Failures – exposed, reflected upon, considered

First Wall Street and now it seems GM and Chrysler came begging at the governments doors for additional $20+ billion dollars. What do they offer in exchange for this money? They want to give buyouts and early retirements packagesin their effort of cost cutting and layoffs. This means essentially that the two companies aim at reviving themselves the old, traditional way adding perhaps an edge of efficiency, leanness and flair of cautiousness in these new realities or do they offer a radical shift, a ideological quantum leap enabling reconstruction of an automotive industry that befits well the expectations, technological progress and strategic vision inherent in the 21st century?

GM and Chrysler so far seem to have chosen what is best characterised by Albert Einstein’s saying, “You can never solve a problem on the level on which it was created.”

Below is an illuminating piece on what (six) mistakes were made by Detroit industries during the 20th century from Umair Haque, one of visionary thinkers on this aspect. These errors, while allegedly bringing automobile industry to their knees in the 21st century, were largely paralleled, ideologically, by other mainstream industries of the 20th century.

1. Old rule: Choose evil. Industrial era business is unrepentantly and almost sociopathically evil: shifting costs onto others, while striving to internalize benefits. Detroit chose lobbying, marketing wars, and low-cost hardball – to always and everywhere try to socialize costs and privatize benefits. Never was this truer than Detroit’s lobbying against public transport throughout the 20^th century. Why does public transport in the States suck? Because Detroit’s lobbying machine doesn’t.

New rule? Choose good. In the 21^st century, every moral imperative is also a strategic imperative:doing good – for customers, employees, suppliers, or society – is a radical strategic choice that unlocks new pathways to innovation and growth. The opportunity cost of defending evil for Detroit was never learning how to choose good – and that’s a crucial mistake other auto players didn’t make. Tata chose to make a car that was accessible to the world’s poor. Porsche and BMW chose to invest in talent, people, and imagination. Honda and Toyota chose to invest in renewables and partnerships with the public sector. All opened new avenues to growth for an industry at the brink of extinction.

2. Old rule: Selfishness is self-interest.What’s strategic is supposed to be what’s in the firm’s self-interest. But how do we define self-interest? Consider for a second the fact that as recently as this year, Detroit’s lobbyists were hard at work, opposing stricter fuel efficiency standards. That’s 20^thcentury self-interest at its finest – not authentic interest for one’s own long-run outcomes, but simply a childlike selfishness, both myopic and narrow, where cutting off the nose to spite the face is as rational as mutual nuclear annihilation.

New rule? Purpose is self-interest. The 21^stcentury demands a more enlightened self-interest: one factoring in a longer timescale, fuller contingencies, and an honest and broad consideration of hidden and unintended consequences to people, society and the environment. When we understand all that, have begun to develop a purpose – a way in which we will change the world radically for the better. By confusing selfishness with self-interest, Detroit vaporized it’s own purpose – and will stay trapped in a wilderness of economic meaninglessess until it rediscovers it.

3. Old rule: Maximize destructiveness. The goal of orthodox strategy is to destroy the ability of others’ to imitate or commoditize you. And Detroit was a master of the art of destructive strategy: patenting, trademarking, and litigating; playing hardball to control distribution channels, defending brands with disproportionately steep marketing investment, and building entire new marques to gain share in key markets and segments. The point of all these tired, stale 20^th century strategic moves was the same: strategy as an exercise in exclusion, isolation, and barrier-building.

New rule? Get constructive. True 21^st century businesses can be judged in the blink of an eye: how intensely do they put the “co” in constructive? Can they let demand spark and fuel co-creation, can they co-produce from a pool of shared resources, are they capable of letting value activities be co-managed, are they tuned to cooperate? Detroit can’t get constructive because it’s spent the better part of a century playing the games of destructive strategy.

4. Old rule: Seek differentiation. When is a Jaguar really just a Ford? When it’s an S-Type. Under Alfred Sloan, GM famously organized itself divisionally – Pontiac, Buick, Cadillac… – for the sole purpose of differentiation. But industrial era differentiation is too often just skin-deep: the same lemons with slightly different marketing, distribution, and branding. So why pay a steep premium for a Buick if it’s just a Chevy with slightly nicer trim? Detroit discovered the hard way that in the 21^st century, the concept of differentiation is increasingly stale.

New rule? Seek difference. Ultimately, the problem is simple: differentiation is about perception. Difference is about reality. People in the 21^stcentury aren’t the zombified, braindead consumers of the 20^th century. And so the 21^st century demands not mere differentiation – a bean counters’ eye view of the world if ever there was one – but true difference. True difference is built by making different choices from the ground up – different in the very essence of the value activities that make the wheels of production and consumption spin. Porsche and BMW strove for difference – not mere differentiation – and it is that choice that is at the heart of their global leadership of the automotive sector.

5. Old rule: Seek agility. Strategy is in many ways simply the avoidance of crisis – the evasion of threat, weakness, and vulnerability. The goal of strategy as the avoidance of crisis is simple: agility. Industrial-era corporations seek agility, in other words, by insulating themselves from real-world economic pressures – that’s what Detroit did bar none, by always seeking to game the system: lobbying, marketing, and wheeling-and-dealing it’s way straight into oblivion.

New rule? Seek crisis. By insulating themselves from real-world economic pressures, boardrooms also dilute and sap incentives for innovation and renewal. Detroit wasn’t innovating because the opportunity cost of strategy as gamesmanship was, ultimately, foregoing innovation itself. In the 21^stcentury, gamesmanship – and its attendant dilution of incentives – is a sure path to near terminal strategy decay. Forget Detroit – just ask big music, big pharma, or big food.

6. Old rule: Advantage happens against. Orthodox econ holds that it is through the pursuit of competitive advantage that corporations create the most value most quickly and reliably. And that’s a mistake Detroit made to the hilt. It sought a nakedly competitive advantage – against suppliers, dealers, consumers, and society alike. The result is an industry crippled by structurally antagonistic relationships with labour, buyers, suppliers, consumers, and society alike.

New rule? Advantage happens for. Competitive advantage against bears a striking resemblance to simply bullying. Bullying is easy: just as in the sandbox, any boardroom with market power can jack up margins by forcing others – buyers, suppliers, consumers, society – to bear costs. But if every corporation across the economy is playing that game, the economy’s just a game of musical chairs.

