Restoring Trust

For three years during the Carter Administration, I served at the U.S. Mission to the United Nations in New York as the US Alternate Representative to the Trusteeship Council (while also being responsible for all issues related to Latin America). The TC was a legacy from the post-WW II situation in which many colonies of former imperial powers that had changed hands between the Western powers and the Axis powers, including those that had carried over from the League of Nations Mandate system, were placed under the oversight of the United Nations, with individual countries, mostly previous colonial powers, becoming "administering authorities." As such, it was considered one of the "principal organs" of the UN system, including the General Assembly, the Security Council, the Economic and Social Council and the International Court of Justice (World Court). It occupied one of the principal chambers of the United Nations (pictured above), a room totally decorated and donated by the government of Denmark. Given the commitment toward self-determination of peoples that was written into the UN Charter, the role of the TC was very important and accompanied the entire process of decolonialization, including both Trust Territories and ordinary colonies, that took place from the early 1960s to the early 1990s.

.

By 1978, however, the only remaining Trust Territory was Micronesia, formally called the Trust Territory of the Pacific Islands (TTPI), some 2,000 small islands in the middle of the Pacific Ocean most of which had been fought for island by island by the United States in defeating Japan. A special representative with the rank of ambassador negotiated with the Micronesians over a new status arrangement that would end the Trusteeship, and we at the UNTC worked to prepare the way for the end of the Trusteeship, but carrying out annual meetings and promoting adoption of the Micronesian's own constitutions which would give them self-governing status and allow them to become independent or "associated states" while maintaining US military basing rights on the islands.

.

Although at the time, we were concerned the Soviet Union, with its veto power in the Security Council would try to prevent the end of the UN Trusteeship in Micronesia, we laid the foundation for the ultimate independence of the three Micronesian nations to emerge and by 1991 (the Federated States of Micronesia, the Marshall Islands and Palau) themselves become members of the United Nations. By that time the USSR had ended and Russia did not object to the arrangements. The role of the TC had been totally fulfilled. Instead of eliminating the Trusteeship Council, its functions were suspended and every two years a President and Vice President is elected by its current members.

.

In the early 1990s some of the policy advisers to President Bill Clinton suggested that the TC be transformed into an organ responsible for overseeing "Failed States." That stirred some debate, but was never carried forward. Since then this idea has occasionally been revisited. Meanwhile, without specifically designating a particular UN organ to carry out the administration of failed states, a de facto system of trusteeship began to emerge in the UN system. The new name for this system under international law has been labeled "international territorial administration." From Kosovo to East Timor, the UN has taken responsibility for parts of other states that have broken away from their "mother countries" or required international administration under conditions of conflict and needed to be assisted by the UN. (a couple of excellent recent books by international legal scholars have been written: See Carsten Stahn, The Law and Practice of International Territorial Administration: Versailles to Iraq and Beyond, Cambridge University Press, 2008; Ralph Wilde, International Territorial Administration: How Trusteeship and the Civilizing Mission Never Went Away, Oxford University Press, 2008).

.

The United States can no longer unilaterally occupy other countries or territories as it did in Iraq, and only later establish some kind of "coalition of the willing" to try to legitimize its action. Only actions that are sanctioned by the United Nations or an appropriate regional organization will be considered as legitimate, and the UN Trusteeship system in particular offers the kinds of oversight by the UN and an ability of peoples under trusteeship to come to the UN to voice their concerns or grievances against an "administering power." It is possible for the UN itself to act as an administering power under the system. This is likely to be the way in which future trusteeships will be managed. Although it can be said that a de facto trusteeship system exists now, it would be much better if these situation be brought under a formal system with guarantees that the international community is responsible for the restoration of free and independent countries. It would serve as a kind of ER for sick states. We sorely need that in the world today as part of a broader system of Global Governance. And it would not be a bad situation for the deliberations over these failed, failing or fragile states to take place within the dignity and grace of the Trusteeship Council Chamber.

Zimbabwe: Only Regime Change Will Free its People

Zimbabwe is an African country that had all of the advantages of becoming a self-sustaining and even wealthy nation. It was a victory for the people of Africa that a white racist regime was overthrown in Rhodesia with a lot of support from the international community. Many whites remained and continued to maintain their productive farms. Unfortunately, the new Zimbabwe came under the control of a single party ZANU-PF dictatorship led by its erstwhile liberation leader Robert Mugabe. Mugabe used reverse racism, seeking to take over the prosperous and productive farms of Zimbabwe's white minority through forced land invasions as a way of enriching his supporters, ridding the country of whites and maintaining his grip on power. In the 1980s, Mugabe unleashed his notorious North Korean-trained Fifth Brigade, dominated by his own majority Shona tribe, on Matebeleland, where 30,000 people were killed and thousands more raped and maimed.

