When Giants Fall

'The Greater Good No Longer Matters'

I'm not an economist, a political scientist, or a foreign policy specialist, but it wasn't hard to see back in 2007 what would happen once the good times ended: individuals, organizations, and governments would lose interest in collective efforts lacking clearly-defined benefits, and would focus instead on protecting and enhancing their own selfish interests.

In fact, that was one reason -- among others -- why I predicted in my March 2009 book, When Giants Fall, that the European Union would eventually fall apart.

As it happens, a Washington Post commentary, "As Nationalism Rises, Will the European Union Fall?" by Charles Kupchan, a professor of international affairs at Georgetown University, senior fellow at the Council on Foreign Relations, and author of How Enemies Become Friends: The Sources of Stable Peace, suggests schisms are forming that are undermining the regional accord.

The European Union is dying -- not a dramatic or sudden death, but one so slow and steady that we may look across the Atlantic one day soon and realize that the project of European integration that we've taken for granted over the past half-century is no more.

Europe's decline is partly economic. The financial crisis has taken a painful toll on many E.U. members, and high national debts and the uncertain health of the continent's banks may mean more trouble ahead. But these woes pale in comparison with a more serious malady: From London to Berlin to Warsaw, Europe is experiencing a renationalization of political life, with countries clawing back the sovereignty they once willingly sacrificed in pursuit of a collective ideal.

For many Europeans, that greater good no longer seems to matter. They wonder what the union is delivering for them, and they ask whether it is worth the trouble. If these trends continue, they could compromise one of the most significant and unlikely accomplishments of the 20th century: an integrated Europe, at peace with itself, seeking to project power as a cohesive whole. The result would be individual nations consigned to geopolitical irrelevance -- and a United States bereft of a partner willing or able to shoulder global burdens.

The erosion of support for a unified Europe is infecting even Germany, whose obsession with banishing the national rivalries that long subjected the continent to great-power wars once made it the engine of integration. Berlin's recent reluctance to rescue Greece during its financial tailspin -- Chancellor Angela Merkel resisted the bailout for months -- breached the spirit of common welfare that is the hallmark of a collective Europe. Only after the Greek crisis threatened to engulf the euro zone did Merkel override popular opposition and approve the loan. Voters in local elections in North Rhine-Westphalia promptly punished her party, delivering the Christian Democrats their most severe defeat of the postwar era.

Such stinginess reflects the bigger problem: Germany's pursuit of its national interest is crowding out its enthusiasm for the E.U. In one of the few signs of life in the European project, member states last fall embraced the Lisbon Treaty, endowing the union with a presidential post, a foreign policy czar and a diplomatic service. But then Berlin helped select as the E.U.'s president and foreign policy chief Herman van Rompuy and Catherine Ashton, respectively, low-profile individuals who would not threaten the authority of national leaders. Even Germany's courts are putting the brakes on the E.U., last year issuing a ruling that strengthened the national Parliament's sway over European legislation.

This renationalization of politics has been occurring across the E.U. One of the starker signs of trouble came in 2005, when Dutch and French voters rejected a constitutional treaty that would have consolidated the E.U.'s legal and political character.

The Lisbon Treaty, its watered-down successor, was rejected by the Irish in 2008. They changed their minds in 2009, but only after ensuring that the treaty would not jeopardize national control of taxation and military neutrality.

And in Britain, May elections brought to power a coalition dominated by the Conservative Party, which is well known for its Europhobia.

Elsewhere, right-wing populism is on the upswing -- a product, primarily, of a backlash against immigration. This hard-edged nationalism aims not only at minorities, but also at the loss of autonomy that accompanies political union. For example, Hungary's Jobbik Party, which borders on xenophobic, won 47 seats in elections this year -- up from none in 2006. Even in the historically tolerant Netherlands, the far-right Party for Freedom recently won more than 15 percent of the vote, giving it just seven fewer seats than the leading party.

If these obstacles to a stable union weren't sobering enough, in July, the E.U.'s rotating presidency fell to Belgium -- a country whose Dutch-speaking Flemish citizens and French-speaking Walloons are so divided that, long after elections in June, a workable governing coalition has yet to emerge. It speaks volumes that the country now guiding the European project suffers exactly the kind of nationalist antagonism that the E.U. was created to eliminate.

The renationalization of European politics is a product, first and foremost, of generational change. For Europeans who came of age during World War II or the Cold War, the E.U. is an escape route from a bloody past. Not so for younger Europeans: A recent poll revealed that French citizens over 55 are almost twice as likely to see the E.U. as a guarantee of peace as those under 36. No wonder new European leaders view the E.U.'s value through cold cost-benefit calculations, not as an article of faith.

Meanwhile, the demands of the global marketplace, coupled with the financial crisis, are straining Europe's welfare state. As retirement ages rise and benefits dwindle, the E.U. is often presented as a scapegoat for new hardships. In France, for example, anti-Europe campaigns have focused ire on the E.U.'s "Anglo-Saxon" assault on social welfare and on the "Polish plumber" who takes local jobs because of the open European labor market.

