Tuesday, December 19, 2006

The Holocaust conference and anti-semitism

What a surprise... The Telegraph reports (via Hot Air):
Jewish people are four times more likely to be attacked because of their religion than Muslims, according to figures compiled by the police.
One in 400 Jews compared to one in 1,700 Muslims are likely to be victims of "faith hate" attacks every year. The figure is based on data collected over three months in police areas accounting for half the Muslim and Jewish populations of England and Wales. The crimes range from assault and verbal abuse to criminal damage at places of worship.
Police forces started recording the religion of faith-hate crime victims only this year. They did so on the instruction of the Association of Chief Police Officers (Acpo), which wanted a clear picture of alleged community tensions around the country, following reports of Muslims being attacked after September 11 and the July 7 London bombings last year.
However, the first findings, for July to September, obtained by The Sunday Telegraph under freedom of information legislation, show that it is Jews who are much more likely to be targeted because of their religion.
The figures also suggest that many faith-hate crimes remain unsolved, contrary to the picture painted by the Crown Prosecution Service (CPS) in a report this month. The CPS said only 43 people were charged with "religiously aggra-vated" offences last year, and concluded that the large rise expected after the July 7 bombings had not materialised.
And if you go back to the Hot Air post (via Instapundit), it also links to an essay about the infamous Teheran Holocaust conference by Bret Stephens in the Wall Street Journal:
In fact, anti-Zionism has become for many anti-Semites a cloak of political convenience. But anti-Zionism has also become an ideological vehicle for an anti-Semitism that increasingly feels no need for disguise. In January 2002, the New Statesman magazine had a cover story on "The Kosher Conspiracy." For art, they had a gold Star of David pointed like a blade at the Union Jack. This wasn't anti-Zionism. It was anti-Zionism matured into unflinching anti-Semitism. And it was featured on the cover of Britain's premiere magazine of "progressive" thought.
The scholar Gregory Stanton has observed that genocides happen in eight stages, beginning with classification, symbolization and dehumanization, and ending in extermination and denial. What has happened in Tehran--denial--may seem to have turned that order on its head. It hasn't. The road to Tehran is a well-traveled one, and among those who denounce it now are some who have already walked some part of it.
Meanwhile Melanie Phillips notes a hair-raising article by Ayaan Hirsi Ali in the Los Angeles Times:
I learned that innocent men, women and children were separated from each other. Stars pinned to their shoulders, transported by train to camps, they were gassed for no other reason than for being Jewish.
I saw pictures of masses of skeletons, even of kids. I heard horrifying accounts of some of the people who had survived the terror of Auschwitz and Sobibor. I told my half-sister all this and showed her the pictures in my history book. What she said was as awful as the information in my book.
With great conviction, my half-sister cried: "It's a lie! Jews have a way of blinding people. They were not killed, gassed or massacred. But I pray to Allah that one day all the Jews in the world will be destroyed."
She was not saying anything new. As a child growing up in Saudi Arabia, I remember my teachers, my mom and our neighbors telling us practically on a daily basis that Jews are evil, the sworn enemies of Muslims, and that their only goal was to destroy Islam. We were never informed about the Holocaust.
What's striking about Ahmadinejad's conference is the (silent) acquiescence of mainstream Muslims. I cannot help but wonder: Why is there no counter-conference in Riyadh, Cairo, Lahore, Khartoum or Jakarta condemning Ahmadinejad? Why are the 57 members of the Organization of the Islamic Conference silent on this?
Could the answer be as simple as it is horrifying: For generations, the leaders of these so-called Muslim countries have been spoon-feeding their populations a constant diet of propaganda similar to the one that generations of Germans (and other Europeans) were fed — that Jews are vermin and should be dealt with as such? In Europe, the logical conclusion was the Holocaust. If Ahmadinejad has his way, he shall not want for compliant Muslims ready to act on his wish.
The world needs to be informed again and again about the Holocaust — not only in the interest of the Jews who survived and their offspring but in the interest of humanity.
Do read the whole thing.

