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Archive for January 2011

Egypt: Another Pakistan in the Making?

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As Cairo explodes, it’s worth looking more closely at Pakistan for one potential trajectory that Egypt could take. Pakistan is deeply unstable, an impoverished nation torn asunder by clashes between militancy, the middle class, the army and a ruling elite.

The similarities between the two nations is quite striking.

Both Egypt and Pakistan…

…were born out of British colonial rule.

…are intensely religious states.

…have an educated elite with limited political power.

…have spent decades surpressing and appeasing their Islamic militants.

…share a border with a militarily powerful state with whom they have an uneasy peace.

…are seen as strategic lynchpins in the worldwide fight against Islamism.

…are dominated by their armies, which are the source of political power in the country.

…have limited natural resources and rely greatly on aid (Egypt’s tourism gives it the edge)

…have profound levels of poverty that no government can fix in anything like an acceptable period of time.

…have or will have weak civilian governments.

Does all this mean that Egypt will become as unstable as Pakistan?

Hopefully not, but it’s very, very possible. The one – very big – positive is the absence of nuclear weapons in the equation.

The most likely outcome in Egypt is profound instability as the major power players clash and maneuver. The Muslim Brotherhood, worryingly quiet so far, is almost certain to assert itself soon, and the Army, straddling its role as guardian of the status quo and icon of Egyptian popular nationalism, will have no choice at some point but to pick one over the other.

Finally, the West is playing a delicate game of ignoring the 800 pound gorilla in the room – which is Islamism. They want ‘democratic’ change in Egypt, but they don’t want ‘freedom’ to open the door to Islamic rule as it did in Algeria and Gaza. These two examples have no serious strategic implications for world stability. An Islamic state on Israel’s doorstep is quite another story.

The only difference between Egypt and Pakistan is this. Pakistan, the fortunes and future of which keep US strategic planners up at night, is frequently democratic. Egypt is quite profoundly not.

For Washington, no matter what they say, or even what they’d like to believe, the cold hard truth about democracy is this. In many under-developed nations, particularly Muslim countries, it’s rarely in the interests of the United States.

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Written by coolrebel

January 30, 2011 at 10:03 am

Egypt: The Role of The Internet and Why Beijing is Watching

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There’s nothing the social media and tech mavens like doing more than talking up social media and its influence.

In Iran, that influence turned out to be overplayed, and the ‘Green Revolution’ fizzled out. But in Tunisia and Egypt, it seems like it did indeed play a major organizational role, at least in catalyzing the original clashes. The Iranian police state proved itself much more adept at manipulating social media for its own ends. Plus it had the added advantage of dealing with a rebellion that was bourgeois in origin. The Egyptian riots seem to have a far wider social base, which may prove to be crucial. It’s interesting to note that in both Tunisia and Egypt, satellite cities away from the capital played a big role in fomenting the rebellion.

But regardless of the social pattern, it’s clear to Thereisnoplan that the internet is a crucial part of the equation in Egypt, which explains why it was cut off. Washington has been watching closely, but I’m guessing that Beijing has been taking note too.

China has overheated its economy pretty nicely. A real estate bubble, a more educated, and connected population with vastly increased expectations, inflation levels near the tipping point, and a depressed international consumer economy are adding real pressure for political change. And while China’s conciliatory approach to human rights and democratic change is probably just talk, unlike their distaste for the current Nobel Peace Prize recipient – they’re getting closer and closer to a time when concrete decisions will have to be made.

Capitalism is unsettling. It makes poor people want what richer people have, it makes richer people want more, and it makes both rich and poor think that they can attain their goals. Everyone is restless, nobody is happy, and when they’re not satisfied they want to be able to express that dissatisfaction, and to have their grievances heard and acted upon by their representatives – usually elected. The apparatus of the Chinese Communist Party isn’t built like that. Up until now, China was so poor that it could catch up with the rest of the world and maintain Communist power. But those times are coming to an end.

