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SHORTER Max Boot: "Iraqi Prime Minister Maliki doesn't know his place - he needs to listen to us conservatives as we tell him what's good for his country."
I suppose this is a common view among the conservatives desperate to continue the war and occupation in the Middle East, but honestly, one could hope for an opinion that was less sneeringly condescendent toward other nations' politically-appointed leaders.
When initially confronted with the Iraq government's repeated statements regarding timelines and horizons for the withdrawal of US forces, McCain assured us that this wasn't really what they wanted. He knew better.
I have been there too many times. I've met too many times with him, and I know what they want. They want it based on conditions and of course they would like to have us out, that's what happens when you win wars, you leave...But the fact is that it should be -- the agreement between Prime Minister Maliki, the Iraqi government and the United states is it will be based on conditions.
Looking over this statement from Michael Goldfarb, one is left wondering whether Maliki and McCain have the same understanding of "conditions":
The deputy director of communications for the McCain 2008 campaign, Michael Goldfarb, yesterday said, "John McCain has said he will only support a withdrawal based on conditions on the ground. It is our belief that the Iraqi leaders share that view. The disposition of a sovereign, democratically elected government is one of the conditions that will be taken into account." [emphasis added]
Got that Maliki: We'll take your opinion under advisement - though this guy gets the ultimate say. So much for sovereignty, huh. And so much for this:
Question: "What would or should we do if, in the post-June 30th period, a so-called sovereign Iraqi government asks us to leave, even if we are unhappy about the security situation there?"
McCain's Answer: "Well, if that scenario evolves than I think it's obvious that we would have to leave because -- if it was an elected government of Iraq, and we've been asked to leave other places in the world. If it were an extremist government then I think we would have other challenges, but I don't see how we could stay when our whole emphasis and policy has been based on turning the Iraqi government over to the Iraqi people."
Truthy!
[UPDATE: Via Spacktackular, Matt Delong passes along this from Randy Scheunemann reiterating the Goldfarbian view of Iraqi sovereignty]
For years I have been seeking to dispel the notion that the Sadrists are "vassals" of Iran, whereas Maliki's Dawa Party and ISCI (both either formed by, aided by and/or housed in Iran for most of the 80s and 90s) were independent from, if not hostile to, that nation. The origin of this misinformation dates to the moment that the Bush administration gauged (incorrectly apparently) that Dawa/ISCI would be amenable to its long term objectives in Iraq (permanent bases, preferential treatment on oil concessions). From that point onward, Dawa/ISCI's long historical ties to Iran were whitewashed, while the expunged "sins" of those parties were gathered up and then applied, with a broad brush, to a caricature of the Sadrists.
It got so bad that a plethora of conservative pundits (even Vali Nasr!) took to characterizing the recent anti-Sadrist operations undertaken by Dawa and ISCI as a victory by the Maliki government over the forces of Iran (despite the obvious subtext of longstanding rivalry between Shiite rivals, as well as the Sadrists historical antipathy to Iran). Charles Krauthammer, in typical fashion, didn't let pesky facts interfere with a self-serving narrative:
[The Sadrist trend's] sponsor, Iran, has suffered major setbacks, not just in Basra, but in Iraqi public opinion, which has rallied to the Maliki government and against Iranian interference through its Sadrist proxy.
It should be noted that the above cited Krauthammer column is directly contradicted by...an earlier Krauthammer column in which he describes Maliki government stalward, ISCI, as the Iranian cat's paw, and "Shiite Menace":
Of course there are telegenic elements among the Shiites who would like fundamentalist rule by the clerics...many of whom are affiliated with, infiltrated by and financed by Tehran, the headquarters for 20 years of the Supreme Council for the Islamic Revolution in Iraq [SCIRI].
These Iranian-oriented Shiite extremists are analogous to the Soviet-oriented communists in immediate post-World War II Italy and France. They too had a foreign patron. They too had foreign sources of money, agents and influence.
Now that Maliki has been making it increasingly clear that he is not on board with the Bush/McCain vision for Iraq, the pendulum is swinging back toward Krauthammer 1.0. Some people are feeling had. Although others, like John Derbyshire, are claiming that they were in on the fix all along:
Nothing in any of Maliki's "inartful" statements is the least bit surprising to a "To Hell With Them" Hawk...
Now that our American blood and money has seen off most of the enemies of Maliki and his Iranian pals, it is perfectly natural for them to believe they can finish the job themselves, without further assistance from us.
That's tantamount to an admission that Maliki and his "Iranian pals" have used the Bush administration quite deftly to dispatch their enemies - which, for the record, include the Sadrists to some extent. One wonders why Derbyshire has kept this piece of heretical insight to himself over the past few years? Andy McCarthy pleads non-ignorance as well:
As I've mentioned before, Maliki, of the Shiite Dawa Party which opposed the 2003 U.S. invasion of Iraq in the first place, has long-standing ties to Iran and Syria — and has expressed support for Hezbollah. The only thing that surprises me about this story is that anyone is surprised. [emphasis added throughout]
Got that folks: It was obvious all along that Maliki and ISCI were Iran's chief proxies in Iraq. Yet, oddly enough, anyone out there questioning the strategy of helping Iran's proxies to consolidate control over Iraq's government were "defeatists." John McCain, for example, has frequently argued that removing US troops would "boost Iranian influence in the region." But did we do something different by offing the enemies of "Maliki and his Iranian pals"?
Swopa, who has always accurately described this dynamic, chides those on both sides of the divide that believed, as the Bush administration did, that ISCI/Dawa would be willing to go along with the plan to make Iraq a major US military outpost in the Middle East:
As Abu Aardvark wrote today, “I know that I’m not the only one who has generally assumed that Maliki and most of the ruling elite preferred McCain’s vision of endless, unconditional American military support.”...
I think that the key mistake many observers...[make is that t]hey forget that the government Maliki represents wasn’t created by the Americans — it came about following popular elections demanded by Grand Ayatollah Ali Sistani, who also established the coalition to which Maliki belongs and lent his considerable prestige to ensure its victory. And Sistani probably didn’t go through all that trouble just to be known as the guy who rubber-stamped a permanent U.S. occupation.
Back in Febuary 2004, Anthony Shadid of the Washington Post wrote a profile of Sistani that has long influenced my writings on Iraq; it describes the grand ayatollah as primarily motivated by memories of 1920 — when Shiites rebelled directly against the British, and were rewarded with 80 years of Sunni/secular domination — and determined not to let his followers miss this opportunity.
It’s always seemed to me that his solution was to cooperate initially with the U.S. invasion, use the American military as a contractor of sorts to help cement a Shiite-led government’s power, then nudge us aside when the task was more or less complete. Maliki’s newfound spine, if anything, just means that they think that time is drawing closer.
At times when describing the Bush administration's decision to target the Sadrists, I emphasized the fact that the Bush administration thought it would get a better deal from the ISCI/Dawa tandem than the Sadrists, and that this lay behind the decision to side with ISCI/Dawa against Moqtada. On occasion, I was not careful enough to point out that even though this was the Bush administration's assessment, it might have pinned false hopes on an unlikely champion (ISCI/Dawa).
