Tuesday, July 26, 2011

A Brilliant, Though Somewhat Starry-Eyed Analysis

Edward Steinfeld, a professor of political economy at MIT (I wish my school had offered political economy!), wrote a fascinating article entitled China's Other Revolution.  In a nutshell he argues by comparison that the experiences of authoritarian breakdown in Taiwan and South Korea make it "not just possible but likely" that the recent crackdowns on free speech in China are a sign of the "last vestiges of authoritarian rule." 


3 words: I totally disagree

Don't get me wrong, Steinfeld's analysis of the rapidly evolving nature of the Chinese government and social norms/expectations are entirely correct, especially his breakdown of the inclusion of foreign educated experts into high levels of the Communist Party.  His conclusions that the government of today is not the same as the government of the 1950's or even the 1980's are obvious to even the most casual viewer.  He is also correct that we should not base public policy on the assumption that the CCP is a static entity.  It is not.  It has never been, and we should do our best to anticipate current trends and potential future trends. 

Steinfeld's analysis of the history, the modernization, and the flexibility of the CCP are excellent and an invigorating read...but his conclusion that authoritarianism has already begun to end, and that we are "likely" seeing the last throes of a dying authoritarian system, is a baseless stretch.  In one breath, he admits that it is impossible to "fully appreciate the range of possible outcomes", and in the next breath predicts a drastic change in a particular direction that is likely to happen soon. 

With a nod to the fact that is impossible to understand the true range of possible outcomes, I believe fundamental democratic change is not on the brink of happening in China.  With all due respect to the Professor, he ignores the principal differences between the experiences of Taiwan and S. Korea and the experience of China.  There are many key differences, but I will touch on a primary few.

1. At the time of their democratization, Taiwan and S. Korea were both fully dependent upon American protection to stay independent from the Chinese.  The implications here are numerous, including: America was in a particularly strong position to encourage a particular type of change (which it did!).  China is obviously in a much stronger position to resist American arm-twisting than either of these states ever were.  The reason the dictatorships in TW and SK did not fight the democratization process was because it would have meant the end of their crucial support from Washington, not because the elites had changed their opinions about the desirability of absolute power.  People in power want to stay that way, and the elites in SK and TW could only stay in power if they bowed to the pressure from Washington and permitted some level of democratization.  It goes without saying that the Chinese will not be subjected to that decision (since the U.S-China relationship is one of mutual and not asymmetric dependence).  The CCP (like all who are in power) wants to stay in power and has no compelling reason to surrender it.

2.  The concept of democracy was viewed much differently by the masses in SK and TW during the period of democratization than democracy is viewed by the masses in China today.  Sure, there are Chinese citizens who like the idea of democracy and would like to see the CCP take steps to democratize...but there are many, many more (especially among the educated elite whom Steinfeld relies upon for his "likely" changes) who have seen the limitations of democracies in the U.S. and Europe and believe that democracy is a fundamentally flawed system.  I have personally spoken to such people, many of whom believe that democracies are essentially run by the easily deceived masses (who are short-sighted and reactionary).  Many others believe that the rhetoric of democracy and human rights from the U.S. is merely cover for a secret agenda of regime change in China.  They point to rights being violated in the U.S. and wars being fought without popular support to bolster these positions.  The CCP propaganda machine works tirelessly at undermining democracy and that effort has been successful to a large degree.  I have no evidence for this, but I would guess that the people in SK and TW had not been subjected a lifetime of propaganda undermining the concept of democracy.  This argues strongly that there is and will be no groundswell of support for democracy in China in the short-term.

3. Steinfeld makes the assumption that almost all Western intellectuals make, i.e. there is no future for a modern thriving economy except a liberal, democratic political system.  I totally disagree with this and point him to my article on Singapore in which I argue that a modern economy can be run hand in hand with an authoritarian political system.  While I dismiss the possibility that China can be run in the same neat, clean way that Singapore can (based primarily on the scope of China and the differences in property law), Singapore's example is a clear and vibrant demonstration that liberal democracy is not the only path forward for a modern economy. 

In the end, I liked the Steinfeld article, but I believe it to be wrong. 

