Market economies don't fight each other

News broke around 4pm that the Dow had lost some 400 points on the day, the worst single-day loss since September 2001. Explanations for the drop generally point to a single starting point: China. Specifically, the market in Shanghai seems to be the proverbial butterfly flapping its wings, and its crash has largely been attributable to a standard "correction." Simply put, the Shanghai market (which DeTocque knows absolutely nothing about), had been going so strong, so fast that it was just time to bring things down to earth (9 percent today). Year of the pig, indeed.

The News Hour with Jim Lehrer explains that the disasterous effect on the NYSE is because so many American companies are doing such booming business in China and are tied so heavily to its market. China has a cold, and America's starting to sneeze.

This bears a larger world-view: If a relatively minor stock market shock in China could produce such an adverse effect half-a-world-away in New York, what would happen in an American-Sino war? Would all trade just stop? How many trillions of dollars would disappear over night? How many lives would be distroyed?

Perhaps the old international relations adage needs to be revised -- instead of "democracies don't fight wars against each other," maybe it should be "market economies don't fight wars against each other"? But let's not get ahead of ourselves here. China has a long way to go before being truly considered a free market economy, but one could hardly argue that millions of Americans aren't getting rich off Mao's present incarnation.

And could this situation give China an upper hand? What if it decided to retake Tawain? Would Bill Gates, Steve Jobs, William Ford, and Donald Trump suddenly show up at the White House begging the White House to let bygones be bygones?

Cheney, Musharraf and many mixed signals

Dick Cheney's surprise visit to Pakistan today sends mixed signals about how the White House is handling its quasi-ally.

The issue first began last month when Democrat-lead House passed a bill which would restrict US aid to Pakistan if the Bush administration could not verify that Pakistan was making all possible efforts to thwart the Taliban operating the country (read the bill here). Today, Cheney tried to use this threat as leverage when full-court pressing Pakistani President Pervez Musharraf to, well, actually fight the Taliban (see an article on US spending in Pakistan here). But finally, White House Press Secretary oddly refused to outright support the VP, and even distanced himself from Cheney, saying, "President Musharraf is committed to winning this, and we are committed to working with him in this war on terror." (here)

The discord could simply be related to a lack of communication between Cheney's people and the White House or, due to the secrecy involved in the VP's trip, perhaps a leak of the meeting's talking points. Either way, it's an odd way to handle things (especially because it's not even clear that the Senate would choose to take up the resolution for debate).

The strangest aspect is that Cheney would actually threaten Musharraf that "the Democrats might cut off funding." Why use the threat if Cheney wouldn't support it? Would the administration personally not cut off funding if it had the choice? Are the Democrats some unstoppable, crazy force that the Pakistanis better get on board or who knows what those new nut jobs in the majority might do?!?! Cheney's looking for a way to force Musharraf into being more aggressive while trying to maintain the administration's personal relationship with Pervez. So they want to put the screws to him... but not too much. Push Musharraf too hard, and you might lose him altogether, so the best solution is to blame the Democrats.

The main US objection in all this is Musharraf's "truce" with the tribal elders in the Northwest Pakistani provinces, an area essentially still run by the Taliban. The unspoken deal is that Musharraf calls off the dogs and lets remaining Taliban elements survive relatively autonomously, and the Taliban won't bother the government.

How does this relate to Cheney (and House Dems) pushing Musharraf on terrorism? If you were Osama Bin Laden, where would you be hiding?

Carl Levin on Meet The Press.

Senator Carl Levin (D-Mi) is on Meet The Press as DeTocq types, and he's taking about a new Senate resolution which would "modify" US troops' mission in Iraq. Two things from the interview jump out: 1. The new resolution offered by the Democrats will have absolutely no effect on the functions of US forces; but 2. Senator Levin was willing to explain some of the behind-the-scenes political strategy.

1. Senator Levin explained that the resolution would state that US forces' mission would be "reduced" to:
-- only supporting counter-terrorism mission
-- training Iraqi troops
-- logistics operations.

DeTocq has news: That's exactly what US forces do now! Should that resolution pass, it might score some points with the public, but in reality it would have no effect on how the military operates. Every single function soldiers perform could easily be shoehorned into one of those broad topics -- every raid they conduct or security operation they run could fall under "counterterrorism"; every time they accompany the Iraqis on an operation, it would be "training"; and everything else would fall into the logistics category.

Furthrmore, the President could potentially exploit that language to say the Democrats passed a do-nothing resolution which is only playing politics.

