Tuesday, December 30, 2008

2008 Made History

I think 2008 made history. You think 2008 was historic. But it is hard to tell which years mark major changes in our civilization until decades, perhaps centuries later. Events that seem historic to us now may not even get a sentence in the history books of 2200, yet events we did not hear of yet may seem earth-shaking in retrospect.

When American war ships "opened" Japan in 1854 [See U.S. Bullies Japan], newspapers noted the event. No one in the U.S. and Europe, however, expected Japan to become anything other than another subjugated Asian nation.

This year Barack Obama was elected President of the United States, and George W. Bush became the most unpopular American President since Abraham Lincoln. [Honest Abe won the 1860 election with only 40% of the popular vote, and in 1864, even with the Confederacy not voting, he won the election with only 55% of the vote.]. Conversely Herbert Hoover won 59% of the vote in 1928; no one foresaw the economic unraveling of 1929-1933.

This week, to cap off what most consider to be the worst year in American history since maybe 1932, Israel launched a large scale air attack against Palestinians confined to the Gaza Strip. This because Hamas occasionally was lobbing a mortar or crude missile into occupied Palestine as an act of defiance. Why should the Palestinians not be able to use the land that has been stolen from them for target practice? Especially since their aim is so bad?

I doubt the timing had anything to do with the cease fire ending or Hamas missiles. It probably had the secret blessing of President Bush in advance. Bush will claim he can't, as a lame duck, do anything, and Barack Obama will be able to treat it as an accomplished fact. Those who hope Barack will stand for justice for the Palestinians are truly deluded. It's a brilliant strategy for Israel: enrage 1 billion Moslems, most of whom will find it easier to take out their anger on the U.S. than on Zion. Then, attacked by Moslem patriots, the U.S. will feel an even closer emotional bond to Israel.

But what is on everyone's mind is the economy. Negative overall economic growth is treated as a far greater disaster than global warming, the U.S. engineered famine in Somalia, or even the disintegration of support in Afghanistan for the U.S. puppet government.

I don't expect Barack Obama to straighten out these problems. The economy is likely to right itself during 2009 as long as the banking system is restored to soundness. Like any President, he will take credit for anything good that happens on his watch, and will be blamed by the other party for anything bad that happens. I believe Obama will turn out to be the first black imperialist U.S. President. Part of my plan for 2009 is to point this out, constantly, to the Democrats who should be in the Green Party but continue to drink Democratic Party kool-aid. But if I am wrong, I will admit it, even cheer as he withdraws all U.S. troops stationed outside our own territories.

On a positive note, the Internet continues to bind the world together. Whether that is good or bad is anybody's guess. Iranian mullahs can eye American cam girls, and American teenagers can read Al-Qaeda propaganda. We can all read what individuals think now, not just the news (or misinformation) their governments or corporate news networks want us to read.

While the U.S. wastes its soldiers' lives and what is left of its industry on subduing its colonies, China and India are making great economic, political, and cultural strides. More importantly, most trends worth watching are transnational. Even the localization, anti-globalization folk are now a global phenomena. Imagine a world in which peace, protecting the environment, and knowledge of the real world are the dominant paradigms. That would be history worth making. And that is what this Natural Liberation blog is about.

Wednesday, December 17, 2008

Adobe and the Capitalist Firing Squad

Did you hear about the leftist firing squad?

Everybody stands in a circle and fires at each other.

So now lets talk about the capitalist firing squad. They are in a circle now, blazing away, and hoping the government will intervene to

They are not firing bullets (yet); they are firing people.

I thought of this because I listened to Adobe (the software makers of Acrobat and Flash fame) management do their analyst conference yesterday. You can read my financial commentary on Adobe at Dissecting the Bull. Here I want to remind people about how selfishness can be negative even for the selfish (in contrast to the Adam Smith inspired sentiment that greed is good for society).

Adobe is immensely profitable. In the latest quarter they had profits of $320 million on revenues (sales) of $915 million. They say they would have done better if we were not in a recession.

So what are they going to do? Their profits were up 10% from a year-earlier, at a time when a lot of people and companies are in a world of hurt. But their response is to fire a large percentage of their employees. Actually, apparently the pink slips went out at the beginning of December.

Those employees will respond to their own personal situations by cutting their spending. Joining other laid-off workers, they will contribute to a macroeconomic spending downturn. Other companies, feeling less demand, will do another round of layoffs. Perhaps compelling Adobe itself to lay off more workers in 2009.

You can understand layoffs when a company is losing money. But Adobe is not the only company that is firing people just to keep its stock price up. Practically every profitable company I have paid attention to has done the same. They have absolutely no loyalty to their workers. If the past is any indicator, corporations will lay off some of their best workers and keep the ones whose main characteristics are lip puckering and back stabbing.

I believe we are actually in a fairly typical cyclical economic downturn. For the usual reasons, probably in 2009 we will realize that the bottom is behind us. Companies will start hiring again. The capitalist firing squad will go back to its usual anarchistic ways. Housing led us into the recession and will probably lead us out of the recession. Very few new homes are being built right now, and with interest rates and housing prices low, excess inventory is beginning to be sucked up (except when it was built in the middle of nowhere) [See California Housing Dynamics]

On the other hand, if the capitalists close their circle tighter and shoot more accurately than I expect, there is still a possibility that they can turn a recession into a depression. Then it will be the leftists turn to go hunting among the disillusioned and hungry.

Wednesday, December 10, 2008

If Wishes Were Horses

This blog was meant to be mainly about philosophy, but I have been writing a great deal about politics lately. That is okay, history and politics are about reality, and philosophy is (or should be) about reality. Reality is everything, but looking only at subsets of reality can send you astray.

Now let's look at some folk wisdom:

"If wishes were horses, beggars would ride."

As far as anyone can tell, this is genuine folk wisdom, not to be quoted from the Bible, the Tao Te Ching, Benjamin Franklin, The Beatles or even Ludwig Wittgenstein. According to my Familiar Quotations, it first was printed in 1670 in John Ray's English Proverbs as "If wishes were horses, beggars might ride."

Nothing quite sums up the case against prayer, subjectivist philosophies, wishful thinking, and the power of positive thought quite like this proverb.

Few people worry about not having a horse these days. Horses being the object of desire gives the phrase a vintage that could pass for wisdom even if it were unwise.

Am I saying it is best to dwell in negative thoughts, or to be in a constant state of pessimism? No, though occasional thorough examination of the negative is as instructive about reality as is occasional thorough examination of best case scenarios.

I want a philosophy that corresponds to, that accurately describes, reality. On that tiny bit of reality we call Earth, in the tiny sliver of time I will live, I don't want to waste all my time on illusions. Illusions are a part of reality we humans construct in our minds. We can learn a lot about our mental parameters by looking at illusions. In our lives the illusion/reality foreground/background sometimes inverts; we become disillusioned. Illusions are sold to people for a variety of reasons. When we are children we have little choice other than to believe the stories we are told of the world, whether they are true or not. I thought Heaven and Hell (and Purgatory and Limbo) were real when I was a young child. More complex illusions, more believable ones anyway, may fool me yet. The important thing to remember is that people may be lying to you, or they may be telling the truth, and it is up to you to decide when it is important enough to investigate a matter for yourself.

If wishes were horses, beggars would ride.

If you want to ride a horse, you need to do more than wish for it. Wishing for it does not prevent you from riding it; it might be a first step. You still need a plan and you need to execute on plan.

Are people's interpretations, and even perceptions, of reality subjective? Sure. Leaping from that to the idea that people create reality is a leap to nowhere. Reality was around before people. Even horses were around before people. People are a creation of reality, not the other way around.

Read all about the various philosophies and religions; it won't take that much time, it should not hurt you. But when it comes time to chose a philosophy, and make a life plan, and execute that plan, you should start with a firm foundation. If you turn out to be wrong, admit you are wrong and right yourself. If the popular consensus is wrong, be aware that people will think you are wrong for not agreeing with them, but keep in mind that reality is on your side. Reality is heavy; it is your best friend and ultimate refuge.

Reality is very complex, to be sure. One day the wind blows from the north, another day from the south. One day we do everything we can to keep cool; another day we can survive only by setting the world on fire. Weathermen are fine, but if you want to know the way the wind is blowing where you are, the best thing to do is just step outside and feel it.

Natural liberation might be defined as being liberated by knowing you are part of nature, and knowing what you can about nature, and acting on what you know.

See also my Philosophy page

Treasury Notes and CDs

My wife asked me why people would buy Treasuries when the equivalent CDs (Certificates of Deposit) pay higher interest rates. Or when you can just put your cash in a sack and not lose money when rates turn negative, as they did yesterday. It is a good question and the answer illuminates the current financial situation.

