Media such as KPHG and Radio Free Europe are full of the suicide of Vladimir Kolesnikov. They paint it as yet another symptom of the lack of freedom in Russia.
The problems of this 18-year old boy started when last june he went to his school in a Moscow suburb with a T-shirt featuring a Ukrainian flag and the words: "Return Crimea." He got trouble in his school and with his grandfather with whom he lived and he was repeatedly beaten up. After some time he was sent to his father who lives in some small provincial town. There his trouble continued, made even worse by his homosexuality. In the end he gave up and committed suicide.
As the title ("How My Friend, Vlad Kolesnikov, Was Driven To His Death In Putin's Russia") of the article written by Claire Bigg for Radio Free Europe already suggests it is a real tear jerker.
However, I see the situation from the opposite side. Far from being his best friend - as Bigg presents herself - I see someone who took advantage of a lonely boy who desperately wanted to belong to something. It must have been easy to convince him of the superiority of Western culture with its tolerance of homosexuality. It gave him 2000 Facebook "friends" and "friends" such as Bigg who lived thousands of kilometers away. But these were false friends - keeping him disconnected from his own environment and preventing him from making up with those who were close to him.
A true friend of Vladimir would not have filled his head with nonsense about how brave he was doing this. It would instead have explained to him that this is a sensitive issue in Russia and that of a lot of Russians have died in Ukraine and that for those reasons he should be subtle in his support for Ukraine.
Monday, December 28, 2015
Sunday, December 20, 2015
The Syria peace plan that wasn't
The Security council has adopted resolution 2254, that is presented as a peace plan. The BBC summarized it as follows:
- Calls for ceasefire and formal talks on a political transition to start in early January
- Groups seen as "terrorist", including Islamic State and al-Nusra Front, are excluded
- "Offensive and defensive actions" against such groups - a reference to air strikes by US-led coalition and Russia - to continue
- UN chief Ban Ki-moon to report by 18 January on how to monitor ceasefire
- "Credible, inclusive and non-sectarian governance" to be established within six months
- "Free and fair elections" under UN supervision to be held within 18 months
- Political transition should be Syrian-led
It is a lot of hot air that very likely won't produce any result.
First of all the plan is not realistic:
- there is no strict separation between Islamic State, Al-Nusra and the rest. They often fight together against the government and fighters regularly switch from one group to another.
- as al-Nusra and ISIS are part of the rebel groups in many areas it will be impossible to maintain an armistice there.
- more than half the Syrian rebels subscribe to an Islamist extremist ideology. If one group disappears they will just join another group.
- "free and fair elections" is a joke in a climate were there are many fighting groups that don't believe in democracy. Neither do they believe in tolerance and equal rights for other groups that is among the foundations without which democracy is impossible. There is probably a majority of the Syrians who are democratically minded, but in the present power distribution they would lose the fight for control and democracy would be short-lived.
- "Credible, inclusive and non-sectarian governance" sounds good. Unfortunately that assumes also an inclusive attitude from the opposition. Yet that is definitely absent among much of the armed opposition. If Syria had a law that prevents sectarian parties to participate in elections - as some countries have - almost none of the opposition groups would be allowed to participate.
And then there is the question whether all parties voted for this resolution in good faith:
- A look at Ukraine learns that the US has accepted there similar peace plans and that nothing ever came of it. The typical pattern is that the US becomes serious about peace plans when the side that it is supporting is losing and is in danger of breaking down. After the peace plan is adopted the accompanying armistice is used to rearm and retrain that side until it is strong enough to attack again. In the meantime the peace negotiations lead nowhere. The US supported side ignores the concessions it did in the peace plan and makes demands that it knows are unacceptable for the other side. When it resumes hostilities the US government is quiet or tries to blame the other side. The Western press and the other Western governments mostly slavishly follow suit.
- It is already clear that the US and the parties it supports will - once negotiations start - again demand the immediate departure of Assad. So a compromise is impossible.
- So the most likely goal of the circus is to put a brake on the Russian attacks against the "moderate" opposition.
