The Mound of Sound

Beijing has named China’s price for getting serious about greenhouse gas emissions. It wants the “developed nations” to allocate 1% of their GDP to a fund to help poor nations fight global warming. China is also demanding that the industrialized nations commit to a transfer of green technology to less advanced states, presumably including China.

China’s “you first” gambit doesn’t come as a huge surprise. They’ve been arguing all along it was up to the industrialized nations to commit to cutting carbon emissions before expecting the developing nations (i.e. China and India) to follow suit.

The Chinese announcement is pretty specific on what it wants from the Western world but it’s also extremely vague on what China will commit to do in exchange and how it will deliver on any promises it may make.

From the lead toy scandal to the melamine-tainted food scandal, the world has seen that Beijing doesn’t have its own house in order. How does the central government think it can enforce its promises to cut carbon emissions?

When it comes to China, there’s a huge and well-deserved confidence issue. It’ll be interesting to see how the Chinese attempt to overcome that hurdle.

http://www.enn.com/business/article/38506

Is a national army viable in a country that is riven with tribalism?

Rivalries are endemic in tribalism. Afghanistan has five main tribes – the Pashtun (including Balochs), Uzbek, Tajik, Turkmen and Hazara along with a smattering of Kurds and a few others. They represent a diverse patchwork of ethnicities – Persian, Oriental, South Asian – vestiges of centuries of war and conquest. The tribes, in turn, are organized around the authority of warlords who, during the Soviet and Taliban eras, operated some pretty powerful militias. These are people and leaders steeped in civil strife and armed conflict.

How can a national army be any more viable than the national government it serves? History shows it can’t and history also shows that, in the absence of a viable national government, some militaries have stepped into that power vacuum to take control themselves. South Vietnam, Pakistan, Central and South America, the list goes on.

In Afghanistan, we’re counting on the creation of a sufficiently large, adequately trained, effective Afghan National Army as our way out of that place. That is our only exit strategy.

So just how is the ANA doing seven years after the Taliban was sent packing? NATO commanders say when they get the Afghan army in the field, they’re not bad at all. Beyond that, we don’t hear much about the ANA.

In the early years, the Afghan National Army was plagued with high desertion rates. No one knows what the desertion situation is now because that information is no longer given out. A story in yesterday’s Toronto Star pointed out that the Taliban are now using bribery to fuel desertion and undermine the Afghan army. “…U.S. and Canadian mentors complain privately about the slovenly appearance and lack of discipline among soldiers in the Afghan army. There are also complaints about petty theft, mistreatment and infiltration of the army by Taliban spies.”

An immediate concern is the state of the central government in Kabul. Despite the assistance provided by NATO and the US military, Hamid Karzai has been a dismal failure at extending the government’s control much beyond the capital. That creates power vacuums throughout the countryside that, as expected, are being filled by various ne’er-do-wells. Forget the Taliban, how is the central government going to dislodge these other rivals?

Even the wardrum-beating National Post has finally caught on to the state of affairs in Kandahar. Yesterday the paper reported that the Taliban have established a parallel government that operates pretty much throughout Kandahar as they please.

It’s always been my view that nothing we did in Afghanistan could make any real difference unless and until there was a viable central government in Kabul. A country needs a backbone and, in this case, it’s struggling without one. Training an army is a great idea – if it has an effective government to serve. What if it doesn’t? With the insurgency growing and new groups joining in with the Taliban, I don’t think we’re going to have to wait too long to see how long the Afghan army can function in a political vacuum.

The world is abuzz with rumours of impending war between Iraqi Kurds and Arabs. The International Crisis Group has come forward with a suggested settlement that would see the Kurds suspend their claims on Kirkuk for a decade in exchange for exclusive rights to the oil reserves in their region.

The New York Times reports that American commanders fear that a mission now underway in Mosul, “could degenerate into a larger battleground over the fragile Iraqi state itself.”

“The problems are old but risk spilling out violently here and now. The central government in Baghdad has sent troops to quell the insurgency here, while also aiming at what it sees as a central obstacle to both nationhood and its own power: the semiautonomous Kurdish region in the north and the Kurds’ larger ambitions to expand areas under their control.

“The Shiite-led government of Prime Minister Nouri al Maliki is squeezing out Kurdish units of the Iraqi Army from Mosul, sending the national police and army from Baghdad and trying to forge alliances with Sunni Arab hard-liners in the province, who have deep-seated feuds with the Kurdistan Regional Government led by Massound Barzani.”

…the American military has already settled on a policy that may set a precedent, as the United States slowly withdraws to allow Iraqis to settle their own problems. If the Kurds and Iraqi government forces fight, the American military will “step aside,” General Thomas said, rather than “have United States servicemen get killed trying to play peacemaker.”

It’s hard to imagine how the US military would react if it had to get involved. It’s notionally obliged to support the government, that would be Maliki’s Arabs, but Washington’s closest allies in Iraq are the Kurds.

