The Great Debate » Bernd Debusmann Tue, 25 Oct 2016 20:07:05 +0000 en-US hourly 1 George W. Obama and immigration fantasies Fri, 04 Jun 2010 13:38:53 +0000 In the waning days of his presidency, George W. Bush listed the failure of immigration reform as one of his biggest disappointments and deplored the tone of the immigration debate. It had, he said in December 2008, undermined “the true greatness of America which is that we welcome people who want to work”.

The way things look a year and a half into the administration of Barack Obama, he too may end his presidency deploring the failure to fix America’s dysfunctional immigration system. The tone of the debate is even more rancorous now than it was when Bush pushed reform and it features the same arguments, including the fantasy that you can fully control the frontier between the U.S. and Mexico, the world’s busiest border.

That illusory target was set in the Secure Fence Act of 2006, signed into law by George W. Bush on October 26 of that year. It provided a definition of the term “operational control”, one of the most frequently used buzz phrases of the debate. (The other is “securing the border”). Under the letter of the law, operational control means “the prevention of all unlawful U.S. entries, including entries by terrorists, other unlawful aliens, instruments of terrorism, narcotics, and other contraband.”

Note the word “all”. Then contrast it with what is at stake: almost 7,500 miles of land borders (with Mexico and Canada), 12,300 miles of coastline and a vast network of airports, seaports and land crossings. In the long-running debate, sound bites alone could fill a library and one of the best came from Janet Napolitano when she was governor of Arizona: “Show me a 50-foot wall and I show you a 51-foot ladder.”

That quote has history on its side. There has never been an impenetrable border. Not the Great Wall of China, the 5,500-mile mother of all walls, not the Berlin Wall, not the Iron Curtain, the lethal system of walls, fences, minefields and watch towers manned by guards with shoot-to-kill orders that sliced 2,500 miles through Europe.

Napolitano, now head of the Department of Homeland Security, the 160,000-strong bureaucratic behemoth charged with ensuring “operational control”, no longer uses the wall-and-ladder simile. Instead, she talks of the need for “comprehensive immigration reform”, as does her boss, Barack Obama, and as did George W. Bush.

Bush’s attempt to push through a reform addressing all aspects of the complex, emotion-laden issue fell through because he could not convince legislators in his own Republican party that there should be a path to citizenship for the estimated 11 million illegal immigrants already in the United States. Obama does not have enough votes in the Senate for a reform bill.

And leading Republicans insist that there must be a sequence in any changes to what everybody agrees is a broken system. “First…we have to secure the border. If you want to enact other reforms, how can that be effective when you have a porous border,” says John McCain, the Arizona senator who once championed an all-encompassing package.

He and others have not explained what exactly they mean by “secure border”. If that stands for keeping “all” illegal crossers out, it’s difficult to see how there could ever be reform. Largely symbolic gestures, such as Obama’s decision in May to send 1,200 National Guard troops to the border with Mexico, will make little difference on the ground.

By ordering the troops’ deployment, Obama trod in the footsteps of Bush, who dispatched 6,000 National Guard troops to the border in 2006 to back up the Border Patrol and help build several hundred miles of walls and fences. In both cases, the measures were meant to win bi-partisan support for overall reform.

That would need to include figuring out a way to keep track of people who enter the U.S. on valid visas and stay behind when they expire. With attention focused on the border, visa overstayers rarely figure in the debate but they are estimated to make up around 40 percent of the population of illegal immigrants.

How to handle them has been the thorniest problem of all, with conservatives decrying as “amnesty” proposals to work out a way to legal status. Public attitudes are somewhat schizophrenic, judging from opinion polls.

A poll late in May by the Opinion Research Corporation, for example, showed 80 percent in favor of a program that would allow illegal immigrants who have already lived in the U.S. for several years to apply for legal status if they had a job and paid any taxes owed. But in response to a differently-phrased question, 60 percent supported deporting illegal immigrants already in the country.

Last year, according to government figures, the U.S. deported 387,790 illegal immigrants — an average of more than 1,000 a day and a tiny fraction of the undocumented population. Wholesale deportation of all of it belongs as much in the world of fantasy as the idea that “all unlawful entries” could be stopped.

To show how unrealistic the notion of mass deportation is, the Center for American Progress, a liberal Washington think tank, crunched some numbers in a recent report on immigration. Assuming that they could all be tracked down, how many buses would it take to ferry out all illegal immigrants?

Around 200,000. Placed bumper-to-bumper, the buses would stretch 1,800 miles.

]]> 351
Performance reviews – a global scourge Tue, 01 Jun 2010 13:51:16 +0000 It is time to kill the annual performance review, for decades a feature of corporate life around the globe, dreaded both by those who do the reviewing and those who are reviewed.

It is a corporate sham and one of the most insidious, most damaging and yet most prevalent of corporate activities. It is a pretentious, bogus practice that produces nothing that could be called a corporate plus. It is universally despised yet few people do anything to kill it.

So says Samuel A. Culbert, a consultant and professor of management at the University of California, Los Angeles (UCLA) in a just-published book entitled, Get Rid of the Performance Review! The book grew from a 2008 article in the Wall Street Journal which, Culbert says, prompted a thousand letters to the editor and a flood of online comments, mostly in favour of his argument.

It is not new, but presented in particularly blunt language. A decade ago, a book by Tom Coens and Mary Jenkins entitled Abolishing Performance Appraisals made similar arguments, based on a study of 26 companies where morale, effectiveness and profitability had improved after they abolished appraisals.

