As Canadians sparred over fake lakes, budget-busting security, and the global capitalist conspiracy, the world’s twenty most influential leaders convened in Toronto this past June to negotiate a response to the worst financial crisis in generations. At issue was an age old debate between two economic philosophies: stimulus as a life vest versus stimulus as a straitjacket. The pro-life camp was championed by consumerist America and its global supply chain. The pro-restraint camp was led by conservative Germany and its regional demand chain. At risk were millions of jobs, trillions in debt, and quite possibly the fate of our modern political economy.

Armies of bulls and bears are camped out on either side of the great debate over the future of the global economy. Armed with the latest statistics and plenty of financial incentive, both sides are engaged in massive media campaigns to rally anyone left on the fence — principally retail investors who were either burned in the great collapse of 2008-09 or sat out the fast and furious rally over the past 14 months. As the rhetoric heats up, it becomes increasingly difficult to choose sides. A careful examination of these competing wagers provides a more holistic perspective for anyone brave enough to join the fight.

This type of geopolitical conspiracy would be easy to dismiss from any other source, but speculation of an imminent de-dollarization by some of the world’s largest oil consumers is even more chilling when it’s penned by one of Britain’s most celebrated international journalists…

Exploring the recent economic “upheaval” through the lens of history helps in at least two ways: 1) it assures us that humanity has faced similar dangers in the past and somehow lived to tell the tale, and 2) it suggests that the same entrepreneurial instincts that led us into trouble (yet again) also hold the key to restoring stability and growth. This speech by the President of the World Bank highlights a series of events that presaged the crisis — like the “emergence” of emerging economies, the popularity of leveraged finance, and growing imbalances of trade — focusing less on the outcome and more on the decades of unbridled expansion that inspired it…

If there’s any doubt remaining among global power-brokers that short-term foreign policy objectives are fundamentally flawed, recent events in the Levant have provided ample evidence. Such tribal conflict has played out in the Garden of Eden since northern Neanderthals and southern proto-human colonies first crossed paths during the last major Ice Age. Since that time, control over the region has changed hands a number of times, from Semetic tribes to Egyptian pharaohs to Roman Catholics to Muslim traders to Christian crusaders to Muslim Turks, and so forth. For every fence that was built and every line that was drawn, rivals always built a bigger ladder or dug a deeper tunnel. And so the feud was passed from generation to generation, …

This counter-factual analysis of China’s path toward capitalism reveals that the country’s biggest cities aren’t necessarily the engines of dynamic Asian progress that modern commentators have suggested, and that the country’s future may lie in rural areas where entrepreneurship and competition have thrived since Deng Xiaoping’s Four Modernizations…

While the world comes to terms with yesterday’s historic call for change, Nouriel Roubini and his team have pulled together a laundry list of the many great challenges that lie ahead…

As Canadians flock to the polls later this month, quietly supplying 22% of America’s oil and 13% of its natural gas, its neighbours to the south have barely noticed. Cross-border oil flows are inevitable – given that America controls of a mere 2% of the world’s reserves and consumes almost 25% of supply – and securing its long-term petroleum assumes the full participation of Alberta’s carbon-rich tar sands and the off-shore bounty at Hibernia. Even Governor Palin’s Wildlife Reserve is virtually useless without passage by pipe across Canada’s Western provinces. Given the importance of “Securing America’s Energy Future” during a twin election year, it’s surprising that talk hasn’t returned to NAFTA, cleaner energy, or agricultural subsidies. Then again, maybe it isn’t…

Keynesian reflections from 1919 on the first era of true globalization, complete with bountiful trade, unparalleled upward mobility, liquid labor markets, secure international travel, and a blissful ignorance of the fragility of this new 20th Century World Order…
What an extraordinary episode in the economic progress of man that age was which came to an end in August 1914! The greater part of the population, it is true, worked hard and lived at a low standard of comfort, yet were, to all appearances, reasonably contented with this lot. But escape was possible, for any man of capacity or character at all exceeding the average, into the middle and upper classes, for whom life offered, at a low cost and with the …

Assuming that the United States decides to impose a $25 per barrel tariff on all imported oil (crude and product) – and Canada and Mexico were not exempt — let’s explore how this might affect:

a. The volume of oil imported into the United States?
Volume responses to a $25 tariff would vary over time. In the near-term, there would only be a negligible decrease in the volume of oil imported (given a low short-run elasticity of energy demand) as industries, supply chains, and consumers remain highly dependent on existing petroleum infrastructure. The redistribution of the tariff (with tax reductions) would partially offset the incremental cost to businesses and consumers, but the policy is unlikely to completely offset the …

