Seems like paranoia until you read the same thing in more than one place

[T Roosevelt]

This is a great article from the Daily Reckoning newsletter. It's interesting how a white paper written by a Chinese bureaucrat ties in with much of what is discussed in this forum...

The Daily Reckoning PRESENTS: When 'real value' is no longer what seems to matter... you can be sure it matters more than ever...

THE ERA OF FICTITIOUS CAPITALISM
by Addison Wiggin

Perspective.

While doing radio interviews this fall regarding themes in our book, the question invariably arises: "France? Nice place to visit, but why the heck do you live there?"

The short answer is, of course, the wine is cheap and the woman are... um, elegant. The long answer is, we gain perspective. It's the long answer, because it requires an explanation. One could gain perspective from just about anywhere, of course... but why not do it in a place where the wine is cheap and the women pleasing to look at?

An English reader, who also lives in France, recently passed on an interesting article written by a Chinese bureaucrat, published on a non-profit website hosted in Italy, sponsored by the government of Singapore. The aim of the site is to increase amicable relations between Asia and Europe in a U.S.-centric world. The purpose of the article: a strategic recommendation on how China ought to position itself while the U.S. and Europe - as the major players in the two-bloc international system the author predicts will eventually emerge - gear up for eventual war.

If we were writing our daily missives from our offices in Baltimore, would such a site, and such an article, be interesting? Probably. But we'd likely judge the origin of the site through Murdoch's lens at Fox News, like so many TV-addled minds do, and dismiss it out of hand. Away from influence, living as foreigners, in a country where they don't pronounce words as they are spelled, we take to the extraordinary like gnats to a sugar bowl. We are addicted to the taste and go there often to get a buzz going. But we are under no illusions that it has nutritional value.

What could possibly interest us about a Chinese bureaucrat's white paper on impending global war? First of all, his conclusion: "In the last century," writes Wang Jian, "American people were pioneers of system and technology innovation. However, the interests of a few American financial monopolies now lead this country to war. This is such a tragedy for the American people.

"Clouds of war are gathering. Right now, the most important things to do for China are:

1. Remain neutral between two military groups while insisting on an anti-war attitude.
2. Stock up in strategic reserves
3. Get ready for a short supply of oil
4. Strengthen armament power
5. Speed up economic integration with Japan, Hong Kong, Korea and Taiwan... "

It's a rather unsettling idea. China as the neutral power in a war between the United States and a united Europe. How did Wang get there? That's the subject of the second part of the article, which we find intriguing... and even more unnerving. Wang's view is disturbingly similar to our own understanding of the way the global economy works.

"War is the extension of politics and politics is the extension of economic interests," Wang asserts. "America's wars abroad have always had a clear goal, however, such goals were never made obvious to the public. We need to see through the surface and reach the essence of the matters. In other words, we need to figure out what the fundamental economic interests of America are. Missing this point, we would be misled by American government's shows and feints."

Wang's argument in a nutshell: By the mid 1970s, the U.S., the U.K., France, Germany, Italy, Japan and other major capitalist countries had completed the industrialization process now underway in China. In 1971, when Nixon closed the gold window, the Bretton Woods system collapsed, and the dollar - the last major currency to be tethered to gold - came unstuck. Economic growth as measured by GDP was no longer restricted by the growth of material goods production. Toss in a few financial innovations, like derivatives, and the "fictitious" economy assumed the central role in the global monetary system.

"Money transactions related to material goods production," writes Wang, "counted 80% of the total transactions until 1970. However, only 5 years after the collapse of the Bretton Woods the ratio turned upside down - only 20% of money transactions were related material goods production and circulation. The ratio dropped to .7% in 1997."

