US China Japan Quandary

As I write this, President Obama has ended his Asian tour (sounds rockstaresque). Although he was met by major protest nearly everywhere he went, from the Philippines where protestors were sprayed with water hoses to Malaysia, his main worry continues to be how to deal with Japan, an ally but at the same time not offend one of America’s largest holder of U.S. debt – China.

In word, President Obama stated that the US Japan alliance was "stronger than ever" adding in so many words that America opposes any efforts (by China) to undermine Japan’s administration of the disputed and uninhabited Diaoyu Islands in the East China Sea (note East China not East Japan).  By taking this position, The President basically questioned China's sovereignty and “legitimate interest," to use the words of foreign ministry spokesman Qin Gang, in the Diaoyu Islands, which they feel have nothing to do the Japan-US security treaty. Also, there remains the effort of the U.S. to implement Obamas GATT and NAFTA, the 12-nation Trans-Pacific Partnership (TPP), which excludes China.

Some may argue otherwise, but it should be remembered that since the fall of japan after WW 2, it was clear that a primary objective of the occupation of Japan would be U.S. military control in the region for decades to come albeit not originally outlined in the Potsdam Declaration as such. This was achieved when General Douglas MacArthur, along with a few staff WROTE the entire new constitution of Japan that has lasted ever since. Specifically via But the most unique and one of the most important provisions came in Article 9, which outlawed the creation of armed forces and the right to make war.

This is a difficult prospectus for the U.S. while mainstream media incessantly pounds that China is faltering economically, the question is compared to whom?  Not the U.S. for certain.   First, U.S. bureaucrats insist that the Chinese economy is in deep trouble, although the Chinese economy grewat 7.4% year-on-year for the first quarter of 2014. In particular when compared with the miniscule expanded 0.10 percent growth in the U.S. Gross DomesticProduct (GDP) observed in the first quarter of 2014 over the previous quarter.  And loot will continue to flow in to China given the global demand for copper, soybeans and multiple investments and trade arrangements between China and South America. China has a large hand and equal investment in Copper in both Chile and Peru and Iron in Brazil as well as sustainable energy development in Venezuela. Plus one must recognize the long standing relationship China and Trinidad have in the Caribbean. The reality is that South America now imports more from China than it does from the European Union, according to the U.N. economic agency for the region.

Then there is the issue with China and Russia , which appear to be making moves toward quitting using (diversifying) the US dollar or at least significantly cutting the dollar share in their forex reserves (a move that will most likely broaden the Yuan’s daily trading range). Add to this that from of January 2013 to the end of July, the Bank of Russia reduced its stockpile of US Treasury securities from USD 164.4 billion to USD 131.6 billion (a reduction of US Treasury obligations by USD 32.8 billion, or by 20 percent), there are some serious issues on the table for the administration to address and not just give window dressing.

Even more important is that the military containment of China for the U.S. is the main reason this administration has proffered unequivocal support for Japan, although they are well aware that such may have a dire impact and strain on the U.S. economy.  Specifically, speaking, if China desires to retaliate, in concert with Russia and other BRIC nations, the result could led to starting the demise of the dollar – meaning the American way of living will be severely impacted as a consequence with growing levels of inflation in the form of increases in the cost of food, clothing and gasoline and utilities.

It should be reminded, give the manner in which the U.S. has targeted Russia for what has occurred in the Ukraine, and leaving China out of the TPP talks, what we observe as closer interaction between Beijing and Moscow are really about protecting their domestic economies. But it is not farfetched to see that is they continue this close corporate, an outcome of bad and poorly thought-out U.S. foreign policy could be a direct challenge and attack on the dollar.

The U.S. concerns in China will prove to be challenging for the present administration. For one they are all over the place in policy and tend to reflect a moderately satirical ineptness to the goals and aims of their foreign policy efforts.  On the other, I am still waiting (as I suspect others) for  Mr. Obama to define what he means by “rebalancing” U.S. policy towards Asia, when his actions show opposite and even worse, the same old U.S. approach. By this I mean the neocolonial zeal reflected in President Obama’s desire to re-occupy the Philippines consequently continuing the United States historical imperialist agenda in Asia.

