The Screaming Pen

Providing Global Insight, Context, and Perspective

Classic Pen: On Prose and Politics

VIA MEDIA
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.

T.S. Eliot, The Four Quarters

Of the events of the 1930’s leading up to the Second World War, no other event inspired young ideologues more than the Spanish Civil War. Young Intellectuals enlisted in droves to fight on both sides, including the writers Ernest Hemingway and George Orwell. The socialist backed International Brigade, funded in part by the Soviet Union, allied with Spanish Republicans in an attempt to defeat the Spanish fascists led by General Francisco Franco in a war that served as a precursor to the war that by 1940 engulfed most of Europe.

A portrait of the artist as a young man

Nancy Clare Cunard, a left wing intellectual living in Paris at the time, sent out a questionnaire to two-hundred writers living in Europe. She posed the following question: “Are you for or against the government of the Republican government of Spain? Are you for, or against, Franco and Fascism? For it is impossible any longer to take no side.” The Anglo-American poet T.S. Eliot responded with a “neutral”, leading to the assumption by Cunard and others that he was either politically ignorant or sympathetic to the fascists. This was not true, however, as he was a believer in “via media” or the “middle way”, a belief that moderation is the only stance that takes into account the shortcomings of human nature. During a debate between T.S. Eliot, a fascist writer, and a communist writer, T.S. Eliot mentioned the following:

“Fascism and communism, as ideas, seem to me to be thoroughly sterilized. A revolutionary idea is one which requires a reorganization of the mind; fascism and communism is now the natural idea for the thoughtless person. This in itself is a hint that the two doctrines are merely variations of the same doctrine: and even that they are merely variations of the present state of things…. What I find in both fascism and communism is a combination of statements with unexamined enthusiasms.”

Eliot believed that these “unexamined enthusiasms” led to irrational decisions during a time when rational thought was completely necessary.

This example of moderation is still relevant today, as we are faced with an increasingly polarized nation where sides are being taken and decisions are being made, sometimes irrationally. It is always important to take a step back and objectively examine issues in context. At thescreamingpen.com we attempt to place news events in context, while providing non-partisan analysis and perspective.

-JPL

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August 22, 2006 Posted by | Author: JPL, Business, China, Energy, Europe, Financial Markets, Flat Tax, Uncategorized | Leave a comment

Herodotus Wouldn’t be Pleased

The policy of a state lies in its geography.
– Napoleon

Political scientists bicker constantly over the factors most influential to international affairs. Economics, race, force, power, globalization, culture, religion, and others are frequently mooted, yet there is at least one dimension routinely given short-shrift: geography. So fundamental is the field that it’s routinely overlooked, especially when viewed from an America that misses local fault lines in its broad, global sweep of the world, and which is fortuitously largely free of geographical conflicts itself. Other places aren’t so lucky. Here’s a survey of how geography affects three selected political and social issues around the world:


For Pete’s Sake Herodotus, Stop Making Maps of Far-Away Lands & Put On Some Clothes!

Turkey & the European Union. Turkey has been working towards admission to the EU since the 1960’s, and is now closer than ever to entry. Yet the path to membership is still far from certain, due mainly to obstreperousness from France, the Netherlands and others. The debate hinges on many angles – the nature of Turkey’s government and society, Islam, disparities in GDP per capita, and more – but one assertion routinely voiced has to do with geography: dissenters point out that most of Turkey in fact lies not in Europe, but in Asia. Divided from Europe by the Bosporus and the Sea of Marmara, Turkey does indeed touch Syria, Iraq and Iran. But the protesters’ claim is disingenuous and belied by the fact that Cyprus (the Greek half at least) – just off the coasts of Syria, Lebanon, and Israel – is an EU country that lies further from Europe than does Turkey. Geographers aren’t pleased that their trade is a guise for prejudice and insecurity.

The Shanghai Cooperation Organization. The SCO was founded in 2001 by six nations – China, Russia, Kazahkstan, Tajikistan, Uzbekistan, and Kyrgystan – and was based initially on the “Treaty of Deepening Military Trust in Border Regions” and the “Treaty on Reduction of Military Forces in Border Regions,” and now includes political, economic, cultural, and security cooperation. The group’s six members are officially “equal partners” but the locus of the group is clearly China. As China’s neighbors to the South and East are warier of the country’s hemorrhaging might, Beijing is looking towards Central Asia to build regional security hub. And only a cursory knowledge of the SCO’s member governments is needed to know that they are wicked. The Screaming Pen is losing sleep in a bad way that will only be remedied through a post in the near future.