Short term Treasuries (Treasury bills or T-bills) are paying little, no, or even (as the headlines say today) no interest because their prices are set by auction and right now a lot of people want them. They are perceived (incorrectly) as being the safest liquid money investment there is, which attracts a lot of investors in a time of fear.

CDs at banks, savings and loans, and credit unions are nearly as liquid, and they are backed by federal government agencies up to a set sum per individual per bank. If you have more than the insurable amount (currently $250,000), you can get CD's at a variety of institutions and all of your money will be insured by the federal government.

Interest paid on CDs varies quite a bit by institution and by the amount you deposit and time until maturity, but in general today the interest rate is quite a bit higher than you would get on a treasury that is roughly equivalent. That difference in interest is what we must account for.

Suppose you manage a money market fund, equity fund, or any large, multi-billion dollar pool of money. One day clients may put in ten billion dollars, the next day they may withdraw $20 billion. You have to have enough liquidity to deal with this. You can't get a $1 billion CD one minute and then cash it back in 4 hours later. But treasuries are always being traded. You can by $10 billion or $20 billion in treasuries right now, or sell them at a moments notice. So your clients' panicked stupidity forces you to put their money where it has the lowest rate of return. Also, if you did try to get CDs instead, they would be not be backed by the FDIC. So if the bank that issued them failed, you would be out the money (unlike ordinary CD buyers).

The nature of financial panic is that most people don't panic early enough, so they panic with everyone else, and the auction pricing mechanisms in place bring ruin to them. They also don't emerge from panic early enough, so they miss the big bounces when auction prices turn around.

For those of you who are not familiar with the conventional wisdom, I should point out that:

Only suckers buy bonds when interest rates are low.

Why? Because bonds have what is called principle risk. Suppose you buy a ten year treasury note at 2% interest today. Suppose this liquidity crisis is over in 2010 and in addition has spawned some inflation, so interest rates have gone up to say 8%. You aren't scared any more so you ask your account manager to sell your totally safe $100,000 in 10-year Treasury notes for you. You check your computer the next day and your $100,000 has turned into $25,000 (more really, but I want to keep our math simple). No kidding. So, too late, you ask for an explanation.

If someone buys $100,000 in new securities they can get 8%. So to get 8% from your lousy 2% notes, they can only offer one-fourth the principle.

But could you not save your $100,000 by keeping it until maturity? Of course, that is allowed, but in the meantime it is locked in at 2% interest, or $2,000 per year, when if you could reinvest the same amount you could get $8,000 per year for the following 8 years. $64,000 versus, $16,000.

Of course, I used 8% to magnify the problem, but to any extent interest rates rise, you lose principal if you must sell.

And believe me, the Wall Street guys know how this works. Fortunately for them it is your money, they just get paid for managing it.

We are told banks don't have money to loan right now. The federal government is putting money into its pet banks (including favored institutions that were not even banks before this program began). If the money that had flowed into treasuries had been deposited at banks instead, the banks would have plenty of money to lend.

Think about it. And buy bonds when interest rates are high, so you can make a killing selling them when interest rates are low. Let the buyer beware.

And keep diversified!

Buying Treasuries directly from the government, instead of from a broker (I've done it and its easy).

Monday, December 8, 2008

Barack Obama and Woodrow Wilson

Barack Obama was not the favorite Democratic Party primary candidate of the hard-core peace advocates within the Democratic Party (and duly noting that most serious peace activists are outside the Democratic Party). Hillary Clinton, who looks to be the next Secretary of State, had voted for the illegal invasions of Iraq and Afghanistan back before Barack made it to the United States Senate. She was the presumed winner, and so kept a moderate stance on continuing the wars in order to be ready to go up against the Republican nominee. Barack kept saying "hope" and "change," and pointed to his not voting for beginning the wars (he did vote regularly to continue funding them). When he became the nominee, he not only assumed the Clinton "moderate" position but promised to send more U.S. troops to Afghanistan to make sure, by slaughtering even more Afghanis on their own soil, that our puppet government in Kabul would hold onto power.

But, so far, he can't claim to be as bad as Woodrow Wilson. President Wilson is one of the Presidents we are usually told was a "great" President. During his presidency the U.S. joined the great imperialist powers France and Great Britain in defeating Germany in World War I. We are told this was a victory for Democracy, even though Great Britain was demonstrably less of a democracy than Germany at that time.

U.S. historians, even those who might better be called propagandists, do not fail to mention that in the 1916 campaign Wilson sought re-election on the basis of having "kept us out of war," but then pushed our nation into the war (See Woodrow Wilson and the Lusitania [December 4, 2006]). In contrast the U.S. government is already slaughtering the innocents of Afghanistan, and note Barack Obama never promised to get us out of Afghanistan.

But there are lesser known aspects of Woodrow Wilson that will be interesting to compare with Barack Obama, the first non-white to be elected President of the United States. Notably, Wilson was a racist. A tried and true racist. Not a gun-toting, Ku Klux Klan racist, but very clear on the idea that Europeans were a superior people and that non-Europeans did not deserve full citizenship status under law. For instance, "The federal government showed little or no interest in civil rights, and indeed, Woodrow Wilson, a Southerner by birth, was only too eager to promote segregation in Washington, D.C." [p. 525, Lawrence M. Friedman's A History of American Law, Third Edition]

Moreover, Wilson's alleged love of peace is usually "proven" by his promotion of the League of Nations. While Wilson was too busy in Europe to devote America's energies to the War Against Asia, he did manage to remind the Japanese (and all Asians) that the Europeans did not consider them to be fully human. The Japanese were U.S. allies in World War I (because they wanted to grab German colonies in east Asia). They had defeated both China and Russia in earlier wars. They felt they were as civilized and capable as Europeans. The Japanese delegation to the League of Nations proposed that the Preamble to the Covenant include a declaration for "the principle of equality of nations and the just treatment of their nationals." Which, if it had passed, might have meant a gradual end of colonialism, and a peaceful Japan.

Woodrow Wilson was chairman of the committee hearing the proposal. Wanting to defeat it, he ruled that the motion could only be approved by a unanimous vote. Eleven of the seventeen nations on the committee voted for the proposal, six against, with the U.S. and the "democracy" of Great Britain not voting for it. So the League of Nations was an openly imperialist, racist organization. [Meribeth E. Cameron et al, China, Japan and the Powers, The Ronald Press Company, New York. Pages 377-379]

In short Woodrow Wilson was a disgrace. And the history of the Democratic party is disgraceful.

You can argue the Barack Obama situation two ways. Democrats like the idea that the past is no concern of theirs, that the party is what they say it is today. Forget about all those votes for the wars in Iraq and Afghanistan; forget the lack of protest against the U.S. paying allies to trample on the sovereignty of Somalia. Hope for a new, brighter future in which even black men, as long as they are inoffensive and have two parents with graduate degrees and somehow get themselves a degree from Harvard Law School, can become President.

Or you can ask: why would Barack Obama devote himself to the Democratic Party when he knows it is the primary racist institution in the United States? If you are going to forget the past and reform a war crimes organization, why not work within the Republican Party, which at least has the merit of having opposed slavery and segregation?

Of course, what Barack and the Democratic majority in Congress do in the next four years will at least define the true, honest, current state of the Democratic Party. Maybe it will turn out better than I think.

If this democratic republic still exists a century from now, with the same system of two-party rule, rest assured that American citizens will be told that Barack Obama was a great President. Just as they will be told that George W. Bush was a great President. No matter what Barack does or does not do in office.

Sunday, November 30, 2008

Barack Obama and James Buchanan

What kind of President will Barack Obama be? A lot depends on what happens during his term of office.

Take James Buchanan, President of the United States of America from March 1856 until March 1860. James Buchanan was a nice guy, an optimist, a uniter of a fractious Democratic Party. The two big guns, and expected Presidential nominees of that era's Democratic Party, were Stephen A. Douglas and the incumbent President, Franklin Pierce. Pierce was fiercely pro-slavery, so Douglas supporters nixed him. The passage of the Kansas-Nebraska Act, sponsored by Douglas, had led to free soilers and slavers waging a small civil war in the Territory of Kansas. Lucky James Buchanan was a minister to England when this all happened. He owned no slaves, being from Pennsylvania, but had no problem with the institution of slavery in the slave states. He got the Democratic nomination because he had done little of importance up until then.

Barack Obama was lucky enough to still be in Illinois when the initial votes on the Afghanistan and Iraq invasions took place in Congress. During the early primaries he hinted to Democratic Party grassroots activists, most of whom had by then turned against the wars (blaming it on George W. Bush, even though almost every Democrat in Congress voted for the wars), that he would have voted against it had he been in Washington. In particular Hillary Clinton was hurt in the primary contests by the perception that she was a militarist. But Obama later united the party by promising to send more troops to Afghanistan. He could be the peace candidate only because John McCain's war rhetoric was even more inflammatory.

