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Capitalism in the US in the last decade

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    Posted: 04 Jul 2011 at 16:17
This topic is branching off from the Communist Utopia thread. Discussion from there will continue here.


Originally posted by Al Jassas Al Jassas wrote:


When it comes to bailouts, everyone was bailed out not just GM and Chrysler. Banks were bailed out, insurance companies were bailed out, so why not Detroit?


I only used the automakers as an example.
 
Quote
If this was an ordinary crisis I would generally agree that leaving Detroit to fall will not be the end of the world although it will shake the economy pretty badly. But back in 2009, you had 10% unemployment, 10% underemployment, consumer spending (65% of the economy) at record low with negative net savings by individuals and an already banking sector that was deep to its ear in debts given to Detroit. Allowing Detoit to fail would have rendered all the TARP and subsequent measures taken to solve the financial crisis (which had no direct connection to Detroit) useless.
 


I am afraid TARP became a self aggrandizing/political tool rather than a relief program as it was intended for. A ton of TARP related news not fit to print:

http://pajamasmedia.com/instapundit/?s=tarp

Quote
Unemployment would have shot up to 15 or 16%, the banking system which was already near total collapse would have collapsed anyway. A negative feedback cycle (because of lack of spending due to unemployment) would have kicked in leading to even more unemployment and more collapse. This was exactly what happened in the crash of 29.
 
Saving Detroit not only saved 3 million jobs, it actually added some 1 million more. You might not like it but that is reality. Bailing Detroit and Wall $treet worked.
 


Did these remedies work? I think it is too soon in declaring this a success story. Color me skeptical for now.


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As for governments power over the economy, that comes with the definition of government whether you like it or not.

Which is the reason as to why i am for limited government.

Quote
 Had the banking industry in the US been regulated as it should be none of this would have happened. Wall $treet wouldn't have crashed, Detroit wouldn't have been bailed out and the economy although would definitely suffer from a dip due to bubble bursts would bounce back in no time.


Funny you say that. The storm was recognized for what was coming, and the fixes were averted with reasoning such as this, from Mr. Frank unwittingly supplied by the NYT's:

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html?pagewanted=3&src=pm

Quote
Finally, politicians bring corruption to government not the other way around and they are helped by the electorate themselves. Look at Italy. Everyone knows how corrupt Berlusconi is yet the Italian people keep electing him giving him more power every time. Same thing applies in the US where relatively less corrupt politicians are fired and replaced (by large margins) by the scum of the earth as happened in Florida where they have a convicted fraudster as governor.    


Perhaps, but government is where power lays for the unscrupulous, thus....

As for people who keep electing scum of the earth: fool me once, shame on you; fool me twice, shame on me. Speaking of a state governors, did you know that another Texas governor may have Presidential aspirations? If he gets the GOP nod for POTUS, then the rhetoric here in the states, and across the globe, will revert to it usual state, an extreme case of frothing at the mouth. Oh joy, joy...



Edited by Panther - 05 Jul 2011 at 02:49
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Al Jassas Quote  Post ReplyReply Direct Link To This Post Posted: 04 Jul 2011 at 19:13
Originally posted by Panther Panther wrote:

 
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If this was an ordinary crisis I would generally agree that leaving Detroit to fall will not be the end of the world although it will shake the economy pretty badly. But back in 2009, you had 10% unemployment, 10% underemployment, consumer spending (65% of the economy) at record low with negative net savings by individuals and an already banking sector that was deep to its ear in debts given to Detroit. Allowing Detoit to fail would have rendered all the TARP and subsequent measures taken to solve the financial crisis (which had no direct connection to Detroit) useless.
 


