Thursday, January 29, 2009

Showdown at Davos

Where to start?

The World Economic Forum summit of global leaders held this week at Davos, Switzerland, has been the economic equivalent of the shootout at the OK Corral.

(Putin speaks out at Davos' opening; Source: RT; Time: 31:20)
  • 28 January: Vladimir Putin began the gunslinging by delivering a keynote speech indirectly accusing the U.S. and China of steering the world into economic gridlock, and also took a backhanded swipe at the ineffectiveness of the international community containing international crises, and even directly contributing to them: “Frankly speaking, we all know that provoking military and political instability, regional and other conflicts is a helpful means of distracting the public from growing social and economic problems. Such attempts cannot be ruled out, unfortunately.” Carefully parsed, it ignored Russia’s own complicity in many global crises and instead proposed Russia as the solution the world is waiting for. Aside from the inherent propagandistic nature of a national leader speaking before assembled dignatories, his half-hour long speech was filled with many sound fundamental arguments: a depreciation or write-off of bad debts, a return to fundamental economic bases, and a recognition of global economic interdependence: “We should not despair. This crisis can and must be fought, also by pooling our intellectual, moral and material resources.” After his prepared speech, he also turned down a question of assistance from U.S. technology leader Michael Dell. Thus, much of his rhetoric could be described as a sort of political “slap and tickle.” Stingingly rebuking, yet enticing of the possibilities.

  • 29 January: In comparison, Putin’s keynote was placid and friendly compared to the heated exchange between Turkish PM Recep Tayyip Erdogan and Israeli President Shimon Perez: Talking about Gaza, Erdogan excoriated a defensive and vocal Perez, accusing the Israeli leader by saying, “You kill people,” and walked off stage. Perez had spent 25 minutes defending Israel’s position, while Erdogan had only gotten 12 minutes in response. He left with an ominous rebuke of the moderators and organizers, “I will not come to Davos again.” Though afterwards, he took time to note that he has maintained a position that anti-Semetism is a crime against humanity, he was supported in his abandonment of the discussion by Arab League Secretary Amr Moussa, who said of the Israeli leadership, “They don’t listen.” Erdogan’s wife went further, saying “All Peres said was a lie. It was unacceptable.”

  • 29 January 2009: Chinese Premier Wen Jiabao then verbally opened fire on the U.S. for leading the world down the primrose path into global recession. Not expressly naming his target, he spoke of “excessive expansion of institutions in blind pursuit of profit.” Besides the arresting headline quotes, the full text of his speech is revealing. Of course, China remained blameless in the international march of folly, even as it continues to use eminent domain to seize small farms and village houses to pave the way for giant state-run businesses, industrial plants and hydropower projects, often with little or no compensation. This was referred to obliquely by speaking of China’s plan to “push ahead comprehensive industrial restructuring and upgrading.” He neatly bypassed the issue of China fueling the financing crisis by being the primary beneficiary from buying up U.S. investments and securities, profiting greatly, and then dumping them, such as their withdrawal from Fannie Mae and Freddie Mac in 2008. The road to recovery included a stimulus package for China focused on helping for the rural and poor, investing in infrastructure and specifically mentioning earthquake protection. How much of this was said to reassure the global financial community, and how much was left to address the increasingly unhappy domestic audience of China remains an exercise for the audience. The other statement which could be taken as a staggering exaggeration of fact was this: “Steady and fast growth of China's economy is in itself an important contribution to global financial stability and world economic growth.” For it has been the rapid growth of China’s economy which has in many ways fueled food, resource, ecological and energy crises, and caused instability around the world. To alter the old axiom, “What is good for GM is good for America,” Wen Jiabao tried to argue in effect, “What is good for China is good for the world.” Maybe not so much. Lastly, his speech may have been more to paint a desired vision than an actual condition when he said, “There is harmony and stability in our society.” Again, maybe not so much.
This is not to utterly refute many of the good points each of the world leaders made in their various speeches, interviews and forums. There is a need to find harmony in the world. There is a need to create a more fundamentally sound economic equilibrium based in interdependence. Yet it seemed to many that something was lacking. Not least of which was the present U.S. President or a key representative of his new administration.

It behooves each world leader to admit their own nation’s contribution to the problem. Each can say many domestically-pleasing, often-too-safe and sage-sounding points, plinking their neighbors and rivals with rhetorical spitwads, and leave aside much of the trash in their own backyards. The harder work is in mapping a way past such parochialism.

It is all-too-easy to blame the West. Indeed, the U.S. is definitely culpable for much of the mess occurring in the world today. The EU as well. However, each nationstate on the planet is in its own way a contributor to and participant in the present crisis. In other ways, each is a necessary partner for the solutions.

What none of the global leaders seemed to be able to do was to offer a mea culpa, and accept responsibility for their part in the creation of the problem. The Chinese Premier described China specifically as a “responsible nation,” yet he meant that as a way to praise his regime’s leadership, not as an acceptance of its role in causing the present harm.

Of all the leaders, and even for all of his self-congratulatory praise of Russia, Vladimir Putin must be credited for being focused most on the future and the collective dialogue, rather than the insular defense of the status quo, celebration of past successes, or place in the present status.

The real question is which of the various world leaders in office today will step up to the role of key moderators of the global crisis. To gain the trust of others, they must be willing and capable of self-criticism, engendering in their peers the careful balance of spirit in admittance of fault, acceptance of error, while not lowering sights from an end-state goal.

Emergent powerhouse Brazil surely was not interested in such a role, with President Lula instead attending an “anti-capitalist jamboree.” The United States was pretty much sitting on the sidelines too, citing the transition of the new administration. The highest-level administration representative sent to the conference was Senior White House aide Valerie Jarrett.

The most upbeat of speakers featured in the headlines this week from Davos was former U.S. President Bill Clinton, who said:
“This financial crisis proves, as nothing else should or could, the fundamental fact that global interdependence is more important than anything else in the world today… We cannot escape each other. Divorce is not an option.

“This is not a time for denial or delay. Do something. Give people confidence by showing confidence… Don't give up. Don't bet against yourself. Don't bet against your country. This is still a good time to be alive.”

We can hope that, in due time, other presently-serving international leaders will echo similar sentiments, backed with cooperative international policies and plans providing a roadmap to the achievement of a new sustainable system of global economics.

Wednesday, January 28, 2009

Johanna Sigurdardottir: Iceland's Leadership Changes

Iceland to appoint gay woman minister to PM post

REYKJAVIK, Iceland (Associated Press) – The woman expected to become Iceland's interim prime minister is an openly gay former flight attendant who rose through the political ranks to lead a new leftist government.

Johanna Sigurdardottir, the island nation's 66-year-old social affairs minister, began as an union organizer for flight attendants and is now among the country's longest-serving lawmakers.

Both political parties forming Iceland's new coalition government support her appointment — and a decision could be announced as early as Thursday.

"She is a senior parliamentarian, she is respected and loved by all of Iceland," said Environment Minister Thorunn Sveinbjarnardottir.

In the wake of its severe economic crisis, Iceland has selected a liberal, openly-lesbian woman to lead them through the coming days. Johanna Sigurdardottir’s position is precarious, as the government coalition that backs her could collapse, and she could be voted out of office in the upcoming May elections. Yet for history’s sake, for however long or brief her stay in office, she will be hereafter remembered as the first openly lesbian Prime Minister of the modern world.

Iceland is certainly not out of options in terms of other candidates for leadership. Yet her style seems to be what the day is calling for. Johanna (Icelandic custom prefers to use people’s first names) is viewed as someone more interested in the common benefit, a position now seen as vital given rising widespread unemployment. In the wake of public disappointment at how conservatives have led the nation in the run-up to the collapse and thereafter, she is regarded as trustworthy by the Icelandic citizenry.

The fact that she is a woman is not news, considering Iceland elected their first woman President, Vigdís Finnbogadóttir, in 1980. The issue of her sexual orientation is not news either, since Johanna Sigurdardottir had her civil union in 2002. What is news is that her approval rating, recently measured at 73%, has not been affected by the withering shock of disappointment other politicians have suffered. She remains untainted by the upheaval. So far.

Trial of the Island of Fire and Ice

Trials await her, and such opinions may shift rapidly. Iceland’s economy is predicted to shrink up to 9.6% in 2009, and similarly again in 2010, according to a report in Forbes. On top of recessionary effects, inflation will kick in, at a rate up to 13.1%.

An IMF loan for $2.1 billion, and total loans of $10 billion including pledges from other nations, make a heavy price tag Iceland’s for economic crisis management. This is compared to a national GDP of $12.144 billion in 2007. Added to Iceland’s existing public debt of $10.94 billion (as of 2007), their total debt will likely soar to $22 billion or more, depending on tax revenue shortfalls for 2008-2009.

This $22 billion sounds like a managable figure, until you put that burden on the population of Iceland, which, as of 1 December 2008, stood at 319,756. That equates to an estimated per capita debt of $68,800.

Iceland - GDP - per capita (PPP) (US$)
Iceland GDP per capita 2000-2008: It was a good run while it lasted.

While Iceland made a remarkable run since 2000 on their GDP per capita growth, that trend has been suddenly brought up short. If their GDP shrinks at nearly 10% per year for the next two years, bringing their national economy back to around $10 billion per year, GDP per capita will likely resettle at somewhere around $33,000, or about 2005-2006 rates.

Iceland’s debt exceeding their annual GDP is not the first time such a situation has occurred, but considering it went far beyond that economic red line, and is going to nearly double the GDP — which is shrinking rapidly — it is a troubling trend. This small island nation, with a population smaller than that of Cincinnati, Ohio, stands as a telling bellweather for other nations saddled by massive public debt which are also shocked by national economic downturn.

Comparison to the U.S.

The United States, by comparison, has seen GDP rise from $9.8 trillion in 2000, to $13.8 trillion in 2007; a rough increase of 40%. In 2008, the U.S. saw one of the worst economic growth rates in the world, 177th out of 181, estimated by the IMF at 0.52%. Only the stagnant Iceland and Italy, the slipping sultanate of Brunei, and the utterly imploding Zimbabwe underperformed the U.S. economy.

U.S. public debt over this century rose from $5.6 trillion in September 2000 to $10 trillion in September 2008; an increase of 79%. Note that these raw figures are not indexed against inflation.

