The Big Picture..that nobody talks about.Submitted by rb25de on Mon, 11/19/2012 - 09:00
It would appear, from recent discussion, that many are focused on those aspects, both econonic and political, that challenge the stability, security and economic growth of a nation. Many identify the symtoms, and search for the answers, but don't fully understand the disease.
The disease that eminated many decades ago, embraced in the 1960's by most developed western nations, that now could be considered terminal, if not addressed systematically.
When you understand the root cause, you come to understand the role of such issues as, that of oil, the petrodollar, interventionism, socialistic trends, the centralised banking system, the NWO and other issues that seemingly defy logic when viewed in isolation.
I'm going to re-post this from January 15th, 2012 as it clearly defines the role that Globalization has played in the over-all economic scheme of capitalistic greed and short-sighted, bad decision making.
GLOBAL POWER SWAY.
Globalization: Its insidious agenda and diabolical consequences.
There are no prizes for realizing the world is rapidly approaching an exceptional moment in history as to what countries will be the most dominant forces in global affairs. At this point in time, the United States, in spite of its precipitous economic and sobering sociological upheaval – with the former element obviously exacerbating the latter – still has the largest economy as well as being the most powerful military contender on the planet.
With respect to the latter factor and, even allowing for the savage cuts Washington is making with military expenditure, it will remain so for at least another decade. Of course, there’s no shortage of seers advancing theories as to how China and India will soon usurp the US and become economic and military superpowers. And the empirical evidence to sustain such opinions and, indeed, America’s imminent demise, are validly compelling.
Unfortunately, these visionaries can’t comprehend or, perhaps, conveniently ignore to take into account negative facets, which clearly diminish their prognostications. But because there are so many intricately complex elements, connected with the contentious dramas confronting Western nations, it would require a great amount of space to proficiently analysis them all in detail. Hence, I will only be conveying morsels of opinions that are pertinent to the confluences, which engendered the mess we’re currently in.
Undoubtedly, a majority of people would assume, by utilizing palpable data that it’s a fait accompli for China and India to become the major economic and military powers by 2025. However, the reality about all this coming to pass, in the manner being projected won’t be as cut and dried as many now advocate. And this is principally so, because these seers fail to fathom and factor in the socio-cultural-political intricacies, pertinent to any of these countries. To epitomize how far off the mark these Think-Tank theorists can be is clearly demonstrated with how askew they’ve been with how the Arab Spring would turn out. Similarly and unfortunately, when these same clicks of intellectuals conjure up plans for economic development you can bet that they will invariably disregard the complexities of human-nature.
But before advancing grounds as to why the forecasts being made about the rise of China and India – in league with the West’s demise – won’t necessarily come to fruition as some might believe, it’s an absolute imperative to first of all highlight the exact process, which spawned this dastardly scenario to evolve. Because in all of the material I’ve ever scrutinized on this topic, with the very exception of one passage in an article by Karen Kissane, in the Sydney Morning Herald’s News Review, Jan 14-15, 2012, I have never once read anything by academics, politicians, journalists or economists pertaining to the causes. Ostensibly, what I’m referring to here is globalisation.
At this point I will now convey part of the pertinent text I’m referring to by Karen Kissane, in the article, ‘D-days for the Europe experiment’ is as follows: “The west launched globalisation as a way to open markets and increase competitiveness – and it did both. But what was perhaps not so well foreseen was the degree to which capital and manufacturing jobs would move to countries with cheap labour”.
Perhaps, most people would assume that globalization came to pass as a matter of course. However, this is not the case and, in fact, it was very much a contrived agenda and was first being seriously mooted back in the 1930’s – but WWII certainly put paid to that from taking place later than sooner. But using the time that the Lima Declaration was endorsed in 1975, irrefutably exhibits that globalization was well and truly being instituted from as early as 1950. And this is so, because it would have taken at least twenty years for the various players involved with bringing something of that magnitude to fruition to reach amicable levels of consensus on how best to enact affairs. Unfortunately, anyone who even suggests that there is anything untoward with the LD is immediately portrayed as being a kooky conspiratorialist. However, the reality is that the LD is the absolute root cause of the economic demise of Western nations.
