Two dollar pound

vimothy

yurp
sorry, i apologise, i took you off my ignore list for 5 minutes.

don't worry, all's back to normal- resume your casual racism, and foolish generalisations

Sorry yourself mattb, and I'd prefer it if you didn't accuse me of "casual" racism so casually, unless you are going to explain what you mean and where I have been racist.

[Oh but wait, no one could possibly disagree with your stance on the Iraq war without being some sort of evil bastard - and a dole scrounger - probably a racist as well]
 

dominic

Beast of Burden
Surely you've just answered your own question.

not really

seriously, do you actually think the u.s. will ever make good on its debts to other countries???

do you actually think that u.s. trade deficit is sustainable?

and, if not sustainable, what will be the nature of the "correction" to the system?

please address these questions before you accuse me and others of economic millenarianism

Yeah, perhaps the US will initiate a WW to desperately try to maintian its global hegemony, perhaps it will fire off nukes at random in an evil bid to destroy the whole world, perhaps - shmerhaps.

i didn't say nuclear war

but certainly u.s. grab for control of middle east (iraq, iran) could be interpreted as competition vis-a-vis all other economic powers -- again, the overarching purpose of such wars is not to "build democracy" but to have control over oil, at least enough control to make sure it remains largely denominated in dollars

so if u.s. were to attack iran, might this not be seen by china as a provocation??? might it not be seen by all other capitalist powers as contrary to their interests-- or at least as strong-arming them to continue to value dollars?

I would be prepared to give more credance to this if it weren't so obvious that the US is incapable of maintianing the will to fight a Low Intensity Conflict in the Mid East in support of establishing a democracy, let alone going to war with everyone on the planet out of spite.

spite combined with urgency and desperation

much more powerful spurs to action than lofty ideals -- especially when nobody buys into the lofty rhetoric, save for a few

problem, of course, is getting americans to realize that (A) they're plebians of the imperial center and (B) that it'd be in their material interest to remain plebians at the center rather than pauperized barbarians at the periphery of a new world order

Anyway, I think that the collapse of US economy would be very bad for the rest of the world - it's one of the twin dynamos (along with China) of modern capitalism.

how is the united states still a dynamo? isn't it more like a keynesian state that could be replaced by europe and japan, after a decade or so of painful transition?

or if the u.s. is not so easily replaced, then maybe the world capitalis order is about to come to an end? in which case you should be a millenarian too

Think that your cushy American life has also left you dangerously short of the mark. If you want to experience life in an economic disaster - move to the third world. There's lots of places to choose from, and the beers always cheap! (Provided, of course, that they sell beer). But why do you think that people migrate from the third world in any case?

you don't think there were aspects of life during 1930s depression-era American superior to today's culture? or of 1980s northern england preferable to blairite england?

my point is that if u.s. economy were to collapse, it would not in fact be the end of days -- in some ways, life might well be better -- and yet i also said that i fear the pain and fear the unknown

in treating me as a simpleton, you don't come off as wise

and as for why people of the third world move to the u.s., must i really address this question? b/c obviously america has the highest material standard of living in the world right now, coupled with the rule of law -- but the material standard of living is based on a false economy . . . .

It's all interconnected - I don't think that the post-crash US will simply just become more like Belgium and then everything continues as before but without as many bullish Republicans starting wars they can't be arsed to finish.

yes, well that's the question, again, isn't it? will the global capitalist system survive the collapse of the u.s. economy, if the u.s. indeed collapses

and, yes, i do agree that it is quite foolish and ignoble of u.s. not to end a war that it started. on the other hand, the level of political discourse in this country is so low and deceitful, that there was never any real support for the war -- so this is what happens -- sad but true . . . .


i mean only that a world economic order dominated by the chinese central bank, or even by brussels/frankfurt, will likely be none too sympathetic to the plight of the ordinary american post-crash

who's going to provide the capital to put americans back to work, once the dust has settled

and if they do put americans back to work, who's going to pay them a decent wage?

OR rather, this is simply my fear of the unknown

as an american, the prospect of a post-american world is a source of some anxiety

Stop listening to Rage Against the Machine?

never have, mate

merely acknowledging my ambivalence


Won't it be great to be poor and hungry, oh the solidarity it will breed! Give me a break, if you want to experience that kind of life, go and tell your boss to fuck himself, throw away all your money and live on the streets, battling for every meal.

again, i already acknowledged as much above = "isolated, bitter, ashamed"

you should be a bit more sporting in your manner of argument

Leave the rest of us out of it.

it's got nothing to do with anything i do or say, i can assure you
 

vimothy

yurp
you should be a bit more sporting in your manner of argument

Yeah, you're right - like I said I was getting a bit carried away and behaving like a twat. Apologies; will come up with a post containing actual content as soon as I get all this stuff out of the way.

