The End Of Pacifism...

Not so much as the end of it, but rather the end goal of modern pacifism, of stripping politicians their ability to make war. Not taking away the troops, not turn swords into plowshares (or gatlings into combines), but rather enervating the political will to fight.

This is depressing reading.

Let's take a closer look...this is not a fisking, but rather a reverse fisking.

Last week Gordon Brown announced a date for Britain's withdrawal from Iraq. Most troops will be back in time for a spring general election. The prime minister posed with soldiers and expressed his sorrow over yet more fatal casualties in Afghanistan. He did not dwell on Britain's humiliation in Basra, nor mention that this is the most inglorious withdrawal since Sir Anthony Eden ordered the boys back from Suez.

And indeed this is inglorious: the British experience in Iraq has been thoroughly mucked-up. Not the soldiers, but rather the politicos who have no concept of what it is that they have squandered.

The fundamental cause of the British failure was political.

We could stop right there: that is everything. As Clausewitz said, fighting a war is nothing but politics with other means.

Tony Blair wanted to join the United States in its toppling of Saddam Hussein because if Britain does not back America it is hard to know what our role in the world is: certainly not a seat at the top table. But, for all his persuasiveness, Blair could not hold public opinion over the medium term and so he cut troop numbers fast and sought to avoid casualties. As a result, British forces lost control of Basra and left the population at the mercy of fundamentalist thugs and warring militias, in particular Moqtada al-Sadr's Mahdi Army.

This wasn't merely wrong, it was a mistake. Not the involvement, but leaving the population you are there to defend at the mercy of evil men.

The secondary cause of failure was a misplaced British disdain for America, shared by our politicians and senior military. In the early days in Iraq we bragged that our forces could deploy in berets and soft-sided vehicles while US forces roared through Baghdad in heavily armoured convoys. British leaders sneered at the Americans' failure to win hearts and minds because of their lack of experience in counterinsurgency.

Oh yes. This isn't merely a British thing: it's part and parcel of many European countries, who simply have lost their way since the end of the Cold War. By this I mean that they quite literally ceased thinking about strategy and the military, of what role their country had in the world, because doing that means taking a stance on something that can't make you careers.

Pride has certainly come before a fall. British commanders underestimated both the enemy's effectiveness and the Americans' ability to adapt. Some apparently failed even to observe how much had changed. At a meeting in August 2007 an American described Major-General Jonathan Shaw, then British commander, as "insufferable", lecturing everyone in the room about lessons learnt in Northern Ireland, which apparently set eyeballs rolling: "It would be okay if he was best in class, but now he's worst in class."

As the saying goes, generals excel at fighting the last war and not the current one. Northern Ireland is at best an example of how to do things, but scarcely the book on counter-insurgency warfare.

...

If a fair-minded account of the Iraq war is written, credit should go to President Bush for rejecting two years ago the report by the bipartisan Iraq Study Group that called for force reductions. He defied conventional wisdom and ordered a troop surge instead. It has been an extraordinary success and, unlike Britain, the Americans will not withdraw in defeat. During debates in Washington, British forces' ignominious withdrawal to barracks was cited to argue that the United States could not contemplate being humbled in a similar way. In the end Bush was not a quitter. Blair "cut and ran".

What a lovely turn of phrase, and I can't agree more: "if a fair-minded account ... is written", which of course points out the elementary fact that there haven't been any such things written, but rather the usual pontificating by those who were, for whatever reasons, opposed to the war and who are either morally or ideologically blind to their own biases and hold unsubstantiated opinions for iron-clad facts. The man vilified is the upright one; the other cut and ran, and that is not a legacy to enjoy.

Britain's shaming was completed in March 2008 when Iraqi forces, backed by the US, moved decisively against the Mahdi Army, inflicting huge casualties and removing them from Basra. Operation Charge of the Knights was supervised by Nouri al-Maliki, the prime minister, exasperated that Iraq's second city was controlled not by Britain but by an Iranian-backed Shi'ite militia.

The shaming is because the Iraqis did what was the Brit's job: the British forces were so poorly equipped and working under such onerous rules of engagement that they were unable to do their job: more fundamentally, the British forces were set up to fail.

Trust in the British had fallen so low that neither the Iraqi nor the US government was willing to give us much notice of the operation. General Mohammed Jawad Humeidi remarked that his forces battled for a week before receiving British support. He rubbed salt in the wound by noting that for five years the Mahdi Army had "ruled Basra without being punished or held to account", and had during that time controlled ports, oil, electricity and government agencies, whose funds bought them weapons.

Ouch. It is one thing to give it your best, give your all, and if you fail, to pick yourself up and keep on going: it is something completely else to be viewed as so completely untrustworthy that your erstwhile allies don't inform you of their actions because you are considered a security risk...

It cannot be a defence of British policy that the war was unpopular at home. Our mission was to provide security for the Iraqi people, and in that the US and Maliki's government have recently had marked success and we have failed. The fault does not lie with our fighters. They have been extremely brave and as effective as their orders and their equipment would allow.

This is key: it's not the soldiers who failed.

It raises questions about the stamina of our nation and the resolve of our political class. It is an uncomfortable conclusion that Britain, with nuclear weapons, cruise missiles, aircraft carriers and the latest generation of fighter-bombers, is incapable of securing a medium-size conurbation. Making Basra safe was an essential part of the overall strategy; having committed ourselves to our allies we let them down.

Ouch. This is about the worst sin that a military can be charged with, especially a military that needs to work within a group of other countries - NATO - that relies on allies pulling through. It is basically charging that the UK can no longer field a functioning military. Period.

The extent of Britain's fiasco has been masked by the media's relief that we are at last leaving Iraq. Those who have been urging Britain to quit are not in a strong position to criticise the government's lack of staying power. Reporting of Basra has mainly focused on British casualties and the prospect for withdrawal. The British media and public have shown scant regard for our failure to protect Iraqis, so the British nation, not just its government, has attracted distrust. We should reflect on what sort of country we have become. We may enjoy patronising Americans but they demonstrate a fibre that we now lack.

Exactly: the never-ending negativity of the British press has aimed at making the costs as clear as possible. SkyNews adds to the tally every time a British soldier dies in a morbid counting exercise.

This is despicable on the part of the press. Counting like that went out with body counts after the conflict in Vietnam. It is the sign of the small-minded accountant, the man who cannot comprehend the larger picture. The idea that the modern-day military will accept heavy casualties - or more exactly, that the publication of casualty figures will keep the bloody-minded officers from spending their men's lives for personal glory - reflects a mind set of the 1950s, and fails to understand that the Generalcy of today is not the Generalcy of the Fields of Flanders, that the modern military, with its highly trained volunteer force, trains to avoid these casualties. Instead of leading with stories of how goals were achieved with minimal losses, the press leads off with those losses, as if they were the only thing that mattered.

This isn't the press being stupid, or even venal, it is exactly what the press wants to tell you: that the Western casualties are the only things that matter. Changing the Middle East and putting it on the right path for its people: that's irrelevant, since Trooper Jones lost his life and Subaltern Fleming lost his leg.

The United States will have drawn its conclusions about our reliability in future and British policy-makers, too, will need to recognise that we lack the troops, wealth and stomach for anything more than the briefest conflict. How long will we remain in Afghanistan? There, in contrast to our past two years in Basra, our forces engage the enemy robustly. But as a result the attrition rate is high. We look, rightly, for more help from Nato allies such as Germany, although humility should temper that criticism, given our own performance in Iraq.

This is key, and this is where the writer of the article in the Times should be mentioned: Michael Portillo. Former Defense Minister. The British Empire is doing their soldiers the greatest disservice possible: starving them of the tools they need, and abandoning them in order to score political points. All done in the name of the greater good, of course, the greater good being the well-being of the members of the political class. Rare have so few done so much for so many undeserving of their sacrifice.

The mood in the Ministry of Defence is said to be despondent. The government, having used our forces in Sierra Leone, Kosovo, Afghanistan and Iraq, has been unwilling to increase the budget. Having announced that he would fight the recession by bringing forward public spending, Brown has pushed back the date of two new aircraft carriers. The Conservatives are too cautious about public spending to make promises. The recession is likely to bring further cuts because neither party sees votes in defence. Nor is either willing to talk of reducing commitments or of specialising in particular defence roles.

