05.15.09
Posted in Social, Policy at 6:21 pm by steve
There was a terrific graph in the Wall Street Journal yesterday (pC1). It showed pay in the financial sector normalized against pay in all other non-farm endeavors over the last century. A hundred years ago the ratio was around 1.5. For every dollar people in other non-farm jobs earned, people in the financial sector earned a dollar and a half. This ratio climbed until the early 1930’s. Then it levelled off around 1.6. In 1940 it fell precipitously to 1.2. It continued to drift downward until 1980 when it was almost at parity. Since 1980 it has risen steeply. In 1998 it exceeded 1.6. And recently it has exceeded 1.7 - the highest level in at least a century. The financial industry has been seeing outsized pay for almost the last three decades.
What is one to think of this? On the one hand, we note that with the expansion of America’s middle classes, with their growing ability to save and invest, has come a dramatic increase in the amount of capital seeking good management. Even in the ninteen fifties and sixties, investment in the capital markets was seen as an endeavor of rich people. But by the end of the 1980’s everyone with a good job was salting money away in the capital markets. Assuming some modest returns to scale and inprovements in productivity due to improving IT systems, it seems reasonable to assume that pay in the sector would increase. It would be in everyone’s best interest for it to do so, so long as the financial system grew more efficient at allocating a growing pool of resources.
A second factor in assessing the rise in financial sector pay is the argument that the financial sector works by allocating resources to the most efficient means of production. A healthy financial sector does this better than an ailing one. And it is definitely worth a lot of money to get this allocation system working efficiently. This is a reasonable and supportable argument. And to the extent that rising pay in the finiancial sector has led to more efficient means of production - in excess of the premiums to pay within financial sector itself - we are all better off for it.
We are not prepared to argue whether these conditions are strictly satisfied. The market is not always completely efficient. That, however, is the topic of another discussion.
Moving beyond that issue we see two monumental problems that attach to the situation of stratospheric pay levels within the financial industry: Transparency and Opportunity Cost.
There is a lot of talk about transparency. Not coincidentally, the same WSJ page features and article about regulations pertaining to derivatives and other esoteric financial instruments.
There ought to be discussions about this, because when wealth is transferrred to the financial system in excess of the value added by that system, we all become impoverished. Lack of transparency is the magic that makes such a transfer possible. Madoff’s whole scheme worked because of lack of transparency. He claimed to have magical powers. And people believed him.
Lack of transparency leads to chicanery: It is what makes that transfer seem desirable when it is actually not so. There are a thousand highly paid political operatives working on resoring transparency. And if capitalism is to function correctly, they damn well better take a good crack at it. In light of this work ther is a glimmer of hope that it will be fixed by good legislation. ( In Journal-Talk, Regulation)
When all the processes in the financial market are open, frank, truthful, unbiased, unpuffed, unwrapped, and in plain view of all interested parties, there is some small hope that the market can approach efficiency. The size of the distortions tends to be limited, at least. When it is otherwise - when the distortions become a huge part of the system, the financial industry will swallow up great gobs of capital, pay it to its operatives, and weath-making enterprises - companies that manufacture and distribute goods and services that add real value to peoples’ lives - will quickly starve for lack of capital. That is the fast-track to serfdom.
The second problem with stratospheric pay in finance is opportunity cost. Every economic activity requires an input of talent. When all talent flees any activity it is usually not long before the activity stands on shaky ground. It is not long before it begins to crumble. When I was leaving college, for instance, steel producing companies were losing money on US operations. There were lots of reasons. Part of it was that factory floor pay in the US was an order of magnitude higher than it was in the far east. And unskilled labor in the far east was more productive. So it made sense to invest there rather than here. In any case, steel companies, when they offered jobs to degreed engineering graduates, paid the worst. So on average, they probably also got the worst. This drove them into a kind of inevitable downward spiral. There still exist a few specialty steel makers. But most of the industry is located offshore.
Every manufacturing industry in the US competes for talent with the financial industry. It does so for engineering, business, and finance professionals. If the financial industry is paying more than any manufacturing industry, where will people with the best talent go?
