Tag Archives: United States

The Coming War in the South China Sea

Quite a podcast to listen to over at War is Boring.

Of all the potential powder kegs on earth, none is more precarious than the South China Sea. Vietnam, China, Taiwan, Malaysia and the Philippines all have claims there. China builds artificial islands to reinforce its claims and the U.S. Navy patrols nearby.

The various militaries have brushed by each other in the water and in the air. “The Chinese people do not want to have war,” Chinese vice foreign minister Liu Zhenmin said Thursday. “We will be opposed to [the] U.S. if it stirs up any conflict … if the Korean War or Vietnam War are replayed, then we will have to defend ourselves.”

This week on War College, we talk to U.S. Naval War College professor James Holmes about the South China Sea, China’s artificial islands and the entangling alliances that may lead to war.

This is America: You’re supposed to play by the broken rules until you can fix them, even if they’re fixed beyond correction.

Rolling Stone asks What Constitutes Appropriate Rebellion?

Watching the preparations Ferguson, Missouri, made for St. Louis County Prosecuting Attorney Robert McCulloch’s announcement of the grand jury findings in the case of Officer Darren Wilson’s killing of Michael Brown was deeply unsettling. A dismal air of inevitability hung over the event. The Ferguson police had negotiated some terms with protesters, but they still had their police tanks and gas canisters at the ready. Even in Clayton, Missouri, they were putting locks on the fucking mailboxes. That’s how little you could trust these people. You couldn’t trust them with mail. Civic unrest trumps civic failure, and nothing occludes institutional contempt for the citizenry like wanton displays of disrespect for process. This is America: You’re supposed to play by the broken rules until you can fix them, even if they’re fixed beyond correction.

Once McCulloch began speaking, his office and Ferguson’s anodyne preparations took on a note of the sinister. Announcing a “no bill” grand jury vote on an explicit 10-shot killing late at night might been chalked up to the bumbling of an overwhelmed office during the day, but later it seemed almost ideal for the purposes of impeaching protester backlash by having as many pissed off people off from work with nothing to do but be on the street. A target-rich environment of institutional excuses. All those weeks of leaked grand jury details — optimistically written up by the media as tempering details intended to manage expectations — instead seemed like prep. Rather than letting off steam slowly, it felt like stoking the fire. 

Canadian rhetoric makes no difference

The tough talk that has been coming out of Ottawa towards Moscow; it makes no difference at all.

The Conservative government’s tough rhetoric over Russia’s actions in Ukraine may play well to some voters domestically, but analysts doubt it will have any impact on curtailing Moscow’s policies in the region.

“I think the only people Putin’s going to pay any attention to, if he pays any attention at all, are going to be the United States and the European Union, above all Germany,” said Randall Hansen, director of the University of Toronto’s Centre for European, Russian and Eurasian Studies.

“The United States, because it’s the global super power, and Germany because it’s a major importer of Russian gas, which on the one hand gives Putin leverage, and on the other hand, he’s also dependent on Germany.

“Canada doesn’t matter in this in the slightest. We can rant and yell and threaten. It will make no difference.”

He’s not alone

Piotr Dutkiewicz, a political science professor at Carleton and the former director of the Institute of European, Russian and Eurasian Studies, said it’s relatively easy for the government to criticize because Canada doesn’t have extensive economic relations with Russia and there are no large Russian investments in Canada.

However, he notes that Canadian companies do have $3-billion worth of investment in Russia and the government should take that into consideration when speaking out.

“I think we should take a more balanced, I’m not saying uncritical, I’m saying more balanced position, taking into the equation Canadian interests in Russia,” Dutkiewicz said.

“If the Canadian government decides to be critical it should be critical, but at the same time we should watch what others are doing and how, by our criticisms, we’re really helping Ukraine.”

Dutkiewicz said that Canada is losing its reputation as a negotiator and instead is engaging in rhetoric stronger than that of the U.S., Germany or France.