China has the second largest economy in the world and recently it has been project to pass the U.S, before the next year, with some economist suggesting that the size of the Chinese economy will become three times larger than the U.S. economy by the year 2040. The concern is that much of the U.S. dollar’s valuation stems from its lock on the oil industry and if China and Russia and the BRIC nations can accomplish this, next thing is the dollar is gone and  gold will rise. As I write and you read, Iran is already in the field trying out a non-dollar based international trade system.

It will be hard for Obama to both keep from upsetting China and at the same time appease Japan, as current news reports in the region have noted.  It is the administration desire to maintain U.S. military hegemony in both Malaysiaand Philippines, by making sure neither nation ever reach the strength militarily equal to Vietnam, as well as do all possible to prevent China from reaching parity with the U.S as a naval power that could eventually challenge American in the Indian Ocean and the Western Pacific. The obstacle is, has the Obama administration really thought about what their actions may result in, or are they just making it up as they go like they were in a game of pick-up and run?

Federal Government Forgets I am a man

This week reminds me of why Martin Luther King, Jr. was in my home town when he met his untimely murder. It was because of the garbage strike, I suspect many folk don’t know about it to even care, or even understand its corollary with today’s US economic crisis.

Ask any Black person, and they will say the economy is growing. They will also say that it is all because of the policies of President Barack Obama. Ask the same folk how the dollar is doing in the world and the present US economic picture for employment prospects, and they will say he is doing his best and that it will take time, or that he is not just the President for Black Americans. But you never hear such pronouncements with respect to Jewish people, Gay or Lesbians or even Hollywood. They get mentioned and African Americans are conveniently left out of the conversation.

Now I am writing about the economic situation America finds itself in but I want to make this lucidly terse - I was objectively as critical about former commanders in chief starting with Regan and I will continue to be until my dying years as long as I can both read and write. But never have I been attacked prior (and I expected to be attacked) by my own folks for pointing out mathematical facts. For I know some uppity progressive, quasi-liberal, libertarian hating black political pundit will take aim and me and ridicule my suppositions, even if they don’t have facts on their side, all to protect the current Teflon President.

Again, proponents blinded by party affiliation will say the economy is growing and will give the President Props and if it is doing bad will blame it on the GOP. I think both are equally responsible but if it is so good, then tell that to the average African American or college student who is under employed or unemployed.

Fact is many recent college graduates are working at coffee shops and tend to be very skilled workers with higher degrees. In addition, each day they are increasingly ending up in lower-skilled jobs that don't really require a degree. This means they are making it even harder for unskilled workers who usually get such jobs out of the work force and yet, the present administration has offered no policy response to deal with this phenomenon. And by the way, the unskilled can be a synonym for the African American worker.

The US Labor Department reports that approximately 280,000 Americans with bachelor’s degrees and 37,000 with advanced degrees were working minimum-wage jobs in 2012 and that the number of college-educated Americans working such jobs has risen 70 percent in the past 10 years ( a figure double the number who worked minimum-wage jobs before the Great Recession).

The reality is that the high-wage, middle-skilled job — the thing that sustained the middle class in the past no longer exist. Although the mantra of the economy is getting better is batted around like a whiffle ball, the math shows us that the U.S. economy is in a bubble inflated by money created out of thin air by the federal reserve, and all of this money, instead of creating jobs, is going into the stock market by already well-off and wealthy folks. And this cannot and will not last. Obama’s approach is just as Regan’s economic approach - “trickle down.” When the Federal Reserve prints new money, it is basically reducing or stealing the value of the dollar (all the money you have in your bank accounts and wallet).

The math shows us that the Federal Reserve Bank is buying approximately $85 billion in assets every month, while at the same time keeping its key interest rate near zero. This does nothing to reduce unemployment or create jobs but rather only serves investors and big wig traders in the various stock and bond markets. This is why corporate profits and Stock prices are up. The question remains, why isn’t anyone hiring?

Fifteen percent of Americans are on food stamps according to the latest USDA report for November 2012. To put it plainly, in America, there are two economies - one for the rich, and the other for everyone else. The number of Americans on food stamps now exceeds the combined populations of "Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming." If one is lucky to have a job, it goes on deaf ears that the average worker’s hourly wages, after accounting for inflation, were nearly 2 percent lower this year than last year, and in total is taking home less than $800 a week.

