I tend to wait for the last moment before I write anything about Qaddafi, because Qaddafi has always had the uncanny ability to stay on the top, regardless of how difficult the situation is. I did want to write something about Libya today, but to be honest, the rapid advance of the rebels of the past few days really caught me off guard. Still, let me try to catch up, with the risk that by the time I publish this post, everything that I have written will have already been out of date.
So what's happened in the past few days? The rebels seemed to get their act together, and with NATO's help, managed to break through Qaddafi's lines of defense (and at the time of this writing, they were in Tripoli and managed to arrest two of Qaddafi's sons.) It's also seems that the complete reorganization of the rebels' cabinet managed to stave off the political fallout from the death General Abdel Fatah Younes.
Still, this does not mean that Libya will have a smooth transition to a democratic government. At this point, the rebels are united thanks to their common disgust to the Qaddafi's regime. Even though the rebels have been trying admirably to minimize misconducts such as by distributing guide books on how to behave in accordance with international law, many of them still not behaved professionally, which isn't a surprise since they are not professional soldiers. Many of them are just teenagers, who joined the war for the excitement or various other reasons. When the war is over, it will take a while to sort them out, to reintegrate them into to civilian life, and it won't be easy, especially with lack of jobs and with really high hopes of prosperity in post-Qaddafi Libya.
But even before that, there is no guarantee that the rebels' unity will last. The assassination of General Younes was just a tip of the iceberg. While the reshuffling of the cabinet did help, the reshuffling was influenced more by the desire to demonstrate to NATO that the rebels' unity was still intact and the fear of Qaddafi's resurgence and revenge. Once Qaddafi is gone and NATO is no longer needed, then all bets are off. Libya may end up in a civil war, unless the leaders effectively manage the different tribes, interests, and so on in play.
That will require international pressure and American leadership, which at this time is still lacking. Regardless of the enormous reservoir of goodwill for the U.S. in Libya when the war started, as Iraq showed, such goodwill can evaporate very quickly when things go south. Plus, should the tribes start fighting each other, the stronger ones, the ones with the biggest guns, may not be that willing to compromise, even though it might destroy the country back to the stone age. Anybody doubting that should ask Mr. Mohamed Farrah Aidid of Somalia.
Moreover, Obama's decision to "lead from behind" will come home to roost: if during the war, Obama is unwilling to lead from front, what gives him the right and credibility to impose order on post-war Libya? As I noted in a previous post, Obama's unwillingness to invoke the "War Power Act" to some degree emboldened Qaddafi to stay put and minimized the defections among his officials. I'd hazard to argue that the war would have ended sooner had Obama been willing to bring this to the Congress.
This "leading from behind" doctrine brings into question America's commitment to the rebels in Libya, and Obama's belated support of the Syrian dissidents doesn't do much to help his credibility either.
This does not mean that the U.S. will not have a voice in shaping the future of Libya. The U.S. remains the most important country in the world and the new Libyan government will try to curry favor with it. This, however, requires an active U.S. foreign policy with a clear defined mission and this time Obama cannot afford not to lead.
Center for World Conflict and Peace
Sunday, August 21, 2011
Thursday, August 11, 2011
Trouble in Britain
Beginning this past weekend, parts of Britain have been engulfed in unrest. Although this story was initially overshadowed by other news stories, including the debt crisis and the credit rating downgrade, it's started to get more attention by the American press in the last day or two. In case our readers haven't closely followed the situation in England, I'll start this post with a quick overview of events.
Last Thursday, Mark Duggan, a suspected gang member, was stopped in a pre-planned operation and then shot and killed by London police in a low-income and multi-ethnic neighborhood. This was exactly the type of neighborhood in which ordinary citizens already distrust elites, politicians, and the police. The killing exacerbated these fissures. And when the police presented its account of events surrounding Duggan's death, which suggested that he fired the first shots, the locals contested it, arguing that Duggan posed little threat to the police. To them, Duggan was unjustifiably murdered by the police.
The killing sparked demonstrations on Saturday, which then mushroomed into mob action in London and several other British cities, where there has been a wave of violence and destruction committed by what's thought to be young (often masked) rioters. Burned buildings and cars and police stations, smashed windows, looted stores and homes, injured people (even one death), these are some of the images that have surfaced from Britain in recent days. To this point, almost nine hundred have been arrested and about 370 have been charged with various crimes.
As expected, British politicians are concerned by these events. Prime Minister David Cameron cut short his vacation, recalled parliament from its summer break, and tripled the number of police (up to 16,000) on the streets to help restore order. Almost certainly, Cameron knows his government will feel the heat. British citizens wonder why it's taken so long for the authorities to quell the rioters and reestablish security on the streets. Some have called for stronger, more effective police tools to be deployed; others have even requested military support. Meantime, it's likely that Cameron's political foes will use the riots as evidence that harsh cuts in the welfare state provoke societal instability.
Cameron has stated that the riots and violence are "criminality, pure simple." And this is true, of course: The rioters have committed criminal acts. But this begs a larger question. Why have these people caused such violence and destruction? Cameron believes the answer is a simple one. The rioters are thugs and hooligans, and that's what societal miscreants do. Yohanes, in his post, makes a similar argument. I take a different position. Instead of assuming that all of the criminal acts have been committed by thuggish opportunism, let's relax that assumption and see this matter as an empirical question in need of an answer. Let me explain.
Sure, there are some common features among the rioters, the criminals. Most seem to be under the age of 20, are from poor areas, and have little formal education and few job prospects. But what we know about violent and destructive mob action, and the events in Britain most certainly qualify, is that not everyone is similarly motivated. People in mobs participate in crime for different reasons. Some are aimless, lifelong criminals, but others often aren't. And I think it's a mistake to confuse these two groups.
