Quote of the day

Paragraph of the Year

From Reihan Salam:

To really learn from the Chinese, and to enjoy such staggering growth rates, we should go about things differently: let’s have a Maoist insurrection followed by a civil war that lasts for several years. Then let’s destroy most of the wealth in the country, and drive out millions of our most enterprising and educated citizens by launching systematic terror campaigns during which millions of others will die in violence or of starvation. Next, let’s have a modest economic opening in coastal regions: impoverished citizens will be allowed to launch small-scale township and village enterprises and components will be assembled in a handful of cities by our stunted descendants. Then let’s severely curb those township and village enterprises because they represent a potential political threat and invite large foreign multinationals and state-owned enterprises [let's not forget those!] to work our population to the bone at artificially suppressed wage rates, threatening those who complain with serious reprisals up to and including death. Let us also initiate a population control policy designed to improve our dependency ratio for a few decades. As large numbers of workers shift from low-value agricultural work to manufacturing, we will experience … rapid growth! Mind you, getting from here to there will involve destroying an enormous swathe of our present-day GDP. And that sectoral shift from rural to urban work will run out of gas pretty fast, as will the population control policy that will guarantee rapid aging.

There’s nothing I find more annoying than people who talk about how we need to learn from China’s “success.”  I’m all for learning from other countries, but can we please focus on actual success stories (Denmark, Switzerland, Singapore) and not a country that is much poorer than Mexico.

Something has to give

Guess Which Country Has Debt Of Nearly 1000% Of GDP...

Congo has had a bad time with the modern world

A Non-Election In A Non-Country

WALTER RUSSELL MEAD

Welcome to the “Democratic Republic” of the Congo, called the world’s least developed country in the United Nations. (Eat your heart out, Afghanistan.) Elections here are a joke, and not a funny one. The most recent presidential and parliamentary vote is currently being counted, but early reports sound familiar: The incumbent president is accused of rigging the vote and intimidating the opposition; an opposition leader claims an early victory without evidence; deaths are reported on all sides of the political divide; and even the UN, despairing, left the management of the election to an ally of the current president.

Even worse? The ballots have too many names on them, making the ballot cards themselves too bulky to fit through the slot of the plastic tub meant to collect votes. 15,000 people are running for Parliament, eleven for president.

Joseph Kabila, the DRC’s current president

That was the story from central Africa during this week’s Congolese elections. The vote, scheduled to begin and end on one day, had to be extended because many polling stations, deep in the bush, were late in receiving ballot cards. The NYT reports:

Joseph Kabila, 40, Congo’s president for the last 10 years, is incredibly unpopular in many parts of the country, especially the innumerable slums that dominate Kinshasa, the capital.But all signs point to him trying to hold onto power, at all costs.His soldiers have already killed several opposition supporters, including up to nine this weekend during an election-related fracas. United Nations officials and other election observers say Mr. Kabila’s men are stuffing ballot boxes, intimidating voters and bribing people to vote for the president…Corrupt politicians and businessmen permeate the highest levels of society. In every indicator measuring democracy and prosperity in countries around the world, Congo ranks at or near the bottom.

“Organize” is the wrong verb to describe the process of preparing this election. Many polling stations were deep in the countryside; election monitors reported some citizens walking for days to cast their vote. As the Guardian reports:

Some 35m ballot papers printed in South Africa and 186,000 ballot boxes made in China have to be distributed to 63,000 polling stations in a country two thirds the size of western Europe. There is minimal transport infrastructure, but they will do whatever it takes: using foreign helicopters, dugout canoes and boxes balanced on heads carried along bush paths.

The sheer waste of resources involved in shipping ballots by helicopter to people who can barely read for an election that will be rigged is a fascinating testimony to the power of ideology over reality in the do-gooding world of the international development bureaucracy, but an expensively fraudulent election is hardly the most costly or the most disastrous intervention that well-intentioned bureaucrats have imposed on Africa in sixty years of serially flawed “development” initiatives.  But to believe that this process will lead to an effective democratic government in the DRC is as misguided though perhaps as touching as the belief of certain New Guinea tribes that by building fake landing strips and hangars they could lure more cargo rich airplanes out of the skies when the end of World War Two terminated Allied use of New Guinea as a transshipment route for the war effort.  No doubt the “development professionals” and NGO staff earning high five and low six figure salaries feel competent and fulfilled as they bustle pointlessly about, shuffling and counting papers; no doubt that many a memo will be written and many a report produced by people who think they are accomplishing something; no doubt the New Guinea tribes thought hard about the best places to put the fake landing strips.

(One purpose of serious educational reform in the western world would be to reduce the number of professionally credentialed people who can’t tell the difference between pointless make-work and displacement activity on the one hand and on the other, actual progress on making the world a better place.  Far too many college kids think that working for a “development” NGO is a way to change the world.)

