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anonymous

Germany: Mitteleuropa Redux - 0 views

www.stratfor.com/...315_germany_mitteleuropa_redux

shared by anonymous on 16 Mar 10 - Cached
  • The global system is undergoing profound change. Three powers — Germany, Iran and China — face challenges forcing them to refashion the way they interact with their regions and the world. We will explore each of these three states in detail in our next three geopolitical weeklies, highlighting how STRATFOR’s assessments of these states are evolving.
  • German strategy in 1871, 1914 and 1939 called for pre-emptive strikes on France to prevent a two-front war.
  • They harnessed German capital and economic dynamism, submerged Germany into a larger economic entity, gave the Germans what they needed economically so they didn’t have to seek it militarily, and ensured that the Germans had no reason — or ability — to strike out on their own.
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  • STRATFOR has always doubted the euro would last. Having the same currency and monetary policy for rich, technocratic, capital-intensive economies like Germany as for poor, agrarian/manufacturing economies like Spain always seemed like asking for problems.
  • The resulting government debt load in Greece — which now exceeds annual Greek gross domestic product — will probably result in either a default (triggered by efforts to maintain such programs) or a social revolution (triggered by an effort to cut such programs). It is entirely possible that both will happen.
  • German Finance Minister Wolfgang Schauble on March 13 in which he essentially said that if Greece, or any other eurozone member, could not right their finances, they should be ejected from the eurozone. This really got our attention.
  • Back-of-the-envelope math indicates that in the past decade, Germany has gained roughly a 25 percent cost advantage over Club Med.
  • The implications of this are difficult to overstate. If the euro is essentially gutting the European — and again to a greater extent the Club Med — economic base, then Germany is achieving by stealth what it failed to achieve in the past thousand years of intra-European struggles.
  • It is not so much that STRATFOR now sees the euro as workable in the long run — we still don’t — it’s more that our assessment of the euro is shifting from the belief that it was a straightjacket for Germany to the belief that it is Germany’s springboard.
  • But this was not the “union” the rest of Europe signed up for — it is the Mitteleuropa that the rest of Europe will remember well.
anonymous

Objectivism & Politics, Part 50 - 0 views

aynrandcontrahumannature.blogspot.com/...ectivism-politics-part-50.html

criticalthinking politics tradition

shared by anonymous on 05 May 10 - Cached
  • Rand is unique in that she tried to justify capitalism and freedom using the same sort of rationalistic assumptions accepted by the Old Left. She insisted, just like so many of the so-called “scientific” socialists and progressives of the nineteenth and early twentieth centuries, that everything in the political and moral realms had to be explicity justified on the basis of “reason.” But whether used to provide the rationalistic justification of socialism, capitalism, or any other ism that a febrile imagination can dream up, all such rationalisms amount to the same thing: incapacity in the face of the complexities of the human condition.
  • Reverence for tradition is, for the intelligent, non-ideological conservative, merely a tool used to compliment less tacit forms of knowledge, such as science and individual experience.
  • Traditional usages often have proven their worth over time, and should not be tossed out merely become some rationalist fails to explain it by “reason.” The conservative proceeds cautiously when reforming a tradition, because he knows, from long experience, how easy it is to make things worse, and that when faced with any daunting complexity, sheer trial and error is often a far better guide than the so-called “reason” of conceited intellectuals.
  • anonymous on 05 May 10
     
    By Greg Nyquist at Ayn Rand Contra Human Nature on May 4, 2010.
anonymous

Germany, Greece and Exiting the Eurozone - 0 views

www.stratfor.com/...ny_greece_and_exiting_eurozone

geopolitics geography

shared by anonymous on 18 May 10 - Cached
  • the economic underpinnings of paper money are not nearly as important as the political underpinnings
  • The trouble with the euro is that it attempts to overlay a monetary dynamic on a geography that does not necessarily lend itself to a single economic or political “space.”
  • Europe is the second-smallest continent on the planet but has the second-largest number of states packed into its territory.
  • ...14 more annotations...
  • the Continent’s plentiful navigable rivers, large bays and serrated coastlines enable the easy movement of goods and ideas across Europe.
  • Europe’s network of rivers and seas are not integrated via a single dominant river or sea network, however, meaning capital generation occurs in small, sequestered economic centers.
  • southern Europe lacks a single river useful for commerce. Consequently, Northern Europe is more urban, industrial and technocratic while Southern Europe tends to be more rural, agricultural and capital-poor.
  • For centuries, Europe was home to feuding empires and states. After World War II, it became the home of devastated peoples whose security was the responsibility of the United States.
  • To join the eurozone, a country must abide by rigorous “convergence criteria” designed to synchronize the economy of the acceding country with Germany’s economy.
  • two scenarios of eurozone reconstitution that have garnered the most attention in the media
  • Germany would therefore not be leaving the eurozone to save its economy or extricate itself from its own debts, but rather to avoid the financial burden of supporting the Club Med economies and their ability to service their 3 trillion euro mountain of debt.
  • Germany could reintroduce its national currency with far more ease than other eurozone members could.
  • German banks own much of the debt issued by Club Med, which would likely default on repayment in the event Germany parted with the euro.
  • The option of leaving the eurozone for Germany
  • If Athens were able to control its monetary policy, it would ostensibly be able to “solve” the two major problems currently plaguing the Greek economy
  • Athens could ease its financing problems substantially.
  • the first thing the Greeks will want to do is withdraw all funds from any institution where their wealth would be at risk
  • The resulting conundrum is one in which reconstitution of the eurozone may make sense at some point down the line. But the interlinked web of economic, political, legal and institutional relationships makes this nearly impossible. The cost of exit is prohibitively high, regardless of whether it makes sense.
  • anonymous on 18 May 10
     
    May 18, 2010
anonymous

Europe: The New Plan - 0 views

www.stratfor.com/...20101220-europe-new-plan

europe geopolitics euro

shared by anonymous on 21 Dec 10 - Cached
  • the euro, has suffered from two core problems
  • the lack of a parallel political union
  • the issue of debt
  • ...20 more annotations...
  • Taxation and appropriation — who pays how much to whom — are essentially political acts. One cannot have a centralized fiscal authority without first having a centralized political/military authority capable of imposing and enforcing its will.
  • the checkbook is not the ultimate power in the galaxy. The ultimate power comes from the law backed by a gun.
  • Americans fought the bloodiest war in their history from 1861 to 1865 over the issue of central power versus local power.
  • Northern Europe is composed of advanced technocratic economies, made possible by the capital-generating capacity of the well-watered North European Plain and its many navigable rivers
  • a people that identifies with its brethren throughout the river valleys and in other areas linked by what is typically omnipresent infrastructure. This crafts a firm identity at the national level rather than local level and assists with mass-mobilization strategies.
  • Southern Europe, in comparison, suffers from an arid, rugged topography and lack of navigable rivers.
  • identity is more localized; southern Europeans tend to be more concerned with family and town than nation, since they do not benefit from easy transport options or the regular contact that northern Europeans take for granted.
  • southern European economies are highly dependent upon a weak currency
  • While states of this grouping often plan together for EU summits, in reality the only thing they have in common is a half-century of lost ground to recover, and they need as much capital as can be made available.
  • European Union is now made up of 27 different nationalities
  • With Europe having such varied geographies, economies and political systems, any political and fiscal union would be fraught with complications and policy mis-prescriptions from the start. In short, this is a defect of the euro that is not going to be corrected, and to be blunt, it isn’t one that the Europeans are trying to fix right now.
  • The ECB’s primary (and only partially stated) mission is to foster long-term stable growth in the eurozone’s largest economy — Germany — working from the theory that what is good for the continent’s economic engine is good for Europe.
  • Smaller, poorer economies are more volatile, since even tiny changes in the international environment can send them through either the floor or the roof.
  • The question is not “whither the euro” but how to provide a safety net for the euro’s less desirable, debt-related aftereffects.
  • When the not-so-desperate eurozone states step in with a few billion euros — 223 billion euros so far, to be exact — they want not only their money back but also some assurance that such overindulgences will not happen again.
  • The second is that the Dec. 16 agreement is only an agreement in principle.
  • Three complications exist,
  • First, when a bailout is required, it is clearly because something has gone terribly wrong.
  • The third complication is that the bailout mechanism is actually only half the plan. The other half is to allow states to at least partially default on their debt
  • tates that just squeaked by in 2010 must run a more difficult gauntlet in 2011 — particularly if they depend heavily on foreign investors for funding their budget deficits.
  • anonymous on 21 Dec 10
     
    "Europe is on the cusp of change. An EU heads-of-state summit Dec. 16 launched a process aimed to save the common European currency. If successful, this process would be the most significant step toward creating a singular European power since the creation of the European Union itself in 1992 - that is, if it doesn't destroy the euro first."
anonymous

Airport Attack Highlights Russia's Deeply Embedded Issues - 0 views

www.stratfor.com/...russias-deeply-embedded-issues

geopolitics russia

shared by anonymous on 25 Jan 11 - Cached
  • Moscow faces a deeper-rooted problem than what must currently be done about Chechnya or Dagestan — and that problem is Russia’s inherent indefensibility and insecurity.
  • Russia, though vast in size, has few geographic barriers separating and protecting it from surrounding nations. Lacking well-placed oceans or mountains, Russia has throughout history had to essentially create these barriers in the form of buffer states by dominating various nations, whether it be Estonia or Tajikistan or somewhere in between.
  • The mountainous terrain has bred ethnic groups like Chechens, Ingush and Dagestanis that have a warrior-like and clan-based mentality and are especially opposed to taking orders from Moscow.
  • anonymous on 25 Jan 11
     
    "Moscow witnessed another act of terrorism on Monday as a suicide bomber detonated an explosive device and killed dozens of people at Domodedovo International, Russia's busiest airport. All signs point to the attacker hailing from one of the republics of the restless Northern Caucasus, likely either Chechnya or Dagestan, where Islamist militant-fueled violence and instability are regular occurrences. Monday's attack marks the second time in less than one year that such militants have struck beyond their unstable republics and into Russia's bustling capital, more than 1,000 miles away."
anonymous

Portfolio: Eurozone's Future To Rely Heavily On Germany - 0 views

www.stratfor.com/...es-future-rely-heavily-germany

geopolitics germany

shared by anonymous on 30 Jul 11 - Cached
  • When the euro came into existence it granted unlimited volumes of cheap capital to states that had no history of having access to moderately priced capital whatsoever.
  • The result was a series of sovereign debt crises as the debt ballooned beyond the ability of these states to pay.
  • Normal bailouts share two characteristics.
  • ...12 more annotations...
  • First, the terms are normally onerous.
  • Second, a bailout is only appropriate if the entity that you’re bailing out can’t in time repair its finances and get back in working order.
  • Neither of these conditions really apply to the weaker states in Europe.
  • First, the conditions of the European Financial Stability Fund, the ESFS, that’s the bailout program, are really not all that tough.
  • Second, many of the states under bailout or who have been flirting with bailouts simply do not have long-term income potential.
  • the Germans simply have not wanted to permanently take on responsibility for these weak states that can’t grow on their own.
  • But on July 21 the Germans made a decision that they were going to back the eurozone to the hilt. It all comes down to the way they changed the way that the ESFS works.
  • First, the ESFS no longer has to go back the Council of Ministers to get permission for a bailout
  • Second, the ESFS can really take any action it deems fit.
  • Germany’s commitment to this new program means that for us, the eurozone crisis is over. But there are two things you must keep in mind.
  • First is why did Germany change its mind?
  • Finally, European banks are some of the most unhealthy in the world
  • anonymous on 30 Jul 11
     
