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Turkey's Challenge - 0 views

  • TWO EVENTS OCCURRED ON THURSDAY that involved Turkey. In the first, the U.S. House Committee on Foreign Affairs forwarded a resolution to the House floor for full debate, which called for the condemning of Turkish actions in what many Armenians refer to as the 1915 genocide. The response from the Turkish Foreign Ministry was vitriolic, complete with an ambassadorial recall and threats to downgrade Turkish-American relations at a time when the Americans sorely need Turkish help in Iraq and Afghanistan.
  • Here at STRATFOR these developments generated a bit of a “hmmm.”
  • The core territory of the Ottoman Empire of the past — as well as the Turkey of today — is a crescent of land on the northwest shore of the Anatolian peninsula, including all of the lands that touch the Sea of Marmara. In many ways it is a mini-Mediterranean. It is rich in fertile land, has a maritime culture and wealth that comes from trade. It is a natural birthplace for a powerful nation, and in time it became the seat of an empire.
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  • This expansion left the Turks in a bit of a quandary. The size of their conquered territories was now larger than their home territories. The wealth of their conquered territories was potentially larger than that of their home territories. The population of their conquered territories was comprised of different nationalities and religions, and combined was larger than that of their home territories. The Turks very quickly came to the uncomfortable realization that they not only needed their conquered peoples to make their empire functional, but that they needed those conquered peoples to be willing participants in the empire. The Ottomans may have started out as Middle Eastern, but their early successes made them European.
  • And it was all held together by a governing concept the Turks called suzerainty: regional governments would pay taxes to the center and defer to Istanbul on all issues of foreign and military policy, but would control the bulk of their own local affairs.
  • After more than 90 years of being in a geopolitical coma, the Turks are on the move again, and are deciding what sort of power they hope to become. Within that debate are two choices.
  • The first would herald a “Great Turkey” rooted in the founding of the Turkish Republic that celebrates its Turkish-ness.
  • The second would herald a “Greater Turkey,” a multinational federation in which the Turks are the first-among-equals, but in which they are hardly alone.
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Obama's Pending Foreign Policy Agenda - 0 views

  • As this major domestic issue moves out of the spotlight, it will free up some time for Obama to address other items, such as foreign policy. Several issues will require his presidential attention
  • The United States sees a glaring trade imbalance with the Chinese as the biggest roadblock standing in the way of more rapid economic growth, while Beijing views Obama’s new export initiative with caution.
  • Iran: The country that had the most potential to draw the United States into yet another Middle East war during Obama’s first year in office is happy to watch from the sidelines as Israel struggles on the Iranian and Palestinian fronts vis-a-vis the United States.
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  • Israel: The Tuesday meeting scheduled to take place in Washington between Obama and Israeli Prime Minister Benjamin Netanyahu will occur when American-Israeli relations are at one of the lowest points they have been in years, perhaps decades.
  • Russia: One country that has been delighted to read about the United States’ problems with China and Iran is Russia. It has seized the opportunity to operate in its near abroad and continue upon its mission of resurging into the former Soviet periphery.
  • Russia knows that U.S. commitments in the Middle East will not last much longer, and with the possibility of a more foreign policy-focused American president who can more actively resist Russian advances now on the table, Russia may see a need to speed up the course of events.
  • Possibly seeking to exploit the growing rift between the United States and Israel are the Palestinians, Iranians and Hezbollah.
  • It is with these reports in the backdrop that Netanyahu will go to the White House on Tuesday. Normally, meetings by visiting heads of state are accompanied by photo-ops and press conferences designed to put a happy face forward for the cameras and the world. Tuesday’s meeting will reportedly lack such trappings. This indicates that Obama wants to carefully control the image of this first battery of talks as he emerges from the sphere of domestic politics to face a list of pending foreign policy issues.
  • China: The recent tensions between the United States and China could possibly flare into a full-blown trade war in the coming months.
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Special Report: Espionage with Chinese Characteristics - 0 views

