South Africa's single-party state sputtering

ARTICLE: "A future of division, factionalism, stagnation and patronage: The African National Congress under Jacob Zuma shows signs of losing its way," The Economist, 9 August 2008, p. 43.

The sanctification of the ANC always amuses me. It was a lead character in my PhD diss regarding Soviet bloc security aid to national liberation movements. Hey, when you actually turn Ho Chi Minh in time, you congratulate yourself.

The ANC basically runs South Africa as a single-party state, and it shows.

No one wants to toss them out of the Core, though, and that's reasonable, because the South Africans are natural economic integrators in southern Africa.

Plus, most "new" states start off in this manner, much like the U.S. itself for about ... six decades.

Wall Street’s system deeply perturbed—like clockwork

ARTICLE: “New York Tries Taming Credit-Default Swaps: State to Regulate Certain CDS Pacts as Insurance Deals,” by Serene Ng and Liz Rappaport, Wall Street Journal, 23 September 2008

EDITORIAL: “The End of Wall Street,” Wall Street Journal, 23 September 2008.

FINANCE AND ECONOMICS: “Is there a future? The loneliness of the independent Wall Street bank,” The Economist, 20 September 2008.

ARTICLE: “Some Investment Banks May Prosper: Smaller Companies Are Likely to Survive Despite Hard Times,” by Craig Karmin, Wall Street Journal, 23 September 2008.

THE FINANCIAL CRISIS: “Walls Come Down, Reviving Fears of a Falling Titan,” by David Enrich and Damian Paletta, Wall Street Journal, 23 September 2008.

ARTICLE: “A Chance To Find Balance,” by Michael Mandel, BusinessWeek, 29 September 2008.

ARTICLE: “Aftershocks Beyond The Street,” by Michael Orey, BusinessWeek, 29 September 2008.

ARTICLE: “Short-Sale Ban Spreads Around Globe: Australia, Taiwan, Netherlands Join Push to Keep Investors From Betting on Decline,” by Kara Scannell, Wall Street Journal, 22 September 2008.

THE FINANCIAL CRISIS: “Leaders Seek Global Response to Financial Crisis: At U.N. Gathering, France, Brzail Call For More Oversight,” by Jay Solomon, Wall Street Journal, 24 September 2008.

FINANCE AND ECONOMICS: “Beware falling BRICs: Emerging countries are not the havens some people thought,” The Economist, 20 September 2008.

NUMBERS: “Global Markets, Frightened Investors,” by Tara Kalwarski and David Foster, BusinessWeek, 29 September 2008.

ARTICLE: “Sovereign Funds: Twice Shy,” by Emily Thornton and Stanley Reed, BusinessWeek, 29 September 2008.

ARTICLE: “Japanese Banks Roaring Up Wall Street,” by Allison Tudor, Wall Street Journal, 23 September 2008.

The simplest explanation of CDSs that I’ve found yet (top article):

Credit-default swaps are privately negotiated contracts that act like insurance and protect investors against a default on bonds and loans that they own. Swap buyers make regular payments to sellers, which in turn agree to make large payouts if defaults take place.

So when Morgan Stanley declares “the world had changed,” and the WSJ calls that the “understatement of the year,” you’ll have to excuse their myopia.

It used to be that banks and investment firms were together. In the pre-1929 regulatory environment, that was pretty dangerous, so after the big collapse that helped trigger the Great Depression, there was a new law (Glass-Steagall) that forced those operations to separate, meaning the House of Morgan split into J.P. Morgan, the bank, and Morgan Stanley, the investment bank.

Glass-Steagall was repealed in 1999 (Gramm-Leach-Bliley), triggered by Citicorp’s announced merger with Travelers Group, meaning commercial and investment banks could once again be housed in single firms.