In the specific case of Britain, I don't doubt that many of the rioters are thugs, a bunch of troublemakers who took advantage of the atmosphere of protest and the apparent lack of policing. But based on the description of events and the testimony of British locals, it's likely that there are a host of other factors that have contributed to the riots. Here's a non-exhaustive list of possible additional motives: revenge (against police, police stations for Duggan's killing), thrill seeking (a way to obtain some personal gratification, pleasure for doing something illegal), material gain (looting), and political/economic grievances (a means to signal dissatisfaction against austerity measures).
The last set of motives, political/economic grievances, have been summarily dismissed by talking heads. However, a very recent and remarkably timely discussion paper reveals significant findings that shed light on this topic. Jacopo Ponticelli and Hans Joachim Voth explore the connection between austerity measures and social unrest in Europe during 1919-2009. An extended discussion of the paper is beyond the scope of this blog post. (I encourage you to read it). But here's a money quote from the paper's conclusion: "Expenditure cuts carry a significant risk of increasing the frequency of riots, anti-government demonstrations, general strikes, political assassinations, and attempts at revolutionary overthrow of the established order. While these are low probability events in normal years, they become much more common as austerity measures are implemented." To be sure, more research on this subject needs to be completed. But the fact there's already some compelling empirical evidence on the record should make us hesitant to dismiss these variables as unimportant to the current riots in Britain.
Take one example. If some of the rioters really have been lashing out with revenge in mind, and we do know that police and police stations have been targeted, then imprisoning them might not solve all the problems. After all, the revenge seekers are only those people who were audacious enough to act on their feelings of disgust and hatred. It's very possible that they travel in circles of people (friends, family, neighbors) who harbor similar sentiments about British policing. And those people, in turn, likely voice their angry views about the police to others, further widening and entrenching the seed of antagonistic relations between citizens and the police.
In this hypothetical, the Cameron government ought respond by working with local governments and police forces to find ways to stabilize and improve citizen-police trust and confidence. Indeed, a cursory read of British newspapers in recent days shows that citizens from ethnically heterogeneous and low-income areas believe they're victims of widespread discrimination and harsh treatment by racist and xenophobic police. Obviously, these issues should be and already are being addressed to a degree. But maybe they are much more consequential to the stability of British society than was previously thought. It's something to think about.
Last Thursday, Mark Duggan, a suspected gang member, was stopped in a pre-planned operation and then shot and killed by London police in a low-income and multi-ethnic neighborhood. This was exactly the type of neighborhood in which ordinary citizens already distrust elites, politicians, and the police. The killing exacerbated these fissures. And when the police presented its account of events surrounding Duggan's death, which suggested that he fired the first shots, the locals contested it, arguing that Duggan posed little threat to the police. To them, Duggan was unjustifiably murdered by the police.
The killing sparked demonstrations on Saturday, which then mushroomed into mob action in London and several other British cities, where there has been a wave of violence and destruction committed by what's thought to be young (often masked) rioters. Burned buildings and cars and police stations, smashed windows, looted stores and homes, injured people (even one death), these are some of the images that have surfaced from Britain in recent days. To this point, almost nine hundred have been arrested and about 370 have been charged with various crimes.
As expected, British politicians are concerned by these events. Prime Minister David Cameron cut short his vacation, recalled parliament from its summer break, and tripled the number of police (up to 16,000) on the streets to help restore order. Almost certainly, Cameron knows his government will feel the heat. British citizens wonder why it's taken so long for the authorities to quell the rioters and reestablish security on the streets. Some have called for stronger, more effective police tools to be deployed; others have even requested military support. Meantime, it's likely that Cameron's political foes will use the riots as evidence that harsh cuts in the welfare state provoke societal instability.
Cameron has stated that the riots and violence are "criminality, pure simple." And this is true, of course: The rioters have committed criminal acts. But this begs a larger question. Why have these people caused such violence and destruction? Cameron believes the answer is a simple one. The rioters are thugs and hooligans, and that's what societal miscreants do. Yohanes, in his post, makes a similar argument. I take a different position. Instead of assuming that all of the criminal acts have been committed by thuggish opportunism, let's relax that assumption and see this matter as an empirical question in need of an answer. Let me explain.
Sure, there are some common features among the rioters, the criminals. Most seem to be under the age of 20, are from poor areas, and have little formal education and few job prospects. But what we know about violent and destructive mob action, and the events in Britain most certainly qualify, is that not everyone is similarly motivated. People in mobs participate in crime for different reasons. Some are aimless, lifelong criminals, but others often aren't. And I think it's a mistake to confuse these two groups.
In the specific case of Britain, I don't doubt that many of the rioters are thugs, a bunch of troublemakers who took advantage of the atmosphere of protest and the apparent lack of policing. But based on the description of events and the testimony of British locals, it's likely that there are a host of other factors that have contributed to the riots. Here's a non-exhaustive list of possible additional motives: revenge (against police, police stations for Duggan's killing), thrill seeking (a way to obtain some personal gratification, pleasure for doing something illegal), material gain (looting), and political/economic grievances (a means to signal dissatisfaction against austerity measures).
The last set of motives, political/economic grievances, have been summarily dismissed by talking heads. However, a very recent and remarkably timely discussion paper reveals significant findings that shed light on this topic. Jacopo Ponticelli and Hans Joachim Voth explore the connection between austerity measures and social unrest in Europe during 1919-2009. An extended discussion of the paper is beyond the scope of this blog post. (I encourage you to read it). But here's a money quote from the paper's conclusion: "Expenditure cuts carry a significant risk of increasing the frequency of riots, anti-government demonstrations, general strikes, political assassinations, and attempts at revolutionary overthrow of the established order. While these are low probability events in normal years, they become much more common as austerity measures are implemented." To be sure, more research on this subject needs to be completed. But the fact there's already some compelling empirical evidence on the record should make us hesitant to dismiss these variables as unimportant to the current riots in Britain.
