America Is Not Rome: The Wrong Metaphor & Bad Economic Policy

I can appreciate that America likes to compare itself to ancient Rome. After all they both came from humble beginnings, they grew to become economic, political and military power houses through innovation and technological development (aqueducts, standardized parts, roads, airplanes) and they were both (to a degree) republics. Thomas Jefferson was obsessed with the Romans. Much of the architecture around the US capitol is influenced by Roman design. However they are picking the wrong empire to compare themselves to. America is not Rome, America is 17th and 18th Century France. Why am I making this comparison? Simple, America has a tax system that only benefits an entrenched aristocracy just like France did before its revolution. Also the bad foreign policy initiatives, massive debt and military quagmires are similar but mainly the tax system.

In the United States, dividends (the return on investment generated from stock investment) are taxed at only 15%. The argument is that it would be double taxation for a company and individuals that earn a profit. However, many of the wealthiest Americans generate the majority of their income from dividends. So that means the majority of their income is only taxed at 15% while the most people who earn their living through wages are taxed around 35%. This is why Warren Buffet says he pays a lower tax rate than his secretary. How does this compare with France?

The second estate was the French nobility. They compromised roughly 1.5 percent of the population and paid zero taxes. They benefited the most from a system that was skewed in their favor. Essentially it was the old world’s version of Reaganomics. What exists now in America isn’t so much capitalism but rather a post-industrial serfdom. The over emphasis on supply-side economics has marginalized the majority of spenders through the process of gradually taking them out of the equation. After all, last year the average middle class citizen paid more taxes than Exxon Mobile who reinvested their (45.2  billion dollar) earnings overseas and never paid a cent in tax to the United States government. Of course, its not like corporations have the same legal status as people under the law, oh wait, never mind.

This falls into what is called the paradox of thrift. There is a belief that is common among many that what is good for the home is good for the economy. For example, if we cut household expenses it helps us have more disposable income in the long run. However if this is applied on a grand scale to the economy it actually tends to hurt it. The basics are that income/demand must be equal to output just as savings must be equal to investment. So if we decide to cut government income we must also understand that government output will be cut too. Same as if the government allows for a greater level of savings then people should be increasing their overall investments. Unfortunately this is not the case and what we are seeing is the people who have had their saving increased are hoarding their currency rather than investing or spending.

So what happens when you have a situation where people are not making any investment into a country are extracting the greatest return from everyone else? Well the French had some problems with  this exact situation. The results are actually pretty interesting. The high levels of debt, increased taxation and lack of representation caused the professional elements of society to re-frame their society. Most revolutions are successful when the middle class finally has enough and burns down the status quo. This isn’t likely to happen in the United States. America has systematically destroyed their middle class. Chances are we are about to see the return of feudalism. Feudalism with computers, credit cards, drive throughs and cell phones.

War Games: North Korea, Artillery Screw Ups and Southern Response

If you are familiar with North Korea’s history then you might remember back in August 1976 two American soldiers were killed by North Korean soldiers armed with axes. The event is known as the hatchet incident. It was a move on the part of Kim Jong-Il to consolidate his newly appointed position as the dear leader of the WPK’s Party Central Committee. In 1983; three years after Kim became the head of the politburo, the military commission and the party secretary, there was the Rangoon Bombing. The Rangoon bombing was a terrorist attack in Burma (now Myanmar) where 21 people died including many top level South Korean diplomats and politicians. The primary target was the then president of South Korea.

Fast forward 27 years. A new heir to North Korea has been named. A guy who has lived one of the most sheltered lives in North Korea has been chosen to succeed the dear leader. Kim Jong-Un is according to the propaganda the equivalent in the Korean People’s Army of a four star general. Which is impressive for a guy who has never seen combat, is believed to be about 27 (born the same year as the bombing) and educated in Switzerland. In March a South Korea warship was torpedoed resulting in the loss of 46 sailors. So now we have these artillery strikes on a disputed island in the hands of South Korea. Two Korean military personnel have been killed along with two civilians. The South is taking a hawkish stance to the Northern Saber rattling.

Kim Jong-Un is not leader yet. The Korean Politburo redacted his date of birth to be in 1982 so that he will be 30 years old when 2012 arrives (the expected date where his father will step down). Yet he has very little experience in dealing with international negotiations and needs to be build a reputation among the military and the international community. The primary tool of diplomacy available to the North is the threat of force. It is the primary means to extract aid from the South and Japan. Quick acts of violence and military action further reinforce this strategy. There are two problems now though which seem to face the heir apparent.

One, the South Koreans know he is inexperienced and are now taking a more aggressive approach to dealing with the regime in the North. If they call the North Korean’s bluff and the North stands down they lose their primary diplomatic tactic. Two, the People’s Army; while massive is no match for the modern South Korean force backed up by the US seventh fleet. China has no problems with the defeat of the North. The US and South Korean diplomats have already made gestures guaranteeing a non-threatening unified Korea to the Chinese. China seems to agree if you read the wikileaks diplomatic cables.

So the choices are back down and become nothing more than a paper tiger or start a war which he will lose resulting in the destruction of the state. History repeats itself. North Korea will either be destroyed or will be further isolated, which is something it can no longer afford. I guess the South’s addiction to Starcraft may prove useful soon.

