Mike Kueber's Blog

March 26, 2014

Crimea

Filed under: Issues,Politics — Mike Kueber @ 1:54 am
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I have not closely followed the Russian take-over of Crimea, but I was stuck by a recent news article revealing that 80% of the people in Crimea were Russians. This made me think of the analogous situation in Northern Ireland, where most of the people were Protestants although Ireland as a whole is controlled by the dominant majority, Catholics. Should Protestant Northern Ireland be allowed to align itself with Protestant Great Britain or be forced to stay with Catholic Ireland? Similarly, should Crimea with its dominant Russian majority be allowed to align itself to Russia or be forced to stay with Ukraine where it will be a small minority? The fitting adage is damned if you do, damned if you don’t.

Any article in this week’s Time magazine provided further support for the Russian takeover of Crimea.  The article described the circumstances of how Russia originally gave up sovereignty over Crimea:

  • That gift was made in 1954 on the whim of Nikita Khrushchev, who was then the leader of the Soviet Union. He decided to take Crimea away from Russia and transfer it to Ukraine at a time when the placement of their borders didn’t really matter. (Legend has it that Khrushchev was drunk when he signed the papers.) All three were part of the Soviet Union, whose collapse seemed unthinkable. But when it all broke apart in 1991, Crimea and its majority-Russian population found themselves in what felt like a foreign land.”

Based on this background, I think President Obama has reacted appropriately to the Russian take-over – i.e., he mildly objected, but did nothing significant, because this was not an unreasonable action by the Russians.

July 18, 2011

Sunday Book Review #39 – The Next Decade by George Friedman

As readers of this blog may recall, I previously reviewed George Friedman’s 2010 classic, The Next 100 Years, and The Next Decade is an obvious attempt to trade on the success of the
earlier book.  In my review of the earlier book, I noted the following as Friedman’s most interesting predictions for the next century:

  1. Wars are inevitable.
  2. America will dominate the next century.
  3. Impersonal forces shape history; individuals are not significant in the vast historical trends of geopolitics.

Friedman begins The Next Decade by explaining that, while individuals are not significant in geopolitics, their decisions do significantly affect our lives in the short-term.  His goal with The Next Decade is to describe those decisions and their likely consequences.  Friedman suggests that, ironically, making predictions for the next century is easier than predicting the next decade
because predicting an individual’s short-term action is more difficult than predicting a country’s long-term action.  That makes sense, but Friedman fails to adequately explain why short-term misjudgments by individual leaders eventually get blotted away by geopolitics.

Friedman’s first major point in The Next Decade is that America, which has always been a republic, has since WWII become an empire and that it hasn’t learned to how an empire sustains itself.  Using ancient Rome and early 1900s Britain as examples, Friedman says that empires don’t rule by brute force, but rather they maintain their dominance by setting regional players against each other and balancing their power.

America’s war on terror, according to Friedman, was a huge mistake because its objective was misstated.  Instead of trying to cripple al Qaeda, we tried to eliminate the threat of terrorism everywhere, which is an impossible objective that could bankrupt the country.  “Recovering from the depletions and distractions of this effort will consume the United States over the next ten
years.”

Friedman suggests that American foreign policy is too often debated in terms of idealism and realism, but that power is really the key – “Power as an end in itself is a monstrosity that does not achieve anything lasting and will inevitably deform the American regime.  Ideals without power
are simply words – they can come alive only when reinforced by the capacity to act.  Reality is understanding how to wield power, but by itself it doesn’t guide you toward the end to which your power should be put….  Realism and idealism are not alternatives but necessary complements.  Neither can serve as a principle for foreign policy by itself
.”

Three Machiavellian principles should be applied to serve our strategic interests:

  1. To the extent possible, enable a balance of power in each region to consume energies and divert threats from the United States.
  2. Maneuver others into bearing the major burden of confrontation or conflict, supporting
    those countries with economic benefits, military technology, and promises of military intervention if required.
  3. Use military intervention only as a last resort, when the balance of power breaks down and allies can no longer cope with a problem.