I am afraid TARP became a self aggrandizing/political tool rather than a relief program as it was intended for. A ton of TARP related news not fit to print:

http://pajamasmedia.com/instapundit/?s=tarp
 

 
TARP was a success, the banking system was stabilised, house prices continued on their correcting curve while not directly affecting the economy and growth and capital returned. The guys you quote above are the same ones who still advocate the very same policies that are now resulting in high gas prices in the US and contributed directly to the crisis. Anyway Here is real economic data (not voodoo crap):
 

Originally posted by Panther Panther wrote:

Quote
Unemployment would have shot up to 15 or 16%, the banking system which was already near total collapse would have collapsed anyway. A negative feedback cycle (because of lack of spending due to unemployment) would have kicked in leading to even more unemployment and more collapse. This was exactly what happened in the crash of 29.
 
Saving Detroit not only saved 3 million jobs, it actually added some 1 million more. You might not like it but that is reality. Bailing Detroit and Wall $treet worked.
 


Did these remedies work? I think it is too soon in declaring this a success story. Color me skeptical for now.
 
Yes they did. Were they enough? No. The government needs a new albeit much smaller stimulous package to convince the corporations to spend some of the $2 trillion they keep in banks as a result of tax cuts, previous stimulous and the recovery of the financial system. For more here is what the CBO has to say:
http://cboblog.cbo.gov/?p=2204 


Originally posted by Panther Panther wrote:

Quote
As for governments power over the economy, that comes with the definition of government whether you like it or not.

Which is the reason as to why i am for limited government.

And the reasons I put forward above and below that quote prove why that is a myth.

 
Originally posted by Panther Panther wrote:

Quote
 Had the banking industry in the US been regulated as it should be none of this would have happened. Wall $treet wouldn't have crashed, Detroit wouldn't have been bailed out and the economy although would definitely suffer from a dip due to bubble bursts would bounce back in no time.


Funny you say that. The storm was recognized for what was coming, and the fixes were averted with reasoning such as this, from Mr. Frank unwittingly supplied by the NYT's:

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html?pagewanted=3&src=pm
 
 
For the millionth time, Fannie and Freddie didn't cause the crisis, it was the unregulated derivative's markets (where worthless assessts were legally repackaged as AAA and sold to other victims without telling them what was backing these assessts), the repeal of the Glass-steagall act, ultra low interest rates (partly promoted by Bush who wanted more people to buy houses) that made middle class working families (eligible for Fannie-Freddie) get a 2nd or even a 3rd mortgage that did. Once the bubble burst it took everything in its way.
 
Originally posted by Panther Panther wrote:


Quote
Finally, politicians bring corruption to government not the other way around and they are helped by the electorate themselves. Look at Italy. Everyone knows how corrupt Berlusconi is yet the Italian people keep electing him giving him more power every time. Same thing applies in the US where relatively less corrupt politicians are fired and replaced (by large margins) by the scum of the earth as happened in Florida where they have a convicted fraudster as governor.    


Perhaps, but government is where power lays for the unscrupulous, thus....

As for people who keep electing scum of the earth: fool me once, shame on you; fool me twice, shame on me. Speaking of a state governors, did you know that another Texas governor may have Presidential aspirations? If he gets the GOP nod for POTUS, then the rhetoric here in the states, and across the globe, will revert to it usual state, an extreme case of frothing at the mouth. Oh joy, joy...

 
Well then Rick Perry sure fooled Texans 3 times didn't he?
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 04 Jul 2011 at 22:09
GM was certainly a temporary success, but the long-term is a bit unpredictable because we cannot be sure that the company will actually change its ways. The UK car industry was 'saved' a few times but eventually effectively vanished into foreign ownership or a few luxury brands.
 
TARP didn't succeed because the money smply stayed in the banks or was passed on to shareholders and executives. It did nothing to increase lending (it's overt aim) but merely allowed banks to post profits instead of losses. In macroeconomic terms, while printing the money increased the money supply, the effect was nullified by the consequent decrease in the velocity of circulation. Hence the economy continued to decline, as house prices, mortgage failures, state budgets and unemployment factors demonstrate.
 
