#The 2008 Financial Crisis: A Global Wake-Up Call | Explore Tumblr Posts and Blogs

antoine-roquentin · 4 years

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In 1807, Heinrich von Kleist published a short story called The Earthquake in Chile. Its heroes are a man sitting in prison and a woman in a convent, each confined for the crime of conceiving their child out of wedlock. All of a sudden, an earthquake hits, the buildings that house them collapse, and the couple rediscover each other in the wreckage. Seeking shelter in the woods, they meet people who know of their sin but welcome rather than judge them. In the flush of the emergency, all is transformed: “Instead of the usual trivial tea-table gossip about the ways of the world, everyone was now telling stories of extraordinary heroic deeds.” Exhilarated, the couple follows the masses to the only remaining cathedral, where to their horror, the preacher rages against their transgressions. At the climax of the sermon, the crowd identifies the pair and clubs them to death. The inverted world is gone as soon as it came.

As the Covid-19 contagion passed through China, Western Europe, and the United States, we had our own version of the earthquake. Lockdowns have merged with uncertainty about economic growth to crater oil prices and spike unemployment rates to heights with no historical comparison.

As has become routine during such shocks—from the 1997 Asian Financial Crisis to the Global Financial Crisis in 2008 to the victories of Trump and Brexit in 2016—the rumor ricocheted through the op-eds and articles, think pieces, and tweets, that neoliberalism was dead.

How could anyone claim that markets were the solution to all social problems when it was the countries with strong states and safety nets—Germany, South Korea, Taiwan—where the virus was under control and those with a libertarian streak—the US and the UK—where leaders hesitated to intervene and let different parts of the country outbid each other for life-saving ventilators, test kits, and face masks? Daily applause for frontline health care workers must mean new value for the agents of social reproduction. Generous tips for delivery drivers and gestures of solidarity with Amazon warehouse workers must mean a clear-eyed look at the underpaid labor that makes modern life so frictionless. Visions of blue sky over Delhi and Beijing, air pollution indices registering green in the center of Los Angeles, companies paying people to take barrels of oil they no longer wanted… Surely, after the pandemic we would recognize we had been living in a cursed world and this is the correct one. Humanity had an unearned chance for redemption.

But if we were the couple in the story taking refuge in the woods, we are all now streaming into the cathedral for the fateful service. In the past weeks, a $2 trillion rescue package breezed through US Congress that will overwhelmingly benefit large corporations and the super rich, not ordinary workers. Speculation of a bailout for the US oil sector will surely keep high-carbon capitalism churning onward, especially as the Environmental Protection Agency has lifted regulations for the duration of the crisis. In Canada, the premier of Alberta pledged $7 billion for its own cherished pipeline project. The value of nurses and other health care workers has been recognized in the United States, but only in the sense that they are one of the few exceptions in a presidential executive order that otherwise provisionally banned all immigration to the country.

America has found its own sin-drenched couple to turn on. This week a strategy memo urged Republican candidates to “Attack China.” More than half of Americans surveyed want reparations from China for the virus; the United States has defunded the World Health Organization in protest against its supposed subordination to the country; and the state of Missouri has sued the People’s Republic of China (and a string of associated institutions) in a domestic court. A Fox News commentator beloved by the president shouted that politicians must “start working on how you’re going to punish, ostracize, alienate, and financially sanction and make China accountable for what they did to us and the rest of the world.” A fragile unity will be restored—as it so often is—by targeting the outsider, the alien, the nonwhite person.

Without intervention, the community after the earthquake reconstitutes the one that preceded it. The interregnum extends only if there are social formations to carry it. And right now, the streets are empty, with would-be marchers self-distancing and juggling children and babies.

The leading mainstream political opponent to Trump is an elderly man in a Delaware basement with a habit of vanishing from the public eye for long stretches of time. Joe Biden was the safety candidate against an insurgent Bernie Sanders. He now sits in a bunker with no movement behind him.

We have seen a world where capitalism stops. But it will start again. When America “reopens,” it will be much like the old America. Big companies will be bigger, ever more beholden to the leader for having saved them. Arguments for austerity will return in the wake of the unprecedented spending.

The “thought leaders” in Trump’s recently announced Great American Economic Revival Industry Groups are all from the “free market” think tanks that have advised the GOP since the days of Ronald Reagan—Heritage Foundation, Cato Institute, Hoover Institution, American Legislative Exchange Council—they’re the priests arriving to give their sermon. The church of neoliberalism will be rebuilt and the flash of paradise in the emergency snuffed out.

For the real story, look up. Above the steeple, the vultures are circling. The Wall Street Journal predicts a wave of defaults, bankruptcies, and restructurings. Imperiled companies will see their devalued stock scooped by so-called distressed debt specialists, more commonly known as vulture investors, who make use of the generosities of US Chapter 11 law to strip employees of benefits or offload them to the state before flipping their acquisitions at a profit.

A pioneer in vulture investing and now the commerce secretary, Wilbur Ross praised bankruptcy in 2003 as “the corporate form of Darwinism.” Howard Marks, director of investment fund Oaktree Capital Management, was even more graphic in a recent letter to shareholders quoted in The Wall Street Journal. “Capitalism without bankruptcy is like Catholicism without hell,” he wrote, suggesting that federal bailouts shouldn’t shield market actors from “a healthy fear of loss.” He failed to add that people like himself have learned how to monetize the flames. His own Oaktree Capital Fund is reportedly raising “$15 billion for what would be the biggest-ever distressed-debt fund.”

The next year will be a litany of the “workouts and turnarounds” that bankruptcy specialists are known for, ruthlessly wringing the value out of companies, while ignoring the human or social costs. Distressed debt funds are the loan sharks of the business world, and will feel no compunction about pursuing the bottom line. We have seen a preview of such dispassionate calculation in the last month, as stock values soared alongside record unemployment numbers and mounting deaths. The combination seemed shocking to some people, even scandalous. “The stock market doesn’t care about your feelings,” was the response of a Los Angeles Times business reporter, “nor should it.”

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disembodiedapparition · 4 years

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Neoliberalism: explained

Neoliberalism is a concept that has largely shaped the world we live in today. First popularized in the 1980s by world leaders like Ronald Reagan and Margaret Thatcher, it was the successor to the Keynesian economic system that most developed nations had adopted post World War 2. However, for a system as influential as it is, there’s still a great deal of confusion about what it really stands for and whether it’s ideal for a strong economy or not.

Neoliberalism is a school of thought that believes that every human interaction is driven by greed. In other words, people’s actions, relationships, and choices are all motivated by what that person might gain economically from them. Neoliberalism argues that self-interest is the driving force for any economy and for human progress as a whole, and that it should be encouraged rather than treated as a vice. It also posits that the competition an individual may face while propelling their self-interests would only encourage them to work harder and produce a product or service that meets a much higher standard. Without adequate competition, people are less motivated to do the very best they can – their consumers simply have no alternative to buy from.

Although this particular school of thought is often referred to as “capitalism”, it’s important to remember that by definition, a capitalist system is simply a system that aims to acquire capital, or profit. Neoliberalism, the system that many developed countries still incorporate into their economic systems today, is a type of capitalism – it promotes economic gain by increasing market competition and advocating for more privatized industries over public (government owned) ones.

The term “neoliberalism” in today’s context can be a little confusing, especially since the word “liberal” is commonly associated with civil rights and social equality advocacy (the ideals that these movements revolve around actually support government run industries and propose a tilt of the current economic model towards socialism). However, the “liberalism” that the term originated from referred to economic liberation – that is, a transfer of economic power from the government to individuals. It was popularized in the 19th century, and has dominated the global economy ever since.

After the Cold War, the people were largely turned off by capitalism. The economic crises and recessions of the 1920-30s were fresh in mind, and it was clear that a new system, that would prevent the economy from crashing periodically, had to be drawn up. Robert Dahl and Charles Lindblom concluded that “both socialism and capitalism [were] dead”, and the Keynesian economic system subsequently adopted a blend of the two – it recognized the importance of market competition and individual economic liberty, while also implementing policy interventions aimed to curb the inherent flaws in capitalism that so often resulted in financial breakdowns, depressions, or mass unemployment epidemics. This system soon began rising in popularity in previously neoliberal nations, and for good reason. Their economies were booming, and growing at consistent rates.

However, in the early 1970s, the Keynesian system started to see another recession coming its way. The reasons for this recession were external and had little to do with the economic model being followed, but the economic elites who previously profited off capitalism began panicking, worried that their wealth may be in danger. The elites understood that a compromise was necessary following the devastating impacts of the war, and they were willing to share their wealth with the masses. However, once they felt that this wealth was in danger, they began advocating reverting to the old capitalist system – marketed to the people as a new one called neoliberalism.

The idea posited by Keynesian economists that government regulation was necessary to keep big industries in check, avoid future economic breakdowns, and protect the interests of the environment, the society, and every individual was rebranded as an overextension of power and an attack on individual liberties. It’s also important to note that during this time, the anti- Vietnam war crowd was also resentful of the restrictions that were placed on behavior and thought, and the way that government mandated controls were being implemented all over the country. This greatly contributed to the rhetoric that government intervention was bad and needed to be shut down.

All of this was only talk, however, until neoliberal leaders like Thatcher and Reagan were elected into office. They each began reforming their respective governments – loosening regulations on industries, de-centralizing certain industries (like telecommunication or energy production), and cutting down taxes on the people, mainly the economic elites. By the time Reagan was out of office, the highest tax that an individual in the U.S could pay dropped from 70% to 28%. The rationale was that the wealthiest people in society, when taxed less by the government, would use their wealth to make larger investments that would, in turn, lead to astronomical economic growth which would benefit everyone. This proposed chain of events is often called the trickle- down economic theory, and is still referenced today (U.S. President Donald Trump used it to justify his tax cuts on the wealthy).

However, as Owen Zidar has recently shown in a research study published in the Journal of Political Economy, the assumption that the wealthy would use saved tax dollars to create jobs, foster economic growth, or bridge the gap between the rich and poor is a fallacy. Instead, he found that they are actually more likely to simply hoard their wealth. The U.S, which currently taxes its billionaires at a rate of 23% (while the average tax rate for the public is 28%), is one of the best examples of the massive wealth inequalities triggered by relying on trickle-down economics – as of 2013, the top 10% possessed 76% of the country’s wealth, while the bottom 50% only possessed 1%. Back when the ultra-rich were taxed heavily, the government implemented welfare programs which sought to stabilize this gap, but neoliberal economic policies provided a way for the wealthy to keep national wealth all to themselves – which doesn’t promote economic growth at all.

Today, neoliberalism’s biggest advocates are right wing or conservative parties, although the term itself might indicate otherwise. However, not many openly identify with the label, as it’s gained a bad reputation because of leaders like Pinochet, the former President of Chile. Although Chile’s economy did much better than her Latin American counterparts and she experienced a sharp decrease in poverty levels, the rampant inequality that neoliberalism inevitably triggered led to a divide between the business/political elite and the people of Chile, sparking nationwide protests and a call for more public provisions and greater taxes on the wealthy. However, the ideas of unregulated industries, privatized businesses, and minimal government interference are still hugely popular. Countries like the U.S, which were founded on individualist over monarchial government systems, often claim that the free market capitalism that neoliberalism champions is one of the core values of the nation, and cannot be compromised on.

Not only has neoliberalism led to an increase in wealth and income inequality, but it has also stripped power away from governments and given it to powerful and wealthy multinational companies. For example, the way that governments were forced to immediately fold and bail the banks out in the wake of the financial crisis of 2008, and the inability of governments to prevent social media platforms from infringing on the integrity of their own elections - or even force them to attempt to do so. Governments are becoming increasingly powerless in comparison to the ultra-rich. Ironically, even though neoliberal ideals acknowledge that the government still plays a small role in the economy, the nature of the system enables large corporations to accumulate enough wealth and power to influence the few decisions that the government actually gets to make. For example, a corporation that is essentially a pillar of the economy – providing millions of jobs and paying a large percent of the tax the government receives from its people – could threaten to relocate to a different country if they don’t comply with their demands.

Neoliberalism is a very unique system of organizing society. It’s played a massive role in shaping the world we live in today, and even though the label has been defamed, the ideas that propelled the revolution are still highly popular today. Today, political parties remain conflicted over whether Keynesian or Neoliberal economics are the best way to minimize adversity and maximize economic growth. David Harvey has classified neoliberalism as “a project to achieve the restoration of class power”, and unfortunately, this holds true. Decades of neoliberal reforms have stacked the odds increasingly in favor of the ultra-rich and the billionaires, and have dug the economic lower and middle classes further into poverty and debt. In addition, the idea has changed the way we think about the world, and invited us to view society as a market, where every interaction is made out of self-interest, and where economic gain is the only kind of gain you could ever hope to make in your lifetime.

“Neoliberalism is the flood that raises those who can afford ships and drowns those who cannot.”

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freethoughtforall · 4 years

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Geopolitical Move of the CCP

Prelude and Disclaimers:

I am not a Scientist or Political Analyst, nor do I claim to be an expert in any field related to any of the following areas noted. I do not support nor intend to promote Xenophobia, racism, or acts of violence or hatred toward any group of people. This is merely a postulation, a pondering of thoughts. There are facts, theory, conjecture, and opinion intertwined here. Some of the sites and documents used to create some of the theory are mysteriously no longer available, my links go to unavailable sites, pages, and documents. What was available several weeks ago when I started taking notes is no longer available. So do your own research and make your own opinions.

