By Shahab Sabahi
Energy and Environment - Policy analysis research group
The ongoing budget ceiling debate between the US congress and the Obama administration evokes Henry Morgenthau, Roosevelt’s treasury secretary, and his argument. Alike the congress today, Morgenthau opposed the Keynesian government spending idea and advocated the budget balancing and tax cut.
With Morgenthau’s idea the great depression continued until 1941, when the U.S. entered World War II. Under the war circumstances, the US government shouldered massive war spending and it was doubled the Gross National Product. Unemployment was slashed from 14% in 1940 to less than 2% in 1943 as the workforce grew by ten million. The following year after the war, 1946, positive growth effect continued and federal spending remained high at $62 billion. The war supplies made the top priority, regardless of cost and efficiencies.
Eventually the idea of government spending (Keynesian spending) and business regulation won the ground and the term of government stimulation package entered in the political language
Apart of any technical analysis, with paying a careful look in Friday’s job report, it is obvious that Obama’s effort fails to evolve the economy by stimulation.
What went wrong with Obama’s policy? It seems that he tried to stimulate the economy with an increase in government spending, but indeed, he did not.
Dislike Roosevelt’s policy; today there are not any public works projects, defense projects and actually half a million fewer government employees are now out of work since 2008.
Obama’s stimulus much consisted of tax cuts, aid to distressed families and aid to hard-pressed state and local governments and not spending. They were not the kind of job-creation program. As it was circulated between a few economists that that tax cuts would be ineffective and that the proposed spending was inadequate. So it is now proved.
The mortgage relief of $46 billion agreed to spend to help families stay in their homes, however about $2 billion has been spent instead.
It seems we should say:
Dear J.P. Sartre, no longer exists human's ability to think of what is not. Today human cannot think of what exists. We run out of options and turn to dogma .
Public administrators lose their sights and fail to come up with any new ideas. Even they are unfamiliar with what historical trends show. Moreover they are deaf to scholars’ voices and arguments, if they do not favored their policies.
Monday, July 11, 2011
Saturday, July 9, 2011
Why is R. Malthus right? - Population and Economic Growth along with Globalization lead to chaos if…
By Shahab Sabahi
Energy and Environment - Policy analysis research group
The 18th century Britain was experiencing a transition in its society. The feudal system had been slowly giving ways to a new social order. This shift and its consequences forced a large percentage of the British population, such as tenant farmers, to leave their lands. Straight away wool had become a valuable product. Landowners sniffed the profits to be made, declared many of the common lands to be private property, dispossessed the tenants, and began shepherding sheep which was less labor-intensive in comparison with that time farming. So the vast majority of the dispossessed farmers were out of work. and by the 1790s, poverty was out of control.
It was coincident with the French Revolution which had inspired a new group of Utopian writers and philosophers in Britain. They argued that the overwhelming poverty in Britain was due to the riches and their control over social and political institutions. They believed that economic power guided political power, and if the economic power were removed, then the masses would be able to restructure society in a new form, based on logic and reason, which would lead to a better life for all. No one would go hungry, as resources would be allocated according to need, not according to wealth. This course of reason would lead to the elimination of government, law, and private property and a true democratic society would prevail. Humanity would be set on a course of uninterrupted improvement, and eventual perfection. (Jascha Swisher).
In a response to the Utopians Thomas Robert Malthus in his essay “On the Principle of Population”, based on the facts of the poverty, argued the Utopian ideas could never work: there could never be enough food to support such an idealistic society. Human misery and suffering were practically inevitable. To support his hypothesis, he simply pointed out that man would continue to eat, and to reproduce.
In our modern time, Malthus’s theory has not taken seriously as there was little sign of impinging Malthusian population pressures. But it was wrongly interpreted by sociologists, (albeit based on the facts of that day) as they saw population had increased far beyond what Malthus predicted possible, and starvation, in the JUST First World countries at least, is not a significant problem. They wrongly believed that ONLY advancements in agricultural technology had made possible plenty food production, which been able to keep up with the expanding population without overt Malthusian checks.
But it is time to rethink what Malthus’ message tries to deliver. It was not only the technology advancement which improved our life over the late 20s century. We have exploited a large portion of the environment capacity. The environment capacity has already hit its exhausting level. Inevitably the technology advancement has assisted us to efficiently exploit LARGER amount of resources, and obviously fed a large number of population.
