Wednesday, July 27, 2011

A brighter future for Southeast Europe

My column in the Sky Hi News July 27 2011
On a recent cruise on the Danube River from Budapest to the Black Sea, I was struck by both the folly and resilience of humankind.

Our boat stopped to explore Hungary, Croatia, Serbia, Bulgaria and Romania. These countries were in various stages of recovery from domination by the USSR that ended 20 years ago.

Post-World War II, the USSR imposed centrally planned economic systems on its satellites. It spawned a rush to industrialization in the mostly rural and agricultural countries of southeastern Europe to provide jobs and to manufacture goods, mostly for the benefit of the Soviet Union.

The official Communist economy was only half of the story.  Gray and black markets emerged to meet consumer demands neglected by central planning. Corruption, bribery, and barter fostered by the shadow economies continued even after the fall of Communist governments. Those former satellites are learning a sad lesson: The business most able to deliver bribe money and possessing the right connections may not offer the best quality, price, and efficient delivery. They are unable to compete in a capitalist world economy. The rusting carcasses of abandoned factories littered the banks of the Danube and were particularly visible in Bulgaria.

Mostly the transition from Communism to capitalism had been peaceful with two major exceptions. In Romania, a totalitarian Communist dictator, Nicolae Ceausescu, had risen to power and was killed in a bloody popular uprising in 1989. His role model had been North Korea and he built grandiose government buildings and apartment complexes for Communist party members which, as one Romanian wag said, “were built by the people but not for the people.”

Former Yugoslavia broke apart as Serbia and Croatia fought bloody wars in the 1990s to settle old scores that predated the World Wars. Now separate and independent, both countries are five years behind the rest of southeast Europe, having to recover from both the fall of Communism and war.

The European Union has helped economic development by granting membership to all but Croatia and Serbia. The EU has provided economic assistance, free trade zones, and setting standards. Croatia and Serbia are hoping for membership in the EU, but the process is years away because the EU learned a bitter lesson in quickly admitting Bulgaria and Romania …the importance of eliminating a culture of corruption before integrating economies into the Western system.

The Danube itself is now nearly empty of commercial barges. Enormous amounts of money had been spent in the Communist era on the lower Danube on a series of impressive dams and locks to make it more navigable .The expense may have been justified when the factories were producing, but often our passenger boat was the only vessel in sight.

The good news is that the individual human spirit to succeed is winning. Historical monuments and buildings have been restored to their former glory. New business models and tourism have replaced some of the old ways of doing business.

Varying in degree from country to country, private residences, farms and castles have been returned to pre-Communist owners. Many owners have plastered over their homes' peeling stucco façades in spite of the expense. Increased car ownership has caused traffic and parking problems that are monuments in themselves to newly emerging economies.

Those who learned their trades and methods of governing under the Communist system are still in power and with varying degrees of success they are trying to shake off old habits of doing business. Young people are impatient and often jobless, living with parents as they wait for the economy to improve. One mid-20-something said, “We are just waiting until the old generation dies off so we can get on with our lives.”

Therein lies the hope of southeast Europe. An internet-savvy generation is biding time until the old order fades away, retires, or is voted out of office. Young people are optimistic their future will be brighter, and I share their optimism.

Friday, July 22, 2011

Two mass murderers brought to justice in one year

My column in the Sky Hi News July 20,2011
The year 2011 will be remembered as the year two mass murders were caught.

Osama Bin Laden was one. The other, the Bosnian Serb Gen. Ratko Mladic, was indicted by the Hague Tribunal for crafting and carrying out ethnic cleansing in the Balkan wars of the 1990s . He was arrested in May and his trial has begun.

The Balkan wars had been forgotten by many except the European Union, which put handing over Mladic as one of the conditions for Serbia's admittance. Mladic was the second high profile Serb to sit in the dock at the Hague. The other was Slobodan Milosovic.

 A three-year siege of Bosnia's capital Sarajevo, which resulted in the death of 10,000 Muslims and Catholics, was overseen by Mladic. The world, and particularly Europe, dithered in the name of “fairness” to both sides. It was the massacre of more than 7,000 Muslim males between the ages of 10 and 77 in Srebenica in 1995 that was the catalyst for worldwide outrage, which ended the phase of the war that dragged on in Kosovo, ending with NATO bombing Belgrade. The war crimes court in the Hague had indicted Mladic in 1996 for carrying out the massacre.

