The Globalist Daily online magazine on the global economy, politics and culture Tue, 22 Jul 2014 21:42:34 +0000 en-US hourly 1 The New (Dis)Order of the Middle East Tue, 22 Jul 2014 05:30:41 +0000 by Einat Wilf

Credit: PeterPhoto123 - Shutterstock.comTo understand the Middle East today and its future, the Europe of the 19th century provides intriguing parallels.

©2014 The Globalist


by Einat Wilf

Credit: PeterPhoto123 -

To understand the Middle East today and its future course, the Europe of the 19th century provides some intriguing parallels. The shared characteristics of the two places and centuries shed light on the magnitude of transformation that the Arab world is undergoing. Reflecting on these parallels provides cause for both hope and fear.

Amidst this bloody fight, a new architecture of the Middle East can be detected. As the Cold War’s domination of the geopolitics of the Middle East recedes, a new architecture is emerging, reminiscent of that of Europe in the 19th century.

It is an architecture of mid-sized powers engaging in ever shifting alliances and covert and overt struggles to expand and protect their spheres of influence. Like 19th century Europe, there is a strong connection between countries vying for influence and the cohesiveness of their national, ethnic, sectarian and religious identities.

It is no accident that the top mid-sized regional powers which have not had a history of being subject to the Ottoman Empire – Turkey, Iran and Israel – are those that enjoy the most distinct sense of national identity.

The confident three — Turkey, Iran and Israel

Turkey, for obvious reasons, already went through the difficult process of establishing itself as a country with a distinct identity. As the heir to the seat of the Ottoman Empire, it is a natural regional power in the areas that were previously under imperial control.

While there is still much to be done in terms of greater openness, democratization and national expression for minorities, Turkey’s regime and coherence are only marginally threatened by the delayed “Ottoman Spring.” Turkey is therefore well placed to play the role of a regional power.

Iran was never part of the Ottoman Empire. In addition to its distinct Islamic Shiite identity, it has a historic Persian identity that provides it cohesion and coherence.

While its regime is highly vulnerable to the ideas of the “Arab Spring,” its national identity is less so. Iran’s national identity seems stable even though there are minorities that might demand greater voice, such as the Azeris or the Kurds.

Even if Iran’s regime were toppled, its borders and national coherence are likely to remain intact. Coupled with its vast resources and power, Iran is also well placed to play the role of a regional power. It has clear interests in expanding its sphere of influence, particularly when it comes to the Shiites of the Middle East.

Israel’s case

Israel is the third non-Arab regional player in the region. Israel has been traditionally viewed as a foreign and colonial insert in the Middle East. It is seen as even more an outcome of the colonial carving of the Ottoman Empire than countries such as Jordan, Iraq and Syria.

However, the historical connection between the Jewish people and their land points to a possible transformation of Israel and the story of Israel in the context of the “Arab Spring.” In this new context, the perception of Israel in the Middle East might change from that of a colonial foreign insert to the national expression of the Jewish people, indigenous to the region.

The Jewish people began their struggle for national expression with the European “Spring of Nations,” which is where they were located in the 19th century. However, given that their national aspirations were always directed to the Land of Israel, they are more properly thought of as a nation that arose to demand its self-determination in the Ottoman context.

Given that “Spring of Nations” came to the lands of the Ottoman Empire more than a century and a half later, it is only now that the Jewish people can hope to become accepted as an indigenous people in the lands of the Ottoman Empire.

Their unique story can now be understood as straddling both the European Spring of Nations and the “Ottoman Spring.” The idea of Jewish self-determination was born in Europe, but it could only be realized in their ancient homeland, an area previously under Ottoman control.

The self-determination of the Jewish people then finally comes of age and could become accepted and locally integrated with the “Ottoman Spring.”

Israel’s democracy and power mean that it is not domestically vulnerable to the “Arab Spring.” At the same time, the acceptance of Israel as a legitimate actor in the Middle East has been the greatest obstacle to its ability to be an integral, and certainly an overt, party to alliances in the region.

If this negative perception changes, Israel might find itself openly accepted as a legitimate regional power.

The confused ones: Egypt, Saudi Arabia

While the top regional powers in the areas previously under Ottoman control are non-Arab, among those in the Arab world, Egypt and Saudi Arabia are the most substantial players.

Egypt always enjoyed distinct cohesive character given its identity as a nation and people that date back to pre-Islamic times. Saudi Arabia, while an outcome of the artificial carving of the Ottoman Empire, always enjoyed heightened status as the historical seat of Arab identity.

However, unlike Turkey, Iran and Israel, the ideas and forces of the “Arab Spring” all present substantial challenges to the regimes of Egypt and Saudi Arabia. These regimes therefore need to invest far more of their efforts in preserving domestic stability, while also seeking to play a substantial regional role.

One more regional power worth mentioning is the new “Czarist” Russia. This is no longer the Soviet Union superpower player of the Cold War era.

As the Cold War-era architecture of the Middle East has receded and the Soviet Union disintegrated, Russia has returned to its traditional place as a regional actor in the Middle East. Russia is now again a mid-sized power protecting its regional interests, and seeking to expand and defend its sphere of influence in the area that is in its immediate vicinity.

All of these regional powers appear to be engaging, to one extent or another, in a web of shifting alliances, overt and covert, to protect their immediate interests and to prevent as much as possible any threats to the stability of their regimes.

While these alliances have not yet coalesced into official treaties with memorable names such as “The Triple Alliance” and the “Entente Cordiale,” they already seem to be playing traditional sphere-of-influence regional politics that would put the Europeans of the 19th century to shame.

Shakier “nations” yet

Torn between these regional players and, notably, within themselves are Syria, Iraq and Libya, while other countries are in danger of being torn apart as well.

The borders of these countries do not match those of the peoples within them. They are still in the throes of bloody battles between the old identities of sect, tribe, religion, ethnicity, as well as the new identities created in the wake of World War I.

The European experience, especially with respect to Germany and Italy, demonstrates that the battles in Syria and Iraq could have a profound impact on reshaping the geopolitical architecture of the region, especially if coupled with extremist ideology.