“With their very heated rhetoric and no action we’re becoming a paper tiger in this process,” he said. “I really don’t like Canada to be seen as a paper tiger who is roaring without having any tools to implement its outrage.”

But the experts agreed that the government’s words have little to do with foreign policy.

“Harper and Baird, I think, are both principled democrats and have a principled commitment to liberal democracies such as Israel and a principled opposition to autocratic governments,” Hansen said. “But this is really about domestic politics. So they’re making a play to the Ukrainian community in Canada.

Report: U.S. Could Be Plunged Into Blackout By Minimal Attacks

It seems that Saskatoon is not the only jurisdiction not paying attention to infrastructure

A coordinated attack on just nine of the United States’ 55,000 electric-transmission substations on the right day could cause a blackout from Los Angeles to New York City, according to the study conducted by the Federal Energy Regulatory Commission. The study’s results have been known for months to select people in federal agencies, Congress and the White House, but were reported publicly for the first time Wednesday. The WSJ did not publish a list of the 30 most critical substations identified by the FERC study.

Electric substations play a vital role in keeping the electric grid humming by boosting voltage for long-distance travel and then transforming it to usable levels upon arrival. On a hot summer day, with the grid operating at high capacity, FERC found that taking out the right amount of substations could lead to a national blackout lasting weeks or even months.

Why cycling is so dangerous in the United States (and Saskatoon)

Americans are not only among the world’s least avid cyclists; they are also among the most likely to get killed. Here are a few interesting—if morbid—takeaways. Pedal safely!

  • Roughly “17% of all cycling fatalities were involved in a hit-and-run crash in which one (or several) of their crash opponents fled the scene (2005-2011, FARS) – presumably the motorist(s). This is nearly four times the rate of hit-and-run involvement for all recorded traffic fatalities over the same period in the United States (4%).”
  • “Investigating officers on the scene of fatal bicycle crashes in the United States found no contributory factor on the part of the motorist in 46% of cases.”
  • “An overwhelming majority of fatal bicycle crashes occur in dry or clear atmospheric conditions – 94% in the USA and 87% in Europe.”
  • “One quarter of (deceased) cyclists for which an alcohol test was performed returned blood alcohol values above 0.08 mg/ltr which constitutes a drink-driving offense in all 50 US states.”
  • “In the United States, most fatal bicycle-vehicle collisions involved a passenger car or light truck (Sports Utility Vehicle) though 10% of fatal bicycle collisions involved a large truck.”
  • “In the United States, 36% of all fatal bicycle crashes for the period 2005-2011 occurred in junctions with another 4% in driveways (commercial and private) most likely caused by entering or exiting motor vehicles.”
  • “In the United States, the share of fatal bicycle crashes occurring in low-speed zones was lower than in Europe – possibly because low-speed traffic calmed zones are relatively less common in the United States.”
  • “In the United States, 27% of deceased cyclists for which helmet use was recorded wore helmets in 2010 and 2011.”
  • “Red light running by cyclists … is an often-cited contributory factor in fatal and serious injury bicycle crashes (at least in the United States).”
  • “Motorists were charged with traffic violations in nearly one third of all fatal bicycle crashes and investigating officers identified a crash-contributing factor on the part of the motorist in over half of all fatal bicycle crashes.”
  • “Data from the United States indicate that cyclists were imputed with an improper action in 68% of fatal bicycle crashes (though, as noted earlier, this may be biased as the cyclist was not able to give their version of events).”

Changing face of the United States

I read this and I can’t help but think that the United States is going through a massive societal reordering because of horrible economic decisions made because of globalization

Some improvement in the U.S. economy and declines in the jobless rate, plus gains in stock and home prices, are failing to resonate with many Americans whose incomes are struggling to catch up to where they were before the financial crisis.

But to many retail experts and economists there are other less cyclical factors at play. Consumers are spending more. Government figures show monthly personal consumption has risen for seven straight months, with November’s outlay marking the fastest increase in five months. But they just are not spending in the shopping malls like they used to.