The logic of the market is predicated on the pervasive and obvious inequality of humans. No two people have the same scales of values, talents, or ambitions. It is this radical inequality, and the freedom to choose our own lot in life, that makes markets – division of labor, production and distribution of goods and services – possible. Our differences are reflected in our outcomes and results which are converted into market commodities/products/services. The latter we exchange for what we need/want but do not have.

In (most of modern) politics the ideological parallel is easily imitated. For example, system of voting is designed to replicate the market’s participatory features. In fact, it is a perverse distortion of the market system. In markets, you get the goods you pay for. If you don’t and there’s been a violation of contract, you have legal recourse. In voting, people are not actually purchasing anything but the politician’s word/promises, which is legally un-claimable. Furthermore, a politician has every incentive to lie, manipulate, or twist to produce the desired result.

“Politicians shake our hand before elections and our trust thereafter.”

Politics does not consider individuals. We are merely a tiny speck on the vast blob called “nation,” and what this blob “thinks” is only relevant insofar as it accords with a political agenda advantageous to the country and its friends. During elections – our one opportunity to feel ourselves important and involved in our country’s politics – we are asked to cast ballots for people we do not know (or know what they want us to know) because they make promises they are under no obligation to keep – or keep them if it advances their agenda, enlarges their purse or contributes towards another election term for them. What’s even worse, the voting gesture is pointless on the margin. The chances that any one vote will actually have an impact are so infinitesimally small as to be meaningless.

In markets, success means entrepreneurial talent or business acumen which translates into the ability to anticipate, create and serve the needs of the market. In politics, success means the ability to twist and manipulate public opinion so that enough fools (so regarded by politicians) reaffirm the politician’s power and ambitions. It takes special talents to do this, which are not cultivated in good families – read Machiavelli. In markets, most successful usually deserve the credit due to merit, hard work and shrewd vision. In politics, the most successful usually excel in art of acting,  (in best of cases) rhetoric  -  in recent years, we hardly have seen any – narrow-mindedness and self-aggrandizement.

A politician, according to Ambrose Bierce’s dictionary, is “an eel in the fundamental mud upon which the superstructure of organized society is reared. When he wriggles he mistakes the agitation of his tail for the trembling of the edifice. As compared with the statesman, he suffers the disadvantage of being alive.”

What about likes of Patrick Henry and George Mason? They wanted to separate (the American) society and government to protect the people from being manipulated by cunning political forces.  Albert Jay Nock was right to characterize a country, democratic or otherwise, as a parasite on society, whereas markets (especially those where innovation and entrepreneurship are common) and economic production represent lifeblood of (free/healthy) societies.

Politics and markets affect each other. When politics has an upper hand, life of common people gets worse. When markets have an upper hand, life of people gets worse as well.

Judge for yourself.

Apart from the loss of life of 1000 Palestinians and 13 Israelis and the vast destruction after 19 days of aerial bombardment, the Israeli invasion of Gaza has seemingly failed to achieve its strategic objectives, chief among which was to stop rocket fire from Hamas. The Palestinian resistance still seems to be quite functional – there is still rocket fire. So, what has been gained? Hamas has withstood the ferocious Israeli assault without knuckling under or making any concessions.

For Israel, the military campaign has been a public relations disaster. Photos on the internet of bloodied and dismembered children rushed off to make-shift hospitals or wrapped in their funereal shrouds has generated unprecedented sympathy for the plight of Palestinians. Israel has come across as a bully condemned by many international bodies including Red Cross and Human Rights Council. On top of that, Jerusalem Post reported that Sephardi chief rabbi Mordechai Eliyahu had written a letter to PM Olmert informing him that “all civilians living in Gaza are collectively guilty for Kassam attacks on Sderot….Eliyahu ruled that there was absolutely no moral prohibition against the indiscriminate killing of civilians during a potential massive military offensive on Gaza aimed at stopping the rocket launchings.”

Besides, it deserves a consideration that Israel’s economy has been on a downturn and started feeling consequences of the global economic recession. It has been ordering closure of chemical and other plants, some of them producing military-related materials and equipment.

Hamas chief Meshaal knows well that Israel doesn’t want to reoccupy Gaza. He also knows that DM Ehud Barak doesn’t want to be bogged down when elections roll around in few weeks – current advance of Israeli forces to suburbs of Gaza city is mostly due to increasing pressure from the PM Ehud Olmert who wants to put an end to what he sees as military capacity of Hamas. Initially, Israel was hoping to rout Hamas quickly and install Abbas’s PA security guards at the Rafah crossing, but now they’ve hit a glitch and the battle is starting to look like a quagmire, with Israelis increasingly reluctant to go deep into the city in fear of incurring significant casualties and where artillery and air force will only be able to have very limited operations.

And let us not forget the cost of Gaza war, estimated to be around NIS 2.4 billion (620 million USD) two weeks ago, 1.3% (a huge number considering the time length) of the annual GDP estimate of NIS 186 billion in 2007. And this was before the major callup for reservists and advance into the suburbs of Gaza.

And still as of yesterday there were reportedly 25 mortars and rockets fired into into southern Israel.

What about Obama’s administration in matters related to the Middle East? A report in the IHT says that the people who are most likely to play significant roles on the Middle East in the Obama administration are “Dennis Ross (the veteran Clinton administration Mideast peace envoy who may now extend his brief to Iran); Jim Steinberg (as deputy secretary of state); Dan Kurtzer (the former U.S. ambassador to Israel); Dan Shapiro (a longtime aide to Obama); and Martin Indyk (another former ambassador to Israel who is close to the incoming secretary of state, Hillary Clinton).” The only difference between this group of pro-Israel hawks and the Bush claque is that they are more adept at creating the illusion of a “peace process.” Other than that, the differences are negligible.

And there are already reports that Israel is going to receive an unusually large weapons shipment from the US. Is this a sign of a weakening military capacity of Israeli military, a strain on their budget or a resolution to proceed with military campaign until the complete eradication of Hamas?