- Calls for ceasefire and formal talks on a political transition to start in early January
- Groups seen as "terrorist", including Islamic State and al-Nusra Front, are excluded
- "Offensive and defensive actions" against such groups - a reference to air strikes by US-led coalition and Russia - to continue
- UN chief Ban Ki-moon to report by 18 January on how to monitor ceasefire
- "Credible, inclusive and non-sectarian governance" to be established within six months
- "Free and fair elections" under UN supervision to be held within 18 months
- Political transition should be Syrian-led
It is a lot of hot air that very likely won't produce any result.
First of all the plan is not realistic:
- there is no strict separation between Islamic State, Al-Nusra and the rest. They often fight together against the government and fighters regularly switch from one group to another.
- as al-Nusra and ISIS are part of the rebel groups in many areas it will be impossible to maintain an armistice there.
- more than half the Syrian rebels subscribe to an Islamist extremist ideology. If one group disappears they will just join another group.
- "free and fair elections" is a joke in a climate were there are many fighting groups that don't believe in democracy. Neither do they believe in tolerance and equal rights for other groups that is among the foundations without which democracy is impossible. There is probably a majority of the Syrians who are democratically minded, but in the present power distribution they would lose the fight for control and democracy would be short-lived.
- "Credible, inclusive and non-sectarian governance" sounds good. Unfortunately that assumes also an inclusive attitude from the opposition. Yet that is definitely absent among much of the armed opposition. If Syria had a law that prevents sectarian parties to participate in elections - as some countries have - almost none of the opposition groups would be allowed to participate.
And then there is the question whether all parties voted for this resolution in good faith:
- A look at Ukraine learns that the US has accepted there similar peace plans and that nothing ever came of it. The typical pattern is that the US becomes serious about peace plans when the side that it is supporting is losing and is in danger of breaking down. After the peace plan is adopted the accompanying armistice is used to rearm and retrain that side until it is strong enough to attack again. In the meantime the peace negotiations lead nowhere. The US supported side ignores the concessions it did in the peace plan and makes demands that it knows are unacceptable for the other side. When it resumes hostilities the US government is quiet or tries to blame the other side. The Western press and the other Western governments mostly slavishly follow suit.
- It is already clear that the US and the parties it supports will - once negotiations start - again demand the immediate departure of Assad. So a compromise is impossible.
- So the most likely goal of the circus is to put a brake on the Russian attacks against the "moderate" opposition.
Saturday, December 05, 2015
The EU gave in to Erdogan's blackmail and helped him to get elected
There is one rule when it comes to blackmail: if you give in there is a good chance you will face more of it.
When Erdogan suddenly opened the borders and flooded Europe with "refugees" there was little doubt that this was blackmail. Yet soon lots of high level EU diplomats could be found in Turkey and when Erdogan a little later visited the EU he got a red carpet treatment and almost everything he had asked for. It will be made easier for Turks to get a visa for the EU - although the details still need to be negotiated -, Turkey will get 3 billion euro to support its refugees and an EU progress report that critical of the situation in Turkey was postponed until after the Turkish elections of 1 november.
To top it off Merkel visited Istanbul shortly afterwards and declared there that the agreement between the EU and Turkey on the refugees had brought a Turkish EU membership closer. She could as well have shouted "Vote for Erdogan!". Unsurprisingly Erdogan won the elections - getting much more votes than the opinion polls had predicted.
One can only wonder what made the Eurocrats so stupid that they gave in to Erdogan's blackmail - and doing so helped him win an election. For some of them it will have been mere stupidity. But I suspect that US pressure played an important role. A weakening of Erdogan's position would have put in doubt Turkey's commitment to America's regime change project in Syria. Obama has named Erdogan as one of his top five international friends. And it was another of Obama's top 5 - Merkel - who helped to explode the opening of Turkey's borders into a crisis by declaring begin september that Germany would accept any refugee from Syria.
Soon after the gates opened in Turkey articles started to appear that suggested that the flood of refugees was no coincidence but the result of deliberate decisions at the top in Turkey. This was confirmed by an Erdogan advisor.
It didn't help that the EU had egg on its face as its memberstates had been very busy slashing their contributions to the World Food Program, that as a consequence was forced to slash its support for Syrian refugees in Lebanon, Jordan and Turkey.