What happens with the “fall” of Wall Street now is nothing more than the disappearance (for now) or the remaining independents, but they seemed to be going away anyhow. First Boston (Steve’s old shop) was gobbled by Credit Suisse back in 1988, then Salomon Smith Barney went to Travelers, later consumed by Citicorp. In 2000, PaineWebber went to UBS, J.P. Morgan went to Chase, and Donaldson, Lufkin and Jenrette went also to Credit Suisse. AG Edwards disappears inside Wachovia in 2007, and Bear Stearns went to J.P. Morgan a few weeks back.

What happened last week was the last three big independents disappeared: Merrill Lunch to Bank of America, and Goldman Sachs and Morgan Stanley convert to commercial holding banks. Lehman simply goes bankrupt.

Let me be clear here: the function of investment banking does not disappear, just the large-scale independent form (meaning, separate from a commercial bank). To me, it’s a bit hyperbolic to call that the “end of Wall Street,” because Wall Street existed before Glass-Steagal and it continues to exist after Gramm-Leach-Bliley. Phil Gramm’s dreams of being Secretary of the Treasury—even if McCain wins—probably died last week, but not Wall Street.

What will change is that commercial banks that also do investment banking are likely to be more conservative—not exactly a bad thing given our last decade or so of spending beyond our means as a nation.

Also, venture capitalists don’t exactly disappear, nor does private equity hedge funds, nor do angle investors. In short, we still possess a lot of ways, including stock markets, to directly connect savers and entrepreneurs—unlike the vast majority of the rest of the world.

So please, no TEOTWAWKI fear-mongering.

Independent investment banks on Wall Street disappear (don’t be surprised if Goldman and Morgan Stanley convert back someday) for now, but as the Economist points out, “universal banks” (marrying investment banking and deposit-taking) were already in the ascendant—globe-spanning behemoths befitting this frontier-integrating age of globalization. Bear and Merrill disappeared into just such banks, and will continue to operate there. Meanwhile, Citicorp looks at the future with some bullishness—its model is supreme.

America is nervous, so sayeth the Economist, because the universal model is viewed with some real suspicion here. Nonetheless, last week constituted the real-world, complete repeal of Glass-Steagall.

But not all investment banks disappear. The ones that remain are just smaller, like Pipe Jaffray, Raymond James Financial (big enough to name the Tampa Bucs football stadium), Jeffries Group (where I’ve spoken) and others.

According to the WSJ:

Some analysts suggested that these boutique investment banks resemble in some ways the businesses that Goldman and Morgan Stanley had 25 years ago, when they were much smaller private partnerships.

Indeed, many experts expect a lot of the fired investment bankers to seek out new employment at these boutiques, so maybe growth will be in their future now that the asteroid killed off the big dinosaurs? Okay, that’s a bit harsh. Real point here is that old growth forest cleared and maybe new ones will grow in their place—again, not the end of the world.

As the BusinessWeek piece points out, this System Perturbation can produce a lot of new, more balanced financial thinking, spurring investment in education, infrastructure and R&D (somebody, call Tom Friedman!), so in combination with high energy prices, this is also perhaps a very good thing.

Absolutely, in the short run, there will be tighter credit everywhere and that’s dangerous to globalization’s spread. Other states realize this, thus the quick additional efforts around the globe to stop the short-selling on financial stocks, and the calls from smart-enough leaders (Sarkozy, Lula) for more sensible regulation (arguably speaking more to the inter-market flows, which are truly less regulated than investments in any one mature economy).

The real danger over the long run is a lot of rich countries taking money off the table and threatening the capital needs of the rising great powers. The Economist, presaging my latest insert into Great Powers, remarked “so much for decoupling,” in light of the market shocks felt in places like Russia, China, Argentina, etc., following last week’s tumult on Wall Street. As the mag warns, “investors may be changing their minds about emerging markets.”

As the BusinessWeek charts show, much of their decline came on the drop in commodity and energy prices a few weeks ago, only to be accelerated further by Wall Street’s woes.

But here’s the key difference: one thing for the advanced West to curtail appetites and another for the rising East to curtail expectations. Lower your calories is one thing, but lowering your sights is quite another.