  • China’s covert intelligence capability seems vast mainly because of the country’s huge population and the historic Chinese diaspora that has spread worldwide. Traditionally focused inward, China as an emerging power is determined to compete with more established powers by aiming its intelligence operations at a more global audience. China is driven most of all by the fact that it has abundant resources and a lot of catching up to do.
  • Together, these cases exemplify the three main Chinese intelligence-gathering methods, which often overlap. One is “human-wave” or “mosaic” collection, which involves assigning or dispatching thousands of assets to gather a massive amount of available information. Another is recruiting and periodically debriefing Chinese-born residents of other countries in order to gather a deeper level of intelligence on more specific subjects. The third method is patiently cultivating foreign assets of influence for long-term leverage, insight and espionage.
  • To Western eyes, China’s whole approach to intelligence gathering may seem unsophisticated and risk-averse, particularly when you consider the bureaucratic inefficiencies inherent in the Communist Party of China’s (CPC) administrative structure. But it is an approach that takes a long and wide view, and it is more effective than it may seem at first glance.
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  • China’s first intelligence advocate was military theorist Sun Tzu who, in his sixth century B.C. classic The Art of War, emphasized the importance of gathering timely and accurate intelligence in order to win battles.
  • Since the time of Sun Tzu, perhaps the most successful Chinese spy has been the legendary Larry Wu-Tai Chin (Jin Wudai), an American national of Chinese descent who began his career as a U.S. Army translator and was later recruited by the MSS while working in a liaison office in Fuzhou, China, during the Korean War.
  • Chin had the same handler for 30 years, which means both agent and case officer had a high level of experience and the ability to keep all knowledge of the operation within narrow channels of the MSS. And the Chinese government never acted on Chin’s intelligence in a way that would reveal his existence.
  • (click here to enlarge image) Today, China’s intelligence bureaucracy is just that — a vast array of intelligence agencies, military departments, police bureaus, party organs, research institutions and media outlets.
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The Real New Deal - 0 views

  • 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
       
      Hat Tip to Robin Hanson at Overcoming Bias for pointing me toward this article. http://www.overcomingbias.com/2010/03/great-depression.html
    • anonymous
       
      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
       
      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.
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  • 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
       
      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
       
      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
       
      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
       
      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
       
      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
       
      I'll raise my hand on this one. Even with my better-than-nothing knowledge of US history, I knew nothing about this.
    • anonymous
       
      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
       
      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
       
      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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U.S., Israel: Netanyahu Goes to Washington as Tensions Rise - 0 views

  • In the ongoing struggle between the Palestinians and the Israelis, it is important to note the difference between armed conflict and intifada. The former involves factionalized clashes with Israel primarily in the form of gunbattles and Israeli airstrikes in which Israel, while taking a diplomatic hit, is able to inflict great damage on one faction, (e.g., Hamas in Gaza) to the benefit of another faction (Fatah in the West Bank). An intifada, however, is a sustained, collaborative uprising against Israel that involves ordinary Palestinian citizens and is agreed on by competing factions.
  • Hamas has a strategic interest in encouraging an intifada from the West Bank, where Israel occupies territory and thus presents a target for attacks and where Hamas’ main rival Fatah is politically entrenched.
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U.S. and Russia Come To Terms On START Replacement - 0 views

  • THE UNITED STATES AND RUSSIA came to an agreement on all the elements needed to sign a new nuclear arms treaty, a senior Kremlin official said Wednesday.
  • Negotiations for a replacement treaty for the expired START have dragged on as relations between the United States and Russia have been in decline.
  • But even with such pitiful relations between Moscow and Washington, the two sides were able to push through a deal on START.
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  • As bad as things are, Russia and the United States just put further limits on their biggest weapons. This means that — at least for now — the two powers are not fighting a Cold War.
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Obama Is Making Bush's Big Mistake on Russia - 0 views

  • Putin's treatment of Clinton raises doubts about the Barack Obama administration's strategy toward Russia, which has focused on building up the supposedly moderate President Dmitri Medvedev, reportedly one of the few foreign leaders Obama has bonded with, as a counterweight to Putin.
    • anonymous
       
      If true, this could be a grevious mistake, as Russia has shown a historic knack for tightly managed foreign policy under strong leaders (which Putin is).
  • After his first meeting with then-President Putin in June 2001, George W. Bush famously said: "I looked the man in the eye. I was able to get a sense of his soul."
    • anonymous
       
      That was hilarious, even at the time. My sincere hope was that the statement was intended for the domestic audience (to give comfort), because if it was for the international audience, then Bush very likely came off as very, very naive.
  • And now, we're hearing that Obama believes he has a different and promising relationship with Medvedev -- one independent of Putin.
    • anonymous
       
      My hope is that *this* is a conservative, careful way to say that Obama will give the benefit of the doubt. While I have only epheremal reasons to think this, Obama seems a bit shrewder than Bush.
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  • For all his talk of reform -- and so far it is just that, talk -- Medvedev still claims that Russia is a working democracy that protects the liberties of individual Russians despite overwhelming evidence to the contrary.
    • anonymous
       
      Which is as laughable as that earlier Bush quote about "sensing his soul."
  • On Medvedev's watch, Georgia has been invaded and Abkhazia and South Ossetia effectively annexed, and Russia has continued to threaten its neighbors and put forward a "new security architecture" whose obvious goal is to undermine NATO's role in Europe.
    • anonymous
       
