Belmont Club

Mad Men

Richard Fernandez — Mon, 13 Feb 2012 07:11:54 +0000

Two articles, one from the New Republic and the other from the New York Times, examine the recollections of Mimi Alford, who was a 19-year old intern when JFK had his way with her.

Both articles focus not upon JFK’s infidelity — that is old news — but with his shallow callousness. In one revealed instance the President told Alford to give his press aid a blow job while he watched, which she dutifully did. It was an act so vile that the aide remonstrated with the Kennedy.

Afterwards, Alford says she was “deeply embarrassed,” and as she climbed out of the pool she “could hear Dave speak in as stern a tone as I ever heard him use with his boss. ‘You shouldn’t have made her do that,’ Dave said. ‘I know, I know,’ I heard the President say. Later, a chastened President Kennedy apologized to us both.” Alford believes that Kennedy showed “his darker side … when we were among men he knew. That’s when he felt a need to display his power over me.”

The NYT article focuses on another incident, the day before Kennedy flew off to his destiny in Dallas. Mimi Alford had decided to get married, and told her fiance about her relationship with JFK. By mutual agreement the couple decided to put the incidents in the past. To begin anew. Nobody knows whether JFK would have let the newly married Alford alone.

His parting words before he left for Texas were that he’d call her when he got back. “Remember, Mr. President, I’m getting married,” she chided him. “I know that,” he said. “But I’ll call you anyway.”

Feckless, unfeeling and fake. Those are the words that come to mind. The New Republic says that not even Bill Clinton could be so low; and that JFK’s behavior was so pathological that his whole record has to be revisited.

Clinton shared many vices with President Kennedy, but I can’t imagine him ever doing anything like this. I don’t usually say this about scandal stories, but Alford’s tale ought to occasion further reassessment of a president we already knew to be morally compromised.

But it’s not like JFK was an outlier. Mimi Alford says it was par for the course. Now an elderly lady, she recognizes in the TV show, “Mad Men”, a depiction of her life and times. “Ms. Alford was friendly and poised and told me she associated the White House not with Camelot but with the sexy, deceptive dystopia of television’s ‘Mad Men,’ in which comely young women service their married bosses, as glasses clink, ashtrays fill and everyone keeps mum about the misbehavior.”

Maybe things were not like that everywhere, but in Camelot’s case it apparently was. If so, then the revelations raise as many questions about Kennedy’s milieu as about JFK himself. If Kennedy was no fluke; and certainly Lyndon Johnson appears to have been no better — then national politics was a whole lot more scoundrely than the Time, Newsweek and Life ever let on.

But if the press carefully concealed the real nature of Kennedy from the public, others thought they knew him for what he was. That might explain why Nikita Khrushchev decided to try a fast one on him. Walt W. Rostow recalled JFK’s meeting with the Russian strongman in Vienna. In it, JFK appears to be Khruschev’s bitch, to put it crudely. The Soviet leader was going to do to him what he did to Mimi Alford. Humiliate him in public while telling him in advance.

what he [Kennedy] intended to achieve at the summit on Berlin at Vienna, was that the Soviets should ease their policy on Berlin and form a dignified relationship with the West … But at Vienna, Khrushchev had a very aggressive statement, which in effect was that he would give us until Christmas of 1961 to settle the Berlin thing …

What he [Kennedy] heard was a military ultimatum, to make sure he understood Khrushchev, he went off alone with Khrushchev, Khrushchev’s interpreter and his, so there was just four of them, and Khrushchev repeated this argument about he would have to start the war …

Rostow had been cleaning up after Kennedy and asked JFK what he would do. JFK’s resolution was not encouraging. Rostow recalled Kennedy’s thoughts on how to respond to the Berlin Wall, which was not yet up. It paints the portrait of a President looking for a way out from a trap that was closing in on him.

I gotten to know him very well, because I helped mop up the Bay of Pigs, that was the duty which I felt was most useful in the whole period that I was in government …

“12345″

Richard Fernandez — Sat, 11 Feb 2012 23:28:19 +0000

The Weekly Standard looks at what hacked data shows about the Syrians. Readers have a choice before proceeding. Do you want to laugh or to cry?

Here’s laugh.

Last week, the shadowy online activist group known as Anonymous penetrated 78 email accounts from Syria’s ministry of presidential affairs and posted their contents online. The hackers found that many of the accounts, including that of the allegedly computer-savvy Syrian president Bashar al-Assad, used one of the world’s weakest passwords: 12345. So much for Syrian cybersecurity.

The hacked emails are a downscale version of the WikiLeaks cables. There is little diplomatic sophistication. In the fashion of third-world Arab nationalist bureaucracies, everyone addresses everyone else as Your Excellency. One Excellency kept a stash of porn in his email account, another Excellency seems to have sexually harassed an attractive Her Excellency. Not surprisingly, many of the Excellencies are fixated on Israel, and any story or—more often—image that reinforces their negative feelings is cc’d to a long list of similarly obsessed Excellencies.

Now here’s cry. The leaks also revealed the obsequious terms with which American journalists held these Excellencies.

