Category Archives: Economy/Economics

Homewreckers and Nationwreckers United

The bestselling Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream is more than a must read, it is a have to immediately read! Glantz covers the beginnings and the rash aftermath of the 2008 Subprime Housing bubble. Even though I have followed the story pretty carefully, Glantz pinpoints things I did not know until reading this important book. Just one example is how the Vulture Capitalists, like present Treasury Secretary Steve Mnunchin and Commerce Secretary Wilbur Ross, to name but a few of the scoundrels currently surrounding Mr. Trump, made fortunes on the taxpayers’ dime. They not only bought failed Subprime specialty banks, as I call them, for pennies on the dollar (only as a favor to this empire), but they got more than special privileges from Uncle Sam.

Before I expand on this, take the example of your local Mom and Pop coffee shop. Let’s say the place was bought a few years ago for $50,k000. In the interim the place was losing business steadily. New investors came in and bought it for $20,000. They then turned around and decided to unload it for the same $20k. Would the government then make up the difference for what it was worth a few years ago and give the sellers the difference of $30,000? No way in Hell! Yet, for Mnuchin and his partners committing, what I call, “a Legal Crime” that is what Uncle Sam did for them — and did it happily to “save the economy.” Glantz explains how when Mnuchin and Co. took over Indy Mac bank in a fire sale, changed its name to One West, and were left holding thousands of toxic mortgages. These were homes that were foreclosed or ready to be foreclosed. One example would be if a home had been assessed at $300,000 and was now worth $100,000, One West would sell the home for the $100,000 and the FDIC would repay them the difference of $200,000. I kid you not! Sheila Bair, the head of the FDIC at the time, actually stated that this was done to save our economy. I guess Sheila never heard of the term Receivership, whereupon Uncle Sam could buy up those banks at the same fire sale prices, keep the people in those homes and reconfigure better rates and terms to keep them from the street. THAT  would save the economy, but THAT  is  a Socialistic practice. Ah, the empire does not like anything Socialistic, as we see with even the rather tame Bernie Sanders version of Socialism.

What Homewreckers also focused on was the newest economic pandemic hitting our nation: The corporate Absentee Landlords. Glantz writes how Steve Schwarzman of the Blackstone Group, and his partner Pete Peterson, bought up foreclosed homes by the tens of thousands and turned them into rental properties. Many times the folks who once owned a home were now tenants in the same house, now under the auspices of their landlord, The Blackstone Group. We are talking of other such corporate vultures who followed suit and today we have this fact: in most major cities throughout America there are more homes as rentals than there are homes owned by individuals who live in them. Of course, this doesn’t even take into account the system, feudalistic as it is, of apartment houses owned by absentee landlords who own thousands of such places. In 2018 The Blackstone Group owned over 11,000 rental apartments In just New York City alone!

Another two individuals who are making fortunes owning slews of low income rental apartments are none other than Sean Hannity and Jared Kushner. One wonders if people who like to watch Sean on his TV show each night, or listen to his dribble on his radio show, are aware that they are tenants of his! As to young Kushner, son of major NYC real estate royalty, son-in-law of President Cheetos and friend of the Zionist-led Israeli government, does he care that his LLC corporation evicts just as easily as Hannity’s LLC does? Of course, with today’s laws that protect the identity of those who actually own these properties, perhaps none of these two landlords’ tenants even know who in the hell owns their residence! Yes, it is good to Make America Great Again for the Super Rich.

The real sin here is that this is all part of a concerted effort to bring us back to a Neo Feudalistic state. Along with the abundance of Part Time, No Union, No Benefits Employment, as the rents go up on where working stiffs have to live, many of us are but a few paychecks from the street, if not there already! Sadly, we know the right-wing half of this Two Party-One Party system, the Republicans, don’t care at all. It’s the other half, the “center right”-wing aka the Democrats, who have done NOTHING to address what Aaron Glantz pinpoints as the Vulture Capitalist takeover of our economy. When Obama took over from the Bush/Cheney gang in 2009, all he did was continue the giveaway to the vultures. Of course Trump, the poster boy of the real Deep State, has actually put these jackals inside his government! And much of the general public is more afraid of — God forbid — Socialism than these cutthroats!

China, Number One Economic Power for Half Decade, Dashes on

The recent China International Import Expo (CIIE) in Shanghai attracted little attention in the Western press but it is one more reminder that China is an economic and trading powerhouse that has surpassed the US. That is right, the word is “surpassed.” The CIIE also serves to remind us that China’s economic power now stands on four mighty pillars.

Americans must understand this clearly, for ultimately all power grows out of economic power, including military power. A confrontational approach to China is therefore extremely dangerous in many ways, and it is being urged on us by almost all of the ruling Elite. The consequences of such confrontation are far different from aggression against Venezuela or Bolivia or Syria or Iraq or Afghanistan — or even Russia.  Failure to comprehend China’s strength could lead to a mortal disaster for the U.S. — and for China and indeed the world, as Henry Kissinger has recently warned us.

This brief essay is written as one small contribution to forestall such a disaster. It provides a thumbnail sketch, a primer, of China’s economic tetrad, that is four pillars which provide a measure of China’s power and how it interacts with the world based on that power. These four are: 1, The GDP in PPP terms; 2, Exports; 3, Imports; and 4, Internal Retail Market. In each case we shall compare them to the U.S. There have been plenty of forecasts predicting the imminent disintegration of China’s economy over the decades, and none has come to pass. So, let us have done with forecasts and concentrate mainly on what we observe before us. In that spirit this essay is for the most part a review of cold, hard facts as they presently exist. It is written by a non-economist and that is one reason it hews to the world as it is, not as it might or might not be, given a host of assumptions, models and, mostly, wishful thinking. I hope it does not insult your intelligence, dear reader. It is only an introduction that hopefully also serves as a wake-up call to the reality of our world.

  • China has the world’s largest GDP in PPP terms and this has been true since November 2014.

Of the four economic pillars we wish to consider, the first and most fundamental is the sheer size of its economy as seen in its Gross Domestic Product (GDP). Here the conventional wisdom views China’s as the number two GDP — but the surprise to most people is that in fact it is number one. China now has the largest GDP in the world in Purchasing Power Parity (PPP) terms, a metric used by the IMF, World Bank and even the CIA for comparing GDPs of different countries. So it is a measure not to be dismissed lightly or dismissed at all. The IMF which provides the most recent data, provided in October 2019, gives the PPP-GDP for China and the US, thus:

China,  $27.3 trillion      U.S., $21.4 trillion

(The number for China does not include Hong Kong, a Chinese city, with a PPP-GDP of $0.491 trillion or Macau with $0.078 trillion. Those two bring China’s total to $27.9 tn.)

Let’s now consider what the PPP metric is in order to see why it is the most meaningful way to compare national GDPs. Briefly the PPP calculation corrects the nominal GDP, the GDP of any country in dollars.  The nominal GDP is calculated simply by using the present currency exchange rate to express a country’s GDP in dollars rather than the native currency, for example the Chinese yuan. The PPP correction of the nominal GDP gives a measure of the actual purchasing ability or purchasing power of the total GDP in a given country. Let’s take a hypothetical example to understand this. Suppose China produced 127 trillion yuan’s worth of goods and services in some year past, hypothetically in 2017. Using an exchange rate of 6.37 yuan per dollar, that amounts to US $11.97 trillion.  That is China’s nominal GDP. Let us say that the United States GDP that year was $19.36 trillion.  These values $11.97 trillion and $19.46 trillion are designated as the “nominal GDPs” for the two countries, and these “nominal” values are the ones we see for the most part in the monopoly media.

But now let us assume that the only good or service produced in the two countries were a Big Mac. In 2017, let us say, again hypothetically, that a Big Mac costs about $3.17 in China but $5.28 in the U.S. using the standard exchange rate for Chinese yuan to U.S. dollars – values not too wide of the actual ones. Thus, Big Macs are cheaper in China – for all sorts of reasons, including different costs of ingredients, labor, transport, etc. So the “Big Mac PPP” ratio for US/China in this example is 5.28/3.17 or 1.67. Now we can calculate the GDPs in PPP terms by applying that ratio to the Chinese nominal GDP. The new values are $19.36 trillion for the US, unchanged, and $19.93 trillion (that is, $11.97 trillion times 1.67) for China. Now China’s GDP, in PPP terms, is the larger of the two. The real PPP ratio used by IMF, World Bank and CIA World Fact Book does not limit itself to Big Macs of course, but uses a “basket” of goods and services to calculate the PPP ratio. In that basket are rockets as well as hamburgers, the wages of factory workers and tech workers as well as those of McDonalds workers, factory robots, as well as hamburger ovens. The PPP-GDP tells us how much more purchasing power is available than might be recognized based solely on simple exchange rates, i.e., nominal GDPs. (In fact, there is a Big Mac PPP index originally suggested by The Economist some years back as a comic device, but it can give some rough qualitative information since the recipe and ingredients for the Big Mac are precisely the same the world over. Universality is a Big Mac characteristic, the same quality claimed by many religions and for Western values.) The PPP metric is the relevant one for measuring the power of an economy since it tells us what can actually be purchased – currency is meaningless unless and until it actually buys something.

Using the PPP metric, China’s GDP surpassed that of the U.S. in November of 2014 according to the IMF, and today stands at approximately 130% of the U.S. PPP-GDP, according to the IMF’s values for 2019 given above.   However, nominal GDP is used by the US and Chinese government routinely in public statements, and there the Chinese GDP is today about 66% of the US GDP.  One suspects that this convention satisfies the Chinese government’s desire not to alarm the US, and the US government’s desire to appear as number one in all things. But barring some unforeseen catastrophe, the same story will soon be repeated with the nominal GDP; China will surpass the US in nominal GDP in about 15 years’ time by my rough calculation. But that is a prediction and we wish to avoid them as much as possible.  Here we wish to emphasize the PPP-GDP as it already exists. The monopoly Western media also use the nominal GDPs of China and the US for comparison, rarely ever alluding to PPP-GDP. So, it is no surprise that relatively few people are aware of the latter.

Furthermore, even at its present “slowed” pace of about 6%, China’s GDP is growing at a much faster rate than that of the US, which is about 2.0%. There is no sign that China’s GDP will fall back to number two and no prediction from a reliable source that it will do so. It is this enormous and rapidly growing GDP that is the fundamental pillar of China’s economic power.

Finally, even though China has the world’s largest gross PPP-GDP, it remains a developing nation. It is now both rich and poor. With nearly 1.4 billion people, its per capita nominal GDP is about one-quarter that of the U.S. China is rich in terms of collective power but relatively poor in terms of individual income. So, China needs to develop its economy much more if it is to meet its stated goal of bringing most of its people into the middle class by 2049, the centenary of its founding. Nevertheless, national economic power depends on total economic output not per capita output. If 1 billion people each contribute a dime or 100 million each contribute a dollar, the end result is sufficient to buy, for example, a $100 million base for satellite launches. For national power, more often than not, it is the total that counts.

In general, the PPP metric is used only for GDP. All values in the following sections are based simply on the exchange rate with no further corrections.

  1. China is the world’s number one exporter.

The second pillar underlying China’s economic prowess is its well-known status as the world’s largest exporter. Here the surprise is that China is ahead, but not by so much as we are often told when China is excoriated for “taking advantage” of the US in international trade. According to the UN’s most recent numbers, those for 2018, the export of goods by the U.S. and China are as follows in trillions of US dollars:

Export of goods (2018):

China, $2.5 trillion     U.S., $1.7 trillion

(This number for China does not include Hong Kong with an export volume of $0.6 trillion, an addition that brings the total to $3.1 trillion.)

But these numbers, the ones usually given, do not include export of services, which provides a much larger addition to the U.S.’s total exports than to China’s

Export of services (2018)

China, $ 0.23 trillion  US, $0.83 trillion

In 2018 the U.S. was far and away the world’s largest exporter of services, whereas China lagged behind the US, UK, Germany and France to be the fifth largest services exporter. And over the period from 2014 to 2018, China’s service exports grew by 6% compared to 11% for the U.S. In the area of service exports China shows definite weakness, perhaps due to its greater language and cultural distance from the West.  India for example, though number 6 in service exports, saw them grow by 30% in the 2014-2018 period.

For those curious about which services are exported, some of the major ones coming out of China are found here and out of the U.S. here. Since the US is primarily a service economy, it is not surprising that services should be about one-third of its total exports. And service exports may provide better jobs than manufacture of products for export. For example, one category of service export is education when foreigners come to the US and pay to go to school. Is it better to be producing more professors or more auto workers? Which provides better income and better quality of life? I see China’s relatively poor performance in this area as a definite weakness, partly due to the level of development of its economy and partly due to its lesser soft power and its linguistic and cultural distance from the West.

Total export of goods and services (2018)

China, $2.7 trillion     US, $2.5 trillion     

Nevertheless, China is number one in exports, and its export growth has proved remarkably resilient. According to the Financial Times of 9/22/2018: “After overtaking Germany as the world’s top exporter of goods in 2009, Chinese exports have grown at an average of 5 per cent a year to $2.26tn in 2017, compared with annual global export growth below 2 per cent.  China’s share of manufacturing exports expanded to 18 per cent from 12 per cent during the past decade — adding to gains made after China’s 2001 entry to the WTO which accelerated the decline of manufacturing employment in developed countries.”

