Friday, December 17, 2010

Chavez given decree powers

Reuters: Venezuela assembly gives Chavez decree powers

Venezuela's parliament gave President Hugo Chavez decree powers for 18 months on Friday, outraging opposition parties that accused him of turning South America's biggest oil producer into a dictatorship.

FT: A new global balance

FT columnist Philip Stephens writes:

We are living through one of history’s swerves. A multipolar world has been long predicted, but has always seemed to be perched safely on the horizon. Now it has rushed quite suddenly into the present. Two centuries of western hegemony are coming to a close rather earlier than many had imagined.

Monday, November 29, 2010

US embassy cables: China 'would accept' Korean reunification

Guardian reposts a wikileaked cable.

[Vice Foreign Minister Chun Yung-woo] commented that China had far less influence on North Korea "than most people believe." Beijing had "no will" to use its economic leverage to force a change in Pyongyang's policies and the DPRK leadership "knows it." Chun acknowledged that the Chinese genuinely wanted a denuclearized North Korea, but the PRC was also content with the status quo. Unless China pushed North Korea to the "brink of collapse," the DPRK would likely continue to refuse to take meaningful steps on denuclearization. [...]

[...] Chun claimed XXXXXXXXXX believed Korea should be unified under ROK control.XXXXXXXXXXXX, Chun said, were ready to "face the new reality" that the DPRK now had little value to China as a buffer state -- a view that since North Korea's 2006 nuclear test had reportedly gained traction among senior PRC leaders.

Read the whole thing.

Thursday, November 18, 2010

Planning for North Korean collapse

strategypage writes: U.S. military planners have discovered that China's current arsenal of non-nuclear ballistic and cruise missiles could probably knock out five of six major American air bases in Japanese and South Korea. Oops. To make matters worse, this has become an issue as North Korea stumbles towards political collapse, and China indicates that it will assume control in the north if that happens. South Korea believes it should move north to deal with a collapse, and this plan is becoming a contentious issue with China.

Friday, November 12, 2010

Bush: Mubarak wanted me to invade Iraq

From Foreign Policy's blog: Bush writes [in his new book] that President Hosni Mubarak of Egypt "told Tommy Franks that Iraq had biological weapons and was certain to use them on [American] troops," a VOA article highlights. Bush goes on to say that Mubarak "refused to make the allegation in public for fear of inciting the Arab street."

Thursday, October 14, 2010

WPR: Arabs arming for war with Iran

World Politics Review reports: While Western diplomats and sanctions-enforcers ply their trade to pressure Iran into stopping its uranium enrichment, much of the Middle East is already preparing for war. Headlines might focus on United Nations resolutions initiated by Western powers, or on fiery speeches delivered by Iranian President Mahmoud Ahmadinejad. But just a few hundred miles from Tehran, the Arab countries of the Persian Gulf have launched a race to arm themselves with an urgency and intensity reminiscent of America's defense build-up prior to its entry into World War II.

Wednesday, September 29, 2010

Germany makes final reparation payment

Foreign Policy reports: Oct. 3, the 20th anniversary of German unification, will also mark the completion of the final chapter of World War I with the end of reparations payments 92 years after the country's defeat. The German government will pay the last instalment of interest on foreign bonds it issued in 1924 and 1930 to raise cash to fulfil the enormous reparations demands the victorious Allies made after World War I. The reparations bankrupted Germany in the 1920s and the fledgling Nazi party seized on the resulting public resentment against the terms of the Versailles Treaty.[...]

Sunday, September 12, 2010

Turkey changing its constitution?

BBC News: Turkish voters have given strong backing to a package of constitutional changes. With nearly all votes in the referendum counted, about 58% had voted "Yes" to amending the constitution.

Monday, August 30, 2010

Tuesday, July 20, 2010

STRATFOR: geopolitics and dual citizenship

Geopolitics is central to STRATFOR’s methodology, providing the framework upon which we study the world. The foundation of geopolitics in our time is the study of the nation-state, and fundamental to this is the question of the relationship of the individual to the nation-state. Changes in the relationship of the individual to the nation and to the state are fundamental issues in geopolitics, and thus worth discussing.

