Dion Ghost Writer

On Don Newmans Politics (CBC) yesterday Liberal Leadership candidate Stéphane Dion took credit for being consulted by Harper on the four little words that PM Harper added to the BQ motion on Quebec/Quebecois as a nation.

Yet another Liberal leadership candidate, Stéphane Dion, was actually called by Harper's office Tuesday night to sound him out on the proposal. He is also happy, saying it reflects the compromise he'd floated privately with his opponents. "I have no problem with this," said Dion, also a former political scientist and intergovernmental affairs minister who had been viewed as the most staunch opponent of recognizing Quebec as a nation.

Dion got a call from a Harper adviser, seeking his advice as a constitutional expert and as a Liberal contender. Dion told the Star last night that "within Canada" was close enough to his proposal to recognize Quebec's nation status as a "sociological," not legal fact. "It's no big deal," he said.

Despite the plea of Warren Kinsella that Dion oppose this motion in the house, it appears that he took the opportunity to play constitutional consultant.

He told Don Newman he will support the Conservative Government motion.

To bad Warren. No one is listening to you anymore. Except Robert McClelland. And that's the definition of 'irony'.

See:

Liberal Leadership Race

Quebec A Nation Pro and Con

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Colombia Deal Dead

Democrats to throw out Colombia trade deal

And its a good thing too. Colombia has the record for most murders of trade unionists.

Union to appeal court's dismissal of lawsuit against Coca-Cola

A Colombian labor union plans to appeal the dismissal of a U.S. lawsuit against Coca-Cola Co. and local bottlers in an alleged conspiracy with local paramilitary groups to murder, torture and threaten trade unionists at its plants.

Which is why the Democrats in Congress tossed the Bush bilateral trade deal with that country.

The congressman said labour standards were at the “core” of Democrats’ objections - a sign that the influence of the labour movement within the party has been strengthened by the election result, which saw a notable rise in economic populism among voters.

Thea Lee, policy director of the AFL-CIO union, said, “Colombia is a very emotive issue for people in the labour movement”, adding that the country was regarded as the world’s deadliest for union organisers. More than 1,200 deaths of activists and rank-and-file members have been recorded in recent years.

The opposition from Democrats is also a setback for Alvaro Uribe, the president of Colombia, who came to Washington to lobby Democrats for support.

Mr Uribe’s visit to Capitol Hill last week was upstaged by difficulties with his own Congress, where three members of the House and Senate in Bogotá were arrested for links to rightwing para-militaries.

The trio are being charged, along with others close to the government, with financing death squads. Senator Alvaro García is charged with helping to plan a massacre of civilians in 2000.

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2021

Thats how long NATO expects to be in Afghanistan till.

Nato’s difficulties in Afghanistan have forced the alliance to scale down its ambitions for a showpiece summit next week and raised questions about its ability to get to grips with the insurgency in the country.

A classified document obtained by the Financial Times, and due to be endorsed by leaders, maps out new ambitions for the next 15 years, including development of the ability to carry out more than one big operation at once.

A senior Nato official said: “Are we magically going to get big new news against the artificial deadline of the summit? I don’t think so. For a number of those heads at the table, they have not invested as much in Afghanistan as others. This is a wake-up call for everybody that it’s a long term mission.”

See:

Afghanistan






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Kandahar

The N Word

A lot of sturm and drang over the Kramer (Michael Richards) affair. Was he racist, yes. Did he use the N word. Yep. Do I hate the N word because its historic meaning is derived from slavery, yep. But I hate it whenever I hear it. Not because the media decided to focus on this particular incident.

I also hate the hypocritical media mania over how it gets used and abused, and the virtual silence over it when it makes money. Lots of money.

Though it has been used in effectively in comedy, both by blacks and whites to confront its real historic social meaning in America This was not the case. It was the result of a breakdown on stage by a comic on his way down.

IT'S ALL ABOUT THAT WORD'

Kenny Robinson, founder of the all-black Nubian Disciples Of Pryor comedy series at Yuk's, also noted Richards' attempt at backtracking. "He was saying 'It's that word, it's all about that word,'" Robinson said. "I'm sorry, this isn't 1964 and you're not Lenny Bruce."

Perhaps he should have rapped out the 'N' word. Hip Hop and rap music using the N word gets lots of airplay on my alternative campus radio station. But of course thats okay for multi-millionaire rap artists, it's an expression of their oppression.