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Another Conflict

After reading the following Agence France-Presse report, "Predator Drones to Patrol Entire US-Mexico Border," can there be any doubt about what is occurring on our southern flank?

WASHINGTON — The United States beginning Wednesday will add a third Predator drone to patrol its border with Mexico, allowing authorities for the first time to monitor the entire stretch of land separating the two neighbors using the unmanned aircraft.

The latest drone joins two others in covering the 2,000-mile (3,200 kilometer) frontier which runs across the states of California, Arizona, New Mexico and Texas, the US Department of Homeland Security said.

With immigration a hot-button issue ahead of looming midterm elections in November, US President Barack Obama earlier this month signed a 600 million dollar bill aimed at reinforcing border security.

His administration is seeking to step up security as it presses for a comprehensive immigration reform measure that likely would allow many of the millions of illegal migrants in the United States to legalize their status.

Many Republican lawmakers say no immigration measure can be considered unless the federal government can ensure security along the southern US border to prevent a spillover from Mexico's crime-ridden north and to prevent the arrival of more undocumented migrants.

The United States, which is deeply concerned by the raging drug war in its southern neighbor, deployed 1,200 National Guard soldiers and 1,500 new agents to the border in recent weeks, as provided for in the recent legislation.

Homeland Security chief Janet Napolitano said the first unmanned aerial system (UAS) flight from Corpus Christi in Texas would mean the whole border from California to Texas was now covered.

Affecting Just about Everyone

In sports or in war, one side's confidence grows and victory becomes assured when it racks up a string of gains and the other side eventually accepts that its rival has an unbeatable advantage.

With that in mind, the following Financial Times report, "Mexicans Fear Cartels Are Winning," makes me wonder how long it will be before the "successes" realized by criminal enterprises operating south of our border lead them to set their sights on their rich neighbor to the north?

There used to be a time when the municipality of San Fernando in north-eastern Mexico was known for farming, fishing and a quiet way of life. Today, it is associated with death.

This week, a young Ecuadorean with bullet holes through his shoulder and cheek told the story of how he and his travelling companions on their way to the US in search of work had been kidnapped in San Fernando by the Zetas, one of Mexico’s drug cartels.

They pulled us out of the truck violently and demanded money,” he told authorities after managing to escape, according to local press reports. “They said that they were Zetas and that they would pay us $1,000 every two weeks [if we joined them] but we didn’t accept and they opened fire.”

Mexican authorities confirmed the account when they discovered in a remote and semi-derelict grain warehouse 72 bullet-ridden bodies with their hands tied and eyes bandaged. Among them was a woman in the final stages of pregnancy.

Revelations of what has now been confirmed as the worst massacre since Felipe Calderón, Mexico’s president, declared war on organised crime almost four years ago have focused international attention on the country’s drug war like never before.

They have underlined the extent to which the cartels have moved into other avenues of crime, such as extortion, kidnapping and human trafficking. And they have left Mexicans with the increasing feeling that the government is losing the war.

It used to be possible to pay little heed to Mexico’s drugs cartels, which supply an estimated 80-90 per cent of the cocaine consumed in the US, as well as a substantial chunk of marijuana, methamphetamines and heroin. Today, the violence resulting from bloody inter-cartel battles over local markets and international smuggling routes affects just about everyone.

So Much Now, So Little Later

When it comes to the climate change debate, details about short-term developments -- like a spell of unusually hot or cold weather -- are often interposed with data on secular trends to create a confusing jumble that tells us little about where things actually stand.

In some respects, that calls to mind the question of whether Pakistan has a water problem when parts of the country are being wracked by the worst floods in years. Regardless of what is occuring now, that doesn't give us a great deal of insight into what will happen next.

In fact, as the Toronto Star reports in "Deadly Prospects for South Asia’s Politics of Water," the damage being caused by a surplus of water will eventually be more than offset by future shortages.

This may not be the most tactful time to bring it up, with much of Pakistan underwater and many millions homeless, but Pakistan’s real problem is not too much water. It is too little water — and one day it could cause a war.

The current disastrous floods (to which the response of both the Pakistan government and the international community has been far too slow) are due to this year’s monsoon being much stronger than usual. But that is just bad weather, in the end: every 50 or 100 years you can expect the weather to do something really extreme. It comes in various forms — blizzards, floods, hurricanes — but it happens everywhere.

The long-term threat to Pakistan’s well-being is that the country is gradually drying out. The Indus river system is the main year-round source of water for both Pakistan and northwestern India, but the glaciers up on the Tibetan plateau that feed the system’s various tributaries are melting.

While they are melting, of course, the amount of water in the system will not fall steeply — but according the Chinese Academy of Sciences, some of the glaciers will be gone in as little as 20 years. Then the river levels will drop permanently, and the real problems will begin.

When India and Pakistan got their independence from Britain in 1947, there was plenty of water in the Indus system for everyone. In fact, almost half the water was still flowing into the Arabian Sea unused. But the population has grown fast over the years, especially on the Pakistani side of the border — from 34 million in 1947 to 175 million now — and the amount of water in the rivers has not.