As could be expected Turkey has only partially stopped the flow of refugees since the agreement. It knows very well that once the pressure subsides the EU may start to come back on some of its promises. So it does enough to give the impression of an effort while it does on the other side little enough to keep up the pressure on the EU. And once the EU starts delivering it will without doubt find ways to increase its demands: asking for more money and also repeating its demands for a military intervention in Syria - its main demand that wasn't concurred with. According to Amnesty Turkey has found yet another method to keep up the pressure: maltreatment of refugees and even sending some back to Syria.
Recently we have seen the EU heaping the blame on Greece for not guarding its border better. But Greece doesn't have much incentive to do so as registering the refugees would also bring the obligation to keep them. And what sense does it make to register refugees when you can't send them back. Besides that: Greece registering the refugees would do nothing to stop the flow. It looks like Greece is singled out as a scapegoat by Eurocrats who don't want to anger Turkey.
The EU could have taken the opposite approach. It could have scolded Erdogan for unleashing the refugee flood. It could have declared very publicly that as long as Erdogan is in power an EU membership for Turkey is impossible. Punishment is sometimes a better strategy than rewarding blackmail.
Now the EU has adopted crazy plans to adopt 160.000 refugees. It will help nobody. There should be adequate money for refugee shelter and support in the region and also in Syria itself. The stated logic is that it is better when we make our own selection instead of waiting for who comes by himself. But such a selection will do nothing to stop the flow crossing illegally the borders. On the contrary: one can expect it to increase.
When Erdogan suddenly opened the borders and flooded Europe with "refugees" there was little doubt that this was blackmail. Yet soon lots of high level EU diplomats could be found in Turkey and when Erdogan a little later visited the EU he got a red carpet treatment and almost everything he had asked for. It will be made easier for Turks to get a visa for the EU - although the details still need to be negotiated -, Turkey will get 3 billion euro to support its refugees and an EU progress report that critical of the situation in Turkey was postponed until after the Turkish elections of 1 november.
To top it off Merkel visited Istanbul shortly afterwards and declared there that the agreement between the EU and Turkey on the refugees had brought a Turkish EU membership closer. She could as well have shouted "Vote for Erdogan!". Unsurprisingly Erdogan won the elections - getting much more votes than the opinion polls had predicted.
One can only wonder what made the Eurocrats so stupid that they gave in to Erdogan's blackmail - and doing so helped him win an election. For some of them it will have been mere stupidity. But I suspect that US pressure played an important role. A weakening of Erdogan's position would have put in doubt Turkey's commitment to America's regime change project in Syria. Obama has named Erdogan as one of his top five international friends. And it was another of Obama's top 5 - Merkel - who helped to explode the opening of Turkey's borders into a crisis by declaring begin september that Germany would accept any refugee from Syria.
Soon after the gates opened in Turkey articles started to appear that suggested that the flood of refugees was no coincidence but the result of deliberate decisions at the top in Turkey. This was confirmed by an Erdogan advisor.
It didn't help that the EU had egg on its face as its memberstates had been very busy slashing their contributions to the World Food Program, that as a consequence was forced to slash its support for Syrian refugees in Lebanon, Jordan and Turkey.
As could be expected Turkey has only partially stopped the flow of refugees since the agreement. It knows very well that once the pressure subsides the EU may start to come back on some of its promises. So it does enough to give the impression of an effort while it does on the other side little enough to keep up the pressure on the EU. And once the EU starts delivering it will without doubt find ways to increase its demands: asking for more money and also repeating its demands for a military intervention in Syria - its main demand that wasn't concurred with. According to Amnesty Turkey has found yet another method to keep up the pressure: maltreatment of refugees and even sending some back to Syria.
Recently we have seen the EU heaping the blame on Greece for not guarding its border better. But Greece doesn't have much incentive to do so as registering the refugees would also bring the obligation to keep them. And what sense does it make to register refugees when you can't send them back. Besides that: Greece registering the refugees would do nothing to stop the flow. It looks like Greece is singled out as a scapegoat by Eurocrats who don't want to anger Turkey.
The EU could have taken the opposite approach. It could have scolded Erdogan for unleashing the refugee flood. It could have declared very publicly that as long as Erdogan is in power an EU membership for Turkey is impossible. Punishment is sometimes a better strategy than rewarding blackmail.
