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Entries from August 1, 2007 - August 31, 2007

8:22PM

G'day mates!

Checking in from Hayman Island, an amazingly gorgeous and relatively remote island off Queensland, Australia.

Flew from Wednesday at 4pm (Dulles) til I arrived here local time at 6pm (LA to Sydney to Hamilton Island and then large yacht to Hayman) on the charter and gave my keynote to the World Economic Forum/Australian Leadership Retreat about 30 minutes after arriving. One of the best performances of my life. Based on feedback from WEF people, it went over like gangbusters. Hour later I'm sitting with Martin Wolf and Minxin Pei at dinner. Way cool.

Meeting tons of people and getting contacts like crazy. As always, you meet some biggies and they're amazingly cool and others and they're complete assholes. But enjoy myself anymore--impossible!

Thanks to Jenn for talking me into this (I said no last year) and Vonne for letting me go (she covers me at an all-day alt rock concert with eldest daughter--but Martin Wolf is "My Chemical Romance"! I try to explain to Em, who stares at me uncomprehendingly ...).

All for now. The talks and panels are all stunningly good. Can't miss any.

3:18AM

The Surge creates leaving space

ARTICLE: 'Watch The Sunni Tribes,' By Thomas L. Friedman, New York Times, August 29, 2007

Good piece of reporting/analysis by Friedman, highlighting the fragile success in the anti-AQI effort (fragile in the sense that helping the Sunni boot jihadists doesn't make them love either us or the Shiia).

This raises a question of lock-in: How do we lock in the success of Kurdistan plus the suppression of AQI while subtly removing ourselves from the Sunni-Shia tension so that the central government steps up while both the Saudis and Iranians meddle to no too-destructive ends (I don't expect either to stop meddling, I just want enough sense of limits to emerge so the nascent Iraqi government can find some heightened legitimacy in its wobbly-legged first few months of seemingly operating without an overt and heavy US footprint--something they want to succeed on many levels I shouldn't have to explain).

You might be tempted to assume that lengthening the surge cures all, but that is a huge and ahistorical assumption. The surge, to the extent it works across the three wars, creates its own peaking dynamics where, if we're unresponsive to expectations created, we may well step past the reassurance zone into triggering a resurgent anti-occupational rage.

The neat coincidence of AQI's overreach last year and our surge strategy of aligning with Sunni sheiks should not be assumed to constitute a get-to-stay-in-Iraq-at-this-level-card ad infinitum. A big part of the surge's strategic charm is to create the leaving space that allows us to shift from direct action to advisory, which is inevitable and right , and if that discussion sends you foaming to your keyboard, then you need to remind yourself of Lawrence's admonitions about the half-life of occupying forces. "Stay the course" is a political slogan, not COIN doctrine, which is closer to "complete the journey as fast as possible but no faster."

Because, there are more clocks running than just the ones Friedman listed: some related to the mechanics of our military, others to the mechanics of the world and globalization's advance.

3:16AM

Self-validation from the old gang

EDITORIAL: "Sarko Steps Up," Wall Street Journal, 29 August 2007, p. A14.

Sarko talks tough on Iran (he too is hot to threaten bombing to show how tough he is, never mind what a non-effect it would have on Iran's actual capabilities development), and Merkel is described as Bush-lite. Toss in Gordon Brown and all that "conventional wisdom" about the next president needing to make "various policy amends" is blown off.

The world is all turning more bullish on Bush's foreign policy!

Okay, just the usual Euro Big 3. They, plus America is all that's required to both run the world plus stand up to the authoritarian Rest.

Oh let me count up all the troops, because this strikes me as truly visionary!

As Sarkozy himself is quoted from last year, "I've always favored modest effectiveness over sterile grandiloquence."

Ah, thus the effectiveness of promising that Tehran's pursuit of nukes can end in only two ways: "Iran with the bomb or the bombing of Iran."

