Questions and Observations

Free Markets, Free People

Even the true-believers are losing faith

Mark Halperin has an interesting article in the current TIME.  He wonders how Obama got where he is and how he can change that.  It is interesting for some of language used.  It demonstrates a changing view, even among his supporters, that perhaps – just perhaps – this guy isn’t really up to the job … yet.   That last word that sentence is important. 

Many of us feel he has never been up to the job. We’ve pretty much been proven to be right.  Many have decided after the election that he’s not up to the job.  But there is one other category that will sort of, kind of admit he may not seem up to the job, however that’s just a temporary condition.  Once he finds his feet again, he’ll do fine.  And it that latter category that seems to best fit Halperin. 

But his opening two paragraphs are both brutal and true, whether Halperin really believes them totally or not:

Barack Obama is being politically crushed in a vise. From above, by elite opinion about his competence. From below, by mass anger and anxiety over unemployment. And it is too late for him to do anything about this predicament until after November’s elections.

With the exception of core Obama Administration loyalists, most politically engaged elites have reached the same conclusions: the White House is in over its head, isolated, insular, arrogant and clueless about how to get along with or persuade members of Congress, the media, the business community or working-class voters. This view is held by Fox News pundits, executives and anchors at the major old-media outlets, reporters who cover the White House, Democratic and Republican congressional leaders and governors, many Democratic business people and lawyers who raised big money for Obama in 2008, and even some members of the Administration just beyond the inner circle.

When you have “pundits” like Halperin (you know, the guy who feels compelled as he’s saying this to throw out the "Fox News pundits" bit out there as if they’re really the only pundits mouthing off) compelled to finally be somewhat honest about the man, then he’s in trouble.

A little further on Halperin engages in a little bit of defense for Obama:

Most of Obama’s private (and sometimes public) rebuttals to the voices slamming him on all sides are justified or spot on. He did inherit a lot of problems from the Bush Administration. He did act quickly in the initial weeks of his Administration to stave off a worldwide depression. His efforts at job creation have been obstructed by Republicans (even the proposals based on policies supported by the GOP in the past). His opponents haven’t put forth specifics of their own, nor offered genuine compromise, while the media have allowed the right’s activists and gabbers to run wild with criticism without furnishing legitimate alternative solutions.

Of course all of this depends on how you view what he’s supposedly “done”.  Unfortunately for him, the majority don’t agree that he’s earned the accolades Halperin and Obama think are due him.  And the continued nonsense about “Republican obstruction” when everyone knew he had uncontested Democratic majorities that didn’t require a single GOP vote for quite some time simply isn’t washing with the masses. 

Notice too Halperin’s attempt to spin the opposition.  They’re “allowed” to “run wild with criticism without furnishing legitimate alternative solutions.”

Really?  What rock has he been hiding under – there have been multitudes of alternative solutions offered.  It is just that Halperin and the left don’t want to admit to their legitimacy.  And just who are these organizations which have “allowed” these people to go “wild?”  The same organizations that routinely allowed that same sort of behavior during the last administration.  I guess you just don’t recognize it until it your ox being gored.

But you get a creeping sense as you read the article that Halperin, and most likely other true-  believers, really, deep down inside, understand their man doesn’t have what it takes to do the job in such a way that it will be defensible in 2012. It will be very tough to help someone who seems so bound and determined to do the wrong things politically. For instance, look at how he’s reacted to various political problems:

But Obama has exacerbated his political problems not just by failing to enact policies that would have actually turned the economy around, but also by authorizing a series of tactical moves intended to demonize Republicans and distract from the problems at hand. He has wasted time lambasting his foes when he should have been putting forth his agenda in a clear, optimistic fashion, defending the benefits of his key decisions during the past two years (health care and the Troubled Asset Relief Program, for example) and explaining what he would do with a re-elected Democratic majority to spur growth.

