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Kyoto Protocols Would Have Accelerated China’s Plan to Reverse-Exploit EurAmerica

In 1978, the year China emerged onto the world stage with its four modernizations, China, a country with four times the population of the United States, had a paltry gross domestic product of $216 billion, less than eight percent of the United States. China exposed her strategy of four modernizations to the world as if to say,”Please invest in China and we will ensure that our workforce is educated, and that our business infrastructure is stable for your investment.” Yet, this openly expressed strategy, that may have seemed to the rest of the world as a difficult but noble goal for China to achieve, was only the tip of China’s Grand Plan, and only the part she wanted the world to see.

EurAmerica’s history with China was one of gunboat diplomacy, exploitation, and forced trading. When China opened her borders again in 1979, EurAmerica’s merchants were enthusiastic to exploit an opportunity once again. Yet, China had not forgotten EurAmerica’s role in the Opium War, the Sino-Japanese War, and the Boxer Rebellion. China would never open her border again to be exploited. When she finally opened her border in 1979, it was from a position of power, deep strategy, and long lived planning that suggested EurAmerica was finally ripe for reverse exploitation. China’s grand plan was to emerge as the 21st century world power.

What boldness of purpose China must have felt as she aligned her nation’s efforts to that decade’s long task. Looking back today on her impossible achievements, one must give pause to the monumental economic goal she set for herself in 1978, indeed greater than America’s technical goal of landing on the moon early in 1961. Yet, with such a miniscule $216 billion GDP and few material assets how could China possibly build her empire to surpass that of the United States?

Through a hybrid statist-capitalist political structure, China would create a conduit through which American businesses would willingly draw down the wealth of Europe and America and transfer it to China in order to share in the prosperity of that wealth transfer. Through the centralized imposition of forced savings on its people, China would provide low cost labor to sell goods at low enough prices to cause EurAmerica to look the other way as their neighbors’ jobs went to China. Through low interest loans, China would entice EurAmerican politicians to spend beyond their means to temporarily ease the pain of EurAmerica as China’s sucked away their life force. These were the basis of her strategy.

Similarly to how a business cycle contains early adopters and late stage laggards, China planned a capital extraction cycle for EurAmerica, in which China would extract capital in multiple phases, each phase having an optimal extraction strategy. First extraction would be through the early adopter “gold rush” investors rushing into China to stake a claim. China would also plan for early majority, late majority and laggard’s capital extraction.

In 1978, China assessed America’s assets:
• America’s most valuable assets were intellectual capital that resulted from 200 years of publicly funded primary and publicly subsidized secondary education
• America’s physical assets included business assets, commercial, and residential real estate worth $7 trillion in addition to public assets of land, buildings, and infrastructure
• America produced 26% of the world’s GDP at $2.8 trillion and consumed a quarter of the world’s goods
• America’s debt was as low as it had been since WWII as a percentage of GDP and its 110 million workers were capable of doubling their loans to provide China more capital
• America’s Baby boomers were entering a peak spending phase followed by peak saving
• America’s constitutional republic allowed a relative few capitalists to control the direction of her economy

By 1978, multinational corporations had steadily grown in number and size for two decades. China’s success depended on corralling MNCs through direct foreign investment to create massive inflows of capital quickly monetized as hard assets and infrastructure.

China would entice merchants to invest by offering access to the future potential purchasing power of its people. However, given China’s low household incomes, market penetration would be low to start. Therefore, to entice the early adopters, China would create special economic zones that provided the perfect investment opportunity of cheap educated labor, loose regulation, low taxation, strengthened business law, and enhanced infrastructure and transportation, in which businesses could produce goods at very low arbitrage costs to sell back to their home countries for high margins.

With low cost of goods from special economic zones, early adopter businesses were highly profitable and banks poured investment into China as a result. But, China could not complete her Grand Plan to multiply her GDP 50 times by enticing early adopter investors alone. She had to implement a plan timed to extract maximum dollars from EurAmerica at each phase of her exponential growth.

During the next stage, the early majority stage, China manipulated baby boomers’ peak spending phase:
• China’s low prices secured America’s baby boomers as loyal customers
• Prior to America noticing a substantial loss of jobs, China secured free trade agreements, and mined American businesses for their intellectual capital.
• She reinvested profits back into America’s debt to keep America’s interest rates artificially low in order to spur on higher levels of consumer spending and government borrowing.
• China supported lobbying of America’s mass investment vehicles to fund MNCs. 401Ks and IRAs, created in ‘80and ’81, funneled money through the stock market into MNCs for investment into China.

