Saturday, September 27, 2008

Space Race 2: Electric Boogaloo

Well, still feeling ranty, so let's stay on the China vs. USA theme for another post, shall we? Let's go back to space, where Chinese astronauts are currently orbiting Earth aboard the Shenzhou VII after blasting off from a remote desert site on Thursday. The most important part of the mission was accomplished today when Zhai Zhigang made the first Chinese "footprint in space" slipping out of the orbital module for a spacewalk or extravehicular activity (EVA). Following my last post about growing Chinese power, this is an important step in the development of the Chinese space program as they hope it will help them master the technology for docking two orbiters to create China’s first space station in the next few years, as well as to put a man on the moon in 10-12 years. As if to magnify the glaring difference in the trajectories of the two powers, the same day of the Chinese blast off saw law makers in the US take an important step to ensure any kind of American presence in space beyond 2010.

US lawmakers in the House of Representative passed a funding bill in which was buried an extension of NASA's exemption from the Iran, North Korea and Syria Nonproliferation Act, or INKSNA. The extension of the waiver is necessary for the US to continue to purchase flights from Russia aboard their Soyuz capsules, important as they will be the only vehicles capable of visiting the space station once the life of the shuttle fleet is reached in two years time. The three year lead time before 2011 is necessary as that is how much time it takes the Russians to build the crafts. The Senate still needs to pass the bill before it goes before the president to be signed. Of course the bill has become much more contentious in light of the recent Russian-Georgian conflict and reassertment of Russian power in other areas. Worry over the 'flight gap', the time between shuttle retirement and the Orion capsule replacement begins operational flight in 2015, has also caused NASA to consider pushing back shuttle retirement plans. However, this option brings with it 1-in-8 odds of losing a shuttle and crew if it adds 10 flights after 2010 (2/year until 2015) according to NASA Administrator Michael Griffin.

The only other option is to hope for a private-sector company to come up with a third alternative. Heck, innovation and a thriving capitalist system used to go hand in hand. Even if capitalism is in it's death throws, maybe some of that innovation remains. NASA allocated almost $500 million between now and 2010 to support California-based SpaceX and Oklahoma-based Rocketplane Kistler, winners of the first round of the Commercial Orbital Transportation Services (COTS) program, as they develop new spacecraft that could bring supplies and crews to the space station. Unfortunately, SpaceX has taken three swings at launching into space and seem to have struck out, with their last test failure coming August 2nd with a payload that included a couple NASA satellites and one for the Department of Defense. Did I mention it was also carrying the ashes of James Doohan, Scotty from Star Trek? Rocketplane Kistler, besides having a silly name, didn't even get to the launch phase, as they missed deadlines and had the funding pulled in October 2007. Two other companies, Virginia-based Transformational Space and the Canadian-American Planetspace venture, are getting free advice from NASA on their own spaceship development efforts. Don't forget about Amazon.com founder Jeff Bezos' Blue Origin or Richard Branson's Virgin Galactic either.

Meanwhile, the Chinese are moving steadily forward. After their first manned space flight in 2003, they sent up another crew in 2005, both missions were successful. Perhaps the success has become a little too expected as the only glitch of this third mission came via the Xinhua News Agency who posted an article on its Web site describing a successful launch hours before the rocket even left the ground. The Chinese space progress has been described as a sustained, methodical effort, which seems to be the trademark of much of the rest of China's progress over the past decade. Like clockwork, they've begun, made inroads, then eventually passed the US in most every field from the Olympics to pollution. Their target date for reaching the moon roughly coincides with the plans for NASA's objective of returning in 2020 as part of the Constellation program. The stars seem to be aligning for a new space race a la the 1960's USA vs. USSR that many of us have only read about. Perhaps it'll be enough to light a fire under the American spirit of competition, otherwise China will soon have the lead in space too.

Thursday, September 25, 2008

How to lose friends and influence

"Reputation, reputation, reputation! O I have lost my reputation! I have lost the immortal part of myself, and what remains is bestial."

- Shakespeare, Othello, Act 2 Sc. III

The Harvard University professor Joseph S. Nye Jr. first coined the term "soft power" back in 1990 to describe the ability of a political body, such as a state, to indirectly influence the behavior or interests of other political bodies through cultural or ideological means. It's now identified as the third form of power that nations can wield, with the other two being "hard power", military might, along with economic strength. Power is the ability to influence the behavior of others to get the outcomes one wants; you can coerce others by threatening them with a stick, you can induce them with payments, or you can simply attract or co-opt them. The year 1990 could be seen as a high water mark for the USA for all three forms of power: the symbolic defeat of communism with the fall of the Berlin Wall the previous year, the US and its allies were about to unleash the 'Desert Storm' invasion of Iraq and the poor deprived citizens of Moscow were finally able to order their first Big Mac. American hegemony was sealed, the new world order of American led globalization would usher in a new era of peace and prosperity. However, Russian bombers may soon be stationed in Cuba as naval battle groups are sent to Venezuela to perform joint exercises, while Chinese investors are exchanging ideas with Brazilian ethanol producers and Iran can sit tight in the knowledge that the security council will block any meaningful resolution against it at the UN. So, what's happened here?

While the US military hasn't been overwhelming in its performance in Iraq or Afghanistan, you can't deny that it is still the unquestionable hard power force in the world. The trouble is that the group of people who have come into power over the last 20 years or so have seen American military preeminence as a passport to do what they want. This view, that Charles Krauthammer has called “the new unilateralism" holds that the United States is so powerful that we can do as we wish and others have no choice but to follow. They have used that view as a way of applying American military power to all sorts of problems. As for soft power, well the current administration has finally come around in the past couple of years to admit that it is relevant. As recently as 2004, then US Secretary of Defense Donald Rumsfeld professed to not even understand the term soft power, claiming popularity was too ephemeral to be measured. When the actions of the current administration are combined with the popularly held view that they didn't even enter power democratically, the effects are easy to see in a growing tide of anti-Americanism. Oh oh, I'm feeling quite ranty, this could be a long post, bear with me.

That we have come to a point where outright purchases of private sector companies is not only proposed but accepted by many who claim to be defenders of free markets bodes ill for the future of American society - Ron Paul
The most important source of US power for the past century has been its financial weight. Now that the market roller coaster of the past week has resulted in what is essentially the nationalization of the financial industry, that era has officially ended. Time magazine went so far as the refer the the US as the United States of France. Although history may look back at these events as the turning point, the loss in economic power has been a long time coming. On October 26, 2000 you could buy a Euro with 82.52 US cents. While it has bounced off its low, the markets told the US about its confidence in the economy Monday as the Euro rose to US$1.4824 in afternoon trading, up from the $1.4470 on Friday. Meanwhile oil was up over $25 at one point, but settled for a $16.37 gain to end at US$120.92 and gold shot up $44.30 to settle at US$909 an ounce. In that fateful year of 1990, the US also moved from a negative to a positive current account balance as it managed to record its last positive figure in 1991, just shy of $3 billion. This essentially means that the US has been buying more goods (and services) from abroad than it is selling, with the flow of foreign funds into the US financing the difference. In other words, foreigners are purchasing such things as US Treasuries, shares in companies, and even firms or property. The deficit is precisely the amount foreigners must acquire in US denominated assets to keep the dollar from falling. Up to now, foreigners have been willing to finance the shortfall because of their belief in the American way. The past week not only has investment banking died, the American way could die with the proposed banking bailout package, result, goodbye dollar as the world's currency.

