Japan to the U.S.: 'We Don't Want to Exclude You, But...' 125 comments
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Gaming the collapse of the dollar reserve system remains a favorite pastime of forex and commodity traders. Japan’s new prime minister Yukio Hatoyama is talking about an “Asian community.” The Reuters dispatch cited below indicates Japan’s dilemma. Japan doesn’t want to “exclude” the US or the dollar from an Asian community or a new monetary arrangement, but the risk is that the failure of American policy on all fronts will force the rest of the world to do for self. That, as I wrote earlier this week, is why the gold price continues to rise.
TOKYO, Sept 16 (Reuters) - Japanese Prime Minister Yukio Hatoyama said on Wednesday his vision for an Asian community didn’t mean he wanted to diminish the role of the dollar or exclude the influence of the United States from the region.
Hatoyama’s comments may do little to ease market jitters about Japan’s new government and its stance on the dollar after remarks from newly appointed Finance Minister Hirohisa Fujii caused the yen to jump to a seven-month high against the greenback.
...
“I think (a community) is the right direction to consider in Asia, in East Asia in particular, over the medium- to long-term,” Hatoyama told reporters after his Democratic Party took control of the government.
...
“That is not aimed at excluding the dollar or the United States. Rather, I envision an Asian-Pacific community beyond that.”
...
The dollar slid to 90.12 yen, the lowest since February, after Fujii said he didn’t think the yen’s recent gains against the dollar were rapid and that a strong yen could benefit Japan. It was later trading around 90.35 yen.
Other Democratic Party lawmakers have also made comments suggesting they would rather let the yen strengthen to benefit households and that Japan should generate more returns from its $1 trillion in currency reserves, the bulk of which are believed to be held in dollars.
Of special interest is the bit about benefiting households by allowing the yen to strengthen. As I’ve argued in the past, an aging population depends increasingly on savings invested in fixed income. Inflation generally represents an intra-generational wealth transfer because it benefits debtors (who tend to be young) at the expense of creditors (who tend to be old). An aging society has a stronger constituency for deflation.
In the past, Japan’s export industries (and their workers) protested vehemently against a rising yen, which of course prices some of Japan’s exports out of the market. As Japan becomes a nation of pensioners and rentiers, the coupon-clippers’ constituency for deflation may prevail.
More broadly, the world in the wake of Obama’s first sallies into the big world brings to mind Robin Williams' 1970s nightclub act. He'd announce an impression of President Carter addressing the nation on the eve of World War III, and say: “That’s all, good night, yer on yer own.” Even the Israelis are considering alternate arrangements to their longstanding alliance with the United States, not only because the Obama administration seems willing to throw them under the bus, but because the United States has become unberechenbar – incalculable, as former German Chancellor Helmut Schmidt used to say of Ronald Reagan.
But Reagan was quite a calculable. No-one knows what Obama has in mind. WIll he surge or scurry out of Afghanistan? Will he brown-nose or bomb the Iranians? Will he placate or plaster the Pakistanis? Will he start a trade war with China or forge a new economic alliance? And what will his economic policy turn out to be?
Speaking of economic policy, it is quite unclear who is running what in Washington. Larry Summers, who wears his ego on his waistline, earned himself a long stay in the doghouse by talking down to the President at a number of late-night sessions. Timothy Geithner’s impression of Stan Laurel continues and persuades no one. For all intents and purposes, Ben Bernanke is running American economic policy, but his board is more split than a Fed board has been since the 1980s. American economic policy is the most incalculable thing of all.
No one wants the United States to disappear from the scene: No one wants to shoulder the burden of being the world’s policeman-cum-mediator, of providing a global reserve currency, of sending aircraft carriers to put the bad guys in their place. An Australian politician with a longstanding interest in foreign policy was seated next to me at a Melbourne dinner a couple of weeks ago, complaining bitterly that Australia would have to start spending huge amounts on defense to replace the lost presence of the US.
No one wants to see the US go, but everyone is busy making alternative arrangements. It reminds me of the end, rather than the beginning, of the Carter administration. It’s going to be a long, long three years.
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This article has 125 comments:
Let them spend their own new reserve currency on defense and we can lower our DOD budget by $100 billion. Ditto the RPK, Israel, India, and Pakistan. They can build and buy their own fighter jets, fight domestic terrorism, and control international maritime piracy. America is broke and Americans are hungry and unemployed. Many are tired of paying the bill of global military power projection.
Its about time they grow up.
> Let the rest of the world start taking care of themselves, their
> security and their fears.
Too true! Particularly because we can't afford it any more. The national debt and unfunded SS/Medicare/RxDrug liabilities are killing us.
To benefit from our defense umbrella and protect reserves invested in the dollar, the Japanese are likely to pursue trade structures that preclude US participation while, disengenuously, assuring the world that ties to the US remain firm.
Before abandoning the ship, both China and Japan would like to have something more concrete in place to replace the dollar; in the meantime, they will reduce exposure through diversifying reserve holdings, minimize additions and, simultaneously, work towards a new reserve currency while placating the US.
They want to keep their options open.
The reality was that, after the WWII, the USA imposed itself on other countries in the same way Soviet did. Using its military presence and power, the USA acted as a colonial power in Latin America, Asia, Africa as well as bulled its European friends. It acted no different than the Soviets in the occupied Eastern Europe.
Well, the Soviet post-WWII empire has collapsed. Presently, the American empire is under a severe duress. Iraq and Afghanistan clearly show limitations of American military capabilities. American economy is on "stimulus steroids". Furthermore, American political elite has shown to the world that it is incompetent, near-sighted, unpredictable, unreliable, and very selfish.
Consequently, the rest of world is moving forward to post US empire geopolitical arrangements.
Now we see a new broom in Tokyo, and some very old ideas.
Japan would do well to watch their backs in that new "CoProspertiy Sphere" they are concocting.
Any unrest they might feel exisitng in America's shadow will be nothing compared to sprawling naked surrounded by economic and political predators.
As for the topic of Japanese deflation, that has been in the cards for decades, following the absurd commercial real estate valuations placed on their national balance sheets over 20 years ago. Unwinding that insanity will push all economic factors toward deflation, if nothing else.
I'm pretty sure it's more stimulating then all their bridges to nowhere, or our own tattoo removal machines and studies on reducing the odor of pig farms.
D'oh! Just compare the economic and political performance of western europe and Japan/S. Korea (the allies who we 'bullied') with the performance of Soviet puppets in eastern europe and the far east. As for latin america and africa they are socialist tinpot basket cases and always will be.
On top of that, last weekend, I had supper with three wonderful Chinese female graduate students, one of whom was getting her graduate degree in the Japanese language. Although I explained to them that my Grandfather faught against the Japanese in World War II and had no bad feelings toward them, I could not get one of the ladies to say in Chinese that she could forgive the Japanese. Go figure.
I think the Japanese leadership are being naive about the palpable sentiments here in North East Asia regarding their legacy.
It is the US Regime that the world wants to exclude because it is the US Regime that degrades the Constitution, sneers at America's legacy, mocks the American Experiment and treats ordinary Americans with the contempt of an occupier and master.
Is the world's response so incomprehensible given that the effective policies of the Regime are :
1. Take goods and services from the world and in return give them unredeemable fiat dollars and virtually no interest on US debt
2. Prevent Americans from developing, using and indeed exporting America's enormous, high quality and diversified energy resources and tremendous energy engineering, financing and operational capabilities
3.Generate more investor risk than any other source on the planet while confiscating the rewards from work, savings, innovation and invention
4. Forbid the US military from winning the wars it is ordered to fight while appeasing and coddling the sworn enemies of liberty
5. Indoctrinate another generation of young people into believing that it is nobler to consume, borrow and take than to produce, save and give: turn self absorption and instant gratification into the prevailing state religion
6. Actively promote class warfare by nurturing envy and entitlements in the lower class and greed and pillage in the upper class
In Sept 2009, ordinary Americans may have no choice about submitting to the Regime but, if what is published by several writers on SA is accurate and the repeated statements of the Chinese, Russians, Brazilians and even Indians are credible, the rest of world is busy searching for ways to escape.
The longer I live here in Asia, the worse my English becomes.
I think it is a good idea for the Japanese to further integrate themselves into the North East Asian community.
However, they must realize that there are certain actions that they must now take to give face to their future partners. I am sure they know that.
Said another way, they must apologize for their legacy to those people that they previously disgraced.
The Chinese don't hate America. Where did you ever get that idea?
To copy things is natural. It is up to nation/states, courts, governments and lawyers to protect copyrights, not the people on the streets.
I don't know, sounds like you want war.
For me, I understand the challenges. I maintain an open mind.
Guess what, in order to run a trade surplus you need a partner that is willing to run a trade deficit.
Over the last 2-3 years, Japan's defense establishment has made numerous statements regarding the fact that Japan CAN NOT rely on American defense guarantees anymore and must pursue its own international policy in Asia. America's lack of credibility has recently been highlighted by the slow response to China's naval harrassment of a US Navy research vessel and then later the complete lack of response to N. Korea's missle shot through Japanese air space.
In addition, Japan doesn't need nuclear subs and carriers. All of their defense concerns are very local and short range. And in that regard, they are already well armed. Their shore defense navy is formidable, and their air defenses are more than sufficient to make any assault on Japan very costly to an agressor. In regards to Guam, that base is mostly used to support Taiwan, and has been effectively neutralized by recent concessions to China made by the Obama administration. Concessions largely induced by the USA's need for Chinese bond purchases, btw. Okinawa is a more pertinent example in terms of Japanese security, and Japan has been suggesting we leave the island for quite some time.
Let's just be honest about what is happending. Japan has been the most steadfast supporter of the dollar that one can find. The latest announcement is a kindly reminder that the days of dollar (and USA) dominance are waning. Japan is preparing for significant changes in the near future where they will inevitably begin direct dialogue/agreements with China over security and economic issues. No one realistically expects the USA to be a major policy player in Asia in the long term. Even Australia is swinging to a direct relationship with China with little expectation of American participation.
On Sep 16 08:36 AM markfl wrote:
> The US isn't going anywhere. How nice of Japan to invite us to come
> out and play. They can attempt to exclude all they'd like. Let them
> have a stroke next time the N. Koreans test missiles near their back
> porch. They can build their own ABM system, theater ballistic misslies,
> nuclear subs, and aircraft carrier battle groups. At the same time,
> they can do without any of ours or our implicit nuclear shield and
> defense posture in Guam.
>
> Let them spend their own new reserve currency on defense and we can
> lower our DOD budget by $100 billion. Ditto the RPK, Israel, India,
> and Pakistan. They can build and buy their own fighter jets, fight
> domestic terrorism, and control international maritime piracy. America
> is broke and Americans are hungry and unemployed. Many are tired
> of paying the bill of global military power projection.
This is a bit much. 'In the same way the soviets did'? America was pragmatic and tough; but they did not enslave Western Europe, build walls to keep creative citizens from leaving their countries, did not run a system of gulags where political dissidents were starved and frozen to death.
America was not angels, agreed. We did a lot of bullying and threatening and cruel interference in Latin America and Asia. But equivalent with the Soviet Empire? You need to study a bit more on what life in the Soviet bloc was like. America puts up imaginary walls to try to keep foreigners from coming here; communists put up real walls to keep its own citizens from escaping. The Soviet system was a giant prison. China was a giant prison. You could be put in jail for 20 years to life for demanding democracy.
