Kevin Drum

Afghanistan Strikes It Rich

| Sun Jun. 13, 2010 11:45 PM EDT

Just a few hours after I surveyed the scene in Afghanistan and suggested that a decade from now "we'll all be wondering why we were ever there," James Risen of the New York Times proposes an answer:

The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

....An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and BlackBerrys. The vast scale of Afghanistan’s mineral wealth was discovered by a small team of Pentagon officials and American geologists.

....The value of the newly discovered mineral deposits dwarfs the size of Afghanistan’s existing war-bedraggled economy, which is based largely on opium production and narcotics trafficking as well as aid from the United States and other industrialized countries. Afghanistan’s gross domestic product is only about $12 billion. “This will become the backbone of the Afghan economy,” said Jalil Jumriany, an adviser to the Afghan minister of mines.

I have a very bad feeling about this. It could quickly turn into a toxic combination of stupendous wealth, superpower conflict, oligarchs run wild, entire new levels of corruption, and a trillion new reasons for the Taliban to fight even harder. And for the cynical among us, this line from Risen's piece — "American and Afghan officials agreed to discuss the mineral discoveries at a difficult moment in the war in Afghanistan" — suggests that the Obama administration might be eagerly thinking about these discoveries as a shiny new reason to keep a military presence in Afghanistan forever. I can hardly wait to see what Bill Kristol thinks of this.

On the other hand, maybe it represents lots of new jobs, enough money to suck away the Taliban's foot soldiers, and the stable income base Afghanistan needs to develop a modern infrastructure. I doubt it, but you never know.

That aside, if you read the entire piece it turns out that the story (and the timeline) of how this mineral treasure was discovered is pretty interesting. Enjoy it while you can.

Advertise on

So How Are Things Going in Afghanistan?

| Sun Jun. 13, 2010 2:22 PM EDT

On Wednesday, Jon Boone of the Guardian reported on the hottest topic of conversation in Afghanistan right now: the sudden resignations of Amrullah Saleh, head of the National Directorate of Security, and Hanif Atmar, the interior minister, from the government of Hamid Karzai:

[Saleh] has said little about why he quit, other than that the Taliban attack on last week's peace jirga or assembly in Kabul was for him the "tipping point".... According to Saleh's aides, the final straw came last Sunday when Karzai apparently questioned his loyalty during a stormy meeting at the presidential palace, appearing not to believe Saleh and Atmar's account of how two insurgents armed with rocket launchers, one dressed as a woman, were able to get so close to a meeting of 1,600 national leaders.

Saleh's colleagues say that Karzai even accused the two men of a plot with the Americans and the British to wreck his peace plan.

Saleh's friends say that, because Karzai believes NATO is unable to deal with insurgent sanctuaries on the eastern border, he is looking for an alternative strategy: rather than use western support to "harden" Afghanistan against its neighbour, he is instead striking a less robust attitude to Pakistan and the Taliban.

This has gotten surprisingly little attention in the American press, but on Friday Dexter Filkins of the New York Times added a few more details:

Two senior Afghan officials were showing President Hamid Karzai the evidence of the spectacular rocket attack on a nationwide peace conference earlier this month when Mr. Karzai told them that he believed the Taliban were not responsible.

“The president did not show any interest in the evidence — none — he treated it like a piece of dirt,” said Amrullah Saleh, then the director of the Afghan intelligence service.

....Underlying the tensions, according to Mr. Saleh and Afghan and Western officials, was something more profound: That Mr. Karzai had lost faith in the Americans and NATO to prevail in Afghanistan....“The president has lost his confidence in the capability of either the coalition or his own government to protect this country,” Mr. Saleh said in an interview at his home. “President Karzai has never announced that NATO will lose, but the way that he does not proudly own the campaign shows that he doesn’t trust it is working.”

According to Boone, Karzai's change of heart has been a year in the making: "His views were crystallised in the aftermath of last year's election when millions of votes were found to be fraudulent; Karzai blamed the US, UK and United Nations for the fraud."

