I was thinking the other day about my sometimes ambivalent relationship to the US. On the one hand, I've lived here for twelve years, and not under duress or as a refugee who couldn't return home, or something like that, so I obviously like it here - at least I like it well enough to stay. On the other hand, there are a number of American pecularities that are somewhat unflattering to my adopted place of residence, and one in particular that the locals seem to have an enormous blind spot for: the American sense of uncritical self-love. America is a place with an endless appetite for books on "why we are so special", "why we are the greatest nation on earth" and the like ("we're so bold because our ancestors were daring and arrived on small boats", an acquaintance of mine said without irony… How did she think European emigrants arrived in Canada, Australia, Brazil, etc? By plane?); a place where columnists like Tom Friedman can write, without irony, that America is "the greatest force for freedom the world has ever known", or quote Lincoln, endlessly proclaiming America "the last, best hope of earth"; a place where the constitution and the authors thereof are capitalized, like some divinity; a place where serious editorials are written in newspapers criticizing other nations' lack of contrition about the sins of their past; and yet… a nation with almost no understanding whatsoever of other nations' civics and history, a nation that blithely excuses, forgets or ignores its past sins, and, most glaringly, a nation founded on slavery by rebelling against the liberal power of the day to cut taxes that has convinced itself it was founded on freedom rebelling against tyranny.

Lets start with a brief discussion of civics and history, starting with the American Revolution. I've endured a dozen Fourth of July celebrations since coming here, each time enjoying the celebratory dimensions while heading back to the bar every time the jingoism begins. Endless recitations of the overthrow of tyranny are unleavened by any understanding whatsoever of the nation they rebelled against: Britain. If America had lost the War of Independence, it would have been part of Britain.

Not Nazi Germany. Britain.

Last I checked, Britain is a long way from tyrannical. In fact, British male land owners had the vote, just like American male land owners. Britain had a mad king, George III, its true - but the king's powers had been severely curtailed since the Glorious Revolution in 1688 (essentially the end result of the English civil war that began with the debate about parliament's supremacy over the king - resulting in the loss of Charles I's head in 1649, and ushering in a brief period republicanism under Cromwell), and long circumscribed by constitutional convention (ever hear of the Magna Carta?). And what happened to those colonies that remained with the British? Well, they turned into well known despotic tyrannical regimes - like Canada. Where courts began to rule against slavery in 1797, and banned it permanently as part of the ban throughout the British Empire in 1834. Thirty years before the ban in the US, without a civil war laying waste to the land and population. What a sad outcome for the poor Canadians.

What about the American constitution, you inquire? Surely this was a noble document?

Perhaps it was. Not sure I'd go so far as to deify it and capitalize the authors, but there were some good ideas in the ol' constitution. Sorry, "Constitution". Of course, it didn't do a thing to enforce human rights at all.

How can I maintain this? Well, last time I checked the history books, slaves were slaves, then suffered legal discrimination for a hundred years after being freed, notwithstanding the constitution. John Adams passed the Alien Sedition Acts, banning criticism of the government, notwithstanding the constitution. Lincoln suspended habeas corpus, despite the consitution. I think the Japanese were interned during the war, the Chinese and other Asian immigrants suffered bans as restrictions as "the yellow peril", Jews were banned from private clubs, Dred Scott was ruled a slave and essentially a non-person, lynchings occurred, the military was segregated, interracial marriage banned (and gay marriage, for the most part, still banned), and Permanent Subcommittee on Investigations under McCarthy and HUAC spent years driving people to unemployment, despair and suicide for their political views…. Which are the human rights things that the constitution protected prior to public sentiment swinging in favor of them anyway? Sure, there are some. But that evil treacherous despotic monarchy, the United Kingdom, can assert at least as proud of a track record on human rights. And a few finer documents - notably, the constitution of the Weimar Republic and the Soviet Union - didn't seem to stop any nasty stuff in the lands of their authors.

What about the American record of freeing others from tyranny? Well, my friends, also rather tarnished. The "Manifest Destiny" record of domestic adventurism was as true a doctrine of wars of conquest in the 19th century as any "old Europe" practice of overseas colonialism, as the new Republic bought Louisiana (in 1803) and Alaska (1867), attacked Canada in 1812, Texas in 1845, the rest of Mexico's northern territories in 1846-48, and the midwest in the Compromise of 1850, and consolidated its borders. Not satiated after gorging on the belly of the continent, America began its foreign adventures with the Spanish-American war in 1898, attacking Cuba, Guam, and the Philippines, and seizing control of Panama in 1903. America added to its island colonies in the Caribbean, Central America, and the Pacific, picked up a few mandates in the wake of World War Two, and occupied big slices of Europe and Japan. Did this free people from tyranny? It depends who the people were. White Europeans were freed from tyranny, as long as they didn't vote Communist. Nations that did (Cuba anyone? Chile?) suffered assassinations and sanction. Others were manipulated in favor of American commercial interests as surely as any mercantile empire ever mined its colonies (see, for example, the United Fruit Company's massacring workers in Colombia and sponsoring a coup in Guatemala and the assassination of Mohammed Mossadegh in Iran in 1953 under the direction of the CIA and Kermit Roosevelt to protect American oil interests). A few (Korea, Vietnam, Iraq) suffered outright invasion, killing hundreds of thousands of locals, followed by severe economic sanctions.

And that noble war, World War Two, fought by the Greatest Generation? I've written about this a little bit elsewhere, but the record here doesn't stand up as particularly noble and selfless either. America followed the same isolationist stance as in World War One, entering only at the last minute, and only when its commercial interests were threatened. America did absolutely nothing to assist refugees, particularly Jewish refugees, fleeing tyranny in Europe. And those French, who according to popular American sentiment, were saved twice by the American army? Well, the French, under that great champion of liberty, Louis XVI, then later Napoleon (he of the "I think I'll kill people across Europe and crown myself Emperor" persuasion), did indeed save the American colonists during the revolution and the War of 1812, doing nice stuff like blockading ports, supplying armaments and the like. America returned the favor by letting France be overrun by the Nazis and live under occupation for four years (not to mention the two previous German occupations of France, in 1870, where America did nothing, and in 1914, where American troops arrived four years later after the Zimmerman telegram made them realize that the Germans might ally with Mexico and invade the US from the south).

What about economic liberalism and free enterprise? Weren't those uniquely American achievements, resulting in the dynamic growth of a young nation? Again, a mixed record. Adam Smith and friends were, in fact, folks, not American. The British practiced extreme laissez-faire economic liberalism throughout the nineteenth century (see Irish potato famine for some negative results of this practice, by the way). The Dutch seemed to have a way with markets too, invented a couple of things like the stock market in 1606. The dynamic entrepreneurial cowboys who settled the West were in fact primarily supported by government through land grants, troops, deportations (and broken agreements, reservations, and the like) of natives, troops, and the use of the military to open foreign markets. Why did "everyone" come to the US then? Well, "everyone" didn't - the nineteenth century record of immigration to the New World is more a record of ticket prices on ships and the availability of free or inexpensive land than it is a record of escaping tyranny. Millions of Europeans went to Canada, Brazil, Argentina, Chile, Southern Africa, New Zealand and Australia. Did the ones going to the US read some special treatise on the constitution first, or simply jump the first ship out of whatever impoverished overcrowded hell hole they lived in? (Often landing in another impoverished overcrowded hellhole in the New World, potentially as virtual - or actual - indentured servants, but thats another story). In 1900, and certainly for several decades afterwords, the most mythical destination for riches was Argentina, not America: fin de siecle Paris bandied about the phrase "rich as an Argentine", not rich as an American. I think the reason for those riches was probably climate and free land - attributes shared with America - rather than political philosophy - attributes where America and Argentina differed dramatically.

