E pur, si muove.

I have, once again, circumnavigated the globe, and confirmed Galileo's scandalous assertion that the earth might be round.
After a flight to Europe, followed by a visit to Singapore , San Francisco and a last flight to Washington, I am back to square one, Springfield , Virginia.

My last stop in California was a delightful end to my trip. In spite of Santa Ana winds, et brush fires, I had the pleasure to cross the San Francisco Bay, enjoy the beautiful landscape, and take advantage of the hospitality of my left coast family, the Pascos in Fairfield, and the Amadors in Roseville.

But as Apollinaire said about the water under the Seine bridges, the bridge may be the same, but the water under it is different. I returned to Washington in time to see the regrettable passage of the law allowing the US to torture and deny habeas corpus to anybody suspected of being an "enemy combatant", and that includes you and I. No presumption of innocence, no right to know why you have been arrested, no right to evidence, admission of hearsay, legalization of torture. Politicians of BOTH sides of the aisle capitulated in order to save their seats. Shame on them. They have knocked the statue of Liberty off its pedestal more surely than we knocked off that of Saddam Hussein. They have handed Bin Laden a greater victory than that of 9/11.

The Nurnberg trials were categorical, nobody can have the excuse to say : "I just obeyed orders". Jodl was hanged, Keitel was hanged, Streicher was hanged, etc..
Uncle Sam just did a huge step backward to the Middle Ages with this vote.
It raises moral questions for somebody like me, about to become a US citizen: do I want to ecxchanged a country where torture is banned for one where it is OK ? A country where the death penalty is abolished for one where you can be executed without the right to know why?
In 1998, General Aussaresse, an 83 year old French General published his memoirs on the Algerian war. He confessed to having supervised the torture of arab urban guerillas. He was sentenced to life imprisonment after this revelation , for crimes against humanity......
An interesting parallel.

At Changi Airport

It is early in the morning and i am in the lounge at Changi Airport, ready to embark on an 18hr trip across the Pacific Ocean. After a stopover in Seoul, Korea, i will arrive in San Francisco Thursday around noon.
Singapore has been a very good experience. It is well worth the trip. The progress accomplished since my last visit in 1985 highlight the shift of dynamics from the west back to the east.
Although Singapore is an authoritarian regime, ruled by the son of Lee Kwan Yew, there is a parliament and the multiethnic , multicultural society lives in peace and prosperity. Chinese, Malays and Indians coexist well together. The place is very clean, caning is the common punishment for offenses, and there is no religious strife.
Lee Kwan Yew is the "Mentor Minister", at 83 he is watching his son rule.
Everybody has to pay 20% of his income to the Common Provident Fund. Employers also pay 20% of their profit in that fund. Anybody can use the fund for education, health or housing purposes.
Tomorrow, the much cooler climate of Northern California awaits me.

Globalization

I was lucky enough to attend the Monetary Committee breakfast in Singapore. The topic: globalization.The participants: Finannce ministers and Central bankers from all over the world.Bob Bernanke, Hank Paulson, the CEOs of HSBC, RBS, and a few other heavy weights with Bob Zoellick, and the heads of all IFIs (International Financial Institutions) such as UN, UNDP, OECD, EU, AU, WTO etc..
People who not only know about the Financial world, but who are in the driver's seat.

Conclusion: The World has changed. Europe and to a lesser extent the US are dragging. Asia is booming, even Africa and latin America are doing great. After 40 years of aid, the former Third World is catching up. Problem: Our jobs are up for grabs by all of them. CEOs, who owe their loyalty to consumers and shareholders go where costs are lowest. Our consumers go for the lowest price. Today, anybody in Gabon, Morrocco or Iran can do what was done in Detroit, Birmingham or Dusseldorf.....and much cheaper.

Most of these countries have stopped borrowing from the IMF or the WorldBank . These institutions are victims of their success. The US is the largest borrower in the World. Instead of the split between rich and poor being between the First and the third world, it now is within each of our countries, between the skilled and the unskilled.
Problem:
Voters in the US and in Europe are not aware of the change. They view the disappearance of manufacturing jobs as a temporary outrage that can be stopped by "courageous" politicians with protectionist measures. You put a high tariff on imports. You close the border, and start a buy American campaign. politicians are always ready to offer simple remedies to be re-elected.
In Europe, EU citizens do not realize that the world can make the same Renault or VWs but without the extra cost entailed by social benefits and entitlements. Worse, because of protection against Asian brands, European cars have not innovated and are less attractive to the outside world , except for the luxury niche.
What politicians do not say, is that it is too late! Not only protectionism would kill competition, but it would allow a price hike. Higher prices = less purchases = less factories = less jobs = less money = less purchasing power = bankrupcies etc.
That happened in 1929 after the Smoot-Harley act....
When president Bush protected US steel manufacturers from foreign imports, Europe retaliated with a ban on US products. Worse, Detroit had no choice but to buy american steel and add to the costs of its cars!