    Vice President of Analysis Peter Zeihan explains how the German redesign of the European Financial Stability Fund will secure its influence over the financially troubled states of Europe.
anonymous

Hiding in Plain Sight - The Problem with Pakistani Intelligence - 0 views

www.stratfor.com/...roblems-pakistani-intelligence

shared by anonymous on 04 May 11 - Cached
  • Clearly, Pakistan is coming under a great deal of pressure to explain how authorities in the country were not aware that the world’s most wanted man was enjoying safe haven for years in a large facility in the heart of the country.
  • It is no secret that Pakistan’s army and foreign intelligence service, the Inter-Services Intelligence (ISI) directorate, actively cultivated a vast array of Islamist militants – both local and foreign, from the early 1980s until at least the events of Sept. 11, 2001 – as instruments of foreign policy.
  • the policy of backing Islamist militants for power projection vis-a-vis India and Afghanistan had been in place for more than 20 years, and was instrumental in creating a large murky spatial nexus of local and foreign militants (specifically al Qaeda) that had complex relations with elements within and close to state security organs.
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  • One of the key reasons for this situation is that while the stakeholders of the country (civil as well as military) are engaged in a fierce struggle against local and foreign Islamist insurgents, significant societal forces and sympathetic individuals from within the state are providing support to jihadists. But it’s more problematic that there are no quick fixes for this state of affairs. Further complicating this situation is that the U.S. objectives for the region require Islamabad to address these issues on a fast-track basis.
  • anonymous on 04 May 11
     
    "The fallout continued Tuesday from the revelation that until his death at the hands of U.S. forces on May 2, al Qaeda leader Osama bin Laden been living in a large compound not far from the Pakistani capital. A number of senior U.S. officials issued tough statements against Pakistan. President Barack Obama's counterterrorism adviser John Brennan said that while there was no evidence to suggest that Pakistani officials knew that bin Laden was living at the facility, the possibility could not be ruled out. The chairwoman of the U.S. Senate's Select Intelligence Committee, Diane Feinstein, sought more details from the CIA about the Pakistani role and warned that Congress could dock financial assistance to Islamabad if it was found that the al Qaeda leader had been harbored by state officials. CIA chief Leon Panetta disclosed that American officials feared that Pakistan could have undermined the operation by leaking word to its targets."
anonymous

Bin Laden's Death and the Implications for Jihadism - 0 views

www.stratfor.com/...eath-and-implications-jihadism

geopolitics

shared by anonymous on 03 May 11 - Cached
  • a deep-seated thirst for vengeance led the United States to invade Afghanistan in October 2001 and to declare a “global war on terrorism.”
  • In spite of the sense of justice and closure the killing of bin Laden brings, however, his death will likely have very little practical impact on the jihadist movement.
  • the phenomenon of jihadism is far wider than just the al Qaeda core leadership of bin Laden and his closest followers.
  • ...3 more annotations...
  • All of this has caused the al Qaeda core to become primarily an organization that produces propaganda and provides guidance and inspiration to the other jihadist elements rather than an organization focused on conducting operations.
  • As STRATFOR has analyzed the war between the jihadist movement and the rest of the world, we have come to view the battlefield as being divided into two distinct parts, the physical battlefield and the ideological battlefield.
  • While the al Qaeda core has been marginalized recently, it has practiced good operational security and has been able to protect its apex leadership for nearly 10 years from one of the most intense manhunts in human history.
  • anonymous on 03 May 11
     
    "U.S. President Barack Obama appeared in a hastily arranged televised address the night of May 1, 2011, to inform the world that U.S. counterterrorism forces had located and killed Osama bin Laden. The operation, which reportedly happened in the early hours of May 2 local time, targeted a compound in Abbottabad, a city located some 31 miles north of Islamabad, Pakistan's capital. The nighttime raid resulted in a brief firefight that left bin Laden and several others dead. A U.S. helicopter reportedly was damaged in the raid and later destroyed by U.S. forces. Obama reported that no U.S. personnel were lost in the operation. After a brief search of the compound, the U.S. forces left with bin Laden's body and presumably anything else that appeared to have intelligence value. From Obama's carefully scripted speech, it would appear that the U.S. conducted the operation unilaterally with no Pakistani assistance - or even knowledge."
anonymous

A Brief History of the Corporation: 1600 to 2100 - 1 views

www.ribbonfarm.com/...f-the-corporation-1600-to-2100

economics predictions longnow

shared by anonymous on 23 Jun 11 - Cached
  • In its 400+ year history, the corporation has achieved extraordinary things, cutting around-the-world travel time from years to less than a day, putting a computer on every desk, a toilet in every home (nearly) and a cellphone within reach of every human.  It even put a man on the Moon and kinda-sorta cured AIDS.
  • The Age of Corporations is coming to an end. The traditional corporation won’t vanish, but it will cease to be the center of gravity of economic life in another generation or two.  They will live on as religious institutions do today, as weakened ghosts of more vital institutions from centuries ago.
  • this post is mostly woven around ideas drawn from five books that provide appropriate fuel for this business-first frame. I will be citing, quoting and otherwise indirectly using these books over several future posts
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  • For a long time, I was misled by the fact that 90% of the available books frame globalization and the emergence of modernity in terms of the nation-state as the fundamental unit of analysis, with politics as the fundamental area of human activity that shapes things.
  • But the more I’ve thought about it, the more I’ve been pulled towards a business-first perspective on modernity and globalization.
  • The human world, like physics, can be reduced to four fundamental forces: culture, politics, war and business.
  • Culture is the most mysterious, illegible and powerful force.
  • But one quality makes gravity dominate at large space-time scales: gravity affects all masses and is always attractive, never repulsive.  So despite its weakness, it dominates things at sufficiently large scales. I don’t want to stretch the metaphor too far, but something similar holds true of business.
  • On the scale of days or weeks, culture, politics and war matter a lot more in shaping our daily lives.
  • Business though, as an expression of the force of unidirectional technological evolution, has a destabilizing unidirectional effect. It is technology, acting through business and Schumpeterian creative-destruction, that drives monotonic, historicist change, for good or bad. Business is the locus where the non-human force of technological change sneaks into the human sphere.
  • Culture is suspicious of technology. Politics is mostly indifferent to and above it. War-making uses it, but maintains an arms-length separation.
  • Business? It gets into bed with it. It is sort of vaguely plausible that you could switch artists, politicians and generals around with their peers from another age and still expect them to function. But there is no meaningful way for a businessman from (say) 2000 BC to comprehend what Mark Zuckerberg does, let alone take over for him. Too much magical technological water has flowed under the bridge.
  • It is business that creates the world of magic, not technology itself. And the story of business in the last 400 years is the story of the corporate form.
  • There are some who treat corporate forms as yet another technology (in this case a technology of people-management), but despite the trappings of scientific foundations (usually in psychology) and engineering synthesis (we speak of organizational “design”), the corporate form is not a technology.  It is the consequence of a social contract like the one that anchors nationhood. It is a codified bundle of quasi-religious beliefs externalized into an animate form that seeks to preserve itself like any other living creature.
  • What was new was the idea of a publicly traded joint-stock corporation, an entity with rights similar to those of states and individuals, with limited liability and significant autonomy
  • two important points about this evolution of corporations.
  • The first point is that the corporate form was born in the era of Mercantilism, the economic ideology that (zero-sum) control of land is the foundation of all economic power.
  • In politics, Mercantilism led to balance-of-power models.
  • In business, once the Age of Exploration (the 16th century) opened up the world, it led to mercantilist corporations focused on trade
  • The forces of radical technological change — the Industrial Revolution — did not seriously kick until after nearly 200 years of corporate evolution (1600-1800) in a mercantilist mold.
  • Smith was both the prophet of doom for the Mercantilist corporation, and the herald of what came to replace it: the Scumpeterian corporation.
  • The corporate form therefore spent almost 200 years — nearly half of its life to date — being shaped by Mercantilist thinking, a fundamentally zero-sum way of viewing the world.
  • It was not until after the American Civil War and the Gilded Age that businesses fundamentally reorganized around (as we will see) time instead of space, which led, as we will see, to a central role for ideas and therefore the innovation function.
  • The Black Hills Gold Rush of the 1870s, the focus of the Deadwood saga, was in a way the last hurrah of Mercantilist thinking. William Randolph Hearst, the son of gold mining mogul George Hearst who took over Deadwood in the 1870s, made his name with newspapers. The baton had formally been passed from mercantilists to schumpeterians.
    • anonymous
      anonymous on 23 Jun 11
       
      So, Mercantilism was about colonizing space. Corporatism is about colonizing time. This is a pretty useful (though arguably too-reductionist) way to latch on to the underpinning of later thoughts.
  • This divide between the two models can be placed at around 1800, the nominal start date of the Industrial Revolution, as the ideas of Renaissance Science met the energy of coal to create a cocktail that would allow corporations to colonize time.
  • The second thing to understand about the evolution of the corporation is that the apogee of power did not coincide with the apogee of reach.
  • for America, corporations employed less than 20% of the population in 1780, and over 80% in 1980, and have been declining since
  • Certainly corporations today seem far more powerful than those of the 1700s, but the point is that the form is much weaker today, even though it has organized more of our lives. This is roughly the same as the distinction between fertility of women and population growth: the peak in fertility (a per-capita number) and peak in population growth rates (an aggregate) behave differently.
  • a useful 3-phase model of the history of the corporation: the Mercantilist/Smithian era from 1600-1800, the Industrial/Schumpeterian era from 1800 – 2000 and finally, the era we are entering, which I will dub the Information/Coasean era
    • anonymous
      anonymous on 23 Jun 11
       
