Putin's straight talk on taxes and property rights

■"Putin Tells Business to Get Used to Paying Taxes," by Erin E. Arvedlund, New York Times, 17 November 2004, p. W1.

Putin is preaching a new sort of quid pro quo. In the last decades of socialism in the Soviet Union, it was said among the masses that "we pretend to work and the state pretends to pay us." I like to describe late Brezhnevism as "the state pretends to rule over us and we pretend to obey."

Well, Putin's proposing something better, something along the lines of "you pay taxes and the state will respect your property rights." Sounds pretty good, huh? Not exactly the return of authoritarianism.

This is my notion on Russia's "progress": so long as Putin doesn't reinstitute vertical control over the economy, life, liberty and the pursuit of happiness will improve over time. His recent reinstitution of vertical control over the political system tells us little of Russia's potential future evolutions, other than Moscow believes in a Go Slow approach on politics, much like Beijing does.

This is not a bad thing. In fact, it's probably a very good thing. As Putin declares, "Fear in unproductive." To which I add, business likes transparency and certainty.

Putin is moving hard to make both happen in the economic and legal realms, and he needs to hoard a certain amount of political power to push all that change through over the long haul.

As always, we need to be patientóand largely ignore the panicked cries of former Soviet experts on the former Soviet Union, for, as a great leader once said, "We have nothing to fear but fear itself."

Just think of Putin's version as a Globalization Era updating of that classic phrase.

In ten years, globalization won't feel like Americanizationóthanks to the movies!

■"What Is a Foreign Movie Now?" by A.O. Scott, New York Times Magazine, 14 November 2004, p. 79.

This is a big theme of mine: in ten years time it will be impossible for the world to keep pretending that globalization equates to forced Americanization (otherwise known as that dumbass McWorld theoryóas is the case of most diagnoses, it arrives on scene just as it becomes obsolete). Our cultural content dominated Globalization II (1945-1980) because we were number 1 without a doubt in the scrawny West that existed through that time period. Our cultural content still seems dominant through Globalization III (1980-2001), because the biggest players were still getting their acts together in terms of internal integration (Europe) and joining the global economy (e.g., China, India).

But in Globalization IV (2001 and counting), we will witness the rise of numerous key cultural content pillars, such as the European lifestyle (or dream, as Jeremy Rifkin calls it), Japanese cool (check out what your kids all seem naturally drawn to, and you'll find it's overwhelmingly Japanese in origin), and Chinese hipness (isn't China becoming the center of damn near everything on the go-go?).

Hollywood supposedly dominates the global marketplace for movies, just like the NBA dominates global basketball (and yet seems to be full of more foreigners than you can count), but that chimera is rapidly disappearing thanks to rising competition from the world over. Today, it's getting really hard to define exactly what is a foreign film?:

It is not hard to imagine a future n which an American suburban marquee will boast a Chinese martial-arts picture, a Korean action thriller, a Mexican cop drama and a French romantic comedy.

Actually, that future is pretty much already here, depending on the taste of the movie house you may frequent.

Among the harbingers of that future are the domestic box-office successes of movies like "Crouching Tiger, Hidden Dragon," "Amelie," and last summer's "Hero." Of course, if you count remakes, homages and rip-offsóretooled versions of Japanese pictures like "The Ring" and "The Grudge," say, or even Quentin Tarantino's "Kill Bill" moviesóthen that future has long since arrived.

And yes, I do count all these films, most of which we already own on DVD.

What is the emerging theme of this global cinema?

A defining modern moodóone that is often evoked but hasn't been adequately been namedóis the anxious, melancholy feeling of being simultaneously connected and adrift. In a recent essay in Salon, the film critic Charles Taylor identified this conditionó"being in a world where the only sense of home is to be found in a state of constant flux"óas a central motif in movies ranging from "Lost in Translation" to the films of cinephile cult figures like Tsai and Wong Kar-wai [two up-and-coming Asian filmmakers].

To me, these are the movies that ask the question, "How fast is too fast or not fast enough?" The answer to that question is what will constitute the emerging "third way" between America's Go Fast ideology on globalization and Europe's Go Slow.

I look forward to all the movies still to be made on this subject.

Strutting their stuff in Asia, to the delight of war-planners inside DoD

■"China Now Test-Flying Homemade AWACS: Radar Planes Intended For Use in Taiwan Strait," by Edward Cody, Washington Post, 13 November 2004, p. A19.

■"Japan Protests To China Over Incursion by Nuclear Sub," by Associated Press, Washington Post, 13 November 2004, p. A19.

■"Exercise Displays Japan's Ambitions: Seeking New International Stature, Government Steps Away From Pacifist Past," by Anthony Faiola, Washington Post, 7 November 2004, p. A21.

The U.S. Navy has long presented itself as the "glue" of Asia, meaning the "presence" force whose constant loitering in-area and persistent efforts at building up military-to-military ties on a bilateral basis with every possible navy in the region have served to decrease local ambitions for military power, obviated local arms races, and kept a lid on inter-state rivalries. And while that perspective is maintained out there in the field (meaning Pacific Command in Honolulu), let me tell you, the Navy back home seems to take increasing delight in hyping what they believe is the growing threat of war in Asia.

Is there a growing threat? I think there is a Japan and a China that are both committed to having a bigger military role in both the region and the world at largeóones befitting their mature (Japan) and emerging (China) economic clout. I think both militaries, having nothing better to do, tend to get overly excited about one another out of boredom. Other than the threat which is Taiwan's bid for independence, these two states basically have nothing to fight over, unless you're stupid enough to believe one side's navy is going to be able to enforce some claim over undersea oil reserves believed to lie between the two states. Why the two countries would bother fighting over these reserves instead of simply exploiting them jointly, is apparently beyond the military strategists on both sides (clear proof that military strategists the world over tend to plan for war solely in the context of war instead of taking into account the context of everything elseóhere, the growing economic integration of the two states).

Japan is becoming highly dependent on China as a target for production outsourcing as well as a market for exports (China's domestic demand was basically THE reason why Japan emerged out of its long-term economic recession). Meanwhile, China becomes dependent on Japanese investments.

Meanwhile, however, their two militaries seem to delight in dicking with one another like two bored cats with nothing else to do but grab each other's tails. Where is this going? Absolutely nowhere, but it does warm the hearts of national insecurity experts within the naval community, who delight in recounting each and every tail, reminding us all unceasingly, that if we'd just give them the chance, we could find ourselves involved in some really cool wars in Asia.

What can America do to end this shadow boxing? We can involve both militaries in larger means, not to mention better ends. The answer is we need to grab both countries and stick them into an East Asian NATO. We need to harness their energy toward goals beyond just dreaming of idiotic wars with one another.

