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AMERICA'S GREAT DELUSIONAL MOMENT
Sunday, January 31, 2010
With the election of Barack Obama to the post of president of the United States in November 2008, and even during the period of the two-year campaign leading up to what many saw as the inevitability of an improbable happening, peoples of the world were focused on US politics as never before in their lives.
OBAMA... the tendency of some Americans to dub him leftist is seen as really comical
1/2
Quite apart from Obama's skin colour, many were made to understand the terminology used to describe American voters, in addition to gaining an appreciation that party politics anywhere on this planet is not a schoolgirl outing.
We discovered that anyone described as liberal or leftist was someone who had too much focus on the human factor while the whole conservative movement was peopled by those who saw big business and unbridled capitalism as the holy grail of all existence.
Where liberals were less inclined to wage wars on foreign soil, conservatives saw these campaigns as an extension of the strength of America, which of course included the increased viability of the military industrial complex.
In the 1970s when Michael Manley was carrying out his democratic socialist experiment in Jamaica, the term 'leftist' referred to someone who would say 'Esteemed Comrade Brezhnev' at the drop of a hat, don a beret Che Guevara-style, could not sell two patties to make a profit, but would be prepared to take up arms and ammunition and head for a cave in Wareika Hills. Such a person would preach of the evils of capitalism while drinking his Johnny Walker Black in his cave.
So, to us, the tendency of some Americans to dub Obama leftist is seen as really comical and even stupid.
If we accept the fact that an intellectual is one who understands his country's role in geo-politics and the global economy, and who also appreciates and has attempted to define human behaviour in this global soup kitchen and in his own country, then it could mean that America is not exactly the country that is overrun with intellectuals; academics maybe, but not intellectuals.
With 300 million people, America can afford to have more than its fair share of those who believe that the source of a banana and a pineapple is 'the store', those overdosed on Biblical apocalyptic expectations and others who figure that Hawaii, a state of America, is probably somewhere in the Caribbean.
With 300 million people, a history based on greatness and inventiveness and innovation, and with more than a significant percentage of its population as the 'thinking class', America can afford to 'carry' the majority of those whose eyes fit neatly into a myopic and xenophobic pair of spectacles.
Obama's actions in trying to push through universal health care has been fought tooth and nail by the GOP, their 'tea baggers' and right-wing nuts like Rush Limbaugh and Glen Beck. The real opposition are the big private health care insurance companies and their allies in Congress. Greeted with a baptism of fire in the form of the US-induced global recession, his attempts to push-start the economy by plunging huge quantities of taxpayers' dollars into the banking sector and the auto industry have not earned him credits other than the label 'socialist'.
America prides itself on its ability to view its own country from the thickness of its own forest. With the recession winding down, there are those in America who believe that that great country will return to business as usual once the recession really ends. They believe that the jobs will come back along with the perks.
On the other hand, there are those who see things differently, if not in the same light as President Sarkozy of France, UK's Prime Minister Gordon Brown, President of the World Bank Robert Zoellick and lately our own prime minister, Bruce Golding, who have all been calling for a reform of the world economic order.
As Golding said recently, "When globalisation was ushered in as a new theatre of economic opportunity, for countries that had been left behind for so long, we were led to believe that this would be the stepping stone for countries that were serious to begin to experience something that had eluded us for so long. The fundamental unevenness of the world remains; 40 per cent share five per cent of income, and the richest 20 per cent enjoy 75 per cent of income."
Is America's geo-political space being threatened?
Very few of us believe that America is going to roll over and play dead any time soon. It still has the power to create fiat money and give guarantees of the holy greenback's redemption.
But people such as Doug Halsall, chairman and CEO of a Jamaican company, Advanced Integrated Systems, believes that the mighty US may be headed for only a fictional representation of its past glory.
Recently, he wrote a letter to Rachel Maddow, host of the Rachel Maddow Show broadcast on MSNBC. It is my view that his letter should be required reading for politicians and public officials in the USA. It should also be carefully read by our home-grown leaders who like to remind us that America, the biggest economy in the world, is quite close to us.
It is somewhat lengthy, so I will quote only parts of it.
"Whereas I fully understand the impatience with Obama by main street America in getting America back to the halcyon days of sub-six per cent unemployment and surpluses, I am more and more convinced that this unrealistic expectation could herald in a period of one-term presidents.