Given U.S. government debt is guaranteed to rise to at least $12 billion given the loss of revenues in the economic downturn, on top of the cost of the TARP plus other bailouts and stimulus packages in 2008-2009 amounting to well over $1 trillion, the U.S. may see its own debt-to-GDP ratio rise to over 1:1 at some point in the Obama administration. If so, it will not be due to the current President, but the momentum of macroeconomics.

It is not likely the U.S. would see its economy implode in 2009-2010 as swiftly or as precipitously as Iceland’s. Yet if it did, the sort of economic bailout needed would be somewhere in the rough size of U.S. GDP, on an order of magnitude somewhere larger than $10 trillion. That would be roughly one sixth of the entire world economy of $65 trillion. An unmanageable and unrealistic expectation by any accounts. It just would not happen.

What would be likely instead would be a shakeout and resettling of the U.S. economy back towards a lower basis. Possibly down to a GDP of less than $10 trillion, as it had been before 2001: a shrinking of roughly 30% or more.

That economic basis would be spread amonst the 2009 U.S. population of 305.7 million (estimated as of today by the U.S. Census Bureau), compared to the 2000 U.S. population of 281.4 million. In other words, we’d have to share the same amount of money amongst 8.64% more of us. Take one dollar in twelve, and pass it on to pool support for the new children born since then, and the new immigrants arrived here in recent years. In comparison, Iceland’s population grew about 6.6% since 2000; a 1:15 growth.

Decoupling National Economy from What’s-in-it-for-Me?

One of the requirements for recovery from any national economic shock is decoupling the desire for a stable collective economic basis from the desire for personal profit. Profits are not as necessary during an economic downturn as simply meeting survival income. Immediate needs of food, water, energy, shelter, and health become far more important than long-term savings and investing. One trend under such conditions becomes the insular conservative approach, harboring resources. Yet that can lead to even more severe shortages and setbacks for the overall economy. Instead, most societies require a focus on the collective good during such crisis to enable the vast majority to weather their tribulations as a whole, rather than individuals.

This decoupling and refocus on collective commonwealth, rather than individual wealth, seems to be the choice Iceland has made in Johanna Sigurdardottir. In a way, it also seems to reflect the “Yes We Can” attitude expressed in the Obama Presidential campaign.

Fate awaits to see how both nations weather the coming year, with most eyes on the United States of America. Yet keep your eye on Iceland. It may present a few lessons, both socially ideal and bitterly painful, for larger economies to learn from.

Thursday, January 22, 2009

Closure of Guantanamo & the "Field Manual for Government Interrogations"

On 22 January 2009, President Barack Obama signed an executive order closing the prison at Guantanamo Bay, Cuba, and directed all U.S. employees to follow the Army Field Manual (FM) that delineates clear rules on interrogating suspects. USA Today published the complete text of the executive order.

Both issues are not without problems in order to put into effect. “GTMO,” or “Gitmo” as Guantanamo Bay is referred to, will not just let all of the detainees free on the street. Joint Task Force Guantanamo (JTF-GTMO) has 245 people detained. What should be done with them?

Of the remaining 245, some can be tried by military courts of justice, if a case can be made against them. Others will be released—yet to which country? has been tracking the disposition of individual detainees so far, based on DoD announcements. They have been transferred to various countries around the world, from the U.K. to Somaliland to Afghanistan.

The Christian Science Monitor explores more of that issue in a recent article: “There is no magic bullet,” according to Mark Denbeaux, law professor at Seton Hall University. Who can be prosecuted? Who may have evidence tainted by torture?

Case by case, they will need to be cleared. And if any of them turn out to conduct attacks against the U.S., there will be a media storm of backlash to pay. Seton Hall Law has a very contemporary analysis of the recidivism rate — what the U.S. government reported as “having returned to the fight.” Figures are current as of 15 January 2009. The number of recidivist detainees reported ranges from a low of five to a high of thirty.

Considering that Guantanamo Bay had over 680 prisoners at its peak, and that is a low figure. For in a study of 15 U.S. states, there was an overall recidivism rate of 67.5% in a 2002 study of prisoner data from the period 1994-1997.

Telling comparisons for recidivism exist for certain types of crime. According to the Bureau of Justice Statistics:
  • Released prisoners with the highest rearrest rates were robbers (70.2%), burglars (74.0%), larcenists (74.6%), motor vehicle thieves (78.8%), those in prison for possessing or selling stolen property (77.4%), and those in prison for possessing, using, or selling illegal weapons (70.2%).
  • Within 3 years, 2.5% of released rapists were arrested for another rape, and 1.2% of those who had served time for homicide were arrested for homicide.
Given there have been a total of 779 detainees at Guantanamo Bay, of which 525 were released, having 5 or 7 of them return to terrorist or insurgent activities constitutes a recidivism rate of between 0.95% to 1.33%, depending on definitions, as Seton Hall condends, or as high as 5.7% if the DoD figure of 30 is used.

In terms of overall criminal justice statistical analysis, this rate of recidivism is in line with, or a bit ahead of other serious criminal activities such as murder and rape. Reporting may be low, because those who were released to lands uncontrolled by the United States may have conducted activities for which they were not caught or suspected of. It is not a pandemic of terrorism as many would purport. There has yet to be a Willie Horton of Guantanamo. The backlash of closing the facility could erupt if one emerges.

In comparison, four detainees committed suicide while in custody, and another 29 detainees attempted suicide between 2002-2006.

The process of setting forth a proper sense of justice for detainees has been years in the making. Today’s action by President Obama is merely the latest in a series of rebukes of Bush administration policies that go back to the June 2006 Supreme Court ruling that the military tribunals conducted at Guantanamo were illegal.

This is not the final page in the history of Gitmo, yet it may be the end of a most ignominious chapter.

Field Manual for Lawful Interrogations

Army Field Manuage 2 22.3, or FM 2-22.3, Human Intelligence Collector Operations, was issued on 6 September 2006. It is referred to specifically in the executive order:
“Effective immediately, an individual in the custody or under the effective control of an officer, employee, or other agent of the United States Government, or detained within a facility owned, operated, or controlled by a department or agency of the United States, in any armed conflict, shall not be subjected to any interrogation technique or approach, or any treatment related to interrogation, that is not authorized by and listed in Army Field Manual 2 22.3 (Manual).”
This applies U.S. Army procedure to all branches of government, and all departments and agencies, both civilian and defense. It covers the CIA and the FBI, as well as the DoD.

Furthermore the order was a stinging rebuke of the Bush administration policy allowing individual and departments freedom to make their own interpretations of written law:
“From this day forward, unless the Attorney General with appropriate consultation provides further guidance, officers, employees, and other agents of the United States Government may, in conducting interrogations, act in reliance upon Army Field Manual 2 22.3, but may not, in conducting interrogations, rely upon any interpretation of the law governing interrogation — including interpretations of Federal criminal laws, the Convention Against Torture, Common Article 3, Army Field Manual 2 22.3, and its predecessor document, Army Field Manual 34 52 issued by the Department of Justice between September 11, 2001, and January 20, 2009.”
In other words, “Whatever the Bush administration told you was okay to do, was not okay to do.” Section after section cites the rule of U.S. and international law, and the common interpretations thereof. In all of it, it strongly infers the United States cannot be an exception to these rules.

Shape of Things to Come

The executive order covered not just Gitmo, but also all CIA-run detention facilities, as per its Section 4(a). In Section 4(b) it also orders the International Committee of the Red Cross (ICRC) access to all detained individuals. We may find out more about other extrajudicial activities in the days ahead.

It also established a Special Interagency Task Force on Interrogation and Transfer Policies, whose members will consist of these members of government, or their designees:
This is the team that will shape the future of U.S. policy towards detainment and management of persons who have been arrested or incarcerated for being alleged or proven as “enemies, foreign or domestic.”

Curiously, as an observation of web content management and the bureacracy of the transition process, of all the web sites of the government agencies listed above, there is no mention of Leon Panetta yet at CIA other than in a Director’s Statement dated 9 January 2009. At DHS, the page for Michael Chertoff, former Secretary of Homeland Security, has been deleted, with prejudice (it leads to a broken link). One would hope that they’d have kept his page, yet modified it to refer to him in the past tense as a former leader of DHS.

Let’s observe how our leaders get these details fixed and squared away in due time, as they begin the major work ahead of them.

Turkey's Inner Turmoil

More arrests in Turkey coup probe
Turkish police outside the Ankara office of the private ART television station on 22/1/09
The private ART television station was also being searched, the AFP reports

Up to 30 people have been arrested across Turkey in connection with an ongoing investigation into an alleged plot to topple the government.

Those detained include a union leader as well as a number of army officers and special force police officers.

Eighty-six people have been on trial since October, accused of an ultra-nationalist plot to stoke unrest and provoke the army to launch a coup.

Critics say the ruling AK party is simply arresting its secular opponents.

Around 30 people were detained in a separate wave of arrests earlier this month. [Read More]

Is it a coup plot, led by members of an elite police counterterrorism unit? Or is it an Islamic government repression of the opposition Turk Metal trade union? Was this special operations unit responsible for brutal murder of Kurds, or was it legitimately protecting Turkish law? Was it responsible for the false flag attacks on the Turkish court and newspaper, or is this a setup?

Turkey’s arrests today read like a fictional thriller. Yet this is quite a real crisis.

The weight of evidence, were it printed out, seems rather solid. There are 2,455 pages to the report. Which means that even legal scholars and human rights experts will need weeks or months to pore through the evidence presented in the indictment alone.

It is also possible that there is a general sweep occurring. A rounding up of the usual suspects, a la Casablanca. Opponents of the government contend that the state is rounding up people on the pretense of fighting corruption and crime. Others believe this is just serious business, and just the tip of the iceberg. If they try to round up too many suspects, there may be a backlash from the politically powerful armed forces. According to Ümit Kardaş, a retired military judge, speaking about the Ergenekon investigations in Today’s Zaman on 9 January 2009:
“I do not believe that Ergenekon marks the start of a general cleanup operation within the TSK (Turkish Armed Forces) because the TSK will resist such a move. It is not that easy to change the TSK. But behind the Ergenekon operations may be a consensus with the US to bring the TSK in line with NATO standards, under which interventions into politics through military coups are unacceptable,” Kardaş said.
Turkey, a nation of 74 million persons, has a patchy story around freedoms. According to Freedom House, it has a Political Rights score of 3, and Civil Liberties score of 3 (out of a scale of 1 = best, 8 = worst).

