Parts to Wholes: the Socionomic Systems Nexus

This is Part 3 ( of 3) of a week that saw a lot of interesting postings across the spectrum of our interests. Prior posts focused on Political Economy and the consequences for Politics & Policy. The argument being that economics and economic development is the foundation that underlies all other decisions but the choice of policies and the political processes by which they are developed control the trajectory of the economy. And further that these decisions are reflected in the rules of the game, the Institutions, by which we managed our societies and our relationships between societies. The third leg of that stool however is values – and this week was a huge swath of interesting and valuable readings, albeit some very painful ones, on Values and Culture.

 

Stop and ask yourself what are your values ? That is, what are the principles by which you and those around you evaluate the world, make choices and judge the state of things ? Everybody has values, reflected in the choices they make, even when those values aren’t explicit, thought out or formal. What do you think they should be ? What role do you think they should play ? What is the value of values ? Now those are important and fundamental questions.

 

Values help tell use who we are, our place in the world, how we relate to others and what we expect of them. In particular they are the glue that holds are societies together. Let me borrow from Douglas North, Nobel laureate in Economics, who says “The greater the specialization and divisions of labor in a society, the greater the measurement of costs associated with transacting and also the greater the costs of devising effective moral and ethical codes”. He goes on, “Strong moral and ethical codes of a society is the cement of social stability which makes an economic system viable”.

 

In other words the more complex a society and the larger it is the more difficult it is to get everybody to work together rather than pursue their own advantage only. Put more strongly, without a common set of strong, shared values societies are NOT feasible nor is development possible. We’ve spent the better part of the last 100 years testing a) whether or not that’s true and b) whether human kind was some sort of programmable, socially engineerable robot who could be re-programmed to suit the beliefs of the ideologists. In fact I argue that the 20^th C. was the largest field experiment in political economy in history and that the ideologies of Communism and Fascism failed massively and miserably.

 

So as you skim over the following excerpts, and hopefully follow-up with the originals for more depth where desired, that might be worth remembering.

Values & Attitudes

  'The Stillborn God: Religion, Politics, and the Modern West' The sophisticated story that Mark Lilla, a professor of the humanities at Columbia University, presents in “The Stillborn God” adds nuance and complexity to the intellectual account we tell about the West’s thinking on religion and politics, and how it managed to separate (sort of) the one from the other. Lilla wants to challenge the view that the “Great Separation” — the prying apart of political theories from theology — was analogous to, say, the Copernican Revolution, that it constituted a discovery at which those thinking well would eventually arrive and that, once discovered, was secured in intellectual history’s linear progress. In Lilla’s telling there was, first of all, nothing inevitable about the Great Separation. In fact, it is political theology that comes most naturally to us: “When looking to explain the conditions of political life and political judgment, the unconstrained mind seems compelled to travel up and out: up toward those things that transcend human existence, and outward to encompass the whole of that existence. ... The urge to connect is not an atavism.” Indeed, this urge is so irresistible, Lilla argues, that only highly unusual circumstances can compel us to give it up. Those unusual circumstances were provided by Christian theology — but not, as some recent religious apologists have argued, because the Judeo-Christian framework itself promotes rationality and tolerance. Rather, it is Christianity’s own fundamental ambiguities — torn between a picture of God as both present and absent from the temporal realm, an ambivalence powerfully represented by the paradoxes of the Trinity — that made it “uniquely unstable,” subject to a plurality of interpretations that became institutionalized in sectarianism, and hence to several centuries’ worth of devastating upheaval.

In the Shadow of Horror, SS Guardians Frolic Last December, Rebecca Erbelding, a young archivist at the United States Holocaust Memorial Museum, opened a letter from a former United States Army intelligence officer who said he wanted to donate photographs of Auschwitz he had found more than 60 years ago in Germany. The photos provide a stunning counterpoint to what up until now has been the only major source of preliberation Auschwitz photos, the so-called Auschwitz Album, a compilation of pictures taken by SS photographers in the spring of 1944 and discovered by a survivor in another camp. Those photos depict the arrival at the camp of a transport of Hungarian Jews, who at the time made up the last remaining sizable Jewish community in Europe. The Auschwitz Album, owned by Yad Vashem, the Israeli Holocaust museum, depicts the railside selection process at Birkenau, the area where trains arrived at the camp, as SS men herded new prisoners into lines. The comparisons between the albums are both poignant and obvious, as they juxtapose the comfortable daily lives of the guards with the horrific reality within the camp, where thousands were starving and 1.1 million died. [ Slide Show ]

 

What I Learned from My Dad's Death Sol Gellman was my dad and he just died. I want to tell you the most important thing about my dad and the most important thing I learned after he died. Dad was an architect, and he possessed an amazing skill rare even among architects. Dad could draw upside down. That way the client would see the drawing face on without Dad having to turn the paper around. I always thought it was a terrific achievement that I would never master. Now I am convinced that dad did indeed teach me how to draw upside down. Drawing upside down is really just taking into account how other people are seeing things. It is the ability to put yourself not into their shoes, but into their eyes and their minds. Drawing upside down is a skill we can all possess. It just requires learning and love. When we help our children not to just follow the rules we set for them but to understand the wisdom of those rules, we are drawing upside down. When we encourage our employees or those we supervise to stop us and ask us to explain something until they understand it fully, we are drawing upside down. When we try to understand how our words might be heard by those we love, we are drawing upside down. The most important thing I learned after my dad's death is the immense importance of expressing your condolences to those who mourn.

A Beloved Professor Delivers The Lecture of a Lifetime Randy Pausch, a Carnegie Mellon University computer-science professor, was about to give a lecture Tuesday afternoon, but before he said a word, he received a standing ovation from 400 students and colleagues. He motioned to them to sit down. "Make me earn it," he said. They had come to see him give what was billed as his "last lecture." This is a common title for talks on college campuses today. Schools such as Stanford and the University of Alabama have mounted "Last Lecture Series," in which top professors are asked to think deeply about what matters to them and to give hypothetical final talks. For the audience, the question to be mulled is this: What wisdom would we impart to the world if we knew it was our last chance? It can be an intriguing hour, watching healthy professors consider their demise and ruminate over subjects dear to them. At the University of Northern Iowa, instructor Penny O'Connor recently titled her lecture "Get Over Yourself." At Cornell, Ellis Hanson, who teaches a course titled "Desire," spoke about sex and technology. At Carnegie Mellon, however, Dr. Pausch's speech was more than just an academic exercise. The 46-year-old father of three has pancreatic cancer and expects to live for just a few months. His lecture, using images on a giant screen, turned out to be a rollicking and riveting journey through the lessons of his life.

He began by showing his CT scans, revealing 10 tumors on his liver. But after that, he talked about living. If anyone expected him to be morose, he said, "I'm sorry to disappoint you." He then dropped to the floor and did one-handed pushups. [ Video ]

Science and Culture

When History Changed Course As Jay Winik reminds us in "The Great Upheaval," the notable figures of the late 18th century -- "perhaps the greatest galaxy of thinkers and doers in history" -- had their own interlocking directories. "All the great figures of the day, from one end of the globe to the other, watched one another and reacted to one another -- the Americans, the French, the Russians, the Ottomans were all part of one grand, interwoven tapestry." For that reason, as Mr. Winik shows, the fate of France was tied to that of America, and the fate of Poland to that of Russia, and America to England, and England to France, and so forth. In some odd way the world was smaller then than now. This is part of Mr. Winik's thesis in "The Great Upheaval," a remarkable work of history, a sweeping panorama of great leaders, great thinkers, great battles and great stakes, with nations and civilizations hanging in the balance. By some accident of historical physics, the signature struggles of the millennium were all crammed into one generation -- or so it seems -- pitting the individual against society, freedom against tyranny, secularism against theocracy, change against stability. Powerful forces of the time, Mr. Winik says, "raised doubts, discredited ancient customs, bred skepticism, unraveled old standards and gave birth to new ones, undermined the comfort and support of tradition, and, as monarchy weakened and republicanism strengthened, led to the emergence of the modern age."

(10*) Faith and Progress The history of the world over most of the past four centuries has been shaped decisively by the exploits of English-speaking people. First English then British then American power has been more economically productive and militarily and strategically successful than any other. A decisive factor in this history of success is that both the British and the Americans came from a culture that was uniquely well positioned to harness the titanic forces of capitalism as they emerged on the world scene. The British and Americans have proved better able than others to tolerate the stress, uncertainty and inequality associated with free-market forms of capitalism, and have been consistently among the best performers at creating a favorable institutional and social climate in which capitalism can thrive. This aptitude for capitalism has at least some of its roots in the way the British Reformation created a pluralistic society that was at once unusually tolerant, unusually open to new ideas, and unusually pious. In most of the world, the traditional values of religion are seen as deeply opposed to the utilitarian goals of capitalism. The English-speaking world, contrary to the intentions of almost all the leading actors of the period, reached a new kind of religious equilibrium in which capitalism and social change came to be accepted as good things. Indeed, since the 17th century, the English-speaking world for the most part has believed that embracing and even accelerating economic, social, cultural and political change fulfills their religious destiny. In the 18th and early 19th centuries, the Anglo-American world synthesized its religious beliefs with its unfolding historical experience to build an ideology that has shaped what is still the dominant paradigm in the English-speaking world, the deeply rooted vision of the way the world works that lies behind the physics of Sir Isaac Newton, the political economy of Adam Smith, the constitutional theories of Thomas Jefferson and James Madison, and the biological theories of Charles Darwin: that of the self-regulating dynamic equilibrium. What is interesting about this declaration isn’t just that the Church of England made it so early. It is that the Church took the news so phlegmatically. If no church and no book can tell us the infallible truth about God, why go to church and why read the Bible? For that matter, why do good and abstain from evil? Obviously, not everyone questioning these certainties reacted so calmly. Dostoyevsky’s characters lose their faith in absolute moral order and murder their landladies. French skeptics see through dogma and become militant, anticlerical atheists. Diderot longed to see the day when the last king was strangled with the entrails of the last priest. Others have thought that, without a basis in absolute religion, no social order can stand. We hear these same worries today from neoconservative intellectuals who fear that without some kind of absolute, detailed and unchanging moral code we are slouching toward Gomorrah.

MORAL PSYCHOLOGY AND THE MISUNDERSTANDING OF RELIGION I study morality from every angle I can find. Morality is one of those basic aspects of humanity, like sexuality and eating, that can't fit into one or two academic fields. I think morality is unique, however, in having a kind of spell that disguises it. We all care about morality so passionately that it's hard to look straight at it. We all look at the world through some kind of moral lens, and because most of the academic community uses the same lens, we validate each other's visions and distortions. I think this problem is particularly acute in some of the new scientific writing about religion.

 

"The literary life" at 25 On the state of “the literary life” a quarter-century after Joseph Epstein wrote on this subject for our inaugural issue Twenty-five years ago, for the inaugural issue of The New Criterion, I wrote an essay describing what I thought was the literary situation of that day. Here I am, twenty-five years later, writing an essay on the same subject, setting out to describe how things have changed between then and now. I believe I can promise that I shall not write a third essay on this subject for the fiftieth anniversary of The New Criterion. My earlier essay, reread today, does not seem to me wrong so much as it seems a touch quaint. My essay of twenty-five years ago featured the attenuation, the thinning out, of literary culture. Criticism had become professionalized in the universities, with French theory beginning to make heavy incursions into the old common-sense American tradition, not at all to criticism’s gain.

Posted by dblwyo at 03:35 PM | Permalink | Comments (1)

The prior post of a 3 part Weekly Reader (this is #2) was partly an introduction to the whole area of Political Economy and the importance of Economics as the foundations of everything else we want to do; after all if you can’t pay for it having a debate over what movie to go, what child to educate or which sick person to treat is a tad frustrating. At the very best. Here we shift gears to talk bout domestic Politics and Policies more specifically.

 

There are two 5* listings in the Special section. One on the currently growing influence of Hispanic voters and the other on revising the social contract. Both are important for their own sakes, are critical for the future of the country and also perfectly tied to the deeper questions raised in the last post.

 

We’ve always been a nation of immigrants and despite all the rhetoric (did you see “Streets of New York btw ?) in the long-run immigrants have always more than paid their way and helped grow this country. Well it’s the Hispanics turn. In fact if the economy is going to keep growing we need them; and we need them to be increasingly prosperous. As they’ve gotten jobs and skills and raised their children they’ve moved up the economic ladder. But where will they go with regard to socio-political choices – that’s the question. And neither party is being constructive.

 

Speaking of which one can think of the Great Depression and the resulting changes in policy created by FDR and the Democrats as a re-working of the fundamental compact, a Social Contract, that holds this country together. It probably saved us from either Fascism or Communism (again do you know who FDR thought were the two most dangerous men in the country, in the 30s ? Huey Long – the Populist demagogue and Gen. Macarthur -  the quintessential man on a white horse). But that model reached a level of diminishing returns and futility with the social engineering projects of the sixties. Which led to the Reaganite counter-revolution of the 80s as the Republicans replaced the Dems as the party of ideas.

 

Well we’ve reached a new stage of idea exhaustion and the re-hashing of old shibboleths (empty slogans to id the true believer without content or meaning ? J ). As you look at this election which could and should be one of the most important ask yourself two key questions:

1.       What are the issues on the table ?

2.       What are the policy ideas of the respective candidates and parties ?

 

Do any of them sound imaginative, workable, affordable or effective ? I thought not. With that in mind you’ll find quite bit on the current political situation including Uncle Allen’s unvarnished opinion of the Republicans and Bush as well as the Dems. Not flattering to say the least.

 

We finish with a small example of a workable “policy” with a pointer to an interesting article on Cinnci’s Children’s Hospital. Which has built itself into a world class institution by focusing on where it best serves its’ patients, how best to serve, and measuring performance against outcomes. One has to wonder if there’s a broader, scalable strategy for workable policy here ?

 

‘Cause we sho ‘nuff need to get some of that, soon !!

Special & General

(5***)Hispanic Voters Flex Political Muscle How has Hispanic influence grown? Hispanics are the fastest-growing minority group in America, at 14% of the population. But they now represent 9% of the electorate because of lower citizenship and participation rates. About one-third of the 44 million Hispanics in America are too young to vote, while one-quarter aren't citizens. But the immigration debate, which sparked massive rallies last year across the country, is widely expected to boost Hispanic political participation. Hispanics accounted for 8% of the electorate in 2006's elections, up from 6% in 2002. Univision has promoted a national campaign to get U.S. citizenship for one million legal permanent residents and register them to vote. Citizenship applications were up 59% in the first five months of the year. Which party has an edge? While about 85% of African-American voters consistently weighed in for Democratic candidates during the past few decades, Democratic support among Hispanics has slipped in recent years, from 73% for Bill Clinton in 1996 to 53% for John Kerry in 2004. President Bush and political adviser Karl Rove attracted Hispanic voters to the Republican slate by emphasizing the importance of family and culture and by calling for immigration overhauls. While Bob Dole won about 21% of the Hispanic vote in 1996, Mr. Bush received double that rate of support in 2004. Joe Garcia, the director of the Hispanic Strategy Center at NDN, a Democratic political organization, describes the GOP's gains as "one of the single greatest accomplishments in modern politics."

(5*) The New Social Contract In 1942, Franklin Roosevelt imposed wage controls on American companies. Unable to lure workers with higher salaries, many employers began offering health insurance and other benefits. Then, in 1952, officials at the Internal Revenue Service ruled that these benefits wouldn’t count as taxable income. And so, accidentally, the modern American health and pension system was born. The system, in which families received social protections through their employers, worked well for decades. But now it’s coming apart at the seams. The proportion of people insured is falling. Rising health care costs burden employers. Workers can’t chase opportunities because they can’t bring their health insurance packages with them. As Jason Bordoff points out in the current issue of Democracy, the old employer-based social contract is eroding and the central domestic policy debate of our time is over how to replace it. This isn’t the laissez-faire social contract of the 19th century. But neither is it the centralized, big bureaucracy contract of the 20th century. It’s a contract that envisions society as a dense but flexible web of social networks, the perfect vision for 21st-century America.

 

Politics and Policies

Bush's Economic Policies Were Driven by Politics, Greenspan Says in Book Former Federal Reserve Chairman Alan Greenspan criticized President George W. Bush for following an economic agenda driven by politics instead of sound policy, with little concern for future consequences. Soon after Bush took office, Greenspan wrote in a new book, it became evident that the Treasury secretary and White House economists would play secondary roles in decisions on taxes and other issues. In addition, officials with whom he had worked in the administration of President Gerald Ford changed after Bush brought them back to Washington, he said he found. ``The Bush administration turned out to be very different from the reincarnation of the Ford administration that I had imagined. Now, the political operation was far more dominant,'' Greenspan, 81, wrote in ``The Age of Turbulence: Adventures in a New World.'' The book, an advance copy of which was obtained by Bloomberg News, is scheduled for publication on Sept. 17. The Wall Street Journal published an account on its Web site yesterday after buying a copy at a New York-area bookstore.

·         Greenspan Memoir a Campaign Gift for Democrats, Grenade for Republicans Alan Greenspan, a conservative central banker, has tossed a political grenade into the 2008 elections and it exploded right under his Republican Party. In his memoir, ``The Age of Turbulence: Adventures in a New World,'' the former Federal Reserve chairman skewers President George W. Bush and congressional Republicans for what he said was reckless spending and a politically driven economic agenda and said they deserved to lose control of Congress in 2006. By contrast, he praised former President Bill Clinton, a Democrat, and his economic record.

·         Greenspan's Dismay Extends Both Ways Former Federal Reserve Chairman Alan Greenspan spent much of the past 40 years as an influential economic adviser to both Republicans and Democrats, but today feels estranged from both. News coverage of his memoir has focused on his criticism of Republicans for forsaking their small-government principles. But in an interview with The Wall Street Journal, Mr. Greenspan expressed just as much dismay with the Democratic Party. Mr. Greenspan, a self-described libertarian Republican, said he was "fairly close" to President Clinton's economic advisers -- Treasury secretaries Robert Rubin and Lawrence Summers and Deputy Treasury Secretary Roger Altman. "The Clinton administration was a pretty centrist party," he said. "But they're not governing again. The next administration may have the Clinton administration name but the Democratic Party...has moved...very significantly in the wrong direction," he said, referring to the Democratic Party's populist bent, especially its skepticism of free trade.

CEOs, Bush Rangers Rebuff Republicans Over War, Widening Deficit, Economy Dozens of corporate executives who backed President George W. Bush for re-election in 2004, including some of his top fund-raisers, are now helping Democrats running for president. While the vast majority of business leaders still back Republicans for 2008, the stature of some of those donating to Democrats suggests that support may be eroding, seven years into the Bush presidency. Some executives expressed concern over Republican positions on issues ranging from the war in Iraq and stem-cell research to global warming and the fiscal deficit. The shift in political-spending patterns is ``very unusual,'' says Fred Wertheimer, president of Democracy 21, a Washington-based group that advocates campaign-finance reform.

Giuliani, Clinton Start `Heavyweight Slug-Out' Without Waiting for 2008 Former New York Mayor Rudy Giuliani, his bid for the Republican presidential nomination losing support, has gone on the offensive -- against Democratic frontrunner Hillary Clinton. Looking past fellow Republicans Mitt Romney, Fred Thompson and John McCain, all of them more immediate rivals, Giuliani last week assailed the New York senator over an advertisement by the anti-war group MoveOn.org questioning the motives of Army General David Petraeus. Clinton, Giuliani said, should have repudiated the ad. This week, one of Clinton's top advisers, former Iowa Governor Tom Vilsack, returned fire with a broadside aimed at Giuliani's personal life. For Giuliani, 63, stoking Republican phobias about a Clinton presidency is a way to strengthen his own frontrunner status and stem an erosion of support among party activists unhappy with his three marriages and backing of abortion rights and gun control. A Sept. 4-7 Washington Post/ABC News poll found that his lead among Republicans shrank by 12 percentage points from a July survey.

Hoosier Jump Shot Gov. Mitch Daniels has sunk more balls than he's missed When Mitch Daniels was elected governor of Indiana in 2004, his role models were Republican governors Jeb Bush of Florida and Bill Owens of Colorado. "They were both solid conservatives who were activists and had done big things," he told me. Now, reform-minded governors -- Mark Sanford of South Carolina, for one -- regard Mr. Daniels as a governor they'd like to emulate. Gov. Daniels has been energetic and successful, but his achievements have not come easily. The most daring decision, leasing a major toll road that stretches across the state to a foreign company for 75 years, prompted a wave of populist anger and drove down his popularity

Managing Outcomes Helps a Children’s Hospital Climb in Renown Reasons for the hospital’s national renown include its market-niche focus on certain rare or complex conditions. A medical-team approach coordinates the efforts of the various specialists who handle each child’s case. There is also diligent attention to quality and efficiency, inspired by a chief executive from a manufacturing background. And then there is a distinction that might seem unremarkable if it were not so infrequent in American health care: Cincinnati Children’s Hospital rigorously tracks how its patients fare, both in the hospital and after they leave. Many hospitals might claim to offer high-quality care. But they often have only the vaguest notion of how well their patients are doing, aside from a few basic measures like whether they survive surgery. Cincinnati Children’s is among the relatively few medical centers that meticulously collect a wide range of data, to let the hospital see whether patients are getting good, effective care — and to look for ways to improve. By precisely tracking how many patients develop surgical infections, for example, and why, Cincinnati Children’s has been able to identify ways to reduce that number by more than half — to 42 last year compared with 95 in 2005.