Main Street remains convinced that the status quo which obtained prior to the recession is redeemable in the short term; oblivious of the fact that the fundamental relationships of the system that gave birth and sustenance to that relatively long period of abundance in America has been eroded, mainly because of greed, abuse and short-sightedness on the part of those 'interests' who were, and still are, the major beneficiaries of a society now in decline.
"Simply put, the USA's bubble has burst (or is at best losing air fast) -- and that's the primary cause, not the housing bubble, nor the dot-com, nor sub-prime nor any other; those are mere symptoms, but the USA's bubble, the system that was and now, to a lesser extent, is the envy of the world.
"Manufacturing and allied industries, which in the post-world war era created the 'real' wealth, surpluses and consequent high demand for the trappings of fine living, that in turn created more jobs in other lifestyle support sectors, became the nucleus that was primarily responsible for the evolution of the large, confident, highly productive and financially secure middle class in the then job-rich upwardly mobile USA."
Two years ago I spoke to a cashier at a lunch checkout counter in southern USA. Her major complaint was, "We can't get no credit." It occurred to me then that a Jamaican cashier would not have had that complaint simply because she probably never even saw a credit card in her life. Halsall handles the issue more eloquently than I do, but it pretty much boils down to the same thing.
As Halsall zeroed in on the cause of the meltdown, he suggested that it could have happened before 2008 and gave his reasons for saying this. "This recent financial meltdown, resulting in the massive decline in jobs, would have been experienced even earlier than 2008, but for extended demand that eroding savings financed, credit -- backed by the unrealistic valuation of real estate, corrupt mortgage and other credit qualification practices, etc, thereby facilitating sustained purchases, mostly involving high contents of products produced OUTSIDE of the USA."
In other words, while American households enjoyed an orgy of consumption, it paid little attention to its consumption of home-produced goods. In any event, these purchases were backed based on 'virtual' money, created in the offices of Wall Street wizards who chose to see no further than their fat bonuses.
Halsall continued, "Your financial sector finds it more attractive to create 'virtual' wealth from high-risk derivatives and other such investments than to practise traditional banking that once 'red-carpeted' the American entrepreneurial spirit and the cornucopia of innovations that made America great. Consequently, both innovation and jobs, which were once fuelled by a dynamic small business sector - America's only hope for revival in the medium term - suffers. The red alert is this: like any living organism, if this entrepreneurial spirit is stifled for any sustained period, it will surely die."
Obama trapped by the power of 'special interests'
One is not too sure of the extent to which our local business elite and political leaders have assimilated the recession and how they expect the trading relationships between the USA and Jamaica to be, once the world is fully out of the recession.
Even though our exports to the US have never been spectacular, one senses that our political leaders are waiting for the jigsaw pieces to fit together again without considering that the rules of the game may have changed.
Halsall noted that, "Main Street's conviction, however, is that your president has access to some economic and other levers which, in less than a year, should have been effectively manipulated to reinstate the status quo, or at the very least, have had the ship of state turned around and visibly steaming full speed ahead to this utopia of near-zero unemployment and a significantly declining debt. And although many wise persons on both sides of the political fence may very well recognise this, it is not politically expedient for either side to present this axiom to Main Street."
Right here at home, we saw the result of the negotiations -- the Debt Exchange -- with the big financial players and how it annoyed the Opposition PNP, simply because the Government had appeared to have awakened from its slumber of the previous 18 months. While no one is insane enough to believe that the programme will not need the best technical and political management, the PNP could only offer a lukewarm criticism of it because it is not in the nature of our politicians to be nationalistic.
Halsall drew parallels: "America therefore has become as partisan in
its political behaviour as any of us Third World nations. Where are the great statesmen of the past who thought primarily of the next generation? Your politicians, like ours, think only of the next election... and 'Special Interests' whom they depend on to finance their election.
"In this type of thinking, they fail to recognise that the backbone which supported this quality lifestyle in the past - a competitive, secure, local manufacturing and export sector, has been outsourced by the very interests that were the main beneficiaries of a large middle class with great purchasing power, supported by secure and well-paid manufacturing and associated jobs. Was this not short-term thinking born of greed and myopia, or was it natural evolution in a more competitive, complex and inter-related post-cold war world?
"In outsourcing manufacturing, America also outsourced the associated technology and so too the ability to develop and improve, to countries which learned well from the USA that human capital is a prerequisite to all other capital and, consequently, was able to extract far more from the value chain. In the process they are increasingly becoming the producers (creators of wealth) and America the distributors and consumers. Indeed, so successful have countries like China become that their challenge is now tied up with yours, but only in the sense that they now have to buy your debt so that America can continue to prolong its lifestyle and thereby import their goods. So now they, like India, Brazil, etc, are working on increasing their own domestic demand by improving their domestic standard of living, in order that they may absorb the phenomenal growth in production and productivity."
