“Inequality is a euphemism, a kind of shorthand, for all of the things that have gone to make the lives of the rich so much more delicious, year on year, for the last three decades. And also for the things that have made the lives of working people so wretched and so precarious in that same time. This word inequality. It’s visible in the ever rising costs of healthcare and college, in the coronation of Wall Street, and the slow blighting of wherever it is that you happen to live. And you catch a glimpse of inequality every time you hear about someone that had to declare bankruptcy because a child got sick, or you read about the lobbying industry that drives Washington DC, or the new political requirement, the new constitutional requirement that every presidential candidate has to be a billionaire’s favorite, or a billionaire themselves. Inequality is about the way in which speculators, and even criminals, get a helping hand from Uncle Sam, while the Vietnam Vet down the street from you loses his house. Inequality is the reason that some people find such incredible significance in the ceiling height of an entrance foyer, or the hop content of a beer, while other people will never believe in anything again.” Thomas Frank “People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right. The sensitivity of the poor to injustice is a trivial thing compared with that of the rich.” John Kenneth Galbraith
Hanjin’s Ghost Ships Seek Haven Suppliers to companies such as Nike Inc. and Hugo Boss AG are scrambling to ensure their T-shirts and sneakers reach buyers in time for the year-end holiday season after the collapse of Hanjin Shipping Co. left an estimated $14 billion worth of goods adrift. Esquel Group, a Hong Kong-based manufacturer for fashion brands including Nike, Hugo Boss and Ralph Lauren, is hiring truckers to move four stranded containers of raw materials to its factories near Ho Chi Minh City as soon as they can be retrieved from ports in China. Liaoning Shidai Wanheng Co., a Chinese fabrics importer and a supplier to Marks & Spencer Group Plc, has made alternative arrangements for shipments that were scheduled with Hanjin. ‘Our production lines are waiting,’ said Kent Teh, who runs Esquel’s Vietnam business. ‘We potentially have to take airfreight to deliver the garment items to clients in the U. S. and U. K.’ Apparel, handbags, televisions and microwave ovens are among goods stranded at sea after Korea’s largest shipping company filed for bankruptcy protection last week, setting off a series of events that roiled the global supply chain. A U. S. Court on Tuesday provided a temporary reprieve, which may help vessels call on ports such as Los Angeles without the fear of getting impounded. Any major bottlenecks ahead of Thanksgiving and Christmas could put a dent in the two-month shopping season, which netted some $626 billion of sales last year in the U. S.
This post was published at David Stockmans Contra Corner By Nguyen Dieu Tu Uyen, Kyunghee Park and Mai Ngoc Chau, Bloomberg Business ‘ September 8, 2016.
VIOLENTLY INTERVENING IN the affairs of other countries has brought the United States much grief over the last century. We are hardly the only ones who do it. The club of interventionist nations has a shifting membership. During the current round of Middle East conflict, two new countries have joined: Turkey and Saudi Arabia. Both have succumbed to the imperial temptation. Both are paying a high price. They are learning a lesson that Americans struggle to accept: Interventions have unexpected consequences and often end up weakening rather than strengthening the countries that carry them out. Turkey’s long intervention in Syria has failed to bring about its intended result, the fall of President Bashar Assad. Instead it has intensified the Syrian conflict, fed a regional refugee crisis, set off terrorist backlash, and deeply strained relations between Turkey and its NATO allies. As this blunder has unfolded, Saudi Arabia has also been waging war outside its territory. Its bombing of neighboring Yemen was supposed to be a way of asserting regional hegemony, but it has aroused indignant condemnation. The bombing campaign has placed Saudi Arabia under new scrutiny, including more intense focus on its role in promoting global terror, which the Saudi royal family has managed to keep half-hidden for years. Turkey and Saudi Arabia intervened in foreign conflicts hoping to establish themselves as regional kingmakers. Both miscalculated. They overestimated their ability to secure quick victory and failed to weigh the strategic costs of failure or stalemate. If the Turks and Saudis had studied the history of American interventions, they would have been more prudent. We know the sorrows of empire. From Iran to Cuba to Vietnam to Afghanistan and Iraq, the legacy of our interventions continues to haunt us. Ambitious powers, however, continue to ignore the stark lesson that American history teaches. Turkey and Saudi Arabia are the latest to repeat our mistake. It is the same mistake that has undermined many nations and empires. They overestimated their ability to shape events in foreign lands. Now they are paying for their delusional overreach.