      Aggressively reclaiming Russia's near abroad is still their aim. Can you blame them? What's important here is that Medvedev really *is* tightly in line with Putin. It's best to think of his presidency as the continuation of the Putin administration, not a thing that's distinct from it.
  • In short, there is little reason to believe that basing a "reset" of U.S.-Russian relations on increased personal ties between presidents Medvedev and Obama will buy Obama any particular advantage. If anything, doing so reinforces Moscow's incentive to continue the "good cop, bad cop" routine.
  •  
    Tagline: "Remember when George W. Bush thought he could get things done by making nice with Vladimir Putin? Barack Obama is repeating the same error with Dmitry Medvedev. " By Jamie Fly and Gary Schmitt in Foreign Policy on March 22, 2010
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Expanding U.S.-Russia Competition - 0 views

  • IT APPEARS TO STRATFOR THAT THE RELATIONSHIP between Moscow and Washington is — despite public successes of the START negotiations — becoming increasingly complex.
  • That the American president is choosing to meet with the Central and Eastern European leadership en masse in the same venue that is supposed to be dedicated to the pomp and circumstance of the signing of the new START treaty will not please Moscow. This is particularly true since Russia had originally planned for the signing of the treaty to be a minor stop on Medvedev’s own tour of the region, and because the event was designed to highlight Russia’s status as a superpower worthy of the United States’ undivided attention.
  • the United States is still very much involved in Central and Eastern Europe
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  • The point is not that Poland and its neighbors expect to see the Wehrmacht on the horizon any time soon, but rather that they remember how a “normal” Germany repeatedly sold out Central and Eastern Europe’s security for its own national interests.
  • Russia has long dabbled in Latin America as a way to make the United States nervous — particularly during the Cold War.
  • the most important kind of help that Venezuela could receive from Russia at this point is something (anything) to assist with Venezuela’s dire electricity situation.
  • Russia appreciates the opportunity to meddle in the Western Hemisphere just as the United States is using the opportunity in Central and Eastern Europe to exert influence in Russia’s near abroad.
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    A StratFor article from April 2, 2010.
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What Is Geoengineering and Why Is It Considered a Climate Change Solution? - 0 views

  • Some scientists are calling for more study of technological interventions to forestall catastrophic global warming. Why?
  • When a report on climate change hit the U.S. president's desk, the suggestion was not to cut greenhouse gas emissions. Rather, scientific advisors counseled intervention via technology in the climate system itself—a practice now known as geoengineering. And the president was not Barack Obama, George W. Bush or even Bill Clinton—it was Lyndon Johnson in 1965.
  • Typically what people call geoengineering is divided into two major classes.
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    From Scientific American on April 6, 2010.
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China: An Uptick in Naval Activity in the East and South China Seas - 0 views

  • Japan’s announcement on April 13 that 10 Chinese People’s Liberation Army-Navy (PLAN) vessels have sailed between the islands of Okinawa and Miyako since April 10 signal an effort by Beijing to expand naval activities in international waters with the aim of preventing intervention by other naval forces.
  • A video displayed by Japanese Kyodo News showed the Russian-built Sovremenny-class guided missile destroyers Hangzhou (136) and Fuzhou (137), which are Soviet-designed and equipped with the SS-N-22 “Sunburn,” a supersonic anti-ship missile. These are two of China’s most capable and heavily armed surface combatants.
  • Because the United States is the world’s pre-eminent naval power, and because the U.S. Navy is far superior to the PLAN in terms of not only technology, but operational capability, sophistication and naval tradition, Beijing has a strong interest in attempting to establish a larger buffer than what is provided for by UNCLOS.
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  • As PLAN steps up its expansion and modernization process to facilitate Beijing’s territory claim, new contests within both the East China Sea and South China Sea are expected.
  •  
    News from StratFor on April 15, 2010.
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Japan, U.S.: Tokyo's Policy Shift on Futenma - 0 views

  • As STRATFOR has noted, despite the politicized debates over changing the deal, the DPJ remains constrained by the same regional and geographic issues that held the LDP to the deal. Further informing Tokyo’s decision to more publicly shift its stance closer to supporting the original agreement, however, is the recent series of Chinese naval operations around Japanese islands.
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    By StratFor on May 4, 2010.
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The Effects of the Gulf Oil Spill - 0 views