Posted by dblwyo at 03:06 PM | Permalink | Comments (0)

Another week with a lot going on – on the surface and in the depths. A turbulent week perhaps, for a turbulent environment ? J  As it happens, if you haven’t noticed, Alan Greenspan published his memoirs and it’s been covered in the general and business news extensively, if not always positively. To the point where his interviews, TV show appearances, etc. swamped the biggest and most surprising Fed rate cut in four years – which tells you where they really think the economy is going.

 

Now at this point you are more ‘n likely asking yourself so what – why do I care ? Aside from Uncle Alan’s being one of the longest serving and most successful central bankers in world history of course. Well on several fronts. But the question you’re really asking is why do I care about economics and the economy ? After all it just is.

 

Several years ago I shared a summer rental with several Audiology majors who, as they put it, didn’t care where the check came from as long as it came. Let’s all pause and take a deep breath for a minute for the enormity of that story – which is true btw.

 

Over the years it’s been my “pleasure” to have that conversation repeatedly with many folks – including a recent exchange with a long-time colleague with a good education, years of experience and great skill in business and technology analysis. While some progress has been made the emphasis here is on some.

 

I could go on (and on and on….) but let’s take it as a basis for discussion that no matter what policy you want to pursue in retirement, healthcare, social security, national defense, etc. etc. the “sine qua non” [ a useful Latin tag which means that without there is no other ] is the resources to get ‘er done. And the decisions about how much of which programs we will pursue.

 

Greenspan’s memoirs are several things – an autobiography. A discussion of Fed policy and the reasons and effectiveness of many of the decisions that underpinned the prosperity of the last couple of decades. Much more importantly it also lays out the foreseeable challenges and political barriers we face. In looking at the politics of economic policy he spares no one on either side. And his longer-term assessment is thoughtful, deep and well-grounded. If you’d like to know where the deep currents are going to be running take a look.

 

And then take a look at the rest of the listings which, given the large number, are split into three parts. Here we concentrate on Int’l Affairs and the ME. After reviewing the Greenspan excerpts and discussions it might be worthwhile to ask two critical questions:

1.       How do they trends in globalization and the re-balancing of the world politco-economic system relate to our futures ?

2.       And how do the challenges to the stability, security and reliability influence the chances – one way or another ?

Political Economy

First off the financial markets are not the economy, or economics. Economics is about, ignoring all the fancy math and charts behind which a large majority of the profession obscures their lack of insights, certain ways of looking at the world; logical habits of thought if you would. The primary question starts with the  question of how to best use scarce resources when there are more demands than can be fulfilled. In other words we make economic decisions every day of our lives. A terrible example is the practice of triage’ developed by WW1 medical personnel who had to decide who to treat now because they might be saved, who to defer for later and who to set aside because with the capabilities at hand more could be done for others who were more likely to survive. Stop and think about for minute – then apply the choices paradigm to your daily life. Work or watch TV, rake the lawn or go fishing ? If you go fishing it’s relaxing but it you work you might be able to afford more fishing in the future.

 

Those are the kinds of fundamental tradeoffs we all make every day and they lie, with some tools, at the heart of it. But your choices today have consequences too. A choice to go fishing is a choice to have less income in the future and less future fishing opportunities. An “unintended” consequence if you would. It’s surprising indeed how often policy choices are alledged to lead to unintended consequences when the truth is that people don’t think thru the steps and look at the likely and knowable outcomes.

 

In our own time choices were made in the 60s, with the best of intent, that lead to serious inflation and stagnation in the 70s and wasn’t really brought under control until Paul Volcker broke the back of inflation with Reagan’s political backing. A controversial and dangerous, but very courageous, decision. You can lay many of the problems with lower incomes and blighted lives on those unintended consequences. Still not convinced – well in John Maynard Keynes’ “Essays in Persuasion” he has a piece trying to persuade Winston Churchill not to return to a gold standard though that was the “sensible”, conservative course for sound money. The result was a major depression in the 20s in England. Later they had another that wasn’t as severe as we took the world with us in our – which was brought about by bad economic policy.

Special & General

(10*) Greenspan charts our economic course  What, then, can we reasonably project for the U.S. economy for, say, the year 2030? Little, unless we first specify certain assumptions. If we smooth through the raw data on output per hour, a remarkably stable pattern of growth emerges, going back to 1870. Annual growth of nonfarm business output per hour has averaged close to 2.2 percent. Even without adjusting for the business cycle, wars, and other crises, the range of overlapping consecutive fifteen-year averages of the annual increase in output per hour stays consistently between 1 and 3 percent. Our historical experience strongly suggests that as long as the United States remains at technology's cutting edge, annual productivity growth over the long run should range between 0 and 3 percent. Which brings us to our bottom line. Coupled with the projected 0.5 percent annual increase in hours worked between 2005 and 2030 that follows from the demographic assumptions cited earlier, a slightly less than 2 percent annual average growth in GDP per hour implies a real GDP growth rate of slightly less than 2.5 percent per year, on average, between now and 2030. That compares with 3.1 percent per year, on average, over the past quarter century, when labor force growth was considerably faster. As awesomely productive as market capitalism has proved to be, its Achilles' heel is a growing perception that its rewards, increasingly skewed to the skilled, are not distributed justly. Market capitalism on a global scale continues to require ever-greater skills as one new technology builds on another. Given that raw human intelligence is probably no greater today than in ancient Greece, our advancement will depend on additions to the vast heritage of human knowledge accumulated over the generations. A dysfunctional U.S. elementary and secondary education system has failed to prepare our students sufficiently rapidly to prevent a shortage of skilled workers and a surfeit of lesser-skilled ones, expanding the pay gap between the two groups. Unless America's education system can raise skill levels as quickly as technology requires, skilled workers will continue to earn greater wage increases, leading to ever more disturbing extremes of income concentration.

'The Age of Turbulence' by Alan Greenspan Greenspan is world famous because he was very good and very lucky at this role. During his tenure at the Federal Reserve, he made roughly 36 substantive decisions about the direction interest rates should go. Six times I disagreed with him. Five of those six times, I was wrong. (The sixth? In the summer and fall of 2000, as the dot-com stock-market bubble crashed, I would have been cutting interest rates had I been sitting in Greenspan's chair; he waited for more information to see how much the fall in stock-market values would affect high-tech investment spending before he acted.) That is an amazing record -- much better than Barry Bonds', and Greenspan clearly has never been on steroids. It is certainly much better than most economists I know could have done.

 

It Was 'Safety First,' But Critics Worried Folks Were Going Soft For both workers and travelers, early 20th century America was a treacherous land. In the year ended June 1913, almost 11,000 people were killed on America's railroads and more than 200,000 were injured. Between 1905 and 1909, there were 85 major coal-mine disasters, resulting in more than 2,500 deaths. The rule of thumb for workers erecting tall buildings was "a life for every story." Factory fires, like the 1911 Triangle Waist blaze that killed 147 people, were not uncommon. Industrial accidents were tragic, and they were also expensive, both for the company and for its workers. Employers usually offered little if any compensation, arguing that the workers knew some jobs were dangerous and took them anyway. Many workers seemed to enjoy taking risks. But gradually, more companies were dragged into court by injured workers, and the damage judgments were inconsistent and sometimes alarmingly costly. Politicians were starting to talk about regulating workers' conditions and benefits. It was in everyone's interest to reduce accidents. In 1914, a group of New York businessmen founded the Safety First Society to promote defensive living at work and at home. Its slogan: Be careful.

·         Mattel Apologizes to China Over Recall Toymaker Mattel issued an extraordinary apology to China on Friday over the recall of Chinese-made toys, saying most of the items were defective because of Mattel's design flaws rather than faulty manufacturing. The company added that it had recalled more lead-tainted Chinese toys than was justified. The gesture by Thomas A. Debrowski, Mattel's executive vice president for world-wide operations, came in a meeting with Chinese product safety chief Li Changjiang, who upbraided the company for maintaining weak safety controls.

Int’l Affairs

Asia Will Lose as `Made in China' Goes Local: Andy Mukherjee Much of the analysis of China's bloated trade surplus focuses on exports, when it's the imports that deserve greater scrutiny. In the first eight months of this year, China's exports grew 28 percent. That's less than the annual export growth of 35 percent recorded in both 2003 and 2004. More importantly, the 20 percent increase in imports so far this year pales in comparison with the 36 percent expansion in 2004 and the 40 percent surge in 2003. Slower import growth, according to Louis Kuijs, a World Bank economist in Beijing, is a key reason why China's trade surplus is spiraling out of control, creating an avalanche of domestic liquidity that's fueling inflation and asset bubbles. Chinese imports have decoupled from exports since 2005 because assembly lines in the country are increasingly purchasing intermediate parts from local suppliers. The substitution of imports with locally produced components has important implications for the rest of Asia, which has become more and more reliant on Chinese factories to tap final demand in the U.S., Europe and Japan.  According to the Asian Development Bank, more than 70 percent of the trade between China, Hong Kong, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand includes ``intermediate goods'' -- parts, components and semi- finished material. These are then used to manufacture products that are ultimately sold outside the continent. China is the ``driver'' of this regional trade, even though only 6 percent of it is on account of final consumption on the mainland.

China's Force in Sudan Signals New Global Position  China's long-touted policy of not interfering in the internal affairs of other states is giving way to a broader definition of national interests and a greater willingness to embrace global institutions and international norms -- and to use them to advance its foreign-policy goals. This year, China is set to become the world's third-largest economy, surpassing Germany. With its rise, China is in many ways trying to position itself as an alternative world power, a country that has managed to have economic progress without Western-style democracy. "China wants to play a big-power role," says Jing Huang, a specialist in Chinese foreign policy at the Brookings Institution, a think tank in Washington. "China is providing a different model of development. That's their strategy." Beijing's newly activist and pragmatic stance has given it a crucial role in the dispute over North Korea's atomic ambitions. China is even flexing its diplomatic muscles in the Middle East, opposing coercive action against Iran, which is one of its most important oil suppliers, over Tehran's nuclear programs. Chinese diplomats say the growing participation fills a void left by declining contributions from Western armies preoccupied with wars in Iraq and Afghanistan.

Rebuilding of historic Asia trade route agreed China and seven countries in and around central Asia have reached a preliminary agreement to build a $19.2bn modern-day equivalent to the historic ‘Silk Road’ trade route between China and Europe. The plan was agreed by senior officials in Manila this month and is expected to receive formal endorsement at a November ministerial meeting in Tajikistan. It is backed by the Asian Development Bank, the European Bank for Reconstruction and Development, the Islamic Development Bank, the International Monetary Fund, the United Nations Development Programme and the World Bank. The ADB says less than 1 per cent of the more than $1,000bn (€721bn, £500bn) of trade be-tween Europe and Asia is now transported through central Asia, a region that used to be at the heart of the trade route. The plan is not to follow the exact routes taken by the Silk Road, which was a series of roads and trails. Instead, the hope is to develop six corridors combining rail and road services from China to Europe, as well as from Russia to southern Asia and the Middle East. On the European side, the corridors will end inTurkey in the south and in Russia in the north. Russia has been invited to join the project but has yet to do so. Almost a third of the investment is expected to take place on Chinese soil and is therefore likely to involve funding from Beijing, which has been allocating growing resources to its remote western regions.

Good Morning, Japan -- Time Your Leaders Woke Up: William PesekRemember that credit-rating upgrade for which Japanese officials were hoping? Well, they can forget it. Investors, too. Hopes were buttressed in July, when Moody's Investors Service put Japan on review for a higher rating, citing prospects for lowering the government's debt burden. Prime Minister Shinzo Abe's resignation on Sept. 12 ensured the status quo would prevail for a while longer. To officials in Tokyo, it has always been unfair that Moody's rates Japan's long-term local-currency debt A2, the same as Bahrain, Lithuania and South Africa. Standard & Poor's grades Japan at AA, the same as Slovenia and Chile. Their rationale is that Japan is a Group of Seven nation and a uniquely rich one. The idea that the second-biggest economy would default on debt is almost unthinkable. Yet ratings upgrades are rewards for good fiscal deeds, not continued profligacy. Even though Japan has enjoyed steady growth since 2002, it has made no noticeable progress in reducing public debt. Officially, it hovers at about 150 percent of gross domestic product; observers such as the Organization for Economic Cooperation and Development put it at around 170 percent.

RUSSIA: Pure and Mighty Many young Communists (who remain a powerful political minority in Russia) are switching to nationalist parties that support the current government. The Soviet Union is being restored, in spirit, by a movement that seeks to revive the lost Russian empire. When the Soviet Union dissolved in 1991, and 14 new countries arose from the wreckage, five centuries of Russian empire building was destroyed. It was the czars that built the empire, and the communists who caused its destruction. The new government recognizes the need for a market economy, but also wants the traditional Russian dictatorship, or "strong center" to run it. Czar or commissar, it was all the same, except the communists were more politically inept and trigger happy, managing to kill off a third of the Russian population during their seven decades in power. Many Russians are nostalgic for the old empire, and power, not for the tragicomic communists. However, some symbols of the Soviet Union remain popular, and in use. The red star is still used as an identifying symbol in the military, and the Internet suffix, .su, is still in use by thousands of nostalgic fans of the bad old days.

Volcker Shows Us Why the World Bank Doesn't Work: Kevin Hassett Earlier this year, World Bank employees started a mutiny against then bank President Paul Wolfowitz. An independent panel of experts headed by Paul Volcker has just issued a report that suggests the revolt may well have been payback for Wolfowitz's anticorruption efforts. Volcker and his team were investigating the actions of the World Bank's own Institutional Integrity Department, or INT as it's known. Last spring, amid the hubbub over the job that Wolfowitz's girlfriend held at the bank, his supporters argued that the staff was hyping the issue because their president was trying to root out widespread graft within the bank. Bank apologists suggested that an out-of-control Wolfowitz, along with his INT shock troops, were politicizing a noble institution. The Volcker report suggests that corruption is worse than even the most strident Wolfowitz supporter could have dreamed. Of course, corruption is often a problem in developing countries, yet the crisis isn't just a matter of suspicious external contractors. Again from the report: ``From fiscal 2003 to 2007, INT's internal team opened an average of 123 cases each year involving allegations of staff misconduct.'' The report adds that about half those cases involved accusations of some form of fraud or corruption. Most troubling, while INT was attempting to clean up the bank, some on the staff did everything they could to interfere and obstruct. The Volcker team found ``there was then, and remains now, resistance among important parts of the bank staff and some of its leadership to the work of INT.'' This suggests that the existing cases may well have been only the tip of the iceberg.

Medellin Wonders What Pelosi, Sweeney are Smoking Is there a town in the world with a reputation worse than Medellin's? Colombia's second-biggest city has a rep so bad that it has almost become a parody of itself. In the HBO series ``Entourage,'' the characters are obsessed with capturing the evil of Pablo Escobar in a film called ``Medellin,'' chronicling his rise to head the drug cartel that ruled the city. To most U.S. citizens those three syllables are code for all that is wrong with Latin America -- the lawlessness, the drugs, the delusion that a network of thugs substitutes for a real economy. President Bill Clinton and lawmakers from both parties began to alter this picture when they passed a law to fund Colombia's demilitarization. Colombians did their part by electing Uribe president in 2002. Uribe demobilized tens of thousands of gangsters, persuading them to hand in their guns, confess to crimes and gave them stipends to begin civilian lives. Medellin contributed by choosing a reforming mayor, a mathematician with a doctorate from the University of Wisconsin named Sergio Fajardo. Fajardo worked hour by hour with police to recapture the city. He built libraries to show that gangs weren't the only ones who could help communities. Fajardo also found an ingenious way to transport the stranded hillside citizens -- by ski lift. Today gondolas carrying eight passengers each sway up and down the hill on a wire -- a commuter hypotenuse that changes the urban profile. To complete the turnaround, Colombia needs more trade with the U.S. The FTA would help by making permanent tariff reductions that currently require periodic renewal. Today, textile producers suffer in their competition with China because import tariffs are so high. The FTA would cut those. In Colombia, lawmakers have already done their part by approving the agreement Uribe has negotiated with the U.S.

ME

Israeli Nuclear Suspicions Linked to Raid in Syria The Sept. 6 attack by Israeli warplanes inside Syria struck what Israeli intelligence believes was a nuclear-related facility that North Korea was helping to equip, according to current and former American and Israeli officials. Details about the Israeli assessment emerged as China abruptly canceled planned diplomatic talks in Beijing that were to set a schedule to disband nuclear facilities in North Korea. The Bush administration has declined to comment on the Israeli raid, but American officials were expected to confront the North Koreans about their suspected nuclear support for Syria during those talks. [Israelis ‘blew apart Syrian nuclear cache’, New Details (and Lingering Questions) ]

Gates Crafts Long-Term Iraq Plan, With Limited Role for U.S. Forces. Defense Secretary Seeks Bipartisan Agreement;
No Talk of DemocracyDefense Secretary Robert Gates sketched out a long-term vision for securing Iraq that includes a continuing American military force that is a fraction the size of the one there today, no permanent U.S. bases and a significant Navy and Air Force presence in the Persian Gulf region. In an interview in the Pentagon, Mr. Gates also said part of the long-range security structure would be stronger military partnerships with some of America's friends in the Gulf area, helping them build better counterterrorism forces as well as regional air- and missile-defense systems to check Iranian ambitions. What was missing from his vision for Iraq and the broader region was talk about transforming the region and spreading democracy. Instead, the Pentagon chief seemed much more focused on transforming the debate in Washington so the next president inherits a long-term strategy for Iraq and the region that both Republicans and Democrats can support. For now, that view seems to be translating into a much more pragmatic approach both on the ground in Iraq and back home. As recently as last year, U.S. war plans for Iraq focused on building a strong, multisectarian democracy that would serve as a model for the rest of the Middle East. With national reconciliation largely stalled, Mr. Gates and Gen. David Petraeus, the top commander in Iraq, have given local commanders greater latitude to forge alternative strategies that seek to stabilize specific regions across the country as the top priority -- even if it comes at the expense of a strong central government.

• The Education of Robert Gates Over the short term, Robert Gates is, to use a phrase he borrows from the historian Joseph Ellis, “improvising on the edge of catastrophe.” Robert Gates has been a godsend. After a bombastic defense secretary, we now have a candid one. After ego, we have self-effacement. After domination, we have a man who welcomes discussion. Gates was decisive during the Walter Reed hospital fiasco. He is honest and trustworthy on Iraq. And on Monday, at the World Forum on the Future of Democracy at the College of William and Mary here, Gates delivered a speech that could define the center ground of American foreign policy. He ran through the history of the never-ending debate between realists and idealists. He noted that this debate began just after the founding of the Republic. Thomas Jefferson saw the French Revolution as a triumph for liberty. John Adams saw it as reckless radicalism. Throughout the messy years that followed, Gates explained, we have made deals with tyrants to defeat other tyrants. We’ve championed human rights while doing business with some of the worst violators of human rights. “It is neither hypocrisy nor cynicism to believe fervently in freedom while adopting different approaches to advancing freedom at different times along the way,” Gates said.

·         Center First Gives Way to Center Last  Have you noticed the change in the Iraq debate? Most American experts and policy makers wasted the past few years assuming that change in Iraq would come from the center and spread outward. They squandered months arguing about the benchmarks that would supposedly induce the Baghdad politicians to make compromises. They quibbled over whether this or that prime minister was up to the job. They unrealistically imagined that peace would come through some grand Sunni-Shiite reconciliation. Now, at long last, the smartest analysts and policy makers are starting to think like sociologists. They are finally acknowledging that the key Iraqi figures are not in the center but in the provinces and the tribes. Peace will come to the center last, not to the center first. Stability will come not through some grand reconciliation but through the agglomeration of order, tribe by tribe and street by street. The big change in the debate has come about because the surge failed, and it failed in an unexpected way. The original idea behind the surge was that U.S. troops would create enough calm to allow the national politicians to make compromises. The surge was intended to bolster the “modern” — meaning nonsectarian and nontribal — institutions in the country. But the surge is failing, at least politically, because there are practically no nonsectarian institutions, and there are few nonsectarian leaders to create them. Security gains have not led to political gains. At the same time, something unexpected happened. As Iraqi national politics stagnated, the tribes began to take the initiative.

