Tuesday, September 30, 2008

Wen Jiabao and Marcus Aurelius

At the top of the page it says this blog is about promoting "global citizenship." It was, in fact, my reading of Marcus Aurelius that inspired me to so dedicate this blog. Marcus Aurelius, Roman emperor and philosopher, was one of the first -- and among the most prominent persons of all time -- to articulate the ideal the unity of all the peoples of the world.

Fareed Zakarai recently interviewed Chinese Premier Wen Jiabao (transcript). It seems to me that something hopeful emerged from the interview: we discover that the Chinese premier is a fan of Marcus Aurelius. Here are two interesting excerpts from the interview:
FAREED ZAKARIA: You have said that you have read the works of Marcus Aurelius 100 times. Marcus Aurelius is a famous Stoic philosopher.

My reading of him says that one should not be involved in the self and in any kind of pursuits that are self-interested, but should be more for the community as a whole.

When I go to China these days, I'm struck by how much individualism there is, how much consumerism there is. Are you trying to send a signal to the Chinese people to think less about themselves and more about the community?

WEN JIABAO: (voice of interpreter): It is true. I did read the "Meditations" written by Marcus Aurelius Antonio many occasions. And I was very deeply impressed by the words that he wrote in the book to the effect that, where are those people who were great for a time? They are all gone, living only a story, or some even just half a story.

So, I draw the conclusion that only people are in the position to create history and to write history.

I very much value morality. And I do believe that entrepreneurs, economists and statesmen alike should pay much more attention to morality and ethics.

In my mind, the highest standard to measure the ethics and morality is justice.

It is true, in the course of China's economic development, some companies have actually pursued their profits at the expense of morality. And we will never allow such things to happen.

We will not allow economic growth at the expense of the loss of morality, because such an approach simply cannot be sustained. That's why we advocate corporate, occupational and social ethics.
At end of the interview, Zakarai summed up some of the highlights of his talk with the Chinese Premier:
FAREED ZAKARIA: [. . . ] in our conversation, China's premier cited with ease Adam Smith's "The Wealth of Nations." It is, by the way, a great book.

And it made me think that perhaps it would be a good idea to suggest a book that is worth reading, every week on this program. Let's start with Wen Jiabao's real favorite, the "Meditations" of Marcus Aurelius, the Roman emperor in the second century A.D.

Aurelius' "Meditations" define what is often called a Stoic view on life. It really is worth reading to get a glimpse of a world totally removed from the consumerism and instant gratification of modern-day America - and China, as well.

To desire anything, Aurelius wrote, is to be permanently disappointed, since what we desire is empty, corrupt and paltry. Death is to be welcomed, because it marks an end to desire.
Zakarai is correct to suggest that the philosophy of Marcus Aurelius offers an alternative to the consumerist worldview. And it was this ethics which Wen extolled in the interview.

However, just as noteworthy, perhaps, is the fact that the particular classical author favored by the Chinese premier advocated a notion of global citizenship. Marcus Aurelius Antoninus believed that we are all members of the kosmopolis or "universal city." In Book Six of his Meditations, Marcus wrote:
My nature is rational and social; and my city and country, so far as I am Antoninus, is Rome, but so far as I am a man, it is the world.
If you read the Meditations carefully, you will see that cosmopolitanism is not peripheral to the ethical worldview of Marcus. According to this philosophy, the unity of human beings is based on our common capacity to exercise reason.

To extent does Wen Jiabao genuinely embrace the teachings of the Roman statesman and philosopher? It is difficult to say. But the Chinese premier's professed interest in Marcus Aurelius must certainly be regarded as a positive sign. Perhaps it is even cause to hope that the Chinese will come to embrace the cosmopolitan ideal in the years to come.
__
Hat-tip Fallows

Pelosi speech blamed for failure of bill to pass

The $700 billion rescue package -- negotiated by leaders of both parties and the White House over the weekend -- has failed to pass in the US House of Representatives.

The Republican House leadership is blaming Nancy Pelosi for making a partisan speech prior to the vote. Let me get this right: the entire economy is supposedly to on the brink, and a few words from Pelosi were sufficient to spoil the rescue plan?

Either the bill was worth supporting or it was not. How could the Republicans have put their very delicate political egos ahead of the public interest? Whatever Pelosi said, the Republican leadership's excuse is pathetic.

Krugman, an American economist whom recent history has largely vindicated, has taken this occasion to quote himself:
So what we now have is non-functional government in the face of a major crisis, because Congress includes a quorum of crazies and nobody trusts the White House an inch. As a friend said last night, we’ve become a banana republic with nukes.
UPDATE: If you have Real Player, you can watch Nancy Pelosi's speech here. Pelosi was basically just describing what actually happened. Her speech was more factual than partisan. It's no secret who is mainly to blame for this mess.
UPDATE 2: Dow was down -720. The New York market is experiencing it's largest point drop of any single day in its entire history. Credit markets are described as "frozen" meaning businesses will have trouble borrowing money.
UPDATE 3: Dow closed down -777.7 points. That's the largest one-day point drop in history.

Monday, September 29, 2008

First anniversary of the 2007 crackdown in Burma

A new piece of evidence came to light that weighs on an old question this first anniversary of the brutal crackdown in Burma against protesting monks and townsfolk.* The evidence concerns a possible -- indeed seemingly likely -- connection between the Burmese uprising of September 2007 and the Tibetan protests of March 2008. As longtime Jotman readers know, I have blogged extensively about both events (see my Burma 2007 page; Tibet 2008 page).

One question I have been trying to answer -- which may well relate to Rangoon as much as to Lhasa -- is: What is the strategic principle by which China's security planners operate?

Perhaps the answer was lying in the streets.

Myanmar 2007
One clue to China's own modus operandi concerns how its ally, Myanmar dealt with the peaceful protests in September 2007. How had Myanmar prepared for protesters? With troops, indeed. But also with truckloads of bricks, as these reports indicate:
Another truck pulled up, full of bricks. Three men in the back began throwing the bricks on the road - ammunition for the protesters. But riot police were already trudging up Sule Pagoda Road. . . . Not one protester threw a brick at the soldiers. The truck roared off again. - Time
In chaotic scenes in the city centre, protesters also stopped a truck carrying bricks and used them to pelt a police post near the Traders Hotel. - The Age
This group of people had gotten very angry because the military had begun beating the monks. So they started throwing stones and bricks at the riot police and soldiers. . . At this point I tried to request to the people not to do violence. Although, of course, the troops had started the violence. . . - Monk leader Ashin Kovida, interviewed by Jotman
The security principle on the streets of Rangoon was relatively simple.

Were it to appear that otherwise peaceful protesters had "cast the first stone," a violent -- and presumably effective -- government crackdown is easier to justify. Domestic opinion in the wake of state violence is crucial and world opinion matters too. One core principle guiding Myanmar security planners: How do we incite peaceful protesters to violence?