Equating the two systems is a folly. Capitalism is unjust; Communism was unjust and stupid.
This pan-Asian hurrah has been heard before...about the time of the last Great Depression in fact. Just before World War broke out. Is Alice watching us from the Looking Glass; or are we watching Alice?
The yen has remained overvalued for to long and must go lower to get the exports flowing again, Japan is an export led economy and while the global economic situation has caused problems internally, the over valuation of the currency has strangled the life out of the economy.
The yen's depreciation since February has been mild and the currency remains expensive in real terms, helping feed an eighth consecutive monthly trade deficit in March which shows collapsing exports, falling internal consumption which have been the result of delayed action from an unpopular government.
With the global downturn in place as well there is no end in sight at present for Japan's economic decline.
Japan's Q4's figures were poor showing a 12.1%annualized GDP contraction and Q1 looks like it will be as bad or even worse. Business confidence it at its lowest level since records began back in 1974 and unemployment is rising and set to rise further. This will give consumer confidence another knock down and consumption will fall even further. With no recovery ahead in the global economy the yen looks set to fall sharply.
-----------------
Look after your pennies, and your pounds will look after themselves.
www.personalbudgetinve...
Steingart also mentions that conversely, the Japanese have little in the way of warm feelings towards the Chinese, which is something that Japan has in common with most of China's neighbors. Steingart says, "The Chinese are not liked anywhere because of their sheer numbers and the fact that they have been too proud and successful recently."
Therefore, based on Steingart's writings, and your first-hand experiences, I doubt if there will be any spirit of true "community" in any gatherings of Asian countries for the time being. Nevertheless, I believe that over time -- taking Steingart's long-term perspective into consideration -- the handwriting is on the wall for a rising Asia (India included) of the likes never seen before. Unfortunately, for Japan, it will not be on the forefront of this success.
On Sep 16 01:25 PM WS1835 wrote:
> markfl -
>
> Over the last 2-3 years, Japan's defense establishment has made numerous
> statements regarding the fact that Japan CAN NOT rely on American
> defense guarantees anymore and must pursue its own international
> policy in Asia. America's lack of credibility has recently been
> highlighted by the slow response to China's naval harrassment of
> a US Navy research vessel and then later the complete lack of response
> to N. Korea's missle shot through Japanese air space.
>
> In addition, Japan doesn't need nuclear subs and carriers. All of
> their defense concerns are very local and short range. And in that
> regard, they are already well armed. Their shore defense navy is
> formidable, and their air defenses are more than sufficient to make
> any assault on Japan very costly to an agressor. In regards to Guam,
> that base is mostly used to support Taiwan, and has been effectively
> neutralized by recent concessions to China made by the Obama administration.
> Concessions largely induced by the USA's need for Chinese bond purchases,
> btw. Okinawa is a more pertinent example in terms of Japanese security,
> and Japan has been suggesting we leave the island for quite some
> time.
>
> Let's just be honest about what is happending. Japan has been the
> most steadfast supporter of the dollar that one can find. The latest
> announcement is a kindly reminder that the days of dollar (and USA)
> dominance are waning. Japan is preparing for significant changes
> in the near future where they will inevitably begin direct dialogue/agreements
> with China over security and economic issues. No one realistically
> expects the USA to be a major policy player in Asia in the long term.
> Even Australia is swinging to a direct relationship with China with
> little expectation of American participation.
He is one of the only here that I feel has some tanglible factual basis to his opinion on this subject because he lives in Vietnam and, perhaps, has some better understanding of Asia than other Westerners here.
The move to Vietnam by the way I think is a very interesting move.
On Sep 16 01:25 PM WS1835 wrote:
> markfl -
>
> Over the last 2-3 years, Japan's defense establishment has made numerous
> statements regarding the fact that Japan CAN NOT rely on American
> defense guarantees anymore and must pursue its own international
> policy in Asia. America's lack of credibility has recently been
> highlighted by the slow response to China's naval harrassment of
> a US Navy research vessel and then later the complete lack of response
> to N. Korea's missle shot through Japanese air space.
>
> In addition, Japan doesn't need nuclear subs and carriers. All of
> their defense concerns are very local and short range. And in that
> regard, they are already well armed. Their shore defense navy is
> formidable, and their air defenses are more than sufficient to make
> any assault on Japan very costly to an agressor. In regards to Guam,
> that base is mostly used to support Taiwan, and has been effectively
> neutralized by recent concessions to China made by the Obama administration.
> Concessions largely induced by the USA's need for Chinese bond purchases,
> btw. Okinawa is a more pertinent example in terms of Japanese security,
> and Japan has been suggesting we leave the island for quite some
> time.
>
> Let's just be honest about what is happending. Japan has been the
> most steadfast supporter of the dollar that one can find. The latest
> announcement is a kindly reminder that the days of dollar (and USA)
> dominance are waning. Japan is preparing for significant changes
> in the near future where they will inevitably begin direct dialogue/agreements
> with China over security and economic issues. No one realistically
> expects the USA to be a major policy player in Asia in the long term.
> Even Australia is swinging to a direct relationship with China with
> little expectation of American participation.
8-)
In myth, the new world rises out of Chaos. Well Chaos is the world of 1930's and 40's. Depression and world war.
It's not the end of life. It's the end of Order, followed by the rule of Chaos, followed by the beginning of Order.
On Sep 16 02:13 PM imex68 wrote:
> So , is it the end of the world then ?
> 8-)
Currently, the Vietnamese are overbuilding, overbuilding, seemingly unaware of what is going on in the rest of the world. They are funneling ALL their money into houses, houses they hope to rent or sell to foreigners. They can rent a house to a westerner for $2000 a month. They can rent a house to a Vietnamese national for $200 a month. Everywhere I look there are empty house and empty hotels. But they keep right on building. It's a feeding frenzy.
This insanity is truly global.
On Sep 16 01:47 PM Asia Hand wrote:
> I agree and disagree with Mr. Clark's sentiments.
>
> He is one of the only here that I feel has some tanglible factual
> basis to his opinion on this subject because he lives in Vietnam
> and, perhaps, has some better understanding of Asia than other Westerners
> here.
>
> The move to Vietnam by the way I think is a very interesting move.
It's too bad more people don't see that the activities that the agency engages in are extremely hawkish and short sighted, and may sow the seeds of a global war if it's not stopped.
On Sep 16 11:26 AM nova wrote:
> Reading the comments above, I was surprise that Americans genuinely
> think that the world needs America as a policeman.
>
> The reality was that, after the WWII, the USA imposed itself on other
> countries in the same way Soviet did. Using its military presence
> and power, the USA acted as a colonial power in Latin America, Asia,
> Africa as well as bulled its European friends. It acted no different
> than the Soviets in the occupied Eastern Europe.
>
> Well, the Soviet post-WWII empire has collapsed. Presently, the American
> empire is under a severe duress. Iraq and Afghanistan clearly show
> limitations of American military capabilities. American economy is
> on "stimulus steroids". Furthermore, American political elite has
> shown to the world that it is incompetent, near-sighted, unpredictable,
> unreliable, and very selfish.
>
> Consequently, the rest of world is moving forward to post US empire
> geopolitical arrangements.
On Sep 16 01:17 PM Asia Hand wrote:
> paulvard (sic),
>
> The Chinese don't hate America. Where did you ever get that idea?
>
>
> To copy things is natural. It is up to nation/states, courts, governments
> and lawyers to protect copyrights, not the people on the streets.
>
>
> I don't know, sounds like you want war.
>
> For me, I understand the challenges. I maintain an open mind.
On Sep 16 02:41 PM paulvard wrote:
> Have you been in China and listen how those employed by the government
> talks?. Haven't you read their attitude towards Taiwan?
"When the French surrendered Vietnam (without a shot fired...) to the Japanese, Vietnamese intellectuals rejoiced. They embraced the Japanese as liberators. But a funny thing happened on the way to the Liberation. The Japanese turned out to be more inhumane than even the French. Murder, torture and rape were endemic to the Japanese occupation. They cruelest act was the countermanding of Vietnamese rice fields in order to grow jute for the war effort. Millions of Vietnamese starved to death."
Yes, Japanese were NOT too smart. They started a war with the USA instead of joining Hitler in concurring and dismembering Soviets. It is not a surprise they lost the war.
Now, they are facing almost alone their Asian neighbors who remember their crimes and atrocities. The only way for them
- Go nuclear ASAP
- Get friends with Russians (China is emerging as a major threat to both of them)
- Get friend with other Asians who do not like China (Vietnam specifically)
On Sep 16 08:52 AM chap08 wrote:
> I find it surprising that political change in Japan seems to be resulting
> in entrenchment of deflationary policies. Good news though - the
> more mercantilists that let their currency rise, the better.
There will be a wave of devaluation across the whole debt spectrum from homes and CRE to government obligations, including cash. It's easy to say Obama is unreadable, but then what options are available to him - very few, so if you can't understand the plan, maybe there is not one apart from something unimaginable to far too many Americans brought up to believe in the dominance of the American economy and the Dollar.
This is going to change, as it does for all empires. The challenge is to make the adjustment as smoothly as possible, and remember this might not the the end of an empire, but rather a hiatus.
On Sep 16 02:44 PM paulvard wrote:
> To copy things is natural. Wow! What an idiotic stance. What country
> are you from?
On Sep 16 09:16 AM doubleguns wrote:
> Let the rest of the world start taking care of themselves, their
> security and their fears.
>
> Its about time they grow up.
But two sides are fighting, someone is always winning. The question is how we can be that "someone".
Someone up thread mentioned their coastal defenses, conveying the idea that their country is safe from a security threat. The last figure I saw, some time ago, was that their food travels on average about 4,000 miles. They are less than half self-sufficient in food and densely-populated at about 800 people per sq. mi.
Given China's large and growing navy, esp. subs, this would be a classical siege, entirely possible without the US nuclear umbrella.
On Sep 16 01:51 PM Michael Clark wrote:
> You're misunderstanding one thing. Japan has no resources....
Perhaps the world no longer wants our services. In Iraq and Somalia, our soldiers got spat upon and their bodies dragged through the streets. If we must do "nation building" let nation building begin here in our own country.
Give the guy a break. If anything, the end of the Carter administration should be compared to Bush, not Obama. Bush left office with the country in shambles, and Obama has been working to clean the mess up.
It took Reagan more than a year for his policies to show results - we should give Obama at least as much time, given the size of our blunder this time around.
I am an American here in China.
It's a better place to bring up kids here in China than in America.
Look, it is simple, you can't hurt the middle class forever.
Why don't you guy's turn over a new leaf?
On Sep 16 12:39 PM Asia Hand wrote:
> I am an American and I live in China. The hatred of the Japanese
> here is so strong. I would say 30% of the TV shows are about Red
> Army soldiers fighting Japanese Imperialists.
>
> On top of that, last weekend, I had supper with three wonderful Chinese
> female graduate students, one of whom was getting her graduate degree
> in the Japanese language. Although I explained to them that my Grandfather
> faught against the Japanese in World War II and had no bad feelings
> toward them, I could not get one of the ladies to say in Chinese
> that she could forgive the Japanese. Go figure.
>
> I think the Japanese leadership are being naive about the palpable
> sentiments here in North East Asia regarding their legacy.