Ultimately, the differences for many on the progressive side of this issue came down to the question of timing: Many (including myself) believed that the Shiite power structure would eventually want us out, but that ISCI/Dawa, and even Sistani, were not yet approaching the levels of confidence that would lead them to push for a departure of US forces. They were too vulnerable and unpopular to be willing to lose their enforcer just yet. Or so the thinking went.
But as Swopa has been quick to remind me: Even under the so called "immediate withdrawal" plans, the process will take years. Maliki et al seem ready to at least begin that process. So much so, that they've decided to strike a severe political blow to John of 100 Years.
I don't know what has been more fun to follow over the past few days -- the McCain campaign's scramble to play catch-up with Maliki's suppport of an Obama-esque timetable, or the US media starting to go all-meta on their own coverage of the Obama trip. There are too many gems for a single QOTD, so here are a few highlights.
The first stage of "We're f**ked" is Denial
Even though McCain was given an extra 24-hour news cycle -- the delay in coverage by the NYT and WaPo was, as Steve Benen remarked, journalistic malpractice -- he and his campaign are running around like ham-handed headless chickens. They seem to be stuck in the Denial Stage even though the evidence was clear from the outset that Maliki was serious.
The focus in the media and in the McCain campaign's (various) responses has been on whether Maliki really gave a quasi-endorsement of Obama's "sixteen months" -- the whole walkback nonsense. However, the interview has been on Spiegel's site since Saturday, and in the interview Maliki expresses several times the need for an end-date, the sooner the "more realistic". There could have been no confusion on McCain's staff about the overall thrust of Maliki's position if they read the interview. The "mistranslation" excuse was transparently feeble from the outset.
For all McCain's vaunted international experience, this episode is displaying him as someone who isn't what we might call "agile" at handling an unexpected international curveball. Joe Klein hit exactly what I've been thinking:
I suppose that McCain's stubborn brittleness on this subject isn't news. But his inability to respond to a major change in policy from our Iraqi allies -- the announcement that they can take it from here -- certainly is newsworthy. There are three possibilities:
- McCain doesn't believe the Iraqis can take it from here. (In the most benign reading, he may see this new position as mere domestic political posturing on Maliki's part, which is no doubt part of the truth.)
- McCain doesn't want the Iraqis to take it from here. He still wants long-term, 100 year, military bases.
- McCain doesn't move very quickly to adapt to changing facts on the ground.
None of them speak very well of the guy. [emph. added]
I think it's "all of the above" -- but especially the last factor. McCain is so wedded to a particular view of the Iraq War, the GWOT, and the US role in the Middle East, that he can't adapt. If he had had a more realistic understanding of the situation, Maliki's remarks wouldn't have -- or more accurately, shouldn't have -- come as such a bombshell.
The second stage of "We're f**ked" is Anger
Some of McCain's supporters are ahead of their candidate and acknowledging that Maliki appears to mean what he says. But that's not to suggest they're to the Acceptance stage yet. They're getting mad that "our guy" isn't following the script. Rob Farley's been tracking the emergence of the Anger crowd at the Corner.
At 11:38 AM EDT, Rob remarked (echoing a constant refrain of our own Eric Martin):
The conservative media and Right Blogistan have been undertaken to steadfastly ignore any hint that Prime Minister Maliki might and his political allies might have connections with Iran, preferring instead to assert that Iran influences events in Iraq through Sadrist militia and Sunni tribes (!). Given Maliki's statements on withdrawal, I wonder this: How long it will take for an anti-Maliki trope to develop on the American right that concentrates on his Iranian connections?
Ask and ye shall receive! Less than two hours later, Rob noted:
Andrew McCarthy answers my question:
As I've mentioned before, Maliki, of the Shiite Dawa Party which opposed the 2003 U.S. invasion of Iraq in the first place, has long-standing ties to Iran and Syria -- and has expressed support for Hezbollah. The only thing that surprises me about this story is that anyone is surprised.McCarthy also chides Maliki for being insufficiently grateful for the awesomeness of the Surge. Look for more of this as Maliki fails to walk back his statements...
But as Daniel Larison points out, maybe John McCain is simply too confused to be angry.
McCarthy is entirely right in what he says here, but that raises a couple questions. First, there is the obvious question of why the U.S. is attempting to pursue a strategy premised on limiting Iranian influence in Iraq and the region while actively backing a government that has no intention of limiting Iranian influence in Iraq and very clearly is led by a sectarian party.[snip]
Even more than creating a political problem for McCain back home, Maliki’s recent statements have revealed both the untenability of a continued U.S. presence in Iraq and the complete incoherence of U.S. strategy in that country.
Serious ouch! And then John Derbyshire added his two cents. Again from Rob:
All of your country are belong to us now.Verbatim Derb:
We should tell Maliki, loudly and in public, that he owes his job to us, and that further prosecution of our military operations in his country will be conducted with regard only to U.S. interests, as determined in consensus by our established domestic political processes. And if he doesn't like that, he can go to hell.
God, I am so glad that this incident has caused the right to discard its phony interest in democracy promotion...
To be fair to Derb, he's always been a "To Hell With Them" Hawk, so his sentiments should come as no surprise. As he remarked today: "This absurd and insane desire to be loved and admired by foreigners will be the death of this republic." Derb doesn't have to do Denial -- he starts (and finishes) with Anger.
Those "Listening to Commanders on the Ground" C-i-C Credentials
If there was one piece of Conventional Wisdom we've heard for the last week about Obama's Grand Tour it was that the trip was risky but necessary. Obama had to show voters he would be "acceptable" as Commander-in-Chief. Obviously, he wouldn't be better at foreign relations than the tough, seasoned veteran, John McCain, but Obama had to somehow find his way across the "acceptability barrier."
So here's the Photo of the Day (photo released by US Army via Mark Halperin).
As Michael Crowley notes: "Hmmm, Petraeus doesn't look like he's been telling Obama he's a defeatmonger. "
Worse yet for McCain image-wise are these photos paired together by Ben Smith of Politico: "It's not really close," says Ben. Heh, indeed!
And what would be a Circus without Coverage of the Coverage of the Coverage...
Jesse Taylor is back!
Despite the fact that his foreign policy vision has been largely validated in the past week - McCain caught up to Obama on Afghanistan and the aforementioned endorsement by Maliki - the main discussion today and over the past few days has been whether or not the press is covering Obama’s trip too much and whether or not the coverage of them talking about the coverage results in too much (and too favorable) coverage for Obama. It’s a tesseract of inanity - a new fourth dimension of coverage about the coverage of the coverage will soon emerge, with Jessica Yellin invited on to discuss how she talked about her in-depth discussion of the impact of Obama’s trip on the race...without ever mentioning what Obama did, how he did it or who he did it with.
Call it the Fafblogging of the media: CNN is the whole world’s only source for CNN! [emph added]
Now if we only still had Billmon!