The Armenian community of roughly 75,000 persons, and some of the other 70,000 other Christians in Turkey might contend, due to Article 301, the 2007 assassination of Hrant Dink, and assassinations of Christian priests and community leaders in recent years, that a rating of 3 across the board may be on the high side. Likewise, the Kurdish minority of 12 million, though it now has a state-run Kurdish-language television station, has its own reasons to be leery of ultranationalist Turks.

Turkey is facing choices as to what sort of nation it wishes to be for the 21st Century. Kardas lays forth the issues surrounding Turkish repression and justice in an article from 14 January 2009 in Today’s Zaman:
“The Ergenekon process must have the foresight to expose the mentality of those who lust after power and who do not regard there being an ethical problem with transitions of power which are based on violence and deception, but it must do this by staying within the limits of law and ethics.”
— Ümit Kardas
It is quite possible Turkey is slowly building towards another coup d’état. After the left-wing coup of 1960, the right-wing coup of 1971, the Kemalist coup of 1980, and the bloodless “postmodern coup” of 1997, a modern decade seemingly cannot go by without the Turkish military forcing the handover of civilian control.

The question seems not to be whether the military will take a hand in the de facto alteration of the civilian government of Turkey, and in the repression of the state’s minorities and opponents, and more as to how heavy-handed their tactics will be.

Wednesday, January 21, 2009

Gaza Withdrawal: Revised Casualty Figure: 1,284 Dead, 4,336 Wounded?

Israeli troops complete pullout from Gaza Strip

JERUSALEM (Associated Press) – Israel's last troops left the Gaza Strip on Wednesday, although the cease-fire was frayed when its navy opened fire toward beaches in northern Gaza, and smugglers' tunnels that were targeted in the 23-day campaign against Hamas were active again at the Egyptian border. [Read More]
The patterns which had fueled the most recent conflict are beginning again, in many ways returning back to status quo ante. The porous Egyptian border is being used to create a black and grey market for goods.

Returning life to the way things were before a war is generally considered good, when it is a resumption of normal, peaceful civilian life. If it is the resumptions of clandestine arms shipments and other illicit trading, then there will be little accomplished by the offensive to have curbed the systemic hostilities.

The Israeli government has conceded to open an investigation into allegations that white phosphorus (WP) was used against civilian populations. This may have impacts upon the United States’ own behavior, considering the controversy surrounding the use of white phosphorus by U.S. forces in Fallujah in 2005. Amnesty International’s Briefing on Applicable Law on Gaza clarifies the argument in terms of standards of international law.
First war tally: 1,284 Gazans dead, 4,336 wounded

KHAN YOUNIS (Associated Press), Gaza Strip – Squatting in the rubble, his briefcase perched atop his knees, the human rights researcher interviewed residents of a house shelled by Israel as he compiled a list of Gazans killed and wounded during Israel's offensive against Hamas.

Yasser Abdel Ghafar's work is part of a painstaking endeavor by the Palestinian Center for Human Rights to count the casualties of the 23-day war. The group released a final tally Wednesday, saying 1,284 Gazans were killed and 4,336 wounded, the vast majority civilians. [Read More]

The good news, such as it is, contends that according to these revised casualty figures, less people are dead and wounded than first reported. These revised figures from the Palestinian Center for Human Rights bring down the initial reports of 1,324 dead and 5,400 wounded. However, that latter figure is still the one cited by the Health Ministry. The difference comes from what constitutes a “casualty.” The ministry counted psychological trauma as well as physical injury, where the rights center did not. The rights group also contends the Health Ministry double-counted certain casualties.

Israel, for its part, disputes both figures, stating both reports severely undercount the number of combatants. It will take time to sort the truth from the propaganda. Yet for now, children are still having pieces of white phosphorus picked out of their wounds, detected only when smoke started pouring out from under their bandages.

Tuesday, January 20, 2009

U.S. Pricetag of Freedom

$10.5 trillion debt under Bush/Cheney (up from $5 trillion under Clinton/Gore) was not caused by Barack Obama, but it will be his responsibility to fix.

This is the legacy of U.S. administrations for the past few decades. Figures for national debt are approximate.
  • Reagan/Bush: $100 Billion to $1 Trillion = +$0.9 Trillion, +900%/8 years, +33.3% compounded annually
  • Bush/Quayle: $1 Trillion to $4 Trillion = +$3 Trillion, +300%/4 years, +42.4% compounded annually
  • Clinton/Gore: $4 Trilion to $5 Trillion = +$1 Trillion, +25%/8 years, +2.83% compounded annually
  • Bush/Cheney: $5 Trillion to $10.5 Trillion = +$5.5 Trillion, +110%/8 years, +9.06% compounded annually
The absolute dollar increase is staggering, administration-over-administration. Already, the Obama administration will be locked into a rise of the national debt to at least $12 trillion by Federal FY 2010.

We’ll have to see what the new President and recently-elected Congress can do to reign in the cancerous growth of public debt.

Monday, January 19, 2009

Gaza Conflict Ceasefire: After 22 Days, 1,300 Dead, 5,400 Wounded

(CNN) -- More than 1,300 Palestinians died and about 5,400 others were wounded during Israel's three-week offensive in Gaza, the Web site of the Palestinian Authority's Central Bureau of Statistics said Monday.

Louay Shabana, head of the agency, said more than 22,000 buildings were damaged or destroyed. Shabana put the economic destruction at more than $1.9 billion.

A Palestinian man Monday prays in the rubble of his home,  destroyed during Israel's offensive in Gaza.

A Palestinian man Monday prays in the rubble of his home, destroyed during Israel's offensive in Gaza.

While in the United States, citizens are preparing to usher in the 44th President with a gala inauguration, in Gaza, the rubble is just beginning to be sifted. More bodies will appear beneath the broken buildings.

Of the dead, 159, or 12.2%, were children.

The assessment of the damage at $1.9 billion is up from a $1.4 billion assessment on January 14, the 19th day of fighting. That is a 35.7% increase in assessed damage in the final days of the war. This could either represent a far greater amount of damage done in the last days of the war, or, more likely, a more complete survey of the damage inflicted which could only be accomplished once people had more of a chance to walk around in safety to inspect all of the buildings and infrastructure.

The estimated $1.9 billion in damage suffered in 22 days accounts for 38% of the Gaza Strip’s GDP. Presuming, of course, that its GDP for 2009 does not collapse given the international banking crisis, the 85% decline in the economy during the conduct of the war, and the consequent sufferance of the economy thereafter given the physical devastation.

The one-upsmanship and tit-for-tat in the propaganda machine continues. Both sides refused to agree to a cease fire with each other. Yet both independently and unilaterally declared a cease fire. Predictably, both sides are now claiming victory. Yet it is difficult for the ordinary Palestinian to consider their ruins and dead as “victorious” in any sense but Pyrrhic.

Consider supporting an aid agency of your choice committed to the Gaza crisis, such as the International Rescue Committee (IRC) or Save the Children.

Saturday, January 17, 2009

Lord’s Resistance Army (LRA): 620 Dead, 400 Abducted, 100,000 Refugees

Readers Caution: The following report contains graphic descriptions of brutality and violence.

While Gaza maintains the top headlines, deep in the bowels of Africa the Lord’s Resistance Army (LRA) has spread its brand of violence across four nations. Uganda, Sudan, the Democratic Republic of Congo (DR Congo), and the Central African Republic (CAR) have all reported violent attacks and increasing incursions.

Since an offensive started during the Christmas Massacres of 2008, 620 are dead, 400 were abducted, and 100,000 refugees have fled their homes. The death toll is difficult to establish. The figure of 620 comes from a report released today by Human Rights Watch. It covers the period from 24 December 2008 to 13 January 2009. Other organizations have cited 400 or 500. The latter figure was used by the United Nations Security Council (UNSC) condemnation of the events occurring. Yet one this is certain: the number is rising.

Yet the UNSC has little direct sway over events. The Lord’s Resistance Army is not a member of the United Nations. Thus sanctions and threats hold little influence over their actions. The facts on the ground show who has power. And the LRA is not withholding any of its power, which it has unleashed upon innocent people region-wide.

Disfigurement, dismemberment, looting, raping, sexual slavery, kidnapping, and the burning of schools, churchs, even whole villages make it sound like this was a modern day advent of the Vikings. Some science fiction dystopia. But this is not a historical textbook or a Hollywood movie. This is true, raw human brutality. Bats and axes used to cause the mass-murders have been found left behind at the scenes of carnage.
“Hundreds of people have been slaughtered and this just goes on,” said Joel Bisubu of Justice Plus. “We need food and medical supplies for the injured, but even more, we need protection.”
Justice Plus is a Congolese NGO. Joel Bisubu is quite familiar with the carnage of Sub-Saharan Africa, having reported on it for years.
“People are forced to choose between peace and justice. But you can't have peace without justice. The people who are dead are dead. But if you try to compromise peace for justice, that doesn't help.”
— Joel Bisubu, regarding the Congolese civil war, 2006
Human Rights Watch, though, backdates the latest outbreak of violence to a combined offensive begun by Uganda, with the support of Sudan, Central African Republic and the Democratic Republic of Congo:
“The LRA attacks followed the beginning of a joint military operation on December 14, led by the Ugandan army with support from the Congolese, Southern Sudanese, and Central African Republic armies. The Ugandan army attacked the LRA headquarters in Congo's Garamba National Park, near the border with Sudan.

Following the attack, the LRA dispersed into several groups, each of which targeted civilians along its path. The rebels waited until December 24 for the most devastating of their attacks, waiting until people had come together for Christmas festivities, then surrounding and killing them by crushing their skulls with axes, machetes, and large wooden bats. Most of the few who survived also had head wounds, but two 3-year-old girls had serious neck injuries, suffered when LRA combatants tried to twist off their heads.

