Archive for the ‘International’ Category

Mike Whitney on U.S. anti-Russian policy

March 24, 2017

Will Washington Risk WW3 to Block an Emerging Russia-EU Superstate? by Mike Whitney for Counterpunch.

Map via Wikimedia

Who are willing to fight for their countries?

February 24, 2017
The darker the red, the greater the willingness to die for one's country

The darker the red, the greater the willingness to fight.

Only 44 percent of adult Americans are willing to tell pollsters they’d fight for their country.

The percentage is even less for some U.S. allies, such as Canada (30%), France (29%), the United Kingdom (27%), Italy (30%), Germany (18%) and Japan (11%).

In contrast, 71 percent of Chinese and 59 percent of Russians say they’d fight for their countries.

This is the result of a public opinion poll of more than 1,000 people in each of 64 countries in late 2014 by WIN / Gallup International.   The complete results are below.

I’m not sure what to make of this.  I think it partly depends on people mean by “fight for country”.

I think almost all Americans would be willing to fight to defend our nation from an invader.  I think only a minority are willing to go to some foreign country to fight to increase U.S. geopolitical power.

The problem for us Americans is that someday U.S. power will begin to slip, and countries that now fear to go against the United States will become our enemies.

When that backlash comes, our nation will need the patriotism that our leaders now exploit and abuse.

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A joking Dutch message to Donald Trump

January 27, 2017

Update 2/14/2017.  You also can click on this to view the video.

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A tyrant is dead, a tyranny continues

December 4, 2016

Hat tip to O.

Can Trump make U.S. industry great again?

December 1, 2016

Donald Trump in his campaign promised to reverse the decline of American manufacturing.

Can he do it?  I’m willing to be pleasantly surprised, but I don’t think so.

President-elect Trump’s proposed economic policies are the same as what most Republicans and many Democrats have been advocating for 30 years or more—lower taxes, less regulation, fewer public services.

None of these things has stopped the increase in U.S. trade deficits or the increase in economic insecurity of American workers.

Trump did speak against the Trans-Pacific Partnership agreement, promised to renegotiate other trade agreements and threatened to impose punishing tariffs on China and Mexico in retaliation for their unfair trade policies.

I myself am in favor of rejecting the TPP and renegotiating trade treaties.  This would be a step forward.  But it would take more than this to rebuild the hollowed-out U.S. manufacturing economy.

China, Japan, South Korea and most nations with flourishing industrial economies use trade policy as a means of strengthening their economies.

Their leaders, like Alexander Hamilton in the early days of the United States, seek to build up their nations’ “infant industries” under those industries are strong enough to stand on their own feet.

When foreign companies seek to sell these nations their products, their governments demand that the foreign companies not only set up factories in their countries, but that they employ native workers and transfer their industrial know-how to the host countries.  The USA does nothing like this.

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If the USA and Russia could change places

September 26, 2016

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My experience and knowledge of foreign countries is limited, but I try to understand foreign leaders by putting myself in their place, and imagining what I would do if I were them.

Peter Hitchens, a Briton who was a foreign correspondent in Moscow for many years, invites us to imagine how we would feel if we were Russians, a nation that, unlike the USA, has been invaded not once, but many times, and lost millions, not thousands, of lives to invaders within living memory.

Safety, for Russians, is something to be achieved by neutralizing a danger that is presumed to exist at all times.  From this follows a particular attitude to life and government.

If the U.S. had China on the 49th Parallel and Germany on the Rio Grande, and a long land border with the Islamic world where the Pacific Ocean now is, it might be a very different place.  There might even be a good excuse for the Patriot Act and the Department of Homeland Security and the FBI.

If Russia’s neighbors were Canada and Mexico, rather than Germany, China, Turkey, and Poland, and if its other flanks were guarded by thousands of miles of open ocean, it might have free institutions and long traditions of free speech and the rule of law. It might also be a lot richer.

As it is, Russia is a strong state with a country, rather than a country with a strong state.  If it were otherwise, it would have gone the way of the Lithuanian Empire or, come to that, the Golden Horde.

Source: Peter Hitchens | First Things

That is not to say that life in Vladimir Putin’s Russia is good, or that Putin is a benign ruler.  But he is no worse than many of the despots with whom the United States is allied, and life in the Russian Federation is infinitely preferable to live in the Union of Soviet Socialist Republicans.

Far from being a new Hitler, Hitchens wrote, his goal is to keep territories formerly controlled by the USSR from joining anti-Russian alliances.  Whatever you think of this, it is not a threat to the United States or any other Western nation.