Mugabe has persecuted not only the whites but all opposition groups using his his thugs of both the party, the military and police to arrest, beat, imprison and murder them and so called veterans to harass them. When the opposition Movement for Democratic Change, led by Morgan Tsvangirai appeared to have won the plurality in three way national elections in March of last year, Mugabe cracked down on the opposition so that a fair run-off would be impossible and was boycotted by the MDC. Mugabe ran alone, declaring his victory as President.

The situation in Zimbabwe under Mugabe's rule has gone from bad to worse. The economy continued to deteriorate as productive sectors were marginalized. The Zimbabwe currency became worthless, with continuous inflation and printing of new denominations in the billions and trillions of Zimbabwe dollars that could buy almost nothing. As things deteriorated, a cholera epidemic took hold that has now killed over 3,800 people and sickened over 80,000 and continues to grow, creating a major health threat for Zimbabwe's neighbors already flooded by refugees.

Under extreme pressure from the African leadership, with South Africa taking the lead, Mugabe was forced to accept a coalition government with the MDC, under a "power sharing" arrangement, with Mugabe remaining president and Morgan Tsvangirai becoming the Prime Minister of that government. However, control of the military remains in Mugabe's hands and even control of the police is spilt. The MDC has largely been handed the hot potato of the failed economy. The new MDC leadership is counting on international assistance to rebuild the country, requesting billions of dollars. Even as the new Prime Minister was taking office, his followers continued to be arrested without explanation. Suddenly, there has been an increase in the number of farm invasions by Mugabe supporters. Tsvangirai continues to speak optimistically in favor of the coalition arrangement. It is questionable, however, whether Mugabe and his followers really intend to make the arrangement work or are simply trying to buy time by appearing to go along with international pressures, while perhaps organizing for further repression.

In a recent book Dinner with Mugabe: The Untold Story of a Freedom Fighter who Became a Tyrant, by Heidi Holland, the South African journalist describes her relationship with Mugabe over a number of years. She basically assesses him as a person with a stunted personality who does not have the capacity to empathize with those around him. She describes him as "in denial." (For her interview on NPR last June see: http://www.npr.org/templates/story/story.php?storyId=92036177) In truth, Mugabe constantly describes a world in which the West is out to get him. This has become a self-fulfilling prophesy as countries have leveled sanctions against his government.

Mugabe is frequently compared with Adolf Hitler, or called the Hitler of Africa. I do not think that this is an unfair characterization. Like Hitler, Mugabe has used racism as a means of promoting his own hold on power, has fostered a one-party militarized state, has ruled for the benefit of his clique of supporters at the expense of his own people and has been indifferent to the suffering of his own people. Something bordering on a slow motion genocide of his own people has been taking place.

Mugabe has already admitted that he is willing to be considered "a Hitler ten fold."

That statement and the brutality of his regime is apparent in the following video.

http://www.youtube.com/watch?v=JTxYa-QjX20

Zimbabwe is still a back burner problem, but under the current regime, things will only continue to deteriorate there leading to more deaths and abuses of human rights verging on genocide. The international community will have to consider regime change in Zimbabwe. We wish Mr. Tsvangirai well, but have little faith in his optimism. A tyrant is always a tyrant, and there is only one way to deal with such a leader. This is a Valkyrie moment. Sic semper tyrannis.

Carnival 2009

We welcome the beginning of this year's Carnival in Brazil and other parts of Latin America and Mardi Gras in New Oreleans. Certainly, carnival in a year of economic and social turmoil should tell some interesting stories. But it is also an opportunity to acknowledge the freedom of the human spirit and the capacity for humans to create and express beauty.

Of course Brazil, and especially Rio de Janeiro, is the superpower of Carnival (Carnaval in Portuguese). It demonstrates the Brazilian capacity for massive organization and almost unlimited possibilities.

Bad Brilliance Goes to Wall Street

See the video of Bad Brilliance on Wall Street:

http://www.youtube.com/watch?v=TgXvj37-xZU

Bad Brilliance visited Wall Street last week to show his support for fixing the financial system through adopting some form of "Bad Bank." He also publicized The Visionist blogsite and its proposal that the "toxic assets" be put under trust or receivership for a period of time during which their true asset value can be determined. The financial package announced by Treasury Secretary Tim Geithner was poorly received due to a lack of details. That is clearly because nobody at this time knows really what to do, so he laid out only broad ideas. The stock market reacted badly.

