"Pundita, I just read Juggernaut2. You're overlooking the Darwinian angle. Somebody has to lose in the global competition for big-ticket contracts. If you give good training to people in the poorest countries, as America has been doing in the developing countries like China and India, the people from the poorest countries won't be poor anymore but it's because they'll take away jobs from Americans.
[Signed] Tom in Sioux City"
Dear Tom:
Your argument might have held water a century ago. But industry is no longer materials-based in advanced societies, it's knowledge based. The latter creates more jobs than Americans can ever hope to handle. However, there is a way to tilt the playing field against America and against all democracies that engage in global trade. The unfair advantage comes when democratic peoples compete with despotic governments. This is because the despot can order his subjects to learn whatever profession and work in whatever industry gives an edge in exports. Thus, China graduated something like 300,000 engineers last year.
Do you get executed in China if you don't take up the career the communist party bosses deem necessary for the greater good of the Chinese people? It's a question intelligent Chinese don't ask. There are unpleasant penalties, if you don't do well in friendly communist party classes designed to help you mend unsociable thinking.
The treatment of peoples as a cog in the machine of state is an old story in communist countries; it's an old story even in the Old Testament. It's the story of Pharaoh, who could encourage his subjects to work on a building project and enslave those who said they'd rather be doing something else.
That's how the playing field is tilted against the American worker. A democratic government can't walk into your house and tell you what career your children will undertake. Red China's leaders can map out an industry in which they want to compete, and sequester as many Chinese as they need to learn and fill the job slots needed for that industry.
That's what the West created by putting regimes such as the one in China on equal footing with democratic nations. That's what you uphold, every time you buy a product made in China. That's what American business upholds, every time they set up a branch in China. That's what the World Bank and other development banks uphold, every time they write a loan to China. They uphold the rule of Pharaoh.
That is the problem India and other developing democracies face. India, for all it's flaws in government, is a free country. The Indian government doesn't force its citizens to work in a particular industry or learn a particular school subject. That puts India and other developing democracies at a big trade disadvantage with Pharaoh governments.
That, too, you and I and everyone else in the developed world uphold, when we don't demand that Pharaoh deliver his people from bondage before we'll trade with him, admit him to the United Nations, and write development loans to him.
Pundita hastens to add that the World Bank and other development banks shouldn't be blamed for the situation. The development banks are government-sponsored lending institutions. As long as the member countries supporting the development banks put Pharaoh on an equal footing with democracies, the development banks will continue to write him loans.
Oddly enough, American corporations and patent attorneys get huffy because India cuts corners on patent laws in the struggle to be competitive in global markets. So India must play by the rules, but it's okay for American corporations to increase Pharaoh's wealth and global power.
A Pundita Prize to the first reader who can tell me the downside to the Pharaoh method of staying competitive in global trade. And I'll give you three guesses as to which countries and financial institutions have to bail out Pharaoh, every time his industry map doesn't keep up with leapfrogging advances in technology.
.
Sunday, March 13
Saturday, March 12
The Juggernaut, Part 2: Half a bridge is better than none
In Part 1 Pundita looked at the World Bank as part of the 'system' of development banks. I explained that the basic development bank model is actually designed to benefit the industries--represented on projects by contractors--that work on projects the development banks underwrite, execute, and oversee for governments. It is the system that must be examined when asking how the World Bank can better serve the poorest countries. Those who suggest dismantling the Bank don't understand the system, which is so successful at employing industries that if the Bank closed down, other development banks would arise to take up the shortfall.
Yet the proliferation of development banks set in motion a destructive cycle that is hard to break and keeps the LDC ('least developed country') governments hooked on development bank loans. In this essay I examine a spinoff cycle that doesn't get attention from the public because it's not part of the most glaring mistakes of past development bank projects. Yet this cycle is the most damaging in the long run because it tamps down human potential. And it is connected with entrenched social problems in both LDC and developed countries--problems that range from drug addiction to terrorism cells. West Europe has become a backwater for these problems. So to begin:
Many people outside the banking community don't realize that the World Bank is much more than a bank in the general understanding of the term. The Bank not only loans money for development projects, the Bank is also involved in every aspect of the project. The Bank has their own engineers who specialize in particular projects, their own procurement specialists and project financial analysts. This is on the theory that the poorer countries cannot fully provide the pool of expertise needed to properly execute the projects, even though the projects do make use of local talent.
So on paper World Bank projects have a valuable educational component. Bank project engineers, other Bank professionals and contractors from advanced countries work with the locals, who use that route to learn about modern technologies and methods. The catch is that the LDC governments can't afford to borrow the kind of money that uses state-of-the-art building methods, materials, and technologies.
I remember a Bank power engineer telling me that he couldn't leave the Bank to work in private industry because the advances in his field were so rapid that he no longer had the qualifications to be competitive. This was despite all the dams he'd helped build in developing counties. He explained that the dam projects he worked on for the Bank used technologies 20 years behind current ones.
But it's not only Bank engineers who can find themselves stuck behind the times. The LDC locals who work on the projects are not getting the information/technology transfer that helps them become competitive in the modern world. They are only competitive in trade with countries that are in the same boat.
Now one might argue that advanced societies don't owe technology transfer to the backward countries, and that any teaching element connected with development bank projects is gravy. True on both counts, if you keep the discussion narrowed to the actual projects. But if development and foreign aid pours trillions over decades into bringing the poorest countries out of abject poverty, and the countries stay in abject poverty, this signals a flaw in the approach. The Half a Bridge approach to development lending institutionalizes business and lending practices that provide poor-quality infrastructure. This sets up a destructive cycle. The practice:
1. Contributes to an inferior pool of local workers, so that LDC governments continue to hire contractors from advanced countries for projects that must be done right (e.g., Sahib Zone buildings, oil industry infrastructure).
2. This creates a brain drain: the brightest and most determined nationals flee their LDC to receive education abroad and work in advanced countries.
3. This shrinks the LDC's tax base, meaning that educational institutions remain inadequate for turning out skilled workers.
4. This further entrenches bad conditions for the LDC poorest, who flee to advanced countries and take the most menial jobs or go on the dole.
5. This creates an immigrant underclass in the developed countries.
6. The underclass supplies crime and terrorism syndicates with an inexhaustible supply of cheap, disposable labor.
Then people in developed countries ask, "Why are we overwhelmed with illegal drugs, child prostitution, gangs of thieves, and nut cases who think it's fashionable to blow themselves up?"
To understand the part that development banks play in these situations, walk the cat backward through the above cycle. Then keep walking back through the cycle outlined in Juggernaut Part 1. To review:
1. At some point governments have to pay for the loans they receive from development banks,
2. they can't pay without an adequate tax base and expanding economy,
3. hard to expand a 'commanding heights' (socialist) economy,
4. but if governments move away from socialist government, the contract pie shrinks for contractors--the ones who depend on getting business from governments that get loans from development banks,
5. when the contract pie shrinks, many contractors go belly up,
6. that shrinks the country's tax base,
7. return to "1" and repeat the cycle several times,
8. the government defaults on the loan payments,
9. the development banks stop writing loans,
10. more contractors go out of business,
11. the tax base shrinks even more,
12. the broke debtor governments stand outside the annual G7/8 meetings and rend their clothing and gnash their teeth,
13. the G7/8 put together some kind of debt relief (i.e., refinancing the loans and writing more loans),
14. Return to "1" and repeat the cycle.
Then Americans ask, "Why is it so hard for these poor countries to get away from socialist government, which is killing their countries?"
If you keep walking the cat backward, you can stop before reaching Bretton Woods. When the IBRD model was applied to advanced countries that had simply fallen backward, as happened in West Europe during WW2, it was a success. The trouble began with Robert S. McNamara's tenure as president of the World Bank.
McNamara did not understand how the IBRD gizmo worked. He believed the myth about the IBRD, which leaps over the critical factor of how the Bank really works. To review, when studying the Bank's failures, it's chasing red herring to think in terms of "development." The IBRD was not designed to "develop" a country. It was designed to keep businesses afloat by giving them contracts financed by loans to governments.
McNamara didn't understand this, which is not a slur on his intelligence. The World Bank is so complex in its workings that it takes Bank employees about two years to learn to navigate the basics of the Bank's way of doing things. (Reading books on how the Bank works only shaves a few months off the learning curve.) So when Americans are put in the president's chair they are at the mercy of the Bank's mandarins--senior management who have been working at the Bank for years. That's what happened to McNamara.
To cut a story, Robert McNamara assumed that the IBRD could apply their loan model to "developing" the world's poorest countries out of abject poverty--countries that had not fallen backward but had always been backward, by modern standards. However, what the IBRD gizmo does, when applied to the LDCs, is the same thing it does when applied anywhere: provide gainful employment for many skilled contractors from advanced countries. So to blame the Bank for failing to develop the LDCs is akin to blaming your electric blender because it doesn't toast bread. The Bank wasn't set up to do what McNamara wanted done.
But it compounds the error of misapplying the IBRD model, if the Bank underwrites projects that operate according to the theory that half a loaf is better than none. What use is it to build a bridge with outmoded materials, structural design, and inefficient building methods--a bridge that when completed is insufficient to handle the vehicular traffic?
Pundita will tell the use: the need for major repairs within a year of the bridge's opening requires the development bank to write yet another loan to the government. That loan will be serviced by contractors using technologies 20 years behind the times. That will create the need for another loan....
Again, all this works splendidly to keep many contractors gainfully employed. But if the goal is to help the LDCs pull themselves up, this is not the way to go about it. The highest cost of the Half a Bridge theory is that it wastes human intelligence. It condemns minds to learning things that are obsolete in the modern world.
The reader might ask whether this Half a Bridge style of business also holds back the contractors from the developed countries--the ones who specialize in servicing highly technical projects for development loans. I doubt there's ever been a study done on the question. But I imagine if an engineering firm can coast on projects that don't require the employees to be at the cutting edge and don't require R&D--that would leave the firm dependent on doing work that is obsolete in the advanced countries.
For a very brief and cutting overview of Robert McNamara's contributions to the World Bank, see:
http://www.techcentralstation.com/072904E.html
.
Yet the proliferation of development banks set in motion a destructive cycle that is hard to break and keeps the LDC ('least developed country') governments hooked on development bank loans. In this essay I examine a spinoff cycle that doesn't get attention from the public because it's not part of the most glaring mistakes of past development bank projects. Yet this cycle is the most damaging in the long run because it tamps down human potential. And it is connected with entrenched social problems in both LDC and developed countries--problems that range from drug addiction to terrorism cells. West Europe has become a backwater for these problems. So to begin:
Many people outside the banking community don't realize that the World Bank is much more than a bank in the general understanding of the term. The Bank not only loans money for development projects, the Bank is also involved in every aspect of the project. The Bank has their own engineers who specialize in particular projects, their own procurement specialists and project financial analysts. This is on the theory that the poorer countries cannot fully provide the pool of expertise needed to properly execute the projects, even though the projects do make use of local talent.
So on paper World Bank projects have a valuable educational component. Bank project engineers, other Bank professionals and contractors from advanced countries work with the locals, who use that route to learn about modern technologies and methods. The catch is that the LDC governments can't afford to borrow the kind of money that uses state-of-the-art building methods, materials, and technologies.
I remember a Bank power engineer telling me that he couldn't leave the Bank to work in private industry because the advances in his field were so rapid that he no longer had the qualifications to be competitive. This was despite all the dams he'd helped build in developing counties. He explained that the dam projects he worked on for the Bank used technologies 20 years behind current ones.
But it's not only Bank engineers who can find themselves stuck behind the times. The LDC locals who work on the projects are not getting the information/technology transfer that helps them become competitive in the modern world. They are only competitive in trade with countries that are in the same boat.
Now one might argue that advanced societies don't owe technology transfer to the backward countries, and that any teaching element connected with development bank projects is gravy. True on both counts, if you keep the discussion narrowed to the actual projects. But if development and foreign aid pours trillions over decades into bringing the poorest countries out of abject poverty, and the countries stay in abject poverty, this signals a flaw in the approach. The Half a Bridge approach to development lending institutionalizes business and lending practices that provide poor-quality infrastructure. This sets up a destructive cycle. The practice:
1. Contributes to an inferior pool of local workers, so that LDC governments continue to hire contractors from advanced countries for projects that must be done right (e.g., Sahib Zone buildings, oil industry infrastructure).
2. This creates a brain drain: the brightest and most determined nationals flee their LDC to receive education abroad and work in advanced countries.
3. This shrinks the LDC's tax base, meaning that educational institutions remain inadequate for turning out skilled workers.
4. This further entrenches bad conditions for the LDC poorest, who flee to advanced countries and take the most menial jobs or go on the dole.
5. This creates an immigrant underclass in the developed countries.
6. The underclass supplies crime and terrorism syndicates with an inexhaustible supply of cheap, disposable labor.
Then people in developed countries ask, "Why are we overwhelmed with illegal drugs, child prostitution, gangs of thieves, and nut cases who think it's fashionable to blow themselves up?"
To understand the part that development banks play in these situations, walk the cat backward through the above cycle. Then keep walking back through the cycle outlined in Juggernaut Part 1. To review:
1. At some point governments have to pay for the loans they receive from development banks,
2. they can't pay without an adequate tax base and expanding economy,
3. hard to expand a 'commanding heights' (socialist) economy,
4. but if governments move away from socialist government, the contract pie shrinks for contractors--the ones who depend on getting business from governments that get loans from development banks,
5. when the contract pie shrinks, many contractors go belly up,
6. that shrinks the country's tax base,
7. return to "1" and repeat the cycle several times,
8. the government defaults on the loan payments,
9. the development banks stop writing loans,
10. more contractors go out of business,
11. the tax base shrinks even more,
12. the broke debtor governments stand outside the annual G7/8 meetings and rend their clothing and gnash their teeth,
13. the G7/8 put together some kind of debt relief (i.e., refinancing the loans and writing more loans),
14. Return to "1" and repeat the cycle.
Then Americans ask, "Why is it so hard for these poor countries to get away from socialist government, which is killing their countries?"
If you keep walking the cat backward, you can stop before reaching Bretton Woods. When the IBRD model was applied to advanced countries that had simply fallen backward, as happened in West Europe during WW2, it was a success. The trouble began with Robert S. McNamara's tenure as president of the World Bank.
McNamara did not understand how the IBRD gizmo worked. He believed the myth about the IBRD, which leaps over the critical factor of how the Bank really works. To review, when studying the Bank's failures, it's chasing red herring to think in terms of "development." The IBRD was not designed to "develop" a country. It was designed to keep businesses afloat by giving them contracts financed by loans to governments.
McNamara didn't understand this, which is not a slur on his intelligence. The World Bank is so complex in its workings that it takes Bank employees about two years to learn to navigate the basics of the Bank's way of doing things. (Reading books on how the Bank works only shaves a few months off the learning curve.) So when Americans are put in the president's chair they are at the mercy of the Bank's mandarins--senior management who have been working at the Bank for years. That's what happened to McNamara.
To cut a story, Robert McNamara assumed that the IBRD could apply their loan model to "developing" the world's poorest countries out of abject poverty--countries that had not fallen backward but had always been backward, by modern standards. However, what the IBRD gizmo does, when applied to the LDCs, is the same thing it does when applied anywhere: provide gainful employment for many skilled contractors from advanced countries. So to blame the Bank for failing to develop the LDCs is akin to blaming your electric blender because it doesn't toast bread. The Bank wasn't set up to do what McNamara wanted done.
But it compounds the error of misapplying the IBRD model, if the Bank underwrites projects that operate according to the theory that half a loaf is better than none. What use is it to build a bridge with outmoded materials, structural design, and inefficient building methods--a bridge that when completed is insufficient to handle the vehicular traffic?
Pundita will tell the use: the need for major repairs within a year of the bridge's opening requires the development bank to write yet another loan to the government. That loan will be serviced by contractors using technologies 20 years behind the times. That will create the need for another loan....
Again, all this works splendidly to keep many contractors gainfully employed. But if the goal is to help the LDCs pull themselves up, this is not the way to go about it. The highest cost of the Half a Bridge theory is that it wastes human intelligence. It condemns minds to learning things that are obsolete in the modern world.
The reader might ask whether this Half a Bridge style of business also holds back the contractors from the developed countries--the ones who specialize in servicing highly technical projects for development loans. I doubt there's ever been a study done on the question. But I imagine if an engineering firm can coast on projects that don't require the employees to be at the cutting edge and don't require R&D--that would leave the firm dependent on doing work that is obsolete in the advanced countries.
For a very brief and cutting overview of Robert McNamara's contributions to the World Bank, see:
http://www.techcentralstation.com/072904E.html
.
Keeping Up Appearances
"I am writing in response to your Friday post. You seem to view the European Community as completely unprincipled and on the side of America's enemies. This view is wrong and very disturbing, and I hope it's not shared by many Americans.
[Signed] Henry in Leeds"
Dear Henry:
I stated that the EU is founded on the principle of trade; that to be true to the principle Brussels can be counted on to side with their (important) trading partners, even if this pits them against America. And, I should add, even if this pits them against the foreign policy of certain EU governments. Brussels, as the seat of EU government, is currently dominated by the views of the chief founders of the EU, which are Germany and France. That situation might change over the years but that's the way things are now. And the EU is in the process of adopting a single foreign policy.