As we note in our book, since Greenspan assumed the central role at the most powerful central bank in the world, he has expanded the money supply more than all other Fed chairmen combined. From 1985-2000, production of material goods in the U.S. has increased only 50%, while the money supply has grown by a factor 3. Money has been growing more than six times as fast as the rate of goods production. The results? Wang's research reveals that in 1997, before the blow-off in the U.S. stock market, mind you, global "money" transactions totaled $600 trillion. Goods production was a mere 1% of that.

"People seem to take it for granted that financial values can be created endlessly out of nowhere and pile up to the moon," our friend Robert Prechter writes in his book, Conquer the Crash. "Turn the direction around and mention that financial values can disappear in into nowhere and they insist that it isn't possible. 'The money has to go somewhere... It just moves from stocks to bonds to money funds... it never goes away... For every buyer, there is a seller, so the money just changes hands.' That is true of money, just as it was all the way up, but it's not true of values, which changed all the way up."

In the fictitious economy, the values for paper assets are only derived from the perceptions of the buyer and seller. A man may believe he is worth a million dollars, because he holds stocks or bonds generally agreed in the market to hold that value. When he presents his net worth to a lender, a mortgage banker for example, and wishes to use the financial assets as collateral for a loan, his million dollars is now miraculously worth two. If the market drops, the lender, now nervous about his own assets, calls in the note... the borrower once thought to be worth two million discovers he is broke.

"The dynamics of value expansion and contraction explain why a bear market can bankrupt millions of people," Prechter explains. "When the market turns down, goes into reverse. Only a very few owners of a collapsing financial asset trade it for money at 90 percent of peak value. Some others may get out at 80 percent, 50 percent or 30 percent of peak value. In each case, sellers are simply transforming the remaining future value losses to someone else."

As we saw in the 2000-2002 bear market, in such situations, most investors act as if they were deer being approached by a speeding truck at night. They do nothing. And get stuck holding financial assets at lower - or worse, non-existant - values. Anyone suffering glances at their pension statements over the past few years knows their prior "value" was a figment of their imagination.

Back to Wang: "In the era of fictitious capitalism, a fictitious capital transaction itself can increase the 'book value' of monetary capital; therefore monetary capital no longer has to go through material goods production before it returns to more monetary capital. Capitalists no longer need to do the 'painful' thing - material goods production."

Real-life owners of stocks, bonds, foreign currency and real estate have increasingly taken advantage of historically low interest rates and applied for mortgages backed by the value of these financial assets. Especially since the rally began 8 months ago, they then turn around and trade the new capital on the markets. "During this process," writes Wang, "the demand of money no longer comes from the expansion of material goods production, instead it comes from the inflation of capital price. The process repeats itself."

Derivatives instruments, themselves a form of fictitious capital, help investors bet on the direction of capital prices. And central banks, unfettered by the tedious foundation set by the gold standard, can print as much money as is required by the demands of the fictitious economy. You can, of course, trade the marginal values of these fictitious instruments and do quite well for yourself. http://www.dailyreckoning.com/body_headline.cfm?id=3589 >

But Wang sees a darker side to the equation. "Fictitious capital is no more than a piece of paper, or an electric signal in a computer disk. Theoretically, such capital cannot feed anyone no matter how much its value increases in the marketplace. So why is it so enthusiastically pursued by the major capitalist countries?"

The reason, at least until recently, is that the "major capitalist countries" have been using their fictitious capital to finance consumption of "other countries'" material goods. Thus far, the most major of the capitalist countries, the U.S., has been able to profit from the system because since the establishment of the Bretton Woods system, and increasingly since its demise, the world has balanced its accounts in dollars.

"Until now," writes Wang, "U.S. dollars for 60-70% in settlement transactions and currency reserves. However, before the 'fictitious capital' era, more exactly, before the fictitious economy began inflating insanely in the 1990s, America could not possibly capture surplus products from other countries on such a large scale simply by taking advantage of the dollar's special status in the world... Lured by the concept of the 'new economy', international capital flew into the American securities market and purchased American capital, thus resulting in the great performance of U.S. dollar and abnormal exuberance in the American security market."