Now the EU has adopted crazy plans to adopt 160.000 refugees. It will help nobody. There should be adequate money for refugee shelter and support in the region and also in Syria itself. The stated logic is that it is better when we make our own selection instead of waiting for who comes by himself. But such a selection will do nothing to stop the flow crossing illegally the borders. On the contrary: one can expect it to increase.
Saturday, November 28, 2015
The neocon trick of the double lie
There is now almost consensus that the Iraq invasion in 2003 was a failure. Interestingly, almost all discussions about it are about the absent WMDs. That is strange, because even if Saddam had had some chemical weapons the invasion would have been a bad idea.
This strategy of keeping us busy with red herrings seems a standard neocon strategy.
We see it again with the discussion about the intervention in Libya. All the attention goes to the question whether some diplomat got enough protection. Doing that the attention is diverted away both from the chaos that Libya has descended in thanks to the US led intervention and the fact that the murdered ambassador Stevens very likely was organizing the transport of weapons to fuel the Syrian uprising. In that light Stevens himself seems responsible for the death of many Syrians.
Now we have the downing of a Russian Su24 by Turkey. Here our attention is diverted by the question whether the plane had crossed into Turkish territory. But the real discussion should be about the fact that - even if the plane had crossed into Turkish territory - this action would have been completely unacceptable. There are ways to deal with such incidents. And Turkey, that routinely violates the airspace of its neighbors (Greece, Iraq and Syria) knows that better than anyone else. Would anyone accept it if Russia shot down an American plane that had been in its airspace for 17 seconds?
Of course the Turkish claim that the SU24 was in its airspace is rather suspicious. They had camera crews ready, on the ground there were well equipped search teams looking for the pilots and they claimed that the downing had been approved by the Turkish prime minister. That all points to a well prepared action.
Don't expect the neocons to be fearful to lose the argument. These are red herrings. They deliberately take positions that are undefendable in order to detract the attention from the real issues. By having us discussing facts - on which we lack access - they prevent us from discussing policy and morals. Nobody asks who initiated the attack on Iraq and what his real reasons were. Many have advised Hillary to be open about her email account - assuming that the continuing scandal harms her. But in fact it serves her by making her adversaries boring naggers. And the discussion about whether the SU24 violated Turkish airspace deflects the attention from the questions of why the US supported Turkish aggression and whether it was involved in planning it.
This strategy of keeping us busy with red herrings seems a standard neocon strategy.
We see it again with the discussion about the intervention in Libya. All the attention goes to the question whether some diplomat got enough protection. Doing that the attention is diverted away both from the chaos that Libya has descended in thanks to the US led intervention and the fact that the murdered ambassador Stevens very likely was organizing the transport of weapons to fuel the Syrian uprising. In that light Stevens himself seems responsible for the death of many Syrians.
Now we have the downing of a Russian Su24 by Turkey. Here our attention is diverted by the question whether the plane had crossed into Turkish territory. But the real discussion should be about the fact that - even if the plane had crossed into Turkish territory - this action would have been completely unacceptable. There are ways to deal with such incidents. And Turkey, that routinely violates the airspace of its neighbors (Greece, Iraq and Syria) knows that better than anyone else. Would anyone accept it if Russia shot down an American plane that had been in its airspace for 17 seconds?
Of course the Turkish claim that the SU24 was in its airspace is rather suspicious. They had camera crews ready, on the ground there were well equipped search teams looking for the pilots and they claimed that the downing had been approved by the Turkish prime minister. That all points to a well prepared action.
Don't expect the neocons to be fearful to lose the argument. These are red herrings. They deliberately take positions that are undefendable in order to detract the attention from the real issues. By having us discussing facts - on which we lack access - they prevent us from discussing policy and morals. Nobody asks who initiated the attack on Iraq and what his real reasons were. Many have advised Hillary to be open about her email account - assuming that the continuing scandal harms her. But in fact it serves her by making her adversaries boring naggers. And the discussion about whether the SU24 violated Turkish airspace deflects the attention from the questions of why the US supported Turkish aggression and whether it was involved in planning it.
