Where have I seen this before on energy?

ARTICLE: “As Profits Surge, Oil Giants Find Hurdles Abroad,” by Jad Mouawad, New York Times, 11 May 2006, p. A1.

Oil prices are up primarily because global demand continues its rapid trajectory thanks to the emergence of the New Core and the huge expansion of the global economy over the last generation (to include a global growth rate right now approaching a whopping 5%). The media will never give you that explanation, though, because it’s a one-time story. Better to say it’s all about supply and jitters and wars in the Middle East, because that’s a story they can write over and over and over again.

Right now, with these high prices that won’t go away any time soon, we see a resurgence of nationalism in the Gap and New Core Russia. Putin, at least, has a plan for diversification and downstream acquisition over time, and yes, we’re seeing more intelligent responses from certain Gulf states, but expect most of this nationalistic surge to be about as strategic in its thinking as your average lotto winner (to wit, Bolivia, which is well on its way to scaring most Brazilian investment out of the country, which should help development a whole lot there).

So Yergin has it right in this article (when does he ever get it wrong?): when prices are up, governments and their NOCs (National Oil Companies) hold all the cards and when they come back down, those same governments open up to foreigners. We saw this dynamic across the 1960-70s (nationalism) and 1980-90s (opening up).

The problem for the producers this time is that the global economy probably isn’t up for another round. Instead, we’ll see this market dynamic naturally push the Old and New Core further and faster down the carbon chain in the direction of renewables, nukes and hydrogen.

Way back when we burned wood, and released lotsa carbon. Then we moved onto coal, and released a bit less. Then oil, still less. More and more gas, still less. Each time we move on it’s not because of supply limits. It’s because we see a better deal economically, when all the externalities (like pollution) are considered. Nationalism in the energy sector is a big externality (i.e., pain in the ass). The more we see of it, the more we’ll see countries move along, like Brazil did so patiently on sugar-cane ethanol over the past generation.

The more advanced countries opt out of this cycle, the more the “all-powerful” producers will be left behind economically in coming years.

Ah, but you’re talking the long run and we’ll all be dead! Not that long of a long run. I remember being a teenager in the 1970s and wondering if the whole world would go to hell in a handbasket because OPEC was controlling everything. Didn’t take long for that worm to turn (my college years).

The problem we face now (the far larger Core of globalization wanting far more energy) is a problem of success (we won the Cold War and expanded our economic universe) not of failure. So the oil producers get another swing at the plate--big deal!

Some will be smart enough to walk away from this period stronger (like Russia), most will not.

But the global energy market and globalization in general will simply move beyond.

Hispanics go mainstream faster than expected

ARTICLE: “Analysis finds boom in Hispanics’ home buying: Low interest rates, flexible loan rules contribute to spike,” by Haya El Nasser, USA Today, 11 May 2006, p. 3A.

Top names for home owners in 2000 are Smith, Johnson, Brown, Williams and Miller. In 2005, Rodriguez replaces Brown (don’t go too far with that one …) and Garcia subs for Miller (take that, Sam Huntington!).

Previous articles on the mid-decade estimates of census pointed out that the bulk of Hispanic growth is coming from babies being born here, not immigration, and yet past articles have pointed out that kids-per-Hispanic-family are plummeting as incomes rise.

Now we see what also happens as income rises: they buy houses. Now, four Hispanic names are in the top-ten of homeowner registries, compared to just two in 2000.

Hispanics are also expected to make up 40% (!) of first-time homebuyers over the next 20 years.

So how long before the Hispanics start becoming a huge force in national politics? How soon til that first Hispanic president or VP?

A lot sooner than you think.

The scarlet letter from Tehran

ARTICLE: “U.S. disregards Iranian letter: First overture since ’80 doesn’t address nukes,” by Barbara Slavin, USA Today, 9 May 2006, p. 1A.

ARTICLE: “Iranian Letter: Using Religion To Lecture Bush,” by Michael Slackman, New York Times, 10 May 2006, p. A1.

ARTICLE: “Letter to Bush reflects Iranian leader’s mind-set,” by Barbara Slavin, USA Today, 10 May 2006, p. 9A.

