Is There a Solution to Extreme Poverty?

Over the years different approaches have been developed in dealing with poverty in the Third World. Two basic development strategies have been developed to combat poverty. The first is the economic growth strategy, increase people’s standard of living through industrialization. Second is basic-needs strategy, which focuses on meeting the short term needs of people. Both methods have been attempted in fighting poverty. The economic growth strategy has been successfully employed in Asia with China being a recent example. The basic-needs strategy had been used throughout Africa with limited success. Hampered by civil and guerilla wars along with the death of millions by AIDS and malaria Africa seems unable to take the first basic step forward.

Jeffrey Sachs sets forth a basic-needs strategy in “Can Extreme Poverty be Eliminated?” Working with his colleagues at the U.N. Millenium Project a goal of halving extreme poverty by 2015 (compared to 1990) has been set. Sachs states that this can be accomplished if affluent nations would increase assistance to $160 billion per year. In comparing Africa to Asia, Sachs brings out the notable lack of flood plains in Africa compared to Asia but also the heavy burden Africa suffers because of tropical diseases. How should the money be spent? About one-half would be used for health and education. The majority of the remaining would be for infrastructure improvements within these nations. An example of the Millenium Project is the village of Sauri, Kenya. Over a five year period $2.75 million will be invested in this village. It is one of eleven that has been established (Rich 2007). The goal is to pour money into the village and see what happens. The infrastructure and agricultural sectors have benefited. Some of the critics point to the use of the money to support “clanism” and corruption including the reselling of supplies, by villagers, to neighboring communities (Rich 2007).

In “The Politics of Hunger” Paul Collier discusses the need to encourage large high-productivity farms to grow crops thus creating employment and a way to feed people. Using Brazil as a model he brings out how large “technologically sophisticated agricultural companies have demonstrated how successfully food can be mass-produced (Collier 2008).” Thus following the Brazilian model Africa would begin using mass produced cash crops to feed itself. Collier focuses upon three areas that Western nations must change to better combat hunger. The first is slaying the romantic populist delusion of peasant agricultural. The peasant farmer is ill prepared to cope with modern methods of a global economy. The second is war against genetically modified foods. Crops that could grow easier in the drier African climates are banned because Europe has banned the crops. The third is the subsidies of ethanol. This one act would help lower the price of food by lowering demand for the crops. (Collier 2008)

In “The Micromagic of Microcredit” we are introduced to an idea that was first developed by Nobel Laureates Muhammad Yunus, "for their efforts to create economic and social development from below.” (Nobel 2006) They have accomplished this through the use of microcredits. Microcredits are small loans given to people building their small business, enabling them to grow and increasing the savings of these people. In some areas these loans allow the borrowers to avoid the moneylenders who charge 200% interest. It also compliments Goal 3 of the U.N. Millenium Project which is to “promote gender equality and empower women” with almost 76 percent of microcredit customers being women. Private groups such as Kiva Loans and the Gates Foundation use this technique with more private groups coming online.

Each of these methods has a place in the fight against extreme poverty. All three of these methods understand that it is more than a food when it comes to poverty. Each talks about the need for creating jobs to put people to work. The objectives of the U.N. are more comprehensive in dealing with not only poverty but other issues that these poor nations feel, such as, disease, child mortality, education and environmental sustainability. The U.N. also talks about the need to empower women as does the concept of microcredit. Sachs is stressing the idea of pouring billions of dollars into the project and hope it sticks while Collier is pushing the free market as the means of achieving the goal. The use of microcredit, which empowers women, shows a steady trend of moving families out of poverty. (Nobel 2006)

In many ways these methods could be a complimentary to each other. Mass producing farms could be created in some of these nations. This would allow the production of food for many more people. It would require workers to tend the farms creating employment but whether enough to achieve low unemployment is in doubt. Mass farming versus the Millenium village is the difference between allowing the free market to function or spending billions of dollars on a program that, as has happened in the past, is here today but gone tomorrow as the next new idea comes along. These methods are also prone to corrupt governments that require a monitoring program to ensure the aid is going to correct sources. As have been shown in the past there is nothing to prevent the nationalization of the large farms causing concern with some nations. The U.N. method also seems to carry forward the romantic idea of the peasant farmer when major food production maybe needed.

The U.N and the large farms require that infrastructure improvements be made from roads and irrigation to mobile phones and disease prevention (Sachs 2006) The bright spot for the U.N. program is the adaption of the program to local needs where as large farms can only be used in geographies that would allow it. Collier also stresses the need to abandon the war on science and allow genetically modified foods that could grow in drier climates.

There are three economic perspectives that need to be viewed from these methods. The first is the Liberal Economics Perspective. This method stresses the need for privately designed methods to fight poverty. The ideas behind Collier would fit within this perspective; Private farming would be allowed to mass produce within the framework of large farms, this would create jobs and increased yield to the levels that modern technology could allow.

The Dependency Perspective says that the poor are depended upon others for aid. The continuous United Nations programs, such as the Millenium Project is an example of outside aid being used to help develop the area. The problem arises that when the aid stops will the positive effects continue or begin reversing.

