Monday, May 31, 2010

Should Israel have attacked the Gaza-bound ships?

Well, should the ships have been sailing towards Gaza in the first place?

If people think they can test Israeli resolve to protect itself, by simply having civilians on board ship in the manner usual to Islamist terrorist organisations, the people concerned are simply idiots and do not know what they are dealing with.

So what should be done to get civilian supplies through to the poor people of Gaza?

Take up the Israeli offer of civilian supplies to be delivered to Ashdod, from where Israel guarantees that all humanitarian cargo would be taken to the people of Gaza under international supervision.

Since the people who organised the ships that sailed towards Gaza did not take up the Israeli offer, it is clear that their agenda has nothing to do with delivering civilian supplies to Gaza.

Their agenda is rather to score political points against Israel at the cost of human lives.

The people who gave their lives knew that they might have to do so, and they are best compared to people who wish to commit suicide. Sphere: Related Content


The following piece is posted here by kind permission of the author, Mr Promise Hsu. It was originally publishe in Mandarin in VISTA magazine, March 8-17, 2010
and translated from Mandarin Chinese into English by Stephanie Schubmehl

By Promise Hsu
• The Toyota scandal
• The financial meltdown
• The rise of the United States, Japan, and China

What ties these world-shaping events together? Thanks to a lifetime of globe-spanning inquiry, two elderly Brits may have the answer.

“It is critically important for China to distinguish good capitalism from bad”, the 80-year-old William Hopper tells our reporter. With his brother Kenneth, 83, William has been creating a buzz in business and management circles, thanks to their 2007 book, The Puritan Gift: Triumph, Collapse and Revival of an American Dream, named by the Financial Times one of that year’s Top Ten Business Books.

For its 2009 reissue in paperback, the book was re-titled The Puritan Gift: Reclaiming the American Dream Amidst Global Financial Chaos. Not surprisingly, the financial crash has boosted interest this book. In an article for the magazine Strategy+Business, British management guru Charles Handy hailed the new version of The Puritan Gift as one of the top leadership books of 2009. According to Handy, leadership was in short supply in the year-long aftermath of the crisis on Wall Street and the Hoppers’ book served as an ideal reminder of where the business world truly stood.

In the January 2010 Harvard Business Review, executive editor Sarah Cliffe described it as “this astonishing book about American managerial culture.” She added, “I’ve never read a business book that packed so much information, history, and insight into one compact volume.”

Older brother Kenneth, once a department head at Procter & Gamble, has decades of industrial and management consulting experience under his belt. Younger brother William, an investment banker, has served in the European Parliament. The insights their book has to offer, though, are not simply a product of their professional lives. More importantly, the brothers are seeking an ultimate solution to the chaos that has engulfed the corporate and business sectors.

Today the Hoppers are busier than ever, constantly updating their blog, fielding lecture and interview requests, and corresponding with readers. Between February and March 2010, William was blogging almost daily. One item that caught his attention was Toyota CEO Akio Toyoda’s acknowledgment before a U.S. Congressional hearing that the company had “lost its way during a period of rapid growth.” The apology came as no surprise to William. He says Japan’s corporate sector began to lose its way years ago, when it retreated from the corporate system and workplace values imported during the U.S. occupation (1945–1952). “That,” William says, “was good capitalism.”

As for the bad kind, the brothers blame post-war American business schools, particularly after the 1970s. As curricula became dominated by “financial engineering,” profit and performance were prioritized before all else.

A Foreseeable Crisis

When the book’s first edition came out three years ago, William and Kenneth made a point of raising concerns about Toyota. They believed the automaker -- like Sony, Hitachi, Mitsubishi, Panasonic and other Japanese brands once synonymous with quality -- was losing its focus. As William points out, the evidence was emerging long before the brothers completed their book in 2006.

According to James P. Womack, who made a name for himself studying Toyota’s “lean production” practices, the carmaker’s troubles began in 2002. That was the year Toyota rolled out plans to expand its share of the global market from 11 percent to 15 percent. Womack derided the scheme as “just driven by ego,” calling the 15 percent goal “totally irrelevant to any customer.”

