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Global Economic Downturn: A Crisis of Political Economy - 0 views

www.stratfor.com/...nturn-crisis-political-economy geopolitics criticalthinking politics economics u.s. crisis
shared by anonymous on 15 Aug 11 - Cached
  • For classical economists, it was impossible to understand politics without economics or economics without politics.
  • The use of the term “economy” by itself did not begin until the late 19th century.
  • For classical economists, the political and economic systems were intertwined, each dependent on the other for its existence.
  • ...54 more annotations...
  • The current economic crisis is best understood as a crisis of political economy.
  • Moreover, it has to be understood as a global crisis enveloping the United States, Europe and China that has different details but one overriding theme: the relationship between the political order and economic life.
  • the origin of the current financial crisis was the subprime mortgage meltdown in the United States.
  • To be more precise, it originated in a financial system generating paper assets whose value depended on the price of housing.
  • From the standpoint of economics, this was essentially a financial crisis: who made or lost money and how much.
  • From the standpoint of political economy it raised a different question: the legitimacy of the financial elite.
  • Think of a national system as a series of subsystems — political, economic, military and so on.
  • Then think of the economic system as being divisible into subsystems — various corporate verticals with their own elites, with one of the verticals being the financial system.
  • A sense emerged that the financial elite was either stupid or dishonest or both.
  • Fair or not, this perception created a massive political crisis.
  • There was a crisis of confidence in the financial system and a crisis of confidence in the political system. The U.S. government’s actions in September 2008 were designed first to deal with the failures of the financial system. Many expected this would be followed by dealing with the failures of the financial elite, but this is perceived not to have happened.
  • This generated the second crisis — the crisis of the political elite.
  • The Tea Party movement emerged in part as critics of the political elite, focusing on the measures taken to stabilize the system and arguing that it had created a new financial crisis, this time in excessive sovereign debt.
  • Its argument was that the political elite used the financial crisis to dramatically increase the power of the state (health care reform was the poster child for this) while mismanaging the financial system through excessive sovereign debt.
  • The sovereign debt question also created both a financial crisis and then a political crisis in Europe.
  • What had been a minority view was strengthened by the recession.
  • The European crisis paralleled the American crisis in that financial institutions were bailed out. But the deeper crisis was that Europe did not act as a single unit to deal with all European banks
  • There are two narratives to the story.
  • One is the German version, which has become the common explanation. It holds that Greece wound up in a sovereign debt crisis because of the irresponsibility of the Greek government
  • The Greek narrative, which is less noted, was that the Germans rigged the European Union in their favor. Germany is the world’s third-largest exporter, after China and the United States (and closing rapidly on the No. 2 spot). By forming a free trade zone, the Germans created captive markets for their goods.
  • Moreover, the regulations generated by Brussels so enhanced the German position that Greece was helpless.
  • Which narrative is true is not the point.
  • The point is that Europe is facing two political crises generated by economics. One crisis is similar to the American one, which is the belief that Europe’s political elite protected the financial elite. The other is a distinctly European one, a regional crisis in which parts of Europe have come to distrust each other rather vocally. This could become an existential crisis for the European Union.
  • The American and European crises struck hard at China, which, as the world’s largest export economy, is a hostage to external demand, particularly from the United States and Europe.
  • The Chinese government had two responses.
  • The first was to keep factories going by encouraging price reductions to the point where profit margins on exports evaporated.
  • The second was to provide unprecedented amounts of credit to enterprises facing default on debts in order to keep them in business.
  • This led to a second crisis, where workers faced the contraction of already small incomes.
  • The response was to increase incomes, which in turn increased the cost of goods exported once again, making China’s wage rates less competitive, for example, than Mexico’s.
  • China had previously encouraged entrepreneurs. This was easy when Europe and the United States were booming. Now, the rational move by entrepreneurs was to go offshore or lay off workers, or both.
  • In the United States, the first impulse was to regulate the financial sector, stimulate the economy and increase control over sectors of the economy.
  • In Europe, where there were already substantial controls over the economy, the political elite started to parse how those controls would work and who would benefit more.
  • In China, where the political elite always retained implicit power over the economy, that power was increased.
  • In all three cases, the first impulse was to use political controls.
  • In the United States, the Tea Party was simply the most active and effective manifestation of that resistance.
  • In Europe, the resistance came from anti-Europeanists
  • It also came from political elites of countries like Ireland who were confronting the political elites of other countries.
  • In China, the resistance has come from those being hurt by inflation
  • Russia went through this crisis years ago and had already tilted toward the political elite’s control over the economy.
  • Brazil and India have not experienced the extremes of China, but then they haven’t had the extreme growth rates of China.
  • But when the United States, Europe and China go into a crisis of this sort, it can reasonably be said that the center of gravity of the world’s economy and most of its military power is in crisis. It is not a trivial moment.
  • Crisis does not mean collapse. The United States has substantial political legitimacy to draw on.
  • Europe has less but its constituent nations are strong.
  • China’s Communist Party is a formidable entity but it is no longer dealing with a financial crisis.
  • It is vital to understand that this is not an ideological challenge.
  • Left-wingers opposing globalization and right-wingers opposing immigration are engaged in the same process — challenging the legitimacy of the elites.
    • anonymous
      anonymous on 15 Aug 11
       
      This is why so much of American life seems like that proverbial puppet show. Politicians, at their basest, have a vested interest in portraying this as a problem between us-vs-them. It reflects heat.
  • The real problem is that, while the challenge to the elites goes on, the profound differences in the challengers make an alternative political elite difficult to imagine.
  • This, then, is the third crisis that can emerge: that the elites become delegitimized and all that there is to replace them is a deeply divided and hostile force, united in hostility to the elites but without any coherent ideology of its own.
  • In the United States this would lead to paralysis. In Europe it would lead to a devolution to the nation-state. In China it would lead to regional fragmentation and conflict.
  • These are all extreme outcomes and there are many arrestors.
  • But we cannot understand what is going on without understanding two things.
  • The first is that the political economic crisis, if not global, is at least widespread, and uprisings elsewhere have their own roots but are linked in some ways to this crisis.
  • The second is that the crisis is an economic problem that has triggered a political problem, which in turn is making the economic problem worse.
  • The followers of Adam Smith may believe in an autonomous economic sphere disengaged from politics, but Adam Smith was far more subtle. That’s why he called his greatest book the Wealth of Nations. It was about wealth, but it was also about nations. It was a work of political economy that teaches us a great deal about the moment we are in.
  • anonymous on 15 Aug 11
     
    Classical political economists like Adam Smith or David Ricardo never used the term "economy" by itself. They always used the term "political economy." For classical economists, it was impossible to understand politics without economics or economics without politics. The two fields are certainly different but they are also intimately linked.
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The Global Crisis of Legitimacy - 0 views

www.stratfor.com/...00503_global_crisis_legitimacy geopolitics
shared by anonymous on 04 May 10 - Cached
  • Political crises — as opposed to normal financial panics — emerge when the reckless appear to be the beneficiaries of the crisis they have caused, while the rest of society bears the burdens of their recklessness.
  • think of nations as consisting of three basic systems: political, economic and military. Each of these systems has elites that manage it. The three systems are constantly interacting — and in a healthy polity, balancing each other, compensating for failures in one as well as taking advantage of success. Every nation has a different configuration within and between these systems. The relative weight of each system differs, as does the importance of its elites. But each nation contains these systems, and no system exists without the other two.
    • anonymous
      anonymous on 04 May 10
       
      This is a useful observation. It'd be interesting to contrast other nations' manifestation of each.
  • The corporation is built around the idea of limited liability for investors, the notion that if you buy part or all of a company, you yourself are not liable for its debts or the harm that it might do; your risk is limited to your investment.
  • ...17 more annotations...
  • It is also a political invention and not an economic one. The decision to create corporations that limit liability flows from political decisions implemented through the legal subsystem of politics.
  • In a more natural organization of the marketplace, the owners are entirely responsible for the debts and liabilities of the entity they own. That, of course, would create excessive risk, suppressing economic activity.
  • contrary to the idea that there is a tension between the political and economic systems, the modern economic system is unthinkable except for the eccentric but indispensible political-legal contrivance of the limited liability corporation.
    • anonymous
      anonymous on 04 May 10
       
      Statements like these are a reason why the accusations about StratFor being a Neocon front don't stick very well. This passage could have been lifted from the most pinko-leftist propaganda. :)
  • this is why classical economists never spoke of “economics” but always of “political economy.”
    • anonymous
      anonymous on 04 May 10
       
      This cuts to the myth of some idyllic "free market" in some earlier time. There may have been simpler economic creations, but there has not *been* a time when the political didn't mingle with the economic. Randians take note.
  • Emerging out of this complexity — and justifying it — is a moral regime. Protection from liability comes with a burden: Poor decisions will be penalized by losses, while wise decisions are rewarded by greater wealth.
  • Systemic risk emerges when it appears that the political and legal protections given to economic actors, and particularly to members of the economic elite, have been used to subvert the intent of the system.
  • the crisis occurs when it appears that the financial elite used the politico-legal structure to enrich themselves through systematically imprudent behavior while those engaged in prudent behavior were harmed, with the political elite apparently taking no action to protect the victims.
  • We now have a political, not an economic, crisis for two reasons. First, the crisis qualitatively has moved beyond the boundaries of a cyclical event. Second, the crisis is rooted in the political-legal definitions of the distribution of corporate risk and the legally defined relations between management and shareholder.
  • problem lies not with the market but with the political system that invented and presides over the limited liability corporation.
    • anonymous
      anonymous on 04 May 10
       
      This is why the right-wing calls to stop persecuting the "wealth creators" are so hollow. On one level, they're right - those people aren't responsible. They're just gaming a system that's probably broken. This is why some kind of political alteration to corporations needs to occur.
  • The crisis was rooted in the appearance that it was triggered by the behavior not of small town banks or third world countries, but of the global financial elite
    • anonymous
      anonymous on 04 May 10
       
      "Appearance" is an operative word, too. No matter the cause, there's a perception problem that must be addressed.
  • The political elite is responsible for the corporate elite in a unique fashion: The corporation was a political invention, so by definition, its behavior depends on the political system.
  • part of this analysis is designed to explain why the Obama administration must go after Goldman Sachs, Lehman Brothers and others.
  • The goal is not so much to achieve something as to create the impression that it is achieving something, in other words, to demonstrate that the political system is prepared to control the entities it created.
    • anonymous
      anonymous on 04 May 10
       
      More of that "perception" stuff.
  • Europe thus has a double crisis. As in the United States, there is a crisis between the financial and political systems. This crisis is not as intense as in the United States because of a deeper tradition of integration between the two systems in Europe. But the tension between masses and elites is every bit as intense. The second part of the crisis is the crisis of the European Union and growing sense that the European Union is the problem and not the solution. As in the United States, there is a growing movement to distrust not only national arrangements but also multinational arrangements.
  • the important thing is to understand that both Europe and the United States are facing fundamental challenges to the legitimacy of, if not the regime, then at least the manner in which the regime has handled itself.
  • This is not simply a crisis within national elites, but within the multinational elite that created the European Union. If this leads to the de-legitimization of the EU, then we are really in uncharted territory.
  • The politically contrived corporation, and particularly the financial corporations, stands accused of undermining the wealth of nations. As Adam Smith understood, markets are not natural entities but the result of political decisions, as is the political system that creates the allocation of risk that allows markets to function.
    • anonymous
      anonymous on 04 May 10
       
      Politics is everything, it seems.
  • anonymous on 04 May 10
     
    By George Friedman (StratFor) on May 4, 2010.
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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.
  • ...56 more annotations...
  • 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."
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Why Americans Hate the Media - Magazine - The Atlantic - 0 views

www.theatlantic.com/...5060 media politics america
shared by anonymous on 14 Oct 10 - Cached
  • But while Jennings and his crew were traveling with a North Kosanese unit, to visit the site of an alleged atrocity by U.S. and South Kosanese troops, they unexpectedly crossed the trail of a small group of American and South Kosanese soldiers. With Jennings in their midst the Northern soldiers set up an ambush that would let them gun down the Americans and Southerners. What would Jennings do? Would he tell his cameramen to "Roll tape!" as the North Kosanese opened fire? What would go through his mind as he watched the North Kosanese prepare to fire? Jennings sat silent for about fifteen seconds. "Well, I guess I wouldn't," he finally said. "I am going to tell you now what I am feeling, rather than the hypothesis I drew for myself. If I were with a North Kosanese unit that came upon Americans, I think that I personally would do what I could to warn the Americans." Even if it meant losing the story? Ogletree asked. Even though it would almost certainly mean losing my life, Jennings replied. "But I do not think that I could bring myself to participate in that act. That's purely personal, and other reporters might have a different reaction."
    • anonymous
      anonymous on 14 Oct 10
       