An excerpt from the mid-term “problem set” in ENR-302…
3. The country of Xanadu is dependent of the use of domestically produced methanol for 100% of its energy needs. The price of methanol is set by a competitive market and the fuel is priced at $2.50 per gallon. Two large companies supply 80% of the market and each has costs of $1.50 per gallon. The opposition party and most of the national labor unions argue that these two companies are making obscene profits. They demand that the President place a mandatory price cap of $2.00 on the price of methanol to prevent “this abuse of market power.”
Assume that the elasticity of demand is 0.4 and the elasticity of supply is …

An expanded look at the role corporations and hospitable business environments have played in stabilizing the anarchic system of international relations. This work is based on an earlier paper which focused on the rise of the corporation as a key variable in the calculus of global peace and security…

This paper was written for quite possibly the best combination of professor and class I’ve ever experienced. If only all academic endeavor challenged so profoundly, surveyed so broadly, and bore as much intellectual fruit…
Hegemonic Stability and the Rise of Global Corporations
by Devin DeCiantis
“The logic of markets is borderless,
but the logic of politics remains bounded.”
- Louis W. Pauley, Who Elected the Bankers? Surveillance and Control in the World Economy, 1997

“Know thyself, know thy enemy. A thousand battles, a thousand victories.” In the case of Iran and the U.S., Sun Tzu’s prescient advice — combined with the thorough research of “your correspondent” — suggest that peace might be an easier wager than recent history predicts. With their popularity on the wane, like-minded conservatives in their ranks, and religious ideology on their side, Bush and Ahmadinejad have more in common today than either care to admit…

With great power may come great responsibility, but middle power certainly has its role to play policing the economic and political bulge. In this address at the CFR, Canada’s Prime Minister waxes idealistically about the challenges of a national resource bounty that rivals any in the world, a mixed ethnic heritage that is the model for progressive integration, and a desire to project Canadian sovereignty and foreign policy into the 21st century…

The Economist has a knack for understanding leading indicators, be they economic, financial or political. This time, Russia falls under the looking glass, and the rise of the siloviki present yet another cause for Western concern. With allied hands tied in the Middle East chasing volatile natural resources and battling a crisis of confidence here at home, Putin & Co. apparently don’t need an invitation to continue consolidating their grip on one of the world’s largest and most important geopolitical economies…

“Now that an immediate peril is not plainly visible, there is a natural tendency to relax and to return to business as usual…. But I feel that we are seriously failing in our attitude toward the international problems whose solution will largely determine our future.”
George C. Marshall
Washington’s Birthday Remarks at Princeton University
February 22, 1947

Sober words from one of this primary’s lesser known Democratic candidates, on the benefits of bipartisan, international negotiation with Iran and the power of assertive compromise. As Atticus Finch might suggest, reconciling “The Axis” and “The Great Satan” may take little more than stepping inside the other guy’s skin and “walk[ing] around for a little”, and as Governor Richardson himself asserts, the taboo of Persian engagement must be overcome before any meaningful progress will ever take place…

Speeches like this remind us of why partisan politics is often no better than the alternative, not because of any words directly spoken or feelings directly invoked, but because of the inevitable litany of criticism that unfolds in the wake of a genuine call for change — particularly in the months leading up to an election. There isn’t much in this April 2007 address that disagrees with the basic principles of peaceful co-existance, mutual socio-economic benefit, and the rebirth of the American Dream. If the long tail ever wakes up to the message, this could become an interesting race…

*To listen to a podcast of this speech, click here

Recent reports have pegged open interest in the world’s largest IPO at nearly US$400 billion. That’s a lot of capital ready to speculate on a still unproven Chinese macroeconomy, particularly in the face of its ongoing structural woes. Could this be the end of the beginning for capitalism in China? Or perhaps the beginning of the end…
The Enduring Allure of China
by Peter Zeihan, Stratfor.com

The Industrial and Commercial Bank of China (ICBC) is expected to raise nearly $22 billion in an initial public offering (IPO) — the largest in history — after shares are made available to retail investors Oct. 27. The ICBC offering is the latest in a series of IPOs involving Chinese banks, into which Western investment firms have …