Then, America was drawn into the late majority stage as America’s baby boomers entered their peak saving years. 401Ks and IRAs artificially fed the stock market frenzy. Baby boomers sensed they knew how to invest in a bubble market that kept rising. With access to low interest rate loans kept low by China’s reinvestment, speculators borrowed money to bet on the rising stock market. America ultimately increased its debt to pump up stock values to build more Chinese factories.

Inevitably, the stock market bubble burst, leaving America’s baby boomers with lower retirement savings. The stock market that seemed destined to go up forever finally reversed rapidly decreasing valuations. However, the debt that had funded its escalation remained.

During the late majority phase:
• More businesses began to invest in China just to remain competitive with businesses that had moved offshore earlier.
• Tens of thousands of businesses transferred factories to China to obtain low cost labor
• Millions of Americans lost jobs
• With a generation of education completed, China now was able to take more advanced jobs as well as factory jobs. America’s bastion of protected, more technically competent jobs was not a bastion after all.
• American retail outlets for Chinese goods grew exponentially
• China continued to loan its excess profits back to the American government to keep interest rates low.
After having lived through the weakness of the stock market, real estate appeared to be the baby boomers’ best retirement savings alternative. In the early stages of the Great Ponsi, housing prices went steadily up. With low interest rates, Americans could now borrow on the value of their homes to continue funding China’s growth. China’s final stages of extraction saw the housing bubble increase beyond what had ever been experienced before.

Even though American jobs were increasingly being driven offshore, the frenzy of increased housing prices allowed additional borrowing from Americans, feeding the China gold rush further. This behavior was not unexpected, following a pattern of historical boom-bust cycles and was part of China’s planning. As a result of the stock bubble and the housing bubble, America’s total debt had risen to over $55 trillion. With such exuberance in the housing market, secondary debt markets participated in credit default swaps to the tune of an additional $42 trillion. China now had extracted close to the maximum of America’s value, leaving America with the corresponding debt.

So China extracted maximum value, first in trade secrets and early adoptive money, then by IRAs and 401Ks, then by stock market and home equity loans, then by 2nd mortgages and housing speculation. China monetized the massive cash flows as quickly as possible, building infrastructure and excess manufacturing capacity, while leaving America holding debt in exchange.

Without any other rising asset values to borrow from, America has tapped out its debt. Having maxed its debt, America can only print money to finance its trade deficits. Without further real debt derived money extraction to give China for infrastructure investment and without a real ability to pay for low cost Chinese goods, America is fast losing her worth to China as an infrastructure vehicle. Recognizing that maximized extraction and rapid monetization of America’s wealth is nearing its end, China is now finalizing the implementation of her strategy, that of pulling out of American debt before other countries that maintain reserve currencies create a run on the dollar.

In thirty short years, China was able to accelerate her GDP from $216 billion to $11 trillion. She amassed reserve capital of $3 trillion. She reversed America’s fortunes from the greatest creditor nation to the greatest debtor nation. She gutted America’s factories while creating the world’s largest manufacturing base in her own country. A measure of output that highly correlates to GDP is energy consumption. In June of this year, 2011, China surpassed the United States as the largest consumer of energy on the planet. While the U.S consumes 19 percent of the world’s energy, China consumes 20.3 percent.

In 1992, the world came together to discuss the impact of climate change resulting from energy consumption. The talks resulted in Kyoto protocols being initially adopted in 1997 that attempted to create a framework for reducing greenhouse emissions. The protocols called for 33 industrialized nations to reduce their greenhouse gases to 1990 levels and then to maintain emissions at those levels. Although it called for emerging countries like China to voluntarily lower levels, it did not require them to be mandated.

Of course, all of the countries who had no requirements to reduce their emissions signed the agreement. The United States, under scrutiny from environmentalists and others did not sign. China did sign. This was an additional strategy perhaps not envisioned in 1978 that nonetheless would have assisted in accelerating America’s slide had we signed.

GDP highly correlates to energy usage. In 1990, America’s real GDP was about $8 trillion as compared to $14 trillion in 2011. Kyoto would have caused America to either:
• Invest billions in the attempt to lower our energy usage per dollar of GDP
• Pay billions to other countries to have them produce less so that we could grow our GDP from $8 to $14 trillion
• Or, maintain our GDP at 8 trillion

In the meantime, China’s GDP in 1990 was $1.3 trillion and has since grown to over $10 trillion. China’s energy use has correspondingly grown as well until the point that this month, she overtook America as the greatest polluter. Kyoto was a grand idea that was doomed from the start because of the flaw that allowed the now greatest polluter to play by different rules. It attempted to cap the economic growth of America while allowing other countries to grow unfettered.