Monday, December 18, 2006

Lucy's awards

I guess I'm easily amused, but I almost choked on my apple when I read today's Lucy Kellaway column:
Award for worst e-mail sign off. For some time now "Best" has been the preferred way to end a business e-mail, and very sloppy it is too. Best what, I always wonder. It's like saying Happy instead of Happy Christmas.
A silver medal goes to an e-mail I was sent this year that ended:
"Hope that was a value-add, Allbest." Actually no, the e-mail was terribly dull and so not a value-add at all.
Gold goes to this sign-off: "Please revert by c.o.p. Best." This contains an insidious new bit of jargon (revert instead of reply), a sporting term (close of play) and an acronym. It is close to genius to combine the three with such brevity.
The award for the Most Sustained Mixed Metaphor goes to Mark Fields of the Ford Motor Co who was quoted in the FT using four consecutive clichés in the same brief paragraph. "I've given the Ford team the same challenge. It's time to play offence. It's time to take back our future. The clock is ticking."
Do read the whole thing.

Friday, December 15, 2006


After excoriating Pinochet for the brutality of his dictatorship, the Washington Post points out some uncomfortable facts (via Instapundit):
It's hard not to notice, however, that the evil dictator leaves behind the most successful country in Latin America. In the past 15 years, Chile's economy has grown at twice the regional average, and its poverty rate has been halved. It's leaving behind the developing world, where all of its neighbors remain mired. It also has a vibrant democracy. Earlier this year it elected another socialist president, Michelle Bachelet, who suffered persecution during the Pinochet years.
Like it or not, Mr. Pinochet had something to do with this success. To the dismay of every economic minister in Latin America, he introduced the free-market policies that produced the Chilean economic miracle -- and that not even Allende's socialist successors have dared reverse. He also accepted a transition to democracy, stepping down peacefully in 1990 after losing a referendum.
The contrast between Cuba and Chile more than 30 years after Mr. Pinochet's coup is a reminder of a famous essay written by Jeane J. Kirkpatrick, the provocative and energetic scholar and U.S. ambassador to the United Nations who died Thursday. In "Dictatorships and Double Standards," a work that caught the eye of President Ronald Reagan, Ms. Kirkpatrick argued that right-wing dictators such as Mr. Pinochet were ultimately less malign than communist rulers, in part because their regimes were more likely to pave the way for liberal democracies. She, too, was vilified by the left. Yet by now it should be obvious: She was right.
Do read the whole thing. Jeane Kirkpatrick's essay was published in Commentary in November 1979. I have a lot of respect for her, although I disagree with some of her stances. Oliver Kamm has a critical take on Kirkpatrick at his blog. He also takes issue with conservatives who express positive (albeit, strongly qualified) views on Pinochet's economic policies, and argues against the myth that the 1973 Chilean coup was engineered by Henry Kissinger and the CIA.
Meanwhile, Alvaro Vargas Llosa writes in the Wall Street Journal (requires subs.; via Fausta's blog which also has other interesting links):
The difference between the two men is that Castro, who has been in power almost three times longer than Pinochet and has committed even more crimes, continues to have some supporters around the world while Pinochet was one of the most reviled men on Earth. Why was Pinochet more hated than every other dictator?
Democrats in the developing world were also uneasy knowing that a soldier with very limited intellectual acumen was able to preside over an economic transformation. The Pinochet reforms came about almost fortuitously when, given the devastation of the country's economy, the general hired a coterie of young economists familiar with the ideas of one Milton Friedman, whom Pinochet had never heard of. Because free markets tend to bring about prosperity regardless of the moral nature of the regime that opens a country's economy, Chile prospered. We also know that dictatorships don't last very long once they open the economy because the middle class tends to expand and develop a desire for political and civic participation. That is why Pinochet lost the referendum in 1988 and why Fidel Castro, who toyed with limited markets in the 1990s, quickly reversed course.
Some free marketers argued that free-market reforms opened the way to democracy to justify his regime. But the reforms could easily have been implemented without killing 3,197 people, torturing some 29,000, and sending thousands more into exile -- the horrendous human rights violations exposed by the National Commission for Truth and Reconciliation in 1991. In fact, Pinochet probably contributed to postponing the cause of free markets in Latin America because most governments feared being associated with his regime. The fact that the Chilean conservative opposition distanced itself publicly from Pinochet in the 1999 and the 2005 elections -- and that its former presidential candidates stayed away from the military hospital where the general died on Sunday -- suggests the wish to break the awkward connection once and for all.
Even though Pinochet was a brutal tyrant, I still think this fails to explain the incredible double standard that large swathes of the left apply to Fidel Castro, Che Guevara and others, including Salvador Allende (who was not only an anti-semite and a homophobe, but had connections with the Nazis, both financial and ideological: see this hair-raising post, linked in Fausta's comments). I disagree with supporters of Pinochet, and I think the US should have pressured him much more vigorously (including, if need be, with threats of military intervention) to stop his regime's repression and gradually bring the country back to democracy, however I find it odd that some parts of the left will be such vehement apologists for dictatorships - but only if they cause unmitigated economic disasters!

