Guns and the USA: No Comment!

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US Default looms large as Politicians squabble

I turned on Meet the Press at 8am Pacific time this morning to see one of the Gang of Six declaring that he would not agree to severe cuts in spending so long as President Obama insisted on raising taxes for the wealthy. I had to shake my head and clear my thoughts as my brain started to focus on what I was hearing.

The Guardian leader that has appeared in the UK publication’s Monday morning edition (see graphic) makes clear the fears others in the world have for the consequences for the world economy if the US defaults on its debts.

The song that came to my mind was “The Lunatics have taken over the Asylum”. And by this I don’t mean only republicans but politicians in general and the asylum that is Washington DC right now.

As a recent US Citizen I view these events partly through the eyes of a Brit. I’m 54 years a Brit and only 2 an American.

America is in relative decline as the worlds strongest nation. China is growing in both absolute and relative terms. The failure to decide on an approach to paying off the national debt is merely a symptom of the American political class failing in the game of world leadership. Petty domestic squabbles dominate debate even as major global events unfold. The thought that best sums up the future of the global economy, and with it humanity, under the leadership of these politicians is “Oh Shit!”.

Here’s hoping somebody reads this and remembers the world scale consequences of the failure of American leadership. It isn’t about the Congress or about the White House. Its about the whole world and the rest of this century as the world copes with America’s decline as the unchallenged global leader.

Looking at Sovereign Debt

I am in Heathrow on my way to Cape Town for the World Cup. Sitting in the lounge I was watching Japan v Cameroon on the TV and, as the game was boring, began to read the Independent newspaper.

Then this graphic caught my attention.

Rebooting a nation – not impossible it seems!

The news of Barak Obama’s election victory, inevitable as it has seemed for weeks, if not for months, has barely sunk in. Commentators as diverse as George Bush and The Reverend Jessie Jackson are agreed about one thing – Americans (and I am now one) should be proud of themselves for electing an African-American as leader of the USA. It is historical. It is a proud moment for the people of the USA and shows they are looking to the future with optimism, not the past with cynicism.

But the significance of Obama’s victory goes far beyond what it means for the position of African-Americans in society, or for what it means for the rest of American society, significant as those things are. His victory brings to an end an era that began with Ronald Reagan, remained largely unchanged during the Bush senior and Clinton years, and has been relied on entirely under George W Bush. That is an era in which fear of internal and external enemies, or of cultural difference dominated the political discourse and atomized and paralyzed the American electorate. These were the years in which there was thought to be a Conservative majority, albeit a silent one. An era in which big bold optimistic ideas were frowned upon. An era in which the population as a whole was given the role of passive agent, living our lives, safe in the knowledge that we were protected by an all-powerful government.

America has been re-booted, with a new operating system. The past was a PC, Obama is a Mac. He is clever, attractive, well put together, desirable, optimistic, and many other good things. Above all else he is wanted – by Americans, by foreigners, by the world as a whole it seems. And he has unleashed and become a focus for the power of the people. Americans now officially care and are prepared to put their money where their mouth is. Optimism is Wired – Fear is Tired.

Obama’s movement has unleashed a bottoms up openness. The People can no longer be seen as a passive, fear-focused, manageable mob whose only job is to show up to vote every 4 years for the fear-monger in chief. The future will not look like the past. It will be better. There will be more thinking, more doing, more optimism and more real politics.

So… before I get too carried away I will end this piece by saying – YES! What a great feeling this is! At last we have an operating system that won’t keep crashing. It looks good. It feels good. I want it. And better still, it is crowd sourced!

My prediction for the general election

I used the USA Today vote tracker today. Here’s where I came out in my predictions.

I hope I’m close 🙂

Having said that Obama is clearly the “lesser of 2 evils”. I don’t agree with a lot of what he says. Particularly his belief that the US should send more troops to Afghanistan and Pakistan.

I just prefer him to McCain.

Economic Crisis, Financial Crisis, Debt Crisis? Is USA Inc finished?

You know the old saying – Bulls make money, Bears make money and Pigs get slaughtered.

Well, take a look at this graph from the World Bank:

It seems like Iceland is Pig number 1. Look at who is number 2!

The chart is measuring domestic credit as a % of GDP, or the extent to which the nation as a whole is leveraged. These are 2005 numbers and significantly understate the current numbers, which in the US have been reported as being at 435%. That means for every real $ in circulation there is $4.35 in credit.

I’m not saying that USA Inc. could go bankrupt, like Iceland. But, the nation whose currency provides the basis on which world trade happens is clearly at a crossroads. As a Brit, we learned about this in history – the end of empire and all that.

If the current crisis is significant in the future it may be because it is the time when the world realized that it no longer has a leader. In the case of Britain that happened in the 1870s. It took two world wars and the great depression for the world to get to a new equilibrium. I hope this time it is less painful, and happens more rapidly.

From the BBC

Kofi Annan’s comments yesterday have created a fuss. The BBC reports:

Authorities in the UK, Australia, Poland, Bulgaria and Japan also rebuffed Mr Annan’s claims.

Australian Prime Minister John Howard described the UN as a “paralysed” body and said it was incapable of dealing with international crises.

Clearly both Annan and Howard are right, but the UN’s paralysis is a symptom of a new era in US foreign policy – to “go it alone” against targets determined alone. Prediction: This era will be more unstable than that between 1914 and 1945 if it is allowed to develop.