Former Arkansas Sen. William Fulbright said in 1967, ‘The price of empire is America’s soul, and that price is too high.’ War, expansion, the maintenance of a large standing army: these corrupt a country, as poets from James Russell Lowell to Wendell Berry have tried to tell us. The Vietnam or Iraq War may level villages across the sea but back home, in our villages, they unleash an insidious poison, too. They make our places less liveable. From the pit of the Cold War Edmund Wilson, the Sage of Boonville, New York, lamented that ‘our country has become today a huge blundering power unit controlled more and more by bureaucracies whose rule is making it more and more difficult to carry on the tradition of American individualism.’ In Boonville as in Emporia as in Sauk Centre, the little places that give America soul were ravaged and denuded by the machine of perpetual war. War effaces and perverts the very bases of healthy community life. It elevates impermanence and rootlessness to virtues. It forcibly uproots people; it distorts natural economic patterns, causing artificial regional booms and busts – witness the histories of Detroit and Kentucky; it spreads venereal disease, if not democracy; it separates husbands from wives and parents from children; it leads to a spike in the divorce rate among service personnel and it nationalizes their children in what the Pentagon, with its usual tone-deafness to Orwellian rings, calls ‘the Total Army Family.’ Welcome to the Brave New World. A militaristic state is a centripetal machine that sucks all power to the center. Smaller bodies, grass-roots democratic institutions, are devitalized, wiped out. All political decisions of consequence are made at a level impossibly remote from real life. People we don’t know – people who have no desire or even means to know us – make life or death decisions about us.
This article appeared on War on the Rocks on August 29, 2016. ‘The Constitution supposes, what the History of all Governments demonstrates,’ James Madison wrote to Thomas Jefferson in 1798, ‘that the Executive is the branch of power most interested in war…. It has accordingly with studied care, vested the question of war in the Legislature.’ As James Wilson had earlier explained to the delegates at the Pennsylvania ratifying convention: ‘This system will not hurry us into war; it is calculated to guard against it.’ In the post-9/11 era, the United States has drifted towards a radically different regime. Two successive presidents have treated the 2001 Authorization for Use of Military Force (AUMF) as a wholesale, potentially permanent delegation of congressional war powers – a writ for war without temporal or geographic limits. The 2001 AUMF was passed by the 107th Congress three days after the 9/11 attacks and targeted those who ‘planned, authorized, [or] committed’ the attacks and those who ‘aided’ or ‘harbored’ them. This referred to, respectively, al-Qaeda and the Taliban although they were not named in the authorization. Judging by what they said at the time, the legislators who passed the resolution did not imagine that they’d sanctioned an open-ended, multi-generational war. This AUMF was nothing like the Gulf of Tonkin Resolution that authorized the Vietnam War, then-Sen. Joe Biden insisted after the vote. This authorization was limited: ‘we do not say pell-mell, ‘Go do anything, any time, any place.”
When one thinks of the neoconservatives what comes to mind is their warmongering, and they have indeed been the War Party’s brains since their incubation inside the Democratic party and their defection to the GOPduring the Vietnam era. Yet there are other aspects of the neooconservative mind – or, rather, the neoconservative personality – that are significant, and one of these is their viciousness. These guys (and gals) fight dirty: the smear, the ad hominem argument, is their signature method. Remember the campaign against Chuck Hagel that targeted him as an ‘anti-Semite’ They lost that one, yet they are not the type to change their ways. They tried the same tack with Donald Trump, throwing every smear in the book at him, and their reaction to his amazing victory in the primaries underscores both the primal hatred they feel for their enemies, and their obsession with control of the institutions they infiltrate. For many months now, Bill Kristol, the neocons’ little Lenin, has been trying to gin up a fifth party candidate who will take enough votes away from Trump to deny him the White House. First there was Mitt Romney, and then was Sen. Ben Saase being floated as the chosen sacrificial lamb, and whenthey demurred the Kristolians turned to one David French, a scribbler forNational Review – who backed out after a week. But now, finally, the #NeverTrump movement – which was always a neocon front group – has come forth with a willing candidate: Evan McMullin, a 40-something year-old former CIA agent, former House Republican foreign policy director, and former investment banker at Goldman Sachs.