ARTICLE: “U.S. and Europe Plan New Offer To Entice Iran Away From Arms,” by Steven R. Weisman, New York Times, 10 May 2006, p. A10.

ARTICLE: “UK, Berlin and Paris offer Iran new deal,” by Mark Turner, Daniel Dombey and Frances Williams, Financial Times, 10 May 2006, p. 2.

ARTICLE: “Tehran looks to Muslim world for new friends,” by Shawn Donnan and Gareth Smyth, Financial Times, 10 May 2006, p. 2.

COLUMN: “Ahmadi-Nejad makes another move in an Iranian game of chess,” by Quentin Peel, Financial Times, 10 May 2006, p. 2.

ARTICLE: “Bush Says Iran Leader’s Letter Fails to Address Nuclear Issue: A communication is dismissed as not a serious diplomatic overture,” by Christine Hauser, New York Times, 11 May 2006, p. A7.

ARTICLE: “Indonesia Offers to Mediate Talks With Iran,” by Ellen Nakashima, Washington Post, 11 May 2006, p. A24.

Some response would have been nice. I mean, I know Don Rumsfeld “doesn’t do diplomacy,” but why should that apparently be the case with Condi Rice as well?

I mean, the first direct message in 26 years and no one can pick up the phone?

You have to wonder who’s kicking whose ass in diplomatic circles right now. Ahmadinejad is working global opinion, while the Bush White House can’t even line up the Europeans.

A couple of months ago Iran agrees to direct talks on Iraq. Where has that gone since?

Three years ago, according to a former Iranian ambassador to France who participated in the effort, Iran signaled a willingness to pursue an entire agenda of talks, to include nukes, terror, the Arab-Israeli conflict. But according to Flynt Leverett, a former NSCer and Iranian expert, the Bush White House blew that entreaty off just as easily as it dismissed this one.

Leverett, writing in the NYT a while back, also said the Iranians approached the U.S. soon after 9/11 about possibly helping with the takedown of the Taliban. The Bush White House blew them off then as well.

So let’s see: help on Afghanistan, help on Iraq, help on Israel, help on terror, and help on nukes. If we had achieved anything in any of those realms, think we’d be in a better position today in the Middle East? Two-thousand-plus dead American soldiers makes that a question worth asking.

Ah yes, but we are told by White House strategists that our policy to date on Iran has been “all carrots and no sticks.” We take down regimes on their east and west, put them on the “axis of evil” list, talk openly of regime change, invasion, and possible use of nukes (and yes, I consider it “openly” when Seymour Hersh finds out) against them, and our policy is truthfully described as “all carrots, no sticks”?

Ahmadinejad is playing the Bush Administration like a guitar.

We don’t need psychiatrists decoding his head. I’d like a nice reading on Dick Cheney’s.

We are losing this war of words and perceptions. The Bush post-presidency, now closing in on its first anniversary (Katrina was its start), is becoming a serious strategic liability.

Bush says he won’t answer the letter because it’s not a serious offer of diplomacy. Well, Indonesia’s new president has made such an offer. Ahmadinejad is in Jakarta working out a refining deal (my motto on today’s oil market: amateurs talk exploration, professionals talk refining), so Yudhoyono (former general who did a nice job on the Aceh recovery and rebuild) obviously has a stake. But duh! Who do you want working the issue? People with serious stakes? Like the Indians, Chinese, Indonesians? Or people who’ve lost all points of leverage thanks to decades of non-engagement (otherwise known as us)?

The EU wants it SysAdmin force

ARTICLE: “Europe to consider plan for disaster relief service,” by George Parker, Financial Times, 10 May 2006, p. 4.

The Department of Most Everything Else (okay, so a focus on disaster relief) may be coming to the European Union, if the French (!) have their way.

Hmmmm.

The European Union should set up its own international rescue service to deal with disasters ranging from tsunamis to terror attacks, according to a plan to be discussed by EU leaders at a summit next month in Brussels.

The summit will consider plans for a multinational disaster relief force, with a command centre in Brussels and a training centre, under proposals drawn up by Michel Barnier, the former French foreign minister.