Stories Not Reported A major problem with the war on terror is keeping score. Even if you count things like the number of terrorists killed or captured, and the number of attacks, there's no consensus on what the numbers mean. Moreover, journalists and pundits rarely take a close look at what might have happened if nothing were done. Granted, it's difficult to report on another time line that didn't happen. The government actually spends a lot of money on computer simulations that do just this. But these tend to make poorly attended news stories, so journalists avoid them. Since these simulations are not reported, they, effectively, do not exist. But consider that, without an invasion of Iraq, al Qaeda would still be flying high and exploiting its popularity to carry out more attacks in the West. In the last six years, Pakistan has been unable to assert control of the tribal territories, where numerous terrorists are hiding out. You can complain about that all you want, but that's that. Sending American troops into Pakistan risks turning the entire country against the invaders. It's not like the Pakistanis are pro-terrorist, most are not. But they have been living with the tribal problem for thousands of years, and don't want foreigners coming in and making things worse. Then there's Iraq. The idea of taking down the nastiest dictator in the Middle East had lots of support, until someone actually did it. Few in the U.S. government like to admit it, but this is a very clever strategy. It's known, since antiquity, as "taking the war to the enemy." Establishing democracy, and efficient government, in the Arab world is another front in the war on terror that did not get the attention it deserves. Establishing an Arab democracy has never been done before, and it is key to doing something about the corruption and poor government that has created terrorist organizations in the region for centuries.

• LEADERSHIP: Al Qaeda's Secret War With Itself Recent reports about Ayman al Zawahiri taking control of al Qaeda from Osama bin Laden, missed some important points. The obvious one is that bin Laden was never more than a charismatic figurehead and source of funds for the movement, while al Zawahiri has been running the show all along. More important to the debate about the future of the war against al Qaeda is that, as the organization suffers public defeats, with no off-setting impressive wins, there's a good chance that very real internal rifts will arise. Although difficult to monitor and measure, this is an important "front" in the war against al Qaeda and the Taliban.

 

Among the Believers Al Qaedism is the new protest movement By the skin of their teeth, German security services, with the help of their U.S. colleagues, prevented earlier this month what might have been the worst terrorist attack in European history. The would-be bombers, though, aren't some neglected immigrants on the margins of society. No, the danger came directly from its center, from children of good, solid homes. In comparison to Great Britain, Spain or France, Germany thought itself comparatively safe. First, because it was not involved in the Iraq war, it hoped al Qaeda would grant the country some sort of bonus. Second, because most of the roughly three million Muslims in Germany come from Turkey, where the separation of religion and politics is state doctrine. They were thus thought to be more or less inoculated against extremism. The phenomenon of extremist converts should worry us for it shows that Islam can be decoupled from its native religious and cultural background. Al Qaedism is becoming a universal, radical ideology of protest. Young Westerners in search for the most brutal anti-Western position find Osama bin Laden's ideas seductive because they are ethically hermetic. In contrast to most post-modern nation states, Islamic fundamentalism offers the kind of warm hearth for which many shaken Western souls might yearn: community instead of individualism. Moral certainty instead of moral arbitrariness.

 

Posted by dblwyo at 02:02 PM | Permalink | Comments (1)

A day late and a dollar short – my way of apologizing for the posting delay. Amazing how things swamp you when you’re having fun. While this is going up on the 26^th the magic of edit control has allowed me to backdate – so pretend you read it then if you would J  ! In any case there are several momentous changes for the week of the 16^th – not least was this was the week of Petraeus testimony to Congress. A great deal of progress has been made but there’s a great distance to go. The major problem is whether or not we see this as doable. After such a long delay in adjusting tactics and strategies and learning new tricks this is encouraging though. In particularly major progress has been made in Anbar province largely thru the US re-discovering what the Brits already had learned – you need to understand the tribes.

 

Other cultural differences that make a realistic American foreign policy difficult lie in the vast conceptual gaps between ourselves and the Arabs. They’ve lived in a world of tribal allegiances and insecurities for a millennia while we’ve been the fortunate inheritors of a millennia of thinking and practical experience in increasingly open and representative government. Strangely enough the relationship to what works as indicated by both experience and the greatest political philosophers from Machiavelli to Locke to Montesquieu  to the Federalists also turns out to be the things that are most deeply grounded in our fundamental human nature. The Special section has the three “must-reads” on this as well as a pungent assessment of the nostalgic and backward looking approach of both political parties who are basing their arguments on past shibboleths instead of new thinking. As unfortunately we’ve all noticed.

 

Meanwhile, in addition to these there have been major changes in the world. The Prime Minister of Japan, unable to escape the shibboleths and lack of adaptability of the LDP party resigned after only a year representing Japan’s continuing failure to come to terms with the need to revamp it’s governance. Speaking of which the Olizarch of All the Russias (that are left) picked a new prime minister and changed the whole outlook on the upcoming Russian presidential race; Kremlinology is alive and well as a re-discovered art. Other int’l news is about continuing challenges, e.g. the World Bank’s program against corruption was found to be honest but needing more emphasis despite it’s po’ing the staff and leading to the palace revolt that exited Wolfowitz.

 

And there are interesting pointers to more Politics, Healthcare, Climate change and (my favorite) a survey of economists actual policy consensus along with some interesting scientific and cultural readings. Bon Appetit’ !!

Special & General

(10*) To Understand Iraq, Marines Ask 'Mac' Expertise in tribal culture has given one retired Army major a key position in the U.S. effort to pacify Iraq. Though self-taught, his ideas have helped shape the Marines' strategy of forging alliances with tribal sheiks to drive out radical Islamist fighters. Tribal-affairs expert is a job that until recently didn't exist in the military -- even though Iraq has 150 tribes, and some three-quarters of Iraqis belong to a tribe. Mr. McCallister says he first saw the need in 2003 when, as an active-duty Army major, he was ushered into a meeting with an influential Fallujah sheik. The tribal leader began to warble a song about the different kinds of pain a warrior feels when he is wounded by different weapons, like a sword, a knife or a gun. "Anyone who sings about that stuff has a different take on the rules of warfare," he says he quickly concluded. "If you don't approach them correctly you can kill 30, 40 or 100 of them and they won't submit." Mr. McCallister began to search the military command in Iraq for someone who was an expert on tribal affairs. There were none. "When I suggested we find one, people looked at me like I had something growing out of my head," he says. Today, forging alliances with tribal leaders is seen as essential. Mr. McCallister insisted the tribes were essential to stability in Iraq. "Coalition attempts to bypass traditional tribal authorities and deal with the local population will fail," he wrote in a September 2003 memo to his military bosses. His ideas were ignored, he says, and he retired to be with his family. After three months home in Florida, he felt restless, unsure what to do after the military. So he returned to Iraq in 2004, working for two private contractors. He continued to study the tribes, reading books and, whenever he got the chance, quizzing sheiks about their tribal rituals, songs and laws.

Responsibility Without Power Six years on, too many Americans have only a vague understanding of what's going on with the war on terror. The main problem is the cultural differences. The Arabs, despite their oil wealth, and beneficial relations with the West, consider themselves victims of Western attacks. This is nothing new. The list of grievances goes back nearly a thousand years. Americans have a hard time believing this sort of thing, but it's taken for granted in the Middle East. American soldiers who spend a lot of time outside the wire, and among the Iraqi people, come  face-to-face with this attitude, and learn to cope. How do you deal with it? After all, the Turks, who ruled the Middle East for centuries (until 1918), had a saying, "don't involve yourself in the affairs of the Arabs." For the Turks, the ultimate technique for dealing with the Arabs was terror and brute force. It was applied as necessary over those centuries, and the Turks had very mixed feelings when the Western Allies took apart their empire 90 years ago. You deal with it by discovering that there are Arabs who understand very well how corruption, tribalism and religious fanaticism have made the Arab world an economic and political failure, and an object of fear and loathing around the world. Americans in Iraq discover that Arabs themselves are unsure what the solution is. Many see salvation in the form of migration to a more civilized culture. But many want to turn things around. There are ways to do that, but all of them take time, and a whole lot of effort. 

Looking Backward It's the 1980s all over again. The Democratic presidential candidates are running from free trade, and the Republicans are embracing Reagan nostalgia. Presidential elections are supposed to be about the future. Yet when it comes to economic policy, the 2008 contest is shaping up as a campaign in which the Republicans hark back to the economic nostrums of 25 years ago, while the Democrats wax nostalgic for the time when U.S. industry faced little foreign competition and every high school graduate could count on a lifelong job in a steel mill or an auto plant.

The Evolutionary Advantages of Selflessness It is easy to see how an instinct for treachery could convey an evolutionary advantage, but until recently scientists weren’t sure how niceness would survive from one generation to the next. Now, some researchers believe that altruistic traits are passed on because cooperation helps entire groups combat enemies. The idea that kindness evolved in this fashion was initially suggested by Charles Darwin, who suspected that wars might create an evolutionary advantage for individuals who worked together over more individualistic foes. His theory had long been out of fashion, Olivia Judson, a research fellow in evolutionary science at Imperial College London, writes in the Atlantic (subscription required). But new research suggests that Darwin might have been at least partly right. Archeological evidence indicates that a period of almost constant war between 100,000 and 10,000 years ago ended with the emergence of super-cooperative groups. Those groups probably didn’t pass on that advantage to their children simply through a gene for kindness, says Dr. Judson. She suggests that selflessness evolved with other genetic traits, such as a desire to conform to a group’s norms and an instinct to punish those who opt to go their own way. Neuroscientists have found through brain scans that when people cooperate in games in which they share hypothetical money, the reward centers of their brains light up, reflecting a pleasurable experience. The same studies suggest that punishing people who don’t cooperate also gives people a warm feeling. One indication that kindness has a genetic underpinning comes from sufferers of a mysterious condition called Williams syndrome. A missing segment of a chromosome causes people with Williams syndrome to be friendly to everyone, including strangers, frequently putting themselves in danger.

Values & Attitudes

(5*) Fear the Roller Coaster? Embrace It In these markets, everyone's afraid. It's your response to the fear that matters most. Are you going to crack up like Howard Dean in 2004? Or detach yourself, analyze and respond like Neil Armstrong in 1969? Astronauts, firefighters and soldiers train to respond to moments of duress. The rest of us are left on our own. And in most cases, the results aren't good. We generally underestimate the true dangers arrayed against us, overplaying the dramatically violent outcomes over the more insidious ones. And in times when we lack information, we're prone to imagine the worst, scientists say. We are only as effective as our emotions allow us. Which is precisely why this current market is so daunting. Consider the unknowns still in play: The choked market for short-term corporate funding. The impossible-to-value mounds of LBO debt and equity. The daisy-chain effect between liquidating hedge funds and the broader market.

Top dollar doesn't bring top quality The nonstop rise of outrageous prices All of which led us to consider how many prices in the marketplace these days are simply outrageous.  No, we're not talking about luxury goods, where prices are nosebleed high by any measure, but where you commonly get goods that wear well, look nice and last almost forever. For example, you can lay out $3,000 for a made-to-measure men's suit from Barney's or $1,500 for a men's Burberry raincoat that one of your grandkids may well be wearing -- and staying toasty in -- a couple of generations from now.

Int’l Affairs

Managing Globalization: Q&A with Nayan Chanda from Yale University

Volcker Panel Urges Change For World Bank Unit The World Bank's antigraft unit, given a prominent role by former bank chief Paul Wolfowitz, is marred by "serious operational issues" and should be revamped, according to a panel led by former Federal Reserve Chairman Paul Volcker. The committee's report recommended several changes to improve the operations of the bank's Institutional Integrity Department. They include informing country representatives of investigations earlier in the process, strengthening the rights of bank employees investigated for graft, making clear how the bank will handle the results of investigations, and setting up an oversight board. Nearly all of the recommendations were quickly endorsed by the bank's current president, Robert Zoellick, who is trying to use the report to quell an acrimonious battle within the bank over anticorruption efforts. The Volcker panel was formed earlier this year to review those efforts following complaints from bank staffers. The integrity department "has achieved notable successes," Mr. Zoellick said, "but we can do better and need to integrate its work into our operations more effectively." For decades, the World Bank largely ignored corruption, figuring that some graft was the price of doing business in poor countries. In addition, given the rapid economic growth of countries with notoriously corrupt governments, such as China and Indonesia, some development experts doubted that graft was one of the critical obstacles to economic growth.

• Panel Urges World Bank to Change Antigraft Plan (NYT) The World Bank’s efforts to fight corruption are plagued by weak management, distrust and employee resistance, a panel of outside experts said.

 

Six Years Since: A Growing List of Foiled Terror Attacks As is our tradition on the anniversary of the September 11, 2001 terror attack by al-Qaeda against the United States, we'll observe the notable occasions for which additional terror attacks have been prevented or whose blows have been blunted from achieving their aims against their targets in the past year. Here's our short list of thwarted attacks in major western countries, presented in reverse chronological order:

France Is Invaded By China: France is the latest nation to admit that its government and defense computer networks are under hacker attacks, that appear to be coming from China. Ever since late last year, there have been a growing number of such attacks on Western military and government networks. These attacks have hit major American military sites like National Defense University, the office of the Secretary of Defense, the Naval War College, Fort Hood and several defense contractors. British and German government sites were hit as well, and other European nations are also believed to be under attack. But many are unwilling to go public as yet, or are still checking to see if they have been hit.  In the United States, each of these attacks cost $20-30 million to clean up after. What no one will talk much about is exactly what was lost. The Germans admitted that nearly 200 gigabytes of data was transmitted back to China. The American, British and French attacks apparently inflicted damage of a similar scale. China denies everything. China also continues to establish the equivalent of a police state within the Chinese portion of the Internet. Many Western Internet experts didn't think this was possible, but the Chinese have gone a long way towards proving them wrong. At the same time, China is still one of the most vulnerable Internet neighborhoods. This is largely due to so much illegal (not-paid for) operating systems and applications software. This stuff tends to be less well protected than paid-for systems in the West, and China has fewer Internet security specialists.

·         Cyberwarfare is becoming scarier, Assessing the threat from cyberwarfare , Beware the Trojan panda 

Young Chinese Spread Their Language Although the West has been churning out globe-trotting English instructors for decades, thousands of young Chinese are now discovering that teaching Mandarin is an increasingly feasible way of funding foreign adventures.

 

Unable to Steer Japan, Abe Gives Up the Helm As if there wasn't enough uncertainty out there, Shinzo Abe has gone and resigned less than a year after taking office, saying he could no longer be an effective leader for Japan and leaving the world's second-largest economy in political limbo. At a nationally televised news conference early this afternoon in Tokyo, Mr. Abe suggested he lacked the political capital to "push ahead with effective policies that win the support and trust of the public" and that he had thus decided Japan needed a "change in this situation." Despite his governing Liberal Democratic Party's loss of the upper house of Parliament in July's elections and an approval level that has lingered at 30% or lower, the 52-year-old leader vowed as recently as Monday to stay in office, the Los Angeles Times notes. The immediate cause of his departure was Mr. Abe's inability to push through Parliament renewal of an antiterrorism law that let the Japanese military -- normally limited to defensive action -- participate in the U.S.-led operations in Afghanistan and Iraq. The opposition Democratic Party of Japan had threatened to block it.But as the Asahi Shimbun reports, Mr. Abe's administration has been hit by a string of financial scandals and other embarrassments that shook up his cabinet. His health minister set off a firestorm in January by referring to women as "birth-giving machines"; his agriculture minister committed suicide in May before he could be questioned in Parliament over corruption allegations; the successor at the farm ministry resigned in August over an accounting scandal; and Mr. Abe's defense minister had to quit over controversial comments on the atomic bombings of Hiroshima and Nagasaki, as the BBC reports. The biggest damage came from revelations last spring that Mr. Abe's government has misplaced pension records covering some 50 million claims. The huge loss suffered by the LDP party in July was just the most concrete form of Mr. Abe's growing unpopularity, giving the Democratic Party de facto veto power over most legislation. And the New York Times points out that while any successor won't have to call a new general election before 2009, he or she will probably face intense pressure to do so soon.

Sayonara, Abe What happens when a prime minister ignores the economy and After Abe There isn't a clear replacement waiting in the wings.

 

Putin removed his prime minister and cabinet in an unexpected move, ratcheting up political uncertainty as Russia heads into parliamentary and presidential elections. President Zubkov The new generation of Kremlinologists is flummoxed. Putin's Choice of New Premier Signals Possible Post-Succession Power Play

Enter, pursued by a bear Encouraged by its ability to divide Europe, Russia has expanded its bilateral disputes. The original list was dominated by ex-Soviet satellites (rows over Polish meat exports, Lithuanian oil imports, the siting of an Estonian war memorial, and Czech and Polish plans to host an American anti-missile defence system). But Russia is now growling at old Europe, too. Ask Sweden and Italy (trade squabbles), Spain (a Russian spying scandal), and Britain, locked in the fallout from the radioactive poisoning in London of Alexander Litvinenko. At last, the EU is reacting as a group. At the “informal” meeting of EU foreign ministers in northern Portugal on September 7th and 8th, a closed-door discussion on Russia turned into a remarkable round of soul-searching. “The tone of the discussions today was very different from anything I've ever encountered,” said one veteran. “We were all saying the same thing: this is a very different Russia.” Europe has officially sought a “strategic partnership” with Russia since 1999, when the phrase was coined in an EU policy paper. But this quest has failed, the minister said bluntly. Such a conclusion was not really driven by a shift in European thinking, he added, but by the reality of Russia's recent behaviour.

Pyongyang's Blues North Korean diplomats, the world's least accommodating individuals, have suddenly turned cooperative. In February, they agreed to shut down their only working reactor, declare the full extent of their nuclear programs, and disable all of them -- for a surprisingly low price of about $250 million of fuel oil and a promise of normalization of relations. In July, Pyongyang actually switched off its Yongbyon reactor in the presence of inspectors from the U.N.'s International Atomic Energy Agency, whom they had kicked out in December 2002. Earlier this month, Assistant Secretary of State Christopher Hill, after two days of bilateral discussions with North Korea's Kim Gye-gwan in Geneva, announced that Pyongyang would complete its extensive February denuclearization promises by the end of this year. Just yesterday, at the North's invitation, inspectors from the U.S., China and Russia arrived in the country to examine methods of disabling its nuclear facilities. Although it is unclear if Pyongyang has actually agreed to the year-end deadline, there has been stunning progress in our long-stalled efforts to disarm North Korea.

 

ME

The Petraeus-Crocker Testimony "Are we fixed yet?" House Armed Services Committee Chairman Ike Skelton's question -- asked after Gen. David Petraeus' microphone failed to work -- is something of a metaphor both for Washington and Baghdad. That microphone failure at the start of Petraeus' dramatic congressional testimony is an ironic reminder. With their testimony, Petraeus and Ambassador Ryan Crocker are trying to get it fixed -- help repair and prepare America's politics. In an article published by The Weekly Standard on July 25, 2005, I wrote: "Al-Qaida's jihadists plotted a multigenerational war. That means we must fight a multi-administration war, which means bridging the whipsaw of the U.S. political cycle. ... The Bush administration has not prepared the nation for that -- at least not in any focused manner. And that omission constitutes negligence. However, Bush critics who advocate withdrawal are even more negligent, for withdrawal without ensuring Iraqi stability is a self-inflicted defeat leading to extremely dire consequences. " With the Petraeus-Crocker testimony, the Bush administration has finally begun to build that political bridge, albeit in an awkward, belated manner. The administration's Democratic opponents deserve no credit, however. These contemporary practitioners of the paranoid style in American politics have chosen angry theatrics and smear over common sense.

The next six to 12 months will determine if Petraeus and Crocker succeeded. If they do succeed, it will benefit both the Iraqi and American people, and ultimately benefit everyone on the planet who wants a more peaceful and prosperous 21st century.

• Petraeus's Credibility Buys Bush Extra Time in Iraq to Pursue Offensive General David Petraeus's four-star credibility has bought President George W. Bush more time to pursue his military offensive in Iraq.
• General Petraeus' Sept. 2007 Letter to Iraqi Multi-National Troops
• Petraeus Sees Bigger Role in Protecting Iraqi Civilians In his testimony, Gen. David H. Petraeus proposed an American troop presence in Iraq that would be longer and larger than what many Democrats have advocated.

 

AP Interview: Abizaid cites Iraq's needs It will take three to five years before Iraq's government is stable enough to operate on its own, according to the former commander of U.S. forces in the Middle East, who said the surge of American forces has not solved the country's broader problems. In an interview with The Associated Press, retired Army Gen. John Abizaid also said that beyond attacking the global threat of terrorism with military strength, the United States has done a poor job of applying the economic, political and diplomatic means to fight Islamic extremism. "I don't blame it on any people," Abizaid said Tuesday. "I just blame it on a bureaucratic system that has been unresponsive thus far to the challenges of the 21st century. We need to change that as a matter of national priority." Abizaid said none of the candidates hoping to replace President Bush can responsibly call for immediate or complete withdrawal of U.S. forces from Iraq and other trouble spots around the globe. Too many other related issues are involved, he said, including the rise of Islamic extremism, the Arab-Israeli conflict, the proliferation of weapons of mass destruction, and the need to preserve the flow of oil from the Middle East. Abizaid called these major and pressing issues to be addressed.

League Table 2015: Al Noor Islamic Bank Grabs Top Spot You might want to rejigger those League Tables, cause here comes Dubai.According to this eFinancial News story, Dubai’s ruling sheik will open an investment bank that will compete in the Middle East and Africa and eventually move in on Europe and the U.S. You might want to remember the name: Al Noor Islamic Bank. The Middle East is quickly becoming a investing hot house. As this Wall Street Journal article points out, the Persian Gulf’s petro-states control a vast hoard of investable funds. Combined, the government investment arms alone of Kuwait, Saudi Arabia, Dubai, Abu Dhabi and Qatar hold an estimated $1.5 trillion. No longer content to hold low-yield Treasurys, these sovereign wealth funds are buying stocks, bonds, and even Barneys apparel stores. (Read more about that in this Deal Journal post). For the first time in the modern Middle East, investment is pouring across national borders, as this WSJ article discusses. That is delivering capital from places that have it, like the oil-rich emirate of Abu Dhabi, to countries such as Egypt and Morocco that need it. Private-equity firms are proliferating, raising billions of dollars designated for the region. And Al Noor will be sitting at that nexus to facilitate deals — and take its cut, of course.