      This was a powerful moment that I *still* remember to this day.
  • Jennings was made to feel embarrassed about his natural, decent human impulse. Wallace seemed unembarrassed about feeling no connection to the soldiers in his country's army or considering their deaths before his eyes "simply a story."
  • Meet the Press, moderated by Tim Russert, is probably the meatiest of these programs. High-powered guests discuss serious topics with Russert, who worked for years in politics, and with veteran reporters. Yet the pressure to keep things lively means that squabbling replaces dialogue.
  • ...34 more annotations...
  • In the 1992 presidential campaign candidates spent more time answering questions from "ordinary people"—citizens in town-hall forums, callers on radio and TV talk shows—than they had in previous years. The citizens asked overwhelmingly about the what of politics: What are you going to do about the health-care system? What can you do to reduce the cost of welfare? The reporters asked almost exclusively about the how: How are you going to try to take away Perot's constituency? How do you answer charges that you have flip-flopped?
  • Earlier in the month the President's performance had been assessed by the three network-news anchors: Peter Jennings, of ABC; Dan Rather, of CBS; and Tom Brokaw, of NBC. There was no overlap whatsoever between the questions the students asked and those raised by the anchors. None of the questions from these news professionals concerned the impact of legislation or politics on people's lives. Nearly all concerned the struggle for individual advancement among candidates.
  • The CBS Evening News profile of Clinton, which was narrated by Rather and was presented as part of the series Eye on America, contained no mention of Clinton's economic policy, his tax or budget plans, his failed attempt to pass a health-care proposal, his successful attempt to ratify NAFTA, his efforts to "reinvent government," or any substantive aspect of his proposals or plans in office. Its subject was exclusively Clinton's handling of his office—his "difficulty making decisions," his "waffling" at crucial moments. If Rather or his colleagues had any interest in the content of Clinton's speech as opposed to its political effect, neither the questions they asked nor the reports they aired revealed such a concern.
  • When ordinary citizens have a chance to pose questions to political leaders, they rarely ask about the game of politics. They want to know how the reality of politics will affect them—through taxes, programs, scholarship funds, wars. Journalists justify their intrusiveness and excesses by claiming that they are the public's representatives, asking the questions their fellow citizens would ask if they had the privilege of meeting with Presidents and senators. In fact they ask questions that only their fellow political professionals care about. And they often do so—as at the typical White House news conference—with a discourtesy and rancor that represent the public's views much less than they reflect the modern journalist's belief that being independent boils down to acting hostile.
  • The subtle but sure result is a stream of daily messages that the real meaning of public life is the struggle of Bob Dole against Newt Gingrich against Bill Clinton, rather than our collective efforts to solve collective problems.
  • The natural instinct of newspapers and TV is to present every public issue as if its "real" meaning were political in the meanest and narrowest sense of that term—the attempt by parties and candidates to gain an advantage over their rivals.
  • when there is a chance to use these issues as props or raw material for a story about political tactics, most reporters leap at it. It is more fun—and easier—to write about Bill Clinton's "positioning" on the Vietnam issue, or how Newt Gingrich is "handling" the need to cut Medicare, than it is to look into the issues themselves.
  • Whether or not that was Clinton's real motive, nothing in the broadcast gave the slightest hint of where the extra policemen would go, how much they might cost, whether there was reason to think they'd do any good. Everything in the story suggested that the crime bill mattered only as a chapter in the real saga, which was the struggle between Bill and Newt.
  • "In some ways it's not even the point," she replied. What mattered was that Clinton "looked good" taking the tough side of the issue. No one expects Cokie Roberts or other political correspondents to be experts on controlling terrorism, negotiating with the Syrians, or the other specific measures on which Presidents make stands. But all issues are shoehorned into the area of expertise the most-prominent correspondents do have:the struggle for one-upmanship among a handful of political leaders.
  • When the Clinton Administration declared defeat in 1994 and there were no more battles to be fought, health-care news coverage virtually stopped too—even though the medical system still represented one seventh of the economy, even though HMOs and corporations and hospitals and pharmaceutical companies were rapidly changing policies in the face of ever-rising costs.
  • Health care was no longer political news, and therefore it was no longer interesting news.
  • In interviews and at the news conferences he conducted afterward Bradley did his best to talk about the deep problems of public life and economic adjustment that had left him frustrated with the political process. Each of the parties had locked itself into rigid positions that kept it from dealing with the realistic concerns of ordinary people, he said.
  • What turned up in the press was almost exclusively speculation about what the move meant for this year's presidential race and the party lineup on Capitol Hill. Might Bradley challenge Bill Clinton in the Democratic primaries? If not, was he preparing for an independent run? Could the Democrats come up with any other candidate capable of holding on to Bradley's seat? Wasn't this a slap in the face for Bill Clinton and the party he purported to lead? In the aftermath of Bradley's announcement prominent TV and newspaper reporters competed to come up with the shrewdest analysis of the political impact of the move. None of the country's major papers or networks used Bradley's announcement as a news peg for an analysis of the real issues he had raised.
  • Every one of Woodruff's responses or questions was about short-term political tactics. Woodruff asked about the political implications of his move for Bill Clinton and Newt Gingrich. Bradley replied that it was more important to concentrate on the difficulties both parties had in dealing with real national problems.
  • As soon as he finished, Woodruff asked her next question: "Do you want to be President?" It was as if she had not heard a word he had been saying—or couldn't hear it, because the media's language of political analysis is utterly separate from the terms in which people describe real problems in their lives.
  • Regardless of the tone of coverage, medical research will go on. But a relentless emphasis on the cynical game of politics threatens public life itself, by implying day after day that the political sphere is nothing more than an arena in which ambitious politicians struggle for dominance, rather than a structure in which citizens can deal with worrisome collective problems.
  • Fourteen prominent journalists, pollsters, and all-around analysts made their predictions
  • One week later many of these same experts would be saying on their talk shows that the Republican landslide was "inevitable" and "a long time coming" and "a sign of deep discontent in the heartland."
  • But before the returns were in, how many of the fourteen experts predicted that the Republicans would win both houses of Congress and that Newt Gingrich would be speaker? Exactly three.
  • As with medieval doctors who applied leeches and trepanned skulls, the practitioners cannot be blamed for the limits of their profession. But we can ask why reporters spend so much time directing our attention toward what is not much more than guesswork on their part.
  • useless distractions have become a specialty of the political press. They are easy to produce, they allow reporters to act as if they possessed special inside knowledge, and there are no consequences for being wrong.
  • The deadpan restraint with which Kurtz told this story is admirable. But the question many readers would want to scream at the idle correspondents is Why don't you go out and do some work?
  • Why not imagine, just for a moment, that your journalistic duty might involve something more varied and constructive than doing standups from the White House lawn and sounding skeptical about whatever announcement the President's spokesman put out that day?
  • The list could go on for pages. With a few minutes' effort—about as long as it takes to do a crossword puzzle—the correspondents could have drawn up lists of other subjects they had never before "had time" to investigate. They had the time now. What they lacked was a sense that their responsibility involved something more than standing up to rehash the day's announcements when there was room for them on the news.
  • How different the "Better safe than sorry" calculation seems when journalists are involved! Reporters and pundits hold no elected office, but they are obviously public figures. The most prominent TV-talk-show personalities are better known than all but a handful of congressmen.
  • If an interest group had the choice of buying the favor of one prominent media figure or of two junior congressmen, it wouldn't even have to think about the decision. The pundit is obviously more valuable.
  • Had Donaldson as a journalist been pursuing a politician or even a corporate executive, he would have felt justified in using the most aggressive reportorial techniques. When these techniques were turned on him, he complained that the reporters were going too far.
  • Few of his readers would leap to the conclusion that Will was serving as a mouthpiece for his wife's employers. But surely most would have preferred to learn that information from Will himself.
  • ABC News found that eight out of 10 approved of the president's speech. CBS News said that 74 percent of those surveyed said they had a "clear idea" of what Clinton stands for, compared with just 41 percent before the speech. A Gallup Poll for USA Today and Cable News Network found that eight in 10 said Clinton is leading the country in the right direction. Nielsen ratings reported in the same day's paper showed that the longer the speech went on, the larger the number of people who tuned in to watch.
  • The point is not that the pundits are necessarily wrong and the public necessarily right. The point is the gulf between the two groups' reactions. The very aspects of the speech that had seemed so ridiculous to the professional commentators—its detail, its inclusiveness, the hyperearnestness of Clinton's conclusion about the "common good"—seemed attractive and worthwhile to most viewers.
  • The difference between the "welcoming committee" and the congressional committees headed by fallen Democratic titans like Tom Foley and Jack Brooks was that the congressmen can be booted out.
  • Movies do not necessarily capture reality, but they suggest a public mood—in this case, a contrast between the apparent self-satisfaction of the media celebrities and the contempt in which they are held by the public.
  • the fact that no one takes the shows seriously is precisely what's wrong with them, because they jeopardize the credibility of everything that journalists do.
  • when all the participants then dash off for the next plane, caring about none of it except the money—when these things happen, they send a message. The message is: We don't respect what we're doing. Why should anyone else?
  • anonymous on 14 Oct 10
     
    "Why has the media establishment become so unpopular? Perhaps the public has good reason to think that the media's self-aggrandizement gets in the way of solving the country's real problems" By James Fallows at The Atlantic on February, 1996
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The Paradox of America's Electoral Reform - 0 views

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shared by anonymous on 10 Mar 15 - Cached
  • This election process matters to the world for two reasons.
  • First, the world's only global power will be increasingly self-absorbed
  • The United States sees itself as the City on the Hill, an example to the world. But along with any redemptive sensibility comes its counterpart: the apocalyptic.
  • ...29 more annotations...
  • Likely an archaic institution, the Electoral College still represents the founders' fear of the passions of the people — both the intensity of some, and the indifference of others.
  • They had two visions: that representatives would make the law, and that these representatives would not have politics as a profession.
  • The founders saw civil society — business, farms, churches and so on — as ultimately more important than the state, and they saw excessive political passion as misplaced.
  • First, it took away from the private pursuits they so valued, and it tended to make political life more important than it should be.
  • Second, they feared that ordinary men (women were excluded) might be elected as representatives at various levels.
  • They tried to shape representative democracy with standards they considered prudent — paralleling the values of their own social class, where private pursuits predominated and public affairs were a burdensome duty.
  • Of course it was the founders who created political parties soon after the founding. The property requirements dissolved fairly quickly, the idea that state houses would elect senators went away, and the ideological passions and love of scandal emerged. 
  • Political parties were organized state by state, and within state by counties and cities. These parties emerged with two roles.
  • The first was to generate and offer potential leaders for election at all levels.
  • The second was to serve as a means of mediation between the public — for multiple classes, from the wealthy to the poor — and the state.
  • The party bosses did not have visions of redemption or apocalypse. They were what the founders didn't want: professional politicians, not necessarily holding office themselves but overseeing the selection of those who would.
  • This was a system made for corruption, of course, and it violated the founders' vision, but it also fulfilled that vision in a way. The party bosses' power resided in building coalitions that they could serve.
  • The system was corrupt, but it produced leaders like Abraham Lincoln, Theodore Roosevelt, Woodrow Wilson, Franklin Roosevelt, Harry Truman and Dwight Eisenhower, as well as some less illustrious people.
  • Starting in 1972, following Richard Nixon's presidency, the United States shifted away from a system of political bosses. This was achieved by broadly expanding primaries at all levels. Rather than bosses selecting candidates and controlling them, direct democratic elections were used for candidate selection. Since the bosses didn't select candidates, the candidates were beholden to the voters rather than the bosses. Each election year, the voters would select the candidates and then select the officeholder. Over time, the power of the political machine was broken and replaced by a series of elections. The founders did not want this level of democracy, but neither did they explicitly want the party boss.
  • This change had two unanticipated consequences.
  • The first was that the importance of money in the political process surged.
  • Corruption moved from favors for bosses to special treatment of fundraisers, but it was still there.
  • Reformers tried to limit the amount of money that could be contributed, but they ignored two facts.
  • First, a primary system for the presidency is fiendishly expensive simply because delivering the message to the public in 50 states costs a fortune. Second, given the stakes, the desire to influence government is difficult to curb.
  • The second unintended consequence was that it institutionalized political polarization.
  • The founders designed politics to be less important than private life, and in the competition on Election Tuesday, private life tends to win, particularly in off-year elections and primaries.
  • in the primaries, only two types of candidates win. One is the extremely well funded — and the passion of the wings make funding for them even more important. The other is the ideologically committed.
  • All of this applies equally to elections to the House and Senate. It has been said that there has never been less bipartisanship than there is now. I don't know if that is true, but it is certainly the case that the penalties for collaboration with the other party, or for moving to the center, are extremely high.
  • This is not meant to romanticize the bosses. We are, on the whole, better off without them, and we can't resurrect them. I am trying to explain why our elections have become so long, why they cost so much money, and why the wings of the parties get to define agendas and legislative and executive behavior.
  • Geopolitics, as Stratfor uses the concept, argues that the wishes and idiosyncrasies of individual leaders make little difference in the long run. This is because leaders are constrained by global realities. It is also because internal political processes define what must be done to take and hold power. Those internal political processes have their own origins in impersonal forces.
  • There has been a long struggle between the founders' vision of how politics should work and the reality of the process.
  • The American Republic was invented and it is continually being reinvented on the same basic theme. Each reform creates a new form of corruption and a new challenge for governance. In the end, everyone is trapped by reality, but it is taking longer and longer to enter that trap.
  • The political parties emerged against the founders' intentions, because political organization beyond the elite followed from the logic of the government. The rise of political bosses followed from the system, and simultaneously stabilized and corrupted it. The post-Watergate reforms changed the nature of the corruption but also changed the texture of political life. The latter is the issue with which the United States is now struggling.
  • The problem endemic in American culture is the will to reform. It is both the virtue and vice of the U.S. government. It has geopolitical consequences.
  • anonymous on 10 Mar 15
     
    "We are now in the early phases of selecting the president of the United States. Vast amounts of money are being raised, plans are being laid, opposition research is underway and the first significant scandal has broken with the discovery that Hillary Clinton used a non-government email account for government business. Ahead of us is an extended series of primaries, followed by an election and perhaps a dispute over some aspect of the election. In the United States, the presidential election process takes about two years, particularly when the sitting president cannot run for re-election."
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The Tea Party and Insurgency Politics - 0 views

www.stratfor.com/..._party_and_insurgency_politics politics criticalthinking geopolitics
shared by anonymous on 17 Sep 10 - Cached
  • The political lesson, worth pondering in these times of Tea Party rumbling, is that serious protest movements such as the Perot phenomenon or today’s Tea Party revolt never just fade away. They linger in American politics, sometimes largely unseen but sometimes quite overt, and exert a continuing tug on the course of electoral decision-making. Eventually they get absorbed into one major party or the other. In the process, they often tilt the balance of political power in the country, occasionally for substantial periods of time.
  • What it represents and portends can best be scrutinized by trying to answer three fundamental questions:
  • First, is this movement for real and is it enduring? The answer is yes.
  • ...8 more annotations...
  • The second question is, where did this movement come from? What precisely were the impulses, angers and fears that spawned this seemingly spontaneous wave of civic energy?
  • But most Tea Party leaders emphasize three general principles.
  • The first is “fiscal responsibility,” which includes a strong aversion to huge federal deficits and the yawning national debt.
  • The second principle is “constitutionally limited government,” which implies states’ rights and the protection of individual liberties from federal intrusion.
  • the third is “free markets,” seen by Tea Party adherents as the protection of intertwined “individual and economic liberty.
  • Both the Jackson and Clay traditions have reverberated through American politics for nearly 200 years.
  • The third question centers on how the Tea Party will influence American politics in the coming years.
  • Indeed, much of the flow of American politics that angers Tea Party adherents — increased federal spending, growing deficits, Washington’s earmark culture, the looming entitlement crises — were in full force during the Bush years. That’s why Tea Party adherents are so bent on busting up the Washington establishment by first busting up the GOP.
  • anonymous on 17 Sep 10
     
