Archive for the ‘International’ Category

The shape of the world arms trade

May 6, 2016

bi_graphics_usrussiachinamap-1

Source: Business Insider.

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U.S. has free trade pact with tax-haven Panama

April 5, 2016

Revised and updated.

ofshorefirmsarticle-doc-9c974-1Hf8o1PFQk6fd5ff048dd08d6c36-547_634x334.

In the light of the Panama Papers leaks of a Panama law firm’s files on tax havens, it is interesting to note that the United States signed a free trade agreement with Panama in 2012.

According to Senator Bernie Sanders, the agreement restricted the right of the United States to crack down on abusive tax havens.

Sanders voted against the agreement.  Senator Hillary Clinton voted for it.  Ted Cruz wasn’t yet a member of the Senate at the time.

Tax havens were a serious concern even before the trade agreement was signed, and the concern went far beyond Panama.  Still, the agreement with Panama didn’t help.

As the chart above shows, the Panamanian law firm Mossack Fonseca registered most of its shell companies in countries other than Panama.  Keep in mind that Mossack Fonseca is not the only law firm that registers shell companies in tax havens.  It is not even the largest such firm in Panama.

Here is what Sanders said about the free trade agreement.

Panama’s entire annual economic output is only $26.7 billion a year, or about two-tenths of one percent of the U.S. economy.  No-one can legitimately make the claim that approving this free trade agreement will significantly increase American jobs.

Then, why would we be considering a stand-alone free trade agreement with this country?

Well, it turns out that Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in off-shore tax havens.   And, the Panama Free Trade Agreement would make this bad situation much worse.

Each and every year, the wealthy and large corporations evade $100 billion in U.S. taxes through abusive and illegal offshore tax havens in Panama and other countries.

According to Citizens for Tax Justice, “A tax haven . . . has one of three characteristics: It has no income tax or a very low-rate income tax; it has bank secrecy laws; and it has a history of non-cooperation with other countries on exchanging information about tax matters.  Panama has all three of those. … They’re probably the worst.”

Mr. President, the trade agreement with Panama would effectively bar the U.S. from cracking down on illegal and abusive offshore tax havens in Panama.  In fact, combating tax haven abuse in Panama would be a violation of this free trade agreement, exposing the U.S. to fines from international authorities.

In 2008, the Government Accountability Office said that 17 of the 100 largest American companies were operating a total of 42 subsidiaries in Panama.  This free trade agreement would make it easier for the wealthy and large corporations to avoid paying U.S. taxes and it must be defeated.  At a time when we have a record-breaking $14.7 trillion national debt and an unsustainable federal deficit, the last thing that we should be doing is making it easier for the wealthiest people and most profitable corporations in this country to avoid paying their fair share in taxes by setting-up offshore tax havens in Panama.

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African factory workers in deepest Iowa

March 14, 2016

Writer Paul Street reported for Counterpunch on his experiences working alongside Congolese and Sudanese immigrant workers in a Procter & Gamble factory in Iowa.

Here in and around the liberal bastion of Iowa City, a university town where wage-earners’ working class lives are all but invisible to a large local cadre of privileged and mostly white academicians, the lower end of the workplace and the job market – the factory and warehouse positions filled by temporary labor agencies, custodial jobs, taxi drivers, etc. – is crowded with immigrants.

Paul Street

Paul Street

It is chock full of nonwhite people who feel fortunate to have any kind of job that helps them escape danger, misery terror, and oppression in far-away places like the Democratic Republic of the Congo, Rwanda, Sudan, Honduras, Mexico, and Haiti.

Does anyone really believe that Iowa City’s giant Procter & Gamble plant – my low-wage, finger-wrenching workplace between from September of 2015 through February of 2016 and the origin point for many of North America’s leading hair-care products – is crawling with Congolese and Sudanese workers, along with a smattering of Central Americans, Caribbean islanders, marginal whites, Black Americans, and Africans from other states, because P&G (the nation’s 25th largest company and its top consumer packaged goods firm by far) is nobly committed to racial and ethnic diversity and a world without borders?

Of course it isn’t.  P&G reserves its better paid and more “skilled” and secure “career” production jobs almost completely for non-Hispanic whites.  These “plant technician” jobs require no more than a GED (high school equivalency) degree and start at around $20 an hour.

Street said P&G relies on Staff Management / SMX, a temporary help agency, to provide its lowest-paid workers.  They get $10 to $11.85 an hour.  SMX gets an additional fee—Street heard that it was $6—on top of that.