Many issues affect this complex relationship, notable among them the increasing global trend of multiple citizenship. This is obviously linked to the question of immigration, but it also raises a deeper question, namely, what is the meaning of citizenship in the 21st century?

Nation vs. State

It is difficult to make sense of the international system without making sense of the nation-state. The concept is complicated by a reality that includes multinational states like Belgium, where national identity plays a significant role, and Russia or China, where it can be both significant and at times violent. In looking at the nation-state, the idea of nation is more complex, and perhaps more interesting, than that of state.

The idea of nation is not always clear. At root, a nation is a group of people who share a fate, and with that fate, an identity. Nations can be consciously created, as the United States was. Nations can exist for hundreds or thousands of years, as seen in parts of Europe or Asia. However long a nation exists and whatever its origins, a nation is founded on what I’ve called elsewhere “love of one’s own,” a unique relationship with the community in which an individual is born or to which he chose to come. That affinity is the foundation of a nation.

If that dissolves, the nation dissolves, something that has happened on numerous occasions in history. If a nation disappears, the international system begins to behave differently. And if nations in general lose their identity and cohesion, massive shifts might take place. Some might say it would be for better and others for worse. It is sufficient to note here that either way would make a profound difference.

The state is much clearer: It is the political directorate of the nation. How the leaders are selected and how they govern varies widely. The relationship of the state to the nation also varies widely. All nations do not have states. Some are occupied by other nation-states. Some are divided between multiple states. Some are part of an entity that governs many nations. And some are communities that have developed systems of government that do not involve states, although this is increasingly rare.

The relation to the nation is personal. The relation to the state is legal. We can see this linguistically in the case of the United States. I can state my relation to my nation simply: I am an American. I cannot state my relationship to my state nearly as simply. Saying I am a “United Statian” makes no sense. I have to say that I am a citizen of the United States, to state my legal relationship, not personal affinity. The linguistic complexity of the United States doesn’t repeat itself everywhere, but a distinction does exist between nationality and citizenship. They may coincide easily, as when a person is born in a country and becomes a citizen simply through that, or they may develop, as when an individual is permitted to immigrate and become naturalized. Note the interesting formulation of that term, as it implies the creation of a natural relationship with the state.

In the United States, the following oath is administered when one is permitted to become a citizen, generally five years after being permitted to immigrate:

I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which I have heretofore been a subject or citizen; that I will support and defend the Constitution and laws of the United States of America against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I will bear arms on behalf of the United States when required by the law; that I will perform noncombatant service in the Armed Forces of the United States when required by the law; that I will perform work of national importance under civilian direction when required by the law; and that I take this obligation freely without any mental reservation or purpose of evasion; so help me God.

I should say I took this oath at the age of 17. Although I became a citizen of the United States when my father was naturalized years earlier, receiving my own citizenship papers involved going to a courthouse and taking this oath personally. Being confronted with the obligations of citizenship was a sobering experience.

The American oath is one of the most rigorous; other nations have much simpler and less demanding oaths. Intriguingly, many countries with less explicitly demanding oaths are also countries where becoming a naturalized citizen is more difficult and less common. For the United States, a nation and a state that were consciously invented, the idea of immigration was inherent in the very idea of the nation, as was this oath. Immigration and naturalization required an oath of this magnitude, as naturalization meant taking on not only a new state identity but also a new national identity.

The American nation was built on immigrants from other nations. Unless they were prepared to “absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which I have heretofore been a subject or citizen,” the American enterprise could fall into chaos as immigrants came to the United States to secure the benefits of full citizenship but refused to abandon prior obligations and refused to agree to the obligations and sacrifices the oath demanded. The United States therefore is in a position shared only with a few other immigration-based nations, and it has staked out the most demanding position on naturalization.

