Monday, March 30, 2009

Next Recession Victim: Your Pension and Retirement Plan

Photo from Pro Commerce blog

Companies Cut Back or Eliminate Pensions and Retirement Savings Contributions as They Struggle With the Economy

By Scott Mayerowitz, ABC News

As if there weren't already plenty of economic gloom and doom these days, now some U.S. workers are apparently starting to worry about the safety of their pensions.

Cash-strapped companies are cutting back everywhere possible, and one target has been retirement plans. With the stock market down, companies have been forced to contribute more money to their plans in order to keep them fully funded. Several are deciding instead to end future contributions to the programs.

Another set of workers has another concern: Their companies have gone into bankruptcy. Pensions are insured through the Pension Benefit Guaranty Corp., a creation of the Employee Retirement Income Security Act of 1974. But there are limits to the insurance, now $54,000 a year for workers who retire at age 65. Younger retirees receive less.

Raul Miller, a 55-year-old flight attendant for United Airlines, had expected to retire this year after 36 years with the company. But when the airline emerged from bankruptcy in 2007, his pension was a lot less than what he had planned.

"It's was sustainable enough to begin with," Miller said. Now that the pension has been cut, though, "it means that I cannot retire. It means that I have to continue working as long as I have expenses."

Miller said he pays more today for food, gas and countless other daily living expenses.

"While everything else is going up, our pension is going down," he said. "My pension is not going to be substantial enough. I'm going to have to have a full time job."

Like many other workers, Miller had taken his job expecting and planning on having a pension.

"I was working hard and loyally for this company and one of the reasons was, one of the things I was looking forward to, was the security of a pension in my retirement," he added. "It's just not happening the way I anticipated."

Even if your company doesn't go bankrupt, you might not get the pension you once thought you would. About one-third of employees nationwide participate in a traditional or defined benefit pension plan.

Pension plans pool together the retirement savings of an entire company's workforce, young and old. The employer sets aside an amount of cash each pay period, based on a percentage of each worker's salary. The percentage is set by how long the average worker is expected to live, what kind of return the company hopes to get on its investments and on how large of a payout the company plans to make at retirement. It all gets invested and is eventually used to make payments to workers once they retire.

Freezing Pensions

Many companies are deciding to freeze those pensions now in order to save money in the long-run. Employees get credit for their time already served but won't get any additional credits. That can really hurt employees who are close to retirement but not quite there because pension plans tend to give more generous benefits for the later years of service.

For instance, one employee might have planned on staying with a company for 30 years, only for it to freeze the pension during their 25th year. The employee would still get credit for those 25 years of work, but it's really those last five years that push up the value of the pension.

Peter Austin, executive director of Bank of New York Mellon Pension Services, said that many companies are forced to make higher contributions because the value of their pension portfolios plunged. To make matters worse, a lot of companies can't borrow cash to add to the fund because of the credit crisis.

"It's probably the perfect storm for these pension plans," Austin said.

Austin said many of his corporate clients are now considering other options, including freezing their plans. Many are switching over to a defined contribution plan, such as a 401(k) instead of a pension.

But he cautioned that while bankruptcy is never a good thing, "the sky's not falling." He said the plans are set up in a way that even if a company collapses, workers are safe from losses.

"Even in the worst case of bankruptcy," he said, "their benefits will be protected."

Olivia S. Mitchell, executive director of the Wharton School's Pension Research Council at the University of Pennsylvania, has been noticing a similar scaling back by companies.

She said roughly $2 trillion has been lost in 401(k)s and pension plans during the recession.

"Plan sponsors are going to have to start contributing more to back the promises they've already made," Mitchell said. "Corporate plan sponsors are looking very hard at whether they can reduce future benefit accruals."

Companies can't touch the benefits workers already received but nothing stops them from ending their pension plans in the immediate future.

Underfunded Plans

Newhouse Newspapers, for instance, is cutting pension contributions and shifting to a 401(k) program. Cell phone maker Motorola suspending its contributions in December.

Then there is a final group of companies, who have seen their funding drop so low that they are required by the federal Pension Protection Act of 2006 to make changes to their plans.

For instance, book publisher Houghton-Mifflin Harcourt notified its employees last week that they will no longer be able to take a lump-sum payment at retirement, according to spokesman Joe Blumenfeld. Employees instead will have to either take traditional monthly payments or can chose to get half of the lump-sum payment and the rest through monthly payments.

Blumenfeld said the plan fell below the 80 percent funding level and the company, by law, had no choice but to make the change.

"There wasn't a great uproar about it," he said, but many were asking: "Who has a defined pension anymore, anyway."

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Garland Greene on Insanity

Steve Buscemi as Garland Greene, the soft-spoken serial killer from Con Air.

Garland Greene: What if I told you insane was working fifty hours a week in some office for fifty years at the end of which they tell you to piss off; ending up in some retirement village hoping to die before suffering the indignity of trying to make it to the toilet on time? Wouldn't you consider that to be insane?

Saturday, March 28, 2009

Digital TV Converter Hack

Digital TV Converter Hack

Modify a digital converter box into a battery powered one for emergencies, camping or other on-the-go uses. Save your portable analog TV's!

Ahead of G-20 summit, Britons alerted to 'dirty bomb' risk

A woman passes graffiti on a London wall. Photo by Toby Melville/Reuters.

A new government report says that a terrorist attack is now more likely than ever.

By Ben Quinn, Correspondent of The Christian Science Monitor

After decades of campaigns by Irish Republicans and, most recently, Islamist militants, Britons have become used to the daily threat of terrorism.

But in a warning that the stakes have been raised – and just days before world leaders gather here for the Group of 20 meeting – a warning was given this week that a so-called dirty bomb on a British city is more likely than ever.

The government alert accompanied the launch of a major new antiterrorist strategy that encourages ordinary citizens to offer Britain an additional layer of security.

The new approach aims to train some 60,000 retail, hotel, and service industry staff to recognize terrorist threats. In addition, more resources will go into blocking access to information posted online on how to stage terror attacks.

Most significant, as part of a broader ideological offensive against terrorism and amid growing concern that alienated Muslim youths are being recruited by terror groups, the government will allocate funds for influential groups and individuals in Britain's Muslim community who speak out against extremism.

The 167-page document, regarded as the frankest assessment yet of the threat facing Britain, asserts that there is a need to "challenge those who reject the rights to which we are committed, scorn the institutions and values of our parliamentary democracy, dismiss the rule of law, and promote intolerance."

The document made headlines with a stark warning that changing technology and increased illegal transportation of chemical, radiological, and biological materials make the prospect of terrorists assembling and exploding a dirty bomb more realistic.

Currently, the risk of a terrorist attack taking place in Britain is said by the authorities to be "severe" – meaning that an attack is highly likely.

The threat of home-grown militants importing technology to construct improvised explosive devices of the type used against British and US forces in Iraq and Afghanistan was also highlighted in the report, called "Contest Two," which updates the previous "Contest" strategy developed in 2003.

The strategy's launch, however, was overshadowed by a continuing rift between the British government and Britain's largest Muslim group, which accused ministers Thursday of wanting to "undermine its independence" by demanding one of its leaders be removed from office.

The government, which has previously funded the Muslim Council of Britain, broke off relations earlier this month after it called for the resignation of a senior council official after he allegedly called for violence against Israel.

The concerns outlined in the document corresponded with a separate report this week by the British broadcaster, Sky News, which cited Pakistani intelligence sources saying that more than 20 young Britons had returned home after being trained by groups linked to Al Qaeda and the Taliban.

British Home Secretary Jacqui Smith named next week's G-20 meeting as a prime target for terrorists and told the BBC that Britain could no longer just rely on intelligence services and the police to stop the threat.

In remarks seen as directed at Britain's Muslim population, Ms. Smith said that it was up to people in all communities to challenge those who espouse radical beliefs and reject aspects of British life such as a parliamentary democracy.

"We should all stand up for our shared values and not concede the floor to those who dismiss them," she told the BBC.

Her remarks, as well as the general tone of the strategy, mark a shift in Britain's approach to tackling terrorism. Much of the effort has gone into disrupting terrorist operations. But now, officials will focus more on challenging those who attempt to undermine British society's established values.