Pundita fails to see what's wrong or disturbing about the above statements. What's disturbing is that Washington doesn't recognize the fact of the European Union's growing power and cohesiveness. They don't recognize that during the past decade, Brussels has been moving toward placing the United Nations alliance above the NATO alliance. Many in Washington have not confronted that Brussels isn't only talking about giving the UN more power. Brussels is implying that the UN, not NATO, is the premier alliance for the European Union.
If that's Brussels' choice, that's their prerogative, but that calls for a revision of the US view of NATO. At the least it calls for Brussels to clarify their position at the official level. But we can't call for that clarification until Washington confronts where we are now. Until there is clarity, the US Department of State will continue to adhere to the clearest position, which is to treat the NATO alliance as if it's frozen in time, even though the position is irrational.
All right, that's enough chat about the price of tea in Outer Mongolia and the best weather to plant corn. Tehran is blackmailing Brussels. That's why the US shouldn't go along with the so-called negotiations.
If you had told Brussels in August 2001 that by 2003 the US would be camped in Baghdad, they would have laughed 'til they cried. But once they saw it might come true then it was, "Uh oh. Saddam keeps really accurate records of his weapons purchases. We need to head off the US at Turtle Bay Pass!"
Now the same crew is trying to head us off over Tehran. The French, German and British governments need to stop playing the role of Hyacinth. We're going to find out sooner or later which companies the Tehran regime contracted with to build their nuke weapons facilities.
.
[Signed] Henry in Leeds"
Dear Henry:
I stated that the EU is founded on the principle of trade; that to be true to the principle Brussels can be counted on to side with their (important) trading partners, even if this pits them against America. And, I should add, even if this pits them against the foreign policy of certain EU governments. Brussels, as the seat of EU government, is currently dominated by the views of the chief founders of the EU, which are Germany and France. That situation might change over the years but that's the way things are now. And the EU is in the process of adopting a single foreign policy.
Pundita fails to see what's wrong or disturbing about the above statements. What's disturbing is that Washington doesn't recognize the fact of the European Union's growing power and cohesiveness. They don't recognize that during the past decade, Brussels has been moving toward placing the United Nations alliance above the NATO alliance. Many in Washington have not confronted that Brussels isn't only talking about giving the UN more power. Brussels is implying that the UN, not NATO, is the premier alliance for the European Union.
If that's Brussels' choice, that's their prerogative, but that calls for a revision of the US view of NATO. At the least it calls for Brussels to clarify their position at the official level. But we can't call for that clarification until Washington confronts where we are now. Until there is clarity, the US Department of State will continue to adhere to the clearest position, which is to treat the NATO alliance as if it's frozen in time, even though the position is irrational.
All right, that's enough chat about the price of tea in Outer Mongolia and the best weather to plant corn. Tehran is blackmailing Brussels. That's why the US shouldn't go along with the so-called negotiations.
If you had told Brussels in August 2001 that by 2003 the US would be camped in Baghdad, they would have laughed 'til they cried. But once they saw it might come true then it was, "Uh oh. Saddam keeps really accurate records of his weapons purchases. We need to head off the US at Turtle Bay Pass!"
Now the same crew is trying to head us off over Tehran. The French, German and British governments need to stop playing the role of Hyacinth. We're going to find out sooner or later which companies the Tehran regime contracted with to build their nuke weapons facilities.
.
Friday, March 11
Pundita plays Alice to Condoleezza Rice's Red Queen
"The Europeans have a strategy which is to show the Iranians that if they are prepared to live up to their international obligations there is an alternative path to confrontation and there is a path to a better future. We are supporting that diplomacy but this is most assuredly giving the Europeans a stronger hand, not rewarding the Iranians." --US Secretary of State Condoleezza RiceBut the Europeans are rewarding Iran by offering them concessions. Wait, let's speak with more precision--granted, the enemy of diplomacy, but in the interests of defending the logic of the English language and indeed the logic of all language, let's name something for what it is: the Europeans are rewarding Iran by offering them bribes.
So if the United States supports the European offer of bribes....isn't that rewarding the Iranians? Asks Alice of the Red Queen.
Can we wring logic from Rice's first major executive decision as secretary of state? Within the concept of a chess game, yes. Brussels looks at John Bolton in the way they look at Genghis Khan. So the exchange of chess pieces is that the US sacrifices support of democratic principles in exchange for muted resistance from Brussels to the Bush nomination of Bolton as the US ambassador to the UN.
If you tell me that's not logical, given that sending Bolton to the UN is meant to bolster Bush's democracy doctrine--it's Red Queen logic. You get to make your own laws of logic when you're the world's most powerful nation. However, it occurred to Bush that there's something screwy about sacrificing two knights, a bishop and rook in exchange for a pawn. Thus, the White House directed everyone to notice that today's announcement came from the State Department, not the White House.
In this way, the White House hopes to divert attention from the fact that State's announcement studiously omitted the Bush administration's red-line position on Iran. Up until today, the White House demanded the complete and permanent end to Iran's nuclear fuel cycle activities. The demand was not specified in the State Department's official announcement today.
Thus, Iran and Brussels won a huge tactical victory. The bone to Washington is a leaked EU classified document that says the EU will back US calls to refer Iran to the UN Security Council if Iran does not scrap programs linked to nuclear arms. But this position is not official--again, it's stated in a leaked internal document. And neither the document nor any statement by Brussels puts a time limit on when Brussels will decide that Iran has refused to scrap their nuclear weapons program--a program that Iran refuses to acknowledge.
Is there any other logic to Rice's decision to capitulate to Brussels? Logic no, hope yes. The hope is that by backing the EU approach to negotiations with Tehran, this will tamp down calls building in Germany to leave the NATO alliance.
Thus, the true face of the US Department of State is clearly revealed. The State Department is NATO spelled backward. So there's no mystery to Secretary Rice's approach to Brussels--or Moscow, for that matter. It is a Cold War approach, which is at the heart of NATO.
For all the talk of Rice being a new direction for State, she is simply a different label on the same system. On paper, there are good reasons for the US continuing the NATO alliance. The reasons ignore the actual situation, which is that the most powerful European members are not allied with the US. In 2002, Germany and France clearly demonstrated that they were allied with Saddam Hussein's regime. Along with the United Kingdom, they now show that they're allied with the regime in Iran.
The catch is that one can't be allied with the Tehran regime and the US. Indeed, one can't be allied with both the European Union and the United States--a fact that Tony Blair had to acknowledge by backing the Franco-German approach to Tehran's clandestine nuclear weapons program.
Let's be clear about what the European Union is. It's the third-largest governing institution in the world. It's the world's largest economy, even though its land mass is half the size of the continental United States. The EU is also the world's leading exporter and largest internal trading market.
In short, the EU a trading bloc which is now in the process of ratifying a constitution that will bring all its members under one military and one foreign policy run from Brussels. It's a union of countries founded on trade principles.
The union represented by the United States is founded on democratic principles. So there is an inherent conflict between the two unions. The Brussels approach to Tehran's nuclear weapons program is a perfect example of the conflict. When push comes to shove, Brussels will side with whatever position supports their trade.
That's consistent with the European Union's founding principles. But if the United States allies itself with those principles, we sacrifice our founding principles. To avoid confronting this reality Washington clings to NATO, which is founded on more transcendent ideals than the EU. And thus, Secretary Rice's attack on logic today. That the attack came on the anniversary of the Madrid train bombings is not a good day for those who took Bush's Inaugural promises seriously.
.
3/11
In memory, in condolence, to the people of Spain. Americans have not forgotten your outpouring of sympathy on America's darkest day. Faith and courage will carry us through these troubled times.
.
.
Creatures from the Theoretical Bubble Lagoon
"Pundita! Where is the Juggernaut 2 essay you promised us? You're not going to go wandering off talking about Russia again, are you?"
[Signed] Not Born Yesterday in New York
Dear NBY:
Yes yes Pundita hasn't forgotten. It's just that we've been plunged into a dark mood, which ruffles the calm mien required to discuss the World Bank. We don't approve of burdening the reader with our personal problems but so far this week a dear colleague attempted suicide, there was a storm in the Atlantic Ocean, and Pundita learned that the Council on Foreign Relations managed to steal the Theoretical Bubble machine from the Pentagon and get the contraption working again.
The colleague was coaxed from a window ledge on his office building, which is not situated in this country. He held out for five hours, all the while screaming at police and bystanders that the Washington Post is in the pay of Russian oligarchs. His wife told me by satphone that with time and beadwork he'll recover but right now he's under heavy sedation.
The Theoretical Bubble Machine has always had a bug. Once it's switched on, it keeps making bubbles. These drift on the air currents to Geneva, where over time the bubbles formed a lagoon. Every once in a while the creatures who live in the lagoon mass for an attack on Washington, which they are doing as I write these very words. An ominous sign is this New York Times headline:
Is it all that wrong to want to make concessions to NATO allies? Up to a point, no. But as Shaheen Fatemi pointed out on John Batchelor's show and in his response to Takeyh's piece, there's plenty wrong with assigning legitimacy to the Tehran regime:
When the weather gets dangerously cold in Washington this means the squirrels have trouble scrounging croissant crumbs and French fries. The seagulls have every fast food outlet and Starbucks in Washington mapped out. Then can spot a croissant crumb from two miles up and if a squirrel is there first, well, the squirrel is toast.
All this falls back hard on Pundita. We once made the mistake of explaining to the squirrel member of the team what is meant by the term, "World Bank consultant." Since then, every time there's a winter storm Pundita has to run policy meetings with scores of consultants scampering across the conference table.
Why don't they simply dig up the nuts they spent the Fall burying instead of asking to get beat up by seagulls? Pundita has a theory. The Winter and Spring finds the squirrel accusing Pundita and the other team members of stealing his hoard. One day it hit me: he can't remember where he buried most of the nuts. Perhaps the effect of junk food and pastry on the squirrel brain.
.
[Signed] Not Born Yesterday in New York
Dear NBY:
Yes yes Pundita hasn't forgotten. It's just that we've been plunged into a dark mood, which ruffles the calm mien required to discuss the World Bank. We don't approve of burdening the reader with our personal problems but so far this week a dear colleague attempted suicide, there was a storm in the Atlantic Ocean, and Pundita learned that the Council on Foreign Relations managed to steal the Theoretical Bubble machine from the Pentagon and get the contraption working again.
The colleague was coaxed from a window ledge on his office building, which is not situated in this country. He held out for five hours, all the while screaming at police and bystanders that the Washington Post is in the pay of Russian oligarchs. His wife told me by satphone that with time and beadwork he'll recover but right now he's under heavy sedation.
The Theoretical Bubble Machine has always had a bug. Once it's switched on, it keeps making bubbles. These drift on the air currents to Geneva, where over time the bubbles formed a lagoon. Every once in a while the creatures who live in the lagoon mass for an attack on Washington, which they are doing as I write these very words. An ominous sign is this New York Times headline:
Data is Lacking on Iran's Arms, U.S. Panel Says WASHINGTON, March 8 - A commission due to report to President Bush this month will describe American intelligence on Iran as inadequate to allow firm judgments about Iran's weapons programs, according to people who have been briefed on the panel's work....Now study this paragraph from an article published in the International Herald Tribune of March 8, 2005. Ray Takeyh, a Senior Fellow at the Council on Foreign Relations recommends that:
The United States should officially participate in the EU-Iran discussions and put on the table its economic sanctions, acknowledgment of Iran's territorial integrity and recognition of its existing regime.Taken together, what do these March 8 stories mean? They mean that the US contingent in NATO is sucking up to the Euro contingent in a bid to hold the alliance together.
Is it all that wrong to want to make concessions to NATO allies? Up to a point, no. But as Shaheen Fatemi pointed out on John Batchelor's show and in his response to Takeyh's piece, there's plenty wrong with assigning legitimacy to the Tehran regime:
Appeasement of the regime in Tehran will not stop them from pursuing their weapons policy, nor will it diminish their support of terrorism. But it will keep them in power longer and will allow them to prolong their oppression of the Iranian people.Now what does this have to do with a storm in the Atlantic and Pundita's bad mood? Well, every time the Creatures slosh their way toward Washington, this sets up a disturbance in the Atlantic Ocean. This causes a storm, which drives the seagulls into downtown Washington, DC. The situation is not so bad in the warm months but when the storm rises in the winter, as it did earlier this week, this creates what passes for dangerously cold and windy weather in the Greater Washington, DC region. It wouldn't be dangerous weather in say, Chicago or Albany, but this region is the only place in the galaxy where local meteorologists refer to 3 inches of snow as "The White Death."
When the weather gets dangerously cold in Washington this means the squirrels have trouble scrounging croissant crumbs and French fries. The seagulls have every fast food outlet and Starbucks in Washington mapped out. Then can spot a croissant crumb from two miles up and if a squirrel is there first, well, the squirrel is toast.
All this falls back hard on Pundita. We once made the mistake of explaining to the squirrel member of the team what is meant by the term, "World Bank consultant." Since then, every time there's a winter storm Pundita has to run policy meetings with scores of consultants scampering across the conference table.
Why don't they simply dig up the nuts they spent the Fall burying instead of asking to get beat up by seagulls? Pundita has a theory. The Winter and Spring finds the squirrel accusing Pundita and the other team members of stealing his hoard. One day it hit me: he can't remember where he buried most of the nuts. Perhaps the effect of junk food and pastry on the squirrel brain.
.
Thursday, March 10
We're so glad you enjoyed the G8 luncheon, India and China! With wine and tip that comes to 5 billion dollars.
Pundita received a number of emails in response to the Juggernaut essay. Some readers wanted to know if I made up the story about the origin of the IBRD. Other readers asked whether I had read the Time magazine cover story on Jeffrey Sachs's book (The End of Poverty) and whether I agreed with his proposals for ending the worst poverty in the world by 2025.
Pundita learned about the Sachs book from the Guardian Unlimited, which is the only newspaper to read if you want to know what the Democrat Party and the left wing of the Supreme Court are up to these days.
We have yet to read the Sachs book but from the Guardian column about the book it's clear that the Creatures from the Theoretical Bubble Lagoon are massing for another attack on Washington. After all, this is the run-up to the IMF Spring meeting, the White House decision on the next World Bank president, and the upcoming G7/8 meeting. Pundita warned her readers months ago that this is the Trifecta. If you think the Sachs book wields a sledgehammer, you ain't seen nothin yet.
President Bush is partly to blame. He agreed in 2002 to give 0.7% of the US national income to foreign development goals. Why he should agree without first demanding an independent audit of every development bank to which the US belongs is beyond a reasonable mind. But Jeffrey Sachs is an economist so he doesn't need to be reasonable. Thus, according to the Guardian, he argues that there is little evidence that corruption has been the main obstacle to development in Africa.
Well of course there's little evidence. How can there be evidence without an audit? In any case, development banks are not set up to serve the poorest. They are set up to serve the trickle-down theory. The development banks are designed to keep contractors and subcontractors gainfully employed. The idea is that if enough businesses can stay afloat, the country will stay afloat and stay away from war.
So Pundita fails to see why Sachs assumes the IMF and the World Bank can be reformed and remade to help in the task of saving the world's poorest on the theory those organizations have accumulated useful expertise and experience. If your phone company has been trying for 40 years to get your service back on, the experience and expertise they've accumulated during those decades of trying is neither here nor there--if you want phone service. If the Bank and the IMF haven't gotten it right by now, clearly their expertise and experience have limited value for the task Sachs envisions.
Of course both organizations have tremendous expertise and experience, both of which are valuable at certain stages of a country's development. But Jeffrey Sachs is the wrong person to advise on such matters. Even the Guardian, which predictably supports any idea meant to squeeze more aid money out of the United States, can't avoid a glaring contradiction in their praise of Sachs.
That was essentially Iraq's problem under Saddam Hussein, as Pundita has noted before. Behind the stage paint of the Europeanized Baathist fascist government stood a tribalized clan society.
That was also the situation in the Soviet Union. The shock therapy that Professor Sachs and his cronies shoved through in Russia created the oligarchs, who proceeded to vampire their country's wealth and retain inordinate power through clan affiliations.
Once the stage paint was scrubbed from the Europeanized fascist model of government, it turned out that Russia and the rest of the FSU countries had been running according to ancient clan laws. The structures of modern government simply weren't there--a situation which Sachs and his bubble-headed school of economics completely ignored.
So. Now Professor Sachs brings his intellect to bear on the plight of the world's poorest countries. Pundita will read his list of recommendations and report back to her readers. Point by point.
In the meantime, we impatiently await India's first luncheon at the G7/8 meeting. Yes, India has finally received an invitation to the lunch. If memory serves, this will be China's second lunch.
Pundita can't wait for the Chinese and Indian delegations to arrive. It's going to be music to hear the anti-Globalist protesters yelling, "Stop robbing the poor!" at the Chinese and Indians sneaking in the back entrance to the luncheon.
.
Pundita learned about the Sachs book from the Guardian Unlimited, which is the only newspaper to read if you want to know what the Democrat Party and the left wing of the Supreme Court are up to these days.
