Wednesday, December 25, 2013

Help Poor Struggling CEOs!

Washington should step in to help out needy CEOs

The US has wage lessons to learn from England
Back in 1795, when Britain was fighting Napoleon, there was a financial crisis entailing an oversupply of labor and a shortage of food: bread prices rose, and wages fell.

The orthodox view was that the English peasantry were largely in earnest when they happily intoned, ‘God bless the squire and his relations/And keep us in our proper stations.’ While some might have said that in church on Sunday, however, in reality many of them donned masks at night and went out with flint and tinder. In eighteenth-century England – and indeed in the US – people had quaint traditional customs that included what one historian called ‘collective bargaining by riot’: if food prices went up, the local magistrates’ mansions and hayricks also went up – in flames.

By ancient law, the magistrates could fix the wages of local laborers, but the Justices of the Peace of Speenhamland in England, an area afflicted with serious rioting, decided not to. Instead, they used local taxes to supplement the wages of farm workers so that all taxpayers subsidized the payroll of the most affluent landowners, and paid extra cash to workers depending on the price of bread.

Two centuries later, the jury is still out on the motives of the JPs. On the one hand, their policy did save poor families from dire deprivation and actual starvation. On the other, magistrates tended to be rich farmers, so in effect they were subsidizing themselves while buying tangential arson insurance.

These days, we often maintain old traditions. University of California researchers claim chains like Walmart and McDonald’s use public money to subsidize their Scrooge-like pay policies. The minimum wages they pay are not enough for their employees to live on and are feasible only if society as a whole picks up the balance of the tab with food stamps, rent subsidies and state-provided healthcare; the researchers estimate that this government backing of the fast food industry amounts to $7 bn a year.

Those numbers can be multiplied by much more, as it seems 60 percent of new US jobs since the recession have been similar low-paid service sector jobs. As with the gentleman farmers of yore, paying low wages and letting everyone else pick up the tab is good for the bottom line.

But new times mean new problems. Nowadays, it is clear the bigger problem is that the growth of executive salaries is not accelerating the way it used to. Companies cannot afford, politically or financially, to keep executive compensation increasing the way management so manifestly deserves. If CEOs – those on whom our economic survival and continued prosperity depend – are paid less than their peers, it reflects badly on the perceived prosperity of their companies and thus on their shareholder value. This in turn affects market indices and thus the financial prosperity of the nation. It is essential, therefore, that our industrial leaders are seen to be paid well.

In view of such a national challenge, Washington must rise to the occasion just as those rural English magistrates did: it is imperative the government step in to supplement executive compensation. The essential ‘cost of ostentatious consumption increase’ could be met by granting tax credits that would provide needy CEOs with annual percentage increases tied to the rise in the average remuneration of their Fortune 500 peers.

Naysayers might argue that this is inherently inflationary, but it has sound precedents: most board compensation committees cite comparable CEO pay to justify rises for the boss who appointed them, and of course the rises they then award are taken into account by all the others. ‘Speenhamland for CEOs’ might be an esoteric slogan, but it is surely centuries-old wisdom whose time has come!

Wednesday, December 18, 2013

Saudis Out -Israelis in UN Securitty Council?

WRMEA, December 2013, Pages 24-25

United Nations

In Rejecting Security Council Seat, Saudi Arabia Acknowledges Realpolitik

By Ian Williams

Members of Saudi Arabia’s U.N. delegation confer during the General ­Assembly’s Oct. 17 ­election of five new non-permanent members of the ­Security Council. (UN Photo/Paulo Filgueiras)
On the surface, Saudi Arabia’s decision to refuse its Security Council seat is as idiosyncratic as one would expect from a  monarchy. Diplomats view a seat at the Security Council as the apogee of their careers, so foreign ministries tend to take elections to it far more seriously than most other parts of their governments. Saudi Arabia is a founding member of the United Nations and has in recent years sought and won seats on the Human Rights Council and other bodies.
Sometimes governments desperately want to shape Council discussions on certain issues—Morocco, for example, with Western Sahara, or Indonesia in times past with East Timor—so they exert great efforts to be elected. In a fit of heroic wishful thinking, Israel has announced its interest in being a candidate in 2020 for the “West European and Other Group” seat—more about which later.
The “unofficial” procedures for elections to the Security Council vary from region to region. The temporary rotating seats often are earmarked years in advance. Africa, in particular, rotates its seats among smaller subregions, deferring every now and again when the giants like Nigeria or South Africa want to be on the Council.  That is why Rwanda keeps popping up in the Council at inopportune moments, like during a genocide at home, or intervention in neighboring Congo.
Clovis Maksoud, the distinguished former ambassador of the Arab League, takes credit for devising the current system, almost Ptolemaic in its complex epicycles, that ensures Arab representation. The Arab group is split between Asia and Africa, so he arranged that the Asian group would cooperate to alternate with the Africans so there would always be an Arab seat.
To be elected to a temporary seat, countries need to get two-thirds of all the secret ballots in the General Assembly. But more often than not that is almost a formality, because the regional groups vote in advance for their nominees and ensure that the number of credible candidates matches the number of vacancies. Saudi diplomats had spent two years working on their candidacy, canvassing and doing what they do, so the Asian group already had given its blessing. A country really has to rile a lot of nations for one-third of the world to actively block its candidacy, and the Asia group is the U.N.’s biggest region.
The last time Riyadh had made a bid for U.N. glory was in 1991, when its then U.N. Ambassador Samir Shihabi ran for president of the General Assembly, overturning the expected candidate, Papua New Guinea. The success of that election, however, showed the dilemma for a Saudi government trying to look after its home constituency and yet pander to its essential foreign backers. Shihabi took the U.N. very seriously, and set up the association of former presidents to perpetuate his moment of glory. One of his first tasks as president, however, was to preside over the special meeting of the General Assembly called by George H.W. Bush in 1991 to rescind the U.N.’s “Zionism is Racism” resolution. Himself Palestinian by birth, Shihabi absented himself from the meeting—as, in fact, did the Israeli ambassador, whose government saw the move as Bush’s desperate attempt to win over American Jews after he had refused the loan guarantees Israel wanted to build its illegal settlements.
That hints at the reasoning behind the surprising decision. Saudi diplomacy by its very nature has to be somewhat contradictory. Riyadh wants Iran hobbled. The government is displeased that the U.S. backed off threats of military strikes against Syria in response to its alleged use of chemical weapons. It’s unhappy with U.S. policies in Egypt. On the Israeli issues it would have to confront its existential ally, Washington, and there are many more issues where its domestic base would be unhappy if the Saudi representative voted the Foreign Ministry’s head rather than the imam’s heart.
So we can take with a sack of salt the idea that Riyadh’s refusal of the seat was solely to protest for Security Council reform, or on behalf of the beleaguered Syrians, let alone the Palestinians. After all, if the Kingdom were truly, deeply concerned about the latter, it could have turned off the oil pipelines many times over the decades before the U.S.’s recent achievement of energy self-sufficiency. If the concern was more about Syria, then a seat on the Security Council would give the Kingdom far more leverage with other members of the Council—with, for example, China, which has just become a bigger customer for its oil than the U.S.
The king simply was more astute in recognizing the realities of the regime’s position, which is predicated on keeping Washington as an ally. The U.S. may be a diminished superpower, after two disastrous stalemated military interventions and the financial crisis, but it still has more military clout than the rest of the world put together, and probably just enough influence over Israel to stop it from attacking and humiliating the land of the two shrines.
The sordid realities of global realpolitik and U.S. domestic politics put the Kingdom in an invidious position. It has contributed positively—since it is, after all, the “Saudi Plan” for Middle East peace that has been adopted by the Arab League and endorsed by almost every other player—except, of course, Israel. Washington’s verbal support for the formula has been correspondingly undercut in reality by its essentially unqualified military, diplomatic and financial support for the self-proclaimed Jewish state.
Recent reforms to the U.N. Human Rights Council were in part intended to lessen the over-emphasis on Israel compared with other members. A crucial improvement introduced by human rights supporters was the Universal Periodic Review, under which every member’s human rights behavior is scrutinized. This year, however, Israel was the one and only country to refuse to turn up for the review, which puts into sad perspective its supporters’ perennial claims of persecution. As we go to print, it has an opportunity to turn up, but the suspicion is that it will not.
Considering grandiose aspirations and hypocrisy, thoughts naturally move back to Israel’s declared intention to run for a temporary Security Council seat in 2019/20. To twist Groucho’s words, why does Israel want to be in a club that it has so consistently reviled and criticized over the years—let alone one that has so consistently condemned it in the past and would still be doing so were not for the automatic U.S. veto. So what would Israel gain from a seat, since it certainly would not have a veto as a temporary member? Well, other countries, like Morocco and Indonesia, as mentioned above, have sat around the Security Council chamber unblushing at defying resolutions against them.
Israeli diplomats, just like their U.N. counterparts, love the idea of grandstanding in the Security Council and pontificating on the behavior of the rest of the world. So they also overlook their prejudices against the institution and announced their bid. Unless Israel signs a peace treaty satisfactory to the Arabs and the Palestinians before then, however, their chances are minimal. Since the Asian group wouldn’t have them, and nor would any other regional group, U.S. pressure led the West European and Other Group to accept the state, eventually. For strange historical reasons having to do with the old British Empire, Canada, Australia and New Zealand are the “other” in this title. And just to even out the anomalies, Cyprus joined the Asia group.
WEOG, as it is known in U.N. parlance, is the only regional group at the U.N. that has genuinely competitive candidates, who are not appointed by the group, but go to the general membership for election. So Israel, not particularly popular in Europe, would have to persuade serious contenders to stand down. They have not done so for others in the past. And then it would have to go to the General Assembly for an overall ballot, and get a two-thirds majority of the votes from diplomats who have fairly consistently demonstrated their antipathy to the state.
It would take a miracle of Biblical proportions to overcome such hurdles, and it is unlikely to be forthcoming. Indeed, the state of Palestine might be a better bet for gamblers!