Shorter version: he’s on the defensive and has retreated to campaign mode, the only real success he’s ever had in his life – getting elected to some office.  He’s in his comfort zone.  How are they going to entice him back out of that to “govern”?  How does one get someone who is uncomfortable in the job and the role his election has garnered him to do what he’s supposed to do and not worry about what the critics say?  Apparently they don’t.  He’s abdicated his leadership position before and there’s no indication he’s really all that keen on the role.  Halperin and his side are beginning to see and understand what many of us have understood before he took office.

How lost is Obama, the guy once touted as having one of the most finely tuned political antennas in the world?

Throughout the year, we have been treated to Obama-led attacks on George W. Bush and Dick Cheney, Rush Limbaugh, Congressman Joe Barton (for his odd apology to BP), John Boehner (for seeking the speakership — or was it something about an ant?) and Fox News (for everything). Suitable Democratic targets in some cases, perhaps, but not worth the time of a busy Commander in Chief. In the past few days, we have witnessed the spectacle of the President himself and his top advisers wading into allegations that Republicans are attempting to buy the election using foreign money laundered through the Chamber of Commerce, combining with Karl Rove and his wealthy backers to fund a flood of negative television commercials. Not only is this issue convoluted and far-fetched, but it also distracts from the issues voters care about, frustrating political insiders and alienating struggling citizens (not that many are following such an offbeat story line). Feinting and gibing can’t obscure those job numbers.

Pretty darn lost.  And I, frankly, don’t think much will change in the next few years.  The man is not a leader and he’s not going to learn it in time to help himself.  In fact, because he’s engaged in this battle with the Chamber of Commerce, I’d say he’s in even worse shape than previously imagined and seems to have some pretty bad advisers if they are enabling or encouraging the sort of behavior described above.


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As configured Federal Government is not popular with majority population

One of the points I continue to try and make when talking about Democrats, Republicans and elections is that which ever side is on the winning side this time or that, it’s mostly because the populace is more disgusted with the other side than enamored with their side.

The trend in the “are we on the right or wrong track as a country” has been in the negative for many years.  People aren’t happy in general with the direction of the country or how it is being governed in general, regardless of the party in power.

Gallup points to one of primary “specifics” that relate to that feeling – perceptions about the federal government.  And it isn’t pretty reading if you’re a big government fan:

Overall, 72% of responses about the federal government are negative, touching on its inefficiency, size, corruption, and general incompetence, with the most common specific descriptions being "too big," "confused," and "corrupt."

In fact in another recent Gallup poll, the federal government ranked next to last (only above the oil and gas industry which it has constantly demonized) with only 26% of those surveyed seeing it in a positive light.

This is one of the reasons the Tea Parties exist – they are the small minority of activists which vocalize what much of the population feels and is doing its best via the ballot box to correct.  What the TP does is give the issue the visibility it needs.   A voice to the frustration.

What you see in much of Washington DC is a bunch of government “addicts” (i.e. politicians and bureaucrats) in denial. 

I could go on a riff about all of this for thousands of words, but you’ve all read it before.  It is like the 800 pound gorilla in the room that neither party really wants to acknowledge.  Such acknowledgment would mean a) they’d have to actually listen to the people and that means b) giving up the power they’ve accrued to this point.  And in reality, neither party really, honestly wants to do that (oh certainly there are some in each who might be amenable, but not as a whole, no matter what they say). 

The relatively good news is you can tell both parties are worried about this, but for different reasons.  Democrats realize they’re almost completely on the wrong side of this.  They are, at heart, a big government party.  They see government as the primary means of accomplishing what they visualize as a utopian egalitarian society overseen by a large (costly and intrusive) government.  What is beginning to bother them is realizing how few buy into that vision and want it. 

The Republicans, on the other hand, supposedly embody the principles that the frustrated populace mostly embrace.  The problem is performance.  They haven’t lived up to their principles for decades.  That is why you see insurgent candidates running against establishment candidates and doing well.  The insurgents may be colorful and for the most part, not the choice of the establishment, but that’s the point.  However flawed the insurgent candidates are personally, they represent a message to the establishment.  It is about a type of candidate – philosophically.   They’re essentially saying “you count seats, we count principles” and they’re further saying “we’d rather chance losing the seat that putting someone in there that doesn’t represent our needs” because doing otherwise simply hasn’t worked out in the past, has it?