Friedman spends the bulk of The Next Decade going from country to country and region to region, describing what America needs to do achieve an acceptable balance of power.  His starting position is that Bush’s post-9/11 War on Terror was a huge mistake because terror was never an existential threat to America and therefore shouldn’t have been treated as a threat that transcended all others.  Rather, our objective should have been to manage the threat (and public insecurity).  Perhaps that is what President Obama is doing now.

Because America became obsessed with terrorism post-9/11, it failed to manage several regional balances of power:

  • Israel is becoming dominant over the Arabs.
  • India is becoming dominant over Pakistan.
  • Iran is becoming dominant over Iraq.
  • Germany and Russia may unite and dominate the remainder of Europe.
  • Japan and its navy may dominate China.

Regarding Israel, Friedman points out the America was unpopular in the Middle East even before it became Israel’s sponsor, so it is inaccurate to blame Israel for our current unpopularity in the region.  But he also believes that Israel is less important strategically to America since the end of the Cold War, and this should enable us to expend fewer resources.

Ironically, the second and third dot-points above reveal that countries we have been trying to help – Pakistan and Iraq – have been so weakened by our help that they are in danger of being eclipsed by their neighbors – India and Iran.

Regarding Germany and Russia, Friedman thinks they are individually powerful, but because of synergies they would be dangerous as close allies, with Russia providing the people and natural resources and Germany providing the technology.  Germany no longer has much need for America, and we can expect to see our relationship deteriorate in the future.  But we want to prevent Germany and Russia from getting too close, and Poland will be the key.

Despite all the talk about the Indian and Chinese economic juggernauts, Friedman is concerned that Japan, when it pulls out of its current economic slump, will feel pressured to address its insecurities over lack of resources (just as Germany, France, and Russia were insecure over their borders in the 1900s).  Because India is physically isolated, it doesn’t figure into this regional problem, but China and Japan have a long history of not liking each other, and Friedman believes
they will eventually clash, with Japan having a stronger hand because of the way its society is organized.

Friedman is not shy about admitting that America sometimes has to abandon a country that has been an ally in the past:

  • The United States made promises to Georgia that it now isn’t going to keep.  But when we look at the broader picture, this betrayal increases America’s ability to keep other commitments.  Georgia is of little importance to the United States, but is of enormous importance to Russia, guaranteeing the security of their southern frontier.  The Russians
    would be prepared to pay a substantial price for Georgia, and U.S. willingness to exit voluntarily should command a premium
    .”

Or that a President sometimes has to lie to the American people about what he is doing.  For example, Friedman thinks the President has to tell the American people that he is going to stop illegal drugs and illegal immigrants from coming in from Mexico, when, in fact, the President knows that this is impossible unless you legalize the drugs and have a national ID card.

I have previously opined that politics in America should “end at the water’s edge” and that foreign policy was above my pay grade.  After reading The Next Decade, I feel even stronger about those positions.  Yes, America is the arsenal of democracy and we believe in human rights, but we can’t be the world’s policeman.  Our government’s first obligation is to provide for our security, and sometimes that requires us to do business with undemocratic governments that are weak on human rights.  The conduct of our foreign policy is best left to people who are elected because they are effective and share our moral values.

January 16, 2011

Is America still the wealthiest country in the world?

Filed under: Economics,Finances — Mike Kueber @ 7:17 pm
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An America immigrant recently suggested to me that, because Americans have such a small rate of savings, the combined wealth of all Americans was less than that the wealth of citizens in many other countries, even including some emerging economies like China and India.  I assured him that he was wrong and displayed my confidence by making a gentlemen’s bet. 

