Newsgroup: it.cultura.antagonista
Titolo: Il punto sull'economia mondiale [LUNGO]

Lo so, è lungo, ma è uno strepitoso punto sull'economia mondiale e 
l'approssimarsi della guerra mondiale da parte di Liu, uno strepitoso 
analista cinese con base a New York
M.
Jun 16, 2005
The coming trade war and global depression
By Henry C K Liu
http://www.atimes.com/atimes/Global_Economy/GF16Dj01.html
Many historians have suggested that the 1929 stock market crash was not the 
cause of the Great Depression. If anything, the 1929 crash was the technical 
reflection of the inevitable fate of an overblown bubble economy. Yet stock 
market crashes can recover within a relatively short time with the help of 
effective government monetary measures, as demonstrated by the crashes of 
1987 (23% drop, recovered in nine months), 1998 (36% drop, recovered in 
three months) and 2002 (37% drop, recovered in two months).
There was no quick recovery after the 1929 crash. Structurally, what made 
the Great Depression last for more than a decade from 1929 until the US 
entry into World War II in 1941 were the 1930 Smoot-Hawley tariffs, which 
put world trade into a tailspin from which it did not recover until the war 
began. While the US economy finally recovered through war mobilization after 
the Japanese attack on Pearl Harbor, Hawaii, on December 7, 1941, most of 
the world's market economies sank deeper into war-torn distress and did not 
fully recover until the Korean War boom in 1951.
Barely five years into the 21st century, with a globalized neo-liberal trade 
regime firmly in place in a world where market economy has become the norm, 
trade protectionism appears to be fast re-emerging and developing into a new 
global trade war of complex dimensions. The irony is that this new trade war 
is being launched not by the poor economies that have been receiving the 
short end of the trade stick, but by the US, which has been winning more 
than it has been losing on all counts from globalized neo-liberal trade, 
with the European Union following suit in lockstep. Japan, of course, has 
never let up on protectionism and never taken competition policy seriously. 
The rich nations need to recognize that their efforts to squeeze every last 
drop of advantage out of already unfair trade will only plunge the world 
into deep depression. History has shown that while the poor suffer more in 
economic depressions, the rich, even as they are financially cushioned by 
their wealth, are hurt by political repercussions in the form of either war 
or revolution, or both.
Cold War and moral imperative
During the Cold War, there was no international free trade. The economies of 
the two contending ideology blocs were completely disconnected. Within each 
bloc, economies interacted through foreign aid and memorandum trade from 
their respective superpowers. The competition was not for profit but for the 
hearts and minds of the people in the two opposing blocs, as well as those 
in the non-aligned nations in the Third World. The competition between the 
two superpowers was to give rather than to take from their separate 
fraternal economies.
The population of the superpowers worked hard to help the poorer people 
within their separate blocs, and convergence toward equality was the policy 
aim even if not always the practice. The Cold War era of foreign aid and 
memorandum trade had a better record of poverty reduction in both camps than 
post-Cold War globalized neo-liberal trade dominated by one single 
superpower. The aim was not only to raise income and increase wealth, but 
also to close income and wealth disparity between and within economies. 
Today, income and wealth disparity is rationalized as a necessity for 
capital formation. The New York Times reports that from 1980 to 2002, the 
total income earned by the top 0.1% of earners in the United States more 
than doubled, while the share earned by everyone else in the top 10% rose 
far less and the share of the bottom 90% declined.
For all its ill effects, the Cold War achieved two formidable ends: it 
prevented nuclear war and it introduced development as a moral imperative 
into superpower geopolitical competition with rising economic equality 
within each bloc. In the years since the end of the Cold War, nuclear 
terrorism has emerged as a serious threat and domestic development is 
preempted by global trade, even in the rich economies, while income and 
wealth disparity has widened everywhere.
Since the end of the Cold War some 15 years ago, world economic growth has 
shifted to rely exclusively on globalized neo-liberal trade engineered and 
led by the US as the sole remaining superpower, financed with the US dollar 
as the main reserve currency for trade and anchored by the huge US consumer 
market made possible by the high wages of US workers. This growth has been 
sustained by knocking down national tariffs everywhere around the world 
through supranational institutions such as the World Trade Organization 
(WTO), and financed by a deregulated foreign-exchange market working in 
concert with a global central-banking regime independent of local political 
pressure, lorded over by the supranational Bank of International Settlement 
(BIS) and the International Monetary Fund (IMF).
Redefining humanist morality, the United States asserts that world trade is 
a moral imperative and as such trade promotes democracy, political freedom 
and respect for human rights in trade participating nations. Unfortunately, 
income and wealth equality is not among the benefits promoted by trade. Even 
if the validity of this twisted ideological assertion is not questioned, it 
clearly contradicts the US practice of trade embargo against countries 
Washington deems undemocratic, lacking in political freedom and deficient in 
respect for human rights. If trade promotes such desirable conditions, the 
practice of linking trade to freedom is tantamount to denying medicine to 
the sick.
US President George W Bush defends his free-trade agenda in moralistic 
terms. "Open trade is not just an economic opportunity, it is a moral 
imperative," he declared in a May 7, 2001, speech. "Trade creates jobs for 
the unemployed. When we negotiate for open markets, we're providing new hope 
for the world's poor. And when we promote open trade, we are promoting 
political freedom." Such claims remain highly controversial when tested by 
actual data.
Phyllis Schlafly, a syndicated conservative columnist, responded three weeks 
later in an article "Free trade is an economic issue, not a moral one". In 
it, she noted that while conservatives should be happy finally to have a 
president who added a moral dimension to his actions, "the Bible does not 
instruct us on free trade and it's not one of the Ten Commandments. Jesus 
did not tell us to follow Him along the road to free trade ... Nor is there 
anything in the US constitution that requires us to support free trade and 
to abhor protectionism. In fact, protectionism was the economic system 
believed in and practiced by the framers of our constitution. Protective 
tariffs were the principal source of revenue for our federal government from 
its beginning in 1789 until the passage of the 16th Amendment, which created 
the federal income tax, in 1913. Were all those public officials during 
those hundred-plus years remiss in not adhering to a "moral obligation" of 
free trade?" Hardly, argued Schlafly, whose views are noteworthy because US 
politics is currently enmeshed in a struggle between strict-constructionist 
paleo-conservatives and moral-imperialist neo-conservatives. Despite the 
ascendance of neo-imperialism in US foreign policy, protectionism remains 
strong in US political culture, particularly among conservatives and in the 
labor movement.
