Politics – Economics Related – Page 4 – education and deconstruction.com

Start-Up Nation

The Book of the Week is “Start-Up Nation, The Story of Israel’s Economic Miracle” by Dan Senor and Saul Singer, published in 2009. The authors of this extended essay ponder why Israel had, at the book’s writing, a huger number of tech start-ups than all other industrialized nations, second only to the United States’. The reasons range from the cultural to the political to the economic.

The Israeli corporate and military mentality involves: complete focus; learning from errors (which are tolerated and treated as learning experiences); constant debriefings and self-criticism sessions; endless, heated debate; and empowerment of employees at all status levels to use their initiative and resources– even to the point of upstaging their bosses with their input. This atmosphere encourages independent thinking, and discourages herd mentality and blind obedience.

Militarily, all Israelis serve a minimum of two to three years and then become reservists for two more decades. Close social ties are formed that foster business relationships later. The exceptional rising stars participate in special nine-year training programs that create “foxes” rather than “hedgehogs.” Foxes use diverse skills from operating and maintaining high-tech equipment to imaginatively solving problems.

After serving their country, many Israelis then attend university. Finally, employers consider quality and quantity of military experience as major hiring criteria.

The authors provided real-life examples of how the traits Israelis possess cause them to gravitate toward entrepreneurial ventures. In 1965, in one instance, kibbutzniks digging a well hoping to find drinking water instead encountered warm, salty water. A creative academic advised them to breed tropical food-fish. By-products of the fish-farm were used for fertilizer for their olive and date trees.

Read the book to learn of additional characteristics of and actions taken by Israelis and their government that have helped them achieve technological advances in various economically rewarding areas, including medicine, auto manufacturing and computing.

Chocolate Nations

The Book of the Week is “Chocolate Nations, Living and Dying for Cocoa in West Africa” by Orla Ryan, published in 2011. This slim volume described the situations in Ghana and Cote d’Ivoire at the book’s writing, with regard to growing the crop that ultimately becomes chocolate. Both countries had command economies and a large number of farmers with small landholdings growing the cocoa-bean trees.

Ghana has grown cocoa at least since the late 1800’s. Even after it declared its independence from Great Britain in 1957, it had a series of tyrannical leaders, each replacing the next via coups. They kept the farmers poverty-stricken by setting the price the government paid for cocoa. Some farmers illegally sold their harvests to Cote d’Ivoire for better prices. Around 2009, Ghana was producing approximately one fifth of the world’s cocoa; Cote d’Ivoire, about one third.

Even after independence in 1960, the latter’s former colonizer, France, invested in cocoa farming there. However, the dictator became well-liked by encouraging laborers from Burkina Faso and Mali to farm cocoa and coffee in his country. He gave land to those from the Baoule tribe who tilled it. His excessive spending to support his lifestyle and that of his loyal servants, resulted in huge debts, which he tried to reduce by cutting wholesale prices paid to cocoa farmers. The nation saw a bloody civil war from 2000 to 2003.

In the first decade of the 21st century, hysteria ruled the airwaves in the United States over the accusation of abusive child labor on the cocoa farms. It was unclear whether the accusation was true, as data were anecdotal, ulterior motives abounded among the accusers (such as NGOs, tabloid reporters and even a politician), and the culture of the cocoa growers provided plausible denial that truant children were being enslaved. For, farming families tended to be large so that the kids’ assistance could help keep the family in business.

It appears that cocoa farming is unlikely to change significantly in the near future in Ghana and Cote d’Ivoire because “For smallholders, the cocoa market can seem little more than a plaything in the hands of a few large companies and speculators.”

Read the book to learn more details.

The Age of Turbulence

The Book of the Week is “The Age of Turbulence” by Alan Greenspan, published in 2007. This is a career memoir / global macroeconomics overview in one tome. Perhaps it should have been split into two books so as to be more comprehensive, as the author, in describing the recent economic affairs of India, Russia and China, failed to mention major factors in connection therewith; such as the caste system, Jeffrey Sachs’ advice to Boris Yeltsin, and a detailed description of China’s one-child policy.

Born in 1926, Greenspan studied business and finance at New York University after WWII. While there, he spent two months on freelance work doing economics research. It involved pencil, paper and a slide rule. These days, it would take minutes and involve software.

In August 1974, the author was appointed chairman of the Council of Economic Advisors. He cited President Nixon’s price and wage controls as an example of government action that leads to resistance from the market. The first quarter of 1976 saw the U.S. economy grow at 9.3% and the second quarter, at less than 2%. Greenspan was not alarmed by this kind of extreme swing; however, the slowing economy caused voters to choose Jimmy Carter over Gerald Ford for president in 1976. During Carter’s term, economists learned that the way for a country to achieve long-term prosperity is to control inflation. The reason Carter caused financial havoc was that his economic goals contradicted each other.

