The Russian Petrocracy not looking so strong

ARTICLE: "Russian Stocks in Free Fall," by Jason Bush, BusinessWeek, 29 September 2008.

THE FINANCIAL CRISIS: "Russia Unveils $120 Billion Package to Halt Slide: Government to buy Up to $20 Billion In Blue-Chip Shares," by Gregory L. White, Wall Street Journal, 19 September 2008.

ARTICLE: "Shaky Economy Dims Russian Prospects," by Ellen Barry, New York Times, 20 September 2008.

Russia started being punished for Putin's nasty treatment of a metals company a while back (Mechel), then there was the raw treatment of BP in its partnership with TNK, but then Russia's fight with Georgia triggered a real fear-equals-flight departure of capital.

And then comes the Wall Street crisis.

Great quote:

"If foreign investors don't buy debt and equity, Russian companies will find it harder to raise capital," says Kingsmill Bond, chief strategist at investment bank Troika Dialog. "That is the Achilles' heel of this market."

Ah, but "petrocrats" can do whatever they want, we are told.

Or maybe not, once their financial connectivity with the Old Core gets real.

Russia's politically-connected companies already control much of their stock market, so when the Kremlin pumps in more money, it strengthens that control but doesn't exactly get what it wants in the process: a market that attracts FDI.

Remember, Russia went into default just a decade ago.

So yeah, the big bad old bear isn't looking so big nor bad once its real equities are put at risk.

The oil price drop was going to happen, because the driving-up of prices over the summer got a bit unreal—just not supported by the fundamentals of supply and demand. Now that things are more real (hovering around $100 instead of $150), Moscow's a bit more vulnerable to threats of financial disconnection—best delivered by investors.

Medvedev came into power with an ambitious, modernizing agenda, but now he's stuck upgrading the Russian military, whose performance in Georgia wasn't exactly impressive, plus he's got to pump all that money into markets.

So while Putin is making brave noises, Medvedev is telling anyone who will listen that Russia has no desire to go back to any autarkic economic existence:

We are in fact being pushed onto the development track which is not based on sound, normal and civilized cooperation with other countries, but rest on autonomous development behind thick walls and an iron curtain. I would like to stress once again: This is not our track. There is no use in returning back to the past. We have made our choice.

Problem being, Russian behavior has crossed wires with that choice.

And so the lesson continues to unfold, both for the puffed-up types on Moscow's side and the hysterics on our own.

Another example of P2P "UDA"

GLOBAL BUSINESS: "Teaching Them to Fish. A Virginia-based NGO hands out free wheat to poor countries, at a price: the businesses have to perform," by Anita Hamilton, Time, 22 September 2008.

Nifty story:

Of the 4 million metric tons of wheat that the U.S. donates to struggling countries each year, a few thousand bushels come from Keith and Marlene Kisling's farm in Burlington, Okla.

When the recent food price crisis kicks in, the U.S. moved some additional stuff, but did so through a new NGO called International Relief and Development (IRD) that has pioneered a new delivery method now being replicated elsewhere inside the Gap.

The new trick? Instead of just handing out food to locals directly, the aid provides the raw foodstuffs to local processors to keep their businesses going. IRD keeps the transfers as cashless as possible. Factories, for example, get flour free but are then forced to re-invest the profits, of which IRD collects 66% and uses in other programs in the country.

The hi-lo mix in trust environments

ARTICLE: “Food Giants Scrutinize Chinese Suppliers,” by Aaron O. Patrick, Julie Jargon, Sky Canaves and Jason Dean, Wall Street Journal, 30 September 2008.

OP-ED: “The Swill Is Gone: New York’s forgotten poison milk scandal has echoes in China today,” by Bee Wilson, New York Times, 30 September 2008.

Two articles that inspired my column last weekend, which really began as a brief I received at Oak Ridge the week previous.

The Veep debate

As a Dem, I was really happy with Biden’s performance. He was really on top of his game and very disciplined and to the point.