      I think it would be useful to map these eras against the backdrop of my previously established Generational timeline (as well as the StratFor 50-year cycle breakdown) in order to see if there are any self-supporting model elements.
  • By a happy accident, there is a major economist whose ideas help fingerprint the economic contours of our world: Ronald Coase.
  • To a large extent, the history of the first 200 years of corporate evolution is the history of the East India Company. And despite its name and nation of origin, to think of it as a corporation that helped Britain rule India is to entirely misunderstand the nature of the beast.
  • Two images hint at its actual globe-straddling, 10x-Walmart influence: the image of the Boston Tea Partiers dumping crates of tea into the sea during the American struggle for independence, and the image of smoky opium dens in China. One image symbolizes the rise of a new empire. The other marks the decline of an old one.
  • At a broader level, the EIC managed to balance an unbalanced trade equation between Europe and Asia whose solution had eluded even the Roman empire.
  • For this scheme to work, three foreground things and one background thing had to happen: the corporation had to effectively take over Bengal (and eventually all of India), Hong Kong (and eventually, all of China, indirectly) and England.
  • The background development was simpler. England had to take over the oceans and ensure the safe operations of the EIC.
  • eventually, as the threat from the Dutch was tamed, it became clear that the company actually had more firepower at its disposal than most of the nation-states it was dealing with. The realization led to the first big domino falling, in the corporate colonization of India, at the battle of Plassey.
  • The EIC was the original too-big-to-fail corporation. The EIC was the beneficiary of the original Big Bailout. Before there was TARP, there was the Tea Act of 1773 and the Pitt India Act of 1783. The former was a failed attempt to rein in the EIC, which cost Britain the American Colonies.  The latter created the British Raj as Britain doubled down in the east to recover from its losses in the west. An invisible thread connects the histories of India and America at this point. Lord Cornwallis, the loser at the Siege of Yorktown in 1781 during the revolutionary war, became the second Governor General of India in 1786.
  • But these events were set in motion over 30 years earlier, in the 1750s. There was no need for backroom subterfuge.  It was all out in the open because the corporation was such a new beast, nobody really understood the dangers it represented.
  • there was nothing preventing its officers like Clive from simultaneously holding political appointments that legitimized conflicts of interest. If you thought it was bad enough that Dick Cheney used to work for Halliburton before he took office, imagine if he’d worked there while in office, with legitimate authority to use his government power to favor his corporate employer and make as much money on the side as he wanted, and call in the Army and Navy to enforce his will. That picture gives you an idea of the position Robert Clive found himself in, in 1757.
  • The East India bubble was a turning point.
  • Over the next 70 years, political, military and economic power were gradually separated and modern checks and balances against corporate excess came into being.
  • It is not too much of a stretch to say that for at least a century and a half, England’s foreign policy was a dance in Europe in service of the EIC’s needs on the oceans.
  • Mahan’s book is the essential lens you need to understand the peculiar military conditions in the 17th and 18th centuries that made the birth of the corporation possible.)
  • The 16th century makes a vague sort of sense as the “Age of Exploration,” but it really makes a lot more sense as the startup/first-mover/early-adopter phase of the corporate mercantilism. The period was dominated by the daring pioneer spirit of Spain and Portugal, which together served as the Silicon Valley of Mercantilism. But the maritime business operations of Spain and Portugal turned out to be the MySpace and Friendster of Mercantilism: pioneers who could not capitalize on their early lead.
  • Conventionally, it is understood that the British and the Dutch were the ones who truly took over. But in reality, it was two corporations that took over: the EIC and the VOC (the Dutch East India Company,  Vereenigde Oost-Indische Compagnie, founded one year after the EIC) the Facebook and LinkedIn of Mercantile economics respectively. Both were fundamentally more independent of the nation states that had given birth to them than any business entities in history. The EIC more so than the VOC.  Both eventually became complex multi-national beasts.
  • arguably, the doings of the EIC and VOC on the water were more important than the pageantry on land.  Today the invisible web of container shipping serves as the bloodstream of the world. Its foundations were laid by the EIC.
    • anonymous
      anonymous on 23 Jun 11
       
      There was an excellent episode of the original Connections series that pointed this out, specifically focusing on the Dutch boats and the direct line to container ships and 747 cargo planes.
  • A new idea began to take its place in the early 19th century: the Schumpeterian corporation that controlled, not trade routes, but time. It added the second of the two essential Druckerian functions to the corporation: innovation.
  • I call this the “most misleading table in the world.”
  • corporations and nations may have been running on Mercantilist logic, but the undercurrent of Schumpeterian growth was taking off in Europe as early as 1500 in the less organized sectors like agriculture. It was only formally recognized and tamed in the early 1800s, but the technology genie had escaped.
  • The action shifted to two huge wildcards in world affairs of the 1800s: the newly-born nation of America and the awakening giant in the east, Russia. Per capita productivity is about efficient use of human time. But time, unlike space, is not a collective and objective dimension of human experience. It is a private and subjective one. Two people cannot own the same piece of land, but they can own the same piece of time.  To own space, you control it by force of arms. To own time is to own attention. To own attention, it must first be freed up, one individual stream of consciousness at a time.
  • The Schumpeterian corporation was about colonizing individual minds. Ideas powered by essentially limitless fossil-fuel energy allowed it to actually pull it off.
  • it is probably reaosonably safe to treat the story of Schumpeterian growth as an essentially American story.
  • In many ways the railroads solved a vastly speeded up version of the problem solved by the EIC: complex coordination across a large area.  Unlike the EIC though, the railroads were built around the telegraph, rather than postal mail, as the communication system. The difference was like the difference between the nervous systems of invertebrates and vertebrates.
  • If the ship sailing the Indian Ocean ferrying tea, textiles, opium and spices was the star of the mercantilist era, the steam engine and steamboat opening up America were the stars of the Schumpeterian era.
  • The primary effect of steam was not that it helped colonize a new land, but that it started the colonization of time. First, social time was colonized. The anarchy of time zones across the vast expanse of America was first tamed by the railroads for the narrow purpose of maintaining train schedules, but ultimately, the tools that served to coordinate train schedules: the mechanical clock and time zones, served to colonize human minds.  An exhibit I saw recently at the Union Pacific Railroad Museum in Omaha clearly illustrates this crucial fragment of history:
  • For all its sophistication, the technology of sail was mostly a very-refined craft, not an engineering discipline based on science.
  • Steam power though was a scientific and engineering invention.
  • Scientific principles about gases, heat, thermodynamics and energy applied to practical ends, resulting in new artifacts. The disempowerment of craftsmen would continue through the Schumpeterian age, until Fredrick Taylor found ways to completely strip mine all craft out of the minds of craftsmen, and put it into machines and the minds of managers.
  • It sounds awful when I put it that way, and it was, in human terms, but there is no denying that the process was mostly inevitable and that the result was vastly better products.
  • The Schumpeterian corporation did to business what the doctrine of Blitzkrieg would do to warfare in 1939: move humans at the speed of technology instead of moving technology at the speed of humans.
  • Blitzeconomics allowed the global economy to roar ahead at 8% annual growth rates instead of the theoretical 0% average across the world for Mercantilist zero-sum economics. “Progress” had begun.
  • Two phrases were invented to name the phenomenon: productivity meant shrinking autonomously-owned time. Increased standard of living through time-saving devices became code for the fact that the “freed up” time through “labor saving” devices was actually the de facto property of corporations. It was a Faustian bargain.
  • Many people misunderstood the fundamental nature of Schumpeterian growth as being fueled by ideas rather than time. Ideas fueled by energy can free up time which can then partly be used to create more ideas to free up more time. It is a positive feedback cycle,  but with a limit. The fundamental scarce resource is time. There is only one Earth worth of space to colonize. Only one fossil-fuel store of energy to dig out. Only 24 hours per person per day to turn into capitive attention.
  • Then the Internet happened, and we discovered the ability to mine time as fast as it could be discovered in hidden pockets of attention. And we discovered limits. And suddenly a new peak started to loom: Peak Attention.
  • There is certainly plenty of energy all around (the Sun and the wind, to name two sources), but oil represents a particularly high-value kind. Attention behaves the same way.
  • Take an average housewife, the target of much time mining early in the 20th century. It was clear where her attention was directed. Laundry, cooking, walking to the well for water, cleaning, were all obvious attention sinks. Washing machines, kitchen appliances, plumbing and vacuum cleaners helped free up a lot of that attention, which was then immediately directed (as corporate-captive attention) to magazines and television.
  • The point isn’t that we are running out of attention. We are running out of the equivalent of oil: high-energy-concentration pockets of easily mined fuel.
  • There is a lot more money to be made in replacing hand-washing time with washing-machine plus magazine time, than there is to be found in replacing one hour of TV with a different hour of TV.
  • . To get to Clay Shirky’s hypothetical notion of cognitive surplus, we need Alternative Attention sources. To put it in terms of per-capita productivity gains, we hit a plateau.
  • When Asia hits Peak Attention (America is already past it, I believe), absolute size, rather than big productivity differentials, will again define the game, and the center of gravity of economic activity will shift to Asia.
  • Once again, it is the oceans, rather than land, that will become the theater for the next act of the human drama. While American lifestyle designers are fleeing to Bali, much bigger things are afoot in the region. And when that shift happens, the Schumpeterian corporation, the oil rig of human attention, will start to decline at an accelerating rate. Lifestyle businesses and other oddball contraptions — the solar panels and wind farms of attention economics — will start to take over.
  • It will be the dawn of the age of Coasean growth.
  • Coasean growth is not measured in terms of national GDP growth. That’s a Smithian/Mercantilist measure of growth. It is also not measured in terms of 8% returns on the global stock market.  That is a Schumpeterian growth measure. For that model of growth to continue would be a case of civilizational cancer (“growth for the sake of growth is the ideology of the cancer cell” as Edward Abbey put it).
  • Coasean growth is fundamentally not measured in aggregate terms at all. It is measured in individual terms. An individual’s income and productivity may both actually decline, with net growth in a Coasean sense.
  • How do we measure Coasean growth? I have no idea. I am open to suggestions. All I know is that the metric will need to be hyper-personalized and relative to individuals rather than countries, corporations or the global economy. There will be a meaningful notion of Venkat’s rate of Coasean growth, but no equivalent for larger entities.
  • The fundamental scarce resource that Coasean growth discovers and colonizes is neither space, nor time. It is perspective.
  • anonymous on 23 Jun 11
     
    This is a lay friendly, amateur, mental exploration of the Corporation. It's also utterly absorbing and comes with the usual collection of caveats that we amateurs are accustomed to rattling off when we dunk ourselves into issues much bigger than ourselves. Thanks to BoingBoing, via Futurismic, for the pointer: http://www.boingboing.net/2011/06/23/a-brief-history-of-t.html http://futurismic.com/2011/06/22/a-brief-history-of-the-corporation-1600-to-2100/ "The year was 1772, exactly 239 years ago today, the apogee of power for the corporation as a business construct. The company was the British East India company (EIC). The bubble that burst was the East India Bubble. Between the founding of the EIC in 1600 and the post-subprime world of 2011, the idea of the corporation was born, matured, over-extended, reined-in, refined, patched, updated, over-extended again, propped-up and finally widely declared to be obsolete. Between 2011 and 2100, it will decline - hopefully gracefully - into a well-behaved retiree on the economic scene."
anonymous