[Although you must see the parallels between christian millenarianism, socialist waiting for the glorious revolution and the sort of post-modern fatalism that is equal parts "ooh we're all commodified by global capitalism" and "well, it's all going to end badly, then you'll be sorry" - call it a negative faith in the future if you want, but it's there.]
 

craner

Beast of Burden
You know what, it's wierd right, but Dominic is acually a Straussian.

No, sorry, I meant Strausso-Deleuzian. It's a great category too!
 

craner

Beast of Burden
although that says more about how the tone in the ploitics and thought sections have been lowered by imperialist nitwits

What are you talking about Matt B??? It's never been better. I didn't think that you would succumb to the echo chamber mentality. Vimothy revived this board from its terminal volition. Give him some credit.
 

matt b

Indexing all opinion
What are you talking about Matt B??? It's never been better. I didn't think that you would succumb to the echo chamber mentality. Vimothy revived this board from its terminal volition. Give him some credit.

i was in a bit of a bad mood this morning, so partial apologies, i'm just tired of people seeing marxists/swp as 'the left' and making assumptions about the inherent superiority of western culture/politics. this place deserves better than that.
 

vimothy

yurp
please address these questions before you accuse me and others of economic millenarianism

Ok, the accusation of economic millenarianism comes from the general tone of some of the posts on this thread: “the end is nigh”, “the US is doomed”, etc. You can surely see, even if you think that your predictions are correct, the basic pessimism of this view. Not that there haven’t been some pretty spot on things said, but there has been a weirdly moralistic fatalism to some of the claims. Idlerich’s first post asked about the current exchange rate of dollars to pounds; pretty cool, I thought, if I had some money I might even buy some (ragged trousered capitalist that I am, I ain’t got much cash), supply and demand, blah, blah. But then came the predictable claims that the US economy is about to enter freefall, with the subtext that the US fully deserves it for being such an imperialist-capitalist dog, and that globalised capitalism will get its longed for comeuppance. If we’re heading for an era which will make the great depression seem like a pleasantly aimless stroll in the park, what’s with all the smug cheering? I wonder if people aren’t eagerly anticipating the removal of their noses (actually probably more terminal than the nose though) to spite their faces.

Luckily for us, though, the situation is hardly so dire.

First off, let me just imagine what the common consensus is (forgive me if I’m misrepresenting anyone’s views). Imports displace domestic production, so real gross of domestic product is reduced. The US trade deficit for 2006 was $763.6 billion, including a goods deficit of $836.1 billion. Cue much hand wringing by commentators in the press, "they're heading for a massive fall of biblical proportions"; even the Commerce Department thinks that this will have a knock-on effect on the US economy.

However, none of this is supported by the facts, and I notice that no one seems to be discussing actual figures. (Go here http://www.whitehouse.gov/cea/pubs.html). Starting in 1980, every year in which the current account deficit shrank as share of GDP, real GDP growth averaged 1.9 percent. When deficit grew modestly (0.0 – 0.5 percent), GDP growth averaged 3.0 percent. When the current account deficit expanded at an annual rate of more than 0.5 percent, real GDP growth grew by 4.1 percent. Coincidentally, the last time the US had a trade surplus was in 1991, and the economy was in recession. The current account deficit’s share of GDP is currently expanding gradually, as is GDP growth.

Economic growth fuels import growth: an economy which is expanding will naturally see an increase in the demand for imports (right?), an increase in domestic investment responding to the stimulation of business seeking to meet higher demand and in turn an increase of foreign capital seeking to profit from new investment opportunities. Capital account surplus = current account deficit, because that’s the balance of payments. So: accelerated GDP leads to domestic investment, which leads to the inflow of foreign capital, which leads to the current account deficit.

Basically, the current account deficit, while not responsible for a strong economy, is actually a good indicator of one.
 

vimothy

yurp
i was in a bit of a bad mood this morning, so partial apologies, i'm just tired of people seeing marxists/swp as 'the left' and making assumptions about the inherent superiority of western culture/politics. this place deserves better than that.

What's inherent about it? Strange thing to say...
 

dominic

Beast of Burden
You know what, it's wierd right, but Dominic is acually a Straussian.