Doubts about the process emerged as far back as 1957, with an article in the Harvard Business Review by Douglas McGregor, a management professor at the Massachusetts Institute of Technology, who suggested replacing the conventional boss-subordinate meeting with an approach allowing the employee to set personal short-term goals and evaluating himself.

An Uneasy Look at Performance Appraisal, the headline said. There has been a lot more unease since then, so why does the practice persist? And why would a date on a calendar be relevant to determining when someone’s performance needs reviewing?

Culbert zeroes in on two culprits. The first is a management theory – Management by Objectives – which came into vogue after the end of the World War II and provided for managers to set goals for their departments and then figure out what individual employees need to do to achieve department goals.

The performance review that went with the theory judged an individual’s performance rather than that of the department or organization. In that kind of system, where is the incentive for the individual employee to improve the corporation as a whole?

And the second culprit? Human Resources departments: they insist on performance reviews “to ensure themselves a secret-police-like power base they can use to secure themselves with managers.” Lest there be any doubt about his dim view of HR, they strive for “keeper-of-dirty-little-secret/KGB-like status.”


As Culbert sees it, performance reviews, as conducted by most companies, are based on a myth – that supervisors can come up with a scorecard free of bias, sentiment and the personality of the manager. In other words, that they can be objective.

If that were the case, wouldn’t employees get the same rankings when they change bosses? Culbert cites a study (by the consulting firm PDI Ninth House) that looked at 6,000 employees reporting to two bosses. The rankings ran from “outstanding” to “very weak.” Of the employees deemed outstanding by the first boss, 62 percent received a lower ranking by the second.

And how can reviews be objective when managers are forced to sort employees into the infamous bell-shaped curve – 20 percent classed as outstanding, 70 percent as average and 10 percent as poor performers. That is a recipe, Culbert says, for guaranteeing duplicity and making sure employees won’t cooperate with each other.

“Employee No. 1 asks Employee No. 2 for some numbers. No way will he get them, because Employee No. 2 has no incentive to make Employee No. 1 look too good. Because if No. 1 looks good, No. 2 looks worse, relatively. You have a system where nobody wins.”

Contrary to corporate spin, the chances of a frank and open-minded discussion in the traditional once-a-year performance review session are remote because people are reluctant to speak their mind to their bosses and focus instead on saying what will earn points and make a good impression.

Pretense is more important than fact which is, says Culbert, why “bull—-, not straight talk, becomes the etiquette of choice in any corporate relationship where the only opinion that is listened to is the boss’s.”

That observation and choice of words is inspired by Harry Frankfurt, the Princeton University professor who published a slim philosophical treatise entitled On Bull—- in 2005. It took issue with “bull—-ters…who are attempting by what they say to manipulate the opinions of those to whom they speak.”

That obviously applies to more than corporate life and performance review sessions and the book’s phenomenal success (translation into 25 languages, a place on the New York Times bestseller list for months) points to widespread distaste for fakery and phoniness.

Does Culbert have a cure for the ills he diagnoses? Yes. He calls it “performance preview”, a system where managers mentor and coach employees to succeed. They have conversations when either feel they are necessary — not in a formal session once a year.

]]> 7
In Mexico, a drug war of choice? Fri, 21 May 2010 15:17:53 +0000 Here is a short history of Mexico’s drug war, as told to a joint session of the U.S. Congress by President Felipe Calderon on May 20.

In 2004, a U.S. ban on the sale of assault weapons to civilians was lifted. High-powered firearms started flowing south across the 2,000-mile border. Violence increased. “One day criminals in Mexico, having gained access to these weapons, decided to challenge the authorities in my country,” he said.

Calderon did not say what happened on that “one day,” by implication the day the president had no choice but to fight back.

There is another version of history, which goes as follows: Calderon won elections in 2006 with a margin so thin (0.58 percent) that it prompted cries of fraud, persuaded his left-wing opponent Andres Manuel Lopez Obrador to declare himself the real winner, and gave Mexico the unusual and embarrassing spectacle, for weeks on end, of two men claiming they were the legitimate president.

So, ten days after eventually being sworn in, Calderon announced that he had ordered the army into his home state of Michoacan to make war on Mexico’s drug cartels.

One of Calderon’s most vocal critics, former foreign minister Jorge Castaneda, loses no opportunity to say this was a war of choice, not prompted by any specific outrage but by a perceived need to legitimize a contested presidency.
Calderon badly misjudged the strength of the criminal mafias, the alternative version goes, and now is stuck with a war he cannot win, not even with U.S. support. The death toll in the wars the cartels are fighting against the state and against each other stands at around 23,000 and is rising by the day.

To staunch the bloodshed, Congress should consider reinstating the assault weapons ban, Calderon told Congress.
“If…you do not regulate the sale of these weapons in the right way, nothing guarantees that criminals here in the United States, with access to the same weapons, will not in turn decide to point them at U.S. authorities and citizens.”

Calderon’s remarks all but guarantee that the National Rifle Association (NRA), one of the most powerful lobbies in the United States, will redouble its efforts to prevent the ban from being reinstated. While the Obama administration is in favour of doing so, the chances of that happening in an American mid-term election year are remote.