Lhasa 2008 (and some new evidence)
At the time, there were suggestions that the Myanmar regime was getting its advice on how to handle the peaceful protests from Beijing (We have no reason think otherwise). Are we to suppose Burma's modus operandi for handling peaceful protests differs in principle from that of Beijing? Perhaps it should not come as any surprise that some testimony and video evidence regarding the riots in Lhasa seems suggestive of similar tactics. Allegations have been made that stones or bricks had been put in position in advance in Lhasa prior to the riot scenes. Commentator Mr. Chen Pokong said:

In this year's protest, the riot scene was quite similar to that of 1989. . .

The actions seemed well planned and coordinated, and were conducted with skill. At the crossroads near the Ramoche Monastery, someone prepared in advance many stones of a similar size, each weighing a couple of kilograms. These stones magically escaped the attention of numerous policemen and plainclothes agents who flooded the city.**

The conspicuous presence of stones is alleged by an expose of a video which shows a helmeted motorcyclist getting stones thrown at his head (described in this post).** The video commentary asks:
Is the street full of stones? No! Most of the stones used by the attackers are around the motorcycle! In fact the first attacker picked up a large stone right beside the motorcycle!
My post links to the video: you can watch it and decide what you think.

What else do we know the history of security planning in China concerning Tibet? China successfully quashed rebellions in 1989. Those protests occurred in two locations: Beijing and Lhasa, Tibet. Here's an account of the Lhasa protest of 1989:

In his "Events in Lhasa March 2-10, 1989", the Chinese journalist Tang Daxian revealed how the CCP orchestrated violence as part of a plan to suppress the 1989 protests in Tibet.

According to the article, "On the dawn of March 5, the Armed Police in Tibet received the action order from the Chief Commander of Armed Police headquarter, Mr. Li Lianxiu.…The Special Squad should immediately assign 300 members to be disguised as ordinary citizens and Tibetan monks, entering the Eight-Corner Street and other riot spots in Lhasa, to support plain-clothes police to complete the task.

"Burn the Scripture Pagoda at the northeast of Dazhao Temple. Smash the rice store in the business district, incite citizens to rob rice and food, attack the Tibet-Gansu Trading Company. Encourage people to rob store products, but, only at the permitted locations."

President Hu Jintao was Party Chief of the Tibet Autonomous Region at the time.

A foreign traveler who goes by the name of Kadfly was staying in Lhasa, Tibet at the time of the crackdown. As it happened, Kadfly was the only Westerner to "live-blog" the protests and crackdown. As there was only one Western journalist in Tibet at the time of the uprising, Kadfly's own efforts to chronicle the events of March 2008 on his blog are likely to be of lasting significance.***

I recently emailed Kadfly with a question. I asked Kadfly: "Did you happen to see any evidence piles of stones or bricks might have been put out to encourage stone-throwing?"

I thought Kadfly's reply was interesting. He wrote:
My friend and I did see a crate of stones on Beijing Street where people got their "ammo" to throw at the riot police. Not sure how it got there. I heard speculation at the hotel that night that a truck had driven by, dropped off the crate, and sped off. This was all before I got there though, so I definitely did not see this.
Conclusion
In Burma soldiers put bricks where protesters were expected to assemble -- an encouragement to violence. By contrast, we have been told that the Tibetan protesters in Lhasa went berserk. Were the Tibetan people prone to violence, whereas Burmese people are more peaceful? Or might the real difference here have concerned the regimes? We know Beijing to be more sophisticated than Myanmar. Might the protests have become violent quickly in Tibet because China planned for them to become so -- not just by dumping stones as in Burma -- but also by supplying rioters? A blog post examining this question from various angles -- including input from Kadfly-- is presented here.

In the aftermath of the unrest in Tibet, China masterfully turned a regional protest movement to its own advantage. This much seems increasingly evident: fires, looting and murders in Tibet have given Beijing an excuse to sweep away anti-Party elements lurking in the attic, launch its own War on Terror, and discredit competing news sources.

*****

Since I wrote those words, Cyclone Nagris wreaked havoc on the Irrawaddy Delta of Burma, earthquakes destroyed a region of South-Western China, the Burmese marked the twentieth anniversary of the 1988 massacre of protesters, Beijing successfully hosted the Olympic Games, and now the long-suffering people of Burma are marking the anniversary of the crackdown last year.

Where and when will piles of bricks or stones next appear?
___
*Portions of the following post were posted here on April 4, 2008. I have re-posted the original material along with new testimony from an eyewitness to the Lhasa uprising.
** The best place to view these references is here.
*** The updated portion of the post in which the new evidence is presented begins with this paragraph, continuing to the end of the section.

Caffeine content of energy drinks

If you are interested, the post has been moved here.

Saturday, September 27, 2008

The anger of McCain

The anger of Achilles and its devastation
Wrought pain thousand-fold upon the Achaeans.

- Homer

Why did John McCain not once make eye contact with Barack Obama during the debate last night? The answer, blogs Josh Marshall, may concern the role of anger in the life of John McCain.

Paul Newman, global citizen

Why not, really, go to the fullest length, and the silliest length, in exploiting yourself and turn the proceeds back to the community?

- Paul Newman


The embarrassing thing is that the salad dressing is out-grossing my films.


In search of Sarah Palin's leadership qualities

The American blogosphere is buzzing about the horror that is Sarah Palin as revealed in the Couric interview. James Fallows presents one of the best analysis I have read of that dismal performance. And Fallows is frank and sweeping about what he thinks it tells us about the candidate. In his long career as a journalist, he claims to have met only three other politicians so empty-headed. Fallows highlights a passage that is scary partly because it echoes other spooky things she has said:
COURIC: If this [Wall Street bailout plan] doesn't pass, do you think there's a risk of another Great Depression?

PALIN: Unfortunately, that is the road that America may find itself on. Not necessarily this as it's been proposed has to pass or we're going to find ourselves in another Great Depression.
James Fallows blogs:
There is no sign, listening to Palin, that she has any idea of what another world depression might mean, how loaded a term "another Great Depression" is, how this relates to what John McCain or her Republican party is saying and doing, or anything else involving public finance.

I submit: no one could have read a novel (Grapes of Wrath), seen a movie (Cinderella Man, to choose an easy one; or Annie, or Of Mice and Men or Bonnie and Clyde or All the Kings Men or They Shoot Horses Don't They), or read any history book about the Great Depression and have said these things. Implication: Sarah Palin has never seen or read, or never absorbed, any such material.
Fallows goes on to note that Palin is most certainly not the intellectual equal of President Bush. "George W. Bush is in a completely different and superior league to what we've seen from Palin."

Fallows' comments reminded me of what had struck me most about Palin's response to the "Great Depression" question. That is, I was shocked by how similar in expression her answer was to a question asked of her by Charlie Gibson of ABC:
GIBSON: And under the NATO treaty, wouldn't we then have to go to war if Russia went into Georgia?

PALIN: Perhaps so. I mean, that is the agreement when you are a NATO ally, is if another country is attacked, you're going to be expected to be called upon and help.
It is almost as if Sarah Palin might have no more knowledge of the era known as the "Cold War" -- during which time Russia acquired its nuclear arsenal -- than she evidently has about the complexities of the "Great Depression" period. From what we have seen, it is fair to say that Sarah Palin most likely lacks the ability to put major contemporary world historical events into any kind of larger context -- except perhaps, a pseudo-Biblical one.

