Crisis In The Ukraine Could Humiliate Obama and America By Default.


The Ukrainian crisis has the potential to become a major embarrassment for Obama and the US.  Here is why.

1.  Russia is not nearly as weak as it was in the 1990’s after the collapse of the Soviet Union.  Oil money has buffered Moscow and strengthened Putin’s grip on power.

2.  America is not nearly as strong as it was in the 1990’s.  The debacle in Iraq and the economic meltdown have damaged America’s standing in the world and its ability to act.  Add to this the recent Obama administration’s drastic military cuts and it makes it clear that America should not be feared.

3.  This is in Russia’s backyard and they deem the Crimea (which has a heavily Russian population) as Russian territory even though technically it is a part of the Ukraine.

4.  The Ukrainian president that was just forced from office was elected democratically to office although I am sure that it was corrupt.  This, along with the fact that the Crimea is heavily Russian provides Putin with the justification to intervene militarily.

5.  The West encouraged the demonstrators in the Ukraine but nobody should be fooled here.  There is no chance of the US or Europe putting boots on the ground to protect the Ukraine.

6.  The only thing the US and the West can do is talk tough and hope the Russians don’t call their bluff.  Putin knows this and he will call the bluff humiliating Obama and America by default.

7.  Obama’s much hyped “Russian reset” has been a total failure.  A pattern has developed here with Russia playing a major role in problems around the world.  Syria, Iran, and the Ukraine all have one thing in common, Russian interference.

 

http://www.telegraph.co.uk/news/worldnews/europe/ukraine/10667111/Ukraine-pleads-for-Britain-and-US-to-come-to-its-rescue-as-Russia-accused-of-invasion.html

 

American Trade Policies Are Destroying The Country


 

uncle-sam

Why do Americans continuously send politicians to Washington that support free trade when we are one of the few countries that actually truly believe in it.  Everyone else says they do to make us feel better about the fact that we have the world’s dumbest trade policies so they can keep taking advantage of us.  The fact of the matter is that the 2008 economic crisis was because of our moronic trade policies (the Chinese and others invested their obscene profits made from exporting goods to the US in US backed government securities which had the effect of artificially lowering mortgage rates in America thereby creating the housing bubble).

Is it fair to trade with China when we all know they artificially lower their currency to make their goods cheaper here?  Well, one might argue that we get the Chinese to finance our obscene budget deficit that runs over a trillion plus every year.  Fair enough, but does anybody really believe that we are getting good value for that extra trillion we borrow to finance our own governments horribly inefficient operations?  Also if the Chinese pretty much get open access to our market then why don’t we get open access to their market?  If an US auto manufacturer wants to export cars to China they have 3 choices.  First, they can export the cars from the US and pay a steep tariff that will double the price of the vehicle.  Second, they can export the cars in parts that would then be assembled in China ( they call them knock down kits).  Or finally, if they want to build the cars in China they are forced to partner with a Chinese competitor who then has the chance to get a free education on how to build cars to Western standards.  Does any of this sound like it is Free Trade?  Not to me it doesn’t and it begs the question as to why Americans put up with it?  I know this for sure we can’t continue these destructive policies for long because America is on its way to becoming a second world nation because of these policies.

Inspired
by conversation and driven by my personal artistic passion, I

Europoeans Left Undefended As US Shifts Focus To Asia And European Governments Slash Budgets


 

French President Hollande inspecting French troops in Afghanistan.

French President Hollande inspecting French troops in Afghanistan.

 

As the US begins to focus more on Asia and less on Europe there is a new reality for the people of Europe that they are defenseless.  Couple the US pivot to Asia with the fact that the economic crisis has forced many european governments to slash budgets and you have a situation in Europe where it is hard to see how they can defend themselves.  One might ask who exactly the enemy is they should be defending against?  While the answer is not necessarily obvious like it was during the Cold War there are capability gaps in european defense that need to be addressed.  First, europe is already within range of Iranian missiles so it would seem that missile defense should be a priority.  It also begs the question of why the US should be considering paying to provide europe with a missile defense?  The only possible answer would be to defend Europe in case the US strikes Iran but to me that should still mean that Europe should pay and not the US.  Europe also has no ability to project real power around the globe.  I dare say that they would even be hard pressed to be able to protect their interests abroad should they be threatened by even the most feeble of opponents.  Also Europe needs some credible military capability to at least be able to conduct operations with the US when it is in their interest too.  From enforcing future no fly zones or combating terrorism or piracy Europe should have some ability to at least be a contributing partner to future coalitions.  Lastly Europe should be thinking of ways to intervene (not miltarily) in collapsed european states in the near future.  Sooner or later if the situation does not improve in countries like Greece or worse Spain the EU will have to consider how they might deal with countries where the national government ceases to function effectively.  No, it has not come to that yet but if the economic crisis does not resolve itself soon it would be foolish to think that it could not happen.

