Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

Archive for October, 2011

Anarchists vs Hooligans

Posted by butalidnl on 25 October 2011

It happens often enough: peaceful demonstrations that end up with a violent confrontation between some demonstrators and the police. The government (as well as some of the peaceful demonstrators) would blame it on ‘anarchists’ for infiltrating their demonstration and causing violence.

Well, sometimes the ones fighting the police are real anarchists, while on other occasions, they are just plain hooligans. What is the difference, and why should you care?

One obvious difference is what they wear. Anarchists wear black, and they often cover their faces with ski masks or something. Hooligans don’t usually wear black. They often have the ‘gangsta’ look to them, with the hoods of their jackets up. Anarchists tend to be more ‘punk’, with colored hair etc, while hooligans are more often skinheads.

Ideological and Political Differences
But there are ideological and political differences too. Anarchism is a left political ideology that believes that society would work better without the ‘state’. That people should organize themselves thru ‘civil society’ (in its broad meaning, not only ‘NGOs’) alone. The ‘state’ is the dictatorship of the capitalist ruling elite, which has a monopoly of violence and power to suppress the rest. It has soldiers, police, the courts etc to do that, and these are instruments of oppression.

Hooligans, on the other hand, are either rightists, racists, or even nihilists who are against everything. They do not espouse an alternative society, they just hate the one they are in.

Many anarchists live in collectives, mostly in abandoned houses; they live simple, alternative lives. They do not have an organizational structure, but anarchist collectives cooperate with each other by direct consultation.  For 99% of the time, they are peaceful, normal members of society.

Hooligans are organized into street gangs, in a system where the most violent ones are the leaders. When they are not rioting, they engage in petty crimes.

Anarchists engage in violence for political reasons. For them, violence is done against the instruments of the state (the police), and sometimes on symbols of capitalism (e.g. bank offices). They fight the police as a way of challenging the state’s monopoly of violence. They cover their faces as a sign of protest (since in Germany and some other countries, covering your face in public will get you arrested).  When they go violent, they attack the police at their strongest point, and make sure that they are in front of the demonstration, so that nobody gets caught in between. They attack weak points of the police only when they are trying to break through barricades that protect something like a WTO meeting.

Hooligans engage in violence because it is fun, and also because they can get something (literally) from it. They loot shops and burn private cars. They cover their faces to avoid arrest. They often strike when there are no police around. And they don’t care who gets caught in between; they often throw rocks from within the ranks of peaceful protesters.

I don’t share the Anarchist analysis of society, nor their vision. But I have a lot of respect for them. In 1991, I was with a ‘Study Tour of Eastern Europe’ organized for Filipinos. Among our hosts were the anarchists (‘autonomen’) of East Berlin. The East Berlin anarchists showed us a video which showed their recent assault on the neo-Nazis’ headquarters in Berlin.  The neo-Nazis had been terrorizing Berlin’s Asians, who were mostly Vietnamese whom the former communist government had brought in to work there. The neo-Nazis attacked all Asians they saw, including Japanese and Filipino.

It would have been scary for a Filipino to walk in Berlin in those days with the neo-Nazis on the loose. But the anarchists attacked the neo-Nazis directly, while the police and authorities had just stood by. The anarchists assault on the neo-Nazi headquarters in Berlin forced the neo-Nazis to permanently withdraw from the city.  When they were showing us around, I felt extremely safe – no neo-Nazi will dare harass me then. I learned not only that anarchists are migrant-friendly and environmentally conscious; they were also deeply aware of the history and culture of their city.

Now let us get back to the question of violence during demonstrations, especially in the case of Occupy Wall Street type of protests. It is possible to discuss with anarchists, and explain to them why they should not engage in violence. If your reasoning is valid, they will accept it. Or, they may convince you to include their violence as part of the demonstration’s program, it all depends. They may even help in policing your ranks against infiltration by hooligans.