William Hopper’s analysis goes a step further. Back in 1993, he says, U.S. auto analyst Maryann Keller was already admonishing Toyota to take a long, hard look in the mirror. Keller’s book criticized Toyota for trimming vital “middle management” positions even as headquarters tightened its control company-wide. A top-down, hierarchical approach replaced what had been a bottom-up, participatory managerial culture; attention to detail and quality suffered as the company’s expansion picked up speed.

Many management experts would stop there, but, for the Hoppers, Toyota is only an example. They have a much broader vision. The Toyota scandal, the achievement and shattering of the American Dream, good and bad managerial cultures, the global financial crisis -- at first glance, it is difficult to see what any of these has to do with a book titled The Puritan Gift. Take a moment to think about what the title is saying, however, or engage more closely with the authors, and the connections become clear. What’s more, this book touches on many aspects of the globalized world we live in -- and more importantly, on our own individual lives.

In a sea of information, history, and concepts, the Hoppers seek the answer to a single question: what factors create a work environment that promotes well-being? In other words, why and how do people work? This is a fundamental question, because without such an environment, no company can experience sound growth. Some, like Toyota, may enjoy a moment of glory, but it will not last.

And so the Hoppers take their readers on a journey across centuries of history. One important conclusion they reach is this: the factors most conducive to the sound, sustained development of a work environment originate with a singular worldview -- one handed down from a group of migrants who left Europe for North America more than 400 years ago.

They were known as Puritans: a people who believed in stripping away man-made conceits and giving oneself over to the will of God. This God was supremely powerful, and as the word of God revealed to mankind, the Bible was the final arbiter in all matters. Puritans crossed the Atlantic in droves during the early seventeenth century, spurred on by their opposition to the way religion was practiced in England and throughout Europe. In North America, they intended to create a new homeland, one that would allow them to do God’s work.

As the Hoppers see it, this endeavor essentially laid the foundation for the modern free-market society. The values inherited from the Puritans are sharply distinct from those of other peoples and places. Despite their relatively small numbers, the influence of the Puritans is felt everywhere from education (they founded the Ivy League schools of Harvard, Yale and Princeton) to organizational management (the Presbyterian Church, republican government, the parliament, the board of directors). Here the authors would seem to be crossing into historical or even theological territory, which may come as a surprise for those accustomed to more traditional business fare. But the Hoppers have much more to show their readers.

The factors most conducive to the sound, sustained development of a work environment originate with a singular worldview—one handed down from a group of migrants who left Europe for North America more than 400 years ago.

Why Do People Work?

Both in their eighties, the brothers believe that the sustained, healthy development of a work environment is a product of spiritual and historical traditions. They learned this first-hand, which may be why the autobiographical portions of their book are so engaging. Kenneth and William are the sons of a chemist. Trained as an engineer, the youthful Kenneth went to work for a branch of Procter & Gamble after a colleague of their father’s touted it as the best-run industrial firm in the U.K.

Kenneth found himself fascinated by P&G’s workplace culture, which contrasted sharply with his experiences in two British firms. Despite the company’s complex structure, decisions on points of detail were handled with great efficiency.
That experience planted the seeds for the book Kenneth would complete at the age of 80. He wanted to find out what was going on in the world. Later, Kenneth’s professional life became what amounted to an extended global tour of workplace cultures. Working in Ireland, he witnessed the rebirth of the Irish economy. He also watched continental Europe rebuild itself after World War-II. In the United States, he had the chance to observe the Golden Age of the American corporation. And he was in Japan as that nation was shaping itself into the world’s second-largest economy.
Throughout his long working life, Kenneth occasionally took time to write about his experiences, whether for newspapers or academic journals. Later, he planned to integrate these pieces into a single work, but health problems prevented him from completing the project. Fortunately, his brother William helped put the book back on the agenda. William’s experience as an investment banker on both sides of the Atlantic, and as a member of the European Parliament, served to broaden Kenneth’s outlook.

