Protectionisms Threat – Pt. 4

But what makes this the largest threat to the United States foreign policy? What makes the prevention of protectionism and the survival and progression of international trade more important than that of terrorist threats, rising regional and world powers, global warming, the need for alternative fuels and other pressing problems?

First, let's take a look at terrorism. The fact is, whether the year is 1783 or 2083, "terrorism" – by whatever definition it will take on – will be a possibility and a fear for everyone in every country. Whether terrorism takes on the form or definition of Native American raids on settlements, Irish ultra-nationalists, Islamic fundamentalists, or mercenaries paid to detonate WMD's, they will always be a threat to United States national security. But being that they are a constant in our world – although the form and definition of "terrorist" may change over time – it is hard to say that "terrorism" is the most important issue that our foreign policy makers should put into consideration for the next half-decade for the reason that its definition – and hence its security risk - could evolve and change overnight. But can the idea of radicalized, religious zealots who act according to what they have been taught be offset by a more free-trade world? According to Thomas Friedman, a plausible way to combat our current understanding of terrorism could be to encourage their entrance into a free-trade world:

Religions are the smelters and founders of imagination. The more any religion's imagination – Hindu, Christian, Jewish, Muslim, Buddhist – is shaped in an isolated bubble, or in a dark cave, the more its imagination is likely to sail off in dangerous directions. People who are connected to the world and exposed to different cultures and perspectives are far more likely to develop the imagination of 11/9 [post Berlin-wall world]. People who are feeling disconnected, for whom personal freedom and fulfillment are a utopian fantasy, are more likely to develop the imagination of 9/11 (Freidman, 2006).

    Terrorism can be fought not only on the battlefield, but in the economic connectivity of people from all over the world. The idea is that the wealthier the country – and the higher the standard of living of the people of that country – the less likely they are to go to war with another country because of the high economical cost of a conflict.

    Another possible threat the United States could face in the next five years is a new regional or even world superpower. Why would the survival of Liberalism be more important than the risk, as stated earlier, that multipolarity "is inherently destabilizing – and hence inimical to economic openness"? It is precisely the fact that if the United States maintains a strong free-trade Open Door policy then the likeliness of a regional or world superpower is greatly decreased:

Washington's ability to provide other major states with collective goods – in both the security and economic spheres – is a wasting asset…other major states experience growing doubts about whether they can count on the United States to protect them, they…acquire military capabilities so that, if necessary, they can defend themselves without U.S. assistance…Precisely because multipolarity is antithetical to the Open Door world that the United States seeks, the aim of American grand strategy is to prevent the other major powers – even U.S. allies – from gaining autonomy in the realm of security… As America's relative economic power wanes, others will have decreasing incentives to bandwagon with the United States. The ongoing redistribution of global power is bringing forward the day when eligible states will be strong enough economically to challenge U.S. preponderance militarily… It is a truism that economic strength is the foundation of hegemonic power. A strong economy provides the resources that can be converted into military power and generates the wealth to pay for the extensive military apparatus necessary to maintain the hegemon's dominant position… At some point, the relative decline of U.S. economic power that is in the offing will bring American hegemony to an end. (Layne, The Peace of Illusions: American Grand Strategy from 1940 to the Present, 2006)

    If the United States loses its hold on international, free-market trade, other nation's belief that the United States will be able to back up its commitments to them – in terms both defense and economic – will be reduced which then will encourage them to begin building their own defenses, reducing U.S. power and influence. The cause-effect relationship is not that a new regional or global superpower will adversely affect United States Liberalism, but the inability of the United States to promote and backup its free trade policies will result in an international uncertainty and rearmament.

    An outside problem facing the United States' national security could be the role it takes – or doesn't take – on the issue of global warming. Certain parties believe that the risks that the United States could face if it keeps on its track of "dirty energy" – such as coal and oil – could become loss of prestige internationally, falling behind the curve in manufacturing, and a heavy burden on its citizens in both the inefficiencies of outdated energy grids and the derivative effect of poorer health care due to "dirty energy".

    But according to Fareed Zakaria:

Between 2006 and 2012, China and India will build eight hundred new coal-fired power plants – with combined CO2 emissions five times the total savings of the Kyoto accords. (Zakaria, 2008)

    The rising regional and world powers of China and India are propelling their growth by the use of this same "dirty energy" that some Green movement proponents are claiming will bring American industry down. But American still is pushing ahead in this area of renewable energy, even if it is slower than some people would like. Last year, wind-powered energy gave out the same amount of power as five nuclear power plants. Solar energy and hybrid technology is on the rise and getting special attention for tax breaks and subsidies for their research and development by the United States government. This year, the Obama administration has helped pass $150 billion dollars over 10 years into the development of clean energy.

    This now brings us to the present. The case that there is a current re-birth of nationalism will rest chiefly on deduction from current events. The basis for economic nationalism rests on the view that in order to stabilize current economic conditions, countries should urge companies to keep jobs and capital at home. That goes contrary to free-trade economics which states that trade encourages specialization, which brings prosperity. That the global capital markets allocate money more efficiently than local ones, and economic co-operation encourages confidence and enhances security. (The Economist, 2009).