Debate continues with the possibility of nationalizing some or all banks in the banking system. However, very few people in this country are comfortable with nationalizing any part of the US economy, and the administration has not encouraged this line of thinking. However, all other options involve trying to evaluate the bad assets and that means creating winners and losers. The ONLY solution I believe is neither nationalization NOR purchasing the assets. Instead, what should be done is for the bad assets to be held in receivership or trust by a government "Bad Bank" with massive low interest credit made available to the banks (only "stress tested" banks). In this way, nobody loses at this time and only in 5 or 10 years will the banks have to take whatever losses or accept whatever gains will result in a restored economy.

Jobs, Jobs, Jobs! -- Words, Words, Words!

There is a strange argument going on about why the Republicans and even a couple of Democrats in Congress did not support the Stimulus Package: it is that the package did not focus on job creation and instead, in a better version, contained programs that should have been considered separately on their own merits, or in the most disgraceful version, claimed it to be "full of pork." Even one of the few Democratic Congressmen who voted against it claimed that the cost per job of the package was $250,000!

There seems to have been let loose in the land the notion that the only thing the package addressed was the creation of new jobs and in addition that it was not supposed to address other spending needs that would create missing demand in the economy. It was easy for the Republicans to criticise the plan on the jobs issue because in a sense the President set himself up on this one. This is unfortunately the sphere where politics and policy do not often mix well. Seeing unemployment as an indicator on which average Americans can easily be appealed to, it quickly was picked up on as the only criterion for the stimulus package. In any downturn, two indicators are usually looked at: unemployment and the reduction in GDP.

A recession is defined by the latter, not the former, but the former is usually more socially painful and therefore more politically sensitive. We do not know exactly how many jobs the $789 billion stimulus package will generate--between 2-4 million seems the range of speculation. However, what is forgotten in looking merely at job creation is the need to prevent further job loss. If we are losing over half a million jobs a month under current circumstances, the above figures would soon be overwhelmed if the lack of stimulus in the economy did not sustain the current levels of employment before any new jobs are created. I do not hear any one talking about this, but is seems so evident.

What the opponents of the stimulus package need to have understood, is that in addition to the jobs created and saved, the economy is in a downward spiral and needs a jump start to begin moving in the opposite direction. Only massive spending can do that, almost any kind of spending so long as the funds flowing from the government get spent by someone. So why not put these funds into useful programs that most reasonable folks can agree are needed as a way of creating this increase in demand? Yes, look out for pure pork--although believe it or not and Heaven Forbid, many so-called pork programs are really local projects that are very much needed in communties--and waste and inefficiency, but using a purely "job creation" criterion demonstrates that most of our legislators in this country could well use a course in Economics 101. Too bad John Kenneth Galbraith is no longer around to give some lessons.

Things Fall Apart

THE SECOND COMING

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: a waste of desert sand;
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Wind shadows of the indignant desert birds.
The darkness drops again but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

William Butler Yeats, 1919

We need to give serious consideration to the consequences of doing nothing or too little to confront the current economic and financial crisis. The Senate Foreign Affairs Committee just held hearings on the consequences of the Economic Crisis on international stability. The new Director of National Intelligence, shocked the Congress when he reported that the number one issue threatening our national security is the economy, making the current crisis the highest priority for intelligence collection. Daily, we hear of increasing signs of unravelling. Galloping unemployment and economic slowdown. Rioting in small island paradises like Madagascar and Guadeloupe. We seem to be at a tipping point between recession and some form of depression. Could economic slowdown lead to social and political chaos? What will happen in more "fragile states" than the United States, Canada, Europe, Japan and Australia? It is common knowledge that the Great Depression led to the rise of Fascism, Nazism and Japanese militarism and World War II. How do human beings react to shortages of food, fuel and energy.... and of hope? What are the lessons of the conditions that lead to extremism and terrorism? It is easy to believe that today's comfort and stability will continue on in some linear fashion. Had we not built the perfect economic and financial system, the wonder of the world? Yet, can you not already feel that something is slipping? World events do sometimes go off a cliff.

That is why it is totally irresponsible for politicians to play partisan political games with a solution to the economic and financial crisis. I do not think the American people will tolerate that for very long.


