Moon of Alabama Brecht quote
January 31, 2005

US vs China/Venezuela/Iran ?

In this morning's Financial Times: Venezuela enlists Iran to steer oil to China

Venezuela has enrolled Iran to help it accelerate a strategy to steer its oil exports to China and away from its traditional market of the US. A team of traders from Petróleos de Venezuela (PDVSA), the state-owned oil company, is to be trained in London by Iranian advisers in how to best place oil in Asian markets, according to industry sources. The action is part of efforts by Venezuela, the world's fifth-largest oil exporter, to strengthen ties with China at the expense of the US, with whom relations are strained again after two-years of calm. Iran is Venezuela's closest ally in the Organization of Petroleum Exporting Countries, which at the weekend agreed to keep output quotas unchanged in the short term to support oil prices.

So, what should we make of this?

I know you guys like a good oil conspiracy, and I am sorry to be once again the deflator of your hopes... I'll quote straight from the same article:

In recent weeks Venezuela has begun selling crude and fuel oil to China, in some cases, according to people familiar with the deals, at a discount price to offset shipping costs and render the trade feasible. "Sending oil to China might not be economically viable, but Chávez's motives are not always economic," said a diplomat in Caracas.

Yep, political grandstanding, a Chavez specialty. (The fact is, like Castro before him, he has found it an incredibly easy to add to his (real and already strong, in his case) popularity by taunting the yanquis and getting exactly, each time the reaction he was hoping for: ham-fisted, insulting, and ultimately harmless.) Selling oil to China is not profitable, but it pisses off the Americans, which is always fun. In this case, you get the additional bonus of bringing the Chinese in, which adds another layer of diplomatic convolutions (watching Bushco pissed with the Venezuelans but not with the Chinese for what is effectively a joint taunt can be fascinating)

Mr Chávez, who has been in power for six years, complains that Washington is the centre of an "empire" bent on world domination. He has threatened to cut off oil supplies to the US on several occasions in response to what he asserts are persistent attempts by Washington to meddle in Venezuela's domestic affairs.

Persistent, and very real, these attempts...

Venezuela at the weekend settled an intense, two-week diplomatic dispute with the US-backed government of Colombia after what it claims was a recent US-assisted "kidnapping" in Caracas of a Colombian rebel wanted by Bogotá.

Anyway, to sum it up:

The decision to send oil to China coincides with intensifying concerns in Washington about Venezuela. The US Government Accountability Office, Congress's nonpartisan investigative agency, this month began a study to examine the risk of potential oil supply interruptions from Venezuela. Ali Rodríguez, Venezuela's foreign minister, recently said his country was not seeking to deny oil to the US, but only diversifying its markets.

- In a time of crisis, there is NO WAY that anyone but the US can grab Venezuelan oil; it's in the backyard, no one else can get access,
- in times of peace, it makes sense for Venezuelans to try to get the best deal out of their oil.

If they are stuck with one investor and one buyer (the US) they won't get the best terms; competition is good for them, thus they provide interesting terms to European or other foreign investors, like the Chinese now. It also makes sense to seek to diversify export routes, for the same reason - get a better price on the market. Conversely, the US has an obvious interest to try to get the cheapest possible oil and thus to limit competition.

As a leading South American "lefty" (fighting the IMF and the US presence on the Southern continent, pursuing redistributive policies, etc), and a leading member of OPEC (pushing for higher oil prices), Chavez's Venezuela is pursuing policies that doubly annoy the current US administration, and it is only natural that this geopolitical game lead the US to label him an enemy, when all he is doing is asserting, in his unique, and sometimes quite obnoxious way, Venezuela's national interests, which go directly against the US...

So expect more spats, more tension, but I doubt it will go to war or further destabilization attempts. Chavez survived the 2003 US-supported coup/demonstrations against him, and the local opposition is now really weakened and unable to set a repeat. An outside intervention would unite the country against it. Chavez' biggest worry should actually be self-inflicted wounds, as his erratic policies have sometimes had a high domestic cost. Ultimately, the US need Venezuelan oil, and Venezuela needs the US market.

As for China long a self-sufficient country as regards energy, they are in a very weak situation - suddenly, and pretty much unexpectedly, oil-import-dependent, and they are scrambling to secure new sources of oil - much earlier than had been anticipated. Expect to see them trying to find new friends around the world (Sudan, Kazakhstan, Russia, Indonesia, Venezuela, etc...). With the US having to use kid's gloves with them because of the debt situation, it should be fun to watch. So expect weaker third parties, like Venezuela, to bear the brunt of the US unhappiness with China's new oil diplomacy; and expect them to get closer to China as a result... and Iran?

Well, this is obviously another red flag waived in front of the White House. Training traders is, frankly, insignificant in terms of cost, value or rarity. It's just a way to make hostile headlines again... But no doubt the Iranians are happy to be associated with countries like Venezuela and China which have real leverage against the US. It's just another piece of insurance, let's say.

But don't worry about the geopolitics, because ultimately, it does not matter that much - oil will be sold if the price is right - it's just accompanied by a lot of diplomatic noise. But do expect significantly higher oil prices in the medium term.

Posted by Jérôme à Paris on January 31, 2005 at 05:23 AM | Permalink | Comments (20)

January 30, 2005

US's best weapon against terrorists: France

It is not because we make fun of the "War on Terra" and criticise the catastrophic war in Iraq that the fight against terrorism is not real and does not need to be pursued. Quite to the contrary. Of course, and despite all the public pronouncements that "everything has changed", and criticisms of "September 10" mindset, this is mostly a matter of law enforcement and intelligence gathering. And in that business, despite the occasional noise from the usual suspects, guess who the US can count on more than any other country?

France.

As many people tend to forget (or, like the US State Dept, to stay silent about), France is probably (with the obvious exception of Israel) the country with the longest and bloodiest experience of Islamist terrorism, going back more than 20 years.

See here and here lists of the major attacks in France. As you can see, there were (among others) 3 big waves of bombings, two in 1986 and one 1995. In each case, you had bombs in metros, restaurants, large stores, with each time a few people killed and several dozen injured. When it happens several times a week, or once a week for a couple of months, and most of it in Paris, it creates a real climate of fear - a lot of people take the metro or go shopping, and when it starts happening several times, you cannot wonder (even if the odds are actually really low) if it's going to strike you (remember the sniper 2 years ago).

The first time, the interior minister famously claimed that "we would terrorize the terrorists" (that was after the second bombing in the first series in 1986). This did not work...as was shown a few days later. Blame games were played, accusations were thrown around, the usual suspects were blamed (Iran, Lybia, PLO), and a lot of noise was made while the bombings went on.
The investigations were started under the old existing rules of procedure. After the whole series of bombings, it appeared necessary to strengthen the ability of police to conduct wide-ranging enquiries into the terrorist networks, their financing channels, their logistics. Special anti-terrorist laws were put in place, along with a specialised group of investigating magistrates, and police corps. Basically, they created the concept that any action which can be, directly or indirectly, tied to terrorism could be prosecuted under the new laws, which also allowed for extended preventive detention (i.e. detention without being charged), increased periods before a lawyer could be called in, and much stiffer sentences for criminal activities associated with terrorism. These reforms also put in place coordination structures (around that team of investigative magistrates), with the associated specialised police forces, and an emphasis on international data gathering and exchange (especially within Europe).
At the same time, the Renseignements Généraux (RG), the French political police (yes, we have that) was told to refocus from communist/trotskyst groups to islamic groups, along with the DST, the domestic counter-espionage body. Mosques were infiltrated (often created with foreign funds and led by foreign imams, they were places of proselyting for all imported Islamic tendencies, including wahabism or the Algerian GIA), as well as all other Muslim organisations or associations. The RG and DST recruited a lot of French Arab-speakers (of the Muslim population in France, about half is French - whether French-born or naturalised - and the other half are foreigners) - contrary to the information now become "common wisom", many of them are well integrated in France, feel fully French, and are quite happy to serve in the police force or other such bodies - and many do -it's normal.

The terrorists who did the 1986 attacks were eventually linked to Iran (because we were helping Iraq back then...) arrested and sentenced to jail in 1987 and are still in jail today (except for one, Wahid Gordji, an employee of the Iranian embassy, who was expelled after France and Iran broke their diplomatic relations and blockaded each other's embassies. Some of the French hostages in Lebanon were also released). Those that did the 1995 bombings were identified after a few weeks; one of their leaders was killed by the police when trying to escape and the others were arrested, except for their financier, based in London, whom the Brits refused to extradite because they considered that his rights would not be protected while in France...

The lesson has been, in any case, that the combination of painstaking police work, network infliltration, along with diplomacy (usually quiet, but not always) to kill off support from other countries, when combined with an extended and very tough package of police intimidation rights (especially the long preventive detentions) works. No need to invade Algeria, to bomb Lybia or whatever else could have been "satisfying" for the French leadership back then.

Some of these measures clearly make civil rights defenders very unhappy, but there are some limitations, and there is due process in the end, which so far has allowed to limit abuses. (Some abuse happened when the goal was more to generate headlines at convenient moments rather than actually fighting terrorism - people would be arrested, the politicians would make the statements they wanted/needed, and many of the people arrested would be quietly, and in a few cases not so quietly, liberated soon afterwards. The appellate courts have been pretty vigilant there. Maybe we've been also been lucky to have quite professional magistrates doing that job. As quoted in a November 2004 article from the Washington Post: "At the same time, Tubiana and other defense attorneys acknowledged that French counterterrorism investigators generally make efficient use of the tools at their disposal."

The most famous of these, Juge Jean-Louis Bruguière, has become a hero in anti-terrorist circles, for his tough rhetoric against terrorism, his obvious knowledge of the various Islamist groups, and his willingness to make his case for tougher laws publicly.

To get an idea of how popular he has become in US conservative circles, see how his declarations made headlines in the conservative press, even when it was going against the wisdom of the moment, as this January 2003 article in Newsmax, , the rabidly right wing publication, shows:

Bush's Rubicon: War on Iraq Risks Global Muslim Terrorism Arnaud de Borchgrave NewsMax.com Wires Friday, Jan. 31, 2003 WASHINGTON – The most experienced counter-terrorist investigator in the Western world is France's Jean-Louis Bruguiere. He is not campaigning against a U.S. regime change invasion of Iraq. But he is saying that Islamic militants are recruiting hundreds of jihadis to carry out terrorist attacks as soon as the war balloon goes up.

(...)

Bruguiere has searched high and low and found no evidence of the Iraq/al-Qaeda link that recently moved from conventional wisdom in the White House to a stated fact in President Bush's State of the Union address.

War on Iraq without approval from the U.N. Security Council, Bruguiere says, will exacerbate anti-American sentiments throughout the world and act as a force-multiplier for transnational terrorists.

Which means, simply, that US law enforcement was really impressed with Bruguière and his aggressive methods. The article from the Washington Post last November is a portrait of Bruguiere and explains the French anti-terrorist framework. The article is moslty descriptive, but you can understand the French policy as follows (all quotes from the WaPo article):


- extremely strong anti-terrorist legislation, with special rights for the police/investigative forces

France has embraced a law enforcement strategy that relies heavily on preemptive arrests, ethnic profiling and an efficient domestic intelligence-gathering network. French anti-terrorism prosecutors and investigators are among the most powerful in Europe, backed by laws that allow them to interrogate suspects for days without interference from defense attorneys.

(...)

At times, French authorities have pursued terrorism cases outside their borders, taking over investigations from countries unwilling or unable to arrest suspects on their own.

The French anti-terrorism judge (...) is Bruguiere, an investigating magistrate who under French law is granted great prosecutorial powers, including the ability to sign search warrants, order wiretaps and interrogate suspects. Over the past decade, Bruguiere has ordered the arrests of more than 500 people on suspicion of "conspiracy in relation to terrorism," a broad charge that gives him leeway to lock up suspects while he carries out investigations.

"There is no equivalent anywhere else in Europe. This provision is very, very efficient for judicial rule in tackling terrorist support networks," Bruguiere said in an interview. "Fighting terrorism is like the weather. You have high pressure zones and low pressure zones. Countries that have low pressure zones" attract terrorism.

- police rights are extensive, but they are not limitless - ultimately, all work conducted by the investigative judges will come in front of a court of law, and it has to follow criminal procedure;

- police work has nothing to do with military action, and these are considered useless;

Terrorism is "a very new and unprecedented belligerence, a new form of war and we should be flexible in how we fight it," said Jean-Louis Bruguiere, a senior French anti-terrorism judge. "When you have your enemy in your own territory, whether in Europe or in North America, you can't use military forces because it would be inappropriate and contrary to the law. So you have to use new forces, new weapons."

- intelligence gathering is a key feature of the fight against terorrists (see this article about the general lack of knowledge of al-Qiada by Western law enforcement agencies)

The Directorate of Surveillance of the Territory, the domestic intelligence agency, employs a large number of Arabic speakers and Muslims to infiltrate radical groups, according to anti-terrorism experts here. Police are also quick to use the threat of preemptive arrest to persuade suspects to work as street informants.

The French government has also stepped up efforts to crack down on radical Islamic clerics. While authorities have long had the right to expel foreigners if they are judged a threat to public safety, lawmakers passed a bill this year that makes it possible to deport noncitizens for inciting "discrimination, hatred or violence" against any group.

(...)

Bruno Le Maire, a senior adviser to the interior minister, said authorities have placed about 40 mosques under close surveillance and move quickly whenever they find a cleric preaching radicalism.

(...)

Other countries, including the United States, have long-standing policies that restrict law enforcement agents from infiltrating places of worship. So far, however, France's aggressive approach has not led to widespread criticism.

Dalil Boubakeur, rector of the Grand Mosque of Paris, said many Muslims support the expulsions and are just as concerned about preventing terrorist attacks as other French citizens. "We find the public arrogance of these extremists completely intolerable," he said. "Fundamentalism is on the rise. . . . This is a real danger. The state should take measures against these types of people that disrupt society, not only when there is a terrorist attack, but before."