The typical knee-jerk reaction to the above problem has been to point the finger at China. Their currency is undervalued, or they aren't importing enough American products. However it's China that is winning the power war where it really matter as coincidentally they have the world's largest current account surplus, $370 billion. Hard power, they've definitely got that. Soft power we can start with the Olympics, where, although the shine was tainted a bit by the Tibet protests, still was an overwhelming success in the world's opinion. Beijing aggressively courts the governments of countries with diplomacy, trade deals, debt forgiveness, and aid packages. China's no questions asked policy is diametrically opposed to that of the US and the EU and has resulted in a spreading Chinese influence globally. Right now, your kids wear Chinese clothes and play with Chinese toys. It is not at all inconceivable that their kids will listen to Chinese pop and prefer Chinese movies. The inhabitants of southeast Asia are already doing so. At least there's always the lingua franca of English to fall back on, right? Wrong, the Chinese are working hard to change that in their favour too. In 2005, China's education ministry announced a new initiative to boost Chinese-language teaching in American universities and language institutes around the world. Beijing University, China's most prestigious, announced a visiting-scholars fund to encourage foreign PhDs to study in China. More than 110,000 overseas students from 178 countries studied in China in 2004. This figure marked a ten-year high, and an increase of over 40 percent from 2003. "There's a belief that to get ahead, it would behoove you to go to China, in the same way that ten years ago people said the same about the United States.

While the US has focused on using its military to secure influence, particularly in respect to oil, China has signed oil and gas exploration contracts around the world; with Brazil, Ecuador, Bolivia, Colombia, Venezuela and Cuba in the Americas; in the Central Asian states such as Uzbekistan and Turkmenistan, and China's oil exploration interests extend to Burma, Vietnam, and Malaysia in southeast Asia; imports of crude oil also constitutes the bulk of China's imports from African states. The Chinese approach to foreign relations is officially termed "noninterference in domestic affairs." Unlike the hypocritical policies of the US, China doesn't mix business with politics and argue that such attempts by foreign nations to discuss democracy and human rights violate the rights of a sovereign country. While the US disregards international law in places like Iraq or Guantanamo while trying to twist other nations into following their vision of the world, China has its Tibet but doesn't force its ideals on others. As a result, examples of the growth in Chinese influence are not hard to find, even outside their traditional sphere of influence:

South America:
In Argentina, following their disastrous effects “neo-liberal” economic policies backed by Washington and the International Monetary Fund, “You cannot understand the miraculous Argentine recovery after the financial crisis of December 2001 without considering the boom in soy exports to China”. In Bolivia, China will invest $1.5 billion in the onshore oil and gas sector as well as showing interest in developing its largest tin mine, Huanuni. In Chile, China will set up a joint venture with the state copper company, Codelco. Meanwhile, a Chinese-led consortium bought oil and pipeline assets for $1.4 billion in Ecuador. The story is even bigger in Brazil and Venezuela. Farmers have been rushing to plant soy on the fringes of the Amazon rainforest in an attempt to satisfy China's voracious appetite. As for the ethanol politics in Brazil, maybe you can learn more here. It has also imported millions of tons of oil and iron ore from Brazil and has signed a deal to help construct a major natural gas pipeline. Finally in Chile, 2006 saw the Bachelet government sign a free trade deal with China in an effort to boost sales of copper, fruit, and fish oil. The Chilean president boasted of figures showing a $1.4 billion increase in trade between the two nations last year. “When Chile considers how to continue its development, Chile thinks big,” Bachelet remarked. “And to think big means to think China.”

Africa:
In Africa, where the game was once ideological, it has become purely financial. Che Guevara no longer stalks the Angolan countryside. Where once the government of China would build a 1,100-mile-long railway across Tanzania to support a communist brother, today it's all about profit. The continent sits on 90% of the world’s cobalt, 90% of its platinum, 50% of its gold, 98% of its chromium, 64% of its manganese and one-third of its uranium. It is rich in diamonds, has more oil reserves than North America, and has been estimated to hold 40% of the world’s potential hydroelectric power. Africa is now supplying a third of the oil fuelling China’s economic boom. Angola has overtaken Saudi Arabia as China’s largest supplier of oil. Trade hit $55 billion last year, up 40% from the year before. It is expected to top $100 billion in 2010. China has overtaken Britain as Africa’s third-largest business partner and is fast catching up with France. In Angola, which exported roughly 465,000 barrels of oil per day to China in the first six months of 2007, Beijing secured a major stake in future oil production in 2004 with a $2 billion package of loans and aid that includes funds for Chinese companies to build railroads, schools, roads, hospitals, bridges, and offices; lay a fiber-optic network; and train Angolan telecommunications workers. Sudan, with its vast oil reserves, is the number one recipient of Chinese investment, and sells some two-thirds of its oil to Beijing, while receiving arms in return. Whether rebuilding the infrastructure in Addis Ababa, or building a railway line linking Khartoum to the Red Sea, the common theme across the continent seems to be that China offers "no-strings" aid, a marked contrast to Western donors who impose conditions on aid and tie trade sweeteners to human rights issues. Robert Mugabe said, “We have turned east, where the sun rises, and given our backs to the West, where the sun sets." OK, it's Mugabe, but even a respected leader like President Festus Mogae of Botswana, who may run the best-managed country in Africa said, "China treats us as equals, while the West treats us as former subjects,” he has said. “That is the reality. I prefer the attitude of China to that of the West.”

Of course China also continues to sell arms to Sudan, among other African countries. In the period from 2003 to 2006, China's arms sales to Africa made up 15.4 percent ($500 million) of all conventional arms transfers to the continent. Notable weapons sales include those to Sudan, Equatorial Guinea, Ethiopia, Eritrea, Burundi, Tanzania, and Zimbabwe. Beijing has also sent Chinese military trainers to help their African counterparts. Arms sales and military relationships help China gain important African allies in the United Nations, including Sudan, Zimbabwe, and Nigeria, for its political goals, including preventing Taiwanese independence and diverting attention from its own human rights record. The Congressional Research Service reports that China views these sales as a means of "enhancing its status as an international political power, and increasing its ability to obtain access to significant natural resources, especially oil" (PDF). Africa registered 5.8 percent economic growth in 2007, its highest level ever, in part because of Chinese investment. Experts say the roads, bridges, and dams built by Chinese firms are low cost, good quality, and completed in a fraction of the time such projects usually take in Africa. China also contributes peacekeepers to UN missions across Africa, including Liberia and Darfur. It has cancelled $10 billion in bilateral debt from African countries, sends doctors to treat Africans across the continent, and hosts thousands of African workers and students in Chinese universities and training centers.

Iran:
Again, here the Chinese are winning the game based on what were once American rules. While the US threatens with the stick and carrot, China has won the game of influence. Where the US supported the Shah and paid the price, China doesn't meddle, it does business. Back in 2004 Sinopec group signed a $70 billion deal for Iranian oil and gas over the next 20 years. Annual bilateral trade has reached $20 billion. In September Chinese President Hu Jintao met with Iranian President Mahmoud Ahmadinejad, a man the US refuses to talk to. Result, the blocking of American resolutions to punish the Iranian government for going forward with their nuclear program. "We mutually complement each other. They have industry and we have energy resources" said Ali Akbar Salehi, Iran's former representative to the International Atomic Energy Agency. China has no wish to see democracy flourish in the Middle East and has no problems dealing with the world's only theocracy.

