Predictions

An Interesting “Collapse” Hypothetical

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Dr. Paul Craig Roberts, the famous Reagan administration economist and now an embittered and cranky paleoconservative social critic, penned a short but intriguing American “collapse” scenario set in the near future. Some of what Roberts writes fits neatly with the thesis in Joseph Tainter’s The Collapse of Complex Societies:

The Year America Dissolved

….As society broke down, the police became warlords. The state police broke apart, and the officers were subsumed into the local forces of their communities. The newly formed tribes expanded to encompass the relatives and friends of the police.
 
The dollar had collapsed as world reserve currency in 2012 when the worsening economic depression made it clear to Washington’s creditors that the federal budget deficit was too large to be financed except by the printing of money. With the dollar’s demise, import prices skyrocketed. As Americans were unable to afford foreign-made goods, the transnational corporations that were producing offshore for US markets were bankrupted, further eroding the government’s revenue base.
 

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Are Things Looking Up?

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Krugman is a contrary indicator. The combination of this column and the fact that Intrade now shows Republicans as having >50% odds to take over the House in 2010, gives hope. Political gridlock would be great for the economy.

Defeat in Afghanistan? The View from 2050

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Voices from many quarters are saying dire things about the American-led campaign in Afghanistan. The prospect of defeat, whatever that may mean in practice, is real. But we are so close to the events, it is hard to know what is and is not critical. And the facts which trickle out allow people who are not insiders to only have a sketchy, pointillist impression of the state of play. There is a lot of noise around a weak signal.

ChicagoBoyz will be convening a group of contributors to look back on the American campaign in Afghanistan from a forty year distance, from 2050.

40 years is the period from Fort Sumter to the Death of Victoria, from the Death of Victoria to Pearl Harbor, from Pearl Harbor to the inauguration of Ronald Reagan. It is a big chunk of history. It is enough time to gain perspective.

This exercise in informed and educated imagination is meant to help us gain intellectual distance from the drumbeat of day to day events, to understand the current situation in Afghanistan more clearly, to think-through the potential outcomes, and to consider the stakes which are in play in the longer run of history for America, for its military, for the region, and for the rest of the world.

The Roundtable contributors will publish their posts and responses during the third and fourth weeks of August, 2010.

The ChicagoBoyz blog is a place where we can think about the unthinkable.

Stand by for further details, including a list of our contributors.

The PIIGS Who Fell to Earth

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In her office in Berlin, Angela Merkel waited by her phone. A small group of advisors waited with her, unusually quiet. Their eyes moved back and forth between the clock and the telephones. Finally, a ring shatters the silence. The defense minister picks it up. He listens, nods, barks an acknowledgement into the phone, and hangs it up. He turns to the chancellor.
 
Der Rubikon ist gekreuzt worden.

This is from a great post by Jim Bennett.

In the form of a thriller, he shows one way the current Euro currency crisis could play out.

Schadenfreude is a German word, but we in the Anglosphere occasionally feel a twinge of it … .

Attack Israel, Collect $400 Million

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The USA promises a new financial aid package for Gaza, which means Hamas:

Obama described the situation in Gaza as “unsustainable”, saying a better approach was needed and calling for a “new conceptual framework” for Israel’s blockade. A White House statement said the new funds “represent a down payment on the United States’ commitment to Palestinians in Gaza, who deserve a better life and expanded opportunities, and the chance to take part in building a viable, independent state of Palestine, together with those who live in the West Bank”.
 
The money will go towards infrastructure projects in both Gaza and the West Bank, including $10m for the construction of new UN schools. It did not explain how the schools will be built while Israel maintains its embargo on construction materials entering Gaza, claiming they could be diverted to make weapons and build underground bunkers.
 
Earlier this week the UK government promised an extra £19m in aid. Israel today announced extra items it would allow into Gaza, including crisps, canned fruit, packaged hummus and shaving foam.
 
“They will send the first course. We are waiting for the main course,” the Palestinian economy minister, Hassan Abu Libdeh, was quoted in the Israeli media as saying. “We are waiting for this unjust siege to end.”

When you subsidize something you get more of it. This new subsidy package effectively rewards Israel’s enemies for their recent 4GW attack. Further attacks are now even more likely than they would be otherwise (i.e., our initial weak response could only embolden the Iranian-Syrian-Turkish-Palestinian axis, an actual cash payoff will embolden them further).

The Turkish government is no doubt anticipating its own fat envelope, courtesy of US taxpayers.

Note also the Palestinian economy minister’s attitude of entitlement. Keeping the Palestinians on welfare helps to maintain their hostility to Israel. If they had to work for a living they might be forced to be more accommodating. (Martin Kramer makes a related argument.)