Sunday, April 26, 2009

Pakistan Watch - 6

Nadeem Paracha writes in Dawn that Pakistanis have been brainwashed into accepting a degenerated form of political Islam, which is not connected to their traditions.
Pakistanis eventually gobbled up a myopic and unthinking brand of Islamic logic. So much so, that today the overall intellectual faculties of critique in the society have been overpowered by loud discourses that are incapable of ever venturing outside from the top-of-the-mind clichés about religion that have been fed to us ever since the 1980s.

These clichés and notions were cleverly engineered into our system by years and years of misinformation on the subject. That’s why most Pakistanis today, both young and old, become like social time bombs, always going off the moment anyone dares question these notions.
(emphasis added)

The author continues:
To tackle and face it, we will have to liberate our minds from the concoctions we’ve been fed in the name of Political Islam and history. We need to become critical again, so we can escape the unfounded guilt many of us feel in responding rationally to anyone calling for the implantation of ‘divine laws’ and ‘holy writ’.
(emphasis added)

Indoctrination that produces guilt in the ones who challenge it is powerful stuff indeed.

Thursday, April 23, 2009

Terrorism is Lucrative!

Pakistan will never kill the goose that lays golden eggs.
Between 1952 and 2008, Islamabad received over $73bn as foreign aid, according to Pakistan’s Economic Survey. But in the period since the Mumbai strikes, the amount of aid pledged or delivered to Pakistan has totalled a staggering $23.3bn. This figure excludes China’s unpublicised contributions but includes the IMF’s $7.6bn bailout package, released after the Mumbai attacks.
(hat-tip banerjee)

Pakistan Watch - 5

This may help in understanding Pakistan Watch - 4 below. Emphasis added (thanks BRF!)

Two stuffed camels, as tall and as dour as the actual beasts, stand these days along the Lahore canal. Atop them ride two figures – dressed from head-to-toe in stark white robes and obviously meant to represent desert Arabs. The camels seem oddly out of place amidst the colourful floats and other, sometimes garish, displays of dancers and peacocks and boats and horses meant to mark the city's Spring Festival. One asks how they came to stand there or what role they have amongst the 'dhol' carrying figures from a Punjabi village or the colourfully dressed women who churn their pots of 'lassi'.

But the presence of the Arabs represents something of the confusion that has overtaken us. Since the 1980s, a forceful attempt has been made to turn heads to the west, to place Pakistan in the Muslim Middle East and to have it abandon its place amidst the more diverse whole of South Asia. It is this thinking of course that has led to the absurd -- but widely held notion that the history of Pakistan begins with the landing in Sindh of Muhammad Bin Qasim in 711 A.D. Today, the mindset that inspired this twist on history seems active again. There is talk of India, rather than the Taliban, being the 'real' enemy.

This view is echoed frequently in the media. This of course is no big surprise given that the media has, indeed, traditionally leaned largely to the right. But more alarming is the fact that within Pakistan's military there is a clear opinion that while the civilian government may see militants as the enemies, the real foe is India.

So far, even if reluctantly, the military has been following political orders to take on the militants. It has not had much success. This embarrassment seems to be one factor in its decision that it may be better to join an enemy one cannot beat. Faced with a military that it believes is not fully under its command, the political setup too has shown signs of wavering.

There are no easy answers. But a start has to be made somewhere. One place to do so is by encouraging people to gaze once more to the east and to re-establish Pakistan as a South Asian nation, an inheritor of its unique blend of cultures, rather than as a country that equates itself only with that portion of the past that belongs to Islam.

To do this, the fallacy that we can militarily take on India – perhaps because we have nuclear weapons – must be exposed as nothing more than a lie. An army that has been unable to tame a few thousand maverick militants can hardly be expected to take on a far larger and more organized army. There are also other hard realities that must be confronted. Much as we may wish to deny it, much as stories of Indian 'failure' are lapped up by our media, the real, unquestionable fact is that that country has succeeded.

Its 1.2 billion people, despite a slowdown that has crippled many segments of the Indian economy, look to the future with hope. Pakistan's 160 million see less and less light to brighten the darkness that swirls all around and threatens to overwhelm them. Think tanks hold India will, by 2020, rank as a world super power. They ask if Pakistan can till then even hold together as a cohesive state.

