White House Chronicle

News Analysis With a Sense of Humor

Britain and China: Echoes of the Opium Wars

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As though there had not been trouble enough in 2009, the year ended with a nasty spat between Britain and China. A spat that might portend more trouble ahead as the world comes to terms with China’s new assertiveness.

The proximate cause of rift was the execution in China of a Briton, Akmal Shaikh, for smuggling heroin into China. The family of the 53-year-old father of three say he was mentally unstable and was duped into carrying a suitcase stuffed with heroin.

According to Shaikh’s family, he traveled to China because he was told he could become a rock star there.

The British government pled for clemency; and made 27 representations to China, after it failed to have the man examined by psychiatrists. British Prime Minister Gordon Brown condemned the execution.

China responded by accusing Britain of interfering in its judicial affairs. The Chinese also referred to the two Opium Wars that Britain fought with China in the mid-19th century to protect the opium trade conducted by British merchants. The Chinese embassy in London said the Shaikh case brought back “bitter memories of history.”

The opium was grown and processed in India. Then it was shipped to China, where addiction was encouraged by British merchants. Those merchants included Jardine Matheson, which is still a power in Asian business.

The Chinese government tried to ban the opium from entering China. But the British would have none of it, and went to war in one of the most shameful of imperial adventures. The British argument was that the Chinese were willing buyers and opium was not illegal in Europe.

At the heart of this lethal trade was an imbalance as familiar now as it was then: There was high demand in Europe for Chinese goods– porcelain, tea and silk–and low demand in China for European goods. Although always technically illegal, the opium trade grew so large that it became an important source of revenue for the British administration of India.

The two wars, 1839-43 and 1856-60, humiliated the Chinese and undermined the Quin Dynasty. Now China says Britain is up to its old tricks: supporting illegal drug dealers and undermining Chinese law.

If China were not so self-confident in its new role as a world power, the latest dispute would have been papered over by China agreeing to the reasonable British demand that the executed man be examined for mental competence. But not so. And not so on many fronts.

Last year China consolidated its grip on Africa, where it signed scientific cooperative agreements with 47 countries and entered natural resource tie-ups with as many. It also has natural resources tie-ups in Latin America.

China is beginning to throw its considerable weight around–just enough to remind the world that it is too big and too important to be seriously challenged.

Consider that China refuses to revalue its currency; won’t sanction Iran; undermined the climate change conference in Copenhagen; and makes outlandish territorial claims on the South China Sea and the outer continental shelves of its neighbors. Also, China coddles pariah states North Korea and Sudan.

One cannot blame China for succeeding, but one can blame the international business community for fleeing to Chinese manufacturing. Americans can blame budget deficits for China’s holding of more than $2 trillion in U.S. debt. We put ourselves willingly in the noose. In criticizing, as it has done, the buildup in the U.S. deficit, China reminds that it can tighten the noose at any time.

It looks as though 2009 was the year when we began to pay the high price of cheap sneakers at Walmart.

 

Naming the Decade of Arbitrary Facts

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Tradition dictates that we now play “Name That Decade.” To play the game, we need to list the seminal events of the past decade.

Dominating was the bloody, evil and heinous attack on the World Trade Center, setting Christendom at odds with the Muslim world and causing people all over the world to wonder where and why Islam had gone so wrong.

The decade had begun with an enthusiastic innocence about the United States being the only superpower and under its new president, George W. Bush, becoming a kind of international homebody: no nation-building, foreign adventures or radical changes at home.

The Bush administration was to be about creating an echo of Ronald Reagan. If there were to be bumps, they would be the bumps necessitated by the need, as seen by Bush and his supporters, to eradicate the worst excesses of Clintonism.

Out went treaties — especially the Kyoto Protocol — and in came a kind of arrogance through ideology. To win was simple: Straighten up and think right. If you got the philosophy right, everything else would fall into place.

Oddly, this was the same thinking that bedeviled countries in Europe and Africa after World War II. Successive British Labor governments, starting with the Attlee government of 1945-51, said as much. They believed in the theory of pure heart: Get that right and everything else would work out.