China had a Grand Plan that has been executed with the finesse expected of a centrally planned economy. Kyoto added nicely to that plan. America has been thwarted by China’s plan but now has the ability to reverse course. Given China’s size and growth rate, she will pass us soon if she has not already and her stride will be too great for us to catch her. However, by avoiding traps like Kyoto, and understanding that economic gamesmanship can accomplish a much greater destruction of a nation’s wealth than warfare ever could, perhaps America can once again right its course.

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Filed under American Politics, China, Foreign Policy, Free Trade, Multinational Corporations, War, World Sustainability

Are Tariffs a Strategy for World Peace?

War with China may be inevitable. When EurAmerican multinational corporations (MNCs) were allowed by our governments to trade trade secrets in exchange for opening of Asian markets, they may have sealed the world’s fate. China’s output will soon surpass America’s and her rate of growth continues to far outpace ours. She is implementing strategies that promise to replace America as the World’s empire during the next 15 years.

Every transition in history from one empire to another has been accented by great wars. The transition of the last empire was no exception. Great Britain did not acquiesce to America’s century until after the throws of WWI and WWII. Now the rapid ascent of globalization, made possible by the transfer of capital from international bankers to MNCs, has driven the world to the edge of another conflict in our lifetimes.

During the last transition, Germany, racked with debt from WWI, experienced hyperinflation with an impotent republic led by political extremists. While the rest of the world recovered, Germany’s inability to deal with its financial obligations led to a vacuum that was filled by the Nazis. Without immediate government action, America’s debt will also become unsustainable, crowding out vital services and creating societal instability similar to Weimar Germany. Given that America has the most powerful military the world has known, will America be an exception to 6,000 years of recorded history, or will our society fall prey to the severities that initiated the last world war?

The answer rests with our MNCs. They have historically persuaded our government to use America’s military to meet business objectives. And now for the first time in history, MNCs have the power to determine the path of our “empire’s” transition. If our corporations are unable to mitigate country risks by growing beyond the regulation of most countries (many are not far from that now) they will continue to rely on the might of our military. If our MNCs position themselves to succeed even as America fails, they will decide war is not in their best interests.

If enough MNCs make the leap to disavow an American connection and choose to forego the protection of our military’s gunboat diplomacy, our MNCs will support the gradual dismembering of our military, reducing its capability to strike. Given America’s inability to continue funding our military as our businesses depart, some Americans may choose to rise up similarly to Japan or Germany during the 20th century. How do we mitigate such a potential? A tariff or subsidy program could achieve full employment at sustenance wages, and could deter or delay war.

When citizens of our nation are unemployed, they have several options. For 26 weeks, they have unemployment at a rate much lower than full wages. During this Great Recession, our government extended unemployment to 99 weeks. After 99 weeks, the unemployed join the ranks of the 99ers, who are given few comforts from the American system if they are not disabled or do not have children. Instead, those without family members to rely upon or without black market skills or goods to eke out an alternative living, must join the world of the unseen, those citizens who blend into our peripheral vision not to be looked upon for fear that we too will be drawn to their fate. Our country’s lack of a comprehensive strategy to transition to globalization has condemned millions of vital Americans to this murky existence.

Rather than relegate 99ers to the dark crevices of our society, America must offer a better path. We must choose to overcome partisan maneuvering and compete with the world as best we can. Rather than continue down this political path that will lead ultimately to class warfare and further disintegration of American culture, capabilities, and competitiveness, we must recreate a consortium of capitalists and workers that benefits all Americans.

A cornerstone of that consortium is that both businesses and workers must succeed. Tariffs on foreign goods that cost the American society more than the savings they provide to the American consumer are a method for producing mutual success. Tariffs provide American factories price controls to allow domestic jobs at rates that can replace extended unemployment. During periods of innovative growth and peak business cycles when higher wages are available, those businesses least able to compete will be lost to international competition but during periods of lower innovation or business troughs, Americans will keep jobs and foreign companies providing goods to America will be the first to lose employment.

Some say that tariffs gouge the American consumer, but that does not evaluate our citizens holistically. A consumer is also a tax payer, a worker, a provider, a parent, a partaker of the environment, and a member of a community. If the net holistic benefits to the American citizen are positive for a particular product or service, then that particular product or service should escape protectionism. However, we should determine how to redistribute the gross benefits and costs within our country to equitably share the benefits and social costs.

Others say that tariffs and subsidy protections would cause American businesses to become complacent and to lose their incentive to compete with the rest of the world. We continue to use this reasoning even as our structural unemployment continues to grow. However, for the 40,000 factories that have left our shores, American ingenuity has been unable to keep pace with even no complacency. American businesses will always have an incentive to improve productivity if they wish to compete in world markets regardless of subsidies or tariffs.