Traveling Through Multiple Europes - 0 views

www.stratfor.com/...eling-through-multiple-europes

shared by anonymous on 06 Nov 14 - No Cached
  • The crisis is having an uneven effect on EU member states because the eurozone locks countries with different levels of economic development into the same currency union.
  • Europe's geography helps explain these differences: Countries in the south have traditionally dealt with high capital costs and low capital-generation capacity, while countries in the north have seen the opposite.
  • Merely moving people and goods from point to point on the Iberian Peninsula has always posed formidable challenges for governments and traders.
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  • In contrast, most of Germany is flat.
  • The lack of any real physical borders to the east and west also helps explain Germany's historical conflict with its neighbors.
  • The same geography that made Germany a place of conflict also explains its economic power: Germany is the center of Europe from almost every possible point of view.
  • Greece is a rugged country with narrow coastal plains that swiftly give way to mountains.
  • Greece's extremely fragmented geography and its strategic position on the eastern Mediterranean helps explain why it has struggled throughout history to get anything done.
  • Whenever I'm in a foreign country, I make an effort to visit bookstores because the books people read and write offer insights into the social mood.
  • In an Oporto bookstore, among the bestsellers was a book called We Are Not Germans, while a Rome bookstore had a book called It's Not Worth a Lira, a plea to leave the euro and return to Italy's old currency, that appeared to be quite popular.
  • Germany is seen as a country where everything works and governments are efficient. On the other hand, it is also seen as a hegemon that doesn't understand or care about the situation in the nations it is trying to lead.
  • While conservative forces are moving to the right and nationalist forces are gaining strength, the center-left is going through an identity crisis that is generating frictions within the parties and confusing their traditional voters
  • The irony is that the same process that is creating political and social tensions in Europe's core is helping to mitigate the negative effects of a demographic change.
  • Poland was a country confident about its economic strength but worried about its future. History has given the Poles a deep understanding of geopolitics and too many reasons to be worried about the events beyond their borders.
  • The Poles are proud of being members of the European Union, but they are not completely confident that Brussels will come to their rescue should the crisis with Russia escalate.
  • . The crisis has now reached a point where its two main players are under extreme pressure. Germany joined the eurozone under the assumption that no bailouts would be given to nations in distress and no monetization of debt would take place. France joined the eurozone under the assumption that it would remain the political leader of Europe. The crisis has put all the promises and agreements that supported the Franco-German unity in doubt.
  • Europeanists believe that things would be much better if the European Union became a true federation. They are probably right. The question is how to accomplish this.
  • anonymous on 06 Nov 14
     
    "Europe is overcrowded with people and with nations. Six decades ago, the need to suppress the dangerous forces of nationalism led to the unprecedented political, economic and social experiment now known as the European Union."
anonymous

The End of Consensus Politics in China - 0 views

www.stratfor.com/...end-consensus-politics-china

shared by anonymous on 05 Aug 14 - Cached
  • What is the fundamental purpose of Xi's anti-corruption campaign? An attempt to answer this question will not tell us China's political future, but it will tell us something about Xi's strategy -- not only for consolidating his personal influence within the Party, government and military apparatuses, but also and more important, for managing the immense social, economic, political and international pressures that are likely to come to a head in China during his tenure.
  • The announcement July 29 of a formal investigation into retired Politburo Standing Committee member Zhou Yongkang marked something of an end to the first major phase of Xi's anti-corruption campaign.
  • Zhou was known to sit at the apex of at least these three power bases, and his influence likely extended deep into many more, making him not only a formidable power broker but also, at least in the case of his oil industry ties, a major potential obstacle to reform.
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  • Now begins another phase. There are indications that it will center on the military. There are other signs that it will target Shanghai, the primary power base of Jiang Zemin and the locus of financial sector reform in China.
  • the formation of a unified National Security Council chaired by Xi himself and his apparent wresting of the reins of economic and social reform from Premier Li Keqiang, suggest that some other and deeper shift is underway
  • Stratfor believes this shift involves nothing less than an attempt to rework not only the way the Communist Party operates but also the foundations of its political legitimacy.
  • China is in the midst of an economic transformation that is in many ways unprecedented. The core of this transformation is the shift from a growth model heavily reliant on low-cost, low value-added exports and state-led investment into construction to one grounded in a much greater dependence on high value-added industries, services and above all, domestic consumption.
  • China is not the first country to attempt this. Others, including the United States, achieved it long ago. But China has unique constraints: its size, its political system and imperatives, and its profound regional geographic and social and economic imbalances. These constraints are exacerbated by a final and perhaps greatest limit: time
  • China is attempting to make this transition, one which took smaller and more geographically, socially and politically cohesive countries many decades to achieve, in less than 20 years.
  • For the past six years, the Chinese government has kept the economy on life support in the form of massively expanded credit creation, government-directed investment into urban and transport infrastructure development and, most important, real estate construction. In the process, local governments, banks and businesses across China have amassed extraordinary levels of debt. Outstanding credit in China is now equivalent to 251 percent of the country's gross domestic product, up from 147 percent in 2008. Local governments alone owe more than $3 trillion. It is unknown -- deliberately so, most likely -- what portion of outstanding debts are nonperforming, but it is likely far higher than the official rate of 1 percent. 
  • Despite claims that China's investment drive was and is irresponsible -- and certainly there are myriad anecdotal cases of gross misallocation of capital -- it nonetheless fulfills the essential role of jumpstarting the country's effort to "rebalance" to a new, more urban and more consumption-based economic model.
  • This means that in the next few years, China faces inexorable and potentially very rapid decline in the two sectors that have underpinned economic growth and social and political stability for the past two or more decades: exports and construction.
  • And it does so in an environment of rapidly mounting local government and corporate debt, rising wages and input costs, rising cost of capital and falling return on investment (exacerbated by new environmental controls and efforts to combat corruption) and more.
  • Chinese household consumption is extraordinarily weak. In 2013, it was equivalent to only 34 percent of gross domestic product, compared to 69-70 percent in the United States, 61 percent in Japan, 57 percent in Germany and 52 percent in South Korea.
  • Whatever the Chinese government's stated reform goals, it is very difficult to see how economic rebalancing toward a consumption- and services-based economy succeeds within the decade. It is very difficult to see how exports recover. And it is very difficult, but slightly less so, to see how the government maintains stable growth through continued investment into housing and infrastructure construction, especially as the real estate market inevitably cools.
  • The pressures stemming from China's economy -- and emanating upward through Chinese society and politics -- will remain paramount over the next 5-10 years.
  • The above has described only a very small selection of the internal social and economic constraints facing China's government today. It completely neglects public anger over pollution, the myriad economic and industrial constraints posed by both pollution and pervasive low-level corruption, the impact of changes in Chinese labor flows and dynamics, rising education levels and much more. It completely neglects the ambivalence with which many ordinary Chinese regard the Communist Party government.
  • It also neglects external pressures and risks, whether economic or military.
  • Xi knows this. He and his advisers know China's virtually insurmountable challenges better than anyone.
  • The anti-corruption campaign is one of those steps. It serves many overlapping functions: to clear out potential opponents, ideological or otherwise
  • Underlying and encompassing these, we see the specter of something else. The consensus-based model of politics that Deng built in order to regularize decision-making and bolster political stability during times of high growth and that effectively guided China throughout the post-Deng era is breaking down.
  • anonymous on 05 Aug 14
     
    "Chinese President Xi Jinping's anti-corruption campaign is the broadest and deepest effort to purge, reorganize and rectify the Communist Party leadership since the death of Mao Zedong in 1976 and the rise of Deng Xiaoping two years later. It has already probed more than 182,000 officials across numerous regions and at all levels of government. It has ensnared low-level cadres, mid-level functionaries and chiefs of major state-owned enterprises and ministries. It has deposed top military officials and even a former member of the hitherto immune Politburo Standing Committee, China's highest governing body. More than a year after its formal commencement and more than two years since its unofficial start with the downfall of Chongqing Party Secretary Bo Xilai, the campaign shows no sign of relenting."
anonymous

America the Anxious - 3 views

opinionator.blogs.nytimes.com/...america-the-anxious

shared by anonymous on 25 Sep 12 - Cached
  • The American approach to happiness can spur a debilitating anxiety. The initial sense of promise and hope is seductive, but it soon gives way to a nagging slow-burn feeling of inadequacy. Am I happy? Happy enough? As happy as everyone else? Could I be doing more about it? Even basic contentment feels like failure when pitched against capital-H Happiness. The goal is so elusive and hard to define, it’s impossible to pinpoint when it’s even been achieved — a recipe for neurosis.
  • Evidence of this distinction is everywhere. Blindfold me and read out the Facebook statuses of my friends, without their names, and I will tell you which are American and which are British.
  • Happiness should be serendipitous, a by-product of a life well lived, and pursuing it in a vacuum doesn’t really work. This is borne out by a series of slightly depressing statistics. The most likely customer of a self-help book is a person who has bought another self-help book in the last 18 months. The General Social Survey, a prominent data-based barometer of American society, shows little change in happiness levels since 1972, when such records began. Every year, with remarkable consistency, around 33 percent of Americans report that they are “very happy.”
  • anonymous on 25 Sep 12
     
    "Happiness in America has become the overachiever's ultimate trophy. A vicious trump card, it outranks professional achievement and social success, family, friendship and even love. Its invocation can deftly minimize others' achievements ("Well, I suppose she has the perfect job and a gorgeous husband, but is she really happy?") and take the shine off our own."
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  • Erik Hanson on 25 Sep 12
     
    It's almost like we're going to need to start actually paying attention to philosophy and religion soon or something. Siddhartha threw down some pretty solid answers to those questions.
  • anonymous on 25 Sep 12
     
    Probably stuff like "If you have to work for it, you're doing it wrong," but I'm just guessing. I bet Buddhists can be more flowery about it. :)
  • Erik Hanson on 25 Sep 12
     
    Sounds more Taoist, but that may be my personal (limited) understanding. The Dao generally speaks more directly about praxis than the Buddha has.
anonymous