But as someone who does a lot of public speaking, I was also really impressed with Palin, who is amazingly telegenic and, when she’s really on like she was Thursday night, is really good at generating star-power appeal. I will admit, her perf was so good in a visual/presentation sense (less so on actual content, okay, that part actually sucked wind in a bunch of places), that I thought to myself, “This lady’s really nailed the whole Palin thing!” At a couple of points, when she did those Tina Fey-like winks (or is it the other way around?), I half-expected to her to belt out, “Live! From New York! It’s Saturday night!” I mean, she’s just plain exciting. I wanted to date her and vote for her right on the spot.

And that’s the ironic part for me, given all of McCain’s criticism of Obama’s celebrity, because he totally went out and got himself a female version of Obama: sexy, telegenic, appealing as all get out, obviously smart, a natural leader. On the pure brains side, I don’t think she’s in Obama’s or Hillary’s league. She’s more a George Bush-type, instinctive leader who, when she falters, definitely gives off that “American Idol” vibe of accidental leadership. But when she’s on, like she was Thursday night, there’s no denying the attraction. She simply excites people. So while I don’t expect her to win with McCain, I could see Palin definitely growing into a major star role within the GOP, which would almost necessarily require her to unseat one of Alaska’s two senators sometime soon—clearly an opening in the making.

So again, for me at least, I see this election as representing a serious changing of the guard and a total rejection of the last 16 years of Boomer rule. We have a pre-Boomer (McCain) taking on a post-Boomer (Obama), and the two candidates generating all the real heat are both generational game changers (Obama, Palin). In contrast, McCain and Biden seem simply along for the ride, with McCain looking older and more fragile by the minute in comparison to Palin’s abundance of youth and vigor and just plain kick-ass enthusiasm. I mean, he comes off like her grandpa.

Still, it would scare me plenty to see her assume the presidency. Too much babe-in-the-woods. Give her six years in the Senate, though, and I wouldn’t put anything past her. She clearly adapts well to the larger stage. I just don’t care for the picked-from-obscurity and let’s-put–on-a-show-Judy! spontaneity of seeing her rise so stunningly fast. I just don’t think that works in American politics. People want plenty of time to get to know you, which Obama has provided over a very long campaign, including two brilliantly written political autobiographies. Again, her outta-Nowhere-Alaska trajectory comes off as too “Anybody Can be a President!” Americans just don’t do well with snap judgments. It’s simply too big a decision because we have to live with this person for at least four and maybe eight years. You need that chance to move beyond crush to something more familiar and trusting. But definitely, from Palin’s perspective, a total no-lose proposition, given her talents and appeal as a politician, which she totally is—by the way. All that blab about being a maverick and outsider is pure play. Anyone who sees her perform Thursday night recognizes a consummate politician—not a simple skill set.

An example of the shift from single-party rule to mature democracy

INTERNATIONAL: "Malaysian Seeks End To Decades Of Firm Rule," by Thomas Fuller, New York Times, 14 September 2008.

I continue to watch this one. To me, this is the classic shift from about five-decades of single-party rule post-revolution/independence to real—and unstable—multiparty rule, meaning the winning party for decades finally loses to an upstart. Japan had this moment, so did South Korea and Turkey and Mexico. Singapore will eventually face this reality, as will Russia and China farther downstream.

Spreading the word to the spiritual-minded

Flew out late Thursday to Palm Springs CA. Bit of an effort, because I go Indy to Denver, Denver to Las Vegas and then Vegas to Palm Springs on a prop. But the real problem is that I was peaking on a bad cold.

Picked up by a local reverend and driven to this nice resort at Palm Springs, where I crash after watching the repeat of the vice presidential debate on CNN.

Not hard, despite the cold, to get up early the next day, due to the time change. I pick out about 29 slides to do in about 50 minutes in a keynote/plenary session of this conference on spiritualism that brings together about 200-250 religious/spiritual leaders from around the United States, a couple from Canada, and perhaps a sprinkling from abroad. It’s run by a group known by the acronym, AGNT, or the Association for Global New Thought. The main host is a Deepak Chopra-like guru, Dr./Rev. Michael Beckwith, who is advertised as being featured in the recent bestselling book, The Secret.

