Why Wall Street?

I've been struggling to wrap my brain around the Occupy Wall Street folks for a while now. This is partly because I originally viewed them as a variation on the Tea Party's themes. It seemed to make sense; both are angry about the bailouts and how Washington has embraced privatizing gains and socializing losses. The Tea Party's long-term solution is to drain the swamp by cutting off the flow of money. That isn't what occupy Wall Street is about at all, though.

The striking difference is most easily seen in the 99% photos. The central theme of the Tea Parties is clearly "government should do less with less" (and then argue about where and how much). This is just as clearly not something Occupy Wall Street is interested in. Their concerns and anger are much more personal, and they want something done, even if they can't quite articulate what.

For me, this was confusing. On the one hand, they don't want government doing less, and on the other hand they clearly see that government spending is boosting the bank accounts of the already wealthy and not actually solving problems. Why not occupy Pennsylvania Avenue? After all, it was the President and Congress who choose to pay the bailouts, even over the objections of Wall Street in some cases.

It didn't make sense to me. The easy answer would be to say that the Occupy Wall Street folks were stupid, but generally saying that misses the more interesting reality on the ground. So I kept asking questions and came across a few things that fit rather neatly into the puzzle. Mostly, I think it boils down to there being two completely independent conversations about the role of our government going on simultaneously in this country.

Jesse Jackson Junior recently "called for full government employment of the 15 million unemployed" in America. Some, especially conservatives and libertarians, are going to argue that we can't spend the money. JJ Junior, however, isn't talking to them, and he's not alone. A sizable chunks of the voices in the American conversation have already decided the money is going to be spent. The big argument, for them, is how it is to be spent.

JJ Junior wants the federal government to employ 15 million people. Obama wants to spend 447 billion on a new stimulus plan. He doesn't have the money yet, but the assumption is that this ball is in play and the Occupy Wall Street crowd is tired of not getting their share. Even some of my most liberal friends have batted around the size of the checks Obama could have cut for every man, woman, and child in the country if he'd simply disbursed the money equally across the entire nation. But they don't say this to refute the notion that the money should be spent; instead, they argue about how it should be spent.

From this perspective, the Occupy Wall Street movement and the 99% pictures are understandable. If you start from the assumption that we're going to spend almost 4.5 hundred billion dollars, then it is perfectly reasonable to ask why we appear poised to spend this money to support the jobs of people who are incredibly rich instead of those who are struggling. It also makes sense to vilify Wall Street and the banking industry while giving government a pass. Pennsylvania Avenue isn't the focus of Occupy Wall Street ire because they recognize that Washington picks the winners in this game. Their enemies are Wall Street because Wall Street has done a much better job in securing for itself a larger share of a finite pie of government largess. The struggle is likely to turn vicious (though probably not violent) because it is very much a zero-sum game with very short-term goals.

So far, conservatives have failed to jump into this fight. I think that's wise. The dangers of wide-spread federal employment should be fairly obvious by now, and time and math seem to support the Tea Party argument.

The danger for the Tea Parties, of course, is in being sidelined from the argument. For the Tea Party, the risk is probably worth it, and it should help them refocus their efforts on gaining control of the party apparatus used to select candidates for legislative positions. Executive offices are sexier, but the money flows through congressional assemblies. Choking off the money, and draining the swamp, will render the argument between Wall Street and its occupiers moot.

Egypt vs. Sudan?

This guy says Egypt may have serious issues by February. The country imports nearly half its food (by calories) and according to the CIA factbook its overall imports are nearly double its exports in US dollars. So they’re not facing an uncomfortable economic contraction; they’re facing mass starvation in the streets. With the rest of the world still wallowing in the economic doldrums (which Greece, or China, or California could suddenly turn into another crisis), tourism is unlikely to surge to the rescue.