No, sorry, I meant Strausso-Deleuzian. It's a great category too!

errrr, i'm must object for the record that i'm neither

i merely defended Strauss on this forum once again some of the more silly attacks against the man and his thought -- having read several of his books and been taught, as an undergrad, by students of his students -- however, as i foolishly did another kind of school rather than grad school for philosophy or political theory, i hardly qualify as a Straussian or an adherent of any school of thought for that matter

as for Deleuze, i can't make heads or tales of anything the man's written, despite cursory attempts every five years or so
 

dominic

Beast of Burden
interview with emmanuel todd

and this interview w/ mr todd

emmanuel todd interview said:
The Conceited Empire

Neue Zuricher Zeitung (The New Zuricher, Sunday morning)
08 August, 2003
Translated by Andreas Artz

NZZ: Mr. Todd, you write that America is economically, militarily, and
ideologically too weak to actually control the world. This would gladden
many anti-Americans. But how is this anything but the wishful thinking of an
intellectual who is the product of the French US critical tradition?

ET: This is neither wishful thinking nor anti-Americanism. Why would I have
been so prominently criticised by the left? The French career anti-American
paper "Le Monde diplomatique", was the only major paper that remained
conspicuously silent on my book. The over-estimation of America is
fundamental to these people. It is on this topic that they agree with the
American ultra-conservatives: the former to demonize, the latter to
aggrandize.

NZZ: You on the other hand can be accused of underestimating the United States.

ET: On the contrary, the US is still the most powerful nation in the world
today, but there are many indicators that they are about to relinquish their
position as solitary superpower. In my 1976 book, La chute finale (Before
the Fall: The End of Soviet Domination), I based my prediction of the fall
of the Soviet Union on the relevant indicators of the time. An analysis of
current demographic, cultural, military, economic, and ideological factors
leads me to conclude that the remaining pole of the former bipolar world
order will not remain alone in its position. The world has become too large
and complex to accept the predominance of one power. There will not be an
American Empire.

NZZ: Nevertheless, if others are to believed, this empire has already been long
in existence. "Get Used to It" was a recent headline in the New York Times
Weekend Magazine.

ET: That is very interesting. Now that the concept no longer corresponds to
reality, it becomes commonplace. While there actually was a basis in
reality, there was scarcely a mention of the concept.

NZZ: Then you are of the opinion that there was an American empire at one point?

ET: The American hegemony from the end of WW II into the late 1980s in military,
economic, and ideological terms definitely had imperial qualities. In 1945
fully half the manufactured goods in the world originated in the US. And
although there was a communist bloc in Eurasia, East Germany, and North
Korea, the strong American military, the navy and air force, exercised
strategic control over the rest of the globe, with the support and
understanding of many allies, whose common goal was the fight against
communism. Although communism had some dispersed support among
intellectuals, workers, and peasant groups, the power and influence of the
US was by and large with the agreement of a majority throughout the world.
It was a benevolent empire. The Marshall Plan was an exemplary political and
economic strategy. America was, for decades, a 'good' superpower.

NZZ: And now it is a bad one?

ET: It has, above all, become a weak one. The US no longer has the might to
control the large strategic players, primarily Germany and Japan. Their
industrial capacity is clearly smaller than that of Europe and approximately
equal to that of Japan. With twice the population, this is no great
accomplishment. Their trade deficit meanwhile, is in the order of $500
billion per year. Their military potential is nevertheless still the largest
by far, but is declining and consistently over estimated. The use of
military bases is dependant on the good will of their allies, many of which
are not as willing as before. The theatrical military activism against
inconsequential rogue states that we are currently witnessing plays out
against this backdrop. It is a sign of weakness, not of strength. But
weakness makes for unpredictability. The US is about to become a problem for
the world, where we have previously been accustomed to seeing a solution in
them.

NZZ: Assuming you are right: how did this budding empire slide so quickly into
decline?

ET: A rift has been developing, slowly at first and then more quickly, between
the US and their various geo-political areas of interest. During the early
1970's a deficit in the balance of trade began to open. The US assumed the
role of consumer and the rest of the world took on the role of producer, in
this increasingly unbalanced global process. The balance of trade went from
a deficit of $100 billion in 1990 to $500 billion annually at present. This
deficit has been financed through capital flowing into the US. Eventually
the same effect experienced by the Spanish in 16th and 17th centuries will
come to bear. As gold from the New World flooded in, the Spanish succumbed to decreasing productivity. They consumed and dissipated, lived high and beyond their means and fell into economic and technological arrears.

NZZ: But America is still the leading example of economic and technological
competence.