Just as George W. Bush's Presidency came to be defined by the September 11, 2001 attacks by heroes of the Islamic revolution, James Buchanan's Presidency was defined by the Dred Scott decision. The U.S. Supreme Court in its wisdom declared that slaves could not be freed by any law passed by a state or Congress, and in fact did not even have the right to start a lawsuit in the court system. Many Americans at that time were against slavery, but were willing to leave it alone in the slave states. Those who wanted to actually end slavery everywhere, Abolitionists, were a tiny, but active, minority. The Dred Scott decision pushed many people into the Abolitionist camp, and even more people into the welcoming arms of the Republican Party.

Before James Buchanan's last day of office, several slave states had withdrawn from the United States of America. Buchanan himself was for keeping slavery and keeping all the states united. He has to be rated as the least successful U.S. President. Then again, he was dealt the worst cards of any U.S. President.

What I want to emphasize is that more often than not, events make of break a Presidency. Herbert Hoover did not campaign for office expecting a Great Depression. Harry Truman did not know that Chiang Kai-Shek would not be able to hold onto power in China. Neither Lyndon Johnson nor Richand Nixon thought that the armed peasants of Vietnam could defeat the army that defeated both the Nazis and the World War II era Japanese military establishment.

If we are lucky and he is lucky, most of the economic storm will have passed by the time Barack Obama enters office. He will have the uneventful kind of Presidency we associate with Calvin Coolidge. Maybe he will work with Congress to fix a thing or two, like the health care system.

On the other hand, it seems like the pace of change is accelerating to roller-coaster rates. Six months ago one of the biggest economic concerns was inflation; today it is inflation. No one was worried much about Afghanistan when George W. Bush took office. Climate change seems to be accelerating. Anything could happen.

And in their wisdom, with the help of Madison Avenue and a bunch of special interest groups, the American people have chosen Barack Obama to be President for four years. A man most noted for ducking controversial votes in the Illinois legislature. Maybe that is a good thing, maybe it is time for a mellow, compromising U.S. President again. It will be interesting to watch.

Wednesday, November 26, 2008

Manchuria, Manchukuo, Tibet: On Puppets and National Autonomy

Today, in 2008, China is believed by many to be headed towards having the world's second largest national economy (currently Japan has that status) in the near future, and then is headed to having the world's number one economy before the end of the century. China includes several areas that, currently or in the past, have or had majority ethnic groups that do not see themselves as Chinese. The region most Americans know about that might be characterized as occupied by a distinct national group within China is Tibet. Passions run high about Tibet. While keeping Tibet as a reference point, this essay will examine the history of the area known as Manchuria to see what lessons can be learned from it. [Article and map of Manchuria at Wikipedia]. When most Americans think of Manchuria they think of the movie The Manchurian Candidate; they know nothing of the history of Manchuria or its present status.

Free Tibet! is a slogan that has echoed around America for decades. It is one idea that unites both many on the left, who are influenced by the "New Age" component of the counterculture, with many on the right, who hate China and its communist government. While I don't agree with either of those prejudices, the Tibet national question raises the idea of national autonomy in general. It is a common idea that nation-states should correspond to national cultures. This implies that cultural nations have a right to leave a government (even if it is run on a democratic basis) and set up on their own. Of course in the United States of America it was decided by military force that no one has a right to leave our empire, not native American nations, not the Confederate States of America, not Hawaii (the exception being the Philippines, which were allowed to become an independent nation only after being conquered by the Japanese in World War II).

Free Manchuria! is a slogan that Americans have not heard of late. Yet in the 1930's it was the idea of the Manchurian independence movement, and it came to fruition briefly in the nation-state of Manchukuo. The nation of Manchukuo existed between 1932 and 1945. It was conquered by the U.S.S.R. at the end of World War II and then turned over to the Communist Chinese government, which became the government of all of China (including Tibet) after it defeated the Kuomintang government in the Chinese civil war.

Or you can take the standard, non-objective, United States of America propaganda view of Manchukuo. In this version of the world Manchukuo was not an independent state established by a Manchurian independence movement, but a "puppet state" created by the (evil) Japanese military. In particular I should point out the non-objectivity of the Wikipedia article, and it may change by the time you read it, but as I write this it reflects the U.S. view: Manchukuo.

To a large extent this is part of the standard re-writing of history by the winners. If the current U.S. ruling elite and the current Chinese ruling elite can agree on only one thing, they can agree that Manchukuo's government was set up by the Japanese. There are many problems with this view. For instance, both other major candidates for being legitimate rulers of Manchuria during this period have also been accused of being puppets. Chiang Kai-Shek and his Kuomintang party certainly were U.S. puppets by the end of their reign, if not at the beginning. Mao and the Communist government were accused (by Chiang, Japan, the U.S., and virtually everyone who was not a communist) of being puppets of the U.S.S.R.

Let us begin our dissection with a look at Manchuria before it became part of China. We call it Manchuria because the dominant tribe were called Manchus. After the Mongol empire fell apart, they rebuilt their regional empire and then went on to conquer China. The Emperor of China and most of the ruling class were Manchus (much like the Normans became the king and ruling class of England) from 1644 until 1912.

When the Manchus lost power in China in 1912, the idea that Manchuria was part of China was well-established, but it was the part that was the homeland of the people that ruled China. Between 1912 and the communist triumph in 1950 there was no single government of China. In addition to the communist government(s), "nationalist" government(s), and the governments recognized by Japan, there were numerous "warlords" (that is, historic losers) with varying degrees of power and territorial control. Manchuria was never effectively controlled by a would-be Chinese government until the Russians handed it over to the communist Chinese government. Between 1912 and the establishment of Machukuo in 1932, a complex history of Manchuria can be summed up as a period of anarchy, foreign intervention, and local warlord control. But long before 1912 the Manchu government had trouble maintaining control of its old homeland. The Russians and Japanese had intervened there with their militaries, and all the great world powers, including the United States, sought to join in Manchuria's commercial exploitation. If they did not land armies in Manchuria, it was because they could threaten military action against the Chinese, Russians, or Japanese elsewhere to get the leverage they needed. Recall that this was the era of the American Open Door Policy (read: you can't lock your door, or even close it: we can come in and rape and pillage whenever it pleases the U.S.).

According to Cameron et al, when the Japanese "created" Manchukuo, "Japanese policy had gone to great lengths to create the impression that the separatist movement which cumulated in "independence" was both spontaneous and purely local in character." [p. 453] The Manchurians chose Henry Puyi as head of state. Had the Manchu's continued as emperors of China, he would have been the emperor of all of China. Which leads to the question: is it possible that the, or at least some, Manchurians did not want to be part of China? Probably there was a purely local nationalist Manchurian movement that preferred to be allied with the Japanese rather than allied with Chiang Kai-shek, or the Chinese communists, or absorbed into the U.S.S.R. Weak people face often face less than optimal choices.

And where do U.S. historians get permission to call governments Japanese puppets? How many governments in Latin America and elsewhere could be called U.S. puppets in 1932? In 1940? Today?

The existance of Japanese troops in Manchukuo has been given as proof that it was not independent. How many so-called nations have American military bases in them today? Are they all puppet states, or is there some other criteria we should use? America had troops in China throughout the period under discussion; is this, perhaps, one reason that Chiang Kai-shek was called an American puppet. Or was it that he was married into the wealthy and powerful Chinese-American Soong family, and converted to an American religion?

I think perhaps historians had best define the term puppet very clearly, and then apply the standards of puppetness objectively, if they want their history books to be anything besides a record of national prejudice.

In any case, one of the big surprises for me, in history, is that Joseph Stalin did not just keep Manchuria once his troops took control of it. I doubt he had any real fear of the U.S., despite its possession of and proven willingness to use atomic weapons against civilians. I think it must have been a personality quirk combined with a desire to cement good relations with the Chinese Communist Party.

I would not suggest, at this point, that Manchuria should seek any autonomy within China. For exactly the same reason, I see no reason for Tibetan autonomy. The Tibetans should start calling themselves Chinese. I would think that would be more than acceptable to the government of China. I see every indication that the Chinese government wants harmonious relations with all the people within its territories. I believe the Chinese government has no desire to favor Han Chinese over other ethnic groups. I am sure that message does not always get across to everyone in China, just as the idea of ethnic equality still has non-practitioner in the United States. Tibet became part of China (back in the middle ages) because the Chinese got tired of military raids conducted by those nice Tibetan Buddhist monks. Buddhists are famous for despising women, getting a bunch of men together in one place for too long, and then going out and fighting wars. Tibet needs a peaceful culture where woman have an equal social status, which is also what the Chinese government wants (although it, too, has a long way to go to reach true sexual equality).

The area formerly known as Manchuria is today called Northeast China and has a majority ethnic Han Chinese population. Are there disgruntled people in Manchuria. You can bet there are. Does the U.S. have any right to interfere in any part of China, in any way, when it has never fixed its own problems at home? I think not.

