WTO Caucus

Today in class we're doing a WTO Caucus session, so I am representing the RNC, and this is my platform on the issues at stake:

Good Afternoon, I am here to represent the RNC in this conference, and these are my positions

Resolution 1: We are not opposed to free trade of automobiles due to manufacturing plants owned by Toyota, BMW and a number of other foreign companies in the United States. Competition from foreign car manufacturers has led to greater consumer choice and a rise in the quality of automobiles in the United States. Furthermore, lifting of barriers on automobiles will also allow for US automobile companies, namely Ford and GM, the ability to compete in the global market, helping American businesses and workers. Regarding free trade of agricultural goods, the RNC does not currently support this proposal, due to concerns over what would be brought into the US, along with the potential to hurt US farmers. Therefore, we can agree on point 1, but not on the second point.

Resolution 2: We do not take issue with the proposal of non-tariff barriers on automobiles and financial services, however NTB’s in regards to agriculture are unacceptable, due to the negative economic impact this would have on American farmers, and the fact it would undermine US farmers. While we would like to move towards free trade in the near future, we cannot come to an agreement at this time over the removal of NTB barriers for farming.

Resolution 3: We do not have an opinion on resolution 3, and the status of GMO products being banned from NTB’s is not a priority for the RNC. This question, in the US, should be left to the FDA and state governments to determine the status of GMO products.

Resolution 4: Regarding subsidies, again we have an issue with lifting restrictions on agriculture products from outside the United States. Furthermore, given the current struggles facing US farmers, we cannot allow them to be exposed to the global market. Furthermore, given the complexity of various agricultural subsidies, their removal is virtually impossible. Also, it would be political suicide for both Republican and Democratic politicians, especially in rural areas, so any farm bill removing subsidies would be immediately voted down. Therefore, the RNC cannot endorse any proposal to remove agricultural subsidies, both as a matter of policy and political reality.

Resolution 5: The RNC supports the proposal of allowing for the free flow of capital investment across borders. This would help to integrate markets further, leading to increased global cooperation and trade. With the prevalence of multinational corporations and financial institutions only increasing, it is logical to work to connect these institutions through the market, and expand trade and commerce even more, benefitting all involved.

Resolution 6: The stability of the United States dollar is one of the most important pillars in the world economy. The dollar is traded on the market today, and its value compared to other currencies is determined by the market. The RNC does not object to the dollar being in free float on the market, however the United States has to reserve the rights to set its own monetary and fiscal policies and the ability to revalue the dollar when necessary.

Resolution 7: Trade has benefitted the US and its economy. The flows of goods, services and ideas both in and out of the United States has led to America’s economic prosperity. We do wish to commit ourselves to the expansion of free trade by 2020, however. Two potential deals outside of the WTO which would help expand trade are the Trans-Pacific Partnership and the US-EU free trade deal. Therefore, the RNC is committed to advocating for free-trade agreements and the increase in worldwide trade both inside and outside of the WTO. 

Russian Economic Issues

Today, the Russian ruble's value plummeted, losing nearly 9% of its value before rallying. At the end of the day, the ruble lost 'only' 4% of its value. While President Vladimir Putin has been enjoying widespread popularity in Russia due to the war in Ukraine, economic troubles in Russia could spell trouble for his regime. The ruble had already taken a hit due to recent economic sanctions following the war imposed by the EU and United States, taking the side of the Ukrainian government in the conflict. However, the ruble's troubles are not due to the war, but instead because of the recent drop in oil prices. Russia is one of the world's largest oil exporters (#2) and the value of a barrel of crude oil has significantly dropped in the last year. Russia's economy is heavily dependent on fossil fuel revenues, so the ruble's value has fallen due to the economic uncertainty surrounding global oil prices. A lot of this has to do with new technology used to extract shale oil and tar sands in the US and Canada, which have led to a large increase in oil supply, and cut the dependence of the US on foreign oil supplies. Also, OPEC (Russia, Canada and the US are not members) has not decreased its production of oil, which contributes even more to the high supply of oil in the global market. In the US, this has also caused gas prices to drop in recent months, but it has adversely affected many resource-rich countries, and is a good example of the resource curse and the over-reliance on fossil fuels in the economies of many nations.

