Shadow Government has a very good interview with the Kori Schake, the author of this new book. Here is what she says about this book in her own words:

It’s a book about American power: why it’s so predominant in the international order, whether it’s likely to remain so, and how current practices can be revised to reduce the cost to the United States of managing the system. Despite clarion calls about the end of the unipolar moment and the demise of American moral, financial, military, and diplomatic power, the United States remains the defining state in the international system and is likely to be so for at least several more decades. If there were a market for state power, now would be a great time to buy futures in American power.

Here’s the first question of the interview:

SG: How does the United States end up so successful in this round of globalization?

Schake: The resilience with which Americans have found new professions as manufacturing migrated to cheaper labor markets contrasts favorably with revanchist efforts by other wealthy states to artificially preserve the eroding economic order rather than encourage and shape change. It helps that the U.S. economy is an engine of job creation, but that is a result of explicit choices about labor market flexibility. The signature advantage of the U.S. economy is the risk tolerance of its work force: the economy sheds and create jobs, and people mostly accept that the nature of economic activity is uncertain.

The adaptability of American workers mirrors the general malleability of the country. In a globalizing order in which many societies are attempting to shield their traditions from external influence, American culture voraciously seeks out and incorporates new elements that further broaden its appeal. Americans are so accepting of change and risk that we have come to exemplify what others fear: globalization is often equated with Americanization.

Click here to read the rest of the interview…

Here’s a very insightful quote that poses fighting terrorism as a luxury that most other countries don’t have: “Compared with the ravages of HIV/AIDS on the labor force, managing food scarcity caused by environmental change, or establishing basic governance and education, America’s preoccupation with terrorism appears a luxury. It is therefore in our interest to devote more attention to solving the problems we are not afflicted with but that are essential to securing the assistance of states whose help we need.” Make sure to read the whole thing!

Zimbabwe’s central bank says it will soon introduce a 100 trillion dollar note as the once prosperous country battles to keep pace with hyperinflation that has caused many to abandon the country’s currency.

…

The new 100 trillion dollar bill would be worth about $300 in U.S. currency. A loaf of bread in Zimbabwe now costs about 300 billion Zimbabwean dollars — and like most commodities, the price increases every day.

Earlier this month, Zimbabwe introduced a 50 billion dollar bill as the country battles to fight cash shortages stemming from the world’s highest inflation rate. The official rate was 231 million percent as of July.

Source: CNN: Zimbabwe to print first $100 trillion note

Inflation and lack of confidence in the Zimbabwe dollar has caused many vendors to prefer the U.S. dollar, South African rand, or Botswanan pula. Doctors and nurses are even requesting their salaries paid in U.S. dollars.

As you probably know, the US has been working with NATO allies in Europe to bolster their missile defense system to provide protection for us and the rest of Europe in the event that Iran or other rogue nations attack. The agreement is to put 10 missile defense interceptors in northern Poland.

“Hours after the signing, Russia’s Foreign Ministry warned that Moscow’s response would go beyond diplomacy. The system to be based in Poland lacks ‘any target other than Russian intercontinental ballistic missiles,’ it said in a statement, ‘In this case Russia will be forced to react, and not only through diplomatic’ channels.” “Secretary of State Condoleezza Rice dismissed any suggestion the 10 missile defense interceptors … represent a threat to Russia. ‘Missile defense, of course, is aimed at no one,’ Rice said. ‘It is in our defense that we do this.’” “Such comments ‘border on the bizarre, frankly,’ Rice told reporters in Warsaw. ‘The Russians are losing their credibility,’ she said.” “‘It’s 2008 and the United States has a … firm treaty guarantee to defend Poland’s territory (my edit: as do all members of NATA) as if it was the territory of the United States. So it’s probably not wise to throw these threats around.’”

I don’t understand Russia’s complaint. We even offered to allow Russia to be a part of the missile defense deal. And we’ve told Russia that even its current stock of conventional weapons is no match for what this missile defense system offers. It is for defense not offense and would not work well against Russia. Some people have claimed that we would be up-in-arms if Russia signed a deal with Cuba and started putting missiles back there. That’s true, we probably would… The point is that this is not the same. We and our allies have a legitimate reason for worrying about attacks from other countries. Russia has no reason other than to attack for stationing missiles in Cuba.

