Happy New Year

January 2nd, 2008

A bit belatedly, Happy New Year to everyone. Some optimistic wishes for 2008

* The end of the Bush era will prove to be the end of political power for the Republican party in its current (religious right/militarist/pro-rich class warfare) form, and will be followed by a return to reality-based politics

* The crisis in Pakistan will provoke the world’s leaders into serious action on nuclear disarmament. Pretty clearly, unless this happens, nuclear weapons will sooner or later fall into the hands of someone who wants to use them. There was quite a good article in Prospect unfortunately paywalled, making the point that Gordon Brown could take a lead on this if the UK (one of the prime examples of a country maintaining nuclear weapons for no better reason than national pride) was willing to offer disarmament as a bargaining chip.

* The Rudd government will deliver the goods on education, industrial relations and global warming. Despite some silly mis-steps, I’ve been favourably surprised so far at how well things have turned out.

* The slow-motion financial crisis will stay slow-motion producing a gradual reversal of the explosion of dubious debt derivatives seen over the past decade, and a relatively smooth rebalancing of household and national balance sheets.

  1. mugwump
    January 3rd, 2008 at 00:25 | #1

    The Rudd government will deliver the goods on education, industrial relations and global warming.

    Kevin Rudd singlehandedly ending global warming. That will be fun to watch.

    There’s no doubt he will deliver the goods on industrial relations. His union colleagues will see to that. But not in a way that improves welfare for anyone except a very few insiders.

  2. January 3rd, 2008 at 03:33 | #2

    Some optimistic wishes for 2007 .. The end of the Bush era..

    Was that a typo or a wish? :-P (fixed thanks, JQ

    Rudd is of cause an Australian thing (ok: GWB loses another ally), but the other three will definitively be things to watch.

  3. January 3rd, 2008 at 05:51 | #3

    you left out “and the lion lie down with the lamb” (both arising and going about their daily meals of grass).

    predictions are fun, soothing, and generate fees for op-ed writers. but if you have no means to influence their fruition, ultimately trivial.

    so i get most satisfaction from predicting a big lotto win for myself, there i can buy a ticket.

  4. Persse
    January 3rd, 2008 at 07:49 | #4

    All interesting points, my own take on them is somewhat different.

    * Both the republican party and the democratic parties will be in crisis. The US political system is a creaking relic of the horse and buggy era. It is unable to deliver efficient change of political leadership. The democratic party is now an entity divorced from its union and social progressive roots, without any real agenda. The republicans, as the party of reaction, is equally and conversely losing its political agenda.
    *Nuclear disarmament is irretrievably crippled for the foreseeable future due to the failures of leadership and loss of credibility by the US and Britain. Gordon Brown is most unlikely to contribute, as this is not an issue that can be dealt with from a position of weakness.
    * Rudd has it all – a great team and goodwill. There is no reason that his government can’t be successful until he hands over to Gillard or Wong.
    * The number of individuals with a stake in milking fees from the financial system without a substantive contribution to justify those rewards makes the entire financial system in the US extremely resistant to reform. The cultural barriers, as in the purely political arena, are to great. The chief result of the current crisis, and whatever the next one is, is the acceleration of the decoupling of the US economy from the rest of the world. This has already partially begun.
    The history of the US has been to make their system work through practical measures as needed, however the country that sees itself as the new world, it is in fact becoming a impeded by its own long history, the stasis within the system is becoming an insuperable barrier to reform. Neither political party has the capacity to grasp the nettle.

  5. Spiros
    January 3rd, 2008 at 08:01 | #5

    “Some optimistic wishes for 2007″

    I hope new opposition leader Kevin Rudd wins the election to be held this year.

  6. January 3rd, 2008 at 08:17 | #6

    Making wishes for 2007 does seem rather belated given that it has now vanished into history. Surely you should be making wishes for 2008.