Another view is the Participatory Development Perspective where locals are involved in the decision making process of how to improve their lives and what technology should be used. Microcredit fits within this framework by providing needed capital to local entrepreneurs which places the decision making at the local level where needs are known. (Kelleher 2006)

In looking over the various methods proposed to fight poverty the first question that needs to be asked is “what is causing the poverty?” For the way to fight poverty caused by war will be treated differently than if there is a lack of infrastructure; In war you are dealing with a refugee issue, while building an irrigation system may help a village achieve the ability to grow food in drought stricken areas. Another area mention by Sachs is the oversight and monitoring of aid due to past experience with corrupt governments. For areas that suffer extreme poverty the basic-needs strategy is needed. The goal is for people to achieve a minimum subsistence before moving into the economic growth strategy mode. After World War II the basic-needs strategy was used in Asia with great success. It provided a basic subsistence until the economic growth model could be allowed to work. In looking at the U.N Millenium Project I see a lack of follow up when the aid ends. The project consists of 11 villages in Africa that has received over the years with limited success. What is prevent these villages to revert back to destitution when the U.N. advisors and money leave.

Collier advocates large farming projects in these areas. As much as I like this idea I fear the corruption of these governments which could lead to nationalization and abandonment of these farms. I would begin this type of program if possible in those nations whose geography makes it possible. In looking at the different alternatives I find microcredit the most welcoming to use. Outside of education it has made the empowering of women a real possibility. It has allowed women to start or expand a business to better provide for her family and future.

Attempting to fight poverty is never an easy thing for the causes vary. It is never enough to just feed these people but also to bring in an education and jobs; for long term success there are three areas that look promising. The first is the growing trend in microcredit. As Grameen Bank has shown in Bangladesh by giving women the ability the move upward the whole family will benefit. (Nobel 2006) The other two areas involve private giving and migrant workers who send money back home. According to Holly Yeager migrant workers, in 2006; send back home $332 billion and private charity giving reached $34.8 billion. (Yeager)

Kelleher, Ann and Klein, Laura. Global Perspectives, A Handbook for Understanding Global Issues, 2006, Pearson Education

Sachs, Jeffrey D. 2005. “Can Extreme Poverty be Eliminated?” Scientific American, Sept 2005. p. 56-61

Collier, Paul. 2008. “The Politics of Hunger”. Foreign Affairs. November/December 2008

Boudreaux, Karol and Cowen, Tyler. 2008. “The Micromagic of Microcredit.” The Wilson Quarterly, Winter 2008

Rich, Sam. 2007. “Africa’s Village of Dreams” The Wilson Quarterly. Sept 2007

Yeager, Holly. 2008. “ The New Face of Global Giving” The Wilson Quarterly, Summer 2008

Yunus, Muhammad. http://nobelprize.org/nobel_prizes/peace/laureates/2006/index.html

Peace Jam Slam

The goal of Peace Jam is to program that encourages youth to “find their own path to peace.” As part of the program the youth make commitments for peace. This involves four areas of commitment. All of these areas involve a commitment to character development and the goal of building peace both within yourself and with those people in your life. The first is Peace Within, character focus approach to positive youth development. The second is to become a Peacemaker, the process of effective conflict resolution both locally and globally. The third is Justice, using the examples of Nobel Peace prize winners to show the youth how it can be done. And fourth was Civic Dialogue, learning the ability to listen to others viewpoints and reason together.

My role in Peace Jam Slam was a youth mentor. My function was as a facilitator whose role was to encourage the teenagers to discuss the topics they had been learning in school or church and help them communicate with each other. Peace Jam Slam was designed to break the day up from the opening ceremony to workshops and family groups. The night before I had planned some activities to get a discussion going but as I was walking out for the opening ceremony I was assigned to a new family group. So I basically went along with what the other mentor had planned. The activities involved getting the youth to discuss topics such as violence and see the diverse backgrounds they each come from.

The whole concept of Peace Jam is built upon the Global Call to Action on first an interpersonal level, then community level, national and finally world level. The Global Call to Action was developed by twelve Nobel Peace Laureates (including the Dalai Lama, Jody Williams and Desmond Tutu) who discussed the issues and came up with ten areas they felt needed immediate action. In many ways there exists a similarity to the U.N. Millenium Project. The difference is that The Global Call to Action works at a local level. As Tip O’Neil said, “All politics is local” so is the way to end extreme poverty, breaking the cycle of violence, halting the spread of global disease and empowering women.

Muhammad Yunus - Banker to the Poor

Awarded the Nobel Peace prize in 2006 along with Grameen Bank "for their efforts to create economic and social development from below" (Nobel). Beginning in the 1970’s Yunus began making personal loans to destitute basketweavers in Bangladesh. In 1983 he founded Gremeen Bank believing that credit is a fundamental human rights with the purpose of “help[ing] poor people escape from poverty by providing loans on terms suitable to them and by teaching them a few sound financial principles so they could help themselves.” (Nobel)

Born in 1940 in the seaport city of Chittagong, Bangladesh Yunus graduated from Vanderbilt University in 1969 with a PhD in Economics. He developed what has become known as micro-lending or microcredit. Fighting poverty through the use of microcredit has been Yunus’ goal. As he describes poverty, “Poverty is the absence of all human rights. The frustrations, hostility and anger generated by abject poverty cannot sustain peace in any society. For building stable peace we must find ways to provide opportunities for people to live decent lives.” (Nobel)

Grameen Bank has made 7 million loans to poor people in Bangladesh, 97% of which are women; As Yunus stated in his Nobel Lecture, “We focused on women because we found giving loans to women always brought more benefits to the family.” (Nobel)

The strategy used by microfinance is the economic growth model and Grameen Bank has shown that it offers the opportunity for people to move above the poverty line.