PS: a bit of the cart before the horse above - Pakistan's confrontational attitude to India derives from the idea that Pakistan is purely Islamic. What the author is saying is that because Pakistan cannot win in that confrontation, it should reexamine its premises. I would say, Pakistan should reexamine its premises, and from that understanding, abandon its confrontation.

Wednesday, April 22, 2009

Pakistan Watch - 4

Read this essay. A lot of things should become clearer.

...what I didn’t realize was that my attempts to become a better Muslim actually distanced me from my ethnic identity rather than compliment it. In actuality I was doing something that many young Pakistani Muslims do these days: I was trying to be Arab....

So many times, I’ve heard fellow Pakistani Muslims saying that we should abolish culture completely because there is no culture in Islam.

PS: the above is the logical outcome of this:
Pakistan, the Quaid-e-Azam remarked, was not the product of the conduct or misconduct of the Hindus. It had always been there; only they were not conscious of it. Hindus and Muslims, though living in the same towns and villages, had never been blended into one nation; they were always two separate entities.

Tracing the history of the beginning of Islam in India, he proved that Pakistan started the moment the first non-Muslim was converted to Islam in India long before the Muslims established their rule. As soon as a Hindu embraced Islam he was outcast not only religiously but also socially, culturally and economically.

As for the Muslim, it was a duty imposed on him by Islam not to merge his identity and individuality in any alien society. Throughout the ages Hindus had remained Hindus and Muslims had remained Muslims, and they had not merged their entities - that was the basis for Pakistan. In a gathering of European and American officials he was asked as to who was the author of Pakistan. Mr. Jinnah's reply was 'Every Mussalman.'

Now the question is how to get Pakistan? Raising his eye-brows and speaking in grim tones, Mr. Jinnah said, "not by asking, not by begging, not even by mere prayers but by working with trust in God. Inshallah! Pakistan is now in your hands."

The Dawn, March 10, 1944
From here.

Sunday, April 19, 2009










Pakistan Watch - 3

At times of stress in their, national life, some Pakistanis take refuge in the notion that if they simply rename themselves, their problems will go away. For instance, for a while, they talked about their problems as being "South Asian" problems.

With the Taliban breathing down their neck, and with no coherent response from the state, such types are further retreating into the notion that they are the real India.

Here are two such. The first claims the heritage of India for "proto-Pakistan". Let us simply forget that the creation of Pakistan in 1947 was accompanied with an explicit rejection of such heritage. Forget that in subsequent years, Pakistani history is written to have begun with the invasion of Sindh by Muhammad bin Qasim in the seventh century AD. Forget what V.S. Naipaul (I think) told us, of the graffiti on the remains of the 2000BC city Harappa - "this is the fate of unbelievers". Just read an excerpt:
The Vedas, particularly the Rig Veda, with its strong avowal of monotheism, was written in proto-Pakistan. Auyurveda, the so-called Indian ancient system of medicine, now in great vogue in India, was compiled by Carak, a man from Multan, in proto-Pakistan. Classical Sanskrit was developed in proto-Pakistan. It was codified in the great Eight Chapters of Panini, a man from Swabi, in NWFP, proto-Pakistan. Kautilya/Canakya/Cankya, who wrote Arth Shaastar, and who is regarded as a huge Indian scholar, taught at Takshasila University, in proto-Pakistan.
Yoga, the ‘Indian’ system of health and meditation (and Sankhya philosophy, the cornerstone of Hinduism - a name given by the British, in the eighteenth century, to the diverse cults in proto-India - was codified by Patanjali, a man from Multan, in proto- Pakistan as the Yog Sutr..
The idea being promoted in the essay is that it is Pakistan that deserves the support that derives from any interest in the West in ancient (pre-Islamic) Indian culture.

(Snark) Anyone who cannot pronounce "tra" (as in Arth Shaastra) can hardly claim to be a descendant of the Sanskritic civilization.

The second argues thusly
...Hindus do not have the name for their own country - they have swindled us of our name “India” - which had been ours exclusively.

Indian Muslims on either side of the border have never been ‘Pakistanis’ and Hindus on either side of the border have never been ‘Indians’ - We have been ‘Indian Muslims’ throughout and they have been ‘Bharati Hindus’ throughout. Similarly Indian Muslims have never ever named their homeland as Pakistan during their 1000-year rule - and ‘Bharati Hindus’ have never ever named their homeland as India, before the Muslims rule.
The word, Pakistan has no real historical meaning and had never ever been a word or entity that had been written or entered in any dictionary or encyclopedia in any part of the world.