    "The political lesson, worth pondering in these times of Tea Party rumbling, is that serious protest movements such as the Perot phenomenon or today's Tea Party revolt never just fade away. They linger in American politics, sometimes largely unseen but sometimes quite overt, and exert a continuing tug on the course of electoral decision-making. Eventually they get absorbed into one major party or the other. In the process, they often tilt the balance of political power in the country, occasionally for substantial periods of time." By Robert W. Merry at StratFor on September 17, 2010.
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Russia's Evolving Leadership - 4 views

www.stratfor.com/...04-russias-evolving-leadership russia leadership geopolitics
shared by anonymous on 05 Jul 11 - Cached
  • In the past decade, one person has consolidated and run Russia’s political system: former president and current Prime Minister Vladimir Putin.
  • Under Putin’s presidential predecessor, Boris Yeltsin, Russia’s strategic economic assets were pillaged, the core strength of the country — the KGB, now known as the Federal Security Service (FSB), and the military — fell into decay, and the political system was in disarray. Though Russia was considered a democracy and a new friend to the West, this was only because Russia had no other option — it was a broken country.
  • While an autocrat and KGB agent (we use the present tense, as Putin has said that no one is a former KGB or FSB agent), he hails from St. Petersburg, Russia’s most pro-Western city, and during his Soviet-era KGB service he was tasked with stealing Western technology. Putin fully understands the strength of the West and what Western expertise is needed to keep Russia relatively modern and strong. At the same time, his time with the KGB convinced him that Russia can never truly be integrated into the West and that it can be strong only with a consolidated government, economy and security service and a single, autocratic leader.
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  • Putin’s understanding of Russia’s two great weaknesses informs this worldview.
  • The first weakness is that Russia was dealt a poor geographic hand.
  • The second is that its population is comprised of numerous ethnic groups, not all of which are happy with centralized Kremlin rule.
  • Russia essentially lacks an economic base aside from energy.
  • These geographic, demographic and economic challenges have led Russia to shift between being aggressive to keep the country secure and being accommodating toward foreign powers in a bid to modernize Russia.
  • However, Russia cannot go down the two paths of accommodating and connecting with the West and a consolidated authoritarian Russia at the same time unless Russia is first strong and secure as a country, something that has only happened recently.
  • Which face they show does not depend upon personalities but rather upon the status of Russia’s strength.
  • Putin, who had no choice but to appeal to the West to help keep the country afloat when he took office in 2000, initially was hailed as a trusted partner by the West. But even while former U.S. President George W. Bush was praising Putin’s soul, behind the scenes, Putin already was reorganizing one of his greatest tools — the FSB — in order to start implementing a full state consolidation in the coming years.
  • After 9/11, Putin was the first foreign leader to phone Bush and offer any assistance from Russia. The date marked an opportunity for both Putin and Russia. The attacks on the United States shifted Washington’s focus, tying it down in the Islamic world for the next decade. This gave Russia a window of opportunity with which to accelerate its crackdown inside (and later outside) Russia without fear of a Western response.
  • During this time, the Kremlin ejected foreign firms, nationalized strategic economic assets, shut down nongovernmental organizations, purged anti-Kremlin journalists, banned many anti-Kremlin political parties and launched a second intense war in Chechnya.
  • Western perceptions of Putin’s friendship and standing as a democratic leader simultaneously evaporated.
  • When Medvedev entered office, his current reputation for compliance and pragmatism did not exist. Instead, he continued on Russia’s roll forward with one of the boldest moves to date — the Russia-Georgia war.
  • By 2009, Russia had proven its power in its direct sphere and so began to ease into a new foreign and domestic policy of duality.
  • Only when Russia is strong and consolidated can it drop being wholly aggressive and adopt such a stance of hostility and friendliness.
  • With elections approaching, the ruling tandem seems even more at odds as Medvedev overturns many policies Putin put into place in the early 2000s, such as the ban on certain political parties, the ability of foreign firms to work in strategic sectors and the role of the FSB elite within the economy. Despite the apparent conflict, the changes are part of an overall strategy shared by Putin and Medvedev to finish consolidating Russian power.
  • These policy changes show that Putin and Medvedev feel confident enough that they have attained their first imperative that they can look to confront the second inherent problem for the country: Russia’s lack of modern technology and lack of an economic base
  • Russia thus has launched a multiyear modernization and privatization plan to bring in tens if not hundreds of billions of dollars to leapfrog the country into current technology and diversify the economy. Moscow has also struck deals with select countries — Germany, France, Finland, Norway, South Korea and even the United States — for each sector to use the economic deals for political means.
  • two large problems
  • First, foreign governments and firms are hesitant to do business in an authoritarian country with a record of kicking foreign firms out.
  • At the same time, the Kremlin knows that it cannot lessen its hold inside of Russia without risking losing control over its first imperative of securing Russia.
  • The first move is to strengthen the ruling party — United Russia — while allowing more independent political parties.
  • While these new political parties appear to operate outside the Kremlin’s clutches, this is just for show. The most important new party is Russia’s Right Cause launched by Russian oligarch Mikhail Prokhorov.
  • Right Cause is intended to support foreign business and the modernization efforts.
  • The Popular Front is not exactly a political party but an umbrella organization meant to unite the country. Popular Front members include Russia’s labor unions, prominent social organizations, economic lobbying sectors, big business, individuals and political parties. In short, anything or anyone that wants to be seen as pro-Russian is a part of the Popular Front.
  • It creates a system in which power in the country does not lie in a political office — such as the presidency or premiership — but with the person overseeing the Popular Front: Putin.
  • The new system is designed to have a dual foreign policy, to attract non-Russian groups back into the country and to look more democratic overall while all the while being carefully managed behind the scenes.
  • In theory, the new system is meant to allow the Kremlin to maintain control of both its grand strategies of needing to reach out abroad to keep Russia modern and strong and trying to ensure that the country is also under firm control and secure for years to come.
    • anonymous
      anonymous on 06 Jul 11
       
      I would imagine that it seems that way to most Americans, but then we're tech-focused. We have a very hard time understanding that the only time Russia has ever felt geographically secure is *when* they're aggressive. This means upgrading tech, infrastructure, and social-glue all at the same time. Add: There are all those quotes from past leaders about feeling as though they had to expand their borders or influence just to feel secure at home. We Americans may as well be from Mars: We have two giant oceans and we culturally dominate our few neighbors with trade. This is why I agree with StratFor (read as: resignedly fear) that a confrontation with Russia is in the offing two decades hence. If they dominate central Asia and hold levers in Europe, as they are quite obviously trying to do, they will be perceived as a threat, and the U.S. is all too willing to help those who are afraid of Russia. All this strikes me as a prelude that we'll gloss over in future readings of the 'past'. But then, it's another case where I'm *begging* to be wrong.
  • anonymous on 05 Jul 11
     
    "Russia has entered election season, with parliamentary elections in December and presidential elections in March 2012. Typically, this is not an issue of concern, as most Russian elections have been designed to usher a chosen candidate and political party into office since 2000. Interesting shifts are under way this election season, however. While on the surface they may resemble political squabbles and instability, they actually represent the next step in the Russian leadership's consolidation of the state."
  • Erik Hanson on 06 Jul 11
     
    I get the security concern, but Putin has always seemed to overemphasize and overextend the issue into something bigger and more offensive. It seems to me that the infrastructure and tech needs are much more pressing and would yield more results.
  • Erik Hanson on 06 Jul 11
     
    There are still plenty of places where we're not willing to push back (the Polish Belorussian genocides being a prominent example in my mind), but you're right at how foreign that mindset is. Foreign or bizarrely 19th century.
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Elections Plunge Italy into Political Chaos - 0 views

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shared by anonymous on 26 Feb 13 - Cached
  • While Grillo's party ended up in third place, one in four Italians voted for it, and the party became the most voted-for single party into the Chamber of Deputies (the two mainstream parties, the Democratic Party and the People of Freedom, competed as part of electoral coalitions).
  • Grillo's emergence as the referent of the protest against traditional politicians in Italy is not an entirely new phenomenon. In 1994, former Prime Minister Silvio Berlusconi took advantage of a corruption scandal that prompted the popularity of traditional political parties to plunge. Berlusconi campaigned as an outsider who criticized traditional politicians and their corrupt ways.
  • He combined the tools of mass politics of the mid-20th century with the media tools of the 21st century.
  • ...5 more annotations...
  • The rise of the Five Star Movement shares similar elements with the electoral growth of the Coalition of the Radical Left, or Syriza, in Greece.
  • Both are anti-system parties that have put the traditional parties against the ropes.
  • Grillo's remarkable performance reflects a growing fatigue among the Italian electorate with the German leadership during the European crisis.
  • When the total number of votes for these three parties are combined, it becomes clear that more than two-thirds of Italians said no to austerity measures. Monti's poor performance in the elections confirms this trend. No matter what happens with Italy's political future, the new Italian government will have this mandate in mind.
  • Italians went to the polls Sunday and Monday hoping that it would be the first step to bringing Italy out of its political and economic stagnation. But they woke up on Tuesday to a country fragmented into three political groups with similar levels of support, where alliances will be extremely difficult to forge.
  • anonymous on 26 Feb 13
     
    "When Italian comedian Beppe Grillo created his Five Star Movement three-and-a-half years ago, he probably wasn't expecting it to become the voice of a country beset by a deep economic and political crisis. The overwhelming performance of the Five Star Movement in the general elections that were held Sunday and Monday confirmed that the crisis of legitimacy that is threatening the traditional political parties in Europe has finally reached Italy. While Grillo's party ended up in third place, one in four Italians voted for it, and the party became the most voted-for single party into the Chamber of Deputies (the two mainstream parties, the Democratic Party and the People of Freedom, competed as part of electoral coalitions)."
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Russia's Shifting Political Landscape, Part 1: An Overview of Political Changes - 6 views

stratfor.com/...t-1-overview-political-changes
shared by anonymous on 01 Feb 12 - Cached
  • When Putin came to power in 1999, he ruled a country that was in utter political disarray, economically broken and threatened by internal and external forces. He aggressively consolidated the country politically, economically and socially and quashed the security threats. The country rallied around him as Russia's "savior," a sentiment that in recent years evolved into a cult based on the belief that Putin is the sole heartbeat of the country.
  • The first shift in Russia's political landscape occurred because Putin's complex network of clans inside the Kremlin has utterly collapsed.
  • Anti-Kremlin sentiment stems from many issues. Years of relative stability have led to a sense of political, social and economic security, which has fostered a belief among some Russians that the country no longer needs a "savior" like Putin. Prolonged periods of high energy prices and a strengthening Russian economy have created a new growing middle class, something not really seen in Russia before. Furthermore, much of the generation now coming of age was not raised under the Soviet Union or during the chaotic years immediately following its collapse. An extremist brand of nationalism has also risen across the country, leading more Russians to have no interest in a balanced government. Putin's government did not anticipate these shifts in recent years, and that failure has fed into dissent from within United Russia and the further rise of anti-Kremlin sentiment.
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  • This kind of adjustment has occurred cyclically throughout Russian history as the country has shifted between stability and chaos.
    • anonymous
      anonymous on 01 Feb 12
       
      See also: Dark horse and light horse concepts.
  • the longer Putin takes to resolve these crises, the weaker he will appear to the rest of the world.
  • Other countries, especially the United States, have taken advantage of the instability inside Russia and are attempting to exploit the image that Moscow is not as strong or powerful as it claims to be. As Russia continues to pressure Central Europe and Washington's interests in the region, Moscow cannot allow internal issues to erode its position.
    • anonymous
      anonymous on 07 Feb 12
       
      No, you are quite right. There is no threat (yet) to Russia's core. But since Russia has such indefensible geography, they extend their reach to create buffer zones. Even with the U.S./Islamic world diversion, the U.S. is still aggressively planting itself in Central Asia. Russia wants the U.S. and the rest of Europe to concede that *Eastern* Europe be considered their playground. With that recognized - the thinking goes - Russia will breathe easier.
    • anonymous
      anonymous on 07 Feb 12
       
      Oh yes, geography is still quite relevant. In order to fly planes over a place, you have to have supply lines and obey flight range constraints. One aspect of geography that is perennially overlooked is: rivers. Russia's one of the best examples. Look at the major river systems of the U.S. and Russia and two things become quite clear: 1) Russia has only one navigable river and it doesn't empty to the ocean, but rather a mostly landlocked sea. 2) America has a complex, navigable river system that meanders through the center of the land mass. We couldn't ask for better rivers. Using those rivers, as we do, we are able to save substantially on shipping costs. Russia, by contrast, has a sparsely populated interior precisely because there are no river systems that can be used in such a manner. Everything's imported over rail and truck. I need to find a graphic, but there's a great one which highlights why Russia wants to keep, say, Ukraine in its sphere of influence. Basically, you could position tons of short range missiles to threaten Moscow quite easily. I would pose that the only reason that we can't imagine that large-scale combat is a thing anymore (I share a bit of that in my gut) is simply because we have not lived through a conflict with anything near the scope of World War II. But just because it hasn't happened, doesn't mean it won't.
    • Erik Hanson
      Erik Hanson on 07 Feb 12
       
      I'm saying that were such a thing to happen, the only tactical elements of geography would be range and infrastructure. It's no longer important to hold the high ground or worry about "defensible positions" unless you're taking to bunkers.
    • anonymous
      anonymous on 07 Feb 12
       
      Ah. I got you. Yes. I'd agree with that. Russian planners' fear has to do with American troops stationed in a nation, not necessarily what hill they're on. :)
  • anonymous on 01 Feb 12
     
    Russia's political landscape has been relatively calm and consolidated for the past decade under former President and current Russian Prime Minister Vladimir Putin. However, recent months have seen instability rise sharply, with a purge in the government, a shift in parliamentary election results and large protests in the streets. None of these is new to Russia, but these and other factors are converging and creating changes in Russia's political landscape.
  • Erik Hanson on 06 Feb 12
     
    I know that Russia was threatened internally when Putin came to power, but I feel that the "external" threats were more threats on Russia's external claims. Am I missing something?
  • Erik Hanson on 07 Feb 12
     
