The "Global War on Terror". NOT!

Last Thursday, it was the British Foreign Secretary David Miliband who gave the real speech--not president Bush.  

In that speech, which was on the final day of his visit to India, Secretary Miliband noted that:

Terrorism was not invented or started on 9/11. But since then, the notion of a "war on terror" has defined the terrain. The phrase had some merit: it captured the gravity of the threats we face, the need for solidarity amongst allies, and the need to respond with real urgency - and where necessary with force.

But for a couple of years now the British Government has used neither the idea nor the phrase "war on terror". The reason is that ultimately, the notion is misleading and mistaken. Historians will judge whether it has done more harm than good. But we need to move on to meet the challenges we face.

The issue is not whether we need to attack the use of terror at its roots, with all the tools available to us. We must. The question is how we best do so.

The notion of a war on terror gave the impression of a unified, transnational enemy, embodied in the figure of Osama Bin Laden and the organization of Al Qaeda. In fact, as India has long known, the forces of violent extremism remain diverse. Terrorism is a deadly tactic, not an institution or an ideology.

The global threat from violent extremism has become more real because technology enables terrorists to connect more easily with each other, whether to plot and plan or to ape each other's tactics and techniques. But it is also more potent because Al Qaeda and its ilk seek to aggregate different local, regional and religious problems into a single complaint: the alleged oppression of Muslims around the world.

Yet the motivations and identities of terrorist groups - from Hizbollah to the Taleban, Tamil Tigers and Lashkar e Toiba - are disparate not singular. The more we lump terrorist groups together and draw the battle lines as a simple binary struggle between moderates and extremists or good and evil, the more we play into the hands of those seeking to unify groups with little in common, and the more we magnify the sense of threat. The trap to avoid is inadvertently sustaining Al Qaida's propaganda - their claim that disparate grievances add up to a unified complaint. We should expose their claim to a compelling and overarching explanation and narrative as the lie that it is.

Bailout for the porn industry. ha ha ha

Yes, this is a couple of weeks after the news item.  But, it was interesting to read Daniel Drezner's comments on this:

Flynt and Francis do make one penetrating insight in their complaint -- adult entertainment sales and rentals are shrinking much more quickly than overall DVD sales and rentals.  So it would be fair to say that compared to mainstream Hollywood, the adult entertainment sector is getting pounded.  Unless the economy can manage to mount a robust and vigorous upturn sometime soon, it makes sense for the adult entertainment industry to beg for a more direct and forceful stimulus package.

As I was reading it, I was sure that Drezner meant the double entendre "all the way".  I mean, look at the words he uses in the post: "penetrating", "shrinking", "getting pounded", "mount", "forceful stimulus package" ..... good going Professor Drezner :-)

BTW, the title of that post? "Things are hard all over the economy".  I tell you, university professors have a great sense of humor, despite popular myths!!!!

Maybe this is what Megan McArdle meant when she blogged that it is not possible to discuss the economics of the adult entertainment industry without the double entendres ....

Obama, India, race, and caste

India has a long history with the caste system.  Sometimes I think that the system will somehow, and unfortunately, survive even all the globalization, which otherwise is one hell of an equalizing force.  Lakshmi Chaudhry has more on this:

Many Indians believe Obama's victory makes all things possible for people of color everywhere--including the many American grandchildren, nieces, nephews and cousins who, thanks to globalization, are part of the Indian extended family. "My granddaughter can now be president of the United States," boasted a university professor who was shopping at the local mall in Bangalore, echoing the sentiments of my mother, an aunt and her neighbor.

And yet for all the rhetoric about America's racist history, Indians have preferred to avoid any mention of our ever-present racism. There's been nary a word on the cognitive dissonance between all this Obama-love in a culture that refers to people of African origin as habshis, an epithet as offensive as the N-word. Like all well-indoctrinated postcolonial subjects, most Indians regard Africans with contempt for being poor, "backward" and, above all, black--a cardinal sin in a nation obsessed with skin color. ("Fairness" creams remain the top-selling cosmetic on the Indian market.) Sure, Obama was one of "us" when he was running for president. But he wouldn't be if he were one of the many African students in, say, Delhi struggling to rent an apartment or hail a cab.

Only Sunday and Monday left for pardons!

I was driving back home when I listened to the president bid his adieu in which he reminded us about the very successful two-terms in which he made all the tough decisions on behalf of us.  It felt like he was telling us that in order to make sure that we would rather take up the president-elect's advice to look forward and not backwards.

Which is why I like the following comments by Christopher Hayes:

1) Yesterday, AG designee Eric Holder said, without hesitation that water-boarding is torture.