Why does it matter whether the people are called Pakistani or some other name?
A goodwill name does not come by overnight - it takes centuries and years that a goodwill name is established and recognized.

Namely, rename Pakistan "The Islamic Republic of India" and suddenly it becomes the recepient of goodwill that was in the centuries in the making.

Pakistan Watch - 2

It is always the Jews!
From The Daily Times,
Federal Minister Senator Azam Khan Swati of the Jamiat Ulema-e-Islam (JUI-F) said on Saturday that the flogging of the 17-year-old girl in Swat was a Jewish conspiracy aimed at destroying peace in Swat and distort the image of those Islamists who sport beards and wear turbans.

A Dawn editorial says Pakistan is living in denial.
... it is alarming that Pakistan’s state and society continue to bury their heads in the sand and resort to denial of either specific acts of brutality or the threat in general posed by the Taliban. The most recent example of this approach is an investigation team’s conclusion that the video depicting the whipping of the young woman in Swat was ‘fake and false’, as indicated by Interior Secretary Kamal Shah.

He quoted the final report as saying that that no such incident took place since the girl in question denied it and the area’s residents also expressed their ignorance. Yet anyone who has suffered such an act of barbarity, and who continues to live under the shadow of his or her persecutors, is unlikely to risk inducing their ire further. More dangerous, however, is the reduction of the issue to a debate over whether or not the video was ‘real’ and when exactly the incident took place.

This constitutes yet another example of the manner in which the Pakistani state and its citizenry live in denial of the clear and present danger to their personal freedoms. It is precisely this attitude that has allowed the Taliban and others of their ilk to make such deep inroads. Even if this particular video was faked, there is ample evidence otherwise of the Taliban’s brutality. Reports of beheadings, shootings and the coercion of people — who are citizens of Pakistan and residents of Swat — are made public practically everyday.

Meanwhile the Taliban turn the screws.
Dawn, Ardeshir Cowasjee
Footnote: Karachi is already feeling the Taliban pinch. Co- educational schools in Defence, Clifton and Saddar areas are known to have received visits and been threatened if they do not change, others have been sent letters with the same message.

Maulana Sufi Muhammad said that only black turban was ‘Sunnat-e-Nabvi’ and using turban of any other colour was not ‘Sunnat-e-Nabvi’. He said that the existing system was in contravention of Nizam-e-Islam and the Holy Quran.

High Courts and Supreme Court were ‘Ghair Sharaiee’ institutions and going for appeal in ‘Ghair Sharaiee’ institutions was ‘Haram’. He said Darul Qaza could be approached in case of any reservations on our verdicts, but the final decisions of Darul Qaza not allowed to be challenged in the High Courts and Supreme Court.

Pakistan Watch

In some ways, we are holding a begging bowl in one hand, and a raised middle finger in the other. If we had a third hand, it would be holding a gun to our head. In fact, this is now our preferred negotiation mode.
Irfan Husain (Mazdak) in Dawn.

Noting that so far there has not been a popular revolt against feudalism in Pakistan, this opinion in The News continues:
The sophistication of the Taliban strategy is becoming clearer. They were unlikely ever to come to national power via the ballot box, but they may come to it via popular revolution.

Examining the way in which they took hold of Swat tells us that they targeted a group of key landowners and landlords, as well as several local politicians who were also landowners or landlords. Disaffected peasants were organised into armed groups, pressure was applied either through direct intimidation or indirectly by the publication of 'the list' of people disapproved of by the Taliban. 'The masses' were promised swift transparent justice for their grievances, a redistribution of wealth – the landlords and landowners having fled – and an end to corrupt and inefficient governance. To a landless peasant or daily-wager this was an attractive proposition; even if it did come loaded with a different version of tyranny. The result is what we see today with Swat existing as a state outside of Pakistan and ruled by the Taliban. Swat is the prototypical model, the 'proof of concept' that the Taliban needed in order to replicate their success outside of their Pashtun homelands. They are now self-sustaining, less reliant on foreign aid, and have the rudiments of governance at their fingertips. They also make plain that the conquest of the rest of the country is their end-goal.

