…China shows that when it comes to economics, the dividing line among the world’s nations is no longer between communism and capitalism. Capitalism has won hands down. The real dividing line is no longer economic. It’s political. And that divide is between democracy and authoritarianism. China is a capitalist economy with an authoritarian government.

For years, we’ve assumed that capitalism and democracy fit hand in glove. We took it as an article of faith that you can’t have one without the other. That’s why a key element of American policy toward China has been to encourage free trade, direct investment, and open markets. As China becomes more prosperous and integrated into the global market — so American policy makers have thought — China will also become more democratic.

Well, maybe we’ve been a bit naive. It’s true that democracy needs capitalism. Try to come up with the name of a single democracy in the world that doesn’t have a capitalist economy. For democracy to function there must be centers of power outside of government. Capitalism decentralizes economic power, and thereby provides the private ground in which democracy can take root.

But China shows that the reverse may not be true — capitalism doesn’t need democracy. Capitalism’s wide diffusion of economic power offers enough incentive for investors to take risks with their money. But, as China shows, capitalism doesn’t necessarily provide enough protection for individuals to take risks with their opinions.
commondreams.org

How about the idea that robber baron capitalism is antithetical to democracy?

Mike Whitney: China and the Dollar
“It’s the death blow to the US dollar,” said Peter Grandich, editor of the Grandich Letter.

On Thursday, The People’s Republic of China fired off the first volley in what could turn out to be economic Armageddon. China announced that it would begin to diversify its foreign-exchange reserves away from US dollar.

Gulp!

The only thing keeping the dollar atop its fragile perch is the fact that other countries have been willing to lap up the $600 billion of American red ink every year via the trade deficit. That amounts to roughly $2 billion per day or nearly 7% GDP.

Currently, China is holding $769 billion, the vast majority of its foreign exchange reserves. This is a humongous sum by any measurement and represents approximately 30% of China’s gross domestic product. Regrettably, the Bush administration’s wasteful spending makes the dollar look like a bad long term investment, so China will either have to change its strategy or face a huge loss on its reserves. It’s a thorny predicament and one that China needs to handle delicately. If they move too aggressively it could trigger a sell-off and send the dollar plummeting.

Iraq has vast hydrocarbon potential that could rival major producers such as Saudi Arabia and Russia, but United States government analysts are predicting that Iraqi oil production development will remain thwarted for years to come.

Its enormous reserves of an estimated 115-billion barrels of proven crude are the world’s third largest after those of the Saudi Kingdom and Canada.

As of December 2005, Iraqi net oil production was averaging a modest 1,9-million barrels per day (bpd) according to the latest country report on Iraq compiled by the US government’s Energy Information Agency (EIA).

This is well below production levels of an estimated 2,3-million bpd in January 2003 just before the US-led military operation to bring down the Saddam Hussein regime.

The December number is also well below the near 3,5-million-bpd production level prior to Iraq’s 1990 invasion and seven-month occupation of Kuwait that led to the 1991 Gulf War.

“Most analysts believe that there will be no major additions to Iraqi production capacity for at least two-three years, with Shell’s vice-president recently stating that any auction of Iraqi’s oilfields was unlikely before 2007,” said the EIA report released late in December 2005 and carried on its website.
mg.co.za

William Blum: Iraq is Open for Business

The sign has been put out front: “Iraq is open for business.” We read about things done and said by the Iraqi president, or the Ministry of this or the Ministry of that, and it’s easy to get the impression that Iraq is in the process of becoming a sovereign state, albeit not particularly secular and employing torture, but still, a functioning, independent state. Then we read about the IMF and the rest of the international financial mafia — with the US playing its usual sine qua non role — making large loans to the country and forgiving debts, with the customary strings attached, in the current instance ending government subsidies for fuel and other petroleum products. And so the government starts to reduce the subsidies for these products which affect almost every important aspect of life, and the prices quickly quintuple, sparking wide discontent and protests.[1] Who in this sovereign nation wanted to add more suffering to the already beaten-down Iraqi people? But the international financial mafia are concerned only with making countries meet certain criteria sworn to be holy in Economics 101, like a balanced budget, privatization, and deregulation and thus making themselves more appealing to international investors.

01/09/06 “FT” — — Paul Bremer, former head of the Coalition Provisional Authority in Iraq, says that senior US military officials tried to make him a scapegoat for postwar setbacks, including the decision to disband the Iraqi army following the US invasion in 2003

In a memoir published on Monday that broke a more than year-long silence, Mr Bremer portrays himself in a constant struggle with Donald Rumsfeld, the defence secretary, and military leaders who were determined to reduce the US troop presence as quickly as possible in 2004 despite the escalating insurgency.

He also writes how Mr Rumsfeld was “clearly unhappy” that Condoleezza Rice, then national security adviser, had taken control of Iraq policy from the Pentagon in late 2003.

A Pentagon spokesman on Monday confirmed that Mr Bremer had sent Mr Rumsfeld a memo based on a report by the Rand Corporation consultancy that recommended 500,000 US troops would be needed to pacify Iraq – far more than were sent. But Mr Bremer’s advice was rejected by military leaders and Mr Rumsfeld.
informationclearinghouse.info

Powell says lack of troops impeded success
Former Secretary of State Colin Powell said Sunday night in the Twin Cities that he harbors no regrets about the U.S. invasion of Iraq but acknowledged wartime mistakes and warned that Iraq’s eventual government might not be as broad-based as American leaders had hoped.

In a speech at Beth El Synagogue in St. Louis Park, he urged nearly 1,000 people to pray for Israeli Prime Minister Ariel Sharon and the people of Israel. Powell called Sharon, who suffered a major stroke last week, a man of peace.

