Spineless in Washington, DC

Today's WSJ editorial on Obama, the "Chicago" politician who chose the "pragmatic" route.

US - A Third World Country?

Since WWII US has been a major exporter of technology to less developed countries often financed by US Export Import Bank.

How times have changed.

In today's Wall Street Journal (Oct 30, 2009) I cannot for some reasons access there is this story:
..."A Chinese wind turbine company, with financing help from Beijing, has struck a deal to be the exclusive supplier to one of the largest wind farm developments in the US.

The 36,000 acre development in West Texas would receive $1.5 billion in financing through Export-Import Bak of China."...

One tribesman [in Pakistan] bluntly told Mrs Clinton: "Your presence in the region is not good for peace."

Can Washington, DC please take a "hint" and leave and let Pakistan deal with whatever enemies they have? The drones are killing both enemies and innocent Pakistanis as "collateral damage". Any wonder locals are equating US fire power as their 9/11 as one Pakistani reporter tried to get across:

..."We are fighting a war that is imposed on us. It's not our war. It is your war," journalist Asma Shirazi told Clinton during the women's meeting. "You had one 9-11. We are having daily 9-11s in Pakistan."

The whole dispatch is here.

Peace with Honor. Leave now.

If it was not clear before, it should be clear now that the presence of US forces in NOT welcome in Pakistan and by extension in Afghanistan, however well-intentioned the original goal may have been. Just read the overwhelming negative vibes coming from those who had the opportunity to interview and talk to US Secretary of State, Hilary Clinton.

It can be safely assumed Mrs Clinton's handlers had already screened out those who never could be friends. So, those who managed to be sitting close to her had to be considered at least neutral if not friendly.

A cursory reading of this article here should tell you if these were friends, US didn't need enemies.

Since your friends want you to leave, then we should leave and by doing so with honor. We have done our bit. Now, over to your mis amigos Pakistanos.

Pakistan, the next Domino? 2

Latest news report:

..."LAHORE, Pakistan — Secretary of State Hillary Rodham Clinton, on a visit meant to improve relations with Pakistan, strongly suggested Thursday that some Pakistani officials bore responsibility for allowing Al Qaeda terrorists to operate from safe havens along this country’s frontier.

U.S. Secretary of State Hillary Clinton during her visit to the historical Badshahi Masjid in Lahore on Thursday.
“I find it hard to believe that nobody in your government knows where they are, and couldn’t get to them if they really wanted to,” she said to a group of Pakistani journalists on her second day here. “Maybe that’s the case; maybe they’re not gettable. I don’t know.”...

Strong words. Harsh reality. Pakistan is failing as a state. And it is armed with nuclear weapons. This will be ugly. Unless Pakistan pulls itself together and root out its Al Qaeda/Taliban/Fundamentalist cells within its government, this is going to be one big explosive situation.

Anyone wants to bet one way or another? I bet on buying more gold.
The entire article from which the excerpts came is here.

History Lesson in Afghanistan

“Our soldiers are not to blame. They’ve fought incredibly bravely in adverse conditions. But to occupy towns and villages temporarily has little value in such a vast land where the insurgents can just disappear into the hills.” He went on to request extra troops and equipment. “Without them, without a lot more men, this war will continue for a very, very long time,” he said.

The "he" was Sergei Akhromeyev, the commander of the Soviet armed forces who was addressing the Soviet Union’s Politburo on Nov. 13, 1986.

In USSR as in USA politicians in suits with no little or no military experience loved to wage wars.

The chief of the Soviet Defense Staff, Marshal Nikolai Ogarkov, raised doubts shortly before Soviet forces were dispatched on Christmas Day 1979. He told Dmitri Ustinov — the long-serving defense minister who had been a favorite of Stalin — that experience from the British and czarist armies in the 19th century should encourage caution. Ustinov replied: “Are the generals now making policy in the Soviet Union? Your job is to plan specific operations and carry them out ... . Shut up and obey orders.”

Ogarkov went further up the chain of command to the Communist Party boss, Leonid Brezhnev. He warned that an invasion “could mire us in unfamiliar, difficult conditions and would align the entire Islamic East against us.” He was cut off mid-sentence: “Focus on military matters,” Brezhnev ordered. “Leave the policymaking to us.”

The quotes in bold came from this article here.

How to get into elite schools

First off, getting into famous, highly ranked schools will only become more difficult in future years. Simple arithmetic: demand vastly outstrips supply.

Even at Princeton where "legacy" kids with a family name and fortune will find it difficult for the same reason as above. So what do parents do? Interesting report from Princeton here indicates an inevitable result. As in politics, donors hedge their bets by giving $$ to opposing political parties, now parents give money to a number of desirable colleges other than their own alma mater to increase the chances of admissions of their talented children.