Until then, naval experts back here will continue to wax poetic about the "possibilities"!

Many articles blogged tomorrow--promise!

Dateline: Portsmouth RI, 16 November 2004

Collected a slew over the weekend, and have a bunch of papers to go through tonight before bed, so I'll be posting a bunch over the next couple of days, along with another PNM review, another profile in a magazine, and the December blurb in Esquire--which included the cover art from the book!

Tomorrow morning is big day in the family (as if the new puppy wasn't straining us already): at 0900 in Newport County Courthouse Vonne and Thomas Barnett re-adopt Vonne Mei Ling Barnett in the state of Rhode Island and the Providence Plantations (yes, that's the state's official name!).

The Pilgrimage to Lambeau

Dateline: Portsmouth RI, 16 November 2004

God I love my my new cell phone! Getting the old one stolen worked out pretty well. The ability to always have a camera with you, plus the opportunity to immediately email a photo file to anyone anywhere is really cool. Mark Warren and I were snapping shots around Lambeau and sending them back to our spouses virtually in real time, which is a neat form of connectivity for someone who can't/doesn't make the trip with you.

Here's a selection from the trip:

Outside the main entrance to Lambeau (into the atrium), Mark Warren stands next to the big statue of Vince Lombardi.

Inside the Packer Hall of Fame, they have a life-size recreation (with statues) of the final play in the famous 1968 Ice Bowl Game between the Packers and the Cowboys (1967 season NFL Championship); this is the line of scrimmage recreated (in portion) just before the final play when QB Bart Starr does his famous sneak behind the block of right guard Jerry Kramer.

Here's the same famous play recreated, with the view being right over the shoulder of QB Bart Starr, a childhood hero of mine.

In a fans section (alright, it's designed primarily for kids!), visitors can re-enact the Lambeau Leap by diving into a pretend stand full of cushion people (Mark Warren snapped this "action photo," as he put it); I say, nice vertical!

My grandfather's plaque in the Packer Hall of Fame, describing him (Jerry Clifford) as "Legal Counsel" and a "Hungry Five Member" who kept the Packers in Green Bay during the lean years and the close calls; he was inducted in 1991.

The view of the opening kickoff from my seats in Section 342, Rows 1&2, Seat 11. I missed the first kick-off, but both teams were kind enough to commit off-setting penalties so I could get a good shot on the second try.

University of Wisconsin marching band at halftime; they played in the stands in roving bands throughout the rest of the game--very nostalgic for this Badger alumni.

Mark holding our new Chesapeake Bay Retriever just as we picked Stormy up at the kennel outside Manitowoc and about 30 miles from my birthplace of Chilton WI.

All in all, a very cool trip. It was great to spend so much time F2F with Mark and to have such long uninterrupted conversations (okay, there were 8 passing TDs in the game . . .). My throat is almost recovered from the screaming . . . at the Vikings, of course!

Checking in after the long weekend

Dateline: Portsmouth RI, 16 November 2004

Had a fabulous weekend in Wisconsin. Started tough with impromptu snowstorm that had me driving to Providence airport in near-whiteout conditions at 5am Saturday morning (wrecks all over the place as cars slide out of control). I missed my flight and didn't get to O'Hare until 2pm.

Mark Warren waiting for me there, a bit sleepy himself, so we drive up to Oshkosh in lazy fashion, not trying to make Lambeau that day. Instead we chow down at Culver's and I intro Mark to the joys of custard malts.

After a masterful ten hours each of snoring, we hit the road early on Sunday and draw within two blocks of Lambeau by 10am. We park in impromptu lot at strip mall for $10 and make our way to Lambeau. They let us into atrium portion at 11am and Mark and I spend 2 hours at Packer Hall of Fame. Then up to 3rd deck of atrium for beers at bar overlooking the masses while we plot Books #3 and #4, plus discuss article for Feb issue of Esquire.

Game was great. Brett throws first 50-yard-bomb right in our corner to Javon Walker. In all, Brett throws four, as does Daunte. We win with FG as time expires in game--naturally in our "historic south end zone" (remember the Ice Bowl?).

After game we listen to a bit of "5th Quarter" music from U of Wisconsin band (there for game), and then we shop for a bit at Packer Pro Shop. We end our 10 hours at Lambeau by having nice leisurely meal at Curly's Pub up on second deck off Atrium. Get back to hotel about 10pm exhausted and really sore of throat.

Next day up and we drive past my birthplace of Chilton WI on way to pick up our Chesapeake Bay Retriever at breeder's just outside Manitowoc. Then long drive to O'Hare. My plane leaves late, so I don't get Stormy home to the kids in Portmouth until 11pm.

Today at work I had too much to do in catching up to pursue much in terms of reading. I will catch up on news stories tomorrow from road (I head to Fort Leavenworth, KS), but I will post pix from weekend in a bit.

FYI: made the current issue of Esquire (December) in "where are they now?" look at past Best & Brightest selectees. Current issue puts out new slate.

PNM: An Amazon "Top 10 Editors' Pick" for "Current Events 2004"

Dateline: in the basement in Portsmouth RI, 12 November 2004

Finished the Esquire article for Mark Warren today. It rang in at just over 4,000 wordsóby design. Five hundred to open, roughly a thousand per the three main sections (Iraq/Middle East, China/Taiwan, and North Korea), and then 500 to finish. Looking at the piece this morning, I ended up cutting out a lot of parenthetical expressions (something I'm almost compulsive about in first drafts!) that were either too cute (recently, I can't resist jokes about the American Civil War for some reason) or just plain too rude (never make a crack about another person's kids).

Having done the opening, plus the sections on Iraq/Middle East and China/Taiwan, today I wrote the final section on North Korea and the closer. All in all the piece emerged without much effort or angst, which for me is usually a good sign, but Iíll await Mark's verdict tomorrow at O'Hare (we both arrive around 0830). My guess is the usual will happen: he'll cut about 25% and ask me to add in that much new stuff plus another 25% above that. He often rearranges the big pieces in ways that amaze me in the logic revealed (I don't pretend that I "get" myself better than anyone else, only that I write the first draft).

Today was a weird mix at work. First a meeting with representatives from the Office of Naval Research concerning possible collaborations. It was an interesting exchange and then I signed a copy of PNM for one of the visitors, a lady who had arranged my keynote to ONR's 2002 conference, a tale I relate in PNMóby the way.

