Paradigm Shift

Stephen Walt looks at 9 centrifugal developments rearranging the world now.  Here they are in short line versions, italicized, followed by my comments:




1. The financial crisis has put the Eurozone under unprecedented stress, and the European Union's future looks increasingly bleak.


We've made EUro-pe a gift it couldn't resist, the Greek crisis.  I'm not sure about the Germans' role in this, nor the French capitulation from pulling its traditionally pro-European levers.  Are the Germans finally setting themselves free of the post-WWII system of checks and balances, or they've learned how to play the IMF to their advantage?


2. NATO looks more and more obsolescent.

 The money has run out at the underwriting center of the alliance, while the rest have grown entitled to its benefits.


3. The Arab world is in upheaval, and seems likely to remain unsettled for years.

I wrote here that things were entering the territory of luck. I wrote elsewhere that I saw the whole thing as a measure of our despair.


4. In fact, the "Arab spring" has done nothing to improve the U.S. image in the region.

The departure of Mubarak has put many on notice, they are nervous about it and closing ranks.  Thus, we pay more for gas at the pump.  Sure, it's got nothing to do with current supply-demand, but the smell of gunpowder in the oil lands.  The Chinese are watching.


5. There may be a mounting power struggle in Iran, but its slow march toward a latent nuclear capability continues. 


Wishful thinking--Clinton should have taken the Iranian hand when we were offered; as of now, we've got no leverage with the alternative power structures there.

6. The Afghan War will end -- but not soon -- and we will leave behind a dysfunctional country, a nuclear-armed Pakistan, and a lot of people who will either be angry for us for what we did or angry at us for what we failed to do.

Not knowing when to enter, what to do, and when the get out of wars is a sign of a dysfunctional military policy.  The tail wags the dog, or the military action is the best diversion each time the honchos on Wall Street and in DC run out of options.


7. Japan -- which is still the world's third largest economy -- has suffered nearly two decades of economic stagnation and a costly nuclear disaster.


Japan is going its way, they must be looking for that way as we speak.  They must have loved us so much that only their inertia is keeping that door from kicking our rear ends.  Common values?  Let's call that for short, the world order of the dollar.   


8. China continues to rack up impressive rates of economic growth -- despite some signs of strain -- and it has avoided the foreign policy sinkholes that Washington has specialized in for the past two decades.


China operates with different scales.  We have not developed a sense for how they think, nor who they are.  Which is quite the opposite viewed from their end.  The game is theirs, and many a US friend is looking up, openly or not, for the day they can play China against the US for a better place at the table.  How things are going to be sorted out in Libya is likely to be the answer of the world to come. 

We have the first post WWII generation to make it into the White House and the executive offices around the country to thank for this.  Small-world minded, deluded by the "world is flat" platitudes, overconfident, and self-important.  They  wasted most of the hard work, lessons of history, good will of the world and other national intrinsic assets, all built over many decades since the 1930s.


9. As these various problems mount, America's political institutions seem increasingly paralyzed.

This is the symptom of a country that stopped learning because the feedback supposed to help us correct and improve had been distorted by the imaginary mind games our elites indulged themselves and led everybody else into.  For example, recall the idea circulated early during our Iraq invasion in the Bush administration, reality doesn't matter, what we say it is becomes reality.  This was rather the expression of how detached we've become from reality, not some play on words by those funny academics feeding Bush options.

Walt opens his thoughts with Yates' poem:


Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity...

For the full text on each one of the above, follow the pointer to Walt's blog with Foreign Policy.

The many lives of an idea(list)

In the spring of 2008, I raised the following question/topic on LinkedIn:

...too much money got into the hands of too many people too fast?

Considering all current and near-future dramatic developments (e.g. environment, prices, trust in financial markets, etc.) could one argue that the world is trying to heal a disease whose symptoms include "too much money got into the hands of too many people too fast?"

People kind of got the idea, but not exactly--follow the above link to see for yourself.  Had I raised the same question today, probably the answers would be different.  But this is not the main point, for I've gotten used to waiting until people pass corners so they see what I sometimes talk about.  The main point is how this little episode illustrates again what Keynes said:

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood...
Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.

Case in point, I've just discovered this:

In a 1930 essay titled “Economic Possibilities for our Grandchildren,” John Maynard Keynes ridiculed economists for having a high opinion of themselves and their work. As the Great Depression engulfed the world, Keynes looked back at historic rates of economic growth, arguing that the real problem people would face in the future was not poverty but the moral quandary of how to live in a society of such abundance and wealth that work would cease to be necessary. The “economic problem,” as he put it, was technical, unimportant in the larger scheme of things. “If economists,” he wrote, “could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!” (source: The Nation)

I could have described the problem I saw also in moral terms, yet I must have chosen to operate with the discursive tools of the time and place;  LinkedIn being a professional network, moral argument does not weigh as much as money--I wonder if anything changed  In essence, I stumbled upon the footprints of a defunct economist.

白隠

Obama's put option

NYTimes has a piece on the weak economic recovery:

Economy’s Woes Shift the Focus of Budget
By JACKIE CALMES
Recent signs that the economic recovery is flagging have introduced a new tension into the bipartisan budget negotiations.