Monday, December 09, 2013

The Curse of Canonization

 pub 8 December, Huffington Post.

When Nelson "Madiba" Mandela came to New York the first time we met, he exuded charisma combined with a rare modesty. He chuckled when I told him that he was responsible for my current career path, since a group of us were suspended and expelled from Liverpool University for occupying the Senate House in protest against the university's investments in South Africa. It was indeed edifying to be, in no matter how small a way, a comrade in arms of such a palpably heroic figure.
However, my skin crawled as I listened to the portentous yet vacuous platitudes that surrounded the announcement of his death. Once dead and canonized, our heroes' real lives fly out the window. Neither the media nor the public have time for feet of clay at the opposite end from the shimmering halo round the head. This cartoonish "goodies and baddies" view of the world is an understandable human foible, but it does become creepy when politicians and other public figures try to usurp the benign energy of those whom they would have had reviled, imprisoned, or even killed while they were alive.
British politicians revered Gandhi, after fighting his struggle for independence and locking him up. People speak unctuously of his passive resistance without mentioning that it was the British government, not least the equally revered Winston Churchill, whom he was resisting, who interned him during the war against fascism.
In the U.S. those who fought most bitterly against the socialist, anti-Vietnam subversive strike leader Martin Luther King once had nightmares but now, wow, they too have a dream. They even overlook King's philandering, just as they tend to forget that we know about his affairs because the genuinely reptilianly evil Edgar J Hoover was on his case.
Mandela's eulogies and epitaphs highlight what an awful curse it is to be canonized! You give your life for a cause, and then find your life distorted, rewritten and usurped to support people and causes that you reviled.
He was a charismatic, charming, humble, inclusive and forgiving leader who was prepared to embrace the former enemy and bring peace and progress. But forgiveness should not be confused with forgetfulness. He might even have been somewhat too forgiving of the behavior of his friends Fidel Castro and Muammar Gaddafi at home. But gratitude is a virtue no less than courage, and being locked up for decades and oppressed for a lifetime surely enhances ones appreciation of those who supported you. It could equally incline you to doubt the moral authority of regimes like Washington's that puts you on a terrorism watch list.
Landing in Washington at an airport named after Ronald Reagan could easily make anyone question the good faith of a country that canonizes the president who crashed the economy, unwound the New Deal, traded with Iran to back the Contras and backed the Apartheid regime to the hilt.
The media eulogized the saintly Mandela, and imbued him retrospectively with an absolute commitment to non-violence, but it could not be farther from the truth. The Liberation leader did indeed advocate respect for the results of elections -- once the oppressed had been enfranchised, but he was actually the leader of an armed resistance group whose mandate was to force those elections upon the minority. Mandela's commitment to the Palestinians, like that of Archbishop Desmond Tutu, is rarely mentioned by the usual suspects because they cannily appreciate that any mud they throw at such towering figures is more likely to splash back at them, and more likely to bring attention to his views. All those commentators intoning platitudes about Nelson Mandela would be the first to join the ritual stoning of and casting out as "anti-Israel" any African American politician who had the temerity to support international law in the Middle East.
In that sense, Saint Madiba was indeed anti-Israel, and perhaps one reason that no one called him on it is that in doing so it might have brought up issues which are considered best buried. Mandela knew that Israel broke international sanctions on Apartheid, was the main conduit for laundering and cutting blood diamonds from South Africa and armed the regime there -- right up to an including nuclear weaponry.
Mandela was a giant of a statesman, whose passing leaves us with pigmies at the helm of most countries. But when someone dies after giving a lifetime to humanity, we should at least pay them the respect of addressing what they said, even if we disagree with them.

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Thursday, December 05, 2013

An ethical foreign policy?

  I use Grammarly's plagiarism checker because it shows me who is copying my work!

 Sanity prevails over Iran

by Ian Williams

Tribune Monday, December 2nd, 2013

Iran’s nuclear agreement recalls Robin Cook’s statement about foreign policy having an ethical dimension, often misquoted as “an ethical foreign policy.” Cook realised that ethics was just one of several dimensions. The Iran imbroglio almost has as many tangled dimensions as string theory – with the ethical one hard to find. Even the Israeli stock markets bounced upwards on news of the Iranian accord, showing the invisible hand in a better light than the long faces of Benjamin Netanyahu and his ideological supporters in the United States Congress at the reduced prospects of Armageddon in the Middle East.
Sanity is to be treasured wherever it can be found, not least because it seems a rare commodity. Barack Obama and John Kerry deserve congratulations for standing up against Netanyahu and his supporters in Washington.
One does not have to love the ayatollahs and their theocracy to sympathise with Iran, whose pariah status in its own right could be considered hard-earned, not least over its immoral and expedient support for the regime in Damascus.
But any objective perspective on Iran has to step back to include its opponents in the overview. Why is it that the loudest yelps against Iran’s alleged nuclear capability come from Israel, a state that itself has a large nuclear arsenal? Why do the claims that Iran is a threat to peace come from the same state which has noisily and repeatedly threatened to attack Iran, in between inciting the US to do so?
The West backed a bloody invasion of Iran by Iraq under Saddam Hussein, involving the proven use of chemical weapons and gas. When Saddam invaded Kuwait, the Western powers rammed through the punishing reparations to the Gulf States, which are still being paid by Saddam’s victims, the people of Iraq.
A United Nations commission determined that Iraq was the aggressor against Iran, which was scarcely needed, since it was so obvious. However, when I asked an Iranian diplomat at the UN why it did not leverage that aggression finding into first dibs on the Iraqi compensation payments to the Gulf States, he said that all Iran wanted was the vindication. It puts in context Teheran’s punctiliousness about international recognition of its legal right to have a nuclear enrichment programme, even if it agrees not to exercise it. It is a pattern that befits a theocracy.
India, which is not a signatory to the Non-Proliferation Treaty, developed its nuclear weapons and then voted at the International Atomic Energy Agency to refer Iran to the Security Council for a civil nuclear programme that was within the NPT terms. In return, the US, in effect, gave up nuclear sanctions against India, with its declared arsenal, to enlist support against Iran, which has repeatedly declared it has no ambitions for a weapons programme and whose supreme leader has actually issued a fatwa against them.
Incidentally, while there is undoubted repression of journalists and dissidents in Iran, I actually told Iranian television, live, that even if the Iranians had the legal right to, they should not have a civil nuclear programme because it was environmentally damaging and economically devastating. They have had me back on their screens often since.
One can sincerely doubt whether any country, let alone Iran, needs a civil nuclear programme. Certainly, the costs that British consumers have been saddled with for electricity from the planned nuclear generators should raise questions about how economic such power is.
The cost of energy is clearly a factor in all this. I pointed out on Iranian TV that Iran was importing refined petroleum products because it lacked the technology to process the oil it was pumping.
The Gulf States, whose treatment of religious minorities, women and dissenters makes the ayatollahs seem positively liberated, have been supporting Israeli and the US bellicosity – behind the scenes, of course, since it ill befits the custodian of the two shrines to incite a unbeliever’s attack on a Muslim nation. Would Obama have dared thwart them and the Israeli lobby at the same time if natural gas had not relieved the US from its long-time energy dependence?
We can be pleased that Obama and Kerry have pulled off a deal and averted the immediate threat of war. But why should common sense be such a long-winded process? And how did shallow expedience so often hold it up?

Monday, November 04, 2013

The Wherefores of Romeo- Dallaire that is
The hero who stood fast in the Rwandan bloodbath
by Ian Williams
Tribune  November 1st, 2013

Roméo Dallaire should be the hero of an opera. His story certainly has all hallmarks of genuine tragedy. It embodies many of the key themes of the last century and evokes the Syrian debacle as well.

