USA And The Future Of The World

[acharya]

Quotes of the Day »
<b>
"If they love me more than God, then they have to kill me."
FATHIMA RIFQA BARY, a 17-year-old girl from Ohio who fled to Florida because, she says, her father threatened to murder her in an "honor killing" for converting from Islam to Christianity</b>

http://www.time.com/time/quotes

[Guest]

Get ready for hyper inflation.

[acharya]

Officials see rise in militia groups across U.S.

[acharya]

Segodnya, Russia

<b>The U.S. Is Willing to Pay for Russia’s Collapse</b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--> <b>
- In 2008, the U.S. State Department established a special Digital Outreach Team, headed by James Glassman, the Undersecretary for Public Diplomacy and Public Affairs. This team's objective is to spread a "war of ideas" on popular websites, blogs and chat rooms or websites frequently visited by Russians. </b>The team established by Glassman includes representatives from the State Department, the U.S. Agency for International Development, the Department of Defense and the United States Intelligence Community.<!--QuoteEnd--><!--QuoteEEnd-->

[Guest]

Doomsday -- pros and cons

Two major entrepreneurial tycoons, in the multibillion-dollar league, with worldwide interests, speaking not for attribution, agree that the worst is yet to come. America has to reinvent itself for the 21st century, but this won't happen before another big credit-rattling shock. Millions of jobs are not coming back, they said.

They were speaking about the current global financial and economic crisis. Another humongous credit crunch is on the way, they believe, and the current optimism is simply a pause before another major downward slide. Unemployment, they forecast, will climb from the low to the high teens. A pledge to limit tax increases to those making more than $250,000 a year is a pipe dream. Someone has to pay the health piper. Major social dislocations are on their horizon for 2010.

One of the interlocutors has shunned all manner of stocks in favor of discounted corporate bonds that yield 7 1/2 percent, and gold. The other has already moved all his financial holdings into a cocktail of Asian currencies based at a new entity he created in Singapore.

"We are roughly where Britain was in 1968," said one. That year Prime Minister Harold Wilson decided to abandon all of Great Britain's obligations east of Suez. That included the entire Persian Gulf, from Oman to Kuwait, the Strait of Hormuz, British special agents in all the emirates and sheikhdoms, local constabularies with British officers, the fabled Trucial Oman Scouts (TOS) -- all for the bargain basement cost of $40 million a year.

As the British and other colonial empires faded into history, America's global empire grew topsy-turvy and since the collapse of the Soviet empire in 1989, its power grew unchallenged. The two tycoons, who did not wish to be quoted, agreed with a rapidly growing segment of the U.S. population that says America can no longer afford the astronomic costs of empire.

With more than 2.5 million U.S. military personnel serving across the planet and 737 military bases spread across each continent, and 3,800 installations in the United States, a reassessment of roles and missions is long overdue. The estimated $1 trillion in overdue infrastructure repairs and modernization strikes many as an overdue priority.

The 2010 defense budget is a shade shy of $700 billion, more than two-thirds of a trillion dollars, which now tops the rest of the world -- including major players Britain, France, Germany, Japan, Russia, China, India -- put together. Add all the defense expenditures neatly tucked into the budgets for Energy, State, Treasury, Veterans Affairs, and 16 intelligence agencies, and the numbers top $1 trillion.

With only 5 percent of the world's population, it is still remarkable that the United States can maintain global military superiority on less than 5 percent of gross domestic product. But from the world's biggest creditor, the United States has become the world's largest debtor, coupled with a rapid decline of a manufacturing sector once hailed as the arsenal of democracy and an annual per capita trade deficit of $2,000 per citizen.

U.S. share of global output continues to decline from year to year. Like General Motors Corp. and Ford, the United States has yielded share of the global market from one-third at the turn of the new century to one-quarter today. Was the rise of the rest the decline of the West?

Have U.S. commitments and responsibilities outstripped resources? The two anonymous billionaire voices were among the many now saying so in public opinion polls. They feel a paradigm shift is inevitable. We are yet to wean ourselves from the old paradigm: the $3 billion we borrow each and every day -- principally from China -- to maintain the world's highest standard of living, based on conspicuous consumption, at a time of growing world shortages. And when we are finally weaned, it will become glaringly obvious that we were living way beyond our means and that major belt-tightening is long overdue.

In his projections through 2025, Thomas Fingar, the former chief analyst for the 100,000-strong U.S. intelligence network, which includes 16 agencies with a budget of $50 billion, predicted the international system would be transformed over the next 15 years as dramatically as it was after World War II. As China rises to global prominence, the United States would be declining. "In terms of size, speed and directional flow," wrote Mr. Fingar, "the transfer of global wealth and economic power now under way -- from West to East -- is without precedent in modern history."

Following Mr. Fingar's analysis, former deputy Treasury Secretary Robert Altman wrote in Foreign Affairs, the official organ of the Council on Foreign Relations, that the current financial crisis is "a major geopolitical setback for the U.S. and Europe" that could only accelerate trends that are moving the global center of gravity to China. And this is something that a staggering $1 trillion for defense (in a budget with a projected $2 trillion federal deficit) would be powerless to reverse.

The pessimistic outlook should, of course, be tempered by the fact that IBM spins off more technology patents in a typical year than all of China. Three-quarters of the world's top universities are in America. So any loss of influence is at this stage attributable to reckless profligacy at every level of American society, beginning with the federal government and the mind-numbing bonuses that Wall Street's "Masters of the Universe," as Tom Wolfe called them in his 1987 best-seller "Bonfire of the Vanities," have lavished on themselves Roman Empire-style.

Both global entrepreneurs mentioned at the beginning of this column believe Israel will resolve its existential crisis by bombing Iran's key nuclear facilities later this year. One thought Gulf Arabs would be secretly delighted and that Iran's much vaunted asymmetrical retaliatory capabilities would fizzle as the theocracy imploded. The other could see mayhem up and down the Gulf, the Strait of Hormuz closed, and oil at $300 per barrel.

