The Republic of Dissent

Wine not whine

Sentence of the day from Stephen Pollard:

It’s not the rich who are the problem it’s the protesters who behave as if the world owes them something rather than being prepared to graft for it.

Occupy Wall Street and consumer politics

Nathalie Rothschild just made my morning with the following sentences (I'm still trying to figure out whether I agree with her or not, but I think that she is onto something):

The anti-corporate agenda that is so central to the OWS [ Occupy Wall Street] movement is actually largely about defining which kind of consumption is acceptable and which isn’t. So, organic food – good; genetically-modified food – bad. Locally-sourced products – good; stuff made by multinational companies – bad.

In essence, OWS is a campaign for consumer politics. It’s about a belief that we can change the world by making ‘smart’ consumer choices. It’s about expressing your politics and your identity through what you do and do not eat, where you shop and which brands you refuse to wear. So while today’s consumption critics love to hate chainstores and big corporations, they always choose to direct their ire at companies that make stuff they don’t like (McDonald’s, Shell, Wal-Mart) rather than at companies that make stuff they do like (Ben & Jerry’s, Trader Joe’s, Whole Foods).

I may be too cynical, but there is something very Comtesse de Ségur about OWS or rather very Harry Potter like to use a more contemporary metaphor. It looks good and feels good when you are a Paul Krugman's fan as I am, but then you have to wonder how much of it isn't a fantasy.

I'm trying to suggest by taking short cuts that Americans don't do revolts well, they do it beautifully, loudly and for a short periods of time.  Then something or someone comes along and they forget or rather learn to live with what irks them by focusing on their dreams and the pursuit of happiness. 

It's always, as Reagan reminded us, morning in America again. (I still can't believed that empty political ad worked or at least I couldn't until 2008).

 

It's pouring

Just because the Red Sox broke my heart , I'm using this sugary excerpt from a German's newspaper reaction to  Obama's words on Europe and its euro crisis as a bandage for my deep wound:

The fact that Barack Obama, who is a brilliant thinker, knows full well that things are much more complicated in reality does not help. Indeed, it does the opposite. In the desperate battle for his re-election he'd rather construct myths, such as claiming that the Europeans alone are responsible for the American mess. Not only is this fundamentally wrong, but -- coming as it does from a friend -- it's downright pitiful and sad.

The IMF and impending gloom

Sentence of the day from Paul Krugman on the IMF and the process by which it chooses its director:

I hope for the best if it is indeed Lagarde; but things are already off to a bad start.

I agree with Krugman and believe that there is something bothersome about this whole process. My discomfort has little to do with Lagarde, but with the ways the IMF chooses its leader. On a humorous note, there ought to have been more outrage about the fact that the only 'African' candidate Stan Fischer as disqualified. Man, where are the advocates of diversity when the one they ought to be fighting for is the most competent for the j.o.b!!!!

Driven and out of control

My only reaction to these sentences from Chris Dillow is ahh!:

It is common to speak of “successful” men as being “driven”. But the very word draws attention to the fact that one is not in control.
What I’m saying here is that the prominent politician and the wealthy businessman often have much in common with the homeless drug addict. None are masters of their destiny. To believe that they are is to commit an unMarxian form of the fundamental attribution error - to overweight the importance of personality and underweight the importance of impersonal structures.

Democracy as the enemy

Via Andrew Seal, a quote from Slavoj Žižek, which is always provocative, but may just be without moronic because often, Žižek is so focused on the forest that he forgets the essentiality of trees:

We do not vote about who owns what, or about worker–management relations in a factory; all this is left to processes outside the sphere of the political. It is illusory to expect that one can effectively change things by ‘extending’ democracy into this sphere, say, by organizing ‘democratic’ banks under people’s control. Radical changes in this domain lie outside the sphere of legal rights. Such democratic procedures can, of course, have a positive role to play. But they remain part of the state apparatus of the bourgeoisie, whose purpose is to guarantee the undisturbed functioning of capitalist reproduction. In this precise sense, Badiou was right in his claim that the name of the ultimate enemy today is not capitalism, empire or exploitation, but democracy. It is the acceptance of ‘democratic mechanisms’ as the ultimate frame that prevents a radical transformation of capitalist relations…

The euro and salvation

Interesting assertions from Václav Klaus, the Czech president in an Oped in the Wall Street Journal:

It is evident that the euro—the European single currency—and the currently proposed measures to save the euro do not represent any "salvation" for the European economy. In the long run, it can be saved only by a radical restructuring of the European economic and social system. My country had a velvet revolution and made a radical transformation of its political, economic and social structures. Fifteen years ago, I sometimes joked that after entering the EU we should start a velvet revolution there as well. Unfortunately, this ceases to be a joke now.
The Czech Republic has not made a mistake by avoiding the membership in the euro zone.

Klaus's view about the euro not being a salvation is going to become the predominant view for European countries, which are yet to join the euro (and those whose economy will have to go through austerity measures) and will now take into account the Greek example. I'm just wondering how long this trend is going to last. My guess is that it doesn't depend on the EU, but on the health of other currencies, particularly the dollar

Consumerism and sameness

I agree with Helmut Holzapfel on this:

A “distance-intensive” lifestyle has emerged and is taken for granted, at least in modern industrialised societies; it has become a typical way of living shaping attitudes and behaviour for part of the population. A distance-intensive lifestyle means large distances covered in ever-smaller units of time, not only in personal travelling, but by the products consumed. Even in health food shops, Argentinean honey or apples from oases in the Brazilian jungle are freely available. The lifestyle means constant availability and spatial accessibility for people and products: Australian or Californian wine, strawberries at Christmas, most likely from South Africa. People fly from Hamburg to Milan for an evening at the opera, and back the next morning. And they live in the suburbs in a detached house with a double or triple garage outside (an SUV is a must); the house is in a beautiful location, yet a blot on the landscape.(...)The disadvantages of the lifestyle gradually become apparent: being everywhere, people are increasingly nowhere. The freedom they search for far and wide means more than dependence on transport systems. Since everyone wants to get everywhere else, everywhere looks the same; same products, same supermarkets. And since everyone wants to go somewhere else and consume products from all over, transport infrastructure is congested. If we consume yogurt made from milk and fruit sourced all over Europe, we shouldn’t be surprised about a lorry jam on the motorway near London or Milan.

It's striking to realize that how identical ultra-consumerists are no matter their race, religion or ethnicity. After all, if buying and stocking stuff is one's 'religion' then all other variables such as race and ethnicity are not essential. For some reasons, that reminds me of the term 'poor white trash' used in the United States, which puts the emphasis on the fact that social condition is in fact more defining than race.