Our commentariat has been clammoring for more info on the Iraqi refugee problems, and their wish is our command.
It's hard to scope out the extent of the problems -- the data on external refugee flows is notoriously uncertain -- but the International Crisis Group, in their new report, gives it a try. Together with their patented recommendations for everyone and his uncle, including the UN and US.
Among the issues discussed -- as the Iraqi government enjoys more and more oil revenue, getting funds to Iraqi citizens living abroad should become a high priority -- e.g. paying pensions. And accurate methods for tallying refugees in near-by countries will be one of many logistical challenges in preparing for the upcoming elections Eric has been discussing. --n
Recycling petrodollars, 2008 edition --n
Whereas many American analysts describe U.S. steelmaking as a sunset industry that cannot compete with cheap steel imports from China, Russian tycoons, who have experience modernizing outdated Soviet mills in Russia, perceive value. The weak dollar has made many U.S. companies cheap in comparison to their counterparts in the Euro zone.
In addition to the dollar devaluation making American exports cheaper, in the past year skyrocketing world oil prices have tripled the cost of sending a standard shipping container from China to the U.S., reducing China's market share for steel in North America. Chinese manufacturers increasingly find themselves not only paying more to ship their low-margin goods abroad, but paying more for oil, iron ore, and other raw materials needed to produce these products, all while having their low-wage advantage undercut by competitors in Vietnam, India and other Asian countries.
In other Iraq news, the Sunni bloc that had previously withdrawn from Maliki's government last August has returned (in the nick of time - more on that below):
The main Sunni Muslim bloc in Iraq has rejoined the Shia-led government, in what correspondents called an important step for national reconciliation.
The return of six ministers from the Accordance Front to the cabinet was approved by lawmakers.
There are good reasons to doubt that the return of the AF is such an "important step." As I have argued in the past, the AF was already a part of the Maliki government for many months prior to its withdrawal, and that government was most frequently described as dysfunctional with no track recored of successful progress on key reconciliation items.
Further, the AF does not represent a large majority (or a majority?) of Sunni Iraqis, so their actions should not necessarily be interpreted as representative of the very constituency deemed crucial to reconciliation. In fact, the AF's relative lack of popularity vis-a-vis the Awakenings/Sons of Iraq tribal/insurgent elements in some Sunni regions is a large part of the motivation for the Front to return to Maliki's government at this juncture. The BBC article eventually gets around to hinting at this:
Their return is especially significant ahead of provincial elections that are expected later this year, the BBC's Jim Muir in Baghdad says.
The pertinent questions are how significant and in what ways? Is this the AF's way of hedging its electoral bets by reclaiming the reins of government ahead of the elections (it's good to count the ballots ya know!)? Or is this the culmination of some type of quid-pro-quo between the AF and Maliki/the Bush administration that speaks of potential widespread fraud/shpaing operations?
I tend toward the former interpretation, but don't see that as a positive in terms of increasing Sunni contentment with the political situation in Iraq. The latter would be even worse.
Marc Lynch provides an update regarding the status of the provincial elections that were slated for October 1, but which have long seemed destined for a delay. According to various news outlets cited by the Aardvark, the elections will likely be pused back to December - or perhaps some time in 2009 - due to the fact that the Iraqi government has not even been able to pass the law governing those elections yet. No surprise here: the debate over the election law is, in many ways, a microcosm of the larger debate concerning Iraq's future, and each of the various factions' roles in it, and so the process is being contested pretty strenuously by various actors.
As I mentioned in that prior post, Lynch views the delays as a positive, and remains somewhat optimistic about the prospect that the delay may give the time and space necessary for the various parties to hone the election law in order to reach an acceptable compromise:
As I wrote earlier this week about the debates over the election law, better that these elections be done right than that they be done on an arbitrary schedule. There's little substantive difference between October 1 and the end of December, other than the former might generate a 'purple finger' moment to influence the American election campaign (which really shouldn't be a consideration either way - though the risk of violence around the provincial elections should also be taken into account by those who do). At the same time, a lot of actors - especially, but not only, the various 'Awakenings' groupings - have been impatiently waiting for these elections to get the share of power to which they feel entitled... so hopefully they won't be postponed too long. Hopefully they will just set a new, realistic but hard date, pass an electoral law acceptable to all trends, and then make provisions for serious international monitoring. I know, I know, here I go with my optimism again... sorry 'bout that.
Obviously, I'm not as sanguine about getting a law "acceptable to all trends" or the eventual inclusion of "provisions for serious international monitoring." But I want to clarify my position and ostensible criticism of Lynch. First of all, Lynch is entirely correct that it would be better to delay these elections than push them forward under the current conditions - whether to match up with the US domestic elections calendar, or otherwise (say, to capitalize on the political shaping operations vis-a-vis the Sadrists).
Ultimately, there will need to be a certain interval between the passage of the law and the elections themselves in order to allow for the logistical preparations, and this interval should not be abridged for arbitrary or capricious reasons. Further, at least by pushing back the deadline the possibility remains that eventually a decent law, reasonably acceptable to enough of the factions, will be adopted. While I don't rate that possibility as high, it's the only thing to root for at this point with respect to this process, and I don't fault Lynch for that.
In summation, a delay is better than the alternative, but the end result will likely disappoint regardless.
The ruthless former head of Russia's Federal Tax Service is making waves as Minister of Defense. --n
After years without meaningful military reform, Russia’s civilian defence minister is wresting control of the armed forces from the General Staff. This is one of the first signs of change since Vladimir Putin handed the presidency to Dmitry Medvedev. In the first instance, the aim is to reduce waste and corruption, and to improve financial management.
[snip]
What is needed is a fundamental reappraisal of both the likely threats facing Russia and its long-term priorities. Until now, such doctrinal debates have been dominated by the generals and their conservative interests. Mr Serdyukov has wrested doctrine from the generals’ hands but does not yet seem to know what to do with it. Nor, despite his more emollient style, has Mr Medvedev yet shown himself willing to reassess Mr Putin’s security and foreign policy. That said, with the rise of more practical technocratic generals such as General Makarov who favour smaller, better-trained and more professional forces and a decisive shift in power between the ministry and the General Staff, there is at last the opportunity to introduce meaningful reform—once the political leadership finally decides what kind.
About this:
"Maliki, speaking to the German magazine Der Spiegel, said, 'U.S. presidential candidate Barack Obama talks about 16 months. That, we think, would be the right timeframe for a withdrawal, with the possibility of slight changes.' In other words, the head of the Iraqi government endorsed the Obama plan -- both its timetable and its timing -- by name. That's huge. And it's the culmination of a weeks-long effort by the Maliki government to drive their desire for a timetable for withdrawal into the American political conversation. But though they've repeatedly expressed their preference for a timetable for withdrawal, this is the first time they've explicitly supported the plan of one candidate or another.