Still others say that tariffs perpetuate poor quality and operating practices. America did pass through a moment in time prior to globalization when we did not envision a world of emerging countries competing through quality and innovation. However, we will never return to that moment, except for the nostalgic pining of our elders remembering “better days”. Nonetheless, offsetting wage and regulation cost differentials with tariffs will not protect American businesses from foreign quality and innovative competition. We will forever more be compelled to compete.

Mitigating wage and regulation cost differentials will only slow the rapid drain of jobs, manufacturing, and national security protection of America. Those goods which are most able to provide win-win benefits to both America and her trading partners will be available in our markets at lower costs, others at similar costs. Net benefits to America will be much greater than this wholesale gutting of American value, jobs, and self worth. During times when accelerated American innovation thrusts Americans into higher wage jobs, more foreign products will be available at lower prices.

Tariffs are only one piece of a comprehensive strategy to protect America from a plunge into obscurity. However, given the realities of our politicians’ impotence in dealing with the onslaught of multinational corporations and international bankers, it is a critical first step that should be implemented immediately if we are to provide America time to catch up with China’s immense and effectively operationalized strategies. America’s current path is not healthy for America and ultimately will not be for our economic adversaries either. If war is an inevitable part of transition, then any actions taken to delay or deter war are critical. I deem strategic tariffs a support for jobs, a net benefit to America’s finances, and a mitigation to war.

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The Wealthy Support CO2 Escalation

What an abundant element this carbon is and yet what trouble it presents the world. So many deaths have occurred trying to control it. Japan was forced into world war with the U.S. in 1941 when we refused its transfer in the form of oil to aid her imperialism. African nations have been at civil war over the diamonds created by its compression. The world possibly is being whipped into a cataclysmic frenzy of environmental destruction by its combustion. And mankind seemingly is accelerating our corruption of the environment with carbon to create, concentrate and defend wealth from others.

Man’s accelerant for creating value has been the combustion of carbon. Thankfully prior to the industrial age, the earth was able to capture CO2 faster than man could contribute it. However, since the early 1900’s, as industries and transportation have escalated combustion, disasters have been escalating both in size and number in correlation to the excess CO2 contributed by man.

Whether there is cause and effect of creating wealth through carbon combustion and the apparent destruction of the world’s environment however is of little consequence. Great concentration of wealth requires great emission of CO2, and political and business powers will continue to accelerate CO2 production to consolidate the world’s wealth. To accelerate their wealth creation, they will continue to globalize wealth creating (carbon burning) assets to producers many miles and oceans away from the ultimate consumers, and will exacerbate carbon combustion through greater distribution distances.

Carbon changes will continue to impact us at both the macro level (wealth creation) and at the micro level (health). The human body needs to consume carbon to live and the brain has a set point that tells us to exhale when carbon reaches its upper limits in our blood stream. A quarter of the world will die as this exhaling mechanism fails us and we slowly suffocate to death through the ravages of COPD brought on through years of inhaling carbon from the tobacco industry.

We know that man’s internal set point for carbon in the bloodstream has been constant for millions of years but so has his lower set point. On a macro level it appears that higher atmospheric CO2 is causing global melting. On a micro level, what is it doing to the molecular workings of the human being? Since environmental CO2 has edged slightly higher in the air we breathe, what has that done in evolutionary terms to our body systems? Our industrial revolution has not given the world much time to compensate, e.g. melting polar ice caps, and what have living organisms been able to do to compensate for its detrimental effects?

Whether or not carbon combustion is destroying our ecosystem or our biological compensation, this element carbon in its liquid form will be the engine of mass transfers of wealth and world destabilization for years to come. The international banking system will continue to support capital flow in pursuit of carbon transfers. And quantitative easing II has only helped to clear a temporary but sizable log jam in that transfer system while destabilizing America’s future.

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Trade you an Ounce of Gold for a Haircut?

I was the last customer to receive a haircut from my barber so after paying him, we both walked out to our cars. As he drove away in his Ford sedan, I thought that people all around the world give haircuts and that most of the barbers in our world cannot trade their services for an automobile. The mere birthrights of an empire’s citizen enable him to receive empire benefits from his participation in its economy. A rich country’s citizens trade the gold acquired through the ages from other nations with each other to receive small comforts of life from each other.

The bible tells the story of a rich man that asked Christ how he could obtain heaven and Christ told him to give away all his belongings to the poor. The man went away saddened by Christ’s answer but kept his belongings. A citizen of a wealthy nation by virtue of their birth fits the parable of the rich man. While I do not think the story truly means we have to give away our wealth to enter heaven, it certainly lends itself to the hypocrisy of a wealthy nation’s citizens denouncing the hegemonic advances of their country while indulging daily in the relative benefits of their happenstance.

Obviously all democracies are not hegemonists but democracy is the only form of government that has shown any semblance of restraining hegemony’s corruption, or corruption from petty tyrants that squeeze the little wealth of the citizens of African nations for their own aggrandizement for that matter.