King Leopold II of Belgium (1835-1909)

Congo has had a bad time with the modern world. The despicable Belgian monarch King Leopold II ruled Congo as a personal fiefdom and inspired Joseph Conrad’s masterpiece Heart of Darkness; George Washington Williams, an African-American writer helped expose his grotesque misrule and force the king — who today would likely be indicted for crimes against humanity — to give up personal control of the colony.  Things have not gotten all that much better in the last 100 years.  The Belgians who succeeded Leopold misgoverned the country about as badly as any Europeans misgoverned anything in the 20th century.  When they left, ethnic internal conflicts, the discovery of vast mineral wealth, and Cold War tensions produced some of the worst governments and bloodiest wars of the era.  Of all the places where the US tolerated and even supported despotic, murderous, corrupt and incompetent rulers in the interests of containing Soviet influence, Congo perhaps had it worst.  After the Cold War the eastern part of the country got caught up in the genocidal Hutu-Tutsi conflict; the chaotic power vacuum in mineral rich eastern Congo drew in mercenaries and arms from all over the region as various African governments sought control over strategic terrain or important mineral deposits.

The central government has never really run the whole country. Much of the country lacks access to basic services. In one of the more depressing illustrations of the unfulfilled dreams of modern Congo, in 2006 the country’s experimental nuclear reactor outside Kinshasa was “protected” by a rusting chain link fence filled with holes, an open front gate, a “security guard” clad in a tracksuit, and a single key giving access to a few bars of highly enriched uranium, two of which vanished in the 1970s.

Congo today is mostly devoid of hope for progress. Millions have died to keep this shambolic country going. Breaking it up along regional or ethnic lines would challenge the fragile unity of other African multi-ethnic states, perhaps plunging this part of the continent into wider conflict. But holding it together may just be a different route to the same destination.

Rebuilding that “shining city on a hill”

The End of the American Era

By Stephen M. Walt [2]

THE UNITED States has been the dominant world power since 1945, and U.S. leaders have long sought to preserve that privileged position. They understood, as did most Americans, that primacy brought important benefits. It made other states less likely to threaten America or its vital interests directly. By dampening great-power competition and giving Washington the capacity to shape regional balances of power, primacy contributed to a more tranquil international environment. That tranquility fostered global prosperity; investors and traders operate with greater confidence when there is less danger of war. Primacy also gave the United States the ability to work for positive ends: promoting human rights and slowing the spread of weapons of mass destruction. It may be lonely at the top, but Americans have found the view compelling.

When a state stands alone at the pinnacle of power, however, there is nowhere to go but down. And so Americans have repeatedly worried about the possibility of decline—even when the prospect was remote. Back in 1950, National Security Council Report 68 warned that Soviet acquisition of atomic weapons heralded an irreversible shift in geopolitical momentum in Moscow’s favor. A few years later, Sputnik’s launch led many to fear that Soviet premier Nikita S. Khrushchev’s pledge to “bury” Western capitalism might just come true. President John F. Kennedy reportedly believed the USSR would eventually be wealthier than the United States, and Richard Nixon famously opined that America was becoming a “pitiful, helpless giant.” Over the next decade or so, defeat in Indochina and persistent economic problems led prominent academics to produce books with titles like America as an Ordinary Country and After Hegemony.¹ Far-fetched concerns about Soviet dominance helped propel Ronald Reagan to the presidency and were used to justify a major military buildup in the early 1980s. The fear of imminent decline, it seems, has been with us ever since the United States reached the zenith of global power.

Debates about decline took on new life with the publication of Paul Kennedy’s best-selling Rise and Fall of the Great Powers, which famously argued that America was in danger of “imperial overstretch.” Kennedy believed Great Britain returned to the unseemly ranks of mediocrity because it spent too much money defending far-flung interests and fighting costly wars, and he warned that the United States was headed down a similar path. Joseph Nye challenged Kennedy’s pessimism inBound to Lead: The Changing Nature of American Power, which sold fewer copies but offered a more accurate near-term forecast. Nye emphasized America’s unusual strengths, arguing it was destined to be the leading world power for many years to come.

Since then, a host of books and articles—from Charles Krauthammer’s “The Unipolar Moment,” G. John Ikenberry’s Liberal Leviathan and Niall Ferguson’sColossus to Fareed Zakaria’s The Post-American World (to name but a few)—have debated how long American dominance could possibly last. Even Osama bin Laden eventually got in on the act, proclaiming the wars in Iraq and Afghanistan fatal blows to American power and a vindication of al-Qaeda’s campaign of terror.

Yet for all the ink that has been spilled on the durability of American primacy, the protagonists have mostly asked the wrong question. The issue has never been whether the United States was about to imitate Britain’s fall from the ranks of the great powers or suffer some other form of catastrophic decline. The real question was always whether what one might term the “American Era”was nearing its end. Specifically, might the United States remain the strongest global power but be unable to exercise the same influence it once enjoyed? If that is the case—and I believe it is—then Washington must devise a grand strategy that acknowledges this new reality but still uses America’s enduring assets to advance the national interest.