The Dual Citizenship Anomaly

It is therefore odd that the United States — along with many other nations — permits nationals to be citizens of other countries. The U.S. Constitution doesn’t bar this, but the oath of citizenship would seem to do so. The oath demands that the immigrant abandon all obligations to foreign states. The U.S. Supreme Court ruled in Afroyim v. Rusk in 1967 that revoking citizenship on grounds of voting in foreign elections was unconstitutional. The ruling involved a naturalized American who presumably had taken the oath. The Supreme Court left the oath in place, but if we are to understand the court correctly, it ruled that the oath did not preclude multiple citizenship.

It is impossible to know how many people in the United States or other countries currently hold multiple citizenship, but anecdotally it would appear that the practice is not uncommon. Not being required to renounce one’s foreign citizenship verifiably obviously facilitates the practice.

And this raises a fundamental question. Is citizenship a license to live and earn a living in a country, or is it equally or more so a set of legal and moral obligations? There are many ways legally to reside in a country without becoming a citizen. But the American oath, for example, makes it appear that the naturalized citizen (as opposed to just the legal resident) has an overriding obligation to the United States that can require substantial and onerous responsibilities within military and civilian life. An individual might be able to juggle multiple obligations until they came into conflict. Does the citizen choose his prime obligation at that time or when he becomes a citizen?

The reality is that in many cases, citizenship is seen less as a system of mutual obligations and rights than as a convenience. This creates an obvious tension between the citizen and his obligations under his oath. But it also creates a deep ambiguity between his multiple nationalities. The concept of immigration involves the idea of movement to a new place. It involves the assumption of legal and moral obligations. But it also involves a commitment to the nation, at least as far as citizenship goes. This has nothing to do with retaining ethnicity. It has to do with a definition of what it means to love one’s own — if you are a citizen of multiple nations, which nation is yours?

It is interesting to note that the United States has been equally ambiguous about serving in other countries’ militaries. John Paul Jones served as an admiral in the Russian navy. American pilots flew for Britain and China prior to American entry into World War II. They did not take the citizenship oath, having been born in the United States. While you could argue that there was an implicit oath, you could also argue that they did not compromise their nationality: They remained Americans even in fighting for other countries. The immigration issue is more complex, however. In electing to become American citizens, immigrants consciously take the citizenship oath. The explicit oath would seem to create a unique set of obligations for naturalized immigrants.

The Pull of the Old Country

Apart from acquiring convenient passports on obscure tropical islands, the dual citizenship phenomenon appears to operate by linking ancestral homelands with adopted countries. Immigrants, and frequently their children and grandchildren, retain their old citizenship alongside citizenship in the country they now live in. This seems a benign practice and remains so until there is conflict or disagreement between the two countries — or where, as in some cases, the original country demands military service as the price of retaining citizenship.

In immigrant countries in particular, the blurring of the line between nationalities becomes a potential threat in a way that it is not for the country of origin. The sense of national identity (if not willingness to sacrifice for it) is often stronger in countries whose nationhood is built on centuries of shared history and fates than it is in countries that must manage waves of immigration. These countries have less room for maneuver on these matters, unless they have the fortune to be secure and need not ask much of citizens. But in those countries that are built on immigrants and that do need to call for sacrifice, this evolution is potentially more troublesome.

There are those who regard nationalism as divisive and harmful, leading to conflict. I am of the view that nationalism has endured because it provides individuals with a sense of place, community, history and identity. It gives individuals something beyond themselves that is small enough to be comprehensible but far greater than they are. That nationalism can become monstrous is obviously true; anything that is useful can also become harmful. But nationalism has survived and flourished for a reason.

The rise of multiple citizenship undoubtedly provides freedom. But as is frequently the case, the freedom raises the question of what an individual is committed to beyond himself. In blurring the lines between nations, it does not seem that it has reduced conflict. Quite the contrary, it raises the question of where the true loyalties of citizens lie, something unhealthy for the citizen and the nation-state.

In the United States, it is difficult to reconcile the oath of citizenship with the Supreme Court’s ruling affirming the right of dual citizenship. That ambiguity over time could give rise to serious problems. This is not just an American problem, although it might be more intense and noticeable here. It is a more general question, namely, what does it mean to be a citizen?

This report is republished with permission of STRATFOR.