American journalists flattered the regime as well, but with less luck. In November 2011, more than half a year into the uprising, Brian Williams’s producer at NBC wrote to request an interview, as did Scott Pelley’s producer at CBS’s Evening News a few weeks later. With deaths mounting by the hour, it was quite a feeding frenzy last fall. Bob Simon’s producer at 60 Minutes sought an advantage. He reminded his Syrian correspondent that “60 Minutes interviewed President Hafez al-Assad back in the 1970s.” After a few paragraphs of boilerplate PR for his show (“For the last 43 years, it has featured stories on the most important newsmakers of our time . . . ”), the producer signs off, “We would be most honored to have President al Assad on our program.” God only knows what Barbara Walters’s staff wrote to actually get her prized interview with Assad in December—those missives weren’t leaked.

In defense of journalism everywhere, however, how else would they have gotten the interviews? By addressing these Excellencies in the style actually befitting them? Those approaching the centers of power can adopt either of two attitudes. The right attitude, in which case they are treated with a facsimile of respect and civility. Or they can be shown who’s the boss.

Click here to view the embedded video.

The harsh realities of power put decent countries and decent leaders everywhere at a disadvantage. Journalists know for a fact, even if they will not admit it, that it is dangerous to cross truly evil men. If they want to run a crusading expose — and life — then they must go after softer game; those who have no desire or inclination to compel flattering — or lying — press coverage.

If you’ve ever wondered why “glitter bombs” are thrown at Romney and never at “progressive” figures, or shoes are pitched at John Howard but never at Saddam Hussein well you should stop wondering.

Eason Jordan, who was the chief news executive at CNN, explained in a New York Times article entitled “The News We Kept to Ourselves” that they had to cover up Saddam Hussein’s outrages in order to safely deploy reporters into the country and obtain coveted interviews. In April, 2003, he wrote:

Over the last dozen years I made 13 trips to Baghdad to lobby the government to keep CNN’s Baghdad bureau open and to arrange interviews with Iraqi leaders. Each time I visited, I became more distressed by what I saw and heard — awful things that could not be reported because doing so would have jeopardized the lives of Iraqis, particularly those on our Baghdad staff. …

I felt awful having these stories bottled up inside me. Now that Saddam Hussein’s regime is gone, I suspect we will hear many, many more gut-wrenching tales from Iraqis about the decades of torment. At last, these stories can be told freely.

Eason’s article amounts to a description of how the correspondents are “doubled” by bad guys in order to transmit disinformation to the public. The correspondents are forced to “play back” what their Excellencies want the public to hear or face the consequences. To some extent the real task of the press offices of major political figures is to manage these doubles. They often get away with it, since news agencies rarely if ever, have the equivalent of a counterintelligence function, and may even cooperate with the Excellencies in forcing the reporter to adopt a line.

Without any friends, what’s a reporter to do? One service that “leaks” and “hacked documents” perform is to provide a forum for the ‘true report’. The Weekly Standard article quoted is an example of turning a regimes’ media management process into an indictment against itself. One would hope. Or are “leaks” simply another layer of disinformation? Recently the BBC reported that Julian Assange was slated to host his own TV show — on Russian state media.

There could be wheels within wheels. James Jesus Angleton was a friend of TS Eliot, who famously wrote about the looking glasses in our mind.

These with a thousand small deliberations
Protract the profit of their chilled delirium,
Excite the membrane, when the sense has cooled,
With pungent sauces, multiply variety
In a wilderness of mirrors. What will the spider do,
Suspend its operations, will the weevil
Delay? –

TS Eliot, Gerontion

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Danger In the East

Richard Fernandez — Sat, 11 Feb 2012 21:07:59 +0000

Hugh Tomlinson of the Times, reporting from Riyadh, says Saudi Arabia will acquire nuclear weapons within weeks of a successful Iranian atomic effort. Citing Saudi government and military sources, Tomlinson wrote that “warheads would be purchased off the shelf from abroad, with work on a new ballistic missile platform getting under way to build an immediate deterrent, according to Saudi sources … The Times has learnt that commanders of Saudi Arabia’s Strategic Missile Force have been actively considering the missile platforms on the market.”

The likeliest source of such weapons, according to Western sources interviewed by the Times, is America’s staunch ally and loyal friend, Pakistan, which has recently been in high dudgeon over questions about its moral integrity.

Pakistan is the most likely vendor of warheads to Riyadh, according to Western officials.

Saudi Arabia is believed to have shouldered much of the cost of Pakistan’s nuclear program and bailed out Islamabad when it was sanctioned by the West after its first nuclear test, in 1998.

In exchange, the countries have long been rumoured to have an agreement whereby Pakistan would sell Saudi Arabia warheads and nuclear technology if security in the Gulf deteriorated.

Riyadh and Islamabad have persistently denied that any such arrangement exists, but Western defence officials and diplomats in Riyadh are convinced there is an understanding. One said the kingdom would call in its favour from Pakistan “the next day” after an Iranian nuclear test and could have warheads within weeks.

If true, Saudi Arabia’s actions might lead the casual observer to ask why if Israel were the boogeyman of the Middle East and the existential threat to Muslims everywhere — Saudi Arabia never really worried about the Jewish nuclear bomb, but only as it seems, about another Muslim one?