When did America’s establishment ever discuss, in elections or at other times, issues of war and peace for the people’s understanding and consent? Virtually never. There was no mandate for Vietnam, Cambodia, Iraq, Libya, Syria, or a dozen other conflicts. Of course, once a war gets going, there is a tendency for Americans to close ranks with flags and ribbons and slogans such as ‘Support our troops’ and ‘Love it or leave it.’ The senior leaders know this psychological pattern, and they count on it, every time. The fundamental problem in America’s government is an elaborate political structure much resembling democracy but with actual rule by a powerful establishment and a set of special interests – all supported by a monstrous security apparatus and a huge, lumbering military, which wouldn’t even know what to do with itself in peace. Unfortunately, I don’t think there is any apparent solution to this horrible political reality, and, while once it affected primarily Americans themselves, today it affects the planet. There is an intense new element that has been added to America’s governing establishment: the drive of the neocons for American supremacy everywhere, for complete global dominance, and it is something which is frighteningly similar to past drives by fascist governments which brought only human misery on a vast scale.
Historians still debate whether President John F. Kennedy would have withdrawn U. S. troops from Vietnam had he lived to win re-election in 1964. Since President Barack Obama recently announced his intention to keep at least 8,400 U. S. troops in Afghanistan through the end of his presidency, the only debate will be over why he never withdrew but chose instead to bequeath an unwinnable war – the longest in U. S. history – to his successor. The U. S. war in Afghanistan will officially pass the 15-year mark in a few months. But like Vietnam, where the United States began aiding French colonial forces in the late 1940s, Afghanistan has been the target of Washington’s war-making for more than three-and-a-half decades. On July 3, 1979, President Carter first authorized the secret provision of aidto armed opponents of the leftist regime in Kabul. A senior Pentagon official advocated the aid to ‘suck the Soviets into a Vietnamese quagmire.’ When Moscow took the bait and sent troops that December to support the Afghan government against a growing rural insurgency, National Security Adviser Zbigniew Brzezinski gleefully wrote President Carter, ‘We now have the opportunity of giving to the USSR its Vietnam War.’ Call it blowback, or just an irony of history, but Afghanistan has turned instead into America’s second Vietnam War. The Soviets finally had the good sense to pull out after being bloodied for a decade. The Obama administration envisions staying there indefinitely. Under the Bilateral Security Agreement that President Obama got Kabul to sign in 2014, U. S. troops may remain in Afghanistan ‘until the end of 2024 and beyond.’
I was in the streets of Chicago in 1968 during the Democratic Convention. It was only a few months after Bobby Kennedy and Martin Luther King were shot to death. The ‘establishment,’ as we called it back then, was all set to nominate Vice-president Hubert Humphrey who had started out in Washington as a Midwestern progressive firebrand but was now was broadly perceived by America’s hippie youth as a stooge and a sell-out to the evil forces running the Vietnam War. I wasn’t exactly a protester, more like a proto-journalist, there to witness an epochal event. It was a wild three days with a lot of moiling in Lincoln Park and Grant Park, and finally out on Michigan Avenue the night of Humphrey’s awful apotheosis, where things got especially ugly and the tear gas canisters flew. But that was about it. Nobody got killed by the police, or vice-versa, and then we all went back to college (my SUNY school cost $500-a-year back then, by the bye). Nixon was the consolation prize. Back then, it was in style to assassinate political leaders. Today it’s in fashion to assassinate police. It’s hard to imagine easier targets. Where trouble is brewing in the streets nowadays, there they stand right out in front, easily distinguished in their uniforms. That was exactly the picture on the front page of The New York Times today: the thin blue line in Cleveland, where the Republican convention convenes this week to nominate the golden deus ex machina Donald Trump. There are few things in life one can predict with certainty, but given the grave events of recent weeks, it is hard to see how deadly gunplay might be avoided at the 2016 Republican convention.