We have yet to read the Sachs book but from the Guardian column about the book it's clear that the Creatures from the Theoretical Bubble Lagoon are massing for another attack on Washington. After all, this is the run-up to the IMF Spring meeting, the White House decision on the next World Bank president, and the upcoming G7/8 meeting. Pundita warned her readers months ago that this is the Trifecta. If you think the Sachs book wields a sledgehammer, you ain't seen nothin yet.
President Bush is partly to blame. He agreed in 2002 to give 0.7% of the US national income to foreign development goals. Why he should agree without first demanding an independent audit of every development bank to which the US belongs is beyond a reasonable mind. But Jeffrey Sachs is an economist so he doesn't need to be reasonable. Thus, according to the Guardian, he argues that there is little evidence that corruption has been the main obstacle to development in Africa.
Well of course there's little evidence. How can there be evidence without an audit? In any case, development banks are not set up to serve the poorest. They are set up to serve the trickle-down theory. The development banks are designed to keep contractors and subcontractors gainfully employed. The idea is that if enough businesses can stay afloat, the country will stay afloat and stay away from war.
So Pundita fails to see why Sachs assumes the IMF and the World Bank can be reformed and remade to help in the task of saving the world's poorest on the theory those organizations have accumulated useful expertise and experience. If your phone company has been trying for 40 years to get your service back on, the experience and expertise they've accumulated during those decades of trying is neither here nor there--if you want phone service. If the Bank and the IMF haven't gotten it right by now, clearly their expertise and experience have limited value for the task Sachs envisions.
Of course both organizations have tremendous expertise and experience, both of which are valuable at certain stages of a country's development. But Jeffrey Sachs is the wrong person to advise on such matters. Even the Guardian, which predictably supports any idea meant to squeeze more aid money out of the United States, can't avoid a glaring contradiction in their praise of Sachs.
Prof Sachs rose to prominence 15 years ago as the chief designer of "shock therapy" for the post-communist economies of Poland and Russia, emphasising an immediate transition to free markets and drastic cuts in state spending. In his new book he argues that the market-oriented prescriptions of the IMF have been part of the problem, by cutting away at the fabric of poor societiesThe theory pushed by Sachs was as much a part of the problem as the IMF, a point which the Wikipedia encyclopedia alludes to in a chapter on shock therapy theory. The author points out the downside of the theory:
A developed Western economy rests upon and tends to take for granted a framework of law, regulation and established practice (including between parts of the domestic and international economy) that cannot be instantaneously created in a society that was formerly authoritarian, heavily centralised and subject to state ownership of assets. Even re-defining property law and rights takes time.That's some downside. But establishing the framework is a thousand times harder in a country where the rule of law was only superficially applied by a colonial rule. That's what African countries faced, while they served for decades as experimental labs for IMF theories.
That was essentially Iraq's problem under Saddam Hussein, as Pundita has noted before. Behind the stage paint of the Europeanized Baathist fascist government stood a tribalized clan society.
That was also the situation in the Soviet Union. The shock therapy that Professor Sachs and his cronies shoved through in Russia created the oligarchs, who proceeded to vampire their country's wealth and retain inordinate power through clan affiliations.
Once the stage paint was scrubbed from the Europeanized fascist model of government, it turned out that Russia and the rest of the FSU countries had been running according to ancient clan laws. The structures of modern government simply weren't there--a situation which Sachs and his bubble-headed school of economics completely ignored.
So. Now Professor Sachs brings his intellect to bear on the plight of the world's poorest countries. Pundita will read his list of recommendations and report back to her readers. Point by point.
In the meantime, we impatiently await India's first luncheon at the G7/8 meeting. Yes, India has finally received an invitation to the lunch. If memory serves, this will be China's second lunch.
Pundita can't wait for the Chinese and Indian delegations to arrive. It's going to be music to hear the anti-Globalist protesters yelling, "Stop robbing the poor!" at the Chinese and Indians sneaking in the back entrance to the luncheon.
.
Tuesday, March 8
The Juggernaut
"I knew you would go through the roof over Snow's mention of Bono but I bet Snow dropped the name as a nod to Europe. My money's on Paul Wolfowitz for next World Bank president. [Signed] Chicago Dan"
Dear Chicago Dan:
9/11 was all our tomorrows--all the problems we put off 'til tomorrow while fighting two world wars and the Cold War. Once you see the connection between the development bank business model and 9/11, I guarantee your first reaction will be, "Shut down the World Bank." But the World Bank is but one of many development banks. You can no more shut down the business model created at Bretton-Woods than you can return to before the atom was split.
We cannot and must not prepare ourselves to live with more 9/11s, but we can't deal with the most intractable problems in the developing world unless we grapple with the downsides of the development bank. The candidates now under consideration for Bank president show that Washington has not even confronted what the World Bank was set up to do. So we need to return to Ground Zero, the real Ground Zero, and build up understanding from there:
After the American command saw the first US casualty figures for the Normandy invasion, they looked at each other and said in effect, "The Three Strikes rule must not apply."
Less than two months later, the International Bank for Reconstruction and Development (IBRD) was signed into existence.
American commanders saw that the survival of civilization depended on assuming that if left to their own devices the Europeans would be at each other's throats again, as soon as they climbed out of the ruins of World War 2 and probably even before. Given the state of modern weaponry that meant another world war. That was untenable.
The question was how to ensure that the Europeans were not left to their own devices. There was talk of the US annexing Europe. There was consideration of the basic idea behind Hitler's Third Reich--the third Holy Roman Empire. The last time Europeans had more or less gotten along was under the Roman Empire.
I don't know who came up with the idea or how long before Normandy the idea might have been kicking around. But at some point people said, "Wait a minute. What are we really talking about, when we say Roman Empire?"
What comes first to your mind's eye when you visualize the Roman Empire? No, not troops. You see the Coliseum, roads, aqueducts, vast plazas of marble government buildings.
The Holy Roman Empire was Nirvana for building contractors. It was construction projects and materials procurement, not troops, which caused so many diverse peoples to put up with the Romans. Rome's mania for building was the gift that kept on giving to every outpost in the empire.
As soon as chieftains living in mud huts figured out that you didn't need to make raids on a neighboring tribe to get rich, humanity took a leap forward. Chieftains turned themselves into procurement specialists, building project managers, and entire industries to serve Roman building sprees.
The endurance of the Rome Empire rested on a business model that allowed peoples to sublimate war into competition for building contracts. That is the basic idea behind the IBRD.
So, contrary to myth, the IBRD, which along with spinoffs is now known as the World Bank Group, was not designed to reconstruct postwar Europe. It was not designed to develop Europe. The IBRD was designed to produce a business model that allowed European industries to compete for government building projects financed by low-cost loans.
If the Europeans wanted to go on bashing each other after two world wars, they could do it by competing for business contracts issued by governments--contracts paid for with money borrowed from a bank that loaned exclusively to governments.
Someday, a building materials procurement specialist will write a history of the world. Then many mysteries of history will be revealed. And it will be clear that one of the brightest ideas human brains ever hatched was signed into agreement at Bretton Woods. The development bank model of business is the biggest single factor in the relative peace the world has enjoyed during the past half century.
What's the catch? Many years ago, while first learning about the World Bank, I put that question to a Bank economist. I asked if the World Bank ran the world.
He replied, "No. The IMF runs the world. The World Bank fixes the world."
I observed that the Bank was like no bank I'd ever banked at, so he could he tell me in one sentence what the World Bank actually was?
He replied, "The Bank is a juggernaut."
After chewing that over I replied in the manner of Alice, "But a juggernaut is an engine of destruction. Doesn't your definition of the Bank conflict with the Bank's mission to fix the world?"
"Not at all," replied my guide to Wonderland. "The World Bank is irrefutable proof that you can't fix anything in this world without breaking something, somewhere down the line."
What the Bank can't fix about itself is the very success of its business model, which spawned numerous imitations. You've heard of nuclear proliferation. There is also development-bank proliferation. There is now a version of the World Bank in every world region you can conceive, including the "Islamic Region."
The proliferation set trouble in motion. As long as the IBRD model was serving a relatively small group of competing contractors--the Europeans and Americans--there was enough contract pie to go around. But once everybody and his uncle jumped in, that was a different game. Everybody's clamoring for contracts, which means writing more and more development loans. But there are only so many national governments on earth. Those governments can only contract to put up so many bridges, dams and buildings.
To see where this has led, an episode of the Amazing Race found the teams in a Gulf Arab state. One contestant blurted, "Look at this place! There's a mosque on every corner!"
Ah, but you mustn't think "mosque" when seeing a mosque, if you want to understand development banks. Think cement contract, steel girder contract, electrical contract, copper tube contract, plumbing contract, painting contract....
In short, there is now cutthroat competition among peoples all over the world to get government contracts funded by development bank loans. That means the contract pie is fast reducing to the size of a poptart.
When development banks proliferated, this set in motion a destructive cycle:
1. At some point governments have to pay installments on the development loans,
2. they can't pay without an adequate tax base and expanding economy,
3. hard to expand a 'commanding heights' (socialist) economy,
4. but if governments move away from socialist government, the contract pie shrinks for contractors--the ones who depend on getting business from governments that get loans from development banks,
5. when the contract pie shrinks, many contractors go belly up,
6. that shrinks the country's tax base,
7. return to "1" and repeat the cycle several times,
8. the government defaults on the loan payments,
9. the development banks stop writing loans,
10. more contractors go out of business,
11. the tax base shrinks even more,
12. the broke debtor governments stand outside the annual G7/8 meetings and rend their clothing and gnash their teeth,
13. the G7/8 put together some kind of debt relief (i.e., refinancing the loans and writing more loans),
14. Return to "1" and repeat the cycle.
Then Americans ask, "Why is it so hard for these poor countries to get away from socialist government, which is killing them?
There is also an insidious aspect to the development bank model as applied to LDCs (least developed countries). It keeps the LDCs always moving backward in relation to the developed countries, which sets up another destructive cycle. Pundita will discuss that cycle in Juggernaut, Part 2.
.
Dear Chicago Dan:
9/11 was all our tomorrows--all the problems we put off 'til tomorrow while fighting two world wars and the Cold War. Once you see the connection between the development bank business model and 9/11, I guarantee your first reaction will be, "Shut down the World Bank." But the World Bank is but one of many development banks. You can no more shut down the business model created at Bretton-Woods than you can return to before the atom was split.
We cannot and must not prepare ourselves to live with more 9/11s, but we can't deal with the most intractable problems in the developing world unless we grapple with the downsides of the development bank. The candidates now under consideration for Bank president show that Washington has not even confronted what the World Bank was set up to do. So we need to return to Ground Zero, the real Ground Zero, and build up understanding from there:
After the American command saw the first US casualty figures for the Normandy invasion, they looked at each other and said in effect, "The Three Strikes rule must not apply."
Less than two months later, the International Bank for Reconstruction and Development (IBRD) was signed into existence.
American commanders saw that the survival of civilization depended on assuming that if left to their own devices the Europeans would be at each other's throats again, as soon as they climbed out of the ruins of World War 2 and probably even before. Given the state of modern weaponry that meant another world war. That was untenable.
The question was how to ensure that the Europeans were not left to their own devices. There was talk of the US annexing Europe. There was consideration of the basic idea behind Hitler's Third Reich--the third Holy Roman Empire. The last time Europeans had more or less gotten along was under the Roman Empire.
I don't know who came up with the idea or how long before Normandy the idea might have been kicking around. But at some point people said, "Wait a minute. What are we really talking about, when we say Roman Empire?"
What comes first to your mind's eye when you visualize the Roman Empire? No, not troops. You see the Coliseum, roads, aqueducts, vast plazas of marble government buildings.
The Holy Roman Empire was Nirvana for building contractors. It was construction projects and materials procurement, not troops, which caused so many diverse peoples to put up with the Romans. Rome's mania for building was the gift that kept on giving to every outpost in the empire.
As soon as chieftains living in mud huts figured out that you didn't need to make raids on a neighboring tribe to get rich, humanity took a leap forward. Chieftains turned themselves into procurement specialists, building project managers, and entire industries to serve Roman building sprees.
The endurance of the Rome Empire rested on a business model that allowed peoples to sublimate war into competition for building contracts. That is the basic idea behind the IBRD.
So, contrary to myth, the IBRD, which along with spinoffs is now known as the World Bank Group, was not designed to reconstruct postwar Europe. It was not designed to develop Europe. The IBRD was designed to produce a business model that allowed European industries to compete for government building projects financed by low-cost loans.
If the Europeans wanted to go on bashing each other after two world wars, they could do it by competing for business contracts issued by governments--contracts paid for with money borrowed from a bank that loaned exclusively to governments.
Someday, a building materials procurement specialist will write a history of the world. Then many mysteries of history will be revealed. And it will be clear that one of the brightest ideas human brains ever hatched was signed into agreement at Bretton Woods. The development bank model of business is the biggest single factor in the relative peace the world has enjoyed during the past half century.
What's the catch? Many years ago, while first learning about the World Bank, I put that question to a Bank economist. I asked if the World Bank ran the world.
He replied, "No. The IMF runs the world. The World Bank fixes the world."
I observed that the Bank was like no bank I'd ever banked at, so he could he tell me in one sentence what the World Bank actually was?
He replied, "The Bank is a juggernaut."
After chewing that over I replied in the manner of Alice, "But a juggernaut is an engine of destruction. Doesn't your definition of the Bank conflict with the Bank's mission to fix the world?"
"Not at all," replied my guide to Wonderland. "The World Bank is irrefutable proof that you can't fix anything in this world without breaking something, somewhere down the line."
What the Bank can't fix about itself is the very success of its business model, which spawned numerous imitations. You've heard of nuclear proliferation. There is also development-bank proliferation. There is now a version of the World Bank in every world region you can conceive, including the "Islamic Region."
The proliferation set trouble in motion. As long as the IBRD model was serving a relatively small group of competing contractors--the Europeans and Americans--there was enough contract pie to go around. But once everybody and his uncle jumped in, that was a different game. Everybody's clamoring for contracts, which means writing more and more development loans. But there are only so many national governments on earth. Those governments can only contract to put up so many bridges, dams and buildings.
To see where this has led, an episode of the Amazing Race found the teams in a Gulf Arab state. One contestant blurted, "Look at this place! There's a mosque on every corner!"
Ah, but you mustn't think "mosque" when seeing a mosque, if you want to understand development banks. Think cement contract, steel girder contract, electrical contract, copper tube contract, plumbing contract, painting contract....
In short, there is now cutthroat competition among peoples all over the world to get government contracts funded by development bank loans. That means the contract pie is fast reducing to the size of a poptart.
When development banks proliferated, this set in motion a destructive cycle:
1. At some point governments have to pay installments on the development loans,
2. they can't pay without an adequate tax base and expanding economy,
3. hard to expand a 'commanding heights' (socialist) economy,
4. but if governments move away from socialist government, the contract pie shrinks for contractors--the ones who depend on getting business from governments that get loans from development banks,
5. when the contract pie shrinks, many contractors go belly up,
6. that shrinks the country's tax base,
7. return to "1" and repeat the cycle several times,
8. the government defaults on the loan payments,
9. the development banks stop writing loans,
10. more contractors go out of business,
11. the tax base shrinks even more,
12. the broke debtor governments stand outside the annual G7/8 meetings and rend their clothing and gnash their teeth,
13. the G7/8 put together some kind of debt relief (i.e., refinancing the loans and writing more loans),
14. Return to "1" and repeat the cycle.
Then Americans ask, "Why is it so hard for these poor countries to get away from socialist government, which is killing them?
There is also an insidious aspect to the development bank model as applied to LDCs (least developed countries). It keeps the LDCs always moving backward in relation to the developed countries, which sets up another destructive cycle. Pundita will discuss that cycle in Juggernaut, Part 2.
.
Monday, March 7
John Snow suggests Bono for World Bank President post, Pundita suggests Tinkerbell for Snow's post
"Pundita, have you heard? [US Treasury] Secretary Snow said he wouldn't rule out Bono as a candidate for World Bank president. Isn't that a hoot?
[Signed] Claudia in Taos"
Dear Claudia:
Every German finance minister serving in the post-WW2 era has been completely convinced that his American counterpart was barking mad. The candidates John Snow likes for World Bank president help explain why. But at least John Snow barks madly on Earth. The last Treasury Secretary, Paul O'Neill, stationed himself on Pluto. There he met Bono.
So there we were in the post-9/11 days, with the world on fire and the US economy teetering. President Bush would come to work in the morning, look around the conference table and ask Cabinet members, "Where's my Treasury Secretary?"
He was running around Africa with Bono. After Bush fired him, O'Neill wrote a book in which he complained that Bush wouldn't listen to him after their first meeting. But after you've heard, "Arf arf arf arf arf arf arf!" you don't need to hear the thoughts expressed a second time.
As to where America's presidents find these people--well, at least since the post-WW2 era the treasury secretary post has been largely ceremonial. The Federal Reserve has run US economic policy, except for the years during which the Bundesbank ran it.
