Monday, January 29, 2007

Reflections on Holy Land

This soil is cherished. The land upon which I am situated has inspired some of the most divisive conflict in human history. From the Knights of Templar and King Solomon to Canaanites and Hyksos, this turf has instigated bestial battle after senseless battle. What we refer to as Semites are likely a blend of Semitic, Persian, Greek, Roman, Turkic, and North African peoples. The illusory notion that pure blood lines tracing back to some frozen, classical era of national glory is far-fetched at best. However, the nationalistic spell is quite potent for all those who claim to be pure descendants of the land's true occupants. And, while the various peoples have varying levels of justification for their practical and/or ancestral-religious claims to the land, ultimately some utilitarian justice must be attained in order quell the irrational and fantastic sense of holy war that swells ethnic egos, fans sectarian strife, and results in a land that becames violent and thusly much less sacred.

Facts on the ground are a popularly imagined way of sizing up the current situation in the context of who lives where, who has to deal with which problems, and where sensible borders lie. While there is rampant unpopularity of the Israeli dream throughout the world, this national-mythological dream is no less genuine or beneficient than the american dream or the european dream, both of which are also dreams founded on western principles, on the backs of slaves/ssubaltern people, in the colonial process of usurpation and eventually permanent attempts at territorial reclamation on behalf of the conquered folks.

Walls that divide civilizations are convenient so that people understand where they are safest, most comfortable, most useful. Even so, ideas we have about permanence and the objective basis for territorial acquisition, settlement, and negotiation are far from eternal. People tend to remember the immediacy of suffering best. And, in the Israeli-Arab conflict, the crucial periods of intense national suffering occurred a mere three years apart. Full-on justification for the Israeli nation-state arose from the ashes of World War II as a combination of Western guilt and Jewish-Zionist redemption forged the possibility of an ethnic-religious homeland. A mere three years later, the Palestinians underwent what they refer to as the "catastrophe" - Nakba. Whereas Israelis refer to this triumphant occasion as "liberation" or "independence." The dualism inherent in this act of passing on "genocide credit" lives on.

The cycles of violence and dim hopes of permanent peace rage on. While a viable economic and geographic unit exists within Israeli borders, the outlying satelite communities of Palestine, which remain halfway under Israeli rule in a semi-Apartheid arrangement, languish and devolve into chaos. Heaps of rubble, omnipresent checkpoints, dug out trenches, ancient fridges contrast with fresh skyscrapers, booming hi-tech, serene beaches, and most of all, the ability to wield POWER. The ability to force submission, arbitrarily enforce law, and create a relationship where colonial oppression gradually rots the once glorious Zionist enterprise. The result is a post-Zionist reality in which naivete has been shattered. The growing threat of political dissolution on both sides leads to a swollen yet broken fantasy in which corruption and complacency prevent the pragmatic discussion of future potential. What can the present tell us about the complex landscape into which we venture?

Am I even a credible observer if I'm not committed to living in this mess? Are my ideals and/or objectivity not possible if I'm not actually from here and/or planning to remain here for the long term? I have a complex about becoming an ideological crusader or a naive intellectual dabbler who refuses to admit where vested interest lies. Is objective evaluation of the circumstances possible given my background? Perhaps most parties in this conflict are not interested in anything more than a subjective account of reality. Scholarly/journalistic accounts of what's truly transpiring might not be attractive for most people who, on a daily basis, must accept the bare facts on the ground. No simple answers are waiting under a mattress in Gaza. No reality is possible other than that which can actually be fostered, nourished, and developed. There is not yet a will, a collective ambition, or a unified mentality on either side that could result in what has formally and colloquially been referred to as "lasting peace."

No one could possibly know what this place will actually look like in 100 years. It would have been impossible three times over to predict one hundred years ago during the final years of Ottoman occupation what would befall this land just 100 years later. It's rather doubtful that the same blue Stars of David will be majestically flying over this land a century down the road. History has sped up exponentially, and fantasy is a hell of a drug.