In the same very informative piece the FT also notes that, although the world’s attention has been focused on China’s development of high-tech products by companies like Huawei, the rapid increase in China’s exports has been for “medium level technology such as vehicles and their parts, electrical machinery and construction machinery.” Says the FT: “China is the now dominant producer in medium high-tech industries, with its global share nearly tripling in the past decade to 32 per cent, according to the US National Science Board, surpassing the US in the late 2000s and the EU this decade.”

Moreover, 48% of China’s exports go to countries outside the developed countries of the OECD (Organization for Economic Cooperation and Development) according to the FT. This lessens the influence of the U.S. and its European semi-vassal states over China, and it provides links of all sorts between China and the developing world.  China appears to be far from relying solely on the U.S. market and other Western markets to consume its products.

China is now showing determination to move further up the value chain to high tech and this was formalized in 2015 with the “Made in China 2025” 10 year plan, inspired by Germany’s Industry 4.0. It is this, not the Belt and Road Initiative, that has official Washington wringing its hands.  This program is already well under way as exemplified by Huwei’s 5G technology and growth to number three among sales in smart phones. In this essay, however, we are trying to speak as much as possible about present realities, and China is only at the threshold of high tech production and exports.  But let us note the following from the Nikkei Asian Review in a story titled “China memory chip output zooms from zero to 5% of world total: Mass production to start in 2020 as Beijing guns for technological self-sufficiency.” The opening reads:

Taipei — Beijing’s push for technological self-sufficiency is on the verge of a major breakthrough, with the country’s nascent chip industry on track to produce around 5% of the world’s memory chips by the end of 2020 from virtually zero last year, sources familiar with the matter told the Nikkei Asian Review.

The US restrictions on memory chips and other electronic commodities are apparently driving China to become self-sufficient and thereby becoming a competitor with the U.S. and other developed countries on world markets. One can ask if the U.S. is behaving wisely in cutting off China from importing U.S. electronic products.  It is hard to see how that helps the U.S. balance of payments much less the future market share of U.S. chip makers and manufacturers of other electronic devices. Are the US concerns over “security” real or merely another form of protectionism?

  1. China is the number two importer in the world with the second largest retail market and the largest e-retail market — the CIIE in Shanghai.

China’s rapid ascent as importer is not so well-known as its role as exporter.  However, in November, 2019, the second annual China International Import Expo (CIIE) in Shanghai brought this to the world’s attention. Business people and government officials from all over the world came to Shanghai to pitch their wares to Chinese importers for the burgeoning internal Chinese market. (Recall the first limb of the Chinese economic triad is the ever-growing Chinese economy with growing wages and salaries which generate a huge demand for products.) Perhaps the most noted dignitary was President Macron of France who was urging French wines and other goods on Chinese importers, wine merchants and restauranteurs. He even seduced Xi Jinping into tasting some Gallic grape which they jointly toasted. Of course Xi gave a speech touting, what else, “opening up,” and reminding the visitors that said opening up included a welcome mat for exporters from around the globe to sell to China.

The import volumes of goods for 2018, the latest year for which values are available, are:

China, $2.1 trillion                 U.S., $2.6 trillion

Import of services (2018):

China, $0.5 trillion                 U.S., $0.6 trillion

Total import of goods and services (2018):

China, $2.6 trillion                 U.S., $3.2 trillion

Further, China’s imports are now approaching its exports of goods and services in value ($2.7 trillion, see above) with imports growing at nearly twice the rate of exports.  If this trend continues as seems extremely likely, the Chinese positive trade surplus should diminish, making its exports and imports more balanced and removing some of the fear of its export prowess in the world. More pointedly, China’s growing imports provide the basis for alleviating the trade imbalance that is driving the Trumpian trade war with China. If one looks at what the U.S. exports and what China currently needs, the match is pretty good. China needs agricultural and very high tech products. Cut China off from either and it will find other sources, as it has for agricultural products, or invent and manufacture its own, for example chips for electronic devices. We might ask if that is a wise strategy for the U.S.?

  1. China’s retail market is roughly equal to that of the U.S. and growing faster.

The growth in imports is one sign of more purchasing power in China.  Another is the extraordinary growth in China’s retail market, which is now almost the size of the U.S.’s

Retail sales (2018):

China, $5.2 trillion                 US, $5.3 trillion

The boom in China’s retail market is made by possible by the growth of its ever expanding middle class. As Monica Peart, senior forecasting director of eMarketer, puts it” “In recent years, consumers in China have experienced rising incomes, catapulting millions into the new middle class. The result has been a marked rise in purchasing power and average spending per person.” China’s e-retail market is even more remarkable, far and away the largest in the world. Again eMarketer: “China’s is by far the largest ecommerce market in the world—more than three times the size of the US ecommerce market. China has a 54.7% share of the world’s ecommerce sales, while the US has just 16.6%.” This is also no surprise because the Chinese have become very tech savvy and closely linked to the internet with the links growing closer as the rollout of 5G, already well underway in China, continues rapidly.

Given the size of the Chinese market and its continued growth, virtually no large corporation wants to be shut out of the Chinese market any more than it wants to be shut out of the U.S. market. Not only corporations but the countries in which they reside must take account of this. This gives China enormous influence, an influence built upon the rising prosperity of its people and no longer on their sacrifice.  Moreover, although China has a middle class of about 300 million people, approximately the size of the entire U.S. population, it has 1.4 billion people, and it plans to bring almost all of them into its middle class by 2049, on time for the centenary of the founding of New China.

The immensity of such an economy will make China a power without economic peer on the world stage. And it seems irreversible. barring the prospect of an all-out war in the Pacific. But that is for the future and is beyond the scope of this essay. Predictions are hazardous even in the case of the simplest of systems. China’s present state is quite enough to argue that it should be the object of cooperation not conflict.

China’s triad – the nuclear one.

We would be remiss if after discussion of China’s economic tetrad that we did not also mention China’s nuclear weapons triad. One month before the November CIIE meeting in Shanghai was China’s National Day Parade in Beijing on October 1, celebrating the 70th anniversary of New China’s founding. There on display was China’s nuclear deterrent, the triad — of land-based ICBMs (Intercontinental Ballistic Missiles), SLBMs (Submarine Launched Ballistic Missiles, and Air Launched weapons. The new, advanced ICBMs made their first appearance, providing evidence that China’s nuclear triad is now fully developed. In short China, like Russia and the U.S., can now destroy any country that attempts to make war on it.

But several features of China’s nuclear deterrent deserve notice. As Hong Kong’s South China Morning Post tells us: “The current Chinese nuclear arsenal is estimated to be around 250 warheads in accordance with its ‘minimal deterrence’ strategy, and the country has adopted a “no first use” doctrine towards nuclear missiles…. According to Zhou Chenming, a Beijing-based military commentator, ‘China doesn’t need to keep too many nuclear warheads, and just lets long-range missiles be equipped with the expensive nuclear warheads, because that’s enough for nuclear deterrence.’” Unlike Russia or the U.S., China does not have thousands of nuclear warheads, and unlike the US it has taken “first use” of nuclear weapons “off the table.” China possesses a powerful deterrent but presents no offensive threat.

Conclusion.

What are we to make of this economic and military power of China? In sum, China is a mighty economic power that cannot be destroyed and has no offensive posture toward the U.S. – or any other country. What is the U.S. to do? Is the answer not obvious – in fact inescapable — given the relative power of the two nations? It is time to work out a peaceful arrangement that allows us to live together. The U.S. should do this now while it is possible and before the catastrophe of accidental war, nuclear war, engulfs us all. The clock is ticking.

Kill GDP to Help Save the Planet

There’s a problem with America’s favorite statistic: GDP. It avoids pretty much everything that’s actually, truly, really good for society, including the importance of robust ecology. Still, it’s the biggest measure of what’s happening with the economy and used around the world, even though horribly flawed.

According to some forward thinkers, Gross Domestic Product (GDP), the monetary value of all finished goods and services, is a distortion that needs fixing.

Nobel-winning economist Joseph Stiglitz’s (former chief economist of the World Bank) new book: Measuring What Counts: The Global Movement for Well-Being, The New Press, 2019, tackles the issue by exposing its paramount importance in judging how society gauges prosperity or alternatively the failure of prosperity; e.g., one-in-eight Americans (40 million) is on food stamps during the longest economic expansion in memory and 40-50% of Americans don’t have $400 readily available for emergencies. Is this failed prosperity?

GDP distorts reality by giving an appearance of real economic growth even as living standards stagnate for lower/middling classes. Additionally, GDP totally misses ecosystem collapse by abuse/misuse/overuse, which is only noticed by the general public after it’s way too late when it’s easily noticeable, even by those of low self-esteem that blindly follow tyrannical maniacs. Hmm.

According to Stiglitz:

The world is facing three existential crises: (1) a climate crisis, (2) an inequality crisis and (3) a crisis in democracy… Yet the accepted ways by which we measure economic performance gives absolutely no hint that we might be facing a problem.

Accordingly, politicians see positive GDP numbers, which inspires them to continue with the status quo, meaning they do not focus on key aspects for sustainability, as well as human well-being. GDP does not compute environmental degradation. GDP does not register societal divisions that build tension over massive wealth disparity. And, GDP overlooks calculations of lowered standards of living for the abandoned middle class, as they increasingly deploy mountain-loads of debt to support bogus lifestyles.

According to Pew Research Center:

In real terms average hourly earnings peaked more than 45 years ago.1

Where’s prosperity?

Furthermore, according to Stiglitz:

If growth is not sustainable because we are destroying the environment and using up scarce natural resources our statistics should warn us… If we measure the wrong thing, we will do the wrong thing.

Stiglitz’s new book with co-authors French economists JeaPaul Fitoussi and Martine Durand discusses alternative metrics that more properly account for details like “sustainability” as well as “how people feel about their lives.”

In other words, GDP does not paint a true-life picture. Rather, it’s a wobbly ghostly statistic that measures business activity without consideration for humanity or ecology, begging the question: What’s really important in life?

GDP numbers do not hint at trouble with (1) sustainability of resources, (2) climate crises, or (3) the well-being of the people. Yet, all three are crucial issues under stress like never before.

As an interesting side note, according to Jorgen Randers’ 2052: A Global Forecast for the Next Forty Years — A report to Club of Rome commemorating the 40th anniversary of The Limits to Growth, Chelsea Green Publishing, 2012 — there’s already a shift away from the use of GDP:

The sustainability revolution has already begun… The new paradigm already emerged forty years ago, or perhaps even fifty (with Rachel Carson in 1962). It has spread since, but it is still not mainstream. We have evolved an increased understanding of the need to replace fossil energy, but we have not really embarked on the challenge. And some — even in high places— have started to talk seriously about the need to replace GDP growth with growth in ‘well-being’ as the overriding societal goal. (Randers, p. 13.)

Furthermore, GDP totally misses crucial points supporting societal existence from an ecological perspective, as stated by Christopher O. Clugston’s Blip, Humanity’s 300 Year Self-Terminating Experiment With Industrialism (BookLocker Press, 2019):

The premise of Blip is that increasingly pervasive global nonrenewable natural resource (NNR) scarcity is causing faltering global human prosperity, which is causing increasing global political instability, economic fragility and societal unrest. This scenario will intensity during the coming decades and culminate in humanity’s self-inflicted global societal (species) collapse, almost certainly by the year 2050.

GDP does not calculate, does not represent, and does not hint at the scarcity value associated with overuse/abuse of natural resources accompanied by egregious planet-wide degradation; e.g., the gooey tar sands in Alberta, Canada.2

The missing GDP calculations result in cultural upheaval as people increasingly “hit the streets” in protest, aware that “something is not right.” And, the Canadian tar sands are proof positive that something is way-way-way off course. It literally frightens the daylights out of people that seriously contemplate future prospects for society. It’s an actual horror story in the making in full operation and actually celebrated by neoliberal nincompoops. No wonder kids are protesting in the streets; adults behave like bloody fools blinded to a self-destructive stupidity. Getting oil from gluey tar sands… Really!!! Or, how about fracking with toxic chemicals! Man alive, it’s a wonder there aren’t millions of people in the streets every day.

According to NBC News (12-24-2019):

In 2019, demonstrations around the world, both peaceful and violent, were set off by social unrest over economic instability, government corruption, and inequality.

(1) Hong Kong street protests peaked at over 2 million people (2) Iran 304 people killed in protests over rising gasoline prices and government corruption (3) Iraq huge demonstrations over corruption in government with 354 killed (4) Lebanon a proposed internet fee brought hundreds of thousands to protest in the streets seeking economic reform and an end to government corruption (5) Chile a million protestors hit the streets sparked by a subway fare increase of 4 cents but really opposed to abuses by government, 27 dead so far (6) Columbia tens of thousands protested the government (7) Bolivia at least 17 killed as  indigenous people protested a right-wing coup, tossing out Bolivia’s most effective president of all time for the people, Evo Morales (8) the Yellow Jacket movement in France continues to protest week-by-week over pension reform (9) anti-government protests are prevalent in Pakistan (10) Russian street protestors stepped up opposition against the government (11) India huge protests against the new anti-Muslim law (12) huge protests in Ecuador over austerity measures (13) Catalonians in Spain hit the streets in protests and want to break away from the central government (14) Indonesia thousands hit the street to protest a new criminal code outlawing sex outside of marriage (15) Netherlands protesting farmers on tractors plugged up 700 miles of highways to protest Dutch parliament claims that agriculture is responsible for high emissions (16) Peruvians blockaded copper mines after larger protests against the corruption of government (17) Haiti massive demonstrations over shortages of food, oil, and electrical power, 30 dead.