[acharya]

Rytha - can you send me an email

[acharya]

Other stuff birthers believe - the Chronicle op-ed page

The problem with getting massive coverage of your signature whack-job conspiracy theory is that your lesser whack-job conspiracy theories fall through the cracks.

By now everyone knows of the birthers' opinions about the president's birthplace, but their revelation about the government's secret cemetery in Arizona with 30,000 fresh graves? Sadly unheeded.

Esquire political columnist John H. Richardson accompanied the birthers ("the nicest people you could imagine") when they marched into the Kentucky attorney general's office to demand that the state of Kentucky do something about Obama's birth certificate.

Orly Taitz: Plots everywhere

Orly Taitz: Plots everywhere

When Kentucky declined on the grounds that it is Kentucky, the queen of the birthers, Orly Taitz, rattled off several other claims:

"Goldman Sachs runs the treasury."

Well, according to the New York Times, then-Treasury Secretary Hank Paulson WAS speed-dialing Goldman's chief right before the government handed AIG $85 billion to pay off Goldman and other banks.

"There's a cemetery somewhere in Arizona where they just dug 30,000 fresh graves, which wait now for the revolution."

On the other hand, there are a lot of really old people in Arizona.

"Baxter International - a major Obama contributor - developed a vaccine for bird flu that actually kills people."

You've got to expect some side effects.

"The communist dictator Hugo Chavez way back in 2004 purchased the Sequoia software that runs our voting machines and the mainstream media won't report any of it - not even Fox because Saudi Arabia bought a percentage of Fox in 2007."

Jack Bauer - huge in Riyahd. Huge.

"Google an article in the San Francisco Chronicle about train cars with shackles."

Wait, what? The birthers are referencing The Chronicle to support their world view?!

Now that is a revelation.

The article is actually a Feb. 4, 2008, op-ed piece by Lewis Seiler and ex-Congressman Dan Hamburg of Voice of the Environment assailing the federal government's expanded powers in the wake of Sept. 11:

"Beginning in 1999, the government has entered into a series of single-bid contracts with Halliburton subsidiary Kellogg, Brown and Root (KBR) to build detention camps at undisclosed locations within the United States. The government has also contracted with several companies to build thousands of railcars, some reportedly equipped with shackles, ostensibly to transport detainees.

Read more: http://www.sfgate.com/cgi-bin/blogs/stew/d...9#ixzz0OHHMXhPO

[acharya]

Ziare, Romania
The American Dream: Just a Myth Demolished by the Crisis
By Ana Ilie

[acharya]

Kommersant, Russia
M <b>The White House Talks on the Phone with Russia and Georgia</b>
By Nargiz Asa

[acharya]

Le Figaro, France
<b>The Reassuring Cynicism of Goldman Sachs</b>
By Yves de Kerdrel

[Guest]

http://www.usdebtclock.org/
<b>US debt clock</b>

[acharya]

http://www.foreignaffairs.com/articles/652...angle?page=show


Home
Foreign Affairs

The Unbalanced Triangle
What Chinese-Russian Relations Mean for the United States
Stephen Kotkin
September/October 2009
Article Summary

The Chinese-Russian relationship is more opportunistic than strategic, Bobo Lo argues. The United States is stuck watching from the sidelines and may be pushing Moscow further into Beijing's pocket.

STEPHEN KOTKIN is Professor of History and International Affairs at Princeton University. His latest book is Uncivil Society: 1989 and the Implosion of the Communist Establishment, which includes a contribution by Jan Gross

Bobo Lo, a former Australian diplomat in Moscow and the director of the China and Russia programs at the Center for European Reform, in London, has written the best analysis yet of one of the world's more important bilateral relationships. His close examination of Chinese-Russian relations -- sometimes mischaracterized by both countries as a "strategic partnership" -- lays bare the full force of China's global strategy, the conundrum of Russia's place in today's world, and fundamental shortcomings in U.S. foreign policy.

China's shift in strategic orientation from the Soviet Union to the United States is the most important geopolitical realignment of the last several decades. And Beijing now enjoys not only excellent relations with Washington but also better relations with Moscow than does Washington. Lo calls the Chinese-Russian relationship a "mutually beneficial partnership" and goes so far as to deem Moscow's improved ties with Beijing "the greatest Russian foreign policy achievement of the post-Soviet period."

Precisely such hyperbole drives the alarmism of many pundits, who believe that the United States faces a challenge from a Chinese-Russian alliance built on shared illiberal values. But as Lo himself argues, the twaddle about Russia being an energy superpower was dubious even before the price of oil fell by nearly $100 in 2008. Even more important, Lo points out that the Chinese-Russian relationship is imbalanced and fraught: the two countries harbor significant cultural prejudices about each other and have divergent interests that are likely to diverge even more in the future. More accurately, the Chinese-Russian relationship is, as Lo puts it, an "axis of convenience" -- that is, an inherently limited partnership conditioned on its ability to advance both parties' interests.

But even Lo does not go far enough in his debunking of the Chinese-Russian alliance: he argues that it "is, for all its faults, one of the more convincing examples of positive-sum international relations today." This is doubtful. The relationship may allow the Chinese to extract strategically important natural resources from Russia and extend their regional influence, but it affords the Russians little more than the pretense of a multipolar world in which Moscow enjoys a central role.

STRATEGIC MISTRUST

The year 2006 was the Year of Russia in China, and 2007, the Year of China in Russia, with both states hosting a slew of exhibits, cultural programs, trade talks, and state visits. At the opening ceremony in Moscow in March 2007, Chinese President Hu Jintao remarked, "The Chinese National Exhibition in Russia is the largest-ever overseas display of Chinese culture and economic development." (It is worth noting that every year could be called the Year of China in the United States and that the U.S. consumer market is essentially one endless Chinese National Exhibition.)