  • how deep an impression the cumulative effect will make on the American psyche — and how it will affect the nation’s behavior.
  • At the current pace, in five days the amount of oil spilled will surpass the 75,000 barrels spilled when a Union Oil well blew out off the coast of Santa Barbara in 1969. In 40 days the spill will surpass the 260,000 barrels spilled by ExxonMobil when the Valdez tanker hit a reef off the Alaska coast in 1989.
  • Both the Santa Barbara and the Valdez spills were significant political events in the United States, leading to a rise in environmentalism and stricter regulation on energy companies and offshore drilling. The Deepwater Horizon incident appears destined to have a similar or even greater impact. It has already prompted California Governor Arnold Schwarzenegger to abandon his push to expand regional offshore drilling, and caused pressure for U.S. President Barack Obama to suspend his recently announced plans to expand federal offshore drilling.
  •  
    By StratFor on May 4, 2010. A look at the psychological affects to the American mind.
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Maybe nuclear power isn't so bad after all - 0 views

  • Shortly after the cold war ended, the U.S. started buying warheads from Russia and converting the weapons-grade uranium into fuel suitable for commercial reactors.
  • spent fuel rods from a typical plant cannot easily be converted into weapons-grade explosives.
  • Terrorists cannot easily blow up nuclear plants to create dirty bombs.
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  • Many countries that have nuclear power plants do not possess weapons. And almost every country that has nuclear weapons today acquired them before acquiring nuclear reactors.
  • Nuclear energy is cheaper as well as cleaner than fossil fuels.
  •  
    By John Horgan (guest contributor) in Scientific American on May 11, 2010.
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Are predictions of endless war self-fulfilling? - 0 views

  • The implicit assumption of the entire conference was that there will always be wars.
  • "No," Mansoor replied immediately when I asked him if he thought international war would ever end, as some scholars have recently proposed. He acknowledged that since World War II there have been relatively few international wars and no wars between major powers (although of course the U.S. and the Soviet Union fought through proxies). But he likened our era to the century of relative calm following the end of the Napoleonic Wars in 1815.
  • There are many more democracies in the world now, and democracies rarely fight against each other (although they obviously fight against non-democracies, as Mansoor pointed out). Moreover, modern media rub our noses in war's ugliness as never before.
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  • What bothers me most about Mansoor's vision of the future is its potential to be self-fulfilling.
  •  
    By John Horgan at Scientific American on May 19, 2010
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What a U.S.-Iran Entente Would Look Like - 0 views

  • STRATFOR has long been saying that with no viable military options to attempt to curb Iranian behavior, and an inability to put together an effective sanctions regime, Washington has only one choice, and that is to negotiate with Tehran on the issues that matter most to both countries.
  • Iran already has the largest military force in the region — which will only grow more powerful once Tehran is no longer encumbered by sanctions.
  • The United States has been hobbled by the memories of the 1979 hostage crisis for a generation now
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  • The trajectory of this hypothesized rapprochement coincides with the trajectory of increasing American military bandwidth. Though American ground combat forces remain heavily committed at the moment, this will change in the years to come.
  • The United States is on this trajectory with or without Iran, but with an American-Persian rapprochement, it is possible on a more rapid timetable and to a greater degree.
  • Europeans, especially the French and the Germans, would welcome a Tehran-Washington reconciliation
  • Russia has no interest in seeing the United States and Iran come to terms with each other.
  • The more distracted the United States is, the more room Russia has to entrench itself in the former Soviet space and keep Europe under its thumb.
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    May 19, 2010
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U.S.-Brazil Tag Team Could Pique Beijing's Ire | STRATFOR - 0 views

  • China is using unilateral pro-export policies to flood foreign markets with its goods, undermining competitors, and it is using its massive cash surpluses to lock down foreign resources.
  • Even if Washington were not a military superpower on whose bad side Brazil would not want to be, the United States retains the world’s largest consumer market even with a relatively weak currency, and it imports a mix of Brazilian goods, rather than simply the raw materials.
  •  
    Geithner's comments in Sao Paulo gained extra attention because of the thinly veiled criticism of China's undervalued currency contained therein. Geithner said that the surge in capital flows into Brazil was not only the result of Brazil's rapid growth rates but has been intensified by "the policies of other emerging economies that are trying to sustain undervalued currencies, with tightly controlled exchange rate regimes." While Geithner has often pulled punches when speaking about China, and deliberately noted that China is not the only currency manipulator, nevertheless China remains the most conspicuous example of such exchange rate regimes and the obvious target of Geithner's comments. In short, he argued that because of nations like China with closed capital accounts and an exchange rate set by fiat, nations like Brazil are suffering excessive and rapid inflows that monetary policy is insufficient to control.
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In Gurgaon, India, Dynamism Meets Dysfunction - 5 views