Now our civilized modern social system is expanded and nicely fit its external system, means our environment. It reminds me “theory of dissipative structure”.
It implies that disruptive fluctuations would likely increase in intensity until the GLOBAL SYSTEM either reversed to a much simpler model, closer to thermodynamic equilibrium or evolves through a chaotic path into a more stable configuration. Both will be accompanied with the huge amount energy release.
Please check on population growth in South Asia.
Energy and Environment - Policy analysis research group
The 18th century Britain was experiencing a transition in its society. The feudal system had been slowly giving ways to a new social order. This shift and its consequences forced a large percentage of the British population, such as tenant farmers, to leave their lands. Straight away wool had become a valuable product. Landowners sniffed the profits to be made, declared many of the common lands to be private property, dispossessed the tenants, and began shepherding sheep which was less labor-intensive in comparison with that time farming. So the vast majority of the dispossessed farmers were out of work. and by the 1790s, poverty was out of control.
It was coincident with the French Revolution which had inspired a new group of Utopian writers and philosophers in Britain. They argued that the overwhelming poverty in Britain was due to the riches and their control over social and political institutions. They believed that economic power guided political power, and if the economic power were removed, then the masses would be able to restructure society in a new form, based on logic and reason, which would lead to a better life for all. No one would go hungry, as resources would be allocated according to need, not according to wealth. This course of reason would lead to the elimination of government, law, and private property and a true democratic society would prevail. Humanity would be set on a course of uninterrupted improvement, and eventual perfection. (Jascha Swisher).
In a response to the Utopians Thomas Robert Malthus in his essay “On the Principle of Population”, based on the facts of the poverty, argued the Utopian ideas could never work: there could never be enough food to support such an idealistic society. Human misery and suffering were practically inevitable. To support his hypothesis, he simply pointed out that man would continue to eat, and to reproduce.
In our modern time, Malthus’s theory has not taken seriously as there was little sign of impinging Malthusian population pressures. But it was wrongly interpreted by sociologists, (albeit based on the facts of that day) as they saw population had increased far beyond what Malthus predicted possible, and starvation, in the JUST First World countries at least, is not a significant problem. They wrongly believed that ONLY advancements in agricultural technology had made possible plenty food production, which been able to keep up with the expanding population without overt Malthusian checks.
But it is time to rethink what Malthus’ message tries to deliver. It was not only the technology advancement which improved our life over the late 20s century. We have exploited a large portion of the environment capacity. The environment capacity has already hit its exhausting level. Inevitably the technology advancement has assisted us to efficiently exploit LARGER amount of resources, and obviously fed a large number of population.
Now our civilized modern social system is expanded and nicely fit its external system, means our environment. It reminds me “theory of dissipative structure”.
It implies that disruptive fluctuations would likely increase in intensity until the GLOBAL SYSTEM either reversed to a much simpler model, closer to thermodynamic equilibrium or evolves through a chaotic path into a more stable configuration. Both will be accompanied with the huge amount energy release.
Please check on population growth in South Asia.
Thursday, July 7, 2011
Main Characteristics of China's Foreign Policy - Investments and Conflicts
By Shahab Sabahi
Energy and Environment - Policy analysis research group
China claims that its diplomacy aims at safeguarding national interests and promoting world peace
To achieve the former target, China’s diplomacy has well paved the road for Chinese enterprises to take stakes abroad. The world’s second largest economy has vastly invested in the natural resources development projects. It could secure a few oil and gas exploration and development concessions in the Middle East where traditionally was the stronghold of the WEST. China’s Diplomacy helps Chinese enterprises dominate the domestic markets of some host countries and colonize them with the new strands of Chinese skilled and unskilled workforces. China finances public projects across Africa and the Middle East and provides technical supports, albeit not giving philanthropy. Very on time, when the EU were struggling their debt, to diversify cash reserves and influence the EU, China seized the opportunity and jumped into the EU markets. This move made both sides satisfy. In one hand it helps the EU hold breath for a while and bring home some cash. In the other hand China sets up a new save and opens a wider market.
Laughs, smiles, shaking hands, photos, flags waving and press conferences and of course hope of prosperity are the outcomes of China’s Diplomacy.
What about World peace? Is really China’s foreign policy toward the peace?
China has played different games in the Asia-Pacific neighborhood and looks its diplomacy is at odd with world peace.
