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I/L Turn – Pivot Causes War



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I/L Turn – Pivot Causes War

Int. Link Turn (No Int. Link)-US Pivot doesn’t solve war, but to Asia Leads to Cold War 2.0


BRICS,14

[Brazil, Russia, India, China, South Africa alignment for economic, political, and social development; “US Pivot to Asia or to Cold War 2.0?”; April 27th, 2014; http://thebricspost.com/us-pivot-to-asia-or-to-cold-war-2-0/#.U68rcfRDuVM-EW]



Of the four countries that Obama visits this week– Japan, South Korea, Malaysia and the Philippines — three of them are America’s military allies, and all four of them have territory disputes with China. True, there is growing anxiety in Asia, but not all the tensions are related with China. There is the aggressive North Korean authority trying to build nuclear powers. There is the deteriorated relationship between South Korea and Japan, two of America’s major allies, due to historical resentments stemming from World War II. But the itinerary of Obama’s Asia visit clearly outlines the main message he wants to deliver- Washington’s intention to counter a rising China. The challenges of an Asia Pivot The shift of the US strategy dated back in 2011, when Obama announced in Canberra, Australia, that America will “pivot” to Asia, meaning Washington has decided to reallocate more diplomatic, economic and military resources to this region. But what exactly does this “Pivot” policy mean for the Sino-US relationship is always ambiguous. If its goal is to reap economic benefit, then the best option for the US should be to engage China. China is already the largest economy in Asia and will continue to expand at a fastpace. Beijing is gradually opening up its domestic market and the emergence of China’s middle class, or “one billion customers”, lauded by the former The Wall Street Journal China bureau chief James McGregor, is the magnate for producers in Asia, and also something that American companies could not afford to ignore. Yet the priority of Washington’s Asian agenda on economic cooperation is trying to build a trade bloc without China. The Trans-Pacific Partnership (TPP) is a massive free trade pact led by the US, followed by Japan, Australia, New Zealand, and some ASEAN countries. China is not invited to the club. Ironically, China is on another regional trade negotiation table, the Regional Comprehensive Economic Partnership (RECP), where Americans are absent. In principle, a regional free trade agreement (FTA) can boost regional economic growth by facilitating further integration of member countries’ markets, but if the current FTA negotiation tends to drive a wedge between the US and China, and force other Asian countries to takepositions and choose sides, that will be a different story. If the “Pivot’s” main concern is regional security, then it’s quite clear that the Pentagon is treating China as the main challenger. This worry is to some extent legitimate, giving the fact that China is building up its military strength, especially its navy force. This, understandably, is a new thing for the US. For decades, America has been the unquestioned hegemon in Asia, underpinned by its naval supremacy. But China is catching up quickly. By the estimation of Robert Kaplan, chief geopolitical analyst for STRATFOR, a private global intelligence firm in the US, China will have more warships in the West Pacific than the US Pacific Fleet by the late 2020s. In the next few decades, China’s ability to project naval power will extend deep into the South Pacific and Indian Oceans. To keep China in check, the US has vowed to reposition naval forces so that 60 per cent of its warships are based in Asia-Pacific by the end of the decade, up from about 50 per cent now. Even though their overt language remains very cautious, it’s quite obvious that the centerpiece of American’s “Pivot” policy is containing China. Fortunately, China’s not as aggressive as many foreign observers see/portray it, nor is it unreasonable. China does not harbour ambitions to challenge the current international system, which is to a great extent influenced by American interests and ideology. Nor has it any hidden agenda to build an imperial “the Great East Asia Co-prosperity Sphere”, as Japan did during the Second World War. What China is trying to do is seek a dominant role in an adjacent sea, the same as the US did in the Caribbean and Europe did in the Mediterranean. As Robert Kaplan says in his new book, Asia’s Cauldron, “if it weren’t, great power politics over the course of the past few millennia would not have been as they have.” China is also, contrary to popular perception, quite pragmatic and flexible when dealing with territory disputes with its neighbors. China and Vietnam have a long and antagonistic history, but the two countries can still sit down and strike an agreement on contended territories. But why does China suddenly move to a more hawkish attitude toward the provocations from America’s allies, Japan and the Philippines? Simply because China needs to build its ‘tough guy’ reputation, by showing it is willing, and able to defend itself and defeat its enemies. An imminent military showdown? Both China and the US believe that they have made the rational choice, given their situation. Yet this could lead to a “Prisoner’s dilemma” where everyone is locked in. Strategic competition can quickly build its own momentum. Escalating rivalry between China and the US poses serious risks to regional security. If the US goes further down this track, it will find itself not pivoting to Asia, but to the Cold War 2.0. Or even worse. One hundred years ago, Europe burst into an unprecedented bloody war. At least 10 million soldiers died and more than twice that number were seriously injured. Cities were destroyed and buried in rubbles. Why did the great war happen? Recent study of historians argue that war is a tragedy, but not a crime. In other words, no one predicted what exactly will happen in the summer of 1914. Christopher Clark in his new book on the causes of the First World War, described the protagonists of 1914 as “sleepwalkers”, “watchful but unseeing, haunted by dreams, yet blind to reality”. A series of mistakes made by reckless risk-takers, disaster leads to disaster. What we can and must learn from history is to avoid the miscalculation of power equations. For the US, it has to recognize the reality of China’s rising. Whether China grows fast or slow, whether China is a democracy or authoritarian, whether China has a “grand strategy” or not, China will be a rising power. It’s simple and clear. Rather than confronting China, the US needs to think of how to accommodate China. It’s by no means an easy task, since it relies on the subtle co-evolution of both the US and China. Dr. Kissinger narrates a story in the opening of his book On China: When China faced a crisis concerning a border dispute with India, Chairman Mao told his comrades that the lesson they can learn from is an ancient campaign one thousand years ago in the Tang Dynasty. This, of course, is a unique Chinese way of thinking. If ancient wisdom can shed some light on the recent tensions in East Asia, the Chinese classic, Mencius, written two thousand years ago, is recommended reading. When asked by the King Xuan of Qi: “Do you have a formula for diplomacy with neighboring states? ” Mencius answered: “I do. Only a humane prince is able to put his large state stoutly at the service of a smaller one; Only a wise prince is able to promptly put his small state in the service of a larger one.”