As it stands one in four of every US citizens that is employed has a job that pays $10 an hour or less and for the first time ever, more than a million public school students in the United States are homeless. To top it all off, the U.S Dollar is losing its status as the world reserve currency. Just last week, five of the top ten economies in the world, decided to no longer use the dollar as an intermediary currency for trade. Last week the BRICS (Brazil, Russia, India, China and South Africa) agreed to set up a development bank to compete with the IMF, indicating it's gearing up to compete in a post-dollar world. In addition, Australia (the world's 12th-ranked economy), China (2nd behind the U.S.), Japan (3rd), Brazil (6th), India (9th), and Russia (10th), have agreed to bypass the dollar in bilateral trade with China.

President Obama and Geithner’s toxic asset plan has enabled one of the biggest transfer of wealth in history allowing for big banks to transfer their toxic debts from fraudulent activities to the American People. All the banks are doing is redistributing the nation’s wealth to shareholders and their top executives. This what President Obama has done, even with all his flossy rhetoric is assist the wealthy in get richer at everyone else’s expense. All of the monetary and economic policy of the last 3 years has helped the wealthiest and penalized everyone else. Wall Street is good but Main Street isn’t. How can it be when the richest 10% own 98.5% of all financial securities like stocks and bonds?

But for some reason or another, our economic prowess is always, or in most cases obviated by the inability to be critical of the current administration. For it seems as for most black folk, politics involved talking about President Obama and even his policies in the affirmative only, Trayvon Martin or the GOP. I don’t hear any of the TV propagandists of the African American community dare mention the president’s name in the same sentence with growing equity disparities, employment and poverty as a function of race. And you shole wont here nothing asserting that under the Obama administration, crony capitalism has gotten worse. As President, Obama is prosecuting fewer financial crimes than Bush, or his father, Clinton or even Ronald Reagan.

I recall of this as I said, on the week in which one of the greatest men to ever live was killed. King was in Memphis, marching with sanitation workers on strike for a living wage when he was killed. No one remembers the words he stated while delivering a speech a Stanford University a year before his death: “In this America people are poor by the millions. They find themselves perishing on a lonely island of poverty in the midst of a vast ocean of material prosperity.” And no one remembers how he frequently spoke about poverty and how that during his time, America had about 40 million people living in poverty. Obama seems to ignore that in America, the richest nation in the world today, there are almost 100 million people who are in poverty.

The sanitation strike in Memphis started because two sanitation workers, Echol Cole and Robert Walker died when they were crushed to death with the garbage and nobody noticed – crushed in the back of a garbage truck because during a sever rain storm, they were not allowed by the city to seek shelter from storms. Why because white folks in Memphis at the time didn’t like or want any of the all black sanitation workers to stop in their neighborhoods. Cole and Walker couldn’t fit inside of the truck, so they crawled in the back where the garbage was placed and a broom fell on the lever which resulted in them being crushed to death with the garbage.

I would wish that folks knew this and would never forget this, for this is where the slogan “I am a man. I am a man, not a piece of garbage" originated. It seems that the Federal Government in all of its aspects seems to forget that African Americans are people and that we are men, not the refuse and waste or cheap labor for the rich.

Jobs Report Isn’t Good News as Most Think

This past Friday, the August jobs report was released by the U.S. Bureau of Labor Statistics. According to the report, total nonfarm payroll employment rose by 96,000 in August, and the unemployment rate edged down to 8.1 percent. Specific employment increases were in food services and drinking places, in professional and technical services, and in health care.

Almost automatically, proponents of the Obama Administration as well as political pundits touted this as good news and as being proof of the effectiveness of the President’s economic policy. Unfortunately, few if any political talking heads discussed this in reference to the general citizenry of America or offer that the aforementioned may not be the case.

If one actually takes the time to read the report and do some basic math, they would clearly see that for the average American, the data does not provide such a rosy picture. First, is the obvious observation of that 119,000 fewer persons were employed in August compared to the month of July and that Manufacturing employment edged down in August (-15,000).

The reality is that around 89 million people in America are unemployed and the value of the dollar has started to retract if one pays any attention to the Forex markets. Moreover, Gold is up 3.1 percent and silver is up 7.1 percent when the administration and the Federal Reserve are thinking about another phase of quantitative easing (QE3).