The real thorn in Maliki’s side is the city of Kirkuk and the oil-riches in its vicinity. The Kurds are claiming Kirkuk as part of their territory. Referenda to settle the issue have been scheduled and postponed at least twice.

The seeds of Arab/Kurd unrest were sown in the constitution of the Kurdish Autonomous Region written with the assistance of American foreign service expert, Peter Galbraith, back when Saddam was in charge. In the wake of Saddam’s removal, the Kurds threw their constitution in the face of the provisional administration of Bremer as a “done deal.” Eventually the Kurds succeeded in forcing Baghdad to incorporate the Kurdish constitution into the Iraqi constitution. There it’s been sitting, a ticking time bomb, ever since.

The International Crisis Group warns, “The most likely alternative to an agreement is a new outbreak of violent strife over unsettled claims in a fragmented polity governed by chaos and fear.”

For those either so ill-informed, unaware or completely gullible – your surge really didn’t bring peace to Iraq. No, it didn’t settle anything, nothing. There was just a temporary lull in the mayhem as the parties went on about their business and prepared for what they saw coming. That goes for Maliki and his Badr Organization, Sadr and his Mahdi Army, the Sunni and their insurgent militias, the Kurds and their Peshmerga. It took a pretty infantile outlook on Iraq to believe that the Bush surge had accomplished anything.

I think it was Joe Biden who endorsed a “3-state” solution for Iraq and was mocked for it by John “Victory” McCain. In fact, if you understand the issue of the Kurdish constitution and its major, unresolved inconsistencies with the Iraqi constitution, the 3-state solution is actually the default option. Just don’t tell the Old Geezer, it would break his heart.

I oughta be rich right now, a multimillionaire at least, maybe even a billionaire. I oughta be basking in comfort and luxury, having to worry about whether I would spend next week at my beachfront villa on Maui or my suite in Rio. Hmmm, decisions, decisions.

If only someone had told me a few years back that, for just pennies on the dollar, I could buy a bet, at 20 to one odds no less, that the US housing bubble would burst. Imagine, a “bubble” bursting? Just like every bubble before it has burst? What are the chances?

So I buy the ultimate no-lose bet for just pennies on the dollar and reap an insane windfall when one morning I get up and discover that, golly gee, the housing bubble has burst.

But no one ever came to my door asking if I’d be interested in picking up a few Credit Default Swaps. I didn’t receive any flyers offering to let me win big by betting that the American housing bubble would burst. Not even any telephone solicitations.

Hell, I’d never even heard of Credit Default Swaps until I saw Steve Croft explain how the damned things are at the heart of the American financial meltdown that’s bringing recession to every industrialized nation on the planet.

Now these Credit Default Swaps are just a decriminalized form of grand larceny. In fact, until McCain cronie and sometime economic advisor Phil Gramm used his position as then Chairman of the senate banking committee to introduce and push through a law that literally pulled America’s pants down around its knees and pushed it right over a barrel, these bogus insurance side bets were very much illegal. Why they were big time, felony illegal.

Maybe that’s why we didn’t hear of Credit Default Swaps until the meltdown. I figure they were just for “insiders.” I mean they were too good to be real and, if the public had known that someone was fool enough to take bets against a bubble bursting, the demand for them would have been so great and widespread that the whole house of cards would have collapsed as fast as it went up.

No, there’s no doubt about it. Credit Default Swaps, even though they had been decriminalized, still had to be treated as though they were criminal. They still had to be done under the table, very much on the Q.T. Lowlife like you and me would have killed this Golden Goose.

I visited a pretty credible site today that listed several categories of these CDSs that came to a grand total of – wait for it – just under SIX HUNDRED TRILLION DOLLARS. 60 Minutes only had them pegged at sixty trillion greenbacks but I’m now told that real estate assets were sometimes leveraged up to thirty times their value. Say what? Well that’s how America’s housing stock, which in 2006 was valued at just over $20-trillion all in, could be parlayed into $600-trillion of securitized side bets.

You see, you didn’t have to actually hold the dodgy securitized mortgage to bet against it, to get a Credit Default Swap/Insurance contract. Anybody could bet on it, the more the merrier. That’s how this monster grew. Thirty, fifty, hundreds of people who realized that the wiring was faulty could take out fire insurance on the same house. When it predictably burned to the ground, there were thirty, fifty, hundreds of policies to pay. Weird, ain’t it?

It’s much too late to get in on this scam. That came to an end with the subprime mortgage crisis/housing bubble crisis/Wall Street liquidity crisis-driven US meltdown turned global meltdown.

But wouldn’t you love to know just who was in on it? Wouldn’t it be great to get the names of everyone in the Bush administration, immediate relatives included, and every member of Congress, immediate relatives included, and every major political contributor, immediate relatives included, who did dabble in the Dark Arts of Credit Default Swaps?

You see, you can’t have larceny without thieves. And I suspect that the more we know about who got in on this gravy train and how, the more obvious it is going to be that this was a hell of a lot more than just greed-driven Wall Street adventurism. This reeks of culpability. It screams of an organized effort to fleece the financial sector worldwide.