Just like it's ok for some rappers to use sexist put downs of women calling them byeetch and ho's. Or to express their unbridled homophobia. It's an affirmation of Afro-American masculinity that is oppressed in racist white supermacist culture. Except it isn't.

Is it just me or has Rap music gone to the dogs?

I being from NYC living in the inner city, and growing up in the 80's and 90's naturally grew up listening to rap. In those times when rap music wasn't mainstream, the music was about something. Be it an outcry of the horrendous poverty and discrimination minorities grew up around, or just having fun and letting your voice be heard.

With the onset of gansta rap (I once liked but now despise because I matured) is when things started to go downhill.

Hate, violence, degradation of women, selfishness, greed, and all other decadent behaviour associated with most, not all, rap music.

The Oppositional Gaze

The rap music that gets the most news is the music that is pushing misogyny. We think of rap music as a little third world country that white people can take out of it what ever they want. There is extreme violence, misogyny and black hate, young men bought this and this became the top type of rap. If a black guy knows that he can make millions of dollar by singing about fucking women and hoes then they’re going to do it.

Anti-Feminist and slavery driven rap makes the most money. Rap and assault are the defining exchange in black youth this is a fall out because individuals get wealthy off this. They are making strategic choices to do this music and this should set off a red light. This is what the country finds appealing. The white middle class suburban boy wants music about violence, fucking, degradation, blacks as ‘the other’.

Rap videos have reinscribed the female body in pornographic imaginary. Rap music and black music uses the black female body making it fall into overly sexual terms. They are the girls who will do what the nice clean white girls won’t. This is produced in rap videos.

American culture is obsessed with transgression. Commodified blackness is controlled and altered by the culture and consumer to how we’ll accept it. White boys who try and be black are still afraid of the black guys on the street; blackness is still violent and animalistic. White culture, however, is too wonder bread. Let’s get some of the endangered species to be hip, exotic and different so that we can keep our white people conservative and static.

Gangsta Rap, the million dollar pop culture industry is the 'voice' of the violent subculture of the lumpenproletariat, in America, Canada and Europe. It's not just about the N word it's the colour of the person saying it. Which in itelf is a contradiction.

The cultural studies interpetation of the meaning of this is that it is the liberation of the word from its original meaning if it is used by those whom it describes by themselves. In other words the words of oppression take on a different 'meaning' or 'signifier' when used by the oppressed themselves.

The irony is that N word may appear to be about liberating the word for other meanings for those who use it in rap music the fact is that it is also about the colour of the folks listening to the music. Which is why it is popular music for white middle class boys. They get to imagine being bad (black) boys. And thus invert the fear of Afro-Americans or immigrants of colour in Europe, into the other whom they embrace for all the wrong reasons.

Turn it down!: Rap music and the far right: Germany goes gangsta

If it doesn't work out with hip hop," shrugs Bushido, Germany's most notorious rap star, "then I'll just sell drugs." It probably won't come to that. The 26-year-old half Tunisian Berliner is turning the world of German hip hop upside down. The child of a German mother and an immigrant father is attracting, against all normal logic, a massive audience of neo-Nazis who love his hard-edged, racist and nationalistic lyrics.

There has never been any doubting Bushido's bad boy credentials. He is currently, and not for the first time, in an Austrian jail, waiting to see if he must stand trial on GBH charges. Earlier this month, an unfortunate 20-year-old Austrian man made the mistake of wandering too close to Bushido's pimped-up 7 Series BMW. It is alleged the rapper and his two bodyguards suspected the man had punctured the tyres, and beat him senseless. Bushido could face 10 years in jail.

Bushido's latest brush with the law was par for the course for a true gangsta rapper. 50 Cent, Ja Rule, Snoop Dogg: all the American rap stars worth their platinum discs and pimped-out Hummers have had run-ins with the law or spent time behind bars. But there is something different about Bushido, a beefy man with five tattoos. He has sparked a huge debate in Germany, a country still new to gangsta rap, about how racist and offensive song lyrics can be before they become outright neo-Nazi propaganda.

