Vladimir the Great

Ralph Peters writes that the world has only one towering figure in the halls of power, one ruler of genius:  Vladimir Putin.

There is one incontestably great actor on the world stage today, and he has no interest in following our script. Russian Prime Minister Vladimir Putin — soon to be Russia’s president again — has proven remarkably effective at playing the weak strategic hand he inherited, chalking up triumph after triumph while confirming himself as the strong leader Russians crave. Not one of his international peers evidences so profound an understanding of his or her people, or possesses Putin’s canny ability to size up counterparts.

Putin’s genius — and it is nothing less — begins with an insight into governance that eluded the “great” dictators of the last century: You need control only public life, not personal lives. Putin grasped that human beings need to let off steam about the world’s ills, and that letting them do so around the kitchen table, over a bottle of vodka, does no harm to the state. His tacit compact with the Russian people is that they may do or say what they like behind closed doors, as long as they don’t take it into the streets. He saw that an authoritarian state that stops at the front door is not only tolerable but also more efficient.

As for the defiant, he kills or imprisons them. But there are no great purges, no Gulag — only carefully chosen, exemplary victims, such as anti-corruption activist Sergei Magnitsky, who died in police custody, or the disobedient billionaire Mikhail Khodorkovsky, imprisoned on charges Russians regard as black humor. Western consciences may be briefly troubled, but Putin knows the international community won’t impose meaningful penalties. Seduced by Kremlin policies — from oil and gas concessions to cynical hints of strategic cooperation — Western leaders have too many chips in the game. And at home, the common people, the chorny narod, don’t mind. Instead, they gloat when the czar cuts off the beards of the boyars — or humbles an envied oligarch. As for gadfly journalists, Putin wagered that they could be eliminated with impunity, as in the case of Anna Politkovskaya. Our outrage is pro forma and temporary.

Domestically, Putin’s tactile sense of his people is matchless. His bare-chested poses seem ludicrous to us, but Russians see a nastoyashi muzhik, a “real man.” And his sobriety makes him the fantasy husband of Russia’s beleaguered wives.

Not least, Putin has renewed Russian confidence in the country’s greatness. Consistently playing an international role far greater than Russia’s capabilities warrant, he reawakened the old Stalinist sense that while the people may suffer, they do so in service to a greater destiny.

via The genius of Vladimir Putin – The Washington Post.

Which brings up a bigger issue:  Could democracy be finished?  The canny authoritarianism of Putin is “more efficient” than democratic alternatives.  That approach can “get things done” in a way that democratic processes don’t seem to be able to.  The “China model” that trades freedom for prosperity is being hailed as the one economic and political system that is “working.”  Meanwhile, democracies such as ours are paralyzed.

Is democracy doomed?  Is some form of Putinism in government and the China model in economics the wave of the future?

China as economic savior?

Europe is in  even worse economic shape than we are, with first Greece and now Italy being so indebted that they are threatening to pull down the whole Euro-zone house of cards.  And even Germany, still an economic powerhouse, may not have enough money or the will to bail everyone out.   Fareed Zakaria calls on the only country with the financial wherewithal to bail out Europe:  China

The time has come for China to adopt a broader concept of its interests and become a “responsible stakeholder” in the global system. The European crisis will quickly morph into a global one, possibly a second global recession. And a second recession would be worse because governments no longer have any monetary or fiscal tools. China would lose greatly in such a scenario because its consumers in Europe and America would stop spending.

Of course, China would have to get something in return for its generosity. This could be the spur to giving China a much larger say at the IMF. In fact, it might be necessary to make clear that Christine Lagarde would be the last non-Chinese head of the organization.

In a world awash in debt, power shifts to creditors. After World War I, European nations were battered by debts, and Germany was battered by reparation payments. The only country that could provide credit was the United States. For America, providing desperately needed cash to Europe was its entry into the councils of power, a process that ultimately brought a powerful new player inside the global tent. Today’s crisis is China’s opportunity to become a “responsible stakeholder.”

via How China can help Europe get out of debt – The Washington Post.

Why wouldn’t that work with us?  Maybe China would bail us out.  Of course, China would have to get something in return.  Maybe we could just sell ourselves to China.  Maybe Beijing would let us be a semi-autonomous region.

The former Soviet Union promised to bury us.  But that was in a time when nations dominated each other by war or the threat of war.  Now nations can substitute economic for military power and just buy up the countries they want.  If things get worse, don’t you think lots of Americans would be willing to give up their liberty and their sovereignty for some personal affluence?

Of course, you don’t have to sell out to China to make that kind of bargain.  Maybe the much-hailed “China model” of an authoritarian government that controls the economy while exploiting the free market will be the ideology that gets us out of our current economic malaise.  That platform would probably get a lot of votes.

China will bail out Europe

Towards the Chinese Century and world domination:

China has said it is willing to bail out debt-ridden countries in the euro zone using its $2.7trillion overseas investment fund.

In a fresh humiliation for Europe, Foreign Ministry spokesman Jiang Yu said it was one of the most important areas for China’s foreign exchange investments.

