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anonymous

The World Through Putin's Eyes - 0 views

www.stratfor.com/...world-through-putins-eyes

shared by anonymous on 05 Jun 13 - Cached
  • Russia's flat topography affords little natural protection and is therefore bereft of natural borders. Land powers, as they have no seas to protect them, are more insecure than island nations and continents like the United States and Great Britain.
  • But Russia is particularly insecure.
  • Putin knows, therefore, that Russia cannot rule Eastern Europe. But he does require a degree of diplomatic and economic acquiescence in order to keep countries like Poland and Romania hobbled.
  • ...16 more annotations...
  • Putin is happy that Russia's geography grants him access to massive natural gas deposits, as well as the pathways to export that natural gas to Europe, particularly to Eastern Europe. This provides him with economic and, thus, political leverage over former Warsaw Pact states. But he is nervous.
  • Countries by the Baltic Sea are building or planning to build regasification plants that will allow them to import natural gas in liquid form from other parts of the world, thereby undermining Russia's energy monopoly in Eastern Europe. Then there are the shale gas deposits in Poland and Ukraine that might further increase the energy options of those geopolitical bellwether countries. Putin needs to be a worrier.
  • Are they aware that when I took power there was political chaos and criminal anarchy, with ordinary Russians robbed of their dignity? In Putin's mind, he restored a large measure of order -- without which no progress is possible in the first place. And whatever his numerous faults, he is painfully aware that he is not in total control.
  • American journalists, politicians and government officials must drive Putin to distraction. They assault him on moral grounds. After all, "He is a dictator!" they say. "He tolerates and even encourages corruption and rampant thuggery!" But do they know I am dealing with Russia -- not with the United States? Putin must think.
  • Putin wants a discussion with the Americans based on geopolitical interests, not values.
  • The Communists required totalitarianism to exercise real control. But he is no mass murderer like Stalin; he is not relocating whole populations to Siberia. He is just a ruler with strong autocratic tendencies, something common to Russia. What do the Americans want of me! Why do they interfere with my domestic affairs through the support of these human rights organizations? And, by the way, don't the Americans realize that toppling Bashar al Assad in Syria might mean a worse human rights situation there; not a better one?
  • President Richard Nixon went to China to negotiate with Mao Zedong because it was in America's interest to do so; the fact that Mao had just killed millions in the Great Proletarian Cultural Revolution was not an over riding detail. So where is my Nixon? Putin must think.
  • The Russian Far East, an area roughly twice the size of Europe, has a paltry population of fewer than 7 million that may fall to fewer than 5 million in coming decades.
  • But geography dictates that Russia's alliance with China is mainly tactical. While Russia is delivering increasing amounts of oil (and probably natural gas soon, too) to China, something for which Beijing is grateful, the two giant nations share long borders in the Far East and in Central Asia that through the centuries have been volatile.
  • on the other side of the border Russia faces a population of 100 million people in Chinese Manchuria. Resource acquisition is the principal goal of Chinese foreign policy, and the Russian Far East is rich in reserves of natural gas, oil, timber, diamonds and gold.
  • Unless China itself implodes -- a possibility but not a probability -- China must be seen as a long-range threat to Russia.
  • Nixon would understand Russia's geopolitical insecurities and partially assuage them, in order to gain some leverage over China, just as four decades ago he had moved closer to China in order to gain some leverage over Russia.
  • Were the United States to give Russia more leeway in the Caucasus and Central Asia -- rather than trying to compete with Russia in those regions -- Russia might find ingenious ways to make China more nervous along its land borders. And that, in turn, would make China somewhat less able to devote so much of its energy to projecting power in the Pacific Basin, where it threatens American allies.
  • None of this would remotely fall into the category of aggressive or irresponsible international behavior, mind you. Trying to adjust the global balance of power in one's favor is a perennial goal of statesmanship.
  • In 1972, the American media praised Nixon for going to China and negotiating with a mass murderer. Now the same media would not let President Barack Obama go to Moscow to negotiate with a normal autocrat unless he delivers scolding lectures on human rights.
  • But even if Obama intellectually realizes such truths and opportunities, the public policy climate in the United States is not that of the Cold War, which would have allowed for a broader dynamic between Washington and Moscow to each side's mutual benefit. The result is that China profits, to the endless frustration of Putin. As for the United States, it gains little advantage in the outcome.
  • anonymous on 05 Jun 13
     
    "Few people comprehend Russia's vulnerabilities like its leader, Vladimir Putin. He must try to govern a country that extends through nearly half the longitudes of the earth but that has fewer people than Bangladesh. What's more, Russia's population is declining, not increasing. All the Arctic seas to Russia's north are ice-blocked many months of the year, so with the exception of its Far East, Russia is essentially a landlocked nation. "
anonymous

Turkey is ... | Headrush - Ed Webb's Dickinson Blog - 0 views

the-ed-rush.blogspot.com/...turkey-is.html

shared by anonymous on 05 Jun 13 - Cached
  • What strikes me most about analyses I have looked at is the urge to compare. Taksim is or isn't Tahrir. Turkey is or isn't like Egypt/Tunisia/the USA. The protests in Gezi Park and elsewhere are more like #Occupy or more like the Arab uprisings of 2011.
  • Prime Minister Erdogan has little in common with Mubarak, Ben Ali or, even less, Qadhafi. He is a legitimately elected (and re-elected) and popular leader. Turkey is a multiparty democracy in a way that the North African states never were before the uprisings.
  • represent a broad frustration with the Prime Minister and his party (AKP/JDP)
  • ...12 more annotations...
  • That frustration appears to be driven by two key factors:
  • Erdogan's increasingly autocratic, populist governing style
  • pursuit of conservative social policy beyond many Turkish citizens' comfort zones
  • The ballot box is not, therefore, proving sufficiently responsive to that large segment of the population who feel underserved by the present government.
    • anonymous
      anonymous on 05 Jun 13
       
      Man, that sounds familiar. ;)
  • Where comparative political analysis may be helpful, apart from providing some of the vocabulary to discuss these events, is in drawing attention to international forces that have played roles in the Turkish protests:
  • Demonstration effects
  • information and communications technologies
  • the context of neoliberalizing globalization
  • In Tunisia and Egypt this enabled crony capitalist reforms, enriching a small elite and excluding the vast majority. Social justice and dignity became central demands of the protestors there.
  • The protestors are not, by and large, economic victims of globalization. But the development of Gezi park was symptomatic of runaway gentrification and had the stench of corruption about it:
  • Protestors globally are confronting local interactions of their national political and economic systems with the dominant economic ideology and forces of the post-Cold War world.
  • Turkey is not Tunisia is not Egypt is not the USA. But neoliberal globalization has disrupted societies in all of those places, and some people have pushed back and are pushing back.
  • anonymous on 05 Jun 13
     
    An awesome look at Turkey from Ed Webb: "Students and others have been asking me for my thoughts on the protests in Turkey. There is much reporting and analysis already available, of varying quality, so I will be brief. I encourage those interested to keep an eye on my Twitter stream and my Diigo account where I have been collecting some of the more interesting interventions."
anonymous

