MJ

Will read some other time.

Don’t you think that if the business elite of Hong Kong would have not seen the “light at the end of the tunnel,” despite all legal and pseudo-legal (since 99 years is a whole a lot of time for a legal paper to be of relevance if there is no adequate will) could have stalled the process and done everything possible to at least dragl the process of integration? As to US selling weapons to Taiwan, I cannot take such argument at its face value. Nor I can buy the argument about certain lobbies’ power. The lobbies’ power stops where the US national interests come to the play. And the Taiwanese lobby is a very small player in such a big “game.” Did Armenia choose to downscale its economy? Didn’t the whole ordeal imply a tremendous cost for the Armenian economy? Also, in case of Armenia, it was not the oil pipeline that forced the Armenian economy to go into a downfall (which may still continue) but the implications along the lines of Armenia’s isolation from the regional processes and the prevention of her assertion of the role of a subject of international politics. Also, why would Russia mind supplying oil to China? If the reserves are there and the need for supply continues growing in China, what’s Russia’s problem? Wouldn’t she be happy to build another pipeline to China? ( As a side note, LNG continues to play relatively small role in world markets and it will take years for it to become a viable source of energy. For now, it is very expensive. ) I don’t think that the Japanese military is of much consequence. I also think that at the end of the day, governments of non-ideological countries are very rational. So, I think the rationality will prevail – be it in China or Japan. Why would US be interested in “selling security” if there would be no need for such? Why would US not be interested in security and stability everywhere and sell, rather, the primary products where she has advantage – intellectual and industrial expertise and know how? And besides, why to sell something to Japan if Japanese voluntarily and [immensely] invest inside the US, thus helping the development of the US economy? Perhaps the same can be said about China. The world is changing rapidly and the stereotypes of 50s or even 70s shed no light on what is going on today and where the world us headed. About the straits… Just looking at the map you have referenced and visualizing the Bosforus strait, wouldn’t you agree that we are talking here about two very different landscapes – one which encompasses international waters, and another one which is confined within territorial waters? Furthermore, why does US need to “control” the Malaca strait if it is not for guaranteeing the free passage there? What strategic interest does US have in blocking it? So that no one gets dominating status in any straits and free passage based on fair commercial rules is guaranteed to every one, don’t we need that infamous New World Order ? Also, wouldn’t you agree that the environment was/is not a merely “pretext” in Bosforus but a real issue? Otherwise, what’s the difference for Turkey whether the oil will flow through its territory through land or water? Are the tariffs less in one case compared to other? P.S. I have to jump out of this conversation and just relax, since tomorrow have to start writing something which is of more tangible consequence to me.

When you talking about “US selling out Taiwan,” I don’t understand it. US policy has always been that Taiwan has to go back to China – only peacefully. And it will happen the same way it happened with Hong Kong, where there were enough nationalistic agendas as well. The issue will be resolved, I think, as China makes further progress towards free markets, and Taiwan understands that either she can be isolated from the economic perspective or may become part of world’s fastest growing economy. Basically, I am claiming that it would be recognized that the strategy of “carrot” would produce better results than that of a “stick.” As we know, getting pipeline pass through your territory or not (see Armenia) doesn’t change the big picture political paradigms. I would not interpret Japan’s worries as concern about China’s control in the region, which is there whether pipeline or not, but the additional tariffs that China might have imposed for transportation, thus increasing the final price of oil. I think Asia also will organize into a block with no trade, labor and other barriers, and sooner or later, China will enter it, erasing any concerns that Japan may have or making them irrelevant. The control of a channel matters only under circumstances of a war – actual or economic – where economic embargo is imposed by virtue of closing the channel. This may lead to unpredictable and undesirable results contrary to US interests (in the case of the Malaca channel) results. One example is the closing of the Suez channel by Egypt for the Israeli ships, which resulted in the 1968 war. I don’t think Egypt and others on her side liked the results. As to Europe's reversal of the current "events," I don't see it happening without trmendous shocks due to the socio-cultural layout of the European reality. Even if they would reverse, by some magic, the "events," the "train would have long left the station," and all they would need to do would be to catch up.

The US policy in the issue of Taiwan has always been clear – One China Policy - however resolution of this goal through peaceful means. Only two-three weeks ago the US State Department made yet another such statement, leaving Taiwan at unease. I don’t see problems with Japan. Japan will come along as well and quite readily. As to the Russian-Japan oil pipeline, oil or any single commodity does not shift political paradigms from one pole to another. Oil is an international commodity and there is international market for it. Whether from Russia or elsewhere, Japan and others will buy oil at more or less the same price – if to discount variety of transportation and storage costs. The important thing is that adequate volume of oil be dumped in international markets – it doesn’t meter where it comes from and where it goes. It is as simple as global demand and supply equilibrium settled according to what is called Dutch Auction in the economic literature. I also think Russia will be a junior partner in any major development – one foot in Europe and another one in Asia. And this is consistent with its geographic span. As to France and Europe investing in China, why not? Who is against it? But before Europe may have any substantiated claims in global economy it has to yet prevent the steady and potentially rapid downfall of its economy and the crash of its currency largely resulted from the deregulation of the Chinese currency.

I think the glove is thrown not into US face but EU. US and China are strategic partners for the long run.