Tuesday, October 06, 2015
How the anti-Assad propaganda works
With the arrival of Russian troops Syria has once again become big news. And once again I see the same propaganda tricks in the media. An overview:
80% of the Syrians is Sunni
This was in a recent article in the NY Times. Estimates before the war gave 70% Sunni, 12% Christians, 12% Alawites and 6% Druze, so very likely this puts the number of Sunni way too high.
More important is the suggestion that Assad is supposed by those 70 or 80%. Yet it is far from the truth. This number includes the Kurds (15% of the population) and many Arab Sunni's (mostly in the cities) who prefer Assad over the rebels. The rebels know this and they one of their demands at the negotiations is that Assad should not be allowed to take part in coming elections. The clearly aren't sure that they would win.
The only thing that those claims make clear is the sectarian motives of the countries that support the uprising.
Assad started the conflict by using violence against unarmed protesters
According to the law Assad would have the right to do so - provided it the violence is measured. Governments don't have the monopoly of violence for nothing. Against a color revolution that aims to gradually take over the state - first occupying the central square and then overrunning the parliament - it certainly would be justified.
But there are more lies in this claim. It also ignores that the protests never were nonviolent. On the first day of protest in Daraa the Baath party headquarters and the building of a mobile phone company owned by an Assad relative were set on fire. This would become standard operating procedure in following protests in other cities.
The protests also had another violent element that seldom is reported. While the main protests happened peacefully on the main square of a city in the streets around that square there were violent groups of youth who battled the police and prevented it as long as possible from reaching the square.
Assad is using violence against his own population
Obama has a standard operating procedure: first he instigates the population of a country to start an uprising and then he accuses its government of using violence against its own population. Pure hypocrisy!
the uprising is spontaneous
Saudi Arabia, Qatar and Turkey have spent billions of dollars on funding the uprising. They pay for its arms and they pay the rebel fighters a wage that is much higher than what the subscripts in Assad's government army receive. Without this money the uprising would have ended long ago.
Assad is only interested in prolonging his own rule
Any suggestion that Assad has non-selfish motives is discarded. The rule of law, the secular character of Syria or even the protection of the Alawites: all such arguments by Assad and his supporters are discarded with a wave of hand.
Putin wants to distract the attention from the bad economic situation at home
Many newspapers have published theories like these. It is a dirty discussion tactic because questioning someone's motives deflects the attention from the facts on the ground. Besides that motives are usually mixed and impossible to prove as they happen in someone else's head. A reader of the NY Times ("Carolyn") made nice comment on this: I don't know why so many feel compelled to assign ulterior motives to the Russia government when it's doing exactly what it declared it would do. There's no mystery; no "testing NATO," no "testing the U.S.", no embarking on a Cold War. Russia does not have "an inferiority complex," nor does she want to "assert herself" as a world power because she IS a world power, and HAS BEEN since WW II. Russia has two objectives as was openly declared: supporting Assad and wiping out terrorists. That's exactly what she's doing; no guess work needed.
80% of the Syrians is Sunni
This was in a recent article in the NY Times. Estimates before the war gave 70% Sunni, 12% Christians, 12% Alawites and 6% Druze, so very likely this puts the number of Sunni way too high.
More important is the suggestion that Assad is supposed by those 70 or 80%. Yet it is far from the truth. This number includes the Kurds (15% of the population) and many Arab Sunni's (mostly in the cities) who prefer Assad over the rebels. The rebels know this and they one of their demands at the negotiations is that Assad should not be allowed to take part in coming elections. The clearly aren't sure that they would win.
The only thing that those claims make clear is the sectarian motives of the countries that support the uprising.
Assad started the conflict by using violence against unarmed protesters
According to the law Assad would have the right to do so - provided it the violence is measured. Governments don't have the monopoly of violence for nothing. Against a color revolution that aims to gradually take over the state - first occupying the central square and then overrunning the parliament - it certainly would be justified.
But there are more lies in this claim. It also ignores that the protests never were nonviolent. On the first day of protest in Daraa the Baath party headquarters and the building of a mobile phone company owned by an Assad relative were set on fire. This would become standard operating procedure in following protests in other cities.
The protests also had another violent element that seldom is reported. While the main protests happened peacefully on the main square of a city in the streets around that square there were violent groups of youth who battled the police and prevented it as long as possible from reaching the square.