Certainly there are wealthy elites in Europe that will benefit from spurring on America’s involvement in Libya just as there are financial lobbyists that attempt to sway every decision made in Washington and every decision made by politicians worldwide. One benefit of Democracy is that countries somehow occasionally rise above the incessant lobbyist barking to do the right thing, and in this case it was to give the people of Libya their own voice against a maniacal bully who has vowed to commit wholesale slaughter of anyone and all who dare to speak of freedom.

As America leaned socialist during the great depression to begin a redistributive process of allowing the common man to share in the wealth of its nation without destroying its capitalist core, so will African nations and others find their way. Revolution seems to destroy economic engines. Democratic evolutions can point a nation’s capital in the direction of the good of all its people.

When I hear cynicism about America’s justification for entering Libya, I am more sympathetic to the argument of isolationalism and protecting our military from harm when the threat to our country is minimal than I am to insinuations of the U.S. bombing to prop up our empire or of us forcing our failed form of democracy on the continent of Africa in this case.

I understand the continued economic injustices that have occurred in Africa after their decolonization movement failed to give them the freedoms they desired when despotism, supported by industrialized nations, proved too strong a force to overcome for the next several generations. I understand that they have many reasons to distrust nations that have exploited their continent for a century and now say they want true independence for Africans.

But now is the time that countries like Libya could use oil to invest in infrastructure to build opportunities for their nations, or for countries like Egypt, whose population is educated, to take on economic growth. My push for democracy is that any nation is subject to tyranny by the few on the many, and that no matter if it is America or Libya, democracy is needed to defend against corruption.

In my barbershop scenario, perhaps the 22nd century chinese barber will be given title to a barbaric fuedal city in Europe as the price for his haircut. Perhaps the concentration of national wealth will create the ultimate in barter exchange between the birthright entitled. ( barbaric stretch of the imagination, agreed)

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While War is Sometimes Justified, Its Aggression is Encroached by Multinational Corporations

As our country lent our military support toward Libya, voices were heard from all sides of the issue on America entering this war. I had my own rationale for support of Libya, being that our history owed its allegiance to balancing the disproportionate voice of Muammar’s loyalists that bloodily silenced the Libyan cries for freedom from tyranny, trampling their neophyte flags of democracy.

Opposition rang out that there is never cause for pursuing war, that all war is instigated by evil, and that Libya is not a righteous purpose for an American call to arms. Although our country has only declared war five times, I intend to reflect on war’s broader sense, armed conflicts in which one state imposes its will on another.

Humankind’s darker nature has always been to impose our will on others. In fact, all religions have recorded that man is driven by lust, greed, rage, envy, vainglory, and hubris, to aggressively take what others have gainfully acquired. As technology and civilizations have advanced, war is ultimately the tool that has best bent the will of nations.

From the beginnings of such great city states as Sumer in 2,700 B.C. until today, parallel development of technologies and cultures has enabled men to use war to feed their unsatiated desire for power, wealth, subjugation and slavery of others. As each empire from the Egyptians through the Persians, Romans, and Ottomans rose and fell, expanding armies and improved logistics increased geographies of conquest to eventually subjugate the earth’s known limits.

Earlier Americans were not the exception. After having penned the Declaration of Independence and Constitution, we also recorded for posterity our malevolent aggressions. Armed with euro-centric land charter rights, we justified pacification of natives. We offered biblical verses to justify all manners of sin in the institution of slavery, supplied by warring African nations. We claimed Manifest Destiny to take land from the Mexicans as we completed our expansion westward. And with the industrial revolution, we acquired the capital and technology to exert our wills on “lesser civilizations” through colonization and banana wars.

While history’s wars of aggression have mostly been thrust upon the world by power lust rulers and capitalists attempting to garner military objectives for their own ends, wars have also been waged to free people from tyranny. Since man’s darker nature will always exist, all nations must be able to defend themselves against the aggressions of others, and when oppression comes from within, the governed must ultimately, if by no other means, defend against despotism.

America’s military action in Libya was to defend humankind to this end, to free Libyans from the bleakness to which the world is capable. Libya is within the moral subset of war that justifies force against institutions of evil purpose. For this reason, modern nations must support standing armies.

The existence of an army however leads to the temptation of a corrupting use of its force. Abraham Lincoln in his comments regarding the Mexican-American war stated, “Kings had always been involving and impoverishing their people in wars, pretending generally, if not always, that the good of the people was the object. This our Convention understood to be the most oppressive of all Kingly oppressions; and they resolved to so frame the Constitution that no one man should hold the power of bringing this oppression upon us.”