The US and Climate Change Politics

One of the biggest issues in US climate change policy is the fact that climate change is an international issue, and therefore needs to be negotiated on the world stage. However, the United States is very nationalistic in the sense that it does not like to be held to account by international bodies, such as the UN. While Presidential administrations have been looking for international solutions to the issue of climate change through acts such as the Kyoto Protocol under Clinton, there is very little chance that the US will ever ratify either Kyoto or a treaty which is similar, regardless of content. While the absolute insistence of protecting US sovereignty is one issue, another is the feasibility of several climate change agreements, such as the recent Obama-Xi deal where the US and China pledged to cut carbon emissions. For one, the odds of the American government passing legislation (since this isn't a treaty, only legislation is required for now) are minuscule, both due to Obama's weak political position and the Republican Party's unwillingness to act on climate change due to the perceived threat of any legislation to US jobs, and the chance that China could easily renege on the deal. Therefore, it is unlikely that the US will, in the near future, be willing or able to pass any sort of international or domestic legislation that deals with climate change.

Environmentalism in US politics

One of the most controversial issues in environmental politics today is the Keystone XL pipeline, which would replace an existing pipeline, but has become a major political issue due to the environmental concerns associated with its construction. The proposed extension would run from Alberta, Canada to Nebraska, and then down to the Gulf Coast to transport oil overseas. However, the pipeline has been blocked by the Obama administration due to the proposed pipeline running through environmentally sensitive areas in Nebraska, and through a Sioux reservation in South Dakota. The Obama administration can block the pipeline due to the fact it runs across an international border, so it requires presidential approval. At the same time, the pipeline has become in effect a proxy battle between Republicans and Democrats over the issues of climate change and the merits and weaknesses of its economic and environmental impact. Republicans and some centrist Democrats support the proposal due to the promise of jobs it would bring (roughly , while the President and the liberal wing of the Democratic party oppose the pipeline due to their concerns over the environmental impact. The pipeline has been an issue over the last two election cycles, and is currently the central issue in the Senate election in Louisiana. Senator Mary Landrieu (a Democrat) is a supporter of the pipeline due to the oil industries size in Louisiana, and has been trying to bring up a vote in Congress on the issue before her runoff election in December. However, in recent days the Obama administration has indicated it would veto a pipeline, in effect leaving Landrieu out in the wind.

Foreign Aid and Foreign Policy

One of the biggest debates over US foreign aid is how the money is spent, and where the money is actually going. In US politics, the bogeyman of foreign aid is often used to justify cuts in the US budget of wasteful spending, with Rand and Ron Paul being probably the two biggest proponents of this. However, US foreign aid has been used effectively and for good causes recently, just look at George W. Bush's AIDS policies for Africa. In both of the articles we have read, the authors write about whether or not foreign aid works. However, looking at US foreign aid today, the top 5 countries who receive US foreign aid (Israel, Afghanistan, Pakistan, Iraq and Egypt) are not receiving foreign aid exclusively for development. Most of this aid is for the purpose of anti-terrorism efforts and strengthening the militaries of these nations. Israel does not need any development aid, for example, while Pakistan and Afghanistan do need development aid, yet the money sent there is very poorly managed. The point of what I am trying to say is this: while the idea of spending foreign aid to help developing nations grow is in fact US policy, it is not the main tenet of US foreign aid: military aid and support in the War on Terror is. And here I would say that while we are giving money to these countries (Afghanistan and Pakistan) for economic aid as well, they have both squandered this money and are very unreliable partners in the War on Terror, so I would agree with Easterly and the Pauls that our foreign aid is in fact misspent and poorly managed, and needs to in the least be reviewed.