As to how the German central bank came to run American economic policy--Pundita can't remember whether it was the head of the Bundesbank or Germany's finance minister who rang up Paul Volcker (then Chairman of the Federal Reserve) and yelled at him in at least three languages. At the time the American economy and thus the entire world was 48 minutes away from falling off the edge of the planet.
Things were such a mess that the Bundesbank told the Fed, "We're faxing you instructions in simple English. Do everything on the list, don't ask why, just do it."
But if Bono for next World Bank President is a scary thought, promise you won't run screaming if I tell you what's been running the World Bank. Sebastian Mallaby, a journalist who has written about the Bank, spilled the beans. Mallaby recounts that when he was ushered into his first interview with James Wolfensohn, he found Wolfensohn seated with Bono, Swami Agnivesh and the Archbishop of Canterbury.
That's the crew that's been advising the head of the world's most powerful development bank.
At least Bono is well-meaning; he's deeply concerned about the world's very poorest. The same can't be said for George Soros and Mikhail Khordokovsky, who were greatly responsible for the choice of Wolfensohn for Bank president.
As to how that situation came about--Soros's money helped put William Clinton in the White House. Soros had a strong reason for backing Clinton. Two years at Oxford did not teach Clinton how international finance works, much less how development banks work. So with Soros in effect running the State Department and President Clinton hanging on his every advice, the next task for Soros and his oligarch buddies was to find a World Bank president they could work with. Thus it came to pass that Clinton's choice for Bank president was James Wolfensohn, an investment banker.
Oligarchs can clean out investment bankers in six banking days flat. That's why stealing close to a billion dollars from the IMF was a walk in the park for Ukrainian oligarchs. Money says they were caught only because a rival oligarch clan ratted on them.
As to how much the oligarchs have skimmed from the World Bank with Wolfensohn at the helm, we can't find out because the Bank won't allow an independent audit. That's why we need Eliot Spitzer for the next World Bank President beep this is a recording.
Here, readers might ask whether Mallaby's eyeglass prescription might have needed adjustment at the time he met Wolfensohn. It's entirely possible. The man introduced as Shree Swami Agnivesh was probably Khordokovsky in an orange turban. The archbishop was quite probably Soros in purple miter. Wolfensohn and Bono wouldn't have known the difference.
But where there's life and fiscally responsible German bankers there's hope. Pundita has hatched a stopgap solution. Bush should ask Paris Hilton if she wouldn't mind allowing Tinkerbell to fill the post of US Treasury Secretary. Don't laugh before you've considered my reasons:
1. Tinkerbell has a very pleasing yip. She could get a better hearing from Bush during Cabinet meetings than the present treasury secretary.
2. The German finance minister loves Chihuahuas.
3. Tinkerbell's human family knows more about international finance than the last three treasury secretaries put together.
4. Chihuahuas happen to be the best lizard catchers. Handy during economic summits.
5. She would make the cover of newsweeklies more times than all other treasury officials and world leaders combined. Thus, Tinkerbell would popularize the subject of economics and direct a much-needed spotlight on the US Treasury post.
6. She is sane.
Given that the Treasury post is largely ceremonial, it's obvious from the above that Tinkerbell is the very best candidate for the Cabinet slot.
A bonus is that Paris Hilton reports that Tinkerbell is an excellent judge of male character. That trait would be invaluable in helping the Treasury Secretary decide on candidates for the post of World Bank President.
This seems a good place to review Pundita essays that address deeply entrenched problems in the poorest countries and my pick for World Bank president.
Verticalization of corruption
Why widescale poverty is entrenched
Why it's so hard to see the real problems
Democracy Stage Show Part 1
Democracy Stage Show Part 2
Eliot Spitzer for Bank President Part 1
Eliot Spitzer for Bank President, Part 2
.
[Signed] Claudia in Taos"
Dear Claudia:
Every German finance minister serving in the post-WW2 era has been completely convinced that his American counterpart was barking mad. The candidates John Snow likes for World Bank president help explain why. But at least John Snow barks madly on Earth. The last Treasury Secretary, Paul O'Neill, stationed himself on Pluto. There he met Bono.
So there we were in the post-9/11 days, with the world on fire and the US economy teetering. President Bush would come to work in the morning, look around the conference table and ask Cabinet members, "Where's my Treasury Secretary?"
He was running around Africa with Bono. After Bush fired him, O'Neill wrote a book in which he complained that Bush wouldn't listen to him after their first meeting. But after you've heard, "Arf arf arf arf arf arf arf!" you don't need to hear the thoughts expressed a second time.
As to where America's presidents find these people--well, at least since the post-WW2 era the treasury secretary post has been largely ceremonial. The Federal Reserve has run US economic policy, except for the years during which the Bundesbank ran it.
As to how the German central bank came to run American economic policy--Pundita can't remember whether it was the head of the Bundesbank or Germany's finance minister who rang up Paul Volcker (then Chairman of the Federal Reserve) and yelled at him in at least three languages. At the time the American economy and thus the entire world was 48 minutes away from falling off the edge of the planet.
Things were such a mess that the Bundesbank told the Fed, "We're faxing you instructions in simple English. Do everything on the list, don't ask why, just do it."
But if Bono for next World Bank President is a scary thought, promise you won't run screaming if I tell you what's been running the World Bank. Sebastian Mallaby, a journalist who has written about the Bank, spilled the beans. Mallaby recounts that when he was ushered into his first interview with James Wolfensohn, he found Wolfensohn seated with Bono, Swami Agnivesh and the Archbishop of Canterbury.
That's the crew that's been advising the head of the world's most powerful development bank.
At least Bono is well-meaning; he's deeply concerned about the world's very poorest. The same can't be said for George Soros and Mikhail Khordokovsky, who were greatly responsible for the choice of Wolfensohn for Bank president.
As to how that situation came about--Soros's money helped put William Clinton in the White House. Soros had a strong reason for backing Clinton. Two years at Oxford did not teach Clinton how international finance works, much less how development banks work. So with Soros in effect running the State Department and President Clinton hanging on his every advice, the next task for Soros and his oligarch buddies was to find a World Bank president they could work with. Thus it came to pass that Clinton's choice for Bank president was James Wolfensohn, an investment banker.
Oligarchs can clean out investment bankers in six banking days flat. That's why stealing close to a billion dollars from the IMF was a walk in the park for Ukrainian oligarchs. Money says they were caught only because a rival oligarch clan ratted on them.
As to how much the oligarchs have skimmed from the World Bank with Wolfensohn at the helm, we can't find out because the Bank won't allow an independent audit. That's why we need Eliot Spitzer for the next World Bank President beep this is a recording.
Here, readers might ask whether Mallaby's eyeglass prescription might have needed adjustment at the time he met Wolfensohn. It's entirely possible. The man introduced as Shree Swami Agnivesh was probably Khordokovsky in an orange turban. The archbishop was quite probably Soros in purple miter. Wolfensohn and Bono wouldn't have known the difference.
But where there's life and fiscally responsible German bankers there's hope. Pundita has hatched a stopgap solution. Bush should ask Paris Hilton if she wouldn't mind allowing Tinkerbell to fill the post of US Treasury Secretary. Don't laugh before you've considered my reasons:
1. Tinkerbell has a very pleasing yip. She could get a better hearing from Bush during Cabinet meetings than the present treasury secretary.
2. The German finance minister loves Chihuahuas.
3. Tinkerbell's human family knows more about international finance than the last three treasury secretaries put together.
4. Chihuahuas happen to be the best lizard catchers. Handy during economic summits.
5. She would make the cover of newsweeklies more times than all other treasury officials and world leaders combined. Thus, Tinkerbell would popularize the subject of economics and direct a much-needed spotlight on the US Treasury post.
6. She is sane.
Given that the Treasury post is largely ceremonial, it's obvious from the above that Tinkerbell is the very best candidate for the Cabinet slot.
A bonus is that Paris Hilton reports that Tinkerbell is an excellent judge of male character. That trait would be invaluable in helping the Treasury Secretary decide on candidates for the post of World Bank President.
This seems a good place to review Pundita essays that address deeply entrenched problems in the poorest countries and my pick for World Bank president.
Verticalization of corruption
Why widescale poverty is entrenched
Why it's so hard to see the real problems
Democracy Stage Show Part 1
Democracy Stage Show Part 2
Eliot Spitzer for Bank President Part 1
Eliot Spitzer for Bank President, Part 2
.
Sunday, March 6
The Emperor is Naked
"Pundita! It's not like you to be mean to Bush! I understand what you're saying [in previous post] but he's just trying to find ways to persuade Iran not to continue with their nuclear weapon development. I don't think it hurts for Bush to say he's considering Europe's plan to offer incentives to Iran. It makes him sound reasonable.[Signed] Sleepless again in St. Louis"
Dear Sleepless:
It makes him sound dizzy. That is one reason Pundita jumped all over him. Tehran is not engaged in nuclear weapon development. We have their word on that. So it makes no sense to offer them incentives not to do something they're already not doing. In other words, we can't nail the slippery bastards. That means we'll have to bomb half of Iran to rubble before we can figure out where they're hiding the nuke-building facilities. The good news is that Iran won't look much different after the bombing than before. Once you get out of the cities you're in the 5th Century BCE.
This observation brings us to the crux of the problem. If you have to hire German or French engineers just to figure out how to put up an electricity grid, and if you're stoning children to death as government policy, you're just not ready for modern weapons. But no one in the modern world told the Iranians that. Why? Because they have oil. Everybody pandered to them. Nobody told them the truth about themselves. Nobody cared enough about them to speak straight.
So they're like emperors who have never once been contradicted. They do not have an idea of civilized behavior, much less responsible behavior. Yet they are completely convinced that they're doing just fine in the modern era. So if they can't have a nuclear weapon, they are going to throw a tantrum and break things.
The first thing Dr. Phil would advise is that you don't play into that. You don't offer incentives for the same reason you don't bribe children into stopping a tantrum. And for the same reason you don't pay thugs not to rob you. If you go down that road, the thug will be back next week asking for another payment.
Every adult with half a brain knows all this. So why are European officials heading for Geneva this week for yet another round of negotiations about a nuclear weapons program Tehran says they don't have?
The answer is that by keeping the discussion centered on nukes, the EU3 hope to distract the world's attention from the fact that they're pandering to a regime that makes history's barbarian chieftains look like the model of civilized behavior.
.
Dear Sleepless:
It makes him sound dizzy. That is one reason Pundita jumped all over him. Tehran is not engaged in nuclear weapon development. We have their word on that. So it makes no sense to offer them incentives not to do something they're already not doing. In other words, we can't nail the slippery bastards. That means we'll have to bomb half of Iran to rubble before we can figure out where they're hiding the nuke-building facilities. The good news is that Iran won't look much different after the bombing than before. Once you get out of the cities you're in the 5th Century BCE.
This observation brings us to the crux of the problem. If you have to hire German or French engineers just to figure out how to put up an electricity grid, and if you're stoning children to death as government policy, you're just not ready for modern weapons. But no one in the modern world told the Iranians that. Why? Because they have oil. Everybody pandered to them. Nobody told them the truth about themselves. Nobody cared enough about them to speak straight.
So they're like emperors who have never once been contradicted. They do not have an idea of civilized behavior, much less responsible behavior. Yet they are completely convinced that they're doing just fine in the modern era. So if they can't have a nuclear weapon, they are going to throw a tantrum and break things.
The first thing Dr. Phil would advise is that you don't play into that. You don't offer incentives for the same reason you don't bribe children into stopping a tantrum. And for the same reason you don't pay thugs not to rob you. If you go down that road, the thug will be back next week asking for another payment.
Every adult with half a brain knows all this. So why are European officials heading for Geneva this week for yet another round of negotiations about a nuclear weapons program Tehran says they don't have?
The answer is that by keeping the discussion centered on nukes, the EU3 hope to distract the world's attention from the fact that they're pandering to a regime that makes history's barbarian chieftains look like the model of civilized behavior.
.
Friday, March 4
Brussels sells Bush the Brooklyn Bridge
"What do you think of Bush's new willingness to consider offering incentives such as WTO membership...in exchange for Iran giving up their nuclear weapon program?"
Tom in Sioux City"
Dear Tom:
The disastrous EU negotiations with Tehran about nukes have left Brussels staring down the barrel of spectacular failure to demonstrate that they're capable of making effective foreign policy for the entire of Europe.
Add to this, the longer Washington remains aloof from the EU3-led* negotiations with Iran, the more questionable Europe's claim to be a friend of democracy and civilization.
Add to this, the Iranian democracy advocates have expressed their outrage at European complicity with the regime in Tehran. So Brussels knows that if the regime falls, Europe will be pushed to the back of the line for Iranian oil purchases and big-ticket business contracts with the new government. This would include a flood of development bank loans, including World Bank loans, which would be made to a democratic government in Tehran.
Also, a democratic government in Tehran would cancel many outstanding defense-related government projects now underway in Iran and demand a review of the contractors and subcontractors for the projects. It is guaranteed that a democratic government would keep European contractors in the courts for years if not decades, just as a matter of principle, rather than continue with many of the contractors.
So Brussels is not only looking at a massive diplomatic failure and loss of Face; they're also having contemplate the billions of euros that key European industries stand to lose, if the regime in Tehran is booted. This loss would be coming on top of the billions they lost when Iraq's regime was toppled and the money lost from European participation in the Oil for Food Program. All this would come on top of Russia's repatriation of their energy industry.
That's why Europe's media yowled and nattered that Bush must come to Europe prepared to listen. Brussels had only one shot, which was to ask Bush behind closed doors to at least voice consideration for joining Europe with offering incentives to Tehran. In exchange, Brussels would back Washington's call for sanctions against Iran. This would be in the event Tehran betrayed incentivized promises to give up their ambitions for a nuclear weapon.
President Bush fell for it, over protests from the Pentagon and Vice President Cheney. Thus, the United States is now on record for a willingness to consider offering incentives to a regime that finds nothing barbaric about stoning adults and children to death.
Even if Bush decides not to go along with incentives to Tehran, it's now on record that Europe's betrayal of the Iranian democracy movement is not censured by the United States of America. That's what Brussels needed.
As to whether the United States got anything in return for selling out our principles--we got the word of goverrnments who had already sold out on civilization. Even if the EU3 went on record with the assurances they used to bait the trap, we have to assume that Europe would use the United Nations and every other means at their disposal to stall the implementation of sanctions.
They would stall until Tehran presented clear evidence that they had a nuclear weapon. That would allow Brussels to rescind their agreement on the grounds that the sanctions only applied to preventing Iran from acquiring a nuclear weapon. That would force negotiations to start all over again.
To put all this another way, Brussels is committed to seeing that the current regime in Iran remains in power as long as possible. Toward this end, they want help from the USA in giving legitimacy to the regime by agreeing to bargain with them. They might not get what they want, but they got what they needed by selling President Bush the Brooklyn Bridge.
* The EU3 are Germany, France and Britain.
.
Tom in Sioux City"
Dear Tom:
The disastrous EU negotiations with Tehran about nukes have left Brussels staring down the barrel of spectacular failure to demonstrate that they're capable of making effective foreign policy for the entire of Europe.
Add to this, the longer Washington remains aloof from the EU3-led* negotiations with Iran, the more questionable Europe's claim to be a friend of democracy and civilization.
Add to this, the Iranian democracy advocates have expressed their outrage at European complicity with the regime in Tehran. So Brussels knows that if the regime falls, Europe will be pushed to the back of the line for Iranian oil purchases and big-ticket business contracts with the new government. This would include a flood of development bank loans, including World Bank loans, which would be made to a democratic government in Tehran.
Also, a democratic government in Tehran would cancel many outstanding defense-related government projects now underway in Iran and demand a review of the contractors and subcontractors for the projects. It is guaranteed that a democratic government would keep European contractors in the courts for years if not decades, just as a matter of principle, rather than continue with many of the contractors.
So Brussels is not only looking at a massive diplomatic failure and loss of Face; they're also having contemplate the billions of euros that key European industries stand to lose, if the regime in Tehran is booted. This loss would be coming on top of the billions they lost when Iraq's regime was toppled and the money lost from European participation in the Oil for Food Program. All this would come on top of Russia's repatriation of their energy industry.
That's why Europe's media yowled and nattered that Bush must come to Europe prepared to listen. Brussels had only one shot, which was to ask Bush behind closed doors to at least voice consideration for joining Europe with offering incentives to Tehran. In exchange, Brussels would back Washington's call for sanctions against Iran. This would be in the event Tehran betrayed incentivized promises to give up their ambitions for a nuclear weapon.
President Bush fell for it, over protests from the Pentagon and Vice President Cheney. Thus, the United States is now on record for a willingness to consider offering incentives to a regime that finds nothing barbaric about stoning adults and children to death.
Even if Bush decides not to go along with incentives to Tehran, it's now on record that Europe's betrayal of the Iranian democracy movement is not censured by the United States of America. That's what Brussels needed.
As to whether the United States got anything in return for selling out our principles--we got the word of goverrnments who had already sold out on civilization. Even if the EU3 went on record with the assurances they used to bait the trap, we have to assume that Europe would use the United Nations and every other means at their disposal to stall the implementation of sanctions.
