It's Still the Same Sad Story

This is really big news--except that it's not new at all.

The Pension Benefit Guaranty Corporation may go bankrupt, and if it does, a lot of people--up to 44 million people--who are expecting to collect pensions after they retire may be pinching pennies instead.

Unlike 401k's, pensions are supposed to deliver a fixed amount of money that people can count on in retirement. And just like the FDIC insures your bank account against bank failure, the PBGC is supposed to insure your pension against a corporate pension fund running dry. You would think the very first priority of an insurer like that would be to take care of its own money. But according to the Boston Globe, "Just months before the start of last year's stock market collapse...the Pension Benefit Guaranty Corporation decided to pour billions of dollars into speculative investments such as stocks in emerging foreign markets, real estate, and private equity funds." Well, we know what has happened to the value of those investments!

This is really big news because so many older Americans will never get the chance to make up for those losses. If they are to be saved, it may cost the taxpayers "several hundred billion dollars"--on top of the money we are already spending to bail out the banks.

But it is also an old story. The name of the story is "double or nothing." During the Bush administration, the director of the PBGC realized that it was falling behind on its obligations. According to the Globe again, he said that "the prior strategy of relying mostly on bonds would never garner enough money to eliminate the agency's deficit." His answer? Gamble!

This was the same reasoning that led the Savings & Loans banks to make risky investments in the 1980's. Before that, they had been resolutely local, conventional, and conservative. Then, they tried to make up shortfalls by buying and flipping real estate for a profit and by investing in all kinds of high-risk ventures, foreign and domestic. We the taxpayers ended up on the hook then too.

We cannot rely on capitalism to save us from the shortfalls of capitalism. It takes serious government policy, made by grown-ups, to do that.

Ghost Wars, part II

The enemy of my enemy is NOT my friend. That's a second lesson I've learned by reading Steve Coll's history of U.S. involvement in Afghanistan before 9/11/2001. I hope Obama has learned it too.

From 1979 straight through the CIA's secret war against the Soviet Union, then the Soviet-backed government, and then al-Qaeda in Afghanistan, the U.S. largely relied on two nations with assets in country that the U.S. could not rival. Those two countries were Saudi Arabia and Pakistan. But Saudi Arabia could not go after bin Laden seriously for domestic political reasons, and they convinced themselves that the Taliban would gradually become more conservative, as the Saudis had done before them: more concerned with maintaining themselves in power than in spreading Islamic revolution. Saudi Arabia carried messages to both sides, but it never used its influence effectively to change the Taliban's stance toward the U.S., or to convince them to give up bin Laden.

Pakistan, meanwhile, had every reason to cooperate with bin Laden. He was training Islamic guerrillas that were tying down major parts of the Indian army in Kashmir, keeping India at bay without exposing Pakistan to direct confrontation. The ISI, Pakistan's intelligence agency, found ways of accepting U.S. money and using it to build its own influence in Afghanistan without serving U.S. interests.

Besides these two state actors, there was the Northern Alliance, headed by Ahmed Shah Massoud. Coll clearly has a soft spot for Massoud, "the Lion of Panjshir," but his book portrays him as another repressive thug, motivated by religion and nationalism, who cared about taking Afghanistan over from the Taliban but didn't see bin Laden as any particular threat. He would have been willing to kill him if he could, but he was in northern territories and bin Laden was mostly in the south and east. As long as U.S. policy was neutral between the Northern Alliance and the Taliban (which it was for years), it only made sense that Massoud would not stick his neck out to help the U.S. either.

We have to learn that other people and nations have interests and strategies of their own. They are not good guys because they do what Washington wants them to do, nor are they bad guys because they do something different. They are in business for themselves. If we want to do business with them, that's the first thing to recognize.

Ghost Wars, part I

Payback is a poor excuse for a foreign policy. That's one of the lessons I derive from reading Steve Coll's Ghost Wars : The Secret History of the CIA, Afghanistan, and Bin Laden, from the Soviet Invasion to September 10, 2001.

I'm only 2/3 of the way through this very detailed history, but some things are already clear. One is that in 1979, when the Soviet Union invaded Afghanistan to ensure it would have a friendly government in a strategically located country, the U.S. was still licking its wounds from Vietnam. Zbigniew Brzezinski, President Carter's national security advisor, was still viewing the Soviets as the people who invaded Eastern Europe. The Carter administration felt betrayed by the Soviet move, and they took it personally. They saw Afghanistan not as a country of its own, with a people whose destiny mattered, but as a place where they could get back at the U.S.S.R. and humiliate them as the U.S. had been humiliated earlier in the decade.