French Political Mess

In my book reading, I read about the state of the Eurozone and how Germany has become increasingly dominant, at the expense of France. France has become second fiddle, mainly due to the complete mess in its political system. The current President, Francois Hollande, is widely recognized as an incompetent, and his approval ratings are in the teens. His economic policy has been disastrous and France's stagnation has brought a feeling of malaise in the country. However, his opponents could be even worse than he is. His main competition on the center-right is Nicolas Sarkozy, his predecessor who lost to Hollande in the 2012 election. Sarkozy was arrested earlier this year over allegations of illegal campaign contributions from former Libyan dictator Muammar Qaddafi in his 2007 election victory. He has denied wrongdoing and is still seen as the center-right's favorite. However, one of his competitors, Francois Fillon, allegedly contacted Hollande's chief of staff to speed up the case against Sarkozy to benefit his candidacy (the third center-right candidate, Alain Juppe, was convicted of corruption in 2004). This new development makes the center-right candidates look as bad as Hollande, and leaves an opening for the far-right candidate, Marine Le Pen. Le Pen has effectively capitalized on the incompetence and corruption of the two main parties, and has a real chance to win the next presidential election in 2017. If a far-right, anti-EU populist such as Le Pen wins the Presidency, it could be even more devastating to the EU than the Greek crisis ever was.

Euro Book Review

David Marsh’s book, The Euro: The Battle for the New Global Currency, was not what I had expected. The book, which I thought would deal more with the current Eurozone crisis, instead was more of a historical piece. Marsh touches on the historical aspects of European currency unions, such as the Gold Standard, the Latin Monetary Union, and various other attempts to have a united European currency, tying in the past attempts of European monetary union with today’s attempt. Marsh’s analysis on the Eurozone focuses much more on the nuance of the Franco-German relationship, and the historical animosity between the two. Also, Marsh tends to focus on the personal and political decisions made which led to the Eurozone, especially by two men who had little knowledge of economics or monetary policy, French President Francois Mitterrand and German Chancellor Helmut Kohl. These two, who led their nations from the early 1980s until the mid-late 1990s, were instrumental in laying the ground for the European Monetary Union. Marsh also focuses on the reasons behind German dominance of the Eurozone, which starts with the rebuilding of the German state after World War II, and Germany’s desire to have a stable, powerful new currency, the Deutsche Mark, in order to avoid the disasters of hyperinflation like in the 1920’s, one of the causes of the Nazi rise to power. Kohl, and most of the German public were immensely proud of the Mark, and saw it as a pillar of the postwar, democratic German state. Kohl, however, was convinced to give up its commitment to the Mark in exchange for French support for German reunification in 1989. German reunification, a central event in Marsh’s book, can be seen as one of the catalysts of monetary union, since it required the Germans to join the European currency. Mitterrand only accepted reunification due to the promise of monetary union, while British PM Margaret Thatcher was vehemently opposed to it, part of an overall anti-European policy. Marsh is not the biggest fan of Thatcher, and refers to her as a right-wing populist, but implies her decisions on rejecting Eurozone membership were prescient. Thatcher’s policy was based in British nationalism, of which her vehement opposition to joining the European Exchange Rate Mechanism (ERM), the forerunner to monetary union, was only a small part. Thatcher eventually relented to joining ERM, but her stubbornness over Europe helped cause her downfall, led by the pro-Europe wing of the Conservative Party. Britain soon left ERM, however, following the inability of the Pound to stay within ERM limits of exchange rates. The resulting devaluation of the Pound sterling also later cost PM John Major and the Conservatives the next election, however the economic fallout was not as bad as it could have been.