And here we arrive at the crux of Wang's argument that a war is brewing. "While has been bringing to America economic prosperity and hegemonic power over money," he suggests, "it has its own inborn weakness. In order to sustain such prosperity and hegemonic power, America has to keep unilateral inflow of international capital to the American market... If America loses its hegemonic power over money, its domestic consumption level will plunge 30-40%. Such an outcome would be devastating for the US economy. It could be more harmful to the economy than the Great Depression of 1929 to 1933."

Japan's example suggests, as your editors have oft reminded you, that a collapse in asset values in a fictitious economy can adversely affect the real economy for a long time.

In the era of fictitious capital, Wang surmises, America must keep its hegemonic power over money in order to keep feeding the enormous yaw in its consumerist belly. Hegemonic power over money requires that international capital keep flowing into the market from all participating economies. Should the financial market collapse, the economy would sink into depression.

America's reigning financial monopolies, he believes, (whoever they may be), would not stand for it.


Addison Wiggin,
The Daily Reckoning

P.S. Wang writes that he was disturbed to draw these conclusions. And as noted above, he recommends that the Chinese government plan accordingly.

He could not be any more disturbed than your editors here in the Paris office. We've grown to like the perspective we've developed while enjoying carafes at the Paradis and watching passersby pass by. Trouble is, if Wang's conclusions are correct, then the currency most suited to challenge the hegemony of the U.S. dollar has just this week closed at a historic high of $1.20.

Editor's note: Addison Wiggin is the editorial director of the Daily Reckoning. He is also the author, with Bill Bonner, of the New York Times Business best-seller Financial Reckoning Day: Surviving The Soft Depression of the 21st Century, (John Wiley & Sons). For more, see:

"The most important investment book I have ever read... "
http://www.agora-inc.com/reports/RCKN/FDR

[nadinbrzezinski]

1. One major monkey wrench is if China and Japan both

call on the securities they own, just oh 40% of our national debt

[DuctapeFatwa]

2. Oh you are the mischievous one!

I wish I'd had Wang's piece when I was trying to explain why it's the idea of an Islamic ECONOMY that scares the fine Italian drawers off the oilngun posse.

[many a good man]

3. Economic warfare

France and Germany are the anchors of the European Union. Both have made noise about Europe needing to become the counterbalance to the US in a unipolar world. The Euro is the first currency with a credible shot at dethroning the US dollar. Europe has a generous state welfare system with comparatively small expenditure on arms. The US has the opposite. Europe can dethrone the US without firing a single shot by supplanting the dollar as the world's preferred reserve currency.

China and Japan are sitting on the fence with their legs hung over the side facing the US. Their central bank vaults are stuffed to the ceiling with US dollars. Those dollars are losing value every day, about 35% in the past two years. This remains in their interest as long as the US provides demand for their goods as it keeps their factories humming. As the dollar continues to slide and wages slip in the US, imports cost more and demand falls. As all nations buy their oil on world markets in dollars, the unstable dollar makes this arrangement more and more uncomfortable. The Euro looks better and better.

As the credit bubble grows larger and larger its wall becomes thinner and thinner. Diplomatic finesse and a return to a sound fiscal and monetary policy here must commence immediately to avert the meltdown mentioned in the article. An aggressive unilateralist stance by the United States will in time be met with resistance. Not with nukes, rockets, tanks and bombs, but with paper and commands entered into computerized trading programs.

[NJCher]

4. we invest in arms, they invest in people

So, war with Europe. Just as I was thinking of moving there. Bombed if I do, bombed if I don't.

Excellent post, TorchesAndPitchforks. Much to think about here.

The U.S. invests in arms and the Europeans invest in what r-wingers derisively call a "welfare state." But the truth of the matter is that the European countries invest in their people.