    Is defensibility of terrain really that important anymore? It seems that beyond small-scale, local-level action, most geography is flown over or sailed around these days, and Russia has plenty of space between where they'd be able to pick up a threat and where that threat could actually do damage. Seriously. Are large-scale land (vs. marine/air) invasions even a thing anymore?
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Huntington on Upheaval - 0 views

www.stratfor.com/...huntington-upheaval
shared by anonymous on 31 Jul 13 - No Cached
  • The very first sentences of Political Order have elicited anger from Washington policy elites for decades now -- precisely because they are so undeniable. "The most important political distinction among countries," Huntington writes, "concerns not their form of government but their degree of government." In other words, strong democracies and strong dictatorships have more in common than strong democracies and weak democracies.
  • hus, the United States always had more in common with the Soviet Union than with any fragile, tottering democracy in the Third World. This, in turn, is because order usually comes before freedom -- for without a reasonable degree of administrative order, freedom can have little value.
  • Huntington quotes the mid-20th century American journalist, Walter Lippmann: "There is no greater necessity for men who live in communities than that they be governed, self-governed if possible, well-governed if they are fortunate, but in any event, governed."
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  • Huntington, who died in 2008, asserts that America has little to teach a tumultuous world in transition because Americans are compromised by their own "happy history."
  • Americans assume a "unity of goodness": that all good things like democracy, economic development, social justice and so on go together. But for many places with different historical experiences based on different geographies and circumstances that isn't always the case.
  • many countries in the developing world are saddled either with few institutions or illegitimate ones at that: so that they have to build an administrative order from scratch. Quite a few of the countries affected by the Arab Spring are in this category. So American advice is more dubious than supposed, because America's experience is the opposite of the rest of the world.
  • For the more complex a society is, the more that institutions are required. The so-called public interest is really the interest in institutions. In modern states, loyalty is to institutions. To wit, Americans voluntarily pay taxes to the Internal Revenue Service and lose respect for those who are exposed as tax cheaters.
  • For without institutions like a judiciary, what and who is there to determine what exactly is right and wrong, and to enforce such distinctions?
  • What individual Arabs and Chinese really want is justice. And justice is ultimately the fruit of enlightened administration.
  • How do you know if a society has effective institutions? Huntington writes that one way is to see how good their militaries are. Because societies that have made war well -- Sparta, Rome, Great Britain, America -- have also been well-governed. For effective war-making requires deep organizations, which, in turn, requires trust and predictability.
  • The ability to fight in large numbers is by itself a sign of civilization. Arab states whose regimes have fallen -- Egypt, Libya, Syria -- never had very good state armies. But sub-state armies in the Middle East -- Hezbollah in Lebanon, the Mehdi Army in Iraq, the various rebel groups in Syria and militias in Libya -- have often fought impressively. Huntington might postulate that this is an indication of new political formations that will eventually replace post-colonial states.
  • Huntington implies that today's instability -- the riotous formation of new institutional orders -- is caused by urbanization and enlightenment. As societies become more urbanized, people come into close contact with strangers beyond their family groups, requiring the intense organization of police forces, sewage, street lighting, traffic and so forth.
  • The main drama of the Middle East and China over the past half-century, remember, has been urbanization, which has affected religion, morals and much else. State autocrats have simply been unable to keep up with dynamic social change.
  • He writes that large numbers of illiterate people in a democracy such as India's can actually be stabilizing, since illiterates have relatively few demands; but as literacy increase, voters become more demanding, and their participation in democratic groupings like labor unions goes up, leading to instability. An India of more and more literate voters may experience more unrest.
  • As for corruption, rather than something to be reviled, it can be a sign of modernization, in which new sources of wealth and power are being created even as institutions cannot keep up. Corruption can also be a replacement for revolution. "He who corrupts a system's police officers is more likely to identify with the system than he who storms the system's police stations."
  • In Huntington's minds, monarchies, rather than reactionary, can often be more dedicated to real reform than modernizing dictatorships. For the monarch has historical legitimacy, even as he feels the need to prove himself through good works; while the secular dictator sees himself as the vanquisher of colonialism, and thus entitled to the spoils of power.
  • Huntington thus helps a little to explain why monarchs such as those in Morocco, Jordan and Oman have been more humane than dictators such as those in Libya, Syria and Iraq.
  • As for military dictatorships, Huntington adds several twists.
  • He writes, "In the world of oligarchy, the soldier is a radical; in the middle-class world he is a participant and arbiter; as the mass society looms on the horizon he becomes the conservative guardian of the existing order.
  • Thus, paradoxically but understandably," he goes on, "the more backward a society is, the more progressive the role of its military..." And so he explains why Latin America and sub-Saharan Africa underwent a plethora of military coups during the middle decades of the Cold War: The officer corps often represented the most enlightened branch of society at the time.
  • Americans see the military as conservative only because of our own particular stage of development as a mass society.
  • The logic behind much of Huntington's narrative is that the creation of order -- not the mere holding of elections -- is progressive.
  • Only once order is established can popular pressure be constructively asserted to make such order less coercive and more institutionally subtle.
  • Precisely because we inhabit an era of immense social change, there will be continual political upheaval, as human populations seek to live under more receptive institutional orders. To better navigate the ensuing crises, American leaders would do well to read Huntington, so as to nuance their often stuffy lectures to foreigners about how to reform.
  • anonymous on 31 Jul 13
     
    "In 1968, Harvard political scientist Samuel P. Huntington published Political Order in Changing Societies. Forty-five years later, the book remains without question the greatest guide to today's current events. Forget the libraries of books on globalization, Political Order reigns supreme: arguably the most incisive, albeit impolite, work produced by a political scientist in the 20th century. If you want to understand the Arab Spring, the economic and social transition in China, or much else, ignore newspaper opinion pages and read Huntington."
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The history of inequality (by Peter Turchin) - 0 views

www.aeonmagazine.com/...peter-turchin-wealth-poverty
shared by anonymous on 21 Nov 13 - No Cached
  • Today, the top one per cent of incomes in the United States accounts for one fifth of US earnings. The top one per cent of fortunes holds two-fifths of the total wealth.
  • As the Congressional Budget Office concluded in 2011: ‘the precise reasons for the rapid growth in income at the top are not well understood’.
  • In his book Wealth and Democracy (2002), Kevin Phillips came up with a useful way of thinking about the changing patterns of wealth inequality in the US.
  • ...67 more annotations...
  • He looked at the net wealth of the nation’s median household and compared it with the size of the largest fortune in the US. The ratio of the two figures provided a rough measure of wealth inequality, and that’s what he tracked, touching down every decade or so from the turn of the 19th century all the way to the present.
  • We found repeated back-and-forth swings in demographic, economic, social, and political structures
  • From 1800 to the 1920s, inequality increased more than a hundredfold.
  • Then came the reversal: from the 1920s to 1980, it shrank back to levels not seen since the mid-19th century.
  • From 1980 to the present, the wealth gap has been on another steep, if erratic, rise. Commentators have called the period from 1920s to 1970s the ‘great compression’. The past 30 years are known as the ‘great divergence’.
    • anonymous
      anonymous on 21 Nov 13
       
      I'd like to pull this citation and superimpose another period-chart onto my timeline.
  • when looked at over a long period, the development of wealth inequality in the US appears to be cyclical. And if it’s cyclical, we can predict what happens next.
  • Does observing just one and a half cycles really show that there is a regular pattern in the dynamics of inequality? No, by itself it doesn’t.
  • In our book Secular Cycles (2009), Sergey Nefedov and I applied the Phillips approach to England, France and Russia throughout both the medieval and early modern periods, and also to ancient Rome.
  • And the cycles of inequality were an integral part of the overall motion.
  • Cycles in the real world are chaotic, because complex systems such as human societies have many parts that are constantly moving and influencing each other.
  • Understanding (and perhaps even forecasting) such trend-reversals is at the core of the new discipline of cliodynamics, which looks at history through the lens of mathematical modelling.
    • anonymous
      anonymous on 21 Nov 13
       
      Cliodynamics - Another thing to learn a bit more about.
  • First, we need to think about jobs.
  • One of the most important forces affecting the labour supply in the US has been immigration
  • it turns out that immigration, as measured by the proportion of the population who were born abroad, has changed in a cyclical manner just like inequality.
  • Another reason why the labour supply in the US went up in the 19th century is, not to put too fine a point on it, sex.
  • This connection between the oversupply of labour and plummeting living standards for the poor is one of the more robust generalisations in history.
  • The population of England doubled between 1150 and 1300.
  • causing the population of London to balloon from 20,000 to 80,000.
  • fourfold increase in food prices and a halving of real wages.
  • when a series of horrible epidemics, starting with the Black Death of 1348, carried away more than half of the population, the same dynamic ran in reverse.
  • The tug of war between the top and typical incomes doesn’t have to be a zero-sum game, but in practice it often is
  • Much the same pattern can be seen during the secular cycle of the Roman Principate.
  • Naturally, the conditions affecting the labour supply were different in the second half of the 20th century in the US. An important new element was globalisation
  • an oversupply of labour tends to depress wages for the poorer section of the population. And just as in Roman Egypt, the poor in the US today eat more energy-dense foods — bread, pasta, and potatoes — while the wealthy eat more fruit and drink wine.
  • Falling wages isn’t the only reason why labour oversupply leads to inequality. As the slice of the economic pie going to employees diminishes, the share going to employers goes up.
  • And so in 13th-century England, as the overall population doubles, we find landowners charging peasants higher rents and paying less in wages: the immiseration of the general populace translates into a Golden Age for the aristocrats.
  • the number of knights and esquires tripled between 1200 and 1300.
  • Only the gentry drank wine, and around 1300, England imported 20,000 tuns or casks of it from France per year. By 1460, this declined to only 5,000.
  • In the US between around 1870 and 1900, there was another Golden Age for the elites, appropriately called the Gilded Age.
  • And just like in 13th-century England, the total number of the wealthy was shooting up. Between 1825 and 1900, the number of millionaires (in constant 1900 dollars) went from 2.5 per million of the population to 19 per million.
  • In our current cycle, the proportion of decamillionaires (those whose net worth exceeds 10 million in 1995 dollars) grew tenfold between 1992 and 2007 — from 0.04 to 0.4 per cent of the US population.
  • On the face of it, this is a wonderful testament to merit-based upward mobility. But there are side effects. Don’t forget that most people are stuck with stagnant or falling real wages. Upward mobility for a few hollows out the middle class and causes the social pyramid to become top-heavy.
  • As the ranks of the wealthy swell, so too do the numbers of wealthy aspirants for the finite supply of political positions.
  • The civil wars of the first century BC, fuelled by a surplus of politically ambitious aristocrats, ultimately caused the fall of the Republic and the establishment of the Empire.
  • So far I have been talking about the elites as if they are all the same. But they aren’t: the differences within the wealthiest one per cent are almost as stark as the difference between the top one per cent and the remaining 99.
  • very intense status rivalry
  • Archaeology confirms a genuine and dramatic shift towards luxury.
  • Social Darwinism took off during the original Gilded Age, and Ayn Rand (who argued that altruism is evil) has grown astonishingly popular during what we might call our Second Gilded Age.
  • Twilight of the Elites (2012): ‘defenders of the status quo invoke a kind of neo-Calvinist logic by saying that those at the top, by virtue of their placement there, must be the most deserving’. By the same reasoning, those at the bottom are not deserving. As such social norms spread, it becomes increasingly easy for CEOs to justify giving themselves huge bonuses while cutting the wages of workers.
  • Labour markets are especially sensitive to cultural norms about what is fair compensation, so prevailing theories about inequality have practical consequences.
  • the US political system is much more attuned to the wishes of the rich than to the aspirations of the poor.
  • Inverse relationship between well-being and inequality in American history. The peaks and valleys of inequality (in purple) represent the ratio of the largest fortunes to the median wealth of households (the Phillips curve). The blue-shaded curve combines four measures of well-being: economic (the fraction of economic growth that is paid to workers as wages), health (life expectancy and the average height of native-born population), and social optimism (the average age of first marriage, with early marriages indicating social optimism and delayed marriages indicating social pessimism).
  • In some historical periods it worked primarily for the benefit of the wealthy. In others, it pursued policies that benefited the society as a whole. Take the minimum wage, which grew during the Great Compression era and declined (in real terms) after 1980.
  • The top marginal tax rate was 68 per cent or higher before 1980; by 1988 it declined to 28 per cent.
  • In one era, government policy systematically favoured the majority, while in another it favoured the narrow interests of the wealthy elites. This inconsistency calls for explanation.
  • How, though, can we account for the much more broadly inclusive policies of the Great Compression era? And what caused the reversal that ended the Gilded Age and ushered in the Great Compression? Or the second switch, which took place around 1980?
  • Unequal societies generally turn a corner once they have passed through a long spell of political instability.
  • We see this shift in the social mood repeatedly throughout history — towards the end of the Roman civil wars (first century BC), following the English Wars of the Roses (1455-85), and after the Fronde (1648-53), the final great outbreak of violence that had been convulsing France since the Wars of Religion began in the late 16th century.
  • Put simply, it is fear of revolution that restores equality. And my analysis of US history in a forthcoming book suggests that this is precisely what happened in the US around 1920.
  • The worst incident in US labour history was the West Virginia Mine War of 1920—21, culminating in the Battle of Blair Mountain.
  • Although it started as a workers’ dispute, the Mine War eventually turned into the largest armed insurrection that the US has ever seen, the Civil War excepted. Between 10,000 and 15,000 miners armed with rifles battled against thousands of strikebreakers and sheriff deputies.
  • Quantitative data indicate that this period was the most violent in US history, second only to the Civil War. It was much, much worse than the 1960s.
  • The US, in short, was in a revolutionary situation, and many among the political and business elites realised it.
  • The US elites entered into an unwritten compact with the working classes. This implicit contract included the promise that the fruits of economic growth would be distributed more equitably among both workers and owners. In return, the fundamentals of the political-economic system would not be challenged (no revolution).
  • The deal allowed the lower and upper classes to co-operate in solving the challenges facing the American Republic — overcoming the Great Depression, winning the Second World War, and countering the Soviet threat during the Cold War.
  • while making such ‘categorical inequalities’ worse, the compact led to a dramatic reduction in overall economic inequality.
  • The co-operating group was mainly native-born white Protestants. African-Americans, Jews, Catholics and foreigners were excluded or heavily discriminated against.
  • When Barry Goldwater campaigned on a pro-business, anti-union and anti-big government platform in the 1964 presidential elections, he couldn’t win any lasting support from the corporate community. The conservatives had to wait another 16 years for their triumph.
  • But by the late 1970s, a new generation of political and business leaders had come to power. To them the revolutionary situation of 1919-21 was just history. In this they were similar to the French aristocrats on the eve of the French Revolution, who did not see that their actions could bring down the Ancien Régime — the last great social breakdown, the Fronde, being so far in the past.
    • anonymous
      anonymous on 21 Nov 13
       
      This heavily mirrors many aspects of Strauss & Howe's observations. Namely that generational cohorts roughly conform to archetypes precisely *because* memory of prior situations moves from accessible-memory (in those who have it) to history/myth once those who remember it have died.
  • It is no coincidence that the life of Communism (from the October Revolution in Russia in 1917 to the fall of the Berlin Wall in 1989) coincides almost perfectly with the Great Compression era.
  • when Communism collapsed, its significance was seriously misread. It’s true that the Soviet economy could not compete with a system based on free markets plus policies and norms that promoted equity.
  • Yet the fall of the Soviet Union was interpreted as a vindication of free markets, period. The triumphalist, heady atmosphere of the 1990s was highly conducive to the spread of Ayn Randism and other individualist ideologies. The unwritten social contract that had emerged during the New Deal and braved the challenges of the Second World War had faded from memory.
  • all of these trends are part of a complex and interlocking system. I don’t just mean that everything affects everything else; that would be vacuous.
  • Rather, that cliodynamic theory can tell us specifically how demographic, economic and cultural variables relate to one another, and how their interactions generate social change.
  • Cliodynamics also explains why historical reversals in such diverse areas as economics and culture happen at roughly similar times. The theory of secular cycles was developed using data from historical societies, but it looks like it can provide answers to questions about our own society.
  • Three years ago I published a short article in the science journal Nature. I pointed out that several leading indicators of political instability look set to peak around 2020.
    • anonymous
      anonymous on 21 Nov 13
       
