A Global Failure

Maldevelopment – Anatomy of a global failure
Samir Amin, Ed.
http://www.unu.edu/unupress/unupbooks/uu32me/uu32me00.htm
United Nations University Press, 1990

You can always trust the U.N. As the rest of the world was ending the Cold War and welcoming globalization, the United Nations continued prattling in pseudo-Marxist pseudo-intellectual hooey. Two excerpts follow.

The first is a contorted non-defense of OPEC price manipulation. More important than any argument it makes is the realization that allowing a sizeable fraction of governments to make oil be their main source of revenue leads to clap-trap like this. Almost incomprehensible, it argues that most OPEC dollars went to the west anyway, and the Oil Shock was mis-named and completely coincidental. It is from Chapter 2, The decade of drift: 1975-1985, Structural costs; the stakes; the struggle for the NIEO [New International Economic Order].

The claim of the NIEO coincided with the most serious post-war crisis. It was even argued that the oil price rise – the first (and as yet sole) indicator of the implementation of the Third World programme for the NIEO – was the ’cause’ of the crisis. A veritable campaign was orchestrated on this theme in 1973 and 1974, using every kind of argument and despite all the facts: the beginning of the international monetary crisis and the appearance of US external deficits since the mid-1960s, the precedence of stagflation, the scale and persistence of inflation rates irrespective of the calculable increase attributable to oil, the (still massive) placing of oil revenues on the Western finance markets, the modest role of petro-dollars in comparison with the movable assets of the transnationals in speculative fluctuations, and so on. The campaign has of necessity long hung fire: erosion of the oil price in the 1 980s and the reversal of the conjuncture (‘the end of the era of OPEC’) have never allowed it any funkier take-off.

funky?

The second is best read after Thomas P. M. Barnett’s weblog and The Pentagon’s New Map commentary. While some our trying to create a free global world, others prefer ghettoization. Few things are worse than infantilizing entire nations. But that’s what the U.N. does. The quote is also from Chapter 2, in particular The efforts of radical African nationalism: adjustment or delinking?

The discouraging prospect afforded Africa by capitalist expansion explains the frequency of the rejections and the high level of effort to ‘do something else’, to escape the simplistic logic of capitalism. But at the same time the objective conditions caused by this historical legacy make the task particularly difficult. This difficulty could be expressed in the formulation that the especially unfavourable external factor is combined with fairly unfavourable internal factors that have been largely shaped by that very external factor.

The response to the challenge of our age that we propose is celled ‘delinking’. The concept is to some extent half of an equation ‘adjustment or delinking’.

We shall not expand here on the theory of delinking but, to avoid any misunderstanding, say merely that delinking is not synonymous with autarky but only subjection of external relations to the logic of internal development (whereas adjustment means binding internal development to the possibilities afforded by the world system). In more precise terms, delinking is the refusal to submit to the demands of the worldwide law of value, or the supposed ‘rationality’ of the system of world prices that embody the demands of reproduction of worldwide capital. It, therefore, presupposes the society’s capacity to define for itself an alternative range of criteria of rationality of internal economic options, in short a ‘law of value of national application’.

Searching Google for “law of national application” reveals one result — that page. Fortunately this attempt at world sabotage seems unsuccessful.

No Transition Costs

On Social Security: The Washington Post Gets It
Jack Kemp
http://techcentralstation.com/120904C.html

Jack Kemp reports on the growing bipartisan push for Social Security reform, from the Washington Post…

For example, on August 14th, 2004, the Post editorialized that, “Mr. Bush’s sympathizers are right that Social Security privatization could reduce long-term deficits, and right that the nation should not be deterred by the transition costs.” The Post also discarded the class-warfare mantra that has consumed Democratic candidates and party loyalists for so long by reasoning that: “Privatization could also stimulate economic growth, boosting tax revenues and so strengthening the nation’s fiscal prospects via a second route.” They continued, “Private accounts would boost national savings” thus “savings would become more plentiful,” which, in turn, would “stimulate extra corporate investment and growth.”

The Washington Post editorial writers realize that Social Security, as it currently stands, is the “risky scheme.” The government can at any time raise taxes or cut benefits. Moreover, workers born after 1960 are expected to receive a real rate of return on their payroll-tax contributions of less than two percent. Alan Greenspan stated this in 1999; his estimate likely was generous. This measly return is not a fair deal for retirees — today or in the future — and is particularly bad for low-income people of color. Even workers who put their money in standard government-insured savings accounts will earn higher returns than the current Social Security system can provide.

