Germany’s Current Account Surplus

We often forget that Germany (like the rest of Europe) is integrated or fused in a way that makes analysis of baskets of currencies difficult.  Here’s what I mean:  if Germany was to trade using its former Deutsche-mark and not the Euro, its currency rate or parity was register smaller imbalances. As of February 09th, Germany registered the world’s largest current account surplus, beating China.  Germany’s mercantilist policy of favoring Euro-denominated exports permits it to use a weak currency.

For team Trump, this is another reason to distain both our rules based economic order, the European Union and NATO, all remain bulwarks for German national consciousness. If anything, Asian geopolitical consciousness is far more agile than European. We simply don’t have viable replacements for the E.U. or NATO.  If Putin were to accept reform the Russian political economy out from its authoritarian trajectory, it is possible that market based solutions in Moscow could alleviate Germany’s dominant current account surplus by linking historical competitive animus between Moscow and Berlin.

As it stands now, Berlin really has a savings glut, investment gaps and wide swings in its VAT indices.  As it is with Japanese domestic industries, these are non-starters for Germany.

In the end, European nation states are going to have to begin reforming themselves and competing; this means ending the subsidies, the monopolies and the overt accommodative monetary policy that has only sought velocity at the expense of competitiveness.

Get ready for nationalism and volatility, a redo of 1973.  Is Volcker & Taylor ready for Bretton-Woods II?

3w

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The State of European Political Economy

When Francis Fukuyama stated that there was no higher form of historical development than the Western social democratic state, many laughed.  I actually lost my breadth laughing.  But when a person thinks in isolation or outside any sound dominant tradition (Leo Strauss, Harry Jaffa etc. . . ) you find yourself like Francis did, alone defending a filament that entirely misses both the moral foundations of liberty and the theological foundations of culture.  Being trained in the technique of political science akin to positivism renders one unable to discern nor defend the synoptic whole.  But then again, what else is tenure for??

Like the early 1970’s, the United States went through a profound crisis of mediocre leadership aggravated by the twin shock of the 1973 Yom Kippur War and its aftermath in the OPEC crisis; all of which was enveloped in the closing of the ‘gold window’ and the removal of fixed exchange rate regimes.  The whole thing would not be resolved until the early 1980’s under Reagan and Volcker.

With new influences at work in new arrangements, new forms of geopolitical, monetary, fiduciary underwriting, the world fractured in 1973 and the cleavages rent many of the formal institutions of government.  Its happening today, but the fault lines aren’t fracturing like they did in past decades.  Today’s shocks are the result of social, technological, demographic, even cultural changes that don’t register in positivist tones.

When the coachman of Europe, Prince Klemens von Metternich, sought to end the rule of egalitarian romantic revolutionary movements throughout Europe, he only had to conjoin a Concert of Europe.  Given a certain equanimity in the social base of European Christian civilization, a comity was easily reached and Napoleon thwarted.  What does one do to harness a reply to foreign influences that run outside the mores of ones culture.  When monetary, fiscal and instruments of war are useless in thwarting or assimilating an enemy, how does one command a center for harness, when there is no center to speak of.

When Bismark was dismissed after 28 years of service by the 31 year old German Emperor Wilhelm II, who could measure that Germany was fatefully placed in dangerously incapable hands?  Fearing encirclement in World War I and the twin enormities of both hyperinflation and social darwinism, the German volk happily invited a gotterdammerung worthy of any Greek tragedy.  It fell to the Americans to finally fix that Prussian menace.  Ditto for Japan and Russia.

The American’s are being called again now, to distant lands; we should remember Washington’s admonition of alliances and monsters abroad.  For if Germany, Japan, Russia and hosts of other first world nation states fell upon an altar of sacrifice under a democratic banner, the same could happen to the American’s.

We should also remember the achievements wrought under a Truman, Eisenhower, Kennedy or Reagan.  It isn’t all blackballing and violence.  Wasn’t the greatest European act of statesmanship prior to John Paul II, Adenauer’s rejection of Stalin’s offer of reunification in exchange for neutrality.  Even still, with Bismarck, Germany was hobbled by fractious divisions of its politics inviting a profound ambivalence of German ambitions that plays out today.  With Merkel, the moral, strategic condition of inferiority still afflicts Germany.