Mr Barnier believes the “Europe Aid” force will be a potent sign to citizens of the relevance of the EU, whose declining popularity was underlined by last year’s French and Dutch No votes to the proposed constitutional treaty…

His proposed force would be made up of professionals employed by member states, who would be sent to disaster areas “double badged” under their own national flag as well as the EU’s flag.

They would be coordinated by a command centre in Brussels, tasked with preparing contingency plans, analysing risks and overseeing relief operations within the EU and around the world.

Interesting. First, there is no home-away distinction, as same force serves both. Second, Barnier is both past French foreign minister and possibly the next one if Nicolas Sarkozy (pro-American, if I remember) wins the presidency. Barnier envisions an annual budget of up to 100m euros and a training center in place by 2010.

Now for the Department of Everywhere Except Europe…

How many Singapores can you fit in the Persian Gulf?

ARTICLE: “Saudis unveil plans to open up markets,” by William Wallis, Financial Times, 10 May 2006, p. 23.

People like to draw comparisons to the 70s’ oil shocks, but they don’t hold up. The global oil market back then was long-term contracts and very bilateral. Security meant owning the barrel in the ground.

Now it’s very fluid and marketized and insecurity is measured in price fluctuation, not in any meaningful threat of being cut-off by producers (though terrorists still worry). That’s because the oil producers are more politically dependent on their export earnings than we are economically dependent on imported oil.

As I have said many times, what drives tightness in the market right now has less to do with supply than with downstream throughput capacity (refining) and a big uptick in demand, thanks to India and China alone.

Plus, the demographics are very different now in the Middle East, with the youth bulge pushing governments there to open up their economies to job creating investment flows.

So now we have Dubai vying to become the Singapore of the Middle East, plus Qatar, plus Bahrain, and according to this article, Saudi Arabia as well.

So the “Saudi Capital Markets Authority yesterday announced plans to partially privatise the Tadawul All Shares Exchange, the government-owned Saudi stock exchange.”

This move comes on the heels of the government announcing plans to build a new financial district in the capital “as part of a programme of modernisation and expansion of Saudi Arabia’s fast-developing financial sector.”

Here’s the kicker: the new financial center is “intended to operate under regulatory and technological standards matching those in the main global financial centres.” This is what I call synching up your internal rule set with the emerging global rule set, which I shorthand as free markets, free trade, transparency and collective security (notice how I skip the D word).

Since Saudi Arabia is the biggest economy in the region, this market is naturally viewed as ultimately dominating the others.

Interview and PNM review in Chinese

Dejin Su sent me the link to the Washington Observer's review of PNM in Chinese.

He also sent the link to his interview with Tom in Chinese.

Comments from any of you who read Chinese are much appreciated.

A perfect primer on Service Oriented Architecture

PERSONAL VIEW: "The building blocks of a simpler future are in place," by Donald J. Rippert, Financial Times, 10 May 2006, p. 2.

I've been looking for this article for a long time: a simple, direct, easily understood intro and overview of what SOA (pronounced, SO-ah by most, although the use of the indefinite article "an" below suggests the Brits like to spell it out instead) really means. It is a crucial construct and development in the IT world that makes possible what we do in Enterra with regard to rule-set automation.

I am going to quote at length here:

Imagine a future where IT systems are not created by computer analysts speaking the languages of Java and C but instead by business managers speaking the languages of supply chain, customer service or product development.

It is a future made possible by Service Oriented Architecture (SOA)--an evolution in the way enterprise IT systems can be built...

Today, businesses either build and maintain custom applications (such as invoice processing or personnel systems) at great cost, or they conform their business processes and organisation to pre-packaged software applications.

Both of these approaches have helped automate business processes but have become operationally and intellectually threadbare in recent years.

The usually pejorative phrase "legacy system" was coined to describe old, custom applications that have grown hard to maintain and almost impossible to replace, whereas packaged software brings its own set of challenges since modifying it to meet the needs of a particular business is expensive and risky...

With an SOA, business applications are constructed of independent, reusable, interoperable services that can be reconfigured without vast amounts of technical labour...