Bin Laden's admitted masterminding of Sept. 11 and Mladic's Srebenica outraged the Western world and the West drew a line of behavior that was Post World War II unacceptable. Both used terror and the killing of innocents to advance their hate-based goals. Terror, which Mladic practiced to force Muslims and Croatian Catholics out of predominantly Serbian areas, was honed finely, using rape as a calculated tool and mass executions to eliminate groups. The ethnic division he engineered exists today in modern Bosnia, which is ungovernable, ungoverned, and poor.

It is suspected that Osama's supporters within Pakistan made it possible for him to live in plain sight for six years there. Until 2001 Mladic had been living a normal, open life in Belgrade, Serbia, under the protection of Slobodan Milosevic, the Serbian president, even though the Hague had issued arrest warrants in 1995. Milosovic was finally deposed and brought to the Hague in 2001 (where he died of natural causes during the trial). After 2001, some believe Mladic lived among cousins and other Bosnian Serb refugees in northern Serbia, though he kept undercover and was suspected to have been protected by elements of the Serbian military.

 In 2007, a younger generation of Serbs, feeling the results of a poor economy, elected a younger leader, Boris Tadic. Even then, it took three years to “find” Mladic. Serbians began to see membership in the European Unions as a way out of their depressed economy, enough so that the desire for moving on outweighed the Serbian nationalism that had protected Mladic.

The EU was to meet in this coming November to begin the long process to admit Serbia to the EU, but failure to capture Mladic was their deal killer. He was found, though it is believed U.S. and U.K. special forces helped, but the actual arrest was credited to the Serbs themselves.

Mladic so far has been disruptive in the courtroom. He will probably try to claim he knew nothing and was not in control. The Hague Court has always been condemned by die hard Serbian nationalist supporters as anti-Serb. Sixteen years of evidence gathering and a pledge by President Tadic to bring to justice to Mladic's lieutenants may make the Mladic defense a weak one.

Perhaps now Serbia can move forward toward a better economy and connections with Western Europe as it begins the long process to meet the other criteria of EU admittance. 

Perhaps now Bosnia can also begin to heal, though memories of such atrocities will take generations to dim. Perhaps now that the tyrants of this world who are motivated by ethnic and religious hatred to use terrorism as a tool know that eventually they will pay for their outrages against humanity.

Wednesday, July 13, 2011

A possible compromise on entitlements?

In the summer of 2011 the 2012 elections seem very close as the matadors and the picadors are already goading the bull for the final fight. Whose blood will be spilled and how much of it will be bull is yet to be determined. Much can happen in a year, but here is how the contest looks today.

The economic situation is indeed not where the Obama administration would have it. The GOP wants to play games with the debt ceiling but they have only come up with budget-cutting plans that even made the Teaparty choke. Unfortunately, both extreme political wings have failed to do more than object and they propose the kinds of cuts more liking to their ideology when a comprehensive or different approach would make each thrust of the sword seem less painful.

The GOP smells blood: “Obama failed the American people. He did not pull us out of the recession as well as he promised; Keynes and government stimulus are dead; long live tax cuts as the only valid stimulus.”

Obama supporters retort, “Tax cuts never pulled us out of recessions; they may have a track record some other time in the business cycle, but not now.”

The Democrats are stuck with a puny argument that, We sort of have failed to meet goals, but the Republicans would have failed worse. We at least saved us from Great Depression II.”

Not to be forgotten: Obama combined tax cuts to business, tax rebates to consumers, payroll tax cuts with government spending. His approach split the difference with Keynes and the low tax folks.

Both extreme political wings are being bull-headed. Let us credit the GOP for winning the prize for being the best at it, though. They have dug their hooves so deeply into the dirt that to change their position on no new taxes on anyone would be a defeat of epic proportions. Upping the ante, they changed the definition of taxes to include closing any loopholes, reducing any corporation welfare of subsidies and tax breaks, and coined the impossible goal of “no new revenue.”

Any and all commissions comprised of those not in Congress or running for office conclude there is no way the deficit can be reduced without more revenue and reforming entitlements.

