Adonis Diaries

Archive for February 26th, 2009

Son of Man: Margin for Freedom (February 25, 2009)

            Heredity defines to great extent every individual.  Every one of us is the product of long lines of successive unions and yet the probability of identical persons is nil among the billions upon billions of human kinds that roamed earth. Every person that dies is never replaced and his unique set of characteristics is gone for ever.  Maybe our margin for developing certain characteristics is limited; even then, what could be modified a little by nature, environment, social conditions, and personal limited will have an impact in defining future generations.

            We have always attributed our reality to act of God, His will, our Destiny; we have been sons of God until recently.  Research and technology is altering many genomes for a healthier man, even before he is born, even when he is a fetus, even by sorting out and selecting one among the many embryos to re-insert in the mother’s uterus.  Man has started to affect genetically future generations.  God is no longer the sole and exclusive owner of man. 

Man is becoming part owner, though with a tiny share so far.  As long as man is not able to tamper with the brain on a large scale, then God will still have the bigger share to man.  When you partially own a person then you are responsible for the whole entity.  We tended to let God off the hook for too long.  If man has to be taken to court for wrong doing or designing and manufacturing defective products, then it is about time that God be taken to court after each war, each genocide, each apartheid systems of suffering and humiliation.

We have always attributed to God all the good values, even the immoral values in our daily realities, and attributed to God, we have tried hard to interpret then in a lenient manner.  If God exists, and he should exist, then God has to be taken to the International Tribunal for crimes against humanity.  That is the margin of liberty that we still own; to study, read, reflect, have our own opinions, take hold of our personal responsibilities, and act accordingly.  When a person denies his own share of responsibility and stop reflecting and studying then all he does is but wind.  I have published many “poems” and I selected two that might be representative for this article.

I Say

 

I say, every one must have his identity:

           Death has forced on us the I.

I say, what exists must be discovered:

           Death impressed on us to know.

I say, every feeling must be experienced:

           Death created stages for us to grow.

I say, there must be a meaning to life:

           Death did not leave us a choice in that.

 

 

A Gentle Touch*

 

Prettier than white dust

            You shall never be.

Uglier than a skeleton

            You can never be.

Toward the scared souls, scared of death,

            Scared in living,

Let your stretched hand

            Be gentler, your voice softer.

 

Note: I republished under a different title for lack of readers.

Lebanon in 2000: Introspection,  (continue #52)

 

I arrived on Christmas of 2000 at night to the airport; the whole family was there to meet me with the exception of Joanna and dad.  Adrea was about 6 of age and she sprinted and jumped hugged me; she was missing a front tooth.  We loaded the large Dodge van and Elie was driving. 

I realized that the Capital Beirut and the district of Metn were almost a metropolis since buildings were uninterrupted for 17 kilometers on both side of the main road.  There were relatives waiting at home. 

Dad looked old.  He asked me how much I managed to save.  The number darkened his face even more and he had taken a decision on the spot. The next morning dad put our apartment in Beirut for sale.  I think that he was postponing that decision for a while hoping for a miracle.  We received an offer within a week from a family renting in the building opposite to ours. Our apartment was vast but the condition of the entire building was in disintegration and no one was in charge of the upkeep; there was all kinds of electrical wires and cable connected in the main entrance hall, and there was no parking lot for the building, and the street was lined with parked cars…

We could have sold it for a better price but dad was totally broke.  We received cash for the sale and I played body-guard to dad all the way home.  We re-counted the cash and I found out that we received over a million LL ($750) in surplus. The buyer called up and wondered if he paid more than he should.  We were affirmative and he drove to our home and got his money back.

I didn’t see Joanna for a whole day; she had fallen and injured her knees sprinting at school and wanted to show up in a better shape. William had started his first year at the Lebanese University in architecture.  Chelsea was barely 6 months old and didn’t cry when I held her up. 

The next night, mother had prepared a big supper and invited all the relatives, around twenty, and we all laughed and had a great time. I think that was the last mass invitation of a long tradition that is fading away.

