Question time on the FM website – chapter 12

Ask any question about geopolitics, broadly defined. We — and others reading the FM website — will attempt to answer it in the comments.   Like Jeopardy, your comments must be in the form of a question!  All answers welcomed!

Questions received so far (click on the link to go directly to that thread):

  1. Would it be better to join a party you largely agree with and try to make it stronger, or would it be better to join the party you disagree with and try to reform it?
  2. A question about the sustainability of national debt.
  3. How would you rate the Republican’s Presidential candidates in terms of their policies?
  4. Why can’t/won’t nations cancel their debt?
  5. What are your thoughts on the recent peak oil conference and the conclusions the presenters gave?
  6. An Australian shares his perspective on American’s view of the EU (and health care).
  7.  What about Obama administration’s new “Pacific Policy” – in particular the new US military presence in Darwin, Australia?
  8. A too-complex question about the US political economy.
  9. Would you agree that our current strategy and tactics in Afghanistan closely resemble those we applied in Vietnam, and that the end result will be the same?

Some interesting reading to start the discussion

  1. The most important article of the year, from one of America’s finest outlets for journalism:  “How the GOP Became the Party of the Rich“, Tim Dickenson, Rolling Stone, 9 November 2011 — “The inside story of how the Republicans abandoned the poor and the middle class to pursue their relentless agenda of tax cuts for the wealthiest one percent.”
  2. Why we cannot cut Federal spending — and don’t know where it goes:  “The Biomedical Lobby” Daniel S. Greenberg, London Review of Books, 14 November 2011 — And FYI, we pay for most drug research; drug company revenue goes to profits and sales.
  3. A contender for dumbest thing in the NYT this week:  “To Save Our Economy, Ditch Taiwan“, Paul Kane, op-ed in the New York Times, 10 November 2011 — For a rebuttal (smackdown) see this by Patrick Chovanec (Prof Economics, Tsinghua U in Beijing).
  4. In health care, the US is on a different planet“, Austin Frakt (bio), The Incidental Economist (by experts in health care), 15 November 2011
  5. Another volly in the climate wars (the real ones, among scientists):  “Are secular correlations between sunspots, geomagnetic activity, and global temperature significant?“, Love, J. J., K. Mursula, V. C. Tsai, and D. M. Perkins, Geophysical Research Letters, 11 November 2011
  6. The best analysis I’ve seen yet of the new IAEA report about Iran’s nuke program:  “Old News“, Norman Dombey, London Review of Books, 15 November 2011
  7. Most naïve article of the week (I hope I’m wrong):  “Nevada Attorney General Catherine Cortez Masto Cracks Open the Financial Crisis“, Matt Stoller, Naked Capitalism, 17 November 2011

26 thoughts on “Question time on the FM website – chapter 12”

  1. “It need not be like this. Both parties belong to us. Both must and can be retaken. America needs a choice, not an echo (to borrow Phyllis Schlafy’s memorable phrase).”

    Would it be better to join a party you largely agree with and try to make it stronger, or would it be better to join the party you disagree with and try to reform it?

  2. Example:

    1. Country A pays 7% interest to borrow money and Country B pays 2% (both countries are in Europe and use the same currency)
    2. Company A pays 7% and Company B pays 2% (both companies compete in the same market)

    Company B probably will not survive due to higher costs assuming both companies need access to a large amount of capital to run their businesses.

    If this is the case, would Country B find itself in a similar situation as Company B? If both countries are in Europe and use the same currency how could Country B compete?

  3. How would you rate the Republican’s Presidential candidates in terms of their policies?

    (1) For most of them, their understanding of the issues is so defective as to render their opinions irrelevant. Romney and Jan Huntsman are the exceptions. Romeny is a windvane, so his current positions are not worth discussing. Huntsman is rational, intelligent, and experienced — and so ineligable for nomination by the modern GOP.

    (2) A sad historical fact is that successful Presidential candidates often assume that the voters are fools, and so say what is necessary to get elected. A few examples.