The work includes filling boxes on rapidly moving assembly lines with shampoo, conditioner and mouthwash bottles, building and wrapping pallets at the end of never-ending packaging-assembly lines, putting stickers on one shampoo or conditioner bottle after another, and more and worse.

It’s all performed in exchange for inadequate wages (far lower than they ought to be thanks to the SMX rake-off) and at constant risk of being sent home early and without warning since there’s often “no more product today” (that’s called “labor flexibility” and it’s no small problem for workers who already paid for a full day’s worth of child care).

He himself quit because, he found after five months of pulling apart tightly glued boxes, he could no longer clench and un-clench his fists.  The function in his hands returned after a week off the job.

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Does China’s currency manipulation hurt the US?

March 10, 2016

Hillary Clinton, John Kasich, Marco Rubio, Bernie Sanders, Donald Trump and other American politicians accuse the Chinese government of currency manipulation—that is, of keeping the exchange rate for its currency artificially low.

yuanperdollarchinareservesscreen-shot-2013-02-04-at-12-03-15-pm

As the charts indicate, this does not seem to be supported by the facts.  Notice that although the lines in the two charts are going in opposition direction, they both indicate that, over time, it takes fewer yuan to buy a dollar.  In other words, the value of the yuan over time is rising, not falling.

chinausdollar

Even if China was manipulating its currency in a nefarious way, I think it is futile for the U.S. government to demand that foreign countries act against their own perceived self-interest.

It is within Washington’s power to devalue the dollar, and there are reasons why this is not done.

Much of the world’s business is done in dollars.  This includes world oil sales.  Most of these dollars pass through American banks.

This is a source of Wall Street’s power and also Washington’s power.  It is why economic sanctions are so powerful a weapon of American foreign policy.  It is hard for foreign countries to avoid dealing with the United States and American banks.  As a debtor nation, the United States would not have nearly so much economic power otherwise.

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Free trade, fair trade and economic nationalism

March 9, 2016

The theory of free trade is that everybody benefits when individuals and corporations based in different nations are allowed to buy and sell goods and services without restriction.

India and trade DilemaUnfortunately most of the world operates on a different theory—that the exchange of goods and services should be to the benefit of the nation, not the corporation or the individual.

Subcontracting of manufacturing by, for example, Apple Computer to the Chinese company Foxconn is of mutual benefit to Apple and Foxconn, but it is not of mutual benefit to the USA and China as nations.  It is China’s gain and America’s loss.

Governments of China, Japan, Germany and other countries regard regard the unit of international economic competition as the nation rather than to the individual or the corporation.  They don’t care about the economic benefit to the trading partners.  They’re concerned about the economic benefit to the nation as a whole.

If an American corporation wants to do business in China or Japan, its executives have to provide something that benefits the Chinese or Japanese economy—a transfer of technology, or the creation of manufacturing jobs.

You have the strange situation of American business corporations dictating policy to Washington while kowtowing to Beijing.

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US uses WTO to block India’s solar power plan

March 2, 2016

CROP-solar-power-india-800x400India has been told that it cannot go ahead as planned with its ambitious plan for a huge expansion of its renewable energy sector, because it seeks to provide work for Indian people.  The case against India was brought by the US. 

The ruling, by the World Trade Organisation (WTO), says India’s National Solar Mission − which would create local jobs, while bringing electricity to millions of people − must be changed because it includes a domestic content clause requiring part of the solar cells to be produced nationally.

Source: Climate News Network (Hat tip to Bill Harvey)

The World Trade Organization rules that governments can’t subsidize infant industries because subsidies are trade barriers.   The theory is that they are equivalent to tariffs because they give the home team an advantage.

WTO rules have been used to penalize solar and renewable power industries in the United States, Canada, China and other countries.

The problem with this is that once a particular nation or business monopoly has established dominance, it is very difficult for a newcomer to break in.  That is why almost all industrial nations that came after Britain developed behind tariff walls, and why leaders of Britain, the first industrial nation, advocated free trade.

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What to do when the Saudi monarchy falls?

February 22, 2016
Secretary of State John Keller with King Salman bin Abdulazziz

Secretary of State John Kerry with King Salman bin Abdulazziz

Photo Credit: The Atlantic.

The United States, back to the times of Henry Kissinger and maybe Franklin Roosevelt, has based its Middle East policy on support for the Saudi Arabian monarchy.