Venezuela:
A category onto itself thanks to Hugo Chavez, his trip to China this week is what got me thinking about this post. While the US loathe him, they need him, well, his oil at least, as Venezuela is the 4th largest exporter of oil and 3rd largest exporter of gas products to their market, gobbling up about half of Venezuela's total exports...for now. After first stopping in America's other favourite nation, Cuba, Chavez arrived in Beijing while most world leaders were converging on New York, about which Chavez commented, "It's much more important to be in Beijing than in New York." It's too bad really, as you may recall his 2006 tirade against the US at the UN meeting in which he referred to Dubya as the devil. He hit the ground running in Beijing, announcing plans to build refineries and a fleet of oil tankers as part of a plan to double oil exports to China by 2010. On November 1st China will launch Venezuela's first satellite and according to Chavez will also be selling them a couple dozen fighter planes. Of course this follows Chavez' last trip to China a couple years ago when trade agreements were signed which Chavez referred to as the "Great Wall" against American hegemonism. In return China promised to back Venezuela's bid to join the UN security council (which eventually went to Panama), build houses for 20,000 people as a contribution towards Mr Chávez's policy of reducing homelessness, help build a fibre optic network, modernise a gold mine and develop railways and farm irrigation systems. After Beijing, Chavez plans on visiting Moscow, Belarus, Portugal and France.

So, what's my point? Take my adopted home country of Poland as an example. To a Pole, the US has always been the promised land, where an entrepreneur (a French word by the by) could start with nothing and wind up rich through hard work and business savvy. This vision has given the US a huge supply of soft power, influence. The bailout package now before Congress represents a serious threat to this ideal. The Fannie Mae and Freddy Mac bailouts already brought a nationalized housing market, AIG insurance, the last thing the beacon of free markets needs now is a socialized banking system. Capitalism will always have winners and losers. Just as war results in casualties (another problem the west can't seem to face), business involves bankruptcies. Instead of subsidizing corporations, the US needs to refocus its efforts on regaining its former position in the eyes of the world; China and to a lesser extent Russia are making huge inroads around the world. Even the head of the Pentagon, the hard power centre of the US, Secretary of Defence Robert Gates has argued for more funding for soft power activities. A trillion dollars can buy a lot of friends, why use it to reward failure and increase the power of the central banking system? Thomas Jefferson wrote: "The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution...if the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."

Tuesday, September 23, 2008

Peak Oil?

I have to admit to being confused, ignorant and surprised about, of and by this theory I just read about for the first time, the abiotic (or abiogenic) origins of oil. In a nutshell, this is a theory propounded by Soviet/Ukrainian scientists that holds that oil is produced within the Earth's mantle. My first thought was "hold on, there's an alternate theory to where oil comes from? Wait, what is our theory? Something to do with dinosaurs if I remember right." Sure enough, I was sorta right, our current theory in the west is that oil reserves are the product of the compression and heating of ancient organic materials over geological time, thus the term fossil fuels. Well, in case you missed it, this is just a theory, like gravity and evolution (yes, both just theories too). Unfortunately, instead of looking at this theory objectively, it seems as thought the west has reacted in knee-jerk fashion, dismissing it out of hand, describing it as crazy. But really, is it?

Here's the thing. Even if you don't understand the science, which I don't, the scientific evidence of it at least being possible has been piling piling up. The science, quickly, states that oil is continuously generated by natural processes in the Earth's magma. The scientific proof seems to lie in the fact that its proponents claim that it is consistent with the law of thermodynamics, whereas the organic theory is not. So, why have we in the west never heard of this theory? Various abiogenic hypotheses were first proposed after advances in science in the nineteenth century, most notably by Alexander von Humboldt, the Russian chemist Dmitri Mendeleev and the French chemist Marcellin Berthelot. While the theory did then lose ground to the idea of oil as a fossil fuel, it was once again championed by Russian and Soviet scientists in the 2nd half of the 20th century.

Following WWII, Stalin had of course realized the strategic importance of oil and, lacking in domestic supplies, threw his country into what has been described as a "Manhatten Project" of oil research. Between 1951 and 2001 thousands of articles were published in mainstream Russian scientific journals on the modern Russian-Ukrainian theory of deep, abiotic petroleum origins, almost completely unheard of in the West. Nikolai Alexandrovich Kudryavtsev is generally credited with first enunciated the theory, but to much of the west, it was first introduced by Thomas Gold. There is much debate about whether he plagiarized the Russian findings or changed them or found his own ideas, but he convinced the Swedish Government in the1990's that oil could be found everywhere in the planet, but more specifically by drilling in an ancient meteorite crater, into fractured granite under the Siljan Ring, in Sweden. For this, two deep wells were drilled and millions of dollars were thrown in the deep earth granite. No hydrocarbon was found and again the abiogenic hypothesis was discredited for the moment.

However today's high oil prices have reignited the debate it seems. Now, it's no secret that I'm no fan of oil, big oil and the God Car society that has been created around it, but the theory of peak oil particularly aggravates me. The belief in oil as a fossil based product with a finite supply has created a market that is holding the world hostage to big oil companies. Of late, much anecdotal evidence has emerged to support the abiotic theory, not the least of which is the fact that Russia, which was thought to have few reserves only 50 years ago, today is the world's leading oil producer. NASA studies have proven that the methane reserves on Saturn's moon Titan are of a non-biologic origin. A study in Science Magazine published earlier this year claimed that hydrogen-rich fluids venting at the bottom of the Atlantic Ocean in the Lost City Hydrothermal Field were produced by the abiotic synthesis of hydrocarbons in the mantle of the earth.

The implications are mind-boggling, both good and bad. The good would be the end of big oil and their lackeys Dick Cheney et al. The bad, well, we've got a near inexhaustible supply of the black stuff to ensure the continuation of the God Car era to seal the planets doom. Prices would crash, BP, ExxonMobile and the rest would go bankrupt, the dollar worthless. Of course if it does prove true, Russia has a huge head start and it's possible they've already shared their secret with the Vietnamese, while the Chinese and North Koreans are lining up. In 2003 Putin made any information revealing the exact amount of supply, reserves, production, and the actual use of strategic types of minerals of the Russian Federation a State secret. Could there be a giant secret behind all the Russian oil companies' intrigue with the government or foreign companies such as BP these past few years? There's no secret as to why such a theory would be hidden from the world, how I do love a conspiracy theory.

Sunday, September 21, 2008

Still Somewhere in Africa: Zimbabwe


Whew! Thank god that's over, problem solved. Robert Mugabe signed a power-sharing agreement with his rival Morgan Tsvangirai on Tuesday, making the latter Prime Minister. Finally, we can get on with our lives and stop worrying about what's happening in Zimbabwe. Hold on, wait a second, did I say problem solved, stop worrying, Zimbabwe and Robert Mugabe in the same paragraph? I think I did, guess that means nothing's actually decided yet, now I suppose I'll have to tell y'all about it...