As Yunus said at his Nobel Lecture, "In a cumulative way the bank has given out loans totaling about US $6.0 billion. The repayment rate is 99%. Grameen Bank routinely makes profit. Financially, it is self-reliant and has not taken donor money since 1995. Deposits and own resources of Grameen Bank today amount to 143 per cent of all outstanding loans. According to Grameen Bank's internal survey, 58 per cent of our borrowers have crossed the poverty line."

Today the world is looking for ways to combat extreme poverty. Grameen Bank and Muhammed Yunus has shown a long term solution that offers opportunities to permanently raise people above the poverty line without becoming dependent upon outside aide. Groups like Kiva Loans have followed the example of Professor Yunus and has begun replacing the moneylenders.

Business Tax

Client Letter

Dear Mr. & Mrs. Johnson

Thank you again for requesting my advice concerning the tax treatment for your deferred exchange with Paul. I do have some bad news for you. You are required to recognize a gain on the exchange of your property.
In reaching this conclusion, I consulted the relevant Internal Revenue Code and related Judicial Rulings. The facts as I understand them are as follows:
You made an agreement between yourselves and Paul to engage in a 1031 Deferred Exchange. On July 1 you transferred title to a parcel of land with an adjusted basis of $20,000 and fair market value of $75,000 to Paul. The agreement required Paul to purchase and transfer title to you of a like-kind property within 180 days of July 1. On August 1, two parcels of land were identified that was acceptable to you, one near Dallas and another near Houston. Negotiations were begun by Paul with the owner of the Dallas property but no deal could be reached so he began negotiations with the Houston property owner. On January 1 Paul purchased the property and immediately transferred title to you.
Even though a good faith attempt was made to meet the required 180 day replacement period the IRS Code only allows 180 days from the original transfer of title for a like-kind exchange to occur. The reasoning behind this is to prevent an open transaction, with long term exchange periods, from occurring. After 180 days the exchange falls under Section 1001 requiring the recognition of a gain or loss on the exchange of property. Therefore you are required to recognize the gain on the exchange. My research did uncover a similar case to yours in that a “good faith attempt” was made to complete the exchange within the required time period but the court ruled that it did not meet the required replacement period (Knight v. Commissioner, 75 TCM 1992).
Please contact me if you have any further questions.

Memo to File

Client: Fran & Bob Johnson
Subject: Research Problem 19
For: Business Taxation
Research by: Paul Fisher
Date: November 10, 2008

Facts

Fran and Bob Johnson engaged in a 1031 deferred exchange with Paul on July 1 by transferring a parcel of land with an adjusted basis of $20,000 and a fair market value of $75,000. On August 1 two like-kind properties were identified, one near Dallas and the other near Houston, both were acceptable to the Johnson’s. Paul began negotiations with the Dallas property owner but was not able to reach a deal so it fell through. Negotiations began with the Houston property owner but it did not close until January 1. Paul immediately transferred title to the Johnson’s.

Issues

1. Did the like-kind exchange take place within the Identification and Replacement Period?
2. What are the tax consequences for the Johnson’s?

Conclusions

1. The identification period of 45 days was met. The replacement period was not met by the Johnson’s. The statutory period for like-kind exchanges are 180 days from the date of the Johnson’s transferred the property relinquished.
2. Because the 180 day replacement period was not met the property is considered unlike-kind and subject to IRC Section 1001 requiring that you recognize the entire amount of your gain on the exchange of your property.

Discussion of Reasoning and Authorities

1. Section 1031 deals with Exchange of Property held for Productive use or Investment. Section 1031 allows the like-kind exchange of property without the recognition of a gain or loss. Section 1031(a)(3) requires the identification period of replacement property be on or before 45 days from date the “taxpayer transfers the property relinquished in the exchange.” The replacement period is 180 days from the time time taxpayer transfers the property relinquished or “the due date (determined with regard to extension) for the transferor’s return of the tax imposed by this chapter for the taxable year in which the transfer of the relinquished property occurs.” Which ever is earlier, thus the 180 days applies.
In David A. and Marilyn P. Knight v. Commissioner (75 TCM 1992) the court ruled that even though a good faith attempt was made to exchange the property within the 180 day replacement period it does not entitle them to avoid the application of the plain language of IRC Sec. 1031.
2. Section 1031 provides for the “non-recognition of such gain or loss on ‘the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.’” Because the replacement period of 180 days has not been met IRC Sec. 1001 requires recognition of the entire amount of gain or loss on the exchange of property.

Future of American Foreign Policy

Today the United States is at a crossroads concerning foreign policy. We are currently fighting two wars in Afghanistan and Iraq with a possibility of starting a third with Iran. Presently we have two presidential candidates whose use of power would be quite different. Barack Obama tends to favor the use of soft power while John McCain favors the use of hard power. What future role will the American Empire play in the coming years? What role will the United States be able to play with mounting debt and the growing hesitation of foreign governments to continue to extent credit?

Concerning the Middle East the central question is how to achieve peace between Israel and her neighbors while continuing to look out for American interests? Is this goal achievable? Is present United States policy toward Israel, unconditional support, the reason behind the inability to reach peace?

