THE FUTURE IS RUSHING UPON US
Tuesday, May 26, 2009
Economic Collapse: Debtors Benefiting from Severe Inflation, Government Helping Forgive Debts to Avoid Brain Drain, and Gold Triumphant
Military elites do not wish a massive brain drain of professionals fleeing this country to avoid 21st century indentured servitude of debt repayment (since ability of the military to exercise power abroad slackens). In the coming years, there will be increased intra-elite infighting concerning massive debt forgiveness for 20% of population who fancy themselves as middle class. There will also be a silver lining for those Americans who use their remaining currency to buy mass amounts of precious metals rather than pay off their debts.
Lets do a cost-benefit analysis of a student loan repayment scenario and see if any life gains can be made from devaluation of the dollar. Lets say you have a couple thousand dollars. Lets say you happen to have acquired 10,000 dollars in student loan debt through financial aid/Stafford. Whether you have the subsidized or need based unsubsidized fixed interest rate is immaterial for this scenario. The point is that you have a fixed rate for a loan to repay over a decade or so. Lets use the locked rate of 5%. What should one do in a country where: 1) the national debt burden is 2.5 as heavy as before Great Depression 2) 3 of the 5 oldest financial pillars (like Merrill Lynch) have collapsed within months and 3) the government decided to sharply increase the debt to start gradually escalating restructuring efforts?
There's 2 big options:
Pay a minimum every month ($106 for standard repayment or $70 graduated) for a few years and then repay the whole thing rapidly in chunks. Since doing minimum payment for 10 years would be $2,730 in interest for standard or $3,250 in graduated, one thus saves a few thousand dollars. However rapid repayment involves losing thousands of dollars early on in one's life that can be invested elsewhere.
Put the loan repayment on automatic billing and treat it like a utility for 10 years and in the end pay $12,730 for standard repayment or $13,250 for graduated.
Which is better?
inflation calculators and see. In other words, same product that cost $10,000 dollars in 1999 would cost $12,500 dollars in 2007. Of course that's assuming the product is not afflicted by deflationary effects of technological breakthroughs in production as occurs with computer hardware. American college education definitely doesn't fit into that product category after the 1970s-1990s transition from industrial state capitalism to financial state capitalism. Demand for better quality of life through increase in both quality and quantity of education, medical care, transport, safety nets is prevented from being met by the architectural design of the current political-economic system. In 2006 to 2007 for example, the average cost of tuition for public college has risen 5.6%, whereas 10 dollars today buys exponentially more computing power than 10 dollars a decade ago.
The full cost of the Stafford loan over a 10 year monthly minimum repayment is historically the same as paying it out all at once. There is a strong possibility that the dollar will lose 15% of its value or more by the end of 2009. Potential of even greater inflationary trends in the future are great for anybody who owns debt as long as they can restructure their interests. There is no logical reason whatsoever to give more money than you have to to banks working with financial aid organs. There is a solid chance that the near future US government will not only help restructure interest payments on many house mortgages/college loans but that it will make financial sector forgive all the loans completely.
politically connected oligarch class ) pose the highest risk of emigration, mass capital outflow, and brain drain to Europe. Politically unconnected homeowners who lose not just their life savings but their shelter and neighborhoods are a huge threat to federal control. It'd make post-default recovery efforts towards German style industrial capitalism much more difficult. Obama administration must gradually nationalize the finance sector through making some finance oligarchs believe he is just collaborating with them. That will allow mass national debt forgiveness when the time comes for dollar default. The looting and capital outflows done by top 1% cannot be avoided but social stability and political support from homeowners can be preserved to allow greater restructuring in the future. Whatever micro and macro level political-economic architecture US will have by 2020, thousands of gated communities, suburbs, towns, and small cities must not be allowed to disappear over night. Proper handling of debt forgiveness will allow their disappearance to be gradual as brain drain to Europe will be reduced and redirected a bit towards major US cities.
Best way of investing one's cash right now is buying as much physical precious metal as possible. Under inflation of the last decade 10 thousand dollars now buys 25% less while an ounce of gold buys a bit more. As a hypothetical example lets use the unusually high annual inflation rate (since it occurs during a major economic crisis) range of 20-40% over 3 years. If the price of acquiring the same model bicycle for urban transport,goes from 200 dollars in 2009 to $345-$548 dollars in 2011, then an ounce of gold will allow one buy the bike for a profit. Of course we see how an ounce of gold also allows to buy 2-3 bikes simultaneously so extra bikes can be exchanged for bulk food and other objects. Financial organizations like TD bank are already encouraging people to exchange their coins for cash without fees. If large players are already undertaking copper hoarding (to exchange for Euros in the future and maintain status as a "bank"), then small players should get on the act while sucker's rallies keep gold/metals price within reach.
recent suppression of gold advocates like Ron Paul ( as well as federal raiding of liberty dollar makers and similar precious metal organizations ) demonstrates a couple of things. The decades long mass oligarchic looting and exploitation of bottlenecks created by post-industrial capitalist structure was meant to accelerate in 2008. It also shows that oligarchs are split into the rooted domestic faction and cosmopolitan mobile one. The domestic ones (with their company infrastructure rooted/reliant on being within national borders) hope to collaborate with and use the might of the federal government for further enrichment as before. The international ones, the ones that will emigrate to Western Europe, plan on making money on the collapse of US itself by properly timing mass transfer of resources. It's in international faction's interest to properly time bulk metal buys while they join forces with the feds in draining national faction's wealth in a few bursts.
US industrial peak has been passed long ago but financial capitalism kept the appearance of GDP growth and psychological associations of that with material and quality of life improvements. The focus on stock maximization rather than fine tuning industrial capitalism to improve population's quality of life has created infrastructure that cannot qualitatively materially improve the needs of the entire population. CIA analysts have shown that growth of a certain industry doesn't necessarily mean efficient proper allocation of resources and social stability. Oligarchs who pressured the federal government to borrow from China and maintain the illusion of prosperity know full well that one can borrow, not necessarily repay, and be well off. Chinese leadership knew this perfectly as well but didn't care since it allowed them to rapidly expand real industry. Chinese government has done what Lenin wanted, have the capitalists sell the rope with which Chinese can hang them.