No Impact – US China War

Economic interdependence checks


Perry and Scowcroft ‘9

William (Michael and Barbara Berberian professor at Stanford University.) and Brent (resident trustee of the Forum for International Policy.) “US Nuclear Weapons Policy.” 2009. Council on Foreign Relations. Online.



Economic interdependence provides an incentive to avoid military conflict and nuclear confrontation. Although the United States has expressed concern about the growing trade deficit with China, the economies of the two countries have become increasingly intertwined and interdependent. U.S. consumers have bought massive quantities of cheap Chinese goods, and Beijing has lent huge amounts of money to the United States. Similarly, Taiwan and the mainland are increasingly bound in a reciprocal economic relationship. These economic relationships should reduce the probability of a confrontation between China and Taiwan, and keep the United States and China from approaching the nuclear brink, were such a confrontation to occur. On other nuclear issues, China and the United States have generally supported each other, as they did in the six-party talks to dismantle North Korea’s nuclear weapons programs. Here, the supportive Beijing-Washington relationship points toward potentially promising dialogues on larger strategic issues.

No Link- Pivot Failure Inevitable- Challenges Deter


BRICS,14

[Brazil, Russia, India, China, South Africa alignment for economic, political, and social development; “US Pivot to Asia or to Cold War 2.0?”; April 27th, 2014; http://thebricspost.com/us-pivot-to-asia-or-to-cold-war-2-0/#.U68rcfRDuVM-EW]



The shift of the US strategy dated back in 2011, when Obama announced in Canberra, Australia, that America will “pivot” to Asia, meaning Washington has decided to reallocate more diplomatic, economic and military resources to this region. But what exactly does this “Pivot” policy mean for the Sino-US relationship is always ambiguous. If its goal is to reap economic benefit, then the best option for the US should be to engage China. China is already the largest economy in Asia and will continue to expand at a fastpace. Beijing is gradually opening up its domestic market and the emergence of China’s middle class, or “one billion customers”, lauded by the former The Wall Street Journal China bureau chief James McGregor, is the magnate for producers in Asia, and also something that American companies could not afford to ignore. Yet the priority of Washington’s Asian agenda on economic cooperation is trying to build a trade bloc without China. The Trans-Pacific Partnership (TPP) is a massive free trade pact led by the US, followed by Japan, Australia, New Zealand, and some ASEAN countries. China is not invited to the club. Ironically, China is on another regional trade negotiation table, the Regional Comprehensive Economic Partnership (RECP), where Americans are absent. In principle, a regional free trade agreement (FTA) can boost regional economic growth by facilitating further integration of member countries’ markets, but if the current FTA negotiation tends to drive a wedge between the US and China, and force other Asian countries to takepositions and choose sides, that will be a different story. If the “Pivot’s” main concern is regional security, then it’s quite clear that the Pentagon is treating China as the main challenger. This worry is to some extent legitimate, giving the fact that China is building up its military strength, especially its navy force. This, understandably, is a new thing for the US. For decades, America has been the unquestioned hegemon in Asia, underpinned by its naval supremacy. But China is catching up quickly. By the estimation of Robert Kaplan, chief geopolitical analyst for STRATFOR, a private global intelligence firm in the US, China will have more warships in the West Pacific than the US Pacific Fleet by the late 2020s. In the next few decades, China’s ability to project naval power will extend deep into the South Pacific and Indian Oceans. To keep China in check, the US has vowed to reposition naval forces so that 60 per cent of its warships are based in Asia-Pacific by the end of the decade, up from about 50 per cent now. Even though their overt language remains very cautious, it’s quite obvious that the centerpiece of American’s “Pivot” policy is containing China. Fortunately, China’s not as aggressive as many foreign observers see/portray it, nor is it unreasonable. China does not harbour ambitions to challenge the current international system, which is to a great extent influenced by American interests and ideology. Nor has it any hidden agenda to build an imperial “the Great East Asia Co-prosperity Sphere”, as Japan did during the Second World War. What China is trying to do is seek a dominant role in an adjacent sea, the same as the US did in the Caribbean and Europe did in the Mediterranean. As Robert Kaplan says in his new book, Asia’s Cauldron, “if it weren’t, great power politics over the course of the past few millennia would not have been as they have.” China is also, contrary to popular perception, quite pragmatic and flexible when dealing with territory disputes with its neighbors. China and Vietnam have a long and antagonistic history, but the two countries can still sit down and strike an agreement on contended territories. But why does China suddenly move to a more hawkish attitude toward the provocations from America’s allies, Japan and the Philippines? Simply because China is trying to build its ‘tough guy’ reputation, by showing it is willing, and able to defend itself and defeat its enemies.

No Impact – Asian Conflict Doesn’t Escalate

No Asian war- China creates stability


Carlson ’13 China Keeps the Peace at Sea China Keeps the Peace at Sea Why the Dragon Doesn't Want War Allen Carlson February 21, 2013)

