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| 5/23 |
| 2007/11/27-30 [Politics/Domestic/Election, Finance/Investment] UID:48695 Activity:very high |
11/26 Media lavishes attention on bogus Zogby poll showing Hillary trailing
while ignoring reputable Gallup poll
http://www.talkingpointsmemo.com/horsesmouth/2007/11/media_lavishes.php
\_ More proof of liberal media bias.
\_ I think you're being sarcastic, but one could make that argument
since Hillary is probably the farthest right of the Dem
canidates. However, what the media really hates is a sure bet.
A sure-win canidate reduces the drama and reportability.
\_ Both polls are meaningless since we don't elect the POTUS in a
general election, otherwise Gore would have won in 2000. Only
State by State polls matter, assuming any poll does. Frankly, most
of the polls survey such a tiny number of people they're all highly
questionable. Show me a poll of 2000+ LV's and I'll pay attention.
\_ There is one meaningful point--much of Hillary's support is
because of "electability". If she's not as electable as
previously believed, that may erode her support.
\_ I understand that "electability" is what got Kerry nominated
too.
\_ I don't actually think that is true, since Edwards is clearly
more "electable." While it is true that Hillary supporters
often tout her electability, I think it is because they know
it is her weakest point and they are trying to pre-empt
Obama and Edwards' attacks on the point. FWIW, Obama is
probably no more electable than she is. -Edwards supporter
\_ Why do you support Edwards?
\_ I agree with him on the big issues: the Iraq War, which
he thinks was a mistake and wants to wind down as quickly
as possible; healthcare, which he wants to reform and
ensure complete covereage, with the most comprehensive
plan of anyone; and campaign finance reform, where he
has consistenly taken a stance against the open buying
and selling of political favors which is what K Street
has become these days. He also would use the bully
pulpit to bring attention to the issue of widening
income imbalance, which no one else seems to even notice
or care about. I disagree with him on a few things, like
free trade, but those are not large enough issues for me
and he is not enough of a protectionist for me to be too
worried. I also think he has a wider appeal than any of
the other candidates from either party and because of this
might be able to correct our drift away from a dangerous
and unhealthy extreme partisanship that has become
the other candidates from either party and because of
this might be able to correct our drift toward a danger-
ous and unhealthy extreme partisanship that has become
endemic lately. I know I partly say this just because
I grew up poor and white too, and so his story resonants
with me, but polls bear out that he has the most support
from independent voters of any candidate. He also doesn't
poll that badly amongst Republicans, probably because of
his southern accent and his open declarations of faith.
\_ Why don't people understand that universal healthcare
will bankrupt this country in a way that Bush's
stupid war could only dream of? Any candidate
that advocates such a plan should be voted down
just as if he was advocating invading Iran.
\_ Why aren't all the Western Democracies bankrupt
then? Why don't people understand that nationalized
healthcare has worked and saved the overall economy
vastly in every place that it has been tried?
\_ 1. The US pays their (expensive) defense
bills for them.
2. They will be bankrupt soon enough.
\_ Point 1 really means the American tax payer
pays for their defense. We also pay for
their health care to a large degree because
their governments hold down the price of
drugs artificially.
\_ Don't kid yourself. What percentage of
health care is drug costs?
\_ A lot. You tell me otherwise. How
much was the drug bill they passed
a year or two ago? How much will it
balloon up in 10-20 years?
\_ Spending on perscription drugs is
less than 10% of the overall
national cost of health care.
This is not a large proportion.
http://www.csua.org/u/k3z (IHT)
It will grow unless we do something
drastic, like nationalize health
care spending though, you are right
there.
\_ Sure they will. Conservatives have been
saying that about Sweden for at least 60
years now and in that time, they have
actually been closing the gap with America
economically. This is an interesting time
to claim that anyone else is going "bankrupt"
\_ People always point to Sweden. How
about Germany, Japan, and France?
Here's a good article about France:
http://tinyurl.com/22bc73
\_ Sweden has the highest tax rate.
Similar arguments can be made for
Germany and France, though. Japan
actually has a lower tax rate than
the US.
\_ Sweden has the highest oveall tax
burden. You can make the same general
arguement for most of Europe: the
argument for most of Europe: the
economy is doing just fine, in spite of
decades of Conservative insistence that
the mixed model cannot possibly work.
Their per capita income has actually
closed with the US over any period
in the past you care to measure it for.
France is kind of a basket case, but it
has been for a long time. Japan
actually has a relatively low overall
tax burden, slightly lower than the US.
\_ You should ask the Swedes what they think
about the way Sweden runs things.
\_ It's a Democracy, right?
\_ It's a democracy, isn't it?
\_ If you think democratic government
implies satisfaction with the
government, politicians, policy, or
the way the country is going you are
breathtakingly retarded.
\_ argumentum ad hominem
\_ What do you think should be done about income
imbalance?
\_ Tax the rich til they aint rich no more!
\_ Have any actual constructive suggestions?
\_ That was it.
\_ Spend more on education and job retraining,
especially for people displace by globalization.
Repair our badly neglected infrastructure, which
should employ lots of people and fix some of
our transportation issues at the same time.
What ideas do you have?
\_ The domestic income gap is related to global
income gaps and thus ties in to trade issues
and currency issues.