Kurds: Cutting a Wide Swath

Kurdistan. If you’ve never heard of Kurdistan, it’s probably because it doesn’t exist; at least as a state that is. Despite numbering some 25 million, Kurdish people make up the largest ethnic group anywhere without a country. Kurdistan, however, is the term used to refer to areas dominated by Kurds, and which includes northern Iraq, southeast Turkey, northeastern Syria, and northeast Iran. An unfortunate product of haphazard colonial-era boundary-making, Kurdistan was dissected and abused by governments in faraway capitals, and – with the exception of in Iraq now – still is. In fact, the Kurdish issue is supreme in Turkey’s discussions with America over Iraq, and Turkey’s troops prey along the mountains between the two countries searching intently for Kurdish rebels.

A simple perusing of maps often confirms or explains global events and always has. When the Germans sent the Zimmerman Telegram to Mexico in 1917, in an effort to cause trouble for the United States in its own backyard, it was pure geopolitics. So next time you want to know who’s spooning with who, make sure you’ve got a good atlas on hand.

Note: The Perry-Castaneda Library Map Collection at the University of Texas, Austin, has the most comprehensive collection of maps on the internet, and is the source of most Screaming Pen plots. And in case you were wondering, Herodotus is often considered the father of history and was the maker of some of the world’s earliest maps.

– DML

 2006. All rights reserved.

June 25, 2006 Posted by | Asia, China, Europe, European Union, International Relations, Kurdistan, SCO, Turkey, Uncategorized | Leave a comment

This is Chess not Checkers That’s a Warning Shot

The Deadly Paradox of the Big Six’s Iranian Accord

It’s hard to suppress feelings of glee upon reading the headline “Six World Powers Agree on Iran.” This is the exact foundation that any diplomatic solution to the Iranian quandary must be based upon: a united international alliance providing Iran with a choice between carrots if it agrees to halt uranium enrichment and sticks if it doesn’t. A common diplomatic front brings the world one step closer to the chance for a peaceful solution; however, if the chance proves illusory it will also bring the world one step closer to war.

In the run up to Iraq in 2003, there were many arguments against the U.S. invasion, many of which could be reasonably discounted at the time. War is an extreme last resort, but the argument that it should never be used is flawed: when squared off against a murderous dictator conflict can become justifiable. Nor was U.S. belligerence a stand alone sound argument. Despite bellicose rhetoric from George Bush, Saddam Hussein had violated 18 U.N. resolutions and was sidestepping weapons inspectors. The most valid pre-war argument against going to war: that the Bush administration hadn’t exhausted all diplomatic options.


It’s your Turn, Khameini. Whatcha Gonna Tell ’em ya Big Bearded Fella?

The Diplomacy this Time

The Bush administration seems to have painfully learned how to go about building its case without alienating virtually every non-holder of an American passport. It first relied on negotiations led by the “European 3” – Britain, France, and Germany – during which Iran acquiesced to halting enrichment for a time. But Iran knew that the European trio’s silent partner held the key to the only concession vital to its survival: security. So Iran once again began work on its centrifuges.

Steadily advancing its nuclear know-how, Iran’s fiery president Mahmoud Ahmadinejad recently sent an 18-page letter to George Bush, which was touted as being the first direct communication between the two nations since the 1979 hostage crisis. Accustomed to years of frosty, static relations, Secretary Rice made a knee-jerk announcement that the letter suggested nothing new, and perhaps it didn’t. Then just this week Iran called for direct talks with America, which in the absence of a U.S. response gave Iran the impression of being patient and reasonable. So until the United States replied to these overtures – no matter the political or public relations intentions behind them – Iran would appear to be holding out the olive branch. America had to respond.

With the six-party agreement on Iran it did, and with perfect timing to boot. Iran will be presented with a package of incentives in return for a “verifiable” halt to its enrichment activities. If it continues to pursue nuclear weapons further Security Council action could follow. Clearly, Iran has to make the next move, and crucially, America will appear to have dutifully followed a diplomatic approach supported by the Security Council nations.