What if we shorten the record to the last fifty years? Surely dynamic America outgrew socialist Europe? Another record of debate. I've often wondered why economic historians would show annual growth rates in the US exceeding those of Europe every year since 1945. Why did I wonder this? Well, I wasn't around in 1945, but as far as I can tell, continental Europe lay in ashes from Normandy to Moscow, and south to the boot of Italy. War time rationing was in effect for years. I'm pretty sure America wasn't in ashes, and didn't suffer post war rationing. So if, say, New York outgrew Berlin economically every year since 1945, how did the apparent gap in wealth between the two cities narrow? (Why do I say it narrowed? I'm just gonna suggest that a Berlin that was 90% destroyed in 1945 was further in wealth from the dynamic New York of 1945 than the hip, wealthy, happening reunited Berlin of today is from New York today). Paul Krugman offers one answer: adjusted for population growth, the GDP growth in "old socialist Europe" and "dynamic capitalist America" was the same in the post war era. In effect, America accepted refugees to bolster growth, and spent tax money on prisons and the military, while Europe stabilized its population and spent tax dollars on creating social services, outsourcing the army to the US. The balance of their economies grew equally. Dynamic America invented stuff (often driven by government, though, not the mythical world changing individuals - for example, the Internet and GPS (the military), and all the spinoffs from the space program (government), for example), but the wealth didn't spread particularly widely in the US as a result, and didn't result in per capita GDP growth outpacing Europe.

Which brings me to my last point, about self righteousness. No nation is perfect, and the litany of issues, facts, and examples above are not blemishes in the history of nations unique to America. Even accepting the long list above without argument could result in a "balance sheet" of achievement tilting well in America's favor relative to others. But Americans can't just seem to ignore the flaws at home. They need to aggressively and loudly point out those abroad as well. Last I checked, the Japanese, for example, notwithstanding their much criticized shrine at Yasukuni and their textbooks light on war contrition (do Japanese government position papers criticize American history texts?), have multiple museums exploring the war crimes of Japanese troops in the 30s and 40s. The US, by contrast, objected to UNESCO declaring the Genbaku dome in Hiroshima world heritage site and displays the planes that dropped the bombs without any material about the use of atomic weapons on civilians. In the discussion of the need to free the world of nuclear weapons, Americans don't seem to see the irony of the only nation that ever used them thinking itself an unblemished leader in this discussion.

The most egregious example of this self righteousness comes on the issue of slavery. Leaving aside the discussion of reparations for slavery (ruled out by all presidents), lets look simply at commemoration. There are twenty five Holocaust museums in the US, but not a single museum of slavery. This is, to my mind, nothing short of amazing: to build twenty five museums to the crimes of another nation, and zero to your own. Is the Holocaust "worse" than the decades of slavery in America? I'm certainly not qualified to analyze the relative evil of such terrifying crimes. But zero commemoration of one's own crimes? Even the much maligned (by America) "undemocratic" government in Russia under Putin/Medvedev supports several museums decrying the Gulag penal system (in Perm, and in Moscow along with memorials in major cities such as St Petersburg, Moscow, and throughout the former "gulag archipelago"), and recently commemorated the notorious Katyn massacre on state television. (Interestingly, the US has a higher percentage of the population in jail than the gulags in the Soviet Union did at its peak under Stalin given these population statistics… Presumably, this is ok, because the US justice system is fair, unlike the Soviet one. Wonder how the US got so many criminals, relative to other countries, though?)

This, then, for me is the single most frustrating dimension of "Americanism". Americans seem to need to think themselves the greatest nation on earth, ever, and any effort to acknowledge past errors is viewed as "unAmerican" (see repeated claims that "America's health care system is the best in the world" in the recent health care debate, founded on no analysis whatsoever of anyone else's, or complaints on Fox News that "Obama is going around the world apologizing to everyone" without any discussion of whether or not the things he is apologizing for are actual wrongs in the eyes of the audiences he's addressing). America is a great place. I like living here. I like the openness and dynamism in American society (and particularly in New York, where I live). Just as recent dialog about disagreements between America and Israel, however, suggested that true friends tell friends when they're wrong, I think America needs to face up to its tremendous blind spots in order to continue to have a chance to lead in the twenty first century. The rest of the world has analyzed its past failures (Europe) and been too poor for too long not to analyze others best practices (Asia). American ahistorical jingoism will simply serve to prevent Americans from learning from the rest of the world, building bridges to other cultures, and correcting systemic and societal problems at home. Mr Reagan was vaunted for continuing in the American tradition of pointing out others flaws by enjoining Mr Gorbachev to "tear down that wall". I expect we'll have to wait some time, and lamentably potentially have to endure some horrendous series of shocks (economic or otherwise), before an American leader will be able to focus the lense on self-reflection, and tear down the wall of sanctimony and ignorance that blinds Americans to their problems at home and abroad. However, there is hope - beyond virtuous and self-righteous Canadians like me :) lending their American cousins a helping dose of humility: American history itself. For, as another great friend of America, Winston Churchill, once said, "You can always count on Americans to do the right thing - after they've tried everything else."

I read a book review recently where the reviewer highlighted a statement of the author's that Churchill was "a minor figure making speeches in a war won with American money and Soviet troops" (unfortunately, I cannot find the link, but I'm looking for it!).

I loved this statement as it was three controversial (to some…) points in one short statement that challenged conventional views: Was Churchill an unimportant figure? Did the Americans primarily use their economic power and not their military power? Did Soviet troops win the war?

Obviously in a short blog entry I'm not going to prove or disprove these three points, each of which alone could be the subject of a PhD dissertation. But lets take a quick look at the possible truths behind each one.

First, Churchill. There is pretty good evidence that between, say, at least 1922 and 1940 he was indeed a minor figure, dumped from government and considered a windbag (or, as Goering put it, a garrulous drunk. And Goering had, unfortunately, mainly sympathizers outside Germany, including in Britain and America). History rewards him for his prescience in describing the Nazi menace, though he was prone to describing menaces and, like Nouriel Roubini calling the market crash, if you call a disaster often enough and long enough, you're bound to be right eventually.

In 5 Days in London, May 1940, John Lukacs argues that Churchill's decision to fight "till Hitler is beat or we cease to be a state" and defy well known appeasers like Chamberlain and Lord Halifax at a time when the British public was apathetic and British troops were trapped at Dunkirk, turned the tide of the war… for "democracy". Militarily, though, its unclear that Britain's defiance mattered to the defeat of Germany. There is some argument that the British aid to Greece delayed German preparations long enough to ensure that the Wehrmacht encountered winter, and thence, defeat, during Operation Barbarossa. There is also discussion about whether Britain's "unsinkable aircraft carrier" and its navy, particularly in the North Sea, provided a base for harassment of Germany, and, ultimately, the D-Day landings. But some quick stats here…

In No Simple Victory, Norman Davies looks at the war in a series of slices. One is troop commitments and casualties. 88% of German casualties came from fighting the Soviets. The Germans lost more men in January 1945 fighting the Russians than Britain and America combined did in the entire war. Seventy thousand cities and towns were destroyed in Soviet territory by the end of the war. The Soviets lost nine million soldiers (and the Germans lost four million fighting them) along with civilian deaths estimated at eighteen million (higher in some numbers, but never lower than sixteen million). These numbers are not widely discussed in the West, and at times dampened by views about such acts as Zhukov marching soldiers over mine fields, the use of penal battalions (battalions of prisoners, often political prisoners, sent into quasi-suicidal attacks with casualties in the 90% range) and NKVD "blocking battalions" (battalions of secret police positioned behind the fighting battalions to gun down anyone who retreated) - the "Soviets had high casualties as they were careless with the lives of their people" view - but even the most cynical historian would be hard pressed to argue that the Soviets had more than twenty times the military losses of the US because they were "careless". Nine of the top ten deadliest battles in history took place in World War Two in eastern Europe between the Germans and the Soviets (D-Day is 23rd, and the first World War Two battle involving the US in Europe in the list). The Soviets, quite simply, did the bulk of the fighting.

Which brings us to the US. In 1938, the US army was smaller and less well prepared than the Czechs. America, like Britain, faced divided public opinion about the German threat. At least these two reasons kept America out of the war for almost 50% of its duration (yes, it started in Sept 1939, not Dec 1941, and ended, in Europe, in May 1945: 55 months of which America was neutral for 26 of them, until attacked - as were the Soviets, to be fair). FDR implemented "Lend Lease" not just to help out Britain and the Soviets, but also to create markets for America products and extend American economic control. There are those who argue that the terms of Lend Lease were deliberately contrived to increase the economic burden on Britain and hasten decolonialisation. It took until 2006 for Britain to pay back the debt. In this view, America lent - not gave - Britain and the Soviets equipment, which they used to fight a war that defended America, and then America asked for the money back, breaking the economies of their allies and extending America's hegemony. (As an aside - this view of American participation would make FDR one of the most brilliant statesmen in history. Saving the lives of your people and winning and extending your economic dominion is strategy that would make Macchiavelli proud. But we're probably a hundred years from that version of history being written!)