Conspiracy Theorists Are More Likely To Doubt Climate Science - 0 views

www.motherjones.com/...sts-also-doubt-climate-science

shared by anonymous on 06 Jun 13 - Cached
  • It's called "motivated reasoning"—and was described at length in Mother Jones (by me) back in 2011. Here's the gist: People's emotional investments in their ideas, identities and world views bias their initial reading of evidence, and do so on a level prior to conscious thought. Then, the mind organizes arguments in favor of one's beliefs—or, against attacks on one's beliefs—based on the same emotional connections. And so you proceed to argue your case—but really you're rationalizing, not reasoning objectively.
    • anonymous
      anonymous on 06 Jun 13
       
      *clears throat* - "Duh."
  • Conspiracy theorizing. Psychologist Stephan Lewandowsky, who studies conspiracy theorists. So what's the relationship between the two?
  • motivated reasoning and conspiracy mongering are at least in part separable, and worth keeping apart in your mind. To show as much, let's use the issue global warming as an example.
  • ...6 more annotations...
  • In a recent study of climate blog readers, Lewandowksy and his colleagues found that the strongest predictor of being a climate change denier is having a libertarian, free market world view. Or as Lewandowsky put it in our interview, "the overwhelming factor that determined whether or not people rejected climate science is their worldview or their ideology."
  • This naturally lends support to the "motivated reasoning" theory
  • a conservative view about the efficiency of markets impels rejection of climate science because if climate science were true, markets would very clearly have failed in an very important instance.
  • But separately, the same study also found a second factor that was a weaker, but still real, predictor of climate change denial—and also of the denial of other scientific findings such as the proven link between HIV and AIDS. And that factor was conspiracy theorizing.
  • "If a person believes in one conspiracy theory, they're likely to believe in others as well," explained Lewandowsky on the podcast. "There's a statistical association. So people who think that MI5 killed Princess Diana, they probably also think that Lee Harvey Oswald didn't act by himself when he killed JFK."
  • This makes conspiracy theorizing a kind of "cognitive style," one clearly associated with science denial—but not as clearly moored to ideology.
  • anonymous on 06 Jun 13
     
    "Here's the gist: People's emotional investments in their ideas, identities and world views bias their initial reading of evidence, and do so on a level prior to conscious thought. Then, the mind organizes arguments in favor of one's beliefs-or, against attacks on one's beliefs-based on the same emotional connections. And so you proceed to argue your case-but really you're rationalizing, not reasoning objectively."
anonymous

How people read online: Why you won't finish this article. - 1 views

www.slate.com/...inish_this_article.single.html

shared by anonymous on 08 Jun 13 - Cached
  • For every 161 people who landed on this page, about 61 of you—38 percent—are already gone.
  • We’re at the point in the page where you have to scroll to see more. Of the 100 of you who didn’t bounce, five are never going to scroll.
  • You’re tweeting a link to this article already? You haven’t even read it yet! What if I go on to advocate something truly awful, like a constitutional amendment requiring that we all type two spaces after a period?
  • ...23 more annotations...
  • Only a small number of you are reading all the way through articles on the Web.
  • Schwartz’s data shows that readers can’t stay focused. The more I type, the more of you tune out. And it’s not just me. It’s not just Slate. It’s everywhere online. When people land on a story, they very rarely make it all the way down the page. A lot of people don’t even make it halfway.
  • Even more dispiriting is the relationship between scrolling and sharing. Schwartz’s data suggest that lots of people are tweeting out links to articles they haven’t fully read. If you see someone recommending a story online, you shouldn’t assume that he has read the thing he’s sharing.
  • OK, we’re a few hundred words into the story now. According to the data, for every 100 readers who didn’t bounce up at the top, there are about 50 who’ve stuck around. Only one-half!
  • Take a look at the following graph created by Schwartz, a histogram showing where people stopped scrolling in Slate articles.
  • A typical Web article is about 2000 pixels long.
  • There’s a spike at 0 percent—i.e., the very top pixel on the page—because 5 percent of readers never scrolled deeper than that spot.
  • Finally, the spike near the end is an anomaly caused by pages containing photos and videos—on those pages, people scroll through the whole page.)
  • Or look at John Dickerson’s fantastic article about the IRS scandal or something. If you only scrolled halfway through that amazing piece, you would have read just the first four paragraphs. Now, trust me when I say that beyond those four paragraphs, John made some really good points about whatever it is his article is about, some strong points that—without spoiling it for you—you really have to read to believe. But of course you didn’t read it because you got that IM and then you had to look at a video and then the phone rang …
  • do you know what you get on a typical Slate page if you never scroll? Bupkis.
  • Schwarz’s histogram for articles across lots of sites is in some ways more encouraging than the Slate data, but in other ways even sadder:
  • On these sites, the median scroll depth is slightly greater—most people get to 60 percent of the article rather than the 50 percent they reach on Slate pages. On the other hand, on these pages a higher share of people—10 percent—never scroll. In general, though, the story across the Web is similar to the story at Slate: Few people are making it to the end, and a surprisingly large number aren’t giving articles any chance at all.
  • Chartbeat can’t directly track when individual readers tweet out links, so it can’t definitively say that people are sharing stories before they’ve read the whole thing. But Chartbeat can look at the overall tweets to an article, and then compare that number to how many people scrolled through the article.
  • Here’s Schwartz’s analysis of the relationship between scrolling and sharing on Slate pages:
  • Courtesy of Chartbeat And here’s a similar look at the relationship between scrolling and sharing across sites monitored by Chartbeat: Courtesy of Chartbeat
  • There’s a very weak relationship between scroll depth and sharing. Both at Slate and across the Web, articles that get a lot of tweets don’t necessarily get read very deeply.
  • Articles that get read deeply aren’t necessarily generating a lot of tweets.  
  • Schwartz tells me that on a typical Slate page, only 25 percent of readers make it past the 1,600th pixel of the page, and we’re way beyond that now.
  • Sure, like every other writer on the Web, I want my articles to be widely read, which means I want you to Like and Tweet and email this piece to everyone you know. But if you had any inkling of doing that, you’d have done it already. You’d probably have done it just after reading the headline and seeing the picture at the top. Nothing I say at this point matters at all.
  • So, what the hey, here are a couple more graphs, after which I promise I’ll wrap things up for the handful of folks who are still left around here. (What losers you are! Don’t you have anything else to do?) This heatmap shows where readers spend most of their time on Slate pages:
  • Schwartz told me I should be very pleased with Slate’s map, which shows that a lot of people are moved to spend a significant amount of their time below the initial scroll window of an article page.
  • Since you usually have to scroll below the fold to see just about any part of an article, Slate’s below-the-fold engagement looks really great. But if articles started higher up on the page, it might not look as good. In other words: Ugh.
  • Maybe this is just our cultural lot: We live in the age of skimming. I want to finish the whole thing, I really do. I wish you would, too. Really—stop quitting! But who am I kidding. I’m busy. You’re busy. There’s always something else to read, watch, play, or eat. OK, this is where I’d come up with some clever ending. But who cares? You certainly don’t. Let’s just go with this: Kicker TK.
  • anonymous on 08 Jun 13
     
    "Schwartz's data shows that readers can't stay focused. The more I type, the more of you tune out. And it's not just me. It's not just Slate. It's everywhere online. When people land on a story, they very rarely make it all the way down the page. A lot of people don't even make it halfway. Even more dispiriting is the relationship between scrolling and sharing. Schwartz's data suggest that lots of people are tweeting out links to articles they haven't fully read. If you see someone recommending a story online, you shouldn't assume that he has read the thing he's sharing."
anonymous

