Exploding the free trade myth

David Sirota's article for the July issue of In These Times isn't one of his trademark rants on the latest outrageous behavior committed by the Washington DC and Wall Street Establishments; instead it is a casual yet illuminating interview with the controversial, heterodox English development economist Ha-Joon Chang, discussing his latest book "Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism." The book, and the interview discussing it, does a yeoman's job of dissecting the mythology behind so-called international "free" trade as compared with the more restrictive, protectivist trade regimes that have succeeded in helping transform developing countries into wealthy, developed economies (take, for example, the US) via the implementation of tariffs.

The received wisdom imparted by the "Wise Men" of economics, that is, those pundits, academics, policy-makers and journalists who seek to remind average, everyday folks like you and me every time they open up their mouths that they are the type of "Serious People" who deserve our fealty and unquestioned trust and support, is that free trade somehow benefits all parties in the global marketplace for goods and services. In other words, forget the idea that the very rules established by the global elites for the global elites by design create 'winners' and 'losers'. The winners are those who the rules of capitalism already favor: indeed, it is the existence of a not so subtle institutional bias that creates the dangerous downward spiral of capitalism is the first place.

Sirota's interview with Chang is truly illuminating and I highly recommend reading both the entire article in In These Times - as well as the meticulously researched and brilliantly argued book by Chang (which I recently completed). One of the most important quotes from Chang I think is:

In the present atmosphere, once you say anything positive about protectionism, people dismiss you as a supporter of North Korea or Cuba.

The reality is that few countries practice pure free trade or pure protectionism. Most countries practice free trade in some areas and protectionism in others, with varying mixes across countries. This is basically because policy-makers instinctively understand that different sectors have different needs — sectors that are just emerging or in decline need more protection and subsidies in the same way that children and the elderly need more support than able-bodied adults do.

And one of Sirota's keenest, most important observations is:

Chang shows how the entire debate over trade has divorced itself from history and economic reality. Phrases like “free trade,” in fact, are misnomers unto themselves, leading the world into a globalization debate whose basic premises are inaccurate.

But that’s not all that is inaccurate. Chang says that while the media and political elite lead us to believe industrialized countries achieved their wealth by eliminating tariffs, history suggests it’s exactly the opposite: The strategic use of tariffs is precisely what built the industrialized world into an economic powerhouse. Bad Samaritans shows that wealthy countries’ demands on poor countries to reduce tariffs is a way to keep the developing world in a subservient role — or a means to “kick away the ladder,” as he puts it.

Also, be sure to check out this independent review of "Bad Samaritans" by Jim Miles here, as well as this article, The Globalization of Poverty, by Antonio Juhasz appearing in Tikkun.

Why economic inequality in America matters

Long-time readers of this blog know that few issues are more important to me that economic justice, specifically the widening chasm of economic inequality in both the developed and developing worlds. In the US, the problem is really quite pronounced, despite the fact that the major media has failed to give it the in-depth and frequent coverage the phenomenon really deserves. But every six months or so, an article appears in the mainstream media which addresses the severity of the rapidly growing gulf between the super-rich and everyone else, while supplying the background information required for lay readers to understand both the scope and significance involved. The most recent example of this is this month's cover story of Harvard Magazine (h/t to Cursor).

As the article—entitled "Unequal America" and written by the publication's associate editor Elizabeth Gudrais explains: "The recent increase in inequality reflects a migration of money upward as salaries have ballooned at the top. In 1965, the average salary for a CEO of a major U.S. company was 25 times the salary of the average worker. Today, the average CEO’s pay is more than 250 times the average worker’s. At the same time, the government is doing less to redistribute income than it has at times in the past. The current top marginal tax rate—35 percent—is not the lowest it’s been—there was no federal income tax at all until 1913—but it is far lower than the 91-percent tax levied on top earners from 1951 to 1963. Meanwhile, forces such as immigration and trade policy have put pressure on wages at the bottom."

She goes on:

Tax policies and employer-pay practices affect income distribution directly. But what governs these pay practices, and why have American voters and politicians chosen the tax policies they have? One answer lies in Americans’ unique attitudes toward inequality. Asked by the International Social Survey Programme whether they agreed or disagreed with the statement that income differences in their home country are “too large,” 62 percent of Americans agreed; the median response for all 43 countries surveyed—some with a much lower degree of inequality—was 85 percent.