    1. FDR ran on a balanced budget platform in 1932 (unlike that profligate Hoover); he ran in 1940 on the “keep us out of the war” platform.
    2. LBJ ran as the opposite of that crazy warhawk Goldwater.
    3. Nixon ran in 1968 with the plan to end the Vietnam War in his pocket, and as a true conservative (unlike that leftist Humphrey). The war ran on for 4 more years, and he was the 3nd most liberal President of the 20th century.

    For details about Nixon see Let’s play round 2 of “Name That Liberal”.

    1. “Nixon… … was the 3nd most liberal President of the 20th century.”

      who were the first and second most liberal?

    1. Nations can and often do “cancel” debt, no matter to whom owed (the exception is multinational lending agencies, such as the IMF). They do not do so casually, for the same reasons that people do not lightly default on their debts.

      1. Nations hold foreign exchange reserves for many reasons, but the most important is to pay for necessary imports in an economic crisis. To use a household analogy, it is the same reason people hold emergency funds in a bank account instead of using them to pay down the mortgage held by the bank.

        Note that this does not well describe the situation today. For example (the extreme example), China holds roughly $3 trillion in US debt. We hold almost nothing in RMB debt. We have tiny foreign exchange reserves, since we pay for imports in US dollars — and our debt is denominated in US dollars.

    1. I used to carefully skim the papers from the ASPO conferences, but lost interest a few years ago. There was some good content, but the signal to noise ratio was too low. The sad aspect is that most of these people are knowledgable but appear unable to distinguish good reasoning from wild guessing. Also, I would respect the group more if they discussed the many failed predictions by their members, and the often alarmist (often nuts) forecasts.

      This is IMO why they are ignored. Rightly. Despite the approach of peak oil. They’re part of the problem.

      Here is the 2011 ASPO conference website, with the program and links to the presentations.

      For more information about the track record of the Peak Oil community see If humanity is unprepared for Peak Oil, here are some of the guilty people, 11 May 2010.

  4. Sir, I an Australian, is the the very gloomy and dismissive view of the concept of a European Union by many American commentators, driven by ideology. The need to denigrate any alternative to the manifest destiny and laissez-faire capitalism of the US.

    For example, many foreigners find American discussion on health care policy completely irrational and out of touch with reality. Thanks

    1. M.T from ecuador

      I am southamerican, and completely agree with your opinion regarding the EU. This site has a well thought opinion, and usually critizes the american/british press as part of a currency war of sorts: GlobalEurope Anticipation Bulletin:

      The GlobalEurope Anticipation Bulletin is the confidential letter of think-tank LEAP/Europe 2020, published in partnership with the Dutch foundation GEFIRA. As such, our aim is to provide our readers with state-of-the-art analyses of geo-political anticipation centered around the study and follow-up.

  5. How does FM interpret the manner and context of the Obama administration’s announcement of America’s new “Pacific Policy” – in particular the new US military presence in Darwin, Australia?

    1. Good question about a timely issue.

      My reaction: yawn. How does it differ from our many previous Pacific policies?

      1. Foreign bases? Check.
      2. Militarized response to foreign rival? Check.
      3. An excuse to maintain massive military spending? Check.
      4. Based on paranoia and hubris? Check.
  6. How do the tax and benefit systems , current accounts , reserve accounts , borrowings to prop up current and reserve accounts , gold reserves , bailouts, austerity programs work for the individual US States compared to the EU states ? Eg California vs Greece .
    Jonh ‘s Q is relevant ….

    1. I absolutely agree. Look at the list of posts about the Afghanisant War. Many of them note the similarities between the two in terms of not only our tactics, but also our decision-making methods.

      As for the ends, the local circumstances differ greatly. But we got nothing from the Vietnam War, we got less than nothing from the Iraq War (we’re weaker in the Middle East as a result), and I suspect at best we’ll get nothing from the Afghanstan War.

    2. Did the Iraq war have anything to do with the “Arab Spring”? I believe Chris Hitchens has said something in the affirmative to this affect.

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