JOHN CHUCKMAN

POSTED RESPONSES TO A COLUMN BY CLIVE CROOK IN THE FINANCIAL TIMES

Well said, Mr. Crook.

And I think this points to an underlying truth about the government of America.

If a man as intelligent, optimistic, and hard-working as Obama can get things so wrong, who possibly can get them right?

He is being torn apart in the world’s mightiest, most unforgiving force-field,a set of demands from scores of directions, many or most irrational and unforgiving.

America’s national politics have many similarities to being caught in the gravitational pull of a black hole.

The force cannot be resisted, and there is only one possible end to the event: the object caught will be reduced to its constituent atomic particles.
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From another reader:

‘Another question: Is not “productivity” even more of an empty mantra than “competitiveness”?’

Empty mantra?

Productivity is a real and measurable quantity.

Unfortunately, in the popular mind, higher productivity means just something like just working harder, but that is not at all the case.

Take the example of two small farmers, one still using a hoe and spade and the other using a new small tractor.

No matter how hard the farmer with the hoe works, he can barely compete with the farmer who has a tractor. Indeed, the tractor makes such increases in productivity that its owner will be ready to buy more land since his tractor enables him to work more without a huge increase in time and other inputs. Or he may choose to do still other work with his tractor in his time freed up.

Productivity is the ratio of the amount of output (the product) to the amount of an input – often called a factor of production, as capital or labor, but most often measured in terms of labor. The ratio may be in terms of hours or dollars or still other measures.

It is possible to substitute up to a point more labor for capital goods like tractors if you have an economy with huge surpluses of underemployed labor, as has been the case of China or India, since hiring from this pool of labor does not raise costs.

Competitiveness is a nation’s (or a company’s, within a nation) ability to produce goods and services at lower cost, so long as that cost has adequate returns to the factors used in producing it.

The adequacy of the returns to factors of course varies from country to country and industry to industry: we know interest rates, the price of capital, and wages, the price of labor, vary.

The United States remains competitive in areas of high-technology and advanced services, but in all traditional industries it is pretty well uncompetitive.

Its car industry, for example, is just holding on through various artificial barriers and helps. Within a few years, China is going to come crashing into North America with quality products at lower cost.

We have already seen the results in recent decades: American real wages have dropped for decades.

But even in areas of high-technology and advanced services, countries like China and India are catching up. They invest in education and technology, and they appear to have natural intellectual gifts making them very comfortable with computers and engineering.

China today produces the world’s fastest super-computer and is entering areas like high-speed trains or advanced aeronautical products. India, with its language gift from the British Empire, is busy in areas like finance and banking and on-line computer services.

The world does not sit still. The rate of change in technology, which over the long term, drives economic growth, is on a steep rising curve, which means the rates of change we see will only continue to come faster and with greater impacts. America in no way possesses a unique grasp of technology or of the ability to adapt to its changes.

Indeed, it could well be argued that the ancient adaptations Asian people have made to group cooperation and civility are superior qualities for a rapidly changing world. Just so, their clear superior average endowment in mathematical ability – measured on many international tests – gives them a powerful underlying advantage.

America’s postwar period of easy superiority, a time when all serious competitors were prostrate, is now over – that is, the so-called American Dream, that glib, largely meaningless political slogan, is dead.

On top of those realities, America has so over-extended itself with debt and waste on war in every direction, there is a huge price to be paid before an equilibrium can be reached to even start new competitive efforts. Obama and other American leaders are not willing to say any of this.

It’s just more of the same-old, same-old blubbering and slogans, whether from Obama or the Tea Party.

 

 

JOHN CHUCKMAN

POSTED RESPONSE TO A COLUMN BY KONRAD YAKABUSKI IN TORONTO’S GLOBE AND MAIL

Competitiveness and innovation are never affected by government exhortations, nor indeed are they affected by any other exhortations, including those of business schools or “inspirational” speakers.

They come from the underlying real economic and financial conditions of a country and of the world in which it functions.

One can only look at the United States’ position in the world and offer a bitter smile at Obama’s empty words.

Debts of monumental proportions in every accounting from international balances to personal finance, idiotic pointless wars, and mindless military and security expenditures – all at the same time new competitors like China, India, Brazil, and even Russia grow to new strengths.

The United States is simply not competitive in so many areas of its economy. Nor is there any reason to believe that it can become so before undergoing a great deal of painful adjustment, the kind of adjustment its government works tirelessly to avoid.

Their government ignores reality because Americans are on average surely the world’s greatest whiny babies when it comes to painful adjustments.

It is their sense of boundless entitlement, fostered by countless dumb politicians blubbering in Fourth of July speeches about the American Dream and passing laws and budgets, year after year, which are completely irresponsible.

That is simply a one-way trip to nowhere, no matter how big your economy and how great some of its past performance.

But Americans are suckers for tent preachers, in everything from new product advertising to politics and self-help gurus helping themselves to people’s pocket books, and Obama is really starting to sound like one more of a tiresome breed.