And that means that, even if the economy picks up significantly, retailers of many products could still struggle.

“We are in a something of an evolutionary process, said Bill Martin, founder of data firm ShopperTrak, which monitors foot traffic in about 60,000 retail stores. Americans are spending more online and becoming more careful about what they buy, he said.

Some of this has been unfolding over a long period, although the changes might be picking up pace.

For example, department stores have found themselves on the wrong end of trends for some time. According to data compiled by Reuters, they now capture just $3.37 (U.S.) of every $100 of U.S. retail spending, the lowest since records began in 1992, when the number was nearly $9.

Some of that is explained by the rise of Wal-Mart Stores Inc. and other big-box discount retailers. But the pace of decline has picked up, with department stores losing about 0.28 percentage points of market share at an annualized rate between 2002 and 2011, compared with 0.22 in the prior 10 years.

The problem is two-fold. The middle class consumers to whom the likes of J.C. Penney Co. Inc. and Kohl’s Corp. cater have struggled with stagnant wages and a payroll tax rise, prompting them to reduce spending on apparel, said Scott Tuhy, a retail analyst at Moody’s Investors Service in New York.

I am not sure if the payroll tax increase is that big of deal but you get the point that stagnate wages are hurting America’s middle class who are leaving behind middle class stores in favour of deals online and in retailers like Wal-Mart which in turn hurts them even more as more and more of their products are made elsewhere.  It’s a vicious cycle that could take decades to run its course.

How Canada neighbor became a rogue, reckless petrostate.

From Foreign Policy of all places 

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For decades, the world has thought of Canada as America’s friendly northern neighbor — a responsible, earnest, if somewhat boring, land of hockey fans and single-payer health care. On the big issues, it has long played the global Boy Scout, reliably providing moral leadership on everything from ozone protection to land-mine eradication to gay rights. The late novelist Douglas Adams once quipped that if the United States often behaved like a belligerent teenage boy, Canada was an intelligent woman in her mid-30s. Basically, Canada has been the United States — not as it is, but as it should be.

But a dark secret lurks in the northern forests. Over the last decade, Canada has not so quietly become an international mining center and a rogue petrostate. It’s no longer America’s better half, but a dystopian vision of the continent’s energy-soaked future.

That’s right: The good neighbor has banked its economy on the cursed elixir of political dysfunction — oil. Flush with visions of becoming a global energy superpower, Canada’s government has taken up with pipeline evangelists, petroleum bullies, and climate change skeptics. Turns out the Boy Scout’s not just hooked on junk crude — he’s become a pusher. And that’s not even the worst of it.

With oil and gas now accounting for approximately a quarter of its export revenue, Canada has lost its famous politeness. Since the Conservative Party won a majority in Parliament in 2011, the federal government has eviscerated conservationists, indigenous nations, European commissioners, and just about anyone opposing unfettered oil production as unpatriotic radicals. It has muzzled climate change scientists, killed funding for environmental science of every stripe, and in a recent pair of unprecedented omnibus bills, systematically dismantled the country’s most significant long-cherished environmental laws.

The author of this transformation is Prime Minister Stephen Harper, a right-wing policy wonk and evangelical Christian with a power base in Alberta, ground zero of Canada’s oil boom. Just as Margaret Thatcher funded her political makeover of Britain on revenue from North Sea oil, Harper intends to methodically rewire the entire Canadian experience with petrodollars sucked from the ground. In the process he has concentrated power in the prime minister’s office and reoriented Canada’s foreign priorities. Harper, who took office in 2006, increased defense spending by nearly $1 billion annually in his first four years, and he has committed $2 billion to prison expansion with a “tough on crime” policy that ignores the country’s falling crime rate. Meanwhile, Canada has amassed a huge federal debt — its highest in history at some $600 billion and counting.