Americans and Europeans also tend to disagree about the causes of poverty. In a different survey—the World Values Survey, including 40 countries—American respondents were much more likely than European respondents (71 percent versus 40 percent) to agree with the statement that the poor could escape poverty if they worked hard enough. Conversely, 54 percent of European respondents, but only 30 percent of American respondents, agreed with the statement that luck determines income.

It makes intuitive sense that those who view poverty as a personal failing don’t feel compelled to redistribute money from the rich to the poor. Indeed, Ropes professor of political economy Alberto Alesina and Glimp professor of economics Edward L. Glaeser find a strong link between beliefs and tax policy: they find that a 10-percent increase in the share of the population that believes luck determines income is associated with a 3.5-percent increase in the share of GDP a given nation’s government spends on redistribution (see “Down and Out in Paris and Boston,” January-February 2005, page 14).

These attitudes, in turn, are rooted in US history, says Christopher Jencks, whose 1973 book Inequality examined social mobility in the United States. Jencks has been studying inequality and social class since the 1960s, and has written dozens of journal articles, essays, and book chapters, as well as four more books, on the subject. He looks back to the Constitution’s framers, who enshrined property rights as sacred and checked the government’s ability to control the national economy. “The founding fathers didn’t want the government to do that much,” he says.

The Constitution is structured in such a way that it is harder to change than the constitutions of Europe’s welfare states, where left-leaning groups have succeeded at writing in change. By and large, Alesina and Glaeser write, the U.S. Constitution “is still the same document approved by a minority of wealthy white men in 1776.” And the “vestiges of feudalism” in European society make leftist arguments appealing there, whereas American politicians’ rhetoric has emphasized individual agency since the time of George Washington (who wrote in 1783 that if citizens “should not be completely free and happy, the fault will be entirely their own”). The authors cite a 1980s history curriculum for public schools in California (“hardly the most right-wing of states,” they note) that instructed, “A course should assess the role of optimism and opportunity in a land of work: the belief that energy, initiative, and inventiveness will continue to provide a promising future.”

An alternative, and possibly complementary, explanation points to the United States’s particular place in geography and history. Jencks also finds this persuasive. “The highest levels of inequality are found in the New World and not the Old, for reasons we don’t understand,” he says. Societies with higher inequality also tend to have higher crime rates, although it’s not clear which way the causal arrow runs, or if it exists. “These are societies built on conquest, many of them on slavery,” Jencks adds. “A lot of the inequality may just be the legacy of those things.”

The prospect of upward mobility forms the very bedrock of the American dream, but analyses indicate that intergenerational mobility is no higher in the United States than in other developed democracies. In fact, a recent Brookings Institution report (a .pdf of the complete report can be read here) cites findings that intergenerational mobility is actually significantly higher in Norway, Finland, and Denmark—low-inequality countries where birth should be destiny if inequality, as some argue, fuels mobility.

In the United States, the correlation between parents’ income and children’s income is higher than chance: 42 percent of children born to parents in the bottom income quintile were still in the bottom quintile as adults, and 39 percent of children born to parents in the top quintile remained in the top quintile as adults, according to the Brookings analysis. But it is difficult to see whether mobility is increasing or decreasing, because it would require comparing specific individuals’ incomes to their parents’ incomes, against the wider backdrop of income distribution across society at that time. Because data with that level of detail do not exist for earlier periods, scholars can’t say with certainty whether the results represent an increase or a decrease in mobility from other periods in American history.

Americans’ steadfast belief in mobility probably stems from increases in absolute, rather than relative, mobility.

Reading the complete seven-page article will require an investment of a little bit of time, but this is one of the best pieces examining both the causes and the consequences of the wide and growing gap between the rich and poor in the US I have read in quite some time. There is quite a bit of useful data contained here from numerous studies and surveys, but I actually think the most useful aspect of this article is the broader context it provides. It does a great job of framing the problem in such a way that even people who are generally unconcerned with matters of economic injustice or progressive politics can understand why this issue is relevant to them—and society at large. The argument underlying this article is very well supported, and I think quite difficult to discount regardless of one's ideological perspective.

Also, be sure to check out the article "Our Unequal Democracy" penned back in May 2004 by Christopher Jencks from Harvard's Kennedy School, who was interviewed for this article. It deals with the slightly different issue of political inequality, which is closely wrapped up with economic inequality.

US ban on gay military personnel further discredited by new study

AP reports that according to a new study sponsored by the UC-Santa Barbara based Michael C. Palm Center, "Evidence shows that allowing gays and lesbians to serve openly [in the US armed forces"] is unlikely to pose any significant risk to morale, good order, discipline or cohesion." In other words, the idiotic Clinton administration-era policy of "Don't ask, don't tell" is pointless and should be repealed by Congress.

