Thursday, March 17, 2005

March 16, 2005

Annoying and Annoyinger Get Promotions
Holy moly, what’s the rest of the world to think? First President Bush appoints John “In Your Face” Bolton as our new ambassador to the United Nations. Bolton has never missed an opportunity to express his utter distain for the UN. Here’s a guy who told reporters that the UN was so full of useless deadwood if the top ten floors of the UN building were blown off it would make no difference to the UN’s performance. Maybe he’s right about that, but if you are going to send someone to represent the US at the world’s premier DIPLOMATIC body, shouldn’t he be at the very least, diplomatic?

Now Bush nominates Deputy Secretary of Defense Paul D. Wolfowitz to be the next president of the World Bank. Wolfowitz, the same man who told Congress not to worry about how much war with Iraq might cost because Iraq’s own oil supplies would more than pay the cost of the war. Two years and quarter trillion US dollars later Iraq’s oil production still can’t even meet domestic needs, much less pay for its own reconstruction or defense.

The Wolfowitz appointment is truly puzzling. The World Bank has been second only to the World Trade Organization, as the focus of distrust by international pro-labor and environmental groups. Neither organization can hold it’s annual meetings without the streets of the host city being filled by protestors.

So what do you do to improve the image of the 184-nation World Bank? Well, if you’re George W. Bush you appoint the guy credited as chief architect of the most internationally unpopular war since Vietnam.

What’s Bush thinking? There are a couple of possible explanations. The most benign is that both Bolton and Wolfowitz, while they served a purpose in his first term, had become liabilities and Bush wanted them gone for his second term.

Bolton’s job during the first term was to make trouble for Secretary of State Colin Powell whenever Powell strayed from the White House playbook on the Middle East. More often than not Bolton was the mysterious “unnamed State Dept. official” quoted in stories that complicated Powell’s life.

Wolfowitz, even more so than Don Rumsfeld, holds professional Pentagon brass in unveiled contempt. They are military “lifers,” and Wolfowitz believes he has more practical experience than they do. Wolfowitz considers himself the smartest person in any room he happens to be in at the moment -- and woe be the person who contradicts him.

So with these two appointments Bush may be simply be giving himself a “two-fer.” First, he gets rid of two individuals who have become damaged goods by doing his bidding during his first term. And – here’s the bonus – he gets to pass these two troublesome guys off onto international organizations he dislikes. (I can just hear Bush and Rove chuckling when the idea dawned on them.)

The other theory is that Bush is sending these two aggressive neo-cons to the UN and the World Bank with specific marching orders. You can use your imagination on what those orders might be. But of the two theories I subscribe to the first.

New Secretary of State, Condi Rice found John Bolton useful in undermining her dovish predecessor when she was in the White House. But the last thing she wants now is for Bolton to cause that kind of trouble for her -- and she knows he would.

Over at the Pentagon, Secretary of Defense Rumsfeld wants to leave, but not before his vision of a more streamlined US military force is set in cement. That will require he get Pentagon brass on board. The last thing Rumsfeld wants is Wolfowitz dissing and pissing off the generals at every important meeting.

What we are seeing here is a continuation of a long-standing tradition in government; when someone becomes a problem, promote them -- kick them up the ladder to some other agency.

Of course none of that makes these two appointments anymore acceptable. Bolton will only cause more friction between the US and the UN, not less. And if reforming the UN is the goal Bolton’s abrasive ways will only cause already recalcitrant members to dig their heels in deeper. I predict Bolton’s tenure will be short and stormy. And, when he leaves in a couple of years, nothing much will have changed -- because diplomats react poorly to undiplomatic bullying.

The same goes for Wolfowitz. If he is confirmed as the head of the World Bank he will quickly insult the bank’s members who believe they are at least as smart, (and considering how wrong he was about the cost of the Iraq war, probably smarter,) than he is.

In Other News
Bernie Bites The Big One: Former WorldCom Inc. chief execut
ive Bernard J. Ebbers was found guilty yesterday of fraud in the collapse of WorldCom Inc. The conviction must have sent chills down the spin of former Enron Chairman, Ken Lay.

"This is a fatal blow to the 'the CEO is above it all and out of the loop' defense," said attorney Jacob S. Frenkel. "This goes to show that CEOs can be held accountable..”

Well great. So here’s a CEO whot needs to be held accountable too: Halliburton CEO David Lesar. I am not implying he is guilty of anything, just that we need a criminal investigation into $108 million US taxpayer dollars that went missing while under his supervision.

Was it stolen? Does he know? Or was he “out of the loop?” Let’s at least find out.

Not Worth a Greenback Dollar: The US dollar is quickly losing its status as the world's main reserve currency as Asian banks dump dollars fearing the effects of America’s ballooning trade and budget deficits.

Over the past three years, central banks in the region have been quietly scaling back their holdings of US dollars to avoid a run on the dollar. Such a run would only cause those countries to lose money on their US dollar holdings. So they are moving slowly, quietly, but steadily out of dollar investments.

While the Bush administration continues to whistle past the cemetery when asked about these two deficits, Asians know this kind of trouble when they see it. And, they know where leads. A report by the Bank for International Settlements has estimated that the share of deposits held in US currency by Asian banks dropped to 67 per cent in the September quarter of 2004, down from 81 per cent of total deposits three years earlier.
Like Ronald Reagan, Bush will leave a giant financial mess behind for his successor. Oh, and for the rest of us too.

Remember WIN? Which reminds me of Gerald Ford and his “WIN” buttons. Those of you old enough to remember the Ford administration will recall that inflation was blazing right along in the double digits. Ford took the bull by the horns and by launching his “Whip Inflation Now” campaign. The idea was to get everyone to wear one of these “WIN” buttons and inflation would abate. The only person I ever saw wearing a WIN button was President Ford, and then only at the news conference in which he unveiled his secret weapon.

Recalling this my curiosity was peeked. Since this was government operation you have to know they printed up millions of those damn buttons. So where are they now? I bet that in some government warehouse there are unopened crates of WIN buttons collecting dust. Does anyone out there know?

The reason I bring this up is because Bush’s successor will want to have them hauled out and dusted off. Because he/she is gonna need them once inflation is ignited by these twin deficits. As Ford discovered, once inflation gets rolling there’s little more that can be done but ride it out while wearing a silly button.

By Stephen Pizzo
Raconteur at Large

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