In summer 1987, Greenspan became chairman of the Federal Reserve Bank. In 1993, Bill Clinton chose to reduce the federal deficit rather than keep his campaign promises that necessitated increasing spending on various items. He could not afford to do both. The result was a budget surplus by 1998.

In late 1994, the Treasury Department and the Federal Reserve had to take action to prevent Mexico’s financial collapse. Otherwise, the southwestern states would be adversely affected, and immigrants coming into the U.S. would double.

In 1996, more and more households were exposing themselves to equity risks. Even so, introduction of the World Wide Web appears to have been an innovation that temporarily increased the economy’s ability to expand on an unusually grand scale. Approximately during the Web’s first decade, the economy wasn’t in a normal business cycle. The Web’s ability to make information available instantaneously, thus reducing uncertainty, provided a major boost to corporate America. The Fed, therefore, raised interest rates to curb inflation only in autumn 1998, what with the dire financial straits of the Russians, and hedge fund Long Term Capital Management’s bailout.

In the autumn of 2002, the Republicans turned a deaf ear to the author when he tried to tell them why it was important to rein in spending and renew the Budget Enforcement Act. He already had a difficult job, as he explained, “But too often we have to deal with incomplete and faulty data, unreasoning human fear, and inadequate legal clarity.” Nevertheless, Greenspan is optimistic about the future because the level of worldwide commerce and living standards can continue to rise indefinitely. He believes the presence of wholly competitive free markets and ever-improving technology are what drive them.

Read the book to learn about the two major elements required for a market economy and two others that are essential for growth and prosperity; the factors involved in predicting the health of the U.S. economy in 2030; three important influences on global growth; about the nature of economic populism, and much more.

An Irishman in China

The Book of the Week is “An Irishman in China” by Zhao Changtian; Yang Shuhui and Yunqin, translators, published in 2014. This is the career story of Robert Hart.

Hart, originally from Northern Ireland, visited various ports of the world via ship before settling in Shanghai, China in autumn 1854 as an interpreter, a non-official member of the British consular service. In his early twenties, he started at a time of anti-government rebellion by two groups, Taiping Heavenly Kingdom, and Small Sword Society. British merchants– angry about having to pay taxes when other nations’ traders, such as France, America and Portugal didn’t– were supplying the rebels with arms. Coastal cities produced ample rice, silk and tea. Unsurprisingly, there was corruption at the customs house.

Hart stayed at the British Consulate in Ningbo. He hired a cleaning boy, cook and an English tutor who taught him the Chinese language. Employed by the Chinese government, he moved up through the ranks serving Western merchants in the customs department. In March 1858, he was transferred to Guangzhou because Anglo-French forces attacked the city. He was skilled in diplomacy, and through the years, made friends in high places in the Chinese government. As for his social life, a colleague told him he could get a mail-order bride of sorts, a non-prostitute who was “…trained in music, chess, calligraphy and painting.” Nevertheless, he met someone on his own, and started a family.

Read the book to learn of Hart’s personal and professional relationships over the course of half a century; how he protected British interests in China and had an impact on China’s foreign policy, especially during armed conflicts among its own peoples and other nations.

Silvio Berlusconi

The Book of the Week is “Silvio Berlusconi” by Paul Ginsborg, published in 2004. This is an extended essay on the media mogul/powerful politician in Italy. It examines the issue of whether Berlusconi practiced Fascism, not necessarily through creating an atmosphere of fear and intimidation, but through monopolistically broadcasting propaganda in the guise of education, to the masses. He combined his business dealings with politics to amass a staggering amount of power, with the usual conflicts of interest that come with the territory.

Over the course of three decades starting in the 1970’s, operating out of Milan, Berlusconi, a construction contractor, founded an ad agency and purchased TV stations that accounted for the bulk of Italy’s visual information sources. Later, he entered politics and bought a professional European football team. He was accused of racketeering, bribery and money laundering, among other crimes.

Berlusconi proved to be teflon, escaping punishment in the 1990’s. Not only that, he made a comeback– legally, economically and politically. As of 2004, he was still dragging his feet on answering the legal charges against him, in order to invoke the statute of limitations to weasel out of going to jail.

Read the book to get the details, and the author’s take on whether Berlusconi’s political career would survive much longer, given his outrageous exaggerations when recounting his endeavors for the people of Italy in 2004. The nation’s cost of living had soared and real wages had fallen significantly beginning in 2002.

The following video of Al Franken’s speech on America’s fiscal deficit is well worth watching in its entirety; he mentions a few recent American presidents’ economic policies (starting just after 23:00)– some of which can be compared to Berlusconi’s:

https://youtu.be/hHUDPU7_2qA

Lastly, Berlusconi’s reputation for alleged extensive law-breaking had been a “thing” for a long time.

