Sunday, July 31, 2005

Globalization & Free Trade

I'm back!

With the recent passage of CAFTA, I thought this an appropriate time to lay down some ideas about free trade and globalization.

What goes around comes around, and when in relation to trade, comes around and then some. With increasing globalization, countries can specialize, basic resources become cheaper and more abundant, and competition brings about increased efficiency. Free trade/globalization also brings interdependency and constant contact between all cultures. This breeds peace and understanding between the peoples of the world. Thus, globalization brings about increased wealth and peace for all the world. The microcosm for this model is Europe, which after thousands of years of constant war has now found prosperity, peace, and understanding due to the EU, an organization whose primary function is insuring free and fair trade. For these, positive, reasons free (and fair) trade is considered a fundamentally good objective and one that should be encouraged through American policy.

This said, there is a flip side that entails that our country act with some common sense (practicality) whilst globalizing. With specialization comes whole segments of the economy dying off while others expand, with abundant resources waste and faster consumption of the planet, with competition and efficiency comes lost jobs, despite the net gain. The very act of going out and making free trade agreements with other countries requires caution lest you end up on an unfair playing field.

Thus it is essential that our government insures a smooth transition through sound practical policies. The government needs to provide re-education to those who find themselves in an obsolete or uncompetitive job market. They need to make sure that the market's appetite in the short term is satiable in the long term by making sure that we have long-term resources available (this principally applies to energy). We also need to insure that the United States remains the most competitive player out there. This is best achieved through a superior education regime, an excellent infrastructure, and minimal regulations. Finally, we need to make sure everybody's playing by the rules. This is accomplished by using tariffs to punish countries (China) that are, for instance, subsidizing their companies, pegging their currency, and stealing one of our most valuable commodities by not respecting patent laws. If we do all of this on the economic side, there is no reason why globalization cannot be a win-win proposition for all the participants.

The non-economic side also has its flip side. Interdependency can bring about crucial political weaknesses if say, someone else is building your tanks, or in our case, we no longer build big ships, forcing prices through the roof when the navy wants one and there's only one American shipyard left with which to "negotiate". Constant contact between cultures can also breed resentment and misunderstandings, this is occuring in the Middle East when, for instance, they travel to Europe and see the opulent, free, and wealthy culture contrasted against... twenty-something countries who cannot equal Spain's GDP (the Arab League). Fixing the political weaknesses should be rather straightforward: insure that we have strategically essential resources for the short term (the oil reserve) and alternatives in the long term (working on that...), and bolster industries considered essential to our national security, like shipbuilding. The cultural aspect is a little more complicated. When those (case in point) Muslims go and see how rich the rest of the world is and wonder why their, (from their point of view) "enlightened", world is suffering, there's a very small chance that the government controlled media/religion is going to name the true problem: government incompetency due to lack of reform & democracy. No, they'll say it's the Europeans, or even better, the American's fault. "They're abusing you! Obviously they're cheating because they're winning!" I'm sure they aren't the only ones; no doubt the same ideas are pushed by all insecure governments, ranging from North Korea to Belorussia. To counter this will require an extensive system for insuring that where there's contact, there's understanding. To accomplish that it is integral that the practical policy on Islamic Extremism is implemented, as well a general (tactful) push for free speech across the board, for when all ideas are lined up on next to eachother in the global marketplace, the people almost always buy ours.

America should push free trade, but make sure that it is fair. We should also insure that we have a smooth transition to a globalized economy, and protect industries/resources key to our national security. Finally, we need to implement policies which bring about cultural understanding through free speech for all, for therein lies true world peace. Thus stands the practical policy on globalization & free trade as of 7/31/05.

Sunday, July 24, 2005

Racial Profiling

I keep seeing articles and hearing interviews where officials, usually in various Transit Authorities, promise that the random searches carried out by their agents will truly be random, and that the searchers will not utilize any sort of racial profiling. Does this really bother anyone else? Their stated goal is to protect the people from acts of terrorism, and yet, their actions clearly expose their true goal, creating a semblance of protection for the people from terror, while really avoiding the "Civil Libertarians," usually vocal members of the ACLU and other such bothersome organizations. These "Civil Libertarians" care more about their perceived "Civil Liberties" then actual protection of US citizens. They ignore the fact that the Islamic Terror Attacks are being carried out by, surprisingly, Muslims! God help us if they ever gain a legitimate hold on our government, there they will protect the feelings of a highly sensitive few, rather the lives of the rest.