Our US protector is looking the other way

The New Jeep Cherokee, The Auto Bailout, And How Obama Wasted Billions Of Your Money


fiatmoneyissues2

For the record I support at least the idea of the auto bailout.  To me it was obvious that if Bush and then Obama had not employed tax payer financing to GM and Chrysler then they would have imploded dragging down most of the domestic supplier industry, Ford (because they get their parts from the same domestic supplier base), hundreds of thousands of jobs, hundreds of billions perhaps even a trillion plus dollars lost, finally the possibility that the entire US economy would have been annihilated in the process.  Moron republicans can talk about how unjust and what a waste of tax payer money the auto bailout was.  Many of these are the same people who mindlessly supported the Iraq war and the thousands it killed and trillion plus it wasted and now they finally get religion about not wanting to waste the public money even if it is an attempt to save the US economy.

Having said all of the above I always have had a problem with how the bailout was done.  To me Bush should have bucked up and been a little more involved instead of extending a life line and then deferring to the next administration because Obama has definitely screwed the bailout up.  Yes the Obama bailout is better than the financial ruin as the alternative but it sure seems a waste to have bailed out GM only to have allowed an incompetent bungler like Dan Akerson to be in charge over there.  From his brilliant idea to keep GM’s European subsidiary Opel (which has lost billions of tax payer dollars since the bailout) instead of selling it like the ousted CEO Fritz Henderson wanted, to horrible interference on the latest Chevy Malibu that resulted in a brand new model being out sold by the older model it was replacing.  It has since been announced that it will have an emergency redesign to help rid itself of the “Akerson Effect”.

The story is different at Chrysler but the result could end up being the same.  Obama literally gave part of Chrysler to Italian automaker Fiat run by Sergio Marchionne.  To his credit Marchionne has done a much better job of leading Chrysler and the results in sales are there to back him up.  On the down side is that Fiat is getting destroyed in Europe and losing billions of dollars.  Now you have Marchionne trying to buy the rest of the stake in Chrysler so he can use Chrysler’s profits from the US to prop his loser Italian auto brand.  Enter the all new Jeep Cherokee, perhaps with the ugliest front end in the history of the suv.  This” distinctive” front end design was brought about because Marchionne wanted to save money to help prop up Fiat in Europe.  It’s not just me who thinks this but there have been articles about this in the Wall Street Journal and Autoblog (where I originally got the idea for this piece).  The consistent theme between GM and Chrysler is that the bail out was necessary but if we are going to bail out these automakers with tax payers money we should at least set them up for success by not appointing someone with no automotive industry experience like Akerson or not throwing Chrysler to a bankrupt European automaker who is planning on stealing Chrysler’s US profits to keep afloat Fiat.

Jeep Cherokee faces on-sale delay

European Union Wins the Nobel Peace Prize, Norway No Longer Taken Serious


In what has to be considered one of the biggest pranks in the history of the Nobel Peace Prize the panel in charge of giving out the award decided on the European Union as this years recipient.  The rationale is simple I suppose in that one of the reasons the EU was founded was to integrate Europe to lessen the chance for war between member countries.  Since its founding no member state has fought another.  What those in charge of the award seem to have conveniently forgotten was the role that NATO played in Europe since the end of World War II.  Specifically the contributions of the US, UK, and Canada.  For it was these 3 members of NATO that do not reside on the continent of Europe but still provided literally hundreds of thousands of soldiers as a part of the NATO frame work to keep the peace on the continent that should have been awarded the Nobel Peace Prize.

The reason I say this is simple  because nothing the EU is credited with having done would have been possible without the soldiers from these countries literally making the possibility of war between member states all but impossible.  Frankly the award being given to the EU for what NATO really accomplished is a slap in the face to all those who served in Europe as a part of NATO.  The reality of what happened last week was that the EU received an award that NATO should have been given.  This happened not because the EU deserved the award but because the EU is falling apart and those in charge wanted to give the organization some positive news for once.  This attempt at positive reinforcement failed miserably because any rational thinkers outside of mainland Europe know the EU is undeserving of the award.  The end result has thus been to further tarnish a damaged brand that already had looked incredibly incompetent after awarding the prize to President Obama who had done nothing to deserve it.  Perhaps it’s time to recognize that the award and the publicity that goes with it just is not what it has been hyped up to be.  To be honest it has become a joke.