In the village of Batande, three miles from Doruma, near the Sudanese border, the LRA killed at least 80 people on December 25 when village residents had gathered for Christmas lunch after the morning church service. LRA members surrounded the people, tied them up with rope or rubber strips from bicycle tires, and then separated the men and boys from the women and girls. They took the men and boys about 40 meters from the church and killed them immediately with blows to the head. They took the women and girls into the forest in small groups and raped many of them before crushing their skulls.”

It is obvious that “Operation Lighting Thunder” the military offensive designed to purge the region or force the LRA to sign a peace deal, only stirred the hornet’s nest. After the 14 December campaign opened against them, all pretense of ethical behavior and all the laws of war were thrown out the window. Any Christian beliefs once espoused by the Lord’s Resistance Army were buried alongside the bloody bodies and burned up in the flames of torched houses of worship.

Episcopal Reaction in Sudan

The death of a Christian lay reader, Wilson, who tried to rescue two young boys abducted in the Episcopal Diocese of Mundri, has spurred a call to action. Matthew Davies of Episcopal Life covers the story in full detail, including more history regarding the conflict. His article describes how Wilson and another young man learned that the LRA had kidnapped two children, and set off in pursuit. When they caught up to the LRA, they were brutally killed. Yet in a way, Wilson’s efforts succeeded. The boys, though horribly traumatized by the event, were left alive alongside the road by the departing soldiers.

Others have not been so lucky. A reverend’s daughter abducted along with 11 others from a village. Entire villages of elderly people, women and children being forced to flee dozens of miles head of the fighting. The dead and the wounded.

Alexander Baumgarten, international policy analyst for the Episcopal Church's Office of Government Relations, has called for U.S. Episcopalians and others to focus their support on two particular partner organizations: Resolve Uganda and Enough! Project. While the news is very grim, the summation of optimism can still be found in the words of Janet O’Neill, of Episcopal Relief and Development:

"We need to act to shine whatever light can be brought into this dark, dark situation. We must pray for peace, advocate for peace, demand that politicians in the region pursue a settlement with the LRA. We must mobilize resources to ensure that the lack of food and shelter can be met and the basic humanitarian needs are provided."

The key question is whether a settlement can be achieved with people who commit such atrocities with impunity. While it would be heartening to see true Christ-like conversions to a life of peace and goodwill from an existance of rapine and murder, many of the soldiers of the Lord’s Resistance Army are not likely to give up the lifestyles they have become accustomed to. It is time work towards such miracles for the people of Africa.

Gaza Day 22: 1,203 Palestinians Dead, 5,300 Wounded; Israel Plans Unilateral Ceasefire

GAZA (Reuters) – Israel plans to halt its Gaza offensive without any deal with Hamas, an Israeli official said on Saturday, in an apparent effort to deny the Islamist group any gains from the three-week-old conflict.

Hamas leaders in exile have vowed to fight on, but many of the 1.5 million Palestinians enduring incessant bombardment and privation in Gaza seemed desperate for their ordeal to end.

"The goal is to announce, subject to cabinet approval, a suspension of military activities because we believe our goals have been attained," said the official, asking not to be named.

In today’s most recent developments, two more children have died at a U.N. school, killed by an Israeli tank shell fired in overnight fighting. That seems an ironically sharp twist to the comment “our goals have been attained.”

It is not one of the stated goals of the Israeli offensive to kill women and children. It just so happens that such results are inseparable byproducts of their military actions.

“These two little boys are as innocent, indisputably, as they are dead.”

—John Ging, head of the U.N. Relief and Works Agency (UNRWA) in Gaza.

The Hamas leadership in Lebanon (Osama Hamdan) and Syria (Mohammed Nazzal, Khaled Meshaal) said fighting will continue until Hamas’ demands are met. Demonstrations in the West Bank in support of Hamas, however, have been monitored or broken up by the Palestinian Authority and are not now widely attended. In Israel, Palestinians and pro-peace Israelis have been shot at, shouted at, or otherwise dissuaded from public opposition. The demonstrations in the West Bank are now less militant for action against Israel, and more for a call of unity and reconciliation amongst Palestinians.

Jews Speaking Out Against Israel

Jews themselves are growing in opposition to the war. Canadian Jewish women occupied the Israeli consulate in Toronto. Protests have occurred in the U.S. and U.K. Gerald Kaufman, a Jewish Member of Parliament for the Labour Party, spoke out against Israel vehemently. Referring to his own grandmother, shot in bed by German soldiers during the Second World War, he compared her legacy to modern Israeli violence committed against Palestinians:
“My grandmother did not die to provide cover for Israeli soldiers murdering Palestinian grandmothers in Gaza. The present Israeli government ruthless and cynically exploits the continuing guilt from Gentiles over the slaughter of Jews in the Holocaust as justification for their murder of Palestinians. The implication is that Jewish lives are precious, but the lives of Palestinians do not count.”

Amongst the voices in opposition to the Israeli offensive is Canadian journalist Jesse Rosenfeld, who describes himself as “Jewish and Anti-Zionist.” His proposition for a solution to the crisis echoes Hamas’ requirements: “It is the same solution as before: if Israel would withdraw its siege, withdraw its troops and open the Gaza borders like the Palestinians in Gaza have demanded, there would not be a war right now.”

Israel’s counter-argument has been that the siege was a response to Hamas rocket fire. It is a chicken-and-the-egg argument of nationstate tit-for-tat. “You started it.” “No, you started it.”

Rosenfeld likewise opined, “Israel's goals in this war are not something they will achieve. They will not get Hamas to agree to stop the rocket-fire. That is something that will only come politically. Eventually it will have to get to that point, but Israel will kill a lot more Palestinians in the process.”

Mutually Assured Mass Manipulation

Both Israel and Hamas are intentionally ignoring the dirty secrets and blatant truths, overstating or understating their actions and positions to garner international support. Propaganda is nothing new. Each of the powers-that-be are playing to the gallery and shedding crocodile tears.

The casualties, however, are real.

Today I shall leave the final comments to Bill Moyers.

Friday, January 16, 2009

Gaza Day 21: 1,148 Palestinian Dead, 5,200 Wounded; Lull in Fighting

Different news sources are quoting different casualty figures now. China’s Xinhua claims 1,148 dead and 5,200. Attacks seemed to be tapering off, Wednesday. Yet it was just the calm before the storm. Hamas launched more rockets. Israel put the third phase of Operation Cast Lead into effect driving directly into Gaza city. And now they are publically intimating they may simply pull out of Gaza as unilaterally as they assaulted it.

In Gaza, Hamas is vowing revenge publically, while privately it seems to be considering the issue of relevancy. Given the damage to the economy and infrastructure, what will be their standing vis-a-vis Fatah? The main quantity of Hamas’ soldiers remains intact, though heavily attritted. Morale and cohesion are suffering. Israel seems to be taking direct aim at the psychology of Hamas in this third phase of the attack. Its leadership has also lost key figures, such as Siad Siam, Salah Abu Shreh, Mahmoud Watfah, and others. What will they do when Israel simply decides they are not worth bloodying further?

Israel has by now “won” in every conventional sense of the term as a military operation. What it has lost, and stands to lose further, though, are international relations and long-term security if their victory comes at the cost of world sympathies, sanctions, and increasing hostilities from other states or non-state actors spurred on by the violence they have inflicted.

Israel is now considering unilaterally ending the offensive, though it may thereby make concessions of convenience to the Egyptian-backed ceasefire plan. What Israel would leave on the table is any actual formal agreement with Hamas. Instead, Israel may make a security agreement directly with Egypt, which has its own security concerns with Hamas, as it is linked with the Egyptian radical movement Muslim Brotherhood.

Gaza Casualties to Population Growth and Health

In 2008, Gaza had an estimated population growth rate of 3.42%. For a population of 1.5 million, that is approximately 51,300 more people year-over-year. Thus the losses suffered in this offensive account for 2.24% of their annual growth rate killed, and 10.13% wounded. From a cold, statistical point of view, the war has set back Gaza demographically only by a week or a month of their net gain of healthy population. 0.347% of their overall population has been wounded. About 1 person in 288. The rate of death is 0.077%, or 1 in 1,306.

Yet the 5,200 wounded in Gaza cannot just be written off. Each one represents a family and a family of friends, neighbors, business or political associates. Those casualties will be a “carried” cost for the Palestinian community for decades. Scarred mentalities. Crippled bodies. Raw or hollowed-out emotions. Plus this is only those who have been physically and directly harmed. Add to these numbers those who will suffer from post traumatic stress disorder, or other long-term latent physical or mental illnesses due to the war. They will emerge over years, and will only be discovered over time. Also consider the price paid by the surviving witnesses to the carnage.

The Price of Throwing Stones

After reporting that the rocket fire had died down, more rocket attacks were conducted Thursday and Friday, though the overall trend is at a far reduced rate. Twenty-four rockets were fired at Israel on Thursday, 15 January 2009. One hit Be’er Sheva, critically wounding a 7-year-old boy, and wounding four others moderately or seriously; another landed in the same town, damaging a car. On Friday, 16 January 2009, 15 rockets hit Israel, wounding five people. The attacks were spread across southern Israel, from Ashkelon to Ashod, Eshkol and Kiryat Gat.

It is very easy to paint Israel as the evil-doers, bombing civilians and hitting U.N. targets. They are indeed culpable for acts of war that result in the deaths of innocents. Yet there is an instigatory responsibility Hamas cannot pretend did not occur. It assassinated Fatah leaders and members when it took over Gaza. It continues to inflame hostilities with Israel. It promises death and triumphalism. It began a program of cross-border attacks at Israel: 3,000 rockets were fired at Israel in 2008 alone. Provocations continue to this day.

As the Australian stated of phase three of Operation Cast Lead, “But the vigour with which the [Israeli] attack was pushed home suggests that it was also, and perhaps primarily, intended to impress on Hamas that challenging Israel bears a price.”

Arab and Muslim Reactions: Hot and Cold

Other Muslim and Arab states are starting to weigh in at the Doha conference this week. Qatar and Mauriania froze their ties with Israel. Syria declared its own peace initiative with Israel “dead,” and instigated for other leaders to be more active in opposition of Israel and support of Gaza. “Khaled Meshaal, Hamas's Damascus-based leader, told the opening session of an emergency conference on Gaza his group would not accept Israeli conditions for a truce and would fight on until the offensive ended.”