And the wild card, even the potential decisive factor, is the Internet. The Internet gives the masses the two things Beijing least want them to have – knowledge and the ability to communicate quickly, efficiently, and laterally.  It’s clear that China’s leaders are terrified by the Internet. They censor it, block it, cajole its leaders, but they can’t ultimately control a fluid, ever changing phenomenon. Ultimately, it will prevail, because people want it to. What’s happening in Egypt is probably sending chills down the collective Communist Party spine.

If the Chinese economy melts down in the next decade, which is a distinct possibility, another Tiananmen Square could be cranked up by Social media, the internet and cellphones really, really easily. The student flashmob could grow and grow and get noisier and noisier, very fast. And if they refuse to go home like they refused to do twenty-two years ago, new demonstrations could pop up in other major Chinese cities in hours. Suddenly, the Communist Party would be faced with a nationwide scenario where its authority is threatened, and the party would face an intolerable choice. Fire or back down. If they fire, they could fan the flames and ultimately be consumed by them in which case China enters a period of instability and potential chaos which would reverberate across the entire planet. If they don’t, they open the door to the vagaries of change which could also very conceivably swallow them up.

The Internet is a beast that Beijing can’t control, and ultimately they know it. Access to it is a privilege a new Chinese generation accepts as a right. Remove it or choke it off and you pay the price. Allow it to grow and you lose control. The choices that Chinese leaders are going to be forced to make are choices they will most decidedly not like like making.

Add in festering economic issues and there’s a heady cocktail brewing.

Written by coolrebel

January 29, 2011 at 1:15 am

Egypt: It’s All About the Army Now

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All this talk of “[insert term for revolution here] revolution” in Egypt is a tad premature, and seems to gloss over the apparently incongruous fact that the Army were welcomed into the streets by the protesters. Cheering when the troops get called out is hardly the stuff of the barricades.

The Egyptian moment is moving very, very fast, but it is starting to become increasingly clear that Mubarak’s future is in the hands of the Egyptian military, which is much revered in highly nationalistic Egypt (and in which every young man serves).

So with that in mind, let’s extrapolate what this could mean for Cairo.

Mubarak has a major problem. The moment he asks the Army to fire on the protesters is the moment he books his ticket out of Cairo. The Army’s own credibility and continued power rests on it NOT doing that. The protesters know this and with the brutal and hated police thoroughly routed, it looks like we’ve arrived at stage two of the game. The ball is in the Army’s court.

So what will the Military do? It’s unlikely they want to sacrifice Mubarak – who’s one of their own – and has plied them with plenty of goodies over the decades. But the longer the streets burn (and there’s plenty of unemployed youth to keep them that way) the closer it gets to the tipping point, of losing the public trust and undermining its own power and position.

That point may come soon. And if it does, the Military will have to make some serious decisions. Do they try to convince El-Baradei to lead a transition government, or co-opt an old Field Marshal to restore control? And how long will that transition last and to what? Will the choices the Military makes choke off the billions they get from the US Government?

And what about the Muslim Brotherhood? The powerful decades-old Islamist movement (which helped to spawn and has close ties with close ties to Al Qaeda) in this intensely religious country has wisely stayed behind the scenes. But is it poised to strike and take advantage of the weakness and turmoil facing its enemies? And if does, how will the military respond?

The idea that Egypt’s repressive police state is going to give way to a liberal democracy by next Tuesday is wishful thinking in the extreme. What’s more likely is that we’ll see major fissures developing, and a situation that’s more akin to the current state of Pakistan where Islamists battle a powerful army and toothless civilian army for control of a struggling economy.

Another worrying similarity with Pakistan could also emerge, where the Army – through it’s semi-rogue Intelligence agency surreptitiously supports the Taliban in order to keep it at bay. Could the Egyptians do the same thing in Gaza – opening the border – and plying Hamas with weapons in order to keep the Muslim Brotherhood from striking at the nation’s heart?

Finally, there’s the issue of peace with Israel. Mubarak earns billions by keeping it intact, but will the Military be able to maintain it in the face of an emboldened Islamist threat from within? Can they afford to recall their ambassador to Tel Aviv, and re-establish cold-war ‘hostilities’ with Israel?