Was this thread supposed to be about the theoretical bases of capitalism or about recent US policies?
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Originally posted by gcle2003 gcle2003 wrote:


Was this thread supposed to be about the theoretical bases of capitalism or about recent US policies?


Sorry about that. I need change the title a bit and probably even move the thread. Bus basically about recent policies.
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Originally posted by gcle2003 gcle2003 wrote:

GM was certainly a temporary success, but the long-term is a bit unpredictable because we cannot be sure that the company will actually change its ways. The UK car industry was 'saved' a few times but eventually effectively vanished into foreign ownership or a few luxury brands.
 
GM's problems weren't that they don't sell cars, they remain the largest auto-makers in the world. Their problems are structural. They ran the company as if it was the 1950s not 2010s and expanded into areas that they had no business expanding to like finance (where most of their losses occured).
 
Originally posted by gcle2003 gcle2003 wrote:

TARP didn't succeed because the money smply stayed in the banks or was passed on to shareholders and executives. It did nothing to increase lending (it's overt aim) but merely allowed banks to post profits instead of losses. In macroeconomic terms, while printing the money increased the money supply, the effect was nullified by the consequent decrease in the velocity of circulation. Hence the economy continued to decline, as house prices, mortgage failures, state budgets and unemployment factors demonstrate.
 
Was this thread supposed to be about the theoretical bases of capitalism or about recent US policies?
 
TARP's goal was never to supply money to the banking system in order to encourage lending, this was the goal of the second stimulous passed under Obama (known as ARRA). TARP bought the toxic assests from the banks in order to relieve the pressure on them and thus stabilise both the housing and financial markets. 
 
Now why didn't ARRA achieve more than what was hoped for? Well the answer is a bit complex. Partl of the problem was that the depression was deeper than previously thought, but the biggest factor was political instability due to this unreasonable anti-spending climate in the US and the feverous demand to cut spending at a critical time of recovery. In such circumstances business confidence is not high at all.
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote hugoestr Quote  Post ReplyReply Direct Link To This Post Posted: 05 Jul 2011 at 05:45
Capitalism in the last decade, as a system to bring stability and greater prosperity, is a failure.

However, as a system to accumulate a lot more wealth to the elite, it is a total success.

Rather than an engine of innovation, capitalism in the last 10 years has been nothing more than an exercise in accumulation of economic and political power. Some may think that the bailouts were examples of anti-capitalism. It was the opposite: the monied classes, which control the government, engaging in a massive redistribution of wealth: from the middle-classes(?) and the poor to themselves.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 05 Jul 2011 at 08:10
Originally posted by Al Jassas Al Jassas wrote:

Originally posted by gcle2003 gcle2003 wrote:

GM was certainly a temporary success, but the long-term is a bit unpredictable because we cannot be sure that the company will actually change its ways. The UK car industry was 'saved' a few times but eventually effectively vanished into foreign ownership or a few luxury brands.
 
GM's problems weren't that they don't sell cars, they remain the largest auto-makers in the world. Their problems are structural. They ran the company as if it was the 1950s not 2010s and expanded into areas that they had no business expanding to like finance (where most of their losses occured).
That's consistent with what I wrote. In detail the UK experience was somewhat different from the US (UK unit labour costs for instance were lower than European or American). But the secret to success in both cases requried a change in commercial management rather than just financial support.
Quote
 
Originally posted by gcle2003 gcle2003 wrote:

TARP didn't succeed because the money smply stayed in the banks or was passed on to shareholders and executives. It did nothing to increase lending (it's overt aim) but merely allowed banks to post profits instead of losses. In macroeconomic terms, while printing the money increased the money supply, the effect was nullified by the consequent decrease in the velocity of circulation. Hence the economy continued to decline, as house prices, mortgage failures, state budgets and unemployment factors demonstrate.
 
Was this thread supposed to be about the theoretical bases of capitalism or about recent US policies?
 