He also introduced Kenneth to a friend who would prove critically important to the brothers’ work: Peter F. Drucker, a pioneer in modern management theory. In a letter dated October 3, 1983, Drucker expressed his eagerness to read Kenneth’s forthcoming book, which he intended to order from the publisher as soon as it came out. Kenneth still has the letter. As it turned out, the book would not be completed until after Drucker’s death in 2005. Kenneth still regrets that his friend, who dedicated his life to bettering society, never saw the book in its final version.

Aside from his friendship with the brothers, Drucker contributed indirectly to The Puritan Gift by making a pivotal introduction. It was through Drucker that the Hoppers met three American engineers who had played a central role in Japan’s postwar reconstruction. This gave them the opportunity to examine Japan’s transformation and offered a new perspective on the United States.

Part of the blame for Japan’s corporate crises lies with the curriculum that has dominated American business schools since the 1970s. To an even greater degree, this helped bring about the sub-prime mortgage crisis in the U.S. & Europe.
Another friend whose help shaped The Puritan Gift was American management guru W. Edwards Deming. Deming, too, had helped rebuild Japan after the war, and he is still remembered in the Japanese business world for his role in convincing manufacturers to prioritize the pursuit of quality management.

In the course of discussions with these eyewitnesses and their own work in Japan, the brothers formed a conclusion: it was thanks to the influence of Puritan values that Japan had been able to develop its impressive postwar line-up of quality brands. Furthermore, the social changes that later swept the so-called Asian Tigers and the Chinese mainland signified the spread of these values.

William’s recent blog commentary on the Toyota scandal revisits territory covered in the new edition of the book. The current scandal, he says, is actually a reflection of a much larger crisis, one aspect of which is the decline in “middle management” mentioned earlier. As the Hoppers see it, Japan began to turn away from Puritan values in the 1990s, when many young Japanese were setting their sights on an American MBA degree -- one of them being Akio Toyoda, the face of Toyota’s younger generation, who was 26 when he graduated from a Massachusetts business school in 1982. In contrast to older generations, they had little first-hand knowledge of the industries they were working in.

Part of the blame for Japan’s corporate crises, the Hoppers argue, lies with the curriculum that has dominated American business schools since the 1970s. To an even greater degree, this helped bring about the sub-prime mortgage crisis in the U.S. and Europe. These failures, they go on to explain, began when business education departed from its original Puritan ethos. To a typical Puritan, work was not simply a way to earn a living, to amass wealth, or to display one’s talents; rather, it was a “vocation” or “calling.”

Central to the concept of “vocation” is the idea that people do not work for themselves, or because they have no choice but to work. They do so in order to fulfill a God-given mission, for the good of themselves and of others. As for human needs, the Creator has promised to provide for all those who do His work. Just as the historical influence of the Puritans has spread into every industry, the blessings of this all-powerful Creator extend far beyond what any individual can conceive. Toyota was fixated on becoming the world’s biggest automaker; Wall Street was busy amassing paper wealth through complex feats of “financial engineering.” Viewed in this light, they have been straying farther and farther from their roots.

The Cult of the Business School

Over recent decades, the authors write, business education has lost sight of its own values; as education became increasingly focused on landing a decent job, the big questions were shunted aside. Aware only that the subject was gaining in popularity, students and their instructors had no intrinsic motivation which would tell them why they ought to work, giving rise to professional managers whose only goal was making money.

The Hoppers have dubbed this phenomenon “the Cult of the (so-called) Expert”. Cults, in one form or another, have wrought havoc throughout history. In the political sphere, they have been known to threaten popular wisdom, and the same holds true for economics. Of course, as the Hoppers acknowledge, the business school did not create this cult in and of itself. But as educational institutions, business schools -- along with the entire university system -- are responsible for molding new generations of professionals.