GMy confidence was based on two well-known facts about wealth in the world – (1) American GDP is in a class of its own, and (2) America has more billionaires than any other country:

GDP

  1. United States – $14.6 trillion
  2. China – $7.8 trillion
  3. Japan – $4.5 trillion
  4. India – $3.3 trillion
  5. Germany – $2.9 trillion

Billionaires 

  1. United States – 422
  2. China – 66
  3. Russia – 65
  4. Germany – 57
  5. India – 52

After doing some extensive internet searching, I finally found a site that confirmed my educated guess.  A Huffington Post article contained information created by insurance giant Allianz that listed each country by the amount of financial assets (stocks, bank accounts, insurance) in private households.  At the top was the United States:

  1. United States – $41.6 trillion
  2. Japan – $14.6 trillion
  3. Germany $6.1 trillion
  4. United Kingdom – $6.1 trillion
  5. France – $5.0 trillion

A flaw with the preceding ranking of financial assets (a/k/a non-home wealth) is that is does not include real estate, but I am confident that the inclusion of real estate would not significantly affect the ratios because, although some Americans are upside-down with their mortgage, I believe Americans as a group has as much equity in their homes as do the residents of any other country.  In fact, according to the Federal Reserve Board, the home is the major component of personal net worth for the vast majority of Americans.   

I’m going to enjoy collecting on that gentlemen’s bet.

P.s., there has been a lot of talk about growing inequality of income and wealth in America, and the numbers provided by the previously cited report from UC-Santa Cruz reflect that inequality in America is worse than in most other countries and is getting worse.

January 7, 2011

America on the wane?

Filed under: Economics,History — Mike Kueber @ 4:57 pm
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By all accounts, the 20th century has been appropriately labeled the American century.  The principal reasons for this appellation are (a) the decisive role that America played in successfully concluding World War II, and (b) America’s status as the world’s only superpower following the Soviet implosion during Bush-41’s administration.  

Since WWII, America has been an economic juggernaut that has driven the world’s economy.  But ever since I was a kid, there have been continual assertions that America’s prime is past.  When I was a kid, it was the Russian president Nikita Khrushchev who famously said, “Whether you like it or not, history is only our side.  We will bury you.”  After Russia’s Sputnik beat America into space, John F. Kennedy campaigned in 1960 on a pledge to reverse America’s historical slide:

  • They want to ‘bury’ us, as Mr. Khrushchev says, but not necessarily by war – by possessing the most powerful military establishment, by boasting the most impressive scientific achievements, by dominating the most markets and trade routes, by influencing the most needy or neutral nations through aid and trade and diplomatic penetration.”

Symbolically, Kennedy said that America would be the first country to put a man on the moon, and Richard Nixon delivered on that pledge in 1969.  Fifty years later, America remains the only country with the scientific and economic muscle to put a man on the moon.

While I was growing up, Japan was a suicide-crazed enemy that we had defeated in WWII and a second-rate economic power.  Two things that I remember about Japan were (1) a variety of practical jokes with inappropriate touching that ended with the punch-line, “Japanese sneak attack,” and (2) the label on the bottom of any product that read, “Made in Japan,” meant the product was carnival-quality junk.

Gradually in the 70s and 80s, Japan earned a reputation as a solid democracy and a robust economy that produced high-quality products – e.g., Toyota and Honda cars, Seiko watches, etc.  I remember reading a plethora of news stories on how hard working, industrious, and law-abiding the Japanese people were and how it was only a matter of time before their economy surpassed that of the United States.  Then in 1991, its economic bubble began to deflate, and Japan experienced what was called the Lost Decade.  Because the next decade was only marginally better, the term is now the Lost Decades.

The current candidate to challenge American dominance is China.  Because of its large population and robust economic growth, virtually every pundit predicts that the Chinese economy will inevitably become the world’s largest.  What these pundits invariably fail to point out is that, although the U.S. population is less than one-fourth that of China, the American GDP of $14.6 trillion is almost triple that of the Chinese GDP of $5.7 trillion.  Next is Japan at $5.4 trillion and Germany $3.3 trillion.  India is 11th at $1.4 trillion.

Although these numbers reveal that China has a huge distance to go to catch America’s economy in absolute size, they fail to reveal the panoply of challenges posed by China’s masses of people and spottily developed infrastructure.  America doesn’t have a huge underclass to elevate.  And I haven’t even touched on the inherent American advantages related to its unsurpassed liberty.  For that see Michelle Malkin’s recent column on American ingenuity flowing from that liberty.  Suffice to say that it would be foolish to bet against the American economy or the American people any time in the near future.