American Exceptionalism has been a topic of Presidential campaign speeches and debates recently. Candidate Mitt Romney says he believes in Exceptionalism. Candidate Barack Obama seems to prefer the term "indispensable," which is a more diplomatic term.
The United States of America is hardly the first nation to think that it is exceptional: that it is blessed by God above all other nations, and that therefore it can do no wrong. Famously the Jews, in the ancient nations of Israel and Judah, made the same claim. That did not prevent them from being enslaved in Babylon. A few centuries later the Romans kicked them out of Jerusalem. Those remaining in Palestine mostly converted to Islam by 700 A.D.
Americans have done a lot better than the Jews, so far. Our founding fathers preferred to see us as a future Roman empire, only with as a Republic. By 1776 generations of Euro-Americans and African-Americans had died in this "new" continent. The survivors were a healthy, aggressive, rapidly breeding lot that eventually got us to where we are today.
The problem with Exceptionalism is that it glosses over real causes and effects. If America is exceptional, why? Could we lose our exceptional status?
Education, in the most general sense of preferring knowledge to ignorance, was a key generator of the wealth of this nation. Many of the founding fathers were highly educated men, and among other things they saw to the founding or expansion of a number of colleges and lower schools. Federal lands were set aside specifically to finance schools in the new territories to the west. Free public schooling became a foundation of both our democracy and our economy. By the 1850's Americans were among the world's best educated people. Between 1850 and 1910 American inventors, educators, and scientists joined with workers and businessmen to create the first economy that was not powered mainly by human sweat.
In the 1990's however, the U.S. education system began slipping into a steep decline. Can America remain exceptional if it has a sub-par education system?
Look at other nations that thought they were exceptional if you want to learn a thing or two. The prior most exceptional nation before the U.S. clawed its way to the top during the aftermath of World War II was Great Britain, aka England or the British Empire.
The Brits were sure they were favored by God. Their soldiers and bullets made the idea hard to argue with. The Sun never set on the British Empire. Until it did.
A promoter of American Exceptionalism might want to ask: how did the Brits loose their exceptional status? Idiots may think a capricious God just decided to punish the Brits for some slight, but policy makers should look for real world causes.
The main obvious difference between the British Empire and the global dominance of the United States was that the Brits ruled over people through colonies, while the U.S. has largely maintained a business empire in which we depend on puppet governments to rule our "allied" nations.
You might argue that God, or macroeconomics, favors the American System over the more old-fashioned British Imperialism. But I think you would be wrong. The baton was not passed from the British to the Americans because we perfected "soft" imperialism.
America took over the British Empire, and it was a well-planned maneuver, executed over decades. We did it with what can only be called exquisite timing. We encouraged the European great nations to fight each other, and we even encouraged the Japanese and Chinese to fight each other. [As my dad, a former Marine Corps intelligence officer, liked to say: "Let's you and him fight."]
In both World War I and World War II the U.S. lent money to the belligerent nations so they could buy U.S. goods (including weapons). Then when they were weakened and indebted to us we chose a side (the Brits in both wars), went in, and with the loss of relatively few men became leaders of the victory camp. More importantly, our economy was strengthened by each war, while those of the other nations were weakened.
In particular, in World War II the Germans destroyed British and Russian factories. The British destroyed German factories. The Japanese destroyed Chinese factories, and the U.S. destroyed Japanese factories (and helped destroy German factories).
At the end of World War II, we had the factories. We had mines, and we had a vast agricultural system. We also had the atomic bomb. We did not need God on our side. We just needed the British Empire to close up shop. After India and Pakistan became independent in 1947, we really just had to use our economic power to mop up. We also mopped up most of the colonies that had belonged to the Netherlands and France, and we sent Douglas MacArthur to play God in Japan.
The Communists tried to ruin it for us, and ran some nice nationalist revolutions here and there, and even defeated America's military might in Vietnam. But America's empire gave us so much economic muscle that the Soviets just ran themselves into the ground. They sought world dominion, but could not even conquer Afghanistan. Their economy choked on their vast military machine.
The dark reality is that you have to work hard to be exceptional. It isn't a gift from the gods. If you have years of drought, your agricultural output will not be exceptional. If you teach Genesis instead of Evolution in the schools, your engineers and scientists will not be exceptional. If you don't have air superiority, your armies will not be exceptional.
And if China or Germany has more and better factories than the United States, then like the British Empire and the Dutch Empire (and Ottoman Empire and French Empire, and Spanish Empire) before us, the larger our military is, the less exceptional we will become.
Personally, I am looking forward to a Return to Normalcy.
Showing posts with label factories. Show all posts
Showing posts with label factories. Show all posts
Sunday, October 28, 2012
Sunday, July 15, 2012
Tax the American Empire
[Note: much of this article first appeared as Post-Imperial Mendocino County at MendoDay.com]
The American economy, the economic crisis of 2008, and ongoing sluggish growth, cannot be understood without first admitting that we are in a post-imperialist era.
We cannot move the economy forward again without getting out of the double-bind we are in: paying for the trappings of imperialism, without its economic benefits.
The federal government's budget is still deeply in deficit mode, yet has not provided enough stimulus to get us up to even moderate growth. So we are not really out of the crisis that swept over us starting in 2008. Food stamps and long-term unemployment benefits have staved off starvation for most citizens, but hardly amount to a long-term solution.