But if the violence is caused by hooligans, the demonstration’s organizers should simply apprehend them and turn them over to the police. Talking to hooligans will get you nowhere.

Posted in politics, World Affairs | 1 Comment »

All Out War?

Posted by butalidnl on 23 October 2011

After the death of 19 Philippine Army Rangers in Basilan on 18 October, there are calls for the government to abrogate its ceasefire agreement with the MILF. After all, the 19 Rangers were killed in a treacherous attack by MILF fighters…

PNoy has decided to keep to the ceasefire, and to further investigate the matter, and file a complaint with the ceasefire International Monitoring Team.  He has also sacked some army officials in Basilan – the commander and the spokesperson.

In any case, the call for ‘all out war’  is totally out of proportion. Do the proponents know what they are talking about? I suspect that those calling for this know war only from movies like Rambo, or from playing video games. They don’t know that real war brings massive suffering to large numbers of civilians, and terrible economic damage.

Let us go back to that Basilan incident. It has been terribly hyped in the media, who agitate the masses to call for war in revenge against MILF ‘treachery’. But was the MILF really treacherous? The clash occurred 4 kilometers from a known MILF base, a base clearly demarcated in the ceasefire agreement. The army claims it was four kilometers away (though, in reality, they could have been closer). What was an undersized company (army claim, it could have been a full company) of heavily armed elite Army Rangers doing so close to an MILF base? And why did they not take the effort to notify the MILF that they were entering their area (as would have the been proper procedure) to chase after criminals?

Then there was the 8-hour clash in which 19 Rangers died, as well as 6 BIAF (Bangsamoro Islamic Armed Forces) fighters. This does not look like a ‘treacherous massacre’ to me. It looks like a clash of two well armed forces of roughly equal strength, which happened to end in a 19-6 death toll.  Why did the papers not report that the BIAF suffered 6 dead?

The military claims that they faced 500 BIAF fighters, while they were only 55. Fat chance! The BIAF fighters were probably not only 30 (as the MILF claims) but probably 60 to 100. If they were 500 facing 55 Rangers, the Rangers would have been overwhelmed, and all of the Rangers would have died. Rangers are good fighters, but not that good. They couldn’t survive a 10:1 battle against an enemy who is native to the area, and fighting to protect their homes.

Zamboanga Sibugay
What  about Zamboanga Sibugay? True, there were 6 PA who died there, but these died while attacking the MILF base in Payao. And the MILF says that they lost two BIAF fighters. The media did not only mentioned the BIAF casualties, they also failed to mention the artillery bombardment of Payao before and after the clash.

The pattern is clear: these ‘incidents’ happened near MILF camps, and the MILF/BIAF also suffered casualties. The only reason the AFP suffered more casualties is that the MILF were defending their home towns, and knew the terrain intimately. There are clearly elements in the AFP trying to provoke the MILF to break the ceasefire, to get them to attack AFP bases. So far, the MILF has not done that, and have limited themselves to defensive actions around their camps.

PNoy’s decision NOT to declare ‘all out war’ is correct. Nobody will gain from the resumption of hostilities. Let the ‘armchair generals’ rant in Facebook, Twitter and in traditional media. It is easy for them to call for war, when they are far away in Manila, and nobody they love or care about may end up in the line of fire.  But those who do have the responsibility should show their strength in upholding peace.

Posted in Philippine politics, Philippines, politics | Tagged: , , , , | Leave a Comment »

2012: The Other Prediction

Posted by butalidnl on 18 October 2011

On 21 December 2012, the “world as we know it will end.” The Maya seem to have made a similar prediction, but they were referring to physical things happening e.g. a polar reversal, or a rapid change in sea level, or something like that. (Remember the movie ‘2012’?). My prediction, on the other hand, refers to the world financial system. More specifically, I predict that on 21 December 2012, the postwar Bretton Woods financial system – which has the US dollar as the world’s reserve currency – will collapse.