I test the AV set-up around 0815 and then retreat to the Green Room, which is nicely set-up. Inside I am approached by a variety of people, including Beckwith and Barbara Marx Hubbard, with whom I’ve interacted before. To give some context, this crowd is very much in touch with Dr. Don Beck and his whole spiral dynamics approach, which is an interesting mix of Hegelian states of being and Abraham Maslow’s hierarchy of needs. If you’re into philosophy, cosmology and inner spiritual growth, this is a very intriguing crowd—very non-denominational and open to all flavors.

While the Green Room cohort gathers for a kick-off-the-day prayer/meditation, I slip out with my coffee and my iPod playing Cold Play’s latest album, which I am digging intensely. With the cold and time change, I’m not looking for inner peace but a sense of inner drive, so I’m psyching myself up for a high-energy performance because the crowd, as it gathers, is giving a rather demanding buzz (see how this stuff gets into you so fast—then again, I am a natural mimic who blends in wherever I go).

Ah, to be 8-of-9.

Still, this crowd of 250 is probably 80-85 percent women, so that alone gives me a different feeling going in, because I often talk to a diametrically opposed gender balance (the military, go figure).

Tasteful stage, mostly dominated by a funky, jazz-fusion-style quartet that’s putting the crowd in the mood. Good screen in the corner, with drop-down projector.

Opening speaker leads a meditation effort; I’m still on Cold Play.

Then a rep/organizer from next year’s Parliament of Religions (first one in 1893) world conference in Melbourne Australia speaks. She tells me beforehand that she’s tying her talk in a bit with my presentation by noting the DoD’s recent decision to allow Wiccan symbols to be placed on the graves of dead servicemen/women.

Hmm, I think to myself. I’m following an avowed witch on stage. Definitely a new one for me. I mean, I’ve followed all manner of dark princes and evil wizards over the years, so a rather harmless looking witch is not so bad, but definitely different.

After she speaks for about ten minutes, we get a jazzy/New Age song from the band and a female singer.

Then a quick intro and I’m up and rolling.

Feeling strangely recovered from the cold (funny how that often works for me as stage-time approaches), I launch in and am surprised by how well the humor goes over. Often with a purely civilian crowd (the lady who intro’d me said that AGNT had never had a “military strategist” speak at one of their gatherings before), my sense of humor comes off as shockingly dark—downright black. But this crowd not only picks up on it, it rocks like few audiences I’ve ever engaged.

As always, you only get what you give, so the more response I encounter, the more humor I inject. Oddly enough, for what you consider to be more a Joel Osteen crowd (one of my speaking models), I actually get closer than I think I’ve ever achieved to another stage model of mine, Chris Rock (whose new HBO special is fantastic), so I’m having a surprisingly raucous time.

I will admit: I have this way with women of a certain age, like I’m the Liberace of grand strategists. I think they suspect I’m this closet militarist, but deep down, they just don’t care.

That’s not a stretch. I have appeared onstage many times (in a previous life) in gloriously sequined costumes (I was “Riverdance” two decades before those people made it famous). I’ve also played Vegas. And I dream of mastering the piano. All the pieces are there, waiting for some queer, midlife crisis to kick in.

But seriously, one fiftyish woman actually came up to me afterwards and said that she and about 20 of her girlfriends had collectively decided—halfway through my talk—that they were all going to write me in on 4 November for president of the United States.

If only I bottle that mystique and sell by the case!

Again, more seriously: great audience and just the right experience for me right now, one that psyches me up on the book. These are stories worth telling.

After the talk, I get a standing ovation, but I discount it, because this crowd gives everybody a standing ovation—even the lady who simply led the morning meditation. A bit promiscuous, this audience.

Still, you can sense a very strong buzz after a performance and the clearest sign is that about 25 people just plain followed me out of the ballroom, abandoning keynoter #2 and stuck with me for about 30 minutes of follow-on, impromptu delivery in the hall.

When that ends, I manage to walk about 30 yards before a secondary situation unfolds (about a dozen), and that goes maybe 20 minutes more.

Then an invite to lunch and I sit down with three people and simply continue in full Q&A mode for another 90 minutes (hey, it’s a free lunch).