Sunday, May 24, 2009
Obama is well served to use a doomed currency to position strategic industrial sectors to receive foreign investment once US defaults on its debt. He must do so before reactionary political opposition can reorganize
The current high debt can only be resolved through a properly timed debt default, controlled bankruptcy, and mass restructuring in order to create:
1) an industrial base for post-default recovery
2) aggressive drive to court foreign investment
It is highly unlikely that American power elites will be able to successfully restructure while preserving large parts of both the political and economic architecture. That is due to 2009 economic foundations being drastically different than in 1870s, 1930s, or 1950s.
United States debt as % of GDP has been within 15 to 30 percent range from 1917 to 1930. The last time debt got that high was Civil War militarization and the following long recession of 1870s. Before that there was the high debt of political restructuring from colony unification and consolidation into nationhood in the 1780s-1790s period. The long recession of 1870s and the long depression of 1930s were both used by American elites to restructure minimal state capitalism into a more productive expansionary force. American power elites had access to cutting edge industry and used every crisis to expand hard industry and outproduce their European neighbors. Economic reversals in 1870s served to weed out the less efficient oligarchs and consolidate wealth in the hands of those that remained. Contraction in the 1930s resulted in a managed bankruptcy and then rapid filling of idled industrial capacity through mass military exports and production.
At the time of the disastrous US involvement in another European conflict there were two mid level state capitalist powers that were on the road that US would undertake from WW2 to the present. They were the forcefully expansionary and indebted economies of Japan and Germany. Both wanted to secure sufficient amount of natural resources and room that England, France, Russia, and America already had. This would allow them to become co-equals on the world stage in terms of pushing their economies, currencies, and exports on others. Japanese leadership knew that the energies of both United States and Soviet Union were heavily focused inwards on reforming and thus preserving their own systems. Just like Americans a world away, Soviets were trying to create domestic demand for its industries while consolidating a hybrid of maximum state capitalism with a decentralized socialist base. Japanese strategists calculated that Soviet Union would not be distracted into a destructive cycle of trying to forcefully impose its still developing system on all of Japan. Thus, they probed into Soviet border colonies around Manchuria in 1939 but were repelled with heavy losses. The mere fact that Soviets signed a gentleman's peace treaty after repulsing a Japanese attack led Tokyo to conclude that indebted isolationist Americans would be equally negotiable and prudent in a colonial skirmish. The rest is history as United States completely overreacted to border pressure on Philippines and Hawaii after only losing a couple thousand men. Thus began a change from Washington's focus on building domestic capitalism at home to internationalist Trotskyist efforts to violently spread it abroad.
One society broke first and the other rapidly overextended and actually allowed Trotskyist minimal state capitalist proponents to come to power (Cheney, Wolfowitz). The American debt as % of GDP is as great in 2009 as it was during the mass industrial production of WW2. This time around US does not have the industrial capacity (proportional to the size of its economy) necessary to even attempt managed bankruptcy like in the 1930s. Neither does US have the natural resources the way it did in 1950s and 1960s. It also does not have a Cold War equivalent to continue to distract the world and push the dollar pyramid scheme on smaller nations. The recent attempts to find a motivational ideological replacement for the Cold War (with combination of criminal investigation into religiously motivated organized crime and huffing and puffing over Putin's FDR style policies) is not just a pathetic joke but a worrying development studied in European capitals.
Volatility of the Dow Jones industrial average between 1925 to 1928 was 22%. Volatility of Dow Jones between 2005 to 2008 has been 21%.
Volatility in 2008 alone has been 40% compared to 22% in 1928. The housing bubble has reached its peak in 2005 just as it similarly reached its peak in 1925. Due to the regionally uneven speculation on housing, the inflation as well as deflation of the bubble was uneven and less observed. 2005 seems to have been the furthest extent in influence of the paper tiger superpower that is United States. Figure 1 shows that 2005 was the eye of the storm in terms of stock volatility nested between the events of dot com collapse/911 and the crash of 2008.
An economic depression does not happen overnight as desperate government efforts create repeated sucker's rallies. The high volatility (44%) in the first few years of The Great Depression made sure that the last drops of capital have been purged from the hopeful speculators before true bottom was hit. It's not difficult to imagine the present situation similarly deteriorating over the next few years considering the enormous initial swings that we've had already in the last half a year.
The ease of technological transfer of money and increased access to the stock market by the the masses allows greater pain to continue on longer as foreigners get in on the act of shorting and buying American assets. The globalization following Soviet collapse allows the current economic depression more potential for widespread economic damage than depression of the 1930s. Even China is not completely immune although much better protected than more globalized neighbors.
American leadership is reverting into the mode of trying to salvage parts of US economic and political system through top down restructuring. Unlike with the case of Gorbachev, most of the world's elites want Obama to succeed so US does not become a failed state. There are no rapidly adaptable ideological alternatives other than to have an international cooperative effort by minimal state capitalist countries to work together to make sure US restructuring and bankruptcy is gradual, peaceful, and manageable. US has already been stagnating like Soviet Union for over two decades with real wages not rising for large swaths of the population. Infrastructure is poorly maintained and remains 10-20 years behind more pragmatic hybrid nations. The intelligent and politically connected have already taken advantage of the decades long rot in the form of the finance industry (up to 40% GDP economic growth relying on financial non-producing sector). Cracking down on the money manipulators will be just as futile as Soviet attempts to stamp out the black market in the 1980s. Money manipulation is structurally hard wired into the capitalist system.