Sirius-ly Funny: Now I Remember Why I Miss Howard Stern

Then, as now, Stern's brand of "shock radio" is one where everything and anything from wrestling midget lesbians to Ku Klux Klansmen playing Hollywood Squares is considered fair game. In other words, it is so ridiculously over-the-top, anyone who would for a minute take it seriously needs to pick their brains up off the floor. Or at least, find a sense of humor.

Some of Stern's biggest fans back at my record company office were our rap artists. These guys would often ask us if bits featuring peripheral Stern characters like "The King Of All Blacks" could be legally sampled on their records. That is because stereotypes like that are so ridiculous they become the joke in and of themselves. And the joke is a laugh out loud, falling down funny one — especially to someone who knows what that stereotype means first hand.

It is the same as with the use of the word faggot. Which supposedly becomes liberating when used by gays with each other, when in reality it is the acceptance of an ugly epithat. Just because those who are called N***** or faggot now accept the label with pride, does not make it less derogatory.

It does not matter about the colour or sexual preference of those using the word it reamains a slur. The difference here is the acceptance of the labels of oppression by the oppressed to express pride. Real Pride is about overcoming those words with words like Black Pride, Black Power or Gay and Gay Pride.

Either the word remains a slur or epithat or it is transformed. When the word is transformed, then anyone can use it because the word itself takes on a new transformative meaning. Such is the case with the word Queer. Which itself is now used in Academic setting such as Queer Studies. Such is not nor ever will be the case for the N word.

When Lenny Bruce challenged America with words like the N word or references to fellatio, etc. he was not putting down Afro-Americans or homosexuality, he was challenging the bigots. And he got busted for it. Kramer on the other hand was just a bigot on stage.

And the multi million dollar media busted him. The same media that exploits the N word for profit in producing Gangsta rap. The capitalist media cannot cry holier than thou when in fact they made the N word an issue, not out of moral outrage, but as a commodity. Good or bad they profited from increased sales around the Kramer affair the same way they profit from Gangsta Rap.

Did Kramer flip out of course he did, most stand up comics do after being heckled. But they handle it better.

I don't expect that Richards will get much sympathy. Except, of course, in private from some of his peers, who understand enough about the process of stand-up comedy to understand how this incident could have happened. And enough about the public feeding frenzy to stay out of the limelight while he's beaten like a piñata until everyone moves on. In Defense Of Michael Richards

Was he personally attacking his audience? Yep. Was he an idiot? Yep.
Is he racist. Yep.

But lets not be hypocritical about the 'N' word. Not when I just turned on my campus radio station to hear it loud and clear. I switched the channel.


See:

Da Death of De Hip Hoppy

Hip Hop Gun Culture

Martin Blames Gun Collectors

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Fish Fights

Not dog fighting, not cock fighting, those are illegal. Fish fights though seem to have allowed scientists to discover that yes fish do have personalities. So I wonder when the teacher will impose no fighting rules in the undesea school yard.

Fish certainly have more personality than what meets the human eye, as according to biologists in Britain, not only do different trout have different characters, but these change as the fish experience life's highs and lows.

Winning or losing a fight, or even watching fellow fish negotiate the perils and pitfalls of encountering strange new objects, influenced the future behaviour of rainbow trout studied in the lab.

Researchers led by Lynne Sneddon, of the University of Liverpool, identified different 'personalities' in their fish by observing the boldness or shyness of individuals. Like people, some fish are very confident in the face of novelty or confrontation, whereas others are reticent and fearful.

Predictably, shy fish that won a fight also gained more confidence. But surprisingly, shy fish that lost their bout also grew bolder when investigating strange new food. Sneddon says that this could be due to what she calls a 'desperado effect'. Shy fish that know they're pathetic in a fight must race for food if they want to get any, she suggests, admitting: "This is totally presuming that fish think about winning or losing."


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Quebec A Nation Pro and Con

The political Blogosphere in Canada has responded to the Conservative Governments motion that This House recognizes that Québécois form a nation within a united Canada. Lets see who is pro and con and undecided.

If you think I have placed you in the wrong catagory please let me know.

This is of course based upon postings on the Progressive Bloggers, Blogging Tories and the Canadian Blog Exchange aggregators as of the time of this posting.

And there is national unity here the Pro side recognizes the Quebecois as a historic nation, peoples, etc. The Con side declares itself for pure Federalism. Ah finally we can all talk to each other.

The management takes no responsibility for any underwear that gets tied in a knot.