That is,to me at least, one of the more fascinating aspects of what is going on out there.  And these polls that Gallup and others do indicate this isn’t something which is going to be easily or quickly remedied.  However, it should warn both sides that business as usual is not an option.  And while that may manifest itself somewhat in this election, it is the 2012 political season that is going the be one of the most interesting in decades to watch.


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When going green may not be the healthiest choice

Environmentalists constantly chide us about using plastic or paper grocery bags. “Wasteful” and “bad for the environment” are only two of the criticisms leveled at those of us who use plastic or paper.

But new evidence is emerging that the preferred alternative of the environmental crowd – reusable grocery bags – may not the best or healthiest choice for their family or the environment. In another instance of the law of unintended consequences asserting itself, a person’s attempt to “save the planet” may, in fact, sicken their family and increase their “carbon footprint”.

A recent study found the reusable grocery bags used to carry groceries were loaded with bacteria. Researchers found that people rarely if ever wash their reusable bags. Consequently the tested bags had large colonies of bacteria present. Tests of new plastic or reusable bags found no bacteria present. Included in the bacteria found in some of the used bags tested was the E. coli bacteria (12%). Salmonealla was also present.

All this points to an obvious health hazard for the family. Some would like to ignore it, claiming that the study was funded by a chemical company with ties to the plastic industry and therefore not to be taken seriously. But, as with most arguments of this nature, the proof is in whether the science is good and the findings valid. Reading the study both the science and the findings seem good and valid.

Recently Theresa Marchetta, a Denver, CO reporter, decided to find out for herself. She took a number of used reusable bags to an infectious disease specialist at the University of Colorado Hospital.

Marchetta took the lab results to Dr. Michelle Barron, the infectious disease expert at the University of Colorado Hospital.

"Wow. Wow. That is pretty impressive," said Barron.

Barron examines lab results for a living.

"Oh my goodness! This is definitely the highest count," Barron commented while looking at the bacteria count numbers.

She admitted she was shocked at what was found at the bottom of the bags.

"We’re talking in the million range of bacteria," she said.

Marchetta used swabs provided by a local lab to test several grocery bags for bacteria, mold and yeast.

Three of the samples had relatively low bacteria counts, posing little risk of causing illness. Two were in the moderate range, posing some risk, according to Barron. Two other bags had extremely high counts — 330,000 to nearly 1 million colonies of bacteria. Four of the samples also had relatively high levels of yeast and mold.

While that certainly validated the study’s results, another aspect of Marchetta’s visit to Barron’s lab was just as revealing:

To demonstrate the risk, Marchetta dusted grocery bags with a substance that glows in the dark to see how harmful germs can travel.

With the lights off, it was clear the Glo-Germ had not only stuck to our groceries, it was also on Marchetta’s hands, the counter top, and in the cupboard and refrigerator.

“They like porous surfaces and live longer on plastic,” said Barron, about the bacteria.

Of course, the majority of reusable bags are woven polypropylene. Plastic.

Barron concludes:

"It would be a level of concern getting on your food, on your hands, too," said Barron. "Digging in there, you touch, rub your eyes …all that good stuff.”


"You can have a terrible diarrhea, stomach ache, vomiting. Not a fun thing to have," said Barron.

Or worse if the bacteria is E. Coli.

The solution is to wash the bags after each use. Researchers found that removes about 99% of the bacteria. But that sort of defeats the whole purpose of the reusable bag. It means using the cleansing and bacteria killing effect of laundry detergent. That means introducing phosphates into waste water which, environmentalists will tell you, leads to algae bloom which kills fish and plants. And then there’s the increased carbon footprint that washing the bags brings. Research has revealed that a single load of laundry can emit 1.3 to 1.9 pounds of carbon, depending on what form of detergent is used. If you have to wash your bags once a week, you can do the math.