If the mere existence of a standing army tempts its corrupting use, it is understandable that the third world is wary of the greatest military force ever known. America’s 20th century exercises were mixed with both historic defense of freedom and support of hegemonic expansion. However, as we placed bases in over 700 locations worldwide, our transition to the world’s first and sole superpower was also a witness to the transfer of our military’s aggressive purpose to multinational corporations (MNC).

Having created a plateau of peak world stability over the past three decades, the United States military has also created the perception of less need for its presence. As such, MNCs have perceived less value in militaries to accomplish their purpose. If the aggressive purpose of militaries was to take the spoils of other nations by force, this purpose has been transferred to the MNCs, who accomplish this task without bloodshed. Man’s darker nature has created a modern wealth extraction mechanism that has far exceeded the capability of war.

Global financial, communication and operational technologies allow a hyper-concentration and fungibility of capital by MNCs that subdue the governance of democracies, autocracies and theocracies. They thwart the efforts of communism and socialism to redistribute their power. They have conquered most nations on earth and have aligned the productive means of much of mankind to their will.

While modern MNCs do employ mercenaries, and in fact some MNCs specialize in the field (i.e. Blackwater), MNCs are accomplishing more than any imperialistic state has been able to achieve through war. However, since the effects on mankind are similar, the definition of war may need to expand to the forces employed by these new virtual states. America is also being subjugated by the darker nature of men. This modern MNC warfare is upon us and we should arm ourselves before its tyranny bends us to its will.

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Filed under American Governance, Multinational Corporations, social trajectory, War

Tariffs are a Winning Political Strategy Unless A Political Party Counters with a Solution that is both Populist and Effective

The relative world peace established by the United States’ rise as the world’s sole super power has for several decades lulled the potential for global war. By spending more than all other nations combined on war capability during the previous decades, America effectively eradicated multinational corporations’ (MNCs) only known natural predator. In the absence of other governments organizing their citizens to wage war for control of another country’s resources, multinational corporations have had no natural predators in third world countries for the past 40 years.

In third world countries, where developed and complex economies do not exist, dictators have been easily influenced to enter into one sided contracts and socialist countries’ have had few alternatives to the purchasing power of corporations but to enter into monopolistic contracts as well. Therefore, just as in any ecosystem that is devoid of natural predators, MNCs have proliferated during the previous three decades. While U.S. corporations have led the growth of MNCs, industrialized countries throughout the world have competed for direct foreign investments worldwide.

Two results of this explosion of MNCs have been the driving down of consumer goods prices and loss of jobs in industrialized nations. Since America consumes a quarter of the world’s output, jobs have been lost in countries across the globe to support our consumption. Other industrialized countries have partially subsidized the price benefits that America has received.

However, America has also lost jobs as a result of the transfer of investment to other countries. Some in America claim that we should have imposed limits on our country’s corporations’ foreign investments to limit American job losses. Limiting our investment would have only allowed other countries’ corporations to invest without competition from U.S. corporations. As a result, our corporations would miss opportunities as other nations’ corporations increased worldwide market share. Therefore, America correctly acquiesced to the notion that we must share the burdens of globalization to ensure our corporations maintain world market share of global investments.

Globalization is a worldwide phenomena created by America’s overwhelming military goals. Our military is an economic catalyst transferring the wealth of industrialized nations toward creating household purchasing parity around the globe. And this economic disparity of household incomes is so great that it will continue to provide overseas investment opportunities for America’s wealthy for decades to come unless the disaffection of industrial nations’ middle classes creates another predator. While China is quickly gaining long term worldwide contractual relationships with third world countries and building military defenses for a future military threat to its hegemony, war does not seem a threat to globalization for several decades at least. The more eminent threat to globalization is the political opportunity that MNCs have caused by their increasing structural unemployment in industrialized countries.

America’s Republican Party is now attempting to capitalize on the high unemployment of our middle class by touting tariffs as a way increase employment and to win the 2012 elections. Tariffs do increase employment and America is ready for a populist employment platform. Unfortunately, history has shown that as a government centric solution, tariffs are ineffective and ultimately cost a nation more than they benefit it. However, unless political parties are prepared to counteract waves of populist sentiment, America is destined to repeat detrimental policies. Remember what happened in Great Britain in 1945. Even though Winston Churchill had 83 percent support after the war, his party was overwhelmingly rejected when the Labour Party touted full employment, health and housing platforms.

To win against the party that supports tariffs, the competing party must support full employment that does not raise costs to Americans and that ultimately makes our goods and services more competitive in the world marketplace, two things that tariffs cannot accomplish.

My job voucher plan is a solution that can give the political party that retains it as part of its 2012 platform a winning populist strategy. It makes America competitive without raising costs of foreign goods to our consumers. It creates full employment without creating more social costs than our current unemployment and welfare solution. My job voucher plan does reduce the cost of American goods, does provide full employment for our labor force, does reduce our trade deficits, and ultimately pays back America for its investment in our people.