The population of the last major ideological power has completely internalized decades of propaganda as well as successfully had millions of foreigners internalize it as well. Even to socially conceptualize alternatives and pragmatic non-ideological approaches provokes instinctive distrust, misunderstanding, and reactionary anger. American people have been lied to and manipulated by their own politicians for so long that they cannot even imagine politicians abroad or at home who speak pragmatically and analytically. The idea of "American way of life" must not become one that borders on the religious since that risks the use of federal government for internationally dangerous purposes like increased militarism. The greatest burden since Gorbachev rests on Obama today and hopefully international leaders realize that they need to take some pressure off for the security of the world.
Saturday, May 23, 2009
The process of wrestling NATO's control away from the Anglo-American partnership should start immediately while the international recession is relatively young. American economic collapse is forcing US leadership to copy its former ideological colonies of Germany and Japan when it comes to implementing state capitalism. That in turn will result in a power vacuum created in central Europe and major risk involving NATO's structure the way it is led presently.
US always had elements of state capitalism although private sector was far less regulated compared to US's more state centered ideological colonies in Western Europe. However, decades of de-industrialization, social/structural decay, and military build up brought the need to accelerate ideological compromise. We now see an American president insist on the need for state champions in energy and car production as well as utilization of state organs to shape private sector development. US still has what it takes to pull that off peacefully. If De Gaulle's France and Putin's Russia managed to create successful state backed champions under conditions bordering on civil war then Obama's America can do the same.
There is sufficient amounts of managerial experience and efficiency enforcement talent to be found domestically. Subsidizing cars and green energy will do for those industries what subsidies for agriculture did. That is, create industrial base for mass cheap exports abroad after years of hard work and political coalition pressure. That will take time however and in the meantime it makes strategic sense to extend state capitalism to biomedical, natural resource extraction, electronics, and agriculture sectors. These three fields, have the most potential for economic stimulation since they are one of the few things US still has an edge on internationally. American oligarchic demands and semi-privatized medical system have created the most advanced pharmaceutical and bioengineering research and development in the world. Bioengineering, organ growing, genetic modification, and resulting transhuman augmentation and life extension, are the best potential kernels of a new American economy. As such, if US government wants to take serious stabilizing steps to save bits of the old capitalist system, it needs to nurture, subsidize, and promote the biomedical sector the way it wants to with the car industry. Biomedical product exports are potentially worth trillions of dollars long term, especially if Koreans and Japanese can be brought aboard as collaborative partners.
Proper state subsidies and investments must be made immediately so the lifeline industries are nurtured before the default on the dollar occurs.
How does this relate to central Europe? Central European states have embraced American style free market capitalism with open arms. Legions of US capitalist commisars have flown to educate the fresh faced leaderships of Baltic states and dissolved Warsaw pact members. The Soviet collapse has been so rapid and demoralizing that the ideology of minimal state capitalism has taken root deeply and broadly as far as the core states of the former Soviet Union itself. In many ways, central Europeans even outdid their American teacher (and new NATO master) in terms of lack of regulation, taxation, and lack of investment in real industry. The supposed success stories, of minimal state capitalism, have been shown in nearly double digit growth rates throughout the former socialist space. The small Baltic countries have shown their proud ability to stand tall next to other speculative paper tigers of Ireland and Iceland. Even the normally cautious American satellite of Germany got into the housing bubble creating action in the 1990s. Supposed post-industrial financial wizardry was so visible, that in 2003 Donald Rumsfeld even proposed to make central Europe the new ideological arm of American power projection.
Germany and France were no longer seen as reliable footholds to violently spread capitalism throughout the world. Franco-German leadership of Chirac and Shroeder were fine with the split between US and Western Europe since it allowed them to pursue their own independent state capitalism with European characteristics. They decided that US lacks the industrial production to continuously exert influence in central Europe. Leading Western European leadership decided to gradually play Americans and Russians against each other while competing with US and Russians in central Europe when it comes to financial investment. With no massive global ideological alternative to warn of the risks, even the neutral well managed Swedish banks poured money into"New Europe" states like Hungary and Latvia.
Now it's unlikely that Obama's move towards restructuring of the state capitalist economy to make it more efficient will cause anything as drastic as any American region wanting to secede. After all, the great American melting pot and intermingling of ethnic groups produced a much more durable artificial nationality compared to the violence born Soviet one. Surely American evangelicals, blacks, northeastern secular liberals, and Hispanics can work out a way to peacefully decline and restructure without resorting to Yugoslav style nastiness. The last statements are not meant as sarcastic or alarmist. US state capitalist political system allowed some social popular pressure to be released continuously at the polls without being angrily pressurized for decades.
However, the demoralizing effect and demonstration of the minimal state capitalist failure will mean another economic/ideological collapse in the heart of Europe. We are seeing industrial drop offs in Hungary, Ukraine, and the Baltic states that resemble the early 90s and American reversals in the early 1930s. US never even had a large enough financial presence in their new ideological colonies since most of the housing bubble money came from EU heavy weights. That means that central Europe will drag economies of Western Europe down with them to an undetermined degree as German and Scandinavian Banks find themselves in a Baltic sub-prime mess of their own. With decrease of EU's economic support, American ideological betrayal, and Obama administration's lowered priorities for NATO expansion, regional vacuum can only be filled rapidly by Russia. Kremlin has tangible natural resource and energy exports as well as over 200 billion dollars in saved wealth. China's 500 billion bailout to create internal demand for its products is beginning to push oil price up again. This means that the oil based ruble is strengthening and can be used to rapidly exert political pressure in the region filled with devaluing currencies.