I've written three posts since the first round of elections in Zimbabwe, but haven't bothered since the sham of a run-off election for the presidency. In case you missed it Morgan Tsvangirai won the first round, but didn't obtain the necessary 50% (cough, er, yeah right), which necessitated the run-off, which Tsvangirai pulled out of in protest to the violence he and his MDC party were being subjected to by the ruling Xanu-PF. We all know how that story ended, Mugabe in a landslide taking over 85% of the vote, being sworn in as President on June 29th. Well, predictably the west criticized the vote as being illegitimate, and more predictably, Mugabe's spokesman told the west to "go hang a thousand times". While Tsvangirai was hiding out in the Dutch embassy, his party's party's secretary-general and chief negotiator Tendai Biti said in a statement that "the sham election on June 27, 2008, totally and completely exterminated any prospect of a negotiated settlement."

So, what happened between now and then to change their mind? The UN with it's failure to pass resolutions; the Italian's recalling their ambassador; the French foreign minister Bernard Kouchner saying the EU would "accept no government other than a government led by Mr Tsvangirai"; the G8 at a meeting in Japan declaring that "We do not accept the legitimacy of any government that does not reflect the will of the Zimbabwean people"; the US and EU tightening of economic sanctions to include those doing business with the regime; or maybe the Canadian governments banning of arms exports, freezing the assets of top Zimbabwean officials and banning Zimbabwean aircraft from flying over or landing in Canada. I think not, international isolation, so long as it doesn't affect his wife's shopping trips, has proven useless in influencing Mugabe.

While Mugabe, however illegitimately managed to hold onto the presidency, the original election results did bring a change to who controls the lower house of parliament. Tsvangirai's MDC now has 100 seats and ZANU-PF has 99 seats. An MDC offshoot, led by Arthur Mutambara, won 10 seats and an independent candidate won one seat. Prior to the parliamentary session finally being opened at the end of August, an MDC member, Lovemore Moyo, was voted in as the speaker of the house, the 4th most powerful position in the government. When Mugabe addressed the opening session, his speech broadcast live across the country was drowned out by the boos of the opposition. Perhaps this was a wake up call for Mugabe to realize he was incapable of running the day-to-day affairs of the country without Tsvangrai onside.

In tandem with this, Africa, however belatedly, came together to help force compromise. While not all nations seemed to be on the same side, in the end, Mugabe's anti-white rhetoric couldn't be used against his African neighbours. While South African president Thabo Mbeki will get much of the credit for mediating the deal, his pro-Mugabe stance probably caused more damage than he healed. More credit should be given to leaders such as Botswana's president, Seretse Khama Ian Khama who refused to recongize the legitimacy of the run-off election. Kenya's Prime Minister Raila Odinga said "They (the African Union) should suspend him and send peace forces to Zimbabwe to ensure free and fair elections." Liberian President Ellen Johnson Sirleaf was also outspoken in her criticism of Mugabe. Even at the announcement of the made in Africa deal Mugabe said, “African problems must be solved by Africans...The problem we have had is a problem that has been created by former colonial power. Why, why, why the hand of the British? Why, why, why the hand of the Americans here? Let us ask that.

I smell another problem, call it fuzziness. Consultations with input from various groups are to start within a month on a new constitution with a referendum to be held within two years. Things get fuzzy from there, I've read reports saying Mugabe will control the army while Tsvangrai gets the police, others that say such institutions are to be impartial to parties. In the end, who cares? How are these people going to sit across from the table from eachother? Talk about skeletons in the closet! Ever since Mugabe began to lose his grip on power in the run up to parliamentary elections in June 2000, his Xanu-PF party has used killing, kidnapping and other violence as its modus operandi, with MDC supporters more often than not the target. The Zimbabwe Peace Project has recorded 16,400 cases of human rights violations this year alone. While denying that Mugabe himself would be the target of justice, Tsvangrai did say that senior members of Mugabe's party could be held accountable for the violence. Cracks were appearing in the Xanu-PF party as early as Tuesday, with hardliners resisting the deal, many will be left out of the cabinet or could lose their governor posts that are to be shared with the MDC. Mugabe and his henchmen have everything to lose in this deal.


The sheer size of the task at hand would be enough to tear apart a normal government, let alone one with three opposing factions. Tsvangirai said the first task of the new government would be to "unlock the food already in the country and distribute it to our people". He failed to mention that it has been kept locked up by Mugabe, who wished to ensure it got distributed only to his supporters, while opposition supporters were deliberately starved. Another big issue will be the sacking of Gideon Gono as Governor of the Reserve Bank. Mugabe has used Gono, a key henchman and his own private banker, to control the economy; and Gono has in turn been rewarded with stolen farms and other looted assets. Foreign donors have made it clear that not a cent will be handed over while Gono remains in office; but if he goes, so does Mugabe’s control of the economy. Yes, quite a work of art he has created with inflation officially running over 11,000,000% but some believe may be as high as 40 million! The third major task will be the the professionalization of security forces that until now have acted as partisan thugs for Mugabe and his henchmen. Particulary bringing the murderous "war vets" and Green Bomber youth league under control, both of which were instrumental to Mugabe’s efforts to terrorize white farmers and opposition blacks. In other words, the agenda favoured both by Tsvangirai and the major Western donors will serve to dismantle Mugabe’s violent and corrupt system, and prepare the way for free elections in which both Mugabe and his party will face annihilation. Doesn't seem very likely that Mugabe will let this happen. Predictably, since the signing, nothing has happened as Mugabe simply bides his time, dragging his feet before anything of substance happens.

So with the world momentarily appeased with the signing of the power sharing "unity government" deal, in which somehow Mugabe is meant to draw policy, while Tsvangirai's parellel council of ministers are meant to implement it, Mr. Mugabe is off to the United Nations. The deal won't accomplish anything until the impasse over the nuts and bolts, specifically who gets which ministries, are resolved. This won't happen quickly as at the same time Mugabe must try to keep his supporters happy, many of whom will lose important posts with implementation. He told his party that the deal was a "humiliation", but necessary because of the party's dismal performance in the only real elections, those of March 29th. At least three-quarters of the 49-member politburo will lose their posts in the proposed government of national unity, so they're in no rush. It's becoming increasingly clear that the 'end-game' hasn't played itself out, what that will be still isn't clear, but Mugabe's signature on a piece of paper hasn't solved anything yet.

Friday, September 19, 2008

The rain in Spain falls mainly on the ...?

Let's not generalize and call it an American thing. Maybe it's a Republican thing. Let's be even more specific, it must be a presidential candidate for the Republican party thing, as the lack of understanding of the world outside US borders does seem to be a recurrent theme. In a scene reminiscent of good ol' Dubya while running for president, John 'McBush' McCain didn't seem to know who the president of Spain was yesterday while being interviewed by a Florida affiliate of Spanish radio network Union Radio. When asked whether he would invite Socialist Prime Minister Jose Luis Rodriguez Zapatero to the White House if he won in November, McBush replied: "All I can tell you is that I have a clear record of working with leaders in the hemisphere that are friends with us and standing up to those who are not. And that's judged on the basis of the importance of our relationship with Latin America and the entire region." You know, he's not sure if Spain is a friend or not, let alone where Spain is located.