Traditionally there have been three approaches to viewing foreign policy. The first is Idealism which stresses "consensus on values" that "underpin any stable political order. Thus an idealist would be concerned with human rights, humanitarianism and international justice as guiding principles of America's foreign policy. Liberalism is the second approach which focuses on cooperation with other "mature democracies" and institutions such as the United Nations. The third approach is Realism which stresses "self-interested states compete for power and security." (Snyder, 2004)
As the United States moves forward one of these traditions will move to the forefront. Idealism is "belief that foreign policy is and should be guided by ethical and legal standards." Centered on the premise that American foreign policy can be used to make the world a better place by shaping it to reflect those ideals. This is achieved through debates about ideas and values that are the "fundamental building blocks of international life." (Snyder 2004) Idealism depends upon transnational groups such as Human Rights Watch to expose violations of the accepted moral standards and values while the democracies would give support, at least verbally. For idealism the need for soft power, diplomacy and economic sanctions, would be the main course of action.

The Liberal school highlights the importance of spreading democracy worldwide. The classic example is Woodrow Wilson's League of Nations. Usually this is done with the help of mature democracies and international institutions such as the United Nations. As these new democracies emerge civil violence has erupted usually between competing ethnic groups who want self autonomy. Though once established democracies rarely wage war against each other but they tend to be "prone to launch messianic struggles against warlike authoritarian regimes," (Snyder 2004) as both Wilson and Bush II has shown. And if the election result does not favor the United States we will not recognize the newly elected government. When Hamas won election in Palestine the immediate reaction was not to legitimize the results because of their terrorist past. As with the world how do we push democracy upon these Middle Eastern nations without realizing that these "terrorist" groups are legitimate with the people of these nations?

The final approach is Realism. Realism focuses upon the power struggle that exists among self-interested states. Realism centers on the concept of achieving a balance of power among these states. Presently we have nations coming together to oppose the American hegemony such as China and Russia. A new balance of power has begun to be created. Another example are European powers, members of NATO, who to achieve a balance of power has begun using international institutions, like the United Nations and the World Trade Organization to counter the United States. Snyder mentions his organization, Coalition for a Realistic Foreign Policy whose stated principle is "the move toward empire must be halted immediately." (Snyder 2004)

When looking at history the Realism approach had been the guiding principle for our early foreign policy. In his farewell address George Washington warned us, "It is our true policy to steer clear of permanent alliances with any portion of the foreign world..." (http://www.earlyamerica.com/earlyamerica/milestones/farewell/) As Doug Bandow says, "Let us make John Quincy Adams' apt dictum the lodestar of our new foreign policy: America 'goes not abroad in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own.'" (http://acdalliance.org/)

Presently the United States has over $11 trillion of debt. Over $5 trillion has been created in the last 7 years. The United States has nearly 800 military bases overseas and spending $515 billion per year on military. We have become a nation depended upon China, Japan and oil rich countries to buy our ever growing debt. (Bandow 2008) Whichever foreign policy we decided upon it must be based on the use of soft power. Diplomacy and economic sanctions would be preferred methods in dealing with human rights violations or ethnocide, destruction of a culture. As an aside I am an isolationist who thinks we would be better off placing American interests first than work with transnational groups by using soft power to help people in need.

Over the past 7 years American policy in the Middle East has been one of hard power, using the military to achieve our goals. The coming years will hopefully change this to reflect a more soft power, economic sanctions and diplomacy, approach of dealing with nations. Using diplomacy Jimmy Carter was able to achieve peace between Israel and Egypt. Using soft power Israel and Jordan signed a peace treaty. As Stoessinger says about successful empires, “Empires in the past survived only so long as they understood that diplomacy backed by force was to be preferred to force alone.” (2008)

Bandow, Doug. Economic Collapse: The Financial Death of the US Empire. 2008. American Conservative Defense Alliance, Retrieved Oct 15, 2008. http://acdalliance.org/letters/10-11-2008-economic-collapse-financial-death-us-empire-doug-bandow
Snyder, Jack. One World, Rival Theories, Foreign Policy, November/December 2004
Kelleher, Ann & Laura Klein. Global Perspectives, 2006, Pearson Education.

Stoessinger, John G. Why Nations go to War, 2008, Thomson Wadsworth

Imperial Amnesia

Imperial Amnesia is a term used by John Judis (2004) to describe the American remembrance of past military adventures in foreign lands. Using the occupation of the Philippines following our victory against Spain in 1899 Judis (2004) outlines how the Unites States has rewritten the past to justify were we are today in our foreign policy. Comparing Judis’ article with Stoessinger’s Vietnam War essay, “A Greek Tragedy in Five Acts” I have used our special role American plays in transforming the world, the lack of understanding the concept of knowing your enemies before going to war and how politicians rewrite history for their own purposes.

“Americans have always believed they have a special role to play in transforming the world (Judis 2004).” As the Cold War was beginning to heat up and fearing the Soviet Union would take advantage of the anticolonial movements within Europe’s colonies the United States “sought to establish its own neo-imperial reign (Judis 2004)” in Asia. “Instead of permanently annexing the countries they conquered, after a period of suzerainty, [United States] would retain control by vetoing unfriendly governments and dominating the country’s economy (Judis 2004)”

In 1954 the French had been defeated by the Vietminh at Dien Bien Phu agreed to the Geneva Accords dividing Indochina into Vietnam, Laos and Cambodia and setting a time table for free elections in 1956. In 1954 the South East Asian Treaty Organization was created by the Unites States making South Vietnam an American protectorate, thus recognizing South Vietnam as a separate state. The United States believing Ho Chi Minh would win free elections supported the establishment of a vassal state; the Republic of Vietnam under the leadership of President Diem. In November 1963, Kennedy allow a coup to overthrow Diem, killing Diem and placing in power someone more the America’s liking. When Nixon took office he and Henry Kissinger developed the concept of “Vietnamization” of the war. It would involve the withdrawal of American forces from Vietnam to be replaced by South Vietnamese forces with a “friendly government firmly in Saigon (Stoessinger 2008).”