- police work and diplomacy are two things that can - and should - be completely separated:

Thomas M. Sanderson, a terrorism expert with the Center for Strategic and International Studies in Washington, said France has combined its tough law enforcement strategy with a softer diplomatic campaign in the Middle East designed to bolster ties with Islamic countries.

"You do see France making an effort to cast itself as the friendly Western power," as distinct from the United States, he said. "When it comes to counterterrorism operations, France is hard-core. . . . But they are also very cognizant of what public diplomacy is all about."

(Of course, this is not to say that France has never been hypocritical in its diplomacy or dealings with States sponsoring terrorism, or that deals have not been made, but there is a general separation of police work and political relations).

The interesting thing to note is that while France's diplomacy is strongly (and, as most of you around here probably agree, rightly) critical of US policies, its ruthlessly efficient police and intelligence operations against the Islamic "nebula" make it a valuable partner, and law enforcement officials on both sides seem to have made a better job of cooperating than governments. Maybe law enforcement people are more reality-based, maybe they were forced to acknowledge the very real input from their French colleagues because they did not have much else to work on, who knows - but the cooperation works (Same thing, by the way, between the military in Afghanistan, for instance).

Still, the lessons are stark

- the fight against terrorism is not a "war", other than in the sense that it requires a lot of resources, a lot of time, and there are casualties. Blunt military force is useless and worse, breeds resentment and destruction, which nurture terrorism

- it is possible to fight terrorism while maintaining the rule of law. Exactly where the line is set between defense of civil rights and rights of the prosecution/the investigators can and should be debated. Not every country would want to be as aggressive as the French, but they all should make sure that courts acting under publicly known laws are the ultimate arbiters (as in France). There is no need to compromise our most sacred values to be successful in that fight

- human intelligence is vital. Language skills, undercover agents with ultimate loyalty to their country and not to their religion are essential. This requires either a lot of training, or the availability of a pool of bilingual and motivated citizens. Treating Muslims are suspects is definitely not the best way to get there. It is strange that the USA, a country of immigrants (like France) should have so much trouble filling up such positions

- explicit support from the population, and especially from the groups most threatened by these policies (i.e. Muslims) is required. Community leaders, religious leaders should be engaged, encouraged to speak up, and associated, in public and private ways, with anti-terrorist policies. Muslims know that they are often the first victims of terrorism, if indirectly - shunning, suspicion, discrimination, etc... and can be brought around if they can expect not to be blamed as a group.

- public diplomacy does not need to follow police work. The two can - and should - be kept separate; but public diplomacy must be accompanied by private diplomacy that follows more closely with the police work and focuses on intelligence gathering and surveillance of identified dangerous groups. However, such private diplomacy is hard if the public diplomacy consists in insulting or threatening your partners.

Without any specialist knowledge on my part, it looks like the USA is not doing good at all on the first 4 items, and also arguably not on the last one either, which is not encouraging... and meanwhile, they have to rely on their newest enemy, France (and other similary "unreliable" allies), to make any progress.


I would add that any long term anti-terrorism policy should take a long, hard look at our fucked up approach to the Arab world. This will come in another installment soon...

Posted by Jérôme à Paris on January 30, 2005 at 05:23 PM | Permalink | Comments (25)

Iraq Election

Writing elections in italics seams appropriate to me because an election

  • where candidate names are unknown to the voters
  • lists are based on ethnic/religious divisions
  • the real political questions, occupation and future economic system, are not addressed by those lists
  • voters in significant regions will not have a chance to vote

will not give a decent, sustainable legitimation to those elected.

I am happy for those who can vote, but I believe their hopes will prove too high. Those who vote have less influence, than those who count the votes and the outcome is probably already determined.

Here are some Iraq blogs with opinions about these election

Raed Jarrar esp. the January 27, 2005 entry
His mother, Faiza Jarra
Free Iraqi
Free Iraq

Posted by b on January 30, 2005 at 10:06 AM | Permalink | Comments (48)

January 29, 2005

Not so Useless Speculation

Barfly SusanG has an interesting find and blogs about it in her diary at DailyKos.

Jeff Gannon, a Washington journalist for an obscure news agency named Talon and known for softball questions on White House news conferences may be the one who came up with the memo that uncovered CIA agent Plame in the Wilson / Nigeran Uran / Iraqi mushroom cloud case.

Atrios hinted that Jeff Gannon is not the real name of the man.

MediaMatters has some recent articles about Gannon and Talon New which looks like a GOP outfit and about Gannon reporting directly from Bush press material.

The fact that Jeff Gannon is a quite partisan and dubious journalist and should not be in the White House press corp was pointed out by Dan Froomkin in his Washington Post White House Briefing as early as February 2004. He also reported the Plame memo connection on March 10, 2004.

... the federal grand jury investigating the leak of Valerie Plame's identity as a covert CIA operative has subpoenaed White House records on contacts with 25 journalists.

... Anyway, the reason Gannon is on the list is most likely an attempt to find out who gave him a secret memo that he mentioned in an interview he had with Plame's husband, former ambassador and administration critic Joseph Wilson.

Gannon asked Wilson: "An internal government memo prepared by U.S. intelligence personnel details a meeting in early 2002 where your wife, a member of the agency for clandestine service working on Iraqi weapons issues, suggested that you could be sent to investigate the reports. Do you dispute that?"

According to a December Washington Post story by Mike Allen and Dana Milbank, "Sources said the CIA is angry about the circulation of a still-classified document to conservative news outlets suggesting Plame had a role in arranging her husband's trip to Africa for the CIA. The document, written by a State Department official who works for its Bureau of Intelligence and Research (INR), describes a meeting at the CIA where the Niger trip by Wilson was discussed, said a senior administration official who has seen it."

On top of being secret, CIA officials said it was wrong.

Michael Darling in the December 11 edition of the student paper ThePittNews points out:

Under President George W. Bush, the press office has credentialed reporters like Jeff Gannon, an ultra-right-wing member of the Talon News Service -- a consortium consisting of nine volunteer reporters, among them a high school student and a personal trainer. Bush routinely accepts questions from men like Gannon, but inexplicably turns down interviews with Pulitzer-winner Thomas Friedman.

Many commentators in the above mentioned blogs have researched and posted some TinFoilHat stuff and some interesting relations. So far we know:

Jeff Gannon has two personal web sites jeffgannon.com and TheConservativeGuy.com. He is connected to the Pro-Bush Ari Fleisher Fan Club. He was trained at the Republican run Leadership Institute Broadcast School of Journalism. He is working for the Talon News Agency and has a seat in the White House briefing room where he throws strange questions at Bush speaker Scott McCellan and Bush himself. Via WaPo:

"Senate Democratic leaders have painted a very bleak picture of the U.S. economy: Harry Reid, who's talking about soup lines, and Hillary Clinton was talking about the economy being on the verge of collapse. Yet in the same breath, they say that Social Security is rock solid and there's no crisis there. You've said you're going to reach out to these people. How are you going to work with people who seem to have divorced themselves from reality?"

Talon News has the same boss, Bobby Eberle, as GOPUSA with its mission to to spread the conservative message throughout America. and the www.Talonnews.com website resides on the listsrv.gopusa.com server. Here is a portrait of Bob.

As MediaMatters has reported Gannon and Bob Eberle are activists on the Free Republic website.

Bob Eberle is cooperating with his brother Bruce Eberle who owns the site MillionsOfAmericans.com, a Bush support site collecting email-addresses and signatures for pro Bush petitions since the Florida election 2000. Bruce Eberle is know for dubious fund raising schemes. His direct mail company Eberle & Associates names Grover Norquist and his Americans for Tax Reform as a customer.

Bob's wife Kathleen Eberle, the treasurer of GOPUSA, is active in Texan GOP politics.

So there are many possible connections to follow and it is amusing and frightening to surf through these right wing networks. The questions open are:
- Why has Talon News, a unknown News Agency a seat in the White House briefings?
- Why does its reporter Jeff Gannon is more serving to Scott McCallan in "Bad cop/good cop" against the press than acting as a real press person?
- Who or what finances Talon News via GOPUSA?
- Where did Jeff Gannon get that secret memo?

SusanG asks in her post:

Does anyone want to join me in useless speculation as to what this complicated crapola means?

Posted by b on January 29, 2005 at 03:09 PM | Permalink | Comments (15)

Billmon: Major Strasser Has Been Shot

Round up the usual ...

Posted by b on January 29, 2005 at 11:25 AM | Permalink | Comments (7)

Billmon: Signs of the Times

Signs from not only the NY Times

(Billmon's second quote is from January 29, 2005)

Posted by b on January 29, 2005 at 09:17 AM | Permalink | Comments (0)

Billmon: A "New" Form of Capitalism

Billmon on Bill Gates' China vision

Posted by b on January 29, 2005 at 09:13 AM | Permalink | Comments (9)

January 28, 2005

Alberto Gonzales

Not Fit to be Attorney General

Liberty

Posted by b on January 28, 2005 at 12:16 PM | Permalink | Comments (19)

Open Thread 05-12

Thththe old one is filling up really quickly...

Posted by Jérôme à Paris on January 28, 2005 at 12:10 PM | Permalink | Comments (54)

Billmon: 2 New Posts

On Holiday

Campaign Promise

Posted by Jérôme à Paris on January 28, 2005 at 05:47 AM | Permalink | Comments (12)

January 27, 2005

How many times do we say "never again"?

Auschwitz

Yesterday, the ceremonies marking the 60th year of the liberation of Auschwitz by Soviet troops took place. (At the time I write, it is barely worth a mention on the CNN website)

These ceremonies have taken an unprecedented importance in Europe as many realise that this is probably the last such ceremony with the survivors of the death camps still alive, still there to bear witness, to tell us "this was not just a nightmare - this is not just in the imagination of a few deranged people - no, this was real, I saw it, I survived it".

I have spent the last week reading and listening to amazing, horrifying, unbelievable stories - many of them are speaking up for the first time ever. (See here, here and here for such a testimony in French. You can also go here for the Shoah Visual History Foundation)

We said, "never again". The Nuremberg trials took place, trying to treat fairly some of the worst criminals in the history of the world, and mostly succeeded. Important precedents were set, based on justice and the law. "Crimes against humanity" were defined. The Geneva Conventions were extended to civilian populations in 1949.

And yet... Indonesia, Rwanda, Cambodia, Biafra, Somalia, and many more I am not listing took place since then. Iraq is coming really close to falling into that same category (some will say it already has). Can there be hope?

Can we say that the fact that Europe is united is a sign of hope, because it happened, or something to cause despair, because it shows that the only way to get there seems to be through the total destruction of peoples and of their will to fight? Is the only way to stop force, and abuse of force, is an even bigger use of force? And who will control that even bigger force?

"Quid custodiet ipsos custodes?" was asked a couple of millenia ago. We have not come closer to the answer. We only have bigger sticks. Pity us.

Posted by Jérôme à Paris on January 27, 2005 at 04:39 PM | Permalink | Comments (26)

Billmon: Newspeak

http://billmon.org/archives/001659.html

Posted by Jérôme à Paris on January 27, 2005 at 11:41 AM | Permalink | Comments (65)

January 26, 2005

The Facilitators

Is it impossible to characterize the Democratic Party as an opposition party? To me they look just like relative stupid facilitator of the untamed fire of freedom ®

Too many Republican senators allow Bush's top aides "to get away with lying" said Sen. Mark Dayton, a Democrat who opposed the war and will face reelection next year in the swing state of Minnesota.
WaPo: Democrats Criticize Rice Over Iraq War

---
Condoleezza Rice was easily confirmed as secretary of state today, overcoming charges from some Democrats that she had been a disingenuous architect of a failed administration policy in Iraq
...
Twelve of the Senate's 44 Democrats and the chamber's lone independent, James Jeffords of Vermont, voted against Ms. Rice. No Republican voted against her.
NYT: Senate Confirms Rice as Secretary of State on 85-13 Vote

What is there to loose for 32 democrat senators by voting against Rice?

Indeed:

"In some cases tame opposition parties are created by the governing groups in order to create an impression of democratic debate."

This seems to characterize the state of the union if we read this international policy position one Neodem uttered some weeks ago (copyright Sharansky):

"In light of the fact that we're now in Iraq, with all the problems in terms of perceptions about America that have been created, us launching some missile strikes into Iran is not the optimal position for us to be in," he said.

"On the other hand, .. I guess my instinct would be to err on not having those weapons in the possession of the ruling clerics of Iran. ..."
Link

Is there any chance for a future progressive and rational US policy? I doubt and fear the consequences.

Posted by b on January 26, 2005 at 06:09 PM | Permalink | Comments (18)

Billmon: 40 Acres and a Mule

New Whiskey Bar post,

and I did miss the one that Billmon posted before The Vision of Democracy and after Hate Rally -

Billmon: The Least of These

Posted by b on January 26, 2005 at 03:11 PM | Permalink | Comments (3)

Open Thththread

News, views, opinions ...

Posted by b on January 26, 2005 at 11:18 AM | Permalink | Comments (116)

Billmon: A Vison of Democracy

Billmon on how other nations adopt the Bush vision of democracy.

Posted by b on January 26, 2005 at 11:03 AM | Permalink | Comments (5)

January 25, 2005

368 + 80 = 427

- US budget deficit estimated at 368 billion dollars in fiscal 2005

The US government will run a budget deficit of 368 billion dollars in the current fiscal year, excluding costs of wars in Iraq and Afghanistan, the nonpartisan Congressional Budget Office(CBO) predicted Tuesday.

- Bush Seeks $80 Bln for Military Operations

President Bush on Tuesday asked for more than $80 billion in new funding for military operations this year in Iraq and Afghanistan, shattering initial cost estimates and pushing the total for both conflicts to nearly $300 billion so far.

- W.House Projects 2005 Deficit at $427 Billion

The White House estimated on Tuesday that the U.S. budget deficit for 2005, including an extra $80 billion for Iraq and Afghanistan operations, will total $427 billion.