The Times report would at any rate explain the unprecedented buildup of the Pakistani nuclear stockpile in recent years. It was building weapons not just for itself, but supply a whole region. National Public Radio noted in 2011 that Pakistan already had a hundred warheads and was only getting warmed up.

Pakistan is believed to have developed nuclear weapons in the 1980s. It carried out its first underground nuclear tests in 1998, and in the years since, has built up an arsenal of perhaps 100 or more weapons.

Recently it has become clear that Pakistan’s leaders want a larger arsenal, says George Perkovich, a nuclear weapons expert at the Carnegie Endowment for International Peace.

“When you talk to Pakistani military leaders, they’re not shy about it,” he says. “It’s not a secret.”

To build a larger stockpile, the country needs more plutonium, the core explosive material in its nuclear weapons. Pakistan’s leaders have embarked on a plan to expand its production facilities, including three new reactors that produce plutonium.

Breaking Taboos

Richard Fernandez — Fri, 10 Feb 2012 22:48:23 +0000

Among recent news stories are instances of people talking back, openly challenging the received wisdom in surprising ways. For example, Karen Handel calls Planned Parenthood a “gigantic bully“ for pushing abortion on the Komen foundation.

The bishops of the Roman Catholic church finally nerved themselves to openly clash with the president in a public space, according to the New York Times:

Seven months earlier, they had started laying the groundwork for a major new campaign to combat what they saw as the growing threat to religious liberty, including the legalization of same-sex marriage. But the birth control mandate, issued on Jan. 20, was their Pearl Harbor. …

“Never before,” Archbishop Dolan said, setting the tone, “has the federal government forced individuals and organizations to go out into the marketplace and buy a product that violates their conscience. This shouldn’t happen in a land where free exercise of religion ranks first in the Bill of Rights.”

A prominent supporter of global warming has recanted his belief in public. “I feel duped on Climate Change,” said former German environment senator Fritz Vahrenholt. “He wants to break a taboo. ‘The climate catastrophe is not occurring,’ he writes in his book ‘Die Kalte Sonne’ (The Cold Sun), published by Hoffmann and Campe, which will be in bookstores next week. … While books by climate heretics usually receive little attention, it could be different in Vahrenholt’s case. ‘His fame,’ says Marotzke, ‘will ensure that there will be a debate on the issue.’”

The significance of these public outbursts is that they come from quarters not notably famous for being confrontational. These are people and organizations that would have preferred to keep things running smoothly and quietly. Now they will pay a price. In the case of Vahrenholt, the punishment is already in progress:

The book is a source of discomfort within Vahrenholt’s party. No one with the SPD leadership is willing to comment on the theories of their prominent fellow party member, from former Environment Minister and current SPD Chairman Sigmar Gabriel to parliamentary floor leader Frank-Walter Steinmeier, who was given an advance copy of the book.

A lecture Vahrenholt was scheduled to give at the University of Osnabrück in northwestern Germany was recently cancelled.

The New York Times says that the bishops may find that they have overstepped the mark in challenging the president. “On the other side are religious Americans and clergy members who are unmoved by the religious liberty theme, and who regard the administration’s ruling as sensible health care policy.”

The public policy arm of the United Methodist Church, which like the Catholic Church, runs hospitals and universities across the country, has applauded the mandate to cover contraception. And a coalition of mainline Protestants, Muslims and Reform and Conservative Jews released a declaration on Wednesday supporting the ruling.

The Rev. Debra W. Haffner, executive director of the Religious Institute, a liberal interfaith group that works on sexuality issues and that wrote the declaration, said, “The mainstream religious voice has supported contraception for decades, at least for the last 40 years.”

Curtain Raiser

Richard Fernandez — Fri, 10 Feb 2012 20:09:52 +0000

“If Hitler invaded Hell,” Winston Churchill once remarked, “I would at least make a favorable reference to the Devil in the House of Commons.” Alliances make strange bedfellows, not from love, but out of shared enmity. The appearance of David DeGraw, a spokesman for the 99% Movement and Mark Meckler, one of the founders of the Tea Party Patriots at the Dylan Ratigan show, was notable in that they agreed the common enemy was a predatory elite in Washington. Of course, each defines ‘enemy elite’ in different political terms. But the significance of their superficial agreement lies in that the idea that Washington is the problem is now going mainstream.

Meckler spoke bluntly about what he thought the basic problem was.

Host: “There’s a belief in this country that the tea party and occupy movement have opposing goals. But there may be a basic underlying belief that both groups, along with every other group in America, shares. That we as Americans should not tolerate two sets of rules in this country that are sold off for money, tax favors, subsidy favors, all the things that happen in Washington, D.C., one set of rules for those purchasing them in Washington as a business and another set for those who either can’t purchase those rules or don’t know how. You’re a man, Mark, who appears to be a civilized and reasonable man … Do you agree with what I just said?

Meckler: I do agree. There are two sets of rules. I think most Americans are starting to understand that … at the base level … it’s this confluence of big governments or big union … The tea party has helped to create this discussion in america. that’s the greatest success of the Tea Party. certainly, people were elected, but more importantly, the debate has changed and these issues are now being discussed.

De Graw’s take was outwardly similar.