    Charles Wheelan writes a good analogy that proponents of economic nationalism need to consider:

To understand the costs of trade barriers, let's ponder a strange question: Would the United States be better off if we were to forbid trade across the Mississippi River? The logic of protectionism suggests that we would. For those of us on the east side of the Mississippi, new jobs would be created, since we would no longer have access to things like Boeing airplanes or Northern California wines. But nearly every skilled worker east of the Mississippi is already working, and we are doing things that we are better at than making airplanes or wine. Meanwhile, workers in the West, who are now very good at making airplanes or wine, would have to quit their jobs in order to make the goods normally produced in the East. They would not be as good at those jobs as the people who are doing them now. Preventing trade across the Mississippi would turn the specialization clock backward. We would be denied superior products and forced to do jobs that we're not particular good at. In short, we would be poorer because we would be collectively less productive. This is why economists favor trade not just across the Mississippi, but also across the Atlantic and the Pacific. Global trade turns the specialization clock forwards; protectionism stops that from happening. (Wheelan, 2002)

Protectionisms Threat – Pt. 3

With financial fallout and embargoes, which resulted in economic nationalism, to blame for the radicalization and birth of W.W. II in Europe and Asia, and the European and Asian economies and markets completely nonfunctional by the end of the war, the United States economy began emerging as the dominant player. The table was set for the United States to begin rebuilding Europe and Asia in its interest:

The reparations deal we make with Russia and the money and materials we invest in Germany will set new trade patterns for Europe. The old pattern was fear, hate, nationalism. Said Danton, "One destroys only what one replaces." Europe's old pattern must be replaced, and it is within the power of American leadership to do it (Life, 1947).

The United States would need to replace nationalism - and the protectionism that comes with it - with something new, or the risk was what wasn't replaced would come back. America answered the challenge:

The onlookers now fear that the No. 1 nation may relapse into her old place in the old pattern, thus dooming them to do the same. For example, they fear (especially many Britons) that callow, ungovernable America is heading for another depression. But the State Department has for years been committing itself to a policy which would remove the known international causes of the great prewar depression and which if successful would so change the prewar pattern of nationalism and poverty as to make these apprehensions irrelevant. This policy is freer world trade…For the whole hope of new U.S. prosperity depends on a much broader trading area (Life, 1947).

The United States had declared that the way to peace was freer world trade. What needed to be replaced was protectionism and its many dangers and it would be replaced by free-trade. But weren't capitalist systems in place in Europe prior to WW II?

One big mistake of international capitalism was its failure to share – not its products, which went everywhere – but its systems. The ownership of capital plant was too confined to a few countries, while the so-called backward countries supplied only raw materials, like so many captive farms (Life, 1947).

This was the evolution of modern capitalism. It was undergoing a transformation in Europe from partial openness to the system the United States would model after its own ideologies and interests: A free-trade, democratic economy. This new system would need several things.

First:

An open international economic system requires an absence of geopolitical turbulence in vital core regions; the existence of stable governments that will keep domestic economies open to foreign trade and investment; secure trade routes; and access to – and stability in – the peripheries. (Layne, The Peace of Illusions: American Grand Strategy from 1940 to the Present, 2006)

Second, as Walt Rostow and Max Milliken put it:

"We have, in short, a major and persistent stake in a world environment predominantly made up of open societies; for with modern communications it is difficult to envisage the survival of a democratic American society as an island in a totalitarian sea." (Layne, The Peace of Illusions: American Grand Strategy from 1940 to the Present, 2006)

Third:

U.S. policy makers are concerned especially about preventing the consequences of re-nationalizations…U.S. forces are in Europe and East Asia to prevent the kind of "security vacuums" that could lead to re-nationalization…In plain English, U.S. policymakers fear that key regions will lapse back into multipolar instability that could affect U.S. Open Door economic interests…Re-nationalization is the code word U.S. strategists use to denote a reversion to multipolarity. Because they believe multipolarity is inherently destabilizing – and hence inimical to economic openness"… And a "re-nationalized" Western Europe – one beset with political rivalries and security competitions – would have been an inhospitable environment for the economic Open Door…As Deputy Secretary of State Strobe Talbott declared, "The well-being of the United States depends in large measure on what happens in Europe – the U.S. will not prosper without an economically vibrant Europe; the U.S. will not be safe without a secure and peaceful Europe." (Layne, The Peace of Illusions: American Grand Strategy from 1940 to the Present, 2006)

And finally:

America's liberal ideology holds that political and economic Open Doors cause peace and stability. (Layne, The Peace of Illusions: American Grand Strategy from 1940 to the Present, 2006)

So to sum up, the economic system the United States would attempt to form and try to maintain was to keep geopolitical turbulence out of core regions, maintain governments friendly to free-trade, an absolute necessity that Liberalism friendly states succeed, prevention of re-nationalization and multipolarity in Europe and Asia. The belief was if this ideology is followed, it will cause peace and stability.

So how does this tie into national security?

Liberal ideology postulates that to be secure the United States must continue to expand until it has established an Open Door world by replicating its liberal institutions and values abroad. Thanks to liberalism, there is "a potentially limitless dimension" to the American conception of "national" security. (Layne, 2006)

In short, any threat to the stability of free-trade, any government that is closed to trade or interdependency, states that begin taking on more nationalistic and protectionist tones, any rising military powers that would create re-armament in European and Asian countries will cause instability and could lead to war – and that is not in the interest of the United States or its national security.

Protectionisms Threat – Part 2

There are some historians who state that trade has no effect on whether two nations go to war with one another. An example that is often cited is the fact that the United States, prior to World War II, was Japan's biggest trading partner. (Gaddis) From 1920 – 1938, the United States and Japan were one of the worlds leading trading partners (see table 1). For those years, American imports from Japan ranged from 2^nd – 9^th highest and Japanese imports from America ranged from 3^rd – 10^th highest in the world between two countries (see figure 1) (Barbieri, 2008).