The idea that the United States of America ever went through an imperialist period will surprise many of its citizens. Imperialism often implies an emperor, but in our case it mainly means being able to extract wealth from foreign nations through the exercise of military and economic power.
There was no clear beginning to U.S. imperialism. Grabbing native American Indian lands was a major way of extracting wealth from outsiders even before 1776. Most historians would say modern U.S. imperialism started with the Spanish-American War in which the U.S. grabbed Puerto Rico, the Philippines, and Cuba (we later sort of gave Cuba to its local elite, although the process was not really completed until Fidel Castro came to power). Or you could go back to the Mexican-American War, in which we grabbed the northern half of Mexico.
To understand how we might revive the economy and government, we should focus on U.S. imperialism after World War II. How did we get to that happy situation? From 1929 until just before World War II the United States economy was pretty sleepy . By the late 1940s and into the 1950s the U.S. economy was bustling. Why did World War II make such a difference?
The United States has had some pretty clever leaders. Even in the 1700's many of them wished for our nation to be a Great Power like the British Empire or France. Presidents like James Polk (who grabbed California), William McKinley (Spanish-American War) and Theodore Roosevelt came to symbolize U.S. global ambitions.
It was World War I, by accident or strategy, that became the template for future U.S. success. Under President Woodrow Wilson the U.S. stayed out of the war, selling all the goods our farms and factories could produce to both sides. Then, when Russia had collapsed and Italy, Germany, France and England were exhausted, the President, under pressure from U.S. bankers, found a pretext to declare war.
It was great, World War I. Not that many American soldiers died (just 117,000), but we tipped the balance for Great Britain and France. Germany was defeated. We did not grab any territory to speak of, but we became the world's bankers while leading the world in industry.
The rematch known as World War II went even better. President Franklin Roosevelt rearmed the United States while putting the British Empire even more heavily in our debt. We let the Communists defeat the Nazis and, again, came in towards the end to claim victory and its spoils. English, French, Italian, German, Japanese and Russian factories had been largely destroyed by aerial bombardment. In contrast the U.S. had built many more factories.
As the French and British empires collapsed after the war it was U.S. factories that supplied the goods for most of the world. In the U.S., in the 1950's, most Americans who wanted one could get a job that paid well. An interstate highway system was built, suburbs were built, colleges expanded and filled. The whole imperialist deal was so profitable that even though the U.S. maintained what was by far the world's most expensive military establishment, paying for it detracted little from the economy.
The Sixties were even better, with John F. Kennedy (a Democrat) engineering the biggest tax cuts for the rich in American history. Even those Americans whose race, geographical location, or just plain laziness and incompetence had prevented them from sharing in The American Dream were soon helped by President Lyndon Johnson's Great Society social programs.
The prosperity might have gone on for centuries, but America's capitalists betrayed it. Rival gangs of capitalists pursued opportunities that turned imperialism on its head. It was profitable to keep costs for consumers high in the U.S. It became more profitable to produce the goods sold in the U.S. in other sectors of the world, certain of the "third world" nations like Mexico and Korea, then later China and Brazil. Meanwhile another gang clung to the profits of the military-industrial complex, and even added profits by whipping up a Homeland Security spending bonanza.
As a result American military, homeland security, and domestic budgets had to be skimmed from a thinning layer of middle-class taxpayers. The capitalists received tax cuts, notably special treatment for dividends and capital gains, as well as no taxes on financial transactions. Factory workers, most of them, dropped back into the proletariat, losing their middle-class incomes. Low-paid service work came to make up most of the American economy.
In classic imperialism, as say run by the British Empire from about 1700 to about 1950, the economic idea is to extract wealth from the enslaved nations. The extracted wealth is brought home, and while the rich get most of it, enough is trickled down to the middle class and proletariat to keep them happy and patriotic, or at least not rebellious. It is important to keep the cost of the military used to dominate other nations low enough so there is a net, major profit for the homeland. The Brits were very good at that. They even drafted soldiers from their subject nations and used them quite effectively. The British Empire fell because England exhausted itself fighting Germany, not because the empire itself was not profitable. At the end of World War II, for practical purposes, the Brits had mortgaged their empire to American bankers. We foreclosed.
Starting in the 1990's, and accelerating this last decade, the U.S.A. has done the opposite. You can see from our Trade Deficits that wealth has been draining from the nation for two decades. At the same time we are being bled internally by the military and homeland security industries.
Look at Afghanistan. Where's the loot? We give money to the corrupt government of Afghanistan. We give them weapons. They sell the weapons to the Taliban, who then use them to shoot at U.S. troops. We get nothing out of it. Not oil, not a market for U.S. goods, not slaves or concubines or the usual imperialist loot.
There are only two solutions. One is to tax every nation in the world that we can. That is the classic imperialist solution: give unto Obama the things that are Obama's. The plan probably would not go down very well in most countries. But they would have no choice. Look what we did to Iraq, and most nations don't have the defenses Iraq did.
Taxes should be modest and imposed gradually, so as not to shock the world economy. A 1% sales or income tax on developed allies and a 0.25% to 0.5% tax on less-developed dependents would probably work for a starter. While the rate is low, by taxing some 6 billion people, quite a bit of money would flow into the United States. It would pay for our work as the world's police, and also pay for our education, welfare, bread, and circuses.