As the Shiite parts of Iraq are becoming part of the Iranian sphere of influence and Iraqi Kurdistan establishes itself as a separate nation-state, could the Sunni parts of Iraq and Syria join together to truly become the “Islamic State of Iraq and Syria/Levant?”

Should the goal of the Al Qaeda-affiliated Islamist jihadists in Syria and Iraq to create an Islamic nation in the lands of Iraq and Syria/Levant be taken seriously?

Could the Islamic State of Iraq and Syria/Levant, if established one day, be the Arab equivalent of Nazi Germany? Could it be the newly formed state in the region’s midst based on a radical and murderous ideology?

This is only part of the litany of questions now seizing the Middle East, with uncertain – and potentially tragic – outcomes, much as was the case in the first half of Europe’s 20th century.

Editor’s note:

This article was originally published in the Spring 2014 issue of Turkish Policy Quarterly (TPQ). This is an abbreviated version of the piece. To read the full article, please visit Turkish Policy Quarterly.

©2014 The Globalist


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Tariffs, Textiles and TTIP Mon, 21 Jul 2014 16:00:06 +0000 by Sabine Muscat

(Credit: Onizu3d - the US and EU turn into one big duty-free zone via TTIP?

©2014 The Globalist


by Sabine Muscat

(Credit: Onizu3d -

Tariffs are the low-hanging fruit in the complex free trade negotiations between the United States and the European Union. Already low on both sides of the Atlantic, their planned elimination does not promise huge gains in economic growth. But they could make quite a difference for brand-conscious fashionistas.

Europeans living on the other side of the Atlantic are used to friends arriving with empty bags to buy American Apparel shirts or Red Wing work boots, a brand that boasts of handcrafting its products in Minnesota or Missouri.

And then there are the stories of Europeans ordering what seemed like a good deal from the United States. – only to be asked to pay ridiculous amounts to customs when the parcel is delivered.

Many Americans, for their part, spend their European vacations scouting for leather footwear and designer suits, not just because of the bigger selection but also because of the cheaper prices. You don’t have to start with Prada or Ferragamo, you can even look at Birkenstocks.

The model “Boston” in brown suede costs 74.95 euros in the German online shop, but is sold for $130 (around 100 euros) in the United States.

Made in China or Vietnam

While average tariffs in transatlantic trade are extremely low (3.5% on average on the U.S. side, 5.2% in the EU), shoes and textiles are an exception. According to the European textile federation, Euratex, the EU imposes maximum duties of 12% for American-made apparel and bed linen.

In the U.S., the rates go even higher: up to 19.7% for knitted wool sweaters for women.

Not that anyone would import the latter from Europe these days. In fact, most apparel sold in the U.S. or in Europe today is made in places like China or Vietnam. And a staggering 99% of shoes sold in the U.S. are produced overseas, according to the Footwear Distributors and Retailers of America.

So it is no wonder that Vietnam’s participation in the Transpacific Partnership negotiations with the United States (TTIP) has raised hopes of Vietnamese exporters and U.S. importers alike.

Yet, the prospect of phasing out transatlantic tariffs gets more than a shrug from the industry. “Only three percent of garment imports come from Europe,” says Julia Hughes of the U.S. Association of Importers of Textiles and Apparel who also admits to going on shoe buying sprees during trips to the other side of the Atlantic.

“So, of course, the TPP is more important, but quite a few of our members are also getting rather excited about Europe.”

Tariff gender discrimination

And so should female consumers – since the end of tariffs would also end another type of gender discrimination. How is it that the U.S. imposes 8.5% duties on men’s leather loafers, but 10.1% on women’s?

“We source a lot more women’s shoes from high cost places,” admits Matt Priest, spokesman for the Footwear Distributors and Retailers of America. And he adds jokingly: “Men don’t care as much about their footwear.”

It sounds as if lowering those tariffs would remove a lot of grief and inequality for everyone involved. Matt Priest claims that American shoe importers could invest more and create more jobs if the $54 billion industry were relieved of $2.3 billion duties a year. “And we are also anxious to lower the burden for our consumers.”

But what the consumer would really get out of all this seems less clear. After all, “it is up to the retailers and distributors to decide if that reduction in cost will be reflected or not in the sales price,” writes Luisa Santos, the spokeswoman for Euratex. Neither Red Wing nor Birkenstock could be reached to comment.

But what if Red Wing lowered the prices for its boots in its stores in Hamburg and Berlin? For some of us, this outcome might be the worst of all. After all, turning the United States and the EU into one big duty free zone would certainly take away some of the fun of transatlantic traveling.

©2014 The Globalist


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Will China be Able to Curb Adolescent Suicide? Sun, 20 Jul 2014 13:00:20 +0000 by César Chelala

Credit: hxdbzxy - Shutterstock.comSuicides rates soar in the face of China’s transformation. What can China do to reverse the trend?

©2014 The Globalist


by César Chelala

Credit: hxdbzxy -

Suicides among youth have been a significant problem in many countries, but the number and the reasons for those happening in China are even more a cause for concern.

In the last few years, several studies have shown that adolescents and young people in China, Japan and other Asian countries have a large number of psychological problems that may lead them to commit to suicide.

Will China –and the other Asian countries- be able to curb those suicides that are becoming indicative of a society in crisis?

A budding suicide crisis

Although suicide is the fifth-leading cause of death in China, it has become the leading cause of death among young people. It is estimated that 287,000 people –- or one every two minutes — commit suicide every year in China.

Ten times that number attempt it — but are unsuccessful, according to the Chinese Center for Disease Control and Prevention. China now has one of the highest suicide rates in the world.

In 1897, Emile Durkheim, a French sociologist, was among the first to notice that there is a higher suicide rate among those individuals who are not socially integrated and didn’t have social support.

His observations may apply to many Chinese students who attempt suicide. Many of these students come from the interior to the country’s main cities and lack the support of their families.

Grim and stressful realities

There are several causes for adolescent suicides. In many cases, suicides relate to fear of performing badly in exams. Some experts believe that the one-child policy could also explain the rise in adolescent Chinese suicides. Because they grew up with no siblings, they are not used to dealing with difficult interpersonal problems.

