ISRAEL NOT A FREE MARKET ECONOMY

A student in one of my classes got quite angry when I mentioned that  Israel cannot be classified as a free market economy. Israel continues to receive the most aid of any country in the world, from the US and currently receives $3. billion a year. Given that there only 6 million approx Israelis...you can do the maths and see how much Israeli citizens are being subsidized by the American taxpayer..

This explains US aid to Israel: http://www.fas.org/sgp/crs/mideast/RL33222.pdf

Here is an opinion piece
http://www.huffingtonpost.com/steven-strauss/us-aid-israel_b_4251742.html

US military aid to Israel isn't just about Israel's defense, but is helping to subsidize its defense industry.
The US sends military aid and technology to Israel, which helps to subsidize its thriving weapons industry. In turn, Israel sells weapons to China (which doesn't sit well with the US) and many other countries. Israel is the world's sixth largest weapons exporter.
http://www.aviationweek.com/Article.aspx?id=/article-xml/AW_08_05_2013_p76-600058.xml

Aid money from the US is used to develop Israeli industries which in turn compete with American businesses.
 

While Israel does have some free trade agreements, its defense sector is largely protected by US aid paid for by US taxpayers. The irony is, Israel has been under fire for selling its weapons to China.

For an account from 2002 of Israel's protective tariffs , see this:

http://www.iasps.org/policystudies/ps53eng.pdf

There is no reason to suppose this has changed much since then. There have been massive protests in Israel due to poverty and financial restrictions. Here is a blog that explains Israel's LACK of competition, and you can check out the facts yourself:

"The main reason why it is so hard for Israelis to earn a decent living is that the Israeli economy is strangled by anti-competitive behavior by business in cooperation with government bureaucracy. It wouldn’t cost money for the government to stop doing the things it is doing that enable Israeli businesses to make undeserved profits while operating inefficiently and charging excessive prices. :

http://blogs.timesofisrael.com/from-crony-capitalism-to-a-free-market/

LEBANON, THE PLO AND THE US

To deal with the huge influx of Palestinian refugees into Lebanon, the 1969 Cairo Agreement was crafted which gave the precursor PLO jurisdiction over camps of Palestinian refugees previously under the rule of the Lebanese government. It also gave the right to Palestinians to pursue an armed struggle against Israel. Thus the refugee camps became the base of the PLO and there developed a 'state within a state' situation in S Lebanon. The Sunni Palestinians in their hundreds of thousands caused an imbalance in the Confessional domestic political system which exists in Lebanon. The presence of the PLO contributed to national tensions and triggered the Israeli occupations/ attacks on Lebanon in the 1970s and 80s. The Cairo Agreement was repealed by the Lebanese government in 1987. A good book about this is:
Cobban, Helena (1984). The Palestinian Liberation Organisation: People, Power, and Politics. Cambridge: Cambridge University Press.

US-Lebanese relations
 Israel was at war in Lebanon during the 1970s  causing high civilian death toll and damage to Lebanon’s economy, particularly in the largely Shiite southern part of the country, where there were PLO camps.  Israel had attacked Lebanon because it had PLO fighters on its territory. The PLO had been formed as a resistance army and political party against Israeli occupation of Palestinian territories. President Carter in 1978 backed a UNSC resolution condemning the Israeli attack. In 1981, after Israel had bombed a heavily populated neighborhood in Beirut, President Reagan brokered a cease fire. However, in 1982, Israel continued to bomb Beirut and the US reversed its position and backed Israel. In 1982, the US brokered an agreement in which the PLO had to evacuate to Tunisia. The US then withdrew. Right wing Lebanese  Phalangists took advantage of this withdrawal, and  massacred over 1,000 civilians under the watch of Israeli occupation forces in 2 refugee camps.

The Hezbollah (Party of God) emerged in the early 1980s as a Shia Islamic militant organization that was formed as an armed resistance to Israeli occupations and attacks in Lebanon. Today, there are Hezbollah members in the Lebanese Parliament.

The US had supported the Phalangists and the  Israeli invasion in 1982, after Carter. In April 1983, suicide bombers struck the U.S. Embassy in Beirut, killing 63 people. US forces returned and the fighting between the Lebanese resistance to the Israeli occupation, and US forces continued. US forces finally withdrew in 1984.