There are plenty of counterarguments to the above, of course, as the war continues to generate much interest from historians. But its interesting that our narrative in the Anglo-Saxon West is dominated by Churchillian defiance and joint heroics at D-Day, with little discussion of the battles in eastern Europe other than the quasi-equating of Stalin with Hitler based on a view that the war's outcome enslaved eastern Europe under Soviet power for fifty more years. By contrast, the Russian view is that no one but them did anything to defeat the Nazis, Churchill was the only Westerner with any balls, and that the West did nothing to relieve pressure on the Soviets when they could have. An exploration of the reasons why they bore the brunt of the fighting (geopolitically), and the degree to which the savagery on the Eastern Front was at times more than bilateral, has no role in this view.

Why do these views predominate? They're historically useful. "Our" nations won as we were bold and brave, and "our" great Shakespearian orator out-spoke the evil German orator. True or not, its simpler to call Churchill the Man of the Millenium, who saved the world for democracy, than a windbag "in a war won with American money and Soviet troops".

It may also be true. But great truths can withstand counterargument, inspection, and debate. My limited experience in the US, Britain, and Russia hasn't encountered much of that on this subject.

In my last couple of blogs on this subject, I've looked at the composition and balance of the Goldstone Report. From that, my view is that we can conclude "that in a protracted state of conflict between two peoples, a military operation was conducted in an urban environment with the aim of terminating military attacks on another urban environment. Urban warfare is messy, and large numbers of civilians were victimized, most likely at times deliberately and at times in violation of international laws." (quoting myself here!) The question I want to look at in this final installment of this series is what to do about it.

A couple of parties have proposed actions. The UNHCR adopted a lopsided resolution endorsing the report's criticism of Israel and ignoring its criticism of Palestinians. Ban Ki Moon has suggested that each side investigate itself and report on the conclusions. I want to look at this from a slightly different angle, or, as we used to call it in the parliamentary style of debates we conducted on campus, I'd like to speak at cross benches.

At issue, in my mind, are the series of international agreements governing conduct in war, oftentimes collectively referred to as "the laws of war", or jus in bello. There are about 150 years of formal agreements in this regard, many of which have their basis in more ancient traditions of conduct on the battlefield, including traditions such as the Mosaic, chivalric, and Islamic. In essence, these "rules" tend to say participants should declare war, wear uniforms, not target civilians and their property, not harm those who surrender or torture prisoners, care for all wounded, and report any violations of the above. Further amendments have looked at whether particular weapons are intrinsically unlawful, among other things (such as the renunciation of the right of conquest, which are important but not part of this discussion).

I'm no lawyer, and no warrior, so my arguments here will have a few rough edges and mighty holes of ignorance. But bear with me… First, regarding the rules of war directly: for a powerful nation state, the rules apply "more" than to weaker parties, on the one hand, and on the other hand, the rules further disempower militarily weaker parties and particularly non-state actors. Lets look at each.

From the vantage point of a powerful nation state, the rules are mostly advantageous prima facie, as they mandate conventional armed and uniformed troops and formal declarations of war; however, once war has been engaged in, the rules compel discrimination in the use of force to the finest degree possible given the combatants' capabilities:

Due to the high cost of C4ISR (command, control, communications, computers, intelligence, surveillance, reconnaissance) assets, as well as precision weaponry, only a few States can afford to field a force capable of a high degree of discrimination during attacks. Thus, the "everything feasible" and "all feasible precautions" verbiage imposes a higher de facto standard of care on information age militaries than on a lesser equipped forces. 1

This has resulted in scenarios where, famously in the initial incursions into Afghanistan, the militaries involved were using "a $2 million missile to take out a $10 tent". Conversely, its claimed that in Afghanistan, the US has almost abandoned airpower now, despite the potential that this could prolong the war (and, presumably, civilian harm), due to the desire to avoid "collateral damage" from airstrikes.

This, plus television cameras, significantly raises the cost for a nation engaging in military action. It is perhaps reasonable, as higher costs should delay decisions of war. One might ask, however, whether nations fighting for their existence would argue that the exigencies of survival change the cost equation: most famously, the US argued atomic bombing civilians in Japan was justified given the cost of the alternative (a land based invasion). In more limited conflicts, discrimination becomes a propaganda device used by wealthy militaries showing videos of smart bombs going down chimneys, tailor made to sell the war as sanitized to the civilians back home.

From the vantage point of the less powerful combatant, the laws of war effectively outlaw unconventional warfare. Revolutionaries are expected to declare war, wear uniforms, and face their opponents in the field - and avoid hitting any civilians while they are at it. This has a beautiful sense of the Queensberry Rules applied to warfare. It is also routinely ignored, as no insurgent could ever win facing their opponent in this fashion. Counter-examples abound, from the American Revolution, to the Umkhonto we sizwe armed wing of the African National Congress during the struggle against apartheid. This attempt to rule the only approach available to the insurgent off-limits simply allows the powerful to ignore the root causes of uprisings and denounce the approach as "illegal". We would be better off allowing that guerilla warfare and - yes - even terrorism are practices insurgents and occupied peoples have used routinely, and at times effectively, to assist their cause in prevailing.

For both sides, then, the "laws of war" preclude not only those truly heinous behaviors, but also practices that offer one or the other side an ability to make use of their advantages and minimize their disadvantages in order to force a rapid conclusion to the conflict (another goal of the laws of war). For example, writing on the declining use of US air power in Afghanistan today, a military analyst in the Times states

Logic dictates that no well-ordered army would give up its advantages and expect to win, and the United States military, which does not have the manpower in Afghanistan to fight the insurgents one-on-one, is no exception… Wars are always ugly, and always monstrous, and best avoided. Once begun, however, the goal of even a “long war” should be victory in as short a time as possible, using every advantage you have 1

In today's world, where so many of us, particularly in the wealthy world, have the fortune to live at peace far from conflict centers, our only experiences of war are shocking images - images of the kind that the world never really saw before roughly the Vietnam war. Now, with instant on site-reporting, we're appalled at what we see of conflict, especially conflict that is conducted in our names. We therefore cloak ourselves in jus in bello and argue that, piteous as it might seem, our armies are conducting themselves with morality. This has been referred to as

the implied covenant that exists between the armed forces and the nation under whose flag they fight, kill, destroy, and detain. The essence of this covenant is a willingness to engage in such conduct based on a belief that doing so will be consistent with the inherent notion of morality 1

I don't suggest we abandon morality; rather, we must look war square in the face. Even a military, or an non-state actor, that conducted itself with perfect compliance with the laws of war will result in many fatalities, casualties, destroyed homes and lives. This may be moral with an asterisk - ie given the laws of war - but I argue it needs to be less legalistically moral and more broadly moral: in other words, moral according to the need for the war. Its not enough to justify that the laws of war were followed, or followed as well as anyone else followed them. We need to stop using discussions of how war is waged as a proxy for discussions of whether war should have been waged.

In other words, I suggest the discussion ought to shift from jus in bello to jus ad bellum. The issue here is the conflict itself, not how it was conducted. Until the Middle East finds its Mandela and de Klerk, willing to shake hands and reconcile; its Gandhi and King, willing to forswear force and use only moral authority; its Havel, willing to allow a "Velvet Revolution" become a "Velvet Divorce"; or, most importantly, its equivalent to the mothers of Northern Ireland, where both sides decided to stop tolerating the death of their sons in the wake of the Omagh bombing, the fate of Israel and Palestine will remain in the hands of those who appear to benefit from prolonging the conflict, and words hurled at each other about the unjust conduct of war are just more missiles and bullets added to a pile already grown too large, for too long, with too many victims.

The problem with the Goldstone Report, then? Israelis, Palestinians, and their respective supporters have found another reason to debate, and prolong the suffering, rather than finding the moral force necessary to evolve a just and acceptable solution. When peaceful solutions are not being actively pursued, the parties will go to war, and civilians on both sides will be harmed.

My last post started in on the nettlesome question of trying to understand the Goldstone Report and reactions thereto. In that post, I was trying to lay out a baseline: what the report was, who participated, what problems different parties have pointed out. This post is going to try to look into understanding what "we" might be able to claim we "know" as a result of all this information and discussion.