When you have "jobs Americans won't do" the
system is broken. To reduce the income gap you
have to either raise the floor or lower the
ceiling. Lowering the ceiling seems backwards
to me. To raise the floor you have to protect
"lower level" jobs to some extent, protect the
value of human labor vs. global competition.
\_ See, you are a protectionist, too! I am not
fundamentally disagreeing with you, but I
don't think it is very easy, or perhaps not
even really possible to "protect" these
lower skill jobs without screwing up your
economy in the long run. How would you propose
doing it? Tariffs? Closing the border? Trying
to impose labor or environmental standards on
our trading partners? All of these are
problamatic, for different reasons.
\_ Well I'm not really advocating
protectionism, but that is what I see it
amounting to if you see imbalance as a big
problem. It's not something I've ever really
been concerned about.
I think we should end guest worker programs.
It does not help Americans. It's a form of
subsidy and protectionism for inefficient
uses of resources. I'm not a fan of H1B
either. We need to invest in our own people,
not bring in foreign workers, unless those
workers are truly unique. H1Bs to do
low-level interchangeable tech work is bad.
letting skilled workers move here
permanently is ok by me but only at a
controlled rate.
We need to let market forces work to find
the proper use of our own workers in our
own land.
For trade though, labor and environmental
standards have to be part of the equation.
Ethical standards can't be allowed to affect
competitive advantage. I think China has a
natural competitive advantage in mfg'ing
in its labor supply, but tax and currency
issues can still hurt us.
issues can still hurt us. I think our
national monetary policy and debt and
inflation issues hurt low-income workers
around the world and contributes to
global income disparity.
\_ I would like you to explain your last
sentence, because I don't see it. How
does our monetary, debt and inflation
policy hurt low-income workers around
the world?
Inflation causes rise in asset prices without corresponding wage _/
increases. Since the world economy is historically dollar-driven,
as dollar-denominated assets such as oil rise in value, poor
workers lose. They have the least assets. US policy of massive
deficit spending and monetary supply increases has broad effects
on the world economy. Dollar inflation cancels out real wage
value increases for economies dependent on the dollar.
Here are some articles:
http://www.house.gov/paul/congrec/congrec2006/cr021506.htm
http://www.atimes.com/atimes/China/HC22Ad02.html
The author of the second article has tons of other articles,
all very long and rambling. Have fun.
all very long and rambling. In that one he eventually talks about
Hitler. Have fun.
Honestly though I'm in way over my head with this economics stuff.
(Unfortunately I get the feeling that most of our politicians are
even more so.)
\_ That Asia Times article is really long and mostly disjointed.
It reminds me a lot of some of Lyndon LaRouche's stuff.
Have you actually read it? The Ron Paul thing was amusing, but
mostly wrong or irrelevant. I don't think inflation has the
effect that you seem to think that it has. The big losers in
an inflationary environment are people who depend on fixed
income investments, like retirees. The working poor don't feel
too much effect, since their paychecks are going up with prices
in a truly inflationary environment. What we are seeing now is
not really inflation, but a redistribution of purchasing power.
This is painful to the US, but probably feels pretty good to
China.
\_ I at least skimmed most of it. What exactly is wrong
in the Ron Paul speech?
China has its own income imbalance problem. I don't know if
average Chinese feels that great earning a couple bucks a day,
producing crap for Americans, with inflation in prices to
offset their wage gains. But I don't know, if overall they
are gaining real purchasing power then that's good...
Real inflation is higher than the official inflation figures.
Look at the costs of: education, medical care, drugs, energy
over the last couple decades. Wages for the lowest level jobs
have not grown much if at all. Food prices are on the rise
here and in China.
Inflation hits the poor and middle class much more than the
wealthy. Their savings are depreciated and the low wages
don't keep pace, and they don't have valuable assets.
\_ We are not in any kind of inflationary environment. If
we were, wages would be going up as well as prices, that
is what I keep telling you. Some things have gone up in
price, but many things are going down, like just about
anything that can be built in China. Real purchasing power
for urban Chinese has been going up very fast, but the
rural farmers are being left behind. A discussion of what
is wrong with the Gold Standard would require a new
topic, I am not going to go into it here. Inflation
has winners and losers, to be sure, but you can't just
make the blanket statement that it hurts the poor more
than the rich. Economically, it is actually the opposite
of that, because the poor have no assets to lose, while
many rich become poor (okay, usually middle class) in an
inflationary environment. Things like bonds get killed in
inflation. Stocks do poorly as well. Some kinds of hard
assets (like land) hold up well, but that is not how most
rich people hold their wealth anymore.
\_ Do you really think there is no inflation? I think we're
done here as you're just making contrary assertions and
this thread is gigantic.
\_ Do you want me to point you to any of the official
or unofficial statistics from the experts who measure
inflation? Inflation is low by any reasonable standard,
certainly lower than 5%/yr and probably about what
the BLS states as official inflation at ~2.5%/yr. I
don't think there is *no* inflation, but I think it
is very low and you haven't presented any evidence
otherwise, other than some anecdotal evidence. You are
the one making the unusual claim, you need to provide
proof of it. Wages have been going up less than prices,
but that is not the definition of "inflation."
I think you are just confused about what the term
means.