This analysis, by George Monbiot, is the single best article I've ever found at DU. It explains how excess capital can go to replenish the human resources of a nation or the destructive route--sophisticated arms development and the biggest military budget the world has ever seen:

http://www.monbiot.com/dsp_article.cfm?article_id=562


Cher

[54anickel]

5. Good post T. China has been doing just what the author states here

"Clouds of war are gathering. Right now, the most important things to do for China are:

1. Remain neutral between two military groups while insisting on an anti-war attitude.
2. Stock up in strategic reserves
3. Get ready for a short supply of oil
4. Strengthen armament power
5. Speed up economic integration with Japan, Hong Kong, Korea and Taiwan... "

[bemildred]

6. I would be surprised to see a shooting war between the US and Europe.

The US is basically fucked, and there is no solution but
getting back to basics and fixing the mess. If it gets to be
a shooting war, we will lose, assuming the planet is not turned
into a patchy expanse of green, radioactive glass, BECAUSE we
no longer have the necessary manufacturing capacity or the skills
base to support it. Have you ever considered how much of what is
in all that hi-tech weaponry comes from elsewhere in the World?

The good part is that the rest of the World has no interest in a
catastrophic collapse, and I expect we have some residual amount of
good will from our better days, so I expect that efforts will continue
to let us down easy.

The good part of paper money is the same as the bad part, you can
print all you want to, it's elastic.

Otherwise this Chinese fellow is quite perceptive.

[cosmicaug]

7. Germany.

Bemildred wrote:

The US is basically fucked, and there is no solution but
getting back to basics and fixing the mess. If it gets to be
a shooting war, we will lose, assuming the planet is not turned
into a patchy expanse of green, radioactive glass, BECAUSE we
no longer have the necessary manufacturing capacity or the skills
base to support it. Have you ever considered how much of what is
in all that hi-tech weaponry comes from elsewhere in the World?

Two questions:

• Would people in post Versailles, pre WWII Germany have said at the time that Germany is basically (economically) fucked?
  
• Is US manufacturing capacity somehow irreversibly lost or would it be possible, if it was perceived that the need truly arose, to restore a great deal of it?

[bemildred]

9. Hmm ...

Would people in post Versailles, pre WWII Germany have said at the
time that Germany is basically (economically) fucked?

How would I know, and why is that relevant? You are actually discussing twenty
years or so in which great changes occurred in Germany. In any case I doubt
they would have used the colorful language I chose. They certainly had a rough
time in the twenties, and that is commonly regarded as a contribiting factor in
the rise of the Nazis.

Is US manufacturing capacity somehow irreversibly lost or would it be possible,
if it was perceived that the need truly arose, to restore a great deal of it?

Of course not, that is what the "getting back to basics and fixing the mess"
part would consist of. Although I think the sort of resource self-sufficiency that we
had in the previous century is gone for good.

[cosmicaug]

11. Relevance.

bemildred wrote:

How would I know, and why is that relevant? You are actually discussing twenty years or so in which great changes occurred in Germany. They certainly had a rough time in the twenties, and that is commonly regarded as a contribiting factor in the rise of the Nazis.

I tend to think that you might be right with regards to the feasibility of perpetual war (or major war) but I cannot help but to question myself and wonder whether this might not be more a matter of wishful thinking on my part than anything else. My point was that though our economy might not be as healthy as it is usually portrayed to be, it is possible that this alone might not absolutely limit our war-making potential (in fact, at the present it is darn good --just not yet good enough to pursue the full PNAC agenda without a military draft).

I mentioned Germany because at one point they definitely did have a "rough time" (probably rather unambiguously so --unlike the U.S. nowadays where mainstream sources will claim everything is doing rather well indeed) and they still managed to be rather troublesome later on (to say the least). I just wonder what would make our situation so fucked as to be unable to pursue a policy of PNAC guided world domination.

bemildred wrote:

Of course not, that is what the "getting back to basics and fixing the mess" part would consist of.

