Commentary Magazine


Topic: The Financial Times

One Big Switzerland

Gideon Rachman has a bracing column in the Financial Times in which he says that Europe has become largely irrelevant in world affairs and that’s not a bad thing. His model is Switzerland, which has prospered for centuries by standing on the sidelines of world affairs. “Europe has become a giant Switzerland,” he writes approvingly.

That’s very nice for Europe (at least for the time being), but there are a few problems with this irresponsible posture (literally irresponsible–i.e., not taking responsibility for global security) which Rachman ignores. Neutral nations may prosper but there’s a price to be paid. During World War II, when it was surrounded by Axis states, Switzerland kept itself from being occupied by two expedients.

First it created a very robust defense of the kind that Europe now lacks. The Encyclopedia Britannica notes that “it eventually mobilized 850,000 people out of a total population of 4,000,000.” Second, and less to its credit (so to speak), Switzerland agreed to provide financing and all sorts of vital supplies to the Germans. The Swiss central bank even bought gold the Nazis had looted from occupied countries right up until the end of the war. As Britannica notes, “Germany used this money–its only remaining convertible currency–to purchase missing raw materials from abroad.”

If I may use the word of the moment without fear of contradiction from some Swiss Barack Obama, I would say that Switzerland was guilty of appeasing the most heinous regime in history. Of course, it’s hard to judge Switzerland too harshly. It was, after all, a small nation and had to make some repugnant compromises to survive.

But Europe as a whole is considerably larger and theoretically more powerful. Switzerland is a country of 7.5 million people with a GDP of $413 billion. That makes it considerably smaller than California. The European Union, by contrast, has more people (491 million) and a bigger GDP ($16.3 trillion) than the United States. (All statistics are from the CIA World Factbook).

The United States, as the leader of what used to be called the Free World, can afford to have Switzerland sit on the sidelines. It’s far from clear that we can afford to have the EU sit there too. At least not without imposing on us a huge defense burden that we are having difficulty meeting in countries such as Iraq and Afghanistan where–whether the Europeans like it or not–we are fighting as much to safeguard them as ourselves.

It would not only be nice if Europeans chipped in to bear more of the burden of collective self-defense, it may well become essential. Or else the Europeans may one day wake up and find themselves in the unenviable position of tiny Switzerland, having to make dubious compromises with repugnant regimes. Of course, if you look at European relations with Russia, Iran, Syria, and other states (the latest example being French talks with Hamas), you could argue that that day has already dawned.

Gideon Rachman has a bracing column in the Financial Times in which he says that Europe has become largely irrelevant in world affairs and that’s not a bad thing. His model is Switzerland, which has prospered for centuries by standing on the sidelines of world affairs. “Europe has become a giant Switzerland,” he writes approvingly.

That’s very nice for Europe (at least for the time being), but there are a few problems with this irresponsible posture (literally irresponsible–i.e., not taking responsibility for global security) which Rachman ignores. Neutral nations may prosper but there’s a price to be paid. During World War II, when it was surrounded by Axis states, Switzerland kept itself from being occupied by two expedients.

First it created a very robust defense of the kind that Europe now lacks. The Encyclopedia Britannica notes that “it eventually mobilized 850,000 people out of a total population of 4,000,000.” Second, and less to its credit (so to speak), Switzerland agreed to provide financing and all sorts of vital supplies to the Germans. The Swiss central bank even bought gold the Nazis had looted from occupied countries right up until the end of the war. As Britannica notes, “Germany used this money–its only remaining convertible currency–to purchase missing raw materials from abroad.”

If I may use the word of the moment without fear of contradiction from some Swiss Barack Obama, I would say that Switzerland was guilty of appeasing the most heinous regime in history. Of course, it’s hard to judge Switzerland too harshly. It was, after all, a small nation and had to make some repugnant compromises to survive.

But Europe as a whole is considerably larger and theoretically more powerful. Switzerland is a country of 7.5 million people with a GDP of $413 billion. That makes it considerably smaller than California. The European Union, by contrast, has more people (491 million) and a bigger GDP ($16.3 trillion) than the United States. (All statistics are from the CIA World Factbook).

The United States, as the leader of what used to be called the Free World, can afford to have Switzerland sit on the sidelines. It’s far from clear that we can afford to have the EU sit there too. At least not without imposing on us a huge defense burden that we are having difficulty meeting in countries such as Iraq and Afghanistan where–whether the Europeans like it or not–we are fighting as much to safeguard them as ourselves.

It would not only be nice if Europeans chipped in to bear more of the burden of collective self-defense, it may well become essential. Or else the Europeans may one day wake up and find themselves in the unenviable position of tiny Switzerland, having to make dubious compromises with repugnant regimes. Of course, if you look at European relations with Russia, Iran, Syria, and other states (the latest example being French talks with Hamas), you could argue that that day has already dawned.

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Victory in Serbia

Often, when the U.S. is about to take some tough step abroad, advocates of a softer line will argue that unnecessary toughness will simply alienate foreign countries that might otherwise be friendly to us. We’ve heard endless variations of that line by those who favor withdrawal from Iraq and accommodation, rather than confrontation, with Iran, Russia, China, and other states.

It was also an argument often heard against the move to recognize Kosovo’s independence. After the U.S. and its allies went ahead, there were many dire predictions that the result would be a takeover by ultra-nationalists in Serbia. In other words, we would gain Kosovo but lose Serbia.

It didn’t work out that way in the most recent Serbian elections. As reported by the Financial Times:

The pro-European Union alliance led by Boris Tadic, Serbia’s president, won the advantage over hardline nationalists in snap elections on Sunday as voters demanded EU integration despite the loss of Kosovo.

The pro-EU list captured 38.7 per cent of votes and won 103 seats in the 250-seat parliament. The nationalist Radical party took 29.1 per cent and 77 seats, according to the Centre for Free Election and Democracy (CESID), an independent monitoring group.

That comforting result calls to mind how Serbia became democratic in the first place. It was part of the fall-out from the 1999 war waged by NATO to stop Serbian ethnic cleansing in Kosovo. Slobodan Milosevic was forced to concede defeat in that confrontation with the West, and not long thereafter he fell from power. In the case of Serbia, at least, tough Western actions–including repeated refusals to accommodate hard-line Serbian nationalists–have paid off. Is there perhaps a lesson here for other parts of the world?

Often, when the U.S. is about to take some tough step abroad, advocates of a softer line will argue that unnecessary toughness will simply alienate foreign countries that might otherwise be friendly to us. We’ve heard endless variations of that line by those who favor withdrawal from Iraq and accommodation, rather than confrontation, with Iran, Russia, China, and other states.

It was also an argument often heard against the move to recognize Kosovo’s independence. After the U.S. and its allies went ahead, there were many dire predictions that the result would be a takeover by ultra-nationalists in Serbia. In other words, we would gain Kosovo but lose Serbia.

It didn’t work out that way in the most recent Serbian elections. As reported by the Financial Times:

The pro-European Union alliance led by Boris Tadic, Serbia’s president, won the advantage over hardline nationalists in snap elections on Sunday as voters demanded EU integration despite the loss of Kosovo.

The pro-EU list captured 38.7 per cent of votes and won 103 seats in the 250-seat parliament. The nationalist Radical party took 29.1 per cent and 77 seats, according to the Centre for Free Election and Democracy (CESID), an independent monitoring group.

That comforting result calls to mind how Serbia became democratic in the first place. It was part of the fall-out from the 1999 war waged by NATO to stop Serbian ethnic cleansing in Kosovo. Slobodan Milosevic was forced to concede defeat in that confrontation with the West, and not long thereafter he fell from power. In the case of Serbia, at least, tough Western actions–including repeated refusals to accommodate hard-line Serbian nationalists–have paid off. Is there perhaps a lesson here for other parts of the world?

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IOC: Stop Bothering China

International Olympic Committee President Jacques Rogge is asking the world to stop bothering China on issues such as human rights. “You don’t obtain anything in China with a loud voice,” he said in an interview appearing Friday on the website of the Financial Times. “That is the big mistake of people in the west wanting to add their views. To keep face is of paramount importance. All the Chinese specialists will tell you that only one thing works-respectful, quiet but firm discussion.”