The fundamental building blocks of an SOA are web services... An SOA is a collection of web services brought together to accomplish business tasks (checking a customer's credit, for example, or generating an invoice)...

Because these services are accessed through a standard, they provide unprecedented flexibility: business processes can be added or altered quickly; software applications can be integrated easily.

Because the services can interact with systems outside a single organisation, they provide the ability for companies to collaborate with customers and suppliers. And because services are simpler than hard-wired applications, they lower maintenance costs...

Heard it all before? You probably have. People have been talking about taking the programmer out of programming for decades. So what is different now?

In a word, standards are what set SOA apart from previous generations of integration technologies, which were largely proprietary to each vendor. The standards behind SOA have been around in some form for a few years, but they are just reaching maturity...

...perhaps the most compelling impact of SOA is how it stands to rewrite the rules on IT governance and organisational structure. In most organisations, IT managers tend to be linked with the specific applications they support. Because SOA delivers the promise of solutions that transcend lines of businesses--and the organisations themselves--IT managers , newly decoupled from applications they manage, will have a broader view of the potential they can deliver.

Once IT speaks the same language as business, it will be primed to design services that help companies bring distinctive capabilities, products and services to market quickly.

The article then goes on to describe the "journey" of SOA adoption as roughly 4-5years in length and outlines some of the key challenges and decision points.

Me? I read this article and got SOA fixed in my brain in a way that hearing about it from Steve and a host of others over the past 2-3 years never quite seemed to drive home.

That's not a crack against all those people who tried mightily to educate me over the years. I'm just that kind of learner: I need to hear things described again and again and then down the road, if I come across the right written description, it finally goes "click' for me, and then I have it forever and it's in my toolkit.

What is so cool for me on this is three-fold:

1) I now get Enterra that much better in terms of how our products excite IT professionals so, plus the whole timing of the market issue (Enterra's stuff is made possible by our own patented technologies + the rise of SOA--explaining the "right here, right now" appeal we possess for big companies looking to partner with us.)

2) SOA is like the purest expression of IT's emerging role in globalization: Gap countries don't need big legacy systems to sign on; they can take advantage of web-based services to wire themselves up to the GIG (global info grid) at far lower costs and complexity. What we seek to offer via Development-in-a-Box, then, is that sort of simple, direct, clean, rules-defined connectivity for the economy, government and society as a whole. We say, there is a SOA that defines the global economy, or more to the point in my vision, one that defines the Functioning Core of that globalization process. If you want to join that Core in the fastest, easiest way possible, here is the preconfigured package of templates that allow your state to get wired up in terms of trade connectivity, info connectivity, security connectivity, healthcare connectivity, energy connectivity, etc. We'll give you those templates (both the hardware and software) as part of this reconstruction/recovery package, because we know we'll move you up the connectivity chain fastest and most easily this way, thus empowering your people most rapidly, and allowing our economies to tap your cheap labor and resulting purchasing power also most rapidly. You win, because you pull yourselves out of whatever conflict/disaster/failure/poverty kept you down before, and we win in three ways: 1) we don't have to come back again and intervene; 2) we've just created a virgin market that benefits us economically; and

3) by extending globalization's SOA, or the Core's network of standards and rule sets, we extend transparency and security and reduce the off-grid, ungovernable areas that define the operating domain of bad actors in general and transnational terrorists in particular.

Now, you may think I'm getting way too excited about SOA, but I'm not. I'm just exhibiting the joy that is horizontal thinking: I now feel like I have this huge allied force on my side that's called the SOA commnity in the IT world, and knowing that they represent the wave of the future simply makes me that much more optimistic in my quest to change the world for the better and end war as we know it.

And now, here's the rest of the story: the author of the piece is Donald J. Rippert, CTO for Accenture.

Don reads my blog. A while back I ripped the Redskins in the blog. Don emailed me a rather challenging email on the subject. I replied to the effect, "who the hell are you?" He said, "I'm the CTO of Accenture." To which I replied, "Let's do lunch!"

We did, with Steve in attendance, and what seems to be a beautiful strategic alliance is now in the making between Enterra and Accenture, in large part because Don sees the potential for our collective breakthroughs in the area of SOA.

