Asia Times Online - May 10, 2008 Nineteen years ago, the fall of the Berlin Wall effectively eliminated the Soviet Union as the world's other superpower. Yes, the USSR as a political entity stumbled on for another two years, but it was clearly an ex-superpower from the moment it lost control over its satellites in Eastern Europe.

Less than a month ago, the United States similarly lost its claim to superpower status when a barrel of crude oil roared past US$110 on the international market, gasoline prices crossed the $3.50 threshold at American pumps, and diesel fuel topped $4. As was true of the USSR following the dismantling of the Berlin Wall, the US will no doubt continue to stumble on like the superpower it once was; but as the nation's economy continues to be eviscerated to pay for its daily oil fix, it, too, will be seen by increasing numbers of savvy observers as an ex-superpower-in-the-making.

The US president George Bush has attracted a lot of flak here in India for his statement the other day that India's middle class is responsible for rising food prices. See Bush now blames Indian middle class for rising food prices.

There are many Bushisms that are outrageous and this one too at first sight seems to be the same. But except for the fact that only India and only middle class has been targetted and that only food prices are being shown concern about I agree with the underlying thrust. Many of my posts in my blog (http://natant.blogspot.com) have talked about the mindless and excessive consumerism but I recognise the fact that it is a global phenonmenon.

Darren Schuettler | Bangkok | May 2

Reuters - A proposed "OPEC-style" rice cartel in Southeast Asia will go nowhere due to the inability of governments to cooperate with each other and control output from their farmers, analysts and traders said on Friday.

Thai Prime Minister Samak Sundaravej, a TV chef whose main contact with rice is cooking it, has revived the long-dormant idea of a price-setting body involving producers Thailand, Vietnam, Myanmar, Laos and Cambodia.

The proposal, which threatens to add to global food supply fears amid record high rice prices, failed to gain traction seven years ago when it was first floated by Bangkok -- and most see little chance it will fare better this time around.

"I don't think it would work. All they can do is agree on a price, but they can't control the supply like oil," said Graham Catterwell, an economic analyst with 30 years of experience in Thailand and the region. "It's going nowhere."

more at the link

Chan Akya | May 2

Asia Times - As the world comes to grips with declining United States power both in political and economic terms, it almost seems surreal that global media appear so keen to paper over the cracks. With even the corrupt and unctuous Gulf dictators rebelling against the US dollar, this is the beginning of the end.

Yes, I know that the Titanic was not registered as a United States ship. The title though refers to the startling comparisons that can be made to the ill-fated vessel after it hit the iceberg in 1912, and the US today after it has hit the twin icebergs of the idiotic George W Bush presidency and the subprime mess in the economy. I am not suggesting that the two were linked, only that an ineffectual government frequently makes a cyclical problem much worse by its own actions.

US Federal Reserve head Ben Bernanke has taken on the role of the second in command whose job it is to scream "full steam ahead", even as it becomes wildly apparent that it is a structural problem in the economy, not a mere cyclical downturn.

more at the link

David Apgar | May 1

The Globalist - Microfinance institutions around the world — the tiny banks that make micro-loans to the developing world’s working poor — face a significant challenge in even the best current global economic scenario.

A political tide threatens them that could reverse much of the progress against poverty they have made over the past decade.

The reason is that the twin crises of world food price inflation and the U.S. sub-prime mortgage meltdown may be joined at the hip. And as a result, the developing world’s working poor could well channel their anger toward some of the new links with global capital markets that seemed so beneficial to them until now.

much more

Kester Kenn Klomegah | Moscow | April 26

IPS - New efforts have been launched to curb human trafficking across Russia and the ex-Soviet republics. The Moscow office of the International Organisation of Migration is implementing a programme 'Prevention of Human Trafficking' jointly financed by the European Commission, the U.S. State Department and the Swiss government, adapting features of counter-trafficking legislation in the European Union to bridge gaps in Russian law.

According to United Nations estimates, 20 million migrants pass through the region every year. "Russia serves as a main transit country from Asia to the European Union, and it (Russia) has a significant amount of internal trafficking from smaller towns and villages to regional city centres, both for labour and sexual exploitation," said Lauren McCarthy of the University of Wisconsin. Many people look to leave poorer countries like Moldova, Tajikistan, Uzbekistan and Kyrgyzstan. The wish to migrate is then exploited by traffickers.

