The US needs a new "Truman Committee"

[modeski]

I may be hopelessly naive, but I still have some hope left that through some miracle (and political process), the Bush administration will be forced to account for their fiscal malfeasance surrounding the Iraq war.

Two congressmen, John F Tierny and Jim Leach submitted Resolution H.RES 116, which calls for "Creating a select committee to investigate the awarding and carrying out of contracts to conduct activities in Afghanistan and Iraq and to fight the war on terrorism".

It might not be enacted, but at least someone has had the balls to propose it. The way in which the US government under Bush doled out multi-billion dollar contracts to cronies is nothing short of war profiteering. The cost of the Iraq war is approaching $400bn, money that could have been put to so much better use.

This proposed select committee would be reminiscent of the U.S. Senate Special Committee to Investigate the National Defense Program, 1941-1948, set up by Senator Harry Truman, saving the country about $15bn then.

In some respects the corruption is about more than money, Bush and his cabal need to be held accountable for their actions. It's so frustrating that the majority of Americans (and others) seem so unaware, so wilfully ignorant of what's happening in their country, and how in recent history this would not have been tolerated.

[HStorm]

modeski said:

I may be hopelessly naive, but I still have some hope left that through some miracle (and political process), the Bush administration will be forced to account for their fiscal malfeasance surrounding the Iraq war.

Well, yeah, you are naive.

To be fair to Bushco (for which I see no purpose beyond sheer mental exercise), there's never been such a thing as an 'economical' war, nor a 'just' one. It was always going to be expensive, and even if it was fought for honest reasons - which on the whole it was not - it was always going to be the lesser of two evils, at best.

However. Let's forget being fair to Bushco, because they don't deserve it. The arrangement for the blatant carve-up of Iraq's economic assets and infrastructure began months before the invasion even got under way. And a great many of the companies that got whopping big slices of the pie have very close links to two notable figures in particular. Their names? You mean you can't guess? Oh go on, have a guess!

If I said the words, "Bush and Dick", would you be too busy drooling at the forbidden thoughts they invoke to spot the clue?

[modeski]

hstorm said:

And a great many of the companies that got whopping big slices of the pie have very close links to two notable figures in particular. Their names? You mean you can't guess? Oh go on, have a guess!

If I said the words, "Bush and Dick", would you be too busy drooling at the forbidden thoughts they invoke to spot the clue?

I can put the drooling aside for a moment to say that yes, I spot the clue. Isn't it amazing that so many can be aware of exactly what's going on, and who is involved, yet no one seems to be holding them to account for it? Watergate seems like a miniscule scandal in comparison.

[Naselus]

Well, the main problem with this is that the war is all that's keeping the US economy together. Dubya's made a terrible mess of the whole situation, and it's only because of the huge amounts of money that, just to name a few, Lockheed Martin and Haliburton are making from the war in Iraq that the economic situation in the US looks as (dubiously) healthy as it does.

The war is costing such a vast amount because Bushco need to keep spending enough money to keep the big corporations busy. True, it was never going to come cheap anyway, but the whole thing could have been handled far less expensively. But if it was, then profits for the big companies would fall, and so unemployment would rise, and the whole thing falls to bits.

In short, the war in Iraq is actually Bushco's economic policy. Spending $400 billion dollars has just about managed to hold the stock market steady, kept unemployment level, and allowed the money to keep moving around.

With logic like that, is it any wonder he had to steal two elections?

[HStorm]

In a way, that's the way the US economy has been run almost non-stop since the 1930's; it was the one serious downside for Americans of New Deal and the manipulation of the UK in World War II. The US economy is now so heavily-geared towards markets for military manufacturing that it's actually become dependent on it. Bill Clinton managed to reduce this to a significant degree, but the narrow-minded, unimaginative buffoons in Dubya's entourage (most particulary Dubya himself) didn't have remotely the know-how needed to keep it going when they came to power.

[Naselus]

To be fair, most western manufacturing companies are military in nature, simply because it's cheaper to make everything in China, and we don't want them building our tanks. I can't think of any real western industry that isn't in some way connected to the production of military hardware; 70% of Rolls Royce engines in the world are in Mig jet fighters, Most tanks are powered by Volkswagon or Ford, HumVees use Goodyear tyres...

[modeski]

You make a very good point, Naselus - and a scary one. No one in the West actually makes anything anymore. Since the 80's, the manufacturing sector has disappeared (apart from military-related products as we've discussed); now, everyone works either in the bloody service sector or with information technology.

With everything being outsourced, China, Japan and other countries owning so much of American debt, the global economy is terribly fragile at the moment, relying on the status quo. There seems to be no contingencies in place to protect against global economic recession. It's bloody scary.