At times in the past few months, China and Japan have appeared almost ready to do battle over the Senkaku (Diaoyu) Islands --which are administered by Tokyo but claimed by both countries -- and to ignite a war that could be bigger than any since World War II. Although Tokyo and Beijing have been shadowboxing over the territory for years, the standoff reached a new low in the fall, when the Japanese government nationalized some of the islands by purchasing them from a private owner. The decision set off a wave of violent anti-Japanese demonstrations across China. In the wake of these events, the conflict quickly reached what political scientists call a state of equivalent retaliation -- a situation in which both countries believe that it is imperative to respond in kind to any and all perceived slights. As a result, it may have seemed that armed engagement was imminent. Yet, months later, nothing has happened. And despite their aggressive posturing in the disputed territory, both sides now show glimmers of willingness to dial down hostilities and to reestablish stability. Some analysts have cited North Korea's recent nuclear test as a factor in the countries' reluctance to engage in military conflict. They argue that the detonation, and Kim Jong Un's belligerence, brought China and Japan together, unsettling them and placing their differences in a scarier context. Rory Medcalf, a senior fellow at the Brookings Institution, explained that "the nuclear test gives the leadership in both Beijing and Tokyo a chance to focus on a foreign and security policy challenge where their interests are not diametrically at odds." The nuclear test, though, is a red herring in terms of the conflict over the disputed islands. In truth, the roots of the conflict -- and the reasons it has not yet exploded -- are much deeper. Put simply, China cannot afford military conflict with any of its Asian neighbors. It is not that China believes it would lose such a spat; the country increasingly enjoys strategic superiority over the entire region, and it is difficult to imagine that its forces would be beaten in a direct engagement over the islands, in the South China Sea or in the disputed regions along the Sino-Indian border. However, Chinese officials see that even the most pronounced victory would be outweighed by the collateral damage that such a use of force would cause to Beijing's two most fundamental national interests -- economic growth and preventing the escalation of radical nationalist sentiment at home. These constraints, rather than any external deterrent, will keep Xi Jinping, China's new leader, from authorizing the use of deadly force in the Diaoyu Islands theater. For over three decades, Beijing has promoted peace and stability in Asia to facilitate conditions amenable to China's economic development. The origins of the policy can be traced back to the late 1970s, when Deng Xiaoping repeatedly contended that to move beyond the economically debilitating Maoist period, China would have to seek a common ground with its neighbors. Promoting cooperation in the region would allow China to spend less on military preparedness, focus on making the country a more welcoming destination for foreign investment, and foster better trade relations. All of this would strengthen the Chinese economy. Deng was right. Today, China's economy is second only to that of the United States. The fundamentals of Deng's grand economic strategy are still revered in Beijing. But any war in the region would erode the hard-won, and precariously held, political capital that China has gained in the last several decades. It would also disrupt trade relations, complicate efforts to promote the yuan as an international currency, and send shock waves through the country's economic system at a time when it can ill afford them. There is thus little reason to think that China is readying for war with Japan. At the same time, the specter of rising Chinese nationalism, although often seen as a promoter of conflict, further limits the prospects for armed engagement. This is because Beijing will try to discourage nationalism if it fears it may lose control or be forced by popular sentiment to take an action it deems unwise. Ever since the Tiananmen Square massacre put questions about the Chinese Communist Party's right to govern before the population, successive generations of Chinese leaders have carefully negotiated a balance between promoting nationalist sentiment and preventing it from boiling over. In the process, they cemented the legitimacy of their rule. A war with Japan could easily upset that balance by inflaming nationalism that could blow back against China's leaders. Consider a hypothetical scenario in which a uniformed Chinese military member is killed during a firefight with Japanese soldiers. Regardless of the specific circumstances, the casualty would create a new martyr in China and, almost as quickly, catalyze popular protests against Japan. Demonstrators would call for blood, and if the government (fearing economic instability) did not extract enough, citizens would agitate against Beijing itself. Those in Zhongnanhai, the Chinese leadership compound in Beijing, would find themselves between a rock and a hard place. It is possible that Xi lost track of these basic facts during the fanfare of his rise to power and in the face of renewed Japanese assertiveness. It is also possible that the Chinese state is more rotten at the core than is understood. That is, party elites believe that a diversionary war is the only way to hold on to power -- damn the economic and social consequences. But Xi does not seem blind to the principles that have served Beijing so well over the last few decades. Indeed, although he recently warned unnamed others about infringing upon China's "national core interests" during a foreign policy speech to members of the Politburo, he also underscored China's commitment to "never pursue development at the cost of sacrificing other country's interests" and to never "benefit ourselves at others' expense or do harm to any neighbor." Of course, wars do happen -- and still could in the East China Sea. Should either side draw first blood through accident or an unexpected move, Sino-Japanese relations would be pushed into terrain that has not been charted since the middle of the last century. However, understanding that war would be a no-win situation, China has avoided rushing over the brink. This relative restraint seems to have surprised everyone. But it shouldn't. Beijing will continue to disagree with Tokyo over the sovereign status of the islands, and will not budge in its negotiating position over disputed territory. However, it cannot take the risk of going to war over a few rocks in the sea. On the contrary, in the coming months it will quietly seek a way to shelve the dispute in return for securing regional stability, facilitating economic development, and keeping a lid on the Pandora's box of rising nationalist sentiment. The ensuing peace, while unlikely to be deep, or especially conducive to improving Sino-Japanese relations, will be enduring.

Asian stability inev – security posturing checks


Wong and Ansfield 11 (Edward and Jonathon, staff’s, http://www.nytimes.com/2011/04/01/world/asia/01china.html?_r=2, dw: 3-31-2011, da: 7-9-2011, lido)

The Chinese military said Thursday that while the security situation in Asia and the Pacific was generally stable, it was becoming “more intricate and volatile, with no clear solutions for tension points like the divided Korean Peninsula and with the United States increasing its involvement in regional issues. The military’s vision was laid out in a national defense white paper, a document published every two years since 1998. The paper tried to walk a line between trumpeting the modernization efforts of the Chinese military and assuaging the fears of foreign governments and analysts that the fast-growing People’s Liberation Army would be used for expansionist purposes or regional dominance. It stressed that China’s military buildup was purely defensive, a position Chinese leaders have long taken. The paper had more detail than previous editions on China’s efforts to establish confidence-building measures with foreign militaries. In the past year, perceptions by foreign countries of China’s military growth and of a more assertive foreign policy have resulted in diplomatic discord and discomfort, particularly between China and the United States.

Chinese Drive For Economic Ties Prevents Asian Tension Escalation- No War Scenarios


Tan,14

[Author and Editor of Channel NewsAsia;“China’s push for economic ties ensures tensions won’t escalate: analyst.”; May 30th, 2014; http://www.channelnewsasia.com/news/asiapacific/china-s-push-for-economic/1129588.html-EW]