Washington has treated the Saudi monarchy’s enemies (except for Israel, and maybe Israel is not that much of an enemy) as its own enemies—Iraq’s Saddam Hussein, the ayatollahs in Iran, the Assad regime in Syria and even the Shiite community in Yemen.

In return, the Saudi monarchs have kept oil prices under control, charged for oil in dollars and deposited those dollars in U.S. banks, and bought billions of dollars with of weapons from American aerospace and defense contractors.

But Sarah Chayes and Alex de Waal, writing in The Atlantic, warn that the Saudi Arabian monarchy, like the rule of the Shah in Iran, cannot go on forever.   And like the Shah, the Saudi royal family is ripe to be overthrown  by militant, anti-American religious zealots.

The Saudi government has appeased these zealots by encouraging them to go wage jihads in foreign lands.  The best result, from the Saudi perspective, is that they die fighting and never come home.  The next best result is that their identities are known and they can be tracked.

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Progress, poverty and inequality

January 25, 2016

_87760046_world_wealth_disparity_624gr
inequality-chart-OUSSource: Oxfam.

I can’t get my mind around the recent report by Oxfam that 62 families have greater combined wealth than half the world’s population, which is between 3 billion and 4 billion, and that 1 percent of the world’s population has greater wealth than the remaining 99 percent.

I can’t reconcile this with studies by people such as Hans Rosling and Max Roser showing that the overall well-being of the world’s population is improving.

ourworldindata_the-life-expectancy-of-the-world-population-in-1800-1950-and-2012-–-max-roserSource: Our World in Data.

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Saudi be-headings and Iranian hangings

January 13, 2016

The fundamental fallacy which is committed by almost everyone is this: “A and B hate each other, therefore one is good and the other is bad.”         ==Bertrand Russell, in 1956

Execution in Saudi Arabia

Execution in Saudi Arabia

One thing to remember about the escalating Saudi-Iran conflict is that the two sides are more alike than they are different.   Both are countries in which you can be executed for expressing forbidden political or religious opinions.

The Iranian government has denounced Saudi Arabia for its execution of the dissident Shiite cleric Nimr al-Nimr, along with 46 other opponents of the regime.  But the Iranian government in fact executes more people in any given year than the Saudi government.

Execution in Iran

Execution in Iran

The world death penalty leader is China, followed by Iran as No. 2 and Saudi Arabia as No. 3.

The Saudi government executes people by be-headings, which is gruesome but, if done by a skilled headsman, is relatively quick, even compared to U.S. electrocutions and chemical injections.

The main Iranian method of execution is by slow strangulation, which can take as long as 20 minutes.

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China’s debt threatens its economic miracle

January 11, 2016

asian-debt-has-rocketed-since-the-crisis-while-the-us-has-paid-down-its-debts-as-a-percentage-of-gdp

I read a couple of articles the other day about how China’s amazing economic growth may hit a wall because of overhanging debt.

Countries get in trouble when the overall debt—governmental, individual, business and financial—increases at a faster rate that the output of goods and services (GDP).

What this means in the short run is a transfer of wealth from taxpayers and workers to holders of financial assets.  What this means if it goes on long enough is a financial crisis.

As economic Michael Hudson wrote: Debt that can’t be paid, won’t be.

The point of about debt is that no matter how rich you are, you can pile up more debt that you can pay.  And no matter how large and strong a nation’s economy, the economy can pile up more debt than can be paid.

The United States in the 1920s is an example.  The USA had the world’s strongest manufacturing economy.  It had a large domestic market and strong exports.  Yet it took more than 10 years to fully recover from the financial crash of 1929.

China has many more governmental powers to head off a crash than the U.S. government did back then.  The question is how they will be used.  Propping up failed companies and financial institutions does not solve the underlying problem.

The world as a whole is in the same situation, so it is not as if global economic growth will solve China’s debt problem—or America’s.

LINKS

China’s $28 Trillion Problem: the dark side of China’s debt by Mike Bird and Jim Edwards for Business Insider.

How China Accumulated $28 Trillion in Debt in Such a Short Time by Jim Edwards for Business Insider.

The $26 trillion dollar debt problem that is crushing competitiveness in China by Nick Edwards for the South China Morning Post.

Is the Chinese Economy Really in Trouble? by Eamonn Fingleton for The Unz Review.  The case for not selling China short.

Heed the fears of the financial markets by Lawrence Summers for the Financial Times.