So what then is the Lima Declaration and what was its goal? Quite simply, the Lima Declaration purported to be: “A plan of action calling for the redistribution of world industry so that Developing countries would have 25% of it by the year 2000” in order “to establish a fairer distribution of the world’s wealth”. Of course, all of that sounded very cosy and munificent. But the reality of the LD was, in fact, anything but a magnanimous act by Western societies and was actually an insidious technique, utilized by wealthy Western industrialists to justify dismantling their manufacturing businesses and transfer them to the Developing World. But its real purpose was to ruthlessly exploit the labour forces in Developing countries; in order to make greater profits. And to delude oneself it was anything other than that is ludicrous.
No doubt, the Captains of Industry [who really inaugurated the process of dismantling the West’s secondary industries] thought they could easily manipulate and seconder China into the global money-go-round. Unfortunately, this didn’t come to pass, because the Chinese have completely out manoeuvred theses fools and gazumped Western industrialists at their own game and demonstrates how stupid they were to imagine China wouldn’t keep-the-bat, once it became their turn. Succinctly, the Chinese acquired massive investments and hundreds of years of accrued technologies and data from the West, for merely ‘opening their borders’. In effect, what the Chinese accomplished here was an inverse Trojan Horse scenario. Whereby, they were completely awake to all the tricks at hand from the very onset and allowed all of the aforementioned aspects to flow into China for virtually no input or effort and have exponentially capitalized on that largess.
But now, apart from being able to whinge and wail about being duped by the Chinese, the perpetrators of this insane folly can’t do much at all about altering the situation. And this is so, because if they really began to play hard-ball, by imposing sanctions and trade tariffs, then China would just nationalize industries that Western investors have very significant stakes in. So, if they tried on that kind of action it would result with share holders ending up with zilch. Hence, they are humiliatingly obliged to accept their fates.
Meanwhile, the US and the Euro zone are forced to borrow billions from the Chinese, in order to purchase the very commodities that China produced: In other words, Western nations borrow money from the Chinese to purchase back the very goods that they’ve exported. Well, how crazy is that? But the greatest joke about it all is that, up until twenty five years ago, the nations now importing all these goods to consume, produced all of these things in their own countries! Kissane makes reference to this exact point with: “as billions of low-paid workers have been absorbed into the global economy and productivity had risen due to technology, jobs have stagnated in Europe. [These days] Asia makes, and is booming; Europe borrow in order to consume and is now going bust”.
Of course, there was a fabulously alluring and mesmerizing upside of globalisation for Western consumers. And it prevailed with making it possible to obtain everything from laptop computers to high definition TV’s, right through to footwear and clothing, for much less than they could have been manufactured for in a Western country.
However, the immense down side of globalisation – in order to have all of those marvellous commodities at bargain prices – is that, an estimated 60 million manufacturing jobs in the USA, Britain, France, Canada and a score of other developed nations had to be culled. Certainly, new spheres of employment evolved to absorb the next generation of workers. But those ‘new spheres’ such as IT, finance or even hospitality and service sectors [call centres] are now similarly being lost to the Emerging World. But none of the aforementioned categories produce tangible commodities which, of course, equates to real wealth. Tragically, over the past three decades, wealth generation in Western countries has been inextricably derived from speculative origins and for the good majority of people this has primarily transpired with real estate. However, to sustain the consumption-go-round it was crucial that easy-lines of credit were available for consumers to accomplish this. In effect, millions of people sustained affluent life styles by virtue of borrowing against their primary asset: their home.