On Sep 16 01:24 PM Glen88 wrote:
> Hello Japan,
>
> Guess what, in order to run a trade surplus you need a partner that
> is willing to run a trade deficit.
"The party of bigots and religious extremists did not win, and therefore, we're going to hell!"
GOP supporters need to stop inbreeding. It's not good for our genetic pool.
On Sep 16 12:52 PM User 353732 wrote:
> It is not true that the world wants to exclude Americans or deny
> America's inspiring legacy or spurn the American Experiment that
> was solely responsible for preventing a global long night in the
> 20th century.
> It is the US Regime that the world wants to exclude because it is
> the US Regime that degrades the Constitution, sneers at America's
> legacy, mocks the American Experiment and treats ordinary Americans
> with the contempt of an occupier and master.
>
> Is the world's response so incomprehensible given that the effective
> policies of the Regime are :
>
> 1. Take goods and services from the world and in return give them
> unredeemable fiat dollars and virtually no interest on US debt<br/>2.
> Prevent Americans from developing, using and indeed exporting America's
> enormous, high quality and diversified energy resources and tremendous
> energy engineering, financing and operational capabilities
> 3.Generate more investor risk than any other source on the planet
> while confiscating the rewards from work, savings, innovation and
> invention
> 4. Forbid the US military from winning the wars it is ordered to
> fight while appeasing and coddling the sworn enemies of liberty<br/>5.
> Indoctrinate another generation of young people into believing that
> it is nobler to consume, borrow and take than to produce, save and
> give: turn self absorption and instant gratification into the prevailing
> state religion
> 6. Actively promote class warfare by nurturing envy and entitlements
> in the lower class and greed and pillage in the upper class
> In Sept 2009, ordinary Americans may have no choice about submitting
> to the Regime but, if what is published by several writers on SA
> is accurate and the repeated statements of the Chinese, Russians,
> Brazilians and even Indians are credible, the rest of world is busy
> searching for ways to escape.
China is a short-term accounting miracle, but America has far more fertile land per person, and therefore, far less chance of starving its population.
On Sep 16 04:41 PM Asia Hand wrote:
> Hey Paul Vard,
>
> I am an American here in China.
>
> It's a better place to bring up kids here in China than in America.
>
A key passage near the end:
"No one wants the United States to disappear from the scene: No one wants to shoulder the burden of being the world’s policeman-cum-mediator, of providing a global reserve currency, of sending aircraft carriers to put the bad guys in their place. An Australian politician with a longstanding interest in foreign policy was seated next to me at a Melbourne dinner a couple of weeks ago, complaining bitterly that Australia would have to start spending huge amounts on defense to replace the lost presence of the US."
This recognizes a critical factor almost everyone forgets when making economic forecasts - geopolitics. The fact is, it would take Australia - or China, or Japan, or frankly all of Europe for that matter - 20+ years to even begin to APPROACH the United States in pure "projection of power". We forget that it was only in 1980 that transpacific trade rose to equal transatlantic trade for the first time in history. Ten years later, transpacific trade soared to a level 50% higher than transatlantic trade. Those transpacific sea lanes are the economic lifelines of economies relying heavily on exports like China and Japan (in Japan's case, every bit as much as important for the import of goods, in a nation that has a huge, aging populous and very limited natural resources). Why do I mention this in context to this article?
Because the cost of sea lane control is astronomical. The cost of maintaining ONE carrier battle group in the Persian Gulf is a greater outlay than most countries entire defense budgets. Since the end of WWII, the combined weight of all of the world's existing fleets has been insignifigant compared to American naval power.
That highlights the single most important geopolitical and economic fact in the world - the US controls all of the oceans (through both naval and air). No other power in history has been able to accomplish this. I want to repeat that for emphasis - the US controls all of the oceans. It controls all sea lanes, has naval bases all over the world, and any seagoing vessel - commercial or military, from the Persian Gulf to the South China Sea to the Caribbean - can be monitored by the US, Navy, and could watch it, stop it or sink it. Those sea lanes are absolutely everything to Asian export economies - well, they are undoubtedly absolutely vital to every nation on the planet. Its why we just keep printing currency and treasuries - the world doesn't just not want to take on the burden of replacing over one-quarter of global GDP (26% in 2007), or the burden of having to police the world to ensure political and economic stability - it simply cannot. It would take 30+ years minimum to build that type of replacement force, develop the technologies and infrastructure needed to maintain that force, and train hundreds of thousands of professional armed forces in air, land and sea needed to deploy that force.
IMPORTANT NOTE!: I don't write this in the spirit of some wild-eyed Imperialist or delusional arrogant American - I very much believe it would be better both for the world AND for the US if there was a counterforce of any significance to offset American projection of power. I am simply stating fact. And so long as that power remains - 30 years if we turned it off tomorrow, probably the better part of this century if we maintain (most certainly if we continue to increase)...the US economy will be buffeted here, bruised there, and like in the past 18 months see some bubbles burst (trust me, I am not some trader sitting on a pile of cash from the good times, and am not treating this downturn lightly - I have been crunched hard like many, many others) but the demographic troubles in Japan (in this case) ultimately will hurt Japan far more than the US, and the US dollar.
Just my two cents on the next 10-15 years and transpacific relations. As for the rest of the article, dead-on - everyone awaits the Obama Administration to gel and decide what its policies truly are. On every front - health care, the Middle East, an aligned, coherent economic policy, etc - it's not just us here in the US, but the World, who awaits.
And yeah, Reagan was a WHOLE lot more calculating than most folks think. ;)
Great article, great discourse in the comments (with the exception of the usual off-the-wall suspects!)...
• Real Median Household Income in 2008 Fell Below 1973 Level • Income Dispersion Intensified in 2008 • Restricted Income and Credit Expansion Inhibit Economic Growth • Economic Crisis Is Far from Over cormackcapital.wordpre...
This is economic war and America will lose with out a shot fired. Big guns are not needed in todays world.
On Sep 16 01:36 PM Michael Clark wrote:
> I am reminded of what happened in Vietnam during the rise of fascism
> in Japan. The Vietnamese had suffered at the hands of the French
> for a century. The Vietnamese writers and intellectuals almost unanimously
> became friends of Japan. Their logic: Asians would treat other Asians
> better than whites treated Asians. When the French surrendered Vietnam
> (without a shot fired...) to the Japanese, Vietnamese intellectuals
> rejoiced. They embraced the Japanese as liberators. But a funny
> thing happened on the way to the Liberation. The Japanese turned
> out to be more inhumane than even the French. Murder, torture and
> rape were endemic to the Japanese occupation. They cruelest act
> was the countermanding of Vietnamese rice fields in order to grow
> jute for the war effort. Millions of Vietnamese starved to death.
>
>
> This pan-Asian hurrah has been heard before...about the time of the
> last Great Depression in fact. Just before World War broke out.
> Is Alice watching us from the Looking Glass; or are we watching Alice?
On Sep 16 09:18 PM expat in China wrote:
> China has never forgot the years of American sanction against the
> fabricated Red threat from the east.
>
> This is economic war and America will lose with out a shot fired.
> Big guns are not needed in todays world.
The odds Asia will all become a friendly NAFTA like group anytime soon is about 0%. Likewise, to decouple from the US is to plunge their export driven economies into freefall.
If Japan wants the East to not be dependent on the US$ I implore them to look at the SE currency collapse and think again. The reason Asia hoards dollars besides depending on the US to export is that the US$ has been their best source of currency stability. As proof this is still the casde we can look at South Korea which only recently used the US to help stabilize their collapsing currency yet again.
US simply can not be the policeman of the world- it is bankrupt. England, USSR, and the Roman Empire went bankrupt the exact same way - managing military outposts all over the world.
Yes rest of world will have to find an alternative to US leadership and hegemony, there will be growing/transition pains - the will get there. It will be the demise of $ - deflation, chaos of all kind to follow.
Meanwhile Fed and BHO are having a victory party.
1) Stop the automatic purchase of US Treasuries !!!
2) A strong Yen to benefit their people, not just the export conglomerates.
3) An economic alliance with China, which is becoming their main trading partner. You do not have to like your partner, ask any married couple !!!
The Japanese do not have to fear agression from China, ask any woman what is the difference between seduccion and rape = it is salesmanship.
The Chinese are seducing Taiwan which will become in time a special province just like Hong Kong, by becoming their main trading partner and economic supporter, and are doing the same with Japan.
All this regionalism is the result of USA credit bubble bust.
The Chinese and Japanese are not broke like USA banking system and in the exclusive private clubs only the affluent enter...
In any event, however vigorously people want to pontificate on the matter, it is increasingly out of U.S. hands.
The U.S. would do well by pulling their troops out of North East Asia and instead using those resources to develop a more competitive economy rather than continuing to serve as a focal point for derision by following the same old policies that are representative of a bygone era.
The U.S. can do it. It has paramount capabilities. However, it is mired in the muck. It reminds me of a quote a Korean friend once told me when speaking of the relative power of Korea versus China, "The rabbit can turn quicker than the bear." Can and will this bear turn itself around?
I remember the 80s when the Japanese were masters of the Universe and buying up buildings and golf courses here in the U.S. Their management stuff was all the rage. They don't own those buildings and golf courses anymore.
In the 90s I was in Europe from time to time, and, being the entrepreneur that I am, couldn't understand the mentality of the ideal job being a gov't bureaucrat for life. (I'm starting to get an inkling with what's going on here now, and how a good gov't job is very safe, with a good pension.)
Now, China has plenty of issues of its own to face. To say that they have already defeated the U.S. economically is quite premature.
The big difference is that they are stuck with the gov't they have, whereas it is possible for us to change what is going on here right now with our gov't, and from there, our economy. And we have a tremendous ability to be entrepreneurial in this country.
About 1.7 million people just marched on Washington last weekend. The onset of European style socialism is not a done deal, and China has plenty of hurdles of its own. Stay tuned.
On Sep 16 09:18 PM expat in China wrote:
> China has never forgot the years of American sanction against the
> fabricated Red threat from the east.
>
> This is economic war and America will lose with out a shot fired.
> Big guns are not needed in todays world.
I am Canada. And DANG, if only I had comparable military strength I would have front-run the US in "saving the world" from evils, so that my children and grandchildren could reap the economic benefits of a "saved world".
I am Australia. And DANG, if only I had comparable military strength I would have front-run the US in "saving the world" from evils, so that my children and grandchildren could reap the economic benefits of a "saved world".
I am [paste your favorite here]. And DANG, if only I had comparable military strength I would have front-run the US in "saving the world" from evils, so that my children and grandchildren could reap the economic benefits of a "saved world".
On Sep 16 04:17 PM Living4Dividends wrote:
> And really, why should America be the world's policeman ? We saved
> the world from tyranny in WWII, and from communism. The world has
> a short memory.
>
> Perhaps the world no longer wants our services. In Iraq and Somalia,
> our soldiers got spat upon and their bodies dragged through the streets.
> If we must do "nation building" let nation building begin here in
> our own country.
US is no more a super power. It's not in a possition to help any of the allies when they need help or punish the terrorists who killed it's own citizens because:
For the last eight years it has been pumping money to terrorist states as ransom, so no money to show carrot.
It's military is stretched because of a cunning army in pakistan, so no stick.
It lost to islamist propaganda, so it's on defensive to prove it's not against islam by distancing it self from terror victims and it's allies.