As I write this, the WTO negociations are suspended and might die. If they are killed because of protectionist policies in the US and in Europe, the consumer can get ready to see its purchasing power take a tremendous hit. And if you remember what followed 1929, it won't be the biggest problem.

Why is it that consumers do not organize to save globalization from a handful of backward populists?

I was actually paid to attend this select breakfast. I would have paid to be there.

Byzantium.

In a speech at Regensburg University, Pope Benedict XVI made a speech that seems to have caused waves around the world. It would be welcome news that a pope, any pope get such an audience. Except that, this time, the reaction was very negative. Holding a conference at the school where he had the chair of theology, pope Benedict read a text written by a Byzantian emperor in the 14th century. The Emperor was asking rhethorically what good had prophet Mohammed, PBUH,ever brought except destruction by the sword. The text was written at a time of great confrontation between moslems and christians. It was not a coincidence that His Holiness chose this text at a time when moslem violence seems to reach a new peak.
The "arab street" mysteriously informed of a text in German, written 7 centuries ago,reacted immediately with outrage. 1 billion germanists and Byzantium specialists! We did not know about these hidden talents of our moslem brothers.

Good for the pope. And shame on those who will try anything to inflame the mob in order to fulfill their violent political agenda. After the "cartoons" crisis, I say enough! Where are the so called moderate moslems? Where were they on 9/11?
Enough with mindless violence.
I like this Pope.

Views from the wings....

The IMF-Worldbank annual meetings have started in Singapore.
And everyday, I trek from my hotel to the heavily guarded Suntec Center through a maze of underground shopping malls. The alternative, walking the spotless and flowery streets of the city,would be tough. Why do men have to wear heavy dark suits and ties, on the equator, with 90% humidity, is beyond me.
In the malls, the average age seems to be between 15 and 20. Not unlike Korea, Thailand or Vietnam. Asia is young. And they all seem to be studying books! (China produces 4 times as many graduates as the US.)
The mix of scantily clad chinese with hijab wearing malays does not seem to represent a clash of civilisations.
Once you pass the security check you are privy to the latest predictions about the economic future of the planet. The top economists meet the top bankers from all over the world. And you can see, almost physically how the world has radically changed.

While the planet , over all is in good health, the best in 40 years, with 5,6% growth, some continents are on the decline(Europe), and others are threatened with dire problems (the US.)
For Europe, it is the obstinate hanging on to "the European Model", a wewlfare state nobody can afford when jobs emigrate overseas.
For the US,it is mismanagement:
Whereas the US had a record surplus of 325 bn dollars in 2000, today, it is a debtor to the world. The US owe the rest of the world 9 trillion dollars and keep begging for 2bn dollars a day , just to pay its bills.
Such a huge debt costs: the countries that lend the US want to be paid for their money: It costs the US taxpayer 325bn dollars, or close to 1bn a day, just to pay the interest.
The gap between its earning and its spending is 400bn dollars.(budget deficit).
The US debt would be enough to to buy 28 solid gold Eiffel Towers.

But while the US danced, the Asian worker bees made honey.
China now owns 925 billion US dollars. We hope they will keep on lending it...if we are nice to them. Our other bankers are Saudi Arabia, the Gulf States, Kuwait, and Venezuela.
The IMF member states no longer accept to be ruled by Washington. Given its now modest role, it can only acquiesce to abandon a large part of its shares of the world's financial system to "emerging countries", like China, India, Mexico, Brazil or Turkey.
The US consumer, on a non stop buying spree, has helped the rest of the world grow to be rivals. It has also provoked an exodus of jobs overseas:
Between 1998 and today, 3,4 million US jobs and 2,3 million just for Germany, have emigrated to Asia.

Not only have Europe and the US lost industrial and financial power, but in the boardrooms, even if it is still in English, the major decisions are increasingly taken by Asian voices.
Sic transit gloria mundi.