The study was run by a panel of four retired military officers, including the Air Force lieutenant general who was behind former President Clinton's 1993 decision that the military be required to stop questioning recruits on their sexual orientation, while simultaneously discharging anyone who was "outed" as being either gay or bisexual -- for example, by telling others about their sexual orientation, getting caught engaging in homosexual activity or marrying someone of the same sex.

From a purely logical standpoint (forgetting any moral judgements a conservative might make about people living a so-called "gay lifestyle" and engaging in gay sexual behavior), the Don't Ask, Don't Tell law never made any sense. It assumes (without any supporting evidence) that the existence of gays serving alongside heterosexuals in the military is disruptive to units and bad for morale, as well as weakening trust between those working in close quarters. Obviously, anything that would negatively affect morale and break down trust in this context would present an unacceptable risk, but it doesn't follow either theoretically or from any evidence that the presence of outed gay soldiers would lead to this at all.

For example, according to the article supporters of the 1993 ban, including one retired Army Lieutenant Colonel interviewed, support their stance with the argument that there is no empirical evidence that allowing gays to serve openly won't hurt combat effectiveness. According to this vet:

"The issue is trust and confidence among members of a unit. When some people with a different sexual orientation are in a close combat environment, it results in a lack of trust."

But why should such a policy be put in place on the grounds that there is no existing empirical evidence supporting the counter-factual claim? If anything, a policy that requires gay US army personnel to lie and deceive their colleagues on a daily basis about who they are should require the existence of strong evidence supporting the policy, as opposed to simply arguing that there is no evidence that contradicts its effectiveness. In a way, this is analogous to the legal presumption of a defendant's innocence in a US criminal trial - a standard that makes sense from both a ideological and practical matter. (I know that in other Western democracies such as the UK, a defendant is legally presumed to be guilty, a principle that has always seemed wrong-headed to me).)

The inanity of this policy is something that has bothered me ever since it was instituted 15 years ago, but is now especially ridiculous as the Pentagon is busy carrying out its so-called "Global War on Terror." For example, a bright guy I was friendly with as an undergrad at Emory named Alastair Gamble was booted out of the Army's Defense Language Institute back in 2002 after he was caught in a surprise inspection in the middle of the night with his boyfriend (See this Op-Ed he wrote for the New York Times back in 2002 and this article from the Washington Post back in 2004 for more background.)

This happened, despite the fact that Alastair and many other gay male and female service members have rare, incredibly valuable skills the armed forces rely upon to prevent terrorist attacks on our soil.

It's high time for the ban to be lifted and the policy to be consigned to the dustbin of history. If anyone reading this supports this policy, I'd be happy to publish your thoughts (as long as they are not bigoted or otherwise offensive) and/or debate the issues involved with you.

Torture is good . . . at getting false confessions

Hat tip to blogger Eric Martin at Obsidian Wings for pointing us to a front page article in the New York Times this week which reported that the interrogation techniques used by military trainers at Guantanamo Bay were derived from research from the Communist Chinese circa 1957 . . . "Used during the Korean War to obtain confessions, many of them false, from American prisoners."

So many things wrong with this picture, it's actually hard to know where to start.

Plus: Hitchens finally gets the fact that yes, the US has indeed been torturing Gitmo prisoners . . . but only after he experiences a rough simulation of waterboarding himself.

All you need to know about Neocons . . .

Courtesy of IPS News journalist Jim Lobe.

Preparing the Battlefield: The Bush Administration steps up its secret moves against Iran

Bombshell reporting from Seymour Hersh from the New Yorker, making it seem as if a war with Iran is, once again, imminent. Hersh has obviously been wrong in his reporting about the timing of a US attack on Iran in the last few years, which unfortunately for the venerable journalist who broke the story of the My Lai massacre during the Vietnam war, has given him the image of the boy who cried wolf.

More coverage on this story from the Washington Post and in these two blog posts at War and Piece.

The Return of Gunboat Diplomacy in Latin America?

Larry Birks, director of the Council on Hemispheric Affairs (Coha) discusses the Pentagon's recent move to revive the Navy's Fourth Fleet and its patrolling of Latin American and Caribbean waters. According to a brief written by Birks for Coha at the beginning of the month: "The return of the Fourth Fleet, largely unnoticed by the US press, appears to represent a policy shift that projects an image of Washington once again asserting its military authority on the [Latin American] region."

