Ethnic Character vs Democratic Principles

The first two articles in the Nov/Dec Foreign Affairs focus on Israel. The second, by Ronald Krebs, make an astute observation on p. 11 that Israel cannot rule over a large non-Jewish population “without undermining either its Jewish character or its democratic principles.”

Ethnic character vs democratic principles is not conflict. Germany faces it with the large influx of Turkish “gastarbeiters” – guest workers – that make Germans fear they are overwhelming the native culture. The French face it with the large North African population throughout the country, where “being French” is something you have to be born with.

The United States has faced this same question over and over. Though you do not have to be born in the United States to “be American,” that was not always the case. The “Know Nothing Party” of the mid-1800s was vehemently against immigrants, which at that time was the Irish. Late 19th century laws restricted the rights of Chinese and Asians – even native-born citizens. Native born black Americans did not have full rights in practice until the the 1970′s.

In all cases over time, the Ethnic White Majority gave way to rule by Democratic Principles, and that is what made the difference.

How will things turn out in Germany and France? No doubt over time, there will be an assimilation, though it may take another generation or two. But Israel does not have a generation to wait.

The world can only hope that Israeli politicians and citizens will recognize the dangers in continuing support for ethnic characteristics, and come down on the side of democratic principles. Only then can a long-lasting peace take hold in the Middle-East.

**NB: If you want some quick insight into the situation, pick up the Nov/Dec Foreign Affairs.

 

Central Banks, God Love ‘em!

From The Financial Times comes this analysis of current practices of Central Banks:

http://blogs.ft.com/gavyndavies/2012/01/08/the-unprecedented-behaviour-of-the-central-banks/#axzz1iyjFMFwX

Central Banks are  – to be blunt – “printing money” at an extraordinary rate, and yet inflation is not happening.  “Consequently, the correlation between the monetary base and the rate of inflation, which usually works in both directions, has broken down.” At least, no inflation yet.  Read the article to see the charts.

The goal has been to “rescue the banking system and avoid deflation.” Without the support of government-central banks, the entire system might have collapsed. This was done by central banks purchasing goverment bonds, rather than raising money through the money market mechanisms which had dried up.  The structure and financial frameworks seem to have been fundamentally changed.  So far, so good.

Does it matter? It does help to remind us that the world’s financial system is not a “machine” built of iron and steel. It is a “concept” of ideas and non-tangible agreements about what people will value, and how that value can be traded as if it were real.  Does this change in infrastructure really matter?  Not as long as it works.

We only have several hundreds years experience in finance, which is not long enough to understand all the possibilities. I remember that in the 1960s Lake Erie hit “unprecedented” high water levels, and people scrambled to re-do zoning and build flood walls. Water level data had been collected for over a hundred years, and this was termed “a hundred year event.” It was expected that the basic data was correct for all times.

The next year, Lake Erie hit an all-time low.

100 years of data are not enough to understand a complex system.

 

The Hope of Audacity

The president’s latest speech at the University of Richmond was again disappointing, playing to the audience but not offereing anything substantive.

As Obama said: nothing in the Jobs Acts was “radical”, the ideas were supported by both parties, it will create more jobs for ‘everybody’, and will rebuild our “crumbling” infrastructures. He reflected back the worries and hopes of his audience (and even got an amen at one point), pointed out that District politicians had spent the summer legitimately “fussing over the budget”, then talked about his ambitious plan. Reduce the deficit, be fair to everybody, make businesses more efficient, build a stronger economy. He said he was optimistic.

When the president accepted the Democratic nomination at Mile High Stadium in 2008, he was a different person.

The economic failure was a “direct result of a broken politics in Washington and the failed policies of George W. Bush”. He called out his opponent “on health care and education and the economy” saying, “Senator McCain has been anything but independent, ” because “John McCain doesn’t get it.”

Candidate Obama said that business has a responsibility to the American people to create jobs, government must do the things “which we cannot do for ourselves.” He would stop tax breaks to corporations, end the dependence on Middle East oil, and give people without health insurance the same coverage as members of Congress. “America,” he challenged, “now is not the time for small plans.”

That speech and those ideas were audacious. Before the election, Candidate Obama gave people hope that things would be different, that he would be different, that he would usher in a new era of politics that would be different. That has not happened.

Instead, we saw a slow reversion to politics as usual. While under full democratic control, both the Senate and the House both passed healthcare bills. The President chose to take the weaker Senate bill and align the House, rather than taking the comprehensive House bill and bring the Senate around. Democratic Congressman Zack Space voted against the final bill because “Congress could have done better.” But Democratic leaders chose not to be audacious and risk a filibuster.