Really? Rogge, echoing the view of China’s Communist Party as carried in People’s Daily, was speaking in the context of protests that for more than a month have dogged the Olympic torch relay, starting with the flame-lighting ceremony in Greece. He raises the broader issue: How should the world deal with China today?

It is true that China will change on its own. The Chinese people are in the midst of the process of both shedding their self-image as outsiders and ending their traditional role as adversaries of the existing global order. There is unimaginable societal change at unheard of speed thanks to the energy and enthusiasm of China’s 1.5 billion or so restless souls. They are making a “kinetic dash into the future” without so much as a roadmap or compass. If there is any cause for optimism in the world today, it is that the Chinese people are aware, assertive, and confident.

But they are not yet in charge. Unfortunately for them, nine men in blue suits and red ties sit at the apex of political power on the Communist Party’s Politburo Standing Committee. These modern autocrats, more than anyone else, are standing in the way of transformation of the Chinese nation.

They have been able to do so and stay in power because they have been ruthlessly pragmatic. They, like all successful leaders, can be flexible when they must. In other words, they react to pressure. As Arthur Waldron has been pointing out recently, they just bowed to global sentiment by agreeing to talk to representatives of the Dalai Lama. And almost universal African defiance of Beijing’s wishes has forced China’s leaders to give up their attempt to deliver arms to the repugnant Robert Mugabe of Zimbabwe.

So if we want China to change now–and not years from now when it will be too late–the world has no choice but to convince the country’s leaders that the price of resistance is too high. Rogge is right insofar as he notes that the Chinese are concerned about world opinion. When the international community has been united in the past, Beijing has almost invariably modified its behavior. So if we want those nine Chinese autocrats to change their abhorrent policies and practices of today, we must give them no choice at this moment but to do the right thing.

International Olympic Committee President Jacques Rogge is asking the world to stop bothering China on issues such as human rights. “You don’t obtain anything in China with a loud voice,” he said in an interview appearing Friday on the website of the Financial Times. “That is the big mistake of people in the west wanting to add their views. To keep face is of paramount importance. All the Chinese specialists will tell you that only one thing works-respectful, quiet but firm discussion.”

Really? Rogge, echoing the view of China’s Communist Party as carried in People’s Daily, was speaking in the context of protests that for more than a month have dogged the Olympic torch relay, starting with the flame-lighting ceremony in Greece. He raises the broader issue: How should the world deal with China today?

It is true that China will change on its own. The Chinese people are in the midst of the process of both shedding their self-image as outsiders and ending their traditional role as adversaries of the existing global order. There is unimaginable societal change at unheard of speed thanks to the energy and enthusiasm of China’s 1.5 billion or so restless souls. They are making a “kinetic dash into the future” without so much as a roadmap or compass. If there is any cause for optimism in the world today, it is that the Chinese people are aware, assertive, and confident.

But they are not yet in charge. Unfortunately for them, nine men in blue suits and red ties sit at the apex of political power on the Communist Party’s Politburo Standing Committee. These modern autocrats, more than anyone else, are standing in the way of transformation of the Chinese nation.

They have been able to do so and stay in power because they have been ruthlessly pragmatic. They, like all successful leaders, can be flexible when they must. In other words, they react to pressure. As Arthur Waldron has been pointing out recently, they just bowed to global sentiment by agreeing to talk to representatives of the Dalai Lama. And almost universal African defiance of Beijing’s wishes has forced China’s leaders to give up their attempt to deliver arms to the repugnant Robert Mugabe of Zimbabwe.

So if we want China to change now–and not years from now when it will be too late–the world has no choice but to convince the country’s leaders that the price of resistance is too high. Rogge is right insofar as he notes that the Chinese are concerned about world opinion. When the international community has been united in the past, Beijing has almost invariably modified its behavior. So if we want those nine Chinese autocrats to change their abhorrent policies and practices of today, we must give them no choice at this moment but to do the right thing.

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Bad Decision in Bucharest

Two weeks ago, meeting in Bucharest, NATO leaders refused to offer Ukraine and Georgia a membership action plan, in large part because France and Germany feared that doing so would unduly alienate Russia. Supporters of accession (including ye olde blogger) argued that shutting the door on these two emerging democracies would only embolden Russian toward greater adventurism. Now that prediction seems to be coming true. As noted by the Financial Times,

Vladimir Putin, Russian president, signed a decree instructing the government to co-operate with the “de facto” authorities in Abkhazia and South Ossetia in economic, trade and other areas, and to recognise some documents issued by them. It said the foreign ministry should look at providing consular services to the regions’ residents.

Jaap de Hoop Scheffer, NATO secretary-general, says he is “deeply concerned by the actions Russia has taken”– and he should be. This is a major step toward official recognition of these breakaway areas of Georgia as sovereign states. That, in turn, could trigger a renewal of the fighting between Georgia and the separatists that occurred in the early 1990’s. Thus a refusal by Europe to extend its security umbrella is leading, rather predictably, to greater insecurity. Is it too late to reconsider the Bucharest summit’s ill-considered decision?

Two weeks ago, meeting in Bucharest, NATO leaders refused to offer Ukraine and Georgia a membership action plan, in large part because France and Germany feared that doing so would unduly alienate Russia. Supporters of accession (including ye olde blogger) argued that shutting the door on these two emerging democracies would only embolden Russian toward greater adventurism. Now that prediction seems to be coming true. As noted by the Financial Times,

Vladimir Putin, Russian president, signed a decree instructing the government to co-operate with the “de facto” authorities in Abkhazia and South Ossetia in economic, trade and other areas, and to recognise some documents issued by them. It said the foreign ministry should look at providing consular services to the regions’ residents.

Jaap de Hoop Scheffer, NATO secretary-general, says he is “deeply concerned by the actions Russia has taken”– and he should be. This is a major step toward official recognition of these breakaway areas of Georgia as sovereign states. That, in turn, could trigger a renewal of the fighting between Georgia and the separatists that occurred in the early 1990’s. Thus a refusal by Europe to extend its security umbrella is leading, rather predictably, to greater insecurity. Is it too late to reconsider the Bucharest summit’s ill-considered decision?

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Good(ish) News from Iran

Gianfranco Fini, the leader of the Italian conservative party Alleanza Nazionale and an ally of Silvio Berlusconi in the upcoming April 13 Italian national elections, has offered a glimpse into Italy’s foreign policy if he and Mr Berlusconi win a majority.

According to a recent report in the Financial Times, Fini called Iran the “danger of today,” and said that

the EU should take a “very tough” stand and that Italy’s position as an important European trade partner gave it extra leverage in imposing sanctions against Tehran’s nuclear programme.

This is very good news, given that Italy is Iran’s second-largest commercial partner in Europe and that its business interests mainly contribute to strategic sectors of Iran’s economy–steel, energy, and civil engineering. But Fini’s welcome remarks should come with a caveat: turning these good intentions into good practice is a different story, even if Fini and his political allies win next week. Italy is currently the principal obstacle in efforts to expand EU sanctions to target Iran’s Bank Melli, its principal commercial bank

Melli is the main conduit for financial transactions for Italian companies operating in Iran. But it’s is also the main conduit of financing for Hezbollah in Lebanon and was instrumental in funding the terror attack against the AMIA Jewish center in Argentina in 1994. Italy’s current position is that Bank Melli–evidence of misdeeds notwithstanding–cannot be touched: too many commercial interests are at stake. Will Fini and his putative prime minister Berlusconi change course?

Gianfranco Fini, the leader of the Italian conservative party Alleanza Nazionale and an ally of Silvio Berlusconi in the upcoming April 13 Italian national elections, has offered a glimpse into Italy’s foreign policy if he and Mr Berlusconi win a majority.

According to a recent report in the Financial Times, Fini called Iran the “danger of today,” and said that

the EU should take a “very tough” stand and that Italy’s position as an important European trade partner gave it extra leverage in imposing sanctions against Tehran’s nuclear programme.