"Fundamentally, Maliki's comment is evidence of what the Iraqi government sees as the primary impediment to their government attaining real legitimacy: Us. The American occupation is hugely unpopular, and if Iraq is to truly stabilize, its government needs to be seen as independent from the occupiers and opposed to their continued presence. McCain needs to either come out with a new Iraq plan featuring a withdrawal component tomorrow, or explain why he believes America should fight for continued military dominance in Iraq over the objections of the American people, the Iraqi people, and the Iraqi government."
(Crossposted to my blog)
You might expect that after brash declarations like "Mission Accomplished" (2003), "last throes" Part I (2005), "last throes" Part II (2006), and Rich Lowry's infamous "We're Winning" cover photo and story (2005), Iraq war supporters would have developed a little healthy circumspection. You could have assumed that after declaring every new development over the past 5+ years the turning point and pivot to victory (the killing of Uday and Qusay, capture of Saddam, handover from CPA to interim government, elections, constitution, etc), that a more mature and cautious "wait and see" approach would be the norm. You would, of course, be wrong (you always are).
John McCain on the campaign trail lets the American people in on the best kept secret: we've actually already won the Iraq war. Who knew?
I repeat my statement that we have succeeded in Iraq, not we are succeeding we have succeeded in Iraq. The strategy has worked and we now have the Iraqi government and military in charge in the major cities in Iraq. Al Qaeda is on their heels and on the run... [emph. added]
Of course, it's the kind of success that requires Americans to continue to fight and die in the war. That's already won. And over.
...but the success that we have achieved is still fragile and could be reversed, and it’s still – if we do what Sen. Obama wants to do, then all of that could be reversed and we could face again the chaos, increased Iranian influence and American loss and defeat.
Ah, sweet victory. Still no definition of success or victory - but who cares, whatever it is, it's ours! And again, we see the absurd suggestion that Iranian influence has been lessened by our efforts to facilitate the consolidation of power by Iran's main proxies, ISCI and Dawa. Right. But I'll put that aside because now would be a good time to check in with the Kagans who, just last month, were telling us that we were "very close to succeeding." One can only imagine the progress of their pollyanna:
All of the most important objectives of the surge have been accomplished in Iraq. The sectarian civil war is ended; al Qaeda in Iraq (AQI) has been dealt a devastating blow; and the Sadrist militia and other Iranian-backed militant groups have been disrupted.
The sectarian war has ended? Or is it just in its last throes (more on this below)? What of the Iranian-backed political parties (ISCI, Dawa) that are getting stronger? Regardless, what about that political reconciliation stuff that Bush and Petraeus said was the most important objective of The Surge, and without which, the various conflicts would eventually re-ignite?
Meanwhile, the Iraqi government has accomplished almost all of the legislative benchmarks set by the U.S. Congress and the Bush administration. More important, it is gaining wider legitimacy among the population. The attention of Iraqis across the country is focused on the upcoming provincial elections, which will be a pivotal moment in Iraq's development.
Wow. That sets a new benchmark for mendacity. Regarding provincial elections, the results are being cooked and, as such, will represent a "pivotal moment" the same way the last two rounds have - not so much. As to the benchmarks being "accomplished," the Kagans (with Jack Keane, "KKK" for short - I kid) are, quite frankly, lying.
The Bush administration has recently released an assessment that stated that the Iraqi government was making "satisfactory" progress on 15 of 18 benchmarks. KK & K translate "satisfactory progress" to already "accomplished." In reality, though, some of that progress cited by the Bush administration includes the passage of laws that have not yet been implemented (call it reconciliation on the books). Sameer Lalwani commenting on KK & K:
For some reason, yesterday I neglected to check the Lebanon Daily Star, which is certainly a useful source for information on Lebanon. The coverage there does focus on the detainees, and a key part of it is that there are now no Lebanese prisoners being held in Israel. Samir Kuntar is the most prominent name mentioned; however, the story portrays the events as subject to dispute, much like this Arabist thread.
As I said yesterday, I trust Israeli courts more than the Arab world, so I'm not defending Kuntar at all. My object in posting is to take a look at his reception, which is often being commented on as glorifying a brutal murderer and demonstrating the inhumanity of mainstream Arab opinion. However, there are key differences in perception that make that moral gap much narrower than some would have it. If your kneejerk reaction is that Israel is lying, then you're celebrating the return of someone who was wrongly imprisoned for almost 30 years.
I've spent a bit of time today looking over issues related to the recent exchange of prisoners and bodies between Israel and Hizbullah. There are, I think, three issues which require comment.
First, despite some self-righteous bloviating about how "only monsters hold dead bodies for ransom," Israel also handed over 200 bodies of Lebanese and Palestinian fighters it had been holding. You notice that fact buried in this story which focuses primarily on the Israeli views of the exchange. The Arab media, however, tends to have it front and center, as with this story, which mentions Kuntar after the bodies in the headline, has the trucks carrying the bodies as the lead photo, and begins:
"Amidst popular and official celebrations, a convoy carrying the bodies of martyrs of the Lebanese and Arab people which had been surrendered yesterday by Tel Aviv to Hizbullah made their way toward the capital Beirut passing through villages, towns, and cities of the south.
"Upon the long road leading to Beirut, Lebanese and Palestinian nationals assembled and (were inclined away from?) political factions in order to greet the biers of the martyrs along their journey, while women scattering flowers and rice smiled radiantly and cried for joy."
It then goes on to talk about a ceremony in the south involving their families, the reception and celebration in Beirut, and identification and burial preparations. Quntar is in the headline, then doesn't appear again until after the subhead where it discusses his reception and that of the other four prisoners.
The next point I want to comment on concerns Kuntar's reception as a hero. From what I can tell, simply saying that he expresses no remorse for his actions is misleading. He apparently claims he did not kill the four-year-old girl and her father, and that they were killed in the shoot-out. I'm not sure how credible such a claim is, as I trust Israeli courts more than Arabs do, but this does give an idea of what people are saying and thinking in the Arab world. This troubled me, as even if you blame Hizbullah for the focus on Kuntar, he seems like a uniquely unsavory choice. I know plenty of Arabs who hate Israel and support all manner of fighting Israelis but balk at that level of brutality, if not before.
Finally, all this needs to be seen as part of a broader struggle, one which does not always divide neatly into separate conflicts Lebanon, Syria, and the Palestinians. Michael Cohen, to take just one example, refers to these events in isolation with, "Not to take sides here, but when people wonder about the recalcitrance of Israeli leaders to enter peace agreements with their neighbors this revolting episode serves as a worthwhile reminder."