Now, there’s absolutely nothing intrinsically wrong with acquiring goods and services on credit. After all, if 99% of people had to save up enough cash to purchase furniture and white-goods – let alone buying a home – then economies would collapse; because the key component of a dynamic and healthy economy requires customers to consume goods and services. Therefore, debt/financing is completely necessary to make it function. But where the whole schedule encounters severe problems and, eventually comes undone, is when consumers over extend themselves and can’t meet repayment commitments. This, of course, primarily occurs when people are made redundant from jobs and their incomes take nosedives. But what greatly aggravated matters for so many people came to pass, because their properties lost, on average, 22% of their pre-GFC value. But be that as it may, those poor souls still weren’t compensated by owing financiers 22% less, because market-values were over priced. Hence, when these victims of the recession were forced to vacate their homes they also had no positive equity to draw upon to minimize their predicament.
Therefore, because real estate prices are – or have been – over valued by at least 20%, consequently means people had to divert that amount from their incomes into paying rent or mortgages for dwellings or businesses. Hence, people would have had a comparable amount more to spend on consumables – or save. And, therein, lays a very significant element of the West’s current economic woes. Quite simply, the illicit and illusory means of generating wealth from property speculation is the mega-crux of the issue. So, if people weren’t forced to shell out anything between to $200 to $500 a month in ‘excessive’ rents or mortgages – on what was/is clearly the greatest Ponzi-scheme of all time – would then mean they could have spent their money on a whole array of goods and services.
Ironically, in the very edition of the SMH’s News Review, in which Karen Kissane mentions the negative aspects of globalisation an article, ‘Silence like a cancer Grows’, by its US Correspondent, Anne Summers, appeared pertaining to how none of the Republican presidential hopefuls have spoken about “America’s growing housing crisis”. Even though “one in four American mortgage holders are [designated to be] ‘“underwater”’ owing more than their homes are worth”. Well, part of the reason for this is, because a significant number of any of their financial backers would be guilty of acquiring portions of their wealth from real estate investments.
So, if this would have happened it would have stimulated other sectors of the economy. With the end result being there’d be greater consumer demand and would have equated to millions of more people being employed in either production or service sectors. In turn, this would have spawned a multiplying effect accruing to several billion dollars over a period, which would have generated revenue for governments and, most significantly, less welfare recipients.
Regrettably, the very ilk of people [economists] who incessantly convey directions on what has to be now done, to assuage our financial woes are, in reality, the ‘very ilk of people’ who instigated the economic calamity we’re now in. Of course, just about all of those currently dispensing advice on how to deal with the present catastrophe had absolutely nothing directly to do with globalisation occurring. However, they would know only too well that, the plans that had being drawn up way back in the 1950’s, to “globalize markets” are, in fact, the sole cause of our present problems. Yet, when these contemporary oracles appear in the media espousing their wisdom on how to solve the present mess they neglect to tell us that, it was economists who created the problems we’re now experiencing in the first place.
As pointed out, the original plan was for the Developing World to “have 25% of world industry by 2000”. Well, as it came to pass, this was closer to 40% by 2002 and today it is nearly 70% – with China having over 65% of that figure. Hence, China is now a manufacturing colossus that, with the exceptions of motor vehicles and white goods, supplies the bulk of the world’s manufactured commodities. But where the Chinese have made matters inexcusably more ominous for competition exists, because they artificially keep the Yuan undervalued. Thereby, this piece of stealth makes it extremely difficult for foreign competitors to operate on a level playing field.
With respect to the brasher of these two upstarts, China, there are aspects to seriously contemplate which seriously diminish popular assumptions about its current militaristic capabilities and, most significantly, what its near-term intentions actually are. With the most fundamental drawback against China starting a conflict is, because there is not one nation of any significance China could remotely depend upon to align with it. And although the Taiwanese have re-elected President Ma Ying-jeao, who ran on a platform of “mending and enhancing relationships with the motherland” the only nations, apart from North Korea, that China might have on their side, are a cabal of metastable tin-pot societies, in Africa or the central/south Pacific Ocean. Concerning, Taiwan’s, Ma Ying’s comment refereeing to China as “the motherland” should come as no surprise, because Chinese all over the world overwhelmingly consider themselves to always be Chinese first and foremost; even though they might be four or five generations removed [by immigration] from having been in China. As opposed to every other major immigrant group into the US, Canada and Australia, from Europe, who can now only be identified from whence they came, because of their surnames.