The Washington Post has now followed up on that original piece with an even more promising editorial this week. This week’s piece entitled, “The Cost of Reform,” observed that creating personal retirement accounts without tax increases or benefit cuts would require “issuing perhaps $2 trillion in extra bonds over the next generation or so,” but added that the creation of these accounts “would generate an equal and opposing transition benefit” thus “the net transition cost should be zero.” Ditto for the effect on interest rates and the dollar. As the editorial makes perfectly clear, “Government borrowing would increase, but private saving would increase equally.” In other words, net national savings would not suffer. In fact, net national savings can be expected to increase, especially if personal accounts are accompanied by tax reforms.

Hat tip Tech Central Station

Helping the Terrorists

Over at the Corner

OVER THE BORDER [KJL]
And then there is the illegal immigration thing in Spanglish. The housekeeper (Vega) comes to America with her young daughter “economy class…”—they run across the Mexican border. And what does she do? Works her tail off, four jobs for $400-something a week I think her daughter narrator says at one point. Hardworking, decent, wonderful people are many of the illegals in the country. Totally the way W sees it. And totally true in so many cases…they just want the best for their families. It’s a single mother in this case whose husband inexplicably left her, as they do sometimes do.

But, of course, they’re still illegal…and if we’re not cracking down on her, we’re also not cracking down at the guy who wants to do us harm at a time when there is an active jihad being waged against us, among other things…

Meanwhile,

Homeland Security pick withdraws name
WASHINGTON — In a surprise move, former New York Police Commissioner Bernard Kerik abruptly withdrew his nomination as President Bush’s choice to be homeland security secretary Friday night, saying questions have arisen about the immigration status of a housekeeper and nanny he employed.

The common theme? United States federal policy supports terrorism.

In the first post, a fictionalization of a single mother working three jobs. Three jobs in the black market, because even though she wants to work, and employers want to hire her — even though there is work to do — our immigration policy hasn’t caught up to the fact.

In the second, the Homeland Security Secretary-designate withdraws his name over where or not a nanny paid taxes. Our top domestic opponent of Al Qaeda can’t work because of a nanny.

This is absurd. There is work to do, and immigrants want to work. We should expand legal immigration, reap the benefits of a growing economy, shrink the black market, and let our top fighters against Al Qaeda do their job.

Support working families. Kill terrorists. Reform U.S. immigration policies.

Update Powerline disagrees.

Democracy in Action

Iraq’s Odd man out?
The political currents are running against U.S.-backed Prime Minister Ayad Allawi
Kevin Whitelaw
U.S. News and World Report
December 12, 2004 Edition
http://www.usnews.com/usnews/issue/041220/usnews/20iraq.htm

Even as insurgent violence in Iraq continues to increase, U.S. officials have been reassured by the stalwart presence of Iraqi Prime Minister Ayad Allawi. But now, with the January 30 election fast approaching, there is an increasing realization in Washington that the administration’s key ally may not be in his job that much longer. In fact, U.S. News has learned that at a meeting two weeks ago, top Bush cabinet officials including Secretary of State Colin Powell and Defense Secretary Donald Rumsfeld discussed the prospect that Allawi might lose his job following next month’s parliamentary poll.
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In recent weeks, most observers have been more focused on whether the elections will even take place–and many politicians continue to fear that insurgents will target electoral workers and polling stations in an effort to disrupt the vote. But President Bush and the interim government continue to insist they will stick to the schedule. This means that time is running out for Allawi, whose efforts to fashion a unity slate of candidates to return him to his post have foundered. Most political observers now say that he is unlikely to be chosen to keep his job because many Iraqis believe he has failed to deliver on promises to improve security or deliver basic services.

Prime Minister Allawi (“No, Allow Me”) seems like a great man. He is unbelievably heroic for leading his nation at this desperate time. But even greater and more heroic is the new free Iraq. The identity of the next leader of Iraq matters much less than how he is chosen. May a free Iraqi people have a leader of their choosing, Inshallah.

Allawi, a secular Shiite, could still prevail, but it is not clear that the U.S. military is fully prepared for his increasingly likely departure. Allawi has given U.S. troops a fair amount of room to operate in Iraq–and backed them even during tough times like the siege of Fallujah. On the other hand, the ouster of the U.S.-backed Allawi could help convince Iraqis that the United States really is trying to build a democracy in Iraq.

Yup.

Hat tip Democratic Underground.