I haven't seen too much more reporting about this, so it's hard (as usual) to decipher what's going on. Part of it probably has to do with tribal loyalties: Saleh is a Tajik and a longtime foe of the primarily Pashtun Taliban. Karzai, as an ethnic Pashtun, is more open to finding some kind of working compromise with them. Beyond that, Karzai probably has some quite reasonable doubts about both America's willingness to stay in Afghanistan very much longer and about the prospects for our counterinsurgency strategy to defeat the Taliban. Given that, some kind of compromise with the Taliban and with Pakistan might be his most realistic hope for survival right now.

Anyway: read both pieces. As always, it's too murky to know for sure what's happening, but one thing seems fairly clear: Gen. Stanley McChrystal's upcoming military operation (or "process" as it seems to be called now) in Kandahar is pretty much our last chance to demonstrate that we can deal with the Taliban effectively. If it doesn't work, American troops are going to pull out and Karzai is going to go his own way. And right now, given that the strategy depends not just on defeating the Taliban but on turning things over quickly to plainly unqualified Afghan troops, the odds of success don't look so good. My prediction: a couple of Friedman Units from now, Obama and Karzai are going to find some colorably face-saving way to declare that America has done everything it can and it's time for Afghans to take responsibility for their own future. Our longest war will draw to a sputtering close with neither victory nor defeat, and a decade from now we'll all be wondering why we were ever there.

UPDATE: Jonathan Bernstein wants to know what I meant by the last sentence:

Wow. I'm not even to the point of disagreeing — just real surprised. I guess I'd like to hear more of what he's thinking. Is it that in a decade, the September 11 attacks will fade from memory? That they'll be remembered, but we'll think less of their importance? That we'll think the decision to go into Afghanistan didn't follow logically from those attacks? That we'll think that deployment in Afghanistan made sense at first, but that the troops should have been gone as soon as the Taliban was first defeated? And one of those won't just be a fringe left (or right) position, but what "we'll all" be wondering?

I didn't mean to be cryptic. I was just heading out to lunch when I finished up this post. Sorry.

Obviously I don't mean that we'll have forgotten 9/11. All I meant was that pretty much everything we've done in Afghanistan has been a wasted effort aside from kicking out al-Qaeda after the initial invasion. In the fairly near future, I suspect that we're going to wonder what we were doing there for a decade after that and what we thought we could accomplish. Needless to say, though, Stanley McChrystal could yet prove me wrong.

Stimulating the Economy

| Sun Jun. 13, 2010 12:35 PM EDT

Paul Krugman has been waging a one-man war recently against the forces of darkness that think the United States needs to cut back spending because its debt level is too high. (See, for example, here, here, here, here, here and here. And that's just the blog.) Generally speaking, I'd say he's got by far the better of the argument: right now, inflation is low (as are inflationary expectations), interest rates are low, unemployment is high, the output gap is high, and consumers simply don't seem to have the wherewithal to drive a strong recovery in the short-term. A healthy dose of fiscal stimulus would almost certainly do the economy a lot of good, and almost equally certainly, would have a very modest effect on future debt levels.

A lot of conservatives disagree, but recently Raghu Rajan went even further: not only doesn't he support further fiscal stimulus, he doesn't even support keeping interest rates low. This seems crazy, and his supporting arguments don't seem very impressive either. However, he does make one point that seems worth considering:

A growing number of studies that suggest that banks (and other financial institutions) tend to take more risk, both on the asset side and through leverage, when interest rates are kept low for a long time. Clearly, banks search for yield when rates are low. I have papers with Doug Diamond that suggest that if rates are expected to be low for a sustained period (and the Fed intervenes to provide liquidity whenever the market tightens), banks also take on a lot of liquidity risk by borrowing short term and investing in illiquid assets.

Yes, none of this risk taking and illiquidity seeking seems excessive just now, especially because the European crisis has put a dampener on exuberant markets, and because banks are still nursing their past wounds. But we must remember that there was talk that covenant lite loans were back in vogue before the European problem hit us. Once the anxiety about Europe dies down, covenant lite loans, and worse, will be back. Also, we must remember that risk taking did not seem excessive in the run up to the crisis, until we learnt the banks had gone overboard.