Ayn Rand is for children - 1 views

www.salon.com/...ayn_rand_is_for_children

shared by anonymous on 20 Jan 13 - Cached
Erik Hanson liked it
  • Since I first met Objectivists (read: libertarians) in college, my Unified Theory of Rand Groupies posited that they all probably fit into at least one of three groups: those who 1) never grew out of the usual “the world is persecuting me and doesn’t see my true genius” phase that momentarily afflicts the typical high schooler 2) think saying “Ayn Rand” in any context makes them sound intelligent, even though they’ve never actually read her work or 3) have read Rand’s work, don’t genuinely believe in her ideology as evidenced by their lifestyle/politics, but still say they love her because it serves to make them feel good about their own avarice.
  • Typically, they are more than happy to (among other things) drive on taxpayer funded roads; to have their assets defended by government agents (aka police and firefighters); to have their property rights protected by a law enforcement collective known as the judiciary; and to pocket their share of handouts. Some alleged Randian individualists are even willing to decry the social safety net for others but not for themselves, and still others are happy to to vote in Congress for the epitome of what Randianism stands against.
  • Nonetheless, after my three-week voyage to the poorest province in China in 2009 (which you can read about here), I can say with confidence that if you have been to the non-Tom-Friedman developing world – aka the actual developing world – you don’t need Saunders’ MacArthur Genius-worthy intellect to arrive at his very same conclusion.
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  • Simply put, once you actually see laissez faire capitalism and greed-is-good extremism at work, it doesn’t look as nice as it sounds in Rand’s works. On the contrary, as Saunders implies, it makes “Fountainhead Shrugged” look less like serious treatise than bad young adult fiction, with all the corresponding misguided parables and oversimplified conclusions.
  • To be a Rand groupie is to flaunt your immaturity, your ignorance, your desperation to justify greed or your lack of international travel. It is, in other words, to admit your blindness to how so much of the world already lives, and to ignore what America would look like if “Fountainhead Shrugged” was seen as a public policy manual rather than what it really is: a dangerous farce.
  • anonymous on 20 Jan 13
     
    "With this week's news that Glenn Beck and others are preparing to build libertarian communes and "Going Galt," I figure now is the time to finally refine my theory about those who claim to be Ayn Rand acolytes or who brag that their favorite book is "Fountainhead Shrugged" (they are the same book written twice in order to double Rand's profit, so for brevity, let's just use one name)."
anonymous

StratFor Annual Forecast 2013 - 0 views

www.stratfor.com/...annual-forecast-2013

shared by anonymous on 18 Jan 13 - Cached
  • Generational shifts take time to play out and often begin with a period of denial as the forces of the international system struggle to preserve the old order. In 2013, that state of denial will persist in many areas. But we are more than four years into this cyclical transformation, and change is becoming more palpable and much harder to deny with every passing month.
  • In Europe, short-term remedies that are so far preserving the integrity of the European Union are also papering over the deep, structural ailments of the bloc.
  • China is not so much in denial of its current predicament as it is constrained in its ability to cope with a dramatic shift from high export-oriented growth to more sustainable development of its interior.
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  • The emerging economies of the post-China world will take time to develop, but 2013 will be an important year in determining which are best positioned to fill the growing void left by China.
  • Change will be primarily violent in nature -- and thus harder to miss -- in the Middle East.
  • The United States is also not immune to change. In this generational shift, and all the tumult that comes with it, Washington will be forced to learn the value of restraint in balance-of-power politics, preferring to lean on regional partners and encourage strategic competition as a way of preserving its own power.
  • The Arab world is moving uncomfortably between two eras. The post-World War II era, in which Arab dictatorships and monarchies supplanted colonial rule, is now roughly blending with -- or in some cases outright colliding with -- a fractured landscape of long-repressed Islamist forces.
  • This dynamic will be particularly visible in the northern Levant region this year as Syria and Lebanon continue coming apart. From Stratfor's perspective, the regime in Syria has already fallen and is giving way to a familiar state of warlordism, where militias and clan interests reign supreme. There is no longer a political entity capable of wielding control over the entirety of Syrian territory, nor will there be for some time.
  • once Syrian President Bashar al Assad is removed from power, whether through a negotiated deal or by force, the Sunni forces will fragment along ideological, ethnic and geographic lines, with Salafist-jihadist forces battling against a more politically minded Muslim Brotherhood and secular Sunnis.
  • As their grip over Aleppo slips, Alawite forces will try to hold Damascus while preparing a mass retreat to their coastal enclave. The battle for Damascus could extend beyond the scope of this forecast.
  • The potential use of chemical weapons by Alawite forces in a state of desperation could accelerate the unraveling of the region; a U.S.-led coalition would have to assemble in haste to contain the chemical weapons threat.
  • To be clear, the United States is not looking for a pretext to intervene militarily in Syria. On the contrary, the United States will make every effort possible to avoid another military campaign in the Islamic world this year.
  • A military conflict between the United States and Iran remains unlikely in 2013.
  • The growing disparity in the U.S. and Iranian negotiating positions will largely relegate Iran to the role of regional spoiler. So long as Iran can create pain for its regional adversaries, it can slow its own descent.
  • Iraq remains Iran's primary regional imperative, however. The momentum building among Sunni forces in Syria will eventually spill into Iraq and challenge Shiite dominance.
  • Iran's presidential elections in June will reveal the declining relevancy of the clerical elite and the populist faction embodied by outgoing President Mahmoud Ahmadinejad. This creates a political void for the Revolutionary Guard to fill. The Supreme Leader Ayatollah Ali Khamenei will try to check the Corps' growing influence by bolstering rival military and security agencies and backing a less controversial and more politically malleable ally from the pragmatic conservative camp for the presidency.
  • In Egypt, the military will adapt to an emerging Islamist political order. The military will remain the ultimate arbiter of the state and will rely on a number of factors -- including a fragmented judiciary, the military's economic leverage, a divided Islamist political landscape and the military's foreign relationships -- to check the Muslim Brotherhood.
  • Egypt's consuming political transition will leave opportunities for flare-ups in the Sinai Peninsula and in Gaza, but we do not expect a significant breach between Israel and Egypt this year.
  • Jordan, the oft-overlooked casualty of the Arab Spring, will continue to destabilize quietly and slowly in 2013
  • Israel and Turkey are both greatly affected by the shifting political dynamics of the Arab world, but both have little means to influence the change. The two former allies will continue exploring ways to restore a quiet working relationship under these new regional stresses, but a public restoration of diplomatic ties is less likely.
  • Israel will struggle internally over how to adapt to a new regional framework in which the reliability of old working partners is called into question.
  • Turkey sees an opportunity in the rise of Islamist forces in the Arab world but Ankara's limited influences restrain its actions beyond Turkish borders.
  • A more aggressive Saudi role in Syria will aggravate the civil war and create competition with other regional stakeholders, including Turkey, Qatar and Jordan.
  • In 2012, the European Union took numerous steps to mitigate the financial impact of its ongoing crisis.
  •  These actions, which helped to keep the eurozone afloat in 2012, will remain effective in 2013, making it very likely that the eurozone will survive another year. But these tools do not solve three fundamental aspects of the European crisis. 
  • First, the European crisis is fundamentally a crisis of competitiveness.
  • Second, the crisis has a political aspect. The European Union is not a federation but a collection of nation-states bound together by international treaties.
  • Third, the European crisis is threatening the social stability in some countries, especially in the eurozone's periphery.
  • In 2013, the two largest economies of the eurozone (Germany and France) will face low growth or even stagnation. This will have negative effects across Europe.
  • In 2013, the crisis will keep damaging economic conditions in the eurozone periphery. Greece, Spain, Portugal and Italy will see their economies shrink and unemployment rates rise. In all these countries, the social unrest will grow and the year will be marked by permanent protests and strikes. 
  • The conspicuous divide between the ruling elite and the populations of the periphery will be a key element in 2013, and some governments could fall. But even if opposition parties take power, they will face the same constraints as the governments that preceded them. In other words, a change in politicians will not bring a substantial change in policies regarding the European Union.
  • The only country in the eurozone periphery that has scheduled elections is Italy (in February). If the next Italian government fails to achieve political stability and apply economic reforms, the increased market pressure on Italy will make Rome more likely to require financial assistance from Brussels.
  • Because of the fundamental contradictions in the national interests and foreign policy strategies of the EU member states, the European crisis will continue generating political and economic divisions in the Continent in 2013.
  • Outside the eurozone, the United Kingdom will seek to protect its sovereignty and renegotiate its status within the European Union. But London will not leave the European Union in 2013.
  • Domestic Issues After the political tumult of 2012, Russia will face another year of anti-Kremlin protests, tensions among various political factions and ethnic groups, crackdowns and government reshuffles. Overall, the political tensions will remain manageable and will not pose a serious challenge to Moscow's control.
  • Russia has made significant progress recently in re-establishing influence in its former Soviet periphery.
  • Russia's relationship with Ukraine could be its most important connection in the former Soviet Union in 2013. Russia has been pursuing integration with Ukraine, primarily by taking over its natural gas transit infrastructure and calling on Kiev to join the Customs Union.
  • Georgia will be Russia's main concern in the Caucasus in 2013. With the political emergence of billionaire tycoon Bidzina Ivanishvili and his Georgian Dream movement, Russia's position in the country strengthened at the expense of the anti-Russian camp of Georgian President Mikhail Saakashvili.
  • In the past year, Russia has changed its tactics toward Europe to preserve its presence and leverage for the future. Russia's primary link to Europe is the Europeans' dependence on Russia's large energy supplies, which Moscow knows will be threatened when more non-Russian supplies become available.
  • In 2012, Russia began shifting away from its aggressive stance on energy -- particularly its high prices -- to strike long-term deals that will maintain Russia's market share with its primary strategic customers, such as Germany, Italy and Turkey. Russia will continue this strategy in 2013 as it continues to build new infrastructure to directly link its supplies to Europe.
  • The United States and Russia will continue sparring over trade matters, negotiations for a new nuclear arms treaty and Russia's role in Iran and Syria. Stratfor does not expect major changes from Washington or Moscow that would break the gridlock in negotiations on these issues.
  • The low-level violence and instability that occurred throughout Central Asia in 2012 will continue in 2013.
  • Three things will shape events in East Asia in 2013: Beijing's struggle to maintain social and political stability amid lower economic growth rates; China's accelerating military modernization and increasingly aggressive moves to secure its territorial and economic interests in the region; and varied efforts by other regional players, including the United States, to adapt to China's changes. 
  • In 2013, the Chinese economy will continue the gradual, painful process of moving away from high export-driven growth and toward a model that is more sustainable in the long run.
  • But barring another global financial meltdown on the scale of 2008-2009, China's coastal manufacturing economy will not collapse outright. The decline will be gradual.
  • The ongoing, gradual eclipse of coastal China as a hub of global manufacturing over the next several years will lead to higher unemployment and social dislocation as more of China's 250 million-strong migrant labor force returns inland in search of work. 
  • Shadow banking is by no means new in China. But it has grown significantly in the past few years from the geographically isolated informal loan markets of coastal cities to a complex network of semi-legal entities that provides between 12 and 30 trillion yuan (between $1.9 trillion and $4.8 trillion) in credit -- at interest rates of 20-36 percent -- to thousands of struggling small businesses nationwide.
  • The Party's growing sense of insecurity -- both internally and with regard to the social consequences of China's economic transition -- likely will be reflected in continued censorship of online social platforms like Weibo, crackdowns on religious or other groups perceived as threatening, and the Chinese military's growing assertiveness over China's interests in the South and East China seas and Southeast Asia.
  • The decline of low-end coastal manufacturing in China will present enormous opportunities for Southeast Asian countries like Indonesia, Vietnam, the Philippines and potentially Myanmar -- all of whom will continue to push strongly for foreign investment not only into natural resources and raw materials industries but also into developing better urban, transport, power generation and materials processing infrastructure.
  • Meanwhile, Vietnam and the Philippines -- China's most vocal opponents in Southeast Asia -- will continue to push for greater integration among members of the Association of Southeast Asian Nations and for U.S. business and military engagement in the region.
  • The Coming U.S. Withdrawal from Afghanistan Ahead of the 2014 drawdown of U.S. troops from Afghanistan, efforts will intensify to negotiate a settlement that gives the Taliban a place in a new government.
  • The negotiations will face numerous obstacles this year. There will be an upsurge in violence -- both in terms of officially sanctioned attacks designed to gain advantage on the negotiating table and spoiler attacks by Taliban elements allied with al Qaeda on both sides of the Afghan-Pakistani border.
  • Washington's intention to reduce its presence in the region will spur regional actors to fill the void. Pakistan will increase its interactions with Russia, Central Asia and Iran to prepare for a post-U.S. Afghanistan.
  • India will also turn its attention eastward, where the United States is quietly trying to forge a coalition of regional partners to keep a check on China in the Indo-Pacific basin. Myanmar in particular will be an active battleground for influence this year.
  • Preparing for a Post-Chavez Venezuela After a year of successful campaigning for re-election, Venezuelan President Hugo Chavez is in questionable health. Although the ultimate outcome of December's medical treatment for the ailing leader is unpredictable, Chavez's decision to name Vice President Nicolas Maduro as a political successor at the end of 2012 indicates that there is significant concern for his ability to remain in power.
  • Although it remains possible that Chavez will stay in power through the year, for Maduro to capitalize on Chavez's recent political gains, elections may need to be called sooner rather than later, regardless of Chavez's immediate health status.
  • Throughout 2013, Colombia will continue the incremental process of negotiating an end to the conflict with the Revolutionary Armed Forces of Colombia, known by its Spanish acronym FARC.
  • This will be a year of significant transition for Mexico. Policy issues that were bottled up by intra-party competition in the waning years of the National Action Party's administration have begun coming to the fore and will dominate 2013. These include socio-political issues like education, tax and pension reform.
  • The most important issue facing Mexico in 2013 will be energy policy.
  • anonymous on 18 Jan 13
     
