Avuncular American

Capitalism's Not Just For Cronies, Crooks & CPAs

With 2008/2009 looking ominously like 1929's Crash and the ensuing Great Depression, it's not surprising that journalists will zero in on tragic stories like the recent suicide of German billionaire Adolf Merckle, who threw himself under a train as his firm faced insurmountable debts.  Merckle's family, I'm sure, is in a state of shock, a state the train driver likely shares.  But how about his conglomerate's 100,000 employees?  Imagine how they feel.

In France over the holidays, we commiserated with my wife's sister, whose employer has announced a restructuring plan that will seriously affect the lives of his employees.  Though not directly linked to "la crise" - as the current economic climate is called - the move has already meant job loss, dislocation, and high anxiety.  Close to retirement, sister-in-law is likely to be spared personal hardship, but she is genuinely upset - to the point of tears - about the effect on her co-workers.  She has worked in the factory her entire adult life.

Elsewhere in France, it's a cousin who had to say a long, excruciatingly long, goodbye to his employer, a major electronics manufacturer, which once employed thousands of people in his provincial city.  Cousin's last couple of years were spent retraining fellow employees, for jobs they knew were not going to materialize.  "It was the financiers," he told us.  They knew nothing - and cared less - about the core business.  You can imagine the rest of the story - manufacturing is now done in China.

Both stories, very close to home, tell me that we're missing something big in the "whither capitalism?" debate.  It's true, capitalism has earned itself a pretty rotten reputation of late, what with Bernard "Ponzi" Madoff, trillion dollar losses of intangible (and incomprehensible) assets, and numb skulled management by the behemoths of the US car industry.

What's missing is the human element.  Apart from the unfortunate Herr Merckle, we haven't yet reached the brokers-out-windows depths of the Depression (though I recall that one of Madoff's victims ended his life).  But regular people - whether evicted from their homes, bereft of their retirement savings, or given the pink slip - are already suffering in their millions.

Michael Moore, who keeps track of things in his native Michigan, wrote of the pre-Christmas atmosphere while Congress fiddled with the Big Auto bailout:

We have a little more than a month to go of this madness. As I sit here in Michigan today, tens of thousands of hard working, honest, decent Americans do not believe they can make it to January 20th. The malaise here is astounding. Why must they suffer because of the mistakes of every CEO from Roger Smith to Rick Wagoner?

Last summer, the excellent Franco-German TV channel ARTE ran an in-depth documentary on the disconnect between management and those being managed.  Beyond the widening gap in remuneration, it was more a matter of the "I will it, therefore it will happen" school of management.

Daniel Goeudevert, former Ford and VW manager, described the attitude: "Our company expects X percent growth this year.  But it's up to you - the line managers, engineers, technicians - to decide how to get there."  Goeudevert said that "impossible" is not an acceptable answer, and that the result is that many highly qualified employees are driven to the psychiatrist - or worse.

Brothers Kenneth and William Hopper have written a book, The Puritan Gift, which, despite its possibly off-putting title, is increasingly becoming required reading as capitalists the world over ask themselves "how did we get here?"  The Hoppers suggest that as business school MBAs, accountants, and financiers came to run companies, the link with the "main knowledge" - the core business that the Puritans strove to perfect - became increasingly tenuous.  And get this: they point out that the "engine companies" that drove the mighty American economy were, not all that long ago, free of debt.  Listen to a great BBC "Global Business" interview with the authors here.

CPAs should be confined to balancing (but not cooking) the books, crooks are best behind bars, and crony should just be a synonym for old friend, not an adjective for a deviant form of capitalism.  None of them should be running the major business, financial, or political institutions that - properly led - might make Western economies the success they once were.

That's what the workers of the world would appreciate - decent leadership, in all senses of the term.  In exchange, they'll perform wonders, and will be capitalism's best friends.

Freedom from Fear: Roosevelt, Updated

Prepare yourselves for another great Obama speech, whether he delivers it on Inauguration Day January 20 or at his first State of the Union address - maybe he'll do both.

TIME Magazine, which portrayed the President-Elect in a FDR pose, drew the parallels between Roosevelt's rescue of Depression-era America after Hoover and Obama's hoped-for bailout after the Bush years.  Other than sharing party affiliation and having to clean up after Republican economic meltdowns, Franklin Roosevelt and Barack Obama were both endowed with a secret weapon - their mighty oratorical skills.