The only other solution is to Cut the Military and Homeland Securities budget. Cut it to the size needed to defend us from Mexico and Canada. Something along the size of the New York Police Force budget.
Unfortunately we are maneuvering in is a sea of continued massive stupidity by American capitalists and both the Republican Party and the Democratic Party. Don't expect those bozos to start taxing England, Korea and Pakistan, or to reduce the military budget in a meaningful way, in your lifetimes.
Expect America to continue to decline. As the empire unravels, our homeland will unravel. To keep military muscle, we will loose economic muscle. If we keep on this course, at some point, our colossus will fall.
The American economy, the economic crisis of 2008, and ongoing sluggish growth, cannot be understood without first admitting that we are in a post-imperialist era.
We cannot move the economy forward again without getting out of the double-bind we are in: paying for the trappings of imperialism, without its economic benefits.
The federal government's budget is still deeply in deficit mode, yet has not provided enough stimulus to get us up to even moderate growth. So we are not really out of the crisis that swept over us starting in 2008. Food stamps and long-term unemployment benefits have staved off starvation for most citizens, but hardly amount to a long-term solution.
The idea that the United States of America ever went through an imperialist period will surprise many of its citizens. Imperialism often implies an emperor, but in our case it mainly means being able to extract wealth from foreign nations through the exercise of military and economic power.
There was no clear beginning to U.S. imperialism. Grabbing native American Indian lands was a major way of extracting wealth from outsiders even before 1776. Most historians would say modern U.S. imperialism started with the Spanish-American War in which the U.S. grabbed Puerto Rico, the Philippines, and Cuba (we later sort of gave Cuba to its local elite, although the process was not really completed until Fidel Castro came to power). Or you could go back to the Mexican-American War, in which we grabbed the northern half of Mexico.
To understand how we might revive the economy and government, we should focus on U.S. imperialism after World War II. How did we get to that happy situation? From 1929 until just before World War II the United States economy was pretty sleepy . By the late 1940s and into the 1950s the U.S. economy was bustling. Why did World War II make such a difference?
The United States has had some pretty clever leaders. Even in the 1700's many of them wished for our nation to be a Great Power like the British Empire or France. Presidents like James Polk (who grabbed California), William McKinley (Spanish-American War) and Theodore Roosevelt came to symbolize U.S. global ambitions.
It was World War I, by accident or strategy, that became the template for future U.S. success. Under President Woodrow Wilson the U.S. stayed out of the war, selling all the goods our farms and factories could produce to both sides. Then, when Russia had collapsed and Italy, Germany, France and England were exhausted, the President, under pressure from U.S. bankers, found a pretext to declare war.
It was great, World War I. Not that many American soldiers died (just 117,000), but we tipped the balance for Great Britain and France. Germany was defeated. We did not grab any territory to speak of, but we became the world's bankers while leading the world in industry.
The rematch known as World War II went even better. President Franklin Roosevelt rearmed the United States while putting the British Empire even more heavily in our debt. We let the Communists defeat the Nazis and, again, came in towards the end to claim victory and its spoils. English, French, Italian, German, Japanese and Russian factories had been largely destroyed by aerial bombardment. In contrast the U.S. had built many more factories.
As the French and British empires collapsed after the war it was U.S. factories that supplied the goods for most of the world. In the U.S., in the 1950's, most Americans who wanted one could get a job that paid well. An interstate highway system was built, suburbs were built, colleges expanded and filled. The whole imperialist deal was so profitable that even though the U.S. maintained what was by far the world's most expensive military establishment, paying for it detracted little from the economy.
The Sixties were even better, with John F. Kennedy (a Democrat) engineering the biggest tax cuts for the rich in American history. Even those Americans whose race, geographical location, or just plain laziness and incompetence had prevented them from sharing in The American Dream were soon helped by President Lyndon Johnson's Great Society social programs.
The prosperity might have gone on for centuries, but America's capitalists betrayed it. Rival gangs of capitalists pursued opportunities that turned imperialism on its head. It was profitable to keep costs for consumers high in the U.S. It became more profitable to produce the goods sold in the U.S. in other sectors of the world, certain of the "third world" nations like Mexico and Korea, then later China and Brazil. Meanwhile another gang clung to the profits of the military-industrial complex, and even added profits by whipping up a Homeland Security spending bonanza.
As a result American military, homeland security, and domestic budgets had to be skimmed from a thinning layer of middle-class taxpayers. The capitalists received tax cuts, notably special treatment for dividends and capital gains, as well as no taxes on financial transactions. Factory workers, most of them, dropped back into the proletariat, losing their middle-class incomes. Low-paid service work came to make up most of the American economy.
In classic imperialism, as say run by the British Empire from about 1700 to about 1950, the economic idea is to extract wealth from the enslaved nations. The extracted wealth is brought home, and while the rich get most of it, enough is trickled down to the middle class and proletariat to keep them happy and patriotic, or at least not rebellious. It is important to keep the cost of the military used to dominate other nations low enough so there is a net, major profit for the homeland. The Brits were very good at that. They even drafted soldiers from their subject nations and used them quite effectively. The British Empire fell because England exhausted itself fighting Germany, not because the empire itself was not profitable. At the end of World War II, for practical purposes, the Brits had mortgaged their empire to American bankers. We foreclosed.