India suffers more terror attacks every year than any other country. Pakistan is clearly linked to the majority (I mean, they emanate from its territory as much as 9/11 emanated from Afghanistan), making Pakistan arguably the most terror-exporting nation on the planet. It's also given away nuke technology.

And it has the bomb.

Why not nuke Pakistan? Hmm. Maybe it's more complex than that, so we shelve the grandiloquence there.

And Israel's monopoly on WMD in the Middle East gets us what--exactly--in strategic stability for the region?

But, definitely, by all means, let's match Ahmadinejad's chest-beating rhetoric. It goes so well with our modest effectiveness.

Bush's accomplishments in effectively dividing the world along old lines is certainly impressive.

Too bad yesterday's fault lines don't address tomorrow's challenges.

America will need allies who go and do, not stand and talk. And we'll need them in serious numbers.

2:23AM

'Please protect us from you'

Calls Grow for Foreigners to Have a Say on U.S. Market Rules, By HEATHER TIMMONS and KATRIN BENNHOLD, New York Times, August 29, 2007

Yowza!

And yet you just knew this would happen. We love to experiment on the margins of rules, but the rest of the world is far less comfortable.

We have real financial markets, while the rest of the world has mostly banks for venture capital, so a rule set is needed to bridge that capabilities gap.

(Thanks: FH)

2:20AM

Email: Gaming the future

Timothy Jiggens writes:

The MMOG you envisioned is creeping closer. Check out this site: Changemakers.

With categories like "Global Water Challenge" and "Entrepreneuring
Peace", is it long before someone opens a call for "Soft Take-Down of
Kim"?

8:01AM

China's movin' on up

POST: The Beginning of the End of Cheap Labor in China

I've blogged this many times in the past. Good article by the always solid Bradsher and good commentary by Steve, who's been doing business and traveling throughout China for close to two decades.

My point again: China moves up the production--and wage--chain faster than most people expect, and that's good given the looming demographics.

7:58AM

Smart piece on Russia-China relations

ARTICLE: 'Should We Be Worried About Russia and China Ganging Up on the West?: Probably not. Here's why', By Ian Bremmer, Slate, Aug. 29, 2007.

Smart piece by Bremmer, who's always reasonable and realistic.

(Thanks: Michael Griffin)

7:55AM

More progress in Pakistan

ARTICLE: Pakistan's Musharraf, Bhutto Reach Deal, By STEPHEN GRAHAM, Associated Press, August 29, 2007

Bush logically gets some credit here, more specifically Rice and State..

(Thanks: CitSAR)

2:00AM

Arguing from different worlds

POST: Debating Dr. Barnett

Comment 8:

eric writes: Wednesday, August, 29, 2007 3:58 PM
A further discussion would be useful
Hugh, I think you guys are talking past each other a bit. His argument is three-fold: 1) If we don't push the diplomacy side of things in conjunction with the surge, the killing is virtually inevitable. 2) President Bush is not inclined for whatever reason to push the diplomacy side of things. 3) Given (2), pulling back in the near-term to the Kurdish areas and Kuwait is preferable and will cost less lives in the long-run than continuing as we are. This is because the slow-motion Suni/Shiite war will eventually fatigue the American people's will to do anything in the Persian Gulf and the resulting total pullout will cost a lot more lives, both Iraqi and American.

If (2) were to change, we can avoid (3). I think his 'small chance' you refer to is more along the lines of Dumb and Dumber "so you're saying there's a chance...?!" If (2) doesn't change, the only options long-term are to partially pull back now and try to preserve some progress, or pull back completely down the road and face disaster.

I don't necessarily agree, but that's what he's saying.