They would stall until Tehran presented clear evidence that they had a nuclear weapon. That would allow Brussels to rescind their agreement on the grounds that the sanctions only applied to preventing Iran from acquiring a nuclear weapon. That would force negotiations to start all over again.
To put all this another way, Brussels is committed to seeing that the current regime in Iran remains in power as long as possible. Toward this end, they want help from the USA in giving legitimacy to the regime by agreeing to bargain with them. They might not get what they want, but they got what they needed by selling President Bush the Brooklyn Bridge.
* The EU3 are Germany, France and Britain.
.
Thursday, March 3
The Enclave Mentality and the Oriental Stranger Syndrome
"Pundita, Your explanation [in 'Anti-jive Policy' essay] about government corruption in the developing world is very depressing. You're saying that much of it is not really corruption as Americans understand the term but a way life that could take generations to change. There seems to be no solution except attempts to educate."
Ann in Cincinnati"
Dear Ann:
Pundita did not state that the situation could take generations to change. Yes, there has to be a process of education but the process must be first on our side. Rush Limbaugh spent last week in Afghanistan. He wanted to see the situation there with his own eyes. Rush told his audience a story that perfectly illustrates the essence of the problem on our side:
At first there was tremendous resistance among the Afghanis to voting. An Afghani explained his reluctance to a US solider he'd become friends with. He didn't want to vote because the winner would stalk the people who voted for the loser and shoot them.
The soldier told him, "Naw, that's not how it works in a democracy; if you lose, you just regroup and try to make your guy the winner in the next election."
The Afghani asked, "Really?" The soldier replied, Yeah really.
That was all it took. The Afghani went and told his family and friends. Thus, the US military realized the problem, and pretty soon word was flying around Afghanistan that a democracy means you don't get shot if you vote for the loser.
Well, how were the Afghanis supposed to know unless someone told them?
Rush also told a story about Ayatollah Sistani; Sistani nixed the US advice that the Iraqi Constitution had to be ratified by a majority of Iraqis. Conversation with Americans he'd gotten to know revealed that he thought the US had made up the rule for Iraq. The Americans told him, Naw, that's what Americans did; that's why American democracy is so strong.
Sistani decided to investigate. After a few weeks of studying American history, he realized that by gum, the Americans were telling the truth; thus, he saw the logic of not adopting a constitution without majority agreement.
Now in consideration of the billions of dollars the World Bank and Washington have spent on analyzing The Native, you might think the stories Rush Limbaugh told are anomalies. You would be wrong. The stories point to the Enclave Mentality, which has dominated US foreign policy thinking since US relations with Native populations began. The mentality is lifted whole cloth from the European colonizing mindset.
Americans are greatly mistaken if they think the mindset died out along with European colonizing. Today, Americans doing oil business in Nigeria live in enclaves, which keep them isolated from virtually all Nigerians except the officials and the wealthiest businesspeople. This situation is repeated all over the world.
The Native officials do provide the Enclave Americans with a picture of the host country and its peoples. However, the picture is the same type that World Bank employees drawn from the developing world write up in policy papers for the Bank. The Natives gauge what the Bank wants to know, then frame their analysis of the Native from that viewpoint. Therefore, galactic-sized chunks of reality are omitted from the analyses.
The Bank's view is as skewed as Washington's. Washington runs on policy papers; to be more specific, it runs on one page two-syllable abstracts of policy papers. Congressionals are supposed to read the policy papers but most only read the abstracts, which are piled to the ceiling in their office. They leave the chore of reading the actual papers, which can run to 1,000 pages with 20 pages of footnotes, to their aides. These aides are straight out of college and their brains must function on the nutrition provided by peanuts, popcorn and cola.
These are the Americans charged with comprehending and summarizing policy papers for Congress. Their boss stuffs the summary and abstract into his briefcase and reads them on the way to his congressional committee sessions, which set budgets and help shape US defense/foreign policy.
With regard to the Pentagon and CIA, their analysts actually read the policy papers and even comprehend them in some cases, but they read with a magic marker in their head. Every sentence has to be reframed in terms of budget considerations and DoD or Intel protocols. That means their analysis of the papers omit galactic sized chunks of reality.
The picture that Americans receive from government officials in foreign countries is the same type that the British overlords received from the rajas in India. The rajas were mostly concerned with keeping their power. Thus, the strongest message that came through to the British was "Don't rile the Natives any more than you have to."
The French developed a very creative way of dealing with the same message, maybe because the French didn't possess the navy the British had in those days. The French thought up the Modernity Kit, which they hawked to every chieftain they wanted to trade with. They convinced the chiefs that you're a thoroughly modern person if you master the French language, learn to eat with a knife and fork, and develop an appreciation for chamber music.
Thus, generations of colonized peoples were raised up without a clue as to what really constitutes modern Western government. They got only the outward forms: the marble buildings of bureaucracy and judiciary, the 15 copies of a directive that had to be signed and stamped, the filing cabinets and the ritual banter between judges and lawyers.
That is how it came to pass that vast tracts of humanity have no idea what makes for American democracy and how it came about. They do not know that America was built by women wearing long dresses and men with beards--men and women who were not terribly bright, who were for the most part narrow-minded and insular, and whose education was pretty much confined to reading the Bible. In short, vast tracts of humanity don't know that America was built by the same kind of people they are.
Now what does it take to correct that misperception? Yet more mountains of policy papers? Yet more billions spent on educational programs? The creation of yet more international organizations?
First it takes understanding the major roadblock, which was inadvertently alluded to by Banfsheh Zand-Bonazzi, the editor of Iran Press News during a conversation she had one night with John Batchelor. She mentioned in passing that the Iraqi borders weren't locked down by the Coalition forces because the British didn't want to offend the so-called nomadic tribes.
The tribes insisted that they be allowed to pass back and forth between Iran and Iraq whenever they wanted. These aren't just any old tribes; they control a lot of business including oil business in Iran. Zand-Bonazzi said bluntly that the British wanted to protect British business interests in Iran.
As to why the US military command in Iraq went along with it, Pundita is not sure. But given the history of US-British relations during the Cold War, which parallels to remarkable degree the plot of Thelma and Louise, it's likely the US command in Iraq didn't have a clue. The British command lectured their American counterpart about the importance of striking non-threatening poses while dealing with the Iraqi Native. Don't wear helmets, wear caps; don't carry your weapons in such obvious fashion, etc.
The British pointed to the relative peace and quiet of Basra to shore up the lectures. Well of course it was peaceful and quiet in Basra. The most powerful tribes were happy they could cross the border at will. The Iranian military and al Qaeda were happy they could use Basra as an easy entry point into Iraq.
Don't tear your hair because you'll be bald by the time you finish reading this essay. What Zand-Bonazzi was talking about is a very old story--it's as old as trade among different tribes. However, it was the colonizing trade model that created the enclave. During Victorian times, the mentality gave rise to the Oriental Stranger Syndrome, which is the Enclave Mentality filtered back to the home peoples who hear third hand about Natives.
The Oriental Stranger kept legions of British novelists, scholars and newspaper reporters gainfully employed. He also took the heat off London's embattled police force, which was fighting a crime wave that emanated from inhumane working conditions in London factories and slave wages paid the factory laborers. Muffled in turbans and reeking of garlic and other strange odors, the Oriental Stranger stalked the gaslit streets of London, wreaking murder and mayhem on Christianity, Western Civilization and British who didn't make it home before dark.
The Oriental Stranger did not spring whole cloth from the fertile imagination of fiction writers and reporters. He sprang from their imaginings about tales told by British soldiers garrisoned in far-flung outposts and British traders who lived in enclaves in the outposts. These tales rested largely on what the outpost rulers told the British about the outpost peoples.
This doesn't mean the stories were complete fiction; they were a window on the world outside the enclave. But you can see very little of the world if you look at it from a window inside your house. In the same manner, the Enclave view shows very little about the peoples outside the enclave.
The Oriental Stranger Syndrome is not really 'prejudice' in the sense of bigotry. It's what happens when you live near peoples you never really interact with. They are always The Stranger, and strangers are always suspect. Thus, you never let your guard down, you never say what you really think, you never really communicate. This sets up a cycle where the Stranger also sees you as a stranger. The upshot is that many colonized peoples learned the outward forms of modern life but didn't get the essences, the subtexts, the referents.
A good example of where this situation leads is the US military and business consultants stationed in Saudi Arabia. They lived in garrison and enclaves, they were trained not to make any criticism of the cultural practices they saw when they had to leave the enclaves. They were trained to look without seeing, and to avert their eyes about many things they looked at. This created a mystique of American power and menace and kept the knowledge Americans had about their culture locked up with them in the enclaves. That allowed the most radical elements in the Saudi society to interpret American culture and democracy to the Saudis.
So while it's ghastly that it had to happen this way, the ongoing terrorist attacks forced the US military out of the Green Zone in Baghdad. That meant legions of American kids and Iraqis had no choice but to interact with each other in a way that never would have happened, if the US occupation of Iraq had gone as the White House originally envisioned.
The same happened in the Afghanistan theater of war. American kids spilled off the military helicopters, looked around and asked, "Where's the base?" An Afghani would ride up, hand the soldiers the reins to a horse and say, "Here it is."
During an earlier era, the CIA and the Afghanis understood the common enemy--the Soviets--and were able to communicate effectively at that one level. That's a far cry from the communication needed to help the Afghanis build up their nation and a functioning democracy while dealing with insurgencies. The US military learned that they could not stay in their garrisons. They had to get out and go live with the Afghanis and they had to explain who Americans are and how we think.
Same happened in Iraq. What do American kids know about diplomacy and trade? And how many of them are walking textbooks on democratic government? They just reacted to the Iraqis in the way they react to people in their home towns. In other words, they acted human, which allowed the Iraqis to learn about them and respond in kind. This was despite the Green Zone, which is an enclave.
The terrorist attacks forced the US military to keep coming out of the enclave, and forced the Iraqis to keep talking with the Grunts. So despite the situation that Zand-Bonazzi mentioned, and despite the Green Zone, the Oriental Stranger syndrome was broken. No surprise, this was followed by the willingness of several Iraqi patriarchs to give a democratic election a try.
Thus another illustration of the truth in the old adage, "Your worst enemy is also your best friend." The enemy's ongoing terrorist attacks in Iraq have done more to further the cause of democracy than most Americans can imagine at this time.
After the Colombine massacre, a neighbor of one of the killers lamented that if only they'd gotten to know their neighbors and engaged with the kids on their block, maybe they would have noted the killers' increasingly strange behavior and mentioned it to the parents. The neighbor added, "But we were just so busy working and commuting; we didn't have the time to engage with the neighbors."
Better make the time because we can't expect a policy analyst to identify the most serious warning signs here or abroad. Yet the signs are not hard to read if we stop, look and listen and engage, engage, engage.
You won't ever lose your compass if you remember that people are not economics and political models of behavior. They are people. They are people whether they live next door or ten thousand miles away; if you forget that, then you must look at people through the narrow window of policy papers and intelligence briefings.
And you must be prepared to wait generations more, before the developing world grapples with the issues Pundita discussed in the Anti-jive Policy essay. But where is the rocket science in the points I brought up? Does it take a special gene to grasp that one can't stick with the clan system, which was designed to serve a few thousand people, and hope to get rid of entrenched corruption in a centralized government that administers to many millions of people?
.
Ann in Cincinnati"
Dear Ann:
Pundita did not state that the situation could take generations to change. Yes, there has to be a process of education but the process must be first on our side. Rush Limbaugh spent last week in Afghanistan. He wanted to see the situation there with his own eyes. Rush told his audience a story that perfectly illustrates the essence of the problem on our side:
At first there was tremendous resistance among the Afghanis to voting. An Afghani explained his reluctance to a US solider he'd become friends with. He didn't want to vote because the winner would stalk the people who voted for the loser and shoot them.
The soldier told him, "Naw, that's not how it works in a democracy; if you lose, you just regroup and try to make your guy the winner in the next election."
The Afghani asked, "Really?" The soldier replied, Yeah really.
That was all it took. The Afghani went and told his family and friends. Thus, the US military realized the problem, and pretty soon word was flying around Afghanistan that a democracy means you don't get shot if you vote for the loser.
Well, how were the Afghanis supposed to know unless someone told them?
Rush also told a story about Ayatollah Sistani; Sistani nixed the US advice that the Iraqi Constitution had to be ratified by a majority of Iraqis. Conversation with Americans he'd gotten to know revealed that he thought the US had made up the rule for Iraq. The Americans told him, Naw, that's what Americans did; that's why American democracy is so strong.
Sistani decided to investigate. After a few weeks of studying American history, he realized that by gum, the Americans were telling the truth; thus, he saw the logic of not adopting a constitution without majority agreement.
Now in consideration of the billions of dollars the World Bank and Washington have spent on analyzing The Native, you might think the stories Rush Limbaugh told are anomalies. You would be wrong. The stories point to the Enclave Mentality, which has dominated US foreign policy thinking since US relations with Native populations began. The mentality is lifted whole cloth from the European colonizing mindset.
Americans are greatly mistaken if they think the mindset died out along with European colonizing. Today, Americans doing oil business in Nigeria live in enclaves, which keep them isolated from virtually all Nigerians except the officials and the wealthiest businesspeople. This situation is repeated all over the world.
The Native officials do provide the Enclave Americans with a picture of the host country and its peoples. However, the picture is the same type that World Bank employees drawn from the developing world write up in policy papers for the Bank. The Natives gauge what the Bank wants to know, then frame their analysis of the Native from that viewpoint. Therefore, galactic-sized chunks of reality are omitted from the analyses.
The Bank's view is as skewed as Washington's. Washington runs on policy papers; to be more specific, it runs on one page two-syllable abstracts of policy papers. Congressionals are supposed to read the policy papers but most only read the abstracts, which are piled to the ceiling in their office. They leave the chore of reading the actual papers, which can run to 1,000 pages with 20 pages of footnotes, to their aides. These aides are straight out of college and their brains must function on the nutrition provided by peanuts, popcorn and cola.
These are the Americans charged with comprehending and summarizing policy papers for Congress. Their boss stuffs the summary and abstract into his briefcase and reads them on the way to his congressional committee sessions, which set budgets and help shape US defense/foreign policy.
With regard to the Pentagon and CIA, their analysts actually read the policy papers and even comprehend them in some cases, but they read with a magic marker in their head. Every sentence has to be reframed in terms of budget considerations and DoD or Intel protocols. That means their analysis of the papers omit galactic sized chunks of reality.
The picture that Americans receive from government officials in foreign countries is the same type that the British overlords received from the rajas in India. The rajas were mostly concerned with keeping their power. Thus, the strongest message that came through to the British was "Don't rile the Natives any more than you have to."
The French developed a very creative way of dealing with the same message, maybe because the French didn't possess the navy the British had in those days. The French thought up the Modernity Kit, which they hawked to every chieftain they wanted to trade with. They convinced the chiefs that you're a thoroughly modern person if you master the French language, learn to eat with a knife and fork, and develop an appreciation for chamber music.
Thus, generations of colonized peoples were raised up without a clue as to what really constitutes modern Western government. They got only the outward forms: the marble buildings of bureaucracy and judiciary, the 15 copies of a directive that had to be signed and stamped, the filing cabinets and the ritual banter between judges and lawyers.
That is how it came to pass that vast tracts of humanity have no idea what makes for American democracy and how it came about. They do not know that America was built by women wearing long dresses and men with beards--men and women who were not terribly bright, who were for the most part narrow-minded and insular, and whose education was pretty much confined to reading the Bible. In short, vast tracts of humanity don't know that America was built by the same kind of people they are.
Now what does it take to correct that misperception? Yet more mountains of policy papers? Yet more billions spent on educational programs? The creation of yet more international organizations?
First it takes understanding the major roadblock, which was inadvertently alluded to by Banfsheh Zand-Bonazzi, the editor of Iran Press News during a conversation she had one night with John Batchelor. She mentioned in passing that the Iraqi borders weren't locked down by the Coalition forces because the British didn't want to offend the so-called nomadic tribes.
The tribes insisted that they be allowed to pass back and forth between Iran and Iraq whenever they wanted. These aren't just any old tribes; they control a lot of business including oil business in Iran. Zand-Bonazzi said bluntly that the British wanted to protect British business interests in Iran.
As to why the US military command in Iraq went along with it, Pundita is not sure. But given the history of US-British relations during the Cold War, which parallels to remarkable degree the plot of Thelma and Louise, it's likely the US command in Iraq didn't have a clue. The British command lectured their American counterpart about the importance of striking non-threatening poses while dealing with the Iraqi Native. Don't wear helmets, wear caps; don't carry your weapons in such obvious fashion, etc.
The British pointed to the relative peace and quiet of Basra to shore up the lectures. Well of course it was peaceful and quiet in Basra. The most powerful tribes were happy they could cross the border at will. The Iranian military and al Qaeda were happy they could use Basra as an easy entry point into Iraq.
Don't tear your hair because you'll be bald by the time you finish reading this essay. What Zand-Bonazzi was talking about is a very old story--it's as old as trade among different tribes. However, it was the colonizing trade model that created the enclave. During Victorian times, the mentality gave rise to the Oriental Stranger Syndrome, which is the Enclave Mentality filtered back to the home peoples who hear third hand about Natives.