Discussing Washington's decision to relaunch the Fourth Fleet after years of dormancy - along with almost a decade of Washington ignoring the region both diplomatically and militarily - from a geopolitical point of view, Coha notes that the revival of the Fourth Fleet may "do little more than attempt to introduce a quick fix to Bush’s failed US policy towards Latin America." In his report, Birks argues that the Fleet’s rebirth implies that the Bush administration's "gun boat diplomacy" represents a "new call to arms."

The U.S. may again be prepared to use the prospect of military force if it is found necessary to protect US national interests in Latin America. In particular, the possibility of using the Fourth Fleet already seems to be involved in a calculated and provocative move against Washington’s current bete noir, Hugo Chávez. As Admiral Gary Roughead, chief of naval operations, stated, “this change increases our emphasis in the region on employing naval forces to build confidence and trust […] through collective maritime security efforts that focus on common threats and mutual interests.”

The most ominous observation in this brief report, however, is the fact that given the Pentagon’s recent track record of setting and achieving its strategic objectives (in particular, during the tenure of Defense Secretary Rumsfeld) in particular attempting to improve ties with militaries throughout the Americas by regularly organizing joint “ministerials,” could inadvertently encourage Latin American militaries to "initiate similar scenarios of expansion, modernization, and the revival of their dangerous central roles plagued by past military juntas in their respective societies."

IFC's "Doing Business" Index is a misleading measurement

The World Bank Group's International Finance Corporation (or IFC - for additional background, see here and here) publishes an annual report it refers to as the Doing Business index (DB). This index purports to evaluate and rank business conditions in Developing countries - looking at a jurisdiction's regulatory environment and how it affects the relative "ease of doing business" there for multinational corporations. Importantly, the DB index is meant to measure regulations directly affecting businesses and does not directly measure more general conditions such as a nation's proximity to large markets, quality of infrastructure, inflation, or crime.

As you might expect from a World Bank study, the underlying philosophy steering the index's methodology here is straight up neoliberalism. For instance, the countries that by design will score highest on the index have strong legal protections for international investors, make sure it is easy for an entrepreneur to raise funds to start up and run a new business . . and will have very weak or even non-existent legal protections for workers. According to the IFC, labor regulations and the codification of workers rights are in practice antithetical to a country being considered by the institution as a good place to do business.

But interestingly enough, as reported earlier this month by IPS News, none other than the World Bank Group's own Internal Evaluation Group has concluded that the index is counterproductive and seriously flawed both conceptually and methodologically.

From the article by IPS News (published on June 16):

The World Bank's flagship effort to promote business-led economic growth is ideologically stilted and of little practical use, says the bank's Internal Evaluation Group (IEG). . . the IEG said the Doing Business (DB) survey is prejudiced in favour of deregulation, overstates its conclusions, and shows "no statistically significant relationship" between its indicators and broader economic growth, much less improvements in national well-being.

At issue is the Doing Business Index, in which the bank's private unit, the International Finance Corporation (IFC), ranks 178 countries on how conducive they are to private enterprise. Those that make it easiest to start and run a private enterprise, as measured by 10 indicators, earn the highest marks.

( . . . )

Even so, developing and former Soviet economies in particular perform legal and political contortions to improve their ranking in hopes of boosting foreign investment and with the expectation - stoked by the bank - that increased business activity will translate into faster economic growth.

The bank's Internal Evaluation Group (IEG), in a report released late Thursday, said the Doing Business (DB) survey is prejudiced in favour of deregulation, overstates its conclusions, and shows "no statistically significant relationship" between its indicators and broader economic growth, much less improvements in national well-being.

In addition, see this critique of the DB index from the largest trade union federation in the world - the ITUC - here (.pdf). It provides a detailed analysis of how the World Bank is actually encouraging developing countries to make it easier for the private sector to fire people en mass, as long as capital has free reign for cross-border investment. This is yet another sad reminder of the moral and intellectual bankruptcy of neoliberalism and the legacy of the Washington Consensus - a lesson that the World Bank and other multilaterals seem intent on not learning.

Is al Qaeda beating Pentagon for "hearts and minds" of Iraqis?

The answer to this tantalizing question appears to be: Yes.

This correspondence from Washington Post reporter Craig Whitlock wins the inagural prize for this blog's troubling but unsurprising news item of the day. Check out the transcript and both articles by Whitlock on how the US is managing to lose the pitched Middle East public relations battle against al Qaeda, despite this country's huge expenditure of resources in the process.

