Expecting the Chinese to be Chinese on the yuan
Thomas Barnett
¦"Behind Yuan Move, Open Debate and Closed Doors: Two-Year Saga Included Secret and Staged Meetings, Weeks of Quiet Diplomacy," by James T. Areddy, Neil King Jr., Mary Kissel and Jason Dean, Wall Street Journal, 25 July 2005, p. A1.
¦"Yuan Moves Might Stir Big Ripples: Revaluation May Cause Drop In U.S. Bond, Housing Prices; 'Shot Heard 'Round the World'?" by E.S. Browning, Wall Street Journal, 25 July 2005, p. C1.
¦"Classical Theory vs. the Real World," by Amar Bhide and Edmund Phelps, Wall Street Journal, 25 July 2005, p. A14.
¦"Yuan's Revaluation May Give Asia a Lift, Aiding Global Growth," by Mary Kissel, Wall Street Journal, July 2005, p. A2.
¦"Look to Virginia, Not China," editorial, New York Times, 25 July 2005, p. A22. ¦"," by , , July 2005, p. A1.
¦"China Suppliers Join in Plan To Rescue Huffy," by Henry Sender, Wall Street Journal, 25 July 2005, p. B1.
First story is simply a fascinating recounting of China's lengthy and amazingly open decision-making process on finally moving to make the yuan convertible.
"Open" may strike you as a very odd term to describe China's decision-making process, because the actual decision was made behind close doors and then even announced behind them (this part of the story is quite fascinating and worth a read). But you have to keep things in perspective: we're talking about a single-party state that's been rather authoritarian (taking the long view) for about . . . uh . . . several thousand years!
So when Chinese leaders invite, as they did in May of last year, a bunch of American economists to debate the issue in front of them, that's a big step.
When the Chinese spend months having their people study Singapore's currency-basket float, that's a big step.
And when the Chinese ask U.S. Treasury officials to get certain big-mouth senators to tone it down for a while so their decision to float the yuan, however tightly, isn't viewed politically as a cave-in to American pressures, that's a BIG step.
Remember as I said in PNM: direction is critical, not degree. Show the direction China is moving in, not the degree to which it remains a single-party state (like American ally Singapore, I might add).
In the short term, Americans and our economy might get some benefits, but they'll be small and insignificant. The threats from a floating yuan are far greater, simply because a floating yuan will push China to synch up its internal economic rule set even faster with the emerging Core economic rule set, and that will make China less dependent on our money as their preferred reserve currency.
Think that doesn't matter to you? Well, speaking as someone paying rent for the next few months, I'm okay with that. But speaking at someone facing a 30-year fixed mortgage, I'm far less sanguine.
As Bhide and Phelps point out in their brilliant op-ed (WSJ, natch), there's nothing wrong with a less developed state like China running a big trade deficit with a more advanced economy like the U.S. It allows them to import lotsa technology in gulps (even to buy our companies) and it keeps the price of money here cheap.
I know, I know, everyone wants to talk about the price of Chinese textiles, but frankly, the price of money is the only price that really matters. When money is cheap, it's easier to grow and live well, and when it's expensive, that gets harder (although a little discipline is always a good thing).
Well, we wished for it and now we're going to get it, and we're going to get it the Chinese way: drawn out in slow motion for as long as possible, with one eye on keeping the Chinese economy rolling and another eye on keeping the "communists" in power (Wonder what Mao would say about a floating yuan? Go ahead and ask him. He adorns half the paper money in China.).
In the end, of course, all that "China said, America said" stuff is insignificant. A more integrated China is better for the global economy as a whole-meaning we all make more money. So the Times is right: get our own economic house in order (primarily by retraining our workers displaced by globalization's myriad competitions) and stop blaming China for any economic distress globalization causes us.
You either get busy globalizing or get busy isolating.
And yeah, it works both ways. Chinese bicycle supply companies are in the process of bailing out American brand Huffy.
I know, I know. The Chinese will soon corner the bike market and then we'll be vulnerable to their pressures and will!
Too late. One-hundred percent of Huffy bikes built last year were assembled in China. The Chinse companies are bailing out Huffy (and picking up a 30% equity) because they fear that if Huffy tanks, there too will go all their American business.
Connectivity is good, but it's complex. It's not easily reduced to catch-phrases and finger-pointing exercises so favored by our least economically sophisticated citizens.
And yes, I'm talking about the Senate.