The per-capita supply of water in Pakistan has fallen from over 5,000 cubic metres (175,000 cu. ft.) annually in 1947 to only about 1,000 cubic metres (35,000 cu. ft.) today, a level defined by the United Nations as “high stress.” Ninety-six per cent of that goes to irrigation, and the Indus no longer reaches the sea in most years. That’s what has already happened, even before the melting of the glaciers has gone very far.

Fifteen or 20 years from now, the water shortage (and therefore also food scarcities) will be a permanent political obsession in Pakistan. Even now, Pakistani politicians tend to blame India for their country’s water shortage (and vice versa, of course). It will get worse when the shortage grows acute.

'Food Insecurity and Its Deadly Consequences Are Again a Pressing Concern'

In a New York Times excerpt from his new book, The Coming Famine, author Julian Cribb details the confluence of drivers creating "the greatest threat the human race has ever faced":

Population. Although the rate of growth in human numbers is slowing, the present upward trend of 1.5 percent (one hundred million more people) per year points to a population of around 9.2 billion in 2050 — 3 billion more than in 2000. Most of this expansion will take place in poorer countries and in tropical/subtropical regions. In countries where birth rates are falling, governments are bribing their citizens with subsidies to have more babies in an effort to address the age imbalance.

Consumer demand. The first thing people do as they climb out of poverty is to improve their diet. Demand for protein foods such as meat, milk, fish, and eggs from consumers with better incomes, mainly in India and China but also in Southeast Asia and Latin America, is rising rapidly. This in turn requires vastly more grain to feed the animals and fish. Overfed rich societies continue to gain weight. The average citizen of Planet Earth eats one-fifth more calories than he or she did in the 1960s — a “food footprint” growing larger by the day.

Population and demand. This combination of population growth with expansion in consumer demand indicates a global requirement for food by 2050 that will be around 70–100 percent larger than it is today. Population and demand are together rising at about 2 percent a year, whereas food output is now increasing at only about 1 percent a year.

These demand-side factors could probably be satisfied by the world adopting tactics similar to those of the 1960s, when the Green Revolution in farming technology was launched, were it not for the many constraints on the supply side that are now emerging to hinder or prevent such a solution:

Water crisis. Put simply, civilization is running out of freshwater. Farmers presently use about 70 percent of the world’s readily available freshwater to grow food. However, increasingly megacities, with their huge thirst for water for use in homes, industry, and waste disposal, are competing with farmers for this finite resource and, by 2050, these uses could swallow half or more of the world’s available freshwater at a time when many rivers, lakes, and aquifers will be drying up. Unless major new sources or savings are found, farmers will have about half of the world’s currently available freshwater with which to grow twice the food.

Land scarcity. The world is running out of good farmland. A quarter of all land is now so degraded that it is scarcely capable of yielding food. At the same time, cities are sprawling, smothering the world’s most fertile soil in concrete and asphalt, while their occupants fan out in search of cheap land for recreation that diverts the best food-producing areas from agriculture. A third category of land is poisoned by toxic industrial pollution. Much former urban food production has now ceased. The emerging global dearth of good farmland represents another severe limit on increasing food production.

Nutrient losses. Civilization is hemorrhaging nutrients — substances essential to all life. Annual losses in soil erosion alone probably exceed all the nutrients applied as fertilizer worldwide. The world’s finite nutrient supplies may already have peaked. Half the fertilizer being used is wasted. In most societies, up to half the food produced is trashed or lost; so too are most of the nutrients in urban waste streams. The global nutrient cycle, which has sustained humanity throughout our history, has broken down.

Energy dilemma. Advanced farming depends entirely on fossil fuels, which are likely to become very scarce and costly within a generation. At present farmers have few alternative means of producing food other than to grow fuel on their farms — which will reduce food output by 10–20 percent. Many farmers respond to higher costs simply by using less fertilizer or fuel — and so cutting yields. Driven by high energy prices and concerns about climate change, the world is likely to burn around 400 million tonnes (441 million U.S. tons) of grain as biofuels by 2020 — the equivalent of the entire global rice harvest.

Oceans. Marine scientists have warned that ocean fish catches could collapse by the 2040s due to overexploitation of wild stocks. Coral reefs — whose fish help feed about five hundred million people — face decimation under global warming. The world’s oceans are slowly acidifying as carbon dioxide from the burning of fossil fuels dissolves out of the atmosphere, threatening ocean food chains. Fish farms are struggling with pollution and sediment runoff from the land. The inability of the fish sector to meet its share of a doubling in world food demand will throw a heavier burden onto land-based meat industries.

Technology. For three de cades the main engine of the modern food miracle, the international scientific research that boosted crop yields, has been neglected, leading to a decline in productivity gains. Farmers worldwide are heading into a major technology pothole, with less new knowledge available in the medium run to help them to increase output.

Climate. The climate is changing: up to half the planet may face regular drought by the end of the century. “Unnatural disasters” — storms, floods, droughts, and sea-level rise — are predicted to become more frequent and intense, with adventitious impacts on food security, refugee waves, and conflict.