Territorial disputes between China and its neighbours have risen to new heights in recent weeks. But analysts say China's push for stronger economic ties will ensure the tension will not escalate further. The anti-China riots from Shanghai have been called the most violent dispute yet between China and Vietnam. Clashes between the two maritime neighbours over ownership of a section of the South China Sea have resulted in a capsized boat, at least two fatalities and more than 100 people injured. The conflict started just as US President Barack Obama ended his Asian tour, which covered Japan and the Philippines -- two countries also locked in territorial friction with China. Yang Cheng, from the School of Advanced International and Area Studies at East China Normal University, said: "Perhaps Obama put in more work on his return to Asia strategy -- especially when he visited Japan and other countries, he displayed a stronger revival which has a repressive, even counter-balancing effect on China's rise. “So everyone connects that to why China has been more aggressive." Yet, despite its hawkish naval maneuvers, Beijing has also been assertive on trade and economic linkages in the region. China-led negotiations on the Regional Comprehensive Economic Partnership (RCEP) -- a free trade agreement covering ASEAN and six other countries including Japan and India -- appears to be going more smoothly than its rival deal the US-led Trans Pacific Partnership, which has hit a roadblock in Washington. China has also recently managed to convince Asia-Pacific Economic Cooperation (APEC) countries to restart talks for a free trade zone in the Asia Pacific, known as the FTAAP. David Gosset, director of Academia Sinica Europaea at the China Europe International Business School, said: "Trade is a new factor. Let us remember that despite the rhetoric up to now, unfortunately tensions between Japan and China -- the two countries traded for more than US$300 billion. “The fact that you have this growing interdependence between Japan and China -- this is a factor of stability and the two countries will trade more and more." Nevertheless, the latest spate of hostilities signals the need for new ways to defuse rows in the disputed territories. "It looks like after years of pushing for the South China Sea Code of Conduct, we haven't got any good outcome. How do we find a more opportune time to resolve these problems comprehensively through a common framework?" said Yang Cheng, from the East China Normal University. Ministers from Japan and China will come face to face at the Shangri-La Dialogue in Singapore, but Japanese Prime Minister Shinzo Abe's expected push for a greater security role in the region is likely to do little but push the two nations further apart. Analysts say the rise in territorial tension in the contested waters would only provide more grounds for China’s President Xi Jinping to push for further upgrades in the navy and airforce capabilities of the People's Liberation Army as part of his overall mandate to reform the military. That move will very likely set off more unease amongst China’s neighbours -- the very same countries China needs to work with to prosper further.

UX – US Econ High

Jobs growing now


Detrixhe and Katz, 6/6/14

John Detrixhe and Ian Katz  Jun 6, 2014 3:01 PM ET  Bloomberg.com



“Treasuries continue to trade as the global safe haven asset,” said Larry Milstein, managing director in New York of government-debt trading at R.W. Pressprich & Co. “Whether S&P rates them AAA or not appears to be inconsequential.”The U.S. economy as measured by jobs has improved this year. Payrolls pushed past their U.S. pre-recession peak for the first time in May, a milestone that’s been five years in the making.The 217,000 advance in hiring followed a 282,000 gain in April, according to Labor Department data released today. It marked the fourth consecutive month employment increased by more than 200,000, the first time that’s happened since early 2000. The jobless rate unexpectedly held at an almost six-year low of 6.3 percent.In 2011, when S&P stripped America of its top grade, it cited political wrangling about the debt limit and the lack of a plan to reduce deficits.The government in 2013 endured its first partial shutdown in 17 years after Congress failed to break a partisan deadlock on the budget. In 2011, politicians refused to raise the borrowing threshold until they reached the Treasury’s deadline for avoiding a default.

US economy strong now: Job growth and high investor confidence prove


Rugaber & Crutsinger, 2014

Christopher Rugaber and Martin Crutsinger: AP Economics Writes, Why a grim US economic picture is brightening, June 24, 2014 http://seattletimes.com/html/businesstechnology/2023916842_apxeconomyrebound.html
If the economy really was tumbling back into recession, you'd see businesses laying off workers -- or at least clamping down on hiring. That isn't happening. Employers are adding jobs at the fastest pace in 15 years. That's a pretty clear sign that they see last quarter's troubles as temporary. And layoffs are down. The number of people seeking unemployment benefits, a proxy for layoffs, has fallen 10 percent since the first week of January. Another drag on growth last quarter was probably also temporary: Companies sharply cut back on their restocking of goods. That wasn't unexpected. It occurred after companies had aggressively ramped up restocking in the second half of last year. The slowdown in the January-March quarter reduced annual growth by 1.6 percentage points, the government said. With growth strengthening since spring began, businesses are restocking at a faster rate again. Inventories grew 0.6 percent in April, the most in six months. As a result, consumer spending probably grew at a 2.3 percent annual rate last quarter, not the 3.1 percent previously estimated, according to JPMorgan Chase. Consumers have accelerated spending since then: Retail sales surged in March by the most in four years -- and again in April and May, boosted by auto purchases. This month, consumer confidence reached a six-year high. That's a hint that spending will further strengthen. After slipping in the first quarter, partly because of weather-related disruptions, factories are making more machinery, cars, furniture and computers. They're hiring and giving workers more overtime, which translates into bigger paychecks. Most analysts think the economy is growing at a 3.5 percent annual rate in the current quarter and will expand at a 3 percent rate for the rest of the year. The Federal Reserve foresees a similar improvement. Since then, the picture has brightened. Solid hiring, growth in manufacturing and surging auto sales have lifted the economy at a steady if still-unspectacular pace. That said, sluggish pay growth and a stumbling housing rebound have restrained the expansion. But the economy's recovery continues.

No Link – US not k2 econ

United States lost its influence on Global Economy


Atkinson 2014

States must adapt to thrive in the 'new economy', Robert Atkinson, president of the Information Technology and Innovation Foundation, Tuesday, 24 Jun 2014



In the "old economy," American scientists and engineers were at the forefront of global innovation, creating new industries, products and goods that were then mass-produced in lower-cost domestic regions and marketed worldwide. As the global economy evolved, industries seeking lower costs began locating abroad. Simultaneously, the United States lost its previously unassailable advantage in innovation, with countries such as Germany, Korea and Japan matching or surpassing our innovation potential in many key industries. In essence, the economies of U.S. states have been assaulted on two fronts: with high-tech states being out-innovated and low-cost states being undercut.