This Teutonic ambivalence plays out today between the Social Democrats & Christian Democrats.  Embedded deeply within the components of these coalitions are divided and dysfunctional national ambitions that cannot be reconciled.  As of this writing, the German political condition is unstable and untenable.  Merkel has squandered her ambition and strength in the admission of Syrian refugees; her profound delay in realizing how untenable her policy was, is fatal.

No matter what happens in the immediate German elections, it will take another generation of those born long after Merkel (1954) to ease Germany through the vacuum left by an imploding Third Reich.

The French Republic remains in a far more dangerous position than Germany.

The Platonic idealism animating the French Republic has found a home in jihadi Islam.  To stir the French out of their cynicism and impractical nature will require the very horrors jihadi’s are imposing upon the French Republic.  What the French need is a national goal of imaginative grandeur.  This isn’t something impossible for the French to conceive, but for Paris to conceive of it, it will need to contain, and evenly break the overt socialist tendencies that paralyze French politics.

Remember when De Gaulle took over a France mired in failed counterinsurgency in an imploding Algeria and failed Indochina.  De Gaulle gave strong leadership, a new currency and nuclear weapons.  He cut Algeria loose and worked with the American’s in Indochina under the pretense of holding firm to any German advance in the western Atlantic.

The French have never really recovered from the bombshell of Solzhenitsyn’s Gulag Archipelago nor Arthur Koestler’s Darkness at Noon.  Even still, the French have never taken appeals to national interest seriously.  For France to succeed in the near future, it must find a way out of a self-imposed socialist malaise.  Without addressing France’s paralyzing ennui, it is in permanent decline.

England has never recovered from the near suicidal defenestration of Thatcher in 1990.

When she was elected in 1979, the IMF had England in receivership with strict currency controls.  The top income tax rate was 98% with an unimaginably high corporate rate of 70%.  British industrial relations is where Maggie sought to lay her ax and her reputation.  It was a gamble, and she won big.  All this galvanized her stalwart positioning in the Falkland island dispute, only to strengthen Reagan’s ‘wobbly knees‘ in his own near fatal grasp of Soviet adventures in Afghanistan & Central America.  None of this was foreordained, and there remains much in contention socially and related to tax policy and its relation to deficits etc. . . In all, “we win they lose” won the day.  No one should expect that calculation to succeed again.

The west today is at an interregnum of weak leadership.  November of 2016 marked a profound fault line that Americans will not accept decline and have moved to upend an un-regenerative, reek seeking political class.

What Lincoln and others knew may come truth again:  the American’s are a warrior class and openly seek confrontation in a culture war whose patrimony is discerned in the American experiment that is liberty in equality.

4a

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India’s Elections: World’s Largest Democracy Fracturing

To say that India is fracturing isn’t groundbreaking news, its geography alone sustains cleavages that most nation states just simply couldn’t sustain.  With rivers running along an east-west continental strain and sidewinding railways, Indian consciousness was always turned inward towards the tip of its Oceanic peninsula; its back facing the Himalayas, its face toward the littoral, Indian consciousness is best embodied in its non-alignment posture.  A forced inward bound self-consciousness was broken in the northwest frontier.  It was Maulana Azad’s memoirs revealing the geologic design dominating British perfidy at having Mountbatten place two rival dominant Muslim majorities on India’s only continental openings (today’s Pakistan & Bangladesh).

Why does this matter?  By any calculation, India’s largest state, the Uttar Pradesh (UP) is home to nearly 200 million Indian Muslims.  The complexity of its politics, its plethora of faiths, castes, political allegiances cannot be contained in language.  It is best embodied and told by the overt garish nepotism, the boisterous rank criminality of UP rent-seeking. This raucous has affinity perhaps only in the Israeli Knesset.

Uttar Pradesh’s state capital is Lucknow.  Home to India’s lower house chamber called Lok Sabha, and India’s upper chamber, the Rajya Sabha.  Both had landslides favoring Modi in 2014.  This sweeping majority rule upended socialist majorities of the Indian Congress Party, an unlikely policy shift that no one foresaw.

Now with upcoming elections scheduled for six weeks beginning in late February, Modi’s BJP party hints at a looming defeat.  It wasn’t fore ordained.  Having the State Assembly Houses in Lucknow thwart the 2014 BJP landslide by minuscule majorities in the upper chamber is now about to play open to the Congress Party, effectively killing off market based reforms initiated by Modi.