THE AMERICAN Era began immediately after World War II. Europe may have been the center of international politics for over three centuries, but two destructive world wars decimated these great powers. The State Department’s Policy Planning Staff declared in 1947 that “preponderant power must be the object of U.S. policy,” and its willingness to openly acknowledge this goal speaks volumes about the imbalance of power in America’s favor. International-relations scholars commonly speak of this moment as a transition from a multipolar to a bipolar world, but Cold War bipolarity was decidedly lopsided from the start.

In 1945, for example, the U.S. economy produced roughly half of gross world product, and the United States was a major creditor nation with a positive trade balance. It had the world’s largest navy and air force, an industrial base second to none, sole possession of atomic weapons and a globe-circling array of military bases. By supporting decolonization and backing European reconstruction through the Marshall Plan, Washington also enjoyed considerable goodwill in most of the developed and developing world.

Most importantly, the United States was in a remarkably favorable geopolitical position. There were no other great powers in the Western Hemisphere, so Americans did not have to worry about foreign invasion. Our Soviet rival had a much smaller and less efficient economy. Its military might, concentrated on ground forces, never approached the global reach of U.S. power-projection capabilities. The other major power centers were all located on or near the Eurasian landmass—close to the Soviet Union and far from the United States—which made even former rivals like Germany and Japan eager for U.S. protection from the Russian bear. Thus, as the Cold War proceeded, the United States amassed a strong and loyal set of allies while the USSR led an alliance of comparatively weak and reluctant partners. In short, even before the Soviet Union collapsed, America’s overall position was about as favorable as any great power’s in modern history.

What did the United States do with these impressive advantages? In the decades after World War II, it created and led a political, security and economic order in virtually every part of the globe, except for the sphere that was directly controlled by the Soviet Union and its Communist clients. Not only did the United States bring most of the world into institutions that were largely made in America (the UN, the World Bank, the IMF, and the General Agreement on Tariffs and Trade), for decades it retained the dominant influence in these arrangements.

In Europe, the Marshall Plan revitalized local economies, covert U.S. intervention helped ensure that Communist parties did not gain power, and NATO secured the peace and deterred Soviet military pressure. The position of supreme allied commander was always reserved for a U.S. officer, and no significant European security initiative took place without American support and approval. (The main exception, which supports the general point, was the ill-fated Anglo-French-Israeli attack on Egypt during the Suez crisis of 1956, an adventure that collapsed in the face of strong U.S. opposition.) The United States built an equally durable security order in Asia through bilateral treaties with Japan, South Korea, Australia, New Zealand, the Philippines and several others, and it incorporated each of these countries into an increasingly liberal world economy. In the Middle East, Washington helped establish and defend Israel but also forged close security ties with Saudi Arabia, Jordan, the shah of Iran and several smaller Gulf states. America continued to exercise a position of hegemony in the Western Hemisphere, using various tools to oust leftist governments in Guatemala, the Dominican Republic, Chile and Nicaragua. In Africa, not seen as a vital arena, America did just enough to ensure that its modest interests there were protected.

To be sure, the United States did not exert total control over events in the various regional orders it created. It could not prevent the revolution in Cuba in 1959 or Iran in 1979, it failed to keep France from leaving NATO’s integrated military command structure in 1966, and it did not stop Israel, India, North Korea and Pakistan from acquiring nuclear weapons. But the United States retained enormous influence in each of these regions, especially on major issues.

Furthermore, although the U.S. position was sometimes challenged—the loss in Vietnam being the most obvious example—America’s overall standing was never in danger. The U.S. alliance system in Asia held firm despite defeat in Indochina, and during the 1970s, Beijing formed a tacit partnership with Washington. Moreover, China eventually abandoned Marxism-Leninism as a governing ideology, forswore world revolution and voluntarily entered the structure of institutions that the United States had previously created. Similarly, Tehran became an adversary once the clerical regime took over, but America’s overall position in the Middle East was not shaken. Oil continued to flow out of the Persian Gulf, Israel became increasingly secure and prosperous, and key Soviet allies like Egypt eventually abandoned Moscow and sided with the United States. Despite occasional setbacks, the essential features of the American Era remained firmly in place.

Needless to say, it is highly unusual for a country with only 5 percent of the world’s population to be able to organize favorable political, economic and security orders in almost every corner of the globe and to sustain them for decades. Yet that is in fact what the United States did from 1945 to 1990. And it did so while enjoying a half century of economic growth that was nearly unmatched in modern history.

Perpetual war, for perpetual "peace"

Imperial by Design

John J. Mearsheimer [2]

IN THE first years after the Cold War ended, many Americans had a profound sense of optimism about the future of international politics. President Bill Clinton captured that mood when he told the UN General Assembly in September 1993:

It is clear that we live at a turning point in human history. Immense and promising changes seem to wash over us every day. The Cold War is over. The world is no longer divided into two armed and angry camps. Dozens of new democracies have been born. It is a moment of miracles.

The basis of all this good feeling was laid out at the time in two famous articles by prominent neoconservatives. In 1989, Francis Fukuyama argued in “The End of History?” that Western liberal democracy had won a decisive victory over communism and fascism and should be seen as the “final form of human government.”¹ One consequence of this “ideological evolution,” he argued, was that large-scale conflict between the great powers was “passing from the scene,” although “the vast bulk of the Third World remains very much mired in history, and will be a terrain of conflict for many years to come.” Nevertheless, liberal democracy and peace would eventually come to the Third World as well, because the sands of time were pushing inexorably in that direction.