By showcasing in Moscow 15,000 Chinese products from 30 industries -- machinery, aviation, ship building, information technology, home appliances -- Beijing sent the message that regardless of the substantial role the Soviet Union played in China's post-1949 industrialization, there is now a new ascendancy, with China enjoying the dominant position. This, in fact, is a return to the historical paradigm -- China has generally set the agenda for relations between the two countries. The Chinese-Russian relationship dates from the Russian conquest of Siberia in the seventeenth century. The Russian empire, then not very rich, sought to trade with China, then the world's wealthiest country. The two empires also discovered a common but often rivalrous interest in crushing the Central Asian nomads, leaving China and Russia with a 2,700-mile border, the world's longest. Since then, this shared border has shifted numerous times and served as a source of intermittent tension. As recently as 1969, the two countries clashed along the Ussuri River, which separates northeastern China from the Russian Far East, and Soviet leaders discussed retaliating with nuclear weapons if China launched a mass assault.

Now, as Lo writes, their relations are, in many ways, better than ever. In June 2005, both sides ratified a treaty settling their border disputes. Cross-border business and tourism are brisk. In 2006, two million Russian tourists went to China and nearly one million Chinese visited Russia.

Still, as Lo subtly demonstrates, the Chinese-Russian "axis of convenience" is bedeviled by "pervasive mistrust" rooted in historical grievances, geopolitical competition, and structural factors. Moreover, it is a secondary axis. China and Russia talk about being strategic partners, but neither actually is central to the other's concerns. China's indispensable partner is the United States; Russia's is Europe or, more specifically, Germany. In 2007, Chinese-Russian trade reached $48 billion, up from $5.7 billion in 1999, making China Russia's second-largest trading partner after the European Union. But current Russian-EU trade exceeds $250 billion -- the lion's share of it being between Russia and Germany -- and Chinese-U.S. trade exceeds $400 billion. China and Russia, Lo demonstrates, "pay far more attention to the West than they do to each other." Their relationship is opportunistic. As Lo puts it, the two giants "share neither a long-term vision of the world nor a common understanding of their respective places in it."

In addition -- and this is the most important aspect of Lo's argument -- whatever opportunity does exist in the relationship, China is in a better position to exploit it. China extracts considerable practical benefits in oil and weapons from Russia. In return, Beijing flatters Moscow with rhetoric about their "strategic partnership" and coddles it by promoting the illusion of a multipolar world. In many ways, the Chinese-Russian relationship today resembles that which first emerged in the seventeenth century: a rivalry for influence in Central Asia alongside attempts to expand bilateral commercial ties, with China in the catbird seat. Lo politely calls this incongruity an "asymmetry."

GIVING AWAY THE STORE

The profound asymmetry in Chinese-Russian relations is most visibly illustrated by the two countries' roles in the Shanghai Cooperation Organization (SCO), a six-member security group founded in 2001, and by their energy and weapons trades.

So far, China has consistently resisted Moscow's lobbying for building the SCO -- whose other members are the former Soviet states of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan -- into a quasi-military alliance that could counter NATO. In addition, the SCO declined to publicly endorse Russia's account of its August 2008 war with Georgia (Moscow claimed that the Georgian army attacked first, an assertion implicitly recognized even by the U.S. ambassador to Russia). China, it seems, is unwilling to impart any strategic significance to disputes in the Caucasus.

Meanwhile, using the SCO and business investments, China has been making economic inroads into Central Asia, a region that Russia has traditionally considered within its sphere of influence. Chinese companies have been on a buying spree in recent years, making investments throughout Central Asia in minerals, energy, and other industries. Beijing appears to have cracked even the difficult nut of Turkmenistan -- a pipeline now under construction is slated to run from the natural gas fields in Turkmenistan to Xinjiang, in western China. To a large extent, it is Russia's single-minded focus on pushing the United States out of Central Asia -- lobbying Kyrgyzstan, for example, to eject U.S. forces from a military base in Bishkek -- that has allowed China's influence there to grow relatively unhindered. And whereas the United States can scarcely hope to maintain a permanent presence in Central Asia, China can be counted on to stick around.

Lo is doubtful about the prospects of a major Chinese-Russian energy deal. But in February 2009, after his book had gone to press, the two governments signed a deal under which Rosneft, the largest Russian state-owned oil company, and Transneft, the Russian state-owned oil-pipeline monopoly, would get $25 billion from the China Development Bank in exchange for supplying China with 300,000 barrels of oil a day from 2011 to 2030 -- or a total of about 2.2 billion barrels. Factoring in the interest payments the Russian companies will owe on the loan, the deal means that China will pay under $20 a barrel -- less than half the global price at the time of the deal and less than one-third the market price for future deliveries in 2017.

This Chinese money is slated to underwrite the completion of an oil pipeline that will run from eastern Siberia to the Pacific Ocean, with an offshoot going to Daqing to serve the Chinese market. The proposed pipeline would increase roughly to eight percent Russia's share of China's oil imports, up from four percent now. Russian energy companies, laden with debt, lack the capital to build the pipeline by themselves or, for that matter, to drill for new hydrocarbons. With a projected capacity of 600,000 barrels per day, the pipeline is expected to supply Japan with Russian oil, too -- provided enough is available. Still, the $20-a-barrel price borders on the shocking. Considering the perhaps more advantageous energy deals that have been on the table with U.S. and European multinationals, Rosneft and Transeft's deal with China looks like a giveaway. It appears to be a consequence of the obsession many Russian officials have with denying the United States a strategic foothold in Russia's energy sector at all costs -- even if one of those costs is opening themselves up to exploitation by the Chinese.

Energy is not even the most fruitful aspect of China's relationship with Russia. According to U.S. estimates, Russia supplies China with 95 percent of its military hardware, including Kilo-class submarines and Sovremenny-class destroyers. So far, Russian officials have not viewed the buildup of the Chinese navy as a direct threat to Russia; instead, they see it as a potential problem for Japan and the United States. Also, the post-Soviet Russian military was long unable to afford weapons produced by domestic manufacturers, making arms exports a necessity. Still, whatever benefits Russia gained by keeping its defense industry alive while waiting for better times, the benefits to China have been beyond compare. After the Tiananmen Square crackdown in 1989, many of the world's largest arms merchants -- France, the United Kingdom, and the United States -- imposed an arms embargo on China. As Russia moved to fill this gap, China began to reverse engineer weapons systems and pressure Russia to sell it not just the finished products but also the underlying manufacturing technology. For reasons that have yet to be explained publicly, Russian arms sales to China have declined in recent years. Nonetheless, China has the money and remains an eager customer for Russia's blueprints.