The historian Stephen Zunes (U of San Francisco) quotes  Jimmy Carter in an interview with the New York Times, in regard to Lebanon, “We bombed and shelled and unmercifully killed totally innocent villagers, women and children and farmers and housewives, in those villages around Beirut. As a result, we have become a kind of Satan in the minds of those who are deeply resentful. That is what precipitated the taking of hostages and that is what has precipitated some terrorist attacks.”

I havn't been able to find the original interview..

CONVERSION BY THE BOOK OR BY THE SWORD

The Western media tends to support the claim that Islam was spread by the sword not  voluntary conversion. Here is what one student wrote in my INTL 5265 Middle East Studies class: "I understand that it is a contentious point in the west, but only in public and media spheres, not so much in academic ones. Those who are familiar with the history of Islam know that Muslim armies never reached Indonesia, east and West Africa for examples. The existence of Christian and Jewish communities (their numbers started dwindling only in recent history) in predominantly Muslim countries also denotes coexistence between Abrahamic communities was congenial. From a theological perspective, one of the most important tenets of Islam, as you know, is the notion of “intention;” no act – prayer, charity, fasting, hajj, etc - is accepted in Islam without a firm announced intent behind it. No one can forcibly be converted to Islam. With that said, I do agree that Muslim soldiers, much like any other armies, were guilty of atrocious transgressions during wars, to include forcible conversion. Those transgressions – labeled “war crimes” today - were condemned by Islamic scholars and jurists. There is plenty in the Coran and Hadith to support that condemnation. "

WHERE IS GERMANY'S GOLD

Germany wants its gold bullion back from the Federal Reserve, but it's been told to wait seven years.
One should ask, why does Germany keep its gold in a vault in New York City? Why not in its homeland? 
Short answer...faith in the American dollar as reserve currency since end of WWII and fear of takeover by USSR.
Gold at the Feds is basically collateral for quick loans of American dollars. But if American dollars aren't wanted as much...countries ask to repatriate gold. 
Nixon took the dollar off the gold standard. Today, gold is being hoarded in many countries, including China, which has sold off a lot of its US bonds and is instead buying gold. This shows overall a lack of confidence in the US dollar and a growing confidence in gold. 
Also failing the confidence test, is the World Bank, mainly funded by the US, which is now refusing to allow the US Government Accounting Office to conduct an audit. We will be seeing a lot of scandals involving US directed financial institutions...but turning to BRIC economies won't necessarily be any better for the world economy, in my view. 
Yes, this is a public relations disaster for the Feds...really a laughing stock right now. But Germany wants to downplay everything, since it doesn't want to look like it 'lost' its gold!
 
BTW, I really like Max Kaiser for financial info ... outrageous but really intriguing. The National Taxpayers Union is a very good source.
 

GLOBAL RULING ELITES AND TRANSNATIONAL CAPITALISTS

Please look at this list below of the top 25 of 147 ‘super connected companies’. What do you suppose are their countries of origin, or where they are based, legally? Ask yourself if they can be characterized as ‘transnational’.
Randal wrote “With this reference point in mind the authors of "The Global 1%" utilize data from Orbis 2007, a database listing thirty-seven million companies and investors, the Swiss researchers applied mathematical models—usually used to model natural systems—to the world economy. The study is the first to look at all 43,060 transnational corporations and the web of ownership between them. The research created a “map” of 1,318 companies at the heart of the global economy. The study found that 147 companies formed a “super entity” within this map, controlling some 40 percent of its wealth. The top twenty-five of the 147 super-connected companies includes:
1. Barclays PLC*
2. Capital Group Companies Inc.
3. FMR Corporation
4. AXA
5. State Street Corporation
6. J. P. Morgan Chase & Co.*
7. Legal & General Group PLC
8. Vanguard Group Inc.
9. UBS AG
10. Merrill Lynch & Co. Inc.*
11. Wellington Management Co. LLP
12. Deutsche Bank AG
13. Franklin Resources Inc.
14. Credit Suisse Group*
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc.*
19. T Rowe Price Group Inc.
20. Legg Mason Inc.
21. Morgan Stanley*
22. Mitsubishi UFJ Financial Group Inc.
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation*
* BlackRock Directors

I wrote to Randal:
Note the nationality of these corporations...mainly US and Japanese based. No wonder Business English is one of the most sought after classes around the world.  I think this term 'transnational' is a misnomer. Maybe it will become so in the future, but this list bears out Sklair's research that 60% of so called 'transnational' wealth is in legally housed in either Japan and the US. What's also interesting is how many banks are in this list.