Assad is using violence against his own population
Obama has a standard operating procedure: first he instigates the population of a country to start an uprising and then he accuses its government of using violence against its own population. Pure hypocrisy!
the uprising is spontaneous
Saudi Arabia, Qatar and Turkey have spent billions of dollars on funding the uprising. They pay for its arms and they pay the rebel fighters a wage that is much higher than what the subscripts in Assad's government army receive. Without this money the uprising would have ended long ago.
Assad is only interested in prolonging his own rule
Any suggestion that Assad has non-selfish motives is discarded. The rule of law, the secular character of Syria or even the protection of the Alawites: all such arguments by Assad and his supporters are discarded with a wave of hand.
Putin wants to distract the attention from the bad economic situation at home
Many newspapers have published theories like these. It is a dirty discussion tactic because questioning someone's motives deflects the attention from the facts on the ground. Besides that motives are usually mixed and impossible to prove as they happen in someone else's head. A reader of the NY Times ("Carolyn") made nice comment on this: I don't know why so many feel compelled to assign ulterior motives to the Russia government when it's doing exactly what it declared it would do. There's no mystery; no "testing NATO," no "testing the U.S.", no embarking on a Cold War. Russia does not have "an inferiority complex," nor does she want to "assert herself" as a world power because she IS a world power, and HAS BEEN since WW II. Russia has two objectives as was openly declared: supporting Assad and wiping out terrorists. That's exactly what she's doing; no guess work needed.
Monday, September 21, 2015
Croatia foolishly misses the point in the refugee crisis
Latest news has it that in the fight against the refugee stream the Croats are bussing the refugees towards the Hungarian border.
Their assumption is that this will force the Hungarians to let them through. But what they forget is that it will also tell refugees who are still in Serbia that it is a good idea to go to Croatia. As a result it will lead to an increase of the refugee stream. And as an EU member Croatia will in the end be forced to shoulder its part.
Their assumption is that this will force the Hungarians to let them through. But what they forget is that it will also tell refugees who are still in Serbia that it is a good idea to go to Croatia. As a result it will lead to an increase of the refugee stream. And as an EU member Croatia will in the end be forced to shoulder its part.
Sunday, June 28, 2015
The myth of stagflation
Oil prices rose fast in the 1973 and 1979 oil shocks. As oil cost more some prices in the Western world rose and this was registered as “inflation” and the Western central banks jumped to the conclusion that they had to raise the interest rates to fight this inflation.
Inflation itself is not as bad as is often claimed. Sure, Weimar type inflation where the money that you receive in the morning has lost most of its value in the evening is destabilizing. But people can very well live with a stable inflation of around 10%. Countries like Italy have industrialized and become wealthy in such circumstances.
The main job of the central banks is not to fight inflation: it is to maintain a stable environment and to prevent bubbles and the resulting disastrous boom and bust economic cycles. And there is no question of bubbles in those circumstances: the driver of those rising prices is not excessive demand but the fact that the prices of some imports are rising due to circumstances that are not related to the national economy.
One could still make the argument that the prices are rising and that those rises will result in other rises and could so cause a standard inflationary cycle: workers are demanding wage increases to correct the inflation and companies are increasing the prices of their products because their raw materials and workers cost more.
Yet there is also another mechanism at work: the terms of exchange have worsened and now the country needs to export more to pay for its imports. This will take time: new trade relations have to be established and new markets have to be conquered. It may also take some time before the newly rich countries - like the oil sheikhs in the 1970s - start spending their new wealth. Over time internal consumption may have to fall to release production capacity for the new exports. However, that will only work once the new export links have been established. Reducing demand before that time by "inflation fighting" will only drive companies into bankruptcy and reduce the capacity of the economy to make those exports.
However, it is very questionable whether rising interest rates to fight inflation is the best way to achieve those results. In the 1970s and 1980s they caused stagflation. The Western economics seemed stuck in stagflation until the mass spending of Reagonomics got it out of the swamp. It looks like the best way to address this kind of situation is to let the price hikes have their course without taking anti-inflationary measures. Initially the government might even spend more to make up for the extra money flowing over the borders - while simultaneously redirecting the economy to export more.