Blogging Tories Pro

Why does the NDP support the Bloc's "nation" motion?

Yes, Quebec is a Nation. Live with it.

On nationhood, Part XVII

Quebecois called nation, world continues to spin

Call me anything you want, just not late for dinner...

Tories do the right thing.

Quebec Is A Nation Within A State

Nations within Nations

A KerPlonka! crash course in nationalism, OR: Why I'm unmoved by the overractive bleatings of many


Blogging Tories Con

Québec is NOT a Nation. Québec is a Province.

Much Ado About Nothing?

The Harper Bombshell

Quebec nation, Canada nothing

Blogging Tories Undecided

Political Staples

Nation: Pick a definition

Progressive Bloggers Pro

Harper: Québec a "nation within a united Canada"

Today, Canada is Stronger

Harper Acknowledges Quebecers Form Nation

Government to recognize Québec as a nation

Four Little Words

Québécois / Quebec Motion


Progressive Bloggers Con

WHO WILL STAND UP FOR CANADA

Canada - A Nation of Masochists.....or a grouping of people....or an autonomous collective....er, what?

The Reviews Roll In!

So Much For Sanity

What happened to Federalism?



Progressive Bloggers Undecided

Harper Says Quebecers are a Nation Within Canada

Canada as a Country, Quebec as a Nation

Is the New Nation Proposal/Compromise a Harper Idea

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Rhetorical Question

"But big tax cuts cost big money. As the Star's Les Whittington reported this week, one of the anticipated cuts is income splitting, a neo-conservative pet project that would reduce federal revenues by — holy smokes — $5 billion annually.Is that good value? Or just family values reinforced with a tax break for stay-at-home parents?" Asks Toronto Star Columnist Jim Travers.

Why of course it's Conservative family values writ across the tax code. It certainly is neo-con politics and bad economics. It fails to address the need to change the tax system to reflect 'individual' taxation rather than family taxation.

It is an extension of the Tories Child Care Benefit, doling out money to their base, the middle class, while failing to provide for needed social programs like daycare. Calling it all along tax fairness which it is anything but.

Because they are not taxing profits from corporations, financial markets, and money markets anywhere close to what they tax Canadian citizens. Nor have they reduced EI payments nor expanded EI payouts.

Neither have they addressed the need in Canada for a Living Wage/Guaranteed Annual Income for the working poor the majority of whom are women.Single women, just as the majority of surviving pensioners are single women. So income splitting does not address their economic needs.

"All the fevered talk about falling birth rates and the need to import skills, labour and consumers misses the central point that contradictory tax and support policies ensure the working poor aren't escaping poverty or contributing fully to the economy.Part of the problem is that politics and life are on different cycles. A middle-class tax windfall is rich with immediate promise for the party in power while education's rewards are a generation away. Even less appealing are the high costs and low returns of attacking something as significant, and yet as arcane, as the marginal tax rates that help keep the poor, well, poor. Parties know people struggling through life stay home on election day."

Ironically the idea of income splitting is not even Flaherty's, it belongs to Garth Turner whom the Conservatives kicked out of caucus a month ago. And they only adopted it for seniors to offset their broken promise when they taxed Income Trusts.

This is conservative social engineering through the tax system.

See

Not Real Tax Fairness



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Rent Controls

With the boom in Alberta and housing shortages in Toronto renters are being soaked says Stats Canada.

Almost a third (31 per cent) of people who rented spent 30 per cent or more of their budgets on shelter compared with only six per cent of those who owned their homes, and most of them were living alone, relying on government assistance, or had low incomes. Traditionally, households that use 30 per cent or more of pre-tax income for housing costs are considered to face affordability problems.

Time for rent controls as an immediate solution.

Long term has to be land banking and building affordable housing. It is the only way to cool off a highly speculative market.

Housing in Canada should be a right.

Not a way to flip investments making spectacular profits which increase inflation and reduce access to affordable housing.

See:

Housing

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Bye Bye Miss American Pie

While the White House and Congress discusses time lines for 'phased withdrawl' maybe in four to six months, maybe, the Brits have announced they are getting out of Iraq. After all what else can you expect when your PM publicly calls Iraq a
' disaster.'

UK handover in Basra 'by spring'
MINISTERS yesterday raised the prospect of a British withdrawal from Iraq within months, predicting that UK forces could start handing over control of Basra to the Iraqi government next spring.