Job loss will continue to be a problem for whoever is in the Whitehouse. In particular with the strange policies of the Federal reserve. Bernanke knew in 1988 that quantitative easing was ineffective work because bank lending channel typically close if banks have access to external sources of funding (other people money). Yet, Bernanke and the present administration continue to advocate that in order to revive economic growth and avert deflation, QE is a necessity.

The jobs reports show that QE only makes the rich richer. In fact the Fed has increased its balance sheet from $900 billion to $2.9 trillion the difference is $2 trillion (or 13% of GDP) while the job report shows that 58% of Jobs Created Pay Only $8 hour or less.

Now I know many will say I am just bashing Obama, that I am jealous of the President and that I just don't know what I'm talking about because the jobs report shows the President is doing a good job.  They may even say that the CBO (Congressional Budget Office), as the Presidents often states supports his economic policies. Unfortunately, on the CBO's track record, I trust them as much as I do a white man with a sheet to have lighter fluid and a match at a BBQ. Let the CBO tell it, from their unrealistic view of this economy, America never goes into a recession. 

Currently, the CBO is assuming a deficit of $3.5 trillion from 2012-2021 and if past history is any indication, they are at least likely off by 60% meaning it is really close to $10 trillion. Recall that just ten years ago, the CBO predicted that the US deficit would be at $7.6 trillion currently, but the actual number as of this week is above the $16 trillion mark. Between 2002 and 2010 all of their real GDP projections were between 2.6% and 2.9%. By overestimating growth, you overestimate revenues, which underestimate the deficit and gives politicians the impression they have more of our money to spend before they get into trouble.

Last week at the DNC, Obama suggested that he would cut the deficit but strongly asserted he would use money saved from the wars to reduce the deficit, which is strange since that money doesn’t exist since the war is being paid for by borrowed money mainly from China. All of this seems to be ignored when discussing the economy and the jobs picture, but what can one expect, for only by American math can you have 119,000 Fewer Employed in August than July and unemployment rate go down.

Fifty Percent Unemployment for Blacks in New York – may become national norm

With the growing troubles of the Eurozone economic crisis, most recently as it pertains to Greece, massive bailouts for Italy and Spain and a recent request for European Central Bank support for more loans for Cyprus, the US economy continues to stall with projections of stagnant growth and perpetual unemployment above 8 percent. Now, with major banks being downgraded across the nation, it is clear again that blacks will bear the brunt of the economic downturn.
Historically, blacks always suffer disproportionately in times of economic hardship. Today it may be even worse than past decades, in particular in urban areas. According to a new study conducted by Dr. James Parrott, chief economist for the Fiscal Policy Institute, more than half of all of African-Americans in New York city who were old enough to work had no job at all in the past year based on an analysis of employment data compiled by the federal Labor Department.

Dr. Parrott’s results indicate that 49.2 percent of all black women of working age in the city had jobs in the year that ended in May – a figure approximately equal to the rate for black men in the same period, as well as in the first four months of 2012. New York is just a microcosm of the nation. Real unemployment (when you included those incarcerated, who have dropped out of the job market or in college full-time) for African Americans is in excess of 40 percent in May urban areas including Memphis, Detroit, Chicago and Detroit among others.

Many factors contribute to these outside of racism and included, low literacy and graduation rates, lower numbers of African Americans attending college, and very few blacks involved or interested in math and science of which most employment opportunities currently exist. Regardless, if the trend continues, 50 percent unemployment in urban areas for African Americans may become the norm.

Washington’s New European Concern

I am blessed, first to have the family that I do and the fact that I am probably one of the only men in Atlanta who does not have cable and who has never seen basketball house wives or whatever it is called. Meaning I have more time to read and think about issues that are often avoided in American mainstream media on either side of the isle.

Over the past few years, in particularly with the election of President Barack Obama and the growing European sovereign debt crisis, I have noticed some uneasy and troubling signings in world politics. I think the war on terror brought all to the surface and things have only continued to grow tenser.