State of Fear

Remarks to the Commonwealth Club
Michael Crichton
San Francisco
September 15, 2003
http://www.crichton-official.com/speeches/speeches_quote05.html

So I can tell you some facts. I know you haven’t read any of what I am about to tell you in the newspaper, because newspapers literally don’t report them. I can tell you that DDT is not a carcinogen and did not cause birds to die and should never have been banned. I can tell you that the people who banned it knew that it wasn’t carcinogenic and banned it anyway. I can tell you that the DDT ban has caused the deaths of tens of millions of poor people, mostly children, whose deaths are directly attributable to a callous, technologically advanced western society that promoted the new cause of environmentalism by pushing a fantasy about a pesticide, and thus irrevocably harmed the third world. Banning DDT is one of the most disgraceful episodes in the twentieth century history of America. We knew better, and we did it anyway, and we let people around the world die and didn’t give a damn.

I can tell you that second hand smoke is not a health hazard to anyone and never was, and the EPA has always known it. I can tell you that the evidence for global warming is far weaker than its proponents would ever admit. I can tell you the percentage the US land area that is taken by urbanization, including cities and roads, is 5%. I can tell you that the Sahara desert is shrinking, and the total ice of Antarctica is increasing. I can tell you that a blue-ribbon panel in Science magazine concluded that there is no known technology that will enable us to halt the rise of carbon dioxide in the 21st century. Not wind, not solar, not even nuclear. The panel concluded a totally new technology-like nuclear fusion-was necessary, otherwise nothing could be done and in the meantime all efforts would be a waste of time. They said that when the UN IPCC reports stated alternative technologies existed that could control greenhouse gases, the UN was wrong.

There’s much, much more. Please read

Hat tip Peter Robinson, The Corner.

Left, Right, Social Security

Why Are Democrats Intent on Alienating Young Workers?
James Lileks
Newhouse News Servic
http://www.newhousenews.com/archive/lileks120804.html

Borrow, Speculate and Hope
Paul Krugman
http://www.nytimes.com/2004/12/10/opinion/10krugman.html

Why the Left Should Favor Social Security Privatization (and the Right Should Oppose It)
Arnold Kling
http://www.techcentralstation.com/121004A.html

Wall St Group Says Social Security Reform No Feast
Herbert Lash
http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=7045258

Another right-wing rant from the Newhouse Network…

Everyone knows the system will explode in a shower of shredded promissory notes at some point. Every year the drop-dead date gets massaged and moved around, but you have a great number of people who read the new Projected Year of Doom, run the numbers in their head, and think: Well, I’ll be dead.

… except, Paul Krugman agrees

First, financial markets would, correctly, treat the reality of huge deficits today as a much more important indicator of the government’s fiscal health than the mere promise that government could save money by cutting benefits in the distant future.

After all, a government bond is a legally binding promise to pay, while a benefits formula that supposedly cuts costs 40 years from now is nothing more than a suggestion to future Congresses. Social Security rules aren’t immutable…

But then again, Krugman might not be too reliable…

Second, a system of personal accounts, even though it would mainly be an indirect way for the government to speculate in the stock market, would pay huge brokerage fees. Of course, from Wall Street’s point of view that’s a benefit, not a cost.

v. the “right wingers” at Reuters

NEW YORK (Reuters) – Plans to reform the U.S. Social Security system by allowing people to invest in stocks are unlikely to result in a feast for Wall Street if a retirement plan for federal workers is copied, a report on Thursday said.

If investment choices are limited to a small selection of index funds along the lines of the Thrift Savings Plan, those accounts will generate a modest $39 billion in fees over the first 75 years, the Securities Industry Association said in a report.

That represents just 1.2 percent of estimated revenue for the entire financial sector during that span of time, said Rob Mills, director of industry research at SIA, in the report.

Perhaps a compromise from Tech Central Station?

To be fair, Krugman and other economists on the Left would like to see Social Security paid for in part by “general revenues,” meaning income taxes. If that were done, it would serve to reduce the regressivity of Social Security.

However, there is one important difference between keeping Social Security as it is and switching to privatization. Under the current system, Social Security’s liabilities will continue to be funded by payroll taxes. However, under privatization, the transitional debt would be repaid using — guess what? General revenues! In other words, privatization is a vehicle for changing Social Security’s medium-term funding mechanism from payroll taxes to income taxes. It is exactly what the Left presumably wants, and what the Right presumably opposes.

Creating private accounts for social securities allows young workers to actually receive their benefits, protects older workers, and gives us a much more stable pension system. Nations and corporations with “defined benefit” systems, such as France, Russia, and the dying steel mills, are in terrible shape. I’m thankful we have a Ppresident like George W. Bush who is willing to take risks to give us a better way.

The Next Iraqi Government

The New York Times reports on the United Iraqi Alliance, a grand coalition that will certainly be the dominate voice in the new Iraq.