IN THE early 1970s, Hillary Clinton was a familiar face in the left-liberal milieu she had cast her lot with: a volunteer for the Yale Law School watchdog committee to monitor fairness in the trial of the Black Panther leader Bobby Seale; a worker for Marian Wright Edelman’s Washington Research Project (the precursor of the Children’s Defense Fund); a member of the legal staff of the Nixon impeachment inquiry. In one cause, however, she was mostly absent and unaccounted for: the protest against the Vietnam War. A friend of the Clintons, Greg Craig, told the New York Times reporter Mark Landler that while others in their circle were ‘heavily involved’ in antiwar activism, ‘I don’t remember Hillary having much to do with that.’ Clinton gave two pages to the war in her memoir Living History. She sympathized there with the burden of responsibility borne by President Johnson for ‘a war he’d inherited,’ which turned out to be ‘a tragic mistake.’ Johnson is her focus: the man of power who rode a tiger he could not dismount. On a second reading, ‘mistake’ may seem too light a word to characterize a war that destroyed an agrarian culture forever and killed between one and three million Vietnamese. ‘Mistake’ is also the word that Hillary Clinton has favored in answering questions about her vote for the Iraq War. Like every Democrat who has run for president since 1960, Clinton sometimes talks as if she wished foreign policy would go away. A president’s most important responsibility, she agrees, is to strengthen the bonds of neighborhood and community at home, to assure a decent livelihood for working Americans and an efficient system of benefits for all. Yet her four years as secretary of state – chronicled in a second volume of memoirs, Hard Choices – have licensed her to speak with the authority of a veteran in the world of nations. War and diplomacy, as that book aimed to show, have become an invaluable adjunct to her skill set. Clinton would want us to count as well a third tool besides war and diplomacy. She calls it (after a coinage by Joseph Nye) ‘smart power.’ Smart power, for her, denotes a kind of pressure that may augment the force of arms and the persuasive work of diplomacy. It draws on the network of civil society, NGOs, projects for democracy promotion and managed operations of social media, by which the United States over the past quarter of a century has sought to weaken the authority of designated enemies and to increase leverage on presumptive or potential friends.
The recent call by 51 dissenting State Department officials for U. S. military escalation in Syria is merely one of dozens of similar demands by neoconservatives and anguished liberals who accuse President Obama of moral failure for not dictating peace in Syria at the end of a gun. At almost the same time as the dissent went public, in fact, the hawkish Center for New American Security issued similar recommendations under the auspices of Michele Flournoy, Hillary Clinton’s likely pick for Secretary of Defense. Its report called for more ‘arming and training’ of anti-government rebels, launching of ‘limited military strikes’ against the Assad regime, and eliminating ‘artificial manpower limitations’ on military missions in the country. Critics warn that such policies would violate international law, in the absence of any United Nations authorization for intervention, and risk a dangerous confrontation with Russia. But the slew of reports, speeches and columns calling for ‘limited’ and ‘judicious’ military escalation have an even bigger flaw: they never make even the slightest case for thinking such interventions could work. Their claims reflect magical thinking. Champions of intervention cling to the wishful belief that if the world’s one superpower wants something badly enough, we must be able to attain it. But as our disastrous experiences in Iraq and Libya – not to mention Vietnam – should have made abundantly clear to any sentient being, America simply lacks the capability to find and empower suitable local partners and then dictate political outcomes.
Battle of Wits BALTIMORE – On Wednesday, the Dow rose over 18,000, for the first time since April. Hillary is riding high, too. She is a pro. She has the entire Deep State behind her – including almost every crony and zombie in the country – and a political machine that can turn out more claptrap than any in history. *** While her opponent rambles incoherently and mindlessly, every phrase from Hillary’s mouth is a carefully polished imbecility. Still believe in democracy? We have on our desk an unremarkable book by an unremarkable man. The Confessions of Congressman X is a slim volume of slim insights and thin commentary from a coward. Not that we have anything against cowards. We duck and dodge along with everyone else. In the Vietnam War, we had a student deferment…and a decent lottery number… along with millions of others. Despite our best efforts, we did get the benefit of a short, all-expense-paid ocean cruise, and more than enough beach time at Coronado Island, San Diego, courtesy of the U. S. Navy. Did we fail as a coward? Or fail as a hero? Like most people, it’s probably a little of both. But we can confidently report that, although we may have run over an innocent fishing boat or two, on our watch at the radar screen, we never posed any real risk to the Viet Cong.