And what about Hamas itself? In name of protection of its own people, as it loudly claims, it brought not only the wrath of Israeli air force but the entire might of Israeli artillery and ground forces deep into the Gaza city. Perhaps the Israeli allegations of Hamas fighters intentionally using innocent civilians as cover are exaggerated, but BBC’s Gaza correspondent and many other eyewitness accounts tell of Hamas fighters launching RPGs and bombs on Israelis from rooftops of densely populated buildings and from nearby hospitals, without reflection of possible Israeli retaliation and casualties entailed. Israelis claim to only fire on those who fire on them. If a grenade is thrown at them from around a corner of an inhabited building, they fire on the building…

Israel is the bully and the aggressor but no finger points at Hamas’s own “losing” tactic which brings nothing but death and havoc upon its own people, without themselves coming even close to their aspired goals, leaving for the moment aside the morality, righteousness and other aspects thereof.

And Meshaal? A coward hidding in Damascus…Afraid to come out of his safe-house (whom Mossad attempted to assassinate some 12 years ago), he is only as good as a violent but short wind, which blows and passes without any longterm consequences. He talks, only…

It is perhaps time that someone, a Palestinian in particular, pointed a finger at Hamas and questionned their goals and most importantly their means of achieving them.

Anyhow, as one Israeli settler leader recently argued during a conversation with a visiting American peace activist that ‘if it was right to commit genocide during Biblical time, why can’t it be right to commit genocide now. Has God changed his mind,’ the settler wondered sarcastically.”

China, China, China… All global issues of concern as well as hopes and aspirations for “next big thing” find themselves to one extent or another expressed, influenced by or influencing this country.

Environmental awareness has been steadily gaining prominence ever since we have started exploring the outer space, and thus gaining a bird’s eye view of our planet. With this increasing awareness we came to realize that human intervention in the natural cycles of our planet in such a way as to tip the balance. Henceforth,  with the dawn of New Age and emergence of theories such as Gaia, and glaring affect of (human activity emitted) greenhouse gazes (and subsequent effect of global warming causing gradual increase in average temperatures) on the homeostasis of our planet, we are more than ever before aware of the environment we live in.

China has been at the forefront of global economic and industrial boom witnessed by the 20th century. Its economic and industrial expansion and impact it had on global economy, politics and climate cannot be overstated. Especially in matters of (negative) environmental impact, China stands above others by being considered the world’s bigger polluter recently overtaking the US. CFR has a comprehensive summary of issues, which contribute to environmental crisis not only in China but, due to its sheer size and energy-related policies, have a huge environmental impact around the world.

China’s heady economic growth continued to blossom in 2007, with the country’s gross domestic product (GDP) hitting 11.4 percent. This booming economy, however, has come alongside an environmental crisis. Sixteen of the world’s twenty most polluted cities are in China. To many, Beijing’s pledge to host a “Green Olympics” in the summer of 2008 signaled the country’s willingness to address its environmental problems. Experts say the Chinese government has made serious efforts to clean up and achieved many of the bid commitments. However, an environmentally sustainable growth rate remains a serious challenge for the country.

What are some of China’s major environmental challenges?

Water. China suffers from the twin problems of water shortage and water pollution. About one-third of China’s population lacks access to clean drinking water. Its per-capita water supply falls at around a quarter of the global average. Some 70 percent of the country’s rivers and lakes are polluted, with roughly two hundred million tons of sewage and industrial waste pouring into Chinese waterways in 2004. As part of its effort to harness the nation’s water supply, China has a large dam-building program with over twenty-five thousand dams nationwide–more than any other nation. The dam projects are not only a high cost in terms of money, but also in farmland loss, ecological damage, and forced migration of millions of people, says the Woodrow Wilson Center’s Jennifer L. Turner, director of its China Environment Forum, in a report for the Jamestown Foundation.

Land. Desertification in China leads to the loss of about 5,800 square miles of grasslands every year, an area roughly the size of Connecticut. The Worldwatch Institute, an environmental watchdog and research organization, reports that excessive farm cultivation, particularly overgrazing, is one of the leading causes of desertification. The cultivation stems from a policy followed from the 1950s to the early 1980s that encouraged farmers to settle in grasslands. As the deforestation grows, so do the number of sandstorms; a hundred were expected between 2000 and 2009, more than a fourfold increase over the previous decade. Desertification also contributes to China’s air pollution problems, with increasing dust causing a third of China’s air pollution.

Greenhouse gases. In 2008, China surpassed the United States as the largest global emitter of greenhouse gases by volume. (On a per capita basis, however, Americans emit five times as much greenhouse gas as Chinese.) The increase in China’s emissions is primarily due to the country’s reliance on coal, which accounts for over two-thirds of its energy consumption. It contributes to sulfur dioxide emissions causing acid rain, which falls on over 30 percent of the country.

Population and development. China’s inhabitants number more than 1.3 billion. The country’s growing economic prosperity and rapid development mean increasing urbanization, consumerism, and pollution. One example of this can be seen in car production: As Kelly Sims Gallagher notes in her book, China Shifts Gears, China produced 42,000 passenger cars in 1990. By 2004, the number hit one million, with sixteen million cars on China’s roads. By 2000, motor vehicles were the leading cause of China’s urban air pollution, though China adheres to stricter mileage standards than the United States.

What has China done to improve the situation? Read here..

It is not yet clear as to how the recent economic recession will affect this equation.

The most important prerequisite of social stability and economic development in a country or region is political stability and good governance. In times of strives, conflicts and wars, the only priority for the society and its people is a day-to-day survival and struggle for achievement of piece. Every other matter has a lesser priority… Maslow’s Pyramid, that is.

“What is the use of a house if you haven’t got a tolerable planet to put it on?”  – Henry David Thoreau

While the immediate reaction and focus of any potentially conflict-rich situation is leave aside other concerns besides security and peace, it must be nonetheless stressed that such situations result mostly from social, cultural, economic or plain human-nature specific reasons. Greed, egoism, arrogance, self-indulgence. These are human traits common to individuals. What is not common and desirable is when they mould into a group-think and become directed towards an end at the detriment of moral values and traditions of a society.

History is a witness to a great number of wars that have started as a result of scarcity of resources. Water, land and natural resources attracted greedy and powerful in their quest for self-fulfillment and enrichment like magnet attract metal. Wars ensued; innocent people died; lands were plundered.