At some level, we can start by claiming that we know the things that all parties agree on: for example, that rockets were fired from Gaza into Israel over a period of time, and the Israel Defence Forces (IDF) entered Gaza after some series of rockets were fired. It doesn't seem like anyone is claiming that no rockets were fired, nor that the IDF didn't enter Gaza. This sounds like a trivial conclusion, but it is one we can at least view as being on relatively firm ground.

The majority of the rest of the claims in the report fall into one or more categories, causing one or more parties to take issue:

Whew.

Its taken me a while, but I finally got around to reading the 572 page Goldstone report. The report is an analysis of the actions in Gaza between 27 December 2008 and 18 January 2009, during what the Israeli's termed "Operation Cast Lead".

Why did I bother to read it? Well, recently there was some news that the Israel Defence Forces intended to reprimand Brig.-Gen. Eyal Eizenberg, commander of the Gaza Division, and Col. Ilan Malka, commander of the Givati Brigade during the operation, for permitting artillery fire near a UN compound in the Tel al-Hawa neighborhood of southern Gaza City. This was said to be a result of Israel's own investigations, not the Goldstone report, as Ehud Barak, the Israeli Minister of Defence, called the Goldstone report "deceitful. Ban Ki-Moon, the Secretary General of the UN, recently released his own report, calling for independent Israeli and Palestinian investigations, apparently to be conducted by their own national forces.

And, on a personal level, for some odd reason, I wound up discussing the report with several people in the last few weeks, including a person who had served in the Israeli Defence Forces in Operation Cast Lead. All of those I spoke to were vehemently opposed to the report, considering it biased.

As I am strongly interested in bias, I thought, therefore, I ought to read it.

The report is not particularly tough reading, but reading it does present a number of problems. Points include who authored the report, why the commission was empanelled, what organization was involved, and who participated in the production of the report. After sorting through all those filters, one can digest the contents.

Starting with who: who says something, not just what is said, is scrutinized very closely when examining highly charged interactions of several distinct groups of people. So, unfortunately, as I detest ad hominem arguments, one is forced to begin by looking at the composition of the members of the UN mission. Aside from the mission head, Justice Richard Goldstone, a former judge of the Constitutional Court of South Africe, and prosecutor of the International Criminal Trials for the former Yugoslavia and Rwanda - and, apparently, a man who considers himself a committed Zionist - the members of the panel were Christine Chinkin, a professor of International Law at the London School of Economics and a member of the 2008 fact-finding mission to Beit Hanoun; Hina Jilani, an member of the Supreme Court of Pakistan and of the 2004 International Commission of Inquiry on Darfur; and Colonel Desmond Travers, an officer in Ireland's Defence Forces. In other words, a Jew, a Moslem (but not Arab), and two (probably) Christians (perhaps one Anglican and one Catholic?), all with backgrounds in international human rights in one form or another.

Next why and what. The United Nations Human Rights Commission (UNHRC) was the organization under whose auspices the commission was created. The UNHRC has been considered by some, including Israel, to be biased against Israel as they have passed more than fifteen resolutions condemning Israel since the commission was formed in 2006, and have paid scant attention to human rights issues in other nations - for example, in the Sudan. It has also been argued that Goldstone as well as Chinkin had publicly expressed views that war crimes were being committed in Gaza prior to the commission being formed, and that their views had a role in creating the mission.

Next, who participated. The Palestinian Authority, and Hamas within the Hamas controlled region of Gaza participated fully. The mission toured Gaza, entering through Egypt. The Israeli government refused to participate, respond to written questions, allow the mission into Israel, or allow the mission to enter Gaza or the West Bank through Israel. It also refused to allow some Palestinians to travel from Gaza or the West Bank to Geneva to testify. I'm not clear whether that "some" was a big or small number.

Now on process: both Israeli and Palestinian participants in the process have alleged intimidation. Israeli commentators have said that Hamas staged incidents and/or intimidated witnesses, and Palestinians have said they were harassed, detained, or otherwise intimidated regarding their testimony or efforts to give testimony.

Lastly - one last point before getting to the report! - the conclusion of the UNHCR regarding the report was to adopt a resolution condemning Israel's actions as documented in the report, but failing to condemn Hamas for their actions. This is very distinct from Goldstone condemning Israel and failing to condemn Hamas in cases where their actions were similar, but, despite expressing his own disappointment - “This draft resolution saddens me as it includes only allegations against Isreal. There is not a single phrase condemning Hamas as we have done in the report. I hope that the council can modify the text"1 - the UN resolution resulting from the Goldstone report has been conflated with the conclusions of the report itself.

What a rat's nest! Beyond the long standing interest I have in human rights, and touchy politics, the Goldstone Report and the intense emotions surrounding it seem to have roots in a subject I've touched on a couple of times in this blog: epistemology. How do we know what happened, and how do we know that we know, and how do we define that we know that we know?

And, after figuring all that out, how do we know what to do next?

I'm afraid it will take me more than one post to get through those next couple of points, so please bear with me! Comments on how well/poorly/neutrally/with horrid bias I have laid out the scenario above would be very welcome.

Sorry my posts have been a little more erratic this week, or at least strangely timed. As usual in times of great need, I was called upon by the powers that be to offer them sage advice, and so found myself shooting hoops with President Obama, helping sketch out the outline of his Speech from the Throne…. er, State of the Union Address.

Oh well, not exactly. But I did advise someone how to spell Tim Geithner's name. So thats pretty close, then.

Notwithstanding the unpardonable snub of not being enlisted to help polish the President's message, I dutifully watched the speech (on the web of course - no TV). In the main, I thought it a reasonably good piece of political theatre - reacting to the threat of ebbing public support with an ambitious, job centered program, a few reminders that he inherited these crises, and some cordial jabs and soaring visionary words interspersed to tackle "business as usual", partisan rhetoric.

Its an interesting gamble.

I don't mean the various elements of the platform, though some or more might be part of future missives. I mean rather the effort to turn the knife away the jugular on obstructionist politics. This is, particularly I think in the congressional system, a very difficult task. Its a difficult task for the simple fact that reason plays little part in voters' judgement of whom to vote for, and rhetoric plays the dominant role.

In other words, a politician runs for office promising something (lets pretend…). For example, he or she promises to cut taxes. He then looks at who else got elected when he shows up in Congress, and finds himself in the minority. Maybe in the minority in a big way.

So what does he do?

If he compromises on some of his principles and speeches that he gave on the stump, he'll get killed by the other party showing him as a hypocrite in the next election. Alternately, he'll lose in the primaries to the hard line in his own party holding up photos of him embracing the other party's leaders, painting him as a traitor to the cause. In both cases, he'll get nailed with being ineffective at delivering tax cuts.

If, on the other hand, he stands on his chair and screams, opposing everything in the name of wanting nothing but tax cuts (which, if proposed by the other guy, are too small and/or badly targeted), he'll go back to his constituents a noble warlord. He can't get outflanked by his own party, and can run clips of himself sticking to his guns, "battling Washington" just like he promised his base, and so showing himself a man of principle vs the weakling, opportunist craven figure the other party dares to propose.

Who is going to take the gamble? Go negative, baby, and laugh all the way to the polls.

The voter, ironically, buys the negativity, then complains about dysfunctional partisan politics. This is the ju-jitsu (or maybe aikido) that Obama is gambling he can pull off, by channeling the anger at horse trading and ear marking and pork barreling and other body parts and animal adjectives into anger at Congress, making it riskier for incumbents to look obstructionist than to collaborate.

Its a big gamble, one that will require sustained and silvery oratory (ok, advantage Obama on that one) all the way through to the midterms. (And, most likely, will get judged on the jobs numbers anyway, in the sense that "winning" in the midterms will mean "the strategy worked", whereas it will mostly just mean the economy improved - if either happens).

Its nice to imagine a different world. A friend of mine once said:

In life, if you allow yourself to be persuaded by reasonable debate, you're a reasonable person. In politics, you're a hypocrite

This was perhaps more famously said by Keynes, "When the facts change, I change my mind. What do you do, sir?". Thankfully, Keynes and a handful of other "great personages" did alter their entrenched views, posing sophisticated arguments to those in power and/or the electorate, when faced with overwhelming evidence that what they had believed yielded little insight into the unprecedented circumstances they faced.