In 1992, the Maastricht Treaty was signed, which committed its signatories to adopting the Euro, with the exception of Britain and Denmark. The commitment to adopting the Euro led to a series of actions, mainly through the ERM, to help set parity among the Eurozone nations and avoid economic turmoil. Marsh’s view of the ERM and its subsequent role in the creation of the Euro rather negatively, since many nations who were part of the ERM and the subsequent Eurozone had managed their finances incredibly poorly. Marsh specifically cites the French and Italians as culprits among the main Eurozone members, without mentioning the Greeks at first. However, when it comes to the Greeks, who lied about their finances to gain entry in the Eurozone, it was the first in a set of dominoes to fall. It should not be all that surprising, that the Eurozone nations did not, and could/would not completely align their finances to Eurozone standards. Plus, the incentive of a new, strong currency, backed by the powerful Northern European economies, gave less wealthy Eurozone nations essentially carte blanche to do what they wanted. In particular, peripheral nations in the EU (ex: Spain and Greece) used the Euro as a means to an end so they could raise their standards of living to those of Northern Europe, but at the cost of large scale public debt, which their governments were not concerned about in the early days of the Euro, but that came back to bite them following the 2008 economic recession. Germany, however, managed its finances much better, and following labor reforms in the early 2000s, was not beset with the high unemployment that affected a number of Eurozone nations following the recession. Germany’s effective weathering of the recession, coupled with its export driven economy, allowing it to take an even more central role in the Eurozone, to the point where Angela Merkel is now seen as the EU’s de facto leader. Also, Germany’s rapid rise in the EU, especially following the recession, came at the expense of France, whose economy has had a poor recovery following the recession. France’s position in the Eurozone has become second fiddle to Germany, with Merkel dominating French Presidents Sarkozy and Hollande on European policy. If there is any lesson to be learned from Marsh’s book, it is that Germany’s dominance of the Euro is centered on its national requirement to have a strong currency, and an export-driven economy, allowing it to maintain its leading position in the EU. 

End of QE

Today, the Fed announced that it would end quantitative easing, a policy they enacted in order to enlarge the money supply following the recession. However, interest rates will remain low. This policy, which was enacted to help stimulate the economy and consumer spending. The policy, which has been heavily criticized, was ended due to confidence in the economic recovery. For economists such as Paul Krugman, the end of QE would likely be lamented, due to his emphasis on stimulus from the federal government through both fiscal and (in this case) monetary policy. His likely argument would be that QE has ended too soon, especially given recent economic stagnation. Also, given the middling recovery the US has gone through since the recession, another Krugman argument would be that the response at first was too mild, and should have been much more comprehensive and radical. With the end of QE, however, the government and the Fed are both trying to instill confidence in the markets and consumers that the US has made a recovery, it may be a little premature, especially given all the economic issues which are in the immediate future for the US, namely the debt and Congressional gridlock's effects on federal fiscal policy, which has become a major issue in the Obama years. While I am not a personal fan of QE, if I looked at it from the Fed's/Krugman's perspective, I would believe it is ending too early, and upcoming economic uncertainty could easily slide the US back into recession.

IMF and Bailouts

One of the main critiques of Stiglitz and his compatriots is that the reason the IMF has to be called in is the financial mismanagement of countries which require a bailout. I am personally sympathetic to this view, since the IMF, in an ideal world, would not need to exist. However, their existence is necessary due to the poor monetary situations in many nations. For example, a country such as Greece, which has poorly managed its economy for decades, needed an IMF bailout and the conditions which came with it. However, the resulting social instability, a byproduct of the bailout, was used as a criticism of the IMF. The rise of extremist political parties, such as Golden Dawn and SYRIZA, could be directly laid at the feet of the IMF. However, none of this would have happened if the Greeks did not manage their finances so poorly and lie to gain admission to the Eurozone. While IMF-imposed austerity is often characterized as unfair on the nations who are on the receiving end, they often have no one to blame but themselves. Greece may be example A, but you can point to nearly any country receiving an IMF bailout and immediately question their judgment. When persons such as Joseph Stiglitz characterize the IMF as unfair and biased, they may have legitimate points about its Western slant and often draconian impositions. However, when it comes to pointing out the reasons why these conditions of austerity, high taxes and economic restructuring needed to happen, the critics fall silent