Interestingly we see the same discussion now in oil exporting countries and specially in Russia that immediately following the sinking oil prices saw its currency fall. As a result imports cost more in terms of the local currency and the central bank is signalling rising inflation and taking "appropriate measures" that may well be very inappropriate.
Inflation itself is not as bad as is often claimed. Sure, Weimar type inflation where the money that you receive in the morning has lost most of its value in the evening is destabilizing. But people can very well live with a stable inflation of around 10%. Countries like Italy have industrialized and become wealthy in such circumstances.
The main job of the central banks is not to fight inflation: it is to maintain a stable environment and to prevent bubbles and the resulting disastrous boom and bust economic cycles. And there is no question of bubbles in those circumstances: the driver of those rising prices is not excessive demand but the fact that the prices of some imports are rising due to circumstances that are not related to the national economy.
One could still make the argument that the prices are rising and that those rises will result in other rises and could so cause a standard inflationary cycle: workers are demanding wage increases to correct the inflation and companies are increasing the prices of their products because their raw materials and workers cost more.
Yet there is also another mechanism at work: the terms of exchange have worsened and now the country needs to export more to pay for its imports. This will take time: new trade relations have to be established and new markets have to be conquered. It may also take some time before the newly rich countries - like the oil sheikhs in the 1970s - start spending their new wealth. Over time internal consumption may have to fall to release production capacity for the new exports. However, that will only work once the new export links have been established. Reducing demand before that time by "inflation fighting" will only drive companies into bankruptcy and reduce the capacity of the economy to make those exports.
However, it is very questionable whether rising interest rates to fight inflation is the best way to achieve those results. In the 1970s and 1980s they caused stagflation. The Western economics seemed stuck in stagflation until the mass spending of Reagonomics got it out of the swamp. It looks like the best way to address this kind of situation is to let the price hikes have their course without taking anti-inflationary measures. Initially the government might even spend more to make up for the extra money flowing over the borders - while simultaneously redirecting the economy to export more.
Interestingly we see the same discussion now in oil exporting countries and specially in Russia that immediately following the sinking oil prices saw its currency fall. As a result imports cost more in terms of the local currency and the central bank is signalling rising inflation and taking "appropriate measures" that may well be very inappropriate.
Thursday, June 25, 2015
When friends commit crimes
In its ambition to be world ruler the US always has had its share of misbehaving friends. Mobutu was probably the most famous among them, but there have been many others. Out of fear of losing their support the West tended to ignore their misbehavior.
Nowadays Israel and Saudi Arabia are among the misbehaving friends. And we see the US bending backwards in order not to lose their friendship.
Doing so the US is showing itself a false friend. Good friends occasionally tell each other the truth. Forcing Israel to behave better towards the Palestinians could in the long run be better for Israel's future.
In the case of Saudi Arabia this issue is even more clear. By starting a war against Yemen the royal family has painted itself into a corner. The main initiator of the war is crown prince Muhammad, king Salman favorite nephew. Stopping the war would be a major defeat for Muhammad. This is by excellence an opportunity for the US to show itself a true friend: by stopping all support for the war and starting humanitarian support for Yemen it could force Saudi Arabia to end its war. On the short term the Saudi's certainly would blame Obama - also in an effort to save Muhammad's face. But in the long term they would have to admit that it was the best option.
Yet this kind of behavior takes courage. And until now that has been missing.
Nowadays Israel and Saudi Arabia are among the misbehaving friends. And we see the US bending backwards in order not to lose their friendship.
Doing so the US is showing itself a false friend. Good friends occasionally tell each other the truth. Forcing Israel to behave better towards the Palestinians could in the long run be better for Israel's future.
In the case of Saudi Arabia this issue is even more clear. By starting a war against Yemen the royal family has painted itself into a corner. The main initiator of the war is crown prince Muhammad, king Salman favorite nephew. Stopping the war would be a major defeat for Muhammad. This is by excellence an opportunity for the US to show itself a true friend: by stopping all support for the war and starting humanitarian support for Yemen it could force Saudi Arabia to end its war. On the short term the Saudi's certainly would blame Obama - also in an effort to save Muhammad's face. But in the long term they would have to admit that it was the best option.
Yet this kind of behavior takes courage. And until now that has been missing.