The dollar-based world financial system is set to collapse. This we saw during the 2008 world financial crisis.  The main reason that it didn’t collapse then was that the whole world’s economy would have crashed, as in deep depression worldwide. Thus, all countries chipped in to prevent the system from collapsing.  In the years since then, many countries have de-coupled from the US economy to the extent that if the US economy were to collapse, they will get ‘only’ a recession, instead of a depression. Other countries will be less willing, the next time around, to go into deep into debt to save the US; and causing them to suffer from secondary crises e.g. Eurozone sovereign debt crisis.

The US dollar is the cornerstone of the world’s economy, and it is under pressure. This is because of the dire state of the US economy, with its very high sovereign debt, negative trade and exchange balances, high unemployment, falling housing prices, etc. The US economy has been kept running mainly because of extremely low interest rates for US Treasuries, which have to go up sooner or later.

Why 21 December 2012? Well, why not?, why not on that date? But I have more going for this date than any other, as I will now explain. There are enough reasons to think that A CRASH WOULD HAPPEN on or around this date.

Triple Witching
21 December will be the ‘triple witching’ date for world markets in 2012. Every third friday of a month, option contracts (as well as warrants and futures) for stocks, bonds, currencies, and commodities expire. That is the month’s ‘witching’ date. Every three months (March, June, September and December), quarter options also expire. And on the 3rd friday of December (which is 21 December in 2012), the year options, quarter options and month options all expire at the same time.

Trading on a witching day is a lot more volatile than in ordinary days, since holders of contracts need to settle their accounts at the end of the trading day. Depending on how widely options had been bought and sold for a category, the fluctuations in the price of the underlying asset can vary by several percentage points. With triple witching, it could vary enormously.

Lame Duck, Debt Ceiling
The US will be having elections in early November 2012, but the winners will be installed only in late January 2013.  There will be almost 3 months when the outgoing congressmen and senators (and perhaps even president) will still be in office. This is known as the ‘lame duck’ period.

If, for example, the tea party congressmen and senators lose big in November, they will try to maximize the 3 month lame duck period to pass all kinds of laws they like. They will also block everything they don’t want with even more energy. It so happens that there is an important piece of legislation that is practically scheduled to be passed during the lame duck period, and this is a law that would (again) increase the debt ceiling for the US government. The recently approved higher debt ceiling is expected to be reached around December 2012, meaning that the debt ceiling would need to be raised at that time. The Democrats had demanded this, so that the decision won’t be influenced by the election’s dynamics.

Thus, the US debt ceiling legislation will have to be passed by the lame duck congress in December 2012. The fight over this promises to be even more intense than the last time, which was then quite destructive (as a result, the US Treasuries’ credit rating was downgraded).

Window Dressing
During the course of the year, traders buy shares of small-cap companies, emerging market stocks and bonds, etc, and before the year ends they sell most  of these and buy prime stocks, mostly from the Dow Jones Index. This is called ‘window dressing’. Traders everywhere do something similar, because they want to report holding ‘stable’ stocks at the end of the year. The only difference is that in each country, they would have some local stocks which are a ‘must hold’.

Now, imagine what traders will do when presented with the prospect of buying Dow Jones stocks, which are almost sure to lose value come 1 January. What will they do in terms of ‘window dressing’? Well, the prudent trader would buy up Euro, Yen and Swiss Franc denominated stocks (e.g. Nestle, Toyota, Shell, or Siemens)  and bonds; in the process selling a corresponding amount of US stocks and bonds. This may be prudent for the individual trader seeking to protect the capital of their investor-clients, but if they all do this at the same time it will mean a massive sell-off of dollars.

Christmas and New Year
21 December 2012 will be the last full trading day before Christmas. On Monday, 24 December, markets will only be open for a half day, at most.