 

Al Qaeda Wins Some, and Loses Some While al Qaeda still appeals to young Moslem men, most Moslems are put off by the increasingly radical practices, and ideology, of the terrorist organization. This keeps showing up in opinion surveys. The major problem has is the large number of Moslems it has killed, mainly in Iraq. This was justified by the radical doctrine of considering a Moslem who does not agree with you, a heretic. This means that person is worse than a non-believer, and can be attacked with the utmost savagery. That means you can kill the traitors entire family if you wish. This doctrine has been around for about eight centuries, and it has never worked. But it's where Islamic radicals tend to end up when they are losing.

Taliban Admit Defeat The Taliban offered to begin negotiating with the government. In Afghan parlance, that's the Taliban way of saying they are defeated and want to discuss peace terms. Over the past few months, Taliban attacks have become increasingly desperate, and bloody. But most of the dead have been Taliban. The only "successful" attacks have been those using suicide bombers, and these kill mostly Afghan civilians. The Taliban were able to build up a war chest in the last few years, allowing them to hired thousands of unemployed young men. But casualties have been high, with over a third of these hired gunmen getting killed, wounded or captured.  In the last two weeks, over 200 Taliban gunmen have been killed in battles with Afghan and foreign troops. But the biggest source of problems has been the stupid things they do. Recently, a Taliban group kidnapped a dozen de-miners. This sort of thing is very unpopular with Afghans, as even the Taliban (officially, anyway) recognize the deminers as immune from attack. The millions of mines and explosives still in the ground don't discriminate between Taliban or non-Taliban. The de-miners are arguably more important to the Taliban, who often sneak around at night in out-of-the-way places.  The Taliban also make themselves unpopular by attacking food relief convoys. One recent attack saw 13 Taliban and two police killed in such an unsuccessful attack. The Taliban want to shut down humanitarian and reconstruction projects, and thus force Afghans to support the Taliban in order to get any help at all. Most Afghans resent this sort of intimidation.

·         German general to leave Afghan mission amid dispute The general commanding the European Union's police training mission in Afghanistan is returning to Germany three months after his appointment because of wrangling with the European Union, NATO and officials inside the Afghan Interior Ministry, senior Western diplomats in Kabul said Tuesday. Friedrich Eichele, a former commander of the elite German commando unit GSG-9 who was appointed in June to head the police mission, will return to run the special anti-riot police unit as soon as Berlin chooses his successor.

Politics and Policies

Do economic jitters mean Democratic votes? Democratic strategists and candidates believe they can profit from voter anxiety about jobs and the economy. Do Republicans know how to play the issue? Fortune's Nina Easton examines the strategies.

Giuliani, Leading Republican Field, Defies Party on Abortion, Gay Rights Rudy Giuliani is in a unique position for a thrice-married Republican who has never won a statewide election and is out of step with his party on abortion and gay rights: leading the field of presidential candidates.

Dragging the Bodies Into The Sunlight American intelligence agencies, especially the CIA, are becoming more aggressive in complaining openly about politically motivated leaks, and the damage they do. These complaints have long been restricted to classified meetings with members of Congress. This would usually lead to a temporary reduction in the number of leaks. The problem is that too many politicians have access to classified data, and too many of them cannot resist the temptation to use that stuff for political gain. Too many are leaking too much and getting lots of people killed. Journalists always stand ready to take these leaks and run with them. But now U.S. intel agencies are forcing politicians to face up to the deadly results of those leaks. People die, or suffer other losses (homes, jobs, kin, reputations, peace-of-mind and so on). It's too easy to ignore these losses if you don't know about them. These losses are often kept secret in order to prevent further damage. But the war on terror is putting a lot more people at risk, not so much from the personal peril, but from leaked secrets that tell the terrorists where to attack.

Short-Circuited After a pretty good 30-year run, deregulation is on the political ropes. Although loosening the shackles on banking, trucking and airlines delivered lower prices, robust competition and political applause, it hasn't worked for electricity. California and Virginia have already abandoned the project and other states are contemplating a similar retreat. For the first time in decades, Americans are inclined to think that regulation is the thin blue line between defenseless consumers and predatory capitalists. So did free market reformers take deregulation too far? Yes and no. Yes, because they promised rate reductions they had no business promising. No, because deregulation of some parts of the system was offset by more ambitious regulations elsewhere. The end result is even more economically artificial than the one we started with. Many of the states that undertook utility restructuring in the late 1990s rolled back retail electricity prices and then froze them in place for years during the "transition" to retail competition. The headline-grabbing rate increases this year in Maryland (50% in Baltimore) and Illinois (24% in Chicago) occurred because the period of regulated prices ended -- while during the freeze period the prices of the fuels used for generation (coal and natural gas) increased significantly.

6 secrets of successful immigrants Many entrepreneurial newcomers to the United States prosper by exploiting opportunities missed by native-born Americans. Here's how three made it here.Ever wonder how some immigrants who arrive in this country with nothing can work their way into the middle class in one generation? Immigrant entrepreneurs are the fastest-growing segment of small-business owners today, says a report on the future of small business by Intuit and the Palo Alto, Calif., Institute for the Future. That's partly because immigrants have few options: U.S. jobs usually go to those fluent in the English language and American culture. Yet immigrants also have gifts that prime them for success.They see this country with fresh eyes, spotting chances others miss. Many find that though the U.S. playing field is not entirely level, it still is possible to start from scratch and wind up owning a home and sending children to college. Many possess excellent free university educations from countries where they could not put their training to use because of high unemployment, corruption or class or ethnic barriers. They rely on family and on huge amounts of hard work, are averse to debt and use informal networks of relatives and acquaintances over banks and lawyers to help them exploit opportunities. Some credit poverty with training them in frugality and freeing them from aspirations for an expensive home, car and lifestyle. Every month in 2005, about 350 of every 100,000 immigrants started businesses -- compared with 280 native-born Americans, according to the Ewing Marion Kauffman Foundation Index of Entrepreneurial Activity. Many fail, but others hang on or try again, eventually launching a better life.

Health-care premiums have climbed more than twice as fast as inflation in 2007 to about double their 2000 cost, two nationwide surveys show. Premiums are expected to rise at a similar or faster rate next year-- to about double their cost in 2000 -- and look to rise at a similar or slightly faster clip next year, a pair of nationwide surveys show. The average family premium rose 6.1% in 2007, according to an annual study by the Kaiser Family Foundation and the Health Research and Educational Trust. A widely watched barometer of employer health-care costs, the survey of 1,997 employers contained a modicum of good news: This is the fourth-straight year companies' premiums have decelerated since soaring nearly 14% in 2003. (See the full survey here.) But after a decade of inflation-beating increases, the annual cost for family coverage through an employer health plan is now more than $12,000, well over what a minimum-wage worker earns in a year. Workers now pay on average $3,281 a year to cover their share of that family policy, double what they did in 2000, the survey found.

What the U.S. Should Do if a Nuclear Bomb Goes Off  U.S. officials talk all the time about the need to thwart terrorists, but the federal government has yet to adequately plan for a nuclear bomb exploding in a major city, say former Clinton administration officials Ashton Carter and William Perry and Stanford University’s Michael May in the Washington Quarterly. The odds of a terrorist detonating a nuclear bomb have grown over the past decade as nuclear technology proliferates. The risk, however small, that terrorists will acquire and use nuclear weapons demands that the government discuss response plans. To plan for “the day after,” the government needs to be as forthright as it was about a possible attack during the 1950s, but rely on different plans from those tailored to a Cold-War-style onslaught of missiles. Assuming a terrorist group has only one or two bombs, the government has the chance to save the lives of thousands and increase the welfare of millions if it responds effectively. According to the authors, the federal government has placed too much of the burden of nuclear-attack response in local hands. But mayors and governors won’t be able to deal with the legal, logistical and humanitarian challenges of a disaster of that scale, just as they proved ill-equipped to deal with the consequences of Hurricane Katrina. Instead, the federal government should be empowered to lead the response to any nuclear explosion, with city and state officials cooperating and providing local knowledge.

Climate Change's Great Divide The biggest political battle in Washington over climate change may not pit Democrats against Republicans. Instead, it could be economists versus politicians. Many academics, even conservatives, favor a tax on carbon emissions. Many lawmakers, including some liberals, fear a political backlash against new fees. They lean toward a cap-and-trade system, which would set a limit on carbon-dioxide emissions and require companies to obtain permits to release carbon dioxide into the air. There may not be much practical difference between the two approaches. Caps would likely function much like a tax, levying new costs on business that would ultimately be passed on to consumers. Still, both sides say important principles are at stake. A cap-and-trade system, say its critics, could reward big polluters if it bases its allotment of permits on how much industries emit now. It also could spark a lobbying frenzy as industries fight to turn the system to their advantage. Defenders of cap and trade say it will provide a better incentive to cut emissions because companies can sell excess permits. They call a tax heavy-handed.

The Consensus of Economists Robert Whaples surveys PhD members of the American Economic Association and finds substantial agreement on a wide range of policy issues. For example:

• 87.5 percent agree that "the U.S. should eliminate remaining tariffs and other barriers to trade."
• 85.2 percent agree that "the U.S. should eliminate agricultural subsidies."
• 85.3 percent agree that "the gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged."
• 77.2 percent agree that "the best way to deal with Social Security's long-term funding gap is to increase the normal retirement age."
• 67.1 percent agree that "parents should be given educational vouchers which can be used at government-run or privately-run schools."
• 65.0 percent agree that "the U.S. should increase energy taxes."

And, finally, the topic that generates the most consensus:

• 90.1 percent disagree with the position that "the U.S. should restrict employers from outsourcing work to foreign countries."

One issue that fails to generate consensus is the minimum wage: 37.7 percent want it increased, while 46.8 percent want it eliminated. Thanks to Arnold Kling for the pointer.

Science and Culture

Sloppiness Taints Most Scientific Studies Dr. Ioannidis is an epidemiologist who studies research methods at the University of Ioannina School of Medicine in Greece and Tufts University in Medford, Mass. In a series of influential analytical reports, he has documented how, in thousands of peer-reviewed research papers published every year, there may be so much less than meets the eye. These flawed findings, for the most part, stem not from fraud or formal misconduct, but from more mundane misbehavior: miscalculation, poor study design or self-serving data analysis. "There is an increasing concern that in modern research, false findings may be the majority or even the vast majority of published research claims," Dr. Ioannidis said.

In Argentina, a Museum Unveils a Long-Frozen Maiden The maiden, the boy, the girl of lightning: they were three Inca children, entombed on a bleak and frigid mountaintop 500 years ago as a religious sacrifice. Unearthed in 1999 from the 22,000-foot summit of Mount Llullaillaco, a volcano 300 miles west of here near the Chilean border, their frozen bodies were among the best preserved mummies ever found, with internal organs intact, blood still present in the heart and lungs, and skin and facial features mostly unscathed. No special effort had been made to preserve them. The cold and the dry, thin air did all the work. They froze to death as they slept, and 500 years later still looked like sleeping children, not mummies. In the eight years since their discovery, the mummies, known here simply as Los Niños or “the children,” have been photographed, X-rayed, CT scanned and biopsied for DNA. The cloth, pottery and figurines buried with them have been meticulously thawed and preserved. But the bodies themselves were kept in freezers and never shown to the public — until last week, when La Doncella, the maiden, a 15-year-old girl, was exhibited for the first time, at the Museum of High Altitude Archaeology, which was created in Salta expressly to display them. The new and the old are at home in Salta. The museum faces a historic plaza where a mirrored bank reflects a century-old basilica with a sign warning churchgoers not to use the holy water for witchcraft. Now a city of 500,000 and the provincial capital, Salta was part of the Inca empire until the 1500s, when it was invaded by the Spanish conquistadors. [ Slide Show !!!: ]

Climate-Change Debaters Find Room to Agree A high-profile skeptic of environmentalism says trying to stop global warming diverts resources from more pressing social needs. An influential environmentalist responds that failing to do something about climate change will exacerbate problems like hunger and disease.But some surprising common ground emerged during an exchange in Men’s Journal (no link available) between David de Rothschild, whose expeditions across the Arctic are meant to draw attention to the threat of global warming, and Danish political scientist Bjorn Lomborg. Mr. Lomborg’s book “The Skeptical Environmentalist” in 2001 and the recently released “Cool It” argue that many of the environmental movement’s goals waste money and ignore the human toll of diseases like malaria.Members of the scientific community have criticized Mr. Lomborg, accusing him of cherry-picking data to minimize environmental dangers. In the Men’s Journal exchange, Mr. de Rothschild, a 29-year-old member of the famous banking family, echoed some of those complaints. Mr. de Rothschild says, for example, that focusing on alleviating malaria instead of tackling climate change will backfire, since a warming planet will raise the incidence of the mosquito-borne disease.In other aspects of the environmental debate, however, the two men found themselves to be more in sync. Mr. Lomborg says that in some cases, environmentally oriented reforms make economic sense. He supports a carbon tax to cut down on carbon-dioxide emissions and believes research into clean technologies needs to be increased. The two men share a concern that discussions of environmental problems have become overly focused on pollution from automobiles and airplanes. In light of their discussion, Mr. de Rothschild suggested that it might make more sense to label Mr. Lomborg an “efficient environmentalist” instead of a skeptical one. Mr. Lomborg agreed.

Posted by dblwyo at 06:47 PM | Permalink | Comments (0)

Special & General

(5*) Romer on Growth Paul Romer, Stanford University professor and Hoover Institution Senior Fellow talks with EconTalk host Russ Roberts about growth, China, innovation, and the role of human capital. Also discussed are ideas in creating growth, the idea that ideas allow for increasing returns, and intellectual property and how it should be treated. This 75 minute podcast is a wonderful introduction to thinking about what creates and sustains our standard of living in the modern world

(5*) The NAACP at a Crossroads The highlight of the NAACP convention in Detroit this summer was a symbolic burial ceremony for the n-word. In other words, the nation's oldest, largest and once-fierce champion of civil rights has been reduced to staging publicity stunts. There once was a time when the NAACP was ably led by the likes of Roy Wilkins, and undoubtedly nonpartisan. Political office holders and front-runners for president -- Democrats and Republicans -- would look for chances to address its large assemblage of mostly black Americans. Today GOP politicians avoid the organization like a plague. NAACP chairman Julian Bond once likened the Republican Party to the "Taliban." Former CEO Kweisi Mfume openly boasted of NAACP efforts to defeat Republicans. Worse, the shifting of its purposes -- from an interracial and integrationist organization to one aimed at airing racial grievances -- threatens the NAACP with oblivion. For more than a decade, no one at the top has uttered the "i-word" for fear of alienating young blacks who were segregating themselves on campuses. Instead the organization began identifying with ghetto blacks who deified skin color, and lashed out at "Uncle Toms" and others whose moral behavior and speech patterns displayed middle-class values. With these compromises and forfeits of core principles, the NAACP is down in membership, down in funds, down in glory and accomplishments -- but not "down" with inner-city black youth. It is at a crossroads -- and unless it makes the right choices and wise decisions it may shrivel up and die.

·         Potentially a very valuable editorial that finally offers a grounded view of the next major evolutionary step in Civil Rights strategies and policies. It’s in all our interests that no group of American citizens be institutionally disadvantaged by either the “system” or themselves. While the massive Civil Rights legislation of the 60s removed most of the formal barriers social engineering projects have created others in parallel. Plus time is necessary. That said the home page of the NY Civil Rights Coalition, whose exec. Director wrote this, is extremely disappointing: http://nycivilrights.org/home/index.jsp .

Politics and Politicians

(***)'The Political Brain' Between 2000 and 2006, a specter haunted the community of fundamentalist Democrats. Members of this community looked around and observed their moral and intellectual superiority. They observed that their policies were better for the middle classes. And yet the middle classes did not support Democrats. They tended to vote, in large numbers, for the morally and intellectually inferior party, the one, moreover, that catered to the interests of the rich. How could this be? Serious thinkers set to work, and produced a long shelf of books answering this question. Their answers tended to rely on similar themes. First, Democrats lose because they are too intelligent. Their arguments are too complicated for American voters. Second, Democrats lose because they are too tolerant. They refuse to cater to racism and hatred. Finally, Democrats lose because they are not good at the dark art of politics. Republicans, though they are knuckle-dragging simpletons when it comes to policy, are devilishly clever when it comes to electioneering. They have brilliant political consultants like Lee Atwater and Karl Rove, who frame issues so fiendishly, they can fool the American people into voting against their own best interests. This literature was never taken seriously by sophisticated Democrats, but it thrived nonetheless. Still, you’d think it would be pretty much extinct now that Democrats are winning and Republicans are in the midst of a historic meltdown. But Drew Westen, a professor of psychology at Emory University, has come forth with a late entry in the field, and his book, “The Political Brain: The Role of Emotion in Deciding the Fate of the Nation,” is enjoying a vogue.

Republican Forecast: Cloudy Party's Woes Go Beyond Bush as It Bleeds Support Among Key Groups For Republicans hoping the 2008 campaign will bring a fresh start after the troubled tenure of President Bush, there are sobering signs: Evidence indicates that the party's problems with the American electorate are much bigger than the president and won't go away when he leaves office. Recent voter surveys, including private polling done by a leading Republican strategist, suggest a broader erosion of Republicans' appeal. In particular, three groups crucial to Mr. Bush's goal of a "permanent Republican majority" are drifting away: younger voters, Hispanics and independents. The reasons include the Iraq war, conservatives' emphasis on social issues such as gay marriage, abortion and stem-cell research, and a party-led backlash against illegal immigrants that has left many Hispanic and Asian-American citizens feeling unwelcome. The upshot is that Republicans face structural problems that stem from generational, demographic and societal changes and aren't easily overcome without changing fundamental party positions. Those problems contributed to Republicans' loss of control of Congress last year. Overall, though, Republicans' defections to date haven't necessarily been the Democratic Party's gains. Many renegade Republicans instead are declaring independence of either party and becoming swing voters.

(5*) THE ARGUMENT With the possible exception of the Republicans, is there a major political party more stupefyingly brain-dead than the Democrats? That’s the ultimate takeaway from “The Argument,” Matt Bai’s sharply written, exhaustively reported and thoroughly depressing account of “billionaires, bloggers, and the battle to remake Democratic politics” along unabashedly “progressive” (read: New Deal and Great Society) lines. Well-financed and influential groups ranging from the Democracy Alliance to the New Democrat Network to MoveOn.org may be taking over the Democratic Party, he says, but they are not doing the heavy thinking that will fundamentally transform politics — unlike the free-market, small-government groups formed in the wake of Barry Goldwater’s historic loss in the 1964. Bai reluctantly and repeatedly owns up to a hard truth: “There’s not much reason to think that the Democratic Party has suddenly overcome its confusion about the passing of the industrial economy and the cold war, events that left the party, over the last few decades, groping for some new philosophical framework.” But as John Kerry might tell you, never write off the Democrats’ ability to snatch defeat from the jaws of victory. The recent farm bill passed by the House — and pushed by Speaker Nancy Pelosi — maintains subsidies to already prospering farmers, angering not just conservative budget cutters but liberal environmentalists. House and Senate Democrats allowed a revision of the Foreign Intelligence Surveillance Act that broadens the scope of warrantless wiretaps just after holding hearings denouncing the man who would issue them, Attorney General Alberto Gonzales, for routinely abusing his power. Although the misconceived and misprosecuted war in Iraq was the issue most responsible for their return to power, Congressional Democrats have yet to put forth a coherent or convincing program to end American military involvement there. Recalling a meeting of leading progressives — including Armstrong, Representative Adam Smith of Washington and Simon Rosenberg of the New Democrat Network — just after the 2006 midterm elections, Bai writes: “Seventy years ago ... visionary Democrats had distinguished their party with the force of their intellect. Now the inheritors of that party stood on the threshold of a new economic moment, when the nation seemed likely to rise or fall on the strength of its intellectual capital, and the only thing that seemed to interest them was the machinery of politics.” The argument at the heart of “The Argument” is less about vision and more about strategy.

That’s bad news, even or especially for those of us who don’t see large differences between Republicans and Democrats. Our political system works best — or is at least more interesting — when big ideas are being bandied about, both within parties and between them. The lack of depth among the Democrats may not hurt them in the 2008 elections — the Republicans, whose would-be presidential candidates have mostly publicly rejected evolution, are not exactly bursting with new ideas either. But it remains profoundly disappointing.

Nick Gillespie is the editor in chief of Reason magazine.