The Sorcerer and the Stripper

Since this seemed to cause a minor stir in class the other day, I think it at least deserves some background information (plus I love Argentinian history). Juan Peron, the former dictator of Argentina is today known to most US audiences as the husband of Eva Peron, Evita, his second wife. Juan's policies, which were economically protectionist and populist, appealed to the lower classes of Argentina and organized labor, but the opposition of the conservative elites and military led to his overthrow in a coup in 1955 and Peron was exiled to Spain. Visiting Panama, he met his third wife, Isabel, who worked as a dancer in a nightclub, and brought her back to Madrid and married her. While in Madrid, she met Jose Lopez Rega, an Argentine Police corporal who had an extensive background in the occult and esoteric movements. Rega therefore gained influence over Isabel, and indirectly Juan, whose health was failing. When Juan returned to Argentina as President in 1973, the country was de facto led by Rega and Isabel, due to Juan's age and ill health. Rega himself was also connected/the leader of various right-wing death squads, and was connected to the murder of various left-wing Argentinian activists, the Montejurra Shootings in Spain, and the secret Italian Masonic Lodge, P2. So when Juan died in 1974, these two were now de jure leaders of the nation, where a civil war was being waged between the right and left, and Isabel and Rega led the right wing forces, leading to a multitude of human rights abuses, mainly through Rega's Argentine Anticommunist Alliance (AAA). However, the two proved to be totally incompetent at both waging war and managing the Argentinian economy, which led to Isabel's overthrow by a military junta, who were even more brutal at putting down the war. Rega died in an Argentinian prison in 1989, while Isabel currently lives in Madrid, and was arrested there in 2007 to be extradited back to Argentina (however this warrant was denied),

Krugman and Panics

Paul Krugman is an interesting character. While he is without a doubt a very smart economist, I personally am not a fan of him. I think his economic ideas are often too intertwined with his partisan attacks on Republican politicians, especially in his New York Times columns, but by reading the editorial page of the New York Times, I should expect that sort of thing. But I digress. In his book The Return of Depression Economics, Krugman lays out probably the biggest problem, in my opinion, about today's global economic system, which is the fear of contagion. In this chapter, which discusses the Asian crisis of the late 90s. Krugman underlines the fact that what started as Thailand poorly managing their debts and deficits, quickly spread to the rest of Southeast Asia. This economic catastrophe, which Krugman compares to the Great Depression, was abated due to the intervention of the IMF, yet it still forced Indonesian president Suharto from power. However, my point about the ills of contagion were what took place in the last few years, with the EU and the disastrous economies of Southern Europe, where debt-to-GDP was very high, the economies were too dependent on certain industries (tourism, for example), and frankly, none of these countries should have been in the Eurozone. But at the height of the crisis, the fears of a Greek exit from the Eurozone, or a Greek default, and the effects it would have on the economy were profound. Mainly, the fear was the Greek calamity would spread to either Spain or Italy, which are among the top 5 economies in the EU. Greece defaulting or leaving the Eurozone would have been bad, but not the worst thing in the 'big picture.' However, if either Spain or Italy had left or defaulted, then the Eurozone and quite possibly the entire EU would have gone bottoms up. Essentially, what I'm trying to say, and what I believe Krugman is also getting at, is in today's global economy, the main goal whenever there is an economic crisis, recession or the like, is containment. Stop the bleeding, and stop it quickly. This is exactly what the US did in 2008 with the bailouts, and the IMF did the same thing in Southeast Asia. Essentially, there is no room left anymore where people can actually allow for the free market to run its course in a major recession or depression. Sure people can talk about it, but with their backs to the wall, it likely that will never be the case again.