For instance, China has been insidiously nurturing political relationships with countries like Angola, Sierra Leone, The Sudan or Tonga for up to twenty years. But the best any of them could possibly do is offer facilities for China’s ships to dock in. So, because China is devoid of any formidable allies, means she would have to wage war wholly from within her own borders. But, because China needs to import 85% of its energy and mineral needs from countries, which are far removed from its borders means it’d be an impossibility to maintain supply lines.
Therefore, [assuming that conflicts were contained to conventional methods] it’s extremely unlikely that, Beijing could seriously entertain emulating what occurred on September 1st 1939 and try to occupy Vietnam or Burma. Sure, there have been a number of worrying skirmishes, which China has clearly provoked with their near neighbours over disputed territories and resources. However, when the dust has settled it’s apparent that they’re equivalent to school yard quarrels in which there’s basically been just a lot of macho talk, chest puffing and a few wild swings having being thrown. But there have been no broken bones or serious injuries.
Having said that, however, isn’t to suggest that China won’t attempt to seize an oil or gas field in the South China Sea within the next decade. But Chinese politicians know only too well that, if they took such an action it would render a response from a “coalition of the willing”, which would be too diabolical to ponder. Thus, for the time being at least, the likelihood of China being the initial aggressor is minuscule. And it’s abundantly obvious that, China is certainly content to plod along under the existing status quo. This is so, because it well and truly holds the upper hand with economic dominance. And the West is totally dependant upon China exporting its manufactured goods to sustain their own economies.
Therefore, if China engendered military conflicts at this point in time it would undermine all that they’ve accomplished with exporting their industrial products. Thus, they have no intention of starting any war for at least a decade, because it would have quite adverse affects upon them. Unfortunately, those who share the view I have expressed are silly enough to believe that, this will always be China’s policy. When, in fact, it’s just the tactic that China is more than happy to employ for the time being. But come 2025, China will be certainly throwing its weight around.
However, where the greatest threat to the security of Western nations actually exists, is not with China asserting itself militarily, but within the Chinese Diasporas to Canada, the USA, Australia, New Zealand and, more recently Europe. An estimate of how many ethnic Chinese there are in the aforementioned countries is put at 25 million. And it’s an absolute certainty that, the vast majority of these ethnic Chinese immigrants will side with the motherland and form Fifth-Columns to organize against the host culture, when China does assert itself militarily. And the empirical evidence of such clearly denotes that, as Chinese communities grow in size then so, too, do they become more removed from mainstream culture. Furthermore, those 23 Chinese who immigrated to the US and managed to acquire positions in sensitive fields are now languishing in prisons for ceding information to their masters in Beijing.
A glaring and horrifying example of this can be found in Sydney, where more than a dozen suburbs of this city have been inundated with huge influxes of Asiatic immigrants over the past twenty years – with ethnic Chinese comprising about 70% of the total number of some 500,000 immigrants; with the most disturbing instance of this being within the City of Sydney’s main CBD itself. For here we can witness tens of thousands of very young Asiatic immigrants. Almost all of whom, it should be designated, grafted their way in to become Australian citizens, by rorting student visa programs. All up, about 40% of the entire downtown CBD has now been overrun by Asiatic immigrants. And if you venture through this precinct – which is contained within the 50 block area between Town Hall railway station along to Broadway – you will see that the vast majority of those you pass at any part of a day, are Asiatics under the age of thirty.
In respect of China’s economy becoming the ‘largest’ on earth is something that’s guaranteed to occur. Nevertheless that’s due, completely, to the size of its population and the natural process of increased rates of consumption. But what does it really mean for the West and by achieving such a status how debilitating will that be for other nations?