In what is regarded as reflecting more nuanced thinking by Britain's intelligence services, the report acknowledges the role played by perceptions of British foreign policy in the Islamic world, and how that anger has been fueled by events in Iraq and Afghanistan, as well as perceived inaction over the plight of Palestinians.

However, the paper argues that such grievances do not always lead to radicalization, noting that social and psychological factors, as well as individual conflicts of identity, can be important. Playing down the role of radical preachers, who have in the past been blamed for radicalizing young British Muslims, it highlights instead the role of charismatic individuals and peer groups.

The strategy does offer some cause for optimism, suggesting that the "severe" threat level could be downgraded over the coming year.

Al Qaeda was also said to be short of money. The group is also likely to fragment, according to the assessment, and Britain and other nations might be targeted by new "self-starting" terrorist groups or individuals.

Brooke Rogers, a lecturer in risk and terror at King's College London, described the British government's warning of an increased risk of a dirty bomb attack as "brave."

Dr. Rogers added, "It needed to be said, although they had to be careful how they said it, but it also needs to be accompanied with a more joined-up program so that people can actively take steps on how they can reduce the risk as much in their own lives."

She welcomed other aspects of the strategy, particularly its emphasis on more actively challenging those who express views that are contrary to British values.

"A big question in recent years has been whether or not the British system of celebrating multiculturalism has actually worked," Rogers says.

"To some extent, the British identity has been eroded, and what I think the government is now trying to do is draw a firm line around what it is to be British in terms of believing in democracy and freedoms."

~ ~ ~

7/7 London bomb terrorist attack on bus

Witnesses have told how an explosion tore the roof off a London double-decker bus, killing at least 13 people.

The aftermath of the blast was filmed by a passer-by on a mobile phone. Fergal Keane reports.

Friday, March 27, 2009

Andrés Segovia - Fandanguillo

Andrés Segovia - Fandanguillo - by Federico Torroba

Andrés Torres Segovia, 1st Marquess of Salobreña, was a Spanish classical guitarist widely regarded as one of the most important figures of the classical guitar in the beginning and mid 20th century.

Segovia's main musical aesthetic preferences were music of the late 19th and early 20th century especially in the Spanish romantic and nationalist style - a style different from flamenco. Many works of this style were written especially for him and formed part of his core repertoire, e.g. the guitar works of Federico Moreno Torroba.

Terry Gibson, 4th generation basket maker

Terry Gibson, 4th Generation Basket Maker

Quality baskets made from white oak in the Ozarks of Arkansas. Following a family tradition, Terry makes baskets and sells them at the Fayetteville Farmers' Market.

I have no expectations for anyone to rush out and try this. What a skill!

Thursday, March 26, 2009

Backyard composting for a vegetable garden

Backyard composting for a vegetable garden

Laura Kelly composts kitchen scraps and yard waste to apply to her productive backyard garden in Fayetteville, Arkansas. Kelly sells at the Fayetteville Farmers' Market.

It's just that easy. What are you waiting for?

Farmers' Markets Nationwide

Penn & Teller on Guns and the 2nd Amendment

Penn & Teller on the 2nd Amendment

~ ~ ~

Penn & Teller on Gun Control

Maru: The Unknown Comic

Maru: The Unknown Comic

紙袋の底に穴が開いているので、そこから見ることができます。Because there is a hole in the bottom of the paper bag, Maru can see.

~ ~ ~

The Unknown Comic

Here he is, from The Gong Show, the one, the only, the original Unknown Comic.... Murray Langston oops. Shhhh.

Wednesday, March 25, 2009

China ready to discuss new reserve currency at G20 summit

China is ready to discuss Russia's proposal of a new global reserve currency as an alternative to the U.S. dollar at the G20 summit in London, a vice governor of the country's Central Bank said on Monday.

Russia earlier submitted a proposal to the G20 summit which could see the IMF examining possibilities for creating a supra-national reserve currency, and also forcing national banks and international financial institutions to diversify their foreign currency reserves.

"We believe it is necessary to consider the IMF's role in this process and also define the possibility and the need to adopt measures allowing for Special Drawing Rights (SDRs) to become an internationally recognized super-reserve currency," Russia's proposal read.

Hu Xiaolian said that China, which holds about $2 trillion in foreign exchange reserves, was prepared to debate the issue as "the dollar's dominance and U.S. economic woes could entail considerable currency fluctuations and affect the world financial situation."

At the same time, she said that discussion into a new global currency could be started but considering the dollar's status as the current primary currency, "we should focus more on enhancing control over the existing system."

The G20 summit, involving advanced and emerging economies and international financial institutions, will be held in London on April 2, aimed at finding ways to overcome the ongoing global financial crisis.

During the G20 summit, Chinese President Hu Jintao will meet Russian President Dmitry Medvedev and U.S. President Barack Obama, Chinese Deputy Foreign Minister He Yafei said.

Yafei also said that Jintao will address the summit outlining measures to stabilize the global financial markets, reform the international financial system and harmonize macroeconomic regulation standards. -- RIA Novosti

Tuesday, March 24, 2009

Iran's View of Obama

By George Friedman, Stratfor

U.S. President Barack Obama released a video offering Iran congratulations on the occasion of Nowruz, the Persian New Year, on Friday. Israeli President Shimon Peres also offered his best wishes, referring to “the noble Iranian people.” The joint initiative was received coldly in Tehran, however. Iran’s supreme leader, Ayatollah Ali Khamenei, said the video did not show that the United States had shifted its hostile attitude toward Iran.

The video is obviously part of Obama’s broader strategy of demonstrating that his administration has shifted U.S. policy, at least to the extent that it is prepared to open discussions with other regimes (with Iran being the hardest and most controversial case). The U.S. strategy is fairly straightforward: Obama is trying to create a new global perception of the United States. Global opinion was that former U.S. President George W. Bush was unwilling to engage with, and listen to, allies or enemies. Obama’s view is that that perception in itself harmed U.S. foreign policy by increasing suspicion of the United States. For Obama, offering New Year’s greetings to Iran is therefore part of a strategy to change the tone of all aspects of U.S. foreign policy.

Getting Peres to offer parallel greetings was undoubtedly intended to demonstrate to the Iranians that the Israelis would not block U.S. initiatives toward Iran. The Israelis probably were willing to go along with the greetings because they don’t expect them to go very far. They also want to show that they were not responsible for their failure, something critical in their relations with the Obama administration.

The Iranian response is also understandable. The United States has made a series of specific demands on Iran, and has worked to impose economic sanctions on Iran when Tehran has not complied. But Iran also has some fairly specific demands of the United States. It might be useful, therefore, to look at the Iranian view of the United States and the world through its eyes.

From the Iranian point of view, the United States has made two fundamental demands of Iran. The first is that Iran halt its military nuclear program. The second, a much broader demand, is that Iran stop engaging in what the United States calls terrorism. This ranges from support for Hezbollah to support for Shiite factions in Iraq. In return, the United States is prepared to call for a suspension of sanctions against Iran.

For Tehran, however, the suspension of sanctions is much too small a price to pay for major strategic concessions. First, the sanctions don’t work very well. Sanctions only work when most powers are prepared to comply with them. Neither the Russians nor the Chinese are prepared to systematically comply with sanctions, so there is little that Iran can afford that it can’t get. Iran’s problem is that it cannot afford much. Its economy is in shambles due more to internal problems than to sanctions. Therefore, in the Iranian point of view, the United States is asking for strategic concessions, yet offering very little in return.

The Nuclear Question

Meanwhile, merely working on a nuclear device — regardless of how close or far Iran really is from having one — provides Iran with a dramatically important strategic lever. The Iranians learned from the North Korean experience that the United States has a nuclear fetish. Having a nuclear program alone was more important to Pyongyang than actually having nuclear weapons. U.S. fears that North Korea might someday have a nuclear device resulted in significant concessions from the United States, Japan and South Korea.