China antagonizes its neighboring countries. During two incidents on May 26th and June 9th, between Vietnam and China, Vietnamese oil exploration vessels conducting seismic surveys were harassed by Chinese ships. This has brought to a head the long-standing territorial dispute over the areas around the Paracel and Spratly Islands in the South China Sea.
Philippine, Taiwan, Brunei and Malaysia also claim these islands and the discussion on the disputed islands is anxiously ongoing.
In another accident tension grew high when Japanese coast guard detained a Chinese trawler near the disputed Senkaku Islands.
In northern Myanmar, Chinese dam projects caused a fight broke out between the Myanmar Army and the Kachin Independence Organization (KIO) at the Dapein dams, which are being constructed by China’s state-owned Datang Company.
They are a couple of evidences that show China’s policy for Asia is not very much peaceful. Apart from securing natural resources, geopolitical competition is also on China’s agenda. With China rising as a naval power, the current dominant power in the Pacific Ocean, the United States, is looking for ways to maintain its influence. China adopts this provocative approach in Asia to push back and prevent containment of US’s naval expansion.
Energy and Environment - Policy analysis research group
China claims that its diplomacy aims at safeguarding national interests and promoting world peace
To achieve the former target, China’s diplomacy has well paved the road for Chinese enterprises to take stakes abroad. The world’s second largest economy has vastly invested in the natural resources development projects. It could secure a few oil and gas exploration and development concessions in the Middle East where traditionally was the stronghold of the WEST. China’s Diplomacy helps Chinese enterprises dominate the domestic markets of some host countries and colonize them with the new strands of Chinese skilled and unskilled workforces. China finances public projects across Africa and the Middle East and provides technical supports, albeit not giving philanthropy. Very on time, when the EU were struggling their debt, to diversify cash reserves and influence the EU, China seized the opportunity and jumped into the EU markets. This move made both sides satisfy. In one hand it helps the EU hold breath for a while and bring home some cash. In the other hand China sets up a new save and opens a wider market.
Laughs, smiles, shaking hands, photos, flags waving and press conferences and of course hope of prosperity are the outcomes of China’s Diplomacy.
What about World peace? Is really China’s foreign policy toward the peace?
China has played different games in the Asia-Pacific neighborhood and looks its diplomacy is at odd with world peace.
China antagonizes its neighboring countries. During two incidents on May 26th and June 9th, between Vietnam and China, Vietnamese oil exploration vessels conducting seismic surveys were harassed by Chinese ships. This has brought to a head the long-standing territorial dispute over the areas around the Paracel and Spratly Islands in the South China Sea.
Philippine, Taiwan, Brunei and Malaysia also claim these islands and the discussion on the disputed islands is anxiously ongoing.
In another accident tension grew high when Japanese coast guard detained a Chinese trawler near the disputed Senkaku Islands.
In northern Myanmar, Chinese dam projects caused a fight broke out between the Myanmar Army and the Kachin Independence Organization (KIO) at the Dapein dams, which are being constructed by China’s state-owned Datang Company.
They are a couple of evidences that show China’s policy for Asia is not very much peaceful. Apart from securing natural resources, geopolitical competition is also on China’s agenda. With China rising as a naval power, the current dominant power in the Pacific Ocean, the United States, is looking for ways to maintain its influence. China adopts this provocative approach in Asia to push back and prevent containment of US’s naval expansion.
Wednesday, July 6, 2011
Time is up - OECD needs an Economic Structure Reform
By Shahab Sabahi
Energy and Environment - Policy analysis research group
Do economic, social and political systems have potential to function as sustainable systems? Imagine an economic system involves non-renewable stocks or resources. The system is going to run out of the stocks soon. Moreover assume the social system who runs the economic system does not intend to compromise its consumption level. It is also true for the case, when the size of the social system (population) grows quicker than the economic size.
To keep up with two constraints on the ground, the stocks depletion and unchanged consumption level, the economic system may initially improve its efficiency to get more outputs while the amounts of inputs are reduced. In longer term it goes for innovation and adaptation and it diversifies its outputs and inputs in ways to manage the negative impact of the constraints.