There is absolutely no question that finance needs good people to allocate resources among businesses. But what if all businesses are handicapped by their inability to hire the best talent? The process of efficient allocation no longer produces the best economic result. I am told by my wife who graduated from Columbia Business School in the late 1980’s that almost all the best people specialized in finance. They planned to work on Wall Street because that’s where they could make the most money. At that point in time the ratio between finance and other non-farm pay was 1.2. In other words, that level of pay proved no hinderence to the financial system in terms of attracting talent. The additional fifty cents on the dollar amounts to excess profit drained from the capital pool that could be used to rebuild manufacturing in the US or rebuild a crumbling infrastructure.
The readers of WSJ tend to be more closely connected with the financial system than readers of any othe publication, so it is not unexpected that WSJ should advocate for their interests. The readers of the WSJ will likely be people who view with suspicion and animosity any regulation that threatens to derail the gravy train. Maybe, though, that is precisely what needs to happen.
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05.05.09
Posted in Uncategorized at 9:19 pm by steve
For some time I have been playing with the idea that good political decisions can only be made when the issues are framed by the right thesis and antithesis. When these are all categorically wrong, a good decision is impossible. When even one side is wrong, the chance of a good decision probably falls below half. The goal of this piece is to create a list of interests that frame political decisions and assign their defense to Liberal or Conservative . The idea is that when liberal and conservative points of view are engaged in defending the right sorts of ideals and poltical principles, there is some hope that political dialogue can find good solutions generally consistent with the broad interests of the body politic (i.e. all the people affected by legislation created by these debates.)
| Conservative |
Liberal |
| Individual Strength & Achievement |
Institutional Strength and Effectiveness, Especially Public Ones |
| Right Action |
Right Thought |
| Educate for Commerce & Industry |
Educate for Shared Culture & Good Government |
| Trust Myself, My Group, My Country |
Be Skeptical. Seek Useful Ideas. Seek Friends, and Make Allies |
| Depend on the Known, Old, Trusted |
Seek New Modes of Thought, Expression, Action |
| Be Tough, Be Virtuous |
Be Smart, Be Cool |
| Government Should Leave Me Alone |
Government Should Help Society Work Better |
| Conserve Capital |
Protect Environment, Protect Laborers |
| Wealth Lies in Ownership & Productivity |
Wealth Lies in Commerce & Efficient Distribution |
Take, for example, the question of education. On one hand education provides shared experiences, shared values, shared culture that allows the possibility of a civil dialogue on issues. It also, properly executed, would give us the tools to look at questions from different points of view and to better assess arguments on the basis of the merits of the evidence. It would allow us to reach informed decisions rather than simply aligning with our group. On the other hand, education must make us productive and effective in the economic sphere. Otherwise our society becomes weak and servile in an economic sense. If we build a society that is especially weak in a liberal sense, then we all become slaves of a wicked, corrupt, but highly effective central authority.
Sadly, America has a second rate education system that is worse at preparing Americans for all academic pursuits than are most European systems. And we have a system that is worse at preparing Americans for all vocational/technical pursuits than certainly the German educational system. By no measure is it first rate.
There are many reasons for the decline, many of which have to do with adult’s attitudes about education. But some of the reason lies in the Reagan era decision to dumb down education to make Americans good only at the three R’s Restin’, Recitation, and Revival Meetin’s. There’s no thinkin’ involved. Because that threatens the powers that be. And, evidently the same people imagined that vocational training just makes workers more expensive, not more productive. ( It’s thinking as old as anglophone economics: it’s one of the great fallacies of Adam Smith’s Wealth of Nations. )
The problem arises because conservatives do not have a position on education that drives us to be more productive as people. Conservatives do not argue that we need to be better in vocational training. And they argue against the utility of science. This is strictly medieval thinking. And it threatens to eliminate the middle classes. The problem of inferior education also arises because liberals tend to undervalue the social, political, and cultural values and tools of thought that are rightly taught in liberal arts colleges, in high schools, and in elementary schools.
Getting the educational system to work is more than getting public policy straightened out. But that step is necessary.