Trafficking for forced labour (other than forced prostitution) is the main form of trafficking in the region, in particular central Asia. Law enforcement responses, however, tend to focus on sex trafficking which often involves young women trafficked to western Europe, the Middle East and Russia.

I've read reports of some knee jerk reactions by food retailers in the USA limiting rice purchases.

Overall the google news goddess indicates that the situation is OK.

Is it time to boil, fry or make rice-pudding, mauberly?

Since I was having Marvin L. Zimmerman, the author of The Ovum Factor, on my radio show (http://www.blogtalkradio.com/liberalpro you can hear the podcast of the interview there), it meant that I was obliged to peruse the novel that was sent to me by his publicist. The Ovum Factor arrived at my home, and before I got a chance to look through it, my wife picked it up first and wouldn’t let go of it for three days. During that time my dinner was late, I had to do the vacuuming (the dogs are shedding), and I had no real conversation with her as her head was behind the novel. When she finished it, she just looked at me and said “Wow”. That meant only one thing… I had to read it.

The political situation in the United States is different at this particular time than in any other time that I have witnessed in my 57 years on this planet. This is the only time in my life that I can ever remember when the right and the left agree more with each other than the so-called “centrists’” of the GOP and the Democratic Party. Those that lean left, like myself, are afraid of losing their civil liberties, afraid of the corporate control of the mainstream media, afraid of the government’s surveillance of our personal activities, afraid of violations of the second amendment when it comes to gun ownership and are thoroughly disgusted with the governments clampdown on our 1st Amendment rights on free speech. When we see protesters tasered and sprayed with tear gas, hit by rubber bullets and clubbed, as in what happened at the G8 meetings in Washington, something is definitely wrong in this republic.

The end of cheap food, and absolute shortages are on the way. There are a number of reasons, which include the following:

1) The early instability caused by global warming, whose first effects are less increased temperatures than unpredictable weather patterns has lead to key areas having lower crops than in the past.

2) Aquifers in large parts of the world are being drained at unsustainably fast rates. This includes most of the American southwest, large parts of China, huge swathes of India and many areas in Africa. In India there are already villages that have had to be abandoned because no matter how deep they drill, there's no water. This is only going to get worse.

3) Desertification and reduced fertility. US farmland fertility is less than half of what it was 50 years ago. Large areas of China are deserts, with dust storms boiling out of them on a regular basis. It is only a matter of time before we have full on dust bowls in many major food producting regions, just as we did in the 20's and 30's.

4) Modern agriculture is actually very dependent on oil, and the demand and supply curves for oil are not looking good. Reduced soil fertility has been made up for by increasing the amount of energy used. That energy, at the very least, is becoming more and more expensive and will continue to do so. That will drive up food prices significantly, or force a return to the use of much more human labor. Probably both.

5) In the short run foolish subsidies for ethanol have driven up the price of food staples as farmers switch to corn to sell for ethanol.

I hardly expect the current administration to do a great deal about this, but I still encourage people to sign the ONE Campaign's petition for Bush. Making it very clear that this is an issue that matters to a lot of people is the only way that politicians will take it seriously. The sooner we start, the better, and the life you save (or the pocketbook you help) will as likely be your own as anyone else's.

So please take a few moments and go sign.

The traditional narrative of the industrial revolution begins in the mid 19th century in Britain. One obsession of various scholars is to prove a cause for why Britain, including appeals to genetics, while others attempt to prove that Britain was merely in the right place at the right time.

However, this ignores the substantial changes in technology, living standards and organization. It also ignores the profound shift in the energy basis of the Eurasian economy that took place in the 1400-1800 period. More over, it conveniently ignores just how long it took industrialization, in the old sense as being driven by the steam engine, to really become the dominant mode of transportation and production.

The industrialization narrative is not without rivals. Two of the most important are the information narrative, which focuses on movable type, and the gunpowder narrative, which focuses on the ability of fire arms to rapidly raise armies capable of defeating previous armies. Both of these narratives have well known exponents. Together they can be thought of as the informationalist viewpoint: that it was crucial technology in service of unified culture that was the driver of European victory.

Both of these narratives suffer, as pure narratives, from crucial defects, and these defects are sufficient to reject either narrative in its pure form.