Mainstream US media blindly supports the administration even though they know acceding to terrorists will harm the country in the long run.
Administration and media depends on so called terror experts, south asia experts and pakistani experts, even though these experts have no inside knowledge of ISI and depends on CIA and media reports - net result is setback to every action taken to defeat the enemy.
Right now US is helpless, it does not know what to do, it's rich friends are selfish and battle(terror) scared, it's weapons are useless for non-conventional-war
A country will be respected not just by it's strength but by it's actions towards it's enemy and friends..
On Sep 17 03:57 AM Past Tense wrote:
> Why do so many Americans blame Obama for their current predicament?
> Surely it was a combination of idealism at the political level (wars
> in Iraq etc, fighting for freedom? which is kind of counter intuitive
> to me) and reckless behaviour by individuals by spending too much
> and getting into debt. Funny people Americans, they blame their government
> but they vote them in, they max out their mortgage, and then grumble
> when their currency collapses. Perhaps you should do a bit of soul
> searching and then let Obama spend a trillion or 2 on health care
> instead of war and see how the world feels about you then... I like
> America, and the Americans I've met, but please accept responsibility
> for your OWN problems.
The business philosophy of these two countries is based upon that of Sun Tsu.
That's not a problem when they trade with the US. But when they trade with each other?
Welcome to interesting times....
I think you are right about the knee-jerk 'the government did it' attitude of Americans. The Democrats scream at the Republican governments; the Republicans scream at the Democratic governments. You are right, we should be taking responsibility for our choices, our mistakes, our indulgences. Taking on massive debt is an indulgence that is sinking us. And Obama's administration is going along with the bankers thinking that what we need is more debt -- aren't we fat enough. It's time to get lean, austere, and responsible. It's time to send Helicopter Ben into mothballs and stop treating a solvency crisis like it was a liquidity crisis.
On Sep 17 03:57 AM Past Tense wrote:
> Why do so many Americans blame Obama for their current predicament?
> Surely it was a combination of idealism at the political level (wars
> in Iraq etc, fighting for freedom? which is kind of counter intuitive
> to me) and reckless behaviour by individuals by spending too much
> and getting into debt. Funny people Americans, they blame their government
> but they vote them in, they max out their mortgage, and then grumble
> when their currency collapses. Perhaps you should do a bit of soul
> searching and then let Obama spend a trillion or 2 on health care
> instead of war and see how the world feels about you then... I like
> America, and the Americans I've met, but please accept responsibility
> for your OWN problems.
I know the people in Vietnam, today, blame the Japanese for the mass starvation, not the French.
On Sep 16 09:23 PM bertong wrote:
> Both the French AND the Japanese are to be blamed for the Vietnamese
> starvation
Thanks for opening up my mind to the wider geopolitical consequences of an American withdrawal.
I sometimes think that the citizen of the world undervalues the US contribution.
You have mentioned defence, but this also applies to health care. I often tell my collegues (I live in Europe) that they benefit from the health system in the US, via funding of research and development that would never take place in other, more restricted, health care systems. This is particularly true for the UK and Switzerland, whose pharmaceuticals companies could not afford to develop so many new drugs were it not for the lucrative US market.
Thanks to Mr. Goldman for posting an article that has sparked a new round of interest on an incredibly timely topic.
I doubt that is going to be the case!
On Sep 16 03:33 PM dhansen548 wrote:
> Couldn't agree more, doubleguns---I think you're right on the money.
> America can benefit too by staying home and taking care of its own
> problems and its own people, instead of trying to create its own
> empire.
On Sep 16 04:17 PM Living4Dividends wrote:
> And really, why should America be the world's policeman ? We saved
> the world from tyranny in WWII, and from communism. The world has
> a short memory.
>
> Perhaps the world no longer wants our services. In Iraq and Somalia,
> our soldiers got spat upon and their bodies dragged through the streets.
> If we must do "nation building" let nation building begin here in
> our own country.
On Sep 17 05:49 AM Edvard wrote:
> Michael
>
> Thanks for opening up my mind to the wider geopolitical consequences
> of an American withdrawal.
>
> I sometimes think that the citizen of the world undervalues the US
> contribution.
>
> You have mentioned defence, but this also applies to health care.
> I often tell my collegues (I live in Europe) that they benefit from
> the health system in the US, via funding of research and development
> that would never take place in other, more restricted, health care
> systems. This is particularly true for the UK and Switzerland, whose
> pharmaceuticals companies could not afford to develop so many new
> drugs were it not for the lucrative US market.
>
>
The Japanese are ignorant to believe that China will play 'nice' with it.
Mr Goldman obviously does not like the current administration and that is fine, but he is at least pointing out the fallacy of unsustainable debt to support a military/industrial complex that has become one of our countries largest expenditures as Eisenhower warned . England tried Imperialism, it does not work. In a global world we empower our competitors if they do not spend to protect themselves and we borrow to protect them for free.
On Sep 16 12:52 PM Thomas J. Gordon wrote:
> Excellent and interesting comments. Giving up the dollar's reserve
> currency status is criminal. I think the u.s. got a lot of benefit
> being the words' reserve currency. And all it takes to keep it is
> a little discipline to keep it. In terms of a long 3 years, if we
> want Obama out we need some new bad things to happen that people
> associate with borrowing tons of money you don't have. Like higher
> gas prices, higher interest rates, general inflation that people
> notice. So Obama and Geithner are two of the luckier guys you will
> ever meet. They are spending money like drunken sailors and there
> are no bad effects.
On Sep 16 11:26 AM nova wrote:
> Reading the comments above, I was surprise that Americans genuinely
> think that the world needs America as a policeman.
>
> The reality was that, after the WWII, the USA imposed itself on other
> countries in the same way Soviet did. Using its military presence
> and power, the USA acted as a colonial power in Latin America, Asia,
> Africa as well as bulled its European friends. It acted no different
> than the Soviets in the occupied Eastern Europe.
>
> Well, the Soviet post-WWII empire has collapsed. Presently, the American
> empire is under a severe duress. Iraq and Afghanistan clearly show
> limitations of American military capabilities. American economy is
> on "stimulus steroids". Furthermore, American political elite has
> shown to the world that it is incompetent, near-sighted, unpredictable,
> unreliable, and very selfish.
>
> Consequently, the rest of world is moving forward to post US empire
> geopolitical arrangements.
On Sep 16 07:13 PM Troy Jensen wrote:
the US controls all of the oceans (through both naval and air). No other power in history has been able to accomplish this. I want to repeat that for emphasis - the US controls all of the oceans. It controls all sea lanes, has naval bases all over the world, and any seagoing vessel - commercial or military, from the Persian Gulf to the South China Sea to the Caribbean - can be monitored by the US, Navy, and could watch it, stop it or sink it. Those sea lanes are absolutely everything to Asian export economies - well, they are undoubtedly absolutely vital to every nation on the planet.
=======================
Agreed and that is why a "world war" might be a much higher risk if the U.S. has a collapse of its government.
But, remember, other empires in history had very powerful military force that kept order in the world of their time. That doesn't stop them from collapse.
The U.S. will collapse at some point. Whether that is a few months or years, the private sector can no longer support the government.
market-ticker.denninge...
=======
That is a good article that Karl Dinninger did as a follow-up to his warning he had yesterday on the unsustainable course we are on. It provides some projections that shows how the private sector can never catch up with the debt we are growing and even interest on debt is going to be so high that we won't be able to pay it and keep spending on even basic services.
The Japanese Prime Minister ran on a plank in his platform of diversifying away from the dollar and it helped him win. Whether it makes "sense" or not to leave the dollar, nation after nation is making new trade deals to do just that. Even Brazil and Argentina have agreed to stop using dollars in trade between them and both have agreed to stop using dollars in trade with China.
At some time, a tipping point is reached and somebody panics and sells a little too many dollars or our debt and the dominoes start tumbling. We have gone so far that our government is no longer in control of what happens to the dollar. It is the nations that have the trillions of our debt and dollars and are getting rid of them, that will determine its fate.
The emerging markets are the new economic power and more and more, the U.S. consumer is fading from the scene as a power. There are now 2 billion middle class consumers and many of them became that in just the last 10 years. They are growing by the 10's of millions each year. Even though they save much more than we and spend less, they have the numbers that even if it takes 3 or 4 of them to equal one U.S. consumer, they have those numbers.
The U.S. could reach a point where, due to the collapse of the dollar, the military can't be paid. At that point, I look for it to be turned over to NATO or the U.N. or some other international organization where it would be "the policeman of the world," and we would keep only what is needed to defend our shores. Only a collapse would cause something that drastic, but we are going to have a collapse at some point.
Our private sector has to at some point, be able to rebuild the nation's governments, (city, county, state and federal) from the ground up if it is ever to be able to pay for government and the services we want from it.
We were not supposed to have a crisis in entitlement shortfalls until 2015-17 and yet, it is here now and we are borrowing from foreign nations already to buy the bonds in the trust funds back. We have to do that so that they can make the payments to Medicare/Medicaid providers and Social Security beneficiaries.
Japan knows this as does China and all the rest of the nations. That is why they are moving out of dollars as fast as they can without collapsing the dollar. But, remember, it is what we did for the last 70 years that brought this on.
We are our own worst enemy.
On Sep 16 01:36 PM Michael Clark wrote:
> I am reminded of what happened in Vietnam during the rise of fascism
> in Japan. The Vietnamese had suffered at the hands of the French
> for a century. The Vietnamese writers and intellectuals almost unanimously
> became friends of Japan. Their logic: Asians would treat other Asians
> better than whites treated Asians. When the French surrendered Vietnam
> (without a shot fired...) to the Japanese, Vietnamese intellectuals
> rejoiced. They embraced the Japanese as liberators. But a funny
> thing happened on the way to the Liberation. The Japanese turned
> out to be more inhumane than even the French. Murder, torture and
> rape were endemic to the Japanese occupation. They cruelest act
> was the countermanding of Vietnamese rice fields in order to grow
> jute for the war effort. Millions of Vietnamese starved to death.
>
>
> This pan-Asian hurrah has been heard before...about the time of the
> last Great Depression in fact. Just before World War broke out.
> Is Alice watching us from the Looking Glass; or are we watching Alice?
On Sep 16 02:52 PM nova wrote:
> Michael Clark wrote:
> "When the French surrendered Vietnam (without a shot fired...) to
> the Japanese, Vietnamese intellectuals rejoiced. They embraced the
> Japanese as liberators. But a funny thing happened on the way to
> the Liberation. The Japanese turned out to be more inhumane than
> even the French. Murder, torture and rape were endemic to the Japanese
> occupation. They cruelest act was the countermanding of Vietnamese
> rice fields in order to grow jute for the war effort. Millions of
> Vietnamese starved to death."
>
> Yes, Japanese were NOT too smart. They started a war with the USA
> instead of joining Hitler in concurring and dismembering Soviets.
> It is not a surprise they lost the war.
>
> Now, they are facing almost alone their Asian neighbors who remember
> their crimes and atrocities. The only way for them
> - Go nuclear ASAP
> - Get friends with Russians (China is emerging as a major threat
> to both of them)
> - Get friend with other Asians who do not like China (Vietnam specifically)
On Sep 16 09:16 AM doubleguns wrote:
> Let the rest of the world start taking care of themselves, their
> security and their fears.
>
> Its about time they grow up.