The Oriental Stranger kept legions of British novelists, scholars and newspaper reporters gainfully employed. He also took the heat off London's embattled police force, which was fighting a crime wave that emanated from inhumane working conditions in London factories and slave wages paid the factory laborers. Muffled in turbans and reeking of garlic and other strange odors, the Oriental Stranger stalked the gaslit streets of London, wreaking murder and mayhem on Christianity, Western Civilization and British who didn't make it home before dark.
The Oriental Stranger did not spring whole cloth from the fertile imagination of fiction writers and reporters. He sprang from their imaginings about tales told by British soldiers garrisoned in far-flung outposts and British traders who lived in enclaves in the outposts. These tales rested largely on what the outpost rulers told the British about the outpost peoples.
This doesn't mean the stories were complete fiction; they were a window on the world outside the enclave. But you can see very little of the world if you look at it from a window inside your house. In the same manner, the Enclave view shows very little about the peoples outside the enclave.
The Oriental Stranger Syndrome is not really 'prejudice' in the sense of bigotry. It's what happens when you live near peoples you never really interact with. They are always The Stranger, and strangers are always suspect. Thus, you never let your guard down, you never say what you really think, you never really communicate. This sets up a cycle where the Stranger also sees you as a stranger. The upshot is that many colonized peoples learned the outward forms of modern life but didn't get the essences, the subtexts, the referents.
A good example of where this situation leads is the US military and business consultants stationed in Saudi Arabia. They lived in garrison and enclaves, they were trained not to make any criticism of the cultural practices they saw when they had to leave the enclaves. They were trained to look without seeing, and to avert their eyes about many things they looked at. This created a mystique of American power and menace and kept the knowledge Americans had about their culture locked up with them in the enclaves. That allowed the most radical elements in the Saudi society to interpret American culture and democracy to the Saudis.
So while it's ghastly that it had to happen this way, the ongoing terrorist attacks forced the US military out of the Green Zone in Baghdad. That meant legions of American kids and Iraqis had no choice but to interact with each other in a way that never would have happened, if the US occupation of Iraq had gone as the White House originally envisioned.
The same happened in the Afghanistan theater of war. American kids spilled off the military helicopters, looked around and asked, "Where's the base?" An Afghani would ride up, hand the soldiers the reins to a horse and say, "Here it is."
During an earlier era, the CIA and the Afghanis understood the common enemy--the Soviets--and were able to communicate effectively at that one level. That's a far cry from the communication needed to help the Afghanis build up their nation and a functioning democracy while dealing with insurgencies. The US military learned that they could not stay in their garrisons. They had to get out and go live with the Afghanis and they had to explain who Americans are and how we think.
Same happened in Iraq. What do American kids know about diplomacy and trade? And how many of them are walking textbooks on democratic government? They just reacted to the Iraqis in the way they react to people in their home towns. In other words, they acted human, which allowed the Iraqis to learn about them and respond in kind. This was despite the Green Zone, which is an enclave.
The terrorist attacks forced the US military to keep coming out of the enclave, and forced the Iraqis to keep talking with the Grunts. So despite the situation that Zand-Bonazzi mentioned, and despite the Green Zone, the Oriental Stranger syndrome was broken. No surprise, this was followed by the willingness of several Iraqi patriarchs to give a democratic election a try.
Thus another illustration of the truth in the old adage, "Your worst enemy is also your best friend." The enemy's ongoing terrorist attacks in Iraq have done more to further the cause of democracy than most Americans can imagine at this time.
After the Colombine massacre, a neighbor of one of the killers lamented that if only they'd gotten to know their neighbors and engaged with the kids on their block, maybe they would have noted the killers' increasingly strange behavior and mentioned it to the parents. The neighbor added, "But we were just so busy working and commuting; we didn't have the time to engage with the neighbors."
Better make the time because we can't expect a policy analyst to identify the most serious warning signs here or abroad. Yet the signs are not hard to read if we stop, look and listen and engage, engage, engage.
You won't ever lose your compass if you remember that people are not economics and political models of behavior. They are people. They are people whether they live next door or ten thousand miles away; if you forget that, then you must look at people through the narrow window of policy papers and intelligence briefings.
And you must be prepared to wait generations more, before the developing world grapples with the issues Pundita discussed in the Anti-jive Policy essay. But where is the rocket science in the points I brought up? Does it take a special gene to grasp that one can't stick with the clan system, which was designed to serve a few thousand people, and hope to get rid of entrenched corruption in a centralized government that administers to many millions of people?
.
Wednesday, March 2
Anti-jive Policy
"Hey, Dita like this is the first fan letter I ever wrote. Like I see where you're comin from man, I'm rappin about you. You don't let nobody past. You the anti-jive machine. Also you got me interested in foreign policy. It's all connected man, like I see that now. I can tell you why Bush opened fire on Putin. Putin dissed him, man. Like Bush had to refrigerate him.
[Signed] DetroitTHX5"
Dear DetroitTHX5:
That's an interesting if somewhat ornate thesis. Let's see if we can work our way through it. The protocol is that national leaders refrain from giving public support to political candidates in another country. Putin broke the protocol when he came out in support for Bush during the US presidential campaign. By doing so, he conveyed that his friendship with Bush took precedence over protocol, which would imply a close friendship. However, several of Putin's actions as head of state did not show friendship to Bush or the US war on terror.
Thus, it could be argued that Putin was practicing diplomacy judo--using Bush's own statement of friendship against him in order to gain a political advantage, and making Bush lose Face in the process. From that angle, Bush would be required to restore Face by verbally punching Putin in the face. It all makes perfect sense after a few beers.
On the other hand, the thesis ignores the similarly tough language used by Secretary Powell in the immediate wake of the Beslan massacre; Powell as much told the Russians that they had brought Beslan on themselves through the way they handled the Chechen situation. And it ignores the reportedly very tough language Secretary Rice used during the recent meeting with her Russian counterpart.
All this tough talk has been around for months in the Establishment US news media and voiced by certain factions in the GOP and Democrat party. To be specific, the talk burst into the US news during the election in Ukraine and has escalated since
However, Bush is famous for not following Washington Groupthink and media opinion, which lends some support to your thesis. So, on balance, it's possible there was something personal behind Bush's decision to beat up on Russia during the Brussels speech. I note that the passage about Russia was a last-minute addition, unless the White House kept it under wraps. The version of the speech released to the press the day before did not contain the toughly worded passage.
Whether or not Bush had an ax to grind with Putin, Pundita is getting a bad feeling about all this uniformly tough talk. It smacks of a programmatic approach, which translates to adopting an attitude in place of dialogue. The Russians are known to respect toughness in political leaders. But they're equally known for intellectualism and polemics. All these traits were on abundant display during a 3-1/2 hour press conference that Putin held soon after the Beslan massacre.
That press conference was a humdinger. Putin accused the United States and the United Kingdom of being responsible for the Beslan terrorist attack. He accused the US and the UK of colluding in a plot to destabilize Russia by fomenting anti-Russian sentiment in former Soviet republics. He accused the US and UK of being behind the breakaway movement in Chechnya. He clearly implied that the US and UK were trying to topple his government. And just to make sure he was perfectly understood, Putin came right out and said that the US and the UK had launched a covert war against Russia.
I add that Putin's remarks got very little coverage in the US media and only in attenuated form. The remarks were widely reported in painstaking detail by the European press and pored over and parsed for many days, to the great enjoyment of the Europeans who love opera and hate the Coalition invasion of Iraq. They particularly liked the part about Carthage. After he'd blown off steam it occurred to him that conjuring the image of Russia reduced to a salt flat was not a boost to Russian tourism and trade so eventually he scaled back on his accusations. However, he stuck by the gist, which still amounts to very serious charges.
I can't speak to the accusations about the United Kingdom but there is a grain of truth in the accusations directed at the US. It is true that some Chechens who eventually became terrorists got their original training in CIA-sponsored camps; this was during the Afghan struggle against the Soviet Union. In those days the US was training anyone who was willing to fight the Soviets, which included Arabs who became al Qaeda members.
With regard to the rest of the accusations about terrorism, it sounds as if Putin moved history forward to gloss the present. I would not be surprised to learn that British and US agents helped in Chechnya, as they did in every republic that wanted to break away from the Soviet Empire. And surely there are still groups in Eastern Europe and former Soviet republics who are helping the Chechen separatist movement. However, by the mid-90s, the love affair between the oligarchs and America was such that the US (and Britain) had a vested interest in seeing that Russia was as stable as possible.
The truth is that Chechnya became a magnet for al Qaeda; when the going got tough for AQ after the US crackdown Tehran stepped in with money, arms, and training. This said, it's wrong to dismiss Putin's studious blindness to the present as cynicism. True, Russia is doing big business with Arab countries that are known to be sponsoring terrorist organizations and with Iran, which is ruled by a terror-sponsoring regime. But we have to look at our own situation in the wake of 9/11 to understand Moscow's struggle with reality.
No State Department worker wanted to accept a certain number of terrorist attacks on the US as the price for doing business with Saudi Arabia, and with other countries that are tolerant of terrorist organizations or involved with funding them. But as the facts piled up in the wake of 9/11, the response behind closed doors in Washington was, 'Omigod, what are we going to do? We're in up to our necks with these governments.'
The same sentiments were expressed behind closed doors in Paris, London, and Berlin. Moscow had a delayed reaction; they clung to the idea that Russia had more leverage with the same governments because Russia wasn't dependent on any country for energy supplies. They thought that if push came to shove, they could make threats and make them stick. Thus, they learned the hard way that threats only work if you can deliver them to the enemy. The enemy in this case is like smoke.
To put all this another way, on September 11, 2001, the earth when seen from a satellite was a sea of ostrich bottoms. Everyone had their head stuck in the sand--and this includes the Israelis. They had tunnel vision about China's role in selling weapons and nuclear weapon technology to states that sponsor terrorism. The Israelis were hyperfocused on Arab terrorism and the terror-sponsoring regime in Iran. And the focus made them blind to the connection between terrorism and the Russian mobs that had burrowed into the Israeli financial markets. Every time there was a terror attack on Israel the Israeli military would ring up the mobsters and ask, 'You're not doing any smuggling deals with our enemies, are you?'
In reply, the mobsters would throw on a prayer shawl and go kiss the Wailing Wall.
This said, the Israelis had the only functioning and I mean only functioning intelligence organization among our allies. It's awful to contemplate the extent to which intelligence-gathering among NATO countries had fallen into disrepair. Now one might reasonably ask why the US didn't make use of Israeli intelligence during the decade running up to 9/11, if US intel was a basket case. One has to understand something about budget wars in Washington to get the full picture. There were intelligence analysts who spent the 90s piling Israeli intelligence data on Washington and drawing little stick figures in the effort to illustrate the growing danger to the US from Arab terrorism. The response in Washington boiled down to, "Oh it's just the Jews trying to scare up more aid dollars for Israel."
How could so many reasonably intelligent, sane people the world over be so blind to a steadily growing threat--a threat that was not hidden, but which continuously announced itself with escalating terrorist attacks?
The answer is buried under layers of myriad causes and conditions, which is why the world is lucky that George W. Bush landed in the White House. Bush has a drill-down mind; he has a knack for reaching through layers and grabbing onto the precipitating factor in a problem. The answer is quite simply that people were blind because they were up against something completely new. Seeing begins in the mind, which relies on memory. There was no memory, no way to think about what the new threat looked like, until after 9/11.
What Bush saw after 9/11 is that civilization had reached the point where it's suicidal for nations to allow expediency to govern their foreign relations.
Bush used simpler words to describe the problem; he said in essence that it was time to call a spade a spade, to say what you mean and mean what you say, and stick to your guns. However, the message was greatly obscured by the dust raised during the first years of the war on terror. Also, the war, and particularly the Iraq campaign, turned the Beltway into an armed camp of factions at State, Pentagon, CIA and Congress.
But the world changed on the day that Paul Bremer was ordered back to Washington from the Green Zone in Baghdad. The yelling inside the White House could be heard from across the Potomac. Pundita was not privy to exactly what was yelled, but the drift of the conversation was plainly evident in Bremer's actions when he returned to his duties in the Green Zone. He stopped practicing expediency and took actions that were in line with the promises that Bush had made to the Iraqi people.
From that day forward, the Bush administration made a wholehearted attempt to ditch Cold War policy, which had degenerated into a textbook on expediency. The response from the State Department and the CIA? They were so horrified at Bush's attempt to destroy the linchpin of foreign policy that they redoubled their efforts to block his reelection. They did this by deploying a machine-gun series of 'leaks' that portrayed Bush as an inept president and commander-in-chief.
The Beltway Wars continued even after Bush's reelection but slowly and surely, the White House is winning because many Americans are now at their back. This includes members of Congress from both sides of the aisle, and people inside State and the CIA. In short, it's taken a few years, but many people inside Washington are starting to 'get' what Bush has been trying to convey. Bush's second Inaugural speech and his speech at Brussels are not there yet. But they come close to articulating an epoch-making shift in US foreign policy.
The radical aspect of the shift diverts attention from its common sense. With hindsight, it's just plain stupid during these days of EFTs, Coach Class and portable nukes to give training, money and arms to people whose concept of civilization boils down to eating with a knife and fork. And it's plumb loco to turn your back on them, once your immediate need for them is finished.
So while Pundita basks in your compliment, it's really President Bush who's the anti-jive machine. I'm simply trying to fill out the basic idea Bush sketched and explore how to put it into practice. Many people the world over are engaged in this same effort, and the more the better. We're all out here in new territory, trying to lay down paths that we're improvising as we stumble along.
The problem is that civilization was raised on the foundation of expediency. True, expediency always had a way of blowing back on the government that relied on it to deal with neighbors and marauding tribes, but relying heavily on expediency got humanity this far. So if we're going to rely more on integrity and consistency in foreign relations, there are many wrinkles to be ironed out.
The sticking point is that is there's no such thing as partial integrity. You either have it or you don't. Ditto for consistency. So if you see "Made in China" stamped on weapons used by terror sponsoring regimes, what are you supposed to do? Tell Wal-Mart to stop trading with China? And should we return to horse and buggy until we figure a way to cease dependence on oil imported from autocratic or totalitarian regimes? The most vexing question is how far a nation should take a principled stand if the stand pits the nation against much of the world.
Yet 9/11, 3/11 and Beslan testify that humanity no longer has a choice about confronting the point Bush brought out. We've got to find ways to bring foreign policy in line with the basic ideals of modern democratic civilization. This is because data show that democracies tend to refrain from hot war and don't create large numbers of citizens who export terrorism around the world. The question is how to proceed according to what the data indicate.
Russia's advice in this regard should be welcomed, yet we don't have the luxury of engaging in weighty discussion during peacetime. The inescapable truth is that Russia is selling arms and dual-use nuclear technology to governments that are active enemies of the United States.
Russia is not alone in doing trade with US enemies. They are following the lead of China and the most powerful nations in the European Union. So it's practicing a double standard to criticize Russia on the issue without doing the same with allies.
Pundita can understand Bush taking a softer public with US allies. However, the uniformly tough talk to Moscow that has emerged from Washington during the past year smacks of a programmatic approach. This translates to adopting 'attitude' in place of dialogue.
The Russians are known to respect a tough attitude. However, they're equally known for intellectualism and polemics. All these traits were on abundant display during Putin's 3-1/2 hour press conference.
Thus, if Washington's tough attitude is not accompanied by informed debate and dialogue, the Russians will continue to throw out polemics and rationalizations that go unanswered by the US because attitude isn't reply.
Also, Washington could do more to bring the implementation of foreign policy in line with policy rhetoric. Putin has invoked the US Civil War in defending Russia's right to subdue a breakaway republic--Chechnya. We don't need to agree with the analogy but US policy should recognize Russia's policy toward Chechnya.
If we want to allow a Chechen rebel leader to take asylum in the United States, that's one issue. However, Russia has designated the leader as a terrorist. If we claim a willingness to work with Russia in the war on terror, our policy should match our words to the extent we can accomplish this without betraying our principles. That means the US government should not have direct or indirect dealings with the Chechen leader and should not provide him with financial or any kind of material assistance.
If US intelligence on Chechnya is so poor that we're rationalizing assistance to the leader as means to get good intel on Chechnya and Russia--this is a problem with US intelligence gathering, one that shouldn't drag foreign policy into it.
Also, the US government should ensure that the Chechen leader knows the difference between taking asylum and using the US as a base of operations against Russia.
The same observations apply to US government dealings with the Russian oligarchs who recently attended a White House prayer breakfast. Those oligarchs are fugitives from Russian justice. There's an Interpol warrant out on them. There was no need to give them asylum in this country; they have asylum in Israel. Inviting them to the US and showcasing them at a White House function was a nasty way of telling Moscow that Washington doesn't think the oligarchs should be considered criminals.
Okay. But then Moscow doesn't think Tehran should be designated a terror-sponsoring regime. They don't think Tehran will convert the nuclear technology that Russia is selling them into nuclear weapons. They don't think the Iranian military will figure out how to convert the vehicle-mounted rocket launchers that Russia's selling Syria into shoulder-fired launchers.