    "At the beginning of 2012, we argued that the international system is undergoing a generational transformation -- the kind that occurs every 20 years or so. The cycle we are now in started in 2008-2009, when global financial contagion exposed the underlying weaknesses of Europe and eventually cracked China's export-oriented economic model. The Middle East then began to deviate from its post-World War II paradigm with an attempted resurgence by Iran, the regional rise of Islamists and the decline of age-old autocratic regimes in the Arab world."
anonymous

Libyan Report Card - 0 views

www.stratfor.com/...libyan-report-card

geopolitics libya

shared by anonymous on 03 Apr 13 - Cached
  • The authorities in the capital of Tripoli openly acknowledge the fact that they do not monopolize the use of force and have wisely opted for compromise and arbitration in eastern Libya (the Benghazi region) and in the far-flung Sahara to the south.
  • Libya's fundamental problem is that rather than comprising a compact cluster of demography like the Nile Valley, it is but a vague geographical expression -- a monumentally vast desert and coastal region between historic Egypt and Greater Carthage (Tunisia).
  • Because Morocco, Tunisia and Egypt are geographically associated with specific knots of civilization going back to antiquity, they did not require suffocating forms of tyranny to hold them together like Libya, and to a lesser extent like Algeria, which for decades during the height of the Cold War had a radical socialist regime. For Libya, Moammar Gadhafi's regime was, in fact, anarchy masquerading as tyranny.
  • ...17 more annotations...
  • Therefore, it should surprise no one that the toppling of Gadhafi brought about the veritable collapse of the state. Libyan authorities do not govern so much as negotiate the terms of geographic control.
  • Modern states have borders; weak and failed states have frontiers.
  • The stability of regimes in places like Mauritania and Niger are somewhat more in doubt than before Gadhafi's collapse. Libya, for that matter, is now an ungovernable space in significant parts of the country where al Qaeda can very possibly find refuge. The killing of the American ambassador in Benghazi was indicative of the terrors that a chaotic, post-Gadhafi Libya can offer up.
  • It would seem from this accounting that the Obama administration's decision to militarily intervene in Libya (along with its NATO allies) was a blunder of the first magnitude.
  • A post-Gadhafi world now clearly presents the CIA with greater security challenges than it had before.
  • But the political reckoning for the Obama administration is not that simple.
  • Those reportedly in the forefront of arguing for intervention on such grounds were then-U.S. Secretary of State Hillary Clinton, U.S. Ambassador to the United Nations Susan Rice and National Security official Samantha Power.
  • The three women had good arguments: Were Gadhafi to have massacred large numbers of civilians with U. S. warships hovering just offshore, it would have been a demonstration of American fecklessness comparable to that of European (and particularly Dutch) fecklessness when Serb troops massacred large numbers of civilians in 1995 in Srebrenica under the thumb of U.N. peacekeepers.
  • The loss of prestige the United States might have suffered throughout the Arab world as a result could have been substantial.
  • More to the point, because we still do not know all the intelligence the administration had available at the time regarding Gadhafi's intentions in Benghazi, to condemn administration officials outright is too easy a judgment at this date.
  • But there is a conundrum here that those who favored intervention -- in Libya as well as elsewhere -- do not own up to. That is, short of deploying large numbers of ground troops, the ability of the U.S. government to rebuild weakened or collapsed states is severely limited.
  • Even the presence of more than 100,000 American ground troops was insufficient to make Iraq an adequately effective democracy, so how can one argue that a band of civilian experts, plus small numbers of special operations forces, could have accomplished more in Libya?
  • Gadhafi's regime had virtually eliminated civil society in a country that was barely a country -- and you say that the United States had it in its power to make it all whole, or partly whole, again?
  • Toppling an evil regime or stopping a war is a profoundly moral act.
  • But taking moral responsibility for what happens next in a country is the hard part.
  • because Washington tends to overestimate its own significance in terms of its ability to alter distant societies, the following pattern will continue to emerge: a terrible war resulting in calls for humanitarian intervention, an intervention in some cases, always followed by a blame game inside the Washington Beltway after the country has slipped back into tyranny or anarchy.
  • Meanwhile, here is a probability: Libya's relatively short history as a strong state is over. It will go on and on as a dangerous and weakly governed area between Tunisia and Egypt. Its considerable oil resources can internally generate revenue for armed groups and politicians both. Thus, Libya will become a metaphor for much of North Africa and the Sahara, places where frontiers are more common than borders. 
  • anonymous on 03 Apr 13
     
    "In the starkest terms, a state is defined by a bureaucratic hierarchy that monopolizes the use of force over a specific geography. Ideally, nobody need fear the authorities except those who break the law. And because the authorities monopolize violence, nobody need fear his fellow man. Of course, tyrannical states induce general fear among much of the population. And weak states have a difficult time monopolizing the use of force -- the reason they are weak in the first place. By these standards, many states in the world are weak. And Libya has gone from being a tyrannical state to being barely a state at all."
anonymous

Boston Bombing Suspects: Grassroots Militants from Chechnya - 0 views

www.stratfor.com/...-grassroots-militants-chechnya

geopolitics immigration reform

shared by anonymous on 19 Apr 13 - Cached
  • Just after 10 p.m. on April 18, the Tsarnaev brothers were identified after having robbed a convenience store in Cambridge, Mass., just three miles from Boston, hours earlier. A Massachusetts Institute of Technology police officer, who responded to the robbery, was shot and killed and found in his car by fellow responding officers. The two suspects later hijacked an SUV at gunpoint, releasing the driver unharmed. Authorities later caught up to the suspects, and a car chase ensued.
  • Just after midnight, the car chase ended with a gunfight in Watertown, Mass. The suspects reportedly threw explosive devices at police, though it is not yet confirmed what types of explosives allegedly were used. During the firefight, Tamerlan Tsarnaev was wounded, taken into custody and later reported dead. Dzhokar escaped by driving the stolen SUV through the police barricade and remains at large.
  • According to The New York Times, the two men are from Chechnya. Their family also reportedly lived briefly in Makhachkala, the capital of Dagestan, before moving to the United States in 2002.
  • ...6 more annotations...
  • Dzhokhar Tsarnaev's profile on VKontakte, a Russian social media website, said he attended school at the School No. 1 of Makhachkala, spoke English, Russian and Chechen and listed his worldview as Islam. A school administrator from the School No. 1 said the two suspects and their family had previously lived in Kyrgyzstan before moving to Dagestan.
  • Given that they are grassroots actors, there is likely only a small chance that the authorities will discover a formal link between the suspects and a state sponsor or a professional terrorist group, such as al Qaeda or one of its franchise groups.
  • Moreover, given what we have learned about the suspects and the nature of the improvised explosive devices they constructed, it is very likely that the authorities will find that the brothers had read and studied al Qaeda in the Arabian Peninsula's Inspire Magazine.
  • This case also highlights our analysis that the jihadist threat now predominantly stems from grassroots operatives who live in the West rrather than teams of highly trained operatives sent to the United States from overseas, like the team that executed the 9/11 attacks.
  • This demonstrates how the jihadist threat has diminished in recent years -- a trend we expect to continue.
  • There will always be plenty of soft targets in a free society, and it is incredibly easy to kill people, even by untrained operatives. In this case the brothers conducted an attack that was within their capabilities rather than attempting something more grandiose that would require outside assistance - and which could therefore have put them in jeopardy of running into a government informant as they sought help.  It is thus important for citizens to practice good situational awareness and to serve as grassroots defenders against the grassroots threat.
  • anonymous on 19 Apr 13
     
    "The identity of the suspects in the Boston Marathon bombing -- Chechen brothers Dzhokhar Tsarnaev, 19, and Tamerlan Tsarnaev, 26 -- confirms several of our suspicions. From this profile, the simple nature of the attack, their efforts to rob a convenience store and their lack of an escape plan, we can conclude that they were what we refer to as grassroots militants. Despite being amateurs, such militants clearly still pose a significant threat."
anonymous