But that cautiousness can cut both ways: the sovereign wealth funds that showed up last year to rescue Wall Street in the opening round of these crises aren’t showing up this time, taking a clear wait-and-see attitude. They pumped in about $60 billion, only to see $14B go away quickly.

One oddity: Japanese investors are back, looking aggressive and hungry. Not party to much of the excesses of the last decade as they were still recovering from their own party in the 1980s (quite the hangover), they now scour for bargains. What a wonderful world.

In the end, all the recent talk about how the U.S. would never mend its ways without a crash proves both true and false: Wall Street heaves but the rest of our economy does not—for now. If the rescue package does its main trick of restoring confidence, then maybe—just maybe—we get our cathartic cleansing without too much damage.

But clearly, new rules are coming, both for our markets and how the world’s markets increasingly connect to one another.

So definitely score this one as a major System Perturbation. Hardly unexpected, since people have predicted it for years, and not the collapse some foresaw, because this is not the 1930s, but still one big enough to leave most of us woozy and scared, and perhaps big enough to wipe out whatever benefit McCain got from Russia and Palin.

Dissecting the surge’s success

OPINION: “Why the Surge Worked (The Weekend Interview with Jack Keane),” by Matthew Kaminski, Wall Street Journal, 20-21 September 2008.

ARTICLE: “The Force That Slowed the Insurgency: ‘Fusion cell’ teams have been able to weaken al-Qaeda in Iraq,” by Joby Warrick and Robin Wright, Washington Post National Weekly Edition, 15-21 September 2008.

OP-ED: “Our Generals Almost Cost Us Iraq,” by Mackubin Thomas Owens, Wall Street Journal, 24 September 2008.

Keane, the hero—along with Petraeus—of Woodward’s book, says the surge works for two key reasons, both of which couldn’t have been exploited to the point of solidification without additional bodies: 1) all Iraqis were tired of conflict and were looking for a way out: 2) the “awakening” due to al Qaeda’s over-reach. Fair enough.

The third big argument offered by others is the success of the interagency teams that hunted down and killed senior insurgency leaders.

In sum, the usual combination of killing bad guys but also widening the politics of inclusion, with a dash of war fatigue tossed in.

Where I part with Woodward, and Mac Owens is the vilification of the Joint Chiefs and Abizaid/Fallon (even as it validates my previous Esquire story) and Casey. In general, the JCS and CENTCOM did what they were supposed to do: think more strategically and not get totally wrapped around the axle of Iraq (Petraeus’ reality now, and just watch him change a couple of stripes as he takes over CENTCOM—as he should). What they “rebelled” against was Bush-Cheney’s total lack of grand strategic vision. In Woodward’s book, Fallon confronts Bush early on regarding some opening to Iran, to chill it somewhat vis-à-vis Iraq. Bush’s reply? “These are assholes.”

Quick, ungrammatical, and to the pinheaded point.

That’s it. That’s the sum of the strategy. Woodward says Fallon was stunned, because calling them assholes wasn’t a strategy but name-calling.

The top military leadership fulfilled its duty just fine. It was the Bush-Cheney White House that screwed the pooch too many ways to count. When the COIN argument swelled up enough (meaning the Army and Marines learned and adapted), Bush was smart enough to adopt it, but he sure took his time (note how Woodward details the delay on action and the emphasis on secrecy until AFTER the 2006 elections, out of fear it would cost them politically—no wonder McCain was pissed), and during that time a lot of American troops were needlessly sacrificed. They were sacrificed because the administration forced them to fight under the worst strategic circumstances, thanks to that idiotic policy of designating an “Axis of Evil” beforehand and then wondering why the other two went out of their way to take advantage while you started in on the first one—duh! Junior “axis” member Syria also went out of its way to pile on in the meantime.

The big payoff from declaring the Axis and turning down early local offers of help (the Hadley doctrine)? A lot of dead American soldiers and Iran that much closer to the bomb anyway. Brilliant fricking stuff.

And you wonder why the JCS and Abizaid and Fallon found all this myopia dangerous and worth confronting. Hell, NOT to do so would have been the real abandonment of their duty.

