New Years' Sunday Reading

By John Ballard

Sunday is still two days off, but this is like a Sunday, so this can be this week's "Sunday Reading."

?Nouriel Roubini and Ian Bremmer have a WSJ column together. The subject is whether or not Japan's new prime minister, Yukio Hatoyama, will be able to get his country out of the ditch. Good old Dr. Roubini may or may not have written this part, but whichever of them did gives the president grudging approval. 

There are two main reasons why Mr. Hatoyama's unrealistic goals are more worrisome than any of the economic plans Mr. Obama has proposed.

First, there are far fewer political checks on Mr. Hatoyama's ability to pursue them. Mr. Obama faces a hostile Republican Party, a divided electorate, and moderates within the Democratic congressional caucus skeptical of his plans. He has accepted compromise on important issues like health-care reform and troop deployments to Afghanistan because he knows he must. Recognizing the complexities involved, he's taken a go-slow approach on domestic climate change legislation and the closing of the prison at Guantanamo Bay. Fiscal conservatives in both parties make a second stimulus package all but politically impossible.

The DPJ, meanwhile, has built a strong single-party majority in the lower house and relies on a pair of coalition partners to dominate the upper house. Mr. Obama's party has majorities too, but Mr. Hatoyama faces fewer institutional obstacles, like the filibuster, to setting a political agenda and pushing it forward.

Finally, the U.S. has a two-party system that allows business and industry groups to hedge their bets by lobbying both sides. Five months ago, Japan had a one-party system�one in which business elites negotiated legislative language with an LDP-dominated bureaucracy. For the commercial elite, it now has a no-party system, a ruling coalition of mostly new faces with far fewer connections in the business world.

Mr. Obama's innate caution and his willingness to compromise are likely to serve him well. To spare Japan an unnecessarily turbulent 2010, Mr. Hatoyama needs to become "Hatobama," a pragmatist ready to disappoint ideological allies and assuage centrist fears of a policy agenda his country simply can't afford. Japan's recovery is riding on it.

Roubini is listed Number Four among Foreign Policy Magazines Top 100 Global Thinkers. I learned of it because Blake Hounshell, whom many of us followed on the Web as "Praktike" before he rose to the editorial staff of that magazine, was the first guest on yesterday's Washington Journal. Another interesting piece to scan.

?Robert Reich takes a candid look backward and seems hopeful (but short of optimistic) that America has learned a tough lesson the hard way.

...the bailout of Wall Street was a sideshow. The real problem was on Main Street, in the real economy. Before the crash, much of America had fallen deeply into unsustainable debt because it had no other way to maintain its standard of living. That's because for so many years almost all the gains of economic growth had been going to a relatively small number of people at the top.

President Obama and his economic team have been telling Americans we'll have to save more in future years, spend less and borrow less from the rest of the world, especially from China. This is necessary and inevitable, they say, in order to "rebalance" global financial flows. China has saved too much and consumed too little, while we have done the reverse.

In truth, most Americans did not spend too much in recent years, relative to the increasing size of the overall American economy. They spent too much only in relation to their declining portion of its gains. Had their portion kept up -- had the people at the top of corporate America, Wall Street banks and hedge funds not taken a disproportionate share -- most Americans would not have felt the necessity to borrow so much.

The year 2009 will be remembered as the year when Main Street got hit hard. Don't expect 2010 to be much better -- that is, if you live in the real economy. The administration is telling Americans that jobs will return next year, and we'll be in a recovery. I hope they're right. But I doubt it. Too many Americans have lost their jobs, incomes, homes and savings. That means most of us won't have the purchasing power to buy nearly all the goods and services the economy is capable of producing. And without enough demand, the economy can't get out of the doldrums.

As long as income and wealth keep concentrating at the top, and the great divide between America's have-mores and have-lesses continues to widen, the Great Recession won't end -- at least not in the real economy.

The old phrase about keeping up with the Joneses applies here. That impulse was recognized during the boom years following WWII. Thrifty children of the Great Depression used it to criticize others failing to live within their means. As a generation or two grew up in borrowed splendor, they came to imagine that lifestyle is not based on whether we can actually afford something but whether we can make the payments.

One reason I remain a Democrat is that I lam impressed with many of the people chosen by both Clinton and Obama. People like Reich, George Stephanopolus and Larry Summers are either smart, squeaky clean or both. When I think of public figures I like of Republican origin, David Gergen is about the only one I can think of.

(There is a video after the jump.)

