New World Order In the 21st Century

If you've been to keen to what's been happening in the world, perhaps you've sensed subtle but significant changes in the political and economic atmosphere of the globe. Since the fall of the Soviet Union, the bipolar dynamics of world politics surrounding the US and the Soviet Union seemed to have switched to a world paradigm with too much power concentrated in the United States. The United States may have, for a moment, enjoyed its momentum in its self-imposed delusion while the US used its unchallenged influences around the world, fueled by its Jews-dominated financial market and anti-terrorist doctrine. However, the US has made several critical mistakes unwittingly along the way.

The first mistake of the US was that it ignored the real threats lurking in the shadow of the world. For decades, the US foreign policies were based on the noble ideology of defending the freedom and fighting terrorism. However, this seemingly righteous mission of the US policing the world has brought growing animosity toward the US, especially in the Middle East and the third world. Supported by the Wall-street Zionists and the hawkish neoconservatives, the US has led a crusade against the parts of the world they unjustifiably labeled terrorist zones.

The second mistake was made with its consumerist economic policy. The American economy has been based on the system where more spending is promoted and more debt is accumulated to sustain the growth. At the same time, reliance on the cheap foreign labor and outsourcing of manufacturing functions to the third world, especially China, has increased the vulnerability of the US economy. Furthermore, excessive spending on senseless wars in Iraq, Afghanistan and other parts of the world has greatly weakened the US economy. The current meltdown of the US economy has diminished the influence of the US in the global stage and gave the rising powers of the world like China and Russia the opportunities to challenge the US power. Now, China and Russia are growing their economic power and also building up their military might. With China and Russia teaming up to oppose the US foreign policy in every step of its way, the US will, sooner or later, lose its dominance in the world politics whether or not the current global economic crisis is over.

For instance, we can see the US losing its dominance when the US cannot immediately persuade the UN security council to punish the North Korea for launching a rocket. The North Korea clearly knew that the US wouldn't be able to do much about it launching a rocket or missile test while its Big Brother China and Russia were behind its back.

New multi-polar global power paradigm will be formed within a decade or two. In this new paradigm, Russia, China, former USSR members and North Korea will align themselves with each other. The US will possibly form an alliance with North American nations, the United Kingdom, South Korea, Philippines and India. The European Union will continue its friendship with the US, but will become an equally powerful entity with its growing economy, and won't necessarily agree with every US policy, especially on the Palestine issues. We will also see a new alliance of the South American nations and the Middle East.

As soon as the US forces leave Iraq, chaos and instability will come back to Iraq, fueled by anti-democratic Islamic militants from the neighboring Arab nations. Within decades, the democratic Iraq will be toppled and convert to fundamental Islamic regime, possibly in the likes of Saudi Arabia or Iran.

Will the future be better or worse? One thing is clear. With ever-multiplying world population and increasingly scarce resources, it will become extremely difficult to feed and sustain the world population. Unless there comes technological breakthrough in bio-engineered agriculture and renewable energy, the world will fight each other for the scarce resources.

Economic Proposals of McCain and Obama

Yahoo! Finance wrote a nice article comparing key economic proposals from McCain and Obama. The following is some of the economic proposals from McCain and Obama:

McCain

Obama

Slow growth in Social Security, Medicare and Medicaid spending. Eliminate funds for pet projects, known as earmarks. Help pay for tax cuts by creating new jobs in the clean energy sector and developing new automotive technologies, which in turn will boost economic growth. Tax withdrawals of up to $50,000 from IRAs and 401(k)s at 10% in 2008 and 2009. Reduce capital gains tax to 7.5% from 15% for two years. Buy bad mortgages and renegotiate loan terms based on current value of home. Convert failing mortgages into low-interest, FHA-insured loans. Increase capital requirements on financial institutions. Increase transparency of complex financial instruments. Wants to clarify and unify regulatory authority of financial institutions, including the mortgage insurers. Spur economy and job growth by cutting corporate tax rate and temporarily lowering current rates on dividends and capital gains. Require companies to automatically enroll their employees in retirement plans they offer. Speed introduction of "flex-fuel vehicles" that can run on ethanol blends and gasoline. Eliminate a current tax break for oil companies, but lower corporate taxes across the board. Permanently repeal the Alternative Minimum Tax, the so-called "wealth tax" that threatens the middle class. Reduce corporate tax rate to 25% from 35%.