Halsall's analytically presented and eloquently expressed position sees no good news for those who believe that the magic of Obama will return America to the days prior to the onset of the US-induced global recession. That, of course, cannot be good news to us in the short term if we also believe that the former arrangements will return.
"In my view, the halcyon days seem irretrievable, by Obama or any other, as you have become the victim of that which made you great and now, like most Third World countries, you are in a debt trap. Debt that was used not for capacity building, infrastructure nor your human capital, but war, consumption, satisfying the behest of big business, and 'currying favour' with the rich. Interest expense, which is fast becoming one of your largest budgetary items, as is for us, can only be eliminated by discharging debt, and surpluses needed to do this can only come from excess revenue over expenses. Work the math."
Who needs transformational leadership?
While Halsall has never been a pitchman for doom and gloom, he has some sobering thoughts on America's realignment with itself, and in it, lies a part of our future.
"Raising taxes is political suicide and may further exacerbate the problem of a depressed economy. Drastic cuts in expenditure, including withdrawing from Iraq and Afghanistan, has its obvious challenges and will not jump-start the economy. Indeed, it may very well bankrupt some of the industries that benefit from war and lobby generously for it continuously. Defence Budget seems to be sacrosanct. Without a surplus the debt cannot be retired or reduced... and ironically, like us Third World countries, you don't have the IMF to force your hand.
"The transformational leadership that is required at this time to change America's imminent destiny - as Obama has now realised - will never be permitted by the 'special interests' which now control your Congress. As is wisely said, unbridled Capitalism is as destructive as unbridled Socialism.
"And believe me Rachel, I take no pleasure in expressing this rationale. For quite some time I too avoided this conclusion and still hope time proves me wrong, because as you may know, when America sneezes, countries like Jamaica contract pneumonia. The world today is in one grand mess. I certainly don't envy your president, for no doubt he ponders these options and limitations daily. No doubt we are beginning to experience the realignment of the world. Let's hope for the rising tide that lifts all boats."
Sunday, January 31, 2010
With the election of Barack Obama to the post of president of the United States in November 2008, and even during the period of the two-year campaign leading up to what many saw as the inevitability of an improbable happening, peoples of the world were focused on US politics as never before in their lives.
OBAMA... the tendency of some Americans to dub him leftist is seen as really comical
1/2
Quite apart from Obama's skin colour, many were made to understand the terminology used to describe American voters, in addition to gaining an appreciation that party politics anywhere on this planet is not a schoolgirl outing.
We discovered that anyone described as liberal or leftist was someone who had too much focus on the human factor while the whole conservative movement was peopled by those who saw big business and unbridled capitalism as the holy grail of all existence.
Where liberals were less inclined to wage wars on foreign soil, conservatives saw these campaigns as an extension of the strength of America, which of course included the increased viability of the military industrial complex.
In the 1970s when Michael Manley was carrying out his democratic socialist experiment in Jamaica, the term 'leftist' referred to someone who would say 'Esteemed Comrade Brezhnev' at the drop of a hat, don a beret Che Guevara-style, could not sell two patties to make a profit, but would be prepared to take up arms and ammunition and head for a cave in Wareika Hills. Such a person would preach of the evils of capitalism while drinking his Johnny Walker Black in his cave.
So, to us, the tendency of some Americans to dub Obama leftist is seen as really comical and even stupid.
If we accept the fact that an intellectual is one who understands his country's role in geo-politics and the global economy, and who also appreciates and has attempted to define human behaviour in this global soup kitchen and in his own country, then it could mean that America is not exactly the country that is overrun with intellectuals; academics maybe, but not intellectuals.
With 300 million people, America can afford to have more than its fair share of those who believe that the source of a banana and a pineapple is 'the store', those overdosed on Biblical apocalyptic expectations and others who figure that Hawaii, a state of America, is probably somewhere in the Caribbean.
With 300 million people, a history based on greatness and inventiveness and innovation, and with more than a significant percentage of its population as the 'thinking class', America can afford to 'carry' the majority of those whose eyes fit neatly into a myopic and xenophobic pair of spectacles.