One year later, Charles Krauthammer emphasized in “The Unipolar Moment” that the United States had emerged from the Cold War as by far the most powerful country on the planet.² He urged American leaders not to be reticent about using that power “to lead a unipolar world, unashamedly laying down the rules of world order and being prepared to enforce them.” Krauthammer’s advice fit neatly with Fukuyama’s vision of the future: the United States should take the lead in bringing democracy to less developed countries the world over. After all, that shouldn’t be an especially difficult task given that America had awesome power and the cunning of history on its side.

U.S. grand strategy has followed this basic prescription for the past twenty years, mainly because most policy makers inside the Beltway have agreed with the thrust of Fukuyama’s and Krauthammer’s early analyses.

The results, however, have been disastrous. The United States has been at war for a startling two out of every three years since 1989, and there is no end in sight. As anyone with a rudimentary knowledge of world events knows, countries that continuously fight wars invariably build powerful national-security bureaucracies that undermine civil liberties and make it difficult to hold leaders accountable for their behavior; and they invariably end up adopting ruthless policies normally associated with brutal dictators. The Founding Fathers understood this problem, as is clear from James Madison’s observation that “no nation can preserve its freedom in the midst of continual warfare.” Washington’s pursuit of policies like assassination, rendition and torture over the past decade, not to mention the weakening of the rule of law at home, shows that their fears were justified.

To make matters worse, the United States is now engaged in protracted wars in Afghanistan and Iraq that have so far cost well over a trillion dollars and resulted in around forty-seven thousand American casualties. The pain and suffering inflicted on Iraq has been enormous. Since the war began in March 2003, more than one hundred thousand Iraqi civilians have been killed, roughly 2 million Iraqis have left the country and 1.7 million more have been internally displaced. Moreover, the American military is not going to win either one of these conflicts, despite all the phony talk about how the “surge” has worked in Iraq and how a similar strategy can produce another miracle in Afghanistan. We may well be stuck in both quagmires for years to come, in fruitless pursuit of victory.

The United States has also been unable to solve three other major foreign-policy problems. Washington has worked overtime—with no success—to shut down Iran’s uranium-enrichment capability for fear that it might lead to Tehran acquiring nuclear weapons. And the United States, unable to prevent North Korea from acquiring nuclear weapons in the first place, now seems incapable of compelling Pyongyang to give them up. Finally, every post–Cold War administration has tried and failed to settle the Israeli-Palestinian conflict; all indicators are that this problem will deteriorate further as the West Bank and Gaza are incorporated into a Greater Israel.

The unpleasant truth is that the United States is in a world of trouble today on the foreign-policy front, and this state of affairs is only likely to get worse in the next few years, as Afghanistan and Iraq unravel and the blame game escalates to poisonous levels. Thus, it is hardly surprising that a recent Chicago Council on Global Affairs survey found that “looking forward 50 years, only 33 percent of Americans think the United States will continue to be the world’s leading power.” Clearly, the heady days of the early 1990s have given way to a pronounced pessimism.

This regrettable situation raises the obvious questions of what went wrong? And can America right its course?

Another one down the drain

Egypt's Islamist Era

By Benny Morris

The world will probably have to wait for another six months before the dust of Egypt's revolution begins to settle. Meanwhile, after the completion of the first installment of the first stage of the country's first free elections, it is clear that Islamists will probably dominate Egypt’s political landscape in the coming years. This comes after the clear victories of Islamist parties in the parliamentary elections this month in Tunisia and Morocco.

Going into the elections, most opinion polls predicted that the fundamentalist Muslim Brotherhood would gain at least 40 percent of the vote in the elections for parliament's lower house, the People's Assembly, that began this week in a third of the country's provinces, including the major cities of Cairo, Suez and Alexandria. Next month and on January 3, two more bouts of voting will complete the election of the lower house, with counting and results due toward the end of January.

The lower house is due to debate and issue a new constitution—defining, among other things, the place and powers of the army and of Islam in the polity—and appoint from its midst a new government or cabinet. This will replace the incumbent interim cabinet appointed recently by the Supreme Military Council, which has ruled Egypt since the overthrow by mass street demonstrations of President Hosni Mubarak back in February.

In February and March of next year, Egyptians will go to the polls once again, this time to elect their representatives in parliament's upper house, or Senate, and by the end of June—if the military's leader, General Tantawi, is to be believed—they will vote for a third time, this time to elect a new president and complete the cycle of elections. The powers of the new president will presumably be defined in the constitution the lower house will hammer out. It is not yet clear whether the Muslim fundamentalists will field a candidate of their own for the presidency. At the moment, the two secularist front-runners for the job are Amr Musa, a hard-line former secretary general of the Arab League, and Mohammed ElBaradei, the (anti-Western, anti-Israeli) former head of the UN's International Atomic Energy Agency.