Lower thresholds for danger are a good thing, but don't signal a more dangerous world
¦"Common Industrial Chemicals In Tiny Doses Raise Health Issue: Advanced Tests Often Detect Subtle Biological Effects; Are Standars Too Lax?" by Peter Waldman, Wall Street Journal, 25 July 2005, p. A1.
Fascinating article about how scientists and government regulators are now coming to the consensus that, thanks to better measuring technologies, we're able to detect very tiny amounts of certain chemicals in our environment and begin to trace their impact on our bodies and lives.
This is, as with most new and improved technologies, both good and bad. Learning about these things, if we approach them with the same old same old answers, could end up generating cures worse than the disease. After all, you can't just say that we're going to build a world without any of these chemical traces because the benefits we garner from their use may end up saving or extending more lives than their limited presence in our environment may cost in terms of lives lost or shortened.
Here's a good example: When my daughter Emily's kidney cancer is diagnosed as metastasized to both her lungs, we achieved that diagnosis with a CT, or "Cat Scan." The chemo/radiation protocols in play at that time didn't really have a definitive answer to finding these very small tumors in her lungs, tumors so small that in the past they went undetected with just X-rays. Here was the conundrum: go more aggressive on chemo and radiation, armed as we were with this knowledge, or just pretend like they weren't there on the assumption that a lighter protocol of chemo and radiation, or the one we would have chosen absent this additional information, would do the trick and cause her fewer potential "late effects," meaning physical damage and complications from the harsher treatment choice.
The history and data to guide our choice back then was very ambiguous. We could never be sure if we were operating under "better intell" or just "more information than needed." There was a balance to be achieved, and the science only provided us with the dilemma, not the strategic decision.
In the end, we took the harsher approach. And may God have mercy on our souls if Emily someday ends up paying for our choice.
Connectivity empowers women across the dial, across the globe
¦"Army women defy insurgents, taboo: General says Iraqi military needs female soldiers, but they face opposition from foes-and even family," by Rick Jervis, USA Today, 25 July 2005, p. 8A.
¦"Editors Tackle Taboos With Girlish Glee: The government, the military and the church: sacred cows no more," by Raymond Bonner, New York Times, 25 July 2005, p. A4.
Interesting pair of articles. Makes you wonder why, whenever you read about women gaining power and independence in the Gap, the title of the story always seems to contain the word "taboo."
American service women in Iraq are amazed at the speed with which Iraqi women have achieved some serious parity with their male counterparts. As one said, "How many years did it take us to reach this level?"
Ah, but it took America having to resort to a "mercenary army," meaning one without a draft, to achieve some gender equality.
Meanwhile, the Philippines' political and social scene is being rocked by a female-heavy newspaper staff who have the tendency to take on male-dominated institutions in their country, like the military and the Roman Catholic church.
When asked who their role models were, the ladies said "Vanity Fair" and "Mother Jones." VF taught them how to construct covers that sell and MJ taught them how to rely on foundations for funding-even foreign governments!
Dangerous thing, all this connectivity. Provides too many dangerous examples. Gives women guns and pens.
Kim's strategy is same as it ever was
¦"N. Korea has little to lose in nuclear talks, analysts say," by Barbara Slavin, USA Today, 25 July 2005, p. 9A.
News flash! North Korea is probably risking little in re-engaging the Core's regional great powers in negotiations regarding its persistent pursuit of the bomb.
Why? Because Kim Jong Il never keeps his promises and only uses negotiations to wear out those attention-deficit disorderly Americans.
American-led sanctions do nothing, except probably harm the average person in North Korea, who, thanks to all those years of deprivation under the Great Leader and his idiot son, is somewhere on the order of 8 inches shorter and probably about 50 IQ points lighter than your average South Korean.
So bring on the diplomats please! We've achieved so much using them in the past.
The SysAdmin ain't yer daddy's military-and that's okay
¦"Energy beam weapon may lower Iraqi civilian deaths: Seen as way to avoid checkpoint shootings," by Steven Komarow, USA Today, 25 July 2005, p. 1A.
¦"Pentagon deploys array of non-lethal weapons: New devices are being tried in Iraq to protect troops and civilians," by Steven Komarow, USA Today, 25 July 2005, p. 14A.
¦"Torpedoed ship survivors reunite: Sixty years after tragedy, ex-sailors keep story of USS Indianapolis alive," by Ken Kusmer, USA Today, 25 July 2005, p. 14A.