Bush also said China, which reached a trade agreement with the United States 
at the close of the administration of his predecessor Bill Clinton, and 
became a member of the WTO in late 2001, would benefit from political 
changes as a result of liberalized trade policies. This pronouncement gives 
clear evidence to those in China who see foreign trade as part of an 
anti-China "peaceful evolution" strategy first envisaged by John Forster 
Dulles, US secretary of state under president Dwight Eisenhower in the 
1950s. It is a strategy of inducing through peaceful trade the Chinese 
Communist Party (CCP) to reform itself out of power and to eliminate the 
dictatorship of the proletariat in favor of bourgeois liberalization. Almost 
four decades later, Deng Xiaoping criticized CCP chairman Hu Yaobang and 
premier Zhao Ziyang for having failed to contain bourgeois liberalization in 
their implementation of China's modernization policy. Deng warned in 
November 1989, five months after the Tiananmen incident: "The Western 
imperialist countries are staging a third world war without guns. They want 
to bring about the peaceful evolution of socialist countries towards 
capitalism." Deng's handling of the Tiananmen incident prevented China from 
going the catastrophic route of the USSR, which dissolved in 1991.
Hostility in the name of 'freedom'
Yet it is clear that political freedom is often the first casualty of a 
garrison-state mentality and such mentality inevitably results from hostile 
economic and security policy toward any country the US deems as not free. 
Whenever the US pronounces a nation to be not free, that nation will become 
less free as a result of US policy. This has been repeatedly evident in 
China and elsewhere in the Third World. Whenever US policy toward China 
turns hostile, as it currently appears to be heading, political and press 
freedoms inevitably face stricter curbs. For trade mutually and truly to 
benefit the trading economies, three conditions are necessary: 1) the 
de-linking of trade from ideological/political objectives, 2) maintenance of 
equality in the terms of trade and 3) recognition that global full 
employment at rising, living wages is the prerequisite for true comparative 
advantage in global trade.
The developing rupture between the sole superpower and its traditionally 
deferential allies lies in mounting trade conflicts. The United States has 
benefited from an international financial architecture that gives the US 
economy a structural monetary advantage over those of the EU and Japan, not 
to mention the rest of the world. Trade issues range from government-subsidy 
disputes between Airbus and Boeing to those regarding bananas, sugar, beef, 
oranges and steel, as well as disputes over fair competition associated with 
mergers and acquisition and financial services. If either government is 
found to be in breach of WTO rules when these disputes wind through long 
processes of judgment, the other will be authorized to retaliate. The US 
could put tariffs on other European goods if the WTO rules against Airbus 
and vice versa. So if both governments are found in breach, both could 
retaliate, leading to a cycle of offensive protectionism. When the US was 
ruled to have unfairly supported its steel industry, tariffs were slapped by 
the EU on Florida oranges to make a political point in a politically 
important state in US politics.
Trade competition between the EU and the US is spilling over into security 
areas, allowing economic interests to conflict with ideological sympathy. 
Both of these production engines, saddled with serious overcapacity, are 
desperately seeking new markets, which inevitably leads them to Asia in 
general and China in particular, with its phenomenal growth rate and its 1.2 
billion eager consumers bulging with rapidly rising disposable income. The 
growth of the Chinese economy will lift all other economies in Asia, 
including Australia, which has only recently begun to understand that its 
future cannot be separated from its geographic location and that its 
prosperity is interdependent with those of other Asia-Pacific economies. 
Australian iron ore and beef and dairy products are destined for China, not 
the British Isles. The EU is eager to lift its 15-year-old arms embargo on 
China, much to the displeasure of the US. Israel, with its close relations 
with the US, faces a similar dilemma on military sales to China.
Even the US defense establishment has largely come around to the view that 
the US arms industry must export, even to China, to remain on top. It was 
reported recently that US Defense Secretary Donald Rumsfeld tried to sell to 
Thailand F-16 warplanes capable of firing advanced medium-range air-to-air 
missiles two days after he lashed out in Singapore at China for upgrading 
its own military when no neighboring nations are threatening it (see 
Rumsfeld pitches in for F-16s, June 9). The sales pitch was in competition 
with Russian-made Sukhoi Su-30s and Swedish JAS-39s. The open competition in 
arms export had been spelled out for the US Congress years earlier by Donald 
Hicks, a leading Pentagon technologist in the administration of president 
Ronald Reagan. "Globalization is not a policy option, but a fact to which 
policymakers must adapt," he said. "The emerging reality is that all 
nations' militaries are sharing essentially the same global 
commercial-defense industrial base." The boots and uniforms worn by US 
soldiers in Afghanistan and Iraq were made in China.
The widening wealth gap
The WTO is the only global international organization dealing with the rules 
of trade among its 148 member nations. At its heart are the WTO agreements, 
known as the multilateral trading system, negotiated and signed by the 
majority of the world's trading nations and ratified in their parliaments. 
The stated goal is to help producers of goods and services, exporters and 
importers conduct their business, with the dubious assumption that trade 
automatically brings equal benefits to all participants. The welfare of the 
people is viewed only as a collateral aim based on the doctrinal fantasy 
that "balanced" trade inevitably brings prosperity equally to all, a claim 
that has been contradicted by facts produced by the very terms of trade 
promoted by the WTO itself.
Two decades of neo-liberal globalized trade have widened income and wealth 
disparity within and between nations. Free trade has turned out not to be 
the win-win game promised by neo-liberals. It is very much a win-lose game, 
with heads, the rich economies win, and tails, the poor economies lose. 
Domestic development has been marginalized as a hapless victim of foreign 
trade, dependent on trade surplus for capital. Foreign trade and foreign 
investment have become the prerequisite engines for domestic development. 
This trade model condemns those economies with trade deficits to perpetual 
underdevelopment. Because of dollar hegemony, all foreign investment goes 
only to the export sector where US dollars can be earned. Even the economies 
with trade surpluses cannot use their dollar trade earnings for domestic 
development, as they are forced to hold huge dollar reserves to support the 
exchange rate of their currencies.
In the fifth WTO ministerial conference held in Cancun, Mexico, in September 
2003, the richer countries rejected the demands of poorer nations for 
radical reform of agricultural subsidies that have decimated Third World 
agriculture. Failure to get the Doha Round back on track after the collapse 
of Cancun runs the danger of a global resurgence of protectionism, with the 
US leading the way. Larry Elliott reported on October 13, 2003, in The 
Guardian on the failed 2003 Cancun ministerial meeting: "The language of 
globalization is all about democracy, free trade and sharing the benefits of 
technological advance. The reality is about rule by elites, mercantilism and 
selfishness." Elliot noted that the process is full of paradoxes: why is it 
that in a world where human capital is supposed to be the new wealth of 
nations, labor is treated with such contempt?