Will Congress?

Just to hedge, I think I'll start learning Mandarin.

I suppose I too must weigh in on what the plunging polls and Massachusetts election results mean for Obama, or America, or at least the midterm Congressional elections. I'm not sure I know, though, so instead I thought I'd reflect on the center of gravity of American politics.

Like most people, I think, I tend to assume that a certain set of opinions are widely held. When expressing those opinions, I think I'm not "being political", I'm just stating things that are close enough to be facts as to have almost the same weight as facts. For example, if I say, "genocide is bad", I wouldn't expect to be taken to task for expressing my political beliefs. Its true that there are likely a few wingnuts around who think "genocide is good" or "sometimes genocide is quite a nice idea - depends on the circumstances" - but broadly speaking, I'm likely to be able to assume that this statement is virtually fact and therefore safe for nonpartisan public consumption.

On the other hand, some topics are famously controversial. Abortion and birth control can cause a nice heated conversation in many parts of the world, even if one is "triangulating" - such as Clinton's formulation that "abortion should be safe, legal, and rare". (I always associated this with Hilary's remarks in the primaries, but apparently, Bill used this formulation in 1992). Gun control is quite controversial in America, particularly in the South and West. As a result, many people realize they need to evaluate where and to whom they are speaking before commenting on this subject, unless their ambition is to have a debate.

I mention this as one's perception of the center of gravity of opinion shapes how and what you think you need to debate, vs what is essentially "obvious". I grew up in Canada, where the current Democratic party would probably be viewed as center right, and the Republican party as far right (parts verging on maniacal, from the Canadian point of view). I haven't lived there since 1998, so my finger might have strayed from the pulse, but I'm think I'm still mostly correct here. Canada, from a European - or at least Western European - standpoint, aside from being a nice, big, cold, dull place with bears - is probably viewed as to the right of center, part of the "Anglo Saxon obsession" with free markets.

This lens therefore informs how I interpret poll results. Much of what the Democratic party is proposing is "obvious" (used per the formulation above) from the Canadian point of view (or my interpretation of it! Epistemology bedevils us again…), so when speaking with friends of similar background, our wails and lamentations might have to do with how the Democrats keep embracing timid right of center proposals rather than going to (our) center, or how the party is proving to be undisciplined in Congress and thus seems weak in pushing its agenda. Its in this light that we'd interpret poll results: people are frustrated with the pace, the method, the candidate, the message, or something along those lines.

If I'm being a little more self aware and intellectually honest, however, I might have to admit that their set of proposals is not "obvious" to the American populace. There are many in America who think, for example, that pure free markets will drive lower costs in health care (the greatest reason for opposing health care reform is "too much government involvement", notwithstanding the US having the most expensive healthcare with some of the worst results and the least government involvement today in the OECD), or that countercyclical spending during a recession is a bad idea (probably as they have little faith that the government will cut debt in the future… true since 1980, excepting, ironically, under Clinton). Those people are not questioning the methods of the Obama administration and Congress; rather, the substance.

Its not clear to me what the Democrats should do here. Shifting their proposals to the right, as their base would say they have been doing, loses them support on the left (though its not clear where those voters are going to go, other than stay home). Shifting to the right also makes them more vulnerable to their right leaning voters switching to Republican proposals - proposals that appear increasingly similar to Democratic ones, but less vulnerable to the "I hate whoever is in office because I'm out of work" type of voting.

Clearly, the American center of gravity that shifted right with Reagan is still there. If the jobs outlook turns sufficiently by the mid-terms, the Democratics may retain enough control of Congress to deliver on programs that help push that center to the left. If not…

…maybe I'll move to Norway :)

Today I went, as I do almost daily, to the local grocery store to get a few things - juice, pasta, etc. In other words, I went on a pretty ordinary journey.

In line for the checkout, I noticed a sign taped on the cash register "Donate to Haitian earthquake relief". I thought about what a good idea this was: you simply round up your purchase, and/or add a dollar, and the collected funds are sent to Haiti. It links a small, everyday action to global relief efforts. I had blogged earlier in the week about texting to give $10 to the Haitian relief effort, and this seemed like a great incremental way to contribute.

As I got closer, I saw that the donations went to a particular faith-based charity, however, and began to have second thoughts.

Why?

It wasn't because of an intrinsic opposition to faith based charities, or because it wasn't a charity or faith that I belonged to. But the charity in question, beyond (I guess) supporting Haiti, supports, due to their faith, a few things in society that I strongly disagree with, and that, in my view, cause particular harm in the developing world.

If they were the only charity available, I'd view that the short term necessity of getting aid to Haiti surmounted the longer range harm of the organization's policies.

But they're not the only organization available. In particular, the Red Cross is available and very engaged in Haiti. I consider the Red Cross (together with the Red Crescent) to be as straightforward, non-partisan, and secular in their global work as organizations can be. They're particularly appropriate for suggesting to broad segments of society, as the White House has done, and as the ads interspersed with the football games do. They're effective, active, and on the ground in Haiti.

So why does the grocery store tie itself in with the faith-based charity? I can only guess its because they support the organization's broader, perhaps more controversial, goals, as well as the immediate goals in Haiti.

As a result, I said "No, thanks" at the register, and endured the icy stare of the cashier and people around me. In a small way, this makes each trip to the store less pleasant. I can protest and say "No, I give to the Red Cross" nice and loudly - but that seems self-aggrandizing.

Maybe instead I'll just shop elsewhere.

No charity organization is free from baggage, and none are perfect. Its unfortunate, however, to think about how many organizations will use this fundraising occasion to bring in funds for purposes unrelated to the cause at hand.

Earlier today a friend of mine posted a story on Facebook (yep, can't link to the closed world of Facebook) about a cruise ship docking at the company's private peninsula in Haiti. There was much disgust from passengers on the ship, and in the comment thread on the story, that the cruise line would do this. Perhaps this will become a big story, and Royal Caribbean will do a nice round of public mea culpas.

I, however, don't understand why.

That is, I understand why in the symbolism sense: people hear the story, and construct for themselves a vision of the cruise ship passengers bathing in champagne while bodies pile up around them and the starving beg them for scraps. This is not whats actually happening, though.

Whats happening is that the ship is docking on a private peninsula, and donating all of the proceeds from docking there to Haitian relief. They are also, apparently, bringing relief supplies.

Its quite possible that they are bringing a small amount of relief supplies. Its also possible that there are Haitian locals who need to report into work to assist the ship, and this is distracting them from helping in the relief effort. As far as I can tell from a quick check on Google Maps, Labadee, Haiti is 140km or so from Port au Prince, close to the epicenter of the earthquake, so its unlikely that in a poor country like Haiti, especially after an earthquake, anyone can make it 140km to the epicenter to assist in a meaningful fashion. But its possible that this is occurring.

None of these aspects were part of the criticism in the article, though. What the article criticized was people vacationing near poverty and despair. This feels somehow wrong, and, as I said at the top, surely overt display of luxury right in the face of suffering would feel very uncomfortable.

And yet - we do this all the time. We do it when we step over the homeless person in front of the grocery store on our way in to buy luxury groceries for a dinner party. We do it when we go to a business meeting in, say, Kuala Lumpur or Johannesburg, and the hotel limousine takes us by miles of shantytowns on our way to the Four Seasons. We do it in New York, enjoying the latest night life around the corner from housing projects.

And I'll maintain that, for the most part, we'll continue doing it.

Why? One part of my thinking has to do with the question of the degree of our duty to assist others vs enrich ourselves. The second is the weight that proximity should have on this duty.

Part one is a difficult question. There are great people throughout history who have taken the position that they cannot sit idle without trying to remove suffering from the world. In modern times, one can think of Martin Luther King and Mahatma Gandhi, elites within an underprivileged group who chose, rather than a quiet life of complicity with the system, to champion the rights of others, and, by so doing, changed the world. Or, lesser knowns heros like Raoul Wallenberg, who saved the lives of thousands of Jews in occupied Europe, only to die in a Soviet camp after the war. Or even one time acts of individual heroes, like Pete Goss, who sailed forty eight hours into an Antarctic hurricane to rescue fellow competitor Raphael Dinelli - an act for which he was greeted, at the finish line in La Rochelle, by a million fans shouting "Peter the Great!", and rewarded the Order of France.