Then back to the ballrooms and I’m supposed to lead a break-out session that’s very loosely defined on my books. It’s an overflow, SRO audience of maybe 80 or so in this boxy, windowless interior room. I take five questions over 90 minutes, giving 15-20 minute answers to each. Totally warm, I am in my circular-speaking, free-associating best, which at times can be a bit confusing, usually is over-the-top funny, and actually is the most unexpurgated way I speak (often with a vodka martini in hand—actually, best with a martini or a neat Laphroagh).

I get another standing ovation, and this one I felt I actually deserved. I often dislike the perfunctory tack-on Q&A after a performance, preferring a break that allows people to digest and then approach me in an unstructured follow-up session, so from my perspective, this was simply ideal.

Better yet, I basically did Great Powers the PPT-less version in my answers, allowing me to practice my verbal delivery in anticipation of my new slide package, currently being developed by longtime compatriot Bradd Hayes, so I felt like I was nicely double-dipping: working out my pitch while pitching the book.

After that 90, I go about 30 with a follow-on group impromptu in the hallway, then I go off with a couple of writers from What is Enlightenment magazine and do about a 45-minute taped interview in the Green Room.

Then up to my room to speak with Vonne by phone, then back downstairs to sit at a table with fellow speakers for the evening meal. Tom Hartman from “Air America” is there to deliver one of the two evening keynotes, but I mostly talk with Barbara Fields, the AGNT organizer of the conference, who brings up the possibility of marketing Great Powers through AGNT’s bookstore to many of the megachurches represented here. Naturally, her spirit moves me.

During dinner I have about a dozen people come up and express their excitement/gratitude over the talk, a couple in tears, which is not as unusual as you might think for me. The main upshot is unsurprising: they love the sense of optimism and hope in the future.

Still, a bit different to get blessed so many different ways in one night. A lot of subtle bowing involved.

I skip the evening talks and crash. When you add up all the public speaking, it’s been a very long day and I’m reminded of the lingering cold. Upstairs I veg out on Devito’s film, “Hoffa,” which I find very good and a wonderful reminder of our tumultuous labor past.

Up very early today (Saturday) to fly home through Denver.

All in all, a pleasantly contemplative/interactive time. Jenn, my manager, of course talked me into this one. She has that strange knack of knowing where I need to go and when I need to go there, often keeping from me a lot of information because she knows I sort of like to be surprised when I get there—actually discovering the crowd while I’m speaking. It’s just a better mode for me. I’ve learned to trust her instincts in this regard. As always, everyone from AGNT who dealt with Jenn in setting up this gig went out of their way to say what a fabulous person she is to interact with. Jenn is a serious mentor of mine and a very strong personality. Being older than me, she comes off like an older sister in many ways. But despite her strong approach, she’s got this perfect pitch for scouting out, negotiating and managing a speaking career. Most agents in that business have quieter personalities, but she’s very proactive and protective with regard to where I need to be, whom I need to meet, and venues I should be exploring and exploiting. And I’m incredibly grateful for that, because I’ve gone through a significant number of previous iterations before finally settling on this long-time relationship with her.

But enough touchy-feely. I sense a key Packer game coming up!

Give an underage regime a gun and hope for the best

ARTICLE: "With Push From White House, U.S. Arms Sales Rise Sharply," by Eric Lipton, New York Times, 14 September 2008.

We're pretty much always been number one in gun running, with the post-Sov Russians fading fast across the 1990s but resurging lately.

But since 2005 it's been the U.S. defense industry that surges in overseas sales. That dovetails nicely with the drawn-out postwar badly handled by us—until recently. All that operational cost crimps acquisition spending, plus makes allies nervous due to our tie-down, plus encourages implied targets to get nukes, which in turn makes even more allies nervous.

So our somewhat stressed industry finds real opportunity/relief abroad, and everyone's backs get scratched.

A safer world? Not really. But not a more dangerous one per se, either. Just a more heavily armed one.

But yeah, this is totally about gun-running, no matter how you spin it. The rest is just our propaganda.

So interesting to track the big jump since 2005, because that's the year the postwar in Iraq really goes sour.

Why the bargain hunting will be intense

ARTICLE: "The 100 Top Brands: Here's how Interbrand puts a number on the power of a name," BusinessWeek, 29 September 2008.