Germany's impotence

I almost agree completely with Henry Ferrell on this:

Germany would like to see an economic government which mostly consisted of other countries adopting harsh fiscal retrenchment combined with extensive oversight.
This isn’t going to happen, much as some German economists might like it to. Germany simply doesn’t have the bargaining power to pull it off. Its threats to expel recalcitrant countries from EMU are now very obviously non-credible. Furthermore, Germany has just demonstrated that it is willing, however reluctantly, to bail others out if the crisis hits. So Germany is left with the unenviable realization that (a) its future economic and political fortunes are linked to EMU, but (b) it doesn’t have the leverage to force others to take measures that it sees as necessary to avoid crisis. This means that it needs carrots as well as sticks to persuade other countries to become less profligate. The only policy tool that I think Germany has is more money – and more specifically, spending money along with other rich member states in countries like Italy and Greece as a quid-pro-quo for reform of taxes, revenue-raising, labour markets and educational systems, which would make these countries more economically prosperous over the longer run, and less likely to pull Germany along with them into further crises.

The one caveat here that there may come a time when it might not be worth it for the Germans to keep on bailing other eurozone's members, which may lead them to start questioning whether the euro is a plus for them if it doesn't provide their country with any economical stability and if its costs outweigh its benefits. To put it more succinctly, Germany has no choices as long as the euro doesn't become an hindrance to the growth of its economy and as long as it considers it the only alternative to its goals to be a power in Europe and elsewhere without its recent history becoming a potent obstacle.

Shallow decisiveness

I disagree with this:

The eurozone is bailing out a member state that has borrowed irresponsibly and seeking to counter speculative attacks on the currency. But it is doing more than altering its policy. It is also changing the nature of the ties among its members states. The creators of the euro, and not only its critics, foresaw that monetary union would ultimately require national governments to cede budgetary powers. A decisive step towards that union has now been taken. The taxpayers of the stronger states, specifically Germany, are liable for the profligacy of the weaker. This is the way that a currency union works.

The problem for the eurozone is precisely that the Greek crisis and the response of the individual states answered none of the essential questions. The focus has been on avoiding the worst and on putting the existential issues on the back burner not to add a political crisis to the economical one. In short, nothing has changed. Eurozone countries are still doing solely what's in their best interest and that reality is a problem for the euro in the long term given the fact that the interests of the members of the eurozone are going to differ a lot more in the future for the intangibles haven't changed and for there is still going to remain a big gap for example between Germany and the rest of the eurozone. 

America is Greece

Interesting assertion from Paul Krugman:

Now, the complaint from the right about any effort to do anything about mass unemployment is that it’s turning America into Greece.

My only issue with Krugman's assertion is that he begs the question, which is whether there is anything that America can learn from Greece. I have the strong suspicion that there is.

The obsessive quest for the perfect body

Susie Orbach on the "femininization" of the male body image:

Men's magazines today resemble Cosmopolitan of 20 years ago. They encourage guys to reach for the same rotten solutions to the problems of living that have been endlessly proffered to women. Transform your body, use male moisturiser, make up, get rid of those man boobs, see yourselves as a diminutive pouting strutting yet vulnerable boy/man whose ideal body is ever shrinking. Aspire to that and distinguish yourself by your ability to sculpt a body as the fashionistas imagine it. Separate yourself from the diverse physicalities so magnificently captured by Spencer Tunick in his bodies of flesh. Make a new body. Make a new self.
It's working. Boys, young men, men of all ages are being captivated by the new visual grammar which pushes men to pout and posture. The more it is there, and the more we succumb, the larger will men's girths become and the bigger the profits of those companies praying on transforming men's bodies. Don't do it, guys. Reject this new uniformity. Dare to be as physically robust and varied as you always were. Don't fall into being the latest bait in the breeding of body insecurity.

In short, skinny, when it comes to both genders, is the old and the new black. The necessary conclusion here is that the gender works because it is marketable and that societal norms when it comes to women and men subsist when they are not in conflict with the market.

Neoliberalism, unclear political identities, and the Brit hung parliament

Astute observation over at Potlatch on Britain political 'quagmire':

What Britain is witnessing right now is this paradox imploding. For the past thirty years, British political parties have gradually converged on the perfect neo-liberal model. Their policies have moved gradually closer to the prescriptions of The World Economic Forum, starting with guaranteeing adequate security and policing, then stabilising the macro-economy, then turning to market competition and regulation, and finally nurturing the right sorts of social 'externalities' and 'public goods' in the areas of education, infrastructure and culture. The problem is that this neutering of political difference ultimately leads to the very ambivalence that the markets so hate. They want someone to be in control, they just don't want that someone to have any clear political identity.

This observation would apply to the United Sates where it seems that political identity has nothing to do with politics, but everything do with constructed identities to avoid resolving political issues. Case in point: I still don't know what is Obama's political identity ( I would say the same for Sarkozy). I know that he is an excellent politician, but I just don't what it is that he wouldn't do to get himself elected and to beat down his opposition.

The American church of unlimited government

The most interesting statement of the day from Arnold Kling:

I believe that America does have a state religion. I call it the religion of Unlimited Government. Those of us who dissent from the state religion believe in Limited Government. I will elaborate below. (...)There is no one who will come right out and say they are for Unlimited Government. However, on each specific issue, from obesity to education to financial regulation, the believers have faith that government action would be moral and effective. The believers never accept an argument that government's wisdom and morality have limits. Instead, they view any government failure as the unfortunate consequence of special interests, free-market ideology, or just plain evil people who manage to get into positions of power. For believers, government is "us" and those who believe in Limited Government are the dupes of a false religion.

Power and powerlessness

Amartya Sen on Power, powerless, and its effects on individual lives:

What about power – a concept that closely relates to the idea of freedom? To say that a person is powerless in reversing the kind of neglect that they have been experiencing can also be expressed in the language of capability: they are not capable of reversing the neglect from which they suffer. And yet there is some evocative strength and rhetorical force in the language of power, particularly in dealing with powerlessness, that the word capability, which is really a term of art, cannot really match. Analysing power and powerlessness can help to generate a better understanding of the divided world in which we live.

I have the feeling in so many ways the present state of the world has too much in common with the state of nature for people to worry about powerlessness rather than to have a single-minded focus on power.Social justice is becoming a forgotten concept because a diminishing number of people worry about those who cannot take advantage of individual freedoms for reasons, which they cannot change by just using will, courage, hard work, and determination.

