The economist, Edmund Saez, has been a pioneer in the field of refining statistics on income inequality in the United States. He has just updated his statistics with Internal Revenue Statistics from 2012 and his conclusions are that income inequality is getting worse. The vast majority of income growth since 2009 has been captured by the top 1% of the income earners. The statistics are rather stunning. The issue of underconsumption keeps getting more urgent in the global economy.
Many countries have detained prisoners without identifying who they were or providing access to legal counsel. But the recent memos institutionalizing this behavior in the US came as a shock to many, largely because of the long history of legal protections in the US. Now it appears that another democratic country, Israel, is engaged in similar activities. The erosion of human rights in liberal democratic states is a very worrisome trend.
This post has absolutely nothing to do with world politics, but it is an incredible story of a French driver whose car sped up beyond his control (to 125 mph) and how he survived driving it until the car ran out of gas. I don’t think I will ever buy a Renault.
North Korea has apparently conducted its third nuclear test. It claims that it has developed a smaller version of a nuclear bomb, one that can be placed on a missile warhead, a capability that raises great anxiety among most nations in the world. There are already severe sanctions on North Korea, so it’s not clear what additional measures could be applied to persuade the government to slow down its weapons capabilities. The Chinese, the lone supporter of the regime, has announced its strong opposition to the test, but it remains to be seen whether China will exert any greater pressure.
The G-20, the group of 20 countries that comprise the lion’s share of the world’s wealth, is meeting in Moscow next week, and the major concern of the group is the looming prospect of a currency war. It singled out Japan as a country that has initiated this worrying process. The Japanese has in fact devalued their currency substantially and its stock market has responded very positively to that move. But it is not a remedy that can be applied globally.
China has increased its naval presence in the Indian Ocean by building a port in the Pakistani city of Gwadar. Indeed, China is building a series of ports that some have dubbed the “string of pearls” in an apparent reference to their strategic effect of encircling India. The Indians are very concerned about this capability, but Chinese naval power is not yet strong enough to pose a serious threat to Indian interests in the Indian Ocean.
When many survey the global economy, some point to the success of the Scandinavian countries as a model to emulate. These countries, however, have evolved over time, and do not conform to some of the stereotypes typically applied to them. The Economist published an essay with a fairly accurate assessment of how their current economic and social policies are being implemented.
The global balance of power is shifting dramatically–perhaps the most significant shift since the end of World War I. How likely is such a shift in historical terms? More precisely, how likely was the shift that we are currently undergoing? Such questions are impossible to answer, but that does not mean that the questions are not worth asking.
There is an emerging “currency war” in the global economy. We have feared this development since the slowdown in various economies in 2008-09. Different nations have tried various strategies to stimulate their economies, and most of their efforts have failed. One sure-fire way to stimulate exports is to devalue one’s currency: as the value of the currency declines, a state’s exports become cheaper and global demand for those exports will pick up, stimulating the economy. The problem with this strategy is that other states will then try the same thing, and everyone ends up with a weaker currency and the demand for exports will then settle down at the stagnant level. Japan is furiously trying to devalue its currency (the Yen has declined by 20% in the last few weeks) and today Venezuela announced that it will devalue its currency. The last time we saw a global currency war was during the Great Depression, and the consequences of the war was a significantly weakened global economy.
The Irish response to the financial crisis was to accept harsh austerity programs with very little dissent. Other countries, like Italy, Spain, and Greece, have witnessed large protests. It now appears, however, that Irish patience is wearing thin. Large protests have occurred and the Irish people are demanding a return to economic stimulus. Whether the government has the will to follow this path remains to be seen.
The drone controversy continues, and the debate outside of the US is quite one-sided (I imagine that will change as other nations develop their own drone technology). The British press has been particularly harsh on the Obama Administration’s policy. The Guardian, a solid lefty newspaper, published an op-ed piece on the policy from the perspective of the laws of war.
The Energy Information Agency has published a very comprehensive review of the strategic and economic significance of the South China Sea. It is a superb overview of the issues affecting the area. Given that the likelihood of conflict in the region is very high, the information is useful to understand the stakes involved.
Protests in Tunisia are continuing after the assassination of Chokri Belaid, an opposition leader. Many blame the Islamist-led government for the killing, an accusation that is adamantly denied by the government. The Arab Spring began in Tunisia two years ago, but it has unfolded very unevenly since then. Renewed protests in Tunisia and Egypt threaten to unsettle the process toward greater stability in the Arab world.
There has been a steady drumbeat in American society about whether the high unemployment rate among recent college graduates is due to the fact that colleges are not teaching the necessary employment skills. This argument is scurrilous and insidious. College majors have not changed very much in the 37 years I have been teaching, and for most of those years students have not had a difficult time finding jobs. What has changed is the desire of employers to actually hire. The Atlantic gives a very graphic demonstration of the change.
The release of the drone report justifying the use of drones in war has generated an incredible conversation. Jeffrey Rosen in the New Republic has written a powerful essay arguing that the use of drones in a manner consistent with the memo is clearly unconstitutional.