This is the failure in the UK: it is not merely a failure of Labor, the Liberals or the Conservatives. All have failed their soldiers. There is little worse. Denying the military in this way and manner is equivalent to slapping them publicly, for daring to request monies to do their jobs.

Prestige apart, it is hard to explain why we have nuclear weapons, and what price prestige, if it is clear to the world that we could not protect the civilians of a single city in Iraq?

Double ouch. This reflects the fallacy of nuclear weapons: that their possession implies that one doesn't need the regular military any more, since the threat of total destruction should be enough to keep the peace. This fallacy - and it is one - falls apart when an enemy realizes that nuclear weapons face massive barriers to their use and hence can do largely what they so desire as long as their is no overt cause for the UK (or any other nuclear power) to use them. The fallacy of nuclear weapons is that they do not keep the peace if their usage appears impossible or highly improbable: a country with no nuclear weapons but with a large conventional military can beat a country with nuclear weapons but only a small conventional military by making it impossible to use nuclear weapons without breaking the rules of war: get your troops into the enemy's cities, and he won't be able to use them; keep your troops on his territory in countryside he doesn't want to destroy, and he won't be able to use them.

...

Perhaps we will not be alone in having to downsize our ambitions after the chastening experience of Iraq. The rhetoric about Afghanistan is changing. All-out victory is rarely mentioned. There is talk of securing Kabul and doing deals with the Taliban. It is tough luck if you are a woman in the Afghan countryside, but international attention is turning to Pakistan and Somalia. The allies cannot hope to control the vast terrain within failed states where Al-Qaeda may set up its camps, and the attempt to do so may help the terrorist cause more than incapacitate it.

This is the conventional wisdom in Afghanistan: that no one has ever won a war against the Afghans. This is wrong because the war there is not about some sort of all-out victory (since this would entail cleaning out the tribal lands in Pakistan), but rather the war there is about enticing an enemy out into the killing fields by letting him believe he can compete, that he can fight and inflict casualties in such a way as to drive the infidels from his lands. That is the military option in the political conflict: this is the Lesson of Clausewitz, that military actions are always and foremost political actions.

The election of Barack Obama opens new policy options for America. His administration will use his charisma and other elements of "soft power" to forge alliances and reduce tensions. He may still look to Britain for a larger contribution to forces in Afghanistan. If Albion proves unreliable he may not be surprised. It seems that British forces tortured his Kenyan grandfather.

Cringe. I can't imagine anything more embarrassing for the British than this.


The way that the British military is being treated, the way that the war is being reported, the way that the politicians have acted, points out that pacifism, modern-day pacifism, with its simplistic view of the world and its nonsensical demands such as "No War For Oil" (no one did that: it's a straw man argument), has more impact on British strategy, which defines how Britain will interact with the rest of the world (and not merely Wales and Scotland), than actual British interests.

Or, alternatively: if current British strategy is accurately reflected in British strategy as it is shown, then God Help The Queen. She will need all the help she can get. It's a sad, sad end to the British Empire, and if it something that you think is a good idea, then Britain has indeed sunk to the level of a nation of shopkeepers, which is what the Germans thought the Brits were. Could the UK today rise to the standard of their grandfathers?

Failed States...

Here a hat tip to Belmont Club, first of all. Highly recommended at all times.

This is what I want to point out and expand on.

Looking back at the period after WW 2, we had a new world structure: The Cold War, aka The Long War, turned around two major power blocks, with multiple small regional power plays at the interface between the two and at the peripheries. After WW2 many borders were redrawn - wars have a tendency to do that - especially in the Third World. While the borders in the Middle East were largely laid down at the end of WW1 as the British and French conspired to divide and conquer the remnants of the Ottoman Empire (most state borders in the Middle East date to these times), the end of the colonial period was the immediate post-war years. The establishment of Israel in 1948 was one of the greatest changes in the area.

The problem is that the English and French drew lines not to create viable states, but rather to prevent them. Rather than working to unite ethnic groups, the colonialists drew the maps to create divisions and strife in order to ensure that these new countries would automatically have squabbles with their neighbors and would this be permanently distracted from getting on with the business of actually creating a working state. Not that many of the countries haven't had some modicum of success: they have.

But the borders as they are drawn today, as they were drawn in the 1950s, are and were artificial. If you look at the demographics, of the distribution of where borders should have been drawn, you end up with a vastly different picture, one that would have probably brought a lot more peace to the area.

As we know, most of the countries of the Middle East are either privately owned and run fiefdoms - the various Kingdoms, including Saudia Arabia - or privately owned and run despots, such as Syria. Iran, while have some integrity as the modern-day incarnation of ancient Persia, isn't all that much better.

The article from Richard Fernandez linked to at the Belmont Club points to an article by Spengler at the Asian Times. While Spengler -  whoever he is - is a tad too realpolitik for my tastes, his take on many things is very, very accurate.

Here's what Spengler points out:

Financial crises, like epidemics, kill the unhealthy first. The present crisis is painful for most of the world but deadly for many Muslim countries, and especially so for the most populous ones. Policy makers have not begun to assess the damage.

This is a good point: the world's financial crisis has opened up more than merely a few problems for the West, but has, more fundamentally, enormous potential to change the Middle East as well.

It is hard to forecast the political fallout, for when each available choice leads to a failed state, it is a matter of indifference which one you adopt. As state finances crumble, states will become less important, and freebooters will seize the stage. Think of the Mumbai terrorists as a political cognate of the Somali pirates, and the character of a Middle East made up of failed states comes into focus.

Iran's President Mahmud Ahmadinejad controls Iran through a kleptocracy of Central African proportions, dissipating the country's oil windfall into payoffs to an "entire class of hangers-on of the Islamic revolution", ... What will Ahmadinejad do now that the oil price has collapsed? According to my Iranian sources, the answer is: Exactly the same thing, but without the money.

While that last is intended as humor, it is everything but that: the point is that there is no way out for a country like Iran. Each and every path leads to failure, seen objectively, since it cannot export its Iranian revolution and bring all competitors down to the same level, i.e. to level the playing field down to the same basis. The description of Iran as being a kleptocracy is also very accurate: Ahmadinejad has purchased social peace at massive cost to the Iranian economy. The problem is that people don't stay bought when the economy continues to not function: subsidizing bread and gasoline alleviates only the symptoms of the problem and not the cause.

The point of the joke is that Iran's regime cannot reduce subsidies or raise taxes without losing control of the constituencies that brought it to power. They are the peasants and the urban poor who barely afford shelter and food as matters stand. Despite the oil-price collapse, the government has not reduced energy subsidies that the International Monetary Fund (IMF) puts at more than a fifth of gross domestic product (GDP). A proposed value-added tax was withdrawn last October after strikes in the bazaars, starting in Isfahan and other provincial towns and spreading to the capital Tehran. Iran is eating through its $60 billion of foreign exchange reserves, unable to adjust to a collapse of its only significant revenue source.

Iran must break down, I argued last June, or break out, through a military adventure. The sand is slipping out of the hour glass, and the regime must decide what to do within a few months.

Ouch. This is literally a do-or-die situation, if it is an accurate assessment of the strategic constellation in the Middle East right now. If oil prices stay down, then Iran collapses. The only way, right now, to get oil prices back up is to shorten the supply: if Iran were to, say, try to close the Straights of Hormuz by mining the waters there, then the price of oil shoots back up.

The only problem with that is that Iran needs an open Straight of Hormuz to export its oil and maintain domestic peace. The fastest way for Iran to collapse would be a blockade of Iran, enforced and comprehensive, to stop its oil exports: then the collapse is all but guaranteed. That way, though, lies war, since the government of Iran is treading a narrow, thin path to perdition, and deviating from that path only brings  perdition closer.

Spengler points out that the real problem isn't Iran, but rather Pakistan as well.

I'd take that several steps further.

What will develop in the next five years is nothing less than the collapse of key nation-states that have vastly overextended themselves in an attempt to transition from developing country to regional power without taking the intermediate steps of actually developing the country as a whole. This is a lesson to be learned at great cost, one that should be obvious, but has been rejected by those rulers whose ignorance of economics, they believe, can be compensated by their belief that Allah will provide.