Sam Mpasu, Malawi's commerce and industry minister, asked at Cancun for his 
comments about the benefits of trade liberalization, replied dryly: "We have 
opened our economy. That's why we are flat on our back." Mpasu's comments 
summarized the wide chasm that divides the perspectives of those who write 
the rules of globalization and those who are powerless to resist them.
Exports of manufactures by low-wage developing countries have increased 
rapidly over the past three decades due in part to falling tariffs and 
declining transport costs that enable outsourcing based on wage arbitrage. 
It grew from 25% in 1965 to nearly 75% over three decades, while 
agriculture's share of developing-country exports has fallen from 50% to 
less than 10%. Many developing countries have gained relatively little from 
increased manufactures trade, with most of the profit going to foreign 
capital. Market access for their most competitive manufactured export, such 
as textiles and apparel, remains highly restricted, and recent trade 
disputes threaten further restrictions. Still, the key cause of unemployment 
in all developing economies is the trade-related collapse of agriculture, 
exacerbated by the massive government subsidies provided to farmers in rich 
economies. Many poor economies are predominantly agriculturally based and a 
collapse of agriculture means a general collapse of the whole economy.
The Doha Development Agenda negotiations, sponsored by the WTO, collapsed in 
Cancun over the question of government support for agriculture in rich 
economies and its potential impacts on causing more poverty in developing 
countries. Negotiations since Cancun have focused on the need to understand 
better the linkages between trade policies, particularly those of the rich 
economies, and poverty in the developing world. While poverty reduction is 
now more widely accepted by establishment economists as a necessary central 
focus for development efforts and has become the main mission of the World 
Bank and other development institutions, very few effective measures have 
been forthcoming.
The UN Millennium Development Goals (UNMDG) commit the international 
community to halving world poverty by 2015, a decade from now. With current 
trends, that goal is likely to be achievable only through the death of half 
of the poor by starvation, disease and local conflicts. The UN Development 
Program warns that 3 million children will die in sub-Saharan Africa alone 
by 2015 if the world continues on its current path of failing to meet the 
UNMDG agreed to in 2000. Several key avenues to this goal supposedly lie in 
international trade, but the record of poverty reduction has been 
exceedingly poor, if not outright negative. The fundamental question whether 
trade can replace or even augment socio-economic development remains 
unasked, let alone answered. Until such issues are earnestly addressed, 
protectionism will re-emerge in the poor countries. Under such conditions, 
if democracy expresses the will of the people, democracy will demand 
protectionism more than government by elite.
While tariffs in the past decade have been coming down like leaves in 
autumn, flexible exchange rates have become a form of virtual countervailing 
tariff. In the current globalized neo-liberal trade regime operating in a 
deregulated global foreign-exchange market, the exchanged value of a 
currency is regularly used to balance trade through government intervention 
in currency-market fluctuations against the world's main reserve currency - 
the US dollar, as the head of the international monetary snake.
Purchasing power parity (PPP) measures the disconnection between exchange 
rates and local prices. PPP contrasts with the interest rate parity (IRP) 
theory, which assumes that the actions of investors, whose transactions are 
recorded on the capital account, induce changes in the exchange rate. For a 
dollar investor to earn the same interest rate in a foreign economy with a 
PPP of four times, such as the purchasing power parity between the US dollar 
and the Chinese yuan, local wages would have to be at least four times (75%) 
lower than US wages. PPP theory is based on an extension and variation of 
the "law of one price" as applied to the aggregate economy.
The law of one price says that identical goods should sell for the same 
price in two separate markets when there are no transportation costs and no 
differential taxes applied in the two markets. But the law of one price does 
not apply to the price of labor. Price arbitrage is the opposite of wage 
arbitrage in that producers seek to make their goods in the lowest wage 
locations and to sell their goods in the highest price markets. This is the 
incentive for outsourcing, which never seeks to sell products locally at 
prices that reflect PPP differentials. What is not generally noticed is that 
price deflation in an economy increases its PPP, in that the same local 
currency buys more. But the cross-border one-price phenomenon applies only 
to certain products, such as oil, thus for a PPP of four times, a rise in 
oil prices will cost the Chinese economy four times the equivalent in other 
goods, or wages, than in the US. The larger the purchasing power parity 
between a local currency and the dollar, the more severe is the tyranny of 
dollar hegemony on forcing down wage differentials.
The origins and effects of dollar hegemony
Ever since 1971, when US president Richard Nixon, under pressure from 
persistent fiscal and trade deficits that drained US gold reserves, took the 
dollar off the gold standard (at US$35 per ounce), the dollar has been a 
fiat currency of a country of little fiscal or monetary discipline. The 
Bretton Woods Conference at the end of World War II established the dollar, 
a solid currency backed by gold, as a benchmark currency for financing 
international trade, with all other currencies pegged to it at fixed rates 
that changed only infrequently. The fixed-exchange-rate regime was designed 
to keep trading nations honest and prevent them from running perpetual trade 
deficits. It was not expected to dictate the living standards of trading 
economies, which were measured by many other factors besides exchange rates. 
Bretton Woods was conceived when conventional wisdom in international 
economics did not consider cross-border flow of funds necessary or desirable 
for financing world trade, precisely for this reason. Since 1971, the dollar 
has changed from a gold-backed currency to a global reserve monetary 
instrument that the US, and only the US, can produce by fiat. At the same 
time, the US has continued to incur both current-account and fiscal 
deficits.
That was the beginning of dollar hegemony. With deregulation of 
foreign-exchange and financial markets, many currencies began to free-float 
against the dollar, not in response to market forces but to maintain export 
competitiveness. Government interventions in foreign-exchange markets became 
a regular last-resort option for many trading economies for preserving their 
export competitiveness and for resisting the effect of dollar hegemony on 
domestic living standards.