Tuesday, February 15, 2011

The Siren Song of 'People Power'

Reading an article today about the newest middle east protests, Bahrain this time, I was drawn into the author's obvious emotional bias in favor of the protesters.  When I read about the Bahraini King going on TV to apologize for the deaths at the hands of his security forces, I felt that rush of blood to my head, that welling of liquid in my tear ducts, that strength of conviction that comes only to the ideologue whose cause is invoked.
http://www.washingtonpost.com/wp-dyn/content/article/2011/02/15/AR2011021500617.html?hpid=topnews

Here's the problem:  My emotional response to these kinds of demands is a product of socialization and indoctrination.  I know, I know, for somebody who calls himself a lover of liberty, I am wandering way off the reservation right now.  I can't help it.  The situation demands some self-reflection.

You see, the protesters aren't just demanding less restrictions on internet, TV, and who can run for parliament.  Those I agree with, at least to the extent that the civil society in Bahrain is able to cope with those kinds of freedoms without collapsing into an anarchic madhouse.  But they are also demanding social justice.  More precisely, "I demand that every Bahraini have a job and a house," said one protester. 

The best interests of society are served by economic freedom because the rules of functioning capitalism encourage everyone to earn a profit from their contributions to society.  Capitalism succeeds by providing the correct incentives to maximize each individual's contribution to society.  However, since human beings are evolutionarily programmed to seek individual gain and most individuals are too stupid, too uneducated, or simply unwilling to perform the serious introspection required to understand the benefits of property rights and minimalist government, the masses often do not seek the system that is beneficial in the aggregate and conducive to progress (capitalism), instead seeking a simple payoff. 


Having no unifying ideology other than anger, anti-government mobs are rarely vehicles for sustainable economic reforms.  Instead, because they are protesting poverty and have no positive goal other than expressing anger, anti-government mobs have a strong tendency to turn into socialist or religious zealots.  Hence the government response in Bahrain, offering $2700 dollars to every Bahrain family.  This smacks of the political payoffs that keep psuedo-socialist governments in power (and debt) across the Western world.  In case you are wondering, the U.S. is a primary offender...Bush's Medicare Part D (a buy-off for senior votes) comes to mind. 

If the results of popular uprisings across the Mid-East are new or 'reformed' governments that buy loyalty through socialist-style payoffs, then the popular uprisings will not result in a better world.  Just because the masses want something doesn't mean that they should get it.  What they need is an independent judiciary, a rule of law, a respect for property rights, and the easing of media restrictions.  What they want is an immediate end to poverty.  In other words they want a payoff. 

But their leaders have been confiscating wealth, manipulating the rules, and giving opportunity only to cronies...what's wrong with the people demanding they get some money back?  There's nothing wrong with it per se.  I do believe that the criminals who are running these dictatorships should be forced to make whole everyone whom they have wronged (which is likely every citizen without government connections).  But what happens after the government makes this payoff?  The protesters go home, and guess who stays in charge, rewarded for their years of corruption and incompetence?  That's right, the dictators.  If not these, then whoever runs to the front of the protests and screams the loudest, thereby earning himself the right to be the next corrupt regime who will then pay the citizens to hold their tongue.  The cycle continues. The problems are not solved.

Only systemic pro-market reforms can solve the underlying problems.  These mobs are not demanding those kinds of reforms.  In fact, as we've seen in China, India, Brazil, and many other formerly communist governments, incremental pro-market reforms are often most successfully implemented by reforming the existing government without popular uprising.  So why I am getting emotional when reading about the small successes of these protesters?

Simple, I've been indoctrinated into a worldview that always roots for the 'little guy', even when the little guy shuts down the economy, gets people killed, and at best installs a government of equal incompetence, at worst leaving the same people in charge with a slightly lighter checkbook.  The message here:  Check your emotions at the door, and hope against hope that whoever hijacks the next protest is one of the few people in the world who understands the importance of market forces in the march of history. Without the uplifting market growth enabled by economic freedoms, the seemingly noble goals of these protesters are nothing but the tempting song of tens of thousands of sirens. 

Sunday, February 13, 2011

Egypt: Conspiracy Alert!