Friday, July 08, 2005

Islamic Extremism

From the last post & its ensuing conversation, I have drafted a practical policy on dealing with Islamic terrorism. Here it is in the clean crisp form.

Islamic terrorism is caused primarily by organizations such as AQ and is impossible to deal with on that level unless we were to sacrifice the freedom that we are trying to defend. It is caused ultimately by the situation in the Muslim world, where oil-states maintain the media and cultural backbone neccessary to supply AQ and others with human and financial support.

What we need to do is create an environment where the radical Islamic ideas are on an even playing field with moderate, modern Islamic ideas. In this environment the moderate Muslims will win because their ideas are better. To use an antecdote, the Soviet Union collapsed when free media allowed Russians to compare ideologies, and our ideology won. To create this fair playing field, we need to bring about major economic and political reforms in the Muslim world. This can be accomplished ultimately by forcing the governments to create real economies, which is best done by denying them oil revenues, and secondarily through constant political pressure on regimes to bring about political reforms. In extreme cases this presure can include war, ie Iraq. Finally, while these ultimate goals are pursued, it is important to put many resources in combatting terrorism through hunting down the individuals and protecting our society as much as is possible without curtailing our rights.

Once again, some real examples of economic and political reform following lack of oil revenues. Jordan passed most of its economic reforms when Saudi Arabia could no longer afford to subsidize it (late 80's). Dubai, one of the most dynamic economies (and tolearant societies) in the Middle East, got that way because their leaders had very little oil revenue to live on. Even Iran brought in a parliament (albeit symbolic) after the oil plunge in the late eighties.

Although bringing the Muslim world into the modern era is and will be an extremely expensive process for our nation, it is a neccessity both because this spawns terrorists, threatening our political security, and it creates huge instability on top of the worlds primary energy source, threatening our economic security.

More thoughts on the even playing field by Friedman, and on the media/cultural oil-state backbone by strategy page.

Thus stands the practical policy on Islamic Extremism.

Thursday, July 07, 2005


To begin with, we have the deepest of sympathies for the people of England. I have a friend who has lived in London most of his life and I'm hoping he's alright.

Understandably, many are very upset with the recent events, and this particulary rant by Jason Coleman prompted me to make a point about stereotyping.

This is really a point by point response to the rant, sorry if it sounds a bit bizarre in places.

Point 1, if you will:

"Angry with the cowardly, ignorant, evil fuckers who did this.

Angry at Bush for insisting on poking away at a hornets' nest.

Angry at Blair for going along with Bush's fucking crusade.

But mostly angry with the morally corrupt and utterly hypocritical pieces of shit that consider that indiscriminate bombing of civilians is an appropriate way of furthering their aims and their bastardised version of religion."

This is from one of those "moonbat" threads. They're angry with Bush but that doesn't mean they're the enemy. Heck, I'm angry with Bush, the liberals, & the terrorists, there ain't no white and black here.

Point 2:
Yes, there are some idiots on the left, but there are also idiots on the right (that's why you go to the Practcal Party!). To figure out what's best to do, one has to respectfully diagree with the idiots & alienate them, not lump them together with the rest of the party and put them down as terrorists (what Jason has just done).

Point 3:
Not only have you bounded a few cowardly liberals to the whole party, you've also bounded a few terrorists to the whole religion. Wake up, read some news about Iraq, there are alot more Iraqi, MUSLIM, people dying than any other affiliated group. These guys aren't out to inflict Islam on the world (This is not to say there aren't people out there trying to spread Islam, it's trying just as hard as any other religion to sell its message). Nay, they're out to better themselves through the only means they have. A bunch of oil dicatorships are trying to maintain their power & deflect criticism from their state (See On Iraq). Thus they amplify the idiots (every group has its idiots) of Islam to manipulate them to strengthen their governments. Sometimes intentionally, more often as a sideproduct, these hard-to control, yet well funded extremist organizations spawn terrorists and "jihads". Thus refrain from pinning the other 99.9% of Muslims to these dictatorships & their pools of money which are really the root cause of Islamic extremism.