It includes The Dawa Party, The Supreme Council for the Islamic Revolution in Iraq, The Mahdi Army (remember when they staged their “uprising”), and The Iraqi National Congress (whose leader, Ahmad Chalabi, is the uncle of the first procsecutor against Saddam for war crimes). For good measure the United Iraqis have some token candidates from minority groups as well.

BAGHDAD, Iraq, Dec. 8 – Iraq’s leading Shiite political groups agreed Wednesday to unite under a single banner, a move that could help them win a dominant share of votes in the coming national elections.

The agreement came as several Sunni parties, including one that led a broad movement to delay the elections for six months, registered to field candidates.

Shiite Arabs, representing 60 percent of Iraq’s population, have long been dominated by the Sunni minority, and they see the elections as a chance to turn their majority status into political power for the first time.

The new coalition, called the United Iraqi Alliance, brings together many of Iraq’s best-known political figures, including the renegade cleric Moktada al-Sadr and Ahmad Chalabi, the former exile once championed by the Bush administration. It is composed mostly of Shiite parties, but also includes Sunnis, Kurds, Turkmens and tribal leaders from across Iraq, in what the organizers hope will be seen as a diverse ticket with broad national appeal.

Relatedly,

News of the agreement came as fighting continued in at least two cities. In Mosul, far to the north, one commando with the Iraqi Interior Ministry was killed and six were wounded in a gun battle that broke out when insurgents attacked a convoy, officials said.

If they wish to reimpose apartheid, the Sunni terrorists need to stop this. The people of Iraq are united for freedom. The Sunni terrorists are on the wrong side of history.

The Monsters (2)

Japan to Suspend Aid to North Korea,” Digital Chosunilbo, 9 December 2004, http://english.chosun.com/w21data/html/news/200412/200412090050.html.

Developments and fallout on the previous post.

Daily Chosunibo has a different take on North Korea’s new criminal law

N.K.’s Revision of Criminal Law Reflects Instability

North Korea amended its Criminal Law in April by reinforcing penalties for acts that threaten to undermine the regime and incorporating a horde of new articles to regulate new crimes, hinting at immense change that the regime is struggling to control.

The revision reflects greater change in the reclusive state than was previously imagined, suggesting that people’s lifestyles, ways of thinking and the speed with which information is circulated are all transforming rapidly.

With no sign of improvement in the North’s escalating financial and food crises, the populace has to find extra-judicial ways of surviving. A collapsing system of food rationing has led to the rampant spread of illegal money-making enterprises, with 80-90 percent of the population making forays into the black market to support themselves. As a result, the new Criminal Law attempts to impose greater state control of the populace.

If this is true, it is great. One reason for making laws more severe is that chaos is growing. Beware of wishful thinking, but if up to 90% of North Koreans are economic criminals, we are seeing a stalinist state in dire decline.

In the same paper,

Japan to Suspend Aid to North Korea
The Japanese government has suspended its plan to ship 125,000 tons of food aid and US$3 million (W3.17 billion) in medicine to North Korea after DNA tests revealed the remains of a Japanese kidnap victim turned over by Pyongyang were false.

Asia Times elaborates

A week ago, sanctions seemed highly improbable, now they seem like a real possibility. This is a development that is worrying for the leadership in both countries, and alarmingly, neither is fully in charge of the forces driving the debate.

If Japan can help collapse North Korea, it marks the return of the Land of the Rising Sun as a real player in the region. Go get ’em, Nihon!

Removing the I.V. from Tyrants

OPEC Poised To Cut Oil Output Despite Consumers’ Pleas
Erik Burns and Simeon Kerr
http://www.ecommercetimes.com/story/news/38865.html

Why the Future is Hybrid
The Economist
http://www.economist.com/science/tq/PrinterFriendly.cfm?Story_ID=3422941

Fly Me to the Moon
Tom Friedman
http://www.nytimes.com/2004/12/05/opinion/05friedman.html

Results 1 – 10 of about 3,440 for Saudi terrorism
Google News
http://news.google.com/news?q=Saudi+terrorism

The Saudis are worried

Despite the pleas of the leading oil-consuming nations to keep the taps open, OPEC looks poised to commit to cutting existing production levels, with the prospect of more to come next year.

Fearing a further fall in prices after they dropped by a quarter in recent weeks, ministers from the Organization of Petroleum Exporting Countries arriving here in Cairo ahead of Friday’s meeting said there was a growing consensus the first step would be to rein in output to the current quota ceiling of 27 million barrels a day.