Asia Times Online Apr 16, 2008
A blow for Asian wealth funds
By Julio Godoy

BERLIN - Germany's decision to introduce controls on investments from sovereign wealth funds (SWFs) in strategic domestic sectors is an indicator of growing protectionism in European and other industrialized countries against the neo-liberal globalization they once masterminded.

The German government announced on April 9 it was introducing controls on investments by SWFs, investment funds managed by oil-rich Arab states and other rapidly developing countries such as China, Singapore and India. A SWF is a state-owned fund that invests capital comprising financial assets such as stocks, bonds, property or other financial instruments.

I’ve been doing much thinking about the different things that are occurring on our planet and in this country. I’m not a former military tactician although I did spend 21 years in the Army. I’m not an economist and I really don’t know the difference between a deficit and spending money you don’t have (which I think may be the same thing), all I know is that what’s going on in the world doesn’t make a whole lot of sense.

Don’t get me wrong, I’m not ignorant. I believe that I read about everything that happens in the world from every source I can access. I rarely listen to the Mainstream Media because anyone that has half a brain realizes that they are owned by the same entities that wish to keep the American people fat, dumb and happy. These comprise the military defense contractors, GE and Westinghouse, as well as the banking interests that wish to keep things exactly as they are until the time is right to pull the rug out from everyone save them so as to buy up everything on Wall Street for pennies on the dollar.

Asia Times Online - April 10, 2008 The financial and economic crisis now upon us is by far the most menacing of the past century - even more so than the Great Depression of the 1930s. It is not just a "subprime" crisis; it is systemic - affecting the entire financial system. It is also global, affecting various countries in various ways but affecting them all. In achieving a certain "globalization", we have been uniquely successful in globalizing collapse, chaos and misery. It is a globalization which, in our short-sighted negligence, we never envisaged.

In the normal course of governance, the people expect corporate profit motives to be balanced by somebody that represents the public commons and scientific concerns, such as the health of an entire species.

That balance has been eliminated by the Bush administration. They have replaced legitimate scientists with corporate propagandists who always insist that all is well and regulations are BAD. Here is one result:

http://www.nytimes.com/2008/03/17/science/earth/17salmon.html

Comic book philosophy, as Americans are beginning to learn, is no substitute for real knowledge, real science, and real wisdom. Oh, and honesty.

This line always comes to mind when I think about the American economy. The designers of this “economy” have wrapped so many layers on top of layers that I don’t think anyone truly understands it. Oh sure we have these “leading economists” and scholars who pontificate on the inner workings of capitalism, but I have come to believe they are no more reliable than the local weatherman. The problem with an economy as complex as ours is that no one can truly predict how one component will truly affect another. They have their theories and their models, but the reality is they don’t have a clue. The sad part about it is they don’t have to. Most average folks don’t understand it and have no desire to learn about it. For them if they go to work, get paid, and can pay their bills the economy is working.

The markets in the US are closed today for the MLK holiday. But that hasn't stopped the international markets from selling off. As of this moment indexes across the globe are moving down, some of them in a less than orderly fashion. From the Times:

The selling began in Sydney, with Australian stocks falling nearly 3 percent for an 11th consecutive decline. Major markets in Asia followed suit, with the benchmark Nikkei 225-stock average in Tokyo falling 3.9 percent, the Hang Seng in Hong Kong falling 5.5 percent and the benchmark mainland Chinese index falling more than 5 percent.

European shares were on track for their biggest decline in more than four and a half years as United States recession fears rattled investors. In afternoon trading, the Dow Jones Euro Stoxx 50 was down 5.7 percent. The CAC 40 index in Paris was down 5 percent, having fallen more than 7 percent at one point. The Dax 30 in Frankfurt was down 6.25 percent, and the FTSE 100 in London was down 3.7 percent.

A UK real estate fund is also causing panic in London today, as Mish reports:

the fund, invested in London office blocks and shopping centres across Britain, no longer had sufficient cash reserves to meet demands from investors wanting to withdraw their money. Its "buffer fund" was down to 1% of its total assets, instead of the usual 10-15%.

Commercial property values, especially in the City of London office market, have dived amid fears of a recession brought on by the global credit crunch.