Of the top 100 brands in the world, 52 are American, meaning any Wall Street/subprime-triggered slowdown in America will make all those brands that much more vulnerable to possible takeovers by rising New Core behemoths flush with cash. While the pain is hard to isolate nowadays in the global economy, meaning the East hurts too, they don't hurt as much and they just might be ambitious enough and market smart enough to see the opportunity here.

Expect the trouble before next talks with Pyongyang

WORLD NEWS: "U.S., North Korea Talks Are in State of 'Inertia': Kim's Health Raises Uncertainties, Stalls Nuclear Discussions," by Jay Solomon, Wall Street Journal, 19 September 2008.

No great surprise that DPRK backtracks from the last agreement with the U.S. As Bush-Cheney winds down in its extreme lame duckness, it seemed wildly optimistic to think we'd get what we wanted from Pyongyang.

Yes, Kim's alleged stroke in mid-August will get us the same outcome, meaning our lame duckness is now matched by his, and so those around him will talk and act tough out of fear.

But then there's the larger pattern, pointed out here by David Asher, a former Bush senior official, of North Korea acting bad and then asking for new talks, so Kim's decline may simply have reset that cycle in motion.

On that basis, then, I'd expect something truly bad from North Korea, given the ruling coalition's fears of life after Kim.

We're done with hedgehogs

OP-ED: Hail Mary vs. Cool Barry, By Charles Krauthammer, Washington Post, October 3, 2008; A23

Krauthammer agrees: calm, cool, collected and calculating will win, and frantic, crisis-filled and ideological will lose.

Why?

Bush burned us out with 8 years of the latter, turning too much of the world against us in the process.

We're done with hedgehogs for now--simple as that.

WW2 re-enactment

U.S. WWII airborne re-enactors in regulation chutes after jumping out of a C-47 at the Terre Haute airport as part of a big re-enactment (camp, planes, etc.).

C-47 taxis after landing.

Stewart tank

Column 122

Crisis begets accountability and transparency

China's ongoing dairy crisis highlights the fundamental dynamic of globalization: high-trust markets linking up to low-trust environments. The results are predictable: tainted product scandals, followed by sweeping new regulations.

China just beefed up the rules governing its dairy industry, whose main players clearly sought a government cover-up. But with 50,000-plus Chinese kids sickened and foreign governments restricting China's milk exports, the ruling Communist Party had no choice.

Read on at KnoxNews.
Read on at Scripps Howard.

The baby formula scandal starts to deeply perturb China's dairy sector

ARTICLE: "Chinese Dairies Face a Worsening Crisis: Slow Response to Tainted Formula Fans Consumer Fears," by Loretta Chao, Wall Street Journal, 19 September 2008.

We're talking a $21b domestic dairy industry, and over 6k ill babies, including many with kidney stones.

Here's the part I like:

Liu Jinhu, an analyst for Sealand Securities in Shenzhen, said that if Chinese dairy companies want to avoid being overtaken by foreign counterparts they will have to rebuild their supply chains and practice better corporate responsibility. The milk-powder scandal "might become a watershed for China's dairy industry to find its rebirth," he said. In the long run, it will to consolidation and a shuffling of the industry, he said.

Again, not long after the Sichuan earthquake, we're talking lots of public anger at local government officials.

The problem was inevitable, said Chinese experts, due to the poorly regulated supply chains and the bad reporting methods concerning problems, meaning no ability to trace it back up the chain.

From know-your-customer to know-your supply chain, right out of Great Powers.

Great Powers Preface Wordle

In their gallery

104 today!

How the GWOT and conservative judges have diminished U.S. judicial influence around the world

ARTICLE: "U.S. Court, a Longtime Beacon, Is Now Guiding Fewer Nations," by Adam Liptak, New York Times, 18 September 2008, p. A1.

Simplest explanation: Bush-Cheney have so decredentialized our judicial system with their war on terror tactics that we have ceded the judicial high ground on human rights to the EU, whose courts now are cited more by Canada and Australia, two good bellwethers, while our courts are cited dramatically less.