Restaurant websites: Why are they so awful? Which ones are the absolute worst? - 0 views

www.slate.com/...overdone.single.html

shared by anonymous on 08 Jun 13 - No Cached
  • These nightmarish websites were spawned by restaurateurs who mistakenly believe they can control the online world the same way they lord over a restaurant. "In restaurants, the expertise is in the kitchen and in hospitality in general," says Eng San Kho, a partner at the New York design firm Love and War, which has created several unusually great restaurant sites (more on those in a bit). "People in restaurants have a sense that they want to create an entertainment experience online—that's why disco music starts, that's why Flash slideshows open. They think they can still play the host even here online."
  • When you visit many terrible restaurant websites in succession, it becomes obvious that they're not bad because of neglect or lack of funds—these food purveyors appear to have spent a great deal of money and time to uglify their pages.
  • Masa, the exclusive New York sushi bar, presents you with a pages-long, scroll-bar-free biography of its chef, but (as far as I can tell) no warning that you'll spend $400 or more per person for dinner.
  • ...1 more annotation...
  • I did get a plausible-sounding explanation of the design process from Tom Bohan, who heads up Menupages, the fantastic site that lists menus of restaurants in several large cities. "Say you're a designer and you've got to demo a site you've spent two months creating," Bohan explains. "Your client is someone in their 50s who runs a restaurant but is not very in tune with technology. What's going to impress them more: Something with music and moving images, something that looks very fancy to someone who doesn't know about optimizing the Web for consumer use, or if you show them a bare-bones site that just lists all the information? I bet it would be the former—they would think it's great and money well spent."
  • anonymous on 08 Jun 13
     
    "Restaurant sites are the product of restaurant culture. These nightmarish websites were spawned by restaurateurs who mistakenly believe they can control the online world the same way they lord over a restaurant. "In restaurants, the expertise is in the kitchen and in hospitality in general," says Eng San Kho, a partner at the New York design firm Love and War, which has created several unusually great restaurant sites (more on those in a bit). "People in restaurants have a sense that they want to create an entertainment experience online-that's why disco music starts, that's why Flash slideshows open. They think they can still play the host even here online.""
anonymous

The question libertarians just can't answer - 1 views

www.salon.com/..._libertarians_just_cant_answer

shared by anonymous on 10 Jun 13 - Cached
  • There are 193 sovereign state members of the United Nations—195, if you count the Vatican and Palestine, which have been granted observer status by the world organization. If libertarianism was a good idea, wouldn’t at least one country have tried it? Wouldn’t there be at least one country, out of nearly two hundred, with minimal government, free trade, open borders, decriminalized drugs, no welfare state and no public education system?
  • Libertarian theorists have the luxury of mixing and matching policies to create an imaginary utopia. A real country must function simultaneously in different realms—defense and the economy, law enforcement and some kind of system of support for the poor. Being able to point to one truly libertarian country would provide at least some evidence that libertarianism can work in the real world.
  • Some political philosophies pass this test. For much of the global center-left, the ideal for several generations has been Nordic social democracy—what the late liberal economist Robert Heilbroner described as “a slightly idealized Sweden.”
  • ...13 more annotations...
  • Libertarians have often proclaimed that the economic failure of Marxism-Leninism discredits not only all forms of socialism but also moderate social-democratic liberalism.
  • If socialism is discredited by the failure of communist regimes in the real world, why isn’t libertarianism discredited by the absence of any libertarian regimes in the real world?
  • Communism was tried and failed. Libertarianism has never even been tried on the scale of a modern nation-state, even a small one, anywhere in the world.
  • But none of these countries, including the U.S., is anywhere near a libertarian paradise.
  • Even worse, the economic-freedom country rankings are biased toward city-states and small countries.
  • With the exception of Switzerland, four out of the top five were small British overseas colonies which played interstitial roles in the larger British empire.
  • Even though they are formally sovereign today, these places remain fragments of larger defense systems and larger markets. They are able to engage in free riding on the provision of public goods, like security and huge consumer populations, by other, bigger states.
  • These countries play specialized roles in much larger regional and global markets, rather as cities or regions do in a large nation-state like the U.S. Hong Kong and Singapore remain essentially entrepots for international trade.
  • Switzerland is an international banking and tax haven. What works for them would not work for a giant nation-state like the U.S.
  • The Heritage Foundation is free to define economic freedom however it likes, by its own formula weighting government size, freedom of trade, absence of regulation and so on. What about factors other than economic freedom that shape the quality of life of citizens?
  • According to the CIA World Fact book, the U.S. spends more than Mauritius—5.4 percent of GDP in 2009 compared to only 3.7 percent in Mauritius in 2010.
  • In economically-more-free Mauritius there are about 11 deaths per 1,000 live births—compared to 5.9 in the economically-less-free U.S.
  • Libertarians seem to have persuaded themselves that there is no significant trade-off between less government and more national insecurity, more crime, more illiteracy and more infant and maternal mortality, among other things.
  • anonymous on 10 Jun 13
     
    A most cogent argument. I don't think it's the author's job to balance itself out (as was suggested in G+). Against what, exactly? The piece had nothing to do with the two-party system. I completely agree that our two party system is a joke, but I fail to see how inserting an additional joke adds anything. The LP serves a vote-getting purpose for the GOP. That is all. Once the GOP gets enough votes, they reserve the right to kick the LP ideas/candidates to the curb - and often do. That's been the cycle for decades. Years back, it made me angry. I'm pretty ambivalent now. Circle of political life. The official LP positions on a whole host of issues is beyond unpalatable even for our heavily right-leaning electorate. Abolishing the WoD is a great policy idea, but it needs to be accompanied by more great ideas before Americans do more than pay lip service and pretend to Go Galt. Oh, and they have to rip out their Objectivist-center and hurl it into the sun.
anonymous