Starting in the 1990's, and accelerating this last decade, the U.S.A. has done the opposite. You can see from our Trade Deficits that wealth has been draining from the nation for two decades. At the same time we are being bled internally by the military and homeland security industries.
Look at Afghanistan. Where's the loot? We give money to the corrupt government of Afghanistan. We give them weapons. They sell the weapons to the Taliban, who then use them to shoot at U.S. troops. We get nothing out of it. Not oil, not a market for U.S. goods, not slaves or concubines or the usual imperialist loot.
There are only two solutions. One is to tax every nation in the world that we can. That is the classic imperialist solution: give unto Obama the things that are Obama's. The plan probably would not go down very well in most countries. But they would have no choice. Look what we did to Iraq, and most nations don't have the defenses Iraq did.
Taxes should be modest and imposed gradually, so as not to shock the world economy. A 1% sales or income tax on developed allies and a 0.25% to 0.5% tax on less-developed dependents would probably work for a starter. While the rate is low, by taxing some 6 billion people, quite a bit of money would flow into the United States. It would pay for our work as the world's police, and also pay for our education, welfare, bread, and circuses.
The only other solution is to Cut the Military and Homeland Securities budget. Cut it to the size needed to defend us from Mexico and Canada. Something along the size of the New York Police Force budget.
Unfortunately we are maneuvering in is a sea of continued massive stupidity by American capitalists and both the Republican Party and the Democratic Party. Don't expect those bozos to start taxing England, Korea and Pakistan, or to reduce the military budget in a meaningful way, in your lifetimes.
Expect America to continue to decline. As the empire unravels, our homeland will unravel. To keep military muscle, we will loose economic muscle. If we keep on this course, at some point, our colossus will fall.
Wednesday, February 15, 2012
Unfair China
Hating the Chinese has become as American as apple pie. It unites Democrats, Republicans, independents, and even more than one Green Party member I have talked too.
But, we are asked to pretend, we are not prejudiced against Chinese people. It is the Chinese (communist) government's economic policies that are driving us, the best, sweetest, and least prejudiced people on earth, we Americans, to do battle with the Chinese.
All we demand is fairness. We just want some stability. We don't want to work hard for our pay. We are not used to it. So the Yuan (or Renminbi, if you use the more modern term for Chinese money) has to float. And it has to float upward against the American dollar. It has to make American goods cheaper in China, and Chinese goods more expensive in the U.S. Like an iPod, iPad or Mac could possibly be more expensive.
A quick recap the history of relations between the United States of America and China is in order. China was the wealthiest and most civilized nation in the world in when English settlers first started grabbing land in what is now the U.S.A. in 1607. On the other hand, the Chinese ruling class were mostly complacent and uninterested in modernization. Viewing (correctly) Europeans as predator-pirates, the Chinese allowed only limited intercourse during the 17th and 18th centuries. Americans started trading with China while we were still part of the British empire, but the trading was trivial to the Chinese.
In the early 1800's the imperial nations began seeing China as a great prize to be devoured, but its government was still strong enough to repel the predators. U.S. trade with China increased, and U.S. merchants participated in the illegal opium trade. That is where the Delano side of President Franklin Delano Roosevelt got their fortune (the Forbes fortune, too.) The Chinese government clamped down on opium, which was destroying Chinese culture and its economy. Parliament, the device by which a small number of British voters bullied half the world, resulted in the launching of the Opium Wars by Britain, which China lost. Britain got Hong Kong and America and other nations got the right to "free trade" with China.
The Chinese next resisted being gobbled up by America and friends with the Boxer Rebellion. The U.S., Japan, Britain, France, Russia and Germany ganged up on China and essentially got control of the Chinese government. Eventually the Chinese people rebelled, overthrew the monarchy, and formed a Republic. But America and friends preferred a weak China, and so backed a number of warlords, most notably Chiang Kai-shek.
Starting in the 1920's Japan, which had been more successful at resisting U.S., British and Russian bullying, decided that the only way Japan and all Asia would not get gobbled up would be by Japan taking the leadership of Asia. The Chinese warlords sponsored by the Euro-American imperialists did not like that idea. The Japanese, unfortunately, resorted to force to install modern, enlightened (capitalist), pro-Japanese regimes in China. This eventually led to open, declared war between the U.S. and Japan. Chiang Kai-shek's warlords also fought Japan, as did a new Chinese government set up in north-west China by the Communist Party.
America won the war, but not before Japan had encouraged most east Asian nations to declare independence. The Philippines declared independence from the U.S., Vietnam from France, Indonesia from the Netherlands, and Burma and India from Britain.
As the Japanese withdrew from the mainland, a civil war erupted between the Communist Party and the U.S. financed warlord Chiang Kai-shek. The Chinese won the civil war, but by then the Chinese economy was totally wrecked. In a mere 100 years China had gone from still being one of the wealthiest nations in the world to being one of the poorest. Chiang, helped by America, moved China's silver and gold, as well as what was portable of its industries, to the island of Taiwan, where he set up a dictatorship protected by the U.S. navy.
It took the Chinese decades to rebuild their nation. The U.S. refused to trade and pretended Chiang still ruled China. Although Nixon made peace in the 1970's, only in the 1990's did the Chinese start to have sustantial trade with the U.S. The U.S. gave the Chinese no breaks. We treated trade as a form of economic warfare, extracting as much from the Chinese in return for whatever modern technology we were willing to export to them.