A Chinese friend asked me what I thought about Egypt, and I told him that I was worried by the potential instability and simultaneously hopeful for a better government.  Clearly unsatisfied with my answer, he asked me what was the cause?  I said I don't know, bad economy, no jobs, everyone was unhappy.

That's when he asked me what was really on his mind...Was this started by the CIA?

That took me by surprise.  Not because I hadn't considered it, I had, and quickly dismissed the thought.  After all, the CIA was seemingly caught flat footed by the fast pace of the events on the ground and Bambi's reaction to the crisis always seemed like he was one step behind.  Also, Mubarak was on U.S. payroll and conciliatory toward Israel, so why topple him.  After the question, I paused to reconsider, and told him no.  I have spent some more time considering, and now I would like to change my answer to maybe, but hopefully not.

We all know that Bush was a vocal proponent of a so-called freedom agenda.  The post-hoc justification for the misadventure in Iraq was some sort of convoluted theory about how we would demonstrate that Arab culture was compatible with democracy and inspire other governments in the region to follow suit.  Then Hezoballah won elections in Lebanon and Hamas in the West Bank.  The freedom agenda was quietly shelved except for a few speeches by Condi Rice which seemed to indicate that the State Department still believed the idea had legs. 

Is it possible that the Obama administration, which did little to publicly support the protests in Iran last year, and has said nothing to indicate that it was continuing the once-dead Bush policy has actually been pushing a covert freedom agenda since his administration took over?  The question is intriguing if you consider the number of uprisings and protests during Bambi's administration.  There was Kyrgyzstan, Iran, Tunisia, Egypt, and now numerous copycats throughout the Muslim world.  Even Xinjiang China was hit by protests during the Obama administration.  It is far-fetched to believe that this apparent surge in Muslim unrest is quietly being instigated by intelligence forces under Obama's control?

I have no evidence (beyond the apparent frequency of these events) indicating that Bambi is playing a role in this.  Still it is an intriguing possibility, and something worth researching.  I will work more on it when I have time.

I certainly hope China does not come to the conclusion that Obama is behind these uprisings.  That would introduce a very dangerous and volatile issue into the already tense relationship between the two countries.  It is my hope that Obama is considering the complications that would arise if he is indeed playing instigator in foreign nations that are ostensibly U.S. allies, or at least mildly friendly to the U.S.  This could make many important geopolitical actors nervous, and could potentially polarize the globe as countries like Saudi Arabia, China, Iran, numerous central Asian dictators, North African dictators and others could come to the conclusion that they have a common enemy...The U.S.  That block has the potential to unite and sink the world into another Cold War. 

Scary stuff...

Sunday, December 26, 2010

An Ebag Original: The Critical Mass Theory

I read a fascinating debate on http://www.psychologytoday.com/

Nibel Barbar argued that atheism will replace religion because, in developed countries, the psychological functions of religion can be provided in alternative venues.  Sports are his primary example, and he argues that religion and sport ceremonies are similar in that sports provide a humanistic/polytheist religion where 'spectators worship other human beings, their achievements, and the groups to which they belong.'  Socializing with people with a built-in source of agreement, chanting and singing, ritualistic colors and a transformative experience where people escape their daily lives with something greater than themselves.  Sports, like religion, is a distraction from everything else that is happening, a simple satisfying socialization shortcut.

Barbar thinks there is no longer a need for religion because "with better science, and with government safety nets, and smaller families, there is less fear and uncertainty in people's daily lives and hence less of a market for religion."  Thus, there is less demand for religion and combined with an explosion of competition from psychotherapuetic drugs, electronic entertainment, and sports which have combined to result in an explosion of atheism in developed countries.

Michael Austin counters that religion isn't practiced just because of fear arising from short life spans and tremendous ignorance about the workings of the universe.   Religion is practiced because people believe it is true.  This sets it apart from a marketplace analysis of cause and demand, giving people a reason to exist, principles to guide their life.  Austin further claims that Atheism can never be a belief system, because it is merely a rejection of something and not a positive value system like religion. 