Dallaire was Force Commander of the United Nations Peacekeeper in Rwanda (UNAMIR) before and during the 1994 genocide. He warned UN headquarters in New York about the planned massacre and sought permission to intervene. The UN bureaucracy did not want to impinge upon “sovereignty” and refused to act without the government – which in reality was planning the massacre.

The bloodbath was presaged by a massacre of Belgian peacekeepers, which led the Belgian government to withdraw its surviving troops, despite the increasingly manifest need as the slaughter of more than 800,000 Rwandans began and continued for more than three horrifying months. Dallaire, along with a small contingent of Ghanaian soldiers and military observers, disobeyed orders to withdraw and remained in Rwanda to protect those who sought refuge with the UN forces and to deter at least some of the killings.

Dallaire’s unwillingness to obey orders and refusal to take the expedient way out cost him dearly. He was shunned by Canadian military colleagues, and, haunted with the memories of the horrors he had seen in Rwanda, had a nervous breakdown. Ethics and a conscience are uncomfortable attributes to have in hierarchies that only have such qualities in homeopathically diluted quantities.

In customary anti-heroic mode, Bill Clinton had signed Presidential Decision Directive 25, which not only limited the involvement of the United States in peacekeeping operations, but in effect led to a US veto on UN peacekeeping resolutions where the US did not have “a dog in the fight”, in the dismissive words of former Secretary of State James Baker.

Clinton was displaying his customary spinelessness, pandering to conservative obsessions about the UN. In these days of obsession with stopping their co-citizens having access to healthcare, it is hard to remember the conservatives’ previous preoccupation with the UN’s threat to American sovereignty. France, that great pillar of human rights in Syria, and upholder of international law over Iraq, was, of course, on the side of the genocidal regime in Rwanda. The UN simply buried the memo from Dallaire and left him swinging, and eventually endorsed a French peacekeeping effort, “operation Turquoise” which was actually a rescue mission to save the murderers from the advancing rebels. Dallaire protested unavailingly.

The left in general stayed silent, although with the enthusiasm of idiocy some, such as Ramsey Clark, rallied to the defence of the genocide, just as they later supported Slobodan Milosevic and excused Srebrenica. Since US imperialism was so ostentatiously absenting itself from the fray, the simplistic left had no point of reference on Rwanda and the deaths at the sharp ends of machetes left the members of it unmoved. It is a sad comment that massacres such Rwanda and Bosnia are not seen as inherently abhorrent but need some sort of litmus test to put them in political context. One can only assume that all the years of apologising for Bolshevik terror and massacres have attenuated the ethical senses of the Leninising left and its fellow travellers.

Dallaire’s ethical senses were more refined. Despite being career military he knew killing people is wrong, and that wherever possible it should be stopped. His heroism is reminiscent of Warrant Officer Hugh Thompson, who landed his helicopter during the My Lai massacre in Vietnam and threatened to shoot the US troops intent on massacring children. He, too, was shunned by his own command and took years to get recognition.

It is not just luxuriating in hindsight to affirm that, if Dallaire had had the go-ahead to seize the weapons and planners of the Rwanda massacre, it would have averted untold suffering.

Similarly, Dallaire recently said that the world should have intervened much sooner to stop events in Syria spiralling out of control. The form of that intervention is a subject worthy of intensive debate. But there can be little doubt that Bashar al Assad’s regime has been emboldened by all those who have peremptorily ruled out any intervention at all.

Saturday, October 19, 2013


The Saudi decision to refuse its Security Council seat is as idiosyncratic as one would expect from an absolute monarchy that names its country after its own clan. It is even possible the King did not know what his foreign ministry was doing when they campaigned for a seat.  The last time Saudi  Arabia made a bid for serious UN glory was in 1991 when its UN Ambassador Samir Shihabi ran for President of the General Assembly, overturning the expected candidate, Papua New Guinea. The quip at the time was that most of the hands raised for the Saudi candidacy had a Rolex on their wrists.

More seriously, it showed the dilemma for a Saudi regime of trying to look after its home constituency and yet pander to its essential foreign backers. One of Shihabi’s first tasks was to preside over the special meeting of the General Assembly called by George H W Bush to rescind the “Zionism is Racism” resolution of the UN. Shihabi absented himself from the meeting - as in fact so did the Israeli ambassador since Israel saw the move as Bush’s attempt to win over AIPAC after refusing the loan guarantees that the Israelis wanted to build settlements with.

That hints at the reasoning behind the shocking decision.  Saudi diplomacy by its very nature has to be somewhat duplicitous. It wants Iran hobbled, for example, but cannot be seen supporting an attack on a Muslim country. On the Israeli issues it would have to confront its existential ally, the US, publicly, or go along with that  many more where its domestic Wahabi base would be unhappy if the Saudi representative voted the foreign ministry’s head rather than the Imam’s heart. So perhaps the decision is not so shocking after all!

On balance, of course, the Security Council will benefit from a Saudi absence. It might be occasionally correct on Middle Eastern issues but on almost everything else it is solidly on the side of reaction with little to recommend it except oil and money.

Thursday, October 10, 2013

Iran, reality impinges in DC
by Ian Williams
Sunday, October 6th, 2013
As Winston Churchill said: “America always does the right thing, but only after it has tried everything else first.” Finally responding to Iranian overtures has taken so long that his dictum has been tested close to destruction. And everything is connected. Apart from the symbolic handshake, American officials and politicians have been dealing with Iran all along.
One cannot help wondering if there were not some subtext on Syria behind the current rapprochement. Iran is one of the few nations in modern times to suffer chemical warfare, and, in their own odd way ,the ayatollahs can be quite principled – as we were reminded at the United Nations, about the fatwa against nuclear weapons. Is it possible that the sarin in Syria might test the Damascus-Teheran axis?
Even so, Barack Obama’s uncritical proclamation of American exceptionalism in his UN speech counterpoints his willingness to talk to Teheran. The latter shows some pragmatic acceptance that other countries than the United States and Israel have domestic policies with which their leaders have to cope with. The occasion recalls one of the better US ambassadors to the UN, Bill Richardson, who looked puzzled when questioned why other countries should accept a US offer to pay some of its arrears to the UN, but leave hundreds of millions owing. “But Congress has passed this.” Even such liberal and well-meaning statesman had difficulty accepting that there was anything between Capitol Hill and heaven, which puts into context Obama’s original thought that if Congress approved air raids on Syria, why would the UN be involved?
Mark Twain averred: “It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress.” Successive generations of representatives have reinforced his point with their votes. But the contemporary breed has a particularly obtuse outlook in which the criminality is permeated with an ideological rigour that is disturbing because the stench of corruption is (only partially) masked with the whiff of sanctimony.
If Obama had gone to Congress for support to bomb Syria without a UN resolution, then some legislators would have opposed it because of its illegality. But diehard conservatives would have opposed it because they have written the Good Samaritan out of their texts. They do not see that is any of America’s business what is being done in a far away country of which they genuinely know little and care less. Indeed, their phobia about “Obamacare” shows that they do not care much about suffering at home.
However, American conservatism is not monolithic. The neo-conservatives, as their name implies, are new. Unusually, their focus is on foreign policy, as befits their Trotskyist antecedents, and they now substitute a pro-Israel and anti-Islamist sensibility for their former rabid anti-communism. The older conservatives draw on the isolationist trends that kept the US out of the League of Nations and the Second World War for so long.
The spectrum is varied. Principles are fine, but a lot of them depend on domestic lobbies to be re-elected. So neo-cons and older conservatives alike will go along with powerful campaign funders such as the defence industry lobby. Some of the libertarian right are so firmly isolationist that they defy their conservative colleagues and oppose intervention even when Israel wants it.
Which, sort of, brings us back to Iran. Benjamin Netanyahu is on his way to Washington, and is unhappy with the idea of any kind of a deal with Iran. It is remotely possible that Obama will finally tell the arrogant Likudnik that the tail does not always wag the dog. It will be difficult, and diplomatically stupid, for the administration to withdraw from a deal brokered with the Russians and Europeans. But will the Palestinians end up paying the price, with yet more concessions ton settlements and arms aid? John Kerry’s willingness to chastise the European Union over embargoes on settlements is a reminder of the lobby-trimmed limits to ethics in US foreign policy.
So the shifts in foreign policy might not be as tectonic as one would hope, but any concession to global reality in the face of domestic lobbying has to be a step forward.

Wednesday, September 25, 2013

The Decline of the American Mugging.

Muggers took my Wall Street Journal

A read of the paper would suggest easier and less risky ways to steal, reflects Ian Williams

It had been years since any armed mugging in my part of Manhattan. That must be why local mugging skills are as attenuated as I discovered. After all, people lose their job habits and aptitudes if kept from practicing them for too long.