Roosevelt's first inauguration speech - "the only thing we have to fear is fear itself" - was so apt for the moment and so full of memorable lines that I recommend that you read it (you can also listen to an excerpt) on the "History Matters" website.  Oh, and if you are frustrated (and fearful) that you've had to wait until January 20 to say goodbye to Bush, remember that Roosevelt only took over from Hoover on March 4, 1933 - a full four months after the 1932 election.

Read today's Paul Krugman Op-Ed in the New York Times and you'll see that the Nobel laureate is concerned about the D-word.  Krugman fears a downward spiral where "businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy."  Fear begets fear.

Oratory, of course, is just a vehicle, and in the wrong hands - Hitler comes to mind - can become demagoguery.  But skilled oration of the kind that Obama practices, like Roosevelt's stirring words in the depths of the Depression, can get people to focus on the solutions, now that the problems are associated with the bad old days of Dick and Dubya.

January 6 marks the anniversary of another memorable Roosevelt speech, which he gave in 1941, when the United States was still at peace.  It became known as the "Four Freedoms" speech (see 1946 stamp issued in Roosevelt's honor after his death in office).  Returning to a familiar theme, Roosevelt's Fourth Freedom was "freedom from fear."  FDR identified Axis use of "a new one-way international law, which lacks mutuality in its observance."  Sound familiar?

Franklin Roosevelt knew, and Paul Krugman and Barack Obama know the deadening power of fear.  Fear has been one of the tools of the Bush Administration.  Fear can be used to convince people what they should be against; it is much less useful a tool to solve problems, and is useless if you want to harness good will and make it work for the commonweal.

Roosevelt gets the last word (Inauguration, 1933)

This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.

Financial-Judicial-Governmental Crisis: Belgium's Vacuum

Last summer I wrote of "Belgium's Lost Year," marking twelve months of political confusion after inconclusive national elections in June 2007.  Now that the very tenuous government formed by Yves Leterme has submitted its resignation (its fourth), the country will apparently spend Christmas and New Year's consumed with the never-ending political drama.  Or perhaps not.  Crisis or not, there are feasts to be consumed and parties to be thrown.  And politics really is the last thing that Belgium needs more of.

The proximate cause of Leterme's fall is government interference in the judicial process over the resolution of the Fortis Bank crisis, violating the separation of power.  But Leterme's fall could also be seen as the first governmental casualty in the worldwide financial crisis.  It is his government's eagerness to get its way in the bailout of Fortis that led to tinkering with the judicial process.

Belgium's Leterme and his coalition government may be the first direct political casualties of the financial crisis, but indirectly, we know that John McCain paid the price for being in the same party as George W. Bush.  The financial crisis, metastasizing into an economic crisis, may claim other governments before it is over.

At the very time that the private sector is increasingly dependent on bailouts from governments, public coffers are denied tax income from a constricting private sector.  Where is the bailout money going to come from when governments like those in Belgium and the U.S. run out of money?  The printing press?  China?  But then who gets to bail out China when its industry feels the pinch from shrunken Western demand?

Belgium usually muddles through, and the King will have his work cut out for him to deal with this latest resignation.  He refused to accept Leterme's previous ones, though, as wags have noted, the PM's political lives are dwindling.  Even cats have only nine lives.

With this, I wish all my readers a Merry Christmas, a happy Hanukkah, and survival in 2009.  It will be a good New Year, because it won't be 2008 any longer.  I'll be in places with intermittent internet connections over the next ten days or so, so please stand by for full Avuncular production in 2009.

Shoes? Throw the book at Bush & Cheney

Full disclosure: I enjoyed watching, and replaying, the shoe incident in Iraq as much as anyone.  Muntazer al-Zaidi might be suffering a few broken bones, but he's probably lucky that the Iraqi security people got to him before a Secret Service bullet.  And thanks to Emine Saner in yesterday's Guardian, we have a cultural guide to insult symbolism throughout the world.