In Britain it meant financial crisis after crisis; and the uncontrolled growth in trade-union power, accompanied by a surge of immigration from former British possessions including Pakistan, Bangladesh, India the Caribbean and Africa. Islam gained a foothold in Britain that looks like a bridgehead today.

Reality met liberalism and trounced it. Having the right philosophy turned out to be more liability than asset when it came to governing.

But philosophy — dogma really — retains its allure for the right as well as the left. The Reagan years left the impression that if you had the right philosophy, you could accomplish big things. If George W. Bush had any far-reaching idea, this was it: Get the philosophy right and the walls of any evil empire will tumble, including militant Islam.

So began one of the decade’s outstanding aspects: the manufacturing of facts to justify actions motivated by, er, philosophy.

Bush and British Prime Minister Tony Blair believed so fervently that all people yearned for democracy and only bad leaders kept them from being free in the Western way, that they manufactured facts about Iraqi President Saddam Hussein’s weapons of mass destruction.

This led to the real awfulness of this decade: the idea that facts do not matter. The late Senator Daniel Patrick Moynihan, Democrat from New York, said you are entitled to your own opinions, but not to your own facts.

Alas, the first decade of the new millennium became a place where rhetoric is uncontaminated with facts.

Do you prefer the fact-free or the lying decade? Politicians lied, but they always have.

The decade ended with another seminal event: the election of Barack Obama as president.

Again, there was euphoria. It did not last. The great expectations of the campaign were dampened by realities of governing.

The man who was voted into office to end the American wars in the Middle East found that in Afghanistan, he had facts that required an extension, an escalation. He never revealed these facts. The right clapped with one hand and the left sank into misery.

The mid-term elections in 2010 will pit left-wing facts against right-wing facts. But they are not facts; they are claims posing as facts — about war and peace, energy and climate, immigration, health care and taxation. –For the Hearst-New York Times Syndicate

 

After 40 Years, Environmentalists Start To See the Nuclear Light

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Although very little happened, Nov. 24 was a red letter day for the nation’s nuclear power industry. No new nuclear reactors were purchased, no breakthrough in treating nuclear waste was announced, and the Obama administration did not declare that it would pay for new reactors.

Instead, the source of the industry’s happiness was The Washington Post leading Page One with an article that detailed how the environmental movement, after 40 years of bitter opposition, now concedes that nuclear power will play a role in averting further harm from global warming.

Mind you, not every environmental group has come around, but the feared and respected Natural Resources Defense Council has allowed that there is a place for nuclear power in the world’s generating mix and Stephen Tindale, a former anti-nuclear activist with Friends of the Earth in the United Kingdom, has said, yes, we need nuclear.

For the nuclear industry which has felt itself vilified, constrained and damaged by the ceaseless and sometimes pathological opposition of the environmental movement, this changing attitude is manna from on high.

No matter that the environmentalists, in opposing nuclear since the late 1960s, have critically wounded the U.S. reactor industry and contributed to the construction of scores of coal and gas-fired plants that would not have been built without their opposition to nuclear.

In short, the environmental movement contributed in no small way to driving electric utilities to the carbon fuels they now are seeking to curtail.

Nuclear was such a target of the environmental movement that it embraced the “anything but nuclear” policy with abandon. Ergo its enthusiasm for all forms of alternative energy and its spreading of the belief —still popular in left-wing circles — that wind and solar power, with a strong dose of conservation, is all that is needed.

A third generation of environmental activists, who have been preoccupied with global climate change, have come to understand that a substantial amount of new electric generation is needed. Also some environmentalists are beginning to be concerned about the visual impact of wind turbines, not to mention their lethality to bats and birds.

Of all of the deleterious impacts of modern life on the Earth, it is reasonable to ask why the environmentalists went after nuclear power. And why they were opposed to nuclear power even before the 1979 accident at Three Mile Island in Pennsylvania and the catastrophic 1986 Chernobyl reactor failure in Ukraine. Those deserved pause, but the movement had already indicted the entire nuclear enterprise.

Having written about nuclear energy since 1969, I have come to believe that the environmental movement seized on nuclear first because it was an available target for legitimate anger that had spawned the movement in the ’60s. The licensing of nuclear power plants gave the protesters of the time one of the only opportunities to affect public policy in energy. They seized it; at first timorously, and then with gusto.