Three-quarters of all wars since 1945 have been within countries rather than between them, and the vast majority of these conflicts have occurred in the world’s poorest nations. Wars and other violent conflicts have killed some 40 million people since 1945, and as many people may have died as a result of civil strife since 1980 as were killed in the First World War. Although the number of internal wars peaked in the early 1990s and has been declining slowly ever since, they remain a scourge on humanity. Armed conflicts have crippled the prospect for a better life in many developing countries, especially in sub-Saharan Africa and parts of Asia, by destroying essential infrastructure, decimating social trust, encouraging human and capital flight, exacerbating food shortages, spreading disease, and diverting precious financial resources toward military spending.

Although there is no single cause of strife or war, a growing number of scholars suggest that rapid population growth, environmental degradation, and competition over natural resources play important causal roles in many of these conflicts. Recent quantitative studies analyzing the correlates of internal and external wars from the 1950s to the present indicate that population size and population density are significant risk factors. In terms of environmental factors, recent statistical work indicates that countries highly dependent on natural resources, as well as those experiencing high rates of deforestation and soil degradation, and low per capita availability of arable land and freshwater, have higher-than-average risks of falling into turmoil. In short, many researchers now conclude that it is impossible to fully understand the patterns and dynamics of modern conflicts without considering their demographic and environmental dimensions.

The past century witnessed unprecedented population growth, economic development, and environmental stress, changes that continue to this day. From 1900 to 2000 world population grew from 1.6 billion to 6.1 billion. Since 1950 alone 3.5 billion people have been added to the planet, with 85% of this increase occurring in developing and transition countries. Worldwide population growth rates peaked in the late 1960s at around 2% a year, but the current rate of 1.2% still represents a net addition of 77 million people per year.

Such rapid demographic and economic changes over the past century have placed severe and accelerating pressures on natural resources and planetary life-support systems. The traditional Malthusian notion that exponential population growth alone drives strains on the environment has long been refuted; no serious thinkers, including neo-Malthusians, now maintain that human-induced environmental changes are a mere function of numbers. Rather, neo-Malthusians argue that the relationship between population growth and the environment is mediated by consumption habits, and by the technologies used to extract natural resources and provide goods and services.

Neo-Malthusians cite the 1969 war between El-Salvador and Honduras as a classic example of a scarcity induced conflict. The conflict became known as the Soccer War and lasted only 100 hours, during which several thousand people died on both sides. One of the main causes of this war was the scarcity of arable land. The sources of the shortage were population growth, erosion and unequal land distribution. A similar scarcity of arable land resonated in the minds of Ethiopians when their then Emperor Haile Selassie was ousted in 1974. The provisional Ethiopian government, the Dergue, failed to improve conditions resulting in large migrations of Ethiopians into a contested region on the Somali border, which in turn precipitated the Ogaden War of 1977. The scarcity of arable land was also a contributing cause of the violent dispute between Senegal and Mauritania in 1989. The conflict focused on Senegal River, which demarcated the border between the two. In this case, it was shown that the cause of land scarcity was population growth and desertification, along with lack of adequate quantities of fresh water.

Numerous signs suggest that the combined effects of unsustainable consumption, population growth, and extreme poverty are taking their toll on the environment. More natural resources have been consumed since the end of the WW2 than in all human history to that point. The consumption of nonrenewable resources has significantly increased, although it has risen at a slower rate than population and economic growth as a result of changes in technology. The global consumption of fossil fuels (which account for 77% of all energy use) in 2003 was 4.7 times the level it was in 1950.

“Many of the wars of the 20th century were about oil, but wars of the 21st century will be over water,”  – Ismail Serageldin,  Director of the Bibliotheca Alexandrina and former World Bank Vice President

In the eyes of a future observer, what will characterize the political landscape of the Middle East and North Africa? Will the future mirror the past or, as suggested by the quote above, are significant changes on the horizon? In the past, struggles over territory, ideology, colonialism, nationalism, religion, and oil have defined the region. While it is clear that many of those sources of conflict remain salient today, future war in the Middle East and North Africa also will be increasingly influenced by economic and demographic trends that do not bode well for the region.

By 2025, world population is projected to reach eight billion. As a global figure, this number is troubling enough; however, over 90% of the projected growth will take place in developing countries in which the vast majority of the population is dependent on local renewable resources. For instance, World Bank estimates place the present annual growth rate in the Middle East and North Africa at 1.9% versus a worldwide average of 1.4%. In most of these countries, these precious renewable resources are controlled by small segments of the domestic political elite, leaving less and less to the majority of the population. As a result, if present population and economic trends continue, many future conflicts throughout the region will be directly linked to what researchers term “environmental scarcity”— the scarcity of renewable resources such as arable land, forests, and fresh water.

August 2006. Although hostilities between Hezbollah and Israel had been raging for nearly a month, both sides waited for a green light from the Organization of the Islamic Conference (OIC) special session on 3 August in Malaysia before demanding an United Nations Human Rights Council (UNHRC) special session on Lebanon. There was no debate, elaboration or explanation. The special session represented a series of monologues and declamations in complete isolation from the outside world. The passed resolution condemned Israel unilaterally without the least reference to Hezbollah attacks on civilian targets in northern Israel. Only a paragraph added by Pakistan to the initial draft urged all the parties involved to respect the rules of international humanitarian law.

This was not the end of the story. The HRC session was held the same day that the Security Council (SC) was adopting the resolution 1701 calling for a cessation of hostilities (in a glaring breach of Article 12 of the UN Charter, which forbids the GA to make recommendations w.r.t. a dispute at hand while the SC is holding a session about that dispute).

Issues related to human rights have historically been (mis)interpreted and disregarded during the entire human history, but the WW2 was the last straw. The idea, shortly after the inception of the UN, to establish an international body, United Nations Commission on Human Rights (UNCHR), responsible for monitoring and reporting on human rights issues prompted all the nations assembled in 1948 for a GA session to sign a founding text, the Universal Declaration of Human Rights, arguably the Most Translated Document in the world. One of its main architects, the French jurist René Cassin, had to fight for the declaration to be “universal “and not just “international.” He thought that the suffering of victims is the same everywhere. The Declaration was drafted not only by European jurists but also a Lebanese diplomat, a Chilean, and a Chinese academic, Peng-chun Chang.