TARP's goal was never to supply money to the banking system in order to encourage lending, this was the goal of the second stimulous passed under Obama (known as ARRA). TARP bought the toxic assests from the banks in order to relieve the pressure on them and thus stabilise both the housing and financial markets. 
OK I was commingling TARP and ARRA, which I guess is technically wrong. However, TARP did not buy the toxic assets from the banks: the banks (or whoever) still have them. The point of TARP was supposed to be to allow the banks to write off (or at least down) the bad assets, which the banks failed to do. And the point of writing off the bad asssets was to provide for expanding lending once again. INstead of writiing down the assets the banks just took the money, with the results I described.
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Now why didn't ARRA achieve more than what was hoped for? Well the answer is a bit complex. Partl of the problem was that the depression was deeper than previously thought, but the biggest factor was political instability due to this unreasonable anti-spending climate in the US and the feverous demand to cut spending at a critical time of recovery. In such circumstances business confidence is not high at all.
I can agree with that, certainly as a contributing factor. Cutting spending has somewhat similar effects to reducing lending.
 
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Corporate welfare par excellence. Make profit with uncontrolled leverage and risk and get bailed out with tax payer money, why because they are too big to fail. The gullible public is being subjected to highway robbery:

- in giving away national security interest by monopolizing manufacturing outsourcing in China and service outsourcing in India, making these two regional hegemons more powerful, which is not in the interest of the US, but it maximized profits for some some US based MNC's and Wallstreet fund managers
- engaging in unnecessary wars that fattened profit margins for defense and private mercenary industries
- in extending cheap credit to unqualified buyers of real estate who eventually defaulted, where the financial industry made money extending the credit and selling Credit Default Swap insurance betting that these same loans will go bad, since they themselves gave these loans and knew how secure they were and then got bailed out with taxpayer money, because the CDS was going to wipe out entire financial industry with potential multi trillion dollar obligations

Finally after all this deficit that was created this way since the Reagan era, they are now being blamed on govt. employees "extravagant" pensions, medicaid and social security, conveniently trying to hide the fact that the billionaires mushroomed and multiplied, except for a few who got caught like Madoff, who were puny marginal players in this great financial swindle. In this new shock doctrine, now they are on their way to gut the middle/working class by taking away collective bargaining rights of govt. workers and of course the running joke in Congress is how to get the democats to accept the gutting of medicaid and social security, the last refuge for the sick, poor and elderly, so job killing deficit can be tackled.


If the US corporate and business elite are making money using this country and its resources, then they should pay their fair share of taxes. The deficit was caused because of the non payment of fair taxes and other irresponsible activities and they will go away when they start paying taxes and refrain from adventures, instead they choose to wage a propaganda war on the people of America and hollowing out their future, because it is not difficult to buy out the political class (Republicans and Democrats also to a large extent, Tim Geithner, Larry Summers?) and lately the Supreme Court justices as well. If they hate the people of this country so much, perhaps they should try to build their business empires in Cayman Islands or in a startup floating country and see how well they can manage:






Edited by eventhorizon - 05 Jul 2011 at 22:44
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Post Options Post Options   Thanks (0) Thanks(0)   Quote eventhorizon Quote  Post ReplyReply Direct Link To This Post Posted: 06 Jul 2011 at 06:02
Perhaps one needs to compare capitalism in the US which failed its population and capitalism in Germany which did much better:

http://online.wsj.com/article/SB10001424052702304259304576373281798293222.html?KEYWORDS=Germany

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The strong economy has boosted Germans' confidence in their own brand of capitalism. Its main elements: solid public finances, a balance between business flexibility and a strong social safety net, and a belief that well-made goods, not financial wizardry, are the foundation of prosperity.

Ms. Merkel touts this formula, which Germans call the "social market economy," as an example that holds lessons both for the finance-heavy U.S. and U.K. and for overregulated, sclerotic members of the euro zone such as Greece and Portugal.

