http://www.american.com/archive/2007/august-0807/the-decline-and-fall-of-declinism
The Decline and Fall of Declinism
By Alan W. Dowd Tuesday, August 28, 2007
Filed under: Big Ideas, Economic Policy
Some people don’t want to admit it, but America is in great shape.
McDonalds- 2Under the heading “The end of a U.S.-centric world?” the PostGlobal section of The Washington Post website recently declared that “U.S. influence is in steep decline.” It was just the latest verse in a growing chorus of declinist doom-saying at home and abroad.
In 2004, Pat Buchanan lamented “the decline and fall of the greatest industrial republic the world had ever seen.” In 2005, The Guardian’s Polly Toynbee concluded that Hurricane Katrina exposed “a hollow superpower.” In 2007, Pierre Hassner of the Paris-based National Foundation for Political Science declared, “It will not be the New American Century.”
And the dirge goes on.
It’s a familiar tune, of course. We heard it in the early 1990s, when economists, political scientists and pundits were quipping that while the U.S. and Soviet military superpowers waged the Cold War, it was economic superpowers Japan and Germany that won it; in the 1980s, when Paul Kennedy led the chorus by concluding that America was tumbling toward “imperial overstretch;” in the 1970s, when the U.S. slipped into a malaise; and in the 1960s, which began with the U.S. unable to dislodge a communist dictator 90 miles off its coast and ended with the U.S. unable to hold back the spread of communism half-a-world away.
But the declinists were wrong yesterday. And if their record—and America’s—are any indication, they are just as wrong today.
Any discussion of U.S. power has to begin with its enormous economy. At $13.13 trillion, the U.S. economy represents 20 percent of global output. It’s growing faster than Britain’s, Australia’s, Germany’s, Japan’s, Canada’s, even faster than the vaunted European Union.
In fact, even when Europe cobbles together its 25 economies under the EU banner, it still falls short of U.S. GDP—and will fall further behind as the century wears on. Gerard Baker of the Times of London notes that the U.S. economy will be twice the size of Europe’s by 2021.
Declinists were wrong yesterday. If their record—and America’s—are any indication, they are just as wrong today.
On the other side of the world, some see China’s booming economy as a threat to U.S. economic primacy. However, as Baker observes, the U.S. is adding “twice as much in absolute terms to global output” as China. The immense gap in per capita income—$44,244 in the U.S. versus $2,069 in China—adds further perspective to the picture.
America’s muscular economic output comes courtesy of the American worker, who is growing ever more productive. Matthew Slaughter of the National Bureau of Economic Research details in The Wall Street Journal how, beginning in 1995, U.S. worker productivity began to accelerate. “From 1996 through 2006 it doubled, to an average annual rate of 2.7 percent.”
Another recent analysis—surprisingly filed by The New York Times—notes that this technology-driven “productivity miracle” has not manifested itself in other developed economies. Citing research (PDF) by John Van Reenen and others at the London School of Economics, the Times concludes that when U.S. firms take over foreign firms, the latter enjoy “a tremendous productivity advantage over a non-American alternative…It is as if the invisible hand of the American marketplace were somehow passing along a secret handshake to these firms.” As Reenen and his colleagues conclude, it appears that the way “U.S. firms are organized or managed…enables better exploitation of IT.”
This should come as no surprise. As Derek Leebaert explains in The Fifty-Year Wound, the information technologies that began emerging in the late 1980s “forced decentralization and demanded the sort of adaptivity made for America.”
So what do these numbers and comparisons tell us? For starters, as historian Niall Ferguson points out in Colossus, they tell us that the U.S. share of global productivity “exceeds the highest share of global output ever achieved by Britain by a factor of more than two.”
They also serve to explain how the United States can withstand not just the human losses and psychological blows of a 9/11 or Katrina, but the sort of economic and financial blows that would have overwhelmed any other country on earth.
Just consider what the U.S. economy has lost since 9/11. One estimate posited that by the end of 2003 the U.S. could have lost as much as $500 billion dollars in GDP as a result of 9/11. That’s roughly the size of the entire Iranian economy or half the Canadian economy.
As to Katrina, Congress poured $122 billion into the vast disaster area—and that was just in the 12 months immediately following the storm.
None of this was budgeted or foreseen, yet the U.S. economy dusted itself off and soldiered on.
While the declinists routinely remind us that the U.S. spends more on defense than the next 15 countries combined, they seldom note that the current defense budget accounts for barely four percent of GDP—a smaller percentage than the U.S. spent on defense at any time during the Cold War. In fact, defense outlays consumed as much as 10 percent of GDP in the 1950s, and 6 percent in the 1980s.
The diplomats who roam the corridors of the UN and the corporate chiefs who run the EU’s sprawling public-private conglomerates dare not say it aloud, but the American military does the dirty work to keep the global economy going—and growing. “The hidden hand of the market will never work without a hidden fist,” as Thomas Friedman observed in 1999.
“Globalization,” adds Robert Kaplan, “could not occur without American ships and sailors.”
Some argue that globalization is just another word for Americanization, and they may be right.
Dell and HP dominate the global PC market. More than 330 million PCs are running Microsoft software worldwide. Apple iTunes has displaced Sony’s music-downloading system—inside Japan. Google was created by a pair of Stanford grad students without any government help at all, yet it so dominates the Web that the EU is pouring some $290 million into birthing an answer.
Ferguson observes that half of the 30,000 McDonald’s restaurants are located somewhere other than the U.S., and that 70 percent of Coke’s thirsty drinkers reside outside North America. Starbucks has stores in 39 countries—from Austria to the United Arab Emirates to Australia.
WalMart has 2,700 stores outside the U.S., planting the low-price banner in 14 countries. “In the past year,” boasts the WalMart corporation, “the company became majority owner of Seiyu in Japan, completed its acquisition of Sonae in Brazil, and expanded into six new markets including Northern Ireland, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.” WalMart projects global sales of $344 billion in 2007, positioning the retail juggernaut just outside the top 30 in global rankings—for national GDPs.
The converse, even in this global economy, simply does not hold. Although Americans are notorious for appropriating from other cultures, they are not flocking to British retailers, or buying Afri Cola, or logging on to some Euro-Google, or purchasing French PCs.
But don’t take my word for it. As French president Nicolas Sarkozy matter-of-factly puts it, “The United States is the world’s leading economic, military and monetary power…Your economy is flourishing, your intellectual life is rich.”
Not bad for a nation in “steep decline.”
Alan Dowd is a contributing editor with The American Legion Magazine, a columnist with Frontpage Magazine and a contributor to Political Mavens.
Monday, December 31, 2007
Friday, December 28, 2007
HOW ABOUT SOME GOOD NEWS FROM AFRICA FOR A CHANGE
BusinessWeek
In Depth November 29, 2007, 11:47AM EST text size: TT
Can Greed Save Africa?
Fearless investing is succeeding where aid often hasn't
by Roben Farzad
It isn't easy for Masoud Alikhani to check on his investment. The Iranian-born Briton owns a facility in Mozambique that turns jatropha, a hardy, drought-resistant plant, into biodiesel. An October visit starts with an 11-hour flight from London, his home base, to Johannesburg. From there he jumps into a four-seat Piper Seneca II for a wobbly three-hour flight to Maputo, Mozambique's capital, during which one of the passengers, this writer, gets violently ill. On landing at Maputo's airport, where soldiers stand guard on the roof, Alikhani spends an hour wading through the bureaucratic muck of visa clearance and immunization checks. Then it's back on the plane for a 90-minute flight along the Indian Ocean coast to the province of Inhambane. At the 7-Eleven-size airport there, Alikhani is met by his brother and business partner, Said, for a 90-minute drive past wayward livestock and random brush fires to the village of Inhassune. At the end of a long dirt road, on a vast tract of reclaimed scrubland, sits the Alikhanis' massive biofuel complex. They try to visit every two months.
The brothers are among a growing cadre of intrepid investors looking for treasure in the 30-plus sub-Saharan African nations stretching from Mauritania and Somalia in the north to the continent's southern tip. There's no blueprint for this kind of investing: The best opportunities must be dreamed up and then created from scratch. The Alikhanis saw upside in a fallow cotton plantation. In Nigeria, U.S.-based private equity firm Emerging Capital Partners last year helped acquire an abandoned factory in hopes of supplying the continent with desperately needed fertilizer. South Africa-based microlender Blue Financial Services, energized by an investment from Wall Street last year, now has 171 branches in nine countries, with offices opening soon in Rwanda, Cameroon, Swaziland, and elsewhere. All told, at least $2.6 billion in private equity deals have been struck this year in the region (excluding more-developed South Africa), nearly seven times the 2005 figure.
This is the investing world's final frontier, so undeveloped and impoverished that it makes other extreme emerging markets like Colombia and Vietnam seem like marvels of modernity. Airports open and close arbitrarily. Roads are often unpaved and clogged. Gasoline and diesel are scarce, and rolling blackouts common. The medical precautions are even more forbidding: Traveling to mosquito-infested interiors requires a round of injections and weeks of antimalarial pills that often induce hallucinations.
In many ways, Africa's economic situation seems hopeless. While $625 billion in foreign aid has poured in since 1960, there has been no rise in the region's per capita gross domestic product, notes William R. Easterly, economics professor at New York University. What's more, from 1976 to 2000, Africa's share of global trade dropped to 1%, from an already negligible 3%. The U.N.'s scale of human development, which considers health, education, and economic well-being, ranks 34 African nations among the world's 40 lowest. Thus far, foreign aid hasn't made a dent.
Greed, however, might. Thanks to the global commodities boom of the past few years, sub-Saharan Africa's economies, after decades of stagnation, are expanding by an average of 6% annually—twice the U.S. pace. And like bees to honey, investors are swarming into the region in search of the enormous returns that ultra-early-stage investments can bring. Blue Financial, for example, has already netted its early private equity backers a ninefold gain thanks to the 385% rise in its stock since its October, 2006, initial public offering in Johannesburg. Emerging Capital Partners has bought all or part of 42 African companies this decade and cashed out of 18, with gains on their investments averaging 300%. "The money we can make is matchless," says Emerging Capital Partners CEO Thomas R. Gibian, a former Goldman Sachs (GS) banker.
The region's public stock markets are attracting foreign investors, too. Stocks in resource-rich nations such as Botswana, Nigeria, Zambia, and many others are rising to record highs. In recent months, investment bank UBS (UBS) and others have published thick reports on Africa's investing opportunities, hailing as a major virtue the fact that markets there don't move in tandem with those of the rest of the world.
Demand for African stocks is so robust, in fact, that it has created a bottleneck. Because these markets are tiny and illiquid—Zambia's total market value is just $2 billion—foreigners can't pile in all at once. Those who don't want to wait on the sidelines must find their own opportunities away from the stock exchanges. "The private equity skill set is really in demand here," says Gibian. His firm has invested more than $400 million in sub-Saharan Africa this year, vs. $325 million in the previous six years combined.