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Why North Korea clings to nuclear weapons

January 9, 2016

Question 1– How many governments has the United States overthrown or tried to overthrow since the Second World War?

Answer: 57 (See William Blum.)

Question 2– How many of those governments had nuclear weapons?

Answer— 0

Source: Mike Whitney for Counterpunch

Of course there are other reasons for not attacking North Korea, such as not wanting to take responsibility for taking care of more than 24 million desperate hungry people.

I think that the only alternative is to negotiate with the North Korean government, totalitarian though it might be, and to provide assurances that the United States will end sanctions and guarantee not to attack if North Korea gives up nuclear weapons.

Mike Whitney and Peter Lee both wrote recently that, in fact, the purpose of North Korea’s recent nuclear test is to force the U.S. government to the negotiating table.  Without an agreement, the North Korean nuclear weapons program will continue.

As Donald Rumsfeld is supposed to have said, if a problem cannot be solved, it might not be a problem, but a fact.

LINKS

Does North Korea need nukes to deter U.S. aggression? by Mike Whitney for Counterpunch.

North Korea’s “H Bomb”: No Ado About Something by Peter Lee for China Matters.

The recklessness of declining powers.

January 8, 2016

Trita Parsi, president of the National Iranian American Council, wrote the following for Al Jazeera America.

The escalating tension between Saudi Arabia and Iran is the story of a declining state desperately seeking to reverse the balance of power shifting in favor of its rising rival.

160104_saudi_iran-map_0History teaches us that it is not rising states that tend to be reckless, but declining powers.  Rising states have time on their side.  They can afford to be patient: They know that they will be stronger tomorrow and, as a result, will be better off postponing any potential confrontation with rivals.

Declining states suffer from the opposite condition: Growing weaker over time, they know that time is not on their side; their power and influence is slipping out of their hands. 

So they have a double interest in an early crisis: First, their prospects of success in any confrontation will diminish the longer they wait, and second, because of the illusion that a crisis may be their last chance to change the trajectory of their regional influence and their prospects vis-à-vis rivals.

When their rivals — who have the opposite relationship with time — seek to deescalate and avoid any confrontation, declining states feel they are left with no choice but to instigate a crisis.

Saudi Arabia is exhibiting the psychology of a state that risks losing its dominant position and whose losing hand is growing weaker and weaker. … …

Source: Al Jazeera America

The observations I quoted would be just as true if Parsi had substituted “the USA” for Saudi Arabia and “China” for Iran.  Since the Vietnam era, American political leaders have entered into conflicts just to prove that we Americans were strong and willing to fight, while the Chinese leaders have quietly made their country stronger.

I don’t know what the future holds for Iran or China, but I have no doubt that we Americans need to change direction or we will lose what power we have.

Putin’s Russia is playing defense, not offense

December 23, 2015

vladimir-putin-riding-bearI don’t see Russia’s Vladimir Putin as a threat.  He has been backed into a difficult corner.

Russia’s economy suffers under economic sanctions, the Russian intervention in Syria isn’t going as well as hoped, and the Russian governmental structure is riddled with corruption.

But Russia has a nuclear force second only to the USA.  Russia is the only national in the world with the power to bring about the mutual destruction of itself and the USA.

It is a bad idea to back Vladimir Putin into a corner in which he thinks Russia is threatened, over matters in which the United States has no vital interests.

President Obama says Putin is an aggressor.   If so, he is a highly unsuccessful aggressor.

Russia’s position is much weaker than it was five years ago.  Back then, Russia had good relations with Ukraine and it was integrated into Russia’s economy.  Now the best Putin can hope for is continued Russian occupation of Crimea, a devastated eastern Ukraine friendly to Russia and a hostile western Ukraine.

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Chinese and U.S. strategies in Africa

December 21, 2015

chinaafrica

Double click to enlarge.


 

Source: South China Morning Post.  (Hat tip to Barry Ritholtz)

China is Africa’s largest trading partner.  Its infrastructure investment are large and growing, although total Chinese investment in Africa is less than U.S. investment.

If all goes well, the infrastructure investments will result in building up Africa’s export industries, which will be used to pay off the Chinese loans.  If not, China will still have a claim on the food, energy and mineral resources of Africa, much as European and American banks did in an earlier era.

U.S. base locations. Click to enlarge

U.S. military sites in Africa.  Click to enlarge.          Source: Nick Turse for TomDispatch.