2) Dick Cheney has admitted authorizing water-boarding.

3) Dick Cheney has admitted authorizing torture.

4) Torture is a felony under US law punishable by up to 20 years of prison.

5) Dick Cheney authorized a felony.

QED, right? Is there any other way to reason through these premises and deductions?

The worst is yet to come?

So, Circuit City is officially liquidating.  Bloomberg reports that

 Circuit City Stores Inc., the bankrupt consumer-electronics retailer, hired four liquidators to sell all the remaining merchandise in 567 stores before it goes out of business, the company said today.

Circuit City signed an agreement with retail liquidators Great American Group WF LLC; Hudson Capital Partners LLC; SB Capital Group LLC; and Tiger Capital Group LLC, the company said.

The announcement comes a day after the company held an auction it billed in court papers as its last chance to survive bankruptcy as an intact, though smaller, chain.

“We are extremely disappointed by this outcome,” said James A. Marcum, acting chief executive officer, in a statement. “The company had been in continuous negotiations regarding a going-concern transaction. Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders.”

I shudder to think that this blood-letting will continue on throughout 2009, and maybe even into 2010.  

The latest issue of Foreign Policy has commentaries from five "doomsayers" whose bottom line is that it ain't over yet.  Looks like they want us to understand that this is a lull before the second and final storm blows through and levels out some of the structures made unsteady the first time around.

Excerpts from a couple:

Dean Baker:

once the financial situation begins to return to normal (which might not be in 2009), investors will be unhappy with the extremely low returns available from dollar assets. Their exodus will cause the dollar to resume the fall it began in 2002, but this time, its decline might be far more rapid. Other countries, most notably China, will be much less dependent on the U.S. market for their exports and will have less interest in propping up the dollar.

For Americans, the effect of a sharp decline in the dollar will be considerably higher import prices and a reduced standard of living. If the U.S. Federal Reserve becomes concerned about the inflation resulting from higher import prices, it might raise interest rates, which could lead to another severe hit to the economy.

Nouriel "Dr. Doom" Roubini:

The global financial pandemic that I and others had warned about is now upon us. But we are still only in the early stages of this crisis. My predictions for the coming year, unfortunately, are even more dire: The bubbles, and there were many, have only begun to burst.

The prevailing conventional wisdom holds that prices of many risky financial assets have fallen so much that we are at the bottom. Although it’s true that these assets have fallen sharply from their peaks of late 2007, they will likely fall further still. In the next few months, the macroeconomic news in the United States and around the world will be much worse than most expect. Corporate earnings reports will shock any equity analysts who are still deluding themselves that the economic contraction will be mild and short.

Eyeless in Gaza

Roger Cohen's short piece in the NY Review of Books has a title that is a play on the old idea that an eye for an eye will end up leaving everybody blind.  Actually, Cohen has an even better metaphor to describe the tragic and atrocious Israeli military campaign in Gaza: "As Avi Shlaim, a professor of international relations and former soldier in the Israeli army, has observed, the Gaza offensive "seems to follow the logic of an eye for an eyelash."

Cohen writes that: 

Only in the Middle East do the dead rule. As Yehuda Amichai, the Israeli poet, once observed, the dead vote in Jerusalem. Their demand for blood is, it seems, inexhaustible. Their graves will not be quieted. Since 1948 and Israel's creation, retribution has reigned between the Jewish and Palestinian national movements. 

So, what is the alternative to sweatshops?

It was in my second year as a grad student at USC that I first interacted with Professor Harry Richardson--I was enrolled in his class.  A fellow student complained about the labor conditions in the maquiladoras.  Harry, who later was my dissertation adviser, asked what the alternatives were if those factories were ordered closed because of conditions that are not ok by our standards.  I can even now picture the class in my mind, and the student who brought up the point had no answer--she seemed kind of stunned that somebody could ask such a question.  Kristof's column on sweatshops essentially is a restatement of Harry's remarks.

Maybe I remember it so well because I think that was the year I know I started losing belief in ultra-left policy alternatives--like many, I too quite seriously sympathized with leftist idea(l)s when I was in India.  Graduate school was the time I read and discussed a whole range of political/economic/philosophical ideas, starting with my roommate, Avu, who was in the doctoral program in the business school.  The facts didn't quite match up with the rhetoric of the left.  Slowly I started drifting towards the middle.

The political journey hasn't ended yet, and for all I know I might hit the reverse gear too.  As of now, and thanks to Camille Paglia, I now have a label to describe myself--a Libertarian Democrat!  (Can't remember where I read it a few years ago, and I can't seem to track it down.  She said that before Kos used that phrase.)