Host: We just spoke with Tea Party Patriot founder Mark Meckler about our most basic urge to resist any system that enforces two sets of rules, let alone two sets of rules sold off in secret at auction …

De Graw:As mark was saying, Tea Partiers look at big government. occupy wall street looks at big corporations and wall street. It’s the conclusion of the two, the concentration of power to the point now where we have 400 people in this country that have as much wealth as half the population. you have a concentration of power. we’re trying to break that and decentralize the power …

it’s a system of political bribery, campaign finance lobbying, the revolving door.

Books are now being published denouncing the “Permanent Political Class”, like Peter Schweizer’s “Throw Them All Out”.

the full story of the inside game in Washington shows how the permanent political class enriches itself at the expense of the rest of us. Insider trading is illegal on Wall Street, yet it is routine among members of Congress. Normal individuals cannot get in on IPOs at the asking price, but politicians do so routinely. The Obama administration has been able to funnel hundreds of millions of dollars to its supporters, ensuring yet more campaign donations.

None of these developments should be interpreted to mean that the underlying beliefs of De Graw or Meckler have converged, any more than the views of Stalin and Churchill did in World War 2. But what it does suggest is that the legitimacy of the Washington elite is now open to question. The resentment is now a source of political energy that both the Left and Conservatives are trying to tap, each for its own purposes. Coalitions are fragile things, but the fact that they are even possible, albeit at the most superficial level is in itself remarkable.

While in Manila, a book author asked me how to approach an history of the anti-Marcos era. I replied that “you had to go back to 1969. You have to understand that it was the time of the great founding. Unless you remember that it was the year when everybody agreed there was a problem with the political system, the story will make no sense.” I said:

Everyone was inventing a group. There was the Sison Party backed by China; there were the regrouping remnants of the old Lava faction with their ties to Moscow; then there were the Church-connected groups with their tenuous funding links to the Western European social democrats, like the Federation of Free Farmers, the Federation of Freeworkers, the KASAPI and the Lakasdiwa.

There was even the Constitutional Convention being held at Manila Hotel. Everything was in motion because there was a shared sense that the existing Philippine Republic was in deep trouble. Everyone agreed on the question, but there was no consensus on the answer.

The status quo was becoming illegitimate. It was the nature of the successor state that was in dispute.

Three years later the Communists forced their answer on the public by engineering the attack on the political convention at Plaza Miranda so that the choice would be stark, something that suited Marcos to a T.

But it was not over. The real contribution of others was to keep the answer in doubt; to create an effective opposition that was not totalitarian. Merely by continuing to exist they deprived the Communists of what they sought, which was to be the only alternative to the regime.

And it was in that preserved space that the People’s Power Revolution of 1986 occurred; the space that Sison did not believe could survive. And we won after all, and even though the old system died it did not perish solely to give way to a new to another completely dominant elite. Something had been achieved.

There is something about the 2012 that is very evocative of a period before a great discontinuity. The sudden emergence of voices from unexpected quarters; of reform efforts and breakaway movements; the whole atmosphere. Every student of history will have seen these before. Of course the annals of humanity never repeat themselves, but occasionally some of their entries resemble each other.

Click here to view the embedded video.

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By Rights

Richard Fernandez — Thu, 09 Feb 2012 21:25:14 +0000

Michelle Singletary at the Washington Post says that whether or not America achieves President Obama’s goal to “once again have the highest proportion of college graduates in the world” depends on how much the taxpayer is willing to spend. “To reach Obama’s goal, we have to decide, as a matter of public policy, whether college is a right or a privilege.”

She believes it is a right. Otherwise only the rich will be able to go to college in this era of rising educational costs. Singletary writes:

There are those who will decry even asking if college is a right or a privilege. Nonetheless, the question must be asked and answered.

If going to college is a right and vital to our nation’s economic standing, then government will have to do more to make it affordable for all. If it’s a privilege, only the nation’s wealthiest families will one day be able to send their children to college. Or are we damning a large percentage of our citizens to burdensome student loans, leaving them to conclude college isn’t worth it?

But if Singletary were to reflect, what she probably means is that the lifestyle that graduation from college is meant to afford is what she desires as a right. What is the point of making a college education a “right” if it doesn’t make an economic difference? One of the “we are the 99 percenters” recently held up a hand-lettered sign which complained that all her master’s degree qualified her for was work as a housekeeper.

The Right to be Unemployable

What Singletary probably wants as a “right” is guaranteed access to a car, house, and all the goodies which were once correlated with attending tertiary education. A worthless degree isn’t much of a right. It is hardly a “privilege.”

There are other rights too, such as the right to decent housing, that society is supposed to provide. After mandating “affordable housing” under Fannie Mae and Freddie Mac, the federal government is now engaged in paying banks to keep from foreclosing homes. “More good California-based news for President Barack Obama: Bank of America Corp. has become the first large mortgage provider in the Golden State to take part in a federally funded ‘Keep Your Home’ program that would pay banks to reduce the balances that struggling California homeowners owe them.”

After the bubble burst, I recall asking a friend where all the money went as million-dollar tract houses lost half their value. He laughed, and pointed to his new RV — a reminder of how prevalent it was for Californians to view their quickly appreciating houses as piggy banks. No doubt, predatory lenders engaged in fraudulent practices during the price run-up, but there’s much more to this story than that storyline. …

Virtually every aspect of the lending process is governed by federal rules, so it’s nonsensical to argue that the banks were unregulated. Our political leaders seem to be forgetting, also, that it was direct government policy to arm-twist banks into giving out loans to unqualified buyers. The Community Reinvestment Act scored banks based on the number of loans they provided to low-income people.