Remember, these people are still standing in line, awaiting their windfall, wage-earner taxpayer-funded handouts. If the taxpayers are going to fund it, they should at least get a look at who’s raking in the loot. That, I think, will put this villainy in a brand new light and I’m guessing that will make my proposition that these Credit Default Swaps simply be wiped off the books, declared null and void, seem pretty reasonable.

It’s time to name names.

The Canadian Centre for Policy Alternatives has released a poll showing that 39% of Canadians believe they’re but one or two paycheques away from poverty.

From CTV News:

Pollster Environics surveyed 2,023 Canadians for the left-of-centre think tank. It found that Canadians are almost unanimous in their call for governments to protect their jobs.

“A shocking 96 per cent are saying ‘Do something about investing in jobs and skills (and) training right now. Don’t wait until there are better balanced budgets,'” CCPA senior economist Armine Yalnizyan told CTV’s Canada AM on Monday.

The CCPA poll found that:

39 per cent of Canadians think they’re just one or two paycheques from poverty
47 per cent struggle with personal debt regardless of income
44 per cent worry about having enough to retire comfortably
26 per cent say they are worse off than a decade ago

“The interesting thing about the poll is that Canadians looked beyond their own pocketbook issues and said … that governments need to step up to the plate, too,” Yalnizyan said.

She said Canadians look at Scandinavian and European countries’ focus on poverty reduction and say, “Why can’t we do that here?”

According to the survey:

90 per cent want the government to take leadership to reduce poverty
86 per cent believe concrete government action can greatly reduce poverty
81 per cent support reducing poverty by at least 25 per cent over the next five years.

Well, if our Furious Leader, Stevo, is looking for a mandate, there’s one for him. 96% is one helluva mandate, Steve.

Curious that so many Canadians are looking to those awful “Northern European welfare states” isn’t it Steve?

The New York Times reports that Alaska senator Ted Stevens has been found guilty of lying about gifts he received, including major house renovations, from an Alaskan oil contractor.

According to the paper, Stevens was convicted on all seven counts of making false statements on senate financial disclosure documents.

Former top British treasury economist, Sir Nicholas Stern, has issued a blunt warning that the consequences of ignoring climate change far outweigh the global financial meltdown now entrancing our governments.

“The risk consequences of ignoring climate change will be very much bigger than the consequences of ignoring risks in the financial system. …That’s a very important lesson, tackle risk early,” Stern told a climate and carbon conference in Hong Kong.

Most governments badly affected by the meltdown are looking to the tried and tested solution of major capital programme spending to kickstart their flagging economies (my take on this is in an earlier post, “Spending like there IS a Tomorrow”). Stern is adding his voice to the growing choir of those advocating that government use this as an opportunity to advance clean technology:

“The lesson that we can draw out from this recession, is that you can boost demand in the best way possible by focusing on low carbon growth in future,” Stern said, including greater public spending on mass public transport, energy and green technologies.”

http://www.enn.com/business/article/38498

My dear Republicans.

When this is over it would be a good time to clean house. Time for the grownups to take back the Grand Old Party. It’s supposed to be a conservative party in what may just be the most conservative country in the industrialized world. Conservative, as in conserve, as in preserve.

First things first. From now on, “political freak of nature” won’t be an acceptable credential for high office. You’ve had Bush II, you’ve had Sarah Palin, you’ve had it. What have you got, 60, maybe 80-million citizens who consider themselves Republican? They’re not all bozos, they’re not all incurious, they’re not all rabid ideologues.

You really have to stop pissing in the gene pool. Your anti-intellectualism, this absolute phobia about “elites,” is transforming Republican leadership into a carnival sideshow. You don’t have to scrape the bottom of the barrel to find genuine, patriotic Americans.

Being well-educated, well-informed and highly accomplished shouldn’t blacklist a person from the top spots. Understand that your party needs a leader who doesn’t bite when some swindler tells him that deficits don’t matter or who isn’t gullible enough to believe that you can topple a dictator and be in and out in under 90-days at a cost of less than $60-billion. You need a leader who understands that the only thing worse than ‘tax and spend’ politics is ‘spend and borrow’ politics.

Speaking of taxes, try to find a leader who understands what taxes mean to effective government. Maybe you can find one who grasps what Oliver Wendell Holmes meant when he said, “I like to pay taxes. With them I buy civilization.” There must be someone on the GOP shortlist who recognizes that governments need to spend on some things but shouldn’t spend on others like endless wars of whim, especially when they’re spending borrowed money.

Above all else, find someone who doesn’t absolutely cleave to the mysticism of the American myth. Being the first at something is great but it doesn’t permanently endow you with exceptionalism. Go for reality, it won’t bite. And for Christ’s sake get religion out of government.

So run along now, you’ve got some cleaning to do and some trash to take out. Actually, you’ve got a lot of trash to take out.