This week's column

Europe's take on America's next president

The Wall Street Journal's European edition opines that the transatlantic bond remains "robust" despite President George W. Bush's supposed unilateralism. Harsh anti-Americanism, like that of France's Jacques Chirac and Germany's Gerhard Schroeder, is out and pragmatic pro-Americanism is in -- see replacements Nicholas Sarkozy and Angela Merkel.

With friendly presidents in every major capital save Madrid, Europe has moved past Iraq. Hence a "third" Bush term with John McCain would not signal disruption but a continued warming that characterized the second Bush term.

Read on at Scripps Howard.
Read on at KnoxNews.

Siterep

+ Changed the top-of-page navigation today to point to the Great Powers index page (which I'll be ginning up shortly) and a new index page for Tom's Trips. This page contains links to Tom's trips to East Africa, Central Asia and Cairo with the resulting materials, including articles, photo galleries and trip diaries. One item that hasn't been linked before is the trip diary from Tom's trip to CENTCOM when he got to shadow Admiral Fallon, resulting in the Esquire article The Man Between War and Peace. The diary posts are:

Fallon Trip Posts - Background
Fallon Trip Posts

+ Want to get your copies of PNM and BFA signed by Tom? You're in luck! I just put up instructions on the FAQs:

Will Tom sign copies of his books for me?

Yes! If you don't already have them, pick them up (through Amazon, as linked on the weblog, or elsewhere) and send them to him with a SASE (enough to cover the postage of books, obviously) at:

Barnett Consulting LLC
PO Box 970
Franklin, IN 46131

Our partners in the end

ARTICLE: "Foreign firms investing in Iraq: U.S. Companies slow to make the move," by Jim Michaels, USA Today, 17 June 2008, p. 1A.

Paul Brinkley, head of the Pentagon office who talked Enterra into entering Iraq, is quoted as saying "It's ironic" that the firms rushing into Iraq to take advantage are not American.

Actually, it's not ironic whatsoever.

Check out the countries described in the piece: Romania, Lebanon, China, Russia, Turkey, France, Germany.

None sent troops, but all showed up for the peace.

"Come as you are" meets "come when you want."

Iraqi foreign minister says: "They take risks. No pain, no gain."

And before you freak on the war-peace divide, realize that 95 percent of our troops die after "mission accomplished" and 85-plus percent since the end of the "lost year."

These countries were our unacknowledged partners all along.

You can either be shocked by that or realize that making it our war to run doesn't translate into making it our peace to exploit.

(Thanks: Rob Johnson)

More evidence on Vietnam

Gunnar Peterson sent some additional evidence/analysis WRT last week's column, Capitalism's reverse domino effect in Vietnam.

From a Motley Fool email to subscribers (unfortunately, it's not available to link online):

Why Vietnam Is Going to Be Big

Sure, Vietnam is not the next China or China-Lite or anything like that, but it's going to be big ... eventually. That might be hard to believe about a communist country, but like China, Vietnam is not as communist as it may appear.

Welcome to the jungle

The tunnel network built by the Viet Cong at Cu Chi is not a wonder of the world like the Taj Mahal, the Great Wall, or even Angkor Wat in neighboring Cambodia. Yet its scope is impressive -- more than 120 miles of tunnels and underground bunkers where Viet Cong soldiers lived, transported people and weapons, and waged war.

As you saw in our last dispatch, you can visit sections of the tunnels today. And when you do, you don't just see the tunnels. You also see -- all around them -- large, circular hollows in the ground. These are the scars of bombs dropped from B-52s to neutralize the impact of these tunnels and the guerilla fighters living in and fighting from them.

The people dropping those bombs, of course, were American.

While the war can slip from your mind while walking in what is now called Ho Chi Minh City (to honor the longtime president of North Vietnam) amid the hustle and bustle of its inhabitants, at the same time, its specter is also always staring you in the face.

Blink ... and it's 1975

Our hotel was just a few blocks from 22 Ly Ty Trong Street -- the instantly recognizable site of Hubert van Es' famous photograph of a rooftop evacuation. There are other reminders throughout the city ... the old Presidential Palace, the War Remembrance Museum, heck, even the statues of Uncle Ho.

That said, of all the places I've traveled, Vietnam may be the one country whose people seem the most genuinely pleased to meet Americans.

Vietnam: An entrepreneur's paradise

Vietnam lasted just 10 years under communism before its government began to enact reforms that embraced free market capitalism. We also heard over and over again during our meetings that American investors shouldn't think of Vietnam as a communist nation (which would dissuade foreign investment), but as a nation under a predictable one-party system, which actually removes certain risk elements from the investment process.

So while the U.S. may not have been able to prevent the fall of Saigon in 1975 to the hands of the communist north (no one outside of the government actually calls it "Ho Chi Minh City"),
capitalism prevails today.