Turn next to the issue of individual liberty. America has very nearly come off the rails entirely. One of the great problems of modern conservatism since about 1880 is that conserving individual liberty has been at odds with conserving capital. Large institutions find convenience and profit in trampling the property rights, the environmental rights, the privacy rights and personal liberties of individuals. In matters of labor and commerce the Democratic party has tended to represent the interests of individuals against corporations.
But conservatives have represented themselves as the party of personal liberty - freedom from government intrusion - even as they attempted to eliminate all checks on abitrary executive power agianst individuals. There was precious little space for liberals to defend personal liberty. Fortunately this is a category that has had some constitutional protection. But no attribute of political life can be preserved in the absence of deep support both in individuals and in institutions.
These two examples raise the question of how well all of the interests of a democratic society can be represented by a two party system. For it is inevitable that conflicts of logical consistency will arise from time to time within a party’s framework making it impossible for a party to effectively advocate for issues that are rightly in its scope of interest.
I set out in an attempt to describe a kind of canonical policy framework (in its form now, far from complete) that would frame issues in a way that would lead to productive policy debate and good decisions on public policy. It still seems like a good exercise. But it might prove that no two party system is capable of managing all policies over the whole univers of political discourse in a way that is both consistent and productive of good results.
This is just a very quick sketch of the idea. My hope is to expand upon this in the future, both by adding items to the chart and by explaining the entries. The main goal is to provide principled positions on big-issue sorts of policy that allow productive policy debate. We note in passing that we have tried to frame positions on both sides of the aisle in positive terms because the public “goods” that each side is defending are worthy of defense.
Perhaps this exercise will lead to a strong argument that a two party system is incapable of reaching a good decision a large portion of the time because of the logical limitations on internal consistency and lack of independence between category areas.
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05.02.09
Posted in Uncategorized at 7:52 pm by steve
Dave Neiwert and Sara Robinson over at Orcinus have been doing an exemplary job of keeping us up-to-date on the hate-mongering of the authoritarian far right. It’s a place I like to go when I wonder if it’s just me or if the world really is going crazy. And I feel reassured, a little, that it’s not just me. Sara’s recent piece - nicknamed “Peak Wingnut” by a comment writer - speculates whether the right wing spin machine is going to spin the “wingnuts,” dervish-like, far out of control and into violence. They make a powerful argument that there is a real risk of this happening. And it is especially convincing if one has been visiting Orcinus for a while and hearing the case develop.
As much as I love to go there, as much as I agree with Sara, as much as I buy her arguments, as much as I see the same events, hear the same words, interpret them in parallel ways, I also have a sense of unease about the project.
One of the arguments Sara makes is that the far right has been dividing the country up into “us and them” for a long time. And that this divisive technique is inherent to the authoritarion point of view. Fair enough. I agree. But one of the curious side-effects of the work is that by focusing on groups that possess the characteristics she abhors, she, coincidentally does the same thing. The language is gentler. The focus is on their bad behavior and their unfortunate psychological makeups (Wingnuts are authoritarians. And that makes them psychos. This is the subtext.) And the question that keeps coming up is “What are we to do with people like this?”
The problem with this is that we are aping a behavior in “wingnuts” that we rightly deplore. Rather, what we need to ask is “How do we create a dialogue that changes the equation?”
…
It is a property of people who were in their teens and twenties during the 1960’s to view political power in a particular way. During the 1960’s one did whatever it took to get attention for one’s cause. One created a political group to protect that cause. One pushed that cause as far as one could, to hell with the consequences on society. It’s a kind of Bolshevik “take no prisoners” approach to political power. It achieved political ends that most people less than fifty years old will agree were laudible.
The great problem with this frame of mind is that it enforces the mental practice of aligning with a group over the mental practice of evaluating ideas on their own merit. What happens next is that ideas cease to be the currency of political discourse. Rather, all of political discourse is about allocation of power. And the symbols that belong to that task. Political discourse is targeted at bringing people into the group and making them loyal members. And about closing the door to the influence of outsiders. Political parties and groups of all sorts become more insular. And before long the whole political process freezes up because of a kind of brittleness that pervades every individual, every institution, every component in the political process.