The escalation in environmental targets tells the story of how the movement grew in confidence and expertise; and how it added political allies, like Ralph Nader and Rep. Ed Markey, D-Mass.

The first target was simply the plants’ cooling water heating up rivers and estuaries. That was followed by wild extrapolations of the consequences of radiation (mutated children). Finally, it settled on the disposition of nuclear waste; that one stuck, and was a lever that turned public opinion easily. Just mention the 240,000-year half-life of plutonium without mentioning how, as an alpha-emitter, it is easily contained.

It is not that we do not need an environmental movement. We do. It is just that sometimes it gets things wrong.

In the days of the Atomic Energy Commission, the environmental groups complained that it was policeman, judge and jury. Indeed.

But environmental groups are guilty of defining environmental virtue and then policing it, even when the result is a grave distortion, as in the nuclear imbroglio. Being both the arbiter of environmental purity and the enforcer has cost the environment 40 years when it comes to reducing greenhouse gases. –For the Hearst-New York Times Syndicate

 

The Chopstick Invasion of Africa Continues Apace

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Even the celebrated 19th-century scramble for Africa seems to pale compared to the huge and growing Chinese presence, which is roiling the continent.

For a decade, China has been buying its way into Africa to secure the fuel and raw materials it believes it will need for its economic expansion.

These Chinese moves in Africa are breathtaking in their scope. Whereas the European grab for Africa and its treasures in the l9th century was haphazard, and fed by rivalry in Europe as much as interests in Africa, the Chinese neo-imperialism has a thoroughness and a planning that no European power — not even Britain — ever aspired to.

China is reported to be active in 48 countries out of the roughly 53 real state entities on the continent, or on its offshore islands. The Chinese formula is simple: Buy your way in with soft loans and generous arms deals but, above all, a preparedness to overlook the excesses of dictators. No wonder Robert Mugabe in Zimbabwe lavishes praise on his new best friends.

The same is true in many other African countries. All that is needed for Beijing’s embrace is a supply of raw materials — and especially oil.

From Cape Town to Cairo, China is on the march. From South Africa it buys iron ore, among other minerals; from Zambia, copper; and from Zimbabwe chrome, gold and iron ore.

In Zambia, the Chinese have promised $3.2 billion to revive the copper industry — an interesting development because Western mining companies pulled out, unable to deal with the wholesale and destructive corruption.

At a meeting of the Forum on China-Africa Cooperation at Sharm El Sheikh in Egypt earlier this month, the Chinese pledged $10 billion in aid to Africa. Quietly, they also forgave a tranche of maturing loans.

But government-to-government loans are the least of the Chinese investment in Africa. Most of the investments, such as that in Zambia, are made by Chinese corporations — all state-sanctioned and some state-owned. It is a concerted effort.

While oil producers like Angola, Chad, Libya, Nigeria and Sudan are prime targets of the Chinese investment, the rapacious Chinese economic imperialism also extends to lumber and agriculture.

The ruling elites of Africa are ecstatic. The Chinese presence is, for them, heaven-sent. Polling, albeit rudimentary, reveals about 80-percent approval of China’s African role by Africa’s elites.

At the street level, these findings are reversed. The Chinese are roundly resented. They have no experience in the world outside of China; no curiosity about these strange African lands and their people; and a morbid indifference to Africa’s long-term future. Most Chinese workers, as opposed to executives, brought to Africa are poorly educated and ill-equipped to live in different cultures.

A study by Loro Horta, a visiting fellow at Nanyang Technological University in Singapore, found deep unhappiness in a study conducted in many African countries.

First and foremost, Horta found, China does not employ local labor, preferring to import Chinese workers and to house them in “Chinatowns.”

Second, the indifference of Chinese enterprises to environmental damage is of concern.

And third, China is accused of dumping inferior goods and medicines on the African markets. Africa’s fragile but important textile industries are being killed off by a flood of cheap Chinese manufactures.

More, Chinese merchants are flooding in and displacing local traders.

Horta quotes a school teacher in Mozambique, “They (the government) say China is a great power, just like America. But what kind of great power sends thousands of people to a poor country like ours to sell cakes on the street, and take the jobs of our own street-sellers, who are already so poor?”

