I thought this article by Christipher Hitchens were rather pertinent to where my feelings lie this 9/11. I myself was planning on attending some of the activities related to the Pentagon attack, but have decided not to permit that day to be turned into a pep rally.. It should be a day of reflection on the tragedy that befell us, thanksgiving for avoiding the tragedy that could have befallen us (25,000-50,000 dead), and the challenges that await us in coming years as we continue to fight this battle against Islamic militancy.
Don't Commemorate Sept. 11
Fewer flags, please, and more grit.
By Christopher Hitchens
Posted Monday, September 8, 2003, at 9:30 AM PT
http://slate.msn.com/id/2088025/
Unless I have badly mistaken the mood of everyone I know and almost everyone I meet, practically nobody has any particular use for the second anniversary that will soon be upon us. But it is vaguely felt in many quarters that something ought to be done by way of an observance. The first mentality is in my opinion the right one, even if people feel bad about harboring it, and the second one is defensible but somewhat sickly and likely to suffer increasingly from diminishing returns.
In my small way, I tried to anticipate this two years ago. I didn't at all mind what some critics loftily dismissed as "flag-waving." Indeed I was surprised that there wasn't more of it than there was. But I never displayed a flag myself and argued quietly against putting one up over the entrance to the building where I live. This was for a simple reason: How will it look when the effort tapers off? There's nothing more dispiriting than a drooping and neglected flag and nothing more lame than the sudden realization that the number of them so proudly flourished has somehow diminished. (The one over my building went away, nobody can quite remember how or when, and it hasn't been restored.) In the meantime, I refused to accept an invitation to a memorial service for the many murdered British citizens, which seemed to me to miss the same point in the same way.
There were other reasons to oppose flagification. (Very many of the immediate victims were not American, for example, and most of those murdered and enslaved by Islamic fascists have themselves been Muslims.) I was glad for similar reasons when the order was announced that "coalition" flags would not be flown in Iraq. What is required is a steady, unostentatious stoicism, made up out of absolute, cold hatred and contempt for the aggressors, and complete determination that their defeat will be utter and shameful. This doesn't require drum rolls or bagpipes or banners. The French had a saying during the period when the provinces of Alsace and Lorraine were lost to them: "Always think of it. Never speak of it." (Yes, Virginia, we can learn things from the French, even if not from Monsieur Chirac.)
This steely injunction is diluted by Ground Zero kitsch or by yellow-ribbon type events, which make the huge mistake of marking the event as a "tribute" of some sort to those who happened to die that day. One must be firm in insisting that these unfortunates, or rather their survivors, have no claim to ownership. They stand symbolically, as making the point that theocratic terrorism murders without distinction. But that's it. The time to commemorate the fallen is, or always has been, after the war is over. This war has barely begun. The printing of crayon daubs by upset schoolchildren and the tussle over who gets what from the compensation slush fund are strictly irrelevant and possibly distracting. Dry your eyes, sister. You, too, brother. Stiffen up.
I think about it every day, without fail, even though it's difficult (because of the aforementioned and enfeebling "sensitivities") to see a replay of the packed civilian jets slamming into the towers or of the men and women who jumped, in flames, to their deaths. It's perhaps a little easier for me to be reminded than it is for some others: My apartment has a direct view of the flight path to Washington National Airport, and I go past the White House or the Capitol several times a week. But never—quite literally never—without imagining how things would be if that flight from Newark hadn't been delayed and if the United Airlines passengers hadn't got the word in time and decided to make a fight of it.