Tantawi last week promised that the military will relinquish power to the elected leadership, but many Egyptians remain distrustful of the army.

The start of the election process was briefly in doubt last weekend as the secularists and liberals demonstrated in Cairo's Tahrir Square, demanding that Tantawi and the military regime step down immediately and hand over power to civilians—it was unclear to which civilians—and that the elections be postponed. But the Muslim Brotherhood, the largest and best organized political party in the country, sided with Tantawi and backed elections on schedule, and Tantawi stuck to his guns. Voting was mandatory, with those staying away from the polls threatened with fines amounting to one month's average salary.

But it appears that the fragmented secularists, including the masses of tweeting and SMS-ing youngsters who occupied the square and spearheaded last February's revolution, voted as enthusiastically as the veiled womenfolk, hoping to reduce the fundamentalists' say in the future governance of Egypt. The elections, by all accounts, passed smoothly, with only minor problems—a shortage of ballots, late opening of polling stations and some allegations of fraud—reported in several localities. People queued in orderly fashion for hours, and there was a heavy turnout. If the military indeed leaves the stage and moves to the political sidelines, the real battle for Egypt down the road will be between young, Westernized secularists and fundamentalists who wish to impose sharia law on the country.

The demographics are not encouraging. It is reported that some eighty-three thousand Coptic Christians have fled Egypt since February, fearing Muslim intolerance if not repression. And, speaking geopolitically, a taste of what may be in store for the region was afforded in last Friday's Muslim Brotherhood rally in Cairo, in which the mufti of Egypt declared that the impending elections were only the "first step on the march to Jerusalem"—that is, in the struggle to "liberate" Palestine from the Jews.

A correspondent of the Israeli daily Haaretz interviewed a number of participants in the rally. He quoted one, Na'il Zihum, an engineer, as saying: "We are . . . for the [anti-Mubarak] revolution, but Jerusalem and the Islamic umma [nation] are our top priorities. First, we are Muslims, and we must tell the Israelis that they cannot exploit the fact that Egypt is busy with elections to harm the Aksa Mosque [the most sacred Muslim site in Palestine/Israel, on Jerusalem's Temple Mount]."

Zihum's reference was to the planned demolition of the temporary Mughrabi Bridge that connects the Wailing Wall Plaza with the entrance to the Temple Mount compound. Israeli engineers and archaeologists have warned that the structure is unsafe and must be demolished, but Israeli prime minister Benjamin Netanyahu last week ordered the postponement of the demolition in order to cool Islamist passions in Cairo.

At the rally, the masses shouted, "Khaybar, Ya Yahud" (Jews, remember Khaybar)—an oasis that was the site of a battle in seventh-century Hejaz in which Muhammad defeated and destroyed one of the region's Jewish tribes. More explicitly, Abd Khaled, a certified public accountant who also participated in the rally, told the Haaretz reporter: "We vow here to fight the Jews until the last drop of our blood. We can't do it now, but we will win the elections, unite the people, strengthen our army and prepare the hearts and minds of the soldiers so that we will be able to go to war against Israel."

The Big Lie

Pepper-Spraying Taxpayers

“Diversity” boondoggles are the real scandal.

By Heather Mac Donald

As protesters festively (oops! I mean “heroically”) rally on college quads across California in the wake of the gratuitous macing of a dozen Occupy Wall Street wannabes at University of California–Davis last Friday, UC Berkeley’s Vice Chancellor for Equity and Inclusion declared that the rising tuition at California’s public universities is giving him “heartburn.” It should, since Vice Chancellor for Equity and Inclusion Gibor Basri and his fellow diversity bureaucrats are a large cause of those skyrocketing college fees, not just in California but nationally.

It is to be expected that students will be immaculately ignorant of the matters they protest, but it takes a special type of gall for a bureaucrat such as Basri to shed crocodile tears over California’s tuition increases, which had been a seeming target of OWS-inspired protest before the brutish UC Davis pepper-spray incident provided a more mediagenic reason to cut classes. OWS-ers are theatrically calling for a general strike of the University of California for this coming Monday.

Basri commands a staff of 17, allegedly all required to make sure that fanatically left-wing UC Berkeley is sufficiently attuned to the values of “diversity” and “inclusion”; his 2009 base pay of $194,000 was nearly four times that of starting assistant professors. Basri was given responsibility for a $4.5 million slice of Berkeley’s vast diversity bureaucracy when he became the school’s first Vice Chancellor for Equity and Inclusion in 2007; since then, the programs under his control have undoubtedly weathered the recession far more comfortably than mere academic endeavors.