Political entrepreneurs

Daniel Henninger argues in the Wall Street Journal that Obama's economic policies (particularly the jobs bill) will lead to the rise of political entrepreneurs and to the decline of market entrepreneurs who have made America America:

Market entrepreneurs like Rockefeller, Vanderbilt and Hill built businesses on product and price. Hill was the railroad magnate who finished his transcontinental line without a public land grant. Rockefeller took on and beat the world's dominant oil power at the time, Russia. Rockefeller innovated his way to energy primacy for the U.S.
Political entrepreneurs, by contrast, made money back then by gaming the political system. Steamship builder Robert Fulton acquired a 30-year monopoly on Hudson River steamship traffic from, no surprise, the New York legislature. Cornelius Vanderbilt, with the slogan "New Jersey must be free," broke Fulton's government-granted monopoly.
If the Obama model takes hold, we will enter the Golden Age of the Political Entrepreneur. The green jobs industry that sits at the center of the Obama master plan for the American future depends on public subsidies for wind and solar technologies plus taxes on carbon to suppress it as a competitor. Politically connected entrepreneurs will spend their energies running a mad labyrinth of bureaucracies, congressional committees and Beltway door openers. Our best market entrepreneurs, instead of exhausting themselves on their new ideas, will run to ground gaming Barack Obama's ideas.

I suspect that Daniel Henninger's dislike for the intervention of the state within the economy and his idolization of what he believes to be real entrepreneurship are narrowing his perception of reality. Nevertheless, reading his arguments forces one to wonder whether entrepreneurship in itself is always a good for a country and should be privileged over anything else whether it is based on politics or on the market. To put it differently, I wonder whether in an age where a lot of entrepreneurs can go wherever they want to innovate, governments have real policy choices if they believe in entrepreneurship as a good in itself.
In any case, to come back to Henninger's strong distaste for "political entrepreneurs," I wonder if his problem is more with the politics that they are following rather than politics itself. To phrase it differently, I wonder if Henninger would be saying the same time if Obama were Bush or the venerated Ronald Reagan.

The revenge of the Euro critics

Der Spiegel on Greece, the Eurozone's troubles, and the revenge of the "Euro critics":

The euro has been a success story until now. During the recent financial crisis, the common currency proved to be a blessing at first, particularly for the smaller countries. But as debt levels increased, the problems, previously suppressed, became more and more evident, including the debt-based economy in the Club Med and the imbalances in terms of competitiveness.
Even before the common currency was introduced in 1999, Nobel economics laureate Milton Friedman was warning that the euro would not survive its first economic crisis. He predicted that the euro zone could break apart after just 10 years.
Ever since the Greeks were forced to admit that their national debt was much higher than originally claimed, the critics of a common European currency have felt vindicated. They had always warned that the northern countries would eventually have to vouch for the debts of the south, that the differences in economic development within the euro zone were too great and that a common currency could not function without a common economic policy.
At the time, politicians ignored the concerns of many economists. Now they realize that this may have been a mistake. The European agreements that define the legal framework of the currency union do not include any provisions to account for the kind of crisis the euro is currently experiencing. For that reason, there are no instruments available to combat such a crisis.

One factor that is always going to be key to the continuing relevance of the Euro is the Dollar and the value that the US places on its supremacy (I don't think that there is going an American administration that is going to make a strong Dollar a priority anytime soon). If I had to make a bold bet, I would say that the current crisis is going to last a few months until the Euro stabilizes and at last stops to be overvalued. However, I think that the Euro will always be saved from the structural problems of the Eurozone and its political problems by the fact that it has become the main rival of the Dollar, that is the currency of those who don't trust the Dollar or rather America's economical policies and believe in the upcoming end of the empire.

European fantasies

Great point from Charlemagne on the current Euro/EU crisis:

Some voices in Brussels insist that the logic of this current crisis must lead to such a fiscal union, to preserve the euro. They make the comparison with the American federal government, sending money from rich American states to poor ones.
Mr Pisani-Ferry, a pro-European and a Frenchman, says such talk of a fiscal union within Europe is, "at this point, a fantasy", and he is right. He then went on: "It is also a fantasy to think anyone will make a fiscal union just to make a monetary union more robust." And crucially, he noted, America did not create its own federal union to prop up the dollar. Fiscal unions like that in America are created because there is political will to create new budget items at a federal level, such as a common military, or a single Social Security system, he said.

The question still remains what should be done short of tearing the whole system down for I don't think that it is possible, at least not by the current leaders who have too much invested in the success of the Euro and in the European Union is the perfect scapegoat at home for all their domestic troubles.

Greece and the integration question

Interesting stuff from Norman Tebbit on Greece, the Euro, Brussels, the European Union:

Gradually, bit by bit, the Greeks and the Germans are discovering that while they have a currency in common, they have absolutely no common economic policy.(...) Already, Angela Merkel and Nicolas Sarkozy, leaders of the member states who really matter in the Eurozone, are dictating instructions to the Greek government – but they are utterly unaccountable to the Greek people. The Greeks are, of course, responsible for their own predicament, but their masters in Brussels also bear a heavy responsibility for having misled them into the trap of membership of the euro and knowingly allowed the Greek government to falsify its statistics to qualify for membership.
Now the Greeks cannot afford to stay in the euro and the Germans and French (and indeed to a lesser extent we British) cannot afford to see the Greek economy collapse.
For our masters in Brussels, this is a moment of great danger and of great opportunity. Their solution is simple. Not just a single currency and a single central bank, but a single finance minister administering a single tax and spending system, and a single government across the EU. Without that, either the Eurozone will shrink to a hard core of states around Germany and the Deutschmark will be reborn under the name of the euro, or the euro will cease to be.

I'm starting to wonder whether European monetary integration can continue, successfully, without more European political integration (deepening that is) and whether more vigorous central institutions (The European Central Bank doesn't seem to be enough to fix  crisis.) aren't necessary for Herman Van Rompuy, the president of the European council has not only been invisible, but is becoming irrelevant.
Nouriel Roubini has a different take on Greece in the Globe and Mail.

Fukuyamism 2.2

Francis Fukuyama in the Spectator on current events, history, and the future of democracy (hat tip: Hattie Garlick):

I think that even in the wake of the Ukrainian election and other recent reverses, the future of democracy is not so bleak. In the first place, democracy remains, in Amartya Sen’s words, the ‘default’ political condition: ‘While democracy is not yet universally practised, nor indeed universally accepted, in the general climate of world opinion democratic governance has achieved the status of being taken to be generally right.’ Very few people around the world openly profess to admire Putin’s petro-nationalism, or Chavez’s ‘21st-century socialism,’ or Ahmedinejad’s Islamic Republic.
(....)The next phase of global history will be a challenging one, as America and Europe stumble to get back their economic balance. It seems doubtful that either the US or Britain will achieve the degree of growth in the next generation that they did in the previous one. But one of the great advantages of democracy is that it does not depend for its legitimacy on continuing high levels of economic growth, as the Chinese system does.
As we move forward, it is important to keep in mind the simple power of the idea of a government by, for, and of the people. We need to match those high ideals with unglamorous but steady investments in institution-building if liberal democracy is to deliver on its promises.