If all of that’s a concern then one has to ask, what advantage is there to using reusable bags? A person concerned with the environmental impact of using plastic bags is either stuck with risking the health of their family or increasing their carbon footprint and contaminating the water supply.

A true “environmentalist’s” dilemma.


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Unemployment officially remains steady

As I expected, the official unemployment numbers showed little change from last month. The big spikes in private-sector unemployment came at the end of September. The government’s statistical collection period ends in the middle of the month, however, so all of that was missed by the official number. And today’s release is the last one prior to the election.

Still, it can’t be said that this is a good number, with the official rate hovering at 9.6%.

My personal calculation of the unemployment rate, using the historical average of labor force participation, shows the rate of unemployment also holding steady at 13.2%.

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The looming debt crisis

The other day Federal Reserve chairman, Ben Bernanke, addressed a meeting of the Rhode Island Public Expenditure Council. During his speech, he did something Fed chairmen don’t usually do. He spoke about US fiscal policy. His words don’t really relay anything most of us don’t really know, but it is the fact that he felt compelled to say them that make them newsworthy. After I read them, I felt his uneasiness and, like many Americans, his frustration that the political leadership doesn’t seem to understand the problem or its urgency.

A few excerpts from his speech:

[I]n the United States, governments at all levels are grappling not only with the near-term effects of economic weakness, but also with the longer-run pressures that will be generated by the need to provide health care and retirement security to an aging population. There is no way around it–meeting these challenges will require policymakers and the public to make some very difficult decisions and to accept some sacrifices. But history makes clear that countries that continually spend beyond their means suffer slower growth in incomes and living standards and are prone to greater economic and financial instability.

Whether you agree or not that government must address health care and “retirement security”, there’s not much to argue with in the highlighted last sentence. This is Econ 101 stuff. This is something Americans running their own households know almost instinctively. The problem – and frustration- is that Americans suppose this point must be just as obvious to their elected leaders, yet with the wild spending continues. While politicians talk about fiscal sanity and pass bills like PAYGO (that they then promptly ignore or make exceptions too), nothing is really being done about the looming economic and financial instability in the debt load brought on by excessive and persistent government spending.

Failing to address our unsustainable fiscal situation exposes our country to serious economic costs and risks. […] In the longer term, a rising level of government debt relative to national income is likely to put upward pressure on interest rates and thus inhibit capital formation, productivity, and economic growth. Larger government deficits increase our reliance on foreign lenders, all else being equal, implying that the share of U.S. national income devoted to paying interest to foreign investors will increase over time. Income paid to foreign investors is not available for domestic consumption or investment. And an increasingly large cost of servicing a growing national debt means that the adjustments, when they come, could be sharp and disruptive. […]

Again, almost everyone recognizes the truth of Bernanke’s words. If you run household, you know that if you amass huge credit card debt you are going to see an increasing amount of your income stream going to service that debt and less of it available for your use. That means less consumption because you are sending that money to a “foreign lender” – the credit card company. That in turn may translate into less of a house than you wanted, a smaller car or no college for the kids. If you run a business you know that increasing the amount of debt you carry and service means an increasing limit to your ability to expand, invest, hire new employees, improve benefits or give raises. At some point, your priorities take second place to the priority of paying back what you owe.

That’s where we’re headed as a country and more quickly than we might want to admit. Most would like to believe that this problem is understood and a high priority for our leaders. But that doesn’t seem to be the case and we see budget projections out 10 years that pile more and more debt on our already staggering economy.

The politicians continue to tell us it is necessary. They assure us that once the crisis passes they’ll address this problem in earnest. But will it then be too late? James Bacon Jr. addressed that recently in the Washington Examiner, discussing the “tipping point” in which the percentage of debt to the GDP hurts economic growth. According to a paper he cites by the World Bank, that assumed tipping point occurs when public debt equals around 77% of the country’s GDP.

Where are we?