  • Gurgaon, located about 15 miles south of the national capital, New Delhi, would seem to have everything, except consider what it does not have: a functioning citywide sewer or drainage system; reliable electricity or water; and public sidewalks, adequate parking, decent roads or any citywide system of public transportation. Garbage is still regularly tossed in empty lots by the side of the road.
  • how can a new city become an international economic engine without basic public services? How can a huge country flirt with double-digit growth despite widespread corruption, inefficiency and governmental dysfunction?
  • India and China are often considered to be the world’s rising economic powers, yet if China’s growth has been led by the state, India’s growth is often impeded by the state.
    • anonymous
       
      Libertarians like to picture the state in a very fixed, binary position in relation to the economy. Further peeking, though, and you see that governments can be broadly pro-business, or anti-business, or both, or directed specificially in one or another sector. The Libertarian persistence that Government = Bad Things is hardly descriptive or useful.
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  • GURGAON, India
    • anonymous
       
      This would appear to be a wet-dream scenario for Libertarian/Anarchists. Let's see how this author portrays the many facets there most certainly are...
    • Erik Hanson
       
      Only certain types of anarchism allow for large, organized corporations. Recall that the workers' rights movement was largely spurred on by anarchists.
  • In Gurgaon, economic growth is often the product of a private sector improvising to overcome the inadequacies of the government. To compensate for electricity blackouts, Gurgaon’s companies and real estate developers operate massive diesel generators capable of powering small towns. No water? Drill private borewells. No public transportation? Companies employ hundreds of private buses and taxis. Worried about crime? Gurgaon has almost four times as many private security guards as police officers.
  • “You are on your own.”
  • It is experiencing a Gilded Age of nouveau billionaires while it is cleaved by inequality and plagued in some states by poverty and malnutrition levels rivaling sub-Saharan Africa.
  • Gurgaon was widely regarded as an economic wasteland. In 1979, the state of Haryana created Gurgaon by dividing a longstanding political district on the outskirts of New Delhi. One half would revolve around the city of Faridabad, which had an active municipal government, direct rail access to the capital, fertile farmland and a strong industrial base. The other half, Gurgaon, had rocky soil, no local government, no railway link and almost no industrial base. As an economic competition, it seemed an unfair fight. And it has been: Gurgaon has won, easily. Faridabad has struggled to catch India’s modernization wave, while Gurgaon’s disadvantages turned out to be advantages, none more important, initially, than the absence of a districtwide government, which meant less red tape capable of choking development. By 1979, Mr. Singh had taken control of his father-in-law’s real estate company, now known as DLF, at a moment when urban development in India was largely overseen by government agencies. In most states, private developers had little space to operate, but Haryana was an exception. Slowly, Mr. Singh began accumulating 3,500 acres in Gurgaon that he divided into plots and began selling to people unable to afford prices in New Delhi.
    • anonymous
       
      This smells a bit like the rise of Hong Kong. Filling out one piece of paper to start a business. This is Libertarian stuff that still resonates with me. That's very good. And then, the inevitable: BUT...
  • Mr. Singh had become the company’s India representative after befriending Jack Welch, then the G.E. chairman. When Mr. Welch decided to outsource some business operations to India, he eventually opened a G.E. office inside a corporate park in Gurgaon in 1997. “When G.E. came in,” Mr. Singh said, “others followed.”
  • Ordinarily, such a wild building boom would have had to hew to a local government master plan. But Gurgaon did not yet have such a plan, nor did it yet have a districtwide municipal government. Instead, Gurgaon was mostly under state control. Developers built the infrastructure inside their projects, while a state agency, the Haryana Urban Development Authority, or HUDA, was supposed to build the infrastructure binding together the city.
  • And that is where the problems arose. HUDA and other state agencies could not keep up with the pace of construction. The absence of a local government had helped Gurgaon become a leader of India’s growth boom. But that absence had also created a dysfunctional city. No one was planning at a macro level; every developer pursued his own agenda as more islands sprouted and state agencies struggled to keep pace with growth.
  • From computerized control rooms, Genpact employees manage 350 private drivers, who travel roughly 60,000 miles every day transporting 10,000 employees.
    • anonymous
       