This guy Eric heard me very clearly and he's right: Hugh and I are clearly talking past each other on the subject. Iran is pure evil to Hugh. I see a state on par with a bunch of other scummy regimes in that larger region (you want to name the main source of terror, you'd have to pick Pakistan based on all the data, but that's just the facts that India's had to suffer for years on end): you can condemn them all and start bombing tomorrow, but that's not a realistic long-term strategy for anything other than sending the entire place up in flames. Iran is fighting just like any weaker power would in this strategic situation: we call it "terror" because that's our definition, but a lot of people in that region consider our operations in Iraq similarly, so getting overemotional in the use of terms is unhelpful. Powerful states don't have to use asymmetrical means, weaker opponents do. Unless you're reading to occupy 70m Iranians soon, you're going to have to find a way to deal with them in the context of Iraq.

But that's why the debate is getting so dysfunctional on our end: all name calling and cries of traitor if you discuss our options in anything less than totally unconditional terms (to be against Bush is to hate America and its military and be a surrender monkey). It is highly unrealistic and approaching infantile to restrict our conversation so, not to mention full of hypocrisy (Anyone give a shit over 400,000 dead in Darfur? Don't plan on it anytime soon. And yet, if Bush and Co. plan the postwar better, we could have been there and back by now. And please don't remind us of what the hardcore righties declared when Clinton finally took us into the Balkans, leading them to back Bush in 2000 because he promised outright never to engage in such craziness, only to then make Clinton look small in comparison).

We're losing our ability to discuss Iraq with any perspective--at least in the public realm. I discuss the issues and strategic choices with none of this hyperbole or name-calling on a daily basis in professional realms (yes, that vast world of reality beyond the blogs, where I earn a real living working with actual people with actual names), and there heads remain quite cool on the subject, despite many schools of thought existing.

But frankly, this is why I'm not political and readily advise players in both parties with little care for which "side" they're on. The zero-sum rhetoric is just too silly ("If our side loses, all is lost! But if we win, all is preserved!"). After working with the first Bush, then two Clintons, and now two Younger Bush administrations, I will admit I've never really encountered that imaginary world of dungeons and dragons that seem so real in so many partisan minds).

But perhaps 18 years of regular interactions throughout the military and government have left me incredibly naive on that subject.

In the real world beyond the name calling, the drawdown and pullback are being planned by our own military. Casey, for example, thinks we should be down by half in Iraq by the end of 2008, something I recently argued in a column could happen by the second half of next year. Petraeus wants longer, some senators like Warner want some symbolic drawdown to begin by Christmas. No matter how you slice it, this is going to happen. In the real world we're arguing over months, but in the white-hot debate world, there are only two choices: "cut and run" or "give the surge time to work." Fine and dandy, if it's all about who rocks your boat next October. So let the finger pointing continue, but I'm telling you, we're drawing down across next year. Already been decided.

As for the shift from direct action to more advising and training and focused SOF, that's also in the works. Debate all these claims of genocide-in-the-making-or-no, but I'm telling you, that's also just going to happen. Again, we can argue which month we perceive this or that shift in, so we can declare it a "clear vindication of the surge" or "a complete defeat for America," but it's going to happen. Our military wants it, needs to do it, the administration is prepping for it, and it's just plain going to happen.

That's what I mean by "inevitable." It's been in planning for a while and it's moving toward unfolding whether Dems demand it or Repubs condemn it--or the other way around. It's mostly a product of troop overuse--pure and simple.

But we're surfing through all this vitriolic debate on do we "give it time or not?" when, in reality, that clock's already in motion: we have to dial down. We can debate it, but troop reductions are coming.

As our role evolves as a Vietnam-done-backwards (not my "strategy" but a simple reality), we're faced with the challenge of Bosnia-done-backwards (again, not a "strategy" of "allowing genocide" but my simple observation that when you put 2 and 2 together [our inevitable drawdown and pullback, combined with the reality that the Sunnis and Shiia are nowhere near exhausted and the progressive separation of those groups continues], you're basically watching a Bosnia-done-backwards). That's my professional observation. You can tell me I'm wrong, but condemning it as "my strategy" (Hugh's take) simply confuses my analysis with a political stance.