U.S economy is not affecting the world


Graham, 2014

GLOBAL MARKETS-Stocks put aside U.S. growth shock, UK eyed, by: Patrick Graham: Deputy Editor in Charge, Economics Desk, Reuters, Thu Jun 26, 2014



Stock markets in Europe and Asia in general looked past gains by Iraqi militants and poor first-quarter growth in the United States to rise slightly, helped by some banks raising their forecasts for a U.S. economic bounce in coming months. But U.S. futures pointed to a lower open and shares in Barclays, the UK's third-biggest bank and one of the world's biggest traders, fell 5 percent after the New York Attorney General filed a lawsuit against the bank related to its servicing of machine-driven high-frequency trading. Some of Europe's biggest lenders have already been fined more than $6 billion in the Libor rate-fixing scandal and are facing a raft of other suits. BNP Paribas could be fined around $10 billion for allegedly evading U.S. sanctions. "The judicial context is becoming a real drag for the European banking sector," said Alexandre Baradez, chief market analyst at IG France. "There are fears among investors of a contagion effect from the U.S. investigations. After BNP, Barclays, who will be next?" Stock markets in London, Paris and Frankfurt were all 0.1-0.2 percent higher in morning trade but U.S. stock futures pointed to a marginally lower open. Oil prices dipped but were still close to their highest in nine months. Traders eyed developments in Iraq for signs exports from OPEC's second-largest producer would be disrupted. Worries over the Sunni insurgency in northern Iraq have driven oil prices as high as $115 a barrel in the past month, the latest setback for a global economy that is still trying to get back on its feet. Wednesday's data on first-quarter U.S. growth also underlined doubts about global growth

US economy not as important as before


Keane, 2014

World economy no longer hangs on the US, By Tom Keane| Globe Columnist, April 13, 2014, The Boston Globe



The US economy is big, but relatively speaking, not as big as it once was. Thirty years ago, America accounted for one-quarter of world output. Today it’s down to one-fifth. That’s a meaningful change. Back then we were rich, and everyone else was much less so. Now those countries — especially China — have gotten better off. (In fact, China, with a 15 percent share of global output, is now the second biggest economy in the world.) Some might see this as a sign of failure, of other nations getting the best of America, of the United States in decline. In truth, it’s a tale of success, a story of nations and people coming out of poverty, being able to live better, longer, and more productive lives. And much of that can be credited to US efforts to encourage free trade and local economic development through institutions such as the World Bank, the IMF, and the World Trade Organization. Still, that success has downsides. As other nations get richer and the world gets more interconnected, the United States no longer goes it alone. Indeed, that’s already happening — and sometimes in a negative way. The IMF’s otherwise sunny outlook, for instance, worries about a host of issues that could upend growth, including Russia’s incursion into Ukraine, global climate change, North Korean war-mongering, and political troubles in Turkey and the Middle East. For the United States, once seemingly in control of its own and the world’s destiny, that’s a novel proposition. The future is no longer solely in our hands.

Brazil, Russia, India and China are key plays in global economy, not US


Wright 2008

If China sneezes, WA economy will fall ill, Lexis Nexis News, West Australian Newspapers Limited, Shane Wright is Economics editor for The West Australian newspaper.


"Continued strong growth in China is a political imperative and the Chinese Government has ample financial resources to support domestic growth should the US slowdown have a more serious adverse impact than is currently anticipated," Dr. Gruen said.¶ "Furthermore, the absence of highly sophisticated financial markets in China, as well as the relatively closed capital account, provides considerable insulation from the current financial turmoil, although China will not remain immune from spill-overs that arise from trade linkages with the developed world."¶ While here in WA our focus is on China, it is part of a quartet of nations, which are transforming the global economy. They’re called the BRIC nations - Brazil, Russia, India and China. Its not the major players such as the US and Japan that have driven the global economy in recent years, its the BRICs.¶ The contribution of the BRICs to world growth last year was double that of the US, Japan and Europe combined, with that likely to be repeated in 2008.

Bubble Economies impact World Economy more than US


Pilkington 2014

Will real estate bubbles again sink the global economy?, http://america.aljazeera.com/opinions/2014/6/global-real-estatebubbleimf.html, Al Jazeera, Philip Pilkington is a London-based economist and member of the Political Economy Research Group at Kingston University. He runs the blog Fixing the Economists.


According to World Bank figures, together the nine bubble economies made up just under 15.5 percent of world GDP in 2012. By contrast, the United States accounted for a little less than 22.4 percent of global GDP that year. We should add Ireland and Spain to the latter figure because those countries also had substantial housing bubbles that burst in 2006 and ’07 and may have contributed to the worldwide downturn; so the bubble economies that crashed the world economy in 2006 and ’07 accounted for almost a quarter of world GDP.¶ Clearly the countries that the IMF thinks might be bubble economies are not as important to the global economy as are the U.S., Ireland and Spain. That said, the IMF’s bubble economies still account for a substantial slice of world GDP, and if they take as big a hit as the three countries that did in 2006 and ’07, this could spell bad news for the global economy. This is especially true if we consider the weakness of the current global recovery. A simultaneous bursting of housing bubbles in countries that account for over 15 percent of world GDP could have ripple effects and knock the global economy off balance.

No Link – US Econ Resilient

Strong US credit rating proves US economy resilient


Detrixhe and Katz, 6/6/14

John Detrixhe and Ian Katz  Jun 6, 2014 3:01 PM ET  Bloomberg.com



The U.S.’s AA+ credit rating was affirmed by Standard & Poor’s, which cited the resiliency and diversity of the economy, almost three years after downgrading the nation for the first time amid political wrangling.There is a less than one-in-three probability that the ranking will change in the next two years, the New York-based company said in a statement today. The outlook on the rating is stable.Since the August 2011 downgrade from AAA, record budget deficits have shrunk, economic growth accelerated, the dollar rallied, stocks climbed to all-time highs and Treasuries strengthened their hold as the world’s preferred haven from turmoil. Still, S&P said a polarized policy making environment, and high general government debt and budget deficits constrain the ratings.“The S&P report reflects that the U.S. is on better footing, that the deficit situation has been reduced over the last year and that the amount of the money the Treasury borrows has declined,” said Thomas Tucci, managing director and head of Treasury trading in New York at CIBC World Markets Corp. “Ultimately the fundamental fiscal situation in the U.S. has improved and the credit quality of the U.S. is in very good shape right now.”The Congressional Budget Office in April projected that the federal deficit will decline to $492 billion this year, the smallest in six years, from $680 billion in 2013 and a record $1.4 trillion when President Barack Obama took office in January 2009.

