Daily Archives: February 6, 2017

In nature, there are weather conditions, referred to as perfect storms, arising from a rare combination of adverse meteorological factors creating violent storms that significantly affect the socio-economic conditions of an area. Social scientists refer to similar adverse factors as cultural amplifier effects. History shows that when leaders of empires were unable to adequately maintain a stable economy, govern diverse subcultures, and care for marginalized populations, these failures led to a socio-economic perfect-storm of cultural amplifier effects that resulted in the collapse of their respective empires.

The unprecedented and raucous 2016 presidential campaign, and its aftermath, suggests that there are several cohort pressure systems developing within the US felons of mass incarceration, their children, and the aging baby boomers. Unbeknown to most citizens, these cohorts are significantly influencing the American culture in unpredictable ways. These pressure systems are likely to develop into cultural amplifier effects that will converge over the US, leading to a socio-economic perfect storm, and possibly leading to the collapse of the US as a world empire.

In his book, Collapse: How Societies Choose to Fail or Succeed (2005), Jared Diamond, believes that the elite leaders of nation-states develop a type of group-think whereby they do not notice the warning signs of social storms or, if they do notice, they may not be motivated to change the status quo. Currently, there are approximately 2000 correctional and detention facilities in the US with over 450,000 employees, and thousands of businesses with millions of employees supporting their operations. Obviously this is a large group of constituents interested in continuing the status-quo.

Rewards and sanctions are necessary for maintaining social order. However, they become counter-productive when they no longer create benefits. While only about 6% of the population is or has been incarcerated, the hidden problem is the cost to the US infrastructure when this percentage transitions from being taxpayers to tax-users. The percentage of the population effected is even higher when you consider the collateral effects to the families and communities of the incarcerated. In 2014, a little less than 3% of the US population was under some type of corrections supervision, many with non-violent offenses and mentally ill who would be fiscally better served in the community. By 2026, if policies remain the same, this population will be over nine million people, along with an estimated 24 million former felons at a budgetary cost in the trillions of dollars.

A second cultural amplifier effect is the children of prisoners (including parents previously in prison), numbering approximately 13 million in 2014, according to the National Resource Center on Children & Families of the Incarcerated. In their book, Children of the Prison Boom (2014), Wakefield & Wildeman identify, that before 1990, children grew up within four main contexts: family, neighborhood, school, and family stressors. Afterwards, a new context was added imprisonment of a parent. This exponentially increasing cohort of children will be raised in poverty and many in foster care. They have a greater potential for mental illness and addictions, post-traumatic stress, to drop out of school, and to become involved in domestic terrorism. Many will follow their parents into prison. The generational effect has and will continue to create a significant cultural group that is outside the American norm, even as a subculture.

A third amplifier effect is the aging baby boomer population, and the substantial decrease in tax income along with an increase in tax use. In 2015, the National Association of State Budget Offices reported funding for Medicaid, public aid, and corrections increased by 16% while education increased by only 8%. By 2026, these three budgets will significantly increase along with a 77% rise in social security and a 72% rise in Medicare; three-quarters of the Federal budget will be allocated for mandatory expenditures. One does not have to be a genius to understand that the price tag for the prison industrial complex will also rise exponentially. History shows us that economics played a major factor in the collapse of most fallen empires.

While the nations elite continue to focus on the controversial results of the 2016 presidential election, saving their respective statuses and their political parties, they fail to see the darkening storm clouds on the horizon. Shall we pretend that all is well and watch the American culture be swallowed up in a socio-economic perfect storm? Or should we have the courage to end the status quo, to tear down the structures that create apartheid groups and build cooperative, thriving communities that will sustain America through the next century?

Image credit: Chainlink fence metal by Unsplash. Public domain via Pixabay.

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Mass incarceration and the perfect socio-economic storm - OUPblog (blog)

The Uncertainty That Could Cause an Economic Crash 2017 Has Begun

There is a distinct possibility, if not an actual probability, that the world will soon analyze the causes of the great economic crash 2017 or economic crash 2018. Indeed, the keyword is economic crash. The point is that the next two years are mired in uncertainty. Investors would be wise to review the general causes of economic depression or the Great Depression itself.