But Christmas 2012 will be a bit different from most others. For one thing, it will be end of a year of depressing economic performance, particularly with regards to employment.  By mid-December, there will be initial figures for Christmas sales and Christmas hiring; and both are sure to be disappointing (i.e. significantly lower than 2011).

To make matter worse, foreign Central Banks usually decide to reduce the percentage of dollars in their currency reserves at the beginning of the year (i.e. on 1 January). They’ve been doing this for the last few years already, reducing the percentage of dollars held in reserve by one or two percent every time. It usually leads to a slight deterioration in the value of the dollar in January, and then the effect usually dwindles. But at the end of 2012, with so many things going on, the prospect of yet another factor causing the dollar value to dip could really worry traders. They may take from the experience of 2006, when the dollar lost value starting early December in anticipation of the January dip.

External Factors
So far, I have mentioned America-specific (and date specific) reasons for the US economic collapse on 21 December 2012. Now, let’s look at the external factors.

The Euro will be stable. It may be hard to imagine now, but by the middle of 2012, the so-called Euro crisis will be over.  The Eurozone countries would have settled the Greek problem with a programmed partial default, and have saved the banks from bankruptcy. They would have strengthened the EFSF, and made sufficient funding arrangements to help countries in trouble.  They would have even amended the relevant treaties to strengthen the Eurozone’s financial health. Financial market speculators will avoid betting against the Euro, knowing that it has enough ammunition to defend itself.

With the Euro stable, it will only take a few months before US investors would realize that they stand to earn more if they invested in Euro-denominated assets. The dollar is sure to lose value as a result. A stable Euro will make the dollar a lot less attractive as a place to put money. Why invest in dollar denominated assets when the dollar will devalue 10% to 15% per year? Dollar devaluation will be a self-perpetuating process.

High Oil Price. When winter comes, the price of oil usually goes up, as demand for heating oil rises. During the whole of 2012, the oil price would have inched itself higher and higher, reaching from $130 to $150/barrel (if not even higher) by December 2012. The price of oil has an inverse correlation with the value of the dollar.

Political Events. Foreign countries know that America’s political ‘wiggle room’ during the lame duck period is limited. If a country wanted to declare war with its neighbor, or if people plan to rise in revolution against a state that is supported by the US, the lame duck period would also be a great time to do it.

China Sanctions? I expect that the Democrats will seize control of both Houses of Congress in the November 2012 elections. With this, the Democrats would push for legislation accusing China of currency manipulation, and compelling the government to impose extra taxes on chinese imports. The Chinese would be extremely worried about this, and may start reacting as early as December 2012.

All in all, there is every reason to expect a very significant fall in the value of the US dollar and a huge stock market decline on 21 December 2012.  The US financial system is so shaky that it won’t be limited to a mere ‘dip’, but will become a crash that will signal the end of the US dollar’s financial dominance.

All this is assuming that nothing apocalyptic of the type the Maya predict will happen.

You have been warned.

Posted in politics, World Affairs | Tagged: , , , , , , , , , , , | 2 Comments »

Feeding 9 Billion

Posted by butalidnl on 16 October 2011

This blog post is my contribution to “Blog Action Day 2011 (#BAD11)”. The theme this year is ‘food’.

The world is full! There are 7 billion people on it, and it will become 9 billion by 2050. Help! We will not be able to feed them all!

No need for alarm. We can quite easily feed 9 billion people. Here are a number of strategies that not only will enable the world to feed 9 billion people, but it will also enable us to return some forest lands to nature. Here they are:

Minimizing Eating Beef, Shift to Meat with Lower Feed Grain Ratios
Animals consume grain. Instead of being consumed by humans, grain is fed to the animals. We eat the animals (meat), but there is a loss in the process.  Cows eat 8 times their weight in grain; while pigs only 5 times. So, shifting from beef to pork would tend to save on grain.  Cows also eat grass, though, and this doesn’t  ‘waste’ grain. But the present number of cows greatly exceed the number that could live out of grass, so they are fed grain as a result.