Such were my thoughts, albeit a little fuzzily focused, when I regained consciousness flat on my back in the wet, squinting up into the muzzle of a pistol that a young chap was pointing waveringly between my eyes while demanding: ‘Yo man! Gimme the money!’

Moments before I had been striding briskly down 155th Street, next to the old Trinity graveyard, whose signs claim it to be a ‘working cemetery’, a description that has always seemed quasi-oxymoronic to me. (No longer toiling there was Ed Koch, the mayor under whom New York reached its zenith of muggings, and who was recently entombed at Trinity.) Then these two knaves had jumped me from behind and conked me on the head with the pistol they were now waving in my face.

My primary emotion was indignation. ‘Yo!’? Whatever happened to ‘Excuse me’? Not to mention ‘Stand and deliver’ and similar formulations. You do not knock someone out from behind and then seek their co-operation in handing over valuables. Even when non-concussed I can never find which pocket I put my wallet in.

And so, wallowing on the ground thrashing like an upended turtle as I tried to get up, I started yelling, ‘Help! Police! Help!’ I was pleased to discover that even without proper use of my arms and legs, my diaphragm was in full working order. Instead of frisking me, the perp was too scared to get within grabbing distance, so he snatched my attaché case and ran off with his accomplice.

I did a quick inventory of my possessions. Mont Blanc fountain pen: check. New BlackBerry: check. Raymond Weil wristwatch: check. Wallet, with cash for once as well as the plastic credit cards on which I usually rely: check. Key fob, including the transponder for the car parked, ironically, 20 yards from where the incompetents pounced: check.

Missing was the case which held the Wall Street Journal and a copy of the New Scientist. The police later retrieved the discarded New Scientist, but the perps had walked with the WSJ. I could not help thinking there was some sort of parable here. The miscreants had discarded real science for the WSJ’s dismal version of it.

My agent was quite taken with the idea of Harlem muggers making off with the WSJ, and pitched the story to an editor there – but maybe they suspected I had not taken the appropriate blood oath to Murdoch and Mammon. The word came that it would indeed be publishable, but only if I rewrote it as a hymn of praise for the NYPD’s stop-and-frisk policy, which a week later a judge ruled unconstitutional.

I was unconvinced by the rhetoric from the police chief. If his policy was so successful, where had the pistol I felt and saw come from? In reality, crime tends to follow economic cycles more closely than police policy posturing.

On the bright side, if they had read the paper, my muggers might have realized that risking a life sentence for armed robbery is a mug’s game. The stories of SEC ‘agreed’ settlements might have persuaded them that there were easier – and much less risky – ways to loot the citizenry.

Having said that, if they had read on to the op-ed pages they might well have felt philosophically justified in mugging people on sound Randian principles, and in resisting any government attempts to interfere in the free market by regulating the practice.

Tuesday, September 24, 2013

US's Diplomatic Disarmament

United Nations Report

Decades of Knee-Jerk Vetos for Israel Limit U.S. Options on Syria at the U.N.

By Ian Williams

Members of the United Nations Commission on Inquiry on Syria (l-r) Carla del Ponte of Switzerland, American Karen Konig Abuzayd, chairman Paulo Sergio Pinheiro of Brazil, and Thailand’s Vitit Muntarbhorn arrive at a Sept. 16, 2013 press conference following the presentation of the commission’s report to Human Rights Council members in Geneva. (Fabrice Coffrini/AFP/Getty Images)
Syrians are the victims of a smorgasbord of global double dealing and hypocrisy that exceeds the sad standards we have become used to in this century. The arguments have seen some unlikely alliances in the West. In support of intervention are people who are genuinely concerned at the plight of Syria’s suffering people, along with those who are happy to cheer Israeli bombings of Syrian, Palestinian and Lebanese people. The presence of these latter ghouls in the pro-intervention camp should give anyone pause, along with their like-minded neocon friends who want the Pentagon to use all that smart and lethal military technology.
On the other hand, we have conservative isolationists who really do not see it is as our business if foreigners are killing each other in faraway places of which they know little, and they are arm in arm with radical leftists. Once upon a time, the left preached proletarian internationalism, workers in unity across national boundaries, sending volunteers to Spain, calling for the opening of a Second Front in Europe and applauding foreign aid to the Viet Cong. In this new era of what we should puckishly call socialist nationalism, a country’s sovereignty is sacred and unimpeachable—at least if threatened by any Western power. So they come to the same conclusion as the right: let them rot.
The United Nations is used as a tool by both sides. It has been honorable but ineffective. Ban Ki-moon has actually repeatedly emphasized the horror of what has happened while eschewing Washington’s unilateralism.
Indeed, some of those who oppose intervention will piously point to the need for Security Council authorization before any action is taken against Syria, or Serbia, or Sudan. But if the U.N. does authorize action, those people will oppose it just as fervently! For the dying Syrians, the U.N. must seem thoroughly irrelevant, but it is the cockpit in which their case is being fought. Russia, a weaker power with a Security Council veto, cites the organization continuously as the necessary legitimation for action against Syria, clinging to the literal legality of U.N. obligations while being insouciant of the spirit.
President Barack Obama has been puzzlingly imprecise about U.S. attitudes to the world body, perhaps reflecting a battle inside his team with the neocons who see the U.N. as an instrument to be used when it suits them but cast aside when inconvenient. Obama’s reputation will take considerable time to recover from his initial gaffe of suggesting that the U.S. would not wait for the U.N. inspectors’ report on chemical weapons use in Damascus. After the brief post-Bush honeymoon, it is obvious that Washington’s lucid moment about the U.N. and international law has come to an end.
One would like to think that the British House of Commons vote against intervention—from the parliament that declared war on Hitler because he had invaded Poland—was not simply an expression of isolationism, but also a comment on legality. Both Cameron and Obama had signaled their willingness to attack without the U.N. report, let alone a U.N. mandate.
The members of parliament also voted in a context in which it is universally admitted that Tony Blair and Bush lied to secure support for their disastrous attack on Iraq, and in which maladroit and insincere leadership turned a bad dream into a nightmare, and turned the intervention in Afghanistan—which was legal—into a total disaster.
The framers of the concept of Responsibility to Protect—R2P, as it became known in diplomatic shorthand in the age of text and Twitter—were well aware of the pitfalls, and their document anticipated most of the perils that face its honest application. Few countries are unalloyed emulators of the Good Samaritan: they do not like risking their own citizens’ lives and taxpayers’ finances in a good cause. One might remember that the U.S. sent the bill for Desert Storm to the Gulf states, who sent on their claims to be paid with Iraqi reparations.
But the palpable disasters of Iraq and Afghanistan raise the question of who can be entrusted to run such operations? Under R2P, the time to intervene in Syria was two years ago, when the Assad regime began to massacre demonstrators. The U.S. dithered, militarily and diplomatically, emulating former Secretary of State James Baker when he said of the Balkans that the U.S. “has no dog in this fight.” Some decision makers were weighing on varying scales whether it was good for Israel or bad for Iran, and the really cynical concluded that an endless civil war eviscerating an Arab neighbor to Israel just had to be good thing.
In the end, of course, the precipitating event was the chemical weapons attack which crossed the red line that Obama probably now wishes he had not drawn in the sand. This horrific attack diverted attention from R2P to the chemical weapons issue, and allowed unusually adroit Russian diplomacy to switch the issue from the regime’s killing with mere physical impact weaponry to the chemical weapons. Before, the issue was whether to use military force under R2P to protect civilians, with or without a U.N. mandate. Now it has become simply chemical disarmament.
To the dead, it might count as irrelevant whether they were charred with napalm, burnt alive with white phosphorus, shelled in a marketplace or disintegrated by drones dropping bombs from on high.
Syria had not hitherto signed the conventions banning chemical and biological weapons, one reason being that it had neighbors—notably Iraq and Israel—who also had not. Interestingly, the Israeli government is happy that Syria might be disarmed, but less ecstatic about Damascus ratifying the convention, since that raises the question of why poor little Israel has not—not to mention the nuclear issue! Indeed, the U.S. itself was a relatively late signatory to the convention.
Even then, there was something very Israeli in tone about the idea of massive air-strikes to “punish” the regime. Its sole purpose was to insulate Obama from the charges that he was doing nothing. Bombing the chemical and biological weapons stocks carries fairly obvious risks. The chances of massive casualties for the civilians who are being “protected” are very high, while the denial of any intention of regime change misses the point. How else does one stop the regime massacring its citizenry without changing it? Apart from warming the cold hearts of those who always applaud bombings of Arabs and Muslims, it is difficult to see any point in the threatened exercise.
In an ideal world, a surgical military strike to take out the regime might have stopped the killing, but that is far too late, and the only country with the wherewithal to do it, the U.S., is manifestly unsuited for the role after recent experiences, even in the unlikely event that it could persuade its fellow U.N. members to entrust it with a mandate.