See:

Iraq


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New Asian Dragon

China is forging a new hegemony in the Asia Pacific. It is flexing its political and economic power that makes APEC look like a backstreet Mah-jong parlour. This is the real story post the Hanoi round of APEC. President Hu is touring India and Pakistan making new economic and poltical alliances with his neighbours. It is promoting Free Trade.

Long ago China developed what it called the Three World Policy, that it stood between the hegemonic super powers of Russia and the United States. That policy was further developed byDeng Xiaoping who went on to introduce the reforms that began the capitalist reconstruction of modern China.

Hu is following the long road of the Three Worlds Policy towards creating an economic dragon that can confront the United States and its regional political/economic ally Japan.

As R. Taggert Murray points out in the this summers New Left Review, excerpt below, the economic and political might of China now outweighs Japan in influence on the American economy, and within the region. It is now flexing its global power to build a new Asian accord, one that excludes the hegemonic power of the United States, one that is in direct competition with its Imperialist aims.

Imperialism is capitalism, writ large on the face of the globe. China's development from state capitalism to a more market orientated capitalist economy is yet another example of this. Its power in Africa is enormous, as the current Sudanese crisis shows, its expansion in the Asia pacific and its control of much of the United States debt makes it not just a super power but an Imperialist one as well. One that in cooperation with its energy rich neighbour Russia, is capable of flexing world power.

The United States faces the end of its hegemony, the short Empire of the 20th Century. Its military strength sapped in Iraq and Afghanistan. Its failure to contain nuclear weaponry and nuclear power, because it refuses multilateral non proliferation that would include itself. So China steps in to counter balance the nuclear ambitions of America. India, China plan to expand civilian nuclear cooperation

This has left China today to flex her muscles as a global player this week begining at APEC and now as Hu visits India and Pakistan. The new Hegemon is on the block.

Rising China, India key to true Asian century: Hu

Imparting a global dimension to burgeoning India-China relations, Chinese President Hu Jintao Wednesday said the rise of the two emerging powers is "mutually reinforcing" and is central to not only a new Asian century but to a new world order.

Unveiling a robust vision of the India-China strategic relations, Hu described India and China as "true friends and partners," who are "committed to pursuing long-term friendship" and can work together to "create a bright future for their peoples."

"We both agree that we need to send the world an important message. That is, China and India are true friends and partners," Hu, who is in India on a four-day visit, said in his keynote address at the Vigyan Bhavan convention centre that outlined a template of the India-China relations in the context of an evolving world order.

"To enter into strategic partnership with India is not an expedient. Rather, it's a strategic decision and firm goal of the Chinese government," Hu said, while elaborating on the importance Beijing attaches to developing relations with New Delhi.

Stressing the demographic and economic strengths of India and China which together account for two-fifths of the world's population, Hu said: "The course we chart and the pace of our development have major implications for peace and development in Asia and beyond."

What stood out from Hu's speech was his vision of harmonious society and harmonious world in which the fast-track socio-economic development of India and China can contribute to global peace and security.

"Both China and India are on the fast track of economic and social development, demonstrating to the world the bright future of the two countries and the promise of a revitalised Asia," he said.

"Working hand in hand, China and India will make greater progress in development. This will deliver enormous benefit to the 2.4 billion Chinese and Indian peoples and the people of Asia and the world," Hu, who is coming to India after 22 years, said.

"When China and India achieve development, the world will see a true Asian century," the 63-year-old leader of China stressed.

Hu Urges India And China To Promote Multilateralism

Chinese President Hu Jintao on Wednesday urged India and China to promote multi-polarity in the world order and called for an early solution to the two countries' border dispute.

"We (India and China) should promote multi-polarity in the world and democracy in international relations and work to make the international political and economic order fairer and more equitable," Hu, the first Chinese president to visit India in over a decade, said in a keynote address in New Delhi.

India's Vice President Bhairon Singh Shekhawat was present at the Chinese leader's speech, which focused on the importance of efforts by the Asian giants in advancing multilateralism.

Hu also supported improving India-Pakistan relations, saying his country sought no selfish gains in South Asia and was ready to play a "constructive role" for the peace and development in the sub-continent.

