The long rotation for the long war

WORLD NEWS: "U.S. Revamps Afghan Troop Deployments: Pentagon's New System Would Return Units to Same Parts of Country to Develop Expertise, Closer Local Relationships," by Yochi J. Dreazen, Wall Street Journal, 26 March 2010.

AFGHANISTAN | CORRUPTION: "The Gang That Couldn't Shoot Straight: Six Billion Dollars Later, The Afghan National Police Can't Begin To Do Their Jobs Right--Never Mind Relieve American Forces," by T. Christian Miller, Mark Hosenball and Ron Moreau, Newsweek, 29 March 2010.

A solid idea: "a new system that will return units to the same parts of the country so they can develop better regional expertise and closer relationships with local Afghan power brokers."

This address a huge issue: relatively short rotations that mean the person is just getting the hang of everything when they're pulled out and gone forever, just to be replaced by somebody else who must undergo the same learning curve. To locals, this is beyond frustrating.

The move also signals a more serious SysAdmin mentality:

The new system is the latest example of the military's continuing effort to remake itself for the long war in Afghanistan.

McChrystal believes that the military needs to allocate specific units to Afghanistan and keep them persistently dedicated to that theater. Gates is described in the article as strongly backing this philosophy.

All of this is good news, as most reporting on the Afghan police continues to emphasize their sorry state of training and capabilities.

The damaged Papacy

INTERNATIONAL: "Doctrine, not Problem Priests, Preoccupied Benedict as Archbishop," by Katrin Bennhold and Nicholas Kulish, Wall Street Journal, 28 March 2010.

RELIGION: "Save the Children: Benedict & Co. need to do penance," by Lisa Miller, Newsweek, 29 March 2010.

RELIGION | SCANDAL: "The Bad Shepherd: Why Pope Benedict XVI May Not Be Able To Heal His Church," by Lisa Miller, Newsweek, 5 April 2010.

The defense offered on Benedict is an extension of the one offered for John Paul II: the man was more concerned with doctrine than personnel matters. In short, Benedict focused on blocking appointments of theologians who colored outside the lines.

Meanwhile, as Miller points out in her 3/29 piece (and this is my favorite sordid story, as I belonged to this Boston archdiocese during this time period), Cardinal Bernard Law was whisked away to a cushy Vatican admin post to avoid possible prosecution for his monumental role in covering up all the cases under him:

Law presided over the Boston Archdiocese for nearly 20 years. During that time he ignored repeated pleas from the mothers and aunts of abused children, coddled offending priests, and demanded silence from victims until--after the number of cases exceeded 500--he was forced in 2002 to resign his post.

Man, would I ever like to see that scumbag extradited to stand trial.

Miller's larger argument: Benedict may be so damaged as to ruin his papacy. In effect, he becomes the fall guy for JP II's many sins/crimes of omission. Benedict's biographer, George Weigel, says "the present hierarchy has no credibility."

Fine and dandy, but John Paul II must take his historical lumps. Benedict, during the vast bulk of this time period, was just doing what he was told by John Paul II, who still bears the ultimate responsibility for this incredibly dark chapter in Catholic Church history.

Obama's healthcare reform: plenty biz-friendly

POLITICS: "'Socialism,' Chicago Style: Why the health industry quietly loves Obamacare," by Howard Fineman, Newsweek< 5 April 2010.

The socialized medicine line just doesn't pass muster:

There are many things you can call the legislation assembled by President Obama and his band of dogged Democrats. It's historic, if for no other reason that it effectively makes health care for all a civil right. It's massive, to be sure. And the way it was secretly bolted together and jammed through Congress in the final days made a mockery of Obama's campaign promise of "transparency." But the one thing that you can't call it is "socialism." If this is socialism, then Warren Buffett is Karl Marx.

Why so? It is a monument, says Fineman, to Chicago politics, which says "big business deserves to make a lot of money . . . in the name of doing some good for the citizens."

Thus, while the tea party types freak out, the healthcare industry does not.

So, in the end, I guess Obama gave me what I wanted: get the deal done, get the basics right (extend coverage, end the pre-existing conditions tricks, etc.), and do no harm to the industry that has served me and mine well all these years.

Well corrections come? Naturally. And most will be legitimately led
by the not-so-loyal opposition.

The New Core's new appetite

MEDIA & MARKETING: "McDonald's Sets Plan for China," by Esther Fung, Wall Street Journal, 31 March 2010.