Past Humiliations

Moscow’s cooperation over the chemical issue might raise other possibilities. Rus­sian attitudes need to be put into historical and diplomatic context. Yes, there is the basic immorality of support for Assad (as for Qaddafi and Milosevic before). But Foreign Minister Sergei Lavrov was Russia’s man at the U.N. after the first Iraq war, in which Moscow cooperated in the spirit of the New World Order. It was regularly humiliated by seeing its views set aside and resolutions with which it had originally colluded being stretched to justify actions, bombings, embargos and the economic destruction of a nation and people, well beyond any reasonable reading of the resolutions. Lying Western leaders bypassed Russia for the second Iraq war, and again in Libya, when reluctantly conceding a principle on R2P Moscow once again was ignored in the operation’s execution. Western behavior has indeed been such as to justify some degree of paranoia! Bush and Blair’s precedents of taking such phrases beyond the limits certainly explains Moscow’s reluctance to see any mention of forcible intervention, even in a chemical disarmament resolution.
The fact remains, however, that Lavrov has effectively thwarted the U.S. push—which entailed, one suspects, some heavy pressure by Moscow on its ally in Damascus, including a threat of withdrawal of support. Sadly this shows what President Vladimir Putin could have achieved earlier but chose not to, so there are no haloes on offer.
And then we come to continuing hypocrisy. U.N. Ambassador Samantha Power in September was defending the possibility of intervening without the approval of the U.N. Security Council. However, Washington can try to get a resolution at an Emergency Special General Assembly, under the “Uniting for Peace” resolution designed precisely to bypass a vetoed Council. The two reasons for not doing so illustrate the lamentable cumulative effects of American undiplomacy over the decades. Ironically, to assemble the alleged “Coalition of the Willing” in Iraq, the isolationists of the Bush administration carefully courted, albeit via a somewhat rough wooing, many small nations, as did then-U.N. Ambassador John Bolton in his quasi-theological crusade to thwart the International Criminal Court.
Since the Obama administration is much less single-minded on Syria, it has not devoted similar resources. A Coalition of the Dithering somehow lacks focus. Most perniciously of all, however, the canker of reflexive support for Israel has led the U.S., under both Republican and Democrat administrations, to deny the legal validity of the very process it had pioneered to fight the Korean War despite the Soviet veto. The reason for that denial, of course, is that the Palestinians had rediscovered the technique to combat the automatic U.S. veto on behalf of Israel. Washington has therefore sacrificed a valuable legal and diplomatic lever—which, by contagion, tempts it to illegal action.
A General Assembly resolution calling for an arms embargo might not have “legal” effect, but it certainly would have a profound diplomatic and moral effect on Moscow. It could also signal exasperation with Washington’s Gulf allies and their support for the Salafist wing of the opposition, whose sanguinary and shameless efforts have given Damascus such a propaganda coup. But Washington shows no signs of sacrificing its other interests for a bunch of dying and dispossessed Syrians by threatening sanctions against Russia or the Gulf.
Sadly, however, while the U.N. can now offer hospice care to Syria and help it to survive, there is no miracle cure in sight. Through its agencies it can help the refugees and the internally displaced, and it can provide inspectors and mechanisms to implement a cease-fire if Kerry and Lavrov can pull one off. It will certainly be part of any solution—but there are no unmitigatedly happy endings in view.

Good Wars and Bad Anti-War?

Washington Report on Middle East Affairs, September 2013, Pages 29, 34Special ReportDueling Principles: National Sovereignty Vs. Responsibility to ProtectBy Ian Williams

Accurate history is messy, because reality is messy—and that is no more apparent than over Syria. The lines between good and bad are never as clear and bold as we would like. Take the example of the Second World War, which most of us accept as about as clear-cut a battle between good and evil as one could conjure up—and so it was, in very broad brush strokes.
But that war was won with the aid of a brutal Soviet Union, which from 1939 was an effective ally of its later enemy, Nazi Germany, and which had, by 1941, far more blood on its hands than did Hitler’s regime. After the war, both sides overlooked collaborators and propped up regimes that left little to choice. In East Germany, first the KGB and then the Stasis took over Gestapo establishments and persecuted opponents with equal fervor—and on occasion the same opponents!
However, as Orwell said, in most wars one side stands more or less for progress, and in the case of the Second World War, that was the Allied side. While the United Nations that emerged from the war has many resemblances to the former League of Nations, there were fundamental differences in its approach. Following the First World War Europe’s former nation states were dissolving, so under the influence of Woodrow Wilson, the League oversaw plebiscites and referenda that dismembered sovereign nation states, with some respect for self-determination of the peoples. One could argue that the multinational Ottoman and Hapsburg realms had more to offer the future of humanity than their squabbling sanguinary successor states, but that is for another time.
There were major exclusions to the application of the principle of self-determination: Wilson was, after all, a racist Southern Dixiecrat, albeit more cerebral than most. In Europe, German speakers discovered that the rules did not apply to them, and in the rest of the world Arabs, Kurds and others soon discovered that the Great Powers were “only kidding.”
It was this period that saw the invention of Syria, Lebanon, Jordan and Jewish nationality as opposed to confessionality. When dealing with concepts so subjective and fuzzy it is hardly surprising that logic was lacking, however. Greek-speaking Muslims became Turks, Turkish-speaking Orthodox became Greeks, and Catholic Lebanese/Syrians tried to become French, while other Christian Arabs helped invent Arab nationalism.
The Second World War showed little respect for national self-determination, as peoples from the Baltics southward discovered, and of course the Germans paid all over again. But once the mayhem was done and the boundaries adjusted, the foundational principle of the United Nations was the sanctity of state sovereignty and boundaries—no matter how illogical.
This amounted to restoration of an old principle, enshrined in the messy pragmatic details of the Treaty of Wesphalia that ended Europe’s Thirty-Year War—that of national sovereignty. In the context of the time, it meant that if a monarch was Catholic and persecuting his Protestant subjects, or vice versa, it was nobody else’s business.
Generalized and refined, that principle is now enshrined in the U.N. Charter as “all Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state,” and of course emphasized in Security Council Resolution 242 as  “the inadmissibility of the acquisition of territory by force.”
That is why, since the arbitrary redrawings of boundaries at the end of World War II, aggressors like Indonesia in East Timor, Morocco in Western Sahara, Iraq in Kuwait, and of course Israel in  Palestine have never been able to gain legal recognition of their conquests. It is why, only recently, a federal court ruled that the State Department could refuse to put “Jerusalem, Israel,” as the place of birth on U.S. passports for Americans who want to have their Aliyah and eat it, too.
Ironically, however, while under old style international law Palestinians living in Gaza can claim protection under the Geneva Conventions—even if it does not help them much—Syrians being shelled and strafed by their own regime cannot.
However, since then-Secretary-General Kofi Annan steered the “Responsibility to Protect” (R2P) concept through the 2005 General Assembly, international law has changed, building on the International Criminal Court and its jurisdiction. The international community can now hold governments responsible for their failure to protect their own populations and indeed hold them to account for persecuting their “own” citizens.
The big problem with humanitarian intervention, even when called “Responsibility to Protect,” is that it is susceptible to expedient abuse. Hitler justified intervention in Czechoslovakia on the grounds of mistreatment of the Sudeten Germans, who had indeed been denied their right to self-determination in the Versailles settlement. Tony Blair invoked the plight of Iraqi civilians to justify his and George Bush’s crusade against Iraq.
Russia, while it voted with the rest of the world on the general principle of R2P, invokes national sovereignty to ensure that it cannot be effectively implemented, at least against its allies. As in Libya, Moscow can draw support from the ineptitude of American diplomacy, which stands self-evidently guilty of egregious hypocrisy in its dealings with, above all, the Middle East.
Syria, but not Palestine
So, while Washington has been instrumental in preventing effective action to stop Israel’s mistreatment of the Palestinians in the occupied territories, American politicians are wringing their hands and saying “something must be done” about Syria. Perhaps the sole concession to rationality is that, apart from the lunatic neocons who gave us Iraq,  there seems to be a general concession that U.S. forces cannot play a prominent role in intervention. On the other hand, U.S. diplomacy for decades seems to have specialized in rubbing the wrong way all the other major players, like Iran and Russia.
Washington’s inaction is made easier because of public confusion about who the good guys are, and Russian media in particular highlight the barbarisms committed by the fundamentalists in the Syrian opposition. There is, sadly, much to highlight. However, that does not negate the reality that the Assad regime began by attacking unarmed protesters and since then has sought to win hearts and minds by bombing and shelling its own cities. Certainly some of the opposition have carried out atrocities, but the regime as a whole has pursued a policy of violent wholesale repression.
The reason so many oppose Assad’s regime is because it is ruthless and murderous—so there is absolutely no excuse not to denounce such behavior when committed by some of “our” side. Indeed, there is even more reason to do so, since to be silent implies complicity.
One other, almost unrecognized act of non-partisan balance has come from the U.N., in its reports on Syria, which suggest that people on both sides have used chemical weapons and violated human rights. It has resisted attempts to provide the smoking chemical canisters that neocon hawks pine for, even though it has indeed made plain that the balance of crimes weighs heavily down on the regime side. Human Rights Commissioner Navi Pillay has called for an investigation into credible allegations of murders by fundamentalist elements of the opposition.
The human rights bodies of the U.N. have often made for strange bedmates. Iran, Syria, Libya and Iraq, when they were each embroiled in bitter conflicts between them, always seemed to unite to ensure that human rights pariahs were represented on the Human Rights Committee and its successor Council. However, their active conspiracy could not survive without the tacit connivance of other members. This year only seven countries—China, Iran, Jordan, Maldives, Saudi Arabia, Syria and Vietnam—were candidates for the four Asian seats on the Human Rights Council.
Pro-Israel activists harp on about Iran and Syria, because they are more actively anti-Israel than the others. But none of them really pass muster. The Maldives is the only one that has any serious pretensions to democracy, and even there a semi-coup recently took place.
If countries with pretensions to human rights and democracy cannot bring themselves to stand for such positions, one can see the difficulties in corralling together an effective bloc that could intervene in Syria. Sadly, short of spillover into neighboring countries, it is difficult to see what motivation could inspire such a coalition, diplomatic or military.
And the one “indispensable country” that could at least inspire, if not lead, such a move is hopelessly compromised by its record of partisanship in the region. But at the very least, armed with Pillay’s demonstrable non-partisan commitment to human rights, the Security Council should mandate International Criminal Court investigations into crimes by both sides in Syria.