UC Berkeley’s diversity apparatus, which spreads far beyond the office of the VC for E and I, is utterly typical. For the last three decades, colleges have added more and more tuition-busting bureaucratic fat; since 2006, full-time administrators have outnumbered faculty nationally. UC Davis, for example, whose modest OWS movement has been happily energized by the conceit that the campus is a police state, offers the usual menu of diversity effluvia under the auspices of an Associate Executive Vice Chancellor for Campus Community Relations. A flow chart of Linnaean complexity would be needed to accurately map all the activities overseen by the AEVC for CCR. They include a Diversity Trainers Institute, staffed by Davis’s Administrator of Diversity Education; the Director of Faculty Relations and Development in Academic Personnel; the Director of the UC Davis Cross-Cultural Center; the Director of the Lesbian, Gay, Bisexual, Transgender Resource Center; an Education Specialist with the UC Davis Sexual Harassment Education Program; an Academic Enrichment Coordinator with the UC Davis Department of Academic Preparation Programs; and the Diversity Program Coordinator and Early Resolution Discrimination Coordinator with the Office of Campus Community Relations. The Diversity Trainers Institute recruits “a cadre of individuals who will serve as diversity trainers/educators,” a function that would seem largely superfluous, given that the Associate Executive Vice Chancellor for Campus Community Relations already offers a Diversity Education Series that grants Understanding Diversity Certificates in “Unpacking Oppression” and Cross-Cultural Competency Certificates in “Understanding Diversity and Social Justice.”

If the OWS campus campers really wanted to understand California’s growing tuition costs, they might also check out the University of California, San Francisco, which created a Vice Chancellor for Diversity and Outreach earlier this year at the height of the state’s budget crisis. Naturally, this new sinecure was redundant with UCSF’s existing Office of Affirmative Action, Equal Opportunity and Diversity, the Diversity Learning Center (where you can learn how to “Become A Diversity Change Agent”), the Center for LGBT Health & Equity, the Office of Sexual Harassment Prevention & Resolution, the Chancellor’s Advisory Committee on Diversity, the Chancellor’s Advisory Committee on Disability Issues, the Chancellor’s Advisory Committee on Gay, Lesbian, Bisexual and Transgender Issues, and the Chancellor’s Advisory Committee on the Status of Women.

The OWS-ers should also look into UC San Diego, which announced the creation of a Vice Chancellor for Equity, Diversity, and Inclusion in May 2011, even as the campus was losing three prestigious cancer researchers to Rice University and was cutting academic programs. Needless to say, UCSD’s Vice Chancellor for Equity, Diversity, and Inclusion replicated an equally fearsome mountain of diversity functions.

Do not think that the exploding diversity bureaucracy is confined to public universities. In 2005, Harvard created a new Senior Vice Provost for Diversity and Faculty Development, responsible for $50 million in diversity funding, and six new diversity deanships. Whereas Harvard’s previous diversity bureaucrats collected mere diversity data about faculty hiring and promotions, the new SVP for D and FD would be collecting “diversity metrics.” Yale already has 14 Title IX coordinators (not enough to stave off a specious Title IX investigation by the Office of Civil Rights in the federal Education Department), but it nevertheless recently put a Deputy Provost in charge of assessing the “campus climate” with respect to gender and overseeing the 14 Title IX coordinators. All these new bureaucrats in campuses across the country — nearly 72,000 non-teaching positions added from 2006 to 2009 — cost $3.6 billion, estimated Harvey Silverglate in Minding the Campus earlier this year.

Just where do the OWS-ish student protesters think that their tuition money is going? In the vast majority of colleges and universities, there are no greedy shareholders sucking their profits from the livelihoods of workers or other “community stakeholders.” Rather, rising tuitions funnel straight into the preposterously unnecessary diversity bureaucracy and the rest of the burgeoning student-services infrastructure, as well as into the salaries of professors who teach one course a semester, the arms race of ever more sybaritic dorms and social centers, and the absolute monarchies of the football and basketball programs. It is particularly amusing to see New York University’s Andrew Ross spearheading a campaign against the student-loan industry; we may safely assume that Ross’s princely salary as Professor of Social and Cultural Analysis (achieved when NYU outbid Princeton for his services) was impervious to what should have been Ross’s reputation-destroying unwitting publication of a hoax parody of cultural-studies gibberish in his journal, Social Text, in 1996.

The Austrian business cycle theory is going mainstream

China's Hard Landing

By WSJ Editorial

The state-led growth model is leading the country into trouble.

The People's Bank of China's surprise announcement Wednesday of a half percentage point cut in banks' required reserve ratio is an admission that the economy is facing stiff headwinds. Consumer price inflation remains relatively high at 5.5%, and the true level of inflation as reflected in the GDP deflator is probably closer to 10%.

Most analysts expected monetary easing to start next year when inflation had subsided further. But then most China analysts were predicting a "soft landing" for the economy. The data in recent days suggest the stagflation trend will continue and the landing may be bumpy.

Property prices have fallen for three consecutive months and the trend is accelerating. HSBC's and the government's own purchasers managers' indices of corporate sentiment took a big tumble in November, falling into negative territory for the first time since early 2009. This time China can't export its way out of its domestic problems, since external demand is shrinking.

China is a poster child for the Austrian school of economics' theory of the business cycle. After undertaking the biggest stimulus program the world has ever seen in response to the global financial crisis, the country is drowning in unproductive investments financed with credit.

The government spent 15% of GDP largely on public works projects in inland regions, financed with loans from the state-owned banks. Investment as a share of GDP soared to 48.5% in 2010, and the M2 measure of money supply ballooned to 140% that of the U.S.