World trade under dollar hegemony is a game in which the US produces paper 
dollars and the rest of the world produces real things that paper dollars 
can buy. The world's interlinked economies no longer trade to capture 
comparative advantage; they compete in exports to capture needed dollars to 
service dollar-denominated foreign debts and to accumulate dollar reserves 
to sustain the exchange value of their domestic currencies in 
foreign-exchange markets. To prevent speculative and manipulative attacks on 
their currencies in deregulated markets, the world's central banks must 
acquire and hold dollar reserves in corresponding amounts to market pressure 
on their currencies in circulation. The higher the market pressure to 
devalue a particular currency, the more dollar reserves its central bank 
must hold. This creates a built-in support for a strong dollar that in turn 
forces all central banks to acquire and hold more dollar reserves, making it 
stronger. This anomalous phenomenon is known as dollar hegemony, which is 
created by the geopolitically constructed peculiarity that critical 
commodities, most notably oil, are denominated in dollars. Everyone accepts 
dollars because dollars can buy oil. The denomination of oil in dollars and 
the recycling of petro-dollars is the price the US has extracted from 
oil-producing countries for US tolerance of the oil-exporting cartel since 
1973.
By definition, dollar reserves must be invested in dollar-denominated 
assets, creating a capital-accounts surplus for the US economy. A 
strong-dollar policy is in the US national interest because it keeps US 
inflation low through low-cost imports and it makes US assets denominated in 
dollars expensive for foreign investors. This arrangement, which Federal 
Reserve Board chairman Alan Greenspan proudly calls US financial hegemony in 
congressional testimony, has kept the US economy booming in the face of 
recurrent financial crises in the rest of the world. It has distorted 
globalization into a "race to the bottom" process of exploiting the lowest 
labor costs and the highest environmental abuse worldwide to produce items 
and produce for export to US markets in a quest for the almighty dollar, 
which has not been backed by gold since 1971, nor by economic fundamentals 
for more than a decade. The adverse effects of this type of globalization on 
the developing economies are obvious. It robs them of the meager fruits of 
their exports and keeps their domestic economies starved for capital, as all 
surplus dollars must be reinvested in US treasuries to prevent the collapse 
of their own domestic currencies.
The adverse effect of this type of globalization on the US economy is also 
becoming clear. In order to act as consumer of last resort for the whole 
world, the US economy has been pushed into a debt bubble that thrives on 
conspicuous consumption and fraudulent accounting. The unsustainable and 
irrational rise of US equity and real-estate prices, unsupported by revenue 
or profit, has meant a de facto devaluation of the dollar. Ironically, the 
recent fall in US equity prices from their 2004 peak and the anticipated 
fall in real-estate prices reflect a trend to an even stronger dollar, as 
the same amount of dollars can buy more deflated shares and properties. The 
rise in the purchasing power of the dollar inside the United States impacts 
its purchasing-power disparity with other currencies unevenly, causing sharp 
price instability in the economies with freely exchangeable currencies and 
fixed exchange rates, such as Hong Kong and until recently Argentina. For 
the US, a falling exchange rate of the dollar actually causes asset prices 
to rise. Thus with a debt bubble in the US economy, a strong dollar is not 
in the US national interest. Debt has turned US policy on the dollar on its 
head.
The setting of exchange values of currencies is practiced not only by 
sovereign governments on their own currencies as a sovereign right. The US, 
exploiting dollar hegemony, usurps the privilege of dictating the exchange 
value of all foreign currencies to support its own economic nationalism in 
the name of global free trade. And the US position on exchange rates has not 
been consistent. When the dollar was rising, as it did in the 1980s, the US, 
to protect its export trade, hailed the stabilizing wisdom of fixed exchange 
rates. When the dollar falls as it has been in recent years, the US, to 
deflect blame for its trade deficit, attacks fixed exchange rates as 
currency manipulation, as it now targets China's currency, which has been 
pegged to the dollar for more than a decade. How can a nation manipulate the 
exchange value of its currency when it is pegged to the dollar at the same 
rate over long periods? Any manipulation came from the dollar, not the yuan.
Economic nationalism
The recent rise of the euro against the dollar, the first appreciation wave 
since its introduction on January 1, 2002, is the result of an EU version of 
the 1985 Plaza Accord on the Japanese yen, albeit without a formal accord. 
The strategic purpose is more than merely moderating the US trade deficit. 
The record shows that even with a 30% drop of the dollar against the euro, 
the US trade deficit continued to climb. The strategic purpose of driving up 
the euro is to reduce it to the status of the yen, as a subordinated 
currency to dollar hegemony. The real effect of the Plaza Accord was to 
shift the cost of support for the dollar-denominated US trade deficit, and 
the socio-economic pain associated with that support, from the United States 
to Japan. What is happening to the euro now is far from being the beginning 
of the demise of the dollar. Rather, it is the beginning of the reduction of 
the euro into a subservient currency to the dollar to support the US debt 
bubble.
Six and a half years since the launch of the European Monetary Union, the 
eurozone is trapped in an environment in which monetary policy of sound 
money has in effect become destructive and supply-side fiscal policy 
unsustainable. National economies are beginning to refuse to bear the pain 
needed for adjustment to globalization or the EU's ambitious enlargement. 
The European nations are beginning to resist the US strategy to make the 
euro economy a captive supporter of a rising or falling dollar as such 
movements fit the shifting needs of US economic nationalism.
It is the modern-day monetary equivalent of the brilliant Roman strategy of 
making a dissident Jew a Christian god to preempt Judaism's rising cultural 
domination over Roman civilization. Roman law, the foundation of the Roman 
Empire, gained in sophistication from being influenced by, if not directly 
derived from, Jewish Talmudic law, particularly on the concept of equity - 
an eye for an eye. The Jews had devised a legal system based on the dignity 
of the individual and equality before the law four centuries before Christ. 
There was no written Roman law until two centuries before Christ. The Roman 
law of obligatio was not conducive to finance as it held that all 
indebtedness was personal, without institutional status. A creditor could 
not sell a note of indebtedness to another party and a debtor did not have 
to pay anyone except the original creditor. Talmudic law, on the other hand, 
recognized impersonal credit, and a debt had to be paid to whoever presented 
the demand note. This was a key development of modern finance. With the 
Talmud, the Jews under the Diaspora had an international law that spanned 
three continents and many cultures.