The Deacon's Masterpiece or The Wonderful "One-Hoss Shay": A Logical Story

Have you heard of the wonderful one-hoss shay,
That was built in such a logical way
It ran a hundred years to a day,
And then of a sudden it -- ah, but stay,
I'll tell you what happened without delay,
Scaring the parson into fits,Frightening people out of their wits,
--Have you ever heard of that, I say?
Seventeen hundred and fifty-five.
Georgius Secundus was then alive,
--Snuffy old drone from the German hive.
That was the year when Lisbon-town
Saw the earth open and gulp her down,
And Braddock's army was done so brown
,Left without a scalp to its crown.
It was on that terrible Earthquake-day
That the Deacon finished the one-hoss shay.
Now in building of shaises, I tell you what,
There is always a weakest spot,
--In hub, tire, felloe, in spring or thill,
In pannel or crossbar, or floor, or sill,
In screw, bolt, throughbrace, -- lurking still,
Find it somewhere you must and will,
--Above or below, or within or without,
--And that's the reason, beyond a doubt,
That a chaise breaks down, but doesn't wear out.
But the Deacon swore (as deacons do,
With an "I dew vum," or an "I tell yeou")
He would build one shay to beat the taown'n' the keounty 'n' all the kentry raoun';
It should be so built that it couldn' break daown:
"Fer," said the Deacon, "'t's mighty plain
Thut the weakes' place mus' stan' the strain;'n' the way t' fix it, uz
I maintain, is only jest'T' make that place uz strong uz the rest."
So the Deacon inquired of the village folk
Where he could find the strongest oak,
That couldn't be split nor bent nor broke,
--That was for spokes and floor and sills;
He sent for lancewood to make the thills;
The crossbars were ash, from the the straightest trees
The pannels of whitewood, that cuts like cheese,
But lasts like iron for things like these;
The hubs of logs from the "Settler's ellum,"
--Last of its timber, -- they couldn't sell 'em,
Never no axe had seen their chips,
And the wedges flew from between their lips,
Their blunt ends frizzled like celery-tips;
Step and prop-iron, bolt and screw,
Spring, tire, axle, and linchpin too,
Steel of the finest, bright and blue;
Throughbrace bison-skin, thick and wide;
Boot, top, dasher, from tough old hide
Found in the pit when the tanner died.
That was the way he "put her through,
""There!" said the Deacon, "naow she'll dew!"
Do! I tell you, I rather guess
She was a wonder, and nothing less!
Colts grew horses, beards turned gray,
Deacon and deaconess dropped away,
Children and grandchildren -- where were they?
But there stood the stout old one-hoss shay
As fresh as on Lisbon-earthquake-day!
EIGHTEEN HUNDRED; -- it came and found
The Deacon's masterpiece strong and sound.
Eighteen hindred increased by ten;
--"Hahnsum kerridge" they called it then.
Eighteen hundred and twenty came;
--Running as usual; much the same.
Thirty and forty at last arive,
And then come fifty and FIFTY-FIVE.
Little of of all we value here
Wakes on the morn of its hundredth year
Without both feeling and looking queer.I
n fact, there's nothing that keeps its youth,
So far as I know, but a tree and truth.
(This is a moral that runs at large;
Take it. -- You're welcome. -- No extra charge.)
FIRST OF NOVEMBER, -- the Earthquake-day,
--There are traces of age in the one-hoss shay,
A general flavor of mild decay
,But nothing local, as one may say.
There couldn't be, -- for the Deacon's ar
tHad made it so like in every part
That there wasn't a chance for one to start.
For the wheels were just as strong as the thillsA
nd the floor was just as strong as the sills,
And the panels just as strong as the floor,
And the whippletree neither less or more,
And the back-crossbar as strong as the fore,
And the spring and axle and hub encore.
And yet, as a whole, it is past a doubt
In another hour it will be worn out!
First of November, fifty-five!
This morning the parson takes a drive.
Now, small boys get out of the way!
Here comes the wonderful one-hoss shay,
Drawn by a rat-tailed, ewe-necked bay.
"Huddup!" said the parson. -- Off went they.
The parson was working his Sunday's text,
--Had got to fifthly, and stopped perplexed
At what the -- Moses -- was coming next.
All at once the horse stood still,
Close by the meet'n'-house on the hill.
First a shiver, and then a thrill,
Then something decidedly like a spill,
--And the parson was sitting upon a rock,
At half past nine by the meet'n'-house clock,
--Just the hour of the earthquake shock!
What do you think the parson found,
When he got up and stared around?
The poor old chaise in a heap or mound,
As if it had been to the mill and ground!
You see, of course, if you're not a dunce,
How it went to pieces all at once,
--All at once, and nothing first,
--Just as bubbles do when they burst.
End of the wonderful one-hoss shay.
Logic is logic. That's all I say.