If our Congress or our executive mansion had been immolated that morning, would some people still be talking as if there was a moral equivalence between the United States and the Taliban? Would they still be prattling as if the whole thing was an oblique revenge for the Florida recount? Of course they would. They don't know any other way to talk or think. My second-strongest memory of that week is still the moaning and bleating and jeering of the "left." Reflect upon it: Civil society is assaulted in the most criminal way by the most pitilessly reactionary force in the modern world. The drama immediately puts the working class in the saddle as the necessary actor and rescuer of the said society. Investigation shows the complicity of a chain of conservative client states, from Pakistan to Saudi Arabia, in the face of which our vaunted "national security" czars had capitulated. Here was the time for radicals to have demanded a war to the utmost against the forces of reaction, as well a full house cleaning of the state apparatus and a league of solidarity with the women of Afghanistan and with the whole nexus of dissent and opposition in the Muslim world. Instead of which, the posturing loons all concentrated on a masturbatory introspection about American guilt, granted the aura of revolutionary authenticity to Bin Laden and his fellow gangsters, and let the flag be duly seized by those who did look at least as if they meant business.
Let me take the strongest objection to my interpretation, which is that the events of Sept. 11, 2001, were exploited by conservatives to settle accounts with Saddam Hussein and that many Americans have been fooled into war by thinking that Iraq was behind the attacks. Leave aside the glaring and germane fact that Saddam was and is in partnership with the forces of jihad; not even the sorriest illusion is in the same category as a book published by The Nation, written by Gore Vidal and flaunted at "anti-war" rallies, which argues that it was essentially George Bush who helped organize and anticipate the atrocity. That's a level of degeneration unplumbed by any other faction. So, the pitiful peaceniks are the chief moral losers, whichever way you slice it.
Should this solemn date be exploited for the settling of scores? Absolutely it should. When confronted with a lethal and determined enemy, one has a responsibility to give short shrift to demoralizing and sinister nonsense. (To take the most recent example of conspiracy babble to have shown up on my screen: I know very well that Bin Laden's family was evacuated from the United States, with FBI and White House help, in the "no-fly" days that followed the aggression. I wrote about it furiously at the time. But this disgraceful scramble surely proves, if it proves anything, that the Bush administration did not have time to prepare for an attack that it allegedly knew was coming. Meanwhile, those who mutter darkly about the Saudi connection overlook the rather salient fact that Saudi influence was exerted consistently and energetically against regime change in Iraq.)
Two beautiful fall seasons ago, this society was living in a fool's paradise while so far from being "in search of enemies" that its governing establishment barely knew how to tell an enemy from a friend. If there is anything to mark or commemorate, it is the day when that realm of illusion was dispelled—the date that will one day be acknowledged as the one on which our enemies made their most truly "suicidal" mistake.
Tuesday, September 09, 2003
Friday, August 15, 2003
Thursday, May 22, 2003
22nd May, 2003
I found this to be a well-written analysis of the challeges facing the EU as they attempt to create a constitution:
United States of Europe?
By Helle Dale
BRUSSELS.
With all the reports of anti-Americanism in Europe, it may surprise people here to be told that the United States of America is the envy of European politicians. Looked at from Washington, the European Union is not often considered a major factor in U.S.-European relations, and most Americans have a vague notion at best of what the EU actually is. Some European politicians even want a United States of Europe. Where these political ambitions will lead is still uncertain, although they are not in and of themselves likely to solve the economic problems besetting the European economies. On a global scale, they may lead to greater confrontation with the United States, depending on who calls the shots and sets the political agenda in Europe.
The European Union, which started out in the 1950s as a largely economic grouping of six continental European countries (the European Common Market), has today evolved into a semistate-like organization that is expanding to include 25 members, including countries in Eastern and Central Europe. The EU already has a GDP the size of that of the United States and a population that exceeds it.
The EU already has a set of treaties that cover everything from trade to social policy, and even supposedly common foreign and security policy. It has a common currency for 12 European countries (the euro), and the EU now wants a constitution of its own, just like the Americans, to give it a "legal personality" and the other aspects of statehood. In a little over a month, the European Constitutional Convention will present the results of its yearlong work to a conference of the governments of the EU. If adopted, it will be submitted for ratification in each country.
It is difficult, however, to see how this project can work. A single market is one thing. Giving up national political sovereignty is quite another. In almost every case, even in France, European politicians have been far ahead of their electorates.