[HStorm]

The US economy is under no threat from Japan; around 95% of the Japanese economy is controlled by the USA in return for the strategic military bases the Japs allow on their soil. That's the reason for the booms in Japan's economic and scientific fields since the 1960's. And we shouldn't underestimate just how much production there still is in the USA, even though it has been in a steady and deliberate decline for around fifteen years.

But there is considerable danger to the West from allowing China to become one of the world's leading manufacturing powers. The figures involved in the American trade deficit with the PRC is large enough to fund the US Air Force for years.

[modeski]

Yes, sorry I was mistaken with Japan. I'd been reading about Okinawa earlier. The situation with China is really interesting, merits further investigation methinks.

[Naselus]

Well, the basis of the concept is that the increasing wealth that is being provided to the Chinese workforce will allow them to demand greater civil liberty from the regime in Bejing, which in turn will destabilize the grip of the dictatorship and force them to adopt a more democratic approach to leadership. Alledgedly.

The actuality of it is that chinese labour is so appallingly cheap that the huge multinational corporations that own all western industry immedaitely choose to manufacture everything there, and the constant push from the US to allow said corporations complete freedom to generate capital makes everone powerless to stop them.

Amazingly, most of the countries that would have been considered "cheap labour" ten years ago, such as South Korea, Taiwan, etc, are now using chinese manufacturing plants instead. China has an almost total monopoly in basic manufacture; the Communist Party's oposition to the free flow of information means that, while other emerging powers such as India have been able to switch to trading in Information, like the west, China is too restrictive to effectively compete.

This means that in ten years, while your computer parts will all be made in China your OS will still be written by Microsoft. Or rather, by contractors who work for Microsoft, as MS is now entirely made of lawyers. Is it just me, or has outsourcing been allowed to go totally out of control?

Oh, and thanks to HStorm for that book about the Chinese economy.

[HStorm]

naselus said:

you can't put any blame for this at Bushco's door

I think you're taking my throwaway words a touch too literally there. (The start of the process can arguably be traced back as far as the mid-70's.)

The increase in demand to state-owned industries means that suddenly they need their workers... companies in China find themselves needing the workforce more than the workforce needs them, and so wages rise.

That's only when a) there's a shortage of disposable manpower, or b) when there are plenty of legal safeguards in place to protect a workforce from abuse. Neither is noticeably the case in China. (In fact, when Hong Kong reverted to Chinese control in 1997, while most of the inhabitants were terrified, many of its industrialists were privately rather pleased because they knew that a lot of the obstacles keeping them from bullying more productivity out of the workforce were about to be removed.)

At least, that's the theory. Unfortunately, with two billion people, there needs to be a throughly ridiculous amount of work available before it happens.

Precisely. At the moment, the rules of the free market are playing into the hands of a state-controlled industry.

The advantage to this is the ludicrous manner in which China's industries are run. Due to a Maoist hangover doctrine, a Chinese state-run company has to produce EVERYTHING its employees need.

Actually, while that sounds very odd, it doesn't sound ludicrous to me. The reason to fear plutocracy is it would be a society where the needs of the market override everything (which is sadly where much of the world is heading). I'd have a lot more sympathy for businesses if they took more care of their workers; and if they won't, they should be made to. The Chinese approach probably goes a bit too far, but at least it helps offset some of the treatment dished out to the workers there.

these are at very least skilled labourers, and most are wealthy businessman types. Leading to a huge divide between rich and poor, with the wealth given greater freedoms and power than the poor and unskilled they employ.

Now, the book HStorm gave me, The Coming Collapse of China, reckons that this will inevitably lead to the dictatorship collapsing in a Soviet-esque fashion within the next ten years. Given the book was released in 2001, he means that by the time of the London Olympics China will have thrown off the shackles of Communism. I pesonally think that he's hopelessly wrong in that guess, but despite all the money that is flooding into the country it must be said that it's being handled so incompetently once it's there that China is close to bankruptcy.

The timeframe is very optimistic/pessimistic (depending on your point of view), but much of the scenario described is very similar indeed to the later years of the USSR, especially the enormous gulf between the rich few and the poor masses. And while there are slight differences in how the divides appeared - in the USSR it was largely about abuse of power and political corruption, while in China it's caused by allowing a surge in consumerism - the collapse, should it happen, will have similar causes.

There are, apparently, one million taxi drivers in Beijing. The drivers all recieve a modest working wage from the State-owned enterprise that they work for. Of course, there can never be enough work for a million taxi drivers in one city, with a total population of just 13 million. So the vast majority of these people are driving cabs with no people in them for the vast majority of the time. However, this keeps unemployment down, and so it is considered a good thing by the current administration, although all it really means is that there's a million people doing a thousand people's job and taking much of the government's money from other projects. Until this sort of situation changes, the Clinton theory might just work.