The problem is with the notion that a prestigious business degree is an instant ticket to the top -- when in fact, any job at all presents an opportunity to develop expertise. The dot-com bubble, the Enron scandal and now an epic financial crisis have given the business world a wake-up call. Goldman Sachs, for instance, reduced the proportion of MBA graduates among its new hires in 2000, from 75 percent to 25 percent. The consulting firm McKinsey is also recruiting fewer MBAs.

But it isn’t just the corporate world that’s in trouble, according to Kenneth and William. Corporations are only one facet of society. The Toyota scandal and the Credit Crisis, for example, have something in common. As companies began sacrificing quality in favor of performance and rapid growth, there were insiders who recognized that something was gravely wrong. Yet they failed to bring their concerns to management’s attention, or failed to make management take them seriously. For a worker to deliver bad news directly to a superior requires uncommon courage; character of this sort is rooted in an individual’s fundamental attitude toward work, which in turn is rooted in prevailing social mores.

The Hoppers support a view that Peter F. Drucker came to hold in his later years: fixing the corporate sector will require a society-wide revival of spiritual values. Just as it took nearly two centuries to establish the United States, such a revival will not happen overnight. It took the Hoppers a lifetime simply to write their book. But perhaps their story is cause for optimism: late in their lives, they have given us an extraordinary gift. The Hopper brothers have never forgotten that a society, once it has managed to achieve prosperity, must decide where to turn next. Sphere: Related Content

Monday, May 24, 2010

Private-sector employees versus Government employees

In the USA, it has been fashionable to hit out against government for a very long time.

Sadly, in spite of its intellectual brilliance, McKinsey is captive to that old fashion - at least according to the evidence of a report that it published a few months ago, titled "Improving worker performance in the US government":

According to the article in the McKinsey Quarterly,
"The US federal government lags well behind the private sector in a number of important organizational-performance measures, particularly in fostering employee engagement, talent management, and accountability, a McKinsey survey finds. But the federal government enjoys relative strengths in the elements that deal with the heart of an organization. Government managers—more so than their private-sector counterparts, the survey found—understand and embrace the direction and vision of their organizations and are motivated to make a difference"

On the other hand, according to the same survey, fewer private-sector managers than federal government managers understand and embrace the direction of their organizations (55% versus 60%) and are motivated to make a difference through their work (63% versus 70%).

I should have thought that McKinsey of all organisations would know that excellence in speed, safety and fuel efficiency are not really that useful from the perspective of getting to your destination, if you are going in the wrong direction. Sphere: Related Content

US-China 2nd "Strategic and Economic Dialogue"

The US media would like us to believe that the talks are starting more or less positively, with the news items titled, for example, "China strikes conciliatory note".

Nothing could be further than the truth. The Chinese leadership realises its weak position, and wants to do nothing that will upset the applecart. The US leadership does not understand this, and has done nothing to push China towards any real move that will either benefit the US or the people of China.

1. For example, China has "vowed to spur domestic demand" but China has been vowing to do this ever since the crisis started some 2 years ago. Result so far: zero.

2. China has indulged in more or less equally long-standing talk of the yuan being reformed provided it is done in a way that is " independent, controllable and gradual". ("Indpendent is Chinese code for "don't push us". "Controllable" is Chinese code for "provided it doesn't lessen the hold of the Communist Party in China". And "gradual" is Chinese code for "Don't expect any substantial change").

3. Similarly, when China says that it is working to resolve the concerns of foreign companies about its "indigenous innovation" program that basically cuts foreign companies out of doing technology innovation-related business in China, that is code for "keep looking, because you will look for a long time to see any resolution".

4. What China wants is high-tech exports from the US, on the pretext that this would help balance the US trade deficit - but the correction in the deficit would be relatively small, and it would come at the cost of selling out any possibility of long-term advantage for the US economy over the Chinese economy - in other words, the short-term benefit would come at the cost of permanent long-term disadvantage to the US economy.