To call the situation fascinating is an understatement. But one thing’s for sure, Egypt’s future remains in the hands of the guys with the guns. The question is what they do with them.

Written by coolrebel

January 29, 2011 at 12:37 am

The Tea Party and History: The Mythmakers Go to Work.

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One of my favorite stories about American history is about the original Tea Party, in 1773. It goes like this. The British wanted to find a way to boost the sagging fortunes of the East India Company. The brain trust in the Colonial Office in London came up with a genius idea. Dump cheap Indian tea on the American colonies at a great price, to boost the EIC’s bottom line. The way they decided to do it was to reduce the duty the colonies paid on the tea. That pushed the price down just below the price that American smugglers charged for the Dutch East Indies tea they distributed in America.

Pretty sneaky. But it gets more amusing. The smugglers were enraged. After all this was just another classic example of Britain’s wanton use of its prerogative over the Colonies, who wanted “no taxation without representation” (even if the taxes were, umm, lowered).  The British said they wouldn’t back down and insisted that the tea be shipped. The smugglers took matters into their own hands in Boston Harbor.

Of course, the modern Tea Party are less concerned with Royal prerogative than they are with lower taxes, which are sacrosant. So if they were discussing this in the coffeehouses of Philadelphia and Boston would they have supported the smugglers and their higher prices, or the East India Company and it’s shall we say ‘competitive’ pricing?

Demagogues love history, or at least a simplified, sanitized highly convenient version of it.

The truth about history is never so simple. It’s complicated and full of contradictions, because it’s human just like us.

The Tea Party throws around the Constitution like it’s going out of style (which it should be but won’t). But they don’t even understand that at its core its based on a profound compromise that defined this country until the final blood-letting of the Civil War. They support the document as if it’s set in stone, but conveniently ignore the fact that it was built to be updated, and has been 27 times.

The Tea Party is making a very solid bet that the people won’t actually take the time to scrutinize the history and constitutional law they supposedly hold so dear. And they’re right. People don’t want history, they want myths or partial historical truths that fit into their world-views.

It’s incredibly difficult to combat the impressionistic power of the “Mythmakers”, and it won’t be the first time that American history has been whitewashed and molded for propaganda purposes, but that doesn’t make it any less tragic and debilitating for our public discourse.

Written by coolrebel

January 29, 2011 at 12:02 am

Egypt – So Where’s the Muslim Brotherhood?

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See you around, Hos.

Before we get carried away with the birth of democracy in Egypt, let’s ask ourselves why the United States has been plying the Mubarak regime with a couple of billion dollars worth of play money for the last God knows how long. Was it because he was such a great guy doing right by his peeps? Uhh, no. Could it have been because we needed him to keep the lid on the Muslim Brotherhood, that’s been threatening to give the West indigestion for the last eighty years? Way more likely.

So where exactly have the Muslim Brotherhood been during the riots in Cairo and other cities around the Nile Delta? Not in huge evidence that’s for sure. And that’s what worries Thereisnoplan. You see, it would seem like a smart move for the Brotherhood to stay on the sidelines. After all, if they were seen as stirring the pot, the US and others might be a little less likely to be pushing the Democratic agenda for Egypt, just in case Cairo went the way of Gaza after its Democratic experiment and ended up in the hands of the Islamists. It may be a genuine secular revolt, but – and this is just a wild guess – Thereisnoplan is betting that much of President Obama’s trip to the White House basement (otherwise known as the Situation Room) was spent chatting about just that eventuality.

Egypt is a very religious nation. Even the riots calling for the ouster of Mubarak had to wait until Friday prayers were done before the stones and molotovs could be tossed about. The Muslim Brotherhood has almost certainly learned the Hezbollah and Hamas playbook well. Promise and deliver ‘social services’ to the people and they’ll support you. (The mafia is run on broadly the same basis). In short, they’re well positioning to assume the mantle of power with a convenient one shot democratic moment and promise to help Egypt out of the trough that Mubarak’s cronyism got them dug into over the decades.