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Ted Rall on the death of Uzbekistan’s tyrant

September 7, 2016

Ted Rall, who has traveled in Central Asia, had this to say about the death of Uzbekistan’s ruler Islam Karimov.

uzbekistan-C-Asia-MAPGiven Uzbekistan’s tremendous oil, gas and mineral wealth and its geographically and geopolitically strategic importance, its citizens ought to enjoy a high standard of living.  Instead, the average Uzbek subsists on $3 to $8 per day.

Where does all that energy wealth go? Karimov, his family and cronies steal it.  Gulnara Karimova, the deceased despot’s flamboyant chanteuse daughter, is accused of breaking in over $1 billion in bribes from telecommunications companies seeking permits to do business.  Another daughter, Lola Karimova-Tillyaeva, is linked to shell companies that own gaudy multimillion estates in the U.S.  [snip]

Uzbekistan is routinely awarded the world’s “Worst of the Worst” status for its extreme corruption and violations of fundamental human rights.  Phones are tapped and militsia goons shake down motorists at innumerable checkpoints.  Print and broadcast media are completely state-controlled. There’s a zero tolerance policy toward political opposition.  [snip]

At least 10,000 political prisoners are rotting in the nation’s prisons. Torture is standard and endemic; Team Karimov landed a rare spot in the news for boiling dissidents to death.  In 2005, President Karimov asked security forces confronting protesters in the southern city of Andijon to wait for his arrival from the capital of Tashkent so he could personally witness and coordinate their massacre.  An estimated 700 to 1200 Uzbeks were slaughtered.  “People have less freedom here than under Brezhnev,” a U.S. official admitted.  [snip]

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Islam Karimov: death of a dictator

September 3, 2016

Islam Karimov of Uzbekistan, who died a few days ago, was a ruthless dictator comparable to the Saddam Hussein of Iraq.

uzbekistan-C-Asia-MAPA holdover from the Soviet era (appointed by Mikhail Gorbachev, no less), Karimov was known for his repression of the Muslim religion and of dissent of all kinds, and for forced child labor in cotton fields, his country’s chief export industry.

Craig Murray, the former UK ambassador to Uzbekistan, said growing a beard or being seen praying five times a day could be enough to get you thrown in jail or to “disappear” mysteriously.

Yet Karimov was courted by Russia, China and the USA as an ally against radical Islamic terrorism.   Uzbekistan was an important transit point for supplies going to U.S. forces in Afghanistan.

What should US policy have been?  Should our government be like China’s, which scrupulously refrains from interfering in the internal affairs of other countries, no matter how odious their governments?

Or should the US have armed Karimov’s opponents, as was done in Libya and Syria, to being about a change in the regime?

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Health care costs and the U.S. middle class

September 2, 2016

Economics professor David Ruccio points out that, since the previous recession, the American middle class has been cutting back on spending—on everything except medical care.

healthcare.na-cl366_medspe_16u_20160825163913

The Affordable Care Act was supposed to not only make medical care more widely available, but to make it affordable.   This hasn’t happened.  I think this is partly due to opposition by Republican governors and congressional representatives, but largely due to flaws in the law itself.

It’s a well-known fact that we Americans pay more for medical care and get less benefit than citizens of any other industrial nation.

ftothealthexp_pc_usd_long-1

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Nothing new about a woman leading a nation

July 23, 2016
Angela Merkel

Angela Merkel

The possibility of electing the first woman President of the United States is a big deal for many of us Americans.  But the rest of the world may well ask: What took you so long?

Even in the days when women were not eligible to enter the professions or earn university degrees, they still could be queens and empresses.

Rulers such as Queen Elizabeth I of England and Catherine the Great of Russia showed that women could play power politics with the best of them.

Since women in the 20th century received the right to vote and run for office, they’ve had the opportunity to become heads of government on their own merits and not as family dynasties.  Here are some examples.

1969 – Golda Meir (Israeli Labor Party) became Prime Minister of Israel.

1979 – Margaret Thatcher (Conservative) became Prime Minister of the United Kingdom.

1990 – Jenny Shipley (National Party) became Prime Minister of New Zealand.

1991 – Edith Cresson (Socialist) became Prime Minister of France.

1993 – Kim Campbell (Progressive Conservative) became Prime Minister of Canada.

1993 – Tansu Çiller (True Path Party) became Prime Minister of Turkey. [added later]  (Hat tip to S. Glover)

2005 – Angela Merkel (Christian Democratic Union) became Chancellor of Germany.

2010 – Julia Gillard (Australian Labor Party) became Prime Minister of Australia.

2011 – Dilma Rousseff (Brazilian Labor Party) became President of Brazil

Here are some examples of women who achieved power as members of family dynasties.

1966 – Indira Gandhi, daughter of Jawaharlal Nehru, became Prime Minister of India.

1974 – Isabel Peron, widow of Juan Peron, became President of Argentina.

1986 – Corazon Aquino, widow of Benigno Aquino Jr., became President of the Philippines.