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Liberal critics like to say that Harper’s political revolution caught many Canadians, generally a fat and apathetic people, by surprise — a combination of self-delusion and strategic deception. That may be true, but though Canadians live in high latitudes, they’re not above baser human instincts — like greed. Harper is aggressively pushing an economic gamble on oil, the world’s most volatile resource, and promising a new national wealth based on untapped riches far from where most Canadians live that will fill their pocketbooks, and those of their children, for generations. With nearly three-quarters of Canadians supporting oil sands development in a recent poll, Harper seems to be selling them on the idea.

It gets better

THE SINGLE-MINDED PURSUIT of this petroproject has stunned global analysts. The Economist, no left-wing shill, characterized Harper, the son of an Imperial Oil senior accountant, as a bully “intolerant of criticism and dissent” with a determined habit of rule-breaking. Lawrence Martin, one of Canada’s most influential political commentators, says that Harper’s “billy-club governance” has broken “new ground in the subverting of the democratic process.” Conservative pollster Allan Gregg has described Harper’s agenda as an ideological assault on evidence, facts, and reason.

To be fair, Harper’s government does have a plan for climate change — pumping the problem to the United States and/or China. Oil sands crude transported to the United States by the proposed Keystone XL pipeline, for example, could over a 50-year period increase carbon emissions by as much as 935 million metric tons relative to other crudes. And the planned $5.5 billion Northern Gateway pipeline from Alberta to the Pacific Ocean would result in up to 100 metric tons of carbon dioxide emissions a year, from extraction and production in Canada to combustion in China — more than British Columbia’s total emissions in 2009. The 2012 National Inventory Report by Environment Canada, the country’s environmental department, actually boasts that Canada has partly reduced overall emission intensity in the oil sands “by exporting more crude bitumen.”

All this underscores Canada’s new reality: Just about any kind of rational evidence has now come under assault by a government that believes that markets — and only markets — hold the answers. Any act that industry regards as an obstacle to rapid mineral extraction or pipeline building has been rewritten with a Saudi-like flourish. One massive omnibus budget bill alone changed 70 pieces of legislation, gutting, for example, the Fisheries Act, which directly prohibited the destruction of aquatic-life habitats but stood in the way of the Northern Gateway pipeline, which must cross 1,000 waterways en route to the Pacific Ocean. Meanwhile, funding for Canada’s iconic park system has been cut by 20 percent in what critics have called a “lobotomy.” The CBC, the respected state broadcaster long scorned by Harper as an independent check on power, has suffered a series of cutbacks. The Health Council of Canada, which once ensured national health standards and innovation across Canada’s 13 provinces and territories, also got the ax. Furthermore, with the élan of a Middle Eastern petroprince, Harper appointed the head of his security detail to be ambassador to Jordan. And he did it all with nary a peep from your average Canadian.

More than a decade ago, American political scientist Terry Lynn Karl crudely summed up the dysfunction of petrostates: Countries that become too dependent on oil and gas riches behave like plantation economies that rely on “an unsustainable development trajectory fueled by an exhaustible resource” whose revenue streams form “an implacable barrier to change.” And that’s what happened to Canada while you weren’t looking. Shackled to the hubris of a leader who dreams of building a new global energy superpower, the Boy Scout is now slave to his own greed.

I would argue some of these points.  Canadian’s have risen up through Idle No More and we have protested much of what is going on.  The issue seems to be that neither oppositon party seems to be able to get any traction on these issues and articulate them in a way where it hurts the Conservatives until recently.

David Frum: Trudeau was a disaster for Canada

Frum goes to town on the legacy of Pierre Trudeau.

Pierre Trudeau took office at a moment when commodity prices were rising worldwide. Good policymakers recognize that commodity prices fall as well as rise. Yet between 1969 and 1979 – through two majority governments and one minority – Trudeau tripled federal spending.

In 1981-82, Canada plunged into recession, the worst since World War II. Trudeau’s already big deficits exploded to a point that Canada’s lenders worried about default.

