[lit-ideas] Re: The SCUD in a Box Scenario
- From: Eric <eyost1132@xxxxxxxxxxxxx>
- To: lit-ideas@xxxxxxxxxxxxx
- Date: Tue, 28 Feb 2006 03:30:06 -0500
>>Check out the WTO. Read those tedious little
clauses.
Some fairly serious thinkers see the whole WTO
contraption as a jury-rigged Titanic that could
sink or be scuttled very easily. Consider this
article, which draws historical comparisons
between our present situation and the last period
of globalization, just before World War I. However
the author doesn't even begin to factor in the end
of the petroleum economy, the Iceberg in the Room
that no globalists will discuss. -EY
Sinking Globalization
Niall Ferguson
From Foreign Affairs, December 2005 -- WTO
Special Edition
http://www.foreignaffairs.org/20051201faessay84711-p0/niall-ferguson/sinking-globalization.html
<snip>
As the economic parallels with 1914 suggest,
today's globalization shows at least some signs of
reversibility. The risks increase when one
considers the present political situation, which
has the same five flaws as the pre-1914
international order: imperial overstretch,
great-power rivalry, an unstable alliance system,
rogue regimes sponsoring terror, and the rise of a
revolutionary terrorist organization hostile to
capitalism.
The United States--an empire in all but name--is
manifestly overstretched. Not only is its current
account deficit large and growing larger, but the
fiscal deficit that lurks behind it also is set to
surge as the baby boomers retire and start to
claim Social Security and Medicare benefits. The
Congressional Budget Office (cbo) projects that
over the next four decades, Social Security,
Medicaid, and Medicare spending will rise to
consume at least an additional 12 percent of GDP
per year. The cbo also estimates that the
transition costs of President George W. Bush's
planned Social Security reform, if enacted, could
create a budget shortfall of up to two percent of
GDP a year for ten years. Add that to the fiscal
consequences of making the president's first-term
tax cuts permanent, and it becomes hard to imagine
how the country will manage to stem the rising
tide of red ink.
The U.S. empire also suffers from a personnel
deficit: 500,000 troops is the maximum number that
Washington can deploy overseas, and this number is
simply not sufficient to win all the small wars
the United States currently has (or might have) to
wage. Of the 137,000 American troops currently in
Iraq, 43 percent are drawn from the reserves or
the National Guard. Even just to maintain the U.S.
presence in Iraq, the Army is extending tours of
duty and retaining personnel due to be discharged.
Such measures seem certain to hurt re-enlistment
rates.
Above all, the U.S. empire suffers from an
attention deficit. Iraq is not a very big war. As
one Marine told his parents in a letter home,
"compared to the wars of the past, this is
nothing. We're not standing on line in the
open--facing German machine guns like the Marines
at Belleau Wood or trying to wade ashore in
chest-deep water at Tarawa. We're not facing
hordes of screaming men at the frozen Chosun
Reservoir in Korea or the clever ambushes of
Vietcong. We deal with potshots and I.E.D.'s
[improvised explosive devices]."
<snip>
APOCALYPSE WHEN?
A doomsday scenario is plausible. But is it
probable? The difficult thing--indeed the nearly
impossible thing--is to predict a cataclysm. Doing
so was the challenge investors faced in the first
age of globalization. They knew there could be a
world war. They knew such a war would have
devastating financial consequences (although few
anticipated how destructive it would be). But they
had no way of knowing when exactly it would happen.
The same problem exists today. We all know that
another, bigger September 11 is quite likely; it
is, indeed, bin Laden's stated objective. We all
know--or should know--that a crisis over Taiwan
would send huge shockwaves through the
international system; it could even lead to a
great-power war. We all know that revolutionary
regime change in Saudi Arabia would shake the
world even more than the 1917 Bolshevik coup in
Russia. We all know that the detonation of a
nuclear device in London would dwarf the
assassination of Archduke Ferdinand as an act of
terrorism.
But what exactly can we do about such
contingencies, if, as with the Asian tsunami, we
cannot say even approximately when they might
occur? The opportunity cost of liquidating our
portfolios and inhabiting a subterranean bunker
looks too high, even if Armageddon could come
tomorrow. In that sense, we seem no better
prepared for the worst-case scenario than were the
beneficiaries of the last age of globalization, 90
years ago. Like the passengers who boarded the
Lusitania, all we know is that we may conceivably
sink. Still we sail.
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