Tuesday, January 09, 2007

Ratio - Their Deaths:Our Deaths

The inspiration for this blog entry is the disparity between death and death. By that, I mean the multiple by which we multiply the number of Western deaths to determine the number of enemy deaths that we demand to avenge the quantity of our deaths. Sometimes the ratio is approximately 4:1 when calculating the Israeli and Palestinian deaths during the height of the intifada. During much of the looming wars in Afghanistan and Iraq, the ratio is perhaps 10:1. If one were to calculate the number of deaths on September 11th and subsequently the number that have been the direct result of subsequent American military agitation, the ratio would approach 30:1 A similar number might arise when assessing death tolls during American intervention in Southeast Asia one generation ago.

History tells us that the winners end up recording their version of the action. The thin red line between justice and atrocity easily disappears amidst the fog of war. What is patently obvious about American military superiority during this ostensibly unipolar era is that military planners exact justice based on some premeditated multiple. I cannot be sure of who performs these calculations, but it's obvious that some defense hawk must be churning out stats that justify a hugely disproportionate number of civilian casualties on the other side. Determinists might have you believe that more Iraqis die because of the Arab culture of death. Because Arab Muslims, as faithful followers of Allah, must believe that jihad is the path to salvation. That life is not worth living unless it is sacrified for divine justice and the pursuit of holy struggle. Is this the real reason why more Arabs die in Iraq than Americans? Or, is it because America demands submission to its awesome power and exacts justice based on supposed supremacy and military might, rather than based on liberal democratic principles of human equality and fairness.

For what reason does the arbiter of global legal balance and harmony create a system in which the world cop and superpower kills far more than is deserved? This ratio derives from an intuitive understanding about true global hierarchies and relations of power. Liberal internationalism is a myth in a world order where cops and robbers are interchangeable. Cowboys commit highway robbery of the Indians, all the while masquerading as warriors of God. Crusaders abiding by sacred creeds delude themselves into thinking that they are entitled to kill by a certain multiple of their own dead. Perhaps this ratio is computed by figuring out an acceptable economic value for their own losses.

By this logic, it would seem that perhaps there is some way to measure how much a single human being is worth to his/her society. Given the reality that Western societies have achieved a relatively high standard of living (GDP per capita) as compared with the rest of the world, maybe Western society values human lives more merely as a result of their earning potential. Is this commensurable value the true source of the supposedly advanced Western code of morality? Did the West not value humans as much when per capita lifetime earning potential was so much less? I would say NO - societies did not value individual human lives when life was naturally ended so much easier and faster. Before the advent of complex Western medicine and the strictures of predictable Western society, it could not be guaranteed that one human life would produce a predetermined amount of economic value for his/her society. However, given the developed state of the Western world today, we readily supply a numerical figure for how much is lost when a person dies. This value is understood in explicit terms by military planners, estate attorneys, life insurance assessors, and politicians. Military and civilian deaths have a specific economic variable attached to them that is a function of individual productivity and lifespan. Though I am not terribly knowledgeable about the life insurance business, it seems that such computations are essential in that arena.

Therefore, I can safely conclude that America values a single human life more than a much poorer country due to the fact that an average American has a relatively high productive capacity across his lifespan. This earning potential amounts to approximately $30,000(per year)x40years=$1,200,000. This is about 19 times the lifetime earning potential of an average citizen of Iraq, where the yearly earning potential and GDP per capita are about 1/16 those of America and where life expectancy is indeed a few years less. $1,800(per year)x35years=$63,000. 1.2 million is 19 times this Iraqi lifetime individual earning potential. Thus, perhaps it follows that the death ratio in wartime is around 19:1.

I am not at all advocating this sytem of death ratio computation. I myself do not adhere to brutish and reductionist systems of value that do not account for true human, ecological, and cultural costs. The numbers above are mere observations about perceived differences in the death tolls on both sides of various international conflicts. I cannot prove the origin of these explicit comparisons in the cloistered bunkers of military planners. However, these disparities are real and are a function of perceived differences in military supremacy and also, I believe, of disparities in the realizable economic value of individual human lives. Thus, such numbers appear evidence of my cynical attitude about power projection upon the rest of the world. However, these death ratios have a solid basis in military history and will surely continue to characterize military relations for the foreseeable future.