Thursday, December 14, 2006

Is obesity good?

Megan McArdle has some thoughts on obesity, both compassionate and pragmatic, at her blog, Asymmetrical Information:
It seems like they're taking a true statement--"society shouldn't assume that the overweight are simply lazy slobs with remarkably little willpower"--and extrapolating it to a ridiculous result: "which means that seriously overweight people shouldn't try to lose the extra weight". Even if we shouldn't judge obese people, that doesn't mean we shouldn't try to encourage them to do something they find very, very hard. Most people find quitting smoking or giving up sugar really, really hard, but we don't tell them not to bother treating their diabetes because it's not their fault their pancreas isn't pumping out any insulin. Fair just isn't very relevant. It isn't fair that every cold I ever get goes straight to my lungs and hangs out there for a month, and I have to carry an inhaler with me everywhere I go, because otherwise I could die. It's certainly not fair that I could go blind in my eighties like my grandmother. Nature doesn't care about fair. That's why it's called natural selection, not natural distribution.
Do read the whole thing.

Tuesday, December 12, 2006

Mine your own business

The Telegraph (via Tim Worstall):
An unemployed Romanian miner who is flown across the globe to confront environmental activists is the unlikely star of a Michael Moore-style film, aimed at debunking the militant green movement.
Gheorghe Lucian, 23, is a plain-speaking resident of an impoverished village where an opencast gold mine is planned. He is dismayed that the project, which would bring a £400 million investment and generate 600 jobs in an area where unemployment is 70 per cent, is being blocked by environmentalists.
Among them is the actress Vanessa Redgrave, who used a film festival awards ceremony in June to denounce the mine project in the Rosia Montana region of Romania. "Our planet is dying and we have no right to destroy an ecosystem," she said.
The movie is called Mine Your Own Business and the official site is here. The Sydney Morning Herald has an interesting review. And here's the trailer:

Also see this essay in Sp!ked:
[...] This jaw-dropping example of the low horizons informing the work of many environmentalists is captured very well in a new documentary, Mine Your Own Business, by Phelim McAleer and Ann McElhinney.
McAleer, a journalist from Northern Ireland, began to question his own environmentalist sympathies when posted to Romania by the Financial Times in 2000, especially when he investigated the campaign to prevent the opening of an opencast gold mine in the village of Rosia Montana in the Transylvanian mountains. I have also been to the village and my research on the proposed goldmine and the environmentalist opposition to it echoes many of the findings of McAleer’s film (see 'If the gold mine doesn’t happen, our village will die').
Do read the whole thing.