The reason why we think these people are great is that they chose to dedicate themselves, for a lifetime, or for a short period in which they risked their lives, to saving others, often at a great cost to their own wellbeing. The rest of us remain (in the rich world) working through our simple and personal issues, helping our friends and families, donating when we can, in an essentially grey zone between complete altruism and complete selfishness - with, if we were frank, the needle often much closer to the selfishness than the altruism side. Realistically, most of us spend 95-99% of our resources (time and money) on ourselves and, if we have them, our immediate families.

Is it right? Its probably not right. Peter Singer, in Famine, Affluence, and Morality, argued more cogently than I might that it is immoral for those living in relative luxury not to reduce the suffering of others when to do so would have little impact on themselves. Notwithstanding Singer's views, this affirmative duty of care (ie the idea that you must help) is not widely held by philosophers, or in society today. Instead, we celebrate those who help, privately wishing we had more conviction and would ourselves do the same.

What does this have to do with the cruise ship? Well, those passengers are the same as us. They've purchased their luxuries, and given (probably) very little of their overall wealth to strangers. To the extent that they've given money to the cruise line which will in turn contribute it to Haitian aid, they may well have, inadvertently admittedly, given more to Haiti than the rest of us: 5% (my guess) of their $3000 cruise is $150, considerably more than the $0.67 per American than private individuals have donated so far (based on the American Red Cross receiving $203 million from a population of 304 million).

Which brings me to the second part of my point: the real difference between us and them is symbolic. They are closer to the dispossessed than we are, and so, perhaps in our own guilt about not doing more from afar, we think they should do more from close up. And our idea of that "more" is to remove the symbolism of doing nothing, by refusing to have the ship dock in Haiti.

And if they refuse to dock in Haiti, what happens? The donations go elsewhere. The aid goes elsewhere. The salaries and tips that would have gone to local Haitians, if any, go elsewhere.

In other words, the Haitian people are harmed, but in our outrage, we feel better. We give Haiti $10 via texting to 90999, and move on to rail about others' selfishness.

Wednesday night I went to an event in New York about technology.

At that event at the end, the organizer noted we could text 90999 to send $10 to help the Haitian relief effort (US only I'm sure, but there are likely others in many other countries). There were 55 people checked in on foursquare, so I'm hopeful there were enough mobile groupies to make a contribution here. I know I did.

Photos are filtering out from news agencies of tremendous suffering. This one from the New York Times caught my eye:

1

There's a lot of other stuff going on in the world and our lives.

And one could argue that the US government, like many, is already mounting a relief effort.

But these efforts always run out of funds, especially when it comes time to rebuild. This is a quick way to send some help directly, while all other approaches get organized. Please participate, and/or retweet if you can.

This is probably a little late, but I've been meaning to weigh in on the discussion about whether or not those accused of the 9/11 attacks should stand trial in New York.

A common thread of those opposed to this seems to be that the terrorists "shouldn't get the rights of Americans and the benefit of a criminal trial in an American civilian court".

These people frighten me with their ignorance. America applies the rule of law to those accused of committing crimes (or, its supposed to). This is one of the things that vaunted American Constitution thing talks about. No lettres de cachet, no bills ex post facto, application of habeas corpus, right to a trial by your peers, innocent until proven guilty, right to counsel, etc etc etc.

These rules don't just apply to American citizens!

Do these critics believe, for example, that a Mexican or Canadian caught in, say, New York, and accused of stealing your car can just be drawn and quartered, whereas an American citizen would get a trial?

Pity if they do.

It means that, whether through simply the viral spread of ignorance in America, or knee jerk hysterical responses to terrorism, the understanding of human rights which has hitherto underpinned political thought in the Western world, is already grievously eroded.

I had another post planned for today, but came across this cartoon, from the Philadelphia Inquirer cartoonist Tony Auth, in the New York Times Week in Review round up of cartoons:

Quite.

Before Christmas, a friend of mine posted this article about an innocent man freed after 35 years in jail.

Its beyond difficult to imagine what it would be like to be convicted for something you didn't do. Kafka wrote about it, but really about the bizarre and byzantine trial, not the aftermath of sitting in jail everyday wondering why.

There was much debate on the article on Facebook (can I link back to a Facebook discussion? I don't think so…). In short, the nature of the trial encapsulates my bottom-line rationale for my opposition to the death penalty: My opposition is fundamentally epistemological.

Advocates of the death penalty suggest that its possible during the trial phase to be "sure that we're sure". I'm not so sure we can be sure that we're sure :). In this case, for example, the man was convicted on eye-witness testimony. Leaving aside deliberate lying or coercion, here is one disturbing factoid about eye-witnesses:

At the same time, numerous psychological studies have shown that human beings are not very good at identifying people they saw only once for a relatively short period of time. The studies reveal error rates of as high as fifty percent — a frightening statistic given that many convictions may be based largely or solely on such testimony. 1

Hard to believe? Well, what color were the eyes of the pizza delivery man last week? How tall was he? Did he have a gold tooth? Maybe you remember (or, about which more in a moment, you believe that you remember), but do you really think everyone does? Particularly an event from long ago, perhaps in poor light, viewed from a distance, a night, perhaps a rare event where you "cannot believe its happening"?

Maybe. But this notion of what we know, and how we know that we know it, and how we can define the degree of certainty of our knowledge, is what epistemologists try to work on. And its not easy.

Try describing something you're certain about. Thats pretty easy. Now describe how you know you're certain. Thats not too hard, usually. Now, try describing how you define the type of knowledge that gave you that level of certainty. Harder.

This is something we're just not generally that good at. We don't often think about how good our knowledge of something is, and how we'd define the type of goodness that our knowledge has. In fact, we struggle to find the right words to describe these types of problems. At least I do, as you can tell reading this!

Thats what led me to think about language. Can we express ideas we don't have words for? Noam Chomsky famously argued yes, with Benjamin Lee Whorf on the "no" side. I had always thought that Chomsky was viewed as the winner about linguists, but a look at cultures very foreign to ours with very different linguistic structures makes one wonder:

Tuyuca [a language of the eastern Amazon] requires verb endings on statements to show how the speaker knows something. Diga-ape-wi means "the boy played soccer (I know because I saw him)", while diga ape-hiyi means "the boy played soccer (I assume)". English can provide such information, but for Tuyuca that is an obligatory ending on the verb. Evidential languages force speakers to think hard about how they learned what they say they know 2

I'd assume Tuyuca-speakers are much better epistemologists than us. Unfortunately, there are fewer than 1000 of them left.

Time to bring them up here for training as judges?

Hmmm I was writing the other day about good vs crappy companies and realized I may have made my moral of the story a bit unclear. To clarify a bit: my point wasn't supposed to be that people prefer crappy companies. Rather it was that, given the implicit incentive structure, they should prefer crappy companies. And that people who understand money frequently do prefer crappy companies.

Since employees' own actions can make companies crappier, and potentially more lucrative, we've got a significant incentive for a slice of really good people to focus on finding the crappiest companies they can, and make them crappier, through taking outlandish risks and proposing highly lucrative compensation schemes.

By contrast, one of the things "well managed companies" do is manage compensation and stock price volatility. This benefits lifers and those who get to a very high level, but its a throwback to the "jobs for life" days. For most employees, since they have no job security and should have no belief in benefits contracted to be delivered in the future, they're better off taking the money now, and to hell with the company.

(I probably should've been clearer that I'm using "well managed" and "badly managed" here in the MBA/financial management sense. By this measure, IBM is well managed, and, say, Enron is badly managed. On more nebulous grounds, like people management or innovation or new product introduction or whatever, an entirely different list of firms might float to the top)

Again, what's the solution? Until owners get their eye on the ball, we should rationally all follow the bankers: when evaluating corporate alternatives, just take a crap.

I wrote about pay a day or so ago (then got caught up in a long day with customers here in London so dropped the ball yesterday, for which I apologize). The comments (direct and offline) got me to thinking a little bit about pay in "well run" vs "badly run" companies. In the following, I'm really talking about medium to large companies, rather than startups or small businesses run for lifestyle or pure cash generation (vs large exits characteristic of the aim of start up companies).