According to Lo, the terms of Chinese-Russian trade "are becoming more unbalanced every year" -- so much so that he compares the role of Russia for China to that of Angola, China's largest trading partner in Africa. Russia will remain important as long as the weapons and fossil fuels keep flowing (and no economically viable alternatives to hydrocarbons emerge). Lo does not say so explicitly, but in an imagined multipolar world, Russia looks like a Chinese subsidiary. China treats Russia with supreme tact, vehemently denying its own superiority -- a studious humility that only helps it maintain the upper hand.

WHAT KIND OF PARTNER?

Lo quotes Yuri Fedorov, a Russian political analyst, who laments that Russia is "doomed to be a junior partner to everyone." In fact, it is China that has accepted the role of junior partner to the United States, and the payoff has been impressive. It is a calculated position and part of China's global strategy sometimes known as "peaceful rise," a term first introduced by the Chinese leadership soon after the Tiananmen massacre. One vital element of this strategy is for China to take advantage of its de facto strategic partnership with the United States while sometimes swallowing hard in the face of U.S. dominance. China guards its sovereignty no less than does Russia, but, as Lo writes, China, contrary to Russia, "does not deem it necessary to contest Western [i.e., American] interests and influence wherever it finds them." Nor does China view Russia as a strategic counterweight to the United States -- whereas Russia hopes to use China to balance against the United States. Chinese leaders go out of their way to emphasize that China is still a developing country and that the United States will remain the sole global superpower for a long time to come. It is a concession that leaves them ample room to pursue China's interests, and so they see little point in paying the enormous costs of opposing the United States.

The second main element in China's "peaceful rise" strategy is using Russia for all it is worth -- weapons, oil, or acquiescence in China's expanding influence in Central Asia. Under Vladimir Putin, Russia became more practical in its relations with China than it had been under Boris Yeltsin, in the 1990s. Moscow has made sure to trade its support for China's intransigent policies toward Taiwan, Tibet, and Xinjiang for Beijing's endorsement of Russia's heavy-handed approach to combating domestic instability in Chechnya and the North Caucasus. But the deal remains uneven. Moscow's closer ties with Beijing, meanwhile, have not increased its leverage with Washington one iota. By rejecting the role of junior partner to the United States, Russia has, perhaps unintentionally, become China's junior partner -- an arrangement, furthermore, that will last only as long as it is convenient for Beijing. Lo concludes, "China's rise as the next global superpower threatens Russia, not with the military or demographic invasion many fear, but with progressive displacement to the periphery of international decision making."

One should not forget China's many vulnerabilities, nor Russia's numerous foreign policy achievements over the last decade. After the abject humiliation of the 1990s, the sovereignty of the Russian state has been restored -- no longer can foreign capitals dictate Russian policy or the appointments of government officials. Russia's annual GDP has soared from a low of $200 billion under Yeltsin to around $1.6 trillion today (a turnabout in which China's insatiable demand for global commodities and manufactures has played an enormous role). Russia enjoys strong relations with France, Germany, and Italy and cultivates these bilateral ties in Europe in order to blunt the collective power of the EU. Its European partners compete with one another for Moscow's favor. At the same time, Russia has -- from its point of view at least -- demonstrated anew its influence in the former Soviet republics.

But despite its revival, Russia, in contrast to China, remains unable to figure out how to benefit from the immovable fact of U.S. power and wealth. Under the Obama administration, the United States has stopped -- for the time being -- approaching Russia as a state to be reformed or disciplined. But a softening in tone cannot make up for the fact that the U.S.-Russian relationship lacks the kind of deep commercial basis that undergirds U.S.-Chinese ties. Although an interest in both Russia and the United States in renewed arms control negotiations may help restart bilateral relations, such gestures are no substitute for the kind of economic interdependence Washington has with Beijing.

The ultimate stumbling block between Russia and the United States -- and what differentiates China from Russia from the United States' perspective -- is the clash over influence in the former Soviet republics. Two factors have led to this clash. The first is that Moscow has lost its empire yet will not relinquish its assertion of "privileged interests" in Georgia, Ukraine, and the other former Soviet republics. Russia's influence in the former Soviet territories -- which remained strong even during Russia's perceived weakness in the 1990s -- has only grown. This reality, moreover, is an outgrowth not of military occupation or of Russia's clumsy bullying but of mutual interests forged through economic ties.

The second factor is that the United States will not cease to view these lands in terms of promoting or defending democracy, even under the Obama administration's more pragmatic foreign policy. Compare, for example, the relatively small role Tibet plays in U.S.-Chinese relations with the disproportionate hold that now-independent countries such as Georgia or Ukraine have on U.S.-Russian relations. For Washington to appear to abandon the nominal democracies living in Russia's shadow for the sake of more constructive relations with Russia is politically impossible. No matter how badly those countries misgovern themselves or provoke Russia, a withdrawal of U.S. support would be an abandonment of one of the central tenets of U.S. policy toward the region since the end of the Cold War.

The upshot is that Russia and the United States are left with something of a paradox. Although Washington can refuse to defer to Russia's claim of "privileged interests" in the former Soviet states, it cannot undo the fact that such a Russian sphere of influence does exist, extending to property ownership, business and intelligence ties, television programming, and the Internet. Moscow, meanwhile, cannot hope to both claim its interests in its neighbors and emulate China's approach of accepting the role of junior partner to the United States for practical benefit.

This suggests that "the new geopolitics" Lo promises to illuminate are not so new, after all. As Russia pursues the chimera of a multipolar world, the United States pursues the delusion of nearly limitless NATO expansion. And in the process, both unwittingly conspire to put Russia in China's pocket.

