Adam Ash

Your daily entertainment scout. Whatever is happening out there, you'll find the best writing about it in here.

Thursday, September 29, 2005

Why we're fucked, fucked, totally fucked; and why we're not

First the good news. We're the second most competitive economy in the world, after Finland. Finland!? Yes, fucking Finland. Read this from the Washington Post:

Northern Europe and key east Asian countries are the most competitive economies in the world, retaining their positions in the top 10 of a survey released Wednesday by the World Economic Forum.

For the third straight year, Finland has the most competitive economy, followed by the United States, according to a survey of almost 11,000 business leaders in the "Global Competitiveness Report." The poll was conducted for a 26th consecutive year.

Rounding out the top 10 in the survey -- expanded this year to include 117 countries -- were Sweden, Denmark, Taiwan, Singapore, Iceland, Switzerland, Norway and Australia.

The success of the Nordics is based on their "very healthy macroeconomic environments and public institutions that are highly transparent and efficient, with general agreement within society on the spending priorities to be met in the government budget," said Augusto Lopez-Claros, chief economist and director of the Geneva-based institute's global competitiveness program.

Lopez-Claros said the Nordic nations were disproving the common belief that high taxes hinder competitiveness.

"While the business communities in the Nordic countries point to high tax rates as a potential problem area, there is no evidence that these are adversely affecting the ability of these countries to compete effectively in world markets, or to provide to their respective populations some of the highest standards of living in the world," he said. "Indeed, the high levels of government tax revenue have delivered world-class educational establishments, an extensive safety net, and a highly motivated and skilled labor force."

Finland, home of mobile phone giant Nokia Corp., topped the study because of its swiftness in adapting to new technology and the quality of its public institutions, the report said.

The United States ranked second because it "demonstrates overall technological supremacy, with a very powerful culture of innovation," the World Economic Forum said. But it suggested the United States might have been kept from the top spot because of its low scores for contractual law and macroeconomic management.

"The country's greatest weakness concerns the health of its macroeconomic environment, where it ranks a low 47th overall," the organization found.

OK. SO WE'RE not TOTALLY fucked. But now read this from CounterPunch:
Iraq War Winners: Al-Qaeda, Iran and Military Contractors -- by Paul Craig Roberts

    George W. Bush will go down in history as the president who fiddled while America lost its superpower status.

    Bush used deceit and hysteria to lead America into a war that is bleeding the US economically, militarily, and diplomatically. The war is being fought with hundreds of billions of dollars borrowed from foreigners. The war is bleeding the military of troops and commitments. The war has ended the US claim to moral leadership and exposed the US as a reckless and aggressive power.

    Focused on a concocted "war on terrorism," the Bush administration diverted money from the New Orleans levees to Iraq, with the consequence that the US now has a $100 billion rebuild bill on top of the war bill.

    The US is so short of troops that neoconservatives are advocating the use of foreign mercenaries paid with US citizenship.

    US efforts to isolate Iran have been blocked by Russia and China, nuclear powers that Bush cannot bully.

    The Iraqi war has three beneficiaries: (1) al Qaeda, (2) Iran and (3) US war industries and Bush-Cheney cronies who receive no-bid contracts.

    Everyone else is a loser.

    The war has bestowed on al Qaeda recruits, prestige, and a training ground.

    The war has allied Iran with Iraq's Shi'ite majority.

    The war has brought soaring profits to the military industries and the firms with reconstruction contracts at the expense of 20,000 US military casualties and tens of thousands of Iraqi civilian casualties.

    The Republican Party is a loser, because its hidebound support for the war is isolating the party from public opinion.

    The Democratic Party is a loser, because its cowardly acquiescence in a war that is opposed by the majority of its members is making the party irrelevant.

    The latest polls show that a majority of Americans believe the US cannot win against the Iraq insurgency. The majority support withdrawal and the redirection of war spending to rebuilding New Orleans. Despite the clarity of the public's wishes, the Republican Party continues to support the unpopular war.

