The horizon is not so far as we can see, but as far as we can imagine

Month: November 2015

Putin’s Secret Intent and How It Relates to Syria

Apparently Putin is difficult to understand:

Vladimir Putin Official Portrait

Vladimir Putin

The North Atlantic Treaty Organization, created in 1949 to contain the Soviet Union, said it’s not sure what Putin is trying to achieve with either his actions in Ukraine or his weapons program.

“We cannot fully grasp Putin’s intent,” the alliance’s top military commander, U.S. Air Force General Philip Breedlove, told Congress in April, according to the Defense Department’s website. “What we can do is learn from his actions, and what we see suggests growing Russian capabilities, significant military modernization and an ambitious strategic intent.”

I first studied economics back in the early eighties. The discussion of trade was perfunctory; trade was not considered particularly important to the US economy because, with the exception of oil, the US could produce pretty much everything it needed, and–just as importantly–most of what it wanted.

Modern orthodoxy maintains that trade makes one strong. This is fundamentally incorrect. Trade is necessary at times as a bootstrap up for industry, or to get things you truly cannot make yourself, but it can make you weak. The more you trade, the more vulnerable you are.

Russia is vulnerable. Putin turned Russia around by concentrating on hydrocarbon production and selling it to foreigners.

Commodity production is always a bad deal. No matter how rich it makes you, commodity prices are always boom or bust, and are always subject to technological obsolesence.

So, Russian defense spending:

Defense and the related category of national security and law enforcement now eat up 34 percent of the budget, more than double the ratio in 2010.

Putin signed documents creating what he called the “industrial battalions” program, which will give thousands of draftees the option of working in defense enterprises instead of joining the regular military.

After years of chronic funding problems for weapons makers, Russia has started to prepay for the goods and services it buys from the more than 1,300 organizations and 2.5 million people that make up the defense industry.

This is not hard to understand.

What part of Russian industry is most technologically advanced and does the world demand the most?

Weapons.

Russia needs to diversify what it exports. Military goods are the obvious market for which to do so. Really, there are only three sources for military goods: the West, China, and Russia.

Russia appears to have begun this strategy about 2012, before the oil price crash, the Ukraine, and so forth, but their vulnerability to oil price crashes was obvious. That the US was continuing to try to destabilize Russia’s near abroad and draw it into NATO was obvious as well.

Now, Syria.

What’s the problem with buying your weapons from the US?

Unless you’re a core US ally, the US is unreliable. If your government changes in ways the US doesn’t like, or if you are an enemy of  US core partners (Israel, Saudi Arabia, etc.), they will cut you off from parts and ammunition at the drop of a hat, as well as canceling pre-paid orders.

But: The US was able to say that they had the best equipment. No one could compete.

What is happening in Syria is a demonstration that Russia can be counted on to help its allies—meaning its customers. It is a demonstration that Russia’s new weapons, and particularly its cruise missiles and airpower, are comparable to US product, and maybe, even in the case of its most advanced fighter/bomber, better.

It is a demonstration that if you buy Russian you aren’t buying crap that US-supplied forces can roll right over any more.

The Syria issue is a trade policy issue.

That is not to deny the geopolitical element to it, there certainly is one. But most analysts are not catching that this is also economic policy in action.

Shove Russia against a wall, impose sanctions, drive down the price of oil, and of course they will reach for what else they do well, and can sell.

The failure to anticipate this, the failure to understand this at the highest possible levels of NATO, when Putin had been telegraphing his strategy for years, is a terrible indictment of our “leadership”‘s competence.

Now, add to first class armaments and reliable supplies, a proper payments and banking system with China’s aid. Add China’s industrial goods and willingness to build infrastructure, and you have a second vertical capable of supplying virtually everything the West can do, and one which doesn’t care about the internal politics outside its near-abroad.

That new world isn’t quite here yet, but it’s almost.


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Tunnels of the Underclass

My parents were rich, then poor, then middle class during my life. My father both made and lost a fortune in his thirties and forties. I went to an elite private school, paid for partially by the UN. Then, I spent my twenties poor, often ill, and, on occasion, was only saved from the street by the kindness of friends.

When I think of class issues, I think of them in terms of corridors. In every gleaming office tower, they are there, in every upscale marble, glass, and steel mall—they are there. They are dark concrete, engrimed, lit by harsh fluorescent lights behind steel cages, streaked with the residue of years of waste. They are the corridors that the service staff use: the maintenance staff, the cleaners, the truck drivers, the blue collar guys who cart the heavy boxes and fixtures around. They are ugly, and often they stink.