  7. jquiggin
    January 3rd, 2008 at 09:36 | #7

    It only stops being the New Year when you stop writing the old number :-)

  8. Katz
    January 3rd, 2008 at 09:47 | #8

    I hope you’re right JQ.

    I suspect that the unravelling of the financial engineering binge may be a little more traumatic than you are hoping for.

    The solvency crisis that this has caused is bound to have effects in the real economy of investment, employment and consumption.

    Whether these effects will be long-lasting and/or deep is still to be seen.

    Whether these effects will be quarantined to the US and Britain is still to be seen.

    But the US cannot change markedly how hard it works, how much it invests and how enthusiastically it consumes without having some impact on the rest of the world.

  9. jack Strocchi
    January 3rd, 2008 at 16:21 | #9

    Pr Q says:

    * The crisis in Pakistan will provoke the world’s leaders into serious action on nuclear disarmament. Pretty clearly, unless this happens, nuclear weapons will sooner or later fall into the hands of someone who wants to use them.

    This is a sweet dream, but a pipe dream all the same. Conventional weapons arms race do more civil damage in the short to medium term. They are a bigger drain on national treasuries and are exported to poorer countries who have better things to spend their blood and treasure on.

    The most likely form of a terrorist WMD attack will probably be a biological agent. Nukes are pretty hard to develop and maintain without a major state-sized industrial infrastructure, which has a return address. Bugs grow themselves and can be genetically customized to target enemy genomes.

    Pr Q says:

    Gordon Brown could take a lead on this if the UK (one of the prime examples of a country maintaining nuclear weapons for no better reason than national pride) was willing to offer disarmament as a bargaining chip.

    Of all the countries I would like to see nuclear disarmed it would have to be the UK that would be last on that list. Safe as houses and no real threat to anyone.

    Its true that the UK does not need the Bomb for own defence. But it is unlikely to nuclear disarm until there is a coherent USE military force to organize continental security. And I dont see the USE seeking nuclear disarmament, given the continued militarisation of the CIS.

    In any case why would a Brown offer of UK unilateral nuclear disarmament encourage PAK to do the same? Still less any terrorist group in league with fundamentalist factions in the PAK government.

    PAK wants the bomb because IND has the bomb. IND has the bomb because PRC has the bomb. PRC has the bomb because USA and CIS have the bomb.

    Good luck trying to get the Big Two to discard their bombs. We are talking Alpha-males putting down their biggest sticks. Not likely given their aim is world-dominance.

    Your best bet would be to work on IND, since that is the biggest threat to PAK which is the most nutso nuke state. That means working on the demilitarising the PRC-IND security relationship.

    That might not be such a big ask. The PRC and IND seem to have maintained a fairly peaceable relationship through most of their histories. No reason why that cant continue, sans nukes.

  10. jack Strocchi
    January 3rd, 2008 at 16:24 | #10

    BTW The single biggest factor in global demilitarisation over the post-CW–pre-GWOT era was the the USA’s victory in the Arms Race over the USSR . Easterbrook conveniently summarises the core facts:

    Annual global military spending, stated in current dollars, peaked in 1985, at $US1.3 trillion ($A2 trillion), and has been declining since, to $US840 billion in 2002. That is a drop of almost half a trillion dollars in the amount the world spent each year on arms.

    Thankyou Ronald Reagan, global liberalizer and demilitarizer. Not that Leftist ideologues have the honesty or decency to give him an ounce of credit.

  11. SJ
    January 3rd, 2008 at 16:57 | #11

    Easterbrook, clown that he is, may or may not have conveniently summarised things as they stood in 2002. Things have changed a bit since then. You may have even heard about the Iraq war thing on the TV news. Annual US military spending has increased by about 50% since then.

    Glen Greenwald conveniently provides an update.

  12. jack Strocchi
    January 3rd, 2008 at 17:03 | #12

    Pr Q says:

    * The end of the Bush era will prove to be the end of political power for the Republican party in its current (religious right/militarist/pro-rich class warfare) form, and will be followed by a return to reality-based politics.