Needless to say, such a person lacks a leadership quality indispensable to any American vice-president.

Why Obama lost the debate with McCain

I jotted out the following during the last ten minutes of the debate:

McCain has far exceeded my own expectations for his performance in this debate. He sounded remarkably convincing and knowledgeable. Except for when the topic was the economy, my mind more often wandered while Obama spoke. It was as if I did not feel I would miss anything by not paying too close attention to Obama's thoughts about foreign policy. Obama seemed to agree with McCain about a lot of things.

Surprisingly, I actually thought McCain's statements about Pakistan and Afghanistan were reassuring. I disagree with McCain about staying in Iraq. I disagree with McCain's stance concerning Iran. But I'm not convinced we need an escalation in Afghanistan -- something Obama seems to want. I thought McCain's retort that Obama has not spent enough time in Northwest Pakistan and Afghanistan was strong.

Obama may have made a major mistake by (retroactively) adopting -- verbatim --- McCain's position on Russia. Obama has made it clear to everyone tonight that he supports McCain's belligerent stance vis a vis Russia. Obama backs the provocative Western plan to invite Georgia and Ukraine into NATO. Although arguably it is an important position he would want to maintain as a bargaining chip. Maybe Obama is just realistic; he assumes he does not have the credibility to shift the neocon-directed foreign policy concensus during a campaign. (Note: I blogged about NATO expansion here and here).

Having said that, I'm more convinced than ever that McCain is scary; that the McCain-Palin ticket must not be elected to the presidency. Towards the end of the debate McCain raised the specter of Russian aggression in the Crimea (I recently blogged about this prospect here). McCain's defiant stance regarding the Crimea is more frightening to me than his policy on Iran. Why? Because Russia has a very strong claim to the Crimea. I think if McCain wins -- a prospect which increased tonight -- relations among major global powers could well turn as erratic -- therefore tense and nerve-racking -- as this crazy election campaign.

Obama came across better in the earlier part of the debate which concerned the financial crisis, yet stopped short of delivering a knockout blow on that front. It looks like Obama will have to win this election on the economy.

Policeman grabs camera, threatens to jail blogger

I blogged about the thuggish behavior of police in Minnesota during the Republican National Convention. I blogged about the arrest of journalists, lawyers, bloggers, photographers, and non-violent demonstrators at those events. Nevertheless, until today, I did not myself realize quite how easy it is get arrested if you are in the vicinity of a protest in the United States in 2008.

I was busy photographing American citizens protesting the bail-out of greedy Wall Street firms outside the White House on Thursday. That was when a policeman marched up to me, grabbed for my camera, and threatened to throw me in jail.

A section of Pennsylvania Avenue had been blocked off to anyone without a pass. I stood near the demonstration behind a police line located about one hundred meters from the gates to the White House. As I was trying to take a picture of some Code Pink protesters, a bag I was carrying happened to touch the yellow police ribbon.

Watch what happened:

Why the Wall Street bailout plan is wrong

Is the Wall Street bailout plan a good idea? To answer this question it would be useful to get an international perspective on the problem.

Fortunately, Russian Jotman reader Sanjuro -- who has a lot of international business experience -- has surveyed some of the relevant literature and shares his findings. Sanjuro writes in an email:
A number of facts suggest to me that the the present bailout plan is wrong-headed. One comparison that is increasingly mentioned in business publications is the famous "lost decade" of Japan. Although the business establishment argues that the combined effect of the Japan's bailout of "zombie" banks was rather positive, many have argued otherwise; it's still a complicated issue, but there sound arguments suggest that the bail out doesn't maximize the value for everyone. Some articles to check out include:
Researching the question, here are the two main arguments against the bailout that I could find:

1) It is innefficient. Patrick Honohan and Daniela Klingebiel wrote a detailed study for the World Bank (2002) covering over a hundred (!) system-wide bank crises and regulatory responses to them:
  • 'If the countries in our sample had not pursued any such [supportive or bail-out] policies, fiscal costs [borne in the end by the tax payer] would have averaged about 1% of GDP – little more than one-tenth of what was actually spent." (MoneyWeek)
It was mentioned in the yesterday's version of the electronic Economist that the proposed $700 bln bailout would greatly benefit the moguls like GoldmanSachs. The article was titled "And then there were none". There was a cartoon showing a US dollar bill with "In Goldman Sachs We Trust" and the language in the article was "We heard rumours before that Goldman Sachs is ruling America. Now we know it does." I checked the same article today - that language and the cartoon are gone.

2) It is unfair … That man from the Catholics United that you interviewed may not be an economist, but perhaps instinctively he mentioned one crucial thing: "dollar for dollar". He meant that for a dollar of additional investment, the companies must return to the public a dollar of their value in stock without any discount. That's only fair, but that's not what the US government is aiming to do:
  • "banks who sell their debts to the Treasury would receive cash equivalent to something like twice the value in their books of these poisonous assets," … "It would represent a massive injection of new capital into the US banking system - for which taxpayers would receive nothing in return, except for the assurances from Mr Paulson and Chairman Bernanke that their banking system would not collapse." (BBC Business)
With "dollar for dollar" principle there's one more implication. An economist friend told me that when measuring net social benefits and efficiency of economic solutions to problems, we should: "treat all individuals as equal in our measure, so that one dollar to a poor person is counted the same as one dollar to a rich person. Consequently, if we have pure redistribution within the society, this has no effect on our measure, even if we are taking money from the poorest and giving it to the richest". That's a direct quote from my economist friend. It's one of the crucial conditions to achieve the Pareto equilibrium. Of course, this is just a pure economic model, and reality may be different. Still, the amount of distortion with the current bailout plan seems to be high.

And of course, the moral issue here intensified by sending the wrong message to large financial institutions that they are sort of immune in their gambling, implying that if they win, they win, and if they lose, someone else gets to pay the bill... The Japanese regulators bailed out their banks in 1996, and what was the risk management lesson? Japanese banks had the largest exposure to the Lehman's fallout: Aozora, Shinsei, Mizuho...

To sum it up… I believe it is delusion to think the bailout will save the economy as a whole. Some larger players, closer to policymakers, will benefit, and the rest will take battering… I even suspect the $700 bln do not exist simply because nobody produced any additional effort to make this money. What Paulson et al are trying to do is called printing money and taxing average person - practice common among governments worldwide, except the US govt. is also able to tax people overseas.*
* I assume Sanjuro is referring not to taxation of US citizens living abroad, but the taxation-by-another-name of foreigners everywhere that happens simply because 1) the US dollar remains the world's reserve currency; and 2) this means that foreigners holding a lot of savings in dollars "pay" when more US dollars need to be printed and the currency suffers a loss in value.

Photo credit: Jotman. Shows a spokesperson for Catholics United whom I interviewed Thursday. He was protesting the Wall Street bailout plan.

Friday, September 26, 2008

Massacres of Christians and minorities in India politically motivated

Is the secular fabric of India coming apart?

As of three weeks ago, Christians and minorities have been targeted in India. Fifty-six Christians have been murdered. Other minorities -- particularly Hindu Pundits -- have been been raped or killed for political reasons.