Sarah found an article in  the Economist on the global ruling class, which she writes, is a simplified term for the transnational class. “This article attempts to define a typical global class ruler as someone who attends either Harvard, Stanford, or the University of Chicago. They work at Goldman Sachs, and sit on the same direction boards. It is a revision of old money or WASP society redefined global style.”
Note here also, the preponderance of American universities, mostly Ivy League.
Global ruling class to me is a more accurate term than ‘transnational capital’ which implies that capital is being transferred around the world. Clearly it’s not, if you compare national GDPs:
USA=$15 trillion out of $70 trillion world GDP…approx.. figures according to the CIA Factbook. That’s 1/6^th of global GDP. Compare to ratio of population: US=350 million. World=7 billion, roughly 5%. That means that 5% of the world’s population accounts for 22% of the world’s wealth.
 Compare to Russia: $2 trillion,  UK (a tiny island, but remember the City of London is the global center of banking) at $2 trillion; China : $8 trillion …an official figure that the CIA disputes and believes is higher…
See: https://www.cia.gov/library/publications/the-world-factbook/fields/2195.html
To say that US wealth is bound by a ‘transnational state’ , as claimed by Robinson and Sklair…doesn’t make sense. Of course, there are offshore banks and islands, where corporations can siphon off profits in order to avoid taxation. President Obama is trying to call a halt to this.
Corporate loopholes don’t necessarily mean sheltering profits in the Cayman Islands. Lucrative legal headquarters exist in the US. Here is an example about Starbucks:
“Starbucks had already mastered the art of doing business on multiple continents as it grew from a niche coffee retailer in Seattle into a global brand with thousands of outlets from Saudi Arabia to Peru. Now the company smelled a fresh opportunity that required a presence in mysterious territory with its own unique culture: Washington, D.C.
It was 2004 and Congress was considering a law that would provide substantial tax breaks to nearly any company engaged in manufacturing. Though this term conjured images of textile factories and steel mills, Starbucks argued that the definition of manufacturing should -- for purposes of calculating its tax bill -- be stretched to include the roasting of coffee beans.
Starbucks hired an outside lobbyist, Michael Evans of the Washington powerhouse K&L Gates, paying his firm $60,000 that year, according to lobbying reports. Evans was only a year removed from his previous incarnation as a top lawyer on the Senate Finance Committee, the panel that writes the nitty-gritty of tax law. At his urging, lawmakers soon delivered what became known as "the Starbucks footnote," a clause added to a 243-page tax bill called the American Jobs Creation Act.
The provision enabled Starbucks to claim something called a "domestic production activities" tax deduction on each cup of coffee sold in one of its American retail stores. The measure has since saved Starbucks $88 million, according to the company.
Starbucks asserts that its tax savings are entirely legitimate. “
Source: http://www.huffingtonpost.com/2013/02/15/obama-corporate-tax-reform_n_2680880.html

GLOBALIZATION AND THE GLOBAL INCOME GAP: FOR RICHER OR POORER?

A student wrote in my INTL 5400 class:

"The Organization for Economic Cooperation and Development (OECD) found that the “poorest country in 2011 was poorer than the poorest country in 1980.  And much of humankind continues to live on less than $1 a day” (Jaura, 2013).  OECD believes that globalization is actually creating a larger gap between the rich and the poor instead of helping the entire world develop as a collective.  A series of studies by the OECD highlight both sides of globalization: in Brazil, a young professional manicurist left her rural home and moved to Sao Paulo and due to the economic growth in Brazil the future is looking very bright with a new car, health insurance and other commodities; on the other hand in Mali, a farmer is making less money for his cotton crops because of the additional charges from the state-run textile development company.  The inequality between the rising standard of living and declining wages are a big piece in the argument against globalization.  Pilger and his crew interviewed several families in Indonesia who were afraid they would not be able to pay for medication for their children and have to reduce their daily food intake from 3 meals a day to 2 meals day.  The article from Arab news highlights those same fears in other developing countries.
Jaura’s article also claims that China is somewhat of an exception to progress and growth from the developing world and that its good results distort the statistics from decreasing world poverty.  An OECD study shows that “in the last 20 years, rapid globalization has occurred alongside a worldwide decrease in extreme poverty.  Since 1990, the number of people surviving on under $1 a day has dropped by 25 percent” (Jaura, 2013).  China’s per capita income is increasing faster than most other developing countries and the large population means that a larger number of people move out of the $1 a day standard of living than in smaller countries.
I do not completely agree with Pilger’s perspective and the “hard data” from the Arab News article.  Statistics can always be drawn and manipulated to create the results a study wants to produce.  I believe the saying is, “there are three kinds of lies: lies, damned lies, and statistics.”  Certainly there continues to be inequality between the rich and the poor and in some place the gap is actually growing wider.  However, a lot of the statistics pulled for the antiglobalization argument are misleading.  An economist from Columbia, Xavier Sala-i-Martin, said many of the statistics from the 1999 United Nations Human Development Report depart from “standard economic procedures, like not correcting for price levels from country to country” (Postrel, 2002).  Some of the stats only included a selective number of countries.  The biggest error Sala found was that the report “looked at gaps in income of the richest and poorest countries—not rich and poor individuals” (Postrel, 2002).  Comparing small populations like Grenada to large populations like China and giving them equal weight in a report does not seem like an accurate way to describe wealth inequality.  With China’s (and India) rising economy during globalization, billions of people have increased their standard of living.  “From the point of view of individuals, economic liberalization has been a huge success.  ‘You have to look at people,’ says Professor Sala-i-Martin. ‘Because if you look at countries, we do have lots and lots of little countries that are doing very poorly, namely Africa’’ (Postrel, 2002).  The entire population of the continent of Africa is about half the population of China, so despite the continued poverty in Africa individuals have increased their wealth and standard of living.
WORKS CITED:
Jaura, Ramesh.  “Globalization Makes Poor More Vulnerable.”  Arab News.  25 Apr 2013.  http://www.arabnews.com/news/449339.  Accessed 6 Jul 2013.
Pilger, John. The New Rulers of the World.  Dir. John Pilger.  2001.  Accessed 6 Jul 2013.

THE EUROPEAN UNION - WHO BENEFITS?

The question is, who has the EU benefited so far? One student in my Summer 2013  INTL 5400 class has provided some promising statistics for the Eastern European countries, but that is not the whole story.
I was born in the UK, and go back there often. The media consensus there is the following. The EU:
1) Created a layer of EU politicians and members of the EU Parliament  who are making decisions unilaterally in Belgium, home of the EU parliament (and living high off the hog in Brussels!) Political integration has not followed economic integration.
2) The British don't want to adopt the Euro  and are confused by European measurements. Dealing with two different measurements...the lb (pound) and the kilo...has created a huge headache for retailers.
3) French cheese has flooded the British market, undercutting British cheese producers - applies to other products as well. Upset occurs when British food products are said not to achieve EU standards.
4) Floods of Romanian gypsies have arrived in Britain, begging on the streets. Britain's welfare programs have attracted many impoverished Eastern Europeans.
On the upside:
1) Cheap labor from Eastern Europe in  British restaurants, shops etc. Of course that's not great for the workers, and British workers' pay is being undercut.
2) Another human rights court (the  European Court of Human Rights) that supersedes British human rights courts (which some might think is not an advantage).
In countries like Italy and Spain, there is huge resentment against Germany, which is basically managing the Euro. If Turkey does join the Euro, ironically one would see the old WWI alliance of Turkey and Germany, BTW. Germany, being the strongest country in the EU, effectively runs it, and has imposed strict austerity measures on countries like Greece and Cyprus. This in turn triggered mass deprivations and then protests.