¦"Uniform Sacrifice: Americans are fighting, but the country is not at war," op-ed by David Douglas Duncan, New York Times, 25 July 2005, p. A23.
¦"The Best Army We Can Buy: We've lost the link between citizenship and service," op-ed by David M. Kennedy, New York Times, 25 July 2005, p. A23.
¦"Suicide Bombings Bring Urgency to Police in U.S.: 'It almost seems to be a question of when in this country, not a question of if,'" by Sarah Kershaw, New York Times, 25 July 2005, p. A14.
¦"In Most Cases, Israel Thwarts Suicide Attacks Without a Shot," by Steven Erlanger, New York Times, 25 July 2005, p. A11.
The SysAdmin force is waking up to non-lethals in a big way. This is a "new development" and a "revolution in thinking" and a host of other superlatives that indicate that most journalists' sense of history is frighteningly thin.
All this non-lethal stuff began in our experience in Somalia, and specifically with CENTCOM chief General Tony Zinni's frustration at doing SysAdmin work there armed out with bullets, which present a rather binary rheostat, as in, use 'em or don't, shoot 'em or don't, and go kinetic or don't.
So Zinni was the bureaucratic push within the Marine Corps to start the Non-Lethal Weapons Directorate down in Quantico, Virginia. I'm familiar with that effort, which later morphed into the Joint Non-Lethal Weapons Directorate, because I, along with Gen. Paul Van Riper and John Nelson, were part of a group of consultants that the Directorate used in the late 1990s to engage in strategic planning, under the guidance of a charismatic former Marine-turned-analyst called Butch Foley. It was during that effort that I finally found an audience for my alternative global futures brief that later morphed into my Y2K brief, and later my NewRuleSets.Project brief, and later my Office of Force Transformation brief, and later The Pentagon's New Map. No Butch Foley and Tony Zinni and the Marines' thinking about non-lethals, and I'm probably still in DC slaving away as an anonymous analyst.
What was the upshot of all the alternative global futures work I did? We came to a firm conclusion: you could not imagine a future world scenario in which NLTs (non-lethal technologies) wouldn't be both useful and represent a huge return on investment. But the world future in which they would be most useful would be one where there wasn't any bipolar standoff, nor any great-power free-for-all, but rather lots of low-level terrorism and failed states.
The work was summarized in a series of unclassified Center for Naval Analyses reports, and it was well received by the Marines. Problem was, it didn't serve them well at all in the budget battles that lay ahead, so right through 9/11, the Defense Department as a whole was spending almost nothing on NLTs. This is what I mean by buying one military and operating another, and it's what I mean when I say that Pentagon strategists basically blew it on their strategic forecasts, because if the right ideas had prevailed, our SysAdmin troops would have had these technologies in abundance going into the Iraq occupation.
So we learn through error, which is natural. And we adapt ourselves to the new struggle, which is also natural. And we fight a global war against terrorism with a force that looks more and more SysAdmin and less like your dad's military, and that is also natural.
Yes, yes, there are many who will bemoan this "mercenary army," which is an idiot's phrase if ever there was one. It's a professional army, just like a professional police force. Why doesn't anyone ever bemoan America's "mercenary police"? I mean, those guys just do it for the money, right? And doesn't having "mercenary police," largely drawn from lower and middle classes I remind you, somehow diminish the links between citizenship and security in the U.S.?
Hmmm. Maybe we should arbitrarily assign people from all socio-economic classes to such security jobs as the government sees fit. That would make for a better citizenry in the United States.
No, wait a minute. The Soviet Union tried that for decades and it was called communism.
Damn! I hate when that happens!
Ah, but I'm describing something so different from what cops do here in the U.S. In Iraq, we're talking about guarding people and places, stopping bad guys from committing wanton acts of violence and seeking, through that violence, to intimidate a population. Cops don't do anything like that here in the States. Plus they never get killed in the line of action. And if they did, certainly their sacrifices wouldn't compare whatsoever to our loved ones trying to bring similar benefits to postwar Iraq.
So cops here at home are good, and even if we pay them, they're certainly not "mercenary." And even if most come from families (typically not rich) with long histories of being cops, then that form of social specialization is good. Whereas if similar trends appear with military families (also typically not your wealthiest clans), and if we're so crude as to pay them for such services, then this is clearly a "mercenary force" that diminishes the bonds of citizenship for us all.