Take one example. If some of the rioters really have been lashing out with revenge in mind, and we do know that police and police stations have been targeted, then imprisoning them might not solve all the problems. After all, the revenge seekers are only those people who were audacious enough to act on their feelings of disgust and hatred. It's very possible that they travel in circles of people (friends, family, neighbors) who harbor similar sentiments about British policing. And those people, in turn, likely voice their angry views about the police to others, further widening and entrenching the seed of antagonistic relations between citizens and the police.
In this hypothetical, the Cameron government ought respond by working with local governments and police forces to find ways to stabilize and improve citizen-police trust and confidence. Indeed, a cursory read of British newspapers in recent days shows that citizens from ethnically heterogeneous and low-income areas believe they're victims of widespread discrimination and harsh treatment by racist and xenophobic police. Obviously, these issues should be and already are being addressed to a degree. But maybe they are much more consequential to the stability of British society than was previously thought. It's something to think about.
Wednesday, August 10, 2011
Much Ado About London Riot
I generally don't like using a "straw man" argument in my writing. It smacks of intellectual laziness. Still, I think addressing this opinion piece in Al Jazeera is a good way to start this analysis:
The argument, however, is simply hogwash. Claiming the London riots as another "Arab Spring" is a huge insult to the reformers and political activists all over the world, especially those in the Middle East who had to brave themselves against regimes that were willing to kill their own citizens. Declaring the London riots another struggle for equality is giving legitimacy to a bunch of looters and robbers.
People do not riot because they feel angry due to inequality. Were this the case, there would be many more riots all over the world. In fact, compared to the rest of the world, European states, including the Great Britain, have much less inequality thanks to their generous social welfare system. People also do not riot because it makes them feel powerful.Were this the case, virtually every authoritarian government in the world will experience daily riot.
People riot because there are two important factors present. First is opportunity, when a government shows signs of weakness. The Arab Spring exploded after both the Tunisian and Egyptian government fumbled in dealing with the rioting. When the Bahrain government, supported by the Saudi government, decided to clamp down hard on the protesters, the "Arab Spring" in Bahrain simply wilted.
In London, the British government was completely caught off guard by this riot, because the rioters were organizing themselves using Twitter and Blackberry, and managed to form and disperse quickly, catching the police off guard. It is an urban blitzkrieg, in which the police, accustomed to conventional confrontation, was outmaneuvered by a bunch of youths with hand-held devices. That's why the riot exploded to this degree. The rioters, seeing the police's response as ineffectual and slow, managed to outwit them and escaped unmolested, emboldening the fence-sitters.
The second important factor is organization. There must be a group of people who organize themselves, creating a small nucleus of protesters that will provide a sense of invulnerability (due to the numbers) and protection (due to anonymity).
The type of riot depends on the organizer. The "Arab Spring" is an "Arab Spring" because it was done by a diverse group of people, representing parts of the society. The London Riot, however, is simply criminal violence, done by anarchists and thugs. There is nothing about inequality or racism. A movement against racism would not have attacked a minority neighborhood. A true movement against inequality and capitalism would not have burned stores and assaulted journalists. It is simply a carnival of crime, wrapped under the so-called idea of "justice," taking advantage of government's weaknesses and a social event that distract people's attentions and giving a fig leaf of legitimacy to these criminals.
The claim that the government had "take(n) away the last little things that gave people hope, the benefits, the jobs, the possibility of higher education, the support structures" might be true. Yet, it was not a direct cause of the riot. The fact that the majority of the British population remain unwilling to join in this carnival of crime, and in fact, working together to clean up the mess shows that this argument simply cannot hold the water. It is true that there's something deeper going on, but it ain't what that AJ opinion piece claims to be.
Let me give you a hint: It can be found here.
"Riots are about power, and they are about catharsis. They are not about poor parenting, or youth services being cut, or any of the other snap explanations that media pundits have been trotting out. Structural inequalities, as a friend of mine remarked today, are not solved by a few pool tables.In short, structural inequalities are the root cause of the riot and London riot is just another way of social empowerment, it's a revolt of the weak. This is London's "Arab Spring."
People riot because it makes them feel powerful, even if only for a night. People riot because they have spent their whole lives being told that they are good for nothing, and they realise that together they can do anything - literally, anything at all. People to whom respect has never been shown riot because they feel they have little reason to show respect themselves, and it spreads like fire on a warm summer night. And now people have lost their homes, and the country is tearing itself apart.
No one expected this. The so-called leaders who have taken three solid days to return from their foreign holidays to a country in flames did not anticipate this. The people running Britain had absolutely no clue how desperate things had become. They thought that after thirty years of soaring inequality, in the middle of a recession, they could take away the last little things that gave people hope, the benefits, the jobs, the possibility of higher education, the support structures, and nothing would happen. They were wrong. And now my city is burning, and it will continue to burn until we stop the blanket condemnations and blind conjecture and try to understand just what has brought viral civil unrest to Britain. Let me give you a hint: it ain't Twitter."
The argument, however, is simply hogwash. Claiming the London riots as another "Arab Spring" is a huge insult to the reformers and political activists all over the world, especially those in the Middle East who had to brave themselves against regimes that were willing to kill their own citizens. Declaring the London riots another struggle for equality is giving legitimacy to a bunch of looters and robbers.