Please take note: 368 + 80  = 427

Posted by b on January 25, 2005 at 07:11 PM | Permalink | Comments (15)

No to Gonzales

Moon of Alabama wholeheartedly supports the call by dailyKos to oppose Gonzales's nomination as AG. Torture is evil, it is illegal and an explicit proponent of torture should certainly not be AG of the US.

(The link to this post has not been provided to dailyKos. See below the fold for the earlier version of that post and the comments section for the discussion on whether we should have linked or not)

Sorry for the two very close posts, but DailyKos has posted a very strong call to oppose Gonzales's nomination as AG and is asking for links from blogs that support that position.

My question is simple - do you agree to provide a link to our site for this call?

<update (Bernhard)>
It is a duty to be against Gonzales as AG, no matter how many trolls may come to this blog or whatever. Listen to your grandma's story:

Another case involved a 73-year-old Iraqi woman who was captured by members of the Delta Force special unit and alleged that she was robbed of money and jewels before being confined for days without food or water -- all in an effort to force her to disclose the location of her husband and son. Delta Force's Task Force 20 was assigned to capture senior Iraqi officials.

She said she was also stripped and humiliated by a man who "straddled her . . . and attempted to ride her like a horse" before hitting her with a stick and placing it in her anus. The case, which attracted the attention of senior Iraqi officials and led to an inquiry by an unnamed member of the White House staff, was closed without a conclusion.
WaPo

Someone in the White House jacked off over the case file but could not come to a conclusion. Sad story indeed. Folks like Gonzales make you impotent and sick.

Same goes for Rice by the way and anybody else who facilitates this madness and of course for these self named Dems who endorse such people for cabinet posts in the Senate or House.
</update (Bernhard)>

Posted by Jérôme à Paris on January 25, 2005 at 04:48 PM | Permalink | Comments (98)

"You forgot Poland"

An interesting thing is happening with Poland in Europe, and by extension, with the US. Long seen as the US's best ally in Europe, the clear leader of "new Europe", grateful for the long fight against communism and for freedom in the cold war, and trusting US-led institutions such as NATO more than wimpy European ones like the European Union, Poland was to be America's new privileged partner in continental Europe and a useful ally in the fight against Franco-German plots to build an independent Europe.

Well, here's the news - thanks to America's magisterial fuck up in Iraq (where Poland is the third largest member of the CoW), and thanks to the relentless and cash-rich grind of the Brussels bureaucratic machine, Poland is having second thoughts. Here's how.

A recent paper by Marcin Zaborowski (a Polish scholar working in a UK university) explains the policy evolution in more detail : From America's protégé to constructive European. Polish security policy in the twenty-first century.   Here's the money quote, from the summary:

Following the events of 11 September 2001, Poland emerged as one of the United States’s key allies, arguably its protégé, in Central and Eastern Europe. The close affinity of interests on security matters between the United States and Poland became particularly apparent in Iraq, where Warsaw proved to be a strong and highly vocal supporter of Washington. However, at the same time, Poland has been progressively drawn into the internal workings of the EU, and as a consequence its perspectives on European security have evolved towards a more ‘EU-positive’ attitude. This, coupled with disappointment over the war in Iraq, has meant that Poland’s Atlanticism is increasingly questioned, with calls for a more pro-European attitude growing. (...) Poland’s Atlanticism is likely to be toned down in the future as Poland becomes more focused on developing its policies in an EU context and in cooperation with individual member states.

Many things have happened in the past two years, since Chirac's memorable outburst ("they missed an opportunity to shut up"), following the Wall Street Journal inspired "Vilnius Group declaration") supporting the US stance on Iraq prior to the war, and following the acrimonious negotiations of the European Constitutional Treaty ("Nice or Death" was the Polish reallying point, in reference to the 1999 Nice Treaty giving them much larger voting rights than in the new Treaty).

Basically, Poland entered the EU in May 2004 with both France and Germany mightily pissed off against them -  and then proceeded to fight them tooth and nail on the first major European negotiation they participated to, those on the European Constitution.

What could be expected happened - France and Germany started playing hardball, pushing Poland in a corner by raising the stakes publicly in the Treaty negotiations (with the prospect for Poland of either giving up humiliatingly or being the direct cause of the failure of intensive 2-year negotiations), and linking the whole thing to the coming budget negotiations (where Poland is expected to be a large net recipient while France and Germany will be the two largest contributors), where Poland's expected inflows were put in question.

Luckily for them, the change of government in Spain (which was until then in a quite similar position to Poland in many respects - a member of the CoW, and fighting for the Nice voting arrangements) suddenly changed the negotiation context. Spain switched abruptly to the Franco-German position, and Poland, suddenly isolated, was offered an improved deal which allowed them to save face. The Poles suddenly realized that life would not be easy for them if they had to fight the two most important EU members incessantly - and might indeed turn mighty unpleasant and lonely.

Meanwhile, the accession party took place (1 May 2004) and suddenly, the Polish farmers, amongst the most Europhobic of the country, saw their income hugely boosted thanks to Europe in two different ways (i) increasing revenue from exports to the rest of Europe at higher prices and (ii) massive subsidies under the CAP (Common Agricultural Policy), and they began to reconsider their previous opposition to Brussels.

Also, more recently, the Ukrainian crisis was an opportunity for Poland to get to value their being a full-fledged member of the EU. They essentially  took the lead in expressing the Western point of view: they cared the most, had the most vocal position, and were encouraged to speak on behalf of the EU. For the first time, they benefited from a quasi-explicit role of European Union spokesman and thus spoke for a much bigger constituency than just the “local neighbors”, i.e. 25 countries, all united behind them, the full apparatus of the European Commission (the European representatives in Ukraine ended up being the Polish president Kwasniewski, historic leader Lech Walesa and Javier Solana, the EU high representative for foreign affairs), with all the sticks and carrots - mostly carrots -  that this entails. They experienced at first hand the leverage that the EU can bring to one country’s voice, they received, on an issue of importance to them, the full solidarity of other EU members and the trust put in them to drive a EU joint position. That had a strong psychological impact for the Polish diplomatic establishment, and was much more pleasant than the clod shoulder experience of the past year.

At the same time, Iraq has gone from bad to worse, their unconditional support of the US has not brought them any returns and putting the soldiers in harm's way in an increasingly senseless mission has not been very popular at home.

The Warsaw bureaucracy is, more than ever, fully engaged with Brussels on a daily basis - when 80% of your new laws come from over there, and you still have a massive backlog to convert into domestic law, and you have to negotiate the content of the whole thing, make sure that your administration complies with all the EU rules, procedures, etc... it's a massive task which is impossible to fully comprehend until you are caught in the middle and it absorbs a lot of the energy of most of the government. This creates a lot of work, a lot of headaches, but it is permanent communication, permanent exchange, and the smaller entity of the two cannot be not influenced by the process and absorb the working methods, the culture of technocratic compromise and negotiation, and cannot escape a general feeling a belonging.

So Poland, taken for granted by the US ("we're the only ones who can protect them from the Russians and from the terrorists") is slowly coming back to play its natural role in the European concert of nations - one of the bigger players, getting lots of help from the Brussels' not insignificant common pot, getting more of the continent's attention focused on this issues that matter to them in their corner of Europe and simply, being a fully-engaged member of the club.

Maybe it was inevitable in the long run, but boy, Georgie, you sure lost Poland quickly.

Posted by Jérôme à Paris on January 25, 2005 at 03:00 PM | Permalink | Comments (10)

Still A Democracy?

In its recent issue 'Die Zeit', my favorite German weekly, published an essay by Paolo Flores D'Arcais, an Italian philosopher, asking:

Is America Still a Democracy?
In the United States the majorities populism is threatening freedom

(Researching on D'Arcais I found parts of the essay already translated by DowneastDem at DailyKos and I have copied from his work)

D'Arcais argues against a Jacobinian absolute rule of the majority.

The constitution is the chain of power. It limits the influence of the majority and grants the individual right, which no representative and no majority may hurt, even if its size is crushing.

As premises of such a constitution based democracy he names secularity, free, equal and uninfluenced elections, a non-partisan system of information and an independent judiciary. A relative equality of wealth is needed to prevent seduction and voluntary thralldom.

On all points he finds serious inconsistencies with the reality in the United States. Thereby, he says, the US is endangered to divert from the constitution based democracy. What he further sees developing: 

When the demons of populism are "called to arms" the weapon of choice is often a war.  Every populist movement requires an enemy in order the exorcise the liberal logic of the system and transform internal opponents into 'traitors'.  War closes the antidemocratic circle of populism and glorifies its components: the community is heralded as 'one big family' (or even company) with the father at the head. Populism instills the logic of obedience. Dissent - the basis for democratic coexistence - is criminalized and conformism is the great virtue.

This conformism is now spreading throughout rural America. It is dangerous because its moral values have totalitarian features and minority groups are becoming marginalized, if not demonized. The individual is pressured into obedience; he must not stand out from the 'herd'.  It is precisely his self-knowledge as an individual that is so suspect to the majority. And here it should be stated: those who degrade a nation into a huge 'army' and believe they can prevail by relying on the slogan "God is on our side", they have subverted the ideals of the Founding Fathers and transformed the spirit of the constitution into its opposite.

So more often than not the states that we call democracies are actually democracies in decline. And it's not just a bad dream to think that nations - East and West - are almost imperceptibly moving in the direction of a new political model: capitalism without democracy. China and Russia - each in its own way -  are quite openly heading down this path. The America of the fundamentalists and the oil magnate Bush (not to mention little Italy, with it Berlusconi regime) are following in a less overt way."

Posted by b on January 25, 2005 at 10:35 AM | Permalink | Comments (46)

January 24, 2005

I am Not Sure

A posting from John Robb that currently spins through my mind though I am not sure yet if this is competely valid.

I am not sure why most people were surprised by Bush's inaugural speech.  It contains the essence of what swept the Republicans to power, and what will keep them there.  What is it?  It is the last gasp of the idea of a "nation"  -- a people with a common beliefs, origin, and history.  Bush merely pumped the idea that American nationalism was exceptional.

The problem is that we live in a market-world.  Our ability to compete effectively in these global markets determines our long-term success.  Muscular nation-states don't do well in this environment.  They involve themselves in non-economic behavior that radically harms their ability to compete effectively.

Posted by b on January 24, 2005 at 01:19 PM | Permalink | Comments (37)

Open Thread 05-10

for all topics, views, news...

Posted by Jérôme à Paris on January 24, 2005 at 11:42 AM | Permalink | Comments (42)

January 23, 2005

The Untamed Fire of Freedom ...

Dostoevsky's untamed fire of freedom lets the water in Baghdad evaporate.

Aljazeera: Baghdad residents face water crisis

Most of the Iraqi capital - particularly the western districts - has been without water for the past seven days.

Riverbend reports:

There hasn’t been a drop of water in the faucets for six days. six days. ... We’ve been purchasing bottles of water (the price has gone up) to use for cooking and drinking.
...
Water is like peace- you never really know just how valuable it is until someone takes it away.
...
We've given up on democracy, security and even electricity. Just bring back the water

The tactic of water denial has been used on Baghdad before.

Posted by b on January 23, 2005 at 10:45 AM | Permalink | Comments (21)

January 22, 2005

Billmon: Hate Rally

Billmon has remarks on a certain mass behaviour.

Posted by b on January 22, 2005 at 04:03 AM | Permalink | Comments (36)

January 21, 2005

Really Open Thread

news, views, opinions, whatever ...

Posted by b on January 21, 2005 at 02:43 PM | Permalink | Comments (91)

Fresh and Light Open Thread

What's your job description?

You're a woman and you see a handsome guy at a party. You go up to him and say, "I'm fantastic in bed," That's Direct Marketing.

You're at a party with a bunch of friends and see a handsome guy. One of your friends goes up to him and pointing at you says, "She's fantastic in bed." That's Advertising.

You see a handsome guy at a party. You go up to him and get his telephone number. The next day you call and say, "Hi, I'm fantastic in bed." That's Telemarketing.

You see a guy at a party, you straighten your dress. You walk up to him and pour him a drink. You say,"May I," and reach up to straighten his tie,brushing your breast lightly against his arm, and then say, "By the way, I'm fantastic in bed," That's Public Relations.

You're at a party and see a handsome guy. He walks up to you and says, I  hear you're fantastic in bed," That's Brand Recognition.

You're at a party and see a handsome guy. He fancies you, but you talk him into going home with your friend. That's a Sales Rep.

Your friend can't satisfy him so he calls you. That's Tech Support.

You're on your way to a party when you realize that there could be handsome men in all these houses you're passing. So you climb onto the roof of one situated towards the center and shout at the top of your lungs, "I'm fantastic in bed!" ..... That's Junk Mail.

You are at a party, this well-built man walks up to you and gropes your breast and grabs your ass ...That's Arnold Schwarzenegger!

You liked it, but 20 years later your attorney decides you were offended. That's America.

This is also America:

From Oliver Willis

Warparty

Posted by Jérôme à Paris on January 21, 2005 at 06:05 AM | Permalink | Comments (82)

Billmon: Watch What We Say, ...

Watch What We Say, Not What We Do is the instruction from the outpost of tyranny, sez Billmon.

Posted by b on January 21, 2005 at 02:37 AM | Permalink | Comments (41)

January 20, 2005

Billmon: When in Rome...

Another post

Posted by Jérôme à Paris on January 20, 2005 at 05:37 PM | Permalink | Comments (9)

Billmon: Collateral Damage

Collateral Damage

Posted by Jérôme à Paris on January 20, 2005 at 01:55 PM | Permalink | Comments (34)

Russia, Ukraine, Oil, US Diplomacy - All in One

What is the current US administration's position on Russia?

And what is the Democrats position on Russia?

Suddenly, Putin's Russia seems to have turned from Bush's best friend (in the War on Terra and in the oil games) back into its traditional role as the arch-enemy (stifling democracy, fighting for influence with the US in various countries).

Maybe more interestingly, the Democrats and other liberals seem confused: Russia, when it was a Bush ally, could be blamed for its horrible war in Chechnya, for its nasty oil plots together with US oil companies, and for its worsening domestic democracy situation.