It's true: low interest rates have the usual macroeconomic effect that we all know about, but they also have a direct effect on the psychology of the financial industry that might not be especially positive if they're maintained over a long period. It's hardly enough to change my mind on the basic issue at hand, but it's worth a thought or two.

As for the larger question, my only beef with Krugman and his supporters is this: their basic argument is that we need to spend more now but rein in spending in the long term. I agree. The problem I have is that while they give short-term stimulus plenty of ink/pixels, only rarely and in passing do they mention the need for long-term fiscal restraint. I understand why (or at least I think I do): it's just not something that deserves a lot of mental bandwidth when your main fight is over immediate stimulus and you're fighting with people who not only don't want any, but who are actively arguing for cutting spending. Still, I think this is a mistake. The short-term stimulus message would go down a lot easier if all of us demonstrated in a little more detail and a little more depth that we really, truly accept that there are some difficult decisions to be made down the road and we're willing to talk about how to make them. That means Social Security, Medicare, defense spending, and taxes. Conservatives might not be willing to get serious about all this stuff, but we liberals should be.

Why is Soccer So Violent?

| Sun Jun. 13, 2010 11:28 AM EDT

World Cup play started on Friday, and that seemed like a good excuse to finally read Franklin Foer's How Soccer Explains the World. It's not quite what I expected, but in a way it's better than I expected because part of the book tackles a subject that's long fascinated me: why the hell is soccer such a violent sport? Not the game itself, of course, but the fans. Why, unlike most other sports (and unlike all American sports), does it routinely inspire riots and drunken brawls and roving gangs of hooligans — and even the odd war or two? Ilya Somin suggests the obvious answer, namely that soccer is strongly associated with nationalism, but that can hardly be the whole explanation since local teams often inspire the same kind of behavior when they play crosstown rivals. David Post picks it up from there:

Another way to say what he’s saying: people around the world care about soccer in a way that is far deeper than the way most US fans care about their sports. It touches a much, much deeper chord, and, as a result, is much more bound up with all those things people care deeply about — religion, and politics, and honor, and the rest of it. I’ve said it before: soccer’s like life, and people care about it the way they care about their lives. Why that is so is a very interesting question — I believe it is inextricably tied in some way to the very nature of the game itself, but I can’t yet quite articulate the full theory for that. But to those of us who love soccer — all 2.75 billion or so of us — that’s not a bug, that’s a feature.

OK, but still: Why? National soccer teams inspire lunatic nationalism, but as Foer so colorfully describes, local teams routinely inspire lunatic ethnic, religious, racial, and political fury too. Why? Until fairly recently soccer was very much a working class sport, but it's hardly unique in that regard. So what is it about soccer that seems to inspire not just loyalty or even fanaticism, but so often serious violence and (in much of the world) endemic corruption? Comments are open for uninformed speculation.

Beginning of the End for the Tea Party Movement?

| Sat Jun. 12, 2010 5:09 PM EDT

The Washington Post's Amy Gardner reports that the tea party movement, under the strain of actual real-life politics, is starting to crack up:

The national tea party movement has never had a central organization or single leader; in fact, it has boasted the opposite. But Tuesday's primary results provided fresh evidence of the amorphous network's struggle to convert activist anger and energy into winning results. Frustrated and lacking agreement on what to do next, self-identified tea party leaders say the movement may be in danger of breaking apart before it ever really comes together.

...."No one owns the tea party brand, and that's kind of the problem," said Brendan Steinhauser, grass-roots director for FreedomWorks, which organizes tea party groups....Judson Phillips, founder of another national organization, Tea Party Nation, said some activists are starting to act like mainstream politicians. "It's supposed to be something other than politics as usual, but some of these folks are only looking out for themselves and not for the country."

....Even more demoralizing for activists, perhaps, is that disapproval of the tea party is at an all-time high, according to a new Washington Post-ABC News poll. The poll showed that 50 percent of Americans have an unfavorable view of the movement, compared with 39 percent in March.

Well, that's just a damn shame, isn't it? Who could have predicted that a cranky, leaderless movement with no real goals and driven mostly by an inchoate sense of persecution, aggrievement, and Sarah Palin hero worship would eventually turn in on itself and splinter into a thousand embittered little pieces?