This post was published at Acting-Man on June 13, 2016.
The world is becoming a more dangerous place and there are now just 10 countries which can be considered completely free from conflict, according to authors of the 10th annual Global Peace Index. The worsening conflict in the Middle East, the lack of a solution to the refugee crisis and an increase in deaths from major terrorist incidents have all contributed to the world being less peaceful in 2016 than it was in 2015. And there are now fewer countries in the world which can be considered truly at peace – in other words, not engaged in any conflicts either internally or externally – than there were in 2014. According to the Institute for Economics and Peace, a think tank which has produced the index for the past 10 years, only Botswana, Chile, Costa Rica, Japan, Mauritius, Panama, Qatar, Switzerland, Uruguay and Vietnam are free from conflict. Brazil is the country that has dropped out of the list, and as one of the worst performing countries year-on-year represents a serious concern ahead of the Rio Olympics, the IEP’s founder Steve Killelea told The Independent. But perhaps the most remarkable result from this year’s peace index, he said, was the extent to which the situation in the Middle East drags down the rest of the world when it comes to peacefulness.
We might as well get rid of Memorial Day, for all the good it does us. Originally ‘Decoration Day,’ the last Monday in May has been the designated time for us to remember the war dead and honor their sacrifice – while, perhaps, taking in the lessons of the many conflicts that have marked our history as a free nation. In line with the modern trend of universal trivialization, however, the holiday has been paganized to mark the beginning of summer, when we get out the barbecue grill and have the neighbors over for hamburgers and beer. As for contemplating the meaning of the day in the context of our current and recent wars, that is left to those few pundits who pay attention to foreign policy issues, or else to writers of paeans to the ‘Greatest Generation’ – World War II being the only modern war our panegyrists deign to recall, since it is relatively untouched by the ravages of historical revisionism. Indeed, as far as our wars are concerned, the very concept of historical memory has vanished from the post-9/11 world. It seems the earth was born anew on September 11, 2001, and only ragged remnants of our mystified past – mostly from World War II and the Civil War – survived the purge. In the new version our victories are exaggerated and glorified, while our defeats – e.g. Vietnam, Korea, our nasty little covert wars in Central and South America – are not even mentioned, let alone considered in depth. The abolition of historical memory is one of the worst aspects of modernity: it is certainly the most depressing. For the modern man, it’s an effort to recall what happened last week, never mind the last century. The news cycle spins madly and ever-faster, and the result is that we are lost in the blur of Now: for all intents and purposes, we are a people without a history, who recall past events – if we remember them at all – as one would summon a vague and confusing dream.
Poor Eliot Cohen: one of the principal architects of the Iraq war, and chief ideologue of Bushism in foreign policy – remember the ‘freedom agenda’? – he’s miffed that ‘This campaign shows that the foreign policy consensus that has framed this country’s work overseas since 1950 is in peril.’ His ire is directed at Donald Trump, but he’s more than a little annoyed at the left-wing of the Democratic party, which is also showing signs of messing around with the Sacred Consensus. How dare these miscreants challenge a ‘consensus’ that brought us a whole series of outright military defeats, from Vietnam to the Iraq war, and cost us tens of thousands of lost lives and an incalculable amount in dollars! Egghead ‘intellectuals’ like Robert McNamara and Cohen know a lot more about foreign policy than the denizens of flyover country, such as one Merle Haggard, who advised us in one of his ditties: ‘Let’s get out of Iraq and get back on track And let’s rebuild America first.’ Of course, Haggard didn’t know that – as Cohen helpfully points out – he was invoking a ‘notorious movement’ that ‘included not only traditional isolationists but also Nazi sympathizers.’ It’s a good thing we have Cohen around to set us straight: otherwise we might all be turning into little Hitlers when we think we’re just opposing yet another chickenhawk-inspired war. More seriously, Cohen’s vaunted ‘consensus’ is an illusion. No one asked the American people if they wanted to be the world’s policeman. What Cohen means is that all the Serious People in the Washington Beltway, and the concrete canyons of New York City, agree that other peoples’ sons and daughters ought to be sent abroad to fight foreign wars in which America’s real interests are tenuous if not nonexistent. Outside of that circumscribed world, the ‘consensus’ breaks down.