As recently as two years ago we might have laughed this off such is its improbability. Not today. Today there is no shortage of Doomsday scenarios for Pakistan emerging from various think-tanks and commentators. Some of them are far-fetched – the suggestion that the state will collapse in six months for instance - but others less so and we have to consider them as a possibility. There is a ring of credibility about the New York Times analysis that should give us pause for thought, and it cannot be dismissed as the musings of a crackpot. The state is extremely vulnerable not only because of the ramshackle politics and corruption, but also at the hitherto untouchable feudal end of the spectrum. And where is the great stronghold of feudalism? Punjab. Punjab is populous, wealthy and provides most of the power-elites that have run the country since partition – periodically aided and abetted by Sindhi feudals. Punjab is clearly in the sights of the Taliban. They have power-bases in all the major cities and the conscientisation and mobilization of a disaffected peasantry, albeit on a far larger scale than in Swat valley, is possible. They are tilling fertile ground – the peasantry sees a dwindling income from the land and endless years of bonded labour ahead, and in the cities the pool of uneducated or ill-educated and unemployed urban youth is an unruly character in search of an author. Punjab will be the Swat model writ large; and it may be that the failure to implement land reform from the outset of the state, choosing instead to perpetuate feudalism, will be its downfall.

Dr. Farrukh Saleem laments the fate of Swat, in The News
Which one of the 192 member-states of the UN would Swat be like? Which one of the 57 OIC countries would Swat be like? Saudi Arabia or Afghanistan?

Would the 'Switzerland of Pakistan' now be like Saudi Arabia? Saudi Arabia's per capita book readership is one of the lowest on the face of the planet. Saudi Arabia is yet to produce a Nobel prize winner (Israel has produced eight). Saudi Arabia has no more than 5,000 scientists (200 per million) while the US has 1.5 million (4,000 per million). Saudi Arabia hasn't invented anything of consequence for the human civilisation in its 77 years of existence. Saudi Arabia officially practises a comprehensive gender-based apartheid system whereby 14 million Saudi women have different legal rights than Saudi men, an "unequal access to property and jobs, and restrictions on freedom of movement… (Saudi women were not allowed to vote in the municipal elections of 2005)." Would the 'Switzerland of Pakistan' now be like the 'Islamic Emirate of Afghanistan' (as Afghanistan was from 1996 to 2001)? No political parties, no politics, no elections -- and absolutely dictatorial. No TV, no chess, no kites. For women -- restricted employment, no education, no sports, no nail-polish. For everyone else -- no videos, no music, no dancing, no clapping during sports events -- and a beard "extending farther than a fist clamped at the base of the chin." No paintings, no photographs, no stuffed animals -- and no dolls.

Letter published in The News:
Doctor or death?
Sunday, April 19, 2009
I am a girl who lives in Swat -- and I have a question for the Taliban. Will I be allowed to become a doctor? If not tell me now -- so I can commit suicide.



Friday, April 17, 2009

Pakistan - the coming revolution

More on jaziya.

But perhaps the real significant news of the day is that the Taliban seem to be fomenting a religious marxist movement. If it is true, then in my judgment they are unstoppable.


In Swat, accounts from those who have fled now make clear that the Taliban seized control by pushing out about four dozen landlords who held the most power.

To do so, the militants organized peasants into armed gangs that became their shock troops, the residents, government officials and analysts said.

The approach allowed the Taliban to offer economic spoils to people frustrated with lax and corrupt government even as the militants imposed a strict form of Islam through terror and intimidation.

“This was a bloody revolution in Swat,” said a senior Pakistani official who oversees Swat, speaking on the condition of anonymity for fear of retaliation by the Taliban. “I wouldn’t be surprised if it sweeps the established order of Pakistan.”

The Taliban’s ability to exploit class divisions adds a new dimension to the insurgency and is raising alarm about the risks to Pakistan, which remains largely feudal.

Unlike India after independence in 1947, Pakistan maintained a narrow landed upper class that kept its vast holdings while its workers remained subservient, the officials and analysts said. Successive Pakistani governments have since failed to provide land reform and even the most basic forms of education and health care. Avenues to advancement for the vast majority of rural poor do not exist.

Analysts and other government officials warn that the strategy executed in Swat is easily transferable to Punjab, saying that the province, where militant groups are already showing strength, is ripe for the same social upheavals that have convulsed Swat and the tribal areas.