S&P sees US economy as resilient


Detrixhe and Katz, 6/6/14

John Detrixhe and Ian Katz  Jun 6, 2014 3:01 PM ET  Bloomberg.com

For now, the debt ceiling is less of a concern. Congress in February suspended the limit until March 15, 2015. Income tax payments will then postpone the date when the government exhausts its borrowing authority. “Although the debt burden has stabilized, it will likely rise toward the end of the decade absent medium-term measures to raise additional revenue and/or to cut non discretionary expenditure,” S&P said today.“Credit strengths of the U.S. include its diversified and resilient economy, its extensive economic policy flexibility, and its unique status as the issuer of the world’s leading reserve currency,” the ratings company said in its statement. “However, a polarized policymaking environment and high general government debt and budget deficits constrain the ratings.”Moody’s and Fitch Ratings each rank the U.S. at the highest credit rating of AAA.

Link Turn – LNG Kills US Econ

LNG export is bad for the economy, environment


Twitchell 14

(Roger Twitchell, February 13, 2014, http://articles.baltimoresun.com/2014-02-13/news/bs-ed-lng-20140213_1_lng-export-cove-point-fracking)

¶ Domestic natural gas supply has increased enough to reduce the wholesale price to well below what foreign markets would offer for it. So Dominion and other corporate "players" as they call themselves want to send our natural gas overseas. The increased demand would increase domestic prices enough to support new fracking "plays" comparable to expansion during the original Marcellus Shale boom.¶ The flip side includes those price increases showing up in heating and energy costs throughout North America. We thought fracking's benefits were for our common good. Fracking "players" however see exporting as a long-term goal. This would hurt everyone paying for heat, energy and the plethora of natural gas-reliant chemical products all across North America. Dow, ALCOA, the American Public Gas Association and many others oppose the resulting higher costs, forming "America's Energy Advantage" to keep fracking's benefits here.¶ Dominion wants to send liquefied natural gas to India and Japan from the Chesapeake Bay's Cove Point facility, over 11,000 miles by ship. Leakage in India's distribution system will make the environmental impact of use and leakage alone comparable to that of typical coal. Factor in huge liquefaction and transport costs and you have a worse-than-worst-coal mess.¶ Sixty foot high walls are to contain thunderous compressor noise right where watermen traditionally hunt for crabs and oysters. Powering those compressors will make Cove Point the state's fourth largest CO2 polluter.¶ We in Pennsylvania appreciate the Chesapeake Bay and the seafood it provides. Searching "Cove Point LNG" online shows popular opposition (including chesapeakeclimate.org) to Dominion, which won't even talk to the local homeowners' association. Protecting our common environment including the Chesapeake Bay is the right thing to do.¶ Roger Twitchell, York, Pa.¶ The writer is a member of Citizens' Climate Lobby.


LNG exports are bad for the US economy and the climate


Brodwin, 14

(David Brodwin, US News, 6/20/14, “Hold the Gas”, http://www.usnews.com/opinion/economic-intelligence/2014/06/20/exporting-natural-gas-ignores-global-warming-and-energy-challenges?int=a7bd09, LL)

Cove Point, Maryland, is a battleground because Dominion Energy Resources is seeking approval to build a large natural gas export terminal there. The facility would compress and liquefy the natural gas produced from fracking, load it onto ships and export it to foreign markets. Local businesses and citizens are justifiably concerned about the threat to groundwater, air quality and community safety and security. Last week, business leaders in the Chesapeake region presented a letter to the Federal Energy Regulatory Commission, urging it to reject the proposed project. But the greatest threat posed by the Cover Point terminal is not local. It’s national.¶ If the proposed Cove Point export facility is approved and built, similar plants will follow at key points along America’s coasts. Setting aside for the moment the environmental risks posed by fracking itself, America faces direct and substantial economic harm from the export of fracked liquefied natural gas: ¶ Cheap natural gas yields a big economic advantage for the U.S. economy. Exporting our natural gas will reduce domestic supply, driving the price up. U.S. companies, especially those in colder climates and those with energy-intensive operations, will suffer cost increases that will depress profits, defer hiring, reduce capital investments and slow the recovery. (The only industry that stands to benefit is the gas industry.) What should be a bounty will become a barrier to the American economy.¶ Exporting natural gas will increase the price of energy to consumers, many of whom still struggle in a weak recovery. Higher energy prices will reduce consumer buying power and confidence. This will further depress consumer demand, particularly in colder climates where heating bills take a chunk of household income. American businesses that have been waiting to see increased consumer spending will be disappointed once again. And the cycle of non-buying, non-investing, non-hiring, will continue. ¶ Compared to renewable energy, liquefied natural gas is a bad bet for job growth. Renewable energy employs many more people for the amount of electricity generated. Yet, while more workers are needed to produce electricity from renewables, the overall cost is about the same; higher labor costs are offset because wind and sunlight are free.¶ Along with direct economic harm, exporting our natural gas will create negative externalities – what economists call the consequences of an economic activity that are not reflected in the purchase price. The cost of externalities eventually permeates the economy in the form of taxes and other expenses. Liquefied natural gas exports bring large-scale negative externalities: ¶ Geopolitical costs: Exporting our natural gas prolongs our dependence on energy from the politically unstable Middle East. With Iraq on the edge of collapse, its oil exports in danger, and America on the verge of committing troops yet again to defend this strategically-important region, we must finally get serious about ending our dependence on Mideast oil. At the least, we should encourage remaining users of heating oil to switch to natural gas, not send our gas offshore while we import oil.¶ Climate-related costs: Failing to meet the challenge of climate change brings substantial costs that burden the economy. Direct economic damage from climate change comes from destruction of infrastructure by coastal flooding and violent inland storms, loss of agricultural production from shifts in rainfall patterns and more. These damages are already hitting our economy, and they are forecast to rise to 1-2 percent of gross domestic product for an extended period. Bottom line, the cost of climate-related damage makes the difference between a growing economy and a stagnant or declining one. ¶ Exporting our natural gas might seem good for the climate given that natural gas produces less carbon than coal relative to the energy it generates. But the benefit disappears when we tally the total carbon released by the entire supply chain of producing and exporting liquefied natural gas, which is energy-intensive to extract, process and ship. All things considered, exporting natural gas does nothing to reduce the carbon that enters the atmosphere worldwide. The climate will be better off if China burns its own locally produced coal instead of importing our natural gas. ¶ Natural gas exports postpone our long-overdue shift to renewables, which is essential if we are to reduce carbon emissions enough to mitigate climate change. A network of large-scale export facilities will have an economically-useful lifetime of about 50 years. The companies that build them will fight fiercely to keep them operating rather than write off their costs and face punishment by investors. Each new export plant will increase the pressure to maintain the fossil fuel economy and delay the shift we need.