The Technium: Bootstrapping the Industrial Age - 0 views

www.kk.org/...bootstrapping_t.php

shared by anonymous on 14 Jun 13 - Cached
  • In February 1942, R. Bradley,  a British Officer in the Royal artillery in World War II was captured and then held prisoner by Japanese in Singapore. Their camp was remote, supplies were almost non-existent, and they were treated roughly as POWs; when they rebelled they were locked in a confinement shed without food.
  • But they were tinkerers, too. Together with some other POWs in his camp, Bradley stole hand tools from the Japanese soldiers and from these bits and pieces he transformed scrap metal into a miniature lathe.
  • It was tiny enough to be kept a secret, big enough to be useful.
  • ...16 more annotations...
  • The lathe was a tool-making egg; it was used to manufacture more sophisticated items.
  • During the two years of their interment the lathe remade the tools -- like taps and dies -- which were first used to create it. A lather has those self-reproductive qualities.
  • Over years of tinkering, Gingery was able to bootstrap a full-bore machine shop from alley scraps. He made rough tools that made better tools, which then made tools good enough to make real stuff.
  • Gingery began with a simple backyard foundry. This was a small 5-gallon bucket packed with sand.
  • In its center was a coffee can of smoldering BBQ charcoal. Inside the can of charcoal was a small ceramic crucible into which he threw scrap aluminum – cans, etc. Gingery forced air into this crude furnace via a fan, burning the charcoal with enough heat to melt the aluminum. He poured the molten metal into a mold of wet sand carved out in the shape he wanted. When the cast was cool he had a workable metal holding plate, which became the heart of a homemade lathe. Other lathe parts were cast. He finished these rough parts with hand tools. His one “cheat” was adding a used electric motor – although it is not impossible to imagine a wind or water powered version.
  • When the rough lathe was up and running he used it to turn out the parts for a drill press. With the drill press and lathe operating he constantly reworked pieces of the lathe itself, replacing parts with improved versions. In this way, his tiny machine shop was an upcreation device, capable of generating higher a machine of precision than itself.
  • Gingery recapitulated the evolution of technology, the great pattern by which simple tools create more complex tools and so on infinitum. This expansion of upcreation power is the means by which an entire culture lifts itself out of mud by pulling up on its bootstraps.
  • Yet is it obvious this little demonstration is not pure. As a way to make your own machine tools, Gingerys’ plans are fine and dandy. He uses cast off washing machine motors and other junkyard scrap parts to grow a fairly robust machine shop. But as an example of relaunching a technological society in a kind of Robinson Crusoe maneuver – landing somewhere and starting civilization up -- it’s a cheat because in this latter game you don’t get to start with discarded aluminum cans, scavenged nuts and bolts, old electric motors and waste sheet metal.
  • To really navigate the minimum bootstrap path through the industrial web, you’d have to start with finding your own ore, mining and refining it with primitive tools, firing up bricks, rolling out sheet metal, developing screws and bolts by hand – all just to get you to the point where you’d have enough tools and materials to make the simple 5-gallon bucket foundry that Dave Gingery started with.
  • Select at random any one of the many thousands items within the reach of where you now sit. None of them could exist without many of the others around it. No technology is an island.
  • Let’s take a very sophisticated item: one web page. A web page relies on perhaps a hundred thousand other inventions, all needed for its birth and continued existence. There is no web page anywhere without the inventions of HTML code, without computer programming, without LEDs or cathode ray tubes, without solid state computer chips, without telephone lines, without long-distance signal repeaters, without electrical generators, without high-speed turbines, without stainless steel, iron smelters, and control of fire. None of these concrete inventions would exist without the elemental inventions of writing, of an alphabet, of hypertext links, of indexes, catalogs, archives, libraries and the scientific method itself. To recapitulate a web page you have to re-create all these other functions. You might as well remake modern society.
  • This is why restarting a sophisticated society after a devastating setback is so hard. Without all the adjacent items in a given ecological bundle, a single technology can have no effect
  • you need them all working to get one working
  • The conundrum of disaster relief is a testimony to this deep interdependency: one needs roads to bring petrol but petrol to clear roads, medicines to heal people, but healthy people to dispense medicines, communications to enable organization but organization to restore communications. We see the interdependent platform of technology primarily when it breaks down.
  • This is also the explanation of why we should not confuse a good clear view of the future with a short distance. We can see the perfect outlines of where technology is going, but we tend to overestimate how soon it will come. Usually the delay (in our eager eyes) is due to the invisible ecology of other needed technologies that aren’t ready yet.
    • anonymous
      anonymous on 14 Jun 13
       
      Classic example that's relatable to nerds: Virtual Reality. In the '90's, the graphics tech wasn't close to where it needed to be. Also, ram prices and other hardware limitations (speed) made implementing it in any serious way a joke. Now, of course, the Oculus Rift is a consumer good. We don't call stuff "VR" anymore (as a buzzword), we just know we can buy a cool attachment that makes everything 3D.
  • The invention will hang suspended in the future for many years, not coming any closer the now. Then when the ignored co-technologies are in place it will appear in our lives in a sudden, with much surprise and applause for its unexpected appearance.
  • anonymous on 14 Jun 13
     
    "A favorite fantasy game for engineers is to imagine how they might re-invent essential technology from scratch. If you were stranded on an island, or left behind after Armageddon, and you needed to make your own blade, say, or a book, maybe a pair of working radios, what would it take to forge iron, make paper, or create electricity?"
anonymous

Invelox wind turbine claims 600% advantage in energy output - 0 views

www.gizmag.com/...27377

shared by anonymous on 14 Jun 13 - Cached
  • Invelox takes a novel approach to wind power generation as it doesn’t rely on high wind speeds. Instead, it captures wind at any speed, even a breeze, from a portal located above ground. The wind captured is then funneled through a duct where it will pick up speed. The resulting kinetic energy will drive the generator on the ground level. By bringing the airflow from the top of the tower, it’s possible to generate more power with smaller turbine blades, SheerWind says.
  • As to the sixfold output claim, as with many new technologies promising a performance breakthrough, it needs to be viewed with caution. SheerWind makes the claim based on its own comparative tests, the precise methodology of which is not entirely clear.
  • Besides power performance and the fact it can operate at wind speeds as low as 1 mph, SheerWind says Invelox costs less than US$750 per kilowatt to install. It is also claimed that operating costs are significantly reduced compared to traditional turbine technology. Due to its reduced size, the system is supposedly safer for birds and other wildlife, concerns that also informed the designers of the Ewicon bladeless turbine.
  • anonymous on 14 Jun 13
     
    "SheerWind, a wind power company from Minnesota, USA, has announced the results of tests it has carried out with its new Invelox wind power generation technology. The company says that during tests its turbine could generate six times more energy than the amount produced by traditional turbines mounted on towers. Besides, the costs of producing wind energy with Invelox are lower, delivering electricity with prices that can compete with natural gas and hydropower."
anonymous

The Universe is Indifferent to Your Illusion of Control - 0 views

theumlaut.com/...nt-to-your-illusion-of-control

shared by anonymous on 17 Jun 13 - Cached
  • Especially at a national scale, your vote does not make a difference in a democracy, no matter what institutional type of democracy we are talking about. Libertarians who recognize this fact tend to emphasize persuasion, but they are just as naive as the voters they make fun of.
  • The probability that your pet ideology will hit the diffusion of innovations jackpot, and that you will have had anything to do with it at all, are so vanishingly small that you might actually have a better shot of personally electing the next President of the United States.
  • If I love my local coffee shop, I am not really in a financial position to keep it operating by myself—my ability to enjoy what it offers depends entirely on other people’s willingness to spend money there.
  • ...6 more annotations...
  • This isn’t just about any random person’s experience with life; it is the universal human condition.
  • Even with all of the armed forces in occupied Japan at his disposal, Douglas MacArthur could not simply bend the fate of the nation to his will. You would think he could have written any constitution he pleased, pointed his guns, and said “sign!” But the reality is that he was enormously constrained, and made many compromises in order to get an approximation of his ideal constitution passed.
  • If Douglas MacArthur and his conquering army couldn’t do as they pleased in Japan, you are not going to get what you want in a national policy.
  • The stressors that are much closer to home, on the other hand, are those that we have some reasonable ability to influence.
  • If you participate in your homeowner’s association, neighborhood advisory board, and attend local hearings, you won’t be able to bend your circumstances to some ideal, but you will have some visible sway.
  • The only healthy way to live in a world you cannot control is to take pride in participating in something much larger than yourself—be it the community you live in, civil society, or one of the many communities of scholars. Participate, focus on a craft that takes a lifetime to master, and release the illusion of control.
  • anonymous on 17 Jun 13
     