For an example of this expenditure, an interesting discussion of the US-broadcast television station al Hurra, which is a tool of "US diplomacy" (i.e.: propaganda campaign) for the Middle East region where it is broadcast, can be found in the transcript here.

Additionally, for a radically different perspective on how the US is doing in the "war" against al Qaeda, see this article by James Fallow's published by The Atlantic back in September 2006 here. Fallows' argument boils down to: "America has won the media war against al Qaeda already . . . therefore, we should simply declare victory and get out."

Democratic and Republican lawmakers vote for a permanent National Surveillance State

Scott Horton, writing in Harper's Online, makes an eloquent and well-reasoned case as to why not only is the administration's continued illegal use of the Foreign Intelligence Surveillance Act - or FISA - (which may have been going on even before 9/11, possibly as far back as 2000) an abomination, but so too is the House Democratic leadership's proposed "compromise" legislation.

On top of the House and Senate Democrats' utter collapse on attaching a timeline for withdrawal from Iraq, it appears as if the party that won the 2006 midterm elections on the mantle of change will soon be selling out the American public on their constitutionally-protected civil liberties.

For more on the FISA "compromise" and how the Democratic party has completely sold out, be sure to check out "Democrats Have Legalized Bush's Crimes" by journalist Robert Parry here, as well as this article in The American Prospect fittingly enough entitled "Democrats Capitulate on FISA."

Update (6/27): For more depressing news on the Democratic party's utter sellout on the Uraq war, see this dispatch from Reuters: "Congress passes new Iraq war funds."

The U.S. Senate on Thursday approved $161.8 billion in new funds to continue fighting the wars in Iraq and Afghanistan for the next year, without timetables for withdrawing combat troops.

The House of Representatives passed an identical bill last week. President George W. Bush is expected to promptly sign the measure into law once he receives it from Congress.

The Senate's 92-6 vote to pass the war-funding bill marked a victory for Bush, who has vigorously opposed any move by Congress to impose timetables for ending the Iraq war, now in its sixth year.

Democrats, who are the majority party in Congress, repeatedly had tried to set such dates, most recently with a House vote in May calling for troop withdrawals to be completed by December 31, 2009.

The new war money could last through mid-2009, well past Bush's departure from office on January 20.

The political fallout from declining purchasing power

In one of his typically brilliant editorials, Le Monde diplo editor Serge Halimi notes the continuously widening gulf between what policymakers none other than former US Treasury Secretary Summers referred to as "a growing recognition by workers that what was good for the global economy and its business champions was not necessarily good for them.” As Halimi points out, this is a wholesale admission by political elites of a "decoupling" of the interests of business and citizens as a result of corporate globalization, fiscal policy and other causes. In other words, while it is important to note that trends such as the current global food crisis - marked by runaway price inflation - and declining purchasing power due to wages failing to keep up with inflation is destroying the credibility of governments worldwide in the eyes of its people; it is necessary to take the next step logically.

As Halimi points out (and what bears repeating): "Stagnation or a decline in purchasing power was the natural result of political choices taken after a war on workers, in the good cause of increasing competitiveness and reducing the cost of labour." He refers in the quote above specifically to EU-member nations such as Italy and Spain, although in context it is clear other industrialized nations such as the UK and the US are equally implicated.

Gazing toward the Iranian front

From the Christian Science Monitor today:

Pressure is building on Iran. This week Europe agreed to new sanctions and President Bush again suggested something more serious – possible military strikes – if the Islamic Republic doesn't bend to the will of the international community on its nuclear program.

But increasingly military analysts are warning of severe consequences if the US begins a shooting war with Iran. While Iranian forces are no match for American technology on a conventional battlefield, Iran has shown that it can bite back in unconventional ways.

Iranian networks in Iraq and Afghanistan could imperil US interests there; American forces throughout the Gulf region could be targeted by asymmetric methods and lethal rocket barrages; and Iranian partners across the region – such as Hezbollah in Lebanon – could be mobilized to engage in an anti-US fight.

Iran's response could also be global, analysts say, but the scale would depend on the scale of the US attack. "One very important issue from a US intelligence perspective, [the Iranian reaction] is probably more unpredictable than the Al Qaeda threat," says Magnus Ranstorp at the Center for Asymmetric Threat Studies at the Swedish National Defense College in Stockholm.

"I doubt very much our ability to manage some of the consequences," says Mr. Ranstorp, noting that Iranian revenge attacks in the past have been marked by "plausible deniability" and have had global reach.