Foreign critics, though, want Germany to tinker with that formula. The nation's strong exports and weak consumption generate trade surpluses that are second only to China's in size. Since the financial crisis, Germany has come under pressure to raise its domestic demand through tax cuts or wage hikes, to give a helping hand to exporters in the rest of Europe and the U.S.

Few in Germany are listening. Ms. Merkel argues that German consumers will open their purses of their own accord, if they are confident that the state's finances are sound. It's a controversial idea among economists, but it plays well politically with German voters, who tend to be culturally averse to debt, whether their own or the government's.



Germany is a better economic model to follow for many countries in the West, including the US. Shirking from responsibility such as the case in Libyan intervention, is, however, something I disagree with. I believe that was an irresponsible decision for Germany that may cost Germans in the future. It is true that much of the mess in former Ottoman provinces are the domain of the Anglo French and their later successor the US, so Germans need not have historic responsibility, but then as a big part of EU and NATO, they need to shoulder their responsibility and avoiding it only reflects badly on them. But something has to be said about pacifism and non-intervention versus the tendency to act like globo-cops.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Al Jassas Quote  Post ReplyReply Direct Link To This Post Posted: 07 Jul 2011 at 04:42
Hello event
 
Interesting article above and the most interesting thing about it is the comments by readers which tell alot about the mentality of the American people.
 
Excepting the obvious liberals, those with conservative positions went out of their way to dismiss the German success to the point of prefering to be paupers but capitalists than socialists and rich.
 
In my opinion the biggest failure of American capitalism in the last 25 years has been this overemphasis on "wealth creators", that is the rich people and white collar executives and how it is they who create wealth not the average working Joe. Germany's true success is that its strong unions are part of the decision making process in German corporations. This meant the executive branch was checked (which is why the CEO still gets only 11 times as much as the average blue collar worker) and corportations explore more radical options to save money like less pay/less work instead of the American model of fire here and hire abroad.
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 07 Jul 2011 at 07:39
Indeed. I find it difficult to understand why the UK (honourable exception perhaps to Scotland) votes for people like Cameron who seems determined to follow the US model into permanent decline rather than the German model (which is not too far different from the other European powers) into steady improvement.
 
It's even worse that the other main parties don't do, or even effectively say, anything different.
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I think the primary reason for why the UK and US follow the models they currently follow is because they have a "modern" services based economy as opposed to the "outdated" export-based German industrial economy as one British economist claimed.
 
The gutting out of the Anglo-American industrial sector wasn't something accidental, the Thatcher-Reagan duo were instrumental in the process. The reason for following such policies were both political (destroying unions/labour groups) and economic (because services economy depends on credit and individual spending making growth much more lasting).
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote eventhorizon Quote  Post ReplyReply Direct Link To This Post Posted: 07 Jul 2011 at 17:09
Hello Al Jassas,

Any large system that fails to maximize the creative potential of its masses will be doomed to failure and relegated to 2nd tier. How do you maximize this creative potential - good nutrition, proper health care, sufficient and relevant education and training and most important of all an empowered work environment where a work force can challenge themselves and utilize their creativity. If most of them are flipping burgers or selling Chinese goods in Walmart, or real estate or insurance to each other while a select few are raking in millions being CEO, hedge fund manager, CDS dealer or commodities trader, then the inevitable will happen and is happening.

That Germany has done well and will show the way for the West, specially for EU in the near future, I believe is a good omen. Formation of EU, despite the premature currency regime debacle and mistake, and German unification both I believe had positive effect in its economy, which shows the importance of larger systems. It will be a mistake for Germany to become too confident and aloof from the rest of EU, it must continue to be engaged and solve the looming debt crisis. Making it more attractive for Russia to be closer to EU should be another priority.

For the time being the US and its political and business elite need to reflect on their past 3 decades of activity since the fall of the Soviet Union.