Oliver Wendall Holmes (1809-1894)

What is a Visionist?

I recently came accross this definition of a visionist, which I thought captures the spirit of this blog:

A visionist is an artist, a creator or an individual that sees beyond what is visible to the eyes and brains of human beings. Visionists are thinkers, they are the recognizable brains of society, but most times they are seen as absurd, "nerds" or misfits-- they just don't fit into the societies. They are people with great dreams and minds.

http://fixedreference.org/en/20040424/wikipedia/Visionist

Globalization and Geopolitics

Photo: The Great White Fleet, Standing Out of Hampton Roads, Begins its Around the World Cruise under orders of President Theodore Roosevelt, December 1907.

I first studied geopolitics during my second year in college as part of my first International Relations (IR) course. The textbook we used, Foundations of International Politics, was written by two geographers, Harold and Margaret Stout, commonly known as “Stout and Stout.” As an IR major at UCLA (a major mysteriously eliminated a decade ago), this course was the centerpiece of my understanding of my discipline. The Stout and Stout book, which I still have and use 45 years later, is very much based on a geopolitical framework. In other words, it focuses on such factors as geography, climate, population, natural resources, science and technology and economics, with a limited treatment of things like the political system, public opinion and cultural factors. It really grew out of an earlier Sprout and Sprout book, Foundations of National Power, so its emphasis was on those factors in national power that impact on a nation’s relative strength in the in the international community. Foundations of International Politics borrowed heavily from 19th Century geopolitical thinkers, including R. Adm. Alfred Thayer Mahan, with his focus on sea power contained in his classic work The Influence of Sea Power Upon History, 1660-1783 (www.gutenberg.org/etext/13529) and other works and Sir Halford Mackinder, with a focus on land power. However, the Stout book did acknowledge that by the 1960s there was a revolution taking place in world politics and an acceleration of many factors, and in all fairness were critical of the anachronistic elements in both geopoliticians' works.

I came to consider the Stout book a somewhat old-fashioned approach to international relations. Newer texts focused more on the inter-relationships among nations and looking at the International System, not just made up of nation-states with differential power but having its own dynamic around which the prospects of war and peace were determined. Also, geopolitics had clearly been identified during WWII as an underlying element to both German (under the influence of Haushoffer and his concept of Lebesnraum) and Japanese international doctrines of supremacy. I later encountered “geopolitical thinking” as having inhabited some of the War Colleges of the Latin American militaries during the Cold War and serving their anti-democratic, authoritarian repressive policies. Unfortunately, this was encouraged by our own country’s relationship with many dictatorial regimes in the region.

In an age of globalization, however, we must return to some of the geopolitical interpretations of our past. As the movement of people, communications and trade has become exponentially faster than 50 years ago, we need to look at the implications of space and time factors on international relations. That term itself can be considered an anachronism. Globalization no means that world affairs no longer can focus only, or even primarily on the relationships among nation-states. Relations between both state and non-state actors as well as intergovernmental, non-governmental and other private groups, movements, corporations and organizations as well as individuals, all make up the soup in which we all are stewing.

Mahan and Teddy Roosevelt, who had been his student at the Naval War College, became friends, with the latter heavily influenced by Mahan's doctrines of naval supremacy and colonialism. Well, today, in an era of Globalization, Mahan is again alive and well. In a world whose politics is no longer dominated by state conflict but rather the threats coming from failed or failing states, many of them former colonies whose transition to nation-statehood has been stunted, it becomes increasingly necessary for the United States and other responsible national and multinational actors to be able to deliver both military and civil power and resources to failed states in need. The recent outbreak of piracy off the coast of Somalia is only one manifestation of the need for sea power in today's rough and tumble world. We rely quite a bit on air power, but air power is not an effective way of moving troops, machinery and supplies, particularly when massive buildups are required and naval firepower when control of the sea lines of communication (SLOCs) is required. Here, Mahan's concept of global "choke points" remains valid. As the Obama Administration looks ahead at military budgets, it will be interested in cutting the defense budget where big savings can be gotten, namely looking at air and sea power. In doing so, however, it should not deprive us of the ability to deploy military force anywhere in the world regardless of whether or not we have land bases nearby. The navy will continue to be a vital element in our defense and Sea Power will continue to have an influence on global affairs. If you wish to learn a lot more about the role of sea power in a Post-9/11 world, I refer you to a major study done by the National Defense University, Globalization and Maritime Power: (http://www.ndu.edu/inss/Books/Books_2002/Globalization_and_Maritime_Power_Dec_02/01_toc.htm