http://blog.norway.com/2012/

BAE, EADS And Britain In The 21st Century


The proposed merger between BAE, the British defense conglomerate, and EADS, the multi-country European aerospace and defense giant is more than a merger of two companies.  It could quite literally help dictate whether Britain remains a proud, independent nation in the world or becomes ever more stuck in the quick sand that Europe and the EU have become.  You might ask yourself how could the merger of two companies could determine the fate of not only nations but perhaps even an entire continent?  The answer is simple, if BAE merges with EADS it will destroy what is left of the British owned industrial base in Britain.  Britain will still have a manufacturing sector within its borders but less and less of it will actually be owned by Britain.  Most of the major car manufacturers are owned by foreign companies, Jaguar by Tata, Mini by BMW, etc.  In fact the defense  industry in Britain led by BAE has been one of the few bright spots for British owned manufacturing in the country and the merger with EADS raises serious questions about whether or not there will be any major British owned industrial companies left if it goes through.  Ceding one of your last strong domestic manufacturing industries to the French is not sound policy.

This is because the merger will accomplish two things, first the company will no longer be British, second the new company will stand to lose access to the all important US defense market.  The fact that the company will no longer be headquartered in Britain might not sound like a big deal at first but then you play out a few scenarios in your head like how do companies achieve synergies when they merge.  Well first off they would eliminate redundancies within the new company.  So that means since BAE is the junior partner in this deal then you could expect much of the white-collar jobs in Britain will quickly be eliminated in order to achieve maximum cost savings.  Hundreds, probably thousands of top paying jobs all eliminated.  Second, the current British government has already done its best to destroy its own armed forces by enacting drastic cuts that happen to be one of the reasons BAE is even contemplating this.  Since they are already dismantling their defense industrial base right now does anybody in Britain really think they will have any incentive to carry out big defense projects like the proposed new British nuclear submarines.  One of the few current incentives about doing this is that it will help maintain the defense industry jobs but if the merger goes through will that still be the case since at least some if not a large amount of the work will be done outside Britain.  I think not.

Secondly, roughly 40% of BAE’s profits come from doing work in the gigantic US defense industry.  They are one of the few foreign companies allowed to do this.  Other companies like EADS do business with the pentagon but are not allowed access to advanced technologies to safe guard intellectual property.  This is not the case with BAE because they have special agreements with the US government allowing them to share in this defense work.  The reason for this is simple, they are British.  Because the obvious special relationship they get access that others like the French and Germans don’t and never will.  This alone should give both BAE and EADS pause about the merger.

Finally, if the deal goes through Britain will be drawn closer to Europe at a time when the Continent is in steep decline.  Losing access to the US market will force the new company to look even more to Europe for work.  This in turn will force the UK to get deeper involved with the EU at a time when many in the country want less to do with it.  And if your forced to look more towards Europe they will no longer be able to be that close to the US.  If I were British I would advocate less severe defense cuts both to maintain capabilities but also to maintain an important part of their economy.  I would also focus even more on joint work in the US defense industry because one, it is bigger and two, you don’t have to surrender more of your sovereignty to the failing EU.

Minefields await for EADS-BAE deal

http://www.rusi.org/analysis/commentary/ref:C50534A0EA81CF/

http://www.thisismoney.co.uk/money/markets/article-2202939/BAE-Systems-merger-EADS-faces-flak-sides.html

Consequences Of Globalization


It is interesting to see the consequences of globalization taking place all around the world today.  People so often in the 90’s talked about how globalization would improve people’s lives across the globe.  To be fair to some degree that has happened in places like China where several hundred million people have been lifted out of poverty by moving from the countryside to the urban manufacturing centers of China.  Other nations like Germany have also benefited greatly from globalization in the form of the EU.  With the barriers to trade removed from the internal European market German companies have proceeded to destroy their fellow European competition and reap the rewards.  Unfortunately these two examples of countries benefiting from globalization have also cast a dark shadow across many other countries who have suffered while China and Germany have benefited.  In China’s case many of the jobs in manufacturing that now power the Chinese economy were once based in America.  The fallout from this in America has been significant because many of the jobs lost to China were some of the best paying jobs a non skilled worker could find in America.  Recently in the last several years there has been a small glimmer of hope in the American manufacturing sector where instead of losing jobs they have actually begun adding some.  It remains to be seen if this is just part of the economy coming back from the lows of the economic meltdown in 2008 or if this is part of a new trend of increased American industrial production over the long term.

The situation in Europe seems more straight forward where there is little doubt that the Euro has made life much more difficult for countries like Greece, Italy, and Spain to compete with Germany since they can no longer devalue their own currency to become more competitive.  The result has been that much of southern Europe chose to use debt to fuel economic growth (much like America has done) instead of trying to make their economies more competitive.  The consequences of this have been tragic for those countries with some like Greece in what can only be described as a economci depression.  One thing is for certain, you don’t seem to hear nearly as many world leaders talking up the benefits of globalization because the real long term consequences have now manifested themselves and it is not a very pretty picture.