So pretty cool, huh?

Here I am in first class on a US Air flight from Tampa to DC (Steve got me bumped up on his miles) and so I pick up a slew of papers (USA, NYT,WSJ, FT) and, reading FT first, I come across Don's most excellent piece, and all of a sudden, all those times Steve has spoken about Enterra embedding automated rule sets into the DNA of a company by spreading them throughout the SOA--SNAP!-I get it at a whole new level, simultaneously getting Steve's deep passion for the Development-in-a-Box concept as the private-sector's big contribution to shrinking the Gap. I also now get Steve's argument about building into the GIG all sorts of security so that what you end up with are something like Lego blocks that you can mix and match--and give to allies AND leave behind for indigenous forces to use following an intervention.

And to top it all off on a personal note, Steve and I are having dinner with Don tonight, where I can both congratulate him on this great piece and rag him on Favre's decision to play another year!

Nice way to start the morning...

Core/New Core space combine?

Reader JTH sends in the following link from Aviation Week: Coop Op (subscription required). The lead in: 'China's progress in space and NASA's new exploration policy might be ingredients for space cooperation between Beijing and Washington.'

Tom's comment:

Very encouraging to see. Notice how this stuff comes naturally to USG bureaucracies--both civilian and military commands in the field (like PACOM) and yet is so automatically repulsed by the administration's China hawks.

The policy disconnect on China ebbs and wanes. You can call it hedge strategy or good cop/bad cop. To me, it's the lack of strategic direction, so it's every agency for itself.

TPMB Book discussion

Remember when Richard D invited those of us in the Charlotte, NC area to get together to discuss Tom's books? Well, we did Saturday, May 6th, and here are the pictures to prove it!

We met at his and his wife's beautiful home, shoehorned between the golf course and the Catawba River. It was an amazing day for kicking around TPMB theory on the porch.

For some reason, all of the pictures depict me holding forth, (though only left-handed in the last one) with exposed legs. ;-)

I had no idea going into this that we would have such a wealth of experience represented by these retirees: a couple who had worked with USAID in Russia, Moldova, and Poland; a couple who had worked with Royal Dutch Shell, Gulf, and Chevron; career Navy pilot then Beltway Bandit; a community college president who had served in the Navy and Army Reserve; a Wisconsinite and LA surveyor; a Special Forces widow; a career Air Force man with stints at SAIC and OFT; an Indianan Endocrinologist and AF flight surgeon; and a Sandia Labs scientist who worked on 10 megaton weapons systems followed by computer software entrepreneurship. We had a great discussion.

And, after the cocktails came out, I drank Scotch on the rocks in honor of Tom. ;-)

What a difference...

Sitting here at this conference, I find myself wishing I were home, I just love that house so.

Last year when I've been on the road, I was more than fine with trips dragging out, because I hated that apartment and all the tension it caused within our ranks.

Jerry, my younger son, says every time we drive by the old apartment complex, "Yes, we thought we had to live there forever. But we were lucky and could move into our great new house."

Indeed. Now, there truly is no place like home.

Short cuts on conversation: the power of the blog

At a gathering like this, I bump into that weird reality where I meet people who read the blog and feel like they know me quite well, when, in most instances, we've never met.

So you walk down a hall during a break and someone blurts out, "Hey, you've got Favre for another year!"

And without losing a beat, I just beam back, "Maybe two!"

End of conversation.

Good EUCOM example of 3-Sigma mil-mil cooperation

Presentation by European Command officer describes effort to wire up the African Union's militaries/peacekeeping forces through simple installation of HF nets and basic VSAT connectivity.

Look Ma! No Star Wars required!

A simple 3-Sigma aproach: we maintain and they operate and the GWOT's nets are extended.

What happens? We know more about what goes on in the AOR (area of responsibility for EUCOM), and the locals start networking horizontally, teaching one another and realizing the commonality of the problem set.

This is serious Sun Tzu, or "Phase 0," as EUCOM likes to call it. Very encouraging.

Good lesson on port security, yes?