When a requests by Indian Christians to meet with visiting Prime Minister Singh was rejected by the Indian embassy, the Reverend Dr. Bernard Malik organized a protest outside the White House.

The protest coincided with a meeting between Indian Prime Minister Singh and President Bush inside the White House. Between fifty and one hundred people -- most of Indian ancestry -- stood in the rain, holding signs.

Due to security measures around the White House -- a portion of Pennsylvania Avenue had been closed to the public -- these demonstrators were not able to protest within view of the visiting Indian prime minister.

However, hundreds of representatives of the press enjoyed privileged access to the restricted portion of the street. Few if any of these reporters walked over to speak with this relatively large assembly of protesters.

Here's what Rev. Malik had to say about recent attacks against Christians and minorities in India:



Photo and video:
Jotman

Live-blogging "day of chaos" in Washington DC

"Talks Implode During Day of Chaos; Fate of Bailout Plan Remains Unresolved" reads the headline story in Friday's New York Times.

Jotman was there.

I was outside the White House talking to angry American citizens as Obama, McCain, and Congressional leaders failed to agree on a rescue plan for the economy.

Here are some pictures I took of citizens protesting their government's plan to bail out Wall Street banks to the tune of $US 700 billion.












Photos: Jotman

Obama meeting with McCain, Bush, and Congressional leaders in DC

I took this photo of Sentator Obama. He is leaving the White House parking lot following a meeting with George Bush, McCain and Congressional leaders.

The meeting broke up after Congressional Republicans sprung an alternative proposal on the White House meeting. Paulson did not think it made any sense. The meeting ended with no agreement in sight.



The second photo shows Obama supporters wild with excitement as Obama's limosine departs the Mayflower Hotel. Following the White House meeting, Obama held a press conference there.

US civil society groups oppose Wall Street bail out plan

I interviewed an articulate spokesman for Catholics United at the White House on Wednesday. He says US Catholics share his outrage about the plan to bail out Wall Street banks.

Thai PM Samak: 2 year prison sentence upheld by appeals court

Thailand's previous prime minister is having a bad run of luck. Earlier this month he lost his job as PM because state prosecutors convinced a court that Samak had accepted payment for several guest appearances on a cooking television show. The Financial Times reports:
On Thursday the appeal judges said they had found no reason to overturn a lower court decision that convicted Mr Samak of defaming the deputy governor of Bangkok in another television appearance, this time on a political talk show he hosted in January 2006.
Thailand has criminal liability for civil cases. In Western countries you cannot be sentenced to jail for losing a civil law case. Rather, the losing party of a civil case pays damages to the offended party.

At least in this respect, the Thai legal system is a disgrace. Poor Samak.

Rangoon bombing

On Thursday a bomb went off in downtown Rangoon. The bombing occurred on the day before the first anniversary of the 2007 crackdown on the monks and citizen protesters of Burma. The army is apparently clamping down on the city. The Irrawaddy reports on speculation that the bombing may have been orchestrated by the regime to justify a major clampdown Friday.

Over the next several days, this blog will commemorate the demonstrations of September 2007.

Citizen Paula takes on the White House

While Pres. George Bush, Sen. Obama, and Sen. McCain met inside the White House, I spoke with citizen Paula. Paula, born and raised in Washington D.C., did not appear to be a part of any protest group. At first I thought she might be tourist.

"No, I came here to protest" she said.

"By yourself?"

"Yes. Just me."

Listen to how Paula makes sense of the big economic questions confronting the men meeting in the building behind her. The first 30 seconds of the interview is absolutely worth hearing:

Who is to blame for the financial crisis?

UPDATE: More recent posts concerning this question on the US financial crisis here.

An American Jotman reader writes in an email:
I'm forty-something mom. I've been reading your blog with great interest. I am honestly trying to figure out how you think. You seem to be sincere in your beliefs and not just full of hateful rhetoric like some of the other bloggers. There are way too many democrats for you all to be wrong so I'm trying to be open minded and understand at least some of your views. Please don't think I'm being sarcastic or trying to trick you or anything; I'm truly trying to understand.

So, here's what I want to hear from you about. It is my understanding that the democrats in congress pressured the lenders to give loans to clients with questionable credit during the Clinton administration. While the motivation was pure, putting low income families into homes of their own, the practice was flawed. Mr. Greenspan even said that trouble was ahead if these lending practices continued and yet more and more loans were made. Then, these loans were packaged and re-packaged, sold and re-sold. Since these mortgages were worthless, the companies that now own them are in deep financial trouble. My understanding is that the very people that are working on the bail-out are the people that profited most from the fannie mae/freddie mac business. So now I want to know how you see it from your side of the fence.
First, just to clarify, I am not a member of any political party or association, whether in the US or elsewhere. If you go back, you will find some instances on this blog where I have commended McCain relative to Obama (i.e. McCain's history of opposing to biofuel/ethanol subsidies).

But on the major issues of our times, I cannot possibly support the Republicans. I believe McCain and the Republican Party have had ample opportunity to put the United States on a solid financial and economic footing. I believe that the results speak for themselves.

If -- as Republicans make a point to emphasize -- the roots of the present crisis go back to the Clinton Administration, then why have the Republicans not fixed the problem in the meantime? This is 2008. Bill Clinton is not running for the presidency in 2008, and Obama was not a US senator in the 1990s. On the other hand, John McCain was a member of the US senate during the Clinton Administration -- and up until last week -- McCain was a very strong advocate of market deregulation. Recall that Bill Clinton choose to work closely with the Republican-led Congresses of the 1990s, and a number of Congressional Democrats followed the lead of the Republican majorities in Congress.

As forty-something mom points out, the Wall Street banks got the economy into dire straights because of deregulation. Deregulation -- which has been a policy objective of the Bush Administration and the Republican Party -- has allowed the banks to re-package and sell home mortgages -- along with other fancy financial packages. Banks have lobbied Congress and the White House to further deregulate Wall Street. The White House appears -- in some instances -- to have responded by not enforcing the laws already on the books (see this post). The Wall Street lobby persuaded President Bush and other Republicans to campaign that Social Security retirement savings ought be invested in the stock market. They also pushed a bill through congress that made it difficult for individual Americans now burdened by high medical bills and higher mortgage payments to claim bankruptcy protection in the courts.

Although the Democratic Party is not blameless, the Republicans who have been running the country for quite a long time now have closely followed an agenda set by Wall Street. Moreover, these "friends of Wall Street" are the very people advising John McCain today. Even though McCain once fashioned himself as a "maverick," he continues to depend for advice advice from the very individuals who pushed for the deregulation of Wall Street.

Enough about the politics. What about the plan? Sanjuro, a Jotman reader with plenty of international business experience, has examined the proposed solution to the financial crisis. Check out "Why the Wall Street bailout is wrong"

Thursday, September 25, 2008

Ruslan Yamadayev assassinated

Russian Jotman reader Sanjuro informs us of yet another assassination of a political figure within the Russian Federation:

Ruslan Yamadayev, a former Chechen warlord, an ex-member of the Russian parliament and long-standing foe of Ramzan Kadyrov, incumbent President of Chechnya, and a brother of Sulim Yamadayev, another former warlord and recently discharged commander of the Russian Special Forces battalion "Vostok" was professionally assassinated yesterday in Moscow, allegedly immediately before or after a meeting with President Medvedev.