If you have a member of your political party that would be interested in more details, I would be happy to engage a discussion

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Filed under Foreign Policy, Free Trade, Full Employment

Defense of Freedom Pragmatically Mitigates National Security Wars

To put our servicemen and women into harm’s way, America must be guided not only by lofty ideals but by self interest and most importantly national security. Our incentives in Korea, Viet Nam, and even the Cold War were guided by a combination of the three. Obviously in recent years, human atrocities have occurred in places like Darfur without our intervention, and we have backed governments that, while lacking protection of human rights, have supported our interests in a hostile environment. While I am sometimes discomforted by our hegemonic decisions, I try to understand the complexities.

The demonstrations begun in Tunisia have now spread headlong into Bahrain and Saudi Arabia, our chief military and economic allies of the region. Our support for Libyan freedom fighters cannot be seen as a support in the eyes of our Allied kings for continued violence against regional leaders. I see the complexity. However, Muammar is a crazed dictator responsible for Lockerbie and state sponsored terrorism. He is a despot that has fairly easily differentiated characteristics from our allies. His willingness to turn military against his own people places his regime in a category of its own.

We are now policing Iraq, at war in Afghanistan, and allied with Israel in an embroiled region that is critical to our national security and standard of living. As the consumer of a quarter of the world’s oil, disruptions from the region will have dramatic effects on our economy. (As an aside, people are not yet speaking of the Step change down in Japan’s energy dependent economy because of its permanent loss of about 6% of its power output that will take several years to replace) So does Libya, who produces less than 3% of the world’s oil supply, pass the ideal, self interest, and national security hurdles?

I say yes, with the understanding that there are risks of enforcing a no fly zone but they are minimal. We placed a similar zone above Iraq, who had a more advanced military, without material losses. None-the-less, the risks of not supporting Libyan freedom fighters is the long term ill wind against America that will blow across the new governments of Northern Africa.

Our resistance to support Sudanese, Iranians, Tunisians, Algerians, Egyptians, Yemenis, Bahrainis, Saudis, and now Libyans while securing Kuwait, Saudi Arabia, Afghanistan, Iraq, and our friend Israel will have long lasting detriment to our economic security that could be mitigated by some show of support for the democratic ideals that all people see as America’s beacon. If our economy is severely threatened by loss of oil, infinitely more loss of American lives will ultimately be shed.

This old man believes in ideals. Some might fear I forget that ideals are an old man’s folly and war a young man’s end. I believe that given the pragmatic alternative of spending some effort today to secure the historic democratic alliance of a critical world region versus the alternative of major military conflict later with great loss of lives to secure safe transit of oil amidst a resentful coalition, I cautiously prefer the former.

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America Must Now Repay the French with Our Support of the Libyan Freedom Fighters

There are those in America and elsewhere that claim America has no right to enter the sovereign space of a country to determine the outcome of its civil war.  They claim that America’s time as the policeman to the world has ended, and it is time to get our own house in order.  While I do not disagree that our economy is in disarray and that our main focus should be to revive our economy, I fear we will make a grave historical error if America does not voice its alliance with the freedom movement ongoing in Northern Africa with a show of military support, if only to enforce a no fly zone.

Rather than the right to determine the outcome, we have the obligation to support the will of all people to have self determination.  America needs to be on the correct side of history in supporting the will of Northern Africa to be free of non-representative government.  This historic shift in human sentiment requires our firm commitment. Unfortunately, our economic future is tied to energy concerns that have caused our leadership to quietly sit out a movement that will remember our lack of resolve centuries into the future.

America’s history books will forever endear the French, not because they took over our war as another battleground with the English, but because they stood with us at York fending off the British fleet giving Cornwallis no alternative but to surrender to General Washington.  America does not need to defeat Gaddafi and be the arbiter of regime change.  We just need to fend off the overwhelming superiority of his planes with a no fly zone for history to be remembered for our part on the right side of freedom.

When Marquis de Lafayette lost his life during the French Revolution, America was unable to come to his rescue in time. Having remembered his assistance to our revolutionary cause, when the Americans arrived in France in WW I, General Pershing said, “Lafayette, we are here.”

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Multinational Corporations Have Broken Their Social Contract with America

As children, we learn the game of declaring things so; “I called the front seat”. This seems a trait of humankind. Throughout history, men have declared land theirs and it was so. Their descendants declared themselves to be kings by divine right and it was so. They sent conquerors to declare ownership of lands inhabited by others with lesser technologies, and it was so.