Austin is correct that in and of itself, atheism is not a belief system.  His conclusion: because Atheism isn't a source of morality, religion will always be needed.  This is pure fallacy.  Morality can be found in serving your own real, long-term interests.  Honesty, hard work, and dedication to family...the true foundations of morality, can all be arrived at through reason.  Honesty earns a reputation for honesty, which opens up opportunities in the business and personal spheres.  Businesses want to partner with you, customers return for your services, and friends trust you with secrets and truth.  Hard work is rewarded both financially and psychologically with promotion, wealth, and contentment.  Dedication to family and friends is reciprocated, developing a reliable network of individuals who can be counted on in times of need.  These foundations of a good life admit that death means the end of us, that life is worth living as long and as well as possible, and that morality leads to happiness and mental peace.  Morality is it's own goal.

What about Austin's contention that genuine belief is a strong reason to expect the persistence of religion?  Market forces don't have as strong of an impact on something that a person believes to be nonfungible. This is certainly important and true.  Perhaps this is why religion persists despite the growing lack of need for the psychological effects of religion. 

In my opinion even if religion is genuinely believed, this characteristic is not a strong indication that future generations, or even future iterations of the same individuals will hold the same genuine beliefs.  The moral foundation formed by religion can be logically and reliably created without myth and archaic power structures.  Eventually the cost efficiency, reasonability, and personalization available to people who simply find their own moral compass will attract a critical mass of people away from the seductive social pressures and networking that religion relies upon to persist.  This is what I call the critical mass theory.

The Critical Theory suggests that after a majority of people no longer are beholden to the prevailing myth, the social pressures to accept the prevailing religion will disappear.  It suggests that one of the reasons that religion persists is that most people are socially honor-bound to believe or profess to believe in religion.  In other words, because the vast majority of people in America profess to find their moral compass in Christianity, all people feel a strong social pressure to acknowledge the moral compass and the psychological value of believing in the prevailing myth.  This is a subject I will discuss in more detail in the future.

Tuesday, December 21, 2010

Censorship and Narrative: The Chinese Strategy

Every nation has an historical narrative that they use to educate a domestic audience and persuade an international audience.  In contrast to history, an historical narrative includes interpretations and generalizations of the national past and teaches these generalizations as part of the facts of history.  In broad terms, the United States narrative goes like this: 

The United States is the most powerful country in the world, but unlike superpowers of the past, the U.S. is a benign superpower seeking only to spread the morally pure agenda of freedom, democracy, and opportunity.  This plays well to a domestic and foreign audience.  Some aspects of U.S. policy are difficult to fit into this narrative, such as occupying Iraq but not the equally (if not more) strategically dangerous Iran.  Bush tried to argue that he would set an example of functioning democracy in the region, then spread the goodness to everybody else.  Unfortunately for the U.S narrative this argument does not pass the laugh test, and not just because the given reason for attacking Iraq was WMD, but also because most of the U.S.'s closest allies in the region (as further proven by wikileaks), are not democracies and are not interested in welcoming democracy into their closed dictatorial fiefdoms.  If the U.S. goal was really to spread democracy, leaning on dependent allies such as Egypt and Jordan to liberalize their own systems is probably more likely to succeed without major upheaval, and is certainly less costly than the new 'clear, hold, build' strategy that we all hope (but do not believe) is working in Af-Pak and Iraq.  A sophisticated observer will note that the U.S. (like every nation on earth) cynically uses its narrative to leverage realpolitik objectives.

Despite its flaws, the U.S. narrative is nonetheless appealing.  Opportunity is available in the U.S. for those who can get here, and there are many real life stories that anecdotal support the acceptance and success of poor immigrants who are willing to work hard and risk everything to have a go in America.

To an outsider, the Chinese narrative is much less appealing.  The basic tenants are not particularly repulsive, rather it is what those arguments are used to justify that renders the Chinese narrative somewhat unpalatable to foreigners.  This might be because of a less well-run international narrative, or it might be because of a narrative that is tailored to a domestic rather than an international audience.  Let's take a look.