No economic depression, stock market crash, or economic collapse are exactly alike. But they share points in common which fall in one of two categories: exuberance or socio-political disruption. Exuberance and socio-political disruption have already stamped their marks this year. Thats why no keen observer could simply dismiss the chance of an economic crash 2017.

The combination of factors is easy enough to identify, but analyzing the various aspects of an economy crash can take decades. For example, determining the causes of the Great Depression of 1929 continues to keep analysts as busy as understanding the causes of the Wall Street crash of 2007/08.

If we had a complete understanding, we might better determine the chance of an economic crash 2017. But we dont because there are still contradictory positions. There are also different ways to interpret the causes of a stock market crash, especially one that leads to economic depression.

The more recent the crash, the more complex and intertwined the causes. The effects are always global, and if theres any difference, for example, between 1929 and 2008, its the speed of the domino effect. One of the keys to understanding the ever more complex system is that no market exists in risk isolation.

That means that the current market includes a substantial amount of risk resulting from the social, political, economic, and financial interplay between the United States, the European Union and the Big Asian economiesincluding the Tigers.

The gloomy outlook had more to do with the economy and the markets than politics. Now, barely two weeks into Donald Trumpspresidency, the Dow Jones is at record highs. But the risk of a total economic collapse and an implosion of the current world order seems almost inevitable.

The Trump policy, mainly focused on infrastructure investments, the recovery of the domestic economy, and tax relief for businesses, could yet have positive effects on the American economy. Economists expect GDP to exceed 2.2% in 2017. There are even those who believe the United States can resume its role as the locomotive of the world economy.

This would certainly benefit from an accommodating monetary policy. But the market is not betting on this now. The Fed seems determined to increase the nominal interest rate. Shy of charging like a bull, last New Years Eve, the realistic trader could have expected an initial rate hike and a subsequent stabilization in the face of predictable but moderate growth.

But that was before Trump played his hand. It was also before the media, and an entire hardly ad-hoc protest machine, revealed itself. Indeed, 2017 promises to be a very interesting year not only from the economic point of view, butand most of allfrom its political developments and repercussions.

So far, Trump has done what no other politician has dared try before. Hes done exactly what he promised during the campaign, diluting or softening none of his radical stances. This has caught pundits by surprise. The chances of the elections in four major European states (Germany, France, Holland, and probably Italy) going to parties espousing Trump-like views has increased.

But how shall these and other events influence the markets and financial investments? More significantly, how will these events spark a stock market crash of such proportions as to leave an economic collapse in its wake?

Its a chance of timing that all the likely turmoil of 2017 comes on the centenary of the October Revolution of 1917 in Russia. Thats an anniversary like no other. Surely, the socialist forces of the world are preparing to remember it. They could not have asked for a better 2017 to mark the occasion.

To many liberalsand conservativesTrump must appear like a veritable combination of Lenin and Czar! The centenary will take place in a world that, apart from the market euphoria, is still experiencing a profound socio-economic crisis. Nobody has yet to show the solution and the possible ways out.

Part of the problem is that the media has masked the extent of the crisis. Its more than simply economic, there are deep sociological effects. Indeed, the sheer value of wealth amassed through the markets defies the imagination. There are more billionaires than ever. But the disparity of wealth is equally flabbergasting.

Its not even an issue of the fabled one percent. The entry fee to that club is an income of no less than $350,000/year in the United States. (Source: The .1 percent are the true villains: What Americans dont understand about income inequality, Salon, April 14, 2016.)

However, the one percent is nothing compared to the 0.1 percent. They own as much wealth as the bottom 90% of America combined. (Source: Ibid). These include some of the Silicon Valley tech CEOs and a few speculators (George Soros comes to mind) who have championed the anti-Trump cause so vociferously.

Thats a key to predicting just how disruptive the anti-Trump protests could become. Indeed, a rough estimate of the 0.1 percent suggests Trump has at least half of those billionaires against him. Therefore, they have plenty of funds to keep the protest and disruption machine running. Trump will push his agenda, but he could end up like the captain of a ship that lost its rudder.