"China welcomes and supports improvement of relations between India and Pakistan. China does not seek any selfish gains in South Asia," Hu said, a day ahead of his visit to Islamabad at the end of a four-day Indian tour.

The Chinese leader's comments are considered significant as they come at a time when US-India ties are at an unprecedented high and mistrust lingers on between the one-time Asian foes, despite booming trade and growing dialogue.

China is suspicious about the US-India relationship which it perceives as a counter-balance to its increasing influence in Asia.

Warming Sino-Indian relationship tells the US that India is not an unconditional ally

Underscoring this change is a new robustness in economic ties. As recently as 2001, two-way trade between India and China was a paltry $3.6 billion, but it nearly doubled in 2004, rising 79 percent from the previous year to $13.6 billion dollars. By 2005 the figure reached $18.7 billion, and is expected to top $20 billion in 2006. The India-China Joint Study Group of Comprehensive Trade and Economic Cooperation predicts enormous growth potential because each country’s respective share of the other’s imports is still so small—both under 5%. And both countries anticipate growth in services trade, the sector in which their bilateral trade has grown faster than the sector has in each country. While some Indian commentators raise concerns about Chinese economic influence--underscored by the recent disqualification of Chinese firms from a mobile tender—this remains a mere blip overridden by economic pragmatism. Today’s talks, for example, between Hu Jintao and Indian Prime Minister Manmohan Singh produced a commitment to double trade from current levels to $40 billion by 2010.

In the past year, India and China have forged a new alliance in the energy sector—one in which both India and China require security for exponentially growing domestic demands. Onetime rivals for control of fields in Angola, Nigeria, Kazakhstan, and Ecuador, India and China agreed in January 2006 to cooperate on overseas acquisitions. The agreement grew out of their co-ownership of a Sudanese field and their cooperative bid for fields in Syria. These joint pursuits are knitting together the interests of Asian state-owned oil and gas behemoths ONGC in India, and CNPC and CNOOC in China. With the rapid growth of these economic ties in areas critical to both countries’ development, the India-China relationship has set off on a completely new path. It is this new course that the US, concerned about a worldwide scramble for energy resources, would be watching carefully.

China-India deal

If Pakistanis needed a reminder that there are no permanent friendships in global politics, the agreement on Tuesday on a 10-point strategy to promote bilateral ties, including the exchange of nuclear technology, between traditional rivals China and India was surely one. It should also serve as a reminder to Islamabad (and should one say to Rawalpindi as well) that in today's world nothing commands more respect internationally than sound economic standing and robust economic growth. The agreement, reached on Chinese President Hu Jintao's current state visit to India, is wide-ranging and apart from nuclear cooperation envisages a significant increase in bilateral trade and a resolve to settle outstanding territorial disputes. Of course, all this will be some cause for concern for Pakistan, given that it follows a nuclear deal between America and India. The best approach for Islamabad would be to try and resolve all the bilateral disputes that it has with its neighbours, which perhaps explains President Musharraf's eagerness to get on with the peace dialogue with India and his desire to have a "substantive meeting" with Dr Singh. At the same time, Pakistan should seek to augment its financial status and standing in the world and this can only be brought about by a mix of effective social and macroeconomic policies that help achieve GDP growth that is long-term and sustained. That is precisely why both India and China find themselves at positions on the world stage where what they do and what they say is taken seriously by major powers and why other countries want to invest in them and do business with them. This needs to be taken account of in policymaking and decision-making circles in Pakistan, especially among those who see a policy of permanent conflict or fighting between our neighbours as a fact of life and then use this worst-case scenario to implement spending plans that leave little for the country's social and economic development. The point is that only through economic strength does a nation -- in today's world at least -- become militarily powerful as well.

R. Taggart Murphy: East Asia's Dollars

China’s dollars

How does China’s dogged persistence in holding so much of its national wealth in dollars fit this picture? China needs to create some ten million new jobs a year to forestall politically dangerous unemployment; Chinese leaders are acutely aware that large numbers of idle young men form a most reliable recipe for political disorder. The strategy for creating those jobs involves the steady transfer of production capacity from other countries—principally, the us—to China. The products of China’s factories are mostly sold abroad, again with the us taking by far the biggest share. Virtually everybody—not just the Americans—pays for Chinese exports with dollars; many of which China retains as foreign exchange reserves, largely in the form of us government debt securities; that is, in direct financing of the us government deficit.

