By Denis Bright
Despite bipartisan concerns about the political style of the Trump Administration, formal political relations are still deepening between the USA and Australia in sync with the other allied countries in the US Global Alliance.
In now far-off 2010, Wikileaks documents gave temporary attention to the depth global strategic and corporate relationships. Such reports have already faded into obscurity.
Closer engagement with the global network of NATO Countries is usually covered in a positive light.
Fairly recently, the Queensland Government through the Queensland Investment Corporation (QIC) expanded its equity in US shopping malls within the Forest City Reality Trust (Cision PR Newswire Online 16 February 2018).
Business will go on as usual at the QIC’s expanded real estate portfolios which generate income for the Queensland Government. Support for Armed Forces Day at Robsinson Mall, near Pittsburgh will be good for business, good for Queensland and perhaps good for a more sustainable world peace.
The fragility of peace is exposed by everyday myths about the weaknesses of US armed forces and even the global financial system itself:
U.S. Defence Secretary Jim Mattis pressed allies Wednesday to continue boosting military budgets, even as fresh evidence emerged that increases in European defence spending have yet to erase the impact of years of cuts.
The North Atlantic Treaty Organization (NATO) has in recent days touted an expansion in European military spending, pressured by concerns of a newly aggressive Russia and by a Trump administration push for alliance members to spend at least 2% of gross domestic product on defence by 2024.
In closed-door meetings with European officials Wednesday, Mr. Mattis lobbied anew for increased spending in Europe. He underscored the recent decision by the Trump administration to contribute additional forces and equipment to the alliance and reminded counterparts that President Donald Trump is expected to make European allies’ military spending a major focus of the July NATO summit, according to a NATO official who attended the meeting.
New figures released Wednesday by the International Institute for Strategic Studies, a London-based think tank, underscored the persistent shortfall in European defence spending.
Military spending in Europe grew 3.6% last year, according to the report—lower than NATO’s estimate of a 5% increase. Moreover, adjusted for inflation, European NATO members spent 4% less in 2017 than they did in 2010.
Only three of NATO’s 29 members—the U.S., Estonia and Greece—reached or exceeded the goal of spending 2% of economic output on their military last year, according to the IISS assessment. Next year, five more countries could make the target: Latvia, Lithuania, Romania, Poland and the U.K.
Superficially, the latest comparative data from Price Waterhouse Cooper (PWC) suggests that the US is an ailing superpower. In projections for GDP in Purchasing Power Parity Terms (PPP), the US will become the third largest global economy in 2050. The US might indeed fall below the output of Indonesia, Brazil and Japan by the end of this century.
Becoming the tenth largest economy in social market structures of post-1945 Europe is hardly an inferior consolation prize. Quality of life in many NATO countries of Western Europe is already superior to life in the US heartland itself. In the best of Western Europe, there a good balance between corporate and social goals, commitment to environmental sustainability, low rates of crime and social unrest without any obsession with the need for more domestic firearms.
Writing nearly twenty years ago now in 2001, Alison Bailin of the University of Toronto noted that the global influence of the US was being invigorated by a closer but less than democratic association with key allies, large and small, in the management of economic and strategic challenges.
Germany might drop from 5th to 10th in the global economic league stakes to 2050. It still offers a first-rate society with some degree of independence in foreign policies.
Readers interested in foreign policy issues should visit the web site of both the Australia-US Ministerial Consultations (AUSMIN) and the various NATO Strategic sites to check-out the processes being applied in this re-invigoration. Is commitment to NATO globally, a collective raising of the modernist banner in countries larger and small?
It might come as a surprise that Australia sent a small bipartisan delegation to the 63rd Annual Session of the NATO Parliamentary Assembly in Bucharest, Romania between 7-9 October 2017 (Commonwealth of Australia February 2018 – Authorised by Delegation Leader Andrew Laming MP, Bowman, Queensland):
The Assembly’s five committees meet during plenary sessions, and occasionally at other times. They are charged with examining major contemporary issues in their fields. The committees are:
Civil Dimension of Security
Defence and Security
Economics and Security
Science and Technology
By broadening the scope of the Alliance and its global partnerships to cover economics, politics, science and technology, NATO can interest the leaders of once neutral countries such as Sweden, Austria, Switzerland, Ireland and the countries of Central Asia to have varying degrees of involvement with a military alliance that is now embedded in mainstream politics. It is supported by NATO Parliamentary Assemblies in almost every NATO Country and NATO Associate.
