Who runs America?

This is a question that has been in the back of my mind for some time. When we consider the economic events from 2008 onwards and how slow (almost 2 administrations) it has taken for any economic legislation to take shape for the (at present) ineffective halting of moving tax dollars off shore. Even now, several economic boffins are slowly and casually mentioning that current measures are not going far enough.

The entire issue took a new foothold as we see the Ukrainian events unfold. We see how some politicians are acting so….outspokenly against certain acts. Now, I am not speaking out against these people, I believe in the freedom of speech and as such, we need to hear all sides. The issue was shown the most visible in the UK when some stated on how economic sanctions against Russia would be taken, like getting gas from a different source.

It was at that point when I saw just how hollow their boasts were. In my view those politicians would soon be dragged to a separate room where several high powered industrials would add these politicians to the Christian choir of ‘Mare Castratum’, see this as a slightly more efficient form of gagging a politician.

Why this view?

Consider that politicians would make that rash decision and also consider the fact that in the UK (amongst most EEC nations), the energy prices are way above normal. So in a place where like the US, 1 in 7 lives below the poverty line, where these people can hardly pay their bills, get confronted with a 10%-15% raise on energy bills. What do you expect to happen?

I expect something similar to happen in the US, as I see it there are two elements in play here. The first is the claim (at http://www.skynews.com.au/world/article.aspx?id=957624)

The two quotes are “The Senate on Tuesday expressed its support for Ukraine by passing strongly worded resolutions, using tough language against Russia and urging it be suspended from the Group of 8 world powers.” and “The House of Representatives also passed a resolution to condemn what House Speaker John Boehner called ‘Russia’s hostile acts of aggression’

I understand the second quote and I reckon that House Speaker John Boehner was quite correct to pass such a resolution. It is the first one that is an issue, I understand that governments want to stand in support of the Ukraine, there is no way that any objection to that is valid, consider however what the G8 stands for. If we accept the following ‘G8 nations comprise 50.1% of 2012 global nominal GDP‘, then without Russia, will the G8 be a valid office of existence and what to do to keep its validity? Replace it with China?

That part would make sense as in many ways, the Chinese economy would be much more interesting to America then Russia is for the mere fact that China imports almost 3 times more than Russia does (based on 2012 numbers). Yet, if this happens, then what will be the long term consequences? Consider that the Ukraine is in an even less prosperous situation then most EEC countries. Now consider the information (at http://www.forbes.com/sites/kenrapoza/2014/03/05/in-ukraine-crisis-russias-natural-gas-tactics-could-backfire/), basically the Ukraine was getting gas at a 36% discount. If that fell away, then what will the Ukraine do? The quote seen here “The UK National Balancing Point (NBP) futures for natural gas jumped nearly 10% to $10.28 per MMBtu, according to Bloomberg. Prices have since moderated as the political situation appears to be calming down” gives validity to my claims of the energy prices; if futures would take that must a blast, then I reckon the people could face a charge at nearly twice that percentage. There was a side in all this that I had not reckoned on. When we see the quote “The U.S. wants to become a large LNG exporter later this decade and a portion of that would be bound for Europe” we see two dangers. The first is that this is not just government, but this is definitely a ‘Big Business’ push. Yet, consider the amount of customers could be the issue as the amount needed would far outstrip what could be delivered. That part is implied in the Dutch article (at https://decorrespondent.nl/299/eerst-het-gas-dan-de-moraal/32952491-c7e501ab) called ‘Eerst het gas, dan de moraal‘, which could be loosely translated and paraphrased as: “Business before morality“, which is basically at the heart of all these events. The article states that the Russian pipeline is supplying well over 26 million households, which is well over twice the size of California (in households). There should be no illusions that Gazprom has its powerful claws firmly in the EEC.

Let’s make sure that I am not stating that the politicians are acting purely or mostly out of economic reasons. I am to a lesser extent implying that it is possible that the Natural Gas lobbyists in Washington have been speaking with politicians over a lunch or two (which is how things are done in the US and UK). That latter part was discussed in the Guardian in October 2013, as UK Labour leader Ed Miliband mentioned that these lobby groups are not getting the proper levels of scrutiny (at http://www.theguardian.com/politics/2013/oct/07/energy-firm-lobbyists-scrutiny-ed-miliband). So it is IMHO Big Business that is the second danger element in these cases. If the politicians represent the people, yet big business has the funds, ability and know-how to override the views of the people, then what use are the people at the end of all this?

This all goes a few steps further than just the energy groups. I started all this with a mention of economic sanctions. So how does this connect? Well, it does not directly connect, yet the elements all have their political influence. Consider the needs of Apple in Russia (at http://appleinsider.com/articles/14/03/07/russias-megafon-deal-with-apple-inc-guarantees-sales-of-750k-iphones-over-3-years). This was less than a week ago. So we consider the value of a little over 20,000 iPhones a month for the next three years and we should expect that this sparks the sale of iPad and iPod and other Apple articles. Do you think that the members in charge of Apple are hindered by morality? They have parked billions in taxable dollars away from the collecting hands of the IRS (and other taxing governments). The commission these people get from their deals in Russia will not stop them in any way. Whether there will be some ‘illusive’ distributor in India, Japan or China will not matter, the show (read sale) will go on. The same could be said for Dell. You think that they stop selling to Russia and leave their market share to ASUS? I think not! These are just two examples of the dozens of massively large companies doing business with Russian one form or another, not just from the USA, but also from Europe. In that same regard, there is not export without import, so as we see the boasts of economic sanctions to Russia by politicians, remember that when we see that when Russians show off their latest Apple gadgets on TV, the question ‘who runs America?‘ should remain firmly on your mind. In the end you should also remember that the entire situation is a lot more complex then I make it out to be.

As we focus on ‘Business before Morality‘ then remember the bills most of you have in your drawer still awaiting payment. We are nearly all of us overdue to the smallest or a larger extent and as some are more fortunate not to be one of the seven people living below poverty, consider that most of us are in the same place where 45% of us are, most of these people are all a little below getting by, which comes down to one step from a total nightmare life.

I am not stating it is a good place or an acceptable place; it is merely a realistic place. It is in this realistic place the question gets the volume it needs to have: ‘Who runs America?

 

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