As John McClaughry wrote in Reason magazine in December, “By 1995 the CRA had become a powerful tool in the hands of ACORN and allied activist organizations,” referring to the Association of Community Organizations for Reform Now. “Unless a bank could silence their protests by making (and passing on to Fannie Mae) the demanded amount of subprime loans, it faced serious difficulties in obtaining regulatory approval for branching, merging, and other corporate decisions.”

This stemmed from an ideology, supported in Republican as well as Democratic circles, that viewed homeownership as the key to a prosperous life. In pricey California, lenders — and governments, which often offered residents down-payment assistance and low-interest loans — got ever more creative so that they could help buyers afford median home prices that soared above $600,000 in many urban markets.

The trouble was that, like a college education, home ownership was partly the consequence and not the cause of middle class earning power and work habits. A diploma and mortgage did not bestow the characteristics of a winner on its recipients. People who could never pass a rigorous tertiary educational course or pay off a mortgage couldn’t do so even with government “help.” It just pushed them in over their heads.

Egypt and Iran

Richard Fernandez — Thu, 09 Feb 2012 17:17:48 +0000

Lee Smith’s article at Tablet Magazine discusses what Newt Gingrich called “the ‘Obama Hostage Crisis.’” Egypt is planning a show trial for 19 American NGO organizers; and they have plenty of public support in the Cairo streets.

A December Gallup poll showed that 71 percent of Egyptians oppose U.S. economic aid of any sort, and that 74 percent oppose “direct U.S. aid to Egyptian civil society organizations.” … It’s worth noting how these December poll numbers track in parallel to last March’s constitutional referendum. That vote gave the Egyptian electorate a choice: Either vote on a few amendments to the 1971 constitution and push ahead to elections, or write a new constitution, a process that would delay elections.

The army and the Islamists favored the first, while the revolutionaries who brought down Mubarak opted for the second, since it would give them a chance to organize coherent political entities capable of winning seats in parliament. Ultimately, three-quarters of the voters sided with the army and the Islamists. Only one quarter voted with the revolutionaries—presumably the same quarter of Egypt’s population that polled in favor of continued U.S. aid to civil society, support that gave rise to the revolution itself.

In Smith’s view, the revolution sown by revolutionary minority, but it has been harvested by the Islamists and the Army. The trial of Secretary La Hood’s son and 18 others is simply the consequence of that fact. Ironically, the revolution was hatched under Mubarak, whose authoritarian rule now seems like a liberal era compared to what might follow.

The most curious question is this: If so many Egyptians are against U.S. aid money to Egyptian civil society, how did organizations like the International Republican Institute and its counterpart, the National Democratic Institute, manage to do their work for so long? If they are charged with operating without a license, but had been working in Egypt regardless for many years before the arrests, how did they get away with it? Because Hosni Mubarak let them.

The man who now lies in a hospital bed in Sharm el-Sheikh under house arrest and is typically blamed for everything that has gone wrong in Egypt over the last 30 years is the same man who was at the helm as Egyptian civil society grew. The revolutionaries who toppled the Egyptian president arose under him. The middle-class, ostensibly liberal-minded, and Western-oriented demonstrators who protested in favor of democracy were drawn from the nonprofit organizations, independent media outlets, and private-sector enterprises that had all come about under Mubarak.

But if Obama’s plan to lead the Egyptian revolution “from behind” now lies in same hospital bed as the dying Mubarak, Egypt itself is not far behind. Al-Arabiya estimates that the military consumes anywhere from 10 to 30% of Egypt’s GDP, depending on which figures are used. The Army almost literally owns Egypt, and the nation’s current economic directly hurt it.

In an article published by The Majalla on 19 January 1988, about “the military industry in Egypt,” it was reported that Egyptian military spending had doubled since the early 1970s, and that by 1986 Egypt was the seventh largest exporter of cheap weaponry in the world. However, after signing the Camp David Accords, Egypt began to import higher quality US-made arms. Military economic activity transformed over time to incorporate civilian industrial sectors, in order to ensure that revenue for the military budget was not entirely linked to the state. Over time the Egyptian armed forces began to own factories producing food, cooking oil and fruit juices, alongside giant construction firms, and other institutions producing textiles or electrical appliances. Since the 1980s, military factories even embarked on joint ventures with foreign manufacturers to produce automobiles, whilst the military’s investment portfolio also included gas plants, cement factories and so on. If you want further evidence of the proportion of the economy that is run by the military in Egypt, last December the military offered to lend the Egyptian government nearly a billion US dollars, which means that this institution has large reserves of undeclared foreign currency (New York Times, 28 December, 2011).

But it is hardly “too big to fail”. Eventually the money runs out, as it has for even Iran, which was the scene of Jimmy Carter’s Hostage Crisis. Reuters reported that Teheran can no longer pay India for rice.