2. When Tim Russert pressed Levin about remarks made by Sen. Mitch McConnell (R-Ky) which practically dared Democrats to cut off funding for the troops, Levin responded with aplomb. He simply said that, first, Democrats don't want to further endanger American soldiers by not properly funding them -- he rightly said that Democrats wanted to avoid a Vietnam-type mistake; second, Levin frankly explained that Democrats didn't want to pursue a funding resolution because it would play right into the President's hand. Specifically, Levin said that such a bill would probably lose (because no Senator wants to be seen as "not supporting the troops"), and that the President would exploit such an attempt to protray the Democrats in a negative light.

Good for Levin for acknowledging that Senators and Presidents often play politics. All too often, public officials engage in haughty rhetoric to mask the underlying issues.

Iraq War Spin Machine, take 367million

When Tony Blair announced that British troops were being pulled out of Iraq, on the surface it would seem like this would be a bad thing for the Bush administration. You would think...

Clearly not the case, however. According to some of your finer White House PR folks, this is apparently a good thing because it means that the security situation is good enough around Basra that the British forces had completed their mission and could return home. Perhaps if we let the British commanders, rather than Tony Snow, address the actual security situation around Basra, we might find a more realistic assessment... It might be quieter than Baghdad, but that's like saying a Rolling Stones show is quieter than The Who's. And we won't get fooled again, oh no.

Digressions aside, there's one aspect of the story that doesn't click in this spin machine, one significant question that remains unanswered:

If Tony Blair is bringing his forces home because the mission is complete, and not because he is trying to avoid a legacy as the lapdog PM who lead his country into its worst foreign policy 'misstep' since Suez (deep breath), then why can't the US ask Blair to redeploy some of his forces to Baghdad and al Anbar where, ahem, they could probably pitch in and help keep things quiet?

On to 08 (again? yes, already)

In the ever hastening race to start American presidential elections even earlier (who thinks George P. Bush will be throwing his hat in the ring in '12? Chelsea, anyone? DeTocq is busy scouting his friends' kids' pre-school classes for '36 candidates, by the way), it's no stretch to say that the American voting public has already been subjected to an onslaught of Presidential media attention.

How's this for the WHY: Everyone, save a few hardcore Evangelicals in Mobile, are dying for this term to be over. Just dying for it. The media might have finally run out of goofy Bushisms and is so sick of Iraq that they're out looking for the next story.

The benefit (silver lining?) is that it just might bounce a few of the jokesters out early. Take this guy with the perfect hair and goofy boxershorts -- Mitt Romney. Ruth Marcus does a nice piece in the Post (here) , where she paints a picture of a man who seems more concerned with winning the Presidency than actually standing for a conviction or two. Abortion is a tricky subject, but Romney walks the tightrope so carefully that it's transparent. What's wrong with standing to be judged?

When politicians, as the Mittster does in this article, are over 50 years old and use terms like "evolved" on a core issue relating to their moral character, 95% of the time it means "changed to make me more electable." With the obnoxiously early start of the election, journalists have just that much more time to pour over records and transcripts and bounce some of the hair-and-smile-but-no-substance guys BEFORE they raise enough money to be serious contenders.

***

UPDATE: On 27 February, Slate.com does a good article which supports the post above and and explains why Romney's so easily willing to flip flop: he's the consumate CEO who will alter his position at the drop of a hat to push his product. But there's the rub: people vote for Presidents because they want count on their officials to maintain the same point of view both before and after an election, not because said official is deft at altering his opinion to please the constituent, donor, or policy maker of the day. Good thing Romney is polling at 7 percent right now, let's stick a fork in him.

FT does Chinese "soft power"

In an article in today's FT (here, subscription required), Gideon Rachman argues that China's "soft power policy is working." It takes three or four paragraphs of anecdotal examples (Mandarin commentary on British football being broadcast in Beijing and the like), but the article's subtext soon becomes apparent: China, according to Rachman, is quickly catching up to the US in its use of soft power.

DeTocq is left scratching his head on this one: why the comparison? Why is Chinese and American soft power framed in this zero-sum-game mentality by which, Rachman argues, for one country to ascend, the other must decline? Here's a good quote that cuts to the meat of Rachman's point: "For a rich, free powerful country to lost a soft power contest to the US seems all but impossible... But in the global battle for hearts and minds, China does have one advantage. It hasn't started any wars lately."

True enough.

But who cares?

DeTocq is hardly a China expert, but the distinction doesn't seem necessary. Soft power is used as a diplomatic means to serve a country's political and economic ends. Assuming third party governments and companies are relatively rational actors, DeTocq can't think of any situation where China's soft power ascention has a severly negative outcome for the US:

Is the point that this battle royale will somehow effect US or Chinese investment in a third country? Perhaps it might on the margins, but most free market businesses take profit over image, and most dictator-run markets (some of which are being coddled by China without much competition. Just ask Robbie Mugabe) aren't worth the Western investment anyway.