      As an MR reader notes, in the absence of street laws, drivers are incentivized to speed and behave recklessly. This is one hell of a *feature* of little-to-no government? Cool.
  • The city’s residential compounds, especially the luxury developments along golf courses, exist as similarly self-contained entities.
  • “We pretty much carry the entire weight of what you would expect many states to do,” said Pramod Bhasin, who this spring stepped down as Genpact’s chief executive. “The problem — a very big problem — is our public services are always lagging a few years behind, but sometimes a decade behind. Our planning processes sometimes exist only on paper.”
  • Not all of the city’s islands are affluent, either. Gurgaon has an estimated 200,000 migrant workers, the so-called floating population, who work on construction sites or as domestic help.
  • Sheikh Hafizuddin, 38, lives in a slum with a few hundred other migrants less than two miles from Cyber City. No more than half the children in the slum attend school, with the rest spending their days playing on the hard-packed dirt of the settlement, where pigs wallow in an open pit of sewage and garbage. Mr. Hafizuddin pays $30 a month for a tiny room. His landlord runs a power line into the slum for electricity and draws water from a borehole on the property. “Sometimes it works,” Mr. Hafizuddin said. “Sometimes it doesn’t work.”
    • Erik Hanson
       
      This is one of the issues I take with anarcho-capitalism. It works great, so long as you only look at those on top.
  • Meanwhile, with Gurgaon’s understaffed police force outmatched by such a rapidly growing population, some law-and-order responsibilities have been delegated to the private sector. Nearly 12,000 private security guards work in Gurgaon, and many are pressed into directing traffic on major streets.
    • anonymous
       
      And where the private world of Gurgaon and everywherelse intersect, who's problem is it?
  • Sudhir Rajpal, the wiry, mustachioed commissioner of the new Municipal Corporation of Gurgaon, has a long to-do list: fix the roads, the sewers, the electrical grid, the drainage, the lack of public buses, the lack of water and the lack of planning. The Municipal Corporation was formed in 2008, and Mr. Rajpal, having assumed the city’s top administrative position a few months ago, has been conducting a listening tour to convince people that government can solve their problems. It is not an easy sell.
  • “The drains are broken and accidents are happening,” shouted one man. “Yet no one is answerable! There are problems and problems. Whatever water we get is dirty, but we have nowhere to complain.”
  • “Every day some agitation is taking place,” he said, shouting above the din of traffic. “People are not satisfied.” If people should be satisfied anywhere in India, Gurgaon should be the place. Average incomes rank among the highest in the country. Property values have jumped sharply since the 1990s. Gurgaon’s malls offer many of the country’s best shops and restaurants, while the city’s most exclusive housing enclaves are among the finest in India. Yet the economic power that growth has delivered to Gurgaon has not been matched by political power. The celebrated middle class created by India’s boom has far less clout at the ballot box than the hundreds of millions of rural peasants struggling to live on $2 a day, given the far larger rural vote, and thus are courted far less by Indian politicians.
    • anonymous
       
      Years ago, when I moved to Seattle, I worked with a mess of Indian programmers who complained that, coming from middle to middle-upper class households, their families had a difficult time doing the U.S.-style entrepreneur thing precisely because of (you put it:) byzantine laws and payoffs. I also take the nod that deriving broad trends from this isn't exactly wise. But it was worth noting because I have vague, youthful memories of the classic Capitalist-vs-Marxist quandry: Both can claim that there has never been a *true* example of one or the other. Reality is messy like that; it never provides perfect samples. By the way, thanks so much for joining in with my little bookmark-experiment, Erik. I love the idea of marking up a discussion document in order to probe an issue. I really shoulda gone to college. :)
    • Erik Hanson
       
      Hey, thanks for chunking out longer articles so that I can get through them (once I have time to open the Diigo emails in my inbox). I'm always a little upset about the juicy stuff I may be missing by skipping Buzz for a week or two.
  •  
    The anarcho-libertarian's wet dream: a city without a government. "In this city that barely existed two decades ago, there are 26 shopping malls, seven golf courses and luxury shops selling Chanel and Louis Vuitton. Mercedes-Benzes and BMWs shimmer in automobile showrooms. Apartment towers are sprouting like concrete weeds, and a futuristic commercial hub called Cyber City houses many of the world's most respected corporations. "
  •  
    India's government is especially byzantine and a truly active inhibitor of commerce and growth. I can understand how, especially to outside companies who don't know the system, there's a real appeal in being able to avoid the sort of daily struggles of someone claiming to be an official coming to your reception and demanding a fine for a law you're not sure even exists. But even if this city weren't rotting out from the inside, I don't think it would necessarily be a lesson applicable to all other governments. Not every piece of rope is a Gordian Knot, as not every government is India's.
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Visegrad: A New European Military Force | STRATFOR - 0 views