THE TRIANGLE TIPS OVER

Lo's book inspires three broad observations. First, although Russia has been known as the world power that straddles Asia and Europe, today it is China that has emerged as the force to be reckoned with on both continents. Russia's Pacific coast serves not as a gateway to Asia -- as San Francisco and Los Angeles do in the United States -- but as a natural geographic limit. At the same time, China, as the dominant power in East Asia, denies Russia a significant say in the region.

Russia's failure to become an East Asian power over the past several centuries is amplified by emigration from Russia's Far East, where the population has shrunk from a peak of around ten million in the Soviet period to around 6.5 million today. Meanwhile, the population of China's three northeastern provinces directly across the Russian border is estimated at 108 million and growing. As Dmitry Rogozin, now Russia's ambassador to NATO, quipped on Russian radio in 2005, the Chinese are crossing the border "in small groups of five million." Actually, as Lo indicates, the number of Chinese residents in Russia -- mostly laborers and petty traders -- is probably only between 200,000 and 400,000. Yet Rogozin's quote reflects domestic anxieties about Russia's weak footprint in Asia, a problem for which Russia has no discernible strategy. And on Russia's western border, China's relations with Europe are at least good as Russia's. In other words, Russia's bluff of maintaining an influential presence in Asia is becoming an ever more pronounced strategic weakness.

Second, not only has China shifted its strategic alliance from the Soviet Union to the United States; it has learned how to have its cake and eat it, too. China manages to preserve relations with its Cold War patron, Russia, while hitching its growth to the world's current hegemon, the United States. From 1949 until the Sino-Soviet split in the 1960s, China was an eager junior partner to the Soviet Union, slavishly imitating the Stalinist developmental model. In 1972, the courting of Mao Zedong by Richard Nixon and Henry Kissinger opened up a global option for China that Mao's successors would later exploit. Under Deng Xiaoping, who in 1979 became the first Chinese Communist leader to visit the United States, China began to forge its de facto strategic alliance with the United States. Then, under Jiang Zemin, a post-1991 rapprochement with Russia became a major additional instrument for Beijing. It is as if China went to the prom with one partner, Russia, went home with another, the United States, and then married the latter while wooing its jilted original date as a mistress.

Third, although the Soviet Union ultimately capitulated to the United States in the Cold War, Russia today does not feel compelled to similarly bow down to the United States. Such a proud stance may not offer many rewards for Russia, but it does confront the United States with some difficult policy questions. Simply put, if Moscow's fantasy is multipolarity, Washington's own delusion has been the near-limitless expansion of NATO. That game, however, is exhausted. For years, the cogent argument against continued NATO expansion was not that it would anger the Russians -- after the Soviet collapse, the Russians were going to emerge angry regardless. Rather, the problem was that the bigger NATO became, the weaker it got. Poland agreed to install Patriot missile interceptors -- a U.S. and not a NATO missile defense system -- only because the United States provided Poland, a member of NATO, with a security guarantee above and beyond that offered by the NATO charter. What, then, is NATO for? Russia will never join, and for all its historic achievements, NATO is not up to solving the contemporary security dilemmas of Europe, such as those linked to energy, migration, and terrorism.

Russia has recovered from its moment of post-Soviet weakness but nonetheless remains a regional power that acts like a global superpower. China, on the other hand, has been transformed into a global superpower but still mostly acts like a regional power. Meanwhile, the United States is still busy trying to consolidate its triumph in the Cold War 18 years on. Recently, many people in Russia and the United States have begun to speak of a "new Cold War." This idea, however, is doubly wrong -- wrong because Russia, a regional power, cannot hope to mount a global challenge to the United States, and wrong because the old Cold War tilting never went away, with the battleground merely having been downsized, shifting from the whole globe to Kiev and Tbilisi.

There are domestic advantages for the Russian regime in continuing to talk of a new Cold War. But what does a preoccupation with the supposed Russian menace do for the United States? And alternatively, what would the United States gain from resetting U.S.-Russian relations? At the moment, the most important U.S. policy questions are domestic, not foreign, and Russia will be of little help in solving them. Russia has no role to play in reforming the U.S. health-care system -- whose cost structure is the single greatest threat to U.S. power and prosperity -- nor can it help fix the crumbling U.S. retirement system. If the United States were to imitate China and indulge Russia in its fantasy about its own global relevance, it would not realize the same kind of concrete benefits the Chinese get. On the international front, although many in Washington see Moscow as Tehran's main backer -- even though China has deeper commercial ties to Iran -- Russia does not have the leverage over Iran to forestall the development of that country's nuclear weapons program.

The overall importance of Russia for the United States, then, is widely exaggerated. There is one crucial exception, however, an area in which Russia's power has not depreciated: in Europe, Russia remains a dominant force, and its strategic weight in the region is reason alone for the United States to pursue better bilateral relations. During the Crimean War of 1853-56, Lord Palmerston, the British prime minister, fantasized that "the best and most effectual security for the future peace of Europe would be the severance from Russia of some of the frontier territories acquired by her in later times, Georgia, Circassia, the Crimea, Bessarabia, Poland and Finland. . . . She would still remain an enormous power, but far less advantageously posted for aggression on her neighbors." This flight of imagination has since become reality, and then some. But still, Russia remains a regional force. Indulging the claims that Russia's recent revival is solely attributable to oil -- a code word for "luck" -- or that Russia's demographic problems will make the country essentially vanish cannot alter the fact that enduring security in Europe cannot be had without Russia's cooperation or in opposition to Russia. An expanded NATO, meanwhile, is not providing the enduring security it once promised. It is only a matter of time before a crisis, perhaps on the territory of a former Soviet republic and now NATO member, exposes NATO's mutual defense pact as wholly inoperative.