I merely suggest that this is perhaps, not entirely random. While worldwide pandemics are known, this particular one came at a convenient time in the geopolitical environment. Know also that no government is absolute, all great governments and empires in the past have fallen or shrunk to a less formidable position. Examples: The Great Roman Empire ruled for 2026 years, The British Empire in its hey day lasted 394 years and reduced to its current size, and many others either empires or large nation states. They fall for many reasons, internal revolt and dissension, external attack from a rising power, or geopolitical changes. One thing is certain, world power changes. There is no guarantee.

Presently the United States has been the major world power for a good many years. Our currency, military, and world reach have been the major influencers in the global theater for a long time. Starting in 1898 with the Spanish American War the United States entered the world stage and began the start of our world presence as a superpower.

One thing is certain, if someone has power, someone else wants that power.

So, call me a conspiracy theorist, nut job, member of the tin foil club, or just an all-around loon, I really do not mind. This is just a thought expressed out loud. Perhaps it is a purposeful attempt at world economy disruption by a government bent on domination (not the first time it has been tried), maybe it was accidentally released due to careless procedures at a lab, or just a naturally occurring pandemic. Ultimately it is your call to make. What do you believe? Many things are not as innocent as they appear. But this is the situation China was waiting for, so intentional or convenient accident? You make the Call. But I do believe this is a possibility which has been floated in our government and perhaps (most likely) we are not being told the whole truth, and our government is attempting to prevent world conflict.

1960 – 1980:

China reforms its overall government and starts to support and lift its people at great cost financially and humanitarian missteps. KEYPOINT: 1976 - Mao dies. "Gang of Four", including Mao's widow, jockey for power but are arrested and convicted of crimes against the state. From 1977 Deng Xiaoping emerges as the dominant figure among pragmatists in the leadership. Under him, China undertakes far-reaching economic reforms. KEYPOINT: 1979 - Diplomatic relations established with the US. Government imposes one-child policy in effort to curb population growth.

1980 – 1990:

Continued growth and elevation of the people, beginning to be a world market player. KEYPOINTS: 1986-90 - China's "Open-door policy" opens the country to foreign investment and encourages development of a market economy and private sector. 1989 - Troops open fire on demonstrators who have camped for weeks in Tiananmen Square initially to demand the posthumous rehabilitation of former CCP General Secretary Hu Yaobang, who was forced to resign in 1987. The official death toll is 200. International outrage leads to sanctions. 1989 - Jiang Zemin takes over as Chinese Communist Party general secretary from Zhao Ziyang, who refused to support martial law during the Tiananmen demonstrations. Stock markets open in Shanghai and Shenzhen.

1990 – 2000:

Securely entrenched in the world market, business relocate to China, China becomes major player in technology production and advancement.

KEYPOINTS: 1992 - Russia and China sign declaration restoring friendly ties. The International Monetary Fund (IMF) ranks China's economy as third largest in the world after the US and Japan. 1994 - China abolishes the official renminbi (RMB) currency exchange rate and fixes its first floating rate since 1949. 1995 - China tests missiles and holds military exercises in the Taiwan Strait, apparently to intimidate Taiwan during its presidential elections. 1996 - China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan - dubbed the Shanghai Five - meet in Shanghai and agree to cooperate to combat ethnic and religious tensions in each other’s countries. 1997 - Deng Xiaoping dies, aged 92. Rioting erupts in Yining, Xinjiang and on day of Deng's funeral Xinjiang separatists’ plant three bombs on buses in Urumqi, Xinjiang, killing nine and injuring 74. Hong Kong reverts to Chinese control. 1998 - Zhu Rongji succeeds Li Peng as premier, announces reforms in the wake of the Asian financial crisis and continued deceleration of the economy. Thousands of state-owned enterprises are to be restructured through amalgamations, share flotations and bankruptcies. About four million civil service jobs to be axed. Large-scale flooding of the Yangtse, Songhua and Nenjiang rivers. 1999 - Nato bombs the Chinese embassy in Belgrade, Yugoslavia, souring Sino-US relations. Falun Gong, a quasi-religious sect, outlawed as a threat to stability. Fiftieth anniversary of People's Republic of China on 1st October. Macao reverts to Chinese rule.

2000 – 2010:

Chinese technology and production now supply a large world market. China builds ghost cities to support its infrastructure industry. Intellectual theft, trademark violations, and increased production of “copy” knockoff items. Major technological companies move production to China.

KEYPOINTS: 2000 - Crackdown on official corruption intensifies, with the execution for bribe taking of a former deputy chairman of the National People's Congress. Bomb explosion kills up to 60 in Urumqi, Xinjiang. 2001 April - Diplomatic stand-off over the detention of an American spy plane and crew after a mid-air collision with a Chinese fighter jet. 2001 June - Leaders of China, Russia and four Central Asian states launch the Shanghai Cooperation Organization (SCO) and sign an agreement to fight ethnic and religious militancy while promoting trade and investment. The group emerges when the Shanghai Five - China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan - are joined by Uzbekistan. 2001 June - China carries out military exercises simulating an invasion of Taiwan, at the same time as the island's armed forces test their capability to defend Taiwan against a missile attack from China. 2001 November - China joins the World Trade Organization. 2002 July - The US says China is modernizing its military to make possible a forcible reunification with Taiwan. Beijing says its policy remains defensive. 2002 November - Vice-President Hu Jintao is named head of the ruling Communist Party, replacing Jiang Zemin, the outgoing president. Jiang is re-elected head of the influential Central Military Commission, which oversees the armed forces. 2003 March - National People's Congress elects Hu Jintao as president. He replaces Jiang Zemin, who steps down after 10 years in the post. 2003 March-April - China and Hong Kong are hit by the pneumonia-like Sars virus, thought to have originated in Guangdong province in November 2002. Strict quarantine measures are enforced to stop the disease spreading.

2003 June - Hong Kong is declared free of Sars. Days later the World Health Organization lifts its Sars-related travel warning for Beijing.

2003 June - China, India reach de facto agreement over status of Tibet and Sikkim in landmark cross-border trade agreement.

2003 July-August - Some 500,000 people march in Hong Kong against Article 23, a controversial anti-subversion bill. Two key Hong Kong government officials resign. The government shelves the bill.

2004 September - Former president Jiang Zemin stands down as army chief, three years ahead of schedule.

2005 January - Former reformist leader Zhao Ziyang dies. He opposed violent measures to end 1989's student protests and spent his last years under virtual house arrest.

Aircraft chartered for the Lunar New Year holiday make the first direct flights between China and Taiwan since 1949.

2005 March - Hong Kong Chief Executive Tung Chee-hwa resigns. He is succeeded in June by Donald Tsang. New law on Taiwan calls for use of force should Taipei declare independence from mainland China.

2005 April - Relations with Japan deteriorate amid sometimes-violent anti-Japanese protests in Chinese cities, sparked by a Japanese textbook which China says glosses over Japan's World War II record.

Taiwan's National Party leader Lien Chan visits China for the first meeting between Nationalist and Communist Party leaders since 1949.

2005 August - China and Russia hold their first joint military exercises.

2006 November - African heads of state gather for a China-Africa summit in Beijing. Business deals worth nearly $2 billion are signed and China promises billions of dollars in loans and credits.

Government says pollution has degraded China's environment to a critical level, threatening health and social stability.

2007 January - Reports say China has carried out a missile test in space, shooting down an old weather satellite. The US, Japan and others express concern at China's military build-up.

2007 July - China's food and drug agency chief is executed for taking bribes. Food and drug scandals have sparked international fears about the safety of Chinese exports.

2008 March - Anti-China protests escalate into the worst violence Tibet has seen in 20 years, five months before Beijing hosts the Olympic Games.

Pro-Tibet activists in several countries focus world attention on the region by disrupting progress of the Olympic torch relay.

2008 July - China and Russia sign a treaty ending 40-year-old border dispute which led to armed clashes during the Cold War.

2008 September - Astronaut Zhai Zhigang completes China's first spacewalk during the country's third manned space mission, Shenzhou VII.

Nearly 53,000 Chinese children fall ill after drinking tainted milk, leading Premier Wen Jiabao to apologize for the scandal.

2008 November - The government announces a $586bn (£370bn) stimulus package to avoid the economy slowing. Chinese Premier Wen Jiabao says the effect of the global financial crisis on China is worse than expected.

2009 February - Russia and China sign $25bn deal to supply China with oil for next 20 years in exchange for loans. Hillary Clinton calls for deeper US-China partnership on first overseas tour as secretary of state.

2009 July - Scores of people are killed and hundreds injured in the worst ethnic violence in decades as a protest in the restive Xinjiang region turns violent.

First sign of relaxation of strictly enforced one-child policy, as officials in Shanghai urge parents to have a second child in effort to counter effects of ageing population.

2010 – 2015:

China is a world power, on level with the United States, Russia, and Japan. In the world market the Chinese Renminbi however is not on the same playing field with the Dollar and the Yen in the world market.

The U.S. Dollar is the world standard. Many monies are used in trade but the Dollar is entrenched.

China needs and wants world recognition as a world power and wants to be the world financial leader, but the United States stands in the way.

KEYPOINTS: 2010 January - China posts a 17.7% rise in exports in December, suggesting it has overtaken Germany as the world's biggest exporter. The US calls on Beijing to investigate the cyber-attacks, saying China has tightened censorship. China condemns US criticism of its internet controls.

2010 March - The web giant Google ends its compliance with Chinese internet censorship and starts re-directing web searches to Hong Kong, in response to cyber-attacks on e-mail accounts of human rights activists.

2010 October - Jailed Chinese dissident Liu Xiaobo is awarded Nobel Peace Prize, prompting official protests from Beijing.

Vice-President Xi Jinping named vice-chairman of powerful Central Military Commission, in a move widely seen as a step towards succeeding President Hu Jintao.

2011 February - China formally overtakes Japan to become the world's second-largest economy after Tokyo published figures showing a Japanese GDP rise of only four per cent in 2010.

2011 December - Southern fishing village of Wukan comes to international attention after violent protests by locals against land seizures by officials. Authorities respond by sacking two local officials and agreeing to villagers' key demands.

China issues new rules requiring users of microblogs to register personal details.

2012 January - Official figures suggest city dwellers outnumber China's rural population for the first time. Both imports and exports dip, raising concern that the global economic slowdown could be acting as a drag on growth.

2012 April - China ups the limit within which the yuan currency can fluctuate to 1% in trading against the US dollar, from 0.5%. The US welcomes the move, as it has been pressing China to let the yuan appreciate.

2012 May - Philippines and Chinese naval vessels confront one another off the Scarborough Shoal reef in the South China Sea. Both countries claim the reef, which may have significant reserves of oil and gas.

2012 September - China cancels ceremonies to mark the 40th anniversary of restored diplomatic ties with Japan because of a public flare-up over disputed islands in the East China Sea. Talks between China and Japan on security matters nonetheless go ahead.

China launches its first aircraft carrier, the Liaoning - a converted former Soviet vessel.

2012 November - Communist Party holds congress expected to start a once-in-a-decade transfer of power to a new generation of leaders. Vice-President and heir apparent Xi Jinping takes over as party chief and assumes the presidency in March 2013.

2013 January - A Tibetan monk receives a suspended death sentence for inciting eight people to burn themselves to death. Nearly 100 Tibetans have set themselves on fire since 2009, many fatally, in apparent protest to Chinese rule.

2013 February - China denies allegations by Japan that its navy ships twice put radar locks on Japanese military vessels, amid mounting tension over the disputed Senkaku/Diaoyu islands in the East China Sea.

2013 November - Communist Party leadership announces plans to relax one-child policy, in force since 1979. Other reforms include the abolition of "re-education through labor" camps.

China says it has established a new Air Defense Identification Zone (ADIZ) over an area of the East China Sea, covering disputed islands controlled by Japan and a disputed South Korean-controlled rock. Japan and South Korea both protest the move, and the US voices concern.

2014 January - China allows foreign companies majority ownership of some telecom and internet services in the Shanghai free trade zone.

2014 February - China's trade surplus jumps to $31.9bn (£19.4bn) - up 14 per cent from a year earlier - easing concerns the world's second-largest economy may be stuck in a slowdown.

2014 May - The US charges five Chinese army officers with industrial cyber-espionage, in the first case of its kind.

A disagreement with Vietnam over disputed islands escalates, as ships from the two countries collide in the waters of the South China Sea. Chinese workers flee Vietnam after the incident sparks anti-China riots.

China signs a 30-year deal worth an estimated $400bn for gas supplies from Russia's Gazprom.

2014 September-October - Protests against Beijing's plans to vet candidates for elections in 2017 grip Hong Kong.

2015 – 2020:

KEYPOINTS: 2015 January - China's economic growth falls to its lowest level for more than 20 years - 7.4% percent in 2014. Government revises growth targets down.

2015 September - President Xi pays official visit to the United States to seek investment in China; agrees to renounce economic cyber-espionage.

2015 October - China expresses anger at US naval ship sailing by artificial reefs Beijing is building among disputed Spratly Islands in South China Sea.

The Communist Party announces it has decided to end the decades-old one-child policy.

2016 January - Economic growth in 2015 falls to lowest rate in 25 years (6.9%, down from 7.3% in 2014), and International Monetary Fund predicts further deceleration over next two years.

2017 January - The country's slow economic growth continues, with the 2016 marking its slowest growth (6.7%) since 1990.

2017 April - President Xi urges trade cooperation with the US at his first official meeting with US President Donald Trump in Florida.

2017 June - The government passes a new cyber security law, giving it more control over the data of foreign and domestic firms.