The reason why Trumps contested administration can affect the markets and prompt an economic crash is the unknown. Former U.S. defense secretary Donald Rumsfeld once attributed the difficulties of the Iraq campaign to the difference between known unknowns and unknown unknowns.

Many pundits made fun of the seemingly nonsensical statement, but Rumsfeld was brilliant in his description. There are risks you can expect and risks you never even considered. The Trump era has brought us the latter situation. Markets thrive in volatility, but markets dont like uncertainty for long. Global economic growth has depended ever more on a stable America.

The U.S. political scene will play a key role in determining whether global growth will accelerate. Trump has proposed a mixed bag of policies; they are both pro-growth and anti-growth.

The fact that the new president has started from day one trying to actuate some of his more radical proposals has frightened the world. He has launched the Wall, blocked immigration from seven countries, put Iran on notice, stripped Americas participation in the TPP, and reversed over fifteen years of hostile politics toward Moscow in a matter of days.

It remains to be seen if Trump proceeds with tax reform and reducing regulations. But the markets seem to believe him on that front. Indeed, hes done nothing if not keep what he promised his voters.

But while investors like some of the policies, its unclear what effect they will have in the medium term. For example, Trump will, by choice, focus on restricting global trade and deporting illegal immigrants. Inevitably, this policy will catch up with basic economics, such that the economy will start slowing down. It may even enter a phase of recession.

Trump will essentially take America away from global pro-growth policies. These have sometimes helped counter the effects of misguided government policies. Now, America will have to endure a bigger slice of the risk.

And what risk indeed: President Trump wants to lift or significantly revise the Dodd-Frank Act. This was a cornerstone of President Obamas mechanisms to reduce the risk of another Lehman Brotherscollapse and economic depression. The new president has already announced steps to roll back the rules that have ostensibly reduced market risk but reduced gains since 2008. (Source: Trump Moves to Roll Back Obama-Era Financial Regulations, The New York Times, February 3, 2017.)

Apart from the risk, its telling that Trump is moving like a peregrine falcon on his prey on this policy, which benefits the one percent. Indeed, Trump appears to have forgotten the forgotten man of the campaign that earned him so many votes from the less privileged Americans.

The Dodd-Frank Act was one of the cornerstones of the Obama administration. Trump wants this to revive the spirit of entrepreneurship, but it might prove a surprise that could catch all of us unprepared.

At first there will be growth. But speculation-based growth produces surprises, not all of them of the good kind. Risky investments might appear to be safer than they are. Investors tend to see the risk of a stock as a potential deviation from the expected level of profits. They pay little attention to price in the sense of the P/E ratio.

Trump has other priorities; he has preferred the banks to the common man. But financial deregulations could produce veritable fireworks. The Dodd-Frank Act has limited the extent that banks can speculate. Soon, they will be back in the financial Wild West, reviving the conditions that led to the subprime collapse.

Finally, Trump has started to sound the first salvos of a potential intervention in Iran. Of all the risks, this is the biggest. Iran is a unified nationalist country with a patriotic military. It wont be a cakewalk like Iraq. Getting bogged down in Iran would be far costlier. Its not clear where Trump wants to go by taunting Iran, but so far, it appears like the kind of risk that could cause economic collapse 2017.

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Economic Crash 2017 and How the Next Financial Crisis Could Be Worse Than 2008 - Lombardi Letter

The Winter Universiade, or World Student Games, which opened on January 29 in Almaty, saw 109 billion tenge ($330 million) worth of investment in related infrastructure, including the 12,000 capacity Almaty Arena. As part of its major PR push to portray Kazakhstan as a global player, Almaty hopes to use media coverage of the games to bolster the nations international credentials. (Photo: Paul Bartlett)