Now that it has turned again into a target of the administration, you can read stories about how US oil interests are fighting in Ukraine against Russia or how US and Russian interests are clashing in Venezuela, about Syria, ...

So what should we think of what's going on in Russia and in Ukraine? And what should be be a proper US policy viz. Russia?


1. The new conservative "frame" about Russia

As you may have seen in the news, there has been an unusual sight in Russian streets in the past few days: demonstrations strongly critical of the Kremlin. The cause of these demonstrations is the decision to replace the free provision of many basic services (transportation, heating, medicines) to some categories of the population by supposedly more targeted subsidies.

This is the kind of reform that the Wall Street Journal and The Financial Times editorial page guys usually love, but they are also happy to see Putin stumble, which makes for strange contortion in their writing, and which allows to identify the new themes of Republican policy viz. Russia. Let's start with the Financial Times: In cash, not kind

...for the first time in his five years in power, Mr Putin has had to face widespread street protests by ordinary pensioners and veterans over the botched introduction of reforms to monetise in-kind benefits on public transport.

They start by describing the situation, but put an important word there "botched". This allows to put the blame on the execution of the reform, not on its content.

(...) The system of in-kind benefits is wasteful. By no means every veteran or pensioner is poor enough to deserve free bus rides, drugs and medical care. The move to replace in-kind benefits with cash benefits is therefore as important a feature of Mr Putin's second presidential term as tax reform was in his first term.

A frank description of the position of the editor, which is clearly in the traditional laissez-faire (and not totally unreasonable) line: subsidies are less distorting and more effective when they are transparent and do not lead to inefficient behavior (free medicine, let's say, can lead to self-medication or over-consumption; medicine purchased at market prices with a reasonable cash subsidy to well-targeted categories of people lets them afford it if they need it put not over-consumer because they really pay for it each time). Of course, all depends, as always, on the intent behind this: is making the subsidies transparent the first step towards eliminating them? Will an average cash amount to each person be appropriate when the real needs of each are not known and can vary widely - especially for things like medicine?

However, implementation of such a change requires care. Many elderly Russians consider the obligation to pay as a psychological affront, regardless of whether the state gives them the means to do to so. In fact, many failed to get full cash compensation for withdrawal of their in-kind benefits this month, especially in poorer regions outside Moscow and oil-producing Siberia.

Two hits in one paragraph: "Russians are stupid and don't understand the civilized world where money rules" and "Russian authorities are incompetent and could not execute the reform properly - especially Russian authorities in areas without money, - uncivilized, again"

But Mr Putin could learn a political lesson from the abysmal lack of preparation in Russia's vast regions for welfare changes. This is that authoritarianism tends to suppress the expression of criticism inside as well as outside the establishment, and to shut down some of the channels of communication available to a democratic government. Had Mr Putin listened more to Russia's regional governors, he might have picked up earlier on the signals that all was not well with this reform.

The last phase is to link this episode to the now fashionable criticism of Putin's authoritarianism and Russian lack of democracy, which is a bit strange when you precisely have the most vigorous contesting of the government and there have been serious rumbles for many months.

(See the text from last June which I use below)

In today's Wall Street Journal (sorry, the link is subscription-only), we have a similar pattern:

The protests spreading across Russia in the past week are a response to an unpopular welfare overhaul. But in retrospect the seeds were planted by the Russian president's moves to centralize authority in the Kremlin. Absolute power, as Vladimir Putin ought to realize by now, brings absolute responsibility.

The WSJ cuts to the chase in the first sentence. "welfare overhaul" in the op-ed pages of the WSJ does not even require a qualifying adjective such as "needed" or "useful", that is understood by the reader; so the point is immediately Putin's power, worse, his "absolute power".

...He promised a 15% or so rise in pensions and other cash benefits that are intended to offset the end of freebies like bus rides or medicine for retirees. As in the past, when bad news hit, Mr. Putin also blamed others, in this case regional leaders, for botching the shake-up of the entitlement scheme. In fact, the Russian leader may have been partly justified in pointing the finger at local authorities who, over the Orthodox Christmas and New Year holiday, failed to make sure the new benefits were properly paid out to retirees. Strictly speaking, Mr. Putin could be commended as well for tackling an overdue reform of Russia 's inefficient social welfare schemes.

Suddenly, we do get the qualifications, staccato-style... "overdue", "inefficient", "social welfare" (what other kind of welfare do you know?), along with the finger-pointing at the poor implementation of the reform...

Many things help account for the drop in support and the rise in discontent in spite of flush economic times. But the most basic explanation is that by taking hold of all the reins of power, Mr. Putin says in effect, "Russia , c'est moi." As a result, everything that goes wrong becomes Mr. Putin's fault. Lacking any past experience in politics, the former KGB colonel probably didn't anticipate that his authoritarianism would so quickly undermine his popular support. It could turn out to be his gravest miscalculation. The new, puffed-up Russian president looks both omnipotent -- always a mirage -- and cruelly aloof. The future promises more strife. High oil prices temporarily disguise the fact that Russia remains a poor country that badly needs reforms. Mr. Putin hasn't made the best choices of where to start.

Aaaah,"Russia, c'est moi" - a day without an anti-French dig (if not, more usually, a full article) in the WSJ is a rare day indeed... France is Soviet, and Russia is, well, French... Pity us. Anyway, more variations on the theme, it's a fucked up country, uncivilized, and Putin "the rookie" is out of his depth and choosing the easy option for KGB colonels and other third world despots - absolute power.

So what can we conclude form that? Since Khodorkovski's arrest and the subsequent dismemberment of Yukos, the strategic oil partnership with Russia has cooled off in the public eye (I am talking about perceptions, not about the actual reality of cooperation on the ground) and we are back to the theme of a strategic confrontation, to which I will get into more below as regards oil. Together with this cooling off, the theme that Russia is not really democratic has come back to the fore. Now that it's a convenient topic to bring up, it's suddenly okay again to criticize the autocratic tendencies of Putin. (They were there from the start, but widely ignored previously).

(If you want to go into the details on Russia policy discussions, go see Johnson's Russia List, the main site for Russia hands, which is pretty much exhaustive on the topic.)

More generally, the conservative line seems to be one of disappointment in Putin, and therefore of renewed confrontation. What has brought the turnaround? Oil maneuvers? The Ukrainian elections? The recent focus on “authoritarianism” is purely opportunistic as this has been going on for a while and the Chechnya war – and its tens of thousands of deaths – has been going on throughout the Putin presidency with very limited reactions from the West. It nevertheless seems to embarrass the Democrats who cannot really complain about the administration paying more attention to the human rights abuses but seem intent in linking this new found awareness to oil conspiracies with the exact opposite intent to those they were complaining about before (Bush and Putin were chums because they were going to have a grand deal in the energy sector, with Russia providing a reliable plentiful source of oil – and action for the oil majors, and the US providing much needed investment). So what is the oil situation like?


2. Russia and oil (and gas)

Russia is fighting with Saudi Arabia for the title of first oil producer worldwide, so they are a significant force in the oil business. But the fact is, they are a more significant natural gas player (with 40% of world reserves) and, while the two sectors are somewhat related, they are different enough to have really different policy implications.

Go read this (courtesy of the US Dept. of Energy) for a good backgrounder.

Oil is the big bogeyman, usually. The fact is, Russia exports about half of its production of oil (say 4-4.5 mb/d - that million barrels per day). The other half is refined in Russia, and another chunk of that a big third, so probably 1.5-2 mb/d, is exported again, as diesel or fuel. About half of the exported oil is trnasported by pipe to Europe and the other half is sent by sea (via Novorossisk and St-Petersburg in Russia, and Ventspils, Odessa, or Butingue in former Soviet republics in the Baltics or Ukraine) - and most of that goes to Europe (Mediterranean refineries or Rotterdam). A chunk of the oil is exported by rail to China. Diesel and fuel are exported either by pipeline or by rail. That means that a lot of Russia's oil trade is constrained by export infrastructure (pipelines and ports), a lot of which it does not control directly, and which to a lot of noisy "games" over such assets.

The fact is, a pipeline makes all parties dependent on one another. They all get revenues from it, and all can block the flow of oil (the producer can stop to produce, the transporter can stop to transport, and the buyer can stop to buy - or to pay) - they are stuck together for a long time and neither can take an advantage over the others. It gets a little bit more interesting when alternative routes are available, but a lot of it is play-acting, so do not listen to all the press releases and announcements you see in the press about pipelines, most of it is fluff.

The interesting oil-related issues to understand about Russia are the following:

- Russian authorities already physically control most of Russia's exports through Transneft and Transnefteprodukt, the public monopolies in charge of oil pipelines and oil products pipelines. They also control revenues through various taxes, including those that apply specifically to export volumes. I think that Khodorkovski was sent to jail because he was trying to build his own independent infrastructure to export oil, which would have freed him from the Kremlin's oversight.

- Russia is always producing as much as it can AND exporting as much as it can, so it cannot take over the role that Saudi Arabia plays on the oil market, that of "Central Banker", able to regulate oil production and prices by either increasing or reducing its production according to needs. Russia cannot increase, and does not desire to decrease, its production, and thus has a limited influence on the market.

- Pipelines not run under long-term, transparent rules are permanent headaches, whose terms of use are subject to systematic re-negotiation, and thus prone to making a lot of noise and grabbing headlines for what are essentially inconsequential things (mostly - whether that thug or this oligarch gets the skim). Russian oil is mostly pipeline-based, and pipelines are very rigid affairs in practice.

- Remember the scale of things: When you read an article which mentions Russian oil and any amount under a billion dollars - just ignore it, it is inconsequential. oil is big business, and the headline amounts are always huge. Russian oil exports currently amount to about $200 million per day, i.e. 70 billion $ per year, plus the same side either sold locally or exported as diesel or fuel - that's more than 500 billion dollars of oil in the past 5 years alone.

- Regarding US oil companies’ interests in Russia, it is not really a question of profit. What Big Oil sees in Russia is one of the few places with large reserves of oil and private ownership of the assets. They would like a piece of the pie to replenish the reserves on their books, which show signs of weakness and which stock market investors track closely. A big investment in Russia means a few years of respite on that front. Any transaction in Russia would otherwise not be especially profitable. Exports are constrained by pipeline capacity, which means that you can only sell a fraction of your production on the world market and must sell the rest within Russia, with all the complications that entails; exports – and production generally – is heavily taxed by the Russian government, and the bureaucracy is horrendous. So it’s necessary in a long term perspective, but it’s not a miracle. Additionally, private ownership has meant until now domestic ownership, i.e. oligarchs, and they do not want to let go of their share of the pie, which they can exploit more ruthlessly than foreign investors could ever do (worse treatment of employees, of environment, “deals” on taxes, etc…).

So, would US companies want a piece of the action? Sure. Does it influence US-Russian relations? I’d say marginally only. Of course, there will be diplomatic discussion regarding specific topics, and lobbying commensurate to the scale of the projects, but nothing out of the ordinary. Exxon or Chevron are just as happy (or even more) to buy Russian assets from Putin than from Khodorkovski, if that’s what it takes.

- Where the game gets slightly more interesting is with regard to infrastructure project involving third parties, especially in the Caspian. Western companies are building the BTC pipeline (that’s the official site) which avoids Russia, but they have also built the CPC pipeline which crosses Southern Russia from Kazakhstan (and is actually the only pipeline in Russia not controlled by Transneft to this day). So it’s a high-stakes game, with no clear winner, and no easy separation between sides – as often in the oil business, sometimes you ally yourself with the company/country you are fighting/competing with bitterly elsewhere.

Caspian_oil_pipelines2bis
(click pic to enlarge)

For a good summary of the Caspian projects, go see here (official US site)

On the gas side, Russia has the largest reserves in the world (40% of the world total), is the largest producer (alongside the US, with about 20% of world production each), is the largest exporter by far (130 bcm - billion cubic meters to Europe, and another 50 bcm to former Soviet republics, especially Ukraine), and it has the most extensive pipeline system in the world. The sheer scale of its existing gas infrastructure is hard to underestimate. Most of its gas business is run by Gazprom, the state-owned monopoly, whose gas production is 5 times bigger than the second largest gas producer in the world, Shell.

Gas is purely an infrastructure business- the most important thing is to transport the gas, and you can do that only by pipeline or, after having liquefied it, on LNG tankers. Either way, the infrastructure costs a lot and imposes where the gas goes. All of Russia's exports go to Europe, and most of that go through Ukraine, but this is really not a problem, as I have explained here. (yes, in the Wall Street Journal). Pipelines create a co-dependency, which means what it says - no side can impose its will on the other(s). Europe needs Russian gas, Russia needs gas export revenues, Ukraine needs transit revenues, Russia and Europe need an uninterrupted flow of gas through Ukraine.

LNG is slowly turning gas from a local (continental) business into a worldwide market, by allowing gas to be transported between continents, but the still-high cost of the LNG chain limits its overall impact. So Russian gas, even if LNG projects like Sakhalin (very likely) or Murmansk (still speculative) happen, will mostly go to Europe, and the US have a very limited say on the trans-European gas business.

The only place where the US could have played a role was in the Caspian, and there, Russia has kicked the US's ass unambiguously. Russia fully controls Central Asian gas because all the existing pipelines from Central Asia go to Russia and it makes no sense to build new pipelines while those are not full (which they are not). The only market at stake was Turkey, which could have been supplied by Russian gas or by Western-produced gas in Azerbaijan or Kazakhstan. Russia pre-empted that by building the "Blue Stream" pipeline linking directly Russia to Turkey underneath the Black Sea. In a classic winner-takes-all situation, they have most of the Turkish market and it will be very difficult to develop new gas projects in the region before Turkish demands increases a lot more (although BP has managed to squeeze in its - smaller - Shah-Deniz project)


3. Ukraine and Russia

I’d like to come back specifically to Ukraine, as it has been in the news recently for its “orange revolution”, which has been accompanied by strange mutterings from the left that this was just another US anti-Russia, pro-Big Oil plot. A fairly typical article is this one, from the Asia Times, which I will comment as follows:

Ukraine: Oil politics and a mockery of democracy

By William Engdahl

The results of the third round of elections in Ukraine in which Viktor Yushchenko was proclaimed the final winner, far from being grounds for jubilation in Ukraine and beyond, ought to give concern for the future of Ukraine to many.