Mahboob Mahmood, a Pakistani-American lawyer and former classmate of President Obama’s, said, “The people of Pakistan are psychologically ready for a revolution.”

Sunni militancy is taking advantage of deep class divisions that have long festered in Pakistan, he said. “The militants, for their part, are promising more than just proscriptions on music and schooling,” he said. “They are also promising Islamic justice, effective government and economic redistribution.”

"Avenues to advancement for the vast majority of rural poor do not exist" - this is something that Pakistan watchers have noted for a long time. This remains true in India as well, though not with the finality that obtains in Pakistan. The BJP, even with its "India Shining" and good overall economic record, got voted out I think precisely because little of that growth was seen in the rural areas.

Another thought is that the powerful can yield justice voluntarily, or else, eventually pressure will build up to the level where there is a revolution. Perhaps the degree of resistance from the powerful has been different in Pakistan and India.

Anyway, gather the popcorn and soda and watch. Nothing the US can do to prop up the Pakistani Anglosphere is going to work. The Taliban have both religious sentiments and economic justice working in their favor (not that they are going to be able to deliver anything; simply that the wind blows favorably for them).

Wednesday, April 15, 2009

Open Letter to General Kayani

From here.
An open letter to Gen Kayani
Tuesday, April 14, 2009
By Dear Gen Kayani,
Sir, let me begin by recounting that old army quip that did the rounds in the immediate aftermath of World war II: To guarantee victory, an army should ideally have German generals, British officers, Indian soldiers, American equipment and Italian enemies.

A Pakistani soldier that I met in Iraq in 2004 lamented the fact that the Pakistani soldier in Kargil had been badly let down firstly by Nawaz Sharif and then by the Pakistani officers' cadre. Pakistani soldiers led by Indian officers, , he believed, would be the most fearsome combination possible. Pakistani officers, he went on to say, were more into real estate, defence housing colonies and the like.

As I look at two photographs of surrender that lie before me, I can't help recalling his words. The first is the celebrated event at Dhaka on Dec 16, 1971, which now adorns most Army messes in Delhi and Calcutta. The second, sir, is the video of a teenage girl being flogged by the Taliban in Swat -- not far, I am sure, from one of your Army check posts.

The surrender by any Army is always a sad and humiliating event. Gen Niazi surrendered in Dhaka to a professional army that had outnumbered and outfought him. No Pakistani has been able to get over that humiliation, and 16th December is remembered as a black day by the Pakistani Army and the Pakistani state. But battles are won and lost – armies know this, and having learnt their lessons, they move on.

But much more sadly, the video of the teenager being flogged represents an even more abject surrender by the Pakistani Army. The surrender in 1971, though humiliating, was not disgraceful. This time around, sir, what happened on your watch was something no Army commander should have to live through. The girl could have been your own daughter, or mine.

I have always maintained that the Pakistani Army, like its Indian counterpart, is a thoroughly professional outfit. It has fought valiantly in the three wars against India, and also accredited itself well in its UN missions abroad. It is, therefore, by no means a pushover. The instance of an Infantry unit, led by a lieutenant colonel, meekly laying down arms before 20-odd militants should have been an aberration. But this capitulation in Swat, that too so soon after your own visit to the area, is an assault on the sensibilities of any soldier. What did you tell your soldiers? What great inspirational speech did you make that made your troops back off without a murmur? Sir, I have fought insurgency in Kashmir as well as the North-East, but despite the occasional losses suffered (as is bound to be the case in counter-insurgency operations), such total surrender is unthinkable.

I have been a signaller, and it beats me how my counterparts in your Signal Corps could not locate or even jam a normal FM radio station broadcasting on a fixed frequency at fixed timings. Is there more than meets the eye?

I am told that it is difficult for your troops to "fight their own people." But you never had that problem in East Pakistan in 1971, where the atrocities committed by your own troops are well documented in the Hamoodur Rahman Commission Report. Or is it that the Bengalis were never considered "your own" people, influenced as they were by the Hindus across the border? Or is that your troops are terrified by the ruthless barbarians of the Taliban?

Sir, it is imperative that we recognise our enemy without any delay. I use the word "our" advisedly – for the Taliban threat is not far from India's borders. And the only force that can stop them from dragging Pakistan back into the Stone Age is the force that you command. In this historic moment, providence has placed a tremendous responsibility in your hands. Indeed, the fate of your nation, the future of humankind in the subcontinent rests with you. It doesn't matter if it is "my war" or "your war" – it is a war that has to be won. A desperate Swati citizen's desperate lament says it all – "Please drop an atom bomb on us and put us out of our misery!" Do not fail him, sir.