The United States meanwhile is increasing its presence in a different way.   Investigative reporter Nick Turse, whose articles are posted on TomDispatch, reports a growing number of secret U.S. military site in Africa, to advise and help the armed forces of African countries and supposedly to be in place to fight terrorists.

Which will be stronger in the long run—China’s economic influence or American military influence?

I think some Africans probably resent the growing power of China as a foreign economic power operating in their countries.

I think some African leaders would be grateful if the U.S. military could provide effective help against the Boko Haram terrorists in Nigeria or the so-called Lord’s Resistance Army in central Africa.

But overall, I’d bet on China.  The Chinese are creating jobs and building useful and visible public works, which foreign military bases and the presence of foreign troops are always resented.

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Will the Arctic be the next big arena of conflict?

December 9, 2015
Double click to enlarge.

Double click to enlarge.

The warming Arctic is likely to be a new arena of conflict between Russia and the USA.

But unlike in current conflicts in Ukraine and Syria, there will be no question of democracy or a fight against terrorism to cloud the central issue—control of oil and gas resources and transportation routes.

The infrographic by the South China Morning Post provides a good snapshot of the situation.   The potential conflict in the Arctic is even more dangerous than existing conflicts, because of its potential for direct confrontation between the USA and Russia.

The other nations with the greatest physical presence in the Arctic are Canada and Denmark (which controls Greenland).   It will be interesting to see whether they will follow the lead of the United States or try to steer an independent course.

The irony of the situation is that the Arctic is being opened up by global warming, which causes the Arctic ice cap to shrink over time, and that the warming is caused mainly by burning of fossil fuels, but the new oil and gas supplied from the Arctic will make it easier and cheaper to keep on burning fossil fuels.

The best outcome would be for the Arctic powers to agree on sharing and conserving the region’s resources.  That doesn’t seem likely anytime soon.

China’s new route to the Middle East?

December 9, 2015

China-Beijing-to-Persian-Gulf-sea-route-vs-Kashgar-Gwadar-CPEC

China and Pakistan have announced a new $46 billion project called the China-Pakistan Economic Corrido.

China-Pakistan-Economic-Corridor-Route-Map

Source: Express-Tribune, Pakistan

It will include a new railroad connecting the Chinese city of Kashgar with Pakistan’s port of Gwadar, extensive development of the port and construction of new oil and gas lines connecting China, Pakistan and Iran.

Other benefits to Pakistan are highway construction projects, improvements to the Gwadar airport, and a number of coal, wind, solar and hydro electric plants.  China in return gets to control Gwadar port for 43 years.  Pakistan gets highway construction and energy  reportedly is negotiating with China for purchase of eight attack submarines.

I think this is a good example of how China uses infrastructure investment to expand its power.  Instead of trying to bend countries to its will by economic sanctions and threats of military force, as the USA is now trying to do, China offers projects of mutual benefit but under Chinese control.

CPEC20150606_ASM987The benefit to China is that it gets access to Iranian oil without having to transport it through the Strait of Malacca and the South China Sea, where it would be vulnerable to disruption by India, Japan or the United States.  The new route is 6,000 miles shorter.  Ultimately China may have a direct pipeline connection to Iran, without having to go to sea at all.

The China-Pakistan Economic Corridor passes along areas controlled by the Pakistan Taliban.  This gives the Pakistan government a strong incentive to bring its wing of the Taliban under control.

WO-AW155A_PAKCH_9U_20150416170335The corridor goes through the portion of the disputed territory of Kashmir occupied by Pakistan, which means China thinks this project is important enough to take sides against India.

Previously Pakistan covertly supported the Taliban, and Afghanistan’s President Hamid Karzai allied with Pakistan’s enemy, India.  But the new President, Ashraf Ghani, has aligned with China and Pakistan, which, I think, is bad news for the Taliban and a good reason to think the corridor plan is feasible.

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The American failure at nation-building.

November 19, 2015

If you attempt the impossible, you will fail.
        ==One of the Ten Truths of Management

If a problem cannot be solved, it may not be a problem, but a fact.
        ==One of Rumsfeld’s Rules

mason.strategiclessons.PUB1269Why was the United States so successful in building up Germany, Japan and South Korea as independent nations after World War Two, and such a failure in building up South Vietnam, Iraq and Afghanistan?

Chris Mason, in his book Strategic Lessons, wrote that the reason is that while it is possible to help an existing nation build up a stable government, it is not possible for outsiders to create a national consciousness among a people who lack it.

