“Stocks Slammed as Dow Erases 2012 Gains”

That’s the title to a headline piece over at CNN.

The Dow Jones industrial average (INDU) plunged 275 points, or 2.2%, the biggest one-day drop since November. The blue-chip index gave up all its gains for the year, and is now 99 points below where it finished 2011. The S&P 500 (SPX) lost 32 points, or 2.5%, and the Nasdaq (COMP) dropped 80 points, or 2.8%.

Ouch. The cause of the plunge?

“The U.S. employment report was simply terrible,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

The May jobs report showed only 69,000 jobs were added to payrolls, less than half the 150,000 jobs forecast by economists surveyed by CNNMoney. The unemployment rate ticked higher for the first time in a year, rising to 8.2%.

I take three things away from this: Continue reading

The Future of NATO

The recent NATO summit in Chicago that produced absolutely nothing has opponents of the alliance smelling blood. Indeed, the only thing that the Chicago summit may have produced is a healthy recognition by many factions that the future of NATO itself is increasingly in doubt. This should come as no surprise to any of us here at the Notewriter’s consortium, but in some ways this development is surprising.

Even mainstream pundits, ensconced as they are in Beltway ideology, have begun to notice that the alliance is on its way out. From CNN’s Security Clearance blog (“security clearance”? Really?):

Europe’s collective fatigue with NATO’s globetrotting has often left the United States shouldering most of the burden, which is considered one of NATO’s greatest shortcomings. The United States now covers 75% of NATO defense budgets, while the majority of allies don’t even allocate NATO’s benchmark 2% of gross domestic product to defense.

Sharp reductions in European defense budgets have only increased dependence on the United States.

While realists have been bemoaning the alliance for decades, it has become apparent that the reality of the situation has finally smacked some sense into the Beltway consensus. This must be kind of like how libertarians felt after the collapse of the Berlin Wall in the late 1980’s.

Like the collapse of the Soviet Union, though, there are many things to be worried aboutwith the impending collapse of NATO. The major issue that the US should be worried about is deteriorating relations with Europe. While the American taxpayer got stuck subsidizing the defense of Europe for well over half a century, the relationships brought about by working together have proved fruitful, and in order to keep these relations on good terms, Washington should undertake policies that will further integrate American and European societies: freer trade.

There is no reason why there shouldn’t be a free trade zone between the whole of the US and Europe on the scale of the US itself or the EU (the same goes for the US and its nearest neighbors: Canada, Mexico, and the Caribbean).

One thing that American policymakers should not fear is the rise of a competitor in the form of a European superstate. This fear (or hope, if you are an American socialist) is off-base. Just think of Europe’s sclerotic answers to the worst economic crisis in its history, and then imagine a European Union trying to implement a common, cohesive foreign policy on a global scale like that of the US.

It isn’t possible. Not even states with highly centralized power structures like China can compete with the US in this regard, and the thought of Brussels actively trying to compete with the US in international relations is ludicrous.

The demise of NATO is ultimately a good thing. There is no need for a collective security alliance to combat a menacing Russia any longer. Moscow’s empire of Soviets is long gone, and its focus in the near future will be domestic and along its borders. NATO’s demise will also save the US a lot of money, and will spare the European people from the negative effects (like terrorist attacks) associated with supporting a worldwide hegemon. We can only hope that NATO’s demise comes sooner rather than later, and that each party involved will recognize that continued relations with each other, especially in regards to trading policy, are still vital to peace and prosperity.

Pure Racism and Chinese Dining

There are several kinds of racism. The roots and the dynamics of racism are among the most interesting sociological issues. Here is a small but important fragment of the whole matter. The most common kind of racism involves three separate mental operations: 1 Assign an individual to a group; 2 Assign certain undesirable features of character or culture to the same group; 3 Assign these same undesirable characteristics to the individual because he belongs to the group.

The most pure form of common racism I know used to make me laugh. Of late, it has begun to annoy me. Here is a relevant story.

I pick up my wife at the airport after a short trip. We go out to celebrate our reunion. My wife wants to eat Chinese food. There is a Chinese restaurant near the airport where I have had excellent dinners in the past. It’s a large and old establishment with many Chinese customers. In fact, every time I have been there, I was with Chinese friends.

We sit down a little early. I don’t like the early bird menu, of course; I don’t like the regular menu either; the “specials” menu is not much more attractive. None of these menus corresponds well with my golden memory of the several original meals I have had there. I ask the waitress if there is a Chinese menu with different dishes than are on the English-language menu. “No,” she says. My wife and I order the less boring dishes from the main menu. Continue reading

Some Musings on China: Why We Need Not Fear Beijing

The recent ouster of Bo Xilai from the Communist Party can provide an interesting glimpse into the political mechanisms of the Chinese state. The fact that Mr. Bo was dismissed for “corruption” charges means that he was probably doing something right, or that he was too sloppy with his privileges and embarrassed the wrong people. We all know that socialism, in all its forms, leads to benefits for the few at the expense of the many (remember the bailouts of Western financial institutions?), but Mr. Bo’s ouster deserves a closer look, because he was a fairly prominent politician, and was actually slated as a possible successor to Hu Jintao, the Communist party’s current boss.

What I want to focus on is the fact that Mr. Bo was ousted at all. This move means that Beijing is becoming increasingly responsive to the demands of its citizens. Indeed, as China continues to liberalize its markets, democratic initiatives, whether real or appeasing, will continue to bubble up throughout the fascist state. This is because democracy is the natural political order that arises out of market-based institutions (private property, international trade, etc.). The world will have to be careful with China’s democratic transition though. Democracy is not a good thing in itself, especially democracy that is based upon an allegiance to a state. I am thinking of France in the 19th century and Germany in the 20th, although the democracies that sprung up during the post-colonial revolutions can also be good examples.

The main ideas behind the post-colonial revolutions were state sovereignty and democracy – not liberty – and the results, I think, speak for themselves. Continue reading

Some Chinese Links

I apologize again for my lack of blogging activity lately.  I will be done with Finals on Thursday!

I regularly read Shanghaiist, a webzine of culture in Shanghai specifically and China generally, and I just came across this great bit of reporting on the ouster of one of the Communist Party’s most outspoken reformers, Bo Xilai.

In the piece, a list of outrages and speculation of Mr. Bo’s ouster are reprinted from Weibo, the Chinese version of Twitter.  Here are a few of them: Continue reading