The progressives, on the other hand, snort at any proposed change to entitlements, but backing down now would not have the same dire political blowback as it would on a GOP that wed itself with fanfare to the Ryan plan. The GOP claims it has the only plan to save Medicare and its vouchers would protect seniors (even though the CBO said it would cost seniors an average of $6,000 more per year). The GOP reassures those over 55 they will be grandfathered in, but those younger have already paid in a bundle toward their entitlements and they are not taking kindly to that subterfuge. With glee, progressives are sticking their lances into the GOP hide.

Sen. Joe Lieberman (I-Conn.) and Sen. Tom Coburn (R-Okla.) promoted a reasonable idea that deserves serious consideration: Simply move eligibility for Medicare gradually to 67. Some GOP senators just introduced a bill to save Social Security by raising eligibility ages to 70 after 2017 for those born after 1970 and reducing benefits to the rich over 50 years. The details await scoring, scrutiny, and debate, but why was the concept not applied to GOP Medicare proposals, too?

The reality is that most seniors are living longer, better and can work past 65. Family finance guru Suzy Orman on CNN recently pointed out that seniors will have to work past 65 anyway because their retirement nest egg of home equity has disappeared , a decade of market gains has been wiped out, and pension funds are shaky.

I only tolerate “ no kill” bull fights. It would also be more tolerable if partisans would not fight to the death and sincerely seek out the best and least painful plans.

Wednesday, July 6, 2011

Obama's Leadership style

The other day I was asked by a conservative friend of mine if I liked President Obama. Yes, I replied. I thought he had a good grasp of what was happening in the world and was intelligent and thoughtful.

The GOP is trying to turn these personal attributes into negative assets, accusing Obama of being a poor leader. I recently read an open memo from Karl Rove, the Republican strategist, warning Republicans not to attack the president personally because polls show he was liked personally by a very large number of the electorate. Instead, he should be attacked on the issues.

Recent GOP strategy has taken the third route: attacking his leadership abilities. However, what may be Obama's leadership style could be of some value as good strategy as well.

Suspicions that somehow Obama was not a loyal American and a dangerous secret Muslim seemed to have receded to the shadows with his “getting bin Laden.” His approval ratings on national security have risen to the 70 percentiles. For most Americans he has passed the Commander in Chief, world class leadership test. His lifestyle personifying family values leads by example.

The attacks against Obama's leadership are being phrased in terms that “He leads from behind”; he does not disclose what he wants to do until everyone else does. He takes a long time to make a decision, listening to competing views from his close advisers first and ruling decisively later, and letting this opponents hang themselves with unpopular trial balloons and proposals. Why do Republicans try to make a big deal of this?

After all, much of Obama's style could be considered adult behavior and wisdom and even good strategy as practiced by great poker players who hold their cards close.

The economy is Obama's Achilles heel that is now feeding the “leadership lacking” feeding frenzy. It has not recovered from the worst conditions since the Great Depression with the speed that anyone in the administration or in the general electorate had hoped. But while everyone with whom I have spoken feel their businesses and personal economic conditions are grim, they see some gradual improvement.

President Obama has made himself vulnerable to charges of failure to lead the parade in presenting a plan to improve the economy. His natural inclination is to think in terms of deductive reasoning that he expresses in paragraphs. He assumes, mistakenly sometimes, the public understands the whys of an issue as he exhorts them to accept his conclusions.

Until recently Obama has delayed responding immediately to Republican talking points, allowing his opponents to repeat half truths and non-factual points unchallenged until the public accepts them as gospel. The health care reform debate is a case in point. The GOP turned a positive improvement to peoples' lives into threatening negatives of death panels and soaring costs that ignored Obama care's savings to Medicare, federal deficits, and the entire health care system.

What is happening now is strategic jockeying for positions for the 2012 election. At stake is who will come up with the best plan to right the economy. The strategy practiced by both parties is predicated on who is going to take the fall for cuts in government services treasured by large constituency blocks, increasing tax burdens, reduction in subsidies to certain industries, and in removing special interest tax breaks.

The Republicans had it good so long as they spoke in generalities and avoided fingering what programs and entitlements they would touch. Their strategic error was buying into the Ryan Plan to cut Medicare benefits, condemned soundly by even their core supporters. Their blame game that Obama caused of the economic hard times failed to catch fire, too, as about 65 percent of the electorate did not fall for that line.

True, the president has held back on an economic recovery plan and let the Republicans take the fall first. It may not be leading from the front, but it may prove to be clever political strategy.