Wonder what tomorrow will bring?

cross posted from RFK Action Front

For a while now, I've been interested in the role of the those who rationalize empire. While soldiers are often sent in to seize the land -- I'm fascinated by the role of the white collar professionals who follow. It seems to me that after the soldiers arrive, another wave of colonizers soon follow -- the priests (who say it is God's will), the lawyers (who say the soldiers' actions were justified and set up rules to exploit the conquered people), and the economists (who say the exploited people are really better off now anyway). While the soldiers' actions are often the focus on the peace movement -- in many ways, I think the actions of the bureaucrats are often more insidious. The soldiers can kill you, but the bureaucrats are the ones who erase a people's history, colonize one's mind, and perpetuate injustice long after the soldiers have gone.

With that in mind I give you, "What to Expect When You're Free Trading" published on Wednesday in the NY Times. The article purports to be a a defense of free trade. But it's so much creepier than that. From the piece:

"All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices."

That's a debatable premise. If you lose your job to a Chinese manufacturer -- no amount of cheap goods at Walmart is going to offset the fact that YOU DON'T HAVE ANY INCOME.

But the premise does have a certain partial truth -- sometimes outsourcing leads to lower prices (sometimes not). It fails to examine who wins and who loses -- instead focusing on net gains and net losses (see the sleight of hand?) but we can still keep talking.

But simply arguing in favor of so-called free trade is not enough for economist Steven Landsburg. Rather, he's out to vilify those who don't want to starve to death in the interests of his economic theories. His article builds up to the grand conclusion that if you don't want to lose your job to Chinese slave labor then YOU are a bully.

For many decades, schoolyard bullying has been a profitable occupation. All across America, bullies have built up skills so they can take advantage of that opportunity. If we toughen the rules to make bullying unprofitable, must we compensate the bullies?

Bullying and protectionism have a lot in common. They both use force (either directly or through the power of the law) to enrich someone else at your involuntary expense. If you’re forced to pay $20 an hour to an American for goods you could have bought from a Mexican for $5 an hour, you’re being extorted. When a free trade agreement allows you to buy from the Mexican after all, rejoice in your liberation...

The U.S. jobs market is broken. The causes of the breakdown are readily identifiable, and there are simple cures that would go a long way towards fixing them without undermining the general benefits of a free market. The Shared Economic Growth proposal (explained below and further at www.sharedeconomicgrowth.org) would be particularly helpful. As with antitrust enforcement, product safety regulation, and other facilitators of an efficient market, these steps would increase wealth for everyone, but particularly for middle class and working class people, helping our nation to deliver on the promise of the American dream. Further, like those other basic underpinnings of the success of the U.S. economy, they do not require “Big Government” interference, but rather just some simple common sense changes to address basic problems.

Michigan is the state that has been hit the hardest over the last decade by job losses and outsourcing to many wonderful free market economies. You know, like China.

Yet, so many Democrats have been so slow to comprehend how aligning themselves with big corporations, adding corporate advisors who play Democrats on tv and not responding to the economic anxieties Americans are feeling has hurt the party's image with working people and the middle class. In fact, it has provided an opening to populist sounding Republicans that should worry progressives.

I have written in the past about how Democrats could form a broad coalition with economically populist stances, that would speak to most people's daily reality, be true to our party's history and form the basis of an excellent political strategy. I now have seen it up close, as the state that is second to Michigan in terms of losing the kind of manufacturing jobs that used to pay real money and provide good benefits is Ohio (even though my part of Ohio is not one of the hardest hit, I take short road trips, and what you see is devastating).

Yet, too many Democrats--with some obvious exceptions-- have stuck with their watered-down, free-trade-under-all-circumstances, questioning healthcare for kids while giving CEOs of oil companies tax breaks mentality. This provides an opening to populist Republicans, like Mike Huckabee (seriously, even the upper middle class is getting pretty populist these days with hundreds of thousands of dollars in college costs, a mess of a healthcare sysytem, home values crashing, etc.).

And Huckabee, whether by conviction or political calculation, or perhaps both, is busting through the opening Democrats have provided. Want proof? Watch this ad, as he talks about people wanting a president "more like the guy they work alongside than the guy who laid them off" (take that Hair Product Romney!).

Democrats better get smart on these issues and quick. Or they may just find themselves outflanked. And not just politically, but morally, they would deserve it.