French and Germans should begin efforts to become the new negotiating power center of NATO. If US decides to dissolve the alliance in retaliation, that is fine. Europeans already have protocols to make use of NATO facilities for a new European alliance. If US decides to stay (and still provide a nuclear umbrella to augment those of France and England), then that is the perfect outcome for the continent. It'll show American people that they are still relevant and soothe England's fears of being marginalizing completely. Berlin, Paris, and Rome can then pragmatically negotiate with Moscow on security arrangements for the continent. Only negotiation untainted by reactionary ideology can bring results. This solution allows coordinated preservation of North-Hemispheric stability in a time when state capitalism faces serious challenges from economic and social stagnation. Situation that leads to serious Western infighting, further deterioration of investor confidence, and potential escalating violence must not be allowed to happen. That would allow only China to remain the biggest planetary center of influence with 1 trillion dollars of saved wealth and the only major growing economy. Even briefly, that risks giving an opening that might prove difficult to close.
Friday, May 22, 2009
Early comedy film was one of the powerful ways to psychologically energize and briefly escape from the world. Christian moralizing began to infect Hollywood in the 1930s and totally drained life out of comedy
Comedic movies were some of the first ever created. Arguably, pornographic films are the first considering some of the earliest nude photographs in existence were shared by soldiers on the battlefields of American Civil War. When we think of cinema from the 1920s, the first images that often come to mind involve jittery characters with caked make up who are trying to be amusing.
Comedic effect can be accomplished by a wider range of audio and visual tricks compared to those used to induce sorrow, fear, anger, or sexual excitement. Since there are a multitude of different human personalities (with physiology specific comedic sensibilities), the possibilities to mix and match to combine are endless.
The silent films of early 20th century relied on slap stick and satire of major capitalist and authoritarian powers of the day. The so called greatest generation of Americans and their fathers consumed the greatest amount of sadistic cathartic visuals as well as vicious satire. They laughed it up at people on the screen getting repeatedly smashed, punched, taken advantage of, or otherwise undergo situations that would normally create horrendous bodily injuries, death, and life reversals. This was a healthy release of pent up frustration at the end of a long blue collar day. It was an escape from stifling puritan morality and the seriousness of demands from the boss, government, children, and spouse.
Even cold boring individuals like Thomas Hobbes recognized the power of the comedic effect. Hobbes mentioned, although in marginalizing tone, that "the passion of laughter is nothing else but sudden glory arising from sudden conception of some eminency in ourselves, by comparison with the infirmity of others, or with our own formerly." That is very similar to Nietzsche's conception of laughter as sudden involuntary feeling of power.
Seeing a refined gentleman getting a pie in his face on screen brought an involuntary comparative feeling of superiority for the audience. Nobody on screen was spared from being the target of absurd situations which often involved people surviving Tom & Jerry levels of physical damage. The cathartic illusion of one's influence briefly rising in the world had tremendous psychological benefits. Seeing Charlie Chaplin imitate Hitler or poke fun at Fordist assembly lines revealed that behind the masks of purposeful seriousness, the secular powers that be are irrational and as devoid of meaning as the church.
That is not to say that laughter was always slave morality being expressed through seeing someone powerful slip on a banana peal. We saw movies and cartoons poke fun at conquered ethnic groups in distant lands as well as domestically. Weak, old, and incompetent were just as big a target as the rich and the powerful. The iconic characters of Bugs Bunny and Daffy Duck were totally amoral and changed personalities like gloves to trick the gullible. Chaos and irrationality won the day. Cartoons like that released the audience from the demands imposed on them by the life draining Christian influenced world. Cartoons back then had more adult nuances and themes that really created an experience for the whole family.
Lets skip forward in time to the last twenty years and look at some trends in modern American comedies. Tiresome moralizing and slave morality has thoroughly penetrated the genre. We see:
1) Endless underdog to success stories
We see unlikely, flawed, lovable, and quirky characters defeat the good looking, privileged, wealthy, and arrogant antagonists. The pattern is endlessly regurgitated to children, teens, and adults from Mighty Ducks to Little Giants to of course, Dodgeball. The latter pokes fun at the genre while thoroughly reaffirming it. The rugged group of kids are eventually led to victory over the black clad aryan nazi-esque sadistic teams. Yes, of course they have the mandatory reversal, moments of doubt, and imperfect team cohesion but they pull through in the end. Work hard and be yourself and all shall be well. How is this marketed as a comedy for the whole family? It's a tiresome lecture and a repackaging of the protestant work ethic.
The underdog plot just transforms in movies marketed to teens and adults. In movies for older audiences, the goal of self esteem is reached with similar acceptance of who one is. Self acceptance is not rewarded by acquisition of friends and a superficial sports victory however but through acquisition of the object of sexual desire. The attractive sadistic nazi does not hold the hockey stick this time around but he does stand in the way of acquiring the girl. The lovable anti-hero is encouraged to not even try to compete in willfulness, strength, and healthy confidence (since it is shown to result in failure) but to specialize in what he is good at. The undersexed underdog of course is good at sentimental quirkiness, endurance, and reliability which saves the day. The hero at first, doesn't understand what 30 years of the same plotlines requires of him to succeed. He tries, with disastrous results, to get help from a more promiscuous friend or guru. All seems lost but then, amusingly, the underdog's friends who are even weaker than him, tirelessly labor to help their stronger friend get laid. All ends well as the girl finally realizes that the cost benefit analysis of having an adoring slave boyfriend outweighs the excitement of interesting sex life. The audience gets what it expected and all go home.
Something feels wrong to them however. That wrongness is complete lack of humor in the movie just seen. Did they just watch something meant to elicit a brief feeling of power or were they just in church? Yes, they saw a few moments of slapstick shown in trailers and some awkwardness to which they can relate. That, on the whole, was completely not the escapist release from reality, rationality, duty, and preaching. Not only did many men get the message that they will always need to bend over backwards for female attention but teenagers received a message of just giving up forceful self transformation. The supposed "comedy" informed them that "being yourself" while still taking a chance at a scrappy project will lead to rewards. The rewards in turn will provide genuine transformation and self esteem. Not even the occasional flashes of nipples and toilet humor can redeem the broken expectation of being amorally uplifted throughout the whole experience. Even if there wasn't a message of psychological stagnation the movie would still fail since the audience is not really encouraged to laugh at something in comparison to themselves. Rooting for somebody to win, pity, and sympathy perhaps should be found in dramas and thrillers but not in supposed "comedies".