Then I went out to lunch with a couple of energy experts representing a South African company that's pushing a new form of nuclear technology called Pebble Bed Modular Reactors (a very interesting tale all its own, that I will relate in the future once I peruse the material they left me). They had come all the way up from Washington just to brief me on the company and its work, which was very flattering and a bit bewildering. Their explanation, however, made me feel pretty good: they saw PNM as an overarching strategic concept that helped them link their argument for this new energy technology to sustainable economic development in the Gap, so the book had become a strange sort of marketing tool for them. I mean, if you can use PNM to help sell a new energy technology, then it really is "reproducible strategic concept."

Last up was an almost two-hour phone interview with Alex Steffen of WorldChanging.com, which should result in a substantial posting on their well-traveled site that explores new issues in global economic development.

I will sign off for the weekend now, as I'm not taking my laptop with me to Wisconsin for my Packer weekend trip with Mark Warren. Tomorrow we drive to Green Bay from Chicago and hit the Packer Hall of Fame, plus have dinner at Curly's Pub in the stadium. The game on Sunday doesn't start until 3pm, which is nice. Monday, on the way starting back, we pick up our new Chesapeake Bay Retriever female puppy at a kennel just south of Green Bay, quite close to where I was born in 1962 in a modest town called Chilton. Since my family moved from Chilton only a few months after my birth, I don't have any memory of the place, and yet it will be nice to return once again. I'll have to take a picture with my phone!

Here's the happy news I got from Putnam this week: every November Amazon posts a host of Editors' Picks of best books for the year as part of their marketing for the holiday season (ka-ching!). There's a general Top 50 and then a slew of Top 10 for a variety of genres. PNM made the Top 10 list for Current Events, which was, as you might imagine, a hotly contested group in the news-intensive year.

Here's what Amazon said in their posting found here:

Best Books of 2004
Top 10 Editors' Picks: Current Events

Current events in 2004 meant one thing more than anything else, and our list of the year's ten best is full of accounts of what led up to the Iraq War, the war itself, and its aftermath. At the top is the most authoritative of these, Bob Woodward's Plan of Attack, in which the legendary investigate reporter used his unprecedented access to the tight-lipped Bush White House to paint a picture of the preparations for war so balanced that Republicans and Democrats were each claiming it for their own cause. See more editors' picks and customers' favorites in our Best of 2004 Store.

Actually, the fact that my book's not exactly about the Iraq War (although I do talk about it at some length) makes it's inclusion a bit more impressive, but as you glance down the list, really only about half the books center on Iraq. I tell you what, though, I dare you not to name PNM as the most optimistic and forward-looking of the ten books on this list!

Here's the list in full:

1. Plan of Attack, by Bob Woodward

2. Ghost Wars, by Steve Coll

3. The Sorrows of Empire, by Chalmers Johnson

4. The Fall of Baghdad, by Jon Lee Anderson

5. A Pretext for War, by James Bamford

6. The Pentagon's New Map, by Thomas P.M. Barnett

7. The End of Oil, by Paul Roberts

8. The Outlaw Sea, by William Langewiesche

9. Power, Terror, Peace, and War, by Walter Russell Mead

10. Nuclear Terrorism, by Graham Allison

Of course, when you look at such a list, the first thing you notice are all the books that didn't make it, but somehow managed to get reviews in the New York Times or Washington Post, neither of which occurred for PNM. In fact, I'd almost bet that PNM is the only book on that list not to be reviewed by both papers, which makes its inclusion here all the more important for sales.

After C-SPAN, I guess I'd have to say I like Amazon a whole helluva lot!

Speaking of C-SPAN, it looks like they may run either the BookNotes or the American Perspectives taping of the brief again sometime before Xmas. We are negotiating the idea of a live, in-studio call-in effort involving me immediately after the prime-time broadcast. Since I'll only be in DC on the evenings of the 5th, 6th, and 7th of December between now and Xmas, one of those nights may well be the date. Then again, a special trip may be in order, although I hope not, since I am rather sick of traveling.

Hmm, that reminds me. I need to go upstairs and pack for my Packer weekend. Up early for the plane.

Wish me luck. I am on a two-game losing streak at Lambeau (Eagles last year on MNF game I attended with brother-in-law Todd and Sunday Giants game this year that I attended with my Kevin). Warren better be the charm!

See you Tuesday.

When it rains, it pours

Dateline: above the garage in Portsmouth RI, 11 November 2004

Halfway through writing the Esquire piece and it's turning out better than I had hoped. Mark Warren and I spoke about it at length last night before I dived in this moring. Will get most done today before return engagement with kids at "The Incredibles" (yes, it's that good). I had no idea on how to structure piece, but just like when I wrote the book, I started with a long shower until an opening line crept into my brain.

Then I ran to the office above the garage, banged it out, and followed where it took me. Three sections soon revealed themselves (after a 500-word opening), so it's a matter of banging them out one by one (one down, two to go). The big thing for me is: it's unfolding just as I imagined it would. I can tell I was getting pysched for something big, because I kept having trouble falling asleep before 1am all week, even as I continue to pop out of bed at 6 or 7am. Whenever that happens, I can tell a big chunk of writing is trying to escape.

I'm moving, I'm grooving, I'm dancing to the beat . . ..

That's just one thing on the plate this holiday. Others include negotiating with a cable news network program about an upcoming series on the future of war. Apparently the reporter in charge of that one really digs PNM, so we plan on making beautiful video together.

Then there's my plot to return to C-SPAN!

Then it looks like I might have found myself the right speaker's bureau to represent me.

Then there's Amazon picking PNM as one of the top-ten "current events" books of 2004 (more on that one tomorrow).

Then there's the possibility of the Packers beating Minnesota on Sunday in Lambert (oops!) . . . I mean Lambeau Field (with me and Mark Warren in attendance) and perhaps finishing their leap-frog into a first-place tie with the Vi-Queens!

Then there's picking up the new puppy on Monday south of Green Bay.

Then there's my son Kevin who wants to surf his favorite comic strip sites, so I'm outta here.

My first experience giving testimony

Dateline: Hyatt Crystal City, Arlington VA, seguing into a SWA flight from BWI to PVD, 9 & 10 November 2004

The testimony went well yesterday. You have the text already. I pretty much stuck to it, giving the effort my best Dick Cheney imitation (there's just something about reading a text while sitting down instead of my usual walking-around-with-no-notes style that brings out the scary, deep voice in me). I easily surpassed the ten-minute rule (we were warned by lights), but the chairman of the commission told us to ignore them.

I went first out of a panel of three experts. I had the highest data bit flow, and probably made the most unusual statements, but I decided, as I always do, to just do my thing and not worry about trying to sound like the accomplished expert on the topic at hand (exactly, who are basing realignment experts, anyway?).

