On November 20, 2012 Asian nations gave President Barack Hussein Obama a finger in the eye. The meeting in Phnom Penn, Cambodia included 15 Asian nations, representing about half the world’s population. These nations informed the world of the creation of the Regional Comprehensive Economic Partnership. That partnership excludes the United States.
Meantime, Obama was in Cambodia selling Western snake oil: A noxious brew created behind closed doors in the bowels of the secretive Obama Administration. Titled grandly, the ‘Trans Pacific Partnership,” or TPP, could have been called Tales of Narnia and would have meant about as much to the Asians. Cobbling this mess together, the Obama Admnistration mixed this concoction in so much secrecy one would have thought it was the economic version of the Manhattan Project. To the Asians, the TPP is just as big a bomb.
The Obama Administration held the details so close to the chest, not even congress knew what was in the agreement. Obama and Trade Representative Ron Kirk wanted it that way. Obama and his people, and likely the financial industry and US Chamber of Commerce, must be disappointed.
The Asians, including China, are not buying what Obama is selling. Basically they told him to take his TPP and jump off a cliff, fiscal or otherwise. Considering the US was going to leave China out of the TPP, the slap in the face to Obama must have loosened some of his teeth.
The TPP was part of what Hillary Clinton announced as the “Asian pivot.” This was supposed to be a new geopolitical change in strategy that included everything from security to trade. Well, Hill and Obama can pivot like Baryshnikov doing his moves in Swan Lake ballet – the Asians are still not interested.
In recent years, these so-called “trade agreements” such as TPP are less about trade and more about expanding power by the Western elite, over all aspects of national, political and economic life in the countries who sign onto the agreements. Such agreements nearly always include alliances in security, banking, insurance, education, military, intelligence gathering and are a lot less about trade. In that regard, only two of the TPP’s 26 chapters actually have anything to do with trade.
The agreement did include provisions for an “international tribunal” which would dictate laws in countries which signed onto it. The agreement made legal technocrats, or in this case, corporate lawyers acting as “judges”over any issues that came up under the agreement.
The entire TPP and other such agreements are part of an attempt to connect the world with regional networks or alliances and exchanges.
I can not stress enough, the agreements are really about transferring power from individual nations to some unelected appointees of the powers that be. They have more twists and turns than my ride up Signal Mountain in Chattanooga, Tennessee.
The transfer of power from representative governments and individuals to unelected bodies and technocrats (who make most of the decisions on economics and everything else is) an on going process. Creating such a network begins to take apart a thousand years of Western history starting at Runnymede when King John was forced to sign the Magna Carta. The growing tendency to transfer wealth and power to a small coterie or cartels is breath taking in scope.
For the United States, the TPP would have meant foreign-owned companies in the US would not be subject to US laws. Although most of our transnational corporations and banks often appear not to be subject to our laws anyway.
You would not have heard much about this from the Mainstream Media. CNBC, Fox Business or even Bloomberg failed to inform the American public about the Trans Pacific Partnership, or that the world is rejecting one of our finely honed recent Byzantine arrangements.
While our media is obsessed with the “fiscal cliff,” the world does not seem to care except to shake its head as it moves in a different direction. A direction that may not include the US and our historical role in shaping events in the Far East.
The Asians and BRIC countries (Brazil, Russia, India, and China) are currently making decisions that will set the US on its ear. The meeting in Phnom Penh is indicative of that reality. This reality includes whether or not the US dollar will remain the trading currency of the entire world — the reserve currency.
What Obama is discovering, and by extension the rest of us, is that the third world and emerging markets have decided the United States is no longer the major player in economic events. The reason for that: the US has such serious systemic problems and has made so many insanely bad economic decisions, the world looks at us like we are some psychotic drunk ranting about how we are Napoleon.
In fact, the US is offering less and less to the economic health of the globe. This is because of shortsighted behaviors of our political and economic movers and shakers of the last 40 years in particular. Many fine minds have been trying to warn us for a decade or more that we are on the wrong course. Our economic model, our fiscal and monetary path are in fact taking us over a cliff at this moment.
One of those who have warned us is David Goldman. Goldman is author of “How Civilizations Die.” He writes in Asia Time:
“It is hard to fathom just what President Obama had in mind when he arrived in Asia bearing a Trans-Pacific Partnership designed to keep China out. What does the United States have to offer Asians? It is borrowing $600 billion a year from the rest of the world to finance a $1.2 trillion government debt, most prominently from Japan (China has been a net seller of Treasury securities during the past year).