Would China's soft power ascention cause the US to lose a vote in the UN Security Council? No, China can wave that veto flag strongly enough all by its lonesome, thank you.

Would it cause governments to chose sides in a US-China war? Nevermind the overall unlikelihood of that, but generally speaking, China's not likely to face down NATO (even with the likes of Iran or big, bad Zimbabwe in its corner).

Point being that, sure, China's soft power/image/charm offensive might be clicking right now, but DeTocq can't see too many instances where that would directly cost significant American dollars, or (any) lives. Over the last few years, the world has experienced so much black-and-white/us-vs.-them framing of international politics that perhaps it's time we stopped looking at these issues in directly competitive terms. If China gets a little bit stronger, good for them -- there's not much anyone can do to stop them now. Instead, the international community should look to accomodate their growth (economically and diplomatically) and profit it from it (again, economically and diplomatically) instead of fearing it.

Unity08

If you get a few minutes, go check out Unity08. Normally skeptical of these types of groups, DeTocqueville must admit that the flaw isn't obvious. And proceding skeptically, that would be a hesitant endorsement...

The concept is intreaguing, even: Select one ticket (of a field of contenders) for the 08 race with a centrist Republican and a centrist Democrat. Who you could find to shun their party is another question altogether, but bear with them... This crowd, lead by the always-dashing Sam Waterston of "Law and Order" fame, doesn't exactly have the star-power of Bono-pitching-DATA, but it's a start.

The main problem Unity08 faces is probably from the Dems -- the party muscle is so desparate to get the White House in 2008 that they'd stop at nothing (including walking all over this little 527) to get there. The other potentially mitigating factor is Candidate Obama -- the case could be made that he's as centrist and "outsider" as you could get, so the "need" for a Unity08 style group wouldn't be that large.

However, if the race ended up with Dick Cheney squaring off against Hillary, look for the Unity08 crowd to pick up tons and tons of cash.

Edit: Unity 08 got a good mention in the Washington Post today, Feb 25 by columnist David Broder (here).

What's all this about Iran?

A few brief points about the recent ascertion that "Iran" is supplying weapons to Shi'a groups in Iraq for use against US servicemen, and why the US is starting to make a big deal about it:

1. Is the "evidence" real?
-- Most likely. In light of the WsMD scandal of faulty intel pre-Iraq, the press has been correct to question the Bush administration's assertions about this. However, it's also in light of the Iraq justification that the Americans are making damn-well sure that they have such a serious accusation is right this time. Or, probably more correctly, they're making damn-well sure that they THINK they have it right. After all, Iran is going to deny it either way, right? Wait, we've been here before...

2. So is this weaponry coming all the way from the Iranian top?
-- Could be, but DeToc guesses it's unlikely. Presidents, Prime Ministers, and Grand Ayatollahs generally like to maintain a degree of plausible deniability between themselves and some of the more nefarious elements of their govenment. Maybe it was done with a wink and a nod and a say-no-more, but such weaponry is just as likely coming from a few Qods Force commanders with solid ties into Iraq Shi'a community. The Iranians probably won't ask too many questions, so everyone goes home happy.

3. Is the US making these charges now as a prelude to an Iran invasion?
-- ARE YOU KIDDING? Conspiracy theorists will all point in this direction, but, frankly, even beginning to contemplate an invasion of Iran is so insane that even Dick Cheney, Don Rumsfeld, Paul Wolfowitz and a four drugged-up monkeys throwing darts at a world map wouldn't advocate it. Think about it -- an extremely overstretched military fighting two wars, staunch opposition to the war at home, and ongoing diplomatic efforts with Tehran all collectively shout: NO WAY on this one.

4. Is the US doing this to keep Iran on its toes?
-- Ah ha. Here's where DeToc puts his $20. North Korea just eeked out a sweet energy deal when it shut down its nuke program, the Europeans might be going soft in the Iran nuke negotiations, and the US is pretty frustrated in Iraq, so DeToc surmises that this is a case of making relatively sound, if "unprovable", accusations against the Iranians to send a message that a) "we know you're in Iraq," so stop it, and b) you're not getting as cushy a nuclear deal as Pyongyang. Furthermore, it might be an attempt to rally the Euros to take a tougher line at the negotiating table with Tehran later this year.

Stay tuned, 'cause this one's just starting to get fun!

Separated At Birth?

Boehner's Boner

Rep John Boehner (R-OH) is either extremely loyal or extremely stupid.