Then beginning in 1937, Japan and China officially began a full scale war – with the battle of Marco Polo Bridge near Beijing. With this, United States sentiment began to shift away from Japan and towards China and by 1940 the United States government slowly began to tighten restrictions on Japan. At that time, the United States was the main supplier of the oil, steel, iron, and other commodities needed by the Japanese military. When Japan made it clear that they were intending to become involved militarily in Southeast Asia, where the United States had more strategic interests, the United States responded to this growing threat by instituting a full embargo on exports to Japan, freezing Japanese assets in U.S. banks, and sending supplies into China. Faced with serious shortages as a result of the embargo, unable to retreat, and convinced that the U.S. officials opposed further negotiations, Japan's leaders came to the conclusion that they had to act swiftly. Japanese planes bombed the U.S. fleet at Pearl Harbor on December 7, 1941 (US Department of State).

The fact was that during the 1920's and 30's, the United States was Japan's main - and strategic - trading partner. But when Japan started an offensive war in China, the United States sanctioned, and eventually embargoed, trade with Japan. By the time Pearl Harbor was bombed, trade was nearly non-existent between the two countries.

The next example is of French and German trade relations from 1920 – 1938 (see figure 2). These dates will be separated from 1920 – 1932 and 1933 – 1938. The first sample is French-German trade before Hitler's rise to power. During this time period, Germany and France were both trading with each other at a positive, growing rate. After Hitler's rise to power – in which he preached a strongly nationalistic agenda which became very populist on account of the financial fallout of 1929, in July 1932, trade dropped off between the two nations into amounts seen only in 1923 (see table 2), and maintained very low levels through 1938. By the fall of 1939, Germany and France were at war with one another.

The results of a financial fallout can be, and has been historically, blamed for the primary reason behind the radicalization of politics in Europe. As William Manchester wrote:

No one who has gazed on such a scene could doubt that this financial disaster, huge as it is, cruel as it is to thousands, is only a passing episode in the march of a valiant and serviceable people who by fierce experiment are hewing new paths for man, and showing to all nations much that they should attempt and much that they should avoid"…"Economical Blizzard," as he [Winston Churchill] came to call it, was responsible for turning all England into "one vast soup kitchen," driving the country back off the gold standard, doubling the number of British unemployed, and radicalizing politics throughout Europe, especially Germany (Manchester).

Some will argue that it is in the best national security interest to keep as much industry – whether manufacturing or high tech – in the United States. Their argument is that if we export out all of our industry, we are boring a hole in our economy by having fewer middle class jobs, thus raising the standard of living abroad while lowering our standard of living. Not only that, but if we export out all of our manufacturing capabilities overseas, if we are faced with an international threat – such as we faced in W.W. II – we might not be able to respond in the scale and decisiveness as we did during past crises'.

The record of the past six decades says different though. With the standard of living increasing dramatically in countries that have embraced Liberalism, the motivations and costs to go to war seem to have increased to a level where major power conflict may be a thing of the past.

The risk to this stability though is when protectionism is enacted, production is brought back home and trade is lowered. When jobs are lost, stability is compromised (ex. Germany 1929, Russia 1913, Venezuela, Spain)

As will be discussed later, globalization needs stability in international markets in order to thrive. If this stability is lowered, economies will be affected by protectionist measures and the risk of political radicalization is increased. Additionally, if tariffs or embargos are enacted in response to protectionist measures, markets are lost which means the demand for items shrinks. Less demand causes the industry to shrink. Industry shrinkage leads to job cuts. Job cuts can lead to instability. Far from being a national security risk is globalization.

Conversely, if international trade is promoted, other countries standards rise. As their wages increase and the competitive advantage to use them as cheap labor decreases, their economy will stabilize and mature. With this evolution and raised wages, disposable income increases. As disposable income increases, demand for products will increase which creates new markets. With new markets, there is an opportunity for growth which leads to jobs being created.

As an example, if I saw that the demand for golf balls in China was more than the supply, I could create a small factory and hire 4 people to make golf balls. I could sell the golf balls just to the Chinese market and in so doing this, 5 jobs would be created. If it were not for international trade, this market would not be open and 5 people would not have jobs.

America is not just an outsourcing country either. Manufacturing from other countries has increased in recent years as the dollar devalues relative to the Euro and Pound. Airbus has built factories in Wichita, Kansas and Mobile, Alabama, for parts for their airplanes. BMW has built a car manufacturing plant in South Carolina. Toyota has a manufacturing plant in Hebron, Kentucky and Honda has also sent manufacturing factories to Indiana, Ohio and Alabama in recent years.

Figure 1

Table 1

Year	Importer 1	Importer 2	US Imports from Japan (in millions)	Japanese Imports from US (in millions)
1920	USA	Japan	414.57	439.89
1921	USA	Japan	251.26	277.08
1922	USA	Japan	354.29	284.97
1923	USA	Japan	346.94	248.77
1924	USA	Japan	340.06	253
1925	USA	Japan	386.86	255.72
1926	USA	Japan	405.64	320.5
1927	USA	Japan	402.1	328.83
1928	USA	Japan	384.34	293.36
1929	USA	Japan	432	301.54
1931	USA	Japan	206	168.94
1932	USA	Japan	134	143.37
1933	USA	Japan	128	159.27
1934	USA	Japan	119	228.52
1935	USA	Japan	153	240
1936	USA	Japan	172	245.79
1937	USA	Japan	204	365.67
1938	USA	Japan	127	267