Kazakhstan made the front pages of international newspapers last month when it hosted the first round of Syria peace talks. The diplomatic initiative is kicking off a year that will see a major PR push to portray Kazakhstan as a global player. For some years now, Kazakhstan has embraced soft power with a vengeance, as part of its mission to gain a prominent spot on the world stage. It is taking things to a new level in 2017. With one session of peace talks already under its belt, the capital city, Astana, is readying for the EXPO-2017 international fair. Down in the business capital, Almaty, the winter version of the World Student Games closes this week. Meanwhile, in New York, Kazakhstans diplomats have just begun their two-year stint on the United Nations Security Council. The initiatives are intended for a domestic audience, as much as to draw the attention of the outside world. Over the last decade, President [Nursultan] Nazarbayev has engaged in diplomatic 'badge-collecting' hosting international prestige events, partly as a component of his legacy-building strategy, but also as a bread-and-circuses tool domestically, Central Asia analyst Kate Mallinson told EurasiaNet.org. Kazakhstan has expended huge financial and diplomatic capital on its reputation-burnishing exercises, promoting the country as a responsible member of the international community and a multicultural bastion of tolerance. Analysts believe these efforts are now beginning to earn diplomatic dividends. Kazakhstans portrayal of itself as a geopolitical player and a multicultural, multi-ethnic society has paid off in a number of instances, and a recent example is the fact that Astana hosted international negotiations on Syria, Anita Sengupta, an expert on the Eurasian region at the Calcutta Research Group, told EurasiaNet.org. By hosting the peace talks in Astana for which Kazakhstani ally Russia was a driving force Nazarbayev is positioning himself as a peace broker. He has already won plaudits for his efforts in nurturing the rapprochement between Turkey and Russia last year that culminated in these talks the first to bring the Syrian government and some selected rebel groups together to negotiate after six years of warfare. Relations between Russia and Turkey collapsed following the downing of a Russian fighter plane by Turkey in November 2015, and Nazarbayev, an ally of both, was credited with bridging the divide. Kazakhstan pulled off another diplomatic coup in 2016, when it secured Asias vacant non-permanent member seat on the Security Council for two years, beginning this January. To secure the council seat, Astana successfully countered concerns over the countrys deteriorating record on protecting basic individual rights. While Kazakhstan has scored some points on the international arena, officials are also harnessing soft power initiatives to deflect attention from such concerns at home. This allows them to distract public attention for a time from pressing problems in the economy and in the social sphere, political commentator Amirzhan Kosanov told EuraisaNet.org. Astana is battling to keep the public onside after two years of economic stagnation, brought on by the collapse of energy prices in 2013-14. Economic growth slowed to just 1 percent in 2016, according to preliminary figures its lowest level since 1998. The government is also eager to dampen any protest moods in the country. Last year, authorities were caught off guard, when peaceful demonstrations erupted across Kazakhstan over contentious land reforms that were later shelved. There are signs that these soft power initiatives are not having the desired effect on domestic audiences. Events such as the winter student games are hoped to distract the domestic population from ailing socio-economic conditions, but the omnipresent billboards advertising the forthcoming games in Almaty hold little resonance for Kazakh citizens who have become jaded, suggested Mallinson. Kosanov also pointed to the fact that events like EXPO-2017, which have required huge input in public funds on the part of the state, are taking place against a backdrop of a general downturn in the economy and a deterioration in the lives of ordinary people. And naturally this gives rise to some dissatisfaction among the public, especially since the preparations for the exhibition have been marred by huge corruption scandals, Kosanov added. Kosanov was alluding to a graft scandal that rocked the Astana EXPO-2017 fair, an international exhibition, previously staged in Milan and Antalya, which the government lobbied hard to win, and which opens in June, featuring the theme of Future Energy. Last year, Talgat Yermegiyaev, the former head of the events organizing company, was sentenced to 14 years in jail after he was found guilty of embezzling 10.2 billion tenge ($31 million) from the fairs funds. Despite this scandal, the death of three workers on construction sites for the exhibition and the collapse of one of its buildings, the government still sees Astana EXPO-2017 as a chance for Kazakhstan to showcase itself to the world. In the hope of enabling an inflow of visitors, authorities have abolished visas for citizens of a host of countries. That move helped Kazakhstan secure a place on The New York Times list of top places to visit in 2017. The newspaper described the country as a luxury eco-destination. Then there is the Winter Universiade, or World Student Games, which opened on January 29 in Almaty and saw 109 billion tenge ($330 million) worth of investment in related infrastructure. Almaty hopes to reap the benefits from international media coverage highlighting its credentials as a winter sports destination. To sell the games to the public, the government is touting their legacy. The city now boasts new, state-of-the-art facilities, such as the 12,000 capacity Almaty Arena, and what will become a new residential district, which was built to house the athletes. EXPO-2017 is estimated to have cost around $3 billion, financed by a mix of public and private money. After critics raised fears that the futuristic glass and steel pavilions were a potential white elephant, Nazarbayev intervened personally, earmarking the site for the Astana International Financial Center, which is intended to make his glitzy new capital a regional banking hub. With the Syria talks drawing a satisfying level of global attention, the Winter Universiade winding down and EXPO-2017 on the horizon, Kazakhstan will hope that this year it can remain in the international headlines for all the right reasons.