The Challenges Facing Obama and Clinton Zbigniew Brzezinski, a national-security adviser to President Carter, threw his support behind Barack Obama’s presidential campaign. In an interview airing this weekend on Bloomberg Television’s “Political Capital With Al Hunt,” Brzezinski said, “Obama is clearly more effective and has the upper hand. He has a sense of what is historically relevant and what is needed from the United States in relationship to the world.” Brzezinski, 79 years old, dismissed the notion that New York Sen. Hillary Clinton, 59, as more seasoned than Obama, 46, saying “being former first lady doesn’t prepare you to be president.” Obama “recognizes that the challenge is a new face, a new sense of direction, a new definition of America’s role in the world,'’ Brzezinski said. Meanwhile, a Pew Research Center poll released yesterday shows the potential challenge that would await Clinton in a general election. Clinton is viewed favorably by 55% of all voters, the lowest ranking of major Democratic candidates in the presidential race. That includes a positive rating by 19% of Republicans and 53% of independents. Yet the New York senator is viewed favorably by 88% of Democrats. Of all voters, 64% have a favorable view of Obama, while 39% of Republicans and 67% of independents have a positive opinion of him. The poll was conducted from Aug. 1 to 18 and involved telephone interviews with 3,002 adults. It had a margin of sampling error of plus or minus 2 percentage points.

·         Obama Is More Suited for Presidency Than Clinton, Zbigniew Brzezinski Says

·         A Study in Contrasts: Clinton and Guiliani Overall, 55% of voters who offer an opinion of Clinton express a favorable view of her, while 45% have unfavorable opinion. By comparison, roughly two-thirds of voters able to rate Giuliani (65%) and fellow Republican Fred Thompson (66%) – as well as Clinton's Democratic rival Barack Obama (64%) – express favorable opinions of these candidates

Clinton, Obama Back Bigger Army to Blunt Soft-on-Security Slams  This year's presidential candidates are aggressively working to avoid soft-on-security images, keeping in mind the ridicule Republicans heaped on nominees Dukakis for posing as a tank commander in 1988 and Kerry when he tried in 2004 to explain contradictory votes on funding for the war. Hillary Clinton wants to add 80,000 soldiers to the Army; Barack Obama calls for 65,000 more soldiers and 27,000 more Marines; Biden proposes establishing local counter-terrorism units in large cities; John Edwards would double the budget for military recruiting; and Bill Richardson says the National Guard should patrol U.S. borders to block nuclear weapons smugglers. Clinton and Obama, the front-runners, also are building defense advisory teams more akin to a general-election campaign than a primary race. Still, Democrats face a dilemma. They are in lockstep on the need to withdraw U.S. troops from Iraq as they appeal to anti-war voters who can decide the party's nomination; at the same time, they want to court the broader electorate concerned about terrorism and national security. The candidates ``need to communicate to the average American voter that Iraq is a mistake and we should get out, but that's consistent with American security,'' said Charles Kupchan, a National Security Council adviser in President Bill Clinton's administration.

`Subprime Chuck' Schumer Plays Fool in Crisis  -- It's bad enough when a company's outside auditor is a pushover for management. Equally galling would be for the auditor to try telling management how to run the company. Yet that's what U.S. Senator Charles Schumer has asked the Big Four accounting firms to do at the subprime lenders they audit, pronto.

The chairman of Congress's Joint Economic Committee then called on the firms to ``assist this country's mortgage crisis'' and ``urge your clients to do their part to keep our housing markets afloat, by modifying subprime loans that are at risk of default.''  In so doing, Subprime Chuck made a blithering fool of himself, though he probably doesn't realize why. So far, none of the four firms -- PricewaterhouseCoopers, Deloitte & Touche, Ernst & Young, and KPMG -- has responded publicly to his plea for lobbying help. You see, management's job is to manage, and the auditor's job is to audit. There's also the decades-old requirement under U.S. securities laws that accounting firms must be independent of the companies they audit, both in appearance and in fact. Under the Securities and Exchange Commission's rules, that means the auditors, among other things, ``must act in an unbiased and objective manner.'' Lobbying audit clients to change their business practices is the mark of a biased auditor, not a disinterested one.

·         Bush Pledges Help for Subprime Mortgage Borrowers, Rejects U.S. `Bailout'. And the blog comments to read are: Bush's Subprime Plan (CalcRisk) and Major Policy Shift -- or Politics as Usual? & Bailout Bandwagon (BigPic). Highly recommended indeed.

 (***)Payback Bailout has been a busy word in the last two weeks. But lending so solvent institutions won't go under for lack of short-term liquidity is very different than bailing out insolvent institutions from their bad decisions. In any case, we've made peace with a financial system that lives a little closer to the edge on liquidity than it would if there weren't a Federal Reserve. Whether the alternative would be a more stable world, with as much growth, is uncertain. But there's no doubt that the system has been conditioned to expect a general subsidy to risktaking by way of the Fed's willingness to provide cheap money in an emergency. Of low-income households from a nationally representative sample who became homeowners between 1977 and 1993, fully 36% returned to renting in two years, and 53% in five years. Suggesting their sojourn among the homeowning was not a happy one, few returned to homeownership in later years. Even among those who held on to their homes for 10 years, the average price-appreciation gain was 30% -- less than if their money had been invested in Treasury bills. This meager capital gain was about half that enjoyed by middle-income homeowners.

A typical low-income household might spend half the family income on mortgage costs, leaving less money for a rainy day or investing in education. Their less-marketable homes apparently also tended to tie them down, making them less likely to relocate for a job. Ms. Reid's counterintuitive discovery was that higher-income households were "twice as likely to move long distance if they're unemployed."

Sen. Craig: 'I Am Not Gay' Idaho Sen. Larry Craig this afternoon emphatically denied he’s gay, even as Republican leaders were taking steps to refer the matter of the senator’s arrest in an airport restroom to the Senate Ethics Committee.

“I am not gay. I have never been gay,” Craig told reporters, as his wife stood silently beside him.

In a prepared statement, Craig defended his actions and said the only mistake he’d made was pleading guilty to alleged disorderly conduct. He was arrested by an undercover cop after complaints of lewd conduct in a Minneapolis airport bathroom in June. (We’d also note that he started his remarks to reporters with the somewhat-inappropriate-for-this-situation line: “Thank you very much for coming out today.”). 1982 ABC News YouTube video report: http://www.youtube.com/watch?v=0RntWGPEjoo .

• Quotes of the Day
  "The real question for Republicans in Washington is how low can you go, because we are approaching a level of ridiculousness," Republican strategist Scott Reed tells the New York Times, as the party buzzed with news of Sen. Larry Craig's confirmation that he pleaded guilty to misdemeanor charges of disorderly conduct after an undercover police officer accused him of soliciting sex in an airport men's room. The scandal is only the latest to rock the party, which suffered in last fall's midterm elections from a string of what the Times calls accusations of sexual foibles and financial misdeeds. Yesterday, moments before Sen. Craig held a news conference to declare "I am not gay," Senate Republican leaders requested an Ethics Committee investigation into the Idaho Republican's arrest, USA Today reports. And while Idaho Republican Party Chairman Kirk Sullivan urged Idahoans to "avoid rushing to judgment," Republican presidential candidate Mitt Romney -- whose campaign previously gave the senator a prominent role -- condemned Craig's actions as "disgusting."

 Policies

Lessons of a Food Fight Lawyers for the Federal Trade Commission apparently can't believe their "gotcha" haul of off-color statements by Whole Foods CEO John Mackey wasn't enough to block his merger with Wild Oats, a competing chain, in the absence of serious antitrust evidence. It wasn't Judge Friedman's job to ask why FTC would bring such a frivolous case in the first place. At times like these, one must consult the work of James Buchanan, who won a Nobel Prize for applying what economics tells us about incentives to the behavior of government officials. To wit, they are people, and frequently behave like people. They don't necessarily get up everyday thinking, "What can I do today to advance the general welfare?" They frequently think: "What can I do to advance my own interests? What can I do to extort tribute from the private sector? What can I do to blackmail politicians into increasing my resources and privileges? What can I do to manipulate the media?" Antitrust agencies are especially prone to these habits because, frankly, they lack useful ways to occupy their time. So few are the opportunities in a modern economy for businesses to create meaningful, exploitable, durable monopolies, trustbusting agencies must employ bold ingenuity to keep themselves and the Washington antitrust community busy. In this regard, a landmark in bar-lowering was the surprise success of the FTC's 1997 move to nix a merger of Staples and Office Depot, two office supply chains in a world full of office supply retailers, on grounds that they offered consumers a unique "shopping experience." We've been off to the races ever since.

New Evidence on Old Idea That Works for the Poor: With Labor Day approaching and concerns over economic insecurity and inequality rising, there is an understandable demand for new ideas to bolster incomes for working families. Yet in the search for something novel, we shouldn't overlook the need to expand old ideas where the evidence is already in. One such old idea is the earned income tax credit, or EITC, a refundable tax credit that provides a wage subsidy for poor Americans. Even as the last of those battles were being fought in 1997, the evidence was already strong that the EITC, together with a solid minimum wage, was an effective tool to reward work without causing employers to curb hiring. A decade later it is worth noting how much new evidence since then reinforces the wisdom of further expanding the EITC

How Bad Is U.S. Infrastructure Really?

Americans Without Health Benefits Rose to Record in 2006; Poverty Declined

Fuzzy Bush math You're about to hear that the budget deficit is falling. Don't believe it, warns Fortune's Allan Sloan. The deficit is much, much bigger than you think. Let me show you how this works, using numbers from the recent update issued by the nonpartisan Congressional Budget Office. We'll start with Social Security, which will take in about $78 billion more in payroll and income taxes than it shells out. The Treasury takes that cash, gives the trust fund IOUs for it, and spends it. That $78 billion isn't in the stated deficit. Wait, there's more. The Treasury will fork over $108 billion of interest on the trust fund's $2.2 trillion of Treasuries -- but will give the trust fund IOUs, not cash. They won't count in the deficit either. Add that $186 billion to the stated budget deficit, and it more than doubles, to $344 billion. The stated deficit, you see, measures how much less cash Uncle Sam takes in than he spends. That's fine for gauging the deficit's impact on the economy, which is what budget experts generally do. But if you're trying to assess Uncle Sam's overall fiscal condition, as I am, you should count those IOUs in the deficit because they have to be paid someday.

 

A New Push to Regulate Power Costs More than a decade after the drive began to convert electricity from a regulated industry into a competitive one, many states are rolling back their initiatives or returning money to individuals and businesses. The main reason behind the effort to return to a more regulated market is price. Recent Energy Department data shows that the cost of power in states that embraced competition has risen faster than in states that had retained traditional rate regulation. Most of these laws, however, concerned only wholesale markets, and thus artificially induced competition in only part of the industry. The system for metering, transmitting or distributing power was not part of the changes. The supposedly competitive markets did not involve transactions between equals. The utilities are required by law to supply whatever volume of power that customers demand. Independent generation companies do not have this legal obligation. During periods of peak demand the generation companies can charge prices far above the cost of production, in some cases 30 times the highest cost of production. The effect, experiments at Carnegie Mellon and George Mason Universities have shown, is to allow near monopoly prices even when there are competing electric-generating companies.

This Judge Got It: The U.S. Navy's efforts to maintain realistic anti-submarine warfare training got a boost when the Ninth Circuit Court temporarily reversed an injunction granted earlier this month. In essence, the Ninth Circuit stated that the lower court had failed to properly take into consideration the national security interests of the United States. What sort of national security interests are there? Well, the United States military had long had an edge in the quality of its troops. This training is well known in cases like Red Flag, the National Training Center, or Top Gun. But other areas of warfare need this training, too. One of these areas has been anti-submarine warfare. The use of active sonar during those training exercises is necessary, not only to train American sonar operators, but also to train American submariners to deal with countries that use active sonar (and which don't have to deal with environmental groups suing the government to ban the use of active sonar). The military lives by the axiom, "you fight like you train." This was the case for the Roman army in ages past (the saying went, "Their drills are bloodless battles, their battles are bloody drills.") and for the U.S. military, too. Comments about Desert Storm often compared the experience to the Air Force's Red Flag exercises or the Army's National Training Center – with the caveat that the Iraqi forces weren't as tough.

Climate change debate needs revolution A revolution of society on a scale never witnessed in peacetime is needed if climate change is to be tackled successfully, the head of a major business grouping has warned. Bjorn Stigson, the head of the Geneva-based World Business Council for Sustainable Development (WBCSD), predicted governments would be unable to reach agreement on a framework for reducing carbon emissions at either a US-sponsored meeting in Washington later this month or at a United Nations climate summit in Indonesia in December. Climate change is also expected to be high on the agenda at this week’s annual summit of Pacific leaders in Sydney. The “challenge”, Mr Stigson said, is for developed nations to cut carbon emission levels by 60 to 80 per cent from current levels by 2050 if global emissions are to be kept below 550 parts per million. Global emissions at that level would keep average permanent global temperature increase below 3 degrees by 2050, a level beyond which most scientists say climate change would be significantly worse.The 200 members of the WBCSD, which have a combined market cap of $6,000bn, are dismayed by politicians’ lack of political will to address the issues, Mr Stigson said.

How Ethanol Makes the Farm Belt Thirsty Everywhere farmers grow corn, water is becoming a major concern as ethanol plants ramp up production at a startling rate and the threat of drought is ever-present. Rushing to help meet President Bush's call to cut gasoline use by 20% over the next 10 years, the ethanol industry has projects under way that would nearly double capacity from the current 6.8 billion gallons of ethanol a year. A 50-million gallon ethanol plant might use about 150 million gallons of water to make fuel. That's more water than some small towns use, raising some local battles over placement of the plants. But farmers in Mr. Clements's district alone pumped 62.6 billion gallons of water from underground in 2005. That's why many water experts are more concerned about farmers growing more thirsty corn to meet the extra demand from ethanol than they are about the water used by the distilleries themselves.

Making the Think Tanks Think Just in case you haven't noticed, the major presidential candidates -- Republican and Democratic -- are dodging one of the thorniest problems they would face if elected: the huge budget costs of aging baby boomers. In last week's CNN-YouTube debate, New Mexico Gov. Bill Richardson cleverly deflected the issue. "The best solution," he said, "is a bipartisan effort to fix it." Brilliant. There's already a bipartisan consensus: Do nothing. No one plugs cutting retirement benefits or raising taxes, the obvious choices. End of story? Not exactly. There's also a less-noticed cause for the neglect. Washington's vaunted think tanks -- citadels for public intellectuals both liberal and conservative -- have tiptoed around the problem. Ideally, think tanks expand the public conversation by saying things too controversial for politicians to say on their own. Here, they've abdicated that role.The aging of America is not just a population change or, as a budget problem, an accounting exercise. It involves a profound transformation of the nature of government: Commitments to the older population are slowly overwhelming other public goals; the national government is becoming mainly an income-transfer mechanism from younger workers to older retirees.

Posted by dblwyo at 05:08 PM | Permalink | Comments (0)

Special & General

(***) Gordon on Ants, Humans, the Division of Labor and Emergent Order Deborah M. Gordon, Professor of Biological Sciences at Stanford University, is an authority on ants and order that emerges without control or centralized authority. The conversation begins with what might be called the economics of ant colonies, how they manage to be organized without an organizer, the division of labor and the role of tradeoffs. The discussion then turns to the implications for human societies and the similarities and differences between human and natural orders.

Values & Attitudes

 Williams Sisters Extend Court Awareness to Life: You're probably familiar with the notion of court awareness, even if you don't follow tennis and can't tell Venus Williams from Venus Flytrap. Whatever the sport, the theory is the same. It's an innate understanding of where you are in relation to whatever shares that particular space, whether it be opponents, an out-of-bounds line or a disaster-waiting-to-happen hill in center field (are you listening Houston Astros). The better players have it. The rest, well, don't. The real trick in pro sports is to uncover the athletes whose court awareness extends beyond the white lines. Beyond the game. Great on the field. Great off the field. Take Michael Vick. Great awareness on the football field. An impeccable sense of where he stands in relation to the really big guys trying to knock his head off. You have to wonder how that awareness will serve him in prison. And then you get the pleasure of spending time with Venus and Serena Williams. They are, in no particular order, tennis stars, activists, businesswomen, fashion designers, models, actors and more. The Williams sisters are strong. Physically and mentally. They're confident. They're smart. They aren't afraid to ask questions. Or try new things. Or challenge your assertions and conclusions.

Our Compassless Colleges  (the original is at Liberal Education, Then and Now  ) At universities and colleges throughout the land, undergraduates and their parents pay large sums of money for -- and federal and state governments contribute sizeable tax exemptions to support -- "liberal" education. This despite administrators and faculty lacking, or failing to honor, a coherent concept of what constitutes an educated human being. To be sure, American higher education, or rather a part of it, is today the envy of the world, producing and maintaining research scientists of the highest caliber. But liberal education is another matter. Indeed, many professors in the humanities and social sciences proudly promulgate doctrines that mock the very idea of a standard or measure defining an educated person, and so legitimate the compassless curriculum over which they preside. In these circumstances, why should we not conclude that universities are betraying their mission? Many American colleges do adopt general distribution requirements. Usually this means that students must take a course or two of their choosing in the natural sciences, social sciences, and the humanities, decorated perhaps with a dollop of fine arts, rudimentary foreign-language exposure, and the acquisition of basic writing and quantitative skills. And all students must choose a major. But this veneer of structure provides students only superficial guidance. Or, rather, it reinforces the lesson that our universities have little of substance to say about the essential knowledge possessed by an educated person.

Don't Suffer the Little Children Another school year has sprung itself upon us, which is always an occasion for my wife, a former Detroit public-school teacher, and me to remind ourselves why we home-school. Part of the reason, in addition to my wife's expertise in this area, can be found in Thomas Sowell's "A Conflict of Visions," published 20 years ago. Mr. Sowell contrasted the "unconstrained vision" of utopians, who want to radically improve humankind, with the "constrained vision" of realists, who begin with the proposition that man is inherently self- interested, and not moldable into whatever form the high-minded types have in store for us once they get their itchy fingers on the levers of power. Mr. Sowell's book has been influential among conservatives for its compelling explanation of the divide between people who want to reshape us -- often via large intrusions on liberty -- and those who believe that the purpose of government is to protect institutions (like markets and families) that channel our inherent selfishness into productive behavior. It is also a handy guide for parenting.

 

For Some, Work-Life Balance Is Child's Play The idea that both parents in a family can have careers without paying a price is on its way out -- and good riddance.  Every generation revolutionizes something, and Generation X is revolutionizing how family and work are balanced. There's a new emphasis on keeping families together over career aspirations, and it's what makes me most proud to be a part of Gen X. Generation X knows that the belief that both parents in a family can have demanding, time-consuming careers outside the home is an antiquated one. Time has shown that it just doesn't work. Sure, girls can grow up to be anything, and boys can start companies and become millionaires. But there's a limitation that no one talks about: Two parents working more than 60 hours a week each is bad for the marriage and bad for the kids. Thanks to Gen X, the power-couple-as-parents setup will likely go down in history as just another terrible idea conceived by baby boomers. At this point, it's clear that families are better off when one person takes care of the household full time. Statistics support this conclusion, and it's also intuitive. The problem is that not many people want to stay at home full time. We already did that in a widespread way in the 1950s, and the cliché of the housewife who takes valium to cope exists for a reason: Staying at home with kids every day for 20 years isn't a first choice for most people.

everyone brings something to the table

Three Strikes for Professional Sports It's been a summer of shame in the sporting world, with athletes and a referee causing headaches for the commissioners of the top three U.S. pro sports leagues. Here's a closer look.

·         Michael Vick Suspended Indefinitely by NFL After Guilty Plea in Dog Case

Beat Federer? You could try cheating You could try cheating We know Roger Federer is friends with Tiger Woods. We know that his girlfriend of seven years, Mirka Vavrinec, is a former professional tennis player. We know he has been ranked No. 1 in the world since Feb. 2, 2004, a record streak. What no one seems to know about Roger Federer is how to beat him at the U.S. Open, and where he is undefeated since Sept. 4, 2003, and where he was scheduled to begin his defense Monday evening against Scoville Jenkins of the United States. We invited a heavyweight boxer, a physicist, the father of famous tennis sisters and others to explain how they would beat Roger Federer.

In 'Deluxe: How Luxury Lost Its Luster' Thomas investigates the business of designer clothing, leather goods and cosmetics, and finds it wanting. Hijacked, over the past two or three decades, by corporate profiteers with a “single-minded focus on profitability,” the luxury industry has “sacrificed its integrity, undermined its products, tarnished its history and hoodwinked its consumers.” Hoodwinked? The truth hurts. After I read “Deluxe,” suddenly my new sundress no longer looked like such a steal. Au contraire, the book’s line of argument suggested, it was I who’d been robbed. For Thomas, a cultural and fashion writer for Newsweek in Paris and the Paris correspondent for the Australian Harper’s Bazaar, the luxury industry is a sham because its offerings in no way merit the high price tags they command. Yet once upon a time, they most certainly did. In the 19th and early 20th centuries, when many of luxury’s founding fathers first set up shop, paying more money meant getting something truly exceptional. Dresses from Christian Dior, luggage from Louis Vuitton, jewelry from Cartier: in the golden period of luxury, these items carried prestige because of their superior craftsmanship and design

Is a CEO worth 364 times the average Joe? Here are four infuriating facts about the salaries and friendly tax rules that let executive fat cats cash in -- and what you can do about them. No. 1: The chief executives at the biggest U.S. companies last year made as much money in a single day as the average worker made for the whole year. No. 2: The managers of the 20 top hedge funds and private-equity shops made more every 10 minutes last year, on average, than the average worker made for the whole year. No. 3: True, many workers got a break on July 24, when the federal minimum wage was increased to $5.85 from $5.15 -- the first increase in the federal minimum wage in 10 years. But the minimum wage is still 7% below where it was 10 years ago, adjusted for inflation. Meanwhile, CEO pay has gone up 45%, adjusted for inflation, in the same period, according to the "Executive Excess 2007" report. No. 4: U.S. CEOs enjoy supersized advantages in pensions and perks, too. Apologists for highly paid CEOs argue they are merely getting the pay they deserve for their talents. Their pay is determined freely by the laws of supply and demand in the marketplace. Right?