    I tend to agree with this prediction or predilection. Bush’s invade-invite-indebt the World policies are a prescription for US national self-destruction. Eventually Republicans-who-know-what-they -are-talking-about will arrive on the scene to provide adult supervision to the GOP. Think Scowcroft, Bush Snr et al.

    Long term demographic trends are working against the Class-Culture-Civilization warring faction of the GOP. This is mainly due to the increasing “minoritization” of the US electorate (mainly from the Left-leaning Southern hemisphere). Plus aging of the whole population.

    Over the next generation I predict the Left-wing need to bolster the welfare state for coloureds and “healthfare” state for geezers will constrain the Right wing desire for a beefier warfare state for hawks and lootier “wealthfare” state for fat-cats.

    So expect substantial retrenchment of the US’s global military establishment as the DoD attempts to repair some of the damage inflicted by the neo-cons.

    Nonetheless white, male-led households will still own and run most of the USA for the time being. They will continue to vote for the GOP, probably in a more moderate form eg McCain, mostly on Culture War grounds. As they have done since Nixon.

    The only thing that will arrest this is a collapse in white religious observance or a startling decline in coloured social pathologies. I dont see much evidence for this.

    On the down side I dont see much US political pressure for carbon or handgun control. Cars and Guns are the substance of individual freedom as far as white males are concerned. You are going to have a hard time prying their cold dead fingers loose from wheels and triggers.

  13. jack Strocchi
    January 3rd, 2008 at 17:21 | #13

    SJ Says: January 3rd, 2008 at 4:57 pm

    Easterbrook, clown that he is, may or may not have conveniently summarised things as they stood in 2002. Things have changed a bit since then. You may have even heard about the Iraq war thing on the TV news. Annual US military spending has increased by about 50% since then.

    You dont say?

    Since I took pains to specify the era as “the post-CW–pre-GWOT” I can safely assume that both SJ and Glen Greenwald are not telling me something that I dont already know.

    To rub in my point, in the reality=based community it is accepted that the global arms race took a big dive once the USSR gave up trying to out gun the USA. Hence the expression “post-Cold War peace dividend”, largely cashed in via the tech boom.

    FWIW I dont hold out much hope for militarist solutions to the problem of terrorism. I think that the solution lies in feminist empowering of Southern women rather than militarist empowering of Northern men.

    The biggest threats to security are the Martial Right and the Cultural Left. The Martial Right is now substantially discredited due to the failure of Iraq-attack. But the Cultural Left has still has not been called to account for its part in breeding disorder eg Londonistan and Paris outersuburbs.

    And here the Cultural Left is shooting everyone including itself in the foot. It is absolutely committed to encouraging traditional Southern ethnic identity politics (“celebrate multicultural diversity”) both at home and abroad.

    Multicultural diversity tends to entrench backward and divisive social systems that breed terrorism. Add to that the Cultural Lefts commitment to subcultural perversity and you have perfect breeding ground for trouble makers.

    In this way the Culture War tends to morph into the “Clash within Civilizations”. “Its a big mess”, as Richard Feynman used to say.

  14. jack Strocchi
    January 3rd, 2008 at 17:31 | #14

    Pr Q says:

    * The slow-motion financial crisis will stay slow-motion producing a gradual reversal of the explosion of dubious debt derivatives seen over the past decade, and a relatively smooth rebalancing of household and national balance sheets.

    I hope you are right. The S&L scam, Asia Crisis, LCTM, dot.com crash, Enron and sub-prime loan meltdown all failed to produce another Great Crash. So perhaps we all underestimate the resilience and flexibility of the New Economy.

    But there is an old saying amongst traders: “Up the escalator, down the elevator”. Lets all pray that this is another part of the CW that has been consigned to the Dustbin of History by the New Economy, China, End of Cold War etc.