Ian Williams is a free-lance journalist based at the United Nations who blogs at <>.

Friday, September 06, 2013

Roads to Damascus


Intervention intentions and a credible Syrian course
by Ian Williams
Tribyne Friday, September 6th, 2013
Defenders of dictators throughout the world have made non-intervention a point of alleged principle. It camouflages their record of callous disregard of the suffering of people at the hands of thugs who invoke “anti-imperialist” rhetoric to cover their murders. On the other hand, some proponents of intervention are clearly not motivated by the suffering of Syrian civilians. That should not detract from the overwhelming moral and legal justification for international action to stop the murderous activities of the Syrian regime. However, while is there plenty of scope for uneasy consciences as the world has stood by and watched the regime’s depredations, we must beware of would-be brain surgeons carrying sledgehammers, whose motives and methods are equally dubious.
Even the better-intentioned often seem to be in the “something must be done” school of politics, sending a message to domestic constituencies. Barack Obama has put himself in that camp, committing himself to “punish” Bashar al-Assad, with no clear outcome to the action except defiance of the United Nations and the rule of the international law invoked against Damascus, as well as risking the sort of devastation caused by the Iraq war and its aftermath.
Obama has implicitly joined the neo-conservative ideologues who want “action” and punitive bombing because they want to send a “signal” to Iran and a message of support to Israel.
There have been comparisons with Kosovo, but the key intervention there was not the bombing campaign, which was conducted from high altitude to allow Bill Clinton to show that he was “doing something” while not risking the domestic fallout of shot-down American pilots. It was the threat of ground forces moving in caused Slobodan Milosevic to run up the white flag.
There are, of course, international conventions against chemical weapons, but killing so many innocent people, whether with cluster munitions, as still issued to the United States military, phosphorus (as used in Gaza), or napalm, is equally reprehensible and such actions are surely covered by the Responsibility to Protect doctrine. And, as Tony Blair and George W Bush graphically demonstrated, the principle of humanitarian intervention is susceptible to partisan interpretation, which is why it has to be applied so cautiously.
The Syrian people are victims, not only of Assad’s ruthless reluctance to cede power, but also of disastrous diplomatic decisions by the West. Russia’s stance is not excusable but understandable in the context of constant American snubs. But Russian support for Assad is as indefensible as unqualified American support for Israel, which poisons every diplomatic initiative in the region. The US now disdains the UN’s Uniting For Peace procedure under which the Korean War was fought, because the Palestinians have used it to bypass the automatic American veto in support of Israel.
The Israel connection also stops Washington dealing rationally with Teheran. As victims of (Western-backed) chemical attacks, even the Iranians might be open to discussion. The Israeli connection should give pause to any American involvement in military intervention. The US might have the military resources, but its record shows that it is not ideologically or politically equipped to meddle directly in Arab and Muslim affairs.
It is not enough to shout “No to intervention”. Nor is it enough to bleat about diplomacy – only a credible military threat might bring Assad to reasonable negotiations. A regime implicated in chemical warfare might amount to a diplomatic weapon for use by any UN members genuinely concerned. Members of the Security Council should and tell both Moscow and Washington that, Israeli concerns notwithstanding, they will take the issue to the General Assembly under the Uniting for Peace procedure if Russia uses its veto.
Since Vladimir Putin’s stance is as much about face as love for Assad, the prospect of defeat in the court of world opinion might make him more amenable to joint action.
The British Parliament’s declaration of independence, backed by other countries, could give Obama the cover he needs to face off the neo-cons and the Israel lobby over ill-considered intervention and yet win some agreement from traditionally isolationist Americans that some considered investment in Syria is necessary.

Saturday, August 10, 2013

More CEO Mayhem

Comment: pushing back against buybacks

Investor Relations magazine | 29 Jul 2013 | RatingRating (-1 to +1): 0.0 | Print

The buy backs argument isn’t self-evident

Particularly in the US, boards boast of ‘returning money’ to shareholders by buying back their own stock. Many regard the good sense of this tactic as being self-evident – but then, many also accepted that egregiously inflated CEO pay and adjustment of their underwater options was self-evidently to their benefit. Indeed, one suspects it is the same class of Panglossian investor that enthusiastically embraces M&A one year, divestment the next as winning strategies, and thinks refusal to pay dividends on ‘growth stocks’ is obviously in their interest.

When those growth stocks entered a catastrophic negative growth phase, many disillusioned investors wished they had dividends to invest elsewhere rather than leaving large sums to evaporate. Commentators on buybacks nod sagely as they explain the fiscal efficiency of stock repurchase over dividends because there is less tax on capital appreciation than on dividends. But what John Maynard Keynes said about economic prognostication applies to much investment analysis: its purpose is to make astrology look good.

Firstly, many investors – indeed, possibly most stockholders – are tax-exempt pension funds, endowments and not-for-profits of various kinds, which are not going to pay tax on their income. Even for those that might, however, the difference in the tax rates is so marginal as to be hardly worth worrying about, even if buybacks actually translated into visible cash for investors.

None of this is not self-evident. Theoretically, the reduction in the amount of tradable stock and the upward pressure from the purchases raise the stock price in the market, which then offers added value if and when the holder sells. Well, perhaps – but it seems a long shot, and even the paid coterie of compliant apologist analysts cannot compute a clear empirical correlation. Burning a pinch of incense on the altar of Mammon probably has as demonstrable a practical effect.

I used to think the real purpose of buybacks was to disguise the dilutive depredations on the outstanding stock of options issued to insiders. There is indeed a remarkable correlation between options and buybacks. This way the directors got a multiple halo effect: they avoid dilution, disguise the amount they are costing shareholders, and pretend to enrich the latter even as they pick their pockets.

If most of the stock bought with company money is then given away free to management, the financial effect on the market price is neutral. That does not stop people believing in the buyback effect, however. Certainly a public revelation that stock options for executives were costing the firm billions might not have been good for a company’s image or share price, as we can deduce from the hundreds of millions spent combating legislation and regulation to force firms to ‘expense’ such arrangements in the company statements. Lest we forget, ‘expensing’ was the euphemism for showing, transparently, how much executives took from shareholders.

But now there are extra reasons, and it goes deeper than even I suspected. There is indeed a quantifiable effect: reducing the number of shares increases the EPS, which might have some downstream effect on stock prices. But it definitely – and rather rapidly – clicks up progress in another part of the spreadsheet: executive options calculated on that number.

Now, call me a grouchy old cynic, but could this be a consequence of the 2006 rules mandating expensing and say-on-pay results? Needy executives then had to show they had earned the extra options they were raking in, and EPS is a plausibly solid metric to show restless shareholders, who might not notice that the S&P 500 spent $400 bn on share buybacks last year, boosting EPS to more than 6 percent, while the companies’ actual net income only grew 5 percent – and CEO options rose to record heights. I can’t help but suspect a closer statistical relationship here than between stock buybacks and rising share prices.