    "I have had many friends for whom the passion for politics infected them like a debilitating disease. They have such a clear vision for where they believe our policies should end up, and who the good guys and bad guys are in the struggle to take and hold public office. Reality was never going to move to satisfy their one specific story of the world, and so they ended up bitter and angry, and, ultimately, disenchanted and burned out. I have gone through these stages at various times in my own life, but in the end it is clear to me that we emotionally invest far too much in forces and circumstances we could never hope to influence. A healthier life is one spent treating policy, institutions and fashions generally as no different from any other sort of random volatility, and focusing on the small sphere we have some measure of impact on."
anonymous

Nostalgia, Hope, and Fear on the Path to 30 June - 0 views

www.jadaliyya.com/...nd-fear-on-the-path-to-30-june

shared by anonymous on 29 Jun 13 - Cached
  • Last year, it seemed that it was mostly wealthy “feloul” (Arabic for remnants) who took the visible lead in mourning Mubarak’s downfall.
  • Yet this year, those very same “feloul” removed their fixation from the past and clung onto a new hope. They were no longer talking about Mubarak. Instead “feloul”, who seek to bring down the Brotherhood, have become vehement supporters of the Tamarod campaign, while numerous politically ambivalent working people vociferously lament the fall of Mubarak.
  • This year, that hope seems to be replaced with a feeling of despair. Frequently, I would heard people say “we were better off under Mubarak,” and that Mubarak really was not that bad in comparison to what they are living now.
  • ...4 more annotations...
  • I was hard-pressed to find anyone who approves of the direction in which the country is going.
  • Over fifteen million people have signed onto the Tamarod campaign, removing their faith in President Morsi and calling for early elections.
  • In general there is merely a whiff of hope, but among the believers there is great confidence that when the time is right and should the people choose to do so, the populace is empowered to remove Morsi just as they removed Mubarak.
  • As a boat captain from Qena told me, “We took Mubarak down in eighteen days. If we want to take down Morsi, we will take down Morsi.”
  • anonymous on 29 Jun 13
     
    Only with this post do I realize that this isn't actually a 'geopolitical' piece per se. I seem to lump geopolitics together with foreign politics. I guess I see them as two halves of the same whole: Big picture path of nations stuff, and other, local politics that we care little for due to our highly provincial nature. Thanks to Ed Webb for the pointer. "The sentiment on the streets of Cairo has changed immensely over the course of the past year. Last year people could not help themselves from talking about the presidential election. This year, everyone is talking about the current situation of the country-most notably, the everyday experience of living in instability, the impending face-off between what is popularly characterized as Pro-Mohamed Morsi and Anti-Morsi camps, and the golden question of what next? One of the most striking differences that I have witnessed between June 2012 and June 2013 is the magnitude of people's hopes, fears, and nostalgia for the past."
anonymous

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

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

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

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?"
anonymous

Egypt: The Dangers and Limits of Intensifying Violence - 0 views

www.stratfor.com/...d-limits-intensifying-violence

shared by anonymous on 08 Jul 13 - Cached
  • It is not entirely clear what led to the shooting, with the military reporting that pro-Morsi "terrorists" sought to climb the walls of the Republican Guards headquarters where Morsi is being held and the Brotherhood claiming that the attack was unprovoked. The Muslim Brotherhood's political arm, the Freedom and Justice Party, called for a general uprising in Egypt and called on the international community to intervene to prevent further "massacres." The military also closed the Brotherhood's Cairo headquarters, claiming that stockpiled weapons were found inside.
  • The Brotherhood understands that it is unlikely to be able to restore the Morsi presidency and is thus trying to create a situation in which the military cannot impose a new political order.
  • Such a strategy involves weeks, if not months, of civil unrest, which entails considerable risks. Though the Brotherhood is a well-disciplined organization, some of its elements could be radicalized by the Morsi ouster and the clashes that have been taking place since.
  • ...4 more annotations...
  • Indeed, al Qaeda-style jihadists who have long condemned democracy as un-Islamic are seizing upon Morsi's ouster to reiterate that the Muslim Brotherhood's participation in mainstream politics cannot succeed, and change can only be brought about through armed struggle, as in Syria.
  • This is a problem for both the Brotherhood and its opponents, as neither wants jihadists to exploit their enmity.
  • it is unlikely that transnational jihadists will be able to steer Egypt toward a civil war like Algeria's during the 1990s or post-Arab Spring Syria's. That said, Egypt is likely to see its share of violence (in many cases in the form of militant attacks) as a result of many other factors.
  • With the Brotherhood's senior leadership in jail, the mainstream Islamist movement may not be able to control the unrest it is currently fomenting. Jihadist forces, realizing that the window of opportunity for them is narrow, would like to prevent any compromise between the military and the Brotherhood in the short term. Therefore, the duration and intensity of the crisis in Egypt will depend upon the Brotherhood and the military's ability (or lack thereof) to reach a political compromise.
  • anonymous on 08 Jul 13
     
    "The latest deadly clashes in Cairo are likely to undermine the Egyptian military's plans for the country and push it toward greater violence. The political unrest in Egypt sparked by the ouster of President Mohammed Morsi worsened when at least 42 supporters of Morsi's Muslim Brotherhood were killed and another 300 were wounded in a confrontation with security forces outside the Republican Guards officers' club July 8."
anonymous

Questions Surround the Netherlands' Future - 0 views

www.stratfor.com/...ns-surround-netherlands-future

shared by anonymous on 19 Jul 13 - No Cached
  • In light of its economic problems and its leadership's waning popularity, the Netherlands will likely soften austerity measures in the short- and medium-term. In May, the European Commission gave The Hague permission to miss its deficit target for 2013. The country will probably fail to meet the required EU deficit goals again in 2014 -- the Dutch government has become increasingly worried about the negative effects of expedited spending cuts. While the European Commission is likely to pressure The Netherlands to implement additional spending cuts, it probably will not punish the country when it does not comply with those demands.
  • This goes beyond austerity measures; the Dutch parliament is currently assessing its broader relationship with the European Union. In a document released in June, the Dutch Cabinet indicated that no additional concessions of sovereignty should be made to supranational institutions, and that The Hague should keep as many of its own prerogatives as possible.
  • Because of its physical location in Europe, the Netherlands keeps strong political and economic ties with France and Germany. The Dutch will avoid any meaningful policy decisions until after Germans elections, which are scheduled for late September. The Hague will not openly criticize Berlin or Brussels as Paris has, but it will pursue a more independent fiscal policy by relaxing austerity at home in order to avoid a further drop in popular support.
  • ...3 more annotations...
  • Regardless of who governs Germany after September, in the short term Europeans will have to debate measures to reactivate financing for small- and medium-sized companies to try to stimulate economic growth and create new jobs.
  • In the long term, Germany and France will have to begin discussions for reforming European treaties. EU institutions and member states simply are reaching the limits of what they can do in the bloc's current institutional framework.
  • Both negotiations will force the Netherlands to define its position in Europe. As a country that traditionally relies on trade, the Netherlands will support any measure that protects the European free trade agreements -- which means that The Hague will not opt out of the European Union.
  • anonymous on 19 Jul 13
     