I spent a year confused, frustrated, jobless, and with no car to drive around; I think that I was scared to drive in Lebanon and I needed that long to get familiar with my new environment.  I could not agree with the state of Lebanon under construction; it was mainly dust, dust, and more dust and traffic jam and honking and dangerous driving. 

My friend Ramez (a friend from my first visit to the University of Oklahoma at Norman) managed to send my CV to the Lebanese American University in Jubeil (Byblos) and I was hired to teach a course in Human Factors.  The industrial engineering curriculum listed a single course in Human Factors as required, and it was taught by a mechanical engineering professor who was glad to be relieved of this burden. 

That was my first official teaching experience and I prepared for a whole semester using old versions because there were no books or publications on Human Factors at the university library or in any other university libraries.

The first course was “Risk Assessment and Occupational Safety” offered in the fall, and the other course on Human Factors was reserved for the spring semester. Thus, I was driving twice a week to teach an hour, for a trip that lasted an hour drive, for  a total pay of $3,000 a semester.  I had asked the department of Industrial Engineering to subscribe to the Human Factors Journal so that I might update my course and initiate students to read published articles, but nothing materialized for the next three years.

I personally applied for the Journal at the library and they claimed that my application went through but I could find nothing on the shelves for the duration of my teaching there

In the third year, the engineering department decided to cancel the “Risk Assessment” course without asking my opinion, they never did ask for my opinion or even answered any of my letters, emails, or suggestions. The department substituted this course with “Reliability in Engineering” on the ground that it is more in line of engineering. 

Reliability is basically a few probability functions more applicable to actuarial or for insurance business. In industry, reliability is applied to test the life span of a light bulb for example.  I could teach this course because I have taken all the advanced probability courses and “reliability” too, but I was not asked to teach it on the implicit basis that I am “no real engineer”, I guess.  I thus ended up teaching a single course in spring for $3,000 per year.  No other university in Lebanon taught Human Factors related courses.

The worst part was that all the eligible students wanted to enroll in my course and I had to deal with over 60 students.  The department refused to open two sections in order to save a lousy additional $3,000.  Then, the various engineering departments, excepting Industrial engineering because Human Factors is required, decided not to allow their students to taking this course on the ground that they opened other more appropriate courses.

The Industrial department decided to appoint a woman as chairperson, though her PhD is not officially in industrial engineering.  She hired a full-time teacher of her acquaintances.  She did not like me because once, at the end of year dinner, I expressed my surprise that her husband is young; she retorted “Did you think that I was that old?”

The Third World War is loudly tolling (February 27, 2009)

Dr. Abbas Bakhtiar published in February 23, 2009 on “Information Clearing House“ a valuable review on the current economic situation.  It is unfortunately one of so many technical or what I call mechanical explanations of the troubles but no substantive resolutions attached to it.  I will try first to abrige that article and then offer a few solutions.

“In early February, the International Monetary Fund’s chief Dominique Strauss-Kahn said the world’s advanced economies — the U.S., Western Europe and Japan — are “already in depression”. The UK, Italy, Spain, Korea, Taiwan are in depression. All these States and many more have watched their GDP shrinking sharply. Japan, Ukraine, Ireland, and Iceland have experience shrinking in the two digits. An important fact to remember is that this depression is synchronised and this synchronicity has been made possible by the globalization and accompanying deregulation; the very things that were making workers poorer and the rich, richer. China’s growth rate is estimated to be around 1 percent.

Middle Eastern countries have also been severely affected by the financial crisis. Oil prices that were around 120 dollars last year have come down to around 35dollars this year. Every country has slashed its expenditure with the accompanying slowing growth. For example recently UAE was forced to halt construction projects worth $582 billion or fully 45% of all projects. Dubai’s economy is in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills)”. Iranians, Saudis, Iraqis, Kuwaitis and others have also been forced to slow down or freeze many projects. One must not forget that many of these countries’ petro-dollars are re-circulated back into the US and European economies. Those funds are drying-up fast.

Turkey sitting between the Europe and Middle East is also suffering. Turkey has the largest GDP in the Islamic world. Turkey’s GDP was 750 billion in 2008, the GDP of Saudi Arabia was 600 billion dollar for the same period. A once dynamic economy is now negotiating with IMF for help.