      2020-2025 is a date-range that continues to pop up in my forecasting readings - and from quite a variety of sources.
  • In other words, we are rapidly approaching a historical cusp, at which the US will be particularly vulnerable to violent upheaval. This prediction is not a ‘prophecy’. I don’t believe that disaster is pre-ordained, no matter what we do. On the contrary, if we understand the causes, we have a chance to prevent it from happening. But the first thing we will have to do is reverse the trend of ever-growing inequality.
  • anonymous on 21 Nov 13
     
    "After thousands of scholarly and popular articles on the topic, one might think we would have a pretty good idea why the richest people in the US are pulling away from the rest. But it seems we don't. As the Congressional Budget Office concluded in 2011: 'the precise reasons for the rapid growth in income at the top are not well understood'. Some commentators point to economic factors, some to politics, and others again to culture. Yet obviously enough, all these factors must interact in complex ways. What is slightly less obvious is how a very long historical perspective can help us to see the whole mechanism."
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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.
  • ...18 more annotations...
  • 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."
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Machiavelli's Virtue - 0 views

www.stratfor.com/...machiavellis-virtue geopolitics
shared by anonymous on 20 Mar 13 - Cached
  • For the state must organize the lives of millions of strangers and protect their need to selfishly acquire material possessions. If everyone stole from everyone else there would be anarchy. So the state monopolizes the use of force, taking it away from criminals. The state appeals not to God, but to individual selfishness. Thus, it clears the path for progress.
    • anonymous
      anonymous on 20 Mar 13
       
      I positively *love* these 'meta' discussions about the state. I also love the idea that right-wing StratFor subscribing nutjobs, normally excited to learn about American military power, also have to wade through hard thoughts about the nature of the state.
  • Thomas Hobbes conceived of the modern state in his Leviathan, published in 1651. Hobbes is known wrongly as a gloomy philosopher because of his emphasis on anarchy. Hobbes was actually a liberal optimist, who saw the state as the solution to anarchy, allowing people to procure possessions and build a community. Hobbes knew that in the path toward a better world, order first has to be established. Only later can humankind set about making such order non-tyrannical.
  • But what did Hobbes' philosophy ultimately build on? It built on the first of the moderns, the early 16th century Florentine Niccolo Machiavelli, whose masterpiece, The Prince, was written 500 years ago in 1513. Here is an anniversary as important as the 500th anniversary of Columbus discovering America, celebrated in 1992.
  • ...22 more annotations...
  • By taking politics away from the narrowing fatalism of the medieval Roman Catholic Church, Machiavelli created the very secular politics from which Hobbes could conceive of the idea of the state.
  • The Prince may be less a work of cynicism than an instructional guide to overcome fate -- the fatalism of the Roman Catholic Church at that time. Thus, Machiavelli, more than Michelangelo perhaps, was the true inventor of the Renaissance.
  • The founders of the American Republic, who conceived of a polity in which church and state were separate and in which government existed to lay the rules for individuals to compete freely in the struggle to acquire wealth, owed much to Machiavelli and Hobbes.
  • But it is with Machiavelli, more than with Hobbes, where the principles of Western modernity truly begin.
  • Harvard Professor Harvey C. Mansfield Jr. Mansfield knows that it is more important to tell hard truths than it is to be liked and to get good reviews.
  • For by setting the terms for political reality, Machiavelli helps lay the foundation for geopolitics.
  • necessity frees people from religious faith. People may pray to God and go to church or synagogue or the mosque, but they must also acquire food and possessions for the sake of their loved ones, and thus they must enter into competition with their fellow human beings
  • just as nations must enter into competition with other nations.
  • Self-interest informs compromise with other human beings, and thus a state governed by self-interest is likely to compromise with other states: whereas a person or state governed solely by religious or moral virtue will tend to delegitimize as immoral those with whom he or it disagrees -- and therein lies conflict.
  • Virtue, in other words, is fine. But outstanding virtue -- because it tempts sanctimoniousness -- is dangerous. It is ultimately with this maxim that we find philosophical justification for moderation in contemporary politics and statecraft.
  • Those who find such thinking dark or cynical may be under the illusion that politics can bring respite from primitive necessity. Machiavelli, as Mansfield explains, is doubtful of this.
  • Yes, politicians may announce their intention to strive for truth and justice, but their unspoken concerns and desires, even in a democracy -- especially in a democracy -- are really about satisfying the selfish needs of their constituents.
  • Face it, primitive necessity is a fixture of the human condition. And, therefore, the only way to reduce conflict and suffering is through anxious foresight: the ability to foresee danger and necessities ahead. Thus are intelligence agencies more likely to prevent atrocities than humanitarians.
    • anonymous
      anonymous on 20 Mar 13
       
      Ouch... This hurts. Probably because, though my monkey mind keeps resisting, I suspect it is very true.
  • In politics, explains Machiavelli (through Mansfield), one who does good often cannot be good. One must even learn how to be bad, or at least devious, for the sake of the common good. This is not necessarily the end justifies the means, for Machiavelli is careful to stipulate that only the minimum amount of cruelty should be applied for the sake of the greatest amount of good.
  • Machiavelli is all about results. He believes that you define something in politics not by its inherent excellence, but by its outcome.
  • A leader may be honest, unselfish and moral, but if he starts a war that later proved unnecessary and killed many people, he lacks virtue -- despite being on a personal level very sympathetic.
  • Conversely, a leader may be cynical, selfish and excessively ambitious, but if he keeps his countrymen away from danger he can still be said to have virtue -- despite being personally unappealing.
  • Likeability has nothing to do with virtue, it turns out.
  • For politics -- and especially geopolitics -- is concerned, according to Machiavelli, with knowing about the world rather than knowing about heaven. Indeed, precisely because Machiavelli was concerned with men and not with God, he was a humanist.
  • Machiavelli has his limits. For example, he could not have foreseen 20th century totalitarianism that mirrored the self-righteousness of the medieval Church with which he was in conflict, but on a much larger scale.
  • Because the stakes are arguably higher now because of weapons of mass destruction, there is a danger of taking Machiavelli too far and using his philosophy to justify all sorts of risky subterfuges.
  • But there is a greater danger in simply dismissing his philosophy as unworthy of our so-called enlightened age. For our age is determined less by globalization than by the battle of space and power, both between states and between groups within states themselves -- as witnessed most recently by the ethnic and sectarian turmoil throughout the Greater Middle East. An American leader who is forced to grapple with such anarchy, even as he must take care to adopt the right tone with a militarily ascendant China and with an economically rising Latin America, could do worse than act "Machiavellian." And thanks to Professor Mansfield, we now know the true meaning of that adjective.
  • anonymous on 20 Mar 13
     
    "What is modernity? Is it skyscrapers, smart phones, wonder drugs, atomic bombs? You're not even close. Modernity, at least in the West, is the journey away from religious virtue toward secular self-interest. Religious virtue is fine for one's family and the world of private morality. But the state -- that defining political structure of modern times -- requires something colder, more chilling. "
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Information Consumerism: The Price of Hypocrisy - 0 views

www.faz.net/...ice-of-hypocrisy-12292374.html
shared by anonymous on 05 Aug 13 - No Cached
  • let us not pass over America’s surveillance addiction in silence. It is real; it has consequences; and the world would do itself a service by sending America to a Big Data rehab. But there’s more to learn from the Snowden affair.
  • It has also busted a number of myths that are only peripherally related to surveillance: myths about the supposed benefits of decentralized and commercially-operated digital infrastructure, about the current state of technologically-mediated geopolitics, about the existence of a separate realm known as “cyberspace.”
  • First of all, many Europeans are finally grasping, to their great dismay, that the word “cloud” in “cloud computing” is just a euphemism for “some dark bunker in Idaho or Utah.”
  • ...50 more annotations...
  • Second, ideas that once looked silly suddenly look wise. Just a few months ago, it was customary to make fun of Iranians, Russians and Chinese who, with their automatic distrust of all things American, spoke the bizarre language of “information sovereignty.”
  • Look who’s laughing now: Iran’s national email system launched a few weeks ago. Granted the Iranians want their own national email system, in part, so that they can shut it down during protests and spy on their own people AT other times. Still, they got the geopolitics exactly right: over-reliance on foreign communications infrastructure is no way to boost one’s sovereignty. If you wouldn’t want another nation to run your postal system, why surrender control over electronic communications?
    • anonymous
      anonymous on 05 Aug 13
       
      This could have been written by StratFor.
  • Third, the sense of unconditional victory that civil society in both Europe and America felt over the defeat of the Total Information Awareness program – a much earlier effort to establish comprehensive surveillance – was premature.
  • The problem with Total Information Awareness was that it was too big, too flashy, too dependent on government bureaucracy. What we got instead, a decade later, is a much nimbler, leaner, more decentralized system, run by the private sector and enabled by a social contract between Silicon Valley and Washington
  • This is today’s America in full splendor: what cannot be accomplished through controversial legislation will be accomplished through privatization, only with far less oversight and public control.
  • From privately-run healthcare providers to privately-run prisons to privately-run militias dispatched to war zones, this is the public-private partnership model on which much of American infrastructure operates these days.
  • Communications is no exception. Decentralization is liberating only if there’s no powerful actor that can rip off the benefits after the network has been put in place.
  • Fourth, the idea that digitization has ushered in a new world, where the good old rules of realpolitik no longer apply, has proved to be bunk. There’s no separate realm that gives rise to a new brand of “digital” power; it’s one world, one power, with America at the helm.
    • anonymous
      anonymous on 05 Aug 13
       
      THIS right here, is crucial.
  • The sheer naivete of statements like this – predicated on the assumption that somehow one can “live” online the way one lives in the physical world and that virtual politics works on a logic different from regular politics – is illustrated by the sad case of Edward Snowden, a man with a noble mission and awful trip-planning skills.
  • Fifth, the once powerful myth that there exists a separate, virtual space where one can have more privacy and independence from social and political institutions is dead.
  • Microsoft’s general counsel wrote that “looking forward, as Internet-based voice and video communications increase, it is clear that governments will have an interest in using (or establishing) legal powers to secure access to this kind of content to investigate crimes or tackle terrorism. We therefore assume that all calls, whether over the Internet or by fixed line or mobile phone, will offer similar levels of privacy and security.”
  • Read this again: here’s a senior Microsoft executive arguing that making new forms of communication less secure is inevitable – and probably a good thing.
  • Convergence did happen – we weren’t fooled! – but, miraculously, technologies converged on the least secure and most wiretap-friendly option available.
  • This has disastrous implications for anyone living in dictatorships. Once Microsoft and its peers start building software that is insecure by design, it turbocharges the already comprehensive spying schemes of authoritarian governments. What neither NSA nor elected officials seem to grasp is that, on matters of digital infrastructure, domestic policy is also foreign policy; it’s futile to address them in isolation.
  • This brings us to the most problematic consequence of Snowden’s revelations. As bad as the situation is for Europeans, it’s the users in authoritarian states who will suffer the most.
  • And not from American surveillance, but from domestic censorship. How so? The already mentioned push towards “information sovereignty” by Russia, China or Iran would involve much more than protecting their citizens from American surveillance. It would also trigger an aggressive push to shift public communication among these citizens – which, to a large extent, still happens on Facebook and Twitter – to domestic equivalents of such services.
  • It’s probably not a coincidence that LiveJournal, Russia’s favorite platform, suddenly had maintenance issues – and was thus unavailable for general use – at the very same time that a Russian court announced its verdict to the popular blogger-activist Alexei Navalny.
  • For all the concerns about Americanization and surveillance, US-based services like Facebook or Twitter still offer better protection for freedom of expression than their Russian, Chinese or Iranian counterparts.
  • This is the real tragedy of America’s “Internet freedom agenda”: it’s going to be the dissidents in China and Iran who will pay for the hypocrisy that drove it from the very beginning.
  • On matters of “Internet freedom” – democracy promotion rebranded under a sexier name – America enjoyed some legitimacy as it claimed that it didn’t engage in the kinds of surveillance that it itself condemned in China or Iran. Likewise, on matters of cyberattacks, it could go after China’s cyber-espionage or Iran’s cyber-attacks because it assured the world that it engaged in neither.
  • Both statements were demonstrably false but lack of specific evidence has allowed America to buy some time and influence.
  • What is to be done? Let’s start with surveillance. So far, most European politicians have reached for the low-hanging fruit – law – thinking that if only they can better regulate American companies – for example, by forcing them to disclose how much data and when they share with NSA – this problem will go away.
  • This is a rather short-sighted, naïve view that reduces a gigantic philosophical problem – the future of privacy – to seemingly manageable size of data retention directives.
  • Our current predicaments start at the level of ideology, not bad policies or their poor implementation.
  • As our gadgets and previously analog objects become “smart,” this Gmail model will spread everywhere. One set of business models will supply us with gadgets and objects that will either be free or be priced at a fraction of their real cost.
  • In other words, you get your smart toothbrush for free – but, in exchange, you allow it to collect data on how you use the toothbrush.
  • If this is, indeed, the future that we are heading towards, it’s obvious that laws won’t be of much help, as citizens would voluntarily opt for such transactions – the way we already opt for free (but monitorable) email and cheaper (but advertising-funded) ereaders.
  • In short, what is now collected through subpoenas and court orders could be collected entirely through commercial transactions alone.
  • Policymakers who think that laws can stop this commodificaton of information are deluding themselves. Such commodification is not happening against the wishes of ordinary citizens but because this is what ordinary citizen-consumer want.
  • Look no further than Google’s email and Amazon’s Kindle to see that no one is forced to use them: people do it willingly. Forget laws: it’s only through political activism and a robust intellectual critique of the very ideology of “information consumerism” that underpins such aspirations that we would be able to avert the inevitable disaster.
  • Where could such critique begin? Consider what might, initially, seem like a bizarre parallel: climate change.
  • For much of the 20th century, we assumed that our energy use was priced correctly and that it existed solely in the consumer paradigm of “I can use as much energy as I can pay for.” Under that paradigm, there was no ethics attached to our energy use: market logic has replaced morality – which is precisely what has enabled fast rates of economic growth and the proliferation of consumer devices that have made our households electronic paradises free from tiresome household work.
  • But as we have discovered in the last decade, such thinking rested on a powerful illusion that our energy use was priced correctly – that we in fact paid our fair share.
  • But of course we had never priced our energy use correctly because we never factored in the possibility that life on Earth might end even if we balance all of our financial statements.
  • The point is that, partly due to successful campaigns by the environmental movement, a set of purely rational, market-based decisions have suddenly acquired political latency, which has given us differently designed cars, lights that go off if no one is in the room, and so forth.
  • It has also produced citizens who – at least in theory – are encouraged to think of implications that extend far beyond the ability to pay their electricity bill.
  • Right now, your decision to buy a smart toothbrush with a sensor in it – and then to sell the data that it generates – is presented to us as just a purely commercial decision that affects no one but us.
  • But this is so only because we cannot imagine an information disaster as easily as we can imagine an environmental disaster.
  • there are profound political and moral consequences to information consumerism– and they are comparable to energy consumerism in scope and importance.
  • We should do our best to suspend the seeming economic normalcy of information sharing. An attitude of “just business!” will no longer suffice. Information sharing might have a vibrant market around it but it has no ethical framework to back it up.
  • NSA surveillance, Big Brother, Prism: all of this is important stuff. But it’s as important to focus on the bigger picture -- and in that bigger picture, what must be subjected to scrutiny is information consumerism itself – and not just the parts of the military-industrial complex responsible for surveillance.
  • As long as we have no good explanation as to why a piece of data shouldn’t be on the market, we should forget about protecting it from the NSA, for, even with tighter regulation, intelligence agencies would simply buy – on the open market – what today they secretly get from programs like Prism.
  • Some might say: If only we could have a digital party modeled on the Green Party but for all things digital. A greater mistake is harder to come by.
  • What we need is the mainstreaming of “digital” topics – not their ghettoization in the hands and agendas of the Pirate Parties or whoever will come to succeed them. We can no longer treat the “Internet” as just another domain – like, say, “the economy” or the “environment” – and hope that we can develop a set of competencies around it.
  • Forget an ambiguous goal like “Internet freedom” – it’s an illusion and it’s not worth pursuing. What we must focus on is creating environments where actual freedom can still be nurtured and preserved.
  • The Pirates’s tragic miscalculation was trying to do too much: they wanted to change both the process of politics and its content. That project was so ambitious that it was doomed to failure from the very beginning.
  • whatever reforms the Pirates have been advancing did not seem to stem from some long critical reflections of the pitfalls of the current political system but, rather, from their belief that the political system, incompatible with the most successful digital platforms from Wikipedia to Facebook, must be reshaped in their image. This was – and is – nonsense.
  • A parliament is, in fact, different from Wikipedia – but the success of the latter tells us absolutely nothing about the viability of the Wikipedia model as a template for remodeling our political institutions
  • In as much as the Snowden affair has forced us to confront these issues, it’s been a good thing for democracy. Let’s face it: most of us would rather not think about the ethical implications of smart toothbrushes or the hypocrisy involved in Western rhetoric towards Iran or the genuflection that more and more European leaders show in front of Silicon Valley and its awful, brain-damaging language, the Siliconese.
  • The least we can do is to acknowledge that the crisis is much deeper and that it stems from intellectual causes as much as from legal ones. Information consumerism, like its older sibling energy consumerism, is a much more dangerous threat to democracy than the NSA.
  • anonymous on 05 Aug 13
     