The Overseas Basing Commission is made up of six members, one being the chairman. After the three panelists all talked their respective 15 minutes, it was on to the questions. Each commissioner asked 1 to 2 questions, and we all took a whack at answering each. I love the Q&A time, because that's when I like to try out my newest material. A total of 8 questioners later and we were done 120 minutes after we started. I snapped some photos of the neat, wood-paneled hearing room in the Dirksen Senate office building (an oldie but goodie) as a keepsake, using my new cell phone, and then I was off.

This morning I spent some time at the Cato Institute with Brink Lindsey, who is the new VP in charge of research. He's a fan of PNM, gave me a copy of his most recent book, and we discussed the possibility of future collaboration. Felt a bit weird to be at Cato for the first time, but I can get used to libertarians.

So, I survived my first time testifying. I wasn't under oath, because this wasn't a congressional or senate hearing, but only one conducted by a congressionally-mandated commission. Still, it felt good to get my feet wet, and I was pretty sure I didn't make an ass out of myself. So I was happy to get the experience under my belt.

Here's the catch that catches me up on a host of papers stretching back a week or more, plus some stuff readers sent me:

■ What comes next for the second Bush Administration

■ The solution set on Iraq

■ What Iran will not be denied

■ The opportunity presented by Arafat's demise

■ Why do we let Pyongyang and Taipei run America's relationship with China?

■ The Core needs good news on both Turkey and Pakistan

■ China: every which way but down

■ India: almost too high-tech for its own good

■ The Old Core will redefine old age

■ The best allies are incentivized allies

■ The right and wrong ways to build connectivity

■ A man who dreams big

■ Hernando de Soto would be proud, Brazil!

■ Planning the SysAdmin follow-on from the start

What comes next for the second Bush Administration

■"Early Betting Is Bush's Foreign Policy Will Remain Hard-Line: New Faces in Top Positions Could Be Early Indicator Of Second Term's Direction," by Carla Anne Robbins, Wall Street Journal, 5 November 2004, p. A4.

■"The Antiwar Right Is Ready to Rumble," by David D. Kirkpatrick, New York Times, 7 November 2004, p. WK5.

■"President Feels Emboldened, Not Accidental, After Victory," by Elisabeth Bumiller, New York Times, 8 November 2004, p. A1.

The big question is: More of 43 or more like 41? Does George Bush continue in his perceived (and real) unilateralism)? Or does he go more like his father and work to gain broad international acceptance of the slew of new rule he's proposed for international security (preemption being the most radical)?

The reason why I supported Kerry in the election was because I thought he would be better in gaining broad, Core-wide acceptance of the new security rule sets that emergedóalong with this administration's strategic visionóout of the ashes of 9/11. Now we'll never know, so it's really up to Bush to decide what his second term is going to be all about. I don't think he can get very far in the Middle East without internationalizing that effort and creating local ownership of the solution set, which means America would need to find a way to work with Iran and make the Palestinian-Israeli situation calm down dramatically. Otherwise, expect his second term to be consumed with the Middle East.

That would be too bad, because there's better opportunity to pursue lasting change and important, new strategic relationship in Asiaóso long as you see Kim's removal from power as an opportunity and not just a danger to be dealt with. But America is unlikely to get anywhere in Asia without showing a different face in the Middle East, so the two are intimately linkedónot just in terms of Asia's rising strategic interests there but in terms of how the rest of the Core views the goals and strategies of the Bush administration.

A United States that is perceived as being bogged down in the Middle East won't find the deals it needs to make in Asia to lock-in either India or China into solid strategic partnershipsóat today's prices. No, they'll simply starting waiting this administration out, knowing that time is much on their side as their economies become more important to the West as a whole and the U.S. in particular.

Bush is said to be uninterested in the notion of legacy, but he should be, because the discounting on his second term is already beginning in the Republican party. He can either display the zeal required to seal the deal in the Middle East (many deals in fact) or he'll be attacked from within his own party for leading down a pathway with no clear exits but clear long-term dangers for the party beyond his second term.

Bush is right to feel emboldened about his victory, because it was an amazing one, given the sour turn of events in Iraq. He needs to hit the ground running. He needs to secureóearly in his second termóthe things worth securing in the international security environment right now. He's got a good 30 months and then the political process begins to move beyond him, so I hope he's got more ambition in his head than just making sure Iraq doesn't end up looking like a world-class mistake and an international tar-baby he begets subsequent administration.

The solution set on Iraq

■"Bickering Iraqis Strive to Build Voting Coalition: Factions Among Shiites; Top Cleric Moves to Head Off Any Weakening of Majority's Power," by Edward Wong, New York Times, 7 November 2004, p. A1.

■"Evolving Nature of Al Qaeda Is Misunderstood, Critic Says: The administration is accused of not respecting the threat," by James Risen, New York Times, 8 November 2004, p. A18.

■"More Troops for Iraq," editorial, New York Times, 8 November 2004, p. A24.

■"U.S. and Iraqi Troops Push Into Fallujah: Insurgents Dig In; Armored Vehicles Scale Dirt Barriers," by Jackie Spinner and Karl Vick, Washington Post, 9 November 2004, p. A1.

■"In Hideout, Foreign Arabs Share Vision of 'Martyrdom,'" by Ghaith Abdul-Ahad, Washington Post, 9 November 2004, p. A1.

■"Freedom squelches terrorist violence: KSG associate professor researches freedom-terrorism link," by Alvin Powell, Harvard New Office, 9 November 2004.

The Shiite majority knows it has a good thing going in a united Iraq, and the Kurds know there isn't that much they can do about it, except take confidence in their own self-rule of more than a decade. Meanwhile, the Sunni triangle will burn so long as there are any Saddam loyalists still dreaming of power and the U.S. is unable to stop the steady flow of outside terrorist and would-be martyrs.

Local ownership is the key to making Iraq work, not more American troops. We've got to get local players to stand up for the solution sets they really want to see happen, and the keys players in this drama are clear: Turkey and Iran, followed by Syria and Israel.

Michael Scheuer, aka Anonymous, is right about one thing: we'll never be able to kill enough terrorists to rid ourselves of the problem. Islamic terrorism, as represented by al Qaeda is a global insurgency that will die only when it's clear that its aims for the regions of the Gap (it does not pretend to have any goals for the Core, because its leaders are smart enough to know they won't be able to turn back the clock on any states there) are effectively rendered moot by the spread of the global economy and all of the connectivity and individual freedom it offers

Martyrs can only make a statement when their course of action can be argued to be no worse than submission to "Westoxification" and globalization's "evil" embrace. So long as the Middle East remains poorly connectedóthrough a combination of poverty, missing rule sets and bad governanceóthe martyrs will have a reasonably believable story: namely, "our fate is no worse than yours, and ours bring us honor while yours bring only degradation and dishonor."