Of course McBush's handlers jumped to his defence, with his foreign policy advisor Randy Scheunemann claiming McBush's refusal to confirm that he'd meet with Zapatero was deliberate, lumping Zapatero together with 'radical' South American leftist leaders such as Chavez and Morales. Listen to the whole interview though, the interviewer tries to clarify McBush's statement many times. When she finally realizes the poor man is lost after the above quote she goes as far as saying: "I'm talking about the president of Spain". Really, it's lose-lose for the McBush spin camp. Either he confused where Spain was or who Zapatero was, or he feels that the friendship between Spain and the US is on a par with such countries as Venezuela and Bolivia, who have of course just recently expelled their respective American ambassadors. Maybe we should scratch the surface a little more to reveal another possible truth: The Bush doctrine will be continued if we see 4 more years of McBush. Four more years of "with us or against us". You see one of Jose Luis Rodriguez Zapatero's campaign promises in the Spanish presidential election was to pull Spanish forces out of Iraq, something he did upon entering office in 2004. Since that time, the relationship between the two countries has cooled considerably as Bush punishes a country and its leader for doing what the majority of the people wanted. But wait a minute, the man formerly known as McCain said back in an April interview that as president he would seek to repair relations with Spain. Now, I'm really confused, who is McBush and what does he believe?

Let's wind this up then with some sad geography facts. Shortly after Hurricane Katrina, one-third of young Americans recently polled couldn’t locate Louisiana on a map and nearly half were unable to identify Mississippi. Step outside the US, and it gets worse as early in the illegal Iraq invasion, in 2002, one in seven, about 13%, of Americans between the age of 18 and 24, the prime age for military service, could find Iraq, while 17% could find Afghanistan. Four years of war later, with the accompanying TV coverage to 'educate' the masses, and 63% could not find Iraq or Saudi Arabia on a map of the Middle East, and 75% could not point out Iran or Israel. 44% couldn't find any one of those four countries. It's the attitude toward knowledge of the outside world that's most astounding as fewer than 30% thought it important to know the locations of countries in the news and just 14% believe speaking another language is a necessary skill. I guess it must be nice to live in a glass cage, you get what you deserve, go on, vote McBush for four more years of ignorance.

Wednesday, September 17, 2008

Skeletons in the Closet

“If you can't get rid of the skeleton in your closet, you'd best teach it to dance.”
- Shakespeare, Richard II


We all have one. Some deep, dark secret locked away out of view where no one will see it. Nations have dirty laundry hidden in a dark corner too, and like people, each has a different way of dealing with their past. Internationally, the need to seek justice, even retribution, for extreme acts of injustice has resulted in the Nuremberg Trials and other international war crime tribunals. On Friday, Poland's last communist leader, General Wojciech Jaruzelski, and seven other Soviet-era officials went on trial in Warsaw over the declaration of martial law more than a quarter of a century ago. The trial re-opens old wounds and will surely once again demonstrate how difficult it is to judge the wrongdoings committed under far different circumstances than we can understand today.

In the 90's, the Bulgarian Communist leader, Todor Zhivkov, was put on trial for embezzlement rather than political acts such as the imprisonment of thousands of his fellow citizens in camps where several perished and were allegedly tortured. Ramiz Alia, the former Communist leader of Albania, was tried and convicted of abuse of power. In Romania, Nicolae Ceausescu and his wife, Elena, were tried in just a few hours by the leaders of an uprising against them in December 1989. The couple was convicted of crimes against the people and summarily shot.

In Chile, a legal battle raged years as the government tried to bring former dictator Augusto Pinochet to justice for crimes his regime committed. Long after he stepped down from power he was shielded from prosecution for thousands of killings and "disappearances" by parliamentary immunity and an amnesty that the military had granted itself. It took a warrant issued by a Spanish judge for him to be arrested on Oct. 16,1998 in London. Pinochet died in prison awaiting trial but his case may have changed the world's perception about the worth of such a fight. He spent 17 months in detention in Britain as he fought extradition back to Chile on health grounds while the criminal cases against him jumped to hundreds. By the time Britain sent Pinochet back to Chile, the myth of his immunity had been shattered. For the last years of his life, Pinochet was dogged by his past. His immunity was stripped in six major cases, ranging from death squads and abductions to the hiding of millions of dollars abroad, and at the time of his death, he was under house arrest. One hundred and nine other agents of his regime have now been convicted of human rights crimes.

While a Spanish judge helped bring justice to the Chilean people, Spain has taken another course in dealing with their own dark past. After nearly 40 years of Franco and fascism during which time 200,000 people were killed in concentration camps, they simply changed the name of the fascist party to the Partido Popular (PP) and continued like nothing happened. Yes, Fraga Iribarne, Minister of the Interior in Franco's fascist regime (in charge of Spain's political police), founded the PP. The party, which has governed Spain for much of the time since Franco's death and led the nation into the 'coalition of the willing' in Iraq, believes that the Franco regime was good for Spain. The last Spanish president, Jose Maria Aznar was himself a member of Franco's fascist party and disobeyed the instructions of the U.N. Human Rights Agency to find the bodies of those who disappeared during the Franco regime (more than 30,000 people).

Over in Italy, we know that things aren't any better. The past isn't only being ignored, it's being repeated, as Berlusconi has formed coalition governments with fascist parties for much of the time since 1994. Mussolini era laws are even being dusted off for the first time in almost 80 years as Berlusconi tries to court the Catholic vote by prosecuting comedians. Here's the catch, maybe Mussolini wasn't so bad, as with all these 'bad' guys, history books are written by the victors: How can something that was praiseworthy at the time they did it, 10, 25, 50 years ago, suddenly become reprehensible now? With Mussolini, he went from hero:
If I had been an Italian I am sure I should have been whole-heartedly with you in your triumphant struggle against the bestial appetites and passions of Leninism... (Italy) has provided the necessary antidote to the Russian poison. Hereafter no great nation will be unprovided with an ultimate means of protection against the cancerous growth of Bolshevism. -Winston Churchill (1927)
... to zero, as he was guilty of the only crime that matters, he lost.

So, what of General Jaruzelski? In Poland, officials and police officers from Jaruzelski on down have been put on trial in connection with some 150 deaths -- from the shooting of 44 Gdansk shipyard workers in 1970 to the martial law crackdown against Solidarity. Not one has been convicted as General Jaruzelski has continuously proclaimed his innocence in the deaths. In 1996, a special parliamentary committee absolved him of responsibility for the 1981 killings. This time, prosecutors from the Institute of National Remembrance, a state body that investigates communist-era crimes have charged him and his fellow defendants with "communist crimes," violating the constitution and leading "an organized criminal group of a military nature having as its goal the carrying out of crimes that consisted of the deprivation of freedom through internment." His defence for declaring martial law is that he wanted to avoid a Soviet invasion in reprisal for the Solidarity uprising, as was witnessed in Prague and Budapest in response to similar anti-Soviet uprisings.

How will future generations deal with the wrongs they deem are being committed today? Will there be a witch hunt of those responsible for the illegal war in Iraq and violations of the Geneva Convention similar to the Nazi hunt following World War II? Preparations are already being made, making it possible that one day Cheney, Bush et al. will face a fate similar to that of Saddam Hussein. Who knows how future generations will look back at such human rights violations as Guantanamo Bay. People clearly feel the need for justice, but as Orwell stated, it's best "When tyrants are put to death, it should be by their own subjects; those who are punished by a foreign authority, like Napoleon, are simply made into martyrs and legends."

Monday, September 15, 2008

Sodomy Dichotomy

Power tends to corrupt; absolute power corrupts absolutely
-Lord Acton

Funny how sodomy in a headline gets my attention, what with the 22,000 Big Mac guy and the elections in North America vying for my reading time. Especially when it's a crime, like in Malaysia where opposition leader Anwar Ibrahim is planning on seizing power September 16th, Malaysia's national day, despite having to fight a sodomy charge from a 23-year-old former aide. If he's found guilty of the sexual assault charge he can receive a 20 year jail sentence to go along with the whipping. My first foray into Malaysian politics finds the country at a crossroads.