\_ I'm kinda too busy today to look up stuff for you
or talk about this more. Try googling for inflation
articles. Official government inflation figures are
not necessary reflective of real world inflation.
Inflation also doesn't act equally on all prices
and wages due to the nature of how the money supply
works. You also haven't pointed out any specific
error in the Ron Paul thing which I'd be interested
in. Also, look up inflation in China for example.
\_ Dude, I read The Economist every week. You are
simply speculating. Real inflation might be a
small amount more than reported inflation, but
not by much, at least not over the whole
economy. Ron Paul's desire to go back to the
Gold Standard marks him as a total fruitcake:
you lose control over your monetary policy in
such a monetary regime and would kill economic
growth to boot. No serious economist advocates
such a regime and would kill economic growth
to boot. No serious economist advocates
it, only a bunch of loons. I told you that
discussion is waaay to long and involved to go
into as an aside, but since you asked...
\_ Our monetary policy was primarily used to
allow massive government debt and price
bubbles. I fail to see how the current
situation is good in the long run.
Consumer debt is also the highest ever.
The US economy grew just fine before the
current system.
I also don't accept the "no serious expert"
line of reasoning.
The modern system is to conduct monetary
policy as if no recession can ever be allowed
to occur. But the reality is that this policy
is financed by endless expansion of debt and
inflation. Instead of natural corrective
recessions we are building up to some kind
of major crisis. It's like over-aggressive
fire prevention policy that ends up creating
a giant inferno when the forest gets too dry.
\_ Gloom and doomers are always with us.
We used to have much worse downturns, like
the Great Depression, the Panic of 1983 and
the Panic of 1837, before we went off the
Gold Standard. Only people with a serious
misunderstanding of history and economics
like Ron Paul want to bring back the
"good ole days" of 20%+ unemployment.
\_ The gold standard didn't cause the great
depression. It was irresponsible fiscal
policy. The central bank still has a lot
of power to affect money supply with a
gold standard. Prior to the Great
Depression in the 20's the Fed allowed
credit to grow beyond what could be
supported by reserves, much like the
mortgage crisis today. Result was the
the stock price bubble. When that crashed,
stock price bubble. When that crashed,
it also failed to act. The UK left the
gold standard in 1931, but it had already
been abandoned in WWI. The conditions
leading to the great depression and how
it was dealt with can't be chalked up
to the use of the gold standard.
Has any candidate taken a stance for the open buying
and selling of political favors?
\_ Open? Sure. Behind closed doors in smokey
rooms? Not a chance.
\_ I'm not sure you parsed my question properly.
\_ Uhm, maybe not.
\_ Clinton takes a lot of lobbyist money. Edwards
does not.
\_ I don't particularly like Clinton so I'm focusing
on Obama vs. Edwards. I'm personally a
conservative-leaning independent. Obama seems to
be in a better position to beat Hillary in the
primary. Have you considered that in your
electability calculations?
\_ I don't have any particular reason to
dislike Obama and I actually think he is
a pretty swell guy. I think he is less likely
to win in Nov, but I would certainly vote
for him against any GOP candidate I can
imagine. -Edwards' supporter
\_ I think that Edwards has a better chance in
the general election, but I would gladly
vote for either Edwards or Obama. -ES
It seems to me that Obama has done more in this area
than Edwards.
Obama had the wisdom not to authorize the Iraq war in
the first place.
Free trade is a mostly meaningless term to me. I
support it on textbook principle but the real world
isn't so simple.
\_ Obama didn't vote on the Iraq War as he was in
the Illinois State Senate at the time, I believe.
\_ Yeah. He spoke out against it in 2002 though:
http://tinyurl.com/3djwm5 (barackobama.com)
\_ "By contrast, I can't find a single example of any reporter or
commentator on the major networks or news outlets referring to the
Gallup poll at all, with the lone exception of UPI." Wait, I
thought UPI was the untrustworthy one with no original reporting?