Instead, it was Bill Clinton who was now audacious during the “fuss” over the debt ceiling, saying Obama could simply ignore it, continue to pay the bills, and let the courts sort it out. Rather than work it out behind closed doors, bring the fight out into the open and let the world watch.

In the recent budget struggles over the past years, President Obama and Democratic leaders again let the implied threat of filibuster dilute their actions. The Bush tax cuts were renewed with little long-term gain. Where was the audacity to force Republicans to actually  filibuster on the floor of the Senate, and let the American people watch elected officials for days defend tax breaks for the Waltons and the Kochs? An audacious moment, lost.

In this latest speech the words were the same, the heart-rending examples were there, the empathy was felt, but it all rang hollow based on the reality of the past three years. Ambitious is not audacious. “Nothing radical” is not audacious. Fair, efficient, and optimistic are all good, but none are audacious. People who supported Obama in 2008 continue to have hope of audacity, hope that the audacious man they elected will at some point emerge.

Before his nomination, a friend asked me to name Obama’s key defining characteristic. There were too many options: progressive, “first black president”, audacious, kind, open — the list could go on. He shook his head and told me, “He’s a Chicago politician.”

That is an insight we should have should have understood from the beginning.

 

Malcolm X the Finale

Malcolm X describes in detail his Hajj experience in 1964. Arriving as an individual Muslim black man from the United States, he is an anomaly, and everyone wants to meet him. Based on news reports over the past few years, many people know who he is – and recognize him – which makes him even more popular. He is amazed that many of the “white men” who are Muslims do not act like “white men,” and he decides that global Islam has produced real brotherhood. He has grown beyond the Nation of Islam and the teachings of Elijah Muhammad.

Yet at the time of his Hajj to Mecca, slavery in Saudi Arabia (and Mecca) had only been abolished two years earlier in 1964. Like the United States, Saudi slaves were primarily black Africans whose ancestors had been forcibly sold into the Arabian penisula against their will.

Even today, foreign workers in Saudi Arabia are treated harshly. Passports must be handed over to the employer/sponsor so these workers are not free to leave the country if mistreated. Many female household workers report they have been raped, beaten and tortured, so much so that Indonesia has recently banned its citizens from working in Saudi Arabia. [http://www.hudson-ny.org/2347/saudi-beheading-grandmother] Though both Saudi Arabia and Indonesia are Muslim countries (the reason workers from Indonesia and Pakistan are preferred) the Saudis embrace a racism where they are at the top.

Malcolm X had his exhilirating experiences with the wealthy leaders of Arab and African nations, not the peasants on the streets and farms. He was treated as a celebrety, wined and dined (no actual alcohol was consumed), and asked to speak at universities and social clubs. Compare that to his experience in the United States, where he was seen as the leader of a criminal enterprise.

From his writings, X reminds me of a young person, fascinated with learning things that are new, accepting of things that are different, growing and changing. Ghandi seemed to have been that way, too. Doing what was correct in that moment, not worrying if he was “consistent” over time.

Alex Haley’s Afterword explains how the autobiography was written over two years. As it finished, Malcolm X and Elijah Muhammad were parting ways. Haley and X made a conscious decision not to rewrite the earlier chapters to reflect his new views, but to leave them representing the man he had been at the time. An excellent decision which brings an immediacy to the book.

It is tempting to project what his life would have been had he not been murdered. How would this man have changed the course of civil rights? Would he have helped or hindered? Or would he eventually gone off and got a law degree, as he told his high school teacher so many years before. He would have been a good attorney. Or whatever else he put his mind to.

 

Sucking Sound Redux

Where is Ross Perot when we need him?

Perot focused his 1992 presidential campaign on reducing the Federal deficit put in place by President Reagen and his congressional supporters, which helped win Clinton the White House. Then Perot campaigned against the “giant sucking sound” of jobs going to Mexico because of the North American Free Trade Agreement. We now have a giant sucking sound that outdoes both of Perot’s issues : the sound of the wealthy sucking money, jobs, and security from average Americans.

Not since 1929 has gap between the wealthy and the rest of us has been so large, and we know what happened then. Not until it was widely recognized that demand was lacking, and only government could raise demand in the short term, did things improve.

Despite loud and emotional appeals to “faith-based economics”, the wealthy (including large, wealthy multinational corporations) do not collect money to spend it; they hold on to it until they see a reason to invest. That’s the problem today. There is plenty of money “in circulation” but so much is being held in cash by the wealthy, that the money does not “circulate,” requiring the government to pump more funds into the economy to get it moving.