It is good to see that since The End of History, Fukuyama has become timid about making bold and grand predictions about the future. However, the problem is that he has become so timid that he is no longer original so busy that he is to cleanse his reputation from his original sin, which was to have the arrogance to assert that history had ended, and from the fact that he, maybe in spite of himself, inspired Neoconservatism. To come back to his essay in the Spectator, the problem that I have with it is its shortsightedness and its author's unwillingness to ask the grand question, which is whether societies who are dominated by the market can remain Democratic no in the superficial sense of the world, but in Tocqueville's sense of it. If corporations are people and can greater influence in politics because they have more money, if the electorate's vote is solely based on identity politics,  if not all voices are represented in a representative Democracy, is  such a political system still democratic and can we really ignore its shortcomings by arguing in a Thatcherite and autocratic fashion that there is no alternative? Unfortunately, Fukuyama, in my opinion purposely, offers no answers and furthermore and that is most disappointing, he doesn't even allude to those problems by pretending that the crux of the future legitimacy of democracy is elsewhere.  

Understandable public outrage and impending doom

Krugman on Obama's latest attempt to walk and chew while moonwalking, that is please everybody by appealing to Main Street while not ignoring the importance of Wall Street:

There’s good reason to feel outraged at the growing appearance that we’re running a system of lemon socialism, in which losses are public but gains are private. And at the very least, you would think that Obama would understand the importance of acknowledging public anger over what’s happening.(...) If (...) Obama thinks his key to electoral success is to trumpet “the influence corporate leaders have had on his economic policies.”
We’re doomed.

I think that Obama gets it, he just thinks that since he is the One, he knows better and should do something other than to react the way "common folk" wants him to react.

Haiti and the lazy culture

I don't know what to say about reading Peter A.Coclanis's oped in the Wall Street Journal on Haiti. I'm speechless, but here is the part that sent me in a state of shock (which isn't bad because it made me pensive):

Haiti is by far the poorest country in the Western Hemisphere. Some 98% of the country is deforested. It lacks many of the fundamental institutions necessary for a vibrant economy, such as a reliable police force, protections for private property, and schools that boost literacy rates. Just 50% of Haiti's population is literate now. Haiti also lacks a culture that encourages a strong work ethic, the accumulation of capital, and the passing of assets on to future generations. Realistically, building an economic base for Haiti will take generations.
Before the quake there were more than 10,000 nongovernmental organizations in Haiti feeding the poor, providing health services and much more. This fact alone should give the world pause. Haiti doesn't need to be rebuilt. It needs to be built from the ground up.

Can a culture encourage people to be lazy? And if it is the case, is it still culture, but nothing more than the sum of received ideas and perceptions? Is the problem of Haiti, that Haitians aren't working hard enough or rather that they haven't had tried things that work precisely because the world's and their state's emphasis has been on charity and on aid? My guess is that the point in my last question is the right one.But in any case, Coclanis has the merit to say things that need to be said and to point out the difficult fact that Haiti has to be built and not rebuilt, which is essential to help people understand that aid is nice, but something more here is needed.

Matters of equality

Staggering facts from Walter Benn Michaels's article in the London Review of Books about the United States, race, sex, class, and equality:

But it would be a mistake to think that because the US is a less racist, sexist and homophobic society, it is a more equal society. In fact, in certain crucial ways it is more unequal than it was 40 years ago. No group dedicated to ending economic inequality would be thinking today about declaring victory and going home. In 1969, the top quintile of American wage-earners made 43 per cent of all the money earned in the US; the bottom quintile made 4.1 per cent. In 2007, the top quintile made 49.7 per cent; the bottom quintile 3.4. And while this inequality is both raced and gendered, it’s less so than you might think. White people, for example, make up about 70 per cent of the US population, and 62 per cent of those are in the bottom quintile. Progress in fighting racism hasn’t done them any good; it hasn’t even been designed to do them any good. More generally, even if we succeeded completely in eliminating the effects of racism and sexism, we would not thereby have made any progress towards economic equality. A society in which white people were proportionately represented in the bottom quintile (and black people proportionately represented in the top quintile) would not be more equal; it would be exactly as unequal. It would not be more just; it would be proportionately unjust.

One of the biggest problems of America is that itis unwilling to acknowledge the existence of class in its society in a stubborn and foolish obsession to distinguish itself from Europe and in a refusal to acknowledge that in spite of its Founding Fathers' wishes, it became a society where class matters in a way more than it does in Europe because its politics don't address the problem since it doesn't acknowledge. It is difficult to talk about class politically and constructively in the US without being accused of pursing class warfare and of being un-american for after all the magical symbol of the American dream makes it unpopular to even make the case that the rich and the poor may owe their status to something other than merit.

Easy and sterile arguments

Glenn Hubbard on Africa and its difficulties to develop economically:

A whole contingent of aid advocates admit the faults of African governments, but trace them back to colonialism. Under colonial rule, they say, foreign governments and businesses exploited Africa and left it poor. Pro-business policies, they worry, would lead to a new colonialism, with foreign companies exploiting Africa anew.
This argument flies in the race of reality. First, Africa was poor before colonialism, and for many countries, colonialism may well have made Africa richer. There were some exceptions, such as the Belgian Congo in the early 20th century, where forced labor for rubber extraction made the people poorer. But overall, Africans in 1960 were healthier, lived longer, and had higher incomes than Africans in 1900. Ghanaian economist George Ayittey calls the colonial era the "golden age of peasant prosperity" in Africa, when the vast mass of rural Africans joined the world economy for the first time. By 1960, this was even true in the Belgian Congo. The hospitals, ports, schools, railways, and roads of Africa date from the colonial era. Certainly Europeans benefited unfairly from colonialism, but for Africans the result was still an improvement over their former poverty.
What has not made Africans richer, however, are their countries' own governments, which have cut off that prosperity in favor of government and NGO assistance and foreign investment that benefits only the elite. Enabling the majority of Africa's population to access and participate in strong local businesses, through a Marshall Plan, would be a welcome breath of fresh air -- not to mention a good revenue stream for the common man and woman.

This is an easy and I have to say tiresome argument, which people make usually to ignore real issues and to avoid acting in order to either deify Africa or to marginalize it by choosing to see it as a place where change isn't possible or where poverty is a choice. It reminds of  both Obama's and for that matter of Sarkozy's speeches in Africa in which leaders who have visited the continent a few times pretend arrogantly to know it full well and offer empty moralizing words about what has to be done for Africans to get with the program. It's sickening and depressing because what is needed at the moment aren't grandiose speeches, arguments or charitable actions, but rather the acknowledgment that, at some point, in spite of history, of traditions, of whatever else, Africans and the people who want to help them help themselves are just going to have to do what works instead of choosing deification, victimization, misplaced pity or patronizing scoldings.