The danger of having such a program is that the United States — or some other country — might attack and destroy the associated facilities. Therefore, the North Koreans created a high level of uncertainty as to just how far along they were on the road to having a nuclear device and as to how urgent the situation was, raising and lowering alarms like a conductor in a symphony. The Iranians are following the same strategy. They are constantly shifting from a conciliatory tone to an aggressive one, keeping the United States and Israel under perpetual psychological pressure. The Iranians are trying to avoid an attack by keeping the intelligence ambiguous. Tehran’s ideal strategy is maintaining maximum ambiguity and anxiety in the West while minimizing the need to strike immediately. Actually obtaining a bomb would increase the danger of an attack in the period between a successful test and the deployment of a deliverable device.

What the Iranians get out of this is exactly what the North Koreans got: disproportionate international attention and a lever on other topics, along with something that could be sacrificed in negotiations. They also have a chance of actually developing a deliverable device in the confusion surrounding its progress. If so, Iran would become invasion- and even harassment-proof thanks to its apparent instability and ideology. From Tehran’s perspective, abandoning its nuclear program without substantial concessions, none of which have materialized as yet, would be irrational. And the Iranians expect a large payoff from all this.

Radical Islamists, Iraq and Afghanistan

This brings us to the Hezbollah/Iraq question, which in fact represents two very different issues. Iraq constitutes the greatest potential strategic threat to Iran. This is as ancient as Babylon and Persia, as modern as the Iran-Iraq war of the 1980s. Iran wants guarantees that Iraq will never threaten it, and that U.S. forces in Iraq will never pose a threat to Iran. Tehran does not want promises alone; it wants a recognized degree of control over the Iraqi government, or at least negative control that would allow it to stop Baghdad from doing things Iran doesn’t want. To achieve this, Iran systematically has built its influence among factions in Iraq, permitting it to block Iraqi policies that Iran regards as dangerous.

The American demand that Iran stop meddling in Iraqi policies strikes the Iranians as if the United States is planning to use the new Baghdad regime to restore the regional balance of power. In fact, that is very much on Washington’s mind. This is completely unacceptable to Iran, although it might benefit the United States and the region. From the Iranian point of view, a fully neutral Iraq — with its neutrality guaranteed by Iranian influence — is the only acceptable outcome. The Iranians regard the American demand that Iran not meddle in Iraq as directly threatening Iranian national security.

There is then the issue of Iranian support for Hezbollah, Hamas and other radical Islamist groups. Between 1979 and 2001, Iran represented the background of the Islamic challenge to the West: The Shia represented radical Islam. When al Qaeda struck, Iran and the Shia lost this place of honor. Now, al Qaeda has faded and Iran wants to reclaim its place. It can do that by supporting Hezbollah, a radical Shiite group that directly challenges Israel, as well as Hamas — a radical Sunni group — thus showing that Iran speaks for all of Islam, a powerful position in an arena that matters a great deal to Iran and the region. Iran’s support for these groups helps it achieve a very important goal at little risk. Meanwhile, the U.S. demand that Iran end this support is not matched by any meaningful counteroffer or by a significant threat.

Moreover, Tehran dislikes the Obama-Petraeus strategy in Afghanistan. That strategy involves talking with the Taliban, a group that Iran has been hostile toward historically. The chance that the United States might install a Taliban-linked government in Afghanistan represents a threat to Iran second only to the threat posed to it by Iraq.

The Iranians see themselves as having been quite helpful to the United States in both Iraq and Afghanistan, as they helped Washington topple both the Taliban and Saddam Hussein. In 2001, they offered to let U.S. aircraft land in Iran, and assured Washington of the cooperation of pro-Iranian factions in Afghanistan. In Iraq, they provided intelligence and helped keep the Shiite population relatively passive after the invasion in 2003. But Iranians see Washington as having betrayed implicit understandings that in return for these services, the Iranians would enjoy a degree of influence in both countries. And the U.S. opening to the Taliban is the last straw.

Obama’s Greetings in Context

Iran views Obama’s New Year greetings within this context. To them, Obama has not addressed the core issues between the two countries. In fact, apart from videos, Obama’s position on Iran does not appear different from the Bush position. The Iranian leadership does not see why it should respond more favorably to the Obama administration than it did to the Bush administration. Tehran wants to be very sure that Obama understands that the willingness alone to talk is insufficient; some indications of what is to be discussed and what might be offered are necessary.

Many in the U.S. administration believe that the weak Iranian economy might shape the upcoming Iranian presidential election. Undoubtedly, the U.S. greetings were timed to influence the election. Washington has tried to influence internal Iranian politics for decades, constantly searching for reformist elements. The U.S. hope is that someone might be elected in Iran who is so obsessed with the economy that he would trade away strategic and geopolitical interests in return for some sort of economic aid. There are undoubtedly candidates who would be interested in economic aid, but none who are prepared to trade away strategic interests. Nor could they even if they wanted to. The Iran-Iraq war is burned into the popular Iranian consciousness; any candidate who appeared willing to see a strong Iraq would lose the election. American analysts are constantly confusing an Iranian interest in economic aid with a willingness to abandon core interests. But this hasn’t happened, and isn’t happening now.

This is not to say that the Iranians won’t bargain. Beneath the rhetoric, they are practical to the extreme. Indeed, the rhetoric is part of the bargaining. What is not clear is whether Obama is prepared to bargain. What will he give for the things he wants? Economic aid is not enough for Iran, and in any event, the idea of U.S. economic aid for Iran during a time of recession is a non-starter. Is Obama prepared to offer Iran a dominant voice in Iraq and Afghanistan? How insistent is Obama on the Hezbollah and Hamas issue? What will he give if Iran shuts down its nuclear program? It is not clear that Obama has answers to these questions.

Rebuilding the U.S. public image is a reasonable goal for the first 100 days of a presidency. But soon it will be summer, and the openings Obama has made will have to be walked through, with tough bargaining. In the case of Iran — one of the toughest cases of all — it is hard to see how Washington can give Tehran the things it wants because that would make Iran a major regional power. And it is hard to see how Iran could give away the things the Americans are demanding.

Obama indicated that it would take time for his message to generate a positive response from the Iranians. It is more likely that unless the message starts to take on more substance that pleases the Iranians, the response will remain unchanged. The problem wasn’t Bush or Clinton or Reagan, the problem was the reality of Iran and the United States. Only if a third power frightened the Iranians sufficiently — a third power that also threatened the United States — would U.S.-Iranian interests be brought together. But Russia, at least for now, is working very hard to be friendly with Iran.

Monday, March 23, 2009

Soundgarden - Black Hole Sun

Soundgarden - Black Hole Sun

In my eyes
In disguise
As no one knows
Hides the face
Lies the snake
The sun
In my disgrace
Boiling heat
Summer stench
'neath the black
The sky looks dead
Call my name
Through the cream
And I'll hear you
Scream again

Black hole sun
Won't you come
And wash away the rain
Black hole sun
Won't you come
Won't you come

Cold and damp
Steal the warm wind
Tired friend
Times are gone
For honest men
And sometimes
Far too long
For snakes
In my shoes
A walking sleep
And my youth
I pray to keep
Heaven send
Hell away
No one sings
Like you

Hang my head
Drown my fear
'till you all just

Terrorism Recruiting Manual Worries Authorities

by Dina Temple-Raston, NPR

For months now, counterterrorism officials have seen signs that al-Qaida has been looking for new and innovative ways to recruit terrorists, including a new manual that has surfaced on the Internet.

Researchers at West Point recently stumbled on the 51-page manual while they were visiting a jihadi chat room, called Ecles. It's a Web site that allows members to have interactive discussions, post videos and download manuals. Ecles is the second most popular jihadi chat room on the Web, and al-Qaida often posts things there. Because of that, it is a place counterterrorism analysts track regularly.

So when the West Point analysts discovered a step-by-step primer called "The Art of Recruiting Mujahedeen," it got their attention. On one level, the manual might be an early indication that al-Qaida is trying to identify new sleeper terrorists. On the other hand, the book is so basic it seems to suggest al-Qaida is getting desperate for new members.

Brian Fishman, the head of research at West Point's Combating Terrorism Center, says he was struck by the remedial tone of the book. At the end of a chapter, for example, there are questions to judge both the recruiter's progress and the recruit's.