Fueled by bone-deep racism, an unnatural terror of liberal government, frustration over the economic downturn, and fears about America’s loss of world standing, they said, the militant right wing is indeed rising again. Their numbers are up, their talk is turning ugly, and it’s not unthinkable that we could be in for a wave of domestic terrorism unseen since the mid-90s.
In fact, I live in a place with deep right wing roots. And I heard two remodelling contractors whispering in my hallway that they were pretty sure the President would not last out his first term, but would end the same way Kennedy did. This is not the kind of thing we heard even in the 1990’s. We are in a worse place.
Thing is, these are not inherently bad people. They are people who have a psychological make-up that embraces a particular point of view. And they have been fed on a public rhetoric of nationalism, jingoism, hatred and lies preached by the rabid right for thirty years.
There is a very important question about how to make sure that they do little real damage in the short term. But the real question is how to restore their correct relationship with society. Part of that task involves changing the voices they hear in public, the tone and the tenor of the people they listen to on radio and television. Part of the task involves figuring out how to bring the bottom thirty percent of the nation back into society. How do we provide good jobs? How do we provide health care? How do we provide social services? How do we make them feel safe and secure? For it is ultimately a great sense of insecurity and anger at perceived injustice that fuels their rage.
That rage was cultivated by the reactionaries who followed Reagan. Reagan mirrored the methods of sixties radicals by simply choosing a different set of political propositions, selling them by appealing to greed and hatred, and using the political capital to demolish opponents. His own success at this transformed the Republican party from a group of men who acted like Eisenhower - who built the interstate highway system and warned Americans of the dangers of the military-industrial complex - to men like Gingrich, and Dubya whose whole agenda appears to be oriented to sustaining a highly abstract form of pillage of every fungible asset held by the US.
Not only did the backlash to the sixties-style Bolshevism create them, but it kept them in power for sixteen of the last twenty-four years. And it kept liberal politicians cowed and frustrated. The results have been so ugly that people under the age of fifty have resoundingly repudiated not just the Republicans in question, but the whole Bolshevik approach to the political process. Obama’s ascendency represents a repudiation of the notion that who has the power has his way with the system. It represents to people under fifty a hope that political discourse can become both civil and productive of good public policy.
I am encouraged by Obama’s lead. He has attempted to make dialogue a centerpiece of his political modus operandi. It’s a refreshing change from the authoritarian styles of the Bushes and Reagans. But Obama’s administration has its own share of left-leaning Bolsheviks. And the Republicans have circled the wagons and taken a totally obstructionist role. So the hope that Obama created of a new age of dialogue remains more of a hope than a reality.
The impression from outside the beltway, at least, is that there are two groups with mutually incompatible views of the world running Washington. They have grown incapable of talking to each other. And the question is not so much how to adopt policies that create the most good for American people and institutions, but rather “Who is in control?” Outside the Oval office, it is still the adolescent activists and the counter-activists of the same era who are in control.
Despite inroads made by Obama and the under fifty crowd, the dream of bringing Americans together in a dialogue, every day, seems more and more difficult. The fracturing of the media has meant more views find expression, which is very helpful. But it also has meant a kind of breakdown.
Before the fragmentation process started in the 1980’s there was an effort throughout the media to present information without filtering it through a partisan filter. But with the rise of the Murdock empire, even institutions as large and influencial as the Walls Street Journal have seen ideology filter news. For example, WSJ made no mention of the election of Barack Obama on the day after the election. As if the President didn’t count because he had the wrong sort of political views. And the photo of Arlen Specter that accompanied his change of party announcement made him look completely looney. Even if it were true that six decades of association with Republicans has made him so, it is truly not a sign of unbiased reporting to make him look gratuitously bad.
So, how do we bring even-handed reporting and productive dialogue back into the political arena? Here are some ideas:
- Speak more about common interests and shared ideals and less about fractious issues.
- Speak more about problems, solutions, ideas, policies, and programs and less about people and processes.
- Focus discussions on finding common ground in interests and principles.
- Speak less severely about the psychological deficiencies of opponents and more about ways to persuade and encourage constructive engagement. Exchew name-calling, ad-hominem attacks, calling into question a person’s intelligence, mental stability, or sanity. We have different physiologies and different life experiences. And unless we are willing to systematically eliminate those who are not like our own ideal selves, we will all be happier if we can live together peacefully, with civility, and with respect.