Jeffrey Sachs

The Book of the Week is “Jeffrey Sachs: The Strange Case of Dr. Shock and Mr. Aid” by Japhy Wilson, published in 2014. This ebook emphatically argues that the highly influential Ivy League economist Jeffrey Sachs has wreaked havoc on at least three nations’ economies in the last thirty years with his non-stop publishing, lecturing and implementation on and of, (in the author’s opinion) delusional, elitist, anti-communist, anti-union schemes; he is, arguably, an economics criminal, so to speak (the counterpart to a war criminal) in that the implementation of his policies caused deaths. As an aside, this blogger disagrees with the author’s spelling of “publically” rather than “publicly.”

Sachs has refused to acknowledge that his “shock therapy” method employed in Bolivia, Russia and Poland was a dismal failure. It was supposed to help them make the transition to capitalism through conferring responsibility for previously government-led distribution of goods and services, to private citizens without warning them of extreme measures to be imposed in accomplishing this. The countries were forced to adopt a model at the far opposite end of the spectrum of the welfare state.

Sachs’ first victim, Bolivia, was experiencing 60,000% inflation and 20% unemployment in the summer of 1985. By 1987, pursuant to Sachs’ plan, a free market had been created, but the costs included a 50% higher unemployment rate and a 40% lower real-wage level. Over the next five years, the mining and industry sectors lost jobs by the tens of thousands.

In Russia, a few powerful wealth owners were already experienced in “managing” assets, so their receiving additional private property– with no laws requiring them to treat their workers in a humane manner– made them even more exploitative. In the early 1990’s, leader Boris Yeltsin became a convert of Sachs. The result was mass corruption. On the other hand, this has helped the United States and other nations with already evolved capitalist systems to maintain their economic dominance in the world. This blogger is not saying such a goal is right or wrong, but merely suggesting that this might have been Sachs’ goal.

Sachs also helped the rich get richer in Uganda, by providing specially chosen farming families with certain resources, such as fertilizer and seeds, in a few villages. The goal was to have those politically connected farmers “… magically combine entrepreneurial self-interest with community spirit, based on a patronizing representation of the deserving poor.” This smacks of a similar kind of mentality in the New York City schools under former Mayor Michael Bloomberg in the early 2000’s, based on the mistaken notion that all students were bound for college. Sachs’ program started charging money for conferring some of its resources, “… which inevitably privileges those with the ability to pay.” Bloomberg imposed various policies (still in effect as of this writing), that inevitably privilege those students who have the ability to pay for private school, and testing and tutoring services. That is just the tip of the iceberg in both cases.

A World Trade Organization conference in Seattle in 2000 was discontinued because “… Suddenly, this orderly world of billionaire philanthropy and elite policymaking was overturned by massive street protests involving unions, NGOs, and activist groups, demanding an end to the global neoliberal agenda of free trade, privatization, and corporate power.”

Read the book to learn of additional outrages associated with Jeffrey Sachs.

In the Name of Profit – Bonus Post

This blogger skimmed the ebook, “In the Name of Profit” by multiple co-authors, originally published in 1972. This depressing set of anecdotes on corporate greed simply reminds the reader that there is nothing new under the sun.

One theme is that through the 1950’s and 1960’s, big manufacturers such as Goodrich and General Motors had constructive knowledge that the products they sold were defective. Purchasers had bad experiences, and were seriously injured or were killed by those products. The companies’ attorneys and their employees rationalized that “‘planned obsolescence” meant progress. “But the meaning is clear: ‘Go cheapen the product so we can make more money.” In the case of drug company Richardson-Merrell, the product wasn’t cheapened, but rather, serious side effects were downplayed or hushed up and the results of FDA pre-approval testing were fabricated. Unsurprisingly, the company and its subsidiaries hired top-dollar attorneys skilled at helping businesses weasel out of legal trouble.

Another topic covered was Napalm, whose evolution began at Guadalcanal during WWII. “The Napalm fire bomb was deliberately designed as an indiscriminate terror weapon for mass destruction and death among civilians.” When people in Vietnam were harmed, Dow Chemical’s legal defense was bolstered by the fact that it had received orders by the U.S. Government to make the controversial product.

This ebook also discussed stock manipulation and corporate takeover. SEC laws were shown to be very lax in the 1950’s and 1960’s, as one particular perpetrator did jail time for various securities violations, but after his release, went right back to his old tricks. One Herbert Korholz repeatedly gamed the system with acquisitions. President of the Susquehanna corporation, he was able to bribe directors and officers in taking over another company with a secret tender offer of a share price higher than what was to be offered to the general share-owning public. “Profit-making firms can cut their taxes magnificently by merging with big losers…” One Maurice Schy, an attorney, attempted to make the government aware of Korholz’s unethical, unlawful and disgusting behavior, by filing lawsuits through the years, to no avail. Government officials were mired in conflicts of interest (favorable to Korholz’s interest) and ruled against Schy every time except one; a ruling was pending as this book was being released in 1972. Schy had finally gotten a possible break only because there was another case brought by another party against Korholz’s companies’ illegal activities.