Young people that see the future melting away into viscous piles of neoliberal crap lead the protests. The common themes are injustice, government corruption, unemployment, poverty, lack of government services, and a failure to respect the environment, as they rage against the traditional political class.

It’s likely only just begun.

  1. “For Most U.S. Workers, Real Wages Have Barely Budged in Decades”, Pew Research Center, August 7, 2018.
  2. This is the World’s Most Destructive Oil Operation-and it’s Growing“, National Geographic, 2019.

Paul Volcker’s Long Shadow

Former Federal Reserve Chairman Alan Greenspan called Paul Volcker “the most effective chairman in the history of the Federal Reserve.” But while Volcker, who passed away December 8 at age 92, probably did have the greatest historical impact of any Fed chairman, his legacy is, at best, controversial.

“He restored credibility to the Federal Reserve at a time it had been greatly diminished,” wrote his biographer, William Silber. Volcker’s policies led to what was called “the New Keynesian revolution,” putting the Fed in charge of controlling the amount of money available to consumers and businesses by manipulating the federal funds rate (the interest rate at which banks borrow from each other). All this was because Volcker’s “shock therapy” of the early 1980s – raising the federal funds rate to an unheard of 20% – was credited with reversing the stagflation of the 1970s. But did it? Or was something else going on?

Less discussed was Volcker’s role at the behest of President Richard Nixon in taking the dollar off the gold standard, which he called “the single most important event of his career.” He evidently intended for another form of stable exchange system to replace the Bretton Woods system it destroyed, but that did not happen. Instead, freeing the dollar from gold unleashed an unaccountable central banking system that went wild printing money for the benefit of private Wall Street and London financial interests.

The power to create money can be a good and necessary tool in the hands of benevolent leaders working on behalf of the people and the economy. But like with the Sorcerer’s Apprentice in Disney’s “Fantasia,” if it falls in the wrong hands, it can wreak havoc on the world. Unfortunately for Volcker’s legacy and the well-being of the rest of us, his signature policies led to the devastation of the American working class in the 1980s and ultimately set the stage for the 2008 global financial crisis.

The Official Story and Where It Breaks Down

According to a December 9 obituary in The Washington Post:

Mr. Volcker’s greatest historical mark was in eight years as Fed chairman. When he took the reins of the central bank, the nation was mired in a decade-long period of rapidly rising prices and weak economic growth. Mr. Volcker, overcoming the objections of many of his colleagues, raised interest rates to an unprecedented 20%, drastically reducing the supply of money and credit.

The Post acknowledges that the effect on the economy was devastating, triggering what was then the deepest economic downturn since the Depression of the 1930s, driving thousands of businesses and farms to bankruptcy and propelling the unemployment rate past 10%:

Mr. Volcker was pilloried by industry, labor unions and lawmakers of all ideological stripes. He took the abuse, convinced that this shock therapy would finally break Americans’ expectations that prices would forever rise rapidly and that the result would be a stronger economy over the longer run.

On this he was right, contends the author:

Soon after Mr. Volcker took his foot off the brake of the U.S. economy in 1981, and the Fed began lowering interest rates, the nation began a quarter century of low inflation, steady growth, and rare and mild recessions. Economists attribute that period, one of the sunniest in economic history, at least in part to the newfound credibility as an inflation-fighter that Mr. Volcker earned for the Fed.

That is the conventional version, but the stagflation of the 1970s and its sharp reversal in the early 1980s appears more likely to have been due to a correspondingly sharp rise and fall in the price of oil. There is evidence this oil shortage was intentionally engineered for the purpose of restoring the global dominance of the U.S. dollar, which had dropped precipitously in international markets after it was taken off the gold standard in 1971.

The Other Side of the Story

How the inflation rate directly followed the price of oil was tracked by Benjamin Studebaker in a 2012 article titled “Stagflation: What Really Happened in the 70’s”:

We see that the problem begins in 1973 with the ’73-’75 recession – that’s when growth first dives. In October of 1973, the Organisation of Petroleum Exporting Countries declared an oil embargo upon the supporters of Israel – western nations. The ’73-’75 recession begins in November of 1973, immediately after. During normal recessions, inflation does not rise – it shrinks, as people spend less and prices fall. So why does inflation rise from ’73-’75? Because this recession is not a normal recession – it is sparked by an oil shortage. The price of oil more than doubles in the space of a mere few months from ’73-’74. Oil is involved in the manufacturing of plastics, in gasoline, in sneakers, it’s everywhere. When the price of oil goes up, the price of most things go up. The spike in the oil price is so large that it drives up the costs of consumer goods throughout the rest of the economy so fast that wages fail to keep up with it. As a result, you get both inflation and a recession at once.

… Terrified by the double-digit inflation rate in 1974, the Federal Reserve switches gears and jacks the interest rate up to near 14%. … The economy slips back into the throws of the recession for another year or so, and the unemployment rate takes off, rising to around 9% by 1975. …

Then, in 1979, the economy gets another oil price shock (this time caused by the Revolution in Iran in January of that year) in which the price of oil again more than doubles. The result is a fall in growth and inflation knocked all the way up into the teens. The Federal Reserve tries to fight the oil-driven inflation by raising interest rates high into the teens, peaking out at 20% in 1980.

… [B]y 1983, the unemployment rate has peaked at nearly 11%. To fight this, the Federal Reserve knocks the interest rate back below 10%, and meanwhile, alongside all of this, Ronald Reagan spends lots of money and expands the state in ’82/83. … Why does inflation not respond by returning? Because oil prices are falling throughout this period, and by 1985 have collapsed utterly.

The federal funds rate was just below 10% in 1975 at the height of the early stagflation crisis. How could the same rate that was responsible for inflation in the 1970s drop the consumer price index to acceptable levels after 1983? And if the federal funds rate has that much effect on inflation, why is the extremely low 1.55% rate today not causing hyperinflation? What Fed Chairman Jerome Powell is now fighting instead is deflation, a lack of consumer demand causing stagnant growth in the real, producing economy.

Thus it looks as if oil, not the federal funds rate, was the critical factor in the rise and fall of consumer prices in the 1970s and 1980s. “Stagflation” was just a predictable result of the shortage of this essential commodity at a time when the country was not energy-independent. The following chart from Business Insider Australia shows the historical correlations:

The Plot Thickens

But there’s more. The subplot is detailed by William Engdahl in The Gods of Money (2009). To counter the falling dollar after it was taken off the gold standard, U.S. Secretary of State Henry Kissinger and President Nixon held a clandestine meeting in 1972 with the Shah of Iran. Then, in 1973, a group of powerful financiers and politicians met secretly in Sweden to discuss how the dollar might effectively be “backed” by oil. An arrangement was finalized in which the oil-producing countries of OPEC would sell their oil only in U.S. dollars, and the dollars would wind up in Wall Street and London banks, where they would fund the burgeoning U.S. debt.

For the OPEC countries, the quid pro quo was military protection, along with windfall profits from a dramatic boost in oil prices. In 1974, according to plan, an oil embargo caused the price of oil to quadruple, forcing countries without sufficient dollar reserves to borrow from Wall Street and London banks to buy the oil they needed. Increased costs then drove up prices worldwide.

The story is continued by Matthieu Auzanneau in Oil, Power, and War: A Dark History:

The panic caused by the Iranian Revolution raised a new tsunami of inflation that was violently unleashed on the world economy, whose consequences were even greater than what took place in 1973. Once again, the sharp, unexpected increase in the price of crude oil instantly affected transportation, construction, and agriculture – confirming oil’s ubiquity. … The time of draconian monetarist policies advocated by economist Milton Friedman, David Rockefeller’s protégé, had arrived. The Bank of England’s interest rate was around 16% in 1980. The impact on the economy was brutal. …

Appointed by President Carter in August 1979, Paul Volcker, the new chief of the Federal Reserve, administered the same shock treatment [drastically raising interest rates] to the American economy. Carter had initially offered the position to David Rockefeller; Chase Manhattan’s president politely declined the offer and “strongly” recommended that Carter appeal to Volcker (who had been a Chase vice president in the 1960s). To stop the spiral of inflation that endangered the profitability and stability of all banks, the Federal Reserve increased its benchmark rate to 20% in 1980 and 1981. The following year, 1982, the American economy experienced a 2% recession, much more severe than the recession of 1974.

In an article in American Opinion in 19179, Gary Allen, author of None Dare Call It Conspiracy: The Rockefeller Files (1971), observed that both Volcker and Henry Kissinger were David Rockefeller protégés. Volcker had worked for Rockefeller at Chase Manhattan Bank and was a member of the Trilateral Commission and the Council on Foreign Relations. In 1971, when he was Treasury undersecretary for monetary affairs, Volcker played an instrumental role in the top-secret Camp David meeting at which the president approved taking the dollar off the gold standard. Allen wrote that it was Volcker who “led the effort to demonetize gold in favor of bookkeeping entries as part of another international banking grab. His appointment now threatens an economic bust.”

Volcker’s Real Legacy

Allen went on:

How important is the post to which Paul Volcker has been appointed? The New York Times tells us: “As the nation’s central bank, the Federal Reserve System, which by law is independent of the Administration and Congress, has exclusive authority to control the amount of money available to consumers and businesses.” … This means that the Federal Reserve Board has life-and-death power over the economy.

And that is Paul Volcker’s true legacy. At a time when the Fed’s credibility was “greatly diminished,” he restored to it the life-and-death power over the economy that it continues to exercise today. His “shock therapy” of the early 1980s broke the backs of labor and the unions, bankrupted the savings and loans, and laid the groundwork for the “liberalization” of the banking laws that allowed securitization, derivatives, and the repo market to take center stage. As noted by Jeff Spross in The Week, Volcker’s chosen strategy essentially loaded all the pain onto the working class, an approach to monetary policy that has shaped Fed policy ever since.

In 2008-09, the Fed was an opaque accessory to the bank heist in which massive fraud was covered up and the banks were made whole despite their criminality. Taking the dollar off the gold standard allowed the Fed to engage in the “quantitative easing” that underwrote this heist. Bolstered by OPEC oil backing, uncoupling the dollar from gold also allowed it to maintain and expand its status as global reserve currency.

What was Volcker’s role in all this? He is described by those who knew him as a personable man who lived modestly and didn’t capitalize on his powerful position to accumulate personal wealth. He held a lifelong skepticism of financial elites and financial “innovation.” He proposed a key restriction on speculative activity by banks that would become known as the “Volcker Rule.” In the late 1960s, he opposed allowing global exchange rates to float freely, which he said would allow speculators to “pounce on a depreciating currency, pushing it even lower.” And he evidently regretted the calamity caused by his 1980s shock treatment, saying if he could do it over again, he would do it differently.

It could be said that Volcker was a good man, who spent his life trying to rectify that defining moment when he helped free the dollar from gold. Ultimately, eliminating the gold standard was a necessary step in allowing the money supply to expand to meet the needs of trade. The power to create money can be a useful tool in the right hands. It just needs to be recaptured and wielded in the public interest, following the lead of the American colonial governments that first demonstrated its very productive potential.

This article was first posted on Truthdig.com.

Imperialism is Like a Multilevel Marketing Company, with its Own Military

You can call it the way the world works, capitalism abroad, or simply the system. But whatever you call it, it is interesting how much the international economic structure operates like multilevel marketing.

In a typical MLM company — Amway remains the best known example, but there are many others — products are sold, but so is an ideology. This ideology is the key to generating profit for the capitalists who started the corporation and a few lucky early insiders. While Amway does sell health, homecare and beauty merchandise, its most important product is the idea that anyone who joins the company can become rich. Selling that notion is what keeps every successful MLM company going. It’s what attracts new recruits, who soon learn that the best way to make money is by enticing more new recruits and on and on. A percentage of the revenue generated by every recruit goes to the person who recruited her and on and on back up the pyramid to the founders of the company.

If you get in early enough it is possible to get rich, but the further one gets from the top of the pyramid the more difficult it becomes to make any money at all and it may even cost people thousands of dollars to learn this reality. In fact, Canada’s “national newspaper” recently ran a story by journalist Ellie Flynn with the headline “Multilevel marketing sells a dream. Don’t buy it” that reveals this and more.

Flynn writes about the number of people involved: “In my home country, Britain, there are more than 400,000 people signed up to MLMs. In Canada, this number rises to 1.3 million, while in the United States, there are more than 18 million distributors. Worldwide, there are an astonishing 116 million people involved.”

Interestingly, in my over 50 years of reading and working for newspapers I don’t recall ever seeing an equivalent story about the world economic system (WES) even though it works in much the same fashion as MLMs and over 7.5 billion people are involved.

Multilevel marketing includes all sorts of ways for the originator of the scheme to make money off new recruits including: seminars, classes, conferences, books, videos, huge mark-ups on products, a percentage of all sales, etc. Capital flows back to originators (primarily North America and Europe) of the world economic system from franchise agreements, patents, copyrights, loans, currency fluctuations, driving down wages, service agreements, profit repatriation (often to a tax haven) and many more means, legal and illegal.

(The Organization for Economic Co-operation and Development [OECD] offers countries advice on how to deal with at least 10 ways mining companies cook their books and that’s just one industry.)