But here's the thing: if getting a pair of shoes thrown at him is the worst that George W. Bush experiences, then he's getting off very lightly.  If anything, al-Zaidi's gesture of frustration is symbolic of the feelings of millions, not just in the Arab world, who will see Bush take leave of Washington on January 20 and say to themselves:  That's all?  He just walks away?

Bush and his VP Cheney deserve more than ineffective (but entertaining) gestures.  They deserve a hearing - in court.  Blogger/lawyers Scott Horton of Harper's and Glenn Greenwald of Salon.com have done yeoman work over the years documenting the Bush Administration's transgressions of US law and the Constitution, especially in the matter of torture.  They focus on the truly important, while the rest of us get distracted by shoes, Blagojevich, and Madoff.

The latter are, despite their apparently brazen corruption, ultimately transitory characters.  Bush and Cheney, however, have bequeathed America a stain that will be long lasting.   So they deserve - not just shoes - but the book.

Giving Information Ministers a Bad Rep

Cholera is a calculated, racist attack on Zimbabwe by the unrepentant former colonial power, which has enlisted support from its American and Western allies so that they can invade the country.

Sikhanyiso Ndlovu, Zimbabwe Information Minister (CNN, 15 December 2008)

There are no American troops in Baghdad! The infidels are committing suicide by the hundreds on the gates of Baghdad.  We slaughtered them.

Mohammad Saeed al-Sahhaf, aka "Baghdad Bob," Iraq Information Minister (USA Today, April 2003)

It's unfair to all those earnest information ministers out there in the world to quote two of the most notorious deniers-of-reality of this century.  Just Google ministry of information and see what you come up with.  Links to information ministries in all manner of countries with little or no press, free or otherwise, but a helpful ministry to provide whatever meets their approved version of reality.

During the two World Wars, Britain had a Ministry of Information, which, according to the UK National Archives, was "the central government department responsible for publicity and propaganda."

The United States has no such "central government department," though some would argue that it needs one.  Public Diplomacy, the responsibility of the State Department, vies with "Strategic Communication," which increasingly has a military accent.  In such quality blogs as "Mountain Runner," observers like Matt Armstrong engage readers to ponder what institutional and legislative arrangements best suit the U.S.  Ex-USIA officers Patricia Kushlis and Patricia Lee Sharpe in Whirled View show how much of the experience acquired under the defunct United States Information Agency has been lost after its forced absorption into the State Department almost a decade ago.

This post is not really intended to give proper treatment to a very weighty subject (Matt is doing that in a big way next month in a conference in Washington).  But last week's outburst from the Zimbabwe Information Minister blaming cholera on everyone but his own president's misrule underlined again that it's not the messenger, nor the medium, but the underlying reality that counts.

America's progress in "the war of ideas" will depend - as has its failure in the last eight years - on the content of its policies.  Garbage in, garbage out.  Practice what you preach.  What goes around, comes around.  Reap what you sow.

It matters much less whether the Minister of Information or the White House Spokesman provides the (dis)information.  Credibility, once lost, takes ages to restore. Among the many things that must be done starting January 20, restoring America's reputation will take everything that a President Obama can give it.

Gotta Change: The American Way to High Office

Short of the Blagojevich Reform Revolution (in addition to wanting an ambassadorship or some other plum post, he actually promised to “change fundamentally the way campaign dollars are raised in the state of Illinois”), it would really just help to recognize that the function of Personnel is a largely professional, as opposed to political, function.

Two articles this week point us in the right direction, and both touch on the staffing of the State Department.  I don't mean the Foreign Service, which has a highly competitive, non-partisan process for entry.

No, it's the spoils system of political appointments, which, as Pat Kushlis reminds us in Whirled View, has resulted in "burrowers" left behind by the Bush Administration in the future Hillary Clinton State Department:

Does she realize how shrunken the State Department has become and will she be willing to spend the capital to turn the situation around? Does she understand how demoralized its professional staff is?

How does she plan to handle that new category of employees created by the Bush administration called Schedule B – created to place W loyalists in positions they can hold onto for life – unless the individual position itself is abolished in its entirety? Talk about W’s Trojan Horses and the expansion of the political spoils system, once again, at the expense of professionalism.