\_ The Zogby poll was an internet poll? Was the number 1 canidate
Ron Paul? |
| 5/23 |
|
| www.talkingpointsmemo.com/horsesmouth/2007/11/media_lavishes.php Horses Mouth Home Media Lavishes Attention On Bogus Internet Poll Showing Hillary Losing To Repubs -- And Ignores Reputable Poll Finding Opposite November 27, 2007 -- 11:03 AM EST // // Ladies and gentlemen, a tale of two polls. Yesterday two polling firms -- Zogby and Gallup -- released surveys of the presidential race that offered strikingly different conclusions. observed yesterday, the Zogby poll is completely out of sync with multiple other national polls finding Hillary with a lead over the GOP candidates. The Zogby poll actually found that Mike Huckabee is leading Hillary in a national matchup. The Gallup findings were in line with most other surveys. I don't need to tell you which poll got all the media attention. The Zogby survey was covered repeatedly on CNN, earned coverage from MSNBC, Fox News, and Reuters and was covered by multiple other smaller outlets. By contrast, I can't find a single example of any reporter or commentator on the major networks or news outlets referring to the Gallup poll at all, with the lone exception of UPI. While the Zogby poll was mentioned by multiple reporters and pundits, the only mentions the Gallup poll got on TV were from Hillary advisers who had to bring it up themselves on the air in order to inject it into the conversation. You could argue that the Zogby poll got all the coverage it did precisely because it is out of sync with multiple other polls, and thus is news. But the truth is that the reporters and editors at the major nets know full well that the Zogby poll is bunk -- yet they breathlessly covered it anyway. Worse, the Zogby poll was covered with few mentions either of its dubious methodology or of the degree to which its findings don't jibe with other surveys. Bottom line: The Zogby poll was considered big news because many in the political press are heavily invested in the Hillary-is-unelectable narrative for all kinds of reasons that have little to do with a desire to, you know, practice journalism. |
| www.csua.org/u/k3z -> www.iht.com/articles/2006/01/10/news/health.php Advanced Search Rein on drug costs slows health spending By Robert Pear Published: TUESDAY, JANUARY 10, 2006 WASHINGTON: The growth of American spending on health slowed in 2004, mainly because insurers reined in drug costs so that spending on pharmaceuticals increased at the slowest rate in a decade, the Bush administration has announced. That represents 16 percent of the US economy, the highest share on record. This was the first year of single-digit growth in retail drug sales since 1994. But spending on hospitals and doctors' services surged in 2004, and the country spent far more on them than on prescription drugs. After stem-cell breakthrough, the work begins The 86 percent increase in spending for hospital care and the 9 percent increase in payments to doctors were the highest recorded since 1991. The new figures do not reflect the cost of the Medicare prescription drug benefit, which took effect this month. Stephen Heffler, a government economist, has previously said that the benefit will have "only a minor impact on overall health spending," but will redistribute costs so the US government bears a larger share of drug spending. Cynthia Smith, an economist at the federal Centers for Medicare and Medicaid Services, said the slowdown in drug spending resulted from greater use of low-cost generic drugs, in place of brand-name products; and "reduced consumption of certain drugs" because of safety concerns. "US health care spending grew more slowly in 2004 than in the three previous years," Smith and three colleagues said in a report published in the journal Health Affairs. "Prescription drug spending has been the strongest factor in the slowdown in recent years." Mark Merritt, president of the Pharmaceutical Care Management Association, said the new data vindicated the techniques used by members of his organization to manage drug spending. But, Merritt said, "lobbyists for brand-name drug makers, chain drugstores, trial lawyers and others are working to undermine many of the tools we have used to reduce the rate of growth in drug spending." For example, he said, brand-name drug companies have resisted state laws that encourage use of generic drugs. Andrea Hofelich, a spokeswoman for the Generic Pharmaceutical Association, a trade group, said patients received generic drugs for 53 percent of the prescriptions filled in 2004. But, Hofelich said, the costs were so much lower that those drugs accounted for only 12 percent of drug spending. The latest slowdown must be viewed in context, Ginsburg said. Health spending grew at abnormally high rates in 2001 and 2002 because consumers forced insurers to relax many restrictions of managed care, like rules requiring patients to get authorization from a primary care doctor before visiting a specialist. "The rate of growth in health spending slowed in 2004, but it's still substantially higher than trends in earnings, which are the key to being able to afford health care," Ginsburg said. "Health insurance is becoming less affordable to more people." |
| tinyurl.com/22bc73 -> www.commentarymagazine.com/viewarticle.cfm/Can-France-Be-Saved-10869?page=all God is Not Great by Christopher Hitchens French elections can be as entertaining as Russian roulette. Twelve years ago, in early 1995, it was taken for granted that Edouard Balladur, a conservative prime minister, would succeed the outgoing socialist president Franois Mitterrand without further ado. So, evidently, was Jacques Chirac, another conservative Gaullist and a former prime minister (and unsuccessful contender for the presidency). But then a satiric TV show, Les Guignols de l'Info (The News Puppets), started featuring Chirac as a French-style Forrest Gump who would answer questions on any topic, political or economic, with the phrase "Eat apples." In April 1995, Jacques "Apple" Chirac won out over both Balladur and the socialist candidate Lionel Jospin. Two years later, Chirac called a new parliamentary election, not in order to solve a crisis between the executive and the legislature but simply to suit his political convenience. This, though allowed under the constitution, had never been done before, and the public did not like it. His parliamentary majority was ousted and replaced by the socialists. Jospin now became prime minister and remained in place for five years. The next presidential election, in 2002, was even more sensational. Bidding for a second seven-year term, Chirac was challenged again by Jospin, who this time looked sure to win. In the first round, a plethora of left-wing candidates pulled so many votes away from Jospin that he was reduced to the third position, behind Chirac and the far-Right agitator Jean-Marie Le Pen, and was ejected