Monday, July 12, 2010

Army's Unmanned Trucks

Wired Magazine: As insurgents in Afghanistan target the U.S. military’s soft underbelly — its long logistics lines — trucking materiel through war zones has become an increasingly dangerous mission. One U.S. Army solution? Self-driving trucks that let the humans behind the wheel look out for bombs, instead.

Wednesday, June 30, 2010

Cuba travel closer?

Reuters reports: A congressional panel is poised to take the first step toward ending a decades-old U.S. ban on travel to Cuba and removing other hurdles to food sales to the Caribbean island, a senior lawmaker said on Tuesday.

Russian spying (cont.)

UN: Russia's den of spies: This length FP article recounts Russian spying in and around the United Nations.

Putin's reaction: The police went "out of control"

The BBC profiles Russia's SVR intelligence service.

Monday, June 28, 2010

Russian spies captured in US

New York Times: Ten people arrested on charges of spying for Russia's SVR, the Russian successor to the KGB.

Pajamas Media has insta-reaction and additional details, comparing this to the Rosenberg case.

American contacts with Hamas

YNetNews reports: A senior Hamas figure said Friday that official and unofficial US sources have asked the Islamist group to refrain from making any statements regarding contacts with Washington, this following reports that a senior American official is due to arrive in an Arab country in the coming days to relay a telegram from the Obama Administration.

Sunday, June 13, 2010

Saudis clear skies for Israel?

The Times reports: Saudi Arabia has conducted tests to stand down its air defences to enable Israeli jets to make a bombing raid on Iran’s nuclear facilities. Defence sources in the Gulf say that Riyadh has agreed to allow Israel to use a narrow corridor of its airspace in the north of the country to shorten the distance for a bombing run on Iran.

To ensure the Israeli bombers pass unmolested, Riyadh has carried out tests to make certain its own jets are not scrambled and missile defence systems not activated. Once the Israelis are through, the kingdom’s air defences will return to full alert.

However, according to the Jerusalem Post, Saudi Arabia denies the report from The Times.

Tuesday, May 4, 2010

STRATFOR: A Global Crisis of Legitimacy

By George Friedman

Financial panics are an integral part of capitalism. So are economic recessions. The system generates them and it becomes stronger because of them. Like forest fires, they are painful when they occur, yet without them, the forest could not survive. They impose discipline, punishing the reckless, rewarding the cautious. They do so imperfectly, of course, as at times the reckless are rewarded and the cautious penalized. Political crises — as opposed to normal financial panics — emerge when the reckless appear to be the beneficiaries of the crisis they have caused, while the rest of society bears the burdens of their recklessness. At that point, the crisis ceases to be financial or economic. It becomes political.

The financial and economic systems are subsystems of the broader political system. More precisely, think of nations as consisting of three basic systems: political, economic and military. Each of these systems has elites that manage it. The three systems are constantly interacting — and in a healthy polity, balancing each other, compensating for failures in one as well as taking advantage of success. Every nation has a different configuration within and between these systems. The relative weight of each system differs, as does the importance of its elites. But each nation contains these systems, and no system exists without the other two.

Limited Liability Investing

Consider the capitalist economic system. The concept of the corporation provides its modern foundation. The corporation is built around the idea of limited liability for investors, the notion that if you buy part or all of a company, you yourself are not liable for its debts or the harm that it might do; your risk is limited to your investment. In other words, you may own all or part of a company, but you are not responsible for what it does beyond your investment. Whereas supply and demand exist in all times and places, the notion of limited liability investing is unique to modern capitalism and reshapes the dynamic of supply and demand.

It is also a political invention and not an economic one. The decision to create corporations that limit liability flows from political decisions implemented through the legal subsystem of politics. The corporation dominates even in China; though the rules of liability and the definition of control vary, the principle that the state and politics define the structure of corporate risk remains constant.

In a more natural organization of the marketplace, the owners are entirely responsible for the debts and liabilities of the entity they own. That, of course, would create excessive risk, suppressing economic activity. So the political system over time has reallocated risk away from the owners of companies to the companies’ creditors and customers by allowing corporations to become bankrupt without pulling in the owners.