When efficiency reaches its maximum, the fluctuation between efficiency and adaptability converges to its minimum level. At this point, the systems are volatile; however they may be at steady states. It is a time to make crucial decision either path below
1. The systems are fundamentally rearranged
2. Refine the patterns through which the systems work and reduce the complexity of them
The economy of developed countries has already arrived at this point. They wish and insist to keep their growth pace high, while budget cuts and cap on their borrowing make priorities on their agendas. It is just an illusion. Policy experts are still confident that they work out policy options (miracle!!) to make both reachable. They simply forget that their economic systems grow big, complex and solid and efficiency improvement, innovation and adaptation will not work. It seems that the policy makers become conservative and close their eyes to reality. They are as rigid as their economic systems.
Time is up and a fundamental reform in economic structure and institution is essential.
Energy and Environment - Policy analysis research group
Do economic, social and political systems have potential to function as sustainable systems? Imagine an economic system involves non-renewable stocks or resources. The system is going to run out of the stocks soon. Moreover assume the social system who runs the economic system does not intend to compromise its consumption level. It is also true for the case, when the size of the social system (population) grows quicker than the economic size.
To keep up with two constraints on the ground, the stocks depletion and unchanged consumption level, the economic system may initially improve its efficiency to get more outputs while the amounts of inputs are reduced. In longer term it goes for innovation and adaptation and it diversifies its outputs and inputs in ways to manage the negative impact of the constraints.
When efficiency reaches its maximum, the fluctuation between efficiency and adaptability converges to its minimum level. At this point, the systems are volatile; however they may be at steady states. It is a time to make crucial decision either path below
1. The systems are fundamentally rearranged
2. Refine the patterns through which the systems work and reduce the complexity of them
The economy of developed countries has already arrived at this point. They wish and insist to keep their growth pace high, while budget cuts and cap on their borrowing make priorities on their agendas. It is just an illusion. Policy experts are still confident that they work out policy options (miracle!!) to make both reachable. They simply forget that their economic systems grow big, complex and solid and efficiency improvement, innovation and adaptation will not work. It seems that the policy makers become conservative and close their eyes to reality. They are as rigid as their economic systems.
Time is up and a fundamental reform in economic structure and institution is essential.
Monday, July 4, 2011
Faith in Democracy – with little expectation
By Shahab Sabahi
Energy and Environment - Policy analysis research group
Somporn Samaithong is disabled. He knows and believes democracy. He exercises his right. He makes his effort to put his name on a ballot by his foot.
This is a photo by [Reuters] at a polling station in the outskirts of Bangkok.
Saturday, July 2, 2011
Life at the end of streets - Bangkok’s streets
By Shahab Sabahi
Energy and Environment - Policy analysis research group
Bangkok is horizontally and vertically expanding. Tall buildings spring out so fast to welcome and accommodate the city new residents. Forward looking service sector organizes new setups to cater the upcoming demand. Expansion, Growth, and Consumption again and again.
To do a survey about changes around the city for a Japanese magazine in Bangkok, my wife and I set out a walk around the central Bangkok. It was just a visual observation of fifteen streets and reporting business changes which might take place across the streets in last year. Imagine streets fill with people, vending carts, and of course cars, where you should struggle your way through crowds while should keep eyes on CHANGES. Although it was a long walk and left us exhausted in the end, it was so much fun. It gave us firsthand knowledge about the central.
Something caught my eyes. Almost all dead-end streets share something in common. They all are massively busy in their way in. Food vendors serve instant, but organic food to their customers. Tourists haggle with junk sellers and noise tests your endurance limit. Just few dozen meters into the dead-end streets, you are taken by surprise. Landscapes are thoroughly changed. Large vintage beautiful villas with all tall green trees come forth and the sound of nature replaces the early miserable noise. Instead of food stench, flowers and scents get off paradise breath, as if you walk in a sacred place. It makes you think about; smiles on faces, smooth silk, delicious foods.
I am wondering, until the next survey in 2012, home many of these vintage houses may be converted to luxurious condos or business offices.
Energy and Environment - Policy analysis research group
Bangkok is horizontally and vertically expanding. Tall buildings spring out so fast to welcome and accommodate the city new residents. Forward looking service sector organizes new setups to cater the upcoming demand. Expansion, Growth, and Consumption again and again.
To do a survey about changes around the city for a Japanese magazine in Bangkok, my wife and I set out a walk around the central Bangkok. It was just a visual observation of fifteen streets and reporting business changes which might take place across the streets in last year. Imagine streets fill with people, vending carts, and of course cars, where you should struggle your way through crowds while should keep eyes on CHANGES. Although it was a long walk and left us exhausted in the end, it was so much fun. It gave us firsthand knowledge about the central.