The NRA launched a pre-emptive counter-attack weeks before Calderon’s arrival on a two-day state visit, with an essay on its website saying that Mexico’s crisis was being used as a pretext for restrictions on gun ownership. Whatever one might think of America’s lax gun laws, it’s probably safe to assume that Mexican drug criminals by now have enough weapons to keep murdering each other and the forces of law and order for a long time before needing resupplies from the north.


Unless, of course, the Mexican army of criminals is growing very fast, which would be evidence that Calderon’s frontal assault is failing and help explain why a majority of Mexicans, according to opinion polls, think the traffickers are winning.

Nobody knows just how many people are involved in the drug trade — as foot soldiers, runners, lookouts, accountants, money launderers, communications experts and a wide variety of other functions. Cartel recruiters have a deep pool to draw from — Mexican unemployment stands at around 2.5 million and at least 15 million people work in the “informal sector” made up of street vendors and other casual workers.

Add family members of cartel criminals and officials lured by the generous bribes the cartels can offer and the number thrown out by Ismael Zambada, a fugitive leader of the Sinaloa drug cartel, begins to look more than a mere figure of speech.

Zambada, for whose capture the U.S. has offered a $5 million reward, said in a rare interview with the Mexican news magazine Proceso in April that there was no way the cartels could be defeated.

“Millions of people are involved in the narco problem,” he said. “How can they be overcome…this is a lost war.” The interviewer asked, “Why lost?” Zambada: “The narco has roots in society (just) like corruption.”

Another estimate on the strength of the trafficking organizations has come from the Washington Times, a conservative newspaper with good contacts in the military that last year quoted an unnamed senior defense official as saying the Pentagon believed the number of cartel foot soldiers matched that of the Mexican army – about 130,000.

In Washington, policymakers have begun to wonder aloud how vigorously the war against the cartels will be fought once the conservative Calderon, who has been a close U.S. ally, leaves office (Mexican law provides for a single six-year term).

Judging from present polls, the left-wing Institutional Revolutionary Party (PRI) has a good chance of winning back the presidency in 2012.

And then what? Possibly an end to the extradition to the U.S. of wanted drug lords, considered an affront to national sovereignty under the rule of PRI presidents. Even worse, from a U.S. point of view, would be a return to greater tolerance of moving drugs into the United States as long as the cartels keep the peace at home.

]]> 51
Obama, Karzai and an Afghan mirage Fri, 14 May 2010 14:09:03 +0000 Last year, under the leadership of President Hamid Karzai, Afghanistan slipped three places on a widely respected international index of corruption and became the world’s second-most corrupt country. It now ranks 179th out of 180, a place long held by Somalia.

According to a United Nations report published in January, Afghans paid $2.5 billion in bribes in 2009, roughly a quarter of the country’s Gross Domestic Product (not counting revenue from the opium trade). The survey, based on interviews with 7,600 people, said corruption was the biggest concern of Afghans.

On the military front in a war more than halfway through its ninth year, attacks on U.S. forces and their NATO allies totaled 21,000 in 2009, a 75 percent increase over 2008, according to a report by the Government Accountability Office (GAO) a week before Karzai’s visit to Washington. The GAO, the investigative arm of Congress, noted that Taliban insurgents had set up a “widespread paramilitary shadow government…in a majority of Afghanistan’s 34 provinces.”

The Pentagon, also in advance of Karzai’s visit (in the second week of May), reported that Afghans support his government in only 29 of the 121 districts the U.S. military consider most strategically important.

“The insurgents perceive 2009 as their most successful year,” the Pentagon said. “The Afghan insurgency has. ..a ready supply of recruits drawn from the frustrated population, where insurgents exploit poverty, tribal friction and lack of governance to grow their ranks.” As to corruption: “Real…change remains elusive and political will, in particular, remains doubtful.”

In case all this has led you to the conclusion that the Afghan glass is half empty at best, that’s not the way President Barack Obama and his Secretary of State Hillary Clinton portrayed it during Karzai’s visit. Yes, there were difficulties ahead, they said, but overall things were looking up. “We are steadily making progress,” Obama said. “Progress in Afghanistan is real,” echoed Clinton.

Was this a matter of two leaders seeing a mirage, or a 21st century version of the “we see light at the end of the tunnel” assurance Americans heard during the Vietnam war? Or was it simply overdue recognition that Obama is stuck with Karzai no matter how unpopular he might be or how much credibility he lacks?

Karzai’s visit was almost cancelled after he responded to public rebukes from American leaders with anti-American and anti-Western tirades so over the top that one of his most prominent detractors, the former United Nations deputy chief in Afghanistan Peter Galbraith, raised questions over the Afghan president’s stability. “He’s prone to tirades, he can be very emotional, act impulsively,” Galbraith told the U.S. TV network MSNBC.

That prompted a flurry of international headlines on the Afghan leader’s mental state that did little to win support for the war. Polls show that slightly more than half the American public think the war is not worth fighting for. In Britain, Canada, Australia, France and Germany, the biggest contributors to the 43-member coalition, poll after poll has shown majority opposition to the war.

One of the problems in convincing reluctant partners to spend blood and treasure in Afghanistan is the lack of a clear answer to the question “what is success?”

Even a Washington think tank friendly to Obama, the Center for American Progress, singled out the absence of “clarity of purpose” in a report on the future of Afghanistan. “The Obama administration remains vague about what progress looks like in Afghanistan and what our objectives are over the next two to five years,” the Center said.

