Mojo - October 2005

Wal-Mart's Strategy

| Thu Oct. 27, 2005 5:22 PM EDT

In the New Republic today, Clay Risen has a good analysis of the Wal-Mart memo—describing ways to reduce the company might reduce its health care costs while appearing to care more about its workers—that surfaced yesterday:

The memo is the result of a study carried out in coordination with McKinsey, the elite consulting firm--and it shows in its fantastic grasp of [Wal-Mart's] numbers and abysmal conception of the workers who make them possible. One proposal would replace the current 401(k) program, into which the company puts a fixed percentage of the employee's wage, with a matching program, in which the company's contribution is equal to the employee's (this on top of the proposed cut in company contributions, from 4 percent to 3 percent). From a cost-savings point of view, this is a brutally efficient strategy--after all, the average Wal-Mart employee makes $17,500 a year. How many are going to set aside 3 percent of that for retirement? What's amazing, though, is that the memo's author, Susan Chambers, seems to believe that employees would actually like this reduction in benefits, because, for those who can somehow afford to take full advantage, it "would help Associates better prepare for retirement."

 

Then there is the proposal to shift all employees into health-savings plans, replacing traditional insurance with tax-free bank accounts in which both employees and the company set aside money; they then use that money to pay for doctor visits, prescriptions, and so on. Again, from a coldly rational point of view, this makes certain sense: The more financial responsibility employees bear in their health-care costs, the less they are likely to spend. The problem is that, again, poorly paid employees are unlikely to make the sort of contributions necessary to cover expenses. Moreover, it's much easier for the company to quietly adjust its own contributions to employee health downward, a fact sneakily acknowledged by the memo (though instead of proposing a check it merely recommends more p.r.: "Wal-Mart will have to be sophisticated and forceful in communicating this change").

That's the crux of it: Wal-Mart will use some nifty gimmicks to slash its workers' health and retirement benefits and then just pretend that this counts as an improvement. Ultimately, of course, this won't work. Wal-Mart's critics have bullshit detectors like few other groups of people on the planet, and always, always, always assume the worst about the store. The company will never appease its "well-funded and well-organized" attackers until it actually starts offering substantial benefits for workers. Although, do note, Wal-Mart executives are probably paranoid that the critics want to destroy the company altogether, rather than merely improve the lives of its workers, so maybe Wal-Mart thinks that there are no steps ever worth taking—because its enemies will never be appeased. Surely it doesn't help when lunatic lefties start writing posts like "Abolish the Corporation," either.

 

Alternatively, of course, Wal-Mart could solve its problems by lobbying for some sort of government-run health insurance, which would relieve the company of the burden of covering workers in the first place. It probably will end up doing this, although it won't lobby for single-payer, but rather the GOP's plans for government-financed Health Savings Accounts, high-deductible insurance, and tax credits, along with a phase-out of the employer-health deduction; two steps that I think would be awful for actual people, but would let Wal-Mart and other big companies wash their hands of handling health insurance without having to pay taxes for some sort of single-payer system.

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Genocide on the Increase

| Thu Oct. 27, 2005 3:32 PM EDT

Eric Reeves has a new report on Darfur with a simple conclusion:

[T]here is no possible escape from the most basic truth in Darfur: Khartoum's National Islamic Front, ever more dominant in the new "Government of National Unity," is deliberately escalating the level of violence and insecurity as a form of "counter-insurgency" warfare, with the clear goal of accelerating human destruction among the African tribal populations of the region.

In failing to respond to this conspicuous and now fully articulated truth, the world is yet again knowingly acquiescing in genocide. But as the shadows of Auschwitz and Treblinka, Bosnia, Cambodia, and Rwanda fall more heavily over Darfur, we cannot evade this most shameful truth: we know---as events steadily, remorselessly unfold---more about the realities of ethnically-targeted human destruction in Darfur than on any other previous such occasion in history. So much the greater is our moral disgrace.The international silence over Darfur isn't restricted to any one particular country—Europe has always tolerated genocide, while China would rather do oil business in Sudan than worry about the killings; no one looks good here—but the United States' role deserves a close look as well. In the New Republic today, Reeves has a piece on the Bush administration's appeasement of the National Islamic Front genocidaires in Khartoum, especially its cooperation over counterterrorism issues. (Not to mention the fact that the State Department explicitly waived longstanding U.S. sanctions on Sudan to allow the NIF to hire an American public relations firm. Boost its image and all. Cute.) The closing grafs:

[T]his strategy of appeasement misunderstands the psychology of the NIF's leaders. Their track record suggests that the more weakness they sense from the international community, the more emboldened they become--in both Dafur and southern Sudan. Hence, it is probably no coincidence that the Bush administration's recent conciliatory gestures towards Khartoum have yielded such counterproductive results.