According to Lin Kunhui, founder of Life Education and Crisis Intervention Center in Shanghai, young people face tremendous amounts of stress and have very few people to ask for help in solving their problems. In many cases, they confront simultaneous pressures from work, study and personal life.

Despite the extraordinary performance of the Chinese economy, many young people cannot find jobs and become depressed, contributing to the high number of suicides. Many graduates are unable to find jobs a year or more past graduation.

This is particularly problematic in rural areas, where people are poorer than in the cities and do not have good access to already scarce mental health services.

In addition, in rural areas there is abundant use of pesticides, which many people use to commit suicide. According to statistics from the World Health Organization (WHO), 58% of people who commit suicide in rural areas use pesticides to do so.

Home cooked pressures

The high number of suicides among Chinese adolescents result mostly from the extreme pressure from their families to perform well in school and excel in their studies. In addition to those pressures, teenagers experience feelings of isolation and loneliness which make them prone to attempt suicide.

Many young people kill themselves because they cannot bear the heavy pressure of the test-oriented education system, according to findings of the 2014 Report on China’s Education, also known as the Blue Book of Education.

In China, the school day can last as long as 12 hours. In many cases, Chinese students return to two to four hours of homework after finishing school. Chinese parents exert strong pressure on their children to perform well at school, strictly enforcing the demands of schoolwork on their children.

Identifying and assisting

Is it possible to lower the high suicide rate among Chinese teenagers, given the complexity of the problem? I believe so, if parents, teachers and friends can pick up signs of distress among the young. Certain characteristics –- such as depression, conduct disorders and situational crises — are associated with increased risk of suicide.

Young people may have some particular behaviors that indicate their intention to commit suicide. Among those behaviors are changes of appearance and conduct toward their friends.

Others may also be making some final arrangements such as giving away prized possessions or making suicidal threats through direct or indirect statements.

Because children and adolescents spend a substantial amount of time at school under the supervision of school personnel, school staff should be trained on the importance of risk factors and warning signs of suicidal behavior. At the same time, there should be increased communication among parents, teachers and school staff.

A good approach would be the creation of “Crises Response Teams” (CRT) made up of representatives from the students, the parents and the school administration, in charge of looking after students who exhibit behavior of concern.

In addition, students should have easy access to effective medical and mental health resources. Through a combined and comprehensive set of actions, China can effectively control what threatens to become a serious public health problem.

©2014 The Globalist


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Morocco’s Future in Farming Cooperatives Sat, 19 Jul 2014 13:00:31 +0000 by Yossef Ben-Meir

Ait Benhaddou,fortified city, Morocco. (Credit: Frederic Legrand - updated system of local cooperation could help rural Morocco meet its true potential.

©2014 The Globalist


by Yossef Ben-Meir

Ait Benhaddou,fortified city, Morocco. (Credit: Frederic Legrand -

Many countries around the world face severe challenges when it comes to developing the economic potential of their rural regions. Morocco is an interesting case in point.

To make progress, the country relied on establishing agricultural cooperatives. Their goal was to build social cohesion and overcome problems such as depressed markets and stagnant production.

Challenge – and potential

Rural farming families working in Morocco’s High Atlas mountain region have seen global prices for the walnut and almond crops they grow double over the past ten years. And yet, the revenues they received have basically remained the same.

The systems of agricultural production and maintenance they use — although incorporating vital traditional skills and knowledge — are not primarily directed toward the optimization of quantity. Rather, it provides them with subsistence and the most basic continuity of life.

Part of the reason is that families, clans and entire communities may live side by side –- and are yet ever so distant from each other. Local events that took place decades and even generations ago have divisive consequences that remain very much alive.

However, with population growth, rising prices and globalization, antiquated production structures ensure that rural areas lag ever more behind urban ones. As a result, systemic rural poverty deepens and the economic divide compared to people living in cities grows starker.

Organic growth

At the same time, cooperatives represent a vital and integral part of harnessing the latent Moroccan rural potential. What stands in the way of success is that the marginalized countryside communities have never had the means to purchase and plant agricultural crops that require the application of harmful pesticides.

What may seem like a disadvantage to some is a clear-cut benefit to others. The result is that their surrounding environment — air, soil, the entire ecosystem — remains chemical-free.

This is a highly desirable factor on the part of consumers, expressed particularly in the developed world. This fact, when presented in the right manner, practically ensures the securing of organic certification.

Thus, the nuts, figs, cherries, dates, olives, pomegranates, lemons, carob, prickly pears and several dozen medicinal plants, growing in different parts of Morocco, could obtain organic certification.

This, along with the introduction of other value-added processes, would enable farming families to realize the vast opportunity that is rightfully theirs.

Changing the ecosystem

Of course, this is much easier said than done – and seemingly impossible without the formation of well-organized, economically efficient local cooperatives.

For example, the creation of plant or tree nurseries is essential to generating the billion or more trees and plants that Morocco needs as part of overcoming subsistence agriculture.

Moroccan farming families are transitioning from growing barley and corn — which are grown on 70% of land yet account for only 10-15% of agricultural revenue — to cash crops, most commonly fruit trees.

The growing demand for fruit trees increases their price, keeping many farmers on subsistence farming. Community-managed tree nurseries produce trees from seeds at a fraction of the cost of buying young trees from existing, private nurseries. They enable the building of new skills so that farmers can replenish their orchards with trees in the future.

Nurseries, however, require land that can be openly accessed by all its potential beneficiaries, in an arrangement that benefits all households.

Moreover, training in organic practices and project management needs to be delivered on a broad basis. Training needs an experiential basis in order to make the necessary vital difference in practices. Machinery for processing and packaging is prohibitively expensive for the few — less so for the many.

International buyers seek quantities of product beyond what a single village can provide. Many villages, once properly focused on working together, can provide the desired quantity.

All these examples underscore the necessity of the coming together of families, clans, communities, municipalities and provinces. When that happens, then farm cooperatives help successful, sustainable agricultural development emerge.

Three factors for success

How can this be achieved in practical terms? First, present-day agricultural cooperatives in Morocco and around the world require an outside catalyst to help jump start the all-important dialogue process needed. This enables people to express their interests and needs as well as to identify ways that they can be made mutually compatible.

