OBAMAGIC AND JUAN DE LA CRUZ (Part 1)

British historian Arnold J. Toynbee postulated that a civilization's existence is not cyclical, as other historians claim. Rather it survives by its reactions to challenges. This would certainly explain the Roman Empire's 2,500 year existence, or Hitler's 13 year “Thousand Year Reich.”

It may also explain the decline of the US as a superpower. She has reacted poorly to recent challenges, under George W. Bush's, gung-ho leadership, and his “era of complicity. ” Consequently, she is trying to survive two unwinnable wars, an economic disaster that has made over 3 million families homeless, and the loss of her manufacturing and R&D prowess, abroad.

WELCOME, BARACK

Barack Obama is determined to end that era. As a spellbinding, neo-FDR bringer of hope, he promises to return glory (and credibility) to America. His dynamic campaign, including utilization of Blue State Digital, an Internet company that has helped raise US$200 million, has managed to expose Hillary Clinton's campaign theme – inevitability – as a 70's style stump. In his words: “America is back. We're ready to lead.” It's galvanizing rhetoric and his recent Atlantic stump (retracing JFK's steps?) may just convince the Undecided to vote for him. But underscoring a foreign policy, how effective is it?

Barack, would-be President of America, is he running as President of the world, as well? The Globalized Economy is defining a new order different from what Barack Obama's United States has in mind. This early, he uses postwar Atlantic alliances to get to the Near and Far East. He has already rekindled ties with Germany, France and the UK - the top three GDPs in European Union – presumably for diplomatic and economic purposes, but also certainly military support for US – led campaigns in Afghanistan, Iraq, and - God forbid – Iran.

Obama's idea is to link arms with these top three Atlantic GDPs to be able to counter Brazil, Russia, India and China's (BRIC) growing GDPs .

GOTTA CHANGE YOUR WAYS, BABY

Contrasting ways based on historical philosophies, between the Democratic and Republican party are the keystone of US dynamism. Democratic philosophy is illustrated in the 1823 Monroe Doctrine, which espoused expansion exclusively into Latin America, the US “backyard” and FDR “New Deal” testing ground. The inward looking policy, which prioritizes Balanced Budgets and Social Reform, limits expansion to proven markets and partners. Observe Kennedy's pre-emptive efforts to neutralize Cuba – in the Bay of Pigs, and later, the Missile Crisis – to secure US integrity. Likewise, US Democratic military policy dictates multilateral approach (e.g., coalition) in Global conflict resolution.

Consequently, Obama wants to raise taxes, and give rebates back, mainly to the lower and middle classes, thereby stimulating spending. In the Keynesian function of Y = C + I + G + X, he will prioritize Y (National Income) through “C” and “G,” Consumer and Government Spending. He went to the EU countries not for Investments, but to win over US Undecided. He is brilliant at this.

Obama and the Democrats ignore economics for politics. First: EU countries will not invest in Bernanke's 2% T-Bill, kept below US Headline inflation. Averaging a 3-8% rate range, many Asian countries offer much better investment. Second: The EU will commit token forces in support of military initiatives; they have been reluctant, even in defense of nation-state interests. Third: China and Japan are the largest stakeholders of US treasury bills; he should show some gratitude for the US$1T investment. Fourth: The Global economy has shifted East and South. China's projected 2008 GDP is equivalent to the combined GDP of the aforementioned EU nations (US$6,991T against US$6,992T). Russia, India, and Brazil add another US$6.7T, double the top three EU countries' output.

Contrastingly, the opposing Republican party, founded in 1854 by Greeley, Sumner and Chase, is about the individual over the state (opposed to the Democrat's using the state to support the individual), and big business support (spurring growth). The aggressive projection of 'Pax Americana' is better situated for the new Global economy. Because the Republicans oppose corporate tax increases, McCain intends to stimulate National Income (Y) via Investments (I), and net exports (X); this is consistent with extending their Party's expansionist policy; good for the Philippines.

The “Grand Old Party” (GOP), it's other name, wants to sustain an Imperial America's global reach, especially in strategic areas, to protect their interests. Initiatives i.e., US “Aid” - to countries like Pakistan, the Philippines, Turkey, and Israel – are tied from brand-new to surplus military equipment, determined by a US alliance categorization. Observe Eisenhower's Golden Age, or Reagan, as the “Great Communicator.” The reasoning is that adversity comes not from Global Powers, but from weak states. Make these strong economically and militarily, order ensues, and mutual prosperity follows.

In light of the Economic balance's Eastward and Southward shift, the Republicans seem to have the right thing in mind by going directly to the sources, hence well – received Japanese and Chinese senior officials by Bernanke and Paulson, basically to ensure that their US$1T stays US dollar-denominated, and not Euro.

Their problem is basically: Where to get MONEY. In 2007, to bankroll the “War on Terror” public debt increased by US$528 billion, equivalent to 3.9% of GDP. And Bernanke's 2% T-Bill rate isn't exactly a compelling investment reason.

The next article continues how US policy affects Juan de la Cruz.

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