This was an impossible situation from the senior military leadership’s view: committing more troops to a deteriorating situation while Bush was openly threatening war with Iran next door (yeah, when my president publicly invokes “World War III,” I think that’s pretty serious) and Afghanistan/Pakistan were going dramatically downhill—and the military was coming apart at the seams. Again, I don’t blame them for confronting Ahab, even as I agreed with the logic of more troops (my SysAdmin-bias allowed me no other opinion). My problem with the surge was the lack of the diplomatic counterpart, now bequeathed to the next president, because I felt the lack of one meant—again—too many American lives needlessly lost and whatever gains we achieved logically held hostage to their neighbors and their willingness to wait us out and start trouble once we inevitably had to draw down, possibly making this whole success a complete illusion and thus wasting more American lives to no good end (not to mention those we waste in the future). Additionally, I clearly worried that Bush-Cheney would go through on their many threats re: Iran, because I thought (and still think) their strategic stupidity on the Middle East knew no bounds. I don’t think that about their approaches to Russia or China or India or Africa or a lot of places, but WRT to the Middle East, they were beyond stupid.

Within that larger regional context, the opposition of senior military leaders was hardly uncalled for or unpatriotic or “playing for a tie” or any of that sophomoric nonsense. It reflected larger considerations of the sort routinely and consistently bungled by this unimaginative crowd.

In the end, Keane did his country a great service by talking the Bush White House in to this easier “out” from their untenable approach (and yes, Bush-Cheney were courageous to make that call), to which it clung stubbornly for three-plus years (i.e., that “short war” crap that denied any responsibility for the long peace that needed to be waged as follow-on). To me, I am especially grateful because it makes the SysAdmin vision a lot more feasible in people’s minds, and because one of my three servicemen nephews directly benefited from the reduced violence during his many miles (50k-plus) of convoy duty across Iraq in that timeframe.

I’m also indebted to Keane and Petraeus and Nagl and Mattis and the whole small-wars/COIN crowd because my company, Enterra, placed a significant bet in northern Iraq that depended—to a very real degree—on the surge’s success. Now we’re looking to expand that nation-building activity southward, at the request of our government. So again, I’m plenty in favor of what Keane and others pulled off, but I don’t begrudge those who opposed these steps their right and duty to argue their viewpoint and to make their bureaucratic battles, and I sure as hell don’t consider them bad or unpatriotic officers on that basis.

To me, that’s a baseless charge that shifts the blame from Bush-Cheney to our military, when it’s that military that ultimately—after a lot of pain and suffering—came up with the answer that saved those politicians from their own incompetence.

Bush-Cheney abdicated on Iraq, and the military was there to pick up the slack—pure and simple. Backdating the blame is simplistic. The military did its job. Bush-Cheney did not.

Column 121

To rule the high seas, make sea traffic transparent

One of the main problems in counterterrorism today is that there are so many people and vehicles, and so much data and material, moving through globalization's myriad networks that it seems virtually impossible to track it all effectively. Nowhere has this problem been more acute than on the high seas.

In 2006, Adm. Harry Ulrich, then U.S. commander of NATO Naval Forces Europe, decided to do something about it. Despite having virtually no resources, his dream was to transpose the global air-traffic control system onto sea traffic.

Read on at KnoxNews.
Read on at Scripps Howard.

A mistake on Esquire's site

A video game review where I allegedly provide the "earnest" footnotes.

Unfortunately, I did not provide any such footnotes, and anybody who follows my stuff would instantly realize it.

I have complained to Esquire. I have no idea who the author (Peter Martin) is, but that simply did not happen.

Brief and a nice meal x3

Flew to TN Wednesday afternoon and then spent hour with semi-retired NASA guy talking a mag-lev transport network for US, plus Free Electron Lasers to power spacecraft to moon and power facilities there. All very cool, seemingly plausible, and forward leaning.

Cost estimated for mag-lev network in manner of interstate highway system? A mere 350 billion. Pocket change this week!

Thursday is all-day meetings at Oak Ridge National Lab, then flight to Reagan.