Third-party facilitators play a role that cannot be underestimated in its importance. Without them, communities are much less likely to create fruitful plans of action embodying their self-determined goals.

Facilitators can be teachers, government and civil workers, friends and neighbors — indeed any community member. They need to undergo public and private training specializing in facilitation for cooperative building.

Second, partnership building with government, civil and private groups is a vital necessity in the formation process and efficient functioning of cooperatives. The support that they can provide in all stages ”from farm to fork” is critical not just for initial success, but even more so for long-term sustainability.

The people’s property

Finally, cooperatives must remain unequivocally and indelibly the property of the people. The basis for unlocking latent potential is essentially rooted in personal empowerment and elevated levels of decision-making skills.

The members of cooperatives can invest a portion of their new revenues in other human development projects that have the potential to change their quality of life. Revenues from agriculture can also help communities with clean drinking water, school building, women and youth initiatives and any other priorities they identify.

Cooperatives are indeed unique. They are controlled by and afford benefit to the very people who have established them.

They open themselves up to multi-sector partnerships at all societal tiers and reach out to a global public who express increasing satisfaction, including at the ethical level, with the product that grows in their fields and on their terraces.

In conclusion, Morocco’s rural communities – and those throughout the world – have much to gain from modernizing the structures of their cooperatives. If and when that happens, their livelihoods may improve considerably.

©2014 The Globalist


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U.S. Spying and Europe’s Disillusioned Pro-American Elites Fri, 18 Jul 2014 22:55:01 +0000 by Stephan Richter

Why are some of Europe's pro-American elites now wondering whether they got it wrong?

©2014 The Globalist


by Stephan Richter

Spying scandals, the systematic erosion of privacy. A corporate sector that makes mincemeat of American democracy. To understand why Europe’s normally pro-American elites are so disillusioned now, it is important to look at the days of their youth a few decades back – specifically the late 1970s and early 1980s.

Those years, when many people who are now Europe’s leaders — whether a prime minister, foreign minister, or what have you — were heady times.

On the tail end of the Vietnam fiasco, Marxists — then a very prominent force in numbers all over Europe, had a ready-made opportunity. Whatever their ideology said about the United States as the leading capitalist power seemed to be born out in practice — or so they liked to cast it.

U.S. troops had been marauding around the world. U.S. intelligence officers engaged in toppling regimes in various places. And amidst all that saber rattling, U.S. multinational companies were quietly, but relentlessly going about their business expanding their market shares to conquer the globe.

In short, The United States, the self-proclaimed land of liberty and justice, had little if any regard for the concerns of others.

Land of liberty, really?

To Marxists, it was a clear-cut case of U.S. imperialism. The United States was forcing capitalism in its rawest form down the throat of non-Americans, if need be through military means.

Keen to topple the political balance on the continent and still wet-eyed from the glory days of the late-1960s, leftist student organizers were keen to press home the image of a United States caring about nothing on earth but its self-advancement and material interests.

In the interest of advancing its exploitative agenda — so the middle class students were told by Marxist agitators — U.S. companies were keen on becoming ever bigger.

In the end, a few of them — a reigning oligopoly — would have the tools at their disposal to rule the entire world — and use them for the commercial advantage of the super-rich. In effect, it was argued, the United States as the über-capitalist paragon was ruled by a class of rich people who had no interest in social equity.

The anti-American Marxist clap trap

All that mattered to them was to amass more material goods and financial assets. On that road toward eternal self-enrichment, they would go to any length — including plundering the environment, impoverishing people, committing financial fraud and other crimes.

Furthermore, in order to make their rule sustainable, they would appease the "masses" by feeding them a steady diet of religion and cheap consumer goods.

The purpose behind that strategy was to keep the lower classes in check — and in the naïve belief that the economic regime would be good for them.

Along those lines, the Marxist claptrap went on and on.

Standing up for America then

Fortunately for the United States, and in fact the sustainability of capitalism itself, many European students were leery of falling for this highly dogmatic way of interpreting what was going on in the world.

True, many students from Europe’s middle classes realized the United States had made mistakes. Vietnam was an unnecessary folly born out of arrogance, even hubris.

But that alone was no reason to condemn the United States as a whole — or, even less so, the entire capitalist system.

What did matter, in contrast, was that the United States and its military were the one force destined to keep the Soviets in check. That security — as well as the economic opportunities provided by the Americans — was a hands-on benefit that many Europeans could relate to.

And the Marxist activists — their extraordinary rhetorical skills and general sense of charming propaganda notwithstanding — had to confront an insurmountable problem.

After the experience with the Nazis in much of Europe, few people had any desire to fall for collectivist nirvanas, whether of the Communist or National Socialist extraction. What people yearned for was to have some space for self-advancement.

They were eager to work hard, earn good money — and feel good about their future. In short, they very much wanted to have their own slice of the American Dream.

As a result, quite a few of those bourgeois students decided to stand up against all that Marxist propaganda.

They ran for seats in the student parliaments, honed their rhetorical skills in weekend seminars to confront Marxist student leaders in public debates and so on.

The road to belated disillusionment

Fast-forward three decades. After a little bit of hesitation, even surprise, on their part, these activists-turned-establishmentarians all express one thought that almost shocks them.

Looking back to those days when the Marxists were so keen on maligning the United States in idiotic ways, had these people perhaps been off target by that much?

Perhaps they had gotten the decades mixed up. Or perhaps it was a case of the United States regressing in a manner that modern Europeans have a hard time comprehending.

When will it get better?

First, there was George W. Bush, a U.S. president, who played loose with the facts. Somebody who made amazing claims, but then was unable to back them up. Somebody who had always preached responsibility, but then chose to act in the most irresponsible manner.

Then came the much more mild-mannered Barack Obama — who ended up more or less captured by the same demons and practices that had made Bush II so unpalatable. That turn of events is precisely what concerns — even tortures — quite a few members of Europe’s pro-American elites.

They are lawyers, bankers, doctors, professors and journalists. They wish it weren’t so.