This is very good news, given that Italy is Iran’s second-largest commercial partner in Europe and that its business interests mainly contribute to strategic sectors of Iran’s economy–steel, energy, and civil engineering. But Fini’s welcome remarks should come with a caveat: turning these good intentions into good practice is a different story, even if Fini and his political allies win next week. Italy is currently the principal obstacle in efforts to expand EU sanctions to target Iran’s Bank Melli, its principal commercial bank

Melli is the main conduit for financial transactions for Italian companies operating in Iran. But it’s is also the main conduit of financing for Hezbollah in Lebanon and was instrumental in funding the terror attack against the AMIA Jewish center in Argentina in 1994. Italy’s current position is that Bank Melli–evidence of misdeeds notwithstanding–cannot be touched: too many commercial interests are at stake. Will Fini and his putative prime minister Berlusconi change course?

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Fighting in Basra

I have hesitated to comment on the fighting raging in Basra, which has spilled over into other cities including Baghdad, because the shape of events is so difficult to make out from afar-or for that matter even from up close. The best analysis I have seen is this article in the Financial Times which notes that Prime Minister Nouri al Maliki is taking a major gamble by challenging the power of the Shiite militias–more like criminal gangs-which have seized control of Basra, Iraq’s second or third largest city and home to its only major port.

While most news coverage has focused on the renewed fighting as signs of impending doom–or at the very least evidence that the surge isn’t working so well–the FT correctly detects a silver lining: “If the prime minister succeeds, the pay-off would deliver a big boost to the credibility of a shaky government, proving that the growing national army is capable of taking on powerful militia.”

This gamble is long overdue. The British basically abdicated their counterinsurgency role in the south and allowed thugs to take over Basra. The police force is particularly corrupt. Maliki is now sending the Iraqi Security Forces to do what the Brits wouldn’t: clean up Dodge.

The risk of course is that Moqtada al Sadr’s Jaish al Mahdi (JAM)–one of Iraq’s largest and most threatening militias–will go to the mattresses in retaliation. There is some evidence of this happening with ultra-violent “Special Groups”, which have been loosely associated with JAM, ramping up rocket attacks on the Green Zone. There have also been clashes reported in Sadr City, Hilla, Karbala, and other Shiite areas.

But the Sadrist leadership has stuck by its promise to maintain a ceasefire, at least when it comes to operations against coalition forces. Even though some more mainstream JAM elements, not just the Special Groups, seem to be drawn into fighting against the Iraqi security forces and to a lesser extent coalition forces, that is not necessarily a bad thing. If we’re going to have a showdown, better to have it now then in the fall when there will be substantially fewer American troops on the ground.

The power of militias has been one of the most corrosive features of post-2003 Iraq. No prime minister, including Maliki, has shown much willingness or ability to take on the gunmen, because successive Iraqi governments have depended for their existence on political parties closely aligned with the militias, notably the Islamic Supreme Council of Iraq and the Sadr trend. If Maliki is now getting serious about asserting the supremacy of the Iraqi state over the militias, that is a development to be cheered. I only hope he does not lose his nerve in this hour of crisis: if well-led, the Iraqi Security Forces have the power to defeat any militia on the battlefield.

I have hesitated to comment on the fighting raging in Basra, which has spilled over into other cities including Baghdad, because the shape of events is so difficult to make out from afar-or for that matter even from up close. The best analysis I have seen is this article in the Financial Times which notes that Prime Minister Nouri al Maliki is taking a major gamble by challenging the power of the Shiite militias–more like criminal gangs-which have seized control of Basra, Iraq’s second or third largest city and home to its only major port.

While most news coverage has focused on the renewed fighting as signs of impending doom–or at the very least evidence that the surge isn’t working so well–the FT correctly detects a silver lining: “If the prime minister succeeds, the pay-off would deliver a big boost to the credibility of a shaky government, proving that the growing national army is capable of taking on powerful militia.”

This gamble is long overdue. The British basically abdicated their counterinsurgency role in the south and allowed thugs to take over Basra. The police force is particularly corrupt. Maliki is now sending the Iraqi Security Forces to do what the Brits wouldn’t: clean up Dodge.

The risk of course is that Moqtada al Sadr’s Jaish al Mahdi (JAM)–one of Iraq’s largest and most threatening militias–will go to the mattresses in retaliation. There is some evidence of this happening with ultra-violent “Special Groups”, which have been loosely associated with JAM, ramping up rocket attacks on the Green Zone. There have also been clashes reported in Sadr City, Hilla, Karbala, and other Shiite areas.

But the Sadrist leadership has stuck by its promise to maintain a ceasefire, at least when it comes to operations against coalition forces. Even though some more mainstream JAM elements, not just the Special Groups, seem to be drawn into fighting against the Iraqi security forces and to a lesser extent coalition forces, that is not necessarily a bad thing. If we’re going to have a showdown, better to have it now then in the fall when there will be substantially fewer American troops on the ground.

The power of militias has been one of the most corrosive features of post-2003 Iraq. No prime minister, including Maliki, has shown much willingness or ability to take on the gunmen, because successive Iraqi governments have depended for their existence on political parties closely aligned with the militias, notably the Islamic Supreme Council of Iraq and the Sadr trend. If Maliki is now getting serious about asserting the supremacy of the Iraqi state over the militias, that is a development to be cheered. I only hope he does not lose his nerve in this hour of crisis: if well-led, the Iraqi Security Forces have the power to defeat any militia on the battlefield.

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Russia Threatens Europe–Again

Dmitry Medvedev, who will become Russia’s next president on May 7, warned NATO about admitting two former Soviet republics. “We are not happy about the situation around Georgia and Ukraine,” he said in an interview published yesterday in the Financial Times. “We consider that it is extremely troublesome for the existing structure of European security.”

Whether troublesome to Europe or not, the two nations want the grand alliance to grant them a Membership Action Plan, the first step to admission. The United States is in favor of taking them on board. President Bush met with his Georgian counterpart last week in Washington and will travel to Kiev before attending the NATO summit in Bucharest, scheduled for the first week of next month. Putin said he will also attend the summit, but he may back out to show displeasure if the alliance proceeds with admitting the pair.

So should we poke Russia in the eye over Georgia and Ukraine? As Medvedev said to the FT, “No state can be pleased about having representatives of a military bloc to which it does not belong coming close to its borders.” Yes, Dmitry, but it’s not our fault that your nation is not a member. “NATO’s position is quite clear: democratic states in Europe have the right to aspire to, and work towards, NATO membership,” said a spokesman for the organization in Brussels. “It is their choice, not NATO’s.” Moscow is in Europe, and, if I understand the above spokesman rightly, can join. All it has to do is become a democracy—and stop threatening its neighbors. Russian admission, in short, is in the hands of the Kremlin.

Until Russia makes itself eligible for membership, NATO nations should ignore its threats and admit the two former Soviet republics. Despite what Medvedev says, it will be good for European security.

Dmitry Medvedev, who will become Russia’s next president on May 7, warned NATO about admitting two former Soviet republics. “We are not happy about the situation around Georgia and Ukraine,” he said in an interview published yesterday in the Financial Times. “We consider that it is extremely troublesome for the existing structure of European security.”

Whether troublesome to Europe or not, the two nations want the grand alliance to grant them a Membership Action Plan, the first step to admission. The United States is in favor of taking them on board. President Bush met with his Georgian counterpart last week in Washington and will travel to Kiev before attending the NATO summit in Bucharest, scheduled for the first week of next month. Putin said he will also attend the summit, but he may back out to show displeasure if the alliance proceeds with admitting the pair.

So should we poke Russia in the eye over Georgia and Ukraine? As Medvedev said to the FT, “No state can be pleased about having representatives of a military bloc to which it does not belong coming close to its borders.” Yes, Dmitry, but it’s not our fault that your nation is not a member. “NATO’s position is quite clear: democratic states in Europe have the right to aspire to, and work towards, NATO membership,” said a spokesman for the organization in Brussels. “It is their choice, not NATO’s.” Moscow is in Europe, and, if I understand the above spokesman rightly, can join. All it has to do is become a democracy—and stop threatening its neighbors. Russian admission, in short, is in the hands of the Kremlin.

Until Russia makes itself eligible for membership, NATO nations should ignore its threats and admit the two former Soviet republics. Despite what Medvedev says, it will be good for European security.

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Belgium and Baghdad

This Fareed Zakaria column complaining about the slowness of political progress in Iraq put me to mind of this article I read last week about Belgium.

What’s the connection between a small, stable democracy in Europe and a big, unstable proto-democracy in the Middle East? It may not be obvious at first glance. But it seems that not so far beneath Belgium’s placid surface lurks some major discord. In fact, it has taken Belgian politicians nine months since the last general election to finally settle on a new prime minister. That is largely due to frictions between the Francophone majority and the Fleming minority.

