appallingly misconceived and damaging bit of social engineering that may yet have terrible reprecussions."
"There are those who will point to 9/11 as a turning point but that would
not be entirely true. These tensions have been fomenting in Europe for years. What may be true is that both 9/11 and the Israel-Palestinian conflict have further radicalised the large Muslim minorities in much of Europe, particularly in France and Holland. How many Europeans have visualised, rightly or wrongly, homicide bombers devastating the pavement cafes of Paris or Amsterdam and shuddered? Failing to find comfort in their mealy-mouthed and morally relative incumbents, have they turned to other sources for their salvation?"
"Of course, this could all just be a protest vote rather than a long-term
trend but the former sometimes has a knack of of morphing into the latter even if nobody meant it to. I have a sense that the world is shifting in tectonic ways and moving the plates of history around under our feet."
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Monday, April 22, 2002 |
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As Argentina’s financial crisis continues to deepen, any hopes that new help might soon be forthcoming from the International Monetary Fund have quickly faded. Argentina will have to deliver concrete reforms first
"The government of President Eduardo Duhalde inherited a catastrophic collapse of Argentina’s economy and its financial system. Latin America’s third-largest economy was forced to default on its huge public debt (the largest sovereign-debt default in history) and to break a decade-old currency peg with the American dollar. The Argentine peso is now worth less than one third of its value of just a few months ago. The economy is in its fourth year of recession and unemployment is at least 20%, possibly much higher. On April 19th, the day before Mr Remes’s rendezvous with the G7 ministers, the authorities closed all banks indefinitely in a desperate attempt to stop the continuing drain on bank reserves. The banks are unlikely to reopen until emergency legislation has been passed obliging depositors to accept government bonds instead of cash."
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"In a major upset not predicted in weeks of opinion polling, the extreme rightist Jean-Marie Le Pen qualified today to face President Jacques Chirac, a conservative, in the runoff for the French presidency next month. The 73-year-old Mr. Le Pen, who once called the Nazi gas chambers "a detail in history," benefited from the huge field of candidates that split the vote, an apathetic electorate and a wave of anti-crime fervor to edge past Prime Minister Lionel Jospin."
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"The crisis that has crippled the Argentine economy for the past five months took a sudden turn for the worse over the weekend after the government suspended bank and foreign exchange operations indefinitely and the country's creditors, meeting in Washington, rejected a bailout on President Eduardo Duhalde's terms."
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Saturday, April 20, 2002 |
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"I'm not saying any of these things aren't defensible from an Israeli point of view. I'm just saying it takes very little imagination to see why Palestinians might balk, after three decades of nursing a grievance centered on—at the very minimum—the right to have their very own state defined by pre-1967 borders."
"Another big issue was the 'right of return' for Palestinian refugees. The Israeli fear is certainly understandable: If all Palestinians who once lived in Israel—and all of their descendants—were allowed to return, Israel might wind up with an Arab majority."
"'The measure of Israel's concessions ought not be how far it has moved from its own starting point; it must be how far it has moved toward a fair solution.'"
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The spring meetings of the International Monetary Fund and the World Bank this weekend come at a time when foreign aid is back at the top of the international political agenda. But for more aid to be effective, tough decisions will have to be made, not only in poor countries, but in rich nations as well
" . . . as President George Bush’s war on terrorism got under way, and concern grew about the risks posed by “failed states”, aid policy assumed a new geopolitical significance. Writing big cheques to ease poverty and speed development started to make sense in domestic political terms for leaders in the rich nations."
" . . . will begin tackling some of the issues raised. How much aid makes sense? What is the best way of providing it? How can waste, corruption and plain inefficiency in many developing countries be by-passed? And, just as important, what obligations is it fair to impose on the recipients of the largesse?"
"As is so often the case in international economic policy, America holds the key to progress. The world’s largest economy is also the biggest shareholder in the IMF and the World Bank: what it says goes. America can be instrumental in shaping policy through these institutions, through the G7 industrial countries, and bilaterally."
"Work is also under way in the IMF and the G7 on ways to reform the international financial system. This now has two objectives. One is to make it harder for terrorist organisations to obtain funding by cracking down on money-laundering and increasing financial transparency. The other is to reduce the occurrence and severity of financial crises in emerging-market countries."
"It is also starting to dawn on those involved in reshaping international financial institutions that the various mechanisms for helping developing countries are more interlinked than ever before, and more interdependent. Sending generous cheques will not of itself guarantee poverty reduction. Reconstructing the international financial architecture also is not, by itself, enough. The steps which industrial economies will need to make if they are serious about helping the world’s poorest countries to develop their economies have barely begun to register with political leaders in rich countries."
"Industrial countries still spend more on subsidies to their farmers than they do on foreign aid, even though opening their food markets to foreign competition, and cutting and eventually eliminating farm subsidies, would bring huge benefits both to developing-country farmers and rich-country consumers and taxpayers."
"Trade issues, though, will be conspicuous mainly by their absence from the Washington meetings this weekend. This linkage between aid and trade, for now, is one which the rich nations would rather ignore. But it is one which, if they really mean to help poorer countries, rich countries will have to face sooner or later. For everyone’s sakes, rich and poor alike, it should be sooner."
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Thursday, April 18, 2002 |
test test test
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Wednesday, April 17, 2002 |
A nation is a society united by delusions about its ancestry and by common hatred of its neighbors. --W. R. Inge (1860 - 1954)
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Tuesday, April 16, 2002 |
"The Europeans are scared of their Muslim populations, scared of what perceived slight might turn them from shooting up kosher butchers to shooting up targets of more, shall we say, concern to the general population. When the war with Iraq starts, we'll find out. No wonder Paris and Brussels are as keen to postpone it as Baghdad and Riyadh. The "whole world" is agreed that if anybody has to be blown up it might as well be the Israelis. Ah, those Jew troublemakers: why won't they just lie there and take it?"
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Discovery suggests near limitless supply of clean fuel
" . . . formidable engineering problems remain to be overcome in abstracting the gas, the sheer volume of the Earth's crust means that such a high concentration would solve the world's energy problems."
" . . . vast quantities of rock would have to be mined. . . . the extraction and crushing of rock to extract the trapped hydrogen is likely to be prohibitively expensive."
"The most promising source of the hydrogen may be geological 'traps' similar to those now drilled for natural gas. . . . 'One of these natural hydrogen fields is already known to exist in North America, and extends from Canada to Kansas.'"
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"Standard & Poor's lowered Japan's sovereign credit rating one notch yesterday, to AA-, saying that the Japanese government was moving too slowly in trying to overhaul the economy."
"'The crisis isn't getting any better and is getting worse . . . The downgrades are coming pretty fast and furious now.'"
"Japan, which had a triple-A credit rating a little more than a year ago, is now graded on the same level as the Czech Republic and Cyprus."
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Monday, April 15, 2002 |
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"The Middle East has been one of the most flammable parts of the world for many decades, of course. War and near-war have been the norm there for much of the half-century since the end of World War II. But there are good reasons to consider the current crisis not only more severe but significantly different from those in the recent past."
"It has potential implications far beyond the Holy Land, indeed far beyond the Middle East — implications for the American war on terror, for the relationship between the United States and its European allies, for India and Pakistan. It could spill over into Syria, which might jump at the chance to confront Israel if Israeli officials follow up on their veiled threats to hit Syrian targets. It could destabilize Jordan, a force for moderation."
"Until it is defused, the prospect of significant European or Islamic support for an attempt to oust Saddam Hussein of Iraq is next to nil."
"And if an explosion in the Middle East should tempt someone like Mr. Hussein to interrupt oil flows or unleash weapons of mass destruction, the stakes quickly become global, challenging the major powers, even more than they are challenged today, to distinguish what is prudent from what is rash."
"In that way, if in no other, the situation today evokes the trap of out-of- control events that history set for Europe in 1914. Then vanity, miscalculation and new weapons and tactics set the stage for military stalemate on a catastrophic scale, and once war started, rigid alliances assured that virtually all of Europe would be involved. Rigid alliances are not the problem today, of course, and Americans seem justifiably confident of their superiority on the battlefield. But broad resentment of the United States — in the third world especially, but in corners of Europe too — could unite other countries in ways that frustrate American faith in an inevitable victory in the long war against terror."
"A European diplomat, not at all unfriendly to the United States, commented last week: 'It has become a self-fulfilling prophecy — in the Middle East, terrorism pays.'"
"AT a time when the United States boasts the greatest military force in its history, when it is able to project that force around the world, it faces a precipitous decline in its influence in one of the arenas of greatest importance."
"Neither the European Union nor the United Nations has any significant influence over Israel, and public opinion in Europe has turned sharply against United States policy in the region. The sweeping support enjoyed by President Bush's anti-terror policy has dissolved on the Continent. European leaders argue that the American president has failed in what they see as his responsibility to rein in Mr. Sharon, on whom they place much of the blame for the current violence."
"'I don't remember the last time Europe and the United States looked at an important issue as differently . . . 'Maybe Vietnam.'"
"In truth, Europe is still trying to adjust to a world with a single superpower, and it is having a hard time doing so. It sees American military spending that far outstrips its own and worries, but is unwilling to allocate more money to defense. Respect for American military successes in Afghanistan coexists with resentment of American power. They fear being left out of big decisions . . . " ... [more]
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"President Bush, who once spoke of rigid lines drawn between "good" men and "evildoers," has now been so overrun by fresh hellish events and situational geopolitical bargaining that his old formulations — "either you are with us or you are with the terrorists" — have been rendered meaningless."
"Mr. Bush doesn't seem to know that since the routing of the Taliban his moral clarity has atrophied into simplistic, often hypocritical sloganeering. He has let his infatuation with his own rectitude metastasize into hubris. . . . It takes some kind of perverse genius to simultaneously earn the defiance of the Israelis, the Palestinians and our Arab "allies" alike and turn the United States into an impotent bystander."
" . . . his seasoned brain trust, the competing axes of power in the left (State) and right (Defense) halves of that surrogate brain have instead sent him bouncing between conflicting policies like a yo-yo, sometimes within the same day."
"The goal of stopping Saddam, worthy as it is, cannot be separated from the conflict of the Jews and the Palestinians and never could be. . . . The president has yet to speak publicly about the spillover of the hostilities into Europe, where each day brings news of some of the ugliest anti-Semitic violence seen there since World War II."
"To Mr. Bush, these immutable policies are no doubt all doctrines, principles, testaments to his moral clarity. In fact, many of them have more to do with ideology than morality. Only history can determine whether they will be any more lasting than the Bush doctrine on terrorism. . . . 'This is a world with a lot of gray . . . We can choose either to live in an abstract world or choose to engage in the real world. . . . The reality of that has started to set in with this administration.'" ... [more]
2:07:42 PM Google It!
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Sunday, April 14, 2002 |
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"Hugo Chavez, who once plotted a coup to overthrow Venezuela's government, was himself ultimately ousted as president after a dispute over the country's lifeblood, its oil industry. To many, it was not surprising that taking on Venezuela's marquee industry led to Chavez's demise."
"Oil is Venezuela's claim to international prestige, its most important economic engine and an example of all that is good and bad about a nation whose land pours out wealth but which still manages to have a population that is overwhelming poor. Chavez used oil as a potent weapon as he tried to keep petroleum prices high, criticized the United States and fought for prominence on the international stage with Cuban leader Fidel Castro as his mentor."
... [more]
9:54:22 AM Google It!
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"President Hugo Chavez returned triumphantly to office two days after he was ousted and arrested by Venezuela's military, raising his fist in the air as he greeted supporters and reclaimed the presidential palace Sunday."
... [more]
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Saturday, April 13, 2002 |
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" . . . Pedro Carmona Estanga, 60, head of Venezuela's most powerful business group, was installed today as president of an interim government that succeeded President Hugo Chávez, who was forced to resign early today. Mr. Carmona promised 'freedom, pluralism and respect for the state of law' and said general elections would be called within a year."
"Mr. Carmona will have to work hard. Many of the poorest people will see him as part of the 'squalid oligarchy' that Mr. Chávez derided. 'There are still 15 to 20 percent of the people who think Chávez is god . . . and the biggest challenge between now and Christmas is for this transition government to be able to respond to their needs.'" ... [more]
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" Japanese financial regulators have found an additional 1.4 trillion yen ($10.6 billion) in nonperforming loans that must be written off by the country's 13 largest lenders . . . "
"Sensing that a lack of faith in the banks' candor was leading investors to assume the worst, the Financial Services Agency sent inspectors to review the loans the banks had made to their 149 largest borrowers. More than three-quarters of these loans were to companies in fields like real estate, construction and retailing that have been hit especially hard by the collapse of Japan's asset-price bubble in 1990."
"The regulators said the banks' losses on bad loans would probably total 7.8 trillion yen ($59 billion) for the fiscal year that ended March 31, about 22 percent more than the banks initially forecast."
"The audit is likely to increase pressure on the banks to write off nonperforming loans swiftly. But analysts said that losses at the banks had made them that much more hesitant to call in loans from major companies near the breaking point, for fear of worse losses if the borrowers failed."
"A strengthening of the economy might revive borrowers' fortunes enough to avoid that crisis, as has happened before, and the Bank of Japan said in its latest monthly report that it saw glimmers of hope on that front. 'Japan's economy still continues to deteriorate as a whole, but the pace has moderated somewhat,' the bank said." ... [more]
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Friday, April 12, 2002 |
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Biography: PIERRE BOURDIEU (1930–2002)
"With the death of Pierre Bourdieu, the world has lost its most famous sociologist, and the European Left its most passionate and authoritative voice of the past decade. . . . The leitmotif of his work, throughout his life, was inequality—his writings can be read as one long investigation of its manifold forms and mechanisms in modern capitalist societies."
Discussion:
A Franco-German exchange between novelist and sociologist on the success of neoliberalism in transforming political regression into the standard of social progress; and the fate of the Enlightenment in the two leading cultures of the European Union.
G: " . . . the consequences of political failure—politics having now been entirely displaced by the economy."
B: " . . . political reasons: we believed that the violence wrought by neoliberal policies in Europe and Latin America, and many other countries, is so great that one cannot capture it with purely conceptual analyses."
G: " . . . Both of us—you as a sociologist and myself as a writer—are children of the Enlightenment, a tradition which today, at least in Germany and France, is being called into question, as if the process of the European Enlightenment had failed or been cut short, as if we could now continue without it. I don’t agree. I see flaws, incomplete developments in the process of Enlightenment—for example, the reduction of reason to what is purely technically feasible."
B: "I see neoliberalism as a conservative revolution, as the term was used between the wars in Germany—a strange revolution that restores the past but presents itself as progressive, transforming regression itself into a form of progress."
G: " . . . since the collapse of the Communist hierarchies, capitalism—recast as neoliberalism—has felt it could run riot, as if out of control. There is no longer a counterweight to it. Today even the few remaining responsible capitalists are raising a warning finger, as they watch their instruments slip from their grasp, and see neoliberalism repeating the mistakes of Communism—issuing articles of faith that deny there is any alternative to the free market and claiming infallibility."
G: "A capitulation to the economy is taking place."
B: "There has been a sort of permanent unrest, which has obliged the social democrats in power to adopt at least the pretence of a socialist discourse. . . . all social gains have historically come from active struggles. . . . the power of the dominant order is not just economic, but intellectual— lying in the realm of beliefs. That’s why one must speak out: to restore a sense of utopian possibility . . . "
G: " . . . what’s lacking is an attempt on the part of the unions to break out of the national framework into a form of organization and mobilization that would transcend frontiers. . . . working people who have been unionized their whole lives have far greater experience in the social sphere than intellectuals. Today, they’re either unemployed or retired; no one seems to need them any more. Their strength remains entirely unused."
G: " . . . beginning to doubt a little whether the untrammelled circulation of money around the globe, this madness that has broken out within neoliberalism, should go unopposed: for example, mergers without sense or purpose that result in two or three, or ten thousand people losing their jobs. Stock markets reflect only maximization of profits."
B: "Unfortunately, it’s not simply a question of countering a dominant discourse that preens itself as unanimous wisdom. To fight it effectively, we need to be able to diffuse and publicize a critical discourse."
G: "My understanding of narrative fiction was always . . . that it should tell a story from the point of view of people who do not make history, but to whom history happens: victims or culprits, opportunists, fellow- travellers, those who are hunted. . . . If we rely only on the documents of historians, we certainly learn a great deal about the victors; but the story of the losers is as a rule written inadequately, if at all. . . . [On TV talk shows a]midst all the blathering, the person who wins out is the one who talks longest or most completely ignores the others. As a rule, nothing of note is said because the moment anything becomes interesting, or issues come to a head, the anchor changes the subject."
B: " writers and thinkers today have been entirely dispossessed of the means of production and transmission; they no longer have any control over them, and must make their point in short programmes, by all manner of tricks and subterfuges."
G: " . . . what is astounding when you look at the course of history is how great an effect a minority can have. Of course, it has had to develop certain tactics, particular ruses, to make itself heard."
B: " . . . [in] the time of the Enlightenment. The Encyclopædia was a weapon that mobilized new means of communication against obscurantism. [n: deliberate obscurity or evasion of clarity.] . . . we should be trying to invent new ways of producing and conveying a message."
G: "Neoliberalism has adopted the deepest aspiration of anarchism . . . namely, to do away with the State altogether. Its message is: away with it, we’ll take over from here. In France or in Germany, if a necessary reform is to be carried out at all—and I’m speaking of reforms rather than revolutionary measures—nothing can happen until private industry’s demand for lower taxes is met, and the economy approves. This is a disempowerment of the State of which anarchists could only dream, and yet it is taking place—and so I find myself, as probably do you, in the curious position of trying to ensure that the State once again assumes responsibility, regulates society once more."
B: " . . . is it enough to demand a return to ‘more State’? In order to avoid falling into the trap laid by the conservative revolution, I think we have to invent another kind of State."
G: " . . . neoliberalism, naturally, only wants to do away with those activities of the State that impinge on the economy. The State ought to muster the police, to enforce public order—these are not the business of neoliberalism. But if the State is deprived of its power to regulate the social sphere, and of responsibility for those—not only the disabled, children or the elderly—who are excluded from the process of production or not yet involved in it, if a form of economy spreads that can escape any sort of accountability by flight forward into globalization, then society must intervene to restore welfare and social provision via the State. Irresponsibility is the organizing principle of the neoliberal vision."
B: " . . . I once wrote a critical analysis of Heidegger’s rhetoric, which has been wreaking havoc in France until very recently."
G: "That the foggy thinking which had such fateful consequences in Germany should be so admired in France, is a rich absurdity."
G: "Left trade unionists, who were otherwise progressive in every respect, believed jobs were at risk as soon as ecological issues were raised—an outlook that persists to this day. . . . It must be understood that ecological issues cannot be separated from issues of work and employment, and that all decisions have to be environmentally sustainable."