The U.S. armed violent Islamic fundamentalists to fight against the Soviets in Afghanistan. With what result? Some of those became the warlords who carved up Afghanistan in the 1980's and early 1990's, after Gorbachev decided the war in Afghanistan was unwinnable: Hekmatyar, Massoud, etc. Some became the jihadists who replaced those warlords. We know them as the Taliban.

For over two decades, to spite the Soviet Union, the U.S. condemned Afghanistan to civil war and chaos. President Obama today is making tough choices (and I believe, wrong choices) about sending troops to Afghanistan partly because of the problems the U.S. made.

We did not create those problems all by ourselves, however. That's the subject of a future post.

It's the System, Stupid

http://www.boston.com/bostonglobe/editorial_opinion/cartoons/20090309inktank?pg=2

Socialism, Reagan-style

It helps to have a historical memory! Republicans are calling Obama's recovery plan "socialist" in part because it raises taxes on the rich. But it doesn't raise them anywhere near as high as they were under Republican presidents Ronald Reagan or Richard Nixon. They don't make Republicans like they used to! Or socialists, for that matter!

Nobody Knows All the Torture We Haven't Seen

Italian prosecutors say the CIA abducted a radical Egyptian cleric, Abu Omar, from a Milan street on Feb. 17, 2003, in an "extraordinary rendition" operation. It may have been a falling out among thieves. Back in 2005, the Chicago Tribune revealed that Abu Omar was once the CIA's most productive source of information within the tightly knit group of Islamic fundamentalists living in exile in Albania. The CIA may have kidnapped him to get him to become an informer again.

The Italian government protested the abduction and mounted a trial of Americans allegedly involved in it. Today, however, the AP reports,

Prosecutors say Osama Moustafa Hassan Nasr, also known as Abu Omar, was then transferred to US bases in Italy and Germany before being moved to Egypt, where he was imprisoned for four years. Nasr, who has been released, said he was tortured.

Did it happen that way? We might never know. Italy's Constitutional Court said some of the key evidence in the case was classified information. It could not be admitted in court. The case against 26 Americans may collapse because of that.

It is too much to expect that the Berlusconi government would declassify the information and let the trial proceed. But is it too much change to hope for that the Obama administration would conduct its own investigation into state-run kidnapping and torture, and bring the responsible parties to trial?

You Can't be Sick, There's a War to Fight!

My greatest respect to former Marine captain and rifle company commander Tyler E. Boudreau. In today's Globe, he reveals the dilemma he faced when the Iraq war began to drive his soldiers crazy:

In the spring of 2008, RAND released its well-known report in which it estimated that one in five service members returning from war will contend with symptoms of post-traumatic stress or depression. In a typical rifle company, those estimates would represent a loss of at least 30 men. I knew I couldn't afford that.

What good are soldiers with post-traumatic stress disorder in the field? Yet what good is a company forced to fight at 80% of its strength? Boudreau states with stunning clarity, "A commander cannot serve in earnest both the mission and the psychologically wounded." The mission will come first, and people will be--have been--forced to fight when they should be receiving mental health care at home. Is there no Geneva Convention to keep us from torturing our own people?

Recession-proof but Not Bullet-Proof

In a recession, there are certain things people do to get by. They pinch pennies. They leave the work force and take the time to get more education. They go into the military.

One of these things is not like the others.

When you cut back on spending, it slows the economy down even further. Eventually, though, the economy recovers and you have more savings (or less debt).

Similarly, going to grad school during a recession takes you out of the work force at a time when there's less demand for workers. When demand picks up again, you have more knowledge and better credentials. You might be able to get a better job.

When people went into the military for the war in Iraq, as previously pointed out in this blog:

Young Americans came home with grave mental health problems.

The military tried its best to deny them medical coverage.

Many had problems adjusting to nonviolent civilian life.

Vets came home with Post-Traumatic Stress Disorder. They will be at greater risk for heart attack than the rest of us as they grow older.

The military also tried to cheat returning veterans out of their costly GI benefits, or "bait and switch," giving vets much less than they were promised when they joined.

Women in the military were sexually harassed and, too often, raped by their fellow soldiers.

KBR, a Halliburton subsidiary, exposed soldiers to sodium dichromate, "one of the most potent carcinogens" known to man while they guarded a water treatment plant in Iraq that the company was repairing.

Military contractors suffered the same mental and physical wounds as soldiers.

"Typically a bad economy has worked to the benefit of the military," retired Navy Rear Admiral John D. Hutson told the Boston Globe. But it's worked to the injury of the people who joined the military.