There has been no vagueness about the cost of the enterprise. It has been rising steadily as forces in Afghanistan were built up and troops in Iraq drawn down. In February, Pentagon monthly spending on Afghanistan exceeded spending on Iraq for the first time, $6.7 billion ($233 million a day) compared with $5.5 billion. Congress is almost certain to approve an additional $33 billion in the current fiscal year to fund the troop increase Obama announced last December.

It was his second escalation of what he calls a war of necessity. He ordered the first, of 21,000 troops, a few weeks after taking office. His rationale then: they were needed to secure the Afghan presidential election which, in the end, were so massively rigged that a U.N.-backed complaints committee threw out about a million Karzai votes.

That’s past history and no longer a subject, now that the Obama team has decided they need to live with Karzai, warts and all. What will be a subject is a promise, made halfway through his visit, that he would work for better government. It’s not the first such pledge.

Will word match deed better than in the past? That will be watched closely both in Washington and in Afghanistan. There, in the words of General Stanley McChrystal, the top U.S. military commander, people “believe more of what they see than what they hear. Only when they experience security…and only when they benefit from better governance, will they begin to believe in the possibilities of the future.”

The chances of that happening by July next year, the date Obama has set for the beginning of the U.S. withdrawal from Afghanistan, are close to zero.

]]> 11
Dirty money and the war in Afghanistan Fri, 19 Mar 2010 18:08:16 +0000 In a long report on the war in Afghanistan for the U.S. Senate’s Committee on Foreign Relations last summer, one sentence stood out: “If we don’t get a handle on the money, we will lose this war to corruption.”

The money in this context meant the funds, from multiple illicit sources, that finance the Taliban who are fighting the United States and its allies in a war that is now in its ninth year. Dirty money is greasing corruption on a scale so monumental that Afghanistan ranks 179 (out of 180) on the latest index compiled by Transparency International, a watchdog group based in Berlin.

Part of the reason for the country’s dismal standing: for much of the war the U.S. military ignored the booming drug trade (Afghanistan accounts for around 90 percent of the world’s opium, the raw material for heroin) and the drug money flowing to the insurgents, estimated at up to $400 million a year. Add kickbacks contractors pay directly to the Taliban to avoid having their projects blown up or their workers kidnapped, add money diverted from development funds and soon you talk about serious money.

“There is a realization now that the best way to stop the conflict is to cut the flow of money,” Gary Haff, the chief financial investigator with the U.S. Drug Enforcement Administration (DEA) told a conference of anti-money laundering experts in Hollywood, Florida, this week. “We need to identify and disrupt the financial infrastructure that supports the Taliban and al-Qaeda.”

That falls under the heading of better late than never and is easier said than done. An important new weapon in the assault on the financial infrastructure was only deployed last summer, initially with a skeleton staff. It is now growing rapidly and by the end of the year, according to Haff, the DEA alone will have 85 agents in the new unit, the Afghan Threat Finance Cell (ATFC), working alongside financial specialists from the Departments of Defense, Treasury and Justice.

That is a big step forward from the days, earlier in the war, when planes were loaded with bales of opium at the Kabul airport in full view of U.S. troops manning the perimeter. It is also a long way from the days when military commanders argued that neither going after the drug lords nor trying to deny financing to the enemy was part of their brief.


It is now one of the pillars of the counter-insurgency strategy but how successful it can be is an open question. “Is it possible to slow the flow of drug money to the insurgency, particularly in a country where most transactions are conducted in cash and hidden behind an ancient and secretive money transfer system?” the Senate Committee report wondered.

The money transfer system in question, known as hawala, goes back to the 8th century and is as ideally suited for moving illicit money as Afghanistan’s craggy mountains are suited for guerrilla warfare. Entirely based on trust, it is a remittance system that has been defined as “money transfer without money movement” by Interpol, the international police agency.

How does it work? A customer in one country (or city) gives money to a hawala dealer who charges a small commission and instructs a hawaladeer in another country (or city) to give an equal amount of money to a  recipient on the strength of a identification number or password. The transaction leaves no paper trail and is invariably faster than a wire transfer through a bank.

In Afghanistan, a country of 28 million people, there are only 17 banks and no culture of banking. Around 90 percent of financial transactions run through the hawala system, experts estimate. Hawala dealers in Kandahar, the country’s second biggest city, and the opium-producing province of Helmand, are thought to handle $1 billion in drug money per year.

The Americans’ problems of throttling financing for the insurgents don’t end with a difficult-to-penetrate parallel money transfer system. “So far, not enough attention has been given to trade-based money laundering and to the misuse of the Afghan transit trade agreement,” according to Dennis Lormel, one of the speakers at the anti-money laundering meeting.

Lormel, who now runs a consultancy, DML Associates, was chief of the FBI’s Financial Crimes Program until he retired. In his view, the over- or under-invoicing of goods – trade fraud – yield millions of dollars that can filter back to the insurgents.

Success on the financial front, and for the ATFC, obviously depends on the political will of key players in the Afghan government, led by President Hamid Karzai. In November, he was declared the winner of disputed elections and promptly faced exhortations from U.S. President Barack Obama and Secretary of State Hillary Clinton to open a new chapter of good governance and fighting corruption.

Let’s see how Afghanistan will rank on Transparency International’s 2010 index.

]]> 8
Goodbye America, Hello China? Think again Fri, 12 Mar 2010 14:52:59 +0000 For the growing number of Americans who see China heading for inevitable global dominance, nudging aside the United States, a brief walk down memory lane helps put long-term predictions into perspective.