To America's credit, it has made substantial contributions of aid to humanitarian efforts in Sudan; and there is no question that the U.S. has been the most generous donor nation, even as other wealthy countries such as France, Japan, and the oil-producing Arab countries have been disgracefully stingy. But charity alone will not produce peace in Sudan; force (diplomatic and perhaps military too) will be needed as well. As long as our appeasement of Khartoum continues, the genocide will go on. "Not on my watch"? Not even close.

What "Middle Course" on Iraq?

| Thu Oct. 27, 2005 3:10 PM EDT

I see John Kerry is now calling for the U.S. to start withdrawing troops from Iraq based on a timetable. Or "benchmarks." Or whatever it is. One strategist says that "phased withdrawal" is the new consensus; a balance "between anti-war activists who want an immediate pullout and Bush's stay-the-course policy." Eh, this middle course is kind of a charade. Iraq is on one of two possible trajectories right now—either the situation is such that the military can make a difference by muddling through and stabilizing the country; or it's all about to implode and there's nothing we can do to stop it. If it's going to implode no matter what, then we get out as soon as humanly possible. No timetables. No benchmarks. Just. Go. Do what you need to do to get out—make sure, for instance, that the soldiers have enough force protection to withdraw without a bloodbath—and leave immediately. Not one cent more or one more dead soldier for a hopeless situation.

The main argument for Kerry-style "benchmarks"—i.e., withdrawing slowly based on an artificial timeline—is that somehow a gradual withdrawal will "undermine the insurgency," as Kerry says, by peeling off Sunni nationalists from the extremist al-Qaeda types. Well, maybe, maybe not. At this point we just don't know if the insurgency will stay together long enough to kill off the new government or what once we start leaving. Maybe the strange Baathist-Islamist alliance will only crumble long after the Sunni-Shiite civil war ends. Nor is there any reason to believe that a gradual withdrawal will "frighten" Iraq's leaders into taking security seriously and compromising with each other. Maybe it will, but at this point, I wouldn't pretend to predict how Iraqis will react to our moves. Maybe if they see that we're drawing down on a schedule, all the different factions will lock and load and get ready for what they see as the coming civil war, creating a self-fulfilling prophecy.

The final argument for Kerry's "benchmark" approach is that withdrawal based on an artificial calendar will somehow motivate the Iraqi National Army into fighting for themselves rather than relying on U.S. protection. That's insane; the U.S. tried the same thing with Iraqi troops in Mosul in 2004—letting the Army stand up for itself without help—and insurgents quickly overran the city. The Iraqi Army is unmotivated primarily because they don't have a legitimate government worth fighting or dying for, not because we're sticking around for too long. Badr militiamen will fight for Shiite fundamentalism; not a bumbling "democratic" National Assembly. Kurdish peshmerga will fight for Kurdistan, not an artificial multiethnic country. And so on. That problem won't change if we announce that we're leaving, and they're going to have to stand up as we stand down.

If the U.S. starts withdrawing based on artificial "benchmarks," and suddenly something goes horribly wrong, it's not like it can realistically send more troops back in. The backlash would be immense. On the substance, then, this so-called "middle position" Kerry's trying to chart is meaningless, although I can see why he's making it for political reasons—he doesn't want to stay in Iraq, but he doesn't want to seem like a far lefty, either. Well, that's him, he's a politician. I think there are three options: 1) Either stay the course, aim for stability, and don't announce any timetables (and hope we actually have enough troops to stay the course; 2) aim for Yemen-style "managed chaos" in Iraq by bolstering the militias and letting them keep order; or 3) get out immediately, and stop causing needless deaths, because Iraq is hopeless, and nothing we do can make any difference, now or ever.

Miers Withdraws

| Thu Oct. 27, 2005 2:12 PM EDT

Not much to say about Harriet Miers' withdrawal today. She would have been a terrible Justice, very likely to have helped hand the president far more executive power than is really a good idea. The main question, of course, is who comes next. The main danger will be that it's an equally terrible judge, from a substantive viewpoint, who just so happens to have "qualifications," and he or she ends up sailing through the Senate.