Of course, these investors may well be courting disaster. International monitors consistently place the region in the lowest tier of their rankings for business friendliness. Some governments, such as that of Zimbabwe President Robert Mugabe, expropriate assets outright, while others bleed businesses dry over time. If those problems don't do lasting damage to an investment portfolio, a commodities crash certainly would. A mass exodus of investors would snuff out Africa's flickering progress in a hurry—not only its GDP growth but also the burgeoning informal economy that isn't counted in official statistics: backyard and roadside businesses that have suddenly arisen to tap the continent's growing income.
Many African leaders have come to regard private investment as the only route to sustainable economic development. "Investors put their money down for what they will get as a profit," says John Agyekum Kufuor, Ghana's President, in his palace in the capital city of Accra: "It's business." Botswana President Festus Gontebanye Mogae even appealed directly to private equity and hedge fund managers during a September trip to New York. Over time, these leaders hope, the benefits accruing from private investment will give locals more of a vested interest in the permanence of historically volatile institutions—governments, currencies, banks—and put sub-Saharan Africa on a path to self-sufficiency. But for that to happen, the region must first prove that it can be hospitable to cold-eyed investors.
Masoud Alikhani is no moral crusader; he thinks the "We Are the World" movement of the 1980s, which sought donations to end African hunger, "made beggars of whole nations." The burly 66-year-old is among the new wave of investors at the tenuous nexus of venture capital and agribusiness in Africa. Five months ago he pitched a large hedge fund in New York on the merits of ESV Biofuels, as his company is called. The fund's partners agreed to take a tour of the facility in January. "We are capitalists and opportunists," says Alikhani. "We are doing this to make money. That's the only way to help."
Mozambique, one of the poorest and most neglected places in the world, seems frozen in time. After wresting independence from Portugal in 1975, the nation was ravaged by a civil war in which more than 1 million of its citizens were killed, maimed, or displaced. An uneasy peace arrived only in 1992. Since then the country has been on the tumultuous path to economic liberalization, alternating between double-digit growth and recession. More than three-quarters of its people remain desperately poor. Yet as Alikhani watches children pick through dumpsters outside Maputo's airport, he sees only upside. "Mozambique," he says, "is booming."
With a degree in agroeconomics, Alikhani seems most comfortable when ticking off facts about crop yields and other arcana. He earned his Wall Street bona fides during stints as a trader at Prudential and Lehman Brothers (LEH) in the 1980s. From 1993 to 1998, he was CEO of a steel, metals, energy, and agribusiness concern in emerging Russia. Today, in addition to his ESV duties, Alikhani holds board seats at three small, publicly listed commodities companies, including a diamond miner.
But ESV is a whole other bag of seeds. Last year, it bought a long-abandoned cotton plantation in a malaria-laden stretch of Mozambican bush, grabbing 27,000 acres with a lease for 198,000 more. It expects to plant nearly 17,000 acres, harvest its first jatropha seeds, and press its first batch of oil by this time next year. Assuming the Alikhanis and their two other partners succeed in wooing outside investors, ESV could break even by 2011—and sooner if biofuel prices keep rising.
Already, ESV has become the province's biggest private employer, with a staff of 620. Locals who hadn't earned money in years are making from $60 a month to as much as $2,000 for managers. "When we started, we told people it is a startup, a cash-eating animal," says Said Alikhani. "The faster we begin production, the sooner the benefits come to all."
Inhassune's revival is already under way. Mosquito control, power lines, and potable water have quickly arisen from a barren stretch of bush. "I'd be the last person in the history books to go down as a philanthropist," says Renier van Rooyen, ESV's South African on-site manager. "But you cannot run a business when your workers are out with malaria or sick from dirty water." On a warm weeknight, villagers greet the season's first rainfall with dancing and singing. "There was nothing here before," shouts Ineve, a fieldworker, over beating drums. Others proudly brandish newly issued government ID cards. ESV employees have been lining up behind the schoolhouse for hours to register to vote for the first time in their lives.
Women stand out as the most eager beneficiaries of the ESV experiment. Many walk as far as five miles each way to get to the plantation. (The Alikhanis say they plan to import bicycles from London.) Women are also disproportionately willing to budget the time and money to tend small patches of onions, maize, and papayas, which they sell at Inhassune's new 20-stall marketplace. In a nation haunted by AIDS, "women who work are not subordinate to the will of men with risky behaviors," says Pablo Smango, a public-health inspector in Beira, Mozambique's second largest city. "They control more of their own destiny."
PROMISE AND PERIL
The most obvious investing opportunity in Africa lies in its most pressing need: food. The continent supports one-seventh of the world's population and holds nearly a quarter of its land. But according to UBS, sub-Saharan Africa produces just $178 worth of goods per agricultural acre, compared with $457 in Latin America and $1,077 in Asia. A crippling fertilizer shortage is the main problem.
Emerging Capital Partners, the biggest U.S. private equity firm operating in Africa, sees opportunity there. Among its most daring investments is a $35 million stake in Notore Chemicals, a massive fertilizer project in the oil-producing Niger Delta, home to daily kidnappings and an ongoing armed rebellion. Government graft and neglect ran the 12-year-old plant aground in 1999; Emerging Capital bought its stake in the shuttered facility in 2006. "The government figured a dollar in its pocket was more valuable than the $10 it would make by fixing the conveyor belt," says Genevieve L. Sangudi, a 31-year-old Tanzanian-born, Columbia University-educated MBA who shuttles in from her home in Washington to oversee Emerging Capital's portfolio.
A trip to Notore's facilities in the heart of the Delta shows both the promise and the peril of investing there. The first leg of the journey is to Lagos, Nigeria's commercial capital of 15 million, as dysfunctional and chaotic a city as any on earth. Packed minibuses sit bumper to bumper on overburdened highways as beggars tap windows in search of charity. The landscape is dotted with barbed-wire fences and burning piles of trash. "If someone in Lagos sees a pothole," goes a local saying, "he doesn't ask why it isn't filled, or where to find the gravel to fill it. He wonders: Where can I buy tires big enough to ride over the pothole?'" It takes two hours to travel the 18 miles from the airport to the Protea Kuramo Waters hotel, a high-gated, diesel-generated fortress where, because of the chronic lodging shortage in the city, occupancy is reluctantly granted at $500 a night, a sum that doesn't guarantee a working toilet.
The next stop in Notore's private airplane is Port Harcourt, a bleak Delta city an hour away. The locals here have endured years of neglect at the hands of multinational oil companies and government officials easily bribed out of enforcing environmental regulations. Natural gas, a valuable by-product of oil drilling, is simply burned off in open flares, further darkening the Delta's wretched air. "The Delta is now Nigeria's biggest risk," says Bolaji Balogun, 40, founder and CEO of Lagos investment bank Chapel Hill Advisory Partners. "It needs its own Marshall Plan."
Emerging Capital and Notore want to redirect natural gas to a more beneficial use: nitrogen fertilizer, of which natural gas is the main ingredient. "You cannot let this humongous asset waste away while Nigeria flares gas and imports fertilizer," says Onajite P. Okoloko, Notore's 41-year-old chief executive. The Delta native shakes his head as he recalls his father and uncle blaming God instead of tired soil when their maize and fruit crops wouldn't grow for consecutive seasons. "Half of Nigeria's economy is agriculture," he says. And yet "70% of the country sits on arable but poorly used land. Do the math."
`AN AMAZING OPPORTUNITY'
On their arrival at Port Harcourt's tiny airport, Okoloko and Sangudi are greeted by a former U.S. Special Forces operative turned mercenary for Notore. He ferries the group into a double-armored SUV. At the airport's exit, a local armed guard jumps in. "Welcome," he says, clutching a machine gun. A flatbed pickup truck with five more armed guards leads the nervous procession.
The 1,380-acre Notore facility, rusting and overgrown with weeds, sits in a marsh surrounded by gas flares. The decrepitude belies Emerging Capital's tall plans for the plant: By next year, Notore will become the only nitrogen-based fertilizer producer in sub-Saharan Africa, going from zero output to 600,000 tons per year of high-grade urea pellets. Okoloko is looking to hire 1,000 locals. Having locked in a 20-year gas contract on favorable terms, Notore will produce its fertilizer at less than $100 a ton; the market price is $350 to $450. "It's stronger and cheaper than much of what you find in the West," says Sangudi. "An amazing opportunity." "We want to compete internationally," adds Okoloko. "But we have to take care of Nigeria and Africa first."
Sangudi will be moving from Washington to Lagos in a few months, another young financier flocking to the region. Bankers and buyout shops—from Renaissance Capital and Morgan Stanley (MS) to Deutsche Bank (DB) and JPMorgan Chase (JPM)—are piling in, trying to one-up each other by offering huge signing bonuses for local talent. "The capital coming in is blind," says one of Sangudi's friends, who works for a big private equity rival. "It needs my eyes." The influx is worsening an already dire housing shortage. Owners of decent apartments in Lagos now demand as much as three years' rent in advance. Sangudi notes with bemusement that leasing a two-bedroom unit could set her back as much as $80,000. "There is serious money to be made here," she says.
Agriculture isn't sub-Saharan Africa's only investment draw. Microlending—the making of small, unsecured loans to ordinary people—is bringing in big profits for a raft of publicly traded companies all across the continent. Blue Financial is among a new breed of so-called salary-microlenders, which make loans only to formally employed borrowers and take payments directly from their paychecks. The set-up helps Blue manage its risks: Bad loans are only in the 3%-to-4% range, remarkably low in a part of the world where fewer than one in five people has a bank account.
Unlike its peers, however, Blue has turned a relatively small Wall Street investment into rocket fuel. Early last year it secured $15 million from insurance giant American International Group (AIG). The deal gave AIG a 23% stake in Blue and two board seats—and gave Blue the imprimatur of a Wall Street titan. Blue expanded its operation from three nations to nine in a year. That burst set the stage for Blue's IPO last October—fresh capital that has spurred even faster growth.
Blue has also turned its equity into a critical component of its lending process. It uses the cachet of its AIG stake and surging stock price to coax cheap capital from development banks like International Finance Corp. and the Netherlands Development Finance Co. "Our equity investors give us leverage," says David van Niekerk, Blue's 34-year-old founder and CEO. "All of a sudden, knocking on doors has become a hell of a lot easier. You have to play that trump card." Blue keeps its cost of capital low—around 14.5%—and loans money in the 20% to 30% per year range, a fraction of local interest rates. Brisk demand for loans has sent its revenues jumping 140% this year as earnings per share have soared 400%.