"The recruiter himself doesn't have to use a lot of judgment — they are simply the intermediary for the technique that is being taught in the handbook," Fishman says.

Here's how the manual, as translated by the CIA, suggests a recruiter build a rapport with a recruit:

"This stage lasts approximately three weeks," it says. "You must do something important at this stage. You must identify his interests and relations with people and how he spends the whole 24 hours, meaning you study him secretly to be reassured about your choice."

This section touches on such things as being nice to the recruit. It suggests the recruiter pretend to be his friend, perhaps even buy him small gifts. It ends with a questionnaire to assess progress. "Is the recruit anxious to see you?" it asks. You get one point for "no" and three points for "yes." Does he accept your advice and respect your opinion? It reads a little like one of those relationship quizzes in women's magazines. "If you have received less than 10 points, you are on the wrong path, repeat the stages from the beginning. From 10 to 18, you are on your way."

The book is clearly tailored to recruiters who may not know much about the Quran. It suggests recruiters target non-Muslims or recent converts to the Muslim faith. Fishman says the simplicity may suggest that al-Qaida and its affiliated groups have had to lower their recruitment standards.

"When you think about al-Qaida's senior leadership, you have sophisticated thinkers there," he says. "People with engineering degrees and doctorates — those sorts of folks. That's not who is being targeted with this handbook. This is for a different class of terrorist, if you will."

While the manual might suggest a hint of desperation, experts say it also presents some real concerns. Georgetown University professor and counterterrorism expert Bruce Hoffman says the manual is aimed at attracting people who are less likely to arouse the suspicions of law enforcement. And it may be part of al-Qaida efforts to attract followers who can blend into different communities.

"I think it really reflects what we see in many established terrorist groups historically," he says. "This persistent quest or search for a new and broader constituency from which they can potentially draw recruits from."

One of the most worrisome aspects of the manual is that it is focused on keeping recruits right where they are — in the countries in which they already live. Hoffman says that will make them harder to find.

"In this way, they are hoping to create the ultimate fifth column, or a sleeper that really is unknown, is undetectable and is beneath the radar and in place in precisely the enemy territory where al-Qaida wishes to strike," he says.

What is impossible to gauge at this point is just how many people have downloaded "The Art of Recruiting Mujahedeen," and whether any of them have put it into practice. Which is, of course, exactly how al-Qaida wants it.

Currency Wars

China's U.S. Debt Quandary

By Gady Epstein, Beijing Dispatch

Chinese leaders' heavy investment in the U.S. economy has exposed them to domestic criticism--and the critics have a point.

U.S. investors may have cheered the Federal Reserve's decision this week to pump more than 1 trillion new dollars into the economy, but at least one faction in China was on the verge of tears.

"I want to cry, really want to cry," wrote one Beijinger on Thursday, posting on one of China's most popular portals, The problem was that by issuing more currency, the Fed was potentially weakening the U.S. dollar, making China's dollar-based investments worth less. "Those elites insist on buying American bonds."

One of "those elites" under fire is Premier Wen Jiabao. When he expresses public angst about the safety of China's holdings of U.S. debt, he is speaking partly to domestic critics who believe Chinese leaders have unwisely tied their country's fate to the U.S. economy. Many of the critics may be crackpots and conspiracy theorists, but they have a point.

They know that their government is now America's largest creditor, with more than half of its $2 trillion in foreign exchange reserves invested in Treasury securities and other U.S. government bonds. Some of these critics suspect that the Federal Reserve essentially prints more money not just to stimulate the economy, but also to devalue China's U.S. dollar portfolio, undermining a rival power.

It may be a paranoid theory, but it is a popular one. One of China's bestselling books in the past 18 months is Currency Wars, a conspiratorial screed that suggests that Western financial interests, including the Federal Reserve, seek to destroy the Chinese economy. The book has sold more than 1 million copies officially, and probably several million more pirated copies, and remains a bestseller now as economic conditions deteriorate.

Any leaders who choose to ignore this populist thinking risk being branded as sellouts. Last fall, as the financial crisis was unfolding, an incendiary letter circulated on the Internet claiming that a clique of Chinese elites, led by investment banker and former Premier Zhu Rongji's son Levin Zhu, formed a "foreign financial interest cartel" that has betrayed the interests of the Chinese people to enrich themselves and their cronies.

The letter named as co-conspirators the men running China's $200 billion sovereign wealth fund, whose disastrous investments in the Blackstone Group (nyse: BX) and Morgan Stanley (nyse: MS) have lost China billions. People's Bank of China Governor Zhou Xiaochuan, China's Ben Bernanke, was singled out for investing too much in Treasurys as the dollar was depreciating--more reasoning straight out of Currency Wars.

Currency Wars author, Song Hongbing.

3 million times a day

Jay Rockefeller: Internet should have never existed

"The Dept. of Defense is [cyber] attacked 3 million times a day." -- Sen. Jay Rockefeller, D - W. Virginia

It's not so bad

Click images to enlarge cartoon.

via The City

Sunday, March 22, 2009

The Bonus

The Navy found they had too many officers and decided to offer an early retirement bonus. They promised any officer who volunteered for retirement a bonus of $1,000 for every inch measured in a straight line between any two points on his body. The officer got to choose what those two points would be.

The first officer who accepted asked that he be measured from the top of his head to the tip of his toes. He was measured at six feet and walked out with a hefty bonus of $72,000.

The second officer who accepted was a little smarter and asked to be measured from the tip of his outstretched hands to his toes. He walked out with a cool $96,000.

The third one was a noncommissioned officer, a grizzly old chief who, when asked where he would like to be measured replied, "From the tip of my weenie to my testicles."

It was suggested by the pension man that he might want to reconsider, explaining about the nice big checks the previous two officers had received.

But, the old chief insisted and they decided to go along with him providing the measurement was taken by a medical officer.

The medical officer arrived and instructed the chief to "drop 'em", which he promptly did. The medical officer placed the tape measure on the tip of the chief's weenie and began to work back.

"Dear Lord!" he suddenly exclaimed, "Where are your testicles?"

The old chief calmly replied, "Vietnam."

Saturday, March 21, 2009

Concealed Carry in National Parks Suspended

On Thursday, March 19, a federal district court in Washington, D.C. granted anti-gun plaintiffs a preliminary injunction against implementation of the new rule allowing law-abiding citizens to defend themselves by carrying a concealed firearm in national parks and wildlife refuges.

In Thursday's ruling, Federal District Court Judge Colleen Kollar-Kotelly issued the preliminary injunction against the Department of the Interior rule that took effect on January 9, 2009. The revised rule allowed individuals to carry concealed firearms for self-defense in national parks and national wildlife refuges located in states that allow the carrying of concealed firearms.

Today, NRA filed a notice of appeal in Federal District Court to oppose the preliminary injunction.

Thursday, March 19, 2009

Evolution of Abe

more money origami

From Riches to Rags: Inflation & Poverty in Zimbabwe

By Warren Mass for The New American

Economists have long used 1920s Germany as the classic example of what can happen to a nation when monetary inflation gets out of control. So rapid was the inflation of the money supply that the exchange rate went from 60 marks per U.S. dollar during the first half of 1921 to 8,000 marks per dollar by December 1922.

There is an old story about an elderly German man who in 1919 was sent to an insane asylum. Early in 1923, the doctors decided that this man was cured and told him to take a taxicab to the home of his brother, which he did. Arriving at his destination, he asked the cab driver how much the fare was, and the driver told him that it was two hundred thousand marks. Horrified, since he had in his possession only a few coins that had been in his pocket when he was committed, he explained that he could not possibly pay such an amount.

"Let me see what you do have," said the cab driver. The old man took the coins out of his pocket and held them in the open palm of his hand. The cab driver picked out one of the old silver coins for his fare, and gave his passenger a million marks as change.

"Son," the old man shook his head and replied, "you might as well take me back to the hospital. I'm not cured yet!"

As bad as things were in Germany in the 1920s, the hyperinflation that has plagued Zimbabwe recently makes the Weimar Republic of that era look like a model of fiscal and monetary integrity.

