What MF Global means.

How hilarious. Seeing MF Global chief Corzine testify before Congress (perhaps the most connected man on earth) and say that he knew nothing about the money and gold missing from his customers' accounts.

Imagine that you have a checking or savings account with some bank and brokerage and then it just disappears one day? Only ignorance and dread of what might happen keeps us from all closing down our accounts right now.

This incident is a signal of the ambivalence of property rights, the bedrock of Anglo-American political thinking. Yes we have them (said John Locke). But against Locke it seems we don't have them equally (We don't possess equal amounts of property either, but that is another story, read J.J. Rousseau's 2nd Discourse for more on that).

The point: Somebody with MORE property RIGHTS than MF Global's customers got paid off first as the firm collapsed. Even if that meant 'stealing' from them (but is it stealing if someone has more rights than you?)

That is a signal of oligarchy which is defined a rule by the richest. No, it is not rule by the rich as erroneously taught to political science undergrads. She who has more money has more say. Russia often gets accused of having such a system but one need not look so far away for it.

Now Congress and the regulators, both ostensibly democratic institutions, must sort out this spat between the rich and the richer. Oh how rich!!!!

Towards a Protean Europe

Europe is super engrossing right now. The headlines are all about their faltering currency and banks, which some think will affect us in the States (it won't).

But they are doing something interesting. They are meeting frequently. Their political leaders are stepping outside of the moribund EU bureaucracy in Brussels and making decisions 'on the fly.'

Could this be the future of power politics? Speed? Surprise?

The EU is attacked constantly today by the Market, by investors, and so on for being too slow.

That may have been true initially but politics has now caught up with economics and surpassed them (take that Marx!). Surprise fixes coming out every month or so from Europe's Central banks (their Federal reserve). New treaties or treaty proposals often too. Arriving so fast now that the markets have been stunned into submission (Yields have been falling lately on the bonds of the PIIGS).

Sometimes Europe even provokes the Markets into falling and complaining by later reneging on their deals or agreements. Merkel loves to douse their high expectations. What a game!

This sort of protean politics is a new historical phenomenon. Yes, it has no substance. There is no institutional arrangement for it; no super Council of EU Presidents. And no final agreement has actually been penned. It is mostly just monthly statements made to a slavish press corps. But it works.

And they are getting better at it.

Such a continual 'politics of surprise' will be more nimble and agile than anything yet seen on political earth.  

The enigma that is N. Korea

Normally the death of the leader of a half-starved country with few natural resources would not garner much attention. But that major leaders like Hilary C. had something to say on it is a signal of importance.

N. Korea has nuclear expertise. They have mastered the whole nuke cycle, all the way up to ballistic missiles. And that gets the attention of all the big boys from USA and China to Russia and Japan.

What is also interesting is how one sided their power is. It is all 'hard power' military, missiles, intel., border patrol, the works.

There was a debate in the last decade about hard versus soft power. Soft power is the influence of culture to achieve your goals instead of bullets. War is not unfortunately out of style yet but it is costly and no longer contributes to the national interest. Lots of smart folks know that and started praising soft power. I have said to my students that the old show Baywatch killed more so-called terrorists than did fighter jets.

N. Korea offers insight into the opposite extreme. Lots of hard power. Then all they have to do talk scary and everyone worldwide perks up their ears.

You would think that a combi-nation of hard and soft power would be ideal. But the US has not shown that to be the case lately. That is because the best strategy is smart power, which means something like knowing when to hold them and when to fold them. Unfortunately too many interest groups and politicos get invested in current circumstances and refuse to let failures end.

Right now everyone is criticizing Europe for failure but watch out! They have hard, soft, and smart power! I will explain what I mean next time.   

The rise of New Europe

There may or may not be a crisis in the Eurozone. My take is that at worse it is a crisis for the financial sector, but that society's other sectors would muddle through should that be allowed to fail (examples: Iceland, Sweden).

What the political sector does is another mater however. For them, this crisis is a godsend. They are in the drvier's seat again, which is always exciting. I think that Europe's politicos will come around to an arrangement that stabilizes the financial sector, allows them to continue in office, and offers them more benefits from staying in the EU than out of it.

We are long past the point when nationalism matters in W. Europe. National interests will not drive the future of the EU. It will not be France, Germany or Italy that makes the difference. Those referents will be modified into a new amalgam called Europe.

You see, the EU government has become more and more detached from the nations of the Europe, i.e. the will of its peoples. Witness their numerous rejections of Europe in referendums. That detached condition had to change.

Postmodernism is nothing if not a lesson in ambivalent politics. Europe will end its purely fictional existence (which was still Modernist) and trade it for ambivalence. The referent will become less clearly defined as France, Netherlands, etc. Only then can Brussels represent Europe.   

Supercommittee fails so America wins

Most analysts that predicted the failure of the much vaunted US congressional super-committee on deficit reduction predicted failure because 'nothing gets done' in DC anymore.

But what is the postmodern view? That tells us that nothing political happens by accident or mistake. (Why? check out Foucault's concept of 'productive power).

Ergo, this recent political 'failure' could be read as a success. How? Well one problem it helps solve is the overly strong dollar, which will hurt exports and what few decent jobs are left in the USA. US Treasuries have just been too hot lately. (Frankly EU and the US trade back on forth on this in a game of chicken over who has the least valued major currency).

This failure also brings back attention to DC and the drama of feuding parties and a President seeking a path to success. Nothing is worse than seeming irrelevant. It's good for the national media too which lacked good stories for pundits to chat up.

Sounds like a win to me. Might even be good for Main Street too. Economists say deep cuts will throw USA into a depression.

The Greek referendum in a Post-TARP World

There may come a point when historians talk about times before and after TARP. That policy by Bush and co. was the equivalent of ancient Rome's Sulla, who upset the longstanding balance between the society's estates or classes with in-your-face policies that promoted one group over another. Recall that bailout did not make it past the House of Representatives when it was first voted upon, sending Wall Street into a tizzy.

Now the Greek PM has set the stage for round two of this great drama. Wall Street tumbled again today at the prospect that 'the people' (of Greece) will vote down the latest TARP plan (for Europe this time). They are right to fear for the European voters have always voted against Europe, the EU, and its plans.

A referendum is worrisome to world elites for it leaves no room for maneuver. The banking crisis of Europe cannot be dragged out as it has been this far. It is a showdown at the OK corral, which is a relatively unfamiliar scene today.

Obama ends Iraq war

The last time Obama ended the Iraq war he said that all 'combat troops' would return home. That was a signal to observers that the Yanks were in to stay, 50000 strong, as 'trainers' or what not.

Today was a different story. Most of the information I have heard lately is that Iraq is to be cut loose. Effective  sovereignty for Iraq: defined in political science as the monopoly over the use of violence. US troops will remain nearby but in Kuwait.

And so now begins a new cold war as Saudis and Iranians support proxies inside Iraq. They will stalemate, for now. But civilians there will continue to die suddenly