Friday, July 12, 2013

Primary Blues


The New York Labour Party International branch has just reconstituted itself. In the old days, many of its members saw their task as greeting visiting New Labour dignitaries, seizing their rose-tinted glasses  and  holding onto them until
they left. Senior MPs came to study (heaven help us) the American prison and healthcare systems, for example. In their happier moments together, we
even greeted Tony Blair and Gordon Brown, come to study Bill Clinton’s electoral successes.
Now we hear that Ed Miliband has imported a minor Chicago ward-heeler, Arnie Graf, to emulate Barrack Obama – and that he advocates “open primaries”. There is something inherently slavish in this deferential abasement before American ideas – not least when one sees the results of those ideas: the only country apart from Somalia with no paid maternity leave, no sick pay, no entitlement to holiday pay and poverty levels unsurpassed in the industrialised world. It is true that Obamacare has dragged the health system in the United States kicking and screaming to about the same place Bismarck brought Germany at the end of the 19th century, but the compromises to the powerful health insurance lobby have almost crippled it at birth. The power of those lobbies derives very much from primary elections, not least the latest fashion for open primaries which Graf is recommending. They constitute the major route by which money exercises its pernicious influence in American politics. It is the need of a presidential candidate to raise a billion dollars that forces Obama to give the banks, insurance companies and others so much sway in decision making.
If Americans register to vote,  they can declare whether they are registered Democrats or Republicans, or one of the lesser parties. Some register as independents. Originally the idea was to take selections of candidates out of the smoke-filled rooms of Tammany Hall-style corrupt cabals. Registration does not involve any payment of dues, or commitment to ideologies, nor give any say in framing policies, but it does allow voting in the primary elections to select the parties’ candidates.
The candidates run in their own right, without party support. That means that the individuals who run have to raise their own cash. New York Mayor Michael Bloomberg, previously registered as a Democrat, decided to run on as a Republican because there were so few registered Republican voters in New
York – it was easier for him to buy the nomination.
Primary elections swallow cash: they involve television and radio adverts, paying campaign workers and all the costs of a general election – which the candidate have to raise themselves. Unsurprisingly, they usually raise it from people who have money. In other parts of the US, they moved to open primaries as pushed by Graf on a receptive Labour leadership. In the British context, this means that Tory and Liberal Democrat supporters can vote in the selection of the Labour candidate. As in all primaries, it means that monied interests can swamp a contest to stop anyone they see as a threat – which one hopes would include almost any Labour candidate most of us would like to see elected. The examples in the US are so egregious that the idea should be dismissed almost immediately.
But then, we have our own examples. Lord Levy allegedly bankrolled Tony Blair’s leadership campaign, in which all party members voted, because it was “good for Israel”. John Prescott had to pay his own expenses. Imagine the costs of running public campaigns. Wrong in principle and pernicious in practice, the Labour Party needs primaries like it needs Silvio Berlusconi as a consultant. ”
Labour does need to reconsider its organisation, and Graf has some useful ideas about grassroots campaigns. But there are many in the United Kingdom who have equal and more relevant expertise – whose independence of mind would make them unwelcome to the Progress infiltrators in the party organisation. Above all, primaries would open the last barrier to self-indulgent affluent individuals and groups with chequebooks, and ideas that do not necessarily harmonise with what we would like to think of as the traditional Labour ideas. There is no more sense in emulating the dysfunctional US political system than in copying its disastrous healthcare and prison complexes.

Thursday, July 11, 2013

Charles Glass interview on CRoB

PLAY The Deserters
Broadcast on WJFF  3:30 July 5 2013
Charles Glass, The Deserters

Tuesday, June 18, 2013

Stating the Case.

Speculator Column, IR magazine

  4 Jun 2013

Finding chinks in the armor of the Iron Lady’s legacy 

Margaret Thatcher’s death in April revived discussion of state ownership of industries. The New York Times always described Mrs T as ‘the prime minister who privatized the loss-making state industries’. In reality, she was careful to sell only those that were very profitable, otherwise her friends in the City would not have been so eager to snap them up.

That well-known Bolshevik Winston Churchill nationalized BP, which was making untold millions for the Treasury by the time Mrs T sold it. The utilities that were privatized were no more efficient after the event than before, and usually inflicted much higher charges on their captive customers.

The same management teams that had led the state enterprises kept their desks but tended to pay themselves much more, despite mediocre results. In the modern version of shareholder capitalism, they escaped the political scrutiny of both parliament and citizenry and swapped it for the benign insouciance of money managers.

It’s true that in some countries state industries were channels of patronage and corruption, but the industries Thatcher sold were not among them. They did have strong unions, but for most of the post-war period those unions co-operated in productivity measures and closures, as well as huge reductions in employees. Industries like British Rail lost three quarters of their workers under state control, and these workers tended to be low paid anyway, as governments used them to hold down pay rates and allegedly control inflation.

If the British state industries had a fault, it was not inherent in their form of ownership, but rather that the permanent government of Treasury civil servants starved them of investment, and thus productivity, in order to reduce the Public Sector Borrowing Requirement (PSBR). The PSBR was, and is, an irrelevant shibboleth, as if there were no difference between borrowing to finance investment and selling bonds to finance day-to-day government operations. Indeed, that was one of the stated reasons for privatizing British Telecom: bringing the antiquated telephone network up to date would have needed huge amounts of public investment.

Thanks to Mrs T, in the 1980s, competing parallel universes to the left and the right called for the nationalization of strategic industries, or liberating business from the ‘tyranny of the state’. Both were, and are, utterly detached from reality, as indeed is much of the discussion now.

In the real world, the governments of countries like Singapore, Norway or other oil states now hold huge stakes in British and American industry, without any diminution of business efficiency. Wall Street travels to work on the public-owned MTA and PATH trains and, in between glasses of Champagne, drinks water supplied by New York City. The Street lacked enthusiasm to invest in a 50-year water tunnel building program, but it is not reticent in its acceptance of Uncle Sam’s cash in times of crisis, as long as it comes untrammeled by ownership and control.

Back in Britain, one of Mrs T’s successes was the privatization of the Trustee Savings Bank, until the courts ruled it was owned by its clients, not the government. The proceeds of the sale to Lloyds had to be returned to those clients.

But these models can be Procrustean. If a state enterprise makes money it is either sold or milked to make it fit the privatizers’ paradigm. Now that Fannie Mae and Freddy Mac are making money for the US Treasury, we can be sure calls to sell them will follow – and soon. The US Postal Service (USPS) made money until ideological Congressmen forced it to prefund its employee health plans for 75 years, to pave the way for privatization.

One potential beneficiary of USPS dismemberment would be DHL – owned by the state-owned German Postal Service! There may be a rationale here, but it got lost in the mail somewhere.

Thursday, June 13, 2013

Looking back to Spain, and sideways to Syria

 Tribune 14 June 2013

 Ian Williams

George Orwell understood that ignoring obvious horrors for expediency’s sake is a roadblock to justice.