from the race. On the second ballot, some 80 percent of the voters backed Chirac over Le Pen. Chirac was foolish enough to believe they had elected him. First the presidential election, with its first ballot on April 22 followed by a runoff between the two top vote-getters on May 6; Two years ago, everyone would have sworn that the presidential winner would be the maverick conservative Nicolas Sarkozy, France's minister of the interior. Then Sarkozy's fortunes declined sharply, while those of another star--and another maverick--were rising: Sgolne Royal, the socialist governor of Poitou-Charentes in western France. Early this year, Sarkozy made a strong comeback, and Royal fell from grace. At that point a third candidate, Franois Bayrou, a nice, decent, articulate, over-ambitious centrist, unexpectedly entered the picture, effectively challenging both Royal and Sarkozy. Complicating matters still further was the perennial candidacy of Le Pen. By the time this issue of COMMENTARY reaches subscribers, the first ballot will be over, and the two candidates with the highest number of votes will have begun battling it out for the May 6 runoff. Common wisdom--in America at least--is that the French are and will always remain an utterly fickle people, as individuals and as a nation. My own belief is that the vagaries of the French vote tell us a great deal about the profound uncertainties the country is now facing. II Books about "national decline" and the "growing national crisis" have been best-sellers in France for at least the past four years. The first and still the most trenchant was La France qui tombe ("Falling France," 2003), by Nicolas Baverez, a lawyer and a graduate of the immensely prestigious Ecole nationale d'administration (National School of Public Administration, or ENA). The same year saw the publication of Le Grand Gaspillage ("The Great Waste") by the distinguished Sorbonne historian Jacques Marseille, followed by the same author's La Guerre des Deux France ("The War of the Two Frances," 2004) and more recently Les Bons Chiffres pour ne pas voter nul en 2007 ("The Right Figures for a Sensible Vote in 2007"). Both Baverez and Marseille can be described as moderately conservative free-marketeers; both write columns for Le Point, the right-of-center weekly of news and opinion. Two other declinists come from a very different background. Michel Godet, a professor of industrial economy, was originally close to the Christian Left but over time developed a robust critique of French industrial and social policy. His 2003 book Le Choc de 2006 ("The Shock of 2006") pointed to the exorbitant price the country was paying for its extensive welfare state, a thesis elaborated this year in Le Courage du bon sens ("The Courage of Common Sense"). Claude Allgre, a geologist of repute, served as a minister in Jospin's government, where he tried and failed to reform the French educational system. Subsequently he became one of the country's best columnists, first at L'Express, the left-of-center weekly, and then at Le Point. A fifth should be mentioned: Louis Chauvel, a young sociologist at the Institut de sciences politiques de Paris (Paris Institute for Political Science, or "SciencesPo," as everybody calls it), who has produced a short, dry assessment of the collapse of the French middle class, Les Classes Moyennes la drive ("The Middle Class Adrift"). Like Godet and Allgre, Chauvel was seen initially as a man of the Left, and is still supposed to be close to that orientation--which makes his indictment all the more notable. To understand where these various authors are coming from, it helps to bear in mind the bedrock fact that France is one of the founding nations of Europe--that is to say, one of its oldest nation-states. Since the Great Revolution of 1789, since Napoleon, it has been a modern, secular society. In the 19th and 20th centuries it grew into a world leader in science, technology, finance, culture, art, and literature. It conquered and then emancipated a large colonial empire. And it took a decisive role in the formation of what is set to become a 21st-century superpower, the European Union. Very few countries can lay claim to such a glorious destiny, or to a more stable national identity. To be endowed with a special destiny and identity is, in itself, a political blessing. But what if that glory is challenged, and the national identity eroding? What if the actual stuff France is made of--its shared culture, its assurance of a common heritage--is disintegrating? The early decades of the 20th century were a time when France, suddenly mired in a demographic and economic slowdown, seemed to hover between national pride and national despair. This culminated in the full-fledged disaster of 1940, when France was crushed by Germany and subjected to nation-wide occupation. Fortunately, Germany was crushed in turn by the Anglo-Saxon powers and Soviet Russia, and France was allowed to recover. From the 1950's through the 1970's, there was much talk in the world of a Japanese miracle, a German miracle, even an Italian miracle. National independence and national influence were restored, demographics improved, the economy boomed once more. Despite warning signs, like the simultaneous rise of Le Pen's National Front on the far Right and of various Trotskyite and other radical groups on the far Left, this newfound optimism lasted for two more decades. Drawing from the works of our four or five whistleblowers and others, we can reliably paint the following portrait of France today. Demographic Upheaval Before the 1789 revolution and the Napoleonic wars, France, a very rich agricultural country, was the most populous state in Europe, with 27 million inhabitants. Right after the defeat at Waterloo, the birthrate started to decline, and by the last third of the 19th century had fallen close to zero. From 1800 to 1900, the French population increased by only 30 percent, whereas all other European nations experienced a growth rate ranging from 100 to 300 or even 400 percent. Hence, too, its second and more humiliating defeat in 1940. After 1945, the country made a startling demographic comeback. This could be attributed in part to another cyclical phenomenon known as the postwar baby boom--whereby, after the carnage of World War II, all combatant nations started to produce an average of three to four children per family. In France, additional factors were also at play, including immigration from other European countries or from overseas colonies. All in all, the French population grew by... |
