You, uh, do know that they call economics the “dismal science,” right? If you’re looking for optimism, uh, you could study, um, uh, well. Avoid knowledge, maybe?
But you supported giving billions of dollars to the thugs running Georgia; you also supported giving military guarantees to those thugs in the form of NATO membership. Then, when the thugs took advantage of your generosity, and started shelling densely populated civilian areas – which had always been their intention, for years before the war – you advocated giving them even more support. That is essentially equivalent to supporting a proxy war. It’s always possible to put the proper “pro-democracy” spin on it.
The proxy war that I am afraid of would be similar to the war in Georgia. First, the US would give billions to local warlords, while running a propaganda campaign that would portray the warlords as being “democratic.” Then these warlords – perhaps directly encouraged by the US government, or perhaps merely emboldened by their belief that the US was on their side – would begin killing ethnic Russians (or Chinese, depending on where the scenario took place). If the Russians/Chinese wouldn’t respond, then the warlords would keep on killing until there was no one left, and then turn the area into a terrorist training ground for attacks deeper and deeper across the border. Thus, regardless of how the Russians/Chinese were to react, they would be drawn into violent, destabilizing border wars. After that, the situation would follow the Yugoslavian scenario.
Would Americans have the “stomach” for this? I hope not. But you, for example, certainly seem to have a taste for using the American government to participate in every obscure ethnic conflict across the world in favour of what you believe to be the “democratic” (i.e. pro-American) side. Your question to me was politely phrased, so I emphasize that I am not deliberately trying to insult or belittle you with this statement – it is meant only as my honest appraisal of your worldview. Unfortunately, Clinton was able to sell his appalling, brutal attack on Serbia under the guise of “humanitarian intervention,” so I think Obama would probably follow the same script, if he decided to go down the same path.
Regarding the connection between war and the financial crisis, I see it as being somewhat similar to World War I. Many of the participants in World War I decided to fight because they believed that they were at the peak of their power. They saw various signs that they would soon go into decline, so they decided to fight because it was their last best chance to preserve their power relative to everyone else. Sure, the war would drain them, but as long as it drained everyone else even more, they’d still come out on top. In a similar way, I have seen it argued that the American South decided to fight because it was their last best chance to preserve their strength, before the North could fully develop its industrial power. I am not making a moral comparison between any of these political entities – I am only stating that powers have often started wars as an attempt to avoid losing political influence.
In our case, most of our power derives from the fact that the dollar is the sole reserve currency for most of the world. The dollar is backed only by the commodities that people sell for it. For years, people believed that America is more stable and offers more financial opportunities than their own countries, so they invested their savings in America and bought dollars instead of their own countries’ money. This gave us great economic power, because we had all this money to do with as we pleased, and it also gave us great political power. We would have great influence over a country’s policies as long as that country’s political elite kept their own personal savings invested in American banks, thus allowing us to freeze their assets if they did something we didn’t like.
But this windfall caused both Wall Street and the American government to become reckless. They both ran up gigantic debts that they were unable (and maybe never intended) to pay. The subprime crisis was a very rude awakening for the rest of the world, especially China. China has no private pension funds, basically the Chinese government has to manage one billion people’s pensions. The US government did not allow China to invest that money in the real sector of the American economy, so China put a lot of it into risky subprime derivatives instead. To them, the subprime meltdown is much more than just a bad housing market – it puts the entire country’s savings at an unacceptably high level of risk.
So now, the rest of the world is no longer satisfied with putting all of its money into American markets. Everyone is talking about the need for multiple reserve currencies. The most important news recently has been that the leading Chinese newspaper has called for China to switch to a different currency. The Russian president said the same thing recently. As for the EU, they’ve already been trying to develop a new reserve currency. If any of them were to succeed at this, it would mean the end of Wall Street’s financial dominance. At best, America’s influence will be greatly reduced with the advent of other reserve currencies. At worst, the American economy might collapse under the weight of all the debts that we’re unable to pay. The least bad way to write off these debts is to invite Russia and China to recapitalize America’s banking system, with the extra incentive of letting them invest in the real sector (i.e. buy up factories and top companies). This would keep the dollar as the world’s sole reserve currency, but it would still force Wall Street to give up part of its influence.
What other ways are there to write off one’s debts, while preventing one’s creditors from starting their own financial systems? The only way that I can think of is a war bloody enough to destabilize them, thus forcing them to return to the dollar. Which is why I hope that Obama distances himself from the Brzezinski/Holbrooke style of warmongering when he puts together his cabinet.
I don’t have much of an appetite for politics, but I could read books by you 
That’s true, and polling problems were also apparent in the Wilder election as well. It’s one of the reasons why I advocated that it wouldn’t have that major of an issue in the election.
You remember when Alan Greenspan said that he had discovered a flaw in his fundamental worldview? Yeah, I nearly experienced that. I’ve discovered that I actually like numbers a bit when they deal with the politics of an issue.