Figure 2

Table 2

Year	Importer 1	Importer 2	French Imports from Germany (in millions)	German Imports from France (in millions)
1920	France	Germany	158.1	50.99
1921	France	Germany	155.05	111.3
1922	France	Germany	112.21	152.85
1923	France	Germany	84.46	1.66
1924	France	Germany	105.38	51.82
1925	France	Germany	111.38	86.08
1926	France	Germany	158.88	143.46
1927	France	Germany	165.14	145.88
1928	France	Germany	194.98	137.41
1929	France	Germany	258.57	152.79
1931	France	Germany	240.76	107.76
1932	France	Germany	141.99	44.83
1933	France	Germany	118.71	43.79
1934	France	Germany	136.23	66.05
1935	France	Germany	116	72
1936	France	Germany	117.08	39.81
1937	France	Germany	151.63	62.75
1938	France	Germany	90	58

Protectionisms Threat – Part 1

I have recently written a paper dealing with protectionism and the dangers it poses to the United States and the rest of the world. I will be posting it in revised sections the next few days and would enjoy feedback that you might have for me.

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Great challenges lie ahead for the United States: Ways in how we fight terrorism domestically and internationally, the United States' affect on global warming, substitutes for fossil fuels, and rising international powers and superpowers. With these great challenges lying ahead, there is one that is currently more pressing. This great challenge facing the United States is in the area of international finance: specifically the war between free-trade and protectionism.

    When the financial crisis began in August 2007, few realized the scope of what was to come. Almost overnight, credit markets dried up which resulted in banks cutting back or freezing their lending practices. This led to businesses and start ups not being able to receive loans for items ranging from payroll to expansion. The result then was a freeze in hiring and the beginning of layoffs, causing people to panic and stop spending. With consumers spending much less, this led companies into underperforming their sales estimates which resulted in the termination of hundreds of thousands of jobs. With hundreds of thousands of jobs being lost in the United States alone, the international markets began to feel the pain as many of their biggest consumer, the United States population, stopped spending on items ranging from the luxurious to upgrades. This has resulted in millions of jobs being lost in Europe and Asia. With the massive job losses have come a revival of an idea once thought dead: Protectionism.

    How is this a threat to United States national security? The thesis is this: Protectionism will negatively affect trade and the international economy. If the world economy becomes unstable, it will cause international politics – international governments – to become unstable. This instability could lead to radicalization, even war, in both Asia and Europe in a short time period.

The idea of free-trade promoting peace comes from the German philosopher Emmanuel Kant. In short, he proclaimed a three-pronged plan to promote peace: Democracy, free-trade, and Democratic international organizations. This became known as Liberalism. I specifically want to look into why Kant believed free-trade promoted peace.

Kant claims that free-trade encourages open trading relationships. With more open trading, countries would lower and eventually eliminate tariffs – resulting in more exports to other countries to help sustain domestic manufacturing and business. Also, free-trade encourages movement of labor and capital, such as foreign direct investment or by the way the European Union allows member-states' citizens to move and work inside any member of the EU.

Continuing, conquest for resources is not necessary. Countries can now trade with one another for scarce or precious resources instead of using force to obtain those items. Finally, trade linkages means more contact with trading countries, which means greater understanding among those countries which in theory raises the cost of conflict.

    Since Kant's birth of Liberalism, capitalism has gone through many evolutions. From laissez-faire to Wilsonian, capitalism has gone through fits and bouts in its evolution, but capitalism has always engendered crises, and always will. It is near impossible to separate Liberalism from capitalism, and vice versa – due to the fact that both emphasize individual rights and opportunity.

    Liberalism, and it's beliefs, are held in high regard because of the belief that true Liberalism promotes peace. However, if trading relationships actually promote peace, does that mean lack of trading can promote conflict? The obvious answer to any question asked as an absolute is no. But generally speaking, it can be argued that lack of trading can promote conflicts to arise.

Anti-Keynesian Economist

It's true that not everyone is an economist. But for the ones who are, shouldn't their views, thoughts, suggestions, and input be heard out before this theft disguised as a stimulus gets passed?

Enjoy.

"There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy."

— PRESIDENT-ELECT BARACK OBAMA, JANUARY 9 , 2009

Incompetent or Just Plain Stupid?

It is quickly becoming apparent that the person that America elected as the President for the next 4 years is unable to manage the duties of being the President and is showing signs of incompetence.

For starters, let's just lay the groundwork. The Democratic Party controls, realistically, the entire federal government decision making process– having the majority in both the House of Representatives and Senate, and the President. So getting things passed, such as nominations for unheard of positions – Chief Performance Officer anyone? – should be a piece of cake. No problem. No problem?

Problem.

The people who Obama is nominating – and by the way, didn't these people need to answer a ridiculously comprehensive and intense questionnaire to even be considered – are almost methodically having the same issue: they "forgot" to pay their taxes.

Let's start at, ironically, the Treasury Secretary and Tim Geithner. It is fact that he failed to pay in timely fashion some $34,023 in self-employment taxes between 2001 and 2004. And what is the Treasury Secretary's role exactly? For starters, the Secretary of the Treasury is fifth in the United States presidential line of succession. But here is an excerpt of what Geithner's responsibilities are:

The Secretary is responsible for formulating and recommending domestic and international financial, economic, and tax policy, participating in the formulation of broad fiscal policies that have general significance for the economy, and managing the public debt.

Did you catch it, the "formulating and recommending….tax policy" part. So your Democratic President and Senate has confirmed a tax evader to be formulating and making recommendations on our tax policy. Now that is "change". Who needs honest, upright, people who pay their taxes deciding our tax policy.