Economics, politics, and trade. Trade barriers and farm subsidies continue to distort world markets, sending the wrong price signals to farmers and discouraging investment in agriculture and its science. The globalization of food has helped drive down prices received by farmers. Speculators have destabilized commodity markets, making it riskier for farmers to make production decisions. Some countries discourage or ban food exports and others tax them, adding to food insecurity. Others pay their farmers to grow fuel instead of food. A sprawling web of health, labor, and environmental regulation is limiting farmers’ freedom to farm.

Although there have been many alarms raised through the years about widescale food shortages, most have come to naught. However, after scanning through this "perfect storm"-like list, it's hard not to feel that cirumstances are about to change -- for the worst.

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What Really Happens After TSHTF

No small number of people have images in their heads of a post-crash America that look like scenes from The Road (a movie which I enjoyed, as it happens) -- you know, cannibals, Mad Max cars, vast wastelands. However, a blogger who has been living in a country where economic conditions have deteriorated markedly maintains that such a perspective is off the mark. In "What Kills You After an Economic Collapse," "FerFAL," publisher of the Surviving in Argentina blog, discusses the real threats people face when the chips are down:

Even though by definition the ultimate objective is living, when we talk about urban survival we aspire to a minimum amount of freedom and dignity in our lives. Living as a prisoner [or] slave, or in a cardboard box under a bridge and cleaning windshields for a living, is still living, but alas, its certainly not the life quality we want. Its about maintaining the minimum standard of living we need so as to not go nuts. Nonetheless, I thought it would be interesting to [note] what actually gets you killed after an economic collapse. I think it’s an interesting exercise and it also helps [us to] reevaluate our priorities from a more realistic perspective. For this I used some statistics [from] after the 2001 Argentine crisis. It's not an exact science, but it does put together an interesting picture.

Rioting and social unrest: It may come as a surprise for some, but [this is] by far the [factor] that kills the [least] amount [of] people when these things happen. In our case it was 32 to 38 people across the entire country. About the same amount dies [each] week in the Buenos Aires suburbs alone during armed robberies and other crimes.

Already in our first stop, we [have destroyed] a popular survivalist myth: When a country collapses, hordes will run wild, burning every single building to the ground in every mayor city. The idea that bugging out should be some sort of standard procedure when there’s social unrest is simply flawed. The preconceived notion that somehow made [its way] from Hollywood to the real world -- that the population can [drop] by significant amounts in a matter of days, with millions dying -- is not realistic at all. My dear friends, that only happens in fiction books and movies. It happens to be good entertainment but don’t take it any other way.

Hunger: As of March 2010, 2,920 kids starve to death in Argentina per year. (source: http://www.elmundo.es/america/2010/03/28/argentina/1269793765.html) That’s children alone; you could easily add another 50% for adults and seniors. Older people have it pretty tough here since most pensions and retirement programs (recently “nationalized”) place old folks BELOW the poverty line. This means it's not enough to classify them as poor. They can’t buy the minimum calories required per day to survive and the medicine they often [can't do without]. Lucky for the government, an old person dying of malnutrition isn’t as obvious or as unnerving as seeing a healthy little boy or girl become a bag of bones.

[On] average, at the very least 12 people die per day of hunger in Argentina. This, of course, doesn’t take into account all the illnesses that may cause death because of a poor diet. In any case, food is...of extreme importance and history keeps teaching us that storing 6-12 months of food is a lifesaver during catastrophic events such as an economic crisis, planned genocide (Irish Potato Famine)  or civil wars that have [a] long term duration (seriously consider going for 12 months)

Crime: In the Buenos Aires suburbs where I live, 4 to 8 persons are murdered every 24 hours during robberies. [As] with inflation, the government has its own twisted way of [defining] murder, so I’ll go with the private census and statistics companies, which are more realistic. (source: http://www.diegopietrafesa.com.ar/mistextos_detalle.php?id=30)

Poverty: Here's where it gets a bit more complicated to get hold of hard numbers. How does poverty kill you? [It determines] where you can afford to live, how many police officers and patrol vehicles [are] available per block, what kind of health services are available. Is [the neighborhood] close to some of the polluted dumpsters and streams full of sewer water and chemicals the factories dump in them with no control whatsoever, causing cancer, genetic disorders, malformations and respiratory illnesses? Suffice [it] to say, [the] child mortality rate [in Argentina] is twice as much...in the poor parts of town, compared to [those areas] that are better off. (source: http://edant.clarin.com/suplementos/zona/2008/02/10/z-03015.htm)

Poverty deaths due to poor healthcare: According to UNICEF, 25 children under the age of one die per day in Argentina of preventable causes such as poor treatment of illnesses that could have been cured, untreated infections, respiratory problems and low weight. If we substract the 8 kids that starve to death each day which we [noted] earlier, we realize that roughly 17 kids die per day simply because they can’t afford better than free public health care. I pay dearly for my private health plan, but do so gladly knowing fully well what public hospitals have to offer. As a side note, this should [serve as] a good example of how well government owned pubic health works.