  15. January 3rd, 2008 at 18:18 | #15

    SJ,

    I think your summartion of the problem in terms of the Martialist Right and the Cultural Left is pretty spot on. However I’m not convinced that the lessons of Iraq have been learnt. More likely buried and forgotten as quickly as possible.

    Regards,
    Terje.

  16. SJ
    January 3rd, 2008 at 18:49 | #16

    Terje Says:

    SJ,

    I think your summartion of the problem in terms of the Martialist Right and the Cultural Left is pretty spot on.

    Well, yes, in much the same way as I regard your admission that libertarians are fruitcakes with nil reading comprehension is spot on, too.

  17. jack Strocchi
    January 3rd, 2008 at 19:47 | #17

    The Martial Right and the Cultural Left are negative images of each other which end up producing the same positive when developed. Both are dedicated to mismatching institutional cultures with individual natures.

    The Martial Right wants to impose Northern style democracy on the peoples of the South. This has ended in tears in Iraq.

    The Cultural Left want to invite Southern style demos into the polities of the North. But this can end in tears, as shown by the problems that USA and USE are facing with unsettled immigrants.

    These well-meaning policies are fraught with political danger. It is best to set up processes which nurse such forms of progress very gradually into existence.

    Very gradual reformations are indicated. As opposed to jump-to-glory revolutions, whether cultural or political. Otherwise one gets reaction.

  18. wmmbb
    January 3rd, 2008 at 22:08 | #18

    Very optimistic, but a good set of suggestions.

    * There is a deep problem with participation not to mention voting machine reliability in the US, and the suggestion that too many people are struggling to make end meet to be concerned about voting. Furthermore, there is reverse tickle down effect, meaning that that discretionary income to fund campaigns is concentrated, so the Democratic and Republican pipers will be paid for the same tune.

    * If the British abandoned nuclear weapons that would be good, but the decision was made to purchase the updated Trident version, so grounds for optimist are not strong.

    *If the Rudd Government delivers on education, employment relations and global warming, then good for them. We shall see.

    * According to this article China can be expected to be a new and major player in economic affairs.

  19. philip travers
    January 4th, 2008 at 06:30 | #19

    How long has Rudd had the Wheel!?Arent they on holidays for two weeks!?Why is it necessary to consider Pakistan is any more threatening than other countries with nuke weapons!?And that someone more blatantly dangerous than the present cool types is within the population!?The motivation of the assassination has not been even presented,and Musharraf has denied government involvement,and with all the world publicity around this coming election I think he is stating his known facts.Whatever Rudd is doing in education to please this site in some manner,I have been looking and listening but cannot find it.And surely the problems of any country are not solved by depictions through the failings of the Left, in such a manner new descriptions are required to describe this Left.Doesnt make sense,but certainly seems ,at first, a useful point.And do you really know what you are stating as insight by giving some new description to a group that has no names.Why do some group called The Left have to somehow accept Reagan did well achieving what they wanted..when in fact is that really the truth of Reagan,and the continuing group entity the Left!?tI seem to remember star wars scenarios and attempts then to come up with new directions in deadly weaponry.A brief look now will show deadly forms of destruction have been put into practice,like spent nuclear warhead use.The most authoritive blog has some lousy thinkers here.

  20. Ikonoclast
    January 4th, 2008 at 07:09 | #20

    JQ, you say – “The slow-motion financial crisis will stay slow-motion producing a gradual reversal of the explosion of dubious debt derivatives seen over the past decade, and a relatively smooth rebalancing of household and national balance sheets.”

    This seems quite an optimistic view. Indebtedness (national and private) in the US and AUS has reached record proportions has it not? I mean relative to GDPs. Do you see no serious risks in this?

    At the same time we have oil prices at US$100 a barrel. It is clear that the peak oil phenomenon (or rather the declining oil supply) is now going to play a major role in our economic trajectory.