And that's essentially where the disconnect with Hugh (listener Eric's point about us talking past each other) begins: I make observations from a professional standpoint and they're cast as strategies "advocated," that I must "defend" like they're something that sprang out of my rear-end instead of being logical outcomes of years of U.S. choices on the ground.

And I guess that's where I feel--and felt--uncomfortable on Hugh's show yesterday. We're not conducting a discussion here. He's battling perceived straw-man versions of my professional observations like they're enemies of the state of affairs he advocates.

I don't "advocate" these observations like they're choices easily made or discarded, which seems to be Hugh's belief. I'm just telling you that that is where we're inexorably headed, like it or not.

I don't like it. But I can't make unpalatable things disappear by declaring them "bad."

In sum, I don't find this sort of hyperbolic finger-pointing useful. Because when I wade into such politicized environments, I end up sounding just like anybody else, which is fine in Hugh's world, because he needs bodies galore. But in my world, this is a bad use of my capital. No one I need to deal with professionally increases their respect quotient on the basis of such appearances.

I enjoyed going on Hugh's show over PNM. But when posting my analysis of the reality of a Bosnia-done-backwards gets me the privilege of defending my "genocide" strategy for Iraq, it just seems useless, because I'm getting sucked into other people's definition of debates that I find--on average--to be counterproductive simply because the whole purpose is to generate "heat."

I just don't get paid or respected in my world for that. Truth is, you get ridiculed if you indulge in it too often.

Let me give you an example of this dynamic: I say Iran's already achieved a sloppy MAD-like deterrence, whether we like it or not. Getting as far as they are and dispersing their facilities so widely and putting them deep underground, we can either bomb them conventionally and push them back a bit (but we ultimately can't stop them unless we invade and occupy a la Iraq (ain't gonna happen any time soon)) or decide to nuke them outright, meaning pre-emptively. We're not going to do the latter, for a lot of reasons I wouldn't have to explain in a professional setting.

Now, when I make that call, you can certainly dispute it, but to ask me--as I often am--to defend my "strategy" of "giving Iran the bomb" and "supporting the idea of a nuclear holocaust" ... well, that's a fairly asinine argument to have with someone you probably shouldn't bother wasting your time on. And yet, if you go on the media, that's the conversation you're stuck with most of the time. They're really not interested in your analysis. They just want to straw man your views and discredit them.

Fine, I get that process. I just have found it completely useless for my career and life's work.

Now, you can say, "Have the courage to debate me, dear sir!" And I'll tell you I debate this stuff non-stop on a professional basis, with--canubelieveit!--real professionals!. We just don't talk like talkingheads do on TV or radio. Political parties aren't mentioned, for example. I get asked all the time by media about my party preference, but I've never been asked that question--ever--by anyone in the government or military with whom I've interacted all these years (and I'm talking tens of thousands of people).

I know, so very boring compared to the Hollywood version.

So yeah, I do sometimes get taken quite aback by having to defend my professional analysis like I'm just another politico, armed with both asshole and opinion, because--again--I just never interact with people professionally like that, not even Hill staffers or members of Congress (most of the time, I'm unaware which party they belong to--again, my indefensible naivete).

In the end, I just don't need the gotcha stuff to get anything done. At the end of the day, it just doesn't make me any smarter or change anyone's mind worth changing..

Today, I keynote a fixed rotary craft (helo) conference in Pax River. I spend the morning interacting with all these professionals, civilian and uniform, US and foreign. I say all my stuff the usual way, and I don't get asked to defend my "support for terrorist Tehran" or why I'm a "commie sympathizer" vis-a-vis China, or why I "advocate genocide in Iraq" ("Give us a number, please!!!").

And you know what? I got my message across, got plenty of positive and negative feedback, and got smarter.

Something to remember the next time. The further I go, the more I learn to say no.

8:02AM

Looking for John Nagl's email [Updated]

Do not post in comment.