Friday is long session brief and discussion with a collection of operators from the special forces universe, the kind who purposely don't look military. This group had requested me a while back and a friendly intermediary set it up. Smart bunch. Privilege to participate.

Home Friday for the debate.

Interesting additional pressuring/signaling by Russia

ARTICLE: Eurasian Grouping Plans Regional Army Near Afghanistan, By Farangis Najibullah, Radio Free Europe/Radio Liberty, September 19, 2008

An easy sell in a region where U.S. Military troops attack targets inside a neighboring state (Pakistan) without asking for permission or providing warning.

(Thanks: Jarrod Myrick)

The older man takes the content but the younger man passes the threshold

Obama is the challenger tonight on foreign policy, the younger man who has to win enough trust to be considered credible.

McCain is the experienced incumbent, who only has to argue his many years and many decisions.

McCain delivered his bit. His problem was that Obama did also. He seemed more than credible enough. It was not hard to imagine him as president.

The basic differences were clear: McCain would be more bold, more aggressive, more confident, whereas Obama would be more cautious, more careful, more selective.

That much is clear.

But a draw for Obama is a loss for McCain tonight. Obama got what he needed--the image in his supporters' minds and among enough of the undecideds that this guy can indeed be commander-in-chief. McCain needed a knockout, because, as the economy proved this week, the following debates will be hard for him, as will the campaign.

A billion elders by 2050--in China and India alone!

INTERNATIONAL: "Ageing populations: Things to look forward to; Live longer, die slower," The Economist, 2 August 2008, p. 63.

Five-fold increase for India and six-fold for China by 2050 WRT to an over-80 population, totally collectively over one billion over age 65.

As for Old Core, it gets older. Now only 1/6th of Old Core over 65 and only a quarter of them over 80. By 2050, that's a quarter over 65 and roughly 40% of them over 80.

By 2050, 4 out of every 5 deaths in the world will occur to people over 60: either cancer, heart/lung/other organ failure and dementia. Those are the three biggies.

Don't sell my clothes, Martha! I'm a ways from heading to heaven!

The yin to Doha's yang: regional deals

WORLD NEWS: "Asia Seeks Its Own Trade Deals as Global Talks Stall: Southeast Nations Set Pacts With India And Australia," by Patricia Kowsmann and P.R. Venkat, Wall Street Journal, 29 August 2008, p. A10.

Will be largest FTA ever concluded by Australia. Think that won't change things? Naturally, Australia's food producers will benefit greatly. No coincidence that the "Saudi Arabia of milk," New Zealand, also getting a deal.

This is a classic response to stalled global trade talks: get things going regionally.

Globalization at work at a regional level.

Another county heard from on alternative energy!

ARTICLE: "Gut Reactions: The termite's stomach, of all things, has become the focus of large-scale scientific investigations. Could the same properties that make the termite such a costly pest help us solve global warming?" by Lisa Margonelli, Atlantic Monthly, September 2008, p. 76.

There's than Manhattan Project analogy again!

The Department of Energy starts up three Bioenergy Research Centers, which draw from seven labs, 18 universities, and a bunch of private companies to look at making "cellulosic ethanol competitive with gasoline within five years." $375M in all, focused on breaking down woods and grasses. Idea is to commercialize, so better analogy, says the author, is Bell Labs--me like that one!

Cool call-out text:

Offer a termite this page, and its microbial helpers will break it down into two liters of hydrogen--enough to drive six miles in a fuel-cell car.

Cool stuff.

How fast to shift in the direction of Pickens' Plan on energy?

ARTICLE: "Surge in Natural Gas Cars Has Utah Driving Cheaply: Cleaner Than Gasoline, but Shortcomings Remain," by Clifford Krauss, New York Times, 30 August 2008, p. A1.

Neat article that details the rather rapid but underground shifting toward cars that run on natural gas in Utah, reducing their driving cost to something like 87 cents per gallon equivalent.