European constitutional negotiations have sometimes been compared to Philadelphia 1787 in that compromises have to be reached to balance the interests of smaller and bigger states. That comparison is true, but only up to a point. The entrenched political and national cultures of the old nation states of Europe are much harder to weld into a whole than the 13 former British colonies of the New World. And the bigger countries, primarily Germany and France, are deeply reluctant to accept equal representation from smaller neighbors.
What is more, the survival of the U.S. Constitution was precarious enough in itself. As John Adams observed, "The legislators of antiquity ... legislated for single cities, but who can legislate for 20 or 30 states, each of which is greater than Greece or Rome at those times." Before long, there were numerous threats of secession from the Union, including from the states of New England, before the issue burst into full flame with the American Civil War. All of this is frequently overlooked by those who argue if the Americans can do it, so can the Europeans.
The French quickly grasped the lead in the Constitutional Convention, arranging for former French President Valery Giscard d'Estaing to act as its head. Unfortunately, Mr. d'Estaing is no Jefferson or Madison. Representatives of other countries at the convention have complained that he has a way of arriving with a set of finished proposals, sidelining other participants and preempting objections. And after a while, smaller and medium-sized countries started coordinating their efforts to be heard. Specifically, they did not want the trimmings of empire to get out of hand. As a Finnish representative has quipped, "we do not want to import the American presidency, the standing committee of the Soviet politburo and the Chinese People's Congress." This referred to the proposal for an elected European president and a standing convention to deal with constitutional issues.
Finally, it is doubtful that the new European constitution will fix what most ails the continent — economic stagnation, rigid labor markets and declining birthrates. The introduction of the euro has not produced economic growth. The German economy, the euro zone's largest, contracted by 0.2 percent in the first quarter of this year, dragging other economies with it toward recession.
The prestigious French Institute of Internal Relations, in a new report titled "World Trade in the 21st Century," predicts that "The enlargement of the European Union will not be sufficient to guarantee parity with the United States," and that the EU's share of world economic output will shrink from 22 percent today to 12 percent in 50 years.
This is not what you hear in Brussels, of course. But surrounded by the architectural glories of old Europe, it is hard not to get the impression that the busy framers of the European Constitution are whistling past the graveyard, as splendid as it is.
http://www.washingtontimes.com/op-ed/20030520-102303-4620r.htm
The Central Scrutinizer
I found this to be a well-written analysis of the challeges facing the EU as they attempt to create a constitution:
United States of Europe?
By Helle Dale
BRUSSELS.
With all the reports of anti-Americanism in Europe, it may surprise people here to be told that the United States of America is the envy of European politicians. Looked at from Washington, the European Union is not often considered a major factor in U.S.-European relations, and most Americans have a vague notion at best of what the EU actually is. Some European politicians even want a United States of Europe. Where these political ambitions will lead is still uncertain, although they are not in and of themselves likely to solve the economic problems besetting the European economies. On a global scale, they may lead to greater confrontation with the United States, depending on who calls the shots and sets the political agenda in Europe.
The European Union, which started out in the 1950s as a largely economic grouping of six continental European countries (the European Common Market), has today evolved into a semistate-like organization that is expanding to include 25 members, including countries in Eastern and Central Europe. The EU already has a GDP the size of that of the United States and a population that exceeds it.
The EU already has a set of treaties that cover everything from trade to social policy, and even supposedly common foreign and security policy. It has a common currency for 12 European countries (the euro), and the EU now wants a constitution of its own, just like the Americans, to give it a "legal personality" and the other aspects of statehood. In a little over a month, the European Constitutional Convention will present the results of its yearlong work to a conference of the governments of the EU. If adopted, it will be submitted for ratification in each country.
It is difficult, however, to see how this project can work. A single market is one thing. Giving up national political sovereignty is quite another. In almost every case, even in France, European politicians have been far ahead of their electorates.