On a chilly October morning, van Niekerk, tanned and dressed in a crisp peach-colored oxford shirt, looks more like a playboy than a financier. He's aboard the company's swank eight-seat jet for a trip to branches in Botswana and Zambia. The plane lands in Gaborone, a global diamond hub near the Kalahari Desert that's plastered with ads from local loan sharks. Thebo, an electrician, waits outside Blue's branch practicing his lines. He's in the market for a home-improvement loan, in a race against the soaring cost of cement. "I need this," he says. "I can't afford to stop buying petrol and food just to work on my house." Behind him is an ad for funeral insurance. Botswana is full of reminders of mortality; AIDS afflicts up to a third of its adult population. Van Niekerk goes into the back office to check on a row of salary-verification agents who typically approve applicants within an hour.
By lunchtime, the jet is off to Livingstone, Zambia, a tourist hub near the breathtaking Victoria Falls. In town, branch manager Calculus Siachono reports that Blue's business is brisk. He notes with pride that a local man is making a fortune building and selling oxcarts and is on his fourth loan.
Some complain that Blue's salary-based lending does nothing to help unemployed or informal workers. Critics also argue that Blue takes advantage of its borrowers by, essentially, mortgaging their future labor. "It's indentured servitude," says Wagane Diouf, a native Senegalese who runs AfriCap Investment, a private equity firm that invests in microfinance companies that don't use paycheck deduction. Van Niekerk counters that Blue has no recourse if a borrower loses his job, and that Blue's development-bank financing stipulates that its lending can't be abusive. "Why would we jeopardize that?" he asks. One financier says salary microlending is hastening economic evolution. "Pioneers in African banking collect high fees. But others will come in to compete, and eventually the banks will buy them all out—and everyone's borrowing costs fall."
That result won't come to pass, of course, if Africa's inexperienced borrowers turn out to be worse credit risks than microlenders anticipate. But the case of Mercy Mubanga, a 52-year-old grandmother, widow, and breadwinner for a family of eight, offers hope. She earns $185 a month as a police department secretary in the township of Maramba, in southern Zambia. Thanks to three loans from Blue—at progressively lower interest rates—she has tripled her income by moonlighting as a backyard poultry farmer, raising chickens to sell in the village market. After paying for a tin roof and hiring two men to expand her coop, Mubanga now seeks another loan to double her flock, school her two grandchildren, and perhaps build an extension on her tiny house. "We really must have more space," she says, rocking her 2-year-old granddaughter.
New York investment bank Nova Capital Partners helped make Mubanga's transformation possible. The seven-year-old boutique has found a profitable niche lining up financing for African companies. In early 2006, Blue hired Nova to find a Wall Street backer. Nova, aware that AIG's money managers were looking to expand its Africa portfolio, made the case for Blue—and scored the investment. That cash, in turn, made possible Mubanga's loans and many others. But Nova's bankers are unsentimental. "We're driven by what our investors want—returns," says Nova Senior Partner David S. Levin, ripping into a crab cake at New York's Palm West restaurant. "There's only so much time to do this before everyone else gets in."
BusinessWeek Senior Writer Farzad covers Wall Street and international finance
BusinessWeek
In Depth November 29, 2007, 11:47AM EST text size: TT
Can Greed Save Africa?
Fearless investing is succeeding where aid often hasn't
by Roben Farzad
It isn't easy for Masoud Alikhani to check on his investment. The Iranian-born Briton owns a facility in Mozambique that turns jatropha, a hardy, drought-resistant plant, into biodiesel. An October visit starts with an 11-hour flight from London, his home base, to Johannesburg. From there he jumps into a four-seat Piper Seneca II for a wobbly three-hour flight to Maputo, Mozambique's capital, during which one of the passengers, this writer, gets violently ill. On landing at Maputo's airport, where soldiers stand guard on the roof, Alikhani spends an hour wading through the bureaucratic muck of visa clearance and immunization checks. Then it's back on the plane for a 90-minute flight along the Indian Ocean coast to the province of Inhambane. At the 7-Eleven-size airport there, Alikhani is met by his brother and business partner, Said, for a 90-minute drive past wayward livestock and random brush fires to the village of Inhassune. At the end of a long dirt road, on a vast tract of reclaimed scrubland, sits the Alikhanis' massive biofuel complex. They try to visit every two months.
The brothers are among a growing cadre of intrepid investors looking for treasure in the 30-plus sub-Saharan African nations stretching from Mauritania and Somalia in the north to the continent's southern tip. There's no blueprint for this kind of investing: The best opportunities must be dreamed up and then created from scratch. The Alikhanis saw upside in a fallow cotton plantation. In Nigeria, U.S.-based private equity firm Emerging Capital Partners last year helped acquire an abandoned factory in hopes of supplying the continent with desperately needed fertilizer. South Africa-based microlender Blue Financial Services, energized by an investment from Wall Street last year, now has 171 branches in nine countries, with offices opening soon in Rwanda, Cameroon, Swaziland, and elsewhere. All told, at least $2.6 billion in private equity deals have been struck this year in the region (excluding more-developed South Africa), nearly seven times the 2005 figure.
This is the investing world's final frontier, so undeveloped and impoverished that it makes other extreme emerging markets like Colombia and Vietnam seem like marvels of modernity. Airports open and close arbitrarily. Roads are often unpaved and clogged. Gasoline and diesel are scarce, and rolling blackouts common. The medical precautions are even more forbidding: Traveling to mosquito-infested interiors requires a round of injections and weeks of antimalarial pills that often induce hallucinations.
In many ways, Africa's economic situation seems hopeless. While $625 billion in foreign aid has poured in since 1960, there has been no rise in the region's per capita gross domestic product, notes William R. Easterly, economics professor at New York University. What's more, from 1976 to 2000, Africa's share of global trade dropped to 1%, from an already negligible 3%. The U.N.'s scale of human development, which considers health, education, and economic well-being, ranks 34 African nations among the world's 40 lowest. Thus far, foreign aid hasn't made a dent.
Greed, however, might. Thanks to the global commodities boom of the past few years, sub-Saharan Africa's economies, after decades of stagnation, are expanding by an average of 6% annually—twice the U.S. pace. And like bees to honey, investors are swarming into the region in search of the enormous returns that ultra-early-stage investments can bring. Blue Financial, for example, has already netted its early private equity backers a ninefold gain thanks to the 385% rise in its stock since its October, 2006, initial public offering in Johannesburg. Emerging Capital Partners has bought all or part of 42 African companies this decade and cashed out of 18, with gains on their investments averaging 300%. "The money we can make is matchless," says Emerging Capital Partners CEO Thomas R. Gibian, a former Goldman Sachs (GS) banker.
The region's public stock markets are attracting foreign investors, too. Stocks in resource-rich nations such as Botswana, Nigeria, Zambia, and many others are rising to record highs. In recent months, investment bank UBS (UBS) and others have published thick reports on Africa's investing opportunities, hailing as a major virtue the fact that markets there don't move in tandem with those of the rest of the world.
Demand for African stocks is so robust, in fact, that it has created a bottleneck. Because these markets are tiny and illiquid—Zambia's total market value is just $2 billion—foreigners can't pile in all at once. Those who don't want to wait on the sidelines must find their own opportunities away from the stock exchanges. "The private equity skill set is really in demand here," says Gibian. His firm has invested more than $400 million in sub-Saharan Africa this year, vs. $325 million in the previous six years combined.
Of course, these investors may well be courting disaster. International monitors consistently place the region in the lowest tier of their rankings for business friendliness. Some governments, such as that of Zimbabwe President Robert Mugabe, expropriate assets outright, while others bleed businesses dry over time. If those problems don't do lasting damage to an investment portfolio, a commodities crash certainly would. A mass exodus of investors would snuff out Africa's flickering progress in a hurry—not only its GDP growth but also the burgeoning informal economy that isn't counted in official statistics: backyard and roadside businesses that have suddenly arisen to tap the continent's growing income.
Many African leaders have come to regard private investment as the only route to sustainable economic development. "Investors put their money down for what they will get as a profit," says John Agyekum Kufuor, Ghana's President, in his palace in the capital city of Accra: "It's business." Botswana President Festus Gontebanye Mogae even appealed directly to private equity and hedge fund managers during a September trip to New York. Over time, these leaders hope, the benefits accruing from private investment will give locals more of a vested interest in the permanence of historically volatile institutions—governments, currencies, banks—and put sub-Saharan Africa on a path to self-sufficiency. But for that to happen, the region must first prove that it can be hospitable to cold-eyed investors.
Masoud Alikhani is no moral crusader; he thinks the "We Are the World" movement of the 1980s, which sought donations to end African hunger, "made beggars of whole nations." The burly 66-year-old is among the new wave of investors at the tenuous nexus of venture capital and agribusiness in Africa. Five months ago he pitched a large hedge fund in New York on the merits of ESV Biofuels, as his company is called. The fund's partners agreed to take a tour of the facility in January. "We are capitalists and opportunists," says Alikhani. "We are doing this to make money. That's the only way to help."
Mozambique, one of the poorest and most neglected places in the world, seems frozen in time. After wresting independence from Portugal in 1975, the nation was ravaged by a civil war in which more than 1 million of its citizens were killed, maimed, or displaced. An uneasy peace arrived only in 1992. Since then the country has been on the tumultuous path to economic liberalization, alternating between double-digit growth and recession. More than three-quarters of its people remain desperately poor. Yet as Alikhani watches children pick through dumpsters outside Maputo's airport, he sees only upside. "Mozambique," he says, "is booming."
With a degree in agroeconomics, Alikhani seems most comfortable when ticking off facts about crop yields and other arcana. He earned his Wall Street bona fides during stints as a trader at Prudential and Lehman Brothers (LEH) in the 1980s. From 1993 to 1998, he was CEO of a steel, metals, energy, and agribusiness concern in emerging Russia. Today, in addition to his ESV duties, Alikhani holds board seats at three small, publicly listed commodities companies, including a diamond miner.
But ESV is a whole other bag of seeds. Last year, it bought a long-abandoned cotton plantation in a malaria-laden stretch of Mozambican bush, grabbing 27,000 acres with a lease for 198,000 more. It expects to plant nearly 17,000 acres, harvest its first jatropha seeds, and press its first batch of oil by this time next year. Assuming the Alikhanis and their two other partners succeed in wooing outside investors, ESV could break even by 2011—and sooner if biofuel prices keep rising.
Already, ESV has become the province's biggest private employer, with a staff of 620. Locals who hadn't earned money in years are making from $60 a month to as much as $2,000 for managers. "When we started, we told people it is a startup, a cash-eating animal," says Said Alikhani. "The faster we begin production, the sooner the benefits come to all."
Inhassune's revival is already under way. Mosquito control, power lines, and potable water have quickly arisen from a barren stretch of bush. "I'd be the last person in the history books to go down as a philanthropist," says Renier van Rooyen, ESV's South African on-site manager. "But you cannot run a business when your workers are out with malaria or sick from dirty water." On a warm weeknight, villagers greet the season's first rainfall with dancing and singing. "There was nothing here before," shouts Ineve, a fieldworker, over beating drums. Others proudly brandish newly issued government ID cards. ESV employees have been lining up behind the schoolhouse for hours to register to vote for the first time in their lives.