Colleges, mostly strapped for money, will also find donations desirable and yet constraining. You cannot keep taking money from donors without taking care of their children.

This begs the obvious question: what are those colleges going to do with poor but talented students?

Prejudice at Princeton? Link repaired

In the original blog on Oct 23 the link to a Daily Princeotnian report did not work, for reasons I don't understand. Here is the missing report.

I thank a reader for pointing this out.

Why the Drug trade in Afghanistan is Big.

Who says American has learned any lessons from its failure in the Vietnam War?

The drug lord, brother of Prime Minster in Afghanistan, is a CIA protege. It's Vietnam all over again when the CIA even ran an airline, Air America, to move the narcotics for the drug traffickers in return for intelligence among the hill tribes. CIA also had to "please" the S Vietnam generals who demanded Air America service to move the merchandise of which they had a financial stake.

So, now it's Afghanistan.

Here is the NY Times report.

Whenever a country no longer cares about "ends" and "means", it loses any moral high ground and starts the descent to immorality losing the support of locals whom America went to war to "save".

And so, America lost the Vietnam War and will lose it in Afghanistan. Sad.

Why US Should Leave Afghanistan -- Yesterday

I am posting the 4 page resignation letter of Marine Captain Mathew Hoh. He details in remarkable clarity what he considers the fatal flaws of the US war thinking.

Anyone who does not want the US to waste further its own soldiers and resources at a time when the national economy is weak should read it in full here.

Afghanistan -- Where empires go to die

Just as US is debating how many additional troops to send to Afghanistan the enemy made its presence reverberate by successfully dealing a deadly blow to US troops -- on their own turf at their own timing.

It smells like a trap.

The enemy is goading the US to send more troops to "defend" its current force. The more US sends, the more the enemy can kill turning Afghanistan into the 21st century version of the "burial ground" of empires as that nation had done in the past Alexander the Great, the Persians, Moguls, Russia, England, the communist USSR and now most probably the US.

Read the news here.

Has anyone ever wondered why is it the ruling elite in the US never seems to have read history? It seems the senior political and military leadership does not seem aware of how all other empires had failed since ancient Greece? it raises questions as to what is the worth of a degree from Harvard, Yale, Princeton or West Point.

One possible explanation is how a "liberal arts" education has become a mish-mash of subjects without providing the students, the future elite, any sense of historical continuity. Back the days of the British empires, the ruling elite had to read all the Classics known as the "Greats". No university in the US except Columbia and St. Johns now enforce a "core" education onto their students.

The "core" at Harvard and others is still essentially a hodge podge of subjects.

Afghanistan - Albatross 2

One military resignation in protest against the war does not a "tsunami" make. However, this officer's argument strikes at the heart of why the war will fail. It's elementary:

..."But many Afghans, [Marine Captain Mathew Hoh] wrote in his resignation letter, are fighting the United States largely because its troops are there -- a growing military presence in villages and valleys where outsiders, including other Afghans, are not welcome and where the corrupt, U.S.-backed national government is rejected. While the Taliban is a malign presence, and Pakistan-based al-Qaeda needs to be confronted, he said, the United States is asking its troops to die in Afghanistan for what is essentially a far-off civil war"....

The entire Washington Post article is here.

Obama is reportedly going to send more troops to Afghanistan. The albatross can only get heavier and the quagmire deeper if the ABC News report here is correct.

Modernizing Afghanistan

I thank Mark, a Vietnam War historian, for alerting me about the folly of "modernizing" any nation if it is not ready. Read this here

US tried to "modernize" Afghanistan in the 1950's and utterly failed. Now, it is trying to "save" Afghanistan from backwardness all over again and at the same time waging a war that is doomed to fail.

Sad.

Pentagon vs Obama?

Seymour Hersh is a fearless reporter who made his reputation revealing the My Lai massacre in Vietnam that happened 40 years ago. He was a freelance reporter with far fewer resources than the major papers and networks had.

Hersh has yet to make any serious mistakes in his writing. It is with this background in mind that I read with a deep sense of concern his piece on the Pentagon here.

Insider Trading is "Good"!

George Mason University's Department of Economics is a well-know bastion of "laissez faire" thinking that at times would even make Chicago's "cathedral" of free market economics blush.

Here is a defense of "insider trading" by one of GMU's professors. The article is here.

Soros On Wall Street Bonuses

You can always count on George Soros for straight talk. He is intellectually honest. Without that integrity you cannot last as long as he has as one of the most successful investors in history. Honesty applies in particular to his own mistakes.

His view here on why Wall Street bonuses are not justified echoes many others, including me, who have spoken out on this issue.

What is not sufficiently stressed in this whole Wall Street pay and bonus scandal is:

1) Wall Street is able to do what it wants is a direct result of lax terms and conditions attached to the various rescue packages courtesy of taxpayers via the government. This negligence is either premeditated or a result of incompetence.