European constitutional negotiations have sometimes been compared to Philadelphia 1787 in that compromises have to be reached to balance the interests of smaller and bigger states. That comparison is true, but only up to a point. The entrenched political and national cultures of the old nation states of Europe are much harder to weld into a whole than the 13 former British colonies of the New World. And the bigger countries, primarily Germany and France, are deeply reluctant to accept equal representation from smaller neighbors.
What is more, the survival of the U.S. Constitution was precarious enough in itself. As John Adams observed, "The legislators of antiquity ... legislated for single cities, but who can legislate for 20 or 30 states, each of which is greater than Greece or Rome at those times." Before long, there were numerous threats of secession from the Union, including from the states of New England, before the issue burst into full flame with the American Civil War. All of this is frequently overlooked by those who argue if the Americans can do it, so can the Europeans.
The French quickly grasped the lead in the Constitutional Convention, arranging for former French President Valery Giscard d'Estaing to act as its head. Unfortunately, Mr. d'Estaing is no Jefferson or Madison. Representatives of other countries at the convention have complained that he has a way of arriving with a set of finished proposals, sidelining other participants and preempting objections. And after a while, smaller and medium-sized countries started coordinating their efforts to be heard. Specifically, they did not want the trimmings of empire to get out of hand. As a Finnish representative has quipped, "we do not want to import the American presidency, the standing committee of the Soviet politburo and the Chinese People's Congress." This referred to the proposal for an elected European president and a standing convention to deal with constitutional issues.
Finally, it is doubtful that the new European constitution will fix what most ails the continent — economic stagnation, rigid labor markets and declining birthrates. The introduction of the euro has not produced economic growth. The German economy, the euro zone's largest, contracted by 0.2 percent in the first quarter of this year, dragging other economies with it toward recession.
The prestigious French Institute of Internal Relations, in a new report titled "World Trade in the 21st Century," predicts that "The enlargement of the European Union will not be sufficient to guarantee parity with the United States," and that the EU's share of world economic output will shrink from 22 percent today to 12 percent in 50 years.
This is not what you hear in Brussels, of course. But surrounded by the architectural glories of old Europe, it is hard not to get the impression that the busy framers of the European Constitution are whistling past the graveyard, as splendid as it is.
http://www.washingtontimes.com/op-ed/20030520-102303-4620r.htm
The Central Scrutinizer
Saturday, May 17, 2003
May 17th, 2003
Thought the following article from the Financial Times of London was interesting and germane. Since I'm a firm believer that all politics are economic (can we say "no duh?"), on a international, or macro-economic level, economics will eventually drive policy.
Fears grow that US economy faces deflation
By Jenny Wiggins in New York, Peronet Despeignes in Washington and David Pilling in Tokyo
Published: May 16 2003 21:37 | Last Updated: May 16 2003 21:37
Fears of deflation in the US rose on Friday as stock prices fell and government bond yields dipped to 45-year lows after a key measure of inflation dropped to its lowest level in 37 years.
The concerns were heightened by reports that Japan's deflation gathered pace in the first quarter with prices down 3.5 per cent from a year ago, their fastest 12-month drop on record.
The fall may fuel concerns that the Japanese economy could be in a deflationary spiral. (Note: Also called a "liquidity trap", Scrute) Japanese prices have been falling since 1995 at an average annual rate of 1 to 2 per cent. The latest figures showed deflation accelerating in the 2002 financial year to 2.2 per cent, a record for a full year.
In the US the yield on 10-year and 30-year US Treasury bonds fell to 3.49 per cent and 4.45 per cent in early trading.
Longer-dated US government bonds have rallied sharply this week, with investors convinced that inflation will remain subdued, having less of an impact on the value of long-term assets.
The Labour Department reported that the 12-month rise in its core consumer price index fell to 1.5 per cent in April, its slowest 12-month rate of increase since January 1966. Strategists said the subsequent fall in bond yields could, however, be positive for the economy. "This is what the Federal Reserve wants," said Dominic Konstam, head of interest rates products research at Credit Suisse First Boston. (Note: the Fed wants the market to do this, but has threatened to buy long term bonds to inject "liquidity" into the financial markets. Normally the Fed works in the short term Treasury debt markets).