Arabs don't have a monopoly on making the unsavory into heroes. How, after all, did the Israeli settler movement respond to Baruch Goldstein, who committed the 1994 Hebron massacre? According to Idith Zertal and Akiva Eldar's Lords of the Land:
"In October 1994, about half a year after the massacre, the saint's admirers and devotees began to establish a grandiose site at his grave, at the northern exit from Kiryat Arba. The money for building the shrine came from private donations from Israel and abroad. On Goldstein's tomb they wrote that 'he had sacrificed himself for the sake of Israel, his Torah, and his land" and that he had been "murdered in the sanctification of the Holy Name." The graveside attained the dimensions of a mausoleum. The spot became a place of pilgrimage. Mass 'midnight corrections' - all-night Torah study sessions - were held there. Barren women prostrated themselves on the grave to pray for offspring. A nucleus of worshipers came there every day. Throughout the country aid funds and charities were established in Goldstein's name. An extensive 'souvenir' industry developed in memory of the murderer. His admirers distributed a prayer book dedicated to 'the elevation of the sainted soul,' T-shirts with his portrait, and key chains with Goldstein's picture on the backdrop of the Tomb of the Patriarchs...Only at the conclusion of prolonged parliamentary and legal struggles...did bulldozers come to destroy the shrine at the end of December 1999. Only an ordinary marble tombstone remained, but the pilgrimage to the grave and the cult of the saint did not end."
As seen in the government's eventual destruction of the shrine, most Israelis are too sane for this, and probably sickened by it, though my two years in Jerusalem taught me not to underestimate the numbers of those who aren't, and who today are more likely to be calling for the release of Yigal Amir at a soccer game. Israel, however, continues to support the settlement movement by carving up the West Bank via sealed roads Palestinians have to go around and providing settlements with utilities and IDF protection.
UPDATE: Arabist, in comments, provides a perspective on Kuntar's reception that tracks with what I said above.
Obama's opponents have been trying to make hay over his "failure" to hold hearings on Afghanistan. From Mark Murray at MSNBC's First Read, here's what Joe Biden has to say:
Remember that letter that South Carolina Sen. Jim DeMint (R) sent to Obama -- over the fact that the Foreign Relations subcommittee that Obama chairs hasn't held a hearing on the issue of Afghanistan?
Well, Foreign Relations Committee chairman Joe Biden -- a possible Obama veep pick -- responds to DeMint with his own letter. "As you are aware, under my chairmanship the Foreign Relations Committee has addressed most Afghanistan issues at the full committee level. I believe that this is the best way of ensuring the most comprehensive examination of the complex issues involved, and of ensuring the highest-level Administration participation," he writes.
"On the particular issue of NATO’s mission in Afghanistan, we have held three full committee hearings in the last 22 months... At all three of these hearings, we were fortunate enough to have the expert testimony ... of former NATO commander and Supreme Allied Commander-Europe, Gen. James R. Jones (USMC, ret.). At my request, Sen. Obama chaired the confirmation hearing for our next ambassador to NATO, which he focused on NATO’s mission in Afghanistan."
Biden concludes, "Sen. Obama has displayed great leadership on this issue: he called nearly a year ago for the deployment of at least two additional combat brigades to Afghanistan -- it has since become the accepted position of a wide range of U.S. military officials, including the Chairman of the Joint Chiefs of Staff. I look forward to working closely with him, and with you, on any future Afghanistan hearings that might be held in our committee."
In other words, ":p".
UPDATE: And the Pentagon seems to have Obama's back as well. From the AP.
Pentagon leaders on Wednesday signaled a surge in U.S. forces in Afghanistan "sooner rather than later," a shift that could send some units there within weeks, as officials prepare to cut troop levels in Iraq.
Senior military officials are looking across the services to identify smaller units and other equipment that could be sent to Afghanistan, according to a defense official.
Although there are no brigade-sized units that can be deployed quickly into Afghanistan, military leaders believe they can find a number of smaller units such as aviation, engineering and surveillance troops that can be moved more swiftly, said the official, who requested anonymity because the discussions are private.
The moves are expected to happen within weeks rather than months, the official said.
The decisions are being made against the backdrop of shifting priorities for the U.S. military, and were discussed during a meeting Wednesday of the Joint Chiefs of Staff.
Military leaders are weighing requests from commanders in Afghanistan for more troops, aircraft and other assistance. And they are trying to determine the right balance between the needs of the force in Iraq, versus troops in Afghanistan who are facing a Taliban resurgence.
To date, the fight in Afghanistan has taken a back seat to Iraq, which has been the strategic priority. While Iraq will remains the top goal, it now appears the military believes there should be a more urgent emphasis on Afghanistan than there has been.
To follow up on AG's post on Burns' announced participation in talks with the Iranians and Haggai's comment that this may be following the North Korea multilateral pattern, I've hiked this from the comments section and "revised and extended my remarks" on the US political implications.
One further thought on the mini-"opening" to Iran, especially if the Guardian is right that State is going to get its way finally and be allowed by the White House to open a US interests section in Teheran.
I think the White House has finally become seriously spooked about Pakistan. When Benazir was assassinated, they lost Plan A and there never was a Plan B. They've been treading water while watching things go from bad to worse in both Pakistan's domestic political chaos and in the border areas with Afghanistan. The US doesn't have more troops to put in, and even if there were a few more brigades available, everybody (except Mr "I authored the Surge(TM)" McCain) seems to realize that the military isn't going to solve this problem, it's only a finger in the dike.
Whoever is the new President come January, US-Pakistan policies are going to have to be reworked entirely. The Biden-Lugar economic aid package, which Obama is sponsoring, is just the first step.
But one factor surely is common to any options for dealing with Af-Pak -- keep western Pakistan stable. Which means having cooperative, if not cordial, relations with the Iranians re Afghanistan has become more than just desirable -- it's an absolute imperative.
Bill Varner at Bloomberg reports today on this topic, although it's framed as the sorts of trouble Iran could cause if it were attacked. However, Varner's observations are equally relevant to the options the US faces in adjusting its approach to the Afghanistan-Pakistan gordian knot.
Khalizad is making noises about the potential mischief Iran could make, and US Ambassador William Wood is claiming that Iran is helping arm the Taliban, under the "fingers in every pot" theory of influence. The Iranians themselves are miffed that the US didn't build on their initial cooperation when the US first invaded Afghanistan, so they're not rushing to help the US counter the Taliban. One assumes, however, that the Iranians aren't eager for western Afghanistan to become a Sunni fundamentalist hotbed. So the US objective should be to persuade the Iranians to shift back to their more cooperative mode on the Taliban.
While the world focuses on tensions between Afghanistan and Pakistan 800 miles to the east, U.S. officials keep watch on Iran's expanding presence in Herat and the surrounding province of 2 million people. The region might play a major role if conflict erupts over Iran's nuclear program.
Should Iran's nuclear ambitions spark hostilities, it would use its sway in western Afghanistan as a ``bargaining chip,'' said Afghan-born Zalmay Khalilzad, the U.S. ambassador to the United Nations and former envoy to Kabul. If attacked, Iran ``could make life difficult for us'' in Afghanistan, he said in an interview.
Iran has ``intelligence operatives everywhere, military commanders who work for them'' in the region who could be deployed to stir up trouble, including riots, said Barnett Rubin, an Afghanistan specialist at New York University's Center on International Cooperation.