    The new oil shock will run through tranport costs and indeed general costs. Of particular concern will be its effect on the car industry. I don’t believe the major manufacturers can re-tool fast enough to quickly switch from petrol consuming monsters to some other format. If there is a crash in petrol and diesel vehicle sales and hence auto manufacture I would think this would be a major shock to the world economy. Thoughts JQ?

  21. John Greenfield
    January 4th, 2008 at 07:35 | #21

    JQ

    What education “goods” will Rudd Labor deliver? Thus far, they have not announced an education policy for many years.

    The ALP is historically a notoriously ANTI-education party of philistines. The one harbinger of hope is Rudd’s constitutional loathing of the truly excerable AEU. His early mutterings suggest a longing to bitchslap the ghastlies out of existence. Let us pray he follows through!

  22. John Greenfield
    January 4th, 2008 at 07:43 | #22

    The IR goods Rudd Labor will deliver have already been delivered by teh previous government.

  23. John Greenfield
    January 4th, 2008 at 07:51 | #23

    Jack S

    I would not worry about multiculti anymore. It is as dead as the GST Rollback. ;)

  24. Peter Rickwood
    January 4th, 2008 at 08:36 | #24

    Ikonoclast Says:

    This seems quite an optimistic view. Indebtedness (national and private) in the US and AUS has reached record proportions has it not? I mean relative to GDPs. Do you see no serious risks in this?

    I have no economic training, so perhaps someone can set me straight….. here goes…

    I just don’t get this focus on debt as a proportion of GDP. We are quite happy for a typical household to hold a mortgage several times that households income, and yet we fret about a (comparatively) modest national debt/income ratio?
    Surely the real stress test is the ability to meet repayments on that debt, or, alternatively, to look at what the debt is used for (investment or consumption).

    I can better understand the worry over persistent trade deficits — and incidentally, while I’m being economically educated, can someone tell me if they can see any way out of our trade deficit without a substantial drop in the AUD?

    and happy new year!

  25. melanie
    January 4th, 2008 at 10:29 | #25

    Can someone explain please the link between the Pakistan crisis and the nuclear weapon?

    The Democratic record so far doesn’t hold out a lot of hope. You might enjoy this from the Buffalo Beast’s annual roundup of the 50 most loathesome Americans (Number 1 is, of course GWB).

    5. Nancy Pelosi & Harry Reid

    Charges: Graduates of the Neville Chamberlain school of appeasement, the Democratic leadership continues to ignore the constitution-and the American people-by keeping impeachment “off the table” and refusing to defund the war. True pushovers, they’re too stupid, cowardly, weak and outmatched politically to accomplish anything substantive, their “strategy” essentially boiling down to whining a lot while handing Bush whatever the hell he wants. There is just no way that appearing this weak and ineffectual could be any better for them politically than impeachment. Everything that the White House gets away with, it gets away with because congress allows it.

    Exhibit A: Failure to woo the two thirds majority needed to override a presidential veto is moot: They could defund the war with a 41-senator budgetary filibuster. But that would take guts and conviction.

    Sentence: 2 cups anthraxbisque.

  26. gerard
    January 4th, 2008 at 16:35 | #26

    Obama and Huckabee just won Iowa. Is there going to be a thread on this very interesting primary season in the US?

  27. Peter Wood
    January 4th, 2008 at 18:38 | #27

    Happy New Year John!

    I also hope that Pakistan’s crisis will provoke action on nuclear disarmament. While the likelihood of Pakistan’s nuclear arsenal falling into the hands of religous wingnuts is low, it is still far too high. Global nuclear weapons arsenals are still too high, of course anything greater than zero is too high though.