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Kazakhstan Going Into Soft Power Overdrive - EurasiaNet

Chief peace negotiators Fidel Agcaoili of the NDFP and Silvestre Bello III of the Philippine government shake hands after signing supplemental guidelines for the conduct of peace talks. Looking on is Elisabeth Slattum, Norwegian special envoy. (Photo by KARLO MANLUPIG/Inquirer Mindanao)

DAVAO CITY Can parties in conflict negotiate and reach agreements even without a ceasefire?

A consultant of the National Democratic Front of the Philippines said that the issue on the withdrawal of the unilateral ceasefire declarations should not be a reason to totally suspend the peace negotiations between the revolutionary movement and the Philippine government.

President Duterte on Friday withdrew the governments indefinite unilateral ceasefire following the announcement of the New Peoples Army to end its own ceasefire effective February 10.

The NPA cited President Dutertes refusal to release 400 political prisoners and the continuing presence of government forces in the communities as reasons it terminated its ceasefire.

Randy Malayao of the NDFP told the Philippine Daily Inquirer that despite the absence of any ceasefire orders during the terms of former Presidents Fidel Ramos, Joseph Estrada, Gloria Macapagal-Arroyo and Benigno Aquino III, several important agreements and documents were signed.

During the time of Ramos, at least eight agreements were signed after the formal talks was initiated following the collapse of the attempt to negotiate during the administration of Corazon Aquino.

During the exploratory talks between the NDFP and the Ramos administration, both agreed on the The Hague Joint Declaration in September 1, 1992.

This agreement serves as the foundation of the negotiations where parties agreed to tackle in a successive manner the different substantive agenda including human rights and international humanitarian law; socio-economic reforms; political and constitutional reforms; and the end of hostilities and disposition of forces.

Major breakthroughs, in the absence of a ceasefire, were also achieved from 1994 to 1995 when both peace panels agreed to sign three essential documents including The Breukelen Joint Statement of June 14, 1994; the Joint Agreement on Safety and Immunity Guarantees (JASIG) of February 24, 1995; and the Agreement on the Ground Rules of the Formal Meetings of February 26, 1995.

Following the start of the formal talks in 1995, both parties signed the Additional Implementing Rules Pertaining to the Documents of Identification in June 26, 1996, the Supplemental Agreement to the Joint Agreement on the Formation, Sequence and Operationalization of the Reciprocal Working Committees in March 18, 1997 and the Joint Agreement in Support of Socio-economic Projects of Private Development Organizations and Institutes in March 16, 1998.

The Additional Implementing Rules of the JASIG Pertaining to the Security of Personnel and Consultations in Furtherance of the Peace Negotiations were also signed in March 16, 1998.

Under Ramos, the Comprehensive Agreement on the Respect for Human Rights and International Humanitarian Law, the first in the four substantive agenda, was forged. It was signed though during the term of President Estrada. There was no ceasefire then, Malayao said.

Several joint statements were signed during the Arroyo administration where the past agreements were reaffirmed.