"Is southern Iraq only hell with flies?"

| Tue Oct. 25, 2005 8:55 PM EDT

The British Prospect this month has an interesting article by a former deputy governor of two southern Shiite provinces in Iraq, Rory Stewart. Here's his description of the new Iraq—and for context, these are the most stable bits of the country:

Despite their intolerance and violent methods, the new politicians are often young technocrats with a confident and articulate programme of anti-corruption and economic development. Their religious beliefs can be an important moderating influence in Shia society. So too are wider mechanisms of social control, confidence and moral concern. Thousands of Shia have been killed by Sunni terrorists in Iraq but the Shia community has generally refused to retaliate. Restraint has been shown not only by Sistani but also by political leaders at a district level. The leaders I met on my last visit had stopped complaining that they were the victims of a Zionist plot and seemed realistic, tolerant and humorous about progress. They had begun to find the capacity to co-operate with each other and lay the foundations for government and security.

The new order in southern Iraq is, in short, hard to define. It is an improvement on the political exclusion and sadistic inhumanity of Saddam and has a great deal to teach the Sunni areas about prosperity, security and politics. But it is also reactionary, violent, intolerant towards women and religious minorities and uncooperative with the coalition. The new leaders have dark histories and dubious allies; they enforce a narrow social code and ignore the rural areas.

Southern Iraq is a democracy but we should not assume that this or any of the other terms which we deploy frequently about Iraq—insurgency, civil society, civil war, police force or even political party— mean what they do in Britain. There have been elections, but the government is not responsive to or respectful of human rights. In many ways it resembles Iran, but it is not governed by clerics. Its militias are not infiltrators, they are an integral element of the elected parties. The new government is oppressive, but has a popular mandate; it is supported by illegal militias, but it has improved security.It's a good piece all around, not much of a screed either way. From all accounts, meanwhile, the southern provinces are strongly anti-occupation (see also this poll)—they're grateful that the U.S. toppled Saddam's regime, but not much else—and would happily prefer to see American troops leave if not for concerns that the occupation is the only thing deterring a full-blown civil war in Iraq.

New at Mother Jones

| Tue Oct. 25, 2005 3:39 PM EDT

Outing CIA Agents
By Steve Weissman
Valerie Plame Meets Philip Agee

Where Chaos is King
By Mark LeVine
Who Benefits from Disorder in the Middle East

Gentrifying Disaster
By Mike Davis
In New Orleans: Ethnic Cleansing, GOP-Style

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More on the Niger Memos

| Tue Oct. 25, 2005 3:11 PM EDT

Laura Rozen's story in the American Prospect today, about Italian intelligence and Niger uranium forgeries, has a lot of twists and turns, but here's the quick version. In late 2001 the CIA had rejected as "suspect" memos peddled by Italian intelligence, SISMI, that suggested that Iraq was trying to acquire uranium from Niger. (The memos are now known to be forgeries.) The Italian government, desperately trying to prove its relevance to the U.S., then tried to get these memos directly to the White House. In September 2002, SISMI chief Nicolo Pollari met with Stephen Hadley, then assistant to Condoleeza Rice and now Bush's National Security Adviser, in Washington. The Niger memos showed up in the U.S. one month later. Rozen gets at why this all matters:

What may be most significant to American observers, however, is the newspaper's allegation that the Italians sent the bogus intelligence about Niger and Iraq not only through traditional allied channels such as the CIA, but seemingly directly into the White House. That direct White House channel amplifies questions about a now-infamous 16-word reference to the Niger uranium in President Bush's 2003 State of the Union address -- which remained in the speech despite warnings from the CIA and the State Department that the allegation was not substantiated.
Moreoever, the Hadley meeting came only a month before Bush's speech in Cincinnati, in which he claimed that Iraq had been caught trying to purchase 500 tons of uranium from Africa. The CIA had told Hadley to strip out the line, and he did, but the White House received the memos on October 9th, and the uranium claim reappeared later on, most infamously in Bush's 2003 State of the Union address. Meanwhile, there's the all-important question of where the memos came from in the first place. Did SISMI really push them on the White House in order to make themselves "relevant," and did the middleman who acquired the memos from a mole in Niger, Rocco Martino, really do it for "mercenary reasons," as is alleged? There's also this from Rozen's story:
According to the Repubblica account, Martino was a former carabinieri officer and later a Sismi operative who by 1999 was making his living based in Luxembourg, selling information to the French intelligence services for a monthly stipend. The story goes on to explain how Martino renewed his contacts with Sismi officer Antonio Nucera, an old friend and former colleague, who was a Sismi vice-captain working in the intelligence agency's eighth directorate, with responsibilities involving weapons of mass destruction and counter-proliferation.