STRATEGY & COMPETITION: "A Three-Way Food Fight In Brazil: In Latin America's largest market, Wal-Mart is spending big to overtake Carrefour and a local rival," by Ladka Bauerova, Chris Burritt and Joao Oliveira, Bloomberg BusinessWeek, 5 April 2010.

Mickey D's is doubling its presence in China over the next few years (from just over 1k to 2k). Ten thousand jobs (direct hires only) for locals seen. Just set up its first Hamburger U there.

Income-wise, China is already McD's fastest growing market. The company plans sales growth globally in the 3-5% range, with income in the 7-9% range. China will beat all that, thus establishing itself as the profit-growth leader inside the company.

Similarly, we watch Wal-Mart move into Brazil to take on Carrefour (French) and a local conglomerate. Wal-Mart is currently #3 in the market, but plans on moving up. Why?

As its middle class expands, annual spending on food is expected to rise 50% over the next five years.

That is no misprint. The figure will top $400B by mid-decade. So everyone involved is expanding operations.

Plus, compared to the other BRICs, Brazil offers little to no barriers to entry. Plus, even compared to China, "Brazil is more developed in terms of infrastructure and wealth creation," says a London-based industry analyst.

According to another analyst: If Wal-Mart is serious, it "will inevitably take over the region and become No. 1."

The global middle class wants protection from uncertainty--aka insurance

PRUDENTIAL-AIG DEAL: "Pru eyes regional prize with AIA move: The deal offers huge potential for Asian growth," by Paul J. Davies and Sundeep Tucker, Financial Times, 2 March 2010.

The rise of a middle class in Asia means a huge expansion of the quintessential service it prizes--insurance. So the UK's Prudential is buying up a player (American International Assurance's Asian business) with established market shares.

In China, for example, the acquisition means Prudential goes from 10% of the market to 29%--or #1.

NorKo: the fascist Japan comparison

ASIA: "The mother of all dictatorships: To understand North Korea, look not to Confucius or the Soviet Union, but to fascist 1930s Japan," by Banyan, The Economist, 27 February 2010.

A favorite of serious NorKo watchers, who emphasize the extreme nationalism and the surreal heights of Kim's cult of personality (very parental) and cite the same source: the notion that the NorKos are a unique race "incapable of evil," and that they have been abused historically by a series of evil, would-be parents (Chinese, Japanese, American)--hence the need for the all-powerful father. This is described as "state-sponsored infantilism."

Honestly, I think it's useful to view NorKo in this way but not to emphasize its "uniqueness." The Kims' twist on the evil world theme is a variant (in degree but not kind) of Big Men the world over, but especially Emperor Hirohito in Japan's fascist past, right down to the intense racial hatred of miscegenated Americans (as opposed to the pure-blood NorKos).

The larger point of this truly totalitarian regime (meaning it wants to control just about everything in the lives of its citizenry): it cannot compromise with America because it bases so much of its legitimacy on it.

Sean is gone--as webmaster

Sean Meade stops being my webmaster today. I am sorry to see him go, but understand completely. I am simply not able to pay him what I once did and Sean, since becoming my webmaster and leaving a day job (not a career), has since made webmastering a real career for himself.

Naturally, this is all tied to the economic downturn. When it happened, the speaking industry took a large hit, and that impacted my ability to pay Sean. For a while, I got emergency funding from another source, but the idea was always that I would pick it back up myself.

And while my speaking gigs have picked back up nicely with the slow recovery to date, it's become clear to both Sean and I that it would be a while before I could pay him as I once did. So we part now on good terms and I wish him well in his continued web-focused career.

Sean has been a huge part of this blog and has put me in a great position to soldier on by my lonesome, which I will do.

For now, the only change I see is the end of "Tom around the web."

Everything about this site will now get a bit slower in terms of responsiveness to readers, but I will do my best.

For those sending emails: No, this isn't an April Fool's joke. Unfortunately to me, 1 April remains the day I delivered my dad's eulogy, so I've lost my jokesterism on this day.

Maybe India can teach us about national ID

ARTICLE: Biometric identity project in India aims to provide for poor, end corruption, By Rama Lakshmi, Washington Post, March 28, 2010

The basics:

In this country of 1.2 billion people, Inderjit Chaurasia could not prove his identity.