?James Kwak contributes to The Baseline Scenario, a group blog where practitioners of the dismal science assemble to share frowns. With a new year coming he ventures into uncomfortable territory, analysis without hard data and prognostications from hunches. These guys have only one feeling: discomfort whenever they leave their databanks. Like a prole in a call center glancing at the next cubicle he takes a look at China's economy.

...there�s been a lot of China boosterism in the past year or so, as the Chinese economy has returned to growth and its stock market has soared. The Times had an article today on the topic. I�m far from an expert here, but wasn�t the government basically ordering state-owned banks to lend money cheaply and without asking too many questions? Aren�t Chinese economic statistics so bad that economists use electricity consumption as a proxy for GDP? Haven�t we seen this movie before all over emerging markets around the world?

I think some of the U.S. press coverage of China reflects our pessimism about ourselves; in that sense, it reminds me of the idolization of Japan that took place in the 1980s. Of course, there are huge differences. The Chinese economy has nowhere to go but up, and with over 1.3 billion people its economy will surpass ours in gross output in my lifetime. (On a per capita basis, though, I don�t think that will happen in my daughter�s lifetime, even if there is a Chinese immersion charter school down the road here in Western Massachusetts.) But just as the United States is not on the brink of world-historical disaster, so everything is not perfect in China.

Down the comments thread I found this video taking a look behind the bamboo curtain. I need to get out more. I knew about the Chinese nuveau-riche, but I had no idea China had a place like Texas.  As I watched I had flashbacks of economic news about our own economy. If you recall how heavily invested China is in US Treasury notes, it gives a whole new meaning to the term paper tiger.

?Moving along...

Susie points to one of the most delicious end of the year columns yet. Mark Morford, columnist for the SF Gate, is a latter day Harry Golden or Art Buchwald, a left-leaning James Lileks. His New Years column,
Dear 2010; Be not like 2009, subtitled Please let us never go through sh-t like that ever again
is like a bowl of potato chips, heavy on the dip.

Let us just say it outright: Good riddance to the Zeros. It was, as widely noted, the decade from hell. It was easily one of the worst periods in recent American history, upwards of 3600 days drenched in fear and ignorance and bitter divisiveness, nipples and anthrax and macho shock n' awe, economic implosions and endless conservative puling about God and gays and terrorism, all slashed through with so much political misprision and presidential ineptitude it's going to require many more years until we the deep, humiliating scars inflicted by Dubya & Co. are fully healed.
[...]
...We finally have a president -- and will have a president, for much of the next decade -- who is simply light years more gifted, articulate, diplomatic, calm, fair-minded, astute, eloquent and (still) downright globally inspiring than any in decades. No matter your stance on the inherited war in Afghanistan, no matter the fistful of failures and disappointments to date, I remain fully convinced I'm witnessing the finest, most exciting, historic, deeply effective president in my lifetime, and probably yours. Don't believe it? Call me in 2020, and let's review.

The best part: We don't yet know his full capabilities, his true range. Right now Obama remains saddled with merely trying to unbury us, stem the hemorrhaging, recover some of the brutal BushCo losses. Such a task can't help but be frontloaded with bad news. But here's my prediction: once he can more fully dedicate his energies toward creating something new, instead of repairing the old and decrepit? Exhilarating.
[...]

There is no more Michael Jackson. There will soon be no more Oprah. There will be no more Tyra Banks. There will be less Simon Cowell. There will be far less Jay Leno (praise!) No more Jon & Kate. Harry Potter will wave his wand one last time and explode in a shower of Flugglewumps and repressed hormonal Zigglewaddles, or whatever he does at the end of that insufferable series. See? Things are looking up already.
[...]
China will outpace the US in every category except porn and gun murders and tongue kissing in the streets. Meanwhile, India will finally allow its first on-screen kiss in a Bollywood movie, if they really want to be taken seriously as a true international film powerhouse and not a brightly colored cartoon factory. Just a thought.

That's about two and a half hours worth at my pace of reading and blogging. Enough for one sitting.

I'll add more if time permits.

Meantime, Happy New Year.

?Okay, here's another one. The Economist, December 30, a fine piece about Waziristan. After reading it I better appreciate the magnitude of the problems there. By this description it appears to be a military analogue to Vietnam except worse. And it is the Pakistan forces that are expected to handle the problem. 