Modi isn’t up for election again until 2019 where he will seek another five year term.  Until then, Modi’s BJP party has to count on overwhelming majorities in UP and five other smaller states (Manipur, Punjab, Goa, and Uttarakhand.)  If he succeeds, Modi’s Party can unleash a Hindu-Nationalist agenda that will violently envelop oligarchs in Lucknow upper chamber the Rajya Sabha.

Either way a fight to the death dominates India’s political economy and with it, a chance to address Islamabad’s civil-military relations, an emerging nationalist Beijing and militant Islamists moving down from McKinder’s Heartland, Central Asian nomads that can easily constrain both Moscow & Washington.

The gloves are off; my monies on Modi.

3q

 

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Russia’s New Weapon: A Torpedo Traveling 5K miles per hour.

Its called supercavitation.  The tip of the torpedo has a frontal device that blows bubbles of vapor (cavities) effectively permitting the torpedo faster propellent with almost no water drag.  The Russians have it and have perfected the technology.  Let’s review.

Russian naval engineers began experimenting with supercavitation in torpedo design about 40 years ago, designing and fielding these instruments for speeds close to 400 mph. Russians called this air-craft carrier killer the Shkval or squall.  Russian engineers began studying the effect cavities or bubble of vapor on propellers and blades.  Under the conditions of low pressure cavitation wears down blade propellers, so Russian designers began amplifying the phenomena.  They designed a torpedo with a blunt nose and flat disc that created a circular trailing edge throughout the entire forward moving body of the torpedo.  To create the bubble, they harnessed a rocket motor for extreme acceleration; in effect creating a very large, single, giant bubble which enveloped the entire torpedo except the steering fins.

The result is a weapon of war that experiences almost no hydro-dynamic drag, enhancing its velocity by magnitudes.

Here’s the limitations:  its effective range is severely limited to 15 kilometers; the Americans use torpedo’s (the Mk48) that sustain engaged range over 50 km. Secondly, it is loud so it can be detected.  Third, it has no tracking devices, so it cannot track, search nor contain any target.

Although the Germans and American firms have shelved plans or inquiries into supercavitation, Moscow has continued.

In October of 2016, Russia released new footage of its supercavitating torpedo called the Predator.  Russia is fielding a new frontal plate that isn’t flat but curved so as to harness sonar.  Tests throughout the Black Sea have registered torpedo speeds exceeding 5,000 miles per hour.  Many western engineers think the Russians are using lithium as the power source.

Its time for defense planners and Pentagon acquisition staff to get serious about our mission for ‘the Long War’, because the craftiness of our enemies is growing.

2w

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Inclusive Team Trump vs. Govmint Bureaucracy

The challenge playing out before our Republic regarding the so called Islamic ban of visa bearing individuals from Muslim nation states is the separation of powers doctrine and its consequences in derailing institutionalized comity in U.S. civil-military relations.  We’ve been here before, and the story never gets better.  Like Nixon and Reagan, Trump remains a perfect candidate, a fortress besieged by unelected government officials tethered to unions and other arcana, not subject to his authority.  And like Nixon and Reagan, team Trump will begin to feel an impersonal vice on his governing hand, his agenda cut off, his voice din and reach small, IF he and his team don’t start learning Washington politics.

The federal courts in the state of Washington & Minnesota are challenging the Presidents executive order for a 90 day stay of visas from Islamic nation states, identical states procured for the Obama administration.  By subjecting the separation of powers doctrine and the plenary power enumerated into federal supremacy regarding immigration and war, the agencies have set themselves up as final unelected arbiters of our Constitutional Republic.

This begs the question:  what is the Constitutional status of federal agencies.  Because they remain creations of the executive branch and remain funded by Congress, it isn’t clear of their place in our Constitutional structure relative to the separation of powers.  Just who does the EPA work for?

The founders invited or left deliberately vague the actual demarcated division between the branches, even though all reserved power is enumerated.  Why is this the case?  Because the founders knew that they were dealing with a relation, not an object.  Constitutionally speaking, the status of federal agencies is that they aren’t Constitutional, yet they retain their authority from the Executive and from Congress, even though Congress cannot ever delegate enumerated power reserved to itself.