The Romans were faced with a dilemma. Secular Jewish ideas and values were 
permeating Roman society, but Judaism was an exclusive religion that the 
Romans were not permitted to join. The Romans could not assimilate the Jews 
as they did the Greeks. Early Christianity also kept its exclusionary trait 
until Paul, who opened Christianity to all. Historian Edward Gibbon 
(1737-94) noted that Rome recognized the Jews as a nation who as such were 
entitled to religious peculiarities. The Christians, on the other hand, were 
a sect and, being without a nation, subverted other nations. The Roman Jews 
were active in government and, when not resisting Rome against social 
injustice, fought side by side with Roman legionnaires to preserve the 
empire. Roman Jews were good Roman citizens. By contrast, the early 
Christians were social dropouts, refused responsibility in government and 
civic affairs and were conscientious objectors and pacifists in a militant 
culture. Gibbon noted that Rome felt that the crime of a Christian was not 
in what he did, but in being who he was.
Christianity gained control of Roman culture and society long before 
Constantine, who in AD 324 sanctioned it with political legitimacy and power 
after recognizing its power in helping to win wars against pagans, as pope 
Urban II in 1095 used the Crusade to prolong papal temporal power. When 
early Christianity, a secular Jewish dissident sect, began to move up from 
the lower strata of Roman society and began to find converts in the upper 
echelons, the Roman polity adopted Christianity, the least objectionable of 
all Jewish sects, as a state religion. Gibbon estimated that Christians 
killed more of their own members over religious disputes in the three 
centuries after coming to secular power than did the Romans in three 
previous centuries. Persecution of the Jews began in Christianized Rome. The 
disdain held by early Christianity for centralized government gave rise to 
monasticism and contributed to the fall of the Roman Empire.
By allowing a trade surplus denominated in dollars to be accumulated by 
non-dollar economies such as the yen, euro, or now the Chinese yuan, the 
cost of supporting the appropriate value of the US dollar to sustain 
perpetual economic growth in the dollar economy is then shifted to these 
non-dollar economies, which manifest themselves in perpetual relative low 
wages and weak domestic consumption. For the already high-wage EU and Japan, 
the penalty is the reduction of social-welfare benefits and job security 
traditional to these economies. China, now the world's second-largest 
creditor nation, it is reduced to having to ask the US, the world's largest 
debtor nation, for capital denominated in dollars the US can print at will 
to finance its export trade to a US running recurring trade deficits.
Market impotence against trade imbalance
The IMF, which has been ferocious in imposing draconian fiscal and monetary 
"conditionalities" on all debtor nations everywhere in the decade after the 
Cold War, is nowhere to be seen on the scene in the world's most fragrantly 
irresponsible debtor nation. This is because the US can print dollars at 
will and with immunity. The dollar is a fiat currency not backed by gold, 
not backed by US productivity, not backed by US export prowess, but backed 
by US military power. The US military budget request for Fiscal Year 2005 is 
$420.7 billion. For Fiscal Year 2004, it was $399.1 billion; for 2003, 
$396.1 billion; for 2002, $343.2 billion; and for 2001, $310 billion. In the 
first term of George W Bush's presidency, the US spent $1.5 trillion on its 
military. That is more than the entire gross domestic product of China in 
2004. The US trade deficit is about 6% of its GDP, while it military budget 
is about 4%. In other words, the trading partners of the US are paying for 
one and a half times the cost of a military that can some day be used 
against any one of them for any number of reasons, including trade disputes. 
The anti-dollar crowd has nothing to celebrate about the recurring US trade 
deficit.
It is pathetic that Rumsfeld tries to persuade the world that China's 
military budget, which is less that one-tenth of that of the United States, 
is a threat to Asia, even when he is forced to acknowledge that Chinese 
military modernization is mostly focused on defending its coastal 
territories, not on force projection for distant conflicts, as is US 
military doctrine. While Rumsfeld urges more political freedom in China, his 
militant posture toward China is directly counterproductive toward that 
goal. Ironically, Rumsfeld chose to make his case about political freedom in 
Singapore, the bastion of Confucian authoritarianism.
Normally, according to free-trade theory, trade can only stay unbalanced 
temporarily before equilibrium is re-established or free trade would simply 
stop. When bilateral trade is temporarily unbalanced, it is generally 
because one trade partner has become temporarily uncompetitive, inefficient 
or unproductive. The partner with the trade deficit receives more goods and 
services from the partner with the trade surplus than it can offer in return 
and thus pays the difference with its currency that someday can buy foods 
produced by the deficit trade partner to re-established balance of payments. 
This temporary trade imbalance can be due to a number of socio-economic 
factors, such as terms of trade, wage levels, return on investment, 
regulatory regimes, shortages in labor or material or energy, 
trade-supporting infrastructure adequacy, purchasing power disparity, etc. A 
trading partner that runs a recurring trade deficit earns the reputation of 
being what banks call a habitual borrower, ie, a bad credit risk, one that 
habitually lives beyond its means. If the trade deficit is paid with its 
currency, a downward pressure results in the exchange rate. A flexible 
exchange rate seeks to remove or moderate a temporary trade imbalance while 
the productivity disparities between trading partners are being addressed 
fundamentally.
Dollar hegemony prevents US trade imbalance from returning to equilibrium 
through market forces. It allows a US trade deficit to persist based on 
monetary prowess. This translates over time into a falling exchange rate for 
the dollar even as dollar hegemony keeps the fall at a slow pace. But a 
below-par exchange rate over a long period can run the risk of turning the 
temporary imbalance in productivity into a permanent one. A continuously 
weakening currency condemns the issuing economy into a downward economic 
spiral. This has happened to the United States in the past decade. To make 
matters worse, with globalization of deregulated markets, the recurring US 
trade deficit is accompanied by an escalating loss of jobs in sectors 
sensitive to cross-border wage arbitrage, with the job-loss escalation 
climbing up the skill ladder. Discriminatory US immigration policies also 
prevent the retention of low-paying jobs within the US and exacerbate the 
illegal-immigration problem.
Regional wage arbitrage within the US in past decades kept its economy lean 
and productive internationally. Labor-intensive US industries relocated to 
the low-wage south of the country through regional wage arbitrage, and 
despite temporary adjustment pains from the loss of textile mills, the 
northern economies managed to upgrade their productivity, technology level, 
financial sophistication and output quality. The economies in the southern 
US also managed to upgrade these factors of production and in time managed 
to narrow the wage disparity within the national economy. This happened 
because the jobs stayed within the nation. With globalization, it is another 
story. Jobs are leaving the United States mercilessly. According to 
free-trade theory, the US trade deficit is supposed to cause the dollar to 
fall temporarily against the currencies of its trading partners, causing 
export competitiveness to rebalance, thereby removing or reducing the US 
trade deficit. Jobs that have been lost temporarily are then supposed to 
return to the US.