On the other hand, imagine if these wealthy were taxed at a reasonable level (can you say, eliminate the Bush tax cuts) and that money passed on to the rest of us, who actually spend money every day for things we need. As Joe collects his salary he buys bread at the bakery, gets a haircut at the barber, has his oil changed at the service station. The baker, barber, and gas station owner then take his money and buy their own groceries, grooming, and services. Joe’s salary does not sit in a bank account waiting for “better times.” And that is the problem in a nutshell.

One way to measure this disparity is to compare the highest earners with minimum wage. 20 years ago the ratio was 40:1; today it is more than 800:1. Why the difference? The standard homily is that you need to pay top dollar to get the right leadership, but that is not true. According to Reuters, “Jiang, chairman of Industrial and Commercial Bank of China, made just $234,700 in 2008. That’s less than 2 percent of the $19.6 million awarded to Jamie Dimon, chief executive of the world’s fourth-largest bank, JPMorgan Chase & Co.”

Out-of-control CEO salaries in the United States result from passivity among the wealthy stakeholders who exchange responsibilites across multiple boards-of-directors. Then when these high-paid managers fail catastrophically, U.S. taxpayers spend money to bail them out. Without penalty. And then these same U.S. taxpayers are told that corporations need more money to re-start the economy. Do people even listen to what they are saying?

There can only be two final results. The most likely option is that voters will eventually wake-up and realize that “fear words” and “scare tactics” around “socialism” and “tax breaks create wealth” are simply marketing statements without substance. The other option is that this trends continues into the future until our nation is cleaved into two societies, the Morlocks and the Eloi.

You decide which is living off the other.

 

What Do You Expect Him to Do? Bashar in a Bind.

A week ago Thursday U.S. SecState warned Syrian President Bashar al-Asaad that “his legitamacy had almost run out,” that the Syrian government would be held accountable for their actions, and that activists should be given a voice in governing. At the same time, Syrian activists called for al-Asaad to step down and commence democratic reforms. Clinton stopped short of being so blunt.

There is certainly no dispute that Syrian military forces have been killing civilians who call for a change in government. Like Egypt, Syria has been a dictatorship for more than 30 years. But unlike the Egyptian army which put Mubarak in place and allowed him to be forced out, the Syrian military does not believe it can survive a shift to democracy.

And it’s not clear what Bashar al-Asaad can do. Dictatorships are never “one man rule,” but require a large number of elites in positions of power and responsibility to comply with the dictator’s “program.” Keeping these elites happy is the dictator’s main job, if he wants to keep his position. And if the elites decide to throw him overboard (like Mubarak) then he is done.

The Bashar al-Asaad has always wanted better relations with the U.S. Bbut interests do not align and Syria has options. Syria has found other partners with aligning interests, especially neighbors Iran, Turkey, and Russia who also find themselves at a distance from U.S. policy.

The West sees the current protests as legitimate leading to a different form of governance, as in Egypt and Tunisia. Syria’s ruling elites see these as a prelude to civil war, as in Libya or Iraq or Somalia, because they do not plan to cede power gently. The House of al-Asaad intends to survive.
(per report from the NYTs http://www.nytimes.com/2011/05/11/world/middleeast/11makhlouf.html)

Does this Syrian power structure believe they are on the wrong side of history? Of course not, no more than the Cheney power structure that brought us war in Iraq, or the banking power structure that contines to profit off the beneficence of the American people. They will not go until forced to go.

Bashar has the option to walk away from his family, his position, his wealth or to stay and make the best of it. Which option best aligns with his interests?

 

China Issues Redux

China is once again responding with what it does best – lots of words and indignation. The best defense is a strong offense. And China is taking offense.

First, ChinaDaily reports that Google has no “published evidence” that the recent gmail hacking originated in the China city of Jinan, site of a Chinese military reconnaissance office. Once the evidence is published then there will be many, many excuses about why the data could have been tampered, so the words will go on and on and on …

Yet this is not the first time that cyber-attacks have been shown to originate within the PRC. Last year, Google email addresses of Chinese activists were stolen from Google. Strangely enough, some attacks also occur during working hours in China. Can you say “circumstantial evidence” is building?

The Pentagon has said a cyber-attack from another country could be considered an act of war, and might respond with real-world weapons that break things. The question is, does attacking Google (or General Motors or Goldman-Sachs) count as an attack against the U.S. of A?