North Korean Uncertainty

In recent weeks, there was a large wave of speculation about the whereabouts of Kim Jong-un, the totalitarian dictator of the world's worst nation, North Korea. Kim had not been seen in public since early September, and had missed a few major events in North Korea, which led to questions about his continuing role in the state and his health. He had been rumored to be suffering from gout, obesity, fractured ankles due to the obesity, and a myriad of other illnesses. While he reappeared in the news today (albeit with a cane), it put to rest much of the extreme speculation about his health, and whether or not he'd been deposed. However, the questions about his health and status were intertwined with those relating to the role of North Korea in the 21st century, namely regarding its economy. As the economy globalizes more than it probably ever has before, namely through products such as telecommunications, social media and the like. Also, Chinese apprehension towards North Korea's bellicose attitude has increased in recent years. That, coupled with a sense that Chinese backing of North Korea is not yielding any benefits, has increased rumors of regime change and reform in North Korea, with particular emphasis on it transforming into a China-esque state-capitalist regime. However, this is pure speculation at its core, and with Kim's recent reappearance, it its likely just a result of health problems on his part. However, the question of North Korea and how long its totalitarian Stalinist dictatorship can last is one of the most important political questions today.

FDI and China

Chinese foreign direct investment, or FDI, has skyrocketed in recent years, due to their economic  boom over the last few years. However, this sort of investment has been viewed with suspicion by many Western nations, such as the United States. Chinese FDI is focused on two particular sources, namely the financial sector and natural resources. Investment in natural resources is paramount to Chinese success in order to continue as an industrializing nation. China needs oil, coal, iron and many other raw materials to continue its industrialization. Chinese FDI, especially in developing nations, often results in Chinese-built infrastructure and significant investment in these third world nations. Sub-Saharan Africa is often the recipient of this investment, which leads to American fears that China is, in effect, buying up political capital in the developing world at the expense of the United States. Financial investment is another story, since it very diversified. Hong Kong, the main site of Chinese financial investment, is currently undergoing political upheaval, which has brought a great deal of uncertainty to Chinese and foreign investors in the region, since any type of uncertainty often causes a downturn in the market. However, the main question about Chinese FDI is what are its goals? Chinese politicians, who are very closely intertwined with its business leaders, and what they hope to gain out of it. Is China attempting to gain leverage and footings within the international economy, or is the party just trying to line its own pockets?

MNC's

In today's political climate, the multi-national corporation, or MNC, is an extremely controversial topic throughout the world. In the West, MNC's are regularly derided for moving their jobs outside of their country of origin or their main corporate base in order to pay fewer taxes. If one is to take the side of the MNC's, that is due to their belief in Milton Friedman's statement that corporations owe nothing to anyone besides their shareholders. However, proponents of holding corporations to account often focus on two main issues: taxation and workers rights. Corporations will often register their businesses in nations which offer extremely low corporate taxes in order to pay less. Senator Carl Levin wrote an op-ed recently that took Apple to task for moving their corporate headquarters to Ireland from the U.S. While Levin believes that Apple is only looking to avoid taxes, they would see it as making more profits to please their investors. Also, even though Apple is a company founded in the United States, as an international company with a global reach, it does not have an absolute obligation to stay in America. However, workers rights are much more controversial, since many U.S.  companies will move their manufacturing centers to places with limited workers rights and safety precautions in order to cut down on costs, Apple and Nike being two good examples. So the question about MNC's must be asked, if they are only in it for the profits, then what is the overall cost of that to both developed and developing nations?