As the Financial Times reports:

These frictions between the country’s regions were at the heart of an embarrassing 192-day political impasse after the election. At the height of the post-poll deadlock, the longest in the country’s history, there were fears that Belgium might even split in two.

If even boring old Belgium finds it hard to reach an amicable accord between differing ethnic groups, imagine how much harder the task is in Iraq, where it’s literally a matter of life or death. Zakaria is right that ethno-sectarian tensions remain a major problem in Iraq, though I think he is wrong to say that the situation has “not improved much.” While he can quibble about the details, there is no doubt that the Iraqi parliament has passed some important reconciliation laws. Even without the passage of a hydrocarbon law, moreover, the central government still manages to share oil revenues with the provinces (though it’s true that government at all levels has problems actually spending its money).

And then there is undeniable fact that some 90,000 men, mainly Sunnis, have joined the Concerned Local Citizens groups to protect their neighborhoods against terrorists. There is no question that tensions linger between these groups and the Shiite-dominated central government. But the situation is still much better than it was a year or two ago when many of the CLC members were actively fighting against the government and its American protectors.

Zakaria is undoubtedly right that even in a best-case scenario, Iraq will require a long-term presence of Americans “in the loop” in order to safeguard the very tenuous progress being made toward a modus vivendi among the competing factions. But that beats the alternative, which is an all-out civil war. The experience of Belgium should make us realize how much patience is required when dealing with deep-rooted tensions and how agonizingly slow political progress can be. That is not, however, an argument for throwing up our hands in despair, as the Democratic presidential candidates seem to be doing.

This Fareed Zakaria column complaining about the slowness of political progress in Iraq put me to mind of this article I read last week about Belgium.

What’s the connection between a small, stable democracy in Europe and a big, unstable proto-democracy in the Middle East? It may not be obvious at first glance. But it seems that not so far beneath Belgium’s placid surface lurks some major discord. In fact, it has taken Belgian politicians nine months since the last general election to finally settle on a new prime minister. That is largely due to frictions between the Francophone majority and the Fleming minority.

As the Financial Times reports:

These frictions between the country’s regions were at the heart of an embarrassing 192-day political impasse after the election. At the height of the post-poll deadlock, the longest in the country’s history, there were fears that Belgium might even split in two.

If even boring old Belgium finds it hard to reach an amicable accord between differing ethnic groups, imagine how much harder the task is in Iraq, where it’s literally a matter of life or death. Zakaria is right that ethno-sectarian tensions remain a major problem in Iraq, though I think he is wrong to say that the situation has “not improved much.” While he can quibble about the details, there is no doubt that the Iraqi parliament has passed some important reconciliation laws. Even without the passage of a hydrocarbon law, moreover, the central government still manages to share oil revenues with the provinces (though it’s true that government at all levels has problems actually spending its money).

And then there is undeniable fact that some 90,000 men, mainly Sunnis, have joined the Concerned Local Citizens groups to protect their neighborhoods against terrorists. There is no question that tensions linger between these groups and the Shiite-dominated central government. But the situation is still much better than it was a year or two ago when many of the CLC members were actively fighting against the government and its American protectors.

Zakaria is undoubtedly right that even in a best-case scenario, Iraq will require a long-term presence of Americans “in the loop” in order to safeguard the very tenuous progress being made toward a modus vivendi among the competing factions. But that beats the alternative, which is an all-out civil war. The experience of Belgium should make us realize how much patience is required when dealing with deep-rooted tensions and how agonizingly slow political progress can be. That is not, however, an argument for throwing up our hands in despair, as the Democratic presidential candidates seem to be doing.

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Don’t Give Up on Democracy

Gideon Rachman has a good column in the Financial Times in which he argues against the fashionable impulse to ditch democracy promotion simply because President Bush is in favor of it. Rachman, hardly a firebreathing pro-democracy evangelist, says (rightly, in my view) that the problem with Bush’s democracy agenda has not been that it is too radical but that Bush has been too hesitant to back up his soaring words with appropriate actions.
But that doesn’t mean that the goal of spreading democracy should be abandoned by the U.S. or its allies. As Rachman writes:

Historical events usually throw up people who will push for political freedom at crucial moments. When such people emerge—whether they are Chinese students in Tiananmen Square, Burmese monks in Rangoon, Nelson Mandela in South Africa or Ayman Nour in Egypt—they deserve the strong support of the outside world.

Gideon Rachman has a good column in the Financial Times in which he argues against the fashionable impulse to ditch democracy promotion simply because President Bush is in favor of it. Rachman, hardly a firebreathing pro-democracy evangelist, says (rightly, in my view) that the problem with Bush’s democracy agenda has not been that it is too radical but that Bush has been too hesitant to back up his soaring words with appropriate actions.
But that doesn’t mean that the goal of spreading democracy should be abandoned by the U.S. or its allies. As Rachman writes:

Historical events usually throw up people who will push for political freedom at crucial moments. When such people emerge—whether they are Chinese students in Tiananmen Square, Burmese monks in Rangoon, Nelson Mandela in South Africa or Ayman Nour in Egypt—they deserve the strong support of the outside world.

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The New CW

The security progress in Iraq this year is so overwhelming and obvious that even critics of the war cannot gainsay it. And now, belatedly, we are seeing the inevitable political ramifications in this country of that progress. On the front page of Sunday’s New York Times, for example, we read:

As violence declines in Baghdad, the leading Democratic presidential candidates are undertaking a new and challenging balancing act on Iraq: acknowledging that success, trying to shift the focus to the lack of political progress there, and highlighting more domestic concerns like health care and the economy. Advisers to Senators Hillary Rodham Clinton and Barack Obama say that the candidates have watched security conditions improve after the troop escalation in Iraq and concluded that it would be folly not to acknowledge those gains…. While the Democratic candidates are continuing to assail the war—a popular position with many of the party’s primary voters—they run the risk that Republicans will use those critiques to attack the party’s nominee in the election as defeatist and lacking faith in the American military…. “The politics of Iraq are going to change dramatically in the general election, assuming Iraq continues to show some hopefulness,” said Michael E. O’Hanlon, a senior fellow at the Brookings Institution who is a supporter of Mrs. Clinton’s and a proponent of the military buildup. “If Iraq looks at least partly salvageable, it will be important to explain as a candidate how you would salvage it—how you would get our troops out and not lose the war. The Democrats need to be very careful with what they say and not hem themselves in.”

In the Financial Times, Clive Crook writes

Up to now, Democrats have been stinting in their recognition that the situation in Iraq has improved: “Yes, violence is down a bit, but….” That is the wrong posture. They need to celebrate the success, as long as it lasts, as enthusiastically as the Republicans. They also need to stop harrying the administration with symbolic war-funding measures demanding a timetable for rapid withdrawal, as though nothing has changed. This would take little away from their larger valid criticisms of the war and of its conduct until very recently. And it is not as though Iraq is all the Democrats have going for them in this election – they are on to a winner with healthcare. Any suspicion that they are rooting for defeat in Iraq could sink them.

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The security progress in Iraq this year is so overwhelming and obvious that even critics of the war cannot gainsay it. And now, belatedly, we are seeing the inevitable political ramifications in this country of that progress. On the front page of Sunday’s New York Times, for example, we read:

As violence declines in Baghdad, the leading Democratic presidential candidates are undertaking a new and challenging balancing act on Iraq: acknowledging that success, trying to shift the focus to the lack of political progress there, and highlighting more domestic concerns like health care and the economy. Advisers to Senators Hillary Rodham Clinton and Barack Obama say that the candidates have watched security conditions improve after the troop escalation in Iraq and concluded that it would be folly not to acknowledge those gains…. While the Democratic candidates are continuing to assail the war—a popular position with many of the party’s primary voters—they run the risk that Republicans will use those critiques to attack the party’s nominee in the election as defeatist and lacking faith in the American military…. “The politics of Iraq are going to change dramatically in the general election, assuming Iraq continues to show some hopefulness,” said Michael E. O’Hanlon, a senior fellow at the Brookings Institution who is a supporter of Mrs. Clinton’s and a proponent of the military buildup. “If Iraq looks at least partly salvageable, it will be important to explain as a candidate how you would salvage it—how you would get our troops out and not lose the war. The Democrats need to be very careful with what they say and not hem themselves in.”