We're not talking about the usual Ambassadorial political appointees, who must submit their resignations as a matter of course whenever there is a change of President.  No, these burrowers are, as Pat says, "Trojan Horses" who try their best to blend into the woodwork and pretend they are career civil servants.

And for a look at how the Bush White House Office of Presidential Personnel dealt with sensitive appointments to foreign affairs positions, here's Thomas Sweich in yesterday's New York Times:

[The] interviewer was part of a large corps of 20-somethings — some were in their early 30s — who ran the Office of Presidential Personnel. Many of them were sons or daughters of supporters of President George W. Bush. Others had connections through congressmen. With few exceptions, they had one thing in common: very little experience and a very big attitude.

Another top foreign service officer called me after his interview to be ambassador to a volatile African country. “The problem was,” he told me, “the kid interviewing me could not pronounce the name of the country I was being interviewed for. It made for an awkward interview until he just started saying ‘the country we are considering you for.’”

We've seen this before: it was the Green Zone Way, the CPA career path, from RNC to Baghdad.  Those 20-somethings who had the right attitude on abortion, and no experience in the Middle East.

The Obama Transition team has so much on its plate, and there are those 300,000 applicants for a couple of thousand jobs.  But as it sifts through the CVs, I suggest they heed Sweich's cautionary tale, and bring a bit of adult supervision back to government.

Fewer Coups, But Men-With-Guns Thrive

"Why coups are less and less popular," a fascinating chart on The Economist website, is worth a look.  It's a snazzier version of the report put out by the very serious HIIK, the Heidelberg Institute for International Conflict Research, as part of the Human Security Report Project (HSRP).

It shows how "le coup d'etat" is way down as a means of toppling governments.  From its heyday in 1963, when there were 25 coups, through 2007, when there was just one.

Of course you never know: there used to be a joke in US embassies about how a CIA station in West Africa would submit an annual coup prediction, knowing that they'd eventually get it right.

I only experienced one coup, whose initial stage was largely bloodless: the Algerian Army's overthrow of one of its own, President Chadli Bendjedid in 1992, and its subsequent cancellation of elections that the Islamist FIS party was poised to win.  We had a view from the living room of the tanks below our window, streaming down the waterfront boulevard in Oran.

Though the coup itself was relatively bloodless, the aftermath has been more than a decade and a half of bloodletting: Algeria descended into a spiral of terrorist violence and reprisal from which it has yet to fully emerge.

I'm sure that the people who developed the coup chart are meticulous in their methodology, and have footnotes to annotate instances of regime-change, where, like in Iraq in 2003, the coup was administered from the outside.

And then there's the category of regime-change in a stateless territory, like the overthrow of the Somali Islamic Courts by US surrogate Ethiopia, which Aidan Hartley ("The Zanzibar Chest") describes so well in the current Vanity Fair.  That's a "coup" for you: the only group which is capable of reining in on the anarchic warlords and pirates is overthrown.

Sometimes militaries don't need to carry out a coup to exert their power, as Steven Cook illustrates in his book "Ruling But Not Governing."  In which he shows how the militaries in Egypt, Algeria, and Turkey, in ways both overt and subtle, exercise the real power behind the scene.

Coups beget coups.  My diplomatic career began in 1979, in the same month that the Shah of Iran was overthrown in the Islamic Revolution.  His career had begun in a coup, helped to power in 1953 by the CIA.  Some of my diplomatic classmates wound up as hostages in the 1979 US Embassy takeover.

I went off to the "quiet" Caribbean, and just missed witnessing the pro-Cuban coup on the island of Grenada in March 1979.  During my time in the Eastern Caribbean, I dealt with some of the aftermath of Maurice Bishop's coup.  He in turn was killed in a 1983 coup, which precipitated (presaged is another word) Ronald Reagan's "rescue" of the island from the Cuban menace.  Live by coup, die by coup.

This is beginning to resemble something from Forrest Gump, interloping on history.  Sorry.

So I will end with today's "Analysis" from BBC World Service, which you can listen to here.   It's full of examples - like Condoleezza Rice meeting first with Army chief General Kayani during her recent visit, before she even sees the elected civilian leaders - of why in Pakistan, it's still the Army that calls the shots.

Coups: they may be falling out of favor, but their absence is not proof of democracy's rise.  In much of the world, men-with-guns, whether of the respectable kind that have traded their uniforms for business suits, or those who command child soldiers, are still very much with us.