People do not riot because they feel angry due to inequality. Were this the case, there would be many more riots all over the world. In fact, compared to the rest of the world, European states, including the Great Britain, have much less inequality thanks to their generous social welfare system. People also do not riot because it makes them feel powerful.Were this the case, virtually every authoritarian government in the world will experience daily riot.
People riot because there are two important factors present. First is opportunity, when a government shows signs of weakness. The Arab Spring exploded after both the Tunisian and Egyptian government fumbled in dealing with the rioting. When the Bahrain government, supported by the Saudi government, decided to clamp down hard on the protesters, the "Arab Spring" in Bahrain simply wilted.
In London, the British government was completely caught off guard by this riot, because the rioters were organizing themselves using Twitter and Blackberry, and managed to form and disperse quickly, catching the police off guard. It is an urban blitzkrieg, in which the police, accustomed to conventional confrontation, was outmaneuvered by a bunch of youths with hand-held devices. That's why the riot exploded to this degree. The rioters, seeing the police's response as ineffectual and slow, managed to outwit them and escaped unmolested, emboldening the fence-sitters.
The second important factor is organization. There must be a group of people who organize themselves, creating a small nucleus of protesters that will provide a sense of invulnerability (due to the numbers) and protection (due to anonymity).
The type of riot depends on the organizer. The "Arab Spring" is an "Arab Spring" because it was done by a diverse group of people, representing parts of the society. The London Riot, however, is simply criminal violence, done by anarchists and thugs. There is nothing about inequality or racism. A movement against racism would not have attacked a minority neighborhood. A true movement against inequality and capitalism would not have burned stores and assaulted journalists. It is simply a carnival of crime, wrapped under the so-called idea of "justice," taking advantage of government's weaknesses and a social event that distract people's attentions and giving a fig leaf of legitimacy to these criminals.
The claim that the government had "take(n) away the last little things that gave people hope, the benefits, the jobs, the possibility of higher education, the support structures" might be true. Yet, it was not a direct cause of the riot. The fact that the majority of the British population remain unwilling to join in this carnival of crime, and in fact, working together to clean up the mess shows that this argument simply cannot hold the water. It is true that there's something deeper going on, but it ain't what that AJ opinion piece claims to be.
Let me give you a hint: It can be found here.
Sunday, August 7, 2011
Behind the S&P's Downgrade
Regardless of all the hubbub on the debt ceiling earlier this week, the S&P downgraded America's rating by one notch after all, to AA+. Even though the U.S. Treasury questioned the S&P analysis, noting that the S&P underestimated the amount of deficit reduction by $2 trillion over the next decade, the S&P is probably justified in doing so, considering the domestic political mess that occurred last week, with the Tea Party rioting, the liberals gnashing their teeth, and Boehner chain-smoking so much that the fire department was called by concerned tourists - okay, I made the last part up, but check this really funny piece by Maureen Dowd for an over-the-top description on what was going on last week in Washington.
Like it or not, "the $2 trillion debate" is academic, and the $2 trillion reduction itself may or may not happen due to various political and economic conditions and accounting gimmicks, similar to Bill Clinton's budget surplus, which relied on a "Social Security Tax."
What really concerned the S&P is whether the US has the political will to actually slash the deficit without relying on accounting gimmick. I think FactCheck.org summed this dilemma nicely:
Still, nothing brings votes easier than yelling "tax the rich" and "these evil corporate interests," right? And it is easy to call the mob to bring pitchforks and torches against somebody who claimed it was difficult to make ends meet with $250k a year. Based on a FactCheck.org analysis, getting rid of the tax break on couples with income over $250k a year will only hurt less than a million people, and rolling back Bush' tax cut will produce $950 billion in savings annually. One should keep in mind, however, that in 2007, these people, which comprised of 10% of the population, had already paid 55% of all federal taxes and that number doesn't include local and state taxes, which will push their total tax contributions far higher.
At the same time, the liberals are right that cutting spending on various social safety net is a horrible idea as it will hurt the most vulnerable members of the society. But at this point, doing nothing to reform the entitlement system is simply postponing the inevitable, that without any significant reform, the current entitlement system is simply unsustainable. The reason? The fact that Americans are dying much later in life, along with the rapid increase of the health costs of treating people, are the main culprits of this development. But at the same time, nobody is willing to trim down the fat, which brings us to the current dilemma.
Aside from the entitlements issue, the biggest problem with the U.S. budget lies in the public sector spending. I am not against spending on things like education, but news like this or this which points out the inefficient and wasteful U.S. bureaucratic system--primarily due to the public union system--is rather alarming. Moreover, the financial crisis in Europe shows that the unbridled power of the union is one of the main causes of the inability of these troubled countries to take a much needed step to reform its economy.
How will the credit rating downgrade impact the U.S., (well, aside from probably higher interest rates)? Most likely not much will come of it, considering several factors, such as the fact that both Moody and Fitch still conditionally maintain America's debt rating as perfect. And most importantly, there probably isn't any alternative to U.S. bonds.
A few years ago, some experts argued that the Euro would eventually be the alternative to the U.S. bond. Yet events in the past years have shown the fragility of the Euro itself.
A strong currency is great in good times. It gives countries a license to splurge. For countries such as Greece, it provides credibility, allowing the Greeks to borrow beyond their means because everyone is sure that somebody will bail them out. Flush with cash, countries like Greece could opt to postpone painful needed reforms and instead cause some sort of "moral hazard," where the country would actually behave recklessly and irresponsibly because it were sure that others would bail it out in order to maintain the stability of the system.
The true test comes when times are tough. First, countries find out that they cannot devalue their currency and export themselves out of economic troubles. The market becomes wary, wondering whether other states, hurt by the economic crisis, will be willing to bail these countries out. The people become angry because they don't like painful reforms and they are getting hurt twice: first from the austerity measures and then from the economic downturn.