Of course, it really is unfathomable, at least to me, that the US would actually attack Iran with airstrikes, etc given the tinderbox the Middle East / West Asian region currently is with US troops occupying Iraq and Afghanistan to either side of our next prospective target. The likelihood that such an attack - even in the form of very "limited, targeted" strikes on hardened military position - is near zero for 2008, but a Neoconservative oriented McCain administration could perceivably pull the trigger some time next year.

Beyond the mortal carnage such an assault would inevitably lead to, it really is questionable how the US could afford to pay for what would more than likely end up as a long-term military campaign and occupation, complete with guerilla attacks that really would make the Iraqi front to the west look like a cakewalk.

Although, its been five years since we've fulfilled the Ledeen Doctrine and thrown a defenseless Third World country against the wall to remind the world community that we "mean business."

On the other hand, the Pentagon's MO is always to attack only countries that cannot legitimately fight back in order to ensure a short and decisive destruction and a propaganda victory for mass media consumption.

Reviewing the oil factor and the invasion of Iraq

Liberal blogger Matthew Yglesias gets it very wrong in his most recent post. Linking to an article from today's New York Times, and excerpting these graphs in particular:

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat. [...]

The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.

There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.

He makes several startling points - assumptions really - for a self-described "liberal interventionist" pundit regarding the motivations for the war in Iraq and the critical geopolitical role control of the Middle East region's oil resources played

These strange arguments consist of these sage observations (from a liberal who just wrote a book on the war in Iraq and US foreign/military power in general:

I think the evidence is clear that the Bush administration went to war in Iraq because it's run by crazy people. The oil money more plausibly comes into play in explaining the desire to stay at war forever. After all, these companies (or their corporate ancestors) had oil contracts in Iraq in the past and now they're getting them back "36 years after losing their oil concession to nationalization as Saddam Hussein rose to power." Nationalization, you see, is a substantial risk of doing business -- especially natural resource business -- in unstable countries. But a given government is much, much, much less likely to nationalize western countries' assets if it's dependent on external U.S. military support and especially if its security services are nicely enmeshed with the U.S. military.

Our troops can "curb Iranian influence" and provide "stability" all of which is good for business. But don't call it imperialism, we're there to help!

So many things wrong here. Even the noxious Alan Greenspan has recognized the fact that, yes, oil was a huge factor behind the 2003 invasion (or "should have been".)

From comments to the post:

Oil is currently the lifeblood of the world economy whether or not we wish this to be true. A stable supply is crucial in determining whether we'll have a long glide path to alternate energy sources, or a world depression with associated wars and chaos. This is why countries like South Korea and Japan along with most of the other important industrialized democracies supported the invasion to overturn Saddam, and even autocracies like Russia and China were prepared to go along before France, much to their bemusement, decided to pull the plug. Of course, the giant deal Saddam signed with Total/Fina/Elf to develop fully one third of Iraq's vast reserves might have had something to do with that.

It is far less important who participates in the development of Iraq's reserves than that they be developed and put on the world market, where attentive readers may note that they are purchased rather than "grabbed".

and . . .

Nationalization, you see, is a substantial risk of doing business -- especially natural resource business -- in unstable countries.

Not true, historically. A Strongman who nationalizes oil brings relative stability to an unstable region, and buying into a cartel ups the profit. When Iraq (or anyone else) nationalized oil, did they just hire their own people to get the job done or bring in Bigass Oil Countries?

For more on the role Middle East oil supply is playing for the global economy, see this article by Robert Weissman (and this one from last September, too).

Update: Perhaps Yglesias should check out this editorial by Tom Engelhardt.

Senate Intel Committee completely drops the ball on WHIG investigation

What a sad state of affairs. Raw Story reports that the White House Iraq Group scandal was found by a Senate Intelligence Committee report (which can be viewed as two separate .pdf files here and here) which:

Examin[ed] the pre-war speeches and public statements of President Bush, Vice President Cheney and other administration officials, the first two speeches presenting the case for war were not vetted by intelligence analysts, and generally concluded that administration officials overstated the case for war. Unexamined by the committee were the behind-the-scenes machinations of the White House Iraq Group, a collection of Bush loyalists and political experts tasked with presenting the case for war.

Apparently, because Chairman Jay Rockefeller saw the WHIG as merely a "public relations group", it consequently fell outside the scope of the Committee's jurisdiction.

Huh? I guess if I were an reporter, I would be curious as to which Senate committee would have jurisdiction over this crime?