2017 July-August – Increased tensions with India over disputed area of Himalayas, where China says Indian troops were trespassing.

2017 October - Communist Party votes at its congress to enshrine Xi Jinping's name and ideology in its constitution, elevating him to the level as founder Mao Zedong.

2018 March - National People's Congress annual legislative meeting votes to remove a two-term limit on the presidency from the constitution, allowing Xi Jinping to remain in office for longer than the conventional decade for recent Chinese leaders.

2018 April - China announces it will impose 25% trade tariffs on a list of 106 US goods, including soybeans, cars, and orange juice, in retaliation for similar US tariffs on about 1,300 Chinese products.

2019 June - Hong Kong sees start of months of anti-government and pro-democracy protests, involving violent clashes with police, against a proposal to allow extradition to mainland China.

AND NOW:

China is becoming increasingly agitated with its inability to break into the world financial market and feels undervalued. They continue to build their military and test the waters to see response and ability of the U.S.

China realizes it is beyond its capability and would involve a major long and drawn out military conflict with U.S. to approach taking the U.S. dollar out militarily. They also do not have a legitimate reason to attack the U.S. militarily and world response to an unprovoked attack would be catastrophic to their cause.

China knows in order to elevate itself in the financial market the U.S. dollar must be crippled to the point it can no longer be trusted as the world standard used in trade.

Trade with the U.S. becomes strained as the Trump administration implements trade restrictions to bring in line the almost 300-billion-dollar trade difference between the countries.

China can no longer stand back and wait. Inside information shows that the United States and other countries are ill prepared to react to a pandemic. China investigates biological warfare to cripple the U.S. and the world market, allowing them a way in, on devalued world currencies.

China knows that it can not directly employ a biological weapon leading to human rights and Geneva Convention violations. Any attempt to do so could be easily traced back to China. China researches knew an unknown biological would work if the source was found to be organic. They also know that they cannot directly engineer a lethal biological as the genetic modifications to the biological will be found out when the biological is studied.

China in the past has been the host of many viral outbreaks and reports have shown that their “wet” markets are a ticking timebomb for another major outbreak. They find a Virus and study the effects on the host animals. They Identify it and cultivate it. They know that a direct genetic modification will be traceable and may not lead to them directly but will show that the virus has been artificially modified with DNA studies.

Genetic modifications can and do happen due to mutations as the virus spreads and adapts. This can take years. China knows it does not have years. Recent impacts from trade restrictions implemented by the United States and a growing watchful eye on Chinese economic development have the Chinese government on a fast track. At the time, the Level 4 containment lab in Wuhan was known to be working on a Corona Virus derived from a strain found in bats. Many papers written and published on it document this work. The lead scientist in this endeavor had been working with this virus and studying its transference preference, life cycle, and biologic attack method in the host. The virus is promising, it shows easy transference to humans and similar infection and mortality to the already existing SARS virus. However, though the virus transmits easily to humans, it lacks the receptors to invade human cells, thus not infecting humans. The known SARS virus and this new virus are genetically almost identical, a forced lab mutation can combine the easy transmission of the new virus with ability of the existing virus to infect humans. This provides a virus without gene modification markers and appears to be wild and a NOVEL strain of a similar virus already known to exist. There are only two potential reasons to perform this type of research. One, to weaponize it or Two to create the virus and the cure and be the sole purveyor of the cure for financial gain. Or a third, BOTH.

Once they have the mutated virus, they cultivate it. They then release it to the wild. Depositing it in wet markets where it is thought the next major outbreak may start. They have not thoroughly studied it enough to know how it will react in the wild nor do they have a cure. They do know it is not 100% lethal, but it is devastating. Releasing it in their own country gives it a point of origin, it also proves that the wet market theories were correct. China is willing to accept a large hit of civilian deaths in order to show that they were victims of this as well and it is no more than a tragic outbreak.

October 2019:

They release the virus in Wuhan. They watch hospital intake and study the spread and lethality.

November 2019:

Mid November they report a new illness, they can no longer keep it quiet, but they show it as contained to limited environment.

December 2019:

Mid December doctors are reporting increased cases and that they do not know how to treat this illness. They see it as a new outbreak of an unknown virus. China informs the World Health Organization (WHO) they have a new illness, but it is not transmitted human to human, it is not airborne, and it is isolated to a specific region.

Meanwhile they have determined it is human to human transmittable and they have already limited travel in and out of the affected region. China now is restricting citizen travel and keeping the infected source area completely isolated. Important to note, that they have actually known this for about 2 months and allowed international travel in out of Wuhan.

Late December they announce to the WHO they cannot contain the virus and it may be in the wild outside the country.

This has been their intent all along. Get the virus in the wild and allow it to proliferate long enough to bring worldwide impact.

They know that U.S. response will be slow, and the virus has been in the country for at least two months and spreading.

They under report their fatalities, hide cases, and show a massive response to prove to the world they are just as much under attack by this virus as all other nations. Meanwhile knowing the true affects, and that it primarily affects the old and those with underlying conditions. They know the young are less susceptible and exploit this, reporting that the young are immune, knowing that they can be asymptomatic carriers. They have studied the transmission and effects in their own country, they have unlimited resources to do so, as they can skip political and corporate interference and eliminate all evidence that they knew what the virus is capable of.

January 2020:

Early January the U.S. is told by the WHO and China that this is contained, and outside exposure is possible, be on the alert, but it is easily treated.

U.S. response is cautious but not effective.

Mid to late January world cases start to emerge and are noted. Italy and Spain note increased cases and deaths.

February 2020:

Due to increased cases and deaths in Italy and Spain and an apparent pandemic the WHO lists it as a pandemic. Mind you they know from reports that this was already taking place in early January or late December.

The U.S. responds by placing travel restrictions from China. Unknowingly assuming it is not already worldwide and spreading.

President Trump is attacked as being racist and xenophobic for blockading China and China responds in kind, supporting the racist claims. Chinas part of social discord and creating division.

Social distancing and lockdowns are postulated but not implemented. China already knows that our “social society” is spreading this disease. Major cities run by Trump opposing politicians support the racist claims and xenophobia telling people to go out have fun enjoy. China was hoping for this division.

March 2020:

Social distancing and stay at home orders start at the advice of the CDC through the president.

�� China knows the American people will not accept this, and states are slow to comply.

Know that China has already studied our possible reaction and that we are a consumer nation with unrestricted travel throughout our country. It will be near impossible to stop commercial air travel and vehicle travel around the country, thus the virus will continue to spread. Will it kill millions? No, but that was not their intent. The intent was to cripple the economy and devalue the U.S. Dollar.

The Shut Down of small business and any community interaction, have caused supply runs by panicked citizens. Major metropolitan areas like New York City and New Orleans who have seen recent events drawing people from around the country and the world are now reporting major cases and hospital overload.

Running Theory:

While China has a formidable military, this is not an arguable statement, while technology may differ and military implements are different, they have a massive number of bodies to throw into a battle. They do however know that in a face to face military battle they are at a heavy disadvantage due to tactics, overall equipment, and the ability to deploy worldwide.

China also knows that in order to take on the United States militarily they would need to prove the U.S. implemented, planned to implement, or physically attacked China. Without this world opinion would not be in their favor and would likely only have the support of limited communist block countries, and even they may not fully support China if world opinion and the U.N. is not on board with the reason.

Was the intent to create a war, kill millions of Americans, or provide a direct attack on U.S. soil? No, absolutely not. The intent was to create worldwide panic, worldwide financial distress, gage reaction to a pandemic, and collapse the U.S. Economy.

Why would that be important? If the initial virus does not cause the U.S. economy to collapse gaging the United States political response, civilian compliance, and medical ability to react will be vital in a second “mutation” and more virulent outbreak.

Why would the collapse of our economy be important? If the dollar becomes devalued and loses status as the primary world trade currency a new currency can be proposed and put in place. China wants this, financial superiority over the United States. They can then buy and back our currency which will make it dependent on China, making the United States dependent on China.

The United States is already heavily dependent on foreign production with China at or near the top of that list for many things. If the United States were dependent on China financially and for production, we would lose any of our current perceived independence.

So we move our production back here? Right? Well China now has us between the proverbial “rock and a hard place”. We can and they may even encourage it, but how? Our money is weak and China will gladly back our change, but in doing so, they will own a great deal of the production placed back here in the U.S.

In short, the Chinese intent was to take the United States place on the world financial stage.

The virus is now known not be naturally occurring. It was manipulated in a lab. It is also known that the level 4 lab in Wuhan was working on this exact virus. Papers written on the virus by scientists working at the lab were published and are available. Concerns were raised by the scientific community when scientists wanted to explore human transmission and creating a virus which could infect and be transmitted by humans. The question is raised, why? Weaponization? Creation of a virus and a vaccine which they would solely benefit from? Either or both would suit the need for crippling the world.

Chinese response and reported cases are under much scrutiny and their story keeps changing, which leads us to wonder where did it come from and how much is the Chinese government trying to cover up?

Origin in Wuhan is a given. Was it an accident? It could be, but the amount of cover up and reports of massive civilian losses and the deaths or disappearance of scientists and other officials is questionable and makes an accident highly suspect. Was it intentionally released in the market? This is potentially very plausible. It gives a definite source, it gives the Chinese Government plausible deniability, it allows the virus to spread unchecked, and is a prime distribution point.

Why kill their own people? Plausible deniability. This gives them the ability to push the narrative that they were victims as well and this was natural, then it was an accident which will ultimately end up being the final narrative, because they will not admit to an intentional release. Why hide the real numbers? Tracking and releasing the real numbers would identify a lot about the nature of the virus and expose the unlikelihood of a naturally occurring or accidental release.

Still you ask, why kill their own people and don’t they care? The short answer is, no, they do not. The Chinese government over the centuries have shown they have the will, ability, and general history of violating their people’s rights and committing massive atrocities. The Chinese government continues to deny all human rights violation accusations. The Chinese communist mantra promotes the sacrifice of the people for the good of the state. The population of China is almost 1.5 billion, so a few million lost for the good of the state? Well that is a loss they can absorb, only a 0.2% loss of their population and shows an equally affected country.

China currently only reports 82,719 cases and 4,632 deaths. Is this due to massive and quick response? No, as the site of a rapidly emerging contagion this would not be the case. Their response would have been far behind by the time they realized it was a problem, their losses would have been far worse than ours, they would have been asking for world help. Are they under reporting on purpose and hiding their dead, which is highly likely, as leaked information leads to the conclusion that many people have disappeared and are not included in their death tolls.

Why would they do this? To appear on top of the virus. To gain world support for all information they push in relation to this virus. There are reports circulating out of China which show they may have a vaccine in trials. So soon? They may have had it already. They are just going through the motions to promote and provide the cure to the world, at a cost. And why wouldn’t countries pay for something that would help their people. The world will be held hostage by the Chinese Government, and the United States crippled financially into submission.

The Dollar has been the world reference currency and in the reserve currency for over 60 years. Presently one Chinese yuan renminbi is only worth 0.14 cents in U.S. dollars. Add to that trade restrictions placed by President Trump and it becomes clear why China wants this to happen.

Do not believe there are not U.S. politicians salivating over all this. With a heavily weakened U.S. economy and skyrocketing unemployment and business failures, the left will be pushing heavy social programs to “help” the people. This will only be a conversion to government reliance. Once the population is reliant, laws will change and rights lost in the name of saving people, national security, and stabilizing the country. China is hoping for this, an America under socialist control will comply more easily.

Is this possible? Sure, China needs Trump out of office to gain any of this. If the economy fails, people are hungry, unemployed, and only provided minimal financial aid they will turn in mass on the government they believe created this situation. Led by Chinese propaganda, American Mass Media, and the Democratic parties demonizing of Trump, they could gain enough of a majority to vote Trump out.

In his place we will get a puppet politician controlled completely by his party and with no ability to control any part of his office.

This new government will pair with China as sign of faith and the need to stabilize the dollar and the Economy. China will then attain their goal by manipulating the U.S. Government and financing national reconstruction through deals made with the U.S. Government to back programs. Our restructuring will take on massive Social programs, we will become increasingly socialist, democratic socialists, ring a bell?

All in all, this was not an accident, a natural bug, an act of nature, or Gods vengeance. It is a massive Geopolitical move by China.

FTFA,

P. Bleu Chapman

#covid_19 #geopolitical #geopolitics #ccp #america #globalmovement #world #why #socailist #agenda #china #chinapolitics #us politics #what if #political #worldconspiracy #power struggle #msm coverup #worldpolitics

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newstfionline · 4 years

Text

Headlines

Trump Threatens to Send Federal Law Enforcement Forces to More Cities (NYT) President Trump plans to deploy federal law enforcement to Chicago and threatened on Monday to send agents to other major cities—all controlled by Democrats. Governors and other officials reacted angrily to the president’s move, calling it an election-year ploy as they squared off over crime, civil liberties and local control that has spread from Portland, Ore., across the country. With camouflage-clad agents already sweeping through the streets of Portland, more units were poised to head to Chicago, and Mr. Trump suggested that he would follow suit in New York, Philadelphia, Detroit and other urban centers. Governors and other officials compared his actions to authoritarianism and vowed to pursue legislation or lawsuits to stop him. “I’m going to do something—that, I can tell you,” Mr. Trump told reporters in the Oval Office. “Because we’re not going to let New York and Chicago and Philadelphia and Detroit and Baltimore and all of these—Oakland is a mess. We’re not going to let this happen in our country. All run by liberal Democrats.”