Nothing I have said here means in any way that Mahan has won over Mackinder. Quite the contrary. The importance of dominance over land masses in the 21st Century is as great as it ever was. Sea power is important in keeping SLOCs secure and as a means of providing "sea basing." (See Peter Pham on development of the Navy's "Global Fleet Station" initiative (http://worlddefensereview.com/pham091608.shtml)

However, the potential threats to national security in an era of Globalization come from land-based groups intent on using ungoverned areas as a base against the United States and its allies. While holding the seas, the United States must, working with an international coalition that ideally includes the United Nations must assure that the lands of the earth are under the control of some accountable government or international administration. Only a synthesis of Mahan's and Mackinder's theories can lead to an adequate solution to the conundrum of global security.

But the question is no longer sea power vs. land power or even air power. Today, international relations can only be conducted by the world's only Superpower using "all the elements of national power," what Secretary of State Hillary Clinton has called "Smart Power" and diplomat Dennis Ross has neatly labeled "statecraft." This means beefing up considerably the other civilian elements of national and multi-national power through a process called "national security reform." More on this soon.

The Blago Effect

It is inconceivable that when Barack Obama ran for the Presidency he could imagine that his very act of giving up his Senate seat to accept that honor would serve to undermine his Presidency. At first, the arrest of Illinois Governor Rod Blagojevich for attempting to sell Obama's Senate seat among other corrupt acts, seemed like a bit of comic relief after a long, hard election year. But the Blago effect is now poisoning the Obama Presidency, like some "toxic" substance. How else can one understand the succession of faltering Presidential nominations and the resistance by Republicans of the President's stimulus package and seeming willingness to go partisan at the very beginning of what should have been a honeymoon period during the new Administration's first 100 days and a more cooperative spirit which was the currency of both campaigns during the Presidential race.

Gov. Blagojevich stoked the fires of public disgust with high level corruption in politics and the abuse of political privilege. That is why ethical and tax problems for several nominees cost them their nominations. The first was Commerce Secretary nominee, Gov. Bill Richardson (D-NM). Then Treasury Secretary nominee Tim Geithner ran into a lot of heat for failure to pay some taxes while he worked for the IMF. The Senators held their noses and begrudgingly approved him because the President backed him up. But when another leading Obama supporter, former Senator Tom Dashle had his own tax lapses and ties to lobbyists were exposed, he ran into a buzz saw response, even from his former Senators and despite his reputation as a really nice guy. Another nominee for a less than cabinet position then dropped out due to a tax lapse of less that $1,000 on a housekeeper's social security taxes. What seemed to be happening is like the opposite political psychology of what governed the handling of the banks and insurance companies. The devastating effect on the market of the failure of the Treasury of Federal Reserve to save Lehmann Brothers, then led to a situation where the banks could not be denied a bailout. In this case, pushing the Geithner nomination through the Senate, led to a psychology where no other tax transgressor could be allowed through the door.

But public concern with abuse of public power was even more fueled by skepticism over the seeming failure of the TARP. Some $350 million in TARP funds to the banks did not serve to stimulate bank loans to the public. Instead, the banks decided to take the funds and hand out huge bonuses to executives. Then the Bernard Madoff scandal erupted, at $50 billion, the most enormous financial scandal in human history wiping out the investments and pension funds of thousands and thousands of investors both small and large.

So why did the Republicans decide to dig in in opposing the Stimulus Package and not offering one vote in favor in the House? Because they could. Public opinion, while desperately wanting a rescue package, were by now skeptical of the content and the honesty of the content. Was it just pork? Was it spending? Did it stimulate jobs in an economy that is hemorrhaging jobs? Republicans sensed that they might be on the side of public opinion. Now, with the announcement of the Obama Administration's new Financial Program, by the very Treasury Secretary whose tax problems were overlooked because he was the best person to handle the financial crisis, the reaction from Wall Street was immediately to sell stock. The plan, it turns out was too vague, too incomplete and too inconclusive, leaving major elements in doubt. In particular, a proposal for a Bad Bank to soak up the toxic assets was given a euphemistic name and it's mechanism of a public/private nature was left open ended. The essential issue of how the toxic assets could be valued was not resolved clearly by the plan. But it is a lack of trust, that goes back to the Blagojevich scandal and the growing lack of public confidence in public officials and government-business collusion to cheat the public that fed the easy criticism. It is also the daily bad economic news that opens the door to populist politics based on an assumption of irrational public opinion. One must be aware that it was exactly this cocktail of economic distress and populist politics that led to the growth of unsavory political ideologies, movements and regimes in Europe of the 1930s and which the US escaped only due to the statesmanship of FDR.