The Chinese patriotic education campaign started in 1992 and has been wildly successful in reversing the  pro-western worldview that was quite prevalent in China during the late 1980's.  Successful patriotic education in the modern world has three essential components and one optional component. 
  1. Denial of Access to Information:  If something is only sporadically available in foreign media, only tangentially related to China, or simply not a large story, total denial of access to information can succeed behind the Great Firewall and the State Run Media.  As long as the strategy is implemented consistently and competently, censorship can work.  (U.S. take note, your response to wikileaks-Inconsistent and Incompetent). 
  2. Timely and Detailed Particularized Responses to Important Events:  These responses must expand and utilize the overarching narrative of No.3 below.  These responses can also be coupled with an aggressive implementation of censorship to keep out particularly damaging details.  The key to this step is using every potentially damaging incident to feed your narrative.
  3. Careful Construction of a Domestically Attractive Narrative:  The overarching CCP narrative is a tale of persistent Western and particularly Japanese victimization of an ancient culture, the tale of the CCP bringing Chinese people back to power over foreign aggressors, the tale of a rise from ashes into an economic powerhouse and a respected leader of the world, and perhaps most importantly the threat of collapse upon loss of the CCP.  This narrative has two particularly attractive aspects to a domestic audience:
    1. It is the tale of the inherent superiority of an ancient continuous culture unmatched in the world.  Everybody loves to culturally identify with superiority because it's an easy way to replace personal accomplishment.  This continuity is a myth of course, because the Chinese culture is a history of division, rising and falling dynasties, conquering, expansion, contraction, and repeated dominance by foreigners.  Any continuity that persisted was destroyed by Mao during the Cultural Revolution.
    2. Everything China has gained in the last 30 years; wealth, prestige, and self-confidence is totally dependent upon the party in power.  No Chinese person wants to sacrifice the progress they've made.  The CCP has every incentive to continue the progress, and the people know it.
  4. Construction of an International Narrative:  This is the optional component, the one that is completely underdeveloped for China.  The U.S. international narrative is above, and it is well-developed and carefully considered.  The Chinese international narrative, to the extent they have one, is Deng XiaoPing's concept of organization of the developing world and general opposition to U.S. and Soviet hegemony hinted at here: “China is not a superpower, nor will she ever seek to be one. If one day China should change her color and turn into a superpower, if she too should play the tyrant in the world, and everywhere subject others to her bullying, aggression and exploitation, the people of the world should identify her as social-imperialism, expose it, oppose it and work together with the Chinese people to overthrow it.”  Thus China positions itself as the anti-imperialist, the champion of the underdeveloped, a peaceful player in the continuing integration and advancement of the developing world.  This narrative was beginning to enjoy some success before the recent expansion of core interests to cover the entire South China Sea, continuing support for a parasitic N.Korea, and bullying of Japan over the boat collision incident.  This narrative now needs to be revisited.
Let's look at an interesting case study for the Chinese narrative, the Liu XiaoBo incident.  The NYT has a very good analysis of the approach China has taken to the Nobel Prize awarded to Liu. 
http://www.nytimes.com/2010/12/11/world/asia/11china.html?_r=2
You'll find that the Chinese government quickly developed a containment strategy for the damage caused by the Nobel Prize awarded to a jailed dissident.  They follow the exact pattern I described above.  First, they scrubbed the Chinese Internet for all references of the Award Ceremony, or even the Nobel itself.  This decreases public awareness of the Nobel generally and Liu in particular.  Knowing that this is only a partial strategy, the the state media denounced the award as a "Western plot to hold back a rising China and branding the award’s supporters as “clowns.” Global Times, a populist tabloid affiliated with the party-owned People’s Daily, called the event a “political farce” and Oslo a “cult center.”(NYT).

Domestically, the narrative hits all the right notes.  It's got suspicion of foreign imperialism, an insult to China's dignity, glorifying a known criminal tried and convicted under Chinese law, and selective quotation of Liu to make him fit the role of imperialist tool who has committed treason against his own people.  Struggling, succeeding China is victimized again.