According to International Monetary Fund calculations, the U.S. debt/GDP ratio in 2009 was 83.2%, above the tipping point, and will climb to 109.7% by 2015. […] That implies that the U.S. is experiencing a small growth penalty today: about one-tenth of a percentage point yearly. By mid-decade, however, the growth penalty could swell to 0.56% yearly — more than a half percentage point.

Unfortunately there’s no end to deficit spending in sight. Part of that is because politicians in this culture are not rewarded for doing tough and unpopular things. They’re usually turned out of office. And with the rise of career politicians who enjoy the trappings and perks of power and don’t want to give them up, most politicians are risk averse. Their preferred method of dealing with the “difficult decisions” and “sacrifices” Bernanke says need to be made is to kick the can down the road.

The point Bernanke is making is we can no longer afford to do that. Which brings me to the final excerpt from his speech:

Herbert Stein, a wise economist, once said, "If something cannot go on forever, it will stop." One way or the other, fiscal adjustments sufficient to stabilize the federal budget will certainly occur at some point. The only real question is whether these adjustments will take place through a careful and deliberative process that weighs priorities and gives people plenty of time to adjust to changes in government programs or tax policies, or whether the needed fiscal adjustments will be a rapid and painful response to a looming or actual fiscal crisis.

We have a choice right now – but either way, this is going to hurt. We can take charge and attempt a controlled crash landing to try and save as many as we can, or we can fly this problem until it naturally runs out of gas and deal with the consequences then. Unfortunately, it appears the latter choice is likely to be the only choice, given the current fiscal policy of this administration.


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Unemployment Preview

According to Gallup’s private read on unemployment, we currently stand with an unemployment rate of 10.1%. Gallup says:

Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September — up sharply from 9.3% in August and 8.9% in July. Much of this increase came during the second half of the month — the unemployment rate was 9.4% in mid-September — and therefore is unlikely to be picked up in the government’s unemployment report on Friday.

The government’s final unemployment report before the midterm elections is based on job market conditions around mid-September. Gallup’s modeling of the unemployment rate is consistent with Tuesday’s ADP report of a decline of 39,000 private-sector jobs, and indicates that the government’s national unemployment rate in September will be in the 9.6% to 9.8% range. This is based on Gallup’s mid-September measurements and the continuing decline Gallup is seeing in the U.S. workforce during 2010.

So, when looking at the numbers we have from ADP, showing a 39,000 job loss for the month, plus the sharp spike upward in the last half of September, tomorrow’s unemployment figures from the BLS will miss most of the job losses, and will show a national unemployment rate that is smaller than it truly is.

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Federal Judge: HCR Mandate is Constitutional

U.S. District Court Judge George Steeh has ruled that the individual mandate to purchase health insurance is a constitutional exercise of Congress’ power under the commerce clause.

The plaintiffs have not opted out of the health care services market because, as living, breathing beings, who do not oppose medical services on religious grounds, they cannot opt out of this market…

As inseparable and integral members of the health care services market, plaintiffs have made a choice regarding the method of payment for the services they expect to receive. The government makes the apropos analogy of paying by credit card rather than by check. How participants in the health care services market pay for such services has a documented impact on interstate commerce…

Obviously, this market reality forms the rational basis for Congressional action designed to reduce the number of uninsureds.

The Supreme Court has consistently rejected claims that individuals who choose not to engage in commerce thereby place themselves beyond the reach of the Commerce Clause. See, e.g., Raich, 545 U.S. at 30 (rejecting the argument that plaintiffs’ home-grown marijuana was “entirely separated from the market”); Wickard, 317 U.S. at 127, 128 (home-grown wheat “competes with wheat in commerce” and “may forestall resort to the market”); Heart of Atlanta Motel v. United States, 379 U.S. 241 (1964) (Commerce Clause allows Congress to regulate decisions not to engage in transactions with persons with whom plaintiff did not wish to deal).

The logical extensions of this ruling, if it were to stand, are obvious.  For instance, since everyone inevitably dies, Congress can require you to purchase life insurance, or a pre-paid funeral services.  Similarly, we all eat, wear clothes, etc.