Well, the answer to the first question is that just because China’s GNP will rise to numerically exceed that of the US, doesn’t mean the incomes and standards of living for 80% of China’s population will markedly improve. Because, the reality is that the quality of life for the vast majority of China’s population will remain appreciably less than those of the US. However, in the same instance it’s just as true that, around 20% of America’s population by 2020 will have a lower standard of living to what they did in 2000. At this point I will make it perfectly clear that, the 20% I refer to will be a new and, separate group to the present 15% of America’s population, which is already poor.
As for ‘how debilitating will that be’ for the US – and even Western European nations, also – is a really perplexing conundrum. And this can only be satisfactorily explained by incorporating the answer to the other question. In a nutshell, the lowering of living standards for a very significant proportion of America’s population – as a direct and indirect consequence of the West dismantling and transferring its secondary industries to the Developing world, predominantly with China, since the late 1970’s – will not be taken stoically by those who are most adversely afflicted by the downturn. And this is clearly evidenced in the Occupy Wall Street and clone movements, which sprung up across the US in the latter months of 2011. But it’s really too difficult and contentious a situation to assert, with any confidence, where it all might end.
These assured changes in financial circumstances for many millions of people in the US, from being [aspiring] middle-class to welfare-dependant, are impossible to accurately assess how dramatically it will alter social cohesion. But it is a lay down knocktaker to be detrimental! And the reactions by the millions of people who have or, will become dispossessed and detached from the affluent and comfortable lifestyles that they once were part of, will certainly generate social mayhem and will resonate with a Grapes of Wrath scenario.
Of course, there are significant disparities between the times that Steinbeck wrote about and now. And this is primarily, because only a comparatively minuet number of Americans, prior to the Great Depression, would have ever experienced truly affluent lifestyles – which basically equates to having disposable incomes. Hence, the drop in quality of life would have been much easier to bear. And this situation would have been far easier to cope with, because it was buttressed by virtue of enduring religious ties and close knit community social infrastructures. But what makes it considerably different between the 1930’s and now, prevails in the fact that, over 50% of people between the ages of 30 to 55 do not reside within 700ks of where they grew up in. As a result, they have maintained only limited to casual contact with family and school day friends. Subsequently, their economic demise has not merely transformed them from being members of a prosperous middle-class to welfare recipients, but vanquishes them to social isolation.
For the time being, at least, there are safety-nets in place to soften landings. However, governments cannot possibly maintain indefinite lines of support for the less fortunate. And whilst the US has various alternatives and assets to help it struggle along, the same does not bear true for the governments of Spain, Italy or Portugal etc. Quite simply, none of them can possibly prolong the current condition of borrowing money to carry the growing contingent of their dispossessed citizens, because they do not have any avenues available to produce wealth to then be able to repay their debts.
As a result of this, hardly a week has gone by in the last 30 months in which, President Obama or someone from the government, doesn’t say: “We’re working hard to find ways to get people back to work”. Regrettably, unemployment figures have continued to hover over 9% for three years, which is bad enough in the short-term; but that figure is foreboding for an extended period. And I will reiterate that, a key part of the reason for high unemployment rates is due, to the US having haemorrhaged over 60% of its manufacturing sector jobs since 1980. But that, of course, is only an element of the equation and primarily accounts for people over the age of 40 with non-college and tertiary level educations.
But around a 25% of all America’s current throng of unemployed are people with tertiary level educations, whose annual incomes prior to this recession were at least $65K – and many of them earned over $100K. Hence, their falls from grace are far more difficult to cope with, as opposed to someone who was only being paid eight bucks an hour flipping meat patties, in Times Square. And it is this educated category of people who are of most concern to those sentinels administering the system, because they have the educational capacity to formulate new political organizations that are capable of undermining their hold on power. But that wouldn’t be a bad thing at all to occur, because America’s political compositions are so out of date, inept and incompetent that they really need to be purged of the parasitical and dead log elements – with K-STREET being an absolute instance of this. Lamentably, unlike in many other liberal Western democracies the avenues for the disgruntled to form new political parties in the US, is akin to Jason acquiring the Golden Fleece.