Not so long ago, Japan was seen as the next (economic) number 1. American executives studied the 14 management principles of The Toyota Way, developed by the automobile manufacturer that grew into the world’s biggest car maker and is now recalling millions of defective vehicles.

Between the mid-1980s and early 1990s, books with titles such as Trading Places – How We Are Giving Our Future to Japan and How to Reclaim It (by Clyde Prestowitz) were required reading in Washington. Learned panelists expounded on the wondrous efficiency of “Japan Inc.”

A glut of “Amazing Japan” books, Chicago Tribune writer Ronald Yates noted in 1987, hammered home the same theme: Japanese technology is superior, Japanese management is better, Japanese products are unrivaled, Japanese people work harder, Japanese are smarter, Japan is No. 1.

Skip over the two decades of economic stagnation of Japan Inc. that soon followed the hype and fast forward to the present. The book which best reflects today’s American worries is entitled When China Rules the World: the End of the Western World and the Birth of the New Global Order, by British author Martin Jacques. His forecast is part of a growing library of essays, analyses and books on the 21st century belonging to China.

If history is any guide, there’s a better than even chance that the “goodbye America, hello China” school of thought will prove as embarrassingly wrong as the 1980s assessment of the relative strengths of Japan and the United States.

Long-term predictions tend to be more often wrong than right and the decline of the U.S. is a topic of seasonal regularity.

In February, a poll by the Washington Post and ABC, asked whether the 21st century would be more American or more Chinese. In terms of overall influence on world affairs, 43 percent opted for Chinese and 38 percent for American. In a Pew poll a few months earlier, 44 percent saw China as the world’s leading economic power and just 27 percent named the United States.

That was a remarkable reversal of opinion from early 2008, when 41 percent told Pew pollsters they thought the U.S. was the world’s top economic power and 30 percent named China. That shift probably says more about the sour mood of Americans very slowly emerging from a painful recession than about facts.
China the world’s leading economic power? Its economy is less than a third of that of the U.S. Its GDP per head is one fourteenth of the U.S., roughly half that of Kazakhstan, according to the World Bank. About a quarter of the world’s economic output is produced by the United States, whose population is less than a fourth of China’s 1.3 billion.

So there’s a very long way to catch up for a country beset by a variety of Third World problems, from lack of paved roads in many rural areas to water pollution so severe that 700 million people have to drink contaminated water every day, according to the World Bank.

China enthusiasts made much of statistics early in the year that the country had overtaken Germany as the world’s largest exporter in 2009. Along with many of the figures cited to show China’s relentless long march to superpowerdom, it gives an incomplete picture.

A large proportion of those exports, three quarters by some accounts, are products assembled for international companies from imported components, not the fruit of brilliant Chinese innovation. Similar to the maquiladora assembly plants on the Mexican side of the U.S.-Mexico border, such factories provide jobs but don’t do much for the economic well-being of the average citizen.

And the fast economic growth of the past (eight percent plus, year after year) that has so impressed many American analysts is bound to run into a giant obstacle for which there is no solution in sight. Nicholas Eberstadt, a Harvard demographer, has long warned that China is facing a surge of citizens aged over 60 for which the Communist-run system is not prepared. By 2050, according to estimates by the Washington-based Center for Strategic and International Studies (CSIS), China will have more than 438 million people over 60 and 100 million over 80.

It is an unusual phenomenon, a country growing old before it grows rich, and it has consequences that go beyond retirement policy. China’s rapid ageing, a consequence of the government’s one-child policy, “threatens to impose a rising burden on the young, slow economic and living standard growth and become a socially destabilizing force,” said a CSIS report last year.

Without a solution to that problem, “it is difficult to envision a prosperous, long-term future for China.”

So, here’s a word of advice for Americans fretting about their country’s standing in relation to China: Relax!

]]> 56
Who wins in U.S. vs Europe contest? Fri, 12 Feb 2010 14:43:46 +0000 In these days of renewed gloom about the future of Europe, a quick test is in order. Who has the world’s biggest economy? A) The United States B) China/Asia C) Europe? Who has the most Fortune 500 companies? A) The United States B) China C) Europe. Who attracts most U.S. investment? A) Europe B) China C) Asia.

The correct answer in each case is Europe, short for the 27-member European Union (EU), a region with 500 million citizens. They produce an economy almost as large as the United States and China combined but have, so far, largely failed to make much of a dent in American perceptions that theirs is a collection of cradle-to-grave nanny states doomed to be left behind in a 21st century that will belong to China.

That China will rise to be a superpower in this century, overtaking the United States in terms of gross domestic product by 2035, is becoming conventional wisdom. But those who subscribe to that theory might do well to remember the fate of similar long-range forecasts in the past. At the turn of the 20th century, for example, eminent strategists predicted that Argentina would be a world power within 20 years. In the late 1980s, Japan was seen as the next global leader.

The latest pessimistic utterances about Europe were sparked by a debt crisis in Greece which raised concern over the health of the euro, the common currency of 16 EU members. Plus U.S. President Barack Obama’s decision to stay away from a U.S.-EU summit scheduled for May in Madrid, with a new EU leadership structure that should have made it easier to answer then U.S. Secretary of State Henry Kissinger’s famous question: “Who do I call when I want to talk to Europe?”