Now, it’s unlikely that Mubarak will lose the loyalty of the army and police forces (which would have nothing to gain under the Muslim Brotherhood) and therefore will stay in power, albeit in a weakened position. Maybe he’ll co-opt El-Baradei as the peacemaker he needs to bridge his credibility gap with the rioters, but it’s also possible the army will turn on him and wave him goodbye. Things are moving fast in the Middle East, and many predicted the turmoil in Tunisia would be an isolated moment. It wasn’t. So anything can happen.

And if one of those anythings – say a Muslim Brotherhood takeover – took place (under the guise of democracy, of course) we’d all be in for a helluva ride in the Middle East. Here are a few possibilities.

Egypt could overturn its peace treaty with Israel. That would mean more than the end of Israeli tourism in the Sinai. And while it’s highly unlikely that the militarily decrepit Egyptian forces would ever mount a full scale attack on Israel, it could prompt the reeopening of the Rafah crossing into Gaza and the arming of Hamas with more potent and longer range missiles than the jerried Qassams they’re lobbing these days.

If Mubarak folds his tent, it’ll be interesting to see how he could follow Ben Ali of Tunisia to a gated community in Riyadh or Jeddah. The House of Saud might just regard his arrival there with the same relish as a dose of the collective clap. Instead, they’d be more likely to be opening up the gun lockers for their own security forces in readiness for the distinct possibility that they might be in for the same treatment. And lurking just under the surface in Saudi Arabia is Al Qaeda, who must be watching events in Cairo unfold with glee.

Intifada part three. Could the Palestinians in the West Bank be next? Could they be thinking that hey, if it worked for the those Tunisian and Egyptian dudes maybe it’ll work for us? That would certainly deal a body blow to what’s left of Obama’s latest go at the “Mid East Peace Process”, a game that almost always leads to profound frustration and gloom for Washington. Could a hostile Egypt on Israel’s border embolden Iran? Could Tehran engineer a wholesale pan-Muslim alliance to try and defeat Israel?

Nobody knows, but it’s fun to conjecture, unless you’re in the Situation Room of course.

Written by coolrebel

January 28, 2011 at 11:06 am

Does the US Debt Burden "Threaten our Way of Life"? Uhh, No.

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Take a brief look at this chart.

It’s a list of countries by national debt burden as a proportion of GDP.

Just under fully fledged basket case Zimbabwe at the very top is Japan at 196% of GDP. Now I know they’ve got their problems, but is their way of life threatened? No. Are they walking around in animal pelts, wielding home-made clubs? No.

At 83% of GDP is our northern neighbor, Canada, a nation that’s so stable people fall asleep at the very mention of its name. Is there a threat to the sleepy Canadian way of life on the horizon? Not unless Sarah Palin’s family invades the Yukon.

At 74% is Germany, manufacturing dynamo of Europe, and a nation that’s short of people to work in its BMW factories. I’m guessing that unless there’s a major recall of EVERY German car ever made, no threat to their way of life either.

Further down is Brazil, one of those developing countries that’s supposedly eating our lunch. They’re currently operating very nicely at 60% of GDP, and an outgoing President Lula had a positive approval rating of 223%.

And then comes  limping, holed below the water line, not much good for anything except a-whinin’, America at 58.9%, just above the world average of 58.3% of GDP.  And according to the GOP talking points our debt burden “threatens our whole way of life”.

Maybe it does. Maybe them GOP Congressmen know something we don’t, but I’m guessing if more people got a look at this simple Wikipedia chart, they might, sniff-sniff, smell a rat.

Written by coolrebel

January 26, 2011 at 10:44 am

Posted in Business BS, Washington

The State of the Union: People Don’t Care About The Details

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Captain Sensible gave a cracking performance out there tonight.

Every crafted word was about as rational and considered as it can be, threading the needle, professionally, professorially, as usual. The GOP and Tea Party responses, by contrast, came from the other side of the sanity spectrum, somewhere between total delusion, and crushing ignorance.

And yet, it’s the GOP in all its lies, puffery and vanity that scored big in the Mid-term elections last November. The Klingon forces of darkness zapped President Spock and his army of sane and sensible Democrats but good. Usually the good guy wins, but the rules were thoroughly shattered last time out.