Biography: Cameron, Meribeth E., et al, China, Japan, and the Powers, The Ronald Press Company, New York, 1952

[Main Page, U.S. War Against Asia]

Tuesday, November 25, 2008

Beware of Obama Bearing Infrastructure

Aside from keeping the Bush tax cuts for the rich, the key announced component of Obamonomics so far is heavy infrastructure spending. Given that many members of the Barack Obama economics team are Bill Clinton era globalizers and deregulators, this bears examination.

Infrastructure is a broad word. Spending on infrastructure could mean that the potholes on your street will be fixed, or you might finally get broadband Internet access. It could mean repairing old infrastructure, or building new. It is the choice of what new infrastructure is to be built that concerns me.

Infrastructure is typically roads (including bridges and railroads), sewers and utilities (including communications), and public buildings.

Infrastructure can be a make-work boondoggle, often on a Congressional district by district basis, that creates profits for a segment of the building industry but little long term public benefit. When massive amounts of money are spent, be assured the taxpayers will be buying a healthy dose of this kind of infrastructure.

Money for schools I can go for. You can't make our public schools too nice, in my opinion. They are often a long way from being close to nice.

Infrastructure can serve special interests. The developers of a new mall or housing development, for instance. It can hurt particular interests too, as when a megastore drains the economy of nearby small towns.

What most concerns me is the likelihood that a big part of any infrastructure spend will be on globalization projects, in particular the free-trade, low-wage corridors being developed under the SPP (Security and Prosperity Partnership) plan. This plan would drain the life blood of main street America to build up the global corporate elite. It is a really, really bad plan for the environment and for most American citizens. Promoted by the corporate elite of the United States, it also encompasses Mexico and Canada.

Are you worried about global warming and carbon emissions? Then you should be very wary of new infrastructure. One of the largest components of carbon dioxide emissions is seldom talked about: the creation of cement for concrete. This involves roasting limestone, which releases its carbon dioxide. Limestone itself, which is mostly calcium carbonate, is one of the great carbon dioxide sinks of the planet. When you are talking infrastructure, you are almost always talking substantial, even gargantuan, quantities of concrete. The SPP is particularly concrete intensive. As envisioned, it will use more concrete than any previous construction program in the U.S.

What the country and the world really need is a population program. That is, humans need to start consciously managing the size of the human population for long-term environmental sustainability. Building massive amounts of new infrastructure at this point in time, without a population program, is an exercise in economic or environmental suicide, or probably both.

So follow the infrastructure spending plan. Let your Congress know that if there is spending, you want it to benefit local economies, not international corporations.

Can the leaders of the Democratic Party serve the same corporate interests that the Republican Party serves? Yes We Can!

More data:

SPP (Security and Prosperity Partnership of North America) at Wikipedia
U. S. Government SPP Propaganda site

"Beware of Greeks Bearing Gifts" - English folk saying

"Put not thy faith in any Greek" - Euripides, Iphigenia

"I fear the Greeks even when they bring gifts" - Virgil, the Aeneid, Book II, line 49

Generally believe to be a reference to the story of the Trojan Horse in Homer's Iliad.

Sunday, November 23, 2008

Robert Rubin: Exposed

Many citizen activists have tried to inform the public about the criminal activity of Robert Rubin during the Clinton administration. Today, finally, the "paper of record," The New York Times in an article on why Citigroup (aka citi, Citibank, Citicorp) is melting down titled, "The Reckoning – Citigroup Saw No Red Flags Even as It Made Bolder Bets”, (dated November 22, 2008) set out the basic facts for all to see:

"When he was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.

" And since joining Citigroup in 1999 as a trusted adviser to the bank’s senior executives, Mr. Rubin, who is an economic adviser on the transition team of President-elect Barack Obama, has sat atop a bank that has been roiled by one financial miscue after another."

What the New York Times failed to mention (and the journalist had much to cover in the article, and limited space), was that Rubin and Alan Greenspan openly engaged in criminal activity. They violated their oaths of office by letting Citigroup and other banks know that they could go ahead and act as if they were already deregulated, even before Congress actually passed the laws that Rubin was pushing. Bill Clinton, of course, was complicit (as were leading Republicans and other leading Democrats including Vice-President elect Joe Biden (the Senator from Mastercard).

Rather than repeat myself, I'll refer you to my earlier postings:

Gramm-Leach, Glass-Steagall, and Bill Clinton

Housing, the Credit Squeeze, and Glass-Steagall Act

You can get some somewhat-sanitized information on Robert Rubin at Wikipedia.

Can we recycle crooks from past administrations to be Barack Obama advisors? Yes We Can!

Tuesday, November 18, 2008

A Quick, Cheap Housing and Economy Fix

Know anyone on the Obama transition team? Pass this idea along to them, see if they can indeed think outside the box:

Sell the glut of houses to immigrants. It will cost taxpayers nothing. All that Congress & the President would have to do is to authorize those who are already on the waiting list, and have the money to buy a house, to come on in.

Even administrative costs would be minimal. Those who can show the financial ability to buy a house could get temporary visas to come in (I would not want them to buy a house unseen), pick a house, and make the arrangements. When the money is transferred and the new title recorded, they get their green card and can occupy the house.

The entire surplus of American houses could be disposed of in six months to a year. Housing prices would stop falling, so people would (mostly) stop defaulting on their mortgages. Banks would be saved.

Cost to tax payers: zero.

The anti-immigrant types might scream, but we would not be letting in more immigrants in the long run. Just speeding up the current program. Quotas would remain the same, so legal immigration would slow for a while once the program was completed.

I just can't think of anything wrong with this idea, except that it does not involve giving away taxpayer dollars, and most politicians are too spineless to tack into the the anti-immigration headwinds even when the benefits to the United States of America are so obvious.

Pass the idea along.

Friday, November 14, 2008

Barack Obama and Franklin Pierce

The Barack Obama campaign has done a lot of talking about hope and change. But certainly he has brought no change to the two-party system. Compare that to the elections of the 1850's, cumulating in the election of Abraham Lincoln in 1860. Now that was change, and it was change for the better. And it required the destruction of a major political party, the Whig Party, to get done.

I have been thinking a lot about the political psychology of American citizens. One of my litmus tests is war crimes. Why do almost all Americans apply a double standard for war crimes and crimes against humanity? I have found this to be just as true of most "progressives" and liberals as of conservative Americans.

To get at the heart of that matter, I have been studying the history of relations between the United States of America and Japan (See The U.S. Bullies Japan in the 1850's). These relations started while Franklin Pierce was President of the United States. Yet like most Americans, I know little about President Pierce.

It turns out (I am garnering this from Bailey's The American Pageant, but you can look at the President Franklin Pierce Wikipedia page) Pierce was a member of the Democratic Party. He was from New Hampshire, where he had worked his way up from the state legislature to the U.S. Senate. He sounds a bit like Barack: "youngish, erect, smiling, and convivial." The Democratic Party at the time was many things, but foremost it was the party of slavery. "As a pro-Southern Northerner he was acceptable to the slavery wing of the Democratic Party." [Bailey p. 384-385]

Pierce's main opponent was the Whig Party candidate, General Winfield Scott. But the Whigs were divided internally over the slavery question, with the Southern Whigs of course for slavery and the Northern Whigs mostly against it. Scott's campaign was inept. Pierce won with 1.6 million popular votes to 1.4 million for Scott. Campaigns vague on issues are not new. The Pierce campaign slogan was "We'll Pierce 'em in '52."
More important in retrospect, but obscure at the time, other parties took about 6% of the vote. John P. Hale of the Free Soil party picked up 6% of the vote. This party would become the nucleus of the Republican Party, which would first field a presidential candidate in 1856.

Pierce's Presidency was as predatory as any in U.S. history. His Secretary of War was Jefferson Davis, who would later become President of the Confederate States of America. The Democratic Party had, as a goal, acquiring more territory where slavery would be legal. The new territories recently muscled away from Mexico would mostly become Free states. Cuba was the prime target, but ironically it would be the Republicans who grabbed Cuba later in the century. Anti-slavery Americans killed the Pierce administration's attempt to buy Cuba. However, Pierce did preside over the Gadsden Purchase.

The pro-slavery Democrats thought they won a victory in the Kansas-Nebraska Act of 1854. Instead they re-opened the slavery question that most people thought had been settled by the Missouri Compromise. Both the Whigs and the Democrats had both pro-slavery and anti-slavery wings, but the anti-slavery wing of the Democrats was weak. As the abolition of slavery increasingly became an issue, anti-slavery Democrats defected to the new Republican Party.

We like say things like, "it was President Pierce who sent a war fleet under Perry to attack Japan in 1854." But Franklin Pierce just happened to be President when the ruling elite of this nation decided Japan's time was up. Winfield Scott would have done the same thing. At least in 1852 electing a civilian, rather than a general, did not affect the level of aggression in U.S. foreign policy.