*It is a taker of capital rather than a provider of capital.
*It is a major import market but rapidly diminishing in relative importance as intra-Asian trade expands far more rapidly than trade with the United States.
*America’s strength as an innovator and incubator of entrepreneurs has diminished drastically since the 2008 crisis, no thanks to the Obama administration, which imposed a steep task on start-up businesses in the form of its healthcare program”
What does the US have to offer the world? Is it more financial toxic waste in bonds and derivatives? Our strength used to be our investment in technology and productive capacity, which is now almost non-existent. We no longer make “stuff.”
Where is the new technology and productive capacity? We seem to be big into creating a national security state with robotics and police state drones. However, less and less are we leading on things that make life better for humanity or make business more productive. Sadly, our brightest and best seem to be busy creating the next toxic financial product rather than the next outstanding widget or technological advancement. If apps and another iPhone is your idea of a great leap forward, I do not think the rest of the world would agree.
Add to this, the nearly total inability of the US government to stop spending money we don’t have – or to stop printing money to make up for what we no longer bring into the nation in revenue. In addition, we are sinking under monstrous public and private debt. Meantime, the dollar as reserve currency is slowly but surely being replaced by a basket of currencies, and perhaps gold and silver.
The left-leaning press does not really understand what is taking place. Failing to understand all things are not as they always were is indicative of that, the progressve publication Salon.com recently remarked about Obama’s effort to push TPP.
”This agreement is a core part of the “Asia pivot” that has occupied the activities of think tanks and policymakers in Washington but remained hidden by the tinsel and confetti of the election. But more than any other policy, the trends the TPP represents could restructure American foreign relations, and potentially the economy itself.”
What a bummer to discover the grand economic plan referred to as the Asian pivot is a dud. It would appear Asians need our markets less and less and increasingly they are getting out of the dollar looking for some replacement.
As The Bernanke prints money and monetizes the debt, the Asians smile and shake their heads and move on to the next economic level. A level I am convinced will have little to do with us.
Examples of why Asia, China, the regional powers like India, New Zealand, and China will need us less and less are reported in the Asian Times.
“China’s exports to Asia, meanwhile, have jumped 50% since their pre-crisis peak, while exports to the United States have risen by about 15%. At US $90 billion, Chinese exports to Asia are three times the country’s exports to the United States.”
Furthermore as David Goldman writes in the same article:
“Domestic consumption [China] as well as exports to Asia are both running nearly 20% ahead of last year’s levels, compensating for weakness in certain export markets and the construction sector. Exports to the moribund American economy are stagnant.”
Our End Game
For decades the US economy has been living on the capital and productive capacity of the past. The service sector economy does not translate well to sales in Asia or anywhere else. Meanwhile, as our productive capacity left for the third world, we bought cheap junk and China and Japan bought more than their fair share of our toxic waste called derivatives and Treasury bonds. The Federal Reserve is the biggest holder of that bilious brew, but sale of treasuries to China, Japan and Britain helped keep the US afloat. For Asians, that dog may no longer hunt.
On December 12th of this year, Helicopter Ben and Timmy Geithner will likely crank out another QE to infinity and the world leaves the room like a person leaves a psychotic drunk who is yelling about how important they are.
Asia and the BRIC’s understand all this and do not like it and are rejecting it. But the delusional US press, and this administration, most of congress and the American people, just can’t understand we are at the end of the line. The train has run out of steam and track. It is obvious from the response to Obama’s TPP effort… the United States might need to rethink it’s grand design for economic global empire.
Investor guru and economist Marc Faber says in his astute and sensible way that, to paraphrase, he has no more faith in US leadership, in the Federal Reserve, in the banks or Wall Street or government to do the correct thing. He does have a belief that emerging markets are going to carry the world into the future. The world that began with Anglo economic policies and efforts may be a thing of the past.
“In general, investors realize in the world that we are in a changing environment where emerging economies are becoming more important relative to the rest of the world. So we have to, from time to time, re-balance portfolios into emerging economies. Now I am not sure that I would necessarily buy the Indian market right here, but even if India only grows at 5% or 6%, it is still much better than no growth in Europe and hardly any growth in the United States.”- in ET Now.
Obama got a finger in his economic eye. The “Asia pivot” may be the dream of US policy makers but it is no dream in Asia. Obama’s election victory lap just took him past the graveyard. Taken down a peg by the Asian and Pacific Rim powers was a well deserved slap as US hubris and arrogance represented by President Obama and US economic policy elite. One hopes he would learn something from this… but I would not make book on it.