Obama and the Oil Spill

| Sat Jun. 12, 2010 1:52 PM EDT

How much blame does the Obama administration deserve for its handling of the BP oil spill? That's been a little hard to get a firm handle on, but two recent pieces, one by Rolling Stone's Tim Dickinson and another by McClatchy's Steven Thomma, lay out the bill of particulars. First up, here are some excerpts from Dickinson's piece that describe the three biggest issues:

  • Interior Secretary Ken Salazar didn't clean up the Minerals Management Service aggressively enough: Scientists like [Rick] Steiner had urgently tried to alert Obama to the depth of the rot at MMS. "I talked to the transition team," Steiner says. "I told them that MMS was a disaster and needed to be seriously reformed."...."People are being really circumspect, not pointing the finger at Salazar and Obama," says Rep. Raul Grijalva, who oversees the Interior Department as chair of the House subcommittee on public lands. "But the troublesome point is, the administration knew that it had this rot in the middle of the process on offshore drilling – yet it empowered an already discredited, disgraced agency to essentially be in charge."

  • The Obama administration allowed BP too much control: Instead of seizing the reins, the Obama administration cast itself in a supporting role, insisting that BP was responsible for cleaning up the mess. "When you say the company is responsible and the government has oversight," a reporter asked Gibbs on May 3rd, "does that mean that the government is ultimately in charge of the cleanup?" Gibbs was blunt: "No," he insisted, "the responsible party is BP." In fact, the National Oil and Hazardous Substances Pollution Contingency Plan – the federal regulations that lay out the command-and-control responsibilities for cleaning up an oil spill – makes clear that an oil company like BP cannot be left in charge of such a serious disaster.

  • The White House wasn't transparent enough: From the start, the administration has seemed intent on allowing BP to operate in near-total secrecy. Much of what the public knows about the crisis it owes to Rep. Ed Markey, who chairs the House Subcommittee on Energy and the Environment. Under pressure from Markey, BP was forced to release footage of the gusher, admit that its early estimates put the leak as high as 14,000 barrels a day and post a live feed of its undersea operations on the Internet – video that administration officials had possessed from the earliest days of the disaster. "We cannot trust BP," Markey said. "It's clear they have been hiding the actual consequences of this spill."

And here is Thomma's summary of his own story, which describes not the administration's reponse to the spill but its decision during the previous year to open up more offshore drilling sites. According to Thomma, the process was flawed:

  • Obama thought that funneling information through White House "czars" such as energy and environment adviser Carol Browner would get him all the information he needed;
  • He failed to drill into the government bureaucracy to test that information. He didn't, for example, ask about the Interior Department's Minerals Management Service, which in 2000 had prepared a report on the dangers of deepwater drilling that proved to be eerily predictive of what happened in the Gulf. The MMS regulates offshore drilling;
  • He never talked to the Coast Guard about its 2002 oil spill drill in the Gulf, or to the man who ran it, Adm. Thad Allen, who later would oversee the response to the Deepwater Horizon spill.
  • He didn't reach out to outside experts, such as the National Academy of Engineering, to question claims that deepwater drilling technology was dependable.

The most compelling criticism, to me, is that given the monumental dysfunction within MMS Salazar should have been far more aggressive about cleaning up the agency. Beyond that, I'm just not sure. There are thousands of possible disasters waiting to happen in the world, and whenever one of them finally does happen you can dig up dozens of people who have been warning about it. So while it's worth reading Dickinson's piece to get the big picture of what happened, it's also worth keeping in mind that prior to the Deepwater Horizon disaster the industry had gone 30 years without a platform blowout. There really was a good track record there.

Overall, I think my take so far is that the Obama administration isn't especially culpable for the blowout itself and isn't especially culpable for BP's inability to cap the well. There's just no magic bullet there. But the cleanup effort is another story. It's early days yet, but my sense is that the Obama team really does seem to have dropped the ball here. They've trusted BP too much; they've interfered with both scientists and journalists trying to get a handle on what's going on; and they still don't seem to have a real handle on either the scope of the spill or how to respond to it. This isn't the downfall of a presidency that conservatives are all gleefully anticipating, but it certainly feels like something Obama ought to have a better handle on by now.