But events are drastic enough that, in hindsight, they now wonder whether they had been wrong in rejecting the analysis of U.S. motives on the world stage that had been advanced by all those Marxist agitators.

Mind you, the analysis — not the prescriptions about turning toward communism. But that in itself is dark enough a thought that many of Europe’s professional elites are simply shocked by it.

©2014 The Globalist


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Countering the Voices of U.S. Economic Extremism Thu, 17 Jul 2014 16:55:54 +0000 by Richard Phillips

U.S. Capitol Building (Credit: Mikhail Kolesnikov - Shutterstock.comThe economic extremism from the far right could have set the United States far off course.

©2014 The Globalist


by Richard Phillips

U.S. Capitol Building (Credit: Mikhail Kolesnikov -

While definite challenges remain, President Obama and his economic brain trust have done a few things right to lead the U.S. economy into a sustained and consistent long-term recovery.

But you wouldn’t know anything about such progress if you followed the constant diatribes emanating from the mouths of the extreme right on cable TV.

These “commentators” and “market voices” continue to do nothing but obscure the real issues that should be driving the economic debate.

The extremist voice of the Republican Party has not been confined to a small corner of the GOP. It has metastasized to spread throughout the party and afflict its thinking across the board. It has turned potentially moderate leaders like John Boehner and Mitch McConnell into ideological stooges, cowed by the bullying tactics of the misguided few.

With the establishment’s blessing

With elections looming, the Republican “establishment” is desperately trying to pivot toward the center and appear rational in the eyes of a potentially angry electorate. But the “establishment” is as guilty as the extremists for allowing the extremists to take over in the first place.

Against that backdrop, an interesting series of events have recently taken place in the U.S. TV media.

Anchors and commentators long noted for their neutrality are not willing to accept ideologically based extremism anymore. Instead, they are — at long last — calling out prominent proponents of extreme political positions for past mistakes and errors in judgment.

Talking back

Case in point: Rick Santelli, the rabid CNBC commentator. Credited with sparking the advent of the Tea Party movement with a televised rant in 2009, he was recently taken on by his CNBC co-anchor, Steve Liesman. Even more surprising, Liesman received full-fledged support from the other five panel participants.

In short, Santelli was accused of being wrong about everything over the past six years. He was wrong in predicting:

    ■  imminent runaway inflation,
    ■  the collapse of the U.S. dollar,
    ■  the U.S. Treasury’s inability to sell bonds and
    ■  the collapse of the US stock market caused by Fed tapering.

Santelli hasn’t been right about anything since 2008. By making his erroneous prognostications, he has done his audience and his country a great disservice, his co-anchor asserted.

It’s about time someone called Santelli and his cohort of Tea Party “Chicken Littles” dangerously off-base.

The cost of obstructionism

The fact is, this movement has caused harm to the U.S. economy on a grand scale. It has delayed recovery and intensified the stalemate in the nation’s capital. This has had a very real human toll, as right-wing economic intransigence has taken the recovery off the rails time and again over the past six years.

One example of this occurred in April of 2011, when the U.S. economy added a very impressive 322,000 new jobs. The right-wingers chose, however, to refuse to raise the debt ceiling in early August of that year. By then, job growth had plummeted by two-thirds — and any hope of a jobs recovery had been choked off.

As if this weren’t enough, Republicans pulled similar stunts in 2013, one of which resulted in the shutdown of the U.S. federal government. As happened in 2011, job growth plummeted to a mere 94,000 in December of that year.

These extreme right wing economic positions find their roots in an irrational hatred of President Obama and his economic policies.

The facts, please

Meanwhile, a clear-eyed review of those policies yields some interesting statistics:

    ■  Since the recession’s trough in June of 2009, the U.S. economy has added over nine million new jobs – the fastest rate of job creation since the peak boom years of the Clinton Administration.
    ■  Since its post-crisis lows of early March, 2009 the U.S. stock market, as measured by the S&P 500, has risen 191% — the longest sustained bull market in over two decades.
    ■  Since their lows of late 2009, U.S. residential real estate values, as measured by the S&P Case Schiller Index, have rebounded in value nearly 25%.
    ■  Since their most dire levels in mid-2009, first mortgage defaults, as measured by the S&P Experian First Mortgage Default Index, are down by 84% in the United States.
    ■  Since the end of the recession in 2009, the annual U.S. inflation rate has been less than 3% in 45 out of 54 months and has never exceeded 4%. The low inflation rates lead the Fed to conclude that the lack of inflation is a bigger threat to U.S. economic health than inflation itself.
    ■  Since the end of the recession in 2009, U.S. real GDP has grown 9%, putting annual growth at a respectable 2.25% per annum.
    ■  Since the imposition of the “job-killing” Obamacare mandate, the U.S. economy has added – yes added – over 1.7 million jobs.

Undertake a quick thought experiment: What would Republican operatives say about these numbers, based in cold, hard facts – if they had occurred under a Republican president? They would have ceaselessly declared that President an outright genius.

Will any of this matter?

American voters are notorious for their short memories. But in the upcoming mid-term elections, to be held on November 4, a short memory could very well result in economic disaster.

Every American should take some time out to ponder what would have happened to the United States (and how they would have fared themselves) had the government been allowed to get the Republican prescribed “cure” – with banks failing, the automotive industry collapsing and Fannie Mae and Freddie Mac going under.

America would be a third world country had the right-wing extremists had their way. And if they manage to gain control of both houses of the U.S. Congress, as is a distinct possibility come November, that is where they just may take the country in the future.

©2014 The Globalist


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Argentina’s Never Ending Crisis Thu, 17 Jul 2014 16:41:33 +0000 by The Globalist

(Credit: CGinspiration - is on the brink of its third major economic crisis in the last 35 years.

©2014 The Globalist


by The Globalist

(Credit: CGinspiration -

1. Just over a decade after its 2001 crash, which resulted in the largest sovereign debt default in history, Argentina is on the verge of yet another default.

2. In 1910, Argentina was among the world’s 10 wealthiest countries. Today, its per capita income is less than half that of the United States.

3. In the 1940s, President Juan Peron closed the Argentine economy to trade with the rest of the world.

4. In the 1960s, Argentina endured stagnation, inflation and military coups.
5. In 1975, 1981 and 1989, failed economic plans caused the Argentine currency to plunge.