For now, Tehran's investment of $500 million in the region has helped the U.S. by minimizing the influence of the Taliban extremists who once ruled the country and the sort of violence they have inflicted on southern and eastern Afghanistan. Iran paved half of Herat's streets and 40 miles of highway leading north, built schools and health clinics and partnered with Afghan companies in an industrial park.
``It's not just investments, but also trade,'' said Ali Shah Ahmedi, the 43-year-old manager of Herat's Tejarat Hotel. ``I have Iranian businessmen staying here all the time, coming to buy or sell goods'' such as packaged foods and motorcycles.
Sana, 42, holds forth from his office in the Herat Trade Center, a modern nine-story building of gleaming blue glass that helped inspire residents' nickname for their city: ``the Dubai of Afghanistan.'' A hotel, law offices and a finance company that supports farmers are connected by an Afghanistan rarity: an elevator.
Traffic lights in Herat work, in contrast to the capital, Kabul, so vehicles flow smoothly around the Blue Mosque, an 800- year-old, blue-tiled landmark. Herat is cleaner than Kabul, with more trees and parks, and less dangerous, with fewer visible police and troops.
Ties between Iran and Herat run deep. The city was the capital of 15th-century Persia, and Iran held Herat until midway through the 19th century. Heratis, mostly Sunni Muslims, today speak a dialect closer to the Farsi spoken in Tehran than the Dari used in Kabul.
Predominantly Shiite Iran opposed the Sunni Taliban -- who refused to educate girls when they ran Afghanistan, among other strictures -- as extreme.
After the Taliban were toppled for harboring the terrorists behind the Sept. 11, 2001, attacks, Tehran's government helped the U.S. and the UN begin the political transition that led to Hamid Karzai's election as president.
Iran's leaders feel that contribution wasn't properly acknowledged, said Manouchehr Mottaki, its foreign minister. The slight explains their refusal to help fight the Taliban's current insurgency, he said.
``We limit our cooperation with Afghanistan to helping reconstruct the country,'' Mottaki told reporters at the UN on July 2.
William Wood, the U.S. Ambassador to Afghanistan, said Iran now helps arm the Taliban. Tehran's policy is to ``make everyone a loser'' in Afghanistan, he said in a Kabul interview.
Karzai is ``walking a very fine line'' and doesn't accuse Iran of actively supporting the insurgents, said Humayun Hamidzada, the president's chief spokesman.
``President Karzai believes Iran has a positive role to play in Afghanistan,'' Hamidzada said last week in Kabul. ``We are working with the U.S. and Iran, and don't want to become the battleground for their conflict.''
Iran's presence in Afghanistan will be an issue for the next U.S. president.[No kidding!!!]
I would be astonished if the Bush Administration were able to make significant headway with the Iranians on Afghanistan, even though it's clearly in both nations' interest to cooperate. The calendar is increasingly becoming a tyrant for the Bush Admin. There are too many interrelated regional issues within which the nuclear matters (and Iran's long-term security interests) will have to be addressed, and too few months until the height of the election campaign. It's too hard to break the Iranian relations into discrete pieces -- nuclear, Iraq, Afghanistan, Lebanon, etc. -- because they're so intertwined. So there's really no way to avoid linkage.
The Bush Administration would also have to go a long way to convince the Iranians they should deal with Bush now rather than wait for the new US President. And whoever the elected President is, he's going to want to have his own say in any overall deal with the Iranians.
However, W seems to be heavily invested in "legacy" planning. I expect he'd like to be able to claim credit for having "laid the foundations" for future progress on these issues to mitigate the blame for leaving an unholy mess behind in Af-Pak. Hence his stated intention, as Haggai noted, that "he expected his remaining months in office to 'leave behind a multilateral framework' for dealing with Iran."
It will be interesting to see how far Bush's commitment to his own "legacy" leaves McCain dangling in the wind on the campaign trail.
UPDATED: Another sign that the White House is increasingly spooked by Afghanistan-Pakistan is this AP interview yesterday with an unidentified "defense official." It suggests the intensity of the scramble underway to meet the needs for additional forces in Afghanistan, which Sec Gates and Adm Mullen have been discussing with the press:
Senior military officials are looking across the services to identify smaller units and other equipment that could be sent to Afghanistan, according to a defense official.
Although there are no brigade-sized units that can be deployed quickly into Afghanistan, military leaders believe they can find a number of smaller units such as aviation, engineering and surveillance troops that can be moved more swiftly, said the official, who requested anonymity because the discussions are private.
The moves are expected to happen within weeks rather than months, the official said.
The decisions are being made against the backdrop of shifting priorities for the U.S. military, and were discussed during a meeting Wednesday of the Joint Chiefs of Staff.
No wonder McCain suddenly announced the need for one of his Surges(TM) for Afghanistan on Tuesday.
It's long been said that Hamas is popular because of its social services. Israel's defense establishment is now on the case:
"Israeli military officials have identified Hamas's civilian infrastructure in the West Bank as a major source of the Islamic group's popularity, and have begun raiding and shutting down these institutions in cities like Hebron, Nablus and Qalqilyah.
"Last week, troops focused their efforts in Nablus, raiding the city hall and confiscating computers. They also stormed into a shopping mall and posted closure notices on the shop windows. A girls' school and a medical centre were shut down in the city, and a charitable association had its computers impounded and documents seized.
"This policy, officials say, is meant to deny the Islamic group, which is committed to Israel's destruction, the ability to use these institutions as a pipeline by which money is channelled to finance attacks on the Jewish state. But the main goal of this campaign is to stem Hamas's growing popularity in the West Bank, and ensure it does not seize control of the area as it did in Gaza a year ago, when its forces vanquished the more moderate Fatah movement headed by Palestinian President Mahmoud Abbas...
"In recent months, the army has also closed down an orphanage, a bakery and other institutions in Hebron, which Israel believes are associated with Hamas. In Gaza, meanwhile, Israel and the Islamic group are observing a truce, but this does not pertain to the West Bank where the Israeli military operates freely."
Are they serious? Having Israel attack Hamas orphanages and medical centers is supposed to make Palestinians turn against Hamas?
(Crossposted to my blog)
Former NSC member Gary Sick posted the following to a private professional list-serve, with permission to cite and duplicate. It seems of interest to American Footprints readers. -BU
As usual, John Bolton is absolutely right. His policy prescriptions may
be reckless to the point of foolishness ("When in doubt, bomb!"), but
his understanding of what is happening in Washington policy (as
outlined in his op-ed in the Wall Street Journal yesterday) is
unerringly accurate.
While much of the world was hyper-ventilating over the possibility that
the United States (and maybe Israel) were getting ready to launch a new
war against Iran, Bolton was looking at the realities and concluding
that far from bombing the US was preparing to do a deal with Iran. He
had noticed that over the past two years the US had completely reversed
its position opposing European talks with Iran.
First, the US indicated that it would participate if the negotiations
showed progress. Then, when they didn't, we went further and actively
participated in negotiating a new and more attractive offer of
incentives to Iran. Bolton noticed that when that package was delivered
to Tehran by Xavier Solana, the signature of one Condoleeza Rice was
there, along with representatives of the other five members of the UN
Security Council plus Germany.