B: "Europeans are, deep down, ashamed of their civilization, and no longer dare to uphold their traditions. The process begins in the economic sphere, but gradually extends to the realm of culture. They are ashamed of their cultural traditions, they experience a continual guilt at defending traditions that are perceived and condemned as archaic—in the cinema, in literature, and elsewhere. . . . It is becoming increasingly difficult to resist a kind of superficial modernism, typically coming from the Anglo-Saxon countries, which represents itself as transcending older forms, while regressing well behind any of the artistic revolutions of the twentieth century."
G: " . . . the shared European process of the Enlightenment. Matters were different before nation-states became so dominant. The French took notice of what happened in Germany, and vice versa; . . . both minorities struggling to spread Enlightenment, against their respective censorships."
B: " . . . if we are to resist the destruction of what we associate more generally with the Enlightenment—scientific and technological progress, and control over that progress. We need to invent a new utopianism, rooted in contemporary social forces, for which . . . it will be necessary to create new kinds of movement."
B: "Today, since it is in crisis, the social movement as a whole is more open, more responsive to criticism, and becoming much more thoughtful. Suddenly, it is much readier to welcome new kinds of critique of our society that encompass it as well. These critical, reflective social movements are, in my opinion, the future."
G: " . . . I see little inclination or interest in continuing the Enlightenment tradition of speaking out, of getting involved. If there is no-one to relieve us, in the best sense of that word, then this part of a good European tradition will be lost." ... [more]
4:33:16 PM Google It!
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"he European Union and the United States are robbing the world's poor of billions of dollars each year in export earnings by preaching free trade while protecting their own markets, development campaigners claim today."
"While the anti-globalisation movement has identified trade as a leading cause of the widening global inequality, Oxfam says that trading rules are the problem, not trade itself. 'In itself trade is not inherently opposed to the interests of poor people,' the report says. 'Well-managed trade has the potential to lift millions of people out of poverty.'"
"Oxfam ranks Europe first according to an index which measures protectionism by the world's biggest trading powers, followed by the US, Canada and Japan. They impose the highest trade barriers against the industries of most importance to poor countries: agriculture and textiles. . . . The EU and the US spend billions of dollars each year subsidising their farmers and protecting them from more efficient producers in the developing world. The surplus cheap produce is then exported to developing countries, wiping out local farmers' livelihoods. Oxfam estimates that they export their farm crops at prices more than a third lower than the cost of production."
"By posing as free traders while protecting their own industries, rich countries are forcing poor countries to open their markets to western goods, using their control over the World Bank and the International Monetary Fund. Poor countries which borrow from the IMF and the bank are forced to cut subsidies and tariff barriers as a condition of receiving aid. 'Poor countries have been opening up their economies much more rapidly than rich countries,' Oxfam says. 'Average import tariffs have been halved in sub- Saharan Africa and south Asia, and cut by two thirds in Latin America and east Asia.' In many cases, it says, rapid liberalisation has harmed poor countries by exposing their industries to competition before they are ready to take on more efficient producers." ... [more]
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" . . . the administration's policy has come down to pressuring Israel, while giving a free ride to Arafat and the terrorists he directs. . . . "
"The Bush Administration . . . convinced itself that it was necessary to seek a cease-fire between Israel and the Palestinians. . . . the secretary's trip . . . risks undermining the president's credibility."
"Right now, Israel's goal should be to destroy the terrorist infrastructure that has been supported and protected by the Palestinian Authority. In the war on terrorism, that must be America's goal, as well." ... [more]
2:48:26 PM Google It!
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"The United States trade representative, Robert B. Zoellick, urged Japan to revive its economy through structural reforms, not exports. At a news conference in Tokyo, Mr. Zoellick said, 'I hope Japan does not once again simply rely on export growth to try to come out of this difficulty because ultimately that will be a mistaken strategy for East Asia, which will have to deal with the currency policies of Japan.'"
2:14:35 PM Google It!
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"The predominant theory about suicide bombing is the 'cycle of violence': The more aggressive Israel acts, the more Palestinians will blow themselves up in retaliation. . . . Palestinian violence against Israel predates the occupation of the West Bank and Gaza, and the current suicide campaign began after Israel offered generous territorial concessions at Camp David."
"The effectiveness of cutting off Palestinians from Israel has been confirmed by none other than the Palestinians themselves."
"The more serious worry is that Sharon's offensive may kill off any chance for peace with the Palestinians. . . . If you accept the premise that the current operation can reduce . . . suicide bombings, how can Israel be expected to pull back? Doing so would essentially ask Israel to permit its civilians to be murdered and terrorized in the short run in the vague hope that it would bring benefits in the long run. No nation would accept a calculus like that, nor should we ask Israel to do so." ... [more]
7:26:34 PM Google It!
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'"'The economy is still in a severe situation, but it is showing movements toward bottoming out,'' the Cabinet Office said in its report for April."
"'Exports and industrial production are almost bottoming out,' the Wednesday report said, lifting its assessments of both these key components." ... [more]
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"A revolt against leadership at the state- owned oil monopoly spiraled into a national crisis after Venezuela's largest business and labor groups extended a general strike indefinitely. The labor strife has seriously affected oil exports in Venezuela, the world's fourth-largest oil exporter and the No. 3 supplier to the United States."
... [more]
1:53:33 PM Google It!
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Thursday, April 11, 2002 |
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Review of Our Posthuman Future by Francis Fukuyama
" . . . history's central question — that of what kind of society best suits human needs — has been settled only if human nature remains as it is, warts and all."
" . . . [In] The End of History and the Last Man," . . . he argued that with the demise of communism, liberal democracy had emerged without rival as a political system with universal appeal. The challengers of this tempting thesis included Samuel P. Huntington of Harvard, who argued that struggles between the world's major cultural groups would predominate in a post-Communist world. [His new book acknowledges] that history cannot end without an end to science, or at least to science that alters human nature."
"Human nature 'is fundamental to our notions of justice, morality and the good life.' By messing with the human genome in order to enhance intelligence or physique or other desirable qualities, biotechnology may cause us 'to lose our humanity — that is, some essential quality that has always underpinned our sense of who we are and where we are going,'"
"[In The End of History h]e argued that history was not a meaningless cycle but had a direction imposed on it by the logic of modern science, a direction that 'would seem to dictate a universal evolution in the direction of capitalism.' Though the advanced industrialization made possible by science and technology does not necessarily lead to political liberty, Dr. Fukuyama wrote, the human desire for recognition, cited by Hegel as the driving force of history, is best satisfied in a liberal democracy."
"As to his critics, he agrees that culture is important but does not consider the fault lines between the seven civilizations identified by Dr. Huntington as likely to be permanent. Dr. Fukuyama believes that liberal democracy, because of its affinity with human wants and desires, holds universal appeal. It evolved in Western Europe but is no more a necessarily European possession than is modern science."
"'The Western modernizing package gives access to a standard of living everyone wants . . . Many don't want the whole package. They want a job, not necessarily Hollywood. But there is a certain logic to modernization — to have the TV you have to have certain institutions, including the rule of law.'"
Though religion and culture can impede modernization, Dr. Fukuyama sees no reason to suppose that the Islamic and other civilizations will not in time adopt their own versions of liberal democracy. 'The basic structure of world politics continues to be the juggernaut of modernization as pioneered by the West,' he says." . . . though he credited science and technology for giving history its forward direction for the last 500 years, he says he is much less certain that biotechnology will be handled with the same wisdom as previous innovations." ... [more]
12:21:48 PM Google It!
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"Japan's creaky financial system narrowly avoided a meltdown in the last fiscal year, which ended March 31. But the new year has begun with one fiasco after another."
"Most damaging of all, though, have been the enormous computer snarls over the last week at Mizuho Holdings, the world's largest banking group. 'We are doing our utmost to make the system operate in a stable manner,' Mr. Maeda said, explaining that the problems were not malicious in nature and had little chance of recurring. He said the bank would need another week or so to correct them all and to iron out 2.5 million pending transactions."
"'Banks' own forecasts have not been a useful guide' to their actual performance' . . . "
"Few Japanese have personal checking accounts; instead, consumers rely on banks to transfer money electronically from their savings accounts to pay their rent, utility bills and other obligations." ... [more]
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" . . . the political volatility that bedevils supplies from the Middle East, the West's appetite for energy sources far removed from the turmoil will probably remain high for years."
" . . . this remote spot and, more to the point, its vast gas, oil and condensate reserves, are a crucial part of an effort by the government to turn the energy-rich country into a major oil producer in the next 10 years."
"Currently, Agip [Italy] and the BG Group [British Gas] each own 32.5 percent of the Karachaganak Integrated Organization, the venture that operates the field, while ChevronTexaco has 20 percent and Lukoil [Russia] 15 percent."
"Next year is expected to be the long-awaited breakthrough for the field, which so far has been cut off from international markets because of a lack of pipelines to transport what it produces out of landlocked Kazakhstan. A 394-mile oil pipeline is expected to be completed in 2003, connecting Karachaganak with the export pipeline that runs from the Tengiz field to Novorossiysk, a Russian port on the Black Sea."
... [more]
4:37:02 AM Google It!
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Many Asian economies have started to turn the corner, after the sudden downturn most experienced last year. But some are better-equipped to deliver sustainable non-inflationary growth than others—and higher oil prices could yet knock everyone back
"Now, once more confounding the forecasters, the signs of recovery are there again. And they have arrived sooner and apparently stronger than looked possible just a few months ago. But is East Asia able to say good-bye to this roller-coaster of growth? Probably not, in the short-term at least. Like most emerging-market economies, those in East Asia are bound to remain vulnerable to global economic trends."
"There is considerable optimism about growth prospects this year and next, and growing confidence about the willingness and ability of many economies to undertake the reforms needed for sustainable growth in the future. In the short-term at least, the brighter regional prospect owes much to America’s surprising rebound."
" . . . pessimism about the region has, arguably, been overdone. Japan, once seen as the engine of Asian growth, remains stuck in its third recession in a decade, its policymakers behaving like rabbits caught in the glare of oncoming car headlights, unable to get to grips with the massive structural reforms needed. Yet while a healthy Japanese economy would bring undoubted benefits for its regional neighbours, its sluggish performance has done less damage than might have been expected. In contrast, China, the other regional economic giant, has continued to display impressive growth. But this too has turned out to be less harmful to the smaller regional economies than many economists expected. Instead of suffering from the effects of competition with China, its neighbours are benefiting from the demand which China’s continuing expansion has generated. So, while the pessimism may have been overdone there is now a clear risk of over-optimism."
" . . . the past five years have seen little improvement, if any, in per capita incomes. The current modest upturn should be an opportunity for them to press on with the economic reforms which many of them still need to carry out: to diversify their economies, make them less reliant on one sector, and restructure their financial sectors. What’s more, recent events in the Middle East could undermine even the fragile recovery many Asian economies hope for. The rise in oil prices, and the month-long embargo imposed by Iraq on its oil exports, is of particular concern to a region so dependent on oil imports for its energy needs." ... [more]
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Wednesday, April 10, 2002 |
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"A government investigation has found that losses related to bad loans at Japan's 13 major banks are likely higher than previously thought, a newspaper reported Tuesday. The Financial Supervisory Agency discovered the figure to be $15.2 billion more than the $49.2 billion estimated in September ... "
"The Japanese government estimates there are $323 billion in bad loans throughout Japan's banking system. Private analysts say the figure could be much higher. The government is promising to clean up the bad debts in three years, a move task analysts say is necessary before Japan can begin to emerge from its decade-long economic slump." ... [more]
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"A six- week tussle over President Hugo Chávez's management of the state oil company has turned into his most serious crisis, with exports of oil disrupted by a labor slowdown and a general strike called for Tuesday by labor and business leaders."
"Government ministers said today that exports of oil and refined products remained normal for Venezuela, the world's No. 4 exporter. But analysts and executives from Petróleos de Venezuela said a five-day work slowdown among oil workers and managers had forced a scaling back of operations at several refineries and a cutback in production at wellheads, all of which has disrupted oil shipments to the United States and other countries."
"The showdown that has churned up the current crisis began when Mr. Chávez, a left-leaning former army paratrooper who won office in 1998, took on the management of Petróleos de Venezuela, a behemoth with 40,000 employees. Calling it a 'state within a state' that sapped resources while benefiting a small number of high-flying executives, Mr. Chávez in February fired the company president, a general whom he had appointed months earlier, and appointed five board members with ties to his administration."
" . . . the Amuay Cardón refinery, which processes 950,000 barrels of crude daily and is a crucial supplier of finished oil products to the United States, had reduced operations. At least two other installations, the Palito refinery on the north-central coast and Puerto La Cruz to the east, halted operations . . . "
"Through it all, Mr. Chávez has refused to back down or acknowledge that the slowdown could hurt Venezuela, whose economy relies on oil for 80 percent of exports and 50 percent of government revenues." ... [more]
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Thursday, March 21, 2002 |
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March 20, 2002
" . . . the Israeli-Palestinian theater. This is our dilemma there: Israel cannot stay in the occupied territories and remain a Jewish democracy. But the Palestinians cannot yet be trusted to control these areas on their own if Israel withdraws. . . . Israelis and Palestinians do not have the resources, or mutual trust, ever to find their way out of this problem alone . . . And the U.S. can no longer afford to just let them go on killing each other. It will undermine America's whole position in the Middle East, as more and more Muslims will blame us for what Israel does to protect itself."
" . . . the escalating friction between the Israeli and Palestinian forces is enabling Palestinians to steadily improve their military skills."
"Israel can . . . not alter its central dilemma — it can't stay in the territories and remain a Jewish democracy and it can't just leave and stay alive as a Jewish democracy." ... [more]
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Wednesday, March 20, 2002 |
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"When the White House decided it was time to address the rising tides of anti-Americanism around the world . . . Charlotte Beers' assignment was . . . to perform an overhaul of the U.S. image abroad . . . to work her magic on the greatest branding challenge of all: to sell the United States and its war on terrorism to an increasingly hostile world."
"Beers views the United States' tattered international image as little more than a communications problem. . . . the problem is: America's marketing of itself has been too effective. . . . [the world] expect[s] the U.S. to live up to its promises. . . . If they are angry, as millions clearly are, it's because they have seen those promises betrayed by U.S. policy. . . . they point to U.S. unilateralism in the face of international laws, widening wealth disparities, crackdowns on immigrants and human rights violations . . . The anger comes not only from the facts of each case but also from a clear perception of false advertising. . . . America's problem is not with its brand-- which could scarcely be stronger--but with its product."
"Successful branding . . . 'requires a carefully crafted message delivered with consistency and discipline.' . . . the values Beers is charged with selling are democracy and diversity, values that are profoundly incompatible with this 'consistency and discipline.' . . . At its core, branding is about rigorously controlled one-way messages, sent out in their glossiest form, then hermetically sealed off from those who would turn that corporate monologue into a social dialogue."
" . . . America's image problem, he complained that people don't have a single clear idea about what the country stands for, but rather have dozens if not hundreds of ideas . . . much of the anger directed at the U.S. stems from a belief . . . that the U.S. already demands far too much "consistency and discipline" from other nations; that . . . it is deeply intolerant of deviations from the economic model known as the 'the Washington Consensus.' . . . the U.S.'s critics generally feel that the world is already far too influenced by America's brand of governance . . . Unlike strong brands, which are predictable and disciplined, democracy is messy and fractious, if not outright rebellious."
"Its strongest 'brand attribute' . . . is its embrace of diversity, a value Beers is now, ironically, attempting to stamp with cookie-cutter uniformity around the world. The task is not only futile but dangerous: brand consistency and true human diversity are antithetical-- one seeks sameness, the other celebrates difference; one fears all unscripted messages, the other embraces debate and dissent. . . . Because as President Bush rightly points out, diversity and debate are the lifeblood of liberty. And they are enemies of branding." ... [more]
4:53:08 PM Google It!
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. . . the real challenge is to make foreign aid more effective
"n the past few days, Europe and America have been falling over themselves in the scramble for the title of most generous aid-giver."
... [more]
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"After decades of propping up despots and watching corrupt officials pocket billions of aid dollars, Western nations now insist they will only help poor countries if they look after their own people. The strategy of focusing anti-poverty spending on countries run by clean governments is a central theme at this week's U.N. aid summit in Mexico, attended by President Bush and around 50 other heads of state. It aims to reward good governments with more development money while showing corrupt or incompetent leaders they will only get assistance if they clean up their act."
"Since the Cold War ended, many governments, U.N. agencies and lending institutions have spent more of their aid money in countries where they are confident it will not be stolen and will be directed at health and education programs. But now they are taking the policy one step further -- telling other countries they will get even less money unless they root out corruption, make democratic reforms, encourage private business and focus on providing basic health and education services for the poor."
"Senior aid officials say the challenge lies in working out what to do with those countries where the government has no interest in carrying out reforms or others, like Somalia and Angola, where civil wars have torn society to shreds. Aid experts say donor nations will still respond to famine or help after natural disasters but will hold back on bigger development projects unless the government is on the list of 'performers'."
"'I am concerned that if the United States acts unilaterally, we may return to the Cold War activity of giving aid to our geopolitical allies' . . . "
... [more]
10:15:38 AM Google It!
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Tuesday, March 19, 2002 |
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Posted 2002-03-11
" . . . in spite of a ten-year recession, consuming is a crucial part of the national identity."
"'It's kind of like the image of the capitalist economy—the more desired it is, the more expensive it is . . . It cannot be accounted for rationally.' . . . 'In Japanese families, the ascendance of the father is the usual phenomenon, but after the bubble burst fathers lost their rights and respect . . . Fathers had to appease their children by giving them lots of gifts and money.'"
"The crucial element that is being sold . . . is scarcity. . . . They want to be seen wearing an item that hardly anyone else owns but that everyone will recognize as exclusive. . . . 'There is a word here, otaku, which is about being focussed and almost obsessed with something you like' . . . The word is now used to describe someone with a fanatical interest in computers or fashion. . . . 'They give Japanese youth a sense of self-confidence, and they represent something that doesn't have to apologize for the past.'"
"Japanese concepts of female sexiness: . . . men find kawaii girls sexy because they're pretty and decorative and unthreatening, but a girl can't be too committed to the kawaii [cute] aesthetic because men will think she's a freak. . . . Confusingly enough, the bodikon [body-conscious] look, which is all skimpy skirts and plunging necklines and high-heeled boots and other signifiers of hooker wear, is also understood to be an assertion of female independence. "Body-consciousness" is associated in the Japanese imagination with black women; and black culture is, among Japanese youth, taken to represent a kind of strength and sexuality . . . In Japan . . . feminism is still a new idea. . . . 'Almost all Japanese men suffer from a Lolita complex' . . . Girls capitulated to boys by choosing cuteness over beauty . . . 'Beauty indicates a distance which is not reachable, whereas something cute is something that is accessible.'"