There have been some truly powerful Presidents in U.S. history, notably Abraham Lincoln and Franklin Delano Roosevelt. But most U.S. Presidents can exercise their judgment only over a limited set of options. Those options are presented by the ruling class. In Pierce's era that ruling class consisted mainly of slavers and other very wealthy business people. They wanted to exploit China and Japan; they wanted to build railroads; they wanted to advance the industrial revolution. And they did all that. They were not united in their support for the institution of slavery, or in how they saw the federal government's relationship to state governments, so they fought the War Between the States.

Wednesday, November 12, 2008

Stop the General Motors Bailout

Some members of Congress appear to be getting ready to bailout General Motors, aka GM. This would be bad for America. Allowing GM to go out of business would be a very good thing. And it GM is to stay in business, the money should come from its shareholders, not the taxpayers.

The pimps in Congress who want money for GM, and the corporate press, will be careful not to remind you of all the dividends that were drained out of GM over the last century. If even the dividends paid out in the last ten years had been kept and used to create a cash reserve, or invested in producing small, energy-efficient cars, GM would be fine right now.

How about sucking the dividends back in? Have GM send to its stockholders notices saying that if they don't send back the dividends, GM will go under. See what happens.

Think of the enormous benefits America will see if GM goes under. Ford and Chrysler have plenty of capacity to supply U.S. consumers with cars. In addition, when GM goes under, everything it owns will go for sale under the bankruptcy court. Maybe a foreign car manufacturer, Tata or Toyota or Fiat, that has more competent management will buy the whole thing. Maybe some parts of it will go here, some parts there. Maybe GM will be broken up into four or five smaller American-owned companies that are better managed, nimbler, and capable of operating in the 21st century.

So why is the Democratic Party leadership so keen on giving your taxes to a bunch of old corporate capitalist types. They will say it is jobs. That is their sales pitch. But the same money could create a lot more jobs if put into any industry other than auto manufacturing.

To be efficient, robots have to be used to run modern automobile factories. So there are two choices for your taxpayer dollars: recreating an inefficient GM with human jobs, or creating an efficient, competitive GM with robots replacing workers.

Let us just face up to the fact that when push comes to shove, the Democratic Party uses taxpayer dollars to do its campaign donors bidding. Between the United Auto Workers, the GM bosses, and hedge fund managers, Barack Obama and other Democratic Party officials were flooded with money this campaign cycle. Those donors want to be repaid. Job creation is just one Democratic Party standard marketing tool. I am not against job creation, but I know when it is a sales pitch instead of the real deal.

GM purposefully made and promoted miles-per-gallon, expensive SUVs that they knew were killing the planet (see Global Warming) and impoverishing consumers. They were happy to make us dependent on foreign oil and lobbied for drilling for oil in ecologically sensitive areas of the United States.

If GM's management deserve anything from the government, it is the gallows.

More data:

General Motors

Sunday, November 9, 2008

The U.S. War with Japan Over China: On Not Going to War with other Imperialists

Today world citizens might ask themselves: Would President-elect Barack Obama go to war with Iran? Would John McCain have gone to war with Iran if he had been elected?

We allow a natural prejudice to focus us too much, some times, on historical events such as the outbreak of war. We might learn a lot some times by asking: why was there peace?

Take for instance the entry of the U.S. into World War II, which happened shortly after the Battle of Pearl Harbor on December 7, 1941. Most Americans do not know that what Japan and the U.S. were fighting over was China, that is, who would control China. Once you know that basic context, a lot of details about the events leading up to Pearl Harbor fall into a comprehensible framework. The main theme of this essay will ask what nations the U.S. did not go to war against over China, and why. But first let me remind you very briefly about Japanese - U.S. relations leading up to Pearl Harbor.

I have covered the rocky start to the story in The U.S. Bullies Japan in the 1850's. Fast forward to the 1930's. Korea has been incorporated into the Japanese Empire. Manchuria is basically under Japanese control. The Japanese are grabbing more and more of China. The United States of America, under President Franklin D. Roosevelt, repeatedly warns Japan to leave China and its leader, Chiang Kai-shek, alone. World War II breaks out and Japan offers to enter the war against Germany if the U.S. will recognize its sphere of influence in China. The U.S. says no, Japan must give up all its possessions in China or the U.S. will declare war. The U.S. assembles an enourmous fleet at Pearl Harbor to attack Japan. The U.S. declares an embargo, a classic act of war, that means if Japan does nothing it will be unable to continue to build its defense capabilities. On July 26, 1941, Roosevelt froze Japanese assets in the U.S. Desperate, the brave Japanese sail across the Pacific and heroicly sink the U.S. invasion fleet. Oops, that sounds like the Japanese super-patriot viewpoint. How would you write that story?

Consider the standard American hypothesis that Japan started the war. This requires believing that U.S. threats against Japan were simply threats. So Japan could have stayed in China without being attacked by the U.S. You could spend a lifetime sorting through diplomatic cables and secret reports trying to sort out which side was to blame for the war. In the limited set of documents I have seen each side says it really wants peace.

Ask simpler, more illuminating question? What other countries grabbed parts of China, (or other militarily weak nations), yet the U.S. did not feel it had to go to war with them? For instance some great power grabbed the Philippines around 1900 ... wait, that was the United States of America. The world is too vast a field. So let's stick to China. The U.S. had not actually grabbed any part of China. It held to the Open Door policy, which I will dissect elsewhere.

Before the United States of America was even a nation, the national of Portugal had grabbed Macao. The Chinese then got pretty good at keeping out other imperial nations until the 1800's, when things began to fall apart. Aside from gaining the right to trade at various spots by force, the British Empire grabbed Hong Kong in 1841. The Russians grabbed Manchuria east of the Amur river in 1858. The French grabbed Indochina in 1862, the British grabbed Burma the same year. Germany grabbed the Shantung Peninsula in 1897. About the same time the French took a "sphere of influence" in the south China provinces of Kwangsi, Kwangtung, and Yunnan. In 1898 the British also enlarged their holdings. In the 20th century Russia and Japan became rivals over Manchuria. The Germans lost Shantung when they lost World War I. The establishment of a Communist government in China allied with the U.S.S.R. in 1931 was considered by Chiang Kai-shek to be a Russian encroachment on Chinese sovereignty. [On the other hand Chiang Kai-shek was considered to be a puppet of the United States by the communists and some other Chinese]

Did the U.S. threaten to go to war with France over her colonization of Indochina or semi-colonization of south China? No.

Did the U.S. threaten to go to war with Britain over her Chinese colonies and influence? No.

The U.S. did not even see fit to threaten the Russians over their holdings of formerly Chinese territories, or influence with the Chinese Communist Party.

So the mere fact that Japan had areas under its control in China, and was expanding them, is not a good explanation for Roosevelt's war threats.

I have two likely, and somewhat overlapping, ideas about why the U.S. singled out Japan for war. But let's dispose of a more obvious, but incorrect, line of reasoning.

For the most part the European possessions and influence in Japan could be relics of the 19th century. The U.S. might have singled out Japan as not being allowed to rape China because the U.S. was not allowing further aggression, but was effectively grandfathering in the status quo. However, if that were the case then after World War II was over, and a new status quo (with the British out of Hong Kong and the French out of south China and Indochina) had been established, the U.S. would have helped Chiang Kai-shek resist the re-establishment of the French and British. Instead the U.S. insisted that they be given back their old colonies.

It is generally conceded that Chiang Kai-Shek, the leader of "nationalist" China during this period, was a good friend of the United States, if not exactly a puppet. It could be argued that therefore the U.S. threatened Japan with war simply to uphold its interest in a nation that had come under U.S. political and economic influence. That may be, but consider that until the embargo was put into full effect in July 1940, there was no reason to think Japanese expansion from China would have a negative impact on the U.S. economy. In fact the opposite had been true in the past: Japanese control of Korea and Manchuria had resulted in their industrialization. Japan imported far more from the U.S. than she exported to the U.S. While Japan might have established a competitive edge in China through its puppet regimes there, it was a better economic partner both to the U.S. and to China than the U.S. and China were to each other.

[It is ironic that the U.S. in the 1850's threatened Japan with war unless it started trading, then in the 1940's force Japan into war by cutting off trade between the two nations.]

My final idea is that the U.S. attitude toward Japan was the outcome of a deeper social illness manifested in the United States: racism. Japan was not allowed to do what the U.S., France, and Britain were allowed to do because the Japanese were an Asian ("yellow") rather than European ("white") people.

There can be no doubt that the U.S. was a racist nation, controlled by its European-American majority, during this period of time. Racism was an official policy of the United States of America. It was enshrined in laws ranging from Supreme Court interpretations of the Constitution to state and local laws that discriminated against non-white persons. Franklin Delano Roosevelt was a member of the Democratic Party, a racist organization that contolled the most blatently racist southern states.