There is another reason the United States should care about Russia: because China does. As Lo writes, "China will become steadily (if cautiously) more assertive, initially in East Asia and Central Asia, but eventually across much of Eurasia." In other words, even under a strategy of a peaceful rise, China will increasingly force the United States to accommodate Chinese power. China's development of a blue-water navy recalls the rise of the German navy in the years before World War I, a process that unnerved the United Kingdom, then the world's great power. It seems that China is already trying to recalibrate the balance of power in East Asia, as evidenced by its harassment of the Impeccable, a U.S. Navy surveillance ship, in the South China Sea in March 2009. In the event of a crisis, China does not want its thoroughly globalized economy to be vulnerable to a blockade by either the Japanese navy or the U.S. Navy, and it likely envisions being able to hinder U.S. access to the Taiwan Strait. Meanwhile, China is counting on the Russian navy's not rising again in East Asia and on continued strained ties between Japan and Russia over the disputed Kuril Islands, a few rocks in the Pacific Ocean.

In the end, there can be no resetting of U.S.-Russian relations without a transcending of NATO and the establishment of a new security architecture in Europe. And without such a genuine reset, China will retain the upper hand, not only in its bilateral relationship with Russia but also in the strategic triangle comprising China, Russia, and the United States.

[acharya]

US, not China, stands at strategic crossroad
Yuan PengChina Daily Updated: 2006-02-08 06:33
http://www.chinadaily.com.cn/english/doc/2...tent_518087.htm

[acharya]

Argenpress, Argentina
The Challenge of Gringo Hegemony in Our America
By Homar Garcés
'The U.S. Southern Command has become the main middleman for Latin American governments and the articulator of foreign policy and U.S. defense in the region.'
Translated By Veronica Pascarel
15 August 2009
Edited by Patricia Simoni
Argentina - Argenpress - Original Article (Spanish)
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->In 1829, the liberator, Simon Bolivar, accurately observed: “The United States seems to have been destined by Providence to plague the Americas with misery in the name of liberty.”

Later, José Marti would endorse that prediction, saying, “Since the gaining of independence in the Americas until now, there has never been a situation requiring greater sensitivity, demanding more vigilance, or requiring a more detailed and transparent examination than the conference hosted by the powerful U.S. The conference imposed unmarketable products, in an endeavor to expand its control in America over weaker American nations.”[/b]<!--QuoteEnd--><!--QuoteEEnd-->

[acharya]

Nezavisimaja Gazeta, Russia
U.S. and Russia Split Central Asia
http://www.ng.ru/cis/2009-08-20/1_asia.html?mthree=4
By Юрий Симонян / Yuriy Simonjan
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Washington’s activities should not come as a surprise for Moscow. “Russia knew what was going to happen, making an agreement with the U.S. with regard to Afghanistan,” declared Zharikhin. According to him, there’s no threat to Russia’s geopolitical interests in Central Asia yet, except for the one that comes from Afghanistan, as “Talibs have become more active, and this can affect us.”[/b]<!--QuoteEnd--><!--QuoteEEnd-->

[acharya]

Al Youm 7, Egypt

America is Third World
… Just Like Us!


http://www.youm7.com/News.asp?NewsID=127931

By Mohamed Hamdy
<b>
America is nothing more than a third-world country, civilized in some ways, but controlled by the media, which moves the Americans at will.</b>
Translated By Siko Bouterse
15 August 2009
Edited by Christie Chu
Egypt - Al Youm 7 - Original Article (Arabic)

For many years the American Dream was issued to the entire world as the ideal model for everything in life. It truly fit most of our dreams and made us hope for some of what the Americans lived. But with each day, signs are appearing that confirm for us that the American Dream is a product of the media, far removed from reality, akin to advertisements that market a reality only expressed in movies and newspapers.

In September 2001, when al-Qaeda attacked the United States on its own soil, we witnessed the American administration and all the American governing institution's confusion, much like we are confused when dealing with a terrorist attack. This said to some of us that the incident was big, unexpected, vast, unprepared for and bewildering to America’s leadership and people…and we were right.

But when Michael Jackson died, we also discovered that the official treatment and the media treatment of his death closely resembled the way we treated the death of singer Laila Ghofran’s daughter, or that of Lebanese singer Suzanne Tamim. In both cases, we chased the rumors going around so much that they sometimes dominated over the truth. Who among us knew for certain what really happened? Suspicions persist in regards to the forensic investigation and the issue hasn’t been clearly put to rest for the skeptics.

In America, even now, people don’t know where Michael Jackson is buried or what came out in the autopsy report. The newspapers and websites publish new reports everyday. Accusations against his doctors and many others persist. Some say he committed suicide, while others say that he was killed. And even now, the American media continues to occupy itself with the Michael Jackson case even though he is dead and gone!

A few years ago I read “Bush at War,” a book by prominent American journalist Bob Woodward. In it, he looks at what took place within the American administration after the events of September 11th and how the decision was made to go to war against Afghanistan. When you read the U.S. National Security Council’s official report on the decision to go to war, as related by Bob Woodward in his book, you discover that you are facing a group of amateurs who, in many cases, have less information than journalists have on Afghanistan.

The only difference between us and America in this regard is that they still believe in the manufacturing of new ideas that they then attempt to apply on the ground. American research centers sell these ideas to various departments of government, be they Republican or Democrat, and from there they hurry to unleash them on the world--as with the War on Terror, the War of Ideas, Soft Diplomacy, the Clash of Civilizations, the End of Days and so forth. Then we seize them afterward and parrot them back.<b>

America is nothing more than a third-world country, civilized in some ways, but controlled by the media, which moves the Americans at will. This disease has spread to us recently, for it has become the media itself that shapes public opinion. But we are still very far away from the manufacturing of ideas and the invention of their application that the Americans practice. In the best of circumstances we prefer to move with independence. Anything after blind tradition is a very short distance indeed!
</b>

[HareKrishna]

more likely US have 3 major currents-materialism,crupto-christianism and pseudo-hinduism.

[acharya]

New frugality is the new normal, by necessity
AP


CHICAGO – A year after "shop 'til you drop" stopped, the nation fixates on this question: Will consumer spending ever return to pre-recession levels?

Increasingly, the answer appears to be no. Belt-tightening in bad times is normal. And after every other recession since World War II, penny-pinching quickly fell out of fashion and Americans resumed their demand for houses, cars and everything else.