Katrina's Supremely Eminent Domain

There seem to be a few irrefutable truths that emerge from the Gulf Coast's experiences with the cataclysmic 2005 hurricane season. The most drastic shift in the societal balance of the New Orleans metropolitan region derives from the impossibility of resuming the erstwhile pattern of residential settlement. Given the utter destruction of areas such as the Lower Ninth Ward and the Route 23 corridor down south into the deepest reaches of the boggish Cajun-flavored bayou, it's become clearer that governmental authorities need to step in to prevent building in areas where further human habitation would be too costly. Such a prohibitive cost precludes the cultural or social contribution that continued community presence would offer to the region. At some point, the economic and practical pricetag of shoring up marshlands that have been degraded reaches the point of no return. The levee system has always been minimally comprehensive. It's just that a fully responsible government would insall a levee network that is far more foolproof and impregnable. The flood protection that existed pre-Katrina was no match for a beastly storm, and there's no reason to believe that local, state, or federal government will ever cough up enough funds to construct a system that would protect neighborhoods - whether wealthy or poor, black or white.

Controversies over land use reflect general patterns of sociological conflict between classes who have divergent ideas about how best to organize communities productively. In contemporary American society, there seem to be two opposite phenoms that characterize neighborhood change: gentrification and ghettoization. The first connotes increase in property value, decreasing crime rates, and domestication of chaotic neighborhood elements. The second suggests a decrease in property values, increasing crime rates, and the decline in neighborhood orderliness, generally associated in American cities with the influx of minority or immigrant groups. These contrasting movements are occurring simultaneously in America in different parts of every single city. While some neighborhoods are "going downhill" and "turning bad," yet others are "getting fixed up" or "developed." It seems like people sometimes perceive that cities are either proceeding in one way or the other. This is not the case. There is simultaneous movement in both directions. Certain neighborhoods are being vacated at alarming rates and are doomed to years of dilapidation and not-so-benign-neglect, leading to a state of under-development or regression. At the same time, many other neighborhoods in the same city may face rapid evolution.
These assumptions about "getting better" or "getting worse" exist aside a league of other variables that measure the health of cities, including educational opportunities, job availability, green space, and transportation efficiency. There are thus multiple ways of measuring the constantly evolving truths of urban life. No subjective evaluation is possible for urban fabrics in which competing classes and institutions vie for resources, and each demographic segment is not even wholly classifiable as benefitting from certain patterns of development.

New Orleans and Baltimore are the two primary cases that I'm envisioning as I explore the ramifications of urban geographic shifts. New Orleans, for one, was characterized by the severe indigence and urban blight of many predominantly African-American communities. While it is indeed presumptuous of me, as an outsider, to apply my scholarly understanding of urban change to concrete realities of habitation and development, I nonetheless am in a position to evaluate incipient changes in standard of living and quality of community interaction. The problem, which I do not pretend to be able to solve, hinges upon what most people would consider the worst neighborhoods of these two urban polities. The two examples are the Lower Ninth Ward in New Orleans and the MidEast section of Baltimore. While the conditions of renewal, population transfer, and so-called progress are different in both cases, there are similar fears and aspirations emerging from the clashing camps. The pro-renewal folks cite the ameliorated land use, public good, and progress. Those opposing the gentrification talk about the government-sanctioned destruction of a robust community, inadequate compensation for property owners, and the lamentable transfer of land to more powerfual socioeconomic agents.

While the New Orleans example does not involve the explicit use of eminent domain, the same justifications and methods are employed as in the legally sanctioned imposition of land use statutes. In the MidEast section of Baltimore, Johns Hopkins Hospital has convinced Baltimore City's quasi-governmental economic arm (the Baltimore Development Corporation) to incur the powers of eminent domain in commandeering 10 square blocks of raw ghetto and mostly abandoned blocks of rowhouses for use by nascent biotech research interests. Following the logic of the Supreme Court's ruling about the use of eminent domain in New London, CT, a host of American cities instantly applied this principle to their crusade to seize blocs of subaltern communtities for use by more powerful interests. Again, these processes occur simultaneously to stable, middle-class neighborhood "seizure" by lower class groups. Perhaps there is some metric that demonstrates the overall rate of progress in a city and suggests which way a city is moving in an ostensibly zero-sum development game. Is it ultimately productive, whatever that adjective entails, to destroy the most depressed neighborhoods in order to fulfill broader social goals? Some might argue that sense of community is the only thing that these neighborhoods still possess and that therefore it is not advisable to strip folks of their pride and communal sensibilities. On the other hand, why preserve ghettos that are some of the most perilous and scarred zones in America, for residents and passers-by alike?

