Published on Thursday, September 23, 2010 by TomDispatch.com
“Make poverty history!” A catchy slogan, and an admirable aim, it was adopted by world leaders at the United Nations summit in
These were only two of the recent glaring signs of the sagging might of the globe’s “sole superpower,” now heavily indebted to
America’s Struggling Economy
It’s crystal clear that jobs and the economy have emerged as the key preoccupations of American voters as they approach the November 2nd midterm Congressional elections.
The economic “recovery” is proving anemic. An already weak gross domestic product (GDP) growth figure, 2.4% for the second quarter of 2010, was recently revised downward to 1.6%, and the Organization for Economic Cooperation and Development, consisting of the globe’s 30 richest countries, has predicted a paltry 1.2%
Soon after retiring as vice-chairman of the Federal Reserve, where he served for 40 years, Donald Kohn summed up the dire situation in this way: “The
Consider one measure of the depth of that hole: between December 2007 -- the official start of the Great Recession -- and December 2009, the American economy made eight million workers redundant. Even if the job market were to improve to the level of the boom years of the 1990s, it would still take until March 2014 simply to halve the present 9.6% unemployment rate and return it to a pre-recession 4.7%. Little wonder that James Bullard, president of the St. Louis Federal Reserve Bank, warned of the American economy creeping closer to the black-hole years of deflation experienced by
By now, the Obama administration’s $862 billion stimulus plan has largely worked its way through the system without having had much impact on job creation. And keep in mind that the high official unemployment rate is significantly less than the real figure. It doesn’t take into account part-time workers who would prefer full-time jobs, or those who have stopped seeking employment after countless failed attempts. In the end, the administration’s policy makers seem to have failed to grasp that a recession caused by a banking crisis is always much worse than a non-banking one.
Just as the Obama administration revised those anemic GDP growth rates downward,
While Western governments tried to overcome the investment slump at the core of the Great Recession indirectly through deficit spending,
Altogether, these measures boosted the GDP growth rate to 9% in 2009, just when the American economy was shrinking by 2.6%. Such a performance impressed the leaders of many developing countries, who concluded that
On the ideological plane, the spectacular failure of the Western banking system on which the private sector rests revived socialist ardor, long on the wane, among
The upsurge in government spending and generous bank lending policies led to increased investments by state-owned companies. Whether engaged in extracting coal and oil, producing steel, or ferrying passengers and cargo, such companies found themselves amply funded to upgrade their industrial and service bases, a process that created more jobs. In addition, they began to enter new fields like real estate.
Overall, the Great Recession in the West, triggered primarily by Wall Street’s excesses, provided an opportunity for
The Sacred Yuan and Gunboat Diplomacy
In March and early April, there was much sound and fury at the White House about
Instead, the Treasury delayed its report for three months. When released, it said that, while the yuan remained undervalued,
More worrying to White House policymakers is the way
By then, Beijing had locked horns with Washington, challenging the latter’s claim that the Yellow Sea is an international waterway, open to all shipping, including warships. This is an unmistakable sign that the Chinese Navy is preparing to extend its reach beyond its coastal waters. Indeed, plans are clearly now afoot to extend operations into the parts of the Pacific previously dominated by the
China’s naval high command now openly talks of dispatching warships to the waters between the Malacca Strait and the Persian Gulf, principally to safeguard the sea lanes used to carry oil to the People’s Republic of
Washington’s Iran Policy Challenged
Like Russia, China backed a fourth set of United Nations economic sanctions on Iran in June only after Washington agreed that the Security Council resolution would not include provisions that might hurt the Iranian people. Therefore, the resulting resolution did not outlaw either investment or participation in the Iranian oil and gas industry.
Two weeks later, Russian oil minister Sergey Shmatko struck back. He announced that his country would be “developing and widening” already existing cooperation with the Islamic Republic’s oil sector. “We are neighbors,” he emphasized. Russian oil companies were, he added, free to sell gasoline to Iran and ship it across the Caspian Sea, which the two countries share. The Kremlin also warned that if
As promised publicly and repeatedly, in August the Russians finally commissioned the civilian nuclear power plant near Bushehr, which they had contracted to build in 1994. It meets all the conditions of the International Atomic Energy Agency.
Little wonder, then, that
Soon after the enactment of CISADA,
In a black-market trade of monumental proportions, more than 1,000 tanker trucks filled with petroleum products cross from oil-rich Iraqi Kurdistan into
An even more blatant example of defiance of
An Irreversible Trend
In whole regions of the world,
Those familiar with stock exchanges know that the share price of a dwindling company does not go over a cliff in a free fall. It declines, attracts new buyers, recovers much of its lost ground, only to fall further the next time around. Such is the case with
For almost a decade,
As the high command at the Pentagon trains a whole new generation of soldiers and officers in counterinsurgency warfare, which requires the arduous, time-consuming tasks of mastering alien cultures and foreign languages, "the enemy," well versed in the use of the Internet, will forge new tactics. Given the growing economic strength of
© 2010 Dilip Hiro
Dilip Hiro is the author Blood of the Earth: The Battle for the World's Vanishing Oil Resources  (Nation Books), and most recently, After Empire: The Rise of a Multipolar World .
URL to article: http://www.commondreams.org/view/2010/09/23-8
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"The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and everything to lose--especially their lives." Eugene Victor Debs