There might be more to it than that. For one thing, U.S. execs make three times as much as their European counterparts, even though these European bosses manage companies that are 40% bigger. (The top 20 highest-paid execs at U.S. public companies made $36.4 million on average last year, while the same group in Europe got just $12.5 million on average.) Yet, presumably, companies on both continents draw from similar talent pools in terms of education, work experience and cultural background. If that's true, it's hard to accept the notion that rich pay in the U.S. is the result of a scarcity of talent. Next, CEO pay in the U.S. has grown to become 364 times the average worker's pay. It was just 40 times the average pay in 1980. It's hard to imagine that top leadership skills have grown so much scarcer in the past 37 years. Many pay analysts suspect the bloated pay packages for U.S. execs are more the result of a marketplace failure than the basic laws of supply and demand from Econ 101.

Posted by dblwyo at 05:06 PM | Permalink | Comments (0)

This is Part II of the Weekly Reader focused on International Affairs. Hopefully everybody now recognizes that we’re in a world under-going more profound structural changes than it’s seen, in some ways, in centuries. As has been pointed out, broadly speaking, never have so many countries and people done so well. The question is though how do we keep a lid on the turmoils, commit the major new actors to the emerging int’l system as stakeholders and nurture that progress. It’s in all our interests, if for no other reason to avoid major worldwide conflicts that this time around might really turn into Armageddon. But also because, in the nature of things, we all do better when some of us do better. That’s because as each grows the total pie gets much….much bigger and even if our share gets smaller proportionately it’s still a big slice of a much bigger pie. Notice we’re not mentioning morality here but simple self-interest J !

Think of the world if you look in terms of simple models. For four decades after WW2 it was a magnet with two poles where the “lines-of-force” organized themselves in relationship to the fields defined by Russia and the US. After the collapse of the wall the theory went that it was a single-pole world, rather like  planets in orbit around the sun. Which reflected the preponderance of US military and economic power, if not influence. It was never that simple nor the solar system model that accurate but there were large elements of truth in it. Which to some extent still apply but more and more this century we’ll be in a more of a molecular system with major players linked separately to other major players and minor ones as well and all together forming a more complex molecular structure. Think of it as a giant tinker toy !

That brave new world could have some really interesting, in a good sense, aspect. If we make it work. Below are two interesting articles on growing recognition of worldwide cultural diversity instead of the US dominated model that’s mistakenly had everybody in thrall. At the same time to make it work requires that economic growth and social stability continue and increase. A major influence on the future of the world will be the historical constraints and economic tendencies established by previous decisions. The links on the demise of the British aircraft industry post WW2 are interesting for their own sake but even more so when thinking about how this new world will be shaped by which industries get established in which countries. The role of socio-political institutions is critical in these decisions and a little history is provided.

Finally there’s a set of pointers on specific countries – specifically China, Russia, Germany & Europe, Japan, Korea, and the ME (Pakistan, Israel) all of which are going thru their own huge changes.

Special & General

Globalization and Cultural Diversity  Is globalization making the world more homogenous? And if so, does Hollywood share the blame? This summer, my studio's "Spider-Man 3" became one of the biggest movies of all time, thanks to its world-wide "web" of box-office success, so it may seem strange for me to say this. But I believe that the global economy in general -- and the entertainment business in particular -- is absolutely not turning the world into an American shopping mall. Instead of creating a single, boring global village, the forces of globalization are actually encouraging the proliferation of cultural diversity. Prominent critics like Thomas Friedman disagree. In "The Lexus and the Olive Tree" he argued that globalization "has its own dominant culture, which is why it tends to be homogenizing . . . Culturally speaking, lobalization is largely, though not entirely, the spread of Americanization -- from Big Macs to iMacs to Mickey Mouse -- on a global scale." Yes, it is true that certain products have world-wide reach and appeal. But it is not true that local culture is quashed in the process. Consider that from Germany and France to India and Japan, more than half the theatrical box office is made up of films produced in those lands, in their own languages. These are not signs of Hollywood's mogenizing effect on the world. They are signs of the world changing the way Hollywood works. It makes sense to marry our production, marketing and distribution experience with the growing global appetite for entertainment tailor-made by and for a variety of cultures. So if what can be seen in the cinemas and on television screens from Bangalore to Barcelona these days is any indication, globalization does not mean homogeneity. It means heterogeneity. Instead of one voice, there are many. Instead of fewer choices, there are more. And instead of a uniform, Americanized world, there remains a rich and dizzying array of cultures, all of them allowing thousands of movies and televisions shows to bloom.

 

Harness market forces to share prosperity When I studied economics in graduate school a generation ago we were taught that it was a “stylised fact” that the US income distribution was very stable. We were shown that the fraction of the population in poverty tracked almost perfectly the performance of median family income over time and that productivity growth and average real wage growth moved together, with both declining sharply after the oil shocks of the 1970s. These observations led naturally to the conclusion that the main way of reducing poverty or increasing the incomes of middle income families was raising the rate of economic growth. Today, we have another generation’s worth of data including the experience of the information technology-driven re-acceleration of productivity growth in the 1990s. This experience forces a reassessment of the earlier economic orthodoxy. It can no longer plausibly be asserted that the income distribution is relatively static or that average wage growth tracks productivity growth. Indeed, in a recent paper on tax policy prepared for the Hamilton project, my collaborators and I concluded from Congressional Budget Office data that, since 1979, changes in income distribution had raised the pre-tax incomes of the top 1 per cent of the population by $664bn or $600,000 per family – an increase of 43 per cent.

(***) Kellogg-Briand Pact Signed The Kellogg-Briand Pact was an agreement between the US and France to renounce war and seek settlement of disputes by peaceful means. It took its name from US Secretary of State Frank B. Kellogg and French foreign minister Aristide Briand. Numerous other nations subsequently signed the pact, and some successes were achieved in settling disputes. The pact made no provision for measures against aggressors, however, and proved ineffective in the 1930s. What role did it play in the Nuremberg Trials?

Avoiding Surprise  Like 12/7 (Pearl Harbor), 9/11 lives in infamy. Both tragedies were tough lessons in strategic surprise, and both were the result of grievous intelligence failures. The warning is obvious only in hindsight, but in his January 2001 Senate confirmation hearings Donald Rumsfeld recognized the problem. When asked if he would name "one thing" that "kept him up at night" more than any other specific threat or trouble the Pentagon confronts, Rumsfeld answered, "Intelligence."  The sixth anniversary of 9/11 is an appropriate moment to reflect on the vexingly complex problem of surprise, and particularly strategic surprise. The problem has no solution, at least no perfect solution. Unless you know the future, surprise is inevitable. Limiting the more devastating effects of surprise is the elegant trick that defines the best-prepared. I think the insurance industry uses the term "lowering the risk premium." That means limiting the number of lives lost, the property damage and the costs of assuring security.

Int’l Affairs

(5*) Cold War at 30,000 Feet: The Anglo-American Fight for Aviation Supremacy By 1945, not only was the United States victorious, its participation in the war had also been profitable. The nation was wealthier than ever. Britain's defiance of Hitler, however, had rendered it bankrupt. The contrast between the two nations' circumstances engendered deep British bitterness and envy, intensified by Congress's abrupt termination of Lend-Lease, the program that had provided billions of dollars worth of material to Allied nations, the moment peace was declared. It seemed to many British citizens monstrously unjust that having suffered so much, including heavy damage to the physical fabric of their country, they should thereafter be treated with skinflint ruthlessness. Many Americans, for their part, perceived a new world in which the United States' only rival for supremacy was the Soviet Union. They were impatient, indeed scornful, of residual British pretensions, above all to empire. The US set about exercising hegemony without much pity for its ally's plight. Even a loan to London roused significant congressional opposition, reflected by the representative who vowed never to "vote for one dollar [for British aid] to take food out of the mouths of my people." This was a trifle excessive when Americans were eating handsomely, while the British found themselves forced to celebrate peace by introducing bread rationing. But US skepticism was scarcely di-minished when Britain, with what critics deemed a characteristically self-indulgent sense of entitlement, set about using its borrowed American cash to create a welfare state, rather than to modernize its battered and decrepit industrial base. It also strove to sustain worldwide strategic commitments far beyond its shrunken means.

·         An Imperial Divergence To discover why Mexico is not Massachusetts, look to Spain and England Sir John Elliott concludes this magisterial comparative history of empire in the Americas with a striking counterfactual sketch, imagining a different royal patron for Christopher Columbus and a different fate for the New World: "If [England's] Henry VII had been willing to sponsor Columbus's first voyage," he writes, "and if an expeditionary force of [Englishmen] had conquered Mexico for Henry VIII, it is possible to imagine a ... massive increase in the wealth of the English crown as growing quantities of American silver flowed into the royal coffers; the development of a coherent imperial strategy to exploit the resources of the New World; the creation of an imperial bureaucracy to govern the settler societies and their subjugated populations; the declining influence of parliament in the national life, and the establishment of an absolutist English monarchy financed by the silver of America." After 400 pages of meticulously researched and elegantly executed synthesis, the reader is left convinced that the differences between European empire in North America and in South America were more than merely circumstantial. They had deep roots in the contrasting cultures of English and Spanish governance.

 

·         The Rise of the Western World: A New Economic History (*****)

 

(*****)The Revolution in Transatlantic Affairs The return of both China and Islam in world history after a three-century-long eclipse has been the defining feature of the international stage since 1979. In the first decade afterwards, the West was simply too focused on the “second Cold War” against the Soviet Bloc to ponder the meaning of the revolutions engineered by Den Xiao Ping in China and Khomenei in Iran. In the second decade, a victorious West, indulging in rhetorical self-intoxication, mistook the most recent stage of a century-old globalization process for the end of history and even geography. Throughout the 1990s, this infatuation with globalization and a “time-space compression” in the virtual world led most Westerners to ignore the twofold epochal change taking place in the real world: the transfer of the center of gravity of the world economy from the Atlantic to the Pacific, with “three billion new capitalists” poised to put an end to three centuries of Euro-Atlantic economic primacy; and the rise of a “second nuclear age” in Asia and with it, the concomitant end of three centuries of Western military superiority.¹ The year 2001 could have been an eye-opener but the West, too traumatized by the Islamist attack on America, failed to notice an equally important, if less spectacular, development: the creation by China of a coalition, the Shanghai Cooperation Organization, including Russia and Central Asia as members, Iran as a silent partner, and India and Pakistan as observers. It took another five years for Western foreign policy experts to realize that this emerging SCO was, for all practical purposes, an OPEC with nukes, which had the potential to develop, over time, into a full-fledged “NATO of the East.”

End of Dreams, Return of History T he world has become normal again. The years immediately following the end of the Cold War offered a tantalizing glimpse at a new kind of international order, with nations growing together or disappearing altogether, ideological conflicts melting away, cultures intermingling through increasingly free commerce and communications. But that was a mirage, the hopeful anticipation of a liberal, democratic world that wanted to believe the end of the Cold War did not end just one strategic and ideological conflict but all strategic and ideological conflict. People and their leaders longed for “a world transformed.” ¹ Today the nations of the West still cling to that vision. Evidence to the contrary — the turn toward autocracy in Russia or the growing military ambitions of China — is either dismissed as a temporary aberration or denied entirely. The world has not been transformed, however. Nations remain as strong as ever, and so too the nationalist ambitions, the passions, and the competition among nations that have shaped history. The world is still “unipolar,” with the United States remaining the only superpower. But international competition among great powers has returned, with the United States, Russia, China, Europe, Japan, India, Iran, and others vying for regional predominance. Struggles for honor and status and influence in the world have once again become key features of the international scene. Ideologically, it is a time not of convergence but of divergence. The competition between liberalism and absolutism has reemerged, with the nations of the world increasingly lining up, as in the past, along ideological lines. Finally, there is the fault line between modernity and tradition, the violent struggle of Islamic fundamentalists against the modern powers and the secular cultures that, in their view, have penetrated and polluted their Islamic world.

Int’l Institutions and Development

Dealing With Poverty By Focusing on Misery How to help the world's poor? That's a perennial question with apparently ever-shifting answers at the highest levels of government, though some simple approaches are out there. The World Bank these days, under the leadership of newly installed President Robert Zoellick, is looking for a new long-term strategy. The bank's missions are essentially to reduce global poverty and improve living standards. But as The Wall Street Journal reports, as the institution seeks to "prove its continuing relevance," an internal review is urging it to refocus its lending on big borrowers like China, Brazil and Mexico. "Lending to so-called middle-income countries should focus on improving anticorruption measures, easing income inequality and attacking global environmental problems," according to a report by a bank working group that's reviewing its programs and priorities, the Journal says. The bank is "trying to figure out what role it should play in a world where big developing nations have built up huge financial reserves and can borrow readily on private markets," the Journal adds. And while some critics want it to focus on the poorest countries and give them grants rather than loans, the bank depends on money earned from its loans to more prosperous developing nations.

These middle-income countries are those where per-capita income ranges from about $1,000 to $10,000, and they received about $12 billion from the bank in 2006. But as last year's Nobel Peace Prize suggests -- it was awarded to the Bangladeshi microcredit pioneer Muhammad Yunus and his Grameen Bank -- there are strong arguments for alleviating poverty and misery from below. Mort Rosenblum, a veteran American reporter who has probably covered as many global conflicts, humanitarian crises, political phenomena and cultural wonders over the past four decades as any other living journalist, looks at the battle against both misery and poverty in the tribal village of Galder in northern India. Life in Galder, he writes in the International Herald Tribune, is tough, with a 16-year drought getting worse, crops withering and medical care "so precarious that the cure for anything serious is death." Yet, Mr. Rosenblum argues, "faraway experts with prescriptions to end poverty, which most define as living on less than a daily dollar, could learn a lot here." For while no one in Galder seems to have heard of President Bush, everyone there knows Madan Nagda and his "hip-pocket aid agency," MKS. Mr. Nagda helps 100,000 people in 70 villages to improve their lives with the likes of a model farm that shows people "how to coax better yields out of drier land" and hillside sculpting that traps rainwater and channels it into depleted aquifers, as well as clinics that teach hygiene and sanitation, Mr. Rosenblum writes. And the key to Mr. Nagda's efforts seems to be working directly with the people he is trying to help. "If villagers pay no attention to an American president who means nothing to their lives, they vote without fail for their member of parliament and their local leaders," Mr. Rosenblum says. "They know exactly what they need: simple pumps to tap a nearby river and check dams to catch rare rain; a ride to Udaipur so they can market vegetables and get a day-labor job when they need cash; a schoolteacher who shows up for work; help for women who organize community projects."

If poverty is a concept relative to the wealthier economies that define it, and one where only major aid from rich nations and an assault on corruption and inefficiency can make a difference, "misery is what makes poor people give up hope and drink pesticide," he adds. "This, Galder shows us, we can do something about at very little cost."

Zoellick Adopts Wall Street Tools to End World Bank Loan Slump World Bank President Robert Zoellick is bringing a touch of Goldman Sachs Group Inc. to rescue the poverty-fighting agency's slumping business. The former Goldman vice chairman has concluded, after two months on the job, that the group must behave more like a Wall Street investment firm to halt a worldwide slide in lending. At stake is the bank's survival in a rising sea of private capital. At Zoellick's direction, the agency is pushing sophisticated products such as loans that hedge against the risk of a commodity-price collapse or a surge in interest rates. His pitch is emerging as a hard sell against criticism he runs a slow-moving bureaucracy.

·         Zoellick Sees Asia's Clear and Present Danger: William Pesek

Mind the GAP We are about to find out what sort of president of the World Bank Robert Zoellick intends to be.

On Thursday, the Government Accountability Project, (GAP), a self-described public interest law firm, will release an unofficial report on the Department of Institutional Integrity, the World Bank's anti-corruption unit known internally as the INT. Next week comes a second, official report about the INT from a panel of worthies led by former Federal Reserve Chairman Paul Volcker. By the end of the month the INT intends to release its own report on the Bank's health-related projects in India, where there is evidence of corruption running into the hundreds of millions of dollars. That third report is what the first two are really about. But whether its conclusions are ever acted on -- or so much as shared with the Bank's funders, including the U.S. Congress -- will depend on whether Mr. Zoellick has the courage to confront his entrenched bureaucracy. Who among the "World Bank staff members" would wish to undermine the Volcker panel, and why? Why involve the GAP? Is it a credible outfit? Are its promises of confidentiality good? An answer to the first question came a few days later in an internally circulated memo written on behalf of the Bank's "senior management team," then led by Managing Director Graeme Wheeler. While noting that the Bank "fully supports the work of the Volcker Panel" and "[reaffirming] the importance of the existing standards of disclosure," the memo simply acknowledged the GAP study while doing nothing to dissuade bank staff from participating. It isn't surprising that Mr. Wheeler, who led the staff coup against Mr. Wolfowitz, would support the GAP review: The New Zealander is widely seen within the Bank as an enemy of Suzanne Rich Folsom, the American ethics lawyer who runs the INT. Mr. Wheeler also oversees the Bank's activities in South Asia. In late 2005, Ms. Folsom released a devastating INT report on the Bank's health-related projects in India. Now her team is completing a follow-up study on India that may prove even more embarrassing to Mr. Wheeler and his deputies. [World Bank Corruption & Wolfowitz Ally at World Bank Draws Flak ]

In India, even cared-for populace leaves for work This verdant swath of southern Indian coastline is a famously good place to be poor. People in the state of Kerala live nearly as long as Americans do, on a sliver of the income. They read at nearly the same rates. With leftist governments here in the state capital spending heavily on health and schools, a generation of scholars has  elebrated the "Kerala model" as a humane alternative to market-driven development, a vision of social equality in an unequal capitalist world. But the Kerala model is under attack, one outbound worker at a time. Plagued by chronic unemployment, more Keralites than ever work abroad, often at sun-scorched jobs in the Persian Gulf that pay about $1 an hour and keep them from their families for years. The cash flowing home now helps support nearly one Kerala resident in three. That has some local scholars rewriting the Kerala story: far from escaping capitalism, they say, this celebrated corner of the developing world is painfully dependent on it. "Remittances from global capitalism are carrying the whole Kerala economy," said S. Irudaya Rajan, a demographer at the Center for Development Studies, a local research group. "There would have been starvation deaths in Kerala if there had been no migration. The Kerala model is good to read about but not practically applicable to any part of the world, including Kerala." Local lessons would matter less if this were a section of Mexico or Manila — places known for the hardships that make migrants flee. But Kerala's standing as the other way — the benevolent path to development, a retort to globalization — makes the travails of its 1.8 million globalizing migrants especially resonant. The debate about Kerala is a debate about future strategies across the impoverished world.

Countries

Choking on growth China's pollution problem, like the speed and scale of its rise as an economic power, has shattered all precedents. No country in history has emerged as a major industrial power without creating a legacy of environmental damage that can take decades and big dollops of public wealth to undo. But just as the speed and scale of China's rise as an economic power have no clear parallel in history, so its pollution problem has shattered all precedents. Environmental degradation is now so severe, with such stark domestic and international repercussions, that pollution poses not only a major long-term burden on the Chinese public but also an acute political challenge to the ruling Communist Party. And it is not clear that China can rein in its own economic juggernaut.

• China's Influence Spreads Around World

Big Brother Gets More Toys Taking into account all of the high tech weapons China is developing, or producing, you can make a case that their actual defense budget is about $100 billion a year. It's long been common practice in communist countries to hide defense spending in other areas of government activity. China has a very active space program, and part of it is obviously dedicated to military purposes (as in anti-satellite systems). China has several ICBM development projects underway, in addition to several shorter range ballistic missiles in development, or production. The Chinese navy and air force are also building lots of new ships and aircraft. It all adds up, to a much larger number that the current assumptions of about $45 billion a year. Unemployment, pollution and corruption continue to threaten government control. Unemployment is addressed, as it has been for three decades, by encouraging entrepreneurs to form new businesses. But that is done without much regulation, leading to so much pollution, that a sizable chunk of the population (over a third at the moment) is up in arms over. But the corruption is getting the most attention from the government, because this plague is very prevalent in the police and military, and the government needs these two institutions to remain in power.  The anti-corruption campaign remains on track, with the finance minister resigning this week, along with several other lesser ministers. These actions are believed related to corruption charges. While trying to deal with the dirty cops, billions of dollars is being invested in new tools to make police work easier. Hundreds of thousands of video cameras have been installed in urban areas, and millions of these inexpensive vidcams are planned. In addition, a new generation of ID cards are coming, with remotely readable electronic beacons (RFID) built in. Thus people can be tracked 24/7, if they live in one of the wired zones (that is, where the vidcams are.) Taiwan and Japan are annoyed at continued intrusions by Chinese warships into their territorial waters. This has happened twice so far this year, and China ignores complaints about it.