"The Japanese tendency to detach style from content . . . the fact that Japan is essentially a classless society means that young people have no way to distinguish themselves . . . except by adopting Western-derived tribal identities—surfer, skater, biker, punk, raver— . . . an expression of an authentic Japanese experience: that of belonging to a society that until recently was extremely ordered and disciplined, but which, over the past decade, has grown more uncertain and unpredictable. . . . young Japanese people are increasingly becoming what are known as furita, people who work part-time and without job security . . . "
"Pacifist appropriations of militaristic chic were everywhere in Tokyo this fall . . . widespread Japanese unease with the American war in Afghanistan. . . . 'The message is antiwar' . . . "
"'Generally, Japanese people can't make up their own minds and have to have an example to follow.'" ... [more]
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"There will be no peace in the middle east until the people there actually want peace, and right now they're all too consumed with hatred. Neither side wants the US to mediate because they want peace; they want the US to mediate because they hope that US will bully the other side." ... [more]
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Monday, March 18, 2002 |
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March 17, 2002
"President Bush's speech on Thursday announcing a $5 billion increase in foreign aid for poor countries is important — not only as a substantive breakthrough for this administration, but also, one hopes, as a psychological one."
" . . . the president said our increased foreign aid must be conditioned on countries' improving their governance, rule of law, social safety nets, investment climates and anticorruption practices. We can't force elections, but we can use our aid to pressure developing countries to give their people more voice, more rule of law and a fairer slice of the pie, which are their people's real priorities. Here's a tip: The reason Islam seems like such an angry religion today is because so many Muslims are angry. The reason so many Muslims are angry is because most of them live under antidemocratic regimes backed by America, with lagging economies and shrinking opportunities for young people."
" . . . Muslim countries made up 20 percent of the world's population, yet only 4 percent of the world's trade."
" . . . Kyoto climate change treaty. . . . [ratification] would also send a hugely positive signal to the world — that America understands that if it's going to have lasting allies in a global war on terrorism, it has to be the best global citizen it can be. The attitude that we are entitled to consume 25 percent of the world's energy, while we're only 4 percent of the world's population, is obnoxious. Selfishness and hubris are a terrible combination."
"Mr. Bush has repeatedly told the world: If you're not with us, you're against us. He needs to remember this: The rest of the world is saying the same thing to us." ... [more]
"To the Editor:
Thomas L. Friedman ('Better Late Than . . .,' column, March 17) finds it 'obnoxious' that Americans 'consume 25 percent of the world's energy, while we're only 4 percent of the world's population.'
Americans produce 31.5 percent of the world's output — including food and pharmaceuticals exported to foreign countries. What's so obnoxious?
DONALD J. BOUDREAUX
Fairfax, Va., March 17, 2002
The writer is chairman of the department of economics, George Mason University."
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March 17, 2002
" . . . the World Bank and the International Monetary Fund . . . [were] Created 57 years ago to reduce poverty and to stabilize foreign currency markets . . . calls for reform and accountability at the World Bank, which has recently been accused of squandering billions on ineffective projects. The I.M.F. will also have much to answer for."
"The decades-long debate over the role of the bank and the fund heated up in 1997 . . . Since Sept. 11, as rich nations have focused on resentment in the developing world, matters have grown more urgent. . . . Both now say they are improving their performance through internal reforms, even as they also grasp for new responsibilities. But the world's hunger for radical change — in terms of which countries receive aid, how much is made available and how it is distributed — could overtake their efforts."
"The World Bank . . . in the past focused on building dams, paving roads or wiring electricity grids but now deal more with improving health and education. The I.M.F. sends teams of economists, with billions in loans, to rescue countries facing financial crises. . . . The I.M.F., meanwhile, has been under attack for its handling of the crisis in Argentina. Despite billions in aid and advice, the country defaulted on about $141 billion in public debt, froze private bank accounts and devalued the peso, instantly destroying the purchasing power of millions of families and resulting in mass unemployment, hunger and civil unrest. Economists say the situation shows just how little the fund understands economic fundamentals of many countries."
"Like an emergency room doctor who gives every patient an appendectomy regardless of the symptoms, the institutions treated almost every developing nation the same — with a package often referred to as "structural adjustment." Usually, in return for aid, they imposed strict budgetary discipline, the ending of subsidies for food and other basics, increases in the cost of public services like health care and the elimination of trade barriers. With so many changes coming at once, depressed economies struggled to grow as imports flooded in and traditional industries collapsed. Sometimes, poverty worsened. . . . 'The signals came from outside the World Bank that things were not going all that well, that the structural adjustments policies were not delivering what everyone hoped' . . . "
"CRITICISM of the bank and the fund peaked in 2000, when a commission organized by Congress and headed by Allan H. Meltzer, a professor of economics at Carnegie Mellon University, released a report calling for wholesale reform of both institutions, especially the World Bank." ... [more]
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"Meanwhile, my good friends the French are proceeding to prove that when a democracy reaches the point where more voters are receiving benefits from the government than are paying taxes, that they will then proceed to vote for ever rising benefits and will destroy their own economies through out-of-control social spending. Living on memories of past glory, they are like old men sitting in a tavern, grumbling into their cups about how they used to be big and strong and virile, remembering how important they were when they were younger. And they are doing their best now to try to make the rest of Europe the same way, and there's a good chance they will succeed and will convert the entire economic block into a declining has-been. What used to be a lot of small nations who could make their own decisions and maybe do well on their own will become a single confederation caught in political and bureaucratic gridlock. Europe is probably fucked, too." ... [more]
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"Makiko Tanaka, the popular politician who was fired as Japan's first female foreign minister, delivered a scathing attack . . . "
... [more]
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March 18, 2002
"Japan's currency shed two yen against the dollar on Monday, its biggest one-day drop in almost six months, as a slide in Tokyo stocks fueled concern that recent capital flows into Japan have started reversing."
... [more]
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Sunday, March 17, 2002 |
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"Prime Minister Zhu Rongji, entering the final year of his term, touted his record of economic achievement today but called the low incomes of 800 million rural citizens a 'big headache.'"
"He is almost certain to step down next March along with several other high officials."
"Mr. Zhu appeared ready to stake out his legacy . . . He described his government's economic record as remarkable . . . worry that large- scale deficit spending, which the government has used to prop up growth through recent tough years, might endanger stability. . . . Continued growth without inflation . . . proves that 'our fiscal policies have been just right.'"
" . . . the biggest single challenge, he said, was bolstering the incomes of farmers, many of whose incomes have stagnated or declined in recent years, even as an urban minority becomes wealthy. . . . American agricultural goods will enter 'on a large scale' . . . so Chinese farmers will find prices falling further." ... [more]
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Saturday, March 16, 2002 |
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" . . . Europe's perennial unwillingness to spend more for defense has undermined its credibility with the United States and damaged NATO as a military alliance . . . "
"America's global responsibilities, matched with sizable and growing investments in high-technology warfare, from satellite communications to Predator drones, are leaving even NATO's most gung-ho European members farther behind. . . . European governments sense that they are increasingly becoming second- rank powers, unable to affect American foreign policy goals because they can bring too few military assets to the table."
" . . . warns the Europeans of a choice between "modernization or marginalization." . . . 'Without dramatic action to close the capabilities gap, we face the real prospect of a two-tiered alliance.' There is a risk . . . that the alliance 'is so unbalanced that we may no longer have the ability to fight together in the future.' . . . the gap between the Americans and the Europeans is reaching a critical point."
"Devastated by military conflict in the 20th century, Europe prefers to spend its money on social welfare at home and aid to poor countries abroad. The European Union provides 56 percent of the world's aid and 36 percent of the budget of the United Nations. Britain and France are serious military and nuclear powers, but the United States is about to move into warp speed. . . . bring the military budget to $379 billion. That figure exceeds the total military budgets of the world's next 14 biggest defense spenders put together. . . . there is an implicit division of labor within NATO — the Americans fight, and the Europeans clean up and keep the peace . . . "
" . . . the Europeans could restore and maintain political credibility only by living up to their promises of increased military strength. Now . . . the United States is the power that fights, the United Nations feeds and the European Union finances, while European soldiers . . . keep the peace. "
" . . . in the end, 'the European allies will do it — they know they have to do it.'" ... [more]
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Friday, March 15, 2002 |
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11/03/2002
"IT is funny how often we work ourselves up over a particular issue, only to discover something more important is going on behind our backs."
"Almost unnoticed, the dynamics of the world energy market have changed dramatically since the terrorist attacks on America . . . Russia has suddenly emerged as the new oil superpower. . . . A pointless trade war over steel is possible. But more likely is an oil war in which the main players, battling it out for supremacy, will be Russia, Saudi Arabia and the West."
"Russia is expected to knock Saudi Arabia off the number one spot this year, producing between 8.5 million and nine million barrels of crude a day. As a reward for this, and the use of military bases in central Asia, Washington has turned a blind eye to the butchery in Chechnya. . . . the latest figures show that in February Russian production was actually up 20 per cent. . . . Mr Putin, who has manoeuvred himself into a commanding position. He is popular in Russia. Its backward economy is booming. He has reformed the tax code . . . begun land reform. . . . paid back some government debt."
"One reason the Pentagon wants to go for Saddam Hussein is to reduce America's dependence on the Saudis by putting Iraq's oil reserves into friendlier hands. But they cannot move without Mr Putin's say so." ... [more]
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Thursday, March 14, 2002 |
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America's new place in the world's shrinking geography:
" . . . at the turn of the twentieth century the western frontier--and free land in particular--was the guarantor of American democracy . . . because taming the land was an eminently practical task, ideology had a marginal effect on this emerging American life, compared to that of Europe."
"Through most of the twentieth century, oceanic distances were formidable enough to secure America's virtual monopoly over its large internal market in an age of industrial expansion and economies of scale.
Oceans also protected the United States from the devastations of the First and Second World Was, giving us a relative advantage over Europe and Asia that allowed for the 'American Century.' Our protected landmass with its abundance of natural resources was an ideal setting for the Industrial Age, whose passing has only recently begun.From the end of the Civil War to 1973, the U.S. economy, largely insulated from foreign competition, grew at an average rate of 3.4 percent annually, excluding inflation. The real wage nearly doubled from one generation to the next, so that the American Dream in these years came true and optimism was the official American religion."
"But now we face the loss of the protection that geography once provided. Because the United States has been so overwhelmingly a creature of geography, in the twenty-first century shrinking distances will affect us more than they will our competitors, whose economic development never depended on continental isolation." ... [more]
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March 14, 2002 04:04 AM ET
"Japan's government upgraded its assessment of the economy Thursday for the first time in nearly two years, detecting some signs of bottoming out amid severe conditions. 'The economy is still in a severe situation, but some signs of bottoming out can be seen,' the Cabinet Office said in its monthly report on the economy for March. The report reflected budding hopes that rebounding demand overseas might boost Japan's economy, which slipped deeper into recession in the three months to December as gross domestic product shrank at a 4.5% annual rate. It was the first time since June 2000 that the government upgraded its economic assessment. "
"'Exports are bottoming out, and there are signs that production is bottoming out . . . The leveling-off of exports, which plunged last year and dragged Japan deep into recession, is helping to put a floor under industrial production. . . . the inventories-shipments ratio has fallen, a sign of tighter supply-demand conditions. . . . Japan's current account surplus grew for a fourth straight month in January, ballooning 224% to 709 billion yen ($5.48 billion) - much wider than expected. . . . Personal consumption, which accounts for more than half of GDP, is flat, the government said, upgrading its assessment from February, when it said spending was weakening. . . . wholesale prices are falling at a slower pace, a sign deflationary pressure has eased a bit thanks to a weaker yen."
"Still, Japan's economy isn't out of the woods yet. . . . corporate capital spending, the second-biggest chunk of the economy. . . . is 'falling sharply' . . . the grim view also reflected indications investment will keep falling well into autumn. Machinery orders . . . dropped a record 15.6% on month in January on the back of two straight quarters of declines. . . . the outlook remains clouded by high unemployment and falling wages. Employment conditions are sure to worsen in months ahead as companies cut payrolls to restructure their operations or simply fall victim to the severe economic conditions." ... [more]
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March 14, 2002
"While Japan has had the world's fastest- growing major stock market this year and the yen has jumped nearly 3 percent against the dollar in the last month, a small but growing number of Japanese investors are preparing for the worst and hoarding gold. With limits looming on bank deposit insurance, banks tottering under bad debts and the government printing money in an effort to create inflation, sales of gold are expected to come close to quadrupling this quarter, compared with the period last year . . . In February . . . his gold sales were seven times those in February last year."
" . . . consumer unease about the direction of the yen, the economy and the banks. . . . On April 1, federal insurance on time deposits, currently unlimited, is to be restricted to $75,000 for each account . . . "
"This month, the yen has strengthened as Japanese companies have repatriated assets to close their books for the end of the fiscal year, March 31."
"Some investors, particularly younger people, are also shifting into dollars and euros . . . That shift is still relatively small . . . "
"In a regional consumer confidence poll released last month by MasterCard International, the Japanese ranked as Asia's biggest pessimists."
"[A gold trader] discounted this week's run- up of the yen and Tokyo stock prices, saying Japan remained economically weak. 'The reasons for buying gold are not going to go away in a hurry.'" ... [more]
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Wednesday, March 13, 2002 |
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16 January 2002
To travel through the ‘developing’ lands during the current war is to encounter a level of anger and protest against the West that reveals a core fissure in global politics. Not the terrorist challenge to the civilised world, but rising opposition from communities across the globe to the stifling embrace of materialist consumerism.
"I have seen and heard intelligent people driven by some hatred of the West and of America, symbol of its power, lauding, defending or justifying the actions of a mass murdering Saudi millionaire who they had probably never heard of last August, and still know next to nothing about. . . . Perhaps those pictures of . . . Islamic people apparently celebrating on 11 September have made it clear to you that the anger at America and its allies runs deeper than imagined."
"Perhaps too, though, this undercurrent of resentment and hatred which people all over the world continue to feel for the West and all that it represents is something more than that. Something deeper. Something that showers of neither money nor bombs can solve. If so, what? . . . it may be, still, that this has something to do with an aspect of globalisation, and the opposition to it, which is rarely mentioned, but which may even be the key to the whole puzzle: something called culture. Something which is mostly unseen, taken for granted, ill-defined, until it is threatened, and which then has the power to create more discord, rebellion and opposition than mere economics ever could."
" . . . we have talked about a clash of world views – of cultures – that has been sparked by the new wave of corporate capitalism unleashed over the last two decades. This clash is between two distinct forces. One is a fundamentally materialistic world view, driven by multinational companies, politicians and their handmaidens in multinational agencies like the World Bank, WTO and IMF. It sees people as consumers, nations as markets, the natural environment as a bundle of resources ripe for profitable extraction and unique, ancient cultures as demographics. The other is a vast, massing, often confused but potentially hugely powerful collection of opponents, numbering tens of millions around the world, who see life in quite different terms.
This may represent a real clash of civilisations; a clash between the destructive, homogenising force of the West’s capitalist economic model, and the diverse, varied, hectic alternatives that every day are destroyed by it. . . . the West and its increasingly smug politicians had better start realising what they are up against, before their whole edifice comes tumbling down."
" . . . centres of resistance to the global economy all over the world. . . . What ties them all together, though, is that idea of culture. Partly a defence of their traditional cultural values which are so alien to the West; close communities, shared land, utterly different conceptions of nature, work, family, time, which the global economy must destroy in order to expand its markets and thrive. But also, more broadly than this, a collection of values which might be called a global culture of resistance . . . "
"What might these values – this alternative culture – be? . . . some themes are clear. Opponents of the neoliberal machine believe in diversity – cultural, individual, ecological, economic – over homogeneity. They believe that one global model can never fit all, and talk . . . of 'a world in which many worlds can fit'; the precise opposite of the McWorld that globalisation is imposing. They believe in certain common aspects of life which cannot and should not ever be commodified or privatised by global economic interests; water, agriculture, the airwaves, the atmosphere, traditional knowledge, biological diversity, gene lines and more; a concept some call the “global commons”. They believe in communities exercising their own form of democracy and gaining genuine control over their land and resources. They reject centralisation and tend to be suspicious of both big government and big corporations, and of traditional ideologies, left or right. All this they sum up in their most well-worn slogan: 'Our world is not for sale.'"
" . . . the growing opposition to an economic model which is eating them alive. It represents a frustration felt by millions, and may provide an alternative to celebrating mass murder as the only outlet for kicking back at the West. This looks increasingly like a new culture in the making; a global culture, formed of many, many older ones, which is heading straight towards the culture of neoliberalism at breathtaking speed."
"When – if – they collide, we could see what a clash of civilisations really means. . . . no-one involved really knows how it will be resolved. But it will have to be, and with real change, for the tens of millions of dissenters are not going away anytime soon; indeed, their numbers are growing all the time. And whatever the powerful try or say, they will not be shut up or shut out. They have far, far too much at stake." ... [more]
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March 13, 2002
"In Japan's well- orchestrated economy, few things happen entirely on their own, including stock market rallies."
"Part of the revival has come from a surge in the number of share repurchases by listed companies. . . . the biggest reason for the recovery, and for the ensuing debate, is the government's effort to stem short selling, a common practice involving bets that stock prices will fall. At the end of 2001, investors betting that Japanese stock prices would decline outnumbered those who expected a recovery. . . . The government is also said to be increasing its stock buying operations"
"Underlying the strategy is the fact that Japan's debt-laden banks hold trillions of yen in stocks that are counted as part of their capital base. The lower the stock prices fall, the larger the losses of the banks. And with the close of the fiscal year just weeks away, the government wants to push prices as high as possible to stave off a March crisis. . . . the moves have laid bare the government's real intention: to prop up political bedfellows and put off difficult long-term reform, despite the promises of Prime Minister Junichiro Koizumi." ... [more]
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Tuesday, March 12, 2002 |
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11th March 2002
NewStatesman (UK)
"Much of the intellectual left in Europe cleaves to a view of America as the largest danger in the modern world."
" ... the position of Francis Fukuyama, in his End of History and the Last Man - that the values derived from the American revolution represent the highest achievement of political economy and that there can now be no credible challenge to them."
" ... the war has exposed a division in Europe's left: between the decent left, which is on the side of those willing to fight Islamic fascism, and the rigidly anti-American left. The latter is willing to push all else aside in order to give free way to a refurbished critique of imperialism, in which the US plays the dominant role ... 'America finds itself facing an ideological enemy that may turn out to be harder to defeat than militant Islam: that is to say, anti- Americanism, which is presently taking the world by storm.' [see Rushdie] ... on a recent visit to the UK ... it became quite obvious that people in the upper social echelon thought that the US was being too self-righteous."
