World Politics News   Articles for World Politics Course

It is amazing how many products so few corporations produce.  And most of the time we have no idea who is actually making the products we buy.  Link to original source: http://i.imgur.com/k0pv0.jpg

European markets were completely rattled today, as talk of a Greek departure from the eurozone (or “Grexit” as the newspapers are calling it) increased in intensity.  The apparent collapse of  coalition talks in Greece, the spike in interest rates for Spanish and Italian bonds, and the electoral defeats of the major parties pushing for more austerity all signaled a belief that nothing could save Greece.  It appears as if the exit is only a matter of months.  Whether it unravels the global markets really depends on whether panic can be avoided, and that depends on the emergence of a clear and solid plan to control the contagion of indebtedness.

The Palestinians on a hunger strike in Israeli prisons have agreed to end their strike in return for a change in the terms of their confinement.  Most importantly, the Israelis have agreed to reconsider the policy of indefinite detention.  It is troubling that the Israelis did not definitively promise to end the policy, but we will wait for the final terms of the agreement.

The Washington Post ran an interesting article today about the ways the oil embargo against Iran is being enforced.  Some of the techniques are extraordinary, and the cat and mouse game between Iran and the West is quite incredible.

The election cycle in Europe continues and this time it was Angela Merkel’s party which was rebuffed by voters.  According to the Financial Times:

“Angela Merkel’s centre-right Christian Democratic Union suffered a bruising defeat on Sunday night in the election of a new parliament in North Rhine-Westphalia, Germany’s most populous state, when the centre-left opposition of Social Democrats and Greens won a clear majority.

“The vote for the CDU slumped to just 26 per cent, according to the first exit polls, by far its worst result in the state in the post-war period, and a serious setback for the German chancellor.”

Merkel herself still remains popular, but austerity as a campaign platform is being defeated all throughout Europe.  It also appears as if the effort to create a government in Greece has failed.  So we can expect new elections, and the betting is that the new election will bring an anit-austerity party to power.

Americans tend to regard the Taliban as uncivilized, primarily because of their unorthodox fighting techniques and their rejection of the Western ideas of human rights.  That assumption is a profound mistake and rests upon a very narrow conception of what it means to be civilized.  It is true that most Taliban fighters are illiterate, but most of them can quote thousands of lines of poetry from memory.  For the first time, some of this poetry is being made available to English-speaking audiences.

Protests began in Spain last May, and over 100,000 people protested against the austerity program today.  It is somewhat remarkable that the protests remain as large as they are after a year–the government’s policies have only worsened over the year, and the protests seem to have had little effect.  The Spanish economy is one of the slowest in the EU, and there are few signs of anything picking up.  The economy has clearly gone below stall speed, and it is difficult to see how Spain can pay back its debts.

The Palestinian hunger strike continues, and the US media continues to pay little attention.  The non-violent action is gathering strength in the Occupied Territories and one would think that its scope and persistence would gain more widespread coverage.  The commitment of the protesters is remarkable, but the practice of administrative detention by any government (including the United States government) is indefensible.

One manifestation of popular discontent with traditional politics–the source of the Arab Spring, the Occupy Movement, the protests in Russia and China–is the proliferation of new, smaller political parties.  In Greece we saw the emergence of the Radical Left Coalition (Syriza) and Golden Dawn, a hard right party.  In Germany we have witnessed the emergence of the Pirate Party, which began in Sweden but is now close to becoming a force in German politics.  Angela Merkel’s political position grows increasingly precarious.

The nuclear talks with Iran are scheduled to continue soon, and there appears to be a new mood emerging in Tehran.  Perhaps it represents a split between the Supreme Leader and Ahmadinejad.  Or it could be the result of the pressure of the financial sanctions.  I remain pessimistic about the possible outcome of these discussions, but it does appear as if an imminent attack on Iran is highly unlikely at the time.

There are some unusual correlations in the study of politics, and the Los Angeles Times reports a curious one: the relationship between art prices and income inequality.  The correlation is not surprising, but I did not suspect that it would be so strong.   A team of economists at the Yale School of Management found that a “one percentage point increase in the share of total income earned by the top 0.1% triggers an increase in art prices of about 14 percent.”   The saddest part of this understanding is that the sale of art very rarely employs many people, least of all the artist who is usually dead when the sale is made.