Singapore

I have arrived in Singapore.
24,000 participants to the WorldBank/IMF Annual Meetings are to be welcomed by "4 million smiles".
To be sure, after a mere 24 hours on the island state, I have already practiced my Chinese. Singaporeans speak Malay, English and Chinese. Fortunately for me they use mandarin, but unfortunately they still use the classic, unsimplified characters.
The island has completely changed since my last visit in 1985. It is a strikingly beautiful window into succesful Asia. Every square inch is manicured and landscaped. Flowers and gardens are abundant, even in the middle of the business district.The warm temperature and high humidity make it a challenge to explore on foot.
The country is famous for being spotless. But the "Long bar" at Raffles, of Somerset Maugham fame, claims you can "come and LITTER "the bar with peanuts!
The food, malay, indian, chinese, and world-capitalist, is a treat in this town. Satay for lunch, laska noodles for dinner and a Starbucks frappucino in the afternoon.
Chinese women in miniskirts throng the sidewalks along with bearded sikhs, veiled malays, and sweaty westerners. The odor of cloves cigarettes wafts over the stalls. A network of underground shopping malls allows the visitor a cool trip downtown.
Tomorrow, we will take care of the world's financial woes.
The demonstrators, a constant feature in these meetings, have been relegated to an Indonesian island several miles offshore!

On the road .

Once again, I am about to check if the earth is really round. I left Washington last Friday and flew to Frankfurt, Germany. 256km , and a VW Polo later, I was in Thionville, just in time to celebrate my Dad's 84th birthday. The weather was gorgeous, and so was the family gathering.
I am now in the drab Frankfurt airport lounge, on my way to Singapore.
It was interesting to commemorate 9/11 in France. The media and the people, by and large, still subscribe to Le Monde's headline on the real 9/11: "We are all Americans". Many reports, debates and documentaries occupied most of the day on the big event. The French seem just as moved and upset as they were 5 years ago.
As to the war in Iraq and the so called "war on terror", they side with the majority of the American public....

The rule of law.

Good news!Or not.

Yesterday, President Bush has announced, among other things, that 9/11 perpetrators, held incommunicado until now in various and sundry CIA prisons abroad, would be transferred to Guantanamo bay. to be tried. He urged Congress to pass legislation to set up military tribunals to afford the alleged criminals a full trial, with lawyers, 5th amendment protection, albeit without right of discovery..

Other good news, the Pentagon is to issue a new manual on how to question alleged ennemies: gone are the hoods, waterboarding, sleep deprivation, the dogs, and other electric shocks.

And since good news always come in threes, the US is transferring to Iraq part of the responsibility for the Iraqi army. Onward to victory!

The sad history of this Administration entitles us to ask a few questions:

Is it really good news? First we learn that, what until now was only suspected and vehemently denied,was true: The US government, had broken the rule of law, disregarded the Geneva Convention, maintained a gulag archipelago abroad with the complicity of arab and European governments, tortured "enemy combattants", and never informed Congress, the co-equal branch of government.

Why come clean now?
Who will really believe that any of these practices have really ceased?
The upcoming November election looms as a disaster for the Republicans because the voters are angry about the war in Iraq. It was time for the Administration to shift the public's attention to FEAR. "We are still at risk. We have caught the bad guys, and if only the bad Congress gave us a law, we could judge them."
In a call-in program on WTOP this morning, 81% of the callers were in favor of torture and indefinite imprisonment of all "enemy combattants", more or less linked with 9/11.
The electoral move by Bush might save his party!
Another reason to make this announcement is that, if the Democrats win the House, and therefore get to chair hearings and inquiries, many members of the Bush Administration will need lawyers and could even face criminal charges. Alberto Gonzales, has quietly advised loyal financiers of the party to start constituting a war chest fot just that eventuality.

September in Virginia

Actually I won't be in Virginia for much of September. My job will take me to Chicago, Fargo,Germany, France, Singapore, Vietnam, California and a few towns in between.
I shall be part of the Annual Meetings of the IMF in Singapore.
But life is good in Virginia. We just had the visit of ERNESTO, the hurricane, after it became a tropical depression. that was enough to bring the temperature from 90F to 60F in a jiffy. Last night we lost power due to branches falling on power lines. C
Candlelight dinner!
In the Virginia vineyards, the harvest is at its peak. The Seyval and Vidal rieslings are already in. ready for the crush. As to the linden Bordeaux, their turn will come soon. A very dry August, followed by cooler weather and some rain, will make it another banner year for Linden vineyards.
The House and Senate campaigns are now in full swing and we are hoping for a change of decor, come November.
The war in Irak is worsening. We were stunned last week to see the Pentagon itself admitting reality. Bush is now campaigning for "Victory". Members of his party are trying to pretend they have never seen him.....
I do not like the old saber rattling I hear concerning Iran. Surely they cannot try to pull the wool over our eyes a second time! What did GWB himself say: "Fool me once, I am fooled, fool me twice, euh, fool me twice..."