6.In 2001, Argentina defaulted on about $100 billion in sovereign bonds.
7. Now, in 2014, the country is facing the possibility of defaulting on the restructured debt resulting from negotiations with creditors following its 2002 default.

8. Argentina’s economy is classified as an “emerging market” — and is heavily dependent on exporting commodities, such as beef and soy.

9. Cut off from international markets, Argentina confiscated private pension funds in 2008.

10. In 2012, in order to finance its fiscal profligacy, the Argentine government expropriated assets of Spanish oil company Repsol.

From Argentina’s Regularly Scheduled Meltdown by John Lyons (The Wall Street Journal), with additional research by The Globalist Research Center.

©2014 The Globalist


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China as Greece’s Savior Wed, 16 Jul 2014 16:43:16 +0000 by Robert Hardy

Mikrolimano marina in Pireaus, Greece. (Credit: Χρήστης Templar52 - Wikimedia)How the upcoming privatization round in the Eurozone crisis helps China expand its foothold in Europe.

©2014 The Globalist


by Robert Hardy

Mikrolimano marina in Pireaus, Greece. (Credit: Χρήστης Templar52 - Wikimedia)

In mid-June 2014, the world press was dominated by headlines from Iraq, Ukraine and the lack of progress in talks between Iran and the 5+1 group. The Chinese media focused on a much narrower theme: the visit of China’s Prime Minister Li Keqiang to Greece.

Athens rolled out the red carpet for Li, in hopes that Chinese investment could put wind in the sails of its economic recovery.

Li’s visit to Greece was the first by a top Chinese official since then-Premier Wen Jiabao visited the country in 2010 at the start of its economic crisis. That was a case of bad timing.

Li’s aim in making the trip was to secure proposed Chinese investment in certain infrastructure projects. Plus, he knows that Greece could serve as an attractive entry point for Chinese investment in the European Union.

On arrival, in China’s standard flowery language, Li said the purpose of his trip was to “expand the relationship between the two great cultures of China and Greece.” Li signed various government-to-government agreements.

China’s targets

But Li’s real purpose was outlined in an article he penned for the Greek daily Kathimerini, which appeared the day before he arrived.

“We will work together with Greece to turn the port of Piraeus into the best of its kind in the Mediterranean,” he wrote.

“China seeks closer cooperation with Greece over airports, railroads, road networks and other infrastructure. Greece is speeding up privatizations and infrastructure development. China will encourage its acclaimed businesses to play an active role in the process,” he concluded.

Li traveled to Crete, where the Tybaki port and the airport of Kasteli will soon be privatized. They are considered potential investment targets for China.

A dozen ports, including Pireaus and the one at Thessaloniki, are to be privatized under a state asset sales program mandated under the country’s EU-IMF debt rescue.

China’s Fosun Group got China off to a great start in the competition for Greek infrastructure development earlier this year, when it was selected to lead a €6 billion redevelopment of Athens’s old Ellinikon airport into a housing and leisure complex.

The closeness of the relationship and the importance that China attaches to it was underscored in mid-July by Chinese President Xi Jinping’s visit to Greece — a stopover on the Greek island of Rhodes as he was on his way to Latin America for a BRICS summit meeting.

Gunning for the big prize

The big prize is the government’s 67% stake in Pireaus. The Chinese shipping company COSCO is considered the favorite to win the deal due its prior success in gaining the 35-year concession to expand the port’s two main container terminals.

But this isn’t all future stuff. Few people realize that Greek shipowners are the biggest clients of China’s shipbuilders.

The Greek shipping sector accounts for about 7% of Greece’s GDP and employs about 192,000 people. The Greek shipping sector accounts for more than 16% of the global fleet and almost half the tonnage of all European vessels. In total, Greek shipowners have 3,669 ocean-going ships over 1,000 gross tons.

The reason why Li spent a lot of time hobnobbing with prominent Greek shipowners during his visit was not because the companies are for sale, which they are not.

Rather, it was because Chinese shipyards are the main beneficiaries of a building drive by Greek shipowners to add new ships to their fleets.

At present, Chinese shipyards — the biggest in the world by tonnage — have 192 orders for new ships from the Greeks. South Korea follows with 162 new orders for hulls and Japan with 27.

Li made it clear in his meetings with Greek shipowners that it is good for both countries to develop the industry together and to get more efficient.

China’s systematic approach

When Wen Jiabao visited Greece in 2010, he was there to explore investment opportunities. But over the next four years, as the financial crisis took hold of the eurozone, China made very few investments.

Wen hinted that China would help bail the eurozone out. But this aid from China was conditional on the EU agreeing to ease trade rules with China and to end the ban, put in place in the wake of the Tiananmen Square massacre in 1989, on selling China arms and defense systems.

The EU eased trade rules somewhat, but not enough for China’s purposes.

Li arrived in Greece at just the right time. At least two years behind schedule, Greece is finally being forced to privatize many of its state-owned operations. They run the gamut from amusement parks and hotels to railroads, roads, airports and, of course, shipping ports.

In short, Greece has a great deal of targets for Chinese investments. And Athens is desperate for cash, of which China has plenty.

We expect to see China strike many deals to buy Greek government stakes in roads, rails, airports and ports. COSCO seems a cinch to win control of Piraeus, which from a geopolitical and strategic point of view, should trouble Brussels.

The question is whether anybody in Brussels will even notice, distracted as Europe is by events in Ukraine and in Iraq among many other crises, including the EU’s continuing lackluster economic performance.

©2014 The Globalist


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On Iraq, Dick Cheney Used to Be a Truth Teller Tue, 15 Jul 2014 20:14:53 +0000 by Uwe Reinhardt

(Credit: Spirit of America - he became Vice President, Cheney acknowledged that Iraq could disintegrate following a U.S. invasion.

©2014 The Globalist


by Uwe Reinhardt

(Credit: Spirit of America -

Stephan Richter’s recent “Iraq’s Predictable Fate” notes that then German Chancellor Gerhard Schröder had warned the George W. Bush administration in 2002 that the invasion of Iraq was ill-advised.