That sets the ground fairly quickly – it’s not really democracy, and it’s all about oil – and it’s BAD! Let’s see…

The recent battle over the election for president to succeed the pro-Moscow Leonid Kuchma in Ukraine was more complex than the general Western media accounts suggest. Both Russian President Vladimir Putin and George W Bush are engaged in high stakes geopolitical power plays. Both sides in Ukraine have evidently engaged in widespread vote fraud. The Western media chose to report only one side, however. Case in point: a non-governmental organization, the British Helsinki Human Rights Group, reported it found more vote irregularities on the side of the opposition Yushchenko in the contested November vote, than from the pro-Moscow Viktor Yanukovych. Yet the media reported as if fraud only took place on the side of the pro-Moscow candidate.

So – it’s all about the US and Russia, and the Western media is hopelessly biased. Not like that nice-sounding group, the “British Helsinki Human Rights Group”, which happens, despite its lofty name, to be a Buchanan-type right-wing isolationist group with strange friendships… but has been quoted extensively about the supposed anti-Russian conspiracy… Strange bedfellows in Bush-hatred.

The Ukraine elections were not about Western-sanctioned democratic voting, as some magic formula to open the door to free market reform and prosperity for Ukrainians. They were mainly about who influences the largest neighbor of Russia, Washington or Moscow. A dangerous power play by Washington is involved, to put it mildly.

“Ukrainians are uncivilized savages who know nothing about democracy – their demonstrations (tens of thousands of people 24/7 in freezing weather) are just a US plot!”

Yuschenko favors European Union and NATO membership for Ukraine. Not surprising, he is backed, and strongly, by Washington. Former US national security adviser Zbigniew Brzezinski has been directly involved on behalf of the Bush administration in grooming Yushchenko for his new role. As far back as November 2001, Yushchenko was reportedly wined and dined in Washington by the Bush administration

He was Prime Minister of his country, a fairly large European country, at that time, for chrissake! What’s so spooky about being “wined and dined”??

As regards “favoring European Union and NATO membership”, what does that mean? He favors better relations with the West – he has borders with the European Union and NATO members, so he has to deal with them. He explicitly mentions hopes of joining the European Union but NATO barely deserves a mention on his official website.

Yuschenko was pro-“foreign investment” when Prime Minister, which is usually understood to mean Western investment. As it were, in the case of Ukraine, most foreign investment has come from Russia, and Yuschenko was seen as a reliable friend of Moscow and of Russian business. Prior to the recent election fracas, he was seen as the candidate most likely to renew that policy which had been interrupted by Yanukovich (the Prime Minister and loser in the election) to favor Ukrainian oligarchs in the control of the country’s resources. Western investment in Ukraine has been minimal so far and neither candidate would have changed much there.

The Asian Times then quotes Z. Brzezinski at length. Brzezinski has long been an anti-Russian hawk, and he has always said the prying Ukraine and Russia apart was the best way to permanently weaken Russia, which for him is a worthy strategic goal. The fact that he was an influential player and that he is still part of the establishment does not mean that his advice has been followed.

There is a distinct pattern of US covert actions in changing regimes in Eastern Europe, in the context of this Eurasian strategy of the US, in which Ukraine fits the pattern. The Belgrade vote in 2000 to topple Serbian Slobodan Milosevic was organized and run by US ambassador Richard Miles. This has been well documented by Balkan sources and others. Significantly, the same Miles was then sent to Georgia, where he engineered the toppling of Eduard Shevardnadze in favor of the US-groomed Mikhail Saakashvili last year, another pro-NATO man on Moscow's fringe. James Baker III played a key role as well, as some noted at the time. Now Miles was reportedly involved in Kiev, with the US ambassador there, John Herbst, former ambassador in Uzbekistan. Curious coincidence? The Ukraine "democratic youth" organization, Pora ("High Time") is a slick, US-created entity. It is modeled on the Belgrade youth group, Otpor, which Miles also set up with help of NED and George Soros' Open Society, USAID and similar friends. Pora was given a brand image, for selling to the Western media, a slick logo of a black-white clenched fist. It even got a nifty name, the "chestnut revolution", as in "chestnuts roasting on an open fire". Before he came to power, Saakashvili was brought by Miles to Belgrade to study the model there. In Ukraine, according to British media and other accounts, Soros' Open Society, the US government's NED and the Carnegie Endowment, along with the State Department's USAID, were all involved in fostering Ukraine regime change. Little wonder Moscow is a bit concerned with Washington's actions in Ukraine.

Now we get to the core of the misunderstanding about Ukraine.

It is true that Yuschenko has been inspired by the Georgian revolution last year, and it is true that both organizations have received help, especially from the Soros Open Foundation, which has been in the region for 15 years now and has been a genuine force for democratization and grass-roots movements. It is the fact that Yuschenko was helped by these organizations that led Putin or some around him to label him the “American candidate” and start supporting Yanukovich. Many people in Moscow still do not understand that decision by the Kremlin, in view of Yuschenko’s greater openness to Russian business and his decent track record of working with Moscow back in 2001.

Once this “meme” became supported by the Kremlin, the whole “candidate of the West vs. candidate of the Kremlin”, while patently false, gained “common wisdom” status in a self-reinforcing cycle. Once Western politicians, not knowing better (or genuinely concerned by the blatant Yanukovitch electoral abuse), started to speak about it, this triggered further Russian reactions.

An interesting point to note here is that the Poles took the lead in expressing the Western point of view, and from the first time, they benefited from a quasi-explicit role of European Union spokesman and thus spoke for a much bigger constituency than just the “local neighbors”. The fact that Poland is still very anti-Russian certainly fed the cycle described above. (The whole episode has also made Poland a lot more pro-European: they experienced at first hand the leverage that the EU can bring to one country’s voice, they felt on an issue of importance to them the full solidarity of other members and the trust put in them to drive a EU joint position – welcome back to “old Europe”)

So the Russia vs West fight has been invented by the Russian out of slightly paranoid overreaction to genuine democratic impulses. Let’s please not misunderestimate the democratic commitment of dozens of thousands of Ukrainians – that kind of intense mobilization could never have happened without genuine support for Yuschenko and a real desire to fight for a free election. Never forget that Ukraine already had a peaceful democratic transition in 1994 – the pro-Western Kravtchuk was beaten fairly by Kuchma (then seen as the candidate of Russia, before turning more ambiguous), he left power peacefully and nobody protested – and Ukraine remained independent, even if really badly governed.

Washington policy is aimed at direct control over the oil and gas flows from the Caspian, including Turkmenistan, and to counter Russian regional influence from Georgia to Ukraine to Azerbaijan and Iran. The background issue is Washington's unspoken recognition of the looming exhaustion of the world's major sources of cheap high-quality oil, the problem of global oil depletion, or as the late American geologist M King Hubbard termed it, of peak oil.

Then we get to the oil conspiracies… Let’s see how they unfold.

Oil pipeline politics are also directly involved in the fight for control of Ukraine. In July 2004, the Ukraine parliament voted to open an unused oil pipeline to transport oil from Russian Urals fields to the port of Odessa. The Bush administration vehemently protested this would make Ukraine more dependent on Moscow. The 674 kilometer oil pipeline, completed by the Ukraine government in 2001, between Odessa on the Black Sea and Brody in western Ukraine, can carry up to 240,000 barrels a day of oil. In April 2004, the Ukraine government agreed to extend Brody to the Polish Port of Gdansk, a move hailed in Washington and Brussels. It would carry Caspian oil to the EU, independent of Russia. That is, were Ukraine to become dominated by a pro-EU pro-NATO regime in the November vote. (…) Last July, the Kuchma government suddenly reversed itself and voted to reverse the oil flows in Brody-Odessa, in order to allow it to transport Russian crude to the Black Sea.

The Odessa-Brody pipeline is real, and the decision to use South-North (from Russian pipes to the Black Sea) instead of North South (from the Black Sea towards Western Europe) is also a fact, but let’s not make it into a bigger thing than it is.

First of all, 240,000 b/d is to be compared to Russian exports of 4,500,000 b/d – it’s 5% of their oil exports, thus nothing to change any global balance.

Secondly, Russia has no monopoly on Caspian oil. It has some say over the CPC which, as we wrote before, is the only pipeline which is regulated by contracts under international law and not under the control of Transneft (and which exports most of the US-produced oil in Kazakhstan). It has no control over the current pipeline used for Azerbaijan exports, which goes through Georgia and not Russia, and it will have no control over the BTC pipeline currently built across Georgia and Turkey to accommodate the increasing Azeri (Western-controlled) production. So Russia is a smallish player in the Caspian oil game and the absence of the Odessa-Brody pipe is not going to cause any problems for Caspian exports.

On the other hand, using it going the other way helps the Russians increase their exports immediately by providing a new outlet, and it provides immediate revenues to the Ukrainians (as opposed to potential future ones from Black Sea sourced oil which does not really exist yet). The only ones to be really pissed are the Turks, because more oil in the Black Sea means more tanker traffic through Istanbul in the Bosporus, and the Poles who lose some transit revenue.

The pipeline can be reversed in the future if there are needs to do so, but it is not a big deal that it s going in that direction – in fact, it increases the volume of Russian oil on the international market, which should have a positive effect on prices.

Now, on the gas side, the situation is interesting as well because Ukraine physically controls close to 90% of Russian exports to Europe (as well, and this is less well known, most of the deliveries to southern Russia as the pipeline going there happens to cross into Ukraine for a short distance). What is also less said is that Ukraine depends on Russia for a good chunk of its own gas, thus creating a situation of strong co-dependency. Russian gas exports are too strategic for Russia to compromise, and the solution has basically been to pay off the Ukrainians by giving them a good chunk of their gas for free in exchange for the transit of export gas to Europe. This has been done without a hiccup for the past 10 years and there is very little incentive for anyone to change anything in that arrangement. Sure, the local oligarchs fight for the inevitable skim in the gas distribution business (as the Ukrainian populations pays for its gas, but the distributor does not pay for the gas from Russia, someone can make money there…)

I wrote about this in the Wall Street Journal a couple of years ago – you can find that article here


4. What Russia policy?

The US have a strong interest in the region (oil, war on terra, nuclear proliferation and disarmament) and will continue to have a strong diplomatic and military presence. Bush and Putin have a very similar “we’re the big boys and we like our power games – it’s-business-nothing-personal” approach to diplomacy.

They are able to cooperate punctually - as they did in the war on terra, and as can happen punctually on oil projects of common interest, in a relationship best characterized by intense rivalry. That rivalry is more obvious now that the more visible joint projects are less active (on the oil side, awaiting the Kremlin shake up of the Russian domestic industry, on the war on terra, Russia is getting pissed by the US’s permanent encroachment on its former satellites and making more of a fuss about it).

Is there an alternate policy for the Democrats?

The oil projects will remain, and are not “evil” per se. Democracy promotion is a real issue that needs to be addressed in a more consistent fashion – which is never easy when discussing in parallel multi-billion dollar investments that require the goodwill of the Kremlin.

Relations with Russia will never be straightforward; it is not a natural ally; on both sides linger the memory (and the nostalgia) of the cold war when the bilateral relationship was the most important in the world. Today, it is not anymore, but Russia still has great power pretensions and only a few arguments (i) its nukes, (ii) the UN Security council veto and its still extensive diplomatic presence around the world, and (iii) its nuisance capacity in supporting nasty regimes around the world and selling them weapons and nuclear technology (iv) its significant presence on the energy and commodity markets and its potential role as anti-OPEC (or alternatively pro-OPEC) – and its capacity to interfere in the affairs of its oil- and gas-producing neighbors. Russia wants most of all to be respected, listened to and taken seriously.

The US has Russia in mind when it thinks about (i) nuclear proliferation, (ii) access to Central Asia in the War on Terra, (iii) investments in the Russian or Caspian energy sectors, (iv) diplomatic games in a few sensitive places like North Korea, Iran, Syria, and, if we are to believe Bush and Dr Rice (v) democracy promotion (what with Russia turning authoritarian and Belarus being an “outpost of tyranny”). I am not sure that there is a global policy on these different items, as while some can lead to confrontation (Iran, US presence in Russia’s neighbors, “democracy”), most can be grounds for sensible compromise and joint work, and from the outside, it looks like each is treated independently of the other. So a smart Russian policy would be one that sets a common position taking into account all of these aspects together in a coherent fashion.

5. so, cash or subsidies?

To conclude what is becoming a pretty long text, I’ll come back to the initial cash vs subsidy and provide a Russian point of view on it: Perverse Preferences for Subsidies by an astute observer of Russian politics and business, Yulia Latynina.

The system of subsidies works something like this.

Act One. A doctor writes his elderly patient a prescription for a subsidized medicine.

Act Two. The elderly woman goes to the pharmacy. The prescribed medicine is in stock, but the pharmacist knows that the woman will only pay half-price. He won't collect the other half until the state medical insurance fund processes his request, and that could take anywhere from a month to a year. The pharmacy is privately owned and can't afford to go into the red. The pharmacist therefore tells the woman that the Russian-made medicine prescribed by her doctor is out of stock and suggests an imported equivalent, which costs $100 and is not on the list of subsidized medicines.

Act Three. There is another pharmacy around the corner. It belongs to the governor's son. This pharmacy doesn't dispense subsidized medicines, either, but it does have an excellent working relationship with the local medical insurance fund, headed by the deputy governor's daughter. The two have worked out a nifty deal: He sells medicines at full price, then files for compensation as though he had sold them at the subsidized price. She approves his request and they're both in the money. Benefits and subsidies are nothing more than a clever way to embezzle from the state budget on the pretext of providing assistance to the needy.

Russians like in-kind services better than subsidies because they know that in Russia, in-kind goods are much more likely to actually benefit them (free transport / heated buildings) than subsidies which will be diverted by bureaucrats before they reach them. Subsidies are indeed more transparent in theory when the State works and is transparent. When it does not and is not, real goods are worth a lot more.