What countries? Directly: Iran, Pakistan. We add those countries to the already failed states of the Middle East, those of Iraq, Egypt, Lebanon, Syria, Oman, Somalia, the list is fairly clear. Iraq was a failed state before the US invaded, and is only now slowly starting to work its way out of the depths that history had condemned it to; Egypt is kept alive only by US subsidies; Lebanon has been destroyed by decades of proxy fighting; Syria exists at the whim of the Ba'ath party; the rest are, as states, convenient labels on the map rather than functioning nation states.

The tragedy that will be Iran and Pakistan will not be pretty, especially Pakistan. Iran continues, at least, to have oil reserves that, properly handled, can bring its society some positive benefits; Pakistan does not have that. Pakistan's bombs are going to be the stuff of nightmares if they cannot be controlled.


So what can be done?

To be honest, under the current circumstances, not one hell of a lot. Unless you are willing to stop the failed states from failing, nothing. But stopping those states from failing will make the US involvement in Iraq really look like a picnic.

On Terrorism...

This reminded me of an essay that needs to be written. But don't go there quite yet.

It's about what terrorism is really all about, and why the central memes around terrorism are wrong.

A common meme around terrorism goes along these lines: terrorists are people who have been driven by injustice to take up arms against something so oppressive that it can only be fought by force. Terrorists are forced to do terrible things in order to draw attention to their cause, which is invariably about some minority being treated shabbily for some nefarious reason. Your average terrorist sees himself as a patriot, and the phrase "one man's freedom fighter is another man's terrorist" is used to clearly define the role of the terrorist in the political process. Terrorists use terror as a weapon because they can't compete against the well-armed and organized forces of oppression without being slaughtered themselves, and turn only to terrorism after they have exhausted all other ways of achieving their goals.


None of that is true.

None.

Terrorism as a modern phenomenon began not as a liberation movement hijacking airplanes or the taking of Israelis captive in München.

It began rather as a means for the Soviets of extending the conflict between the West and the Soviets to include non-national players, which could be used to distract the class enemy. We now know, thanks to the collapse of the Soviets, how deeply involved they were in creating terrorism as we know it today: as an additional tool to be used to attack the West and those who supported the West. Read the Mitrokhan Diaries to see how deeply the Soviets were involved, and you cannot avoid understanding how little this common meme about terrorism has to do with reality.

This continues today. Now go read that link.

Terrorism cannot exist without state support of one kind or another, be it direct or indirect. Terrorist groups are, effectively, nothing but the irregular fighters of those countries who know that they cannot achieve their goals via diplomacy and desperately fear being caught violating treaties and pacts. They are convenient, throw-away weapons in undeclared wars.

Nothing more, nothing less. The MSM and the other chattering classes who fail to understand who made the Mumbai attackers into what they were, who fail to understand how asymmetrical wars are fought, who fail to do even a modicum of research, preferring instead to be what Lenin referred to as "useful idiots", all are a significant part of the problem. They actually believe what is said, rather than taking the trouble to find out what is actually happening. Words are cheap, the Soviets were masters at propaganda - and their students at times outdo their teachers - and propaganda serves not merely to persuade, but also to hide true aims.

Someday I've got to write that essay...

Ouch...

This has to hurt, especially if you are an academic economist.

The author is right. The academic world has abysmally failed in its obligations to its own discipline, the obligation to be rigorous and to be critical.

Too many professors are desperately afraid, after having taught financial nonsense for decades, that they will be found out and duly laughed out of town, as it were, on a rail.

Pablo Triana is right: there is no debate here with people actually interested in debate, but rather ruthless self-preservation at the deliberate cost of debate.

Just because one can create extraordinarily complex ways of calculating risk and how to insure against it doesn't mean that one should do so: the attempt to remove risk from business is inevitably condemned to fail.

Why? Because you really can't know what is going to happen in the future. Someone investing money today can't insure against unknown and unknowable risks, but can do one thing only: try to understand what they are doing when they invest, and understanding that risk is always, always, always there. Not necessarily in the ways that one expects, not necessarily in the ways that one can understand, but it is always there. Investing is always a risky business.

And believing that you can remove risk by complex financial calculations and the resulting financial instruments based upon these is something that is extremely appealing, especially for academics (it's elegant and it's the stuff that careers are built upon): it is, however, like all ideas that contradict empirical reality, a dangerous chimera, one that leads down the path of destruction.

Risk, you see, is always there: it can be quantified - that's something I do day in, day out - but it can never be removed or otherwise compensated for. Businesses that are risky aren't risky for one simple reason, but invariably a collection of reasons that may be tied together, but whose complexity requires experts to understand and quantify: there is no magic bullet that allows you to buy insurance (or if there were, the price should be so high that it effectively makes investing in such entities non-profitable for most investors.

But rather than teaching this - that risk is quantifiable, bears a cost and there is no insurance against it - the academics have taught their own ideal worlds where risk can be canceled out of the equation without making investments unattractive, and if you work things right, you might even make money whilst doing so.

I fear that I must take Pablo Triana's concept one step further: it's not merely a stifling of debate, but more importantly a stifling of critical thought, truly critical and not the dogma that passes for critical thought today. It's not so much that reality intrudes, but even worse: it yammers for attention and demands to be listened to.

Charter 08

I'm going to take the liberty, so to speak, of putting the Charter 08 here. I've shamelessly stolen this from the New York Review of Books (here).

It's an important document: the name specifically refers to the Charter 77 movement in the former Czechoslovakia, which can be counted as one of the starting points for the downfall of Soviet-style eastern Europe communism and associated states.

But now it's the Chinese who are involved.

Human rights are indeed unalienable rights.

This is an absolutely necessary and unavoidable discussion. China has been riding the wave of modernization for decades now, and it is time for that modernization to move into the political arena. Communist Party rule cannot continue as it has, as it is not the rule of law, but rather the rule of The Party, capricious and political.

May this be the beginning of a discussion to rival the Federalist Papers: this could be the best development for China in the last 1000 years.

And it shows that the US Constitution continues to be one of the most subversive political documents and manifestos ever written.

I. Foreword

A hundred years have passed since the writing of China's first constitution. 2008 also marks the sixtieth anniversary of the promulgation of the Universal Declaration of Human Rights, the thirtieth anniversary of the appearance of Democracy Wall in Beijing, and the tenth of China's signing of the International Covenant on Civil and Political Rights. We are approaching the twentieth anniversary of the 1989 Tiananmen massacre of pro-democracy student protesters. The Chinese people, who have endured human rights disasters and uncountable struggles across these same years, now include many who see clearly that freedom, equality, and human rights are universal values of humankind and that democracy and constitutional government are the fundamental framework for protecting these values.

By departing from these values, the Chinese government's approach to "modernization" has proven disastrous. It has stripped people of their rights, destroyed their dignity, and corrupted normal human intercourse. So we ask: Where is China headed in the twenty-first century? Will it continue with "modernization" under authoritarian rule, or will it embrace universal human values, join the mainstream of civilized nations, and build a democratic system? There can be no avoiding these questions.

The shock of the Western impact upon China in the nineteenth century laid bare a decadent authoritarian system and marked the beginning of what is often called "the greatest changes in thousands of years" for China. A "self-strengthening movement" followed, but this aimed simply at appropriating the technology to build gunboats and other Western material objects. China's humiliating naval defeat at the hands of Japan in 1895 only confirmed the obsolescence of China's system of government. The first attempts at modern political change came with the ill-fated summer of reforms in 1898, but these were cruelly crushed by ultraconservatives at China's imperial court. With the revolution of 1911, which inaugurated Asia's first republic, the authoritarian imperial system that had lasted for centuries was finally supposed to have been laid to rest. But social conflict inside our country and external pressures were to prevent it; China fell into a patchwork of warlord fiefdoms and the new republic became a fleeting dream.

The failure of both "self-strengthening" and political renovation caused many of our forebears to reflect deeply on whether a "cultural illness" was afflicting our country. This mood gave rise, during the May Fourth Movement of the late 1910s, to the championing of "science and democracy." Yet that effort, too, foundered as warlord chaos persisted and the Japanese invasion [beginning in Manchuria in 1931] brought national crisis.