He had probably also noticed Secretary Rice's suggestion of possibly
opening a US interests section in Tehran -- the first step toward
reestablishing diplomatic relations. And he didn't overlook the
softening of rhetoric in Under Secretary Wm Burn's recent testimony to
the Congress about Iran.
Now, just one day after Bolton's cry of alarm that the US is going soft
on Iran, we learn that the same Bill Burns will participate directly in
the talks that are going to be held on Saturday in Geneva with the
chief Iranian negotiator on the nuclear file. Bolton's worst suspicions
seem to be confirmed.
Unlike many observers and commentators, Bolton has been looking, not at
what the US administration says, but what it does. Ever since the
congressional elections of 2006, the US has been in the process of a
fundamental change in its policy on a number of key issues: the
Arab-Israel dispute, the North Korean nuclear issue, and Iran. Since
the administration proclaims loudly that its policies have not changed,
and since the tough rhetoric of the past dominates the discussion, it
is easy to overlook what is actually going on.
Bolton no doubt noticed that Rumsfeld is gone and replaced with Robert
Gates, a very different sort of secretary of Defense. He will have
observed that the worst of the neocons (including himself) are now
writing books and spending more time with families and friends,
cheer-leading for more war by writing op-eds from the outside rather
than pursuing their strategies in policy meetings in the White House.
He will have seen the gradual shift of the policy center of gravity
from Dick Cheney to Rice and Gates. He will have been listening when
the Chairman of the JCS and others have said as clearly as they
realistically can that the military option, though never renounced as a
theoretical possibility, is the least attractive option available to us
and in fact is close to impossible given our over-stretch in Iraq and
Afghanistan.
In other words, Bolton, as someone whose policies (in my view) are
certifiably insane, recognizes real pragmatism and moderation in
Washington when he sees it. And he does not like what he sees in this
lame duck administration.
Over the past two or three years, we have been treated to one
sensational threat after another about the likelihood of imminent war
with Iran. All of these alarms and predictions have one thing in
common: they never happened. Perhaps it is time for us to join Bolton
in looking at the real indicators. When Bolton quits writing his
jeremiads or when he begins to express satisfaction with the direction
of US policy, that is when we should start to get worried.
-Gary Sick
And now for something completely different.... Although this blog has generally focused on national security matters, the growing turmoil in the US financial markets certainly merits a look, given its potential impact on the global economy. So here's an overview with a collection of links I've found especially useful and my speculation about the Bush Administration's politics.
At his press conference yesterday, President Bush assured his listeners that he won't do financial sector bail-outs.
President Bush also wanted fast action on his latest proposal to rescue Fannie Mae and Freddie Mac in Congress. He strongly endorsed Treasury Secretary Henry Paulson's plan but asserted definitively that the two companies would continue to be held by private investors. Bush also rejected the notion that the government would bail out any private enterprise.
But, but... government support for Fannie Mae and Freddie Mac that doesn't wash out current equity holders is... ummm, how shall we say this... exactly what a "bail-out" is. If we provide financing to keep Fannie and Freddie up and running but leave the equity holders in place, when their shares are underwater, we are bailing them out!
The best summary I've seen of the Fannie/Freddie situaton -- history and current problems -- is by Tanta at Calculated Risk. As they say, read the whole thing. Looking at the core function of the GSEs (government sponsored enterprises) -- which is to provide liquidity to the mortgage origination markets -- she explains:
They have always been about recycling lending capital and taking long-term fixed interest rate risk off depository (and eventually non-depository) lenders much more than about merely absorbing credit risk. This goes against the grain of much current media over-simplification of "securitization" of mortgage loans that sees laying off credit risk as the main or even the only point of selling loans. The GSEs do take on the credit guarantee obligation of the securities they issue, but nobody sells loans to the GSEs just to offload credit risk--in fact, more than a few lenders work hard to negotiate contracts with the GSEs that leave quite a substantial part of the credit risk with the original lender: recourse agreements, indemnifications, servicing options that put a lot of the cost of default on the seller/servicer, not the GSE. They have historically done this because the credit risk of GSE-eligible loans has always been modest, but the benefits of getting 30-year fixed interest rate loans off your balance sheet has been substantial.
For decades, I have believed that Fannie and Freddie either should not have been privatized or should have been more strictly reined in. They serve, and must continue to serve, a critical function for US (and gobal) debt markets. But they're not ordinary financial institutions. They are public utilities which shouldn't be managed, as private financial institutions are, primarily for the benefit of the holders of their capital base (as currently structured, common and preferred shareholders) and their management.
The backing of the Federal government is the sine qua non of these institutions' existence and successful functioning. Without that implicit guarantee, they would never have fulfilled their public roles -- providing reliable liquidity to the mortgage markets in good times and bad, and setting widely-adopted standards for loan origination and servicing, which made the development of a healthy mortgage-backed securities market possible in the first place.
In recent years, managers and shareholders of the GSEs grew sloppy and forgetful about the real nature of these institutions. They forgot the instiutions were public utilities and that they had a duty to protect the implicit guarantee which made their business possible. Instead, they adopted the same expectations as typical corporate management and equity holders, with a focus on growth, retaining market share in a rapidly growing and increasingly risky market, and pumping up earnings, in order to justify huge executive compensation packages and higher share prices. They also had a lousy corporate governance structure, about which critics on both left and right have complained for years.
When housing market innovations started leaving them behind, instead of sticking to their knitting, they went running to Capitol Hill, where they enjoy enormous power on both sides of the aisle. They were allowed to stray into parts of the housing bubble where they didn't belong while simultaneously ignoring and taking advantage of the implicit government guarantee. Their behavior helped to magnify the overall size of the housing bubble and delay its bursting. (See Tanta for a nice summary of recent history.)
Today, the leverage ratio of Fannie's equity to on- and off-balance-sheet liabilities is, depending on which measure one uses, between 68:1 and 128:1. By comparison, leverage for a healthy private financial institution is likely to be in the range of 10:1 to 20:1, depending on what lines of business it is in. The implications of that excessive leverage are spelled out in a restructuring plan proposed by hedge fund manager William Ackman of Pershing Square Capital Management. (See attached pdf, which is an excellent view of the situation, regardless of what you think of Ackman's proposed solution). As Christine Richard of Bloomberg explains:
Ackman, 42, has his own plan that would see Fannie Mae raise about $86 billion in capital by giving investors in $750 billion of senior unsecured notes 90 cents on the dollar in debt of a new company, with the balance in equity. Investors in Fannie Mae's $11 billion of junior debt would get warrants, while common and preferred shareholders would get nothing, according to Ackman.
``We've not yet heard Secretary Paulson's plan but it would be a grave error for the government to invest in the equity of Fannie Mae and Freddie Mac as they are currently capitalized,'' Ackman, who oversees $6 billion at Pershing Square Capital Management in New York, said in a telephone interview.