The Geopolitics of the Yangtze River: Developing the Interior - 0 views

www.stratfor.com/...gtze-river-developing-interior

yangtze geopolitics river developing interior

shared by anonymous on 01 Apr 13 - Cached
  • As the competitive advantage of low-cost, export-oriented manufacturing in China's coastal industrial hubs wanes, Beijing will rely more heavily on the cities along the western and central stretches of the Yangtze River to drive the development of a supplemental industrial base throughout the country's interior.
  • Managing the migration of industrial activity from the coast to the interior -- and the social, political and economic strains that migration will create -- is a necessary precondition for the Communist Party's long-term goal of rebalancing toward a more stable and sustainable growth model based on higher domestic consumption. In other words, it is critical to ensuring long-term regime security.
  • China is in many ways as geographically, culturally, ethnically and economically diverse as Europe. That regional diversity, which breeds inequality and in turn competition, makes unified China an inherently fragile entity. It must constantly balance between the interests of the center and those of regions with distinct and often contradictory economic and political interests.
  • ...32 more annotations...
  • the central government has targeted the Yangtze River economic corridor -- the urban industrial zones lining the Yangtze River from Chongqing to Shanghai -- as a key area for investment, development and urbanization in the coming years. Ultimately, the Party hopes to transform the Yangtze's main 2,800-kilometer-long (1,700-mile-long) navigable channel into a central superhighway for goods and people, better connecting China's less developed interior provinces to the coast and to each other by way of water -- a significantly cheaper form of transport than road or railway.
  • The Yangtze River is the key geographic, ecological, cultural and economic feature of China.
  • Stretching 6,418 kilometers from its source in the Tibetan Plateau to its terminus in the East China Sea, the river both divides and connects the country. To its north lie the wheat fields and coal mines of the North China Plain and Loess Plateau, unified China's traditional political cores. Along its banks and to the south are the riverine wetlands and terraced mountain faces that historically supplied China with rice, tea, cotton and timber.
  • The river passes through the highlands of the Yunnan-Guizhou Plateau, the fertile Sichuan Basin, the lakes and marshes of the Middle Yangtze and on to the trade hubs of the Yangtze River Delta. Its watershed touches 19 provinces and is central to the economic life of more people than the populations of Russia and the United States combined.
  • The river's dozens of tributaries reach from Xian, in the southern Shaanxi province, to northern Guangdong -- a complex of capillaries without which China likely would never have coalesced into a single political entity.
  • The Yangtze, even more than the Yellow River, dictates the internal constraints on and strategic imperatives of China's rulers.
  • The Yellow River may be the origin of the Han Chinese civilization, but on its own it is far too weak to support the economic life of a great power.
  • The Yellow River is China's Hudson or Delaware. By contrast, the Yangtze is China's Mississippi -- the river that enabled China to become an empire.
  • Just as the Mississippi splits the United States into east and west, the Yangtze divides China into its two most basic geopolitical units: north and south.
  • This division, more than any other, forms the basis of Chinese political history and provides China's rulers with their most fundamental strategic imperative: unity of the lands above and below the river. Without both north and south, there is no China, only regional powers.
  • The constant cycle between periods of unity (when one power takes the lands north and south of the Yangtze) and disunity (when that power breaks into its constituent regional parts) constitutes Chinese political history.
  • If the Yangtze did not exist, or if its route had veered downward into South and Southeast Asia (like most of the rivers that begin on the Tibetan Plateau), China would be an altogether different and much less significant place.
  • The provinces of central China, which today produce more rice than all of India, would be as barren as Central Asia. Regional commercial and political power bases like the Yangtze River Delta or the Sichuan Basin would never have emerged. The entire flow of Chinese history would be different.
  • Three regions in particular make up the bulk of the Yangtze River Basin
  • the Upper (encompassing present-day Sichuan and Chongqing), Middle (Hubei, Hunan and Jiangxi) and Lower Yangtze (Jiangsu and Zhejiang provinces, as well as Shanghai and parts of Anhui).
  • Geography and time have made these regions into distinct and relatively autonomous units, each with its own history, culture and language. Each region has its own hubs -- Chengdu and Chongqing for the Upper Yangtze; Wuhan, Changsha and Nanchang for the Middle Yangtze; and Suzhou, Hangzhou and Shanghai for the Lower Yangtze.
  • In many ways, China was more deeply united under Mao Zedong than under any emperor since Kangxi in the 18th century. After 1978, the foundations of internal cohesion began to shift and crack as the reform and opening process directed central government attention and investment away from the interior (Mao's power base) and toward the coast.
  • Today, faced with the political and social consequences of that process, the Party is once again working to reintegrate and recentralize -- both in the sense of slowly reconsolidating central government control over key sectors of the economy and, more fundamentally, forcibly shifting the economy's productive core inland.
  • Today, the Yangtze River is by far the world's busiest inland waterway for freight transport.
  • In 2011, more than 1.6 billion metric tons of goods passed through it, representing 40 percent of the nation's total inland waterborne cargo traffic and about 5 percent of all domestic goods transport that year
  • By 2011, the nine provincial capitals that sit along the Yangtze and its major tributaries had a combined gross domestic product of $1 trillion, up from $155 billion in 2001. That gives these cities a total wealth roughly comparable to the gross domestic products of South Korea and Mexico.
  • Investment in further industrial development along the Yangtze River reflects not only an organic transformation in the structure of the Chinese economy but also the intersection of complex political forces
  • First, there is a clear shift in central government policy away from intensive focus on coastal manufacturing at the expense of the interior (the dominant approach throughout the 1990s and early 2000s) and toward better integrating China's diverse regions into a coherent national economy.
  • Thirty years of export-oriented manufacturing centered in a handful of coastal cities generated huge wealth and created hundreds of millions of jobs. But it also created an economy characterized by deep discrepancies in the geographic allocation of resources and by very little internal cohesion.
  • By 2001, the economies of Shanghai and Shenzhen, for instance, were in many ways more connected to those of Tokyo, Seoul and Los Angeles than of the hinterlands of Sichuan and Shaanxi provinces.
  • The foundation of this model was an unending supply of cheap labor. In the 1980s, such workers came primarily from the coast. In the 1990s, when coastal labor pools had been largely exhausted, factories welcomed the influx of migrants from the interior. Soon, labor came to replace coal, iron ore and other raw materials as the interior's most important export to coastal industrial hubs. By the mid-2000s, between 250 million and 300 million migrant workers had fled from provinces like Henan, Anhui and Sichuan (where most people still lived on near-subsistence farming) in search of work in coastal cities.
  • This continual supply of cheap labor from the interior kept Chinese manufacturing cost-competitive throughout the 2000s -- far longer than if Chinese factories had only had the existing coastal labor pool to rely on.
  • But in doing so, it kept wages artificially low and, in turn, systematically undermined the development of a domestic consumer base. This was compounded by the fact that very little of the wealth generated by coastal manufacturing went to the workers.
  • Instead, it went to the state in the form of savings deposits into state-owned banks, revenue from taxes and land sales, or profits for the state-owned and state-affiliated enterprises
  • This dual process -- accumulation of wealth by the state and systematic wage repression in low-end coastal manufacturing -- significantly hampered the development of China's domestic consumer base. But even more troubling was the effect of labor migration, coupled with the relative lack of central government attention to enhancing inland industry throughout the 1990s and early 2000s, on the economies of interior provinces.
  • In trying to urbanize and industrialize the interior, Beijing is going against the grain of Chinese history -- a multimillennia saga of failed attempts to overcome the radical constraints of geography, population, food supply and culture through ambitious central government development programs.
  • Though its efforts thus far have yielded notable successes, such as rapid expansion of the country's railway system and soaring economic growth rates among inland provinces, they have not yet addressed a number of pivotal questions. Before it can move forward, Beijing must address the reform of the hukou (or household registration) system and the continued reliance on centrally allocated investment, as opposed to consumption, as a driver of growth.
  • anonymous on 01 Apr 13
     
    "This is the first piece in a three-part series on the geopolitical implications of China's move to transform the Yangtze River into a major internal economic corridor."
anonymous

Sovereignty, Supranationality and the Future of EU Integration - 0 views

www.stratfor.com/...lity-and-future-eu-integration

shared by anonymous on 02 Jul 13 - Cached
  • The European Union is an entity like no other in world history. After the end of World War II, the international system was configured around a series of multilateral organizations such as the United Nations, the International Monetary Fund and NATO. But the process of economic and political cooperation that West Germany, France, Italy, the Netherlands, Belgium and Luxembourg began in 1951 is fundamentally different from the rest of the post-war organizations.
  • The project was a direct challenge to the classical idea of ​​the nation-state and generated new forms of government and administration hitherto unknown.
  • Immanuel Kant believed that Europe would only overcome its constant state of war by achieving some form of political unity.
  • ...27 more annotations...
  • From the Roman Empire to Nazi Germany, all the attempts to unify Europe meant war and conquest. It took World War II to convince the Europeans that the future of the Continent depended on overcoming age-old antagonisms and building a lasting political settlement to boost trade and prevent another war.
  • The central problem to be solved was the historical emnity between France and Germany
  • The French government understood that the only way to achieve lasting and sustainable economic growth in France was by ensuring a stable peace with Germany.
  • The European Economic Community, the institutional heart of the emerging continental unity, had three main objectives.
  • Its immediate goal was to create a customs union, which would eliminate trade restrictions between member states and establish a common external tariff for trade with the rest of the world.
  • It would also seek the consolidation of a common market, to allow the free movement of people, goods, capital and services.
  • Finally, it would seek the progressive coordination of social and fiscal policies among its members.
  • The rationale behind the European Communities was that if countries gave up sovereignty in specific areas, over time a greater amount of national prerogatives would be transferred to the supranational institutions.
  • Throughout the process, unanimity would be replaced by majority voting (so that the interest of the majority would overtake individual interests) and concessions of sovereignty would not be limited to economic issues, but also political and military affairs.
  • In other words, the process of European integration would progressively weaken the nation-state and its strategic interests.
  • Six decades later, many of these goals have been achieved.
  • The Commission, the Parliament and the Court of Justice today have powers that notably exceed those designed in the 1950s. More impressively, the European Union currently has 28 members, 17 of whom share the same currency. In 1945, with Europe in ashes and occupied by foreign powers, it was unimaginable to think that six decades later France and Germany would share the leadership of a continental alliance stretching from Portugal to Finland and Cyprus.
  • However, the remarkable growth of the European project did not bring about the abolishment of the nation-state that many analysts predicted.
  • EU institutions tend to generate their own agendas, which often go against the national strategies of some member states. As a result, the clash between national and supranational interests is often unavoidable.
  • This friction did not begin with the current economic crisis. In 1965, the French government withdrew its representation in the European Commission in protest of a plan that would give more power to Brussels in the management of the Common Agricultural Policy. To resolve the crisis, the Europeans reached an agreement under which a de facto veto power was given to member states on issues that were considered crucial to national interests. This agreement (commonly known as the Luxembourg Compromise) was designed to protect the intergovernmental nature of the European Communities and virtually froze the process of supranational integration in the 1970s and 1980s, until the Single European Act in 1986 introduced new mechanisms for qualified majority voting.
    • anonymous
      anonymous on 02 Jul 13
       