(originally posted at The Seminal)

Since World War II the international community has been steadily working to formally liberalize world trade, first through the General Agreement on Tariffs and Trade (GATT) and now through its successor, the World Trade Organization (WTO).

The economic justification for world trade is straightforward and widely accepted: when countries specialize and trade, overall economic wealth increases. From this growth, pro-trade advocates argue, all other ails can be addressed.

But apart from the unrealistic nature of this last statement, one of the chief criticisms levied against the WTO is its lack of discrimination between "good" traders and "bad" traders.

Take for example, China. In 2001 history was made when the WTO admitted China after 15 years of negotiations. The negotiations focused on reducing barriers to imported goods so that both foreign and domestic producers were treated equally in the Chinese economy.

The negotiations did not focus, however, on establishing minimum standards for things like democracy, human rights, and environmental protection. China has been accused of government-sanctioned human rights abuses, exploitative labor laws, suppression of freedom of speech, intense press censorship, and horrific environmental degradation and animal rights neglect. It has also been accused of building and stockpiling biological, chemical, and nuclear weapons, and of selling these and small arms to countries such as Iran, Sudan, and Burma. According to many, China is illegally occupying Taiwan and Tibet.

But China's trade surplus reached nearly $180 billion in 2006, meaning it sold $180 billion more in goods than it bought globally. The US-China deficit reached an all-time high in 2006 of $214 billion, meaning Americans bought $214 billion more in goods from China than it sold to China.

Regardless of how you feel about trade deficits (economists bicker about whether they are bad or good for our economy) these figures tell us that we Americans, as well as the rest of the world, fund China by buying its products. By trading with China we become complicit in its activities.

Will McSheehy | Dubai | Jamuary 8

Bloomberg - Bonhams, London's third-largest auction house, plans to hold its first Middle East sale in March, featuring contemporary works by Arab, Iranian, Indian and Pakistani artists.

The auction will be held March 2 to 4 at Dubai's Royal Mirage Hotel and follows Bonhams formation of a local venture with the al-Tajir family, the London-based company said in an e-mailed statement today.

``The United Arab Emirates is destined to become one of the world's leading art markets,'' with a particular taste for Islamic and Arab works, Matthew Girling, Bonhams chief executive officer for the Middle East and Europe, said in the statement.

Thomas Palley | Jan 8, 2008

Asia Times Online - In recent months, the US subprime mortgage crisis has been rippling outward affecting other countries. British banks have made large loan-loss provisions and there has been a run on the Northern Rock bank. German lenders have incurred similar losses and Germany has suffered two large bank failures. European banks have also become leery about lending to each other, forcing the European Central Bank to infuse emergency liquidity. Now, Japan's banks are feeling the heat.

These global spillovers have their origin in the huge US trade deficits of the past several years. Those deficits played a critical role generating the distorted interest rate environment that created the subprime bubble, and they also explain how subprime loans have wound up in Tokyo portfolios. For policymakers everywhere there are lessons about the dangers of large trade deficits.

There has been much talk lately about the state of the middle-class, the insecurity of workers, and the flat-lining of wages in America. Much of the debate has revolved around the changes in the make-up of our labor force today. It has been erroneously reported that the shrinking of wages and of the middle-class is due to our no longer being a manufacturing society and due to out-sourcing. While this provides a convenient foe, it does not accurately depict the situation. There is a direct correlation between the flat-lining wages and the shrinking middle-class with the reduction of the labor movement in America. The only groups who have seen real growth in wages the past few decades are groups who are represented by unions. If this is true, then why are unions and the labor movement not more powerful and vibrant?

For decades the United States was economy was overwhelmingly dominant. We had such a tremendous advantage in wealth, manufacturing power and technology that we could afford to toss away resources, whether it be on rebuilding Europe and Japan, on engaging in the expensive arms race that broke the Soviet economy, or on misguided policies that encouraged U.S. firms to locate their activities abroad. That time is gone. We now owe more than $9,000,000,000,000 to foreign countries because we no longer sell enough things that other countries want to be able to pay for the goods that we import. Our manufacturing operations have largely relocated to other countries – we became a net importer of high technology goods for the first time in 2002, and our deficit has increased each year since then. America’s dominance of technical publications and college degrees is fading quickly and surely.