    "The problem with the sick, obsessive superpower revealed to us by Edward Snowden is that it cannot bring itself to utter the one line it absolutely must utter before it can move on: "My name is America and I'm a dataholic.""
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Afghanistan: Why the Taliban are Winning - 0 views

www.stratfor.com/...nistan_why_taliban_are_winning geopolitics afghanistan
shared by anonymous on 01 Sep 10 - Cached
  • Almost 150,000 U.S. and allied troops are now in Afghanistan, some 30,000 more than the number of Soviet troops at the height of their occupation in the 1980s. The U.S.-led International Security Assistance Force (ISAF) is now at the pinnacle of its strength, which is expected to start declining, one way or another, by the latter half of 2011, a trend that will have little prospect of reversing itself. Though history will undoubtedly speak of missed or squandered opportunities in the early years of the U.S. war in Afghanistan, this is now the decisive moment in the campaign.
  • In his analysis, McChrystal made two key assertions: The strategy then being implemented would not succeed, even with more troops. A new counterinsurgency-focused strategy just proposed would not succeed without more troops.
  • When the United States invaded Iraq in 2003, Washington had originally intended to install a stable, pro-American government in Baghdad in order to fundamentally reshape the region. Instead, after the U.S. invasion destroyed the existing Iraqi-Iranian balance of power, Washington found itself on the defensive, struggling to prevent the opposite outcome — a pro-Iranian regime.
  • ...16 more annotations...
  • But the foreign jihadists ultimately overplayed their hand with Iraq’s Sunnis, a decisive factor in their demise. Their attempts to impose a harsh and draconian form of Islamism and the slaying of traditional Sunni tribal leaders cut against the grain of Iraqi cultural and societal norms. In response, beginning well-before the surge of 2007, Sunni Awakening Councils and militias under the Sons of Iraq program were formed to defend against and drive out the foreign jihadists.
  • At the heart of this shift was Sunni self-interest.
  • the strategy relied heavily on capitalizing on a shift already taking place: the realignment of the Sunnis, who not only fed the U.S. actionable intelligence on the foreign jihadists but also became actively engaged in the campaign against them.
  • In Afghanistan, the problem is the opposite. The initial American objective in Afghanistan was to disrupt and destroy al Qaeda, and while certain key individuals remain at large, the apex leadership of what was once al Qaeda has been eviscerated and no longer presents a strategic threat. This physical threat now comes more from al Qaeda “franchises” like al Qaeda in the Arabian Peninsula and al Qaeda in the Islamic Maghreb.
  • Most of what remains of the original al Qaeda prime that the United States set out to destroy in 2001 now resides in Pakistan, not Afghanistan.
  • Despite — or perhaps because of — the remarkably heterogeneous demography of Afghanistan, there is no sectarian card to play. Nor is there a regional rival, as there is in Iraq with Iran, that U.S. grand strategy dictates must be prevented from dominating the country.
  • Faced with a superior force, they declined combat and refused to fight on American terms, only to resurge after American attention shifted to Iraq.) But it is not the Afghan Taliban per se that the United States is opposed to, it is their support for transnational Islamist jihadists — something to which the movement does not necessarily have a deep-seated, non-negotiable commitment.
  • And as a light-infantry force both appropriate for and intimately familiar with the rugged Afghan countryside, the Taliban enjoy superior knowledge of the terrain and people as well as superior intelligence (including intelligence from compromised elements of the Afghan security forces). The Taliban are particularly well-suited for waging a protracted insurgency and they perceive themselves as winning this one — which they are.
  • The Taliban are winning in Afghanistan because they are not losing.
  • The United States is losing because it is not winning. This is the reality of waging a counterinsurgency.
  • First, the core strengths of the Taliban as a guerrilla force are undisputed, and the United States and its allies are unwilling to dedicate the resources and effort necessary to fully defeat it.
  • In reality (if not officially), the end objective now appears to be political accommodation with the Afghan Taliban and their integration into the regime in Kabul.
  • there is no Afghan analogy to the Sunni Awakening in Iraq
  • The underlying point here is that the United States does not intend to defeat the Taliban; it seeks merely to draw them into serious negotiations.
  • The application of military power, as Clausewitz taught, must be both commensurate with the nation’s political objectives and targeted at the enemy’s will to resist.
  • Political accommodation can be the result of both fear and opportunity. Force of arms is meant to provide the former. And the heart of the problem for the U.S.-led effort in Afghanistan is that the counterinsurgency strategy does not target the Taliban directly and relentlessly to create a sense of immediate, visceral and overwhelming threat. By failing to do so, the military means remain not only out of sync with the political objectives but also, given the resources and time the United States is willing to dedicate to Afghanistan, fundamentally incompatible. As an insurgent force, the Taliban is elusive, agile and able to seamlessly maneuver within the indigenous population even if only a portion of the population actively supports it. The Taliban is a formidable enemy. As such, they are making the political outcome appear unachievable by force of arms — or at least the force of arms that political realities and geopolitical constraints dictate.
  • anonymous on 01 Sep 10
     
    "With additional troops committed and a new strategy in place, the U.S.-led International Security Assistance Force (ISAF) is making its last big push to win the war in Afghanistan. But domestic politics in ISAF troop-contributing nations are limiting the sustainability of these deployments while the Taliban maintain the upper hand. It is not at all clear that incompatibilities between political climates in ISAF countries and military imperatives in Afghanistan can ever be overcome. And nothing the coalition has achieved thus far seems to have resonated with the Taliban as a threat so dangerous and pressing it cannot be waited out." At StratFor on September 1, 2010.
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The Real New Deal - 0 views

www.the-american-interest.com/article.cfm money
shared by anonymous on 11 Mar 10 - Cached
  • Money, an item not necessarily intrinsically desirable or usable but serving as a stand-in for the complex wants and valuations of untold individuals, is an unnatural idea that required centuries to take hold.
  • Endism, especially when attached to the sort of nouns we were once prone to capitalize, can become a bad habit when used as anything more than a literary device to call attention to events worthy of it. The Great Depression was certainly worthy of its capital letters; even if nothing exactly ended, plenty changed. But what? And with what, if any relevance for present circumstances?
    • anonymous
      anonymous on 11 Mar 10
       
      Hat Tip to Robin Hanson at Overcoming Bias for pointing me toward this article. http://www.overcomingbias.com/2010/03/great-depression.html
    • anonymous
      anonymous on 26 Mar 10
       
      And this 'endism' is quite present in the current anger over health-care reform. It's not merely a loss, it is elevated to historical travesty.
  • Whether we realize it or not, we are still reacting to those portrayals more than we are to the actions themselves. What really changed was the way the world’s elite thought of themselves and their institutions.
    • anonymous
      anonymous on 26 Mar 10
       
      This falls under the category of "lies we tell ourselves." Of course, less cynically, we can call it the standard act of national mythmaking. It's akin to the fact that humans remember what they *need* to remember, not what was.
  • ...26 more annotations...
  • In crude political form, this Whiggish inclination toward progress was encapsulated in the functionalist view retailed by Norman Angell around the turn of the last century, which held that countries that traded with each other would develop economic self-interests too intertwined to justify war.
    • anonymous
      anonymous on 11 Mar 10
       
      This strikes me as something generally true, but not necessarily a truism. Libertarians will often postulate the "trade kills war" argument, without appreciating that it's not an iron-clad law or even - necessarily - the most likely outcome. It strikes me as more a naive, though admirable, conceit of what they *wish* as opposed to what IS.
  • If markets had come to play a more prominent part in the industrial West, it was not because markets had just been invented. It was because social and political systems had evolved in which powerful elites were willing to tolerate institutions that diffused economic power and weakened the state at the expense of private enterprise. This was the core meaning of liberalism in its original formulation.
  • The Crash of 1929, the subsequent economic slump and, particularly, the duration of the Depression took most contemporaries completely by surprise. Indeed, the uniquely severe catastrophe of the 1930s is so unusual that modern analysts should be cautious in drawing lessons from it.
    • anonymous
      anonymous on 26 Mar 10
       
      One way in which we fundamentally misunderstand a time period is in projecting our current political definitions on a period in gross violation of the political norms of the time.
  • Conventional wisdom tends to treat President Hoover as a clueless advocate of laissez faire who refused to stimulate the economy in the dramatic downturn. Franklin Roosevelt, on the other hand, was the heroic leader who both saved the day and transformed the American economy through his promotion of the New Deal. Conventional wisdom is still very much with us.
  • Hoover did not advocate “do-nothing” policies.
  • Roosevelt’s interventions were neither as thorough nor as systematically revolutionary as they have often been portrayed.
  • Above all, FDR’s worst policies were animated by a desire to repress business, by distrust of competition and a general disdain for the market. Those were, of course, precisely the qualities that made his policies extremely popular. FDR’s economic policies scored mixed successes at best, but his political strategy succeeded by any measure long before U.S. entry into World War II, and subsequent generations have not ceased to conflate the former with the latter.
  • So thoroughly has the West taken for granted the triumph of the more abstract liberal nation-state that its denizens must remind themselves how fragile its origins were and how little emotional loyalty it has commanded.
  • Even in America, where visceral support for individualism and self-reliance remains strong, this has always been so. In good times, economic systems are supported by inertia and utilitarian compromise that appeal to the broad center. In hard times abstract convictions tend to melt away. The American preference for the free market is neither as common nor as “American” as many suppose.
    • anonymous
      anonymous on 26 Mar 10
       
      But our identities are inventions and are mostly divorced from a close reading of history. As America nears a genuine crisis point, the current phenomenon of the "Tea Party" is going to be less relevant. It will eventually become "quaint" and irrelevant. At least, that is my hope (and current Generational prediction).
  • Seen as a reversion to older habits, the odd mix of regulation, make-work, intervention, protectionism, nationalism and (as in Germany and elsewhere) anti-Semitism that characterized the Western policy response to the Depression suddenly seems less like an incoherent flaying in all directions and more like elements of a uniform retrenchment in social relations.
    • anonymous
      anonymous on 26 Mar 10
       
      Which is why the narratives don't stick on a closer read.
  • It seems odd that humans in their day-to-day interactions think of buying or selling as the most natural of activities, recreating markets unprompted in the most dismal of circumstances. Yet there is something about the ideology of a market system, or of any generally decentralized order, that seems inconceivable to most people.
  • Economists have a hard time dealing with nationalism.
    • anonymous
      anonymous on 26 Mar 10
       
      Again: Nationalism - in its current form - is a modern social invention.
  • A severe economic crisis implicates the entire system of political economy, regardless of how narrow the source of that crisis may be. Thus those with long-simmering fears and resentments—as well as those with more venal or ideological motives—see crisis as an opportunity to strike out at the system.
  • Anti-market movements, whether pushed by Populists or Progressives in the United States or the various forms of socialism in Europe, took for granted that vigorous political action was the only way to impose order and bring social harmony to an unfettered market economy. But the specific remedies and the zeal with which reformers sought to repudiate the past belie ideological origins more than technocratic ones.
  • He had mastered the politics of trust.
  • Roosevelt deserves credit for largely resisting these ideological enthusiasms. On balance, he dealt with the crisis pragmatically and forthrightly.
  • If FDR had left out the high-flying rhetoric and only pursued an attenuated New Deal—namely the financial policies that economists now agree truly helped us out of the Depression—would he be as celebrated a figure as he is today? Not likely.
  • The end of World War II furnishes still more evidence that political images leave a wider trace in historical memory than actual policies.
  • Thanks to Truman we were once again moving in the direction of a competitive, open-access market economy. Had there been a lingering recession and a continuation of older, harmful regulations into the 1946–48 period, Truman, not his predecessor, would have been blamed. Yet Truman’s stellar reputation today owes nothing to his economic achievements, which most of those who today praise his foreign policy acumen know nothing about.
    • anonymous
      anonymous on 26 Mar 10
       
      I'll raise my hand on this one. Even with my better-than-nothing knowledge of US history, I knew nothing about this.
    • anonymous
      anonymous on 26 Mar 10
       