  • The Visegrad Group, or V4, consists of four countries — Poland, Slovakia, the Czech Republic and Hungary — and is named after two 14th century meetings held in Visegrad Castle in present-day Hungary of leaders of the medieval kingdoms of Poland, Hungary and Bohemia.
  • The group was reconstituted in 1991 in post-Cold War Europe as the Visegrad Three (at that time, Slovakia and the Czech Republic were one).
  • On May 12, the Visegrad Group announced the formation of a “battle group” under the command of Poland. The battle group would be in place by 2016 as an independent force and would not be part of NATO command.
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  • First, they felt that the Russian threat had declined if not dissipated following the fall of the Soviet Union.
  • Second, they felt that their economic future was with the European Union.
  • Third, they believed that membership in NATO, with strong U.S. involvement, would protect their strategic interests.
  • Of late, their analysis has clearly been shifting.
  • First, Russia has changed dramatically since the Yeltsin years. It has increased its power in the former Soviet sphere of influence substantially
  • Second, the infatuation with Europe, while not gone, has frayed. The ongoing economic crisis, now focused again on Greece, has raised two questions: whether Europe as an entity is viable and whether the reforms proposed to stabilize Europe represent a solution for them or primarily for the Germans.
  • Finally, there are severe questions as to whether NATO provides a genuine umbrella of security to the region and its members. The NATO strategic concept, which was drawn up in November 2010, generated substantial concern on two scores. First, there was the question of the degree of American commitment to the region, considering that the document sought to expand the alliance’s role in non-European theaters of operation.
  • Second, the general weakness of European militaries meant that, willingness aside, the ability of the Europeans to participate in defending the region was questionable.
  • Germany’s commitment to both NATO and the EU has been fraying. The Germans and the French split on the Libya question, with Germany finally conceding politically but unwilling to send forces. Libya might well be remembered less for the fate of Moammar Gadhafi than for the fact that this was the first significant strategic break between Germany and France in decades.
  • There are strong political forces in Germany questioning the value of the EU to Germany, and with every new wave of financial crises requiring German money, that sentiment becomes stronger.
  • For all of the Visegrad countries, any sense of a growing German alienation from Europe and of a growing German-Russian economic relationship generates warning bells.
  • The Nordic countries share the same concerns as the Visegrad countries — the future course of Russian power, the cohesiveness of Europe and the commitment of the United States.
  • In the past, the Visegrad countries would have been loath to undertake anything that felt like a unilateral defense policy. Therefore, the decision to do this is significant in and of itself.
  • Poland is the largest of these countries by far and in the least advantageous geographical position. The Poles are trapped between the Germans and the Russians. Historically, when Germany gets close to Russia, Poland tends to suffer. It is not at that extreme point yet, but the Poles do understand the possibilities.
  • Some will say this is over-reading on my part or an overreaction on the part of the V4, but it is neither. For the V4, the battle group is a modest response to emerging patterns in the region, which STRATFOR had outlined in its 2011 Annual Forecast. As for my reading, I regard the new patterns not as a minor diversion from the main pattern but as a definitive break in the patterns of the post-Cold War world
  • We are in a new era, as yet unnamed, and we are seeing the first breaks in the post-Cold War pattern.
  • For the countries on the periphery, there is a perpetual sense of insecurity, generated not only by Russian power compared to their own but also by uncertainty as to whether the rest of Europe would be prepared to defend them in the event of Russian actions. The V4 and the other countries south of them are not as sanguine about Russian intentions as others farther away are. Perhaps they should be, but geopolitical realities drive consciousness and insecurity and distrust defines this region.
  • Pilsudski proposed an alliance stretching from the Baltic Sea to the Black Sea and encompassing the countries to the west of the Carpathians — Czechoslovakia, Hungary, Romania and Bulgaria.
  • An alliance with Ukraine would provide significant strategic depth. It is unlikely to happen. That means that the alliance must stretch south, to include Romania and Bulgaria. The low-level tension between Hungary and Romania over the status of Hungarians in Romania makes that difficult, but if the Hungarians can live with the Slovaks, they can live with the Romanians. Ultimately, the interesting question is whether Turkey can be persuaded to participate in this, but that is a question far removed from Turkish thinking now. History will have to evolve quite a bit for this to take place. For now, the question is Romania and Bulgaria.
  • the decision of the V4 to even propose a battle group commanded by Poles is one of those small events that I think will be regarded as a significant turning point. However we might try to trivialize it and place it in a familiar context, it doesn’t fit. It represents a new level of concern over an evolving reality — the power of Russia, the weakness of Europe and the fragmentation of NATO. This is the last thing the Visegrad countries wanted to do, but they have now done the last thing they wanted to do. That is what is significant.
  •  
    "With the Palestinians demonstrating and the International Monetary Fund in turmoil, it would seem odd to focus this week on something called the Visegrad Group. But this is not a frivolous choice. What the Visegrad Group decided to do last week will, I think, resonate for years, long after the alleged attempted rape by Dominique Strauss-Kahn is forgotten and long before the Israeli-Palestinian issue is resolved. The obscurity of the decision to most people outside the region should not be allowed to obscure its importance. "
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Ellis Weiner: What I Learned from Parodying Atlas Shrugged - 0 views