In spite of its overwhelming military superiority, the US is losing ground because it engages in warfare, and tries to use force to solve political problems. Like all empires it is failing because the cost of maintaining it, far outweighs the economic benefits. The truly sad thing is to see military adventures continue... these are the main cause of the bankruptcy of the US.... but the band plays on.
For most of Japan's history, they actually existed in China's co-prosperity sphere. The Japanese then were more than happy to grovel in the Chinese emperor's presence in exchange for trade access which benefitted Japan.
Even historically speaking, recent memory isn't the only time the Chinese have been angry with the Japanese. Towards the late Ming dynasty, Japanese pirates ravaged China's coasts and a bitter war in Korea was fought between Ming Chinese/Korean forces on one side and Japanese forces on the other.
However, the final Shogunate under Tokugawa Ieyasu was able to bury the hatchet by apologizing and groveling before the Chinese and all was forgiven and trade ties restored.
Should the US fall or become problematic, we will see the revision to the historical order. The Japanese of today will finally grovel before the Chinese and profusely apologize for WWII and the Chinese will magnaminously forgive them; then business as usual (from a historical standpoint) will proceed. Taiwan will probably change sides and rejoin China.
The US is still important though possibly fading. From a historical standpoint, this period of American greatness is merely a pimple on history's behind. China has been the world's greatest nation, on average, for most of civilized human history. It was also th world's greatest manufacturing nation as well.
What we are seeing today is a gradual reversion to historical norms. The last 100 years that most of the readers here are anchoring their perceptions on is really a rather extraordinary period, not a normal one.
Totally agree with your sentiments.
The U.S. leadership could take a very good lesson from my brilliant friend Mr. Lao Tzu who lived in the 6th century BC,
"Water is fluid, soft, and yielding. But water will wear away rock, which is rigid and cannot yield. As a rule, whatever is fluid, soft, and yielding will overcome whatever is rigid and hard. This is another paradox: what is soft is strong."
On Sep 16 08:36 AM markfl wrote:
> The US isn't going anywhere. How nice of Japan to invite us to come
> out and play. They can attempt to exclude all they'd like. Let them
> have a stroke next time the N. Koreans test missiles near their back
> porch. They can build their own ABM system, theater ballistic misslies,
> nuclear subs, and aircraft carrier battle groups. At the same time,
> they can do without any of ours or our implicit nuclear shield and
> defense posture in Guam.
>
> Let them spend their own new reserve currency on defense and we can
> lower our DOD budget by $100 billion. Ditto the RPK, Israel, India,
> and Pakistan. They can build and buy their own fighter jets, fight
> domestic terrorism, and control international maritime piracy. America
> is broke and Americans are hungry and unemployed. Many are tired
> of paying the bill of global military power projection.
The EU is not very happy about this, because the Berlin-Moscow axis is going to threaten their influence and they could loose the guy who pays the bills so far.
I am not in favor of this, but it is going to happen and the US-Administration already noticed it and probably won't push the missile shield in Eastern Europe in order to avoid further outrage.
On Sep 16 01:46 PM Michael Clark wrote:
> We are going to see the passing of the Pax Americana. The One World
> (or Two Worlds, as it was with the Communist/Capitalist duality)
> with America as policeman is passing. Asia will re-arm; this includes
> Japan and South Korea. Europe will have to re-arm as well. The European
> Union will show its real colors when this begins. Are Italians going
> to fight for Germans? Are Irish going to fight for Spanish or French?
> Not very likely. National boundaries are coming back. With the passing
> of the Pax Americana, the world will become a more volatile place.
> China hates Japan; Korea also hates Japan. Japan fears China. Japan
> fears Russia. Germany fears Russia. France fears Germany....wait
> till those greedy Wall Street bankers see what they've loosed upon
> the world.
On Sep 17 01:47 AM MDS wrote:
> The Japanese just throw out a party that was closely allied to USA
> since WW II. The new party is for:
>
> 1) Stop the automatic purchase of US Treasuries !!!
> 2) A strong Yen to benefit their people, not just the export conglomerates.
>
> 3) An economic alliance with China, which is becoming their main
> trading partner. You do not have to like your partner, ask any married
> couple !!!
>
> The Japanese do not have to fear agression from China, ask any woman
> what is the difference between seduccion and rape = it is salesmanship.
>
>
> The Chinese are seducing Taiwan which will become in time a special
> province just like Hong Kong, by becoming their main trading partner
> and economic supporter, and are doing the same with Japan.
>
> All this regionalism is the result of USA credit bubble bust.
> The Chinese and Japanese are not broke like USA banking system and
> in the exclusive private clubs only the affluent enter...
They are going to get more than they thought they bargained for, that's for sure.
Look at the historical precedent.
Unfortunately, it is the right time to let the situation let loose and let things unfold.
Last time things did not work for them, with big losses for all. Let those schmucks try the same thing again this time.
On Sep 16 02:39 PM mna wrote:
> Exactly right, America didn't "police" the world for humanitarian
> purposes, we did it for our personal political and economic gain.
> America lost its credibility as a humanitarian when the CIA was created.
> Now the CIA and its front organization, the misnamed "National Endowment
> for Democracy" are planting the seeds for more global turmoil. This
> in turn, sets up the political scene so that our military can intervene
> in other nations for our economic gain. Knowing this, is it any
> wonder why so many people around the world hates us?
>
> It's too bad more people don't see that the activities that the agency
> engages in are extremely hawkish and short sighted, and may sow the
> seeds of a global war if it's not stopped.
Thanks for the update. I was speaking more in a historical sense. I remember Spengler's book 'Decline of the West' presenting Russia as the barbarian state destined to take over Western Europe, with Germany being the state in between Russia and Western Europe. I think Hitler's obsession with Russia was similar to Spengler's. Hitler wanted to mortally wound the barbarian state so they would not be able to threaten Germany.
Clearly current German thinking is to prepare for the world after America leaves Europe. Friendship with Russia and Russia's oil fields makes a lot of sense for the Germans.
Is the Franco-German alliance (counterbalance to America) breaking down at all?
On Sep 17 11:26 AM petra wrote:
> Michael, I agree with you, only one thing, Germany does't fear Russia.
> On the contrary the relationship get's better and better. Former
> Chancellor Schroeder is a great buddy of Putin and is now on the
> board of Gazprom, Chancellor Merkel was born and raised in East-Germany
> and has excellent relations to Russia, as well as most politicians.
> Furthermore the former communism party is getting stronger and clearly
> will help to build a even better relationship. The new pipeline between
> Russia and Germany will make Germany independent from foreign oil
> and gas and German companies are investing more in Russia than anywhere
> else and Russians are buying in Germany hand over fist, like Opel.
>
> The EU is not very happy about this, because the Berlin-Moscow axis
> is going to threaten their influence and they could loose the guy
> who pays the bills so far.
> I am not in favor of this, but it is going to happen and the US-Administration
> already noticed it and probably won't push the missile shield in
> Eastern Europe in order to avoid further outrage.
I love Lao Tse. But he was a monk and described the monk's path. I follow his path, personally.
Confucius was the political man, the prophet of worldly ambition and leadership.
The always seems to be a Mister Outside, and Mister Inside. Aristotle and Plato. Confucius and Lao Tse. Freud and Jung. One is the Male; the other is the (soft, pliable, eternal) Female.
On Sep 17 11:21 AM Asia Hand wrote:
> Broxburnboy,
>
> Totally agree with your sentiments.
>
> The U.S. leadership could take a very good lesson from my brilliant
> friend Mr. Lao Tzu who lived in the 6th century BC,
>
> "Water is fluid, soft, and yielding. But water will wear away rock,
> which is rigid and cannot yield. As a rule, whatever is fluid, soft,
> and yielding will overcome whatever is rigid and hard. This is another
> paradox: what is soft is strong."
I love Lao Tse. But he was a monk and described the monk's path.
Confucius was the political man, the prophet of worldly ambition and leadership.
The always seems to be a Mister Outside, and Mister Inside. Aristotle and Plato. Confucius and Lao Tse. Freud and Jung. One is the Male; the other is the (soft, pliable, eternal) Female.
On Sep 17 11:21 AM Asia Hand wrote:
> Broxburnboy,
>
> Totally agree with your sentiments.
>
> The U.S. leadership could take a very good lesson from my brilliant
> friend Mr. Lao Tzu who lived in the 6th century BC,
>
> "Water is fluid, soft, and yielding. But water will wear away rock,
> which is rigid and cannot yield. As a rule, whatever is fluid, soft,
> and yielding will overcome whatever is rigid and hard. This is another
> paradox: what is soft is strong."
A lot of Vietnamese in the south still have a very strong allegiance to Americans, even though they feel we betrayed them in the final analysis.
On Sep 17 10:33 AM americanincanada wrote:
> Yes the Japanese abused the Vietnamese. But once they were thrown
> out of Vietnam the French were not welcomed back with open arms and
> over a million Vietnamese died trying to keep the US from taking
> over. So any analysis of how people behave has to be more subtle
> and deep.
Many will argue that the banksters are fully aware what they have unloosed upon the world. Many will argue that they have done so because being arms dealers either directly or indirectly is extremely profitable. Even more profitable than fractional banking and charging 30% interest is.
Either way one cuts it, the next few years are going to be cataclysmic for the 95% of the planet that isn't Duhmerican't and especially so for the 5% that is.
On Sep 16 01:46 PM Michael Clark wrote:
> We are going to see the passing of the Pax Americana.
>
>
>With the passing of the Pax Americana, the world will become a more
> volatile place......wait till those greedy Wall Street bankers see what
> they've loosed upon the world.
> Giving up the dollar's reserve currency status is criminal. <
In all due respect, since when should the world be expected to continue to use a currency as the world's "reserve currency" when that priviledge is being so violated and the currency itself debased on a heretofore unimaginable scale by the FED and its puppet US Congress? Criminal? I'll tell you what's criminal... it's the legalized theft of most of the world's wealth in the form of a little thing called "inflation". Inflation that is caused by the creation of dollars out of thin air on such a scale that the bastards don't even have the cojones to tell us the truth about how much of this worthless (and getting more worthless with each passing day) fiat they've actually created.
What have the Irainians done to upset you? Or do you want to "obliterate" them too? Let me guess....an ethical nation upset at the local genocide ongoing for 70 years...hmmm..sounds like target to nuke to me!
> Oooo! I got a name for this! How about "Greater East Asia Co-Prosperity
> Sphere"?
Passive defense can only help so much.
On Sep 16 04:17 PM Living4Dividends wrote:
> And really, why should America be the world's policeman ? We saved
> the world from tyranny in WWII, and from communism. The world has
> a short memory.
>
> Perhaps the world no longer wants our services. In Iraq and Somalia,
> our soldiers got spat upon and their bodies dragged through the streets.
> If we must do "nation building" let nation building begin here in
> our own country.
I agree , but speaking of history think about the great relationship in the Bismarck-era and when Prussia was at their peak.
Anyway, as for the Franco-German alliance, it is more an alliance between the 3, a Paris-Berlin-Moscow-Axis so to speak, but with France as the weakest partner and they don't like that at all.
That is why they are so friendly with the US and UK right now, but that is not going to last.
On Sep 17 01:26 PM Michael Clark wrote:
> Petra:
>
> Thanks for the update. I was speaking more in a historical sense.