So what do the Chinese owe the U.S. What is the standard of fairness that should apply to this situation?
Here's what I think: Americans have not been being screwed by the Chinese. We have been being screwed by Americans, by our own capitalists and their political subsidiaries. They want to direct our anger at the Chinese when it should be directed at ourselves and our economic lords.
So now the exchange rate of the yuan does not float against the dollar, and we buy more from China than they buy from us. First of all, as former Secretary of State Cordell Hull used to pontificate, global free trade can't be balanced on a bilateral (2-nation basis). Goods flow in all directions. China does not have a trade surplus with every nation. Because the U.S. economy is now so consumer oriented, we suck the blood of the entire world. China is just the assembly point, where quick hard-working hands turn raw goods and parts from the global economy into crap that you buy at Walmart because you don't have the good sense to save and invest your money.
If the yuan floated, then China would have a small lower trade surplus with the U.S. They would not take in so many billions of U.S. dollars. They would not buy so many U.S. government bonds to get rid of those dollars. The interest rates on bonds would go up, and the federal government would be stuck paying a lot more interest. So the national deficit would get worse, unless government spending were cut back further. In any case, that won't be good for the U.S. economy.
The way to balance things out with China is for the U.S. to compete on a fair basis, rather than whining and asking for special treatment. We could also increase import duties, which would lower demand for Chinese goods and help the U.S. Treasury. We could teach our children math and engineering and business practices instead of English, Art, and Film Studies.
Oh, things are pretty fair already. We could compete. But our American capital has been concentrated in the hands of a very few people because we no longer have meaningful taxes on inheritances and capital gains. This wealthy elite has become very lazy. They do the easy thing, aided by a bunch of well-paid technocrats, advisors, and lawyers. They invest in China or developing nations when they could invest in the U.S.
I just don't get how we can blame the Chinese for Steve Jobs and crew's failure to invest in the U.S. We don't even have to destroy America the Beautiful to create new factories. There is plenty of empty factory space in Detroit and other American cities.
Let's renovate those empty factories, and stop blaming the Chinese for our problems. I think the success of the Chinese is a great thing for humanity. They are a very civilized people, so far. If they become the number 1 economy in the world again, it will probably make the world a better place.
But, we are asked to pretend, we are not prejudiced against Chinese people. It is the Chinese (communist) government's economic policies that are driving us, the best, sweetest, and least prejudiced people on earth, we Americans, to do battle with the Chinese.
All we demand is fairness. We just want some stability. We don't want to work hard for our pay. We are not used to it. So the Yuan (or Renminbi, if you use the more modern term for Chinese money) has to float. And it has to float upward against the American dollar. It has to make American goods cheaper in China, and Chinese goods more expensive in the U.S. Like an iPod, iPad or Mac could possibly be more expensive.
A quick recap the history of relations between the United States of America and China is in order. China was the wealthiest and most civilized nation in the world in when English settlers first started grabbing land in what is now the U.S.A. in 1607. On the other hand, the Chinese ruling class were mostly complacent and uninterested in modernization. Viewing (correctly) Europeans as predator-pirates, the Chinese allowed only limited intercourse during the 17th and 18th centuries. Americans started trading with China while we were still part of the British empire, but the trading was trivial to the Chinese.
In the early 1800's the imperial nations began seeing China as a great prize to be devoured, but its government was still strong enough to repel the predators. U.S. trade with China increased, and U.S. merchants participated in the illegal opium trade. That is where the Delano side of President Franklin Delano Roosevelt got their fortune (the Forbes fortune, too.) The Chinese government clamped down on opium, which was destroying Chinese culture and its economy. Parliament, the device by which a small number of British voters bullied half the world, resulted in the launching of the Opium Wars by Britain, which China lost. Britain got Hong Kong and America and other nations got the right to "free trade" with China.
The Chinese next resisted being gobbled up by America and friends with the Boxer Rebellion. The U.S., Japan, Britain, France, Russia and Germany ganged up on China and essentially got control of the Chinese government. Eventually the Chinese people rebelled, overthrew the monarchy, and formed a Republic. But America and friends preferred a weak China, and so backed a number of warlords, most notably Chiang Kai-shek.
Starting in the 1920's Japan, which had been more successful at resisting U.S., British and Russian bullying, decided that the only way Japan and all Asia would not get gobbled up would be by Japan taking the leadership of Asia. The Chinese warlords sponsored by the Euro-American imperialists did not like that idea. The Japanese, unfortunately, resorted to force to install modern, enlightened (capitalist), pro-Japanese regimes in China. This eventually led to open, declared war between the U.S. and Japan. Chiang Kai-shek's warlords also fought Japan, as did a new Chinese government set up in north-west China by the Communist Party.
America won the war, but not before Japan had encouraged most east Asian nations to declare independence. The Philippines declared independence from the U.S., Vietnam from France, Indonesia from the Netherlands, and Burma and India from Britain.
As the Japanese withdrew from the mainland, a civil war erupted between the Communist Party and the U.S. financed warlord Chiang Kai-shek. The Chinese won the civil war, but by then the Chinese economy was totally wrecked. In a mere 100 years China had gone from still being one of the wealthiest nations in the world to being one of the poorest. Chiang, helped by America, moved China's silver and gold, as well as what was portable of its industries, to the island of Taiwan, where he set up a dictatorship protected by the U.S. navy.