One might argue back that Bugs Bunny and Charlie Chaplin were often involved in underdog plotlines. These characters are qualitatively different in that the audience always knew Bugs Bunny was always more powerful and that Chaplin was satirizing the system rather than trying to get sex or some big score.
2) Promotion of marriage and family life for amoral characters
Perhaps the most insidious way that religious morality snuck into being accepted as "comedy" is the story of an amoral character transforming into a neutered moral one. It starts out as an over-bearing, fun loving, liberated, often promiscuous character who eventually sees his/her life as empty and devoid of meaning. That meaning, of course, is found in marriage and having "the one" or even children. These types of movies are the height of adult comedy. Wedding Crashers is a solid example of this. The main two characters start out as amoral fun loving individuals who just use weddings for sexual gratification. However, one of the characters who is more sentimental begins to fall for "the one" against the advise of his comrade. Eventually the meaningless of existence is filled with a soul mate. The soul mate doesn't exactly have to be traditional but the end result has to end in marriage. Comedies oriented to a female audience combine the preaching of the underdog story with getting the right guy to agree to settling down within a marriage. Often, that involves properly making the promiscuous bachelor realize the error of his ways.
The real nauseating taming involves former slapstick comedians who now do better paid marriage/family promoting films. Nothing on screen is less funny and more pathetic to see than a former slapstick actor like Jim Carrey having to show moral discomfort and occasional timid liberation. The oldest possible adult audience are presented with films where main characters are already married but realize that they have to just work through it (after some "humorous" stumbles) instead of getting a divorce. Town and Country is a good example of this as the director even got a formerly hyper promiscuous Warren Beatty to play the main actor. The protagonist sees that outside of marriage there is nothing but unsatisfied life and nihilism. Self sacrifice is the only result and the credits roll. The audience cannot believe they have actually wasted their time for a hope. A hope that the movie they just finished watching would not turn out exactly like the last one. Like gamblers they continue to watch thinking that one day they will see something structurally different instead of just gradually increasing amount of sexual moments and toilet humor.
With time, the unhealthy moralizing filth will be purged from comedy as the youtube generation grows up and produces new directors. It is just unfortunate that American movie studios have grown so large that the pressure of playing it safe and providing something for everyone creates muddy regurgitated disappointments. Hopefully, internet piracy will increasingly make such mediocre product more expensive to make and lead to regional movie studios instead of the Christian McDonalds sitting in Hollywood today. This is not an appeal to something sophisticated, high brow, or meaningful. This is an appeal to re-imagining the roots of what made comedy one of the first genres to be greedily consumed. There must be a re-imagining of comedy's origins for the 21st century so the audience can be provided with a clean healthier product. One wouldn't put transfats into an organic dish. One would find ways to take the unhealthy out and augment the existing healthy ingredients. The moralistic prudishness and self censorship that began to infect Hollywood in the 1930s took a long time to drain the industry and lead to the present state of affairs. The people are thoroughly sick of it and subconsciously crave something else. It just needs to be shown on the big screen.
Thursday, May 21, 2009
Even an incompetent weak leader is occasionally prodded into doing something right for his country ( even if to get re-elected). No Child Left Behind bill which was co-sponsored by Edward Kennedy was signed by George W. Bush in 2001. United States took a major step towards improving the quality of its workforce.
At least that's what appeared to happen if only 10th amendment didn't get in the way of creating a national standard for America's children. United States never had a national education minister to properly oversee the country's competitive development versus international rivals. A national education standard regardless of class or race to which all students strive to makes solid geopolitical sense. Yet even at the height of the cold war American constitutional arrangement stood in the way. Such a standard (that many leading Western nations have long had) would help culturally equalize the population, narrow the gap in worker quality between different regions, and allow national leadership to effectively track how much economic value an average American student can bring to the world's table. As of today it is rather difficult to assess where an average American elementary kid stands in comparison to a kid in Australia, Canada, or France.
United Nations tries to do some tracking with its Human Development Index (on which United States is 19th, sliding down, and about to be surpassed by Italy of all countries). UN's task is drastically complicated by major structural and cultural roadblocks:
2) Substantial qualitative gaps between private schooling of the rich, middle class public schooling, and public schooling for the poor. The geographically large 300 million multi-ethnic federal union also suffers from often large cultural differences between regional, racial, and ethnic populations that translate into significant splits within the state wide education system.
When High School children around the country reach the time to take a nationally standardized SAT test, many are in for a rude awakening. A "good student", from a rural locality in a state that doesn't try to modernize might think his high grades prepare him well. However he often scores worse than a "good student" from a state that tries hard to modernize and implement European style standards and assessment.
In 2005, the then chairman of the federal reserve Alan Greenspan has identified that American students compete well globally at 4th grade level but that there is a drop off in average quality after that. Greenspan, one of the biggest defenders of the free market, has pinpointed the lack of educational investment for high schools as the leading cause of widening gap between the rich and the poor.
"The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself" - Alan Greenspan in a public testimony.
Such shocking statements by a man who oversaw nation's fiscal policy have gone unnoticed by most of the union's population. A chart of mean 2008 SAT scores by state can show the extent of the socioeconomic divide that is pushing US towards potential social instability in the future. What is most striking and telling about the state of economic inequality in US is that the states with the highest average SAT scores have the lowest amount of students taking the exam.
poorest states in GDP per capita.
This is taking into account the distorting effect that those earning over $100,000 a year have on the average GDP per capita evaluation. Midwestern regions of the union as well as the non-diversified export states are under oligarchic control as blatant as that seen in parts of South America (where GINI index of inequality is even higher than in US). Midwestern and the Southern regions are much poorer than their entrenched strongmen claim. Announcements of high SAT scores or more people getting into college serve to perpetuate the illusion of rural development.