Such political and economic difficulties that currently engulfs Europe undermine its bid to be an alternative global currency.
What about other countries? China? Well, considering how inept it was in handling last week's train crash and various questions regarding its accounting practices, not to mention its really huge bad debts, it's not really ready yet to be a global financial powerhouse. Plus, the Yuan is a non-convertible currency, limiting its use as a global currency.
There are many other suitable candidates, such as Japan, India, Singapore, and Australia, but still, none of them has an economy as large and as influential as the U.S. currently does.
This is why even though the S&P has downgraded America's ratings, the impact might not be especially perilous. There is simply no alternative to the U.S.
Like it or not, "the $2 trillion debate" is academic, and the $2 trillion reduction itself may or may not happen due to various political and economic conditions and accounting gimmicks, similar to Bill Clinton's budget surplus, which relied on a "Social Security Tax."
What really concerned the S&P is whether the US has the political will to actually slash the deficit without relying on accounting gimmick. I think FactCheck.org summed this dilemma nicely:
"We won't attempt to assign blame to one party or the other for the deficits. There is plenty of blame to go around, some of which rests with an American public that won't accept cuts in the largest categories of public spending, and also resists tax increases on anybody but "the rich."Here's the problem: both sides are right and wrong at the same time. The conservatives are right that taxing businesses hurts growth. Besides, the US has the second highest corporate tax rate anyway, second to Japan, as admitted by the New York Times. (Check this link for the comparison to the effective EU Corporate Tax Rates.) The problem is the loopholes, as corporations are trying to find loopholes to avoid paying such punishing corporate tax rates. As a result, it is a good idea to reform the tax code.
Still, nothing brings votes easier than yelling "tax the rich" and "these evil corporate interests," right? And it is easy to call the mob to bring pitchforks and torches against somebody who claimed it was difficult to make ends meet with $250k a year. Based on a FactCheck.org analysis, getting rid of the tax break on couples with income over $250k a year will only hurt less than a million people, and rolling back Bush' tax cut will produce $950 billion in savings annually. One should keep in mind, however, that in 2007, these people, which comprised of 10% of the population, had already paid 55% of all federal taxes and that number doesn't include local and state taxes, which will push their total tax contributions far higher.
At the same time, the liberals are right that cutting spending on various social safety net is a horrible idea as it will hurt the most vulnerable members of the society. But at this point, doing nothing to reform the entitlement system is simply postponing the inevitable, that without any significant reform, the current entitlement system is simply unsustainable. The reason? The fact that Americans are dying much later in life, along with the rapid increase of the health costs of treating people, are the main culprits of this development. But at the same time, nobody is willing to trim down the fat, which brings us to the current dilemma.
Aside from the entitlements issue, the biggest problem with the U.S. budget lies in the public sector spending. I am not against spending on things like education, but news like this or this which points out the inefficient and wasteful U.S. bureaucratic system--primarily due to the public union system--is rather alarming. Moreover, the financial crisis in Europe shows that the unbridled power of the union is one of the main causes of the inability of these troubled countries to take a much needed step to reform its economy.
How will the credit rating downgrade impact the U.S., (well, aside from probably higher interest rates)? Most likely not much will come of it, considering several factors, such as the fact that both Moody and Fitch still conditionally maintain America's debt rating as perfect. And most importantly, there probably isn't any alternative to U.S. bonds.
A few years ago, some experts argued that the Euro would eventually be the alternative to the U.S. bond. Yet events in the past years have shown the fragility of the Euro itself.
A strong currency is great in good times. It gives countries a license to splurge. For countries such as Greece, it provides credibility, allowing the Greeks to borrow beyond their means because everyone is sure that somebody will bail them out. Flush with cash, countries like Greece could opt to postpone painful needed reforms and instead cause some sort of "moral hazard," where the country would actually behave recklessly and irresponsibly because it were sure that others would bail it out in order to maintain the stability of the system.
The true test comes when times are tough. First, countries find out that they cannot devalue their currency and export themselves out of economic troubles. The market becomes wary, wondering whether other states, hurt by the economic crisis, will be willing to bail these countries out. The people become angry because they don't like painful reforms and they are getting hurt twice: first from the austerity measures and then from the economic downturn.
Such political and economic difficulties that currently engulfs Europe undermine its bid to be an alternative global currency.
What about other countries? China? Well, considering how inept it was in handling last week's train crash and various questions regarding its accounting practices, not to mention its really huge bad debts, it's not really ready yet to be a global financial powerhouse. Plus, the Yuan is a non-convertible currency, limiting its use as a global currency.
There are many other suitable candidates, such as Japan, India, Singapore, and Australia, but still, none of them has an economy as large and as influential as the U.S. currently does.
This is why even though the S&P has downgraded America's ratings, the impact might not be especially perilous. There is simply no alternative to the U.S.
Thursday, August 4, 2011
Can we take Saif Qaddafi seriously?
The New York Times published an interview with Seif al-Islam el-Qaddafi in which Seif declared that the regime had struck an alliance with the Islamists and he declared that "Libya will look like Saudi Arabia, like Iran."
It is very doubtful that such alliance has happened. Islamists are fundamentalists, but they are not stupid. The last thing they'd do is hitch their sail to a sinking ship called Qaddafi's Libya. Moreover, it is very doubtful that Muammar Qaddafi himself is willing to turn his back from his own Green Book. Not to mention the questions such as who would be the new "Ayatollah" of Libya? It is very doubtful that Libyan Islamists will approve the selection of Qaddafi as an "Ayatollah" and far less likely is the idea that Qaddafi will be willing to put himself under the power of or share his power with an "Ayatollah."