"The American left - powerful in intellectual, cultural and media circles, if not in politics - is either for the war, or silent ... "
"Powerful states, notably the US and China, see sovereignty as a non-negotiable right - the US, to the point of refusing to accede to the International Criminal Court lest a US soldier or official be brought to trial in a foreign jurisdiction."
" ... nothing has been written into international law, or UN practice, that gives sanction to larger interventions, especially those undertaken without the moral force provided by a prior strike. ... 'It would be easy ... for America, in the present climate of hostility . . . to start . . . throwing its weight around without regard for the concerns of what it perceives as an already hostile world.'"
"'a new politics' of engagement emerging ... It is a politics that at least promises to redefine national interest to include the halt of mass murder. The left, instead of dismissing all actions and rhetoric of Bush, Blair and Schroder as those of hypocritical imperialists, should hold these leaders to their words. If, as the left has long believed, genocide, oppression and aggression should be fought, its task is to ensure that politicians who endorse these aims live up to them." ... [more]
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Mar 11th 2002
"George Bush has said the world should “take seriously the growing threat of terror on a catastrophic scale” if terrorists get hold of weapons of mass destruction. He spoke as America’s plans for action against Iraq and leaked details of a new policy on the use of nuclear weapons have given rise to jitters about America's new military assertiveness"
" ... three reasons why the Nuclear Posture Review ... has caused nail-biting among some of America’s allies ... First, in listing ... two ... that are not known to be pursuing nuclear- weapons programmes ... America ... [previously] has pledged not to mount a nuclear attack against any country that has no nuclear arms. ... Second ... the Review ... impl[ies] America might be more ready to use nuclear weapons than had been thought. ... Third, the Review envisages the development of new, tactical nuclear weapons with smaller warheads ... This gives rise to the worry that the distinction between conventional and nuclear warfare would be blurred, leading to a lower threshold for a nuclear attack, and thus to the undermining of the global non-proliferation regime."
"Most of the worries raised overseas by the Review are overblown. ... The main purpose of America’s huge nuclear arsenal remains that of deterrence. ... The more likely America’s foes think its nuclear weapons are to be used, the greater their power to deter." ... [more]
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Monday, March 11, 2002 |
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New Statesman (U.K.)
George W Bush's unlikely bedfellows
Monday 11th March 2002
"But Hitchens sees, among the generation whose most active spirits were far leftists, 'a new politics' of engagement emerging ... It is a politics that at least promises to redefine national interest to include the halt of mass murder. The left, instead of dismissing all actions and rhetoric of Bush, Blair and Schroder as those of hypocritical imperialists, should hold these leaders to their words. If, as the left has long believed, genocide, oppression and aggression should be fought, its task is to ensure that politicians who endorse these aims live up to them. "
... [more]
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In war, grownups can't play silly games
March 10, 2002
BY MARK STEYN SUN-TIMES COLUMNIST
"Six months on, it's clear that, in the ops room, the grown-ups are in charge: Bush, Rummy, Condi. The downside, alas, is that on the non-war fronts the Bush presidency has died. The education bill is a joke, and last week's steel tariffs are a disgrace. They've caused particular outrage among the only two allies who matter, Britain and Russia."
"But most presidents get to pick their priorities. Bush has no choice in his. If Byrd wants to know the "end game," here's a few signs of how things will look when it's over:
*Regime changes in Iraq and Iran.
*The liquidation of Saudi Arabia, with the territory partitioned between Jordan and the less unenlightened Gulf emirs.
*The dissolution of NATO: America needs to stop overguaranteeing European security. For one thing, it allows EU governments to fritter their revenues on lavish welfare programs that allow young Arab immigrants to sit around plotting terrorism at the taxpayer's expense.
*The embrace by the Middle East of the same reforms Turkey embarked on 80 years ago."
"In other words, these are early days, and there are plenty of horrors to come. It's war, there's more, get used to it." ... [more]
2002/09/11
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March 10, 2002
Argentina Pleads for Loans, Latin America Worried
"Argentina pleaded for renewed international financial help on Sunday to overcome its deep economic crisis, warning of more social and political upheaval if rescue loans are not forthcoming."
"'It is continuity or anarchy. That is the risk we see' ... the depth of the Argentine crisis was such that he fears an outbreak of violence if it is not solved soon."
"Argentina will ask international creditors to take a loss when they sit down to renegotiate their share of Argentina's strapping debt ... talks with creditors must wait for an IMF deal." ... [more]
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Sunday, March 10, 2002 |
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March 9, 2002
THE ARABS
Cairo Conferees Demand International Action Against Israel
"The Saudi foreign minister, Prince Saud al-Faisal, called today "Black Friday" because of the high Palestinian death toll, and Arab foreign ministers demanded that the United States and the United Nations intervene immediately to restrain Israel's actions in the West Bank and Gaza."
"'Bin Laden, bin Laden, hit Tel Aviv!' and 'No to a peace settlement!' chanted some 2,000 protesters at Al Baqaa refugee camp outside Amman, in one of three rallies held around the Jordanian capital."
"Arab satellite television channels broadcast images of the violence, repeatedly showing morgue drawers opened to display the bodies. ... The television stations gave prominent coverage to accusations by Palestinian medical groups that the toll today was higher than usual because the Israelis would not let ambulances reach the scene of the clashes. Video of an Israeli tank crushing two Palestinian ambulances was shown repeatedly, outraging many viewers."
| "'Operation Root Treatment' was launched on February 28 in the big refugee camp of Balata near the northern West Bank town of Nablus. At its first try, the Israeli command made two mistakes. One, the armed Palestinian nucleus was not placed under effective siege and, two, service vehicles, such as ambulances, food and supply trucks were allowed through. The wanted Palestinians took advantage of these loopholes to escape the noose – many in ambulances – and take refuge in the Nablus town center. When Israeli troops finally captured the camp, they found the birds had flown ... " ... [via Debka] |
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"Much of the blame was laid at the doorstep of the United States, which had, until this week, avoided criticizing Israel for several months as violence steadily mounted."
"'The only hope is war, whatever was taken by force must be returned by force ... We have been negotiating for the past 50 years, negotiation after negotiation without any results.'" ... [more]
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Wall Street Journal Editorial
"European elites witnessing the unilateral exercise of U.S. power in Afghanistan, the Philippines and now Georgia resemble the ex-smoker in a room with someone who still smokes. It reminds them, sometimes intolerably, of what they once were. For obvious historical reasons, Europeans, particularly Continentals, have bad memories of unilaterally exercised power and have long since concluded that the best way to contain war is the multilateral way."
"With this belief goes a nostalgia for a time when Europe was the center of the world. America's real power is a reminder that such times are past. The more anti-American European leaders see the construction of Europe not only as a means of containing the Continent's own enmities, but also of combating America's political, economic, cultural and even military power. Sept. 11 has made it more obvious than before that there is a disjunction between European aspiration and international reality, or, to put it more bluntly, between money and mouth. Europe cannot act, so comforts itself by exercising the right to complain."
"Just as we now know how important were the madrassas in Pakistan in poisoning young minds against the West, so we should recognize that a similar process, though less extreme, will take place in Europe, unless America leads the public advocacy of Western values." ... [via InstaPundit]
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Bush wants 25,000 UK Iraq force
Britain considers joint invasion plan
Sunday March 10, 2002
The Observer
"America has asked Britain to draw up plans for 25,000 of this country's troops to join a US task force to overthrow Saddam Hussein. ... In a move which reveals advanced US plans for the next phase of its war on terror ... United Nations inspections of Iraq's nuclear, chemical and biological weapons may not be enough to head off a new war in the Gulf. ... The request for such a large number of British troops shows the high stakes America is now playing for." ... [more]
11:39:09 AM
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March 10, 2002
Neighbors Urge Argentine Bank Aid By THE ASSOCIATED PRESS
"Latin American finance ministers on Sunday urged the international banking community to aid the Argentine government in its struggle to rebuild the region's third biggest economy, which has been shattered by four years of recession and a massive debt default."
"Only with international help could his government restore confidence and reverse a four-year slide that has seen the economy shrink 15 percent, cut industrial production by a fifth and the country's reserves by a half ... About a third of Argentines have no fixed job and 40 percent live below the poverty line. 'To get out of this crisis we need international support ... Support not only with words, but also with loans and funds.''' ... [more]
11:17:36 AM
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Saturday, March 09, 2002 |
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[China] In the red
Mar 6th 2002
China ... the government can celebrate continued rapid economic growth despite the global slowdown. But maintaining a breakneck pace of expansion is putting a huge strain on the nation’s finances
"[new budget] ... called for 7% growth in 2002, only slightly lower than last year despite the global economic slowdown and weak demand at home. Getting there will require yet another year of massive government spending that will push the budget deficit up to a record $37 billion ... [to] stave off worrying signs of deflation, by boosting demand and make up for the slowing growth of China’s export sector."
" ... government debt amounted to 16.3% of GDP in 2001 and the budget deficit a mere 2.7%. But these figures are misleading. ... [these] figures do not include bonds issued by the state-owned asset- management companies and bonds issued by the state-owned “policy” banks. Nor do they take into account non-performing loans in the state banking system or pension liabilities—both of which amount to colossal sums."
"Many officials believe that 7% growth is the minimum needed to create enough jobs to prevent serious social unrest. ... The livelihoods of millions could be damaged when China opens it markets to cheaper agricultural imports ... "
"the leadership was 'paying close attention to some long-standing, hidden financial risks' and trying to eliminate them. Progress is worryingly slow." ... [more]
1:35:59 PM
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March 10, 2002
Secret Plan Outlines the Unthinkable
A secret policy review of the nation’s nuclear policy puts forth chilling new contingencies for nuclear war.
"The Bush administration, in a secret policy review completed early this year, has ordered the Pentagon to draft contingency plans for the use of nuclear weapons against at least seven countries, naming not only Russia and the 'axis of evil'--Iraq, Iran, and North Korea--but also China, Libya and Syria. In addition, the U.S. Defense Department has been told to prepare for the possibility that nuclear weapons may be required in some future Arab- Israeli crisis. And, it is to develop plans for using nuclear weapons to retaliate against chemical or biological attacks, as well as 'surprising military developments' of an unspecified nature. These and a host of other directives, including calls for developing bunker- busting mini-nukes and nuclear weapons that reduce collateral damage, are contained in a still-classified document called the Nuclear Posture Review (NPR), which was delivered to Congress on Jan. 8."
"But the NPR ... myopically ignores the political, moral and military implications--short-term and long--of crossing the nuclear threshold. Under what circumstances ... they 'could be employed against targets able to withstand nonnuclear attack,' or in retaliation for the use of nuclear, biological, or chemical weapons, or 'in the event of surprising military developments.'"
"The second important insight ... is the extent to which the Bush administration's strategic planners were shaken by last September's terrorist attacks on the World Trade Center and the Pentagon. ... the final study is striking for its single-minded reaction to those tragedies."
" ... the Bush administration's faith in old-fashioned deterrence is gone. It no longer takes a superpower to pose a dire threat to Americans. ... The classified text ... is shot through with a worldview transformed by Sept. 11."
"In recent months, when Bush administration officials talked about the implications of Sept. 11 for long-term military policy, they have often focused on "homeland defense" and the need for an anti-missile shield. In truth, what has evolved since last year's terror attacks is an integrated, significantly expanded planning doctrine for nuclear wars." ... [more]
March 9, 2002
U.S. Works Up Plan for Using Nuclear Arms
Military: Administration, in a secret report, calls for a strategy against at least seven nations: China, Russia, Iraq, Iran, North Korea, Libya and Syria.
"Some predicted the disclosure would set off strong reactions from governments of the target countries.
"'This is dynamite ... I can imagine what these countries are going to be saying at the U.N' ... such moves could dangerously destabilize the world by encouraging other countries to believe that they, too, should develop weapons. ... 'This clearly makes nuclear weapons a tool for fighting a war, rather than deterring them' ... " ... [more]
10:29:47 AM
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Friday, March 08, 2002 |
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March 8, 2002
Japan Economy Contracts for 3rd Consecutive Quarter
Japan's economy contracted sharply in the fourth quarter of 2001, by 1.2 percent, the government reported today. It was the third consecutive quarter in which the economy shrank, the first such streak in nearly a decade. For all of 2001, the economy contracted 0.5 percent.
... [more]
12:38:22 PM
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Thursday, March 07, 2002 |
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THE CAPITALIST THREAT by George Soros (February, 1997)
What kind of society do we want? "Let the free market decide!" is the often-heard response. That response, a prominent capitalist argues, undermines the very values on which open and democratic societies depend.
"Hegel discerned a disturbing historical pattern -- the crack and fall of civilizations owing to a morbid intensification of their own first principles. ... I now fear that the untrammeled intensification of laissez-faire capitalism and the spread of market values into all areas of life is endangering our open and democratic society. The main enemy of the open society, I believe, is no longer the communist but the capitalist threat."
" ... Karl Popper, in his book The Open Society and Its Enemies (1945) ... another view of society, which recognizes that nobody has a monopoly on the truth; different people have different views and different interests, and there is a need for institutions that allow them to live together in peace. These institutions protect the rights of citizens and ensure freedom of choice and freedom of speech. Popper called this form of social organization the 'open society.'"
"Why does nobody have access to the ultimate truth? The answer became clear: We live in the same universe that we are trying to understand, and our perceptions can influence the events in which we participate. ... In social and political affairs the participants' perceptions help to determine reality. ... There is a two-way connection -- a feedback mechanism -- between thinking and events, which I have called "reflexivity." I have used it to develop a theory of history."
"Recognizing that an open society is a more advanced, more sophisticated form of social organization than a closed society (because in a closed society there is only one blueprint, which is imposed on society, whereas in an open society each citizen is not only allowed but required to think for himself) ... "
"The Western alliance seems to have lost its sense of purpose, because it cannot define itself in terms of a Communist menace. ... an open society may also be threatened from the opposite direction -- from excessive individualism. Too much competition and too little cooperation can cause intolerable inequities and instability. ... laissez-faire capitalism holds that the common good is best served by the uninhibited pursuit of self-interest. Unless it is tempered by the recognition of a common interest that ought to take precedence over particular interests, our present system is liable to break down. ... Totalitarian ideologies deliberately seek to destroy the open society; laissez-faire policies may endanger it, but only inadvertently. ... We are enjoying a truly global market economy in which goods, services, capital, and even people move around quite freely, but we fail to recognize the need to sustain the values and institutions of an open society."
"The main scientific underpinning of the laissez-faire ideology is the theory that free and competitive markets bring supply and demand into equilibrium and thereby ensure the best allocation of resources. ... when we examine the assumptions closely, we find that they do not apply to the real world. ... assumed perfect knowledge, homogeneous and easily divisible products, and a large enough number of market participants that no single participant could influence the market price. The assumption of perfect knowledge proved unsustainable, so it was replaced by an ingenious device. Supply and demand were taken as independently given. ... he condition that supply and demand are independently given cannot be reconciled with reality ... Buyers and sellers in financial markets seek to discount a future that depends on their own decisions. The shape of the supply and demand curves cannot be taken as given because both of them incorporate expectations about events that are shaped by those expectations. There is a two-way feedback mechanism between the market participants' thinking and the situation they think about -- 'reflexivity.' ... instead of tending toward equilibrium, prices continue to fluctuate relative to the expectations of buyers and sellers."
"Heisenberg's famous uncertainty principle implies that the act of observation may interfere with the behavior of quantum particles; but it is the observation that creates the effect, not the uncertainty principle itself. ... There is a powerful case for the market mechanism, but it is not that markets are perfect; it is that in a world dominated by imperfect understanding, markets provide an efficient feedback mechanism for evaluating the results of one's decisions and correcting mistakes."
"Whatever its form, the assertion of perfect knowledge stands in contradiction to the concept of the open society (which recognizes that our understanding of our situation is inherently imperfect). Since this point is abstract, I need to describe specific ways in which laissez-faire ideas can pose a threat to the open society. I shall focus on three issues: economic stability, social justice, and international relations."
[Economic Stability] " ... in financial markets prices are not merely the passive reflection of independently given demand and supply; they also play an active role in shaping those preferences and opportunities. This reflexive interaction renders financial markets inherently unstable. ... Stability can be preserved only if a deliberate effort is made to preserve it. Even then breakdowns will occur, because public policy is often faulty. ... Instability extends well beyond financial markets: it affects the values that guide people in their actions. ... Market values served to undermine traditional values. There has been an ongoing conflict between market values and other, more traditional value systems, which has aroused strong passions and antagonisms. ... Unsure of what they stand for, people increasingly rely on money as the criterion of value. ... What used to be professions have turned into businesses. The cult of success has replaced a belief in principles. Society has lost its anchor."
[Social Darwinism] " ... laissez- faire ideology has effectively banished income or wealth redistribution. ... The laissez-faire argument relies on the same tacit appeal to perfection as does communism. It claims that if redistribution causes inefficiencies and distortions, the problems can be solved by eliminating redistribution ... The laissez-faire argument against income redistribution invokes the doctrine of the survival of the fittest. ... The main point I want to make is that cooperation is as much a part of the system as competition, and the slogan "survival of the fittest" distorts this fact."
[International Relations] "States have no principles, only interests, geopoliticians argue, and those interests are determined by geographic location and other fundamentals. ... it treats the state as the indivisible unit of analysis ... geopolitics ... does not recognize a common interest beyond the national interest. ... the present state of affairs, however imperfect, can be described as a global open society. It is not threatened from the outside, from some totalitarian ideology seeking world supremacy. The threat comes from ... democratic but sovereign states pursuing their self-interest to the detriment of the common interest. The international open society may be its own worst enemy. ... We have entered a period of disorder. ... Laissez-faire ideology does not prepare us to cope with this challenge. It does not recognize the need for a world order. An order is supposed to emerge from states' pursuit of their self- interest. But, guided by the principle of the survival of the fittest, states are increasingly preoccupied with their competitiveness and unwilling to make any sacrifices for the common good. ... An open society is not merely the absence of government intervention and oppression. It is a complicated, sophisticated structure, and deliberate effort is required to bring it into existence. ... Our global open society lacks the institutions and mechanisms necessary for its preservation, but there is no political will to bring them into existence. I blame the prevailing attitude, which holds that the unhampered pursuit of self-interest will bring about an eventual international equilibrium. I believe this confidence is misplaced ... the global open society that prevails at present is likely to prove a temporary phenomenon."
" There has to be a common interest to hold a community together ... there is such a thing as a global community; there are common interests on a global level, such as the preservation of the environment and the prevention of war. But these interests are relatively weak in comparison with special interests. ... Societies derive their cohesion from shared values. These values are rooted in culture, religion, history, and tradition. When a society does not have boundaries, where are the shared values to be found? ... the concept of the open society itself."