The fact isn’t difficult to discern, the State department has long been a completely dysfunctional arm of the Executive.  It operates as a monolithic fiefdom.  For Presidents and others to be effective they’ve resorted to transferring operational authority to the National Security Council, to individual members of the vaunted policy planning staff at State; even Defense department combatant commanders have elaborate staff, this says nothing about the intelligence community.

Where does team Trump begin.

He begins by fighting to remove the union membership status of federal agencies.  Trump and his team have got to do politics “on the Hill” if their going to win.  Why?  Because the opposition will seek impeachment if they sense a disoriented executive.

While Trump sets his sights on Republican majorities in the House for legislation removing union status of federal workers, National Security advisor Flynn must place the day to day operational staff of State within the interagency process.  After four years, this is what State should have achieved in strengthening the President.

A Russia that openly seeks cooperation with American interests in counter-terror operations globally.

A China that ends its threatening behavior in the South China Sea while engaging a constructive role in the world economy and policing of the commons.

A North Korea demilitarized.

An Iran that no longer openly seeks confrontation of U.S. assets in international waters. An openly threatened nuclear proliferation network beginning with Iran and its encirclement of North America by Quods agents throughout South/Central America.

A liberalized Saudi political economy that leads in the reformation of Islam.

A reformed foreign assistance program that focuses on political reform of economies too weak or foreign to the mores of a market based economy.

After four years, State could begin to retake its previous leadership role as the authority of U.S. foreign policy.  That would mean truly creative policy making that is not only diplomatic but joint-interagency with defense civilian leadership.

For team Trump to succeed he’ll need to ask or demand of State that it seek to field new regional alliances, to condition foreign assistance with regimes like Pakistan, and the expansion of covert operations globally.

It would mean ending career officials who see their job outside the parameters of our Constitutional Republic.

It means fixing the broken instrument of diplomacy that has become the U.S. Department of State.

'Miss Carruthers, check and see if we have an extradition treaty with Disneyland.'

 

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The Shia of Bahrain & Failed Arab Spring

Home to the United States 5th fleet, securing the Arabian Sea, Persian Gulf, Red Sea and significant parts of the Indian Ocean, Bahraini’s are unfortunate to live in Saudi Arabia’s eastern island, wedged in between Saudi perfidy and U.S. reluctance, the Shia in Bahrain have been defeated, but will not stand down.  Its an idea of revolutionary fervor that has found a home in Tehran and its own vision of encircling the Arabian peninsula.

King Hamad has an uncle named Khalifa bin Salman, he’s the world’s oldest living prime minister.  He’s been on the job over 45 years straight and he embodies the animus most have come to have for this ruling class.  The king himself has only ruled since 1999, he’s managed to both spread profound austerity with monopolizing power on an island that the Saudi’s believe is their’s to manage, yet fail at every step to reform.

In order for Bahrain to survive, the price of oil must double; the Saudi’s have underwritten enormous budget deficits in tandem with other reliable Gulf partners threatened by the Arab Spring.  Having asked McKinsey & Company to write Vision 2030 as a blueprint for market liberalization, Bahrain is stuck in a vicious subsidy trap.  Currently, its bond ratings are rated junk.  Wait. . . it gets worse.

Assaulting a strong demographic trend, Bahrain is home to over 60% Shia.  To eradicate these trends the King as his ministers have built new mansions for Sunni’s while importing a rash of Hindu temples.  (You read that right.)  By hosting a rapid influx of non-Shia foreigners, churches and other Arabic lumpen, the ruling Al-Khalifas in solidarity with other reigning Sunni monarchies are waiting out an impending storm.

Communal tensions are rising; but there is no civil order, no civil society from which a person can find refuge.  Recently, the Islamic State put out a video of a Bahraini ideologue exclaiming that regional Sunni’s should place suicide bombers throughout the Shia in Bahrain.

Bahrain is ground zero for an Arab Spring that never had a chance to take on the deep state.  But don’t worry, for the ruling Sunni’s have no grasp, no fealty or hold on their populations; evidenced in barren industrial baselines, failed liberalization efforts, climbing deficits and irreconcilable political, social aims of a vacant citizenry.