5. Neither, it appears, will the US get any movement out of China on North Korea, in spite of the North Koreans sinking a submarine belonging to South Korea.

&. To Beijing's statement that Taiwan is a part of China and that the US should not be selling arms to Taiwan, the Obama administration provided no riposte - at least not in public.

So far, I make that 6 to China, 0 to the USA. Sphere: Related Content

Sunday, May 23, 2010

Obama on track for financial reform

Now that the Financial Oversight Bill has been voted through the U.S. Senate, it is time to consider the situation.

Of course there exist TWO versions of US financial reform, the version that was passed by the Senate last week and the version that was passed earlier by the House.

President Obama's administration can cherry-pick which bits they like of which Bill, through the U.S. process that attempts to smooth the differences between the two Bills and present a single version.

Apparently, the President's administration prefers the Senate's version for its treatment of consumer protection, of the too-big-to-fail syndrome, and of the management of systemic risk.

The Obama administration does not like a provision in the House's Bill that seeks to exempt auto dealers from the supervision of the consumer protection agency. Republican senators have a touching concern for the red tape that a consumer protection bureau would create too much red tape - clearly, Republicans are more concerned by the red tape that would result than they are concerned about the protection of consumers. Naturally, it would be better to have consumer protection without red tape. There are simple means of doing so (e.g. banning loans for simple consumption, allowing loans only for investment) but neither of the US parties seems interested in simple solutions. So, as the choice is between consumer protection with red tape, or no consumer protection at all, every sensible person will prefer, even at the cost of red tape, the protection of consumers.

On the other hand, the administration prefers the way the Senate version requires banks to spin off their derivatives trading - though the Treasury has indicated that it is open to a compromise that would permit banks to trade in derivatives as long as those activities were kept separate from deposit-insured banks. How this can be done is difficult to imagine. So XYZ Bank will keep its deposit-taking activities separate from its derivative trading activities, let's say by having two different legal entities within the same overall house - let's call that XYZ House.

Now, will the market/share price of XYZ House be dependent only on its deposit-taking activities? Clearly, the market would not be that stupid, and the market/share price would also be dependent on XYZ's derivative trading activities. Since the volumes and margins involved in derivatives trading are usually many times those involved in deposit-taking, clearly the market- and share-price of XYZ House would be much more dependent on its derivatives trading subsidiary. In effect, therefore XYZ House would be an investment bank with a small deposit-taking function. The investment bank would make huge losses or profits (that's the nature of investment banking), while the deposit-taking function would profit a much smaller steady income. Since the whole matter of whether or not to separate the functions of investment banking and deposit-taking was being discussed as a result of the crisis, which made it clear that one factor causing the crisis was the merging of investment banking and deposit taking, it is not clear how the "division" of the two activities within the same house sorts out the problem. In fact, a glance at European companies, which DO separate the activites should show that the division is not, and has not been, a solution at all.

Summary: the Obama administration has chosen the right options - those that are moral, ethical, just and humane.

Let's hope that the President's administration has the gumption now to drive these through. Sphere: Related Content

Saturday, May 22, 2010

Stupid research on the Internet and Happiness,8599,1989244,00.html

This makes me think of another piece of research:
people who drink moderately are happier than people who don't drink at all; but people who drink to excess are much happier than people who drink moderately; and happiest of all are people who are permanently drunk. Sphere: Related Content

Explanations for the generation-long over-optimism on the part of equity analysts :

According to Harvard Business Review's "The Daily Stat", reporting research by McKinsey, equity analysts have been over-optimistic for a generation:

"For the past quarter century, equity analysts' earnings-growth estimates have been almost 100% too high. Their overoptimistic projections have generally ranged from 10% to 12% annually, compared with actual growth of 6% (excluding the spike in growth from 1998–2001).... Only in strong-growth years such as 2003 to 2006 did forecasts hit the mark".

Neither McKinsey nor HBR explore why this may be so.