The country has already approached struggling European countries with financial aid, including offering to buy Greece’s debt in October and promising to buy $4billion of Portuguese government debt.

‘To have any discernible effect China will have to buy a lot more than 5billion euros if they expect to have any impact on the negative sentiment surrounding Europe,’ said Michael Hewson, currency analyst at CMC Markets.

China’s astonishing economic growth has put it on track to overtake America as the world’s economic powerhouse within two years, a recent report claimed.

But experts believed still be some years before America’s leadership role is really challenged – largely because Beijing has given no indication it is ready to take on the responsibility of shepherding the world’ economy.

This foray into the future of the euro could be a signal from Beijing that it is ready to change that perception.

via Fresh humiliation for euro zone as China says it will bail out debt-ridden nations | Mail Online.

The Fall of the American Empire

Foreign affairs think tanker Robert D. Kaplan argues in the Washington Post that the United States and the Soviet Union constituted, in effect, two empires that organized the world between them.  Other countries mostly aligned themselves with one side or the other.  The Soviet Empire collapsed, leaving the United States alone in the imperial role.  But now, according to Kaplan, the American empire has collapsed.

Because of our military quagmires, our economic problems, our diplomatic weakness, and our overall popularity abroad, the United States no longer carries much clout with other countries.  We can’t influence even the little ones any more to do what we want.

China is on the verge of replacing  the United States as the world empire.  But it isn’t quite ready yet.  In the meantime, Kaplan predicts global instability since “no one is in charge.”

This raises lots of questions:

(1)  Do you think he is right?

(2)  Does the United States have any business being a de facto global empire?  (The old empires, like that of the Romans and the British, at least profited from their takeover of other countries, unlike the United States with its “soft empire.”)  Wouldn’t it be better for this country if we just hunkered down behind our own borders, letting the rest of the world go its own way?  (On the other hand, didn’t Rome try that, only to find there were no more buffers to keep the Barbarians away?)

(3)  What do you think the world will be like under a de facto Chinese empire, with its free market communism, that strangely effective blend of totalitarian government with money-making enterprise?

via Where’s the American empire when we need it?.

How China will bury us

China is thinking way beyond making money by trade and overseas investment.  James McGregor tells about still-Communist China’s latest economic plans:

How do we overcome the fundamental disconnect between our system of scattered bureaucratic responsibilities and almost no national economic planning vs. China’s top-down, disciplined and aggressive national economic development planning machine?

At issue is an array of Chinese policies and initiatives aimed at building “national champion” companies through subsidies and preferential policies while using China’s market power to appropriate foreign technology, tweak it and create Chinese “indigenous innovations” that will come back at us globally.

China has long been a “pay-to-play” market for foreigners, with mandated joint ventures in key industries, local manufacturing requirements and forced technology transfers as the price of market admission. Its entry into the World Trade Organization in 2001 was supposed to do away with the bulk of those barriers — and many were eliminated on paper.

But long gone are the days of China acting as a supplicant to gain access to foreign markets or obtain foreign investment. China now funds the U.S. budget deficit. Its rapidly developing domestic markets are expected to lead global growth for decades. The quarterly earnings of the world’s biggest multinational companies increasingly depend on their China business.

Chinese leaders — shrewd students of political and economic leverage — are shifting their focus from global trade and investment principles to the creation of their own rules and a “China model” of economic development that is difficult to challenge in international courts. Chinese policymakers are masters of creative initiatives that slide through the loopholes of WTO and other international trade rules. Facing off against this are 30 lawyers in the U.S. trade representative’s office of general counsel — only one of whom can read Chinese. This small cadre handles all WTO cases and supports all our trade negotiations globally. Only a half-dozen people in the office focus on China.

As part of their “China model,” that country’s leaders have decided that key sectors of the economy will remain “state dominated,” including automotive, chemical, construction, electronic information, equipment manufacturing, iron and steel, non-ferrous metals, and science and technology. Others will stay “largely in state hands,” including aviation, coal, defense, electric power and grid, oil and petrochemicals, shipping and telecommunications. State-owned companies in these industries are thriving in their protected home market. They have buckets of cash and easy access to state bank loans to carry out government directives to pursue overseas acquisitions and “go global.”

Most worrisome is the Chinese government mandate to replace core foreign technology in critical infrastructure — such as chips, software and communications hardware — with Chinese technology within a decade. The tools to accomplish this include a foreign-focused anti-monopoly law, mandatory technology transfers, compulsory technology licensing, rigged Chinese standards and testing rules, local content requirements, mandates to reveal encryption codes, excessive disclosure for scientific permits and technology patents, discriminatory government procurement policies, and the continued failure to adequately protect intellectual property rights. The poster child is the evolving “indigenous innovation” policy, which appears aimed at using China’s market power to coerce foreign companies to transfer and license their latest technology for “co-innovation” and “re-innovation” by Chinese companies.

via James McGregor – Time to rethink U.S.-China trade relations.

Notice that this is NOT free market economics but state-run and state-directed economics that takes advantage of capitalist economies by means of state monopolies, coercive government power, and economic clout.


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