Russians were supportive of Putin because for the average Ivan, authoritarianism is a lot better than chaos. They are getting less supportive than before not because he is suddenly turning to be too dictatorial, but because they see that he is behaving as usual, i.e. taking the wealth of the country from the old crowd of oligarchs – and giving it to a new gang of crooks loyal to him.

I’ll conclude this by quoting another insightful article about Russia : A Normal country? by a guy called Matthew Maly (go vist his website for more articles):

Our insistence on exorbitant taxes destroyed most Russian enterprises, drove all private entrepreneurs to seek protection from mafia, and fed an enormous expansion of Russia's envy-driven bloodsucking "bureaucrats" who do nothing for people yet serve as a shining example of thrift, driving to work in cars costing 60 years worth of their salary. A Russian bureaucrat may earn $2K per year, but his car could be worth $120K.

Thus, by the time vouchers kicked in, most Russian enterprises were already idle, totally destroyed, without a market, and suffering under a mountain of debt, their trained staff gone and their machine tools sold for scrap metal. An average Russian citizen got only $30 for his privatization voucher, whereas Chubais promised that it would cost at least as much as a new car. Since all property was administratively distributed, real banks did not appear, as there were no real businesses to finance. The banks that did appear were all vying for state funds and thus were corrupt, uncontrollable, and speculative institutions. This "banking system" contributed to collapse of August 1998, wiping out, yet again, savings of ordinary Russians. Why was it so? Because value of a currency is ultimately determined by goods and services that people produce. Since in Russia people either did not produce or produced "in hiding", Russian currency had arbitrary value that depended only on the amount of IMF loans Russia could get (and then distribute among a small group of cronies). That collapse destroyed what was left of people's trust in capitalism and democracy.

Also, by that time Russians were mostly underemployed, impoverished, dismayed, and confused. That sealed the fate of democratic movement. Without grassroots support, Russia's "democratic" parties turned into Moscow discussion clubs, and could not nurture and attract new leaders. No wonder that Putin is seen as a Messiah, which he is not. In fact, Putin is fundamentally incapable to solve Russia's problem: because he is the purest manifestation of that very problem.

The problem I am talking about is actually as old as Russia's history. Here is what it is. Russian citizens (all Russian citizens, and that includes Khodorkovsky) have no private property. All that the Russians have is conditional property, a permission from a bureaucrat, which says, "Live as you like, until discovered". Since Russians do not have private property, they do not have the rights, and since they do not have the rights, they are not real humans. And this is the key to entire Russian history.

Now, Russians look like humans, act like humans, and, on occasion, write mighty good poetry. And so the question that is being asked in Russia, time and again is: "If they look so much like humans why don't we turn them into humans?" "And how to do that?" "Easy: just give them the rights. They get the rights - then they acquire private property - it would protect and expand the rights - and they would then be human."

But the Russian rulers never did take this advice.

That's simple enough - do not give the Russians advice, they do not listen, are miffed, and blame you when things go wrong. Respect them, they are not "savages" or "uncivilized", and respect yourself by not compromising your values for elusive contracts or deals. 

Posted by Jérôme à Paris on January 20, 2005 at 09:15 AM | Permalink | Comments (22)

Do Not Eat iPod Shuffle

On Apple´s iPod shuffle site there is a picture of an iPod accompanied by two chewing gum stripes. The picture byline is:

iPod shuffle: smaller than a pack of gum and much more fun. (2)

The footnote says?

2. Do not eat iPod shuffle.

May be this is just a joke by Apple marketing, but other product hazard warnings are not. The recent Wacky Warning Labels contest has some fine entries of hilarious warnings and there are more scientific warnings needed.

The background of such warnings are of course potential legal claims of product users which might result in steep fines for the producer. 

Such warnings make me feel under disability and put under tutelage. How is this general high valuation of liberty and freedom compatible with the urge to make someone else responsible for ones own stupidness?

I for one don´t like to be handled as childish as is done by warning labels. I also do not like others to reduce their responsibilities by pointing to a lack of warning.

There was no label "Attacking Iraq might end in a quagmire" on the map. Saddam should be punished for that and the Iraqi people and the author of that map and the print shop and the producers of that war.

But no, not the American public or politician ... never.

Posted by b on January 20, 2005 at 07:12 AM | Permalink | Comments (20)

January 19, 2005

Inauguration Open Thread

This has been requested previously, and gained new urgency when I read the following in ths week's edition of the Onion

Caged Saddam To Be Highlight Of Inaugural Ball (scroll to "News in Brief")

WASHINGTON, DC—Attendees at the Independence Ball, one of nine officially sanctioned galas celebrating President George W. Bush's second inauguration Thursday, will be treated to a viewing of a caged Saddam Hussein, White House Press Secretary Scott McClellan said Monday. "What better way to honor the president than with a physical symbol of his many first-term triumphs?" McClellan said as Hussein rattled the bars of a cage already suspended above the ballroom where the event will be held. "And I must compliment the planning committee. Outfitting Gitmo detainees with iron collars and forcing them to serve appetizers was an inspired stroke." Ball attendees will also be awarded door prizes, including a basket of nuts, 20 yards of cloth, and a barrel of crude oil.

And sorry to squeeze somewhat the Billmon thread, but you are all in top form these days and I am sure you can handle the extra posts!

Posted by Jérôme à Paris on January 19, 2005 at 02:56 PM | Permalink | Comments (52)

Billmon: Sounds Like Victory

A new snack

Posted by Jérôme à Paris on January 19, 2005 at 02:38 PM | Permalink | Comments (37)

"Outposts of Tyranny"

Yesterday, Dr Rice unveiled the new marketing name for the bad guys: they are, ta-dam, the outposts of tyranny and they include, alongside old-timers North Korea and Iran, 4 newbies: Cuba, Burma, Belarus and Zimbabwe. Didn’t she forget someone?

(and no, it’s not Syria, Pakistan, Uzbekistan)

Bush: (WaPo interview, 15 January 2005)

Well, we had an accountability moment, and that's called the 2004 election. And the American people listened to different assessments made about what was taking place in Iraq, and they looked at the two candidates, and chose me

UK soldiers abused Iraqi detainees, court told (FT)

The British military has launched more than 100 investigations into the deaths and injuries of Iraqis in incidents that range from combat to detention to road accidents.

Evidence from major who gave order to 'work them hard' (Daily Telegraph (UK)

A courts martial of three soldiers, which has already seen shocking pictures of apparent Iraqi abuse, is set to hear from the man who allegedly gave the orders. Major Dan Taylor, of the 1 Bn The Royal Regiment of Fusiliers is to give evidence at the "Operation Ali Baba'' courts martial in Osnabruck, Germany. He is alleged to have unlawfully ordered his soldiers to punish Iraqi civilians by "working them hard''.

Gonzales Says '02 Policy on Detainees Doesn't Bind C.I.A. (NYT, regarding "torture" policy)

Officers of the Central Intelligence Agency and other nonmilitary personnel fall outside the bounds of a 2002 directive issued by President Bush that pledged the humane treatment of prisoners in American custody, Alberto R. Gonzales, the White House counsel, said in documents released on Tuesday. In written responses to questions posed by senators as part of his confirmation for attorney general, Mr. Gonzales also said a separate Congressional ban on cruel, unusual and inhumane treatment had "a limited reach" and did not apply in all cases to "aliens overseas." That position has clear implications for prisoners held in American custody at Guantánamo Bay, Cuba, and in Iraq, legal analysts said.

Bush and Clinton told Congress Saddam was smuggling oil (FT)

The Clinton and Bush administrations not only knew but told the US Congress that Iraq was smuggling oil to Turkey and Jordan, and in both cases recommended continuing military and financial aid to countries seen as important allies. (…) … two letters sent by the State Department to Congress in 1998 and 2002 clearly show that successive US administrations knew of sanctions-busting and turned a blind eye to it. Some US lawmakers are now demanding that the US also hold itself to account for those decisions and not shift all the blame to the UN.

It must be wonderful to have that kind of self-righteousness, of moral clarity, of sense of destiny. Where could I get myself one of these? How do I get rid of my wimpy doubts? Of my morally flawed conscience? Of my betraying lust for understanding and compromise? Please help!

Posted by Jérôme à Paris on January 19, 2005 at 08:37 AM | Permalink | Comments (23)

Billmon: The Evil of Banality

The banality of death squads then and now - by Billmon.

Posted by b on January 19, 2005 at 02:12 AM | Permalink | Comments (10)

January 18, 2005

A Day of Pride?

Rice

Is it possible today to ignore her politics, ignore her boss, ignore her role in the last 4 years, and be proud of the fact that she is the first African-American female Secretary of State?

And that she is not criticised for being an African-American woman, but for other (far more serious) reasons? Or is she just a token nominee meant to make everybody forget the plight of African-Americans in today's America?

Meanwhile in Europe... Condi is overshadowed by another French plot!

A380

Posted by b on January 18, 2005 at 04:07 PM | Permalink | Comments (46)

January 17, 2005

Bankers are Dangerous People

There is a mathematically certain way to win when you play heads or tails (which can be applied to any similar game with results with known probabilities):

- you bet 1 on heads
- if you win, that's it, you can go back to step one
- if you lose, you double your bet: you bet 2 on heads
- if you win, you won 1 overall (lost 1, won 2) and that's it
- if you lose, you double you bet again: you bet 4 on heads
- if you win, you won 1 overall (lost 1, lost 2, won 4) and that's it
- if you lose, you keep on doubling your bet until you win - and you will have won 1.

Of course, the amount of time to win 1 is unknown. The other problem is that you must win before you run out of money. 1, 2, 4 sound like smallish amounts, but if you get to 32 and lose, you will need 64 to keep on playing, and then 128, etc...). So this is a certain way to win - provided that you have sufficient liquidity available.

You may wonder what the link is with my title. Read on below.

Have you ever wondered why banks always have massive, plush, some times extravagant headquarters? It's not that bankers particularly need the luxury (although they do enjoy it), it's that they need to project an impression of wealth, because their survival depends on it. Banks manage and CREATE  money and money is purely a trust business.

Money nowadays is purely a convention - a dollar bill has value not because of any intrinsic value, but because everybody agrees that it has value and accepts it in exchange for real goods or services. That convenient role can disappear if people start doubting its value either as an instrument of trade or as a way to store value. They can doubt it for rational reasons (too much paper printed and thus too much money chasing too few goods - runaway inflation) or for irrational reasons (if it becomes "common wisdom" that money is not worth what it says it is).

Banks, as the institutions that create the money (by providing credit - when they provide a loan to you, you have "value" - money that you can spend, and the banks still has the same value for itself in its books - your obligation to repay is an asset which has value) are at the heart of what makes money "valuable".

Banks' basic assets are the deposits from people - their first role is to store your wealth safely. The next role is to then use these deposits to lend some of that value to others while the first clients do not need it. This has evolved, with banks  providing (a lot) more loans than they actually have in hard cash, because they know that their clients do not need to take their money out of the bank very often and they do not do it all at the same time. As long as you have enough funds to take care of normal withdrawal requirements, you can recycle the rest in loans. This provides a valuable service to the economy, by converting short term deposits (money that can be withdrawn freely at any time) into long term funds (loans repayable over a more or less long period). This allows investment and thus growth.

The flip side is that it is an inherently dangerous business - if every depositor wants his/her cash back, then the bank will not have enough money at hand in the short term to pay everybody back and may be forced to fold. That is a bank run, and it can be caused by a simple loss of trust without any objective cause, in a self-fulfilling prophecy (the simple fact that people believe the bank to be weak make them take their money out, which does weaken the bank). Trust is therefore essential for a bank to function properly - trust that it will be able to service normal withdrawal requests in full at all times.

The problem is that a run on a bank does not only damage the banks and its clients, but can have an impact on the whole economy. Loss of trust in a bank can always turn into a loss of trust in the banking system; insolvency or simply illiquidity (when it does not have enough cash at hand even though it has valuable, but not liquid, assets in its books) of a bank threatens all entities that have assets with that bank - depositors, corporate treasuries, other banks, etc... and that illiquidity can spread to otherwise healthy entities. 

The existence of such macro risks, called "systemic risk" has led governments to heavily intervene in the banking sector, either directly (by owning part or all of the banking sector) or by regulating it heavily. The main tools - deposits guarantees, minimum capital requirements, risk diversification obligations, etc... have been designed after big banking crises. Here, "big" really means "big" - banking crises can typically cost 10-50% of the yearly GDP of a country to clean up.

The next problem arising form governments intervening to avoid systemic risk is that it encourages banks to take more risks, in the knowledge that they will be rescued if things go wrong. Heads, you win, tails, the government loses, why shouldn't you play?

This is called moral hazard: it encourages reckless behavior precisely by making the consequences of such behavior less bad. This is also a problem in the insurance business (how do you get people that will be covered for the consequences of their acts not to behave dangerously?) and it is usually accompanied by a problem called "adverse selection" (if you make loans more expensive to reduce the moral hazard problem, only the people who expect not to repay you will be motivated enough to borrow...).

It's not easy to find the right balance between making banks paying for their sins and protecting the real economy from what happens if a bank folds; banking regulators have therefore tried to impose on banks more and more detailed rules on what they can do and cannot do, and, more to the point, how much capital they should hold to do every kind of operation. This led in 1988 to the creation of the Cooke ratio, which basically says that you must put aside as capital 8% of the money you lend (you can lend any "real" money you own no more than 12.5 times). A few exceptions were created for some safer categories of loans, but the system was quite primitive.

There is a massive exercise currently under way to improve these "capital adequacy requirements", usually known under the name "Basel II" (because both the 1988 and the current exercise were run under the aegis of the Bank for International Settlements, the Central Banks' Central Bank, which is based in Basel, Switzerland.) It is horribly complicated, so I won't go into more detail here; but the ironic thing is that the most sophisticated banks will be allowed to decide on their own how much capital they will put aside for each operation they do (of course, they will have to follow consistent rules that are supposed to be monitored by the regulators, but essentially, they will make their own allocations). Back to square one and the Venise merchant bankers trading on their good name alone (with a big bureaucracy attached to them)...