American foreign policy has a long history of not understanding our enemy. Judis (2008) discusses the Neoconservative agenda and their miscalculation of the nationalist sediments within the different groups. American thought we would be welcomed with flowers but instead we energized those nationalist feelings. This same attitude prevailed as we began empire building with our war in the Philippines and Judis (2004) also shows this lack of understanding in Iraq about the motivation of the enemy. Sun Tzu in the Art of War said, “Know thy enemies” which generally was absent during the entire Vietnam conflict. After the end of WWII the French were fighting a colonial war in Indochina against Ho Chi Minh the US was at first opposed to the French because Truman saw it as a return of French power to the area. By 1948 China became an “active theater of the Cold War” (Stoessinger 2008) the United States began to see the French as “defenders of the west” (Stoessinger 2008). Ho Chi Minh who had been describe by an OSS officer as an “awfully sweet guy whose quality was his gentleness” (Stoessinger 2008) was now seen as part of the international Communist threat. Throughout the conflict American politicians would never come to grips that the main motivation of Ho Chi Minh was nationalism with communism taking second place. Ho Chi Minh’s goal was to drive out the imperial powers and achieve national independence.

During Kennedy’s administration a study was done by two European experts, Asian experts were considered security risks since the days of Joseph McCarthy (Stoessinger 2008). Rostow-Taylor concluded that the growing conflict in Vietnam was similar to the conventional war we had fought in Korea instead of a political struggle with the Vietminh, using guerilla warfare tactics. The one idea that is seen throughout Stoessinger (2008) is that the United States never looked at the Vietnam question from the viewpoint of the Vietnamese.

John Judis (2004) states, “Politicians often rewrite history to their own purposes.” As the Cold War with the Soviets began to shape American foreign policy our language toward Ho changed. The United States’ “perceptual grid of Cold War categories was… superimposed on the older conflict in Indochina (Stoessinger 2008).” As the United States escalated the war so did the Vietnamese in response. The Chinese would only give enough aide to bring a balance to the war. In early 1965 the United States began reprisal bombings against the North. When asked by Emmett John Hughes, “what he would do if the North Vietnamese retaliated by matching American air escalation with their own ground Escalation.” McGovern Bundy (Johnson aide) replied, “We can’t assume what we don’t believe.” (Stoessinger 2008)

President Kennedy made a prophetic comment, “In the last analysis, it is their war; it is they who must win it or lose it (Stoessinger 2008).” In the end South Vietnam made the decision. As today we see in Afghanistan and Iraq it belongs to those people whether their nations will win or lose. John Judis suggests that in order to transform the world we need to adopt Wilson’s vision of global democracy multilaterally. But isn’t that just replacing one from of imperialism with another form. Who will determine who the nations are we would punish. At present China does not to care about democracy so do we make them an enemy? As is being shown in Afghanistan multilateralism will only work when there is little price to pay among the partners. As NATO members have begun to suffer causalities the desire for transforming Afghanistan has lessened. Wilson’s vision involved to “dismantle the structure of imperialism” (Judis 2004) based upon the European powers abdicating imperialism. In today’s world the only nation using imperial tactics is the United States. In ways Europe has replaced the United States by not looking overseas for monsters to destroy.

References

Stoessinger, John G. 2008. Why Nations Go to War. Belmont, CA. Thomson Higher Education

Judis, John B. 2004. Imperial Amnesia. Foreign Policy July/August 2004

Iraq

I read an interesting article today comparing the Iraq War with the US occupation of the Philippines after the Spanish War. The article appeared in Foreign Policy in 2004 called Imperial Amnesia by John Judis. It showed the parallels not with Vietnam but how we destroyed the Filipino population bringing them to their knees by killing 200,000. We used 120,000 troops and over 4.000 died. Americans suffer from very short term memory while the world has long memories. The hatred that existed in Iraq before the US invasion was opened with the invasion.

Americans wake up to history. Turn off the TV's and learn something for once. The United States has always been a horrible at nation building but we never seem to remember this from generation to generation. We failed in Vietnam and we will fail in Iraq and Afghanistan. Call the troops home and start looking at our commitments overseas. Remember John Quincy Adams remark about we don't go overseas looking for monsters to destroy. Learn to live as a Republic again instead of an Empire.

Electric Bill

I have questions about my Excel Energy bill. What are these charges?

Here is the breakdown:
Energy Charge Summer
Environment Imprvmt Rider
Fuel Cost Charge
Resource Adjustment

I hate environmentalist as a top priority and it is only going to get worse in this country as we elect either another fascist or a communist. The end is near for the American Empire, may it die quickly.

Swine Not

I just finished a fun novel by Jimmy Buffet called "Swine Not." In the usual fashion of Jimmy this novel is fun loving and an enjoyable read. The book has narrative from two characters, Barley a young twin boy from Vertigo Tennessee and the pig named Rumpy. The pig and family end up in New York City when Mom accepts a job as a pastry chef at a fancy restaurant. Enjoy this book and read this book. It is light hearted fun.