      They weren't in the stories I learned about.
  • In any event, we would do well to bear in mind how important, yet also how unnatural, the modern system of impersonal finance and trade really is. If we would preserve that system as a basis for our prosperity, we must recognize that many of the regulatory solutions we apply to our current crisis may themselves induce responses that can generate new crises. History suggests, too, that fears of the market and the political pressures it generates will wax and wane as crises deepen or ease. Patience and prudence are, therefore, the best watchwords for government amid the many trials and errors we will surely endure in the months, and perhaps years, ahead.
  • Indeed, many of his interventions—for example, his attempts to balance the budget by raising taxes in 1932, and strengthening support for the gold standard—worsened the economy for reasons orthodox theory would have predicted. On the other hand, Hoover initiated the Reconstruction Finance Corporation to support failed banks, to fund public works, subsidize state relief and otherwise engage in policies that presaged the widely praised interventions of the Roosevelt era.
  • Economic historians stress that it was in the realm of monetary and not fiscal policy that FDR had the most success.
    • anonymous
      anonymous on 26 Mar 10
       
      I can't even tell you the difference between those two things. I would venture to guess that a *lot* of people with strong convictions about government intrusion can't either.
  • What is one to make of the widespread popularity of protectionism and high tariffs throughout the Western world? Nationalist policies of every stripe, whether in the form of cartelization of industry in the United States or of more widespread regulation and control in Europe, especially in Germany, were not natural accompaniments to any neutral, technocratic view of recovery.
  • large-scale systems based on anonymous exchange were a recent phenomenon.
    • anonymous
      anonymous on 26 Mar 10
       
      We have a stubborn inability to understand that businesses are technologies like anything else we create. A chief conceit of neocons is the idea that our current economic system is somehow closer to a blank slate than those with more government power. Since it is our corporate system that is the "newish" thing, it puts supporters on the right in the uncomfortable position of being Progressives of at least one stripe.
  • The current Chair of the Council of Economic Advisors, Christina Romer, wrote in her widely cited article, “What Ended the Great Depression?” (1992), that “unusual fiscal policy contributed almost nothing to the recovery from the Great Depression.” The consensus view is that FDR’s policy success was the abandonment of the gold standard in 1933.
  • Harry Truman left office in 1953 a very unpopular man. Almost no one at the time gave him credit for overseeing a period of rapid recovery that was much broader and more impressive than anything that happened under Roosevelt’s tenure—and this at a time when most economists predicted a deep postwar recession.
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How to Turn Republicans and Democrats Into Americans - 2 views

www.theatlantic.com/...8521 politics partisan republican democrat america
shared by anonymous on 24 Jun 11 - Cached
  • When Democrat Nancy Pelosi became speaker of the House, the leader of the lawmaking branch of government, she said her priority was to … elect more Democrats. After Republican victories in 2010, the Senate Republican leader Mitch McConnell said his goal was to … prevent the Democratic president’s reelection. With the country at war and the economy in recession, our government leaders’ first thoughts have been of party advantage.
  • Ours is a system focused not on collective problem-solving but on a struggle for power between two private organizations.
    • anonymous
      anonymous on 24 Jun 11
       
      That modern parties vote in party-first ways is not an accident, yes. But, I'm not convinced that the unintended consequences of our political parties was something other than an accident. That point isn't well made enough.
  • What we have today is not a legacy of 1789 but an outdated relic of the late 1800s and early 1900s, when Progressives pushed for the adoption of primary elections.
  • ...28 more annotations...
  • the primaries, and the nominating conventions, were open only to party members. This reform was supposed to give citizens a bigger role in the election process. Instead, the influence of party leaders has been supplanted by that of a subset of party activists who are often highly ideological and largely uninterested in finding common ground.
  • Americans demand a multiplicity of options in almost every other aspect of our lives. And yet we allow small bands of activists to limit our choices of people to represent us in making the nation’s laws.
    • anonymous
      anonymous on 24 Jun 11
       
      However, *too* many options paralyzes us. This is standard choice/marketing stuff, but I see how, if you tilt your head, something like this would seem inevitable.
  • I am not calling for a magical political “center”
  • Nor am I pleading for consensus
  • And I’m not pushing for harmony
  • The problem is not division but partisanship—advantage-seeking by private clubs whose central goal is to win political power. There are different ways to conduct elections and manage our government—and strengthen the democratic process. Here are some suggestions designed to turn our political system on its head, so that people, not parties, control our government.
    • anonymous
      anonymous on 24 Jun 11
       
      I wonder if, with the best of intentions, partisans slowly conflate the party with the nation until it wouldn't dawn on them to consider themselves seeking party favor first, and nation second.
  • Break the power of partisans to keep candidates off the general-election ballot.
  • Because activists who demand loyalty and see compromising as selling out dominate party primaries and conventions, candidates who seek their permission to be on the November ballot find themselves under great pressure to take hard-line positions. This tendency toward rigidity—and the party system that enables it—is at the root of today’s political dysfunction.
  • As a result, members of Congress would have greater freedom to base their legislative decisions on their constituents’ concerns and on their own independent evaluations of a proposal’s merits. They would be our representatives, not representatives of their political clubs.
  • Turn over the process of redrawing congressional districts to independent, nonpartisan commissions.
  • Although legislative majorities continue to draw district lines in most states, 13 states (most recently, California) have established nonpartisan or bipartisan redistricting commissions, and two additional states have created merely “advisory” commissions. The systems vary—some use commissions to propose plans that legislatures must approve; others strip the legislature of all redistricting authority—but each of the 13 recognizes that the partisan drawing of congressional-district boundaries has hurt the democratic process, leaving elected officials dependent on, and beholden to, the party bosses who draw their districts.
  • Allow members of any party to offer amendments to any House bill and—with rare exceptions—put those amendments to a vote.
  • “closed” rules, preventing members from offering amendments, simply tell citizens their preferences don’t matter.
  • Speaker John Boehner deserves credit for promising greater opportunities for the minority party to have its amendments considered. Under his speakership, the Republican-dominated House has actually accepted some Democratic amendments.
  • The House should adopt rules guaranteeing that any proposal receiving a significant level of support—say, 100 co-sponsors—would automatically be allowed a committee hearing, an up-or-down vote in committee, and then, even if it fails in committee, a vote on the House floor.
  • Change the leadership structure of congressional committees.
  • We should change congressional rules to provide for a chairman from the majority party and a vice chairman from the minority (no such position exists in today’s Congress, except on certain special non-legislating committees); the vice chairman need not ascend to the chairmanship in the chairman’s absence, but each would have the authority to bring a bill forward and to invite expert witnesses to offer testimony. The process might be slower, but consideration of alternatives would be more thorough.
  • The current committee process is transactional, not deliberative.
    • anonymous
      anonymous on 24 Jun 11
       
      Translation: "What can *we* get?"
  • Fill committee vacancies by lot.
  • The derivation of leadership in Congress from an internal version of the party primary or convention is an artificial construct. In every informal congressional subgroup—the Human Rights Caucus, the Rust Belt Caucus, the Flat Tax Caucus—leaders are chosen without regard to party affiliation.
  • Imagine how different the congressional dynamic would be if that practice prevailed in committee assignments.
  • They would be freer to vote as they saw fit.
  • Choose committee staff solely on the basis of professional qualifications.
  • But if the goal is to legislate for the country, not for a party, then committee staff members should be selected by a nonpartisan House or Senate administrator and obligated to serve all members equally without regard to party agenda.
  • The Constitution grants Congress most of the federal government’s real powers—to spend, tax, create federal programs, declare war, approve treaties, confirm federal court appointments.
  • By thinking of the House and Senate in constitutional rather than partisan terms, we would eliminate party-driven links between Congress and the president and avoid the spectacle of legislative leaders acting as though they were either members of the president’s staff or his sworn enemies.
  • Our current political dysfunction is not inevitable; it results from deliberate decisions that have backfired and left us mired in the trenches of hyper-partisan warfare.
  • The goal is not to destroy parties but to transcend them; to welcome their contributions but end their dominance; and to take back from these private clubs control of our own elections and our own Congress.
    • anonymous
      anonymous on 24 Jun 11
       
      This is a really good read. Quite layman-friendly and concise. Without knowing more about the deeper mechanics of the government's procedure, it all (at least) seems quite plausible. When I started reading this, I thought I'd be buried under polemic, but this has almost an engineer's eye. An insider looks at the structure he's been within and thinks, "hmmm, we can fix it. Adjust here, here, and here." Which is not to say that these bullet-point items would be a hard solution, but they could be tweaks that move us in an *improved* direction.
  • anonymous on 24 Jun 11
     
    Thanks to Erik Hanson for the pointer. With a reminder from Ian Dorsch. Wishful thinking? Maybe. But I'd like to try any approach that hastens the departure of the uglier elements of American political shouting. From the Atlantic. "ANGRY AND FRUSTRATED, American voters went to the polls in November 2010 to "take back" their country. Just as they had done in 2008. And 2006. And repeatedly for decades, whether it was Republicans or Democrats from whom they were taking the country back. No matter who was put in charge, things didn't get better. They won't this time, either; spending levels may go down, taxes may go up, budgets will change, but American government will go on the way it has, not as a collective enterprise but as a battle between warring tribes."
36More

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."
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The Inequality That Matters - 1 views

www.the-american-interest.com/article-bd.cfm
shared by anonymous on 07 Jul 13 - Cached
  • there’s more confusion about this issue than just about any other in contemporary American political discourse.
  • The reality is that most of the worries about income inequality are bogus, but some are probably better grounded and even more serious than even many of their heralds realize. If our economic churn is bound to throw off political sparks, whether alarums about plutocracy or something else, we owe it to ourselves to seek out an accurate picture of what is really going on.
  • Let’s start with the subset of worries about inequality that are significantly overblown.
  • ...107 more annotations...
  • Most analyses of income inequality neglect two major points.
  • First, the inequality of personal well-being is sharply down over the past hundred years and perhaps over the past twenty years as well.
  • by broad historical standards, what I share with Bill Gates is far more significant than what I don’t share with him.
  • Compare these circumstances to those of 1911, a century ago. Even in the wealthier countries, the average person had little formal education, worked six days a week or more, often at hard physical labor, never took vacations, and could not access most of the world’s culture.
  • when average people read about or see income inequality, they don’t feel the moral outrage that radiates from the more passionate egalitarian quarters of society. Instead, they think their lives are pretty good and that they either earned through hard work or lucked into a healthy share of the American dream.
  • In narrowly self-interested terms, that view may be irrational, but most Americans are unwilling to frame national issues in terms of rich versus poor.
  • There’s a great deal of hostility toward various government bailouts, but the idea of “undeserving” recipients is the key factor in those feelings. Resentment against Wall Street gamesters hasn’t spilled over much into resentment against the wealthy more generally.
  • their constituents bear no animus toward rich people, only toward undeservedly rich people.
    • anonymous
      anonymous on 07 Jul 13
       
      Which is how the policy can be reframed to the benefit of those that understand this more cleanly.
  • in the United States, most economic resentment is not directed toward billionaires or high-roller financiers—not even corrupt ones. It’s directed at the guy down the hall who got a bigger raise.
    • anonymous
      anonymous on 07 Jul 13
       