Second, talking about real-world war, SecDef Gates said that China is not competing with the U.S. “across the full range of military capabilities.” Sure, China is building aircraft carriers, the best way to project power around the world. And, sure, China is building a deep-water port in Gwadur, Pakistan as a naval base, but only to protect the transfer of oil. And, sure, the U.S. continues to sell arms to Taiwan … well, just because.

Aircraft carriers in themselves are not a problem. Britain has them, and no one has said the Ark Royal carrier group is a cause for concern between the two nations. To paraphrase Alex Wendt, why are 5 nuclear weapons a problem in the Democratic People’s Republic of Korea a problem, but 500 nuclear weapons in the hands of the British are not? We all too often overlook the obvious, that relationships are the source of issues, not physical things.

Third, on the economic front, ChinaDaily reports that the People’s Bank of China will “continue to implement a prudent monetary policy this year.” This is China’s central bank that controls China’s monetary policy, similar to the Federal Reserve in the U.S. At the same time, several bloggers have been calling China’s growth under this monetary policy a “Ponzi scheme.” That is, late investors are paying off early investors, without any real value being created.

China (that is, Yu Yongding, a former advisor to the PBoC) has responded by saying that the U.S. Treasury market is a Ponzi scheme. Since the U.S. simply prints money to purchase U.S. treasury, creating wealth out of nothing, this new money pays off the old debts without creating value. He implies that China should let the Chinse renminbi appreciate, which would cause U.S. T-bills to fall in value.

Overall, the U.S. – China relationship is like a bad marriage, with name calling, threats, and subtle “deniable” attacks (of course I didn’t burn your dinner on purpose, you didn’t fix the stove). Unlike our relationship with the U.K. which is a marriage made in heaven.

Or rather, a marriage that has been worked at over the past 100 years. It started as secession in 1776, escalated to war in 1812 over economic issues, then Britain sided with the Confederacy because it suited their interests. As U.S. and British interests aligned in the early 20th century, the shared language and culture made a close relationship possible.

And the close relationships the U.S. has with Japan and Germany shows that even a brutal war can be overcome with shared interests and a willingness to work for a common solution.

Is China an enemy of the U.S.? Doubtful. But at this point in time the interests of the two countries do not align. But no worries, just wait a while.

 

How They Did It

Here is my view on how the U.S. SpecOps killed bin Laden. Info is taken from open source and standard operating procedures.

Launch
A blackhawk has a time between refueling of about 2.5 hours and a top speed of about 120 miles an hour. That mean a range of up to 300 miles. Though Afghanistan is a big place, most air ops launch out of Jalalabad so it’s likely that’s where the two blackhawks started. Abbottabad is only 140 miles east of J-bad.

Travel
A friend of mine believes that the Pakistani army allowed the strike, but denied responsibility due to the response it would bring within Pakistan. (see randallhmiller.com). I see a different scenario.

United States aircraft cross the Pakistan border every day, generally without making news. In fact, the “border” is the so-called Durrand Line, which Pakistan has never agreed to as a border, so that excursions into Afghanistan could be considered legal. Now its playing out the other direction.

While Pakistan has a modern air defence system, it is likely that two U.S. blackhawks flying nap-of-the-earth could pentrate to Abbottabad, due to the constant air traffic over the area.

Whether or not the Pakistani army supported this attack can be judged by the strength of the response. If there are protests, then probably was agreed. If diplomatic ties are broken and the U.S. embassey isolated, then probably not.

The Attack
Depending on the situtation you can hear a blackhawk five minutes out, which would have been best case warning. But with regular helicopter traffic, who would notice until they hovered above the compound. News reports said that one helo had mechnical difficulties. Each helo produces a large figure-8 shaped wind which means about 500 feet of separation for full safety. The compound was probably much smaller than that, so as each unloaded one may have been starved of air and went down as the team slid in. Fortunately, no U.S. casulties were reported.

It is significant that news reports say he was “shot in the head.” If there had been armed resistance the bin Laden would have been shot all over. bin Laden said he would not be taken alive. He may have appeared in a suicide vest (or what appeared to be a suicide vest). With one hand on the trigger he may have begun to pontificate. To stop a suicide bomber from detonating, shoot him in the head. His son may have tried to defend him and was killed. If he was not wearing a suicide vest then I leave it to your imagination why he was shot in the head. (think Pablo Escobar). It was in the best interests of both bin Laden and the United States that he was not captured alive.