Then there is the Chinese language push. The Chinese government has set up schools in many places to teach Chinese to reluctant people who would prefer to improve their English and French skills, legacies of the last scramble for Africa.

But while China buys off Africa’s elites, and provides them with weapons to suppress their own people, the rape of Africa will continue. –For the Hearst-New York Times Syndicate

Women of Zimbabwe Have Had Enough, Fight Back

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Of all those who have been hurt and died terrible deaths in the Time of Robert Mugabe as prime thug in Zimbabwe, none have been hurt more than the women. They have been beaten, imprisoned, raped and starved; They have watched the bulldozing of their shacks; and they have watched the slow, terrible deaths of their children from malnutrition and untreated disease.

Maybe one of the worst of the hurts suffered by the women is the fear that they will die ahead of their young children, leaving them to die alone of starvation.

Such a tale was told in Washington this week by two of Zimbabwe’s most remarkable women. A mother of three went out to forage for food but collapsed and died. The starving children found some fertilizer she had hidden against the day when she could get some corn to plant. The children thought the fertilizer pellets were grain and made porridge with them. All three were poisoned and died.

Yet Magadonga Mahlangu and Jenni Williams, principles in the nonviolent, grassroots movement WOZA, talked not about privation and murder, but hope. Hope for enough food; hope for an end to violence to themselves; hope for their children; and hope for a free, productive and stable homeland.

Although both women have each been arrested more than 30 times, imprisoned and held without bail for a long period (“on remand,” in the English common law language of the tattered Zimbabwe legal system), they remain optimistic. In hell, they dream of heaven.

WOZA, which stands for Women of Zimbabwe Arise, but is also an Ndebele word meaning “come forward,” was formed in 2002 as a non-violent, non-political group, committed to the protection of women and their families by teaching them to protest for their human rights and by teaching them some basic skills, such as how to avoid violence and rape, whether it is domestic or state-sponsored.

Both Mahlangu and Williams are from the nation’s second city, Bulawayo, in Matabeland, where the predominant people are the Ndebele, an offshoot of the Zulus of South Africa. Mugabe may have reason enough to hate the women because of their activism, but the Ndebele have known his loathing since the first days of his rule in the early 1980s, when he sent his best troops, known as the Fifth Brigade, to effect a genocidal  massacre that is believed to have cost as many as 25,000 Ndebele their lives. Mugabe is a Shona, the largest tribal grouping in Zimbabwe–which is slightly smaller than Texas–and the traditional rivals of the Ndebele.

Mahlangu is a pure-bred Ndebele, with a regal bearing that belies her long suffering at the hands of the police and military in Zimbabwe. Williams is of mixed race–with European as well as African ancestry–and therefore easily accused by the state paranoiacs of treason and crimes against the state. She says she is the subject of racial slurs from the police and security forces. They accuse her of being “white, English and a colonialist” even though she has the same coloring as President Barack Obama.

Although the two women have been frequently arrested and detained without trial, they have never been convicted. The charges most leveled are for threatening public order. Mostly, they have been held in police cells. Once one of them was taken to a men’s prison, where the arresting officer warned her that she needed a strong stomach. When she got there she found 500 men without sanitation, adequate water or food. Some had died, and others were dying of dysentery and starvation.

The women were brought to Washington on a low-key visit, organized by the Robert F. Kennedy Center for Justice & Human Rights to receive its human rights award for 2009, presented to Mahlangu. Williams accepted for the women of Zimbabwe. The prize money, $30,000, will go to a violence and rape prevention program.

Extraordinarily, WOZA is not looking for money. Instead, they want the world community to bombard the police commissioner and the judiciary with faxes and e-mails to protest what Williams calls “persecution by prosecution.” WOZA, now 60,000-strong, can be found on the Web at www.wozazimbabwe.org.

Both women go on trial again Dec. 7. “If they know the world is watching, it helps,” says Mahlangu.

Besides human rights, the women have one other hope. They want to see Obama in person, even if it is across a crowded room.–For the Hearst-New York Times syndicate

 

Who’s Afraid of Regulation? Not Warren Buffett

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So Warren Buffett has bought himself a railroad: Burlington Northern Santa Fe, to be exact. Crafty fellow.