Ever since its creation, the Commission has seen a mounting criticism not only for its obtusely bureaucratic practices but also for the composition of its membership. In particular, several of its member countries (Sudan, Saudi Arabia, PRC, Pakistan, Vietnam) themselves had dubious human rights records, including states whose representatives have been elected to chair the commission (Lybia in 2003). Another criticism was that the Commission did not engage in constructive discussion of human rights issues, but was a forum for politically selective finger-pointing and criticism. The desire of states with problematic human rights records to be elected to the Commission was viewed largely as a way to defend themselves from such attacks.

In 2005, Kofi Annan admitted that the commission has “cast a shadow on the reputation of the UN system as a whole.”

There was also the problem of the exploitation and sexual abuse of refugees. It was bad enough that UN “peacekeepers” were notoriously unable to protect women in UN camps in western Sudan. It was even more deplorable that UN peacekeepers themselves were part of the problem. In 2004, Kofi Annan finally admitted that there were 150 allegations of abuse by UN peacekeepers and staff in the DR Congo, including UN military and civilian personnel from Nepal, Tunisia, South Africa, Pakistan, and France. The victims were defenseless refugees — many of them children — already brutalized by years of civil strife and war.

Finally, UN attitude toward some of the most important defenders of human rights – the charities and faith-based groups – might seem weird to the uninformed. Most of the UN’s favorite NGOs use international rulings to overturn democratic protections in their home countries. The UN vision of civil society, in other words, seems to be a penumbra of activist groups that simply endorse its agenda of centralized economies, large welfare states, and massive social engineering.  Many function simply as front groups for despotic and totalitarian governments such as Cuba and Saudi Arabia.  On the other hand, organizations that work to assist AIDS orphans, eradicate human trafficking, curb prostitution, or defend religious liberty don’t get much air time.

The UNHRC was established in 2006 to replace the discredited UNCHR. Despite minimal safeguards against capture of the HRC by human rights abusers, HRC supporters, including UN High Commissioner for Human Rights Louise Arbour, were quick to declare that the new body represented the “dawn of a new era” in promoting human rights in the UN. Noteworthy to mention that the US was one of only four countries that voted against the GA resolution that created the Council.

But the hopes placed in the UN’s new guard dog were quickly dashed. When the first council was elected in May 2006, its members included countries in which the death penalty, torture, impunity, arbitrary detention and denial of basic rights seem to be essential components of their societies. The UN put Algeria, Saudi Arabia, Azerbaijan, Bangladesh, China, Cuba, Nigeria and Russia in charge of defending the Universal Declaration of Human Rights. The machinery was still brand new but it was already beginning to squeak. Some of teh other inadequacies and short-sighted decisions concerning the creation, membership and structure of the Council included:

• The Council has no criteria for membership other than geographical representation.
• The Council has no criteria for membership other than geographical representation.
• The resolution set a higher bar to suspend a HRC member—a vote of two-thirds of the General Assembly—than the simple majority necessary to win a seat.
• The Council is only marginally smaller than the Commission, from 53 members to 47.
• While the Council is charged with conducting a universal periodic review, the conclusions of the review would not prevent those countries found complicit in human rights violations from participating in the Council.

In less than two years, the council has terminated the mandates of its independent experts – only UN officials who escape the dictates of a government – in charge of monitoring the situation in Cuba, Belarus and even DR Congo, where the recent years have witnessed mass killings and flood of refugees. The Council also refused to appoint an expert for Turkmenistan, one of the most oppressive regimes in the world.

In the meantime, China, Uzbekistan, Russia and others have been maneuvering behind the scenes and struck deals to ensure that their and their allies’ interests would be safeguarded. Votes are not cast according to the seriousness of the situation in a country but according to the possible advantages that the country or its allies can offer in return. China is the champion in this game. Using its enormous economic power, it ensures that it is systematically supported by countries on whom it lavishes loans, subsidies and other material and economic advantages.

Meant to defend the universality of values, the UNHRC has so far tackled human rights issues, even the most appalling of violations, in a little better than a condemnable manner.

In 1944 at UN currency and finance conference at Breton-Woods, which aimed to redress the shattered post-war world economy, the economists have agreed that any monetary unit in the world should be backed with gold. But this resurrected gold-standard system ended in 1973 (with hugely devalued dollar) and has declared special drawing rights (SDR) in International Monetary Fund (IMF) –  SDR as world money. SDR became an international accounting unit with US dollar kept as the important currency. No one then thought to come back to any gold backed currency again. Money re-established itself again as a commodity.

Ever since,  investors known as gold bugs snapped up the metal and socked it away, betting that a colossal economic crisis would one day slam financial markets and send gold prices through the roof.

For many investors, that grim scenario is in full swing, except for one thing. After briefly hitting $1,000 an ounce, gold has fallen into a rut and shows no sign of budging anytime soon. Gold’s failure to flourish despite broad financial carnage has disappointed many of its champions. Others say it’s simply in a lull and is ripe for another big surge. But most gold buyers agree that the metal’s lackluster performance lately has been surprising.

So what happened? As the financial crisis pummels financial markets around the globe, hedge funds and other large investors who drove gold to dizzying heights earlier this year are now racing to unwind those positions to raise cash and cover huge losses. The massive deleveraging has pounded other commodities from crude oil to corn to copper.

“Gold is being pulled down by indiscriminate selling of virtually every asset,” says Jeffrey Nichols, managing director of American Precious Metals Advisors. “You could call it collateral damage.”

Instead of gold, investors are pouring money into the newest safe-haven asset, cash, pushing the dollar to multiyear highs against the Euro and the pound, hurting demand for gold among investors who buy the metal as a safe haven against inflation. Economists now warn that a world economic slowdown could bring about massive deflation of the world’s main currencies, or a sustained period of falling prices, and it’s unclear how the metal will respond in long-term. However there is some evidence that gold prices reached a turning point, a threshold, which may turn around its recent decline.