    "In a new indication that the economic crisis has reached the eurozone's core countries, the Dutch statistics office announced today that seasonally adjusted unemployment reached 8.5 percent in June, up from 6.3 percent the previous year. Clearly the EU unemployment crisis is far from over, and the bloc's structural weaknesses continue to affect even Europe's politically and economically stable nations."
anonymous

Leaked report shows high civilian death toll from CIA drone strikes - 0 views

www.salon.com/...th_toll_from_cia_drone_strikes

shared by anonymous on 22 Jul 13 - No Cached
  • The leaked document – which the Bureau obtained from three separate sources – is based on field reports by government officials rather than on media coverage. The Bureau understands that the document is continually updated as attacks occur – although the copy obtained ends with a strike on October 24 2009.
  • Read the full internal Pakistani document.
  • Each tribal area such as North Waziristan is administered by a Political Agent and his assistants. Beneath them are agents known as tehsildars and naibs who gather information when drone strikes occur – the names and identities of those killed, damage to property and so on. Additional information is also drawn from the khassadar - the local tribal police – and from paid informants in villages.
  • ...2 more annotations...
  • Ambassador Rustan Shah Mohmand, who was a senior administrator in the tribal areas for 25 years between 1973 and 1998, cautions that the released file might not be the fullest data available.Noting that Pakistan’s military is responsible for security in FATA, he told the Bureau: ‘Tribal documents might present a broad picture. But any accuracy is dependent on what data the military chooses to release to or withhold from the political agents. In the last eight years, for example, no precise casualty figures have ever been submitted to Pakistan’s parliament.’
  • ‘How come the same civil servants are feeding one kind of data to the Peshawar High Court and another kind of data to the FATA secretariat?’ asked Shahzad Akbar, the Pakistani barrister behind the successful Peshawar case. ‘Are they fudging the numbers based on who was on the receiving end?’US counter-terrorism officials declined to comment on the specifics of the leaked document, though referred the Bureau to recent comments by both President Obama and CIA Director Brennan stating that the US goes to great lengths to limit civilian deaths in covert drone strikes.
  • anonymous on 22 Jul 13
     
    "A secret document obtained by the Bureau of Investigative Journalism reveals for the first time the Pakistan government's internal assessment of dozens of drone strikes, and shows scores of civilian casualties."
anonymous

Recognizing the End of the Chinese Economic Miracle - 0 views

www.stratfor.com/...g-end-chinese-economic-miracle

shared by anonymous on 23 Jul 13 - No Cached
  • A crisis can exist before it is recognized.
  • The admission that a crisis exists is a critical moment, because this is when most others start to change their behavior in reaction to the crisis.
  • First, The New York Times columnist and Nobel Prize-recipient Paul Krugman penned a piece titled "Hitting China's Wall." He wrote, "The signs are now unmistakable: China is in big trouble.
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  • Later in the week, Ben Levisohn authored a column in Barron's called "Smoke Signals from China." He wrote, "In the classic disaster flick 'The Towering Inferno' partygoers ignored a fire in a storage room because they assumed it has been contained. Are investors making the same mistake with China?"
  • Meanwhile, Goldman Sachs -- where in November 2001 Jim O'Neil coined the term BRICs and forecast that China might surpass the United States economically by 2028 -- cut its forecast of Chinese growth to 7.4 percent. 
  • The New York Times, Barron's and Goldman Sachs are all both a seismograph of the conventional wisdom and the creators of the conventional wisdom. Therefore, when all three announce within a few weeks that China's economic condition ranges from disappointing to verging on a crash, it transforms the way people think of China.
  • Now the conversation is moving from forecasts of how quickly China will overtake the United States to considerations of what the consequences of a Chinese crash would be. 
  • Suddenly finding Stratfor amid the conventional wisdom regarding China does feel odd, I must admit. Having first noted the underlying contradictions in China's economic growth years ago, when most viewed China as the miracle Japan wasn't, and having been scorned for not understanding the shift in global power underway, it is gratifying to now have a lot of company.
  • One of the things masking China's weakening has been Chinese statistics, which Krugman referred to as "even more fictional than most."
  • China is a vast country in territory and population. Gathering information on how it is doing would be a daunting task, even were China inclined to do so. Instead, China understands that in the West, there is an assumption that government statistics bear at least a limited relationship to truth. Beijing accordingly uses its numbers to shape perceptions inside and outside China of how it is doing.
  • The Chinese release their annual gross domestic product numbers in the third week of January (and only revise them the following year). They can't possibly know how they did that fast, and they don't. But they do know what they want the world to believe about their growth, and the world has believed them -- hence, the fantastic tales of economic growth. 
  • China in fact has had an extraordinary period of growth. The last 30 years have been remarkable, marred only by the fact that the Chinese started at such a low point due to the policies of the Maoist period.
  • Growth at first was relatively easy; it was hard for China to do worse. But make no mistake: China surged. Still, basing economic performance on consumption, Krugman notes that China is barely larger economically than Japan. Given the compounding effects of China's guesses at GDP, we would guess it remains behind Japan, but how can you tell? We can say without a doubt that China's economy has grown dramatically in the past 30 years but that it is no longer growing nearly as quickly as it once did.
  • China's growth surge was built on a very unglamorous fact: Chinese wages were far below Western wages, and therefore the Chinese were able to produce a certain class of products at lower cost than possible in the West.
  • China had another essential policy: Beijing was terrified of unemployment and the social consequences that flow from it. This was a rational fear, but one that contradicted China's main strength, its wage advantage.
  • Growing the economy is possible, but not growing profitability. Eventually, the economy will be dragged down by its inefficiency. 
  • As businesses become inefficient, production costs rise. And that leads to inflation. As money is lent to keep inefficient businesses going, inflation increases even more markedly. The increase in inefficiency is compounded by the growth of the money supply prompted by aggressive lending to keep the economy going. As this persisted over many years, the inefficiencies built into the Chinese economy have become staggering. 
  • The second thing to bear in mind is the overwhelming poverty of China, where 900 million people have an annual per capita income around the same level as Guatemala, Georgia, Indonesia or Mongolia ($3,000-$3,500 a year), while around 500 million of those have an annual per capita income around the same level as India, Nicaragua, Ghana, Uzbekistan or Nigeria ($1,500-$1,700).
  • China's overall per capita GDP is around the same level as the Dominican Republic, Serbia, Thailand or Jamaica.
  • Stimulating an economy where more than a billion people live in deep poverty is impossible. Economic stimulus makes sense when products can be sold to the public.
  • The Chinese have maintained a strategy of depending on exports without taking into account the operation of the business cycle in the West, which means that periodic and substantial contractions of demand will occur. China's industrial plant is geared to Western demand. When Western demand contracted, the result was the mess you see now.
  • The Chinese can prevent the kind of crash that struck East Asia in 1997. Their currency isn't convertible, so there can't be a run on it. They continue to have a command economy; they are still communist, after all. But they cannot avoid the consequences of their economic reality, and the longer they put off the day of reckoning, the harder it will become to recover from it.
  • The Chinese are not going to completely collapse economically any more than the Japanese or South Koreans did. What will happen is that China will behave differently than before. With no choices that don't frighten them, the Chinese will focus on containing the social and political fallout, both by trying to target benefits to politically sensitive groups and by using their excellent security apparatus to suppress and deter unrest.
  • The Chinese economic performance will degrade, but crisis will be avoided and political interests protected. Since much of China never benefited from the boom, there is a massive force that has felt marginalized and victimized by coastal elites. That is not a bad foundation for the Communist Party to rely on.
  • The Chinese are, of course, keeping a great deal of money in U.S. government instruments and other markets. Contrary to fears, that money will not be withdrawn. The Chinese problem isn't a lack of capital, and repatriating that money would simply increase inflation.
  • Had the Chinese been able to put that money to good use, it would have never been invested in the United States in the first place.
    • anonymous
      anonymous on 23 Jul 13
       