> I remember Spengler's book 'Decline of the West' presenting Russia
> as the barbarian state destined to take over Western Europe, with
> Germany being the state in between Russia and Western Europe. I think
> Hitler's obsession with Russia was similar to Spengler's. Hitler
> wanted to mortally wound the barbarian state so they would not be
> able to threaten Germany.
>
> Clearly current German thinking is to prepare for the world after
> America leaves Europe. Friendship with Russia and Russia's oil fields
> makes a lot of sense for the Germans.
>
> Is the Franco-German alliance (counterbalance to America) breaking
> down at all?
> Said another way, they must apologize for their legacy to those people
> that they previously disgraced.
I earn in yen. I appreciate the appreciation against the USD, but I was here when it hit ¥88. It'll fall again: massive national debt, overpriced yen, a new government promoting 0bamunism/Bushism tax cuts and increased spending, horrid demographics, few resources (other than water).
Anyone who has lived in Japan knows that few members of the young generation some here expect to invade Asia will do so. The JSDF is a dirty word in many places. Plenty of elderly are still around to denounce war and remind descendants of the postwar hardships, and the Japanese version of Western flower children dominate positions of power and impotence (academia).
On Sep 17 05:14 PM grey road wrote:
> What is happening here is predictable. Japan and China and Russia
> have agreed they are going to stick together on pulling the plug
> on the dollar and treasuries. Japan knows they stand a much better
> chance of having decent prosperity by having closer ties to China
> rather than America. This is why the Chinese have been stockpiling
> gold and have been making the statements they have as well as Russia.
> Japan will be poor cousin no matter what. But America will have to
> take its cleansing. Much like after America dropped the nuclear bomb
> to end the war, than helped Japan after to get to where they were
> in the the 80's , the Chinese will drop the financial nuclear bomb
> than help America be something again. But America will be what China
> wants it to be. This is inevitable, has been talked about for years
> but never taken terribly seriously.The time has come though.
What do you think they've been doing, by way of purchasing our real estate, companies, stocks and contributing political campaigns in one form or another? They're doings it. They're creating it through our backdoor.
On Sep 16 08:36 AM markfl wrote:
> The US isn't going anywhere. How nice of Japan to invite us to come
> out and play. They can attempt to exclude all they'd like. Let them
> have a stroke next time the N. Koreans test missiles near their back
> porch. They can build their own ABM system, theater ballistic misslies,
> nuclear subs, and aircraft carrier battle groups. At the same time,
> they can do without any of ours or our implicit nuclear shield and
> defense posture in Guam.
>
> Let them spend their own new reserve currency on defense and we can
> lower our DOD budget by $100 billion. Ditto the RPK, Israel, India,
> and Pakistan. They can build and buy their own fighter jets, fight
> domestic terrorism, and control international maritime piracy. America
> is broke and Americans are hungry and unemployed. Many are tired
> of paying the bill of global military power projection.
The King of the Hill has no soul. The King of the Hill develops soul when he is thrown off the hill and discovers that there is life after kingship.
On Sep 16 03:38 PM Mayer Amschel Rothschild wrote:
> As terrible as the next decade will be in America, as long as we
> don't have a civil war and our currency does not become *literally*
> worthless, I think we'll be fine after that. It's crime two or three
> years from now when unemployment reaches its peak that I'm most concerned
> with.
Actually America has many sins, but mooching is not one of them. Oppressing, being know-it-alls, manipulating with power...but the world mooches more off America than America mooches off the world.
On Sep 17 02:20 PM Tony Daltorio wrote:
> Japan is just waking up to realize what much of the rest of the world
> has already realized -- America is like a pain in the ass buddy,
> always mooching. Eventually you get tied of someone always hitting
> you up for more money.
MJC
On Sep 17 11:03 PM petra wrote:
> Michael:
> I agree , but speaking of history think about the great relationship
> in the Bismarck-era and when Prussia was at their peak.
> Anyway, as for the Franco-German alliance, it is more an alliance
> between the 3, a Paris-Berlin-Moscow-Axis so to speak, but with France
> as the weakest partner and they don't like that at all.
> That is why they are so friendly with the US and UK right now, but
> that is not going to last.
On Sep 18 02:09 PM Michael Clark wrote:
> America mooching off of Japan. I don't think so. Try again.
>
> Actually America has many sins, but mooching is not one of them.
> Oppressing, being know-it-alls, manipulating with power...but the
> world mooches more off America than America mooches off the world.
>
In regards to the base issue this no doubt will be a tough sell. There is still fear among many in the West that a complete withdrawal from Japan, considered a vital national security interest could threaten to destabilize the entire region. A US withdrawal would mean Japan would likely have to re-militarize. This likely would not go over well with China or anyone else in the region for that matter. It would directly change Japan's status as a military power and therefore would also make them a target for terrorists. This is something Japan doesn't need right now and would only further destabilize the economy. Something tells me we didn't do enough after World War II to help to change Japanese view towards it's neighbors and the world. They are just as much a danger now as they have ever been. Now with Japan leaning toward communism it is only going to get worse. I guess I should have expect this all along but it is sad really as I like the Japanese people but not their phony government which keeps feeding lies to the media and it's people. If Japan thinks it is going to get all cozy with China think again. China has never liked Japan and there is still plenty of animosity towards them. They might not like it but the US is the best friend they got. Let's see how long they last out on their own.
On Sep 19 03:35 AM AlphaForce wrote:
> Oh hell like this is a surprise. The Japanese hate the world anyways
> as they are the center of the universe. They don't want to exclude
> us. Who the hell do they think they are talking to. What arrogance
> on their part. Does Japan really think it is in any position to be
> threatening us on anything. Less reliance on US just means more reliance
> on someone else. This all comes back full circle in the end anyways.
> I say we pull out of Japan and watch their economy crash and burn.
> Then we will see who has the last laugh. I have to say though now
> at least that are getting some balls but it will backfire on them
> no doubt. Not to mention threaten our alliance which was always a
> bit shaky to begin with. I say pull out the bases and have them re-militarise
> and have the Chinese and Koreans breathing down their throats. Less
> dependence on US just means more dependence on someone else. Which
> in turn all comes back full circle anyways. The US Japan trade has
> always been one sided which hasn't helped the situation any. Not
> to mention being so anti-foreigner doesn't help matters any. Tourism
> I feel could be huge in Japan but at current is even below some third
> world countries lol. Although they won't change anytime soon as it
> is everyone else's fault for their own problems of coarse. .
>
> In regards to the base issue this no doubt will be a tough sell.
> There is still fear among many in the West that a complete withdrawal
> from Japan, considered a vital national security interest could threaten
> to destabilize the entire region. A US withdrawal would mean Japan
> would likely have to re-militarize. This likely would not go over
> well with China or anyone else in the region for that matter. It
> would directly change Japan's status as a military power and therefore
> would also make them a target for terrorists. This is something Japan
> doesn't need right now and would only further destabilize the economy.
> Something tells me we didn't do enough after World War II to help
> to change Japanese view towards it's neighbors and the world. They
> are just as much a danger now as they have ever been. Now with Japan
> leaning toward communism it is only going to get worse. I guess I
> should have expect this all along but it is sad really as I like
> the Japanese people but not their phony government which keeps feeding
> lies to the media and it's people. If Japan thinks it is going to
> get all cozy with China think again. China has never liked Japan
> and there is still plenty of animosity towards them. They might not
> like it but the US is the best friend they got. Let's see how long
> they last out on their own.
Really nice to hear from you. Thanks for the positive feedback!
Umm, its you're as in you are NOT your as in your jacket.
Oh, and hey, as you're oh so much more intellectual, social, educated, literate and sensible as is evidenced by your ad hominum attack kindly grace us with words of wisdom that we can take to heart and live by!
Have a great day!
On Sep 20 02:50 PM NickelMan wrote:
> I read your profile and you state your "Anti Fuck You Capitalist
> blah blah,....."
> Well your actually:
>
> Anti-Intellect
> Anti-Social
> Anti-Education
> Anti-Literate
> Anti-Sensible
> Anti-Sober
>
> Your basically for all practical purposes a morbid moron!
>
> Another topic, I think the norm is people that are severely mentally
> handicap are happier, what happen to you!
>
> Nick KrahS
>
>
>
>
>
Japan is on the right track. It needs to get the US, england, euro out of it's hair or it'll stay in recession forever. You better wake up and learn what is going on in the world before it becomes one giant stupid replay of Bender's Big Score and owned entirely by the people from the Scammer Planet.
In Japanese media, it is rumored Reuters article which also cut & pasted by New York Times before the election was possibly influenced by his opponent party. You can judge by yourself, but I feel a little scared seeing wehre this mushroomed discussion began with.
Monthly journal “Voice” September Issue
Aug 10th, 2009
“My Political Philosophy”
Yukio Hatoyama
The Banner of Party Politician Ichiro Hatoyama
Among Japanese people today, "ai" is a particularly popular word which is usually translated as ‘love’. Therefore, when I speak of "yuai", which is written with the characters for ‘friendship’ and ‘love’, many people seem to picture a concept that is soft and weak. However, when I speak of yuai, I am referring to a concept that is actually rather different. What I am referring to is fraternity, as in liberté, égalité, fraternité, the slogan of the French Revolution. When my grandfather Ichiro Hatoyama translated one of the works of Count Richard Coudenhove-Kalergi into Japanese, he rendered the word fraternity as "yuai" rather than the existing translation of "hakuai". Therefore, when I refer to yuai, I am not referring to something tender but rather to a strong, combative concept that was a banner of revolution. 85 years ago, in 1923, Count Coudenhove-Kalergi published his work Pan-Europa, starting off the Pan-Europa Movement which eventually led to the formation of the European Union. Count Coudenhove-Kalergi was the son of an Austrian noble, who was posted to Japan as his country's minister, and Mitsuko Aoyama, the daughter of an antiques dealer from Azabu, Tokyo. One of the count’s middle names was the Japanese name Eijiro.
In 1935, Count Coudenhove-Kalergi published The Totalitarian State against Man. The work includes severe criticisms of Soviet communism and Nazism as well as the reflections on the self-indulgence of capitalism in leaving such ideologies to flourish. Coudenhove-Kalergi believed that freedom forms the foundation of human dignity and that it is therefore unsurpassed in value. In order to guarantee freedom, he advocated a system of private ownership. However, he was despondent at how the severe social inequalities produced by capitalism had helped give rise to communism by creating an environment in which people aspired to equality, and also at how this had resulted in the emergence of national socialism as an alternative to both capitalism and communism. "Freedom without fraternity leads to anarchy. Equality without fraternity leads to tyranny"(Translation of the quote in Japanese). Coudenhove-Kalergi discussed how both totalitarianism, which tried to achieve equality at all costs, and capitalism, which had fallen into self-indulgence, resulted in disregard for human dignity and as such resulted in the treatment of human beings as a means instead of an end. Although freedom and a quality are important for human beings, if they are followed to fundamentalist extremes, they can both result in immeasurable horrors. Therefore, Coudenhove-Kalergi recognized the necessity of a concept that could achieve a balance and maintain respect for humanity. That is what he sought in the idea of fraternity.