Anyway, that's the theoretical (and macro) part. let's now go into the practical (and individual) ways in which bankers can be dangerous...

- Commercial bankers see their remuneration based more and more on "upfront fees", i.e. amounts paid by the client on the date of signing of the loan (or the date of disbursement) in addition to the interest which will be paid throughout the duration of the loan. Future revenues are thus of little interest to the bankers deciding how to price a transactions. Client can be tempted to ask for longer durations, accept a larger upfront fee in return for a lower interest rate afterwards. They are happy, the commercial banker is happy, and the bank gets stuck for a long time with a poorly remunerated risk.

- Commercial bankers are not really blamed, if they are wrong with everybody else. They are victims of "the Asian crisis", the "dot-com bubble", "the real estate crash", and, as long as they did not lose more money than their counterparts in other banks, it's not too bad. Of course, they all went there in the first place because it looked attractive and juicy, and after a while, the money lent did not support viable propositions.
Bankers work in herds. Once one has shown the way to make money, they all pile in; as there are more of them, they start offering better and better terms to the clients, take more risk for less reward. "It's the market" they say when they are in, and when it crashes, they only did like the rezst of the market, so they cannot be blamed...
On the other hand, stay out of the market when the going is good and you will be blamed for not bringing in revenues like the others. Very few banks, in my experience, seem to look at the total returns through the good and the bad times. And worst of all, commercial bankers in many financial sectors are recycled every few years, so those that might have the experience of what not to do are gone, leaving only new guys keen to make their mark, make a quick buck and fall in the same pitfalls (or new ones) on their own.

- The safeguards against these behaviors is that commercial bankers do not decide whether to make the loan or not. A "Credit Committee" decides this, and it is usually composed of the top management of the bank, with advice from the "credit department", or "risk department", i.e. the guys playing defense, who are supposed to know what can go wrong in a deal and kill unreasonable propositions. Commercial guys thus spend a lot of time "selling" their deals to the risk guys, finding a compromise on what can be acceptable. When it works well, and the risk people are competent, the results are reasonable for all, but the system can easily go astray.
The top management can care more about generating income, league table status (that's the rankings of banks by the number of deals or the value of deals they have done) or improving their stock price by getting short term income quick; if they are powerful enough, they can overrule the risk guys in the decision-making process. Depending on how the risk department is structured, it may not know as much on the market as the commercial guys and may not always be in a position to argue against deals with enough information. Risk people do not get bonuses for deals, and may not have the same motivation to fight a deal than the commerical guys have to conclude it. This is an organisational issue which has no simple answers, and which various banks handle more or less well.

- Banks rely a lot on "syndications": the bank that makes a loan shares the risk with other banks. Some may say: "oh, if X has done the deal, it must be good, so let's go in" without really checking what's in it. The commercial people will say "this is a popular deal, we have to get in or we won't be credible in the market afterwards", "it's a chance to get closer to that client", etc... This reinforces herd behavior, fads and self fulfilling prophecies (a deal is popular because it is popular) and can lead to bubbles and reckless lending. Now, everybody is supposed to check everything, but this is not always done, and you'd be surprised at some of the things that go through the scrutiny of many extremely qualified people in many respectyable institutions without being noticed.

- In the bond market, it is even worse, because the banks that structure the deal (define its parameters and negotiate them with the borrower) do not even keep the risk.They sell it all to the bond market. Once it's sold, they don't really care how it fares (especially as the restructuring teams are usually completely different form the initial structuring teams if there are any problems) So how do they sell their bonds? By having massive sales desks who work, for a good part, on their reputation ("if it's X selling the bond, it' s surely good paper" thinks many a bond buyer). Now a reputation is something worth defending, but we see that in heady times, things can go astray pretty quickly.

Luckily, we have not had a banking crisis in recent years, thanks to decent risk management by the banks and a long streak of increasing bubbles which have each saved banks from the bursting of the previous one. The LTCM debacle in 1998 brought us really close to a total worldwide financial meltdown. It's a bit more complicated than that, but they essentially played a supposedly safe game as described at the top of the post, and forgot that they could run out of money (in their case, they made massive bets and forgot that these bets made only sense if they had a counterparty. When the markets dried up because of the nervousness from the Asian and Russian crises, they got stuck with huge open positions that they could not cover). Who know what the new one will be?

Anyway, just because a banking crisis has not happened recently, does not mean that it will not happen again. Bankers are really smart at finding new ways to lose money, especially when it's not theirs.

If you are still wondering what the link is between my title and the first part of the text, there isn't, really. Maybe that - there is no free lunch. Risk has a funny way to come and bite you when you don't expect it - and you should never let the people who have/create/play with you money forget that.

Posted by Jérôme à Paris on January 17, 2005 at 06:38 PM | Permalink | Comments (44)

"The Coming Wars"

As pre-reported in Haaretz and elsewhere, "The Coming Wars" by Seymour Hersh is now published in The New Yorker.

Hersh describes how Bush has consolidated the control over the military and intelligence services and bought off Pakistan and how he will use this to initiate air and commando attacks on Iran and for military operations in other countries.

The administration had its "moment of accountability", as Bush characterizes his reelection in a recent Washington Post interview. The voters have justified the continuation of the neocon's plans and methods.

"This is the last hurrah - we’ve got four years, and want to come out of this saying we won the war on terrorism.", a former high-level intelligence official tells Hersh.

Hersh continues:

The President has signed a series of findings and executive orders authorizing secret commando groups and other Special Forces units to conduct covert operations against suspected terrorist targets in as many as ten nations in the Middle East and South Asia.
...
"The civilians in the Pentagon want to go into Iran and destroy as much of the military infrastructure as possible," the government consultant with close ties to the Pentagon told me.
...
The American task force, aided by the information from Pakistan, has been penetrating eastern Iran from Afghanistan in a hunt for underground installations.
...
There has also been close, and largely unacknowledged, cooperation with Israel. The government consultant with ties to the Pentagon said that the Defense Department civilians, under the leadership of Douglas Feith, have been working with Israeli planners and consultants to develop and refine potential nuclear, chemical-weapons, and missile targets inside Iran.
...
"We’re not dealing with a set of National Security Council option papers here," the former high-level intelligence official told me. "They’ve already passed that wicket. It’s not if we’re going to do anything against Iran. They’re doing it."

Two former C.I.A. clandestine officers .. reported last month on the existence of a broad counter-terrorism Presidential finding that permitted the Pentagon "to operate unilaterally in a number of countries where there is a perception of a clear and evident terrorist threat." ...

The two former officers listed some of the countries - Algeria, Sudan, Yemen, Syria, and Malaysia. (I was subsequently told by the former high-level intelligence official that Tunisia is also on the list.)
...
In some cases, according to the Pentagon advisers, local citizens could be recruited and asked to join up with guerrillas or terrorists. This could potentially involve organizing and carrying out combat operations, or even terrorist activities.

Hersh also describes how all the preparations are done outside of congressional oversight.

We know that Hersh and The New Yorker do rigid fact checking before reporting and his writing is a confirmation of other reports like on drones being seen and - in one case - shoot down over Iranian complexes.

What is missing so far is a preparation of the public mind in form of an "incident". But then - is there really a need for this?

Shortly after the Bush recoronation and the Iraqi elections ("there is no middle road"-Allawi is the allowed choice), military action against Syria is imminent. The attack on Iran will follow in March or April and further actions from either side involving Saudi oil installations in the late summer.

Sharon has already started his part of the Middle East war by ordering harsher operations against Palestine "without restrictions, I repeat, without restrictions" meaning indiscriminate artillery attacks on refugee camps in Gaza.

Many innocent people will die in this coming slaughter and oil will cost well over US$ 100 per barrel by the end of this year.

Posted by b on January 17, 2005 at 04:05 AM | Permalink | Comments (104)

January 16, 2005

Open Thread

News, views, opinions ...

Posted by b on January 16, 2005 at 06:42 AM | Permalink | Comments (67)

January 15, 2005

Billmon: Game Plan

Billmon presents the President's game plan on Social Security and similarities to the game plan of another historic leader.

Posted by b on January 15, 2005 at 04:31 PM | Permalink | Comments (96)

January 14, 2005

The Crime

"They were taking pictures of what they did at work all day," [Guy Womack, Specialist Graner's civilian lawyer,] said of Specialist Graner and his friends. "The crime is that somebody leaked the photographs. It got out to the public and it embarrassed the United States government. And that's a shame. I wish it hadn't happened.

NYT: Jury Takes Five Hours to Reach Verdict in Abu Ghraib Case

Posted by b on January 14, 2005 at 08:12 PM | Permalink | Comments (31)

Iraq Thread

Insurgents step up sectarian violence in Iraq (FT - front page)

Iraq New Terror Breeding Ground - War Created Haven, CIA Advisers Report (Washington Post)

Former Secretary of State James Baker (under Bush I) urges phased exit of U.S. troops from Iraq. (ABC News)

US 'erodes' global human rights (BBC)

"We will leave when the job is done"

Get_the_job_done_1

Iraq New Terror Breeding Ground - War Created Haven, CIA Advisers Report (Washington Post)

Iraq has replaced Afghanistan as the training ground for the next generation of "professionalized" terrorists, according to a report released yesterday by the National Intelligence Council, the CIA director's think tank.

Iraq provides terrorists with "a training ground, a recruitment ground, the opportunity for enhancing technical skills," said David B. Low, the national intelligence officer for transnational threats. "There is even, under the best scenario, over time, the likelihood that some of the jihadists who are not killed there will, in a sense, go home, wherever home is, and will therefore disperse to various other countries."

Insurgents step up sectarian violence in Iraq

A senior aide to Grand Ayatollah Ali Sistani, Iraq's top Shia cleric, was assassinated yesterday as insurgents stepped up their violent campaign to disrupt the January 30 elections by provoking sectarian tensions.

Mahmoud al-Madaeni, Mr Sistani's representative in the mixed Sunni-Shia region of Salman Pak, was attacked on his way home from evening prayers along with his son and two others.

Serious Sunni-Shia violence has been avoided until now, largely due to the Grand Ayatollah's insistence that Shias refrain from reprisals that could trigger a civil war.

(snip)

* The Iraq war cost $102bn to the end of September 2004, with monthly spending averaging $4.8bn, according to the latest Pentagon figures released yesterday. Experts say the total will be considerably higher once replacement costs for vehicles are added.

Former Secretary of State James Baker (under Bush I) urges phased exit of U.S. troops from Iraq.

A protracted U.S. military presence in Iraq is probably unavoidable since attacks on U.S.-led coalition forces and on Iraqi security forces are likely to continue, Baker said Tuesday in a speech at Rice University in Houston.

"Even under the best of circumstances, the new Iraqi government will remain extremely vulnerable to internal divisions and external meddling," he said.

Still, former President George H.W. Bush's secretary of state said, "any appearance of a permanent occupation will both undermine domestic support here in the United States and play directly into the hands of those in the Middle East who however wrongly suspect us of imperial design."

US 'erodes' global human rights

In its annual report, Human Rights Watch says that when a country as dominant as the US openly defies the law, it invites others to do the same.

It says an independent US commission should look into prisoner abuse at Iraq's US-run Abu Ghraib jail.

According to the New-York based group, abuses committed by the US have significantly weakened the world's ability to protect human rights.

"The US government is less and less able to push for justice abroad, because it's unwilling to see justice done at home," said Kenneth Roth, executive director of HRW.

"They should be grateful"

Grateful

Posted by Jérôme à Paris on January 14, 2005 at 11:54 AM | Permalink | Comments (109)

MoA Census Summary

Here are some preliminary results from the census thread below:

- 123 posts

- 117 contributors (assuming that all anonymous entries are different people)

- 57 have their exact rank, with no comments

- 44 have provided their e-mail, 7 a website

- 66 have left a name, including one "Anonymous"

- 7 have left no name at all

- last exactly correct contributor: 85 (and - isolated, 110) despite Stoy's and LeslieinCA's efforts to bring back the numbering on track.

More interestingly, I have noted (this is a subjective count - some of the "lurkers" may have been contributors at the Whiskey Bar that I do not remember - and do note that these are rounded numbers because the frontier is hard to tell and more precision is error-inducing, so the total does not match...)

- 50 or so regular contributors

- 25 or so occasional or past contributors

- 40 or so "lurkers"

while a few of the regulars have not participated in the census

Which means either that more than half of the readers contribute or that not many of the lurkers joined the census...

As this site was built from e-mail messages sent to about 100 people and, until recently, very little outside publicity,  the number of readers sounds realistic as a ball park figure, which means that the ratio of contributors is pretty damn high, which is great (self congratulations to all!). Let's continue to keep this place lively!

As you may have seen, I have made a few more visible postings over at Kos. Do any of you have any strong opinions either way about this (stop/continue)? This thread may be used for meta comments, but please be warned that if it turns into a brawl I will stop the comments in order to avoid a Annex-style meltdown (and b - feel free to cut off the comments at any time if you think this thread is a bad idea).

Posted by Jérôme à Paris on January 14, 2005 at 09:55 AM | Permalink | Comments (22)

January 13, 2005

Billmon: Scenes From the Bunker

Billmon has posted again

The Shirer quote was posted not so long ago either here in a thread or in a kindred site and the same thought came to my mind this morning when I read the FT. Soon the MoA collective be channeling Billmon directly!

Posted by Jérôme à Paris on January 13, 2005 at 04:59 PM | Permalink | Comments (31)

The price of "free" media

(Last call for those that did not see it - join the MoA census)

Can we still have an independent media?

Can we still have an independent mass media?

Some facts and thoughts below the fold.