One of the major developments during Arroyos presidency was the signing of the Joint Monitoring Committee that puts into action the monitoring of human rights abuses.

It was also during the Arroyo administration when both parties signed a memorandum of understanding with the Royal Norwegian Government as the third party facilitator.

During the term of President Aquino, a joint communique and a joint statement were inked to reaffirm the previously signed agreements until the talks hit a snag and was in impasse by the time Duterte was elected.

A source involved in the peace process, who requested anonymity for not having been authorized to speak publicly on the issue, said that while a ceasefire would create better conditions for the negotiations, the entire peace process should not be doomed just because both parties could not immediately address unresolved issues on the temporary cessation of hostilities.

There are other more significant substantive agenda that are being discussed on the table. And these, the CASER (Comprehensive Agreement on Socio-Economic Reforms) and the CAPCR (Comprehensive Agreement on Political and Constitutional Reforms), are the much-needed reforms that would address the causes of this conflict, the source said.

The source, however, said that forging a bilateral ceasefire agreement would accelerate further the present peace process adding that optimism had been high between two parties that a final peace agreement could be achieved under the present government.

Royal Norwegian Government Special Envoy Elisabeth Slattum, during the closing ceremony of the third round of talks between the Philippine government and the National Democratic Front of the Philippines in Rome last January 25, said that setbacks including clashes were expected.

The statement came after government forces and communist guerrillas clashed in North Cotabato as talks were being held in Rome.

I have yet to witness a peace process where there have not ever been ups and downs, a peace process that has not been messy, where there havent been any clashes on the ground or violations of ceasefire or publicly expressed frustration, Slattum said.

Peace remains the only way even if negotiations become extremely challenging, according to Slattum.

In those difficult moments we have to remind ourselves that the way to deal with these challenges is by meeting, by dialoguing, talking, discussing, arguing. This is the only way to move forward here at the negotiations table, Slattum said. SFM

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PH gov't, communists urged to pursue talks even without ceasefire - Inquirer.net

Jadaliyya

New Texts Out Now: Helga Tawil-Souri and Dina Matar, eds. Gaza as Metaphor Jadaliyya Concomitant to territorial, aerial, and maritime enclosure is the range of socio-economic and psychological impacts of the process of rendering Gaza isolated, impoverished, marginalized, always on the edge of collapse. As many of the contributors ... and more »

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New Texts Out Now: Helga Tawil-Souri and Dina Matar, eds. Gaza as Metaphor - Jadaliyya

The real priorities of a foreign policy of any state should reflect the overall dynamics of the international context (i.e. threats for national security or opportunities for the expansion of the states role vis-a-vis other players). This should also apply to alliances and inter-state groupings.

Today, the V4 faces the sort of challenges which lay at the very root of the group emergence. The European political and security system is again in a state of flux with the institutional framework is unfit for the present and future developments in and outside of Europe. The V4 is hence confronted with, or indeed put in between, three overlapping crises.

The first is the crisis of the west (i.e. European integration), followed by the end of the east as we know it (the Ukrainian Conflict and the end of the post-Soviet model of socio-economic development) and lastly the collapse of the south (i.e. war, terrorism and the refugee crisis).

At the same time, any room to manoeuvre in these external actions has never seemed so narrow as it is today. Strategic priority should be given, therefore, to the task of not being squeezed by the aforementioned arc of crisis to the extent in which the V4 member states would opt for individual ways to cope with the challenge.

Poland may be inclined to focus on the eastern dimension with Slovakia, and to respond to an ever closer eurozone integration with Hungary and the Czech Republic, while neglecting the migration and the Balkans issues of the south, an area of importance for the Hungarians, Czechs and Slovaks.

Preserving unity inside the V4 and avoiding situations where they could be played off of one another by those outside of the group should become the priority of all priorities. In these times of profound crises to the European order, nothing else is worth the time and energy of Central Europe.

OlafOsicais a Polish sociologist and political scientist, chairman of the Centre for Eastern Studies (OSW) Board, director for risk assessment at Polityka Insight.

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Where Should the External Priorities of the Visegrd Lie? - Visegrad Insight