  • Yeah, it's cheap fun, and I expected it going in. But what took me by surprise, and what still amazes me to this very day, is this: The novel's antagonists -- the bad guys, their pernicious "values," the ideas against which Rand's demi-god heroes and heroines do verbose, tedious battle -- they do not exist in real life. Of course, neither do Sauron or Voldemort. But Atlas Shrugged is a 1,000-page, 643,000-(I counted them)-word diatribe against an imaginary enemy that, unlike Lord of the Rings or the Harry Potter books, insists it's about "reality."
  • the geo-political world in which Rand wants us to admire her heroes is not our own, or even (like that of 1984) a plausible, allegorical variant of our own, but a third-rate science fiction dystopian future, complete with imaginary technology, which, by definition, makes comparison to today's world impossible.
  • The U.S. of Atlas Shrugged is about as real and realistic as Narnia, and capitalism is to Atlas Shrugged what Quidditch is to Harry Potter and the Sorcerer's Stone: a fictional construct, vaguely similar to something we have in real life, used for purposes of drama and entertainment.
  • ...2 more annotations...
  • Even Trekkies (do they still call themselves that?) who go to conventions in costume and speak fucking Klingon know that it's make believe.
  • So I wrote the parody. It was like shooting fish in a barrel, yes. But somebody has to shoot them.
  •  
    "In any case, it took me a while to realize what should have been perfectly obvious: that Atlas Shrugged (about which I've written several times in these "pages") was and is so ripe for parody, it's not even funny. It's not even necessary, either, in some ways, since, like all truly horrible books, it parodies itself, brimming and fit to bust as it is with excellent, excellent examples of awful, awful writing. "
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China's Technology Showcases Mask Economic Warning Signs - 0 views

  • Newspapers and defense journals along the Pacific Rim and elsewhere are replete with foreign speculation on the future activities of a more internationally active and aggressive Chinese navy, to say nothing of more sober discussions of the constraints and limitations facing potential Chinese naval ambitions with a single carrier (for now) and no history or culture of carrier operations.
  • The attention on the Varyag is, in many ways, misplaced. China is historically a land power. Its biggest security challenges remain at home, across a vast territory that will continue to require large expenditures for manpower, equipment and transportation. China’s historical flirtation with a navy that travels far beyond its immediate neighborhood has been limited. Even the famous voyages of Zheng He could be called frivolous, rather than a serious attempt to dominate seas around the world or even the region.
  • Unlike neighboring Japan, China’s attempts to build up a navy to counter European influence proved ineffective, and the emergent Japanese navy defeated the Chinese fleet.
  • ...9 more annotations...
  • China’s extensive geography and high population are its core strength and greatest defense. Even if an invasion from the sea is initially successful, China has the human resources to ultimately either absorb the conqueror (the one land power that was successful in invading China — the Mongols — eventually became subsumed into Chinese culture), or to outlast the invader through a long war of attrition.
  • STRATFOR has said that one of the reasons China appears bent on expanding its naval capabilities relates to its shifting economic structure.
  • China’s economic supply lines now cross the globe.
  • China’s naval expansion, in that case, is not part of a strategy to engage in a naval arms race with the United States or challenge U.S. dominance of the seas. Rather, Beijing intends to build a defensive buffer around China’s maritime periphery.
  • the attention to China’s new aircraft carrier, deep-diving submarine, its space exploration, and similar activities also helps Beijing distract audiences domestic and global from real problems inside the country
  • Overseas, they somehow reinforce the perception of a rising China — and a rising China cannot be on the verge of a major economic and social crisis.
  • Like the Three Gorges Dam, this show of China’s capabilities is impressive for a moment, but it does not really address the country’s core needs.
  • Beijing’s top concern is avoiding an economic and social crisis, and Chinese leaders know that it may be only a matter of time before the Chinese economy faces the same structural limitations that its East Asian counterparts already faced.
  • What happens if China’s economic miracle faces what all economic miracles eventually face — the reality that there is no such thing as unlimited, linear, multidigit growth.
  •  
    "China is once again on the verge of sending its first aircraft carrier to sea. In recent days, the Chinese media has expanded on comments, made during a Defense Ministry press conference, openly confirming that China is refitting the Varyag and preparing to enter the small club of nations with aircraft carriers."
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