We're all angry, let's just make sure we get angry at the right people. What we need is a double attack on the dictators. We need to use political pressure, on the extreme end regime change in Iraq. Here we're doing kind of well. We also need to deny them their money. This means consuming less oil and ultimately less natural gas. Here our performance is abysmal. On Iraq and my most recent post, the energy one, gives a pretty good picture of the practical way to hit both points.

UPDATE: Half Sigma makes the same mistake.

Wednesday, July 06, 2005


With oil prices hitting 60$ a barrel, I thought it might be an appropriate time to lay out some practical points on energy.

To begin with, obtaining a reliable source of energy is one of the biggest, if not the the biggest, challenges to America's economic and political security. It is because:
  • Our largest source, oil, is not only located in other countries, but in very unstable countries.
  • The natural economic successor of oil, natural gas, is located is the same places.
  • Whereas new sources of oil have shrivelled up, world demand continues to expand.
  • There will be natural conflicts of interest when demand for oil surpasses supply, which could become full fledged wars if not prepared for.
  • Importing all this energy is bad for the trade balance.
  • Our largest (and expanding) source of electrical power, coal, is extremely bad for the environment, although this can be remedied.
  • Fossil fuels, especially oil, have far more valuable uses, in plastics tar, fertilizer, and other products, whose alternatives are more scarce than those for energy.
  • All fossil fuels are limited in supply and as we're forced to use more crude fuels, like tar oil, the damage to the environment increases exponentially, threatening not only America's, but the worlds welfare.
Thus stand the main columns of the problem, now some solutions:
  • Enact policies that bring about stability in oil producing regions.
  • Heavily tax oil to curb its growth and reverse the consumption trend.
  • Encourage heavy investments in alternatives.
  • Tax pollution.
  • Encourage more sustainable development patterns (less highways, more trains).
  • Stop the construction of convential coal plants through regulations aimed at bringing in a new generation of nuclear, clean coal, and various other alternatives.
Pretty straightforward. Unfortunately, politicians are enacting policies that are at best half-way solutions and at worst exacerbate the problem. The United States, at current rates of production, will be out of oil in fifteen years. The world has, on the rosy side, at most fifty years before oil can no longer be our primary fuel, and sixty before natural gas is out as well. We need solutions and we need them fast. Things will not be pretty if the nation, and the world, waits until the crisis strikes to begin offering solutions. This is the broad overview, it will be followed up with many supplementary details.

Monday, July 04, 2005

"Free" Trade

A recent post, Larry "Smith" Kudlow, would be more accurate if China were practicing free trade. He, along with others, portrays the threats against China (from congress) as threats against free trade. Common sense, and practical policy, speaks to the contrary. China is not practicing free trade. It does not respect patent laws, it has an unfair currency peg, it "forces" people to give their money to gigantic public works projects, by making them put money in banks which then loan out all the money (an unsound economic practice anyway), and they're driving their people into poverty & their country into an environmental disaster for short term gains. Now, perhaps if they had a democratically elected government, where society had voted in leaders to go down this path, we might not have a problem. But they obviously do not, and, China is a threat in the short term. For all these reasons, it is the practical policy that our government should go ahead and pass measures, in a rational manner, that will coerce/persuade China into playing by the rules. We're not talking about regime change. China is a sovereign nation and that we respect. Yet when their practices affect us and our economy, we have to take steps to insure that they respect patent laws, unpeg their currency, and treat their workers & environment as humanely as we treat ours. Otherwise, the field is tilted against us, and the average Chinese worker, to the point where the only winners are a bunch elite Chinese.
The ideal piece of legislation, perhaps previously mentioned, would be a Fair Trade act. It would require that any company/country importing goods into the US must abide by US regulations. This includes a minimum wage (relative equivalent to the country), safety regulations, and environmental regulations. The company would obtain a license, after an inspection of their facilities, and would be subject to occasional surprise inspections, the punishment of failure being a complete revocation of the license (which would be understandably hard to obtain).
The reasoning behind this is why should we have these great things here, only to export them abroad? This is rather like maintaining freedom by exporting the tyranny. It also just makes sense, because how can we possibly hope to win economically (or even stay equal) against other countries, in the longterm, if the playing field is tilted in the first place? It also eliminates many of the advantages of going overseas. This legislation would be enacted four or five years after being passed because companies would have to radically alter their practices (and we don't want global trade to grind to a halt). Thus stands the practical policy: the fair trade act.