Chicago restaurateur joins mission to feed America’s hungry (AP) Before coronavirus arrived, Manish Mallick’s trips to this city’s South Side had been limited to attending graduate classes at the University of Chicago. Now Mallick is a South Side regular—and a popular one. He regularly arrives bearing food for the hungry from his Indian restaurant several miles to the north, in the city’s downtown. “Thank you, sugar, for the meals. They’re so delicious!” one woman recently shouted to Mallick outside a South Side YWCA. “God bless you!” she added, raising her arms for emphasis. Mallick has personally delivered thousands of meals cooked and packed by his staff—among them, chickpea curry and tandoori chicken with roasted cottage cheese, sweet corn, peas and rice. Volunteers from neighborhood organizations then take them to children, retirees and the multitudes who’ve been laid off or sick during the pandemic. “We all need to help each other,” Mallick says. “That’s the best way to get through a crisis.”

American tourists are banned from the Bahamas as coronavirus cases spike (Washington Post) One of the few countries to welcome U.S. tourists has changed its mind, citing soaring infection numbers. The Bahamas will close its borders to most visitors from the United States starting Wednesday, Prime Minister Hubert Minnis said Sunday. While commercial flights from Canada, Britain and the European Union will still be allowed to land, all visitors must show proof that they tested negative for the coronavirus at an accredited lab in the past 10 days. Other international flights will be banned.

More and more countries are making masks mandatory (Washington Post) As countries around the world reopen their economies amid ongoing novel coronavirus outbreaks, governments are increasingly embracing what remains in some places a divisive public health measure: mandatory masks. In France, face coverings will be required in all public enclosed spaces as of Monday. England is set to begin enforcing new rules that make masks mandatory inside supermarkets and other shops, effective Friday. In the U.S., there is no national mask requirement. But at the state level, a growing number of mask requirements have come into force.

EU agrees on $2.1 trillion deal after marathon summit (AP) After four days and nights of wrangling, exhausted European Union leaders finally clinched a deal on an unprecedented 1.8 trillion-euro ($2.1 trillion) budget and coronavirus recovery fund early Tuesday, after one of their longest summits ever. The 27 leaders grudgingly committed to a costly, massive aid package for those hit hardest by COVID-19, which has already killed 135,000 people within the bloc alone. “Extraordinary events, and this is the pandemic that has reached us all, also require extraordinary new methods,” German Chancellor Angela Merkel said. To confront the biggest recession in its history, the EU will establish a 750 billion-euro coronavirus fund, partly based on common borrowing, to be sent as loans and grants to the hardest-hit countries. That is in addition to the agreement on the seven-year, 1 trillion-euro EU budget that leaders had been haggling over for months even before the pandemic. “The consequences will be historic,” French President Emmanuel Macron said. “We have created a possibility of taking up loans together, of setting up a recovery fund in the spirit of solidarity,” a sense of sharing debt that would have been unthinkable not so long ago.

Breached levees trap thousands as flooding in China worsens (AP) Breached levees have trapped more than 10,000 people in an eastern Chinese town as flooding worsens across much of the country, local authorities said Tuesday. High waters overcame flood defenses protecting Guzhen, a town in Anhui province, on Sunday, the provincial government said on its official microblog. Flood waters rose as high as 3 meters (10 feet), the official Xinhua News Agency quoted Wang Qingjun, Guzhen’s Communist Party secretary, as saying. About 1,500 firefighters were rushed to carry out rescues in the province, where weeks of heavy rains have disrupted the lives of more than 3 million people, Xinhua said.

Britain suspends extradition treaty with Hong Kong (NYT) Britain on Monday suspended its extradition treaty with Hong Kong amid worries about a new national security law that Beijing imposed on the former British colony. The suspension comes as London and Beijing find themselves at increasing odds over a variety of issues, including Britain’s move to bar Chinese tech giant Huawei from its 5G wireless networks and growing public anger in Britain over the treatment of the Uighur minority in Xinjiang, an autonomous territory in China.

Japan helps 87 companies to ‘exit China’ after pandemic exposed overreliance (Washington Post) Japan is paying 87 companies to shift production back home or into Southeast Asia after the novel coronavirus pandemic disrupted supply chains and exposed an overreliance on Chinese manufacturing. Alarm bells started ringing in Japanese boardrooms as soon as the virus emerged in the Chinese city of Wuhan, a major hub of the auto parts industry. Japanese automaker Nissan was forced to temporarily halt production at a plant in Japan in February over shortages of parts from China, while a Japanese consumer goods company, Iris Ohyama, found itself unable to meet surging local demand for masks after supplies to its factory in China were disrupted and export controls out of China were tightened. In March, Prime Minister Shinzo Abe said the government wanted to bring production back home and diversify into Southeast Asia. The following month, the government set aside $2.2 billion in its coronavirus economic recovery package to subsidize that process. China is Japan’s largest trading partner, but Japan’s Ministry of Economy, Trade and Industry (METI) has been trying for several years to reduce the country’s dependence on its giant neighbor. The 2008 global financial crisis, the 2011 northeastern Japan earthquake and the coronavirus pandemic all disrupted supply chains, while U.S.-China trade tensions are also a factor.

Jordan to reopen airports to tourists in August (AP) The Jordanian government says it will begin reopening airports to international travelers in August after sealing its borders in March to help halt the spread of the coronavirus. Travelers from a list of approved, low-risk countries must pass a coronavirus test at least 72 hours before departure and will get a second test upon arrival in Jordan, Transportation Minister Khaled Saif says. Jordan will require incoming tourists to download Aman, the government’s contact-tracing mobile application, for the duration of their stay in the country.

Swapping the stage for a deli: Israel underemployment rises (AP) A year ago, Cijay Brightman was doing sound and lighting for a Madonna performance in Israel. Now, after the coronavirus wiped out live events, he’s making sandwiches, slicing cheese and serving customers at a Tel Aviv deli. Brightman spent the last 15 years perfecting his craft and doing what he loves as a stage technician. But in the wake of the pandemic, he has been forced to abandon his passion and profession—like thousands of others in Israel—and find any job that will pay the bills. Underemployment is plaguing workers around the world. Although there are no global statistics yet, the phenomenon is expected to grow as the economic crisis around the world deepens, said economist Roger Gomis of the International Labor Organization.

King Salman hospitalized (Foreign Policy) Saudi Arabia’s King Salman bin Abdulaziz has been admitted to hospital with gallbladder problems, state media reported on Monday. The 84-year-old monarch is the second aging Gulf leader to seek medical attention recently, after 91-year-old Kuwaiti ruler Emir Sheikh Sabah Al Ahmad Al Sabah underwent surgery on Sunday for an as yet unnamed ailment.

Uganda’s Museveni seeks re-election to extend rule to four decades (Reuters) Uganda’s long-serving President Yoweri Museveni has collected papers to seek nomination as the ruling party’s candidate in next year’s presidential election, the party said on Tuesday. Securing a new term would potentially extend the 75-year-old former rebel fighter’s rule to four decades. Though no date has yet been fixed for the 2021 vote, it is typically held in February. The strongest opposition presidential aspirant is pop star and lawmaker Bobi Wine, 38, whose music endears him to the young. In power since 1986, Museveni’s tenure is only surpassed in Africa by Equatorial Guinea’s Teodoro Obiang, who has ruled since 1979 and Cameroon’s Paul Biya, who has ruled since 1982.

#headlines #news

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phroyd · 5 years

Link

Oh, Great, The Fed, under pressure from Trump, to make sure a recession doesn’t happen on his watch, threatening his re-election, is going to roll back protections in place to prevent another Market Crash like the one in 2008! - Phroyd

WASHINGTON — A decade after big banks needed government support to dig out of the financial crisis, the Federal Reserve is slowly, but steadily, making a series of regulatory changes that could chip away at new requirements put in place to prevent a repeat of the 2008 meltdown.

Some of the changes, seemingly incremental and technical on their own, could add up to a weakening of capital requirements installed in the wake of the crisis to prevent the largest banks from suffering the kind of destabilizing losses that imperiled the United States economy. Another imminent change will soften a rule intended to prevent banks from making risky bets with customer deposits.

Fed officials and others who support the changes, including big banks, say the Fed is engaging in what they call “tailoring” — a regulatory correction that will bring greater efficiency to standards written in the heat of a meltdown. They say the tweaks will not weaken the ability of banks to withstand financial losses but will reduce burdensome regulations that could have unintended consequences, like encouraging risk-taking.

But some current and former Fed officials worry that the central bank and its fellow regulators are giving large banks, which are making big profits, an unnecessary gift that could leave the economy exposed in the next downturn. They say the overseers should be forcing banks to maintain or even build up their defenses given the strong economy, which is in its longest expansion on record, rather than eroding those buffers.

“No individual thing jumps out, but if you look at the sum total, the direction of travel is not entirely encouraging,” Jeremy Stein, a Harvard professor and former Fed governor, said on a recent panel. “You need to be incredibly vigilant, and really understand this stuff very well. It’s very opaque, in many ways.”

The Fed is expected to soon approve bank-friendly changes to the Volcker Rule, which was aimed at preventing banks from trading for their own profit with depositors’ money and other funds. The revised rule, approved by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency on Tuesday, eases restrictions on how banks invest for their own gain.

The Volcker Rule previously forced banks to prove that their short-term trades — those held for less than 60 days — were allowable under the law. Banks complained that the provision was burdensome and restricted legitimate trading. That practice is now scrapped. Regulators proposed replacing it with a test based on accounting standards, which would have determined what kind of trades are banned. But big banks criticized the proposal and the industry slammed the new approach as overly-broad. It was also eliminated in the final rule. The end result is that a portion of bank financial activities will no longer be captured and judged by regulators.

Martin J. Gruenberg, a member of the FDIC board of directors, dissented against the rule, saying “the Volcker Rule will no longer impose a meaningful constraint on speculative proprietary trading by banks and bank holding companies benefiting from the public safety net.”

Other agencies, including the Fed, will probably approve the measure within weeks, said Ian Katz, an analyst with Capital Alpha Partners.

Other changes to regulation, some put into place and others still under consideration, range from making it easier for big banks to pass the Fed’s annual “stress test” of their financial health to allowing some to borrow more. One idea being floated could quietly reduce capital levels at the biggest American banks over the course of the business cycle.

The tinkering is being driven by Randal K. Quarles, the Fed’s vice chair for supervision, whom President Trump nominated in 2017, and the effort has earned the consideration of Jerome H. Powell, the Fed chair. At a news conference last month, Mr. Powell said the Fed was weighing a proposal that might have the effect of reducing average capital levels at big banks over time.

Bolstering capital at large banks was a centerpiece of postcrisis efforts, as regulators looked for ways to ensure that banks would have stable sources of financing in the event of another downturn. In a crisis, depositors and creditors may demand that a bank return their money, destabilizing the financial system. Indeed, that helped to fell Lehman Brothers, the investment bank that collapsed in 2008.

But capital — money raised from shareholders or retained as profits — does not have to be repaid. The 18 biggest banks, which include American firms like JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America, added more than $650 billion in common equity capital from the beginning of 2009 through the end of last year.

Bankers acknowledged that capital needed to be higher after the 2008 crisis, but increasingly say enough is enough. Big banks have complained of measures that might increase capital from current levels or that could make year-to-year requirements fluctuate more, and have criticized United States rules for being more demanding than international standards.

Bank lobbying groups like the Bank Policy Institute have pushed back on calls to lift capital requirements, saying that stricter regulations “would harm economic growth with little benefit to the safety and soundness of the financial system.” And the country’s large banks have been working for more than a year to persuade the Fed to avoid putting more stringent capital rules in place.

Representatives from each of the biggest banks have met multiple times with Fed officials to talk about the stress capital buffer, a measure that would condense and streamline capital requirements, according to two people familiar with the matter. Each bank also used a public comment period in 2018 to send letters detailing specific suggestions for changes the Fed could make when it enacts the new standard.

“We’re comfortable with the capital regime that we’re operating under,” John Shrewsberry, Wells Fargo’s chief financial officer, said on a call with reporters last month.

Executives have a reason for opposing tougher capital requirements. They force banks to limit stock buybacks and dividend payments, curbing moves that help lift share prices. A big chunk of senior bank executives’ compensation is made up of stock. Yet existing capital requirements have not stopped banks from returning large amounts of excess capital to their shareholders. Last year, the eight largest American banks spent $104 billion on stock buybacks and dividend payments, up nearly a fourth from $84 billion in 2017.

Some Fed officials say capital requirements are already on the low side and should be beefed up, and careful watchers of financial regulation warn that current regulatory tweaks could bite into capital over time.

Lael Brainard, a Fed governor who was appointed by President Barack Obama, has now dissented on six separate regulatory matters, and has said that the Fed must be “especially vigilant to safeguard the resilience of our financial system in good times when vulnerabilities may be building.”

The president of the Federal Reserve Bank of Dallas, Robert Kaplan, and Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, have warned against making changes that reduce capital requirements.

Fed research shows that bank capital should be in a range of 13 percent to more than 26 percent of a bank’s assets, adjusted for risk, to best balance threats that emerge during downturns against costs to economic activity during times of expansion. Overall capital ratios at big banks stood at about 14 percent at the end of last year.

“The biggest banks need substantially more capital,” Mr. Kashkari said in an interview, calling changes that could weaken requirements “concerning.”

Mr. Powell and Mr. Quarles often say that capital levels are “about right” at the moment. But an idea being floated by Mr. Quarles has the potential to lower capital levels at the biggest banks over the course of the business cycle.