The tragedy now unfolding in Zimbabwe provides the latest example that a government cannot create prosperity simply by cranking up the printing presses and creating previously unimaginable sums of money. All that course of action ever does in the long term is destroy the value of the currency. But this tragedy is not limited to inflation of the currency, as horrific as the inflation has been. It also shows the devastating effects of share-the-wealth politics, which becomes control-the-wealth politics wherever it is put into practice.

In Zimbabwe, the confiscation of private farms from the "rich," ostensibly to benefit the poor, has been devastating to the country's economy, and the government's attempt to paper over this devastation by creating ever larger sums of fiat (unbacked) money has harmed the economy even more. A few government officials have benefited from this devastation at the expense of almost all Zimbabweans.

Zimbabwe's Inflation Is Even Worse

Zimbabwe has shattered all previous records for inflated currency, effectively bringing the nation's economy to a halt. The nation's annual inflation rate rose from 1,000 percent in 2006, to 12,000 percent in 2007, to an immeasurable figure in 2008. Last August, the government devalued the currency by chopping off 10 zeros from bills. Had they not done so, the conversion rate would have risen to 10 trillion Zimbabwean dollars to one U.S. dollar!

Ironically, as nearly worthless as Zimbabwe's currency has become — the result of the tremendous inflation of its supply — it is in short supply to consumers. This is because Zimbabwe's central bank governor, Gideon Gono, instead of supplying the banks, began sending agents with suitcases filled with Zimbabwean currency into the streets to buy U.S. dollars and South African rand on the black market. "Life in Zimbabwe: Wait for Useless Money," an article in the New York Times for October 1, 2008, described residents of the financially plagued country getting up around 2 a.m. to begin their daily wait in line at the bank. Because withdrawals of currency have been rationed, each customer could receive only the equivalent in Zimbabwean currency of one or two U.S. dollars per day.

The Times reporter interviewed a security guard named Stanford Mafumera, one of many Zimbabweans waiting in a bank line to obtain currency. When the reporter asked him for his opinion on the cause of his country's economic crisis, Mafumera replied that Robert Mugabe's regime had "chased away the white commercial farmers who had made the country a breadbasket ... as well as donors from Britain and other European countries and the United States who sustained Zimbabwe's starving millions for years."

"A lot of people got farms, but they can't produce anything and this is what is causing the poverty and hunger," said Mafumera. "There's no food."

Though Mafumera is presumably no expert in economics, his understanding of the political dynamics within Zimbabwe concurs with that of many experts who have made similar observations, as well as recent developments reported in the news.

The BBC reported on February 23 that even though the country desperately needs food, members of parliament, police, the military, and Reserve Bank of Zimbabwe officials — all loyal to President Mugabe's Zimbabwe African National Union-Patriotic Front (ZANU-PF) party — have seized 77 white-owned farms within the last few weeks. Commercial Farmers Union President Trevor Gifford told the network that the seizures have taken place since the national unity government recently took office. The new government is the result of a coalition formed between the ZANU-PF party and opposition leader Morgan Tsvangirai, who was sworn in as prime minister on February 11. Tsvangirai, the head of the Movement for Democratic Change (MDC), the main opposition party, opposes the confiscations, and observers believe that officials loyal to Mugabe stepped up the rate of seizures before Tsvangirai could assume enough power to prevent them.

While the pace of land confiscation may have increased recently, it has been a routine part of an economically devastating policy that has existed since Robert Mugabe took control of Zimbabwe in 1980. The seizure of farms without compensation was prohibited by Zimbabwe's original constitution, so Mugabe initiated a referendum to amend the constitution to remove that prohibition. The newly formed MDC party — composed largely of white farmers, but also supported by much of the rural black population — opposed the referendum. A majority of Zimbabwean voters defeated it, but parliament disregarded their wishes and passed legislation authorizing uncompensated seizure of farms, which Mugabe signed into law on April 18, 2000 — the 20th anniversary of the fall of what was then Rhodesia to his communist-inspired regime.

Under Mugabe, white-owned farmland was seized and turned into Soviet-style collective farms, ostensibly "to correct colonial-era injustice." Naturally, food production plummeted, bringing widespread hunger. Instead of letting Mugabe's regime die a natural death, however, the IMF, World Bank, UN, USAID, and other agencies spent years pouring in aid to prop it up. As for the poor, black farmers, they never received any of the land from the seized farms, which wound up in the hands of President Mugabe's political allies, who often used the property for personal retreats.

That the seizure of white-owned farms will continue was confirmed by none other than Robert Mugabe himself during a lavish, $250,000, 85th birthday celebration held for the president on February 28, even as shortages of food, medicine, and other essentials have suppressed longevity in the country so badly that one in 10 Zimbabwean children dies before his fifth birthday. "Land distribution will continue. It will not stop," said Mugabe. "The few remaining white farmers should quickly vacate their farms as they have no place there." But as a group, it is not the white farmers who have suffered most from Mugabe's socialist land collectivization policies; most of them (the ones who haven't been killed by Mugabe's zealous followers) can always emigrate to greener pastures. It is the poor black Zimbabweans who are suffering from food shortages and the hyperinflation resulting from Mugabe's policies.

As the Zimbabwean man recently interviewed by the New York Times suggested, the seizure of white-owned farms played a key role in destroying Zimbabwe's economy. Even after 20 years of Mugabe's rule, such farms constituted the only productive sector of the Zimbabwean economy. Although the farmers represented less than one percent of the population, they were responsible for 25 percent of all employment in the country and 40 percent of the nation's export earnings.

The February 10, 2005 Investor's Business Daily noted that "in Zimbabwe, Robert Mugabe's dictatorship is imitating Stalin by seizing private farms and driving millions toward starvation."

As in all socialist governments, governmental micro-management of the economy produced a steady decline in the nation's productivity, gross domestic product, and standard of living. Starting in the 1980s, the Mugabe government eliminated the right of companies to fire workers, tripled government spending in areas such as education and health care, nationalized the country's utilities and agricultural marketing sector, and increased the government's share of the GDP. The government also set artificially low interest rates, which discouraged foreign investment. Foreign investment was also discouraged by the country's restrictive regulatory requirements, which made entrepreneurship difficult.

As the government sector outpaced the private sector in growth, government spending generated a chronic budget deficit, much higher taxes, and a rapid increase in the national debt. These factors all contributed to poor economic conditions.

Zimbabwe Goes From Bad to Worse

With its economy killed by socialist mismanagement, the "solution" implemented by Zimbabwe's government was more socialist mismanagement, this time of the nation's money supply.

Zimbabwe has a political position akin to our chairman of the Federal Reserve; it is the governor of the Reserve Bank of Zimbabwe (RBZ). Robert Mugabe appointed the current governor of the RBZ, Gideon Gono, in November 2003, and reappointed him last November to a new five-year term. Gono's ascension to this position typifies police-state politics, wherein loyalty to the strongman is more important than competence. Gono began his career with the state-owned Zimbank (Zimbabwe Banking Corporation Limited) in 1987 and moved in 1995 to the Commercial Bank of Zimbabwe (CBZ), in which the government of Zimbabwe acquired total shares in 1991 to avert its collapse. Tony Hawkins, a University of Zimbabwe economist who taught Gono 20 years ago, recently made this observation about his former student: "He was a good student but forgot whatever economics he learnt when he became a political player."

Gono, who has long been Robert Mugabe's personal banker, also used political connections to inflate his academic credentials. Jonathan Moyo (who became Zimbabwe's Minister of Information from 2000 to 2005) appointed Gono to head the University of Zimbabwe Council. A writer for the Zimbabwean tabloid ZimDaily noted in a July 17, 2008 article that it is common knowledge in Zimbabwe that, as the chairman of the university's council, Gono had himself awarded an honorary doctorate degree.

The ZimDaily writer was blunt in its criticism of Gono, not only for his failed economics policies, but for his ties to Mugabe's oppressive policies. After Gono was granted generous space in the pages of the state-controlled Herald newspaper a week earlier, the ZimDaily writer attacked Gono, saying the interview had "exposed Gideon Gono as a man in serious denial and an outright hypocrite who is trying to exonerate himself from the scorched earth policies he has been part of together with the military junta now illegally running or ruining the country."