Senator McCain’s statement:

STATEMENT BY JOHN MCCAIN ON RUSSIA’S AGGRESSION IN GEORGIA For Immediate Release

Contact: Press Office Friday, August 8, 2008

703-650-5550

ARLINGTON, VA — U.S. Senator John McCain issued the following statement regarding the current conflict between Georgia and Russia:

“Today, news reports indicate that Russian military forces crossed an internationally-recognized border into the sovereign territory of Georgia. Russia should immediately and unconditionally cease its military operations and withdraw all forces from sovereign Georgian territory. What is most critical now is to avoid further confrontation between Russian and Georgian military forces. The consequences for Euro-Atlantic stability and security are grave.

“The government of Georgia has called for a cease-fire and for a resumption of direct talks on South Ossetia with international mediators. The U.S. should immediately convene an emergency session of the United Nations Security Council to call on Russia to reverse course. The U.S. should immediately work with the EU and the OSCE to put diplomatic pressure on Russia to reverse this perilous course it has chosen. We should immediately call a meeting of the North Atlantic Council to assess Georgia’s security and review measures NATO can take to contribute to stabilizing this very dangerous situation. Finally, the international community needs to establish a truly independent and neutral peacekeeping force in South Ossetia.”

Senator Obama’s:

Statement of Senator Obama on Tensions in the Caucasus Region Between Georgia and Russia Chicago, IL | July 23, 2008

Chicago, IL — “Over the last several weeks, Russia and Georgia have been engaged in a steadily more dangerous confrontation over two secessionist regions of Georgia — South Ossetia and Abkhazia. Although these territories are located within Georgia’s internationally-recognized borders, the Russian government seems determined to challenge Georgia’s territorial integrity in both places. Developments took an especially provocative turn several days ago when four Russian warplanes violated Georgian airspace close to the Georgian capital for forty minutes.

All parties — Russia first and foremost — must now reduce tensions, avoid the risks of war, and reengage in peaceful negotiations.

As I stated in April of this year, I am committed to upholding the sovereignty and territorial integrity of Georgia. This commitment has long been a fundamental building block of U.S. policy, and it will not change under an Obama Administration. I also affirm Georgia’s right to pursue NATO membership. This aspiration in no way threatens the legitimate defense interests of Georgia’s neighbors.

Only a political settlement can resolve the conflicts over Abkhazia and South Ossetia. Russia needs to roll back the aggressive actions it has taken in the last three months. The Georgian…

“McCain needs only 213 words to get to the point and put out an actual coherent, step-by-step plan. [Obama has a lot of words but nothing of substance.] McCain knows that he can reliably put out a press release on foreign affairs without having to spend an introductory paragraph explaining to his supporters what the Hell is going on.”
(from http://www.redstate.com/diaries/redstate/2008/aug/08/comparing-the-two-candidates-statements-on-t/)
Read the rest of this entry »

While I was researching the German history of Czech occupation for the captions of my Prague photos, I came across some very interesting and scary photos. The author of the site, just entitled Nazi photos, writes, “The following photos provide a pictorial glimpse of Hitler, how his Nazis mixed religion with government, and the support for Hitler by the Protestant and Catholic Churches in Germany. In, no way, does this gallery of photos intend to support Nazism or anti-Semitism, but instead, intends to warn against them.”

“Although Hitler had problems with the Catholic Church and eventually wanted to replace Catholicism with his brand of Christianity, the very fact that Hitler wanted a united German Church proves that he supported Christianity.”

I still find it hard to believe that something like this could have happened so recently in a supposedly civilized (though that shouldn’t matter) Europe. Sadly, I feel like similar genocide is occurring in Africa and elsewhere but the world outcry has not yet been the same.