The general assumption, which I have not shared, is that the money handed to banksters was meant to stimulate economic recovery to pre-2008 levels.  I argued here that our non-bubble economy has shrunk and people become unskilled to the point that the trillions spent by Bush and Obama could only be intended to prop the status qvo ante. Why are people looking for reversing a trend? Because they were told so.  Like in the past, except that our money is increasingly perceived as mostly backed by paper, by those who push gold above $15oo or switch from dollars to other currencies.

After the .com bubble there has been little in terms of sustainable economy that could use stimulus. Let's not forget, bubble money went into the real-estate and war economies. This had taken place while the effects of offshoring were masked by cheap (also subsidized) imports.

Some wake up now and ask for stimulus, yet others in the world have been awake, at least since the crisis in 2008. The latter are not willing to finance us anymore, hence the difficulty of dancing round the deficit vs. stimulus opposite poles.

I think those who fight deficits aim at accomplishing several things, of which one is ignored in the current debate: the external credibility of our system. I'm afraid that's been eroded and we are only seeing how people take calculated steps away from US. The recent Libyan episode is but an incomplete exception, which may itself prove to be temporary.

So, while I can understand why there isn't and won't be a stimulus, I cannot understand why

1. People expect more stimulus, though it takes one to learn; 
2. People like Krugman call for more stimulus, since he's a learned man;
3. The burden is not equally shared. By this, I mean the absence of higher taxation at the top, as in progressive tax.  A VAT system, excluding those items that the lower income people depend on, may also be an option.

What are we afraid of? That everybody with money is going to start learning Chinese? I'm more apprehensive about Geithner's keeping his job, for he is Obama's put option on the status qvo.

________________
A version of this has been posted at the NYTimes blog.

The Power of Stories

A recent NYTimes article informs us about the Chinese plan to redirect massive amounts of water to their dry north from their wet south.  Here are two reader comments that show how stories can be points of contact or rather insulators between individuals, their experiences, values, and beliefs:

 

Sandy Lewis

Lewis Family Farm, Essex, New York (20 votes)

Edward Wong's account of China's Army Corps equivalent offers many lessons. LA is one. There are hundreds of others.

When man seeks to conquer his environment, duck. Mother Nature wins, sooner or later.

No dam will last forever. No canal will last. Nothing man builds will outlast Mother Nature.

When we oppose the forces of nature, we defy logic. It is so much easier to work with nature - and allow the natural order of things.

Many feel organic farming is a passing fad, a joke, simply silly. Well, it's cheaper, it's better, it's more tasty, and it's healthy for the soils, rivers, estuaries, oceans and atmosphere. And it's smarter by far.

The chemical giants have their need, the children have theirs.

Similarly, drought in China is but the message.

Hubris is expensive stuff. Always fails, sooner or later.

China is old, China is young, China is a despotic dictatorship, corrupt top down.

The Chinese people do not vote. The Chinese people are cannon fodder for the ruling class.

This is totalitarianism. The scale of things in China dwarfs all others.

The scale of the failure in China will dwarf all others.

There is no question where this stuff will end.

There is only the question of when.

End it will - in disaster.

Mankind needs to learn, again and again. It's almost as if there is no memory, no inherent logic.

Animals know more that we.

Anonymous

Seattle, WA (6 votes)

Your facile and percussive claims about mother nature don't change the way the world works. Your little paragraphs remind me of the things a child might throw around because he can't have more candy: they're not only futile, but embarrassing. Let me explain how the world works. I'll use the nice, simple sentences of which you and your ilk are fond:

We use science to make plants grow better. Science lets us grow more food on the same amount of land.

Without science, we would have less food. The remaining food would be a lot more expensive. We would use a lot more land to grow food. Land that is used for growing food can't be forests or parks or wetlands for migrating songbirds.

Organic farming makes farmers till the soil to get rid of weeds. Tilling makes the topsoil easier to wash away. The topsoil can't be replaced. Half of Iowa is already gone. Plants need topsoil to grow. Without topsoil, there is no food. Starvation is not good for children and other living things.

We need water. We know how to bring water from places with more than enough to places that do not have enough. That is a good thing. When water goes from a high place to a low place, we get free electricity by building a dam. Dams need to be fixed once a while. They work fine if we take care of them. If people like you let us.

You believe that mother nature a nice old lady would provide for us if we just talk to her. But actually, she's fierce. It's taken thousands of years to tame her. You don't appreciate that because you live in an age when we've thoroughly subdued nature. Hubris is substituting your confidence for evidence. Nature worship qualifies.

I hope the Chinese water project is a success. We should pay attention to what they're doing. We're going to need to build projects like theirs ourselves soon. Our cities don't run on antibiotic-free heirloom free-range chickens. The water mains don't need massages and soft world music. They need water.

Science is the only thing that stands between chatting with friends in warm houses and shivering in the dark while wondering what we did to make an angry god punish us with lightning. Using reason to make our lives better is not evil. It's not bad. Technology is wonderful.

What's the Solomonic way out of this conundrum? I'm afraid it's one own's experience, for we rarely exhibit signs of learning.  Nothing wrong with experience in itself, except that it's costly.