That is the reason for the failures in South Vietnam, Iraq and Afghanistan—not any lack of valor or professionalism among American troops, but the fact that they were given a mission equivalent to trying to make water flow uphill.

He said the U.S. military is well-suited for carrying out two kinds of missions:

  1. Defending allies from invasion by use of “intense lethality” against the aggressor.
  2. Intervening in a foreign country to protect American lives or interests by striking hard at a military target, and then leaving—preferably within 90 days.

If the American government is considering intervening in a country for an extended length of time, it should summon the best academic experts to assess whether the people of that country have a sense of nationhood.  If not, the only unity those people will have is in resisting the invader.

Actually there were people inside the government who understood what would happen in Vietnam, Iraq and Afghanistan, and said so, but they were ignored, Mason said.   Instead decisions were made by people who knew nothing about those countries, but knew what to do and say in order to advance their careers.

Those are harsh words.  The fact that the Army War College has published his book shows that there are some people in the military who value intelligent dissent.

∞∞∞

Click on The Strategic Lessons Unlearned from Vietnam, Iraq and Afghanistan: Why the Afghan National Security Forces Will Not Hold and the Implications for the U.S. Army in Afghanistan for the text of Chris Mason’s book in PDF form.  I thank Craig Hanyan for suggesting it.

Click on America’s Future in Afghanistan for interviews by ARRA News Service giving the opposing viewpoints of Chris Mason and General John R. Allen, USMC-Ret.  [added 11/20/2015]

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Comrade capitalism: Putin and the oligarchs

November 14, 2015

A new hereditary oligarchy of wealth is emerging in Russia.  But it does not consist of the sons and daughters of millionaires and billionaires.  Rather it consists of the sons and daughters of influential officials in the government security apparatus, starting with President Vladimir Putin’s daughter.

2014-03-07-PUTINThey are much like the so-called nomenklatura, the privileged sons and daughters of high-ranking Communist Party officials in the old Soviet Union.

Many of Russia’s millionaires and billionaires got rich by buying up government-owned factories and resources cheap right after the disintegration of the Soviet Union.

Reportedly when Putin took power, he called in Russia’s richest business people and told them he would not inquire into how they got their wealth—provided they did not oppose his policies.

He meant what he said.  Those who did oppose him have been crushed.  But even those who keep their heads down and their mouths shut do not feel secure.  Many wealthy Russians are investing outside Russia because they don’t think their assets are safe at home.

This is what people in Third World dictatorships do.  It doesn’t speak well for Russia’s future.

LINKS

Comrade Capitalism: Putin’s daughter, a young billionaire and the president’s friends by Stephen Grey, Audrey Kuzmin and Elizabeth Piper for Reuters.  (Hat tip to O).

Remote Control: Can an exiled oligarch persuade Russia that Putin must go? by Julia Ioffe for The New Yorker.  Profile of Mikhail Khodorovsky.

Alexandra Tolstoy interview: “Sergei must have planned his escape.  He didn’t tell me so I didn’t have to lie about it” by Kim Wilsher for The Guardian.  (Hat tip to O).

Half of Russia’s Richest People Are Planning to Cash Out by Alexander Sazanov for Bloomberg News.

 

China abandons one-child policy

November 11, 2015

chinese_kids_by_peter_morgan_credit

One of the most momentous events in modern history was China’s adoption of the “one-child” policy in 1980.

figure1Now the Chinese government has done something almost equally momentous.  It has adopted a “two-child” policy.  Henceforth all Chinese couples will be allowed to have two children.

The one-child policy limited China’s population growth and, arguably, eliminated the threat of famine and made possible China’s current relative prosperity.

But the Chinese paid a price for this, and not just in brutal violations of human dignity, including forced abortions.

chinapopulationpyramid70China has a population imbalance, because Chinese couples traditionally prefer boys to girls.  This means there are millions of eligible Chinese men who will never find a spouse.

China faces an age imbalance, with an increasing elderly population and a shrinking working-age population.

And China faces a geo-political imbalance.  The population of India, China’s chief rival in Asia, will exceed China’s if present trends continue.  This affects the balance of power.  Bertrand Russell wrote somewhere that if there ever is to be peace among nations, they will have to agree on limitations of population as well as limits on arms.

demographic_transition_detailedMy hope for the Chinese, and for other peoples, is that they go through a demographic transition without government dictating to couples how many children they mahy have.

