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

 

Hey Dick, Add a Spoonful of Socialism to Your Tea

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MAASTRICHT, Netherlands — The English like to say, from an old music hall song, “a little of what you fancy does you good.”  Well, so does a smidgeon of socialism.

Shock horror! Alert Dick Armey, inform Rudy Giuliani and let Rupert Murdoch know. Heresy is dangerous, and the correct authorities should be informed.

Like most people who rail against European socialism, those three have been the beneficiaries of some largesse that might be described as socialistic.

Armey, who is leading the tea bag revolution and who talks of the socialist threat as though a fleet were coming up the Potomac to sack Washington, is the beneficiary of the rights, honors and money that come from being a former congressman, all the way down to a handsome health care package.

Then there is Giuliani, who presided over the second most liberal city in the United States, after San Francisco, added to its amenities and improved America’s largest subway system. Notably, he did not end rent control, now known as “rent stabilization,” nor did he end a plethora of liberal services available in New York. Yet if the former mayor, who wanted to be president, wants to denigrate something, he utters the “s” word.

Murdoch is special. He has played footsie with the Gordon Brown Labor government in London; played up to the Communist Chinese; cooed over the Clintons and booed ideas of assistance to the media; and employed a staff at Fox Cable News who are devoted to castigating Europe and its left-of-center democracies. Worse, Murdoch has benefitted over the years from various government subsidies including the Commonwealth Press Cable Rate, which moved news inexpensively around the world before the Internet. And he has never cried out against second-class postage, another huge government subsidy to publishers.

OK, socialism, even the mild kind favored here in the Netherlands, isn’t the promised land of governance; but it produces, at the street level, some pretty agreeable result. Scads of American visitors groove on the country’s parks, public toilets, bike paths and buses that are easy to use.

This small city of about 200,000 bears its medieval history with pride and its socialist amenities with grace, from miles of bike paths to trains that can whisk you to the next hamlet or to Hamburg, Germany.

Travel to a nearby major city, like Amsterdam, Brussels or Paris, and Europe is yours with its high-speed trains that crisscross the continent at 200 mph, and even plunge under the English Channel to London’s St. Pancras Station, a masterpiece which has been restored to its Victorian glory.

London itself adds public amusements with pride. Three recent ones are the Ferris wheel, known as the London Eye; the foot bridge across the Thames, nicknamed the “wobbly bridge”; and the New Tate, an art gallery in an old power station.

You can put this down to the kind of post-socialism that former British prime minister Tony Blair (a Murdoch man) described as “social-ism;” not the old-school, “Keep the Red Flag Flying” socialism, but the idea that people are entitled to services beyond national defense. A good question for Giuliani might be: “Would you have approved the building of Central Park?”

Where socialism–lite has failed in Europe is in an excess of regulation, particularly the rigidity it has brought to hiring and firing. This has kept small business in Europe operating at the mom-and-pop level, scared to hire because in most European countries firing is subject to a labor tribunal’s approval. Approval seldom comes.

One of the great drivers of entrepreneurism in the United States is the harsh but effective idea that employees serve “at will.” That, the socialists can’t stomach. They want Paradise enow.

A little socialism will do–and we needn’t mention single-payer health care.

 

Crime and Art: A Young Man’s Christmas in London

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It was Christmas, exactly 50 years ago. It was also when I masked petty crime with arguments of social justice, and when life exactly imitated art. Really.

Fortnum & Mason, the London food emporium, has been dispensing Christmas cheer in Piccadilly since 1707. It is a British tradition as famous as its rival Harrods, located about a mile away in Knightsbridge.

But whereas Harrods is a department store with a great Food Hall, Fortnum & Mason is mostly a top-of-the-line — very top — food store that flourishes at Christmas as at no other time of year.

Fortnum’s specialty is its Christmas hampers. They are capacious wicker baskets stuffed with comestibles from around the world: candied fruits and honey, dates and figs, goose foie gras with truffles, jellies and preserves, shortbread and rare teas, smoked salmon and caviar, Stilton, fruitcake and Christmas puddings. You get the picture: a cornucopia of goodies, or conspicuous consumption, depending on your point of view.

Well, all these goodies do not get into the Christmas hampers and snuggle in the wood shavings all by themselves. Nor do they stretch the cellophane and tie the bows themselves.

No, that was my job at Fortnum’s where I and a small crew of disparate young men worked, held together by the reality that we were all far from home, broke, cold and our immediate prospects were not great.

I had arrived in wintry London a month earlier from sunny Rhodesia, now Zimbabwe, expecting immediate journalistic success. Instead I was broke, owed rent on my room, lacked a warm coat and had a hole in one shoe.