In sum, we human beings are a mixed bag of evolutionary traits; altruism and greed among them. On many occasions, greed wins out, and we never seem to learn from those past occasions.

Burned Bridge

The Book of the Week is “Burned Bridge, How East and West Germans Made the Iron Curtain” by Edith Sheffer, published in 2011.

This book discusses the history of the splitting of Germany post-World War II, and its effects on Neustadt, a Western border city, and Sonneberg, an Eastern border city, both connected by Burned Bridge. Pursuant to agreements made at Yalta, “… on July 1, 1945, Soviet forces entered Sonneberg, and the U.S. Army withdrew into Neustadt… bighearted Americans distributing gum and chocolate from tanks with images of brutish Soviet solders in tattered horse-drawn wagons.”

In the late 1940’s, frequent border-crossers included black marketeers, undocumented workers, refugees and begging children. In both the East and West, border guards were easily bribed to accept fake travel permits. Families had been rent asunder by the creation of the artificial border.

In 1952, the East German government cracked down on border residents who had made, or were liable to make trouble– activists and frequent border-crossers who might spread the word to Easterners about the Western (capitalist) way of life– by forcing Easterners to move farther east, away from the border. Through the 1950’s, the East German government launched propaganda campaigns to lure former Easterners back to Sonneberg, offering residences, jobs, wages and farms superior to previous ones. Returnees exploited such opportunities, obtaining high-level education for their children as well, in the process. The physical Wall was erected in August 1961.

For about a decade after the war, West Germany flourished economically, after which various untoward events in the 1960’s and 1970’s slowed its growth. There occurred the scandalous Spiegel Affair, violence stemming from student and anti-nuclear protests, terror perpetrated by the Baader-Meinhof gang, oil shocks and anti-immigrant sentiments.

The late 1980’s saw a relaxation of westward travel. Nonetheless, the East German government was resistant to change, and continued to oppress its people through the fall of 1989. In November, dissatisfaction reached critical mass. “Most still recall exactly where they were and what they did when Burned Bridge opened, and cry with joy at the memory.” During reunification of East and West, people who were infrequent border-crossers experienced shock at the stark economic, cultural and social disparities between the two.

Crossing the River

The Book of the Week is “Crossing the River” by Victor Grossman, published in 2003.

This autobiography tells how an American defected to East Germany during the Korean War. A very unusual story, indeed. He was brainwashed by both his parents, intellectual Communists, in the 1930’s and 1940’s.

He tried to rationalize his penchant for suffering by saying that the cruel and unusual goings-on in the US actually provided a worse way for people to live, than the East Germans did. In the early 1950’s, the McCarthy era was in full swing, the US had ousted the leader of Guatemala in a bloody affair, and instigated another shameful coup in Iran; there was the ugliness at Peekskill, there was still segregation; besides, the Soviets had helped defeat Germany. Comrade Stalin was a god, to the Communists.

The author argues that in 1960, the quality of life wasn’t so bad in East Germany. Yes, there were severe food shortages, but everyone’s medical care was paid for, and everyone had a job or was provided with necessities for survival, and assistance for finding a job, according to his own need. Of course, the people also spent needless hours every day manually washing clothes and dishes, lighting a fire in the pot-bellied stove, and patiently waiting for unreliable public transportation, or hoofing it, because they couldn’t afford a car.

In the early 1960’s, the East Germans kept trying to attack the integrity of the Federal Republic (of West Germany) (with good reason) by publicizing the fact that a large number of ex-Nazis (who had committed unspeakable war crimes) were working in civil service– as judges, even(!) and in the West’s armed forces. It was somewhat alarming that so many Nazis were helping Germany to re-arm, and becoming a pivotal force in NATO.

In the late 1980s, the East German leaders staged a few media incidents, trying to continue to isolate the “German Democratic Republic” (the misnomer that was East Germany) clinging to power, believing that only they could be keepers of the flame. The East Germans, like the Chinese, were into self-criticism circles. They had “tutors”, who bullied doubters and discouraged free-thinkers, cutting them down with questions such as, “Are you questioning the collective judgment of experienced Marxist leaders, able to assess factors far better than any individual? Could you be more correct than they are?”

It was a traumatic time for the author when Khrushchev revealed Stalin’s crimes in the mid 1950’s. But the author continued to rationalize that his adopted homeland was still a better place to live than imperialist America. It’s an excellent book anyway.