Mary's womb

There is a widespread - and totally false - idea (see below), particularly in Europe, that one of the main reasons why George Bush won the 2004 presidential election was because of "value voters" whose main issue was opposition to gay marriage. TigerHawk (via Instapundit) has a discussion about the recent uproar caused by the announcement of Mary Cheney's pregnancy. He approvingly quotes Kathryn Jean Lopez from The Corner, who says:
Unless Mary Cheney asks to be part of a political debate about this, there is no need to have a public discussion about her life. The New York Times raises the question of how/who, etc. That just seems outrageous to me. She is not the vice president. She is not the president. That's just uncalled for from anyone in the media/commentariat. I could be wrong but the media/commentators seem to be making it — Mary Cheney's pregnancy — a political issue, not the Cheneys.
And then he goes on to demolish the Times' unsurprisingly dishonest "reporting:"
Then the Times says this:
In 2004, Ms. Cheney worked on the Bush-Cheney re-election campaign, which won in part because of the so-called values voters who were drawn to the polls by ballot measures seeking to ban same-sex marriage.
Er, no. A very academic no (that is otherwise quite interesting on the impact of same-sex marriage initiatives). Sadly, no. No. A big old Pew Research no. All of these studies and many more can be found by Googling the words *Bush election 2004 gay marriage ballot*. It is hard to find stories with any actual data that make the opposite argument. The New York Times is not only dead wrong in its allegation, it is so wrong about a widely-studied and publicized "urban legend" that we are forced to choose between two explanations: (i) the reporter (Jim Rutenberg) just didn't do the most basic reporting, and his editor didn't ask him the most obvious questions, or (ii) the Times (either the reporter or the editor) deliberately inserted the legend about same-sex marriage initiatives to fabricate evidence in favor of one of the left's favorite arguments, that "so-called" values voters are easily duped.
Do read the whole thing.

Thursday, December 07, 2006

The fence works

Surprise! The Israeli security fence actually works - preventing suicide attacks, according to the leader of one of the foremost Palestinian terrorist organisations (via Melanie Phillips):
On November 11, Palestinian Islamic Jihad leader Abdallah Ramadan Shalah granted a long interview to Al-Manar TV, Hezbollah's television channel. During the interview, for the first time he admitted that Israel's security fence was an important obstacle to the terrorist organizations (the "resistance").
He noted that the suicide bombing attacks (istishhad) were the Palestinian people's "strategic choice," and were meant to "create a balance of force and deterrence" in the campaign against a superior enemy. Ramadan Shalah noted that the terrorist organizations had every intention of continuing suicide bombing attacks, but that their timing and the possibility of implementing them from the West Bank depended on other factors. "For example," he said, "there is the separation fence, which is an obstacle to the resistance, and if it were not there the situation would be entirely different."
Who knew?

Tuesday, December 05, 2006

Social responsibility

Forbes reports:
Wal-Mart's low prices haven't helped it gain a high perch in the public's esteem. At least, that's the conventional wisdom. Critics accuse the retail giant of destroying neighborhoods, exploiting its workers and discriminating against female employees. But when American consumers were asked to name a U.S. company that was socially responsible, they named Wal-Mart above all others.
The retail giant trounced second-place McDonald's (yes, McDonald's). In fact, 28% of consumers picked Wal-Mart Stores as the most responsible company, compared with 17% for McDonald's and 16% for third-place Microsoft.
It's funny that three of the corporations that activists target most seem to be so popular. Then again, it shouldn't be surprising considering that when corporate social responsibility advocates move to defend the rights of all sorts of disparate stakeholders, the company's actual customers tend to be overlooked.