Many Arab and Muslim states, in particular Egypt, meanwhile, remain cool towards Hamas. Egypt in particular has their own security concerns with the porous, tunneled border and the threat of escalating extremism. It is all very well for states not adjacent to the fighting to instigate for further violence. Egypt, however, is far more likely to side with Israel to end the fighting once sufficient damage is inflicted to Hamas, both its leadership, and its rank-and-file.

Yet what will happen if Israel simply unilaterally withdraws? How much support can Syria garner if their main condition—withdrawal from Gaza—is met without further discussion? Because it would effectively pull the rug out from underneath their position. The situation would return to a status quo ante, albeit with many latent hostile feelings all around. The Israeli incursion would simply have been a punitive expedition. Not to make light of the deaths and injuries, yet it is the nationstate equivalent of “beatings will continue until morale improves.”

To turn the words of Shakespeare on their ear, Israel seems to be asking for Hamas to cry uncle, and let slip the doves of peace. Though their punitive offensive may produce some short-term advantages and defensive benefits, it remains extremely unlikely their offensive will in any way achieve their long-term end-goals of mutual, peaceful coexistence.

Gaza Day 20: 1,105 Palestinian Dead, 5,100 Wounded; Lull in Fighting

GAZA (Reuters) – Israel said its Gaza offensive could be "in the final act" on Friday as it dispatched envoys to discuss truce terms after Hamas made a ceasefire offer to end three weeks of fighting that has killed more than 1,100 people.
Today, rocket fire from Hamas was non-existent. Israel hit another 40 targets in Gaza, including attacks on U.N. facilities, which Israel has expressed remorse over. Many more were killed in fighting. The civilian death toll now stands at around 700.

In the most recent rocket attacks on Thursday, Hamas managed to wound six Israelis. The absence of their firing on Friday may represent a willingness of Hamas to let diplomacy to work.

Thursday, January 15, 2009

Writedowns of $2.9 billion at JPMorgan

JPMorgan is another company to bite the bullet of writing off bad debts. The financial leader took a write off loss of $2.9 billion, rather than pass them on to the Federal government and U.S. taxpayer through the TARP. Various forms of debt were referred to, from bad credit cards and mortgages of consumers to investment portfolios and leveraged business buyouts.

For all the bad news, JPMorgan still managed to eke out a small profit this quarter. It projects the future to remain bleak and its prospects uncertain given the down markets.

It is making the best of efforts in the worst of times. In 2008, while the overall stock market was cut in half, JPMorgan drifted down only 27% in value.

Historical results will surely emerge from the company named after the man credited with saving the U.S. economy of multiple occasions. Yet we also have to be watchful of events even larger than those that could be managed by the Federal Reserve Board, which J.P Morgan Jr. was a founding member of.

At this time in history, we are not sure how bad the news is going to be one to four years from now. We just should be prepared that value in the global economy is being eroded. What was worth billions yesterday is worthless today.

Though we did not have inflation in terms of depreciation of the dollar, we obviously had an inflation of market valuation. We are now having a painful return to more humble values.

Throughout all of the dour and somber market news, I had to laugh, a bit painedly, reading this comment by John Kenneth Galbraith:

One of the things you must understand about 1929 and the antecedent years, as about any speculative episode, is the danger... in attributing intelligence to the simple fact that people are associated with large sums of money or large financial operations. We don't ask whether they're intelligent. We say, they're associated with all this money, so they must be intelligent. We attribute intelligence to association with financial operations. And only afterwards do we discover that error and that the people involved can be extremely successful in gulling themselves. That they can be in effect, and I use the word advisedly, marvelously stupid.

I used to be quite an optimist... I thought that by keeping the memory of the 1929 crash alive we would have a warning against the kind of feckless, fatuous optimism which caused people to get in and shove up the markets and shove it up more and get carried away by the illusion of ever-increasing wealth. I've given up on that hope because we've had it happen too often again since.

The Crash of 1929, PBS’ American Experience, 1990
With books on my shelf with such titles as Barry Carter’s Infinite Wealth, many were the market magicians and prognosticators who were presuming that S-curves had no top, or indeed, that bell curves were all to turn into S-curves, never to come back down.

With $2.9 billion written off, JPMorgan provides proof-positive that wealth is not infinite. It takes time to earn. It takes sustained attention, management, production and maintenance to keep its value. And it is all-too-easily destroyed.

Wednesday, January 14, 2009

Gaza Day 19 Update: Possible Cease Fire, Gaza Damage Assessment at $1.4 billion

In either absolute or proportional terms, and in either human or economic tolls, Gaza has lost more than Israel in this war.

While hostilities continue, Hamas has communicated to Egypt the first counterproposal of details for a temporary ceasefire, and the first assessments of the damage to Gaza put the costs at $1.4 billion.
RAMALLAH, West Bank (Associated Press) – Israel's fierce assault on Gaza's Hamas rulers has destroyed at least $1.4 billion worth of buildings, roads, pipes, power lines and other infrastructure in already impoverished territory, Palestinian surveyors estimate.

CAIRO, Jan 14 (Reuters) - The Palestinian movement Hamas has presented Egyptian mediators a "detailed vision" on how to carry out a truce initiative proposed by Cairo, which will now relay this vision to Israel, Hamas officials said on Wednesday.
Economic Toll

To put this war in strategic perspective, the GDP of the Gaza Strip is estimated about $5.0 billion (2006 Estimate), as per the CIA World Factbook. Thus, this war, in 19 days, has cost Hamas 28% of its GDP. Even with international aid, it will take years or decades for Gaza to recover from the devastation.

The war has cost Israel, in comparison, approximately $1 billion, out of a GDP of $185.8 billion (2007 Estimate). Or about 0.54% of GDP.

The absolute ratio of costs were Gaza’s $1.4 billion versus Israel’s $1 billion. While this is only a 7:5 ratio absolutely, it was a 50:1 ratio of costs-versus-GDP, since Gaza had far less to lose than Israel in the first place.

Human Toll

Gaza has lost 1,017 dead to Israel’s 13 killed; a 77:1 absolute ratio. Yet relatively, Gaza lost 0.068% of its population dead (1,017 out of about 1.5 million), or 67 per 100,000, versus Israel’s 0.00018% (13 out of 7.1 million),or 0.18 per 100,000. That is a relative mortality ratio of 370:1.

Taking into account the number of wounded on either side, Gaza also suffers disproportionately. Israel has been somewhat circumspect about the number of their wounded. Iranian news site PressTV claims that nearly 100 Israeli soldiers have been wounded, which equates to 0.0014% of the overall Israeli population, or 1.4 per 100,000. In comparison, latest reports have said 4,600 Palestinians were wounded, which is 0.31% or 307 per 100,000. Making the absolute ratio of wounded at least 46:1, and the proportional ratio of wounded amongst the respective populations of 218:1.


For now, Israel seems to have “won.” Yet the leadership of Hamas may not care.

It will be difficult, on an objective basis, for Hamas to claim any form of “victory” for this phase of the Palestinian-Israeli conflict, other than in terms of garnering international sympathies and in popular support via propagandistic exaggeration.

Given that Hamas are at last giving terms to Egypt for discussion of a cease-fire, and are considering talks with Fatah, they may have lost more than they were willing to afford in the war. Thus, they may be at last ready to capitulate. The tragedy now will be the number of dead and wounded suffered between when the leadership knew that the war is over, and when the armistice goes into effect. The fighting will continue until an official pronouncement is made, and potentially even afterwards, as the acts of individual non-state actors and pockets of unsatisfied militants.

A key consideration in a strategic perspective is when people who have so little to begin with don’t care any more about restraint. They do not mind losing whatever they have simply to confront and spite a hated opponent. The “brave loser” of such wars often accepts disproportionate casualties as a badge of courage. They may have picked the fight with Israel to electrify radical Muslim elements internationally.

Such absolute and relative defeats become glorified and romanticized in the eyes of zealots. In other words, it does not need to make sense, nor does conflict need to end simply because matters have turned out terribly for the typical inhabitant of the Gaza Strip.

Iraq, Afghanistan, Somalia, and many other conflict zones of the world have shown that wars can continue even long past any “normally acceptable” definition of defeat where more reasonable people would surrender and seek to reconstruct a civil society. Such scorched earth wars are conducted specifically by “unreasonable” people. These are not of the more socially constructive ilk of positive innovators who seem to think they know the future. Even as their side is being demolished, these sorts see the future, and it is triumphantly apocalyptic.

Even the apparent “victor” needs to be very careful in how they win the war. Tactics used by the Israeli military may not achieve in the long run what all the investment and spilling of blood and money was supposed to produce. Though the war-fighting capacity of the Gaza Strip has been reduced for now, it can be replaced relatively easily in due time. The loss to Israel’s credibility, relationships and standing in the world may take longer to repair.

Gaza Day 19: 1,010 Dead, 4,700 Wounded; 13 Israelis Dead.

GAZA (Reuters) – Hamas officials were negotiating a ceasefire on Wednesday as Israeli forces kept up the pressure on the Islamists in the Gaza Strip, where the Palestinian death toll rose above 1,000 after 19 days of air and ground attacks.

The Gaza-based Palestinian Center for Human rights said more than 670 civilians were among the dead. Ten Israeli soldiers and three civilians hit by rockets fired from the Gaza Strip have been killed since Israel launched its campaign on December 27.
In Northern Israel, rockets were fired from Lebanon at Israel’s north border region. Such attacks have been increasing over the past week. Osama bin Laden also released a tape calling for others to join in this as jihad, or holy struggle.

This remains an issue of national will. Leaders have a penchant to be willing to fight to the strength of their last adherent. Israel, who is in overall control of the tempo of military operations, seems to be willing to punitively kill anyone taking up arms against their incursion.

Political drama is at play here. In many ways, the Palestinians are playing the role of victim, decrying the attacks after firing rockets at the Israelis. The Israelis are playing the role of victim, showing the attacks upon their land while brutally repressing the Palestinians. Both, while claiming to be victims, are also claiming to be strong in the face of their enemies. Gaza is willing to accept the cost of the war in terms of life and destruction to the infrastructure and economy. Israel is willing to accept the cost in terms of international relations, and economic costs of the offensive. Which are not insignificant. estimated the cost of this war at $265 million over the first six days, and the per-day-of-fighting cost rising to $52 million. The cost of the war would surely have risen since then based on the commitment of additional forces.