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Past as Prologue

Many people find it hard to let go. They try to re-live the good times of their youth. They want to bask in moments when hope sprung eternal. They look forward to transforming utopian dreams into glorious realities.

History suggests the same holds true in the geopolitical realm. In "Medvedev Seeking a New ‘USSR – a Union of Sovereign Super-Loyal States,’ Moscow Paper Says," Window on Eurasia notes how one long-time rival aspires to return to what it views as its a glorious past.

Taking advantage of a “marked” decline in US activity in the former Soviet space, President Dmitry Medvedev is moving to “minimize” what some in Moscow see as the negative “consequences of the most serious geopolitical catastrophe of the 20th century” by setting “a certain Union of Sovereign Super-loyal Republics.”

In this way, the editors of “Nezavisimaya gazeta” argue today, the USSR is reappearing albeit in a somewhat different form, and it future development, they suggest, will depend in the first instance “on the political will and professionalism of those carrying out” this policy direction (www.ng.ru/editorial/2010-08-24/2_red.html).

Entitling their lead article in English “Back in the USSR,” the paper’s editors say that recent diplomatic moves by Medvedev, although most of them have attracted little attention except for the extension of the Russian base in Armenia, reflect “a significant link” in a chain of events to reverse what Vladimir Putin called “a geopolitical tragedy.”

At their meeting in Sochi, the paper notes, “Medvedev received assurances of loyalty form Tajikistan President Emomali Rakhmonov, once the Russian president announced that Tajik citizens could remain on the territory “from now on” for three months before they have to register with the government.

And at the meeting of the Organization of the Collective Security Treaty (known under its Russian acronym as ODKB), Medvedev secured not only the extension of Russian basing rights in Armenia but also improved “the tonality” of relations with Belarusian leader Alyaksandr Lukashenka and won approval for the ODKB as the venue for discussions of Kyrgyzstan’s future security.

Moreover, Medvedev was able to win support for his plans to present a new and broader charter for ODKB at that organizations summit meeting in December. (For concurring analysis, see Andrey Lavrov’s article at novopol.ru/-odkb-hochet-pribavit-v-vese-text88919.html. For a more skeptical view, see Aleksandr Golts’ essay at www.ej.ru/?a=note&id=10345.)

At the Yerevan meeting, the editors of “Nezavisimaya” point out, all the ODKB signatories were represented – except Uzbekistan, which can be expected to go along with measures that will increase the effectiveness of that grouping. Among the Central Asian states, only Turkmenistan remains on the sidelines.
But it is not only Medvedev’s moves which lead the paper to its conclusions. The Moscow paper’s editors point to the failings of GUAM, the Georgian-Ukrainian-Azerbaijani-Moldovan grouping, over the same period as indicative of Moscow’s regaining of dominance in the post-Soviet space.

The visit of Moldova’s acting President Mihai Ghimpu to Georgia and his joint declarations with President Mikhail Saakashvili suggest that this anti-Russian grouping of states is living out its last days, given that neither Ukraine nor Azerbaijan will want to follow the Ghimpu-Saakashvili line and that Belarus’ Lukashenka won’t join that body either.

(In support of “Nezavisimaya’s” argument about the fate of GUAM in general, see Bogdan Tsyrdya’s essay posted online today at www.fondsk.ru/article.php?id=3229. And for a critique of the notion that GUAM could ever become GUBAM and a dismissal of Russian worries on that point, see Yaroslav Butakov’s piece at www.win.ru/school/5270.phtml.)

But it is the decline of American attention to and support for the non-Russian countries around the Russian Federation that the Moscow paper’s editors view as the main reason for their conclusions about what Medvedev -- and it should be added Putin --are currently seeking to do and with some success.

“Taking into account the marked reduction in the activity of Washington [in this region] and the corresponding weakening of its opposition to Moscow, there has appeared,” the editors say, “if you will the optimal chance if not for the liquidation of ‘the greatest geopolitical catastrophe of the 20th century,’ then for the minimization of its consequences.”

And that, they somewhat provocatively suggest involves “the creation around [the Russian Federation] of a certain Union of Sovereign Super-loyal Republics.” And while this would represent “a kind of USSR,” it would hardly be like the one that existed before the events of 1991.

What the editors of “Nezavisimaya” do not say but what they may intend or at least what many of their readers may conclude is that the reappearance of that acronym even as an expression of intent is likely to provoke anti-Russian feelings in many of the former Soviet republics and thus become a major obstacle to loyalty Moscow so clearly wants.

Visualizing the Future?

Some personal development specialists believe that one way to achieve your goals is to visualize the outcome and engage in relentless preparation. I wonder: does the same hold true when it comes to geopolitical affairs? If so, than the comments detailed by WorldNetDaily in "Israeli Official Declares: 'We're Preparing for War,'" give us a good idea about what can expect to see in the Mideast in the not-so-distant future:

Warns if world doesn't stop Iran, Jewish nation may be forced to act

While Israel is hoping for a peaceful resolution to Iran's nuclear ambitions, the Jewish state is also preparing for "a time of war," declared a Knesset member of Prime Minister Benjamin Netanyahu's ruling Likud party.