      I'm having a hard time following all the econ stuff, but I understand this to mean that the U.S. is 'old reliable': Not an investment of last resort, but an investment to run to when you don't have a sure thing.
  • Rather than the feared repatriation of funds, the United States will continue to be the target of major Chinese cash inflows.
  • In a world where Europe is still reeling, only the United States is both secure and large enough to contain Chinese appetites for safety. Just as Japanese investment in the 1990s represented capital flight rather than a healthy investment appetite, so the behavior we have seen from Chinese investors in recent years is capital flight:
  • money searching for secure havens regardless of return. This money has underpinned American markets; it is not going away, and in fact more is on the way. 
  • The major shift in the international order will be the decline of China's role in the region. China's ability to project military power in Asia has been substantially overestimated.
  • Its naval capacity is still limited compared with the United States. The idea that it will compensate for internal economic problems by genuine (as opposed to rhetorical) military action is therefore unlikely.
  • In our view, the most important shift will be the re-emergence of Japan as the dominant economic and political power in East Asia in a slow process neither will really want.
  • China will continue to be a major power, and it will continue to matter a great deal economically. Being troubled is not the same as ceasing to exist. China will always exist. It will, however, no longer be the low-wage, high-growth center of the world. Like Japan before it, it will play a different role.
  • anonymous on 23 Jul 13
     
    "Major shifts underway in the Chinese economy that Stratfor has forecast and discussed for years have now drawn the attention of the mainstream media. Many have asked when China would find itself in an economic crisis, to which we have answered that China has been there for awhile -- something not widely recognized outside China, and particularly not in the United States."
anonymous

Nate Silver's genius isn't math. It's journalism. - 0 views

www.washingtonpost.com/...enius-isnt-math-its-journalism

shared by anonymous on 24 Jul 13 - No Cached
  • The typical answer to this is, well, “the election.” But getting the election right was no great feat.
  • The betting markets got the election right. The pollsters got the election right. The polling aggregators, like Real Clear Politics, got the election right. The modelers — which included Silver, but also included Sam Wang and Drew Linzer, among others — got the election right. Wonkblog’s election model called the election right — and it did it in June.
  • The truth is that 2012 just wasn’t a very hard election to call. The polling data all pointed in the same direction
  • ...7 more annotations...
  • Silver had two other innovations, both of which are, I think, more important in explaining the appeal — and potential scalability — of his work.
  • The first is that his model begins many, many months before the election, and long before the polls become particularly predictive or frequent. 
  • I think of that model as a journalistic innovation more than a statistical one.
  • But if that early model didn’t work to predict the election, it served Silver’s other, and most important, journalistic strength: narrativizing the data.
  • The way a lot of horserace coverage deals with this problem is by blowing up unimportant news — gaffes and ads and the like — into stories that makes the readers feel like they’re learning urgent new facts about the campaign even as nothing changed that day and whatever gaffe or ad or speech got made stands almost no chance of influencing the campaign.
  • There’ve been election models before Silver’s. But their proprietors proudly stood in opposition to this trend. They pointed to their models and said, “See? Most of this stuff doesn’t matter, and there’s no reason to be covering it.” Analytically, they might well have been right about that. But people still wanted to read about the election.
  • Silver’s reputation as a math wizard often obscures his innovations as a journalist. But it’s the latter that makes him such a valuable hire for ESPN and ABC News.
  • anonymous on 24 Jul 13
     
    "The news that Nate Silver is leaving the New York Times for a role at ESPN and ABC News (corporate synergies! They're a thing!) has occasioned some interesting posts on what he got right during the election."
anonymous

China's Geopolitical Fallout - 0 views

www.stratfor.com/...chinas-geopolitical-fallout

shared by anonymous on 24 Jul 13 - No Cached
  • China's leaders will likely survive this trial. But what if they don't? What if China faces a severe socio-economic crisis and attendant political one of an unforeseen magnitude? What would be the second-order geopolitical effects? If Syria explodes, it does so regionally. If China explodes, it does so globally.
  • Such a crisis could lead to an upsurge in nationalism, an emotion that can be easily dialed upwards by Communist party leaders as a means of clinging to power.
  • China's defense budget has already increased eight-fold since 2001, and might continue to do so under a more nationalist-style regime (even amid slowing growth), enabling China to further implement an anti-access area-denial strategy in the East and South China seas, emphasizing submarine, ballistic missile, and cyber warfare capabilities.
  • ...13 more annotations...
  • The aim would not be to go to war with the U.S. Navy and Air Force (quite the opposite, in fact), but to establish a force ratio more favorable to the continued, perceived growth of Chinese maritime power. But none of this would alter the current state of play in the Indian and Western Pacific oceans -- defined by a slowly diminishing unipolar American air and naval environment.
  • But what if the opposite occurred? What if an economic and political crisis ignited a downward trend in Chinese military procurements, or at least a less steep growth curve?
  • This is also quite possible: to assuage public anger at poverty and lack of jobs, China's leaders might, for political reasons, ask the military to make sacrifices of its own. After all, a Chinese Spring might be all about demanding more freedom and not about nationalism. Over time, this could affect the foundations of the Eurasian maritime order, albeit to a lesser extent than the collapse of the Berlin Wall shook the foundations of the European continental order.
  • Stalled Chinese defense budgets would reinvigorate a Pax Americana from the Sea of Japan to the Persian Gulf, despite the debacles of the Iraq and Afghanistan wars, and despite the U.S. military budget crunch.
  • Remember that Japan occupied Korea from 1910 to 1945, and the hostility between Japan and Korea is thus much greater than the hostility between Korea and China.
  • With more than 1,500 ballistic missiles aimed at Taiwan from the mainland and 270 commercial flights per week between the two Chinas, U.S. military aid to Taipei is designed to defend Taiwan against a sudden Chinese attack, but not necessarily to postpone an inevitable unification of sorts.
  • India, like Vietnam and Taiwan, gains most from a profound economic and political crisis inside China. Suddenly China would be more vulnerable to ethnic unrest on the Tibetan plateau abutting the Indian subcontinent.
  • This would not necessarily alleviate the Chinese threat on India's northern borderlands (given the possibility of heightened ethnic unrest inside an economically weakened China), but it would give India greater diplomatic leverage in its bilateral relations with Nepal, Bangladesh, Sri Lanka, and Myanmar, all of which have been venues for the quiet great game India has been playing with China.
  • If India were among the biggest winners in the event of severe Chinese internal turmoil, Pakistan would be the biggest loser. China has been Pakistan's greatest and surest patron in recent decades, and has given Pakistan stores of infrastructure aid -- highways in the north and a port in the south -- without lectures about human rights and terrorism, or threats about withdrawing aid.
  • Such a bleak scenario for China overall would leave the United States and its allies -- both de facto like India and Vietnam, and de jure like Japan and Australia -- in a commanding position around Eurasia's navigable southern rimland.
  • But such a scenario is unlikely, even if the Chinese economy significantly slows and domestic unrest follows. More likely will be a tumultuous period of consolidation and readjustment within China, with China's strategic and military planners able to weather the storm with adjustments of their own for the long term.
  • But there is a larger point: geopolitics, while ostensibly about the geographically-constrained interactions of states, rests also on the internal conditions of states themselves, in which the actions of individuals are crucial and so much hangs on a thread.
  • While both the United States and China face epochal budgetary and economic crises -- which in both countries bleed over into the political realm -- the crisis in China is far more profound than in the United States. After all, the system of governance in Washington simply enjoys so much more legitimacy than the one in Beijing, with the American public institutionally better equipped to vent its frustrations than the Chinese one. Such internal realities will remain the overriding geopolitical facts in Asia.
  • anonymous on 24 Jul 13
     