Let’s do some quick estimation via mathematics:

6 days @ $29-39 million/day = $265 million subtotal
13 days @ $52 million/day = $676 million subtotal
19 days fighting = $951 million total
The IDF had an auxilliary budget of $211 million in reserve as contingency for such operations. Yet this fund likely was already spent in the first week of fighting. There has also been a cost of $9 million in property damage in Israel, and, including retail losses, the total civilian economy cost is likely about $16 million per week. That is a significant rise in the rate of civilian cost. Over the past three years, the residents of the region near Gaza had been compensated NIS 143 million ($36.44 million) for direct and indirect losses.

This has caused the Israeli shekel to have fallen in world currency markets, as Israel is expected to assume debts to fund the war.

It sounds almost reptilian. Chilling to consider one might simply compare over 1,000 deaths, and 5,700 casualties total, to the loss of about a billion dollars in money, and a percentage hit on one’s currency valuation. But there you have it. The cost of this war to Israel has been $951 million dollars, for the infliction of 5,700 casualties upon Gaza (both military and civilian).

That is a cost of approximately $167,000 per casualty inflicted.

In return, one could consider the cost Hamas has burdened to inflict the 13 casualties on Israel. Right now, it is incalculable. The destruction of its property, the ruination of its civic institutions and governmental facilities, and the degredation of its economy has no methodology or mechanism for tracking right now. The personal and societal cost to be burdened by Gaza is surely in the hundreds of millions or billions. Yet we have no estimation at this point, and insufficient evidence to begin to calculate it. In the aftermath of the war, however, the cost of this war will sink in, as families and businesses across Gaza try to rebuild.

This is what happens when war mentality sets in. The cost of war, the price, the toll it takes, means little if one expects to be dead when the bill comes due. Winning is all that matters. Not the cost of that victory.

I learned an expression a long while ago while working at West End Games as a strategic simulation game designer. “All generals study tactics. Good generals study strategy. Great generals study logistics.”

One would hope the various commanders on all sides review the cost of this war, and in the end, realize the price of peace is far less, and the benefits of coexistence much more appealing.

Death Knell for Nortel, Jubilee for the Developed World?

Nortel Networks, (NYSE: NT), a corporation that earned $10.95 billion in 2007, has filed for bankruptcy both in Canada and the U.S. Nortel is, or was until recently, known as the world’s largest manufacturer of telephone network equipment. Nortel’s stock, in the year 2000, sold for over $800 per share. It melted down after a bubble around 2000-2001 and never recovered. These days, a share of stock can be gotten for $0.32. Which, based on its debt and bankruptcy, may not even be worth it.

The real problem here is how this is a bellweather for downstream problems which can occur from this. The modern information economy is reliant upon equipment to provide “always on” uptime service to everyone. Yet what will happen now, if Nortel is not there to ensure its pervasive products and technology? Here are some crowing points Nortel published in its recent corporate backgrounder:
  • Nortel equips 85 percent of the top revenue-generating wireless operators globally.
  • Stock exchanges in New York, Australia, Sao Paulo, Buenos Aires, Bombay and Seoul use Nortel solutions.
  • More than 500 state or provincial agencies, 5,000 local city and county agencies and numeros federal and international government agencies throughout the world rely on Nortel solutions. This includes the U.S. Department of Defense in all 50 U.S. states and more than two dozen countries across the globe.
  • Nortel enables secure connectivity to more than 100 million enterprise users worldwide.
  • Nine out of 10 of the largest U.S. public school districts, serving more than 3.5 million students, run on Nortel solutions.
  • More than 93 percent of the top 100 manufacturing companies run on Nortel solutions including aerospace, pharmaceutical, automotive, and IT companies.
  • Our products are at the heart of every one of the top 25 service provider networks globally.
  • More than 1,000 customer networks in over 65 countries use Nortel optical systems.
Now suddenly take away the company that provides all this equipment. What happens to the stock exchanges? The phone, network, and wireless providers? Schools? The Department of Defense?

Nortel may be too big to leave to utterly collapse and shutter its doors. There is a need to support and service the equipment base already in the world. There may be products, services and vital research that its dedicated customers will continue to sustain throughout its bankruptcy proceedings. It may survive as a smaller organization, or it may shed different divisions that may or may not survive on their own. Competitors may swoop in like vultures during the period of uncertainty.

Yet the customers will be faced with the prospects of keeping their gear from an unstable equipment vendor, or they may need to write it down or off, and repurchase gear from another technology provider over time. There will be, regardless, a “low grade fever” of IT worries over the next few years throughout the industries that Nortel affects.

Or, indeed, Nortel may just be availing itself of bankruptcy proceedings just to, in effect, bilk its creditors and avoid paying back some portion or most of its debts. According to its own press release, it plans to continue operations without interruption. Nortel Government Solutions (NGS), and the Caribbean and Latin American operations will not be affected. So is this simply a means to preserve its last $2.4 billion of cash? That would not be sufficient to cover its debt to even its single largest creditor, New York Mellon Corp., to which it owes $3.8 billion. Its total debt load is $6.3 billion, and total liabilties of almost $12 billion.

In comparison, the U.S. national debt, now estimated at $10.6 trillion, increases an average of $3.39 billion per day. Nortel is just a drop in the bucket of the overall meltdown of the world economy.

So what is occurring here? Are we going to see this as the first of a wave of corporate collapses, or will it be the beginning of corporations saddled with debt simply telling creditors, “you’re not going to get your money back.” How will the responsibility be distributed between Nortel, its creditors, public and private investors, and the Canadian and U.S. governments?

While Nortel, its corporate competitors and the existing Nortel channel will move to cover any customers and prevent a collapse of the global markets and networks in the midst of an economic vacuum, and while many concerned parties will try to heal this situation over the long-term, there will be a price paid for this failure. Something is going to happen. An economic implosion. Money will simply “poof.” Debts will be reduced, either written down or written off entirely, as losses.

One irony in the corporate backgrounder is that “Nortel was named to the Dow Jones Sustainability North America Index for the third consecutive year in 2007. The Dow Jones Sustainability Index is an investment index that benchmarks North America’s corporate leaders in sustainable development.” While Nortel was undertaking carbon impact reviews of its operations—it was estimated to have produced 314,286 metric tons of carbon dioxide in 2007—Nortel itself as a corporation was not sustainable.

Is this a canary in the coalmine of how other corporations will deal with their own debts and obligations? Could even nations conduct such behavior. Will there be a mass “Chapter 11” for governments unable to cover their debts? Equador, declared default on its own $3.9 billion in debts. Milton Ramirez’ recent analysis of the situation in Equador describes a possible slippery slope:
In the end, ordinary Ecuadorians, who may not understand the terminology of this discussion, may correlate the issue of debts to the banks to their own lives. If they follow the same logic, shouldn't they stop paying their own debts with banks?
Such is not unprecedented. We can look to a nation for a historical precedent: Iraq. Ancient Babylonia had a system for forgiveness of debts. It became known in Judeo-Christian tradition as “Jubilee.” As Wikipedia describes:
“These Babylonian kings… occasionally issued decrees for the cancellation of debts and/or the return of the people to the lands they had sold. Such "clean slate" decrees were intended to redress the tendency of debtors, in ancient societies, to become hopelessly in debt to their creditors, thus accumulating most of the arable land into the control of a wealthy few. The decrees were issued sporadically. Economist Michael Hudson has maintained that the Biblical legislation of the Jubilee and Sabbatical years addressed the same problems encountered by these Babylonian kings, but the Biblical formulation of the laws presented a significant advance in justice and the rights of the people. This was due to the "clean slates" now being codified into law, rather than relying on the whim of the king. Furthermore, the regular rhythm of the Sabbatical and Jubilee years meant that everyone would know when the next release was due, thereby giving fairness and equity to both creditor and debtor.”
Is the world in such a state today that a “jubilee” is needed? Can there be equable solutions to the writedown or writeoff of the debts of individuals, corporations, and governments around the world? The situation reminds me of the play by William Shakespeare, the Merchant of Venice. In that play, a technicality in the repayment of the debt Shylock demands, “a pound of flesh,” demands that Shylock remove the pound of flesh without spilling a drop of blood. Is there any such technicality in debt relief today whereby we can escape our debts by point out the “drops of blood” that would need to be shed for their repayment?

Back before 9/11, Bono began his campaign for third world debt relief:
“Debt-relief advocates say their cause comes down to two moral questions. First, is it right to ask 41 of the world's poorest nations to pay back nearly $200 billion in debt they accumulated over the past 30 to 40 years if much of the money was stolen by long-gone dictators propped up by the West during the Cold War? Second, is it fair to ask for repayment if just the burden of paying the interest costs cripples the nations' ability to improve their standards of living?”
There are the pounds of flesh, and our drops of blood. In the latter part of the 20th Century, there was an increasing call by many, including Bono and others, that led to Jubilee 2000. There was some easing from the IMF over the 1990s. In the article from 2001:
“So far, those lenders have agreed to relieve 22 nations of debts totaling $34 billion. But there are strings attached. International monitors must be allowed to watch whether the savings go toward making people's lives better or into corrupt leaders' bank accounts. (Countries with repressive governments, such as Sudan, aren't eligible for relief.)”
This sort of activism continues, through the ONE campaign and DATA, which recently merged. Debt relief for developing countries continues to shape global economics. In 2005, the G8 Summit agreed write off $40 billion owed by 18 indebted nations of the world.

Circling back from the third world, to the developed world, is this the shape of things to come for the developed world? Will we be seeing debt relief become a more prevalent part of the global economic debate? Do we need a “reset” on the economy, from the banking and finance, housing, healthcare, technology and public sectors? If we do, can we cushion our fall when debts are defaulted upon?

Can we maintain our economic, ecological, social and technological networks of interdependence without it falling apart? We may be kidding ourselves as we talk about economic or ecological “sustainability” and then see everything else we care about personally, as well as the corporations and institutions upon which we depend for our day-to-day existence, declare bankruptcy.

How do we square this sort of situation with the fiscal stimulus package, or the TARP, and other economic programs being promulgated in the wake of the current crisis? $775 billion is being categorized as insufficient. Rather than having bad debts be written off by the banking sector, the United States government is being asked to buy the bad debt. That debt will then need to be paid off by U.S. taxpayers, or, in turn, simply written off or defaulted upon by the U.S. government. Does that make sense to anyone?