Isn’t it a mind bugling deal manifesting the arrival of new world paradigms? Assuming, certainly, it will go through and be executed. Another interesting and not an uncharacteristic observation in this article (and I largely disagree with the analysis of the article) is that the European Union, at least as a relevant world economy, is nowhere to be found. That is inline with what I would project the wiping out of the foundations of economic strength of the so-called European Union with the advancement of the Chinese phenomenon.

I don't have arguments with you on the subject. But interestingly enough, the same person who can be very sincere in a private circle, cannot be such publicly - according to the Armenian standards.

But does it fit into the mainstream Armenian culture? I mean the sincerity. Isn't it against "tghamardkutiun?" It is not really "mucho" to be sincere (to the degree that you desire), isn't it? Obviously, I am being a little sarcastic, but I hope you get my point. Why to blame LTP in something which is a common Armenian cultural quality?

In earlier days, up to 1993 or 94, one of my primary problems with him has been that I have seen him being too arrogant (which I would think would prevent him doing what you as for). However, some of my friends who know him better, and knew him for long time, tell me that I am/was wrong. I would like to see him speak. But who knows...? About a year and a half ago, I thought that his life was hanging on a hair, i.e. he was the target #1 in Armenia for assassination. I think that danger is gone, now. In fact, I think he has to speak, and not as a politician, but someone who has earned a unique place in Armenian history - an Armenian leader who has won one of the most important battles in the history of Armenia.

I don't know, Armen. But do you think the people want to hear from him? Have they forgiven him?

Vava, to continue, as to your arguments regarding the economic issues, I agree with you as a matter of theoretical argument. However, there is no evidence that it applies to the current circumstances. Furthermore, there is a contrary empirical evidence. You don’t have to be an economist to understand the economic paradigm you have brought up. You have to just understand the concept of infinity. National debt is an important device of market organization. Each year, or more frequently, the government issues so-called zero-coupon bonds, which have an extremely important role, without which the markets cannot operate on the current capacity. As to my “hard-core” comment, first, it meant to be a joke, second, you are a hard-core lefty.

Armen, I am not sure I have a direct answer to such question. It depends on a lot of things. But I can give you an analogy: if you had a busyness, that has had a good track record for a couple of years, have good pro-forma estimates demonstrating solid earnings, you can borrow something like 75% debt against 25% equity (if collateralised, then even higher leverage may be created). I'm bringing this example for illustration purposes, only. Note that three are such businessmen who cannot imagine any borrowing (mom & pop shops, primarily, and Ross Perot). I could give a more commercial answer saying that I know very conservative funds, which lend as long as 1.2 debt service coverage ratio is met. But this would not be a HyeForum conversation. As to your other comment regarding corporate taxes and Republicans, I think it is resulted from misconceptions. To speak more rigorously, C-Corp owners traditionally have paid very high taxed by virtue of paying taxes twice on the same income - first (currently) 33-35% federal corporate tax, and then the owners pay dividend tax. Note that there is no such practice in many developed countries, including in UK. In the Clinton and Bush era, dividend taxes have come down to even the field.

What does this mean, Armen?

Azat, I think the president has responsibility. He has to help to offer alternatives. He has offered educational programs for the people whose job is not coming back, so they have to learn new skills. As always, he has not been very articulate in explaining his remedies and the ways of taking advantage of them. I don't think this is an issue of him not being articulate, only, since there are enough articulate people in their administration. It is, I believe, an attitude towards playing to the Media and using PR. I think they are disgusted to do it. I, personally, understand it, since I would be disgusted to play that game, myself. But I am not a politician and he is, i.e. he must play that game if he wants to shape proper public image. Now, as to ethanol, cotton, and other subsidies, I am against them. I think it is a matter of time for all this to disappear. But it is tied to internal politics and there are some relevant interests preventing (for the time being) the office of the president and the congress from lifting these subsidies - whomever may run the country. As to the stock market being the indicator of the state of economy, I don't think it is. The Clintonian era is the best proof of it 0 hyperinflated stock market, collection of higher than ordinary state revenues through taxation of the dividend income, however rotten economy which sooner or later will be adjusted downwards (Enron is the poster-child of that Clintonian blown-up out of proportions economics). To use another cliché, the stock market is not necessarily indicative of the current state of the economy, but of expectations for the future. To suggest better indicators of the state of economy, I would repeat to a larger degree what Armen has already said. Would like to add only one comments: the deficit is not always and necessarily a bad thing. As in any business, the same way for a country, the deficit sometimes may be a good thing, if it is not out of proportions. In businesses, there are benchmarks as debt/equity ratio or debt service coverage ratio. Businesses sometimes frequently operate under "deficit," at the expanse of the borrowing, to grow the company. According to this kind of logic, which is completely acceptable to me, the (4%) deficit, as we know it, is quite normal, if it is bundled with other measures, which stimulate adequate growth of economy. On this ground, Bush has done absolutely the right thing and it is consistently bearing significant positive results. Don’t want to make a commercial or academic speech, so I'll stop here. P.S. I consider all these conversation on the religious right or “hicks” delivering victory to Bush to be garbage.

WOW, Vava... Even a hard-core lefty like you may sometimes express sober thoughts. [j/k] You can add the metallurgical industry, textile jobs, customer support jobs in software and other industries, most of the manufacturing jobs (microelectronics and so on), etc. How in the hell is anybody going to prevent the "outsourcing" of these jobs or bring them back to US, unless bringing the history back by about 15 years? Besides, is it bad that such jobs have gone out to developing countries? Isn't it their only chance to have any jobs at this juncture in history? Finally, how about the possibility of some of these jobs landing in Armenia?