Now comes the hangover. The public works projects are winding down, unleashing a wave of unemployment and an uptick in social unrest. The banks' nonperforming loans are rising, and local governments are insolvent. The country is littered with luxurious county government offices, ghost cities of empty apartment blocks, unsafe high-speed rail lines and crumbling highways to nowhere.

One effect of negative real interest rates was a nationwide bubble in private housing, with the average price of an urban apartment reaching eight times the average annual income. Real estate is the most popular investment for the wealthy, according to a central bank survey in September. Millions of luxury apartments are vacant, even as there is a shortage of affordable housing for the poor.

Property construction became "the most important sector in the universe," in the words of UBS economist Jonathan Anderson. It directly accounts for about 13% of the economy, 20% if one includes related industries like concrete and steel. It also provided 40% of local government revenues through land sales.

Worsening inflation forced the government to put on the brakes this year. As with most property busts, transactions dried up, followed by a free fall in prices. Land prices were down 60% year on year in September. Property developers are slashing prices of new homes to stave off bankruptcy.

Beijing recognizes the dangers of a property bubble and deliberately popped this one by telling banks to cut back loans to developers. The government seems to be determined to force some of the smaller developers to the wall, both to force consolidation in the industry and convince the remaining developers to get on board with the state-run program of building low-income housing.

Earlier this year banking regulators conducted stress tests that supposedly showed the financial system can withstand a 40% fall in property prices. Loans to developers and mortgages account for about 20% of the banks' loan books. But since the health of the wider economy is tied to property, China could face a scenario close to that of the U.S. in recent years. Because the private market for housing was tiny 10 years ago when the current boom began, the country has never experienced a broad-based decline in property prices.

The government and the more sanguine analysts say low-income housing construction will pick up the economic slack, as activity at the top end of the market contracts. The problem is that even if the government meets its goals, the program is still too small to save the economy. Barclays estimates that it will contribute one percentage point to growth in 2011, and 0.5 percentage points in 2012.

There is no easy way to avoid the bust that is coming. The silver lining is that China's increasingly state-led growth model will be discredited, and a debate will begin on restarting the reforms that stalled in the mid-2000s. A financial sector that allocates credit based on politics rather than price signals led China into this mess. Popular pressure to dismantle crony capitalism is building, and the Communist Party would be wise to get in front of it while it can.

News from the war on business

Choking on Obamacare

By George F. Will

LOS ANGELES

In 1941, Carl Karcher was a 24-year-old truck driver for a bakery. Impressed by the large numbers of buns he was delivering, he scrounged up $326 to buy a hot dog cart across from a Goodyear plant. And the war came.

So did millions of defense industry workers and their cars. And, soon, Southern California’s contribution to American cuisine — fast food. Including, eventually, hundreds of Carl’s Jr. restaurants. Karcher died in 2008, but his legacy, CKE Restaurants, survives. It would thrive, says CEO Andy Puzder, but for government’s comprehensive campaign against job creation.

CKE, with more than 3,200 restaurants (Carl’s Jr. and Hardee’s), has created 70,000 jobs, 21,000 directly and 49,000 with franchisees. The growth of those numbers will be inhibited by — among many government measures — Obamacare.

When CKE’s health-care advisers, citing Obamacare’s complexities, opacities and uncertainties, said that it would add between $7.3 million and $35.1 million to the company’s $12 million health-care costs in 2010, Puzder said: I need a number I can plan with. They guessed $18 million — twice what CKE spent last year building new restaurants. Obamacare must mean fewer restaurants.

And therefore fewer jobs. Each restaurant creates, on average, 25 jobs — and as much as 3.5 times that number of jobs in the community. (CKE spends about $1 billion a year on food and paper products, $175 million on advertising, $33 million on maintenance, etc.)

Puzder laughs about the liberal theory that businesses are not investing because they want to “punish Obama.” Rising health-care costs are, he says, just one uncertainty inhibiting expansion. Others are government policies raising fuel costs, which infect everything from air conditioning to the cost (including deliveries) of supplies, and the threat that the National Labor Relations Board will use regulations to impose something like “card check” in place of secret-ballot unionization elections.

CKE has about 720 California restaurants, in which 84 percent of the managers are minorities and 67 percent are women. CKE has, however, all but stopped building restaurants in this state because approvals and permits for establishing them can take up to two years, compared to as little as six weeks in Texas, and the cost to build one is $100,000 more than in Texas, where CKE is planning to open 300 new restaurants this decade.

CKE restaurants have 95 percent employee turnover in a year — not bad in this industry — and the health-care benefits under CKE’s current “mini-med” plans are capped in a way that makes them illegal under Obamacare. So CKE will have to convert many full-time employees to part-timers to limit the growth of its burdens under Obamacare.

In an economic climate of increasing uncertainties, Puzder says, one certainty is that many businesses now marginally profitable will disappear when Obamacare causes that margin to disappear. A second certainty is that “employers everywhere will be looking to reduce labor content in their business models as Obamacare makes employees unambiguously more expensive.”