Mr. Quarles has said the Fed should revisit what’s known as the “countercyclical capital buffer” — a fancy name for an extra level of capital that the Fed can require banks to add during robust economic times. The buffer, created by an international rule, allows regulators to respond to economic conditions — turning it down to unleash money and encourage lending when the economy needs it and raising it when the economy is running hot.

The Fed has never turned on the capital buffer, though Ms. Brainard and Janet L. Yellen, the former Fed chair, have been advocating that the Fed should consider enacting it now, when the economy is strong.

The other Fed governors have resisted enacting it, arguing that capital levels are high enough and that financial risks are not elevated. Mr. Quarles has gone a step further, saying that the extra layer is essentially always “on” because the Fed and its fellow regulators require American banks to maintain much higher capital levels than their global peers.

Mr. Quarles has suggested that the countercyclical buffer should be counted toward existing capital requirements. The move could reduce capital requirements over time, relative to the status quo, because banks would face lower standards during downturns, analysts say.

Mr. Powell indicated on July 31 that the Fed was contemplating such a change.

“The idea of putting it in place so that you can cut it — that’s something other jurisdictions have done, and it’s worth considering,” Mr. Powell said. “This isn’t something we’ve decided to do. It’s just under consideration.”

Critics say that treating the countercyclical buffer as part of current requirements, instead of as a cherry on top, even risks permanently lowering capital requirements.

“I’ll believe it when I see it, that a Federal Reserve constituted like we have now will ever voluntarily turn on the capital buffer,” said Jeremy Kress, a former Fed regulator who now works at the University of Michigan. “It’s a backdoor reduction of capital.”

A proposal already underway will lower capital slightly, while making a hard cap on how much the biggest banks can borrow more flexible. Known as the “enhanced supplemental leverage ratio,” the measure was put in place to ensure that the eight largest United States banks did not overextend themselves with borrowed money, as some did in the lead-up to the financial crisis. The changes would give banks more room to borrow and bring United States rules in line with global standards.

Mr. Quarles has called it a “modest recalibration” that will ensure that banks’ capital requirements better reflect the risks to which they are exposed. Bank executives support the change, which could free $400 million of bank holding company capital — 0.04 percent of the total — for dividend payouts and buybacks, according to staff estimates.

Not all of the tweaks act on capital directly. For example, the Fed has also begun disclosing more information about its stress tests, which critics equate to giving banks the answers ahead of the test. Mr. Quarles takes objection to that characterization, saying the point of stress testing is to encourage strong capital standards, not to punish banks.

“Like a teacher, we don’t want banks to fail. We want them to learn,” he said in a July speech.

The Fed has also cut a qualitative component from most banks’ tests, one that checks in on their processes, rather than assessing numbers alone. Ms. Brainard voted against the move.

The risk with all the fiddling, experts say, is less that any individual change will burn down the house — in fact, banks and some lawmakers have urged the Fed to move faster. It is more that this gradual drip of deregulation points in one direction for the largest banks, and could undermine standards just as the expansion hits record length and the economy faces challenges.Mr. Stein, the former Fed governor, said in an interview that his concern was partly about the message sent to bank supervisors in the field.

“What is the tone that you’re setting?” he said.

Phroyd

#liang #nellie #the fed #rollbacks

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leftpress · 5 years

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Jasper Bernes | July 9th 2019 | Commune

Acid against austerity.

When cultural theorist, author, and blogger Mark Fisher passed away in 2017, he left behind an unfinished book manuscript. Acid Communism: On Post-Capitalist Desire was to continue the project of his 2009 book Capitalist Realism: Is There No Alternative? In Capitalist Realism, Fisher wrote that decades of deregulation had all but fully destroyed our ability to imagine viable alternatives to capitalism. If we couldn’t envision a better world, he declared, there could be little hope that such a world would manifest. Capitalist Realism was by no means defeatist, though. The book concludes with a call to action: Fisher draws attention to what he saw as the most urgently needed political resource. If the future we want lies at the limits of our imagination we must begin there — with the creative, unruly parts of our consciousness, that parts that capital wants to claim as its own. The current political nightmare, he suggests, will only be defeated by vibrant dreams.

In this spirit, Acid Communism was meant to strengthen the political imagination. A recently published anthology of Fisher’s writings includes a draft for the introduction, which reads something like a manifesto. Fisher had taken a cue from his friend Jeremy Gilbert, a scholar who had long maintained that the sixties might serve as a blueprint for contemporary leftist revolution. Inspired by Gilbert, Fisher coined the phrase that would become the title for his next book: “acid communism” represents the idea that psychologically profound experiences — including the use of psychedelic drugs — should be used to galvanize anticapitalist movements. In the introduction, he observes that the optimism of the hippie-era left had faded during the heyday of Reagan and Thatcher. Neoliberal economics catalyzed widespread cynicism, Fisher claimed, and in so doing depleted the mental energy required for proactive organizing. We now owed it to ourselves to revive the hopeful politics that flourished in the sixties.

In the wake of Fisher’s suicide, several activist initiatives took up the Acid Communist banner. The 2018 transmediale festival, an annual arts and culture event in Berlin, included a workshop called “Building Acid Communism.” Workshop leaders gave the audience a series of prompts aimed at “unveiling and exploring the precise idea of freedom” that motivated left-wing activists. These questions inquired into how participants experienced boredom, whether fashion and style mattered to their political identity, and the last time they felt truly free from work, among other issues. Meanwhile, a spate of recent articles about Acid Communism reflect the multiple ways it might be interpreted. In one editorial, Jeremy Gilbert points out that the concept has taken on other names, including “freak left,” “psychedelic socialism,” and in the UK, “Acid Corbynism.” Acid Corbynism is referenced in the title for Gilbert’s new podcast, #ACFM (Acid Corbynism FM), which investigates “the links between Left-wing politics and culture, music and experiences of collective joy.” Although they are eclectic, these endeavors agree that the psychedelic sixties might make a reappearance in the political future. The work of Acid Communism, it seems, is just beginning.

The timing is apropos. Currently, we are in the midst of what some have called a “psychedelic renaissance,” referring to the revival of scientific interest in the psychiatric use of these drugs. Psychedelic psychiatry was a burgeoning field in the postwar period, but by the seventies the criminalization of all psychedelic drugs had brought investigations to an effective halt. After years of advocacy by researchers and psychedelic enthusiasts, clinical investigations of LSD, magic mushrooms, and related chemicals resumed in the nineties. 2014 saw the first peer-reviewed study on LSD published in over forty years, and the number of clinical trials is rapidly growing. Until recently, however, the psychedelic renaissance could not be considered mainstream. Its breakthrough moment came with the publication of Michael Pollan’s 2018 book How to Change Your Mind: What the New Science of Psychedelics Teaches Us About Consciousness, Dying, Addiction, Depression, and Transcendence. Reaching the top spot on the New York Times bestseller list, How to Change Your Mind was a watershed moment for the reputation of psychedelics. Pollan is a widely-respected journalist, and much of the current research is being conducted at well-known universities; Stanford, Johns Hopkins, and NYU all currently have psychedelic research labs. This is encouraging to those who have long known what researchers are now trying to prove: when used safely, psychedelics can vastly improve one’s quality of life.

Although Acid Communism stands to benefit from the improved public image of psychedelics, these movements have yet to meaningfully overlap. I’ve been keeping close watch on both. My interest in the two subjects began around the same time, during my sophomore year in college. This was the fall of 2008. I was already skeptical of the US economy, but the financial crash confirmed my suspicion that capitalism was dangerous and unethical. That same fall marked my introduction to psychedelic drug experience. My initial encounter with LSD was overwhelmingly positive. It made believe that that the world was joyful, mysterious, and full of promise — an impression which contrasted sharply with the current political mood. In an attempt to reconcile my psychedelic-inspired hopeful outlook with extenuating social circumstances, I started participating in anti-capitalist and pro-peace activism. The fall of 2008 made it impossible for me to separate my political sensibilities from the hopefulness that psychedelia represents for me. But I’ve rarely seen psychedelics politicized this way in contemporary pop culture. I’d just assumed that after the sixties, psychedelic experiences could not be framed as political in mainstream discourse.

For the most part, then, I’ve pursued these subjects as separate intellectual endeavors. Both have continued to be central to my life. In 2013, I moved to New York City to pursue a Master’s degree in Nonprofit Management. Although I hardly had time for anything other than school, I volunteered to help out at an after-party for Horizons NYC, which is an international forum on the science and culture of psychedelic drugs. Held every October, Horizons brings together researchers, artists and spiritual leaders to give talks on topics ranging from the globalization of the psychedelic brew ayahuasca to the use of magic mushrooms in treating cocaine addiction. My schedule of classes and work prevented me from attending any lectures. Volunteering offered me partial access to this complicated, interesting world.

“If the future we want lies at the limits of our imagination we must begin there — with the creative, unruly parts of our consciousness, that parts that capital wants to claim as its own.”

The night began with a dinner for benefactors of MAPS — the Multidisciplinary Association for Psychedelic Studies — a non-profit promoting psychedelic research based in Santa Cruz, CA. As we relayed kale salad and vegan cheesecake across the kitchen, my friend Nina pulled me aside. “This is weird,” she whispered, nodding toward the dining room. I knew what she meant. The venue was a lavishly-appointed brownstone belonging to a moneyed Manhattan couple. It bore little resemblance to the psychedelic settings we knew and loved: earthy, DIY spaces which would no more readily welcome conspicuous displays of wealth like the one before us than then they would a visit from law enforcement. The guests didn’t match the hippie image we associated with psychedelics either. Their conversation flowed from remarks about exotic vacation getaways to opinions on Brooklyn’s finest private schools.

This shouldn’t have been a surprise. It was a benefit dinner, after all. But I still found the atmosphere unsettling. At the time, the economic crisis of 2008 was beginning to hit me hard. Not long before the conference, I’d watched a close friend become homeless. The tiny heart attack that happened whenever I used my debit card to buy groceries — the I-hope-there’s-enough-in-my-bank-account panic — had become a normal part of my reality, and I was resigning myself to the possibility that things might never get easier. A large part of me felt psychedelic activism to be extravagant in this climate. But I didn’t want the therapeutic use of psychedelics, a cause I’d believed in for years, to become yet another victim of late capitalism.

I tried to keep that idealistic thought at the front of my mind as the night continued. If anything, I assured myself, I should be glad to meet so many psychedelic enthusiasts who appealed to more conservative perspectives. After all, I reasoned, a controversial movement needs allies in the mainstream. Still, I couldn’t help but resent the guests for their seeming obliviousness to the current state of affairs. I wondered if they’d ever drawn a connection between their immunity to the war on drugs and their economic status, and if so, how much this bothered them. I wondered if they’d achieved some sort of enlightenment — perhaps thanks to psychedelics — that somehow made them both socially conscious and comfortable with their personal wealth. Even if participating in this space represented to me giving up some integrity, I wanted in on this insight. I was tired of feeling hopeless.

Although the luxe setting was unfamiliar, that would not be my last experience with psychedelic activism. My interest in hallucinogens followed me to my PhD in critical theory, where I explore the new psychedelic science in my dissertation. Throughout all these years, my social commitments have felt at odds with the pervasive cliché of hippie escapism. There is some truth to the myth of the disengaged drug-user: a friend of mine in the scene once said that, having attained a non-dualistic state of enlightenment, he “saw through” all political opinions. Other psychedelic explorers I’ve met intentionally ignore current events, claiming politics to be too depressing them. But, like a lot of common depictions of drug use, this is more fiction than fact. The consumption of LSD and magic mushrooms is no more likely to promote apathy than caffeine and alcohol. Moreover, in the age of Donald Trump and the rise of the new far-right, more and more people are realizing that their individual lives are ineluctably political. Political consciousness has extended to modern New Age subcultures, which now appear more thoroughly engaged with issues of justice than they did when I was an undergrad.

The Acid Communist movement has helped me view my politics as part of a historical lineage, not a misappropriation of serious Leftism. It’s helped me embrace the idea that if the experience of tripping had a message for society at large — if it aspired beyond the self-indulgence embodied in Timothy Leary’s “turn on, tune in, drop out” — it would threaten the very basis of capital. While the economic virtue of individualism rules over the modern psyche, any dedicated hippie will tell you that hallucinogens offer quite the opposite. These substances tend to break the flow of self-directed thought patterns, leading to a sense of unity with one’s environment. This state of mind is inherently communal and collectivist, and because of that, it’s easy to see how it could heighten sensitivity to political concerns. This is the connection that Fisher was to expound upon in his new book. We can now only speculate on what he might have said.

It would be wrong, however, to portray Fisher as the emblem of the movement. By Jeremy Gilbert’s account, anti-proprietary virtues are key to the concept. As a diverse set of ideas united by a collectivist ethos, appointing a figurehead would make little sense. But if such a title were to be given, Gilbert, not Fisher, may be the more worthy candidate. In a 2017 article titled “Psychedelic Socialism: The Politics of Consciousness, the Legacy of the Counterculture and the Future of the Left,” Gilbert offers some frank words on the difficulties he faced — and still faces — developing the notion in Fisher’s absence: “‘Acid Communism’ was Mark’s term for a political and analytical position that he’d derived more than a little from my work and interests,” he writes. “But it would be totally against the spirit of those shared ideas and priorities to attribute ownership or authorship of any of these ideas to anybody.”