Anwar (Malay's use a personal name followed by a patronym) just completed a political comeback August 26, winning a landslide victory to regain his seat in Parliament in a riding vacated for him by his wife. Corruption and a previous sodomy conviction got him kicked out for a spell. He only served four of the ten year conviction in 2000 for the sodomy charge as he was released after it was overturned. Earlier this year the ruling party gained a majority 140 of 222 seats in elections in March, however this was viewed as a defeat as they had 198 seats going in. To take control, Anwar hopes to lure 30 MPs over to the opposition, composed of his own Keadilan party, the Parti Islam Se-Malaysia (PAS) and the Democratic Action Party (DAP).

It's been an almost 50 year run for the National Party (UMNO), having held power in coalition with other parties or alone since Malaysia's independence in 1957. Anwar joined the right wing party in 1982 and moved quickly up the ladder. He made the cabinet as minister of Culture, Youth and Sports in 1983, then headed the agriculture ministry in 1984 before becoming Minister of Education in 1986, then in 1991 Anwar was appointed Minister of Finance and finally in 1993, he became Prime Minister Mahathir's Deputy Prime Minister. He even served as acting PM while Mahathir took a little 2 months holiday in 1997. However, about the time he was named Newsweek's Asian Man of the Year in 1998, his falling out with Mahathir came to a head. Anwar had been becoming louder in his criticism of the nepotism and cronyism in the government which coupled with his policies to fight the 1997 Asian crisis brought him into direct confrontation with the leadership of his party and his ultimate downfall as he was eventually implicated as benefiting from the cronyism. Further allegations of corruption and then homosexuality came from a book released around that time leading a libelous campaign to discredit Anwar that ended with him in prison.

Public support rallied around Anwar leading to his eventual release after many of the charges were proved to be false. He is seen as a possible moderate link between Islam and the west by many observers, he was even in the running to become the UN Secretary General in 2006. He's also been an outspoken voice in support of democracy in the Muslim world pointing to the democratic societies of Iran and Indonesia of the 1950's to draw attention to the fallacy that Islam in not ready for or compatible with democracy. Beyond corruption and radical Islam, Malaysian society also faces the "affirmative action" institution of bumiputera — a system of economic and social policies designed to favor ethnic Malays set out in the New Economic Policy. C seems to be more than a system, almost a belief, where Malays should be afforded better access to the whole spectrum of society than their Chinese and Indian Malaysian countrymen. Originally brought in to defuse the ethnic tensions following the May 13 Incident in 1969 as wikipedia says, it succeeded in creating a significant urban Malay middle class but have been less effective in eradicating poverty among rural communities and have caused a backlash of resentment from excluded groups.

Prime Minister Abdullah Badawi has promoted his concept of Islam Hadhari, Civilizational Islam, a modernist interpretation of the faith that stresses moderation and technological an economic competitiveness, god and business. His party, the UMNO, is an instrument of division among the people, spewing rhetoric like, "UMNO is willing to risk lives and bathe in blood to defend the race and religion. Don't play with fire. If the (other races) mess with our rights, we will mess with theirs." Racism, scary; religious fanaticism, scary; mix them together and you have a volatile mix, one which the ruling UMNO has been able to work to their advantage for a long time but could be on the verge of exploding. You have a discontented Chinese Malay population who has seen their proportion of the wealth dwindle as part of the NEP mandated the bumiputera share of corporate stock ownership from 1.5% in 1969 to 30% in 1990. The program was to have a life span of only 20 years or when the ownership threshold was past. However, the NEP has ostensibly been replaced by the National Development Policy associated with the Second Outline Perspective Plan for 1991–2000, and then by the National Vision Policy linked to the Third Outline Perspective Plan for 2001–2010, all with similar goals. There is a double flaw to the measurement of 30% bumiputera ownership target: firstly, publicly traded share capital constitutes only a fraction of national wealth and does not for instance include privately held assets. In addition, the current breakdown of share capital ownership by ethnic group is Bumiputera 18.7%, Chinese 40.9%, Indian 1.5%, other 0.8%, foreigners 28.8% and nominee companies 9.2%. Strangely, the 30% Bumiputera target is measured against shareholder groups like foreigners and nominee companies. If it can be safely assumed that foreigners and nominee companies are not ethnic groups, the figures look more like this; Bumiputeras 30.2%, Chinese 66.0%, Indian 2.5% and other 1.3%. Furthermore, a report in February 2006 by the Centre for Public Policy Studies, said ethnic Malays may own as much as 45 percent of Malaysia's corporate equity. The report proved so controversial that Dr Lim Teik Ghee, a former World Bank social scientist, was forced to resign due to political pressure.

Nowhere in Asia can one find so many different races and cultures calling one country home. Besides the majority Malays, other racial groups include Chinese, Indians, Arabs, Europeans, Eurasians and dozens of ethnic and aboriginal communities. A potpourri of religions co-exist from the majority Muslims to Christians, Hindus, Buddhists, Taoists, Sikhs and numerous native belief systems. "We coexist, even live together but we live separately in our own worlds," said opposition lawmaker Kula Segaran from the minority Indian community. Some 90% of Chinese students attend private Mandarin-language schools. Meanwhile, most Malays attend public schools and most Indians Tamil-language institutions of learning. A survey of race relations found some startling facts: Sixty-four percent of Malays, 58 percent of Chinese and 20 percent of Indians agreed that ''in general, most Indians cannot be trusted." The minority Chinese and Indians see the majority Malays, who make up 60 percent of the population of 25 million people, as lazy. Eleven percent of the respondents said they had eaten often with friends from other races in the past three months. Thirty four percent said they have never had a meal with people of other races. The survey also found that 42 percent do not consider themselves Malaysian first, 46 percent say ethnicity is important in voting, 55 percent blame politicians for racial problems and 70 percent would help their own ethnic group first. Meanwhile, 71 percent of Malays, 60 percent of Chinese and 47 percent of Indians agree that ''in general, most Chinese are greedy.''

The last major turnover in power occurred in Malaysia after the 1969 race riots. While the ruling UMNO party maintained its position, there was a changing of the guard in leadership. Today Malaysia finds itself in a similar position, on the precipice of change, but the old guard won't go down without a fight. The country appears more racially polarized than it's been in decades, with voting falling according to racial lines and the majority Malays desperate to hold onto power. Last November when Hindraf, a coalition of Hindu nongovernmental organizations, staged demonstrations for the rights of the ethnic Indian community, the government detained five Hindraf leaders under the Internal Security Act (ISA), which permits indefinite detention without charge or trial. Malaysia’s media too, is tightly controlled by the state. According to the most recent Reporters Without Borders Press Freedom Index, Malaysia ranked 124 out of 169 countries (thirty-two ranks down from 2006). Yet Malaysia has an estimated 10 million Internet users, therefore it's particularly troubling that the country's leading blogger was arrested last Friday for posting anti-government comments.