No I/L – Global Econ Resilient

Global economies are recovering well from economic difficulties


Rowley 14

Developing economies tipped to gain as global growth rises; World Bank report puts global growth at 3% this year, Lexis Nexis News, The Business Times Singapore, Reporter for The Business Times Singapore

The World Bank, noting that developing economies in East Asia have so far successfully navigated their way through the straits of tightening global liquidity, is confident that they will continue doing so.¶ In a report which could be a salve to markets and policymakers, it said that, following several years of subdued performance, global growth is projected to accelerate to 3 per cent this year from 2.4 per cent last year, and to continue expanding both next year and in 2016.¶ The latest East Asia Pacific Economic Update said that this stronger global growth ‘will help most developing East Asia Pacific countries grow at a steady pace while they adjust to tighter global financial conditions’. The tailwinds from improving global trade will offset the headwinds from the tightening of global financial markets, it added.¶ The report may thus allay concerns that the monetary ‘tapering’ by the US Federal Reserve could be a serious dampener on Asia and other developing regions of the world, although the World Bank warned that there is no room for complacency and that policy reforms need to continue throughout the region.¶ ‘Developing countries of the East Asia and the Pacific region successfully navigated the stalled global economic recovery in the first half of 2013 and the expectations of a scaling back of quantitative easing in the second half, to grow by 7.2 per cent in 2013 - only marginally lower than the 7.4 per cent in 2012,’ said World Bank.¶ ‘Growth is expected to remain at 7.1 per cent in 2014 as well as in 2015 and 2016.’¶ These forecasts are similar to those made last week by the Asian Development Bank, which had suggested that growth in the developing economies of Asia as a whole should accelerate slightly this year and the next.¶ The bulk of growth in the developing economies of East Asia last year was attributable to China, which grew at 7.7 per cent last year, matching the rate in 2012 and exceeding the government target of 7.5 per cent, the World Bank noted in its report.

World Bank sees global economy picking up


New Zealand Herald 14

World Bank sees global economy picking up, Lexis Nexis News, The New Zealand Herald



The global economy is slowly picking up steam, led by advanced economies appearing to turn the corner after five years of financial crises and recession and a continued good performance by China, the World Bank said.¶ However, it said Tuesday that growth prospects remain vulnerable to rising interest rates and potential volatility in capital flows as the U.S. Federal Reserve eases up on the extraordinary stimulus it has been providing to the U.S. economy, the world’s largest.¶ The bank’s twice-yearly Global Economics Prospects report says global growth is expected to firm from 2.4 percent in 2013 to 3.2 percent this year and 3.4 percent in 2015.¶ The report said the momentum that countries such as the United States and Japan are building up should support stronger growth in the developing countries.¶ Presenting the findings, Kaushik Basu, the bank’s chief economist, the outlook for the global economy is uneventful¶ ‘It’s a strange world we live in that news that an uneventful economy ahead of us is meant to be good news,’ Basu said at a news conference at the bank’s Washington headquarters. He added, ‘But not surprising’ that this is the case after years of economic turmoil.¶ The report says that although risks to the global economy have subsided, they have not been eliminated and include fiscal uncertainty in the United States, protracted recovery in the euro zone and possible setbacks in China’s restructuring policies.¶ The bank said the Federal Reserve decision to begin trimming its intervention in the market, known as quantitative easing, ‘is welcome as it reflects increasingly convincing signs that a self-sustaining recovery is under way.’ It said the most likely scenario is for the tapering off to follow an orderly trajectory and for global interest rates to rise only slowly, reaching 3.6 percent by mid-2016¶ In Japan, the report says, large doses of fiscal and monetary stimulus have sparked a strong cyclical upturn but keeping this going will require structural reforms.¶ The bank says in the euro zone, banks have gone a long way to restructuring themselves but that sector remains weak. Details on a fully fledged banking union are still being worked out ‘and the currency bloc remains susceptible to shock.’

We should be optimistic about the global economy


Xu 14

Cautious economic optimism, Lexis Nexis News, Oil & Gas Journal, Bettina Faye V. Roc, Conglin Xu, Senior Editor-Economics



Global economic activity has broadly strengthened since the second half of 2013. Recovery continues, but remains uneven. Cautious economic optimism among oil and gas companies is reshaping the business landscape.¶ In April, the International Monetary Fund published its updated World Economic Outlook (WEO). The authoritative outlook forecasts the global economy will expand 3.6% in 2014 and 3.9% in 2015. This is up from 3% in 2013.¶ Much of the impetus is coming from advancing economies. The recession in Europe appears to be over. The US recovery seems solidly grounded. Fiscal consolidation is slowing as acute risk of debt sustainability has diminished. Banks are gradually becoming stronger. The normalization of monetary policy (e.g. halting quantitative easing) is now on the agenda.¶ But risks have not disappeared. "The global recovery is still fragile despite improved prospects, and significant downside risks--both old and new--remain," the WEO said. These risks include possible slow-down of emerging economies, sustaining structural difficulties in the Euro-zone, recently emerging geopolitical risks, and others.¶ Capital confidence¶ Also in April, Ernst & Young (E&Y) released the results of its 10th Global Capital Confidence Barometer survey. This biannual survey, conducted by the Economist Intelligence Unit, gauges corporate confidence in the economic outlook and identifies boardroom trends. The current findings are based on a panel of more than 1,600 executives in 54 countries surveyed in March, including 145 oil and gas executives.¶ The survey shows that oil and gas companies are a bit more cautious in their optimism on the global economic outlook than they were 6 months ago.¶ According to the survey, more than 54% of the oil and gas company respondents believe the global economic situation is improving, but that majority is sharply less than 71% it was in October 2013. But there also has been a corresponding increase in the number of companies that view the economy as stable, from 18% to 37%. Notably, oil and gas companies are slightly less optimistic than the broader global sample of respondents.¶ When asked to project the greatest economic risks to business over the next 6-12 months, about 36% of the oil and gas company respondents saw increasing global political instability as the No. 1 risk.¶ Slower emerging markets and the negative impacts of the phase--out of the US Federal Reserves' bond-buying and stimulus program are the other two major economic concerns of oil and gas companies, standing at 26% and 21%, respectively.¶ Meanwhile, confidence is rising across most key financial indicators for the oil and gas company respondents. These indicators include corporate earnings, equity valuations and stock market outlook, and short-term market stability.¶ A different path¶ Economic caution is reflected in job creation prospects and growth strategies. Combined with a new conservative consensus in oil and gas prices and relentless pressure on capital efficiency, this is driving a greater emphasis on optimization vs. growth, according to Andy Brogan, global oil and gas leader at E&Y transaction advisory services and the survey's coordinator.¶ While 86% of the oil and gas company responders expect to increase the number of jobs or maintain their current workforce over the next year, this represents a decline from 94% in the October 2013 survey. More critically, the portion of respondents expecting to increase jobs declined from 57% in October to 37% in April.