I'll start with an assertion regarding large organizations: in general, people work to make money. Its true that people say things like "I love my job", or "I like what I do" (similar but not identical statements), but, in contrast to, say, leisure, I think few people even in the relatively higher ranks of large corporations are working for sheer joy. They're working for money. "Money, all things considered", perhaps (meaning "I need money and this is the best compromise I can find"), but money.

I know this is a bit heretical to say out loud, particularly in our culture of positivism. But I'm sticking with it.

So, given that you work for money, you're most likely to compare the job of Senior Vice President, Whiteboard and PowerPoint Productions, at Company A, with the job of Senior Vice President, Optimistic Internal Presentations and Meetings, at Company B, based on the probable return to you.

Company A says to you: "We pay double the industry average. And our stock is up 100% in the last year".

Company B says: "We're very well run. We're a hundred year old company and have never had any scandals or issues. We're cash rich. And we pay in the top quintile of our industry".

Company A's offer is $600K cash and 10000 shares, where the shares have to be held for three years. Company B offers $300K cash and 25000 shares, where the shares have to be held for six years. Both hold out the expectations of additional annual stock grants, on the same long term holding terms.

You research Company A. Its true their stock has doubled in the last year. But their stock is a roller coaster: it goes up 5x, then down 5x. Company B is solid: their stock varies about 10%.

Stories on "Excellence in Compensation" and "Excellence in Management" abound about Company B. Company A stories are all on "Company A: Disaster Again" or "The Reasons behind the recent stunning success of Company A" (depending where they were that day on the stock roller coaster).

The head hunter (you do use a head hunter don't you? Well, not if you're unemployed - see for example "Traditional search firms can take six months or more to fill a sudden vacancy, not least because they only look at people who already have jobs", but thats another story of absurdities) says to you "Company B is very very solid. Thats the play to make in the long run".

I say to you, my friend, "In the long run, we're all dead". You can pocket the cash from Company A today, and play the beta on their stock to make a lot more money. Company B will leave you with half the money, and few share gains.

This relates to my story on banker's pay how? Well, bankers work in the money business. They may be stupid, but they're not stupid about money. Running the company badly today pays them the most. If the company dies, so what? Even if their long term comp has shares at risk tied up, also so what? Some shares will have vested, a clever board room can announce bad news around share grant pricing day and good news around annual share vesting day, and everyone can make lots of money.

The sad story: the poor shareholder (unless the shares are in a bank. Then its "poor citizen", backstopping the losses of companies that are too big to fail).

The moral: until the normal employee (or even upper middle manager/exec as per the example above) is better rewarded at a well-run company than at a badly one run, people will should flock to the crappy ones for the cash.

This is a subject that seems to fascinate many these days, particularly those yearning after a few extra shekels themselves (which is I think everyone, but I don't want to rule out those virtuous monks or aid workers or others who may well have transcended materialism).

I was much swayed by an article (which I can't find…) arguing that buyers' price sensitivity decreases dramatically when they are engaging someone's services for a "rare" event. In other words, you're not looking for the discount i-banker for your IPO (or the discount wedding planner for your wedding, or the discount heart surgeon for your bypass), as you don't do a lot of them and feel the downside risk greatly outweighs to possibility of overpaying.

For these rare events, if they were like normal products, you'd carefully scrutinize Consumer's Reports (or whatever) and pay a premium to avoid failure. But for products like those above, which are difficult to rate and evaluate, we begin to pay a premium for reputation. "Brand" trumps all other elements, and disproportionate prices (and gains) accrue to those with the best brands. See Goldman Sachs

The same phenomenon might explain why individual bankers are paid so much by their companies. One might think that a company making outsized profits would continue to manage expense, including payroll, to drive up profits further and return more to shareholders. But banks seem to prefer to pay half their revenue as compensation, paying star employees a fortune.

In other sectors, like technology for example, businesses have really tended to do this only with long term compensation in the form of stock (biased heavily towards those who took the risk to join early, as well as, through vesting provisions, forcing many to stay longer), and cash compensation, direct as well as deferred like pensions, has been under considerable pressure. IBM, for example, downward revised its pension benefits multiple times over the past decade, citing competitive pressures. If the rules of banking applied, others would have improved their pensions instead, to compete for IBM talent.

So whats the difference? Like I said, perhaps the banks benefiting from brand in earnings are captive to brand in individual payouts. They're worried that customers are attracted to star employees Bob and Sally, not just the overall bank, and that Bob and Sally will take their customers with them to the next bank if they're not paid out enormously.

(See a related view here, arguing that banking products are commodities, so exceptional sales people are required. Not sure this convinces me why price competition is low, though)

Do I believe all this? Well, the alternative is a kind of conspiracy theory, where one assumes a sort of cartel meets agency risk type of nefarious collaboration inflating wages. That is, the CEO of Goldman figures his own bonus can be higher if others bonuses are also higher, and implicitly collaborates with other CEOs to do the same, thus failing in his supervisory (and fiduciary) duty to control expenses in the form of compensation.

I like that theory. But if its true, why don't CEOs in other industries do it too? Everywhere else, cutting payroll expense boosts return to shareholders and in turn boosts CEO comp.

As the foreclosed homeowner might ask, reading of record bonuses after banking bailouts and profit subsidies, why are bankers special?

I was thinking today about what people on the "left" and "right" tend to think. Here is my (reductionist and oversimplified) table:

So there is one point of agreement: foreigners are bad people harming America! :)

Leaving that alone and back to my real point: as I thought this through, what amazed me was less the the difference between "left" and "right", and more the way it seems that most people buy an entire column (source: Nigel's perception, no data here…). I wonder if this is because all the points in a particular column are supported by the same root theses (or, worse, axioms), or because people are practising "values tribalism" and clustering around those they agree with?

A few days ago I posted on the narrow tax base in New York. There was a little commentary on the Gini coefficient, and rather more on how we should bias votes by tax paid, or something like that. My general point was really "Wow we're becoming an unequal society, which is bad for everyone as it seems to exacerbate the booms and busts in the economic cycle".

Anyway, all this led me to offer my point on tax. At some level, one view of tax is that it is a compact between the members of society. In essence the poorest people say to the richest "We won't storm the barricades and kill you if you give us a few crumbs from the cake".

As America gets more unequal, the view here seems to be shifting to thinking that tax is a gift, where the rich people condescend to throw some charity to the poorest out of the goodness of their hearts. So stats on how few people are paying tax, rather than leading people to wonder "WOW why are so many people under the taxation income threshhold?", seem to lead people to wonder, "WOW why can't I have even more?"

To illustrate my point more thoroughly: imagine a society with a Gini coefficient of 1.0. That is, one person has everything and the rest have nothing. In our imaginary society, the ruler lives in a castle on a hill, surrounded by serfs farming his land, raising pigs. The ninety nine serfs own nothing, and the ruler lives in luxury off their efforts. Each serf raises a pig on behalf of the king, meaning there are ninety nine pigs in the land. The wealth of the nation is basically "Ninety nine pigs + one castle and belongings + ninety nine serfs and their huts".

Imagine the ruler at a dinner party, entertaining a visiting king, sipping champagne from the golden slipper of a dancing (serf) girl. The visitor proposes that he'd buy more of the pigs, if the king could get them there faster. The king then thinks "I'll build a new road. Then I can sell more!"

Swiftly, though, he becomes embittered. He already pays for everything in the society - he buys the pigs, he feeds the serfs, he pays for the banquets for visitors. Why shouldn't everyone pay their fair share of the road? There are one hundred people in the kingdom, so he proposes each person pay 1%.

To raise his 1%, the king has one less glass of champagne at one meal. The serfs each sell their prettiest daughter into slavery in neighboring kingdoms. The road gets built, and society is twice as rich from the resulting trade: there are now two hundred more pigs - one hundred and one equal to the value of the castle and huts (well, I made that up. Hey - I made the whole thing up!), and ninety nine pigs on top of the initial ninety-nine pigs. Our ruler is a happy guy, with his 299 pigs.

Of course, it being a society of perfect inequality, the richness benefit flows 100% to the king, and 0% to everyone else. The impact of the "tax" on him was hardly noticeable, whereas it caused extreme duress to his subjects, and they benefited in no way. He congratulates himself on his business acumen, and marvels at how fair taxation has unleashed growth.