Women stand out as the most eager beneficiaries of the ESV experiment. Many walk as far as five miles each way to get to the plantation. (The Alikhanis say they plan to import bicycles from London.) Women are also disproportionately willing to budget the time and money to tend small patches of onions, maize, and papayas, which they sell at Inhassune's new 20-stall marketplace. In a nation haunted by AIDS, "women who work are not subordinate to the will of men with risky behaviors," says Pablo Smango, a public-health inspector in Beira, Mozambique's second largest city. "They control more of their own destiny."
PROMISE AND PERIL
The most obvious investing opportunity in Africa lies in its most pressing need: food. The continent supports one-seventh of the world's population and holds nearly a quarter of its land. But according to UBS, sub-Saharan Africa produces just $178 worth of goods per agricultural acre, compared with $457 in Latin America and $1,077 in Asia. A crippling fertilizer shortage is the main problem.
Emerging Capital Partners, the biggest U.S. private equity firm operating in Africa, sees opportunity there. Among its most daring investments is a $35 million stake in Notore Chemicals, a massive fertilizer project in the oil-producing Niger Delta, home to daily kidnappings and an ongoing armed rebellion. Government graft and neglect ran the 12-year-old plant aground in 1999; Emerging Capital bought its stake in the shuttered facility in 2006. "The government figured a dollar in its pocket was more valuable than the $10 it would make by fixing the conveyor belt," says Genevieve L. Sangudi, a 31-year-old Tanzanian-born, Columbia University-educated MBA who shuttles in from her home in Washington to oversee Emerging Capital's portfolio.
A trip to Notore's facilities in the heart of the Delta shows both the promise and the peril of investing there. The first leg of the journey is to Lagos, Nigeria's commercial capital of 15 million, as dysfunctional and chaotic a city as any on earth. Packed minibuses sit bumper to bumper on overburdened highways as beggars tap windows in search of charity. The landscape is dotted with barbed-wire fences and burning piles of trash. "If someone in Lagos sees a pothole," goes a local saying, "he doesn't ask why it isn't filled, or where to find the gravel to fill it. He wonders: Where can I buy tires big enough to ride over the pothole?'" It takes two hours to travel the 18 miles from the airport to the Protea Kuramo Waters hotel, a high-gated, diesel-generated fortress where, because of the chronic lodging shortage in the city, occupancy is reluctantly granted at $500 a night, a sum that doesn't guarantee a working toilet.
The next stop in Notore's private airplane is Port Harcourt, a bleak Delta city an hour away. The locals here have endured years of neglect at the hands of multinational oil companies and government officials easily bribed out of enforcing environmental regulations. Natural gas, a valuable by-product of oil drilling, is simply burned off in open flares, further darkening the Delta's wretched air. "The Delta is now Nigeria's biggest risk," says Bolaji Balogun, 40, founder and CEO of Lagos investment bank Chapel Hill Advisory Partners. "It needs its own Marshall Plan."
Emerging Capital and Notore want to redirect natural gas to a more beneficial use: nitrogen fertilizer, of which natural gas is the main ingredient. "You cannot let this humongous asset waste away while Nigeria flares gas and imports fertilizer," says Onajite P. Okoloko, Notore's 41-year-old chief executive. The Delta native shakes his head as he recalls his father and uncle blaming God instead of tired soil when their maize and fruit crops wouldn't grow for consecutive seasons. "Half of Nigeria's economy is agriculture," he says. And yet "70% of the country sits on arable but poorly used land. Do the math."
`AN AMAZING OPPORTUNITY'
On their arrival at Port Harcourt's tiny airport, Okoloko and Sangudi are greeted by a former U.S. Special Forces operative turned mercenary for Notore. He ferries the group into a double-armored SUV. At the airport's exit, a local armed guard jumps in. "Welcome," he says, clutching a machine gun. A flatbed pickup truck with five more armed guards leads the nervous procession.
The 1,380-acre Notore facility, rusting and overgrown with weeds, sits in a marsh surrounded by gas flares. The decrepitude belies Emerging Capital's tall plans for the plant: By next year, Notore will become the only nitrogen-based fertilizer producer in sub-Saharan Africa, going from zero output to 600,000 tons per year of high-grade urea pellets. Okoloko is looking to hire 1,000 locals. Having locked in a 20-year gas contract on favorable terms, Notore will produce its fertilizer at less than $100 a ton; the market price is $350 to $450. "It's stronger and cheaper than much of what you find in the West," says Sangudi. "An amazing opportunity." "We want to compete internationally," adds Okoloko. "But we have to take care of Nigeria and Africa first."
Sangudi will be moving from Washington to Lagos in a few months, another young financier flocking to the region. Bankers and buyout shops—from Renaissance Capital and Morgan Stanley (MS) to Deutsche Bank (DB) and JPMorgan Chase (JPM)—are piling in, trying to one-up each other by offering huge signing bonuses for local talent. "The capital coming in is blind," says one of Sangudi's friends, who works for a big private equity rival. "It needs my eyes." The influx is worsening an already dire housing shortage. Owners of decent apartments in Lagos now demand as much as three years' rent in advance. Sangudi notes with bemusement that leasing a two-bedroom unit could set her back as much as $80,000. "There is serious money to be made here," she says.
Agriculture isn't sub-Saharan Africa's only investment draw. Microlending—the making of small, unsecured loans to ordinary people—is bringing in big profits for a raft of publicly traded companies all across the continent. Blue Financial is among a new breed of so-called salary-microlenders, which make loans only to formally employed borrowers and take payments directly from their paychecks. The set-up helps Blue manage its risks: Bad loans are only in the 3%-to-4% range, remarkably low in a part of the world where fewer than one in five people has a bank account.
Unlike its peers, however, Blue has turned a relatively small Wall Street investment into rocket fuel. Early last year it secured $15 million from insurance giant American International Group (AIG). The deal gave AIG a 23% stake in Blue and two board seats—and gave Blue the imprimatur of a Wall Street titan. Blue expanded its operation from three nations to nine in a year. That burst set the stage for Blue's IPO last October—fresh capital that has spurred even faster growth.
Blue has also turned its equity into a critical component of its lending process. It uses the cachet of its AIG stake and surging stock price to coax cheap capital from development banks like International Finance Corp. and the Netherlands Development Finance Co. "Our equity investors give us leverage," says David van Niekerk, Blue's 34-year-old founder and CEO. "All of a sudden, knocking on doors has become a hell of a lot easier. You have to play that trump card." Blue keeps its cost of capital low—around 14.5%—and loans money in the 20% to 30% per year range, a fraction of local interest rates. Brisk demand for loans has sent its revenues jumping 140% this year as earnings per share have soared 400%.
On a chilly October morning, van Niekerk, tanned and dressed in a crisp peach-colored oxford shirt, looks more like a playboy than a financier. He's aboard the company's swank eight-seat jet for a trip to branches in Botswana and Zambia. The plane lands in Gaborone, a global diamond hub near the Kalahari Desert that's plastered with ads from local loan sharks. Thebo, an electrician, waits outside Blue's branch practicing his lines. He's in the market for a home-improvement loan, in a race against the soaring cost of cement. "I need this," he says. "I can't afford to stop buying petrol and food just to work on my house." Behind him is an ad for funeral insurance. Botswana is full of reminders of mortality; AIDS afflicts up to a third of its adult population. Van Niekerk goes into the back office to check on a row of salary-verification agents who typically approve applicants within an hour.
By lunchtime, the jet is off to Livingstone, Zambia, a tourist hub near the breathtaking Victoria Falls. In town, branch manager Calculus Siachono reports that Blue's business is brisk. He notes with pride that a local man is making a fortune building and selling oxcarts and is on his fourth loan.
Some complain that Blue's salary-based lending does nothing to help unemployed or informal workers. Critics also argue that Blue takes advantage of its borrowers by, essentially, mortgaging their future labor. "It's indentured servitude," says Wagane Diouf, a native Senegalese who runs AfriCap Investment, a private equity firm that invests in microfinance companies that don't use paycheck deduction. Van Niekerk counters that Blue has no recourse if a borrower loses his job, and that Blue's development-bank financing stipulates that its lending can't be abusive. "Why would we jeopardize that?" he asks. One financier says salary microlending is hastening economic evolution. "Pioneers in African banking collect high fees. But others will come in to compete, and eventually the banks will buy them all out—and everyone's borrowing costs fall."
That result won't come to pass, of course, if Africa's inexperienced borrowers turn out to be worse credit risks than microlenders anticipate. But the case of Mercy Mubanga, a 52-year-old grandmother, widow, and breadwinner for a family of eight, offers hope. She earns $185 a month as a police department secretary in the township of Maramba, in southern Zambia. Thanks to three loans from Blue—at progressively lower interest rates—she has tripled her income by moonlighting as a backyard poultry farmer, raising chickens to sell in the village market. After paying for a tin roof and hiring two men to expand her coop, Mubanga now seeks another loan to double her flock, school her two grandchildren, and perhaps build an extension on her tiny house. "We really must have more space," she says, rocking her 2-year-old granddaughter.
New York investment bank Nova Capital Partners helped make Mubanga's transformation possible. The seven-year-old boutique has found a profitable niche lining up financing for African companies. In early 2006, Blue hired Nova to find a Wall Street backer. Nova, aware that AIG's money managers were looking to expand its Africa portfolio, made the case for Blue—and scored the investment. That cash, in turn, made possible Mubanga's loans and many others. But Nova's bankers are unsentimental. "We're driven by what our investors want—returns," says Nova Senior Partner David S. Levin, ripping into a crab cake at New York's Palm West restaurant. "There's only so much time to do this before everyone else gets in."
BusinessWeek Senior Writer Farzad covers Wall Street and international finance
Wednesday, December 12, 2007
http://www.gmu.edu/departments/economics/wew/misc/econcitizen/index.html
Economics for the Citizen
A Ten Part Series on Basic Economics Concepts
Economics for the Citizen - Part I Summary: During fall semesters, I typically teach our first-year Ph.D. microeconomics theory course. Out of a love for teaching, I've decided to not completely take off but deliver a few lectures on basic economic principles to my readership. We'll name the series "Economics for the Citizen."
Economics for the Citizen - Part II Summary: At the end of the previous article, you were left with this question: Which is the best method of resolving conflict over what's produced, how and when it's produced, and who's going to get it? Among the methods for doing so were the market mechanism, government fiat, gifts or violence. The answer is that economic theory can't answer normative questions.
Economics for the Citizen - Part III Summary: There are four classes of behavior that can be called economic behavior. They are: production, consumption, exchange and specialization. The discussion of specialization will be left to the next article.