Georgia

I heard Condi Rice talk tough against Russia today. Are we willing to go to war against Russia over a nation like Georgia? I concluded sometime ago that the leadership in the United States is insane. Now understand I don't just mean the President and his Republican hacks but also the Democrats along with their band of twits. I could also toss in the batch of religious leaders who are the purveyors of a twisted gospel. There was once a time when Americans cheered when our leaders told us we would not get involved in foreign entanglements. I long for that day to return.

Power of Envy

Envy is “a feeling of discontent or covetousness with regard to another's advantages, success, possessions, etc.”[1] Envy has been the major driving force behind why some tribes have prospered while others have remained primitive. When a group refuses to allow people to advance beyond the rest of the tribe envy exists. Envy says that if I can’t have it then neither can you. The envious person would rather see something destroyed so no one can have rather than anyone having it. I like what an article in the Wall Street Journal brings out “Do Americans Have Wealth Envy?” I think with the rise of Obama we are reverting back to those days of business versus labor aspect of society. The us against them mentality that existed for many years in this country.

My question is how do you balance the needs of the worker with the needs of business without making workers indentured servants to these companies. Prior to the Great Depression common laborers were treated poorly by business. Charles Darwin reigned supreme in business. Today without government involvement would they continue survival of the fittest still reign. History has shown man is capable to commit great evil against their fellow man. Why would anything be different since Carnegie treated his workers like dung.

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[1] http://dictionary.reference.com/browse/envy

The Autobiography of Ben Franklin

I have been listening to an audio version of Ben Franklin’s Autobiography and have realized something. Over the years “success” books have come out being the “newest” thing in self improvement. I have tended to see them as rip-offs of Napoleon Hill’s material. After listening to Franklin I have concluded it is a vicious cycle in plagiarism. There is nothing new under the sun. The Success Movement started with Benjamin Franklin and continues to this day. I sad part is the modern church is also a product of Franklin’s Religion of Virtue. If you live good enough you will be accepted by God. I hear so many TV preachers talk about self improvement – if you confess the word just right or do this or do that and you will have blessings from God. The blessing of God are based upon His grace. I like Franklin’s ideas but I don’t use them to attempt to earn God’s favor.

We need to begin focusing upon the relationship aspect of the Gospel. I belonged to a club for 17 years were every week it was about how to get stuff from God. If the minister in charge ever talked about relationships it was just plain bad. He to this day doesn’t understand relationships and his whole message is based upon Napoleon Hill and Kenneth Hagin though he calls it the Gospel. I have enjoyed the Hagin’s teaching over the years but today I understand that isn’t the whole Gospel. When I listen to the “Faith” teachers on TV it is insanity. These people have made a quite a living off the gospel. Whatever happened to teaching about saving money as Malachi instructs. I will fill your barns, investments, with plenty and your presses, work, will burst forth with new wine. I suppose in away Franklin taught the importance of saving for the future. On a national level the question is, how can a nation build for the future without savings to buy the capital goods?

Why did the BJP Party Lose?

What were the reasons that the 380 million Indians voted out the Bharatiya Janata Party and elected the Congress Party led by Italian born Sonia Gandhi? During the campaign the BPJ focused on a pro-Hindu religious message along with the strong growth of the economy. According to the Guardian, my personal paper of record, the BJP highlighted the “8% growth, increased development and a surge in high tech industries” (AP). The problem that exists outside the developed areas, Bangalore, is poverty. As Lalita Law tells Friedman “alcoholism if rife and female infanticide and crime are rising” (Friedman, p.539).

The strategy of the Gandhi led Congress party was to focus on the 300 million extreme poor within India who are not benefiting from the economic growth. The Congress party focused on lack of basic infrastructure, electricity and water access for the rural poor. According to political columnist and member of the upper house Kuldip Nayar, “This is a verdict against globalization. Now the next government will have to think how to employ more hands, than machines” (AP)

If you listen to Nayar the vote was against globalization but really it was because the globalization is occurring at a slower pace than desired. The idea of Hindu nationalism used by the BJP was defeated for a more secular form of government. Thus both sides were correct though I saw nothing about environmental issues being part of the issues unless you look at basic infrastructure. One side note, 48 people were killed in election violence down from the 1999 election.

India’s Ruler Concedes Defeat, Associated Press, Guardian, Thursday May 13 2004, http://www.guardian.co.uk/world/2004/may/13/india2

China's Cultural Revolution

Following the genocide from starvation caused by Mao's Great Leap Forward Mao decided he was losing a grip on power inside China. In 1966 using the student population Mao began the Cultural Revolution. Mao's stated goal was to reignited the revolution. Actually, Mao's goal was to rid himself of what he termed the "privileged class" This class consisted of engineers, scientists and anyone else Mao considered a rival. Sounds more like an attack on the middle class that had developed and where enjoying their status.

There are three phases of the CR the needs to be discussed.

The Activist Phase from 1966-68. It was during this time period that Mao purged his enemies. During this time two sides developed. The first was led by Lin Biao and support by the PLA and the other side was led by Deng Xiaoping and the party machine. Mao sided with the PLA and used the students (Red Guard) to destroy outdated symbols and values. These phases would continue until a border clash with the Soviet Union in March 1969.