ET: When I speak of the economy, then I mean the industrial core and the
associated technological cutting edge, not the anemic New Economy. It is in
the core industrial sphere that the US is falling dramatically behind.
European investors lost billions in the US during the nineties, but the US
economy lost an entire decade. As recently as 1990 the US was still
exporting $35 billion more in advanced technology than it was importing. Now
the balance of trade is negative even in this field. The US is far behind in
mobile communications technology. The Finnish Nokia is four times the size
of Motorola. More than half the communications satellites are being launched
with European Ariane rockets. Airbus is about to surpass Boeing -- the most
important transportation medium for personnel traffic in the modern global
economy is about to be manufactured primarily in Europe. These are the
things that are ultimately important. These are by far more vital and
decisive factors than a war against Iraq.

NZZ: Are you saying they are waging the wrong war in the wrong place?

ET: The US leadership doesn't know anymore where to turn. They know that they
are monetarily dependant on the rest of the world, and they are afraid of
becoming inconsequential. There are no more Nazis and Communists. While a demographic, democratic, and politically stabilizing world recognizes that
it is increasingly less dependant on the US, America is discovering that it
is increasingly dependant on the rest of the world. That is the reason for
the rush into military action and adventures. It is classic.

NZZ: Classic?

ET: The only remaining superiority is military. This is classic for a crumbling
system. The final glory is militarism. The fall of the Soviet Union took
place in an identical context. Their economy was in decline, and their
leadership grew fearful. Their military apparatus gained in size and stature
and the Russians embarked on adventures to forget their economic
shortcomings. The parallels in the US are obvious. The process has
significantly accelerated in the past few months.

NZZ: Where do you see the indicators of these developments?

ET: In European politics and in the weakness of the dollar. In my book I
postulated an increasing commonality between France and Germany. In the
meantime the positions adopted by the German Chancellor Schroeder and the
French President Chirac in opposition to Bush have substantiated my
"Historian's Theory". The unexpected, immediate, and strong response from US Defense Secretary Donald Rumsfeld took aim at "old Europe". It is, in fact, the new Europe that instills fear in him.

NZZ: In the meantime, however, eight European states have come out in support of
the US.

ET: The significant occurrence was in Germany. The US can only maintain its
position as sole superpower so long as it can maintain control over Germany
and Japan, both of which are huge creditors of the USA. Therefore the
historical significance cannot be over estimated, that a German chancellor
could win an election on a "no to the war in Iraq", in effect a no to the
United States.

NZZ: What about the weak dollar?

ET: As a historian, the dollar represents a "mentality indicator" to me. It
reflects the awareness of international trade and business leaders of the
realities of the American economy. The weakness of the dollar is indicative
of their assessment that the situation is much worse than is openly
acknowledged. The fact is that troops destined for the war in Iraq, which
has been represented as a simple mission, are still not totally prepared.
After a year of back and forth, the diplomatic heavyweights of France and
Germany are trying to prevent this war, and the balance of the allies are
participating mostly verbally, not financially. There is an immense risk in
engaging in a war on the opposite side of the globe while fettered by a $500
billion trade deficit, a weak dollar and supported only by friends who are
unwilling to share the costs.
 

dominic

Beast of Burden
remainder of todd interview

emmanuel todd interview said:
NZZ: You write that in the future there will be three, perhaps four strong
polarities, of which the most influential will be Europe. Are you counting
on an emerging European Superpower?

ET: One of the working propositions of my book, After the Empire is that the
concept of military control of the globe no longer makes any sense. In
relation to the military, there will be a balance of power in the future.
There is still a nuclear balance of power between the US and Russia. The
notion that sections of the globe can be controlled through military might
is passé, because it is unrealistic. You can destroy regimes and bomb their
infrastructure, as the Americans have done in Afghanistan, but the
populations -- including those in the developing world -- have become
educated and literate enough to eliminate any possibility of
re-colonization. The only power that ultimately counts today is economic
power.

NZZ: Do you believe that Europe has the "right stuff" economically for superpower
status?

ET: Why not? It is often said that the Europeans are somewhat naïve and passive.
They are accused of having neglected their military. But when you understand
that military might is no longer the true power, and when you see that
presently the Americans no longer possess the economic means to maintain
their military apparatus, then you must conclude that the Europeans have
done the right thing. They have placed their reliance on their economy. They
have introduced the Euro. Their industrial policies are coherent and
substantial. Airbus is only one example. Europe is well armed.

NZZ: For what is Europe "armed"?