When the migrant worker tried to open his first bank account in New Delhi, he was turned away because he had only a driver's license for identification. Then he applied for a government food-subsidy card but was rejected for the same reason.

"Everywhere I go, they ask me for proof of residence and income tax that I do not have," said Chaurasia, 32, adding that he has never voted or paid taxes. "We are migrant workers. We go where the job takes us. Where do we find identity papers?"

Millions of Indians like Chaurasia are unable to tap into government and financial services because they lack proper identification. And, many here say that corrupt officials routinely stuff welfare databases with fake names and steal money meant for the poor.

But a mammoth project underway aims to address that problem by assigning all Indians a unique identity number backed by their biometric details and storing that information in a gigantic online database. The government says the new system -- which its creator calls a "turbocharged version" of the Social Security number -- will cut fraud and ensure that people who need assistance can get it.

Like China, India has a huge migrant worker population. This program represents a good-faith effort to better connect those people to government services.

Bears watching. We may learn a thing or two here.

Connections out of North Korea

ARTICLE: North Koreans Use Cellphones to Bare Secrets,
By CHOE SANG-HUN, New York Times, March 28, 2010

Connectivity to the rescue!

Another good sign on Kim's weakening totalitarian grip over his people.

China's heavy hand may cost them

ARTICLE: Chinese Court Hands Down Stiff Sentences to Four Mining Company Employees, By DAVID BARBOZA, New York Times, March 29, 2010

The best point to remember on these stiff sentences and the case in general:

"Even after the trial, we do not know most of the facts," said Jerome A. Cohen, a professor at New York University and an expert in China's legal system. "It does seem clear, however, that the prosecution was related to the iron ore negotiations."

And China's biz climate takes another drastic hit--but by design.

All this my-way-or-the-highway stuff is going to make it harder for China to keep hitting its magic 8% growth per year--to India's benefit.

Forget the middle class, China's migrants are getting uppity

WORLD NEWS: "Migrant workers rail at 'invisible fetters' of command economy," by Jamil Anderlini, Financial Times, 2 March 2010.

COMMENT: "China mismanages its rural exodus," by David Pilling, Financial Times, 11 March 2010.

Just about everybody agrees that the creaky Chinese household registration system known as hukou needs to go. It gives off the feeling of income-based apartheid. It was put in place in the 1950s to stop internal migrations, but nowadays the notion that you should be forever tethered to your birthplace is ludicrous and anti-market: people gotta go where the work is.

The system also encourages beau coup corruption.

The word is, recently co-published editorials are signaling that the Party is getting ready to reform the system.

Why necessary? Over the next 30 years, a population that equals the combined size of Germany, France, Britain, Italy, South Korea, South Africa, Spain, Poland and Canada will move into expanded urban areas. We're talking over 1B urbanites by 2040.

The melting polar ice cap doesn't portend intra-Core warfare, but an easy avoidance of Gap instabilities

WORLD NEWS: "Russia and China explore opportunities of ice-free Arctic," by Kathrin Hille and Isabel Gorst, Financial Times, 2 March 2010.

The fantasies of great-power war over resources in the Arctic are being generated at warp speed by a small army of security analysts and academics, but the larger truth is that, to the extent an iceless North Pole allows for resource exploitation and more direct intra-Core travel (it's the quintessential Core "lake"), what's far more likely is a growing reticence by Core nations to deal with instability inside the Gap's failed states.

We are talking the ultimate in workarounds.

Yes, there will be disputes galore. But lawyers and diplomats will handle this, and differences will be split.

Why? Expanding pies are easier to cut.

The faster-than-expected recovery

WORLD NEWS: "Global trade index shows rapid recovery from crisis," by Alan Beattie, Financial Times, 2 March 2010.

Remember last year's scary drop in trade? It was something like 9-10%, or roughly 4-5 times worse than the only other two years since 1971 that the world experienced a drop in trade. From Oct 08 and Jan 09, the short-term drop was 20%!

Well, last December featured the highest growth rate for a December ever (4.8%), and the fourth quarter of 2009 rose 6% over the 3Q. Estimates are that postponed purchases account for roughly 2/3rds of that recovery.

Misunderestimating or misoverestimating Asia's rise?

FINANCE AND ECONOMICS: "The balance of economic power: East or famine; Asia's economic weight in the world has rise, but by less than commonly assumed," The Economist, 27 February 2010.

The old argument about purchasing-power parity versus market exchange rates: the former puts Asia's share of global GDP at 35%, the latter at 27-28%.