Falling yields mean falling borrowing costs, which make it easier for businesses to borrow and homeowners to refinance mortgages and get extra cash - factors that have helped keep the economy afloat. But the sharp slowdown in inflation has inflamed talk of Japanese-style deflation.
Japan's deflation figures were released along with gross domestic product figures showing that growth in the first quarter fell to almost zero, leading some economists to conclude that the economy was on the brink of yet another recession. Nominal growth fell 0.6 per cent in the March quarter, or minus 2.5 per cent on an annualised basis.
Paul Sheard, economist at Lehman Brothers, said: "If you look at the chart it looks horrible. It looks as though deflation is going through the floor." However, the headline figure exaggerated the picture, because the GDP deflator in the first quarter of 2002, when Japan began pulling out of recession, was positive, he noted. "It's something of a statistical fluke, though deflation is deflation and it is not a good sign." Most economists in the US have dismissed deflationary risks as marginal. But the Fed said recently that odds of an "unwelcome substantial" slowdown in inflation were now stronger than that of a rebound. "We continue to believe that inflationary pressures are building," said Brian Wesbury, an economist with Chicago-based, bond-trading firm Griffith Kubik, Stepehens and Thomson, but "it is getting harder and harder to argue against the deflation story".
Concerns have also grown about a global-wide deflation which the US could import, as western Europe flirts with recession and Japan looks more likely to enter a deflationary spiral.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1051390103932&p=1012571727088
As we, ah-hmm, "scrutinize" this report, we see some major macro-economic factors which are, IMO, driving, or at least heavily influencing, international policy. Japan's deflation has been a major concern which goes under-reported in the news we normally hear. Japan is fast approaching, IMO, and economic "perfect storm", where demographics, economics, and a rigid, consensus based, political system which can not act decisively, are laying the foundation for a major disruption in that nation, (and potentially a major political shift to extremism within the next 10-15 years.). The Japanese national public debt is somewhere around 140% of annual GDP (compared to approx 67% for the US), indicating governmental leaders have been running their economy on government spending. And since much of this spending consisted of "make work" public works projects of little to no economic value (parks, expensive off-shore airports, land reclamation.. etc), costing them over $1 Trillion since 1992.
Yet, because of the prodigious saving habits of the Japanese people (an estimated $12 Trillion) over the past 20-30 years, they have been able to finance this debt, despite almost zero percent interest returns on savings. But of course, as prices have declined, the purchasing power of these cash hoard has increased. However, given that an estimated 25% of the Japanese population will hit retirement age over the next 5-10 years, these people are loath to spend or consume, since few really have much faith in the corporate pension system. That's 1 in 4 Japanese workers who will be quitting their jobs, withdrawing retirement funds, and trying to scrape by. But that also means the Japanese income tax base will decline commensurately, depleting tax revenues and either forcing spending cuts or tax hikes to maintain their ability to pay the national debt. And that suggest interest rates will be forced higher as the quality of Japanese national debt becomes more dubious. And devaluing
Some have opined that Japan will be forced to import labor into its primarily homogenous workforce in order to maintain that tax base. Some have argued that Japan should devalue the yen in order to spur consumer spending (as people opt to spend their money rather than see it lose purchasing power through induced inflation). However, it would prove political suicide to suddenly cut the value of cash savings for all of those aging pensioners. Personally, I find such a shock to their social and economic fabric could lead to a return of extremist, perhaps militant, forces within Japanese politics.