“Inequality is a euphemism, a kind of shorthand, for all of the things that have gone to make the lives of the rich so much more delicious, year on year, for the last three decades. And also for the things that have made the lives of working people so wretched and so precarious in that same time. This word inequality. It’s visible in the ever rising costs of healthcare and college, in the coronation of Wall Street, and the slow blighting of wherever it is that you happen to live. And you catch a glimpse of inequality every time you hear about someone that had to declare bankruptcy because a child got sick, or you read about the lobbying industry that drives Washington DC, or the new political requirement, the new constitutional requirement that every presidential candidate has to be a billionaire’s favorite, or a billionaire themselves. Inequality is about the way in which speculators, and even criminals, get a helping hand from Uncle Sam, while the Vietnam Vet down the street from you loses his house. Inequality is the reason that some people find such incredible significance in the ceiling height of an entrance foyer, or the hop content of a beer, while other people will never believe in anything again.” Thomas Frank
According to Counterpunch (2007) editors Alexander Cockburn and Jeffrey St. Clair: ‘The desire for secrecy is one of Mrs. Clinton’s enduring and damaging traits… Befitting a Midwestern Methodist with a bullying father, repression has always been one of Mrs. Clinton’s most prominent characteristics. Her’s has been the instinct to conceal, to deny, to refuse to admit any mistake. … Since Vietnam, there’s never been a war that Mrs. Clinton didn’t like. She argued passionately in the White House for the NATO bombing of Belgrade. Five days after September 11, 2001, she was calling for a broad war on terror… ‘I’ll stand behind [George W.] Bush for a long time to come’, Senator Clinton promised, and she was as good as her word, voting for the Patriot Act and the wide-ranging authorization to use military force against Afghanistan… Of course she supported without reservation the attack on Afghanistan and, as the propaganda buildup toward the onslaught on Iraq got underway, she didn’t even bother to walk down the hall to read the national intelligence estimate on Iraq before the war.’ As Secretary of State, Hillary Clinton instigated and legitimized the overthrow of the Honduran government in 2009 not all that unlike the 1954 Guatemala Coup engineered primarily by CIA Director Allen Dulles, supported by Secretary of State John Foster Dulles (image below, 1948) and with the glowing approval of President Dwight Eisenhower. In a March 2016 interview with Amy Goodman on Democracy Now, Greg Grandin, a professor of Latin American history at New York University, discussed the fallout from the 2009 Honduran Coup.
Events this week serve to remind us that Ukraine is very much still the epicentre of the New Cold War. Batchelor lists the fall of Ukraine’s Prime Minister, Yatsenyuk, a death threat to President Poroshenko by a Right Sector sympathizing member in the Rada, while in Europe, a Dutch referendum sunders the chances for Ukraine ever becoming a member of the E.U. But this week even more disasters are enveloping Poroshenko’s presidency. Saakashvili, ‘imported’ governor of Odessa Oblast, threatened to resign and also, according to Cohen (as seen on facebook), ‘take measures into his own hands’ if Poroshenko does not address reforms for corruption in government. This is pure sedition, Cohen points out. (And this writer finds it is most curious behaviour for ‘Washington’s man’ in Ukraine to heap more instability on the Kiev government.) Cohen, speculates that Saakasvili has personal designs on the presidency. The Panama papers scandal hi-light all these problems. The IMF will not bail out the government because of them, and Poroshenko is facing a potential loss of support by Washington and Europe. Cohen feels that a failure of this government would complete the failure for the whole country. Cohen begins an extensive discussion about how that government declined over the years due to its own ineptness, corruption and a hate based civil war against its own people -’the worst seen in Europe since the Second World War’. Somewhat more worrisome is the news of U.S. troops, elements of the California National Guard and air components, going to Ukraine. Officially this is a cooperative program between governments called the U.S. European Command State Partnership Program (SPP), and is one of 65 such programs worldwide. The Ukrainian relationship began in 1993. The danger in this New Cold War environment is that infrastructure sharing, and training with different weaponry between these two military groups allows a quick reaction force ability to be deployed to Ukraine. This can easily be expanded into a ‘Vietnam scenario’, and this American military presence in Ukraine may be that reality in process. On the face of it the U.S. sending units of its military to Ukraine for training does not make sense when the national army of Ukraine is in drastic decline – essentially in step with the economy there; it does not want to fight and has a serious desertion rate. But does Washington have a plan? There appears to be so much chaos that on the surface this only seems to be another Washington failure.