Yamadayev brothers are one of the most prominent (and armed) centers of opposition to Mr. Kadyrov in Chechnya. His brother Sulim Yamadayev's battalion "Vostok" had a prominent role in assisting fast advance of the Russian forces during the recent conflict with Georgia. Shortly after the Georgia affair, Mr. Sulim Yamadayev was relieved from the commander's position.


Russian sources (Kommersant, Gazeta) report that Ruslan Yamadayev feared assassination and as usually very careful, only driving armoured cars and taking all other precautions. The killer was following his armoured Mercedes-Benz on an Audi and fired a series of shots from a submachine gun when Mr. Yamadayev opened his window. The Kommersant commented that the likely target was his brother Sulim (brothers often used the same vehicles). The assassination happened in a tightly patrolled and CCTVed area near the Russian parliament, foreign embassies and other high-profile locations.


According to the Kommersant, assassinations on Kadyrov's foes began earlier, on Sept 17, when there was an attempted murder of Bislan Elimkhanov, another Chechen commander, who was wounded and is now recovering in hospital.


Sources: Kommersant (Russian); Gazenta (Russian); Sulim Yamadayev; Ruslan Yamadayev

You can read more of Sanjuro's recent letters concerning recent events in Russia here.

Global electoral college

Check out this interactive map at the Economist called the "Global Electoral College". Almost every country on the map is "strong Obama." Thailand -- which I blog a lot about -- is 97% for Obama. Several other countries, such as France (90% Obama) and Canada (87% Obama) are not far behind. At this hour, only Slovakia (52% Obama) remains hotly contested.

Hat-tip Kadfly

Wednesday, September 24, 2008

Transparency International's corruption survey of Thailand

UPDATED

Imagine if countries were mangoes. A fly landing on a the surface of a mango might say it looks clean and fresh. But from the perspective of the larvae living inside the mango, the fruit might look very rotten. Is the word's leading corruption survey weighted too heavily toward the fly's perspective?

"Thailand became more corrupt under Thaksin" is a common assertion made by residents of Bangkok. Yet the Transparency International data do not support this hypothesis. That doesn't mean it didn't happen, but the figures we have don't show that it did.*

The Transparency International website says "It is a composite index, a poll of polls, drawing on corruption-related data from expert and business surveys carried out by a variety of independent and reputable institutions." It's a meta-analysis. In some years, some surveys are used (for some countries) for other years and countries, other surveys.

Many if not all of the surveys included such as PERC, MIG, WEF (see here for the complete list) seem to rely heavily on perceptions of non-citizens in the countries concerned. A World Bank Survey is included. It polls "teams, experts inside and outside the bank." That's very much an outside-in perspective. The same goes for the EIE (Economist Intelligent Unit) measure -- which is described as a survey of experts. Not surprisingly, several of the composite surveys are very highly correlated.

I have nothing against surveying experts, expats, multinationals executives, NGOs, etc. Yet, many composite surveys that make up the Transparency International corruption index appear to present not differing perspectives, but a variety of snapshots from a similar perspective. We might call that common view "outside-in".

However, one survey, Transparency International's Global Corruption Barometer -- which started in 2003 and surveys actual residents of the countries -- sounds to me like a much-needed complementary approach to measuring the problem of corruption; it would appear to offer a true "inside-in" perspective. Yet, this survey is not included in the TI world corruption index.

The apparent outside-in bias of many of Transparency International's composite surveys could mean that a country that is opening up to international business, investor friendly, globalizing, etc.,** would achieve increasingly favorable corruption survey results from experts, expats, NGOs, multinational business leaders. Yet, such factors contributing to a positive outside-in perspective on corruption may differ considerably from the factors that would be most salient to local citizens had they been polled about corruption.
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* See a related discussion on Bangkok Pundit's blog and my previous post.

** A fair description of Thailand under Thaksin? Did Thaksin create a perception among opinion leaders surveyed that Thailand was globalizing to a far greater extent than under previous prime ministers? The answer to this question is important. Because what I'm really asking here is whether the various corruption surveys of experts, multinational businesspeople, and so on, do not amount-- to a large extent -- to poll about how successfully a country appears to be globalizing from the perspective of an elite group, most of whom are outsiders to various local communities. Perhaps a future Transparency International index might find a way to control for this possibility. We need to be sure such surveys are mainly measuring a country's "corruption" and not it's "openness to globalization." Much preferable, to a statistical control, of course, would be to survey citizens at different strata of the various countries. What do the locals say about corruption? Particularly in the case of Thailand, it would be interesting to learn whether the perceptions of corruption among rural residents differ from those of urban residents. (Updated Sept. 25)

Corruption trend in Thailand

Bangkok Pundit blogs about the Transparency International report on corruption as it concerns Thailand. Examining the trend in perceptions about corruption over the past decade, BP notes that -- contrary to conventional wisdom -- Thailand was perceived as increasingly less corrupt toward the end of Thaksin's premiership.

The accusation that Thaksin was especially corrupt factors into what public support ther is for the PAD protesters who have put severe strains on the Thai political system and economy since May. PAD's main accusation is that the present government is a proxy for Thaksin (who now lives in exile having dodged a trail date).

UPDATE: See my next post.

Monday, September 22, 2008

Does the US threaten the stability of Pakistan?

This NY Times editorial echoes the urgent concerns which I related in a previous post. The military actions of the Bush Administration may now pose to the stability of Pakistan and the long-term prospects for a Western victory against Islamic terrorism.

Yet the NY Times fails to identify the underlying strategic miscalculation that seems to drive US foreign policy in the region. Blogger Thomas did a better job of explaining this. Thomas quotes from William Darymple's The Last Mughal:
. . . nothing threatens the liberal and moderate aspect of Islam so much as aggressive Western intrusion and interference in the East . . .
This one line delivers what has to be most eloquent and devastating critique of the foreign policy of the Bush Administration.

Has Obama staked out a strong and clear policy position concerning the financial crisis?

I think that will be the question of the week. In fact, I think the answer could well decide the election. For the sake of the world economy, I think Obama must make a convincing argument that no bail-out plan that allows for a return to business-as-usual on Wall Street is acceptable. In my opinion, Obama needs to make a persuasive argument that tough new financial-industry regulations must accompany congressional approval of any rescue plan. He must fight for this. Bare minimum.

How do you think Obama is doing in relation to this question? Take the poll.

Bush intervention in the US financial crisis

Interesting how the Bush Admin knew that without an instantaneous and massive bailout the whole US financial system would simply collapse. Yet what I saw was no more than a 10% drop in the stock market -- about 1000 points on a Dow up around 12,000. Lehman went bankrupt, Merrill Lynch got bought, AIG faltered. Supposedly many giant financial institutions were poised to fail, but who knows? How could the government really have know what was about to happen? After all, the one fact behind the whole housing crisis -- the one everyone seemed to agree on -- was that nobody seems to have had a clue where all the bad loans were being kept.

Americans are told that the consequences of inaction would have been dire. Other countries have even been advised to follow America's lead, shoring up their financial institutions with taxpayer money. As for the perils of such action? Later.