There are still several numbers to call in the complex set-up, giving fresh reasons to fret to those crystal-gazers who see the future dominated by the United States and China, the so-called G-2.

Pundits who see the European way of doing things as a model for the United States (and others) to follow are few and far between, not least, says one of them, Steven Hill, because most Americans are blissfully unaware of European achievements and, as he puts it, “reluctant to look elsewhere because ‘we are the best.'”

As foreigners traveling through the United States occasionally note, the phrases “we are the best” and “America is No.1″ are often uttered with deep conviction by citizens who have never set foot outside their country and therefore lack a direct way of comparison. (They are in the majority: only one in five Americans has a passport).

Hill, who heads the political reform program at the New American Foundation, a liberal Washington think tank, has just published a book whose title alone is enough to irk conservative Americans: Europe’s Promise. Why the European Way Is the Best Hope in an Insecure Future.

It marshals an impressive army of facts and comparative statistics to show that the United States is behind Europe in nearly every socio-economic category that can be measured and that neither America’s trickle-down, Wall Street-driven capitalism nor China’s state capitalism hold the keys to the future.

While China’s growth has been impressive, says Hill, the country remains, in essence, a sub-contractor to the West and is racked by internal contradictions.

“When I talk to American audiences,” Hill said in an interview, “many find the figures I cite hard to believe. They haven’t heard them before. U.S. businesses making more profits in Europe than anywhere else, 20 times more than in China? 179 of the world’s top companies are European compared with 140 American? That does not fit the preconceptions.”

Such preconceptions exist, in part, because U.S. media have portrayed Europe as a region in perpetual crisis, its economies sclerotic, its taxes a disincentive to personal initiative, its standards of living lower than America’s, its universal health care, guaranteed pensions, long vacations and considerably shorter working hours a recipe for low growth and stagnation. “In the transmission of news across the Atlantic, myth has been substituted for reality,” says Hill.

He is in good, though numerically small, company with such views. The economists Joseph Stiglitz and Paul Krugman, both Nobel prize winners, also have positive outlooks for Europe. In a recent column in the New York Times, Krugman said that Europe is often held up as evidence that higher taxes for the rich and benefits for the less well-off kill economic progress. Not so, he argued. The European experience demonstrates the opposite: social justice and progress can go hand in hand.

The relative rankings of countries tend to be defined by gross domestic product per capita but Hill points out that this might not be the best yardstick because it does not differentiate between transactions that add to the well-being of a country and those that diminish it. A dollar spent on sending a teenager to prison adds as much to GDP as a dollar spent on sending him to college.

On a long list of quality-of-life indexes that measure things beyond the GDP yardstick — from income inequality and access to health care to life expectancy, infant mortality and poverty levels — the United States does not rank near the top.

So where is the best place to live? For the past 30 years, a U.S.-based magazine, International Living, has compiled a quality-of-life index based on cost of living, culture and leisure, economy, environment, freedom, health, infrastructure, safety and climate. France tops the list for the fifth year running. The United States comes in 7th.

]]> 87
American intelligence and fortune-telling Thu, 07 Jan 2010 16:17:38 +0000 berndforblog

— Bernd Debusmann is a Reuters columnist. The opinions expressed are his own —

Hot on the heels of  what President Barack Obama called a potentially disastrous “screw-up” by the civilian intelligence community, here comes a devastating report on shortcomings of military intelligence in Afghanistan, by the officer in charge of it. He likens the work of analysts to fortune-telling.

The report is highly unusual both because of its almost brutal candor and the way it was published, outside military channels. Even more unusual: the three authors hold out journalistic skills as models to emulate for gathering and putting together intelligence.

“Eight years into the war in Afghanistan, the U.S. intelligence community is only marginally relevant to the overall strategy,” write the authors, Major General Michael Flynn, the most senior intelligence officer in Afghanistan, his advisor Captain Matt Pottinger, and Paul Batchelor of the Defense Intelligence Agency (DIA).

“The … vast intelligence apparatus is unable to answer fundamental questions about the environment in which U.S. and allied forces operate and the people they seek to persuade. Ignorant of local economics and landowners, hazy about who the powerbrokers are and how they might be influenced, incurious about the correlations between various development projects and the levels of cooperation among the villagers, and disengaged from people in the best position to find answers … U.S. intelligence officers and analysts can do little but shrug in response to high-level decision makers seeking the knowledge, analysis and information they need to wage a successful counterinsurgency.”

While finding and finishing off enemy leaders is an important part of intelligence work, the report says, there have been only token efforts to acquire knowledge about the population, the economy, the government and other aspects of the environment the U.S. and its allies in the 43-member coalition are trying to secure and eventually leave behind.

The three said they decided to issue their report through a respected think tank — the Washington-based Center for a New American Security, which is centrist and close to the military — “in order to broaden its reach to commanders, intelligence professionals and schoolhouse instructors outside, as well as inside, Afghanistan.”

Making their case through a think tank rather than standard channels speaks volumes about fears that outspoken critiques or straightforward information might get stuck in America’s vast intelligence bureaucracy, both military and civilian, without prompting recipients to act on it. This is what happened in the case of the Nigerian Muslim indicted for attempting to bring down a Detroit-bound airliner on Christmas Day in the screw-up criticized by Obama.

The report on intelligence gathering in Afghanistan addresses the military and was written long before a suicide bomber killed seven operatives of the Central Intelligence Agency (CIA) and a Jordanian agent at a base in Afghanistan on Dec. 30. That, and the failed Christmas Day bombing, raise questions over the effectiveness of the intelligence and security overhaul that followed the Sept. 11, 2001, attack on New York and Washington.