Next though we will go to the failed nomination of Tom Daschle for the position of Secretary of Health and Human Services. Now Daschle is important because he would have been the point man for the non-socialist socialized insurance ponzi scheme. From Daschle's own mouth:

"Incremental change in our system is no longer a viable option. Instead we need comprehensive reform. In growing numbers the American people are demanding that we do something. Our goal should be to build what current and retired members of Congress have today, and make that available for all Americans."

But how do you fund that type of "comprehensive reform" that would make health care "available for all Americans"? You collect…taxes. Ironic isn't it? Yeah, apparently in order to help the under-privileged you need to pay that more than $140,000 in back taxes and interest. Oh and while you are thinking of the poor, underprivileged people that you will be helping, that $140,000 includes the use of a car and driver for three years, which isn't extravagance in the least.

Finally, on this tax issue, is Nancy Killefer – the nominee for Chief Performance Officer. First off, who has ever heard of this position? I didn't so I decided to look up what this person does. Well, to start off, it was created just this year on January 7 – another increase in the size of the government, and salaries that tax payers will need to burden. The Chief Performance Officer's role in government is a position in the Office of Management and Budget that concentrates on the federal budget and government reform. Wow, another financial position that Obama was trying to fill by someone who had some issues with taxes.

Although her issues, in relative terms, are not as bad as Daschle's or Geithner's, they are true and is based on the failure to pay $298 in unemployment compensation for household help, $48.69 in interest, and $600.00 in penalties.

Wasn't that questionnaire supposed to catch this?

Ok, so that is just a bump in the road for the most popular President in the history of mankind, with "political capital" to do whatever he wants. I mean, he's so powerful, when he said Governor Blagojevich should resign, he didn't. With that type of domestic power, just imagine the terror that Iranian President Mahmoud Ahmadinejad will feel when Obama say's he should be nice and not support terrorist that attack Israeli civilians – and not to mention he shouldn't think about building an atomic bomb.

But that aside…

Obama has decided that the stimulus money that will be passed – unfortunately – shortly will be spent on a planned "Buy American" policy. That is until the EU threatened to retaliate if the US Congress went ahead with sweeping measures in its $800 billion stimulus plan to restrict spending to American goods and services. Then our fearless President shrank at the first signs of opposition and changed course saying:

"I agree that we can't send a protectionist message…I want to see what kind of language we can work on this issue. I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we're just looking after ourselves and not concerned with world trade."

Don't worry Europe. We don't care to be a leader any longer. You tell us how we should spend our own money. I mean, we owe it to you. Putting up with Bush those past 8 years and all.

But maybe Obama will keep his campaign promise and theme of "Change". Change from a world leader in economics and military power. Change from being able to have the opportunity to becoming financially independent. Change from what has made America different and powerful. And great.

That's change you can believe in. Yes, we can.

A Quick Thought - Pt. 2

Just following up on my previous hypothesis that the bailout will end up in the nationalization of the industries that recieved any funding:

With two of the nation's largest banks buckling under yet another round of
huge losses, the incoming administration of Barack Obama and the Federal Reserve
are suddenly dealing with banks that are "too big to fail" and yet unable to
function as the sinking economy erodes their capital.

Particularly in the case of Citigroup, the losses have become so large
that they make it almost mathematically impossible for the government to inject
enough capital without taking a majority stake or at least squeezing out
existing shareholders.

And the new ground rules laid down by Obama's top economic advisers for
the second half of the $700 billion bailout fund, as explained in a letter
submitted to Congress on Thursday, call for the government to play an increasing
role in the major activities of the banks, from the dividends they pay to
shareholders to the amount they can pay executives.

For more on this: http://www.iht.com/articles/2009/01/16/business/16banking.php

A Passing Thought

So back in July of 2008, when oil was around $147 per barrel, I remember hearing how the main reason for this price increase was the demand from - specifically - India and China.

Now with oil down around $35, and America in a recession, I am just thinking: How much did India and China really impact oil prices? Without trying to ask a rhetorical question, were we being lied to completely while oil companies were raking in over $100 billion dollars per quarter? Who/what should be held reponsible and accountable if these markets were being controlled by the companies and speculators, and not true economic-based supply and demand conditions?

Karl Marx was Right??

According to the Archbishop of Canterbury, Dr. Rowan Williams, Karl Marx had been right in his analysis of the dangers of capitalism.

If he is saying some of Marx's analysis are founded, I can deal with that. If he's saying he agrees with Marx across the board...

A Quick Thought

So just a quick thought about the current financial fiasco that is going on right now...

In the early/mid 1990's, the former Soviet Union was in need of raising money and trying to turn from a centralized planned economy to a capitalistic economy. One way the government raised money was by a program called the shares-for-loans program. What this program did - in a nutshell - was it allowed the government to "trade" shares of its nationalized companies - such as oil, mining, power, and manufacturing companies - for loans that would be made by wealthy Russian citizens - the oligarchs. The stipulation to this program was that if the government defaulted, these investors could recoup their "loans" by taking control of these companies.

The Russian economy crashed in 1998 and the government defaulted on the loans.

Hence, these companies that had been owned by the government were now owned by citizens - much like our corporations and partnerships here in the U.S.

What is going on right now with our economy and with all of these bail-out programs seem eerily similar - except the other way around. These loan packages - bailouts if you prefer - are being sold to a very skeptical population by saying that there will be long term returns...in fact these bailout programs should be looked at more like an investment in these companies, or loans (as are they are being spun to us by the investment into AIG and the auto companies).