      This paragraph is a good example of something I would never have known about otherwise. I wish I had been shown (much earlie) how history is shaped by the continuity and discontinuity of policies. Among, you know, an infinite soup of other variables. :)
  • On top of the traditional tensions between national governments and supranational institutions, in times of crisis member states also tend to distrust each other.
  • The creation of the euro has further complicated things. Seventeen countries with very different levels of economic development and competitiveness now share a common currency. This has particularly reduced Mediterranean Europe's room to maneuver, because it has deprived those countries of the possibility of applying independent monetary policy to tackle crises.
  • Governments must find a balance between their foreign policy objectives, pressure from the European Union and their desire to be re-elected -- which means decisions that may make sense for the future of the European Union (such as fiscal consolidation efforts) would probably not be made if governments consider them too unpopular among voters.
  • Other institutions, such as constitutional courts, often threaten to block decisions accepted by national parliaments. The recent investigation by the German constitutional court on the validity of the European Stability Mechanism and the decision by the Portuguese constitutional court to block some austerity measures promoted by Brussels and implemented by Lisbon are examples of this situation.
  • The deep unemployment crisis in the eurozone adds yet another complication to this problem. The European elites are still largely pro-European, and most of the voters in the eurozone want to keep the euro. But with the European Union's promise of economic prosperity weakening, its members have begun to rethink their strategies. Fidelity for the European project is not unbreakable. Nor is it strong enough to support an indefinite period of extremely high unemployment.
  • Despite its remarkable evolution, the European Union is still a contract. And contracts could be modified or even canceled if they stop being beneficial for their signatories.
  • Non-eurozone countries in Central and Eastern Europe have also begun to think of a more independent foreign policy. They remain formally aligned with the European Union and NATO, but the pursuit of closer ties with Russia is no longer taboo. And for most of them, joining the eurozone is no longer a priority.
  • Because of the pervasiveness of the nation-state, the future of the European Union will not be in the hands of the EU institutions, but in those of the same actors of 1951: France and Germany. Since the beginning of the economic crisis, Paris and Berlin have reiterated their commitment to the European Union, but as the economic downturn moves to the core of Europe, the differences between them become more obvious.
  • Like most economies in Mediterranean Europe, France's has lost competitiveness since the creation of the euro, and the common currency has led to a constant trade deficit with Germany. France will seek to change its relationship with Germany without breaking it (as Paris is still interested in containing Berlin), but Paris is increasingly aware that the European project should be remodeled.
  • In this context, Paris and Berlin will need to find a balance between their desire to preserve their alliance and the need to protect their national interests.
  • The Germans are interested in preserving their alliance with France and protecting the currency union because it benefits its exports to its neighbors and out of fear of the immeasurable financial consequences of a breakup of the eurozone.
  • Europe's main challenge will be to prevent these frictions from paralyzing the bloc. The European Union will also face the test of mitigating the alienation of its eastern members and closing the gap between eurozone and non-eurozone countries. In the meantime, Brussels and national governments will have to find ways to alleviate the bloc's corrosive unemployment crisis before it leads to dangerous levels of social unrest. In all these challenges, the European Union is running a race against time.
  • anonymous on 02 Jul 13
     
    "Tensions between the European Commission and France have escalated in recent weeks. After Brussels suggested that Paris should apply structural reforms to reactivate the French economy, French President Francois Hollande said that the Commission cannot dictate policy to France. A few days later, the Commission's president, Jose Manuel Barroso, criticized the French pressure to exclude the audio-visual sector from the negotiations for a free trade agreement between the European Union and United States."
anonymous

Annual Forecast 2012 - 0 views

www.stratfor.com/...annual-forecast-2012

annual forecast stratfor

shared by anonymous on 25 Jan 12 - Cached
  • In this period, the European Union has stopped functioning as it did five years ago and has yet to see its new form defined. China has moved into a difficult social and economic phase, with the global recession severely affecting its export-oriented economy and its products increasingly uncompetitive due to inflation. The U.S. withdrawal from Iraq has created opportunities for an Iranian assertion of power that could change the balance of power in the region. The simultaneous shifts in Europe, China and the Middle East open the door to a new international framework replacing the one created in 1989-1991.
  • Our forecast for 2012 is framed by the idea that we are in the midst of what we might call a generational shift in the way the world works.
  • the driving force behind developments in Europe in 2012 will be political, not economic.
  • ...27 more annotations...
  • Normally, we would predict failure for such an effort: Sacrificing budgetary authority to an outside power would be the most dramatic sacrifice of state sovereignty yet in the European experiment -- a sacrifice that most European governments would strongly resist. However, the Germans have six key advantages in 2012.
  • First, there are very few scheduled electoral contests, so the general populace of most European states will not be consulted on the exercise.
  • Second, Germany only needs the approval of the 17 eurozone states -- rather than the 27 members of the full European Union -- to forward its plan with credibility.
  • Third, the process of approving a treaty such as this will take significant time, and some aspects of the reform process can be pushed back.
  • Fourth, the Germans are willing to apply significant pressure.
  • Fifth, the Europeans are scared, which makes them willing to do things they would not normally do -- such as implementing austerity and ratifying treaties they dislike.
  • The real political crisis will not come until the sacrifice of sovereignty moves from the realm of theory to application, but that will not occur in 2012.
  • The economic deferment of that pain is the sixth German advantage. Here, the primary player is the ECB. The financial crisis has two aspects: Over-indebted European governments are lurching toward defaults that would collapse the European system, and European banks (the largest purchasers of European government debt) are broadly insolvent -- their collapse would similarly break apart the European system.
  • In 2012, the Kremlin will face numerous challenges: social unrest, restructuring Russia's political makeup (both inside and outside of the Kremlin) and major economic shifts due to the crisis in Europe.
  • Russia will continue building its influence in its former Soviet periphery in 2012, particularly by institutionalizing its relationships with many former Soviet states. Russia will build upon its Customs Union with Belarus and Kazakhstan as it evolves into the Common Economic Space (CES).
  • This larger institution will allow the scope of Russia's influence over Minsk and Astana, as well as new member countries such as Kyrgyzstan and possibly Tajikistan, to expand from the economic sphere into politics and security as Moscow lays the groundwork for the eventual formation of the Eurasian Union, which it is hoping to start around 2015.
  • In the Baltic countries -- which, unlike other former Soviet states, are committed members of NATO and the European Union -- Russia's ultimate goal is to neutralize the countries' pro-Western and anti-Russian policies
  • Russia will continue managing various crises with the West -- mainly the United States and NATO -- while shaping its relationships in Europe.
  • Russia will attempt to push these crises with the United States to the brink without actually rupturing relations -- a difficult balance.
  • Numerous factors will undermine Central Asia's stability in 2012, but they will not lead to a major breaking point in the region this year.
  • Iran's efforts to expand its influence will be the primary issue for the Middle East in 2012.
  • In 2012, Saudi Arabia will lead efforts to shore up and consolidate the defenses of Gulf Cooperation Council members to try to ward off the threat posed by Iran, but such efforts will not be a sufficient replacement for the United States and the role it plays as a security guarantor.
  • Iran's goal is for Syria to maintain a regime -- regardless of who leads it -- that will remain favorable to Iranian interests, but Iran's ability to influence the situation is limited, and finding a replacement to hold the regime together will be difficult.
  • Despite its rhetoric, Turkey will not undertake significant overt military action in Syria unless the United States leads the intervention -- a scenario Stratfor regards as improbable -- though it will continue efforts to mold an opposition in Syria and counterbalance Iranian influence in Iraq.
  • Hamas will take advantage of the slowly growing political clout of Islamists throughout the region in hopes of presenting itself to neighboring Arab governments and the West as a pragmatic and reconcilable political alternative to Fatah.
  • Three things will shape events in East Asia: China's response to the economic crisis and possible social turmoil amid a leadership transition; the European Union's debt crisis and economic slowdown sapping demand for East Asia's exports; and regional interaction with the U.S. re-engagement in the Asia-Pacific region.
  • While Beijing knows that rolling out another massive fiscal stimulus and bank loans as it did in 2008-2009 is unsustainable and would put the economy at risk, it sees few other short-term options and thus will use government-led investment to sustain growth in 2012.
  • As it learned from the Tiananmen Square incident, CPC factional infighting exploited at a sensitive time is a serious risk, and we expect to see measures to ensure ideological and cultural control throughout the Party and down through the rest of society.
  • The United States will continue to consider a political accommodation with the Taliban, but such accommodation is unlikely to be reached this year.
  • The most important development in South Asia is Pakistan's ongoing political evolution.
  • Regardless of any change in party, Mexico's underlying challenges will remain. The country's drug war rages on, with Los Zetas having consolidated control over most of Mexico's eastern coastal transportation corridor and the Sinaloa cartel having done the same in the west.
  • Brazil will spend 2012 focused on mitigating shocks to trade and capital flows from the crisis in Europe. However, with only 10 percent of Brazil's gross domestic product dependent on exports, Brazil is much less vulnerable than many other developing countries.
  • anonymous on 25 Jan 12
     
    "There are periods when the international system undergoes radical shifts in a short time. The last such period was 1989-1991. During that time, the Soviet empire collapsed. The Japanese economic miracle ended. The Maastricht Treaty creating contemporary Europe was signed. Tiananmen Square defined China as a market economy dominated by an unchallenged Communist Party, and so on. Fundamental components of the international system shifted radically, changing the rules for the next 20 years. We are in a similar cycle, one that began in 2008 and is still playing out."
anonymous

I Had a Middle Class Job and I Still Ended Up on Food Stamps at 60 - 1 views

www.alternet.org/d-i-still-ended-food-stamps-60

shared by anonymous on 22 Jan 14 - No Cached
  • Both my parents were children of the Great Depression, both knew hunger -- the real, not-having-food-for-several-days kind of hunger. Both knew disappointment. My father had to turn down a scholarship to Notre Dame to work alongside his father, delivering coal to the wealthy. Neither of my parents ever caught a break. Every time an illness or disaster would set them back, they would work that much harder to make my life and those of my four siblings better. We didn't have much, hand-me-downs and second-hand everything. But unlike our parents, we never went hungry. After all, this is America, they would tell us, and your life is not dictated by the circumstances of your birth.
  • Looking back I could have survived the stroke or the recession, but not both. Last summer the bank began foreclosure on my home of 30 years, forcing me to file chapter 13 bankruptcy to save it. After 44 years of working full-time as a contributing middle-class citizen, I find myself embarrassed and ashamed that I now earn well below the poverty line and that I am close to losing everything.
  • The thing is, I did everything right. I worked hard all my life. I saved when I could. I educated myself. I didn't live above my means. I started my business with enough capital, had a viable business model and planned for the unexpected. But I never considered a one-two punch of a medical crisis followed by a global financial collapse.As a result of the stroke, I have changed. I am angry at myself for not taking better care of my health. I am angry that I am dizzy and my balance is now a conscience act. I am angry that the side of my face always buzzes. And I am tired of being angry.
  • anonymous on 22 Jan 14
     
    Humbling. "On December 23, 2013 two days before my 60th birthday, I swallowed a stomach full of pride and walked into the Department of Social Services to ask for help. It is something I never imagined I would do. I am ashamed to admit that I am one of those people who thought it would always be someone else, someone worse off who just didn't or couldn't work hard enough, who would need that type of assistance. I was wrong, because I am the new working poor."
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