The precise distribution of risk within an economic system is a political matter expressed through the law; it differs from nation to nation and over time. But contrary to the idea that there is a tension between the political and economic systems, the modern economic system is unthinkable except for the eccentric but indispensible political-legal contrivance of the limited liability corporation. In the precise and complex allocation of risk and immunity, we find the origins of the modern market. Among other reasons, this is why classical economists never spoke of “economics” but always of “political economy.”

The state both invents the principle of the corporation and defines the conditions in which the corporation is able to arise. The state defines the structure of risk and liabilities and assures that the laws are enforced. Emerging out of this complexity — and justifying it — is a moral regime. Protection from liability comes with a burden: Poor decisions will be penalized by losses, while wise decisions are rewarded by greater wealth. Because of this, society as a whole will benefit. The entire scheme is designed to increase, in Adam Smith’s words, “The Wealth of Nations” by limiting liability, increasing the willingness to take risk and imposing penalties for poor judgment and rewards for wise judgment. But the measure of the system is not whether individuals benefit, but whether in benefiting they enhance the wealth of the nation.

The greatest systemic risk, therefore, is not an economic concept but a political one. Systemic risk emerges when it appears that the political and legal protections given to economic actors, and particularly to members of the economic elite, have been used to subvert the intent of the system. In other words, the crisis occurs when it appears that the economic elite used the law’s allocation of risk to enrich themselves in ways that undermined the wealth of the nation. Put another way, the crisis occurs when it appears that the financial elite used the politico-legal structure to enrich themselves through systematically imprudent behavior while those engaged in prudent behavior were harmed, with the political elite apparently taking no action to protect the victims.

In the modern public corporation, shareholders — the corporation’s owners — rarely control management. A board of directors technically oversees management on behalf of the shareholders. In the crisis of 2008, we saw behavior that devastated shareholder value while appearing to enrich the management — the corporation’s employees. In this case, the protections given to shareholders of corporations were turned against them when they were forced to pay for the imprudence of their employees — the managers, whose interests did not align with those of the shareholders. The managers in many cases profited personally through their compensation system for actions inimical to shareholder interests. We now have a political, not an economic, crisis for two reasons. First, the crisis qualitatively has moved beyond the boundaries of a cyclical event. Second, the crisis is rooted in the political-legal definitions of the distribution of corporate risk and the legally defined relations between management and shareholder. In leaving the shareholder liable for actions by management, but without giving shareholders controls to limit managerial risk taking, the problem lies not with the market but with the political system that invented and presides over the limited liability corporation.

Financial panics that appear natural and harm the financial elite do not necessarily create political crises. Financial panics that appear to be the result of deliberate manipulation of the allocation of risk under the law, and from which the financial elite as a whole appears to have profited even while shareholders and the public were harmed, inevitably create political crises. In the case of 2008 and the events that followed, we have a paradox. The 2008 crisis was not unprecedented, nor was the federal bailout. We saw similar things in the municipal bond crisis of the 1970s, and the Third World Debt Crisis and Savings and Loan Crisis in the 1980s. Nor was the recession that followed anomalous. It came seven years after the previous one, and compared to the 1970s and early 1980s, when unemployment stood at more than 10 percent and inflation and mortgages were at more than 20 percent, the new one was painful but well within the bounds of expected behavior.

The crisis was rooted in the appearance that it was triggered by the behavior not of small town banks or third world countries, but of the global financial elite, who took advantage of the complexities of law to enrich themselves instead of the shareholders and clients to whom it was thought they had prior fiduciary responsibility.

This is a political crisis then, not an economic one. The political elite is responsible for the corporate elite in a unique fashion: The corporation was a political invention, so by definition, its behavior depends on the political system. But in a deeper sense, the crisis is one of both political and corporate elites, and the perception that by omission or commission they acted together — knowingly engineering the outcome. In a sense, it does not matter whether this is what happened. That it is widely believed that this is what happened alone is the origin of the crisis. This generates a political crisis that in turn is translated into an attack on the economic system.