So while Fisher appears to have owed Gilbert more credit than he gave, saying as much might be in bad faith. And, indeed, reducing Acid Communism to a particular thinker or even a cohort of thinkers would miss the point. While researching this article, I interviewed Gilbert, who offered some historical answers to the question of who might claim rightful ownership to Acid Communism. Although lighthearted in spirit, the sixties counterculture was profoundly critical of the bourgeois subject — the individual who sees herself as isolated and therefore acts out of self-interest rather than the common good. On principle, therefore Acid Communism cannot be represented by one person or group. This perspective bears a direct connection to political theories that emerged from Europe in the thirties and forties. Both Gilbert and Fisher link the postwar counterculture to the radical vision of the Frankfurt School, a circle of theorists associated with the Institute for Social Research at the Goethe University in Frankfurt. Its luminaries told of a structural relationship between individualism, capitalism and authoritarianism. With these warnings, it attempted to both retroactively account for fascism and prevent its future resurgence.

“A large part of me felt psychedelic activism to be extravagant in this climate. But I didn’t want the therapeutic use of psychedelics to become yet another victim of late capitalism.”

Unlike the Frankfurt School, Acid Communism deliberately operates outside of academia, which makes it more widely accessible than movements developed mainly inside institutional frameworks. Some of Acid Communism’s strategies include freely disseminating texts and speeches: Plan C, an England-based collective in the UK that produces festivals, includes on its website blog posts and videos of Mark Fisher’s Acid Communism lectures. But Jeremy Gilbert, a member of Plan C, acknowledges that the immediacy and immersiveness of psychedelic feelings demands non-intellectual modes of invocation. He views his work as a dance party organizer as part of his political pursuits. So while there’s certainly no ban on digital organizing, real-world gatherings appear crucial to a new psychedelic Left.

Toward this end, Gilbert and Fisher both explored the viability of incorporating old-school “consciousness-raising” events in a psychedelic framework. First developed by socialist feminists in the 1970s, consciousness-raising encourages participants to share stories about struggles normally conceived as private and shameful. The idea is that when people tune in to others’ narratives of hardship — which may include accounts of mental illness, social isolation and poverty — such problems are revealed as not an exception, but the norm. In his essay “No Romance Without Finance,” Fisher writes that “as soon as two or more people gather together, they can start to collectivise the stress that capitalism ordinarily privatizes. Personal shame becomes dissolved as its structural causes are collectively identified.” When community is built around shared struggle, feelings of alienation are modulated by feelings of solidarity.

Telling stories in this consciousness-raising spirit is key, but making and listening to music might be an equally powerful consciousness-raising technique. At concerts, Fisher writes, “a mass audience could not only experience its feelings being validated, it could locate the origins of those feelings in oppressive structures.” The current popularity of free-spirited music festivals might be framed as a reaction to neoliberal malaise. While modern festivals aren’t as explicitly political as, say, Occupy Wall Street, they do permit attendees to transcend the capitalist reality of dullness and detachment. It’s not just that people directly encounter joy, but that this joy is amplified by the presence of so many others. And at festivals, psychedelic drug use abounds. “Psychedelic drugs gave birth to the modern-day music festival,” points out journalist Kevin Franciotti. “There would have been no Woodstock without LSD.” It matters just as much that the historic Woodstock Festival also has a political history. The anti-Vietnam War movement was at least as essential to Woodstock as drug use. Jeremy Gilbert and the Plan C collective maintain that politics still go hand in hand with festival culture.

The politicization of tripping and trippy art raised my suspicion, however. Political thinkers have long raised been skeptical of a connection between aesthetics and politics. The difficulties of rendering politics as art and vice versa were a major topic of Frankfurt School publications. During our interview, I asked Gilbert about German-Jewish philosopher Walter Benjamin’s essay “The Work of Art In The Age Of Mechanical Reproduction.” Penned by Benjamin during the rise of the Nazi regime, it makes a theoretical argument that the artistic representation of political ideals accommodates fascism. Dictatorships, after all, rely heavily on aesthetics. One might imagine the sweeping grandiosity of Nazi propaganda, or the striking color palette used by the fascist rulers in the fictional government of V for Vendetta. It’s admittedly hard to think that tie-dye and jam bands might be used for the same purpose as the military uniforms and Wagnerian orchestras of the Third Reich. But applying the vibrant, affect-heavy veil of psychedelia to Leftist organizing seems strangely manipulative, as if it’s not enough for politics itselfs to appeal to the intellect. And besides, not everybody likes psychedelic art.

In response, Gilbert reminded me that while Benjamin warned against aestheticizing politics, he was by the same token interested in the social potential that inheres in art. This, he said, is a major goal of Acid Communism, which seeks not to authoritatively impose an aesthetic program, as in fascism, but to cultivate seeds of transformation contained in already-existing cultural forms. Mark Fisher’s writings on Acid Communism make frequent references to another Frankfurt School philosopher, Herbert Marcuse. For Marcuse, Fisher wrote, “art was a positive alienation, a ‘rational negation’ of the existing order of things.” Fisher positioned Marcuse against another Theodor Adorno, another Frankfurt School philosopher. While Adorno upheld creativity as a space of revolutionary otherness, Fisher said, he did not provide any tangible visions for the politics that art might inform. Rather, Adorno had readers “endlessly examine the wounds of a ‘damaged life’ under capital.” Instead of “marking our distance” from utopia — Fisher’s final verdict on Adorno — culture should strive to embody the ideals to which we might aspire.

This sentiment was echoed by Gilbert during our interview. Radical politics, he said, are always utopian, and utopian intentions are wasted without a manifest blueprint for change. Psychedelic art, with its message of love and transcendence, delivers. “It’s not going to be for everybody,” he clarified. But he indicated that its recognizable styles — whirling geometric patterns, fractals, and musical intricacy — offer an “aesthetics of complexity” which contrast with the dull reductiveness of capitalist realism. “Not many people allow themselves the full extent of their complexity,” he said, quoting composer Arthur Russell. With its multidimensional intricacies, both the art and the drugs might throw the banality of contemporary popular media into high relief.

Of course, psychedelic experience can’t be relied on to lead to communitarian politics. One weakness of Acid Communism is that it appears to rely on a presumptive natural link between psychedelic experience and Leftist perspectives. This may have been the case for me, but, it’s not exactly scientific law. In a talk titled “Psychedelics, Fascism and the Politics of Profane Illumination,” religious historian Alan Piper admits that “initiation by psychedelic experience does not inevitably lead to liberal values” — where “liberal” is counterposed with “fascist.” Piper’s talk included a brief history of psychedelia’s dark side. Hallucinogenic drugs, he noted, have long been deployed as tools of subjugation. Hallucinogen use prevailed in the Weimar Republic, and was formative for fascist thinker Julius Evola. Then there are the Cold War era MK Ultra experiments, where US government officials administered LSD to unwitting subjects to determine its potential as a truth serum. Today, the pervasiveness of sexual assault by ayahuasca shamans is becoming well-known in subcultures using psychedelics. And the use of ayahuasca by non-indigenous people has been critiqued as cultural appropriation. Psychedelics, in view of all this, could hardly be said to lead to directly to political enlightenment.

“Acid Communism could be a component of a dynamic, experimental Leftism that is as interested in creativity as it is in critique. It would just take a bit of determination, and a strong dose of imagination.”

The case of Burning Man — the world-famous gathering long heralded as a locus of communitarianism — complicates things even further. In theory, Burning Man perfectly embodies an Acid Communist practice. No money is allowed to be exchanged within its borders; it instead promotes the free sharing of resources as part of a gift economy structure. Burning Man is organized around the idea that people want to help out more than compete with one another. But there has been a recent backlash against this image: a spate of popular reporting tells of excessive tech-sector wealth and the rampant consumerism required to prepare for a week in the barren desert. The stories usually go something like this: once safely distant from their offices, Bay Area Burners descend into well-financed hedonism. Spending millions on private jets to the remote Nevada location, they proceed to “camp” in utmost luxury. Technology scholar PJ Patella-Rey considered this in an article titled “Burning Man is The New Capitalism.” While he emphasizes that there’s no causal link between the two, Rey claims it’s also not a coincidence that Burning Man began in 1989 — the year that the Berlin Wall fell. “Burning Man demonstrates how market-driven consumption fuels a new commons and how this commons, in turn, creates new markets,” he writes.

Gilbert considers the transformation of commons into markets to be a perversion of psychedelic values. But perhaps it’s to be expected. As he reported on his blog, “you can’t expect projects like Burning Man to end up in any place other than where it now is, in the absence of a much wider political movement for them to connect to. Experimental spaces like Burning Man will end up being co-opted by capitalism if there isn’t some wider political movement to sustain them, inspire them, and inform them about how to do things differently. You can’t really blame Burning Man for the fact that that’s happened to it.” It would seem that if music and art events are committed to widespread social transformation, such intentions would have to be extremely clear from the outset.

The intimacy between Silicon Valley and psychedelics deserves further remark. The rise of the “cryptopsychedelic” movement joins Bitcoin boosters and hippies, and initiatives are being launched to help corporate executives expand their professional mindset with some hallucinogenic assistance. And this surpasses the tech sector. Across the US, the reform of drug policy is a popular cause among libertarians and certain factions of the alt-right. Of course, not all who vouch for laissez-faire economics support the new psychedelic movement. But in the US, much overlap exists between these groups. When I pressed Jeremy Gilbert on this, he responded that contemporary hippies who embrace libertarianism fail to grasp the political history of their subculture. The New Agers of the mid-20th century, he claimed, were never in favor of capitalist principles. But this history may be more clear in Europe, where socialism has not withstood the bad reputation it has had in the States. If Acid Communism is to thrive in the USA, it would have to emphasize that psychedelia has been long-embraced by anti-capitalism. Its current vogue among libertarians is a historical anomaly.

On this note, it’s especially relevant that the psychedelic resurgence is not strictly happening in well-financed research labs. Much like the new left, it is taking place in the streets. As the number of legal investigations grows, the rise psychedelic in psychedelic drug may appear to be the exclusive result of science. A recent Vice Magazine piece points that the last few years have seen a major swell in the illegal use of LSD, especially among young people. “US government statistics show 1.31 million 18- to 25-year-olds admitted taking LSD in 2017 compared with 317,000 in 2004 — almost a fourfold increase since the mid 2000s,” it reports. While the fiat renaissance raises the socially-acceptable banner of medical studies, on the streets, it crosses into brazen political territory. Vice interviewed 25-year-old Abby, a student in the US who claims to use LSD to cope with “the ravages of modern capitalism,” as she puts it. “Psychedelics take the edge off the costs and burden of existing in a materialist and capitalist society, and the fact that this is not how life is supposed to be,” Abby said.

The construction of psychedelic spaces “where people can learn and grow” might be a natural pastime for youth increasingly skeptical of the status quo. Indeed, aiding the creativity and curiosity of young people — capacities preempted by neoliberal education policy — could be a goal of Acid Communism. When I asked Jeremy Gilbert about his hopes for the future, he indicated public school curricula as a site desperately in need of reconstruction. While it may be hard to translate Acid Communism into education policy reform, its program of consciousness-raising might take the form of alternative education practices, such as teach-ins and ecologically-focused curricula. And, indeed, there is indeed a burgeoning para-academic psychedelic pedagogy. Most psychedelic conferences welcome speakers without institutional affiliation, and a recent assembly titled “Cultural and Political Perspectives on Psychedelic Science” joined scholars across disciplines to weight in on the social implications of psychedelia.

Although formal meetings openly embrace Acid Communism, its truths might always be more evident at the after-parties. While I missed the lectures at Horizons 2013, I’ve since attended a number of other psychedelic conferences. More often than not, the formal lectures are less interesting than the conversations that ensue. While it’s too much to expand on medicine, culture and politics in a single talk, the disciplinary orthodoxy that guides conference lectures doesn’t apply to casual conversation. [a pattern emerged]. Many people see their psychedelic and political commitments as intertwined, refusing to reduce one to the other.

This brings me back to my story about Horizons. Following the benefactor dinner, there was an dance party. People were welcome even if they hadn’t gone to the conference, and the ticket price was affordable. As my friend and I made our way through the crowd, something stuck out: people seemed elated. They were unselfconsciously giddy in a way I rarely encountered at a typical bar. Of course, for some, this was the result of a little chemical assistance. But I was sober the aura was infectious anyway. It helped me set aside my bitterness from earlier hours and enjoy my company. I ended up talking to a man who’d brought his children along. When I asked him if he was worried about the party’s possible bad influences, he replied that this was the most wholesome thing they’d seen all week. What they encountered at school, he observed, was far less uplifting. There was no argument there. Despite the reason for the occasion, the feeling of inclusiveness made psychedelics seem incidental. People were what mattered, not chemical compounds.

“This is what it looks like,” I thought. An ideal was realized if only temporarily. Of course, it may seem tenuous as the basis for a new politics. But Acid Communism could be a component of a dynamic, experimental Leftism that is as interested in creativity as it is in critique. It would just take a bit of determination, and a strong dose of imagination.

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theculturedmarxist · 5 years

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On 13 October 1806 a young German philosopher, Georg Wilhelm Friedrich Hegel, had an encounter with world history. En route to their annihilation of the Prussian forces 24 hours later, Napoleon and his army were marching through the East German university town of Jena. Hegel couldn’t disguise his terror that in the ensuing chaos the recently completed manuscript of The Phenomenology of Spirit might get lost in the mail. But neither could he resist the drama of the moment. As he wrote to his friend Friedrich Niethammer, ‘I saw the emperor – this world-soul (Weltseele) – riding out of the city on reconnaissance. It is indeed a wonderful sensation to see such an individual, who, concentrated here at a single point, astride a horse, reaches out over the world and masters it.’