This Spring Break I visited the Czech Republic. One of the most memorable days was the tour of the Terezin concentration camp. Hitler wanted this camp to serve as the “model” ghetto. For detailed information please visit the Jewish Virtual Library’s article on Terezin. I went with a group of friends and we were fortunate enough to get an English speaking tour guide just for our group of about 10. Below are some of the photos from that trip and information that the tour guide gave to us. Click each picture to read more detail about it. My entire collection of Terezin photos begin here.

This Spring Break I had the amazing opportunity to visit Prague and various other areas in the Czech Republic and Germany. Most of the photos now have captions.

Great information if you are going to be visiting Prague: Ten Essentials to Experiencing Prague

Here’s an interesting article regarding recently updated GDP calculations:

China, it turns out, isn’t a $10-trillion economy on the brink of catching up with the United States. It is a $6-trillion economy, less than half our size. For the foreseeable future, China will have far less money to spend on its military and will face much deeper social and economic problems at home than experts previously believed.

What happened to $4 trillion in Chinese gross domestic product?

Statistics. When economists calculate a country’s gross domestic product, they add up the prices of the goods and services its economy produces and get a total — in dollars for the United States, euros for such countries as Germany and France and yuan for China. To compare countries’ GDP, they typically convert each country’s product into dollars.

The simplest way to do this is to use exchange rates. In 2006, the World Bank calculated that China produced 21 trillion yuan worth of goods and services. Using the market exchange rate of 7.8 yuan to the dollar, the bank pegged China’s GDP at $2.7 trillion.

That number is too low. For one thing, like many countries, China artificially manipulates the value of its currency. For another, many goods in less developed economies such as China and Mexico are much cheaper than they are in countries such as the United States.

To take these factors into account, economists compare prices from one economy to another and compute an adjusted GDP figure based on “purchasing-power parity.” The idea is that a country’s GDP adjusted for purchasing-power parity provides a more realistic measure of relative economic strength and of living standards than the unadjusted GDP numbers.

Unfortunately, comparing hundreds and even thousands of prices in almost 150 economies all over the world is a difficult thing to do. Concerned that its purchasing-power-parity numbers were out of whack, the World Bank went back to the drawing board and, with help from such countries as India and China, reviewed the data behind its GDP adjustments.

It learned that there is less difference between China’s domestic prices and those in such countries as the United States than previously thought. So the new purchasing-power-parity adjustment is smaller than the old one — and $4 trillion in Chinese GDP melts into air.

Continue reading: “The great fall of China”

This sounds like the making of an exciting stock market movie (if there could be such a thing.)

By Friday, January 18, Jérôme Kerviel, a junior suit in the banking world, was on the hook for €50 billion – the equivalent of about half of all the gold and currency reserves held by France. The sum also exceeded the entire value of the bank at which he worked.

The 31-year-old trader at Société Générale, one of France’s most prestigious institutions, had secretly set up a series of deals that were going horribly wrong. So wrong that they threatened the survival of the bank and the health of global financial markets.

…

The directors faced a stark choice. They could let Kerviel’s trades – essentially bets that the market would rise – run in the hope of markets recovering. But that risked even greater losses if shares continued to fall. Or they could close the positions and take the hit.

It was no choice really. The potential losses if shares continued downwards could destroy the bank. “I did my duty and decided to unwind these positions,” said Daniel Bouton, the chairman. The bank later accepted a lifeline from two big American banks to escape the financial black hole.

The timing could not have been worse. Fears of recession and the debt crisis had sent shivers through the stock markets. On Monday morning the Asian markets were already falling by the time trading started in Paris. Soc Gen was a forced seller in plummeting markets – during that day leading shares in London collapsed 5.5% and in Paris 6.8%. This only compounded Soc Gen’s losses.

By the time it had managed to close out all Kerviel’s positions, the bank was down almost €5 billion. And Kerviel was being blamed for fuelling a stock market nosedive that spurred the American Federal Reserve into the biggest cut in interest rates for 25 years. He was described by the governor of the Bank of France as “a genius of fraud”.

Continue reading…

Just a quick plug for my aluma mater, University of Wisconsin – Madison. On the latest ARWU “Top 500 Universities” list, UW-Madison was ranked #17. Ranking Methodology Go Badgers!