The Civil War in Sri Lanka

Out of sight, out of mind.  That seems to be the bottom line when it comes to the crisis in Sri Lanka.

 

A civil war has been raging in the former Ceylon since 1983, despite several attempts by outsiders to diffuse the tensions and to put an end to the conflict.  The rebel group, the Liberation Tigers of Tamil Eelam, and referred to as the Tamil Tigers, has adopted a violent approach to achieve an autonomous homeland for the ethnic Tamils who, it alleges, are discriminated against by the majority Sinhalese.  The Sri Lankan government, over the years, has attempted to squelch the rebellion without much success.  

Until recently.

 

For the first time after many years, the Tamil-dominated Jaffna Pensinsula, in northern Sri Lanka, is now under the control of the Sri Lankan army and government. The Tamil Tigers are now boxed into an area of just over 200 square miles—much smaller than the area that they controlled up until the latest military offensive.    

 

International groups watching the war rather helplessly from the sidelines are worried about the fate of civilians, which is my concern too.  The government, sensing that an ultimate military victory might be within reach—something that has been quite unimaginable over the 26 years—has apparently banned aid groups from entering the war area and assisting civilians.  

Reuters reports that “aid agencies say there are about 230,000 refugees in the war zone, where rights groups say the Tigers are keeping them as human shields.”  

Of course, the Tamil Tigers flatly deny that civilians are being used as shields. 

 

It is not only Tamils who are being caught in the crossfire.  A Sri Lankan newspaper editor, Lasantha Wickrematunge, a Sinhalese himself, was shot dead while he was on his way to work.  Ironically, it was not the Tamil Tigers who killed this journalist, even though he has described the rebels as “among the most ruthless and bloodthirsty organisations to have infested the planet.”  

While the killers are yet to be identified, it is believed that Wickrematunge was a target because he was highly critical of the government’s handling of terrorism in his country.  Wickrematunge predicted his end in an editorial, where he wrote that "When finally I am killed, it will be the government that kills me."

 

Wickrematunge’s death and the ongoing war highlight how much the ferocious fanaticism of the rebels is being matched by the government's, and how civilians—Tamils and Sinhalese alike—are paying a huge price for this mano a mano behavior. 

 

Over the Christmas break, I was in Chennai—the capital of Tamil Nadu, and the largest city in the state.  “Tamil Nadu” means the “land of the Tamils” and, as one would surmise, there is, therefore, immense sympathy for the Tamils in Sri Lanka.  There were public demonstrations urging the government—at the state and federal levels—to act in order to help both the Tamils and the Sri Lankan rebels. 

 

Of course, while there is enormous sympathy for the Tamil civilian population in Sri Lanka, the same cannot be said for the Tamil Tigers—after all, this same rebel group was responsible for assassinating India’s former prime minister, Rajiv Gandhi, back in 1991, at an election campaign rally only a few miles south of Chennai. 

 

Yet, I find that there is very little coverage in the US of this serious development.  I do not think there has been a statement on this from our State Department and White House, either.  

Granted that this news item has to compete against updates on the global economic meltdown, the presidential transition, or the situation in Gaza. But, even the controversy over Russia turning off the flow of natural gas to Ukraine and other European countries gets more coverage, not to speak of the hours that were spent on the recently concluded Golden Globes. 

 

I would think that the Sri Lankan situation where hundreds of thousands of civilians are caught in the crossfire merits our attention.  However, and unfortunately, it turns out that the importance of destruction of life and property depends on the geographic area where that happens. 

 

William Shakespeare said it best, although in a different context: “there is something rotten in the state of Denmark.”

update: this was published in the Register Guard on January 19, 2009, under the title "Sri Lanka flies under the radar"

Politics better than sitcoms :-)

From Reason:

Recently-elected Rep. Eric Massa (D-N.Y.) recently conducted an odd stunt to promote some electric car technology apparently being developed in his district. He wanted to drive an electric car from his district to his swearing-in at the Capitol in D.C. Problem is, the distance between those two points is out of the car's range. So here’s what he did:

Massa drove one fuel cell car while a hybrid SUV towing an additional SUV followed along. Once he got half way, he switched to new fuel cell car. The empty fuel cell was then towed back by the first SUV. As he continued on his journey, the second SUV followed. Once Massa arrived in DC, the second SUV then towed the second fuel cell car back to NY.

So Massa wasted several times the amount of energy he needed for 300-mile trip . . . in order to make a point about the importance of conservation and alternative energy. Sadly, Rep. Massa's capacity for theater and obliviousness to reason likely means he's on his way to a very successful career in politics.