So what happens, theoretically, if all of this money gets spent and 1 year from now, things are no better - or even worse - than they are now? Can the government believe it will be able to pass more "bailout" programs - spending more taxpayer money to prop up failing companies and the financial sector? Not likely. So where would that leave it?

Although just my view, it would be forced to do what the Russian oligarchs did back in 1998 - take control of these companies. In one word: Nationalization. On a large scale.

Is it out of the realm of possibilities? I don't think so. But this is just my quick thought on this. I'll write more when I find time.

Guardian of the List

Obama campaign promises broken...

1. Balance the budget
2. Pull out of Iraq starting immediately and have everyone home by 2010 (summer)
3. Bring "change" to Washington - new blood
4. Repeal tax-cuts for the wealthy...
5. Take on Big Oil
6. Didn't take campaign money from oil companies


As of December 8...


UPDATE: 2/3/09: The Obameter

Saves me all the work!

Black and White?

Was going though a book I had read awhile ago and came across something I had marked when I originally read it. Something I think we should think more about each day:

"'We are facing an implacable enemy whose avowed objective is world domination,' the Doolittle Report, a highly classified evaluation of C.I.A covert operations, concluded in 1954. 'There are no rules in such a game. Hitherto acceptable norms of human conduct do not apply.' Eisenhower agreed. 'I have come to the conclusion that some of our traditional ideas of international sportsmanship are scarcely applicable in the morass in which the world now flounders,' he wrote privately in 1955. 'Truth, honor, justice, consideration for others, liberty for all - the problem is how to preserve them...when we are opposed by people who scorn...these values. I believe that we can do it,' and here he underlined his words for emphasis, 'but we must not confuse these values with mere procedures, even though these last may have at one time held almost the status of moral concepts.'
And so the Cold War transformed American leaders into Machiavellians. Confronted with 'so many who are not good,' they resolved 'to learn to be able not to be good' themselves, and to use this skill of not use it, as the great Italian cynic - and patriot - had put it, 'according to necessity'"

The Cold War by John Lewis Gaddis P. 165

I'm sure he was voting for change too...

Quazi-Socialized Medicine - The Genesis Post

Yea, this topic will be evolving a lot over the next 4 years. The non-socialized socialization of insurance and medical expenses.

To be fair, there is definitly a need for at least something to be done for helping people get some kind of medical coverage. Both candidates have expressed this. Second, this is not an issue that there is a "black and white" answer to. There will always be a case of someone that will be an outlier that would cause any solution to healthcare to not be "the best way" to fix it.

But what exactly is the current problem with healthcare? Or more refined, how does Obama's policy solve what he sees as the problem in healthcare?

But before that, what is GOOD in our current healthcare system?

1. The U.S. healthcare service is ranked, worldwide, number 1 for responsiveness.

http://www.who.int/whosis/database/core/core_select_process.cfm?strISO3_select=ALL&strIndicator_select=nha&intYear_select=latest&fixed=indicator&language=english

2. The number of people with health insurance increased to 253.4 million in 2007 (up from 249.8 million in 2006). The number of people covered by private health insurance (202.0 million) in 2007 was not statistically different from 2006, while the number of people covered by government health insurance increased to 83.0 million, up from 80.3 million in 2006. (Thats about 84.7% of Americans that have some form of health insurance)

http://www.census.gov/prod/2008pubs/p60-235.pdf


3. Everyone can have access to emergency care regardless of insurance status and ability to pay through the Emergency Medical Treatment and Labor Act (EMTALA), passed in 1986.

http://www.cms.hhs.gov/EMTALA/


Now let's look at what's BAD in our current healthcare system:

1. Americans without health insurance coverage at some time during 2007 totaled about 15.3% of the population, or 45.7 million people.

http://www.census.gov/prod/2008pubs/p60-235.pdf

2. The World Health Organization ranked, in 2000, the U.S. healthcare service the 37th in overall performance and 72nd by overall level of health.

http://www.who.int/whr/2000/en/annex01_en.pdf

3. Spending on healthcare in 2006 totaled $2.1 trillion, or 16% of GDP. This represented an increase of 6.7% over 2004 spending. Per capita spending was $7,026.

http://www.cms.hhs.gov/NationalHealthExpendData/01_Overview.asp

And what does Obama see as BAD in our healthcare system?

1. On health care reform, the American people are too often offered two extremes - government-run health care with higher taxes or letting the insurance companies operate without rules. Barack Obama and Joe Biden believe both of these extremes are wrong.

http://www.barackobama.com/issues/healthcare/

Doesn't really give much in detail of what the problem is, but if you read he does go more into specifics on health insurance.

This is the overview that I will start with. It's good to start with the framework, then work from there to fill in the details.

Dissent...at last

Well, time to crank up the ole' blog once again...

Politically speaking, this campaign season made me very apathetic towards politics. Both candidates, from my point of view, were lacking the leadership that this country needs now. One has his head up in the clouds in a fantasy and the other has his head buried in the sand, ignoring reality.

But now that the campaigning is over and a new President has been elected - happy for me a Democrat - I can now finally be an open dissident of policies.

You see, my own observations have shown me that if a person of a certain view on politics, a conservative for instance, begins attacking a politician of their own in order to show that they are "open to reason", all they end up doing is cannabalizing themselves and their party. For example, just because Bush may have been one of the worst managers in certain areas, doesn't mean I try to "find the middle ground" with a liberal to look "reasonable" in my politics. If I do, I end up villifying Bush in every policy, when in fact there either was no alternative or that policy was in fact the best option.