Reviewing the latest review: Blueprint for inaction?

Max Borders of TCS Daily has a critique of Tom: A Blueprint for Inaction?

Tom's comments:

No offense to Max and the cutesy title, but the critique amounts to: this is really hard to pursue when you involve international financial institutions like IMF and the WB as currently configured and operated.

Point taken. New rule sets required.

Borders is right on this, for example: we turn naturally to our closest allies for trickiest work of institution-buildling, like rule of law. Where we turn logically to New Core (as I note in my current brief) is more in the simpler, less elegant, 3-sigma-like solutions on rapid construction of infrastructure networks. So yeah, assign SysAdmin roles according to the logic of comparative advantage.

So great point by Max, just a bit OBB (overtaken by the brief).

His larger critique that I focus too much on nation-building vice institution-building is at worst a misrepresentation of my ideas (BFA is full of discussion on the latter, which, quite frankly, is logically indistinguishable from the former--to wit, what is a nation but a collection of institutions?) and at best an argumentative ploy (reminding me of the criticism that "Barnett should think less about shrinkíng the Gap and more about growing the Core," to which I reply "Fine, call it whatever you want.").

Borders' points about the complexity of the challenge are all good and his emphasis on, and articulation of, the goals of institution-building are most welcome. But he needs to put his considerable brainpower to the "how' answers, not just the "how not" summaries of past experience.

Max could have reached a lot higher in this piece. He has--I suspect--far more original insight to offer on these tough subjects than he reveals here.

Connectivity is the COIN of the realm

Sitting through panel of warfighters (all services) and hear this one: suicide bombers drive a huge wedge between our troops and the people. Successful counter-insurgency (COIN) is about maintaining connectivity with the masses (lots of mini-forts and humint). Losing the COIN is suffering disconnectedness either through your enemy's kinetics (e.g., bombs) or his follow-on ideological exploitation.

You connect the dots or they disconnect you.

As one guy says, it's more important to know when NOT to pull triggers than when you need to. Trust and credibility are huge assets in COIN.

Think CENTCOM and SOCOM aren't learning in this Long War? Think again.

In my mind, you leave a commander like Abizaid in his current job for as long as possible. Man is creating a huge intellectual wake.

Less Clausewitz, more Sun Tzu.

You can never have enough friends in this battlespace.

I want to be Tom Cruise in "Minority Report"!

No Abizaid - but plenty of good F2Fs with his guys. He pushes them like crazy on connecting the dots: not data-sharing (got that in spades) but knowledge-sharing.

So we talk rule-set automation as a key part of the solution, because a lot of that existed behind all those bits that Cruise was fingering in that movie: as in, a load of if-when rules were triggered before any of that stuff got to his screen (basically, signals of intent processed through the water-logging brainiacs).

In my mind, these guys want to be able to run into the commander's office with one of those wooden balls of knowledge (i.e., an actionable item identified with a high degree of confidence).

This is Enterra's raison d'etre WRT the federal national security sector.

I see Steve and I back here in Tampa sooner than later. Can't wait.

AQAM's razor?

All things being unclear, assume the simplest horizontal connectivity exists among all 4GW enemies you encounter.

Everything is connected. That's the simplest answer.

AQAM: CENTCOM's main enemy

DATELINE: St. Petersburg FL, 9 May 2006

Had hoped for F2F with General Abizaid himself at kick-off breakfast for this AFEI (Assoc for Enterprise Integration) warfighters' conference, but events pull him away.

So end up with his impressive and physically imposing chief of staff, MGEN Lloyd Austin, soon to get his third star and command 18th airborne.

Austin gives a very Abizaid-esque long war view of 4GW against AQAM (Al Qaeda & Associated Movements), saying it "takes a network to defeat a network," and that "in this struggle, military power is less than 10 percent of the solution."

Sounds like you need a SysAdmin force that somehow marries that 10 percent to that non-kinetic 90 percent.

Austin's Q&A was all about the staggering difficulty of interagency, which just gets me warmed up on the larger requirement (emerging) for a Department of Everything Else.