African Reputations: Ghana & Zimbabwe

There was never a better time to prove the point - Governor Palin, are you paying attention? - that Africa is a continent and not a country.  The news coming from two widely separated corners shows the contrast:

Ghana: the country's fifth democratic, contested presidential elections are taking place today, and the country is debating how best to manage an oil bonanza due to start in the next two years

Zimbabwe: starvation has exacerbated the cholera epidemic, which is added to the endemic hyper-inflation and political violence.  Now even some African leaders are calling for armed international intervention to save the country from Robert Mugabe's calamitous rule.

If you are looking for the latest information on Ghana's elections, check this wonderful page from the BBC World Service, which provides audio and text background and results starting 1830 GMT on Sunday.  For local flavor and minute-by-minute updates, read "Think Ghana" and its Decision '08 blog, by three enterprising young Ghanaians.

Personally, I want Ghana's winning streak to continue, for it is a very impressive country.  Airports tell you something about a country, and Accra's international airport is clean and calm - extremely reassuring in a region where air travel is sporadically deadly.  Ghana - even before the discovery of oil - was fast on its way to becoming a regional center; French is increasingly overheard, thanks to francophone businessmen seeking a safe place to do business near sometimes war torn Ivory Coast.

But it was not always so.  I returned from a series of trips to Ghana a couple of years ago, and was enthusing about the country's progress with a friend who had served in the Peace Corps in the French-speaking Sahel in the Eighties.  She was surprised at the change from her time in the region, as Ghana's reputation then was one of military coups, corruption, instability, and firing squads.  Today, an interested visitor might see the seaside firing ranges that the very professional Ghanaian Army now only uses for target practice.  In 1979, that's where they carried out the execution of the losers in a military coup.

This oscillation in the reputation of African countries is nowhere more evident than in Zimbabwe, which was known as the "jewel of Africa" in better days.  Before its 231 million percent annual inflation rate and $200 million Zimbabwe Dollar note (AFP photo at left from yesterday is already outdated).  For an idea of the extent of the paradise that was lost, read "How To Kill a Country" in the December 2003 Atlantic by (current Obama State Department Transition Team adviser) Samantha Power:

The country's economy in 1997 was the fastest growing in all of Africa; now it is the fastest shrinking. A onetime net exporter of maize, cotton, beef, tobacco, roses, and sugarcane now exports only its educated professionals, who are fleeing by the tens of thousands. Although Zimbabwe has some of the richest farmland in Africa, children with distended bellies have begun arriving at school looking like miniature pregnant women. How could the breadbasket of Africa have deteriorated so quickly into the continent's basket case? The answer is Robert Mugabe... who by his actions has compiled something of a "how-to" manual for national destruction.

Dr. Power likely thought that five years ago Zimbabwe had reached its nadir; today it's impossible to say just how much lower the country can go.  And unless Mugabe himself contracts the rampant cholera, it's hard to imagine what - short of his army turning on him - can put an end to the misery.

"Nation branding," or the cultivation of a country's reputation, requires more than a marketing effort for African countries.  No PR campaign on CNN International or BBC World can erase the total failure of governance and the evident misery of Zimbabwe's population.  But Ghana, which returned from the precipice of failed statehood, offers hope to a post-Mugabe Zimbabwe.  The question is: what will be left to govern?

Security Blanket: Obama Cabinet

In French, they refer to the head coach as the sélectionneur - much more than a talent scout, it's the person who selects team members.  If you're looking for hints on how President-Elect Obama will conduct his Presidency, look no further than yesterday's announcement of his selections for key members of the national security team (photo source: Change.gov).  He gets the top talent.

We knew already that Obama ran a world-class election campaign.  Now, we have a series of moves during the transition designed to instill confidence in a badly shaken country.  The champagne glasses from the post-election parties had barely been put away when he held a series of press conferences to unveil his economic team and outline elements of his stimulus plan.

Fixing the economy still has to be Priority Number One for the incoming administration.  So it's all the more reassuring that the people he has put in place in the foreign affairs, defense, and domestic security positions are powerful, intelligent players.  While this will not absolve him of international duties, it will give him a freer hand in focusing first and foremost on shoring up the domestic economic and societal pillars of US national security.