OrwellThe New Statesman recently reminisced about its former editor Kingsley Martin’s feud with Tribune’s former literary editor George Orwell about the latter’s attempt to tell the whole truth about the Spanish War. Martin preferred the commodity doled out sparingly, for which Orwell never forgave him.
Like many people who would otherwise swear by the truth as an abstract principle, Martin made it a partisan issue for the “cause.” Orwell, of course, often defied such criticism: that to tell the truth would harm the war effort, or harm unity with the part of the so-called left that had tried to kill him in Spain and was busily executing Socialists across Eastern Europe. Interestingly, twenty years after the fall of the Soviet Union, its ghosts haunt Orwell’s reputation yet, with vitriolic detractors whose ad-hominem hatred has almost forgotten its original roots in the purges and now uncontested mass murders of the era.
Veracity as a sacred principle has lots of small-print exceptions for so many people. It would be “bad for Israel,” or bad for the Palestinians. Over years of writing, I’ve been told I couldn’t say “that” about Militant in Liverpool, New Labour, UN corruption, and many other causes. In an eerie echo of Martin in the Statesman, I was told that the Nation in the US had a line, so we could not write anything about intervention in Kosovo that was not outright condemnation. It would “aid imperialism” to say that Slobodan Milosevic built his power on unleashing genocidal impulses.
The Hapsburg lip allegedly led generations of sycophantic dons into emulatory lisps -- which is a minor lapse -- the compared to all those who joined committees to “defend” Rwandan and Balkan mass murderers against “imperialist” justice.
All of us practice a partial vision some extent. Someone might indeed be very ugly, but it behooves us not to point that out. But like the emperor with his new clothes, if such a political figure poses publicly, then it is indeed a writer’s duty to mention their absence of raiment.
Recent weeks have seen some outstanding examples of reckless candour that deserve applause and support. Bradley Manning revealed clear examples of crimes by the Pentagon, notably the murder of a Reuters camera team in Baghdad and the gunning down of innocent civilians coming to help the wounded. It is worth recalling that the Pentagon lied to Reuter’s legal Freedom of Information request by claiming the video was lost.
He deserves all-out support from journalists, not the mumbling diffidence of the New York Times that published his revelations while abandoning their source. Similarly, one hopes that revelations that Edward Snowden supported deranged libertarian right-winger Ron Paul will not detract from support for his deed revealing, dare one say, Orwellian, government surveillance that would have Big Brother green with envy!
One other, almost unrecognised act of non-partisan balance, has come from the UN, in its reports on Syria, which suggest that people on both sides have used chemical weapons and violated human rights. It has resisted attempts to provide the smoking chemical canisters that neocon hawks would like, even though it has indeed made plain that the balance of crimes weighs heavily down on the regime side.
The parallels with Spain are painful. Most atrocities from the rebel side in Syria seem to be associated with their version of the International Brigades, which include fundamentalists coming in to “help.” This week, Russia Today quite correctly reported on their execution of a young Syrian for “heresy.” Somewhat less correctly, RT maintains complete silence on the regime’s mass killings of civilians and opponents.
Orwell’s commitment to the defeat of fascism was unimpeachable. And apart from being one of nature’s awkward squad, he appreciated that publicly ignoring obvious horrors for expediency’s sake does not help the cause of justice and progress in the slightest.
Orwell supported the Republicans in Spain, even though the KGB operating under their aegis tried to kill him -- and actually did execute many others. He certainly did not collectively condemn his comrades in arms who went to fight in the Brigades.
The reason that many of us oppose Assad’s regime is because it is ruthless and murderous, so there is absolutely no reason not to denounce such behaviour when committed by some of “our” side. Indeed, there is even more reason to do so, since to be silent implies complicity.
The truth is not only an effective principle, it is also an expedient weapon in the war of public opinion. We should pillory all who betray it.

Sunday, June 09, 2013

East and West, meeting in twain?

Can Obama, Xi find common ground?
Special to The BRICS Post
June 7, 2013, 3:34 am

In 1907, US President Teddy Roosevelt signaled the arrival of the US as as world power by sending the “Great White Fleet” in  a grand gesture to the globe it circumnavigated. It was a little premature: the ships were obsolescent and relied on the kindness of strangers to refuel but it did mark Washington’s aspirations to put truth in the rumours about the Monroe Doctrine.
Similarly, Xi Jinping’s grand tour, which begins in California and a meeting with US President Barack Obama on June 7, is a debut rather than a consolidation.
It is, perhaps wisely, more economic in its theme, brandishing investments rather than waving big sticks.
While modern financial and trading networks need not follow the consolidated marine and land boundaries of previous rising empires, Xi’s triumphal progress through America’s backyard – the Caribbean and Mexico – demonstrates how much more effectively powerful China’s economic success is than the Soviet weaponry had been. “The China Dream,” is Xi’s rallying cry of a China with a seat at the top table.
It will be interesting to note the progress, with small indicators like the almost certain relaxation of Chinese regulations that restrict imports of Mexico’s Tequila because of methanol levels. A few extra Chinese hangovers is a small price to pay for an economic beachhead right on the Rio Grande.
It is fascinating to watch the interplay between the aspirant and receding superpowers and it is reassuring that both sides are obviously thinking seriously, and not necessarily reflexively about it.
When Richard Nixon went to China, apart from recognition of the previous pariah state’s future potential, at least part of  the White House motive was counterbalancing the Soviet Union. President Xi’s tour of the America epitomizes a renewed appreciation on both sides, but above all of China as a potential counterweight to the US itself. A less confident US is relinquishing the xenophobia, or more specifically Sinophobia, that previously greeted Chinese investment interests.
Across the US, job-hungry local governments yearn for the Yuan to come in and do what their own bankers are refusing to do – invest locally.
The times, they’re a-changing
Previous ups and downs of the great powers have been marked by major conflagrations, and we can be grateful that the demotion of the Soviet Union was relatively peaceful. Two decades ago, it would have been difficult to believe that the US of Strategic Defense Initiative, Star Wars and the New American Century fame would have been quite so polite to its most likely supplanter.
Two decades ago, even Japan was viewed with a jaundiced eye as it surged close to overtaking the US economically, even though militarily it was no threat, and indeed, was almost a US protectorate. The costs of wars in Afghanistan and Iraq have taxed US power even as it outspends the rest of the world militarily.
But the relationship between China and the US is unique. While there is very real rivalry as they both compete for the same space at the top of the table, it is like a Puerto Rican knife fight with the combatants tied by the wrists to each other. The US needs China, which, after all, has financed Washington’s wars with its purchase of US dollars. Conversely, China needs the US. Beijing can neither forgo those reserves deposited in its rivals’ Treasury vaults and needs its markets to fuel the growth of its economy.
Xi knows that the secret of continuing Communist Party of China (CPC) power in the face of potential domestic dissatisfaction is the growing prosperity that keeping US consumers happy brings.
However, China is developing military potential along with its economic success and the friction over disputed islands around the China Sea is worrying. The scenario of a rising uppity power confronting one that is relatively getting weaker, is all the more worrying when we consider that network of alliances and defence commitments that the US has across the region. China has interests and claims in an area where the US is far from home but has ties made in former days of glory.
Pulling treaty triggers
There has been rising tension over disputed islands in the China Sea [Xinhua]
There has been rising tension over disputed islands in the China Sea [Xinhua]
In 1914, we saw what happened as a result of those treaty triggers being pulled, and in the South China Sea, US commitments to Japan, Taiwan, and the Philippines could drag the US into a local conflict with China where the latter has its forces concentrated. The US, of course, is still in imperial overstretch mode, with bases and commitments worldwide. At home, the American public has strictly limited enthusiasm for wars for far-away countries of which, after all, it knows amazingly little.
Conservatives have set up a shopping lists of what Obama should demand of Xi, on economic reforms, currency policy, government etc. Obama is more sophisticated than many of his predecessors – and of course economic circumstances have weakened his hand. He is, one hopes, not going to be crass in his demands of China.
One assumes that Obama would realize just how counterproductive it would be for the US, whose economic model has never looked so dodgy, to lecture China, for whom a growth rate four or five times the US’s, seems to be overstretched in its own right. He will also understand that Xi has his own domestic politics to worry about.
The Communist Party has pretty much abandoned the dialectic of the class struggle, and the glue that holds it together is the nationalism of an oft-humiliated civilization.
So the talks are an opportunity for quiet dialogue and a development of rapport between the two leaders. Beijing might offer magnanimous compromises or exit routes on many of the maritime border issues, for example, but would certainly bridle at any ultimata. But the US is hardly in a position to brandish ultimata.
Room for compromise
In the case of Taiwan, for example, the administration’s efforts are more about stopping Taipei tickling the dragon than building up a prickly defence. The long obfuscation of Congressional efforts to sell F-16s to Taipei shows successive presidents’ deference to Beijing’s sensibilities, which on the face of it is illogical appeasement. The planes are only of use if China attacks – no one seriously expects Taiwan to attack the mainland, after all. But Washington has to take account of the importance of the island in China’s inner party rivalries.
There is room for compromise. If we consider, for example, North Korea as China’s Israel, an embarrassing but ineradicable ally, it would frame the limits of what Washington could reasonably expect China to do in a low key way. Xi can no more disown Kim Jong-un publicly than Obama can repudiate Netanyahu, but there are important gestures available.
Obama could pledge, for example, that US forces would withdraw from the Korean Peninsula in the wake of any re-unification, thus avoiding the triumphalistic mistakes in Europe that still fuel Russian resentment.
In fact, there is another model the two might adopt. Britain and the US were similar rivals and partners, tied as much by financial chains as any alleged common bonds of culture and language.
The US facilitated the decline of its erstwhile rival, moving from debtor to creditor – and, it might be added, doing its best to stab its ally in the back financially even as they fought together. But it has not approached military tensions since the British burnt the White House in 1814.
Of course, unless the Tea Party triumphs and splits the US into autonomous fragments, the US is never going to decline as precipitately as Britain shorn of empire, but it is possible for a rising China to be partners with a still powerful, although relatively declining America.
It would appear that Xi and the Chinese are prepared for this.
In terms of domestic politics, Japan is the foreign scapegoat up front while the US is relatively benign in China’s image.
Similarly, China benefits in the US from not being the Soviet Union and also the  main trading partner, an object of admiration and emulation.
Xi and Obama might be the two right people in the right place to make the mutually respectful links needed – and these talks will demonstrate that, one way or another.