What is it that would necessarily make PNAC guided world domination and "getting back to basics and fixing the mess" mutually exclusive? Is it possible that PNAC guided world domination might, in and of itself, help to fix up the mess (much to the detriment of everyone else, no doubt)? If the successful pursuit of the next war the Chinese guy is concerned about is as dependent on petroleum as some people think WWII was, doesn't the PNAC agenda of taking control of oil production (a good reason for Chinese to need to get ready for a short supply of oil) ensure a great advantage in said war?

Might the old saying about how war is good for the economy actually be true? In fact, the link in NJCher's post in this same thread to http://www.monbiot.com/dsp_article.cfm?article_id=562 is somewhat suggestive that war might be a way out of some economic problems.

As I wrote, I am actually of the opinion that the PNAC plans are doomed to failure when they hits the brick wall of the economic decline which will partly be brought about by their mentality. I am just not at all sure that my opinion matches reality and I am trying to think of ways in which it might not.

[bemildred]

12. Sensible and interesting questions.

It is always wise to remember that we are painting with a
broad brush, although one has little choice as the fundamental
hypothesis that underlies these arguments is that the large
statistical movements matter more than day-to-day rhetoric
and maneuvering.

Perpetual war must be kept under control to be viable. Total
war results in someone or other pounded flat, and nobody left to
fight. Those nations and states that have been in the nature of
armies that adminstered territory have not lasted, they eventually
run out of enemies, or conquer everything in sight and then collapse
internally. There is also the tendency for such regimes to construct
by their pressure an enemy sufficient to stop them.

It also requires true military superiority, in the classic manner
of superior ability to kill without getting killed in return in
ground war. The Mongols for example routinely destroyed opposing
armies without much damage to themselves, this was based on superior
technology and tactics, not just gritting their teeth really hard.
The same can be said of the European colonial conquests. One may
note that when opposed by fellow Europeans, as in the American
Revolution or Boer Wars, the game became much tougher. The Nazis
in WWII assumed a superiority they did not in fact posess and were
pounded flat for their trouble. This is where the PNACers are, and
that is my concern for the USA, although I am not too worried yet.

It is important in this context to understand that defending ones
own territory is a completely different thing from taking and holding
someone elses, the requirements are much more stringent for the
latter. All successful empires have tended to leave the conquerees
alone as long as they paid their taxes, and one often sees them fail
when, over time, the taxes get too onerous and the conquerees rise up
and kick the now decadent conquerors out.

The issue of full mobilization of the USA for total war, as was done
in WWII, is a good one. There are a few things to consider:

1.) One needs a suitable enemy. Al Qaeda will not do, and nobody else
is willing to step up that I can see, why get bombed when one can
wait? A draft must be to some degree voluntary. The rate of refusal
and exile to avoid the draft in VietNam was a major factor in the US
exit from the place and in the current volunteer military. There is
no reason to think it will work now, unless a major and credible
threat to the USA itself is constructed. The size and tenacity of
the anti-war demos before the Iraq War are telling here, the American
polity is deeply divided, and any conduct of major war will require
that that division be healed. One simply cannot compel the necessary
level of commitment at the individual level.

2.) The Corporations would have to be brought to heel. Total
mobilization would have to include them, as increased war production
to support logistics requirements would be essential. It will also
be necessary to treat the productive working class better. We have
another problem already, in that, because of the hollowing out of
our public education systems, we are dependent on foreign brains as
well as foreign money and economic supplies. That is not a lack that
will be remedied in less than a generation.

3.) The sort of totalitarian information control that the Nazis
exercised does not exist, and is essential to full mobilization of
the population absent a real threat. Orwell's "1984" was very
prescient, but it was also hyperbole, a warning.

4.) The various stopgaps that are being employed to get around these
issues (private armies and foreign nationals) do not appear to me
sufficient to do the job, and are expensive.