" ... I see the open society as occupying a middle ground, where the rights of the individual are safeguarded but where there are some shared values that hold society together. This middle ground is threatened from all sides. At one extreme, communist and nationalist doctrines would lead to state domination. At the other extreme, laissez-faire capitalism would lead to great instability and eventual breakdown. ... In many parts of the world control of the state is so closely associated with the creation of private wealth that one might speak of robber capitalism, or the "gangster state," as a new threat to the open society."
"I envisage the open society as a society open to improvement. ... What is imperfect can be improved, by a process of trial and error. The open society not only allows this process but actually encourages it, by insisting on freedom of expression and protecting dissent. The open society offers a vista of limitless progress. ... in an open society is that whereas most cultures and religions regard their own values as absolute, an open society, which is aware of many cultures and religions, must regard its own shared values as a matter of debate and choice."
"We must promote a belief in our own fallibility to the status that we normally confer on a belief in ultimate truth. ... The need for articles of faith arises exactly because our understanding is imperfect. If we enjoyed perfect knowledge, there would be no need for beliefs. ... Beliefs ought to serve to shape our lives, not to make us abide by a given set of rules. If we recognize that our beliefs are expressions of our choices, not of ultimate truth, we are more likely to tolerate other beliefs and to revise our own in the light of our experiences. ... most people ... tend to identify their beliefs with ultimate truth. Indeed, that identification often serves to define their own identity."
"A belief in our fallibility ... is a highly sophisticated concept, much more difficult to work with than more primitive beliefs, such as my country (or my company or my family), right or wrong. ... the cult of success can become a source of instability in an open society, because it can undermine our sense of right and wrong. That is what is happening in our society today. Our sense of right and wrong is endangered by our preoccupation with success, as measured by money. Anything goes, as long as you can get away with it. ... It is much easier to argue for my own interest than to go through the whole rigmarole of abstract reasoning from fallibility to the concept of the open society. ... There has to be a commitment to the open society because it is the right form of social organization."
"I believe in the open society because it allows us to develop our potential better than a social system that claims to be in possession of ultimate truth. ... Given the reflexive connection between thinking and reality, truth is not indispensable for success. ... Only at the highest level of abstraction, when we consider the meaning of life, does truth take on paramount importance. ... After all, the open society is based on the recognition of our fallibility. Indeed, it stands to reason that our ideal of the open society is unattainable. ... [but] the open society can be approximated to a greater or lesser extent."
"We have now had 200 years of experience with the Age of Reason, and as reasonable people we ought to recognize that reason has its limitations. The time is ripe for developing a conceptual framework based on our fallibility. Where reason has failed, fallibility may yet succeed." ... [more]
2:54:31 PM
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March 7, 2002
Dollar Falls; Investors Look to Recovery
"The yen shot to 2002 peaks against top currencies on Thursday, posting its biggest gain on the dollar in seven months, as Japanese stocks hit seven-month highs on hopes a U.S. economic recovery will carry the world out of a global slump."
"Japan's Nikkei stock index leapt 2.55 percent on Thursday and has now gained 24 percent in the last month, helped by an improving global backdrop and by Japanese restrictions on short-selling the stock market. The yen has surged nearly 5 percent in a week, catapulted higher as dealers who had been betting the yen would fall due to Japan's bleak economic prospects were forced to bail out of their positions en masse."
But many New York-based analysts doubted the staying power of the yen's gains. Disbelievers say the Nikkei's rise stemmed in part from the ban on short sales, as opposed to an improving economic picture, and from Japanese repatriation of overseas assets ahead of the March 31 fiscal year- end. 'I think the old ghosts have come back to haunt the yen after the end of the fiscal year ... "
"The lack of an aggressive response to the yen's muscle has some analysts speculating Tokyo is keen to support the stock market ahead of the fiscal year-end to avoid chaos in the fragile financial sector."
"The dollar's tumble against the yen sent the greenback falling to a six-week low of 88.13 cents per euro in European trading hours ... 'U.S. numbers are getting better, but euro zone numbers are also getting better. I don't think there is much change in the fundamental relationship between the two' ... Some analysts have said the dollar is looking a bit fragile, given its inability to rally despite signs of a stronger-then-expected recovery from recession. Some analysts said President Bush's decision to impose tariffs on steel imports was weighing on dollar sentiment, fueling fears of rising trade tensions."
"U.S. manufacturers have urged Bush to scrap America's long-standing strong dollar policy, which they say reduces the competitiveness of U.S. exporters." ... [more]
1:28:46 PM
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The coming crisis of American imperialism
March 06, 2002
"The American response to September 11th did not change the terms of international relations. It only enhanced and deepened a trend that was manifest in Bush's foreign policy from the beginning."
" ... American foreign domination replicated the capitalist model of the domestic domination of production: police in the background, economic necessity in the foreground. Exploitation was, and is, relentless. ... The U.S. professed commitment to human rights, democracy and rule of law, promised hope and gave the system respectability, even among its critics."
" ... Bush switched U.S. foreign domination towards an older imperialist model. ... Bush's imperialism is unabashedly and openly nationalistic. 'America first' became the motto of foreign policy ... The U.S. could have come out of Afghanistan as the undisputed and unchallenged ruler of the world. Instead, ... the U.S. is emerging from Afghanistan as the hated tyrant of the world."
"One can point to several reasons for the tenacity of Bush's 'doctrine.'[:]
- ... the human reasons: the personal touch of George Bush, and the rise of the strategic hawks
- ... the interests of the oil and defense lobbies
- America's military superiority makes negotiated cooperation seem unnecessary, hence unpatriotic.
- ... the new muscular America would protect the GOP from having to confront voters over a bankrupt domestic agenda."
" ... Western capitalism moved away from both the pre-war model and the Cold War model of imperialism for a reason. The European empires died off because Third World nationalism made them too expensive to maintain. ... In response, capitalism transformed itself and learned to profit from the newly independent Third World. ... Consumer capitalism discovered the power of optimism. ... prospect of arming every Chinese peasant with an Internet ready cell phone. [oil for the lamps of China] ... the gospel of democracy and human rights proved to be a ... potent Bourgeois ideology ... Furthermore, the end of the Cold War freed the U.S. government to concentrate on economic expansion."
"By trying to pull the clock back, [Bush's] policy is undermining the world hegemony of the United States. First, the new focus on war interferes with the business of promoting business. Second, U.S. policy undermines the credibility of the institutions representing Capitalism. And most importantly, by shedding the international institutional framework, Bush gives American domination a recognizable face and address."
"As it emerges behind its international cloak, the new American domination appears unmasked, as a purely foreign force. ... America-bashing is thus slated to become de-rigueur for politicians far beyond the left. ... no matter what ensues ... As America contracts behind its night- vision goggles, the spread of market capitalism is bound to lose steam. That will cause a split between American capitalism and Bush's imperialism."
" ... as tensions multiply, the White House may conclude That, rather than change the tune, the best election strategy would be to raise the volume. Given the present popular support for saber-rattling in the U.S., that might be a winning strategy for George Bush. But it would drive America deeper into a vicious cycle of militarization and anti-Americanism. This is how empires self- destruct."
" ... capitalism will start voting with its feet. ... Capital fleeing the U.S.? That might sound outlandish, but it’s not. The huge American trade deficit means that capital doesn't need to move out. If enough stops flowing in, it will dramatically alter the American political landscape. The U.S. economy looked iffy even before factoring foreign policy in. With debt mounting, credibility under fire, goodwill largely written off the book, and the Pentagon fast becoming a bottomless money pit, America Inc. looks less and less of a strong buy with every passing day." ... [more]
12:19:11 PM
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9:45:54 AM
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March 7, 2002
China Is Increasing Its Budget for Military Spending by 17.6%
"China is increasing military spending this year by 17.6 percent, or $3 billion, bringing the publicly reported total to $20 billion, the finance minister announced today. ... continued large spending increases were needed for China's military "to utilize modern technology, especially high technology to raise our army's defense and combat capabilities," and to raise salaries for the country's 2.5 million officers and enlisted men."
"Actual military spending may be three to five times the reported total of $20 billion, according to Western experts. ... even the higher estimates are well below the spending levels of the United States, and the American technological advantage may, if anything, be growing ... The Bush administration has proposed a $379 billion military budget for the next fiscal year, a 14.5 percent increase ... "
" ... a 28 percent increase in spending on living allowances for the unemployed, pensions and other social security measures "in order to protect social stability." Millions of farmers and workers in decrepit state industries are expected to lose their jobs in the years ahead as China further opens its markets to global competition ... " ... [more]
8:36:21 AM
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Tuesday, March 05, 2002 |
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Battles yet to come
Mar 5th 2002
"Declarations of an American military victory in Afghanistan, such a prominent feature of political and diplomatic discourse in the past few months, have suddenly begun to look premature ... "
"The abrupt collapse of the Taliban regime caught almost everyone, not least the Americans themselves, by surprise. ... The discovery of so many well-armed and determined al-Qaeda and Taliban troops, months after victory in Afghanistan had seemed largely assured, raises many questions. Why has it taken so long ... to discover their existence? How many others? ... Where are Osama bin Laden and other ... leaders ... ? ... where is Mullah Omar? ... Most significantly ... how secure is the interim Afghan government?"
" ... caught off guard by the scale and ferocity of the resistance ... "
" ... the country is in chaos. Warlords have divided up most of the country. The remit of the UN-backed interim government of Hamid Karzai does not extend beyond Kabul, and even there its control is shaky. ... Failure to secure stability in Afghanistan would also raise serious doubts about America’s plans for pursuing its war on terrorism anywhere else." ... [more]
8:51:59 AM
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Sunday, March 03, 2002 |
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Are global poverty and inequality getting worse?
March 2002
ROBERT WADE VS MARTIN WOLF [exchange of letters: author not explicit in excerpts below]
"Pay inequality within countries was stable or declining from the early 1960s to 1982, then sharply increased from 1982 to the present. ... the main issue: the sheer magnitude of poverty and inequality on a world scale. The magnitude is unacceptable, regardless of the trend, and the world development agenda should make inequality reduction (not only poverty reduction) a high priority. Roughly 85 per cent of world income goes to 20 per cent of the world's population and 6 per cent to 60 per cent of the world's population. ... Integration/globalisation is nothing like the engine of development you say it is. The engine is the advance of technology and the diffusion of technical capacities of people, firms and governments."
"Unless you are suggesting implausibly huge income transfers from taxpayers in rich countries to the world's poor, or complete freedom of migration, absolute gaps in living standards will rise for many decades, even if poor countries now grow very quickly. This is the tyranny of history: we can only start from where we are. ... But your position on the unacceptability of inequality also amounts to saying that the world would be a better place if the rich countries of today had never started rapid development in the 19th and 20th centuries. ... So bemoaning the magnitude of global inequality, as opposed to the low standards of living of large parts of the world, is just empty rhetoric. It has no significance for action."
"A significantly more equal world is likely to be more stable, peaceful and possibly more prosperous. ... globalisation (or increased economic integration) as the world's best means of reducing poverty and inequality. I doubt it. The most powerful engine of development is the diffusion of technical capacities. ... the [World Bank's official view about development has been: adopt a liberal trade policy (low tariff and non-tariff barriers), deregulate markets, privatise state enterprises, welcome foreign firms, maintain fiscal balance and low inflation. ... The sensible [countries] liberalise in line with the growth of domestic capacities-they try to expose domestic producers to enough competition to make them more efficient, but not enough to kill them ... agricultural subsidies have been an important means of redistributing the fruits of industrialisation. ... China's agreement to give equal access to foreign companies will mean that it cannot protect 'inefficient' labour-intensive industries that serve to equalise incomes. It is worrying for the whole world that the Chinese government itself now seems to think it can maintain an urban-rural apartheid state by means of the pass laws, while opening the economy at a pace so fast that unemployment will shoot upwards from its already high levels."
"The only sensible goal must be to raise the standards of living of the world's poorest people as quickly as we can. What is needed for this is faster growth. ... Among the essential pre-conditions for growth are: a stable state; security of the person and of property; widespread literacy and numeracy; basic health; adequate infrastructure; the ability to develop businesses without suffocation by red tape or corruption; broad acceptance of market forces; macro-economic stability, and a financial system capable of transferring savings to effective uses. ... The tragedy of Africa is that so few of these pre-conditions exist. ... trade is the handmaiden of growth. ... three propositions. First, the biggest policy challenge is to accelerate economic growth in poor countries. Second, open markets in the north and FDI make an important contribution to such growth. Third, self-sufficiency is a foolish development strategy."
"I agree with your three propositions and have never argued anything different. ... At the heart of our disagreement, I think, is the question about how far rich countries in general should go in using the power our superior resources give us (a) to set the rules of the market so that resource power is translated into market power, and (b) to use that power to the maximum when bargaining with people much poorer than ourselves."
"Economic growth is, almost inevitably, uneven. Some countries, regions and people do better than others. The result is growing inequality. To regret that is to regret the growth itself. It is to hold, in effect, that it is better for everyone in the world (or within individual counries) to remain equally poor. You come close to saying just that. It seems to me a morally indefensible and practically untenable position." ... [more]
2:10:34 PM
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View From Abroad
Concern and Criticism Replaces Post- Sept. 11 Solidarity in Europe
"'Americans ... are intolerant, they focus on themselves and they think only about themselves' ... 'They are part of the 'axis of evil' as well.' ... unease and anger with American policy and Americans in general have returned ... deep fears about what [Europe] sees as heavy-handed U.S. policy."
"'If you read the French press today, you have the feeling that the threat is America.' ... Some commentators ... point to a deeper anti- Americanism that reaches well beyond the political commentators who have always criticized the United States. ... the just-concluded Winter Olympics reflected this growing global resentment. ... 'It was ultimately impossible to separate the [Salt Lake] Games from the fact of American hegemony in the world and the United States' go-it-alone approach in foreign policy'"
" ... the anti-terrorism campaign took new turns ... growing unease with U.S. policy and shock at the American military's sheer might in the assault on Afghanistan. ... they fear that the clear superiority of the American military would make other nations irrelevant in U.S. policymakers' eyes. 'There's almost a sense of betrayal' [in] the European reaction."
"'America is already envied and disliked because of its domination. The danger is that Mr Bush's speech, with its simple certainties and pronounced unilateralist flavour, will merely fuel that resentment further.' ... 'The greatest danger to America's dominant position today is not Islamic fundamentalism. It is the arrogance of American power.'"
" ... 'the reality is that there are long-standing strains within the [American- European] alliance' ... the European outcry is unlikely to lead to a major rift between the continent and the United States. 'Underlying things hold us together ... Western values, shared interests in the Western economic system, liberal constitutional governments.'" ... [more]
1:05:22 PM
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Saturday, March 02, 2002 |
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Gulf with US is widening, says French minister
Jon Henley in Paris
Saturday March 2, 2002
"The foreign policy rift between Europe and the United States widened sharply yesterday as France urged Washington to consult properly with its partners and use its power 'more responsibly'. ... the transatlantic split was not just a 'passing polemic', but the result of 'real and fundamental' differences. ... There was 'real perplexity' in Europe in the face of a US administration that had rejected the Kyoto treaty on global warming, objected to an international criminal court, opposed multiple disarmament agreements and 'abused its UN security council veto' on the Middle East ... 'This is not sterile criticism, but an appeal for the United States to adopt a different attitude' ... ... [more]
3:01:32 PM
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11:38:13 AM
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Friday, March 01, 2002 |
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March 1, 2002
Bank of Japan, in Shift, Agrees to Loosen Credit
"Under intense political pressure, the Bank of Japan moved to further loosen its monetary policy today, agreeing to buy more government bonds and ease restrictions on borrowing. ... the government's latest plan for the economy ... included tougher bank inspections, incentives for writing off nonperforming loans and easier credit for small companies."
"The bank said today that it would begin buying 1 trillion yen ($7.5 billion) in long-term government bonds every month, an increase of 25 percent. It also removed ceilings on the length of time that companies will have to borrow directly from the central bank to cover cash flow problems as the fiscal year draws to an end on March 31."
"Though it gave in to the government's wishes, the bank's policy board tried to head off any erosion of its credibility by stressing in its announcement that for its actions to do any good, they must be accompanied by additional steps to clean up the banking sector. ... neither the central bank nor the government appeared ready to take the kinds of aggressive steps urged by investors, by the Bush administration and by others to deal with the banking problems and revive the economy. ... 'The Bank of Japan and government continue to take small, gradual steps and won't act aggressively until push comes to shove'"
"The interest-rate premium demanded by investors who buy Japanese bank bonds has doubled in recent weeks ... " ... [more]
12:34:23 PM
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Thursday, February 28, 2002 |
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The Ineducable Left
[Book Review of Michael Hardt and Antonio Negri’s Empire.]
"The far left’s disgraceful response to September 11 ... shows that its hatred of democratic capitalism and, more broadly, Western civilization itself remains fierce more than a decade after the collapse of socialism. ... one of the most pernicious books published in recent memory: Michael Hardt and Antonio Negri’s encomium to anticapitalist revolutionary violence, Empire. This forbidding five–hundred–page book of political and social theory, which ends with a surreal celebration of “the irrepressible lightness and joy of being Communist ... Empire is also brashly optimistic, heralding the revolutionary dawn of a utopian postcapitalist age. ... Negri is a convicted terrorist."
"What is the argument, such as it is, of this strange book? ... 'Empire' is 'the sovereign power that governs the world'—a new 'capitalist mode of production.' It is, more concretely, the global market. At the pinnacle of Empire is the capitalist power par excellence, the nuclear–bomb–wielding U.S., 'a superpower that can act alone but prefers to act in collaboration with others.' ... The vertiginous market forces these political and economic bodies have unleashed are destroying the old imperialistic nation– state and creating in its stead a new transpolitical global order where economic considerations trump all other concerns."
"Economic globalization ... has meant that a handful of rich folks are getting richer and more powerful at the expense of the vast majority, who grow 'always more exploited, more abject, more 'proletarianized.' The new global order claims to promote peace, they charge, but in practice it is 'bathed in blood.' Any time Empire senses a danger to the circulation of commodities ... out come the guns and missiles to deal with the threat. Today’s Empire, like its Roman predecessor, is a brutal pacifying force. ... Citizens of prosperous liberal democracies only seem to be free. In reality ... they are subjects of terrifying 'societies of control,' consumed completely in the 'rhythm of productive practices and productive socialization.'"
"Gestating within the womb of economic globalization is a 'counter–Empire,' led by 'the multitude' ... those that don’t fit neatly into the global capitalist economy. ... anyone else who rejects bourgeois values ... the multitude will overcome the new Empire. The political task of the third millennium ... will be to help bring this multitude together so that it can forge 'an alternative political organization of global flows and exchanges' that 'will one day take us through and beyond Empire.' What will this ... look like? ... Global citizenship ... an end to borders and nations ... A second aspect will be 'absolute democracy' No more ... private property ... Free access to and control over 'knowledge, information, communication, and affects' ... A final characteristic: equal compensation for all. ... a 'citizenship income.'"