The Campaign Against Taiwan The Chinese influenced deadlock in Taiwan's parliament has left Taiwan much weaker, compared to the 1990s. Increasingly, Taiwan has been falling back on the American pledge to defend it against Chinese aggression. This pledge has some meaning, because Taiwan is the home of a significant fraction of the worlds production capacity for computers and computer components. While China is not much of a nuclear threat to the United States, that is changing. If current trends continue, in another decade, China will be able to grab Taiwan, and the United States may have a hard time putting up a timely and effective defense. But the major problem is that any military confrontation between China and the United States would do great damage to the world economy, of which China is now a major part. China is a major exporter to rich and poor nations alike. For the United States and the West, war with China would be a political inconvenience. But for Chinese leaders, the economic disruption would put over a hundred million workers (in export dependent industries) out of work, and make worse the existing anger of the working class against government corruption and inefficiency.

Germany outpaces France, U.K. in GDP At a European Union summit meeting in 2005, German Chancellor Angela Merkel brought the prime ministers of Poland and the U.K. together after the two men had stopped speaking. Merkel convinced Kazimierz Marcinkiewicz and Tony Blair to resume negotiations, spurring the U.K. leader to accept a higher EU budget and more money for Poland. "Angela Merkel is the best leader within the EU," says Marcinkiewicz, who stepped down as Poland's prime minister last year. "She simply gets things done." New leaders in Europe--French President Nicolas Sarkozy and U.K. Prime Minister Gordon Brown--are now racing to match the success of the 53-year-old German chancellor. This year, she oversaw an agreement to cut corporate taxes by about 9 percentage points to about 30 percent, enacted a health fund to contain the soaring costs of medical care and blocked an attempt by Social Democrats to introduce a nationwide minimum wage.

·         Portrait of President, Craving Power, Enthralls France

• Three held in Germany over terror plot German security forces have prevented a terror attack in Germany that could have been more deadly than the Madrid and London bombings, top security officials said on Wednesday. Police on Tuesday arrested three men who had planned simultaneous car bomb attacks against US military and civil targets, such as pubs and discos, Monika Harms, federal chief prosecutor, said at a press conference in Karlsruhe. Security officials in Berlin said the arrests may be linked to raids and arrests in Denmark on Tuesday, when, according to Danish police, eight people with alleged links to Al Qaeda were detained in order to prevent an attack. Germany's interior ministry and BND foreign intelligence agency have been warning for several months of an increased danger of Islamic terror attacks in Germany, possibly linked to Berlin's military involvement in Afghanistan.Germany has not been the target of a major Islamic terror attack in recent years, but several alleged terror cells have been broken up and suspects arrested, for instance a Lebanese man charged earlier this year with planning a series of train bombs in 2006. Three of the pilots involved in the September 11 2001 terror attacks had been living in Hamburg.

(***) It's 1914 All Over Again: President Vladimir Putin, a former secret police (KGB) officer has given the Russian people what they want. That is, a market economy that actually grows and works, and enough of the old Soviet police state to keep the crime rate down. Putin regularly scores very high in opinion polls, despite state control of most media, and new laws that make it more difficult to oppose the party in power. The new Russian democracy brings with it better security at nuclear power and weapons facilities, and long over-due military reforms. Some fear it will being back the bad-old-days of a full blown police state. But that hasn't happened yet.

Chechen ‘hitmen’ and FSB agents are held over journalist’s murder Members of the Russian security services were involved in a conspiracy with organised crime to assassinate Anna Politkovskaya, the investigative journalist, the country’s chief prosecutor announced yesterday. Yuri Chaika said that ten people had been arrested for the murder, five of whom were officers of the Federal Security Service (FSB), the successor to the KGB, and the Ministry of Internal Affairs (MVD).

They had tracked Ms Politkovskaya and passed information about her movements to a gang of Chechen hit men who had carried out the killing. She was shot in the lift of her apartment building on October 7, President Putin’s 54th birthday. “The group was headed by the leader of a Moscow criminal group of Chechen origin,” Mr Chaika, the Prosecutor-General, said. Those arrested included “the organisers, accomplices and hitmen”. The arrest of security service officers brings the inquiry uncomfortably close to the authorities, whom Ms Politkovskaya had accused repeatedly of collaborating with criminals to eliminate opponents of the Kremlin. Mr Chaika insisted that the FSB and MVD played no role in the assassination of one of Mr Putin’s most vehement critics. ( A Death in Moscow plus First Chapter: ‘A Russian Diary’ )

 

Putin Must Establish `Fair Rules,' Russian Business Leaders Say -- Viktor Gerashchenko, chairman of OAO Yukos Oil Co., sits in his almost-empty office on the 10th floor of the now-bankrupt oil giant's headquarters, its logo stripped from the roof, lobby and doors. The building in central Moscow is a stark symbol of Russia's triumphant return as an economic player under Vladimir Putin, 54, now in his eighth year as president. His administration's 2003 attack on Yukos was the first on a private company and ended with its founder in prison and key assets sold to a government entity. Since then, Russia has tightened its grip on energy resources, created ``national champions'' in aerospace and shipping, taken over automobile plants and unveiled a $5 billion nanotechnology initiative. As the country enters election season, industrialists and bankers are asking whether seizing the economy's ``commanding heights'' -- an echo of the Stalin-era motto for centralization -- is good for business. They say they worry about the ability of a powerful and unaccountable bureaucracy to regulate itself. Many bureaucrats confuse their public functions and private interests, fueling corruption, says Dmitri Zimin, the founder of Moscow-based OAO VimpelCom, Russia's second-largest mobile-phone operator. ``In Russia, bureaucrats are the state,'' he says. ``Their appetite for power and wealth can be limited only by outside forces. If they are not checked, their appetites will have to be fed all the time.''  The quickening pace of government acquisitions adds tension ahead of a political transition, with parliamentary elections in December and a presidential vote next spring. Putin, barred from a third term, has yet to announce the Kremlin's preferred candidate.

• Moscow warns EU on ‘unfair’ energy plan The Kremlin on Thursday called on the European Union to stop worrying about the security of Russian energy supplies and said it would do everything legally possible to ensure Russian companies enjoyed fair access to downstream natural gas and electricity assets in Europe. The EU is considering measures to prevent some foreign investors, including Russian companies, from taking over European gas and electricity assets amid fears that Russia, the biggest single gas supplier to the region, might grow to dominate distribution networks.

 

Africa's New Car Dealer: China In Africa's richer economies, such as South Africa, Chinese car makers already are going head-to-head with global brands for low volumes of new car sales. In South Africa, Great Wall has set up 20 dealerships since the beginning of 2007 and is planning to extend to 30 by 2008. But most Africans, especially in poorer economies such as Senegal in West Africa, don't have the means to buy a new Toyota, Ford or Volkswagen. Africans buy hundreds of thousands of used vehicles a year from developed nations. West Africa favors nearby Europe. Mr. Seck is on the buying end of a trend that is denting Europe's considerable used-car exports to the developing world and sending out early warning signals to established makers of new cars. Still unable to compete for the rich markets of the U.S. and Europe because of tough regulatory and marketing hurdles, China's young car companies are moving aggressively into Africa. Africa is too poor to be a big market for the world's major automobile brands, but the industry is watching closely. In addition to exporting, China's car companies are developing manufacturing hubs outside the country. Chery finished building a plant in Iran in 2003. Last year it started making cars in a former Daewoo factory in Egypt.Reacting to the price pressures, some European and American manufacturers are scrambling to develop bargain models of their own

• In India, a Big Push Into Small Cars For the past four years, auto enthusiasts in India have been eagerly awaiting the launch of one of the industry's most ambitious projects, Tata Motors' ultra-low-cost car. Ratan Tata, chairman of India's largest private-sector conglomerate, announced in 2003 his intention to make a $2,200 car, which is now likely to debut at the Indian auto show next January in New Delhi. Others are not just waiting to see what Tata unveils. The group's innovative venture into the very-small-car space has sparked the imaginations of a host of Indian entrepreneurs, who are planning to compete with products of their own. In the last couple of months, many Indian manufacturers -- from scooter and motorcycle makers to automakers, auto component players, and various auto professionals -- have announced plans to roll out low-cost cars.
• India's Tata eyes UK car legends The chairman of India's Tata Group has confirmed that he is interested in acquiring Jaguar and Land Rover from their parent, Ford.
• On the Silk Road Again What happens when four friends drive a new car across an ancient trade route, dodging camels, braving sudden sandstorms and off-roading around jade mines. A 1,700-mile road trip through a changing China. (View an interactive map; Silk Road Video )

·         Rating the Chery The newly private Chrysler in the U.S. plans to export the car -- and models based on it -- around the world, selling them under its Dodge brand. Chrysler says it will start offering the car in Latin America and other developing markets by the end of 2008. The vehicles will go on sale in the U.S. and Western Europe in 2009, after they are modified to meet those markets' stricter safety and environmental rules, Chrysler says. ( Silk Road Video )

 

KOREA: The Poison More rumblings from the senior leadership in North Korea. There is apparently some disagreement over how to handle the current economic crises. The major problem is the growing unrest in the country, with bribery and illegal activity becoming more common. Government attempts to impose discipline, just result in larger bribes, and a few dead prisoners (people who could not afford the larger bribes). More food and financial aid from abroad could be used to restore order, by, in effect, having the government bribe its wavering police, officials and border guards to shape up. But long term, the "dissent and disobey disease" is loose upon the land. The people now know that there's a different world out there, and it's a much better world than what is in North Korea. The truth may make you free in some parts of the world, but in North Korea it's a poison that is destroying the iron grip the government has long had on the population.

NAVAL AIR: Japan's Secret Aircraft Carriers Japan plans to build at least two Hyuga-class vessels, which can carry up to 11 helicopters, displace 13,500 tons, and are equipped with a Mk41 VLS, giving them the ability for fire air-defense missiles like the Standard and the ESSM, and a vertically-launched ASROC, but also the Tomahawk cruise missile, if Japan wished to do so. It also has two triple 12.75-inch torpedo mounts. This ship in the same weight range of the European "Harrier carriers" (the British Invincibles, the Italian Garibaldi, the Spanish Principe de Asturias, and the Thai Chakri Narubet-classes). While this ship is currently planned to carry helicopters only, European experience (particularly from the British) has shown that this can be an effective platform for fixed-wing aircraft, like the F-35B. That makes the designation of "helicopter carrying destroyer" technically true, but in reality a useful fiction. In essence, they could act as small aircraft carriers or as a landing platform helicopter like HMS Ocean if transport helicopters are used. In essence, Japan will have a ship about the size of the vessels that were the centerpiece of the British response to a crisis halfway around the world 25 years ago, with a flight deck and an offset island. They performed well, too

• Manga Mania Wide-eyed superheroes, latex-booted heroines and wild-haired supervillains might seem like unlikely international goodwill ambassadors, but Japan's Ministry of Foreign Affairs hopes they will be just that. The politicos are gambling that manga and anime -- distinctive forms of comic books and movie animation, respectively -- and the diehard fans who dress up as their favorite characters in homemade costumes to attend conventions (the practice is called "cosplay") will spruce up Japan's image abroad. It's a risky bet.

Pakistan Says Talks With Bhutto's Party Are Making Progress -- Pakistan's government said it is making progress in talks with Benazir Bhutto's political party on a power-sharing agreement that would ease opposition to President Pervez Musharraf seeking a new term in power. Bhutto and Nawaz Sharif, both former prime ministers living in exile, say they intend to return to Pakistan this month before presidential elections scheduled before mid October and to prepare for general elections that must be held by January 2008. Musharraf is facing the most serious opposition to his rule since he took power in a military coup in 1999.

The kibbutz sheds socialism and gains popularity Israel's kibbutzim are once again thriving, attracting new members with a mellower version of collective living. For much of Israel's existence, the kibbutz embodied its highest ideals: collective labor, love of the land and a no-frills egalitarianism. But starting in the 1980s, when socialism was on a global downward spiral and the country was mired in hyperinflation, Israel's 250 or so kibbutzim seemed doomed. Their debt mounted and their group dining halls grew empty as the young moved away. Now, in a surprising third act, the kibbutzim are again thriving. Only in 2007 they are less about pure socialism than a kind of suburbanized version of it. On most kibbutzim, food and laundry services are now privatized; on many, houses may be transferred to individual members, and newcomers can buy in. While the major assets of the kibbutzim are still collectively owned, the communities are now largely run by professional managers rather than by popular vote. And, most important, not everyone is paid the same. Once again, people are lining up to get in.

Posted by dblwyo at 04:16 PM | Permalink | Comments (0)

Time flies while you’re having fun, distracted by holidays and short weeks or get wrapped up in other things. Despite collecting a bunch of addresses to really interesting stuff I neglected to post last week’s Weekly Reader(s) and have combined this and last week’s together. And then, because there is so much stuff, re-split them into four entries. This one will focus on Iraq and the ME. As usual the Special section contains the read these if no other specials but two particularly interesting articles. The first, and perhaps the over-whelmingly most important is that a multi-sectarian religious conclave of Sunni, Shia and Kurd clerics have issued a joint fatwa against the violence.

 

If that sounds really….really important it’s not – it’s much more. Perhaps the critical problem(s) are finding a common center that the different factions can agree to share after centuries of mutual hostilities and exploitations, exacerbated by Saddam’s (& no dying well doesn’t redeem a life of irretrievable evil – first time I’ve wished that both Hell and re-incarnation were simultaneously true so he could come back as camel dung while serving in the 9^th Circle). The section on Iraq domestic talks about other efforts but has major links to the various domestic US partisan political attacks on Maliki where our domestic internecine agendii were put ahead of good public policy. Fortunately that seems to have not played well and is dying down. The critical questions there are a) if not him then who and b) remembering Diem’s ouster in ‘Nam why we commit that stupidity again before giving a reasonably qualified incumbent all our support.

 

Overall progress continues to be made resulting in growing decreases in violence, in the West of all places, and increased cooperation from Sunni tribal leadership and others. Leading the US to shift it’s nation-building efforts, which have foundered on a lack of skills and resources and faction squabbling at the national level, to local projects in conjunction with local leadership.

 

Unlike ‘Nam where our political and military leadership lacked the moral courage to take responsibilities for the failures of policy and strategy and, in a strong spirit of denial, refuse to adopt and adapt we’re making some small amount of progress. It may still be too little to late but then anybody who thought this was a short-term exercise has had that theory tested. The sad parts of this are that re-discovering counter-insurgency doctrine is re-learning the lessons of Vietnam and specops. It’s also re-discovering that the military is great at it’s core tasks but is having to step into the breach on civil affairs because NO other arm of the government has been able to – largely due to no resources, lack of skills and unwillingness. The changes in the military in particular are huge and get their own section.

 

The other interesting set of links points to Iranian intransigence on maintaining support for subversion in pursuit of internal Iranian factions policies, against the overall best interests of their people and country. Their country suffers increasingly from a collapsing economy brought about by a combination of wrong-headed economic policy along with endemic exploitation and corruption sponsored by the theocratic faction. Meanwhile their president has graciously allowed as how Iran is eager and willing to step into the power vacuum created and abandoned by the Great Satan.

It might be worth your while to refresh your memory on why these are the critical touch points by looking at the list of issues, the evaluation framework and the context. 

Special & General

Will You Answer the Call? Stop what you're doing and simply listen for a moment so you may hear a conversation that is going on across America. It is not about who will be the next president, but about why average citizens aren't more fully engaged in the war on terror. Why haven't we all been asked by our leaders to give more of ourselves as in previous wars? And most importantly, what can and should we all do about the national disconnect between citizen and soldier?

In part, most of us have gone on with our lives with minimal interruption because we are fighting an intensive, protracted two-front war with an all-volunteer force. Only a relatively small slice of American society, myself included, has any real connection to the brave men and women in uniform protecting our freedoms every day. Fewer still have any idea what their families are going through as they wait for their service members to come home.

·         'Musical Mercenary' Blogs About Opera, War· Sean McFate has flown with the 82nd Airborne, and helped demobilize African armies as a private military contractor — but his true love is opera. His blog, the 'Musical Mercenary,' has the tagline: "War meets opera. May all our passions be deadly."

A Fatwa Against Violence Last week, I participated in a three day meeting here that included six of the most senior Iraqi Sunni and Shia religious leaders. At the meeting, held at a Marriott hotel in a Cairo suburb, they formally agreed to "end terrorist violence, and to disband militia activity in order to build a civilized country and work within the framework of law." This gathering was a truly historic event, given the authority of the participants -- including Sheikh Ahmed al Kubaisi, acknowledged by all Iraqis as the senior Sunni religious authority (the weekly audience for his Friday sermons, broadcast from Dubai, number 20 million), and Ayatollah Sayyid Ammar Abu Ragheef, chief of staff for Grand Ayatollah Ali al Sistani, the acknowledged leader of the Shia community in Iraq and beyond. One has only to consider the power of these specific religious leaders, and the instruments at their disposal for getting results, to grasp the gathering's enormous potential importance. Going well beyond traditional rhetoric in their closing statement late last week, they stated their intention to work for the early issuance of a joint Sunni-Shia fatwa to the Iraqi people. A fatwa such as this will carry the force of law for all followers. Think about that. After more than four years of brutal warfare and untold suffering, the leading religious authorities in Iraq have joined hands and said "Enough," and have committed to use their authority to bring peace to their country.

What France can do in Iraq What can be said about Iraq today? It is a "democratic" country - with a Constitution adopted by referendum and universal direct suffrage - that is at war with itself. It is a country liberated from a bloodthirsty dictatorship - which killed between 2 million and 4 million people - where blood continues to be shed. It is a country of paradox and segmentation, like the hearts and minds of its people. Outside of a highly protected "Green Zone" in Baghdad, and a more or less stable Kurdish region, Iraq is being ripped apart by a storm of hatred and violence that has driven 4 million refugees from their homes and continues to kill nearly 2,000 people every day. I have just returned from three days in Iraq. I went to listen to the candid views of its people - Shiites, Sunnis, Kurds and Christians - in order to get a feel for what they think. I also wanted to express France's complete support for the crucial goal of national reconciliation and for the inclusive dialogue that is needed to bring this about. In my conversations there, I perceived a deep need among many Iraqis for recognition and for new ties with France and Europe. The Iraqis have been isolated for too long and feel abandoned by the international community. After years of debating the American presence in Iraq, the time has come for us to turn our attention to the Iraqis themselves. What can France do to help this ravaged country recover hope? First, it can be modest. No one imagines that we have a magic formula. But as one Iraqi official said when I asked him what France could do, "It can offer a fresh look." Another official added, "Restore our self-respect." The dream of an Iraq at peace with itself is not beyond reach. Much effort, clear-headedness and conviction can make it a reality - provided we all have the courage to get the job done. If we shy away from this, we can expect the worst.

Iraq Domestic

If Maliki Isn’t the Right Man, Who Is Better? Some U.S. politicians have called for the ouster of Iraqi Prime Minister Nouri al-Maliki, but his departure could undermine the war-torn country’s few surviving pockets of democracy, says historian Juan Cole in Salon. Mr. Maliki has been taking a drubbing lately from both sides of the aisle, as prominent senators look for a politically safe way of attacking the Bush administration’s Iraq policy without seeming soft on defense.

Hillary Clinton (D., N.Y.), Carl Levin (D., Mich.) and John Warner (R., Va.) have accused the Shiite Mr. Maliki of not building a stronger coalition with Sunni parties. Mr. Maliki has many faults, says Dr. Cole, but few if any politicians in Iraq could build enough support across the sectarian divide to more effectively achieve U.S. aims. If Mr. Maliki stepped down, his successor most likely would emerge either from his own party or another Shiite party, the Supreme Islamic Iraqi Council led by cleric Abdul Aziz al-Hakim. The elevation of the SIIC, which is bothfriendlier to Iran than Mr. Maliki and more hostile to Sunnis, hardly would play into U.S. hands. Forming a new government could take six months, deepening the country’s political gridlock. Meanwhile, the split between Sunni factions and the Shiite-Kurdish political alliance might widen, further denting U.S. goals for a peaceful and democratic Iraq. For Republicans in particular, taking on Mr. Maliki avoids raising questions about President Bush’s handling of the war, says Dr. Cole, a professor of Modern Middle East and South Asian history at the University of Michigan. Dr. Cole says U.S. politicians might be right that Mr. Maliki isn’t the right man for the job, but they would do better to leave Mr. Maliki’s fate to the Iraqi parliament, or else “undermine what little faith remains in democracy in Iraq.”

• Iraqi prime minister assails democratic U.S. critics Prime Minister Nuri Kamal al-Maliki said that Hillary Rodham Clinton and Carl Levin had spoken "as if Iraq is one of their cities."
• The war against Iraq's prime minister Sens. Hillary Clinton and Carl Levin are calling for Nouri al-Maliki's ouster as a way of attacking Bush's Iraq policy. But do they understand the consequences?