Precisely how Nucera, Martino, and two employees of the Niger embassy in Rome came together sometime between 1999 and 2000 to hatch the Niger forgeries plan is still somewhat mysterious. The newspaper's reports that Nucera introduced Martino to a longtime Sismi asset at the Niger embassy in Rome, a 60 year-old Italian woman described in La Repubblica only as "La Signora." Sismi chief Pollari, who granted the newspaper an interview (as he tends to do when he fears that breaking news could taint his agency), suggests that Nucera simply wanted to help out Martino, his old friend and colleague. See here and here for more.

Fighting the Brain Drain

| Tue Oct. 25, 2005 2:20 PM EDT

The New York Times has a very good piece today on the "brain drain" phenomenon among developing countries; wherein the most talented and educated workers in the Third World emigrate to the United States or Europe or other wealthy countries, thus leaving their home countries with very little in the way of human capital, and no way to exit the vicious cycle that caused people to leave in the first place:

Most experts agree that the exodus of skilled workers from poor countries is a symptom of deep economic, social and political problems in their homelands and can prove particularly crippling in much needed professions in health care and education.

Jagdish Bhagwati, an economist at Columbia University who migrated from India in the late 1960's, said immigrants were often voting with their feet when they departed from countries that were badly run and economically dysfunctional. They get their government's attention by the act of leaving….

But some scholars are asking whether the brain drain may also fuel a vicious downward cycle of underdevelopment - and cost poor countries the feisty people with the spark and the ability to resist corruption and incompetent governance.Remittances back home from expatriate workers make up some of the difference—and these payments are usually spent more effectively than foreign aid—but not enough. Interestingly, the "powerhouses" of the developing world—China, India, Indonesia, Brazil—don't suffer from brain drain, with less than 5 percent of their skilled citizens living in OECD countries.

Some suggest that OECD countries should restrict skilled immigration. One response would be that in some sense we already do; strict licensing requirements here in the United States already put up staggeringly high informal tariffs on the importation of doctors, lawyers, economists, and other professionals. Quick example: Several years ago the federal government paid New York hospitals $400 million to train fewer doctors out of concern for "oversupply"; blue-collar protectionists never had it so good. These barriers, by the way, dwarf our rather small tariffs on goods that "free traders" tend to worry so much about. But that's only part of it. On the other hand, the United States, Britain, Canada, and Australia really do actively seek out many other sorts of skilled workers from abroad, especially in more technical fields, and this seems to hurts developing countries the most.

So what to do? Only a handful of countries have been successful in luring their emigrés back home. Bhagwati has suggested that developing countries should tax their expatriates. Creating networks among entrepreneurs might offer one solution—I know of at least one example in Latin America where the government sets up links between researchers abroad and workers at home to share knowledge. Set up something like Craigslist for really smart expatriates. Ultimately, the best thing to do would be to figure out how to get the poorest countries in the world to start growing—just as China, India, Indonesia, and Brazil have done—but the first person who figures out a fail-proof way to do that will get a very nice prize indeed.

Cheney Goes For the Loophole

| Tue Oct. 25, 2005 12:46 PM EDT

As reported previously, the White House is now actively trying to put loopholes into the McCain amendment that would try to prevent detainee abuse and regulate interrogation tactics, by exempting the CIA from all regulations:

Stepping up a confrontation with the Senate over the handling of detainees, the White House is insisting that the Central Intelligence Agency be exempted from a proposed ban on abusive treatment of suspected Qaeda militants and other terrorists.
Frankly, passing no amendment at all would be better than passing an amendment that had this loophole—which would then give the congressional seal of approval to abuse and torture by CIA agents. Read this ACLU report to see a list of detainees that have been killed in U.S. custody. In what follows, "OGA" (Other Government Agency) refers to the CIA:
A 27-year-old Iraqi male died while being interrogated by Navy Seals on April 5, 2004, in Mosul, Iraq. During his confinement he was hooded, flex-cuffed, sleep deprived and subjected to hot and cold environmental conditions, including the use of cold water on his body and hood. The exact cause of death was "undetermined" although the autopsy stated that hypothermia may have contributed to his death. Notes say he "struggled/ interrogated/ died sleeping."