Either way, he remains a primary cog in a systemic problem within the Republican Party: The inability to either understand or admit that the several wars in Iraq are not a primary front in the "war on terror." But there Boehner was, on the floor of the US House of Represenatives today, making that very assertion. DeToc wishes he had one of those clicker-counters that amusment park employees use to count how many riders jump on the roller coaster, because it would be interesting to watch how many either uneducated or un-free-thinking Republican Members of Congress continue this line of rhetoric during the House's debate this week.

DeToc just doesn't understand the tactical political advantage the Republicans are attempting to cling to by continuing this assertion. Do they continue to believe that the average American voter hasn't read at least the minimum amount of news to educate themselves on what's going on there? While Bill from Lincoln, Nebraska might not be able to differentiate between "Sunni" and "Shi'a", he probably knows that even Fox News says those two words much more in relation to Iraq than they say "al-Qa'ida". That might be an oversimplification, but Rep. Boehner's the expert there...

Sego/Sarko

Ah, on to the French Presidential elections of April.

If I were French, I would still be in the "undecided" category.

However, I've always been turned off by the way the left-of-center parties in Europe (particularly Britain and France) appear to try to "buy" the election with some relatively small financial incentives. It seems like every time there's a general election in the UK, the Labor party starts talking about a pensions increase by 30p a week...

This morning's FT runs down "the real" start to Segolene Royal's campaign. Among her platform ideas are:

1. a 10K euro interest-free loan for "young people" to start their own companies
2. the state would create 500,000 subsidised jobs for the "young."
3. first-time homebuyers would get an interest-free loans for their mortgage deposit
4. the minimum wage would rise to 1,500 euros per month

DeToc mentions this not because he is a hard-core rightist (or Gaullist for that matter; either way, your DeTocqueville is much more of a centrist), but because the ol' DeToc is rational free-marketist. An interest-free home loan is a great thing to have, but who's going to fund that? Certainly you'd be hard-pressed to find a bank, building society, or even the local circus to put up such free cash. The state, then? Doesn't the state have better things to do than managing free home and business loans? DeToc hopes that his does (though by judging the recent state of affairs, most of the US populace would have rather had W managing loans than a war. At least we'd have only lost a few thousand...).

Let's not even begin to address France's "need" for another half-a-mil civil servants. In a country where some 20% of the workforce is already employed by the state, 500K would add another whopping 3ish% to that realtively inefficient mass.

But there's the word I'm striving for: Inefficient. These parts of Ms. Royal's platform just scream market inefficiencies: if you really want a homeloan, a bank will give it to you at a reasonable rate, and you'll probably make money by the time you sell the house; ditto with a business. Or, if really want to get ahead in life, you won't take the easy way out with quasi-state-sponsered welfare.

While DeToc truly values care for those to whom the market has failed, he doesn't have much pity for those who have failed the market.

Maliki's blame, Hill's squeal.

I think I figured it out.

I'm watching Meet The Press this morning, and Steny Hoyer and John Boehner debated the debate on the Congressional non-binding resolution on Iraq. The "discussion" degraded as you might expect, but then I became interested when Boehner kept talking about Maliki's responsibility in "the surge."

This isn't rocket science, but it hit me: the Republicans are trying to pin responsibility on the Iraqis so that when the plan fails, the Republicans pin the blame on them -- "oh, we had this great plan, I mean it was awesome. Like, really, really awesome. It's just too bad that darn Maliki couldn't implement the dang thing. "

My other great revelation from this morning's talk shows: say what you want about Hillary Clinton, but I think there's one fundamental reason when she won't win in 2008. Have you listened to the woman? She has the most shrill, piercing squeal of a voice. Nails on a chalkboard would be a kind comparison.

The other interesting aspect of this is her mid-westerness really comes through. She might as well drop a "da Bears" in there every once-in-a-while. In all of her travels, I can't believe that hasn't been ironed out...

Take me to your leader

We blog for the same reason that people form rock bands: Attention and girls.

Blogging serves a deep-seeded narcissistic purpose to expose oneself to the public and proudly exclaim, "I am here! Look at what I've done!". This is done in the hope that someone else will validate "what you've done" by adding to the conversation. Then, just maybe, more comments will flow in, and a whole community of people will begin to think you're really smart. Then you'll be so cool that girls will throw their underwear on stage and want to go home with you...

Oops, gotten ahead of myself there.

Come to think of it, blogging is like being a member of KISS -- you get to throw yourself out to the world with a hope of self-actualization, but with the comfort of anonymity. Equate "blogging" to "spitting fire onstage" and "the anonymity of the web" to "six pounds of Space Ace's makeup" and I hope you'll see where I'm going with this.

Alright, onto why we're here. Simple, really: I dig on international poltics and hope to start a conversation. If you want to join in, just toss your proverbial women's underwear at me, and let's go!