I suggest three possibilities:

1. That there is something personally wrong with most equity analysts (only over-optimistic people are attracted to the profession)

2. That there is something the matter with the way they are educated (their education programmes them to be over-optimistic)

3. That there is something awry with the way they are compensated (they are paid for being optimistic, and penalised for being pessimistic or even realistic).

Any other explanations, anyone? Sphere: Related Content

Thursday, May 20, 2010

Crunch point in the US debate on financial reform

So the Democrats in the US Senate failed yesterday to muster enough votes from their own party to cut the long-lasting debate and move to voting on the final bill itself.

Is that a good thing or a bad one?


It simply means that we are at crunch point regarding what sort of bill will eventually be put to the vote.

In other words, whether all the debates of the last year or so, will produce a reform that is worthwhile or will have been simply a lot of huffing and puffing with no worthwhile change.

On one hand, the delay gives more time for banks to continue lobbying senators; on the other hand, it provides an opportunity for the bill to be toughened .

The most significant toughening lies in Senator Cantwell's amendment that would reinstate the Glass-Steagall Act, so that commercial banking is once again separated from investment banking - which would once again prevent the sort of gambling that took place with ordinary people's pension and other money as well as with the national money of countries such as Greece and Iceland, and with the money of hundreds of municipalities and American and other states that are now therefore either insolvent or on the brink of bankruptcy. Sphere: Related Content

Wednesday, May 19, 2010

Meeting distortion with distortion

At the Annual Dinner organised by the Confederation of British Industry (CBI), the UK Chancellor (Finance Minister) George Osborne is reported to have declared that the aim of the new UK government "is to create the most competitive corporate tax regime in the G20, while protecting manufacturing industries.”

Here we go again! Which nation will devalue its currency most? Which government will give away the most as subsidies? Which government will tax least? Has the stupidity of such moves not become apparent to all people with common sense yet?!

As long as these "national competitive" policies are followed, we will continue to program the global economy for the sorts of crises that we have seen increasingly since the commencemnet of a global economy (which I date from the fall of the Berlin Wall).

What we need is a global level playing field devoid of subsidies, with much greater currency competition (including many more complementary currencies), with equal taxation and the same provisions for financial regulation, health, safety, environmental responsibility, and minimum guaranteed standards of living for human beings (which I put forward for discussion as: one square meal a day, two sets of clothing suitable for the weather concerned, and minimum adequate shelter).

It is only then that we will have a genuinely free global market. Those who argue for anything less are not real free marketers at all. Sphere: Related Content

Bravo Merkel!

German Chancellor Angela Merkel's move to ban financial gambling (betting on shares and bonds that are not owned, also called "naked short selling") is absolutely the right step.

Even though it would have been better to take the whole of the Eurozone with her, when it became clear that the Eurozone as a whole would not move, Chancellor Merkel has bravely walked ahead alone.

Let others gamble if they want to - and suffer the consequences.

Let those who do not want gambling of the sort that led us into the current crisis join Germany in banning this kind of casinoism.

Though why is the ban on only the 10 most important stocks/Eurozone sovereign bonds and CDS? Why not on all of them? And what about gambling on commodities?

Let those who really believe that prices are going to go up or down buy or sell the actual stocks or bonds or commodities, and not simply gamble on them in financial casinos. Sphere: Related Content

Why the Iranian deal with Turkey and Brazil is and should be welcome

Though the US has announced new multinational sanctions against Iran, which I also welcome given the lack of transparency in Iran, that is a separate matter from the Iran-Turkey-Brazil (ITB) deal.

Under the ITB agreement, Tehran will ship 1,200 kilos (just over half of its supposed uranium stockpile) to Turkey, where it will be enriched under internationally-transparent arrangements to the level necessary for use in radiation therapy and other medical applications.

Iran usually touts, as an explanation for the huge amount of uranium enrichment it carries out, the need for such nuclear medical and other “peaceful research”.