- Attempt to be truthful and balanced.
- Focus less on the horrific and scandalous and more on the possible and necessary.
- Make political discussions less strident and more thoughtful.
- Introduce ideas and points of view that are not compliant with partisan points of view - any of them - but ones that still make sense to reasonable, apolitical people.
- View arguments to be less about winning and losing (which makes debate a zero-sum game) and more about being an organized and systematic search for valid propositions - things that reasonable people will agree with. (which makes debate a means of increasing knowledge)
It may be that we have gone so far with polarization that the only purgative to the poison is a terrifying and destructive social upheaval. I hope that is not so. But it is clear that fact has played an ever-diminishing role in all of political discourse and political power considerations have played an ever-increasing role. It is almost to the point at which if a person is not strongly aligned with a political organization, he has no voice. And people of one partisan persuasion have become deaf to all the noises made by people of the opposing party persuasion.
A failure of the body politic to recognize and come to grips with the most fundamental and obvious facts is the inevitable result. One is reminded of the story of the emperor’s clothes. Only a naive child is willing to state the obvious, that the fine suit of clothing the king is wearing is not simply diaphanous - it is non-existent. In the fable, the whole world fell silent and blushed at the recognition of the gap between truth and accepted political dogma. But in our political climate instead of such a statement creating a great stir, it goes completely unnoticed amidst the cacauphony of political gamesmanship.
I respect Neiwert and Robinson for their great integrity, for their formidable insight, for their persistence, for the power of their prose, and for the depth and commitment of their readers and commentators. As I said, I find Orcinus a source of encouragement and sometimes inspiration. But I earnestly look forward to the day when their work is irrelevant. I wish I knew how we might get there.
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Posted in Uncategorized at 5:19 am by steve
It’s a curious thing; almost as if the editorial board at the NYT doesn’t have time to read the articles its reporters turn in. On page A7 (01May09) there is an article by Benjamin Weiser entitled “Afghan Linked to Taliban Sentenced to Life in Drug Trafficking Case.” At first blush it’s just one more of those “Taliban=Drug Trafficker” stories. Haji Bashir Noorzai, an Afghan, is tried and convicted of moving opiates in large quantities within his native country. And he gets life in prison. Simple enough.
Or is it?
One question the case raises is this: What right does the United States have to try citizens of other nations - who have no official connection with he US - for acts they take in their own nations? In trying and sentencing Noorzai, the US is implicitly asserting a right to try, convict, and sentence people who live in other lands and are subject to other laws, and whosee behavior is not governed by US law.
A noteworthy early and very public example of this behavior was the capture and prosecution of Panama’s President Manuel Noriega by the Bush Administration in 1989. It was a matter of fact that Noriega was entwined with the CIA and that he was also deeply involved in drug trafficking and illegal arms trafficking.
In a syndicated column in 1984 Drugs, Drugs Everywhere and no Solution in Sight William F. Buckley states
Fifty, perhaps sixty percent of all crime is drug related. Ninety percent of illgal drugs reaching the country come in through organized crime. … There are now 4 million frequent cocaine users, 10 million occasional users. The cost of heroin and coke, three years after President Reagan’s big anti-drug campaign was launched are half what they were, which tells us that drugs are more ubiquitous than ever.
Maybe that was the point of the program. And maybe Noriega was making it difficult for the concession to make money. So he was nabbed and thrown in prison on charges that were close enough to the truth that they might stick.
Whatever might have been the motivations to invade, kidnap Noriega, and try him for breaking laws that would not apply to him as a citizen and leader of a sovereign nation, it seems to be a clear violation of the tenet of sovereignty upon which international law is based. It’s hard to understand how one might argue that the US actually has a right to incarcerate citizens of other nations for acts they have committed in their own lands. Other nations, in fact, view the Noriega capture as an act of war, not of law enforcement: and view his incarceration in light of being a prisoner of war, not a common criminal. If one is viewing it in terms of international law, it’s very difficult to believe in national sovereignty and see it any other way.