“Gold hasn’t been tested in a true deflationary crisis, so we don’t know what will happen to prices,” says Jon Nadler, precious metals analyst with Kitco Bullion Dealers Montreal.

In paralell, since 1996, another milestone event twisted the “gold vs. money” story even further. With advent of the Internet in 1994, online communication, business and information sharing has been exponentially gaining ground. Year 1996 saw birth of E-gold. The idea was simple. People would eventually believe in electronic money and use it more willingly if the money was provided/backed with gold. The funds on account of E-gold system convert in this metal by default. The payment system also provides an opportunity to back money on the account by other precious metals, such as silver, platinum and a palladium.

The history of e-gold payment system development is only twelve years old, however the company has already passed a way from conceptual idea of payment system to world service governed by American company Gold and Silver Reserve, Inc. Its one day turnover around $1500000. Such popularity is caused by the fact that in case of becoming an e-gold system user, a physical or legal person has an opportunity to perform an effective financial operations and calculations, because after funds transfer a simple redistribution of the rights to precious metal occurs while its physical location does not change. According to Gold and Silver Reserve, Inc. the e-gold gold reserves are in Brink’s Global Services, Transguard Security Services and MAT Securitas Express AG storehouses. It’s interesting to note that e-gold system isn’t tied to any currency and works with eternally liquid metals. This allows anyone to open an account free of charge. This democratic approach attracts to e-gold about 2500 accounts every day. As of July 2008, e-gold claims to host more than 5 million accounts. However, e-gold not only proved to be a favorite target of hacker attacks, but in December 2005, the US government froze its bank accounts and assets (cancelling freezing measures due to absence of inculpatory evidence one month later) and in July 2008 its directors pled guilty to charges of “conspiracy to engage in money laundering” and the “operation of an unlicensed money transmitting business.”

Nonetheless, there are optimists who are “confident that a regulated e-gold rebuilt to a more systematic specification will be less hospitable to criminals, and more attractive to mainstream business use without being less accessible to those disregarded by legacy payment systems.“

Continuing from the previous post about failures of Republican party during recent years, here is a brief (and not exhaustive) account of “wrongs” done by Republicans in matters related to homeland security,  civil rights and environmental issues.

Homeland Security

• Assault Weapons Ban (Clinton Gun Ban of 1994): Startng in 2004, Republicans refused to extend the ban on purchasing assault weapons (supposedly for reasons, including the fact that federal, state and local law enforcement agency studies showed that guns affected by the ban had been used in only a small percentage of crime, before and after the ban was imposed).  From 2005 on, Senate Democrats attempted to pass legislation that would have reauthorized the ban; however, the Republican-controlled Senate refused to allow the measure to come to the floor for a vote; only in June 2008, Assault Weapons Ban Reauthorization Act of 2008 was re-introduced and has since been referred to the Subcommittee on Crime, Terrorism, and Homeland Security, pending further action;

• COPS: Community Oriented Policing Services (COPS) is allegedly one of the most successful law enforcement programs in American history.  However, since the Republicans assumed the majority, since 2006, President Bush and the Republican-controlled Congress have opposed it, with Bush proposing cutting its funding to about $32 million in 2007 from the roughly $500 million in 2006. And yet another similar streak in community-oriented services came as Bush reduced Violence Against Women budget funding by $105 million for 2008;

• National Guard: The National Guard have seen their role dramatically increase since the terrorist attacks of September 11, 2001, and now play key roles in homeland security efforts in addition to their state and US military responsibilities (key duties include flying combat air patrols, guard ports and waterways, and respond to chemical, biological, and nuclear incidents). Bush administration however failed firstly to recognize this additional strain and refused to provide adequate funding and equipment for it;

• First Responders:  Republicans refused to restore full funding to a number of local law enforcement programs Bush’s budget has cut, including the Byrne Memorial Grant Program, Local Law Enforcement Block Grant (LLEBG), Community Oriented Policing Services (COPS), Staffing for Adequate Fire and Emergency Response (SAFER), and Firefighter Investment and Response Enhancement (FIRE) Act.  First responders are the first line of defense against terrorist attacks, and the first on the scene after an incident.  The failure to restore full funding for these programs means that first responders remain understaffed, under-equipped, and under-trained for their terrorism prevention and response roles;

• Chemical Security:  Republicans failed to pass legislation on chemical security of America enhancing security against terrorist attacks on plants and factories dealing with and storing chemically hazardous materials.  There are mroe than 100 chemical plants in America that, if attacked, could cause death and injury of more than one million people;

• Nuclear Security: Republicans have consistently failed to pass adequate legislation that would increase training and security to protect against terrorist attacks on American nuclear power plants.  Republican policies on nuclear security were vague at best and fictional in wost cases. In 2005, a study of Rep. nuclear-related policies (“Maintaining Nuclear Deterrence in the 21st Century”) conducted by Federation of American Scientists found that Republican policies either exaggerate needs or underestimate threats on a score of nuclear defense and security issues. In 2006, Government Accountability Office (GAO) found that 65 nuclear plants are not adequately protected from terrorists attacks;

• Interoperable Communications: Republicans blocked attempts at making critical investments in interoperable communications for first responders, despite the fact that the 9/11 Commission identified communications interoperability as a key priority for homeland security, noting that “the inability to communicate was a critical element at the World Trade Center, Pentagon, and Somerset County, Pennsylvania, crash sites, where multiple agencies and multiple jurisdictions responded.  The occurrence of this problem at three very different sites, is strong evidence that compatible and adequate communications among public safety organizations at the local, state, and federal levels remains an important problem.”

Civil Rights

• Hate Crimes: Republicans have consistently rejected addition of gender and sexual orientation to federally protected categories under hate crimes law. According to the survey conducted by the Department of Justice,  approximately 84% of hate crimes and only 23% of non-hate crimes were violent offenses. In 38% of hate crimes, victims were raped, robbed, injured, or threatened with a weapon. Only 12%  of crimes not based on hate of the victim reached this level of seriousness. ;

• Immigration Reform: Republicans failed to pass comprehensive immigration reform, despite widespread acknowledgement that American immigration system in broken. Reps had simply kept on putting away the immigration issue by pointing at border security problems.