Clinging onto the US economic and strategic models of development is the preferred path for NATO Associates. Some centre-right mutations of democracy as practiced in Egypt, Morocco, the United Arab Emirates (UAE), Afghanistan and Pakistan are accepted into the broad fold of NATO Partners.
Can progressive leaders in Australia weave policies that maintain national independence with a commitment to this militaristic style of global outreach?
Towards an Australian Social Market Balance
In an Australia economy that is about 60 per cent the size of the South Korean economy in Purchasing Power Parity (PPP) Terms, overseas corporate inducements still scoop up some of the best initiatives in Australian IT research applications.
No-one seriously suggests that the developmental state model which has caused so much corruption in South Korea should be applied here (ABC News Online 28 December 2017). The Seoul High Court recently jailed the Vice President of Samsung Electronics for attempting to bribe former President Park Guen-hye.
However, assistance can still be given to companies and even government services which have an inadequate financial base to avoid overseas take-overs.
Google Maps developed from the sale of Australia’s Where 2 Technologies in 2003 (SMH Online 24 August 2014).
CSL Laboratories was privatised in the 1990s because the federal government lacked the financial capacity to support a thriving public-sector enterprise produced blood plasmas for local and domestic markets, vaccines and low-cost medicines in competition with multinational pharmaceutical giants (The Australia Institute Online 1995).
In this post-resource era, it is important for national government investment funds such as a future Advance Australia Fund to assist in the expansion of firms with proven technological possibilities. Let’s take the possibilities of ASX-listed cloud computing stocks:
There has been an increasing uptake from customers for cloud solutions, whether private or public cloud, and for client demand shifting from the traditional IT department towards increasing conversations and engagement from the operating business divisions.
Cloud providers engage customers in different ways – some direct to market while others like Microsoft sell on through channel partners.
Below a market cap of $300 million the largest is Data#3 on $269m, then DWS ($179m), RXP Services ($136 m), Empired ($99m) and Rhipe ($90).
Traditional IT consultancies have faced a natural head wind as some larger Australian corporates have reduced their spending over the past few years. Part of this is driven by shifting some of their IT spend offshore to places like Manila or Bangalore, and part from an increasing focus on costs, with both impacting some traditional consultancies.
That being said, we have seen a continued trend towards international participants purchasing Australian IT service providers. We’ve seen this with Oakton (which was acquired by Dimension Data in 2014), UXC (acquired by CSC in 2016), ASG Group (acquired in 2016 by Nomura Research Institute) and which then acquired SMS Management and Technology recently in 2017.
We think this trend is likely to continue as large international participants look to expand into overseas markets, especially where they are struggling to generate revenue growth in their core markets and given credit funding costs are relatively low.
Local Australian political commitment to market ideology has its social risks as shown by some trends in the US economy as the heartland model for entwined corporate and strategic priorities.
Lacklustre Social Justice Performance
While the Wall Street Financial System rules globally through finalisation of capital, advanced technology and the profound influence of the US military industrial complexes with the support of allied countries, the entire deck of cards is vulnerable to political changes within the USA itself.
There are great tensions in the US from terrible wage rates for working people in largely non-unionised workplaces. Average hourly rates for lower income workers are distorted by extraordinary wage differentials. US Average Weekly Earnings for lower income workers are well below the official stagnant rates of + 0.7 per cent in the past four months to April 2018:
The federal LNP’s hype about the value of more flexible wages with more austere penalty and holiday rates is severely challenged by the experiences of the US heartland.