Yet problems remain

This victory for the free market was likely unavoidable. Not only did people stream out of the country in the early 1980s to escape communist mismanagement, but once those shackles were finally cut, the turnaround has been spectacular: In 20 years, the percent of Vietnam's population living at subsistence level has dropped from more than half to about 10%. This rate
surpasses even that of China, and until this year, Vietnam's stock market was booming.

However, while Vietnam's potential is big, it does lack a few of the things that have fueled China's recent economic success.

First and foremost

Vietnam has no Hong Kong, no Taiwan, no wealthy place with >cultural ties to slingshot it into prosperity. Remember that Taiwanese and Hong Kong capital helped jumpstart the Chinese
Miracle, and that Hong Kong and Taiwanese managerial know-how filled in the gaps until enough Chinese developed the skills necessary to manage for-profit companies.

The managers we spoke with lamented that their labor cost advantages in Vietnam were at least partially neutralized by the country's lack of technically skilled labor. This will take time
-- more time than it did in China.

Then there are the difficulties related to developing the country's infrastructure. While a Taiwanese company has built a giant mixed-use area called South Saigon that includes its own modern downtown, in Saigon itself, there are almost no cranes. This is the consequence of opaque property regulations and government red tape. (Jones Lang LaSalle (NYSE: JLL) named it the most opaque market in the world.) This comes as a bit of a shock following China, where development is a priority -- and a place that my colleague Paul Elliott described as looking like a "crane factory."

What is this government, anyway?

Vietnam's government is still totalitarian. But communism, for all intents, is dead here. In fact, the government's main purpose seems to be to retain power over this economic machine
-- and to skim some off the top.

Still, to its credit, a reason that one sees so few cranes in Saigon is that its government lacks the Chinese government's ruthlessness in solving problems. Throughout the central city,
small landowners build on tiny plots of the same type that tend to attract eviction notices in China -- to be replaced by large, expensive, and more efficient land-use projects.

As a result, this is not a market that investors must rush into. But Vietnam is going to be big ... eventually.

Lincoln quote

Grant "was able to do the terrible math," so said Lincoln.

How to confirm that quote?

What I was trying to say about Ireland and the EU

Blogging on my Treo sometimes results in problems like the ones resulting from my post on Ireland's vote down of the EU reform treaty. Thumbing incentivizes minimal content, and that can be misinterpreted, which we see in some of the comments on the post itself and a recent response on Chicago Boyz. For my part, I'm sorry I didn't communicate clearly.

Consider our own adoption of the Constitution: once a super-majority of nine states was reached, the Constitution went into effect for those states. Rhode Island (where I used to live), dragged their feet and weren't in the first nine. They eventually did come in, but they didn't have to. And their non-ratification didn't scotch the whole process.

(Note: Smitten Eagle has the ratification process in his first parenthetical paragraph, and it's a pretty major point.)

The current EU treaty is for reform. This is roughly analogous to amending our Constitution. The way we do it: once you're in, if 3/4 of states ratify an amendment, you're stuck with it and beholden to it.

That's what I meant WRT to Ireland: allow a non-unanimous process of amendment or make some kind of way for nations to opt back out. What are the odds of amending the treaty with unanimity required? The Irish weren't incentivized at all to approve the treaty. Enough of them didn't want to change their constituiton that they could simply vote no. They get to stay with the status quo with no consequences whatsoever.

All I really meant was that unanimous ratification of amendments will almost always result in no amendments, and that seems like a pretty bad plan.

Beyond that, Smitten Eagle (where do these pseudonyms come from?) and some of the commenters on my post draw conclusions based on something I wasn't trying to say at all. I don't think they apply, so I'll just leave them be.

(I am on the record many places as not valuing democracy as the end-all and be-all of healthy nation status, but that is a different discussion.)

Meet the new Turks

ARTICLE: "The New Face of Islam: A critique of radicalism is building within the heart of the Muslim world," by Christopher Dickey and Own Matthews, Newsweek, 9 June 2008, p. 30.

Cool and big effort by Turkish scholars to contextualize, historically, the 170k known statements by the Prophet, known as the Hadith.

The goal? To stop the literal readings by fundamentalists to justify violence and separatism and resistance to the outside world.

Just like with Christ, you have to understand that the Bible's main books were all written for contemporary audiences, not today's world, so interpret or become captive to yesterday's logic, slowly twisted by history's advance.

We have judges do this with the Constitution. Same basic purpose and goal.

The literalists are dangerous in any religion. To me, it's pure escapism—a failure to communicate and a resistance to adaptation. Both are worth avoiding as we evolve.

So kudos to the Turks, who impress more and more even as Europe finds them still too weird to incorporate in the EU.

They should join the US instead.

Give it up

Tom got these comments passed on to him:

His briefing was awesome! He went for 120 minutes and he was on full throttle the entire time. Great stuff--really makes you think. He has a third book comming in early next year.