Countries making the transition from the Gap to the Core, or from authoritarianism to democracy, are most vulnerable to a host of bad security issues. War is more likely, but so is terrorism. But once connectivity is deeply achieved and individuals find themselves confronted with enough options to rule out a sense of diminishing expectations, terrorism's appeal, as well as that of martyrdom, naturally decreases. In fact, it starts to be viewed much like mental illness, as in, "Why would any rational person behave in that fashion?"

It's hard for some to admit but not me: the solution set on Iraq will likely be accepting successes where we can find them and letting those success stories become attractors in the same way that violence today in Iraq seems to attract more of those people willing to engage in it at all cost. The Kurds in the north can succeed, as they've proven in the past, and the Shiites in the south appear to see the opportunity their numbers provide them, so expect them to accommodate themselves to the possibilities of life beyond Saddam. But don't expect anything similar from the Iraqi Sunnis any time soon. Their downward spiral of diminished expectations is common for any ruling elite that's suffered an absolute loss of power (much like the submarine community inside the U.S. Navy), and it won't end until they exhaust themselves in violence to the point where they accept the notion that their only redemption will come through reinvention.

But the rest of Iraq need not wait that long, and the U.S.ófranklyócan't afford to wait that long. The trifurcation of Iraq is coming, and deals are to be made. This is the wiggle room the Bush people have been looking for (if they're smart enough to recognize it) on a host of thorny issues across the region that need to be dealt with in concert with one another. Iraq is the key alright, or should I say the Former Republic of Iraq?

Former Republic of . . . where have I heard that one before? Oh yes, Yugoslavia.

The opportunity presented by Arafat's demise

■"Arafat's No. 2 Is Set to Assume Palestinian Leadership: A former prime minister is seen as a hopeful sign for peace in the Middle East," by Steven Erlanger, New York Times, 7 November 2004, p. A15.

■"Israel, the U.S. and the Age of Terror: An old alliance reaches a critical moment as Arafat passes from the scene," by Roger Cohen, New York Times, 7 November 2004, p. WK1.

Yassir Arafat's desperate hold on life reminds me of the old SNL skits by Chevy Chase where he declared "Francisco Franco is still dead!"

Arafat is dead, and he will remain so, for all practical purposes from here on outóno matter what the condition of the physical body, the political body is dead.

The man who looks like he's locking as Yassir's replacement is almost too good to be true, given his past willingness to entertain the notion that Israel is not the source of all evil and can actually be dealt with.

The opportunity for both Israel and the U.S. could not be greater. Things are up in the air all over the dial in the Middle East, thanks to the Iraq takedown and subsequently messy occupation. There is as much or more opportunity as danger in this environment, and if the U.S. is going to forge a serious solution set for the region as a whole (involving Israel-Palestine, Syria, Iran and Iraq), then our relationship with Israel is going to redefined, because the nature of Israel's security needs to be redefined, as well as our role as its ultimate guarantor.

As with Asia, there are big deals to be cut, if only the second Bush administration displays the same willingness and courage to toss out outdated security rule sets as required.

What Iran will not be denied

■"Will Iran Be Next: Soldiers, spies, and diplomats conduct a classic Pentagon war gameówith sobering results," by James Fallows, Atlantic Monthly, December 2004, p. 99.

■"What the Mullahs Learned From The Neighbors: To deal with Iran, learn from the mistakes in Iraq," by Kenneth M. Pollack, New York Times, 9 November 2004, p. A23.

■"Iran, India Reach Accord to Work On Gas Deposits," by John Larkin, Wall Street Journal, 3 November 2004, p. A12.

■"Iran Claims Draft Accord With Europe On Uranium," by Elaine Sciolino, New York Times, 9 November 2004, p. A6.

All the smart look-aheads on Iran suggest that we've effectively created a pathway dependency: by doing Afghanistan on its right and Iraq on its left we basically okayed Iran's rush for the bomb, whether we want to own up to that or not.

The question now is not how we stop Iran's bomb, but how we make it work for us.

The separate peace's are already being concluded between Iran and Europe, Iran and India, and Iran and China. By giving off the impression that the Iraq takedown was a zero-sum game launched by the U.S for the U.S., we effectively set in motion the hedging strategies by the rest of the Core's main pillars vis-‡-vis Iran. No one to blame but ourselves on that one, so no finger pointing.

But no crying over this spilt milk either. Iran will get the bomb. What we need to ask is: What will Iran having the bomb get us?

Use your imagination. I will, when I write my next article for Esquire tomorrow morning.

It'll be in the February issue, hitting stands just before the inauguration.

My guess is that the title will start with "Mr, President, Here's How to . . ."

Why do we let Pyongyang and Taipei run America's relationship with China?

■"S. Korea Joins China in Criticizing U.S. on N. Korea," by Glenn Kessler, Washington Post, 27 October 2004, p. A18.

■"U.S. North Korea Policy Faces Strains: As Diplomats Look to Revive Talks, Hard-Liners Weigh More-Coercive Options," by Gordon Fairclough, Wall Street Journal, 8 November 2004, p. A13.

■"Powell's Comments in China Rile Taiwan: In Apparently Unintended Remarks, Secretary Says Island Is Not Independent," by Edward Cody, Washington Post, 28 October 2004, p. A18.

■"On Bush, the Communists and Their Foes Can Agree," by Philip P. Pan, Washington Post, 24 October 2004, p. B3.

■"Strait-jacket: December elections could edge Taiwan closer to a symbolic declaration of independenceóand the United States toward military conflict with China," by Trevor Corson, Atlantic Monthly, December 2004, p. 54.

North Korea will be a focus of the second Bush administrationóbet on it. But the neocons need to get far more imaginative in their approachónot with North Korea but with China. Rather than having Beijing talk to us about what we need to do to placate that nutcase Kim Jong Il, we need to be talking to Beijing about what they need to okay his takedownóeither by an "offer he can't refuse" or a coup engineered by those around him through the promise of golden parachutes or a quick-strike invasion designed to get the man himself, along with his WMD.

The U.S. needs to stop trying to work this issue through Seoul, which will never get over its fears on the subject, and instead make the deal through Pyongyang's sole remaining backeróChina. We need to figure out their price and display a firm willingness to pay it in spades. The relationship that needs to be built over Kim's grave is between America and China, with the end result being an East Asia NATO-like entity that locks-in a strategic relationship between us and China at today's relatively low prices.

The carrot-and-stick bullshit is never going to work with Kim, and the conversation with Seoul and Beijing never seems to get beyond their legitimate fears about North Korea's collapse in the face of heightened U.S. pressure. We need to move the conversation to where it needs to be: asking both countries but especially China what it wants on the far side of a Kim takedown and figuring out how best to deliver. Everyone knows what the likely asking prices are. The only question is, How much do we value Kim's removal?