- In France, 70% of dailies (by circulation) are owned by two industrial groups heavily involved in the weapons business and thus very dependent on public purchases (Dassault, the plane maker, has recently bought Le Figaro and a host of regional dailies; Lagardère, 15% owner of EADS, another plane and weapons maker, also owns through its media affiliate Hachette a bunch of other regional dailies). The rest (including Le Monde and Libération) are in a frail financial situation;

- In many countries, the combined emergence of the internet-based news sites and of free, advertising-based dailies (Metro, 20 minutes, etc) are threatening “serious” newspapers that rely on daily purchases or subscriptions for a significant portion of their income. The free dailies use skeleton crews and rely on the wires and press agencies for their info, it’s very basic and bare – simple facts, limited or no analysis – and when there is no advertising market, there is no paper and thus no news - as happened during the winter holidays, when the biggest news for a while – the tsunami – took place and the free papers were simply not there to report about it as they were not published in what is a low readership period...

- In Russia, admittedly an extreme case, you can pay to have (i) articles favorable to you published (ii) articles critical of your competitors/rivals published (iii) articles critical of you NOT published. A few people that control what goes into the papers have made a lot of money out of this. (Now THAT’s “pure” capitalism, isn’t it? – everything has a price)

- Meanwhile, journalists keep on getting killed or kidnapped around the world.

Let’s face it, the main information outlets nowadays are TV channels anyway, and they follow the rules of show business, which make for strange economics. Winner-takes-all phenomena (a few shows/personalities attract all the attention, the viewers and thus the advertising, leaving very little to less well known newscasters), celebrity behavior (TV people become the news or influence them instead of reporting them) and that stark truth: the clients of TV channels are not the viewers, they are the advertisers, and they respond to what advertisers want: no controversy, no uncomfortable truth, “values”, etc… Most people rely only on TV for their news, and TV does not usually provide complexity, diversity or contradiction other than as a show.

France, strangely eough,  also provides the ultimate counter-example: the most profitable newspaper in the country is also the most independent as it does not accept advertising AT ALL. “Le Canard Enchaîné”, an influential satirical/political weekly, relies entirely on its readership for its revenues and it is making tons of money. Thanks to its independence, it is the newspaper that has uncovered the most scandals in the past 30 years and it has acquired a very strong reputation and credibility. It is also the preferred vehicle for political gossip and dirt and thus has a faithful base amongst the political junkies. Sadly, it is not on the net; its journalists have no known e-mail addresses… (one of the most famous scandals was about 30 years ago, when they caught “plumbers” trying to install listening devices in their offices; they have had repeated burglary attempts and they protect their archives very seriously)

Is this a sustainable model – high quality, ad free, fully paid for by its readership? Can more than one or two papers in each country follow such a path? Is it enough to ensure that a quality press still exists?

And - are islands of quality accessible to – and accessed only by – a privileged few enough? The Bush administration seems to be testing that sorely, by pushing lies and relying on their access to the not-maniacally-informed majority, and not caring about what the well-informed minority (us) knows.

Can we fight back?

Posted by Jérôme à Paris on January 13, 2005 at 12:55 PM | Permalink | Comments (25)

January 12, 2005

Useless Statistical Almanach - n°2

(Don't forget to participate in the census if you have not yet done so)

Today, a very simple quiz:

A medical condition happens in the population with a frequency of 1 in 5000 people.
There is a test to decide if you have the disease, but it has a 5% error rate
You get tested, and are found positive for the disease.

What is the probability that you actually have the condition?

(Answer in a little while. Propose your bets in the comments, don't explain - yet - how you got there, but tell us how confident you are in your proposal...)

The proportion of MDs who got it right is pretty low, sadly, and worryingly.

Posted by Jérôme à Paris on January 12, 2005 at 07:10 PM | Permalink | Comments (64)

The Tangled Web Continued ...

Billmon collected quotes for this piece, May 29, 2003

Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction.
Dick Cheney, Speech to VFW National Convention, August 26, 2002

Right now, Iraq is expanding and improving facilities that were used for the production of biological weapons.
George W. Bush, Speech to UN General Assembly, September 12, 2002

If he declares he has none, then we will know that Saddam Hussein is once again misleading the world.
Ari Fleischer, Press Briefing, December 2, 2002

We know for a fact that there are weapons there.
Ari Fleischer, Press Briefing, January 9, 2003

Our intelligence officials estimate that Saddam Hussein had the materials to produce as much as 500 tons of sarin, mustard and VX nerve agent.
George W. Bush, State of the Union Address, January 28, 2003

We know that Saddam Hussein is determined to keep his weapons of mass destruction, is determined to make more.
Colin Powell, Remarks to UN Security Council, February 5, 2003

We have sources that tell us that Saddam Hussein recently authorized Iraqi field commanders to use chemical weapons -- the very weapons the dictator tells us he does not have.
George W. Bush, Radio Address, February 8, 2003

If Iraq had disarmed itself, gotten rid of its weapons of mass destruction over the past 12 years, or over the last several months since (UN Resolution) 1441 was enacted, we would not be facing the crisis that we now have before us . . . But the suggestion that we are doing this because we want to go to every country in the Middle East and rearrange all of its pieces is not correct.
Colin Powell, Interview with Radio France International, February 28, 2003

So has the strategic decision been made to disarm Iraq of its weapons of mass destruction by the leadership in Baghdad? . . . I think our judgment has to be clearly not.
Colin Powell, Remarks to UN Security Council, March 7, 2003

Intelligence gathered by this and other governments leaves no doubt that the Iraq regime continues to possess and conceal some of the most lethal weapons ever devised.
George W. Bush, Address to the Nation, March 17, 2003

Well, there is no question that we have evidence and information that Iraq has weapons of mass destruction, biological and chemical particularly . . . all this will be made clear in the course of the operation, for whatever duration it takes.
Ari Fleisher, Press Briefing, March 21, 2003

There is no doubt that the regime of Saddam Hussein possesses weapons of mass destruction. And . . . as this operation continues, those weapons will be identified, found, along with the people who have produced them and who guard them.
Gen. Tommy Franks, Press Conference, March 22, 2003

I have no doubt we're going to find big stores of weapons of mass destruction.
Defense Policy Board member Kenneth Adelman, Washington Post, p. A27, March 23, 2003

One of our top objectives is to find and destroy the WMD. There are a number of sites.
Pentagon Spokeswoman Victoria Clark, Press Briefing, March 22, 2003

We know where they are. They're in the area around Tikrit and Baghdad and east, west, south and north somewhat.
Donald Rumsfeld, ABC Interview, March 30, 2003

Obviously the administration intends to publicize all the weapons of mass destruction U.S. forces find -- and there will be plenty.
Neocon scholar Robert Kagan, Washington Post op-ed, April 9, 2003

But make no mistake -- as I said earlier -- we have high confidence that they have weapons of mass destruction. That is what this war was about and it is about. And we have high confidence it will be found.
Ari Fleischer, Press Briefing, April 10, 2003

We are learning more as we interrogate or have discussions with Iraqi scientists and people within the Iraqi structure, that perhaps he destroyed some, perhaps he dispersed some. And so we will find them.
George W. Bush, NBC Interview, April 24, 2003

There are people who in large measure have information that we need . . . so that we can track down the weapons of mass destruction in that country.
Donald Rumsfeld, Press Briefing, April 25, 2003

We'll find them. It'll be a matter of time to do so.
George W. Bush, Remarks to Reporters, May 3, 2003

I'm absolutely sure that there are weapons of mass destruction there and the evidence will be forthcoming. We're just getting it just now.
Colin Powell, Remarks to Reporters, May 4, 2003

We never believed that we'd just tumble over weapons of mass destruction in that country.
Donald Rumsfeld, Fox News Interview, May 4, 2003

I'm not surprised if we begin to uncover the weapons program of Saddam Hussein -- because he had a weapons program.
George W. Bush, Remarks to Reporters, May 6, 2003

U.S. officials never expected that "we were going to open garages and find" weapons of mass destruction.
Condoleeza Rice, Reuters Interview, May 12, 2003

I just don't know whether it was all destroyed years ago -- I mean, there's no question that there were chemical weapons years ago -- whether they were destroyed right before the war, (or) whether they're still hidden.
Maj. Gen. David Petraeus, Commander 101st Airborne, Press Briefing, May 13, 2003

Before the war, there's no doubt in my mind that Saddam Hussein had weapons of mass destruction, biological and chemical. I expected them to be found. I still expect them to be found.
Gen. Michael Hagee, Commandant of the Marine Corps, Interview with Reporters, May 21, 2003

Given time, given the number of prisoners now that we're interrogating, I'm confident that we're going to find weapons of mass destruction.
Gen. Richard Myers, Chairman Joint Chiefs of Staff,  NBC Today Show interview, May 26, 2003

They may have had time to destroy them, and I don't know the answer. Donald Rumsfeld,  Remarks to the Council on Foreign Relations, May 27, 2003

For bureaucratic reasons, we settled on one issue, weapons of mass destruction (as justification for invading Iraq) because it was the one reason everyone could agree on.
Paul Wolfowitz, Vanity Fair interview, May 28, 2003

It was a surprise to me then — it remains a surprise to me now — that we have not uncovered weapons, as you say, in some of the forward dispersal sites. Believe me, it's not for lack of trying. We've been to virtually every ammunition supply point between the Kuwaiti border and Baghdad, but they're simply not there.
Lt. Gen. James Conway, 1st Marine Expeditionary Force, Press Interview, May 30, 2003

Do I think we're going to find something?  Yeah, I kind of do, because I think there's a lot of information out there."
Maj. Gen. Keith Dayton, Defense Intelligence Agency, Press Conference, May 30, 2003

After some 100,000 died and many more are injured and maimed, after billions spend and no light at the end of the tunnel, nobody even feels obliged to make an official announcement.

WaPo:
Search for Banned Arms In Iraq Ended Last Month - Critical September Report to Be Final Word

The hunt for biological, chemical and nuclear weapons in Iraq has come to an end nearly two years after President Bush ordered U.S. troops to disarm Saddam Hussein. The top CIA weapons hunter is home, and analysts are back at Langley.
...
The ISG has interviewed every person it could find connected to programs that ended more than 10 years ago, and every suspected site within Iraq has been fully searched, or stripped bare by insurgents and thieves, according to several people involved in the weapons hunt.
...
Congress allotted hundreds of millions of dollars for the weapons hunt, and there has been no public accounting of the money. A spokesman for the Pentagon's Defense Intelligence Agency said the entire budget and the expenditures would remain classified.
...
A small group of Iraqi scientists still in U.S. military custody are not being held in connection with weapons investigations, either.

Three people involved with the ISG said the weapons teams made several pleas to the Pentagon to release the scientists, who have been interviewed extensively.
...
None of the scientists has been involved in weapons programs since the 1991 Gulf War, the ISG determined more than a year ago, and all have cooperated with investigators despite nearly two years of jail time without charges. U.S. officials previously said they were being held because their denials of ongoing weapons programs were presumed to be lies; now, they say the scientists are being held in connection with the possible war crimes trials of Iraqis.
...
Since March 2003, nearly a dozen people working for or with the weapons hunt have lost their lives to the insurgency.

Posted by b on January 12, 2005 at 12:25 PM | Permalink | Comments (18)

Gas Fears

The Financial times has a big article today on European worries about dependence on Russian gas

The French and British governments are particularly worried that Moscow's rising prominence as an energy supplier, not just to Germany but to Europe, is turning into an economic and political hazard for the entire continent.

"North Sea oil is running out, France has shut its coalmines, and Europe will soon be completely dependent on the rest of the world and Russian gas in particular," says one senior French government official. "We must be extremely vigilant on this issue."

Although some analysts dismiss French worries of dependence on Russia as a means of reinforcing the legitimacy of France's vast nuclear energy programme, many also agree that Germany's position vis-à-vis Russia is too weak.

Germany already imports 35 per cent of its oil and 40 per cent of its gas from Russia, more than any western European country. As fossil fuel reserves dry out in Europe, experts expect its dependence on Russian imports to reach 60 to 70 per cent by 2020

As I wrote in an open thread last month (and included in a larger Kos post about Russia), natural gas is a co-dependency relationship: Russian gas is deliverd only by pipeline to Europe and big pipelines mean that the supplier (Russia) has one client (Europe), and the client has one supplier; so they are stuck with one another and cannot do anything that would jeopardise that fundamental fact. And just as surely as Europe depends heavily on Russian gas, Russia depends heavily on gas revenues. Sure, there's a lot of theater, jockeying around, politicking, but essentially, it's a draw. Relations between Russia and Europe will be tumultuous, and probably poor or tense a lot of the time but they cannot be allowed to go bad.

The more interesting situation is on the Northern American continent, where there is no perception of a natural gas crisis as of yet although a crisis could come a lot sooner than expected.

BG, the British natural gas group, which has a strong presence in the US LNG market (natural gas liquefied so as to be transported by boat) says publicly that there will be a shortage of gas in the next 10 years:

Us_gas_supply_gap

As this graph shows, BG's optimistic projections for LNG are barely sufficient to cover the gap between gas supply and demand in the most conservative case (counting domestic US production as well as Canadian exports).

This means that natural gas prices (which have alredy gone from 2$/MBTU to 5$/MBTU in the past few years) are going to keep on rising; this in turn will have an impact on elctricity costs (gas makes up 20+% of US electricity production) and is likely to generate more funny diplomacy with potential LNG suppliers (that includes Equatorial Guinea, Angola, Nigeria as well as Russia, Indonesia or Qatar, and possibly Iran) and local controvery as more harbors for LNG tankers and LNG regazification plants need to be built on US coasts...

Posted by Jérôme à Paris on January 12, 2005 at 06:32 AM | Permalink | Comments (15)

January 11, 2005

Care-free Open Thread

Please don't forget to participate to the census below if you haven't done so yet!

Nq050110_activist

Many sightings of Billmon these days (over at patriotboy - the well known "French" site, over at Brad de Long - the "French communist", and possibly in the Non-Marx thread (1/11, 12:46)).

Is it time to rejoice his return?


Blogschool

Posted by Jérôme à Paris on January 11, 2005 at 04:30 PM | Permalink | Comments (34)

Billmon: Bumper Sticker

New Billmon post, still on the "Salvador" topic.

Posted by Jérôme à Paris on January 11, 2005 at 05:22 AM | Permalink | Comments (179)