Americans are SysAdmin'ing the Middle East, but the country is not at war. Get used to it. Cop families got used to it a long time ago in our various "wars" on crime, drugs, etc. And military families got used to it a long time ago in our various SysAdmin jobs across the length of the post-Cold War era.
True, there are many old-timers who do not recognize themselves in this SysAdmin force, nor in the nation-building efforts it so routinely undertakes. But guess what? It isn't my daddy's international security system, and thank God for that. Because that system was good for little except generating great power wars.
I know, I know. WWII was a "good war." Almost a quarter million American dead. That was a good war, my friends. We're still at less than 2k combat deaths in this Global War on Terrorism, but naturally, this war can't be a good one. No, good wars involve "uniform sacrifice" where we kill off far larger segments of our population. The Civil War, in this regard, was the "best war," which we why we engage in such idiotic romanticism regarding it.
I met a survivor of the USS Indianapolis today on my plane out of Indy. He doesn't remember the war being "good." About 800 guys on his ship didn't survive. Somehow being part of a "citizen army" didn't make it any better for him. It became a "good war" only when it ended.
The Indy delivered the components for the first atomic strikes on Japan. The mission was so secret, it steamed without escort. We dropped the bomb, killed huge numbers of Japanese civilians, and spared probably just as large a number of U.S. troops from deaths in trying to take Japan city by city. One of those troops might have easily been my Dad, who instead had a fairly quiet time in his Landing Craft Infantry (Large), or LCI(L).
Yes, yes, the good old days of good old wars.
So I guess we just need to get more Americans killed faster, so we can have a draft, and so we can engage in "good war" that leads to "good citizenship."
No, wait a minute. That was Nazi Germany and fascism.
Damn! I hate it when that happens!
Will this war come to our shores again? Only the most optimistic think we'll be spared forever. But it's interesting that since we go on the offensive and take the fight to the places where it truly belongs (the Middle East, because this terrorism isn't about changing governments here in the States), we haven't seen a major strike or even the rise of suicide bombings here (What's wrong with American Muslims anyway? Are they integrating themselves too successfully in our economy and society? And if they are, shouldn't we put a stop to that "infiltration").
No, wait a minute. That was McCarthyism and anti-communist fear-mongering here in the 1950s.
Damn! I hate when that happens!
So maybe working to keep our country open and welcoming to the world's Muslims could be a good thing, so long as we have a police system that's smart enough and resourced enough to detect and weed out the bad apples who seek to do us harm.
No, wait a minute. That's Israel for the last several decades.
Geez! I love it when that happens!
So Israel cops are the hot ticket item for U.S. police commissioners trying to gear up their systems for the inevitable attempts by the global Salafi jihadist movement to strike against the Distant Enemy (us). The Israelis have been doing SysAdmin work for years now in two of the toughest neighborhoods in the world: Gaza and the West Bank. While they've kept the violence down to acceptable levels, the Israelis haven't yet cracked the military-market nexus of fostering broadband economic connectivity for these regions with the outside world. So they remain isolated, poor, and full of pissed-off young men.
So let's not assume that getting more Israeli-like in our domestic SysAdmin force called the police will be the only answer or even the best answer to stemming any onslaught of suicide bombers here in the States. If we provide Muslim immigrant families with real opportunity for economic connectedness, by and large they will police their own, leaving the jihadist professionals to our SysAdmin professionals to handle (cops here at home and in conjunction with others cops across the Core, and the U.S. military in the Gap).
And no, none of this activity constitutes being a "merc." It's a job. A dangerous job. A job with real honor and commitment. These jobs don't make you better Americans than anyone else. This isn't "Starship Troopers." This is a real world, a real global system, and it needs administering both here and abroad, and the dirty work will get done by professionals-as it should be.
Al Qaeda was always more ideology than organization
¦"Searching for Footprints: With Qaeda a Concern, Analysts Raise Doubt About Linking Attacks in London and Egypt," by Elaine Sciolino and Don Van Atta Jr., New York Times, 25 July 2005, p. A1.
¦"Egypt Bombings Strike at U.S. Ally On Economic Front," by Karby Leggett and Yasmine El-Rashidi, Wall Street Journal, 25 July 2005, p. A3.