And why the above article is pertinent to the US is that some economists and analysts are fearful that what's happening in Japan may happen in the US. A liquidity trap where interest rates are forced so low that effectively savers are paying banks to hold their money, and loans bear little to no cost to the borrower. But is the situation in the US the same as in Japan? There are similarities, a stock market bubble, followed by dramatic crash in equity values (with a commensurate drop in interest rates and booming bond market since bonds paying 5-8% become more valuable than newly issued Treasury bills). And the declining interest rates have led to a dramatic increases in real estate valuations in many areas (especially here in DC). And while we've avoided negative economic growth thus far, without some major change in the economic confidence and performance, there's the distinct possibility we may decline further, or at best, remain stagnant.
We've recently heard about the 40% decline in the value of the US dollar against the Euro in recent months. But it must be recalled that the Euro is still valued less than it was at its inception. That means the US dollar had appreciated that much, effectively setting up a protectionist barrier to US goods being sold in Europe. It would seem the Bush administration and Fed have decided that it was not good policy to subsidize the European and Japanese economies with a strong dollar policy. And one of the pre-requisites for decreasing the value of the dollar, imo, was to bring about a decrease in oil prices worldwide for the next several years (oil transactions are currently priced in USD). And while I'm not even willing to suggest that the recent war in Iraq was solely fought for oil (maybe I'll address the mid-east in a couple of days), it certainly would increase the odds of a US economic recovery, if not a global one.
Unfortunately, it likely will mean the possibility of an economic recession in Europe. And that can only exacerbate the double digit unemployment in many European nations.
Well... Enough for now... I'll leave it on that note.
TheCentralScrutinizer
Thought the following article from the Financial Times of London was interesting and germane. Since I'm a firm believer that all politics are economic (can we say "no duh?"), on a international, or macro-economic level, economics will eventually drive policy.
Fears grow that US economy faces deflation
By Jenny Wiggins in New York, Peronet Despeignes in Washington and David Pilling in Tokyo
Published: May 16 2003 21:37 | Last Updated: May 16 2003 21:37
Fears of deflation in the US rose on Friday as stock prices fell and government bond yields dipped to 45-year lows after a key measure of inflation dropped to its lowest level in 37 years.
The concerns were heightened by reports that Japan's deflation gathered pace in the first quarter with prices down 3.5 per cent from a year ago, their fastest 12-month drop on record.
The fall may fuel concerns that the Japanese economy could be in a deflationary spiral. (Note: Also called a "liquidity trap", Scrute) Japanese prices have been falling since 1995 at an average annual rate of 1 to 2 per cent. The latest figures showed deflation accelerating in the 2002 financial year to 2.2 per cent, a record for a full year.
In the US the yield on 10-year and 30-year US Treasury bonds fell to 3.49 per cent and 4.45 per cent in early trading.
Longer-dated US government bonds have rallied sharply this week, with investors convinced that inflation will remain subdued, having less of an impact on the value of long-term assets.
The Labour Department reported that the 12-month rise in its core consumer price index fell to 1.5 per cent in April, its slowest 12-month rate of increase since January 1966. Strategists said the subsequent fall in bond yields could, however, be positive for the economy. "This is what the Federal Reserve wants," said Dominic Konstam, head of interest rates products research at Credit Suisse First Boston. (Note: the Fed wants the market to do this, but has threatened to buy long term bonds to inject "liquidity" into the financial markets. Normally the Fed works in the short term Treasury debt markets).
Falling yields mean falling borrowing costs, which make it easier for businesses to borrow and homeowners to refinance mortgages and get extra cash - factors that have helped keep the economy afloat. But the sharp slowdown in inflation has inflamed talk of Japanese-style deflation.
Japan's deflation figures were released along with gross domestic product figures showing that growth in the first quarter fell to almost zero, leading some economists to conclude that the economy was on the brink of yet another recession. Nominal growth fell 0.6 per cent in the March quarter, or minus 2.5 per cent on an annualised basis.