The Federal Reserves’ forecast for 2009 shows a contraction of 0.5 to 1.3 percent of the GDP with official unemployment rising to 8.5 or 8.8 percent. Here one should note that this official unemployment rate does not present a true picture, since all those who give-up registering with the unemployment office or are barely working (part-time workers, etc) are not counted as unemployed.

The missing engine of growth

There are four factors that power an economy: consumers, investors, government, and a favourable trade balance. Some economies such as China rely on favourable trade balance and Foreign Direct Investment (FDI) for their growth. For example according to the Chinese Ministry of Commerce, from 1990 to 2007, China received $748.4 billion in FDI. At the same time, since its economic liberalization, China has recorded consistent trade surpluses with the world. For example China has registered trade surpluses of $102 billion for 2005 to $295. billion for 2008. China currently has accumulated nearly two trillion dollars in foreign exchange reserves.

In contrast to the China, the United States has relied on consumers and the government for its growth. U.S. consumers constitute only about 4.5% of the global world population, yet they bought more than $10 trillion worth of goods and services last year. In contrast the Chinese and Indian consumers combined which account for 40% of the global population bought only $3 trillion worth. The U.S. consumer spending shot up to nearly 77% of the economy.

Japan is once again entering another deflationary period. In deflationary periods, consumers spend less and try to save more. The fear of losing one’s job, the psychology of ever decreasing prices, and general feeling of doom act against free spending by the consumers. The Japanese consumption was only 55% of the GDP as much as the Euro zone. So the Japanese and EU consumers cannot help either.

The US consumers have to get used to lower spending levels for at least a decade, if not for good. American’s standard of living is undergoing a “permanent change” – and not for the better as a result of:

• An $8 trillion negative wealth effect from declining home values.

• A $10 trillion negative wealth effect from weakened capital markets.

• A $14 trillion consumer debt load amid “exploding unemployment”, leading to “exploding bankruptcies.”

“The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car,” Davidowitz says. “A lot of that is gone.

The diminishing wealth

For people in general, shares act both as saving and investment. The average person buys share in hope of getting better return than the banks. It is also easy to get in and out of the market. The advancements in information and communication technologies, the costs of buying and selling have fallen steadily in the last decade. So now anyone with a computer can buy and sell shares. This ease of entry enticed an ever increasing number of ordinary people to enter the stock markets.

Now the people have been hit by three disasters. First they lost a lot of money in the housing market. Then they were hit with the collapse of the stock markets. Trillions of Dollars, Yens, Euros and Yuans have been wiped-out in a relatively a short time. Then many have lost their jobs and many are uncertain about the future job security. All these have had a tremendous impact on the consumers, forcing many to heavily reduce their consumption, which in turn have begun to affect businesses which in-turn are shedding workers to compensate for the loss of sales and revenues. This is a classical deflationary circle that feed on itself.

The governments’ response to this threat has been to stimulate the economy by pumping large sums of money into the economy. A decade ago, a hundred billion dollar was an astronomical sum. Today we don’t even bother to look at it twice. Today we talk of Trillions. A few hundred billions here and a few hundred billions there soon add up to a few nice trillions; especially the trillions that we don’t have.

Now we face a classical problem: the increasing budget deficits. Exactly when the economy is contracting and tax receipts are falling, the government expenditure is rising rapidly. In addition, the governments are buying bad debts and trying to spend more on whatever they can in order to arrest the increasing unemployment and stimulate the economy. These large sums have to come from somewhere. They can be borrowed or money can simply be printed. The problem is that some governments are opting for both.

So how can the US continue its deficit spending? By issuing treasury bonds and other security certificates of course. Both public and foreign governments buy these securities which are guaranteed by the US government. Foreign central banks alone held $1.76 trillion dollars in US treasuries. The combined holdings of Treasuries and agency securities by foreign central banks at the Fed totalled $2.573 trillion, up $11.223 billion”.