Between World War II and that day in 1989 when Noriega was captured, it is impossible to find another example of the US removing a citizen of a foreign nation forcefully from his homeland and trying him under US law for acts committed in his own nation. But the treatment of Noriega set the precedent by which Dubya would kidnap and detain purported al Qaeda operatives.
Ironically, as the Bush family was pressing for the right to capture people in other lands and imprison them outside the bounds of any legal doctrine that would allow it, they were simultaneously denying all protections of law under either the US Constitution or the Geneva Convention. The second Bush administration perpetually defended its rights to treat people held at Guantanamo Bay arbirtrarily, beyond the reach of the protections of law. That is not how one treats criminals or war criminals. Not if one cares about learning and making public the nature of their crimes.
The practice of swooping into a country, scooping up people, and throwing them into jail is unprecedented among civilized nations. Civilized nations consider the capture of their citizens by another nation an act of war or of kidnapping. Or both. To behave otherwise is to deny the idea that nations have soveriegn control over their citizens and the resources within their borders. That, in turn invites all sorts of nasty behavior. In fact, it invites chaos.
The practical problem with trying citizens of other nations in US courts for actions they have taken in the sovereign nations of which they are citizens is that it sets up a dangerous precedent. It implicitly invites other nations to do the same to citizens of the US. For example:
Imagine an American, a female divorcee travelling in a nation that follows Sharia law, say the fictitious nation of Irajistan. She refuses advances of a minor government official. By some means not relevant to the story, he finds out she is a divorcee. And that she was not faithful to her previous husband. This means that she has broken Sharia law. The official charges her with infidelity, has her tried; and she is stoned to death. This is precisely the kind of world we are creating if we kidnap people from other nations, try them (or not) in US courts for breaking US law in other sovereign lands, and incarcerate them.
Noorzai travelled to the US of his own accord to “meet with government officials, lured.. by two goverment contractors who said the Americans wanted to talk with him about terrorism financing and promised him safe passage home. Instead, after 11 days of talks with federal agents, he was arrested.” One can make the argument that luring a person into the US is different from kidnapping them. But the issue of reciprocity is the same; the woman in the fiction above was in Irajistan of her own accord. It is impossible to argue that (from a western point of view) she deserved to be stoned to death.
The second question raised by the Noorzai story concerns certain relationships in commerce and political power. The headline and a sentence in the second paragraph hint at Noorzai’s connection with Muhammed Omar. It’s as if the editorial board want us to see the story as one more link between the Taliban and drug smuggling.
The tribal leader Haji Bashir Noorzai, whose case drew wide attention because of his prominent role in the drug trade and his ties to Mullah Mohammed Omar, the fugitive leader of the Taliban, was found guilty last fall of taking part in a conspiracy that sent tens of millions of dollars worth of heroin around the world, including to the United States.
At first glance, the casual juxtaposition of Mullah Mohammed Omar and language about drug trafficking causes us to link the two facts mentally. But in actual fact, the sentence barely asserts any link, and the article never shows any sort of relationship between Noorzai and Mullah Omar. After parsing the quoted sentence carefully one realizes that one might just as well say “Noorzai, a petty drug smuggler and tribal leader lived in Afghanistan when it was ruled by Mullah Omar.”
The fact is, the Taliban, when they had complete control of Afghanistan eliminated opiate production altogether. If Noorzai held with the Taliban and enforced their position on opium production and distribution, he would be innocent of the drug charges. Alternatively, if Noorzai had been a major drug trafficker, he would have been part of a coalition to oppose Omar in order to restore the trade.
Noorzai claimed he did help the US invasion, so maybe he hoped to be a drug smuggler. But the charges against him suggest he was, at best, a bit player in the drug supply chain. Recall that Afghanistan, since the US invasion, has seen opiate production climb from nil to about $50 billion per year in street value. Even if Noorzai managed to distribute one hundred million of dollars’ worth of opiates in the course of the eight years, this amounts to about 0.25% of the Afghan production. Noorzai was not a big fish. He was neither a major Taliban operative nor a major drug smuggler. Perhaps he deserves to be in jail, but the case has no material effect on the business of the cartel.