Something caught my eyes. Almost all dead-end streets share something in common. They all are massively busy in their way in. Food vendors serve instant, but organic food to their customers. Tourists haggle with junk sellers and noise tests your endurance limit. Just few dozen meters into the dead-end streets, you are taken by surprise. Landscapes are thoroughly changed. Large vintage beautiful villas with all tall green trees come forth and the sound of nature replaces the early miserable noise. Instead of food stench, flowers and scents get off paradise breath, as if you walk in a sacred place. It makes you think about; smiles on faces, smooth silk, delicious foods.
I am wondering, until the next survey in 2012, home many of these vintage houses may be converted to luxurious condos or business offices.
Pragmatism in Chinese foreign policy - A sound position in the Greece and West debt crisis
By Shahab Sabahi
Energy and Environment - Policy analysis research group
R. Wolverson, in her post “Could china be the next Greece? “ appeared on Time, lucidly argues that China should watch its fiscal and monetary policy before experiencing a debt crisis. She investigates China’s growth plan and points at the significance of a boost in its domestic consumption. She sees the danger of inflation which hovers the China economy and remarks it as a growth constrain for foreseeable future. For her, China’s focus on favoring the corporate sector particularly on its exporters is a good example that the government controls on deposit yields and lending rates.
It’s true that China has historically had low deposit yields, which were not in favour of households as they are the savers. Inevitably low lending rates helped the growth of corporate sector and factories and leaves Chinese consumers to spend less. For sure this old policy cannot be affordable as China is due to expand its domestic consumption with adaptation of a new policy. It most likely leads the country to plunge in debt. So in short, China will walk the same path as the WEST did over its heydays. It is predictable as this is the nature of growth and governs all evolutionary systems when move along their growth path. No way out.
Wolverson also soundly points out the China huge foreign cash reserve will temporarily help out the country before fully dropping down the debt crisis.
In general, her analysis is satisfactory and China will certainly experience slowdown one day.
But the question is WHEN would it happen to China? and WHAT sort of policy may China adopt to delay the happening of this debt crisis or at least take place with less negative impacts?
The missing part in her analysis is the impact of China’s foreign policy. The recent vist of Chinese officials from the EU explains everything by itself. Diversification, investment in foreign currency but US$, investment and trade with countries who blessed with natural resources and more flexibility in foreign relation are centre of CHINA’s foreign policy. Something the WEST used to be master in and now lost it in favour of dogmatism. Realism fades away from the centre of the WEST’s foreign policy.
Energy and Environment - Policy analysis research group
R. Wolverson, in her post “Could china be the next Greece? “ appeared on Time, lucidly argues that China should watch its fiscal and monetary policy before experiencing a debt crisis. She investigates China’s growth plan and points at the significance of a boost in its domestic consumption. She sees the danger of inflation which hovers the China economy and remarks it as a growth constrain for foreseeable future. For her, China’s focus on favoring the corporate sector particularly on its exporters is a good example that the government controls on deposit yields and lending rates.
It’s true that China has historically had low deposit yields, which were not in favour of households as they are the savers. Inevitably low lending rates helped the growth of corporate sector and factories and leaves Chinese consumers to spend less. For sure this old policy cannot be affordable as China is due to expand its domestic consumption with adaptation of a new policy. It most likely leads the country to plunge in debt. So in short, China will walk the same path as the WEST did over its heydays. It is predictable as this is the nature of growth and governs all evolutionary systems when move along their growth path. No way out.
Wolverson also soundly points out the China huge foreign cash reserve will temporarily help out the country before fully dropping down the debt crisis.
In general, her analysis is satisfactory and China will certainly experience slowdown one day.
But the question is WHEN would it happen to China? and WHAT sort of policy may China adopt to delay the happening of this debt crisis or at least take place with less negative impacts?
The missing part in her analysis is the impact of China’s foreign policy. The recent vist of Chinese officials from the EU explains everything by itself. Diversification, investment in foreign currency but US$, investment and trade with countries who blessed with natural resources and more flexibility in foreign relation are centre of CHINA’s foreign policy. Something the WEST used to be master in and now lost it in favour of dogmatism. Realism fades away from the centre of the WEST’s foreign policy.
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