Victory over Japan in 1945 offered one more chance for China to move toward modern government, but the Communist defeat of the Nationalists in the civil war thrust the nation into the abyss of totalitarianism. The "new China" that emerged in 1949 proclaimed that "the people are sovereign" but in fact set up a system in which "the Party is all-powerful." The Communist Party of China seized control of all organs of the state and all political, economic, and social resources, and, using these, has produced a long trail of human rights disasters, including, among many others, the Anti-Rightist Campaign (1957), the Great Leap Forward (1958–1960), the Cultural Revolution (1966–1969), the June Fourth (Tiananmen Square) Massacre (1989), and the current repression of all unauthorized religions and the suppression of the weiquan rights movement [a movement that aims to defend citizens' rights promulgated in the Chinese Constitution and to fight for human rights recognized by international conventions that the Chinese government has signed]. During all this, the Chinese people have paid a gargantuan price. Tens of millions have lost their lives, and several generations have seen their freedom, their happiness, and their human dignity cruelly trampled.

During the last two decades of the twentieth century the government policy of "Reform and Opening" gave the Chinese people relief from the pervasive poverty and totalitarianism of the Mao Zedong era and brought substantial increases in the wealth and living standards of many Chinese as well as a partial restoration of economic freedom and economic rights. Civil society began to grow, and popular calls for more rights and more political freedom have grown apace. As the ruling elite itself moved toward private ownership and the market economy, it began to shift from an outright rejection of "rights" to a partial acknowledgment of them.

In 1998 the Chinese government signed two important international human rights conventions; in 2004 it amended its constitution to include the phrase "respect and protect human rights"; and this year, 2008, it has promised to promote a "national human rights action plan." Unfortunately most of this political progress has extended no further than the paper on which it is written. The political reality, which is plain for anyone to see, is that China has many laws but no rule of law; it has a constitution but no constitutional government. The ruling elite continues to cling to its authoritarian power and fights off any move toward political change.

The stultifying results are endemic official corruption, an undermining of the rule of law, weak human rights, decay in public ethics, crony capitalism, growing inequality between the wealthy and the poor, pillage of the natural environment as well as of the human and historical environments, and the exacerbation of a long list of social conflicts, especially, in recent times, a sharpening animosity between officials and ordinary people.

As these conflicts and crises grow ever more intense, and as the ruling elite continues with impunity to crush and to strip away the rights of citizens to freedom, to property, and to the pursuit of happiness, we see the powerless in our society—the vulnerable groups, the people who have been suppressed and monitored, who have suffered cruelty and even torture, and who have had no adequate avenues for their protests, no courts to hear their pleas—becoming more militant and raising the possibility of a violent conflict of disastrous proportions. The decline of the current system has reached the point where change is no longer optional.

II. Our Fundamental Principles

This is a historic moment for China, and our future hangs in the balance. In reviewing the political modernization process of the past hundred years or more, we reiterate and endorse basic universal values as follows:

Freedom. Freedom is at the core of universal human values. Freedom of speech, freedom of the press, freedom of assembly, freedom of association, freedom in where to live, and the freedoms to strike, to demonstrate, and to protest, among others, are the forms that freedom takes. Without freedom, China will always remain far from civilized ideals.

Human rights. Human rights are not bestowed by a state. Every person is born with inherent rights to dignity and freedom. The government exists for the protection of the human rights of its citizens. The exercise of state power must be authorized by the people. The succession of political disasters in China's recent history is a direct consequence of the ruling regime's disregard for human rights.

Equality. The integrity, dignity, and freedom of every person—regardless of social station, occupation, sex, economic condition, ethnicity, skin color, religion, or political belief—are the same as those of any other. Principles of equality before the law and equality of social, economic, cultural, civil, and political rights must be upheld.

Republicanism. Republicanism, which holds that power should be balanced among different branches of government and competing interests should be served, resembles the traditional Chinese political ideal of "fairness in all under heaven." It allows different interest groups and social assemblies, and people with a variety of cultures and beliefs, to exercise democratic self-government and to deliberate in order to reach peaceful resolution of public questions on a basis of equal access to government and free and fair competition.

Democracy. The most fundamental principles of democracy are that the people are sovereign and the people select their government. Democracy has these characteristics: (1) Political power begins with the people and the legitimacy of a regime derives from the people. (2) Political power is exercised through choices that the people make. (3) The holders of major official posts in government at all levels are determined through periodic competitive elections. (4) While honoring the will of the majority, the fundamental dignity, freedom, and human rights of minorities are protected. In short, democracy is a modern means for achieving government truly "of the people, by the people, and for the people."

Constitutional rule. Constitutional rule is rule through a legal system and legal regulations to implement principles that are spelled out in a constitution. It means protecting the freedom and the rights of citizens, limiting and defining the scope of legitimate government power, and providing the administrative apparatus necessary to serve these ends.

III. What We Advocate

Authoritarianism is in general decline throughout the world; in China, too, the era of emperors and overlords is on the way out. The time is arriving everywhere for citizens to be masters of states. For China the path that leads out of our current predicament is to divest ourselves of the authoritarian notion of reliance on an "enlightened overlord" or an "honest official" and to turn instead toward a system of liberties, democracy, and the rule of law, and toward fostering the consciousness of modern citizens who see rights as fundamental and participation as a duty. Accordingly, and in a spirit of this duty as responsible and constructive citizens, we offer the following recommendations on national governance, citizens' rights, and social development:

1. A New Constitution. We should recast our present constitution, rescinding its provisions that contradict the principle that sovereignty resides with the people and turning it into a document that genuinely guarantees human rights, authorizes the exercise of public power, and serves as the legal underpinning of China's democratization. The constitution must be the highest law in the land, beyond violation by any individual, group, or political party.

2. Separation of powers. We should construct a modern government in which the separation of legislative, judicial, and executive power is guaranteed. We need an Administrative Law that defines the scope of government responsibility and prevents abuse of administrative power. Government should be responsible to taxpayers. Division of power between provincial governments and the central government should adhere to the principle that central powers are only those specifically granted by the constitution and all other powers belong to the local governments.

3. Legislative democracy. Members of legislative bodies at all levels should be chosen by direct election, and legislative democracy should observe just and impartial principles.

4. An Independent Judiciary. The rule of law must be above the interests of any particular political party and judges must be independent. We need to establish a constitutional supreme court and institute procedures for constitutional review. As soon as possible, we should abolish all of the Committees on Political and Legal Affairs that now allow Communist Party officials at every level to decide politically-sensitive cases in advance and out of court. We should strictly forbid the use of public offices for private purposes.

5. Public Control of Public Servants. The military should be made answerable to the national government, not to a political party, and should be made more professional. Military personnel should swear allegiance to the constitution and remain nonpartisan. Political party organizations shall be prohibited in the military. All public officials including police should serve as nonpartisans, and the current practice of favoring one political party in the hiring of public servants must end.

6. Guarantee of Human Rights. There shall be strict guarantees of human rights and respect for human dignity. There should be a Human Rights Committee, responsible to the highest legislative body, that will prevent the government from abusing public power in violation of human rights. A democratic and constitutional China especially must guarantee the personal freedom of citizens. No one shall suffer illegal arrest, detention, arraignment, interrogation, or punishment. The system of "Reeducation through Labor" must be abolished.

7. Election of Public Officials. There shall be a comprehensive system of democratic elections based on "one person, one vote." The direct election of administrative heads at the levels of county, city, province, and nation should be systematically implemented. The rights to hold periodic free elections and to participate in them as a citizen are inalienable.

8. Rural–Urban Equality. The two-tier household registry system must be abolished. This system favors urban residents and harms rural residents. We should establish instead a system that gives every citizen the same constitutional rights and the same freedom to choose where to live.

9. Freedom to Form Groups. The right of citizens to form groups must be guaranteed. The current system for registering nongovernment groups, which requires a group to be "approved," should be replaced by a system in which a group simply registers itself. The formation of political parties should be governed by the constitution and the laws, which means that we must abolish the special privilege of one party to monopolize power and must guarantee principles of free and fair competition among political parties.