Help pay for new proposals by drawing down troops in Iraq war, raising taxes on high-income filers and cutting certain corporate loopholes. Give temporary tax credit of $3,000 in 2009 and 2010 to companies for each new full-time employee it hires in the United States. Require financial institutions participating in bailout to put a 90-day moratorium on foreclosures for homeowners "acting in good faith." Impose liquidity and capital requirements on investment banks. Either nationalize or privatize giant mortgage companies. Establish a database of censured or debarred mortgage professionals, so borrowers can easily check the credentials of lenders. Raise minimum wage to $9.50 an hour by 2011 and tie future rises to inflation. Set up $60 billion infrastructure investment bank to help fund public works. Also, create a $25 billion emergency Jobs and Growth Fund to fund other infrastructure projects. Give a temporary tax credit of $3,000 in 2009 and 2010 to companies for each new full-time employee it hires in the United States. Require companies to automatically enroll their employees in 401(k)s or IRAs. Provide a federally funded match on retirement savings for families earning below $75,000. Tax oil profits and use the money to help fund $1,000 rebate checks for consumers hit by high energy costs. Allow troubled homeowners to refinance to a loan insured by the Federal Housing Administration. Create a $10 billion fund to help victims of predatory loans. Provide $1,000 tax cut for working couples making less than $250,000.

Conservatism in Economic Perspective

Neoconservatism

The majority of the Republican Party today are neoconservatives who support the free market, limited welfare, and traditional cultural values, but also support a greater role of US in the international affair through strong military intervention. Their policies are based on supply-side economics and social conservatism.

Conservative Republicans believe that the society is better off with minimum intervention by the government. Conservatives support market economy and opposes high tax rates on corporations since corporations are the ones who create jobs and wealth for the society. They believe that low tax rates on corporations result in increased production and economic growth, which will in turn pass the wealth on to the working class and bring the same or more revenue for the government. This belief is known as supply-side economics.

Republicans generally oppose minimum wage increases, believing that such increases will hurt many businesses and result in job loss and inflation.

Conservatives also believe that individuals should be responsible for their own wealth and welfare without much governmental assistance. They support small government spending on unemployment benefits, health care and other welfare programs. Instead, Republicans prefer funding religious charities and other private charitable organizations to supplant government welfare spending.

Compassionate Conservatism

President Bush popularized the catch phrase compassionate conservatism since his presidential campaign to attract swing voters. Although compassionate conservatism is rather considered an empty slogan, the underlying idea of applying compassion in conservative policies may have influenced the Bush government to expand the Medicare program, give government grants to Christian charities and increase overall government spending.

Related Links:

• 2008 Republican Platform
  

Modern Democratic Ideology in Economic Perspective

American Liberalism

Before understanding the economic agenda of the Democratic Party, it is important to first understand the political ideology of the Democratic Party. Traditionally, Democrats believe in social liberalism.

Liberalism is a political ideology that seeks to maximize individual liberty. Liberalism in the United States is known as social liberalism which should not to be confused with classic liberalism, as referred to in the rest of the world.

Social liberals believe in moral values such as empathy, compassion, trust, and cooperation. Generally, they believe that the State must provide the necessary socioeconomic support such as education and welfare for the poor and the helpless in order to achieve positive freedom and social justice. Such beliefs lead American liberals to support progressive income taxes, regulation of society, and more state enterprises. They support:

• Government spending on education, health care, child care, and often many state enterprises.
  
• National health insurance or universal health care in a variety of forms to address the rising costs of modern health insurance
  
• Regulatory bodies over private enterprise in the interests of workers, consumers and fair competition.
  
• Spending on social security.
  
• A moderate or heavy level of taxation.
  
• Decentralized decision-making.
  
• Internationalism.
  

Centrism, The Third Way

However, as the Democratic base traditionally dominated by labor unions and working class became more diverse to include the intelligentsia and college-educated professionals, the Democratic base today includes a significant number of conservatives in addition to liberals. In recent decades, the Democratic Party has adopted a centrist economic and more socially progressive agenda.

Today, Democrats advocate more social freedoms, affirmative action, balanced budget, and mixed economy. The party believes that government should play a role in alleviating poverty and social injustice, even if such requires a larger role for government and progressive taxation.

Related Links:

• Democratic Party Platform, 2008, PDF
  
• Obama, McCain, and Your Money:
  Where the Candidates Stand on Key Economic Issues
  

Who's to Blame for Economic Downfall?

When a natural disaster strikes, we have no one to blame but God or Mother Nature. Yet, when the economy goes bad, there surely is someone to blame because economy is totally a human affair. Now that the US economy is freefalling and possibly heading for the second Great Depression, many bright minds are asking themselves: How did the economy arrive at this mess? Who's responsible for this economic downfall?