"The counter–Empire is possible only after modernity ... has dissolved the certainties of all earlier ages. ... [the] multitude is a Promethean power, born with the modern age’s emancipation of the human will from the moral constraints of religion and human nature. ... We must embrace our 'post–human' identities as monkeys and cyborgs ... These epochal transformations will require a cleansing bloodletting."
"The [commercial] success of Empire is astonishing when you cut through the jargon and see exactly what it says. ... Hardt and Negri fail to think politically—fail to explore the real possibilities and dangers of political reality and take measure of the lessons of history."
"The truth about globalization is exactly the reverse of what Hardt and Negri assert. Globalization is dramatically increasing world prosperity and freedom. As the Economist’s John Micklethwait and Adrian Wooldridge point out, in the half century since the foundation of the General Agreement on Tariffs and Trade (GATT), the world economy has expanded six–fold, in part because trade has increased 1,600 percent; nations open to trade grow nearly twice as fast as those that aren’t; and World Bank data show that during the past decade of accelerated economic globalization, approximately 800 million people escaped poverty. ... [the book exposes] some of the less attractive aspects of today’s libertine culture. But on balance ... the empirical evidence proves it far preferable to any alternative economic order we know of. It has profoundly diminished human suffering. ... Hardt and Negri’s ... hazy alternative to it—absolute democracy, open borders, equal compensation—is apolitical utopian nonsense. ... a totalitarian style of thought that substitutes rhetorical violence for reasoned argument."
"For both good and ill ... the twenty–first century clearly will be religious, not secular. ... Without morality and the rule of law, the powerful simply feel free to rape and pillage; the weak can only tremble and hide. Apolitical abstraction and wild–eyed utopianism, a terroristic approach to political argument, hatred for flesh and blood human beings, nihilism: Empire is a poisonous brew of bad ideas."
" ... our flawed but decent democratic capitalist institutions—the best political and economic arrangements man has yet devised and the outcome of centuries of difficult trial and error ... " ... [more]
4:32:23 PM
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Wednesday, February 27, 2002 |
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Critics Say Koizumi's Economic Medicine Is a Weak Tea, February 27, 2002
"'It is Japan's old story of no accountability' ... 'Koizumi himself has joined the conservative, anti-reform group.'"
" ... the package ... print more money, press banks to straighten out their bad loan portfolios, ... scrutinize banks more closely and urge the government's bad loan buying agency to speed up loan purchases. To buoy Japan's battered stock markets, the package calls for tightening controls on short selling and holds out the possibility of an injection of taxpayer money into insolvent private banks."
"Market analysts said they had hoped for bolder measures — tax cuts to revive consumer spending, vigorous deregulation, and cutting off credits to bankrupt companies. 'This policy package is reactionary, not aimed at addressing real fundamental underlying issues,' a high-level Bank of Japan official said ... "
"Japan has been in and out of recessions for the last decade. For three years, prices have been dropping, first because of increased efficiency and cheaper imports, but more recently because incomes have receded to 1995 levels. ... Sales by Japan's wholesalers and retailers combined dropped 5.4 percent in January from a year before, representing the 12th consecutive monthly decline ... Despite recent major increases in the money supply, he said, the money stays in banks because companies are cutting debt and consumers are reluctant to spend. ... Japan's overcapacity ... is the cause of deflation ... 'Reducing supply means closing factories' ... "
"'As fear of a February and March crisis emerged, Koizumi chickened out' ... Government officials have vowed this week to keep the Nikkei 225 index of the Tokyo Stock Exchange around 10,000 ... United States Treasury Secretary ... warned ... : 'Where they are is not sustainable for too much longer a period of time. Something will give.'" ... [more]
8:21:00 AM
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Monday, February 25, 2002 |
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Globalism and the Liberal Model (January 31, 2002)
[Book Review] "Against the Dead Hand: The Uncertain Struggle for Global Capitalism," Brink Lindsey (Wiley)
"In 1913 ... 'merchandise trade as a percentage of gross output totaled an estimated 11.9 percent for the industrialized countries,' a level unmatched until the 1970's. Capital flowed across borders, while transportation costs plummeted. Newly developing nations entered the world marketplace. ... That trend toward economic integration was halted ... when world leaders ... began to misapply the lessons of big business. If large commercial enterprises could advance by planning and control, they reasoned, national economies could be run the same way, with more efficient and humane results than the "chaos" and competition of the marketplace. ... this 'industrial counterrevolution' took many forms ... The result was a turn from economic openness toward closed national markets, the better to enable political planning and control. Today's globalization is occurring ... because political leaders no longer believe that state-directed economic decision making is the path to prosperity. ... Contrary to both globalization triumphalists and globalization critics ... sees the process as a result of bottom-up change at the national level. ... A result of this change in perceptions is ... a struggle: Adam Smith's invisible hand against ...the 'dead hand' of central planning."
[Bad examples: Korea, Argentina]
"In South Korea, for instance, "banks were seen as a social tool to help the chaebol," the big conglomerates. Outside financiers didn't question the conglomerates' investment decisions. ... those no-questions-asked investments destroyed wealth instead of creating it. And single-country financial systems intensified risks. A country's savers had all their assets in its banks' undiversified baskets."
" ... removing government controls isn't enough. Good institutions, particularly a trustworthy judicial system, are essential. ... In Argentina, for example, the government ... liberalized the economy but did nothing to restore the independence of the judiciary. ... 'the [Argentenian] legal system is absolutely vital for our region's economic development, but the politicians are blind to it.' Deals collapse every day ... because investors aren't willing to take the risks of an insecure legal environment."
"'There is at present only one viable vision of economic development: the liberal model of markets and competition. It is neither widely loved nor widely understood, but it is all there is ... And so when existing institutions break down so badly that changes become unavoidable, leaders in search of a template for constructive action now turn to the liberal model by default. In this way the dead hand yields, bit by bit, to the invisible hand of the market.'" ... [more]
4:13:49 PM
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Stability, America's Enemy
From Parameters [US Army War College Quarterly], Winter 2001-02
" ... The diplomats and decisionmakers of the United States believe, habitually and uncritically, that stability abroad is our most important strategic objective. ... The United States will go to war over economic threats ... But the consistent, pervasive goal of Washington's foreign policy is stability. America's finest values are sacrificed to keep bad governments in place, dysfunctional borders intact, and oppressed human beings well-behaved."
"Our insistence on stability above all stands against the tides of history, and that is always a losing proposition. ... Historically, instability abroad has been to America's advantage, bringing us enhanced prestige and influence, safe- haven-seeking investment, a peerless national currency, and flows of refugees that have proven to be rivers of diamonds ... Without the instability of the declining 18th century, as the old European order decayed, we would not have gained the French assistance decisive to our struggle for independence. Without the instability of the 20th century, protectionist imperial regimes might have lingered on to stymie our economic expansion. ... The Monroe Doctrine was not about stability, but about protecting a new and beneficial instability from reactionary Europe."
"It all began to go wrong when we found ourselves with an accidental empire. ... the Spanish-American War made of us an extractive power, in which the earnings of fruit companies became more important than support for freedom and democracy. Our bayonets served business, not ideals. This pattern of valuing profit above our pride--or even elementary human decency--holds true in our present relationships with states as diverse as Saudi Arabia and China ... the globalization of America's economic reach was enabled only by the colossal instabilities of collapsing empires. We argued that peace was good for business, no matter the human cost of an artificial peace imposed with arms, across a century when wars, revolutions, and decade after decade of instability opened markets to American goods, investors, and ideas. Were the maps of today identical to those of a century ago, with the same closed imperial systems in place, our present wealth and power would be impossible. America has always had a genius for picking up the pieces--the problems arise when we insist on putting those pieces back together exactly as they were before. I know of no significant example in history where an attempt to restore the status quo ante bellum really worked."
"The Great War began to break up the old imperial system that hindered the expansion of American trade ... the historical force that drove so much of the developed world into the Depression was the attempt by the cartel of Great War victors to preserve the imperial trading order, with its restricted markets and an inherent stress on the metropolitan production of every type of industrial good without regard to efficiency. The imperial system, despite a bit of jerry-rigging, no longer answered the world's economic requirements. A brutally simple economic law is that only the expansion of possibilities enables the expansion of wealth, but the goal of Europe's waning empires was to restrict possibilities. Another seeming law is that developed economies cannot exist in equilibrium: When they cease to advance, they retreat. The old pre-globalization machine could not go forward anymore. The Depression marked the breakdown of a world economic system that had lingered into decrepitude. ... economic logic that drove the monstrous German and Japanese regimes to attack the tottering imperial system that excluded them from dependable access to resources."
"And the Cold War deformed American strategic thought and our applied values beyond recognition. From the amoral defender of Europe's rotten empires, we descended to an immoral propping up of every soulless dictator who preferred our payments to those offered by Moscow. We utterly rejected our professed values, consistently struggling against genuine national liberation movements because we saw the hand of Moscow wherever a poor man reached out for food or asked for dignity. At our worst in the Middle East, we unreservedly supported--or enthroned--medieval despots who suppressed popular liberalization efforts, thus driving moderate dissidents into the arms of fanatics. From our diplomatic personnel held hostage in Iran a generation ago, to the 11 September 2001 terrorist attack on the United States, we have suffered for our support of repressive, "stable" regimes that radicalized their own impoverished citizens. In the interests of stability, we looked the other way while secret police tortured and shabby armies massacred their own people, from Iran to Guatemala. But the shah always falls."
"The shah always falls. Our age--roughly the period from 1898 through the end of the 21st century--is an age of devolution, of breaking down, of the casting off of old forms of government and territorial organization in favor of the popular will. ... the temptation is always to back the devil you know (and who allows you to explore for oil on his territory). But make no mistake--in one essential respect, today's America is on the same side as the most repressive voices in the Islamic world and the hard, old men in Beijing: We are trying to freeze history in place. And it cannot be done. In our ill-considered pursuit of stability (a contradiction in terms), we have raised up devils, from terrorists to dictators, who will not be easily put down. ... Look at our track record over the last decade: It is a litany of predetermined failures that would be laughable were it not for the human suffering that resulted."
"How did we come to this? ... How is it that our diplomats and those who must rely upon them fell in love with the past, when our national triumphs have resulted from embracing the future? Unfortunately, it can be easily explained. In times of sudden change, men look to what they know."
"Today, in 2001, America's diplomatic wisdom is that of Metternich and Castlereagh, brilliant reactionaries whose intent was to turn back the clock of history, then freeze the hands in place, after the Napoleonic tumult. ... Today, in a world that is systemically, developmentally, economically, and culturally differentiated and differentiating--despite the surface effects of globalization--our diplomacy cannot rely on easy-to-use constructs or unifying ideology ... Our strategic approach must be situational, though shaped in each separate case by our national interests and informed by our core values ... We have made a slogan of democracy abroad, imagining it as a practical means when it is, in fact, the glorious end of a long and difficult road. We speak of human rights, then wink at the mundane evil of Saudi Arabia, the grotesque oppression in China, and any African massacres that don't leak to the press--because, inside our system of diplomacy, human rights are finally regarded as a soft issue. ... The oppressor falls, whether in one year or 50, and it is easier to do business with a nation whose freedom struggle you have supported than with one whose suffering you ignored or even abetted."
"Instead of a revolving door, there should be a steel wall between Wall Street and Washington. Diplomatic and military concessions to a repressive regime that allows select US-headquartered corporations economic advantages today may prove a very poor investment for our country's greater interests tomorrow. ... Were we only to apply our own professed ideals where it is rational and possible to do so, we would, indeed, find our way to a better, safer world in time. But we must stop trying to arrest the decomposition of empire's legacy. We are in a period of unprecedented and inevitable global change, and we must learn to accommodate and to help shape local changes constructively. But we cannot prevent the future from arriving."
"Our national interest, too, evolves. Only our core values--the rule of law, the rights of the individual, and religious and ethnic tolerance--remain constant. ... democracy may shatter the remaining social bonds of weak or brutalized societies, dividing survivors into ethnic or religious factions. The over-hasty imposition of democracy can lead directly to a degeneration in the respect for human rights. Where citizens have not learned to value their collective interests, democracy intensifies ethnic and religious polarization. Democracy must be earned and learned. It cannot be decreed from without."
"Let us examine, briefly, just a small selection of the strategic issues facing the United States in which the quest for stability may prove antithetical to American interests.
[discussion of strategic issues in depth follows:]
- The Balkans
- The Russian Federation
- China
- Africa
- The Middle East
- Islamic Terrorism ["the United States will emerge stronger and more united, with a sobered sense of strategic reality that will serve us well n the decades to come.]
- Afghanistan ["the falsity of the dictum that 'the enemy of my enemy is my friend.' Sometimes, the enemy of your enemy is just practicing for the big game."]
- Cuba ["If we intervene ... to protect the 'rights' and the 'legitimate property' of the Miami Cubans at the expense of the Cuban people themselves, we will shame ourselves inexcusably."]
- Indonesia ["If we ... are not thinking bout how to manage and facilitate Indonesia's breakup, we will find ourselves embarrassed by history again."]
"Devolution threatens a great range of other states, from Pakistan to Italy. ... attempts to arrest instability and to prolong the life of decayed, unnatural states, rather than to assist populations through longed-for political reorganizations, will always carry an exorbitant price and, ultimately, will fail. ... our role should be that of a global referee, calling time out when the players hit below the belt or get too rough, and clarifying the rules of the game (no genocide, no ethnic cleansing, no mass rape, no torture, etc.). Instead of trying to stop the game, which was our approach across the past decade, we should try to facilitate it when it is played by legitimate players for legitimate stakes. In the case of terrorists, of course, we need to throw them out of the game permanently." ... [more]
2:34:17 PM
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hyper-power (HYE.pur.pow.ur) noun. A nation that has vastly greater economic, political, or military power than any other nation. Also: hyperpower.
"Long the principal superpower and now the single superpower — or a 'hyper-power,' in the favoured phrase of the French — the U.S. is the contemporary Rome. Its power, much of it invisible because it's based on culture or technology rather than just upon smart bombs and cruise missiles, reduces the power of all others, whether the European Union or China or Russia, let alone Canada, to the third rank, sort of like Gaul's status at the height of the Roman Empire."
—Richard Gwyn, "U.S. and Them," The Toronto Star, December 29, 2001 ... [more]
8:37:38 AM
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Sunday, February 24, 2002 |
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The Historical Realist Doctrine
[discussed in Beyond Jihad Vs. McWorld by Benjamin R. Barber, link below]
The historical realist doctrine was firmly grounded in an international politics of sovereign states pursuing their interests in a setting of shifting alliances where principles could only obstruct the achievement of sovereign ends that interests alone defined and served. Its mantras--the clichés of Lord Acton, Henry Morgenthau, George Kennan or, for that matter, Henry Kissinger--had it that:
- nations have neither permanent friends nor permanent enemies but only permanent interests;
- that the enemies of our enemies are always our friends;
- that the pursuit of democratic ideals or human rights can often obfuscate our true interests;
- that coalitions and alliances in war or peace are tolerable only to the degree that we retain our sovereign independence in all critical decisions and policies; and
- that international institutions are to be embraced, ignored or discarded exclusively on the basis of how well they serve our sovereign national interests, which are entirely separable from the objectives of such institutions. ... [more]
3:27:04 PM
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Setting Right a Dangerous World By JOHN LEWIS GADDIS (January 11, 2002)
"Few other nations have worried so little for so long about what is coming to be called 'homeland security.' ... define this lack of concern as a central feature of the American character. 'Free security' ... had done as much to shape Americans' view of themselves as had the availability of free, or almost free, land. ... in America, homeland security could be taken for granted ... [now] Americans have entered a new stage in their history, in which they can no longer take security for granted: It is no longer free -- anywhere, or at any time. ... Security, therefore, has a new meaning, for which little in our history and even less in our planning has prepared us." [author's italics]
"our foreign policy since the cold war ended has insufficiently served our interests. [author's italics] ... deficiencies in the American approach to the world during the post-cold-war era that are clearer now than they were then. ... One ... was unilateralism, an occupational hazard of sole surviving superpowers. ... second ... We neglected the cultivation of great-power relationships. ... third ... a preference for justice at the expense of order. ... fourth ... the inconsistency with which we pursued regional justice. ... fifth ... our tendency to regard our economic system as a model to be applied throughout the world, without regard to differences in local conditions and with little sense of the effects it would have in generating inequality. ... Finally ... the United States emphasized the advantages, while neglecting the dangers, of globalization."
"What connects these shortcomings is a failure of strategic vision: the ability to see how the parts of one's policy combine to form the whole, and to avoid the illusion that one can pursue particular policies in particular places without their interacting with one another. It means remembering that actions have consequences: that for every action there will be a reaction, the nature of which won't always be predictable. It means accepting the fact that there's not always a linear relationship between input and output: that vast efforts can produce minimal results in some situations, and that minimal efforts can produce vast consequences in others. It means thinking about the implications of such asymmetries for the relationship between ends and means, always the central problem of strategy. Leverage is important, and our adversaries have so far proved more successful than we in using it. Finally, it requires effective national leadership, a quality for which American foreign policy during the post-cold-war era is unlikely to be remembered." ... [more]
3:15:28 PM
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Why Europe Is Wary of War in Iraq
" ... America's European allies would deplore a repetition of the Persian Gulf war. ... Europe learned a lesson in World War I: slipping into a conflict, with no clear moral sense of one's mission or of the likely military outcome, became a basic fear. Europeans' great source of anxiety was the prospect of being caught in an uncontrollable military escalation. ... The trauma of World War II, and the experience of senseless and genocidal colonial wars before and after it ... explain European reluctance to intervene quickly in Bosnia — a deplorable reluctance, in hindsight — and the present refusal to join arms with the United States against Iraq. This time, however, the powder keg is not the Balkans but the highly armed, explosive Mideast. Too many guns are drawn, too many fingers are on the triggers, and some of them could be on nuclear bombs."
" ... Washington's unilateralism, from here, looks like simply a form of America's longstanding isolationism, which is to say that the distance is created by America, not by Europe. ... the United States might benefit from recalling the late Senator J. William Fulbright's diatribes against 'arrogance of power.' ... the old conundrum of military history — what to do with the losers — remains unsolved. Who would govern Iraq after Saddam Hussein?"
" ... general elections are looming in France (May) and Germany (September) — along with possible realignments that could draw Europe away from the United States. ... Ultimately, Washington should return to the fold of its once strong Atlantic partnership, even if it means wasting time and losing military momentum. A fragmented alliance in Europe is much more difficult to repair than a broken pipeline." ... [more]
1:15:48 PM
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International disquiet
"Centre-left government leaders, meeting in Sweden, insisted on Saturday there was no rift between Western allies."