Essentially, this decision gives power the Congress to regulate practically any area of human necessity.

Here’s something I’ve been re-reading a lot, lately:

Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.

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Congress throws fuel on a raging currency war fire

In case you missed it, there’s a currency war going on. It may not be the sexiest thing in the world to talk about, but it is important to understand. Probably the most important thing to understand is, in the midst of all this financial upheaval, it’s not healthy for anyone. In fact that best thing right now would be to back off and let things chill for a bit.

That’s why the US Congress passed a bill calling China a “currency manipulator.” So much for cool heads. Blame it on election year politics and the need to seem to be sticking up for America … even if what you’re really doing is adding more heat to an already ferociously hot situation.

The baseline here is the US believes the Chinese yuan is undervalued by about 25%. And it has been on China’s case for some time to get them to revalue their currency upward. That would make US exports more competitive against China.

But, there’s more to the story than just that.

First thing to know is because of the horrific global financial climate, “Japan, Brazil, Peru and countries all over the world are trying to beggar thy neighbor (just as happened during the 1930s) and gain a leg up for their exports by cheapening their currencies,” according to The Market Oracle. So we have any number of countries trying to boost exports at the expense of their currencies.

You have to then dial it back to June of this year to understand the second part that makes this so complex.  June 19th specifically. Jack Perkowski explains:

That is the day that China, by far the world’s largest currency trader, announced that it would no longer peg the yuan to the U.S. dollar, but would instead peg it to a basket of currencies. What China’s announcement meant in practice is that at the margin, beginning on June 19, China would tilt its purchases in favor of buying assets denominated in the euro, the Japanese yen, the British pound or some other major currency, rather than those denominated in the U.S. dollar. When an investor with $2.5 trillion of buying power makes such a statement, markets tend to listen.

Here is what has happened since.

As of the September month-end, the euro has increased in value by 10.3% against the U.S. dollar since June 19, the pound by 6.3%, and the yen by 7.8%. In fact China’s purchases of yen-denominated securities has heightened trade tensions between Japan and China to the point where the Japanese have complained publicly that China is effectively pricing Japanese products out of the market with its yen purchases, threatening to derail Japan’s economic recovery.

In the broadest measure possible, the United States Dollar Index (“USDX”) has declined by over 9.6% percent since June 19. The USDX measures the value of the US dollar against a basket of currencies that includes the euro, yen, pound, Canadian dollar, Swiss franc and the Swedish krona — exactly the currencies that China is most likely including in its own basket and which are now appreciating as a result. The USDX began in March 1973 with a value of 100.000 and has since traded as high as the mid-160s. At its current level of 78.691, the USDX is approaching its 33-year low of 70.698, which was reached on March 16, 2008.

On the one hand you have countries everywhere trying to cheapen their currencies to sell their exports (China wants theirs to stay right where it is) in order to boost GDP growth. And on the other you have China’s move away from pegging the yuan to the US dollar to pegging it to a basket of other currencies, and driving those currencies higher and making their exports less competitive.

Unpegging from the US dollar has also driven the dollar down relative to those  other currencies but still much higher than the yuan, which has only appreciated 2%.

Back to the point about the bill just passed by Congress. It doesn’t really help:

But the former U.S. trade representative, Susan Schwab, says that – while there’s a very real problem in terms of China artificially keeping the renminbi low, this isn’t the way to solve anything. Schwab calls it "a signal-sending exercise during an election season". She says that the bill won’t really do anything, even if the Senate passes it and it is signed into law. Schwab says it "makes no sense", won’t solve any problems, will escalate tensions, and will only divert attention from the real trade problems between the U.S. and China.

In fact the “election signals” may blow up in our face:

Indeed, Schwab warns that other countries might decide that this U.S. bill means that it’s open season for addressing currency manipulation, and that other countries believe that the U.S. is manipulating our currency. She says there could be a "boomerang effect" from the legislation.