Now that there is a Democrat in office, I can now be open in my criticism. From campaign promises that will not be fulfilled, to botched handling of many soon to come policies and problems, I am happy I will be able to vent my frustrations, show the double standards, complain about issues that I don't agree with - and all this while not cannabalizing the party that I most closely assosciate with.

And there are already quite a few things I will be having a field day with...

Ottawa: Day 2

Today was an eventful day. Woke up, got our "continental breakfast" and proceeded back to Parliament. We were told that the changing of the guard occurs around 10 a.m so we got there at around 9:30. We got a good spot and it was a good thing we got there early because that place filled up fast.

The changing of the guard was pretty impressive. They had a full military band with bagpipes, two squads of soldiers, and some pretty crazy hats. I could hear them well before I could see them - as they came from behind and were marching from the street to Parliament. The ceremony lasted around 30 minutes and one of the soldiers dropped his bayonet and it stuck perfectly straight in the ground.

After that, we toured the Center Block - or the main building. We got to see the House and Senate chambers and the library - which is the only surviving part of the original building. Then original Center Block burned down during WW 1. The tour was good - lasted about an hour and a half and we went through some serious security - then we hit the gift shop. I got two Canadian Flag pins.

After that, we walked around town and got some food. Found a special at a restraunt that had a 10 ounce streak and fries for $10. After that, we walked to the "Royal Mint".

This mint is not the one that produces the circulation currency. Instead, it makes proof sets, collectible coins, and investment coins. The circulation currency mint is in Saskatchewan I believe. Our tour lasted around 45 minutes and we were not able to take photos, but we saw some cool machines, coins being made, and I got to hold a real gold bar. Pretty cool I would say.

When we left the mint, we just walked around the city some more. Got some ideas for things we are going to do tomorrow, but called it a day for now.

Other news, the battery on the car is dead. Don't know how, but I will worry about that on Sunday when we are going to be leaving. Hopefully I can get a jump from somebody.

One more day in Canada.

Ottawa: Day 1

Well made it into Ottawa today. Very beautiful place. Reminds me a lot of London. Our hotel is located less than a mile from the Canadian Parliament bulidings,. so in easy walking distance.

Today, we left Toronto and made it into Ottawa in about 6 hours. It rained most of the way and we saw two cars getting lifted out of the river - they flew off the interstate and went through the guardrail. But besides that, it was a pretty uneventful ride to Ottawa.

When we got here, we went and got something to eat - and it was the WORST food I've ever had. Never eat at Manchu Wok.

After that, we walked down the main street - Rideau Street - and walked down by the river. Then we were walking towards some old looking buildings and I asked a cop what these buildings were and he told me that these buildings were like our White House and Congress buildings. So we are in the capital of Canada and I didn't even know it! The guard also said to take a tour of the buildings - but do East Block first because they closed first.

So we went and got our free tickets and ended up being the only 2 people to do that tour. It was pretty cool though and we learned some history about Canada and how the government works.

Then we walked around the city more. We just happened to run into the changing of the guard. It was pretty cool. Second time I've seen that - saw it at the Tower of London (I think) back in 1996.

We have a lot planned for the next two days, so hopefully we can do everything we want to.

Toronto, Day 2

So today Zac and I went back to downtown Toronto. We decided to go by and see the water and then head on to the CN Tower.

Now, besides being REALLLY expensive, it is REALLLY cool to do. The CN Tower gives you not only a view of Toronto, but even on a very cloudy day we could easily see 40+ miles in any direction. They even posted signs that said on clear days, you can see Niagara Falls and Rochester, NY. Now that's pretty impressive!

We got the "Total Tour" (or whatever they called them) tickets, so we were able to see everything and do everything. We went to the Observation Deck, Sky Pod, the glass floor view, the movie about the CN Tower and it's construction, and the ride. The ride was random. Not really worth going into detail over.

But the Sky Pod is 147 stories above the city and a total height of 1465 feet. Definitely something you must do if you go to Toronto - even though it is a tourist trap. Go all the way, get the "Total Tour" package, and you'll definitely have something to remember.


After that, we walked around the city and got lunch. One thing I did notice today was that in Canada, they don't have water fountains in malls. Just a fun fact (FF).

When we left the city, we proceeded to get stuck in traffic for nearly 2hrs. 30 minutes. They had closed down the interstate (or whatever it's called here) and we got stuck in it. Not much we could do. But we made it back and all was good.

Tomorrow, we leave Toronto for Ottawa. Toronto is a city that I would recommend to people to come and explore. We only were able to do a few things, but wanted to do more. Unfortunately, the Blue Jays were not in town, hockey and basketball are over for their seasons, and the Soccer All-Star game is tomorrow night. Oh well. Maybe next time.

My Travels: Ocean City - Toronto

So although a bit behind on this, I am going to go back and chronicle my traveling from Ocean City Maryland through Canada.

Ocean City: July 14 - 16

Was a very relaxing time. Made the trip in 8 hours and 15 minutes, not stopping once. Met up with my cousin, Zac - who I am making this Canadian trip with and my Uncle Neil and Aunt Bet while in Ocean City. Went back to my grandmothers and just spent some time with her.

Later, my cousin and uncle came back over and we watched the home run derby. All in all, was a good day and enjoyed spending time with some family.

July 15 went on to the boardwalk at Ocean City. Didn't stay long and was not able to do much, but had a good time anyhow. Afterwards went back to my grandmothers and was able to just sit out on the front porch and talk with her for 2 hours. She told me how to pickle cucumbers and told me about her garden she was working on on the back porch. She is growing peppers and tomatoes and was very upset at the lack of production from the tomatoes.

