Tag: War

The Economic Impact of a War Between Japan & China

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“The United States believes that the establishment of diplomatic relations with the People’s Republic will contribute to the welfare of the American people, to the stability of Asia where the United States has major security and economic interest, and to the peace of the entire world.”

President Jimmy Carter
The American Presidency Project. December 15, 1978

 

Unfortunately, this is not a conspiracy theory.  2013 is a decisive year to deter the escalation of a war between Japan & the People’s Republic of China.  Who can stop it? According to this impressive video, the United States of America has a decisive role to play in this global arena.

A major conflict between the region’s two largest economies would not only impose a harsh dilemma on U.S. diplomats, but also have a significant impact on the entire global economy. It is in every nation’s best interest that the Chinese and Japanese settle their territorial dispute peacefully.

The team at One Minute MBA explains that

“The conflict between China and Japan has put the United States in a precarious position: if a full-scale war were to erupt, the U.S. would be forced to choose between a long-time ally (Japan) and its largest economic lender (China). Last year, China’s holdings in U.S. securities reached $1.73 trillion and goods exported from the U.S. to China exceeded $100 billion. The two countries also share strong economic ties due to the large number of American companies that outsource jobs to China.

However, the U.S. government may be legally obligated to defend Japan. In November, the U.S. Senate added an amendment to the National Defense Authorization Act that officially recognizes Japan’s claims to the disputed islands; the U.S. and Japan are also committed to a mutual defense treaty that requires either country to step in and defend the other when international disputes occur. Not honoring this treaty could very easily tarnish America’s diplomatic image.

The countries of the Asia-Pacific region are collectively responsible for 55 percent of the global GDP and 44 percent of the world’s trade. A major conflict between the region’s two largest economies would not only impose a harsh dilemma on U.S. diplomats, but also have a significant impact on the entire global economy. It is in every nation’s best interest that the Chinese and Japanese settle their territorial dispute peacefully.”

To read the entire video transcript please visit this link.

Drugs: A Legal Market is not a Free Market

English: Flower of a Opium Poppy
Image via Wikipedia

A couple days ago, Otto Perez Molina, recently elected as President of Guatemala; announced that he was willing to decriminalize the commercialization of drugs. According to U.S. authorities, Guatemala has became the transshipment point for more than 75 percent of the cocaine smuggled into the United States since 2005.  Along with this, the Opium poppy cultivation is already done in large parts of the countryside making the production of Guatemalan heroin a greater and the newest worry for the United States. The country’s elites are already part of this business and the paranoia of crimes that used be a remembrance from Colombia‘s 1990s history seems to be repeating in these Central American countries.

What impresses me the most now is how this news has started spreading around my Facebook contacts (mostly libertarians and liberals). Both groups seem to be happy to hear this announcement by Guatemala’s President.  However, both groups applaud the news for different reasons.  The legalization/decriminalization of drugs will not be the panacea we all are hoping for.  Specially not if started by any of the Central American governments.  The reasons are many and I will begin by listing some of them to open the discussion,

  • Corruption, lax enforcement, and judicial impunity levels in Central America are among the highest of the world.
  • Drug lords and their new and powerful money have been mentioned by many analysts to be already part of the politic and economic elites of these countries.
  • The Central American countries in which this drugs are produced and transported are inhabited by a large majority of people living in the lowest leves of Human Development.
  • If legalized, the trade, production and commercialization of drugs (cocaine and heroine mainly) will be regulated by these governments.
  • Without any doubt, this regulations will enable and create legalized monopolies ruled with the partnership of previous drug lords and government officials.
  • It has not been advocated by any of the political leaders which road would take the legalization of drugs. This is important, because under current legalization procedures it is not the same to get the approval for a new medicine in the market as to get the approval for a new liquor, a new energizing drink or of a new edible product.

The history of the legalization (production, trade and commercialization) of items considered by many as drugs and for others as commodities has shown that for as long as a government elite hold the power to legalize it; it was in their power to take the first steps into the acquisition of a monopoly of its trade and production.

If legalized, the emergence of a coercive monopoly would be inevitable. As noted by Ayn Rand, the governments and their partners in these coercive monopolies “will be able of setting the initial prices and production policies independently of the market, with immunity from competition, from the law of supply and demand. An economy dominated by such monopolies would be rigid and stagnant.”

If we support the complete and absolute free trade of all commodities it is necessary that we do not grant to government an intrinsic right to regulate it.  No compromise should ever be done with a government that requires regulation in order to give us legalization.  Legalization should result in freedom and not in regulation.  The drug trade should be opened to businessmen and entrepreneurs in the freest way possible. The freest way is that of requiring the traders to inform their buyers about all the necessary information about the products they are offering.

We may be taking part in a historical moment in which the most important thing are principles.  Let us remember that one of the most valuable principles of trade is Freedom; and that one of the most valuable principles of government is to seek that i will Protect Individual Rights and not to regulate their lives.

Note: To understand more which are the principles that really matter in this discussion, I invite you to take a look to the video titled: The Drug War in Guatemala: A Conversation with Giancarlo Ibarguen.

Dec. 7, 1941. Pearl Harbor Attack Footage

Video of original footage of the Declaration of War to Japan

This footage of the Japanese attack on Pearl Harbor was shot by CWO4 Clyde Daughtry. The attack occured at exactly 7:55 a.m. Hawaii Time. The original footage has since been lost, and the poor quality of this footage is due to the fact that it is a copy, and believed to be the best remaining version of this film in existence. Among the many valuable portions of this footage are shots of USS Nevada (BB-36) underway and firing back at Japanese aircraft, USS Oglala (CM-4) rolling over and sinking, and USS St. Louis underway (CL-4). Naval History and Heritage Command, Photographic Section, UM-10.

From One Prohibition to Another (1933-2011)

On December 05, 1933 the Prohibition on the production and commercialization of Alcohol was finally over in the United States when Utah became the 36th U.S. state to ratify the Twenty-first Amendment to the United States Constitution. Thus establishing the required 75% of states needed to enact the amendment (this overturned the 18th Amendment which had made the manufacturing, transportation, import, export, sale, and consumption of alcohol and alcoholic beverages illegal in the United States).

Since then, the alcohol industry (widely hated and considered evil before 1933) started developing into one of the most successful industries of the modern world.  The access to competition ignited an immense diversification of marketing, production and commercialization strategies that improved the quality, safety, additives and capabilities of the previous distilled liquors.

By 2010 The world’s five biggest alcohol companies by market cap had their hubs in Beligum Anheuser-Busch Inbev (BUD), Brazil (Companhia de Bebidas das Américas (AMBEV) (ABV); United Kingdom (Diageo plc (DEO), The Netherlands (Heineken (HINKY.PK) and France (Pernod-Ricard (PDRDF.PK).  And the industry gives provides with jobs to millions of workers around the globe.

Today, in 2011 we face a different but at the same time similar Prohibition of a product.  I refer to the research, production, industrialization and commercialization of controlled drugs (marihuana, cocaine, etc.) that has been condemned by world government with the same irrational argument once used with alcohol.

Because of this Prohibition on Drugs; the world is facing a Trillionaire war leaded by the United States politicians who profit from it. More so, millions of jobs are lost every day and in the countries in which it is produced and stored before reaching the final markets the chaos reigns (for just one story of how this chaos come into being check: The Drug War in Guatemala: A Conversation with Giancarlo Ibarguen).

Let us learn from history and save our children and future generations from committing the same mistakes.