Health care and capitalism

A while back I listened to this podcast interview from the Glenn & Helen Show, about health care. They spoke to Dr. David Gratzer, who is the author of The Cure: How Capitalism Can Save American Health Care. I thought it sounded interesting, so I bought the book and it just arrived in the mail. Some of the author's arguments are summarised in an editorial he wrote for the Washington Post:
How to employ market reforms? Here are five simple steps.
  • Make health insurance more like other types of insurance. Health savings accounts, which passed as part of the Medicare reforms of 2003, were an important first step, separating smaller expenses from high-deductible insurance, for catastrophic events. However, the legislation is overly rigid. Congress must expand and revise the structure of HSAs, and level the tax playing field for those not covered by an employer plan.
  • Foster competition. American health care is the most regulated sector in the economy. The result? A health insurance policy for a 30-year old man costs four times more in New York than in neighboring Connecticut because of the multitude of regulations in the Empire State. Americans can shop out-of-state for a mortgage; they should be able to do so for health insurance. Likewise, many laws intended to promote fairness end up reducing competition and thus innovation. Congress should reconsider such laws, beginning with the federal Emergency Medical Treatment and Active Labor Act (EMTALA).
  • Reform Medicaid, using welfare reform as the template. Medicaid spending is spiraling up, now consuming more dollars at the state level than K-12 education. Like the old Aid to Families with Dependent Children, part of the problem stems from the fact that the program is shared between both the federal and state government -- and is thus owned by neither. Congress should fund Medicaid with block grants to the states, and let them innovate.
  • Revisit Medicare. Back in the late 1990s, a bipartisan commission approved a reasonable starting point for Medicare -- junking the price controls, and using the Federal Employees Health Benefits Plan as a model. Elderly Americans would then have a choice among competing private plans. Given that the unfunded liability of Medicare is four times greater than that of social security, the time is right to experiment with this idea.
  • Address prescription drug prices by pruning the size and scope of the FDA. It costs nearly a billion dollars for a prescription drug to reach the market, and roughly 40% of that is due to safety requirements. This is effectively a massive tax on pharmaceuticals. With new technology and focus, it would be possible to update the FDA, drawing from President George H. W. Bush's experiments with contracting out certain approval steps to private organizations, which boasted lower costs and faster approval times.
None of these steps would be dramatic but all are important. Congress also slowly needs to weigh bigger issues: how to shore up Medicare, create portability of health insurance, and foster a market for medical innovation.
I highly recommend the podcast. During the interview Helen makes an interesting point: most sick people would prefer the timeliness and quality of treatment available in the US, so it almost seems that state-run systems are popular mostly because a strong majority of people are healthy (and it gives them a fuzzy feeling that "everyone gets taken care of"). In other words, in most Western countries the healthy majority imposes socialized medicine - which is notably fraught with rationing and forcing old and sick people to wait for even the most basic care - on everyone (other than those who can afford to sidestep the sometimes fatal queues: see here, for instance).
Another point Dr. Gratzer makes in the podcast (and I presume in the book) is that health care (which in the US is often part of the benefits offered by one's employer) should be decoupled from employment. In this regard, I recently saw an interesting article in Fortune which proposes a way to underline the problem:
In 2003, back when Continental Airlines (Charts) was losing its shirt, Gordon Bethune, its salty CEO, got sick of hearing that upstarts like JetBlue had created a new business model that would bury the industry's dinosaurs. So he had his CFO recompute Continental's earnings assuming the company had (like JetBlue) a much younger workforce - and thus much lower health, pension and related costs.
Presto: Earnings went from a reported $388 million loss to a $420 million profit, a swing of $800 million. "It was all bull," Bethune says now of the idea that the economic laws of air travel had been repealed. "If we could fire all our workers every five years, we'd look good too." Though Bethune cooked up what I call "age-adjusted earnings" simply to fend off attacks on Continental, the mammoth profit swing his analysis unearthed has big policy implications.
To most of us, the idea that a firm's success could depend so greatly on the youth of its employees feels crazy. Yes, GM and its ilk may have gotten themselves into trouble with generous giveaways when the good times rolled. But a sane nation would assess business performance separately from some socially determined sense of what makes for decent health and pension coverage for citizens.
A small but surprisingly powerful way to enlist business in this conversation would be for the Dems to turn Bethune's creative bookkeeping into a new rule for public companies: In addition to the usual earnings reports, require firms to issue an "age-adjusted" income statement that shows what earnings would be if the company had, say, average-aged workers.
Why would this break through the clutter? Unlike (sensible) new accounting rules that will force firms to put health and pension liabilities on their balance sheets, age-adjusted earnings would create a media hook that becomes part of every quarterly release. Imagine if TV anchors were saying things like "Today search giant Google reported fourth-quarter earnings of $600 million - though on an age-adjusted basis it was $150 million less."
The columnist's goal is actually to generate the necessary political capital to implement state-run health care, but it seems like a useful tool to me regardless of what the intended goal is: maybe it would even help to instigate more market-oriented reforms.
For further reading on health care, see this series of posts at Asymmetrical Information.