Just like the vast majority of people who try to get rich through multilevel marketing fail, so too will countries who play by the rules of the world economic system (WES).

Why do poor and “less developed” countries accept all this? Why don’t they set off on an independent path of national self-development that in fact has been the means by which almost every successful capitalist country (including newcomers like China, South Korea, Singapore and Japan) built its economy to the point it could actually compete and win in the world economy.

A big part of the reason is that just like Amway the world economic system sells an ideology to go along with its products. The basic notion is exactly the same as Amway’s. “You too can become rich if you just follow our system.” And of course a few people in every poor country do well enough from promoting the world economic system that the idea of becoming rich can be believable enough, at least for some time. Equally important is the principle, embedded in the ideology of Amway and the WES , that if you fail it is your fault. It is never the system’s fault. “You just didn’t work hard enough or follow the rules closely enough. You need to try harder.” That message is everywhere.

While Albert Einstein’s quote, “the definition of insanity is doing the same thing over and over again, but expecting different results,” [except Einstein never said that — DV ed] may seem to apply, there is another reason people choose to blame themselves rather than the system.

While the carrot of getting rich is awfully enticing, there is something else. The system gives countries a choice: Eat the carrot, even if it’s not your favourite veggie, or face the stick. Like Iraq, Iran, Venezuela, Cuba, or Bolivia.

Imagine that Amway also had the largest military force in the world. What would it do? Pretty much exactly what the USA and its WES “allies” do. Protect its profits and way of doing business. Threaten any “unfair” competitors. Destroy enemies often enough that any potential competitors or places that just wanted to do things a different way would be leery of crossing you. Or course enticing people by the promise of getting rich would always be the preferred method of staying on top, but when that doesn’t work …

The reality is Amway does have the largest military force in the world. And so does GM, GE, Amazon, Volkswagen, Microsoft, Unilever, Royal Bank of Canada, Mitsubishi, Apple and many other huge corporations. It is the USA/NATO armed forces. And along with that comes the world’s most powerful cyberwarfare capabilities, “intelligence” services, and propaganda machine. If you blame the system instead of yourself, you may face all that.

Neoliberal imperialism is multilevel marketing, exploitation, the rich getting richer and militarism.

And it is real fake news when the media tries to tell us otherwise.

Neoliberalism’s Dirty Little Secrets Backfire

Nick Hanauer, a self-professed capitalist billionaire, spoke at a TED conference only recently. He exposed neoliberalism’s brand of capitalism getting away with murder in plain sight.

Mr. Hanauer described himself:

After a 30-year career in capitalism spanning three dozen companies, generating tens of billions of dollars in market value, I’m not in the top one percent (1.0%), I’m in the top zero-point-one percent (0.1%) of all earners… rich capitalists like me have never been richer… how do we manage to grab an ever-increasing share of the economic pie every year?

According to Hanauer:

It all comes down to just one thing: Economics.

There was a time, for example in the 1950s, when economics worked on behalf of everybody in the country. At the time CEO pay was 20xs the average worker. In stark contrast, today’s neoliberal brand of capitalism works only for big corporations and billionaires, nobody else, and CEO pay has skyrocketed to 360xs rank-and-file worker pay.

Neoliberalism is a made-to-order-get-rich-scheme but reserved for the already rich. No outsiders allowed, other than the few that suddenly appear out of nowhere, like apparitions coming to life out of Silicon Valley.

As a consequence of neoliberal ideology over the past 30-40 years, in the USA alone, according to Hanauer: “The top 1% has grown 21 trillion dollars richer while the bottom 50% have grown 900 billion dollars poorer.”  That pattern of widening inequality has largely repeated across the world. It is the Grand Slam of Neoliberalism, and it just keeps on going and growing.

Politically, the neoliberal agenda is a kissing cousin to Republican talking points, arguing (1) raising taxes always kills growth. And, (2) any form of government regulation is inefficient. And, (3) raising wages always kills jobs, as businesses cannot afford to pay higher wages. These timeworn myths have hung in there like some kind of universal stamp of Good-Housekeeping approval ever since the Reagan administration. But, all three are stale myths, meaningless, false, make-believe storylines.

Not only that, neoliberalism’s knee-jerk fix for middle class struggles to cope with stagnate wage growth for 40 years is: (1) globalization (code word for moving jobs to shores of the lowest common wage denominator) and (2) more austerity (code word for cutting social programs to help finance tax cuts for the rich). According to Hanauer, the twin forces of globalization and austerity were the problem in the first instance, undermining the U.S. middle class.

Therefore, with neoliberalism ingrained into the world economic fabric, as it beats down labor while celebrating corporate over-lordship’s legal status as a “person”, what is a society to do?

Hanauer argues that America needs new economics. Toss out neoliberalism. For starters, he claims a growing number of academics and practitioners have concluded that neoliberal economic theory is “dangerously wrong.” Thus, for decades “bad economic theory” has resulted in massive inequality throughout the world accompanied by disruptive political instability. As such, neoliberalism is inherently self-destructive and, by default, it morphs into a replica of 18th century absolutism with power vested in one or more rulers or despotism as a final remaining beachhead for its survival.

Further to the point, neoliberalism is a “backwards approach to economics because it isn’t capital that creates economic growth.” It’s people that create economic growth. And, “it isn’t self-interest that promotes the public good.” It’s reciprocity. And, “it isn’t competition that creates prosperity.” It’s cooperation. Yet, neoliberalism is tethered to capital creation as the engine for growth, self-interest as the fuel for growth, and competition as the determinate of success.

Hanauer’s list of mistaken neoliberal assumptions:

  1. The market is an efficient equilibrium system, which means if one thing like wages goes up, then something else in the same economy like jobs must go down. Not true. In 2015 in Seattle when they passed the first $15/hr. minimum wage, the neoliberals “freaked out.” But, thereafter the unemployment rate fell dramatically. Restaurant businesses in Seattle, which neoliberal advocates said would collapse, boomed (restaurant employment increased by 24,000, post 2015). More people with more money to spend increased businesses across the board. Seattle’s $15/hr. minimum wage lifted all boats.
  2. The price of something is always equal to its value. Which means if one person earns fifty thousand per year and another person earns fifty million per year; person number two produces 1,000 more value. However, people are not paid what they are truly worth. In point of fact, they are paid based upon “the power they have to negotiate.” Workers shrinkage of a share of GDP is not because workers have become less productive. It’s because employers have become more powerful politically amidst a tornado of behind the scenes manipulations cutting labor off at the knees, as well as disgraceful examples of union busting by the nation’s highest court, e.g., Janus v. AFSCME taking aim at the heart of public-sector unions in America, by a 5-4 decision the C0urt ruled against union fees in the public sector as a violation of the First Amendment right to free speech, overturning 40 years of established law.
  3. Humans are homo economicus, meaning they are (1) perfectly selfish, (2) perfectly rational, and (3) relentlessly self-maximizing. This goes to the heart of a crude, cruel neoliberal economics. But, homo economicus fails, as it is both “morally corrosive and scientifically wrong.” In contrast, the latest empirical science describes humans as (1) highly cooperative, (2) reciprocal, and (3) intuitively moral creatures.

A new economics brings innovation as the process by which we solve human problems, and it involves five rules:

  1. Successful economies are not jungles where survival of the fittest rules. Rather, they’re gardens. Thus, markets, like gardens, must be tended. The market is a vehicle to realize innovation and prosperity, but markets left untended, unconstrained by social norms or without regulations, create more problems than they solve.
  2. Inclusion creates economic growth. So, including more people in more ways brings growth.
  3. The purpose of the corporation is not solely to enrich shareholders. The purpose of the corporation should be to improve all stakeholders, including customers, workers, communities, and shareholders.
  4. Greed is not good. “Being rapacious does not make you a capitalist; it makes you a sociopath.”
  5. The laws of economics involve the principals of “choice.” Neoliberal economics has sold the public on the idea that neoliberalism is immutable, natural law and unchangeable. In fact, economics are social norms and constructive narratives based upon those norms that offer alternative choices. People have a choice but don’t realize it.

The credibility of neoliberalism’s faith in unfettered markets as the surest road to shared prosperity is on life-support these days. And well it should be. The simultaneous waning of confidence in neoliberalism and in democracy is no coincidence or mere correlation. Neoliberalism has undermined democracy for 40 years.1

According to Stiglitz, the only way forward to “save our planet and our civilization” is a rebirth of history by revitalizing the Enlightenment and recommitting to its essential value propositions of freedom, respect for knowledge, and democracy. After all, the Enlightenment provided the philosophical basis of the American Revolution as a blueprint for a democratic society. It’s the rebirth of history that Stiglitz prescribes to fix the failures of neoliberalism.

Otherwise, very powerful political consequences of the neoliberal world will continue on a path of self-destructive absolutism with people ultimately pushing back by hitting the streets, like today in Chile, Hong Kong, France, Iraq, Haiti, Lebanon, Spain, Bolivia, and Ecuador.

What do these global protests have in common?

In all cases, price increases for key basic services have proven to be the final straw for people who have long felt shut out of opportunity. For example, in Ecuador protestors stormed parliament over discontinuation of decades-old fuel subsidies as part of an austerity program to cut public spending, insisted by the IMF. A hike in transport prices also sparked massive protests in Chile. In Lebanon a plan to tax WhatsApp prompted wider protests about general economic issues of inequality and corruption, an interesting feature found in all street protests these days as single issues blossom into full-blown universal demands for a fair share.

As it happens, the world has become a tinderbox as seemingly minor changes in policies like transport taxes prompt massive demonstrations. Ordinary citizens hit the streets in outpourings of years of pent-up economic oppression, tired of “just getting by” or “not getting by at all.” It’s a universal threat that neoliberal self-immolation follows continual adherence to a stale emphasis on globalization and austerity.

  1. Joseph E. Stiglitz, “The End of Neoliberalism and the Rebirth of History,” November 4, 2019.

China’s vision for the future is “Give Peace a Chance”

China’s vision for the future is “Give Peace a Chance”. It is also the title of one of John Lennon’s most prominent songs. It became the anthem for the anti-war movement, at the time of the US-waged war against Vietnam. John Lennon was a peace activist. No wonder he was ostracized, considered enemy number one by the US establishment, was followed and surveyed by the FBI – and was eventually assassinated. October 9, 1940 is his birthday.

“Give Peace a Chance” is the key motto for China’s peace philosophy throughout her 70-years Revolution, often against challenging situations, especially in the last decade with almost permanent aggressions of one kind or another by the United States and their coopted allies in Europe. China is a tremendous challenge for the west, not only because of her sheer size and economic and technological advances, but also because China seeks peaceful cooperation and development around the globe.

The West does not seek Peace. Peace is bad for business. War is good and profitable, as such renown mainstream journals as the Washington Post have openly propagated in their op-ed columns time and again. Anecdotally, both world wars were initiated in the west. This is the premise under which the permanent western aggressions against the east, especially the leadership of the east, China and Russia, are being waged.

The motto of non-aggression and Peace – a Tao doctrine – prevails in China’s foreign policy as the top principle as of this date. And there is no indication that China will depart from this Peace dogma which has brought her internal stability, international recognition and has made China over the last decades one of the world’s foremost economies, as well as a leader in technological and environmental advances. This, despite constant western castigating for pirating western technology and destroying the environment. The demonization is like a propaganda tool to deviate the world’s attention from western capitalist disasters around the world. But China moves on, undisturbed, generously, with a vision for a common future for mankind all mankind, not just China.

On 1 October, China celebrated the 70th Anniversary of her Revolution. China’s vision began with the Chinese Revolution, when China’s leader of the Communist Party, Mao Zedong, declared the Independent People’s Republic of China on 1 October 1949, succeeding the Republic of China (1912). In fact, China’s Revolution already began just after the Second Sino-Japanese War (1937-1945), at the end of WWII, with the Chinese Civil war (1945 – 1949), also called the War of Liberation.

The International Forum on “China’s 70-Year Development and the Construction of the Community with a Shared Future for Mankind”, 5-6 November in Shanghai, is part of the celebration. It is a forward-looking event with a Chinese vision for the future. To better grasp that vision for the future, here is a quick look at the past.

History with Foresight

Visionary Chairman Mao Zedong wanted to finally free the people of China from hundreds of years of western colonization and oppression, from the calamities of Opium Wars I and II (British imposed 1839-1842, and 1856-1860) and engaged the Chinese Communist Party (CPC – Communist Party of China) in an all-out confrontation with the Kuomintang (KMT), or the second phase of the Civil War (1945 – 1949).  The KMT, also called the Nationalist Party, was led by General Chiang Kai-shek, who succeeded KMT’s founder, Sun Yat-sen, after his death in 1925.

Chiang Kai-shek had the support of the United States, whose main objectives were stopping the “spread” of communism and maintaining continuous access to China’s riches, mostly in the form of natural resources, but also by exploiting the Chinese labor force. Washington ordered Chiang to break all relations with the Soviet Union and to eliminate the threat of a communist leadership in China. This led to a lingering on and off conflict from the 1920s onwards between KMT and the CPC (also considered the first phase of the Civil War).

Hostilities began shortly after the foundation of the KMT in 1919 which was ‘helped’ by the United States. While Mao and his Communist Party emerged as the winner of the Civil War in 1949, Chiang Kai-shek and his followers took over the Chinese Province of Taiwan, where Kuomintang is still the ruling party. China’s non-aggression against the occupation of Taiwan is one of the many demonstrations of China’s peaceful diplomatic approach to conflict.