In the Financial Times, Clive Crook writes

Up to now, Democrats have been stinting in their recognition that the situation in Iraq has improved: “Yes, violence is down a bit, but….” That is the wrong posture. They need to celebrate the success, as long as it lasts, as enthusiastically as the Republicans. They also need to stop harrying the administration with symbolic war-funding measures demanding a timetable for rapid withdrawal, as though nothing has changed. This would take little away from their larger valid criticisms of the war and of its conduct until very recently. And it is not as though Iraq is all the Democrats have going for them in this election – they are on to a winner with healthcare. Any suspicion that they are rooting for defeat in Iraq could sink them.

And in Newsweek Charles Peters, founder of the Washington Monthly, writes

I have been troubled by the reluctance of my fellow liberals to acknowledge the progress made in Iraq in the last six months, a reluctance I am embarrassed to admit that I have shared. Giving Gen. David Petraeus his due does not mean we have to start saying it was a great idea to invade Iraq. It remains the terrible idea it always was. And the occupation that followed has been until recently a continuing disaster, causing the death or maiming of far too many American soldiers and Iraqi civilians. Still, the fact is that the situation in Iraq, though some violence persists, is much improved since the summer. Why do liberals not want to face this fact, let alone ponder its implications?

These accounts reinforce what some observers have been saying for months now: the Democratic Party crossed into treacherous political territory when its leadership declared the “surge” to be lost even before it was in place. This mistake was compounded when scores of Democrats denied, and even seemed to get agitated at, the progress the United States military was making in Iraq; when Democrats went out of their way to attack the credibility of General David Petraeus, the architect of our success there; and when they persisted, and continue to persist, in their attempts to subvert a military strategy that is showing extraordinary gains.

The better things got in Iraq, the more frantic the Democratic leadership seemed to get. While it is entirely legitimate for Democrats to criticize the Bush administration’s mistakes in Iraq, and while it was also understandable for them to be skeptical about the progress in the early part of this year, given the false summits we have experienced, what was unpardonable, according to Christopher Hitchens, was “the dank and sinister impression [liberals and Democrats] give that the worse the tidings, the better they would be pleased.”

That this happened at all ranks among the most disheartening and disturbing political developments we have seen. That there will be an accounting for it is only just—and, perhaps, only now a matter of time.

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Mixed Message on Iran

I recently spent a week in the United Arab Emirates and Saudi Arabia as part of a delegation of American policy wonks and former government officials organized by the Center for Strategic and International Studies. One of the big subjects of our discussions with Emiratis and Saudis, both in government and out of it, was the looming threat from Iran, which is felt keenly by its Sunni neighbors.

All agreed that Iran is a major menace. There was disagreement about whether military action is warranted; many said they dreaded the prospect of another war, but many others (including senior government officials) said that a prophylactic air strike was better than the alternative—a nuclear Iran dominating the region.

Whatever you think about the desirability of a preemptive strike, one thing is clear: it would be the height of foolishness for the United States to take that option off the table. Only if the mullahs think they face a serious military threat are they likely to slow down their quest for the bomb.

Thus it was puzzling to see Admiral William Fallon, head of U.S. Central Command, telling the Financial Times that, as the headline had it, “U.S. strike on Iran ‘not being prepared.’” The content of the article was a bit more complex: while Fallon was quoted as saying that a strike is not “in the offing,” he continued, “That said, we have to make sure there is no mistake on the part of the Iranians about our resolve in tending to business in the region.”

The Iranians can be forgiven for having grave doubts about U.S. resolve, however, when the senior U.S. military figure in the region is going out of his way to assure them that their threatening actions will not result in American military action.

I recently spent a week in the United Arab Emirates and Saudi Arabia as part of a delegation of American policy wonks and former government officials organized by the Center for Strategic and International Studies. One of the big subjects of our discussions with Emiratis and Saudis, both in government and out of it, was the looming threat from Iran, which is felt keenly by its Sunni neighbors.

All agreed that Iran is a major menace. There was disagreement about whether military action is warranted; many said they dreaded the prospect of another war, but many others (including senior government officials) said that a prophylactic air strike was better than the alternative—a nuclear Iran dominating the region.

Whatever you think about the desirability of a preemptive strike, one thing is clear: it would be the height of foolishness for the United States to take that option off the table. Only if the mullahs think they face a serious military threat are they likely to slow down their quest for the bomb.

Thus it was puzzling to see Admiral William Fallon, head of U.S. Central Command, telling the Financial Times that, as the headline had it, “U.S. strike on Iran ‘not being prepared.’” The content of the article was a bit more complex: while Fallon was quoted as saying that a strike is not “in the offing,” he continued, “That said, we have to make sure there is no mistake on the part of the Iranians about our resolve in tending to business in the region.”

The Iranians can be forgiven for having grave doubts about U.S. resolve, however, when the senior U.S. military figure in the region is going out of his way to assure them that their threatening actions will not result in American military action.

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Whose New Gilded Age?

The New York Times recently ran a lead Sunday Magazine article on the “The New Gilded Age.” The article tastefully failed to note that most of the monied people discussed were Democrats. It’s further evidence, I’d say, that liberal Democrats are having a hard time owning up to the nature of their party. In his new book The Squandering of America (reviewed in the November issue of COMMENTARY), liberal economist Robert Kuttner describes his dismay at discovering that the liberal wing of the Democratic Party has gone upscale. “I have attended Democratic fund-raising events in the Park Avenue homes of investment bankers,” he writes, “where there was plenty of enthusiasm for human rights, morning-after pills, and climate change, but nary a word about financial regulation or social investment.” Kuttner’s ideological soulmate, New York Times columnist Paul Krugman, lodges a similar complaint about the Democrats’ refusal to close “the hedge fund tax loophole—which allows executives at private equity firms and hedge funds to pay a tax rate of only 15 percent on most of their income.” The Democrats, he concludes are “wobbled by wealth.”

What’s striking about their complaints is that none of this is new. Writing in COMMENTARY in 1972, Joshua Muravchik and the late Penn Kemble noted that “The purpose of the McGovern quotas (for the delegations to the Democratic National Convention) was not to make the convention more representative of the Democratic electorate as a whole, but to favor the affluent liberals within the party and to diminish the influence of its lower-middle and working-class constituents.” The McGovernites succeeded and the Democrats became far more of an upper-middle-class party.

And they’ve only become more of one since then. Michael Franc of the Heritage Foundation, writing yesterday in the Financial Times, notes that “Democrats now control the majority of the nation’s wealthiest congressional jurisdictions. More than half of the wealthiest households are concentrated in the eighteen states where Democrats control both Senate seats.” This pattern holds in the House as well. Iowa’s three richest districts are represented by Democrats, the two poorest by Republicans. House Speaker Nancy Pelosi represents a San Francisco district containing more than six times as many high-end households as her Republic counterpart, John Boehner. Nor is this just a matter of wealth. Democrats, notes economist Joel Kotkin, predominate in San Francisco, New York, and Los Angeles, where income inequality is the most pronounced in the nation.
“The demographic reality is that, in America,” says Franc, the Democratic Party is the new “party of the rich.” The question for 2008 is whether that economic reality will enter into the political debate.

The New York Times recently ran a lead Sunday Magazine article on the “The New Gilded Age.” The article tastefully failed to note that most of the monied people discussed were Democrats. It’s further evidence, I’d say, that liberal Democrats are having a hard time owning up to the nature of their party. In his new book The Squandering of America (reviewed in the November issue of COMMENTARY), liberal economist Robert Kuttner describes his dismay at discovering that the liberal wing of the Democratic Party has gone upscale. “I have attended Democratic fund-raising events in the Park Avenue homes of investment bankers,” he writes, “where there was plenty of enthusiasm for human rights, morning-after pills, and climate change, but nary a word about financial regulation or social investment.” Kuttner’s ideological soulmate, New York Times columnist Paul Krugman, lodges a similar complaint about the Democrats’ refusal to close “the hedge fund tax loophole—which allows executives at private equity firms and hedge funds to pay a tax rate of only 15 percent on most of their income.” The Democrats, he concludes are “wobbled by wealth.”