The President himself is still hugely popular. He is America's Golden Boy. But his administration is not doing as well. We hope that the difficulties and slip-ups of the administration's early days will not presage its future success.

Post-script: After the above was written, we have more fallout from the Blago effect: the announcement of Republican Judd Gregg (or is it Gregg Judd, I can't remember?) quizzically deciding to drop out of his nomination as Obama's Secretary of Commerce. Could it be that he wet his finger, put it in the wind and decided it was blowing in a different direction in terms of bipartisan government in America?

"Bad Bank" Celebration on Wall Street

Well, we decided to have some fun with Bad Brilliance and the Bad Banks and have Bad Brilliance do an event on Wall Street tomorrow, following Treasury Secretary Tim Geithner's presentation of the financial package today.

Here is the press release that went out today to encourage the media to cover the event:

A 'Bad Bank' is a Brilliant Idea
NORFOLK, Va., Feb. 10 /PRNewswire/ -- The following release is issued by Daniel A. Strasser, retired US diplomat and nonprofit manager.
"Bad Brilliance," is a lovable, quirky art character, with his yellow balloon head and red zoot suit. Bad Brilliance is going to make his debut on Wall Street tomorrow, to demonstrate in favor of the Obama Administration's new banking proposals announced today by Treasury Secretary Tim Geithner. Bad Brilliance will praise the inclusion in the program of a "Bad Bank." In fact, his sign says BAD BANK, BRILLIANT. Bad Brilliance knows that often Bad is Good, and he is proof of this. He is Bad and that's Good. The Bad Bank is a Good Bank.
Bad Brilliance will begin his Wall Street walk at the Statue of George Washington in front of Federal Hall, Wall Street, Manhattan, Wednesday, February 11 at 11:00 am.
Bad Brilliance's appearance is sponsored by the blog "The Visionist: Out of the Box Global Solutions:" http://www.the-visionist.blogspot.com/. The Visionist looks at current and emerging issues resulting from Globalization and offers simple solutions to problems like the financial crisis, Gaza, Afghanistan, Somalia, etc., explores approaches to global knowledge and promotes those essential "silver bullets" that can yield big results for humanity like empowering girls and promoting potable water for all human beings. It encourages a new US foreign policy based on promoting Global Good Governance.
The Visionist is Daniel A. Strasser, a retired US diplomat and nonprofit manager who currently serves as a political analyst for the US military. His diplomatic service ranged from being a civilian advisor in Vietnam, to the United Nations in New York and extensive overseas assignments in Latin America and the Caribbean. He was the Executive Director of the Eleanor Roosevelt Center at Val-Kill, in Hyde Park, New York (1996-2003). Bad Brilliance is Andrew Strasser, Mr. Strasser's creative son.
SOURCE The Visionist There have been many versions of this announcement picked up in the media. here are some that we discovered: http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/02-10-2009/0004969808&EDATE= ; http://www.marketwatch.com/news/story/bad-bank-brilliant-idea/story.aspx?guid=%7B7779EE3E-261F-4A11-BDA7-FBB9DE9CDF2C%7D&dist=msr_9http://newsblaze.com/story/2009021010130300002.pnw/topstory.html ; http://newsblaze.com/story/2009021010130300002.pnw/topstory.html ; http://www.earthtimes.org/articles/show/a-bad-bank-is-a-brilliant-idea,711601.shtml ; http://biz.yahoo.com/prnews/090210/ne69007.html?.v=1

Globalization on the Brain

Yeda and I just saw Slumdog Millionaire, and I was blown away by its portrayal of the difficult, brutal, Dickensian life of the poor in India, as well as the sustainment of pure values such as the triumph of love over its opposites and of good over evil. Its strong assertion of the idea of human destiny is a concept that I find extremely appealing, a subject I really want to get back to here. However, even more, to me it is a film that is a triumph of globalization in the best sense. Here is a British film about India with Indian actors and rich scenes, from Mombai to the Taj Mahal and the human mosaic of India. The impact on India of a US formatted version of So You Want to Be a Millionaire, with its own, Regis-style Indian host, also reminds us of a universal culture that is sweeping the globe. But the most important line in the film for me is when, Salim, the older, less well meaning brother surveys Mumbai's modern construction boom from atop a half completed skyscraper and declares: "India is at the center of the world, and I am at the center of the center."