Goldman and Totten take some comfort in pointing out how unlikely Egypt is to start a war with Israel over this. Frankly, I have no idea why they would. Israel is only one of Egypt’s neighbors, and two among them are richer in terms of natural resources and currently still recovering from internal conflict. To the west, Libya is still trying to pull itself together from the ousting of Kaddafi. There’s no guarantee the country isn’t going to fall further into civil war as the victorious tribes vie for top spot. Egypt could potentially shave off a few of the eastern provinces and enrich itself significantly.

However, the EU has a strong interest in a stable Libya pumping lots of oil. They’ll likely only welcome Egyptian interference as a last resort. Obama also has some interest in a stable, peaceful Libya as well, and Egypt probably doesn’t want to piss off the US (according to the CIA factbook, Egypt gets 10% of its imports from the US, and I suspect a lot of that is food). So Libya is a slightly less likely target of Egyptian aggression than Israel.

On Egypt’s southern border, however, is Sudan. Nobody likes Sudan on account of them engaging in a genocidal civil war against the populations of their southern territories, still in the process of separating from the northern part of the country. While the south got 80% of the oil reserves in the armistice, the north still retains other rich minerals and the primary port for shipping the south’s oil out to the world, as well as most of the refining capacity.

Animosity between Sudan and Egypt is literally ancient. Sudan doesn’t have many friends in the world. The nations most likely to protest are China and Japan, Sudan’s biggest customers for their oil. China, with but one aircraft carrier that’s not yet combat-ready, doesn’t have the physical means to intervene, and Japan almost certainly lacks the political will to do so. Even southern Sudan is likely to cheer Egypt putting its foot on its genocidal neighbor’s neck.

According to Wikipedia, Egypt’s army is four times larger than Sudan’s was before the country was divided, and Egypt’s only rival in the number of modern battle tanks is Israel. If Egypt can master the logistical difficulties of marching south across the desert, they could conceivably win both wealth, renown, and a boost to the nation’s moral and the prestige of the army in a short, victorious war against Sudan.

The alternatives appear to be returning hat-in-hand to the IMF, which maybe they’re willing to do after the elections in November? Also, the US could possibly placate Egypt by offering a lend-lease kind of deal on grain, though that may be less likely now that the summer's proven so brutal to our corn crop that the EPA is easing demands on ethanol use at American gas pumps.

Finally, while China may not be able to intervene militarily, they can do so financially. If Egypt only makes noises about invading Sudan, that might convince the Chinese that all the money they've sunk into the country is at risk. That could convince them to make low-interest loans to Egypt, possibly in exchange for preferential treatment for Chinese ships moving through the Suez Canal.

So the real question is, why did Egypt turn down an offer of assistance from the IMF? Was it pride, or politics, or were the IMF's terms unacceptable? How much will that change, if at all, after the elections in November? Will Egypt be more willing to accept aid from China or the US? Right now, if pushed to the wall, I'd peg the chances of Egypt going to war with one of it's neighbors at something like 20%, which isn't huge, but is a far cry from zero.

The World Turned Upside Down?

Some folks, I think, are thinking too hard about government agents committing acts of looting in Egypt:

How much of the looting is bona fide grassroots rioting and how much is false-flag activity by the cops? I don't know, and neither do you... But government agents are clearly involved with the spree, and it's very possible that they're stoking and spearheading it; defense of person and property, meanwhile, has fallen not just on the Army but on civil society, as neighbors form informal protective associations. If Robb's scenario turns out to be true, Egypt has inverted the Hobbesian story of the state: The police are spreading disorder and the voluntary sector is containing it.

What a wonderful world we would live in, if Hobb's theories had been true! But the truth is, for most of the world, the state is not a defense against predation, but merely the biggest of the predators. When it defends its citizens, it is not to keep them safe from predation, but merely to insure that it reaps the largest harvest. Those of us who live in nations where this is not true are blessed. As for the rest of the world, they hope only that the state will not take too much, and that they will be allowed a tiny portion of what it is they have earned.