An Iraqi detainee (also described as a white male) died on January 9, 2004, in Al Asad, Iraq, while being interrogated by "OGA." He was standing, shackled to the top of a door frame with a gag in his mouth at the time he died. The cause of death was asphyxia and blunt force injuries. Notes summarizing the autopsies record the circumstances of death as "Q by OGA, gagged in standing restraint."

A detainee was smothered to death during an interrogation by Military Intelligence on November 26, 2003, in Al Qaim, Iraq. A previously released autopsy report, that appears to be of General Mowhoush, lists "asphyxia due to smothering and chest compression" as the cause of death and cites bruises from the impact with a blunt object. New documents specifically record the circumstances of death as "Q by MI, died during interrogation."

A detainee at Abu Ghraib Prison, captured by Navy Seal Team number seven, died on November 4, 2003, during an interrogation by Navy Seals and "OGA" A previously released autopsy report, that appears to be of Manadel Al Jamadi, shows that the cause of his death was "blunt force injury complicated by compromised respiration." New documents specifically record the circumstances of death as "Q by OGA and NSWT died during interrogation."Maybe this is what Dick Cheney meant when he told John McCain that the president needs "maximum flexibility" for dealing with suspected terrorists. No doubt those detainees all gave quality information after being killed.

Fed Chairman Fun

| Mon Oct. 24, 2005 9:17 PM EDT

This isn't really the place to come for Federal Reserve commentary, but maybe I can provide a few knee-jerk lefty complaints about the new Fed chief, Ben Bernanke. All the center-left blogs like him, and indeed, he's better than Andy Card, but this looks like more of the same. He's a fan of "formal inflation targeting," eh? As best I can tell from his 1999 spat with James Galbraith, Bernanke doesn't take this to mean that the Fed should sacrifice everything else under the sun—including employment growth—at the altar of Always Low Prices, but Gerald Epstein argues here that that's what inflation targeting tends to mean in practice. That inflation-obsessed monetary theorists in the U.S. wrongly insisted that the rate of unemployment could never go below 6.5 percent during the 1980s, letting wages stagnate and poverty rise, makes Scooter Libby's high crimes and misdemeanors look rather flimsy in comparison.

Moreover, Epstein argues, moderate rates of inflation, up to about 20 percent, "have no predictable negative consequences on the real economy," so perhaps the Fed obsession is misguided after all. As far as I can tell, no one seems to know for sure whether or not inflation would hurt the poor, but that's probably not to question to ask, instead let's debate: what sort of monetary policy would be better for the least well-off, and the rest of us? Or rather: Why not have the Fed stop fretting about inflation—within limits—and instead focus on promoting full employment, investment, and GDP growth? Good question. The answer is to follow the money:

One likely explanation is that a focus on fighting inflation and keeping it low and stable is in the interest of the rentier groups in these counties. Epstein and Power (2003) present new calculations of rentier incomes in the OECD countries supporting the view that in many countries, higher real interest rates and lower inflation increase the rentier shares of income.
Ah, rentiers. The argument against Epstein, I take it, is that theoretically a central banker just can't use inflation to boost employment because people aren't dumb, they'll soon catch on to what the bank's doing and plan accordingly, nothing will change when inflation strikes, and soon we're on the path towards stagflation. Hence the virtues of a hawk like Greenspan—or Bernanke. In reply, the dying herd of old Keynesians might say eh, this isn't really a concern, since the real inflationary dangers come not from full employment, which is usually a good thing, but from stagnant growth, since during a slowdown monopolistic enterprises will start raising prices to recoup their fixed costs. Certainly Big Pharma and Big Insurance have been doing just that recently, so score one for the dying herd.

I'm not even fractionally smart enough to know who's right in all of this, so I'll just leave it at that and admit that my bias is towards Epstein. His suggestion for "real targeting" makes sense on the surface, although for the Fed to be truly democratic, the whole institution itself will probably have to be rejiggered so that ordinary citizens get actual input into central bank decision-making. That obviously won't happen in my lifetime, but surely the least we can do is be bitter about it, no?