1988 – Benazir Bhutto, daughter of Zulifikar Ali Bhutto, became Prime Minister of Pakistan.

2001 – Magawati Sukarnoputri, daughter of Sukarno, became President of Indonesia.  [added later]

It is an interesting question as to whether Hillary Clinton, if elected, belongs on the first list or the second.  She is a successful and effective politician, but would she have been elected Senator from New York or been appointed Secretary of State if she had been Hillary Rodham rather than Hillary Rodham Clinton?

Currently Bangladesh, Brazil, Chile, Croatia, Germany, Liberia, Lithuania, Malta, the Marshall Islands, Mauritius, Namibia, Nepal, Norway, Poland, South Korea, Switzerland, and the United Kingdom all have women as heads of state, heads of government or both.  Also Burma (sort of).

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Obama, lame-duck GOP Congress may enact TPP

July 20, 2016

Republicans in Congress refused to vote President Obama’s Supreme Court nominations on the grounds that he is a lame duck.  But it’s highly likely they’ll join with him to enact the odious Trans Pacific Partnership agreement right after the November elections, when he and they really will be lame ducks.

Pac-Money-400x266When Congress voted to allow a “fast track” decision—an up or down vote with little time to discuss the agreement—it was Republican votes that provided the margin of victory.

“Fast track” means there’s no way to stop a lame-duck vote on TPP, even if anti-TPP candidates sweep Congress in the November elections.

All it would take is that President Obama, House Speaker Mitch McConnell and other TPP supporters are brazen enough.

Bernie Sanders opposed the TPP.  Donald Trump opposes it.  Hillary Clinton promoted it when she was Secretary of State, but she says she now has reservations about it.  Her supporters on the Democratic platform committee voted down a plank that would criticize the TPP so as not to embarrass President Obama.

The TPP—and the related Transatlantic Trade and Investment Partnership agreement and Trade in Services Agreement—are corporate wish lists written into international law.

These limit the power of governments to legislate and regulate to protect workers, consumers and the environment, grant drug and media companies new intellectual property rights, and create panels of arbitrators that can impose penalties on governments for depriving international corporations of “expected profits.”

So it’s fitting, in a way, that these anti-democratic trade agreements are likely to be enacted into law by a President and members of Congress who may not have run for re-election or been voted out of office.

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Lessons from northern Italy

July 11, 2016

My e-mail pen pal Bill Harvey sent me a link to an article in YES! magazine about the Emilia Romagna region in northern Italy, where two-thirds of its 4.5 million people participate in co-operative businesses.

emilia_romagnaThere are worker-owned cooperatives, consumer-owned co-operatives, and social service co-operatives, in which people band together to provide day care, care for senior citizens and other services that the Italian government can’t do satisfactorily.

Vera Zarnagni, professor of economic history at the University of Bologna, said co-operative enterprise is part of an economic tradition going back to the 1850s.  It’s an illustration of a contention by the American thinker Murray Bookchin, that there are other ways the world’s economy could have developed besides the way it did.

Even though a majority of the region’s people are co-op members, many of them also work for profit-seeking corporations.  Co-operative business activity accounts for about 30 percent of the economic output of the region.

Most of the co-ops in the region are small enterprises, linked together in a ecological network of relationships.  What I’ve read about Italy indicates that this is true of Italian business as well.  Italy has an unusually high proportion of small family-owned businesses, linked by personal relationships, and engaged in high-value work involving high standards of craftsmanship.

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Will Brexit be the scapegoat for UK’s problems?

July 11, 2016

I can’t judge all the consequences to Britain of the vote to exit the European Union, but there are a few things I am sure of.

  • The United Kingdom had many serious economic problems before Brexit—financialization, the hollowing out of manufacturing, the decline of the British pound, unnecessary government austerity.
  • Politicians and journalists will use Brexit as the scapegoat and explanation of these problems, and an excuse for not doing anything about them.
  • If the UK joins the Transatlantic Trade and Investment Partnership, the Trade In Services Agreement or other corporate-sponsored trade agreements, it will lose whatever national sovereignty it gained by exiting the European Union.

LINKS

Why They Left by Costos Lapavitsas for Jacobin magazine.

‘I want to stop something exploitative, divisive and dishonest’—conversation with a Leaver by Oliver Humpage for Medium.

Britain is not a rainy, fascist island — here’s my plan for ProgExit by Paul Mason for The Guardian.

The global elite strikes back

July 7, 2016

The common people in Europe, the USA and other countries are starting to revolt against international institutions—the European Union, the World Trade Organization, the International Monetary Fund—that represent the interests of an international financial elite.

free-tradeThe financial elite is striking back by promoting international trade agreements—the Trans-Pacific Partnership (TPP) agreement, the Transatlantic Trade and Investment Partnership (TTIP) agreement, the Trade in Services Agreement (TISA) and the lesser-known Comprehensive Economic and Trade Agreement (CETA) involving Canada and the European Union.