For me it started in Finland, with the rise of the True Finns, the right-wing Populist Party who last April, won 19 percent of the vote in Finland. Also there was what happened in Austria when the far-right Freedom Party (FPO), was able to obtain 29 percent of the votes giving their leader; Heinz-Christian Strache (who has been campaigning for months to kick Greece out of the euro zone) is the second-strongest party in Austria and a hard-line neo-Nazi party that desires to legalize Nazi symbols and supports the open belief of scientific racism. Both are considered far right extremists whom politics focus on xenophobic and anti-Islam positions common to the right wing politics across Europe including the British Nationalist Party (BNP).

There are still other nations of concern. In Hungary, the Jobbik won nearly 17 percent of the 2010 vote, and is one of two leading opposition parties along with Fidesz, who won an overwhelming Parliamentary majority last year. The conservative Fidesz party of Prime Minister Viktor Orban has passed laws restricting civil rights and basic freedoms that go against the country's EU membership. In Denmark, the Danish People's Party is the nation's third largest political organization, and has pushed Denmark to adopt some of Europe's strictest immigration laws. The British National Party has a policy that restricts membership to 'indigenous British people'.

As, Europe falls back into depression, the rise of authoritarianism, fascism, and the hard right wing will continue to grow and become a thorn in the side of US political concerns, in particular how we deal with the impact of these changes to our economy in a global market place. The economy of Europe is in dire straits with little if any growth occurring and extremely high rates of unemployment.

Now the wave is continuing across Europe in two of the hardest hit by the recent sovereign debt crisis – Greece and France. In Greece, the Independents (right-wing) and the far-right Greek neo-Nazi Golden Dawn party will hold more than 50 seats in Parliament. This will be the first time in fifty years that the Golden Dawn party will enter parliament. Its leader, Nikolaos Michaloliakos and the party campaigned hard against illegal immigration, and its supporters wear black shirts, and its emblems resemble Nazi insignia. Both Greek party’s reject its bailout commitments and write off its debt.

In Greece, the party with the most seats is given the first opportunity to build a coalition government. It continues down the line based on number of members in party until each party is able to accomplish this. If it is not accomplished, the inability to secure a political majority to meet the terms of the second Greek bailout would likely result in a Greek exit from the EU and more financial trouble across the globe. This means that Greece has to approve more than 11 billion Euros in additional budget cuts by the end of June in order to receive the next round of bailout money. Seeing this is the sixth year of the nation’s economic contraction and no one wants to hear the word austerity we may as well expect them to be gone by all accounts.

Add to this the election of Socialist Francois Hollande in France. Like Greece who suggests that the election results are a referendum against German austerity policies, France election seems to show the same thing. However, the German government on Monday ruled out reworking the European Union’s fiscal pact despite request for such by French president-elect Francois Hollande. Hollande also states that he wants the very rich to pay 75 percent in income taxes and “plans to hike taxes on companies that distribute profits to shareholders instead of investing in their business.” Although he campaigned on being strong on anti-immigration, he has gone on record saying that he would give residency to illegal immigrants on a case-by-case basis. Hollande will be France’s first socialist president since 1995. His proposed policies as a consequence could have major implications for all of Europe.

If history is any indication political turmoil will only grow. Germany’s obsession with austerity and hard money if we recall, is one factor that resulted in the conditions that gave rise to Hitler. We have seen what extremes can occur in the case of Anders Behring Breivik – the self-proclaimed ‘counter-jihadist’. Breivik’s conservatism focused on a xenophobic hatred of Islam and of those groups, notably political parties like the Labor and Socialist Left parties that supported immigration and asylum laws increasing the European Islamic presence.

Washington has a serious problem. Tax increases I concert with sever austerity programs I Europe have brought the far right to the front in politics. Obama needs to take heed giving that he is taking the advice of Robert Reich and Paul Krugman, who both favor a large tax increase for the United States. Obama supports their endorsed a 70 percent top marginal tax rate but doing nothing to prevent the $494 billion tax increase set to occur automatically on January 1, 2013, when the Bush-era tax rates expire under current law. Europe’s difficulties are diametric opposition to the response of Washington. The recently proposed Obama budget will send the United States more deeply into debt.

Washington needs to pay attention and stop ignoring the seriousness and likely impact of what is happening in European fascist political rise on the US economy. For the reality is that a default by Greece or any other country in the 16-nation Eurozone would be potentially deadly not only for Europe, but America as well.