There is no way to prove that the U.S. went to war against Japan in order to stop the successful economic expansion of a non-white nation. All I can assert is that this idea seems to fit the facts better than other explanations that have been put forward. It may seem bizarre to us today, a few days after the election of Barack Obama, who is a Democrat at that. But if you look at how things were in 1941, it makes sense. The Japanese had been a threat to white pride ever since they defeated Russian in 1905. Their expansion into China could have brought to the Chinese the same economic benefits that had already been seen in Korea and Manchuria. This does not make their expansion right, but it was wrong for the same reason that any nation conquering another nation is wrong. The United States was not defending China by attacking Japan. The United States was working to assert European supremacy, including the right of Europeans to have colonies, a right that they believed no non-white nation should have.

The war ended with the U.S. occupation of Japan. This occupation had been contemplated by U.S. expansionists since the 19th century. Japan had totally changed its culture and economy in response to this threat.

Then, to add to the historic ironies, the U.S.-allied Chiang Kai-sheck lost the Chinese civil war. Leaving the U.S. occupying Japan, but short of the grand prize, China.

And, ironically, imperialism was no longer acceptable. The British were kicked out of India, for example, and the U.S. had to return sovereignty to the Japanese within a few years of the conquest. The Japanese were enlisted in the cold war against their traditional enemy, Russia.

Tuesday, November 4, 2008

Remember the Wyoming!

Remember the Wyoming! These words echo down through American history, beloved by every patriotic school child ... not.

Remember the Maine! Yes, that's it. Leading Americans, including Theodore Roosevelt, had been lusting after Cuba and other Spanish colonial possessions for decades. A U.S. battleship, taking on provisions in the harbor of Havana, Cuba, blew up and sank in 1898. Given that it was filled with munitions, this was almost certainly an accident. If the Spanish had done it on purpose, they would have said so. Some time later, when the Spanish refused to peacefully turn over their colonies to the U.S., we declared war and grabbed Puerto Rico, Cuba, and the Philippines. Since the people of the Philippines had already thrown the Spanish out and so did not feel the Spanish could give it to the U.S., we then proceeded to kill some 2 million natives to make the islands safe for U.S. sugar growers [See Philippines, U.S. war against].

What was the Wyoming incident? The first glorious victory of the courageous, manly, oh-so-patriotic but peace-loving United States Navy over the cowardly, prissy, but aggressor, inferior Japanese Navy, is a fair summation of how it is seen by U.S. historians. The Wyoming incident took place in Japanese waters; it is also called the Battle of Shimonoseki and took place in 1863.

To understand the importance of the incident (because it is remarkably similar to so many other incidents in U.S. history) one has to back up a little bit, and also see it from the Japanese point of view. A little belief in ethical behavior, and the ability to distinguish between aggression and self-defense, is helpful too. A knowledge of pirates also helps.

To the European pirate states of the 16th century, what we now call the Americas were part of Asia. Conquest of the Americas was just a stepping stone to conquest of greater Asia. Before the British colonies even became the United States of America, Britain had joined the other pirates in trading, raiding, and trying to grab Asian territories. America's pirates, though they had a sea arm, for decades concentrated on grabbing the lands laying between them and the Pacific ocean. While supposedly fighting over a small strip of land claimed by both Mexico and Texas, the United States finally succeeded in getting its full Pacific Coast possessions in 1848 [See Mexican - American War]

The practice of U.S. pirates, like British and other pirates, was to send scouting parties in advance of conquests, usually disguised as traders or missionaries.

The rulers and people of Japan first encountered the Western pirates in the 1500's. After trading with them for some time, they decided they did not like pirate behavior. In the 1600's the Japanese limited trade with the west to a single trading post for the Dutch at Deshima.

In U.S. mythology Japan was a "closed" nation. The U.S. did Japan the favor of opening the door to our wonderful western culture. There are two things wrong with this picture: Japan was not closed and pirates like doors to be open so they can rape and pillage. Japan was trading with China and Korea, and it was trading with the Dutch. Japanese scholars were kept abreast of pirate politics and science by the Dutch. During the American Revolution, since they pirates they were most afraid of were the British, they cheered for George Washington. In the early 1850's two books about the United States of America were published in Japan, Meriken Shinshi and Amerika Soki. [China, Japan, and the Powers, p. 197].

There is no law that individuals or nations have to trade with any particular other individuals or nations. The "free" part of "free trade" means it is optional, in contrast to "forced trade." Japan had enjoyed a historic 250 years of internal and external peace in 1850. Her economy had developed and her population had grown. Her once-feared Samurai warrior class had taken up poetry, flower arranging, and local trade. Japan had some primitive cannon to defend her ports against pirates, but that turned out to be insufficient.

What Commander Perry brought from the U.S. to Japan in 1854 was not a better religion, or goods that the Japanese needed, but bigger cannon. To the Japanese, Perry's ships were big steamships armed with weapons of mass destruction, which Perry demonstrated (they had seen such guns demonstrated already by other pirates) and threatened to use. More important, Russian, British, and French pirates had these weapons, and the Koreans and Chinese were trying to acquire them. The Japanese Shogun and his advisers decided that they needed these new weapons if only to defend themselves. Under threat of violence, they signed the Treaty of Kanagawa which gave the U.S. pirates the right to take on provisions and trade at Shimoda and Hakodate.

The pirate nations, sensing weakness, began their systematic plundering. This may seem like minor plundering, under cover of some trading of goods, in retrospect, but it was minor only because Japan was distant and the pirates were pretty busy plundering India, Japan, China and, well, just about everywhere. The Industrial Revolution allowed the pirates to build really big pirate ships with really powerful guns very quickly, so it was just a matter of time before they would overrun Japan unless the Japanese came up with a workable defense plan. The basic Japanese plan was: minimize the piracy, maximize learning the methods of the Industrial Revolution.

In 1863 the Emperor Komei believed the Japanese were strong enough to ask to be left alone again. He ordered the expulsion of the pirates. The pirates, naturally, did not like that, and being pirates and pretty good soldiers decided they would show the Japanese that they were not ready to be treated as a first class western, that is pirate, nation.

The Japanese still mostly had medieval style cannon, but they had three small steam-powered war ships (ironically, made in the United State). As per the Emperor's orders, they tried to drive off the pirates, notably the U.S. flagged Pembroke (named, appropriately, after a college that trained high-ranking women pirate molls). The Pembroke escaped without casualties, not being equipped to take on the Japanese steamers.

The USS Wyoming was well equipped. It was nowhere near the size of the full-scale battleships in the U.S. fleet at the time, but those ships were fighting the Civil War (a sort of temporary falling out among the American pirates). The pirate captain was David McDougal. The Wyoming was almost 200 feet long, 33 feet wide, 15 feet deep and weighed nearly 1500 tons. It had sails, but it main form of propulsion was a steam engine turning a propeller. She sported 2 pivoting Dahlgren cannons with 11 inch bores and modern explosive shells, at that time the biggest gun in the U.S. Navy. She also had a 60 pounder and three 32 pounders. [China, Japan, and the Powers, p. 202-203]

To make a long story short, she wiped out the three smaller, more lightly armed Japanese vessels. Many of the Japanese shells hit the Wyoming, and she suffered five pirates killed and six wounded.

The pirate nations then ganged up on the Japanese. A fleet of French, British, Dutch, and American war ships attacked the forts in the strait of Shimonoseki on September 5, 1864 and destroyed them. The Japanese decided they were not yet ready to defend themselves against the pirates. So they signed the Convention of Shimonoseki, agreeing to give the pirates a ransom of $3 million and, of course, allowing the pirates to continue their "trade." [p. 203-204]

"Those who do not remember history are bound to repeat it." Those who want to repeat history try to make sure it is not remembered, at least by their potential victims.

More data:

The United States War Against Asia


China, Japan and the Powers by Meribeth E. Cameron, Thomas H. Mahoney, and George E. McReynolds. The Ronald Press Company, New York, 1952.

Sunday, November 2, 2008

China Should Lead the World

The United States has forfeited its crown of economic leadership. The relative economic position of the U.S. in the world has been eroding for decades. Yet instead of buckling down and doing productive work to contribute to the global economy, the government, financial institutions, and people of the United States have too often behaved like a profligate, decaying aristocracy. Capturing money through speculation, rather than earning it through productive activities, has become an American way of life. Banks went off mission, mortgage brokers operated with the mindset of organized criminals. Ordinary Americans bought houses as financial speculators, rather than as homes for settling in communities of honest, productive people.

The Chinese are in a position to take specific actions that will get the world, including United States citizens, out of the current mess. To understand that their motives could be cooperative, rather than aggressive, you need to understand a bit of Chinese history and culture.