All these agreements would enact pro-business policies into international law, and would create tribunals with the power to fine governments for unjustly depriving businesses of expected profits.

Nationalists oppose these agreements because they undermine national sovereignty.   Progressives and liberals oppose these agreements because they are un-democratic.  On this issue, progressives and nationalists are on the same side because, at these moment in history, national governments are the highest level in which democracy exists.

President Obama hopes to get the Republican majority in the lame duck Congress following the November election to enact the TTP Agreement.   The Conservative Party in Britain favors the TTIP, which would subject the UK to a new pr0-business international authority.   CETA would accomplish the same goal for the remaining EU members.

If any of these agreements passes, they can be used to block legislation to protect workers, consumers or public health, or to bring banks and financial institutions under control.

Followers of Bernie Sanders in the USA and Jeremy Corbyn in the UK, and progressives in other subject countries, would be stymied until they could figure out a way to roll back the agreements.

None of these agreements is needed in order to have international trade.   Rather their goal is to remove controls on the operations of international corporations.

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Brexit: the revolt of the losers

June 28, 2016

The dominant neoliberal economy sorts people into winners and losers.  Brexit is a revolt of the losers.

The winners are the credentialed professionals, the cosmopolitan, the affluent.  The losers are the uncredentialed, the provincial, the working class.

Losers are revolting across the Western world, from the USA to Poland, and their revolt mostly takes the form of nationalism.

The reason the revolt takes the form of nationalism is that the world’s most important international institutions—the World Bank, the International Monetary Fund, and the European Central Bank—are under the control of a global financial elite that does not represent their interests.

17149339-Abstract-word-cloud-for-Neoliberalism-with-related-tags-and-terms-Stock-PhotoI don’t fully understand the decision-making process in the European Union, but looking at its web site, my impression is that public debate is not a part of it.

The only vehicles for exercising democratic control, at the present moment in history, is through democratic national governments.  I am in favor of international cooperation, and I don’t know how I would have voted on Brexit if I had been British, but I certainly can understand Britons who don’t want to be at the mercy of foreign bureaucrats and the London governmental, banking and intellectual elite.

Democratic nationalism is the only form that democracy can take until there is a radical restructuring of international institutions.  Without a strong progressive democratic movement, the only alternative to neo-liberal globalization is right-wing anti-democratic populism as represented by Donald Trump, the United Kingdom Independence Party, Marine le Pen’s National Front in France, Greece’s Golden Dawn and others.

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The danger of nuclear war is real and growing

June 15, 2016

worldnuclearforces.2015.dw0,,18512288_304,00

The danger of a U.S. nuclear war with Russia is real and growing.

The risk is not that an American or Russian President would deliberately start a nuclear war.  The risk is that U.S. policy is creating a situation in which a nuclear war could be touched off by accident.

_89672013_missile_defence_map624_no_iranDuring the Obama administration, the U.S. government has cancelled the Anti-Ballistic Missile Treaty, installed a missile defense system in Rumania and is in the process of installing a system in Poland.

What is the harm of a defensive system?  It is that the ruler of a country with a missile defense system might be tempted to launch a missile attack, in the hope that the enemy’s retaliatory missiles might be stopped.

A defense system that is not strong enough to stop an enemy’s first strike attack might be strong enough to defend against retaliation from an attack, since much of the enemy’s weapons will have been destroyed.  So, strange as it may seem, setting up a missile defense system can seem like an aggressive act.

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The US is already in a trade war with China

June 9, 2016

chinesesteelmillU165P5029T2D556619F24DT20130201141929

President Obama has a habit of undercutting Republicans by stealing their issues.  He is doing that to Donald Trump on trade.

Trump has threatened a trade war with China, but the Obama administration has already launched a trade war.

Trump proposes to hit China with protective tariffs of up to 45 percent on goods shipped to the United States.   But the Obama administration has authorized U.S. Steel Corp. to ask the International Trade Commission for permission for total ban on Chinese steel exports to the United States.

U.S. Steel executives ask for the ban in retaliation for theft of their trade and manufacturing secrets by Chinese hackers.

Earlier this year the Obama administration has imposed a tariff of 522 percent on cold-rolled flat steel from China and 72 percent of this type of steel from Japan.  Cold-rolled flat steel is used in auto manufacturing, shipping containers and construction.

The justification for the tariff is that Chinese companies are dumping steel on the world market below their cost of production.  They produced more steel than they can profitably sell, and so are trying to cut their losses by selling their product for whatever they can get.

Based on a quick reading of on-line news articles, I think there is a basis for the charges against the Chinese.  European countries also charge China with dumping.

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The shape of the world arms trade

May 6, 2016

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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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