This time it's different. Like the Great Depression in the 1930s, the Great Recession seems destined to turn many Americans into lasting coupon-cutters, scrimpers and savers. Consumers dug a debt hole over the past decade from which there's no easy climb out. The population segment that drives spending the most — baby boomers — faces special pressure: Boomers are running out of time.

A study by research firm AlixPartners concluded that once a new normal sets in after this recession ends, Americans will spend at about 86 percent of their pre-downturn level.

In an economy driven by consumption, the implications are far-reaching if that forecast proves correct:

• For every kitchen not remodeled, there will be lost sales of appliances and supplies, and fewer jobs for designers and contractors. As homeowners do work around the house themselves, there will be less work for gardeners, plumbers and handymen.

• For every shopper who trades down from luxury stores to discount stores, it will mean less profit for retailers and manufacturers. Retailers will continue to offer few product choices and leaner inventories, and they'll reassess store locations and advertising.

• If sales of cars and trucks average closer to the recession level of 10 million a year than the 16 million in boom times, more suppliers will fail and further consolidation among automakers could occur. Taxes not paid on lost vehicle sales will continue to stress budgets of state and local governments.

Frugality may be good for family budgets, but it's bad for the national economy. And that has the potential to reinforce and continue the miserly mood. A Gallup survey last month found seven in 10 Americans are cutting weekly expenses — a number that has been consistent through the summer.

A year after last fall's financial meltdown turned a garden-variety recession into the worst downturn since the Depression, thriftiness is still driven by the twin engines of necessity and fear. Unemployment, now at 9.7 percent, is still rising and expected to reach double digits before year's end for the first time since 1982. Many who still have jobs are getting paid less, and investments have a long way to go before they return to pre-meltdown levels.

Kathy Haney, 46, of Orland Park, Ill., has a job but is scaling back her shopping and packing her lunch.

"You put your priorities in different places because you never know if you're going to have a job tomorrow," the legal secretary says. "You think twice now. I have six TVs in the house. Do I really need a new flat screen?"

For her and many other Americans, the answer is no. The underlying causes of the meltdown and where it left millions financially suggests a fundamental change is under way. Personal spending has fallen in four of the last six quarters — the only time that's happened since quarterly records were first compiled in 1947.

In a normal recession, a vicious downward cycle of reduced spending by consumers and layoffs by employers finally eases and a virtuous cycle begins. Consumers start spending again. Factories ramp back up to meet the demand and hire workers. Incomes rise, fueling greater spending, more production and more jobs.

Until the Great Recession, the worst recession since World War II was in 1981-82. Unemployment peaked at 10.8 percent in December 1982, a month after the recession had ended.

The recovery that followed was powered by baby boomers, they were mostly in their 20s and early 30s then. Their careers were taking off, they were starting families, and they were spending freely. On homes, furniture, cars — and everything else. Saving for retirement was the last thing on their minds.

Fueled by boomers, when the recession ended, growth was explosive. Consumer spending rose 5.7 percent in 1983. GDP rose 4.5 percent in '83 and 7.2 percent in 1984.

"If someone gets more comfortable, they spend a little more," says Erik Hurst, an economist at the University of Chicago's Booth School of Business. "As they spend a little more, someone else spends more."

Jump to today. For most of this decade, Americans enjoyed a credit-fueled binge that allowed them to spend more than they made. They snatched up everything from gadgets to houses.

Those houses soared in value and became as valuable a source of cash as a bank ATM. Home equity was tapped to pay for vacations, new cars and kitchen renovations. The rising stock market gave people an inflated sense of wealth as they watched their retirement accounts grow.

Not unlike the Roaring '20s, which preceded the Great Depression three generations ago, people believed the good times would never end. Per capita personal spending ballooned 25 percent from 2003 to 2005, according to data from Euromonitor International.

When the party ended, the nation was left with more than just a hangover. Personal debt had doubled in a decade. As of July, it stood at $13.8 trillion, or about $124,000 per household. Despite months of frugality, that was only slightly below its 2008 peak.

It will take years to work down the debt, which will prolong people's thriftiness. Paying it down will be harder because of the layoffs, pay cuts, freezes and furloughs. Personal income has fallen or been flat eight of the past 10 months.

On the asset side of their balance sheets, plunging stock prices and home values have made Americans feel poorer. Their net worth — the difference between the value of what they own and what they owe — has taken a staggering $12.2 trillion hit in the Great Recession. Net worth fell from $62.6 trillion at the end of 2007 to $50.4 trillion at the end of this year's first quarter, figures from the Federal Reserve show.

The result: Consumer spending adjusted for inflation fell 0.2 percent in 2008 — the first annual drop since 1980. Hardest hit from the first half of last year to the first half of this year: Motor vehicles and parts (down 17.2 percent); furnishings and durable household equipment (down 8.8 percent); clothing and footwear (down 5.8 percent).

"There will be a fundamental shift in the kind of cars we buy, a fundamental shift in the homes we buy, and a fundamental shift in consumption generally," says Matt Murray, an economist at the University of Tennessee. "And that is not something that took place in the 1980s."

As in the 1980s, much of that shift will be driven by baby boomers. For the 78 million people born from 1946 through 1964, the Great Recession hit at a particularly inopportune time — during peak years of earning and saving before retirement. Boomers range from 44 to 63 today — the youngest is nearly 10 years older than the oldest was in 1982. They are running out of time and are most likely to remain cautious spenders and become aggressive savers even as the economy improves.

The housing bubble mistakenly led boomers and millions of others to believe their home was their retirement nest egg. If they left their home equity alone during the boom, they've taken a hit the last couple years but are still ahead. But many treated their home like a personal bank and spent the gains by tapping a home equity line of credit.

Some now feel disgusted with the great national buying binge and are reacting against it. Last month, Chicago playwright Maureen Riley began giving away what she amassed.

"I felt this tremendous clarity as I looked around and saw my space emptying out and my closet emptying out," the 55-year-old says.