Is there an objective arrow of development that captures the transformation of urban space? I don't believe that there is a generalized, simplistic, and objective evaluation of progress, when such an equation would aim to grasp an array of postmodern factors that involve multiple subjectivites and divergent intrepretations of value and public good. Yet, a few eternal political truths remain, as far as I'm concerend. The "less desirable" groups who are displaced by EmDo and gentrification deserve decent housing conditions. This can be achieved by illiberal policies that transcend the market's ability to optimize neighborhood arrangements. The free market usually does not provide profitable opportunities for betterment of heavily minority districts within racially and socioeconomically stratified cities.

Lastly, there are normative questions that attempt to address who exactly ought to live in certain places. Should decisions about residential location and community displacement be made by means of the general will, by nominally democratically-elected councils, or by capitalist elites? Who bears the right to occupy land, either in America or beyond. Psychological attachment to land is indeed a complex phenomenon that involves psychogeographic considerations that delve deep into history and multifaceted community relations. Consideration of public good as it relates to eminent domain must include concurrent articulation of the opposite and simultaneous social processes. This means that we all must realize that "there goes the neighborhood" is a reality for folks at both ends of the spectrum. It is not merely the downtrodden or merely the wealthy who triumph in the perennial exchange of land and population across the urban landscape.

Saturday, January 06, 2007

Popping America's Bubble Economy

Most laypeople are not aware of the precarious state of the American economy. While I won't pretend that my prescience derives from some supernatural ability to foretell economic fate, I am nearly certain that my economic prescriptions will materialize at some point in the near future, rendering much of our standard of living gains worthless. There are six major economic bubbles that are set to pop, essentially simultaneously: the national debt bubble, the trade deficit bubble, the dollar bubble, the consumer debt bubble, the stock market bubble, and the real estate bubble. Each of these bubbles is intimately related to the others, through a complex web of currency, credit, and international financial flows.

Bubble #1

The national debt bubble will reach 10 trillion dollars in a few short years. This absolutely phenomenal level of indebtedness is a deep abyss from which our federal government might not be able to emerge. While in fact, there are many other countries that have a higher ratio of national debt to annual GDP, no country has an absolute debt burden of our size. If a corporation or household managed to run up this kind of debt with blatant disregard for fiscal fundamentals, its credit rating would plummet and lenders would never continually throw good money after bad. Beginning in the 80's, Reaganomics unleashed a sort of deficit spending that relied on a set of economic assumptions that ultimately seem similar to Keynesian principles but were indeed initiated by supply-side beliefs about the importance of cutting income taxes on the wealthy, increasing military spending, and running up huge deficits to stimulate investment and consumer spending. The national debt is indeed astronomical. It served to pave the way for incredibly unprecedented economic growth and stock market expansion through the 80's and 90's, but this created a huge bubble. Real incomes did not rise, but a tremendous influx in foreign capital created a credit environment where spending was facilitated and an illusion of prosperity was fostered.

Bubble #2

The trade deficit bubble is of similarly exorbitant proportions. Like the national debt owed by the federal government, the trade deficit is indicative of the reckless policies of our economic stewards that has encouraged borrowing from eager foreign lenders who believe that extending cheap credit to us will continue to feed our consumerist vices. We contine to receive extremely cheap foreign goods, oil, and credit in exchange for what? The U.S. offers foreign investors a reliable, longterm investment haven. Well, at least it has for several decades, but it is dubious whether the current rate of debt increase will cause investors to tremble and shake in their shoes. They are starting to realize that our creditworthiness is in jeopardy and that America is not producing enough to deserve its affluent standard of living. Ultimately the annual disparity between how much we produce and how much we purchase will not be tenable. The rest of the world, lead by China and Japan, will demand that we repay our debts in the form of our cheapened assets, which will have become so cheap due to the decline in the dollar's value. That repayment will have been necessary due to our illusory belief that we can receive something for nothing. It is true that we have provided a bedrock of stability for international markets and military protection for the system of dollar hegemony. However, we are spoiled by the export-driven economies of East Asia, who have selfishly convinced themselves that lending us mad money to buy their goods is prudent. It was prudent for a while, but now the bubble has become insurmountable.