Collapse

Common sense !?:

There is a parallel based on the same fundamental mechanisms of the economic collapse that we’re seeing now and the collapse of past civilisations such as the Maya. The message is that when you have a large society that consumes lots of resources, that society is likely to collapse once it hits its peak.(...) The Maya collapse began in the late 700s, and then simply the most advanced society in the New World collapsed over the course of several decades. They were mostly gone a century later (...) When a complex structure like that starts collapsing, you are pulling out dominoes in the whole structure.

The market can't be the solution to all problems

An impossible task:

The task for modern feminism is therefore to devise a market-based response to inequality rather than a mandatory one.

I'm wondering two thing when I read this quote. The first is what would a market-based response to inequality be and what would it have to do with feminism, which is either an empty or rather super-charged word to mean very different things to very different people. The second is whether the expression modern feminism isn't a oxymoron.

Exploiting the exploiters

No comment necessary...:

First there was boss-napping, now angry workers at a factory in France have come up with a new tactic in their battle against mass redundancy.
Staff at bankrupt car parts maker New Fabris are threatening to blow up the plant if they do not receive compensation from the companies that provided most of the firm's business.
The 336 workers at the factory at Châtellerault, near Poitiers in central France, want Renault SA and PSA Peugeot Citroen to pay €30,000 (£25,850) to each of them, or some €10m in total, in return for the company's remaining stocks of equipment and machinery. The workers, who are currently occupying the factory, have given Renault and Peugeot Citroen until 31 July to come up with the money.

At least he is not the other guy

When I read Krugman writing this I have to wonder whether the fact that Obama isn't Bush is enough to accept less from him, no I'm not wondering, I'm just distressed by the fact that it seems to be sufficient for too many people to continue the cult of the personality:

To be fair, Obama is nothing like Bush; the stimulus was designed to solve a real problem, and the Obamanites, unlike the Bushies, don’t go around inventing crises to solve. But I still think that Obama’s greatest strength is precisely his obvious intelligence and ability to talk to Americans like adults; it’s a shame to see him and his advisers saying something they have to know isn’t quite right.

Kierkegaard versus Ayn Rand

My first thought on the following sugary excerpt from Emmanuel Paparella's article on the crisis is that it makes the complex even more complicated in attempt to reach acceptable conclusion:

Perhaps Kierkegaard had it more on target: the crisis is not one of intellect but one of spirit. Its symptoms are visible in lives of “quite desperation” that many people live in a capitalistic system which alleges to be the best system that the world will ever muster. But as a wise man in Palestine once said: “By their fruits you shall know them.” The fruits of the capitalistic system are that in the 21st century, globally speaking, we have one man for every three living on $ 2 a day. That kind of mere subsistence level on the part of one third of the world’s population (approximately 2 billion people) is surely not something for capitalism to be very proud of as a system and as a “non-ideology,” and to continue to tolerate it means that one has become an ideologue who believes in the social Darwinism or survival of the fittest, a la Ayn Rand.
It is urgent therefore that a new system be imagined and implemented. As Barack Obama would phrase it: we need the audacity of hope. But audacity without wisdom can easily turn into recklessness. Rather, we need rather a conspiracy of hope, as Silone, a disillusioned Communist who  eventually found his moral bearings, used to say. But it certainly cannot be the cynical system of politicians and ideologues still smarting under the idea that Communism did not win in the 20^th century and now find themselves with no ideological compass by which to proceed and all they can do is carp. They are ever ready to complain and shed tears about the poverty and the injustice in the world but at the same time they shoot down any new idea that is not a mere political ideology. As mentioned in the previous article, one thing is sure: any new system has to come up from the people up, democratically, and has to take into account all of the people for as that other wise man in the US said once: “one can fool all of the people some of the times; and some of the people all of the times, but one cannot fool all of the people all of the times.” 

I am of the opinion if one takes on Kierkegaard's view and argues that the crisis is one of spirit then it is impossible to make Ayn Rand's vision of the world the problem. One of the biggest problems of our times comes precisely from the fact that the spirit has been separated from the intellect and the prevailing opinion is that feeling good means to stop thinking, questioning to be Obamamically cheerful and hopeful about change and the word. The current crisis just shows that existence has become about the material and that the material has become spiritual and that being the fittest is about having more, consuming more, and not being ashamed of being bulimic. The issue is no longer whether there are alternatives to systems, policies that brought chaotic and devastating results, but still whether modernity, technology have made humans better enough to accept to take the challenge and the danger not to repeat history and to dare to invent something new to remind themselves that existence is still the most precious gift of all.

Communism and Fukuyamism

Sugary excerpt of the day from Slavoj Zizek

To treat communism as an eternal Idea implies that the situation which generates it is no less eternal, that the antagonism to which communism reacts will always be here. From which it is only one step to a deconstructive reading of communism as a dream of presence, of abolishing all alienating representation; a dream which thrives on its own impossibility.
Though it is easy to make fun of Fukuyama’s notion of the End of History, the majority today is Fukuyamaist. Liberal-democratic capitalism is accepted as the finally found formula of the best possible society; all one can do is to render it more just, tolerant and so on. The simple but pertinent question arises here: if liberal-democratic capitalism is, if not the best, then the least bad form of society, why should we not simply resign ourselves to it in a mature way, even accept it wholeheartedly? Why insist on the communist hypothesis, against all odds?
It is not enough to remain faithful to the communist hypothesis: one has to locate antagonisms within historical reality which make it a practical urgency. The only true question today is: does global capitalism contain antagonisms strong enough to prevent its indefinite reproduction?

Social unrest and révolution theory

When the Guardian writes an editorial about the risk of revolution of France, you know that we are in for more stories about the French, their childish belief in revolutions and their stubborn resistance to adapting to the world as it is not as it should be. What is funny or rather sad about the Guardian, editorial is that it gives the same old impression that France is paralyzed and that something is undeniably wrong within its society , which in my opinion leads automatically to the question whether the problem with most foreign analysts of French politics and society especially when they are Anglo-Saxons is that they start with the assumption that the French don't have the right to be French and that there is just one way for a society to prosper, meaning that we are back at TINA and the current economic crisis shows that such a mindset destroy economies and can make human life be about nothing more than their monetary value. This reminds of Madiha Tahir's article on Pakistan, the media and chaos theory; in the French case, the media's narrow focus, its obsession is on France, and social unrest and revolution theory. When I think that they were telling us that Sarkozy was to unfrench the French. Sugary excerpt:

Popular outrage at the banking bailout may be similiar around the world, but it finds different forms of expression. Barack Obama may have told AIG bosses that the White House was the only thing standing between them and the pitchforks. But in France the feeling is that the pitchforks are not just metaphorical.
International comparisons are deceptive, but on paper there is no glaring reason why the outrage in France should be so much more acute. The public deficit is high, but little more than half of Britain's. Nor is unemployment so much higher, although it is climbing faster. France entered the global turndown later than Britain, and fewer banks were in trouble. Social protection, although under attack, is still substantially more generous than in Britain.
The big picture, however, masks structural problems. France has one of the highest rates of youth unemployment in the developed world, with about one quarter of its 2.5 million unemployed under the age of 25. The truth is that no government in Europe has the luxury of treating French, German or Greek social unrest as a spectator sport. The breakdown in the social compact, the gulf between promise and delivery, should concern everyone.