Powell said that the world is in better shape now than at any point in his life. He said fascism and communism have been defeated and that while terrorists can blow up buildings and take hundreds and even thousands of lives, they cannot remake this country the way Nazi Germany or the Soviet Union would have.

…The mistake in Iraq was not that the U.S. invaded, he said. It was that “we didn’t have enough troops to take control on the ground” and didn’t immediately impose martial law in order to protect the various ministries and infrastructure throughout Iraq.

Yup, Sharon is a man of peace, and a million troops would have really done the trick.

WASHINGTON — The Army took initial steps Monday to expel dozens of reservists who failed to report for active duty, in effect warning hundreds of others that they, too, could be penalized if they don’t heed orders to return to active service.

The proceedings mark a turning point in the Army’s struggle to deploy thousands of soldiers from the Individual Ready Reserve, a rarely mobilized group of reservists, to war zones in which some have resisted serving.

These are soldiers who had previously served on active duty but not completed their eight-year service obligation. Unlike those in the National Guard or Army Reserve, they are not required to stay in training. Many have requested a delay in returning to service, have asked to be exempted or have ignored their orders.
seattlepi.nwsource.com

There’s more misery in people’s lives today than a decade ago – at least among those who will tell you their troubles.

So says a new study on life’s negatives from the University of Chicago’s National Opinion Research Center, which conducts social science research for government agencies, educational institutions, non-profit organizations and private corporations.

The researchers surveyed 1,340 people about negative life events and found that the 2004 respondents had more troubles than those who were surveyed in 1991, the last time the study was done.

“The anticipation would have been that problems would have been down,” says Tom Smith, the study’s author. He says good economic years during the ’90s would have brought an expectation of fewer problems, not more.
news.yahoo.com

The unhappiness index is up. Go figure.

An attempt by Venezuela’s leftwing president, Hugo Chávez, to double the price that coffee producers pay farmers for a sack of beans has led to empty shelves in supermarkets throughout the country and fears of shortages of other basic foodstuffs.
President Chávez, who maintains price controls on basic foodstuffs, raised the price of coffee beans by 100% last month after weeks of protests by coffee farmers.

But most of the country’s coffee producers, who buy, roast and grind the beans, refused to sell on the coffee yesterday, claiming their margins had been cut, and began hoarding thousands of sacks of unprocessed beans.

Eduardo Bianco, a representative of the country’s coffee producers, said: “The government can’t expect us to sell our coffee if it is refusing to increase the prices for a kilo of coffee you buy over the counter in the shops.”
As coffee disappeared first from the supermarkets and then from the streets, the National Guard was sent out to confiscate coffee that had been stockpiled at private warehouses.

Two warehouses were raided, and dozens more are on government lists.

Mr Chávez said he would not tolerate the situation. “I’ve instructed the National Guard to look for the missing coffee and to find every single kilogram of it,” he said in his weekly TV and radio show, Hello Mr President. “The army has the permission to seize the coffee with the power of attorneys and judges. We will sell the coffee at prices set by us.”
guardian.co.uk

The subtext of course is that the producers are fabulously wealthy landed gentry while the growers are poor campesinos. The growers could simply develop co-ops for roasting and retail selling, but Chavez is trying to play ball with the producers, who no doubt one and all are part of the opposition to him.

Venezuela to expand fuel discounts to U.S.

BEIJING — Bolivia’s president elect invited energy-hungry China on Sunday to help develop his country’s vast gas reserves after his government carries out plans to nationalize them.

Evo Morales’ visit to China comes amid a campaign by Beijing to develop ties with nations throughout Latin America as new sources of fuel, raw materials and new markets for its export dynamo.
seattlepi.nwsource.com

01/09/06 “Counterpunch” — — President Bush’s off-hand summation last month of the number of Iraqis who have so far died as a result of our invasion and occupation as “30,000, more or less” was quite certainly an under-estimate. The true number is probably hitting around 180,000 by now, with a possibility, as we shall see, that it has reached as high as half a million.
informationclearinghouse.info

MOSUL, Iraq, Jan 9 (Reuters) – Three sewing machines in a dingy apartment were all Munna Abdul Adeem Ahmed could scrape together when she set up a tailoring co-op for poor widows. She soon realised it was not enough.

More than 1,000 women from the northern city of Mosul turned up looking for work on the first day. Ahmed finally stopped registering new names after the 1,200th widow signed up.

The women were mostly young, poor and desperate for work. Many lost their spouses during the wars, uprisings and civil conflict that have bedevilled Iraq over the past 25 years.

Now, a raging insurgency is adding to their numbers.

Behind the daily bloodshed and attacks that make headlines across the world, there is a growing population of widows.

Traditionally, Iraqi widows have been supported by their late husband’s family or other relatives, but in a country brought to its knees by violence and war, there is now little to spare for the most vulnerable members of society.
alertnet.org

…Indeed, in East Harlem, it is possible to take any simple nexus of people – the line at an A.T.M., a portion of a postal route, the members of a church choir – and trace an invisible web of diabetes that stretches through the group and out into the neighborhood, touching nearly every life with its menace.

Mr. De La Vega, a 33-year-old self-styled “sidewalk philosopher” whose murals and sidewalk chalk drawings are familiar neighborhood ornaments, has a mother with diabetes. His stepfather’s case was confirmed in March. And a number of Mr. De La Vega’s friends who occupied his chairs or sat in the bordering garden, well, they had it. Mr. De La Vega said he would probably get it, too.

In East Harlem, in fact, it seems peculiar if you don’t have it.
nytimes.com