Again, that has very strong overtones of the ludicrous law in the USSR that no one could ever get the sack. But it doesn't mean the Clinton theory is working, at least not in the way it's designed to; the theory assumes that encouraging a free market in China will nurture a free society. What it's actually bringing about is a rich and powerful elite at the head of a society that is in danger of collapsing in on itself. Which, as I say, is just like the USSR.

[Naselus]

hstorm said:

That's only when a) there's a shortage of disposable manpower, or b) when there are plenty of legal safeguards in place to protect a workforce from abuse. Neither is noticeably the case in China. (In fact, when Hong Kong reverted to Chinese control in 1997, while most of the inhabitants were terrified, many of its industrialists were privately rather pleased because they knew that a lot of the obstacles keeping them from bullying more productivity out of the workforce were about to be removed.)

The legal safeguards have, in all cases in history, only emerged after the flood of capital, i.e. the matchstick girls strike. Legal safeguards emerge once the workforce is in a position to demand them, which is achieved by the shortage of manpower. Which is, of course, where China falls down. It is only through a lack of workers compared to demand that any form of economic freedom can be earned; and unless we are in favour of wiping out about two-thirds of China's 2 billion-strong population that means flooding the industries with a truly unbelievable demand for produce.

It is, of course, merely also increadibly convenient that that provides the rest of the world with dirt-cheap labour in the mean time.

hstorm said:

Actually, while that sounds very odd, it doesn't sound ludicrous to me. The reason to fear plutocracy is it would be a society where the needs of the market override everything (which is sadly where much of the world is heading). I'd have a lot more sympathy for businesses if they took more care of their workers; and if they won't, they should be made to. The Chinese approach probably goes a bit too far, but at least it helps offset some of the treatment dished out to the workers there.

I hate to argue the Will side of the debate, but the Chinese approach is utterly absurd. I agree that companies should look after their workers, I'd campaign for healthcare plans, pension schemes, etc; but the Chinese have none of these things. Instead, they get free toothpaste. Great.

Chinese State-owned enterprises should stop employing millions of auxilary workers to cater for the lowest needs of the rest of the workforce and should start looking at the higher end of the scale. It would be far more economical to provide healthcare, rather than continuously employing 70,000 people to make toothpaste for the rest of the company, and I honestly dare you to say otherwise.

The difference between this system and, for example, a sane one, is that this has nothing whatsoever to do with caring for the workers; this is purely about creating employment for the sake of it. And I'll get to the reasons for that shortly.

hstorm said:

There are, apparently, one million taxi drivers in Beijing. The drivers all recieve a modest working wage from the State-owned enterprise that they work for. Of course, there can never be enough work for a million taxi drivers in one city, with a total population of just 13 million. So the vast majority of these people are driving cabs with no people in them for the vast majority of the time. However, this keeps unemployment down, and so it is considered a good thing by the current administration, although all it really means is that there's a million people doing a thousand people's job and taking much of the government's money from other projects. Until this sort of situation changes, the Clinton theory might just work.

Again, that has very strong overtones of the ludicrous law in the USSR that no one could ever get the sack. But it doesn't mean the Clinton theory is working, at least not in the way it's designed to; the theory assumes that encouraging a free market in China will nurture a free society. What it's actually bringing about is a rich and powerful elite at the head of a society that is in danger of collapsing in on itself. Which, as I say, is just like the USSR.

Well, there's the danger. However, what Gordon Chang's book fails to take into account, and what makes all the difference, is that Beijing noticed the collapse of the USSR.

The reason that there are one million taxi drivers, even though the total fleet of taxi's numbers only a quarter of that total, is that Beijing blames unemployment for the implosion of Russian communism. Unemployment is the devil which turns the masses against their masters, and so the Chinese government constantly seeks to keep as many people in work as possible.

In a standard market economy, this automatically leads to mass inflation; if everyone is employed then prices must inevitably rise. However, if you can control the wage rates, as the Chinese government does, then such problems disappear. The Russians failed to keep inflation and unemployment under control; whenever they fought one the other inexorably rose. China is obsessed with avoiding such a mistake.

Of course, this causes problems for the Clinton model. If China is not a free market, then the civic freedoms are unobtainable. If it IS a free market, the Chinese economy will inevitably collapse, as the planned and free market models are so throughly incompatible.

Personally, I reckon that collapsing the Chinese economy may well be the planned result anyway; nothing destroys a government like going bankrupt. However, the men in power are careful, and extremely clever indeed; they know that going too quickly or slowly will result in the end of the game, and they will do anything to avoid losing. Unfortunately, no-one has ever succeeded in switching a planned economy into a market economy without the entire thing falling apart in the process, and if that were to happen in China, then Modeski's global recession would almost certainly be the final result.

Which would probably collapse the US economy, unless someone with an intelligent spending program takes charge.