Too many tales

Just one word: Ah! and a sentence: people love narratives when they like/love/adore the narrator.

Europeanizing America

When I read this sugary excerpt from Irwin Stelzer, I had to laugh: 

Obama’s critics have allowed themselves to be distracted by their distaste for his outsize budget deficits and massive interventions in the auto and financial services industries. Socialism, they say. Not a bit of it. Barack Obama did not tramp through the snows of Iowa and eat ethnic food to please the television cameras in order to end up personally guaranteeing Americans that he will have their tail pipes replaced if necessary. Or to fight with bankers about their compensation, or pick the hotels in which they would be permitted to entertain clients.
He did it to convert America into a social democracy on European lines. Smaller cars; more modest homes; faster trains; healthcare for all, managed by the government; an electric-supply system engineered according to government specifications; guaranteed college tuition with associated control over universities. And, necessarily, higher taxes — at first on ‘the rich’, then on the middle class, in a massive effort to transfer control of the nation’s income from those who earned it to government bureaucrats.
In short, Obama is taking very seriously his self-description as a ‘transformative’ president. Lincolnesque. Rooseveltian. His stimulus programme is important to him only because he must get the economy moving if he is to retain his political clout and win another term, by the end of which the government will be controlling an increasing portion of the nation’s output and wealth. After two terms, that will be a permanent change.

Although  I'm not a fan of Obama, I know that he doesn't want to Europeanize America, he doesn't know enough about Europe (which is regrettable) to have such a grand aspiration and to even have the conviction that there are things in Europe, which could be good for America. My problem with Obama is that he has decided to be great, without deciding his policies, what is negotiable and non-negotiable, but that still, he symbolizes change and an improvement over Clintonism when he is Clintonism with a multiracial face. This explains his pragmatism, and why he doesn't have a backbone. Obama's truest and most unshakable conviction may be the one that he has that he was born to be a great president of the United states. But what does it mean to be a great president of the United  States nowadays and most especially can you become great without beef but with solely glitz and symbolism?

Defending globalization

Stubborn facts:

[...] globalisation promotes peace through two channels: one from the increased advantage peace holds for bilateral trade interdependence and the other from a country’s integration into the global market, regardless of the size of trade with each trading partner. "Globalisation" has been one of the most salient features of the world economy over the past century. Emerging markets and developing countries continue to integrate into the global trading system. World trade has increased rapidly, particularly since World War II — from 18% of world GDP in 1950 to 52% in 2007. At the same time, the number of countries involved in world trade has also increased significantly. However, despite the increase in the number of country pairs between which conflict is possible, the probability of dyadic military conflicts has decreased.

Although globalization is about more than trade is capitalism, it is more important today than ever to remember that the only real debate is about what kind of globalization does the world want and that it is as erroneous and as ideological to argue that the current economic crisis show that globalization is an ill or is dead as it was in the eighties to declare that there was no alternative to neoliberal globalization.

Decentralization, deregulation and the information gap

Quote of the day from Richard Posner arguing the lack of reliable information coming from a centralized, unitary financial-intelligence apparatus made it impossible to anticipate the current economic crisis:

Most people, even most experts, were especially unlikely to be persuaded by prophets of doom in the absence of a machinery for aggregating and analyzing information bearing on large-scale economic risk. Little bits of knowledge about the shakiness of the U.S. and global financial systems were widely dispersed among the staffs of banks, other financial institutions, and regulatory bodies and among academic economists, financial consultants, accountants, actuaries, rating agencies, mortgage brokers, real-estate agents, and business journalists. There was no financial counterpart to the CIA to assemble an intelligible mosaic from the scattered pieces. Much of the relevant information was proprietary; investment banks, hedge funds, and other financial firms conceal information about business strategies that might help competitors, and they soft-pedal adverse information about the firm's prospects. Even the regulatory agencies lacked access to much crucial information about the financial system, because of limitations on their authority that were thought appropriate in an era of deregulation. Lacking authority to regulate new derivative securities such as credit-default swaps, financial regulators could not force disclosure of information that might have revealed how risky the financial system had become.

Winnie the Pooh and the Geithner Plan

Willem Buiter has some much needed advice for the US Treasury:

With an army of recently laid-off financial experts and toxic asset wizards at the disposal of the US Treasury to implement the comprehensive stress tests for major banks, surely the US authorities must know by now which bank needs public money and how much.  Tell those banks identified as both in need of public money and capable of using it in the public interest (possibly after a change of management and board leadership) to take the money.  Don’t ask. Tell. 
It isn’t hard.  Take a leaf from Winnie the Pooh.  Pooh was a bear of very little brain, but at least he had courage.  Or from the Wizard of Oz, a literary reference perhaps closer to those in charge (but not in control) of US economic policy, take a leaf from the Scarecrow and the Cowardly Lion.  With a little bit of brain power and a little bit of courage, this crisis can be overcome.

I'm wondering if the Obama administration has enough distance from Wall Street and its other cheerleaders and fanatical followers to do the right thing instead of assuming that it is going to reinvent the wheel or rather be the first not to fall victims to the laws of gravity. May be they are right and Obama will show the heretics and sinners that he can, indeed, walk on water. The question still remains what does the US does until he learns to use his superpowers.

Creating a new world

Two contradictory views of the G20 summit and the idea that it has created something. Doug Sanders believes that something happened, that the Washington consensus has been altered  and that the US is less powerful as it was yesterday:

The Bretton Woods institutions, and the U.S. government's financial arms, have overseen the expanding world economy for six decades and they were at the centre of yesterday's proposals to rescue that economy from its debt-driven collapse.
But their role, and the shape of the world, is permanently altered. Until 2009, the fundamental goal of the IMF and its sister organizations was to deregulate the world economy, to remove restrictions from finance capital.
Under yesterday's agreement, those organizations will serve as regulators: As well as keeping the financial system working and rescuing nations from bankruptcy, the IMF and new organizations will aggressively police the worldwide credit, finance and banking systems to prevent a recurrence of the bad-credit spiral that led to the current crisis.
In exchange, they will become far less U.S.-dominated: In exchange for substantial contributions to the fund, formerly developing countries such as China, India and Brazil will play a larger role controlling them.