In this complex world of ours there are thousands of different possible future paths, but only a few will provide a better world that most of us can be happy with. There are plenty of challenges for the future for all regions of the world and there are plenty of creative ways we can be of service to each other, if we put our mind to it. Germany, Switzerland and other countries have shown that cheap labor is not everything, labor intensive factories need complex capital machinery and China, India and other developing countries are still not ready to manufacture these, just like commercial planes are dominated by Boeing and increasingly more so by Airbus. There is a value chain and fit for every country and region for a global division of labor, which properly managed can bring stable improvement for all regions. The US elite motivated by greed (short term profit margin and dividend) and any lack of global responsibility tried to upset an orderly transition process that gave way to a chaotic disorderly situation and contributed to the rise of China and India.

I believe Brazil's rise is not going to be a threat for its neighbors or regional/global peace and stability, but this cannot be said for China or India both of which exist in a maze of highly dense population matrix that will be negatively affected by too much concentration of power in these two hands, the symptoms are already there for all to see. The West should allow and encourage others to form cooperative systems so there can be other large systems who can rise and bring some balance in the neighborhood of these two rising future hegemons, otherwise a future Asian theater of chaos will take shape in the backdrop of global population peaking at around 9 billion and its associated environmental pressure and struggle for scarce resources.
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We see Brazil as a friendly power arising. For the meanwhile, China is also quite a careful country in foreign relations. I don't know why that must change.
But I perceive America as a paranoic superpower that needs enemies to live, so as soon as its economic power is threaten, it may cause a conflict with China. Please, send the U.S. presidents to a mad house, for treatment.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote eventhorizon Quote  Post ReplyReply Direct Link To This Post Posted: 14 Jul 2011 at 16:52
When the US predominance in global power projection comes in competition with China's, which slowly but surely will happen, no matter how much both parties try to avoid it, they will become adversaries, Mearsheimer predicts as much and I agree with his views:

http://mearsheimer.uchicago.edu/pdfs/A0056.pdf

China's biggest weakness is its unsustainable and opaque one party system of government, which is prone to nepotism and idiosyncratic/whimsical leaders who are not accountable to the Chinese voting public, but only to a small group of their elite colleague in Communist Party, PLA, PLN and PLAF etc. US and others who do not want to see China rise too much too fast, will use this as a lever.

China and India are not benign powers, the term benign power is also kind of oxymoron. Powerful countries can never be benign, usually they will step on some toes while trying to secure their interest.

Asia is a very crowded space, there are billions of people in China and India, but around them in their neighborhood also there are billions of people in smaller countries. There are trade, transit, international water sharing, maritime space sharing and many other issues where China and India are already making neighbors nervous and jittery, it will only get worse with time.

To give some concrete examples, China, which is essentially a Han Chinese entity, have absorbed Inner Mongolia in itself, it has also occupied Tibet and Xinjiang and are engaged in demographic invasion in both of these regions to ensure that Han population there increases to more than 50-60% and eventually to 75-80%, to prevent a Soviet Union type breakup. Not only do they not share economic opportunities with the local indigenous population in Tibet and Xinjiang, they try to suppress their religious cultural activities and try to absorb them into the Han culture, which is a form of cultural genocide. As a result you have occasional outburst of riots and mayhem, because of the suppressed rage of the locals.

If you ask the Chinese, what right do they have to occupy these regions, they mention that historically it was theirs, meaning under Yuan and Manchu dynasty rule, both of which were foreign dynasties at the time. To prevent calling them foreign, they claim them as one of their minority nations, which is true for Manchu, but not true for Mongols, who were able to save half of their country with the help of Soviet Russia. Even the area of Manchuria was a no go area for the Han during much of Manchu rule and later became a Japanese protectorate.

China is also damming up major international rivers in Tibet, such as Yarlung Tsangpo/Brahmaputra, Mekong etc., which provide sustenance to billions in downstream countries. India is damming up its shared rivers as well, at the detriment of downstream neighboring countries.

China has conflicts with Japan, Vietnam, Philippines and others about island ownership in South China Sea and Sea of Japan, there is no easy solution in sight.