What’s striking about their complaints is that none of this is new. Writing in COMMENTARY in 1972, Joshua Muravchik and the late Penn Kemble noted that “The purpose of the McGovern quotas (for the delegations to the Democratic National Convention) was not to make the convention more representative of the Democratic electorate as a whole, but to favor the affluent liberals within the party and to diminish the influence of its lower-middle and working-class constituents.” The McGovernites succeeded and the Democrats became far more of an upper-middle-class party.

And they’ve only become more of one since then. Michael Franc of the Heritage Foundation, writing yesterday in the Financial Times, notes that “Democrats now control the majority of the nation’s wealthiest congressional jurisdictions. More than half of the wealthiest households are concentrated in the eighteen states where Democrats control both Senate seats.” This pattern holds in the House as well. Iowa’s three richest districts are represented by Democrats, the two poorest by Republicans. House Speaker Nancy Pelosi represents a San Francisco district containing more than six times as many high-end households as her Republic counterpart, John Boehner. Nor is this just a matter of wealth. Democrats, notes economist Joel Kotkin, predominate in San Francisco, New York, and Los Angeles, where income inequality is the most pronounced in the nation.
“The demographic reality is that, in America,” says Franc, the Democratic Party is the new “party of the rich.” The question for 2008 is whether that economic reality will enter into the political debate.

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Susceptible to Cyber-Terror

Gabe Schoenfeld has written skeptically about the new Defense Science Board study, which raises alarms about the Department of Defense’s vulnerability to cyber-attacks, especially in light of the fact that so much of our software code is written abroad, “some in countries that may have interests inimical to those of the United States.”

Gabe wonders:

If our adversaries are as good as we are saying they are at exploiting vulnerabilities in our technology, why are their brilliant programmers not going off on freelance missions to tap in, say, to the electronic systems of a Goldman Sachs and transferring its assets to themselves?

The short answer is they are doing precisely that. It’s just that the public doesn’t hear much about it because the targeted institutions want to keep as quiet as possible for obvious reasons, so as not to encourage copycats and not to endanger the confidence of their clients, investors, and counterparties.

The Financial Times broke the story of one such attack that occurred in 2005. Israeli-Russian mobsters based in Tel Aviv succeeded in hacking into the London offices of the Japanese bank Sumitomo, and almost managed to transfer some $500 million to their own bank accounts. According to one account, this was how the operation was carried out:

Thieves masquerading as cleaning staff with the help of a security guard installed hardware keystroke loggers on computers within the London branch of Sumitomo Mitsui, a huge Japanese bank.

These computers evidently belonged to help desk personnel. The keystroke loggers captured everything typed into the computer including, of course, administrative passwords for remote access.

By installing software keystroke loggers on the PC’s that belonged to the bank personnel responsible for wire transfers over the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network, the thieves captured credentials that were then used to transfer 220 million pounds (call it half-a-billion dollars).

These thieves were nabbed in time by Scotland Yard, but if they had succeeded it would have been the greatest bank robbery of all time.

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Gabe Schoenfeld has written skeptically about the new Defense Science Board study, which raises alarms about the Department of Defense’s vulnerability to cyber-attacks, especially in light of the fact that so much of our software code is written abroad, “some in countries that may have interests inimical to those of the United States.”

Gabe wonders:

If our adversaries are as good as we are saying they are at exploiting vulnerabilities in our technology, why are their brilliant programmers not going off on freelance missions to tap in, say, to the electronic systems of a Goldman Sachs and transferring its assets to themselves?

The short answer is they are doing precisely that. It’s just that the public doesn’t hear much about it because the targeted institutions want to keep as quiet as possible for obvious reasons, so as not to encourage copycats and not to endanger the confidence of their clients, investors, and counterparties.

The Financial Times broke the story of one such attack that occurred in 2005. Israeli-Russian mobsters based in Tel Aviv succeeded in hacking into the London offices of the Japanese bank Sumitomo, and almost managed to transfer some $500 million to their own bank accounts. According to one account, this was how the operation was carried out:

Thieves masquerading as cleaning staff with the help of a security guard installed hardware keystroke loggers on computers within the London branch of Sumitomo Mitsui, a huge Japanese bank.

These computers evidently belonged to help desk personnel. The keystroke loggers captured everything typed into the computer including, of course, administrative passwords for remote access.

By installing software keystroke loggers on the PC’s that belonged to the bank personnel responsible for wire transfers over the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network, the thieves captured credentials that were then used to transfer 220 million pounds (call it half-a-billion dollars).

These thieves were nabbed in time by Scotland Yard, but if they had succeeded it would have been the greatest bank robbery of all time.

There are also, of course, countless cyber-attacks being carried out every day against the information infrastructure of the U.S. and our allies. The most famous of these was the assault by Russian hackers on Estonia’s computers earlier this year. (For details, see here.)

The U.S. is just as vulnerable to such an attack. In fact, as Ralph Peters argues in this New York Post column, our reliance on computer networks and satellites constitutes one of our biggest strategic vulnerabilities. He calls it a “ ‘high-tech’ Maginot Line,” and I would have to agree with him.

The comparison may seem overwrought, but only because no enemy has tried to exploit this vulnerability in a major way. Yet. We do know, however, that China, Russia, and various non-state actors are working to ramp up their capabilities in this sphere. We’d better step up our defenses, or else face the prospect of many of our super-expensive weapons and surveillance systems being rendered useless in a war. There is also the very real threat of cyber-terrorism wreaking havoc with our financial systems. Just imagine what would happen if the fidelity of banking or trading records were compromised on a massive scale: That could be a more severe blow to our economy than the loss of the World Trade Center.

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Where is Our True Policy?

Is it any wonder the world has difficulty making sense of Washington’s loudly proclaimed support for democracy and freedom? Consider the following: the headline, in the Financial Times of September 8-9, reads “Bush’s fury at [a certain Asian] regime.” Now try to guess which country is the object of his indignation.

According to the report, “President George W. Bush, who is in Sydney, called for the regime to ‘stop arresting, harassing, and assaulting pro-democracy activists for organizing or participating in peaceful demonstrations.’”

The regime in question, meanwhile, has alleged that “external, anti-government groups” were trying to foment uprising and warned that: “The people will not accept any acts to destabilize the nation and harm their interests and are willing to prevent such destructive acts.”

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Is it any wonder the world has difficulty making sense of Washington’s loudly proclaimed support for democracy and freedom? Consider the following: the headline, in the Financial Times of September 8-9, reads “Bush’s fury at [a certain Asian] regime.” Now try to guess which country is the object of his indignation.

According to the report, “President George W. Bush, who is in Sydney, called for the regime to ‘stop arresting, harassing, and assaulting pro-democracy activists for organizing or participating in peaceful demonstrations.’”

The regime in question, meanwhile, has alleged that “external, anti-government groups” were trying to foment uprising and warned that: “The people will not accept any acts to destabilize the nation and harm their interests and are willing to prevent such destructive acts.”

The article could easily be about China. The authorities in Beijing constantly “arrest, harass, and assault” pro-democracy activists and many others, and back up their intent to prevent “acts to destabilize the nation” with massive censorship, internet and cell-phone monitoring, and the deployment of tens of thousands of secret police and paramilitary People’s Armed Police. And they regularly blame “foreign forces” for what are actually indigenous Chinese demands for freedom.

But of course the country in question is not China. It is Burma, which has an ugly military regime that China supports. Yet in spite of the fact that the behaviors of the regimes in Burma and China are nearly identical, the United States regularly scolds and sanctions the Burmese regime, while embracing and engaging the government in China.

So angry is Bush with Burma that he has “excluded its military leader from a planned summit between the U.S. and the Association of Southeast Asian Nations in Texas.” Yet a day before announcing this, the same President Bush had a cordial talk with (unelected) Chinese President Hu Jintao. Unlike Burmese pariah Than Shwe, Hu was welcomed warmly in Washington last April. In Sydney two days ago, Mr. Bush accepted Hu’s invitation to attend the Olympics next year—in drum-tight Beijing, from which city many dissidents and activists have already been expelled, a year ahead of the games.