THIS. WILL. NOT. END. WELL.

Bahraini Demonstrators Retake Pearl Roundabout As Army Backs Out

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China’s Blue Water Ambitions?

China’s northern port city of Dalian is the location for American technological spy-craft to witness Beijing’s Naval ambitions, it is here where Beijing fields her first aircraft carrier launched last month to encircle Taiwan and threaten her neighbors in both the East & the South China Sea.

The media coverage of the event was favorable to Beijing, even if their remain nearly insurmountable obstacles for Beijing’s naval ambitions to come to fruition, December 24 saw China begin to thwart U.S. dominance in the Pacific.  For Admiral Wu Shengli, this has been a long time coming.

The Liaoning is China’s first aircraft carrier and Beijing pulled out all the props corralling her with escorts of destroyers, frigates and a corvette.  As the refueling ship arranged for hookup outside the port of Qingdao, they ran her through the Miyako Straits right into the heart of an impending quagmire:  the South China Sea.

Beijing wishes to send threatening signals to every nation in her regional grasp.  She seeks to dominant, with consequences.  By herself, the Liaoning remains incapable of pushing the Americans back to a second island chain far out in the Pacific.  Like Pakistan and North Korea, Beijing seeks absolute security guarantee for oil, goods and communications; her commercial and geo-strategic interests are one.

Their first aircraft carrier is based on a Soviet Kuznetsov class design; it is nothing near in design or operational craft near our Nimitz-class; carrying only 24 J-15’s, these fixed wing aircraft don’t have a catapult, but a lift deck identical to a ski jump.  This means two significant strategic insights regarding capability.  One, China’s J-15’s need to use much less fuel and fewer ordinance.  It also means slower early warning and anti-submarine aircrafts cannot take off from the Liaoning.  She is vulnerable when operating far off shore based air support.  This ship’s hull was taken from a Ukrainian shipyard, this means Beijing’s first aircraft carrier depends on steam turbines, cutting its range, speed and operation tempo.

What can the Liaoning do?  It provides air protection for China’s regional littoral fleets and can be used in disaster missions and evacuations.  Other than that, not much.

Just as the Russian Sukhoi SU-33 jet found it tough to fly night missions off the Syrian coast, Beijing’s J-15 has no catapult, but the Chinese are experimenting on land.  To offset any institutional failure in fielding indigenous aircraft carriers, the Chinese are already fielding shore based anti-ship ballistic missiles called ‘carrier killers’.  The DF-21D & the DF-26 are fielded to shore up China’s near permanent vulnerability.  As of now, the Chinese are hedging, but they may just get it right over time.

In the meantime, the American regime has a cultural advantage, our crews have unrivaled tribal knowledge of operational craft in all weather terrain, something the boys in Beijing don’t have.

5y

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Separation of Powers Doctrine & Aggravated Civil-Military Relations

Nixon was screwed.  The leaks represented unwarranted usurpation of the Presidents war powers numerated in both the Constitution & Federalist Papers.  Yes Congress carries the purse but the President can wage, make war (those words aren’t mine, they’re Madison’s.)

The 1970’s saw the greatest positivist challenge to a unitary Presidency in the Boland, Church amendments that openly sought the elimination of the separation of powers doctrine, the very source architecture of our Constitutional Republic.

Why was this done?  Vietnam was unpopular and the Democratic Party wanted to bludgeon the President.

Why is this important today?  Given how the progressive wing was totally thwarted, rejected in November, the Democratic Party seeks revenge in filibusters, nuclear options, sit-in’s, and quorums.  They lost.  Weren’t we told elections have consequences?  Better still, the Founders vision of a Republic meant that the mandate of an election ideologically shapes the structure of government.  Today this is denied.

Washington’s farewell address was denied.  When Roosevelt, Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan, Bush & Clinton became President they inherited a formidable policy architecture to confront the Cold War.  A twilight conflict the Founders never wrote for, yet anticipated.  With an unpopular war called Vietnam, the House sought political cover to protect their influence.  If it meant near permanent damage to the structure of our Constitutional government, so be it.

Because the origins of Vietnam lay in Washington’s need to secure French support for NATO, Truman sought overt political accommodation of French tacit support for its imperial writ in Indo-China.  For Vietnam, there never was a declaration of war, that’s why the Gulf of Tonkin resolution remains significant.  An executive is subject to political pressure, the publics desire expressed through the dominant media of that time limited the unitary authority of the President.  TV hampered the separation of powers.