Economics for the Citizen - Part IV Summary: In the last lecture, we discussed three of four kinds of behavior that can be called economic behavior: production, consumption and exchange. We'll turn our attention to the fourth -- specialization.
Economics for the Citizen - Part V Summary: Someone might have made you a gift of this newspaper. Does that mean reading this article is free? The answer is a big fat no. If you weren't reading the article, you might have watched television, talked to your wife or worked on your homework. The cost of having or doing something is what had to be sacrificed. While reading this article might have a zero price, it most assuredly doesn't have a zero cost.
Economics for the Citizen - Part VI Summary: My last article introduced the law of demand, which states, holding everything else constant, that the lower the price of something, the more people will take of it, and the higher the price, less will be taken. But there's a bit of complexity we must add. It's crucial to recognize that it's relative prices that determine choices, not absolute prices.
Economics for the Citizen - Part VII Summary: There's a reggae song that advises "If you want to be happy for the rest of your life, never make a pretty woman your wife." Mechanics have been accused of charging women higher prices for emergency road repairs. Airlines charge business travelers higher prices than tourists. Car rental companies and hotels often charge cheaper rates on weekends. Transportation companies often give senior citizen and student discounts. Prostitutes charge servicemen higher prices than their indigenous clientele. Gasoline stations on interstate highways charge higher prices than those off the interstate. What are we to make of all of this discrimination? Should somebody notify the U.S. attorney general?
Economics for the Citizen - Part VIII Economic theory is broadly applicable. However, a society's property-rights structure influences how the theory will manifest itself. It's the same with the theory of gravity. While it, too, is broadly applicable, attaching a parachute to a falling object affects how the law of gravity manifests itself. The parachute doesn't nullify the law of gravity. Likewise, the property-rights structure doesn't nullify the laws of demand and supply.
Economics for the Citizen - Part IX Summary: We're all grossly ignorant about most things that we use and encounter in our daily lives, but each of us is knowledgeable about tiny, relatively inconsequential things.
Economics for the Citizen - Part X Summary: In 10 short articles, there's no way to even scratch the surface of economic knowledge. I'll simply end the series with a discussion of a few popular sentiments that have high emotional worth but make little economic sense. I use some of these sentiments as a teaching device in my undergraduate classes.
Return to Main Page
Economics for the Citizen
A Ten Part Series on Basic Economics Concepts
Economics for the Citizen - Part I Summary: During fall semesters, I typically teach our first-year Ph.D. microeconomics theory course. Out of a love for teaching, I've decided to not completely take off but deliver a few lectures on basic economic principles to my readership. We'll name the series "Economics for the Citizen."
Economics for the Citizen - Part II Summary: At the end of the previous article, you were left with this question: Which is the best method of resolving conflict over what's produced, how and when it's produced, and who's going to get it? Among the methods for doing so were the market mechanism, government fiat, gifts or violence. The answer is that economic theory can't answer normative questions.
Economics for the Citizen - Part III Summary: There are four classes of behavior that can be called economic behavior. They are: production, consumption, exchange and specialization. The discussion of specialization will be left to the next article.
Economics for the Citizen - Part IV Summary: In the last lecture, we discussed three of four kinds of behavior that can be called economic behavior: production, consumption and exchange. We'll turn our attention to the fourth -- specialization.
Economics for the Citizen - Part V Summary: Someone might have made you a gift of this newspaper. Does that mean reading this article is free? The answer is a big fat no. If you weren't reading the article, you might have watched television, talked to your wife or worked on your homework. The cost of having or doing something is what had to be sacrificed. While reading this article might have a zero price, it most assuredly doesn't have a zero cost.
Economics for the Citizen - Part VI Summary: My last article introduced the law of demand, which states, holding everything else constant, that the lower the price of something, the more people will take of it, and the higher the price, less will be taken. But there's a bit of complexity we must add. It's crucial to recognize that it's relative prices that determine choices, not absolute prices.
Economics for the Citizen - Part VII Summary: There's a reggae song that advises "If you want to be happy for the rest of your life, never make a pretty woman your wife." Mechanics have been accused of charging women higher prices for emergency road repairs. Airlines charge business travelers higher prices than tourists. Car rental companies and hotels often charge cheaper rates on weekends. Transportation companies often give senior citizen and student discounts. Prostitutes charge servicemen higher prices than their indigenous clientele. Gasoline stations on interstate highways charge higher prices than those off the interstate. What are we to make of all of this discrimination? Should somebody notify the U.S. attorney general?
Economics for the Citizen - Part VIII Economic theory is broadly applicable. However, a society's property-rights structure influences how the theory will manifest itself. It's the same with the theory of gravity. While it, too, is broadly applicable, attaching a parachute to a falling object affects how the law of gravity manifests itself. The parachute doesn't nullify the law of gravity. Likewise, the property-rights structure doesn't nullify the laws of demand and supply.
Economics for the Citizen - Part IX Summary: We're all grossly ignorant about most things that we use and encounter in our daily lives, but each of us is knowledgeable about tiny, relatively inconsequential things.
Economics for the Citizen - Part X Summary: In 10 short articles, there's no way to even scratch the surface of economic knowledge. I'll simply end the series with a discussion of a few popular sentiments that have high emotional worth but make little economic sense. I use some of these sentiments as a teaching device in my undergraduate classes.
Return to Main Page
Monday, December 10, 2007
How To Be A Good Democrat (what you have to believe)
vanity | 12/10/2007 | self and others
Posted on 12/10/2007 8:13:17 AM PST by hripka
How To Be A Good Democrat (what you have to believe)
1. You have to be against capital punishment on the guilty, but support abortion on demand on the innocent.
2. You have to believe that businesses create oppression and governments create prosperity.
3. You have to believe that guns in the hands of law-abiding Americans are more of a threat than U.S. nuclear weapons technology in the hands of Chinese and North Korean communists.
4. You have to believe that there was no art before Federal funding.
5. You have to believe that global temperatures are less affected by documented cyclical changes in the earth's climate and more affected by soccer moms driving SUV's.
6. You have to believe that hurting a dog is front page news, but five people killed in your city over a weekend isn't.
7. You have to believe that the violence in Israel, Chechnya, Iraq, Kashmir, Algeria, Sudan, Pakistan, Indonesia and Afghanistan is not caused by Muslims.
8. You have to believe that gender roles are artificial, but being homosexual is natural.
9. You have to believe that the AIDS virus is spread by a lack of federal funding.
10. You have to believe that some teacher who can't teach fourth graders how to read is somehow qualified to teach those same kids about sex.
11. You have to believe that the people in the US Senate and the US House of Representatives are representative of America.
12. You have to believe that some cold medicines require a prescription, but teenagers can get a morning-after pill without a prescription.
13. You have to believe that global warming is caused by human activity, but that somehow *MILE*-thick glaciers over Wisconsin disappeared on their own 10,000 years ago.
14. You have to believe that hunters who cull overpopulated herds don't care about nature, but loony activists who have never been outside of a coffee shop do.
15. You have to believe that there is free expression on college campuses.
16. You have to believe that self-esteem is more important than actually doing something to earn it.
17. You have to believe that Hollywood doesn't actively promote filth, even though R-rated movies earn on average less than G and PG rated ones.
18. You have to believe that the same government responsible for $500 toilet seats and the DMV will do a better job with your healthcare.
19. You have to believe the NRA is bad because it supports certain parts of the Constitution, while the ACLU is good because it supports certain parts of the Constitution.
20. You have to believe that taxes are too low, and should be raised by a TRILLION dollars in 2009, but ATM fees are too high.
21. You have to believe that the free enterprise system is evil, but an unaudited Federal Reserve setting interest rates in a free market is OK.
22. You have to believe that Margaret Sanger, Gloria Steinem and Cesar Chavez are more important to American history than George Washington, Thomas Jefferson, Thomas Edison, and Alexander Graham Bell.
23. You have to believe that Native Americans were peaceful before 1492.
24. You have to believe that standardized tests are racist, but racial quotas, affirmative action and racial set-asides are not.
25. You have to believe that Hillary Clinton is normal and is a very nice person.
26. You have to believe that the only reason socialism hasn't worked anywhere it's been tried is because the right people haven't been in charge.
27. You have to believe that Jimmy Carter was a great president.
28. You have to believe conservatives telling the truth belong in jail, but a liar and a sex offender belonged in the White House.
29. You have to believe that there is such a thing as a Social Security "lockbox" and that all of your Social Security tax payments are waiting in an account somewhere for you.
30. You have to believe that homosexual parades displaying drag, transvestites, and bestiality are OK and should be constitutionally protected (and sponsorship by Miller Beer is OK too), but manger scenes at Christmas should be illegal.
31. You have to believe that illegal Democrat Party funding by the Chinese Government is somehow in the best interest of the United States.
32. You have to believe that illegal immigrants do not depress wages in the US.
33. You have to believe that you can "support the troops" but not for what those troops volunteered and are fighting for.
34. You have to believe that children under 18 have more rights than their own parents.
35. You have to believe that someone in Washington (or your state capitol) knows better about your life than you do.
36. You have to believe that Afro-Americans, or Jews, or women, or Hispanics, or union workers, or gays can't possibly be conservative.
37. You have to believe that everyone thinks the way you do, (that's the way the smart people think, right?) and to be shocked and appalled when someone has a different opinion.
38. You have to believe that it's okay to give government workers the day off on Christmas Day, but it's not okay to say "Merry Christmas."
39. You have to believe that Al Gore's *movie* deserves a PEACE prize.
40. You have to believe Al Gore's movie.
41. You have to believe that when a Republican is in the White House, homelessness is increasing, the world hates us and the economy sucks, while when a Democrat is in the White House homelessness has been eliminated, the world loves us and the economy rocks.
42. You have to believe that our Army can't stop illegal aliens crossing our national border, but that our Army should be sent to feed hungry people in different parts of the world.
43. You have to believe that low approval ratings matter when Bush has them, but now that the Democrats have taken over Congress, and have even LOWER approval ratings, approval ratings somehow don't matter any more.
44. You have to believe that Christianity is evil and that Islam is a "religion of peace".
45. You have to believe that a fence on the border is bad, but a fence around the White House works.
46. You have to believe that Castro, Che Guevera and Yassir Arafat were all nice men.
47. You have to believe that a Republican talking about his faith is divisive, but a Democrat talking about his faith is sincere.
48. You have to believe that Hillary, Obama, Edwards, Pelosi and Reid are the best that your party can offer.
49. You have to believe that women in the USA are oppressed, but women in Saudi Arabia are free.
50. You have to believe that term limits are bad, and that the longer you are in government the more you understand those outside of it.
51. You have to believe that tenure is OK, but merit pay for teachers isn't.
52. You have to believe that if Hillary is elected, Bill will be kept under control.
53. You have to believe there is no such thing as vote fraud, but if it is happening, Republicans are doing it.
54. You have to believe that the people in church on a Sunday morning are what's wrong with America.
55. You have to believe that a government official saying, "I'm from the government, and I'm here to help you," is telling you the truth.