---

We have an excellent capacity to bomb the crap out of things. That
is not enough, and in a real war we will get chewed up and spit out
in short order. It is no accident that we were stymied in Korea and
were kicked out of VietNam, and that we have mostly stuck to puny
opponents otherwise, Iraq is a perfect example, and it is notable that
we have no future there. If one must spend 100 cheap missiles to
take out one expensive and hard to manufacture aircraft or ship, one
still has a workable deal, militarily speaking.

The US depends heavily on brittle and expensive hi-tech systems to
maintain it's "edge", they cannot be replaced quickly or easily. The
endemic shortages of JDAMs, a relatively simple system, are indicative
of the overall problems, as are the shortages of things like treads
in Iraq. In a war between properly equipped militaries, systems like
tanks and helicopters are sitting ducks. It is not clear to me how
well the high-tech fighter-bomber aircraft will hold up against the
best SAMs, or against each other, the issue has not really been put to
the test for a long time.

All wars of more than a few weeks of month duration are won or lost
logistically.

---

I think, and it is merely my opinion, that oil is intended more as
an economic lever in the PNAC agenda than as war material. We are
still self-sufficient there I believe, at the cost of domestic
consumption for running SUVs and such.

PNAC is a faith-based political theory. We are not actually in a
position to compel an unwilling World to obey. One need merely
observe the situation in Iraq.

"War is good for the economy." Hmm. I suppose that depends on what
you think is good.

---

So I'm tired. Just some ideas to consider here.
:hi:

[many a good man]

15. Total War is out of the question

Wars are too expensive nowadays! They must be short, therefore only fought against much weaker foes. Iraq has shown that we do not have the resources to consolidate victory there, much less expand conflict into Iran and Syria.

My point above was that Europe could defeat the US economically, without firing a single shot. Europe and Asia have our balls in a vise. Tightening would inflict mutually assured destruction, but only economically. They would be in a better position to recover than we.

A depression in the US could lead to a left wing revolt here, like the '30s, or to fascism. The current climate here makes fascism the much more likely outcome. There is no "left" left in this country. Democrats today are considered center-right in places like Europe. Fear of terrorism grips the nation. I think the mainstream media has an adequate grip over public opinion, enough to bend it to the will of its corporate masters in a time of national emergency. Another cheap foreign adventure for propaganda purposes is about all we could muster.

America's global economic dominance has been on the wane for 30 years now. Hegemony over the world's last remaining oil and gas resources may prolong its dominant position. However, that strategy threatens the mutual interdependence that characterizes the present international economic system.

Instead of aggression, we could emphasize this interdependency to ameliorate tensions. A long slow road to recovery would be possible, but we'd have to accept an even lower level of international prestige. Domestically, it would require a much more equitable distribution of wealth to avoid massive social suffering and upheaval. I believe the next national election will indicate which direction we will take.

Brief thought on Europe: NATO, while no longer ostensibly necessary given its original stated purpose of defending against the Soviet Union, is kept alive as a tool for maintaining US influence in Europe. In a way its a good thing because it emphasizes our common interests. The wars in Kosovo and Bosnia were used to strengthen our transatlantic relationship. If a Democrat wins in 2004, you can expect a minor conflict in some outlying part of southeastern Europe to help rebuild our alliance. Of course, there's little chance of that if Bush* remains in power.

[bemildred]

16. I do not disagree with anything you say, although ...

I am not convinced that Fascism would be easily installed here,
much beyond the fairly low-key sort of crap we put up with now.
The American population is really well armed and has a combative
streak, at least a good part of it, and many of those people
really hate Washington DC and the Feds. It is not at all clear
that a unified military establishment would obey orders in those
circumstances either, they take an oath to do otherwise, and most
of them take the oath seriously.

It's not that I'm pooh-poohing the idea, but I have doubts that
it would be a slam dunk. The US also does not have anything like
the scale of police organization required for a totalitarian regime.
The TSA may or may not be the beginnings of such a thing.