Those reforms established the Department of Homeland Security, a collection of disparate agencies with some 200,000 employees, and the Office of the Director of National Intelligence, the so-called intelligence czar overseeing 16 spy agencies. They include the National Counterterrorism Center, set up to make sure that the dots that were not connected before Sept. 11 would be connected in future.

In an op-ed in the New York Times on Wednesday, Thomas Kean and John Farmer, respectively the co-chairman and chief counsel of the 9/11 Commission, provided a gloomy answer on the success of the overhaul — despite the best efforts of intelligence reformers, turf battles persist, the drift towards inertia continues, and the system is riddled with “persistent bureaucratic fault lines.”

Much of the problem, intelligence veterans say, is information overload. But in the case of intelligence on Afghanistan, according to the authors of the report (Fixing Intel: A Blueprint for Making Intelligence Relevant in Afghanistan), there is a shortage of information that goes beyond insurgents burying bombs or setting up ambushes.

Dozens of analysts in Kabul and hundreds more in the United States, the three write, are “so starved for information from the field that many say their jobs feel more like fortune telling than serious detective work … It is little wonder then that many decision-makers rely more upon newspapers than military intelligence to obtain ‘ground truth.'”

To get things right requires cultural change: “Analysts must absorb information with the thoroughness of historians, organize it with the skill of librarians, and disseminate it with the zeal of journalists.” Apart from that, intelligence professionals must break away from the notion, dating back to the Cold War, that open-source material is inferior to classified information.

How to improve matters? “To begin, commanders must authorize a select group of analysts to retrieve information from the ground level and make it available to a broader audience, similar to the way journalists work.”

Even the format of intelligence briefings should be revised, write Flynn and his aides. Commanders who think that PowerPoints – “slides with little more text than a comic strip” – and spreadsheets can describe the complexities of the Afghan conflict should think again.

And what if such prescriptions are ignored? “History is replete with examples of powerful military forces that lost wars to much weaker opponents because they were inattentive to nuances in their environment. A Russian general who fought for years in Afghanistan cited this as a primary reason for the Soviet Union’s failures in the 1980s.”

]]> 8
War and Peace, by Barack Obama Thu, 03 Dec 2009 15:04:10 +0000 Bernd Debusmann— Bernd Debusmann is a Reuters columnist. The opinions expressed are his own. —

It is a timeline rich in irony. On Dec. 10, Barack Obama will star at a glittering ceremony in Oslo to receive the 2009 Nobel Peace Prize. That’s just nine days after he ordered 30,000 additional American troops into a war many of his fellow citizens think the U.S. can neither win nor afford.

Whether the sharp escalation of the war in Afghanistan he ordered on December 1 will achieve its stated aim – disrupt, dismantle and eventually defeat al Qaeda in Afghanistan and Pakistan – remains to be seen. But one thing is certain: more troops equals more fighting equals more deaths — of soldiers, insurgents and the hapless civilians caught in the middle. Not exactly a scenario of peace.

In Oslo, Obama will become the fourth American president (after Jimmy Carter, Woodrow Wilson and Theodore Roosevelt) to be handed the coveted peace medal and invited to give the traditional Nobel Lecture. It is meant to spell out the award winner’s vision of peace, a challenging task for a man who just picked a much bigger war from a range of options that included reducing the U.S. military presence.

Resolving the contradiction will require the mastery of words of Leo Tolstoy, author of the epic novel War and Peace about the run-up to the unsuccessful invasion of Russia by Napoleon.

The deployment Obama announced at the U.S. military academy at West Point will bring U.S. forces to around 100,000, more than three times as many as when the president took office in January. The combined strength of American troops and soldiers from 42 other nations will be 140,000 – the same level as the peak of Soviet forces during an eight-year war that ended in a humiliating defeat.

Obama and his war council are as confident that the U.S. will not share the same fate as they are determined to reject comparisons between the American involvement in Afghanistan and the war in Vietnam. “This argument depends upon a false reading of history,” Obama said in his West Point speech.

Some respected experts disagree. “For eight years, the United States has engaged in an almost exact political and military reenactment of the Vietnam war,” Thomas Johnson and Chris Mason write in the latest issue of Military Review, published by the U.S. Army’s Combined Arms Center, “and the lack of self-awareness of the repetition of events 50 years ago is deeply disturbing.”


The alternatives for a new Afghan strategy the president discussed over the past three months in lengthy sessions with his war council included reducing U.S. forces in Afghanistan and stepping up missile strikes and special forces operations against al Qaeda militants on the Pakistani side of the border, the region that serves them as a safe haven.

Instead, the president decided on what looks like doubling down on a bad bet.

Obama himself pointed to a big obstacle on the road to success for his war plan: “Afghanistan is not lost, but for several years it has moved backwards. There is no imminent threat of the government being overthrown, but the Taliban has gained momentum. Al Qaeda has not re-emerged in Afghanistan in the same numbers as before 9/11, but they retain their safe havens along the border.
“And our forces lack the full support they need to effectively train and partner with Afghan security forces and better secure the population.”

The key words are “full support” and Obama did not explain where that might come from. From a corrupt, inefficient government that lacks legitimacy in the eyes of most Afghans? On the Pakistani side, from a weak president with strained relations with the military?