"We are prepared for all risks," said Likud Knesset Member Danny Danon. "And I think our enemies should know that even though we are speaking of peace, we are getting ready for a time of war, as well."

Danon, the deputy speaker of Israel's parliament, was speaking in a radio interview with WND senior reporter Aaron Klein, who hosts an investigative program on New York's WABC 770 AM Radio.

Danon hinted that Israel may take action if the world does not stop the Iranian nuclear threat, recalling Israel's lone strike on Iraq's nuclear reactor in 1981.

Stated Danon: "We are ready for all scenarios, and we are able to defend our civilian population. I cannot tell you how long we can wait more. But we prefer to wait and see if the international bodies are acting, or [whether] it will be only the burden of Israel, like it was in the early '80s, when the great leader, Menachem Begin, [made] the great decision to bomb the nuclear reactor in Iraq."

Calling the Shots

It's a universal truth: money and power go together. Anybody who believes those countries that have seen dramatic improvements in their economic circumstances during the past few decades wouldn't feel entitled to throw their weight around is simply naive.

Now that China has become the world's second largest economy, is it any surprise, as Asia Times Online suggests in "Deep Reasons for China and US to Bristle," that our Far Eastern rival is feeling like it should be calling the shots, especially on its own turf?

SYDNEY, Australia - China's strong reaction to the United States' call for multilateral negotiation to resolve territorial disputes in the South China Sea fits the rising tide of tensions between Beijing and Washington over a number of issues.

Foreign Minister Yang Jiechi stated that interventions last month from US Secretary of State Hillary Clinton suggested the US was ganging with other countries in the region against China. Chinese analysts also point to US-South Korea military exercises staged in the Yellow Sea and the Sea of Japan as nothing but provocation and infringements of China's maritime interests.

However, beneath the public exchanges are deeper reasons for the apparently more assertive and even confrontational posture being adopted by both sides. For the United States, China's continuing economic rise and growing military power pose serious

challenges, both to its predominance in Asia and its ability to deal with global issues ranging from nuclear non-proliferation to climate change. China's economy seems on a roll compared with a stagnant US economy, where unemployment has remained unacceptably high since the financial crisis started two years. China is on target to replace Japan as the world's second-largest economy.

Military modernization also marches on in China, with a focus on a strategy of anti-access and area-denial that could seriously threaten the ability of the US navy to gain access to the region. A report released this week by the Pentagon points to Chinese procurement and deployment of anti-ship ballistic and cruise missiles, new submarines and surface ships, and asymmetrical capabilities such as cyber warfare.

Washington is concerned that growing economic power and military capabilities could embolden the Chinese leadership to take a more assertive line in foreign policy and become less willing to cooperate with the international community on issues where China's role is critical. At the same time, such a role also requires Beijing to sacrifice its own interests for the larger public good, including measures to deal with climate change and Iran's nuclear program.

Of particular concern is what Washington views as China's deliberate efforts to nudge the US out of Asia. Chinese assertions that the South China Sea is one of its core interests on a par with Taiwan, Tibet and Xinjiang indicates that Beijing will no longer tolerate foreign meddling on the territorial issue and could strong-arm other parties to the dispute into submission on its own terms.

A Looming Crisis of Faith

Many investors will spend a lot of time thinking about what could go wrong in terms of economic growth, interest rates, inflation, taxes, and other big-picture risk factors. But I wonder how many are allowing for the kind of disruption -- which I believe grows likelier by the day -- alluded to in the following CNBC report, "People Have 'Huge Disbelief' in Government: CIO"?

A big risk for markets is the fact that faith in the US government's ability to fight the economic markets, as well as in central banks' monetary policy tools, is eroding, Steen Jakobsen, Chief Investment Officer at Litmus Capital Partners told CNBC Friday.

More quantitative easing will follow, in the US as well as in Europe and Japan, but the Federal Reserve and its chairman Ben Bernanke will prefer to wait until after the November mid-term elections, Jakobsen added.

"The fact of the matter is that people have a huge disbelief in government," he said.

"The real crisis 2.0 is not about the new normal or whatever term is being used, the new crisis is a crisis of faith in the US system. We're far away from that point now but that is a clear risk," Jakobsen said.

'Just As in the Late Stages of the Roman Empire, Magical Thinking Abounds'

In "Nothing Has Changed," Charles Hugh Smith, author of Survival+: Structuring Prosperity for Yourself and the Nation and publisher of the Of Two Minds Blog, gives us 18 reasons -- as well as the great quote used as the title of this post -- that more-or-less confirm the end is near as far as the U.S. empire is concerned:

Despite the legislative churn that produced thousands of pages of new laws and regulations and much self-congratulatory PR, nothing of any importance has changed.

What's truly amazing is how little has changed in the past two years of global financial turmoil.

All the truly important systems remain completely status quo:

1. The U.S. Global Empire continues to export paper (a.k.a. U.S. dollars) in exchange for real goods.

2. Global owners of capital and the Empire's owners/managers continue to buy the Empire's bonds in their endless trillions.