10. Freedom to Assemble. The constitution provides that peaceful assembly, demonstration, protest, and freedom of expression are fundamental rights of a citizen. The ruling party and the government must not be permitted to subject these to illegal interference or unconstitutional obstruction.

11. Freedom of Expression. We should make freedom of speech, freedom of the press, and academic freedom universal, thereby guaranteeing that citizens can be informed and can exercise their right of political supervision. These freedoms should be upheld by a Press Law that abolishes political restrictions on the press. The provision in the current Criminal Law that refers to "the crime of incitement to subvert state power" must be abolished. We should end the practice of viewing words as crimes.

12. Freedom of Religion. We must guarantee freedom of religion and belief and institute a separation of religion and state. There must be no governmental interference in peaceful religious activities. We should abolish any laws, regulations, or local rules that limit or suppress the religious freedom of citizens. We should abolish the current system that requires religious groups (and their places of worship) to get official approval in advance and substitute for it a system in which registry is optional and, for those who choose to register, automatic.

13. Civic Education. In our schools we should abolish political curriculums and examinations that are designed to indoctrinate students in state ideology and to instill support for the rule of one party. We should replace them with civic education that advances universal values and citizens' rights, fosters civic consciousness, and promotes civic virtues that serve society.

14. Protection of Private Property. We should establish and protect the right to private property and promote an economic system of free and fair markets. We should do away with government monopolies in commerce and industry and guarantee the freedom to start new enterprises. We should establish a Committee on State-Owned Property, reporting to the national legislature, that will monitor the transfer of state-owned enterprises to private ownership in a fair, competitive, and orderly manner. We should institute a land reform that promotes private ownership of land, guarantees the right to buy and sell land, and allows the true value of private property to be adequately reflected in the market.

15. Financial and Tax Reform. We should establish a democratically regulated and accountable system of public finance that ensures the protection of taxpayer rights and that operates through legal procedures. We need a system by which public revenues that belong to a certain level of government—central, provincial, county or local—are controlled at that level. We need major tax reform that will abolish any unfair taxes, simplify the tax system, and spread the tax burden fairly. Government officials should not be able to raise taxes, or institute new ones, without public deliberation and the approval of a democratic assembly. We should reform the ownership system in order to encourage competition among a wider variety of market participants.

16. Social Security. We should establish a fair and adequate social security system that covers all citizens and ensures basic access to education, health care, retirement security, and employment.

17. Protection of the Environment. We need to protect the natural environment and to promote development in a way that is sustainable and responsible to our descendents and to the rest of humanity. This means insisting that the state and its officials at all levels not only do what they must do to achieve these goals, but also accept the supervision and participation of non-governmental organizations.

18. A Federated Republic. A democratic China should seek to act as a responsible major power contributing toward peace and development in the Asian Pacific region by approaching others in a spirit of equality and fairness. In Hong Kong and Macao, we should support the freedoms that already exist. With respect to Taiwan, we should declare our commitment to the principles of freedom and democracy and then, negotiating as equals, and ready to compromise, seek a formula for peaceful unification. We should approach disputes in the national-minority areas of China with an open mind, seeking ways to find a workable framework within which all ethnic and religious groups can flourish. We should aim ultimately at a federation of democratic communities of China.

19. Truth in Reconciliation. We should restore the reputations of all people, including their family members, who suffered political stigma in the political campaigns of the past or who have been labeled as criminals because of their thought, speech, or faith. The state should pay reparations to these people. All political prisoners and prisoners of conscience must be released. There should be a Truth Investigation Commission charged with finding the facts about past injustices and atrocities, determining responsibility for them, upholding justice, and, on these bases, seeking social reconciliation.

China, as a major nation of the world, as one of five permanent members of the United Nations Security Council, and as a member of the UN Council on Human Rights, should be contributing to peace for humankind and progress toward human rights. Unfortunately, we stand today as the only country among the major nations that remains mired in authoritarian politics. Our political system continues to produce human rights disasters and social crises, thereby not only constricting China's own development but also limiting the progress of all of human civilization. This must change, truly it must. The democratization of Chinese politics can be put off no longer.

Accordingly, we dare to put civic spirit into practice by announcing Charter 08. We hope that our fellow citizens who feel a similar sense of crisis, responsibility, and mission, whether they are inside the government or not, and regardless of their social status, will set aside small differences to embrace the broad goals of this citizens' movement. Together we can work for major changes in Chinese society and for the rapid establishment of a free, democratic, and constitutional country. We can bring to reality the goals and ideals that our people have incessantly been seeking for more than a hundred years, and can bring a brilliant new chapter to Chinese civilization.

Are They Insane Redux: Chicago and Corruption...

These two seem to go hand-in-hand, and are really indicative of the status of the Democratic Party not merely in Chicago, but in general: after all, the national party puts up with the severe corruption in Chicago.

How severe?

Well, the Governor - surprising the the MSM even mentions that he is a Democrat, but yes, he is - wanted to sell Obama's seat in the US Senate. He is the one who decides who will fill the seat after Obama was elected.

It's not so much the corruption...no, it is the corruption.


Chicago politics are deeply and probably irreversibly corrupt. The corruption doesn't just occur at the top, but goes down to the lowest level of public society and even beyond. This isn't some sort of accident, but is fundamentally part of a corruption society, of a cult of corruption, a cult of quid-pro-quo that would make the most decadent days of Rome look tame in comparison.

We're not talking garden-variety corruption, of getting a free swimming pool in exchange for some contracts. We're talking about taking money to chose who would be the US Senator from the State of Illinois. One newspaper put it so: staggering even by Illinois standards. The governor has been described as a sociopath and reckless. Duh.

This is the society that Barack Obama came from. Read this to see more. It's not some wacko bizarro blogger, but from ABC News - gee, where were they 6 months ago???? - and goes back to 2004 at least.

Lovely way to start a presidency.

Oh, and the top fundraiser for Blagojevich, the Governor? Guy by the name of Rezko. Offered Obama a job, bought a million-dollar home from the guy.

This is where Obama comes from.

There's a corruption timeline here.

How did he ever get elected?

Criminal complaint here.

How could the party ever accept this?

The criminal complaint is 76 pages long.

How can anyone continue to be a Democrat in Chicago?


Oh, and the former governor? Jim Ryan? Also in prison.

What a cesspool. Don't get me wrong: Chicago is a great place.


But doubly so if you are a corrupt politician.

Worst of All Possible Worlds...

Gideon Rachman of the FT is, once again, a hoot.

The only thing he's really got right is that global government isn't going to happen soon.

Let the fisking begin...

I have never believed that there is a secret United Nations plot to take over the US. I have never seen black helicopters hovering in the sky above Montana. But, for the first time in my life, I think the formation of some sort of world government is plausible.

Plausible? Plausible in the sense of "yes we can contemplate it" just like my children insist that getting a PS3 is a plausible thing to do, or plausible in the sense of "makes sense"?

I fear that Mr. Rachman believes the latter. Goodness.

A "world government" would involve much more than co-operation between nations. It would be an entity with state-like characteristics, backed by a body of laws. The European Union has already set up a continental government for 27 countries, which could be a model. The EU has a supreme court, a currency, thousands of pages of law, a large civil service and the ability to deploy military force.

The EU has a legion of technocrats, is run by a group of unprincipled and out-of-control do-gooders who haven't even once, in the history of the EU Commission, actually published a budget that had anything - anything - to do with reality and whose former commissioners tend to end up convicted of fraud and malfeasance. Hmmm. Come to think of it, that's how you can describe most governments in power today, but that is scarcely the model to hope that the world follows: or perhaps it is? Could it be that Rachman actually wants the incompetent and vainglorious fools that represent the citizens of Europe to run things?

There is a reason why the EU has so abjectly failed outside of things like subsidies for milk and other foodstuffs: it makes the workings of Congress look like a high-precision and quality workshop in comparison.

So could the European model go global? There are three reasons for thinking that it might.

First, it is increasingly clear that the most difficult issues facing national governments are international in nature: there is global warming, a global financial crisis and a "global war on terror".

Well, two out of three isn't bad. The first one, of course, can't be taken seriously if you've been watching the actual science behind the enormous claims of the doom-and-gloom brigade, things like, say, using the wrong data, constructing models that always give you the results you want, and general incompetence of the global warming hysterians.