Who Killed the Economy? @ Yahoo! Video

An ongoing poll by Portpolio.com allows people to play a blame game in which they pick the culprit "who's most responsible for the current economic crisis." More than 20,000 people have participated in this poll. Some of the candidates are as follows:

Alan Greenspan

Former Chairman of Federal Reserve, Alan Greenspan was once revered by everyone in Academia as economic genius, but now no one seems to hesitate pointing finger at him as the chief culprit of US economic doom. Overly supportive of easing lending standards and keeping low-interest rates too long, he's in part responsible for the current subprime debacle.

All the time, his low-rate, cheap-money mantra fooled low-income people with second-rate credit into believing that he was looking out for them, but all along, he was kissing up to greedy mortgage lenders, creating financial monsters doomed to self-destruction.

Now, we've seen continous collapses of financial institutions: American Home Mortgage, Countrywide Financial, Bear Stearns, IndyMac, Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch, AIG and Washington Mutual. It all started with overly deregulated policies of Alan Greenspan. Talk about free market. It led to market failure.

President Bush

Mr. President must have got bad grades in Economics in college. Or, is it simply that he was ill-advised by his advisors? Obviously, his priorities were not on U.S. Economy, but rather on War against Terrorism. His mind was so occupied with wars in Iraq and Afghanistan and with threats from the so-called axis of evil — Iran and North Korea — that he failed to notice the early signs of failing domestic economy. He kept using the same stimulus gimmicks and rate cuts to keep the economy alive and the Republicans in power. Now that the economy is crashing, his 700 billion dollar rescue plan may be too late, too costly for already suffering people.

Moody's and S&P

These ratings agencies gave too rosy credit ratings for shaky financial companies. Their misleading ratings for failing investment bankers have left the market unprepared for the coming turmoil. When it all came, it was too late for many investors and bankers. People put too much faith in these ratings agencies. And now we suffer.

Hedge Funds

Those who invest in hedge funds are a select group of greedy wealthy investors who engage in short selling of risky investments for quick and big money. Their short selling activities have resulted in roller coaster ride of the stock market. Those reckless hedge fund managers wanted quick profits and made all the odd, risky investments that, when the market began to crumble, had dire effects on the financial market. The recent crackdown on short selling in Wall Street should give a good lesson to those greedy risk-takers.

Angelo Mozilo

Cofounder of Countrywide Financial and IndyMac, he let Countrywide hand out mortgages like play money. Countrywide, like many other mortgage lenders, doled out easy money to subprime home buyers without income or job verification. But by 2007 Countrywide was struggling with rising rates. Countrywide's collapse and subsequent bailout by Bank of America was a prelude to the current financial market meltdown.

OPEC

Some don't seem able to make connection between soaring oil price and the current financial crisis. My understanding is that high oil price has caused several airline bankruptcies, inflation and rising costs of living. The soaring gas price and inflation have put so much burden on people that they couldn't pay their mortgages any more. That's how the housing bubble started. People blame OPEC for keeping oil supply tight and driving oil price high. But I disagree. I believe the high gas price is the result of speculatory investing. Who are the real conspirators, Arab nations plotting against infidels or greedy Wall Street speculators? Anyway, it's time to invest in the development of alternative energy resources.

Fannie and Freddie

These government-subsidized, publically traded mortgage companies made too many bad loans on home mortgages with taxpayer's money. When the real estate values slid, their poor management has caused loss of consumer confidence in the housing market and caused their stock prices to hit the bottom. Government bailout of these companies would only cost taxpayers plenty money.

National Association of Realtors

This group of crooks ripped millions of home buyers with fraudulent real estate appraisals and relentlessly put out misleading positive outlooks on the real estate market even as it began to plummet. If they had been honest with home buyers, people wouldn't have bought those townhouses in Naples, Florida or Phoenix and later go default on bad loans.

China

When we get trouble, we blame it on our trade partner. But if you think about it, which country in the world has the greatest demand for the globe's natural resources and caused oil price to skyrocket? Not only that, China continues to give US trade deficit and keeps piling in our dollars. All this weakened our economy and contributed to the current crisis. China must stop exporting poisoned food. It's time we find a new trade partner who knows what moral and ethics truly mean. How about India, Mexico or Brazil?

After all, I believe everyone is both a participant and a victim of this economic debacle that stemmed from greed. And we all have to share the pain for a long time.