Energy and Environment

• Environmental Protection: Notwithstanding the existence of Republicans for Environmental Protection (REP),  Republicans failed to stop Bush Administration efforts to continue weakening current environmental laws (“cap and trade” rule for power plants) and have failed to provide critical funding for environmental protection and natural resources programs, including clean air, clean water (stopping Clean Water Act protections), land acquisition, and urban parks. Bush now tries to rush its own environmental changes, which do not even include cuts on climate-warming greenhouse gas emissions;

• Environmental Law Enforcement: Republicans have refused to conduct constructive oversight of the severely weakened environmental enforcement programs at the Department of the Interior and the Environmental Protection Agency (EPA).  In 2004 alone, Bush administration agencies made more than 150 actions that weakened our environmental laws. Over the course of his first term, this administration led the most thorough and destructive campaign against America’s environmental safeguards in the past 40 years. And just in a month time, Bush plans to make a Christmas Gift to oil companies;

• Roadless Areas: The Bush administration’s proposal replaced the scientifically supported rule proposed by the Clinton to protect remaining roadless areas that drew a record 2.5 million public comments in its favor. And again, just before the end of his term, Bush is pushing a similar action for Colorado’s wide swaths of relatively unscathed national forest to be accessible to motorized vehicles, allowing incursion by logging companies, oil and gas drilling, etc.;

• Wildlife/Sensitive Areas: While failing to protect federal lands set aside as wildlife refuges, Republicans sell/lease increasingly wildlife or otherwise environmentally sensitive and protected areas for business initiatives or oil and natural gas exploration, like the recent proposal for Utah;

• Toxic Waste Cleanup and Pollution: Republicans have failed to provide necessary funding to clean up toxic waste sites.  One in four Americans lives within four miles of a toxic waste site.  In 2004 and 2005, the EPA requested $150 million increases in the Superfund budget, but “Congress did not have any interest in increasing the funding,” says Betsy Sutherland, Superfund’s director of assessment and remediation.;

• Science: Republicans have consistently manipulated and suppressed scientific analysis to support their ideological/dogmatic goals. Many of the details – Barry Goldwater’s anti-intellectualism, through Ronald Reagan’s sympathy for creationism and Newt Gingrich’s passion for science “skeptics,” on through the present day, Republicans have shown a marked preference for politically inspired fringe theories over the findings of long-established and world-renowned scientific bodies – can be found in Chris Mooney’s book;

• Climate Change: Republicans refused to act to reduce greenhouse emissions (one of major recent attempts being Lieberman-Warner bill).  Carbon dioxide emissions from energy use rose by 1.6% in 2007, according to preliminary estimates by  Energy Information Administration (EIA). Electricity generation increased by 2.5%, and carbon dioxide emissions from the power sector increased even more, at 3%, indicating that US utilities shifted towards energy sources that emitted more carbon. NASA’s analysis of global temperature records found that surface temperatures have been increasing by an average of 0.2 °C every decade for the past 30 years. “Further global warming of 1 °C defines a critical threshold. Beyond that we will likely see changes that make Earth a different planet than the one we know,” said one of the authors of the analysis;

• Sustainable and Secure Energy: Republicans have been opposing a renewable portfolio standard and any legislation to save substantial amounts of imported oil.  They also failed to ensure that energy speculators are not manipulating prices and that consumers are not being gouged at the pump.

Finally, I have to write another blog solely devoted to American foreign policy exploits under Republicans including Iraq and Afghanistan.

America’s most critical priorities – emergency preparedness, economic security, access to affordable health care, quality education, and energy independence – have become an afterthought in the wake of recent years of Republican culture and domestic as well as foreign politics.

Let’s take a 360-degree look at it in two parts (part one tackling economic issues, health care and education while part two will cover civil rights, homeland security and environmental policies of Republicans).

Economic Security

• Budget Deficit: Republicans have run up historic budget deficits, minimum government, and low interest rates.  The annual US budget deficit declined from $318 billion in 2005 to $162 billion in 2007, but increased to $455 billion in 2008;

• Overtime Pay: Bush administration changed the rules that decide who is eligible for overtime pay. The changes affected some eight million workers. Millions of working people now face unpredictable work schedules and reduced pay because their employers may not have to pay a premium for demanding that they work more than 40 hours a week. Wages have declined, even as the cost of health care, child care, and other essential expenses has continued to climb;

• Minimum Wage: For the eighth year in a row, Republicans have failed to raise the minimum wage.  Minimum wage employees working 40 hours a week, 52 weeks a year, earn $10,700 a year, $5,000 below the poverty line for a family of three.  It is practically impossible for minimum wage workers to afford adequate housing in any area of the country;

• Tax Credits For Employers of Reservists: Republican policies render employers reluctant to take military reservists (who can be called for 24 months at a time) on the payroll by having blocked attempts to introduce policies of rewarding businesses that continue to pay salaries to their employees serving oversees.

Health Care

• Health Care: Health care costs have had unprecedented increases during recent years; premium and prescription drugs chief among those.  Premiums for employer-sponsored health insurance rose an average of 6.1% in 2007, less than the 7.7% increase reported last year but still higher than the increase in workers’ wages (3.7%) or the overall inflation rate (2.6%), according to the 2007 Employer Health Benefits Survey;

• Covering the Uninsured: The number of uninsured Americans dipped slightly last year – from 47 million to 45.7 million – but many experts say the number still signals a crisis in America;

• Stem Cell Research: Funding restrictions, imposed by President Bush (who used his veto), are impeding promising research by preventing the use of federal funds on the best available stem cell lines;

• Mental Health Parity: Republicans blocked yet another bill requiring health insurers to cover mental illnesses at the same level as physical ailments.  This could have serious financial implications for nearly half of Americans suffer from a mental disorder at some point;

• Immigrant Children’s Health Care: Republicans have failed to enact the Immigrant Children’s Health Improvement Act (ICHIA), which would allow states to cover legal immigrant children and pregnant women under Medicaid and the State Children’s Health Insurance Program (SCHIP).  The current prohibition on covering these people unfairly singles them out for restricted access to public health coverage programs;

Education

• No Child Left Behind Funding: Republicans failed to fund No Child Left Behind (NCLB) education reforms.  Even though school districts are facing increasingly rigorous academic standards and new requirements for highly qualified teachers, Bush’s proposed funding for NCLB program in 2007 was $15.4 billion below the authorized level;