NEW DELHI (Reuters) – Iranian buyers have defaulted on payments for about 200,000 tonnes of rice from their top supplier India, exporters and rice millers said on Tuesday, a sign of the mounting pressure on Tehran from a new wave of Western sanctions

The default prompted the head of the All India Rice Exporters’ Association to call on members to stop rice exports to Iran based on credit, which would be a fresh blow to a country where imports of staple foods are already being hampered by sanctions …

In other supply disruptions, five deliveries of grain to Iran were diverted to new destinations because payments were held up, ship tracking data showed last week. Other cargoes are sitting offshore Iran because of difficulty with payments.

Under a tightening grip of sanctions, the country of 74 million people is finding it increasingly difficult to repatriate the hard currency from its crude oil exports, its major foreign currency earner, that it needs to pay for shipments of food and other imports.

A sharp drop in the value of the rial is adding to Iran’s import costs and the financial sanctions make it difficult for traders in the country to channel import payments through unofficial routes involving middlemen based in Dubai.

Iran’s difficulties are probably as nothing to the problems facing Egypt, which doesn’t even have oil and is critically dependent on imports for food. But it does have 19 Americans to trade. When economies which produce nothing but trouble run out of money, the situation can go lots of places and it’s not always easy to lead from behind.

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Turn Around

Richard Fernandez — Thu, 09 Feb 2012 16:49:34 +0000

Eastman Kodak, founded by George Eastman in 1880, is exiting the camera business after finding itself unable to compete with Japanese camera makers. Although it was one of the pioneers in digital imagery, it was trapped by its lucrative film market into a technological dead end. The Rochester-based company will focus on inkjet printers. Closing the camera business will mean the loss of an unknown number of jobs — and perhaps an even greater number of pensions.

The company filed for bankruptcy in January of this year. “The bankruptcy may give Kodak, which traces its roots to 1880, the ability to find buyers for some of its 1,100 digital patents, a major portion of its value. Kodak now employs 17,000 people worldwide, down from 63,900 just nine years ago.”

“This is a necessary step and the right thing to do for the future of Kodak,” Chairman and Chief Executive Antonio Perez said in a statement on Thursday.

Kodak’s market value has sunk well below $200 million from $31 billion 15 years ago, when its share price topped $94.

The shares began trading on Thursday on the Pink Sheets. By the end of the day they were down 6 cents at 30 cents each.

In recent years, Perez has steered Kodak toward consumer and commercial printers. But that failed to restore annual profitability, something Kodak has not seen since 2007, and did not arrest a cash drain.

Kodak has struggled to meet its pension and other obligations to more than 65,000 workers, retirees and others who participate in its employee benefit programs.

As the company spiraled downward it became, like the Detroit, dominated by its past rather than its present, something its CEO called “legacy costs”. As Dana Mattioli put it: “here’s one way of understanding Eastman Kodak Co.’s problems: The company has twice as many retirees drawing benefits in the U.S. as it has active employees world-wide.”

Kodak’s hefty obligations to its retirees have long limited the company’s strategic options. … Now, it hopes to scale back what it owes retirees during its stay in bankruptcy court. That leaves thousands of its former employees in danger of becoming the next group of Americans to see their promised retirements benefits—mainly health care—disappear.

Kodak has been whittling away at those benefits for years and says it wants to accelerate the process in Chapter 11 proceedings …

The U.S. liabilities accounted for the single largest drain on the company’s cash in 2011, consuming $119 million, Kodak said. In a memo to employees Thursday, Chief Executive Antonio Perez said the company aims to use Chapter 11 to “fairly resolve our legacy costs.” …

Bob Volpe, president of the Association of Eastman Kodak Retirees … is most concerned that Kodak will petition the bankruptcy court to eliminate retirees’ health-care benefits … some retirees, particularly those with no income stream who are too young to collect Medicare, will choose to go without health care.

The Economist notes that Kodak joins the list of once-dominant companies which failed to reinvent themselves. The moral of the story, it says, is ‘change or fail’.

National Cash Register (NCR) was once one of the world’s top computer makers, but has been reduced to making ATM machines and high-end registers. Xerox, the pioneer of copying machines, is struggling in the competitive market for imaging products and services. Even AT&T, the telecoms giant, was not able replicate the dominance it once enjoyed in handling long-distance calls. The only American technology heavyweight that has successfully reinvented itself is IBM—and more than once. In recent years the firm deftly managed the shift from selling hardware to offering software and services.

But the fate of Kodak may also hold a few lessons for government, an ever greater proportion of whose revenues are also being consumed by entitlements and other “legacy costs”. The difference between Kodak and the Federal Government, however, is that Kodak knew what was coming, even though it was powerless to stop it. But White House spokesman Jay Carney, blithely considers the departure of people from the workforce as an “economic positive”.

QUESTION: Thats a reality that people stopped looking for work and then they have to re-enter.

CARNEY: Well, look at some of the facts. A large percentage of that is due to younger people getting more education which in the end is an economic positive. There is a fact this increase in the number of people leaving the workforce has been a trend and a fact since 2000 because of an aging population. Which is not say this is wholly disregarded as an issue.

Why is government so unconcerned? Unlike IBM, it lacks the competence to adapt. The Presidents flagship policies call for an expansion, not a change in the current government model. Unlike Kodak, government isn’t even willing to try to reinvent itself. Why? Because what government can do something neither IBM nor Kodak could, which is print money. That and the fact that it’s too big to fail.

