The BRICS meeting (Brazil, Russia, India, China) passed without fanfare, but some incident. The dollar didn't take a public hit; but the four emerging economies will try to eliminate use of the dollar in trade between them. Not a sudden death, but one of a thousand cuts, as the World Currency Watch puts it.
Predictions of the demise of the dollar have been around for years. The bailout hastens that demise.
If the dollar is no longer the reserve currency, the US cannot keep living beyond its means. As well as collapsing living standards at home, the American Empire will have to disengage. Its ill-conceived military endeavours in the Middle East are predicated on complacency about the economy, an ideologically blinkered attachment to free-trade at any costs, which the Americans probably thought would be a mechanism to democratise and westernise the world, rather than impoverish them. Ultimately the debt is about America's inability to produce enough to support its spending. Off-shoring has a lot to do with it.
How will geriatric, defence-spending shy Europe feels when the Americans take away their military umbrella?
Friday, June 19, 2009
Monday, June 8, 2009
QE liquidity goes abroad
According to Chris Woods on RGEmonitor.com, most of the liquidity from Quantative Easing will not benefit American or British consumers, but will be channelled into Asian equities, causing a bubble. Asian stock markets are on the way up, having partially decoubpled from the West, whereas the Western markets are going down.
Monday, June 1, 2009
Where the right is still going wrong
Read this argument against the strategic idiocy of preventative war and the obsession with biffing on the head every bad guy who pops up and says "boo" to the West.
The present warfare state fails to properly defend US (or Western) interests, but it is eroding civil liberties and sucking out its economic lifeblood. Not that the US has much of an economy left.
Tojacobins supposed conservatives, torture is OK, but many right-of-centre people go along with it, and vote for corporate republicans and fake conservatives.
The Republicans deserve to lose in 2012 if they continue to be dominated by the war-party. If they don't change, what is the point of the Rebublicans? They don't defend conservatism or liberty; the Obama administration is as interventionist as Bush. So you may as well vote Democrat if you want to bomb bad guys and trash your freedoms.
Cross-posted on Social Conservative view.
The present warfare state fails to properly defend US (or Western) interests, but it is eroding civil liberties and sucking out its economic lifeblood. Not that the US has much of an economy left.
To
The Republicans deserve to lose in 2012 if they continue to be dominated by the war-party. If they don't change, what is the point of the Rebublicans? They don't defend conservatism or liberty; the Obama administration is as interventionist as Bush. So you may as well vote Democrat if you want to bomb bad guys and trash your freedoms.
Cross-posted on Social Conservative view.
Sunday, May 31, 2009
Manufacturing and national strength
An article in the Telegraph today starts with the following:
"The decisive moment in securing the future of Vauxhall took place in the shadow of the Brandenburg Gate in Berlin, 64 years after Churchill tanks made by the company had helped to storm the German capital"
It was an old cliche a few years back about winning the war and losing the peace, but more specifically it shows that a nation's military strength depends on manufacturing. Britain could not have built tanks in World War II if it didn't have a healthy car industry, so that the peace-time expertise could be easily converted to war production. Manufacturing and technological development are linked. It is ironic that while we are spending billions on foreign wars, we are allowing our manufacturing base to be eroded, so limiting our military capability in the future. Not that we should be indulging in reckless, and strategically pointless foreign wars, but we need to be able to defend ourselves.
The other irony is that Vauxhall apparently makes a lot of money, but it might be political interests in Germany that skew the economics, so prejudicing Vauxhall's future. Our trade "partners" are always also our trade competitors, and this applies also to foreign ownership of British manufacturing facilities.
Nor is this about attacking the Germans, who have a lot to teach us. We should look at our own weaknesses.
"The decisive moment in securing the future of Vauxhall took place in the shadow of the Brandenburg Gate in Berlin, 64 years after Churchill tanks made by the company had helped to storm the German capital"
It was an old cliche a few years back about winning the war and losing the peace, but more specifically it shows that a nation's military strength depends on manufacturing. Britain could not have built tanks in World War II if it didn't have a healthy car industry, so that the peace-time expertise could be easily converted to war production. Manufacturing and technological development are linked. It is ironic that while we are spending billions on foreign wars, we are allowing our manufacturing base to be eroded, so limiting our military capability in the future. Not that we should be indulging in reckless, and strategically pointless foreign wars, but we need to be able to defend ourselves.
The other irony is that Vauxhall apparently makes a lot of money, but it might be political interests in Germany that skew the economics, so prejudicing Vauxhall's future. Our trade "partners" are always also our trade competitors, and this applies also to foreign ownership of British manufacturing facilities.
Nor is this about attacking the Germans, who have a lot to teach us. We should look at our own weaknesses.
Sunday, April 26, 2009
political economy vs economics
In "Global political economy: understanding the international economic order" (2001), Robert Gilpin writes (p25-6):
'For Adam Smith, political economy was a "branch of the science of a statesman or legislator", or as John Stuart Mill, the last major classical economist commented, political economy was the science that teaches a nation how to become rich. These thinkers emphasised the "wealth of nations", and the term "political" was as significant as the term "economy".'
'In the late 19th Century, [Gilpin continues], this broad definition of what economists study was narrowed considerably. Alfred Marshall, the father of modern economics, ...substituted the present-day term "economics" for "political economy" and greatly restricted the domain of economic science. '
For Marshall, Economics was a 'value-free, empirical science'. In the modern terminology of Economics today, continues Gilpin, it is 'defined by economists as a universal science of decision-making under conditions of constraint and scarcity' .
'For Adam Smith, political economy was a "branch of the science of a statesman or legislator", or as John Stuart Mill, the last major classical economist commented, political economy was the science that teaches a nation how to become rich. These thinkers emphasised the "wealth of nations", and the term "political" was as significant as the term "economy".'
'In the late 19th Century, [Gilpin continues], this broad definition of what economists study was narrowed considerably. Alfred Marshall, the father of modern economics, ...substituted the present-day term "economics" for "political economy" and greatly restricted the domain of economic science. '
For Marshall, Economics was a 'value-free, empirical science'. In the modern terminology of Economics today, continues Gilpin, it is 'defined by economists as a universal science of decision-making under conditions of constraint and scarcity' .
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