For now, that crazy little man is running the show not just in Pyongyang but frankly in capitals all over the six-nation dial (the six countries that come together over this issue are South and North Korea, U.S., Japan, Russia and China). We are ceding all the initiative to him, as is he's the real issue here, when he's not. The real issue is the future of U.S.-Chinese relations.

We do the same thing with Taiwan: we cede control of the situation to that island and whatever leader it happens to elect. Because of our "defense guarantee" offered decades ago in an entirely different strategic environment, Taipei gets to drive U.S. national security policy toward China on this issue, which is just plain nuts.

The notion that America would sacrifice thousands and thousands of its troops to defend Taiwan from China after Taipei decided that it just couldn't live anymore without the word "Taiwan" appearing in parentheses behind its official name of Republic of China (a notion some experts fear will be explored following the coming December elections) is bizarre beyond belief. Taiwan isn't going anywhere economically except into China's orbit, as is the rest of Asia. That's an historical reality that's unfolding whether Taipei likes it or not. China isn't interested in torpedoing its economic juggernaut in order to militarily threatenómuch less conqueróTaiwan. All it wants is to maintain the illusion that someday the two countries will be joined, even if they maintain completely separate governments and militaries. In short, China wants only to prevent the sense that reunification is impossible, and if that's the price for locking the Chinese into a strategic relationship at today's prices, I say we pay it.

The reality is, when push comes to shove on Taiwan, the U.S. won't be willing to come through on that defense guarantee. We decide when we go to war with other countries. We don't leave that decision to some politician in Taiwan whose dream of national self-actualization could easily end up costing America a huge number of casualties. It just ain't going to happen, and when you slap that operational reality up against the long-term strategic background of our emerging partnership with China on a host of global issues, even entertaining that notion seems rather incredible.

The Chinese leadership (not the people) are happy Bush won, because they see a guy they believe they can deal with him on economic issues effectively. The neocons have shown a willingness in the past to make difficult calls when the time called for it. They better be ready for one over Taiwan, because the scheduling of that call won't be ours to make under the current set of "guarantees."

The Core needs good news on both Turkey and Pakistan

■"At the Gates of Brussels: If Recep Tayyip Erdogan gets his way, Turkey will be more Islamic and Europe will be more Turkish. Both would be good news," by Robert D. Kaplan, Atlantic Monthly, December 2004, p. 44.

■"As Growth Returns To Pakistan, Hopes Rise on Terror Front: Exports, Malls Enjoy Boom, As West Ramps Up Aid; But Will Militants Notice? 'Economics Isn't Everything,'" by Jay Solomon, Zahid Hussain and Saeed Azhar, Wall Street Journal, 9 November 2004, p. A1.

In the first piece, Robert Kaplan does a quick tour of Turkish history and explains why the current prime minister Recep Tayyip Erdogan's moderate Islamic bent, coupled with his Western-style management degree, promises Europe exactly the type of non-radical Islamization it must inevitably undergo:

This December a hesitant European Union will decide whether to open negotiations for Turkey to join. Its hesitancy has legitimate and illegitimate reasons. The legitimate ones center on the difficulty of digesting a country of 70 million peopleóone that is far poorer and more populous than many of the Central and Eastern European nations recently admitted to the EU. The illegitimate ones center on the fact thatówell, Turkey is Muslim. Does Europe want that many Muslims within its community?

The answer should be that Europe has no choice. It is becoming Muslim anyway, in a demographic equivalent of the Islamic conquest of the early Middle Ages, when the Ottoman Empire reached the gates of Vienna. More to the point, Turkey is not only contiguous to Europe but also is already economically intertwined with it. The only issue that remains is whether Europe will encourage Islamic moderation through economic development in Turkey. Though American troops are fighting and dying in Iraq, ultimately the Europeans, because of geography and their own demographic patterns, have more at stake in the stabilization of the region. And the surest way to advance that stabilization is to make Turkey part of Europe.

Never before has the West been so lucky in Turkey as now. The re-Islamization of Turkey through the rejuvenation of the country's Ottoman roots was going to happen anyway: Ataturk's republican-minded secularization had simply gone too far. The only question was whether this retrenchment from Kemalism would take a radical or a moderate path. Erdogan's political leaning suggest the latter. Europe should seize the opportunity.

If I were Bush, I would twist some Europeans arms until they fell off on this issue. But I would make clear to Turkey the quid pro quo: we need them to accept some serious ownership for the Kurdish portion of Iraq. Turkey needs to be the protector and mentor for that territory and its people. The Kurds have a long and very successful economic history within the Ottoman Empire and Turkey, and there is an historic responsibility for Turkey that goes with all that, as well as a real opportunity for Turkey to be recognized as not just part of Europe, but a security stalwart in the Middle East.

Iraq has been and always was a pretend country built by the British, much like Yugoslavia. Forcing the Kurds (20% of the population) and the Shiites (60%) to continue their abusive marriage to old Saddam's Sunnis (20%) isn't going to workóunless the U.S. encourages some serious local ownership of this issue by Turkey to the north and Iran to the South. Entrance into the EU is Turkey's legitimate price tag on this issue. It must be paid.

Over in Pakistan, all that special attention paid by the U.S. (bilateral free trade agreement, tons of military aid and cooperation, rescheduling of debt, quick flows of substantial economic aid) is paying off, as the economy there is booming at more than double the growth rate prior to 9/11. Its exports have doubled over the past six years and its reserves are up four-fold from before 9/11. With U.S. blessing, Pakistan is getting access to international credit in exchange for cracking down hard on the terrorist funding networks and the black markets they leached off of prior to 9/11. All this seems very good:

To U.S. officials, Pakistan is emerging as a laboratory for how Western economic orthodoxy can contribute to stability in countries fighting Islamic extremism. They hope that economic development and structural reforms will sap the appeal of militant groups in the Islamic world's third most-populous country.

The downside is typical of most globalizing situations: cities are booming but the countryside seems to be left behind, political reforms aren't keeping pace (but they're not backsliding either) and there is a vocal and determined minority of radicals that wants to tank all this budding connectivity with the outside world cause it's "evil." But the telecom industry is taking off like a rocket, attracting foreign direct investment in droves, and there's a rising consumer culture that's attracting a lot of global business attention.

But in the end, what threatens the hard-core Islamic population in Pakistan is neither connectivity nor economic development, but the content flows from the outside world that come with all those transactions. It's the social values, stupid! The sophisticated urban elite don't have any trouble with this, but the traditional countryside does. To them, no amount of rapid economic development is going to do the trick if it's seen as challenging their lifestyles too dramatically too fast. And yet we know that not globalizing its economy certainly won't get Pakistan anywhere it wants to go either, so it's all a question of pace.