Despite whatever advances that may have been achieved by the racist policies of the past 40 years, Malay wealth is in the hands of a politically well connected elite while in the rural areas of the country the Malay poor predominate. Income distribution remains a problem as the poorest 40%household’s share of total gross household income was 12% in 1970; nearly three decades later, this figure increased marginally to about 14% in 1999. The 30% ownership criterion by a particular segment of shareholders creates artificial impediments to companies and investors in financial markets, which is having an effect as foreign direct investment in Malaysia in 2005 dropped to 15 billion ringgit from 17.6 billion ringgit in 2004.

Under Middle East influence and driven partly by domestic politics, official Malay Islam has become increasingly restrictive in its interpretations, increasingly arrogant in its assumptions about the primacy of Islam and the extent of the jurisdiction of sharia courts. It's time for Anwar to bring about a change and he was hoping to do it September 16th, but the ISA is being used to bully the opposition, with the detention of Seputeh MP Teresa Kok, Sin Chew Daily journalist Tan Hoon Cheng and blogger Raja Petra Kamaruddin in the past week, which was enough for Washington to summon its Malaysian envoy to protest. The government has even resorted to flying as many MPs out of the country as possible to 'explore Taiwan's agricultural and industrial technology'. Anwar may not be an angel, as he has been responsible for racist changes such as renaming the national language from Bahasa Malaysia to Bahasa Melayu as Education Minister. Recently, he said of his newest sodomy charges, "They should do a good deed in this holy month of Ramadan and just drop the charge". It is more than likely the charges are once again false. This only Malaysian to ever make it into Time magazine's 100 most influential people in the world also once said: “There is a right to disagree but no one has the right to cause destruction or destroy life,” and in times like we find ourselves today, that may be the best we can hope for and I wish him luck tomorrow in uniting this divided nation.

Saturday, September 13, 2008

What countries DO I like?

Awhile back I wrote a post about the best country to live in. I danced around the question, came up with subjective and objective measurements and in the end decided to go on vacation. Then the other day I was asked by someone who had enough of my US (and Canada) bashing and asked me what country I admire and why. Pause. Hmmm. Well, it's hard to give an answer...you see, um, there's lots of countries, uh, good and bad...so, well, er... So, without further ado, here's tonight's top ten list of countries I admire.

#10. Spain - Easy choice. They've done a little of everything in the past. From repressors to repressed, conquerors to conquered and all points in between. You gotta love the country responsible for financing Columbus' voyages to America, even if he didn't discover anything. Dominated by the muslims for 700 years, the reconquista, empire, Spanish Armada, Napoleon took his shots too. Don't forget the Spanish Civil War and the ensuing nearly 50 years of fascism under Franco. Now, we see the past and present being blended in a way unimaginable in the past, with South Americans flooding back in reverse colonialism.

#9. Denmark - Can't say too much about the place, only visited for a couple of weeks, and it was COLD, around Christmas time. It did come out as number one on the world map of happiness and Copenhagen is a beautful city, plus, good or bad, everyone speaks English. They've given us Hans Christian Anderson and Kierkegaard along with Kronborg Castle, dramatized as Elsinore in Shakespeare's Hamlet, "Something is rotten in the state of Denmark": Not anymore, with universal health care, low poverty and crime rates. They're also the world's largest producer of power-generating windmills.

#8. Poland - Gotta have them on my list, I do live here you know. Lovely cities such as Krakow, Wroclaw and Gdansk. Home of Solidarity and the prettiest girls on Earth. For centuries they've been the buffer between powers and at one time we're the largest country in Europe. They were wiped off the map for 123 years only to come back for the interwar period only to be dominated once again, this time by communism. They've shrugged off the bleak, grey image of those years and are working hard to get onto the world stage.

#7. Chile - First, take a look at the world map, Chile looks pretty cool down the Pacific coast all the way at the bottom, even has claim on some of Antartica. It'll be home to the world's early warning meteor device if Bill Gates has anything to say about it. They make some tasty wine. They've managed to move forward despite Pinochet, the CIA and Milton Friedman's 'economic miracle', building a fine democracy and even managed to sneak into the top 20 on the global peace index. This 'pais de poetas' has also produced Pablo Neruda and Gabriala Mistral.
Chile ranks high regionally in freedom of the press, human development and democratic development. It holds the status as the region's richest country in terms of gross domestic product per capita.

#6. Canada - The Great White North has only been around for 141 years but they've given us more than maple syrop and me. Somehow managed to carve out a seperate identity from their southern neighbour (by keeping some Britishness like the 'our' ending to words like neighbour and we've still got the Queen). Could also be the sense of humour, you need it when its so cold. Good standard of living, universal'ish' health care (the slow move towards privatization) and Pamela Anderson.

#5. Norway - Probably should rank higher, they seem to have it all. Natural resources, which they use responsibly, saving for the future have created one of the world's largest sovereign wealth funds. In 2007 they were at the top of the global peace index, 3rd for 2008. High taxes, but look at the quality of life.

#4. USA - Rock and roll, Hollywood, Coca-Cola, McDonald's, Levi's, Microsoft and Google. You might think I'm trying to say something about evil corporations but I'm not! Really, where would we be without all these things? Hypocritical, maybe, but I eat Big Macs and drink Coke while railing against American hegemony because I can, which is partially due to the freedom I enjoy thanks to the USA.

#3. Czech Republic - It appears on many of the lists here as a country with high literacy rates and as one of the most secular countries, coincidence, hmmm. Great beers, great writers and great film directors. Again, coincidence? Kundera, Hrabel, are just so Czech, there must be something great about the culture.

#2. Iceland - One word, Bjork! Really, that girl is wacky. The entire nation in powered by geothermal energy, now that's thinking out of the box. They are the happiest people in the world too according to some surveys. Why? Again, the Scandinavian socialist system just seems to work despite those evil high taxes taking away everyones motivation to work (wink, wink, nudge). They replaced Norway at #1 in the global peace index for 2008.

Before you look down at number one, I'd like you to take a second a go back over the previous nine. Some pretty good arguments, but I'm sure you can think of a couple countries that are missing and why. So, after reading number one, be sure to click on the comment tab below and tell me what country or countries are missing and why, heck, give me your own top ten if you'd like. Now, without further ado...

#1. Mauritius - It has no standing army and was the only natural habitat of the dodo bird. Period.

Now, post your comments, tell me what countries you respect, admire or love and why, go on.

Thursday, September 11, 2008

Prediction, The Black Swan and 9/11

Minorities set to be US majority -White people of European descent will no longer make up a majority of the US population by the year 2042 - eight years sooner than previous estimates.
Bush resolute in face of Iraq death toll -President vows to make sure American lives not 'lost in vain'
All US adults could be overweight in 40 years
Fanny Mae unveils loss of $2.3 billion - Problems in the US housing market have pushed mortgage finance company Fannie Mae into the red.

All of these headlines reveal the fraud of prediction. Why do people predict? Why do people think they can predict? To feel better about the future and because they are arrogant about what they think they know. Today being the anniversary of one of the most unpredictable events in history and with a tip of the hat to Nassim Nicholas Taleb, author of The Black Swan: The Impact of the Highly Improbable (the first chapter can be found here), I'm gonna take a look today at the fallacy of prediction, one of the all-time greatest frauds perpetrated on humanity. If you're a stockbroker, political analyst, or in any profession that relies on predicting the future, you might want to stop reading now.