Buffett famously invests in easy-to-understand large companies with a strong competitive advantage that generate cash and above-average return on capital. He has not been dazzled by the computer age. Computers, though, have had a dazzlingly disruptive effect on one of his investments: The Washington Post Company, for which Buffett serves as a director.

By his own account, Buffett finds newspapering scads of fun, connecting with journalists. Because The Post Co. bought Kaplan, Inc., the educational services outfit, Buffett and other Post investors have been spared some of the pain that falling advertising and circulation have inflicted across the industry.

Even as he was enjoying newspapering, Buffett appears to have had his eye on more solid industries. In 2000, he paid $1.7 billion to acquire an 85-percent stake in utility MidAmerican Energy Holdings Company, and later acquired the rest. Now he is paying $26.3 billion to acquire all of Texas-based Burlington Northern Santa Fe.

It would appear that in these investments, these dull industrial cornerstones, Buffett has chosen government oversight over technological vulnerability.

Both utilities and railroads are government regulated and subject to the vagaries of public policy. But they are both necessary, and therein lies Buffett’s comfort factor. Electric utilities are not known for their gyrations, nor are railroads. Indeed, both have been largely shunned by hedge funds because they lack volatility.

Buffett, it would seem, is not balked by government or its impact, through regulation, on whole classes of businesses. Electricity companies are heavily regulated at the state and federal level–and in other ways, including pollution control, fuel mix and return on equity. Similarly railroad safety, service and return on equity are dictated by regulators.

Since the heady days of deregulation in the 1980s and 1990s, despite the conservative dialectic, the electric utility industry, in particular, has discovered regulation by the government to be both a burden and a godsend. Government stifles but it also succors.

Wall Street is conflicted about regulation. While it loves the security regulation brings to electric utilities, gas distribution companies and railroads, which makes their debt an attractive investment, it fears the extension of the government’s embrace to other industries and to itself. Wall Street would love, for example, to see the airlines back under the government’s wing–as would the carriers themselves.

While the political class is consumed with the machinations of Congress, and the activism of President Barack Obama, Buffett is tacitly declaring his apprehension about disrupting technologies: computers and their progeny, like the Internet and wireless communications. Buffet is voting for investments that cannot be moved to China and cannot, by today’s reckoning, be rendered obsolete by technology.

Washington is awash with analysts, pundits, reporters and strategists aggregating and disaggregating, dicing and slicing the smallest morsel of political change. Yet, since the end of World War II, technology has had as much claim on change as politics. The three great political events of this time have been China’s conclusion that communism and capitalism can abide together; India’s final realization that protectionism was holding it back; and the collapse of the Soviet Union. Did the end of the British Empire matter? Not really.

By stealth, technology has been changing the world, wiping out whole areas of endeavor and creating new ones. Thanks to the green revolution between 1950 and 1984, the world has been better fed. Thanks to the microprocessor, we have been gadgetized–from the way we enjoy music to the ease with which we stay in touch by telephone. Thanks to the jet engine, the world has been opened to all who can afford to fly. And thanks to new technologies, medicine posts successes daily.

But it is the computer that has changed everything, for good and otherwise. It is the computer that has robbed us of our privacy, but has put the great libraries of the world at our fingertips. It has made writers of us all, even while undermining traditional journalism.

So while we are parsing electoral tidbits, technology is the real shaping force loose in the world.

If you cannot embrace it, try and get to some safe, predictable high ground, like Buffett. He is known as the Oracle of Omaha for good reason. –For the Hearst-New York Times syndicate

Government Isn’t as Bad as We Think

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Here’s a dirty little secret: The Post Office isn’t so bad.

Although it’s the rhetorical emblem of all that’s wrong with government, the postal service is surprisingly dependable and efficient. Letters get delivered by the millions and very few are lost.

Where the Post Office fails, as most government enterprises fail, is that its dynamic is antithetical to creativity, invention and risk-taking. Government enterprises seldom innovate, except those in the defense arena and collateral endeavors like space exploration. The Bonneville Power Administration, a federal agency, does its job well enough, as does the FAA in controlling aircraft. It just wasn’t in the Post Office to create FedEx.