I consider the most likely scenario to be that our creditors will
try to take us down economically, and in an orderly fashion. Let us
hope they succeed.

[bemildred]

13. One other related thing:

One issue in Iraq that gets almost no attention is the
result of wear-and-tear over time. All that equipment is
being worn out running back and forth and flying around and
chasing "Saddam bitter-enders and loyalists". One has to
wonder how the contest between wear and damage, on the one
hand, and repair and refurbishment on the other will play out
over time, and to what degree such concerns lie behind the
sudden desire of the Administration to find an exit soon
(as opposed to the electoral concerns most attribute that
change to). It would not do to have all that fancy stuff fall
apart in public.

[RainDog]

14. Didn't Nazi Germany

get a lot of investment money from American bizzes, to help prop up the govt and strengthen it against the socialists?

Back then, when Hitler's final solution was not expressly "out there" it seems like he was sort of the Saddam/Shah/Pinochet of his day for extremist corporatists here because of their fear of communism, and by extension, socialism.

So couldn't you argue that Hitler was able to attract investment because he was perceived by some as an alternative to communism or socialism?

And, of course, he was also sponsored by the big corporatists in Germany, who made manufacturing deals with American and other bizzes.

I saw a video of Shirer's book, The Rise and Fall of the Third Reich the other day, and it included some of the policital cartoons of the time, which showed Hitler being cheered on by the corporatists.

Not only that, but how much wealth was seized by Jewish people and others who were dehumanized by the Nazis?

As far as America right now...I read that in the first stage of empire, the citizens of the empire benefit from the spoils, and then the empire turns on its own citizens as well, creating an underclass across state barriers.

That seems to be where we are now, with manufacturing jobs initially leaving the nation, and now white collar jobs.

Those manufacturing voters have not made the connection between Bush the corporatist and their own votes.

I don't think that white collar workers are as reflexively anti-govt, and people in computer industries have lots of saavy to get information from the internet...

so the neocon folly could backfire quickly, too. Nothing is decided yet, that's for sure, except that we will have to move from being a society based upon consumption, one way or another, when the jobs do not pay enough to maintain the rates of consumption.

[bemildred]

17. I haven't studied it much, but my impression is

that a fairly large portion of the British ruling class
was convinced right up until the day the bombs started falling
on them that Adolf was not such a bad sort. This was mixed in
with a measure of anti-semitism and anti-communism and so on.
Most of this comes from reading a few Brit authors from that
time (Huxley, Orwell).

The ideal scenario was for Stalin and Hitler to crush one another
and then Britain would get to clean up the results. There were
similar attitudes in the US ruling class, but differences in the
details.

I was toying today with the question as to whether the IT industry
professionals whose jobs are migrating elsewhere would make the
connection to unions and why they were instigated in the first
place. That is, if all these people had unions, it would be
harder to move their jobs?

I expect we will get into these issues in the Todd discussions,
so let's leave it for them.

[bemildred]

10. German industrial capacity was more or less intact at the end

of WWI, and they were never intent in that period on anything but building it
up, so I think the comparison with post-WWI Germany is not apt, I tend
to compare with the British Empire pre-WWI prehaps, but that is still not
apt because of the industrial hollowing out, which really compares better
with the UK post-WWII. So you have a bit of similarity here and a bit there,
and the conclusion that our situation is unique.

[54anickel]

8. Have you checked out the link that Raindog posted over in this

thread? Very interesting.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=4164#4182

[T Roosevelt]

18. Quite a long read

Should make for interesting lunchtime reading tomorrow...

[JNelson6563]

19. I think one entity mistakenly counted out

is Russia. I think they will have a bigger hand in things to come than most think.

Julie

[54anickel]

20. Ah yes, China's "silent" partner.

edit to add link to latest

http://biz.yahoo.com/prnews/040105/nym102_1.html

Russia Looks to a Chinese New Year

[bemildred]

21. I agree. nt