Perhaps the best example of oligarchic influence on political power centers is shown by Washington DC. Many nations of the world are judged by the social conditions of their capital cities. Capital cities often show the microcosm of the overall society itself since that's where the most power elites are concentrated (whose thoughts in turn shape society). In US, due to its decentralized federal structure, that is less of a case (considering the importance of state capitals, financial/cultural hubs of New York and Los Angeles, and strategic port cities) but still worth a look.
District of Columbia has the highest GDP per capita, the lowest mean SAT scores, and the highest SAT participation rate (and subsequent disillusionment). Lets dissect this innocent data.
New York for instance has same level of participation rate in SAT taking as DC and is only 45th worst mean SAT score performer (DC is 51st worst). However, New York is 6th highest by GDP per capita (DC is first) and we see that nation's capital is 34% more socioeconomically unequal than even the state with the financial heart of the American union, Wall Street. Such striking gap in wealth and ethnic culture is unthinkable in Europe's capitals (even now that they are becoming culturally segregated by immigrant and native neighborhoods). Even Moscow, with the flashy belligerence of its oligarchs has not reached such a level of gilded age extravagance. Such reality in the beginning of 21st century should make any American pause about direction of the country. Past Western accusations that involved materialism gap between Soviet elites and average Soviet citizens begin to sound ridiculous in comparison to counter Soviet accusations of material gap in capitalist urban areas. Washington DC, of course, also has the best medical care in the country to keep its elderly Brezhnevs functional for decades.
After taking an explanatory background detour we return to the issue of worker competitiveness. Political realities make even a rabid modernizing president unable to create proper educational assessment of citizenry within his own country. Lack of national educational standards will continue to make rural regions of the country more uneven compared to economically growing urban areas. We have seen how group think of American elites has led to the financial bubbles as well as to the nationally draining occupation of parts of Asia. Doing an American perestroika-style restructuring when the economy is stagnating or declining runs the risk of massive failure. Undergoing needed restructuring itself will require nothing short of a constitutional convention or a number of new amendments. The entrenched regional powers in more distant parts of the union will not allow such a restructuring to happen or to properly succeed even if it begins. Large swaths of the American population in rural areas are thoroughly indoctrinated with ideological nationalism. Many sincerely believe the American federal union is in a rather fine shape compared to more consolidated, educated, industrialized, and egalitarian countries of the world. Many also sincerely believe that if they just work harder (to make capitalism more pure), the superpower will be set on the right path. Unfortunately, many of these ideological conservatives are the elderly and about to gain even more power as baby boomers retire. Their neural patterns are thoroughly indoctrinated and they are not as open to education via new forms of media like the Internet.
Toyota deciding to open a factory in Ontario instead of southern US, is a foreshadowing of whats to come. Toyota decided that although America has workers willing to work for less (and local authorities provide tax incentives)it is still more profitable to open a factory in Canada since Canadian workforce is better educated and better medically covered. Considering the rate of income growth in US slowed to below growth in inflation in 2008, we need to start thinking about what to do about the 10th amendment. It's THAT serious.
Tuesday, May 19, 2009
Modern communication technology has allowed China to achieve a centralized bureaucracy that has a smaller chance of becoming overextended and too top heavy. The danger of parts of central government melting into regional structures with rebellious consequences is diminishing every year. The risk is not totally gone however if rapid economic growth bumps into serious stagnation and even GDP reversal. As of today, China has the creaky uneven centralization of 18th century France and is gleefully engaged in large scale mercantilist practices.
Chinese society is not yet fully urbanized and consolidated. Beijing cannot yet engage in cutting edge mercantilist practices as done by Japan and Singapore. Chinese political center only recently overcame last remnants of feudalism, warlordism, and peripheral regional integration. Having dealt with that, China is pursuing the same economic path that allowed Kaiser's Germany to rapidly grow by taking advantage of British post-mercantilist free trade period. It is very historically appropriate. There is no need for Beijing to emulate Spanish, British, or French mercantilist experiences.
For a nation of 5 year plans, it makes sense to try to skip developmental steps and leap from present macroeconomics of Kaiser's Germany to those of Japan. Today, China has done rapid neomercantilist development by the book:
2) Self sufficiency in agriculture and manufacturing of basic to advanced goods
3) Acquisition of large amounts of money and gold (around a trillion dollars worth as of 2009). Controls to prevent wealth from flowing out of the country through protectionist restrictions on imports
4) Large scale mining and infrastructural projects to increase use of domestic resources and terrain. Hamilton and Quinsy Adams would be proud of what Beijing's coastal elite have achieved in the last 20 years. China has also secured 60% of Africa's resource exports and are structurally integrating Central Asia and Siberian Russia into their resource feeding network.
5) Keeping the overall population's wages low to increase country's overall manufacturing exports. That is easily accomplished by underdevelopment of Western provinces like Tibet. One child policy is more imposed on the wealthier Mandarin ruling coalition than the periphery ethnic groups. Uneven implementation of one child policy keeps periphery ethnic groups more fertile and poorer. Coastal urban ruling peoples spend more energies on advanced wealth generating employment rather than saving to augment multiple children.
6) Keeping of imports limited to natural resources and large scale buy outs of foreign expert talent in anything from engineering, electronics, economics, and hard sciences
Current opinion and international action has just been reactive so far. Some are mainly focused on China's attempts to prevent rapid devaluing of the bought dollars (before all of them are eventually used on natural resources anyway) through creation of an international reserve currency.
Some focus on how the international recession, can be used by China, to move from less advanced manufacturing to price competing with Germans and Japanese when it comes to advanced electronics and electric cars.
Many are focused on new Chinese confidence of proactively criticizing existing international economic system and offering transformative multilateral steps such as gradual multilaterial global involvement in the IMF.