This appears to be good news for advocates of multilateralism and supporters of a peaceful, diplomatic solution. It’s good news for those who wanted Europe to face up to legitimate security threats, which due to pride and matters of the heart it could not with Iraq. And it’s good news for those who want to see more than obstructionism and the unbridled pursuit of resources from Russia and China.

The Ball’s in Their Court

Thus, the question now becomes, “What will Iran do?” The preferred choice is for it to accept the incentives offered and abandon its desire for nuclear weapons (merely nuclear energy, it says). This is possible but would likely only come in the form of a comprehensive strategic agreement leaving Iran assured of its own security. Observers should also note that the Iranian issue is not confined to uranium enrichment: Iran plays a powerful role in neighboring Iraq, has long supported insurgents in Lebanon, Palestine, and elsewhere; and exercises more power than many realize. It recently won backing for its nuclear program from Indonesia, and China and Russia usually provide solid political cover. These will have to be addressed.

The true test of the “Big Six’s” solidarity will come if Iran decides to balk: will the world support increasingly tough sanctions, or will views diverge? Governments around the world – now realizing that true threats must be confronted – may be more likely to follow, because they too have played an active diplomatic role this time round. Despite this, these countries’ citizens will have seen Iraq and the gruesomeness of war and are likely to feel much the same as they did before Iraq.

Will Iran stall, varying negotiations with concealment? Probably. This much is true, however: until now, with a dire situation in Iraq and virulent anti-Americanism everywhere, talk of military action against Iran seemed distant. Yet now, if diplomacy is given a fair chance and fails nonetheless, Iranian rejectionism will leave us on the precipice of Iraq redux. And this time – no matter the political logic beforehand– military action would be no more likely to create a stable or friendly or democratic country out of Iran than Iraq.

– DML

 2006. All rights reserved.

Note: The Iranian situation is highly fluid at present, with half a dozen diplomatic developments and announcements (see links below) being made in the past few days alone. Contrast this with the lack of bilateral contact that existed for the past 27 years between the two countries. As stated above, this will either lead to a breakthrough or a serious deepening of the standoff. Keep watching.

U.S. Offers to Join European Three in Talks with Iran
Iran Welcomes Talks, Rejects U.S. Conditions
Iran Considers Offer from Big Six
Washington Post Analysis

June 2, 2006 Posted by | Asia, Author: DML, China, Europe, France, Germany, International Relations, Iran, Iraq, Middle East, Nuclear Weapons, Oil, Palestine, Politics, Russia, United States, WMD | Leave a comment

Dude, Where’s My W-2?

Let me tell you how it will be;
There’s one for you, nineteen for me.
‘Cause I’m the taxman,
Yeah, I’m the taxman.

-The Beatles

 

A Possible Impetus For Change

Last fall, the international media focused much of its attention on European elections that promised to shake up the old European order. For those seeking real economic change in the form of market liberalization, those elections were partial letdowns. For instance, many analysts believe that a clear-cut Merkel victory in Germany could have provided the impetus necessary for much needed economic reform and market liberalization in other Western European countries. Following the formation of a grand coalition in Germany, it appears that constant compromise may prevent Angela Merkel, the new Chancellor of Germany, from carrying out her intended reforms. It is also uncertain what direction Poland’s newly elected center right coalition government will take the country. Before coming to the conclusion that all hope is lost regarding Western European change, one must consider an economic force that has been slowly moving westward, originating in the tiny nation of Estonia. The flat tax, which applies a constant rate of taxation, is exerting economic pressure in the form of tax competition on the high tax economies of Western Europe, slowly forcing economic change in those countries.

Reactionary Yet Opportunistic

From a historical perspective, it is interesting that many of the countries who have enacted constant rates are ex-communist nations who have voluntarily moved in the opposite direction of Soviet central planning, the failed communist system that attempted to control every aspect of economic activity. Much like the iron curtain before it, the flat tax movement and free market values are slowly moving westward, with Greece facing a crucial decision this year regarding the adoption of a 25% flat tax. In the recent Polish election, the pro flat tax Civic Platform Party came in a close second, and will now share power with the victorious Law and Justice party. In Germany, the early election campaign of Angela Merkel featured a proposed finance minister who was an outspoken supporter of a flat tax. Unlike the spread of communism, however, the flat tax movement is being voluntarily implemented.