Trudeau’s Conservative successor Brian Mulroney balanced Canada’s operating budget after 1984. But to squeeze out Trudeau-era inflation, the Bank of Canada had raised real interest rates very high. Mulroney could not keep up with the debt payments. The debt compounded, the deficits grew, the Bank hiked rates again – and Canada toppled into an even worse recession in 1992. Trudeau’s next successors, Liberals this time, squeezed even tighter, raising taxes, and leaving Canadians through the 1990s working harder and harder with no real increase in their standard of living.

Do Canadians understand how many of their difficulties of the 1990s originated in the 1970s? They should.

To repay Trudeau’s debt, federal governments reduced transfers to provinces. Provinces restrained spending. And these restraints had real consequences for real people: more months in pain for heart patients, more months of immobility for patients awaiting hip replacements.

If Canada’s health system delivers better results today than 15 years ago, it’s not because it operates more efficiently. Canada’s health system delivers better results because the reduction of Trudeau’s debt burden has freed more funds for healthcare spending.

Pierre Trudeau was a spending fool. He believed in a state-led economy, and the longer he lasted in office, the more statist he became. The Foreign Investment Review Agency was succeeded by Petro-Canada. Petro-Canada was succeeded by wage and price controls. Wage and price controls were succeeded by the single worst economic decision of Canada’s 20th century: the National Energy Program.

The NEP tried to fix two different prices of oil, one inside Canada, one outside.  The NEP expropriated foreign oil interests without compensation. The NEP sought to shoulder aside the historic role of the provinces as the owner and manager of natural resources.

Most other Western countries redirected themselves toward more fiscal restraint after 1979. Counting on abundant revenues from oil, the Trudeau government kept spending. Other Western governments began to worry more about attracting international investment. Canada repelled investors with arbitrary confiscations. Other Western governments recovered from the stagflation of the 1970s by turning toward freer markets. Under the National Energy Policy, Canada was up-regulating as the US, Britain, and West Germany deregulated. All of these mistakes together contributed to the extreme severity of the 1982 recession. Every one of them was Pierre Trudeau’s fault.

While I disagree with Frum that Trudeau was one of the worst prime ministers of our time, I will agree that his economic legacy has impacted the country for over a decade.  Frum’s is an interesting take.

The Lost Generation

America’s lost generation

The world has seen a number of lost generations in the past century. Gertrude Stein first coined the term in 1920s in reference to the Europeans who grew up during World War I, but it’s most recently referred to Japanese youth who grew up during that country’s recession in the 1990s. In Japan, the lost youth are referred to as the hikikomori, and the decade of widespread unemployment meant that many of them never had the chance to start careers. In the 10 years of recession in Japan the number of young people working temporary or contract jobs doubled, and the collective hopelessness lead to a sky-rocketing suicide rate. Michael Zielenziger described the generation in his 2006 book Shutting Out the Sun: How Japan Created Its Own Lost Generation:

Across Japan, more than one million men and boys like Jun and Hiro and Kenji have chosen to withdraw completely from society. These recluses hide in their homes for months or years at a time, refusing to leave the protective walls of their bedrooms. They are as frightened as small children abandoned in a dark forest. Some spend their days playing video games. A few–an estimated 10 percent–surf the Internet. Many just pace, read books, or drink beer and shochu, a Japanese form of vodka. Others do nothing for weeks at a time.

Obviously, the Japanese and American cultures are incredibly different, and it’s impossible to do an apples-to-apples comparison of the two young generations. However, the new census data reads like a warning sign that American youth are increasingly challenged by listlessness, and it will likely lead to future consequences. "Many young adults are essentially postponing adulthood and all of the family responsibilities and extra costs that go along with it," assistant vice president of the Population Research Bureau told the AP. "Some of these changes started before the recession but now they are accelerating, with effects on families that could be long term."

When do you stop spending?

Jim Flaherty said today that he would spend to defend Canada from another recession

Under questioning from opposition MPs, Flaherty said for the first time that the Conservative government would move in with another round of stimulus spending if the world economy suffers a double-dip recession.

“We would obviously do what is needed” if there was a “dramatic deterioration” in the economies of the United States and Europe, he told the committee.