All we’d need now to kill our recovery as weak as it is, is to have a full blown, open season, take no prisoners currency war where the dollar would be weakened even more than it is now. And that’s especially true if the “quantum easing” (printing more money) the Fed has been hinting about is about to take place.

What no one seems to want to admit is now is not the time for any country to be revaluing its currency upward. The US is demanding of China what it wouldn’t do itself.  Until the financial crisis has passed, these demands that China push the value of the yuan up should be on hold. Then, as Zachary Karabell explains, it is in China’s best interest to see the value of the yuan eventually increase:

China has been revaluing its currency, nearly 20% between 2005 and 2008 and now nearly 3% since June when the government resumed that policy having shelved it during the midst of the global financial crisis. It is in the domestic interest of the Chinese government to raise the value of their currency because they are focused on building up on internal, domestic consumption market. They have no wish to be dependent long-term of the vagaries and whims of American consumers, and higher purchasing power for Chinese consumers is the answer. They are not revaluing quickly enough to suit an America stuck in second gear and looking for someone to blame, but revaluing they are.

And there’s the bottom line – the US recovery isn’t going as well as we’d like it and as seems to be the penchant among US politicians, they have to have someone else to blame for the problem.

Solution: throw gas on a raging fire. I sure hope China has cooler heads at the helm.


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Has North Korean succession been settled?

The answer to that question is “probably.”  That’s a step up from “possibly.”  But in the Hermit Kingdom, nothing is really ever certain.

The recent late night announcement by Kim Jong-Il of the promotion of his third son, Kim Jong-un to the rank of general in the North Korean People’s Army (NKPA) has removed any lingering doubt as to which of his sons is his chosen successor. The promotion repeats a pattern from the past.  Kim Jong-Il was also promoted to a high post in the NKPA in 1991 by his father, Kim Il Sung, to establish his future claim to the top position in the country.

According to Dr. John Ishiyama, a Professor of Political Science at the University of North Texas and expert on North Korea, the sudden rush to establish his third son as his legitimate and chosen heir to power has been accelerated by Kim Jong Il’s deteriorating health.

But, says Ishiyama, there are some other promotions, which have taken place, which are also important to understand and indicate how any succession in the near future might be handled.  Kim Jong-un is in his late 20s and is virtually untried, having had little or no experience to date within North Korea’s power structure.  If Kim Jong-Il were to die soon, he’d be left to fend pretty much for himself.

However Kim Jong-Il has now carefully prepared the way for a sort of “regency” if should die unexpectedly. Kim Jong-un’s consort is a visible part of the top leadership, and in the position of Kim Jong Il’s personal secretary for years, is thought to wield exceptional power. Additionally, Jong-un’s uncle, Jang Soong-taek, considered by some to be an opposition figure, has been reconciled with the family and promoted to the vice-chairmanship of the National Defense Council, solidifying his position in the power structure. Kim Kyon-hui, Jong-un’s aunt and Soong-taek’s wife, is a 4 star general in the NKPA as well as holding a powerful position within the ruling Korean Workers Party.

All of that suggests that the consort, aunt and uncle will form a power clique that will be the actual “power behind the throne”, until Kim Jong-un is deemed to be prepared to take the reins of power himself.

In the meantime, and unlike the careful grooming Kim Jong Il got from his father, Kim Jong-un will be set upon a relative crash course to learn what is necessary for him to survive and thrive in the leadership role his father will leave him. The recent promotion sets him on that path and the other promotions are designed to protect him and enable him to learn the levers of power there.

It won’t be an easy task by any means.

The totalitarian nature of the regime, the poor international standing of the nation, the sanctions imposed by other nations for its role in nuclear proliferation, another bad harvest and the subsequent rumors of starvation all combine to paint an even bleaker future for the country than present. All that can be realistically hoped for at the moment is that when the young Kim Jong-un does take power he will look outward with the aim of reform and rejoining the society of nations instead of looking further inward and remaining on the road to eventual catastrophic ruin.


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