The mag's point: "the output of the rich West is still almost twice as big as that of the East." As for exports, Asia's share goes from 28% to 31% since 1995, and "remains smaller than western Europe's."

The counterintuitive bit:

Indeed, the shift towards Asia appears to have slowed, not quickened.

How so? China's rise is offset by Japan's decline.

Asia has a bigger share of global market capitalization (34%) than both Europe (27%) and America (33%), but the bulk of financial wealth remains in private hands--thus overwhelmingly in the West. China may have the world's biggest currency reserve, but official reserves account for only 5% of global financial assets. Asia's currencies likewise make up only 3% of total foreign-exchange reserves.

Still, when the PPP measures are taken into account, Asia is super-sexy to business because three of the four largest consuming countries are found there: Japan, China and India. And that's with 3/5ths of the world's population currently consuming only 1/5th of the world's total.

Add to that the undeniable reality that Asia leads the world in capital spending, and there's no ignoring the place. History has resumed from the combined disjuncture known as the Industrial Revolution and the age of colonialism: and Asia is back to where it once belonged.

Key indicator: for most global corps, Asia is now about 20-25% of profits. By 2020, it could account for roughly half of most.

Catholic criminal conspiracy

ARTICLE: For Years, Deaf Boys Tried to Tell of Priest's Abuse,
By LAURIE GOODSTEIN and DAVID CALLENDER, New York Times, March 26, 2010

A living nightmare defined:

They were deaf, but they were not silent. For decades, a group of men who were sexually abused as children by the Rev. Lawrence C. Murphy at a school for the deaf in Wisconsin reported to every type of official they could think of that he was a danger, according to the victims and church documents.

They told other priests. They told three archbishops of Milwaukee. They told two police departments and the district attorney. They used sign language, written affidavits and graphic gestures to show what exactly Father Murphy had done to them. But their reports fell on the deaf ears of hearing people.

This week, they learned that Cardinal Joseph Ratzinger, now Pope Benedict XVI, received letters about Father Murphy in 1996 from Archbishop Rembert G. Weakland of Milwaukee, who said that the deaf community needed "a healing response from the Church." The Vatican sat on the case, then equivocated, and when Father Murphy died in 1998, he died a priest.

That, my friends, is a criminal conspiracy to cover up a crime. And our current Pope participated in the cover-up.

Will the Taliban fight to the last man in Kandahar?

ARTICLE: Kandahar, a Battlefield Even Before U.S. Offensive,
By CARLOTTA GALL, New York Times, March 26, 2010

Kandahar as THE battlefield for Afghanistan:

When American forces all arrive, they will encounter challenges larger than any other in Afghanistan. Taliban suicide bombings and assassinations have left this city virtually paralyzed by fear. The insurgents boldly walk the streets, visit shops and even press people into keeping guns and other supplies in their houses for them in preparation for urban warfare, residents say.

The government, corrupt and ineffective, lacks almost any popular support. Anyone connected to the government lives in fear of assassination. Its few officials sit barricaded behind high blast walls. Services are scant. Security, people say, is at its worst since the fall of the Taliban government in 2001.

It would seem to be the place where the Afghani Taliban will make their stand.

Personal knowledge to fill out Mallaby's take on Yan

OP-ED: For rising China, an identity crisis, By Sebastian Mallaby, Washington Post, March 26, 2010

Yan Xueton, as blog readers know, is my main man at Tsinghua U., having arranged the translation of both New Map and Blueprint. He's also hosted me twice to Tsinghua and we've spoken publicly together a few times.

Yan's thinking is indeed very influential in China, but I think Mallaby draws his conclusions here a bit too starkly on the whole barbarians-versus-non-barbarians. I can just as easily transpose Yan's thinking to my Core-Gap analysis and simply find that he leans more to the side of firewalling the Core off from the Gap's worst exports and less to the shrink-the-Gap side.

I don't find that hesitancy on global activism very surprising from Yan, especially if you know, as I do based on significant conversations with him, his fears about the upcoming fifth generation of leadership--namely, his sense that they are searching for a basis of authority like no previous generation before them. Yan is concerned about this group seeming untethered from sources of authority if the economy were to suffer a serious downturn, and--as such in my opinion--he is concerned about any temptation to seek such authority in overseas adventurism--a real temptation given China's rising nationalism.