"This manhunt business is awfully tough," says Austin, so sharing actionable knowledge across databases and agencies is EVERYTHING. "That's how we're going to defeat this enemy."

Impatient man, this Austin. Good for him.

The Chinese help us make friendly with Europe

ARTICLE: “Policy Convergence on China: Washington and Brussels Line Up Goals on Trade, Defense Issues,” by Neil King Jr. and Marc Champion, Wall Street Journal, 4 May 2006, p. A4.

ARTICLE: “U.S. Says No to Overnight Stay for Taiwanese Leader,” by Joseph Kahn, New York Times, 4 May 2006, p. A6.

HOT TOPIC: “Sudan: Nexus of Oil, Terrorism and Civil War,” by Lauren Etter, Wall Street Journal, 6-7 May 2006, p. A6.

ARTICLE: “China Breaches Vatican Accord By Naming Two Catholic Bishops,” by Andrew Batson, Wall Street Journal, 4 May 2006, p. A6.

OP-ED: “How rotten politics feeds a bad loan crunch in China,” by Minxin Pei, Financial Times, 8 May 2006, p. 11.

Sad to see that about the only big “security” issue we can reach agreement on with Europe anymore is that we both don’t like New Core powers getting uppity--like China and Russia. So we see a “convergence” on such subjects that’s more rhetorical than real.

As one expert (Adam Ward) on China puts it, the Euros still focus on and fear China’s failure while the U.S. still obsesses on and fears China’s successes. Reminds me of the basic Euro-U.S. split on Russia over the 1990s.

Still, the Bush Administration, for all the bluster and bad spending decisions at the Pentagon, still hews to a pretty sensible line on China: like denying Chen Shui-bian his desired victory lap in the U.S. following the White House’s shabby treatment of Hu Jintao. Instead, the White House welcomes Ma Ying, head of Taiwan’s Nationalist Party, who pushes a less confrontational line with the mainland, as this article notes.

Yes, people are starting to wake up to the notion that we need China across the board: to help us in Latin America, Africa, the Middle East, North Korea. You name it. We need it. China is ready to become a stakeholder in the international community. I just don’t think this administration can move to the dialogue that will uncover that capacity. Probably doesn’t matter though, in the sense that the current Fourth Generation of leaders in China don’t seem up to the strategic dialogue either. Thus alliance advocates on both sides wait for the next generation of leaders to emerge.

China really only gets intransigent on two things: Party rule and Taiwan. That’s where the non-negotiable cuts were made on my Chinese edition PNM (before Beijing U Press reneged on that deal and demanded cuts on a load of everything else).

And the two issues are so often obviously tied together, like this latest tussle between the Vatican and Beijing, two autocratic dictatorships that are like oil and water together. The Vatican can’t wait to meddle in other countries’ internal lives and Beijing’s Party bosses have an obsessive fear of such transnational organizations to begin with.

Me, I would tell Benedict to get the relations (ditching Taiwan is a given) and work the soft-kill of connectivity over time, rather than try any John Paul on Beijing. Reality is that the marketplace has shifted a lot in the past twenty years in such matters. The Protestants and evangelicals are the hot property in China, not Catholics. Benedict should want to get the Vatican in the game, because the sidelines won’t do right now when other faiths are going like gangbusters there.

The Party isn’t going away any time soon, as evidenced by how it keeps its faithful members well embedded within state enterprises that are propped up by bad loans. Minxin Pei, in a great piece that’s also built off his new book (see, I knew he had it in him), notes that non-performing loans in China approach $1T.

How can the regime survive with that amazing exposure? Well, I guess one trillion in U.S. currency reserves helps.

So one begins to see how much the Chinese need us at home like we need them abroad.

Good for the goose, good for the gander

ARTICLE: “Cheney Turns Up Rhetorical Heat on Putin: Vice President Criticizes Moscow’s Political Repression, Energy-Policy ‘Blackmail,’” by John D. McKinnon and Gregory L. White, Wall Street Journal, 5 May 2006, p. A4.

ARTICLE: “Cheney’s Kazakhstan Trip Focuses On Future U.S. Oil Investments,” by John D. McKinnon, Wall Street Journal, 6-7 May 2006, p. A7.