Despite all the battered personal balance sheets, thriftiness will abate somewhat as the economy continues to recover. There will still be vacations and home remodeling. But there will be caution, too.

Sanda Schramm, 63, a second-grade school teacher from Florham Park, N.J., and her husband Rob, 64, made changes after their retirement funds fell 20 percent below their peak. They considered themselves frugal before the recession. Now, they are even more tightfisted.

Instead of scouring for 40 percent discounts at Macy's and other department stores, she looks for 75 percent markdowns and shops more at consignment stores. They go out to dinner once a month instead of twice a week. And most everything they buy is paid for in cash, not with a credit card.

When the economy bounces back and her retirement accounts recover, Schramm says she'll continue to shop at consignment shops but will probably go to restaurants more.

"When the housing market and stocks were booming, everybody felt wealthy," she says. "But when everything goes down, you feel you're vulnerable ... I have always been careful, but now I am even more careful."

[acharya]

Le Figaro, France

One More Effort, Mr. Obama



By Gaëtan de Capèle

While the rest of the world is setting to work to clean the Augean stables and sweep away the old order, the U.S. – where the catastrophe originated – is stalling and dragging its feet.

Translated By Merl Storr

4 September 2009
Edited by Louis Standish
France - Le Figaro - Original Article (French)

Nicolas Sarkozy has been mocked greatly during the past year for his crusade against the excesses of the financial sector, which in his view have led the world to the edge of the abyss. Media pundits made fun of his “posturing,” which seemed to be about handing over a few convenient scapegoats to the court of public opinion, the better to hide politicians’ own failings in the run up to the crisis, not to mention their inability to resolve it. Sarkozy’s attacks on the extravagant earnings of market high-flyers; his denunciation of a financial sector, which is over-inflated and out of control; his assaults on the tax havens which provide safe refuge for fraudsters and a base of operations for shady dealing: all were dismissed as “hot air” in financial circles and among the opposition, who were secure in the belief that business would be booming again once the storm had blown over.

That was a serious misjudgment. The world is changing, and the letter to the Swedish presidency of the European Union, co-signed by Nicolas Sarkozy, Angela Merkel and, most significantly, Gordon Brown, has set the final seal on the end of an era. We surely never thought we’d see the day when the guardian of the temple of the city himself would demand in writing “binding rules” to control bankers’ pay, forbid the payment of guaranteed bonuses, discourage speculation by placing new restrictions on financial institutions and close down institutions that pose a systemic risk to the banking sector, among other things. This is not just a reform of the global financial system – it’s a revolution.

Britain’s extraordinary conversion to the hard line maintained by Paris and Berlin will be presented to the rest of the EU in a few days time. All of these proposals will then be discussed at the G20 Pittsburgh Summit at the end of September. All that’s needed now is the support of Barack Obama, and the project to place financial capitalism on a moral footing will be underway.

The financial sector itself has expressed a desire for such a moral footing – but it has to be said that it doesn’t seem to be in much of a hurry about it. Even as we are preparing to celebrate, if that’s the word, the anniversary of the collapse of Lehman Brothers, which the start of an earthquake that almost destroyed the global banking system, Wall Street is already falling back into its old habits. After shelling out billions of dollars to save the banks, Washington has failed to react to the return of exorbitant bonuses, much to the incredulity of the American people. While the rest of the world is setting to work to clean the Augean stables and sweep away the old order, the U.S. – where the catastrophe originated – is stalling and dragging its feet.

Barack Obama was elected at the height of the financial crisis, and has never minced his words about the disasters caused by a financial sector gone mad. Will he refuse to accept the moral responsibility which history has placed on his shoulders? With three weeks to go to the Pittsburgh Summit, Europe is not going to give him the option.

[acharya]

<b>Roach Says U.S. Economy Is Vulnerable to Relapse (Update1)</b>
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By Brian Swint and Betty Liu

Sept. 15 (Bloomberg) -- The U.S. economic recovery will be “anemic” and prone to a relapse because it lacks momentum, Morgan Stanley economist Stephen Roach said.

“The economy is growing very close to what people refer to as a stall speed,” Roach, chairman of Morgan Stanley Asia, said in a Bloomberg Television interview today. “It lacks a cushion should there be something unexpected. When those shocks come, you don’t have the cushion and you’re vulnerable, you could have a relapse. Any recovery from a relapse will also be anemic. This is not the environment for a V-shaped recovery.”

The economy has lost about 6.9 million jobs since the recession started in December 2007, the worst of any downturn since World War II. Economists predict the U.S. economy will grow at an annualized pace of 2.9 percent in the third quarter after a 1 percent drop in the three months through June, according to a Bloomberg survey.

Federal Reserve Chairman Ben S. Bernanke said today that the recession has probably ended.

“Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time,” Bernanke said in Washington.

Roach said President Barack Obama’s Sept. 11 decision to impose duties on imported Chinese tires may create more trouble for the economy.

‘Worrisome Development’

“The tire tariffs invoked a few days ago are a recognition that the president needs labor to get health care through,” said Roach, speaking from London. “But down the road this is a worrisome development because unemployment is high as it is and will likely rise further.”

Obama said in an interview yesterday that the tariffs won’t spark a trade war or a cycle of retaliation. Obama said last week that he will impose duties of 35 percent on $1.8 billion of automobile tires from China, acting on a petition by the United Steelworkers union.

Roach also disagreed with Obama on the need for a change of culture on Wall Street. Obama yesterday said bankers took “exorbitant risks with huge leverage” and inflated bonuses.

“With all due respect to the president, who I voted for, I don’t think he’s really described the culture of a Wall Street that I know and that I’ve worked in for 30 years,” Roach said today. “Certainly there are problems that have been evident on Wall Street in this last 10 years, and we should accept our responsibility for them.

“Washington played an equally significant part in failing to oversee the financial system from the standpoint of its regulatory standpoint as well as from its monetary policy by the central bank,” Roach said. “We’re all in this together, and the president should be held at his word of shared responsibility for the crisis.”