The current President of the Republic of China, as Taiwan calls itself, although it is a part of China, is Tsai Ing-wen, a politician and professor, in office since 2016. He caters entirely to the interests of Washington and the west in general, even vying to buy independently – and totally illegally – weapons from the US. While part of the PRC, Taiwan enjoys a certain autonomy, again compliments of China’s non-belligerent approach to conflicts.

Today, Taiwan is still recognized by 14 countries out of 193 UN members as the official representative of China. This, despite the fact that the UN declared the People’s Republic of China already in 1971 as the official representative of China with one of the five permanent seats in the UN Security Council (UNSC). Countries recognizing Taiwan as official China, still bending over to please Washington, are becoming fewer and fewer, as China is emerging as the number one economy of the world; call it socioeconomy, because China’s advancements are not just measured by the western standards of linear economic growth, but promote distributive growth, encompassing also vast improvements of people’s quality of life.

Mao’s victory brought a new era to the Chinese people. With what he called the Great Leap Forward (1958 – 1962), Mao and the CPC led a social and economic campaign converting the rural agrarian areas into a socialist industrialized economy through communal farming or agricultural cooperatives. This 4-year effort was constantly attacked and disrupted by infiltrated anticommunist saboteurs at a high social and monetary cost for China. But it served as a learning phase. China’s flamboyant rise to the second (by some accounts the first) world economy, proved that the lessons helped defeat US interference then and today.

The ten-year Cultural Revolution (1966 – 1976) was Mao’s sociopolitical movement aiming at cleaning socialist China from infiltrated capitalist elements and influences. Then, and to some extent still today, China was full with so-called Fifth Columnists, a term coined during the Spanish Civil war, when General Franco’s Nazi-party, the “Falange”, were able to defeat the legitimately elected Republicans, because the “Falange” had what they called a “Fifth Column” clandestinely embedded among the Republican defense forces in Madrid. Today Fifth Columnists are everywhere. They come in all shapes and forms, including disguised as western NGOs, in every country that Washington and its western allies want to dominate and provoke ‘regime change’.  It was clear that the west, predominantly the emerging US empire, wanted to disrupt Mao’s revolution; they would not let China flourish under her own political, communist values and beliefs.

Foreign meddling in China’s Revolution came at a huge cost for China. As a consequence, Mao’s revolutions are often portrayed by the west as failures, the usual western tarnishing the success of other nations, of other socioeconomic systems, in order to hide the west’s own disastrous failures. From a Chinese and humanitarian perspective, Mao’s Revolutions have drastically improved the public education and health system, have eradicated endemic deadly diseases inherited from the western dominated colonial and KMT times and, foremost, poverty was largely eradicated. As of these days, about 750 million people have been lifted out poverty. Alleviation of poverty was an emphasis under both of Mao’s Revolutions. These Revolutions also taught valuable lessons to Chinese scholars and future leaders and have drastically advanced China towards food self-sufficiency which she reached by 2018.

It is thanks to these lessons that, after Mao’s death in 1976, his successor, Deng Xiaoping, led China through a far-reaching economic reform, including elements of a market economy, however, always under central government control, a principle that is maintained as of today. Deng called the new Chinese economic model “socialism with Chinese characteristics”, a principal that continues today. He helped develop China into the world’s fastest-growing economy, improving the lives of hundreds of millions of citizens. Deng also masterminded the return of Hong Kong from a UK colony to China in 1997, and Macau from Portugal in 1999. The transition was completed by Deng’s successor, Jian Zemin.

Deng retired in 1992. His successor, Jian Zemin, had several high-ranking positions in previous governments and was President of the PRC from 1993 – 2003. Jian opened China further for foreign investments and trade. He visited the US in 1997, where he met with President Clinton. Jian followed a non-confrontational foreign policy, like his predecessors, strengthened relations with western partners, especially the United States, and maintained at home an economic annual growth of at least 8%. This led to an explosion of wealth, but also initially to a less than optimal distribution of wealth, most of which concentrated along China’s eastern shores, risking conflicts with the lesser developed Chinese “hinterland”.

Hu Jintao followed Juan Zemin as China’s Paramount Leader from 2002 to 2012. Hu, as a rather modest leader, along with his Premier, Wen Jiabao, and his Vice-President, Xi Jinping, continued the policy of economic growth and development, achieving more than a decade of double-digit growth, however shifting the economy gradually more to non-consumption growth, fostering, instead, socioeconomic equality, aiming at building a “Harmonious Socialist Society”.

Hu was seeking a prosperous China, free of internal social conflicts and pursued internally and externally a “peaceful development policy” – with ‘soft power’ meaning a diplomatic approach to foreign policy issues, that was never confrontational. During Hu’s rule China increased its influence in Africa and Latin America, laying the groundwork for future closer relationships with these regions. Hu was also known for shared and consensus-based leadership. Hu was succeeded in 2013 by Xi Jinping.

The Vision

Enter the era of President Xi Jinping. He is a lawyer, chemical engineer, philosopher – and visionary. On 7 September 2013, President Xi Jinping gave a speech at Kazakhstan’s Nazarbayev University, in which he spoke about ‘People-to-People Friendship and Creating a better Future”. He referred to the Ancient Silk Road of more than 2,100 years ago, that flourished during China’s Western Han Dynasty (206 BC-AD 24).

Referring to this epoch of more than 2,000 years back, Xi Jinping pointed to the history of exchanges under the Ancient Silk Road, saying:

They had proven that countries with differences in race, belief and cultural background can absolutely share peace and development as long as they persist in unity and mutual trust, equality and mutual benefit, mutual tolerance and learning from each other, as well as cooperation and win-win outcomes.

Xi’s vision may be shaping the world of the 21st Century. He designed and engineered the Belt and Road Initiative, loosely modeled according to the Ancient Silk Road, soon after assuming the Presidency in 2013. He launched this ground-breaking “project”, a fabulous idea to connect the world with transport routes, infrastructure, industrial joint ventures, teaching and research institutions, cultural exchange and much more. Enshrined in China’s Constitution, BRI has become the flagship for China’s foreign policy.

BRI is literally building bridges and connecting people of different continents and nations. The purpose of the New Silk Road is to construct a unified large market and make full use of both international and domestic markets, through cultural exchange and integration, to enhance mutual understanding and trust of member nations, ending up in an innovative pattern with capital inflows, talent pool, and technology database”.

During the 19th National Congress in 2017, BRI was included in the Chinese (CPC) Constitution as an amendment to promote the BRI’s objective of “shared interests” and “shared growth” which are major political objectives for China. This amendment to the Constitution for raising international cooperation through a multifaceted socioeconomic development endeavor is unique in China’s history. It fits precisely the theme of the present Forum, “The Construction of the Community with a shared Future for Mankind”.

The BRI is a global development strategy adopted by the Chinese Government, eventually with investments in more than 150 countries and international organizations – and growing – in Asia, Africa, Europe, the Middle East and the Americas. BRI is a multi-trillion investment scheme, for transport routes on land and sea, as well as construction of industrial and energy infrastructure, energy exploration, cultural exchange and integration facilities, education and research institutions, as well as trade among connected countries; and, unlike WTO (World Trade Organization), BRI is allowing nations to benefit from their comparative advantages, creating a win-win situation. In essence, BRI is to develop mutual understanding and trust among member nations, allowing for free capital flows, a pool of experts and access to a BRI-based technology data base.

At present, BRI’s closing date is foreseen for 2049 which coincides with new China’s 100th Anniversary. The size and probable success of the program indicates, however, already today that it will most likely be extended way beyond that date. It is worth noting, though, that only in 2019, six years after its inception, BRI has become a news item in the West. Remarkably, for six years BRI was denied or ignored by the western media in the hope it may go away. But away it didn’t go. To the contrary, many European Union members have already subscribed to BRI, including Greece, Italy, France, Portugal, and more will follow as the temptation to participate in this projected socioeconomic boom is overwhelming.

Germany is mulling over the benefits and contras of participating in BRI. The German business community, like business throughout Europe, is strongly in favor of lifting US-imposed sanctions and reconnecting with the East, in particular with China and Russia. But the official Berlin is still with one foot in the White House and with the other trying to appease the German – and European – world of business. This balancing act is in the long run not sustainable and certainly not desirable. At present BRI is already actively involved in over 80 countries, of which at least half of the EU membership.

To counteract the pressure to join BRI, the European Union, basically run by NATO and intimately linked to Washington, has initiated their own ‘Silk Road’, to connect Asia with Europe through Japan. In that sense, the EU and Japan have signed a “free trade agreement” which includes a compact to build infrastructure, in sectors such as energy, transport and digital devices. The purpose is to strengthen economic and cultural ties between the two regions, boosting business relations between Asia and Europa. It is an obvious attempt to compete with or even sideline China’s BRI. But it is equally obvious that this response will fail. Usually initiatives taken in ill-fate are not successful. And China, non-belligerent China, is unlikely to challenge this EU-Japan competitive approach.

China’s New Silk Road is creating a multipolar world where all participants will benefit. The idea is to encourage economic growth, distributed in a balanced way, so as to prioritize development opportunities for those most in need. That means the under-developed areas of western China, eastern Russia, Central Asia, Central Europe, reaching out to Africa and the Middle East, Latin America, as well as to South East Asia and the Pacific. BRI is already actively building and planning some six to ten land and maritime routes, connecting Africa, the Middle East, Europe and South America (see map, above).

The expected multi-trillion-dollar equivalent dynamic budget is expected to be funded by China, largely, but not exclusively, by the Asian Infrastructure and Investment Bank (AIIB), by Russia and by all the countries that are part of BRI and involved in singular or multi-country projects.

Implementing BRI, or the New Silk Road, is itself the realization of a vision of nations: Peaceful interconnectivity, joint infrastructure and industrial development, as well as joint management of natural resources. For example, BRI may help with infrastructure and management advice resolving or preventing conflicts on transboundary water resources. There are some 263 transboundary lake and river basins, covering almost half the earth’s surface and involving some 150 countries. In addition, there are about 300 transboundary aquifers serving about 2 billion people who depend on groundwater.

Water resources, life depends on them. If these resources are not properly managed, by, say, one or several parties taking advantage of the other users, a conflict is born. Often such conflicts can become violent. BRI may turn this source of potential hostilities around into a source for peace. Water is among the most shared resources on earth, and as such it may serve as an instrument for peaceful connectivity.

The Chinese government calls the Silk Road Initiative “a bid to enhance regional connectivity and embrace a brighter future”. With freshwater resources rapidly diminishing for ready use in the public domain, because of industrial and human pollution and privatization, management of water resources and transboundary water, in particular, may be constructed into a “Shared Future for Mankind.” The Belt and Road Initiative may provide the guiding principles for this shared future of life’s essential resource – water.

Today, “Give Peace a Chance” is more relevant than ever. And China is a vanguard in promoting peaceful development across the globe. During the Cuban Conference “For a World in Equilibrium” of January 2019, one of the Chinese representatives said very unequivocally in his presentation, “we are building bridges between people and nations to connect the world peacefully”. Undoubtedly, he is right and was referring to President Xi Jinping’s Belt and Road Initiative, or the New Silk Road.

The same can unfortunately not be said about the West which is, instead, building walls, predominantly the US, followed by her European vassals, either physical walls, or walls by conflicts, wars and – walls by “economic sanction”, by which they strangle and kill people en masse. Whenever a government does not share the US neoliberal doctrines, or refuses to bend to their dictate and efforts to plunder a country of natural resources, it is first subject to atrocious sanctions, then to military intervention with the goal of regime change. All that is possible because the western world is run by the fiat dollar system, under which all international transactions have to transit through an American bank, foremost a Wall Street bank. That’s how they block transfers, confiscate and steal money in banks all over the world.

In Venezuela sanctions started soon after President Hugo Chavez was elected as President in 1998. They were severely enhanced under Obama in 2014, and President Trump squeezed the country even more in 2017. In August 2019 Trump tightened the noose of economic strangulation to the maximum, “the most that any country has been sanctioned”, he proudly proclaimed, blocking and confiscating government accounts, including national reserve accounts and gold all around the western world. They are seizing Venezuelan assets in the US and internationally, intercepting ships and otherwise interrupting trade, for example, blocking crucial medication and food stock from entering the country, while also threatening sanctions on countries that are trading with Venezuela.

According to Venezuelan officials, the financial losses since 2017 amount to at least 130 billion dollars. These funds represent goods and services, the absence of which compromises not only well-being but real lives of Venezuelans. The 130 billion dollars could amply supply food and medication for Venezuelans to live well and for hospitals to function with the necessary medication and equipment. In addition, the US was directing mercenaries and members of the government opposition to sabotage the countries electric system, which caused days — in some regions weeks — of black-outs, a disaster for hospitals depending on electricity for refrigeration and lighting of operating theaters. Indeed, a recent study by the Center for Economic Policy Research (CEPR), in Washington, concluded that sanctions of the US and their European allies may have cost the lives of up to 40,000 Venezuelans. But Venezuela will not cave in and will survive, largely thanks to the support from China and Russia.