Last month the U. S. State Department launched the “American Innovation Roadshow” with the Association of Southeast Asian Nations (ASEAN). Senior members of U. S. Secretary of State’s John Kerry’s economic team led business delegations from financial investors, U. S. multinational and early stage companies. In two stunning speeches, the State Department began advocating the adoption blockchain technology. Ambassador David H. Thorne, senior adviser to the secretary of state, was among those attending the roadshow. The ambassador leads a departmentwide effort to ‘position economic and commercial issues more prominently within the U. S. foreign policy landscape’ and to ‘elevate the importance of entrepreneurship, technology and innovation in the State Department’s promotion of global prosperity.’ Thorne gave speeches at both the March 3 @America Innovation at Innovation and Entrepreneurship Presentations at Pacific Place in Jakarta, Indonesia and the March 7 Vietnam Ministry of Science and Technology Innovation Conference in Hanoi. Speeches given by the ambassador encouraged these countries to adopt blockchain and distributed ledger technologies. Both the Vietnam and Indonesia (prepared) remarks included the following similar, if not identical, recommendations: ‘…[W]e would like to encourage the development of new financial technology or ‘FinTech’ innovations – blockchain and distributed ledgers, mobile banking, etc – which will provide a backbone to the e-commerce activity … These kinds of tools naturally encourage fiscal and business transparency, not just for start-ups but for everyone, which is a key for reducing corruption and improving efficiency.’ Bitcoin Blockchain Advances Last year the White House named Dr. Ed Felten deputy U. S. chief technology officer. Felten was previously the director of the Center for Information Technology Policy (CITP) at Princeton University, and is a well regarded Bitcoin researcher.
Free trade is a great concept, as are free markets and freedom. The problem is none of these things exist in practice because they don’t provide sufficient advantages to the ruling class. The Fed and HFT systems now dominate global markets, western nations systematically overthrow any (freely elected) foreign government that doesn’t bow down to them and free trade agreements are put in place to ensure investors maximize profits no matter what the costs to society. Let’s focus on this last one. You see rarely do nations turn away capital investment inflows. And so trade agreements are not created to allow for the free flow of capital as is generally touted. That is perhaps the biggest fallacy in the public’s perception of ‘free’ trade agreements. If a US company wants to build a factory in Vietnam and employ 200 workers there they will be welcomed with open arms. So then if these trade agreements are not meant to allow the free flow of capital what is their purpose? It’s very simple. In microeconomic terms, it boils down to risk/reward. That is, all investments will generate some expected cash flow but will face some risks of realizing those cash flows. One way to improve return on investment is to lower costs, everything else equal. So if I can reduce my costs yet maintain my revenue and risk structures then I am better off. Corporations realized that one very easy way to reduce costs is to move labour to undeveloped nations where labour costs are only 5% to 10% of those in developed nations. That means I can greatly improve my returns to investors if I go ahead and move my operations overseas. The caveat in the plan remember though is I have to be able to keep my revenue and risk structures the same. And this is where corporations realized they need a trade agreement. You see moving hundreds of millions in borrowed capital to a nation that has poor contract law and unstable governments adds a tremendous amount of risk to the investment model. And so the added risk (which significantly lowers the probability and thus value of future cash flows) creates new costs that essentially negate the reduction in costs obtained through cheaper labour. This means ROI doesn’t improve, which was the point of moving operations overseas.