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Sacrificial Spokesman

Richard Fernandez — Wed, 08 Feb 2012 17:00:53 +0000

Lieutenant Colonel Daniel Davis, an officer who “served in Operation Desert Storm, in Afghanistan in 2005-06 and in Iraq in 2008-09″ and “legislative correspondent for defense and foreign affairs for Sen. Kay Bailey Hutchison, R-Texas”, recently concluded, after spending a year in Afghanistan gathering data for a report on equipment, that the whole operation had become a fraud.

He echoed the assessment of Anthony Cordesman’s conclusion that the war was being reported to fit a political template, while in the meantime doing little or nothing to achieve any tangible goal. Cordesman wrote, “Since June 2010, the unclassified reporting the U.S. does provide has steadily shrunk in content, effectively ‘spinning’ the road to victory by eliminating content that illustrates the full scale of the challenges ahead. They also, however, were driven by political decisions to ignore or understate Taliban and insurgent gains from 2002 to 2009, to ignore the problems caused by weak and corrupt Afghan governance, to understate the risks posed by sanctuaries in Pakistan, and to ‘spin’ the value of tactical ISAF victories while ignoring the steady growth of Taliban influence and control.”

The reason why the Army gone along, according to Davis, is to defend its turf and programs. In other words, it has kept quiet to get money.

I first encountered senior-level equivocation during a 1997 division-level “experiment” that turned out to be far more setpiece than experiment. Over dinner at Fort Hood, Texas, Training and Doctrine Command leaders told me that the Advanced Warfighter Experiment (AWE) had shown that a “digital division” with fewer troops and more gear could be far more effective than current divisions. The next day, our congressional staff delegation observed the demonstration firsthand, and it didn’t take long to realize there was little substance to the claims. Virtually no legitimate experimentation was actually conducted. All parameters were carefully scripted. All events had a preordained sequence and outcome. The AWE was simply an expensive show, couched in the language of scientific experimentation and presented in glowing press releases and public statements, intended to persuade Congress to fund the Army’s preference. Citing the AWE’s “results,” Army leaders proceeded to eliminate one maneuver company per combat battalion. But the loss of fighting systems was never offset by a commensurate rise in killing capability.

A combination of military compliance and corrupt politics has led to a situation in which the Taliban are captured only to be released, an Afghan Army which pretends of fight and American lives and treasure wasted in strategies and efforts that are known to be useless.

The Australian Broadcasting Corporation says “shared his pessimistic view with some members of Congress and written a classified version of his article for the Defense Department, a highly unusual move that he expects will anger his commanders and short-circuit his professional career.” The NYT writes,

He briefed four members of Congress and a dozen staff members, spoke with a reporter for The New York Times, sent his reports to the Defense Department’s inspector general — and only then informed his chain of command that he had done so. …

“I’m going to get nuked,” he said in an interview last month.

But his bosses’ initial response has been restrained. They told him that while they disagreed with him, he would not face “adverse action,” he said.

But the NYT soft-pedaled the core of Davis’ allegation: that the present administration has been fighting a PR campaign disguised as a war and using lives to pay for it, suggesting that senior Democrats have been thinking the same thing all along and that — just maybe — Davis is over-wrought.

Senator Jeff Merkley, Democrat of Oregon, one of four senators who met with Colonel Davis despite what he called “a lot of resistance from the Pentagon,” said the colonel was a valuable witness because his extensive travels and midlevel rank gave him access to a wide range of soldiers.

Moreover, Colonel Davis’s doubts about reports of progress in the war are widely shared, if not usually voiced in public by officers on duty. Just last week, Senator Dianne Feinstein, Democrat of California and chairwoman of the Senate Intelligence Committee, said at a hearing that she was “concerned by what appears to be a disparity” between public testimony about progress in Afghanistan and “the bleaker description” in a classified National Intelligence Estimate produced in December, which was described in news reports as “sobering” and “dire.” …

Colonel Davis can come across as strident, labeling as lies what others might call wishful thinking. Matthew M. Aid, a historian who examines Afghanistan in his new book “Intel Wars,” says that while there is a “yawning gap” between Pentagon statements and intelligence assessments, “it’s oversimplified to say the top brass are out-and-out lying. They are just too close to the subject.”

But Martin L. Cook, who teaches military ethics at the Naval War College, says Colonel Davis has identified a hazard that is intrinsic to military culture, in which a can-do optimism can be at odds with the strictest candor when a mission is failing.

But Daniel Davis may also be that other thing common in military history: the designated spokesman for a widely felt grievance; the someone who is willing to take the heat to say what otherwise cannot be said. One almost senses that Davis’ report was prepared with the tacit support of others. Certainly Davis, who has been around politicians in an advisory capacity for long enough to know how the system works, must have intended his report for political effect. It is a curtain raiser on an as yet unannounced scene.