ET: For the conflict that is just beginning between the Americans who want a war
in Iraq, and the Europeans who in effect don't want a war. Iraq, being close
to Europe, is a supplier of oil to Europe as well as Japan. Nevertheless,
they can afford to buy their oil with the money they earn from their
industrial exports. They are economically strong enough to not have to
control Iraq with military intervention. The US on the other hand, as a
consequence of their massive trade deficit, barely has the means to pay for
their oil consumption. That is why it is vital to exercise military control
over this region on the other side of the globe. On the surface this appears
to be a question of "war or no war", but in fact it is most likely a
question of whose sphere of influence will Iraq fall under, Europe or
America?

NZZ: Who will win this battle of the spheres of influence?

ET: Most apparent is how clumsy the US has been to date, and how far they have
moved away from any notion of universality. They don't see the world as it
really is anymore. They are failing in any balanced and fair approach to
their allies. All of this reminds me of Germany under Wilhelm II. The US is
losing allies steadily. One gets the impression that an office somewhere in
Washington has been tasked with the duty to daily prepare a scheme to
develop new enemies for the US.

NZZ: Is it conceivable that Europe will one day attain the position America has
enjoyed?

ET: There will never be another single super power. In addition to the US,
Europe, and Japan, Russia will rise again to prominence. China, despite
their presently weak technology, will soon join the fray. Nevertheless, the
traditional superpowers are all stagnating. But the developing world is fast
gaining. And that is cause for some hope.

so . . . .
 

vimothy

yurp
Hahaha - that's going to take a while to digest, and I haven't even finished replying to your last post yet! Off to investigate ...
 

vimothy

yurp
Seems like an interesting blog; not sure about Todd, though at least he seems a bit more interesting than your average anti-American, quasi-fascist, French intellectual.
 

vimothy

yurp
This is old but solid, a Cato Institute report to Congress from 1998:

Far from being a drag, a trade deficit can be a good sign for an economy when it reflects growing demand for imports. When an economy expands, consumers are able to afford more goods, both domestic and imported. Returns on investment also increase, attracting foreign capital. The combination of inflowing capital and increased demand for imports tends to widen the trade deficit. That explains why every recent U.S. economic expansion has been accompanied by an expanding trade deficit.

If the aim of Congress is to eliminate the trade deficit, then we must either increase national savings or reduce investment. The surest and swiftest way of reducing investment, and thus the demand for foreign capital, would be for the United States to enter a recession. It's no coincidence that America's smallest trade deficit in recent years--that is, the last time our country came closest to "restoring the balance" in trade--occurred in 1991, in the middle of our last recession.

When it comes to the U.S. trade deficit, there is no emergency. The current trade deficit is not a sign of economic distress, but of rising domestic demand and investment. Any quick fix by Congress is likely to do far more harm than good. Imposing new trade barriers against imports will only make Americans worse off while leaving the trade deficit virtually unchanged. I would urge Congress to ignore the trade deficit and focus instead on reducing and eliminating barriers to trade, wherever they exist.

- http://www.freetrade.org/node/358
 

dominic

Beast of Burden
one of the things that i've gleaned from the setser blog, and i say "gleaned" b/c a great deal of economic analysis is beyond me, is that one must consider the nature of foreign investment in the united states . . . .

in the 00s most foreign investment in the u.s. was UNPRODUCTIVE investment, channeled mainly toward real estate

granted, in the 90s a great deal of investment went toward the technological sector (and billlions were lost -- ha)

and i suppose the japanese have built a few car plants here and there

but for the most part, foreigners hold lots of dollars and so rather than just let the dollars sit in the bank and inexorably lose value, they attempt to find some profitable use for their dollars in america -- and so that has meant real estate, you know, the mad strip mall and track-housing developments that will be ghost towns once the oil crisis kicks in hardcore

as far as productive investment goes, investment that would enhance america's industrial capacity and give its citizens a real prospect of prosperity down the line -- not very much investment at all
 

vimothy

yurp
Just a quick response because I've got loads to do before I finish for the weekend - check the Cato Institute report, they discuss foreign investment and changes to US industry. Like I said, it is old, but the principles remain the same. Of particular relevance is the section, Myth: "Trade Deficits Mean Lost Jobs".

Also, a lot of what you're saying seems to rely on the fact that there definately will be a crash. I don't think I understand why you think this is going to happen, other than the fact that you don't like America and/or capitalism. (I'm not attacking you for that).
 

vimothy

yurp
and i say "gleaned" b/c a great deal of economic analysis is beyond me

Yeah, you need a PhD in Maths to understand a lot of the econometrics stuff - personally, I'm hopeless at it.
 

IdleRich

IdleRich
Sorry to be pedantic

Vimothy, you have a weird blind spot with "definitely" - you always spell it with an a.
 
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