Three reasons for Sanjay Gupta

Leave it to the Economist to succinctly summarize three reasons why Sanjay Gupta is a good choice for the Surgeon General position:

First of all, he is not merely a pretty face. He is a qualified neurosurgeon who practises his craft and holds a post at Atlanta’s Emory University. Second, doctors with roots in the subcontinent are greatly over-represented among the country’s medical establishment but have long felt neglected. Elevating a prominent Indian-American may help Mr Obama court America’s medical lobby, which has traditionally been hostile to reform.

But the biggest reason to think Dr Gupta may succeed is the fact that the only real power the surgeon-general has is the use of his bully pulpit to promote public health goals, such as healthy eating and stopping smoking. Some previous holders of the post were vocally so clumsy that they lost their effectiveness or their jobs: Joycelyn Elders was sacked by Bill Clinton for encouraging the teaching of masturbation. Others have been grey men who failed to get media attention. That, at least, is a problem Dr Gupta is unlikely to have.

More about the Illinois Senategate

Next disaster: Pensions

A few months ago I blogged about reports that were quite forceful with arguments that underfunded pension systems will be the next disaster to hit us.  We might have made promises that might just become too difficult to keep.

This report in Reason is the latest to expand on that argument.  

 State, local, and private pension plans covering millions of government employees and union workers with “defined benefit” accounts are teetering on the brink of implosion, victims of both a sinking stock market and investment strategies influenced by political considerations.

From January to October 2008, defined benefit funds—those promising a predetermined amount of retirement money to the payee—averaged losses of 26 percent, according to Northern Trust Investment Risk and Analytical Services, making it the worst year on record for corporate and public pension funds. The largest public pension fund in the United States, the California Public Employees Retirement Security System (CalPERS), lost a staggering 20 percent of its value in just three months last year. In May 2008, Vallejo, California, became the largest city in the state ever to file for Chapter 9 bankruptcy, thanks largely to unmanageable pension obligations. The situation in San Diego looks worryingly similar.

So, this is a Depression, not a Recession?

Economists and politicians alike are afraid to even utter the "R" word, so we wouldn't expect them to use the "D" word at all, even if in the back of their minds they are thinking that this is an awful economic depression.

It looks like that is not the case anymore.

Here is Paul Krugman:

Let’s not mince words: This looks an awful lot like the beginning of a second Great Depression.
So will we “act swiftly and boldly” enough to stop that from happening? We’ll soon find out.
We weren’t supposed to find ourselves in this situation. For many years most economists believed that preventing another Great Depression would be easy.

And, Tyler Cowen:
Eight reasons why we are in a depression

1. We have zombie banks.
2. There is considerable regulatory uncertainty in banking and finance.
3. There is a negative wealth effect from lower home and asset prices.
4. There is a big sectoral shift out of real estate, luxury goods, and debt-financed consumption.
5. Some of the automakers are finally meeting their end, or would meet their end without government aid.
6. Fear and uncertainty are high, in part because they should be high and in part because Bush and Paulson spooked everyone.
7. International factors are strongly negative.
8. There is a decline in aggregate demand, resulting from some mix of 1-7.

I got the link to Cowen from Megan McArdle, who writes:

My reasoning for thinking of this as a depression, rather than a recession: roughly, that we don't understand how to get in or out of it. The recession of the early 1980s was very deep, but we knew pretty much what caused it, and hence how it would end. Even the 1970s slump had an obvious proximate cause in the oil shocks. This kind of perfect financial storm is a rarer bird, and no one has plausibly claimed to have mapped the way out yet.

Gran Torino

It is awful that Hollywood waits until the end of the year to release its good movies--the kind of movies that eventually show up in the Oscar nominations list.  We then have to squeeze in so many movies into a very short time period before they disappear from the cinema halls--yes, we can watch them on DVDs later, but there is something special about watching the movies in a big theater with a bunch of others.

So, this time it was Gran Torino.  

For the most part, it was a neat movie.  But, at many places, it was stilted and put-on.  It did not have the kind of nuances that Eastwood played with in Million Dollar Baby, even though there were plenty of opportunities.  The old man's shift to tolerating and liking his Hmong neighbors was quite sudden, compared to the personality we were made to understand.  

I liked the way the movie ended, though it would have been better if the storytelling had involved a little bit more of the character being introspective--the nuances that I miss.  

Later, as I was driving back home, I thought that maybe the movie was the right one for the times for another reason: the "big three" are still stuck in the years of the Gran Torino, while the auto market itself had moved on to Toyotas, Hondas, and Hyundais!