Obama's actions in trying to push through universal health care has been fought tooth and nail by the GOP, their 'tea baggers' and right-wing nuts like Rush Limbaugh and Glen Beck. The real opposition are the big private health care insurance companies and their allies in Congress. Greeted with a baptism of fire in the form of the US-induced global recession, his attempts to push-start the economy by plunging huge quantities of taxpayers' dollars into the banking sector and the auto industry have not earned him credits other than the label 'socialist'.
America prides itself on its ability to view its own country from the thickness of its own forest. With the recession winding down, there are those in America who believe that that great country will return to business as usual once the recession really ends. They believe that the jobs will come back along with the perks.
On the other hand, there are those who see things differently, if not in the same light as President Sarkozy of France, UK's Prime Minister Gordon Brown, President of the World Bank Robert Zoellick and lately our own prime minister, Bruce Golding, who have all been calling for a reform of the world economic order.
As Golding said recently, "When globalisation was ushered in as a new theatre of economic opportunity, for countries that had been left behind for so long, we were led to believe that this would be the stepping stone for countries that were serious to begin to experience something that had eluded us for so long. The fundamental unevenness of the world remains; 40 per cent share five per cent of income, and the richest 20 per cent enjoy 75 per cent of income."
Is America's geo-political space being threatened?
Very few of us believe that America is going to roll over and play dead any time soon. It still has the power to create fiat money and give guarantees of the holy greenback's redemption.
But people such as Doug Halsall, chairman and CEO of a Jamaican company, Advanced Integrated Systems, believes that the mighty US may be headed for only a fictional representation of its past glory.
Recently, he wrote a letter to Rachel Maddow, host of the Rachel Maddow Show broadcast on MSNBC. It is my view that his letter should be required reading for politicians and public officials in the USA. It should also be carefully read by our home-grown leaders who like to remind us that America, the biggest economy in the world, is quite close to us.
It is somewhat lengthy, so I will quote only parts of it.
"Whereas I fully understand the impatience with Obama by main street America in getting America back to the halcyon days of sub-six per cent unemployment and surpluses, I am more and more convinced that this unrealistic expectation could herald in a period of one-term presidents.
Main Street remains convinced that the status quo which obtained prior to the recession is redeemable in the short term; oblivious of the fact that the fundamental relationships of the system that gave birth and sustenance to that relatively long period of abundance in America has been eroded, mainly because of greed, abuse and short-sightedness on the part of those 'interests' who were, and still are, the major beneficiaries of a society now in decline.
"Simply put, the USA's bubble has burst (or is at best losing air fast) -- and that's the primary cause, not the housing bubble, nor the dot-com, nor sub-prime nor any other; those are mere symptoms, but the USA's bubble, the system that was and now, to a lesser extent, is the envy of the world.
"Manufacturing and allied industries, which in the post-world war era created the 'real' wealth, surpluses and consequent high demand for the trappings of fine living, that in turn created more jobs in other lifestyle support sectors, became the nucleus that was primarily responsible for the evolution of the large, confident, highly productive and financially secure middle class in the then job-rich upwardly mobile USA."
Two years ago I spoke to a cashier at a lunch checkout counter in southern USA. Her major complaint was, "We can't get no credit." It occurred to me then that a Jamaican cashier would not have had that complaint simply because she probably never even saw a credit card in her life. Halsall handles the issue more eloquently than I do, but it pretty much boils down to the same thing.
As Halsall zeroed in on the cause of the meltdown, he suggested that it could have happened before 2008 and gave his reasons for saying this. "This recent financial meltdown, resulting in the massive decline in jobs, would have been experienced even earlier than 2008, but for extended demand that eroding savings financed, credit -- backed by the unrealistic valuation of real estate, corrupt mortgage and other credit qualification practices, etc, thereby facilitating sustained purchases, mostly involving high contents of products produced OUTSIDE of the USA."
In other words, while American households enjoyed an orgy of consumption, it paid little attention to its consumption of home-produced goods. In any event, these purchases were backed based on 'virtual' money, created in the offices of Wall Street wizards who chose to see no further than their fat bonuses.
Halsall continued, "Your financial sector finds it more attractive to create 'virtual' wealth from high-risk derivatives and other such investments than to practise traditional banking that once 'red-carpeted' the American entrepreneurial spirit and the cornucopia of innovations that made America great. Consequently, both innovation and jobs, which were once fuelled by a dynamic small business sector - America's only hope for revival in the medium term - suffers. The red alert is this: like any living organism, if this entrepreneurial spirit is stifled for any sustained period, it will surely die."