56. You have to believe that a sign in the United States that is in English is discriminatory.
57. You have to believe that all nations and cultures are equal and good, except the US, which isn't.
58. You have to believe that any new problem can be solved with a new government program, and any unsolved problems that still exist have had their budget cut by those evil Republicans.
59. You have to believe that Canada does it better, its just a shame that they are colder.
60. You have to believe that this message is a part of a vast, right wing conspiracy, but Democratic talking points don't originate from Moveon.org.
That is a lot to swallow
vanity | 12/10/2007 | self and others
Posted on 12/10/2007 8:13:17 AM PST by hripka
How To Be A Good Democrat (what you have to believe)
1. You have to be against capital punishment on the guilty, but support abortion on demand on the innocent.
2. You have to believe that businesses create oppression and governments create prosperity.
3. You have to believe that guns in the hands of law-abiding Americans are more of a threat than U.S. nuclear weapons technology in the hands of Chinese and North Korean communists.
4. You have to believe that there was no art before Federal funding.
5. You have to believe that global temperatures are less affected by documented cyclical changes in the earth's climate and more affected by soccer moms driving SUV's.
6. You have to believe that hurting a dog is front page news, but five people killed in your city over a weekend isn't.
7. You have to believe that the violence in Israel, Chechnya, Iraq, Kashmir, Algeria, Sudan, Pakistan, Indonesia and Afghanistan is not caused by Muslims.
8. You have to believe that gender roles are artificial, but being homosexual is natural.
9. You have to believe that the AIDS virus is spread by a lack of federal funding.
10. You have to believe that some teacher who can't teach fourth graders how to read is somehow qualified to teach those same kids about sex.
11. You have to believe that the people in the US Senate and the US House of Representatives are representative of America.
12. You have to believe that some cold medicines require a prescription, but teenagers can get a morning-after pill without a prescription.
13. You have to believe that global warming is caused by human activity, but that somehow *MILE*-thick glaciers over Wisconsin disappeared on their own 10,000 years ago.
14. You have to believe that hunters who cull overpopulated herds don't care about nature, but loony activists who have never been outside of a coffee shop do.
15. You have to believe that there is free expression on college campuses.
16. You have to believe that self-esteem is more important than actually doing something to earn it.
17. You have to believe that Hollywood doesn't actively promote filth, even though R-rated movies earn on average less than G and PG rated ones.
18. You have to believe that the same government responsible for $500 toilet seats and the DMV will do a better job with your healthcare.
19. You have to believe the NRA is bad because it supports certain parts of the Constitution, while the ACLU is good because it supports certain parts of the Constitution.
20. You have to believe that taxes are too low, and should be raised by a TRILLION dollars in 2009, but ATM fees are too high.
21. You have to believe that the free enterprise system is evil, but an unaudited Federal Reserve setting interest rates in a free market is OK.
22. You have to believe that Margaret Sanger, Gloria Steinem and Cesar Chavez are more important to American history than George Washington, Thomas Jefferson, Thomas Edison, and Alexander Graham Bell.
23. You have to believe that Native Americans were peaceful before 1492.
24. You have to believe that standardized tests are racist, but racial quotas, affirmative action and racial set-asides are not.
25. You have to believe that Hillary Clinton is normal and is a very nice person.
26. You have to believe that the only reason socialism hasn't worked anywhere it's been tried is because the right people haven't been in charge.
27. You have to believe that Jimmy Carter was a great president.
28. You have to believe conservatives telling the truth belong in jail, but a liar and a sex offender belonged in the White House.
29. You have to believe that there is such a thing as a Social Security "lockbox" and that all of your Social Security tax payments are waiting in an account somewhere for you.
30. You have to believe that homosexual parades displaying drag, transvestites, and bestiality are OK and should be constitutionally protected (and sponsorship by Miller Beer is OK too), but manger scenes at Christmas should be illegal.
31. You have to believe that illegal Democrat Party funding by the Chinese Government is somehow in the best interest of the United States.
32. You have to believe that illegal immigrants do not depress wages in the US.
33. You have to believe that you can "support the troops" but not for what those troops volunteered and are fighting for.
34. You have to believe that children under 18 have more rights than their own parents.
35. You have to believe that someone in Washington (or your state capitol) knows better about your life than you do.
36. You have to believe that Afro-Americans, or Jews, or women, or Hispanics, or union workers, or gays can't possibly be conservative.
37. You have to believe that everyone thinks the way you do, (that's the way the smart people think, right?) and to be shocked and appalled when someone has a different opinion.
38. You have to believe that it's okay to give government workers the day off on Christmas Day, but it's not okay to say "Merry Christmas."
39. You have to believe that Al Gore's *movie* deserves a PEACE prize.
40. You have to believe Al Gore's movie.
41. You have to believe that when a Republican is in the White House, homelessness is increasing, the world hates us and the economy sucks, while when a Democrat is in the White House homelessness has been eliminated, the world loves us and the economy rocks.
42. You have to believe that our Army can't stop illegal aliens crossing our national border, but that our Army should be sent to feed hungry people in different parts of the world.
43. You have to believe that low approval ratings matter when Bush has them, but now that the Democrats have taken over Congress, and have even LOWER approval ratings, approval ratings somehow don't matter any more.
44. You have to believe that Christianity is evil and that Islam is a "religion of peace".
45. You have to believe that a fence on the border is bad, but a fence around the White House works.
46. You have to believe that Castro, Che Guevera and Yassir Arafat were all nice men.
47. You have to believe that a Republican talking about his faith is divisive, but a Democrat talking about his faith is sincere.
48. You have to believe that Hillary, Obama, Edwards, Pelosi and Reid are the best that your party can offer.
49. You have to believe that women in the USA are oppressed, but women in Saudi Arabia are free.
50. You have to believe that term limits are bad, and that the longer you are in government the more you understand those outside of it.
51. You have to believe that tenure is OK, but merit pay for teachers isn't.
52. You have to believe that if Hillary is elected, Bill will be kept under control.
53. You have to believe there is no such thing as vote fraud, but if it is happening, Republicans are doing it.
54. You have to believe that the people in church on a Sunday morning are what's wrong with America.
55. You have to believe that a government official saying, "I'm from the government, and I'm here to help you," is telling you the truth.
56. You have to believe that a sign in the United States that is in English is discriminatory.
57. You have to believe that all nations and cultures are equal and good, except the US, which isn't.
58. You have to believe that any new problem can be solved with a new government program, and any unsolved problems that still exist have had their budget cut by those evil Republicans.
59. You have to believe that Canada does it better, its just a shame that they are colder.
60. You have to believe that this message is a part of a vast, right wing conspiracy, but Democratic talking points don't originate from Moveon.org.
That is a lot to swallow
Wednesday, December 05, 2007
The American Legion Magazine
November, 2007
12 Myths of 21st-Century War
Unaware of the cost of freedom and served by leaders without military expertise, Americans have started to believe whatever's comfortable
By Ralph Peters
We're in trouble. We're in danger of losing more wars. Our troops haven't forgotten how to fight. We've never had better men and women in uniform. But our leaders and many of our fellow Americans no longer grasp what war means or what it takes to win.
Thanks to those who have served in uniform, we've lived in such safety and comfort for so long that for many Americans sacrifice means little more than skipping a second trip to the buffet table.
Two trends over the past four decades contributed to our national ignorance of the cost, and necessity, of victory. First, the most privileged Americans used the Vietnam War as an excuse to break their tradition of uniformed service. Ivy League universities once produced heroes. Now they resist Reserve Officer Training Corps representation on their campuses.
Yet, our leading universities still produce a disproportionate number of U.S. political leaders. The men and women destined to lead us in wartime dismiss military service as a waste of their time and talents. Delighted to pose for campaign photos with our troops, elected officials in private disdain the military. Only one serious presidential aspirant in either party is a veteran, while another presidential hopeful pays as much for a single haircut as I took home in a month as an Army private.
Second, we've stripped in-depth U.S. history classes out of our schools. Since the 1960s, one history course after another has been cut, while the content of those remaining focuses on social issues and our alleged misdeeds. Dumbed-down textbooks minimize the wars that kept us free. As a result, ignorance of the terrible price our troops had to pay for freedom in the past creates absurd expectations about our present conflicts. When the media offer flawed or biased analyses, the public lacks the knowledge to make informed judgments.
This combination of national leadership with no military expertise and a population that hasn't been taught the cost of freedom leaves us with a government that does whatever seems expedient and a citizenry that believes whatever's comfortable. Thus, myths about war thrive.
Myth No. 1: War doesn't change anything.
This campus slogan contradicts all of human history. Over thousands of years, war has been the last resort - and all too frequently the first resort - of tribes, religions, dynasties, empires, states and demagogues driven by grievance, greed or a heartless quest for glory. No one believes that war is a good thing, but it is sometimes necessary. We need not agree in our politics or on the manner in which a given war is prosecuted, but we can't pretend that if only we laid down our arms all others would do the same.
Wars, in fact, often change everything. Who would argue that the American Revolution, our Civil War or World War II changed nothing? Would the world be better today if we had been pacifists in the face of Nazi Germany and imperial Japan?
Certainly, not all of the changes warfare has wrought through the centuries have been positive. Even a just war may generate undesirable results, such as Soviet tyranny over half of Europe after 1945. But of one thing we may be certain: a U.S. defeat in any war is a defeat not only for freedom, but for civilization. Our enemies believe that war can change the world. And they won't be deterred by bumper stickers.
Myth No. 2: Victory is impossible today.
Victory is always possible, if our nation is willing to do what it takes to win. But victory is, indeed, impossible if U.S. troops are placed under impossible restrictions, if their leaders refuse to act boldly, if every target must be approved by lawyers, and if the American people are disheartened by a constant barrage of negativity from the media. We don't need generals who pop up behind microphones to apologize for every mistake our soldiers make. We need generals who win.
And you can't win if you won't fight. We're at the start of a violent struggle that will ebb and flow for decades, yet our current generation of leaders, in and out of uniform, worries about hurting the enemy's feelings.
One of the tragedies of our involvement in Iraq is that while we did a great thing by removing Saddam Hussein, we tried to do it on the cheap. It's an iron law of warfare that those unwilling to pay the butcher's bill up front will pay it with compound interest in the end. We not only didn't want to pay that bill, but our leaders imagined that we could make friends with our enemies even before they were fully defeated. Killing a few hundred violent actors like Moqtada al-Sadr in 2003 would have prevented thousands of subsequent American deaths and tens of thousands of Iraqi deaths. We started something our national leadership lacked the guts to finish.
Despite our missteps, victory looked a great deal less likely in the early months of 1942 than it does against our enemies today. Should we have surrendered after the fall of the Philippines? Today's opinionmakers and elected officials have lost their grip on what it takes to win. In the timeless words of Nathan Bedford Forrest, "War means fighting, and fighting means killing."