It took the Chinese decades to rebuild their nation. The U.S. refused to trade and pretended Chiang still ruled China. Although Nixon made peace in the 1970's, only in the 1990's did the Chinese start to have sustantial trade with the U.S. The U.S. gave the Chinese no breaks. We treated trade as a form of economic warfare, extracting as much from the Chinese in return for whatever modern technology we were willing to export to them.
So what do the Chinese owe the U.S. What is the standard of fairness that should apply to this situation?
Here's what I think: Americans have not been being screwed by the Chinese. We have been being screwed by Americans, by our own capitalists and their political subsidiaries. They want to direct our anger at the Chinese when it should be directed at ourselves and our economic lords.
So now the exchange rate of the yuan does not float against the dollar, and we buy more from China than they buy from us. First of all, as former Secretary of State Cordell Hull used to pontificate, global free trade can't be balanced on a bilateral (2-nation basis). Goods flow in all directions. China does not have a trade surplus with every nation. Because the U.S. economy is now so consumer oriented, we suck the blood of the entire world. China is just the assembly point, where quick hard-working hands turn raw goods and parts from the global economy into crap that you buy at Walmart because you don't have the good sense to save and invest your money.
If the yuan floated, then China would have a small lower trade surplus with the U.S. They would not take in so many billions of U.S. dollars. They would not buy so many U.S. government bonds to get rid of those dollars. The interest rates on bonds would go up, and the federal government would be stuck paying a lot more interest. So the national deficit would get worse, unless government spending were cut back further. In any case, that won't be good for the U.S. economy.
The way to balance things out with China is for the U.S. to compete on a fair basis, rather than whining and asking for special treatment. We could also increase import duties, which would lower demand for Chinese goods and help the U.S. Treasury. We could teach our children math and engineering and business practices instead of English, Art, and Film Studies.
Oh, things are pretty fair already. We could compete. But our American capital has been concentrated in the hands of a very few people because we no longer have meaningful taxes on inheritances and capital gains. This wealthy elite has become very lazy. They do the easy thing, aided by a bunch of well-paid technocrats, advisors, and lawyers. They invest in China or developing nations when they could invest in the U.S.
I just don't get how we can blame the Chinese for Steve Jobs and crew's failure to invest in the U.S. We don't even have to destroy America the Beautiful to create new factories. There is plenty of empty factory space in Detroit and other American cities.
Let's renovate those empty factories, and stop blaming the Chinese for our problems. I think the success of the Chinese is a great thing for humanity. They are a very civilized people, so far. If they become the number 1 economy in the world again, it will probably make the world a better place.
Monday, April 4, 2011
Michele Bachmann's Bad Divorce
I had not paid any attention to Michele Bachmann, a Republican Congressperson, until I started seeing her mentioned as a potential nominee for President of the United States. Apparently that is because I don't watch TV. She has become quite a star for the Tea Party movement, although she began her political career long before the Tea Party was organized.
Turning to Wikipedia, I found that Congresswoman Bachmann is very close to me in age, just a little over a year younger, born April 6, 1956. I always wonder with ultra-conservative people in my age cohort how they missed the basic lessons of their childhood, of the 1960s, of peace, love, and understanding. What jumped out at me in her mini-biography is that her parents were divorced and her father moved to California; she stayed with her mother. My parents did not get divorced. Perhaps because they were Catholic and the Bachmann's were Lutheran.
Divorce is still controversial in some circles. It is another of life's double edged swords. For women, without divorce there can be the pain of being stuck in an unloving, perhaps even brutal, marriage. On the other side of the blade is that with divorce a man can make promises, have children, and then, on a whim, go off cavorting with another woman. Leaving a lonely, angry woman to raise children, and like as not trying to instill in those women a hatred for their fathers and anything to do with them. David Amble, Michele's father, moved to California (where I now live).
Michele grew up in tiny Anoka, Minnesota, essentially a suburb of Minneapolis. I grew up in the suburbs of a big, but much more conservative, city: Jacksonville, Florida. If geography means anything, I should have turned out conservative and she liberal.
Another reason for the different directions was that we were on a cusp. When we graduated from high school, I in 1972 and she in 1974, the sixties were over. Some of the energy of the sixties was still present in radical politics, in music, and in art. Feminism was really just starting to get going. I felt repressed by my parents and schools, so I wanted to taste the counterculture even if it was already in decline. By 1974, combined with hating her father and divorce, probably Michele was willing to take the opportunities now afforded women, but rejected the broader implications of ideals like freedom, equality, and mutual cooperation. After graduating from a state college she headed off to Oral Roberts University, where the miraculous is real and real problems are sins.
Finally, it would be foolish to neglect my struggles with the idea of being drafted in the U.S. military and being sent off to kill the good people of Vietnam. Michele did not have to worry about that.
Obviously Michele is smart, hard working, ambitious, and loving in her own way. On the other hand, how smart can you be and pretend that there is a God, he is male, he had only one son, he crucified his own son, and he has had writer's block since he finished penning out the New Testament? Of course, religion these days is just a fantasy-role playing game. Most people who aren't insane know that it is just make-believe.