Utahans are hunting the Internet and traveling the country to pick up used natural gas cars at auctions. They are spending thousands of dollars to transform their trucks and sport utility vehicles to run on compressed gas. Some fueling stations that sell it to the public are so busy they frequently run low on pressure, forcing drivers to return before dawn in the last few months.

Energy independence around the corner? Hardly. But a clear sign that people will react to higher prices and that assumptions about the difficulty of switching over to new, alternative technologies is overblown. Amory Lovins' vision of the future seems a lot less fantastic when you see change pursued like this by ordinary people.

And no Manhattan Project was required!!

Cool connectivity tool for healthcare in India

WORLD NEWS: "India's Poor Get Health Care in a Card: Credit Plan Gives Nation's Neediest the Funding for Medical Treatment--and Tool for Changing It," by Jackie Range, Wall Street Journal, 26 August 2008, p. A10.

Addressing the nation's poorest 300 million, the key tool is a smart card, which contains personal data, fingerprints, etc. for an entire family, costing locals less than a buck. Why charge at all? The old Bill Easterly point: charge small fee and people value it more, but give it away for free and people often trash it, feeling it valueless.

Why so cool? Once you start such a program, the ancillary data collections can be magnificent, bolstering census and epidemiological understanding, economic development planning, etc.

My old bit: every avenue of connectivity requires a loss in personal privacy. That's the essential trade: I give you connectivity and you become more subject to code.

Differences in presidencies already seen

McCain will be a presidency built around crisis. It's what he loves.

Obama's presidency will be conducted at room temperature: calm, cautious, careful, calculating.

It depends on what turns you on right now: Exhausted after eight years of Bush's neverending crises? Or ready for more?

Tom's Foreword to The John Boyd Roundtable

The John Boyd Roundtable: Debating Science, Strategy, and War

I've spent roughly two decades trying to move the military back closer to society, believing that the Cold War, during which military thought had become myopically fixated on nuclear strategy, had unduly isolated the military mind from messy, real-world applications and their associated dynamics, all of which had grown vastly more complex in the meantime. Not surprisingly, when the Cold War ended and our military peered unblinkingly into that teeming global landscape, it recoiled in the direction of familiar memes and sought desperately to fence off its responsibilities from that of the non-uniformed universe—i.e., the Powell Doctrine. But that effort proved fruitless and frustrating, both operationally and conceptually. Military officers found themselves delving deeply into the literature of business and technology, searching for Rosetta Stones that would reveal crosscutting connections.

The far harder row to hoe, however, was to re-examine military strategy itself to better contextualize it within the wider world. Until 9/11 arrived, this was a lonely and unappreciated pursuit—almost esoteric. But with that fateful day, and the complex wars/postwars spawned, such efforts took on new urgency. Translating some “new economy” management paradigm wouldn't be enough; we needed to rebuild our understanding of conflict from the bottom up, mapping out all relevant networks and their dynamics. Codification of that new understanding would come in the form of new/updated doctrine, a process that now proceeds apace—at least among the ground forces. But just as important would be the conceptual bridge-building to the non-military world, because, as each new doctrinal publication points out, what the military learns most in these recent operations is not what it must seek to control in terms of outcomes and effects, but that which it cannot possibly hope to control.

To truly think in grand strategic terms is hard because, in order to communicate concepts to the universe of relevant players, one needs a sort of “middleware” language able to traverse domains far and beyond the most obvious one of warfare. As America heads deeper into this age of globalization—a global order fundamentally of our creating—our need for such bridging lexicons skyrockets. In a networked age, everything connects to everything else, so most of what constitutes strategic thinking nowadays is really just the arbitraging of solid thinking regarding the dynamics of competition, leveraging the surplus of conceptual understanding in one realm to raise such understanding in others. That may sound like there's “nothing new under the sun,” but more to the point, it admits that in today's still “unflat” world, the sun shines more brightly in certain locations and more dimly in others.