In his “Eighteenth Brumaire of Louis Bonaparte,” Karl Marx observed that Hegel pointed out that history repeats itself.  Marx developed the point further: history does repeat itself, but “the first time as tragedy, the second time as farce.”  Marx certainly was on target describing the behavior of big banks in the US.  One would think that the near-collapse of the world financial system (and the demise of two major banks, Lehman Brothers and Bear Stearns) in 2008 would make big banks less likely to take risks.  Today, however, we learned that JP Morgan lost nearly $2 billion on trades that were extremely risky.  Let’s hope that these losses do not trigger a chain reaction in world markets.

The Great Recession precipitated by the financial crisis of 2007-08 has many immediate causes, but the most important underlying cause is the income inequality that has been increasing since the 1970s.  Declining relative incomes forced many to increase their indebtedness, and the low cost of money forced the moneylenders (banks) to find riskier investments to maintain their profit levels.  We are just beginning to comprehend how serious this underlying problem is, and solutions are not obvious.  But as governments continue to increase their austerity programs, the underlying problem of income inequality is only going to get worse.

The UN monitors in Syria have themselves come under attack.  The fighting seems to have abated somewhat, but many suspect that the opposition to Assad is running out of weaponry.  That situation will not persist as there are many states who are willing to give them weapons (as Assad is not short of suppliers such as Iran and Russia).  The UN will have to figure out to respond to this attack or risk losing legitimacy in the eyes of many.

China has started drilling near the Paracel Islands in the South China Sea.  This territory is highly disputed and the move is sure to elicit a response by Vietnam and Taiwan.  There have been limited naval battles in the region before, but the actual act of drilling is a clear claim to territory.  If that claim is not disputed, then China will be the owner of that territory.

The Radical Left Coalition in the Greek Parliament has three days to form a coalition government since the two leading vote-getting parties (New Democracy and PASOK) were unable to do so within their allotted three days.  Here is the five point program around which Syriza wishes to form a coalition:

* The immediate cancellation of all impending measures that will impoverish Greeks further, such as cuts to pensions and salaries.

* The immediate cancellation of all impending measures that undermine fundamental workers’ rights, such as the abolition of collective labor agreements.

* The immediate abolition of a law granting MPs immunity from prosecution, reform of the electoral law and a general overhaul of the political system.

* An investigation into Greek banks, and the immediate publication of the audit performed on the Greek banking sector by BlackRock.

* The setting up of an international auditing committee to investigate the causes of Greece’s public deficit, with a moratorium on all debt servicing until the findings of the audit are published.

If successful, the acceptance of thee conditions would mean the end of bail-out money from the Eu and the IMF.  Subsequently, Greece would leave the Eurozone.

A dramatic shift in Israeli politics has taken place as Prime Minister Netanyahu has invited the more moderate Kadima party into his coalition.  The move allows Netanyahu’s government to survive for a longer period of time (without the change, an election would have taken place in September).  But Kadima will likely ease some of the pressure for hard-line policies in the West Bank and against Iran.  There has been little reaction from Washington as of now.

Barely a day after the French and Greek elections, Germany rejected any ideas of renegotiating the fiscal pact governing budget deficits in the EU.  Angela Merkel has signaled her seriousness about austerity, but the cost to the EU could be great.  The only possible interpretation to the elections was that the publics involved believe that austerity is not the right path.  We’ll have to see whether Germany’s position is open to interpretation or some degree of flexibility.

Violence in Egypt is affecting the outcome of the upcoming elections, with voters seemingly more willing to support the military in the face of continues unrest.  The elections are still far off, so it’s impossible to predict the final outcome.  But the Islamist parties are becoming increasingly unpopular.

Vladimir Putin became Russian President for the third time as protests against his election continue.  His position is weaker than in his previous terms, but he seems quite willing to enforce his rule ruthlessly.  If oil prices continue to weaken in the face of the economic slowdown in the world, his positions may become even more precarious. however.

The European election results are in.  In France, the Socialist candidate, Hollande, defeated the incumbent Sarkozy.  Sarkozy’s defeat is not unexpected–any sitting President facing the economic choices France faces would have a hard time winning.  President Hollande will have a very difficult time establishing the necessary relationship with Chancellor Merkel of Germany.  There will be rough times for the EU.  In Greece, the results were inconclusive suggesting that another election will have to be held in a few months.  Not surprisingly, the conservative New Democracy part, led by Antonis Samaras, won the largest share of the votes.  But the Socialist left party, PASOK, ended up in third place, edged out by the Radical Left Coalition (Syriza).  Most depressing, Golden Dawn, the far right party, got enough votes to enter Parliament for the first time.  The EU, the ECB, and the IMF will have a hard time figuring out how to deal with the new government.