Here's the draft bailout proposal. Question: Why is it assumed to be so much better for the government to solve the housing crisis from the lender rather than the borrower side? We all have questions. And eight years' acquaintance with the Decider.

Sunday, September 21, 2008

Malaysia not a viable place to invest?

A Malaysian newspaper claims that the country's reputation as a sound place to invest has crumbled in recent months. That's calling the glass half empty. The political fortunes of the country's most magnificent leader in a generation, Anwar Ibrahim, have been on the rise.

The Malaysia Star laments:
It's been six months since the March 8 general election but the perception is that many Malaysians just do not know how to stop politicking, to the point that we are in danger of becoming a political basket case. . . .

The endless, if not mindless, politicking has dented our image abroad as Malaysia is no longer seen as a place for serious investment.
This kind of nay-saying coming out of Malaysia sounds a lot like what you read in the papers of Thailand -- Malaysia's neighbor to the north -- these days. Thais have also exhibited a tendency to see the glass as half empty. Nevertheless, in Thailand, an economically responsive, democratically elected government remains in power. Things are not nearly so bad as they could otherwise be.

In neither the case of Thailand nor Malaysia is the situation anywhere near as dire as some journalists made things out to be. With the economic crisis in the United States as yet unresolved, there are riskier places to invest than either Thailand or Malaysia.

I might add one other point. In Malaysia the mainstream media does not have an enviable record of having defended the values of democracy in the past. Recently, the Thai media has fared no better in this respect. Nevertheless, the underlying momentum in both countries is toward making politicians accountable for how they govern. This may not sit well with entrenched elites -- whether in the media or elsewhere -- but the indications that these nations are progressing are hard to miss if only you look for them.

Solution to US financial crisis

Suspicious. That's my world for it. Some big firms teetered, one collapsed. The Dow fell by about 10%. Suddenly, Uncle Sam pulled out his pen, and declared that he would write the banks a check to cover most of their bad debt. The markets bounced back. We are told that a financial meltdown had been underway.

Surely a remedy that easy and (seemingly) painless cannot be good for the country.

UPDATE: Krugman says no deal.

Torture the least of APA's problems

Today, the membership of the American Psychological Association (APA) passed a referendum banning participation of APA member psychologists in U.S. detention facilities, such as Guantanamo or the CIA’s secret “black sites” operating outside of or in violation of international law or the Constitution. . . . The referendum passed with 8,792 [58.8% ] YES votes to 6,157 votes against. The turnout was the highest ever in APA history.

- Coalition for an Ethical Psychology, press release*
Although this is a positive development, because the decision is so long overdue and the offense so despicable, APA members do not deserve our applause. Jotman does not congratulate professionals when they vote to obey the law.

Furthermore, torture is the least of APA's problems.

To paraphrase a former APA president: American psychology long ago sold its soul to the psychiatrists. Since the early 70s, the research paradigm of US psychology has been based on the "pharmaceutical model" of drug research. That means that for every problem, the researcher goes off in search of a silver bullet. Today the APA is but one outpost of the American pharmaceutical industry.

The fact that millions of Americans turn to pharmaceuticals to address mental health issues has an interesting analogue. That is, the country's predominantly military approach to foreign relations; I'm talking about the propensity of US leaders such as John McCain to view war as a "neat solution" to international problems.**

Just as mental health in the US is mainly the domain not of therapists, but drug-prescribing psychiatrists, similarly, the health of the international system is increasingly determined not by US diplomats, but generals reporting to the Pentagon. Both psychiatrists and generals offer silver bullets. Which makes the majority of US psychologists -- at least those not helping the CIA to torture people -- a lot like their peers in the State Department. They are left out in the cold. As goes psychology, so goes diplomacy. Got a problem? Fire away!
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* hat-tip Soldz via 10%
** See The Wars of John McCain in the Sept. Atlantic Monthly.
Note: Time Magazine reported recently: "Data contained in the Army's fifth Mental Health Advisory Team report indicate that, according to an anonymous survey of U.S. troops taken last fall, about 12% of combat troops in Iraq and 17% of those in Afghanistan are taking prescription antidepressants or sleeping pills to help them cope." I suspect those percentages increase significantly once the soldiers have returned to settle down in the US.

Saturday, September 20, 2008

Marriott in Pakistan bombed

In Islamabad the heavily-guarded Marriot hotel was bombed Saturday. The NY Times describes "A vast crater, some 40 feet wide and 5 feet deep, lay at the security barrier to the hotel." The same hotel was previously bombed in January 2007.

Also concerning Pakistan
Thomas, the South Asian specialist at Global Moderation has an important blog post entitled "America's ill-advised new Pakistan policy." It seems that the Bush administration may now be determined to get Bin Laden at almost any cost -- even if this means jeopardizing the West's long-term interests in the region. American forces are going in heavy and causing much collateral damage in Northern Pakistan. The administration's goal may be to be to kill Bin Laden just prior to the November US election.

Even if the intention sounds good, as Thomas observes, "the American forces seem to lack the intelligence necessary for successful strikes within Pakistan." Whether the US can bomb its way to any kind of meaningful strategic advantage is a very doubtful to say the least.

Of course, Obama more or less gave the White House a carte blanche to take this kind of action when -- attempting to look strong in relation to Hillary Clinton during the Democratic Party primaries -- he said that he would not hesitate to hunt down the terrorists inside Pakistan.

Thailand to be goverened from airport VIP lounge

This story in the Bangkok Post does not sound like it could possibly be true. The new prime minister of Thailand will govern the country from the VIP lounge of an airport.

Somchai, the new Thai prime minister, has set up an office inside Bangkok's old international airport Don Mueang. He says it's temporary, but the protesters occupying the grounds Government House are in no hurry to move. And neither the army nor the police seem to have the authority to move them.

Anybody seen Ban Ki-moon?

There have only been eight of them -- UN Secretary Generals, that is. CFR has posted a timeline of UN Secretary Generals which includes brief biographies of all the men who have held the top job in the world body. It's clear from his bio that the present Sec-Gen is not to be counted among the high-achievers at the post.

In the wake of the Burma cyclone aid fiasco, a retired senior UN diplomat told me he thought Ban Ki-moon -- who has held the job since 2007 -- had "six months to a year" to convince people that he was really up to the task. He said the clock was running out on Ban Ki-moon.

Global citizenship quote

. . . the good man has nothing which is properly his own, no, not even himself, but he has a share granted to him of the treasures of God as far as he is able to partake of them. And this is natural enough; for he is a citizen of the world; on which account he is not spoken of as to be enrolled as a citizen of any particular city in the habitable world, since he very appropriately has for his inheritance not a portion of a district, but the whole world.

Friday, September 19, 2008

Sarah Palin: an email from Siberia

. . . remember, Alaska is the closest part of our continent to Russia. It’s not as if she doesn’t understand what’s at stake here.
- Cindy McCain

They’re our next door neighbors. And you can actually see Russia from land here in Alaska.
- Sarah Palin

Alaska is right next to Russia, she understands that. (Obama) has no experience on these issues.
- John McCain

I know Russia is right next to Russia as well. I saw it on a map.
- Barack Obama
Cindy McCain, John McCain, Palin herself, and other Republicans have suggested the proximity of Alaska to Russia boosts Palin's foreign policy credentials.