Bubble #3

The dollar bubble is such that our currency has become overvalued, especially with regard to how much oil, consumer goods, and other currencies we can buy. Although the dollar has clearly been sliding since the invasion of Iraq in 2003, there is still much of correction that has yet to be made. Foreign governments have been propping up the dollar with massive purchases of dollar reserves for their central banks. Japan and China have accumulated trillions of dollars in their vaults in order to protect their dependence on the dollar, all the while becoming even more addicted to dollar hegemony. However, they will only be willing to suffer so long under the yoke of a sinking dollar and a faltering American economy that is unabashedly lacking in economic fundamentals, instead addicted to unadulterated consumption at rates never before witnessed in the history of mankind. As the dollar slides, the day becomes nearer that the American government will default on its debt, forcing hordes of foreign investors to sell off their American assets. Real estate, stocks, and bonds denominated in a declining dollar will appear less and less attractive. American interest rates will need to climb sky high in order to offset the outflow of foreign investment. There will be a massive realignment of global economic power, as Chinese and European purchasing power are readjusted. Our cheap credit will have been erased, and we will be forced to pay down our debts, albeit with devalued dollars and at extremely high interest rates. As the Chinese currency appreciates, Chinese consumers will begin to attain the level of consumption to which they are duly entitled. As stated above, oil, consumer goods, and credit are artificially cheap for Americans at the present time. As a result of a huge imbalance, this state of affairs has lingered for quite some time, allowing for an expansionary American economy that has only been able to keep interest rates down with a consistently massive influx of foreign capital. Domestic lenders would never have been willing to risk this much. However, foreign investors have plunged into dollar hegemony not due to their love of America but as a result of the perceived safety and prosperity of American economic conditions. However, due to gross fiscal mismanagement of the federal government and due to reckless monetary policies that encouraged the extension of absurd amounts of credit, the dollar bubble will pop without remorse. This will drain Americans of huge quantities of wealth, even if it will encourage huge growth in our export and tourism sector. We will be relatively much poorer with regards to our ability to consume foreign goods, travel, and most importantly, oil. Once the dollar falls, energy prices will rise to levels never previously encountered. The artificially happy-go-lucky American economy will be terrestrial once more. And American consumers and investors will be bound by the same constraints that limit all other economic actors across the world. No longer will printing limitless currency be an option for increasing the money supply and extending credit in reaction to the influx of foreign capital. We will be straitjacketed by a new era of exorbitant interest rates, inflationary macroeconomic conditions, and a dreadfully depressed populace whose beloved dollar is relatively powerless.

Bubble #4

The consumer credit bubble has resulted in consumption of otherwordly proportions. Never before has such a mass of human beings been able to "afford" such an incredible level of personal consumption of flat screens, SUVs, Gucci bags, and trips to Cancun. Household savings have never been so doomed, and household debt has never been this astronomical. Americans themselves are not so much at fault, for their economic shepherds have led them astray. The demons of advertising and the barons of industry have successfully attained leadership over a mass of powerless individuals who will consume at the behest of the rulers. The very small increases in actual income are overshadowed by magnificent growth in ability to possess material wealth. Due to the American ability to print dollars and foreign willingness to continue the cycle of trade deficits, the system has propagated itself for quite a while. However, as personal credit card debt and bankruptcy levels reach for the fiscal skies, the system will implode. Foreigners will not sit idly by as America cannot pay back its debts to the rest of the world.