Still, we cannot consider this simply as the last gasp of a delusional and desperate regime.
One thing that the Qaddafi's regime has been good in doing since its creation is in dividing and conquering its enemies, resulting in a very fragmented state, with tribes at each other throats and nobody really sure what's going on, except Qaddafi himself.
With the regime's survival at stake, the regime has been quick to seize any on sign of fragmentation within the rebel groups, which may not that difficult to do. The rebellion was in essence a mishmash of various tribes and people from various ideological backgrounds united by a single goal of overthrowing the Qaddafi regime. As the rebellion has been ongoing for months, the early euphoric sense of unity is steadily being replaced with the sense of tediousness. This situation is ripe for dissension and splits within the movement. The mysterious killing of General Younes and two of his colleagues may or may not have been orchestrated by Tripoli, but the effect is very beneficial for the Qaddafi's regime: it exposes the rift within the rebels' movement.
Saif Qaddafi's courting the Islamists is the latest attempt by the regime to launch a two-prong attack to undermine the opposition. First, it tries to create a rift within the rebel movements, who are generally suspicious toward the Islamists. While the Islamists may not interested in defecting to Tripoli, the insinuation from Saif is enough to create some questions within the rebel movements regarding the reliability of the Islamists.
The second prong of attack is directed toward the Europeans and the United States, who are providing military aid to the rebels. By stressing the Islamist element within the rebellion, Qaddafi is hoping that the U.S. and the Europeans will take a second look toward helping the rebels and instead push for a negotiable solutions to the Libyan conflict. In essence, the question is whether the US and Europe should aid the rebels, and indirectly, the Islamists within it, even though there's a possibility that the Islamists may hijack the revolution, like the Salafis might be doing in Egypt.
In any case, this offer inadvertently exposes a long term question on post-Qaddafi Libya: after the dust settles, what kind of Libya will emerge from the ruins of Qaddafi's regime?
It is very doubtful that such alliance has happened. Islamists are fundamentalists, but they are not stupid. The last thing they'd do is hitch their sail to a sinking ship called Qaddafi's Libya. Moreover, it is very doubtful that Muammar Qaddafi himself is willing to turn his back from his own Green Book. Not to mention the questions such as who would be the new "Ayatollah" of Libya? It is very doubtful that Libyan Islamists will approve the selection of Qaddafi as an "Ayatollah" and far less likely is the idea that Qaddafi will be willing to put himself under the power of or share his power with an "Ayatollah."
Still, we cannot consider this simply as the last gasp of a delusional and desperate regime.
One thing that the Qaddafi's regime has been good in doing since its creation is in dividing and conquering its enemies, resulting in a very fragmented state, with tribes at each other throats and nobody really sure what's going on, except Qaddafi himself.
With the regime's survival at stake, the regime has been quick to seize any on sign of fragmentation within the rebel groups, which may not that difficult to do. The rebellion was in essence a mishmash of various tribes and people from various ideological backgrounds united by a single goal of overthrowing the Qaddafi regime. As the rebellion has been ongoing for months, the early euphoric sense of unity is steadily being replaced with the sense of tediousness. This situation is ripe for dissension and splits within the movement. The mysterious killing of General Younes and two of his colleagues may or may not have been orchestrated by Tripoli, but the effect is very beneficial for the Qaddafi's regime: it exposes the rift within the rebels' movement.
Saif Qaddafi's courting the Islamists is the latest attempt by the regime to launch a two-prong attack to undermine the opposition. First, it tries to create a rift within the rebel movements, who are generally suspicious toward the Islamists. While the Islamists may not interested in defecting to Tripoli, the insinuation from Saif is enough to create some questions within the rebel movements regarding the reliability of the Islamists.
The second prong of attack is directed toward the Europeans and the United States, who are providing military aid to the rebels. By stressing the Islamist element within the rebellion, Qaddafi is hoping that the U.S. and the Europeans will take a second look toward helping the rebels and instead push for a negotiable solutions to the Libyan conflict. In essence, the question is whether the US and Europe should aid the rebels, and indirectly, the Islamists within it, even though there's a possibility that the Islamists may hijack the revolution, like the Salafis might be doing in Egypt.
In any case, this offer inadvertently exposes a long term question on post-Qaddafi Libya: after the dust settles, what kind of Libya will emerge from the ruins of Qaddafi's regime?
Tuesday, August 2, 2011
How Low Did the U.S. Go?
The New York Times on August 1, 2011 declared that the debt limit showdown:
Not that the world no longer thinks the U.S. is unimportant, but America has been steadily losing global respect. This may upset my liberal friends back in the US, but let me be blunt: if you have anti-war protesters, such as Code Pink, and thinkers and writers dominating the television set, denouncing the government, the army, and the war at the same time, other nations would see the U.S. as a a divided country, a paper tiger that would be defeated after another Tet. It has undermined both the American presidency and U.S. foreign policy.
In fact, many of the anti-American arguments that I have observed in Indonesia are taken straight from anti-war protesters and Noam Chomsky's books. The nuttier the arguments (such as Bush was responsible for planting the explosives in the twin towers), the faster they spread. In fact, Confessions of an Economic Hitman was a best seller in Indonesia and widely quoted as a proof of America's nefarious plots to establish global hegemony, even though the book's assertions are not backed by any fact or data and the author's credibility is seriously questionable.
Another factor to consider is the sub prime mortgage mess that lead to the Great Recession. While many careful observers would point out that the wrong-headed housing policies and derivatives wizardry were to blamed, others quickly pointed out that the wars had bankrupted the U.S., even though the percentage of defense spending (including the Iraq war) was relatively constant compared to its GDP. Guess, which chart the foreigners will believe?