2) Shareholders of these firms paying huge bonuses are conspicuously silent for peculiar reasons.

3) The Boards of these firms with huge payouts who in theory represent the shareholders are conspicuously silent. In fact none of the board members of any failed firms have received any public reprimands. The boards are ultimately responsible for what the firms do.

Since Team Obama had dropped the ball, due to incompetence or otherwise, it is really too late to do a retroactive claw back of bonuses paid out according to contracts.

Those contracts should have been put on ice all done legally as a "sine qua non" of bailout BEFORE the rescue checks were delivered to Wall Street on a silver platter.

Prejudice at Princeton?

Rightly or wrongly Princeton has always been perceived as a welcoming campus for the rich, famous and "white". That does not include "Jews" who have had a long history of encountering anti-semitic sentiments on the famous campuses.

Columbia to its credit was the first IVY college to open its arms widely to accept talented students who were Jewish. Franklin D Roosevelt, yes that famous man, who once sat on Harvard Corporation that governed the university, was alarmed by the increasing number of Jewish students at Harvard. He said: "We cannot allow so many Jews to come to Harvard".

Since then Harvard and others have put that kind of mentality behind them. Princeton, the northern-most southern college in America, appears to be slow in adjusting. Or perhaps it has chosen to be where it is.

Read this article from the Daily Princetonian

The Most Expensive US Colleges

If you think going to Yale or Princeton will break your bank, think again. This list here will surprise you. Why this is so is another quiz!

Afghanistan, the growing albatross

Nicholas Kristoff's excellent summary of the USA no win policy in Afghanistan still contains to my mind a vain hope. He thinks by holding US presence at the current level is the right way,. He is probably right. But the end result, contrary to Kristoff's prognosis remains the same. The US will have to leave Afghanistan humiliated one way or another. The article is here.

New York Times has been running a riveting series of "Held by the Taliban" by a reporter who managed to escape from a Taliban camp. The first installment is here.

One observation caught my attention in his Part 4 installment published yesterday because it confirms the unpleasant truth about the fundamental flaw of US Afghan war policy using brute and massive force as if it were fighting a conventional war even though it is called a counter-insurgency war.

Second, it confirms the mindless obsessions with "body count" in gauging the progress of the military campaign, the same mistake that plagued the Vietnam War mindset. The truth is for every Taliban or for that matter, Al Qaeda, fighter killed, two step forward to join. For every senior fighter killed, the depth of its rank is sufficient to provide "promotions" to take the place of the fallen.

Here is the tell-tale paragraph:

..."A stalemate between the United States and the Taliban seemed to unfold before me. The drones killed many senior commanders and hindered their operations. Yet the Taliban were able to garner recruits in their aftermath by exaggerating the number of civilian casualties...."

Monetary Economics 101 -- Quiz Answers

Ok folks. Here are my answers to the quiz I gave you yesterday. If you feel different, post your comments.

1) Why is China selling T Bills = quantitative easing of US money supply?

Answer: Selling T Bills by China to the US means Uncle Sam is buying them. Buying T bills means more US dollars are injected in the monetary system which is equivalent to quantitative easing as Paul Krugman stated.

No other countries except the US would a) take on the sizes of T Bills China wants to sell, and b) why would they buy more US T Bills when the currency is likely to go lower anyway. In other words, China can only sell the T Bills back into the US system. Either the US government buys them back immediately or they will end up buying them at some point as another buyer cashes in at maturity.

2) What "harm", if any, would that cause to Japan and Europe?

Answer: Krugman assumes China would use the sales proceeds from T Bills to buy non-US currencies such as Yen and Euro driving them higher hurting their exports.

2) In what way, if any, US has "nothing" to fear?

Answer: I believe Krugman assumes China would prefer to have a low US dollar to which the RMB is more or less tied. The dollar is also the universal unit of exchange in global trade.

In this logic while Beijing keeps bitching about the lower dollar that is diminishing the value of its $2.2T + reserves -- if translated into Euro or Yen, the Chinese government is also benefiting from a higher than otherwise rate of exports from a lower dollar.

Then there is the issue of liquidity. The dollar remains the most liquid global currency. China if it tries to diversify large amounts of its reserves into Euro or Yen will be chasing after higher Euro or Yen caused by its own buying.

Once the currency market knows China is buying Euro or Yen, these 2 currencies will go through the roof as traders will front run Chinese purchases forcing Beijing to pay higher and higher for non US currencies. Don't forget the market for Euro and Yen are much smaller than US$. Very quickly China will be overpaying.

3) In what way, if any, China selling US dollars massively could be negative?

Answer: I will still let you think this through. Until I post my own view, have fun.