China is now in the process of moving to the final stage of manufacturing asset concentration through focus on development of advanced products like cars and computers. Rapid economic assimilation of Taiwan and Hong Kong will aid in that process. Western investment in Taiwan created a base for high technology and competitive know how. Many Taiwanese oligarchs have already basically integrated their companies with mainland ones. Ideologically, Taiwan's Kuomintang political center, can now smoothly cooperate with Chinese authorities. People forget how important socialism was in Chiang Kai Chek's original nationalist ideology.
Very soon, China will begin manufacture of high technology goods to compete with Germany and Japan for markets in Russia, Europe, and North America (as well as lower end cheap electric cars sold to developing nations). They will be forced to utilize existing free trade international system (perhaps stabilized by IMF's Special Drawing Rights currency basket) to push these products abroad.
In a few decades, the communist leadership in Beijing will then be able to claim that not only did they bring the nation out of poverty but they:
1) beat Westerners at their own game like Japan did (but without a period of war over resources)
2) created real feeling of nationalism, inter-ethnic peace, and modern nation state like Chiang Kai Chek wanted
3) avoided Soviet Union's mistakes when undergoing Perestroika while properly utilizing communist fruits of mass literacy and emphasis on science/engineering
4) took the torch from United States as the Global role model when it comes to free trade, peaceful co-existence, lack of harmful interference in other societies' business, isolationism, respect for borders of small states, and business cooperation
5) built more for the developing world than the financially oriented English speakers by swapping resources for real engineering construction projects
6) helped create a stabilizing one world currency for more even international development
Such claims will allow Communist party to win election after election for a number of decades even if they allow political pluralism. Many Asian states continued to have one party rule for decades even after democratizing. Cultural collectivism and emphasis on agreement allows power elites to work smoothly together. Taking into account Britain's experience, China can easily continue to pragmatically evolve, build a financial center through Hong Kong, bring new resources (such as Helium 3 from space exploration), and guide humanity by being its center of progress.
Earlier in the article it was mentioned how Chinese bureaucracy has a small chance of being destabilized again. There is precedent for this happening at numerous times in China's history with horrible civil wars and revolts from poorer less developed periphery. China's gini index (that shows country's income inequality between the rich and the poor) demonstrates that China is even more economically unequal than United States. Today, Beijing's authoritarian rule keeps the lid on trouble from elites from either the oligarch coastal factions, rural/regional factions, and urban West emulating liberals.
European Union's job to deal with the near future involves:
1) Being proactive rather than reactive to Chinese, American, or Russian moves
2) Acquiring valuable allies to augment influence. That means working first with Russia to kick American/British influence out of central Europe and then with England to diminish American influence inside NATO. NATO can then be ended/transmogrified and America approached as an equal power to work with.
3) Being pragmatic and not looking at human rights when acquiring resources from other nations. Europe still has time to lock onto substantial amounts of resource exports from the third world, especially Africa. It can join Russia in developing the Arctic energy reserves and help Russia outbid Chinese resource extraction/exploration companies in Central Asia.
5) Use advanced collective protectionist methods to keep an edge in high technology products to stay a step ahead of China. Contribute even more constructively to global currency formation through IMF where Westerners still dominate.
6) Work with United States and England to manage the geopolitical, social, and economic decline of United States peacefully and productively. Invite young American professionals to European Union to displace social pressures from relying on less assimilative Muslim immigrants. Become the stable adult co-equal mediator between Russia and United States so the two former superpowers can productively contribute and provide nuclear protection. Open borders to young educated Westerners from around the world to counterbalance aging of Europe.
7) Develop strong ties to regional powers like Japan and India to counterbalance Chinese cultural influence. To do that, rapidly expand economic cooperation with them in the sphere of building climate change infrastructure, energy, military, and space
8) Comprehensively educate the public on climate change and loss of technological edge to China in non-confrontational terms. Take the lead in recognizing petty-infighting (like Poland's mistrust of Russian cooperation in Europe) and offer tangible economic and developmental incentives to major actors to overcome them.
Monday, May 18, 2009
The Middle East is considered volatile yet there is reason to suspect that the region will become even more dangerous as people discover genuine nationalism. By that time, American authorities should complete transition from special relationship with Israel to special relationship with key Muslim countries.
Current American knee jerk support of Israel is considered dangerous due to sheer mathematics. If only 1% of 1% of 1% of 1 billion Muslims in the world have a homicidal emotional reaction to American financial support of Israeli military, that is 1,000 dangerous individuals. Numbers of Muslim individuals with an over the top emotional reaction (to billions of dollars of military aid to Israel annually) are much higher than this tiny fraction. However, anti-Western violence so far has been only sporadic and committed by religiously influenced, the social outcasts, and the poor. Middle Eastern elites and the middle class sympathize with Palestinians only as much as western liberals sympathized with blacks fighting against the Rhodesian military. That is, very little. To Middle Eastern elites, Palestinians are just uneducated dirt poor trouble makers who provide one more wedge issue in politics.
It is true that today many college educated Muslims become political liberals and serve as a cultural Trojan horse for the West. They are the ones who clearly see their fundamentalists as the uneducated peasants (since they have to live close to them) and keep them in check. They also paralyze and challenge their governments through constantly trying to soften and eliminate corruption of patrimonial and authoritarian structures.
The Muslim world is where Europe was in 1850-1900. Their brief "Napoleonic period" was the combination of Western world's brief occupation and Nasser's efforts. This introduced some of the wealthier Muslims to liberal values. As of today, Muslim liberals are slowly wrestling away social influence from blatant coalition of clergy, oligarchs, sub-national ethnic/tribal leadership, and Western educated authoritarian playboy aristocracy. Only these liberals provide genuine source of nationalism. They are the ones that have a real sense of moral indignation at poverty and their country's backwardness. The liberals want majority of their countrymen to be represented in broadly legitimate government, united, and have the modernization that unified national action can bring.