The article continues:

However, no matter what, the people of Zimbabwe and history will never absolve Gono for his naked complicity in destroying our beautiful country just to save his political master at all costs.

Speaking in forked tongues, Gono is quoted as having said that, "Of course I don't defend anyone who murders another person, tortures another person or anyone who perpetrates violence on another person or property of another person for whatever reason."

"Such people must be punished and dealt with through the law regardless of who the perpetrators of that murder, torture and violence are."

Any innocent person uninitiated about the Zimbabwean crisis would clap hands and say, well said Governor! However, it's something to say good things during the day and do exactly the opposite during the night.

This is rank hypocrisy and an attempt to play the angel for a man who is a Devil re-incarnate for he is part of the so called JOC that has been systematically and methodically planning, implementing and financing the violence that has created untold suffering to the innocent people of Zimbabwe.

The JOC mentioned by the ZimDaily writer is the Joint Operations Command, a national security think-tank made up of army, police, prison, and Central Intelligence Organization (CIO) chiefs, which reportedly plotted a violent campaign to secure Mugabe's victory in the June 27 one-man presidential election run-off, a charge they deny.

Since last July, of course, the economies of all the world's nations have declined, but Zimbabwe's has totally self-destructed. The United Kingdom's Times observed on February 3 that "Gideon Gono, widely regarded as the world's most disastrous central banker, knocked another 12 zeros off the Zimbabwean dollar yesterday in an attempt to bring the national currency back from the realms of the fantastical. In a stroke, the governor of Zimbabwe's Reserve Bank slashed the street value of the Zimbabwean dollar from $250 trillion to one US dollar to 250 [to one U.S. dollar], because the computers, calculators and people could no longer cope with all the zeros."

The article noted that the country's appalling annual inflation rate was 5,000,000,000,000,000,000,000 (five sextillion) percent.

And still, Gono was focusing much of his intention on finding ways to print even more bank notes. An article posted on on February 11 reported Gono's statement that his country's mint, Fidelity Printers and Refiners, needed 500 million U.S. dollars' worth of new investment — not to help Zimbabwe's productive segment — but to overhaul the worn-out presses so that printing capacity at the mint can be expanded immediately to meet demand!

That the issuing of new money is the economic cause of price inflation is not widely understood in Africa (and probably not in the United States, either, judging by congressional support for President Obama's "stimulus" package) is indicated by the article's lead-off sentence: "With Astronomic Inflation Requiring More and More New Banknotes, the Country's Mint is Finding It Hard to Cope."

Obviously, the writer of that sentence has not figured out that the increase of the supply of banknotes is what caused the price inflation to begin with. To say that astronomic inflation requires more banknotes is akin to saying that widespread arson requires more gasoline and matches!

Zimbabwe's Prime Minister Tsvangirai has attempted to remove Gono and other Mugabe-appointed officials in the new coalition government, though Mugabe has attempted to stop any such moves by making appointees permanent. In reaction to Mugabe's permanent appointment of the secretaries, Tsvangirai e-mailed a statement to Bloomberg news on February 25, in which he said: "The announcement of permanent secretaries has no force of law and is therefore null and void."

Tsvangirai blames Gono for Zimbabwe's decade-long economic crisis and Attorney General Johannes Tomana for arresting officials of his MDC. The dispute over Mugabe's appointments threatens the stability of the coalition government between Mugabe's ZANU-PF and Tsvangirai's MDC.

Meanwhile, because of the complete collapse of the Zimbabwean dollar, Tsvangirai has made the decision to start paying the country's soldiers and other government workers in U.S. dollars. "We will pay every civil servant in foreign currency," Zimbabwe's Finance Minister Tendai Biti told a news conference recently in Harare.

In order to obtain enough money to make a first installment of $100 each on soldiers' salaries, Finance Minister Biti said he had "juggled" the books. Civil servants, teachers, doctors, and nurses would receive a similar amount. Though it is far less than what they were previously paid, it is at least enough to put a little food on the table in the short term. Much of the currency has been sent back to Zimbabwe by workers who took jobs abroad. As we have noted, Gono acquired foreign currency by sending agents into the streets to buy U.S. dollars and South African rand on the black market.

During a press conference, Biti said: "We have to get Zimbabwe working again; getting teachers to school is part of efforts to get Zimbabwe to work again, having examination papers being marked is part of having Zimbabwe work again."

The nation's schools have been closed for months because inflation had reduced the worth of teachers' salaries to such an extent that they could not afford bus fare to get to work. Some teachers had sold snacks to students to earn a little cash.

The people of Zimbabwe have also been suffering a health care crisis stemming from the inability of the people to afford medical care in the country's economic climate, and from health care workers who have dropped out of the system to seek work in other countries. According to WHO statistics, a cholera epidemic that took hold in the country seven months ago has resulted in 82,130 cases of the illness and 3,817 deaths.

Zimbabwe's Lessons

Among the most important lessons that can be learned from Zimbabwe's economic and social crisis is that too much government will destroy both prosperity and freedom.

Zimbabwe is an example of an unrestrained socialist economy gone completely out of control. But socialism comes in many forms; some move quickly — communism can be described as "socialism in a hurry" — and others at a slower pace. But socialism invariably leads to the growth of government, which must be financed by higher taxes, borrowing, and/or inflation of the nation's currency. Generally, because to rely on one of these methods produces too much resistance from the population, the government employs all three methods.

However, for a government to inflate a nation's money supply, it must divorce the nation's money from fixed assets, such as gold, and turn to fiat paper currency. This requires a central bank, such as Zimbabwe's RBZ, the Reichsbank (the central bank of Germany from 1876 until 1945), or our own Federal Reserve System. So essential is this feature to the socialization of a nation that the fifth plank of the Communist Manifesto called for the "centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly."

Zimbabwe's hyperinflation was an extreme case that we may never see in the United States, but even the relatively more restrained inflation of the German Weimar Republic in the 1920s was bad enough to devastate the economy and set the stage for the rise of Adolf Hitler.

In today's troubled economic times, Americans can follow the example of Germany or Zimbabwe and spend trillions of dollars to "stimulate" the economy, keeping the printing presses running day and night to pay the bills. Over time, the result will be hyperinflation and a ruined economy.

Or Americans can return to fiscal sanity, balance the budget, abolish the Federal Reserve, restore sound currency, and return to the prosperous economy and free political system our nation enjoyed during much of the 19th century.

The choice should be clear. But those who are undecided might consider Zimbabwe for their next vacation. -- ###

Related: Zimbabwe: A Fresh Start

~ ~ ~

10/15/2009 Update: Has the U.S. Reached the Hyperinflation Tipping Point? -- Answer.

Wednesday, March 18, 2009

Turkey and Russia on the Rise

By Reva Bhalla, Lauren Goodrich and Peter Zeihan, Stratfor

Russian President Dmitri Medvedev reportedly will travel to Turkey in the near future to follow up a recent four-day visit by his Turkish counterpart, Abdullah Gul, to Moscow. The Turks and the Russians certainly have much to discuss.

Russia is moving aggressively to extend its influence throughout the former Soviet empire, while Turkey is rousing itself from 90 years of post-Ottoman isolation. Both are clearly ascendant powers, and it would seem logical that the more the two bump up against one other, the more likely they will gird for yet another round in their centuries-old conflict. But while that may be true down the line, the two Eurasian powers have sufficient strategic incentives to work together for now.

Russia’s World

Russia is among the world’s most strategically vulnerable states. Its core, the Moscow region, boasts no geographic barriers to invasion. Russia must thus expand its borders to create the largest possible buffer for its core, which requires forcibly incorporating legions of minorities who do not see themselves as Russian. The Russian government estimates that about 80 percent of Russia’s approximately 140 million people are actually ethnically Russian, but this number is somewhat suspect, as many minorities define themselves based on their use of the Russian language, just as many Hispanics in the United States define themselves by their use of English as their primary language. Thus, ironically, attaining security by creating a strategic buffer creates a new chronic security problem in the form of new populations hostile to Moscow’s rule. The need to deal with the latter problem explains the development of Russia’s elite intelligence services, which are primarily designed for and tasked with monitoring the country’s multiethnic population.