David Obey, a Democratic congressman who will play a key role in the impending Congressional wrangling over how to finance the war, spelt out the problem in an early comment on Obama’s speech: “We can have the most carefully thought out policy in the world but if we do not have the tools on the ground, the odds for success are stacked against us. And right now, the only tools available to us are the Pakistani government and the Karzai government in Afghanistan. Both are incredibly weak reeds to lean on.”

Can those reeds be turned into solid tree trunks? Obama thinks such a near-miraculous transformation can be achieved by setting a deadline for the withdrawal of U.S. troops beginning in July 2011 by which time, or so the wishful thinking goes, Afghan security forces can fight the insurgents themselves.

The withdrawal deadline has been criticized by Republicans, many of whom – unlike Obama’s own Democrats – applauded the escalation. But Republican critics need not worry – White House officials say July 2011 is the deadline for Americans to begin (the emphasis is on begin) to pull out. No word on how many.

And in any case, the beginning is subject to review in December 2010.

Which almost certainly means the U.S. will be in Afghanistan for the long haul. There is ample time for Obama to work on solutions that would merit a Nobel peace prize. Unlike the one he is getting on Dec. 10 for, as the citation put it, capturing the world’s attention and giving its people hope.

You can contact the author at

]]> 11
A paradox of plenty – hunger in America Tue, 24 Nov 2009 15:43:04 +0000 Bernd Debusmann—  Bernd Debusmann is a Reuters columnist. The opinions expressed are his own. —

Call it a paradox of plenty. In the world’s wealthiest country, home to more obese people than anywhere else on earth, almost 50 million Americans struggled to feed themselves and their children in 2008. That’s one in six of the population. Millions went hungry, at least some of the time. Things are bound to get worse.

This the bleak picture drawn from an annual survey on “household food security” compiled by the U.S. Department of Agriculture (USDA) and released in mid-November. It showed the highest level of food insecurity since the government started the survey, in 1995, and provided a graphic illustration of the effect of sharply rising unemployment.

This year’s picture will be even bleaker – the unemployment rate more than doubled from the beginning of 2008 to now, at 10.2 percent the highest in a quarter century. It is still climbing, and for many the distance between losing a job and lack of food security is very short.

In keeping with the American predilection for euphemisms, the word “hunger” does not appear in the report which classes food security into several categories, from “marginal” and “low” to “very low.”

Marginal food security means, in the lexicon of the USDA, “anxiety over food shortages or shortage of food in the house.” The second category, low, means “reduced quality, variety or desirability of diet,” but not necessarily less food.

The most severe category, “very low,” used to be labeled “food insecurity with hunger” and is defined as “disrupted eating patterns and reduced food intake.” That applied to around 17 million people, up from 12 million in 2007. Black and Hispanic families and single-parent households are the most affected.

It is not the kind of hunger — think African famines, skeletal babies with distended bellies — that brought world leaders to a U.N. food summit in Rome this month to boost aid from rich countries for agricultural development in the Third World. The U.S. is a land of plenty, so much so that a study by the University of Arizona a few years ago found that the average household wastes about 14 percent of their food purchases.

Food is so abundant that overeating is more of a problem, numerically and in terms of public health, than under-nutrition. The Food Research and Action Center, a Washington-based advocacy group, makes the point that “poverty can make people more vulnerable to hunger as well as obesity,” one of the reasons being that food high in calories is cheaper than healthy food. For many  Americans, hunger and obesity are two sides of the same poverty coin.

(International health statistics put the United States at the top of the obesity league. Two-thirds of Americans are overweight and a third of these are obese.)


Vicki Escarra, head of Feeding America, a hunger relief charity that runs 200 food banks in the U.S., has likened the growing difficulties of those on the lower rungs of the socio-economic ladder to conditions in the Third World. She is right in more ways than one.

The USDA report reflects inequality of Third World proportions. While the Great Recession has culled the ranks of American millionaires — by 22 percent according to a September study by the Boston Consulting Group — the gap between rich and poor is not shrinking.

Last year, according to a report by the census bureau, the wealthiest 10 percent of Americans made 11.4 times more than those living on the poverty line. The year before, the ratio was 11.2. At the far end of the economic scale, America’s six largest bank holdings have set aside $112 billion in salaries and bonuses during the first nine months of the year. By year’s end, bonuses might exceed the almost $164 billion paid in 2007, before the credit bubble banks had helped to inflate burst and millions of Americans lost their jobs and savings.

Banks and other financial institutions were rescued by a $700 billion infusion of taxpayer money and news of the bonuses coincided with reports that U.S. wages were at a 19-year low. Which helps explain growing anger among a public long famous for lacking the resentment of the rich that is common in other parts of the world.

After all, a bedrock belief in America held that this is the land of unlimited opportunities where every citizen has an equal chance to succeed and become rich. That requires an assumption that the system is fair. How many Americans still believe that? Last summer, a pair of political scientists, Benjamin Page and Lawrence Jacobs, published a study whose findings included that just 28 percent thought the present distribution of wealth is fair.

More evidence that the gap between myth and reality is shrinking comes from the American Human Development project, a research group which found that “social mobility is now less fluid in the United States than in other affluent nations…a poor child born in Germany, France, Canada or one of the Nordic countries has a better chance to join the middle class in adulthood than an American child born into similar circumstances.”

A better chance to avoid food insecurity, too.

You can contact the author at

]]> 97