If Washington disagrees with Moscow's thinking--well, if foreign policy is silly putty, what's there to disagree with? Why have policy, if whatever thoughts pop into your mind can shift policy on a dime?
If rationality comes from the point of a gun, right now the United States is a paragon of reason because our guns are bigger and in better working order than any other nation's. But the enemy is not only making use of guns. He's turning humans into bombs. To win against such an enemy requires a great deal of cooperation from other nations, to include Russia.
The concept of cooperation has a rational basis, which is grounded in consistently applied policy. If we expect cooperation we need more than a good rap about democracy. We need to bring the implementation of foreign policy in line with fine words about policy. Else, all the fine words are just jive.
.
[Signed] DetroitTHX5"
Dear DetroitTHX5:
That's an interesting if somewhat ornate thesis. Let's see if we can work our way through it. The protocol is that national leaders refrain from giving public support to political candidates in another country. Putin broke the protocol when he came out in support for Bush during the US presidential campaign. By doing so, he conveyed that his friendship with Bush took precedence over protocol, which would imply a close friendship. However, several of Putin's actions as head of state did not show friendship to Bush or the US war on terror.
Thus, it could be argued that Putin was practicing diplomacy judo--using Bush's own statement of friendship against him in order to gain a political advantage, and making Bush lose Face in the process. From that angle, Bush would be required to restore Face by verbally punching Putin in the face. It all makes perfect sense after a few beers.
On the other hand, the thesis ignores the similarly tough language used by Secretary Powell in the immediate wake of the Beslan massacre; Powell as much told the Russians that they had brought Beslan on themselves through the way they handled the Chechen situation. And it ignores the reportedly very tough language Secretary Rice used during the recent meeting with her Russian counterpart.
All this tough talk has been around for months in the Establishment US news media and voiced by certain factions in the GOP and Democrat party. To be specific, the talk burst into the US news during the election in Ukraine and has escalated since
However, Bush is famous for not following Washington Groupthink and media opinion, which lends some support to your thesis. So, on balance, it's possible there was something personal behind Bush's decision to beat up on Russia during the Brussels speech. I note that the passage about Russia was a last-minute addition, unless the White House kept it under wraps. The version of the speech released to the press the day before did not contain the toughly worded passage.
Whether or not Bush had an ax to grind with Putin, Pundita is getting a bad feeling about all this uniformly tough talk. It smacks of a programmatic approach, which translates to adopting an attitude in place of dialogue. The Russians are known to respect toughness in political leaders. But they're equally known for intellectualism and polemics. All these traits were on abundant display during a 3-1/2 hour press conference that Putin held soon after the Beslan massacre.
That press conference was a humdinger. Putin accused the United States and the United Kingdom of being responsible for the Beslan terrorist attack. He accused the US and the UK of colluding in a plot to destabilize Russia by fomenting anti-Russian sentiment in former Soviet republics. He accused the US and UK of being behind the breakaway movement in Chechnya. He clearly implied that the US and UK were trying to topple his government. And just to make sure he was perfectly understood, Putin came right out and said that the US and the UK had launched a covert war against Russia.
I add that Putin's remarks got very little coverage in the US media and only in attenuated form. The remarks were widely reported in painstaking detail by the European press and pored over and parsed for many days, to the great enjoyment of the Europeans who love opera and hate the Coalition invasion of Iraq. They particularly liked the part about Carthage. After he'd blown off steam it occurred to him that conjuring the image of Russia reduced to a salt flat was not a boost to Russian tourism and trade so eventually he scaled back on his accusations. However, he stuck by the gist, which still amounts to very serious charges.
I can't speak to the accusations about the United Kingdom but there is a grain of truth in the accusations directed at the US. It is true that some Chechens who eventually became terrorists got their original training in CIA-sponsored camps; this was during the Afghan struggle against the Soviet Union. In those days the US was training anyone who was willing to fight the Soviets, which included Arabs who became al Qaeda members.
With regard to the rest of the accusations about terrorism, it sounds as if Putin moved history forward to gloss the present. I would not be surprised to learn that British and US agents helped in Chechnya, as they did in every republic that wanted to break away from the Soviet Empire. And surely there are still groups in Eastern Europe and former Soviet republics who are helping the Chechen separatist movement. However, by the mid-90s, the love affair between the oligarchs and America was such that the US (and Britain) had a vested interest in seeing that Russia was as stable as possible.
The truth is that Chechnya became a magnet for al Qaeda; when the going got tough for AQ after the US crackdown Tehran stepped in with money, arms, and training. This said, it's wrong to dismiss Putin's studious blindness to the present as cynicism. True, Russia is doing big business with Arab countries that are known to be sponsoring terrorist organizations and with Iran, which is ruled by a terror-sponsoring regime. But we have to look at our own situation in the wake of 9/11 to understand Moscow's struggle with reality.
No State Department worker wanted to accept a certain number of terrorist attacks on the US as the price for doing business with Saudi Arabia, and with other countries that are tolerant of terrorist organizations or involved with funding them. But as the facts piled up in the wake of 9/11, the response behind closed doors in Washington was, 'Omigod, what are we going to do? We're in up to our necks with these governments.'
The same sentiments were expressed behind closed doors in Paris, London, and Berlin. Moscow had a delayed reaction; they clung to the idea that Russia had more leverage with the same governments because Russia wasn't dependent on any country for energy supplies. They thought that if push came to shove, they could make threats and make them stick. Thus, they learned the hard way that threats only work if you can deliver them to the enemy. The enemy in this case is like smoke.
To put all this another way, on September 11, 2001, the earth when seen from a satellite was a sea of ostrich bottoms. Everyone had their head stuck in the sand--and this includes the Israelis. They had tunnel vision about China's role in selling weapons and nuclear weapon technology to states that sponsor terrorism. The Israelis were hyperfocused on Arab terrorism and the terror-sponsoring regime in Iran. And the focus made them blind to the connection between terrorism and the Russian mobs that had burrowed into the Israeli financial markets. Every time there was a terror attack on Israel the Israeli military would ring up the mobsters and ask, 'You're not doing any smuggling deals with our enemies, are you?'
In reply, the mobsters would throw on a prayer shawl and go kiss the Wailing Wall.
This said, the Israelis had the only functioning and I mean only functioning intelligence organization among our allies. It's awful to contemplate the extent to which intelligence-gathering among NATO countries had fallen into disrepair. Now one might reasonably ask why the US didn't make use of Israeli intelligence during the decade running up to 9/11, if US intel was a basket case. One has to understand something about budget wars in Washington to get the full picture. There were intelligence analysts who spent the 90s piling Israeli intelligence data on Washington and drawing little stick figures in the effort to illustrate the growing danger to the US from Arab terrorism. The response in Washington boiled down to, "Oh it's just the Jews trying to scare up more aid dollars for Israel."
How could so many reasonably intelligent, sane people the world over be so blind to a steadily growing threat--a threat that was not hidden, but which continuously announced itself with escalating terrorist attacks?
The answer is buried under layers of myriad causes and conditions, which is why the world is lucky that George W. Bush landed in the White House. Bush has a drill-down mind; he has a knack for reaching through layers and grabbing onto the precipitating factor in a problem. The answer is quite simply that people were blind because they were up against something completely new. Seeing begins in the mind, which relies on memory. There was no memory, no way to think about what the new threat looked like, until after 9/11.
What Bush saw after 9/11 is that civilization had reached the point where it's suicidal for nations to allow expediency to govern their foreign relations.
Bush used simpler words to describe the problem; he said in essence that it was time to call a spade a spade, to say what you mean and mean what you say, and stick to your guns. However, the message was greatly obscured by the dust raised during the first years of the war on terror. Also, the war, and particularly the Iraq campaign, turned the Beltway into an armed camp of factions at State, Pentagon, CIA and Congress.
But the world changed on the day that Paul Bremer was ordered back to Washington from the Green Zone in Baghdad. The yelling inside the White House could be heard from across the Potomac. Pundita was not privy to exactly what was yelled, but the drift of the conversation was plainly evident in Bremer's actions when he returned to his duties in the Green Zone. He stopped practicing expediency and took actions that were in line with the promises that Bush had made to the Iraqi people.
From that day forward, the Bush administration made a wholehearted attempt to ditch Cold War policy, which had degenerated into a textbook on expediency. The response from the State Department and the CIA? They were so horrified at Bush's attempt to destroy the linchpin of foreign policy that they redoubled their efforts to block his reelection. They did this by deploying a machine-gun series of 'leaks' that portrayed Bush as an inept president and commander-in-chief.
The Beltway Wars continued even after Bush's reelection but slowly and surely, the White House is winning because many Americans are now at their back. This includes members of Congress from both sides of the aisle, and people inside State and the CIA. In short, it's taken a few years, but many people inside Washington are starting to 'get' what Bush has been trying to convey. Bush's second Inaugural speech and his speech at Brussels are not there yet. But they come close to articulating an epoch-making shift in US foreign policy.
The radical aspect of the shift diverts attention from its common sense. With hindsight, it's just plain stupid during these days of EFTs, Coach Class and portable nukes to give training, money and arms to people whose concept of civilization boils down to eating with a knife and fork. And it's plumb loco to turn your back on them, once your immediate need for them is finished.
So while Pundita basks in your compliment, it's really President Bush who's the anti-jive machine. I'm simply trying to fill out the basic idea Bush sketched and explore how to put it into practice. Many people the world over are engaged in this same effort, and the more the better. We're all out here in new territory, trying to lay down paths that we're improvising as we stumble along.
The problem is that civilization was raised on the foundation of expediency. True, expediency always had a way of blowing back on the government that relied on it to deal with neighbors and marauding tribes, but relying heavily on expediency got humanity this far. So if we're going to rely more on integrity and consistency in foreign relations, there are many wrinkles to be ironed out.
The sticking point is that is there's no such thing as partial integrity. You either have it or you don't. Ditto for consistency. So if you see "Made in China" stamped on weapons used by terror sponsoring regimes, what are you supposed to do? Tell Wal-Mart to stop trading with China? And should we return to horse and buggy until we figure a way to cease dependence on oil imported from autocratic or totalitarian regimes? The most vexing question is how far a nation should take a principled stand if the stand pits the nation against much of the world.
Yet 9/11, 3/11 and Beslan testify that humanity no longer has a choice about confronting the point Bush brought out. We've got to find ways to bring foreign policy in line with the basic ideals of modern democratic civilization. This is because data show that democracies tend to refrain from hot war and don't create large numbers of citizens who export terrorism around the world. The question is how to proceed according to what the data indicate.
Russia's advice in this regard should be welcomed, yet we don't have the luxury of engaging in weighty discussion during peacetime. The inescapable truth is that Russia is selling arms and dual-use nuclear technology to governments that are active enemies of the United States.
Russia is not alone in doing trade with US enemies. They are following the lead of China and the most powerful nations in the European Union. So it's practicing a double standard to criticize Russia on the issue without doing the same with allies.
Pundita can understand Bush taking a softer public with US allies. However, the uniformly tough talk to Moscow that has emerged from Washington during the past year smacks of a programmatic approach. This translates to adopting 'attitude' in place of dialogue.
The Russians are known to respect a tough attitude. However, they're equally known for intellectualism and polemics. All these traits were on abundant display during Putin's 3-1/2 hour press conference.
Thus, if Washington's tough attitude is not accompanied by informed debate and dialogue, the Russians will continue to throw out polemics and rationalizations that go unanswered by the US because attitude isn't reply.
Also, Washington could do more to bring the implementation of foreign policy in line with policy rhetoric. Putin has invoked the US Civil War in defending Russia's right to subdue a breakaway republic--Chechnya. We don't need to agree with the analogy but US policy should recognize Russia's policy toward Chechnya.
If we want to allow a Chechen rebel leader to take asylum in the United States, that's one issue. However, Russia has designated the leader as a terrorist. If we claim a willingness to work with Russia in the war on terror, our policy should match our words to the extent we can accomplish this without betraying our principles. That means the US government should not have direct or indirect dealings with the Chechen leader and should not provide him with financial or any kind of material assistance.
If US intelligence on Chechnya is so poor that we're rationalizing assistance to the leader as means to get good intel on Chechnya and Russia--this is a problem with US intelligence gathering, one that shouldn't drag foreign policy into it.
Also, the US government should ensure that the Chechen leader knows the difference between taking asylum and using the US as a base of operations against Russia.
The same observations apply to US government dealings with the Russian oligarchs who recently attended a White House prayer breakfast. Those oligarchs are fugitives from Russian justice. There's an Interpol warrant out on them. There was no need to give them asylum in this country; they have asylum in Israel. Inviting them to the US and showcasing them at a White House function was a nasty way of telling Moscow that Washington doesn't think the oligarchs should be considered criminals.
Okay. But then Moscow doesn't think Tehran should be designated a terror-sponsoring regime. They don't think Tehran will convert the nuclear technology that Russia is selling them into nuclear weapons. They don't think the Iranian military will figure out how to convert the vehicle-mounted rocket launchers that Russia's selling Syria into shoulder-fired launchers.
If Washington disagrees with Moscow's thinking--well, if foreign policy is silly putty, what's there to disagree with? Why have policy, if whatever thoughts pop into your mind can shift policy on a dime?
If rationality comes from the point of a gun, right now the United States is a paragon of reason because our guns are bigger and in better working order than any other nation's. But the enemy is not only making use of guns. He's turning humans into bombs. To win against such an enemy requires a great deal of cooperation from other nations, to include Russia.
The concept of cooperation has a rational basis, which is grounded in consistently applied policy. If we expect cooperation we need more than a good rap about democracy. We need to bring the implementation of foreign policy in line with fine words about policy. Else, all the fine words are just jive.
.
Tuesday, March 1
Paw, a Revenuer's at the door. "Quick Abdullah, put on your tribal headdress!"
"Pundita, the more I learn about world affairs, the more it seems that most countries are frozen in time. No matter how much aid the developed countries have given, no matter how many grand development schemes carried out by organizations such as the World Bank, there seem to be intractable problems in many countries. In every case, I come across a discussion of deeply entrenched government corruption. The World Bank and other international institutions have been trying for decades to deal with this problem but there never seems to be any progress.
Ann in Cincinnati"
Dear Ann:
To understand the situation, realize first that it's a joke to place Bill Gates and Warren Buffet among the richest people in the world. They're just among the richest who file accurate tax returns. But Gates and Buffet probably don't even make it onto the list of the top one million of the world's richest people--these being the filthy rich who don't file tax returns or file a complete fiction.
It's not corruption per se that's the fundamental problem in Russia, Mexico, India, Egypt, and continue down the list. The problem is that the richest people in such countries pay much, much more in taxes than the rest--but the payments are off the books. The payments are made directly to officials.
The payments should not be seen as bribes, if you want to get a handle on the problem. They are a form of taxation and because taxation means representation, the richest people are the first in line with demands for how government money is to be spent.
To put all this another way, the lights always work in certain sections of Cairo. There is never a problem with traffic lights because for certain Egyptians the police simply back up traffic for miles and hours so the special cars can get to their destinations on time. There is never a problem with the water supply for certain Egyptians because the government digs special wells for them.
Same situation in Mexico. There's plenty of government money in Mexico. It's just that it doesn't get spent very much on education and health facilities. It gets spent mostly on projects that the biggest taxpayers want done--these being the taxpayers whose payments are not recorded.
Same situation in India. Yet millions of Indians are literally brain-damaged from drinking water from the city supplies--the Indians who don't die first from a host of diseases brought on by bad drinking water.
To give you some idea of just how bad the situation is, and how it undermines all the backbreaking labor and brain sweat of ordinary working stiffs the world over--
When the British laid out pipes for sewage and water in New Delhi, they installed the pipes right next to each other. That was standard practice in those days. However, by the time the British quit India the pipes had corroded so that the sewage mixed with the water supply. Boiling the water only kills a fraction of the pollutants. As to what was done to fix the pipes, nothing. Maybe during the past decade the Indian government got around to making some repairs in response to complaints by Western businesspeople. But the situation went on for decades untreated. That was in India's capital city.
Now try to imagine how Washingtonians would respond to the same problem in America's capital city. In fact, you don't have to imagine, if you followed the news about the discovery last year that lead had been getting into the water supply for years and that this information had been suppressed. Believe you me, the water bureaucracy scrambled to ward off the lynch mobs. That's because all Washingtonians have something approximating representation along with their taxation.
That's just what the majority of Indians, Russians and Mexicans, etc., don't have--even though they pay taxes. What they pay is not enough to give them adequate representation against the representation that the richest receive via under-the-table tax payments.
At the bottom of it all is not organized crime. At bottom is a system of doing business that stretches back to the ancient civilizations. That system is the clan system, which differs from tribalism in that marriage can be outside the tribe in a clan.
Marriages in a clan system are actually business mergers and/or business contracts. Say my clan controls the lumber supply in a region and your clan controls the trucking industry. We make a merger to have your trucks handle the lumber transport by marrying my daughter to your son. That's why you'll see arranged marriages in Muslim northern India and other parts between children. The marriage isn't consummated but there has to be a marriage ceremony to cement the contract.
Alert readers might ask if polygamy gives clans a huge business advantage. Of course. If you have one wife, you maybe only have five sons. If you have four wives cranking out 25 sons between them, you've got lots of merger material to play around with.