The current estimated U.S. debt of $10.615 trillion, divided amongst the 306 million people living in the United States, is approximately $36,000 per person. A $775 billion stimulus, alone, requires a per-capita addition to the debt of $2,500 per person. Certainly we cannot ask for further tax relief without also then increasing the federal deficit and fueling the debt even further. We can compare this situation in the U.S. to the crisis in South Africa, where personal debt-to-household income ratio is rising. People there are seeking to take out loans simply to pay back their pre-existing debts and loans. If debts and obligations, whether personal or governmental, rise towards 100%, in due time, the amount of income any consumer would have for personal use will drop towards zero. We would all be “enslaved” to our debts, unable to achieve anything other than repaying past obligations.

How do we finally face the idea that, in order to really address this situation, we will need to, at some point, simply write off or write down these debts? Someone needs to take the hit. The painful realization may not have set in yet, but at some point it shall need to.

In such light, perhaps Nortel’s decision to enter bankruptcy protection doesn’t seem so tragic after all.

Freedom in the World 2009 Survey Release

“On January 12, Freedom House released the findings from the latest edition of Freedom in the World, the annual survey of global political rights and civil liberties. According to the survey’s findings, 2008 marked the third consecutive year in which global freedom suffered a decline. This setback was most pronounced in Sub-Saharan Africa and the non-Baltic former Soviet Union, although it affected most other regions of the world. Furthermore, the decline in freedom coincided with the onset of a forceful reaction against democracy by a number of powerful authoritarian regimes, including Russia and China.”

The assessment stood that 89 countries out of 193 analyzed for the report met sufficient objective criteria to warrant the status of “free” societies. Such nations accounted for 3.055 billion people, or 46% of the global population. “Partly free” societies accounted for 62 nations, with 1.351 billion population—20% of humanity. Finally, 42 nations were “not free,” which accounted for a population of 2.276 billion, or 34% of global population. More than half of that population lives in China.

It rated 8 of the Not Free states as the “Worst of the Worst:” North Korea, Turkmenistan and Uzbekistan, Libya, Sudan, Burma, Equatorial Guinea, and Somalia. Two additional territories, part of larger states, were also worst-rated as a special consideration: Tibet and Chechnya.

There were also a basketful of nations and territories that, while not “Worst of the Worst” deserved their own special standing for excessive repressions: Belarus, Chad, China, Cuba, Eritrea, Laos, Saudi Arabia, Syria, Zimbabwe, South Ossetia, and Western Sahara.

This is one of the most striking of observations highlighted in this year’s Executive Summary (entitled Freedom in the World 2009: Setbacks and Resilience):
“Increasingly, it is nongovernmental organizations and democracy advocates that constitute the most effective societal forces for reform in authoritarian states.”
Perhaps a place in the world exists for the engendering and fruition of Global Understanding after all!

Sunday, January 11, 2009

Uranium-Enriched Paranoia in Iran, Israel, and the U.S.

U.S. Rejected Aid for Israeli Raid on Iranian Nuclear Site

The New York Times just published an article written by David E. Sanger about how Israel was rebuffed in its attempt to obtain bunker-busting bombs from the United States. The bombs were desired by Israel to destroy Iranian uranium-enrichment facilities.

Yet there is a wider story, which includes how the United States availed themselves of other covert efforts to prevent Iranian enrichment from proceeding:

Past American-led efforts aimed at Natanz had yielded little result. Several years ago, foreign intelligence services tinkered with individual power units that Iran bought in Turkey to drive its centrifuges, the floor-to-ceiling silvery tubes that spin at the speed of sound, enriching uranium for use in power stations or, with additional enrichment, nuclear weapons.

A number of centrifuges blew up, prompting public declarations of sabotage by Iranian officials. An engineer in Switzerland, who worked with the Pakistani nuclear black-marketeer Abdul Qadeer Khan, had been “turned” by American intelligence officials and helped them slip faulty technology into parts bought by the Iranians.
Paranoia or Healthy Concern?

Expect a firestorm of public reactions. Israeli and U.S. conservatives will show this proves the Iranians are up to no good, and need to be stopped now, at any cost. Some hawks will be angered that the United States did not give the bombs to Israel to take care of the Iranian nuclear weapons program, the same way they bombed the Iraqi nuclear reactor site in the 1981 Operation Opera.

While many still deny Iran has ambitions towards developing nuclear weapons, Iranian apologists will point out how this is Western hypocrisy, disempowering and depriving Iran of nuclear arms, which the U.S. and Israel are both in possession of. And so are Pakistan and India.

The question this raises is that classic irony: are you paranoid if your enemies really are out to get you?

The question can be asked regarding all parties, the U.S., Iran and Israel. Iran can now use the revelation of this information to prove to the world how there is a conspiracy aimed at their efforts. Israel and the U.S. can declare how this shows the secretive ambitions of Iran towards a weapon, which, if obtained, would be used to commit a nuclear holocaust against Israel.

There is no firm concept of Nuclear Deterrent nor Detente developed between Israel and its declared enemies, such as Iran. The path of diplomacy pursued between the Soviet Union and the United States during the Cold War may, or may not, apply.

This leads to a situation where the limits of covert, or even overt military actions, are not clearly delineated. How far is too far? What might happen if Iran is let to get a weapon? Could they be trusted to not give it to an extremist organization, or use it on a nuclear-armed missile?

Contingency plans and scenarios then need to begin considerations: what happens if the worst-possible imaginings begin to play out?

Given the high-levels of genuine concern by Israel and the United States, there has been efforts for years to prevent the “unthinkable.” A nuclear weapon falling into the hands of Iran.

At the same time, Iran, knowing this exclusionary desire of Israel and the United States—the policy to prevent an Iranian nuclear capacity—has done all it can to make its program immune from external shoaling.

Prospects for Iranian Uranium

For a moment, let’s consider the anathema: Iran gets a nuclear weapon. Back in 2003, Time covered the prospects of a nuclear-armed Iran.
The new discoveries could destabilize a region already dangerously on edge in anticipation of war in Iraq. Israel — which destroyed an Iraqi nuclear plant in Osirak in a 1981 raid — is deeply alarmed by the developments. "It's a huge concern," says one Israeli official. "Iran is a regime that denies Israel's right to exist in any borders and is a principal sponsor of Hezbollah. If that regime were able to achieve a nuclear potential it would be extremely dangerous." Israel will not take the "Osirak option" off the table, the official says, but "would prefer that this issue be solved in other ways."
Yet what if an “Osirak option” fails to prevent the development of nuclear weapons?

Immediately, Iran has at least a limited nuclear deterrence against Israel. It may eventually threaten to, or actually use, nuclear weapons against Israel. It is also developing long-range missiles, though there is lively debate as to whether they could reach European targets. The Atlantic Monthly ran a strategic simulation in 2004 to see what options present themselves to the U.S. to prevent Iranian nuclear capabilities. The results were not encouraging of interventionism.
So this is how the war game turned out: with a finding that the next American President must, through bluff and patience, change the actions of a government whose motives he does not understand well, and over which his influence is limited. "After all this effort, I am left with two simple sentences for policymakers," Sam Gardiner said of his exercise. "You have no military solution for the issues of Iran. And you have to make diplomacy work."
To prevent the prospects of a nuclear-armed Iran, or counter such a “game changer” in the world of geopolitics, the United States, Israel, and other nations may mount a more formal pro-Western coalition acting to curb Iran. Such a coalition could include EU members (Turkey, Italy, even Germany) and/or Asian nations, such as India, concerned with the range of Iranian missiles capable of striking their cities. Such a coalition may take preemptive measures if diplomacy fails.

The Nation that Cried Wolf

What has cloudied much of the discussion has been the Bush administration’s bungled handling of Iraq. Exagerated, overblown, and, at times, fabricated threats of Weapons of Mass Destruction (WMD) in Iraq inured the world to concern. The U.S. became the “boy who cried wolf.” The American public, skeptical following the revelations of fabrication and politicization of intelligence information, wouldn’t believe genuine concerns of intelligence analysts. Furthermore, the investigation into failures of the intelligence community missing the actual, provable conspiracy which led to the 9/11 attacks lowered public trust.

While many people around the world live their lives day-to-day without concern for the situation, there have been many arguments on various public and private levels, “What do we do about it?”

Singing That Great Old Classic

Some who hold a hawkish position turned their views into a song, parodying the Beach Boy’s classic Barbara Anne. The first to do so were Vince Vance and the Valiants, who released their 1980 classic Bomb Iran during the Iranian hostage crisis. It was purportedly the most requested song on the radio that year across the United States.

What people forget was, while the United States never bombed Iran, the U.S. did support Saddam Hussein, who, on 22 September 1980, while the U.S. elections were in full swing, conducted his invasion of Iran. He bombed Iran for his own reasons, yet it also served the visceral satisfaction of many Americans wanting payback for the U.S. embassy hostage crisis. Such popular sentiments across the nation fueled the election of Ronald Reagan.

During the entire length of the Reagan presidency, Saddam Hussein benefited from U.S. support, from satellite intelligence, conventional weapons, chemical weapons, biological warfare samples, and dual-use technology. There was even direct U.S. and Iranian combat. At the same time, the United States clandestinely sold weapons parts to Iran as part of the Iran-Contra scandal. U.S. policy can be summed up by Ed Juchniewicz, quoted in Charlie Wilson’s War: “We didn't want either side to have the advantage. We just wanted them to kick the shit out of each other.” (George Crile, Charlie Wilson's War, 2003, Grove Press, p. 275)

Fast forward to 2007, and one can hear John McCain singing that timeless classic, “Bomb, bomb, bomb, bomb, bomb Iran.” Such a rendition, and the laughter of the audience, made newspaper headlines and radio reports. Yet it concerned many on the left, and even at the highest levels of intelligence and policy experts. If we bombed Iran, where would that lead us? What was the price of opening that populist can of worms?

The song is now broadly used by the left, the right, and anyone with a sense of absurdist or cynical humor. Paul Shanklin, who leans towards the right, made a full parody song, as did Adam Kontras, and William Tong, leaning to the left. It was also sung by anti-war protesters at the RNC in September 2008. The lyrics shift between renditions to either support, or make absurd, the prospects of war with Iran.