The majority of Americans — and both political parties — once cheered on that invasion. Americans belatedly have come to realize that they would have been much better off if Schröder’s advice had been heeded.

To be sure, only a tiny minority of Americans have been directly touched by the cost of the war in terms of American lives lost and limbs destroyed. But all Americans will long feel the fiscal burden of amortizing the money cost of the war, including the long-term medical and social support of the warriors sent out to fight that war.

And it is anybody’s guess what the Iraqi people might say now if they were polled on the benefits of the U.S. invasion.

An educated elite

But what about top U.S. policymakers? Were they really so much less educated about Iraq? Were they unaware of the well-known history of tribal enmity that forever smolders beneath the surface in arbitrarily composed Iraq – as well as the futility of attempting to invade that country?

Ironically, and tragically for the United States as a country, none other than former U.S. Vice President Dick Cheney issued the same warning in 1991 and 1994, drawing on the same lessons from history.

Unfortunately, by 2002 Mr. Cheney had all but conveniently forgotten his earlier wisdom proffered during the 1990s. The episode and the details are very much worth recalling, because they show what happens after someone simply “converts” to the belligerent credo of the neo-conservatives (a.k.a. neo-cons).

Cheney, in prior incarnations, had earned a reputation as a measured man. He soon became the top marketer for, and enforcer of, the ill-conceived invasion of Iraq to the American people.

Cheney, the wise man: The evidence on video

On April 7, 1991 Cheney appeared on ABC news’s This Week as the then U.S. Secretary of Defense in the George H.W. Bush Administration. Secretary Cheney was asked by the late elder statesman of ABC News, David Brinkley, why the U.S. government did not invade Iraq proper after the liberation of Kuwait in Operation Desert Storm.

BRINKLEY: One other question — it keeps coming up. Why didn’t we go to Baghdad and clean it all up while we were there?

Sec. CHENEY: Well, just as it’s important, I think, for a president to know when to commit U.S. forces to combat, it’s also important to know when not to commit U.S. forces to combat. I think for us to get American military personnel involved in a civil war inside Iraq would literally be a quagmire.

Once we got to Baghdad, what would we do? Who would we put in power? What kind of government would we have? Would it be a Sunni government, a Shi’a government, a Kurdish government? Would it be secular, along the lines of the Ba’ath Party?

Would it be fundamentalist Islamic? I do not think the United States wants to have U.S. military forces accept casualties and accept the responsibility of trying to govern Iraq. I think it makes no sense at all.

A repeat of these talking points can be seen on a YouTube clip, apparently of an interview on C-Span in 1994. In the interview, then ex-Secretary of Defense Cheney offered roughly the same talking points as he did on ABC News in 1991. He then added ominously:

If you can take down the central government of Iraq, you can easily see pieces of Iraq fly off. Part of it the Syrians would like to have in the West. Part of Eastern Iraq the Iranians would like to claim – fought over for eight years.

In the North you have the Kurds, and if the Kurds spin loose and join with the Kurds in Turkey, then you threaten the territorial integrity of Turkey. It’s a quagmire if you go that far and try to take over Iraq.

Cheney noted in addition that conquering Iraq and deposing Saddam Hussein was not worth the U.S. casualties it might entail, not even to speak on the death toll and hardship it might visit on the people of Iraq.

Why do the U.S. media still cover for the Bush team?

One can understand why former Vice President Cheney would just as soon not be reminded of these prescient remarks made in the aftermath of Desert Storm.

One can understand also why those politicians, pundits and media personalities who are heavily invested in the aggressive foreign policies espoused by the so-called neo-conservatives (or neo-cons) now spare Mr. Cheney the embarrassment of confronting his earlier dicta on Iraq.

After all, even though they are proven wrong once again, they are eager now to use their moment in the media “sun.” They want to provide their neo-con theories with another lease on life in the media spotlight.

What is much harder to understand is why the mainstream media – who make great ado about being papers of “record” — spare Mr. Cheney and the rest of the neo-cons that embarrassment. Their silence prevents Cheney and Co. from being held accountable – the opposite of what American democracy should be all about.

For all their still very voluminous personnel resources, among the U.S. media only very few stood out for their clairvoyance on the subject matter. McClatchy ranks top among those few.

Yes, humans can commit errors, even grave ones. However, the public, or those whose profession it is to work on the public record, should not condone proven malfeasance with their silence. Such silence, in real life, has but one practical consequence.

It makes the silent co-culpable – if not for committing the faulty act itself, but for covering up its tracks by omitting the known facts.

Such deliberate ex-post-facto whitewashing of the past is not good for any democracy’s health, especially one so keen to preach democracy’s virtues around the globe. And it most certainly isn’t what the American people need after their country’s government created chaos in a region that needed stability.

Amateur hour in the Obama camp

Most puzzling of all, however, is the inability of the Obama Administration to defend itself.

Obama’s Administration hardly fights the new charge – now very widely adopted in the media as their dominant narrative on Iraq – that the current mayhem in Iraq is the result of President Obama’s decision, and his alone, to beat a hasty, complete retreat from Iraq at the end of 2011.

If nothing else, that begs the question of what difference the proposed alternative — leaving a residual U.S. force in Iraq — would have made. Would it have been sizeable enough to be able to avert the current calamity in that country — and in neighboring Syria?

A classic and visible example of the Obama Administration’s inability to defend itself against neo-conservative charges, and to inform the American people truthfully on the matter, is the appearance of State Department spokeswoman Marie Harf on Fox News’ The Kelly File on June 23, 2014.

In response to pointed and devastating questioning by Ms. Megyn Kelly, Ms. Harf would have been well advised to remind Ms. Kelly of Mr. Cheney’s sage predictions of 1991 and 1994, had Ms. Harf been aware of them, as surely she should have been.

On more than one occasion, Ms. Harf could also have reminded the interviewer and the Fox News viewers that the decision to withdraw not just combat forces, but all U.S. forces from Iraq by December 31, 2011, was not Obama’s decision alone.

The order actually had been inked into a Status of Forces Agreement (SOFA) signed ceremoniously by none other than President George W. Bush.