Second, it could be done. The transport and communications revolutions have shrunk the world so that, as Geoffrey Blainey, an eminent Australian historian, has written: "For the first time in human history, world government of some sort is now possible." Mr Blainey foresees an attempt to form a world government at some point in the next two centuries, which is an unusually long time horizon for the average newspaper column.

Right: "it could be done". As if that is the reason it should be done? While I also anticipate an attempt to form a world government - heck, it's part of the AGW hysterian agenda - I don't view it with glee or with anticipation, but rather with a sense of foreboding and dread.

But – the third point – a change in the political atmosphere suggests that "global governance" could come much sooner than that. The financial crisis and climate change are pushing national governments towards global solutions, even in countries such as China and the US that are traditionally fierce guardians of national sovereignty.

Well, that's a point to be seen: nations cooperating in enlightened self-interest is scarcely the first baby steps to global government, since if they were, that baby has since grown, had kids of its own, and retired, wondering why the children never call and if they'll ever see any grandchildren before they depart this vale of tears...

Barack Obama, America's president-in-waiting, does not share the Bush administration's disdain for international agreements and treaties. In his book, The Audacity of Hope, he argued that: "When the world's sole superpower willingly restrains its power and abides by internationally agreed-upon standards of conduct, it sends a message that these are rules worth following." The importance that Mr Obama attaches to the UN is shown by the fact that he has appointed Susan Rice, one of his closest aides, as America's ambassador to the UN, and given her a seat in the cabinet.

Well, I couldn't expect Rachman to avoid trying for once again a Bush-bashing round, but does he have to be so predictable? There is no disdain for international agreements and treaties: just like any self-respecting national government, the Bush administration has quite rightfully chosen to ignore those that get in the way. That the Bush administration isn't good at hiding its disdain is another problem, but if you've bothered to read any history or understand how the world actually works, you'd know that international treaties are worth, at best, the paper they are written on, and it is only enlightened self-interest that keeps any such treaty going. Really.

And the sad corollary of the world's sole superpower willingly restraining its power is that everyone else tries to fill the vacuum, which political nature abhors. One of the great mysteries to around 90% of the world's governments is that the US hasn't simply declared pax americana and gone on to tell them what the game plan is: if it were any of those 90%, that's exactly what they'd be doing. Power unused is power gone, first temporarily, then permanently. On top of that all, what "internationally agreed-upon standards of conduct" are we talking about?

The kind that let thugs and murders run a country into the ground and murder and abuse millions, while demanding non-interference? The kind that allows and, if anything, encourages genocide by pretending that it isn't happening because it might make someone unhappy? The one that sells the tools to make weapons of mass destruction and then feigns ignorance?

Or the one that will tsk-tsk when Iran detonates a nuke in Tel Aviv and then point out that if Israel had just been nicer, maybe it wouldn't have come to this?

Mr. Rachman: there are no "internationally agreed-upon standards of conduct" except in the fantasies of those proposing world government (oh...wait, got it). They're at very best a nice political construct, and belief in them shows a naivety that would ordinarily be charming.

But in this case it's chilling.

The world will remember Susan Rice not as an intellectually sharp and incisive woman, but rather as someone who pushed for the US to get involved in any and all genocides across the globe, truly aiming for imperial overreach. The woman is at best a catastrophe waiting to happen: I can just see her lecturing the government in Khartum about its genocidal activities, and that government deciding that the Americans are both insane and stupid. She is a moralist wanting to correct the world's wrongs, and such people should be kept behind locked doors before they start wars.

A taste of the ideas doing the rounds in Obama circles is offered by a recent report from the Managing Global Insecurity project, whose small US advisory group includes John Podesta, the man heading Mr Obama's transition team and Strobe Talbott, the president of the Brookings Institution, from which Ms Rice has just emerged.

Interesting choice of words, isn't it? Not solving global insecurity, or overcoming global insecurity, but managing global insecurity. Says it all, doesn't it?

The MGI report argues for the creation of a UN high commissioner for counter-terrorist activity, a legally binding climate-change agreement negotiated under the auspices of the UN and the creation of a 50,000-strong UN peacekeeping force. Once countries had pledged troops to this reserve army, the UN would have first call upon them.

Well, isn't that special. Let's give the organization that has turned human rights into a laughing stock joke, that has failed repeatedly to follow its own resolutions, spectacularly so, that was actively involved in undermining some of its own resolutions, and which has murdered and sexually exploited those it was to protect, let's give them a new high commissioner for counter-terrorism. I nominate, oh, maybe Syria to fill the position, or maybe Iran?

Legally binding? Correct me if I am wrong, but legally binding implies a) someone who writes the laws; b) courts to make a decision about the law; c) police to enforce and uphold the laws. Shall international law trump local law?

The UN has no jurisdiction here, and legally binding  will be a joke for most countries. They'll be happy to put it into law, and just as happy to ignore it when auspicious or useful.

And 50k troops? Don't be silly. If you are going to go for a right a proper peace-keeping force, you'd need more like 5 million to for the UN to be able to enforce the law. The number 50k is, counting support troops, barely enough to police a single province (anywhere), let alone be a real "peace-keeping" force. That 50k, when you subtract support troops, is less than 10k on the ground: if there is serious fighting - which will happen, as no one will believe in the deterrence effect of such a UN force unless they know that they are willing to fight - that isn't enough to sustain any sort of combat operations.

Given the general quality of the troops involved in UN peace-keeping operations, unless these are highly-trained, combat-tested troops, they will be nothing more than uniformed police, and in such a role these numbers are ludicrously low. Which means that they will get higher.

Do you want the UN running your country? Given the track record, only a civil war is less attractive...

These are the kind of ideas that get people reaching for their rifles in America's talk-radio heartland. Aware of the political sensitivity of its ideas, the MGI report opts for soothing language. It emphasises the need for American leadership and uses the term, "responsible sovereignty" – when calling for international co-operation – rather than the more radical-sounding phrase favoured in Europe, "shared sovereignty". It also talks about "global governance" rather than world government.

Nice try, Mr. Rachman: try to make anyone opposing this into the equivalent of that favorite boogeyman of the Europeans, a hillbilly redneck.

Responsible sovereignty? Sorry, there is no such thing. It's like "responsible breathing", not like "responsible drinking". You can't help but breath, just as states cannot help but be sovereign. It's part and parcel of what a state does. Giving up fundamental rights - the right to decide economic policy, for instance - isn't something one does to be "responsible": if anything, it is an irresponsible abdication of fundamental sovereign rights to unnamed, unelected technocrats - who make up the EU commission, after all - who, to boot, have no one that they need to be responsible to. And what would be the difference between "global governance" and world government?

There is none: making such a differentiation is nothing less than smoke and mirrors.

But some European thinkers think that they recognise what is going on. Jacques Attali, an adviser to President Nicolas Sarkozy of France, argues that: "Global governance is just a euphemism for global government." As far as he is concerned, some form of global government cannot come too soon. Mr Attali believes that the "core of the international financial crisis is that we have global financial markets and no global rule of law".

Mr. Attali: the core of the international financial crisis is that governments create instabilities that are exploited. The US government decided to bend market rules to create lots and lots of homeowners who cannot pay their loans. That's the problem.

So, it seems, everything is in place. For the first time since homo sapiens began to doodle on cave walls, there is an argument, an opportunity and a means to make serious steps towards a world government.

And the connection between doodling on cave walls is?

To be correct, Mr. Rachman should rather write "...since homo sapiens began to boss other people around". That'd be the right and proper comparison.

Most certainly there are means to create a world government. Doesn't mean you should. It's sort of like giving the materials for explosives to teenage boys and teaching them chemistry, pointing out that things that make loud noises are fun: opportunity and means. Doesn't make it a good idea now, does it?

But let us not get carried away. While it seems feasible that some sort of world government might emerge over the next century, any push for "global governance" in the here and now will be a painful, slow process.

Thank goodness for that. The slower and more painful the better: it should be so slow and painful that people decide that it's a really, really, really bad idea.

There are good and bad reasons for this. The bad reason is a lack of will and determination on the part of national, political leaders who – while they might like to talk about "a planet in peril" – are ultimately still much more focused on their next election, at home.