But the persistent US trade deficit defies trade theory because of dollar 
hegemony. The broad trade-weighted dollar index stays in an upward trend, 
despite selective appreciation of some strong currencies, as highly indebted 
emerging market economies attempt to extricate themselves from 
dollar-denominated debt through the devaluation of their currencies. While 
the aim is to subsidize exports, this ironically makes dollar debts more 
expensive in local-currency terms. The moderating impact on US price 
inflation also amplifies the upward trend of the trade-weighted dollar index 
despite persistent US expansion of monetary aggregates, also known as 
monetary easing or money printing.
Adjusting for this debt-driven increase in the exchange value of dollars, 
the import volume into the US can be estimated in relationship to expanding 
monetary aggregates. The annual growth of the volume of goods shipped to the 
United States has remained around 15% for most of the 1990s, more than five 
times the average annual GDP growth. The US enjoyed a booming economy when 
the dollar was gaining ground, and this occurred at a time when interest 
rates in the US were higher than those in its creditor nations. This led to 
the odd effect that raising interest rates actually prolonged the boom in 
the US rather than threatened it, because it caused massive inflows of 
liquidity into the US financial system, lowered import-price inflation, 
increased apparent productivity and prompted further spending by American 
consumers enriched by the wealth effect despite a slowing of wage increases. 
Returns on dollar assets stayed high in foreign-currency terms.
This was precisely what Greenspan did in the 1990s in the name of preemptive 
measures against inflation. Dollar hegemony enabled the US to print money to 
fight inflation, causing a debt bubble of asset appreciation. These data 
substantiated the view of the US as Rome in a New Roman Empire with an 
unending stream of imports as the free tribute from conquered lands. This 
was what Greenspan meant by US "financial hegemony".
The Fed Funds Rate (FFR)target has been lifted eight times in steps of 25 
basis points from 1% in mid-2004 to 3% on May 3, 2005. If the same pattern 
of "measured pace" continues, the FFR target would be at 4.25% by the end of 
2005. Despite Fed rhetoric, the lifting of dollar interest rates has more to 
do with preventing foreign central banks from selling dollar-denominated 
assets, such as US Treasuries, than with fighting inflation. In a 
debt-driven economy, high interest rates are themselves inflationary. 
Raising interest rates to fight inflation could become the monetary dog 
chasing its own interest-rate tail, with rising rates adding to rising 
inflation, which then requires more interest-rate hikes. Still, 
interest-rate policy is a double edged sword: it keeps funds from leaving 
the debt bubble, but it can also puncture the debt bubble by making the 
servicing of debt prohibitively expensive.
To prevent this last adverse effect, the Fed adds to the money supply, 
creating an unnatural condition of abundant liquidity with rising short-term 
interest rates, resulting in a narrowing of interest spread between 
short-term and long-term debts, a leading indication for inevitable 
recession down the road. The problem of adding to the money supply is what 
John Maynard Keynes called the liquidity trap, that is, an absolute 
preference for liquidity even at near-zero interest-rate levels. Keynes 
argued that either a liquidity trap or interest-insensitive investment draft 
could render monetary expansion ineffective in a recession. It is what is 
popularly called pushing on a credit string, where ample money cannot find 
creditworthy willing borrowers. Much of the new low-cost money tends to go 
to refinancing existing debt taken out at previously higher interest rates. 
Rising short-term interest rates, particularly at a measured pace, would not 
remove the liquidity trap while long-term rates stay flat because of excess 
liquidity.
The debt bubble in the US is clearly having problems, as evident in the bond 
market. With just 14 deals worth $2.9 billion, May 2005 was the slowest 
month for high-yield bond issuance since October 2002. The late-April 
downgrades of the debt of General Motors and Ford Motor to junk status 
roiled the bond markets. The number of high-yield, or junk-bond, deals fell 
55% in the March-to-May 2005 period compared with the same three months in 
2004. They were also down 45% from the December-through-February period. In 
dollar value, junk-bond deals totaled $17.6 billion in the March-to-May 2005 
period, compared with $39.5 billion during the same three months in 2004 and 
$36 billion from December 2004 through February 2005. There were 407 deals 
of investment-grade bond underwriting during the March-to-May 2005 period, 
compared with 522 in the same period 2004 - a decline of 22%. In dollar 
volume, some $153.9 billion of high-grade bonds were underwritten from March 
to May 2005, compared with $165.5 billion in the same period in 2004 - a 7% 
decline.
Oil at $50 a barrel, along with astronomical asset-price appreciation, 
particularly in real estate, is giving the debt bubble additional borrowed 
time. But this game cannot go on forever and the end will likely be 
triggered by a new trade war's effect on reduced trade volume. The price of 
a reduced US trade deficit is the bursting of the US debt bubble, which 
could plunge the world economy into a new depression. Given such options, 
the United States has no choice but to ride the trade-deficit train for as 
long as the traffic will bear, which may not be too long, particularly if 
protectionism begins to gather force.
The transition to offshore outsourced production has been the source of the 
productivity boom of the "New Economy" in the US in the past decade. The 
productivity increase not attributable to the importing of other nations' 
productivity is much less impressive. While published government figures of 
the productivity index show a rise of nearly 70% since 1974, the actual rise 
is between zero and 10% in many sectors if the effect of imports is removed 
from the equation. The lower productivity values are consistent with the 
real-life experience of members of the blue-collar working class and the 
white-collar middle class who have been spending the equity cash-outs from 
the appreciated market value of their homes. World trade has become a 
network of cross-border arbitrage on differentials in labor availability, 
wages, interest rates, exchange rates, prices, saving rates, productive 
capacities, liquidity conditions and debt levels. In some of these areas, 
the US is becoming an underdeveloped economy.
The Bush administration continues to assure the US public that the state of 
the economy is sound while in reality the country has been losing entire 
sectors of its economy, such as manufacturing and information technology, to 
foreign producers, while at the same time selling off part of the nation to 
finance its rising and unending trade deficit. Usually, when unjustified 
confidence crosses over to fantasized hubris on the part of policymakers, 
disaster is not far ahead.