    "The biggest question in international affairs has nothing to do with Syria or Iran going nuclear. It is has to do with the state of the Chinese economy, and the ability of China's one-party system to navigate through an economic slowdown to a different growth model."
anonymous

The PC16: Identifying China's Successors | Stratfor - 0 views

www.stratfor.com/...-identifying-chinas-successors

shared by anonymous on 30 Jul 13 - No Cached
  • China will have to behave differently from the way it does now, and thus other countries are poised to take its place.
  • Since the Industrial Revolution, there have always been countries where comparative advantage in international trade has been rooted in low wages and a large work force. If these countries can capitalize on their advantages, they can transform themselves dramatically. These transformations, in turn, reorganize global power structures.
  • When it is not in the throes of war, trade reshapes the international order. After World War II, Germany and Japan climbed out of their wreckage by using their skilled, low-wage labor to not only rebuild their economy but to become great exporting powers.
  • ...18 more annotations...
  • It's not just their work; it's their way of life. As workers move to factories, the social fabric is torn apart. But that rending of life opens the door for a mobile workforce able to take advantage of new opportunities. Traditional life disappears; in its place stand the efficiencies of capitalism.
  • As the process matures, low wages rise -- producing simple products for the world market is not as profitable as producing more sophisticated products -- and the rate of growth slows down in favor of more predictable profits from more complex goods and services. All nations undergo this process, and China is no exception. This is always a dangerous time for a country. Japan handled it well. China has more complex challenges.
  • Low-wage countries seize the opportunity and climb upon the escalator of the international system, and with them come the political and business elite and the poor, for whom even the brutality of early industrialism is a relief.
  • In looking at this historically, two markers showed themselves. One is a historical first step: garment and footwear manufacturing, a highly competitive area that demands low wages but provides work opportunities that the population, particularly women, understand in principle. A second marker is mobile phone assembly, which requires a work force that can master relatively simple operations. Price matters greatly in this ruthlessly competitive market.
  • We were not looking for the kind of large-scale movements that would be noticed globally, but the first movements that appear to be successful. Where a handful of companies are successful, others will follow, so long as there is labor, some order and transportation.
  • Some things are not necessary or expected. The rule of law, understood in Anglo-Saxon terms of the written law, isn't there at this stage. Things are managed through custom and relationships with the elite. Partnerships are established. Frequently there is political uncertainty, and violence may have recently occurred. These are places that are at the beginning of their development cycle, and they may not develop successfully. Investors here are risk takers -- otherwise they wouldn't be here.
  • The Cultural Revolution had ended a few years before. It was a national upheaval of violence with few precedents. Mao Zedong died in 1976, and there had been an intense power struggle, with Deng Xiaoping consolidating power in 1977. China was politically unstable, had no clear legal system, sporadic violence and everything else that would make it appear economically hopeless. In fact, Egbert F. Dernberger and David Fasenfest of the University of Michigan wrote a paper for the Joint Economic Committee of Congress titled "China's Post-Mao Economic Future." In this paper, the authors state: "In the next seven years as a whole, the rate of industrial investment and production, more than the total of the last 28 years, imply a level of imports and industrial labor force such that the exports, transportation facilities, social overhead capital, energy and middle-level technical personnel requirements would exceed any realistic assessment of Chinese capabilities."
  • I don't mean to criticize the authors. This was the reasonable, conventional wisdom at the time. It assumed that the creation of infrastructure and a managerial class was the foundation of economic growth. In fact in China, it was the result of economic growth. The same can be said for rule of law, civil society, transparency and the other social infrastructure that emerges out of the social, financial and managerial chaos that a low-wage economy almost always manifests.
  • Low-wage societies develop these characteristics possibly out of the capital formation that low-wage exports generates. The virtues of advanced industrial society and the advantages of pre-industrial society don't coincide.
  • There is no single country that can replace China. Its size is staggering. That means that its successors will not be one country but several countries, most at roughly the same stage of development.
  • The point to emphasize is that identifying the PC16 is not a forecast. It is a list of countries in which we see significant movement of stage industries, particularly garment and footwear manufacturing and mobile phone assembly.
  • we have excluded countries growing because of energy and mineral extraction. These countries follow different paths of development. The PC16 are strictly successors to China as low wage, underdeveloped countries with opportunities to grow their manufacturing sectors dramatically.
  • When you look at map, much of this new activity is focused in the Indian Ocean Basin. The most interesting pattern is in the eastern edge of Sub-Saharan Africa: Tanzania, Kenya, Uganda and Ethiopia. Sri Lanka, Indonesia, Myanmar and Bangladesh are directly on the Indian Ocean.
  • A special word needs to be included on Mexico. The area north of Mexico City and south of the U.S. borderlands has been developing intensely in recent years. We normally would not include Mexico but the area in central-southern Mexico is large, populous and still relatively underdeveloped.
  • It is in this area, which includes the states of Campeche, Veracruz, Chiapas and Yucatan, where we see the type of low-end development that fits our criteria. Mexico's ability to develop its low-wage regions does not face the multitude of challenges China faces in doing the same with its interior.
  • All of this has to be placed in context. This is not the only growth process underway. It is most unlikely that all of these countries will succeed. They are not yet ready, with some exceptions, for advanced financial markets or quantitative modeling. They are entering into a process that has been underway in the world since the late 1700s: globalism and industrialism combined.
  • It can be an agonizing process and many have tried to stop it. They have failed not because of their respective ruling classes, which would have the most to lose. It doesn't take place because of multinational corporations. They come in later. It takes place because of profit-driven jobbers who know how to live with instability and corruption. It also takes place because of potential workers looking to escape their lives for what to them seems like a magnificent opportunity but for us seems unthinkable.
  • The parabola of economic development dictates that what has not yet risen will rise and eventually fall. The process unleashed in the Industrial Revolution does not seem to be stoppable. In our view, this is the next turning of the wheel.
  • anonymous on 30 Jul 13
     
    "China has become a metaphor. It represents a certain phase of economic development, which is driven by low wages, foreign appetite for investment and a chaotic and disorderly development, magnificent in scale but deeply flawed in many ways. Its magnificence spawned the flaws, and the flaws helped create the magnificence."
anonymous

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."
  • ...21 more annotations...
  • 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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