The answer, of course, is for America to shut-up and roll its sleeves up – even then there are no guarantees of the same kind of future as it has enjoyed in the past – but you never fire America’s imagination by truth and reality.

Miracles, sermons, sugar plums, and fairy stories are always in demand.

 

 

JOHN CHUCKMAN

POSTED RESPONSE TO A COLUMN BY CLIVE CROOK IN THE FINANCIAL TIMES

You have put many of the relevant points very well, Clive Crook, and I think this an inevitable development.

America’s sweeping power and matchless affluence after WWII were temporary phenomena, the result all the world’s major competitors being flattened by war and America’s industries having just reached remarkable levels of output as the armory of democracy.

But all those competitors – Germany, Britain, Italy, and Japan – are today back and thriving.

Not only are they thriving but new remarkable competitors have emerged, especially China. And now we even have countries like Brazil and Russia starting to emerge.

Trade and economics are of course not zero-sum games, but competition always means there are relative winners and losers.

Americans, even the most humble of them, over the last half century have formed an iron-clad sense of entitlement. Their leaders have only force-fed them in this with jingo nonsense like “the American dream,” and the new (new in the postwar period) phenomena of mass marketing and advertising with new penetrating media have only further fed this fantasy belief.

Americans’ naïve religious propensity, the inheritance of Puritan genes, makes many of them extremely gullible to such nonsense as being special.

This entire set of beliefs and expectations works strongly against American competitiveness, and America simply is not competitive in many areas. It is living off its accumulated fat, as it were, in many respects.

Real wages for the middle class have done nothing but fall for decades. Americans have adjusted by such efforts as two spouses working and moving out to elephantine houses thrown-up on the deserts and in the cornfields. Both these strategies have pretty well been exhausted.

I would add, too, the important factor that American education has, on average, become inflated and lost a good deal of value. High graduation is practically guaranteed even for someone who barely reads.

Undergraduate degrees have suffered exactly the same decay in value. You can get an English degree in America without ever reading Shakespeare. You can get a degree in television studies or circus. You can get a degree just by playing basketball.

What these educational trends represent is the consumer portion of education taking over to a considerable extent from the human investment portion of education, a reflection surely of the postwar feelings of American entitlement, as in “my kids goin’ to college” even if the kid involved has no academic talent. Such education makes you competitive with precisely no one and only wastes resources in a form of consumption.

Another absolutely crucial area contributing to America’s decline is its long series of pointless, costly wars. Nothing is more wasteful than the military, but America’s sense of entitlement has fooled it into believing it can manipulate the world to its narrow interests and quite frankly uninformed prejudices.

America’s titanic investments in the pointless slaughters in Vietnam, Cambodia, Iraq, Afghanistan, and in many lesser efforts has been as unproductive as its decayed system of education.

You can’t keep doing stupid things – all the while pressuring everyone else to pretend that they are not stupid – forever, and I genuinely believe America has reached the limits. Our greatest future danger is America’s not recognizing these truths and adjusting appropriately, instead taking the John Wayne approach to the new world emerging, especially towards China.

JOHN CHUCKMAN

 

POSTED RESPONSE TO A COLUMN BY MARGARET WENTE IN TORONTO’S GLOBE AND MAIL‘This regime has taken so many lives. There’s got to be a time when it stops’

Ms. Wente appears now to have exhausted her rational mental faculties in the relentless drive to create propaganda supporting Israel’s military and the Pentagon.

The United States, I remind readers, has killed about a million people in Iraq, unknown tens of thousands in Afghanistan, and three million in Vietnam, and those numbers don’t count all the smaller murderous efforts like Somalia, Pakistan, Nicaragua, El Salvador, Panama, and its loving support for Israel’s bloody predations against largely defenseless people.

In the total of all these places, the United States has created millions of refugees and countless cripples.

It has overthrown legitimate governments all over the world, including democratic ones in Chile, Iran, and Guatamala.

But somehow, Ms. Wente assures us, Iran is so terrible?

Iran, which has started no wars in its entire modern history?

Iran, which while a theocracy (just like Israel) is a relatively open place where one may visit and a great deal of information flows (compared to many other societies on earth)?

Iran, compared to the 3 million annual cases of genital mutilation of women in Africa?

Iran, compared to the routine rape of girls by their fathers and other elders in Africa?

Iran, compare to the bride-burning in India?

Iran, compared to the hideous treatment of millions of widows, including young girls who had been married off for profit to old men who die, in India?

Iran, compared to occupied Afghanistan where a majority of women still wear the burka?

The world is filled with cruelties, and Iran is one of lesser parties to them, but Israel wants Iran attacked, so Ms. Wente does her duty churning out more unbalanced rubbish.
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One further thought.

And just whose holy book is it which commands the stoning of unfaithful women?

Israel doesn’t stone women, but the Ultra Orthodox there often attack women they regard as “loose.”

There have been cases in recent years of prostitutes having been burned alive in homes mysteriously set alight.