The Clinton legacy
To be fair, the problems of the US economy started before the administration 
of George W Bush. The Clinton administration's annual economic report for 
2000 claimed that the longest economic expansion in US history could 
continue "indefinitely" as long as "we stick to sound policy", according to 
chairman Martin Baily of the Council of Economic Advisers (CEA) as reported 
in the Wall Street Journal. A New York Times report differed somewhat by 
quoting Baily as saying: "stick to fiscal policy." Putting the two newspaper 
reports together, one got the sense that the Clinton administration thought 
its fiscal policy was the sound policy needed to put an end to the business 
cycle. Economics high priests in government, unlike the rest of us mortals 
who are unfortunate enough to have to float in the daily turbulence of the 
market, can afford to focus aloofly on long-term trends and their structural 
congruence to macro-economic theories. Yet outside of macro-economics, 
"long-term" is increasingly being redefined in the real world. In the 
technology and communication sectors, "long-term" evokes periods lasting 
less than five years. For hedge funds and quant shops, long-term can mean a 
matter of weeks.
Two factors were identified by the Clinton CEA Year 2000 economic report as 
contributing to the "good" news - technology-driven productivity and 
neo-liberal trade globalization. Even with somewhat slower productivity and 
spending growth, the CEA believed the economy could continue to expand 
perpetually. As for the huge and growing trade deficit, the CEA expected 
global recovery to boost demand for US exports, not withstanding the fact 
that most US exports are increasingly composed of imported parts.
Yet the United States has long officially pursued a strong-dollar policy 
that weakens world demand for US exports. The high expectation on e-commerce 
was a big part of optimism, which had yet to be substantiated by data. In 
2000, the CEA expected the business to business (B2B) portion of e-commerce 
to rise to $1.3 trillion by 2003 from $43 billion in 1998. Goldman Sachs 
claimed in 1999 that B2B e-commerce would reach $1.5 trillion by 2004, twice 
the size of the combined 1998 revenues of the US auto industry and the US 
telecom sector. Others were more cautious. Jupiter Research projected that 
companies around the globe would increase their spending on B2B 
e-marketplaces from US$2.6 billion in 2000 to only $137.2 billion by 2005 
and spending in North America alone would grow from $2.1 billion to only 
$80.9 billion. North American companies accounted for 81% of the total 
spending in 1998, but by 2005, that figure was expected to drop to 60% of 
the total. The fact of the matter is that Asia and Europe are now faster 
growth markets for communication and technology.
Reality proved disappointing. A 2004 UN Conference on Trade and Development 
(UNCTAD) report said that in the United States, e-commerce between 
enterprises, which in 2002 represented almost 93% of all e-commerce, 
accounted for 16.28% of all commercial transactions between enterprises. 
While overall transactions between enterprises (e-commerce and non 
e-commerce) fell in 2002, e-commerce B2B grew at an annual rate of 6.1%. As 
for business-to-consumer (B2C) e-commerce, UNCTAD reported that sales in the 
first quarter of 2004 amounted to 1.9% of total retail sales, a proportion 
nearly twice as large as that recorded in 2001. The annual rate of growth of 
retail e-commerce in the US in the year to the end of the first quarter of 
2004 was 28.1%, while the growth of total retail in the same period was only 
8.8%. Dow Jones reported on May 20, 2005, that first-quarter retail 
e-commerce sales in the US rose 23.8% compared with the year-ago period to 
$19.8 billion from $16 billion, according to preliminary numbers released by 
the Department of Commerce. E-commerce sales during the first quarter rose 
6.4% from the fourth quarter, when they were $18.6 billion. Sales for all 
periods are on an adjusted basis, meaning the Commerce Department adjusts 
them for seasonal variations and holiday and trading-day differences but not 
for price changes.
E-commerce sales accounted for 2.2% of total retail sales in the first 
quarter of 2005, when those sales were an estimated $916.9 billion, 
according to the Commerce Department. Wal-Mart, the low-priced retailer that 
imports outsourced goods from overseas, grew only 2%, indicating spending 
fatigue on the part of low-income US consumers, while Target Stores, the 
upscale retailer that also imports outsourced goods, continued to grow at 
7%, indicating the effects of rising income disparity.
The CEA 2000 report did not address the question of whether e-commerce was 
merely a shift of commerce or a real growth. The possibility exists for the 
new technology to generate negative growth. It happened to IBM - the 
increased efficiency (lower unit cost of calculation power) of IBM big 
frames actually reduced overall IBM sales, and most of the profit and growth 
in personal computers went to Microsoft, the software company that grew on 
business that IBM, a self-professed hardware manufacturer, did not consider 
worthy of keeping for itself. The same thing happened to Intel, where in 
1965 company co-founder Gordon Moore observed an exponential growth in the 
number of transistors per integrated circuit and predicted that this trend 
would continue the doubling of transistors every couple of years. But what 
this so-called Moore's Law did not predict was that this growth of computing 
power per dollar would cut into company profitability. As the market price 
of computer power continues to fall, the cost to producers to achieve 
Moore's Law has followed the opposite trend: research and development, 
manufacturing, and test costs have increased steadily with each new 
generation of chips. As the fixed cost of semiconductor production continues 
to increase, manufacturers must sell larger and larger quantities of chips 
to remain profitable. In recent years, analysts have observed a decline in 
the number of "design starts" at advanced process nodes. While these 
observations were made in the period after the year 2000 economic downturn, 
the decline may be evidence that the long-term global market cannot 
economically sustain Moore's Law. Is the Google bubble a replay of the AOL 
fiasco?
Joseph Alois Schumepter's creative destruction theory, while revitalizing 
the macro-economy with technological obsolescence in the long run, leaves 
real corporate bodies in its path, not just obsolete theoretical concepts. 
Financial intermediaries and stock exchanges face challenges from electronic 
communication networks (ECNs), which may well turn the likes of the New York 
Stock Exchange (NYSE) into sunset industries. ECNs are electronic 
marketplaces that bring buy/sell orders together and match them in virtual 
space. Today, ECNs handle roughly 25% of the volume in Nasdaq stocks. The 
NYSE and the Archipelago Exchange (ArcaEx) announced on April 20 that they 
had entered a definitive merger agreement that will lead to a combined 
entity, NYSE Group Inc, becoming a publicly held company. If approved by 
regulators, NYSE members and Archipelago shareholders, the merger will 
represent the largest-ever among securities exchanges and combine the 
world's leading equities market with the most successful totally open, fully 
electronic exchange. Through Archipelago, the NYSE will compete for the 
first time in the trading of Nasdaq -listed stocks; it will be able to 
indirectly capture listings business that otherwise would not qualify to 
list on the NYSE. Archipelago lists stocks of companies that do not meet the 
NYSE's listing standards.