Two hundred years later, in rather more sedate circumstances, the Berkeley historian Daniel J. Sargent, addressing the American Historical Association, also evoked the world spirit. But this time it came in the person of Donald Trump and he was riding not on horseback, but on a golf cart. Trump can be compared to Napoleon, according to Sargent, because they are both destroyers of international order. In the wake of the French Revolution, Napoleon wrecked what was left of the legitimate order of Europe. Trump, in turn, has apparently ended the American world order, or, as Sargent prefers to call it, Pax Americana.

Sargent’s is an extraordinary suggestion, even though overenthusiastic historic comparisons have now become commonplace. Early in 2017 I was among those who thought they were seeing the end of the American century. But, even then, in the early days of the Trump administration, it seemed crucial to draw a distinction between American power and American political authority. Two years on, that distinction seems more important than ever.

The idea that Trump is a wrecker of the American-led world order rests on three claims. First, he is manifestly unfit for high office. That such a man can be elected president of the United States reveals a deep degeneration of American political culture and permanently damages the country’s credibility. Second, his capricious and crude pursuit of ‘America first’ has weakened America’s alliances and instigated a departure from globalisation based on free trade. Finally, he has triggered this crisis at a moment when China poses an unprecedented challenge to Western-led globalisation. Each of these claims is hard to deny, but do they in fact add up to a historically significant shift in the foundations of America’s global power?

No question, Trump has done massive damage to the dignity of the American presidency. Even allowing for the personal and political failings of some previous incumbents, he marks a new low. What ought to be of no less concern is that he has received so little open criticism from the supposedly respectable ranks of the Republican leadership. Similarly, American big business leaders, though sceptical of Trump, have profited from his administration’s tax cuts and eagerly assisted in dismantling the apparatus of environmental and financial regulation. He has been applauded by the section of the US media that caters to the right. And a solid minority of the electorate continues to give him its wholehearted support. What is worrying, therefore, isn’t simply Trump himself, but the forces in America that enable him.

Of course, Trump isn’t the first Republican president to evoke a mixture of outrage, horror and derision both at home and abroad. Both Ronald Reagan and George W. Bush were accused, in their time, of endangering the legitimacy of the American world order. The cultural conservatism and overt nationalism of the American right is fiercely at odds with bien pensant global opinion. This culture clash has historical roots in America’s domestic struggles over civil rights, the women’s and gay liberation struggles, and in the worldwide protest movement against America’s brutal war in Vietnam. Since the days of Nixon and the ‘Southern strategy’, the Republicans have been progressively digging in, consolidating their grip on the white electorate in the South and Midwest. By the 1980s the Republican Party was an uneasy coalition between a free-market, pro-business elite and a xenophobic working and lower-middle-class base. This was always a fragile arrangement, held together by rampant nationalism and a suspicion of big government. It was able to govern in large part owing to the willingness of Democratic Party centrists to help with the heavy lifting. The Nafta free-trade agreement between the US, Mexico and Canada was initiated by George H.W. Bush, but carried over the line in 1993 by Bill Clinton, against the opposition of the American labour movement. It was Clinton’s administration that righted the fiscal ship after the deficit excesses of the Reagan era, only for the budget to be blown back into deficit by the wars and tax cuts of the George W. Bush administration.

Meanwhile, the broad church of the Republican Party began to radicalise. In the 1990s, with Newt Gingrich and Karl Rove setting the tone, the battle lines hardened. With the Iraq War going horribly, and the Democrats taking control of Congress in 2006, the right became ever more dominant within the Republican Party. In 2008, in the midst of the financial crisis, the Republicans in Congress abandoned the Bush administration. The financial crisis-fighting of Hank Paulson as Bush’s Treasury secretary and Ben Bernanke at the Fed relied on the Democrats for congressional support. Elite leadership of the Republican Party collapsed. John McCain chose the shockingly unqualified Sarah Palin as a running mate in the 2008 election because she was hugely popular with the Republican base, who revelled in the outrage she triggered among liberals. Barack Obama’s victory in that election only exacerbated the lurch to the right. The Republicans in Congress put up a wall of opposition and indulged the populist right in openly questioning his legitimacy as president. The defeat of the centrist Mitt Romney in 2012 caused a further, decisive slide to the right, opening the door for Trump. In 2016 no major corporation was willing to sponsor the convention that nominated Trump as the Republican presidential candidate: their brand advisers were too worried that Confederate flags would be waving in the convention hall. His is the voice of the right-wing base, energised by funding from a small group of highly ideological oligarchs, no longer constrained by the globalist business elite.

A cynic might say that Trump simply says out loud what many on the right have long thought in private. He is clearly a racist, but the mass incarceration of black men since the 1970s has been a bipartisan policy. His inflammatory remarks about immigration are appalling, but it isn’t as though liberal centrists would advocate a policy of open borders. The question – and it is a real question – is whether his disinhibited rhetoric announces a disastrous slide from the hypocrisies and compromises of the previous status quo into something even darker. The concern is that he will trigger an illiberal chain reaction both at home and abroad.

At G20, G7 and Nato summits, the mood is tense. The rumour that the US is planning to charge host governments ‘cost plus 50 per cent’ for the military bases it has planted all over the world is the latest instance of a stance that at times seems to reduce American power to a protection racket. But for all the indignation this causes, what matters is the effect Trump’s disruptive political style has on the global power balance and whether it indicates a historic rupture of the American world order. How much difference does the US being rude to European Nato members, refusing to co-operate with the WTO, or playing hardball on car imports really make?

This is not merely a debating point. It is the challenge being advanced by the Trump administration itself in its encounters with its allies and partners. Do America’s alliances – do international institutions – really matter? The administration is even testing the proposition that transnational technological and business linkages must be taken as given. Might it not be better for the US simply to ‘uncouple’? Where Trump’s critics argue that at a time when China’s power is increasing the US should strengthen its alliances abroad, the Trumpists take the opposite view. For them it is precisely in order to face down China that the US must shake up the Western alliance and redefine its terms so that it serves American interests more clearly. What we are witnessing isn’t just a process of dismantling and destruction, but a deliberate strategy of stress testing. It is a strategy Trump personifies, but it goes well beyond him.

In October 2018 the giant Nimitz-class aircraft carrier USS Harry S. Truman unexpectedly pulled out of the Eastern Mediterranean, where its planes had been bombarding IS’s positions in Syria. It sailed into the Atlantic and then suddenly and without warning headed north. Aircraft carriers don’t do this: their itineraries are planned years ahead. This was different. The Truman and its escorts headed full steam to the Arctic, making it the first carrier group to deploy there for 27 years, backing up Nato’s war games in Norway. The consternation this caused delighted the Pentagon. Unpredictable ‘dynamic force employment’ is a key part of its new strategy to wrong-foot America’s challengers.

The Harry S. Truman is a controversial ship. The Pentagon would like to scrap it in favour of more modern vessels. Congress is pushing back. The White House wants more and bigger carrier groups; the navy says it wants 12 of them. The Nimitz-class behemoths commissioned between 1975 and 2009 are to be replaced by a new fleet of even more gigantic and complex Ford-class vessels. All have their priorities, but what everyone in Washington agrees on is the need for a huge military build-up.

The resignation of General James Mattis as defence secretary at the end of 2018 sparked yet another round of speculation about the politicking going on inside the Trump administration. But we would do better to pay more attention to his interim replacement, Patrick Shanahan, and the agenda he is pursuing. Shanahan, who spent thirty years at Boeing, is described by one insider as ‘a living, breathing product of the military-industrial complex’. Under Mattis he was the organisational muscle in a Defence Department with a new focus, not on counterinsurgency, but on future conflicts between great powers. Shanahan’s stock in trade is advanced technology: hypersonics, directed energy, space, cyber, quantum science and autonomous war-fighting by AI. And he has the budget to deliver. The Trump administration has asked for a staggering $750 billion for defence in 2020, more than the spending of the next seven countries in the world put together.

Declinists will point out that the US no longer has a monopoly on high-tech weaponry. But that is grist to the mill of the Trump-era strategists. They recognise the threat that great-power competition poses. Their plan is to compete and to win. In any case, most of the other substantial military spenders are American allies or protectorates, like Saudi Arabia or the European members of Nato. The only real challenges are presented by Russia and China. Russia is troublesome and the breakdown in nuclear arms control poses important and expensive questions for the future. But Russia is the old enemy. Shanahan’s mantra is ‘China, China, China’.

The ‘pivot’ in American strategy to face China was initiated not by Trump but by Obama in 2011, under Secretary of State Hillary Clinton. Even then, despite their far more tactful leadership, it caused some crashing of gears. The problem is that containing China is not what Washington’s system of alliances is designed to do. From the early 1970s, the days of Nixon and Kissinger, China was enrolled as a US partner in keeping the balance of power with the Soviet Union. Given half a chance, Trump would like to essay a reverse-Kissinger and recruit Russia as an ally against China. But Congress and the defence community will have none of that. Instead, the US is doubling down on its Cold War alliances in urging both South Korea and Japan to increase their defence efforts. This has the additional benefit that they will have to buy more American equipment. If the Vietnamese regime too were to veer America’s way, Washington would surely welcome it with open arms.

None of this is to say that Trump’s version of the pivot is coherent. If containment of China is the aim, America’s Asian partners must wonder why the president scrapped the Trans-Pacific Partnership trade and investment deal within days of taking office. That elaborate package was the foundation of Obama’s China-containment strategy. But for Trump and his cohorts that is muddled thinking. You cannot build American strength on the back of a giant trade deficit. Washington is no longer willing to pay for military co-operation with economic concessions: it wants both greater contributions and more balanced trade.

In Europe the Trump administration is proceeding on the same basis. Trump’s antipathy towards the EU and its political culture is disconcerting. But the problem of burden-sharing has haunted Nato since its inception, and until the 1980s, at least, the Europeans were significant contributors. Until 1989 Germany’s Bundeswehr was a heavily armoured and mechanised force of 500,000 men with a mobilisation strength of 1.5 million. Though its loyalty to the Federal Republic wasn’t in doubt, it was unmistakably a descendant of Germany’s military past. The break following the end of the Cold War was dramatic, not just in Germany but across Europe. Spending collapsed; conscription was abolished; Europe’s contribution to Nato’s effective strength dwindled. There were also deep disagreements between Germany, France and the US over strategic priorities, particularly on Iraq and the war on terror. But differences in threat-perception are no excuse for the dereliction of Europe’s security landscape. If Europe really feels as safe as it claims to, it should have the courage to push for even deeper cuts. Instead, it continues to maintain military establishments which, taken together, make it the world’s second or third largest military spender, depending on how you add up the Chinese budget. But given that it is spread across 28 poorly co-ordinated, undersized forces, Europe’s $270 billion in defence spending isn’t enough to buy an adequate deployable military capacity. Aside from its value as a work-creation measure, the only justification for this huge waste of resources is that it keeps the Americans on board.

The result is a balance of hard power that has for the last thirty years been extraordinarily lopsided. Never before in history has military power been as skewed as it is today. For better or worse, it is America’s preponderance that shapes whatever we call the international order. And given how freely that power has been used, to call it a Pax Americana seems inapposite. A generation of American soldiers has grown used to fighting wars on totally asymmetrical terms. That for them is what the American world order means. And far from abandoning or weakening it, the Trump administration is making urgent efforts to consolidate and reinforce that asymmetry.

How can the US afford its military, the Europeans ask. Is this just another instance of America’s unbalanced constitution? Isn’t there a risk of overstretch? That was certainly the worry at the end of the 1980s, and it recurred in the fears stoked during the Bush era by critics of the Iraq War and budget hawks in the Democratic Party. It doesn’t play much of a role in the current debate about American power, and for good reason. The fact is that for societies at the West’s current level of affluence, military spending is not shockingly disproportionate. The Nato target, which the Europeans huff and puff over, is 2 per cent of GDP; US spending is between 3 and 4 per cent of GDP. And to regard this straightforwardly as a cost is to think in cameralist terms. The overwhelming majority of the Pentagon’s budget is spent in the US or with close allies. The hundreds of billions flow into businesses and communities as profit, wages and tax revenue. What’s more, the Pentagon is responsible for America’s most future-oriented industrial policy. Defence R&D was one of the midwives of Silicon Valley, the greatest legitimating story of modern American capitalism.

If Congress chose, defence spending could easily be funded with taxation. That is what both the Clinton and Obama administrations attempted. The Republicans do things differently. Three of the last four Republican administrations – Reagan, George W. Bush and now Trump – combined enormous tax cuts for the better-off with a huge surge in defence spending. Why? Because they can. As Dick Cheney declared, to the horror of beltway centrists: ‘Reagan showed that deficits don’t matter.’ US Treasuries will be a liability for future American taxpayers, but by the same token they constitute by far the most important pool of safe assets for global investors. Foreign investors hold $6.2 trillion in US public debt, 39 per cent of the debt held by investors other than America’s own government agencies. US taxpayers will be making heavy repayments long into the future. But they will make those payments in a currency that the US itself prints. Foreigners are happy to lend in dollars because the dollar is the pre-eminent global reserve currency.