In Washington, and across the nation, politicians repeat often and loudly that the worst outcome of any new endeavor would be for the government to run it. To hear Rep. Louis Gohmert, R-Texas, tell it, the government is a vast anti-American conspiracy. Recently, he took to the House floor to protest against a government role in health care and claimed that anything government-run means socialism to him. And socialism, according to Gohmert, is the slippery slope to totalitarianism.

In Washington, there’s a more ambivalent attitude toward the bureaucracy. It’s not an abstraction to Washingtonians; government workers are neighbors, commuting companions, friends and family.

But that doesn’t mean that Washingtonians are taken in by it, or that they believe the government should grow more.

If you know enough government workers, you know that they’re not created equal; neither are their departments and agencies.

The Department of Defense is an archipelago of islands of success in a sea of contradiction and confusion. But the agencies, like Housing and Urban Development and Labor, are resigned to a level of ineffectiveness, often doubtful of the virtue of their own missions.

The challenge is to know what is best left to government or to the private sector.

Attempts to privatize support sectors of the U.S. military (base maintenance, security, fuel, etc.) have led to scandals at every level for companies like Blackwater (now known as Xe Services) and KBR, denounced in Congress and the media. Privatizing war is a questionable undertaking.

As often as not, government is lumbered with failing or failed businesses for political or social reasons. Amtrak is front-and-center among these and General Motors may join the group of government orphans — too important to fail and too rickety to succeed.

Finally, there is no political will to tackle the thorny issue of productivity in the bureaucracy. Politicians complain of government in the abstract and praise “hard-working men and women” in specific agencies.

Sadly, it boils down to hiring and firing. It’s hard to get hired in the government because of rules and rigidities and even harder to get fired.

The reverse applies in the private sector. Business operates on incentives, but also on fear. Fear is missing in government employment and it shows.

Government is not as inept as conservative politicians like to say, any more than CitiBank and AIG were models of corporate governance.

Some things organically belong in the government’s sphere and others far from it. Today’s question is: Where does health care fit?  –For the Hearst-New York Times Syndicate

Mugabe in Winter—Still Powerful and Comfortable

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The devil looks after his own. Or so it would seem in the case of Robert Mugabe, the de facto dictator of Zimbabwe.

Under Zimbabwe’s unity government established last year, President Mugabe, who took Africa’s garden and trashed it, has retained enough power to reverse the optimistic direction the country is taking. He and his ZANU-PF party still control the discredited central bank; the military; the police; the Central Intelligence Organization, which is Zimbabwe’s version of the KGB; and the Ministry of Information.

Prime Minister Morgan Tsvangirai who, until the formation of the unity government was Mugabe’s great enemy and rival, has control of the Ministry of Finance. His ally, Finance Minister Tendai Biki, has done the impossible: He has brought the worst inflation the world has ever known to a halt.

The remedy was simple, though extreme. Biki substituted the U.S. dollar for the worthless Zimbabwe dollar. How worthless was it? Would you believe a currency that once had rough parity with the U.S. dollar was trading–if you could find a buyer–for 1 billion (sic) Zimbabwe dollars to 1 U.S. dollar? Incredibly, the Mugabe faction of the government and ZANU-PF party members want to bring back the Zim dollar, as it was known.

Under the new setup, the Zimbabwe Stock Exchange has reopened and is prospering. And again, shops have goods on the shelves for those who can afford them. While U.S. dollars have circulated illegally in Zimbabwe for some time, it is unclear where they are now coming from, and what is the plight of those who have no access to them and no employment, which is most of the population.

In fact, many Zimbabweans live in a barter economy without cash. Rural people lead a desperate subsistence life, relying on perhaps a few chickens, sometimes a goat or, if relatively well off, some cattle. Most depend on growing enough corn to feed their families and on the generosity of relief agencies, although these are often the targets of Mugabe’s thugs. Food is power and Mugabe has used his troops, police and secret operatives to control food, starving the opposition and feeding only his political loyalists.

In the face of Zimbabwe’s tenuous recovery, there are many questions about Mugabe and his acolytes, and about Tsvangirai and his Movement for Democratic Change.Will Mugabe use his control of the military and the courts to destroy Tsvangirai’s reforms?