To confuse things even further, on August 27, evidently facing not-so-veiled military threats from China, top Bush administration officials administered unprecedented public scoldings to the elected government of Taiwan for planning a referendum about applying to the United Nations. But then last Thursday Bush seemed to reverse that position in a speech that called Taiwan’s evolution to democracy “one of the great stories of our time.”

Where is our true policy in this muddle? If we genuinely value democracy, why are we so ambivalent and self-contradictory about its practice in Taiwan? If dictatorships are best treated by engagement and dialogue, as with China, then why doesn’t the administration reach out to Burma to break its diplomatic isolation? But if pressure and quarantine are the right approach to autocracies, as our Burma policy suggests, then why doesn’t Mr. Bush rethink his plan to visit Beijing? The administration should strive for more consistency in its policies.

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Wall Street Populism

Can Democrats be the party of both economic populism and Wall Street? Can they recreate the kind of big tent that allowed Lyndon Johnson to trounce Barry Goldwater in 1964? The answer appears, at the moment, to be yes. The Democrats, more and more, are being funded by those in the financial sector who have benefited the most from globalization, without losing the support of blue-collar workers fearful of globalization’s effects. If the Democrats can hold this broad coalition together, they may be in a position to win a 1964-like victory in 2008.

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Can Democrats be the party of both economic populism and Wall Street? Can they recreate the kind of big tent that allowed Lyndon Johnson to trounce Barry Goldwater in 1964? The answer appears, at the moment, to be yes. The Democrats, more and more, are being funded by those in the financial sector who have benefited the most from globalization, without losing the support of blue-collar workers fearful of globalization’s effects. If the Democrats can hold this broad coalition together, they may be in a position to win a 1964-like victory in 2008.

Democrats on Capitol Hill are calling for higher taxes on the wealthy and tougher tax treatment for private equity firms, like the Blackstone Group, which have become the symbol of growing economic inequality. But this hasn’t hurt the party at all when it comes to fundraising. Perhaps because social issues, not social class, have come increasingly to define what it means to be a Democrat or Republican.

This shift from economic to cultural issues over the last 40 years has scrambled the political landscape. In the 1980’s, 70 percent of the upper quintile of American income earners voted for the GOP. But in the 2006 Congressional elections, the Democrats ran nearly even with Republicans among voters who earned more than $100,000 per year. And among the very wealthy, notes the Financial Times, the “balance of power” has shifted in favor of the Democrats. Young hedge fund tyros and other well-to-do professionals have given the Democrats a substantial fund-raising lead over the Republicans. Barack Obama, who has become increasingly critical of free trade and demands higher taxes on the wealthy, has widespread support in the world of finance, including the hedge fund managers George Soros, Eric Mindich, Paul Tudor Jones, and Daniel Loeb. In the second quarter of 2007, Democratic presidential candidates raised $80 million to their GOP counterparts’ $50 million. Obama alone raised almost $33 million, nearly twice the amount raised by Rudy Giuliani, the leading Republican.

Can a party with such close ties to Wall Street effectively court blue-collar workers? It can, if those workers are fearful of free trade. The unprecedented growth of international trade in recent years has been a boon for the overall economy. But it has also constrained wage growth and induced considerable working-class anxiety. In Ohio’s 2006 mid-term Senate election, Sherrod Brown, running largely on the trade issue, unseated Senator Mike DeWine. Democrats see that race as a potential model for 2008.

The other large arrows in the Democrat’s populist quiver are the public’s hostility to both the energy and pharmaceutical industries, as well as growing worries about the cost of health care. And while there may be tension between those in the risk-loving financial sector and increasingly risk-averse workers, in the short run it can be eased with the promise of higher taxes on the wealthy, to fund (among other things) more health care coverage for the middle class.

Taken together with trade fears, these arrows form a formidable arsenal, one that might well allow Democrats to create a version of their 1964 coalition, in which big business and New Deal liberals marched side-by-side. There are sizable fault lines inherent in such a coalition: just imagine the potential conflicts between green CEO’s driving hybrid limos and workers displaced by environmental over-regulation. But it’s unlikely that a conventional Republican campaign can exploit those weaknesses. As it now stands, on these issues the GOP is marching toward a precipice. (Perhaps it can take solace in the fact that the grand coalition of ’64 quickly fell apart.)

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What China Doesn’t Want Us to Know

Today the Financial Times reports that, at Beijing’s insistence, the World Bank deleted almost a third of its new study, “Cost of Pollution in China.” Senior cadres were concerned that the World Bank’s most startling conclusion—that bad air and bad water cause about 750,000 premature deaths in China each year—“could cause misunderstanding.” “We did not want to make this report too thick,” said the considerate Guo Xiaomin, who, as a former official from the horribly misnamed State Environmental Protection Agency, coordinated Chinese research for the project.

A pared-down version of the study, which is still in draft, is available without the sensitive death estimate. The World Bank told Agence France Presse that the final report is “still under review.”

It is hardly a surprise when Chinese autocrats insist upon the removal of information that “could cause social unrest,” to borrow the words of an adviser who worked on the study. But the World Bank has no business acceding to such demands. China’s environmental degradation not only kills Chinese; it is beginning to affect our own health as well. The country is air-mailing pollutants half-way around the world, and is now the world’s largest emitter of CO2, the main greenhouse gas.

With the help of the World Bank, China’s Communists have now managed to export not only pollution but their governing principles of censorship, secrecy, and unaccountability.

Today the Financial Times reports that, at Beijing’s insistence, the World Bank deleted almost a third of its new study, “Cost of Pollution in China.” Senior cadres were concerned that the World Bank’s most startling conclusion—that bad air and bad water cause about 750,000 premature deaths in China each year—“could cause misunderstanding.” “We did not want to make this report too thick,” said the considerate Guo Xiaomin, who, as a former official from the horribly misnamed State Environmental Protection Agency, coordinated Chinese research for the project.

A pared-down version of the study, which is still in draft, is available without the sensitive death estimate. The World Bank told Agence France Presse that the final report is “still under review.”

It is hardly a surprise when Chinese autocrats insist upon the removal of information that “could cause social unrest,” to borrow the words of an adviser who worked on the study. But the World Bank has no business acceding to such demands. China’s environmental degradation not only kills Chinese; it is beginning to affect our own health as well. The country is air-mailing pollutants half-way around the world, and is now the world’s largest emitter of CO2, the main greenhouse gas.

With the help of the World Bank, China’s Communists have now managed to export not only pollution but their governing principles of censorship, secrecy, and unaccountability.

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Tough Diplomacy

I agree with Max Boot that the administration’s deal with North Korea sounds like a sell-out. The giveaway was Condi Rice’s pledge of “tough diplomacy.” What in the world is that? And what kind of diplomacy do we usually practice, soft diplomacy? How does that work? “Welcome to the store, Mr. Kim. Help yourself to whatever tickles your fancy. It’s on the house.” Well, if that’s soft diplomacy, how is our recent exercise in “tough diplomacy” any different?

To give the administration its due, the North Korean knot is plenty vexing. Since Pyongyang now has a nuclear bomb, military action becomes dicier than it already was with Seoul in range of thousands of North Korean artillery pieces. We have no economic leverage to speak of, and while no country on earth is a worthier candidate for regime change than North Korea, we have almost no ability to influence its internal politics.

This is one more reason why we must bomb Iran before it completes its nuclear weapon. An internal EU report, leaked to the Financial Times on Tuesday, acknowledges that “the problems with Iran will not be resolved through economic sanctions alone.” The “tough sanctions” that the administration talks about are just as spurious as “tough diplomacy.”

“The EU has agreed to pursue sanctions through the United Nations if the Iranians continues [sic] to reject the decisions of the IAEA Board and the UN Security Council,” says the report. The trick to this formulation is that it means the Europeans are prepared only for sanctions adopted by the Security Council, i.e., only sanctions that Russia and China will agree to. But as Russian President Vladimir Putin made clear last week, and Beijing has made clear often, they regard the U.S. as a bigger threat to their ambitions than Iran. They will not cooperate in tightening the vise on Tehran. And even if they did, it is extremely doubtful that Ahmadinejad, Khameini, et. al., will give up their birthright to dominate the Islamic world (or perhaps rule the whole world) for a mess of economic inducements.