How does one account for the turn of events? Perhaps he was prosecuted for working outside an officially sanctioned cartel. Or perhaps he was prosecuted just so that there would be another story equating Taliban with drugs. In neither case is the truth about Afghanistan being accurately reflected in the press - at least not in the headlines and ledes.
Interestingly, the story reminds us of the recurring nexus of arms and drugs and CIA operatives. Noorzai “once led a force of mujahedeen fighters in the war between Afghanistan and the Soviet Union” and “had helped the US recover stinger missiles that the CIA had provided to Afghan rebels.” During the invasion of Afghanistan, Noorzai’s tribe “collected and gave the American authorities thousands of Taliban weapons” - a service for which he was not directly paid. So why did he render it? Noorzai has close and trusting ties with CIA contractors. The article suggests as much, else whe would not have come to the US. What was he hoping to gain? A concession, perhaps.
It’s another of many stories suggesting the possibility that contractors working for the CIA and/or for certain arms of the military were involved in drug smuggling enterprises in Afghanistan. With $50 billion/year at stake, it is inevitable that some sort of de facto trade of arms for drugs would occur.
It is helpful to start the story with the Soviet involvement in Afghanistan starting in 1979. Mujahedeen resisted, using arms surreptitiously supplied by the US. That required CIA “contractors” who would deal with the likes of Osama bin Laden. Sometimes they provided arms. Sometimes training or logistical support. But in any case they cultivated a close working relationship. From the Afghan/Mujahedeen point of view, the arms were the most valuable thing they could get from the relationship. But it is impossible to view all Mujahedeen as being interchangeable. And CIA contractors had to choose which groups would get what and how much. How were they to choose? Part of that choice must have been a quid pro quo. The Mujahedeen had something to trade that was extremely easy to transport, and extremely valuable.
That was opium. So the mujahedeen traded opium for arms. CIA contractors might have gotten some or all of the weapons gratis from the DOD. But they certainly would not distribute them for free if they stood to make tens or hundreds of billions of dollars for the same effort, trading in opiates.
Assuming this happened on any scale - and it is naive to imagine that it did not - the second worst thing that could happen to the business was the Soviet withdrawal from Afghanistan in the late 1980’s; for it made US arms less valuable, opening up the possibility of alternative distribution networks.
Who was poised to capitalize on this? Al Qaeda. They had connections with the producers. All they would have had to do to reap much greater profits was to establish direct contacts with foreign distributors and cut out the US middlemen. Suggestive of the fact that they were in the process of doing this is the fact that al Qaeda was deep into the blood diamond business in the mid 1990’s. Especially when peace has broken out, that’s the currency the drugs/arms business.
Curiously, this line of reasoning might give al Qaeda a motive for wanting the Taliban removed. Assuming the eradication of opium was not their own idea to weaken the existing distribution system so as to allow them to rebuild it from scratch, eliminating the Taliban would be the only way they might continue building their drug-smuggling empire. But it seems unlikely that they would have hoped for a US invasion which would risk setting the very operatives who sold them arms in direct contact with the Afghan suppliers.
There is no question that al Qaeda was a criminal operation, that it did smuggle arms, that it did trade opiates for arms, and that it did attempt to grab tens of millions of diamond to use as currency in its smuggling operations. It is more of a leap of logic to assert that al Qaeda somehow threatened the cartel.
If, however, we suspend disbelief and assume that al Qaeda operatives were jailed in Guantanamo for approximately the same reason Noriega was jailed in Miami - threatening the family business - then all the language about “national security” and all the efforts to detain without public oversight begin to make sense.
It’s the timing that tells the story, though. The worst thing that could happen to the business was the Taliban’s complete eradication of opiate production; for Afghanistan supplies roughly 90% of the world’s heroin. It threatened the collapse of the whole distribution network which had to operate on stored inventory while the Taliban was being overthrown. Furthermore, the Taliban had created stability in the region for the first time in decades, obviating the need for arms. It was a terrible blow to many interests.
Cast in this light, one might reasonably wonder to what extent the US recent actions against al Qaeda and the Taliban echo those against Manuel Noriega long ago. Do both represent defenses of commercial turf?
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