Pakistan has been given a golden opportunity with 9/11, oddly enough because it has so many terrorists obviously living within its borders. If not for the strong military-to-military ties between Pakistan and the U.S., built over many years, there would have been an overwhelming argument to invade that country more than Iraq. After all, Pakistan is a major exporter of WMD, narcotics and terrorists, effectively checking all the major boxes of a rogue regime. But if the U.S. can continue to do it, we'd rather outsource the military intervention role to the Pakistani military itself, because it's easier and cheaper right now.

But mark my words: America suffers a WMD attack in the U.S. and we hear bin Laden crowing about it from some lair in NW Pakistan, and we'll be in there militarily big-time in seconds flat. So we need lots of good news from Pakistanólots.

China: every which way but down

■"China Sees Rise of a New Middle-Class Profession: Landlord," by Kathy Chen, Wall Street Journal, 3 November 2004, p. B1.

■"China Prepares Rules on Direct Sales," by Leslie T. Chang, Wall Street Journal, 9 November 2004, p. A17.

■"At 18, Min Finds A Path to Success In Migration Wave: Like Millions of Others, She Left Country for the City, Ill-Prepared for Life There," by Leslie T. Chang, Wall Street Journal, 8 November 2004, p. A1.

■"China Faces Rash of Protests: Officials' Abuses of Power and Social Inequities Provoke Unrest," by Kathy Chen, Wall Street Journal, 5 November 2004, p. A10.

When I was in China, the photo I wanted to snap most of all, but never got, was the picture of the huge billboard showing this ultra modern high-rise complex that would soon appear on a site thatóat the moment we were passing throughólooked like some typical Third World bit of nothing. The juxtaposition of the image with the reality reminded me of booming America coming right out of WWII. The ambition and confidence were just that stunning.

What's so different about that scene today in China and what the gap between rhetoric and reality was both there and in the Soviet bloc during the bad old days is, in the bad old days, that gap was never closed, whereas today it's being closed at a stunningly fast rate all over China. There's such a boom in both real estate and rental markets that China's witnessing the rapid rise of a profession that really hasn't existed in that society for more than half a century: landlord.

Is there a risk of a real estate bubble? Sure, and like China's inevitable banking crisis, it will someday come. If were lucky on both, those System Perturbations will be limited to China alone, triggering a huge influx of new rules to deal with the consequences and prevent their reoccurrence. But have no doubt: that burgeoning middle class will be served.

Serving that middle class' needs is something China was seeking to do when it joined the World Trade Organization, which has mandated, for example, that the government "must allow direct-marketing companies to operate." But China has its own rules: you have to have registered capital of $10m in China, total sales of over $60m over the last three years, substantial bank deposits there, plus be members of the International Federation of Direct Marketing Associations.

Ah yes, very Maoist, the old IFDMA!

Amway and Avon . . . start your engines!

It's that kind of roaring opportunities that have triggered such huge migrations within China, where upwards of 100 million workers are considered "floating population," meaning they are economic migrantsótypically from the countryside to the cities. These "migrant workers" aren't the underclassófar from it. Instead, they tend to be the most educated and ambitious young women who prefer not to be left "down on the farm" when that agricultural world has mechanized to the point where their labor is not wanted there.

You want a nutshell of the essential triggers of the Second Industrial Revolution in New England? You just heard 'em. That's where China is right now, right along with the labor unrest that we had here during those decades surrounding the end of the 19th Century and the beginning of the 20th.

I know, I know, many analysts in my business are always keen to hype this rural unrest, citing it as clear proof that China must either fall apart in massive civil war or revert to authoritarianism. There's no inherent need for such pessimism. We got through those decades, and so can China. It will force them to alter their political system significantly, certainly more than we did. Then again, they're moving through history at a much faster speed.

That's why how we mentor them in this scenario pathway may prove essential, although I suspect Japan will become the far more important mentor. Our job will be essentially to hold Beijing to the promise of its Theory of Peacefully Rising China.

India: almost too high-tech for its own good

■"General Electric Sells 60% Of Indian Back-Office Unit," by Saritha Rai, New York Times, 9 November 2004, p. W1.

■"Indian Economy Leaves Workers Behind," by John Lancaster, Washington Post, 3 November 2004, p. A8.

India's service economy has matured to the point where major corporations like G.E. are selling off the units they once created there to handle their "off-shoring" in-house. That says that big American companies no longer feel the need to own their back offices on site (called "captives" in the industry), instead preferring now to deal with independent local Indian companies. That's a sign of trust in what India has become over the last generation. It's a sign that India's really in the Core.

But the service economy can only account for so much growth and no more:

Notwithstanding the recent growth in industrial output, manufacturing companies in India employ just 7 million people, a tiny share of the country's estimated 406 million workers, according to the World Bank. Software and other information-based services account for fewer than 2 million additional jobs. More than 90 percent of Indian workers are employed as farm laborers and in other menial, mostly unregulated jobs, such as brick-making and rickshaw-pulling.

The situation contrasts with that of China, where foreign investment has given rise to thousands of new factories churning out such consumer goods as toys and clothes for overseas markets. China's manufacturing boom has provided jobs for tens of millions of semi-literate peasants and has created a middle class that is growing as fast as any in the world.

Many economists predict that India will not achieve similar success in manufacturing, or in alleviating poverty, until it becomes more hospitable to foreign investors. They say that achieving those goals would require scrapping a 1947 law requiring medium-size and larger companies to seek government permission before firing workers. It also would require major improvements in such infrastructure as roads and power, which is so unreliable that many companies are forced to generate their own.

"We're a couple of major reform steps away," from a manufacturing boom, said Subir Gokarn, chief economist of Crisil, an Indian credit-rating and research agency.

Hell, just having an Indian credit-rating and research agency tells you how close they are to making India the next China.

Think Ethiopia has one of those? No point in having a rule-set enforcer unless you got the rules.

The Old Core will redefine old age

■"Old, But Not Retiring: Japan's Astoundingly Healthy Seniors Climb Peaks, Cross Deserts, Sail Seas," by Anthony Faiola, Washington Post, 27 October 2004, p. A1.

■"America, Wake Up to the European Dream," by Jeremy Rifkin, Washington Post, 31 October 2004, p. B4.