• Higher Education Act: Republicans partially reauthorized the Higher Education Act as part of budget reconciliation.  While the bill included some additional financial aid for students eligible for Pell Grants, the new aid fails to prioritize the neediest students and imposes new hurdles.  Republicans passed up on an enormous opportunity to make college more affordable, instead using saving from greater efficiency in the student loan program to partially offset the budget deficit and other expenses;

• Native American School Construction Funding: Republicans failed to address the $1.3 billion backlog in repairs for schools funded by the Bureau of Indian Affairs (BIA).  The consequence of this is that native American Indian and Alaskan students continue to attend classes in dilapidated and unsafe schools;

• Development, Relief, and Education for Alien Minors Dream Act: Republicans did not allow the Development, Relief, and Education for Alien Minors Dream (DREAM) Act to pass, which would allow states to offer in-state tuition to immigrant students and also allow long-time immigrants who grow up in the United States, graduate from high school, and demonstrate strong moral character, the opportunity to adjust their immigrant status.  Although the DREAM Act enjoys broad bipartisan support, Republicans failed to bring the bill to the Senate floor.

To be continued…

May 1945. The WW2 was over.

The shattered financial and industrial worlds were given band-aid remedies in guise of Bretton-Woods (giving birth to IBRD, World Bank and IMF). Soon enough, few new states emerged (Israel), few split apart (India and Pakistan) and in few, liberal discontents led the way eventually winding up with democratic governments (Egypt).

One socialist regime, based on narrow-minded dogmatic doctrines, emerged from WW2 as one of the two strongest nations in the world. This nation had not only a large conventional military base, but was also in the middle of developing its own nuclear weapons (first tested in 1949).

The other victor of WW2 became a superpower not least due to the war itself. It advocated neatly idealistic doctrines, had a constitution spelling out loud the commitment to highest social and moral values, respect for human dignity and equality and adherence to human rights and law.

The first General Assembly of the United Nations met in London in January 1946, and created the United Nations Atomic Energy Commission. Part of their charge was to eliminate all weapons of mass destruction, including the atomic bomb.

America’s first effort to define a policy on the control of atomic energy was Acheson-Lilienthal report (1946). Its premise was that there should be an international “Atomic Development Authority” which would have worldwide monopoly over the control of “dangerous elements” of the entire spectrum of atomic energy. Drawing heavily on the information in the report, the US proposal (July 1, 1946) to the United Nations on international controls on nuclear material (named the Baruch Plan) was presented. It called for the establishment of an international authority to control potentially dangerous atomic activities, license all other atomic activities, and carry out inspections.

The Soviets rejected the Baruch Plan, since it would have left America with a decisive nuclear superiority until the details of the Plan could be worked out and would have stopped the Soviet nuclear program. They responded by calling for universal nuclear disarmament. In the end, the UN adopted neither proposal. Seventeen days after Baruch presented his plan to the UN, the US conducted the world’s first postwar nuclear test. Two atomic tests – code named “Operation Crossroads” – were conducted at Bikini Atoll in the Pacific. These tests explored the effects of airborne and underwater nuclear explosions on ships, equipment, and material. Almost 100 surplus and captured ships were used as targets, including the Japanese battleship Nagato (flagship of the attack on Pearl Harbor). These tests were witnessed by hundreds of politicians and international observers, and 42,000 military and scientific personnel. The two bombs used in Crossroads were identical in design and yield to the bomb used on Nagasaki. Crossroads put pressure on Soviets to pour significant amounts of money into research and development of their nuclear arsenal.

This is how the Cold War started. It had two main axes, which were usually typified by one or some of following doublets:

• Truman Doctrine and Marshall Plan vs. Marxism-Leninism-istic Stalinism

• Economic dimension of communism vs. capitalism

• Political dimension of communism vs. democracy

• West vs. East

USSR took on the challenge and a nuclear arms race, which became the determinant factor during the next 50 years, ensued. Nuclear race was followed and paralleled by development of strategic triad by Americans. This race got a new spatial dimension, when Soviets launched the Sputnik into orbit on Oct. 4, 1957. John F. Kennedy, despite his short tenure as American president, made few speeches, which resulted in creation of, among others, Peace Corps, and first (American) landing on the moon. As  crucial ideological battle against oppression, McCarthyism became a prominent movement, a sort of a “witch hunt” for communists and communist sympathizers inside America.

As Marx’s tenets had instructed, communism did not stay home; it had be to spread worldwide to achieve utopia. Some countries had adopted communism to help realize that goal, including Warsaw Pact nations, Yugoslavia (1945 – 1992), DPRK (1954 – present), Yemen (1969 – 1990), Somalia (1969 – 1991), Cambodia (1975 -1989). The communist governments in all of these countries (except DPRK) collapsed right around the same time as the Soviet Union. Communism also rose to power in the nations, where it is still alive today, such as China (since 1949), Cuba (since 1959), Vietnam (since 1976), and Laos (since 1975).

The tension between America and the Soviet Union wasn’t just restricted to technological and economic races. Few full-fledged crisis erupted during the Cold War, including the Korean War (1950 – 1953), Vietnam War (1959 – 1975), the Bay of Pigs (1961) Invasion and the Cuban Missile Crisis (1962).

Then Gorbachev came in 1985 with his Perestroika (reconstruction). At that time, all means of production were state-controlled, a fact which discouraged the initiative and innovation. The Soviet system was not adaptable by itself and perestroika was therefore doomed from the start. Gorbachev did not have the political capacity to push the desired reforms through (one of the most significant being Law on Cooperatives). His half-hearted efforts eventually triggered the collapse of the Soviet Union, which was completely unexpected.
The political system, like the economy, rested on a foundation of lies. Political leaders from cities and regions fabricated domestic and foreign policy statistics, using propaganda, including the newspaper “Pravda.” This newspaper later became a symbol of hype about Soviet productivity. In 1991, the Soviet Union officially came to an end (under Yeltsin elected a year before) and split into republics.

When the Soviet Union dissolved, it led to a domino effect of communist nations collapsing.

Cold War was over as well.