Most economists believe that as late as the year 1800, China had the world’s largest economy. The period from 1800 until about 1950 was a terrible one for most Chinese. The Manchu government had become corrupt and inept, from top to bottom. Its military had become a mere paper army, so first the British, then other Western privateer nations tore into China like a wolf pack into a flock of unprotected sheep. The British introduced and promoted the use of opium, draining money out of China. After about 1900 various reforms were tried, including those introduced by Sun Yat Sen, Chiang Kai-Shek, and the Kuomintang Party. But the combination of civil war and then invasion by the Japanese combined to endow China with one of the world’s most backward economies by the end of World War II in 1945.

Whatever else you may not like about Mao Zedong and the early rule of the Chinese Communist Party, in the first few decades after 1948 they pushed the wolves away and made the Chinese economy largely self-sufficient. State planned economies may have their negative aspects, but they have many positive aspects as well. Finally, in the 1980’s, a balance was struck between private initiative and state supervision that allowed the ancient economic wisdom of China to re-emerge. By the late 1990’s the rest of the world had taken notice of this Chinese resurgence.

The Chinese people, as a whole, have not yet become economically decadent. They save more than they earn and they put a great deal of energy into making a better future for their children. The current Chinese government is surprisingly flexible and insightful, despite being called a dictatorship by the West. Partly this harkens back to the centuries-old Chinese tradition that a good government is not a pack of predators, but a civil service for all the people. While there are many particular Chinese practices I do not like, the same is true of particular American practices, so I will leave those specific issues to other essays.

When China still had a strong economy, in the 17th century, the Emperor allowed trade to begin with European nations (starting with the Portuguese) despite the fact that he believed his nation was economically self-sufficient. “The official view of foreign trade was that the barbarians came as humble petitioners in great need of Chinese goods, and were benevolently permitted to secure them on Chinese terms.” [China, Japan and the Powers, M. Cameron et. al., p. 52]

Today China’s economy has grown rapidly for years. China is an exporting power, but it produces far more goods and services for internal consumption than it exports. Because of conservative monetary policy by the government and the high savings rate of businesses and households, China as a whole has a great deal of money to invest, much of it in U.S. dollars.

American politicians and the press complain that China is somehow economically abusive because it runs a large trade surplus with the United States. But on the whole the annual trade surplus of China was only $32 billion. Taiwan, Japan, and South Korea all export more goods to China than does the United States. Because so many American corporations have moved formerly American factories to third world countries including China, U.S. exports are not what they would have been otherwise. Yet people also forget that as a whole U.S. exports are still more valuable than China’s. U.S. exports in 2005 were $819 billion; China’s were “only” $593 billion. [Figures are from 2007 Pocket World in Figures by The Economist]

The U.S. certainly needs economic, political, and social reforms on a large scale; adjusting to any such reforms will result in some difficulties. But in the meantime the Chinese government and businesses can take some actions that will make the world economy more sound. This will be good for China because the Chinese economy is no longer isolated; it needs the rest of the world as much as we need China.

China needs to purposefully start buying more goods from the United States. This would start a beneficial cycle for both countries, and for the global economy, that could get us through the transition to a production-based prosperity in the U.S. that would replace the failing finance-based pseudo- prosperity of the last 20 years.

China buying more U.S. goods would, of course, narrow the trade deficit between the two nations. It would stimulate U.S. based production and jobs based on production rather than consumption. It would improve the Chinese economy as long as the purchased goods were productivity enhancing. A stronger U.S. economy would, in turn, certainly buy even more goods from China.

I will not pretend that all Chinese people are good and wise, or that its government is always right. On the other hand, the Chinese have governed themselves, mostly successfully, for over 2000 years. For the most part China’s military has been used for defense, not for offense. By stepping up now the Chinese can establish a new style of world leadership. The style should be based on cooperation and harmony, not by war, rapacious business practices, and backstabbing.

I must emphasize that the people of the United States cannot simply rely on Chinese leadership. We must reform ourselves. We need to steer our brightest people to productive occupations, away from Wall Street. We need to tax financial transactions, which are currently untaxed. The citizen-voters need to elect representatives who are determined to have genuine reform. We do not need a larger assortment of economic bandages. We need a society where human values and economic values are in harmony.

We need a world where human values and economic values are in harmony.

Wednesday, October 29, 2008

Israel, Pope Pius XII, and the Holocaust

There is currently a controversy, or renewal of a controversy, about the role of Pope Pius XII and the Jews in during World War II. It is usually posed by mainstream accounts as: did Pius XII do all he could to save the Jews from the Holocaust? Since the current Pope, Benedict XVI, was a member of the Nazi youth organization and is trying to get Pius XII qualified as a saint, now is a good time to get the facts about Pius XII.

"Politics makes strange bedfellows." Here I find myself siding with the State of Israel, whereas I am usually pro-Palestinian (the Palestinians have nothing to do with this particular controversy). Israel, and doubtless many Jewish organizations, don't want Pius XII canonized.

Pius XII, before he became Pope, was the Vatican Secretary of State. Born Eugenio Pacelli, as Cardinal Pacelli he was the right-hand man to Pius XI. To understand Pius XII you have to understand Pius XI, who chose to promote Pacelli to the second highest rank in the Roman Catholic Church.

I think it is fair to say that Pius XI, who became pope in 1922, was the architect of fascism. Of course this is a controversial hypothesis, and can be argued against on a number of fronts. Benito Mussolini would be the other candidate for the title. But it was Pius XI who made anti-Communism the first priority of the Catholic Church. Under the banner of Anti-Communism (and the Church was also openly against democratic forms of socialism, and even capitalist forms of democratic government), Pius helped first Mussolini, then other fascist leaders come to power. I know that is a shocking assertion to most people, but it is not difficult to paint that picture once the facts are at hand. First, however, I want to relate this to antisemitism and thus the Holocaust.

Adolf Hitler is usually portrayed as the architect of the Holocaust. His own antisemitism, in the consensus histories, is attributed to anti-semitic cults that he encountered as a young man living in Vienna. However, this does not hold up under analysis.

Hitler was born a Catholic (See Hitler's Catholicism) and was raised as a Catholic in a Catholic state, the Austro-Hungarian Empire. Antisemitism in Austria was rooted in the Catholic Church. There was a close alliance between the Hapsburg emperors and the Church, which ran the education system under the tender mercies of the Jesuits. When modern ideas began to penetrate the empire in the 19th century and some representative government was allowed, an Austrian Catholic Party (Later the Christian Social Party) was formed, with the Church's blessing. Because the Church itself was be abandoned by so many citizens in the empire, the party's leader, Karl Lueger, hit upon antisemitism as the primary selling point.

The antisemitism of the Holocaust grew out of the antisemitism promoted by the Catholic Church throughout its history. It became enshrined as a principle of fascist government because the Church wanted its prejudices to be backed by the power of the state.

To consider the idea that Pius XI was the architect of modern fascism, see the following essays (they are in linear order):

Pius XI and the Rise of Benito Mussolini
Pius XI and the Rise of Adolph Hitler
Pius XI and the Rise of General Franco
Pius XI, the Rise of Petain, and Fascist Vichy France

Pius XI and his Secretary of State were deeply involved in promoting fascism in other nations, notably Poland, Czechoslovakia, and Austria as well.

So when Cardinal Pacelli became Pope on March 2, 1939, he had been part of setting up a series of fascist regimes in Europe. Fascist movements, mostly but not exclusively Catholic, existed in many more nations of the world, including in the United States. He was a gung-ho anti-communist who believed that fascist dictators were the best bulwark against atheist communism, and against all rival creeds. Better still, except for Hitler, who had a large Protestant Christian population to deal with, all the dictators made the Catholic Church their exclusive religious partner. Cardinal Pacelli had never spoken out against anti-Semitism. He did not even speak out against mass-murder of non-Catholics, which had just been carried out by the Spanish fascists under General Francisco Franco. Here's what he said:

"With great joy we address you, dearest sons of Catholic Spain, to express our paternal congratulations for the gift of peace and victory, with which God has chosen to crown the Christian heroism of your faith and charity ... As a pledge of the bountiful grace which you will receive from the Immaculate Virgin and the Apostle James, patrons of Spain ... we give to you, our dear sons of Catholic Spain, to the Head of State and his illustrious Government, to the zealous Episcopate and its self-denying clergy, to the heroic combatants and to all the faithful, our apostolic benediction."

That said, I don't think that Pius XII agreed with the technical details of Hitler's extermination of the Jews. Hitler saw the Jews as not just a religion, but as a race of people. Pius XII and the Catholic Church had a long history of giving Jews (and other non-Catholics) the choice of conversion or death. I believe that if Pius XII had run Hitler's concentration camps for Jews he would have gone to great lengths to convert them to Catholicism. Hitler did not give the Jews that opportunity.