Much of the focus has been on Senator Hillary Clinton's nomination as Secretary of State.  It should be clear that she will be the central player in US foreign policy - itself a clear break from the Bush years, where Cheney and Rumsfeld succeeded in militarizing US engagement with the world.

Nor is there any doubt that Hillary Clinton will bring, as her biographer Carl Bernstein puts it, "star power" to Foggy Bottom.  While that is fine in terms of visibility in the world arena, how much of an institution-builder will Hillary Clinton be as Secretary of State?  Only two "SecStates" in recent decades were recognized within the building as institution-builders: George Schultz and Colin Powell.

The moment is ripe: both Defense Secretary Robert Gates and National Security Adviser-Designate James Jones are favorable to a realignment of power, away from reliance on military force and for reinforcing America's powers of persuasion - diplomacy in all its forms.  Clinton has allies in key places.

I know next to nothing about Governor of Arizona, Janet Napolitano, slated to head the huge Department of Homeland Security, but this Time Magazine profile is illuminating.  This is what she said of proposals to build a wall across her state and the rest of the US-Mexican border: "If you build a 50-foot-high wall, somebody will find a 51-foot ladder."  It's refreshing to hear that kind of candor.

The Attorney General-designate, Eric Holder, will head the Department of Justice, which includes a key national security agency, the FBI.  But many of us will be looking to Holder to put "Justice" back in the DOJ, after the Bush years of trampling on the Constitution.  Quite apart from the important role of tracking and prosecuting the bad guys will be a return to the special independent status of the Attorney General, discussed here by attorney/blogger Glen Greenwald in Salon.com.

It does look like Barack Obama has - fulfilling a campaign promise - chosen a bipartisan "best and brightest" national security team for his administration.  It's good to have the security blanket that they can provide.

But as if to steal the limelight from the foreign affairs fest - or to underline that it's still the economy, stupid - the day ended on two real economic downers: (1) the US economy has been in recession for the past year, officially and (2) California, the country's largest and wealthiest state and sometimes called the "world's fifth largest economy," declared a financial emergency and is essentially bankrupt.

I'm glad Obama can call on all the talent in the above picture for the national security crises, of which there will be no shortage.  But we really need the next President to fix the dire economic situation in the "homeland."  No security without economic health and vigor on Main Street.

What's the Bush Legacy Worth? I'd Say 20 Years

If you can stomach it, read excerpts from George W. Bush's "interview" with his sister (?) for National Public Radio on his legacy: "I came to Washington with a set of values, and I'm leaving with the same set of values."

Values.  I did a word search in the White House transcript for words like "torture," "financial crisis," and "depression," but came up with naught.

True to form, the born-again President looks to a higher Father: "I have recognized I am a lowly sinner seeking redemption."  How convenient.  We'll never know whether he'll be redeemed, as that's between him and his Creator.

Earthbound punishment for torture is another matter.  According to lawyer Scott Horton - Justice After Bush: Prosecuting An Outlaw Administration - in the current Harpers

18 U.S.C. § 2340 makes it a crime for any “person acting under the color of law” to “inflict severe physical or mental pain or suffering (other than pain or suffering incidental to lawful sanctions) upon another person within his custody or physical control.” The penalty for this crime—as Bush’s Office of Legal Counsel carefully noted in a 2003 memo on the subject—is up to twenty years in federal prison.

Twenty years...  That's about as long as it will take for the United States to dig out from the mess he has created.  Two decades of undoing the harm to the nation's working and middle classes.  Twenty long years of hard labor - starting with an Obama Administration - to build up the nation's moral standing in the world, after the blustering buffoons (Bush, Cheney, and Rumsfeld) squandered the country's ability to lead.

The White House released the transcript on "Black Friday."  How appropriate.  As he prepares to scurry off to Crawford - maybe the only place safe from international arrest warrants - Bush leaves behind a country where Black Friday shoppers literally - and lethally - stampede in the rush to the bottom.  Into a Wal-Mart, to buy what?  Melamine-tainted Chinese-made candy?  Toxic toys?  Quite a Christmas that will make.

Quite a legacy, Mr. Bush.