Internationally, the narrative plays very poorly.  China strong-armed 19 countries into skipping the Nobel ceremony, appeared bellicose and intolerant, highlighted their opposition to democratic reformers, and generally appeared to violate their own rules about imperialist tendencies.  This failure to appeal to an international audience does not condemn the Chinese narrative to failure.  The primary purpose of a narrative is to win the domestic audience, and at this the narrative has been wildly successful.  The challenge for China in the future is to produce a narrative that appeals to both domestic and international audiences, otherwise they will not develop the sort of soft power enjoyed by the U.S. and to some extent the E.U.  They will not have waves of talented immigrants, they will not get the benefit of the doubt in their global intentions (a situation with great relevance in the South China Sea), and they will not be recognized as a true great world  power...something they want more than anything. 

It will be interesting to see how the Chinese wiggle out the nationalistic trap they have set for themselves.  They must have a reason for the continued dominance of the CCP, but they cannot stoke nationalism to dangerous and nativist levels.  This balancing act will grow more difficult with each new international incident.  I wish them luck.  It will be interesting to watch their narrative evolve as their interests become more and more clearly aligned with the nations whose social and economic imperialism they once denounced.  Without a change, the Chinese will not be able to leverage any concessions, benefits of the doubt, or soft power out of its historical narrative.

Saturday, December 11, 2010

The Euro's True Value: Post-Westphalianism

The Westphalian system has three main components:
  1. The principle of the sovereignty of states and the fundamental right of political self determination
  2. The principle of (legal) equality between states
  3. The principle of non-intervention of one state in the internal affairs of another state
As a Post Nationalist, I am a firm believer that all three of these tenants should be undermined on a global scale.  Sure, national sovereignty is the closest thing we have a global religion as every government from China to Russia to the U.S. all jealously defend the ideology of national independence.  But national sovereignty is conveniently ignored whenever one those nations finds a way to dispute the 'sovereignty' of a rival.  For instance, failed states like Afghanistan are not really given national sovereignty, neither are those suspected of genocide like Serbia, nor states suspected of violating the NPT, like Iraq.  (This includes Iran, but not Israel.)  Or Taiwan, where both China and Taiwan give lip service to 'One China', while both sides retain their mutually exclusive claims to control both nations.  State sovereignty is not always used for good. I don't think I need to go down a list of examples that would include the North Korea, Sudan, Zimbabwe, and just about any country needing to justify a self-serving narrative. 

First, let me say that nationalism has not always been detrimental to human society and development.  Nationalism was first used to overcome tribalism and feudalism, a dark period when each cluster of people were loyal to their own bosses and humanity was far more divided and war-prone than modern times.  At its outset, nationalism was a tool to overcome mutual isolation and unawareness.  Nationalism actually helped unite larger groups of people into economic free trade zones and broader definitions of the in-group, while shrinking the ominous out-group.  Though nationalism is the primary reason for every modern war and trade dispute, it was actually an improvement on the previous system. 

The particular brand of nationalism that is widely credited to the Peace of Westphalia faces many challenges. While failed states and non-state actors like Al-Queda are certainly a challenge the Westphalian System, those problems have been attacked by attempts to reinforce the system of state sovereignty.  The U.S. is trying to set up a nation in Afghanistan (failing...but trying), the U.S. is giving billions in aid and military equipment to Pakistan (a potential failed state), Kyrgyzstan (out of the news-but fail), Yemen (an undeclared failed state), and many others.  The U.S. response to the threat posed by failed states on the Westphalian order has been to try to build states that can uphold the model.  The jury is still out on this technique...my guess...fail!  At any rate, the cost of maintaining the Westphalian system under modern geopolitical conditions is just too high.

Despite the importance of existential threats to the current system, the most important development in post-nationalism is without a doubt the EU, specifically the Euro.  The Euro is at its core an indirect and roundabout assault on the concept of Westphalian Nationalism.  Though the Euro founders claimed that they intended for nations to keep their sovereignty, anyone can see that a monetary union will require a fiscal union to succeed in the long term.  Erratic fiscal policies under a single monetary policy will inevitably lead to crisis just like the one we are witnessing now.  In fact, low interest rates needed by economies like Germany provide skewed incentives in countries like Ireland whose rapid growth demanded higher interest rates.  In Spain for example, national economist Angel Ubide explained that the government would've needed to run 5-6% surpluses just to offset the negative real interest rates available under the Euro.  This is functionally impossible in a democracy, where people want to spend their money or have it returned to them immediately.  It is left for us to decide whether the founders of the EU actually intended for crisis to occur in order to further political integration, or whether they truly believed that the basic principles of economics could be ignored.  