Well, duh. Does Mr. Rachman think that this is somehow going to change come the new age of enlightenment he is fantasizing about? That shows a rather basic lack of understanding about human nature, now, doesn't it?

But this "problem" also hints at a more welcome reason why making progress on global governance will be slow sledding. Even in the EU – the heartland of law-based international government – the idea remains unpopular. The EU has suffered a series of humiliating defeats in referendums, when plans for "ever closer union" have been referred to the voters. In general, the Union has progressed fastest when far-reaching deals have been agreed by technocrats and politicians – and then pushed through without direct reference to the voters. International governance tends to be effective, only when it is anti-democratic.

Well, why do you think the EU has suffered a series of humiliating defeats? Got news for you, Gideon: it's because not everyone thinks the EU is a hunky-dory glorious thing, and as a matter of fact, the more that know how the EU actually works, the less they are interested in having it in charge.

Of course, the last point is the critical one, the one that warms the hearts of all of the watermelon people out there: they want their dictatorship, and by golly they want it now! All of you peons out there, thinking for yourselves and not kowtowing to the obvious elite, your betters ('cause we know about global warming! Yesindeediedoo!), you're ruining the planet for us, the considerate, the metrosexual, the modern elite, the watermelon people.

All you need ot make this complete is for him to say that communism never was really tried in practice, but with modern computers I'll bet we can get it to work.

The world's most pressing political problems may indeed be international in nature, but the average citizen's political identity remains stubbornly local. Until somebody cracks this problem, that plan for world government may have to stay locked away in a safe at the UN.

In other words: until we can bamboozle everyone, or until we can indoctrinate them well enough, or until we can scare them into it, or until we have people who don't actually behave like people, then we need to keep our plans for taking over the world under lock and key.

Sigh. History repeats itself, but this is increasingly farcical. Which means it will end, once again, in fiasco, chaos, despair and desperation. The last thing the world needs right now is a world government. It would be, quite clearly, the worst of all possible worlds.

Truer Words Have Never Been Said...

This is rich in hubris, satire and absurdity.

Chris Dodd, the man who is in no small part responsible for the sub-prime crisis and the resultant US recession, now calls for the head of GM because "You've got to consider new leadership".

Yes, Mr. Dodd: you do need to consider new leadership. Such as replacing you and Barney Frank, just to begin with.

The hubris: telling someone who meets a huge payroll how to run his business after you've run the economy into the ground.

The satire: Mr: Dodd's belief that he knows that new leadership is what GM needs.

The absurdity: that Mr. Dodd hasn't been tarred and feathered for his role in the destruction of Fannie Mae and Freddie Mac, as well as his aiding and abetting the subprime crisis.


Sorry, but this is tantamount to an executioner telling the condemned man to cheer up, it'll be over in a few minutes. Of course, in this case the executioner paid the condemned man to commit his crimes.


The fact that the Democratic Party - sorry, meant to write "The Main Stream Media" - hasn't sanctioned these fools and banished them to something more fitting for their competencies (say, dog catcher in a small town in Maine), speaks volumes in terms of culpability and sheer arrogance. These fools have caused the recession, but are pushing the blame on others.

And the media? Either sycophants or thoroughly cowed.

Are They Insane II

Yikes. Yet another "Are They Insane" post!

This is indeed insane.

Barney Frank is furious at the FDIC because they can't prevent foreclosures.

Duh. People took out loans that they could not repay, encouraged by politicians like Barney Frank, who somehow have yet to understand that if you take out a mortgage that you can't repay, you will default on it and the bank will foreclose on your ass.

Of course he doesn't like it: it is the result of his and the Democratic Party's abysmally failed politics that have gotten us into this mess. It is the consequences of his actions.

Now the FDIC chair is riding to his rescue: she wants to stop 1.5mn foreclosures by spending ... $24bn. That's $16k per foreclosure. Actually, it's 2 mn loans that are being worked on, so that's "only" $12k per loan.

This is based on what has been happening at IndyMac, one of the failed banks. Basically they've refinanced the system (5 400 loans involved), but the people who took out the mortgages still will be paying no less than 38% of pre-tax income (that's an important distinction: that's more like 50%+ post-tax income!). Given that the classic rule is no more than 28% of pre-tax income, it sounds like just a tad more than the classic rule: the problem is that this breaks the bank, so to speak. The marginal increase makes it extremely difficult for those already so deep in the hole to get out. It moves the burden from unbearable to onerous, from a situation where people literally couldn't pay to a situation where they can't afford to pay and have a life that has even a semblance of being normal.

To repeat, these are mortgages that should never have been granted in the first place. What are the expected default rates?

According to the FDIC, 40% are expected to re-default. Private estimates place the default rate at over 50%. There will be an incentive program for private refinancing, but taxpayers still pay when those loans default.

Sorry. This is throwing good money after bad. Rather than refinancing everything, why aren't the obviously bad loans being terminated? If the 40% that the FDIC expect to go bad are factored out, that's $9.6bn.

Close enough for government work, I suppose.


Seriously, are they insane? Loans were made to those who cannot afford them, could not afford them, and will never be able to afford them. Default rates of 40%-60% mean that these loans are the ultimate junk, the ultimate scrap. They are throwing away at least $10bn just to try to save the other 60%: this is nothing more than white-washing the problem, of desperately hoping that 60% of the loans won't go tits-up and devolve entirely to the taxpayer.

There is also an enormous moral hazard here (like Congress has any idea of what moral hazard even is, let alone an inkling of what it means): why should those who committed fraud (misreporting income is fraud when you are applying for a loan) be aided by the taxpayer? Further, if such policies take root, there is a positive incentive for marginal home-owners, those who are in far above their pay scale but not directly at risk of default, to cease payments with the sure knowledge that the taxpayer will pick up refinancing costs. This encourages exactly the kind of behavior that got us into the trouble to begin with.

Are they insane?


Well, not really. What they are is completely and totally ignorant of any of the basics of accounting and economics.

This is the problem that the Democratic Party and their policies have created: it's a problem that they are completely and totally incapable of handing, since it also means abandoning those policies and admitting that they were wrong. Too many careers and too many reputations have been built on this facade of fraud and deception. Nothing will change as long as people like Barney Frank remain where they are.

And what they are: the lunatics are indeed running the asylum.

Are They Insane???

This surprised me.

I lived in Chicago for six years when I was a kid, and until recently had a kid sister living there; my folks retired on the other side of the lake, and Chicago's a great town.

It'd be even better if it wasn't for the legendary corruption and malfeasance of its politicians, though.

One constant throughout the last 50 years in Chicago, though, is something that no Chicago politician dare ignore except at his mortal peril: snow removal. Chicago lies directly in a massive weather pattern, where frigid polar air comes down from the North, crossing Lake Superior and picking up moisture from the extensive forests of Canada. This cold air hits the relatively warm barrier of Chicago and its environs, as well as Lake Michigan, and this forces the clouds up: they dump weight to climb, and the result is snow. An average of 38" a winter, with a minimum of 9.8" and a maximum of 89.7". That's a lot of snow.

Lots of snow. I remember blizzards from when I was a kid, where it was impossible to see anything beyond 30 feet and less, and where snowdrifts completely buried our VW bus as it was parked next to the house. Drifts extended up to the second floor (first floor for the European readers) of our house, and there was one Christmas where we literally didn't go outdoors for 4 days because of the heavy snowstorms.

Hence: snow removal is something that the good citizens of Chicago except in return for their taxes. It's the litmus test of Chicago politicians: fail this, and your career is over. Manage it well, and you're in for life, basically (not "in" as in jail, but rather you'll be re-elected for as long as you keep your part of the deal).


But this quote was intriguing:

City Department of Streets & Sanitation Commissioner Michael Picardi, according to the release from Streets & San, pointed out that Monday's moderate snow, which brought 2 1/2 inches to the North Side and 1 1/2 inches to the South Side, still cost $490,000 to clear because of high costs for equipment ($143,000), salt ($295,000) and workers ($51,000).

"Our full route system covers 9,456 lane miles and during a full snow program is patrolled by 274 snow-fighting trucks which use gasoline, spread salt and are operated by salaried drivers, so costs will naturally mount whenever we go out," Picardi said. "Our challenge is to find as many ways to provide this important service while still working to reduce costs."