We met the challenge thrown down by Lenin and the sons of perdition, but the cost was very high.  That included Vietnam, Laos, Cambodia, El Salvador and hosts of other periphery nations that beckoned military support.  Our Presidents took their oath seriously, but the story of the separation of powers, a unitary executive and war powers is hardly told.

The entire drama plays out in civil-military relations, a hide bound discipline that destroys careers, lives, even families and nations.  Here’s the truth:  the Constitution enumerates war powers to the President, this means he/she can wage unlimited, even nuclear tactical war globally.  Subjected only to political restraint by the public. The Presidents job is to preserve the Union.

Indochina of the 1970’s is a great place to start reviewing unprecedented paramilitary escalation, under the reform of the entire defense department, a flatter structure for ‘the long war’ in Yemen, Somalia may resemble Indochina.

In 1961, Laos was the focal point for our containment strategy, these and other CIA ventures into paramilitary operations remain heavy capital investments that were only understood by those who formally studied counterinsurgency doctrine.  The rest of our establishment was caught up in Westmoreland’s myopic, wrong-headed scheme of superior firepower through linear engagement.  By contrast, the Marine corps admonition that U.S. formal policy in Vietnam identify each, every communist political officer in every single hamlet throughout Vietnam for assassination under the CIA’s Phoenix Program openly frightened the North, evidenced in recent declassified state archives.

The reform of the Pentagon, its acquisition systems along with personnel throughout the department of defense should anticipate what a flatter, more nimble defense structure will resemble.  If Trump’s revamping of his National Security Council excludes previous commanders while admitting policy officers, we need to prepare the public for why this occurs.  Fiefdoms are monolithic, and can possess interests contrary to our Republic and the Presidents oath.  Reforming our governing institutions so they resemble a Republic and not a Parliament is a most difficult feature of any reform.  But IT must be done.

Get ready for the loyal opposition to take the field positioning themselves in parliamentary manner.  They’ve lost, and we’re stuck with juvenile sit-ins, minimum quorums, filibusters and other archaic nomenclature of a dominant militant ruling class unfit to serve.

5t

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The Pretorians are Flailing

When Prince Muhammed bin Salman insisted that the Saudi state was at least 25 years behind on diversifying its political economy, most were aghast at the admission.  But as Saudi Mission 2030 continues apace, its becoming clear that reforming the Saudi family business isn’t something light, nor easy to implement.  Orders of scale have their own intrinsic metrics, one cannot simply reverse in linear fashion a previous failed engagement.  Beijing is learning this admission the hard way; the Saudi’s have a global commodity, Beijing doesn’t.  Ironically, the Asian Infrastructure Bank is beginning to look a lot like a Saudi initiative; even Beijing believes that it should have initiated proceedings in search of currency reserve status long ago.  The Communists in Beijing fervently believe that they can sustain themselves by living off monetary velocity.  No thought is given to the cultural mores that sustain the wests growth, like all positivists they believe the empirical is the key to sustained growth, hence bloated government statistics etc. . . like accountants, paper is reality, until its not.

This sustained, willful blindness is called the disease of kings, evidenced in oversize infrastructure projects that beckon growth, they embody an old curse dressed in new clothes.  Without sustained human capital, the rule of law and functioning independent social institutions these boondoggles fail.

When Beijing sought a warm water port in Gwadar Pakistan, it believed that financing a Chinese-Pakistani-Economic-Corridor (CPEC) would secure Beijing’s interests.  It won’t because it can’t.  Here’s the reason why.

Keynesian thought, like all scientism, is harnessed to positivism which ignores both the social base of any demographic claim as well as the principle of subsidiarity.  By ignoring the locals, these boondoggles are tying up client states that cannot secure Beijing’s interest.

The investment in infrastructure can only work if the underlying social base is mobile, if a nation state has a sound currency, a semi-literate industrial base and minimum comity, to say nothing of functioning governing institutions. There are divergent, dispersive social relations that cannot be captured by any positivist claim.  This is best evidenced ethnically and racially inside Pakistan.  But there’s more to CPEC than redundancy in roads.