On fiscal policy, US government spending, including social programs and 
defense, declined as a share of the economy during the eight years of the 
Clinton watch. This in no small way contributed to a polarization of both 
income and wealth, with visible distortions in both the demand and supply 
sides of the economy. This was the opposite of the Roosevelt 
administration's record of increasing income and wealth equality by policy. 
The wealth effect tied to bloated equity and real-estate markets could 
reverse suddenly and did in 2000, bailed out only by the Bush tax cut and 
the deficit spending on the "war on terrorism" after 2001. Private debt kept 
hitting all-time highs throughout the 1990s and was celebrated by 
neo-liberal economists as a positive factor. Household spending was heavily 
based on expected rising future earnings or paper profits, both of which 
might and did vanish on short notice. By election time in November 1999, the 
Clinton economic miracle was fizzling. The business cycle had not ended 
after all, and certainly not by self-aggrandizing government policies. It 
merely got postponed for a more severe crash later. The idea of ending the 
business cycle in a market economy was as much a fantasy as the assertion by 
the current vice president, Richard Cheney, in a speech before the Veterans 
of Foreign Wars in August 26, 2002, that "the Middle East expert Professor 
Fouad Ajami predicts that after liberation, the streets in Basra and Baghdad 
are sure to erupt in joy ..."
In their 1991 populist campaign for the White House, Bill Clinton and Al 
Gore repeatedly pointed out the obscenity of the top 1% of Americans owning 
40% of the country's wealth. They also said that if you eliminated home 
ownership and only counted businesses, factories and offices, then the top 
1% owned 90% of all commercial wealth. And the top 10%, they said, owned 
99%. It was a situation they pledged to change if elected. But once in 
office, president Clinton and vice president Gore did nothing to 
redistribute wealth more equally - despite the fact that their two terms in 
office spanned the economic joyride of the 1990s that would eventually hurt 
the poor much more severely than the rich. On the contrary, economic 
inequality only continued to grow under the Democrats. Reagan spread the 
national debt equally among the people while Clinton gave all the wealth to 
the rich.
Rising resistance to globalization
Geopolitically, trade globalization was beginning to face complex resistance 
worldwide by the second term of the Clinton presidency. The momentum of 
resistance after Clinton would either slow further globalization or force 
the terms of trade to be revised. The Asian financial crises of 1997 revived 
economic nationalism around the world against US-led neo-liberal 
globalization, while the North Atlantic Treaty Organization (NATO) attack on 
Yugoslavia in 1999 revived militarism in the EU. Market fundamentalism as 
espoused by the United States, far from being a valid science universally, 
was increasingly viewed by the rest of the world as merely US national 
ideology, unsupported even by US historical conditions. Just as 
anti-Napoleonic internationalism was in essence anti-French, 
anti-globalization and anti-moral-imperialism are in essence anti-US. US 
unilateralism and exceptionalism became the midwife for a new revival of 
political and economic nationalism everywhere. The Bush Doctrine of 
monopolistic nuclear posture, preemptive wars, "either with us or against 
us" extremism, and no compromise with states that allegedly support 
terrorism pours gasoline on the smoldering fire of defensive nationalism 
everywhere.
Alan Greenspan in his October 29, 1997, congressional testimony on 
"Turbulence in World Financial Markets" before the Joint Economic Committee 
said that "it is quite conceivable that a few years hence we will look back 
at this episode [Asian financial crisis of 1997] ... as a salutary event in 
terms of its implications for the macro-economy". When one is focused only 
on the big picture, details do not make much of a difference: the Earth 
always appears more or less round from space, despite that some people on it 
spend their whole lives starving and cities get destroyed by war or natural 
disasters. That is the problem with macro-economics. As Greenspan spoke, 
many around the world were waking up to the realization that the turbulence 
in their own financial markets was viewed by the US central banker as having 
a "salutary effect" on the US macro-economy. Greenspan gave anti-US 
sentiments and monetary trade protectionism held by participants in these 
financial markets a solid basis and they were no longer accused of being 
mere paranoia.
Ironically, after the end of the Cold War, market capitalism has emerged as 
the most fervent force for revolutionary change. Finance capitalism became 
inherently democratic once the bulk of capital began to come from the 
pension assets of workers, despite widening income and wealth disparity. The 
monetary value of US pension funds is more than $15 trillion, the bulk of 
which belongs to average workers. A new form of social capitalism emerged 
that would gladly eliminate the worker's job in order to give him or her a 
higher return on his or her pension account. The capitalist in the 
individual is exploiting the worker in the same individual. A conflict of 
interest arises between a worker's savings and his or her earnings. As Pogo 
used to say: "The enemy: they are us." This social capitalism, by favoring 
return on capital over compensation for labor, produces overinvestment, 
resulting in overcapacity. But the problem of overcapacity can only be 
solved by high-income consumers. Unemployment and underemployment in an 
economy of overcapacity decrease demand, leading to financial collapse. The 
world economy needs low wages the way the cattle business needs 
foot-and-mouth disease.
The nomenclature of neo-classical economics reflects, and in turn dictates, 
the warped logic of the economic system it produces. Terms such as money, 
capital, labor, debt, interest, profits, employment, market, etc have been 
conceptualized to describe synthetic components of an artificial material 
system created by the power politics of greed. It is the capitalist greed in 
the worker that causes the loss of his or her job to lower-wage earners 
overseas. The concept of the economic man who presumably always acts in his 
self-interest is a gross abstraction based on the flawed assumption of 
market participants acting with perfect and equal information and clear 
understanding of the implication of his actions. The pervasive use of these 
terms over time disguises the artificial system as the logical product of 
natural laws, rather than the conceptual components of the power politics of 
greed.
Just as monarchism first emerged as a progressive force against feudalism by 
rationalizing itself as a natural law of politics and eventually brought 
about its own demise by betraying its progressive mandate, social capitalism 
today places return on capital above not only the worker but also the 
welfare of the owner of capital. The class struggle has been internalized 
within each worker. As people facing the hard choice of survival in the 
present versus well-being in the future, they will always choose survival, 
and social capitalism will inevitably go the way of absolute monarchism, and 
make way for humanist socialism.
Henry C K Liu is chairman of the New York-based Liu Investment Group.
1999 - 2005 Asia Times Online Ltd.
Head Office: Rm 202, Hau Fook Mansion, No. 8 Hau Fook St., Kowloon, Hong 
Kong
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"E' pericoloso aver ragione dove le autorità costituite hanno
torto" Voltaire
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perchè non lo giri in it.economia piuttosto?