It is true that when Obama came on stage, many believed he would "restore the U.S." The problem is Obama's lack of details in his presidential campaign meant that each country in the world had its own view on what a restored America under Obama would look like. Arabs in the Middle East believed that Obama would look at the region differently, unbiased by the "Israel Lobby." African states believed Obama would increase America's disbursement of foreign aid to his ancestral continent. Europeans believed they finally found their fellow liberal. In fact, they were so hopeful of this that they handed him the Nobel Peace Prize on a silver platter almost immediately after taking office. In Indonesia, there was a brief period of Obama-mania, with books written about Obama's childhood in Indonesia and a statue erected in Obama's honor. (it got taken down in a few months after some protests).
When those hopes were dashed, and Obama was preoccupied with his health care battle, continuing many of Bush's policies, and finally caught flat-footed during the Arab Spring, well, hell hath no fury like a hope dashed, with Obama's popularity ratings now even below Bush in the Middle East. The continuing economic recession, debate on heath care and the budget showdowns simply confirmed to the world that the America's power is declining rapidly and the country will soon go bankrupt due to imperial overstretch.
In short, the debt limit showdown did not destroy America's credibility abroad. It was a succession of blunders and bad-timed policies (mostly by Obama) that hurt both the U.S. presidency and America's credibility abroad.
"Chipped away at the global authority of President Obama, who was celebrated abroad when he came to office as a man who would end an era of American unilateralism. Now the topic of discussion in other capitals is whether the Age of Obama is giving way to an Age of Austerity, one that will inevitably reduce America’s influence internationally."I don't know about anywhere else, but that doesn't seem to apply here in Indonesia, where everyday the front page is dominated by corruption scandals within the ruling party. As I lamented in an article in the Jakarta Globe, these scandals have even crowded out a very important recent regional gathering here in Indonesia. The discussion about the impending American bankruptcy? Buried deep on page 7, if there's any news about it at all.
Not that the world no longer thinks the U.S. is unimportant, but America has been steadily losing global respect. This may upset my liberal friends back in the US, but let me be blunt: if you have anti-war protesters, such as Code Pink, and thinkers and writers dominating the television set, denouncing the government, the army, and the war at the same time, other nations would see the U.S. as a a divided country, a paper tiger that would be defeated after another Tet. It has undermined both the American presidency and U.S. foreign policy.
In fact, many of the anti-American arguments that I have observed in Indonesia are taken straight from anti-war protesters and Noam Chomsky's books. The nuttier the arguments (such as Bush was responsible for planting the explosives in the twin towers), the faster they spread. In fact, Confessions of an Economic Hitman was a best seller in Indonesia and widely quoted as a proof of America's nefarious plots to establish global hegemony, even though the book's assertions are not backed by any fact or data and the author's credibility is seriously questionable.
Another factor to consider is the sub prime mortgage mess that lead to the Great Recession. While many careful observers would point out that the wrong-headed housing policies and derivatives wizardry were to blamed, others quickly pointed out that the wars had bankrupted the U.S., even though the percentage of defense spending (including the Iraq war) was relatively constant compared to its GDP. Guess, which chart the foreigners will believe?
It is true that when Obama came on stage, many believed he would "restore the U.S." The problem is Obama's lack of details in his presidential campaign meant that each country in the world had its own view on what a restored America under Obama would look like. Arabs in the Middle East believed that Obama would look at the region differently, unbiased by the "Israel Lobby." African states believed Obama would increase America's disbursement of foreign aid to his ancestral continent. Europeans believed they finally found their fellow liberal. In fact, they were so hopeful of this that they handed him the Nobel Peace Prize on a silver platter almost immediately after taking office. In Indonesia, there was a brief period of Obama-mania, with books written about Obama's childhood in Indonesia and a statue erected in Obama's honor. (it got taken down in a few months after some protests).
When those hopes were dashed, and Obama was preoccupied with his health care battle, continuing many of Bush's policies, and finally caught flat-footed during the Arab Spring, well, hell hath no fury like a hope dashed, with Obama's popularity ratings now even below Bush in the Middle East. The continuing economic recession, debate on heath care and the budget showdowns simply confirmed to the world that the America's power is declining rapidly and the country will soon go bankrupt due to imperial overstretch.
In short, the debt limit showdown did not destroy America's credibility abroad. It was a succession of blunders and bad-timed policies (mostly by Obama) that hurt both the U.S. presidency and America's credibility abroad.
Al Jazeera's Presence in the U.S.
For various reasons, ever since its founding in 2006, Al Jazeera English (AJE) has struggled to gain a foothold in the U.S. It's presence has been very limited on cable and satellite services. But it looks like times are slightly changing. As of Monday, the network is getting expanded visibility in the New York area. For 23 hours a day, New Yorkers can view AJE on the cable channel RISE, which is carried locally by Time Warner and Verizon FiOS.
In my view this is a good development. In fact, I believe all Americans who subscribe to cable/satellite should have an opportunity to watch as much or little of AJE as they desire.
To be clear, my support for an expanded presence for AJE is not an endorsement of what's said or aired on the network. My support is given because, to my estimation, wider access to AJE is in America's best interests. The more citizens who understand foreign policy issues, especially those pertaining to U.S. stakes in and relations with the Arab world, the better it is for U.S. policymaking in general and national security in particular. Put simply, individuals who are knowledgeable about foreign policy are more likely to be active in and engaged with American politics, pushing their elected officials to embrace sensible policies that deal with political and security realities.
First, let's set the record straight. AJE is not nearly as repugnant as many Americans fear. Is it to the left of the left wing of the Democratic Party? Absolutely. Is AJE pro-Arab/pro-Palestinian? Definitely. But AJE is not nearly as loathsome, not even in the same ball park, as Hezbollah (Al-Manar) or Hamas tv (Al-Aqsa).