| www.house.gov/paul/congrec/congrec2006/cr021506.htm RON PAUL OF TEXAS Before the US House of Representatives February 15, 2006 The End of Dollar Hegemony A hundred years ago it was called dollar diplomacy. After World War II, and especially after the fall of the Soviet Union in 1989, that policy evolved into dollar hegemony. But after all these many years of great success, our dollar dominance is coming to an end. It has been said, rightly, that he who holds the gold makes the rules. In earlier times it was readily accepted that fair and honest trade required an exchange for something of real value. Then it was discovered that gold held a universal attraction, and was a convenient substitute for more cumbersome barter transactions. Not only did gold facilitate exchange of goods and services, it served as a store of value for those who wanted to save for a rainy day. Though money developed naturally in the marketplace, as governments grew in power they assumed monopoly control over money. Sometimes governments succeeded in guaranteeing the quality and purity of gold, but in time governments learned to outspend their revenues. New or higher taxes always incurred the disapproval of the people, so it wasnt long before Kings and Caesars learned how to inflate their currencies by reducing the amount of gold in each coin-- always hoping their subjects wouldnt discover the fraud. But the people always did, and they strenuously objected. This helped pressure leaders to seek more gold by conquering other nations. The people became accustomed to living beyond their means, and enjoyed the circuses and bread. Financing extravagances by conquering foreign lands seemed a logical alternative to working harder and producing more. Besides, conquering nations not only brought home gold, they brought home slaves as well. Taxing the people in conquered territories also provided an incentive to build empires. This system of government worked well for a while, but the moral decline of the people led to an unwillingness to produce for themselves. There was a limit to the number of countries that could be sacked for their wealth, and this always brought empires to an end. When gold no longer could be obtained, their military might crumbled. In those days those who held the gold truly wrote the rules and lived well. When gold was used, and the rules protected honest commerce, productive nations thrived. Whenever wealthy nations-- those with powerful armies and gold-- strived only for empire and easy fortunes to support welfare at home, those nations failed. Today the principles are the same, but the process is quite different. The truth now is: He who prints the money makes the rules-- at least for the time being. Although gold is not used, the goals are the same: compel foreign countries to produce and subsidize the country with military superiority and control over the monetary printing presses. Since printing paper money is nothing short of counterfeiting, the issuer of the international currency must always be the country with the military might to guarantee control over the system. This magnificent scheme seems the perfect system for obtaining perpetual wealth for the country that issues the de facto world currency. The one problem, however, is that such a system destroys the character of the counterfeiting nations people-- just as was the case when gold was the currency and it was obtained by conquering other nations. And this destroys the incentive to save and produce, while encouraging debt and runaway welfare. The pressure at home to inflate the currency comes from the corporate welfare recipients, as well as those who demand handouts as compensation for their needs and perceived injuries by others. In both cases personal responsibility for ones actions is rejected. When paper money is rejected, or when gold runs out, wealth and political stability are lost. The country then must go from living beyond its means to living beneath its means, until the economic and political systems adjust to the new rules-- rules no longer written by those who ran the now defunct printing press. Dollar Diplomacy, a policy instituted by William Howard Taft and his Secretary of State Philander C Knox, was designed to enhance US commercial investments in Latin America and the Far East. McKinley concocted a war against Spain in 1898, and (Teddy) Roosevelts corollary to the Monroe Doctrine preceded Tafts aggressive approach to using the US dollar and diplomatic influence to secure US investments abroad. The significance of Roosevelts change was that our intervention now could be justified by the mere appearance that a country of interest to us was politically or fiscally vulnerable to European control. Not only did we claim a right, but even an official US government obligation to protect our commercial interests from Europeans. This new policy came on the heels of the gunboat diplomacy of the late 19^th century, and it meant we could buy influence before resorting to the threat of force. By the time the dollar diplomacy of William Howard Taft was clearly articulated, the seeds of American empire were planted. And they were destined to grow in the fertile political soil of a country that lost its love and respect for the republic bequeathed to us by the authors of the Constitution. It wasnt too long before dollar diplomacy became dollar hegemony in the second half of the 20^th century. This transition only could have occurred with a dramatic change in monetary policy and the nature of the dollar itself. Between then and 1971 the principle of sound money was systematically undermined. Between 1913 and 1971, the Federal Reserve found it much easier to expand the money supply at will for financing war or manipulating the economy with little resistance from Congress-- while benefiting the special interests that influence government. We were spared the destruction that so many other nations suffered, and our coffers were filled with the worlds gold. But the world chose not to return to the discipline of the gold standard, and the politicians applauded. Printing money to pay the bills was a lot more popular than taxing or restraining unnecessary spending. In spite of the short-term benefits, imbalances were institutionalized for decades to come. The 1944 Bretton Woods agreement solidified the dollar as the preeminent world reserve currency, replacing the British pound. Due to our political and military muscle, and because we had a huge amount of physical gold, the world readily accepted our dollar (defined as 1/35^th of an ounce of gold) as the worlds reserve currency. The dollar was said to be as good as gold, and convertible to all foreign central banks at that rate. For American citizens, however, it remained illegal to own. This was a gold-exchange standard that from inception was doomed to fail. She printed more dollars for which there was no gold backing. But the world was content to accept those dollars for more than 25 years with little question-- until the French and others in the late 1960s demanded we fulfill our promise to pay one ounce of gold for each $35 they delivered to the US Treasury. This resulted in a huge gold drain that brought an end to a very poorly devised pseudo-gold standard. It all ended on August 15, 1971, when Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold. In essence, we declared our insolvency and everyone recognized some other monetary system had to be devised in order to bring stability to the markets. Amazingly, a new system was devised which allowed the US to operate the printing presses for the world reserve currency with no restraints placed on it-- not even a pretense of gold convertibility, none whatsoever! Though the new policy was even more deeply flawed, it nevertheless opened the door for dollar hegemony to spread. Realizing the world was embarking on something new and mind boggling, elite money managers, with especially strong support from US authorities, struck an agreement with OPEC to price oil in US dollars exclusively for all worldwide transactions. This gave the dollar a special place among world currencies and in essence backe... |