Send direct by email to me.

[Ed. Tom and John are in contact now. Thanks!]

7:58AM

Bush's refusal to deal brings deaths - fast or slow

TRANSCRIPT: Pentagon's New Map author Thomas P.M. Barnett on the surge strategy in Iraq

POST: Iran In Iraq: Clarity And Confrontation Or Appeasement?

Hugh misrepresents my argument in this sense: I don't say more bloodletting is required for a regional dialogue to begin, but that Bush's refusal to deal with Iran leaves us with that inevitability--either fast or slow.

Thus the "distant quarrel" charge is misapplied.

I think Bush's approach of trying to settle Iraq while simultaneously ramping up for strikes in Iran is strategically stupid and morally bankrupt. There are no "separate lanes" in the PG, any more than there are in our relationship with China.

If Bush would stop taking on all comers all the time, we could have--and could still--prevent unnecessary death in Iraq. But Bush refuses to make the tough decisions, and so history will blame him for this failure--unless this administration somehow wakes up in time.

I am not optimistic. Bush is the ultimate hedgehog who admits no mistakes.

1:58PM

Why the killings to follow will all be blamed on Bush

I talked--or taped--an interview with Hewitt for eight minutes tonight while driving to the airport (and have no idea if the spot runs tonight or not, but suspect it might), and assuming I'm not edited down to bites, I feel I got my point across.

Hugh wants to pre-emptively tag the Dems for future Sunni-v-Shia killings in the inevitable drawdown and pullback to follow. He wants a number to pin on them now in advance of Petraeus' report. The stabbed-in-the-back storyline is being pro-actively weaved.

But here's why that won't work:

Bush unnecessarily alienated the allies we needed to win the postwar early on by fielding enough troops.

Bush let the Sunni-Shia civil war unfold by waiting too long to surge the necessary numbers.

Bush THEN accelerates a fight with Iran on WMD, despite his intell community's judgment that Iran is 3-5 years away from fielding a bomb.

By doing that, and prepping the American public for military strikes with Iran, Bush not only loses popular support at home (sheer fear over a premature escalation and spreading of the war) but encourages (!!!!) Tehran to push as hard as possible in its proxy war in Iraq, so as to keep us diverted and bleed our troops. THAT Bush decision kills ours troops unnecessarily.

THAT Bush decision also encourages (!!!) Riyadh to counter in Iraq with its own effort. That effort also unnecessarily leads to American troop deaths.

Finally, Bush refuses any serious diplomatic surge to accompany the troop surge, and that means he's led America into a strategic cul-de-sac: we either preside over slo-mo ethnic cleansing, losing troops unnecessarily along the way, or we watch it go faster from the sidelines. Either way, our credibility in the region plummets. If we lose enough Americans in this idiotic pathway of Bush's stubborn creation, he'll singlehandedly kill American popular support for a long-term presence in the region. Those deaths that follow will also sit on Bush's head.

Why Bush picked this premature fight with Iran RIGHT when Tehran could harm us most in Iraq, putting the maximum number of U.S. troops at risk (and killing plenty in this process unnecessarily) is simply beyond me. It is THE strategic mistake of the entire Bush administration, and it's why all the deaths to date and to follow will sit squarely on Bush's shoulders. These were all HIS choices, despite a chorus of advice to the contrary--all along the way.

I would accept no such number of either Iraqi or American deaths. I never would have ramped up the fight prematurely with Tehran. I would have done it wit North Korea, but not Iran. I would have made the deals necessary to make Iraq work. I would not abandon one war without finishing it to prematurely ramp up another one with Iran.