Simon Heffer shares my view that the summit was pointless:

The piece of theatre that concluded in London on Thursday was one of the great confidence tricks of our lifetimes. Just getting the 20 most important heads of government on the planet together in one place and not being unpleasant about each other was, we must concede, something of an achievement. But it won't make a blind bit of difference to the world's economy. [...] this international act of posturing was pointless; because despite having caused the problem, the political class had none of the requisite skills to sort it out. It also seems that some great issues have been fudged. Is the New World Order in favour of a new fiscal stimulus or not? It pains me to say so, but I have been impressed by the Germans (with the French hanging on to their coat-tails) holding out against recklessly pumping money into the economy as Mr Obama and, to a lesser extent, our own Government have done. Perhaps it is as well for them that this summit was not held a couple of months later, for when the rioting starts on mainland Europe with the advent of warm weather, and no devaluation of the euro is possible to stop the haemorrhage of jobs, such firm principles might be harder to maintain.

The fact that people over whether something was accomplished at the G20 Summit shows that it is not the way to formulate earth-shattering policies because the grandstanding, the gimmicks, and the schemes make it difficult/impossible to see through the smokes, the spin, and the syrupy expressions of noble sentiments.

Defending Anglo-Saxon capitalism

It's hard job, but somebody has to defend religiously the Anglo-Saxon economic model and way of life. I'm not sure that John Ibbitson does a good job doing it. I'm not even sure that there is such a thing as an Anglo-Saxon economic model anymore:

Anglo-Saxon capitalism – investment-friendly, export-oriented, low-taxed and minimally regulated – has been competing with its continental alternative – highly regulated, wealth-distributing and state-controlled – since the late 18th century. The Anglo-Saxon version is better. Britain launched, led and sustained the Industrial Revolution, and the United States launched, leads and sustains the Knowledge Revolution. There've been downturns, but we are wealthier and healthier than we'd have been with, say, France in charge.(...) We all want to live in a society where every child gets a good education, the poor have food and housing, and medical care is available for all. But we should also want to live in a society that encourages good ideas by making capital easily available and rewarding risk. Henry Ford and Bill Gates had good ideas. Because they were born in America, we live in their world. (...)  Anglo-Saxon isn't a race, it's an idea, which is why Mr. Sarkozy will berate Mr. Obama's Anglo-Saxon economics without irony. The recession will end, growth will resume and emerging economies will move closer to the Anglo-American model, because history has proved it works. This truth should be beyond debate, although it's a heck of a job getting some people to see it.

I wish Ibbitson's confidence was about more than a superiority complex and a blinding ideology. That said, I think Ibbitson misses the real issues because he wants to take some shots at the so-called European/French capitalism and way of life without addressing the center question of the direction and the sustainability of the current framework of globalization.

Obama as Europe's man

It is extraordinary what HOPE can make one believe, when I read this sugary excerpt from Nicholas Watt, my first thought is to say "I will have what he is having":

But on a whole range of other issues, key EU countries have failed to look up from their traditional navel gazing to understand two key points. Europe at last has its man in the White House – and that means the Europeans for once will have to accept some responsibility for the world's problems rather than simply blaming the Americans.

I'm willing to bet my right ankle that such views will change by December.

Bossnappings

The Guardian has an article on the current wave in France of Bossnapping, which is the kidnapping of bosses by workers in attempt to avoid firings or to solve other crisis in the enterprise:

France is braced for a wave of such "bossnappings", as desperate staff take desperate action. Mass layoffs blamed on the financial crisis have seen the protest movement splinter into spontaneous hostage-taking at plants and factories around the country. Chief executives arriving from Paris to announce redundancies find themselves barred from leaving. It is "our only remaining bartering tool" one union leader said.
France has a history of bossnappings dating back to May 1968 and the 1970s, when executives were held hostage in the struggle for rights. Today's demands are more mundane: hostage-takers range from single mothers to the nearly retired - they want jobs, proper pay and no brutal layoffs. The two "bossnappings" this month are the latest examples in a rise in radical gestures that has seen members of the public stage commando "picnics" in supermarkets, feasting from the shelves in revenge against multinationals, shouting "we will not pay for your crisis".

Bossnappings are able to happen in France because the French look at entrepreneurs and other's rich people who are at the head of a business with suspicion because to them, they aren't as honest and as hard working as their workers who are doing the real work, which is enabling them to get rich. The point is that in France, an successful entrepreneur is more often than not viewed as a opportunist who has been able to exploit his workers by taking full advantage of the fruits of their labor. The bosses who are the victims of these bossnappings will not be viewed as victims, but rather as people who are the causes of their employees' despair.

Obamanomics

Evidently, Obamanomics has created great expectations. Ambition is always good except when it becomes blinding and restrictive in the sense that the necessary and the urgent, but less glamorous doesn't occupy the first place:

(...) Obamanomics represents something even bigger than all that. At a moment when the fundamental precepts of market capitalism and government’s relationship to the economy are up for grabs, the Obamans are attempting nothing less than a redefinition of progressivism, which could alter the terms of political engagement and the ideological balance of power for decades to come. With their budget, they have laid out a vision that, as former Labor secretary Robert Reich puts it, “reverses and repudiates the economic philosophy that has dominated America since 1981.” Obamanomics isn’t merely the end of Reaganomics, in other words. It’s the end of Rubinomics, too.

Facts that kill

Just the facts from Willem Buiter:

The US authorities have no money to fulfil their ambition of stopping large US banks from failing without taking them into public ownership.

Something tells me that in a couple of months, people are going to Obamanize Krugman by taking the worship of his person to unhealthy levels because he would have been proven right.

The laments of the superpowerful

It is hard for me to share James Surowiecki's sense of injustice over the fact that Europeans are once again taking advantage of America without doing their fair share. It is a familiar refrain and I have to say that given the status of America as the sole superpower, it is hard to empathize (easier to sympathize) because after all with power comes great responsibilities as well as great freedoms. All one has to do is to read Krugman's post  last week on Spain (even though he shares the views that Europeans aren't doing enough. An official of the European Central Bank responded to this assertion in the Wall Street Journal) to understand why Europe can't follow the "lead" of United States especially given the fact that its president doesn't seem to know its own mind when it comes to economic issues. Sugary excerpt:

The thing about government spending is that it “leaks”: a good chunk of our stimulus package will buy other countries’ goods. So Europeans can avoid getting too deeply into debt and still reap some of the benefits of our borrowing. This is unfair: in effect, Europe is refusing to carry its share of the global economic burden and is piggybacking on us. But it’s hard to see how things could have turned out otherwise. The U.S. economy, much more than Europe’s, is like the proverbial shark: if it doesn’t keep moving forward, it dies (or at least creates a lot of misery). In some sense, we need economic growth more than Europe does. It’s not surprising that we’re going to be the ones who end up paying for it.