Now, correct me if I am wrong: salaried workers are a fixed cost, something that belongs to overhead: the equipment is also a fixed cost. Why then does Picardi say that costs will "naturally" mount whenever they go out? The only "real" cost is the $295k for salt.

The real reason behind this is prepping the public for yet another tax hike. That's the one place where the public is really willing to pay, but it then begs the question of exactly how the city is calculating the costs.

So, to answer the question "Are They Insane?": no, they're not. If anything, they're praying for more and more snow, since that will give them the justification to ... raise taxes.

The Poison of Media Bias...

Two articles in the WSJ underscore the problem of media bias. Not just in the US, but also abroad.

The core of the problem here is "activist journalism", which I remember being taught at my one journalism class when I did my undergraduate degree. We spent most of the time learning the basics (who, what, when, where and why) and learning to write small columns parsimoniously.

Then there was a guest speaker. Can't remember who it was anymore, but he was hugely entertaining, telling us how we could change the world by shaping public opinion, and of course we needed to do that by going after The Man, The Establishment. Was, of course, a professional journalist.

Who doesn't deserve the name because of the mixture of opinion and facts. As bloggers we can do that: no one expects, to paraphrase Joe Friday, "Just the facts, ma'am".

The problem is that media bias is poisonous and insidious and increasingly resembles either the hagiographic obscenities of the Stalinist kept press or the vitriolic hate-mongering of what is euphemistically called the "Sturmer" press (the pet journalists of the Nazis) or what passed for journalism under Mao and the Soviets and their captive puppets.

In other words, it's nothing more than propaganda. We've been fed a constant stream of it, cloaked in the remnants of what once was a rightfully proud profession, one that is destroying itself because it is incapable of reform and recognition that they have more often failed to report the news properly.

The New York Times still refuses to admit that its Pulitzer-prize winning reporter was a stooge of the Soviets, reporting that there was no famine while millions died for purely political reasons (and the Ukrainian famine was a purely political famine, designed to forever break that country's independent farmers and landed gentry: it worked because it killed most of them off).

The poison of a small innuendo here and a false reportage there, coupled with deciding that contrary evidence isn't "newsworthy" is slow and insidious, like small doses of arsenic mixed in food. No one understands then how someone healthy can then slowly waste away, unless "there is something wrong with them".


If you're a journalist today and don't ask yourself why journalists are held in such low esteem, then you are not doing your job.

If you're a journalist today and decide to toe the line and not report on, for instance, the corruption in the Democratic Party, then you are not doing your job.

If you're a journalist today and think that terrorists have a right to be heard and understood, then you are not doing your job.

If you're a journalist today and believe that it's better to go with the flow and save your critical thinking for another day, then you are not doing your job.

If you're a journalist today and think it's better to have good relations with "highly-placed sources" and to repeat what they tell you, rather than finding out what is really going on, then you are not doing your job.

If you're a journalist today and think it's perfectly okay to be discriminating in what you report and to push an agenda, then you are not doing your job.



If you're a journalist today and can look yourself in the mirror without wincing, then you are the problem.

Another Accomplishment of President Bush...

As President Bush prepares to leave office, there is one "accomplishment" that virtually none are even aware of.

I use quotes around "accomplishment" because he really didn't have anything to do with it, but like so many things that happened on his watch, he'd be blamed ordinarily for what has happened. But this is a case where there will be no voices raised in condemnation and disdain, but rather the whole thing is being very quietly shoved under the carpet with the hope that no one will notice.

President Bush was first elected 8 years ago.

Since then, global temperatures have been falling.



Jeez, don't you think that he'd get at least a little respect out of that one? For all the watermelons out there, the gospel is that warming is here and incontrovertible, the science is settled, and unless we spend all our wealth working against global warming, the human race, if not the whole biosphere, is doomed to die a death of heat exhaustion. The planet will end up a hothouse world, much like Venus.

But global temperatures have been falling for the last 8 years.

Then why is there still the hue and cry, the call to arms to save the world?



Because for many, it's a great way to make money. Read this and see. It's a review of a book called Red Hot Lies: How Global Warming Alarmists Use Threats, Fraud and Deception to Keep You Misinformed.

Quotes:

...we are getting a one-sided discussion of climate change because most media outlets, politicians, activists and a substantial section of big business have – in a variety of ways – got an interest in keeping it that way. ... 'This affirms a world view of many people: "Man is wretched, an agent of doom"; "There's just about enough of [the moral people] and way too many of everyone else"; "Markets are horrible and the state needs to be much bigger"; "Development is terrible". All of those movements find refuge in the global warming industry.'

On politicians:

'[Global warming] allows them the option of cheap virtue – cheap to them, expensive to us – of satisfying constituencies for something that's never solved. They get to emote and spend; there's something in it for everyone.' And rumour has it that they now get to bypass the legislature, too. ... there is talk that Barack Obama will attempt to get a climate change treaty ratified by simply reclassifying the necessary legislation as an 'executive agreement', making passage through the Senate considerably easier. That would be at odds with the spirit of the American Constitution, which demands the Senate's 'advice and consent' on major treaties.

And on the commitment to scientific research and the remorseless search for the truth:

The result ... is an outlook in which criticism of the global warming consensus is regarded as heresy. The world, we are told, is going to burn unless a particular set of emissions-restricting policies are introduced. Anyone who even dares suggest otherwise is ridiculed or smeared as being in the pay of Big Oil – a baseless slander .... Meanwhile, the wealthy benefactors and corporate interests that have the potential to gain enormously from climate change legislation are barely mentioned.

Go and read the rest: it is a lesson in human gullibility, culpability and cynicism.

What People Don't Understand About Economics...

One of the things that many don't understand about economics is that there can be time lags in causal chains.

Sometimes very, very long time lags as effects build up over time and then overwhelm the markets and companies.

We've seen this with the subprime crisis: those defending the CRA and the whole subprime system often claim that because there was no direct and immediate effect on, say, banking balance sheets, that the subprimes were not the cause of the current financial crisis.

These people don't understand lag effects, and how small problems snowball into larger ones when they cumulate over a longer period of time. You can't point to a single subprime loan or CDO that triggered the problem, but that doesn't mean that these aren't the problems: rather, it becomes a question of critical mass, where the obligations entered into overwhelm a contractual party's ability to pay or react.

The same is true for the Big 3.

This in the WSJ pointed me in the right direction.

It's not so much that the UAW workers get paid too much - their wages are basically in line with other wages, making the operative part of the Big 3, in terms of wage costs, competitive with their US counterparts from Toyota, Honda, BMW and others. The problem is the liabilities that the Big 3 took on in order to avoid labor strife with the UAW.

The problem is when you include benefits, and gets significantly worse when you include retirement benefits. For the Big 3, for each current worker there are no less than 3 retired workers, and the current benefits differential between base pay and employer costs is larger than the base pay: the differential is $29/hour, with wages averaging $28.

What really went wrong? To quote from the article:

Both management and unions chose to sign contracts that let them live better and work less efficiently in the short-term while condemning the companies to their current pass over time. It is deeply unfair for government now to ask taxpayers who have never earned such wages or benefits to shield the UAW and Detroit from the consequences of those contracts.

It really is as simple as that. Ignorance of lag effects, of how small things snowball to create the perfect storm. The editorialist at the WSJ is dead on: the danger is, once again, a problem of not understanding lag effects and how small individual actions will create an even worse situation: socialization of bad business decisions is an extremely dangerous path, leading to moral risks as companies learn how to use the government as buffer. Boeing, for instance, has bet the company several times in the past, leading to such successes as the B-17, the 747 and the 787; Airbus hasn't bet the company on anything, but has rather always been betting the European taxpayer's money on its products. If you don't understand the fundamental difference between the two, then you will be compelled to an economy that is inefficient and counter-productive.

Such an economy fails to provide the growth needed to provide good wages and high levels of employment. Not understanding this isn't an error of omission, but leads to the sins of commission, of taking actions that in the short-term and for a small group appear to be sensible, but in the long-term and for society as a whole are not merely dangerous, but rather downright criminal.