The first article is about how a burgeoning population of relatively healthy seniors in Japan is redefining what can still be done physically by a nation's oldest citizens. Expect this trend to be replicated here in the States, right down to coming up with new phrases and terms to describe this far more vigorous lifestyle following retirement. Redefining the far end of life will inevitably redefine the middle and everything that comes before it, and this new focus on self-fulfillment (always the great skill set of the Boomers) will help balance life here in the States considerably, I believe. It will become a major source of the new Go-Slow Ideology that will soften the edges of both the American model of capitalism and the current era of globalization on which it's based.

But Europe will be the other great source of this Go-Slow Ideology inside the Old Core. Rifkin, in his new book, claims that the hoped-for United States of Europe will be "the first transnational political entity in history." This is complete nonsense. The United States of America was the first. We're just so much further along in that historical process that we don't even recognize it anymore as a multinational union.

Rifkin rhapsodizes about how the new generation of Europeans think of themselves primarily asógasp!óEuropeans rather than members of individual national states. Can you imagine such a thing?

Here's the real point of his book, which any European could have told you on their own: Americans live to work while Europeans work to live. I'm sure Rifkin's book is good, just like Robert Kagan's book recent book was, but when you can summarize the whole thing with one line, like "Europeans are from Venus, Americans from Mars," you're treading fairly familiar ground. But Rifkin's book seems to promise more. Here's a good clip from this book-hawking piece:

The American Dream depends on assimilation, but the European Dream is based on nations' preserving their cultural identity and coming together in a multi-cultural universe. The EU's inhabitants break down into 100 or more different languages and dialects, making the region one of the most culturally diverse in the world.

The American Dream is wedded to love of country and patriotism; the European Dream is more cosmopolitan and outward-reaching. Europeans now provide 47 percent of all humanitarian assistance in the world. (The United States contributes 36 percent.) While Americans are willing to use military force to protect our self-interests, Europeans favor diplomacy and economic aid to avert conflict.

Actually, the first paragraph I'm willing to buy, although my guess is that it will be magnificently less true 50 years from now. The second paragraph misses the point that there needs to be both balance and complimentarity within the Core: as it grows, the Core needs both the Go-Slow Ideology of Europe and the willingness to do the tough jobs like America has long displayed. A Core completely made of European-like attitudes would simply try to bribe the Gap into staying away, and would remain largely uninterested in trying to shrink it. But a Core made up too much of American-style anger management in security policies would end up keeping too much of the Gap in a tumult by using too much stick and not enough carrot.

Because Europe and the US are on such differing sides of the equation, we need a third pole to balance us both, and that's where the New Core comes in. China and India both get balanceóthat whole yin and yang thing. That's why they get PNM so well: they see the need for both realism and idealism. The New Core will balance America's Go-Fast with Europe's Go-Slow, yielding what should be Just-Fast-Enough in our efforts to shrink the Gap.

The best allies are incentivized allies

■"Georgia Bolsters Iraq Troop Commitment; Country Increases Forces Five-Fold," by Irakli Jgenti, Georgian Embassy press release, 8 November 2004.

■"Eastern Europe Eclipses Eastern Germany: Fifteen Years After the Berlin Wall Fell, Economic Situations Are Reverse of Expectations," by Marcus Walker and Matthew Karnitschnig, , 9 November 2004, p. A16.

Why does little old embattled Georgia decide to up its military contingent in Iraq from 159 to 850, making it one of the biggest per capita players in the U.S.-led coalition?

Because "Georgians have felt the pain of terrorism, so we truly understand the importance of this global effort. Our young democracy is proud to help the Iraqis taste true freedom," according to the country's ambassador to Washington.

No surprise. The U.S. is kicking a new military assistance program to help Georgia make this effortóin short, our capital and their labor combined. Get used to this deal and get used to it being concluded time and time again with states along the seam between the Core and Gap, because therein we find the newest and youngest parts of what eventually must become the Core. The Seam States are like the volcanic soil of globalization: the richest material coming right out of the most tumultuous experiences. They want to advance the Core and shrink the Gap because they want to move that seam as far away from their shores as possible.

Sound familiar? It's basically our national security strategy since 9/11, and it's knee-jerk as hell. But that sort of knee-jerk reaction is okay so long as it leads to the desired result, and away from the opposite knee-jerk reaction, which is to firewall off America as much as possible from the outside world.

Nothing wrong with being incentivized.

The reason why Eastern Europe has taken off economically while the former Eastern Germanyópulled into the loving embrace of its rich sister stateóhas clearly not, is because those states were incentivized in a way the former GDR was not. Eastern Europe had to swim or sink. It had to change rule sets like crazy because it needed foreign investment like crazy. Meanwhile, Eastern Germany was sucked into the labor regulations of Western Germany and had high expectations of a intra-country bailout.

So guess where the U.S. is drawing down its military presence and guess where it's plussing it up?

New Europe is incentivized.

The right and wrong ways to build connectivity

■"Mobile phones take over in India: Indian mobile phone users have outnumbered fixed-line customers for the first time, according to the Telecom Regulatory Authority of India," by staff, BBC News World Edition, 9 November 2004, http://news.bbc.co.uk/2/hi/business/3994761.stm.

■"No bids for Algeria phone permits: Algerian regulators say there have been no bids for two fixed-line telephone permits which required $1bn-worth of investment," by staff, BBC News World Edition, 9 November 2004, http://news.bbc.co.uk/2/hi/business/3670691.stm.

This pair of articles is about connectivity personified: telephones. David Ray of VA sent me the pair, thinking they were a great juxtaposition illustrating my vision.

In the first article, we're told something thatófranklyóif someone had written it in a futuristic book 25 years ago, everyone simply would have scoffed at the notion: India's cell phone numbers (44m) have surpassed its landline numbers (43m). That's a bizarre notion from the perspective of conventional wisdom that long dominated thinking about the economic development of the Gap: supposedly you needed all that infrastructure to move ahead. But the info rev's "big push" allows you to leapfrog in that most socialist sense (the commies were always scheming ways to leapfrog ahead of the capitalists). What made it happen in India? The lowest cell phone tariffs in the world. That's it. Just lowering the taxes to make it profitable and bingo! You've got 44m cell phone users.

That's only a 5% penetration rate for now, compared to 50% or better in Europe andóone would expectófar higher rates in the US.

Meanwhile, check out Algeria's recent attempt to lure $1b in foreign direct investment to upgrade its creaky landline infrastructure. They put out two big fixed-line permits and no one made an offer. No one.

Why? Algeria's rigidly fixes its call prices at artificially low levels (the better to spur development in an egalitarian fashion!). Algeria prices its call at about one-tenth of its neighbors, and as a result, it remains far more disconnected that it needs to be, as telephone usage in Algeria is pretty limited (to the tune of 1 out of every 16 residents).

If you price a good like it's worth nothing, then it will be treated that way. Tell me this isn't bad government yielding bad connectivity.