Paul Sheard, economist at Lehman Brothers, said: "If you look at the chart it looks horrible. It looks as though deflation is going through the floor." However, the headline figure exaggerated the picture, because the GDP deflator in the first quarter of 2002, when Japan began pulling out of recession, was positive, he noted. "It's something of a statistical fluke, though deflation is deflation and it is not a good sign." Most economists in the US have dismissed deflationary risks as marginal. But the Fed said recently that odds of an "unwelcome substantial" slowdown in inflation were now stronger than that of a rebound. "We continue to believe that inflationary pressures are building," said Brian Wesbury, an economist with Chicago-based, bond-trading firm Griffith Kubik, Stepehens and Thomson, but "it is getting harder and harder to argue against the deflation story".
Concerns have also grown about a global-wide deflation which the US could import, as western Europe flirts with recession and Japan looks more likely to enter a deflationary spiral.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1051390103932&p=1012571727088
As we, ah-hmm, "scrutinize" this report, we see some major macro-economic factors which are, IMO, driving, or at least heavily influencing, international policy. Japan's deflation has been a major concern which goes under-reported in the news we normally hear. Japan is fast approaching, IMO, and economic "perfect storm", where demographics, economics, and a rigid, consensus based, political system which can not act decisively, are laying the foundation for a major disruption in that nation, (and potentially a major political shift to extremism within the next 10-15 years.). The Japanese national public debt is somewhere around 140% of annual GDP (compared to approx 67% for the US), indicating governmental leaders have been running their economy on government spending. And since much of this spending consisted of "make work" public works projects of little to no economic value (parks, expensive off-shore airports, land reclamation.. etc), costing them over $1 Trillion since 1992.
Yet, because of the prodigious saving habits of the Japanese people (an estimated $12 Trillion) over the past 20-30 years, they have been able to finance this debt, despite almost zero percent interest returns on savings. But of course, as prices have declined, the purchasing power of these cash hoard has increased. However, given that an estimated 25% of the Japanese population will hit retirement age over the next 5-10 years, these people are loath to spend or consume, since few really have much faith in the corporate pension system. That's 1 in 4 Japanese workers who will be quitting their jobs, withdrawing retirement funds, and trying to scrape by. But that also means the Japanese income tax base will decline commensurately, depleting tax revenues and either forcing spending cuts or tax hikes to maintain their ability to pay the national debt. And that suggest interest rates will be forced higher as the quality of Japanese national debt becomes more dubious. And devaluing
Some have opined that Japan will be forced to import labor into its primarily homogenous workforce in order to maintain that tax base. Some have argued that Japan should devalue the yen in order to spur consumer spending (as people opt to spend their money rather than see it lose purchasing power through induced inflation). However, it would prove political suicide to suddenly cut the value of cash savings for all of those aging pensioners. Personally, I find such a shock to their social and economic fabric could lead to a return of extremist, perhaps militant, forces within Japanese politics.
And why the above article is pertinent to the US is that some economists and analysts are fearful that what's happening in Japan may happen in the US. A liquidity trap where interest rates are forced so low that effectively savers are paying banks to hold their money, and loans bear little to no cost to the borrower. But is the situation in the US the same as in Japan? There are similarities, a stock market bubble, followed by dramatic crash in equity values (with a commensurate drop in interest rates and booming bond market since bonds paying 5-8% become more valuable than newly issued Treasury bills). And the declining interest rates have led to a dramatic increases in real estate valuations in many areas (especially here in DC). And while we've avoided negative economic growth thus far, without some major change in the economic confidence and performance, there's the distinct possibility we may decline further, or at best, remain stagnant.
We've recently heard about the 40% decline in the value of the US dollar against the Euro in recent months. But it must be recalled that the Euro is still valued less than it was at its inception. That means the US dollar had appreciated that much, effectively setting up a protectionist barrier to US goods being sold in Europe. It would seem the Bush administration and Fed have decided that it was not good policy to subsidize the European and Japanese economies with a strong dollar policy. And one of the pre-requisites for decreasing the value of the dollar, imo, was to bring about a decrease in oil prices worldwide for the next several years (oil transactions are currently priced in USD). And while I'm not even willing to suggest that the recent war in Iraq was solely fought for oil (maybe I'll address the mid-east in a couple of days), it certainly would increase the odds of a US economic recovery, if not a global one.