Max Boot, a noted neoconservative, has written an article in Foreign Affairs on irregular warfare. The purpose of the essay is to place guerrilla war in the more normal context of war as traditionally understood. Most analysts don’t make the distinction, but the lack of attention is probably due to lack of rigor. Boot’s is a controversial proposition and as you read the essay you should ask questions about the possible political consequences of such a redefinition.
There is an emerging discussion in the global economy about whether economic growth will return any time soon. There are a number of economists who believe that the prospects for economic growth are very limited for the foreseeable future. If true, that possibility has very dramatic political and social consequences. I’ll try to follow up with similar articles in the future.
The Open Society Foundation has published a new report, “Globalizing Torture: CIA Secret Detention and Extraordinary Rendition,” which is the most detailed study of the interrogation program of the US during the Bush Administration. It focused on the process of “extraordinary rendition” which is the euphemism used to describe the program of kidnapping suspects and torturing them in other countries (54 identified in the report) because the torture would have been illegal on American soil. It is a very sordid story, but the report is the first relatively comprehensive understanding of this long-secret program.
The process of globalization has led to one of the most extraordinary economic booms of human history. The price of this boom, however, is the extraordinary stress we are putting on the global environment. The economist, Jeffrey Sachs, suggests that we are pushing far beyond the safe limits of what the global environment can support.
In 2011 Iran claimed to have shot down an American drone, a top-of-the-line RQ-170. At the time, the US was quite embarrassed but flatly asserted that the Iranians could never decrypt the software in the drone. Today, the Iranians posted to YouTube what they allege is the video from the drone. If the video is genuine, then the Iranians have proven that they are adept at cracking the US software. Here is the video–the comments section is interesting.
Japan has accused China of turning on it weapons radar on a Japanese ship near the disputed islands of Diaoyu/Senkaku. Such a move is highly provocative since it leaves the targeted ship with few options: sit idly or initiate self-defense procedures. The last thing states should want is for its sailors to have to make spit second decisions in a volatile political atmosphere. The Chinese have not responded to the charges at the time of this posting.
NBC News has published a leaked document that establishes the legal authority of an American President to authorize the killing of American citizens with drone attacks. It is a remarkable brief that justifies the execution of an American citizen without the normal due process of law. One should decide whether the circumstances are sufficiently unique to justify the clear constitutional provisions for due process.
The US Justice Department has signaled its intention to prosecute Standard & Poor’s, a credit rating agency, for publishing misleading assessments of the creditworthiness of various stocks issued by investment banks and others in the credit crisis of 2007-08. The ratings agencies have long held that their ratings were “opinions” and therefore protected by the First Amendment. Many feel, however, that the rating agencies were in fact making a judgment in their ratings that constituted more than simple “opinions.” We’ll see how the process plays out–it will be a long one (after all, it has taken 5 years for even this step to be taken).
Political violence is escalating in Greece, as the economic situation in Greece continues to deteriorate. The violence is occurring at both ends of the political spectrum, but it is well-organized by the far-right party, Golden Dawn. The organization of the right wing is reminiscent of the rise of fascism in the 1920s and 30s in Europe, and the sources of the violence–economic stagnation–are pretty much the same. Let’s hope the outcome is not the same.
The Obama Administration has given itself the legal authority to launch pre-emptive cyberattacks on another country or entity if it believes that it might be the victim of such an attack. Similar authority was granted in the case of nuclear war in the 1950s, and the basis for the authority is the Commander-in-Chief status of the President. It’s not clear what provoked the new authority, but comparing cyberattacks to nuclear attacks is a bit far-fetched.
The balance of power in Asia has shifted dramatically in recent years, but the difficulty in using the balance of power is that there is no way to determine the “proper” balance. Every state actually wants an imbalance in its favor. But analysts need to override this selfish interest and determine want the most stable balance might be–a very difficult task.
The Israelis have taken responsibility for the air strike in Syria. The admission is unusual for the Israelis since they try to keep a very low profile in military and intelligence matters. The openness is clearly a signal to the Iranians, essentially telling them that similar strikes could be made against Iranian territory as well. We have also found out that the strike was not simply against an arms convoy, but also targeted a military research center. The stakes for the strike are getting higher.
The North Koreans are dropping broader hints that their third nuclear test is imminent. The increased rhetoric is in response to the new set of UN sanctions against the North Korean regime. The report details the facilities at which the tests are being developed–the intelligence community is obviously keeping a very close eye on everything going on in North Korea. What is not clear, however, is how the international community would respond to the test–the Chinese still seem to be very committed to propping up the regime in Pyongyang.
The US is trying to restart negotiations with the Afghan Taliban as the date for the 2014 withdrawal of American troops grows nearer. The US does not wish to be perceived as leaving the Afghan government in the lurch, and negotiations would be a face-saving way to demonstrate a commitment to a stable situation in Afghanistan. The intentions of the US are hardly noble, but one cannot help but wish that the negotiations will take place. The Afghan people have clearly suffered for a very long time and they deserve a better future.
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