It is too bad that the political principles of the right wing of the Republican Party and especially the Tea Party are not examined rationally, but instead are colored with religious emotionalism. Unlike my mostly lefty friends I agree about some of the economic symptoms. I see the causes differently, however. We, Americans, are in a post-imperialist decline, much like England between World War I and World War II. We benefited, from about 1938 to about 1970, from national prosperity based partly on hard work and creativity, but juiced by the super-profitability of imperialism. Our industries did great because we had the whole world for a market: every other industrial nation's factories had been extensively bombed in World War II. The economic pie was growing so fast that the rich did not fight all that hard to prevent the middle class, working class, and the poor to share in the feast.
Now we waste our money on the military aspects of imperialism, but it is an economic drag on the homeland. Our capitalists wanted and got Free Trade, which was not really about trade, but about moving American factories to Mexico and China and Central American dictatorships. Now American workers are global citizens, and they don't like it.
The pyramids of business have gotten taller. A business owner with 10 employees seldom can pay himself more than 10 times what he pays an individual employee. A global corporation with 100,000 employees can easily pay its top management 1000 times what it pays basic employees, and the stockholders can still pocket plenty of loot. For Americans in the global elite, Free Trade has been a shower of gold.
We could try, again, to divide up the pie more fairly. The easiest way to do that is to increase taxes on people with high incomes, and on capital gains and dividends. Then use that money for infrastructure (including education) that benefits everyone. It could even be used for infrastructure that would make building new factories in the United States attractive to the greed-heads who control international capital. But just dividing the pie more fairly is not going to be enough [pay attention, lazy socialist friends]. Even cutting back our military establishment 90% won't be enough. IF we are going to keep a pleasant standard of living for most Americans we need to be competitive with China and India, Brazil and Peru, Europe and Arab Emirates. That means we have to upgrade our work skills and habits, especially at the low end. The idea that the state can guarantee (what would be in the developing world) a middle-class lifestyle, is not going to be viable. With the trends coming down the road the state will be lucky if it can guarantee that if you don't work you won't starve or freeze.
I certainly think we can do better than Michele Bachmann for President. But whoever is elected, the trend lines won't change unless concerted efforts are made to change them. President Obama has increased military spending at a time it needed to be cut back by 90%. He approved an extension of the rich-ride-tax-free program of his predecessor. Except for rhetoric (aimed at voting bases) and fringe issues, I see little substantial difference between Bachman and Obama. I'm not excited about either. I hope some more exciting candidates enter the race.
Thursday, October 7, 2010
Humboldt County, Localization and Imperialism
Yesterday my dear friend Kaitlin Sopoci-Belknap, matriarch of Democracy Unlimited of Humboldt County, posted this on Facebook: "At SBDC's Technology Bootcamp for biz owners and one of the 1st recommendations we're getting is to outsource and hire "virtual assistants" in India for $4/hr or Georgia for $8/hr. And bonus, they can be paid as contractors - so no benefits! Hmmmm."
I have complained about outsorcing in the past, and have actually had work I did, and got paid well for, outsourced to India. But since Kaitlin already expressed that outrage, I took it to the next level, commenting: "An Internet downside for U.S. workers for sure. After 65 years of being privileged workers inside an imperialist economy, we Americans are being tossed back into the international proletariat. Who woulda thought." Lots of other people left interesting comments too.
Of course, a person could offer their services in the $4 to $8 an hour range in Humboldt County. You can't be someone's employee at that scale, it violates the minimum wage laws, but you can freelance for as little as you want. And as long as you don't get sick or have a family to support, and know how to live very frugally, you can live on that scale even in the U.S. I know, I have done it, but I hope to never do that again.
American workers' share in the enjoyment and production of American wealth has had a complicated history. Indentured servants and African slaves obviously produced much but consumed little. The vastness of virgin lands "liberated" from Indian tribes meant family farms could do pretty well until about 1870. Then we had the period of robber capitalism until the Great Depression. A lot of people think the Democrats and New Deal paved the way for the Great Prosperity of 1940 to 1970, but a lot of variables were involved.
Americans forget, or do not know, that two of the world's most historically evil people, Adolf Hitler of Germany and Joseph Stalin of the U.S.S.R. (Russia), nevertheless deserve a lot of credit for ending the Great Depression. Because the U.S.S.R. was communist, its economy continued to grow through the 1930s. Germany had a very bad economic meltdown, which is one reason Hitler came to power, and he basically ordered everyone back to work, so Germany recovered from the Depression years ahead of the United States.
Then World War II came along. Germany destroyed Russia's factories. Their bombers tore up Great Britain pretty well too. German and American bombers destroyed Germany's factories. China was pretty well destroyed, and Japan's factories were bombed, in some cases vaporized, by the U.S.
Come 1946, almost all of the factory capacity of the world was in the United States, and a great deal of what was abroad was owned by American capitalists. Making wage concessions to union, or even non-union, workers in the U.S. was no big deal. Buy peace at home, extract wealth from abroad.
I believe that workers should share the wealth that they produce and that democratic government should be used to control the excesses of capitalism. In fact, I would prefer an anarcho-syndicalist social system, in which people work cooperatively and don't need much in the way of governance.