Mail Order Brides are no Longer Estonia’s Chief Export

 

The flat tax system, which uses a single tax rate that is applied to wage earners and corporations that begins taxing after a certain income threshold is reached, has been successful in several nations beginning in 1994, when Estonia introduced a 24% tax rate. By attracting business from abroad, Estonia’s economy grew at double digits in 1997, and has averaged about 6% GDP growth per year since. Russia, a nation whose complicated tax code caused widespread evasion, instituted a flat tax in 2001. It is estimated that in the years leading up to the 2001 flat tax, Russia’s biggest corporations ignored 29% of their tax obligations, while 63% substituted goods or services instead of hard currency. This made Russia susceptible to debt defaults as their coffers reached record lows. In 1998 Russian government revenues were 12.4% of GDP. By implementing a simplified tax code, Russia eliminated loopholes and increased its revenues in real terms by 28% in 2001, 21% in 2002, and 31% in 2004.

Opponents of a flat tax, who believe that a flat tax is meant to line the pockets of the rich and will result in lower government revenues, fail to realize that flat tax systems do not tax earners below a certain threshold, allowing the poorest workers to be exempt from taxes. The revenue question is answered by looking at Russia, a nation who learned that the best way to get higher revenues is to give people more incentive to report their taxes by keeping tax rates low. Ideally, a low tax rate would result in more wealth creation, which could generate even greater revenue. Remember, the examples cited in this article are from countries that had an insanely restrictive, command style tax code. The flat tax is also making Western Europe increasingly uncompetitive, as businesses and investment dollars flow into Eastern Europe.

Implications

In response to widespread eastern European acceptance of a flat tax, Western Europe is beginning to consider tax reform. According to the Economist, Germany has already made plans to cut its corporate tax rate from 25% to 19%, and the in Britain, the Opposition Conservatives announced on September 7, that they would set up a panel to study a flat tax proposal. As investment dollars and businesses continue to flock to Eastern Europe from Western Europe, it will be increasingly apparent to Western Europe that in order to maintain its standard of living, it will need to make radical changes in its tax policy.

Conclusions

It will be interesting to see how the Western European nations deal with tax competition from the east. It is apparent that the increasingly uncompetitive Western European nations will need to modernize their economies in order to compete. It will also be interesting to see how the continued success of an Eastern European flat tax effects the current tax situation in America, where our own tax code has broken the nine million word mark.

-JPL

Links of Interest

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/31/AR2006053102043.html

 

May 31, 2006 Posted by | Author: JPL, Emerging Markets, Europe, Flat Tax, Germany, Globalisation, Politics, Russia, Unemployment, World Markets | 16 Comments

Cours, camarade, le vieux monde est derrière toi !

On the Anniversary of a Riot

On May 17, 1968, a general strike paralyzed France. Started by angry students at Paris’ Sorbonne, the powerful French Labor unions eventually joined, resulting in millions of French workers walking out of work demanding economic and social change. A week later, on May 24 1968, radical students raised a red flag over the Paris Stock Exchange and threatened to burn it to the ground. Eventually, Prime Minister Pompidou negotiated with prominent Union leaders and appeased the students by passing legislation that improved education funding and guaranteed minimum working conditions. French politicians, eager to please their constitutents and afraid of radical rabble rousers, passed increasingly socialist legislation in the following years that created an almost unpenetrable labor market for outsiders, strict hiring and firing laws, high costs for employers, and near ten percent unemployment. Although some good came out of changes brought on after the 1968 riots, the employment situation caused by socialist French employment policies has resulted in a nation in dire need of labor market liberalization. We will evidence this by adding context and perspective to two subsequent riots, those that took place in Fall of 2005, and the most recent riots related to Chirac’s CPE.