The public, which is cynical about such things, expects elites to work to benefit themselves. But at the same time, there are limits to the behavior the public will tolerate. That limit might be defined, with Adam Smith in mind, as the point when the wealth of the nation itself is endangered, i.e., when the system is generating outcomes that harm the nation. In extreme form, these crises can delegitimize regimes. In the most extreme form — and we are nowhere near this point — the military elite typically steps in to take control of the system.

This is not something that is confined to the United States by any means, although part of this analysis is designed to explain why the Obama administration must go after Goldman Sachs, Lehman Brothers and others. The symbol of Goldman Sachs profiting from actions that devastate national wealth, or of the management of Lehman wiping out shareholder value while they themselves did well, creates a crisis of confidence in the political and financial systems. With the crisis of legitimacy still not settling down after nearly two years, the reaction of the political system is predictable. It will both anoint symbolic miscreants, and redefine the structure of risk and liability in financial corporations. The goal is not so much to achieve something as to create the impression that it is achieving something, in other words, to demonstrate that the political system is prepared to control the entities it created.

The Crisis in Europe

We see a similar crisis in Europe. The financial institutions in Europe were fully complicit in the global financial crisis. They bought and sold derivatives whose value they knew to be other than stated, the same as Americans. Though the European financial institutions have asserted they were the hapless victims of unscrupulous American firms, the Europeans were as sophisticated as their American counterparts. Their elites knew what they were doing.

Complicating the European position was the creation of the economic union and the euro by the economic and political elite. There has always been a great deal of ambiguity concerning the powers and authority of the European Union, but its intentions were always clear: to harmonize Europe and to create European-wide solutions to economic problems. This goal always created unease in Europe. There were those who were concerned that a united Europe would exist to benefit the elites, rather than the broader public. There were also those who believed it was designed to benefit the Franco-German core of Europe rather than Europe as a whole. Overall, this reflected minority sentiment, but it was a substantial minority.

The financial crisis came at Europe in three phases. The first was part of the American subprime crisis. The second wave was a uniquely European crisis. European banks had taken massive positions in the Eastern European banking systems. For example, the Czech system was almost entirely foreign (Austrian and Italian) owned. These banks began lending to Eastern European homebuyers, with mortgages denominated in euros, Swiss francs or yen rather than in the currencies of the countries involved (none yet included in the eurozone). Doing this allowed banks to reduce interest rates, as the risk of currency fluctuation was pushed over to the borrower. But when the zlotys and forints began to plunge, these monthly mortgage payments began to soar, as did defaults. The European core, led by Germany, refused a European bailout of the borrowers or lenders even though the lenders who created this crisis were based in eurozone countries. Instead, the International Monetary Fund (IMF) was called in to use funds that included American and Chinese, as well as European, money to solve the problem. This raised the political question in Eastern Europe as to what it meant to be part of the European Union.

The third wave is represented by crisis in sovereign debt in countries that are part of the eurozone but not in the core of Europe — Greece, of course, but also Portugal and possibly Spain. In the Greek case, the Germans in particular hesitated to intervene until it could draw the IMF — and non-European money and guarantees — into the mix. This obviously raised questions in the periphery about what membership in the eurozone meant, just as it created questions in Eastern Europe about what EU membership meant.

But a much deeper crisis of legitimacy arose. In Germany, elite sentiment accepted that some sort of intervention in Greece was inevitable. Public sentiment overwhelmingly opposed intervention, however. The political elite moved into tension with the financial elite under public pressure. In Greece, a similar crisis emerged between an elite that accepted that foreign discipline would have to be introduced and a public that saw this discipline as a betrayal of its interests and national sovereignty.

Europe thus has a double crisis. As in the United States, there is a crisis between the financial and political systems. This crisis is not as intense as in the United States because of a deeper tradition of integration between the two systems in Europe. But the tension between masses and elites is every bit as intense. The second part of the crisis is the crisis of the European Union and growing sense that the European Union is the problem and not the solution. As in the United States, there is a growing movement to distrust not only national arrangements but also multinational arrangements.