Putting that debate aside, the core of the matter is that the Euro is the future of money.  As my new favorite person Tommaso Padoa-Schioppa (head of Notre Europe, former member of ECB's executive board) explains, "the dynamics of history consist precisely of the search – largely unguided, often painful but inexorable – for an optimal distribution of power along the scale of ever-wider human aggregations, which are tied by common interests more than by tribal identity."
http://www.ft.com/cms/s/0/7596170a-5ec0-11df-af86-00144feab49a.html#axzz17rXMiXmz

As it is obvious to everyone on both ends and even some in the middle of the political spectrum that global corporations, global terror networks, global environmental problems, and global human rights all require an ever-widening scale of government; the Euro is a great tool in advancing beyond the seductive tribalism of nationalism.  Since Euro members have so much invested in the success of the Euro, it is nearly impossible to resist the inexorable march toward a more centralized (and less democratic-yay!) system that gives economists a veto over the spending initiatives, labor laws, and other purview of national legislatures.  This is after all, the only way to sustain a supranational monetary union. 

So, we've learned that Euro was designed to fail, and that the only way forward while saving face is to build a supranational fiscal union.  The only way to give coherence to the persistence of national governments would be to allow them to continue making fiscal policy, subject to review by the center.  This is my ideal!  It destroys the basic tenant of state sovereignty by taking away the ability to control fiscal policy. It undermines the idea of equality between states because no one will truly consider a state without control over either fiscal or monetary (or ostensibly foreign) policy, equal to a state with sovereign control over these aspects of policy.  By giving a review of legislation to a central authority, the principle of non-intervention is completely obliterated, and the era of nation states begins its decline!

Once the death grip of nationalistic ideology has been weakened, regional monetary unions could spring up across the globe.  Asia is prime real-estate, though it would have to endure the long foundation laying process just as Europe did.  Whether it is an alliance of Japan, South Korea, and India to counter China's growing influence, or an even larger union including China, the endgame is the same...the eventual merging of regional monetary unions under a single global system that does away with currency manipulation as trade protectionism, vetoes unsustainable spending by national legislatures and executives eager to buy votes, equalizes labor and environmental laws to level the competitive playing field, and imposes transparent and universal rules on multistate actors like financial institutions who seek to play states against each other and demand bailout money by holding discreet economies hostage. 

The Post-nationalistic world order also does away with the ability of states to resort to hyper-nationalistic (and dangerous) propaganda when their local power is threatened by the international community.  This takes away one of the most important tools of control of any authoritarian regime.  The China Nobel situation is an example.  I will post on that next.

Friday, December 3, 2010

Triangulation II: Bambi pulls a Slick Willy

So far, I'm loving post-midterm Bambi (That's what I call Obama because he's just so darn cute).  We've got spending freezes for federal employees, we've got (reportedly) a deal to extend all the Bush tax cuts, we've got a serious report from serious people on the deficit commission, and best of all, we've got no more talk of 'wasting a crisis'. 

Apologies in advance to anyone unfamiliar with Rahm Emanuel's nickname.  Sing this with me to the tune of 'We Will We Will Rock You!' :
We Hate Rahmbo Bye Bye! 

Ok so I'm not a song writer, I'll give you that one.  Back to Bambi's metamorphosis (and yes the caterpillar might yet become a Clinton-esque butterfly). 

Here's one clueless explanation for the 'change'.  http://thehill.com/opinion/columnists/ben-goddard/131503-maybe-no-encore-in-2012.  This proclaims that Bambi has given up and has decided to be a one term president.  I won't even dignify that with a response.  After all, politicians seek power-why else subject yourself to the debasement of pandering for votes, begging for money, and lying for a living?  --Couldn't help a little response.