At this time it could also be mentioned the 60 years blockade of Cuba, the US instigated wars on Iraq, Syria, Afghanistan, Vietnam, the civil wars in Central America, Central Africa, the hostilities towards North Korea – and, of course, the constant aggressions vis-à-vis China and Russia – and much more. All for eradicating any “threat” of socialism that might spread as a positive alternative to boundless turbo-capitalism which is currently running the western world.

But enough about the west and its drive for world hegemony in flagrant disrespect of international law and Human Rights. It just goes to illustrate a few examples to juxtapose the west and the east, foremost China in alliance with Russia, whose approach is a multipolar socioeconomic development scheme, generous and peaceful, connecting people through trade and through BRI.

“The future is in the East” – so goes a progressive axiom. It is also my strong belief. By the East is meant China, Russia, most of Central Asia; now all represented by the Shanghai Cooperation Organization (SCO), or the Shanghai Pact. SCO is a Eurasian political, economic, and security alliance, the creation of which was announced on 15 June 2001 in Shanghai, China by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. The Pact was signed in June 2002 and entered into force in September 2013. SCO’s headquarters are in Beijing

Today, the SCO counts 8 members, including the members India and Pakistan. Iran and Mongolia are on a “waiting list”, on the verge of becoming members. Turkey, already a dialogue partner, is increasingly vying gaining SCO access, either through association or full membership. And this, despite the conflict it may create with Turkey’s NATO partners, mainly the US. Clearly, were Turkey to join the SCO, exit from NATO would be imminent – and disastrous for NATO, perhaps the stumbling block that would bring NATO down. Especially, since popular anti-NATO pressure from Italy to Germany, Greece, Spain and Portugal is steadily growing. Turkey is also the most strategically located NATO partner between East and West; between Europe and Asia, controlling the Bosporus, access to the Black Sea.

The SCO has also several observer and dialogue partners which eventually, it is assumed, may become full-fledged SCO members. The SCO is also called the alliance of the east and is considered a security pillar in more ways than one: SCO members account for almost half of the world population and for about one-third of the world’s economic output. In other words, this eastern alliance is politically and economically autonomous and to a large extent detached from the western dollar based “sanction-prone” economy.

The SCO, a visionary Chinese initiative of the early 2000s, was overlaid and expanded in 2013 by another brilliant Chinese Initiative, the BRI. May also be added to this powerhouse another association of countries, the Eurasian Economic Union (EAEU), primarily a trading partnership. The members are located in central and northern Asia, and include Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. The treaty was formally established in January 2015.

This block of eastern countries and associations is seeking against all odds, a multi-polar world, a world of Peace and Prosperity for All – a big challenge given the current socioeconomic disequilibrium – but feasible with mutual respect and a will to cooperate, to apply the forces of synergy and solidarity, as is inherent in the Belt and Road approach. The stakes are high. As Russia’s Foreign Minister, Mr. Lavrov pointed out during the 74th UN General Assembly, in September 2019: “The West ignores reality by trying to prevent the formation of a multi-polar world by imposing its narrow “liberal” rules on others”, “but” he added, “Western dominance is on the wane, ‘we’re liberals, so everything’s allowed’ just isn’t working anymore.” These words are the basis for a strong pillar and union of eastern associations.

Outlook and Vision

Economy

China has registered during the past decades a phenomenal economic growth rate, at times exceeding 12% per year. Today it has been on purpose reduced to about 6%, so as to allow a better distribution of the growth benefits, and also spread wealth more horizontally to create greater equality of well-being.

In figures and facts:

China’s GDP measured in US-dollars amounts to $14.2 trillion (nominal; 2019 est.), which corresponds to $27.3 trillion in Purchasing Power Parity (PPP; 2019 est.). This corresponds to US$ 10,153 / capita, in nominal term (2019 est.), to US$ 19,520 / capita measured by PPP.

Compare this with the US GDP of US$ 21.345 trillion in nominal terms (2019 est.) and $64,767 / per capita (2019 est.) This makes China the world’s second largest economy in nominal terms, expected to exceed the US by 2026. However, when comparing the two GDPs by their PPP values, China is number one; having surpassed the United States in 2016.

Measured by PPP, China is already today de facto the world’s largest economy, because the only figures that have any significance in economic production and consumption, are those that reflect the output’s purchasing power

Examples of Economic Efficiency

New Airport in Beijing: In only 4 years China built by far the world’s largest airport in Beijing, Daxin International Airport. It was ready for China’s 70th Birthday on 1 October 2019, when it was inaugurated by President Xi Jinping. It has been operational the week after inauguration. This airport, an architectural wonder, covers some 700,000 m2 (almost 100 football fields) and carries passengers by fast train in 20 minutes to the center of Beijing. It is expected to accommodate in 2021 already 45 million passengers and can easily be expanded to receive and serve 100 million passengers as the need requires. This airport is a sign that China is capable of realizing extraordinary achievements. It signals a visionary future.

China’s Rapid Urbanization: When in 2017, Beijing was faced with a housing shortage for low-wage migrant workers, they built 100,000 low-rent apartments in twelve months. The speed of China’s infrastructure development, the rapid urbanization, providing millions of new subsidized housing for migrant workers, is a model that has worked and is being replicated throughout China. In fact, it pays off socially and economically. People who do not have to worry about shelter, are healthier and live and work better. China has been building homes for a million people — the entire housing stock of San Francisco — every month since 1950. This policy aims at and creates well-being among the workers, among the people, and is at the same time a solid tool for China’s economic development – and people’s happiness. China’s successful and rapid housing development is being closely watched by Australia, as her major cities, Sydney and Melbourne face similar problems.

Trade

China has been the world’s largest exporter of goods since 2009. Official estimates suggest Chinese exports amounted to about $2.1 trillion in 2017. The total annual value of the country’s exports equates to approximately $1,500 for every Chinese resident. Since 2013, China has as well become the world’s largest trading nation.China is also a significant importer and accounts for about 10% of total global imports, i.e., about US$ 1.7 trillion, leaving China as a net exporter with a trade surplus of about US$ 400 billion.  Trade war with the US  see below.

Monetary Policy

China’s Yuan, is a solid currency, backed by China’s economy and by gold. In 2017 the Yuan was admitted into the International Monetary Fund’s (IMF) basket of reserve currencies, which constitute the SDR or Special Drawing Rights. The SDR basket consists of five currencies and their respective weights are: US-Dollar $41.73%, Euro 30.93%, Renminbi (Chinese Yuan) 10.92%, Japanese Yen 8.33%, British Pound 8.09%. The Yuan is clearly undervalued in the SDR basket, as it is rapidly replacing the dollar as reserve currency. Treasurers around the globe realize that the US-dollar is fiat money, backed by nothing, whereas the Yuan is a solid currency, based on a solid economy, plus backed by gold.

The decline of the US dollar as a world reserve currency means that the US dollar hegemony is fading. This is inadmissible for the US. Therefore, Washington along with the major western allies, are considering to abandon the key reserve role of the dollar and replacing it with some kind of an SDR, in which the dollar would maintain a prominent role, but its Ponzi-scheme characteristics would no longer be openly visible.

The current US debt to GDP ratio is about 105%. However, what the General Accounting Office calls “unmet obligations” amounts to about 700% of GDP (net present value – total outstanding obligations discounted to today’s value). According to former Federal Reserve Chairman, Alan Greenspan, responding to a journalist’s question, “we will never pay back our debt; we will just print new money”. This is a dangerous pyramid, or Ponzi-scheme, of which most governments are aware, and yet many of them hold on to the dollar as key reserve currency. With the yuan rising, this may change rapidly. In fact, the conversion from dollar to yuan as reserve currency has already started.

Regarding the western foreseen reserve basket to “save” the dollar, it is not clear yet what the other currencies and their respective weight in the new “Reserve SDR” would be, but let’s assume the same five currencies. The Yuan, if still in the reserve basket, would probably still be under-valued. If so, this might be a good reason for China to exit the Reserve SDR and continue with the Yuan by its own economic and monetary value as a reserve currency. The Yuan has made its reputation of stability and does no longer need the backing of a (western coined) SDR to prove its strength as a reserve currency.

The War on Tariffs

In June 2018, US President Trump started an unprovoked Trade War with China, then expanded it to other countries, including his European allies. But it is most ferocious with China. As usual, China’s response was not hostile. Retaliation, yes; but still an approach of seeking negotiations and compromise. In reality, the US market for China may be important, but not that important to be humiliated as was the case with the American bulldozer approach to impose not just tariffs, but tariffs that were nothing but a new form of economic sanctions.

The real meaning and purpose behind these tariffs was not reducing China’s exports in the first place, but harming the Yuan, as it was gaining strength and, as mentioned before, gradually taking over the US-dollar’s role as world reserve currency. Some 20 years ago the US dollar accounted for more than 90% of all reserve assets in nations’ treasuries around the globe. Today, that percentage has shrunk to less than 60% and is fading rapidly. Much of the lost territories by the US dollar was made up by the Chinese Yuan. And as the importance of the Yuan rises, the US hegemony of the world’s economy, resources and people will fade. This does not go down in Washington without a fight.

Future Economic Growth

China, in the near future, will most likely keep to a “modest” growth rate, around 5% to 7%, concentrating on horizontal distributive growth, with a focus on improved public well-being for all, universal access to affordable housing, basic infrastructure, water supply, sanitation, public transportation, rural higher education, as well as internal cultural exchange and harmonization. Two areas of economic development, ”horizontal growth”, may be singled out; (i) Artificial Intelligence (AI), and (ii) Environmental Improvement.

Technological Innovation

China is a Power House of new technologies and no doubt the world’s number one in Technological Innovation. Just to mention a few, not in order of priority:

  • Rapidly progressing robotization of construction and manufacturing, as well as of medical interventions, like surgeries and localized cancer treatment;
  • 3-D construction of serving a myriad of sectors, including manufacturing in the medical sector, medical equipment, human body replacement parts, production of construction materials – and more. China predicts in 20 to 30 years everybody (in China) will have access to individualized 3D building capacity;
  • Face recognition technology, making traditional ID and bank account access cards obsolete and identity protection more secure;
  • High-speed train systems, a domain where China has bypassed Japan and is the world’s number one; i.e., the high-speed railways Shanghai Maglev and Fuxing Hao CR400AF/BF;
  • A new generation of garbage recycling into building material, fertilizers, fuel as a source of energy, and more;
  • Architecture and building efficiency, only two examples, (i) the new Beijing Daxin International Airport, the world’s largest, built in just 4 years, with a capacity of more than 100 million passengers per year, and a superb architecture; (ii) the “Birds Nest” – the stadium for the 2008 Summer Olympics which will also be used for the 2022 Winter Olympics; it was built in less than 5 years and is an architectural masterpiece, and
  • Artificial Intelligence (AI) – see below.

China’s ambition: Everything is possible – and China has already proven that it can be done

Artificial Intelligence (AI). China is also moving rapidly towards leadership in Technical Innovation for Artificial Intelligence, with plans to invest considerable resources into research. In 2017, the State Council (CCP) issued a “Next Generation Intelligence Development Plan”, including a US$ (equivalent) 2.1 billion AI industrial park. By 2025 the State Council predicts China to be a leader in AI research and predicts that China’s AI core industry will be worth some US$ 60 billion, amounting to about US$ 700 billion equivalent, when accounting for related industries. By 2030, the State Council expects China to be the global leader in development of AI.

Environmental Improvement. China has made leaps in improving her environment, by far exceeding efforts of western countries. China’s environmental policies are developing BRI at home and abroad in shades of green. New parks with trees and areas for recreation are emerging in every major city in China. According to an expert at the School of Regulation and Global Governance of the Australian National University, Beijing has improved its air quality by 30% in the last five years.

A study of the University of Chicago demonstrates that Chinese cities have reduced the concentrations of fine particulates in the air on average by 32% between 2014 and 2018.

The Chinese people and government are putting utmost importance to protecting the environment and ecosystems. Green development makes for improved public health, but is also attractive for investments.

China has a three-year “green” plan to improve air quality and tighten regulations. Air quality is one of the key environmental issues besetting China. In that sense, the government is accelerating the electrification of vehicles and has pledged that by 2030 all new cars will be powered by electricity.The government is also tackling drinking water quality and shortages, as well as improving urban and rural sanitation. These are longer-term propositions. Cost estimates for China’s overall environmental programs are not readily available but may easily reach into hundreds of billions of US-dollar equivalents over a ten-year period.

Conclusion

A few years ago, China, Russia and other SCO countries started trading among themselves in their local currencies with a non-western monetary transfer system, using mostly the Chinese Cross-Border Interbank Payment System (CIPS). It is out of control of the western SWIFT transfer system, thereby escapes the sanctions regime of the US. Gradually, the SCO and associated countries are detaching themselves from the western dollar-based fiat system.

In terms of trading, the SCO countries, mainly China, control most of the Asian markets, even making rapid inroads into Japan and Australia, and are evermore present in Latin America and Africa. Before long Europe will see the light and turn eastwards. It would be a wise decision. Dealing first within the confines of the huge Eurasian landmass, including the Middle East and parts of Africa – has been the logical way of trading since the Ancient Silk Road, more than 2,000 years ago.

China has a great visionary future that had already begun 70 years ago, and was enhanced six years ago with President Xi Jinping’s launching of the Belt and Road Initiative. BRI will continue spanning the globe for the next at least 50 to 100 years, spreading development in a multi-polar world, stressing equality and well-being for all. BRI investments may be counted in the multi-multi trillions and will be funded by China and the participating countries, with a socio-economic return that cannot be expressed in sheer monetary terms, as investments will also bring unfathomable social benefits, poverty reduction, improved health, higher and better education and, generally improving people’s well-being.