Genuine nationalism for most of the Muslim world is not yet possible. Large swaths of the population don't really have united societies or legitimate governments to really fight and root for. The clergy still effectively competes with state governments for people's affections. Sub-national affiliations are also very strong still. Influence of supra-national church and sub-national factions will decline as long as literacy continues to spread and college education becomes more widely available.
Inefficient traditionalist leaderships will be replaced with either:
A) more representative liberal democratic ones or
B) modernizing illiberal authoritarian ones.
Then, large amounts of people's productive energies can be released and the economy can grow and diversify beyond commodities. National integration and legitimate government will allow people's influence to readily flow beyond the borders. Muslim societies will be felt abroad in new ways when genuine nationalism comes to the region.
The Muslim power elites in leadership have failed however at truly acquiring popular legitimacy without resorting to force, welfare handouts, or external scapegoats to redirect peoples domestic discontent. The top-down nationalism was a blatantly artificial endeavor coming from elites that were often tainted by Western education and ideology. Their legitimacy was never based on solid foundations of strong moral support from the rich and the poor as well as from the uneducated and intellectuals.
Baathist Iraq and Syria were similar to Kaiser's Germany in their provisions of social safety nets, mass education, forcefulness of violence to bring multiethnic factional peace, making oligarchs/church subservient to central authority, and their independent belligerent attitudes. Iran was on the same Baathist path during the 1979 revolution but their modernizing socialists have been co-opted and browbeat by the provincial traditionalists and theocrats. Forceful modernization of infrastructure that is backed by educated nationalists is inevitable and will touch every part of the region. The only question is whether nationalism will be expressed through a developmental authoritarian manner or a democratic liberal manner.
Early 20th century France and England provide the liberal democratic alternative to developmental authoritarianism. Some Muslim countries will choose this road if their liberal elites are skillful enough to create a peaceful structural framework for factional expression and elite infighting.
Future college grads in Muslim countries will not be the gentle sell outs many in the West hope them to be. We can expect the sheer number of individuals with 5 key characteristics to rapidly increase.
The characteristics are:
1) Sufficiently psychologically empowered through indigenous high education. Confident in ability to exert oneself on the world
2) Physiologically temperamental and emotionally angered by:
-dozens of billions of dollars given to Israel by USA over the decades
-artificially drawn borders rather than borders that were fought for
-pushy regional powers like Iran, Saudi Arabia, Israel as well as their powerful backers
3) Would rather do post-materialistic activism than materialistic empowerment. Abandonment of materialistic values (alongside traditional/religious values) has the potential for dangerous new value creation.
4) Socially, ethnically, and economically integrated into their country and have sufficiently internalized the country's new values.
5) Feel a joint sense of ownership over their society with fellow citizens and think their government is legitimate. This in turn, would allow genuine feelings of nationalism to be felt.
The new wave of intellectuals in the Muslim world will want to rapidly close the modernity gap between their societies and the West. Since the focus of energy exploration is slowly switching from the Middle East to the Arctic, the future nationalist leaders of developing world will find themselves in great difficulty. Technology is allowing cultural change to happen much more rapidly than in early 20th century Europe. Subsequently, modernity will hit large swaths of the Middle East harder and quicker than it did Europe. We are looking at an entire generation of Middle Eastern intellectuals growing up with the same access to information and hedonistic desires as their Western counterparts. Once the Internet educated reach positions of power, their desire to be more forceful in modernizing cannot be overlooked. Western world cannot permanently hope that Middle Eastern nations will never socially solidify to exert themselves like Germany and Italy did. The historic multi-ethnic character of many ME's countries allows greater respect of minorities unlike a region such as South America (where minorities are noticeably different descendants of conquered peoples and slaves). Interethnic respect, combined with reduction of tribal and clergy influence allows for European style nation formation with all the risks involved.
Mathematically, if US continued the dangerous and strategically masochistic support of Israel into the next 20 years, we are looking at secular nationalist hatred with up to hundreds of millions of sympathizers. The mathematics of 1% of 1% of 1% are one thing when the call to arms comes from a grown man who believes in ghosts and is conducting criminal activity on the level of pirates and the mafia. The same mathematics become much more troublesome when the anti-western call to arms comes from popularly elected leaders of legitimate governments for whom people are willing to get drafted for.
That is not to say that the new Iraq will collapse like Weimar Germany and elect a Hitler equivalent or that a modernizing anti-monarchist Arab Lenin is teaching in some university right now. It could very well be that Middle Eastern intellectuals will decide to mostly continue on a mixture of oppression and investment/emigration to Western societies indefinitely like their South American counterparts. Horrid map redrawing nationalist violence and 20th century style ideological struggles are equally possible and can be prepared for by the world's leading militaries.
If the two world wars taught us anything, it is that we should be on the look out for social situations where such aggression can happen again. In the near future, Middle East seems to have what it takes to potentially develop key aspects of Europe before the two world wars. They are:
1) National consolidation after the founding authoritarian fathers have passed into history. Genuine bottom-up nationalism that is energetically supported by most of the population as well as the educated
2) Time of rapidly induced modernity. Corresponding social unrest and vast cultural split between the 20 somethings and 60 somethings.
3) Displacement in the power of a region wide church by secular legitimate governments. Subsequent moral vacuum.
4) Desire to redraw the national lines in a time of economic difficulty and social tensions (depletion of resources to export and thus elimination of economic base)
5) High fertility rates and populations that are on average far younger than Western populations
Time for world's major powers to work together to sidestep the Israel/Palestinian sideshow and to force Israel to accommodate the people it has surrounded in the Gaza Strip ghetto. Then work can begin in safely diffusing nationalistic energies into a productive pan-Arab economic union. Westerners need to stop pressuring Arabs to democratize or liberalize too rapidly. That pressure is already enormous from just cultural sources and is very dangerous for stability. We're better off with gradually modernizing authoritarians than a possibility of a Weimar democracy that releases popular discontent.