| www.atimes.com/atimes/China/HC22Ad02.html THE WAGES OF NEO-LIBERALISM PART 1:Core contradictions By Henry C K Liu The US trade deficit with China ballooned in 2005 to US$202 billion, more than one-quarter of the total deficit. Rising trade imbalance between the US and China in recent years has given rise to intense pressure from the United States on China to revalue the fixed exchange rate of its currency, which had been pegged at 828 yuan to a dollar within a narrow band of 003% for a decade, from 1995-2005. On July 21, 2005, after repeated pronouncements that no revaluation was necessary or even being considered, China announced a surprise 2% appreciation of the currency, putting it at 811 yuan to the US dollar. It also announced that the yuan would henceforth be pegged with the same narrow range to a basket of foreign currencies that includes the dollar, the euro, the yen and others likely to reflect China's trade relationships with the rest of the world. The components and weight of different currencies within the basket is not disclosed to the market. China appears to be following Singapore's managed-float model, keeping both weights and effective bands confidential to allow maximum flexibility within a narrow range tied to a reference peg to the dollar. Many saw it as an obvious political move to appease US pressure. This pressure from the US is motivated by the misguided conventional assumption that a lower exchange rate of the dollar will reduce the US trade deficit, despite clear historical data showing that past revaluations of the Japanese yen and the German mark had not reduced US trade deficits with these major trade partners in the long run. All such revaluations did was to lower the domestic cost in local-currency terms more than raise the dollar price of Japanese and German exports. The net effect was deflation in Japan and Germany, with inflation in the US while the US trade deficit continued. The dollar takes the form of a US Federal Reserve note, a monetary instrument issued by a central bank. The yuan takes the form of Chinese People's Currency (renminbi, or RMB) issued by the People's Bank of China (PBoC), another central bank. Both are fiat currencies issued by central banks in that they are money with no intrinsic value, not backed by gold or other species of value. Both currencies are not issued directly by their respective governments, but by their respective central banks. This means that the full faith and credit of the nation is not directly behind either of these currencies. A holder of these fiat currencies cannot go to their government to claim a piece of the national wealth. The values of either of these currencies are determined by their purchasing powers in the respective economies as affected by the monetary policies of their respective issuers, ie, the respective central banks. The holder of a dollar is entitled to exchange it at the Fed for another dollar, no more, no less. The dollar's purchasing power within the US is affected by the Fed's monetary policy as such policy affects the inflation or deflation rates in the US economy. Thus the exchange rate of the two currencies reflects the domestic purchasing power differential caused by the monetary polices of their respective central banks, which are in principle politically independent. The trade imbalance between the US and China is not caused by the exchange rate of the two currencies. It is caused mainly by a disparity in the factors of production, such as wages and rent as expressed in prices in the two trading economies. The Chinese trade imbalance with the US is primarily caused by Chinese wages and rent being too low compared with equivalent productivity in US wages and rent. The dysfunctionality in the exchange rate between the yuan and the dollar is the result, not the cause, of the trade imbalance. To correct this trade imbalance, Chinese wages and rent need to rise, not the Chinese currency. Wages and rent in the two trading economies need to converge toward parity, rather than the currencies to diverge from any particular exchange rate that has been in operation for a decade. The yuan at 812 to $1 is already valued at twice the purchasing-power-parity gap of 4 between it and the dollar within their respective economies. Wage disparity between China and the US ranges from 20 to 50 times in various sectors, and an exchange rate that reflected such a wide disparity would border on the ridiculous. A stable exchange rate is not only beneficial to trade, it is also fundamentally critical to global financial stability. Every financial crisis since the 1971 collapse of the Bretton Woods fixed-exchange-rate regime has been caused by exchange-rate instability. Exchange-rate policies cannot be substitutes for structural economic adjustments necessary for mutually beneficial trade between two economies. Nor can exchange-rate policies be substitutes for sound domestic monetary or economic policy. When two economies at uneven stages of development trade, a trade surplus in favor of the less-developed economy is natural and just, until the less developed economy catches up with the more developed one, otherwise it would be imperialistic exploitation, not trade. Market forces on exchange rates are derived from the relative strength of trading economies. Foreign-exchange markets express the net summary judgments of market participants on the economic health of trading economies as they are affected by government fiscal and central bank monetary policies. Markets use exchange-rate fluctuation to carry the message of aggregate judgments to the monetary and fiscal authorities of the trading economies. These authorities, usually the central bank and the Treasury, cannot ignore such market sentiments without a cost. For economies where the currencies are freely convertible, the cost can be massive attacks on their currencies by speculators, such as hedge funds, that would quickly drain the government's foreign-exchange reserves and cause a collapse in the economy's debt