Be Careful What You Wish For

If the United States and/or Israel went to war with Iran, what would happen?

The Atlantic Monthly article of 2004 was the clearest published consideration of the topic. Any attempts by the U.S. to build up an adequate force to deal with Iran—a nation of 70 million people—would be easily observed by Iranian leaders. This could lead to pre-emptive terrorist strikes on the United States, either domestically or internationally, by an Iran backed into a corner. Terrorism would rise in Iraq, Afghanistan, Pakistan, and other locations, fueled by Iranian support, since the Iranian regime would have no reason to hold back. Such analysis was further reiterated by a Time magazine report in 2006.

Any attempts to bomb Iran would drive their nuclear program underground. Any ability for the IAEA to monitor their progress would immediately evaporate. Destabilization would occur in the present conflicts adjacent to Iran on both sides, and, once that occurred, the toss of the dice does not show any winning odds, no matter what comes up.

Yet, again, what would the costs be for such a war? What price would any sort of “victory” entail? A quick strike at Iranian nuclear facilities could be mounted for a many billions of dollars. Seymour Hersh wrote and spoke in April 2006 that certain members of the United States government were, at that time, considering to launch nuclear weapons if need be, to avert an Iranian nuclear weapon. As Wolf Blitzer quoted Hersh in an interview for CNN: “The lack of reliable intelligence leaves military planners, given the goal of totally destroying the sites,” the nuclear sites in Iran, “little choice but to consider the use of tactical nuclear weapons. Every other option, in the view of the nuclear weaponeers, would leave a gap.”

From there, things get messy. All sorts of scenarios lead from that. International terrorism. A conventional war requiring invasion of Iran, and the further destabilization of the Middle East and all of South Asia.

BLITZER: The British foreign secretary, Jack Straw, was asked earlier today about this nuclear option, if you will, to deal with Iran's potential nuclear program. ... He didn't mince any words: "[The idea of a nuclear strike on Iran is] completely nuts" in his words. You want to react to that?

HERSH: Well, what he didn't say -- he didn't deny that there's serious planning about the military strike is the point. I mean, he's absolutely right about a nuclear option, but there is serious planning for a conventional war.

So what would a conventional war with Iran cost the United States?

Iran is a nation of 636,000 square miles (1.648 million square km), and a population estimated variably between 65 million (2008 CIA World Factbook), to 70.49 million people (Statistical Centre of Iran, 2007), to 71.2 million (Population Reference Bureau, mid-2007). Though the actual population is difficult to ascertain with certainty, it is clearly far larger than the combination of both neighboring nations Afghanistan (647k sq km, 32.7 million population) and Iraq (437k sq km, 28.2 million population).

A war with Iran, would, therefore seem to require as much again as we committed to invading and occupying those two nations, right? Not at all.

Economically, politically, and militarily, Iran is in a far different situation than Iraq or Afghanistan were in when we invaded those countries. It is far healthier economically, having the 18th largest GDP in the world. Politically, while there are both peaceful and violent separatist and opposition movements against the hardline government of Iran, they are nowhere near the scale of the forces that opposed Saddam Hussein in Iraq, or the factions that were infighting in Afghanistan during their civil war.

Iraq, when invaded, had been suffering from the military interdictions of the northern and southern No Fly Zones and economic sanctions levied in the aftermath of the 1991 Gulf War and the Kurdish and Shiite uprisings. For well over a decade it had been suffering the withering deterioration of its military and civil infrastructure. Afghanistan was in even worse shape, having never fully recovered from its occupation under the Soviet Union and its protracted civil war.

Iran has instead been enjoying a period of relative peace and prosperity ever since the end of the 1980-1988 war with Iraq. Its military of 545,000 can also draw upon another roughly 400,000 reservists. If need be, Iran is prepared to call upwards of a million, to possibly 12 million to defend the nation.

The Iranians mostly have defensive plans, considering responses and strategies against an aerial bombardment by cruise missiles, aircraft, and drones, or, possibly, a large-scale invasion. Yet it also has more modest plans to wage and even win an offensive war against U.S. military forces in neighboring states via irregular means. Their doctrine is centered around national defense, but also considers the failure of the United States to be able to maintain long-term presence at the present rate of expenditure. If invaded, they hope to make Iran as painful and costly a place to invade as they can imagine it. After they were invaded, Iran retook land from Iraq during the Iran-Iraq War. Similarly, a lot of their strategy now is based on getting hit hard, and then recovering. Iran is hoping to make itself as unattractive as possible to foreign expeditions. Eventually they would rise up and reconsolidate their holdings. Perhaps even expand their territories given a power vacuum in neighboring states.

Ever since the 1979 revolution, the Islamic Republic of Iran has been preparing for a U.S. attack to overthrow their regime. Their offenses are at best limited to the threat of irregular invasion and alliance with forces unfriendly to the U.S. in neighboring Iraq and Afghanistan, the exportation of arms for the conduct of terrorist tactics, and the denial of oil to destabilize the world market.

The costs to invade Iran would be four fold, in increasing levels of commitment towards full-scale war with Iran:
  • the containment of its small arms/light weapons (SALW) insurgency support and terrorism exportation capability (arming Hezbollah, Iraqi and Afghani groups, etc.)
  • the destruction of its WMD creation capability (uranium and missile production, chemical weapons)
  • the invasion and defeat of its standing military forces in detail
  • the occupation of Iran during a period of socio-political change
Containment: The first level, containment of Iranian arms/terrorism exporation, is already underway partially. There is no firm blockade on Iran, yet there are arms control provisions and sanctions in place. The United States does at least partially control Iranian borders. The U.S. could step up its interdiction of arms shipments even more. Requirement: Tens of thousands of personnel in Iraq and Afghanistan as border patrol, up to possibly 100,000, on an ongoing, long-term. Cost: $50-$200 billion annually. Benefit: Lesser influence of Iranian money and arms in these conflict zones. Lower civilian and military casualties. Problem: Irregular success. Small arms and light weapons are really easy to smuggle through extremely long, porous borders. Compare to U.S.-Mexico border operations to interdict drugs smuggling. Yet instead of kilos of cocaine or other drugs, it is ammunition and explosives.

WMD Disposal: The second level is difficult without both air and ground operations. It might even require tactical nuclear weapons to get deep bunkers. Requirement: Hundreds of thousands of U.S. military personnel waging a 3-12 month air and special forces campaign to eradicate Iranian WMD facilities. Cost: $50-200 billion. Benefit: Sets back Iranian WMD production capacity by 5+ years. Problem: Unless root causes of animosity are addressed, they can always rebuild capacity.

Defeat in Detail: This operation would not necessarily be as easy to accomplish as the march on Baghdad. During World War II, the Soviet Union and the United Kingdom invaded Iran and conquered it in a month. This is the type of war the U.S. is best prepared for, in terms of strategy and doctrine, known as “third generational war.” Large-scale movements. Divisions and corps-level operations. The U.S. was able to defeat the army of Saddam Hussein in the first Gulf War because it was not alone. A coalition of nearly one million troops of enormous capability devastated the Iraqi forces, which were approximately 545,000 troops (the same number as Iran has today). In 2003, the U.S. was able to make bold moves against the Iraqi military because it was a shadow of its former self. It melted before them as they advanced. Some forces fought, yet many broke and ran. The odds were about 290,000 U.S. and UK, 70,000 Kurds, with about 4,000 other allied troops, against 375,000 Iraqis — roughly about even in terms of numbers, though greatly disparate in terms of equipment and preparedness. To tackle Iran would require a force somewhere about these numbers. The invasion might take anywhere between one month to one year, depending on how many parts of Iran the U.S. wished to attack to destroy war-fighting capacities of defending units. Requirements: Between 300,000 to 1 million troops. Cost: $60 billion (for a quick and bloody assault, followed by withdrawal) - $1 trillion (for one year’s operations for a million troops). Benefits: Nullifies the Iranian army as an effective fighting force for years. Problem: Unleashes a guerrilla warfighting infrastructure designed for protracted civil defense which could draw the U.S. in for years.

Occupation: This is the long-term prospect of any invasion bent on regime change. It could take as long as Afghanistan and Iraq have taken. About a decade, all told, for the situation to meander to an end. Requirements: Between 300,000 to 1 million troops. Cost: $300 billion - $1 trillion for one year’s operations; $3-10 trillion for a decade’s operations. Benefits: Ideally provides pro-Western regime change in Iran. Problem: May not provide desired pro-Western regime. May lead to failed state, corruption, and humanitarian disaster. Could bankrupt the United States. Could lead to underground operations producing nuclear or chemical terrorism.

None of these options are particularly attractive to either Tehran or Washington. Which means that, given the right circumstances, both nations might be interested in de-escalations of rhetoric after decades of belligerence. Israel, however, is another matter.

A Superpower in Search of a Policy

Because of implicit long-term distrust between Iran and the United States, dating back to the 1979 Iranian revolution, no diplomacy is considered reliable. Iranian relations towards Israel are in even worse shape. Therefore, right now the United States is doing the equivalent of head-scratching towards Iran. What is to be done?

There is indeed a clear national policy towards Iran, as outlined in the 2005 Statement before the Foreign Relations Committee by R. Nicholas Burns of the State Department. Yet that position paper does not meet with effective action in terms of diplomacy. The “Freedom Deficit” of Iran has not closed significantly since 2005. Nor have U.S.-Iranian relations thawed to any degree. The U.S. has no clearly-expressed strategy regarding Iranian nuclear power besides a general aversion to the possibility and taking steps for prevention with European allies. What happens if Iran gets a bomb? Very few public statements exist that deal with such contingency.

Possibilities for deterrence and detente are subjects for discussion. It worked with the Soviet Union and China during the Cold War. We would have to see if the same rules of national survival and preservation apply to an Islamic republic.

The opportunity for the new Obama administration is to set a new course for U.S.-Iranian foreign relations. “We are going to have to take a new approach,” the President-elect has been quoted as saying. What that approach is, other than opening the door to negotiations, is unclear. Yet the stakes have never been higher.

Here is a video by regarding the history, and the possibility, of U.S.-Iranian relations.