Perhaps the beleaguered peasants, bereaved from the heavy price they've paid, revolt and slay our despot. Perhaps instead they propose, "Why don't you pay 70%, give us each one pig, and we'll pay the other 30% next year, at tax return time?"

On this basis, the king would only get 200 pigs right away, and another 33 the next year. He also had to forgo 70 glasses of champage, as he paid 70% rather than 1%.

What does the king do? Obviously, he joins the Heritage Foundation, and argues how unfair taxation has harmed growth, impacted his business results by 23%, and decimated his champagne inventory.

What do the peasants do? Rejoicing in their new pigs - almost 0.7 pigs per person by the end of the year, vs 0.0 pigs the previous year - they send that Vladimir Ilyich Lenin guy packing, telling him to check in next year.

In the few years I've been running liketribe and now Nigel Beck LLC, I've been compelled to work more closely with banks than one does as a "mere" employee. This is nothing fancy, not even something as mundane as the (apt) discussions about credit squeezing small businesses. My primary issue today is simply how inefficient US banks are.

Its amazing to me that cheques (thats Canadian for "checks") are held for so long before they're cleared. Looking at the Federal reserve regulations, "non-local" cheques (the slowest ones to clear) must be available by the fifth business day after deposit, and "exceptional circumstances" (defined by Regulation 229.13) allow a non-local cheque to be held for another six business days, for a total of eleven business days.

Now, that same Regulation 229.13 allows the bank to extend clearing past eleven business days for "emergency conditions". A war or a catastrophic power failure is an example of an emergency condition.

So I looked back at my experience depositing cheques over the past year or so. Depositing a Canadian cheque into my US bank account has taken as long as thirty three business days to clear. Thirty three days! Clearly, a cheque from a Canadian bank (rated #1 in the world for soundness, compared to the US banks at #40) counts on the level of an emergency, like war.

Interesting. In 2008, Canada-US bilateral trade was almost $600B. Thats as much trade as US trade with China and Japan combined, and 25% more than the combined trade of the top six nations of the EU with the US.

So can clearing a cheque from Canada be as unusual and dramatic as a war, requiring more than a month for a modern, highly electronic institution like a bank, where trades are routinely made electronically in subsecond timeframes?

Consider another, more common kind of cheque - a non-local cheque being held for five to eleven business days. Eleven business days means a cheque deposited on a Tuesday, the 1st of December, will clear on December 16th.

Thats exactly one pay period for businesses paying people on a normal semi-monthly basis. In fact, its one day AFTER a normal business would have to pay salary. Its so slow that you could board a cruise ship, stopping in London, Invergordon, Lerwick, Reykjavik, Nuuk, Halifax, and Boston, and still arrive before the cheque clears.

No wonder credit availability constrains small businesses. I wonder what percentage of operating loans exist to cover business operations while waiting for cheques to clear (as opposed to waiting for them to arrive)?

If Brazilians have experienced clearing all cheques in twenty four hours for more than a decade, surely the US, with the most advanced economy in the world, the greatest inventors of IT, the most widespread users of IT, could manage the same? Well, in fact, it gets better: it turns out the US banks have invested in this, in the form of the Check 21 system that accelerates clearing cheques. Note the definition:

Because of Check 21 and other check-system improvements, your checks may be processed faster–which means money may be deducted from your checking account faster

The investment in "faster", it seems, means "taken out of your account faster". For "faster" as in "put into your account faster", the consumer shall, I suppose, continue to wait.

Or move to Brazil.

The Copenhagen summit starts tomorrow, the virtuous Danes are powering their nation with wind and converting to electric cars, the Danish prostitutes have graciously consented to extend their hospitality free of charge… and many in mainstream American politics are debating whether America should take part in any deal whatsoever. How could such rudeness be extended to nice people like the Danes?

On a serious note,its seems American reluctance stems from many fronts, but one oft repeated question is the "is it really getting warmer" one. I like the position noted in this week's Economist. The range of climate change this century is unknown and much debatable, but is likely somewhere from 1.1C to 6.4C. At 1.1C, we all get a little more sun. At 6.4C, c'est la déluge.

So, as Lenin said once, what is to be done? It seems about 1% of global GDP would mitigate the risk, be it sun burn or Apocalypse. Compared to 5% of global GDP to rein in the havoc caused by the bankers, this seems like a pretty good deal to me.

And what if all the scientists are wrong? Well, first, it seems unlikely that 6.5 billion people burning stuff all day and night to generate warmth and electricity and drive their cars isn't doing anything, given that the odd volcanic eruption (like Krakatoa) managed to cool the earth for a year or so. In 1800, there were a billion people on earth, no cars, ships sailed instead of burning diesel, and yet the coal burning in London was enough to create a state of continual fog. Probably, my layman's common sense thinks, our vastly greater consumption of energy, across the globe, by a population already more the six times as big, and headed to ten times as big, is warming things up at least a bit.

Second, this looks to me like simple risk management. Your neighbor probably won't smoke in bed and burn your house down, but, in case he or she does, you maintain fire insurance and contribute to the existence of a local fire department.

So, even if the nice photos of the melting ice caps and stranded polar bears, viewed from the cool mid-century modern Jacobsen furniture in Copenhagen, didn't win me over, I guess I'd have to think of it as prudent risk management: cut emissions, make the world a little less gross, hedge against The End, and make the Danes feel cool.

Skål!

I was looking around at some statistics today in connection with something else (in fact, in connection with a blog entry I was writing about people not siting the facts, which I then couldn't find!), and came across some interesting stuff in the Pew Global Attitudes Project Pulse On Europe report.

Its interesting to look at what people say they believe on a couple of questions and compare them. Of course, people have no obligation to be internally consistent, but I thought a comparison of answers on "Was life better under communism?" and "Are you satisfied with life?" to be kind of interesting.

To be fair, the periods under comparison - 1991 and 2009 - are both after the end of communism. One could argue that 1991 though at least reflected some of the infrastructure, social mores, lifestyle, etc that had been built up in the communist era, and so is a passable proxy for how people might have felt at least within a few years of the end of communism.

Picking Russia as an example, 7% of people said they were satisfied with life in 1991, vs 35% now. Yet 60% think life now is worse or the same as under communism! So they're much more satisfied now, although life is much worse….

Hungary is another interesting example. Only 8% of Hungarians were satisfied with life in 1991, and only 15% now. (Gloomy place, this Hungary…). Unsurprisingly then, 88% say that life now is worse or the same as under communism. Even though they're twice as satisfied, since they're generally downbeat, I suppose thinking some other condition was better kind of makes sense. Interestingly, though, 42% of them think Russia's influence on Hungary was negative, and only 15% think it was positive.

But 72% of people say they're worse off than under communism. Which came from Russia. Which was a negative influence.

People's views don't always make sense. Certainly these ones, at least as asked and as I've summarized them, don't make sense at first view. Perhaps the most telling fact is this: 54% of Hungarians and 60% of Russians think success in life is determined by factors outside our control (compared to 29% of Americans). Certainly that perspective would make one view other periods in history as better than today, and outsiders as being the problem.

Today I noticed this (courtesty @fredwilson): "Mayor Bloomberg at the NYSE this morning: 5,000 of the 8mm NYers pay 30pcnt of NYC taxes"

This is a stunning statistic. Its probably what the tax base would have looked like in the Gilded Age, if they'd had taxes (or at least income taxes).

Some may view this as a point that the wealthy pay too much tax. I view it more that a larger and larger percentage of the wealth is in the hands of the few (especially since the top marginal tax rate has roughly been cut in half since 1980 - the only way the take could have gone up is a vast increase in wealth at the top). In "The Crash of 1929", JK Galbraith (writing in 1955) identified this as one of the five causes of the Great Depression.

Why? Poor people have very little discretionary income, so their spending fluctuates very little. When a large amount of wealth is held by a very small number of people, the majority of the discretionary spending, and hence the spending fluctuations in the economy, comes from the actions of a few. If those few feel lucky, we get thousands of Bulgari outlets soaking up their spending. When those few are hit, they stop spending and the economy as a whole screeches to a halt.

Hopefully today's job loss numbers (downward revised, and "only" 10K jobs lost in November) and Case-Schiller index (3% house price increases) mean we're not going to be riding the rails in search of work. Galbraith's analysis, though, is still worth thinking about as we find our way out of recession and debate various public policies.