The rising price of grain in the world market makes producing beef more and more expensive. At a certain point, wheat prices will outstrip the growth of beef prices (beef prices have to be at least 8 times the price of the grain they eat, to break even) so that it would no longer be profitable to feed cows grain. When this time comes, beef will be limited by the amount of grazing land.

Shifting to eating meat with a lower feed grain ratio (FGR) will always result in freeing up more grain for human consumption. Eating fish like tilapia (fgr of 2) or chicken (fgr of 2.5-3), would even be better than eating pork (fgr of 5). Eating only plants (fgr of 1) would be best, but we couldn’t expect to convince all people to become exclusive vegetarians (yet).

The world could voluntarily shift to meat with lower feed grain ratios; or, if they wait a while, they will be forced by the market (i.e. in the high price of grain, and thus meat) to make the shift anyway.

Promote Urban Farming
There is a lot of underutilized land in urban areas.  Most houses have backyards which could be devoted to growing food.  Houses and apartment blocks could be built with flat roofs to make them suitable to be vegetable gardens. Also there are many commercial and industrial buildings and yards which could be planted. People could opt to plant vegetables, if they have the time to pay attention to them.  If they have little time to tend to plants, they could plant fruit trees or root crops, which need less attention.

It’s amazing how many people are idle due to unemployment, but who do not do something so fruitful and which would earn them money like backyard farming. Part of the reason behind this is that there are no institutions which encourage and support them to do some farming. And the marketing of the produce may also be a problem, with people being used to buying vegetables and fruits from shops.

Governments could stimulate urban farming by setting up institutions which would provide the seeds, equipment and expertise needed. Governments could also help to set up neighborhood markets for produce.

Plant Food Trees at Edges of Forests
Reforestation need not involve planting ‘forest’ type of trees.  At the edges of a forest reserve, it is a good idea to plant money-making trees. This could be rubber (if climate is suitable), nuts (cashew, walnut, etc.) or fruit trees. These trees are as good in holding the soil and water as ‘forest’ trees, and they will be defended by those who planted them (and who depend on them for income and food) from people who want to cut them down. This will protect the inner area of true forest trees.

A lot of the land that is presently used for cattle ranches were formerly forest lands, and which would be very suitable for food trees.

Stop Producing Biofuels
Biofuels are the ultimate in wasting food. Food grains, oils or sugar are used as the ingredients for various kinds of biofuels. This should stop. All biofuel production eats into food production in one way or the other, and therefore should be stopped.

It is obvious when corn is processed into bio-ethanol.  The corn does not get consumed either by animals (which will eventually be eaten as meat) or directly by people, because it is being made into fuel for our cars. Why not just have more efficient cars? Why don’t we bike or walk more? Is riding a car more important than feeding people? Making bio-ethanol from corn or sugar cane wastes food.

Other kinds of biofuel production also reduces the overall supply of food. Take the plan to turn farm waste (i.e. the part of the plant without the grain/food) to fuel. If this is done at a massive scale, the result will be an enormous drop in the fertility of the farm lands; since the farm waste would otherwise have returned nutrients to the soil.  When you harvest the farm waste, you are depriving the soil of nutrients, resulting in lower future crop yields.

Turning used cooking oil into biodiesel is another case. Used cooking oil could be transformed, using a different process, into animal feed. And this would mean that less grain would be used for feeding animals, since they would be eating feed made from processed used cooking oil. Some people say that used cooking oil, when turned into a feed additive, is carcinogenic. Perhaps. But this is only a reflection on the state of technology; with a bit more research, it should be possible to produce non-carcinogenic animal feed supplement from used cooking oil.

Even making biofuels from wood is an indirect problem for food production.  Because the question is: where is the land that they would grow the wood in? Will it be from what are now ‘regular’ forests? I doubt it – it would be too expensive to do so. Much cheaper would be to convert some croplands and plant trees there for that purpose. So, those croplands could no longer produce food because they are producing wood.