You might say that Pius XII does not sound like much of a saint, but you are using your own definition of a Saint, not that of the Roman Catholic Church. There are many Saints who were mass murderers. As long as they killed non-Catholics, with the idea in mind of converting the survivors to Catholicism, they are considered to be heroes of the church.

Sunday, October 19, 2008

You Are Getting Warmer

Have you begun to suspect that neither the Democratic Party nor the Republican Party is going to take steps significant enough to halt global warming?

You are getting warmer.

Have you begun to suspect that trading one war crimes organization, the Republican Party, for another, the Democratic Party, is not going to prevent war?

You are getting warmer.

Has the economic crisis got you wondering just how much stupidity and cupidity human beings are capable of?

You are getting warmer.

Do you live in one of the many areas of the United States that has suffered through a drought since the year 2000?

You are getting warmer.

Has the increased cost of food and gas, combined with your boss telling you not to expect a raise this year, made you suspect that the system is rigged against people like you?

You are getting warmer.

Have you heard that La Jolla California, one of the most beautiful places on earth, is having all of its vegetation eaten by a "stick insect" that originated in India? Have you noticed similar changes in your area on those rare occasions when you closely observed the local flora and fauna?

You are getting warmer.

Do you suspect that there is no humanoid God, just the Natural Universe?

You are getting warmer.

Are you beginning to suspect that in order to save yourself, your friends, and your family, drastic action, maybe even rebellion, has become a necessity?

You are getting warmer.

Maybe it is time to start thinking about Natural Liberation.

Monday, October 13, 2008

Strange Securities Auctions

I have written in the past, mostly at Dissecting The Bull, about the problem with pretending markets are efficient pricers of goods when prices are set by auctions. The recent financial meltdown has given many real world examples of this, but they are difficult to explain to people who are not familiar with stock and bond pricing, much less derivative pricing. So I have made up an imaginary example that encapsulates, in a dramatic way, a particular type of auction malfunction (if by malfunction we mean pricing that veers from free market ideals). I'll walk you through the example, then relate that understanding to selected current economic and financial events.

You hear about an auction and it sounds like you might want some of items in it, if the prices are right. The auctioneers will take only cash, so you put together what you have, say $55. You get stuck in traffic, so you arrive late. Outside people are already boasting of what great bargains they won. You hurry in.

The auctioneer, "the next item is a bundle of $1 bills, 100 of them." You think it is a strange item to auction: it is clearly worth $100 [assume these are not bills of value to collectors, or counterfeits, just ordinary $1 bills]. No one makes an offer at first, because everyone says assumes that it will be bid up to just short of $100, so bidding is a waste of time. But the tension builds and you decide why not, and open at $10. At that point the bidding goes quickly up to $29, then stalls. You offer $30. No one else bids against you. You win the $100. You pay $30 for the $100 and have $70 at the end. Meanwhile the auction has ended.

How could that happen (aside from the fact no one would auction off actual money like that)? Everyone else had run out of money. The next richest bidder in the room only had $29. It is your lucky day.

Translating this imaginary excursion closer to reality, now suppose that the item you bid $30 on and won was a mortgage bond worth $100. It really is worth $100, because the mortgage backing the bond is sound and will pay $100 over time. You win the auction not because the bond is worth $30, but because there is not enough cash to efficiently price the auction. Free market ideals have broken down.

Lately, almost no one has wanted to participate in auctions of at least two types of securities, mortgage-related bonds derivative securities and auction-rate securities.

There are two basic reasons there has been little bidding for weeks now: fear and lack of cash to bid with. The kind of institutions that can play this sort of game were all suddenly short of cash, and wanting to auction off what they could for cash, rather than using their precious cash to buy more securities. But no one else knows how to price the securities. For instance, it is difficult to find out which particular houses correspond to which particular mortgage bonds; linking the houses to derivatives is even more complex. So it is not exactly like buying a bag of $1 bills, if you just start buying a bunch of bags without looking in them. It is like buying an unopened bag of $1 bills and moths. It might have $100 of usable bills in it, or it might be all moths, or anywhere in between.

This is a problem for the government bail-out program; is the government going to look in each bag before it uses taxpayer money to buy it, or is it going to guess about the value of huge groups of bags using sampling techniques.

In free market theory prices are supposed to emerge in an efficient manner and result in efficient allocations of resources. Putting aside that there may be (in fact, are) problems with free market economics even when pricing of commodities is efficient, in the real world the conditions necessary for efficient pricing often don't exist.

For an auction to price items efficiently, there need to be a reasonable number of bidders and a reasonable number of items to bid on. If anyone has the power to set prices, prices will be set by that person, not by the market.

Even when there are reasonable numbers of buyers and sellers, because of human nature, prices can get out of whack, as in both bubbles and Depressions. The housing market is an auction market. Two years ago there were relatively few houses compared to bidders, resulting in unrealistic, high pricing. Now the same houses are in abundance compared to bidders, so in many cases sales are either not made (because in effect the people auctioning off their houses have set a minimum bid that no one will meet) or made at well below the real value of the house. The actual cost of construction being a good surrogate for real value for new homes, and that cost adjusted for inflation and physical deterioration being a good surrogate for used homes.

The Federal Reserve has been tasked with making sure their are neither too many nor too few dollars in circulation. When there are too many dollars, they are used freely to create inflation and asset bubbles. When there are too few dollars, people are forced to sell assets at less than their real values. Free market theories pretend that the only real value is the selling price, and it a very real sense that is true. But when selling prices depend on the whim of the Federal Reserve, you might want to ask yourself: what really is true, and what is bull?

Friday, October 10, 2008

Fascism, Catholicism, and Vichy France

It is just a coincidence that I am writing more articles on the relationship between fascism and the Roman Catholic Church at a time when Joe Biden, a Catholic, looks likely to be elected Vice-President of the United States of America. Joe Biden does not strike me as religious. I am more worried that his record as a Senator seems to be mainly acting as a servant for Mastercard/Visa. He also helped broker the deals that allowed banks to combine with stock brokerage houses during the Clinton administration, a key ingredient in much of today's troubles.

I have been writing and gathering notes on the thesis that Fascism is closely bound up with the Catholic Church for decades. Then I found a used book, The Vatican In World Politics, by Avro Manhattan. I recently finished reading the book, and am now adding essays to www.iiipublishing.com using information from the book supplemented or fact-checked with more standard histories, for instance Alfred Cobban's A History of Modern France, volume 2.

Yesterday I posted Pius XI, Petain and the Rise of Fascist Vichy France. This outlines the Catholic influence on French fascism, and that means the influence of Pius XI. It adds another nail to the thesis that Pius XI was the architect of modern fascism. He and his Secretary of State (later Pius XII) and other representatives worked closely with each of the major fascist leaders (Benito Mussolini, Adolf Hitler, Francisco Franco, Philippe Petain) and many minor ones. While not all fascists were Catholics, all of the fascists who became dictators were.

Again, coincidentally, the old disputes about Pius XII failing to do much to save the Jews in fascist Europe from the Holocaust is in play because the current Pope, Hitler-youth graduate Benedict XVI, is trying to make Pius XII a saint. The mainstream coverage of the dispute is typically shallow. Pius XII was not some well-intended religious figure overwhelmed by those terrible Nazis. He was an engineer of the Holocaust, at least in the sense that he worked tirelessly during the 1930's to bring fascists to power.

It is often argued that Mussolini was not such a bad fascist, and that Hitler's persecution of the Jews went against the wishes of the Catholic Church. This is why a look at Petain and fascist Vichy France is so important. Fascism in France was an almost exclusively Catholic phenomena. Vichy France policy and practice therefore reflects the wishes of the Catholic hierarchy and Pius XII. In Vichy France the Catholic Church was the state Church. And Vichy France persecuted Jews, and everyone who was not Catholic, including non-Catholic Christians. If Vichy France did not put Jews in ovens, that had more to do with timing than with intent. Before Petain and crew could get around to doing it, the Russians were rolling the German army back towards Poland and the Allies were kicking Axis armies in North Africa and then Italy. Petain's thugs were too busy trying to kill Resistance fighters (many of whom were Jews) to build ovens.

If you want to learn more about fascism, I have gathered my essays on the topic on my Fascism main age. I'll be adding more essays there as I have time to write them. Did you know that Poland had a fascist regime before Hitler attacked it? It was also Catholic, but Pius XII decided to sacrifice it for the greater good: Hitler's promise to exterminate the atheist communists of Russia.

Where is this going? President George W. Bush accused militant Islam of being "Islamic Fascism." Leftists have accused George W. Bush of being a fascist. In this name game fascism just means "bad." There is little or real analysis added by the word. Fascism has something in common with all governments, and would-be governors: the use of force. Comparisons of any government or political groups to the fascism of Pius XI, Mussolini, Hitler, or Franco can be enlightening, but only if we know what that old fashioned fascism really stood for.