Bubble #5

The stock market has not grown appreciably since 2000, when the internet bubble finished bursting. However, over the course of the 80s and 90s, the market far outstripped the traditional ratio of stock price to earnings. The PE disparities are doomed to implode as well, for this sort of valuation cannot hold in the long term. Although I'm skeptical of attempts to break down all economic activity and transactions into a set of rational choices and scientific fundamentals, I see that the stock market does not reflect the true health and wealth of most companies. Once the dollar slide accelerates and consumption takes a dive, the market will bear the brunt of the slide. The reality of zero growth since the 2000 tech bubble collapse and the PE ratio curse doom the stock market to dip downwards sometime in the near future.

Bubble #6

Real estate prices have climbed 80% in less than a decade, while real income growth has been negligible. The housing market has been booming for these years, with explosive growth in new home sales until this past year. Most cities in the country have experienced a tremendous upswing in housing costs, rendering housing unaffordable for people with average incomes. Due to the reality that incomes have not risen appreciably, it is evident that, without a rise in household savings, it is utterly impossible for Americans to afford such a rise in housing costs without incurring gargantuan debt. Unless it is merely the top third of Americans who are buying new homes and making significantly more per annum (which is a distinct possibility given increasing income disparities and the Bush tax cut program), it would seem that housing prices are far beyond their true economic value. This inflated housing environment is a temporary arrangement. It cannot be sustained. Income growth is mere pennies, mortgage foreclosures are occurring like never before, and borrowers are losing their financial hats as their adjustable rate mortgages become less affordable with inevitably increasing interest rates.

True Inflation, GDP, Unemployment

Although I don't have the hard data to support these assertions, it is empirically obvious that true inflation is much higher than officially reported in the financial media. Due to the through-the-roof increase in housing costs, health insurance premiums, and tuition rates, it would seem that inflation really is far higher than the 2-3% that is attributed to our economy these days. Assuming that true inflation is is around 7%, then real interest rates have been even lower than conventionally understood. Interest rates were kept far too low for such a long time that the economy overheated, rendering Americans in debt up to their boob jobs and collagen lips. Moreover, assuming a much higher rate of inflation, true GDP growth is actually much lower than reported. This is in keeping with the assumption that recent economic conditions have not resulted in betterment of economic fundamentals. Rather, the artificial economic growth created by voodoo economics, unfettered military spending, and abandonment of the welfare state have produced a thoroughly neoliberal and deregulated society where economic indicators do not reflect true economic wellbeing. Even more damning than the misleading inflation figures are the unemployment figures, which declare American unemployment rates to be about half the average European rate. The reason for this is that we only count those who are in the labor force. Persons who have given up looking for a job are thusly considered discouraged workers and are not tallied in the official unemployment rate. True unemployment is probably around 12% or so. True urban unemployment in many places is somewhere between one third and one half of the adult working-age popualation. The official numbers thus don't give us a clear view of what is actually happening in the economy.

Implications for Our Standard of Living

As these 6 bubbles eventually pop, we must be accustomed to increasing foreign ownership of American real estate and corporations. As the value of assets denominated in dollars falls, foreigners (especially Europeans, East Asians, and Middle Easterners) will buy up huge sections of the American economy. I realize that many of these assumptions about the future depend on a relatively simplistic understanding of economic variable but the question of empirical proof cannot be challenged. The true economic fundamentals indicate that our currency will fall and we will be forced to pay off our debts at very high interest rates with dollars that are worth less and less. We will be able to afford much less of what the rest of the world produces, yet it is to be hoped that this realignment produces economic conidtions that correlate with actual economic value. Yet, it is difficult not to confound what ought to happen with what I believe will happen. Do I or other economic agents have a vested interest in hedging for a particular macroeconomic outcome? Are these predictions merely realizable if more people start to believe them and start acting as if they are already true? These questions relate to epistemological debates within economics that are rather complex. Either way, I harbor a significant amount of certainty vis-a-vis the decline of the dollar and the onslaught of euro omnipotence. American consumers will be put in their place due to their consistent endorsement of political and economic leaders who led them astray. They have not listened to the true economic prophets who warned them against such limitless consumption and orgiastic materialism. The human and social costs of the bubbles bursting will be vast. Yet, it is hoped that the realignment will result in increased power of the citizenry over the American government and the financial institutions to which it is inextricably linked: the Fed, IMF, and World Bank. These unaccountable entities need to be brough to justice for their reckless endangerment of American standard of living. Hallelujah!
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