Today's military community must be able to speak in many tongues. It needs clear understanding of its own creeds and catechisms while simultaneously achieving a sort of operational non-denominationalism that will transform jointness into a serious “unity of effort” encompassing the rest of government, allies, host nations, and the private sector beyond. It needs, in short, a level of self-awareness never before achieved (e.g., this is what we do, how we do it, and how it links up to everything else), and a universal translator through which such descriptions can be transmitted to other communities.

This book of essays, based loosely upon an online roundtable discussion conducted by the authors concerning Frans Osinga's brilliant book, Science, Strategy and War: The Strategic Theory of John Boyd, builds upon Osinga's effort to explain and expand Boyd's efforts to create such strategic metalanguage, meaning a language that can be used to embed or contextualize strategic concepts among disparate domains. Boyd's legacy, as substantial as it is, survives only through such grammatical extensions, further pattern recognitions, and the like. Like any good gospel, his words are made living by means of social networks, so the fact that these essays emanated from bloggers engaged in online discussions is entirely appropriate to both Boyd's content and his ultimate aims.

Interesting rule-set adoption--and adaptation--on rendition

ARTICLE: "Military Sending Foreign Fighters To Home Nations: Bid To Ease U.S. Burden; Prisoners From Iraq and Afghan Wars Can Block Transfer," by Mark Mazetti and Eric Schmitt, New York Times, 28 August 2008, p. A1.

The CIA method has elicited a lot of international condemnation. The U.S. military method seems to be bridging some of those concerns, in effect winning some rule-set acceptance by accommodating the demands of the international community. Good stuff.

Our military has sent 200 foreign fighters home in the last two years, but the differences with the CIA program are important: 1) the prisoners can block the transfer; 2) the ICRC gets to interview all before any move; 3) the local government is informed about the transfer; and 4) the transit is direct from a military prison in-country to the home country in question, by-passing Gitmo.

The underlying logic is sound: you don't want to end up holding a lot of foreign nationals and the home nations are better equipped to deal with them. The downside, of course, is the lower standards for human rights in many of these places.

But clearly an improvement and a good example of what I talk about when I say it's one thing to propose a new rule and another thing to get other nations to buy into it.

The coming rise in global ag trade

ARTICLE: "The Doha round ... and round ... and round: After another failed summit, seven years of trade talks may become nine or ten," The Economist, 2 August 2008, p. 71.

Ag accounts for only 8 percent of total world merchandise trade, but you gotta believe that's going to rise with global warming--by quite a bit.

Doha tries to crack that hardest nut, because no trade is more tied to the land than agriculture--by definition. The failure, the magazine argues, "was rooted in the success of the last [round, known as Uruguay]." That deal required countries to convert their various trade barriers to straight tariffs. Since everyone feared a surge of imports, "special safeguard" duties were allowed as a temporary method, which of course morphed into a long-term "crutch." The Doha round is stuck on the question of how to reform them.

About as basic an argument as you can get

ARTICLE: Crusader Sees Wealth as Cure for Caste Bias, By SOMINI SENGUPTA, New York Times, August 29, 2008

Same fundamental one that brought "dalits" from the world over to America.

(Thanks: Kilngoddess)

$5T=overkill

ARTICLE: $5 Trillion Cash Pool Needed to Stop Rout, Ohmae Says, By Bei Hu, Bloomberg, Sept. 23, 2008

I also sense the usual Bush-Cheney overkill.

(Thanks: Jarrod Myrick)

Putin's limits displayed again

ARTICLE: "Mechel bashing: Vladimir Putin's attack on a mining company shows that nothing has changed," The Economist, 2 August 2008, p. 65.

Putin, having consolidated the oil and gas sector, has been moving recently into the metals. He pulls one of his usual shticks with the metals company Mechel, making vague threats in the direction of its main owner.

The result?

Mechel's share price plummeted, "prompting a dramatic fall in Russia's stockmarket," only accelerated now with Georgia.

Also like with Georgia, Medvedev's people seemed surprised by the attack.

The usual explanation seems to hold: a competitor of Mechel's engineered the attack through Putin.

Rule by law.

Putin and Russia's markets paid no price for destroying Yukos. That seems to be changing.