I have explained elsewhere why the emptiness of other measures to stop Iran’s bomb and the terrible consequences that would ensue from a nuclear-armed Iran lead to only one conclusion: military action. But here is one more reason. Bombing Iran to destroy its nuclear weapons facilities is one way—perhaps the only way—to turn Pyongyang around. Kim Jong Il would no longer sleep easily worrying about whether his turn was next and might finally agree to trade in his nukes. Now that is what I call tough diplomacy.

I agree with Max Boot that the administration’s deal with North Korea sounds like a sell-out. The giveaway was Condi Rice’s pledge of “tough diplomacy.” What in the world is that? And what kind of diplomacy do we usually practice, soft diplomacy? How does that work? “Welcome to the store, Mr. Kim. Help yourself to whatever tickles your fancy. It’s on the house.” Well, if that’s soft diplomacy, how is our recent exercise in “tough diplomacy” any different?

To give the administration its due, the North Korean knot is plenty vexing. Since Pyongyang now has a nuclear bomb, military action becomes dicier than it already was with Seoul in range of thousands of North Korean artillery pieces. We have no economic leverage to speak of, and while no country on earth is a worthier candidate for regime change than North Korea, we have almost no ability to influence its internal politics.

This is one more reason why we must bomb Iran before it completes its nuclear weapon. An internal EU report, leaked to the Financial Times on Tuesday, acknowledges that “the problems with Iran will not be resolved through economic sanctions alone.” The “tough sanctions” that the administration talks about are just as spurious as “tough diplomacy.”

“The EU has agreed to pursue sanctions through the United Nations if the Iranians continues [sic] to reject the decisions of the IAEA Board and the UN Security Council,” says the report. The trick to this formulation is that it means the Europeans are prepared only for sanctions adopted by the Security Council, i.e., only sanctions that Russia and China will agree to. But as Russian President Vladimir Putin made clear last week, and Beijing has made clear often, they regard the U.S. as a bigger threat to their ambitions than Iran. They will not cooperate in tightening the vise on Tehran. And even if they did, it is extremely doubtful that Ahmadinejad, Khameini, et. al., will give up their birthright to dominate the Islamic world (or perhaps rule the whole world) for a mess of economic inducements.

I have explained elsewhere why the emptiness of other measures to stop Iran’s bomb and the terrible consequences that would ensue from a nuclear-armed Iran lead to only one conclusion: military action. But here is one more reason. Bombing Iran to destroy its nuclear weapons facilities is one way—perhaps the only way—to turn Pyongyang around. Kim Jong Il would no longer sleep easily worrying about whether his turn was next and might finally agree to trade in his nukes. Now that is what I call tough diplomacy.

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Freedom House v. Anatol Lieven

Anatol Lieven—a senior research fellow at the New America Foundation and the co-author of Ethical Realism: A Vision of America’s Role in the World—has emerged in recent years as one of the more relentless critics of democratization as a core project of U.S. foreign policy. The latest effort in his anti-democratization campaign is a January 26 column published in the Financial Times in response to Freedom House’s recently released annual index of global political rights and civil liberties, Freedom in the World. (contentions blogger Joshua Muravchik wrote about the Washington Post‘s own attempt to spin this report here.) Lieven levels a number of serious charges at Freedom House and democracy advocates in general. Let’s examine these charges, one by one:

1. Democracy advocates, presumably including Freedom House, have exaggerated the impact of the elections in Iraq.

In its reports and findings on Iraq, Freedom House has consistently stressed the high incidence there of violence, terrorism, and sectarian strife. Freedom House has never described Iraq as a democracy or as a free society, and the country’s rating has remained “not free” throughout the period of occupation.

2. Freedom House distorts its findings to suit the ideological leanings of the American government.

Only someone who has not read Freedom in the World carefully could come to this conclusion. The latest index suggests that, far from being on the march, freedom has entered a period of stagnation, with very little progress in recent years—a conclusion hardly in line with the ideological leanings of the Bush administration.

3. Freedom House gives the United States the highest possible freedom score while judging other countries by the degree of their alliance with America.

The United States does, indeed, receive the highest possible rating—as do practically all the countries of Western Europe. One feels almost ridiculous in pointing out that a number of these countries—for starters, France, Spain, and Germany—have had sharp differences with America over its foreign policy in recent years. At the same time, Freedom in the World gives low scores to such American allies or “partners” as Saudi Arabia, Pakistan, Egypt, Azerbaijan, and Kazakhstan.

4. Freedom House does not appreciate the levels of freedom in China and Russia.

China devotes billions of dollars to the political censorship of the Internet. The authorities regularly imprison journalists, human-rights lawyers, and ordinary citizens seeking redress in cases of official abuse of power. Russia is moving precipitously in the wrong direction in almost every sphere of freedom. (For a detailed look at Russia’s regression, see Leon Aron’s What Does Putin Want? in the December issue of COMMENTARY.) What, exactly, are we meant to appreciate?

5. Freedom House has a narrow and extremist definition of freedom that fails to consider political developments leading to “a real sense of individual rights and personal liberty.”

Again, had Lieven read the report more carefully, he would have learned that Freedom House stresses precisely those institutions that are the key guarantors of “individual rights and personal liberty.” The issues of concern singled out in the report include the global decline in freedom of expression and the press, the widespread failure to create the effective rule of law, and rampant corruption.

Anatol Lieven calls himself an “ethical realist.” The “realist” component of this description seems to consist in his support of “benevolent” autocrats the globe over. Where the “ethical” comes in, given his slipshod reporting of the contents of Freedom in the World, remains rather mysterious.

Anatol Lieven—a senior research fellow at the New America Foundation and the co-author of Ethical Realism: A Vision of America’s Role in the World—has emerged in recent years as one of the more relentless critics of democratization as a core project of U.S. foreign policy. The latest effort in his anti-democratization campaign is a January 26 column published in the Financial Times in response to Freedom House’s recently released annual index of global political rights and civil liberties, Freedom in the World. (contentions blogger Joshua Muravchik wrote about the Washington Post‘s own attempt to spin this report here.) Lieven levels a number of serious charges at Freedom House and democracy advocates in general. Let’s examine these charges, one by one:

1. Democracy advocates, presumably including Freedom House, have exaggerated the impact of the elections in Iraq.

In its reports and findings on Iraq, Freedom House has consistently stressed the high incidence there of violence, terrorism, and sectarian strife. Freedom House has never described Iraq as a democracy or as a free society, and the country’s rating has remained “not free” throughout the period of occupation.

2. Freedom House distorts its findings to suit the ideological leanings of the American government.

Only someone who has not read Freedom in the World carefully could come to this conclusion. The latest index suggests that, far from being on the march, freedom has entered a period of stagnation, with very little progress in recent years—a conclusion hardly in line with the ideological leanings of the Bush administration.

3. Freedom House gives the United States the highest possible freedom score while judging other countries by the degree of their alliance with America.

The United States does, indeed, receive the highest possible rating—as do practically all the countries of Western Europe. One feels almost ridiculous in pointing out that a number of these countries—for starters, France, Spain, and Germany—have had sharp differences with America over its foreign policy in recent years. At the same time, Freedom in the World gives low scores to such American allies or “partners” as Saudi Arabia, Pakistan, Egypt, Azerbaijan, and Kazakhstan.

4. Freedom House does not appreciate the levels of freedom in China and Russia.

China devotes billions of dollars to the political censorship of the Internet. The authorities regularly imprison journalists, human-rights lawyers, and ordinary citizens seeking redress in cases of official abuse of power. Russia is moving precipitously in the wrong direction in almost every sphere of freedom. (For a detailed look at Russia’s regression, see Leon Aron’s What Does Putin Want? in the December issue of COMMENTARY.) What, exactly, are we meant to appreciate?

5. Freedom House has a narrow and extremist definition of freedom that fails to consider political developments leading to “a real sense of individual rights and personal liberty.”

Again, had Lieven read the report more carefully, he would have learned that Freedom House stresses precisely those institutions that are the key guarantors of “individual rights and personal liberty.” The issues of concern singled out in the report include the global decline in freedom of expression and the press, the widespread failure to create the effective rule of law, and rampant corruption.

Anatol Lieven calls himself an “ethical realist.” The “realist” component of this description seems to consist in his support of “benevolent” autocrats the globe over. Where the “ethical” comes in, given his slipshod reporting of the contents of Freedom in the World, remains rather mysterious.

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