The most disgusting set of corridors I ever encountered was in the Chateau Laurier. For those who don’t know, the Chateau Laurier is an old hotel connected by tunnels to Parliament Hill in Ottawa itself. It is one of the hearts of power in Canada. And the sub-basement has a smell that is something between rotten meat and acrid cheese with something acid and chemical cutting through it. I quite literally gagged the day I delivered food meant for the gullets of the rich to the old majestic Chateau, that magnificent palace whose opulent restaurants are but feet from a stench laid down for decades.

It’s that squalor that underlies the worlds of both opulence and sterility–the opulence of the upper class, the sterility of the middle classes’ office buildings. It’s those corridors in which those who earn little more, and sometimes less, than minimum wage work. For Lord save the clean, little people–in their white shirts and ties, their buffed oxfords, and their clean fingernails–save them from seeing the people who do the work that keeps their white walled world clean and running, the people who keep the air conditioning and the heat on, the carpets clean, and the light fixtures working.

The trolls come out at night as the offices empty. Once the daytime denizens are gone, they come scurrying out from their tunnels and are allowed to move through the offices; so as not to offend the others with the sight of their sweating for a living or dealing with dirt and garbage. And when the daytime denizens do see you, if you are one of those night-time trolls, they don’t see you. Their eyes don’t track you, they move right over you as if you were a piece of moving furniture—an appliance. They will only approach reluctantly if they need something. After they’ve gotten what they wanted, whacked the machinery, as it were, you usually find you’ve gone back to being an invisible appliance with whom eye contact is to be avoided at all costs. And you are paid in scraps. For your labor, you receive a pittance compared to those whose fingernails are clean, whose work involves the strain of typing on a keyboard, attending meetings, and picking up the phone.

That’s my second world, that world of tunnels. It’s a world I inhabit no longer, but it’s a world that haunts me, that I know exists alongside the antiseptic office world. Those corridor dwellers are the ones whose labor makes that new, office world possible—they are the trolls of the modern world, who come out at night, or who scurry through tunnels in the day, never to be seen by those whom their work supports. If seen, they must be ignored.

And they are.

And so I listen to John Edwards and I marvel that he dares speak of the unspeakable, of the great fear—not just of the middle class, but of all Americans. For we choose not to look at that which we fear. It’s not that we fear the working poor, or their humbler cousins, the broken, those who don’t even have job, much less a bad job. What we fear in them is that we might see people like ourselves.

For, to feel secure, in our beautiful world, we must believe that there is something fundamental that makes us different from the poor and the broken. We must think, “Ah, but I’m smarter,” or “I work much harder,” or, less gratifying but still good, “I have a better eduation than they do.”

We must think, then, “I am more valuable than them, I am different, what happened to them could never happen to me! I’m different! I am!”

We cannot see them as humans like us. That many of them work hard, or worked hard when they were allowed to. That most are not stupid, and that many are no worse educated than we. (And isn’t that the easiest thing to fix anyway? As though if everyone had a high school diploma, or a B.A., or a Ph.D., there would be jobs for them all.)

But I worked among them, lived among them, was one of them, and I know they work as hard, indeed harder, than most of the soft office workers whose lives they make easy. And I remember the screams from the soft, pampered bewildered sots when something went wrong in their pristine worlds and their inability to pick up a heavy box, or use a plunger on a toilet, or confront someone violent. Oh, yes, they disdained the goblins, but they’d coming running for our help fast rather than soil those soft hands.

And yes, this sounds bitter. And yes, it is. And yet, I’ve long moved on from that world. My hands are the soft ones now, I’ve not picked up a shovel in over a decade.

But I don’t think that what I do is somehow innately more deserving than someone who cleans toilets for a living, or who sits at a security desk and patrols to make people safe, or who digs ditches, or who… but why go on, make your own list of the underpaid and under-appreciated.

And so I listen to John Edwards and I know why he lost twice. People don’t like you when you make them look at the other side, at the dark fate that may await them one day if they’re a little unlucky; if their company downsizes, if they’re 45 and the company wants a youngster, or if some guy in China is willing to do their job for one-tenth the wage.

Like the way the middle class says about death “she passed away,” we don’t want to look firmly in the face of poverty and see that the face is our face, that its fate echoes ours. If seen, it must be ignored.

Mustn’t it?

(A Reprint, and now kicked back to the top from 2010 re-publication.)


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It’s Nice that Canada’s Cabinet Is Half Women, But…

I’m glad Justin Trudeau, Canada’s new Prime Minister, has made half his ministers women. Good for him.

But…

let us take a single example. The new Finance Minister.

A man. Bill Morneau, who used to be in charge of the C.D. Howe institute. For non-Canadians, that’s a think tank that is very right-wing.

As I noted about Trudeau throughout the election, he’ll be good on some things, but he’s still a neo-liberal. There will be various good news around taxes and pensions, then they will pass the Trans Pacific Partnership, which will do more harm than every bit of economic good they do.


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