The bright side of this initiative is the Chinese philosophy of non-aggression, of diplomacy to resolve conflicts and of promoting peaceful economic coexistence and development around the globe.

China’s determination to develop with a “green” economy, a “green” BRI and a horizontal distributive growth that emphasizes equality and inclusion is a landmark model for the world to embrace. It is a model to construct a Community with a Shared Future for Mankind.

• First published in Global Research

China Breaks the Western Debt Stranglehold on the World

The west has colonized, exploited, ravaged and assassinated the people of the Global South for hundreds of years.

Up to the mid-20th Century Europe has occupied Africa, and large parts of Asia.

In Latin America, though much of the sub-Continent was “freed” from Spain and Portugal in the 19th Century – a new kind of colonization followed by the new Empire of the United States under the so-called Monroe Doctrine, named after President James Monroe (1817 -1825), forbidding Europeans to interfere in any “American territory”. Latin America was then and is again today considered Washington’s Backyard.

In the last ten years or so, Washington has launched the Monreo Doctrine 2.0. This time expanding the interference policy beyond Europe to the world. Democratic sovereign governments in Latin America that could choose freely their political and economic alliances in the world are not tolerated. China, entering into partnership agreements with Latin American countries, sought after vividly by the latter is condemned by the US and the west, especially vassalic Europe.

Therefore, democratically elected center-left governments had to be “regime-changed’ – Honduras, Argentina, Chile, Ecuador, Brazil, Peru, Paraguay. So far, they stumbled over Venezuela, Cuba, Nicaragua and maybe Mexico.

Venezuela and Cuba are being economically strangled to exhaustion. But they are standing tall as pillars in defending the Latin American Continent with economic assistance and military advice from China and Russia.

*****

Latin America is waking up – and so is Africa.

In Latin America, street protests against the US / IMF imposed debt trap and de consequential austerity programs, making the rich richer and the poor poorer, are raging in Honduras, Nicaragua, Ecuador, Chile, Argentina and even in Brazil. In Argentina, in a democratic election this past weekend, 27 October, the people deposed neoliberal President Macri. He was put in the Presidency via “tricked” elections by Washington in 2015. Macri ruined the prosperous country in his 4 year-reign. He privatized public services and infrastructure, education, health, transportation and more, leading to hefty tariff increases, worker layoffs, unemployment and poverty. Poverty, at about 15% in 2015, when Macri took office, soared to over 40% in October 2019.

In 2018 Macri contracted the largest ever IMF loan of US$ 57.2 billion – a debt trap, if there was ever one. The new, just elected Fernandez-Fernandez center-left Government will have to devise programs to counter the impact of this massive debt.

All over in Latin America, people have had enough of the US / western imposed austerity and simultaneous exploitation of their natural resources. They want change – big style. They seek to detach from the economic and financial stranglehold of the west. They are looking for China and Russia as new partners in trade and in financial contracts.

The same in Africa – neocolonialism by the west, mostly France and the UK, through financial oppression, unfair trading deals and western imposed – and militarily protected – despotic and corrupt leaders, has kept Africa poor and desolate after more than 50 years of so-called Independence. Africa is arguably still the Continent with the most natural resources the west covets and needs to preserve its luxury life style and continuous armament.

People, who do not conform especially younger politicians and economists, who protest and speak out, because they see clearly through the western imposed economic crimes committed on a daily basis, are simply assassinated or otherwise silenced.

Africans are quietly seeking to move out of the claws of the west, seeking new relations with China and Russia. The recent Russian-African summit in Sochi was a vivid example.

China is invited to build infrastructure, fast trains, roads, ports and industrial parks, and the Belt and Road Initiative (BRI) is more than welcomed in Africa, as it projects common and equal development for all to benefit. BRI is the epitome for building a Community with a Shared Future for Mankind. China also offers a gradual release from the US / western dominated dollar-debt claws. Freeing a country from the dollar-based economy is freeing it from the vulnerability of US / western imposed sanctions. This is an enormous relief that literally every country of the Global South – and possibly even Europe – is hoping for.

However, as could be expected, the west, led by the US of A, is pouncing China for engaging in “debt trap diplomacy”. Exactly the contrary of what is actually happening.

The truth is, though, countries throughout the world, be it in Africa, Asia, South Pacific and Latin America, are choosing to partner with China by their free will. According to a statement by a high-level African politician “China does not force or coerce us into a deal, we are free to choose and negotiate a win-win situation.” That says it all.

The difference between the west and east is stark. While anybody and any country that does not agree with the US dictate and doctrine risks being regime-changed or bombed, China does not impose her new Silk Road – the BRI – to any country. China invites, respecting national sovereignty. Who wants to join is welcome to do so. That applies as much to the Global South, as it does to Europe.

China’s President Xi Jinping launched the BRI in 2013. In 2014 Mr. Xi visited Madame Merkel in Germany, offering her to be at that time the western-most link to the BRI. Ms. Merkel, under the spell of Washington, declined. President Xi returned and China continued working quietly on this fabulous worldwide economic development project – BRI – THE economic venture of the 21st Century, so massive that it was incorporated in 2017 into the Chinese Constitution.

It took the west, however, 6 years to acknowledge this new version of the more than 2000-year-old Silk Road. Only in 2019, the western mainstream media started reporting on the BRI – and always negatively, of course. The preaching was — and still is — beware of the Chinese Dragon.  They will dominate you and everything you own with their socialism.

This train of thought is typically western. Aggression seems to be in the genes of western societies, of western culture, as the hundreds of years of violent and despotic colonization and exploitation – and ongoing – are proving. Does it have to do with western monotheistic doctrines? This is pure speculation, of course.

Again, the truth is multi-fold. First, China does not have a history of invasion. China seeks a peaceful and egalitarian development of trade, science and foremost human wellbeing – a Tao tradition of non-aggression. Second, despite the “warnings” from the throne of the falling empire, about a hundred countries have already subscribed to participate in BRI — and that voluntarily. And third, China and Russia, and along with them the Shanghai Cooperation Organization (SCO), are in a solid economic and defense alliance which encompasses close to half of the world population and represents about one-third of the globes total economic output.

Hence, SCO members are – or may be, if they so choose – largely detached from the dollar hegemony. The western privately run and Wall Street-controlled monetary transfer system, SWIFT, is no longer needed by SCO countries. They deal in local currencies and / or through the Chinese Interbank Payment System (CIPS).

It is no secret that the empire, headquartered in Washington, is gradually decaying, economically as well as militarily. It’s just a matter of time. How much time is difficult to guess. But Washington’s everyday behavior of dishing out sanctions left and right, disrupting international monetary transactions, confiscating and stealing other countries assets around the world, puts ever more nails in the Empire’s coffin. By doing this, America is herself committing economic and monetary suicide. Who wants to belong to a monetary system that can act willy-nilly to a county’s detriment? There is no need for outside help for this US-sponsored pyramid fiat monetary system to fall. It’s a house of cards that is already crumbling by its own weight.

The US dollar was some 20-25 years ago still to the tune of 90% the domineering reserve currency in the world. Today that proportion has declined to less than 60% – and falling. It is being replaced primarily by the Chinese yuan as the new reserve currency.

This is what the US-initiated trade war is all about – discrediting the yuan, a solid currency, based on China’s economy – and on gold. “Sanctioning” the Chinese economy with US tariffs is supposed to hurt the yuan, to reduce its competition with the dollar as a world reserve currency. To no avail. The yuan is a worldwide recognized solid currency, the currency of the world’s second largest economy. By some standards, like accounted by PPP (Purchasing Power Parity), the most important socioeconomic indicator for mankind, China is since 2017 the world’s number one economy.

This, and other constant attacks by Washington, is a typical desperate gesture of a dying beast – thrashing wildly left and right and above and below around itself to bring down into its grave as many perceived adversaries as possible. There is, of course, a clear danger that this fight for the empire’s survival might end nuclear – god forbid!

China’s and Russia’s policy, philosophy and diplomacy of non-aggression may save the world from extinction including the people of the United States of America.

First published by the New Eastern Outlook – NEO

US and China “Trade” War?

It is very popular these days to talk and write about the “trade war” between the United States and China. But is there really one raging? Or is what we are witnessing simply a clash of political and ideological systems: one being extremely successful and optimistic, the other depressing, full of dark cynicism and nihilism?

In the past, the West used to produce almost everything. While colonizing the entire planet (one should just look at the map of the globe between the two world wars), Europe and later the United States, Canada and Australia kept plundering all the continents of natural resources, holding hundreds of millions of human beings in what could be easily described as ‘forced labor’, often bordering on slavery.

Under such conditions, it was very easy to be ‘number one’, to reign without competition, and to toss around huge amounts of cash for the sole purpose of indoctrinating local and overseas ‘subjects’ on topics such as the ‘glory’ of capitalism, colonialism (open and hidden), and Western-style ‘democracy’.

It is essential to point out that in the recent past, the global Western dictatorship (and that included the ‘economic system) used to have absolutely no competition. Systems that were created to challenge it were smashed with the most brutal, sadistic methods. One only needs to recall invasions from the West to the young Soviet Union with the consequent genocide and famines. Or other genocides in Indochina, which was fighting its wars for independence, first against France, later against the United States.

*****

Times changed. But Western tactics haven’t.

There are now many new systems in numerous corners of the world. These systems, some Communist, others socialist or even populist, are ready to defend their citizens and to use natural resources to feed the people, and to educate, house and cure them.

No matter how popular these systems are at home, the West finds ways to demonize them, using its well-established propaganda machinery. First, to smear them and then, if they resist, to directly liquidate them.

As before, during the colonial era, no competition has been permitted. Disobedience is punishable by death.

Naturally, the Western system has not been built on excellence, hard work and creativity, only. It was constructed on fear, oppression and brutal force. For centuries, it has clearly been a monopoly.

*****

Only the toughest countries, like Russia, China, Iran, North Korea or Cuba, have managed to survive, defending their own cultures and advancing their philosophies.

To the West, China has proven to be an extremely tough adversary.

With its political, economic, and social systems, it has managed to construct a forward-looking, optimistic and extraordinarily productive society. Its scientific research is now second to none. Its culture is thriving. Together with its closest ally, Russia, China excels in many essential fields.

That is precisely what irks, even horrifies, the West.

For decades and centuries, Europe and the United States have not been ready to tolerate any major country which would set up its own set of rules and goals.

China refuses to accept the diktat from abroad. It now appears to be self-sufficient, ideologically, politically, economically and intellectually. Where it is not fully self-sufficient, it can rely on its friends and allies. Those allies are increasingly located outside the Western sphere.

*****

Is China really competing with the West? Yes and no. And often not consciously.

It is a giant; still the most populous nation on earth. It is building, determinedly, its socialist motherland (applying “socialism with the Chinese characteristics” model). It is trying to construct a global system which has roots in the thousands of years of its history (BRI – Belt and Road Initiative, often nicknamed the “New Silk Road”).

Its highly talented and hardworking, as well as increasingly educated population, is producing at a higher pace and often at higher quality than the countries in Europe or the United States. As it produces, it also naturally trades.

This is where the ‘problem’ arises. The West, particularly the United States, is not used to a country that creates things for the sake and benefit of its people. For centuries, Asian, African and Latin American people were ordered what and how to produce, where and for how much to sell the produce. Or else!

Of course, the West has never consulted anyone. It has been producing what it (and its corporations) desired. It was forcing countries all over the world to buy its products. If they refused, they got invaded, or their fragile governments (often semi-colonies, anyway) overthrown.

The most ‘terrible’ thing that China is doing is: it is producing what is good for China, and for its citizens.

That is, in the eyes of the West, unforgiveable!

*****

In the process, China ‘competes’ but fairly.  It produces a lot, cheaply, and increasingly well. The same can be said about Russia.

These two countries are not competing maliciously. If they were to decide to, they could sink the US economy, or perhaps the economy of the entire West, within a week.

But they don’t even think about it.

However, as said above, to just work hard, invent new and better products, advance scientific research, and use the gains to improve the lives of ordinary people (there will be no extreme poverty in China by the end of 2020) is seen as the arch-crime in London and Washington.

Why? Because the Chinese and Russian systems appear to be much better, or at least simply better, than those which are reigning in the West and its colonies. And because they are working for the people not for corporations or for the colonial powers.

And the demagogues in the West – in its mass media outlets and academia – are horrified that perhaps soon the world will wake up and see the reality which is actually already happening slowly but surely.

*****

To portray China as an evil country is essential for the hegemony of the West. There is nothing so terrifying to London and Washington as the combination of these words: “Socialism/ Communism, Asian, success”. The West invents new and newer ‘opposition movements’, it then supports them and finances them, just in order to then point fingers and bark: “China is fighting back, and it is violating human rights”, when it defends itself and its citizens. This tactic is clear right now in both the northwest of the country and in Hong Kong.

Not everything that China builds is excellent. Europe is still producing better cars, shoes and fragrances, and the United States, better airplanes. But the progress that China has registered during the last two decades is remarkable. Were it to be football, it is China 2: West 1.

Most likely, unless there is real war, in ten years China will catch up in many fields; catch up, and surpass the West. Side by side with Russia.