But for now, Flaherty said, the government is not changing its budget plan despite the turmoil on financial markets and debt crises in the United States and Europe. The plan calls for spending cuts of $4 billion a year to eliminate the annual federal budget deficit — now $32-billion annually — in a few years.

Pressed by opposition MPs about how Ottawa would react to a renewed global slowdown, Flaherty said he would change course and develop a pro-growth spending plan as the Conservatives did during the recent recession.

Here is my problem with this problem.  Do any of us think that the United States/Europe is going to fix their problems in the next recession.  I am not saying Flaherty is wrong but does this look like it’s going away.  Jeff Rubin points out that with global demand the way it is, as we come out of a recession, prices will increase and drive the economy back into it which means, how many of these recessions will we be able to afford to ride out until we are looking at Mulroney-esqe debt loads and Devine type deficits again.

We are looking at a default or massive bailouts for Greece, Italy, Spain, Portugal, and the too big to fail banks in Germany.  There is a dysfunctional governance system in the United States, and even China has some long term economic problems.  Does anyone think this next recession is going to be a quick one or we won’t be experiencing a triple or quadruple dip recession before this is all said and done?  No, me neither.

I know Jim Flaherty has been seeking out the advice of economic experts like former Calgary Flames captain Jim Peplinski but may the alternative might be figuring out ways to reinvent Canada’s economy to thrive in a world where recessions will be the norm, not the exception.

A Primer on the U.S. Debt Ceiling

A great primer from the Washington Post’s Ezra Klein.

What happens if we don’t raise the debt ceiling but continue to pay interest on our bonds? This is an option known as “prioritization.” The Bipartisan Policy Center released a reportattempting to think through how this would work in practice, as it has never been attempted before. The raw numbers are chilling: In August, the federal government would have to cut expenditures by about $134 billion, or 10 percent of the month’s GDP. If it chose, for instance, to fund Medicare, Medicaid, Social Security, supplies for the troops and interest on our bonds, it would have to stop funding every other part of the federal government. The drop in demand, when coupled with the turmoil in the markets and the general financial uncertainty, would undoubtedly throw the economy back into a recession. Also keep in mind that we have to roll over $500 billion in debt that month, and if there was uncertainty about how we were going to pay our bills, it is not clear we could find buyers for our debt at anything less than an exorbitant rate. In this way, “prioritization” could actually increase the deficit.

What happens if we stop paying the interest on our debt? This is too scary to consider for any serious length of time. Treasury securities sit at the base of the global financial system. They are considered so safe that the interest rate on Treasuries is called the “riskless rate of return,” as the market assumes there is no chance of default under any circumstances. Almost all other types of debt — mortgages, credit card, auto loans, business loans, hospital bonds, etc. — are yoked to Treasuries. Almost all major financial players hold substantial portfolios of Treasuries or Treasury-related debt in order to buffer themselves against financial shocks. Consider that the 2007 financial crisis was caused by the market realizing it had to reassess the risk of bonds based on subprime mortgages. If the market has to reassess the risk of Treasuries, the resulting financial crisis will be beyond anything we’ve ever seen in this country.

Do we need a debt ceiling? Strictly speaking, no. The debt ceiling is unique to America. In other countries, when the legislature passes a law, the Treasury is given automatic authority to carry it out. A number of former Treasury Secretaries have said it should be abolished, including Larry Summers, who said, “I think that given that Congress has to approve all spending and all tax changes, there is not much logic to the debt ceiling.”

Ten Trillion & Counting

Watch the full episode. See more FRONTLINE.

PBS has an exceptional program on the U.S. national debt and it’s implications for the future of not only the United States but for much of the world.  It’s staggering how the Bush administration took politics over economics every single time.  As former Treasury Secretary Paul O’Neil said, they passed the costs of the Iraq and Afghanistan wars onto future generations.  They also added Medicare Part D when the costs are projected to be $8 trillion with no new revenues to pay for it. | via

Related: How much government is too much?