All the wonks, from top to bottom tell us that the Obama Administration had got it right. The stimulus package put a million-plus to work, health care reform will cut the deficit, and the economy is growing at a good clip. So what gives? Why are people were so ungrateful?

The answer is simple.

The details mean nothing to 90% of the American people. Only those wonks and New Yorker readers and regular tweeters take this State of the Union stuff seriously. Most other people – I’d say 90% – make their superficial judgments about government and policy based on their own experiences, and a few shreds of news and information. They grab onto ‘bites’, they form strong opinions based on little understanding of government, taxation, economics, and policy making, In other words, most people ‘feel’ their political positions, they don’t ‘think’ them.

That 90% is hurting bad. Their jobs are on the line or gone, their houses are under-water, or under threat, their kids are at failing schools, and their middle class lives are being squeezed by outsourcing and crushing debts. Their response? Lash out. I mean the 90% is only human.

Barack Obama was elected in the eye of the harshest economic storm to hit America since the Great Depression. It truly was a historical moment. But instead of going on the offensive with the wind and Congress at his back, he called for calm. He took a studied bi-partisan approach to government and tried to steady the nerves of the 90%. He made deals, on the Stimulus package, on Health Care, on Financial Reform. He made sense at a time when people wanted someone or something to blame.

That opened the door to the bad guys. The GOP, and the FreedomWorks and Koch boys saw their chance to outflank Obama by appealing to the public anger in a way President didn’t have the foresight or stomach to do.

It didn’t matter that the GOP and Tea Party positions were (and are) total nonsense. They sound tough, they’re easy to understand, and they fulfill the need that the 90% have for enemies. And so the enemy instead became the deficit (for some bizarre, totally fatuous reason), and everyone believed that was now the problem. No matter that tax revenues have fallen through the floor. No matter that we’re paying for two wars, no matter that without a stimulus we’d have gone into a wholesale depression. The deficit was and is the new enemy. but it’s a bad guy that serves the anti-government right rather well.

If the public had cared even a jot about the facts, they would have rejected the GOP and Tea Party positions on public spending as the utter piffle they are. But they don’t. The GOP rhetoric ‘felt’ right. It fulfilled a deep, psychological need. The details weren’t important, even the really really big ones.

It didn’t have to be that way. Instead of letting the right lie their way into the hearts of the 90%, Obama could have provided them with real rather than imagined enemies; like Wall Street and the Financial Sector that got us into this mess, got bailed out and is still earning handsomely from our misery, like Un-American American companies that export jobs overseas, and reap the benefits in profits at the expense of the American worker, like China, which steals our technology, takes those jobs, and fixes its currency too. All good enemies that the 90% could ‘feel’ were not on their side. and all enemies that serve a Democratic rather than a Republican agenda.

It was a big fat hanging curve just waiting to be driven out of the park. But Captain Sensible whiffed.

The results are plain as the powder on John Boehner’s nose. A large and fired-up Republican majority in the House, hungry to tackle that deficit with the inchoate support of the 90% who are angry enough to support the idea.

Which left Captain Sensible with a big problem tonight. How to ‘do something’ when you have to cut discretionary spending to satisfy the 90%. So tge Prez talked about innovation and education and R+D and out-competing China all that other stuff at the same time as saying he was going to freeze spending for five years. Uhh? No matter that China Inc, our number one “competitor”, is actually a command economy that can and does pump trillions into its economy on the say so of the Communist Party Central Committee. No need to worry about mixed party seating in the Chinese Parliament, because there’s only one party, so naturally a consensus of opinion is not too hard to reach.

In short, after oh so reasonably backing half-baked so-called landmark legislation that lacked the punch to connect with the 90%, and keeping cool when he should have been pointing the finger at our real enemies, Obama has reasoned himself into a corner, having to innovate and cut all at the same time.

It could have been so different, but instead it was just another State of the Union speech, full of promises, full of inconsistencies, full of the usual bi-partisan BS. In other words another speech that will quickly be forgotten by the 90%.

Meanwhile, the angry GOP just keep on pounding.

Written by coolrebel

January 25, 2011 at 3:39 pm