Lt Col, USAF

Tom says:

When I put on a show, I put out!

Tom on Facebook

Tom and I were talking today about ways to promote Great Powers when it comes out.

There's already a TPMB Fan Club on Facebook (though not very active).

Would it help get the word out to try to gin up a bigger presence for Tom on Facebook? How, exactly? Would it be worth the investment in time (since it will have to be kept up by yours truly)?

What do you think? Pros? Cons?

Relatedly, what other non-traditional promotional venues should we be looking at (again, especially in relation to Great Powers)? (And I'll probably be asking this question again, later.)

Thanks in advance for your (pertinent) thoughts ;-)

I want to access the Iranian people

OP-ED: Stars (and Stripes) in Their Eyes, By Azadeh Moaveni, Washington Post, June 1, 2008; B01

This is why I don't easily trade away the one asset I have in this contentious relationship: the love of the Iranian people.

I don't ask that population to choose between a sense of national pride and a sense of national fear and vulnerability. The nuke issue is the wrong one to fight over. I want to access the Iranian people, not turn them against the outside world that allows others around them to have nuclear power and/or weapons but denies the concept to them.

So I want to be extra discrete here: threatening Israel is a great way to bring about annihilation. Attacking them with nukes, either directly or through proxies, will bring about national annihilation--guaranteed.

But no, I don't go preemptive on nuclear power and a lot of hot air from Ahmadinejad. Crying "fire" in a crowded theater doesn't get you a death sentence.

So separate the bad leader from the good people and signal clearly how nice things can get for Iran once Ahmadinejad is voted out.

I mean, everywhere I travel this world I hear the same about the U.S. ... life's gonna be so much nicer when ...

(Thanks: Lexington Green)

Ireland kills treaty

PAPER: Irish Vote, Europe’s Future: Four options after the “No” (pdf), By Dominik Hierlemann, Bertelsmann Stiftung, spotlight europe special edition # 2008/06 – June 2008

It is weird how the EU can let one country decide to run a plebiscite and then kill a treaty.

Better is majority like we did with the Constitution.

A decent step in the SysAdmin evolution

POST: President Hu Jintao Honors PLA Helicopter Regiment's Relief Work, by David Hughes, Ares, 6/17/2008

China lets in foreign military, works its own to new level of confidence and competence, and then wonders, Why couldn't we return the favor somewhere else?

PLA peacekeepers have been around. I've met several who've worked Africa, for example. But the PLA always blends in instead of standing out.

This will end soon enough.

With great power comes great responsibility.

Comment upgrade: Kurzweil

Tom asked this question on Better thinking through chemistry:

What is the one great Kurzweil to read?

Status report

Edited Chapter 5 (diplomatic realignment) tonight. Three more to go to conclusion.

Got Chapter One endnotes done. Will manage a chapter a day til done before vacation begins.

All seems on sked.

How quickly it goes, and how long it lingers

ARTICLE: “Fear, Rumors Touched Off Fatal Run on Bear Stearns: Executives Swung From Hope to Despair in the Space of a Week,” by Kate Kelly, Wall Street Journal, 28 May 2008, p. A1.

SPECIAL REPORT: “Paradise lost: A special report on international banking,” by Andrew Palmer, The Economist, 17 May 2008.

Sitting down recently with this world-class broker-dealer firm’s senior management, you naturally talk about Bear Stearns, sort of the LTCM of this go-around (Long Term Capital Management from the 97-98 scare/collapse). When there is over-reach, and too much risk incurred, somebody’s gonna get singled out for cannibalizing—as in, all their competitors pull out their knives and dig in.

The price of our financial system’s willingness to experiment is that we regularly screw up by going too far.

But here’s the chart from the Economist that spooks: over time the crises seem to require longer recovery times, as in, the number of quarters til earnings at pre-crisis levels are resumed.

Black Monday in 1987 created a 4 quarter shadow. The Junk bond mess of 89-90 required seven quarters. The Mexico liquidity crisis in 94-95; five quarters. The LTCM/Russia/Asian flu of 97-99 was only 1 quarter (here, at least). The Dotcom plus Enron was four quarters, and the subprime/liquidity crisis of 07 and counting projects to 8 to 10 quarters—for now at least.

This makes me think of Cox and the SEC wanting to push a global rule set for managing transaction flows across national markets. Eventually, a big enough crisis, meaning one that spreads across the globe and costs everybody a bunch of quarters, will force the issue.

Equally low opinions

POLL: World Poll Finds Global Leadership Vacuum, WorldPublicOpinion.org, June 16, 2008

A clear signal of a world in transition and an absence of identifiable grand strategy among great powers: everyone is viewed as petty and stuck on their own definitions of success instead of promoting vision that attracts real allies.

