Wednesday, September 29, 2010

Every country has its own version of the Bush Administration

...and some days I want to expand that and say every jurisdiction does. But lets talk China for a moment. Apparently, the Americans are suddenly concerned that China, having gone hot and cold in regional politics, is going cold again:
Hu and Obama met Thursday on the sidelines of the U.N. General Assembly in New York, amid increasing regional angst at what the Obama administration and several East Asian countries see as China's increasingly aggressive and arrogant foreign policy.
Of course, it's just possible the Chinese have actual reasons for what they're doing:
There are currently two factions shaping the internal Chinese debate. One could be described as a “status quo” faction that does not seek major changes in the relationship with the United States. It sees the U.S. as a benign power supporting an international system that is conducive to continued Chinese economic, scientific, and cultural development – despite longstanding contentious, but manageable, disagreements on Taiwan, trade, and human rights.

The other faction, which is less cohesive but more bellicose, believes the United States feels threatened by China’s rapid development and that the U.S. is seeking to contain and constrain it in a variety of ways, including aggravating disputes between China and its neighbors and limiting Chinese access to resources, markets, and technology. These diffuse but potentially volatile anxieties are being employed by a variety of anti-status quo political personalities in the broader internal struggle over China’s future - and the future of the Chinese Communist Party - that is animating the upcoming transition to a new Chinese administration.

The split between these factions within the Committee has led to deadlock. Until the Committee comes to a decision, Chinese officials do not have a policy to guide engagement with the United States. So they are in a holding pattern that is reflected in their interactions with their U.S. counterparts.

U.S. officials should not be surprised by the feelings of distrust toward the United States. Over the past several decades the United States pursued policies that some members of the Chinese leadership found threatening.
What's really rich is hearing US policy makers describe China's foreign policy as "aggressive and arrogant". Until China invades an oil-rich state on the pretense of finding weapons of mass destruction, kills more than a million people in the process, and then never finds a single shred of evidence to justify its crimes, I think the US should really STFU about China's foreign policy.

Monday, September 27, 2010

A few lessons

As long as Axelrod was helping Obama capture the White House, it was easy to assume both men subscribed to the same worldview...

The development shattered the tentative understanding between Axelrod and the wonks. Geithner believed that you cease to be an advanced economy once the government starts dissolving contracts. Axelrod and other senior political aides, like Gibbs, felt the administration had to respond to the country’s legitimate outrage. They began to worry that Geithner’s principled caution, while noble, could bring the administration down. The president was exasperated but ultimately sided with Geithner on the letter of the law.

Politically, it didn’t work. “If you were going to pick a moment when the whole thing turned on Obama,” says a longtime Democratic consultant, “it was the moment the administration saved the AIG bonuses.”
There's so much that could be said about that quote, from Noam Scheiber's TNR article on David Axelrod. But two points that I'd really like to focus on:

1) Note what you can and can't do in an "advanced" economy: the UAW saw their contracts and pension agreements torn up like confetti to save GM and Chrysler, but banker contracts are sacrosanct. This, fundamentally, is Obama's worldview. (The GM-AIG comparison is entirely fair, because both companies were on government life support at the time.) The difference between how workers of different collars, and colours, were treated is a pretty good indication of the ruling ideology in the west these days.

2) There's been an argument since, oh, before he was even inaugurated about people being disillusioned with Obama. I've chimed in on this more than once, but re-read that first line I quoted again. David Axelrod is probably closer to Barack Obama than all but one or two men not directly related to the President. They spoke several times daily during the campaign, Axelrod knows Obama's politics better than almost anyone alive.

And even he has faced the same problems of reconciling his expectation of candidate Obama with the reality of President Obama.

That seems worth noting, to me.

Friday, September 24, 2010


Jesus, two weeks without a single post. That's a new level of suck for me, I think.

Apologies. Real life has intervened in a most obtrusive way. Meanwhile, I laughed quite heartily at this. If you've been to any university in the last 20 years or so, I'd wager the dialogue between Abbas and Fyvush sounds awfully familiar.

Also funny: A capella Inception trailer:

I challenge you to not be walking around all weekend and not occasionally let loose with a loud BRAAAAAWM.

Friday, September 10, 2010

Peak oil getting taken seriously?

Here's some news from the UK, from a while back:
But documents obtained under the FoI Act seen by the Observer show that a "peak oil workshop" brought together staff from the DECC, the Bank of England and Ministry of Defence among others to discuss the issue.

A ministry note of that summit warned that "[Government] public lines on peak oil are 'not quite right'. They need to take account of climate change and put more emphasis on reducing demand and also the fact that peak oil may increase volatility in the market."
And here's something more recent from Germany:
The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military. The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the "total collapse of the markets" and of serious political and economic crises.

The study, whose authenticity was confirmed to SPIEGEL ONLINE by sources in government circles, was not meant for publication. The document is said to be in draft stage and to consist solely of scientific opinion, which has not yet been edited by the Defense Ministry and other government bodies.
Ah yes, something that consists "solely" of scientific opinion, without being filtered through the Ministry first. How terrible. The actual conclusions of the report aren't terribly surprising, and indeed are the kind of thing we've been expecting for years. For example:
Politics in place of the market: The Bundeswehr Transformation Center expects that a supply crisis would roll back the liberalization of the energy market. "The proportion of oil traded on the global, freely accessible oil market will diminish as more oil is traded through bi-national contracts," the study states. In the long run, the study goes on, the global oil market, will only be able to follow the laws of the free market in a restricted way. "Bilateral, conditioned supply agreements and privileged partnerships, such as those seen prior to the oil crises of the 1970s, will once again come to the fore."

Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."

Relapse into planned economy: Since virtually all economic sectors rely heavily on oil, peak oil could lead to a "partial or complete failure of markets," says the study. "A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis."
The return to pre-eminence of politics, as opposed to the domination of market mechanisms, is something I've written about before.

Of course, this presumes that you think of oil as a "market" good to start with, which is questionable given that America's fought at least two wars to keep the flow of oil uninterrupted.

Interesting that both stories give the impression that governments are discussing this all quite seriously, but don't want to go public with it because it would freak the norms.

While we're discussing it, what if peak coal arrives synchronous with peak oil? Are totally effed?

Boy, if that turns out to be true a whole lot of Ontario Progressive Conservatives are going to owe Dalton McGuinty an apology over the caterwauling that put us through when he started migrating away from coal.