"But at a dinner for the leaders on Friday, Canadian premier Jean Chretien, current chairman of the Group of Eight countries, French Prime Minister Lionel Jospin and Brazilian President Fernando Henrique Cardoso voiced concerns about the United States going it alone in foreign policy, officials said." ... [more]
10:11:21 AM
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Down with Oncle Sam!
"France’s latest bout of anti-American paranoia." ... [more]
10:08:02 AM
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French economy contracts
"France's economy contracted 0.1% in the fourth quarter last year compared with the third, bringing full-year growth to 2.0%, the national statistics institute INSEE reported on Friday. ... It was the first quarterly contraction in gross domestic product since the fourth quarter of 1996." ... [more]
10:05:12 AM
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Bush Uses Trip for Damage Control
[Analysis of Bush Asian trip, February 2002] ... [more]
9:28:29 AM
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Saturday, February 23, 2002 |
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Why Are Globalizers So Provincial? [January 31, 2002]
" ... today's volume of international trade and investment is huge by historical standards. ... Yet globalization remains provincial ... A smattering of rich countries exercises leadership in international organizations and world markets ... These global institutions are, at their highest levels, surprisingly parochial."
"Three groups of developing countries coexist today. The poorest have too few skills to create professionally managed firms and are in dire need of poverty alleviation — one of the forum's core concerns. The richest group ... started the postwar period with manufacturing experience. This history helped them build domestically owned enterprises ... The great majority of developing countries occupy a middle ground: they now have manufacturing experience, and they want their companies to emulate those of the successful developing nations. What enabled [?] ... business and government worked closely together to strengthen domestic industry. Foreign enterprises were discouraged ... State-owned banks lent money at subsidized rates ... subsidies were allocated ... State support [was] ... tied to strict performance standards and closely monitored."
" ... the types of promotional measures used successfully by countries like Taiwan and Thailand no longer have the support of international organizations. ... now identified as protectionist and unfair. To join the international trading system, nations must now agree to ... a level playing field and ... must disallow government intervention in the economy ... the advantage of accepting the doctrine and rules of a level playing field is access to world markets. The disadvantage is a loss of the freedom to subsidize company formation "
" ... the opportunity to stimulate debate on whether the one-size-fits-all principle is too rigid to allow newcomers to enter the world trading system and prosper in it." ... [more]
2:40:36 PM
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The Limits of Power [January 31, 2002] [Editorial]
The application of power and intimidation has returned to the forefront of American foreign policy. ... Not since America's humiliating withdrawal from Vietnam more than a quarter-century ago has our foreign policy relied so heavily on non-nuclear military force, or the threat of it, to defend American interests around the world."
" ... an assertive new military doctrine that includes the threat of armed intervention against nations that are developing weapons that may put the United States in peril. ... Bush Doctrine implies a pre-emptive use of conventional force ... This is a radical departure ... Traditionally, the United States has employed its military forces in retaliation for an attack rather than striking first itself."
" ... American power commands new respect overseas these days."
" ... The problem comes if ... Mr. Bush determines he has to use force to destroy the weapons programs that diplomacy fails to control or overthrow the governments that build them. ... there is no way to assure that the backlash abroad would not be worse than the original threats, including the loss of allied support, a deepening of antagonism toward the United States and anarchy in the target countries themselves." ... [more]
2:26:17 PM
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What Is America's Place in the World Now?
" ... pretty much every cherished notion about America's role in the world must be revised ... 'The idea that national security is national, or homeland security, is a revolution in strategic thinking.' ... 'A new imperial moment has arrived ... The chaos out there in the world is too threatening to ignore, and the existing tools for dealing with chaos have been tried and found wanting.'"
"The logic for a new kind of imperialism ... the decolonalization of the 1940's and 1950's left a power vacuum in much of the world. The principal mechanisms the world has devised to deal with them — foreign aid, nongovernmental institutions, the World Bank, the United Nations — have not succeeded in dealing with the most troublesome and difficult cases. 'The problem isn't going away ... World population is going to go from six to eight billion. All that growth is going to happen in poor countries. You are going to get more state failures. They do threaten our interests: drugs in Columbia and Afghanistan, the diamond trade in Sierra Leone, with the criminal elements that come from clandestine trade. After Sept. 11, these are not things we can simply ignore.'"
" ... neo-imperialists ... see a world in which readiness to send troops to distant parts of the world to maintain or re-establish order becomes increasingly common. ... 'Whatever else you can say about empire, it had the advantage of maintaining order and suppressing anarchy'"
" ... other thinkers argue that extending American power is precisely the problem. ... 'an ironic possibility: that the very preponderance of American power may now make us not more secure but less secure ... failed states are not just a humanitarian problem, they are a national security problem ... States that have virtually collapsed ... are breeding grounds of instability, mass migration and murder as well as terrorism.'"
"Power is the currency of the international system ... and the United States should use it when it sees fit. To [others] that definition of power is too narrow. American influence in the world ... rests as much on culture — democracy, human rights, feminism, movies, consumerism — as on military hardware. ... what the terrorists 'really object to is American ideas, American culture.' Ultimately, the differences between the multilateralists the unilateralists, the neo-imperialists, the minimalists and all the others "ists" may not be as sharp as many make out. ... democracy in the third world has emerged as a major diplomatic issue. 'It's increasingly clear that the failure of the Arab states to improve the lives of their citizens has created a great fund of discontent and the solution is ultimately democratization' ... " ... [more]
2:07:39 PM
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America and Anti-Americans By SALMAN RUSHDIE
" ... America finds itself facing a broader ideological adversary that may turn out to be as hard to defeat as militant Islam: anti-Americanism, which is presently becoming more evident everywhere. ... the effectiveness of the American campaign may have made some parts of the world hate America more than they did before."
" ... anti-American radicalism feeds off widespread anger over the plight of the Palestinians ... anti-Americanism ... has become too useful a smokescreen for Muslim nations' many defects — their corruption, their incompetence, their oppression of their citizens, their economic, scientific and cultural stagnation. America-hating ... contains a strong streak of hypocrisy, hating most what it desires most ... "
" ... Britain and Europe ... the depth of anti-American feeling among large segments of the population. Western anti-Americanism is an altogether more petulant phenomenon than its Islamic counterpart and far more personalized. ... American patriotism, obesity, emotionality, self-centeredness: these are the crucial issues." ... [more]
1:45:04 PM
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Europe Seethes as the U.S. Flies Solo in World Affairs
" ... 'The Europeans think that the United States is so powerful it can't be constrained.' ... Behind the heated accusations of unilateralism, arrogance, bad manners and oversimplification lie cultural and ideological differences ... Mr. Bush ... wants to change the world ... Europe ... wants to continue to manage it."
" ... the American proposal to ... move to a new doctrine of pre-emption ... justified by ... potential danger alone ..."
" ... 'the U.S. and Europe were slowly drifting apart, but now it looks like they're on a collision course' ... the German president ... warned Americans that international success depended on alliances. ... European officials now sense that they must shout in order to be heard in a warlike, messianic Washington ... America's military weight dwarfs that of the rest of the world, and it is growing heavier ... "
" ... the change in the American psyche after Sept. 11 ... 'I don't think we [Europeans] fully comprehend the impact of a grand innocence and a sense of magnificent self-confidence and invulnerability being shattered in that appalling way' ... 'Why not acknowledge foreign aid and nation- building as important tools in the fight against terrorism?'"
" ... a gentle warning about the hubris of empire. He recalled Kipling's "Recessional:
Far-called our navies melt away;
On dune and headland sinks the
fire:
Lo, all our pomp of yesterday
Is one with Nineveh and Tyre!
Judge of the Nations, spare us yet,
Lest we forget, lest we forget.
Kipling wrote the poem at the height of British imperial power ... " ... [more]
1:29:55 PM
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In Argentina, I.M.F. Impasse Heightens Fear on Economy
" ... Argentine government says it cannot carry out the economic changes that the fund and other creditors are demanding unless it receives fresh money from abroad first, but foreign lenders say they cannot advance the country any new money until after it has shown some results. ... the economy here, battered by a 50 percent devaluation of the peso, a freeze on bank deposits and a partial default on $141 billion in public debt, remains in a state of suspended animation."
" ... a long list of other problems. These include recapitalizing a banking system that has absorbed billions of dollars in losses, amending a new bankruptcy law seen as discriminating against foreign companies, reducing the size of the state bureaucracy and curbing runaway spending by the provinces."
" ... 'the I.M.F. has been so seriously burned by Argentina in the past that it is determined to hold Argentina to a higher standard.' ... Argentina's problems as largely self-inflicted, born of borrowing too freely to finance consumption rather than investment." ... [more]
1:12:45 PM
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On the right side of history [U.S.-European relations re Muslim world]
"The EU supposedly fears massive ‘destabilisation’ of the Muslim world. ... The population of the Middle East is growing at a rate six times faster than that of Western Europe ... Islam is turning out ever greater legions of poorly educated young men with little or no economic opportunity at home and every incentive to head to Frankfurt or Marseilles or Luton and drift into Islamic terrorism while living off Euro welfare. ... if you look at even the official figures for Muslim immigration to Europe. If Washington isn’t getting much support for its plans to take out Saddam now, France and Germany and co. are going to be a lot less keen in five or ten years."
"'American patriotism, obesity, emotionality, self-centeredness: these are the crucial issues.' ... a continuous stream of preposterous criticism of the Americans has had at its core the assumption that such a demotic [of or pertaining to the common people; popular] culture must necessarily be a profoundly stupid one. ... There’s evidently a powerful psychological need among the non-American Western elites to believe that, if America is big, it must also be blundering; if it’s powerful, it must also be clumsy; if it’s technologically superior, it must also be morally inferior." ... [more]
12:33:44 PM
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Friday, February 22, 2002 |
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Japanese Troubles Could Continue
" ... Japanese economy could deteriorate further and that could drive the yen even lower against the dollar. ... Japan was slumping through a 'very serious crisis.' As confidence gradually erodes in the country's ability to rebound, the yen could sink as low as 160 yen against the dollar by the end of the year."
"Separately Thursday ... Koizumi said the quasi-public corporation charged with helping the country's strapped banks should buy up their bad loans at market value. ... [others] said earlier ... should buy the loans at book value." ... [more]
2:42:00 PM
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Thursday, February 21, 2002 |
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Bush turns away from the weaklings of Europe
"Europeans and Americans are now living on different planets ... the huge gap that now exists between the world view of Europe’s policymakers and their American counterparts. .... To the Bush team, the War on Terror is a defining moment in history ... The consensus in Washington ... is that Europe is irrelevant to the world today. Because it will not spend what is necessary to matter as a military power, its views on issues that involve the use of such power are of no consequence ... the increase in America’s defence spending is almost half again as large as the total budget of Europe’s biggest defence spender, the UK."
" ... there is an unfortunate coincidence of timing: the War on Terror has made clear Europe’s impotence at precisely the time that it has demonstrated America’s overwhelming technological advantages. ... The military weakness of Europe is only one factor ... [some think] Europe is completely inward-looking ... They contrast this with outwardlooking America. While Europe fusses over Macedonia and the problems of French farmers, America is developing new, innovative long-run policies towards countries that really matter in the 21st century — China, Russia, India."
" ... those who matter here are convinced of two things: the important business of the world will be done by America, which will not let any coalition dictate its mission; and Europe is largely irrelevant to our efforts to make America safe from further harm. There is more. Several Administration economists are convinced that Europe is doomed to economic weakness — low growth and high unemployment. Its military irrelevance will be matched by its economic irrelevance ..."
" ... doesn’t understand why the European elites don’t see in the collapse of Argentina a warning. Fixed exchange rates don’t work when labour can’t move freely among nations in the fixed-rate area ... All America can do ... is wait for the strains on the euro to become intolerable, and then politely refrain from saying 'I told you so.' ... he can understand Europe’s frustration, it once having been a great centre of Western culture and power, now reduced to irrelevance." ... [more]
3:38:19 PM
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Mending the world's piggy bank [IMF Reform]
" ... Argentina[s] ... economic and financial crisis [causes] attention ... to focus on ways of preventing future crises, and making those that do occur easier to deal with ... "
"Does it refuse further assistance and precipitate the crisis; or continue to prop up what may well be an unsustainable situation? Either way, it is bound to be criticised—and either way the crisis will, eventually erupt. ... new impetus to the efforts to improve crisis prevention. ... the administration’s preference for handling issues such as Argentina through the IMF rather than bilaterally."
" ... one of the central issues that everyone seems to agree needs tackling: a more orderly way of achieving sovereign-debt restructuring. ... floated some ideas ... given a cautious ... a green light to develop them further. Key to this is the American attitude, which has been markedly receptive to such ideas ... A key aim of such reforms ... to increase the flow of funds going to emerging markets, at lower interest rates."
"During the third-world debt crisis of the early 1980s, it was usually possible to get most creditors round a table to work out a restructuring deal: ... most lending to emerging-market economies ... syndicated bank lending. Now most lending ... bonds. The proportion of outstanding public external debt owed to private creditors via bonds ... up from 13% in 1980 to 60% in 2000. Bondholders are anonymous ... "
"The proposals being discussed will need to be turned into a detailed reform plan quickly if the current interest in finding a better way to handle international financial crises is not ... to evaporate. But the Argentine experience ... spur the rich nations to act before the next crisis comes ... "
... [more] 
3:24:51 PM
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[Japan] The non-performing country
" ... Japan's triple menace of debt, deflation and political deadlock. ... Japan's economic slide ... deflation and depressed spending continue unabated, bringing fears of an accelerating downward spiral. ... falling prices have continued to be matched by dwindling jobs. ... rickety banking system, and from the common knowledge that the government must one day do more to deal with the banks' bad loans ... job losses follow collapsing balance sheets ... as falling prices squeeze profits and make it harder ... to service their debts ... 19,000 companies went bankrupt last year ..."
" On April 1st ... a pair of decisive changes. Banks ... will be made to value ... shares at market prices. Because equity prices have fallen sharply, the banks will have to show losses of more than one-and-a-quarter times their operating profits. ... those losses ... could prompt more depositors or investors to flee. ... [also] the government will begin rolling back the blanket deposit ... Many depositors have already moved their money ... The risk remains that the partial repeal will cause bank runs. ... These looming changes ... rais[e] the odds that Japan's long-awaited crisis will at last arrive, leading to some kind of economic meltdown ... "
"Worse will follow if bond investors come to share the alarm. ... Japan's official public debt has risen to 130% of GDP. The budget ... will easily drive the ratio above 140% within a year. ... Japan's fiscal position ... has already prompted downgrades by the rating agencies: ... Moody's said it might lower Japan's credit rating to the same levels as Poland and South Africa. ... Unlike most previous bouts of panic, this one has far more potential to cause trouble in the rest of the world ... Japan remains a big trader, investor and lender, so any collapse would affect all its counterparties."
" ... political obstacles to reform ... [Koizumi] has not shown himself determined enough to take on the forces obstructing reform ... too willing to compromise with them ... "
" ... three developments ... First, he could not reform much since the despised 'resistance forces' in the LDP and the bureaucracy have watered down all his plans. Second, these forces, having bought time, have cashed in on the recession by persuading people that Japan needs to pursue 'anti-deflation' (by which the LDP means more public spending) before structural reforms (which would cut off the tap). Thirdly, Mr Koizumi sacked Ms Tanaka, foolishly provoking a backlash and losing his only real asset, his popularity."
... [more]
2:57:46 PM
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[China represents] Proliferating challenges
" ... Underlying tensions ... over weapons proliferation"
" ... CHINA has its worries about American power and where it might next be displayed ... China’s president, Jiang Zemin, above all wants to keep the relationship stable, as he focuses his attention on affairs at home. ... For Mr Jiang, the events of September 11th provided a welcome pretext to strengthen ties with America ... "
" ... the relationship is still just as plagued by deep-seated misgivings on both sides as it was before September 11th. ... As the director of the CIA ... said, China 'remains deeply sceptical' of American intentions in Central and South Asia ... Mr Bush will make clear his concerns about missile proliferation ... saying non- proliferation was 'a make or break issue' in the relationship. ... there are still no clear signs that a breakthrough is imminent."
" ... Vice- President Hu Jintao. ... Those who meet him come away little the wiser about how he will lead China through a period of wrenching social and economic change. ... For America, such uncertainty in a country so crucial to its security interests should be a cause of concern." ... [more]
2:16:29 PM
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The Texan and His Rogues
" ... world-wide hunt for anti-American baddies. But the three states which have suddenly become the focus of the Manichaeian world view, with which Americans reduce complex problems to manageable confrontations between good and evil ... the "underdogs" are only left with an "asymmetric response", resorting to unconventional means and weapons ... Bush is now making every effort to deprive so-called rogue states of such means ... " ... [more]
2:05:52 PM
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Wednesday, February 20, 2002 |
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China, the Uncertain Ally
" ... are we finally entering a new relationship with Beijing?"
" ... Chinese Communists are quite capable of compromise ... the antiterrorism war ... give[s] the two nations common cause ... annual trade surpluses with the United States of $50 billion and more ... President Bill Clinton in 1997 and 1998 gave Beijing the equal treatment it craves."
"After Sept. 11, Beijing ... seemed to become a lamb in the fold of antiterrorism. Beijing saw an opportunity to win sympathy for its undemocratic policies against Muslims in Xinjiang, Buddhists in Tibet, and ethnic minorities in other frontier zones."
"Americans see the war against terrorism as a fight against broad forces opposed to freedom. Beijing sees the war as a defense of the unity and security of authoritarian China. There is a fine line between antiterrorism and imperial authority."
"There is no way the United States can fully please the Chinese government. Beijing's ire at hegemonists (that's us) is a theology. We are needed as an adversary to shore up the legitimacy of the Communist party-state. ... its leaders know that no long-term economic or security interest is served by confronting the United States. For all its fiery words, China, a lesser power, respects the strength of a superpower."
"The next China drama will unfold not in foreign relations but at home, as the Internet and life in the World Trade Organization reveal the illogic of market Leninism. Traveling one road in economics and a different one in politics makes for neither a smooth ride nor a settled destination. How that schizophrenia is resolved will determine China's world role." ... [more]
4:47:01 PM
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IMF Deputy Managing Director Shigemitsu Sugisaki's views on the Japanese global outlook. 1.29.2002
1. The Global Outlook
" ... begin by looking at the situation of the world economy today. ... September 11 made an already very difficult global economic situation worse. ... by mid- 2001, become a synchronized downturn across almost all major regions of the world. This synchronicity ... common shocks ... bursting of the IT bubble ... increased international linkages in the financial and corporate sectors ... lack of progress with structural reforms in Japan and the euro area that have prevented these countries from taking up the slack when the long expansion in the United States came to an end."