The real question ought to be: Did the Alaska governor make the effort to pay a courtesy call to neighboring Russia? And why not?

A Siberian Jotman reader writes:
There is a rather regular air transport between Anchorage and Magadan. There are also occasional small aircraft charters shuttling between Nome and Anadyr (in Chukotka) and (rarely) between Nome and some mine towns in Chukotka and Magadan Oblast. In any case, border control requirements dictate obligatory stops in Anadyr or Magadan. These charter flights are typically arranged for the mining companies operating in the area (e.g. Highland Gold, Kinross Gold etc.), but am sure if the Governor of Alaska had a desire to visit her Russian colleague and play soccer (or hockey) with the Chelsea FC owner, she would most definitely get a seat.
Alaska borders Canada. Did Palin pay a visit to the leaders of nearby Canadian provinces? On Palin's one and only visit to Canada -- in June 2007 -- she visited Whitehorse (population 22,000), which is the capital of the Yukon territory. Sarah Palin did not visit British Columbia -- the relatively populous province which also borders Alaska.
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Map shows Russian Far East.

Myanmar Cyberatttacks: Irrawaddy and DVB websites shut down

Two leading dissident websites the Irrawaddy (out of Chang Mai, Thailand) and the Democratic Voice of Burma (out of Norway) have been shut down due to cyberattacks. The Irrawaddy reports (from an alternate site):
Our Web site has been crippled and disabled by DDoS attacks since Wednesday.

. . . Our Web hosting companies have been assisting us day and night tracing IP addresses to identify the cyber criminals.

Exiled media organizations, including The Irrawaddy, believe that foreign agents and cyber criminals have been hired to attack exiled Burmese Web sites.

We have offered our solidarity to fellow media Web sites, including the Democratic Voice of Burma and New Era Journal. They too have been badly crippled by the DDoS attacks.
In other Burma news, the regime is reportedly holding 212 monks in prison, including monk-activist leader U Gambira. The lawyer of Aung San Suu Kyi will shortly be on his way to Naypyidaw to appeal his client's continued detention. After a four-week hunger strike -- which Jotman reported on back in August but the mainstream media generally ignored -- Suu Kyi is now receiving food by way of an intravenous tube.

McCain on Spain

You may recall that back in March -- on two occassions -- McCain got confused about who the US was fighting in Iraq, claiming that Al Quaeda was being trained by Iran. McCain's friend Joe Lieberman had to correct him.

This week an interviewer for a Spanish radio station asked McCain if he intened to meet with Spanish Prime Minister Zapatero. McCain rambled on about US relations with Latin America; it was as if McCain was unaware the entire line of questioning had concerned Spain. TPM has summarized the interview transaction:

After the interviewer presses him a couple times on the point and tries to focus him on the fact that Prime Minister Zapatero isn't from Mexico and isn't a drug lord either McCain comes back at her saying, "All I can tell you is that I have a clear record of working with leaders in the Hemisphere that are friends with us and standing up to those who are not. And that's judged on the basis of the importance of our relationship with Latin America and the entire region."

Then there's a moment of awkward pause before she says. "But what about Europe? I'm talking about the President of Spain."

McCain: "What about me, what?

Interviewer: "Are you willing to meet with him if you're elected president?"

McCain: "I am wiling to meet with any leader who is dedicated to the same principles and philosophy that we are for humans rights, democracy and freedom. And I will stand up to those who do not."

At this point, the interviewer gets tongue-tied presumably because she can't get over McCain not knowing what Spain is.

It seems back in June McCain had told an interviewer he would be happy to meet with Zapatero.
Thursday morning, McCain's creepy foreign policy advisor Randy Sheunemann issued a statement affirming that McCain had, in fact, understood that the question had concerned Spain: ". . . Senator McCain refused to commit to a White House meeting with President Zapatero in this interview." Of course, this kind of explination is inexplicably insulting to the people of Spain.

What's wrong with Thailand (and the rest of Southeast Asia)

Here is the lede to an article titled "Bargaining Time" published in Friday's Bangkok Post:

Behind-the-scenes lobbying for lucrative ministerial posts has begun in earnest as Somchai Wongsawat awaits royal endorsement as the country's leader.
Granted, the media of Thailand -- Bangkok Post included -- is notoriously biased against the party of the new prime minister. Nevertheless, the notion that ministerial posts are "lucrative" raises few eyebrows in Southeast Asian capitals. The public understands that ministerial posts tend to be lucrative for the ministers themselves. This is said to have been the case under Thaksin -- although his supporters point out that this was nothing new.

Thursday, September 18, 2008

Tracking Palin's scandals

Today I noticed that MSNBC was highlighting the fact that as mayor, it was Sarah Palin's policy to charge rape victims for rape tests. That's not exactly news.

What I find interesting is that these "breaking news stories" often turn out to be points about Sarah Palin that I had referenced long ago on the timeline. Check out the timeline, not only is it up to date, it is quite simply the world's most comprehensive timeline of scandals involving the VP challenger.

Somchai Wongsawat: Prime Minister of Thailand

Thailand will have new prime minister once the election of Somchai Wongsawat by parliament is ratified by HM the King. Somchai, whom I introduced in the previous post, assumes office with low expectations. This fact could prove an asset toThailand's new leader, as will the perception that Somchai is not associated with any corruption scandals.

Wednesday, September 17, 2008

Thailand comes to a fork in the road

The Straights Times reports:
Thailand heads into a crucial parliamentary session today to choose a new prime minister, with the prospect of failure carrying the cost of a further loss of credibility.

A failure could also lead to a possible House dissolution and snap election less than a year after the last one.

After a long meeting yesterday, however, the People's Power Party (PPP) said it was confident its candidate, Mr Somchai Wongsawat, a former judge and currently the Acting Prime Minister, would win the day in the House.

The PPP is the single-largest party in Parliament and, with its coalition partners, controls 315 out of 480 House seats.

An initial consensus on Mr Somchai was endangered on Monday by a 73-seat faction in the PPP led by north-eastern politician Newin Chidchob.
Probably the most important fact about Somchai is that he is the brother-in-law of former prime-minister Thaksin, who now lives in exile in London. Up until the time Thaksin became prime minister, Somchai spent most of his career as a judge. Throught most of Thaksin's tenure as prime minister, Somchai served the Thaksin government as the top bureaucrat within the ministry of justice. After March of 2006 Somchai began a six-month long stint directing the ministry of labour.

Obviously, the appointment of Somchai as Thai PM would be siezed upon by the notorious PAD protesters as evidence that Thailand's government remains under Thaksin's control.

Meanwhile, expectations are that Thailand will adequately weather the US financial crisis. Only Bangkok Bank appears to have had significant exposure to Lehman. It seems to me that political instability remains the major factor depressing the Thai markets and international investor enthusiasm for the Kingdom, although this article claims turmoil in the US markets will draw money out of Thailand in the medium term. Given the overall decline in the Thai stock market, so far as an investor can stomach the political turmoil, there are no doubt bargains to be had in Thailand for savvy investors.
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Photo shows Somchai Wongsawat. Check out his Wikipedia biography and resume.