Feeding 9 billion people could thus be done without having to make major political moves or technological discoveries. All it needs is a bit of creativity, or the pressure of ‘market forces’.

Posted in environment, World Affairs | Tagged: , , , , , , , , | 1 Comment »

New American Social Contract?

Posted by butalidnl on 12 October 2011

The OccupyWallStreet protesters actually have an issue, but they don’t fully realize it yet. “We are the 99%” is not merely a catchy slogan; it is also quite sharp as an issue. The thing is, people in America are reluctant to attack the wealthiest 1% because these people symbolize “the American Dream” – that ordinary Americans can work hard and become wealthy. The dream is just that – a dream. The truth is that the only people who started outside the 1%, and who are now in it, invariably come from the top 10% wealthiest to begin with. Probably the only exceptions to this are some showbizz  and sports stars. But more and more of the top 1% were born into that class. Wealth in the US is now largely hereditary, but people still have the illusion that it is not.

Having a hereditary wealthy class is not an unstable situation per se, nor is it necessarily a bad thing. Hereditary wealth is a stable institution in most of Europe (though with the glaring exceptions of Greece and Russia). The secret to this stability lies in two things. First, the rich don’t constantly flaunt their riches (like riding around in stretch limousines, or having huge villas in plain sight). Second, the political system makes sure that the rest of the population operate in a more or less meritocratic, welfare system; meaning that most people who excel and work hard are rewarded well, and that the rest have a stable minimum standard of living. None of this exists in America, and that spells trouble for that society. People don’t mind that others are rich, even extremely rich, as long as they themselves know that if they work hard, they will be rewarded for it.

The wealthy in France recently petitioned the government to raise taxes on them. The Royals of England, the Netherlands and some other countries cut their budget when their countries go through hard times. The rich agree to pay an extra 1% wealth tax without whimpering.  Cabinet officials in Spain took a pay cut before asking others to do so. Society accepts that they are rich, and the rich in turn understand that they should contribute their fair share.

Such an arrangement is stable.

The wealthiest 1% of America does not only NOT PAY their fair share; they have arranged (through political lobbyists etc) to pay MUCH LESS (proportionately, of course) than ordinary people. They own more and more of America’s wealth and pay less and less to society/government. Instead of the European principle of :”The strongest shoulders should bear the heaviest burden”, in America the strongest (wealthiest) have passed the heaviest burden to the rest of the people.

The idea that taxing the “1%” more will be bad because this will hurt business hiring falls flat on the basis of recent experience. Big businesses (which are owned mostly by the ultra-rich) are now sitting on trillions of dollars in cash, even while millions of people are unemployed. Taxing them a bit more will not hurt  hiring. In America, the rich don’t utilize their enormous profits to create jobs – they just hoard the money. The ‘trickle down’ theory of economics is a myth that is propagated by the wealthiest people.

Change the Myth
The real problem of America lies with the myth of the American Dream. It should simply be discarded, and replaced by a new Social Contract between the (hereditary) rich and the rest of the people. As long as the Dream exists, the richest will continue to believe that their wealth and privileges are a reward for ‘hard work’.

The problem has so far been aggravated by the US dollar’s monopoly over world finances. Despite its present problems, America is still able to cobble along because it siphons away resources from other continents through its financial monopoly.

I believe that not only is the day of the “American Dream for the 1%” coming to an end, but that this would be paired with the end of the US dollar’s financial monopoly. OccupyWallStreet can start protesting now, but its ultimate demand – which would be the establishment of the new American Social Contract – will not arrive until the rich can no longer use the rest of the world’s money to keep things going.

The future belongs to the “Occupy” protesters, who DO represent the “99%” of America. I hope that that future comes sooner, rather than later.

Posted in politics, World Affairs | Tagged: , , , , , , , | 2 Comments »