So to me, Yan's thinking is an avowed attempt to locate a sense of authority that's organic to China's long history (Mallaby's point as well), and thus his reticence to make bold claims as to China's global role represents a certain sensible hedging strategy WRT to the incoming generation of political leadership.

What Mallaby's description is missing: how big the non-barbarian population in the world really is in Yan's estimation. He may not offer quarter or much aid to "barbarians," but I think you'd be surprised how few of them Yan sees in this world.

My evidence? Besides the direct conversations, the simple support he's offered my work in China.

In the end, if we were to compare notes, I don't think Yan would tally up many more "barbarians" in this world than I would.

(Via WPR's Media Roundup)

We don't want to fight a war with China over the yuan

OP-ED: Soothing China-U.S. Tensions, By CHARLES A. KUPCHAN, New York Times, March 30, 2010

Very smart piece of analysis from Kupchan, who consistently impresses.

The gist:

Despite the rising rhetoric, the current discord is not about a fundamental clash of national interest. Rather, it is the product of domestic pressures on both sides that are cornering their governments into a counterproductive game of tit for tat. There is a win-win way out, but American and Chinese politicians both need to see through the haze of mutual recrimination to recognize it.

The declarations of Chinese leaders aside, it is in China's interest to allow for a significant appreciation of the yuan. Doing so would allow the government to address its most pressing political challenge: reducing income inequality and raising the quality of life for millions of Chinese. The best way to achieve this goal is to move the Chinese economy away from export-led growth, huge dollar reserves, and high savings toward domestic investment and the stimulation of domestic consumption. An appreciated yuan would further these ends by increasing the purchasing power of China's consumers and reallocating wealth away from large, often state-owned exporters to the broader citizenry. China -- along with the rest of the world -- would benefit from this re-balancing and the global stimulus it would produce.

Beijing is not pursuing this course of action in part because of lobbying from powerful exporters. But at least as important in prompting Beijing's intransigence is pressure from Washington. Amid the blustery nationalism that is now a staple of Chinese politics, the more intensely the United States presses Beijing to revalue its currency, the more firmly Chinese leaders dig in their heels.

Washington is right to want a revaluation of the yuan, but wrong to pursue that objective through bullying Beijing. The problem is that President Obama -- just like his counterparts in Beijing -- is under pressure to get tough.

Despite what I've said in the past (better to pressure on the currency versus anything else in our relationship), I've since come around to the view that our obsession on this one point threatens to become the WMD-like equivalent from our go-nowhere dynamic of pressuring Iran--meaning we'd be better off de-prioritizing (i.e., China will eventually appreciate the yuan for its own selfish reasons and--better yet--make it convertible so its markets discover better ways to recycle its trade surplus more efficiently).

(Via WPR's Media Roundup)

TMI!

LEADERS: "The data deluge: Businesses, governments and society are only starting to tap its vast potential," The Economist, 27 February 2010.

SPECIAL REPORT: "Data, data everywhere: A special report on managing information," by Kenneth Cukier, The Economist, 27 February 2010.

Since 2005, the global flow of data grows 8 fold from 150 exabytes (billion gigabytes) to 1,200 EB (beyond this are zettabytes [ZB; this year's total would equal 1.2 ZB] and yottabytes [YB; supposedly "too big to imagine" at 2 to the 80th bytes]).

The primary editorial advice? Give consumers far more transparency on their own data profiles, empowering them to decide who collects/has access/can exploit. Also mandate the companies disclose security breaches. Third, an annual security audit, publicly disclosed, of companies that handle data of a social nature.

In the special report, you get the distinct impression--correctly I argue--that globalization and information freedom are highly linked: the shift from scarcity to superabundance in info makes possible the rise of so many economies and the global middle class. It is a virtuous circle: revolutions in measurement often precede revolutions in science.

Getting ready for the next crisis

WORLD NEWS: "IMF Weights Plan to Offer Nations Money During Crises," by Bob Davis, Wall Street Journal, 27-28 February 2010.

FIXING EUROPE'S FINANCIAL FRAMEWORK: "Brown leads push for deal on global bank levy," by George Parker, Financial Times, 11 March 2010.

I include the second cite primarily because it raises the question of who will pay for such a response fund: governments (to a supranational org like the IMF) or banks (to national governments)?

In the financial crisis of 2008-09, only Mexico, Colombia and Poland took advantage of IMF offers of loans. Everyone else feared the signal such loans would send to markets.