Friday, June 19, 2015
The limits of international justice
In traditional societies conflict resolution is done by usually older men who are respected for their wisdom. As their respected status shows they are deeply rooted in their society and subscribe to its values.
In modern society judges are supposed to follow the written law. Judges have become rather anonymous people whose main accomplishment is often just finishing the right education. Yet it is not difficult to see that their verdicts are still highly influenced by the surrounding society. In racist societies verdicts of the discriminated minority tend to be harsher. And when society becomes more tolerant on issues like abortion this is reflected in the verdicts - even when the law doesn't change. Yet one thing has changed: there is now a bureaucracy behind those judges that determines who gets appointed and who gets promoted and this bureaucracy has considerable influence too.
But nowhere are judges less connected to society than in international justice. International judges are very dependent on those who appoint them and that makes their allegiance to neutral justice questionable. Recently this became apparent in two cases: the release of Sudan's president Bashir by South Africa - in spite of an extradition request by the ICC - and the 50 billion dollar verdict against Russia in the case brought by the Yukos shareholders.
Many African leaders face a similar problem that Bashir faces: insurgent regions. They may not like Bashir's bloody approach, but at the same time they know that it is not always possible to solve such problems bloodless. And so they consider that if they consent to Bashir's extradition now they might be targeted next - when Western politicians might find it useful. At the same time they have little trust in the judicial process at the ICC: they have seen the murky process in which judges are selected and they have seen judges schmoozing with Western diplomats. They also see that the US is supporting Ukraine in its use of scorched earth tactics and random shelling against the insurgence in its Eastern regions.
We see similar problems in the Yukos case. The excuse for submitting the subject to international judges and not leaving it to local judges in Russia is that some holding was stationed in Cyprus. But what would happen if the US banks and other financial companies that got a haircut in the financial crisis used their foreign subsidiaries as an excuse to take the US government to an international court? It is well known that many of the judges in those commercial cases previously worked for lawyer firms representing companies in similar cases. And when they quit as a judge these same firms may offer them a well paid consultancy job. Given this context these judges may know their laws well, but their neutrality is questionable.
Traditionally this impossibility of justice was solved by diplomacy. This approach certainly had its defects too. But one has to wonder whether the new approach is better.
In modern society judges are supposed to follow the written law. Judges have become rather anonymous people whose main accomplishment is often just finishing the right education. Yet it is not difficult to see that their verdicts are still highly influenced by the surrounding society. In racist societies verdicts of the discriminated minority tend to be harsher. And when society becomes more tolerant on issues like abortion this is reflected in the verdicts - even when the law doesn't change. Yet one thing has changed: there is now a bureaucracy behind those judges that determines who gets appointed and who gets promoted and this bureaucracy has considerable influence too.
But nowhere are judges less connected to society than in international justice. International judges are very dependent on those who appoint them and that makes their allegiance to neutral justice questionable. Recently this became apparent in two cases: the release of Sudan's president Bashir by South Africa - in spite of an extradition request by the ICC - and the 50 billion dollar verdict against Russia in the case brought by the Yukos shareholders.
Many African leaders face a similar problem that Bashir faces: insurgent regions. They may not like Bashir's bloody approach, but at the same time they know that it is not always possible to solve such problems bloodless. And so they consider that if they consent to Bashir's extradition now they might be targeted next - when Western politicians might find it useful. At the same time they have little trust in the judicial process at the ICC: they have seen the murky process in which judges are selected and they have seen judges schmoozing with Western diplomats. They also see that the US is supporting Ukraine in its use of scorched earth tactics and random shelling against the insurgence in its Eastern regions.
We see similar problems in the Yukos case. The excuse for submitting the subject to international judges and not leaving it to local judges in Russia is that some holding was stationed in Cyprus. But what would happen if the US banks and other financial companies that got a haircut in the financial crisis used their foreign subsidiaries as an excuse to take the US government to an international court? It is well known that many of the judges in those commercial cases previously worked for lawyer firms representing companies in similar cases. And when they quit as a judge these same firms may offer them a well paid consultancy job. Given this context these judges may know their laws well, but their neutrality is questionable.
Traditionally this impossibility of justice was solved by diplomacy. This approach certainly had its defects too. But one has to wonder whether the new approach is better.
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