3. No Imperial war has been declared over and the troops withdrawn.

4. Not one of the hundreds of U.S. overseas bases has been shuttered; rather, new ones have been established and existing ones hardened and expanded.

5. The "too big to fail" banks have grown even larger and thus even more securely protected from failure by the Savior State.

6. The national Security State continues expanding at a staggering rate, seeking global hegemony over all electronic communications even as its own sprawling tenacles have no awareness of what the other tenacles know or don't know.

7. Thanks to "healthcare reform" (sic), the sickcare cartels have tightened their grip on the nation's income stream.

8. Lobbyists still control the lawmaking machinery of the Federal government. Indeed, any real reform has been attacked like a carcass tossed in a piranha-infested river; reform has quickly been stripped and then repackaged as a gutted faux reform for PR purposes.

9. The wealth/income/power gulf between the top 5% and the bottom 95% of citizens continues widening.

10. The two political parties continue spewing propaganda-laden facsimiles of the ideologies that once powered their values: both are owned or leased by the financial Power Elites and other cartels/fiefdoms. Neither party has any plan other than "extend and pretend" the status quo.

"Tax cuts" are double-speak for enriching the wealthy and saddling future generations with unpayable debts: "tax and spend" is now "borrow and spend" to both parties.

...

Nothing of any importance has changed. The engine of Empire is lugging a bit as the load increases, but the Empire's army of high-caste technocrats are hard at work, securing their perquisites and fat paychecks by keeping the sprawling global machine running.

Just as in the late stages of the Roman Empire, magical thinking abounds. This is America, the capital of can-do! We are audaciously hopeful because we always arise, newly envigorated by the unquenchable spring of American innovation, blah blah blah.

Thus is truth silenced because it might be painful, and require actual change rather than highly glossed facsimiles.

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Validation?

I've written about the war to our south on many occasions (including in my third book, published in March 2009), but now that the Wall Street Journal is talking about "Mexico Under Siege," I guess we'll soon find that lots of people are taking it seriously...?

Business Heads Plead as Drug Gangs Terrorize Wealthy City.

MONTERREY, Mexico—A surge of drug violence in Mexico's business capital and richest city has prompted an outcry from business leaders who on Wednesday took out full-page ads asking President Felipe Calderón to send in more soldiers to stem the violence.

The growing violence in Monterrey, long one of Mexico's most modern and safe cities, is a sign that the country's war against drug gangs is spreading ever further from poorer battlegrounds along the border and into the country's wealthiest enclaves.

Residents opened their newspapers Wednesday morning to find the ads taken out by Mexican business leaders, begging the government to send more military into the city. "Enough already," said the notice that ran in national and local papers, criticizing what it said was a slow response of police against "criminal bands that in every act look to establish a new boundary of terror."

Later that day, the body of Edelmiro Cavazos, mayor of the Monterrey suburb of Santiago, was found beside a highway. Mr. Cavazos had been abducted Sunday night, the latest in a string of attacks against politicians in Mexico's north.

His killing is another incident in a terrifying spell for Monterrey residents that began Saturday when armed gangs set up more than a dozen roadblocks on key boulevards of the city, paralyzing traffic for hours. The next day, a grenade was lobbed at the offices of an important television broadcaster. On Tuesday night, grenades were also hurled at several small businesses on the city's outskirts.

More than Scare-Mongering?

Maybe i'ts just me, but the following Washington Times report, "China Targets U.S. Troops with Arms Buildup," gives the impression that the world's "sole superpower" is running a bit scared. 

China is aggressively building up military forces capable of striking U.S. forces in the western Pacific and elsewhere as part of what the Pentagon calls an array of high-tech "anti-access" missiles, submarines and warplanes in its latest annual report.

The report to Congress on China's military power, released Monday, also warned that China's military is extending its global military reach beyond a weapons buildup to wage regional war with Taiwan and the United States. The report also questioned U.S.-China military exchanges, noting that Beijing is using the visits and meetings for political influence operations and intelligence gathering.

"China is fielding an array of conventionally armed ballistic missiles, ground- and air-launched land-attack cruise missiles, special operations forces, and cyberwarfare capabilities to hold targets at risk throughout the region," the report said.

Of course, it's possible that this article is a prime example of the kind of self-interested scare-mongering that helps the military-industrial complex get bloated defense budgets passed. But based on other reports I've read lately, it doesn't seem like there's too much exaggeration involved when it comes to describing China's aggressive efforts to build up its military capabilities.

Not Rocket Science

In When Giants Fall, I wrote that it

is only natural that the prospective and, to some great extent, hypothetical gains from greater integration with nations that are competing for a share of a shrinking pie are called into question. Rather, the...tendency will be toward protectionism, isolationism, xenophobia, and conflict.

And what do you know: a year-and-a-half later, the Wall Street Journal is reporting that a "Weak Economy Feeds Impulse to Turn Inward":

Economic stress has a way of bringing underlying tensions and suppressed emotions to the surface, for people and nations alike. That's certainly true for the U.S., where economic anxiety tends to bubble up in three related forms: isolationism, protectionism and anti-immigration sentiment.