      Provincialism!
  • The high status of the wealthy in America, or for that matter the high status of celebrities, seems to bother our intellectual class most. That class composes a very small group, however
  • All that said, income inequality does matter—for both politics and the economy.
  • To see how, we must distinguish between inequality itself and what causes it. But first let’s review the trends in more detail.
  • Income inequality has been rising in the United States, especially at the very top.
  • The data show a big difference between two quite separate issues
  • income growth at the very top
  • greater inequality throughout the distribution
  • When it comes to the first trend, the share of pre-tax income earned by the richest 1 percent of earners has increased from about 8 percent in 1974 to more than 18 percent in 2007. Furthermore, the richest 0.01 percent (the 15,000 or so richest families) had a share of less than 1 percent in 1974 but more than 6 percent of national income in 2007. As noted, those figures are from pre-tax income, so don’t look to the George W. Bush tax cuts to explain the pattern. Furthermore, these gains have been sustained and have evolved over many years, rather than coming in one or two small bursts between 1974 and today.1
  • Caution is in order, but the overall trend seems robust. Similar broad patterns are indicated by different sources, such as studies of executive compensation. Anecdotal observation suggests extreme and unprecedented returns earned by investment bankers, fired CEOs, J.K. Rowling and Tiger Woods.
  • At the same time, wage growth for the median earner has slowed since 1973.
  • But that slower wage growth has afflicted large numbers of Americans, and it is conceptually distinct from the higher relative share of top income earners. For instance, if you take the 1979–2005 period, the average incomes of the bottom fifth of households increased only 6 percent while the incomes of the middle quintile rose by 21 percent. That’s a widening of the spread of incomes, but it’s not so drastic compared to the explosive gains at the very top.
  • The broader change in income distribution, the one occurring beneath the very top earners, can be deconstructed in a manner that makes nearly all of it look harmless. For instance, there is usually greater inequality of income among both older people and the more highly educated, if only because there is more time and more room for fortunes to vary.
  • Since America is becoming both older and more highly educated, our measured income inequality will increase pretty much by demographic fiat.
  • Economist Thomas Lemieux at the University of British Columbia estimates that these demographic effects explain three-quarters of the observed rise in income inequality for men, and even more for women.2
  • Attacking the problem from a different angle, other economists are challenging whether there is much growth in inequality at all below the super-rich. For instance, real incomes are measured using a common price index, yet poorer people are more likely to shop at discount outlets like Wal-Mart, which have seen big price drops over the past twenty years.3 Once we take this behavior into account, it is unclear whether the real income gaps between the poor and middle class have been widening much at all.
  • And so we come again to the gains of the top earners, clearly the big story told by the data.
  • It’s worth noting that over this same period of time, inequality of work hours increased too. The top earners worked a lot more and most other Americans worked somewhat less. That’s another reason why high earners don’t occasion more resentment: Many people understand how hard they have to work to get there.
  • A threshold earner is someone who seeks to earn a certain amount of money and no more.
  • If wages go up, that person will respond by seeking less work or by working less hard or less often. That person simply wants to “get by” in terms of absolute earning power in order to experience other gains in the form of leisure—whether spending time with friends and family, walking in the woods and so on. Luck aside, that person’s income will never rise much above the threshold.
  • It’s not obvious what causes the percentage of threshold earners to rise or fall, but it seems reasonable to suppose that the more single-occupancy households there are, the more threshold earners there will be, since a major incentive for earning money is to use it to take care of other people with whom one lives.
  • For a variety of reasons, single-occupancy households in the United States are at an all-time high.
  • The funny thing is this: For years, many cultural critics in and of the United States have been telling us that Americans should behave more like threshold earners. We should be less harried, more interested in nurturing friendships, and more interested in the non-commercial sphere of life. That may well be good advice.
  • Many studies suggest that above a certain level more money brings only marginal increments of happiness.
  • What isn’t so widely advertised is that those same critics have basically been telling us, without realizing it, that we should be acting in such a manner as to increase measured income inequality.
  • Why is the top 1 percent doing so well?
  • Their data do not comprise the entire U.S. population, but from partial financial records they find a very strong role for the financial sector in driving the trend toward income concentration at the top.
  • The number of Wall Street investors earning more than $100 million a year was nine times higher than the public company executives earning that amount.
  • The authors also relate that they shared their estimates with a former U.S. Secretary of the Treasury, one who also has a Wall Street background. He thought their estimates of earnings in the financial sector were, if anything, understated.
  • Many of the other high earners are also connected to finance.
  • After Wall Street, Kaplan and Rauh identify the legal sector as a contributor to the growing spread in earnings at the top.
  • Finance aside, there isn’t much of a story of market failure here, even if we don’t find the results aesthetically appealing.
  • When it comes to professional athletes and celebrities, there isn’t much of a mystery as to what has happened.
  • There is more purchasing power to spend on children’s books and, indeed, on culture and celebrities more generally. For high-earning celebrities, hardly anyone finds these earnings so morally objectionable as to suggest that they be politically actionable.
  • We may or may not wish to tax the wealthy, including wealthy celebrities, at higher rates, but there is no need to “cure” the structural causes of higher celebrity incomes.
  • If we are looking for objectionable problems in the top 1 percent of income earners, much of it boils down to finance and activities related to financial markets. And to be sure, the high incomes in finance should give us all pause.
  • some investors opt for a strategy of betting against big, unexpected moves in market prices.
  • Most of the time investors will do well by this strategy, since big, unexpected moves are outliers by definition. Traders will earn above-average returns in good times. In bad times they won’t suffer fully when catastrophic returns come in, as sooner or later is bound to happen, because the downside of these bets is partly socialized onto the Treasury, the Federal Reserve and, of course, the taxpayers and the unemployed.
  • To understand how this strategy works, consider an example from sports betting.
  • if you bet against unlikely events, most of the time you will look smart and have the money to validate the appearance. Periodically, however, you will look very bad
  • Does that kind of pattern sound familiar? It happens in finance, too. Betting against a big decline in home prices is analogous to betting against the Wizards. Every now and then such a bet will blow up in your face, though in most years that trading activity will generate above-average profits and big bonuses for the traders and CEOs. To this mix we can add the fact that many money managers are investing other people’s money.
  • If you plan to stay with an investment bank for ten years or less, most of the people playing this investing strategy will make out very well most of the time. Everyone’s time horizon is a bit limited and you will bring in some nice years of extra returns and reap nice bonuses.
  • And let’s say the whole thing does blow up in your face? What’s the worst that can happen? Your bosses fire you, but you will still have millions in the bank and that MBA from Harvard or Wharton.
  • For the people actually investing the money, there’s barely any downside risk other than having to quit the party early.
  • Moreover, smart shareholders will acquiesce to or even encourage these gambles.
  • They gain on the upside, while the downside, past the point of bankruptcy, is borne by the firm’s creditors.
  • Perhaps more important, government bailouts minimize the damage to creditors on the downside.
  • Neither the Treasury nor the Fed allowed creditors to take any losses from the collapse of the major banks during the financial crisis. The U.S. government guaranteed these loans, either explicitly or implicitly.
  • For better or worse, we’re handing out free options on recovery, and that encourages banks to take more risk in the first place.
  • In short, there is an unholy dynamic of short-term trading and investing, backed up by bailouts and risk reduction from the government and the Federal Reserve. This is not good.
  • But more immediate and more important, it means that banks take far too many risks and go way out on a limb, often in correlated fashion. When their bets turn sour, as they did in 2007–09, everyone else pays the price.
  • And it’s not just the taxpayer cost of the bailout that stings. The financial disruption ends up throwing a lot of people out of work down the economic food chain, often for long periods.
  • In essence, we’re allowing banks to earn their way back by arbitraging interest rate spreads against the U.S. government. This is rarely called a bailout and it doesn’t count as a normal budget item, but it is a bailout nonetheless. This type of implicit bailout brings high social costs by slowing down economic recovery (the interest rate spreads require tight monetary policy) and by redistributing income from the Treasury to the major banks.
  • The more one studies financial theory, the more one realizes how many different ways there are to construct a “going short on volatility” investment position.
  • In some cases, traders may not even know they are going short on volatility. They just do what they have seen others do. Their peers who try such strategies very often have Jaguars and homes in the Hamptons. What’s not to like?
  • The upshot of all this for our purposes is that the “going short on volatility” strategy increases income inequality.
  • In normal years the financial sector is flush with cash and high earnings. In implosion years a lot of the losses are borne by other sectors of society. In other words, financial crisis begets income inequality. Despite being conceptually distinct phenomena, the political economy of income inequality is, in part, the political economy of finance.
  • If you’re wondering, right before the Great Depression of the 1930s, bank profits and finance-related earnings were also especially high.8
  • There’s a second reason why the financial sector abets income inequality: the “moving first” issue.
  • The moving-first phenomenon sums to a “winner-take-all” market. Only some relatively small number of traders, sometimes just one trader, can be first. Those who are first will make far more than those who are fourth or fifth.
  • Since gains are concentrated among the early winners, and the closeness of the runner-ups doesn’t so much matter for income distribution, asset-market trading thus encourages the ongoing concentration of wealth. Many investors make lots of mistakes and lose their money, but each year brings a new bunch of projects that can turn the early investors and traders into very wealthy individuals.
  • These two features of the problem—“going short on volatility” and “getting there first”—are related.
  • Still, every now and then Goldman will go bust, or would go bust if not for government bailouts. But the odds are in any given year that it won’t because of the advantages it and other big banks have.
  • It’s as if the major banks have tapped a hole in the social till and they are drinking from it with a straw.
  • In any given year, this practice may seem tolerable—didn’t the bank earn the money fair and square by a series of fairly normal looking trades?
  • Yet over time this situation will corrode productivity, because what the banks do bears almost no resemblance to a process of getting capital into the hands of those who can make most efficient use of it.
  • And it leads to periodic financial explosions. That, in short, is the real problem of income inequality we face today. It’s what causes the inequality at the very top of the earning pyramid that has dangerous implications for the economy as a whole.
  • A key lesson to take from all of this is that simply railing against income inequality doesn’t get us very far.
  • We have to find a way to prevent or limit major banks from repeatedly going short on volatility at social expense. No one has figured out how to do that yet.
  • It remains to be seen whether the new financial regulation bill signed into law this past summer will help.
  • The bill does have positive features.
  • First, it forces banks to put up more of their own capital, and thus shareholders will have more skin in the game, inducing them to curtail their risky investments.
  • Second, it also limits the trading activities of banks, although to a currently undetermined extent (many key decisions were kicked into the hands of future regulators).
  • Third, the new “resolution authority” allows financial regulators to impose selective losses, for instance, to punish bondholders if they wish.
  • We’ll see if these reforms constrain excess risk-taking in the long run. There are reasons for skepticism.
  • Most of all, the required capital cushions simply aren’t that high, so a big enough bet against unexpected outcomes still will yield more financial upside than downside
  • What about controlling bank risk-taking directly with tight government oversight? That is not practical. There are more ways for banks to take risks than even knowledgeable regulators can possibly control
  • It’s also not clear how well regulators can identify risky assets.
  • Some of the worst excesses of the financial crisis were grounded in mortgage-backed assets—a very traditional function of banks—not exotic derivatives trading strategies.
  • Virtually any asset position can be used to bet long odds, one way or another. It is naive to think that underpaid, undertrained regulators can keep up with financial traders, especially when the latter stand to earn billions by circumventing the intent of regulations while remaining within the letter of the law.
  • For the time being, we need to accept the possibility that the financial sector has learned how to game the American (and UK-based) system of state capitalism.
  • It’s no longer obvious that the system is stable at a macro level, and extreme income inequality at the top has been one result of that imbalance. Income inequality is a symptom, however, rather than a cause of the real problem.
  • The root cause of income inequality, viewed in the most general terms, is extreme human ingenuity, albeit of a perverse kind. That is why it is so hard to control.
  • Another root cause of growing inequality is that the modern world, by so limiting our downside risk, makes extreme risk-taking all too comfortable and easy.
  • More risk-taking will mean more inequality, sooner or later, because winners always emerge from risk-taking.
  • Yet bankers who take bad risks (provided those risks are legal) simply do not end up with bad outcomes in any absolute sense.
  • We’re not going to bring back torture, trial by ordeal or debtors’ prisons, nor should we. Yet the threat of impoverishment and disgrace no longer looms the way it once did, so we no longer can constrain excess financial risk-taking. It’s too soft and cushy a world.
  • That’s an underappreciated way to think about our modern, wealthy economy: Smart people have greater reach than ever before, and nothing really can go so wrong for them.
  • How about a world with no bailouts? Why don’t we simply eliminate the safety net for clueless or unlucky risk-takers so that losses equal gains overall? That’s a good idea in principle, but it is hard to put into practice.
  • Once a financial crisis arrives, politicians will seek to limit the damage, and that means they will bail out major financial institutions.
  • Had we not passed TARP and related policies, the United States probably would have faced unemployment rates of 25 percent of higher, as in the Great Depression. The political consequences would not have been pretty.
  • Bank bailouts may sound quite interventionist, and indeed they are, but in relative terms they probably were the most libertarian policy we had on tap. It meant big one-time expenses, but, for the most part, it kept government out of the real economy (the General Motors bailout aside).
  • So what will happen next?
  • One worry is that banks are currently undercapitalized and will seek out or create a new bubble within the next few years, again pursuing the upside risk without so much equity to lose.
  • A second perspective is that banks are sufficiently chastened for the time being but that economic turmoil in Europe and China has not yet played itself out, so perhaps we still have seen only the early stages of what will prove to be an even bigger international financial crisis.
  • A third view is perhaps most likely. We probably don’t have any solution to the hazards created by our financial sector, not because plutocrats are preventing our political system from adopting appropriate remedies, but because we don’t know what those remedies are.
  • Yet neither is another crisis immediately upon us. The underlying dynamic favors excess risk-taking, but banks at the current moment fear the scrutiny of regulators and the public and so are playing it fairly safe.
  • They are sitting on money rather than lending it out. The biggest risk today is how few parties will take risks, and, in part, the caution of banks is driving our current protracted economic slowdown. According to this view, the long run will bring another financial crisis once moods pick up and external scrutiny weakens, but that day of reckoning is still some ways off.
  • Is the overall picture a shame? Yes. Is it distorting resource distribution and productivity in the meantime? Yes. Will it again bring our economy to its knees? Probably. Maybe that’s simply the price of modern society. Income inequality will likely continue to rise and we will search in vain for the appropriate political remedies for our underlying problems.
    • anonymous
      anonymous on 07 Jul 13
       
      Painfully straightforward.
  • anonymous on 07 Jul 13
     
    "Does growing wealth and income inequality in the United States presage the downfall of the American republic? Will we evolve into a new Gilded Age plutocracy, irrevocably split between the competing interests of rich and poor? Or is growing inequality a mere bump in the road, a statistical blip along the path to greater wealth for virtually every American? Or is income inequality partially desirable, reflecting the greater productivity of society's stars?"
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The Very Angry Tea Party - 0 views

opinionator.blogs.nytimes.com/...the-very-angry-tea-party criticalthinking media politics
shared by anonymous on 14 Jun 10 - Cached
  • The seething anger that seems to be an indigenous aspect of the Tea Party movement arises, I think, at the very place where politics and metaphysics meet, where metaphysical sentiment becomes political belief.
  • When it comes to the Tea Party’s concrete policy proposals, things get fuzzier and more contradictory: keep the government out of health care, but leave Medicare alone; balance the budget, but don’t raise taxes; let individuals take care of themselves, but leave Social Security alone; and, of course, the paradoxical demand not to support Wall Street, to let the hard-working producers of wealth get on with it without regulation and government stimulus, but also to make sure the banks can lend to small businesses and responsible homeowners in a stable but growing economy. 
  • Mark Lilla argued that the hodge-podge list of animosities Tea party supporters mention fail to cohere into a body of political grievances in the conventional sense: they lack the connecting thread of achieving political power. 
  • ...14 more annotations...
  • What Lilla cannot account for, and what no other commentator I have read can explain, is the passionate anger of the Tea Party movement, or, the flip-side of that anger, the ease with which it succumbs to the most egregious of fear-mongering falsehoods. 
  • My hypothesis is that what all the events precipitating the Tea Party movement share is that they demonstrated, emphatically and unconditionally, the depths of the absolute dependence of us all on government action, and in so doing they undermined the deeply held fiction of individual autonomy and self-sufficiency that are intrinsic parts of Americans’ collective self-understanding. 
  • they would be politically acceptable only to the degree to which they remained invisible
  • Tea Party anger is, at bottom, metaphysical, not political: what has been undone by the economic crisis is the belief that each individual is metaphysically self-sufficient, that  one’s very standing and being as a rational agent owes nothing to other individuals or institutions. 
  • Each of these social arrangements articulate and express the value and the authority of the individual; they give to the individual a standing she would not have without them.
  • If stated in enough detail, all these institutions and practices should be seen as together manufacturing, and even inventing, the idea of a sovereign individual who becomes, through them and by virtue of them, the ultimate source of authority. 
  • is individual autonomy an irreducible metaphysical given  or a social creation?
  • It is by recognizing one another as autonomous subjects through the institutions of family, civil society and the state that we become such subjects
  • Hegel’s thesis is that all social life is structurally akin to the conditions of love and friendship; we are all bound to one another as firmly as lovers are, with the terrible reminder that the ways of love are harsh, unpredictable and changeable. 
  • because you are the source of my being, when our love goes bad I am suddenly, absolutely dependent on someone for whom I no longer count and who I no longer know how to count; I am exposed, vulnerable, needy, unanchored and without resource. 
  • This is the rage and anger I hear in the Tea Party movement; it is the sound of jilted lovers furious that the other — the anonymous blob called simply “government” — has suddenly let them down, suddenly made clear that they are dependent and limited beings, suddenly revealed them as vulnerable.
  • All the rhetoric of self-sufficiency, all the grand talk of wanting to be left alone is just the hollow insistence of the bereft lover that she can and will survive without her beloved
  • About this imaginary, Mark Lilla was right: it corresponds to no political vision, no political reality.  The great and inspiring metaphysical fantasy of independence and freedom is simply a fantasy of destruction. 
  • In truth, there is nothing that the Tea Party movement wants; terrifyingly, it wants nothing.  Lilla calls the Tea Party “Jacobins”; I would urge that they are nihilists. 
  • anonymous on 14 Jun 10
     
    By J.M. Bernstein (Opinionator Blog) at NYTimes.com on June 13, 2010.
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