A much more likely explanation:  Bambi learned a lesson from everybody's favorite family man, Bill Clinton.  Dick "The Head" Morris (triangulation's main proponent in the Clinton White House) argued that the Tri was not possible under modern conditions, wailing with his trademark hyperbole that partisanship had gone too far...blah.blah
http://www.nypost.com/p/news/opinion/opedcolumnists/this_time_triangulation_not_an_option_Ll4ow8MJ3p5PH4UJiLeAYM 
Nothing could make me happier than to prove The Head wrong.

First let's dispense with the myth that Bambi wants to be like FDR and Reagan but not Clinton, because the prior 2 were 'consequential' presidents.  In that yawn inducing stem winder called The Audacity of Hope, Black Jesus said "It was Bill Clinton that recognized the categories of conservative and liberal played to Republican advantage and were inadequate to address our problems. Clinton's third way... tapped into the pragmatic, non ideological attitude of Americans."

Of course we know that before you can become a 'New Democrat' you absolutely must try every tired, pork-bellied, government expansion project that the most detached liberal ideologue can dream up just before your midterm slapdown.  After your midterm slapdown, then comes the real governing.  Under Clinton, Hillarycare failed, and we all know that Obamacare passed, but the strategy was the same. 

The next step, it appears, is also the same.  Not only does a fed pay freeze help immunize Obama from the political liability of being in lockstep with federal employee unions, it also gives him a strong (measured by the reception of the idiots who vote) argument against further concessions in federal employee numbers and wages.  I already made them sacrifice! Still, Clinton needed welfare reform to really prove that he had moderated, all his school uniforms and V-chip nickle and dime stuff didn't sell the moderate label, it was a miracle most theorists once thought impossible...welfare reform.

There are a few things that might qualify Obama as a moderate.  Keep in mind that he needs to be seen fighting the government employee mafias that keep a knife to the throat of America. 

1.  Major, systemic, wholesale, education reform.  This would mean something like, mandating performance pay for teachers by making all federal assistance dependent upon it.  As a home run, he could set new rules for teacher's unions, perhaps making them optional rather than required. 

2.  Broader Government union reform.  Ban government unions from spending money on elections that pick politicians that have the power to use guns to give the unions more money.  This is my most awesome idea because it helps do away with the incestuous relationship between democratic government and its employees.  (Taxdollars that are mandated to go toward the election of politicians that will send more taxdollars to go toward the election of the same politicians.) This idea has numerous problems including states' rights issues, free speech issues, and the simple fact that Obama might lose his own primary if he did this.

3.  Serious steps to reduce the deficit.  These could include, reduction of DOD budget through (tacit) admission of defeat in AF-Pack and Iraq, substantial cuts in the federal workforce, elimination of foreign aid to criminal dictators, common sense entitlement reforms like: eliminating the employer health-care exemption, raising the social security age, reducing benefits for the wealthy, making healthcare available in a national market etc..  HOME RUN: Constitutional Amendment requiring a balanced budget.  I know, dream on.

4.  Complete Tax overhaul.  David Brooks touched on this http://www.nytimes.com/2010/12/03/opinion/03brooks.html
The Heritage Foundation believes this would reduce the deficit 65b a year and create over 2million new jobs.  It would lower tax rates for almost everyone while raising revenue, have a direct positive impact on everyday people's lives, empower small businesses and entrepreneurs, and best of all it could be sold to both parties.  Not only is this the most possible on this list, it is quite possibly the best.  It would need to follow the mold of the 1986 resimplification and do away with the thousands and tens of thousands of loopholes, credits, confusions and complications that make everyone sick to their stomach in early April.  This doesn't do away with Obama's union problem, but a few more symbolic moves--such as a hiring freeze-- and he could earn a label as a moderate in one fell swoop.  Lower corporate taxes while he's at it, and we've got the best president since...well...since...I don't even know. 

In short, Bambi is a politician and as a teacher once told me, all politicians can be explained with a single acronym, SMSR, Single Minded Seekers of Re-election.  The lefty stuff is going nowhere, so bring on the Tri. (that's a play on Bi--for those of you who don't know what that means I suggest you make younger friends).  So that's it Bambi, just choose from 1-4 above and consider me your new biggest fan.  Easy huh?  I'm a pushover.  (Again, younger friends)