Sure enough, as if on cue, whiffs of all three are in the air this summer, a natural byproduct of a long-slumping economy showing precious few signs of bouncing back to full health. The real question isn't why these feelings are in the air—that's obvious enough—but which leaders in both political parties will push back against them, in this fall's campaign and beyond.

The most obvious example is the capital's newly revived debate over immigration. That debate has just taken a strange new twist in the form of calls to modify the provision of the Constitution's 14th Amendment that guarantees citizenship to children—including babies of illegal immigrants—born on American soil. The Senate's Republican leaders have called for hearings to explore changing the way the amendment is implemented to block citizenship for offspring of illegal aliens—a call that got a rocket boost last week from a report by the Pew Hispanic Center saying that one in 12 babies in the U.S. are born to illegal immigrants.

The push may be coming mostly from Republicans, but it has a strange bipartisan twist. It turns out that the Senate's top Democrat, Majority Leader Harry Reid, back in 1993 sponsored a bill that also included a provision to block citizenship for children of illegal immigrants. Sen. Reid later called the bill a mistake and profusely apologized for offering it. Now, locked in a tough re-election campaign in which he badly needs Hispanic votes in his home state of Nevada, he's chiding Republicans for advancing an idea he once proposed.

If that debate is a sign of a certain nativist emotion bubbling to the surface, the related impulse to withdraw inside America's borders isn't far behind. On both the liberal left and the libertarian right, for example, the calls to simply vacate Iraq and Afghanistan are rising.

Beyond that, Rep. Barney Frank, chairman of the House Financial Services Committee, has tied the slumping economy directly to a desire to withdraw troops elsewhere as a way to save money. "I don't see why we need troops in Okinawa, why we need troops in Germany, why we need troops in Italy," Rep. Frank said in a recent interview on National Public Radio. "And people have said to me, well…that's what you do with allies, you have troops in their country. Well, if that's the case, where are the Belgian troops in Arizona? Where are the French troops in South Dakota?"

In fact, the impulses to withdraw troops and to stop illegal immigration are merging neatly right now, as some call for bringing troops home to station them instead along the U.S.-Mexico border.

Of course, simply calling for drawing down troops abroad doesn't amount to isolationism. But one of the reasons Defense Secretary Robert Gates is pushing so hard to find other ways to cut the defense budget is to prevent economic stress from translating directly into a broad reduction in America's global troop structure.

Meanwhile, the rise of economic protectionism is more subtle. "I do think hard economic times bring out tendencies toward economic isolationism, which manifests itself in both active or passive protectionism," says Robert Kimmitt, a veteran of international economic policy making who served as deputy Treasury secretary under President George W. Bush. "And that protectionism extends to both trade and investment."

Mr. Kimmitt says he sees some signs of active protectionism in a "Buy American" movement now taking shape in Washington, and passive protectionism in the lack of movement on free-trade treaties pending with South Korea, Panama and Colombia.

Less obvious but perhaps more worrisome is the impulse to restrict the flow of investment back and forth across America's borders. Signs of that impulse are popping up in calls to use tax penalties to restrict overseas investments by American firms, in the name of a politically appealing effort to stop the export of American jobs.

Predicting such developments is not rocket science. It's simply a matter of opening one's eyes, having some sense of history, and thinking things through. That same methodology also leads me to believe that efforts to counteract these impulses, as detailed below, will prove futile:

Some bipartisan moves are afoot to keep such emotions—natural enough at a time like this—under control. A bill President Barack Obama signed into law last week to toughen border security actually may help soothe passions; better border security can head off some uglier forms of anti-immigration sentiment.

But the most encouraging move is President Obama's recent pledge to complete the long-languishing free-trade deal pending with South Korea. Of course, saying that and actually doing it, in the face of union opposition, are two different things. The real test comes in the next few months.

A Burgeoning Relationship

In an interview with Russia Today, “Russia & China Cooperate Much Better Than Ever Before," Evgeny Bazhanov, Vice Chancellor of research and international relations at the Russian Foreign Ministry's Diplomatic Academy, discusses the burgeoning relationship between the two emerging powers, and makes it clear that they have more in common with each other than with the U.S. and other nations in the West:

“Even when we were allies in the 1950s, we didn’t have such cooperation as we have now and I think it’s because our relations now are based on a very solid basis. First of all, we have the same outlook as far as the international system is concerned: we want it to be multi-polar and they want it to be multi-polar, not controlled by the US or the west, but based on the UN, on international law, and on collective decisions of all countries of the world,” he said.

“Secondly, on most concrete international issues we have similar positions – on Korea, Iran, the expansion of NATO, the Middle East, etc. In addition to this, we did have problems left from history – all those issues were solved. Another factor is that we don’t have ideological differences which existed in the Soviet times. As I said, we were allies, but then, because of the ideological differences and geopolitical differences, and the border issue, etc., we became enemies. And to add another factor which helps to improve and promote relations between Russia and China, is the economic factor. We have economic interdependence.”