The United States and Europe are far from the only areas of the world facing crises of legitimacy. In China, for example, the growing suppression of all dissent derives from serious questions as to whom the financial expansion of the past 30 years benefits, and who will pay for the downturns. It is also interesting to note that Russia is suffering much less from this crisis, having lived through its own crisis before. The global crisis of legitimacy has many aspects worth considering at some point.

But for now, the important thing is to understand that both Europe and the United States are facing fundamental challenges to the legitimacy of, if not the regime, then at least the manner in which the regime has handled itself. The geopolitical significance of this crisis is obvious. If the Americans and Europeans both enter a period in which managing the internal balance becomes more pressing than managing the global balance, then other powers will have enhanced windows of opportunities to redefine their regional balances.

In the United States, we see a predictable process. With the unease over elites intensifying, the political elite is trying to stabilize the situation by attacking the financial elite. It is doing this to both demonstrate that the political elite is distinct from the financial elite and to impose the consequences on the financial elite that the impersonal system was unable to do. There is precedent for this, and it will likely achieve its desired end: greater control over the financial system by the state and an acceptable moral tale for the public.

The European process is much less clear. The lack of clarity comes from the fact that this is a test for the European Union. This is not simply a crisis within national elites, but within the multinational elite that created the European Union. If this leads to the de-legitimization of the EU, then we are really in uncharted territory.

But the most important point is that almost two years since a normal financial panic, the polity has still not managed to absorb the consequences of that event. The politically contrived corporation, and particularly the financial corporations, stands accused of undermining the wealth of nations. As Adam Smith understood, markets are not natural entities but the result of political decisions, as is the political system that creates the allocation of risk that allows markets to function. When that system appears to fail, the consequences go far beyond the particular financials of that event. They have political consequences and, in due course, geopolitical consequences.

This report is republished with permission of STRATFOR.

Saturday, April 10, 2010

Russia's role in Kyrgyzstan overthrow


Evidence of Russia's role in the overthrow of the Kyrgyz government Wednesday became even clearer Thursday. Not coincidentally, members of the interim government that the opposition began forming on Wednesday have lengthy and deep ties to Russia. Russian Prime Minister Vladimir Putin was not only quick to endorse the new government, but he also offered the opposition Russia’s support — financial or otherwise. Interestingly, Russia on Thursday also sent 150 of its elite paratroopers to its military installation in Kant -– twenty miles from the capital of Bishkek –- leaving a looming suspicion that Russia could step in further to ensure the success of the new government.

Protests take place regularly in Kyrgyzstan. The fact that Wednesday’s protests spun into riots, followed by the seizure then ousting of the government, followed by the installation of a replacement government set to take control — all in less than a 24-hour period — are all clear indicators that this was a highly organized series of events, likely orchestrated from outside the country.

More coverage:

Blood in the Streets of Bishkek (Foreign Policy)
US, Russia considering cooperation on Kyrgyzstan (Associated Press) — Not that the U.S. can do much, even with an airbase in the country -ed
US suspends Kyrgyzstan-Afghanistan troop flights (BBC News)

Monday, February 1, 2010

US deploys defensive missiles in mid-east

The United States is deploying defensive missile batteries:

The US is dispatching Patriot defensive missiles to four countries – Qatar, United Arab Emirates, Bahrain and Kuwait – and keeping two ships in the Gulf capable of shooting down Iranian missiles. Washington is also helping Saudi Arabia develop a force to protect its oil installations.

[...] An unnamed senior administration official told the New York Times: "Our first goal is to deter the Iranians. A second is to reassure the Arab states, so they don't feel they have to go nuclear themselves. But there is certainly an element of calming the Israelis as well."

We are now tacitly playing a game of nuclear chicken. An Iran with nuclear weapons tips the balance of power clearly in their favor, potentially casting a wide net across many middle eastern states. The United States is probably doing its best to prevent the Saudis and other oil-rich nations from purchasing their own nukes from a willing seller (Russia?). Once more into the abyss, of nuclear brinksmanship.