"Man is an end and not a means. The state is a means and not an end". These are the first lines of The Totalitarian State against Man. At the time Coudenhove-Kalergi was putting ideas together for this publication, two different forms of totalitarianism were prominent in Europe, and his home country of Austria was being threatened with annexation by Hitler's Germany. Coudenhove-Kalergi traveled all around Europe advocating the cause of Pan-Europeanism and criticizing Hitler and Stalin. However, his efforts were in vain. Austria fell to the Nazis and Coudenhove-Kalergi was forced to flee in disappointed exile to the United States. The movie Casablanca is said to be based on his flight. When Coudenhove-Kalergi talks of a "fraternal revolution", he is referring to the combative philosophy that supported the fierce fight against both the left-wing and right-wing totalitarianism of that age. After the war, Ichiro Hatoyama, who was exiled from public office just as he was on the point of becoming Prime Minister, read the works of Count Coudenhove-Kalergi as he was living his enforced life of leisure. He was so struck by The Totalitarian State against Man that he took it upon himself to translate it into Japanese. His translation was published under the title Jiyu to Jinsei (Freedom and Life).
For Ichiro, who was an ardent critic of both communism and military led planned economies, The Totalitarian State against Man seemed to provide the most appropriate theoretical system for fighting back against the popularity of Marxism that began to swell in post-war Japan (the Socialist party, Communist party and labor movements) and for building a healthy parliamentary democracy. While fighting against the growing influence of the socialist and communist parties, Ichiro Hatoyama used word yuai (fraternity) as a banner in trying to bring down the bureaucrat-led government of Shigeru Yoshida and replace it with his own administration of party politicians. This was expressed succinctly by Hatoyama in the Yuai Seinen Doshikai Kouryo (Young People’s Fraternal Association Mission Statement), which Ichiro Hatoyama wrote in 1953. "Under the banner of liberalism, we will devote ourselves to a Fraternal Revolution, avoid extreme left wing and right wing ideologies, and work steadfastly to achieve a healthy and vibrant democratic society and build a free and independent cultural nation."
Ichiro Hatoyama's concept of fraternity continued to have influence as an undercurrent within Japan's post-war conservative political parties. Following the revision of the Japan-US security treaty in 1960, the Liberal Democratic Party changed direction significantly and began to prioritize policies of management-labor conciliation. These policies formed the foundation for Japan's period of rapid economic growth and are best symbolized by the LDP Basic Charter, a 1965 document which was written to serve as a kind of mission statement. The first chapter of this charter, which is entitled "Human Dignity", states, " human lives are precious, and are an end in and of themselves. The lives of human beings must never become a means". A similar phrase can be found in the LDP Labor Charter, a document which called for reconciliation with the labor movement. These phrases are clearly borrowed from the work of Coudenhove-Kalergi, and were very likely influenced by Ichiro Hatoyama's thinking on the subject of fraternity. These two charters contributed to the establishment of the Hatoyama and Ishibashi cabinets, and were both drafted by Hirohide Ishida, a politician who served as Labor minister in the Ikeda Cabinet and was responsible for setting Japan on a course towards conciliatory labor-management policies.
The End of LDP One-Party Rule and the Announcement of the Democratic Party of Japan
In the Post-War Period, the LDP confronted socialist forces inside and outside Japan and dedicated itself to Japan's reconstruction and the achievement of high economic growth. These were noteworthy achievements which deserve their place in history. However, even after the end of the Cold War, the LDP fell into the trap of "the politics of inertia", and continued to act as if economic growth in itself was Japan's national goal. The party continually failed to adapt to the changing contemporary environment and shift towards policies designed to qualitatively improve people's lives. At the same time, unhealthy ties between politicians, bureaucrats and corporations continually led to political corruption, a long-standing illness of the LDP. When the Cold War came to an end, I strongly felt that the historical role the LDP had played in supporting Japan's rapid economic growth had come to an end, and that the time had come for a new seat of political responsibility.
Therefore, I left the LDP, which had been founded by my grandfather, and after participating in the establishment of the New Party Sakigake, I eventually became the founding leader of the Democratic Party of Japan. The (former) DPJ was founded on September 11, 1996. The following phrases were included in the statement released to mark the founding of the party. "From today onwards, we wish to place the spirit of fraternity at the heart of our society. Freedom can often result in an unrestrained environment where the strong prey upon the weak. Equality can easily result in a malevolent form of equality where all differences are criticized. Fraternity is the power that can prevent such extremes of freedom and equality yet over the past 100 or so years the power of fraternity has been marginalized. Modern nations up until the 20th century rushed to mobilized their people and in doing so tended to assess their worth as a single mass [rather than as individuals]. …… We believe that each individual human being has a boundless, diverse individuality and that each human life is irreplaceable. That is why we believe in the principle of ‘self independence’ through which each individual has the right to decide upon their own destiny and the obligation to take responsibility for the results of their choices. At the same time, we also stress the importance of the principle of ‘coexistence with others’ under which people respect each other's mutual independence and differences while also working to understand each other and seek common ground for cooperative action. We believe that we must steadfastly adhere to these principles of independence and coexistence not only in the context of personal relationships within Japanese society but also in the context of the relationships between Japan and other nations and the relationship between humankind and the environment."
Author Saneatsu Mushanokoji wrote the famous words "I am me, you are you, yet we are good friends". I think these words truly express the spirit of fraternity. Just as the ideals of freedom and equality evolve with the contemporary environment, in terms of both their expression and their content, the idea of ‘fraternity’, which calls on us to respect individuals, also evolves with the times. When I saw the collapse of the totalitarian regimes that both Coudenhove-Kalergi and my grandfather Ichiro Hatoyama had opposed, I redefined my understanding of fraternity as ‘the principle of independence and coexistence’".
13 years have now passed since we formed of the former Democratic Party of Japan. During the time since then, post-cold war Japan has been continually buffeted by the winds of market fundamentalism in a US-led movement which is more usually called globalization. Freedom is supposed to be the highest of all values but in the fundamentalist pursuit of capitalism, which can be described as ‘freedom formalized in economic terms’, has resulted in people being treated not as an end but as a means. Consequently human dignity has been lost. The recent financial crisis and its aftermath have once again forced us to take note of this reality. How can we put an end to unrestrained market fundamentalism and financial capitalism that are void of morals or moderation in order to protect the finances and livelihoods of our citizens? That is the issue we are now facing. In these times, I realized that we must once again remember the role for fraternity identified by Coudenhove-Kalergi as a force for the moderating the danger inherent within freedom. I came to a decision that we must once again raise the banner of fraternity. On May 16, 2009, in the run-up to the DPJ leadership election, I made the following statement: "I will take the lead in coming together with our friends and colleagues to overcome this difficult situation and ensure that we achieve a change of government in order to bring about a fraternal society based on coexistence." What does fraternity mean to me? It is the compass that determines our political direction, a yardstick for deciding our policies. I believe it is also the spirit that supports our attempts to achieve ‘an era of independence and coexistence’.
Restoring the Weakened Sphere of Public Service
In our present times, fraternity can be described as a principle that aims to adjust to the excesses of the current globalized brand of capitalism and make adjustments to accommodate the local economic practices that have been fostered through our traditions. In other words, it is a means of building an economic society based on coexistence by switching away from the policies of market fundamentalism and towards policies that protect the livelihoods and safety of the people.
It goes without saying that the recent worldwide economic crisis was brought about by the collapse of market fundamentalism and financial capitalism that the United States has advocated since the end of the Cold War. This US-led market fundamentalism and financial capitalism went by many names including the "global economy", "globalization" and "globalism". This way of thinking was based on the principle that American-style free-market economics represents a universal and ideal economic order and that all countries should modify the traditions and regulations governing their own economy in order to reform the structure of their economic society in line with global standards (or rather American standards). In Japan, opinion was divided on how far the trend towards globalization should be taken on board. Some people advocated the active embrace of globalism and supported leaving everything up to the dictates of the market. Others favored a more reticent approach, believing that effort should be made instead to expand the social safety net and protect our traditional economic activities. Since the administration of Prime Minister Koizumi, the LDP has stressed the former while we in the DPJ have tended towards the latter position.
The economic order or local economic activities in any country are built up over long years and reflect the influence of each country's traditions, habits and national lifestyles. Therefore, the economic activities of individual countries are very diverse due to many factors including the differences of history, tradition, habits, economic scale and stage of development. However, globalism progressed without any regard for various non-economic values, nor of environmental issues or problems of resource restriction. The economic activities of citizens in small countries were severely damaged, and in some countries globalism has even destroyed traditional industries. Capital and means of production can now be transferred easily across international borders. However, people cannot move so easily. In terms of market theory, people are simply personnel expenses, but in the real world people support the fabric of the local community and are the physical embodiment of its lifestyle, traditions and culture. An individual gains respect as a person by acquiring a job and a role within the local community and being able to maintain their family's livelihood.
If we look back on the changes in Japanese society that have occurred since the end of the Cold War, I believe it is no exaggeration to say that the global economy has damaged traditional economic activities and market fundamentalism has destroyed local communities. For example, the decision to privatize Japan's post office placed far too little weight on the institution’s long history and the traditional role that its staff held in the local community. It also ignored the non-economic benefits of the Post Office and its value in the community. The logic of the market was used to justify taking such a drastic step.
Under the principle of fraternity, we will not implement policies that leave economic activities in areas relating to human lives and safety, such as agriculture, the environment and medicine, at the mercy of the tides of globalism. Rather, we need to strengthen rules governing the safety of human lives and stability of people's livelihoods. Our responsibility as politicians is to refocus our attention on those non-economic values that have been thrown aside by the march of globalism. We must work on policies that regenerate the ties that bring people together, that take greater account of nature and the environment, that rebuild welfare and medical systems, that provide better education and child rearing support and that address wealth disparities. This is required in order to create an environment in which each individual citizen is able to pursue happiness.
Over recent years, Japan's traditional public services have been eroded. The ties that bring people together have become weaker and the spirit of public service has also dimmed. In today's economic society, economic activities can be divided into four sectors: governmental, corporate, non-profit and household. While the first, second and fourth categories are self-explanatory, by the third category I mean the types of mutual assistance which were once provided by neighborhood associations and which are now also provided through the activities of NPOs. As economic society becomes more advanced and complicated, the scope of services that cannot be provided by the authorities, corporations and family members grows increasingly wide. That is why the more industrialized a country becomes the greater the social role played by NPOs and other non-profit organizations. This is the foundation of ‘coexistence’. These activities are not recorded in the gross domestic product, but when working to build a society that has truly high standards of living, the scope and depth of such public services, as provided through non-profit activities, citizen's groups and other social activities, are of great importance. Politics based on ‘fraternity’ would restore strength to Japan's depleted non-profit (public service) sector. It would expand the non-profit sector into new areas and provide assistance for the people who support these activities. In this way, we aim to build a society of coexistence in which people can rediscover the ties that bring them together, help each other, and find meaning and fulfillment in performing a useful social role.
It is of course true that Japan is currently facing a fiscal crisis. However, ‘fraternal politics’ aims cautiously yet steadily for the path that will achieve both the restructuring of government finances and the rebuilding of our welfare systems. We reject the Ministry of Finance-led theory of fiscal reconstruction that relies on the imposition of uniform restrictions on, or the abolishment of, social welfare payments and which seeks to take shortcuts by raising consumption tax. Japan's current fiscal crisis is the result of long years of mismanagement by the Liberal Democratic Party. More specifically, it is a reflection of the crisis affecting Japan's economic society which stems from the bureaucrat-led system of centralized government and the indiscriminate spending facilitated by that system, from the social safety net collapse and greater inequality of wealth that results from an uncritical faith in globalism and finally, from the public loss of faith in politics following unhealthy collusion between government, civil service and industry. Therefore, I believe that it will be impossible to overcome Japan's fiscal crisis without devolving power to local authorities, implementing thorough administrative reform and restoring public trust in the sustainability of social security systems, particularly pensions. In other words, resolving our fiscal problems is impossible without comprehensively rebuilding Japan's political systems.