Pakistan has always sought and fielded favorable big-client nation states to underwrite their geopolitical ambitions.  Islamabad has never gone it alone, like a teenager without sufficient identity development, they’re lost without an adult.

Having skirted a balance of payments crisis to rebuild its foreign exchange reserves, it remains hampered by two distinct features of any praetorian state:  subsidies and taxes.

Pakistan’s governing class is very much like India’s.  They have a woeful compliance rate for taxes and an inability to reform energy (electricity) markets.  This says nothing about the state of terrorism inside Pakistan, but its woefully insufficient tax base sustains Islamabad’s drive for cartel reigning industries.  India’s upper chamber has an identical problem.

With its regional neighbors gaining on exporting textiles, the Punjabi’s that run the praetorian state need to deliver better governing fundamentals if they are to compete and close ever widening gaps in major indexes.  Only 0.6% of Islamabad population pays taxes, nearly 50% of its children never attend school.  Pakistan’s long term development requires more than boondoggles.  The land of the pure doesn’t need hardware, it needs software.

But that misses the point:  the arrogated racial superiority of Punjabi rule hastens any sound movement toward reform.  Like all rent-seekers, its working for them.

When Islamabad’s ruling class finally decides to reform civil-military relations, it can start competing.  Until then, lavish empty corridors is all that will remain.

4e

 

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Rough god Comes Riding. . . Again

Like Fallujah, the Americans defeated a brutal indigenous insurgency in El Salvador, with peace accords signed in the early 90’s, the regime and its ideological cohorts in Havana and Moscow were put to rest.  This region experienced the worlds longest genocide, the Mayan (Guatemalan) civil war began during the Eisenhower administration and would find its peak under Reagan when Jesuits lining the Nicaraguan regime abandoned their pretext of orthodoxy and joined the insurgents.  Revolutionary Marxism has found a near permanent home in Central America.  Like Fallujah, we can’t go back.

These are important cultural, strategic, even geo-strategic fault lines.  Anbar province was pacified.  Now its not.  South America reaching through the Panamanian isthmus northward to Mexico was an ardent Soviet beachhead.  As Taiwan remains a forward staging base for American operations into China, Cuba was for Moscow.  Even still, the romantic revolutionary image of priests and indigenous fighters looming in jungles wasn’t something a President could win.  And yet Reagan got it done.

The El Salvadorian insurgency or C.O.I.N. (counter-insurgency) was deeply brutal, it was also performed at a time when members of Reagan’s National Security Council were split over Congressional advances in Church & Boland amendments usurping our separation of powers doctrine; this is the source of the physical shoving match between Jean Kirkpatrick and Ed Messe.  Both were right; sales to Iranian moderates would be subjected to impeachment proceedings (Meese), while Kirkpatrick’s stalwart defense of conservative Constitutional architecture would ultimately prevail.

Even still, the insurgency cratered El Salvador, the Church, Jesuits and Moscow.  The carnage is with us today.

On January 16, 1992 El Salvador was reborn.  The signing was at the Chapultepec castle in Mexico City.  The formal end of a decade plus civil war was over.  The agreement underwrote El Salvador’s contemporary political order.  But then geostrategic components of neoliberalism changed much that harnessed the region.  Iranian Shia sought and built hegemony beneath Brazil commandeering coca resources moving northwest into the Caribbean.  Failed States grew as did lucrative black markets, child trafficking and more.

El Salvador today is a failed state.  Civil strife is between gangs and government officials. The flaws of main political parties are the heirs to the combatants of previous civil wars. The right wing Nationalist Republican Alliance (ARENA) are seeking to displace leftist Farabundo Marti National Liberation Front (FMLN).  Neither side knows either leadership or statesmanship.  The clash between these two dominant groups doesn’t permit a vision of the country.

Its Pakistan in Central America; a praetorian state.

Whether or not former Roman Catholic sanctuaries; former Spanish dependencies can learn to accommodate the demands of our market based political economy has yet to be known.

What Reagan and the CIA delivered for El Salvador cannot be duplicated.  The wheels are off the governing architecture, we’ll need to wait it out while Iranian infantry alloyed to the dreams of millennial theocratic state move forward to envelop North America.

Let’s hope the American’s can gather together a team and field leadership.

5t

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