Advertise on

Where Will Recovery Come From?

| Sat Jun. 12, 2010 11:17 AM EDT

The LA Times does a good job framing yesterday's economic news:

Retail sales unexpectedly tumbled in May in the biggest drop in eight months, raising a vexing question for the nation's still-shaky economy: If consumers are not going to lead the way back to prosperity and additional stimulus spending by the government isn't likely, what's going to keep the recovery alive?

Last month, Americans slashed spending on everything from cars to clothing to building materials, the Commerce Department reported Friday. Auto sales fell almost 2%, a major drop for a single month.

I'm probably oversimplifying, but whenever I see news like this I keep thinking the same thing: the rich can only do so much. Recovery has to be built primarily on the backs of middle class consumer spending, and the only way for that to rise steadily is for (a) employment to go up, (b) wages to go up, (c) borrowing to go up, or (d) savings to go down. But employment is forecast to remain sluggish, wages are pretty flat and likely to remain so (thanks to high unemployment), consumers are still deleveraging, and although savings rates have recovered, they need to recover more to get back anywhere near historical levels. Add to that the likelihood that housing prices are going to drop some more now that the new home buyer's tax credit has expired, and there's really nothing left to drive long-term economic expansion. The millionaire class may be recovering nicely, but they just don't spend enough to do the job on their own.

Friday Cat Blogging - 11 June 2010

| Fri Jun. 11, 2010 2:09 PM EDT

I took these pictures a couple of days ago. Both Inkblot and Domino were absolutely entranced by something in this bush in our backyard, but for the life of me I can't figure out what it was. They stared, they got up on their hind legs and thought about climbing up the trunk, they meowed, they even ignored the camera. And me? I looked and looked and couldn't see anything. Maybe it was a cleverly camouflaged green grasshopper. Or maybe it was something from the cat dimension. Hard to say.

And I have a special extra treat for you today! Would you like to see a picture of the headquarters of Mother Jones' global publishing empire in beautiful downtown San Francisco? No? Well how about a picture of a cute little girl holding a cute little orange kitten inside the headquarters of Mother Jones' global publishing empire in beautiful downtown San Francisco? That's what I thought. Just click here.

UPDATE: Aha! Turns out I wasn't looking up high enough. But a few minutes ago Inkblot was outside looking entranced once again, and I found what he was looking at. Click for photographic evidence of nature red in tooth and claw.

Calling a Truce in the Culture Wars

| Fri Jun. 11, 2010 2:01 PM EDT

Mitch Daniels says the next president will "have to call a truce on the so-called social issues. We’re going to just have to agree to get along for a little while" until the economy improves. Ramesh Ponnuru comments:

A lot of people will cheer that statement: Truces are usually popular, and most people see the economic issues as more important than the social ones at this moment. But I'm not sure how a truce would work. If Justice Kennedy retired on President Daniels's watch, for example, he would have to pick someone as a replacement. End of truce.

Point taken. But the funny thing is that we already have a president who's called the truce Daniels wants to see: Barack Obama. That doesn't mean no one cares about social issues anymore, it just means that Obama has done everything humanly possible to keep them dialed down, both during the 2008 campaign and during his 17 months in office. And for the most part he's succeeded.

(For better or worse. His sluggishness on DADT and other LGBT issues, for example, is directly due to his much broader desire to avoid culture war issues and concentrate instead on things like economic stimulus, healthcare, financial reform, and foreign policy.)

Obama's strategy, in general, is to (a) use soothing rhetoric that acknowledges both sides in culture war issues, and (b) do his best to avoid taking substantive action on them. So far he's managed it pretty well.

Chart of the Day: The World's Worst Brand

| Fri Jun. 11, 2010 12:42 PM EDT

Via Felix Salmon, this chart from BrandIndex shows the changing fortunes of three global companies that have fallen on hard times lately. The score comes from responses to the question "If you've heard anything about the brand in the last two weeks, was it positive or negative?" BP is still lagging a bit behind long-term champ Goldman Sachs, but they're catching up fast. Give it another few days and they should be the least popular brand in the world.