However, if all of Iran's intentions were peaceful, why would it so fiercely resist international inspection? Sphere: Related Content

Tuesday, May 18, 2010

Another round to common sense

The decision by the new UK Chancellor (or Finance Minister), George Osborne, to avoid tangling with the new EU-wide rules for regulating hedge funds and private equity firms is another victory for common sense.

Though not all is looking rosy on the US front (which needs to be watched closely), the next round in the EU will be the debate in June over plans to create an regulatory system for EU financial services as a whole.

My view continues to be that a patchwork of national or regional (EU) regulatory systems does not make sense, and that we ought to move to a global regulatory system.

However, national and regional systems may be a necessary step in that direction.

Meanwhile, without transparency, the best-designed regulatory systems will fail. So the essential battle continues to be whether or not we will have accounting systems that provide transparency (see my review of the book Unified Financial Analysis by Dr W. Brammertz and others).

I agree of course that rules and regulatory systems (and even transparency) by themselves will not prevent people who are determined to do so from obfuscating and cheating, and that therefore the renewal of morality, and the evaluation of the moral standards of the key players in the financial system remains key to everything.

Which is why it is so distressing that financial services providers continue to resist integrating ethical evaluations even for new recruits.

As I pointed out elsewhere, someone who recently completed his doctoral dissertation on a topic related with this broad field wrote to me as follows:

"Though I was able to graduate, the story of my dissertation is largely the story of research that never took place.... I approached (more than two dozen) banks and investment funds with a proposal to do ethics related research, and was consistently turned down. In my dissertation defense, I compared myself to a fly trying to get through a glass windowpane, (but) the financial world remained forever on the other side."

The parentheses above are mine.

As far as I can work out, his research started at the height of the boom, and he persisted with his efforts to do the research till well after the bust.

Was the refusal of the banks and funds to co-operate with the research mere cussedness, or did the banks and funds know that they should not be letting any research get done on the ethics in their companies? Well, that was then...

Now we are in a new world of transparency and re-regulation. Is this not the right time for ethical testing to be introduced into recruitment for all companies? Sphere: Related Content

On US drone attacks and "American aggression"

On the Independent Institute (USA) website discussing this topic, there is the following:

"Have U.S. drone attacks in Pakistan put Islamic terrorist groups on the run--or have they instead weakened U.S. security by creating more enemies eager to attack American targets? John O. Brennan, the White House's chief counterterrorism advisor, recently defended the drone attacks, claiming that they have degraded the capability of anti-U.S. terrorist groups. In contrast, Independent Institute Senior Fellow Ivan Eland argues that the drone attacks have helped to radicalize Islamists, both strengthening them politically in Pakistan and increasing the likelihood of attacks against Americans in retaliation....It failed to dawn on Brennan that the terrorist attacks wouldn't be occurring in the first place without aggressive U.S. behavior in Islamic lands"

This is simple-minded. Of course there is US "aggression" in many places, some justified and some unjustified. But the question in this particular matter is: what is the definition of "US aggression" according to Islamists?

If it is, as appears to be the case, the existence of Israel, and the existence of US military bases in the Middle East (particularly Saudi Arabia), then it is clear that the US can never stop "aggressing", and that the US will therefore always be under attack by Islamists.

That is what is not understood by those who deride Huntington's thesis regarding the clash of civilisations.

The very ntion of free speech, for example, is anathema to Islamists, as is the very existence of secular states such as India, or Maoist states (such as Nepal) or pseudo-Marxist states such as China.

Islamists will always seek some particular example of excess or wrong on the part of the governments of these countries in order to gain our sympathy. But they will never be satisfied simply by the acknowledgement or correction of excess or wrong on the part of non-Islamists (whether notionally Muslim or otherwise).

What Islamists seek is the imposition of their version of civilisation on the whole of the world. So if universities stop teaching courses on Islam that do not follow the Islamist version, will that satisfy Islmists? No. If Israel stopped existing, would that satisfy Islamists? No. If the US withdrew all its military bases from Saudi Arabia and every other country outside the US, would that satisfy the Islamists? No. Islamists will be satisfied only when their version of Islam is imposed by force on the whole world.