Since not a single high ranking Republican has as yet attempted to take up Davis’ report as a starting point there must be a widespread political feeling that the arena to whose floor Davis’ report opens is a dangerous one. Republicans have traditionally refrained from criticizing a war effort while operations are underway. Meanwhile the Democrats, who are much more comfortable criticizing wars, are now tongue-tied by the fact that their own leadership is in fact responsible for its prosecution of the war in Afghanistan. Barack Obama campaigned on making it the centerpiece of his new strategy. If now that strategy turns out to be nothing but air and spin paid for by blood, it would go hard on their party.

What is different about Davis’ accusation is that is not an argument that “the war is unwinnable” as much as that “the war was never intended to be won”.

It suggests that the key corruption is not that taking place within the Afghan government, though there is plenty enough of that, but in the moral corruption within the Pentagon, the Capitol and the White House. Even the admission of that corruption would be preferable to the explanation of malice; that the politicians have quit working for the American people and are now only employed on their own personal behalf and whoever is willing to pay them. If so, then Washington is a problem which has to be solved if the war — and any war fought in the national defense — is to be won or even undertaken, except in a purely shambolic sense.

None of this is to say that Daniel Davis is writing the Gospel Truth; but it is reasonable to assert that he raises a question which at least deserves some attention. The response in the next few days — if there is any — will be an interesting indicator of whether the issues Davis raises are up for discussion, or whether “the fix” is quite sadly the settled consensus within the political system.

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Challenge to the Incumbents

Richard Fernandez — Mon, 06 Feb 2012 04:10:40 +0000

When 15-term Dan Burton announced his intention not to run for another term, he described it with all the easy assurance of a movie superstar who had finally tired of the game. It was an impression only slightly marred by the fact that everyone around him had expected him to run.

“It has been an incredible honor to serve Hoosiers, first as a state representative and state senator at the Indiana State House and then to serve my constituents as a member of Congress,” he said in a statement. “I want to thank all of those who have given me the great honor to serve in the legislative branch of government for all of these years.”

The announcement caught many by surprise.

Joshua Gillespie, a spokesman at Burton’s Indianapolis office, said the congressman made the announcement on “his own accord” without informing his staff. He said to call it a surprise would be an “understatement.”

“None of us in the office were expecting this,” he said.

The Chillico Gazette, however, tells a darker tale. According to Deidre Sheshgreen, their Washington Bureau correspondent, Burton was forced out by the machinations “a shadowy group called the Campaign for Primary Accountability, which bills itself as a ‘non-partisan’ group dedicated to ‘leveling the playing field in primary elections’.”

This shadowy group hovers over the political scene like a vulture picking off vulnerable incumbents. Deidre describes the outrage of Congresswoman Jean Schmidt, who fears she might be the next to follow burton into the pasture of retirement:

“Poll Spells Trouble for Congresswoman Jean Schmidt,” blared the headline on a news release from the Campaign for Primary Accountability …

“Where polling shows that a long-term congressional incumbent like Jean Schmidt does not have strong support from voters in her district, the Campaign for Primary Accountability will be there to level the playing field for primary challengers,” Leo Linbeck III, national co-chairman of CPA stated in a press release on the Ohio poll.

The poll found that 54 percent of the 300 surveyed GOP voters initially said they would support Schmidt for re-election. But after the pollster offered up some negative information about Schmidt, including her vote in support of the Wall Street bailout and this summer’s debt ceiling agreement, her support dropped to 38 percent.

The evil genius behind the Campaign for Primary Accountability is said to be Leo Linbeck III, “a wealthy Texan, who serves as president and CEO of a Houston-based construction and real estate company called Aquinas Corp. He is a major funder of CPA along with Eric O’Keefe, an investor who lives in Wisconsin and has also been involved in other conservative political causes.”

Spokesmen for the CPA argued that it was not partisan, at least not in the sense that it supported one party over the other. “A CPA spokesman, Curtis Ellis, said the group has ‘a lot of funders,’ but “the primary backers are Leo Linbeck and Eric O’Keefe.”

Asked how CPA could describe itself as independent when its two principal funders are conservatives, Ellis said, “CPA does not fit the traditional Democrat versus Republican, liberal versus conservative paradigm. It is a trans-partisan organization that encourages greater participation in primaries by voters in both parties in order to break the partisan gridlock that has paralyzed Washington.”

The fall of Burton suggests that the strategy of challenging incumbents in primaries is no longer a Quixotic pipe-dream. Open Secrets, which lists the amounts PACs have raised shows that CPA has raised half the money of the AFL-CIO Worker’s Voices PAC and much more than many other more famous committees.

Mark Meckler, the co-founder of the Tea Party takes a more positive view of the CPA’s Equalizer Campaign. “Not looking good for the Ruling Elite in 2012 … The Campaign for Primary Accountability (“CPA”) aims to expose long time incumbents who are part of the problem on either side of the aisle. It looks like they have worked some magic in Indiana … The Ruling Elite of both parties have been winning for a long time. It’s time to create some accountability and put the People back in charge. This approach seems like a good idea to me.”

Not everyone may agree with the CPA strategy of forcing incumbents to become accountable to the mass base they claim to represent; some may even view it as a ‘shadowy’ threat to incumbents. But it seems fair at least to observe, as Mark Meckler did, that there is a great store of resentment for the Washington elite. Inevitably that resentment will find its way into political action. Maybe the question is not why groups like the CPA exist, but why it took so long for them to emerge.

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