Bush and the Nazis

Diane McWhorter has an appalling essay in Slate (really, it's goosebump inducing - if not worse) in which she complains that President Bush isn't compared to the Nazis often enough. I don't have the patience, time and energy to write a rebuttal, but the American Heritage blog has an excellent analysis:
Ms. McWhorter handsomely acknowledges that the Bush people have avoided exterminating the Jews, but insists that this does not get them off the hook. She concludes by assuming the point at issue: The United States is like Nazi Germany because ordinary Americans went along with Bush for a number of years. Before that dazzling display of circular reasoning, she makes a number of other comparisons, and one core of her argument focuses on the brief threat to change the Senate’s rules on the filibuster, which, had it happened, "struck me as a functional analog of the Enabling Act of 1933, which consolidated the German government under Chancellor Hitler and effectively dissolved the Reichstag as a parliamentary body." For this analogy to hold, you have to assume, at a minimum, that in the event the Republicans had changed the filibuster rules on confirming Federal judges, there would never again have been an election in the United States. And to assume this, you have to be an idiot.
Do read the whole thing.

When it pays to be gay

This must be the funniest argument in favour of gay unions I have ever heard. GayandRight says:
Another reason why gay marriage is important...
and quotes the following story from the Washington Blade:
Michael Kopper, 41, the gay former Enron Corp. executive who became the first to plead guilty to financial crimes among the company's top management, was sentenced Nov. 17 to three years and one month in prison. Judge Ewing Werlein, of the U.S. District Court in Houston, also sentenced Kopper to two years probation and ordered him to pay a $50,000 fine.
The sentencing came four years after Kopper, who lives in Houston, pleaded guilty to two counts of conspiracy after he admitted that he and his domestic partner, William Dodson, stole about $16.5 million from Enron and its shareholders. Kopper cooperated in the government's investigation into the massive financial scandal that rocked Wall Street and resulted in Enron’s bankruptcy. The Enron collapse also resulted in the loss of millions of dollars to company shareholders and employee pension funds.
Although authorities forced Kopper to return $8 million to the government and to relinquish his rights to another $4 million through forfeiture proceedings, Dodson has been allowed to keep $9 million in funds that Kopper helped him obtain through Enron-related scams. The fact that U.S. and Texas laws do not recognize same-sex relationships most likely prompted authorities against going after Dodson's financial gains in the Enron affair, financial observers have said. Federal prosecutors forced the married spouses of several Enron figures to forfeit money they obtained in schemes operated jointly with Enron executives.
I bet the shareholders are not amused, but you can't deny the irony of it all.

Monday, December 04, 2006

Bringing statistics in line with reality

RGE Monitor's Econmonitor blog has an interesting post about the vaunted Swedish "welfare" economy:
So how does Sweden manage to have such remarkably low unemployment? Long term sick leave is paid for by the government at a generous percentage of the original wage, and thus large groups are not counted as unemployed, because they are still officially employed, though not actually working.
In other cases, many of the unemployed are placed in labor market projects, which also depresses open unemployment figures. In other words, real unemployment is not 4.6%, as the official statistics state, but as high as 12% or 15%.
But no worries, cooler heads are prevailing:
But now the new right-of-center (by European standards) government has shifted focus: the number of positions for labor market projects is being cut back, and the ones remaining will focus on getting the short-term unemployed back to work. The result: Open unemployment is climbing in the latest statistics, not because Sweden's economy is doing worse, but because the numbers are beginning to reflect reality.
And more of the same good sense seems to be on the way. Maybe we won't hear so much "we should all imitate the Swedes" cheer-leading from the EU bureaucrats in the future... On the other hand reality rarely does get in the way of their ideas.