Maliki met with Iraq's top Shiite cleric to discuss the possibility of forming a new government, efforts to fill vacant cabinet posts. During the closed-door meeting in Najaf, Mr. Maliki briefed Mr. Sistani over efforts to fill cabinet jobs vacated when ministers from the largest Sunni Arab bloc and radical cleric Muqtada al Sadr's movement pulled out to protest the prime minister's policies. In addition to filling the cabinet posts, Mr. Maliki said he also discussed the possibility putting together a new government -- one made up of nonpartisan technocrats -- though he emphasized it was currently only an "idea" that was being considered among others. Mr. Maliki didn't give a time frame for making a decision, but he made it clear his government cannot go on indefinitely with an incomplete team of ministers, as has been the case since six Sadrist ministers quit in April over his failure to announce a timetable for the withdrawal of foreign troops in Iraq. The Sunni Arab ministers withdrew in August.

Iraq & US

(***) If Iraq Falls In contrast to President Bush's dark comparison between Iraq and the bloody aftermath of the Vietnam War last week, there is another, comforting version of the Vietnam analogy that's gained currency among policy makers and pundits. It goes something like this: After that last helicopter took off from the U.S. embassy in Saigon 32 years ago, the nasty strategic consequences then predicted did not in fact materialize. The "dominoes" did not fall, the Russians and Chinese did not take over, and America remained No. 1 in Southeast Asia and in the world. But alas, cut-and-run from Iraq will not have the same serendipitous aftermath, because Iraq is not at all like Vietnam. Unlike Iraq, Vietnam was a peripheral arena of the Cold War. Strategic resources like oil were not at stake, and neither were bases (OK, Moscow obtained access to Da Nang and Cam Ranh Bay for a while). In the global hierarchy of power, Vietnam was a pawn, not a pillar, and the decisive battle lines at the time were drawn in Europe, not in Southeast Asia. The Middle East, by contrast, was always the "elephant path of history," as Israel's fabled defense minister, Moshe Dayan, put it. Legions of conquerors have marched up and down the Levant, and from Alexander's Macedonia all the way to India. Other prominent visitors were Julius Caesar, Napoleon and the German Wehrmacht. The Bush presidency will soon be on the way out, but America is not. This truth has recently begun to sink in among the major Democratic contenders. Listen to Hillary Clinton, who would leave "residual forces" to fight terrorism. Or to Barack Obama, who would stay in Iraq with an as-yet-unspecified force. Even the most leftish of them all, John Edwards, would keep troops around to stop genocide in Iraq or to prevent violence from spilling over into the neighborhood. And no wonder, for it might be one of them who will have to deal with the bitter aftermath if the U.S. slinks out of Iraq. These realists have it right. Withdrawal cannot serve America's interests on the day after tomorrow. Friends and foes will ask: If this superpower doesn't care about the world's central and most dangerous stage -- what will it care about?

• A familiar U.S. strategy to help stay the course in Iraq
• Abandon Iraq and see a Vietnam horror show A man who saw the hell Vietnam descended into after America left, warns against inflicting the same disaster on Iraq

This Isn't Civil War We are winning this war. I write those words from my desk in the Red Zone in downtown Baghdad as hundreds of Iraqis working with my company -- Shia and Sunni, Arab and Kurd -- execute security, construction and logistics missions throughout the capital and Sunni Triangle. We have been here now over three years.

American-Iraqi Solutions Group, which I helped co-found in March 2004, has been intimately involved with creating the new Iraqi security services. Our principal business as a U.S. Department of Defense contractor is to build bases for the Iraqi army and police and then supply them with water, food, fuel and maintenance services. We are on the cutting edge of the exit strategy for the U.S. military: Stand up an effective Iraqi security structure and then we can bring our troops home. We are not out of the Iraqi desert yet. But the primary problems we now face on the ground are controllable, given a strong American military presence through 2008. These problems include the involvement of Iran in fueling Shia militancy, the British failure to uphold their security obligations in the south and the tumultuous nature of a new democracy. Ambassador Ryan C. Crocker recently said the one word he would choose to describe the feelings of the Iraqi people was "fear." A bad choice, from my observation. That's not the prevailing state of mind, except maybe for those sheltered souls in the Green Zone who are getting hit on a regular basis for the first time in more than a year by primarily Iranian-supplied rockets and mortars. What I see on the faces of the thousands of Iraqis working with us, including our subcontractors and suppliers as well as on the faces of the Iraqi army and police, patrolling and manning the checkpoints and assisting U.S. soldiers in searching for the insurgents is grim determination to get the job done.

I also see exhaustion -- exhaustion with the insurgency, whether it be al Qaeda, neo-Saddamist, or Jaish al Mahdi (JAM), or the Shia militia of Moqtada al-Sadr. The exhaustion is real, and the evidence of the falling support among the Iraqi people for the insurgency in its various guises is inescapable -- unless you are deliberately looking the other way.

A large proportion of our thousand-man work force -- of which 90% are Iraqi citizens -- comes from Sadr City, the Shia slum in east Baghdad. Many carry weapons. These Shia warriors have emphasized in the past several months that they and their neighbors are tired of conflict and only want to feed their families.

Gen. Petraeus' Pivotal Report There really is no particularly informative historical precedent for Gen. David Petraeus' upcoming public assessment of Iraq. Perhaps we are entering new historical terrain, where the commanding general's pivotal strategic gambit is a media event. And media event it is. With its certain long-term global import and short-term political impact, Petraeus' report meets a hustling television exec's primal requirement: drama. When the spotlight strikes his face and he begins to speak, we will witness drama in large letters. No one, however, should confuse the general's appearance with entertainment. The quick commentators will dub his report a historical pivot. That will be true, but only in a narrow sense. Despite the sensationalist headlines and hyperbolic fretting, given the decades of terror and the centuries of political fossilization afflicting the Middle East, the trend lines in The War on Terror are astonishingly good. Trends are the great truths behind pivotal moments, and Petraeus is aware of that. Since 9-11, America has made great strides in addressing at the fundamental level the social pathologies that seed Islamo-fascist terrorism. In short form it is this: The choice between tyrant and terrorist is no choice. Modernity requires a degree of social consensus and economic liberalization. Iraq is thus a radical experiment in modernity in a vital region afflicted by economic failure, tribal factiousness and oil-dollar powered feudalism.

The Facts On The Ground The major problem in Iraq is back in the United States. There, many politicians either don't bother, or don't want to believe, what is actually happening, and has happened, in Iraq. In a way, that makes sense. Because what is going on in Iraq is so totally alien to the experience of American politicians. But many Americans take a purely partisan, party line, attitude towards Iraq. So logic and fact has nothing to do with their assessments of the situation. The facts are these. Iraq is an ancient civilization that has been subjected to foreign occupation (Mongol, Iranian, Turkish, British) for the last thousand years. Iraq was put together by the British, in the 1920s, from fragments of recently dissolved Turkish Ottoman empire. The northern part of Iraq, containing mainly Kurds, was considered part of Turkey itself, and not an imperial province like the rest of Iraq. But there was oil up there, and the British did not want the Turks to have that, in case there was an effort to revive the Ottoman empire. The British set up a constitutional monarchy, complete with parliament, and royal family imported from Saudi Arabia (a noble family that had been ousted by the Sauds). While democracy was alien to this part of the world, many Iraqis took to it. But there were serious problems with corruption, tribal, ethnic and religious loyalties. The Kurds weren't Arab (they were Indo-European, and about 20 percent of the population), 60 percent of the Moslems were Shia (a sect considered heretical by the conservative mainline Sunnis). The Sunni Arabs may have been a minority, but they dominated commerce, government, education and running things in general. Since the 16th century, the Sunni Turks had relied on the Baghdadi Sunni Arabs to help run things.

In Iraq, one man's Mission Impossible A former Silicon Valley exec turned Pentagon boss wants to put Iraq back to work. But he's run into many roadblocks - including his own government. One of the little-known consequences of the American-led regime change four years ago was that most of the country's half-million industrial workers lost their jobs when the Baathist government, which had run the factories, collapsed. American administrators, who believed the Soviet-style system was antiquated, inefficient, and, well, socialist, had no interest in restarting the factories. Pure, unvarnished, American-style capitalism was the answer. But while waiting for Adam Smith, says Sabah al Khafaji, the director-general of the bus factory, some of his former workers joined the insurgency. "At least they paid," he says through a translator.

Brinkley has another idea. A balding systems engineer with four patents to his name and backslapping Texas charm, he says his strategy isn't rocket science: If you have a decent job, you're less likely to plant a roadside bomb. But the implementation of that strategy has proved far more complicated and controversial than anyone expected. Money to get the factories restarted has been hard to come by. Finding buyers for the goods in the U.S. has been even harder (only one company, a small Memphis retailer, has signed on so far). And that's on top of the Herculean challenges of doing business in a war zone where electricity is erratic, supplies are scarce, and employees can get blown up on the way to work. Even people in his own government snipe at him. Brinkley has been called a "Stalinist" hell-bent on fixing a broken system and a "well-intentioned guy on a fool's errand." Of course, no one will confuse this place with a Toyota plant in Kentucky. The workers wear sandals, the machinery is from the 1970s, and most of the welding is still done by hand. The buses themselves probably wouldn't stand up to Western quality standards. Inside one of the coaches the screws don't seem fully secured, the welding appears uneven, and the upholstery doesn't fit. "We are in the Stone Age," says one worker, putting down his Russian-made drill. He refuses to give his name for fear of being singled out by the insurgents: "No good can come from talking to Americans." Brinkley was there that day to hand al Khafaji a check for $1.5 million - or at least an oversized ceremonial version of one - so that he can buy new machinery. "What's the alternative?" Brinkley asks. "We've been at this for four years. A free market hasn't emerged. You've got over 50% unemployment. Can't we take it as table stakes that mass unemployment creates social unrest? If you're not going to try to put everybody back to work anyway you can, what do you do? Just pull out and leave them unemployed and angry?"

U.S. Shifts Iraq Focus As Local Tactics Gain The Bush administration is quietly moving toward a major shift in Iraq policy, driven by successes in formerly intractable insurgent strongholds combined with dispiriting failures at fostering national reconciliation. After almost four years of trying to build Iraq's central government in Baghdad, the U.S. has found that what appears to work best in the divided country is just the opposite. So senior military officials are increasingly working to strengthen local players who are bringing some measure of stability to their communities. The new approach bears some striking similarities to the "soft partition" strategy pushed by senior Democrats, and suggests that despite the often bitter debate in Washington on Iraq policy, a broad consensus on how to move ahead in the war-torn country may be forming. senior military officials are worrying less about the dysfunctional central government that has been the focus of so much effort in the U.S. military and political strategy over the last three years. The change is the simple outgrowth of what the summer surge of more than 30,000 troops into Iraq has wrought. The U.S. has been most successful in areas where it has taken an intensely local approach, working with local leaders who share U.S. goals. The logical result of the new policy is a profound shift away from the Bush administration's original goal of building a multisectarian democracy in the heart of the Middle East. Instead, the new strategy seems likely to lead to an Iraq with a very weak central government and largely self-governing and homogenous regions. Over the long term the goal is to connect these local leaders to the central government by making them dependent on Baghdad for funds. To qualify for U.S. assistance, local groups must pledge loyalty to the central government, though many Sunni leaders who are working with the U.S. complain the Shiite dominated government is illegitimate.

·         Mahdi Militia Stymies U.S. Security Push U.S. commanders intent on building capable Iraqi security forces and a competent Iraqi government say their efforts are increasingly being stymied by the radical Shiite Mahdi Army. The group emerged in 2003 to defend Shiite neighborhoods from attacks by Sunni insurgents. Today, the Mahdi Army has infiltrated Iraq's government and society so deeply that the Americans are struggling to distinguish friend from foe. The militia's political arm controls several Iraqi ministries and is a fractious member of the Shiite-dominated ruling coalition in Baghdad. Yesterday its leader, the anti-American cleric Moqtada al-Sadr, ordered a six-month suspension of all Mahdi Army activities so that he can "rehabilitate" the force. U.S. officials say Mr. Sadr's announcement is an acknowledgment that the militia's rogue elements, which have attacked U.S. forces, Sunnis and even moderate Shiites, are sapping support for his movement among Iraqis.

Iran

Why Iran will fight, not compromise  What can the West offer the Islamic Republic of Iran in return for giving up its nuclear ambitions and kenneling its puppies of war? The problem calls to mind the question regarding what to give a man who has everything: cancer, AIDS, Alzheimer's, diabetes, kidney failure, and so forth. Iran's economy is so damaged that it is impossible to tell how bad things are. Except perhaps for the oilfields of southern Iraq, and perhaps also northern Saudi Arabia, there is nothing the West can give Iran to forestall an internal breakdown. Iranian dissidents put overall unemployment at 30% and youth unemployment at 50%. Government subsidies sustain a very large portion of the population; 42% of the non-agricultural population is employed by the Iranian state, compared with 17% in Pakistan. Within fewer than 10 years, Iran will become a net importer, at which point the government no longer will be able to provide subsidies. Iran's economic implosion is a source of imminent strategic risk. What most analysts, including this writer, foresaw as a medium-term problem seems to have confronted Iran much sooner than expected. The present inflation rate of about 20%, driven by a 40% rate of monetary expansion, suggests that government resources are already exhausted. Governments resort to the printing press when they no longer can raise sufficient funds through taxation, sales of state-owned commodities such as oil, or borrowing. That is surprising, considering that Iran reported a current-account surplus of US$13 billion last year. The fact that Iran cannot stabilize its currency suggests a breakdown of political consensus within the regime, and a scramble by different elements in the regime to lay hands on whatever resources it can.

·         Iran's Nuclear Threat Aided by Front Companies, Bankers in Rome, U.S. Says

·         Iran risks attack over atomic push, French president says

·         Iran says ready to fill vacuum in Iraq left by U.S.

 

Hard Times For Hard Liners Big changes at the top. Former president Akbar Hashemi Rafsanjani has been elected as  head of Iran's Assembly of Experts. The previous incumbent died. This group, of 83 senior clerics, elects the Supreme Leader, a cleric, of the country. This official (currently 67 year old Ayatollah Ali Khamenei) outranks everyone, and is the last word on everything. The Assembly of Experts can also remove the Supreme Leader, but usually everyone works together. The head of the  Assembly of Experts controls the agenda, for what is done, and to whom. President Mahmoud Ahmadinejad tried to get one of his allies elected head of the Assembly of Experts, but failed. The "moderates," led by  Rafsanjani, got 41 votes, compared to 34 for Ahmadinejad's man. This is seen as a payback moment. Ahmadinejad defeated    Rafsanjani in the 2005 presidential elections. But since then, Ahmadinejad's scare talk has cost the president a lot of support. Ahmadinejad's promises of reform and honest government have not happened. The hard liners are on the defensive. An example of this is the removal (shortly after  Rafsanjani was elected) of the head of the Revolutionary Guards (the clerics private army).  A pro-Ahmadinejad officer was replaced by a pro-Rafsanjani man.   Rafsanjani served as president from 1989 to 1997, and was elected by over 80 percent of the population, on promises of reform and moderation of the strict religious line advocated by hard liners. This scared the hard liners, and they cracked down on moderate or reform politicians, forbidding most of them from running for office. Rafsanjani took the hint and retired to the sidelines. But the backlash, both internally and externally, has shocked even the senior clerics. Many believe people like Ahmadinejad  are leading the country to confrontation and destruction.  While the Islamic radicals believe they are on a mission from God, and entitled to run the country as a religious dictatorship, they are not blind to public opinion (most Iranians hate them), or the attitudes of  foreigners (Iranian  threats to destroy Israel and the U.S. are not ignored.)

Military

Letting Soldiers Do the Thinking  Today's officers lead an Army that was sent into Iraq in 2003, and by 2004 the operation became, as an officer here says, "a deployment in search of a mission." Since then, missions have multiplied. Today's is to make possible an exit strategy. Gen. David Petraeus's Army/Marine Corps Counterinsurgency Field Manual says counterinsurgency's primary objective is to secure the civilian population rather than destroy the enemy. This inevitably involves the military in organizing civil society, a task that demands skill sets that are scarce throughout the government and have not hitherto been, and perhaps should not be, central to military training and doctrine. Nevertheless, the War College is coming to grips with the fact that what soldiers call "nonkinetic" -- meaning nonviolent -- facets of their profession are, in Iraq, perhaps 80 percent of their profession. For soldiers, the tempo of change, technological as well as intellectual (and technological change is a driver of intellectual change), is accelerating. For centuries, nations assumed that they could be seriously threatened only by other nations; that terrorism was a weapon of the weak and therefore a weak weapon; that wars are won by large, decisive battles. Petraeus, however, says his mission is to buy time for political reconciliation to occur. The recent National Intelligence Estimate said that although the surge is producing real if uneven security improvements, progress toward political reconciliation has been negligible and might be perishable. Hence the surge is a tactical success disconnected from the strategic objective it is supposed to serve. We see in Iraq "military doctrine attempting to fill a civilian vacuum." In counterinsurgency, "nonmilitary capacity is the exit strategy," which is problematic when "more people play in Army bands than serve in the U.S. foreign service." Counterinsurgency "relies upon nonkinetic activities like providing electricity, jobs, and a functioning judicial system. . . . But U.S. civilian capacity has proved wholly inadequate in Afghanistan and Iraq." The military is "in a quandary about the limits of its role" as it is forced "to assume the roles of mayor, trash collector and public works employer."

Challenging the Generals America’s junior officers are fighting the war on the ground in Iraq, and the experience is making a number of them lose faith in their superiors. War Critiques Reveal Rifts Among Officers The controversy over Col. Yingling's essay is part of a broader debate within the military over why the Army has struggled in Iraq, what it should look like going forward, and how it should be led. It's a fight being hashed out in the form of what one Pentagon official calls "failure narratives." Some of these explanations for the military's struggles in Iraq come through official channels. Others, like Col. Yingling's, are unofficial and show up in military journals and books. The conflicting theories on Iraq reflect growing divisions within the military along generational lines, pitting young officers, exhausted by multiple Iraq tours and eager for change, against more conservative generals. Army and Air Force officers are also developing their own divergent explanations for Iraq. The Air Force narratives typically suggest the military should in the future avoid manpower-intensive guerrilla wars. Army officers counter that such fights are inevitable.

• Read Lt. Col. Paul Yingling's May article in Armed Forces Journal criticizing the Army's leadership.
• See the new counterinsurgency doctrine written in 2006 with the oversight of Gen. David Petraeus, now the top general in Iraq. (12MB PDF)

·         See Lt. Col. John Nagl's essay arguing that the army should build an advisory corps

The Military Has Yet to Truly Embrace Technology To cut spending and boost performance, the U.S. military needs to tailor its tanks, planes and ships to the latest advances in technology, rather than the other way around, writes military historian Edward N. Luttwak in the American Interest (subscription required). In the military, as in other industries, equipment increasingly is made up of electronic components. While the introduction of ever-more-powerful technology has lowered unit costs in some fields, in the military, the cost of individual items, including aircraft, warships and tanks, has risen almost across the board. Many military observers blame the higher prices on the concentration of defense manufacturing among a handful of companies. But Mr. Luttwak, a senior fellow at the Center for Strategic and International Studies in Washington, says the real cause is the military’s institutional fear of letting go of the weapons platforms it has used since World War II. Despite the growing importance of information technology and sensor equipment in warfare, the military won’t adjust its tanks and jet fighters to accommodate the new systems, he says. “We are shoving, cramming and molding such technology to fit into the nooks and crannies of 1945-era platforms.” For instance, the latest airborne radar can track multiple targets and attack electronic circuitry with highly focused beams. Mr. Luttwak says this advantage is sufficient for the U.S. to consider building bulkier and less aerodynamic planes to make room for the radar. But the military is focused primarily on attributes like speed that were crucial for planes 50 years ago but have become less important for fighting today’s battles. As a result, radar has to be miniaturized to fit into a current fighters’ small nose cones, at an impractical cost

Corporal Braveheart and the battle for Afghanistan By now, the paras had a reasonable idea of how their enemy were organised. It seemed that they operated in sub-units of about 10 men. In the course of the fighting that summer the Taliban had evolved more sophisticated tactics, firing simultaneously from several angles and using a variety of weapons. Above all, they had developed very fast reaction times. Any patrol was “dicked” [observed] immediately. If the paras stayed still for more than 10 minutes they could expect to be ambushed. To counter the threat, patrols were now often more than 40 strong. BY now they were wondering how long this could last. The Taliban were becoming more tenacious, more daring and more skilful. It was essential to unbalance the enemy by coming up with new ap-proaches. Intelligence reports suggested that the Taliban were preparing to plant improvised explosive devices (IEDs) on the paras’ well-trodden routes into town. The need to find new ones was pressing. Budd made a decision that cost him his life, but saved those of his men. What was certain was that Bryan Budd had sacrificed his life for his men in an act of selfless heroism that thoroughly merited the Victoria Cross he was awarded four months later.

Posted by dblwyo at 03:48 PM | Permalink | Comments (0)