Foreign Aid and Africa

Old arguments from Dambisa Moya on the debate on the utility of foreign aids in Africa:

The aid advocates skirt over the point that the Marshall Plan interventions were short, sharp and finite, unlike the open-ended commitments which imbue governments with a sense of entitlement rather than encouraging innovation. And aid supporters spend little time addressing the mystery of why a country in good working order would seek aid rather than other, better forms of financing. No country has ever achieved economic success by depending on aid to the degree that many African countries do.

What has always been missing from this somewhat annoying debate because it is self-indulging is the acceptance of the fact that foreign aid is not and has never been about development or modernizing. Foreign aid is about real politik, buying influence in natural resources rich African countries. Sometimes, it can be about avoiding greater disasters that can make whole regions explode and lead to great humanitarian crisis that will cost more. Thus, in fact, the discussion is futile, because it is based on a faulty assumption that foreign aid for Africans has grand ambitions when its purpose is to preserve the status quo ante and to advance real politik's objectives. There is no charity in international politics.

The rain is coming

More trouble for Sarkozy as France and his government brace for another day of strikes tomorrow. I wonder how far and how long those expressions of anger will go. Sarkozy must be happy that his only true rival in the mind of the French is the far left  leader Olivier Besancenot.

Old answers

Mikhail Gorbachev has a solution to the global financial crisis and it is the return of the State. The question, at this point, isn't whether to bring the State back or not, but how to bring it back and how much should it do. Paul Krugman has argued, for example, that Obama's stimulus package was too small. My guess is that he is right and that the Obama administration knew it or rather sensed it but figured that for political reasons, it had to start small and ask for more later when hopefully(here is that word again), things were getting better. There is the problem: the State to make a difference, politics and politicians have to be responsible and avoid petty calculations.

Significant differences

Great article in Spiegel on the differences on solving the financial crisis between Americans and Europeans especially between the Germans. However, what caught my attention is this paragraph on the missed connection between Angela Merkel and Obama during their first meeting last year in the midst of the American presidential campaign:

(...) the first meeting of US President Barack Obama and German Chancellor Angela Merkel last summer was a moderate catastrophe. Before withdrawing for a one-on-one conversation, the two politicians posed at the door of the chancellor's office.
Obama reached cautiously for Merkel's lower arm, while she apparently considered if she should pat him on the shoulder. Then the chancellor extended her hand to the then-senator, who, at that very moment, happened to be looking in the other direction. By the time he tried to extend his hand to her, she had already turned around. As one observer noted, there was clearly a certain "sense of trepidation" between the two.

I'm betting that their next meeting is going to be a lot warmer. Obama has to find an European leader to like and my guess is that it will never be Sarkozy. Merkel will do her best to like him and probably will given that he is less in your face and less willing to touch and to grab people especially than Bush and Sarkozy are. It is possible to count on Obama to do at least one thing and that is to respect her personal space and to make her publicly uncomfortable with his informal manners as have the last American president and the present French one.

When speed and relentlessness become reassuring

Gideon Rachman gives Nicolas Sarkozy, who is also President of the EU, high marks for his leadership during the financial crisis:

By contrast, Nicolas Sarkozy has done well. “Reassuring” is not a word that generally applies to the hyperactive French president. But Mr Sarkozy has looked energetic and determined. Since France currently holds the presidency of the European Union, he has had the usually nightmarish task of trying to manufacture a joint European response. In the event, Sunday night’s summit in Paris was a much more decorous and successful occasion than many an EU crisis summit. By avoiding farce and presenting a united façade to the world, Mr Sarkozy saved the EU from further embarrassment.

I would like to agree with him, but I have some reservations not because I disagree with Sarkozy politically, but because I have the sense that what is being done will simply and temporarily contain the flames of the fire because doing more and being for once and when it is needed, revolutionary would mean to increase uncertainty and to cause more panic. I have this sinking feeling that the toughest decisions aren’t make and that the political lessons of this crisis aren’t learned because they would necessitate Sarkozy to change ideologically. However, we know that politicians, especially when they are relentless and obsessed with speed as Sarkozy is, don’t change ideologically. They remain cats or dogs while from time to time pretending to metamorphose into something else to speed things along.  

It is still not just Globalization, stupid!

Peter Thiel (one of the co-founders of PayPal) has an essay on Globalization on the Hoover Institution website, which is a good read because it makes interesting, but limited points about globalization and our times. Sugary except:

Classic investment strategies no longer work in a world where ordinary economic cycles are broken. The limits of a George Soros or a Julian Robertson, much less of an ltcm, can be attributed to a failure of the imagination about the possible trajectories for our world, especially regarding the radically divergent alternatives of total collapse and good globalization.

Seven years later, the markets have come full circle. The retreat towards tactical cleverness hides a lazy agnosticism about the most fundamental questions of our age. Because we find ourselves in a world of retail sanity and wholesale madness, the truly great opportunities exist in the wildly mispriced macro context — rather than in the ever-diminishing spreads on esoteric financial markets or products. Indeed, one could go even further: What is truly frightening about the twenty-first century is not merely that there exists a dangerous dimension to our time, but rather the unwillingness of the best and brightest to try and make any sense of this larger dimension.

[…] In every possible future, all of today ’s bubbles will burst, and their ideological scaffolding will prove to be but lint in the winds of history.

The waning of globalization in the near future will be a reaction to the excesses of the recent past.  Bubbles have begun to implode across the globe, laying bare the fraudulence of “China,” “technology,” “hedge funds,” and their like. As the world's economy weakens, so will support for the globalist orthodoxy, the political tenability of which rests heavily on the ability of the doctrine to literally deliver the goods. Some policymakers seem to sense this already, with the most immediately obvious of these being the Fed. In this view, the Fed ’s morally hazardous accommodations are best understood not as a perplexing and facile sop to bankrupt homeowners but as a desperate effort to stave off a recession that will end the debate on globalization for years to come.

Globalization became a buzzword applied to all things and used to reinforce the idea that there were no alternatives to a particular worldview and set of policies, which created both wealth and extreme inequality. The point is that few understand that in spite of the fact that globalization isn’t new; it is still relevant because it makes policy and investors’ choices even more essential than ever before because it is clear that markets aren’t fair and the invisible right seldom creates fairness and social justice.

Death and Taxes

Chris Dillow has a great post comparing the American and he British tax systems. His conclusion is that the American Federal Tax system is more progressive than the British one despite the fact that Britain has had a leftist government for more than a decade and that America has been govern by a president who believes in Tax cuts above almost everything else. Dillow’s conclusion doesn’t surprising.  Americans, because of their history, are allergic to taxes and are less willing to believe that they can serve a great purpose. Europeans, in general, are more willing to believe that taxes can reduce inequalities and improve society as a whole. In simpler terms, the expression tax cuts is an aphrodisiac quality to American ears  and no smart American politicians can afford not to use it even if when s/he is from the left it means affirming that the working poor and the middle class need tax cuts more than the wealthy.