I don't get this frantic effort to figure out decisively whether the bombings in London and Egypt received a thumbs up or not from Osama. "The base" (al Qaeda) was always designed to be more inspiration than calibration. Osama's not the Pope. He's the "prophet" spreading rationales for violence. Looking for definitive links is useful for counter-terrorist strategies but it's a trivial pursuit for the home audience. Whether such links are discovered or not is never going to prove anything one way or the other about the "spread" and the "dangerous turn" and the "new danger" and the "unprecedented sophistication" and any of the other phrases that journalists love to use to jack up their daily reporting.
There will be sympathizers who strike on al Qaeda's behalf and in its name and in keeping to its broad vision of anti-Westernization and anti-globalization and anti-connectivity for Islamic countries. They will strike mostly within those Islamic countries, but in their Occidentalism, or iconic hatred of the West, they will persist in pursuing a bloody nose strategy of striking in the Core, focusing on our allies, in an attempt to scare of our publics from persistence in a Global War on Terrorism, the main outcome of which must be the connecting of the Middle East to the global economy in a broadband fashion that liberates populations there first economically and then politically from decades of state-heavy economic stagnation and heavy-handed political authoritarianism.
And yes, most of these attacks will be undertaken by those who emigrate from the Gap to the Core, men who, in the resulting social isolation associated with that difficult journey, believe they find an easier way out through martyrdom. Survivor's guilt is a very powerful thing, and it expresses itself in a myriad of ways. You wanna know why so many Irish-Americans supported the IRA for years with money, funding their terrorism? Because it assuaged their guilt in having gotten out and achieved something better here in the States. Macho bullshit to some, a deep call to aid the homeland to others.
We're not going to educate this nonsense out of the heads of prospective terrorists. We're not going to "strategically communicate" our ways out of this problem. We're going to have to connect these individuals, but more importantly their families, to economic opportunity here in the Core. I say, connect the women, and let them deal with the macho bullshit.
Fastest way to a man's heart is not through his stomach. You have to aim a little lower.
Kill some international businessmen and it's a tragedy, kill several hundred thousands young children and it's a statistic
¦"China Bird-Flu Scare Ends," by staff, New York Times, 25 July 2005, p. A8.
¦"Niger's Food Crisis Worsens Depite Appeals," by Associated Press, New York Times, 25 July 2005, p. A8.
It's truly a reflection of how connected China is to the global economy that the avian flu scare got as big as it did. Yes, fear of dead bodies in the millions drove some to act, but it was actually the threat to the country's economic connectivity that drove the Chinese leadership to respond so forcefully. Remember when one Western businessman flying out of Hong Kong with SARS led the World Health Organization to shut down Toronto? That sort of connectivity is pretty scary, but don't kid yourselves. The Chinese leadership rules over 1.4 billion Chinese, so kill off a few thousand of them with a flu . . . hell the flu does that there in tens of thousands and that's just what they call winter over there. But kill an international businessman and shut down Toronto, and you've got one scary "epidemic."
Fitting the System Perturbation definition: it's not the amount of death and destruction that matters, but how much the rising density of the medium transmits "pain," primarily defined in economics, plus the resulting rule-set reset, that really matters. SARS was a real System Perturbation, and because it was, avian flu is unlikely to become one. Humans matters, but not equally, in this process. The more connected the human, the stronger the transmission effect and the greater the potential for a System Perturbation.
Right now the UN estimates that roughly 800,000 children under the age of five in Niger are facing severe hunger and a good portion of them even starvation in that country's food crisis. In all, 1.2 million children are at risk, and as much as 2.4 million adults.
Too bad international businessmen can't catch starvation, huh? Then you'd see Core powers fork over the money big time. For now, in Niger, little money is being offered.
Locusts and drought drive this process. But God knows a real environmentalist stands tall and proud against genetically modified organisms that are locust- and drought-resistant. Nay, nay, no Frankenfoods for me! Better all those little kids in Niger pass on and reduce the surplus population!
I know, I know, the real danger would be long-term. If we gave them GMOs, then we'd end up having to import their food, and that would put farm corporations out of work. How many dead African kids does it take to justify farm subsidies? Never enough, I assure you. No, no, better to stop Monsanto from ruling the world with GMO seeds. Niger obviously suffers from too much globalization, yes?
Small dark people dying in a galaxy far far away. I know I shouldn't care. If they don't die from American bullets, then they're not really dead-just gone.
I wonder if "Nightline" will spend several dozen shows reading the names of the fallen? Me, I await the peace march.
Posted by Thomas P.M. Barnett
thomaspmbarnett.com |