By the race track and the Pacific shoreline at suburban Del Mar in San Diego, under-paid process workers or business aides might notice the unaffordable housing prices and extraordinary mortgage repayment as they pass by the shop-fronts of local property agents:
NBC News Online captured the plight of homeless people in San Diego:
SAN DIEGO — Three years ago, Kevin Tate lost his job fulfilling orders at a warehouse. He lived with his ailing mother, but when she died a year later, the 62-year old ended up on the street. He got by riding trains, spending days at a methadone clinic and showering at San Diego’s beaches.
But since December, Tate has been living in a tent.
It’s not the kind of jerry-rigged shelters made from tarp or cardboard that dominate sprawling skid rows from San Diego to Seattle. This white warehouse-like structure, known as a “bridge shelter,” straddles a major city block, and it comes equipped with HVAC, showers, an eating area, informal TV lounges, laundry facilities and round-the-clock security. At least once a week, a visiting mobile medical clinic provides exams, medications and vaccines.
It is one of three semi-permanent structures the city of San Diego put up in December in a desperate attempt at triaging the homeless crisis and the resulting Hepatitis A outbreak. Surging real estate values across the state have decimated affordable housing options, resulting in record homelessness. West Coast cities host growing encampments of people living in the streets, leading to poor sanitary conditions, in which Hepatitis A thrives.
The Wider Emergent Wealth Divide
Stresses are generated in the USA by the extraordinary wealth divide between the top and lowest strata of the population as measured by the UN’s R/P 10 per cent and 20 per cent ratios. No other developed country tolerates this level of inequality as a national article of enduring political faith in the merits of personal enterprise. This social divide between rich and poor has deteriorated under President Trump.
Changing this situation for the better would require a unionised workforce and massive redistribution programmes through social security and extension of essential services (Inequality Profile by Josh Hoxie 29 January 2018):
One in five households has zero or negative net worth. They live in Underwater Nation, the population of people precariously teetering on the edge of financial ruin. Millennials are slated to be the first generation in American history who will do worse financially than their parents. This was the case before Trump took office, but it’s increasingly obvious that Trump’s actions will make these problems worse, not better.
According to the Institute for Policy Studies (2017), the twenty-five richest billionaires in the USA control about one twentieth of the entire national wealth.
The Uncertain Long-Term Political Consequences
A developed society under so much internal stress will need to adapt politically. Are such changes possible in the shorter-term?
The mainstream media focuses on polling for the mid-term elections on 6 November 2018. This event will elect a new House of Representatives and just one third of the senate for a new six-year term.
The current estimates from the FT Online (13 May 2018) does suggest that the swing to the Democrats has moderated in both houses of Congress but there are still a lot of line ball calls in the polling. The biggest short-term variable is the level of the turn-out for the mid-term elections. There is still a high level of political apathy within the US progressive electorate.
Apart from a minority of progressive leaders in the Democrats, the prospects of real structural changes are challenged by the absence of ideology in the mainstream US electoral system. The US needs a committed mainstream social democratic party.
Age might have caught up of Joe Biden and Bernie Sanders as presidential nominees in 2020 for the progressive cause. Pragmatic Democrats might want former Governor Deval Patrick of Massachusetts. More radical opinion favours strong personalities like Elizabeth Warren.
In the less than likely event of an Elizabeth Warren Presidency, the federal LNP in Australia would have to contend with a US Administration that did not sing the old military engagement strategies and market ideology. Where would Australia stand after generations of dependency in strategic and foreign policies?
Just as likely is another term for a Trump-style administration with a flamboyant approach to world leadership.
As the weather warms up in US cities new musical voices like those of Donald Glover write, sing and rap to a new beat as explained in the Guardian Online’s coverage of the new musical video from Childish Gambino (12 May 2018).
Australians might well watch fewer hours of eyewitness news and strive to find out more about more about what’s in the streets and shopping malls of the US heartland. The current focus on President Trump’s tweets as front-line news needs to stop. It is a diversion from social reality in the contemporary USA which is still a pacesetter in the forging of progressive modernism.
Denis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in advancing pragmatic public policies that are compatible with contemporary globalisation.