China and India are able to get away with much, because they are large systems, they have competitive advantage and they are rising, so the balance of power is shifting to their favor, while the smaller neighbors cannot compete because of their size.

The situation in South America is different, the population versus resource pressure is much less than in Asia. So Brazil can afford to be a benign friendly giant.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote fantasus Quote  Post ReplyReply Direct Link To This Post Posted: 14 Jul 2011 at 19:28
Could the power-game of another age be relevant here?
What I have in mind is the years about 150 to 80 years ago. In that age there was some "established Great Powers" all centered in Europe. Britain was perhaps the leading one in that group. Then we see some "rising powers", some of them non-european: Germany, U.S.of A, Japan, Italy. We could even say the later were "new". The tensions between those "new" and the old were important factors for the later 20.th century wars and revolutions. So if we look back there seems to be some unpleasant perspectives, though of course modern China is different in many ways from imperial Germany with its world-power aspirations, and countries like India and Brazil are of course not just new versions of Italy and Japan.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote eventhorizon Quote  Post ReplyReply Direct Link To This Post Posted: 15 Jul 2011 at 17:29
Entity of Brazil is new, but India like China are old population centers, with a lot of history of warfare, kingdoms, empires, outside barbarian invasions, just like Europe.

In the period between 80 to 150 years ago, there was rivalry mainly between European powers, Germany can be called a new European power as well I think, as well as Italy, although they were not active in colonial ventures as early and as much as Spain, Portugal, Netherland, France and England.

USA with its huge land and increasing population, transplanted from Europe and freely intermixed, became the new great power, surpassing all other European powers in a divided, nationalistic and fragmented Europe, mainly because of its size of population and market, its single language and its cultural homogeneousness and its "dynamism", despite the setback during civil war, due in part to the slave dependent economy in the South. USA became a more effective large system than any other, which it proved with its performance in WW II.

Today China and India has essentially regrouped and are on the march to regain their past prominence and glory. The long term effect of the emergence of these two giants on the Eurasian land mass is fundamentally different than jockeying for power of the mainly European powers in the earlier era, except for Japan, it was essentially an intra European affair or more correctly intra Western affair.

The re-emergence of India and China has and will put further strain among its neighbors and will motivate them to form other large systems or unions to offset the coming imbalance.

The world is slowly going back to a status quo that it held between different regions before the Renaissance and its subsequent centuries, although the world today is far more populous and technologically advanced than those years in the past. What remains to be seen is what happens in the fragmented South East Asian, Middle East, Central Asian and Latin American region and the African continent.

My guess is that people will work to create their virtual large systems in these fragmented regions, even while nation states still exist, so that they can compete more effectively with status quo powers such as the West and emerging powers such as China and India.

But your main question about wars and conflicts and whether such calamities and catastrophes will happen while the world balance of power shifts, I think its entirely possible, because human nature has not changed much in a few centuries or decades, but the presence of MAD(Mutually Assured Destruction) and better communication and conflict management tools work as brakes on full scale and all out existential wars. It does not mean that full scale wars will not happen, there are as many or more short-sighted people on this planet today than there ever was in the past, but effective WMD's make full scale wars between Nuclear powers terribly expensive. So people are more careful about initiating wars and escalating them, specially when both parties have Nuclear weapons. This means that Nuclear weapons will get more wide spread and every region will have its latest and greatest array of Nuclear arsenals, pointing at rivals and "enemy" nations. It is also possible that WMD's in the future will be less dirty than than they are today and may be more effective at killing just human beings and not render the land unusable for generations, so victors can come in and make use of the land.

Although large scale wars, between large systems will be less common, there will continue to be insurgencies and low scale conflicts in many volatile regions that are not yet able to form effective large systems, as there is today.

But much of this is off topic in this thread, perhaps I will re-post some of these in the Large Systems thread where its more appropriate.


Edited by eventhorizon - 15 Jul 2011 at 17:41
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