The first thing we need to understand is that what we don't know is far more relevant than what we do know. We live in a world that is less understandable, explainable and therefore predictable than we think it is, the illusion of understanding. This problem is amplified by the retrospective distortion of past events; history appears more organized in history books than reality. We tend to concoct explanations for events after the fact, making them appear more predictable than they really are. Kirkegaard told us, history runs forward but is seen backward. Finally, according to NNT, (Nassim Nicholas Talim, the author of the Black Swan from here on) we tend to "Platonify", deifying the scholars, while the experts usually don't know any more than a taxi driver on most subjects. These defects lead to people having blindspots when it comes to seeing the black swan events that could happen. A black swan, or fat tail, is a large-impact, hard-to-predict and rare event beyond the realm of normal expectations. The 9/11 commission demonstrates all three of these problems. It's mandate was to provide a full and complete accounting of the attacks of Sept. 11, 2001 and give recommendations as to how to prevent such attacks in the future. Unfortunately a black swan's very unexpectedness creates the conditions for it to occur.

While much of the world can be analyzed and predicted statistically with reasonable accuracy, this type of analysis is useless outside of this realm. NNT insists on separating the world of uncertainties into two "worlds": Mediocristan and Extremistan. Basically a distinction needs to be made between scalable and non-scalable types of randomness. Mediocristan is where classic measures of statistics are relevant, particularly the Gaussian bell-curve. This includes measurements that are in a way pulled down by "gravity", where extreme outliers are impossible, things such as people's height and weight. However, in Extremistan measurement tools such as bell-curves are dangerous, where extreme outliers are not only possible, but defining, such as in the stock market, people's wealth and body counts in wars.

A little math, Gaussian style, the vaunted bell-curve you may remember from a boring stats class you once took, it looks something like this:Now this little tool can help you measure the probability of certain events occurring, the one above shows the distribution of IQ scores. With a large enough sample one can predict with different confidence levels the probability of different occurrences. Normal distribution, ie. the bell-curve or Gaussian distribution, uses the central limit theorem to give us averages or means and standard deviation to measure variability. A beautiful thing when applied to astronomical data as Gauss first did or maybe the birth weight of chimpanzees. Most observations hover around the middle while the odds of a deviation decline exponentially faster as you move away from the average. The problem begins with the application to Extremistan, and what NNT terms the Ludic fallacy, "the misuse of games to model real-life situations". Some assume that the unexpected can be predicted by extrapolating from variations in statistics based on past observations, ie. causal determinism. To the detriment of the world Gaussian thinking has been applied to many areas of Extremistan.

The failure of the bell-curve is best demonstrated by an example in a review from all places, the Wall Street Journal:
If 100 random people gather in a room and the world's tallest man walks in, the average height doesn't change much. But if Bill Gates walks in, the average net worth rises dramatically. Height follows the bell curve in its distribution. Wealth does not: It follows an asymmetric, L-shaped pattern known as a "power law," where most values are below average and a few far above. In the realm of the power law, rare and extreme events dominate the action. Wealth is an Extremistan measure. The last century has seen the rise of economics as a science, where statistical models are used to manage risk. Thus the birth of modern portfolio theory (Merton and Scholes) and monsters such as LTCM (Long-Term Capital Management). In case you missed it, this was a hedge fund that was founded in part by two Nobel laureates, the aforementioned Merton and Scholes, which failed spectacularly in the late 90's. The fund earned outstanding returns for a few years but the methods didn't take the black swan into account and were thus exposed to events like the Russian financial crisis which almost took down the entire financial system. Instead of learning from our mistake, business schools keep pumping out MBAs with the same theory and the same risk, thus the sub-prime meltdown, Bear Sterns, Fannie Mae and Freddy Mac, but the government is there to prop them back up, so they'll probably never learn.

The point is you need the right tool for the job. Just as you wouldn't use a hammer to install a window, statistical models are dangerous tools when people blindly follow them. When people start to apply statistics to social sciences greater dangers arise. Adolphe Quetelet tried to use the Gaussian curve to construct the physically and morally average man. His contemporary Karl Marx borrowed on his ideas in Das Kapital to minimize societal deviations in terms of the distribution of wealth. War used to belong to Mediocristan, but with the advent of weapons of mass destruction you now have the possibility of wiping out huge numbers of people with the press of a button, the black swan. There's no use in predicting the next 9/11, worse yet are the methods that have been used in the 'war on terror', as instead of lowering the chances of another such event, everything done so far has acted to increase the odds.


By assuming that rare events won’t happen, banks and others almost always win; but if you lose, you can lose everything. If you've read this post all the way to this point and still don't know what I'm trying to say, go and read the book, it's a good read, and relevant to your life if you've got a bank account, insurance policy or a pension fund. Try as we might, we can't control randomness, the black swan will always exist. It could be caused by a hurricane in New Orleans, a credit crunch or the beating of a butterfly's wings on the other side of the planet, they will happen.

Tuesday, September 9, 2008

Blogformity or the New Goebbels (It's the end of the world as we know it Part III)

Just a thought today. The power of the internet is thought to lie in the fact that the sum of man's knowledge is accessible to the people at the touch of a button. Blogs have given the everyday man the ability to project his ideas into this world, widening the range of information and opinions. We, as blog readers, have access to a myriad of different viewpoints on an almost infinite number of topics. Seen from this point of view, blogs are a good influence. However, take a second to analyze your own internet behaviour. Do you tend to read information from many different sources, sampling a bit from the entire spectrum of thinking? I don't, which got me thinking about the internet and blogs as a destructive forum for reinforcement of our beliefs, then I remembered that it's the 10th tomorrow, and it won't matter anymore.

Google turned 10 on Friday, CERN, the "inventor's" of the net fire up the LHC (Large Hadron Collider) tomorrow (Sept.10th); while the latter have planned this day for decades, do you think Google ever thought they'd be where they are now? Scientific American has a pretty good run down on the LHC start up beneath France and Switzerland. As the proton beam circles the 27 km underground ring for the first time, CERN is also rolling out the grid which will be useful if the search for the mysteries surrounding the beginning of time and the thus far elusive Higgs particle don't bring about a micro black hole and the end of the world. As the internet is due to fill up soon, it is hoped that the grid will be its super speedy swanky swift replacement (10,000 times the speed of broadband). The numbers are terrifying again, literally, as they'll be playing in the long awaited tera scale power region, a trillion electron volts, or 1 TeV where they hope new physics will occur, bearing the Higgs particle which imbues all particles with mass and constitutes dark matter which is responsible for most of the material in the universe. Having to record such measurements and share the information around the world (here we're talking about petabytes of information, a million gigabytes) is enough to threaten the crashing of their earlier data sharing little internet thing. Those wild and crazy CERN kids!


You? Remember your first internet connection, what did you want to find that day? It's time to seek out a wider view on the world today before it's obsolete. Seek out a few blogs whose hobbies, opinions and political beliefs differ from your own. Make sure they have an active comment board and post a few comments on some posts stating your view on the subject presented. Perhaps if your viewpoint is different than those using the blog, you will be gang-attacked, with teeth showing and froth dripping from the jaws. Kinda funny, maybe; kinda scary, definitely. What is happening is that instead of using this tool as a way of exposing ourselves to new ideas, most people tend to seek out those who share the same way of thinking as we do, thus reinforcing pre-existing ideas. It's a pull medium, use it that way to get what you need, new perspectives instead of having your old ones re-enforced. Guess I'll take my own advice and start reading some right-wing conservative blogs, any suggestions anyone?