And in the words of Gen. Douglas MacArthur, "It is fatal to enter any war without the will to win it."
Myth No. 3: Insurgencies can never be defeated.
Historically, fewer than one in 20 major insurgencies succeeded. Virtually no minor ones survived. In the mid-20th century, insurgencies scored more wins than previously had been the case, but that was because the European colonial powers against which they rebelled had already decided to rid themselves of their imperial possessions. Even so, more insurgencies were defeated than not, from the Philippines to Kenya to Greece. In the entire 18th century, our war of independence was the only insurgency that defeated a major foreign power and drove it out for good.
The insurgencies we face today are, in fact, more lethal than the insurrections of the past century. We now face an international terrorist insurgency as well as local rebellions, all motivated by religious passion or ethnicity or a fatal compound of both. The good news is that in over 3,000 years of recorded history, insurgencies motivated by faith and blood overwhelmingly failed. The bad news is that they had to be put down with remorseless bloodshed.
Myth No. 4: There's no military solution; only negotiations can solve our problems.
In most cases, the reverse is true. Negotiations solve nothing until a military decision has been reached and one side recognizes a peace agreement as its only hope of survival. It would be a welcome development if negotiations fixed the problems we face in Iraq, but we're the only side interested in a negotiated solution. Every other faction - the terrorists, Sunni insurgents, Shia militias, Iran and Syria - is convinced it can win.
The only negotiations that produce lasting results are those conducted from positions of indisputable strength.
Myth No. 5: When we fight back, we only provoke our enemies.
When dealing with bullies, either in the schoolyard or in a global war, the opposite is true: if you don't fight back, you encourage your enemy to behave more viciously.
Passive resistance only works when directed against rule-of-law states, such as the core English-speaking nations. It doesn't work where silent protest is answered with a bayonet in the belly or a one-way trip to a political prison. We've allowed far too many myths about the "innate goodness of humanity" to creep up on us. Certainly, many humans would rather be good than bad. But if we're unwilling to fight the fraction of humanity that's evil, armed and determined to subjugate the rest, we'll face even grimmer conflicts.
Myth No. 6: Killing terrorists only turns them into martyrs.
It's an anomaly of today's Western world that privileged individuals feel more sympathy for dictators, mass murderers and terrorists - consider the irrational protests against Guantanamo - than they do for their victims. We were told, over and over, that killing Osama bin Laden or Abu Musab al-Zarqawi, hanging Saddam Hussein or targeting the Taliban's Mullah Omar would only unite their followers. Well, we haven't yet gotten Osama or Omar, but Zarqawi's dead and forgotten by his own movement, whose members never invoke that butcher's memory. And no one is fighting to avenge Saddam. The harsh truth is that when faced with true fanatics, killing them is the only way to end their influence. Imprisoned, they galvanize protests, kidnappings, bombings and attacks that seek to free them. Want to make a terrorist a martyr? Just lock him up. Attempts to try such monsters in a court of law turn into mockeries that only provide public platforms for their hate speech, which the global media is delighted to broadcast. Dead, they're dead. And killing them is the ultimate proof that they lack divine protection. Dead terrorists don't kill.
Myth No. 7: If we fight as fiercely as our enemies, we're no better than them.
Did the bombing campaign against Germany turn us into Nazis? Did dropping atomic bombs on Japan to end the war and save hundreds of thousands of American lives, as well as millions of Japanese lives, turn us into the beasts who conducted the Bataan Death March?
The greatest immorality is for the United States to lose a war. While we seek to be as humane as the path to victory permits, we cannot shrink from doing what it takes to win. At present, the media and influential elements of our society are obsessed with the small immoralities that are inevitable in wartime. Soldiers are human, and no matter how rigorous their training, a miniscule fraction of our troops will do vicious things and must be punished as a consequence. Not everyone in uniform will turn out to be a saint, and not every chain of command will do its job with equal effectiveness. But obsessing on tragic incidents - of which there have been remarkably few in Iraq or Afghanistan - obscures the greater moral issue: the need to defeat enemies who revel in butchering the innocent, who celebrate atrocities, and who claim their god wants blood.
Myth No. 8: The United States is more hated today than ever before.
Those who served in Europe during the Cold War remember enormous, often-violent protests against U.S. policy that dwarfed today's let's-have-fun-on-a-Sunday-afternoon rallies. Older readers recall the huge ban-the-bomb, pro-communist demonstrations of the 1950s and the vast seas of demonstrators filling the streets of Paris, Rome and Berlin to protest our commitment to Vietnam. Imagine if we'd had 24/7 news coverage of those rallies. I well remember serving in Germany in the wake of our withdrawal from Saigon, when U.S. soldiers were despised by the locals - who nonetheless were willing to take our money - and terrorists tried to assassinate U.S. generals.
The fashionable anti-Americanism of the chattering classes hasn't stopped the world from seeking one big green card. As I've traveled around the globe since 9/11, I've found that below the government-spokesman/professional-radical level, the United States remains the great dream for university graduates from Berlin to Bangalore to Bogota.
On the domestic front, we hear ludicrous claims that our country has never been so divided. Well, that leaves out our Civil War. Our historical amnesia also erases the violent protests of the late 1960s and early 1970s, the mass confrontations, rioting and deaths. Is today's America really more fractured than it was in 1968?
Myth No. 9: Our invasion of Iraq created our terrorist problems.
This claim rearranges the order of events, as if the attacks of 9/11 happened after Baghdad fell. Our terrorist problems have been created by the catastrophic failure of Middle Eastern civilization to compete on any front and were exacerbated by the determination of successive U.S. administrations, Democrat and Republican, to pretend that Islamist terrorism was a brief aberration. Refusing to respond to attacks, from the bombings in Beirut to Khobar Towers, from the first attack on the Twin Towers to the near-sinking of the USS Cole, we allowed our enemies to believe that we were weak and cowardly. Their unchallenged successes served as a powerful recruiting tool.
Did our mistakes on the ground in Iraq radicalize some new recruits for terror? Yes. But imagine how many more recruits there might have been and the damage they might have inflicted on our homeland had we not responded militarily in Afghanistan and then carried the fight to Iraq. Now Iraq is al-Qaeda's Vietnam, not ours.
Myth No. 10: If we just leave, the Iraqis will patch up their differences on their own.
The point may come at which we have to accept that Iraqis are so determined to destroy their own future that there's nothing more we can do. But we're not there yet, and leaving immediately would guarantee not just one massacre but a series of slaughters and the delivery of a massive victory to the forces of terrorism. We must be open-minded about practical measures, from changes in strategy to troop reductions, if that's what the developing situation warrants. But it's grossly irresponsible to claim that our presence is the primary cause of the violence in Iraq - an allegation that ignores history.
Myth No. 11: It's all Israel's fault. Or the popular Washington corollary: "The Saudis are our friends."
Israel is the Muslim world's excuse for failure, not a reason for it. Even if we didn't support Israel, Islamist extremists would blame us for countless other imagined wrongs, since they fear our freedoms and our culture even more than they do our military. All men and women of conscience must recognize the core difference between Israel and its neighbors: Israel genuinely wants to live in peace, while its genocidal neighbors want Israel erased from the map.
As for the mad belief that the Saudis are our friends, it endures only because the Saudis have spent so much money on both sides of the aisle in Washington. Saudi money continues to subsidize anti-Western extremism, to divide fragile societies, and encourage hatred between Muslims and all others. Saudi extremism has done far more damage to the Middle East than Israel ever did. The Saudis are our enemies.
Myth No. 12: The Middle East's problems are all America's fault.
Muslim extremists would like everyone to believe this, but it just isn't true. The collapse of once great Middle Eastern civilizations has been under way for more than five centuries, and the region became a backwater before the United States became a country. For the first century and a half of our national existence, our relations with the people of the Middle East were largely beneficent and protective, notwithstanding our conflict with the Barbary Pirates in North Africa. But Islamic civilization was on a downward trajectory that could not be arrested. Its social and economic structures, its values, its neglect of education, its lack of scientific curiosity, the indolence of its ruling classes and its inability to produce a single modern state that served its people all guaranteed that, as the West's progress accelerated, the Middle East would fall ever farther behind. The Middle East has itself to blame for its problems.
None of us knows what our strategic future holds, but we have no excuse for not knowing our own past. We need to challenge inaccurate assertions about our policies, about our past and about war itself. And we need to work within our community and state education systems to return balanced, comprehensive history programs to our schools. The unprecedented wealth and power of the United States allows us to afford many things denied to human beings throughout history. But we, the people, cannot afford ignorance.
Ralph Peters is a retired Army officer, strategist and author of 22 books, including the recent "Wars of Blood and Faith: The Conflicts That Will Shape the 21st Century.
Site Map | Feedback | Help | Contact Us | Post Locator | Careers
Copyright 1996-2007 The American Legion - All Rights Reserved - Web Privacy Policy
November, 2007
12 Myths of 21st-Century War
Unaware of the cost of freedom and served by leaders without military expertise, Americans have started to believe whatever's comfortable
By Ralph Peters
We're in trouble. We're in danger of losing more wars. Our troops haven't forgotten how to fight. We've never had better men and women in uniform. But our leaders and many of our fellow Americans no longer grasp what war means or what it takes to win.
Thanks to those who have served in uniform, we've lived in such safety and comfort for so long that for many Americans sacrifice means little more than skipping a second trip to the buffet table.
Two trends over the past four decades contributed to our national ignorance of the cost, and necessity, of victory. First, the most privileged Americans used the Vietnam War as an excuse to break their tradition of uniformed service. Ivy League universities once produced heroes. Now they resist Reserve Officer Training Corps representation on their campuses.
Yet, our leading universities still produce a disproportionate number of U.S. political leaders. The men and women destined to lead us in wartime dismiss military service as a waste of their time and talents. Delighted to pose for campaign photos with our troops, elected officials in private disdain the military. Only one serious presidential aspirant in either party is a veteran, while another presidential hopeful pays as much for a single haircut as I took home in a month as an Army private.
Second, we've stripped in-depth U.S. history classes out of our schools. Since the 1960s, one history course after another has been cut, while the content of those remaining focuses on social issues and our alleged misdeeds. Dumbed-down textbooks minimize the wars that kept us free. As a result, ignorance of the terrible price our troops had to pay for freedom in the past creates absurd expectations about our present conflicts. When the media offer flawed or biased analyses, the public lacks the knowledge to make informed judgments.
This combination of national leadership with no military expertise and a population that hasn't been taught the cost of freedom leaves us with a government that does whatever seems expedient and a citizenry that believes whatever's comfortable. Thus, myths about war thrive.
Myth No. 1: War doesn't change anything.