If we do not understand that, we are living in a dream-world that has nothing to do with reality. Sphere: Related Content

Saturday, May 15, 2010

American versus Indian philanthropy

Bain & Co reports that, in spite of the number of the super-wealthy in these countries, charitable giving in India and China is just 0.6% and 0.1% of GDP respectively - of which only about 10% comes from individuals, with the rest provided by governments and foreign organizations.

In other words, the super-rich in India contribute only 0.06% of GDP as philanthropy.

Compared to China, where the super-rich give about six times less (only 0.01% of GDP), India looks very good.

But the world's greatest private giving comes from the U.S., where it is 2.2% of GDP. And nearly three-fourths, or 1.155% of GDP, is given by individuals!

In other words, comparatively, American individuals give away nearly 20 times more than we Indians give. Sphere: Related Content

Saturday, May 08, 2010

Rounds One and Two to the Public; Round Three to Big Finance

I am not sure whether a day of global mourning should be announced.

The Brown-Kaufman amendment, which would have limited the size and leverage of the largest banks, was defeated in the Senate.

What was galling was not merely the defeat but the size of the defeat: 33-61.

So that was Round Three.

In Round One, a 93-5 majority passed the bi-partisan Dodd Shelby Amendment which dropped the possibility of a $50 billion industry-supported fund to cover the cost of unwinding a firm and ensure shareholders and unsecured creditors bear losses when the government liquidates a business.

In Round Two, a 96-1 majority voted in the Boxer Amendment to bar use of taxpayer funds to rescue failing financial companies (as I have written earlier, what matters is the exact wording of these amendments, and I have not yet had the opportunity of looking at these).

So winning Rounds One and Two was good news; losing Round Three was bad news. Now there is nothing to stop the tendency of the largest players to gobble up smaller banks. There is already a trend toward oligopoly...

However, what is even more important is Round Four: the Kanjorski amendment, which allows the preemptive break up of large financial institutions that – for any reason – pose a threat to financial or economic stability in the United States. The only flaw in the Amendment is that it empowers regulators to do so, rather than instructing the immediate breakup of the six largest banks in the USA which do in fact right now pose such a threat.

If you are a US citizen or know any of the Senators, write and encourage them to do the right thing: approve the Kanjorski amendment, preferably in the tighter form referred to in the preceding para. Sphere: Related Content

Tuesday, May 04, 2010

The battle now underway in the US Senate

So the finance reform bill is being debated, with voting expected to start today on certain non-controversial clauses.

The main bill is apparently nearly 1,600-pages (I haven't seen them yet!) but it was developed over six months of negotiation between the Democrats and the Republicans.

The very first amendment is expected to be proposed by Democratic Senator Barbara Boxer.

She wants to add a clause or phrase saying that no "taxpayer funds" can be used in future to bail out financial institutions.

This is an idea likely to gain support from both parties.

But the key question is going to be the definition of "taxpayer funds", since money paid by taxpayers is only a very small part of government funding (even if that part provides the base for everything else that the government does).

There are numerous ways which do not involve the direct use of taxpayer funds (e.g. bonds, derivatives, government guarantees/ directives/ nods and winks - as in China!) which would have an effect similar to the actions that were taken by governments to rescue banks at the height of the crisis.

The specific words and the definitions are the therefore the things to watch, in order to determine whether the legislation will be full of holes or (more or less) solid. Sphere: Related Content

Monday, May 03, 2010

Pssst...want an organ transplant?

Apparently, organ transplants are available in a number of Chinese government military hospitals.

There are no receipts and no medical paperwork.

One gets a call from China when an organ is available. One must go immediately. One is picked up in a van from the airport....

The cost is approximately £70,000.

Who do the organs come from?

Why the secrecy?

Why the lack of paperwork?

People who need the transplants do not ask questions.

But do not some questions need to be asked on behalf of those who have provided the organs by dying - or being killed? Sphere: Related Content