He did so jointly with another disastrous creation of the Bush Administration, Iraqi Prime Minister al-Maliki, on December 14, 2008. That event occurred just a few weeks before President Bush left the White House and President Obama was sworn in as President.

Bush did it – and Obama covers for him. Why?

The White House “In Focus” post on that agreement, dated December 14, 2008 includes this bullet:

■  The Security Agreement also sets a date of December 31, 2011, for all U.S. forces to withdraw from Iraq.

This date reflects the increasing capacity of the Iraqi Security Forces as demonstrated in operations this year throughout Iraq, as well as an improved regional atmosphere towards Iraq, an expanding Iraqi economy and an increasingly confident Iraqi government.

A Congressional Research Service (CRS) analysis of this agreement, dated July 13, 2009, notes at the top of page 10 that this statement on the complete troop withdrawal of U.S. troops reflects article 24.1 of the SOFA.

President Bush’s then Ambassador to Iraq Ryan C. Crocker had negotiated it during 2008 with the Iraqi government and President Bush had signed it mid-December of 2008.

The neo-cons and their defenders claim that President Obama would, early in his administration, negotiate yet another SOFA with Iraq, calling for a sizeable residual U.S. force to remain in Iraq past December 2011.

If that were so, then why would President Bush make haste only weeks before leaving the White House to sign an agreement completely counter to that idea?

Continued media complicity

That is the overarching question a well informed and truly vigilant press corps, with some memory of the past beyond a year or so, would pursue vigorously at this stage. A vigilant press corps would ask the neo-cons time and again — at this stage — about it.

Through intense questioning and analyzing, they could make up for past media failures regarding complicity in mindlessly whipping up patriotic fervor pre-Iraq invasion.

In short, faced with an opportunity finally to get the record straight, the mainstream media simply opts out of its self-ascribed role as truth teller yet again.

It is true, of course, that candidate Obama during the presidential election in 2008 had promised to withdraw all U.S. troops from Iraq if elected. It is also true that from time to time he has taken credit for the withdrawal, after it had been effected and before the current mayhem erupted in Iraq.

The president now blames Prime Minister al-Maliki that no residual force was left in Iraq after 2011.

In truth, however, President Obama merely faithfully executed a strategic decision made by President George W. Bush toward the end of his term in office, formally enshrined in his SOFA of December 14, 2014.

One should think that anyone sent by President Obama into the lioness’s den of Fox News’s The Kelly File would have had those facts at her or his finger tips and used them smartly to rebut charges that are at variance with the truth.

Instead, the entire Obama Administration, from the President on down to the State Department, allows itself to be pummeled time and again.

The Obama Administration hardly defends itself against discredited neo-cons whose bold, data-free theories had been put to the trash heap by actual events, precisely as Mr. Cheney had predicted it in 1991 and 1994.

©2014 The Globalist


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A Germany That Bets Big Mon, 14 Jul 2014 16:58:18 +0000 by Stephan Richter

Credit:  HARELUYA - Shutterstock.comFive unconventional moves that made Germany the 2014 World Cup champions.

©2014 The Globalist


by Stephan Richter

Credit:  HARELUYA -

It is an age-old question: Does the soccer field offer broader lessons for life – and can big tournaments lead to changing the perception of nations?

The just concluded 2014 World Cup in Brazil provides an interesting example. Germany won the title deservedly. The question is: why?

For sure, it wasn’t a matter of the German “machine,” as so many commentators argued throughout the tournament.

Ultimately, what won Germany the title in Brazil was five unconventional moves that paid off. Interestingly, most of them are the precise opposite of what Germany is usually associated with.

Rule No. 1: Toss out the old rulebook

Ten years ago, after being ignominiously eliminated from the 2004 European Championship in the opening round of group stage play, Germany’s national soccer team indeed played “machine-style.” There was no longer any denying that this led the team nowhere.

Rather than doing the expected thing – clinging on to what had been quite successful for so long — the German national team’s coaching staff decided it was not really a path to the future. It was time for something new.

Out went the muscular, always sideways passing, unimaginative style of play that had served Germany quite well for so long.

In came reliance on much more agile players who are much more forward oriented. That turned the German team into something that it had not been before – exciting. Bursting into sudden attacks by kicking deep forward passes – and thus opening up the game – became the new mantra.

Rule No. 2: Bet on youth

It is always said that in Germany experience counts over everything. With regard to soccer, that means relying on older players – and forcing the younger players to bide their time.

Ten years ago, the decision was made to bet on youth. And it paid off big-time. Several of the German team’s key players – players like Müller, Götze, Schürrle, Kroos and Reus — are 22, 23 or a maximum of 24 years old. Hence the talk of a “golden generation.”

Rule No. 3: Smart organization beats big money

The key reason for the emergence of the great young players is simple – a proper focus at the club level on grooming real talent at home, rather than teams relying on the power of big money by buying expensive talent.

This is the one dimension where Germany’s talent to organize well came to fruition.

And this is where Brazil, Argentina and many other national teams now openly talk of emulating the German approach to playing soccer – systematically and in a very holistic sense.

Rule No. 4: Individuals matter

A good team spirit has almost always been a hallmark of German teams. In a refreshing departure from past practice, the 2014 edition of the German soccer team has a lot of individual stars.

And they excel for one main reason — having an intuitive understanding of each other, of where they are going to be on the field quite a few moments onward.

Rule No. 5: Democracy in action

Germany is widely viewed as a top-down nation. The “boss” calls the shots, the others click their heels. So much for that stereotype.

The “boss,” in German soccer, is the national team coach, Jogi Löw. He certainly has his quirks and idiosyncrasies – and has been known to act in an authoritarian manner.

During this World Cup, Löw imposed his preferences on where certain players should play on the field and came up with a weird and risky style of defense that could have easily ended in disaster.

And yet, at the same time, during the entire World Cup a very healthy democratic debate took place in the German media that questioned the wisdom of the coach’s lonely decisions.

In a triumph for German democracy, the debate ended up with the coach giving up his insistence on playing a strange defensive style. Popular opinion won out – and the German team, all of a sudden much more solid defensively – went on to win the trophy.

©2014 The Globalist


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