Apropos to the scenario of political discontent, which motivated people to mutiny against the system, has already transpired by virtue of the Tea Party. However, it’s obvious that Tea Party activists don’t want to form a ‘new’ political party to revamp the political landscape, because they are clearly extreme-adjuncts of the Republican Party and quite content to remain lobbyists. So, considering that Tea Party members are basically dyed-in-the-wool republicans, who fully embrace meritocratic ideologies that, made America the great society she rose to become, means their sympathies for the unemployed are, all the same, quite limited. And it’s safe to suggest that their enduring beliefs would be that, instead of these protestors [many of whom are victims of the GFC] Occupying Wall Street or blockading docks in Seattle, so ships can’t be loaded that they should be utilizing their time and efforts with being productive. But that, of course, is the Catch-22 situation, because if there were genuine opportunities available for them then there wouldn’t be people Occupying Wall Street, in the first place.
Unfortunately, the type of people that the Tea Party is riddled with are blinded to this reality and are incapable of comprehending that what’s initiated people to Occupy Wall St. to begin with is analogous to the encroaching sands of the desert in Namibia. In effect, whilst the high unemployment levels that America is presently experiencing aren’t their doing it is irresponsible for them to do nothing constructive to alleviate the situation. This is so, because the lack of employment opportunities for millions of people has far reaching and detrimental consequences and the economic and sociological decline we’re currently witnessing will ultimately affect everyone. For example, taxes will have to be raised to levy social security payments.
Of course, it’s easy for me to assert what I have done and I know it’s a gargantuan issue to confront. But the reality is that there’s nothing remotely in place or a light at the end of the tunnel for people to look forward to that, offers them hope and lessen their plights. And this condition is being made worse by virtue of the pig-headedness being shown by the Republicans in vetoing anything that Obama submits, which might set to improve matters.
As for India rising to compete with China in manufacturing is something that isn’t likely to happen! And this is primarily so, because India is far too internally fractured by graft, castes, cultures and religions to ever emulate what China has done. Fundamentally, India lacks the discipline and direction needed to imitate what China has achieved. Apropos to the distinct reason why China has accomplished the incredible feat it has with development is, because of centralized corruption – which can be defined as ‘State Capitalism’. Whereas in India, because there are as many financial maharajas in transit, as there are religions in India, means they will never ever get their act(s) together in mutual cooperation. Hence, it’s a total waste of time to even contemplate this prospect.
Of course, over the past twenty years there have been many millions of Indians who have and, will continue to, excel in specialized skills, such as IT and medicine and for them their standards of living have risen exponentially. But within the lower rungs of Indian society – well over 80% of the population – there is little evidence at all to suggest these people will reach similar echelons as has happened for a significant proportion of ‘working-class’ Chinese and become at least quite comfortable. Furthermore, for it to ever happen would necessitate China dismantling a segment of its own industrial sector and ceding it to India; which is a billion to one of ever taking place.
Finally, in can be unmistakably identified within Ernest Schumacher’s, ‘Small is Beautiful: Economics as if people really mattered’, that he, as an insider to the scheme, was warning us about the perils of globalisation – albeit, though, it wasn’t called as such when he penned his discourse. And whilst Small is Beautiful, certainly wasn’t intended to be offering absolute answers for economic problems it’s pertinent to highlight where Schumacher, in one of his essays, draws a comparison to India and Australia and asks: “What is the benefit for Australians, if they can buy a pair of jandals [thongs] for ten cents a pair, but no one has a job to be able to afford to obtain them”? He went on to say: “Thus, it’s obviously more economically viable for jandals to be manufactured in Australia and cost Australians $10 a pair and have low unemployment levels”.
Obviously, Schumacher’s view in this example is simplistic: But the gist of what he was expressing certainly isn’t! And that, of course, is that: What’s the point in something being dirt cheap, but because 40% of the population are unemployed they’re too poor to buy them?
January 15, 2012.