After the initial assault the team no doubt spent time looking for documents, computers, etc. The helicopter that went down was destroyed, and the two team left on the remaining helo. A blackhawk can carry 8 to 20 operators, depending on mission and equipment. Since one helo was able to return two teams plus bodies and equipment found, the full team size was probably around a dozen shooters.

The Return
News reports said bin Laden was buried at sea after someone performed Muslim funeral rites. There is a large lake formed by Tarbela Dam where the body could have been dumped, risking that it would be recovered in the future. A true burial at sea would have required a flight from Abbottabad to the Indian Ocean, a distance of 800 miles. Or the body could have been returned to Jbad, loaded on a plane, and taken over the ocean. My guess is that the body is still on ice somewhere.

Aftermath
In the United States, bin Laden’s death makes no difference. It’s like killing an old, retired mafia don. This lack of real impact produces articles like this: Country Stars React to the Death of Osama bin Laden. (http://www.theboot.com/2011/05/02/country-stars-osama-bin-laden-dead). It was still a slow news day.
There was a $25million bounty on bin Laden’s head. Did someone claim it?

 

My New Best Friend

Ibuprofen – my drug of choice, good for all that ails ye. If it was a woman I would marry her. If it were a man I would bear his children.

This non-styeroidal anti-inflammatory drug (NSAID as they are called) is included in the World Health Organizations list of “essential drugs” for a healthcare system. It was patented exactly 50 years ago by the Boots Group (which also runs the UK Boots Pharmacies).

So how does ibuprofen compare to my second drug of choice, aspirin? Powder from the willow was used as far back as the ancient Greeks for treatment of headaches and fever. The active ingredient, named salicylic acid, was isolated in the early 1800s by French and Italian chemists, including a method to “buffer” it with other compounds to reduce stomach upset. Acetylsalicylic acid was rediscovered by a chemist at Bayer, which patented the product in 1900.

Each in its own way, limits the production of prostaglandin, the compound which produces the feeling of pain in a headache or inflamation. In addition, aspirin thins the blood so is useful as a prophylactic against heart disease, while ibuprofen tends to be more effectivein reducing inflamation, which in turn reduces pain.

My love of ibuprofen is from the day after a heavy work out: sore, stiff, aching and then an hour later I can get on with life. my non-habit forming best friend.

 

The Giant Sucking Sound Redux

Where is Ross Perot when we need him? Perot focused his 1992 presidential campaign on reducing the Federal deficit put in place by President Reagen and his congressional supporters, which helped win Clinton the White House. Then he campaigned against the “giant sucking sound” of jobs going to Mexico because of the North American Free Trade Agreement. We now have a giant sucking sound that outdoes both of Perot’s issues : the sound of the wealthy sucking money, jobs, and security from average Americans.

Not since 1929 has gap between the wealthy and the rest of us has been so large, and we know what happened then. Despite loud remonstrations to the opposite, the wealthy (including large, wealthy multinational corporations) do not collect money to spend it; they hold on to it. That’s the problem today. There is plenty of money “in circulation” but so much is being held in cash by the wealthy, that the money does not “circulate,” requiring the government to pump more funds into the economy to get it moving.

On the other hand, imagine if these wealthy were taxed at a reasonable level (can you say, eliminate the Bush tax cuts) and that money passed on to the rest of us, who actually spend money every day for things we need. As Joe collects his salary he guys bread at the bakery, gets a haircut at the barber, has his oil changed at the service station. The baker, barber, and gas station owner then take his money and buy their own groceries, grooming, and services. Joe’s salary does not sit in a bank account waiting for “better times.” And that is the problem in a nutshell.

One way to measure this disparity is to compare the highest earners with minimum wage. 20 years ago it was 40:1; today it is more than 800:1. Why the difference? The standard homily is that you need to pay top dollar to get the right leadership. Not true. According to Reuters, “Jiang, chairman of Industrial and Commercial Bank of China, made just $234,700 in 2008. That’s less than 2 percent of the $19.6 million awarded to Jamie Dimon, chief executive of the world’s fourth-largest bank, JPMorgan Chase & Co.” Instead, CEO salaries in the United States result from passivity among the wealthy stakeholders who exchange responsibilites across multiple boards-of-directors. Then when these high-paid managers fail catastrophically, U.S. taxpayers need to bail them out. Without penalty.

There are two options for the one final result. The most likely option is that voters will eventually wake-up and realize that “fear words” and “scare tactics” around “socialism” and “tax breaks create wealth” are simply marketing statements without substance. The other option is that this trends continues into the future until our nation cleaves into two societies, the Morlocks and the Eloi.

You decide which is the dark one, and which is the stupid.