For anyone with an eye for numbers, the evidence of this strategy blazes out of China’s balance of payments statistics like flashing lights on a police car. Most countries that run surpluses on current account (trade plus transfers and dividend and interest payments), like Japan, see the money recycled through lending abroad, foreign acquisitions and the like. As its spate of high-profile acquisitions around the world demonstrates, China is certainly recycling some of what it earns from trade to buy mines, companies and oil wells abroad. But more investment flows are coming into China than are leaving it; this is what finances the factories that dot the Chinese landscape and the skyscrapers sprouting everywhere in its cities. Meanwhile, China’s current-account surplus translates into a vast build-up of dollar holdings. Whatever else China’s leaders may think about the United States, they can have no illusions that the dollars they have accumulated can ever be redeemed for anything close to their current nominal values. Suggestions have been made that China redeploy its holdings from us government securities to other instruments that offer higher return—equities, for example, or even non-dollar instruments—and use the resulting income streams to restructure unprofitable, state-run companies. Politically, these companies cannot be closed since they continue to support the livelihood of much of China’s population. At the same time, they form a kind of black hole for Chinese finance, threatening to suck the domestic financial system into a debt-driven implosion unless they can somehow be made at least minimally profitable. [12]

The problem with the suggestion that China finance a restructuring of its state enterprises by selling its dollar hoard is that China has become too big a player. Any attempt to shift large parts of its reserves out of the market for us government debt risks precipitating a us bond-market crash that would carry other markets with it and thereby defeat the purpose. What happened when South Korea’s central bank floated the notion of diversifying its portfolio out of us government securities in February 2005 is a case in point: both the dollar and the us bond market nose-dived, prompting flurries of denials from the Koreans. Korea’s $69 billion holdings of us government securities are less than a tenth of China’s. That leaves China with its present strategy: keep the engines of growth humming with exports on the one hand and a constant flow of foreign investment on the other. If rapid growth goes on long enough, China presumably hopes that the percentage of the country’s total assets tied up in the state-run enterprises will be small enough to be manageable in any slowdown.

China also hopes that, if and when the dollar-centred global financial regime unravels, it will have an economy sufficiently developed to permit the yuan to takes its place among the world’s major currencies without the need for external backing that the country’s dollar reserves currently provide. That will allow it to deal with the collapse in American purchasing power when the us is finally forced to live within its means.
A final reckoning?

Forecasting that collapse is, however, devilishly hard; and there can be no assurance that markets will wait politely until the Chinese financial system is sufficiently robust to cope with the fallout. For markets are jittery everywhere; their fears almost endless. Renewed inflation in the United States, an unseasoned Federal Reserve chairman who has yet to confront his first real crisis, a politically crippled Bush administration, the implosion of the us housing bubble; all on top of spiking commodity prices, the ever-present threat of calamitous disruption to the flow of petroleum by events in the Middle East, the galloping us trade and government deficits, and indeed worries over the Chinese financial system—any one of these, or yet something else, could trigger a panicked flight from the dollar that would overwhelm the ability and willingness of the East Asian central banks to contain the flood.

There is talk in financial circles in Tokyo that the Ministry of Finance has concluded that global imbalances have become too great; that the limits of Japan’s dollar support capability have finally been reached. A real chance exists that Japan will stop throwing good money after bad in the next dollar crisis and sit on its hands. Of course the price would be heavy—once the dollar goes into freefall and the yen breaks past its historical high water mark of ¥79/$1, Japan will be facing the write-off of much of its accumulated dollar hoard and the potential loss of hundreds of thousands of manufacturing jobs. But Japan has learned a great deal during the past fifteen years about coping with and spreading out the pain of job loss; Mikuni Akio has suggested that, finally freed of the deflationary burden of supporting vast pools of idle dollars (idle as far as Japan is concerned), the Japanese economy could find new strength in an era of a super yen. [13] Among other things, the new purchasing power of Japanese households could not only help compensate those facing job loss but could finally provide the elusive shift to an economy driven by vibrant domestic demand rather than exports—the stated goal of Japan’s policy makers for a generation. A case can be made that Japan is in better shape now to deal with the economic fallout of a dollar crisis than it has been at any time in the past twenty years.