The second phase with the 9th National Party Congress. With the Maoist in control the rebuilding of the party machine and economic stabilization became priorities. Pragmatism replaced idealism as the central theme. In 1971 Lin Bao attempted a coup that failed and died in a plane crash fleeing China. This led to a purging of all Lin Bao supporters.

The final phase started with Deng Xiaoping becoming vice premier in 1973 until Mao's death in 1976. It was been estimated that between 2-7 million people died during the CR, most during the Activist Phase. (Poon)

I understand that there is presently political discussion inside China about the effects of the CR. Some have used it as a rejection of revolution and Maoism while others are showing more nostalgic toward it.

Poon, Leon. Home Page. 6 August, 2008. http://www-chaos.umd.edu/history/welcome.html

Authoritarian Governments

Is democracy a requirement for a Capitalism to flourish? I think a good example of an authoritarian government that created a successful Capitalist system would be Chile. Chile elected a socialist Allende who was overthrown by a CIA led coup by General Pinochet. Over the next 17 years Pinochet allowed a free market economy using the teachings of Milton Friedman. Even after Pinochet returned power to democratic rule the government has not reversed many of his reforms.

Another example comes to mind would be Great Britain who after World War II adopted a socialist form of government. It became know as the “British Disease” (Boyson). British productivity by the 1970’s had fallen behind the rest of Western Europe by 30-40% while inflation for the period of 1972-77 was 120% (Boyson). It was only after the reforms of Margaret Thatcher that the economy began to recover.

Democracy is a messy business with people having the ability to vote themselves programs and authoritarian regimes have created market economies. I think the question becomes can a nation like China sustain a market economy over the long haul? I can think of no regime that has been both authoritarian and capitalist over the long run. I guess one question I would like answered is how can a nation whose political system requires centralized planning, China is communist, allow the long term growth of a free market system without giving up its political power?

Boyson, Sir Rhodes and Antonia Martino. What We Can Learn from Margaret Thatcher, The Heritage Foundation. November 24, 1999,
http://www.heritage.org/Research/PoliticalPhilosophy/HL650.cfm

Conservatism - Death by self inflicted gun shoot

When did the Conservative Movement die? I have thought about this recently watching the election. In 1994 the Conservative movement was at their heights and within 10 years the collapsed had occurred. The only thing I can say is happiness is the death of false politics. Conservativism had died many years before when it allowed men like Ann Coulter, Sean Hannity and Rush Limbaugh take control and destroy the movement. It moved from an idea generating machine to a hate mongering machine. Ideas are not Hannity's strong point. Every time I see Hannity I realize what Jesus had to deal with with the Pharisees.

Liberal Media Bias

Once again I am hearing those on the Right complain about the Media favoring Obama. I have heard since I was a kid that the MSM was liberal. Who cares. I heard today the NYTimes profits are down 82% and the Evening News the viewers are dying faster every day. I understand talk shows need fonder to talk about. But come on. Get over it people. Get a life. You have unlimited media access with the internet. Seriously why would anyone watch either Chris Matthews or Sean Hannity. Both are blowhards who love to hear themselves talk. Take a little time and read the online newspapers from around the world. See what is happening in Africa or Asia. Maybe even South America. I know this will be tough for people who live inside the United States because the world revolves around you but try.

College Educated Workers

Thomas Friedman states that college educated workers grew through the 1980’s. What has happened since 1993 according to the National Science Foundation has been a 40% increase of college graduates, reaching over 40 million in 2003 up from 29 million. Of those 40 million about 12% have their degrees in science or engineering. Listening to the media I thought the world was coming to an end and America was getting dumber. During this time period the population of the United States population has grown from 257.7 million to over 300 million (NPG). According to The Olympian “in February 2005, USA Today reported that 64 percent of high school graduates go to college, but the number of Americans with bachelor degrees is only 29 percent.” (Yamamoto) I understand this because I like many Metro State students have returned to school to finish my degree.

According to the National Bureau of Economic Research since 1980 the supply of college graduates have been growing at a rate of 2% while the demand as been averaging “3.27 to 3.66 percent per year.” This has allowed the wage premium that college grads have enjoyed over high school grads. High schools grads also face increase competition from immigrants. The average American wage has increase from $21,027.98 in 1990 to $38,651.41 in 2006. A debate is raging over whether real income has been keeping pace with inflation as the real inflation has come under scrutiny. Official inflation does not include food and fuel. In researching this item I came across this item on Business Week online, “Real College Grad Wages Plummet 5.5%” for the second quarter of 2008, wages adjusted for inflation (Mandel).

2003 College Graduates in the U.S. Workforce: A Profile. National Science Foundation, http://www.nsf.gov/statistics/infbrief/nsf06304/

Negative Population Growth http://www.npg.org/facts/us_historical_pops.htm

Yamamoto, Julie. Only 29 percent of Americans have a college degree
http://www.theolympian.com/columnists/story/227366.html

National Bureau of Economic Research (NBER). The Rise and Fall of the College Graduate Wage Premium. http://www.nber.org/digest/jan08/w12984.html

Social Security Administration. National Average Wage Index
http://www.ssa.gov/OACT/COLA/AWI.html

Mandel, Michael. Real College Grad Wages Plummet 5.5%. Business Week
http://www.businessweek.com/the_thread/economicsunbound/archives/2008/07/college_grad_wa.html

China and America's Debt

Thomas Friedman comments in his book (The World is Flat, p.143) that the savings from cheap Chinese imports has “helped the Federal Reserve to hold down interest rates longer” thus allowing Americans to buy homes or refinance, using their homes as ATM machines to buy more toys. As I write this CNN Money online has a headline about the possible collapse of Fannie Mae and Freddie Mac called, “The $5 Trillion Mess”(Benner, title) What the Federal Reserve has done is to artificially lower interest rates below free market rates by manipulation of the currency. This helped to create the housing (credit) bubble that has been in the news. .