BBC News has a report about passport controls:
Serious questions have been raised over Britain's border security after a BBC journalist entered the UK twice on fake and stolen passports. Shahida Tulaganova obtained 20 illegal passports - each from an EU country, including the UK - within months. Those in the trade told her to travel via sea or bus, saying port security was less stringent than airports.
Shahida travelled across Europe to obtain her false documents for her Panorama investigation. They ranged in price from just £250 to more than £1,500. Some were provided within several days, while others took weeks.
She found her first illegal passport dealer in the centre of London - through an advertisement in a Russian language newspaper. The dealer - Henry - provided her with a genuine Czech passport, by getting someone who looked like her to apply for one, using her photo.
Which makes me wonder why they even bother checking passports. There must be some absolute identifier which can ensure that these things don't happen. Fingerprints maybe? Retinas? I'm all for relatively open immigration, but to be viable, both practically and politically, border crossings need to be strictly enforced, and it has to be possible to easily and unequivocally identify immigrants.

Quote of the day

Lucy Kellaway, in a humorous discussion in the Financial Times on dumb questions:
If a senior person asks a dumb question the drill is that everyone pretends not to notice. I once sat next to Prince Philip at a lunch and he asked lots of hair-raisingly dumb questions. One of the advantages of being married to the Queen (or even being the Queen) is that you can ask as many of those as you like.
It turns out that what they always tell you "no question is ever dumb," is rarely correct. Who knew...

Sunday, December 03, 2006

Iran's bargaining chip

BusinessWeek has an interesting report on Iran, which lends credence to what I mentioned recently about the way forward on that front:
Yet Iran has a surprising weakness: Its oil and gas industry, the lifeblood of its economy, is showing serious signs of distress. As domestic energy consumption skyrockets, Iran is struggling to produce enough oil and gas for export. Unless Tehran overhauls its policies, its primary source of revenue and the basis of its geopolitical muscle could start to wane. Within a decade, says Saad Rahim, an analyst at Washington consultancy PFC Energy, "Iran's net crude exports could fall to zero."
That's not to say Iran doesn't have abundant resources. The country's 137 billion barrels of oil reserves are second only to Saudi Arabia's, and its supply of gas trails only Russia's, according to the BP Statistical Review of World Energy. Getting it all out of the ground, though, is another matter. Iran has been producing just 3.9 million barrels of oil a day this year, 5% below its OPEC quota, because of delays in new projects and a shortage of technical skills. By contrast, in 1974, five years before the Islamic Revolution, Iran pumped 6.1 million barrels daily.
The situation could get even tougher for the National Iranian Oil Co. (NIOC), which is responsible for all of Iran's output. Without substantial upgrades in facilities, production at Iran's core fields, several of which date from the 1920s, could go into a precipitous decline. In September, Oil Minister Kazem Vaziri-Hamaneh suggested that with no new investment, output from Iran's fields would fall by about 13% a year, roughly twice the rate that outside oil experts had expected. "NIOC is likely to find that even maintaining the status quo is a mounting challenge," says PFC Energy's Rahim.
As I said, this story only underlines the fact that bringing the Mullahcracy to its knees should be a cinch (well, almost). That is not to say that they should be brought to their knees immediately, but if it was made much clearer - both to us and to them - that it is possible (which much of the West does not seem to realize), and that we are willing to do so if necessary, I imagine we would get a much more compliant attitude from the world's peanut gallery. It would certainly beat this approach.

Post Scriptum:
One more reason to start making clear that bad behaviour has consequences:
U.S. officials say they have found smoking-gun evidence of Iranian support for terrorists in Iraq: brand-new weapons fresh from Iranian factories. According to a senior defense official, coalition forces have recently seized Iranian-made weapons and munitions that bear manufacturing dates in 2006. This suggests, say the sources, that the material is going directly from Iranian factories to Shia militias, rather than taking a roundabout path through the black market. "There is no way this could be done without (Iranian) government approval," says a senior official.
How hard is it for the West to realise that there is only one language these autocrats understand?

Friday, December 01, 2006

Hank vs. Pinch?