Click image to enlarge map.

Russia’s primary challenge, however, is time. In the aftermath of the Soviet collapse, the bottom fell out of the Russian birthrate, with fewer than half the number of babies born in the 1990s than were born in the 1980s. These post-Cold War children are now coming of age; in a few years, their small numbers are going to have a catastrophic impact on the size of the Russian population. By contrast, most non-Russian minorities — in particular those such as Chechens and Dagestanis, who are of Muslim faith — did not suffer from the 1990s birthrate plunge, so their numbers are rapidly increasing even as the number of ethnic Russians is rapidly decreasing. Add in deep-rooted, demographic-impacting problems such as HIV, tuberculosis and heroin abuse — concentrated not just among ethnic Russians but also among those of childbearing age — and Russia faces a hard-wired demographic time bomb. Put simply, Russia is an ascending power in the short run, but it is a declining power in the long run.

The Russian leadership is well aware of this coming crisis, and knows it is going to need every scrap of strength it can muster just to continue the struggle to keep Russia in one piece. To this end, Moscow must do everything it can now to secure buffers against external intrusion in the not-so-distant future. For the most part, this means rolling back Western influence wherever and whenever possible, and impressing upon states that would prefer integration into the West that their fates lie with Russia instead. Moscow’s natural gas crisis with Ukraine, August 2008 war with Georgia, efforts to eject American forces from Central Asia and constant pressure on the Baltic states all represent efforts to buy Russia more space — and with that space, more time for survival.

Expanding its buffer against such a diverse and potentially hostile collection of states is no small order, but Russia does have one major advantage: The security guarantor for nearly all of these countries is the United States, and the United States is currently very busy elsewhere. So long as U.S. ground forces are occupied with the Iraqi and Afghan wars, the Americans will not be riding to the rescue of the states on Russia’s periphery. Given this window of opportunity, the Russians have a fair chance to regain the relative security they seek. In light of the impending demographic catastrophe and the present window of opportunity, the Russians are in quite a hurry to act.

Turkey’s World

Turkey is in many ways the polar opposite of Russia. After the dissolution of the Ottoman Empire following World War I, Turkey was pared down to its core, Asia Minor. Within this refuge, Turkey is nearly unassailable. It is surrounded by water on three sides, commands the only maritime connection between the Black and Mediterranean seas and sits astride a plateau surrounded by mountains. This is a very difficult chunk of territory to conquer. Indeed, beginning in the Seljuk Age in the 11th century, the ancestors of the modern Turks took the better part of three centuries to seize this territory from its previous occupant, the Byzantine Empire.

The Turks have used much of the time since then to consolidate their position such that, as an ethnicity, they reign supreme in their realm. The Persians and Arabs have long since lost their footholds in Anatolia, while the Armenians were finally expelled in the dying days of World War I. Only the Kurds remain, and they do not pose a demographic challenge to the Turks. While Turkey exhibits many of the same demographic tendencies as other advanced developing states — namely, slowing birthrates and a steadily aging population — there is no major discrepancy between Turk and Kurdish birthrates, so the Turks should continue to comprise more than 80 percent of the country’s population for some time to come. Thus, while the Kurds will continue to be a source of nationalistic friction, they do not constitute a fundamental challenge to the power or operations of the Turkish state, like minorities in Russia are destined to do in the years ahead.

Turkey’s security is not limited to its core lands. Once one moves beyond the borders of modern Turkey, the existential threats the state faced in years past have largely melted away. During the Cold War, Turkey was locked into the NATO structure to protect itself from Soviet power. But now the Soviet Union is gone, and the Balkans and Caucasus — both former Ottoman provinces — are again available for manipulation. The Arabs have not posed a threat to Anatolia in nearly a millennium, and any contest between Turkey and Iran is clearly a battle of unequals in which the Turks hold most of the cards. If anything, the Arabs — who view Iran as a hostile power with not only a heretical religion but also with a revolutionary foreign policy calling for the overthrow of most of the Arab regimes — are practically welcoming the Turks back. Despite both its imperial past and its close security association with the Americans, the Arabs see Turkey as a trusted mediator, and even an exemplar.

With the disappearance of the threats of yesteryear, many of the things that once held Turkey’s undivided attention have become less important to Ankara. With the Soviet threat gone, NATO is no longer critical. With new markets opening up in the former Soviet Union, Turkey’s obsession with seeking EU membership has faded to a mere passing interest. Turkey has become a free agent, bound by very few relationships or restrictions, but dabbling in events throughout its entire periphery. Unlike Russia, which feels it needs an empire to survive, Turkey is flirting with the idea of an empire simply because it can — and the costs of exploring the option are negligible.

Whereas Russia is a state facing a clear series of threats in a very short time frame, Turkey is a state facing a veritable smorgasbord of strategic options under no time pressure whatsoever. Within that disconnect lies the road forward for the two states — and it is a road with surprisingly few clashes ahead in the near term.

The Field of Competition

There are four zones of overlapping interest for the Turks and Russians.

First, the end of the Soviet empire opened up a wealth of economic opportunities, but very few states have proven adept at penetrating the consumer markets of Ukraine and Russia. Somewhat surprisingly, Turkey is one of those few states. Thanks to the legacy of Soviet central planning, Russian and Ukrainian industry have found it difficult to retool away from heavy industry to produce the consumer goods much in demand in their markets. Because most Ukrainians and Russians cannot afford Western goods, Turkey has carved out a robust and lasting niche with its lower-cost exports; it is now the largest supplier of imports to the Russian market. While this is no exercise in hard power, this Turkish penetration nevertheless is cause for much concern among Russian authorities.

So far, Turkey has been scrupulous about not politicizing these useful trade links beyond some intelligence-gathering efforts (particularly in Ukraine). Considering Russia’s current financial problems, having a stable source of consumer goods — especially one that is not China — is actually seen as a positive. At least for now, the Russian government would rather see its trade relationship with Turkey stay strong. There will certainly be a clash later — either as Russia weakens or as Turkey becomes more ambitious — but for now, the Russians are content with the trade relationship.

Second, the Russian retreat in the post-Cold War era has opened up the Balkans to Turkish influence. Romania, Bulgaria and the lands of the former Yugoslavia are all former Ottoman possessions, and in their day they formed the most advanced portion of the Ottoman economy. During the Cold War, they were all part of the Communist world, with Romania and Bulgaria formally incorporated into the Soviet bloc. While most of these lands are now absorbed into the European Union, Russia’s ties to its fellow Slavs — most notably the Serbs and Bulgarians — have allowed it a degree of influence that most Europeans choose to ignore. Additionally, Russia has long held a friendly relationship with Greece and Cyprus, both to complicate American policy in Europe and to provide a flank against Turkey. Still, thanks to proximity and trading links, Turkey clearly holds the upper hand in this theater of competition.

But this particular region is unlikely to generate much Turkish-Russian animosity, simply because both countries are in the process of giving up.

Most of the Balkan states are already members of an organization that is unlikely to ever admit Russia or Turkey: the European Union. Russia simply cannot meet the membership criteria, and Cyprus’ membership in essence strikes the possibility of Turkish inclusion. (Any EU member can veto the admission of would-be members.) The EU-led splitting of Kosovo from Serbia over Russian objections was a body blow to Russian power in the region, and the subsequent EU running of Kosovo as a protectorate greatly limited Turkish influence as well. Continuing EU expansion means that Turkish influence in the Balkans will shrivel just as Russian influence already has. Trouble this way lies, but not between Turkey and Russia. If anything, their joint exclusion might provide some room for the two to agree on something.

The third area for Russian-Turkish competition is in energy, and this is where things get particularly sticky. Russia is Turkey’s No. 1 trading partner, with energy accounting for the bulk of the trade volume between the two countries. Turkey depends on Russia for 65 percent of its natural gas and 40 percent of its oil imports. Though Turkey has steadily grown its trade relationship with Russia, it does not exactly approve of Moscow’s penchant for using its energy relations with Europe as a political weapon. Russia has never gone so far as to cut supplies to Turkey directly, but Turkey has been indirectly affected more than once when Russia decided to cut supplies to Ukraine because Moscow felt the need to reassert its writ in Kiev.