After meeting with Saudi Arabia and ministers from two other Gulf producers, Kuwait’s Oil Minister Sheikh Ahmad Fahad Al-Ahmad Al-Sabah said he estimated overproduction of around 1.7 million b/d.

Al-Sabah said all OPEC members were committed to stricter compliance with the self-imposed output cap, adding that since most crude deliveries are already settled for January, the retrenching could begin from Feb 1.

OPEC would then meet again in February to assess market conditions and decide whether a more drastic move — lowering the ceiling — would be necessary.

The reason is clear

When did the Soviet Union collapse? When did reform take off in Iran? When did the Oslo peace process begin? When did economic reform become a hot topic in the Arab world? In the late 1980’s and early 1990’s. And what was also happening then? Oil prices were collapsing.

In November 1985, oil was $30 a barrel, recalled the noted oil economist Philip Verleger. By July of 1986, oil had fallen to $10 a barrel, and it did not climb back to $20 until April 1989. “Everyone thinks Ronald Reagan brought down the Soviets,” said Mr. Verleger. “That is wrong. It was the collapse of their oil rents.” It’s no accident that the 1990’s was the decade of falling oil prices and falling walls.

The technologies exist

While it is uncertain whether the car will be mass produced, it is clear that a diesel-electric hybrid would make for an extremely frugal vehicle. A study by the Laboratory for Energy and the Environment at the Massachusetts Institute of Technology, which looked at energy use over the course of a vehicle’s life, predicts that by 2020, diesel hybrids could achieve the same energy-efficiency and greenhouse-gas emissions as fuel-cell cars powered by hydrogen made from natural gas. The difference is that diesel-hybrid technology is available today.

The challange is formidable

So why are diesel hybrids taking so long to appear on the roads? Hybrid diesels impose a double price premium, explains Lindsay Brooke, an analyst at CSM Worldwide. Combining a diesel engine, (which costs around $2,000 more than a petrol engine) with a hybrid powertrain (which adds another $3,000 or so) would make for an expensive proposition. Systems to treat the exhaust would impose further costs. The prospects for diesels and diesel hybrids are particularly dim in America, where regulations in California (and, from 2007, nationwide) require diesels to be as clean as petrol-driven cars. Some progress has been made: particulate filters can now eliminate more than 90% of diesel soot. But traps for nitrogen oxides remain a challenge.

But we have done great things before

If President Bush made energy independence his moon shot, he would dry up revenue for terrorism; force Iran, Russia, Venezuela and Saudi Arabia to take the path of reform – which they will never do with $45-a-barrel oil – strengthen the dollar; and improve his own standing in Europe, by doing something huge to reduce global warming. He would also create a magnet to inspire young people to contribute to the war on terrorism and America’s future by becoming scientists, engineers and mathematicians. “This is not just a win-win,” said the Johns Hopkins foreign policy expert Michael Mandelbaum. “This is a win-win-win-win-win.”

We need to end the huge never-ending subsidy that is foreign oil. To stable, free, and civic societies, like Norway or Alaska, oil is a nice cushion. But in the barbary states it retards progress, corrupts governments, and creates a terrorist society. A $5,000 federal tax on new vehicles, fully refundable if spent on hybrid-diesel or similar technology, would be an incredible step forward

It would dry up terrorist states. It would cause reform. Heck, it would help our balance of payments. It’s the right thing to do.

The Open Air Prison

Returning Fallujans will face clampdown,” by Anne Barnard, Boston Globe, 5 December 2004, http://www.boston.com/news/world/articles/2004/12/05/returning_fallujans_will_face_clampdown/ (from Democratic Underground).

Life in Fallujah…

The US military is drawing up plans to keep insurgents from regaining control of this battle-scarred city, but returning residents may find that the measures make Fallujah look more like a police state than the democracy they have been promised.

Under the plans, troops would funnel Fallujans to so-called citizen processing centers on the outskirts of the city to compile a database of their identities through DNA testing and retina scans. Residents would receive badges displaying their home addresses that they must wear at all times. Buses would ferry them into the city, where cars, the deadliest tool of suicide bombers, would be banned.

This is the bloody end of apartheid. More and more, Sunni Arabs are realizing that they have lost. Their actions have alienated the Kurds and the Shia (even the Grand Ayatollah Ali al-Sistani didn’t condemn the Fallujah assault), and their political fate is bleak. In South Africa, the Afrikaaners were able to join the ANC and loose influence quietly. Imagine them, but more hated.

In 1946 Romania, Hungary, Czechoslovakia, and Poland expelled their German resisdents. In Iraq, we’re just creating perpetual prisons.

The tDAxp eXPerience