European Kings sent tiny sailing vessels to North America to touch the edges of a great continent, and to declare ownership of entire swaths of land reaching from sea to sea by virtue of calling it so. They declared kinsmen as lords over America, granting them ownership of massive estates in return for tribute, and it was so.

American lords granted settlers tiny tracts of their lands in return for tribute. Settlers moved west, displacing Native Americans, declaring Manifest Destiny, and it was so. Settlers moved further west, taking Mexican land by declaration and war. To profitably till barren soil, southern capitalists declared a right to buy “unsaved souls” to force profit out of the land, and it was so. In Hawaii, missionaries came to bring salvation to islanders, but within two generations, their descendents declared ownership of all the lands once subjugated by Hawaiian kings and relegated generations of Hawaiians to servitude. A majority of the lands of Hawaii are still owned in trusts by missionary descendents.

These were the birthrights of globalization; war, conquest, declarations, slavery and servitude. By these early movements of people, the world divided into capitalists and workers, reconnected through social contracts. Workers leased capitalists’ land to improve their lives. In exchange, workers provided tribute for their use of capital. Throughout the centuries, capital has transferred to successive generations of capitalists with new capitalists added and others dying out as capital returns dictated opportunities for further ventures.

However, when in history the symbiosis between governors and governed has broken from excessive taking of capital, bourgeois has risen up in defiance of humankind’s declaring it so. Whether by revolutions, socialist and communist movements, unions, demonstrations or votes, those governed have redistributed capitalist wealth by declaring it so.

We now have a new generation of capitalists who have declared it so, including multinational corporations and their financiers. Unlike others before, this generation of capitalists has managed a “Landless Manifest Destiny”. MNCs are displacing jobs and wealth of a generation of Americans by declaring their right to do so. Instead of declaring Manifest Destiny to march Emerging countries across America, MNCs are instead drawing the fruits of the American continent to emerging and developing markets in exchange for tribute from those countries.

MNCs are ignoring the social contract that has been observed for centuries between a nation’s capitalists and workers. In fact, they have in many cases, simply exchanged their original socially contracted workers in favor of offshore social contracts. By so doing, they are now calculatingly taking excessive value that will ultimately cause a social disruption, as has all other excessive imbalances in history.

A full three quarters of all Americans have been losing economic ground during the past two score years. If America’s economic crisis deepens the divide much further, history will repeat as the symbiosis between MNCs and working Americans ruptures. Unfortunately for Middle America, in wars, those with superior technologies usually win. Just as the first Native Americans fought and lost against European warring technologies, this generation of Americans is losing its voice by raising mere bows and arrows against the far superior legal and financial weapons of MNCs. It seems that as MNCs continue to exacerbate America’s failing social contract, they are betting on it.

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Is Bankruptcy in America’s Future?

Pat Robertson, as controversial a televangelist as he has been, ran for president of the United States in 1988 with a platform of a constitutional amendment for a balanced budget. America’s debt in 1988 totaled a “mere” 2.6 trillion dollars. One of his controversial presidential platforms was a call for the Year of Jubilee, a biblically historical reference that every 50 years, all debt was cancelled, all land went back to its original owner and all slaves were set free.  Mr. Robertson stated that the Year of Jubilee would be a less harsh way to deal with depressions of capitalism for the United States.

His solution for the path he predicted would ultimately lead America to the precipice that we now face was a Year of Jubilee for America. The idea was such an anathema to our firm societal view of debt repayment that it branded him a marginal candidate and cost him the control of his media empire.

Eleven years ago, after 24 million petition signatures were gathered worldwide for debt relief, the World Bank and IMF participated in Jubilee 2000 and forgave debt of approximately $90 billion to 22 of the world’s poorest nations, freeing them from a form of indentured servitude. This foretelling of restructuring of world debt gave credence to Pat’s solution and vindicated his thoughts, but could not begin to support the idea that America might join the ranks of defaulting nations.

23 years after Mr. Robertson’s suggestion, America has a much different social psyche. While a few percent of our elite have prospered during the past 23 years, many of Americans have struggled. When Wall Street decimated much of the only vestige of the American Dream in which many Middle Americans could participate, home ownership, it changed the bargain between classes.

A great many Americans are now choosing to walk through the social stigma of bankruptcy and foreclosure and to self direct their own personal Year of Jubilee. If this social movement takes hold, a new “Pat Robertson” claiming America’s biblical right for a Year of Jubilee 2016 could gain the White House, defeating the financial defenses of our political structure, and catapulting America into a nation that considers default as a valid option.  It is critical for our nation, that our political leadership presents a fiscally responsible budget, supports an economy that will provide jobs to all Americans, and restores confidence in the democratic and capitalistic contract that has been the basis of wealth distribution for our society.


Filed under American Governance, social trajectory, World Sustainability