Occupy Central

We discussed this quite a bit in class on Tuesday, though since then it appears the protests in Hong Kong have escalated, with the protesters now demanding the resignation of the city's chief executive, Leung Chun-ying. Leung is recognized as being a Pro-Beijing politician in Hong Kong, and has also been accused of being a member of the Communist Party, despite being officially nonpartisan, If Leung does not resign, the Occupy Central movement will occupy main government buildings in the city. Also, while the movement itself is being praised throughout the Western and democratic sections of the world, the response of the Chinese government has so far been mostly an appeal to stability, with a few carefully worded and vague threats sprinkled into the official language. Another interesting dynamic is that today, October 1st, is National Day, the founding day of the People's Republic of China. It presents an interesting contradiction between the protests in Hong Kong, with its democratic legacy from British rule (Macau also has a similar system as Hong Kong, following the transfer of power from Portugal to China in 1999). One possible affect could be a spillover of these protests into Macau or mainland China, though right now that appears unlikely, though if the protests continue to grow over the next few days all bets would be off.

On Protectionism

Protectionism, as a political policy, is not a hard case to make. All a politician has to do is complain about jobs being sent overseas, and if he or she is from a rural region, promise constituents subsidies up the wazoo. However, as an economic policy, protectionism does not help out nations in the long run. In a report from the St. Louis Federal Reserve, they point to protectionism as a hindrance to economic growth, especially affecting low-income Americans due to restrictive tariffs on goods such as cars, sugar and clothing. By imposing tariffs and trade barriers on foreign goods, Americans are therefore forced to pay costs, which are not truly set by the market. Take sugar for instance. Current sugar subsidies have been in place since the Great Depression, and artificially inflate the prices of the goods in order to keep farmers back then from going under, but now it has morphed into a protectionist policy to prevent large-scale foreign imports from displacing US sugar, mainly from Central and South America. However, attempting to change protectionist US policy for agriculture often ends in complete failure. For example, earlier this year the Tea Party attempted to block provisions in the farm bill (which sets US agricultural policy) which allowed for farm subsidies to continue for the next few years. However, their goals to end farm subsidies were blocked on all sides. Democrats were unwilling to allow cuts to food stamps (also part of the farm bill), which the Tea Party also wanted to happen. Non-Tea Party Republicans were unwilling to cut farm subsidies since farmers are a significant part of the party's base in rural areas. Therefore, Tea Party attempts to cut farm subsidies were thwarted. While not personally agreeing with the Tea Party myself, it's striking how difficult it is to either cut or reform subsidies which are, in effect, bribes to constituents. While agricultural subsidies are truly blocking access to free markets and hindering true competition on a global scale, the political reality about trying to change agricultural policy basically makes it impossible. From both a globalization and free-market policy, nobody really wins except for the subsidized farmers, since consumers are stuck paying a higher price, and farmers from developing nations are left out since they cannot break into the global market, and effectively are stuck being subsistence farmers.

This'll be my last post about Scottish independence, which did not succeed last Thursday when the Scots voted 55-45 to remain in the United Kingdom. It appears that the economic and political uncertainty which would have immediately followed the yes vote was enough to dissuade voters about voting for independence. Also, the idea for secession seems to have spread to other nations in Europe, namely Catalonia, the Basque country, Flanders, and the Northern regions of Italy. Unlike Scotland, however, these regions are more likely to vote in favor of secession, due to their linguistic, political and economic divisions with the rest of Spain, Belgium and Italy, respectively. Unlike Scotland, these regions are in fact the economic powerhouses of their nations, and would likely fair rather well on the global stage. They would be able to compete in a global economy as a result. A Catalonian vote is scheduled for this November, and while the Spanish government in Madrid considers it to be illegal, Catalonia's vote could indeed be a success.

First blog post for fall term International Political Economy what what. One issue in today's political climate where international actors in both the political and business world are interacting is the upcoming referendum on September 18th for Scottish independence from the United Kingdom. In recent days, the debate has centered on what large foreign companies based in the UK, such as RBS, BP and Lloyds, will do if the Scots vote to separate. These companies will choose to stay in the UK, instead of an independent Scotland, due to their uncertainty about new Scottish laws, taxes, regulations, etc. The Scottish National Party (the driving force behind the referendum) has not endeared themselves to business leaders with veiled threats of nationalization in recent days, and if the Scots end up voting for independence, the new nation may need to be prepared for a severe economic downturn.