Empowering Local Authorities within the Nation State
When I made a speech announcing my candidacy for President of the DPJ, I stated, "My first political priority" is "reform to move away from a nation state based on centralized power structures and create a nation based on devolved regional power." A similar view was incorporated into the inaugural declaration when we formed the former DPJ 13 years ago. Back then, our aim was to achieve a nation based on regional devolution and empowered local authorities. We intended to achieve this by limiting the role of the national executive and legislature and promoting efficient local administrations vested with significant authority. Furthermore, based on this new system of government, we aimed to establish wide ranging welfare systems based on citizen participation and mutual assistance in the local community while also establishing fiscal, medical and pension systems which do not force debts onto future generations.
Count Coudenhove-Kalergi's "The Fraternal Revolution" (Chapter XII of The Totalitarian State against the Man) contains the following passage: The political requirement of brotherhood is federalism, the natural and organic construction of the state out of its individuals. The path from men to the universe leads through concentric circles: men build families, families communes, communes cantons, cantons states, states continents, continents the planets, the planets the solar system, solar system the universe. In today's language, what Count Coudenhove-Kalergi described is the principle of ‘subsidiarity’, a modern political approach that has its roots in fraternity.
The truth is that in today's age we cannot avoid economic globalization. However, in the European Union, where economic integration is strong, there is also a noticeable trend of localization. Examples of this included the federalization of Belgium and the separation and independence of the Czech Republic and Slovakia. Within a globalized economic environment, how can we preserve the autonomy of countries and regions, which serve as foundations of tradition and culture? This is an issue of importance not only for the European Union but also for Japan as well.
In response to the conflicting demands of globalism and localization, the European Union has advocated the principle of subsidiarity in the Maastricht Treaty and The European Charter of Local Self-Government. The principle of subsidiarity is not simply a rule that declares that local authorities should always be prioritized, rather it is a principle that can also be invoked to define the relationship between nation states and supranational institutions. We can interpret the principle of subsidiarity from this perspective as follows: Matters that can be dealt with by the individual should be resolved by the individual. Matters that cannot be resolved by the individual should be resolved with the help of the family. Matters that can not be resolved by the family should be resolved with the help of the local community and NGOs. It is only when matters cannot be resolved at this level that the authorities should become involved. Then of course, matters that can be dealt with by the local government should be resolved by the local government. Matters that cannot be resolved by the local government should be resolved by the next intermediate level of government. Matters that the next level of government cannot handle, for example diplomacy, defense and decisions on macroeconomic policy, should be dealt with by the central government. Finally, even some elements of national sovereignty, such as the issue of currency, should be transferred to supranational institutions like the EU.
The principle of subsidiarity is therefore a policy for devolution which places emphasis on the lowest level of local government. As we search for ways to modernize the concept of fraternity, we find ourselves naturally arriving at the idea of a nation based on regional devolution built upon the principle of subsidiarity. When discussing reform of Japan's local authority system, including the possibility of introducing a system of around 10 or so regional blocs to replace Japan's 47 prefectures, we must not forget to ask the following questions: What is the appropriate size for local authorities (which are embodiments of tradition and culture)? What is the appropriate size of local authorities in terms of their functional efficacy for local residents? During a speech I made at the time of the DPJ Presidential Election, I made the following comments: "I propose limiting the role of central government to diplomacy, defense, fiscal policy, financial policy, resource, energy and environmental policy. I propose transferring to the lowest level of local government the authority, taxation rights and personnel required to provide services closely related to people's livelihoods. I propose creating a framework that will allow local authorities to bear responsibility for making decisions and have the means to implement them. I propose abolishing the current system of central government subsidies (which can only be used for a particular stated purpose) and instead providing a single payment which the local authorities can use at their own discretion. In other words, I will break down the de facto master-servant relationship which exists between the central government and local authorities and replace it with an equal relationship based on shared responsibilities. This reform will improve the overall efficiency of the whole country and facilitate finely-tuned administrative services that take into account local needs and the perspectives of local citizens." The only way for regions to achieve autonomy, self responsibility and the competence to make their own decisions is to transfer a wide range of resources and significant power to the local authorities which are in closest contact with citizens, an approach which also clarifies the relationship between citizens’ burdens and the services they receive. This approach will facilitate the invigoration of local economic activities. It is also a path towards the construction a more distinctive, appealing and beautiful Japan. The establishment of a nation based on empowered local authorities represents the embodiment of a modern politics of fraternity and is highly appropriate as a political goal for our times.
Overcoming Nationalism through an East Asian Community
Another national goal that emerges from the concept of fraternity is the creation of an East Asian community. Off course, Japan-US Security Pact will continue to be the cornerstone of Japanese diplomatic policy. Unquestionably, the Japan-US relationship is an important pillar of our diplomacy. However, at the same time, we must not forget our identity as a nation located in Asia. I believe that the East Asian region, which is showing increasing vitality in its economic growth and even closer mutual ties, must be recognized as Japan's basic sphere of being. Therefore we must continue to make efforts to build frameworks for stable economic co-operation and national security across the region.
The recent financial crisis has suggested to many people that the era of American unilateralism may come to an end. It has also made people harbor doubts about the permanence of the dollar as the key global currency. I also feel that as a result of the failure of the Iraq war and the financial crisis, the era of the US-led globalism is coming to an end and that we are moving away from a unipolar world led by the US towards an era of multipolarity. However, at present, there is no one country ready to replace the United States as the world's most dominant country. Neither is there a currency ready to replace the dollar as the world's key currency. Therefore, even if we shift from unipolar to multipolar world, our idea of what to expect is at best vague, and we feel anxiety because the new forms to be taken by global politics and economics remain unclear. I think this describes the essence of the crisis we are now facing.
Although the influence of the US is declining, the US will remain the world's leading military and economic power for the next two to three decades. Current developments show clearly that China, which has by far the world’s largest population, will become one of the world's leading economic nations, while also continuing to expand its military power. The size of China's economy will surpass that of Japan in the not too distant future. How should Japan maintain its political and economic independence and protect its national interest when caught between the United States, which is fighting to retain its position as the world's dominant power, and China which is seeking ways to become one? The future international environment surrounding Japan does not seem to be easy. This is a question of concern not only to Japan but also to the small and medium-sized nations in Asia. They want the military power of the US to function effectively for the stability of the region but want to restrain US political and economic excesses. They also want to reduce the militarily threat posed by our neighbor China while ensuring that China's expanding economy develops in an orderly fashion. I believe these are the instinctive demands of the various nations in the region. This is also a major factor accelerating regional integration.
Today, as the supranational political and economic philosophies of Marxism and globalism have, for better or for worse stagnated, nationalism is once again starting to have a major influence on policy-making decisions in various countries. As symbolized by the anti-Japanese riots that occurred in China a few years ago, the spread of the Internet has accelerated the integration of nationalism and populism and the emergence of uncontrollable political turbulence is a very real risk. As we maintain an awareness of this environment and seek to build new structures for international cooperation, we must overcome excessive nationalism in each nation and go down the path towards the rule-building for economic co-operation and national security. Unlike Europe, the countries of this region differ in their population size, development stage and political systems, and therefore economic integration cannot be achieved over the short term. However, I believe that we should aspire to the move towards regional currency integration as a natural extension of the path of the rapid economic growth begun by Japan, followed by South Korea, Taiwan and Hong Kong, and then achieved by the ASEAN nations and China. We must therefore spare no effort to build the permanent security frameworks essential to underpinning currency integration.
ASEAN, Japan, China (including Hong Kong), South Korea and Taiwan now account for one quarter of the world's gross domestic product. The economic power of the East Asian region and the mutually independent relationships within the region have grown wider and deeper, which is unprecedented. As such, the underlying structures required for the formation of a regional economic bloc are already in place. On the other hand, due to the historical and cultural conflicts existing between the countries of this region, in addition to their conflicting national security interests, we must recognize that there are numerous difficult political issues. The problems of increased militarization and territorial disputes, which stand in the way of regional integration, cannot be resolved by bilateral negotiations between, for example, Japan and South Korea or Japan and China. The more these problems are discussed bilaterally, the greater the risk that citizen's emotions in each country will become inflamed and nationalism will be intensified. Therefore, somewhat paradoxically, I would suggest that the issues which stand in the way of regional integration can only really be resolved through the process of moving towards greater regional integration. For example, the experience of the EU shows us how regional integration can defuse territorial disputes.
When writing a draft proposal for a new Japanese constitution in 2005, I put, in the preamble, the following words on the subject of Japan's national goals for the next half century: We, recognizing the importance of human dignity, seek to enjoy, together with the peoples of the world, the benefits of peace, freedom and democracy, and commit ourselves to work continually and unceasingly towards the goal of establishing a system of permanent and universal economic and social cooperation and a system of collective national security in the international community, particularly in the Asia-Pacific region. I believe that not only is this the path we should follow towards realizing the principles of pacifism and multilateral cooperation advocated by the Japanese Constitution, I also believe this is the appropriate path for protecting Japan's political and economic independence and pursuing our national interest from our position between two of the world’s great powers, the United States and China. Moreover, this path would represent a contemporary embodiment of the "fraternal revolution" advocated by Count Coudenhove-Kalergi.
Based on this awareness of our intended direction, it becomes clear that, for example, our response to the recent global financial crisis should not be simply to provide the kind of limited support measures previously employed by the IMF and the World Bank. Rather, we should be working towards a possible idea of the future common Asian currency. Establishing a common Asian currency will likely take more than 10 years. For such a single currency to bring about political integration will surely take longer still. Due to the seriousness of the ongoing global economic crisis, some people may wonder why I am taking the time to discuss this seemingly extraneous topic. However, I believe that the more chaotic, unclear and uncertain the problems we face, the higher and greater are the goals to which politicians should lead the people.
We are currently standing at a turning point in global history, and therefore our resolve and vision are being tested, not only in terms of our ability to formulate policies to stimulate the domestic economy, but also in terms of how we try to build a new global political and economic order. I would like to conclude by quoting the words of Count Coudenhove-Kalergi, the father of the EU, written 85 years ago, when he published Pan-Europa.
"All great historical ideas started as a utopian dream and ended with reality".
"Whether a particular idea remains as a utopian dream or it can become reality depends on the number of people who believe in the ideal and their ability to act upon it."
This text is a translation of an article published in Japanese in the September edition of the magazine Voice. www.hatoyama.gr.jp/mas...
UNQOT
On Sep 18 11:46 AM Broxburnboy wrote:
> It is the US that pulled the plug on dollar, and the rest of the
> world is getting stiffed ... now they are smartening up and making
> arrangements to cash in their bucks before it gets really worthless.
>
I also like Lao Tzu's philosophy. That is not correct. You cannot like or dislike the philosophy, it is simply a way towards a better thing.
In any case, I would offer this thinking from my friend here in China in regards to the distinctions between Lao Tzu and Confucius.
Confucius was for those in positions of power. Lao Tzu was a teacher for everyone else.