The political fallout is another question entirely. The collapse of the dollar will take with it American hegemony; the United States will be hard-pressed to sustain its global military reach in a world where it must earn euros or yen to pay its foreign creditors rather than fob them off with more us government paper. No matter what form it takes, the end of American hegemony will bring the return of the central Japanese political question—the right to rule—with a vengeance; particularly so because it may well be accompanied by serious upheaval in Japan’s most important neighbour. There is no obvious present substitute for the American market in providing the engine of demand to sustain the kind of growth China needs in order to manoeuvre its way past the ever-looming threat of a domestic financial crisis, unless it were to be Japan itself.

Japan’s sole experiment over the past 150 years of going it alone was a disaster. Of course much has changed since then. Scattered flares today shooting up from the right of Japan’s political landscape—the new emphasis on ‘patriotism’ in schools; the growing acceptability of revisionist talk about the war years; the palpable thirst in conservative circles for an assertive foreign policy backed by a strong military—do not begin to add up to the hysteria and intimidation of the 1930s. But, alas, no real sign exists that Tokyo has built the kind of institutional infrastructure capable of charting a wise new course for the country should Japan slip out of the American embrace. That indeed may be the ultimate reason why, in a dollar crisis, Japan will revert to form and step in one more time to salvage a dollar-based international financial order: fear of an inability to cope with what lies beyond. But if Japan chooses to sit on the sidelines, or if its intervention is insufficient to prevent the end of what we have labelled Bretton Woods ii—a real possibility given that today’s imbalances are far greater in both absolute and relative terms than those of the late 70s or late 80s, when Japanese intervention was decisive—Tokyo is likely to find itself having to deal with any manner of unanticipated new realities. These could range from a withdrawal of the us from East Asia, to peremptory demands from Washington that it assume most of the financial burden of a continued American military presence in the region, to political and economic upheavals in China, Taiwan and the Korean peninsula.

Prime Minister Koizumi’s insistence on worshipping at Yasukuni Shrine is a profoundly demoralizing spectacle for anyone hoping that Japan has the political maturity to cope with the turbulence in East Asia that would follow a dollar collapse. It is not so much the act itself—irresponsible and offensive as it is—as what it says about the structural problem with Japan’s politics that has plagued the country since Meiji. Much of the commentary on Yasukuni focuses on its enshrinement of convicted war criminals among the tens of thousands of Japan’s war dead. But what really makes Japan’s neighbours gag is Yasukuni’s visible presence as an unreconstructed remnant of the 1930s apparatus of State Shinto and Emperor-worship. With its museum glorifying Japan’s war on the rest of Asia, Yasukuni is a constant reminder of the potential for another wildly destructive spree in a political culture that still has no institutional mechanism to impose accountability.

Koizumi himself is a case in point. The office of the prime minister is exceptionally weak in Japan; a prime minister must not only be supported but guided by one or another element of the bureaucracy to accomplish almost anything. But the very position itself and its de jure powers allow for wilfulness, particularly when the usual restraints collapse. In this case, the restraint should have come from a Foreign Ministry that in the past had been able to intervene with some of Koizumi’s equally nationalist predecessors. But a demoralized Ministry still reeling from events early in Koizumi’s term has been unable to prevent him from wreaking havoc on Japan’s relations with its nearest neighbours. They cannot halt his stubborn insistence on demonstrating that he is above any outside influence by paying obeisance to the institutional embodiment of the darkest chapter of Japan’s past. Many other elements in Japan’s elite circles, particularly within the business community, are appalled by Koizumi’s intransigence, but they have no way to reach him. And it will be politically difficult for his successor to stop the visits; too many Japanese now would regard this as backing down to foreign pressure. Koizumi has created a problem where none existed: an inevitable loss of face for someone, somewhere, no matter how things turn out—dangerous in a region where such things are taken with great seriousness.

China and Korea see an open provocation. The Yasukuni visits reinforce their suspicion that Japan is, in the last analysis, unpredictable and dangerous. It is of course possible that the collapse of us power in East Asia that would accompany an implosion of dollar markets would focus the minds of power holders in both Tokyo and Beijing, not to mention Seoul, Pyongyang and Taipei, and lead to a reasonable accommodation of competing national interests in creating a durable political, economic and financial order in the region to replace the current export-led dependence on the us market. Alas, neither history nor contemporary realities offer much reassurance.


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