But in the gloom and the ignominy, the average Pakistani citizen has shown us that there is hope yet. The lawyers, the media, have all refused to buckle even under direct threats. It took the Taliban no less than 32 bullets to still the voice of a brave journalist. Yes, there is hope – but why don't we hear the same language from you? Look to these brave hearts, sir – and maybe we shall see the tide turn. Our prayers are with you, and the hapless people of Swat.

The New York Times predicts that Pakistan will collapse in six months. Do you want to go down in history as the man who allowed that to happen?

The writer is a retired colonel of the Indian army who lives in Pune. Email:

Tuesday, April 14, 2009


Jazia is a tax imposed by the Islamic state on infidels.

Pakistan Daily Times:

Sikh families leave Orakzai after Taliban demand jizia

By Abdul Saboor Khan

HANGU: Sikh families living in Orakzai Agency have left the agency after the Taliban demanded Rs 50 million as jizia (tax) from them, official sources and locals said on Tuesday.

Residents of Ferozekhel area in Lower Orakzai Agency told Daily Times on Tuesday that around 10 Sikh families left the agency after the demand by the Taliban, who said they were a minority and liable to pay the tax for living in the area in accordance with sharia.

Locals said the Taliban had notified the Sikh families about the ‘tax’ around a week ago. They said of the 15 Sikh families in Ferozekhel, 10 had shifted while the remaining were preparing to do so.

The locals said the families were impoverished and had left the area to avoid any Taliban action.

Monday, April 13, 2009

Obama reneges on civil liberties

The President (Bush) asserted the right to capture anyone anywhere in the world and to detain them indefinitely without judicial review. Obama, despite speaking out against this as a senator and as presidential candidate, is also asserting this right as president.

The President (Bush) asserted the right to listen in on anyone's phone conversations without warrant, without judicial review and without legal recourse for anyone who was so wiretapped, claiming that even having to make an argument in camera to a federal judge that state secrets would be revealed to the detriment of national security in a particular case would jeopardize national security. Obama makes a similar even more sweeping claim.

Opprobrium is coming in from many quarters.

As Glenn Greenwald says (all the above links are to various of his writings)
Even for the hardest-core Obama loyalists, it's rather difficult to attribute these increasingly harsh condemnations of Obama's civil liberties, secrecy and executive power abuses to bad motives or ignorance when they're coming from the likes of Russ Feingold, TalkingPointsMemo, the Center for American Progress, Nancy Pelosi, EFF, the ACLU, The New York Times Editorial Board, Keith Olbermann, Jonathan Turley, The American Prospect, Bruce Fein, Digby, along with some of the most enthusiastic Obama supporters and a bevvy of liberal law professors and international law experts -- those who were most venerated by progressives during the Bush era on questions of the Constitution and executive power. ......

.....Whatever else one might say, the rule of law, the Constitution, and core civil liberties are the centerpiece of a healthy and well-functioning government, and nothing justifies an assault on those safeguards. That was the argument most progressives made throughout the Bush presidency, and the more Obama continues on the Bush/Cheney path in this area, the more solid the progressive consensus against his actions becomes.

Sunday, April 12, 2009

Our periodic crises of debt repudiation

NYT op-ed

Frederick Soddy was a Nobel Laureate chemist turned political economist. He conceived of the economy as a thermodynamic engine. His ideas lead to a view of the root cause of the financial problems.

....Debt, for its part, is a claim on the economy’s ability to generate wealth in the future. “The ruling passion of the age,” Soddy said, “is to convert wealth into debt” — to exchange a thing with present-day real value (a thing that could be stolen, or broken, or rust or rot before you can manage to use it) for something immutable and unchanging, a claim on wealth that has yet to be made.....

Problems arise when wealth and debt are not kept in proper relation. The amount of wealth that an economy can create is limited by the amount of low-entropy energy that it can sustainably suck from its environment — and by the amount of high-entropy effluent from an economy that the environment can sustainably absorb. Debt, being imaginary, has no such natural limit. It can grow infinitely, compounding at any rate we decide.