Tuesday, September 16, 2008

China's Sanlu milk scandal is New Zealand's disgrace

There is the headline story, and there is the real story which I suspect is much more important and far bigger. Long-term, the latter presents a more serious health threat to more people than the present media-hyped tainted milk scandal.

A partly-owned subsidiary of a New Zealand firm has been caught selling toxin-laden milk to Chinese mothers. New Zealand dairy conglomerate Fonterra is the major majority shareholder in China's Sanlu dairy. It has come to light that Sanlu milk has been contaminated with a resin used in the manufacture of plastics, cleaning fluids, and fertilizers that has sickened over one thousand Chinese babies and killed at least two.

Concerning the scandal, the leader of New Zealand's Alliance Pary has blasted Fonterra management:

Mr Billot says that there are inconsistencies about Fonterra's claim that it asked for a product recall in August 2008.

New Zealand dairy giant Fonterra says it knew in August its Chinese joint venture partner was selling contaminated milk since linked to the death of at least one baby.

He says that as a major shareholder, Fonterra management are responsible and must be held accountable.

"What kind of checks and regulation by Fonterra of their Chinese operations were carried out? I'm sure they checked out how much cash would be in it for them, so why didn't they check the safety of the production facilities?

He says the tragedy exposes the utter hypocrisy and bankruptcy of the clean, green New Zealand brand, as our leading corporate is now implicated in selling poisoned food for infants.

Mr Billot says that under free trade agreements, New Zealand was opening itself up to a future where such incidents were common.

According to a comprehensive timeline of the scandal, New Zealand's embassy in Beijing was first informed of the tainted milk in mid-August.

There's something creepy about the sale of infant milk formulas -- especially when the consumers are mothers in the developing world. I think it's even creepier when the companies pushing the milk products -- marketing them "health foods" -- are based in the West. Do Asian infants have any real dietary need for cow's milk?

The Fonterra subsidiary pushes a product -- infant milk formula -- that may well be as bad as cigarettes for human health when used as a substitute for mother's milk for the youngest infants. Science shows that breastfeeding protects infants from a range of disorders; it seems reasonable to speculate that the antibodies contained in breast milk may be particularly vital helping Chinese infants to cope with China's polluted and disease-outbreak prone environment.

According to the Malyasia Star, "Sanlu dominates in poorer rural areas, where farmer and migrant workers often find milk powder is easier than breast-feeding, and sometimes believe it is also healthier."

The contamination issue aside, by owning a 43 percent stake in Sanlu, Fonterra was already invested in a line of business of questionable ethics.

Monday, September 15, 2008

Black Monday 2008

NOTE: for Black Monday of Sept 29th see here.

Titans of American capitalism are falling. Wall Street developments on Sunday 14 September:
  • Merrill Lynch - sold to Bank of America
  • Lehman Bros - filed for bankruptcy
Firms to watch on Wall Street for 15 September:
  • American International Group (AIG) - seeks $40 billion from Federal Reserve
  • Washington Mutual - believed to be at risk
The NYT reports: "The weekend’s events indicate that top officials at the Federal Reserve and the Treasury are taking a harder line on providing government support of troubled financial institutions." The Fed's harder line stance suggests that investors have every reason to be nervous when the markets open for trading Monday.

So far in Asia Monday, Singapore and Australian markets are down just over 2.2%. Despite the lifting of a state of emergency in Bangkok on Sunday, stocks have fallen in Bangkok. Markets in Tokyo and China are closed due to holidays.

Saturday, September 13, 2008

Will Americans believe anything that scares them?

Not much is said about this. But if the US electorate proves it can be manipulated -- even after eight years of Bush -- into buying more of the same, then the American system will appear even more broken to onlookers than it did in 2004. A McCain-Palin victory would likely have negative repercussions for those fighting for democracy in countries around the world.

Because people seeking democracy abroad have long sought to emulate the US, and if the former exemplar proves itself to be easily manipulated by special interests, then the opponents of democracy will point to this as evidence that democracy is a poor system of government. As I write this I am not just thinking about Beijing and Moscow. I'm thinking about Southeast Asia: the undemocratic exemplar that is Singapore, the mobs on the streets of Bangkok, and long suffering supporters of Aung San Suu Kyi -- both inside Burma and in exile. Moreover, tactics proven effective in this US election will likely be exported abroad, corrupting democratic systems elsewhere. Particularly vulnerable in this respect will be Australia, Canada, and the UK.

Of course, many people will argue this has already happened, and so not much is likely to change. But this time we are witness to an actual campaign that is openly corrosive of democratic values.

Essentially, the campaign of John McCain has degenerated into an effort to use lies, distortions and innuendo to paint his adversary in the worst colors. One recent ad tries to make Obama look like a pervert; another claims Obama called Palin a pig; others contain bold lies such as the fact Palin did not say "thanks, but no thanks" but had strongly supported Alaska's "bridge to nowhere," and that she opposes "earmarks" -- whereas she is most accomplished at getting them. The McCain campaign counts on the media to repeat its campaign propaganda without challenging it. In the end, the smears stick.

I suppose what remains of actual journalists within the ranks of the US news media might decide to rebel and do their jobs. But more and more of US television news is not populated by reporters, but models or professional actors. Many of this relatively new breed don't know what real journalism is. Few seem to care.

This video illustrates the unbelievable depravity of the McCain campaign, and highlights the efforts of a few real journalists to hold McCain accountable to the facts:

Friday, September 12, 2008

She's nuts

Daily News reports on Palin's interview with ABC:
Palin's comments went further than GOP presidential nominee John McCain on the war option if Georgia or Ukraine is invaded by Russia, a nuclear power.
Here are her exact words:
GIBSON: Would you favor putting Georgia and Ukraine in NATO?

PALIN: Ukraine, definitely, yes. Yes, and Georgia.

GIBSON: Because Putin has said he would not tolerate NATO incursion into the Caucasus.

PALIN: Well, you know, the Rose Revolution, the Orange Revolution, those actions have showed us that those democratic nations, I believe, deserve to be in NATO.

Putin thinks otherwise. Obviously, he thinks otherwise, but...

GIBSON: And under the NATO treaty, wouldn't we then have to go to war if Russia went into Georgia?

PALIN: Perhaps so. I mean, that is the agreement when you are a NATO ally, is if another country is attacked, you're going to be expected to be called upon and help.

Here's the video.

Hurricane Ike storm surge

THE CENTER OF IKE WILL BE VERY NEAR THE UPPER-TEXAS COAST BY LATE FRIDAY.

COASTAL STORM SURGE FLOODING OF UP TO 20 FT ABOVE NORMAL TIDE LEVELS...ALONG WITH LARGE AND DANGEROUS BATTERING WAVES...CAN BE EXPECTED NEAR AND TO THE EAST OF WHERE THE CENTER OF IKE MAKES LANDFALL...

National hurricane warning center - Hurricane Ike
Here is an animation of the effect of a 20 ft. storm surge on Galveston, Texas. The town has a population of almost 60,000. The elevation of Galveston is 7 feet (2 meters).