What statement could better express the idea of the empowered individual which lies at the center of post-modern globalization.

I also happen to have attended a number of events this week which focus on the impact of globalization, including a special seminar in which I participate at Tidewater Community College. The seminar on Friday included a speaker from the State Department on Economic and Political aspects of Globalization, Ukrainian and a Sri Lankan Fulbright scholars cleverly brought in from around the country by the program managers to speak respectively on the impact and origins of the financial crisis and the economic impact of terrorism,, a presentation on the Port of Virginia, based here in Hampton Roads, the third most important port on the US East Coast and growing and a presentation by an expert on global water issues. My head was spinning after more than eight hours of information. All of these subjects are open to discussion, debate and controversy.

I also attended this morning a presentation at the World Affairs Council of Greater Hampton Roads on Egypt, part of the nation-wide Great Decisions program promoted by the Foreign Policy Association for World Affairs Councils. The impact on a key Middle Eastern country like Egypt of globalization is mind boggling. There is a mix of external and internal factors working on such a key country, which is weighed down by history and constraints, but which is on the edge of becoming an emerging country if things would only break in its favor.

I wish I could draw some universal conclusion from these intellectual experiences. It is difficult, but listening to the speech given today in Munich by Vice President Joe Biden, laying out a new framework for US foreign policy, it is clear to me that the Obama Administration "gets it" when it comes to the "new, new world order," of globalization, including rejecting the "Clash of Civilizations" as the basis for US foreign policy. opening up the way to a perhaps more hopeful future. What are the implications, of this, however, for the future? Is it the acceptance of co-existence of separate Western and Eastern Civilizations, or the promotion of a new world Civilization based on common values, like those contained in the Universal Declaration of Human Rights and international human rights law, or some hybrid of both? Or is what is really important not what we call things but how we as Americans approach others around the world?

A "Bad Bank" is Brilliant - With an OOTB Proposal

While the country's politicians and economists are debating the fiscal stimulus package, the idea of fixing the financial system has stayed on the back burner, but many people are scratching their heads and wondering whether or not we need to create a "bad bank" as a way of removing "toxic assets" from our banking system. There is something about that term that captures the imagination of people, a seeming oxymoron. How can a bad bank be any good? There is also something a little wicked in the term. like, "Oooh, that's bad!" In fact in current young generation usage, bad actually has come to mean good. My 26 year old son Andrew, even created a fictional personality in New York City by the name of "Bad Brilliance," a funny, zoot-suited, balloon headed creature, described in Time Out New York magazine as a "highly entertaining conceptual art oddity" whose motto is "One bad idea after another" (http://www.badbrilliance.com/).

So the idea of this posting is to advocate in favor of a Bad Bank. A Bad Bank is a Good Bank, and here is the reason. The real crux of the current economic crisis is largely financial. Banks are not lending money to those who need it and credit is the grease on the skids of the economy, the plumbing that makes the system function, whatever metaphor you choose. For the banks to start lending again they need to dump their toxic assets, that will free them to loan again. All economists agree. What they do not agree upon is how such a bad bank would work and they have problems with applying the idea. Mostly--and this includes Nobel-prize-winning economists like Paul Krugman--they do not see how a Bad Bank would be able to properly or equitably price bad assets. If the Bad Bank pays the face value or too high a price on these bad assets, then the American public will pay a big price. If they pay current market value, then the banks will take a big hit, because it is generally agreed that these assets are currently undervalued by the market.

OK so here is the OOTB solution to this dilemma. Remember the term "trusteeship"? Well we need to create a Bad Bank that does not buy the toxic assets but which agrees to hold them in trust. Sound familiar? The banks would be able also to loan enough money from the Fed at reasonable interest rates to recapitalize, so the public would be paid back. The Bad Bank would hold the bad assets for a total of 5 years (or more if necessary) doing everything possible to manage them into health. At the end of the 5 years, they would be sold and any profit from them would be split with the banks 50/50. Any losses would be absorbed by the banks, which would be at a considerably reduced loss than if they had to give them up now. The public would not take any losses. This overcomes all objections to such a proposal. Even if done by outright purchase, the possible cost to the public has been estimated to be about $500 billion, considerably less than the stimulus package being debated. But a $0 loss potential would go down even better with the American public, whose patience has been worn thin by the failure of the TARP program to deliver on its promises of unfreezing credit. The TARP, remember, is a Bush Administration failure. The BB can be an Obama Administration success.

P.S. I am not an economist. If anybody has a better idea, please let me know.