Appropriate non-grab

ARTICLE: McCain Denounces Detainee Ruling, By Juliet Eilperin and Michael D. Shear, Washington Post, June 14, 2008; Page A04

ARTICLE: Critics Study Possible Limits to Habeas Corpus Ruling, By Michael Abramowitz, Washington Post, June 14, 2008; Page A05

I believe in this ruling, and see it as an appropriate limit on federal power, but hardly a new "grab."

The new grab had already occurred in the other direction, and now it's being trimmed back.

I wrote in PNM that this would happen and be natural: the Exec pushes new rules to the max and the Court trims back.

Surprised to see McCain side with Bush on this one.

Talking to Iran

OP-Ed: “The Problem With Talking to Iran,” by Amir Taheri, Wall Street Journal, 28 May 2008, p. A17.

OP-ED: “How to Have Successful Negotiations,” by Dennis Ross, Wall Street Journal, 24-25 May 2008, p. A11.

OP-ED: “It’s All About Leverage: Countering the strategy of Iran & Friends,” by Thomas L. Friedman, New York Times, 1 June 2008, p. WK12.

Great piece by Taheri distinguishing between Iran-the-revolutionary-movement and Iran-the-nation-state.

Iran-the-movement has been a colossal failure: not delivering at home and not spreading effectively anywhere else—save where the Iranians buy loyalty from those with fewer options than they have.

Taheri points out the dichotomy nicely: some states, like Iraq, are able to deal with Iran-the-nation-state on a host of issues, but with the United States, we remain trapped in battling the revolutionary movement because that dynamic suits the mullahs’ purposes best (and Bush-Cheney’s).

The thing is, you never really defeat the revolutionary movement, you simply get the nation-state to rein it in on its own, because there are better deals to be made.

For now, with Iran, all those better deals run eastward, with states that currently have no ambition to rein in its behavior (just not their definition of a rising great power).

Taheri makes fun of the idea of measly carrots being contemplated: spare parts for this and that. Granted, so long as we elevate Iran-the-revolutionary-movement to the status of Nazi Germany, that does seem weak. But the question begs: why elevate this crappy revolution so? Simply because Ahmadinejad shoots off his mouth?

To me, Iran’s much like the terrorism threat in general: this is all we’ve got left to worry about. So yeah, deal with it, but don’t inflate it beyond all measure, including plans for missile defense in Poland. To me, that’s just greedy programs of record looking for problems to solve, which is pathetic given our casualties in Iraq and Afghanistan.

Yes, Iran “meddles” in these places. Duh! They’re right next door!

You put a neighbor in play with tens of thousands of your “meddling” troops and you expect Iran to sit back? Our expectations here are stunning, given our bellicose rhetoric.

Ross’ point is somewhat better: don’t reward nonstate actors but don’t cut yourself off from dialogue with state actors—just because they do things you don’t approve of. When push really comes to shove, you can always act, but short-circuiting dialogue by—again—preemptively making Iran the equivalent of Nazi Germany or—better yet—the entire Soviet Union (McCain) is silly.

We’re perceived as weak right now by Iran, as Ross and Friedman argue, so talks in our current state of weakness won’t go anywhere. We’ve made our beds in the region and we’re stuck in them for now, and that tie-down impresses no one, so we get a lot of disrespect in return—going all the way back to Katrina.

Don’t want to be fielding so much disrespect? Well, then we gotta build back up our respect in this world, and that won’t happen by making bold threats we can’t follow through on. Hell, that’s what Israel is for right now.

Can we get leverage, as Friedman puts it, quickly? No. All we can do quickly is de-escalate the rhetoric and, in my opinion, stop acting like Iran is the mother of all regional threats. I mean, that sort of myopia didn’t get us solid decision-making on Iraq, so why assume it would work this time with Iran?

Once de-escalated, then we need to approach the situation slowly but surely, building bridges where we can and signaling firm resistance where we must—you know, just like we did with the Sovs.

Ah, but the Iranians are “crazy.” I forgot.

Ever think that’s a bad fallback position? Calling your enemies “crazy” because they want things you don’t want them to have?

Chavez backs off—a triumph of intell?

ARTICLE: “Venezuela’s Chavez Urges End to Colombia Insurgency: In Sharp Reversal, Guerrillas Are Asked To Release Hostages,” by Jose De Cordoba, Wall Street Journal, 9 June 2008, p. A6.

It is an interesting story: FARC’s number 2 guy is killed in March and that yields a treasure trove of computer files linking Chavez to FARC.

Not too much later Chavez has his reversal.

Finally, the right kind of connectivity on Cuba

ARTICLE: “Bush to Let Americans Send Cellphones to Cuban Relatives to Force Leader’s Hand,” by Sheryl Gay Stolberg, New York Times, 22 May 2008, p. A15.

Simple and connecting and betting on all the right human impulses and needs, making it a good move by Bush & Co.