When thrown, stale baguettes make surprisingly effective projectiles
Fast Forward

Initially incited by the accidental death of a muslim youth, the riots that shook France in the Fall of 2005 lasted over twenty days, as disaffected muslim youth in the suburbs of Paris burnt cars and businesses. Seen as a threat to the French secular model, French muslims of North African descent face discrimination in an almost impenetrable workplace. Unemployment among native born French university graduates of North African origin is estimated by the BBC to be 26.5%, compared to white graduates’ 5%. According to BBC, “a French non-profit group said that after they sent identical curriculum vitaes (CVs) to French companies with European- and African or Muslim-sounding names attached, they found CVs with African or Muslim sounding names were systematically discarded. In addition, they have claimed widespread use of markings indicating ethnicity in employers’ databases and that discrimination is more widespread for those with college degrees than for those without.” It is evident that the riots that gripped France in the Fall of 2005 were the result of an unemployed, disenfranchised population who were fed up with their treatment at the hands of the society that has failed them.

When clowns cry

The CPE

In an attempt to liberalize the choked up French employment situation, Prime Minister Dominique De Villepin proposed the CPE, an amendment that attempted to tackle double digit unemployment. In France, after you are hired by a company, it is almost impossible to be let go, barring factors such as being violent on the job. This makes it extremely hard to fire incompetent workers or those not suited for the position, causing employers to be reluctant to hire. The CPE’s most controversial element was that it allowed workers under the age of 26, or who have been there less than two years, to be let go if the employer did not think they were right for the position for whatever reason. The proposal of the CPE was met by riots and protests as over three million demonstrated on April 4, 2006. The CPE was withdrawn on April 10, 2006.

Let them eat brie

Conclusions

It is apparent that employment has been a contentious issue among the French for the past few decades. The riots in 1968 helped bring about the socialist employment practices that have been partly responsible for the high unemployment rate today due to employer’s reluctance to hire new workers. It is also apparent that the French muslim underclass, who are discriminated against in the workplace, desperately need measures such as the CPE to be passed in order for their condition to be improved, as a loosening of hiring restrictions would allow them to prove themselves as equals in the workplace. The mostly white protesters that were protesting the CPE could have been doing so in an attempt to retain their status in a country that is increasingly threatened by the pressure of globalisation, something that will eventually cause the French to modernize or face serious economic and social consequences.

-JPL

May 18, 2006 Posted by | Author: JPL, Europe, France, Globalisation, Uncategorized, Unemployment | 1 Comment

Germany’s New Popularity

A Dangerous Precedent: The Price of Paying Ransom for Hostages in Iraq

German nationals in Iraq have reason to be both comforted and disturbed by reports (in Der Speigel magazine and on ARD public TV) that Berlin broke precedent and paid ransom money directly to insurgent groups to secure the release of two engineers this week. German ex-pats can take solace in knowing that, if captured, there may be a monetary incentive in not beheading them on camera. At the same time, Germans are likely to become increasingly prized targets, potentially leading to a spike in abductions.

 
But next time?

At that point, will Germany continue the payments, furthering the crisis, or will the policy’s lack of efficacy lead to a reversal and the bloody sacrifice of future hostages? Will the government consider paying ransom only in Iraq, or in other global hotspots as well? Whatever the answers to these questions – and although this would be difficult to explain to the released captives – the strategic outcome looks gloomy for both German citizens and companies with interests in Iraq and beyond: in Nigeria, Afghanistan, Pakistan, and every other place where restive groups may look to cash in.

Cruel but Vindicated

Against this backdrop, the U.S. government’s long-standing declaratory policy of refusing to negotiate or barter with terrorists over hostages – however cold-hearted and unfeeling – appears justified. While the sentimental and PR value of capturing an American will remain an impetus to their abduction, at least they can know there is no additional financial motivation in doing so. No matter, some will say: simply being American is enough in some parts of the world.

– DML

Of note: In 2003, German companies spent 190 million Euros of FDI and imported 675 million Euros of products, much of it petroleum, from Nigeria. While imports “dropped sharply” in 2004 (the latest year for which figures were available) according to the German Foreign Ministry, firms doing business in the Nigerian delta – where much of the country’s oil is found and where MEND (Movement for the Emancipation of the Nigerian Delta), among others, has recently ramped up kidnapping and extortion efforts – should be acutely aware of the risks engendered by claims of ransom payments in Iraq.

 2006. All rights reserved.

May 6, 2006 Posted by | Author: DML, Europe, Germany, Iraq, Middle East, The War on Terror, United States | Leave a comment