A demographic transition requires (1) a material standard of living sufficient that couples don’t think they have to have as many children as possible to be assured of survival in old age, and (2) women assured the freedom and knowledge they need to decide how many children they are to have.

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Switzerland, the other gun culture

October 29, 2015

Swiss citizens, as members of a well-regulated militia, have the right to keep and bear arms.

And, unlike us Americans, they manage not to kill each other in large numbers.

The passing scene: Links & comments 10/24/2015

October 24, 2015

Anxious Hours in Pivotland: Where’s My Sailthrough? by Peter Lee for China Matters.

Neither South Korea nor Australia support the U.S.-Japanese opposition to Chinese efforts to claim islands in the South China Sea.  The Chinese Navy meanwhile made a point about freedom of the seas by sailing through Alaska’s Aleutian Islands.

Trey Gowdy Just Elected Hillary Clinton President by Matt Taibbi for Rolling Stone.

Or at least greatly strengthened her bid for the Democratic nomination.  The Benghazi hearings made Republicans look like fools and showed Clinton as someone who is a match for them.

Are Canadian progressives showing Americans the way? by Miles Corak for Economics for public policy (via Economist’s View)

America’s Civilian Killings Are No Accident by Peter Van Buren for We Meant Well.

The bombing of the hospital in Kunduz, Afghanistan, had many precedents.

What Is life? by Matthew Francis for Mosaic.  (via Barry Ritholtz)

If humans encountered extraterrestrial life, would we know it when we saw it?

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Why U.S. business kowtows to China

October 21, 2015

In the USA, government serves the needs of business.  In China, business serves the strategic aims of government.

No foreign corporation is allowed to operate in China without conceding something of long-term benefit to China.  That can be manufacturing operations in China, transfer of technological knowledge or a Chinese stake in the company’s ownership.  It goes without saying that the CEOs do not criticize Chinese foreign policy.

Cartoon by Xu Jun for EEO

Cartoon by Xu Jun for Economic Observer

Barry C. Lynn, writing in the November issue of Harper’s, said that some American corporate executives have even submitted to Communist-style self-criticism sessions, in which they volunteer confessions of misdeeds without being accused.

As China becomes more powerful, and the United States becomes more dependent on the Chinese for finance and for critical manufactured items, the leverage of Beijing over the United States becomes greater.  Lynn explained the reasons:

First is the fact that so many U.S. companies now depend on China for the products they sell.  For Walmart, it’s barbecue grills and shoes.  For Apple, it’s assembly work.  For Pfizer, it’s chemicals.

And while foreign companies have talked a lot about reducing their reliance on China, they nevertheless keep upping the ante, year after year.  Just last April, General Motors announced plans to pour another $16 billion into China.   In September, Dell pledged a whopping $125 billion over the next five years, with an ominous promise to “closely integrate Dell China strategies with [Chinese] national policies.”

A second reason corporations are so willing to accede to Chinese diktats is the allure of Chinese markets.  For General Motors, China already accounts for roughly a third of the cars it sells.  For Qualcomm, China accounts for roughly half its business.  For Rio Tinto, China accounts for considerably more than half its output of iron ore.

Chinese sales of Apple’s iPhones topped U.S. sales in 2015 — and when global markets were tanking in late August, Tim Cook helped arrest a rout in the company’s stock by publicly assuring investors that the Cupertino giant had “continued to experience strong growth for our business in China through July and August.”

Source: Harper’s Magazine.

Chinese investors own the AMC Theater chain of movie theaters in the United States, and also are major investors in American-made movies.  China also is the world’s largest market for Hollywood movies.

The result: Chinese are never the foreign villains in American movies—Russians, Arabs, Colombians, North Koreans, anybody but Chinese.

(more…)

Why is the TPP still a secret?

October 19, 2015

Tom the Dancing BugWhy is the Trans Pacific Partnership agreement still a secret, even though the negotiations are complete?

Why do we the people still depend on WikiLeaks for information on what’s in the agreement?

If opponents of TPP have the wrong idea about what’s in the agreement, why don’t President Obama and the heads of the other 11 governments that negotiated the TPP reveal what’s in it?

The logical answer is that they want to give the public as brief a window of opportunity as possible to examine and discuss the agreement in order to ram it through without adequate public discussion.

President Obama has said that the TPP enables the United States to write the rules of international trade rather than some other country such as China.  What it does is allow international corporations based in the United sttes to write the rules, which is something else.