" ... the Fund has reduced its projection for world growth this year by one percentage point, to 2.4 percent, the lowest since 1993. ... macroeconomic level ... sharp reactions in ... consumer and investor confidence, financial markets, and commodity prices."
" ... stimulative macroeconomic policies implemented in a number of countries ... completion of the inventory correction, and lower energy prices. The key uncertainties relate to the timing of a rebound in confidence, the future course of corporate earnings and investment, and the possibility that still-richly valued equity markets could see a substantial correction."
" ... to sum up ... there remains a risk of a worse outcome. ... The stronger macroeconomic fundamentals in most regions—including lower inflation, generally improved fiscal positions, and more flexible exchange rates— ... should thereby help to keep the global recovery on track."
II. Short-Term Economic Outlook for Japan.
" ... the economic situation, outlook, and policy requirements in Japan. ... capital spending will decline ... Household spending ... remain weak given the severe state of the labor market ... the Fund is projecting a further decline in real GDP of 1 percent, with deflation likely to intensify."
" ... fundamental structural weaknesses in the Japanese economy ... failure to unwind the excess stocks of capital and debt from the bubble years ... slow adjustment to the forces of globalization and technical change, as Japan has lagged in shifting to innovation and productivity—rather than investment and exports —as the engines of growth. The failure to embrace a regulatory regime capable of freeing resource allocation and spurring innovation has also contributed."
III. How To Restart Sustained Growth In Japan?
" ... vigorous economic restructuring could well intensify recessionary pressures in the economy in the short run. ... he critical banking and corporate sector issues that are at the heart of Japan's economic malaise ... "
"Financial sector: No country can grow for an extended period of time without a healthy and profitable banking system. ... coping with loan losses has become more difficult as banks' operating profits have deteriorated ... Decisively addressing the problems in the banking sector is absolutely a top priority."
"Corporate restructuring: Excess leverage in Japan's corporate sector is of course the counterpart of the massive burden of problem bank loans ... A key payoff ... from banks' bad loan disposal is thus not only to restore health to the banking system and allow banks to again perform their intermediation function successfully, but also to encourage restructuring in the real economy, and inevitably, the prompt exit of nonviable companies."
"Fiscal policy: policy efforts to lift Japan's economy out of recessions ... have left the public sector with very high deficits and debts, both in absolute terms and relative to other major industrial countries. Restoring soundness to Japan's public finances will be an immense challenge for policy makers—and one that will take many years to resolve. ... broadening of the personal income tax base, while the further de-earmarking of road-related tax revenues could greatly improve the quality of fiscal spending. A reorientation of the tax system—from direct toward indirect taxation—could also contribute to reducing the distortions from the present over- reliance on a relatively small set of corporate and salaried incomes."
"Monetary policy: ... extraordinary and volatile demand for funds since September. Nevertheless, Japan's consumer price index has now been falling on an annual basis for 2½ years ... the deflation problem ... beyond the one-year horizon, a strong case can be made for aiming for a positive rate of inflation ... to reduce risks that Japan could once again find itself constrained by the zero bound on nominal interest rates."
"Concluding remarks: ... could result in a weak yen in the short term ... A key issue is the regional and multilateral impact that this would have. ... further delays in implementing the difficult structural reforms that I have discussed could prove very costly—raising the risks of financial instability and prolonging the period of economic malaise." ... [more]
4:36:43 PM
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Bond Market Goes Cold in Japan
" ... government bond market, the world's largest, has gone dead cold. ... "
"But investors are also shunning bonds, pushing prices down ... the government will be forced to offer higher coupon rates to attract buyers ... a looming deadline for the country's banks as the fiscal year ends on March 31. To offset an estimated ... ($36 billion) in losses on their stock portfolios ... the banks are selling ... long-term bonds."
"But the real issue is not liquidity, it is risk."
"The shift into cash and other liquid assets ... "
"Mr. Koizumi faces a puzzle: How to strengthen the economy and stock prices without hurting the bond market and foreign investors, who are crucial players here. ... a weak yen may also fuel inflation that would eat into bond prices and scare off foreign investors." ... [more]
4:01:42 PM
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Tuesday, February 19, 2002 |
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'The Chastening': When the I.M.F. Took a Shelling [Book Review]
"The global economy was always much shakier than most people imagined. One of the most severe economic crises since World War II occurred in 1998, a crisis of confidence that swept through the developing world and even threatened to spread to the United States. ... The most optimistic interpretation that can be placed on the crisis was that it proved that ''crony capitalism'' is incompatible with open capital markets ... "
" ... the guardians of the world's financial stability were often making it up as they went along. They failed to see the storm coming ... The I.M.F ... its basic philosophy -- belief in free markets tempered by a safety net ... "
" ... we could well see a repeat of the crisis of 1998. ... this time the outlook appears much darker. ... the Federal Reserve has few weapons left in its armory. Islamist terrorism is not the only horror that America has to worry about." ... [more]
4:18:42 PM
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Japan's Debt Under Study for New Cut in Rating
" ... country is not ... deal[ing] with deflation and debt ... Moody's ... was reviewing Japan's yen-denominated debt for a possible downgrade in the next three months."
"The warning ... increases the pressure ... before President Bush arrives on Sunday to overhaul the stagnant economy and keep prices from falling."
" ... there could be credit risk contagion between domestic and foreign financial markets ... and Japan's woes could begin taking a toll in the United States. ... draw up a strategy to combat deflation, which Moody's said was making "a serious government debt problem worse."
"The government expects to owe 693 trillion yen ($5.2 trillion) in long-term debt by March 2003, equivalent to 140 percent of the country's gross domestic product or more than $45,000 for each citizen. Financial commitments to state- sponsored companies add further to the burden." ... [more]
3:55:54 PM
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Thursday, February 14, 2002 |
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German let-off signals trouble for euro
"THE credibility of the European single currency was
severely undermined yesterday ... "
"The European Commission had wanted to issue an 'early warning' to force Berlin to curb an unsustainable budget deficit ... "
"[Germany's] deficit is forecast to rise to 2.7 per cent this year." ... [more]
| The forecast current fiscal deficit in Japan for the fiscal year 2000 was nearly 10%. Actual: General Government Operations Balance = -34,111.6 billion yen; Gross Domestic Production for Q301 = 121,963.9; FY00Deficit/Q3GDP*4 = 7% Data: Economic and Financial Data for Japan [jrr] |
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3:27:20 PM
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Crazier Than Thou By THOMAS L. FRIEDMAN
" ... America needs to launch a serious effort to end Israeli-Palestinian violence, because it's undermining any hope of U.S.-Arab cooperation." ... [more]
3:22:24 PM
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Tokyo ... hopes of recovery plan
"Prime Minister Junichiro Koizumi ordered his economic advisers to devise a deflation-fighting, economic recovery plan by the end of this month."
"Japan, hit by falling prices, has slid into its third recession in a decade. Deflation is a serious problem for the world's second-largest economy, bringing down income and further dampening economic activity." ... [more]
8:38:12 AM
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Japan's current account surplus posts fourth straight increase
"The current account balance is the difference between Japan's income from foreign sources and payments on foreign obligations. It is considered the broadest yardstick of trade, measuring exchanges of goods, services, tourism and investment before adjustment for seasonal factors."
"Last year was the first that Japan's income surplus exceeded the trade surplus since the ministry began using the current method for calculating the current account in 1985 ... " ... [more]
8:33:21 AM
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Tuesday, February 12, 2002 |
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G7 ... optimistic note [re] the prospects for renewed expansion in the industrial world. ... progress on many of the issues facing the international financial community was limited."
"there was ... the prospect of 'resumed expansion'. ... went on to identify a host of problems affecting the world economy as a whole ... as well as the continuing threat of international financial instability ... "
"the economic outlook for the G7 ... glibly optimistic. ... America ... big question- marks over the willingness of American consumers to continue to prop up demand. The high debt burden of many Americans, coupled with expected further rises in unemployment ..."
" ... efforts to boost European competitiveness have been lacklustre at best ... structural problems ... deregulation and labour-market flexibility."
" ... apparent absence of any discussion of Japan’s problems. ... shows no sign of tackling its deep-rooted problems. ... little sign of a readiness to confront the longstanding troubles of the banking sector." ... [more]
2:59:32 PM
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Washington Post series on Saudi Arabia: Part 1 Part 2 Part 3
"The sharing of power between the secular and religious authorities of Saudi Arabia ... "
"The Saudis have made an ongoing effort to prevent Americans from understanding them, particularly their politics."
"The ruling House of Saud is particularly sensitive to the views of its Ulema because it depends on their support for its legitimacy."
"Saudi religious leaders were pursuing their own agenda throughout the Muslim world ... "
"Saudi religious leaders [are] pursuing their own agenda throughout the Muslim world ... In this situation ... it is likely that the religious establishment will gain a relatively larger share of power and, therefore, represent a greater challenge to the U.S."
"The two countries no longer share the same evaluation of the strategic situation in the Middle East. Saudi Arabia has achieved a new detente with its traditionally hostile neighbor, Iran, which the United States still considers a hostile power. The Saudis do not believe a weakened Saddam Hussein can threaten them, while Americans debate whether to invade Iraq (a move Saudis say would cause a crisis in relations with the United States). And the Saudis are staunch defenders of Yasser Arafat, the Palestinian leader, and his cause."
"In the face of persistent differences ... U.S. administrations and Saudi governments have created a veneer of comity that tends to hide small and large disagreements alike. 'When there are disagreements, they go unresolved because resolving them would require contention and debate and argument ... What we have is a relationship that is based not on shared values, but on shared interests' -- security, and oil."
2:20:32 PM
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Advice to a Superpower By MARGARET THATCHER
"America ... has proved to itself and to others that it is ... the only global superpower, indeed a power that enjoys a level of superiority over its actual or potential rivals unmatched by any other nation in modern times."
" ... the Western world and its values are still under deadly threat ... Islamic extremism today ... is an armed doctrine."
"The first phase ... a military assault on the enemy in Afghanistan"
"The second phase ... should be to strike at other centers of Islamic terror"
"The third phase is to deal with those hostile states that support terrorism and seek to acquire or trade in weapons of mass destruction." (Iran, Syria, Libya, Sudan, North Korea, Saddam Hussein)
" ... freedom demands eternal vigilance. And for too long we have not been vigilant." ... [more]
2:01:09 PM
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Monday, February 11, 2002 |
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Proposed Bush Increase in Military Spending
"There is a United States special forces dog-handler who meets journalists, diplomats and aid workers off the UN flight to Kabul. His job is to search luggage and ensure the security of US troops in Afghanistan. He is short, gingery and aggressive. His skills at persuasion are limited to shouting at the milling crowd: 'Stand back! Stand back! My dog will bite!'"
"Last week that phrase had become the defining motto and operating credo for the military and foreign policy of the Bush administration."
"The question the rest of the world is asking itself is: Who is the enemy America is arming itself so against? And why?"
"And the aim of this power?"
"'The war on terrorism,' says Professor Paul Rogers, of Bradford University's Department of Peace Studies, 'is simply a euphemism for extending US control in the world, whether it is by projecting force through its carriers or building new military bases in central Asia.'" [more]
2:31:59 PM
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If Japan's economy goes down, will the rest of us fall along with it? The panic spreads ... [more] [via Business Daily News]
"Japan represents the "largest economic crisis since the 1930s ... "
"The world is heading for a once-in-a-century economic crisis ... "
" ... with perhaps $11 trillion in savings ... [but] the total on- and off-balance-sheet claims on the household, corporate and government sectors in Japan are about $30 trillion ... six times Japan's $5 trillion GDP. (U.S. public and private debt is $19 trillion, two times GDP.)"
" ... being made worse ... [by] deflation ... the most pronounced in the world. ... it can spread ... This would send a price shock into the U.S. and Europe at a time when [the U.S. and Europe] are flirting with deflation."
" ... Japan faces a debt bomb at home ... a run on deposits [would cause] an economic contraction [to] sweep America and the globe. ... Japan is the world's main source of capital. ... Japanese banks have already begun to repatriate some of their money."
"Paul Volcker ... says that he can't recall in his career a touchier global economic situation. 'The U.S. situation is fragile: The stock market feels good, the short-run outlook is reasonably good, but it is fragile in that it depends on consistent and big imports of foreign capital,' Volcker says. 'This is not going to last forever.'"
"Japan has a sovereign credit risk rating of Aa3 with a negative outlook, the worst of any developed nation. ... 'There is no record of any government being able to repay debts equal to several times the annual output of its country in real money. Japan will be no exception.'"
"A true solution would likely ... bankrupt more than a third of Japanese companies ... "
"When asked if Japan faced the danger of a Russian-style collapse, Shoichiro Toyoda, the honorary chairman of Toyota Motor, says, 'It is already in the middle of one,' but he complains that the country's leaders don't recognize it."
12:44:39 PM
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Sunday, February 10, 2002 |
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"Chris Patten, the EU commissioner in charge of Europe's international relations, has launched a scathing attack on American foreign policy - accusing the Bush administration of a dangerously 'absolutist and simplistic' stance towards the rest of the world."
"As EU officials warned of a rift opening up between Europe and the US wider than at any time for half a century, Mr Patten tells the Guardian it is time European governments spoke up and stopped Washington before it goes into 'unilateralist overdrive'."
"'Gulliver can't go it alone, and I don't think it's helpful if we regard ourselves as so Lilliputian that we can't speak up and say it,' he says in today's interview."
"Mr Patten's broadside came as the French prime minister, Lionel Jospin, warned the US yesterday not to give in to 'the strong temptation of unilateralism'. "
"Like France, Mr Patten singled out Mr Bush's branding of Iraq, Iran and North Korea as 'an axis of evil'." [more]
11:13:46 AM
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Saturday, February 09, 2002 |
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"The Bank of Japan left monetary policy unchanged today, a decision that puts additional pressure on the government to bolster the nation's weakening financial system and answer mounting criticism from abroad."
"The central bank's monetary policy board, in an unusually brief meeting lasting less than six hours over two days, said only that it would pump more money into the markets 'should there be a risk of financial market instability.'"
"But rising long-term bond prices, a collapsing stock market and a weakening yen are pushing the banking industry here into crisis. Ahead of the end of the fiscal year on March 31, banks are dumping bonds to offset losses on stocks."
"There are growing signs that the rest of the developed world is losing patience with Japan's halting pace in coming to grips with the crisis." ... [more]
10:09:59 AM
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Sunday, February 03, 2002 |
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Clintonism Shredded
3 February 2002:
"... Ms. Albright should be excused; the policies she executed as Bill Clinton’s secretary of state are in tatters. She being forced to witness the president opting for the uncompromising line on terrorism advocated by vice president Richard Cheney, defense secretary Donald Rumsfeld and national security adviser Condoleezza Rice, and dropping the more moderate line of her successor. Secretary of state Colin Powell is politically isolated."
"The White House has made it clear it will have no patience with the uncommitted. Hard line US Deputy Secretary of Defense Paul Wolfowitz was sent to Munich to warn European allies that Washington would take a dim view of anyone who tried to sit on the fence." [Debka]
12:35:36 PM
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... Furthermore, the need to protect Persian Gulf oil is a myth, as economists across the political spectrum agree. Saudi Arabia and the other Persian Gulf nations need to sell oil more than the United States (and other countries) need to buy it.
CHARLES PEÑA
Washington, Jan. 29, 2002
The writer is a senior defense policy analyst, Cato Institute. [letter to editor, NYT]
12:02:16 PM
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Wednesday, January 30, 2002 |
Greed, fear and Saddam Hussein article in Economist.
"Iraq is trying to mend fences in the region, even with its fiercest adversary--Iran." ... "And it is looking for friends in unlikely places."
"A real strategic rapproachement is unlikely, given the legacy of mistrust." "Saudi Arabia harbours fears."
"Those who would (advocate the overthrow of Saddam) have consistenly failed to explain why his removal is an urgent necessity rather than a desirable outcome."
"Iraq's neighbors (except Kuwait) no longer consider Iraq to be a big security threat."
"Iraq has launched another of its sporadic charm offensives." ... "praising the Gulf monarchies, waxing on the virtues of Arab unity ..."
"Arab commentators (see) an attempt to bring Iraq back into the (Arab) fold at a time when a joint Arab approach is urgently needed to face the consequences of America's anti-terrorism campaign."
1:05:16 PM
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The noted management philosopher Peter Drucker describes how "complementary" trade was followed by "competitive" trade, then to be followed by the adversarial trade to which we are all now accustomed:
"Trade in Adam Smith's eighteenth century was 'complementary' trade. England sold wool to Portugal that Portugal could not produce, while Portugal sold wine to England that England could not produce. The English bought from India cotton that they could not grow, in exchange for machine-made cotton cloth that eighteenth-century India could not produce. The entry of the United States and Germany into the world economy in mid-nineteenth century brought about a shift to 'competitive' trade. The Americans and the Germans both sold chemicals and electrical machinery in competition with one another and bought chemicals and electrical machinery from each other. Almost unknown in 1850, competitive trade had become dominant by 1900.
"The emergence of new, non-Western trading countries -- foremost the Japanese -- creates what I would call 'adversarial' trade.
"Complementary trade seeks to establish a partnership. Competitive trade aims at creating a customer. Adversarial trade aims at dominating an industry. Complementary trade is a courtship. Competitive trade is fighting a battle. Adversarial trade aims at winning the war by destroying the enemy's army and its capacity to fight.
"Reciprocity is clearly the only trade policy that can effectively work in a world economy that features adversarial trade. Free trade can work under reciprocity if the other side reciprocates. But there will be protectionism if that is what either side chooses.
"Reciprocity is fast emerging as the new integrating principle of the world economy. Unlike traditional free trade and traditional protectionism, reciprocity will not be confined to trade in goods. Services have already become as important as goods in the world economy and require reciprocity even more. The treatment of investments is just as important as trade. Equally important will be reciprocity with respect to intellectual property, patents, technological trade-marks, copyrights, but also with respect to professional services."
12:12:20 PM
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Tuesday, January 29, 2002 |
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Monday, January 28, 2002 |
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Saturday, January 26, 2002 |
United States passivity in the Middle East discussed. Dangerous policy?
9:53:58 AM
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Civil violence and protest in Argentina as financial crisis continues.
9:48:56 AM
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Wednesday, January 23, 2002 |
World Affairs
Japanese banks face possible runs if government total deposit guarantee is removed with large known banking problems unresolved.
11:40:29 AM
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Tuesday, January 22, 2002 |
World Affairs
Argentina's financial problems are becoming world concern.
8:47:49 AM
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Sunday, January 20, 2002 |
World Affairs
Argentina and US relations article.
10:27:42 AM
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Thursday, January 17, 2002 |
Radio Log
This is a test of the world affairs category.
10:21:18 AM
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© Copyright 2003 Michael Jamison. E-Mail: 
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