market. For economies that practice exchange and capital control, the penalty would be a drain in foreign reserves and a reduction in trade in the case of a deficit. In the case of a trade surplus, the penalty would be a drain of domestic currency capital into growing foreign-exchange reserves. In the current global central-banking regime, fiat currencies are issued mostly directly by central banks or by banks authorized by the central bank to issue currency, such as in former British colonies like Hong Kong. Central banks are supposed to be politically independent in their key role of maintaining the stability and the value of a nation's fiat money, unaffected by constant and relentless political pressure for easy money. The value of the fiat currency of a sovereign nation is backed only by the nation's economic health and by the issuing government's acceptance of it for payment of taxes. It enjoys monopoly status as legal tender for settlement of all debts within the country's borders. Most sovereign nations allow only their own legal tenders to circulate within their borders and require that foreign currencies be first converted into local legal tenders before being used in domestic markets. For cross-border transactions, a foreign-exchange market is necessary to inter-convert legal tenders of trading nations at economically equitable rates. When the foreign-exchange value of the fiat currency of a country moves beyond what the government or the foreign-exchange market deems appropriate, the correction needs to come from a readjustment of the structure of its economy, not from artificial manipulation of the exchange rate of its currency. Regardless of whether the exchange rate is fixed by government or by market forces, the volatility in the gap between the economic value of a fiat currency and its exchange rate is the main cause of financial instability. Such instability has caused recurring financial crises around the world in past decades since the collapse in 1971 of the Bretton Woods regime of fixed exchange rates based on a gold-backed dollar. The philosophical underpinning of a central-banking regime is the assumption tha... |
| tinyurl.com/3djwm5 -> www.barackobama.com/2002/10/02/remarks_of_illinois_state_sen.php Barack Obama Against Going to War with Iraq | October 02, 2002 October 2, 2002 Good afternoon. Let me begin by saying that although this has been billed as an anti-war rally, I stand before you as someone who is not opposed to war in all circumstances. The Civil War was one of the bloodiest in history, and yet it was only through the crucible of the sword, the sacrifice of multitudes, that we could begin to perfect this union, and drive the scourge of slavery from our soil. My grandfather signed up for a war the day after Pearl Harbor was bombed, fought in Patton's army. he heard the stories of fellow troops who first entered Auschwitz and Treblinka. He fought in the name of a larger freedom, part of that arsenal of democracy that triumphed over evil, and he did not fight in vain. After September 11th, after witnessing the carnage and destruction, the dust and the tears, I supported this administration's pledge to hunt down and root out those who would slaughter innocents in the name of intolerance, and I would willingly take up arms myself to prevent such tragedy from happening again. And I know that in this crowd today, there is no shortage of patriots, or of patriotism. What I am opposed to is the cynical attempt by Richard Perle and Paul Wolfowitz and other armchair, weekend warriors in this administration to shove their own ideological agendas down our throats, irrespective of the costs in lives lost and in hardships borne. What I am opposed to is the attempt by political hacks like Karl Rove to distract us from a rise in the uninsured, a rise in the poverty rate, a drop in the median income - to distract us from corporate scandals and a stock market that has just gone through the worst month since the Great Depression. A war based not on reason but on passion, not on principle but on politics. Now let me be clear - I suffer no illusions about Saddam Hussein. A man who butchers his own people to secure his own power. He has repeatedly defied UN resolutions, thwarted UN inspection teams, developed chemical and biological weapons, and coveted nuclear capacity. The world, and the Iraqi people, would be better off without him. But I also know that Saddam poses no imminent and direct threat to the United States, or to his neighbors, that the Iraqi economy is in shambles, that the Iraqi military a fraction of its former strength, and that in concert with the international community he can be contained until, in the way of all petty dictators, he falls away into the dustbin of history. I know that even a successful war against Iraq will require a US occupation of undetermined length, at undetermined cost, with undetermined consequences. I know that an invasion of Iraq without a clear rationale and without strong international support will only fan the flames of the Middle East, and encourage the worst, rather than best, impulses of the Arab world, and strengthen the recruitment arm of Al Qaeda. So for those of us who seek a more just and secure world for our children, let us send a clear message to the President today. Let's finish the fight with Bin Laden and Al Qaeda, through effective, coordinated intelligence, and a shutting down of the financial networks that support terrorism, and a homeland security program that involves more than color-coded warnings. Let's fight to make sure that the UN inspectors can do their work, and that we vigorously enforce a non-proliferation treaty, and that former enemies and current allies like Russia safeguard and ultimately eliminate their stores of nuclear material, and that nations like Pakistan and India never use the terrible weapons already in their possession, and that the arms merchants in our own country stop feeding the countless wars that rage across the globe. Let's fight to make sure our so-called allies in the Middle East, the Saudis and the Egyptians, stop oppressing their own people, and suppressing dissent, and tolerating corruption and inequality, and mismanaging their economies so that their youth grow up without education, without prospects, without hope, the ready recruits of terrorist cells. Let's fight to wean ourselves off Middle East oil, through an energy policy that doesn't simply serve the interests of Exxon and Mobil. The consequences of war are dire, the sacrifices immeasurable. We may have occasion in our lifetime to once again rise up in defense of our freedom, and pay the wages of war. But we ought not -- we will not -- travel down that hellish path blindly. Nor should we allow those who would march off and pay the ultimate sacrifice, who would prove the full measure of devotion with their blood, to make such an awful sacrifice in vain. |