    The question arises what sort of policy measures can Australia persue to contribute to nuclear disarmament. Australia has considerable market power in this area, it may be possible to make use of this. The best reference on the global uranium market is the OECD Red Book, it is possible to download a free ‘read only’ version:

    http://www.oecdbookshop.org/oecd/display.asp?CID=&LANG=EN&SF1=DI&ST1=5L9T0F7266WF

    Nuclear weapons states have the capacity to provide for their civilian nuclear needs by downblending leftover highly enriched uranium (HEU) with natural or depleted uranium to provide fuel for their reactors. Plutonium can also be used with Thorium as a way of disposing of the Plutonium and providing energy at the same time. In 2004 world primary uranium production provided for only 60% of reactor requirements. The vast majority of the shortfall was made up for by using highly enriched uranium that was previously in nuclear weapons.

    Perhaps Australia should use its market power and refuse to export uranium to nuclear weapons states, ‘encouraging’ them to downblend more of their HEU. I’m not entirely optimistic that the Rudd government would seriously consider this as a policy option though…

  28. philip travers
    January 4th, 2008 at 22:34 | #28

    Is it possible for confident people at this site,to find in themselves either as a preparedness for honesty,tolerance or even acceptance,that maybe they should be more circumspect about their attitudes to Pakistan and Pakistanis.I have for a number of days now, with my limited computer skills, found some really atrocious overstated and terrible comments going on…including a BBC blog,and I am of the consideration…that this stuff isnt conducive to an enabling understanding.Even if you thought the Pakistani Taliban could take over, is it really necessary to think,one overcast day they would let the damned nukes off!? If they have it in for all the infidel countries,one would expect some matters of strategic game planning would have to be played through to succeed.If you think Geo W. Bush is stupid, that call is universal,so I mean are then the Taliban in Pakistan lacking any I.Q. fibre?.I was personally hoping that Musharraf would call on our Federal Police to do some investigation work…I dont trust the Pommy Police.Well that maybe the same about Police as a matter of being an opinionated citizen when it comes to things like Tasers.Haneef ,may not of been a case of Federal Police failure alone.And Winchester as head of Police before being shot means they have some personal requirement in these matters.

  29. melanie
    January 5th, 2008 at 00:05 | #29

    #28 the likelihood of Pakistan’s nuclear arsenal falling into the hands of religous wingnuts

    I’m sorry, but I think this comment is racist. Goerge W. Bush is a religious wingnut and he has his finger on the button of the world’s largest nuclear arsenal. The connection between religious wingnuttery and willingness to nuke people is not yet established.

    I repeat my question at #26 “Can someone please explain the link between the Pakistan crisis and the nuclear weapon?”

  30. Peter Wood
    January 5th, 2008 at 01:17 | #30

    Certainly Bush is also a religous wingnut and has the bomb, which is also pretty scary. When the New Yorker was reporting that the US administration was considering using nuclear armed bunker busters against Iran I was worried, probably more worried than anything happening in Pakistan at the moment. I never said Pakistani religous wingnuts were any worse than any others.

    I can’t say ever I’ve been particularly worried about Iran using nuclear weapons, having them in the first place is an important prerequisite.

    The problem with what is happening in Pakistan is that the extra level of uncertainty might raise the likelihood of a nuclear weapon being used from something like 10^-9 to something like 10^-5. It may not seem like much but something like 10^-5 is way too high for my liking. Pakistan and India have previously become too close to nuclear conflict and a year or so ago Pakistan was around the top of a ‘failed states’ index. At the same time Musharraf’s rule will have to collapse sooner or later.

    Remember the unlike possibility of the Taliban having the bomb would not only increase the likelihood of Pakistan using nuclear weapons, it would also increase the likelihood of the US using nuclear weapons.

  31. Robbie
    January 5th, 2008 at 08:06 | #31

    What does “serious action” mean? Does it mean all relevant parties sit down and calmly and rationally discuss, agree and then follow through on everyone’s kumbaya dreams? Why then do we see so much irrationality and lack of calm in [name your country/continent]?

    The issue with “serious action” is that it must have the capability to escalate to deal with the unfortunate facts of stubborn and intransigent human egos in seats of power. If you take away all “military” threat, will the result be a decrease or an increase of stubborn intransigence and wilful abuse of power?

Comments are closed.