The hegemony of the dollar-Treasury nexus in global finance remains unchallenged. The dollar’s role in global finance didn’t just survive the crisis of 2008: it was reinforced by it. As the world’s banks gasped for dollar liquidity, the Federal Reserve transformed itself into a global lender of last resort. As part of his election campaign in 2016, Trump undertook an extraordinary vendetta against Janet Yellen, the Fed chair. But he was more restrained after he took office, and his appointment of Jerome Powell as her successor was arguably his most important concession to mainstream policy opinion. Needless to say, Trump is no respecter of the Fed’s ‘independence’. When it began tightening interest rates in 2018 he pushed back aggressively. (As a man who knows a thing or two about debts, he prefers borrowing costs to be low.) His bullying scandalised polite opinion. But rather than undermining the dollar as a global currency, his interventions were music to the ears of hard-pressed borrowers in emerging markets. The same applies to the giant fiscal stimulus that the Republicans launched with their tax cuts: despite rumblings of a trade war, it has kept the American demand for imports – a key element of its global leadership – at record levels.

The world economic order that America oversees was not built through consistent discipline on the part of Washington. Discipline is for crisis cases on the periphery, and dispensing it is the job of agencies like the IMF and the World Bank. Both have been through phases of weakness; in a world in which private funding is cheap and abundant even for some of the poorest countries in the world, the World Bank is struggling to define its role. But the IMF is in fine fettle, largely because the Obama administration pushed the G20 to add $1 trillion to its funding in 2009. So far the Trump administration has shown no interest in sabotaging Christine Lagarde. Over the latest bailout for Argentina, the Americans were notably co-operative. A key issue will be the rollover of the crisis-era emergency funding; from the point of view of international economic governance that may prove to be the most clear-cut test yet of the stance of the Trump presidency.

A stark illustration of the asymmetrical structure of American world order came in recent months in the use of the dollar-based system of invoicing for international trade to threaten sanctions against those tempted to do business with Iran. This outraged global opinion; the Europeans were even roused to talk about the need for ‘economic sovereignty’. What they are upset about isn’t the lack of order, but America’s use of it. To many, Trump’s withdrawal from the Iran nuclear agreement is another indication of American unreliability and unilateralism. But why is anyone surprised? It took extraordinary political finesse on the part of the Obama administration to secure backing for the Iran deal in Washington. It was always more than likely that a Republican administration would repudiate it. That may be disagreeable but it can hardly be described as a rupture with the norms of American world order. The system is hierarchical. While others are bound, America retains the sovereign freedom to choose. And that includes the right to revert to the cold war it has been waging against the Iranian Revolution since 1979.

The same harsh logic applies when it comes to the Paris Agreement on climate change. Clearly, it is a disaster that the US has pulled out. But Congress and the George W. Bush administration did the same to the Kyoto Protocol at the beginning of the century. Moves like this should not be interpreted as a rejection of international order tout court, let alone as an abdication of American leadership. The Trump administration has a clear vision of an energy-based system of American leadership and influence. It is based on the transformative technological and business breakthrough of fracking, which has broken the grip of Russia and the Saudis on oil markets and is turning the US into a net exporter of hydrocarbons for the first time since the 1950s. Liquefied natural gas is the fuel of the future. Terminals are being built at full speed on the Texas shoreline. Fracking was originally a wildcat affair but big corporate money is now pouring in. The oil giant ExxonMobil is back (after a weak commercial patch and Rex Tillerson’s humiliating stint at the State Department), investing heavily in huge new discoveries in Latin America. All this will be horrifying to anyone convinced that the future of humanity depends urgently on decarbonisation. But again it is unhelpful, if the aim is to grasp the reality of international order, to conflate it with a specifically liberal interpretation of that idea.

If Republican policy is just Republican policy, American military power is waxing not waning, and the dollar remains at the hub of the global economy, what exactly is it that is broken? The clearest site of rupture is trade, and the associated geopolitical escalation with China. The US is engaged in a sustained and effective boycott of the WTO arbitration system. But the WTO has been ailing for a long time. Since the Doha round of negotiations became deadlocked in the early 2000s it has made little contribution to trade liberalisation. In any case, the idea that legal agreements such as those done at the WTO are what drives globalisation puts the cart before the horse. What really matter are technology and the raw economics of labour costs. The container and the microchip are far more important motors of globalisation than all the GATT rounds and WTO talks put together. If in the last ten years globalisation appears to have stalled, it has more to do with a plateau in the development of global supply chains than with backsliding into protectionism.

In this regard the Trump administration’s aggressive attack on America’s regional trade arrangements is more significant than its boycotting of the WTO. It is in regional integration agreements that the key supply chain networks are framed. The abrupt withdrawal of the US, in the first days of the Trump presidency, from TPP in the Asia-Pacific region and TTIP in the Atlantic, was a genuine shock. But it is far from clear that either arrangement would have been pursued with any energy by a Hillary Clinton administration. She would no doubt have shifted position more gracefully. But the political cost of pushing them through Congress might well have been too high.

In spring 2017 there was real concern that Trump might abruptly and unilaterally cancel Nafta – apparently the hundredth day of his presidency had been set as the occasion. But that threat was contained by a concerted mobilisation of business interests. Once the negotiations with Mexico and Canada started, the tone was rough. In Robert Lighthizer as his trade representative, Trump has found a bully after his own heart. But again, if you look back at the history of Nafta and WTO negotiations, tough talk is par for the course. In the end, a replacement for Nafta emerged, in the form of the United States Mexico Canada Agreement (USMCA). Apart from minor concessions on dairy exports to Canada and intellectual property protection for American pharmaceuticals, its main provisions concerned the car industry, which dominates North American trade. To escape tariffs, 40 per cent of any vehicle produced in Mexico must have been manufactured by workers earning $16 an hour, well above the US minimum wage and seven times the average manufacturing wage in Mexico. Three-quarters of a vehicle’s value must originate inside the free-trade zone, restricting the use of cheap imported components from Asia. This will likely induce a modification but not a wholesale dismantling of the production networks established under Nafta. Though it was not endorsed by US trade unions, it wasn’t repudiated by them either. As the American Federation of Labour and Congress of Industrial Organisations commented, the effect will depend on how it is implemented.

The auto industry was at the heart of the Nafta renegotiation and it is the critical element in simmering US-EU trade tensions too. Let there be no false equivalence, however: the incomprehension and disrespect shown by the White House towards the EU is unprecedented. It isn’t clear that Trump and his entourage actually grasped that America no longer maintains bilateral trade deals with individual members of the EU. Trump’s open advocacy for Brexit and encouragement of further challenges to the coherence of the EU has been extraordinary. The use of Section 232 of the Trade Expansion Act to investigate car imports from Germany as a threat to American national security is absurd. Such things mark a bewildering break with previous experience. That said, Trump’s obsession with the prevalence of German limousines in swanky parts of New York does highlight another painful imbalance in transatlantic relations: the persistent European trade surplus. Of course America contributes to this imbalance with its disinhibited fiscal policy: the better off Americans feel, the more likely they are to buy German cars. But as the Obama administration repeatedly pointed out, Europe’s dogged refusal to stimulate faster growth is as bad for Europe as it is for the world economy. The scale of the Eurozone’s overall current account surplus is highly unusual by historical standards and is both a vulnerability for Europe, leaving its producers hostage to foreign demand, and a potential source of global shocks.

Europe’s freeriding may undermine the global order, but the EU does not mount a direct challenge to US authority. China is different, and that is what truly marks out the foreign relations of our current moment as a break with the decades since the end of the Cold War. No one, including the Chinese, anticipated how rapidly the Trump administration would escalate tensions over trade in 2018 or that this would evolve into a comprehensive challenge to China’s presence in the global tech sector. The US has been putting pressure on its allies to cut the Chinese telecoms giant Huawei out of their plans for 5G, the next generation of internet technology. But here the US – and its allies – are in reactive mode: the original shock was China’s unprecedented growth.

China alone was responsible for a doubling of global steel and aluminimum capacity in the first decade of the 21st century. Its huge investment in R&D transformed it from a ‘third world’ importer of Western technology into a leading global force in 5G. As the likes of Navarro and Lighthizer see it, it was the naivety of enthusiasts for an American-led world order in the 1990s that allowed China’s communist-run state capitalism into the WTO. What the globalists did not understand was the lesson of Tiananmen Square. China would integrate, but on its own terms. That could be ignored in 1989 when China’s economy accounted for only 4 per cent of global GDP: now that figure is close to 20 per cent. As far as the American trade hawks are concerned, competition within an agreed international order is to be welcomed only so long as the competitors agree to play by America’s rules, both economic and geopolitical. This was the lesson Europe was made to learn after the Second World War. It was the lesson that Japan was taught the hard way in the 1980s and early 1990s. If China refuses to learn that lesson, it must be contained.

America retains some huge advantages. But it would be dangerous, the argument goes, simply to count on those. Sometimes American preponderance has to be defended by a ‘war of manoeuvre’. The emerging American strategy is to use threats of trade policy sanctions and aggressive counter-espionage in the tech arena, combined with a ramping up of America’s military effort, to force Beijing to accept not just America’s global preponderance but also its terms for navigation of the South China Sea. In pursuing this course the Trump presidency has a clear precedent: the push against the Soviet Union in the early 1980s by the Reagan administration, which deployed economic and political pressure to break what was perceived to be a menacing phase of Soviet expansion in the 1970s. Despite all the risks involved, for American conservatives that episode stands as the benchmark of successful grand strategy.

The reason the attempt to apply this lesson to present-day China is so shocking is that US business is entangled with China to an immeasurably greater degree than it ever was with the Soviet Union. If you are seeking a component of the American world order that is really being tested at the present moment, look no further than Apple’s supply chain in East Asia. Unlike South Korea’s Samsung, the Californian tech giant made a one-way bet on manufacturing integration with China. Almost all its iPhones are assembled there. Apple is an extreme case. But it is not alone. GM currently sells more cars in China than it does in the US. America’s farmers converted their fields wholesale to grow soy beans for export to China, only to find themselves cut out of their biggest market by Brazilian competitors. And it isn’t just American firms that are caught up in the escalation of tension. Important European, South Korean, Taiwanese and Japanese businesses have staked huge wagers on China.

Given these investments, one might have expected more pushback against Trump’s China strategy from US business. So far there has been little. The radical decoupling of the Chinese and American economies may be so horrible a prospect that business leaders simply prefer not to discuss it in public. They may be lying low hoping the row blows over. Or it may be that American business itself buys the increasingly pessimistic diagnosis of the US intelligence and defence community, who argue China’s persistent protectionism and economic nationalism may mean that it presents more of a threat than an opportunity. Even top ‘China hands’ like Steve Schwarzman and Hank Paulson have warned of a chill in the air.

The hardening of attitudes towards China is not confined to America. It was the Anglo-American intelligence consortium known as ‘Five Eyes’ that raised the alarm about Huawei’s capability to build back doors into the West’s most sensitive telecommunications networks. Canada and Australia are deeply concerned about Chinese penetration. The new pessimism about Sinocentric globalisation isn’t confined to security policy hawks, but shared by many mainstream economists and political scientists in US academia, the think-tank world, and journalists and commentators on Chinese affairs. The liberal version of the American world order is deeply influenced by strands of modernisation theory, the up to date version of which is encapsulated in the doctrine of the middle-income trap. Very few large countries have managed to grow beyond China’s current level of income. Those that have done so have kitted themselves out with the full set of liberal institutions and the rule of law. On this reading, China is in a precarious position. Xi’s authoritarian turn is a decisive step in the wrong direction. Further frequently cited signs of Chinese weakness include ethnic tensions and the ageing of the population as a long-term effect of the one-child policy. There is a belief, held well beyond the administration, that the tide may be turning against Beijing and that now is the moment for the West to harden the front.

This would indeed constitute a break with the narrative of globalisation since the 1990s. But it would hardly be a break in the American-led world order. To imagine the American world order as fully global is after all a relatively recent development. After 1945, the postwar order that is generally seen as the non plus ultra of American hegemony was built on the hardened divisions of the Cold War. Where China is concerned, the issue is not so much America’s intention to lead as whether others are willing to follow. Building the Cold War order in Europe and East Asia was comparatively easy. Stalin’s Soviet Union used a lot of stick and very little carrot. The same is not true of modern-day China. Its economy is the thumping heart of a gigantic East Asian industrial complex. In the event of an escalation with China, particularly in East Asia, we may find ourselves facing not so much an end of the American-led order, as an inversion of its terms. Where the US previously offered soft-power inducements to offset the threat of communist military power, backed up by hard power as a last resort, in the next phase the US may become the provider of military security against the blandishments offered by China’s growth machine.

But this is premature. As of today, two years into the Trump presidency, it is a gross exaggeration to talk of an end to the American world order. The two pillars of its global power – military and financial – are still firmly in place. What has ended is any claim on the part of American democracy to provide a political model. This is certainly a historic break. Trump closes the chapter begun by Woodrow Wilson in the First World War, with his claim that American democracy articulated the deepest feelings of liberal humanity. A hundred years later, Trump has for ever personified the sleaziness, cynicism and sheer stupidity that dominates much of American political life. What we are facing is a radical disjunction between the continuity of basic structures of power and their political legitimation.

If America’s president mounted on a golf buggy is a suitably ludicrous emblem of our current moment, the danger is that it suggests far too pastoral a scenario: American power trundling to retirement across manicured lawns. That is not our reality. Imagine instead the president and his buggy careening around the five-acre flight deck of a $13 billion, Ford-class, nuclear-powered aircraft carrier engaged in ‘dynamic force deployment’ to the South China Sea. That better captures the surreal revival of great-power politics that hangs over the present. Whether this turns out to be a violent and futile rearguard action, or a new chapter in the age of American world power, remains to be seen.

#hegel #pax americana #imperialism #american century #politics #21st century #book reviews

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