Whenever an economy allows debt to grow faster than wealth can be created, that economy has a need for debt repudiation. Inflation can do the job, decreasing debt gradually by eroding the purchasing power, the claim on future wealth, that each of your saved dollars represents. But when there is no inflation, an economy with overgrown claims on future wealth will experience regular crises of debt repudiation — stock market crashes, bankruptcies and foreclosures, defaults on bonds or loans or pension promises, the disappearance of paper assets.

It’s like musical chairs — in the wake of some shock (say, the run-up of the price of gas to $4 a gallon), holders of abstract debt suddenly want to hold money or real wealth instead. But not all of them can. One person’s loss causes another’s, and the whole system cascades into crisis. Each and every one of the crises that has beset the American economy in recent years has been, at heart, a crisis of debt repudiation. And we are unlikely to avoid more of them until we stop allowing claims on income to grow faster than income.

Soddy would not have been surprised at our current state of affairs. The problem isn’t simply greed, isn’t simply ignorance, isn’t a failure of regulatory diligence, but a systemic flaw in how our economy finances itself. As long as growth in claims on wealth outstrips the economy’s capacity to increase its wealth, market capitalism creates a niche for entrepreneurs who are all too willing to invent instruments of debt that will someday be repudiated. There will always be a Bernard Madoff or a subprime mortgage repackager willing to set us up for catastrophe. To stop them, we must balance claims on future wealth with the economy’s power to produce that wealth. (emphasis added)

And that leads to a prescription on how to avoid this.

Tuesday, April 07, 2009

Andher Nagari Chaupat Raja

"Dark is the nation and insane the king" - the full story is here. The old saying describes a situation where irrationality reigns and injustice is rampant.

Glenn Greenwald:

In his quest to obtain key documents proving that his client was tortured at the hands of the Bush administration, Smith is now involved in a truly bizarre though revealing controversy, first reported last Thursday by The Guardian. In February, Smith wrote a letter to President Obama urging Obama to authorize the release of evidence relevant to Mohamed's torture so that Obama does not become complicit in covering-up crimes of torture (which is itself a crime). Smith attached to his letter to Obama a 2-page memo detailing the facts proving his client's torture. But under the rigid rules of Guantanamo, all lawyers for detainees are barred (under threat of criminal penalties) from disclosing any information they learn from their clients -- even if the subject of the communication is the torture to which their clients were subjected -- without first obtaining the approval from something called the "Privilege Review Team," a secret tribunal of Pentagon officials who monitor and censor all communications from Guantanamo lawyers.

As a formality, Smith submitted his letter to President Obama to this Privilege Review Team, naturally assuming (since Obama obviously has full security clearances) that it would be passed on to Obama without any problems. Instead, the letter was sent back to Smith with the entire body of the memo -- every word -- redacted with black blocks, with only the "from" line left (see the unbelievable redacted memo here -- .pdf). In other words, the Privilege Review Team blocked Smith from communicating to President Obama the facts surrounding his client's torture at Guantanamo. Smith then sent that redacted memo directly to Obama along with a new cover letter informing Obama of the "bizarre reality" that "you, as commander in chief, are being denied access to material that would help prove that crimes have been committed by US personnel. This decision is being made by the very people who you command."

As a response to that new letter, Smith and a colleague of his have now been summoned to appear before a Washington court on May 11, to answer a criminal complaint filed by the Privilege Review Team, alleging that Smith -- merely by sending Obama the redacted memo -- has violated the secrecy terms to which he is bound. He faces up to six months in prison if found guilty.

Just think about that: these Pentagon officials -- who have long been accused of using their censoring powers to hide evidence of torture at Guantanamo -- first blocked Smith from sending Obama any information about his client's torture, and now seek to criminally punish him merely for notifying Obama of how extensively his letter to Obama had been redacted by that Pentagon agency. If that isn't the behavior of a lawless and tyrannical government completely out of control, it is hard to know what is.

Lesson from History

"If the Taliban are not defeated, history is a witness that whenever Khyber has been breached, the battle has been fought in Panipat." - Pakistan's Ambassador to the UN, Abdullah Hussain Haroon, quoted by Khalid Hassan in the Daily Times.

Saturday, April 04, 2009

Yet more financial stuff

Wall Street owns our government.

Harvard Derivatives Whiz Fired For Emailing Larry Summers About "Frightening" Trades?