Mugabe likes to be the top man, even the reviled top man. His unhinging can be traced back to Nelson Mandela’s release from long imprisonment in South Africa and the deserved global acclaim he was welcomed with. Until then, Mugabe had been the golden African leader. Also he and Mandela were courting Graca, the widow of former Mozambiquan leader Samora Machel. Mugabe lost out and Mandela married her.

Too much praise for the reformers in Zimbabwe might set Mugabe off on another spree of destruction. His favorite charge–if he bothers with charges as opposed to random beatings—is treason, which is a hanging offense in Zimbabwe.

There are also question about Tsvangirai: Some of his early supporters are very critical of his conduct as prime minister. One critic, who does not want to be identified but who played a big role in establishing the unity government, told me: “He has become Mugabe’s bagman. That’s about it.”

This was a reference to Tsvangirai’s recent world fund-raising trip. He did secure minor commitments from doubting donor nations, but most want to see what happens. The money that was raised will go to humanitarian efforts, not the Zimbabwe government.


The success or failure of financial reforms may rest on the diamond fields of eastern Zimbabwe. These were only discovered in 2006 and should have been a valuable source of hard currency for Zimbabwe. But Mugabe had another idea: He allowed the military to massacre itinerant miners (in one case, 80) and seize the mines for their own profit. This has solved a pay problem among soldiers and kept the military faithful to Mugabe. Another gift from the devil for his protégé, Robert Mugabe.

U.S. Chamber of Commerce Faces Its Own Guns

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The U.S. Chamber of Commerce’s building on H Street in Washington glowers across Lafayette Park at the White House. It is a impersonal building, austere even, reminiscent of a British colonial post office.

 

With 3 million members, and the largest budget of any trade group in Washington, the chamber is a political force to be reckoned with, as is its hard-driving chief executive, Thomas Donohue.

 

Its stance is that American business is a kind of Gulliver, tied down by the Lilliputian strings of regulation and regressive public policy. Under Donohue, the chamber has relentlessly sought out threats to business, real and hypothetical. It opposes unions; regulation; government intrusion into markets; expansion of programs that cost tax dollars, which is all social programs; and raising the minimum wage. It is more ambivalent these days about health care. And Donohue can be quite capricious; for example, he has called for normalizing relations with Cuba.

 

Now the chamber is roiled as it seldom has been. The casus belli is climate change, and what a storm it has produced. Three large electric utilities have withdrawn from the chamber, accusing it of extremism in its stance on climate change. Sneaker giant Nike has resigned from the chamber’s board of directors in protest, but is still a member.

 

The utilities include Exelon, by some measures the largest utility; Pacific Gas & Electric, a giant in California; and PNM, the largest utility in New Mexico. As a percentage of membership, they do not affect the chamber much; but strategically, their rebuke means a great deal. They are the very constituency the chamber and Donohue are out to help. They burn coal as well as other fuels, and they are critically affected by what is to happen in climate legislation or regulation.

 

The utilities want Congress to pass cap-and-trade legislation. If Congress fails to pass the legislation, they fear Environmental Protection Agency regulation. The stakes are high. The chamber is opposed to the present cap-and-trade legislation before Congress, and has challenged the science that would be used by the EPA.

 

“If Congress does not act, the EPA will and the result will be more arbitrary, more expensive and more uncertain for investors and the industry than a reasonable, market-based legislative solution,” said John Rowe, Exelon’s chairman and chief executive officer.

 

Two of the big rebel utility CEOs are national business figures: Rowe of Exelon is revered as a prince-philosopher inside and outside of the electric industry; and Peter Darbee of PG&E, who wrote a strongly-worded letter of resignation to Donohue, is a major corporate friend of the environment.

 

All three utilities, along with their Washington trade association, the Edison Electric Institute, favor cap-and-trade legislation now being considered in Congress. Another utility savant, James Rogers of Duke

Energy, is pulling his utility conglomerate out of the National Association of Manufacturers, because of its opposition to cap-and-trade.