Also, it's a flatter, more competitive landscape as more sophisticated alternatives spring up, but still, the loss of influence--true rule-set exportation--is stunning.

The secondary answer is that our own, increasingly conservative Supreme Court is growing in its hubris: simply refusing to acknowledge both this trend and any perceived utility in citing the legal advances of others.

Rhenquist believed in learning from foreign courts, and argued for it, but Roberts, Scalia and Alito are all hostile.

This is arrogance of the worst sort.

We are an exceptional people in an exceptional country, and we invent new rules better than just about anybody, but thinking we own a monopoly there is self-limiting nonsense, and patently anti-common law in a globalization process.

Missing Musharraf

WORLD NEWS: "Troubled Pakistan Economy Compounds Leaders' Woes: Security Tensions Impede Growth, Drive Away Investors," by Peter Wonacott, Wall Street Journal, 19 September 2008.

The Pakistani economy did well under Musharraf, but since it was clear he was being forced out, it has dropped precipitously. Foreign investors flee and radical Islam threatens.

The classic statement from a local investor: "Today in Pakistan, there's no way to make money because there's no law and order."

Much hangs on how America responds, because we're the largest aid provider and foreign investor. Then again, we've started waging war inside Pakistan without warnings, and that can't exactly help the situation, now can it?

So Pakistan's half-decade of 7 percent growth now slows to under 5% this year and maybe worsens far more in coming months.

As the Long War shifts to the Afghanistan-Pakistan border regions, this matters a whole lot. As an IMF official put it, "If the economy tanks, you can forget about the rest."

So please, no war-viewed-solely-within-war strategizing here.

The states experiment with new rules, as states are wont to do

U.S. NEWS: "Efforts to Curtail Emissions Gain: More Firms Believe Emitting Gases Will Cost Money," by Jeffrey Ball, Wall Street Journal, 22 September 2008.

U.S. NEWS: "New Code for Gun Retail: Virginia Gun Seller Agrees to Tough Rules In New York Pact," by Vanessa O'Connell, Wall Street Journal, 22 September 2008.

The hidden strength of America's rule-making capacity comes in our multinational union structure: 50-plus states (not counting the 500-plus nations located within our borders, but their experiments tend more toward gambling), all of which are constantly tinkering with their rules, looking for the right new ones and the best overall mix. As they succeed or fail, they are emulated or shunned. Point being that most of our nationwide rules go through a long trial season, sometimes involving quite a bit of judicial review.

So we see ten northeast states (no surprise, because they were leaders on SOx and NOx too) band together to experiment with the nation's first mandatory cap on greenhouse-gas emissions: the Regional Greenhouse Gas Initiative.

Not the most aggressive effort, but a clear step forward. The SOx and NOx pact back in 1992 also divided the nation up into regions, so the pattern makes sense.

Another version of this is when one state or even just a city effectively rules on the trade from another state, like New York City working out a deal with the sole retailer (Bob Moates Sport Shop in VA) to fight NYC's landmark lawsuit against out-of-state gun dealers (2006). That shop agreed to follow Wal-Mart's new tougher rules, which the big box retailer adopted voluntarily with a group, Mayors Against Illegal Guns. One of the tougher rules: you get videotaped buying weapons and that videotape is stored. Not a problem, unless you plan to commit crimes. Wal-Mart also promises a computerized log of any of its guns linked to crimes.

So we see rules coming from all angles in our system, making it a highly competitive landscape that constitutes one of our greatest strengths as an economy and polity.

Shift: feminization

ARTICLE: U.N. Study Finds More Women in Politics, By NEIL MACFARQUHAR, New York Times, September 19, 2008

Speak of this in Great Powers: what I call the feminization shift, especially crucial in legal and medical fields. Huge empowering.

(Thanks: Jarrod Myrick)

Oprah International

ARTICLE: Dammam Journal: Saudi Women Find an Unlikely Role Model: Oprah
, By KATHERINE ZOEPF, New York Times, September 19, 2008

Honestly, this is where I find Oprah's role most interesting, most underestimated, and most positive. In this sense, Oprah clearly exports rules and has a foreign policy all her own, which is great.

(Thanks: Jarrod Myrick)