AJE is a legitimate news organization, with some novel shows and documentaries ("People and Power," "Egypt Burning," "The Arab Awakening") anchors and reporters (Ayman Mohyeldin), and interviewers (David Frost). It has done a good job covering the Arab Spring. And AJE has a wide reach across the world. Indeed, it has four broadcast centers (including Washington, DC) and 21 additional global bureaus.
But to be blunt, AJE is not a non-partisan source of news. Rather, it (and its sister network AJ-Arabic) is very much an activist news and broadcast organization. It takes sides on a host of issues and often puts forward an agenda. For good and bad, it frequently covers issues and events through the lens of powerless ordinary citizens. That's one reason AJE is despised by many corrupt dictatorships, especially those in the Middle East.
Second, most people who do have an opinion on AJE have never watched it or have never watched it on a regular basis. Let's give more Americans a chance to watch it so they can make an more informed decision about the station.
Third, by watching AJE, even if only occasionally, Americans will get a better feel for Arab politics, economics, and culture. Specifically, they will get to hear in-depth coverage of the debates that are ongoing in the Arab world. Moreover, they will get a sampling of the kind of information that's transmitted to Arab audiences. And with AJE's focus on the Arab citizen, at times though interviews with ordinary Arabs and at other times via direct citizen journalism, Americans are able to discover what Arab people are thinking and saying. Aren't these good things? Why should Americans rely solely on U.S. politicians or news sources to gather and disseminate this information to them, especially when both groups frequently have their own political agendas?
Oh, sure, Americans already have access to a host of English versions of foreign news web sites. But I suspect the average American will have an easier time locating AJE on their cable/satellite service than international news web sites via online search engines. Additionally, if people don't have a fast enough Internet connection, and many don't, then they won't be able to view news videos like AJE online. And lastly, given the importance of the Middle East and North Africa, which is AJE's main area of focus and expertise, to contemporary U.S. foreign policy, it's beneficial that Americans get acquainted with the AJ powerhouse.
In the end, an expansion of AJE's presence here in the States would likely lead to three different outcomes. Of course, many Americans won't tune in. And of those who do watch AJE, some will outright dismiss the programming as Arab propaganda. But another group will use the opportunity to get further insight into foreign countries. To me, however large or small that group happens to be, that's indeed a very good thing.
In my view this is a good development. In fact, I believe all Americans who subscribe to cable/satellite should have an opportunity to watch as much or little of AJE as they desire.
To be clear, my support for an expanded presence for AJE is not an endorsement of what's said or aired on the network. My support is given because, to my estimation, wider access to AJE is in America's best interests. The more citizens who understand foreign policy issues, especially those pertaining to U.S. stakes in and relations with the Arab world, the better it is for U.S. policymaking in general and national security in particular. Put simply, individuals who are knowledgeable about foreign policy are more likely to be active in and engaged with American politics, pushing their elected officials to embrace sensible policies that deal with political and security realities.
First, let's set the record straight. AJE is not nearly as repugnant as many Americans fear. Is it to the left of the left wing of the Democratic Party? Absolutely. Is AJE pro-Arab/pro-Palestinian? Definitely. But AJE is not nearly as loathsome, not even in the same ball park, as Hezbollah (Al-Manar) or Hamas tv (Al-Aqsa).
AJE is a legitimate news organization, with some novel shows and documentaries ("People and Power," "Egypt Burning," "The Arab Awakening") anchors and reporters (Ayman Mohyeldin), and interviewers (David Frost). It has done a good job covering the Arab Spring. And AJE has a wide reach across the world. Indeed, it has four broadcast centers (including Washington, DC) and 21 additional global bureaus.
But to be blunt, AJE is not a non-partisan source of news. Rather, it (and its sister network AJ-Arabic) is very much an activist news and broadcast organization. It takes sides on a host of issues and often puts forward an agenda. For good and bad, it frequently covers issues and events through the lens of powerless ordinary citizens. That's one reason AJE is despised by many corrupt dictatorships, especially those in the Middle East.
Second, most people who do have an opinion on AJE have never watched it or have never watched it on a regular basis. Let's give more Americans a chance to watch it so they can make an more informed decision about the station.
Third, by watching AJE, even if only occasionally, Americans will get a better feel for Arab politics, economics, and culture. Specifically, they will get to hear in-depth coverage of the debates that are ongoing in the Arab world. Moreover, they will get a sampling of the kind of information that's transmitted to Arab audiences. And with AJE's focus on the Arab citizen, at times though interviews with ordinary Arabs and at other times via direct citizen journalism, Americans are able to discover what Arab people are thinking and saying. Aren't these good things? Why should Americans rely solely on U.S. politicians or news sources to gather and disseminate this information to them, especially when both groups frequently have their own political agendas?
Oh, sure, Americans already have access to a host of English versions of foreign news web sites. But I suspect the average American will have an easier time locating AJE on their cable/satellite service than international news web sites via online search engines. Additionally, if people don't have a fast enough Internet connection, and many don't, then they won't be able to view news videos like AJE online. And lastly, given the importance of the Middle East and North Africa, which is AJE's main area of focus and expertise, to contemporary U.S. foreign policy, it's beneficial that Americans get acquainted with the AJ powerhouse.
In the end, an expansion of AJE's presence here in the States would likely lead to three different outcomes. Of course, many Americans won't tune in. And of those who do watch AJE, some will outright dismiss the programming as Arab propaganda. But another group will use the opportunity to get further insight into foreign countries. To me, however large or small that group happens to be, that's indeed a very good thing.
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