ARTICLE: “Russia’s energy minister hits back at Cheney,” by Neil Buckley, Financial Times, 8 May 2006, p. 1.

OP-ED: “Energy collaboration is free from Soviet ghosts,” by Viktor Khristenko, Financial Times, 8 May 2006, p. 11.

ARTICLE: “Gazprom Outlook Is Looking Bright, Despite Politics,” by Gregory L. White, Wall Street Journal, 5 May 2006, p. C1.

The pot calls the kettle black, in another display of calculated bad cop from Cheney on Russia.

Then the next day he sits down with our favorite Central Asian dictator in Kazakhstan, who’s apparently president for life (remember that when Putin takes the reins of Gazprom after leaving office) and sings his praises, like he’s done with the second-generation autocrat in Azerbaijan (Aliev).

The Russians don’t take it lying down, naturally, pointing out that after decades of giving energy away at below-market prices (for political control, of course), they now charge full-market prices.

Be careful what you ask for…

Again, I am heartened by Russia’s Trump-like push into downstream market segments in energy, something we never see out of the Middle East types. So politicians and strategists will fret over Russia’s growing “power” and “interests,” whereas investors will see a growth strategy that’s working.

Me, I see growing connectivity, not less, and so I approve and remain realistic about single-party states.

I grow less crazy on my Iran proposal with time

OP-ED: “Talk to Tehran: A nuclear Iran will be seriously destabilizing,” by Samuel R. Berger, Wall Street Journal, 8 May 2006, p. A19.

OP-ED: “America must use a wide lens for its strategy on Iran: Any lasting solution to the Iranian nuclear threat has to address the broader interests of Iran, the US, the region and the world,” by Chuck Hagel, Financial Times, 8 May 2006, p. 11.

I make my crazy proposal to “give” Iran the bomb (actually, to accept that Iran is getting the bomb and use that development to strike some new bilateral relationship with Tehran across a host of crucial issues) back in March 2005, and I am virtually alone in that notion.

Now, as the Bush team revs up the Iraq redux on Iran, I start having some interesting fellow travelers making similar arguments for opening strategic dialogue with Tehran.

First, Sandy Berger, Clinton’s old national security adviser:

The U.S. should sit down with those who should share a sense of danger--including, first and foremost, the European Union, Russia and China--and explain that we are prepared for a bold diplomatic move toward Tehran if our allies are ready in exchange to impose tough sanctions on Iran should it reject a reasonable offer.

Once that agreement has been secured, we should publicly announce our readiness to negotiate with Iran on all issues of mutual concern: its nuclear program, to be sure, but also its support for militant groups, its posture toward the Middle East peace process, the future of Iraq and, on their side, the removal of our sanctions, Iran’s integration into the global community and U.S. assurances of noninterference and security guarantees.

Otherwise?

The current approach, Berger warns, risks “rendering the U.S. more vulnerable, not less so; isolating our nation, not Iran; and strengthening the mullahs’ rule rather than weakening it.”

Hmmmm.

But he’s a liberal, yes?

So try out Republican (and 08 prez candidate) Chuck Hagel instead:

America’s strategic policy towards Iran must be comprehensive and include a wide-lens view of Iran and the entire Middle East. It is a strategic mistake to believe the US can successfully pursue a policy that segments Iranian and US interests …

The US should engage Iran directly with an agenda open to all areas of agreement and disagreement. It is only through this difficult diplomatic process that a pathway towards resolution and accommodation can be built, putting the US and Iran, the Middle East and our allies in a position to defuse a potential Middle East conflagration and world calamity.

Otherwise?

Otherwise the U.S. risks becoming “isolated in the Middle East, in the Muslim world and among its friends and allies at the UN.”

Hmmmmmm.

Pretty good stuff. Smart guys starting to see the horizontal picture when too many self-styled strategists and journalists (often, one in the same) can imagine only the vertical escalation.

Makes me glad I reiterated myself in that recent Knoxville News Sentinel column. The original Esquire piece was selected for a compendium of “best American political writing” for 2005. Perhaps it makes even more sense in 2006.