Unfortunately, it likely will mean the possibility of an economic recession in Europe. And that can only exacerbate the double digit unemployment in many European nations.
Well... Enough for now... I'll leave it on that note.
TheCentralScrutinizer
Friday, May 16, 2003
May 16th, 2003
Well, I've finally done it. Plunging into unknown territory as the net's newest Blogger. As some can obviously see, I'm a Zappa fan (as are many others who merely refuse to admit that a dirty mind is a terrible thing to waste)... ;0)
But this blog is not about music. It's about what really fascinates me; International Politics and the influences that drive these interactions between nations, states, and individuals. This site will provide me a ready repository for any number of articles I come across independently, or through my participation via other discussion forums on Silicon Investor (My handle there is Hawkmoon).
With my previous experience as a military and private investigator, my philosophy on world politics, and pretty much anything else, resides upon answering two seemingly simple, but broad and elusive, questions:
1.) What's the angle? IOW, what is the agenda of the party in question? Is it political, economic, or merely personal?
2.) Who's making money off the deal?... (follow da' money).. Money can be cash, property, or any other number of financial instruments. Follow the money trail and you'll ultimately find the root of international policymaking.
Governments are not monolithic entities. In fact, they are run by a relatively small percentage of the total population. And these people have immense power, whether the governmental system is democratic, authoritarian, or totalitarian.
However, all that being said, I do believe that ideals can, and do, drive many politicians. And while they generally have a financial basis (since we seldom do that which only makes us poorer), those ideals can facilitate wealth creation for a large percentage of a society. I don't subscribe to wealth creation being a zero-sum game of winners and losers. Some will just win more than others... :0)
I also am a firm believer in taking criticism well. I do not pretend to know all the answers. But I'm open to having my opinion influences by facts and documented evidence, depending on their significance to answering the questions above.
So as I get my feet under me with this blog posting, hopefully I'll provide a different and informative perspective that, even if you disagree with me, will cause you to pause and reflect on why you hold the particular beliefs that you do.
Stay tuned!!
TheCentralScrutinizer
Well, I've finally done it. Plunging into unknown territory as the net's newest Blogger. As some can obviously see, I'm a Zappa fan (as are many others who merely refuse to admit that a dirty mind is a terrible thing to waste)... ;0)
But this blog is not about music. It's about what really fascinates me; International Politics and the influences that drive these interactions between nations, states, and individuals. This site will provide me a ready repository for any number of articles I come across independently, or through my participation via other discussion forums on Silicon Investor (My handle there is Hawkmoon).
With my previous experience as a military and private investigator, my philosophy on world politics, and pretty much anything else, resides upon answering two seemingly simple, but broad and elusive, questions:
1.) What's the angle? IOW, what is the agenda of the party in question? Is it political, economic, or merely personal?
2.) Who's making money off the deal?... (follow da' money).. Money can be cash, property, or any other number of financial instruments. Follow the money trail and you'll ultimately find the root of international policymaking.
Governments are not monolithic entities. In fact, they are run by a relatively small percentage of the total population. And these people have immense power, whether the governmental system is democratic, authoritarian, or totalitarian.
However, all that being said, I do believe that ideals can, and do, drive many politicians. And while they generally have a financial basis (since we seldom do that which only makes us poorer), those ideals can facilitate wealth creation for a large percentage of a society. I don't subscribe to wealth creation being a zero-sum game of winners and losers. Some will just win more than others... :0)
I also am a firm believer in taking criticism well. I do not pretend to know all the answers. But I'm open to having my opinion influences by facts and documented evidence, depending on their significance to answering the questions above.
So as I get my feet under me with this blog posting, hopefully I'll provide a different and informative perspective that, even if you disagree with me, will cause you to pause and reflect on why you hold the particular beliefs that you do.
Stay tuned!!
TheCentralScrutinizer
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