July 16 left Ocean City around 11 am and heading to Baltimore where Zac lives. Got there in about 2 hrs 30 minutes.

July 17 went to the batting cages and proceeded to strike out often. Hit a few but think they would have been foul.

July 18 took Zac to get some blood work done. Everything came back normal. Was able to finally meet Dr. Chan for the first time. Later, went to an Orioles game. They played the Detroit Tigers and won 7 - 4.

July 19 proceeded to go to D.C. for the day. Zac was getting packed so I went to the city by myself to just walk around. Had a good time. Went to a few Smithsonian's and ate at Potbelly's. Spent about 4 hours down there and enjoyed it very much.

July 20 started the trip to Canada. Our first stop was Cooperstown, NY. Got there in good timing but the tolls were outrageous. If you go the "quickest route" on your GPS, be prepared to spend nearly $20+ on toll roads. Fortunate for us, my aunt has an EZ-Pass and let us use it. So saved me a lot of money. Thanks Aunt Sharon!!

Got into Cooperstown around 3 PM. Headed straight to the Baseball Hall of Fame. Very small, kind of humble museum. Had 3 rooms and the gift shop. The "shire" was the largest room by far and it was definitely something all baseball fans should go see. Also got a AAA discount of 10% :)

Afterwards, walked around the "city" of Cooperstown. All 1 road of it. Went into a lot of baseball card and memorabilia shops and ate at some Cafe (Doubleday Cafe maybe?). While walking around, we came across Doubleday Field. When we got there, we were the only one's in there and it was something.

Got to our hotel and proceeded to realize that they did not have any internet connection. But a single-A baseball team was staying there too, but most of them didn't speak English.



July 21 went back into Cooperstown and sent off some postcards. Having a postcard of a Hall of Fame player and a postmark from Cooperstown, NY is pretty cool I think. Went into a few more shops and then proceeded to Niagara Falls, Ontario.

Was only 3 hrs. 30 minutes but for some reason the ride seemed to go on forever. When I got to the border I got interrogated by the customs lady. But they were questions that I am sure everyone gets asked. But still. Do I look like I'm packing heat?!

We went to our hotel first - The Ritz. Don't let the name fool you. It was a cinder-block room with hard, sticky tile floors and smelled like a tobacco factory. BUT the good side to it was the hotel not even 2 blocks away was charging double AND we were only 5 blocks away from Niagara Falls - so pretty cool I must say.


But once we left the hotel room we proceeded to go eat at a restraunt called The Happy Wanderer. It was a German-Canadian cuisine restraunt and on the outside it had a banner that read "Breakfast $1.99" so I figured that it would be a decent priced (cheap) place to eat.

Well...it was and it wasn't. A "hamburger" costs $12. But this "hamburger" was no ordinary hamburger. It came without a bun, sauteed with onions, came with green beans, beets, fries, salad and bread. And everything tasted amazing. It was well worth the initial "sticker shock" and I would recommend going there. The lady serving us - who was obviously German - said that they had been there for 40 years.

After eating we headed on to Niagara Falls. It was amazing. We started getting "misted" on about 3 blocks from even being near the edge of the water - which was probably a quarter mile away from the falls themselves. Zac and I got wet but got some good pictures and were able to cross another thing off our list of "things to do". Niagara is a nice city and as I later learned has a population of around 80,000.

After that we walked around some of the city and stopped in a few gift shops. We headed back to the hotel for the night.

July 22 went out to Denny's for breakfast. Walked about a mile to get there and noticed an obvious increase in price. But they did take American currency at a 1:1 ratio so I didn't really mind. Headed off and tried to find a post office in Niagara. Talked to an old couple who told me that they didn't even know where one was any longer because, as they put it "they keep moving". They told me a little about the town (hence my knowledge of the population of their city) and said they liked to color of the van. The gent told me he was originally from Ottawa and told me to have fun while I was there.

We then headed off to Toronto.

It took around 1hr 30 minutes to get there. But when we got into Toronto, we knew it. Big sky scrapers, the RN Tower, a huge wind turbine. Tinted blue glass building everywhere. It was everything you expect a big city to be.


We went to our hotel and the person at the desk, after I told him this was the first time I've been here, got real excited, pulled out a map and told me places to go and how to get there. Even though his directions were wrong - and the GPS got confused for a short time - we got to downtown Toronto, paid our $10 to park, and started walking towards the Hockey Hall of Fame.


The Hockey HOF was completely different than the Baseball HOF. It was a much larger building that you had to walk through a mall to get to. My camera died but Zac took lots of pictures. The set up was more of just walking around looking at the people who were in it and their jersey's, sticks, trophies, etc. But the amount of memorabilia, trophies, movies, etc that they had there was simply amazing. And, oh yea, we got to touch The Stanly Cup. Yea, pretty amazing I got to say. It was THE REAL Stanley Cup.


After we left, we walked around the city, staying on Young Street, which I was told was one of the main streets in the city. We stopped at a McDonalds and got a quick bite and continued just walking around the city. As we turned and headed back to the car, we took a detour and walked by the CN Tower and the Rogers Center. We then headed back to the hotel - which is much nicer than the Ritz (Canada's Best Value - and in fact it might just be that) - and then went to a mall which is located just a mile away from the hotel and had dinner at some Mediterranean place.

I will try to keep my traveling updated and maybe expand on the past traveling as well.