If you want to counter by saying the meddling by Iran and Saudi Arabia (i.e., support to co-religionists) matters little, then fine. But it's hard to deny that their roles--along with Iran proxy Syria--could have been large in the stabilization of Iraq, something we've not really forced and/or negotiated from them. Absent attaining a powerful quorum of outside powers to force Iraq's stabilization in a huge show of force, we were ALWAYS slated to accommodate both Riyadh and Tehran on Iraq, and if you say balancing those two is that hard, then I think you overestimate the Saudis and underestimate the Iranians--and clearly we collectively misunderestimated Bush by re-electing him in 2004, when signs of his administration's lack of strategic imagination were already appearing.

Ed. Hugh spoke to Tom about Bosnia done backwards is still a model, just with more real-time anguish but for some reason linked the wrong post in his own post

10:29AM

Split Sudan up, too

Looking Forward to "New Sudan"

Great post by Steve. Sudan may well decide to return to the pre-colonial status quo ante and split into a north and south. These two distinct countries never should have been combined.

When it happens, we can put it in the same basket as Yugoslavia and Iraq: fake states that naturally break down back into their constituent parts when globalization comes a knockin' and the most competent and ambitious want out of their dysfunctional union.

10:00AM

A good downside analysis of China in Africa

ARTICLE: “China’s Trade With Africa Carries a Price Tag,” by Lydia Polgreen and Howard W. French, New York Times, 21 August 2007, p. A1.

A balanced piece that argues that while Chinese entry into Africa is obviously beneficial to Africans, it benefits China far more. Moreover, unless China moves beyond the opening gambits associated with classic mercantilist trade, Africans will quickly come to the conclusion that this interaction is not much better than the colonial ones that came before.

I’m convinced of this: China is there now primarily for raw materials and to create more markets for its lower end goods. That creates a great impulse but not a broad one. Blowback on that score in inevitable and already brewing. China will try to broaden its sales up the production chain and that will become a major bone of contention, a la Japanese auto manufacturers in America 20 years ago (you sell us stuff you should be making here with our workers). China will be forced to start locating some manufacturing in Africa to employ African workers. At first this will be a sop, but over time this will start the replication effect that Europe once laid on America and America once laid on Asia.

Moving in this direction will not be easy for China, but it will beat the growing blowback. In a generation’s time you’ll see ads in Africa that brag about FDI and local jobs created just like Honda and Toyota do in America today.

8:16AM

Hitchens is right. We're fighting at least three Iraq wars

ARTICLE: 'Which Iraq War Do You Want To End?: We're fighting at least three of them,' By Christopher Hitchens, Aug. 27, 2007

Nicely done disaggregation of the Iraq situation. Agree on all counts.

When people say surge works, they speak of AQM, and when they say it doesn't, they speak of Sunni v. Shiia.

Meanwhile. Kurdistan remains the untold success story increasingly under fire.

(Thanks: Patrick O'Connor)

8:15AM

And just to emphasize my point ...

ARTICLE: "Africa's New Car Dealer: China," by John W. Miller, Wall Street Journal, 28 August 2007, p. B1.

But here's the trick for China and emerging Asia: if they want Africa to keep buying, they have to trade in such a way as to raise local income. Asia has to develop Africa to stay rich.

8:13AM

Perfect BOP selling

ARTICLE: "Connecting With Developing World: Millicom Grows Rapidly By Selling Wireless to Customers a Second at a Time," by Sarah Childress, Wall Street Journal, 28 August 2007, p. A8.

In a nutshell, why the Gap gets shrunk on all sorts of levels:

As markets in the U.S., Europe and much of Asia become saturated with wireless phones, an increasing number of telecommunications companies have looked to emerging markets. But this has created a challenge: squeezing profits out of a population that has little disposable income.

Classic bottom-of-the-pyramid packaging and selling by Millicom.

Want better governments in the Gap? Create connectivity that makes transaction possible and then watch the people demand it for themselves on the basis of volume. Make the pie bigger and show the government it can have more so much more easily by letting the public get more.

You'll say, "Cells are easier and don't portend much for other stuff," & I'll say you're wrong.

Every time we fill up Asia, we not only have to find new customers on that subject, but we've created the productive capacity and the new smarts to sell at the BOP.