Then I learned that Fortnum’s was hiring packers for the Christmas season. I signed on at the glorious store in Piccadilly, but that was the last I saw of it. Instead, I worked in an unheated warehouse at the Elephant and Castle in South London.

The wages were 6 pounds a week (about $25) — a reminder that England was still a poor country in 1959. Poor, that is, except for those who sent and received fabulous Christmas hampers.

Some customers sent hampers like Christmas cards to lists of friends, usually titled people, from earls and marchionesses all the way down to lords and ladies. Worse, some recipients were on multiple lists. So heavily laden, how could the hamper fairy make her deliveries to the stately homes?

Although I was a staunch conservative, I found myself dreaming of revolution. All of the hamper packers seemed to be hungry all the time. Our pay was spent after a few days and then we starved — starved while packing the world’s finest foods.

Stealing a few items seemed reasonable, but the security people checked for empty wrappers and other incriminating evidence of consumption. But I came up the solution, the perfect crime: We would selectively eat the food and ship the empty cans and boxes out to the better-fed.

What is more, I explained to my fellow packers, no one would complain to their friends that the hamper was wanting in some areas. More, the chance of recipients ever touching the hampers was slight, particularly if we pilfered only from those going to a family that was on several lists.

The butler, I calculated, would simply tell his employers that hampers had been received from, say, nine friends. And the servants would almost certainly be given the hampers the day after Christmas: Boxing Day in Britain, when the leftovers of Christmas are boxed for the servants and the less fortunate. We were just getting our boxes early.

So we gorged and rationalized our thievery, the way people do.

On our last day the foreman, a permanent employee of the store who earned the princely sum of 8.5 pounds a week (about $34), came to us at midday and in his gentle, world-weary way said that as a Christmas treat, he was taking us to lunch.

This was terrible. We had already had our fill of rich Christmas cake, gooseberry jam spooned out with our fingers and piles Scottish shortbread.

Nevertheless, we accompanied the foreman to a workmen’s cafe that served up vast portions of such dishes as sausage, egg and chips (French fries), bubble and squeak (reheated potato and cabbage) and rissoles (ground, fried, leftover meat). The wise ordered the sausage, egg and chips.

We ate like marathon runners on the 25th mile, doggedly, dutifully and desperately. We lied in our thanks and longed to throw up. We chewed out of decency.

It was all out of an O. Henry short story. Or was it Dickens?

This soothed my conscience: Life was imitating art.

 

Unwelcoming House

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There is a knot of people standing outside the Northwest Gate of the White House. They are cold and unhappy, clutching driver’s licenses and other forms of identification.

Taking his turn, one man shouts into a communications box. He has an appointment, but he is made to feel as though he is a rascal after the silver.

There are no welcome mats at this or any other gate to the White House. You feel under suspicion until you are cleared in–when you go from indignity to thrilling proximity to power.

There are no waiting rooms or seats at the gates. There is no one posted at the gates to welcome visitors.

Things go badly for visitors who are not carrying ID. Some years ago, singer Vic Damone and his wife, Rena Rowan Damone, showed up at the Northwest Gate. They had an appointment, but Mrs. Damone didn’t bring her purse and didn’t have any ID. No ID, no entry.

The Damone tableau is played out frequently. The People’s House is not people-friendly.

Worse, because entry is badly organized, and often excessively restrictive, neither visitors nor guards respect the system–a clue as to how the Bonnie and Clyde of social-climbing, Tareq and Michaele Salahi, got in to President Obama’s first state dinner without an invitation, and even spoke to the President.

Security at the White House gates has grown since the Lyndon B. Johnson administration. Every subsequent administration has built on the excess security, and faux security, of the previous one.

The guards are members of the uniformed unit of the Secret Service. They complain about the job a lot. The problem seems to be pay; their beef contributes to the attitude faced by visitors.

The Salahi affair demonstrates how too much security results in a breachable wall. But there is too much faux security in Washington, too.

Since 9/11, a vast army of security people (rent-a-cops) has taken over corporate and government buildings in the nation’s capital. They sit at desks or in glass boxes in the lobby of almost every office building. They are there to get visitors to sign in and to show the dreaded ID.

But you can sign in as almost anyone and nothing happens. Any name is good enough in the world of faux security.

Every week I go to a particular radio studio, where I have to sign in and wait for a producers to escort me. The busy producers have to leave their consoles. The guards know this is a waste of time and effort. Everyone despises the charade and, therefore, disrespects the system.

At Voice of America headquarters, you have to produce a driver’s license and have your picture taken each time you enter the building. Taking pictures of all visitors is something even the White House does not require.

So which national secrets is Voice of America hiding that the White House is not? –-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