[snip]
``The good news is that Fannie Mae has all the capital that it needs,'' Ackman said. ``It just has the capital in the wrong form with too much debt and not enough equity.''
Ackman also suggested the government put in place a stand-by purchase commitment for the new common stock for three years. The government is unlikely to be asked to buy any shares as there would be market demand for equity in the better-capitalized companies, Ackman said.
Although much has been made of the declining quality of the GSEs' portfolio, Ackman's plan shows how the structure of their balance sheets is at the heart of their current difficulties. Even if they hadn't wandered into high risk business, given how highly leveraged they are, Fannie and Freddie would today be nearing the point where the government guarantee would be called into play simply because the drop in housing prices nationally has been so large. The rule of thumb for Fannie's plain vanilla mortgage financing is a minimum 80% Loan to Value (LTV) ratio. That means, in some regions of the country, a large number of mortgages will now exceed the current value of the underlying real estate even if they continue to be performing. That's not the "fault" of the GSEs and doesn't suggest they should stop doing business -- as the housing sector continues to collapse, they are needed now more than ever. Being able to ride through periods of large drops in underlying asset values and growth in non-performing assets is one of the reasons why we have the GSEs in the first place.
In effect, the GSEs are designed to be "bailed out" by the government when market conditions demand. When the government steps in, the GSEs require restructuring and new capital, with existing equity being heavily diluted if not wiped out. That didn't really matter when the government owned the institutions. But when they were privatized and the equity in the GSEs was sold to private investors, the share price should have reflected the risk of dilution if the goverment's implicit guarantee was called. Yet that wasn't the case -- the GSEs behaved, and the market priced their shares, as if there was no risk that the guarantee would be necessary even though their balance sheets were built on the basis of the implicit guarantee. The recent plunge in their share prices is simply the market finally pricing the GSE equity to reflect the central fact that defines their business.
As many have observed today, yesterday's prohibition by the SEC against naked short positions in the shares of the GSEs is either simply political theatre or a case of the panics. (See e.g., Dean Baker, Dealbreaker, Felix Salmon). There are other ways than naked shorts for investors to bet, so the objective of the move is unclear. In any event, even if it Cox's game slows the price decline, it isn't going to make those shares worth any more than they already are, which fundamentally is zero.
The only thing which allows the shares to retain any market value is the political optics against "nationalization" of the GSEs. Together with President Bush's comment, the SEC's concern with the declining market price of GSE shares suggests that, although Treasury Sec Paulson hasn't described the conditions under which the government would provide an equity injection, nonetheless a figleaf of private equity will have some sort of role.
By trying to discourage a fall in share price, the government seems to be encouraging investors to believe in fairy tales -- that a restructuring may not be necessary or that current equity holders may not get washed away entirely in the restructuring-to-come. But if leverage ratios are to be brought down to somewhere closer to earth, new private equity won't come in without the existing equity being washed out. If existing equity holders retain a place in a new capital structure, it will be only because, in effect, the government has provided equity financing at rates far below what the private sector would demand.
Contra President Bush, there's going to be a bail-out. The only questions are how and how much. Retaining a role for private investors in the GSEs as Bush and Cox appear to suggest -- without restructuring the roles of the GSEs and their balance sheets -- is the very essence of the worst kind of government bail-out. Privatize the profits and socialize the costs.
I hate to steal the TPM title but this topic is really too delicious not to. It seems that The Decider is actually willing to negotiate with rogue nations after all...
William Burns, America's third highest-ranking diplomat, will attend talks with the Iranian envoy, Saeed Jalili, in Switzerland on Saturday aimed at persuading Iran to halt activities that could lead to the development of atomic weapons, a senior U.S. official told the AP on Tuesday.
Official contacts between Iran and the United States are extremely rare and although Washington is part of a six-nation effort to get Iran to stop enriching and reprocessing uranium, the administration has shunned contacts with Tehran on the matter.
The senior U.S. official, who spoke on condition of anonymity ahead of a formal announcement of Burns' plans expected on Wednesday, acknowledged a shift in the administration's approach but stressed that Burns would not meet Jalili separately and would not negotiate with him.
"This is a one-time event and he will be there to listen, not negotiate," the official said.
Oh, my bad, he's there to listen, not talk. I'm sure there's a subtle difference there, but you know what? Traveling to meet the guy is in fact the opening move in negotiations. We know it, they know it, and any protests to the contrary is just obfuscation. Or is this just a fig leaf for future operations?
In a recent two-part series, I tried to unpack the term "The Surge" and correctly identify what effect, if any, the actual Surge has had on events in Iraq, as opposed to the other shifts in tactics/strategies (as well as serendipitous events/trends) that roughly coincided with that troop escalation. To repeat what Jim Henley said:
[T]he practical meaning of "The Surge" has changed while the pretended meaning has stayed the same.
The pretended meaning is, The US increased troop strength in Iraq for a period of time beginning in 2007. The actual meaning is, the US increased troop strength WHILE ramping up a program to pay off Sunni resistance leaders WHILE Iraq’s warring ethno-religious factions finished completely remaking Iraq’s demographic patterns, owing to tens-to-hundreds of thousands of dead and millions of exiled and internally displaced, WHILE the US turned the capital into a warren of barricades. The net result of all those changes has been a less obtrusively violent Iraq for the time being, and the whole arrangement is "The Surge" in practice, but the cheerleaders talk as if it was all due to The Surge in pretense. [ed: Add to this list, the Sadr initiated cease fire]
The Surge, as I argued, is being hailed mendaciously as a once-size-fits-all panacea for what ails Iraq - in fact, the triumphalists claim that it has already led to victory! Such credulity shown to one's own propaganda is dangerous. The last 7+ years have taught us that. The good folks over at Abu Mook give us good cause to fear the next four as envisioned by John McCain:
An adviser to the campaign told The New York Sun that, in a speech to be delivered in Albuquerque, N.M., the senator will call for an increase in combat troops and the creation of a special Afghanistan tsar to coordinate policy toward the country. "There will be a surge for Afghanistan. It will be moving combat troops in and applying the lessons from Iraq and the strategy that was successful in Iraq and taking that to Afghanistan," this official said.
Ok, this is six kinds of interesting. Charlie would love to know which specific "strategy" has been nominated for export....and whether it was based on any assessment of, you know, Afghanistan. There are some basic COIN best practices that might improve the situation in Afg (one word: sanctuary), but the broader population centric approach would require significant changes to be successfully applied there. And if McCain's crew think they can blindly transfer "lessons" from the Anbar Awakening to the assorted tribes in Afg (and NWFP?) then we're gonna have some real fireworks.
Great plan. All we have to do is: get the Afghans to divide the population through massive ethnic/sectarian cleansing, wall off the various factions, get Moqtada al-Sadr to tell his Afghan buddies to stand down (they're all Islamofascists taking orders from A-Jad bin Laden after all), strike a deal with those tribal elements that were fighting us but would be willing to enlist our support to help them vis-a-vis the Karzai government and then...balanced budget from the victory dividend!
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