Marx beget Lenin beget Mao beget Pol Pot and so on, with each going further back in time. Well, by adding Asia "too fast" to capitalism (all those poor!), we're finally doing the same: going historically upstream.

8:09AM

Tom on Time

Remember when Tom wrote that he'd talked to Time's China Blog? The interview is starting to come out now as a series of posts. Here's the first one Why the US and China are destined to be Allies...

6:00AM

Russia‚Äôs interest in promoting nuclear power is real

ARTICLE: “Russia Floats Plan For Nuclear Plant Aboard a Boat: Mr. Chilikov in Indonesia Finds the Idea a Tough Sell; ‘There’s 100% No Risk,’” by Tom Wright and Gregory L. White, Wall Street Journal, 21 August 2007, p. A1.

Sounds a bit wacky, and yet I’ve been in more than a few meetings on our side where the idea’s been floated with great seriousness (usually in disaster relief).

Clearly, Russia sees a strong global future in nuclear power and wants to be the big player in it, and one of its opening bids is “a fleet of reactor-equipped ships” that “are meant to provide electricity to remote areas.”

The bulk of the story is mostly about the quirky salesmanship of your average Russian entrepreneur, which is fun to read if only to remind us how wrong were all our predictions that Russians couldn’t adapt themselves to a marketized world.

Social Darwinism is a great theoretical argument, but life disproves it time and time again.

2:00AM

The rules, dear Watson

ARTICLE: “A Fear of Foreign Investments: Will Governments Use Their Holdings To Try to Meddle In U.S. Affairs?” by Steven R. Weisman, New York Times, 21 August 2007, p. C1.

Per my SWF column of weekend before last, this piece notes the following:

… the Bush administration is pressing the International Monetary Fund and the World Bank to examine the behavior of these funds, which control up to $2.5 trillion in investments, and develop possible codes of conduct for them. Among the proposed rules would be an obligation to disclose investment methods and to avoid interfering in a host country’s politics. Officially, the United States welcomes all investments, except those that could compromise national security.

Just like I said in the piece: a few areas will be off-limits, others less so, and some will be wide open. But what really worries the West most about SWFs is that they’re so new and large and we don’t have a significant past experience to allow for the discounting of perceived risk (clearly a more slippery subject here).

So the Bush administration does what makes sense: it starts pushing the IMF and WB toward an enunciation of acceptable behavior.

One Western fear is described as “philosophical.” It directly echoes a point I made in my piece:

Now, with sovereign wealth funds, many experts are asking whether cross-border investment is evolving into cross-border nationalization, raising the prospect of government interference in free markets, only this time, in other countries’ markets.

As I had put it, it’s one thing to practice state-directed capitalism in your own backyard, it’s another thing to use the proceeds to start messing around in my free-market economy.

The next concern cited in the piece was the size of the funds and their capacity to make self-fulfilling bets.

So yeah, reading Weisman’s piece was a nice ego boost because he covered all the same points I had raised in my piece, so the former economics student in me felt like I got a passing grade from a writer I really respect.

And actually, all that really proves is that I felt a bit nervous writing on such a purely economic subject.

Neat chart on the jump page that shows the world’s largest sovereign funds. You can see how most were created in the last few years (Russia, China, Qatar, Algeria, Australia, South Korea, Kazakhstan, Venezuela, Iran and New Zealand). A couple reach back to the 1990s (Norway, Malaysia). Starting in the 1980s were Singapore and Brunei. The first wave started in the 1970s (UAE [still the biggest], Kuwait, Singapore [its first], U.S. [the Alaska Permanent Fund--tied to oil, natch], and Canada [ditto]. One goes back to 1960 (Kuwait).

What’s clear is this: countries start them after resource booms or after periods of sustained trade imbalances that build up their currency reserves. Niche thing in the past, but something emerging markets are increasingly creating in this stage of the global economy’s spread.