The American people do not benefit from an agreement that enables American corporations to invest in setting up manufacturing operations in foreign countries, and then importing the products back into the USA.

The Chinese people benefit from being left out of the agreement, because that leaves their government free to pursue the Chinese national interest.

LINK

The Predators Behind the TPP by Karel van Wolferen for The Unz Review.   A good analysis by a distinguished Dutch scholar and journalist.

On the TPP: “We Are Writing the Rules,” says Obama.  Who’s “We?” by Jim Hightower for Buzzflash.

The passing scene – October 9, 2015

October 9, 2015

Welcome to a New Planet: Climate Change, “Tipping Points” and the Fate of the Earth by Michael T. Klare for TomDispatch.

How the Trans-Pacific Partnership Threatens America’s Recent Manufacturing Resurgence by Alana Semuels for The Atlantic.

Harvard’s prestigious debate team loses to New York prison inmates by Laura Gambino for The Guardian.

10 Stories About Donald Trump You Won’t Believe Are True by Luke McKinney for Cracked.com.  Donald Trump is notable not as a business success, but as a promoter with the ability to distract attention from failure.

Can Community Land Trusts Solve Baltimore’s Homelessness Problem? by Michelle Chen for The Nation.  (Hat tip to Bill Harvey)

The Second Amendment’s Fake History by Robert Parry for Consortium News.  (Hat tip to my expatriate e-mail pen pal Jack.)

The Afghan hospital massacre: Snowden makes a brilliant suggestion by Joseph Cannon for Cannonfire.  Why does the United States not release the gunner’s video and audio?

Ask Well: Canned vs. Fresh Fish by Karen Weintraub for the New York Times.  Canned fish is probably better.  (Hat tip to Jack)

Shell Game: There Is No Such Thing as California ‘Native’ Oysters, a book excerpt by Summer Brennan in Scientific American.   The true story behind Jack London and the oyster wars.  (Hat tip to Jack)

China overtakes US as world’s biggest economy

October 9, 2015

panda eagleThe World Bank has noted that China has quietly overtaken the United States as the world’s largest economy.

Washington is responding to this in exactly the wrong way—by trying to checkmate China’s power rather than rebuilding the sources of American power.

China already led the United States in a number of important respects.  According to the CIA World Factbook, it exceeds the United States in industrial output, in agricultural output and in electricity production.

While China had a $260 billion trade surplus in 2013, the USA has a $698 billion trade deficit.

It is true that while the Chinese nation is rich, the Chinese people are still poor compared to Americans—not just in the amount of stuff they own, but in terms of infant mortality, life expectancy, literacy and access to public water and sewerage systems.

Inequality and concentration of wealth are just as great in China as they are in the United States.  China is the world’s largest polluter overall, although the USA is the largest on a per-capita basis.  Interestingly China has a lower birth rate and population growth rate than the USA.

But life has been getting better on average for the average Chinese person, while the earning power of the average American has been slipping behind.

The United States has the world’s largest and most expensive military, but the Chinese may be a match for the USA in their own backyard—the South China Sea.

Joseph Stiglitz, former chief economist for the World Bank and former chairman of the President’s Council of Economic Advisers, argued in a recent article that the USA still has great residual strength, but American leaders are letting it slip away by concentrating on military dominance and corporate profits at the expense of everything else.

In a full-fledged Cold War between the USA and China, China is in an economic position to do the USA great damage.  China could stop buying U.S. Treasury bonds, for example.

It’s not in the interest of China to wage economic war against the United States.  Both sides would suffer.  American leaders should not push China into a corner and put its leaders in a position in which they think they have no choice.   Instead American leaders should concentrate in reducing US economic vulnerability.

China does have big problems—inequality, pollution, corruption, unrest among workers and among minorities in Xinjiang, Tibet and elsewhere.

Maybe these problems will be fatal, although I doubt it.  But these are not issues the United States can affect one way or the other, or should try to affect.

And if China should start to collapse, history has many examples of declining empires that try to restore internal unity by going to war.  This is not something we Americans should hope for.  Our problems originate at home, not in China.

LINKS

China Has Overtaken the United States as the World’s Largest Economy by Joseph Stiglitz for Vanity Fair.

China vs. United States from the CIA World Factbook.

G-Zero: US-China Relations in the Age of Xi by Peter Lee for China Matters.

(more…)


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