    With the exceptions of Reps. Cynthia McKinney and John Conyers, Democrats fled the scene of the Sept. 24 antiwar rally in Washington DC. The cynical Democrats are apparently owned by the same interest groups that own the Republicans and are refusing the mantle of majority party that the electorate is offering to the party that will end the war.

    The Bush administration is churning out red ink in excess of $1 trillion annually. The federal budget deficit is approaching $500 billion. The US trade deficit is approaching $700 billion.

    The budget deficit is being financed by foreigners, primarily Asians who now hold enough US government debt to exercise power over US interest rates and the value of the dollar whenever they decide to use the power that Bush has placed in their hands.

    The trade deficit is being financed by turning over the ownership of US assets and future income streams to foreigners, making Americans forever poorer from the loss of accumulated wealth.

    For the time being, China is willing to accumulate US assets as a way of taking over our consumer markets, attracting US manufacturing industry with cheap labor subsidized by artificial currency values, and gaining our technology. China's strategy is to over-value the US dollar in order to encourage the transfer of US economic capabilities to China. China's strategy gives artificial value to the dollar and keeps US interest rates at an artificial low.

    The values of US stocks, bonds, and real estate depend on the support that Asians' economic strategies provide the dollar and US interest rates. As Asia achieves its goal of preeminence in manufacturing, innovation, and product development, the strategy will change. Once China completes its acquisition of US capabilities, it will no longer have a reason to support the dollar.

    When the dollar goes, it will affect costs, profits, interest rates and living standards in dramatic ways. Costs and interest rates will soar, and profits, living standards, equity values, bond prices and real estate will plummet.

    These unpleasant events await only Asia's decision to curtail its support for US red ink. That will happen when this support no longer serves Asia's interest.

    When Asia pulls the plug on the dollar, the US government will find that monetary and fiscal policy are powerless to offset the consequences.

    Compared to US budget and trade deficits, terrorists are a minor concern. The greatest danger that the US faces is the dollar's loss of reserve currency role. This would be an impoverishing event, one from which the US would not recover.

    An intelligent government sincerely concerned with homeland security would find a way to halt the global labor arbitrage that is stripping the American economy of high value-added jobs and manufacturing capability, thereby causing the US trade deficit to explode. The loss of tax base that results when US companies outsource jobs and relocate production abroad makes it ever more difficult to balance a budget strained by war, natural disasters, and demographic impact on Social Security and Medicare.

    Global labor arbitrage is rapidly dismantling the ladders of upward mobility and thereby endangering American political stability. This threat is far greater than any Osama bin Laden can mount.

    Time is running out for Republicans and Democrats to escape from the distraction of a pointless war and to focus on the real threats that endanger the United States of America.

(Paul Craig Roberts has held a number of academic appointments and has contributed to numerous scholarly publications. He served as Assistant Secretary of the Treasury in the Reagan administration. His graduate economics education was at the University of Virginia, the University of California at Berkeley, and Oxford University. He is coauthor of The Tyranny of Good Intentions.)

WELL, ARE WE FUCKED or what? If you add that we're the biggest debtor nation in the world, and depend on the good graces of China not to start selling all our dollars they own, I'd say, hey, we're totally and utterly FUCKED. Like, RIGHT IN our butts, way past our sphincters. At least for the next three years, with The Incompetent Chimp as our esteemed prez in charge -- an asshole Pied Piper leading us, a bunch of moronic fucked butts, over a big stinking cliff into a river of shit. This president of ours wastes more money than any Democrat in the history of the world. It's borrow and spend, borrow and spend, like there's no tomorrow. When he goes, maybe we can go back to being competitive; maybe even beat out Finland in five years' time. Don't expect us to get unfucked while Bush is still in charge. We've had four disasters during this administration: 9/11, the Iraq War, Katrina, and Bush himself. And Bush has been our biggest disaster by far.


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