Sharing the Turks’ energy anxiety, the Europeans have been more than eager to use Turkey as an energy transit hub for routes that would bypass the Russians altogether in supplying the European market. The Baku-Tbilisi-Ceyhan (BTC) pipeline is one such route, and others, like Nabucco, are still stuck in the planning stages. The Russians have every reason to pressure the Turks into staying far away from any more energy diversification schemes that could cost Russia one of its biggest energy clients — and deny Moscow much of the political leverage it currently holds over the Europeans who are dependent on the Russian energy network.

There are only two options for the Turks in diversifying away from the Russians. The first lies to Turkey’s south in Iraq and Iran. Turkey has big plans for Iraq’s oil industry, but it will still take considerable time to upgrade and restore the oil fields and pipelines that have been persistently sabotaged and ransacked by insurgents during the fighting that followed the 2003 U.S. invasion. The Iranians offer another large source of energy for the Turks to tap into, but the political complications attached to dealing with Iran are still too prickly for the Turks to move ahead with concrete energy deals at this time. Complications remain for now, but Turkey will be keeping an eye on its Middle Eastern neighbors for robust energy partnerships in the future.

The second potential source of energy for the Turks lies in Central Asia, a region that Russia must keep in its grip at all costs if it hopes to survive in the long run. In many ways this theater is the reverse of the Balkans, where the Russians hold the ethnic links and the Turks the economic advantage. Here, four of the five Central Asian countries — Kazakhstan, Uzbekistan, Kyrgyzstan and Turkmenistan — are Turkic. But as a consequence of the Soviet years, the infrastructure and economies of all four are so hardwired into the Russian sphere of influence that it would take some major surgery to liberate them. But the prize is a rich one: Central Asia possesses the world’s largest concentration of untapped energy reserves. And as the term “central” implies, whoever controls the region can project power into the former Soviet Union, China and South Asia. If the Russians and Turks are going to fight over something, this is it.

Here Turkey faces a problem, however — it does not directly abut the region. If the Turks are even going to attempt to shift the Central Asian balance of power, they will need a lever. This brings us to the final — and most dynamic — realm of competition: the Caucasus.

Turkey here faces the best and worst in terms of influence projection. The Azerbaijanis do not consider themselves simply Turkic, like the Central Asians, but actually Turkish. If there is a country in the former Soviet Union that would consider not only allying with but actually joining with another state to escape Russia’s orbit, it would be Azerbaijan with Turkey. Azerbaijan has its own significant energy supplies, but its real value is in serving as a willing springboard for Turkish influence into Central Asia.

However, the core of Azerbaijan does not border Turkey. Instead, it is on the other side of Armenia, a country that thrashed Azerbaijan in a war over the disputed Nagorno-Karabakh enclave and still has deep historical bitterness against the Turks over claims of genocide. Armenia has sold itself to the Russians to keep its Turkish foes at bay.

This means Turkish designs on Central Asia all boil down to the former Soviet state of Georgia. If Turkey can bring Georgia fully under its wing, Turkey can then set about to integrate with Azerbaijan and project influence into Central Asia. But without Georgia, Turkey is hamstrung before it can even begin to reach for the real prize in Central Asia.

In this, the Turks do not see the Georgians as much help. The Georgians do not have much in the way of a functional economy or military, and they have consistently overplayed their hand with the Russians in the hopes that the West would come to their aid. Such miscalculations contributed to the August 2008 Georgian-Russian war, in which Russia smashed what military capacity the Georgians did possess. So while Ankara sees the Georgians as reliably anti-Russian, it does not see them as reliably competent or capable.

This means that Turkish-Russian competition may have been short-circuited before it even began. Meanwhile, the Americans and Russians are beginning to outline the rudiments of a deal. Various items on the table include Russia allowing the Americans to ship military supplies to Afghanistan via Russia’s sphere of influence, changes to the U.S. ballistic missile defense (BMD) program, and a halt to NATO expansion. The last prong is a critical piece of Russian-Turkish competition. Should the Americans and Europeans put their weight behind NATO expansion, Georgia would be a logical candidate — meaning most of the heavy lifting in terms of Turkey projecting power eastward would already be done. But if the Americans and Europeans do not put their weight behind NATO expansion, Georgia would fall by the wayside and Turkey would have to do all the work of projecting power eastward — and facing the Russians — alone.

A Temporary Meeting of Minds?

There is clearly no shortage of friction points between the Turks and the Russians. With the two powers on a resurgent path, it was only a matter of time before they started bumping into one another. The most notable clash occurred when the Russians decided to invade Georgia last August, knowing full well that neither the Americans nor the Europeans would have the will or capability to intervene on behalf of the small Caucasian state. NATO’s strongest response was a symbolic show of force that relied on Turkey, as the gatekeeper to the Black Sea, to allow a buildup of NATO vessels near the Georgian coast and threaten the underbelly of Russia’s former Soviet periphery.

Turkey disapproved of the idea of Russian troops bearing down in the Caucasus near the Turkish border, and Ankara was also angered by having its energy revenues cut off during the war when the BTC pipeline was taken offline.

The Russians promptly responded to Turkey’s NATO maneuvers in the Black Sea by holding up a large amount of Turkish goods at various Russian border checkpoints to put the squeeze on Turkish exports. But the standoff was short-lived; soon enough, the Turks and Russians came to the negotiating table to end the trade spat and sort out their respective spheres of influence. The Russian-Turkish negotiations have progressed over the past several months, with Russian and Turkish leaders now meeting fairly regularly to sort out the issues where both can find some mutual benefit.

The first area of cooperation is Europe, where both Russia and Turkey have an interest in applying political pressure. Despite Europe’s objections and rejections, the Turks are persistent in their ambitions to become a member of the European Union. At the same time, the Russians need to keep Europe linked into the Russian energy network and divided over any plans for BMD, NATO expansion or any other Western plan that threatens Russian national security. As long as Turkey stalls on any European energy diversification projects, the more it can demand Europe’s attention on the issue of EU membership. In fact, the Turks already threatened as much at the start of the year, when they said outright that if Europe doesn’t need Turkey as an EU member, then Turkey doesn’t need to sign off on any more energy diversification projects that transit Turkish territory. Ankara’s threats against Europe dovetailed nicely with Russia’s natural gas cutoff to Ukraine in January, when the Europeans once again were reminded of Moscow’s energy wrath.

The Turks and the Russians also can find common ground in the Middle East. Turkey is again expanding its influence deep into its Middle Eastern backyard, and Ankara expects to take the lead in handling the thorny issues of Iran, Iraq and Syria as the United States draws down its presence in the region and shifts its focus to Afghanistan. What the Turks want right now is stability on their southern flank. That means keeping Russia out of mischief in places like Iran, where Moscow has threatened to sell strategic S-300 air defense systems and to boost the Iranian nuclear program in order to grab Washington’s attention on other issues deemed vital to Moscow’s national security interests. The United States is already leaning on Russia to pressure Iran in return for other strategic concessions, and the Turks are just as interested as the Americans in taming Russia’s actions in the Middle East.

Armenia is another issue where Russia and Turkey may be having a temporary meeting of minds. Russia unofficially occupies Armenia and has been building up a substantial military presence in the small Caucasian state. Turkey can either sit back, continue to isolate Armenia and leave it for the Russians to dominate through and through, or it can move toward normalizing relations with Yerevan and dealing with Russia on more equal footing in the Caucasus. With rumors flying of a deal on the horizon between Yerevan and Ankara (likely with Russia’s blessing), it appears more and more that the Turks and the Russians are making progress in sorting out their respective spheres of influence.

Ultimately, both Russia and Turkey know that this relationship is likely temporary at best. The two Eurasian powers still distrust each other and have divergent long-term goals, even if in the short term there is a small window of opportunity for Turkish and Russian interests to overlap. The law of geopolitics dictates that the two ascendant powers are doomed to clash — just not today.