No Impact – Collapse Doesn’t Lead to War

Economic decline doesn’t cause war


Ferguson 6 (Niall, Professor of History – Harvard University, Foreign Affairs, 85(5), September / October, Lexis)

Nor can economic crises explain the bloodshed. What may be the most familiar causal chain in modern historiography links the Great Depression to the rise of fascism and the outbreak of World War II. But that simple story leaves too much out. Nazi Germany started the war in Europe only after its economy had recovered. Not all the countries affected by the Great Depression were taken over by fascist regimes, nor did all such regimes start wars of aggression. In fact, no general relationship between economics and conflict is discernible for the century as a whole. Some wars came after periods of growth, others were the causes rather than the consequences of economic catastrophe, and some severe economic crises were not followed by wars.

Economic decline doesn’t cause war – Studies prove


Miller 2k (Morris, Economist, Adjunct Professor in the Faculty of Administration – University of Ottawa, Former Executive Director and Senior Economist – World Bank, “Poverty as a Cause of Wars?”, Interdisciplinary Science Reviews, Winter, p. 273)

The question may be reformulated. Do wars spring from a popular reaction to a sudden economic crisis that exacerbates poverty and growing disparities in wealth and incomes? Perhaps one could argue, as some scholars do, that it is some dramatic event or sequence of such events leading to the exacerbation of poverty that, in turn, leads to this deplorable denouement. This exogenous factor might act as a catalyst for a violent reaction on the part of the people or on the part of the political leadership who would then possibly be tempted to seek a diversion by finding or, if need be, fabricating an enemy and setting in train the process leading to war. According to a study undertaken by Minxin Pei and Ariel Adesnik of the Carnegie Endowment for International Peace, there would not appear to be any merit in this hypothesis. After studying ninety-three episodes of economic crisis in twenty-two countries in Latin America and Asia in the years since the Second World War they concluded that:19 Much of the conventional wisdom about the political impact of economic crises may be wrong ... The severity of economic crisis – as measured in terms of inflation and negative growth - bore no relationship to the collapse of regimes ... (or, in democratic states, rarely) to an outbreak of violence ... In the cases of dictatorships and semidemocracies, the ruling elites responded to crises by increasing repression (thereby using one form of violence to abort another).


--No resources


Duedney 91 (Daniel, Hewlett Fellow in Science, Technology, and Society – Princeton University, “Environment and Security: Muddled Thinking?”, Bulletin of the Atomic Scientists, April)

Poverty wars. In a second scenario, declining living standards first cause internal turmoil, then war. If groups at all levels of affluence protect their standard of living by pushing deprivation on other groups, class war and revolutionary upheavals could result. Faced with these pressures, liberal democracy and free market systems could increasingly be replaced by authoritarian systems capable of maintaining minimum order.9 If authoritarian regimes are more war-prone because they lack democratic control, and if revolutionary regimes are war-prone because of their ideological fervor and isolation, then the world is likely to become more violent. The record of previous depressions supports the proposition that widespread economic stagnation and unmet economic expectations contribute to international conflict. Although initially compelling, this scenario has major flaws. One is that it is arguably based on unsound economic theory. Wealth is formed not so much by the availability of cheap natural resources as by capital formation through savings and more efficient production. Many resource-poor countries, like Japan, are very wealthy, while many countries with more extensive resources are poor. Environmental constraints require an end to economic growth based on growing use of raw materials, but not necessarily an end to growth in the production of goods and services. In addition, economic decline does not necessarily produce conflict. How societies respond to economic decline may largely depend upon the rate at which such declines occur. And as people get poorer, they may become less willing to spend scarce resources for military forces. As Bernard Brodie observed about the modern era, “The predisposing factors to military aggression are full bellies, not empty ones.” The experience of economic depressions over the last two centuries may be irrelevant, because such depressions were characterized by under-utilized production capacity and falling resource prices. In the 1930s increased military spending stimulated economies, but if economic growth is retarded by environmental constraints, military spending will exacerbate the problem.


-- No timeframe


Russett 83 (Bruce, Dean Acheson Professor of International Relations and Political Science – Yale University, “Prosperity and Peace: Presidential Address”, International Studies Quarterly, 27(4), p. 384)

The ‘optimism’ argument seems strained to me, but elements of Blainey’s former thesis, about the need to mobilize resources before war can be begun, are more plausible, especially in the 20th century. Modern wars are fought by complex organizations, with complex and expensive weapons. It takes time to design and build the weapons that military commanders will require, and it takes time to train the troops who must use them. Large bureaucracies must plan and obtain some consensus on those plans; and even in a dictatorship the populace in general must be prepared, with clear images of who are their enemies and of the cause that will justify war with them. In short, preparations for war take time. Just how long a lag we should expect to find between an economic downturn and subsequent war initiation is unclear. But surely it will be more than a year or two, and war may well occur only after the economy is recovering.




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