Friedman also says that Morgan Stanley estimates Americans have saved $600 billion by buying cheap imports. The analytical group Bridgewater Associates now estimates bank losses worldwide from the credit crisis to total $1.6 trillion. The United States have been running a trade deficit with China that currently is over $1.4 trillion. “In effect, every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China” (Fallow).

Because of the cheap interest rates Total U.S. Consumer Debt has grown from $1.69 trillion in the first quarter of 2000 to the most current numbers of $2.56 trillion in May 2008. Mortgage debt outstanding at the beginning of 2000 stood at about $6.9 trillion and today it stands at $14.7 trillion. Federal Debt has climbed to $9.2 trillion from$6.8 trillion. (Federal Reserve) China currently holds over $1 trillion of this debt. There has been talk of bailing out Fannie Mae and Freddie Mac of late. China presently holds $376 billion dollars in these company’s bonds that are subject to US government bailout (Shedlock), so much for the American taxpayer saving from cheap Chinese imports.

Federal Reserve Bank (2008). Statistical Supplement to the Federal Reserve Bulletin.
http://www.federalreserve.gov/pubs/supplement/2008/05/200805StatSup.pdf
http://www.federalreserve.gov/pubs/supplement/2004/01/200401StatSup.pdf

Shedlock, Michael. (2008). U.S. Taxpayer Bailout of China over Fannie Mae, July 11, 2008.
http://www.globalstrategywatch.com/independent-insight/85886366ea7628c1b9fc317567dd54e5/

Fallows, James. (2008). The $1.4 Trillion Dollar Question, The Atlantic Monthly, Jan/Feb 2008.

Benner, Katie. (2008). The $5 trillion mess, Fortune, July 12, 2008. Retrieved July 13, 2008.
http://money.cnn.com/2008/07/11/news/economy/fannie_freddie.fortune/index.htm?postversion=2008071209

Mauldin, John. (July 11, 2008). $1.6 Trillion and Counting, Thoughts from the Frontline. Electronic Mailing List

Reason I Left

Once upon a time there was this group of people who would meet. This group was lead by a self-professed “anointed” leader. The leader taught this class every week and talked about spiritual things. The beginning of the group was filled with many people but over time the group became smaller and smaller. Why? You see the leader would decide that people needed to be cleansed from the group so he would drive these people out. Being one of immaturity the “leader” would throw a temper tantrum and give the person the “cold shoulder.” For those not familiar with the cold shoulder it is ignoring a person to punish that person. Over the years the leader would treat people in this manner.

There joined to this group a young man who lacked knowledge of spiritual things and for many years this young man continued in this group. At times the man would disagree with the leader but mostly kept it to himself because he desired the friendship of the leader. On those rare occasion when the man talked about the disagreements with the leader the cold shoulder method of punishment was handed down. So this taught the man to keep things to himself even when he thought the leader was just plain wrong.

Well one day it happened, the man (after many years of bondage) was talking to the leader who was bloviating about something he had heard. The man went home and got to thinking about what the leader had said. The man foolishly decided to send his thoughts to the leader. The thoughts had helped the man in the past so he foolishly thought the leader would want to discuss these thoughts with him.

The man, who had learned much about freedom in Christ and is learning the love of Father, once again experienced the temper tantrum of anger, from the stand, and the cold shoulder of this leader. Why would this leader or any leader do this? Insecurity. Immaturity. The man had mistakenly written the note with the hope of starting a conversation with the leader. Foolish man he had not learned yet that self appointed religious leaders don’t care what you think even if you golf with him. The leader is only in love with himself and his self appointed “anointing.”

The man decided it was time to leave the group. What was different this time with the man? In times past the man would have kept quite until it blew over. Suffering under the leader's self appointed “anointing” and the cold shoulder of punishment. The change was the man had discovered that God loves him and desires an intimate relationship with him and that Father does not give “leadership” permission to treat his children in any way but love.

Let it be said the man does not hate this leader but still loves him and in many ways feels sorry for this leader for the leader judges people based upon them accepting his self appointed "anointing" and self created religious system.

Murray Rothbard at his best:

The basic root of the controversy over slavery to secession, in my opinion, was the aggressive, expansionist aims of the Southern "slavocracy." Very few Northerners proposed to abolish slavery in the Southern states by aggressive war; the objection – and certainly a proper one – was to the attempt of the Southern slavocracy to extend the slave system to the Western territories. The apologia that the Southerners feared that eventually they might be outnumbered and that federal abolition might ensue is no excuse; it is the age-old alibi for "preventive war." Not only did the expansionist aim of the slavocracy to protect slavery by federal fiat in the territories as "property" aim to foist the immoral system of slavery on Western territories; it even violated the principles of states' rights to which the South was supposedly devoted – and which would logically have led to a "popular sovereignty" doctrine.

Murray Rothbard
http://www.lewrockwell.com/rothbard/rothbard175.html