But my fundamental world view goes on the basis that people aren’t…I don’t mean to sound elitist, but willfully ignorant…or just unbelievably depressing. Polls show that 23% of Texans believed that Obama was a Muslim (as if it should matter if he was). Did you know that 14% of exit polls have to be thrown out? You know why? It’s because that 14 percent of the population doesn’t remember who they voted for.
You can’t…you can’t remember who you voted for? You can’t remember who you voted for in one of the cornerstones of American democracy and your civic duty? I swear, there have been times when I’ve nearly snapped after hearing all that I have.
Most undecided voters just figure out who they’re going to vote for on Election Day. I’ve heard fist hand accounts of poll workers who have been asked on Election Day who they should vote for. This is also why we can determine that as the election goes on, undecided voters begin to matter a little less unless the polls are very tight. Because these people decide at the very last minute, we can ascertain that undecided voters will probably split evenly between the candidates; just like they did in this election. It just didn’t matter because the deficit in the numbers McCain had to recover from was too large, even if undecided voters did break for him fully in some key states.
I love this stuff. I really do. I’m such a nerd I’ll sit down with some popcorn and enjoy the C-SPAN roundup on all this. But I’ve stopped counting the number of times my professor has had to remind me that people are not reasonable or dependable and could care less about their civic duty.
For a non-cynical field I surely wouldn’t turn to economics. I think it’s telling that economics as applied to law, outright deny the concept of justice.
I voted for Obama because he will likely screw us less than McCain, which I find a bit of compromise of my political beliefs. The Republicans and Democrats both want to drain us of our essential liberties, and care more about staying in power than contributing anything worthwhile to the American public. We are fucking serfs. There- I said it. We’re living in the next step of feudal society: capitalism. We’re living in a nation with so many illusory, transitory freedoms that the government can pacify us.
And if anybody believes that someone like Obama, who almost always votes along party lines, is someone that will inspire change… well… you’re gullable. I’m sorry. You’re a fucking patsy. Again, I did vote for him, but this isn’t an inspiring win of a Washington outsider (as both Obama and McCain were pegged) so much as more of the status quo. Will he be an improvement over Bush? Undoubtedly. But I think that a detached penis would do a better job than him at being a figurehead and saying, “Hey, look over there!” as Reagan and Clinton did quite well.
It was true after all. Obama is a secret marxist muslin.
The anchors’ shocked expression is priceless. What channel was it? As for the comments, heh.
Not that I think Obama’s election actually warrants red flags.
edit: Ah, Fox. I’m not surprised, but I get my U.S. news from the internet, so I can’t identify a Fox background for my life.
It was Fox News, a very right wing/conservative news station.
Then, even though there was no chance they’d get elected, you should have voted third party. Vote closer to what you actually believe. I forget if you’re in Connecticut or New York currently. Connecticut hasn’t gone Republican since '88, New York since '84. Both had been trending upwards of Obama +20% since June. It was safe either of those states would go for Obama. I subscribe to the belief that the only wasted vote is a vote cast for the lesser of two evils.
You should always vote for who you really want. Doing otherwise leads to both parties not seriously changing their beliefs.
I’m skeptical about foreign powers gaining control of the world by switching currencies. If they could have done it, they would have done it already. The fact that they haven’t done it yet means they can’t do it, or its not really worth anything.
Or that it requires time, and an economy large and stable enough to survive if the US threatened to restrict it’s access to the dollar. 
Exactly. Creating one’s own financial system is a very risky and difficult process, it requires a strong national government that is stable enough to consistently provide a lot of credit to investors. It is even more difficult when many individuals in the foreign political elites have been keeping all of their own personal wealth in the US for years (cynical “comprador” types who are vulnerable to confiscation if they try to change their financial policies), or when the country’s entire pension system is already invested in dollars. Failure would be catastrophic, so China would have probably preferred to maintain the status quo, but Wall Street’s profligacy is pushing them into a corner. Wall Street needs a way to write off its debts; if China continues to play by Wall Street’s rules, there’s an increasingly large chance that Wall Street will try to write off its debts at China’s expense. The stakes are so high that it’s becoming even more dangerous (from China’s point of view) to continue the old policies than it is to build an independent financial system. It’s not about “gaining control of the world,” but about survival.
For the global financial players “gaining control of the world” is not in the cards; but having a currency with the potential to challenge the dollar as the leading international currency is a priority.
In the 1990s, some pundits suggested that the yen and the mark could substitute the dollar as the premier international currency, and now the euro is playing the role of a challenger. According to some economists (like Jeffrey Frankel and Meze Chinn, for example), the euro could surpass the dollar within ten years. If the UK adopts the euro, then the euro overtakes the dollar even faster.
Now, about two thirds of the foreign exchange reserves of countries are in U.S. dollars, and approximately a quarter of reserves are allocated to the euro.
Here is Frankel’s scenario of the dollar vs. the euro contest.
I think that he slightly underestimated the impact of the subprime fiasco in the Euro zone, and the unwillingness of China to embrace the euro. The US dollar will remain the leading international currency for much longer than a decade, but not indefinitely.