The New York Post reported the other day that Hank Greenberg has been buying up shares in the New York Times Company:
Billionaire insurance titan Maurice "Hank" Greenberg has begun buying huge blocks of New York Times stock to break the Sulzberger family's stranglehold on the media empire, The Post has learned.
Sources confirmed that the famously combative Greenberg has been buying hundreds of thousands of Times shares, but did not disclose the exact number or the size of the stake he wants to own. Greenberg has both the assets - Forbes estimated his net worth at $3.2 billion - and the temperament to jump into a fight over the future of the stumbling newspaper giant.
A major stock position would put Greenberg in league with already angry Times' shareholders, such as Morgan Stanley Investment Management, to battle the board over whether the founding Ochs-Sulzberger family should hold a powerful class of stock that accounts for a majority of the voting power at the company.
The ownership structure of the Times Co. is such that the Ochs-Sulzberger family owns the majority of the voting rights but only about 20% of the share capital (giving them the right to elect nine of the company's 13 directors). Therefore it seem to be impossible for Greenberg to obtain control of the company without the consent of the Sulzbergers. But he undoubtedly knows what he's doing, and I don't think he'd be pouring millions into a venture that did not have some return, either financial or in influence.
There has long been speculation that the Sulzbergers would like to take the company private, and although this has increased with Greenberg's reported shenanigans, it seems to be an unlikely prospect. The Boston Herald reported in July (free version here):
The famous Sulzberger dynasty is quietly tightening its financial grip on the New York Times and the Boston Globe, a new analysis shows. And it's using shareholders' cash, instead of its own, to do it.
A Herald examination of Times financial filings shows that since Arthur "Pinch" Sulzberger Jr. took over as chairman in 1997, The New York Times Co. has bought up almost one-third of the stock held by outsiders. Meanwhile the Sulzbergers themselves have "basically held their shares," says company spokeswoman Catherine Mathis. And so, without spending a dime, the storied newspaper dynasty has raised its stake to about 20 percent.
In other words, pretty much every penny of profit generated by the New York Times, the Boston Globe and other company operations under Pinch has been spent... gradually returning the company to Sulzberger hands.
Meanwhile the program has been a disaster for the outside investors who still own 80 percent of the company. Pinch and his team blew much of the cash buying stock at the peak of the market. Based on current prices, they overpaid by $1.2 billion.
But don't expect a leveraged buyout too soon. Brian Shipman, analyst at UBS, said a deal "is certainly a possibility" at some point. But, he thinks, not at current levels. He thinks New York Times stock would have to fall to about $17 before it started to look attractive to the kind of private equity backers that Pinch would need. Other analysts suggested $15.
Meanwhile, this week's BusinessWeek explains:
Still, the Times faces increasingly withering scrutiny. Investors holding more than a quarter of its common shares withheld votes for directors at the annual meeting in April. At the same time, Morgan Stanley Investment Management, which owns 7.6% of the company's common shares, filed documents with the Securities & Exchange Commission requesting that the dual share structure, never popular with governance hawks, be put to a shareholder vote. The firm also wants the position of chairman and publisher, held by Sulzberger, to be separated. The Times Co. is especially vulnerable because its big-city newspapers are facing major threats from the Web. Since January, the publisher's shares are down 14%, to about 24.50.
I have little sympathy for Arthur Sulzberger Jr., and I think his tenure has seen the Times sink to new lows in various respects. Not only have there been several journalistic scandals, the newspaper has increasingly blurred the line between the editorial page and what should in theory be impartial news coverage. I think only the most entrenched East Coast liberal-lefty would fail to recognize that the Times' standards have been in woeful decline. It has come to the point that when I see a story in the paper, I take it with the same sizable pinch of salt that I do if I had seen it in one of the more low-brow British tabloids (as opposed to the Washington Post or the Wall Street Journal, which are as liberal as any in their reporting, but which I think can be trusted more): there have simply been too many instances in which the Times has demonstrated its inability to be impartial.
It'll be fun to see if Hank Greenberg knows something we don't, and if he plans to do anything exciting – it could make for interesting reading in the coming months!

Post Scriptum:
Some more kvetching about the New York Times: here, here and here. Also see an excellent evisceration by Bruce Bartlett from Commentary magazine (July/August 2005): Class Struggle in America? (requires subs.; free version here).