 

Darbee hit hardest at the chamber. In a two-page letter he wrote: “We find it dismaying that the chamber neglects the indisputable fact that a decisive majority of experts have said the data on global warming are compelling and point to a threat that cannot be ignored. In our view, an intellectually honest agreement over the best policy response to the challenges to climate change is one thing; disingenuous attempts to diminish or distort the reality of these challenges are quite another.”

 

The chamber has opposed not only the EPA’s plans to regulate carbon emissions in the absence of legislation, but also has attacked the scientific basis put forward by the agency. Yet Donohue insists that the chamber is neither denying the carbon emissions problem, nor is opposed to a legislative solution. Instead, it wants one tied to a global agreement on greenhouse gas emissions to protect U.S. companies from onerous conditions.

 

Friends of Donohue–who applaud much of what the chamber stands for–say that it is caught in a position where it has to say what it is for, not just what it is against. The chamber has always been at the barricades, not facing its own guns. The experience is novel and unpleasant for those on H Street. –For the Hearst-New York Times Syndicate

 

 

 

The Benefits of Natural Gas

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Natural gas is nifty stuff. It burns twice as clean as other fossil fuels, leaves no ash to be disposed of and is critical to many industrial processes.

It is used for everything from drying grain to distilling liquor. It also can fairly easily substitute for oil as a transportation fuel. Buses in big American cities increasingly run on it, as taxis in Australia have for years.

Its history is a tale of how markets work, how technology can broadside the best futurists, and how planners and politicians can get it wrong.

More important than the lessons of history is the fact that we appear now to have more natural gas than was ever predicted, and we can look forward to possibly hundreds of years of supply at present rates of use. And it could slay the foreign oil dragon, or at least maim the brute.

Trouble is, because of its tortured history, natural gas has often been put on the back burner.

When the first commercial oil well, the Drake, was sunk in western Pennsylvania in 1859, natural gas, or methane to give it its proper classification, was not on anyone’s mind except deep miners, for whom it was a lethal hazard. The Oil Age began without natural gas. When it was found in conjunction with oil, it was unceremoniously burned off: a process known as flaring.

In the United States, natural gas faced political problems as well as infrastructural problems. Natural gas production was regulated by the predecessor of the Federal Energy Regulatory Commission, the Federal Power Commission. It was bound by a legal ruling known as the Permian Basin Decision that kept the price of natural gas artificially low, discouraging new supplies and new infrastructure, such as processing plants and storage. This led to shortages and to a lack of confidence in the future of natural gas.

During the energy shortages of the 1970s, natural gas was discounted by the government and much of industry. Congress panicked and passed a piece of legislation called the Fuel Use Act, which forbade the use of natural gas for many things, including pilot lights in new kitchen stoves. Utilities were told not to even think of burning natural gas: It was too precious and there was too little of it.

Gas demand declined precipitously in the 1980s. And in 1987, the Fuel Use Act was repealed. Along with deregulation of gas, a gas boom resulted.

But it was technology that changed everything. New drilling techniques increased supply. New turbines, based on airplane engines, started to enter the electricity market. They were clean, easy to install, and reached high efficiencies of fuel-to-electricity conversion. Today, 30 percent of our generation comes from these “derivative” machines.

So successful was natural gas in the 1990s that new concerns about supply shook the industry; and the public was told that gas would have to be imported from the Middle East, especially from Qatar. Permission was sought to build dozens of liquefied natural gas terminals around the coastlines.

Now it looks as if natural gas is a fuel with an enormous resource base–thanks to technology. The technology in question is horizontal drilling. Imagine you sink a hole 2 miles into the earth and then send out horizontal roots in all directions from this vertical trunk. That, in essence, is horizontal drilling and it makes available trillions of cubic feet of natural gas trapped in close formation shale deep in the earth.

Ironically, or fittingly, this takes the energy story back to Pennsylvania where a vast shale field called the Marcellus is being developed and will write the next chapter of hydrocarbon energy. This is good because it is plentiful, it is here and it builds on extant pipeline infrastructure.

Of course, it makes investments in many “alternative” sources of energy, particularly ethanol from corn, look like very poor investments. Cars and trucks that run on natural gas are an appealing alternative to ethanol with less disruption of the food chain and stress on the farms. –For the Hearst-New York Times Syndicate