It could have been excellent news for the entire world. China is sharing its achievements, even with the poorest of the poor countries in Africa or with Laos in Asia.

The only problem is the West feels that it has to rule. It is unrepentant, observing the world from a clearly fundamentalist view. It cannot help it: it is absolutely, religiously convinced that it has to give orders to every man and woman, in every corner of the globe.

It is a tick, fanatical. Lately, anyone who travels to Europe or the United States will testify: what is taking place there is not good, even for the ordinary citizens. Western governments and corporations are now robbing even their own citizens. The standard of living is nose-diving.

China, with just a fraction of the wealth, is building a much more egalitarian society, although you would never guess so if you exclusively relied on Western statistics.

*****

So, “trade war” slogans are an attempt to convince the local and global public that “China is unfair”, that it is “taking advantage” of the West. President Trump is “defending” the United States against the Chinese ‘Commies’. But the more he “defends them”, the poorer they get. Strange, isn’t it?

While the Chinese people, Russian people, even Laotian people, are, ‘miraculously’, getting richer and richer. They are getting more and more optimistic.

For decades, the West used to preach ‘free trade’, and competition. That is, when it was in charge, or let’s say, ‘the only kid on the block’.

In the name of competition and free trade, dozens of governments got overthrown, and millions of people killed.

And now?

What is China supposed to do? Frankly, what?

Should it curb its production or perhaps close scientific labs? Should it consult the US President or perhaps British Prime Minister before it makes any essential economic decision? Should it control the exchange rate of RMB in accordance with the wishes of the economic tsars in Washington? That would be thoroughly ridiculous considering that (socialist/Communist) China will soon become the biggest economy in the world, or maybe it already is.

There is all that abstract talk, but nothing concrete suggested. Or is it like that on purpose?

Could it be that the West does not want to improve relations with Beijing?

On September 7, 2019, AP reported:

White House economic adviser Larry Kudlow compared trade talks with China on Friday to the U.S. standoff with Russia during the Cold War…

“The stakes are so high, we have to get it right, and if that takes a decade, so be it,” he said.  Kudlow emphasized that it took the United States decades to get the results it wanted with Russia. He noted that he worked in the Reagan administration: “I remember President Reagan waging a similar fight against the Soviet Union.”

Precisely! The war against the Soviet Union was hardly a war for economic survival of the United States. It was an ideological battle which the United States unfortunately won, because it utilized both propaganda and economic terror (the arms race and other means).

Now, China is next on the list, and the White House is not even trying to hide it.

But China is savvy. It is beginning to understand the game. And it is ready, by all means, to defend the system which has pulled almost all its citizens out of misery, and which could, one day soon, do the same for the rest of the world.

*  First published by NEO – New Eastern Outlook – a journal of the Russian Academy of Sciences

Framing Houses, Framing Lives

“You can’t hammer a nail over the Internet.”

— Michael Crawford, writer

One might think a profile of a former Oceanlake school, Taft elementary youth and a teen who dropped out of Taft High School (Lincoln City, Oregon) who now, 21 years later, works hard as a carpenter might not be the stuff of legends.

In fact, speaking with 37-year-old Justin Marical is like a breath of fresh air along with bursts of déjà vu.

He’s scrappy, he’s gone through ups and downs as a framer and construction worker, and he faces the struggle of being a quasi-step-dad to four children and a biological father to his 16-year-old boy who lives in Sedona.

We meet in Waldport, as I shadow him building his specialty now — high-end sheds or office spaces on people’s properties. We cover a lot of ground while he’s putting up siding on the 200-square-foot shed at a house on Bay Street.

He does the work from dawn to dusk, leaving no detail unfinished for this craftsman-like gig before he heads to the next job.

His business — JM Sheds — is going on 12 years, and his life is representative of a lot of young American men’s lives: dropping out of high school after 10th grade, getting sent to an aunt and uncle’s farm to be home schooled, getting a GED and learning a trade to survive.

Add to his formative years a biological father who ended up leaving the family with Justin at the tender age of six.

“I don’t know what the true effects of the divorce on me are, but I am sure I was hurt, yet at the time I wasn’t aware of anything.”

Justin says the Central Coast is a great area for which to grow up, or at least it was when he was younger, although he admits he did “slack off in school” and stopped going to Taft.

“I really wasn’t in any trouble, but I did ditch school, and did smoke a bit and got stoned.”

However, a safety net appeared: he was sent to an uncle and aunt on their 500-acre apple, pear, and cherry farm in Yakima. This really set the foundation for the young Justin’s life and where he is now.

“My uncle worked hard and recently retired well off. That farm was everything to him and to my aunt.”

We talk about the uncle’s hidden but brilliant plan for the young Justin. He had three cousins on the farm, and his uncle bought a bunch of lumber and put Justin to work with a challenge — make a playhouse for the younger girl.

The project was a full-on micro house — eight-by-eight, full-height walls, a roof, windows and a door, all finished in cedar shingles.

It was an after-school project, which Justin did on his own.

“I realized I had just built a building on my own. I totally remembered what my dad did as a framer. All that stuff stuck with me.”

That playhouse 20 years ago set Justin off into a world of construction, and this shed and micro-home business. Thus far, he’s built about a hundred sheds and office spaces.

Justin’s worked for Highline Homes in Salem, keeping busy as a commercial framer. Justin soon realized he could be his own boss, set his own schedule and make more money. Before shed making as a business enterprise, he worked in full home-building construction, but the jobs dried up during the 2008 recession.

“I could have quit and done something else after the jobs dried up. Instead, I built sheds, utilizing my construction skills.”

Justin reminds himself while speaking to me that building sheds got him his first home, got him a nice truck and trailer, and has helped to support his significant other, Emily, and her four children.

All of these skills he learned came from job sites his father, albeit as a divorced dad, took him on. He learned to do grunt work, observed the intricacies of a job site, and picked up vital carpentry skills that got him that golden prize — a complete, cool playhouse built by his own two hands.

It’s clear that once he starts a job, Justin is like a Tasmanian devil: “Once I get that job in front of me, I can’t stop.”

This is one work ethic that is a win-win for his clients who put down several thousand dollars for a nice outbuilding that not only serves as office or studio space, but enhances any property’s value.

“I knew early on I wanted to be a framer, to be in construction.” Luckily for Justin, his Yakima uncle instilled in him to shoot higher — be your own boss, work smarter not harder, and don’t make a living just doing grunt work for someone else.

 

In ordinary life, a mentor can guide a young man through various disciplines, helping to bring him out of boyhood into manhood; and that in turn is associated not with body building, but with building an emotional body capable of containing more than one sort of ecstasy.”

–Robert Bly, Iron John: A Book About Men

Justin and I talk about the failing school system, how tough it is to work with young men today to motivate them, and what it means to be a man in this world where sometimes the headlines and book titles can be off-putting: “Adam’s Curse: A Future without Men;” “The Y Chromosome is Disappearing — So What will Happen to Men?” “Do We Need Men?” “Are Men Going Extinct — Some Experts Give Men Five Million Years.”

While his biological dad always worked and even took the young Justin to job sites, expecting the 8-year-old to throw in as a laborer, Justin is conflicted by some of his relationships with men.

I wish I had listened to the advice of men when I was younger. You know, listened to my buddies’ dads. If I had, I’d be in a lot better place.

He lists off more savings, sticking to one thing and not frittering from job to job, better investment strategies, and making a plan as some of those mentor men’s tips he let go by the wayside. He labored hard in his 20s, framing, but it was working for Friday nights to come around in order to hit the bars and find parties.

This is where a simple story about a plain 10-by-20-foot shed turns into a deeper conversation about the meaning of life, and the meaning of what it takes to raise children — boys in particular — to help them make it in life with a sense of dignity, respect and work ethic.

We talk about Michael Crawford’s book, Shop Class as Soulcraft: An Inquiry into the Value of Work — Two of this philosopher’s words resonate when I speak to Justin —

• Craftsmanship entails learning to do one thing really well, while the ideal of the new economy is to be able to learn new things, celebrating potential rather than achievement.

• Craftsmanship means dwelling on a task for a long time and going deeply into it, because you want to get it right.

While Justin has upped his game with a nice website with amazing photographs of his craftsmanship encouraged by his spouse, Emily, he looks at the value of his skills translated into what young men and women might gain by working with their hands and brains.

A few years ago, Justin was hiring others to help with the shed projects. He could get one of these 10-by-20 sheds up in two days with that help. “I ended up shaking hands, developing quotes and running around getting materials. I wanted to put hands on projects. I had friends and their families who depended on me.”

Have Tools, Will Travel

Now he’s going at these projects alone, putting five or six days into the solo work. This gives him a lot of time to think what he might be doing to not only help his spouse’s two boys, 13 and 16, but to serve his community.

We talk about the housing crisis, about veterans who are homeless, about families not finding any affordable housing. The other crisis — PK12 education — might be the interconnected salvation for a county and state that face colluding forces that tear at the fabric of communities, down to the family level.

Justin drills down into the truancy issues of these two boys, and discusses how young men want to mimic gang-like behavior or even associate themselves with miscreants or wannabe gang-bangers while also skirting doing an honest, hard day’s work. Justin laments what he sees as young men and boys demonstrating a complete lack of respect for their elders, parents.

We both agree that having boys and girls building things, and planning, designing and following through on projects like building greenhouses, sheds, chicken coops would go a long way in the right direction to enable our youth to bring both meaning and skills to their young lives.

Justin and I talk while he puts up a shed, and he asks me about my work in education, about a writing project I am engrossed in to virtually explode the myths that tinkering with public education will make it better. “I have had these questions rolling around my head for a long time, but meeting you, I see what needs to be done.”

Hands-on, no more classrooms. Then, teachers that are inspired, inspiring and with multiple disciplines. We talk about getting youth to raise vegetables, chickens, orchards (permaculture). We talk about youth figuring out how to plan, draft, carry out and finish a building project, like a tiny home for needy people within their own community. We talk about teach-ins — having members of the community come to schools on a monthly or weekly basis instructing youth on their myriad avocations, skills and professions in these elegant round-table community engagements.

Justin wants to figure himself into this mix, working his magic as a builder to mentor and instruct youth on building something that is permanent, things that they can look at with pride.

“Not many young people are learning a trade. With that lack of hands on skill set, they are not getting any sense of accomplishment.”

Answers for Life

In his busy schedule working on this job on our coast, dealing with intermittent rain deluges and sunny breaks in the weather, Justin seriously pondered these questions I raised:

1. What does it mean to be a young man in America today?

For Justin, he sees struggle for young men, and confusion. “They have no solid ground to stand on as males.” He believes that too much screen time, too many other distractions and general parental lack of discipline add to the struggle. Justin isn’t thrilled with the economy getting Balkanized with fewer and fewer small businesses and apprenticeship opportunities.

2. Is there much difference from when you were 17, 20 years ago, then what it is to be 17 today in the USA?

3. How can we motivate young men to follow through, have a work ethic and care about doing honest work and living authentically?

We both believe that the education system — where youth spend 200 days a year, eight hours a day in the “system” — needs overhauling. Justin would like to have a part of educating, working with both disadvantaged youth and others on valuing their minds, bodies and creative spirits doing things with their hands. The “doing and making of things” he emphasized, and Justin means anything from skills working with engines, farming, building, crafting and engineering.

4. One word to describe your work ethic?

Obsessed.

5. Is building a shed creative work? If so, explain.

Just watching Justin go into a project, I can see he is thinking a mile a minute, putting the pieces together in his head. The craft involves architectonics and design and aesthetics.

6. If you weren’t building sheds and framing, what would you be doing?

He tried his hand at logging, and while working like a mule on big construction sites taught him the value of hard work and refining skills, Justin seems to be at place designing, marketing and organizing construction projects, from inception to completion.

7. What do you like about the Central Coast of Oregon?

He impresses upon me that the places on the coast still are and feel like small towns with people willing to get to know neighbors and customers. Just on one job site, all the neighbors around the project site talked with him. More than a half dozen drive-by neighbors looked at his project as it was being put up.

8. Define success.

He sees self-sufficiency and having the flexibility to be his own boss. Justin considers himself “homeless” in that he has no apartment or house mortgage, and he lives on the road, sometimes in his big truck while completing projects. His significant other of 10 years is a safe harbor from the constant dislocation, yet Justin says with all the tools, the trailer and his truck and his skills, he can virtually go anywhere and do his trade.

9. Define failure.

“Simply, being my own man.” Justin emphasizes the person in that statement. He thinks that if he was doing things to cut corners or to scam or rip-off people, he’d be a failure. Do unto others as you would have people do unto you.

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We end on a complicated note: More and more companies like Amazon and the like have kits for both sheds, tiny homes and other building types. “I am told by some that, ‘Hey, your shed is $2,000 more than what I saw at Costco for a kit.’ Well, I laugh and tell them good luck with putting up that product by yourself.”

With Justin working here in Waldport, he’s stayed at a local resort for days, he’s been to restaurants, shopped at the locally-owned Ray’s Market for groceries, put gas in his truck at the local Chevron, and purchased construction items at the locally-owned lumber yard and hardware store.

That multiplier effect is not the only value-added service JM Sheds provides the Coast. We get to see a hometown kid done good, pounding and sawing away, on site, with all the personal touches you can’t get from a kit sent to you from Amazon or IKEA.