Localism posits that a healthy economy and society can be built up apart from the global economy and society. Certainly historically some areas have prospered and some areas have failed and most have been somewhere in the middle. So it is a gamble. Make yourself an island and maybe you can pay your workers $20 an hour for work that has a global scale of $4 per hour. On the other hand, you might be setting up a downward spiral towards being one of those places where people would be happy to get $1 an hour and not starve, rather than not working at all.
In 1700, China and India were the wealthiest nations in the world. Their highly paid artisans were reduced to poverty in the next two centuries as manufactured goods from Great Britain replaced local crafts. Today Chindia is rapidly become the world's most important economic region. Contrary to U.S. propaganda, that growth is not particularly fueled by exports. It is mainly fueled by infrastructure development and a growth in internal consumption.
Unionism in the U.S. failed for a variety of reasons, but the main one was that unions never took power from capitalists. Instead, using the profits from imperialism, the U.S. capitalist class bought off sectors of the U.S. workers with middle-class levels of pay. And in the case of AFL-CIO bureaucrats, upper-management levels of pay.
The times they are a changin. Worker pay relative to management and capitalist pay has been declining in the U.S., which should upgrade revolutionary potential. But culture usually lags, rather than leads, economics. Worker culture in the U.S. is mostly looking to a return of the glory days of 1940 to 1970, when you could get a good paycheck without becoming a radical or even joining a union. Unless the U.S. blows up everyone else's factories again, those days are not going to return. The workers' movement has to be based upon the new economic realities. A key question is: can it be a national struggle, a local struggle, or must it be an international struggle?
I have complained about outsorcing in the past, and have actually had work I did, and got paid well for, outsourced to India. But since Kaitlin already expressed that outrage, I took it to the next level, commenting: "An Internet downside for U.S. workers for sure. After 65 years of being privileged workers inside an imperialist economy, we Americans are being tossed back into the international proletariat. Who woulda thought." Lots of other people left interesting comments too.
Of course, a person could offer their services in the $4 to $8 an hour range in Humboldt County. You can't be someone's employee at that scale, it violates the minimum wage laws, but you can freelance for as little as you want. And as long as you don't get sick or have a family to support, and know how to live very frugally, you can live on that scale even in the U.S. I know, I have done it, but I hope to never do that again.
American workers' share in the enjoyment and production of American wealth has had a complicated history. Indentured servants and African slaves obviously produced much but consumed little. The vastness of virgin lands "liberated" from Indian tribes meant family farms could do pretty well until about 1870. Then we had the period of robber capitalism until the Great Depression. A lot of people think the Democrats and New Deal paved the way for the Great Prosperity of 1940 to 1970, but a lot of variables were involved.
Americans forget, or do not know, that two of the world's most historically evil people, Adolf Hitler of Germany and Joseph Stalin of the U.S.S.R. (Russia), nevertheless deserve a lot of credit for ending the Great Depression. Because the U.S.S.R. was communist, its economy continued to grow through the 1930s. Germany had a very bad economic meltdown, which is one reason Hitler came to power, and he basically ordered everyone back to work, so Germany recovered from the Depression years ahead of the United States.
Then World War II came along. Germany destroyed Russia's factories. Their bombers tore up Great Britain pretty well too. German and American bombers destroyed Germany's factories. China was pretty well destroyed, and Japan's factories were bombed, in some cases vaporized, by the U.S.
Come 1946, almost all of the factory capacity of the world was in the United States, and a great deal of what was abroad was owned by American capitalists. Making wage concessions to union, or even non-union, workers in the U.S. was no big deal. Buy peace at home, extract wealth from abroad.
I believe that workers should share the wealth that they produce and that democratic government should be used to control the excesses of capitalism. In fact, I would prefer an anarcho-syndicalist social system, in which people work cooperatively and don't need much in the way of governance.
Localism posits that a healthy economy and society can be built up apart from the global economy and society. Certainly historically some areas have prospered and some areas have failed and most have been somewhere in the middle. So it is a gamble. Make yourself an island and maybe you can pay your workers $20 an hour for work that has a global scale of $4 per hour. On the other hand, you might be setting up a downward spiral towards being one of those places where people would be happy to get $1 an hour and not starve, rather than not working at all.
In 1700, China and India were the wealthiest nations in the world. Their highly paid artisans were reduced to poverty in the next two centuries as manufactured goods from Great Britain replaced local crafts. Today Chindia is rapidly become the world's most important economic region. Contrary to U.S. propaganda, that growth is not particularly fueled by exports. It is mainly fueled by infrastructure development and a growth in internal consumption.
Unionism in the U.S. failed for a variety of reasons, but the main one was that unions never took power from capitalists. Instead, using the profits from imperialism, the U.S. capitalist class bought off sectors of the U.S. workers with middle-class levels of pay. And in the case of AFL-CIO bureaucrats, upper-management levels of pay.
The times they are a changin. Worker pay relative to management and capitalist pay has been declining in the U.S., which should upgrade revolutionary potential. But culture usually lags, rather than leads, economics. Worker culture in the U.S. is mostly looking to a return of the glory days of 1940 to 1970, when you could get a good paycheck without becoming a radical or even joining a union. Unless the U.S. blows up everyone else's factories again, those days are not going to return. The workers' movement has to be based upon the new economic realities. A key question is: can it be a national struggle, a local struggle, or must it be an international struggle?
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