Obama trapped by the power of 'special interests'
One is not too sure of the extent to which our local business elite and political leaders have assimilated the recession and how they expect the trading relationships between the USA and Jamaica to be, once the world is fully out of the recession.
Even though our exports to the US have never been spectacular, one senses that our political leaders are waiting for the jigsaw pieces to fit together again without considering that the rules of the game may have changed.
Halsall noted that, "Main Street's conviction, however, is that your president has access to some economic and other levers which, in less than a year, should have been effectively manipulated to reinstate the status quo, or at the very least, have had the ship of state turned around and visibly steaming full speed ahead to this utopia of near-zero unemployment and a significantly declining debt. And although many wise persons on both sides of the political fence may very well recognise this, it is not politically expedient for either side to present this axiom to Main Street."
Right here at home, we saw the result of the negotiations -- the Debt Exchange -- with the big financial players and how it annoyed the Opposition PNP, simply because the Government had appeared to have awakened from its slumber of the previous 18 months. While no one is insane enough to believe that the programme will not need the best technical and political management, the PNP could only offer a lukewarm criticism of it because it is not in the nature of our politicians to be nationalistic.
Halsall drew parallels: "America therefore has become as partisan in
its political behaviour as any of us Third World nations. Where are the great statesmen of the past who thought primarily of the next generation? Your politicians, like ours, think only of the next election... and 'Special Interests' whom they depend on to finance their election.
"In this type of thinking, they fail to recognise that the backbone which supported this quality lifestyle in the past - a competitive, secure, local manufacturing and export sector, has been outsourced by the very interests that were the main beneficiaries of a large middle class with great purchasing power, supported by secure and well-paid manufacturing and associated jobs. Was this not short-term thinking born of greed and myopia, or was it natural evolution in a more competitive, complex and inter-related post-cold war world?
"In outsourcing manufacturing, America also outsourced the associated technology and so too the ability to develop and improve, to countries which learned well from the USA that human capital is a prerequisite to all other capital and, consequently, was able to extract far more from the value chain. In the process they are increasingly becoming the producers (creators of wealth) and America the distributors and consumers. Indeed, so successful have countries like China become that their challenge is now tied up with yours, but only in the sense that they now have to buy your debt so that America can continue to prolong its lifestyle and thereby import their goods. So now they, like India, Brazil, etc, are working on increasing their own domestic demand by improving their domestic standard of living, in order that they may absorb the phenomenal growth in production and productivity."
Halsall's analytically presented and eloquently expressed position sees no good news for those who believe that the magic of Obama will return America to the days prior to the onset of the US-induced global recession. That, of course, cannot be good news to us in the short term if we also believe that the former arrangements will return.
"In my view, the halcyon days seem irretrievable, by Obama or any other, as you have become the victim of that which made you great and now, like most Third World countries, you are in a debt trap. Debt that was used not for capacity building, infrastructure nor your human capital, but war, consumption, satisfying the behest of big business, and 'currying favour' with the rich. Interest expense, which is fast becoming one of your largest budgetary items, as is for us, can only be eliminated by discharging debt, and surpluses needed to do this can only come from excess revenue over expenses. Work the math."
Who needs transformational leadership?
While Halsall has never been a pitchman for doom and gloom, he has some sobering thoughts on America's realignment with itself, and in it, lies a part of our future.
"Raising taxes is political suicide and may further exacerbate the problem of a depressed economy. Drastic cuts in expenditure, including withdrawing from Iraq and Afghanistan, has its obvious challenges and will not jump-start the economy. Indeed, it may very well bankrupt some of the industries that benefit from war and lobby generously for it continuously. Defence Budget seems to be sacrosanct. Without a surplus the debt cannot be retired or reduced... and ironically, like us Third World countries, you don't have the IMF to force your hand.
"The transformational leadership that is required at this time to change America's imminent destiny - as Obama has now realised - will never be permitted by the 'special interests' which now control your Congress. As is wisely said, unbridled Capitalism is as destructive as unbridled Socialism.
"And believe me Rachel, I take no pleasure in expressing this rationale. For quite some time I too avoided this conclusion and still hope time proves me wrong, because as you may know, when America sneezes, countries like Jamaica contract pneumonia. The world today is in one grand mess. I certainly don't envy your president, for no doubt he ponders these options and limitations daily. No doubt we are beginning to experience the realignment of the world. Let's hope for the rising tide that lifts all boats."
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