Waziristan, home to 800,000 tribal Pushtuns, is a complicated place. It is the hinge that joins Pakistan and Afghanistan, geographically and strategically. Split into two administrative units, North and South Waziristan, it is largely run by the Taliban, with foreign jihadists among them. If Islamist terror has a headquarters, it is probably Waziristan.
For terrorists, its attraction is its fierce independence. Waziristanis (who come mostly from the Wazir and Mehsud tribes) have repelled outsiders for centuries. Marauding down onto the plains of northern Punjab�now North-West Frontier Province (NWFP)�their long-haired warriors would rape, pillage and raise a finger to the regional imperialist, Mughal or British, of the day. No government, imperialist or Pakistani, has had much control over them. �Not until the military steamroller has passed over [Waziristan] from end to end will there be peace,� wrote Lord Curzon, a British viceroy of India at the turn of the 19th and 20th centuries.

[...]  Since mid-October, when over 30,000 Pakistani troops launched an attack on Mehsud territory, a retaliatory terrorism spree has ripped through every large Pakistani city, including Peshawar, Islamabad, Rawalpindi, Lahore and Multan. Over 500 have been killed and thousands injured, mostly by suicide-blasts executed by indoctrinated young Mehsuds. Senior army officers, who have lofty status in a country ruled by them for half its history, have been among the dead. Among 40 killed in a commando-style attack on a crowded mosque in Rawalpindi last month was the only son of Lieutenant-General Masood Aslam, commander of Pakistan�s north-western campaign.

[...] On occasion the PA may take notice of extraneous crimes, including the blood-feuds that are a fact of Pushtun life��We would never allow two tribes to fight each other indefinitely,� says Mr Shah. But the tribes are mostly free to decide such matters among themselves, which they do, remarkably harmoniously, through jirgas and riwaj�tribal customary law. In Waziristan, as in most of the tribal areas, there is no written land register. Nor, until 2001, was there much crime. �The tribal areas was lawless only in the sense that there are no laws. But they have a certain way of going about things there,� says Major Geoffrey Langlands, 92, a British colonial officer who stayed on, serving as headmaster of North Waziristan�s only secondary school for a decade. His tenure ended, in 1988, after he was kidnapped by an aggrieved Wazir. He considered his detention, in a frozen mountain hut, to be �quite tolerable, on the whole�. Major Langlands is now headmaster of a school in Chitral; his former school in North Waziristan was closed in July after the Taliban kidnapped 80 of its pupils and ten teachers.

The British frontier effort was cemented by a tough and accomplished breed of Pushtu-speaking British PAs, several of whom were murdered in Waziristan. The enmity between the two big tribes, which they encouraged by giving the Mehsuds a disproportionately high share of loot, helped keep them in check. Mehsuds, now as then, consider Wazirs slow-witted, mercantile and untrustworthy��If your right hand is a Wazir, cut it off,� advises a Mehsud. Wazirs mainly consider Mehsuds as vagabonds and cattle-rustlers, often quoting as evidence for this a prayer that Mehsud women are said to chant to their infants: �Be a thief and may God go with you!� Mehsuds also quote this, to illustrate their people�s cunning and derring-do.

[...]  Pakistan will struggle to pacify Waziristan so long as Afghanistan is ablaze. Yet it is at last giving itself a fair chance, on the heels of its advancing troops, by launching a serious-looking bid to rebuild its shattered administration. South Waziristan�s development budget has been increased 15-fold and, with improved security, the PA should actually be able to spend it. To sideline the weakened maliks, he will be given command of a new, 4,000-strong, tribal police force. The agency may also be divided, to ensure greater attention is given to the marginalised and seething Mehsuds. And political reform is coming, too, with a law passed last August granting political parties access to the tribal areas. For more meaningful democracy, some far-sighted officials advocate setting up agency-level councils, with powers over development projects.

This would be overdue. Many young Waziristanis are hungry for the political freedoms enjoyed, alas fitfully, by the rest of the country�as their enthusiasm for an abortive effort to introduce local government in 2005 showed. Even the Wazir maliks assembled in Wana, prime beneficiaries of the old order, admitted this. �Our youngsters want reform, adult franchise, no collective punishments,� admitted one of the old men, Bizmillah Khan. �But they also want our culture, our traditions and our freedom to remain intact.�

They will be disappointed. When Waziristan is merged with Pakistan proper, as eventually it must be, good things will be lost. The jirga system, so much more efficient than Pakistani courts, will be weakened or erased. Corruption, rife in Pakistan, will become endemic. And the furious spirit of independence that has impelled Wazirs and Mehsuds to resist outsiders for centuries will recede. For the most part, that would be a blessing. Yet in that calmer future, when Pakistan�s current agonies are largely forgotten, many may hark back fondly to a world enlivened by such remarkable people.

These snips are not even close to the fullness of the article. I don't have an appetite for military details, but for the student of how politics, history and military campaigns intersect, this is a must-read contemporary source of information.