Red Dawn Rising

Red dawn came out in 1984. Besides the first ten minutes, the film was nothing more than a chicken hawk wet dream for the cold war. It is somewhat appropriate that the film was released in 1984 since it represents a major element of neoconservative thinking. At the point that it was released the Soviet Union was a walking corpse of its former self. A paper tiger now used as a means of scaring Americans into supporting defense spending and the Reagan doctrine. It feeds into the myth that a particular nation is inherently good and that it is surrounded by hostile nations/ideologies that must be destroyed because they are evil. After all, war is peace. Last night though, I came across a videogame that is going to be released called Homefront.

Wolverines for Life, Liberty, and the American Way!

I am not saying video games are evil but I want to look at the ideology behind one in particular. Like any other medium, video games can represent ideas and for this matter they are an important art form. If it’s the military fetishism/jingoism of Call of Duty or the right wing paranoia of Homefront, these ideas should be examined.

Essentially the plot of Homefront is that North Korea takes over the entire Korean peninsula then expands its control over the rest of Asia and then somehow successfully occupies the United States. Sounds familiar right? Well it’s cool to see people ripping off Phillip K Dick, but here is what really bothered me about the whole thing. In the trailer there is footage of what I guess is someone at a tea party rally saying how they hate commies. It fits into the paranoid thinking that is popular amongst many in the Tea Party movement that hostile forces in America and abroad are trying to destroy them.

There is this idea amongst the right wing in America that they are under siege. They are being attacked from liberals, Marxists, Muslim-fascist terrorists and the shadowy elite. After 9/11 it was terrorists, during the cold war it was Marxists and socialists and before that it was uppity unions. America loves the underdog and does not want to be perceived as being the country that starts the fight. They like finishing the fight though. However that image is hard to maintain when you are the de facto global military power. So they create myths about themselves.

In order for them to continue to see themselves as being inherently good they have to be able to believe in myths. The myth is that America is the only nation that is good in this world and that all its major institutions must be defended. Leo Strauss (the ideological basis of neo-conservatism) believed that a noble lie was required in order to bring purpose to a shaky society. A permanent state of emergency further embeds this myth within the conscience of America. It is much easier to think that America is threatened by Muslim instead of a few thousand followers of Sayyid Qutb. It is easier to think that powerful and evil communists are standing at the ready to undermine America than actually understand the nuances of economics and geopolitics. The key point here is that there needs to be a simple and monolithic enemy.

So the latest means of propagating the myth of American righteousness is the videogame. Maybe they are just cashing in the right wing feelings located in America at the moment. The martyr mindset of middle America is easily manipulated and can generate a great deal of money.

Liabilities and Treason: Cantor, Israel, The GOP and the Logan Act

The Logan act was passed in 1799 as a means of prohibiting unauthorized US citizens from negotiating with foreign governments. Essentially it is a means of ensuring that there is a singular and cohesive foreign policy for the United States government. Over the last 211 years it has ensured that the US has the ability to speak with one voice to foreign powers. However there have been violations.

Kissinger & Nixon

It is safe to argue that Henry Kissinger violated the act when he undermined the negotiations with North Vietnam when he suggested that they should post-pone agreement till after Nixon was elected president. Charles Wilson violated it when he negotiated with the government of Pakistan to set up the training and equipping of the mujahidin during the soviet-afghan war. However this is not a post about the ramifications of those past events although they do set a precedent that they were not prosecuted for doing so. In fact no one has ever been prosecuted for violating the act.

Eric Cantor

The most recent possible violation though occurred when the new Republican Party whip Eric Cantor held separate negotiations with Benjamin Netanyahu. Eric Cantor intends to have the three billion dollars that the United States gives to Israel every year reclassified and taken out of the hands of the US state department. Instead the US would fund Israel directly through the defence department.  In a meeting between Cantor and Netanyahu, Cantor promised that the GOP “understands the special relationship between Israel and the United States and that the security of each nation is reliant upon the other.” Another key point of the meeting was that Cantor promised to work against the White House on any issue that might seem to be against the interests of state of Israel.

Here are the important factors of that. If the United States begins to directly fund a foreign military force then the overall sovereignty of the foreign state is compromised. This further ties the United States to Cold War era position in the middle east that has become as much a political liability as it as strategic one. Instead of trying to redefine the alliance between the United States, the GOP is opting to go for something that has essentially allowed Israelis to maintain an unwinnable position in both the West Bank and Gaza while over stretching their limited resources. It also goes against the long standing republican concept that foreign policy should be the domain of the administration and not congress. Think back a few years when George W. Bush was in power. When Nancy Pelosi tried to negotiate Syria, the GOP essentially called for her head.

So here is the thing. If Obama wants to reassert his control over the legislative branch he should consider reprimanding Cantor. Make an example of him. Put the fear of god into him as well as his Party. It is only a matter of time before the GOP house begins to actively try to destroy the president like they did to Clinton. So Obama should be proactive. It is clear that the GOP has no desire to bend or compromise on any policy initiative so it becomes important then for them to understand who is charge and that if they try to have a two tier foreign policy that they will be held accountable. The maximum sentence a violation of the Logan act holds is three years, if Obama wants to seek a compromise then he should consider only putting Cantor away for a year and a half. Obama might even regain some of his political dignity in the process and the Israelis might consider that their defence policy should not be tied to a foreign government.