So all this talk about Islam under fire from the modern era is twaddle. It's the clan system that's under fire and Muslims know it. And they don't want to give up polygamy because there goes the big business advantage in the clan system. This is what many Muslims don't want to confront. They say, "We look after our own."
Yes, they have big charity, but in the modern era where dams and bridges and road systems and electrical grids cost billions upon billions, and where human population in a small region can run into the tens of millions, the charity system is completely inadequate. The clan model is simply not capable of dealing with the modern age.
Yet still they want it both ways. They can't have it both ways. They can't have all the benefits of modern life plus hold onto a way of doing business which subverts the type of government that makes modern life work. Fair taxation with adequate representation for the majority is the base of modern civilization's pyramid. The clan model, when mixed with off-the-books taxation, stands the pyramid on it's head. The patriarchs of the most powerful clans throw enough money at officials to ensure that their neighborhood has its own water well, the lights working, and the garbage picked up. The rest of the neighborhoods can go to hell in a handbasket.
The flip side of the same problem is how tribes can wreck the tax base in a country by invoking nomad status. To understand this part of the problem--
Knock! Knock!
"Who's there?"
Taxman.
"Taxman who?"
Taxman you haven't paid your taxes to the Iraqi government for the last 60 years.
"I'm not Iraqi. I'm Wigeemeosooombbi Nomad. We Wigeemeosooombbi have no fixed abode for the past 200,000 years."
But you remain fixed enough during part of the year to use the electricity and garbage collection service in Iraq. Pay up.
"If you're going to persecute me, give me a moment to collect my satellite dish, 10-speed blender, refrigerator, washing machine, microwave, television, toaster oven, computer, electric breadmaker, electric spice grinder and my goats and sheep and continue my nomadic wanderings. Unless you'd like to accept this gift of gold dinars for your dear mother."
That's why Gazi al-Yawer, the Iraq interim President, was furious with the Coalition military for not locking down the Iraqi borders after the Coalition toppled Saddam's regime. It's not just the security issue. It's also the taxation issue. Unless that issue is dealt with, Iraq is always pedaling backward, Saddam or no Saddam.
Al-Yawer is part of the wave of Middle Easterners who came to the West and figured out everything Pundita sketched above. They know you can't have a modern nation unless you have an adequate tax base, and that you can't have a tax base without a census. You can't have a census if a third of the population doesn't participate on the grounds that they're just in country to visit their cousins for a couple months.
The response from al-Yawer's tribe to his demand that everyone in Iraq get a national ID? They put out a contract on his life.
To summarize, the developing nations don't have the tax base to support adequate programs to provide services that you and I consider baseline necessities. In country after country, the tax base is not adequate to provide baseline services because so much of the tax collection is off the books and doesn't figure into the government's spending budget.
Now we arrive at the most interesting part of the problem. Let's back up and take a look at all those electric appliances owned by Wigeemeosooombbi Nomad. Some of the appliances are manufactured locally or close nearby, such as in India or China, and some are imported from the developed nations. Now step back and look at Wigeemeosooombbi's neighborhood. It looks like Bam, Iran before or after the big earthquake hit, which is to say it's situated somewhere between the Fifth Century and 12,000 BCE.
Why are those residents buying 10-speed blenders? Why don't they spend on the big stuff, such as a step up from a mud hut for a domicile and cement to build real roads? For the answer watch carefully, don't blink:
If the tax base is adequate, the government can use myriad means to stimulate the private business sector. One way is using taxes to build and maintain infrastructures that allow private industry to take root and grow. For example, think of the US federal highway program, which interstate truckers use to deliver goods. But if much of the tax money is paid off the books to officials, what can the individual official do with that bribe money? Even if the bribe equates to a few thousand dollars, that's not enough to build a road system.
What the official can do with the money is start a very small business, which often turns out to be a merchandise sales outlet/import business, which in turn is a money laundering scheme. That's why you can go to the most remote regions anywhere in the poverty-stricken world and find a bazaar around every bend selling anything you can get at Best Buy. If the blender you want is not in stock, give them a week to special order it.
But all these electric chachka sales outlets are not going anywhere. They are not growing the tax base enough to fuel serious business development. The result? Governments favor the socialist economic model, and depend on low-cost development bank loans to make up the shortfall--at least enough to keep the nation from sinking into the sea.
So the next time you hear a discussion about corruption in the developing world, remember that government corruption is 'inadequate tax base' spelled backward.
.
Ann in Cincinnati"
Dear Ann:
To understand the situation, realize first that it's a joke to place Bill Gates and Warren Buffet among the richest people in the world. They're just among the richest who file accurate tax returns. But Gates and Buffet probably don't even make it onto the list of the top one million of the world's richest people--these being the filthy rich who don't file tax returns or file a complete fiction.
It's not corruption per se that's the fundamental problem in Russia, Mexico, India, Egypt, and continue down the list. The problem is that the richest people in such countries pay much, much more in taxes than the rest--but the payments are off the books. The payments are made directly to officials.
The payments should not be seen as bribes, if you want to get a handle on the problem. They are a form of taxation and because taxation means representation, the richest people are the first in line with demands for how government money is to be spent.
To put all this another way, the lights always work in certain sections of Cairo. There is never a problem with traffic lights because for certain Egyptians the police simply back up traffic for miles and hours so the special cars can get to their destinations on time. There is never a problem with the water supply for certain Egyptians because the government digs special wells for them.
Same situation in Mexico. There's plenty of government money in Mexico. It's just that it doesn't get spent very much on education and health facilities. It gets spent mostly on projects that the biggest taxpayers want done--these being the taxpayers whose payments are not recorded.
Same situation in India. Yet millions of Indians are literally brain-damaged from drinking water from the city supplies--the Indians who don't die first from a host of diseases brought on by bad drinking water.
To give you some idea of just how bad the situation is, and how it undermines all the backbreaking labor and brain sweat of ordinary working stiffs the world over--
When the British laid out pipes for sewage and water in New Delhi, they installed the pipes right next to each other. That was standard practice in those days. However, by the time the British quit India the pipes had corroded so that the sewage mixed with the water supply. Boiling the water only kills a fraction of the pollutants. As to what was done to fix the pipes, nothing. Maybe during the past decade the Indian government got around to making some repairs in response to complaints by Western businesspeople. But the situation went on for decades untreated. That was in India's capital city.
Now try to imagine how Washingtonians would respond to the same problem in America's capital city. In fact, you don't have to imagine, if you followed the news about the discovery last year that lead had been getting into the water supply for years and that this information had been suppressed. Believe you me, the water bureaucracy scrambled to ward off the lynch mobs. That's because all Washingtonians have something approximating representation along with their taxation.
That's just what the majority of Indians, Russians and Mexicans, etc., don't have--even though they pay taxes. What they pay is not enough to give them adequate representation against the representation that the richest receive via under-the-table tax payments.
At the bottom of it all is not organized crime. At bottom is a system of doing business that stretches back to the ancient civilizations. That system is the clan system, which differs from tribalism in that marriage can be outside the tribe in a clan.
Marriages in a clan system are actually business mergers and/or business contracts. Say my clan controls the lumber supply in a region and your clan controls the trucking industry. We make a merger to have your trucks handle the lumber transport by marrying my daughter to your son. That's why you'll see arranged marriages in Muslim northern India and other parts between children. The marriage isn't consummated but there has to be a marriage ceremony to cement the contract.
Alert readers might ask if polygamy gives clans a huge business advantage. Of course. If you have one wife, you maybe only have five sons. If you have four wives cranking out 25 sons between them, you've got lots of merger material to play around with.
So all this talk about Islam under fire from the modern era is twaddle. It's the clan system that's under fire and Muslims know it. And they don't want to give up polygamy because there goes the big business advantage in the clan system. This is what many Muslims don't want to confront. They say, "We look after our own."
Yes, they have big charity, but in the modern era where dams and bridges and road systems and electrical grids cost billions upon billions, and where human population in a small region can run into the tens of millions, the charity system is completely inadequate. The clan model is simply not capable of dealing with the modern age.
Yet still they want it both ways. They can't have it both ways. They can't have all the benefits of modern life plus hold onto a way of doing business which subverts the type of government that makes modern life work. Fair taxation with adequate representation for the majority is the base of modern civilization's pyramid. The clan model, when mixed with off-the-books taxation, stands the pyramid on it's head. The patriarchs of the most powerful clans throw enough money at officials to ensure that their neighborhood has its own water well, the lights working, and the garbage picked up. The rest of the neighborhoods can go to hell in a handbasket.
The flip side of the same problem is how tribes can wreck the tax base in a country by invoking nomad status. To understand this part of the problem--
Knock! Knock!
"Who's there?"
Taxman.
"Taxman who?"
Taxman you haven't paid your taxes to the Iraqi government for the last 60 years.
"I'm not Iraqi. I'm Wigeemeosooombbi Nomad. We Wigeemeosooombbi have no fixed abode for the past 200,000 years."
But you remain fixed enough during part of the year to use the electricity and garbage collection service in Iraq. Pay up.
"If you're going to persecute me, give me a moment to collect my satellite dish, 10-speed blender, refrigerator, washing machine, microwave, television, toaster oven, computer, electric breadmaker, electric spice grinder and my goats and sheep and continue my nomadic wanderings. Unless you'd like to accept this gift of gold dinars for your dear mother."
That's why Gazi al-Yawer, the Iraq interim President, was furious with the Coalition military for not locking down the Iraqi borders after the Coalition toppled Saddam's regime. It's not just the security issue. It's also the taxation issue. Unless that issue is dealt with, Iraq is always pedaling backward, Saddam or no Saddam.
Al-Yawer is part of the wave of Middle Easterners who came to the West and figured out everything Pundita sketched above. They know you can't have a modern nation unless you have an adequate tax base, and that you can't have a tax base without a census. You can't have a census if a third of the population doesn't participate on the grounds that they're just in country to visit their cousins for a couple months.
The response from al-Yawer's tribe to his demand that everyone in Iraq get a national ID? They put out a contract on his life.
To summarize, the developing nations don't have the tax base to support adequate programs to provide services that you and I consider baseline necessities. In country after country, the tax base is not adequate to provide baseline services because so much of the tax collection is off the books and doesn't figure into the government's spending budget.
Now we arrive at the most interesting part of the problem. Let's back up and take a look at all those electric appliances owned by Wigeemeosooombbi Nomad. Some of the appliances are manufactured locally or close nearby, such as in India or China, and some are imported from the developed nations. Now step back and look at Wigeemeosooombbi's neighborhood. It looks like Bam, Iran before or after the big earthquake hit, which is to say it's situated somewhere between the Fifth Century and 12,000 BCE.
Why are those residents buying 10-speed blenders? Why don't they spend on the big stuff, such as a step up from a mud hut for a domicile and cement to build real roads? For the answer watch carefully, don't blink:
If the tax base is adequate, the government can use myriad means to stimulate the private business sector. One way is using taxes to build and maintain infrastructures that allow private industry to take root and grow. For example, think of the US federal highway program, which interstate truckers use to deliver goods. But if much of the tax money is paid off the books to officials, what can the individual official do with that bribe money? Even if the bribe equates to a few thousand dollars, that's not enough to build a road system.
What the official can do with the money is start a very small business, which often turns out to be a merchandise sales outlet/import business, which in turn is a money laundering scheme. That's why you can go to the most remote regions anywhere in the poverty-stricken world and find a bazaar around every bend selling anything you can get at Best Buy. If the blender you want is not in stock, give them a week to special order it.
But all these electric chachka sales outlets are not going anywhere. They are not growing the tax base enough to fuel serious business development. The result? Governments favor the socialist economic model, and depend on low-cost development bank loans to make up the shortfall--at least enough to keep the nation from sinking into the sea.
So the next time you hear a discussion about corruption in the developing world, remember that government corruption is 'inadequate tax base' spelled backward.
.
Wednesday, February 23
The Kyoto treaty and a steamy situation
"Pundita my dear, don't you think Bush could have thrown Europe a bone and signed onto Kyoto? The treaty is so ineffective it wouldn't do any harm to go along with it and besides the US is now missing out on the hot action in emissions credits trading. The trade is going to generate big business, even bigger than the action from the UN Oil for Food program.
[Signed] Boris in Jackson Heights"
Dear Boris:
We appreciate your sarcasm but going along with Kyoto is anything but harmless. Kyoto represents the institutionalization of what's known in the trade as "dartboard" research. But this isn't just bad government-funded medical research we're talking about. This is an issue humanity can't afford to get wrong, and we can't afford to piddle around for a century to come up with the right answers.
Global warming is a fact. But we don't know why the globe is warming and whether the phenomenon is within human control in any significant way. We don't know how much of various human activity, such as industrial fishing, contributes to warming. We have many puzzle pieces but we haven't constructed a good working hypothesis that would allow us to integrate all the data that could possibly relate to presumed reasons for global warming.
Instead, we've seized on one piece of the puzzle--industrial emissions--and diverted billions of dollars to creating solutions that on one side might be worse than the problem, and on other side are completely ineffective.
In the one camp, which represents solutions President Bush is pushing, we've got a bunch of car companies investing billions in hydrogen fuel cell vehicles. But has anybody done a study on the environmental impact of the steam generated by gadzillions of hydrogen fuel cells in operation?
At least one study done years ago on the impact of water from jet streams suggested that the cumulative effect of the water released into the atmosphere has a significant impact on the weather.
I don't think the study was pursued because it isn't sexy science; i.e., the line of research doesn't attract big government bucks, and because what airline manufacturer and carrier wants to read that kind of research?
But before billions more are invested, we need to figure out if steam producing solutions are taking humanity from the frying pan into the fire.
Now we turn to the Kyoto camp. Just three countries not under the Kyoto treaty--China, India and US--between them are building 850 coal-fired plants that will spew up to five times as much carbon dioxide into the atmosphere as the Kyoto treaty is meant to reduce. This is not counting the emissions from vehicles in China and other developing countries. That's a huge consideration because they're now building, importing and buying vehicles in China and India at the rate of a zillion per minute.
And the administration and monitoring of the Kyoto agreement is so hideously complicated that it calls for yet another massive supranational bureaucratic construct with the attendant waste in resources and, as you hinted with a sledgehammer, a great opportunity for graft.
And then there is the thundering herd of elephants in the living room, which is that China is looming as the biggest problem with regard to industrial emissions, and China doesn't want to sign the Kyoto accord.
So there is a Marx Brothers quality about Kyoto. It solves nothing, goes nowhere, and generates tons of paper (from trees) that are unread by the aides whose job it is to plow through data for their bosses in government. Yet this Nothing has become a foreign policy football and is seriously discussed at state dinners.
.
[Signed] Boris in Jackson Heights"
Dear Boris:
We appreciate your sarcasm but going along with Kyoto is anything but harmless. Kyoto represents the institutionalization of what's known in the trade as "dartboard" research. But this isn't just bad government-funded medical research we're talking about. This is an issue humanity can't afford to get wrong, and we can't afford to piddle around for a century to come up with the right answers.
Global warming is a fact. But we don't know why the globe is warming and whether the phenomenon is within human control in any significant way. We don't know how much of various human activity, such as industrial fishing, contributes to warming. We have many puzzle pieces but we haven't constructed a good working hypothesis that would allow us to integrate all the data that could possibly relate to presumed reasons for global warming.
Instead, we've seized on one piece of the puzzle--industrial emissions--and diverted billions of dollars to creating solutions that on one side might be worse than the problem, and on other side are completely ineffective.
In the one camp, which represents solutions President Bush is pushing, we've got a bunch of car companies investing billions in hydrogen fuel cell vehicles. But has anybody done a study on the environmental impact of the steam generated by gadzillions of hydrogen fuel cells in operation?
At least one study done years ago on the impact of water from jet streams suggested that the cumulative effect of the water released into the atmosphere has a significant impact on the weather.
I don't think the study was pursued because it isn't sexy science; i.e., the line of research doesn't attract big government bucks, and because what airline manufacturer and carrier wants to read that kind of research?
But before billions more are invested, we need to figure out if steam producing solutions are taking humanity from the frying pan into the fire.
Now we turn to the Kyoto camp. Just three countries not under the Kyoto treaty--China, India and US--between them are building 850 coal-fired plants that will spew up to five times as much carbon dioxide into the atmosphere as the Kyoto treaty is meant to reduce. This is not counting the emissions from vehicles in China and other developing countries. That's a huge consideration because they're now building, importing and buying vehicles in China and India at the rate of a zillion per minute.
And the administration and monitoring of the Kyoto agreement is so hideously complicated that it calls for yet another massive supranational bureaucratic construct with the attendant waste in resources and, as you hinted with a sledgehammer, a great opportunity for graft.
And then there is the thundering herd of elephants in the living room, which is that China is looming as the biggest problem with regard to industrial emissions, and China doesn't want to sign the Kyoto accord.
So there is a Marx Brothers quality about Kyoto. It solves nothing, goes nowhere, and generates tons of paper (from trees) that are unread by the aides whose job it is to plow through data for their bosses in government. Yet this Nothing has become a foreign policy football and is seriously discussed at state dinners.
.
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