The coming inflation

So far the foreign governments and businesses have been willing to buy US debt, but with the current economic downturn things are beginning to change. In the last 5 years China has spent as much as one-seventh of its entire economic output buying mostly American debt. However, with the sharp slowdown in its economy, China is finding it difficult to keep buying. China has also come-up with its own $600 billion stimulus plan. This along with the falling trade surplus and the falling tax receipt will make it exceedingly unlikely that China can keep financing part of the US government’s deficit spending. The same applies to other countries as well.

As the economic downturn continues we can see two things: the interest on US treasuries increase substantially to make it attractive and or printing money. Printing money is not so farfetched as many would like to believe. Already countries that cannot find willing lenders are resorting to this. The Bank of England voted unanimously earlier this month to seek consent from the government to start the process of quantitative easing (means printing money) by buying gilts and other securities. With interest rates at 1%, printing money is likely to increase inflation.

It is especially appealing for the US government to print money since inflation means a real value reduction in debts. With mounting trade and budget deficit and decreasing tax receipts and the shrinking of the number of willing lenders, US government may not have any choice but to print money.

All governments are reducing their interest rates to historic lows and at the same time spending a lot of money that they don’t have. It will take at least two more years for the economy to stabilise (meaning an arrest in decline rather than outright growth). Once that point is reached we will begin to see the effects of the loose monetary policy: a tremendous rise in inflation which can be accompanied by low economic growth or in other words stagflation.

The current economic crises have left many countries’ local banks with foreign currency loans that they find difficult to repay in that currency. This and the possibility of defaults have made these countries a good target for speculators. If such an attack starts, many countries will automatically have to devalue their currencies (even more than they already have) or try to defend their currencies. In either case this may trigger yet another crisis that may actually destroy a good portion of many economies around the world.

Even if we assume that no more nasty surprises will appear in the next two years and the economies stabilise, we are left with the reduced levels of consumption around the world, especially in major economies. So there will be a dearth of market for the goods and services produced by others. In absence of the US, the question will be: which country or countries are able to increase demand to such a degree as to trigger a recovery; that most likely will be accompanied with high inflation?”

Dr. Abbas Bakhtiar (Bakhtiarspace-articles@yahoo.no) is sugesting a second “Bretten Woods” agreement where we can address the existing problems and restructure the world’s economic system, otherwise we will face protectionism, low economic growth, and even trade wars. Dr. Bakhtiar failed to offer a blue print on what to agree on.

I suggest the folowing: 

First, the developed States have to agree on another tangible standard (like gold) for currencies.  Gold would not do because the US has abolished it in 1967 because all the gold in the world could not sustain the huge amount of paper dollars circulating or intended to circulate around the world.  The alternative is a basket of depleting minerals that are essentials for manufacturing and production.  The processed minerals do not have to be rare but very essentials for development.  The US can agree to this idea since it has huge reserves in many important minerals.

Second, all the States that can account for at least 3% of all curency circulation should join an “International Money Printing Council” with tight control and monitoring creteria.  Any combined States with over 40% of cash money shares in the global market should have a veto power.

Failing a convincing and sustainable agreement for monetary stability the Third World War is altready in the planning stage as the easiest and quickest way out of that morass.  Only in major wars do printed money with no tangible backing has mythical values.  No, the next region for the war scene is not Iran: no European or US soldiers want to fight in this “cursed region”.  It won’t be Afghanistan: if Afghanistan was worth it then Bush Junior would not have invaded Iraq before stabilizing Afghanistan.  It won’t be North Korea: it is bordering China.  The batlefield will not be in any area bordering Russia.  It won’t be the Congo River zone: no Western soldiers is about to step in this infested and contagious disease plagued region with AIDS consuming 30% of the population.

The next world war is in Sudan. Sudan is a continent by itself and rich in all kinds of raw materials, oil, and water and land to sustain the world agricultural needs.  No, the superpowers will not directly fight one another. The war will last to the last Sudanese and any lame African soldiers that participate in the war. Egypt might get a tiny share of the spoil of the new colonial powers simply because it was impotent to secure its backyard.  Egypt and the Arab States are feeling the heat and scrambling; it is kind of too late.


adonis49

adonis49

adonis49

February 2009
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