This campus slogan contradicts all of human history. Over thousands of years, war has been the last resort - and all too frequently the first resort - of tribes, religions, dynasties, empires, states and demagogues driven by grievance, greed or a heartless quest for glory. No one believes that war is a good thing, but it is sometimes necessary. We need not agree in our politics or on the manner in which a given war is prosecuted, but we can't pretend that if only we laid down our arms all others would do the same.
Wars, in fact, often change everything. Who would argue that the American Revolution, our Civil War or World War II changed nothing? Would the world be better today if we had been pacifists in the face of Nazi Germany and imperial Japan?
Certainly, not all of the changes warfare has wrought through the centuries have been positive. Even a just war may generate undesirable results, such as Soviet tyranny over half of Europe after 1945. But of one thing we may be certain: a U.S. defeat in any war is a defeat not only for freedom, but for civilization. Our enemies believe that war can change the world. And they won't be deterred by bumper stickers.
Myth No. 2: Victory is impossible today.
Victory is always possible, if our nation is willing to do what it takes to win. But victory is, indeed, impossible if U.S. troops are placed under impossible restrictions, if their leaders refuse to act boldly, if every target must be approved by lawyers, and if the American people are disheartened by a constant barrage of negativity from the media. We don't need generals who pop up behind microphones to apologize for every mistake our soldiers make. We need generals who win.
And you can't win if you won't fight. We're at the start of a violent struggle that will ebb and flow for decades, yet our current generation of leaders, in and out of uniform, worries about hurting the enemy's feelings.
One of the tragedies of our involvement in Iraq is that while we did a great thing by removing Saddam Hussein, we tried to do it on the cheap. It's an iron law of warfare that those unwilling to pay the butcher's bill up front will pay it with compound interest in the end. We not only didn't want to pay that bill, but our leaders imagined that we could make friends with our enemies even before they were fully defeated. Killing a few hundred violent actors like Moqtada al-Sadr in 2003 would have prevented thousands of subsequent American deaths and tens of thousands of Iraqi deaths. We started something our national leadership lacked the guts to finish.
Despite our missteps, victory looked a great deal less likely in the early months of 1942 than it does against our enemies today. Should we have surrendered after the fall of the Philippines? Today's opinionmakers and elected officials have lost their grip on what it takes to win. In the timeless words of Nathan Bedford Forrest, "War means fighting, and fighting means killing."
And in the words of Gen. Douglas MacArthur, "It is fatal to enter any war without the will to win it."
Myth No. 3: Insurgencies can never be defeated.
Historically, fewer than one in 20 major insurgencies succeeded. Virtually no minor ones survived. In the mid-20th century, insurgencies scored more wins than previously had been the case, but that was because the European colonial powers against which they rebelled had already decided to rid themselves of their imperial possessions. Even so, more insurgencies were defeated than not, from the Philippines to Kenya to Greece. In the entire 18th century, our war of independence was the only insurgency that defeated a major foreign power and drove it out for good.
The insurgencies we face today are, in fact, more lethal than the insurrections of the past century. We now face an international terrorist insurgency as well as local rebellions, all motivated by religious passion or ethnicity or a fatal compound of both. The good news is that in over 3,000 years of recorded history, insurgencies motivated by faith and blood overwhelmingly failed. The bad news is that they had to be put down with remorseless bloodshed.
Myth No. 4: There's no military solution; only negotiations can solve our problems.
In most cases, the reverse is true. Negotiations solve nothing until a military decision has been reached and one side recognizes a peace agreement as its only hope of survival. It would be a welcome development if negotiations fixed the problems we face in Iraq, but we're the only side interested in a negotiated solution. Every other faction - the terrorists, Sunni insurgents, Shia militias, Iran and Syria - is convinced it can win.
The only negotiations that produce lasting results are those conducted from positions of indisputable strength.
Myth No. 5: When we fight back, we only provoke our enemies.
When dealing with bullies, either in the schoolyard or in a global war, the opposite is true: if you don't fight back, you encourage your enemy to behave more viciously.
Passive resistance only works when directed against rule-of-law states, such as the core English-speaking nations. It doesn't work where silent protest is answered with a bayonet in the belly or a one-way trip to a political prison. We've allowed far too many myths about the "innate goodness of humanity" to creep up on us. Certainly, many humans would rather be good than bad. But if we're unwilling to fight the fraction of humanity that's evil, armed and determined to subjugate the rest, we'll face even grimmer conflicts.
Myth No. 6: Killing terrorists only turns them into martyrs.
It's an anomaly of today's Western world that privileged individuals feel more sympathy for dictators, mass murderers and terrorists - consider the irrational protests against Guantanamo - than they do for their victims. We were told, over and over, that killing Osama bin Laden or Abu Musab al-Zarqawi, hanging Saddam Hussein or targeting the Taliban's Mullah Omar would only unite their followers. Well, we haven't yet gotten Osama or Omar, but Zarqawi's dead and forgotten by his own movement, whose members never invoke that butcher's memory. And no one is fighting to avenge Saddam. The harsh truth is that when faced with true fanatics, killing them is the only way to end their influence. Imprisoned, they galvanize protests, kidnappings, bombings and attacks that seek to free them. Want to make a terrorist a martyr? Just lock him up. Attempts to try such monsters in a court of law turn into mockeries that only provide public platforms for their hate speech, which the global media is delighted to broadcast. Dead, they're dead. And killing them is the ultimate proof that they lack divine protection. Dead terrorists don't kill.
Myth No. 7: If we fight as fiercely as our enemies, we're no better than them.
Did the bombing campaign against Germany turn us into Nazis? Did dropping atomic bombs on Japan to end the war and save hundreds of thousands of American lives, as well as millions of Japanese lives, turn us into the beasts who conducted the Bataan Death March?
The greatest immorality is for the United States to lose a war. While we seek to be as humane as the path to victory permits, we cannot shrink from doing what it takes to win. At present, the media and influential elements of our society are obsessed with the small immoralities that are inevitable in wartime. Soldiers are human, and no matter how rigorous their training, a miniscule fraction of our troops will do vicious things and must be punished as a consequence. Not everyone in uniform will turn out to be a saint, and not every chain of command will do its job with equal effectiveness. But obsessing on tragic incidents - of which there have been remarkably few in Iraq or Afghanistan - obscures the greater moral issue: the need to defeat enemies who revel in butchering the innocent, who celebrate atrocities, and who claim their god wants blood.
Myth No. 8: The United States is more hated today than ever before.
Those who served in Europe during the Cold War remember enormous, often-violent protests against U.S. policy that dwarfed today's let's-have-fun-on-a-Sunday-afternoon rallies. Older readers recall the huge ban-the-bomb, pro-communist demonstrations of the 1950s and the vast seas of demonstrators filling the streets of Paris, Rome and Berlin to protest our commitment to Vietnam. Imagine if we'd had 24/7 news coverage of those rallies. I well remember serving in Germany in the wake of our withdrawal from Saigon, when U.S. soldiers were despised by the locals - who nonetheless were willing to take our money - and terrorists tried to assassinate U.S. generals.
The fashionable anti-Americanism of the chattering classes hasn't stopped the world from seeking one big green card. As I've traveled around the globe since 9/11, I've found that below the government-spokesman/professional-radical level, the United States remains the great dream for university graduates from Berlin to Bangalore to Bogota.
On the domestic front, we hear ludicrous claims that our country has never been so divided. Well, that leaves out our Civil War. Our historical amnesia also erases the violent protests of the late 1960s and early 1970s, the mass confrontations, rioting and deaths. Is today's America really more fractured than it was in 1968?
Myth No. 9: Our invasion of Iraq created our terrorist problems.
This claim rearranges the order of events, as if the attacks of 9/11 happened after Baghdad fell. Our terrorist problems have been created by the catastrophic failure of Middle Eastern civilization to compete on any front and were exacerbated by the determination of successive U.S. administrations, Democrat and Republican, to pretend that Islamist terrorism was a brief aberration. Refusing to respond to attacks, from the bombings in Beirut to Khobar Towers, from the first attack on the Twin Towers to the near-sinking of the USS Cole, we allowed our enemies to believe that we were weak and cowardly. Their unchallenged successes served as a powerful recruiting tool.
Did our mistakes on the ground in Iraq radicalize some new recruits for terror? Yes. But imagine how many more recruits there might have been and the damage they might have inflicted on our homeland had we not responded militarily in Afghanistan and then carried the fight to Iraq. Now Iraq is al-Qaeda's Vietnam, not ours.
Myth No. 10: If we just leave, the Iraqis will patch up their differences on their own.
The point may come at which we have to accept that Iraqis are so determined to destroy their own future that there's nothing more we can do. But we're not there yet, and leaving immediately would guarantee not just one massacre but a series of slaughters and the delivery of a massive victory to the forces of terrorism. We must be open-minded about practical measures, from changes in strategy to troop reductions, if that's what the developing situation warrants. But it's grossly irresponsible to claim that our presence is the primary cause of the violence in Iraq - an allegation that ignores history.
Myth No. 11: It's all Israel's fault. Or the popular Washington corollary: "The Saudis are our friends."
Israel is the Muslim world's excuse for failure, not a reason for it. Even if we didn't support Israel, Islamist extremists would blame us for countless other imagined wrongs, since they fear our freedoms and our culture even more than they do our military. All men and women of conscience must recognize the core difference between Israel and its neighbors: Israel genuinely wants to live in peace, while its genocidal neighbors want Israel erased from the map.
As for the mad belief that the Saudis are our friends, it endures only because the Saudis have spent so much money on both sides of the aisle in Washington. Saudi money continues to subsidize anti-Western extremism, to divide fragile societies, and encourage hatred between Muslims and all others. Saudi extremism has done far more damage to the Middle East than Israel ever did. The Saudis are our enemies.
Myth No. 12: The Middle East's problems are all America's fault.
Muslim extremists would like everyone to believe this, but it just isn't true. The collapse of once great Middle Eastern civilizations has been under way for more than five centuries, and the region became a backwater before the United States became a country. For the first century and a half of our national existence, our relations with the people of the Middle East were largely beneficent and protective, notwithstanding our conflict with the Barbary Pirates in North Africa. But Islamic civilization was on a downward trajectory that could not be arrested. Its social and economic structures, its values, its neglect of education, its lack of scientific curiosity, the indolence of its ruling classes and its inability to produce a single modern state that served its people all guaranteed that, as the West's progress accelerated, the Middle East would fall ever farther behind. The Middle East has itself to blame for its problems.
None of us knows what our strategic future holds, but we have no excuse for not knowing our own past. We need to challenge inaccurate assertions about our policies, about our past and about war itself. And we need to work within our community and state education systems to return balanced, comprehensive history programs to our schools. The unprecedented wealth and power of the United States allows us to afford many things denied to human beings throughout history. But we, the people, cannot afford ignorance.
Ralph Peters is a retired Army officer, strategist and author of 22 books, including the recent "Wars of Blood and Faith: The Conflicts That Will Shape the 21st Century.
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