According to the U.S. Small Business Administration, by 2008 the cost of federal regulations had reached $1.75 trillion. That was 14 percent of national income unavailable for job-creating investments. And that was more than 11,000 regulations ago.

Seventy years ago, the local health department complained that Karcher’s hot dog cart had no restroom facilities. He got help from a nearby gas station. A state agency made him pay $15 for workers’ compensation insurance. Another agency said that he owed more than the $326 cost of the cart in back sales taxes. For $100, a lawyer successfully argued that Karcher did not because his customers ate their hot dogs off the premises.

Time was, American businesses could surmount such regulatory officiousness. But government’s metabolic urge to boss people around has grown exponentially and today CKE’s California restaurants are governed by 57 categories of regulations. One compels employees and even managers to take breaks during the busiest hours, lest one of California’s 200,000 lawyers comes trolling for business at the expense of business.

Barack Obama has written that during his very brief sojourn in the private sector he felt like “a spy behind enemy lines.” Puzder knows what it feels like when gargantuan government is composed of multitudes of regulators who regard business as the enemy. And 22.9 million Americans who are unemployed, underemployed or too discouraged to look for employment know what it feels like to be collateral damage in the regulatory state’s war on business.

You can't teach an old dog new tricks

Egypt’s Descent 

Two-thirds of the Arab world’s largest nation is voting for sharia.

By Mark Steyn

I’ve been alarmed by the latest polls. No, not from Iowa and New Hampshire, although they’re unnerving enough. It’s the polls from Egypt. Foreign policy has not played a part in the U.S. presidential campaign, mainly because we’re so broke that the electorate seems minded to take the view that if government is going to throw trillions of dollars down the toilet they’d rather it was an Al Gore–compliant Kohler model in Des Moines or Poughkeepsie than an outhouse in Waziristan. Alas, reality does not arrange its affairs quite so neatly, and the world that is arising in the second decade of the 21st century is increasingly inimical to American interests, and likely to prove even more expensive to boot.

In that sense, Egypt is instructive. Even in the giddy live–from–Tahrir Square heyday of the “Arab Spring” and “Facebook Revolution,” I was something of a skeptic. Back in February, I chanced to be on Fox News with Megyn Kelly within an hour or so of Mubarak’s resignation. Over on CNN, Anderson Cooper was interviewing telegenic youthful idealists cooing about the flowering of a new democratic Egypt. Back on Fox, sourpuss Steyn was telling Megyn that this was “the unraveling of the American Middle East” and the emergence of a post-Western order in the region. In those days, I was so much of a pessimist I thought that in any election the Muslim Brotherhood would get a third of the votes and be the largest party in parliament. By the time the actual first results came through last week, the Brothers had racked up 40 percent of the vote — in Cairo and Alexandria, the big cities wherein, insofar as they exist, the secular Facebooking Anderson Cooper types reside. In second place were their principal rivals, the Nour party, with up to 15 percent of the ballots. “Nour” translates into English as “the Even More Muslim Brotherhood.” As the writer Barry Rubin pointed out, if that’s how the urban sophisticates vote, wait till you see the upcountry results. By the time the rural vote emerges from the Nile Delta and Sinai early next month, the hard-core Islamists will be sitting pretty. In the so-called Facebook Revolution, two-thirds of the Arab world’s largest nation is voting for the hard, cruel, bigoted, misogynistic song of sharia.

The short 90-year history of independent Egypt is that it got worse. Mubarak’s Egypt was worse than King Farouk’s Egypt, and what follows from last week’s vote will be worse still. If you’re a Westernized urban woman, a Coptic Christian, or an Israeli diplomat with the goons pounding the doors of your embassy, you already know that. The Kingdom of Egypt in the three decades before the 1952 coup was flawed and ramshackle and corrupt, but it was closer to a free-ish pluralist society than anything in the years since. In 1923, its finance minister was a man called Joseph Cattaui, a member of parliament, and a Jew. Couldn’t happen today. Mr. Cattaui’s grandson wrote to me recently from France, where the family now lives. In the unlikely event the forthcoming Muslim Brotherhood government wish to appoint a Jew as finance minister, there are very few left available. Indeed, Jews are so thin on the ground that those youthful idealists in Tahrir Square looking for Jews to club to a pulp have been forced to make do with sexually assaulting hapless gentiles like the CBS News reporter Lara Logan. It doesn’t fit the narrative, so even Miss Logan’s network colleagues preferred to look away. We have got used to the fact that Egypt is now a land without Jews. Soon it will be a land without Copts. We’ll get used to that, too.

Since the collapse of the Warsaw Pact two decades ago we have lived in a supposedly “unipolar” world. Yet somehow it doesn’t seem like that, does it? The term “Facebook Revolution” presumes that technology marches in the cause of modernity. But in Khartoum a few years ago a citywide panic that shaking hands with infidels caused your penis to vanish was spread by text messaging. In London, young Muslim men used their cellphones to share Islamist snuff videos of Westerners being beheaded in Iraq. In les banlieues of France, satellite TV and the Internet enable third-generation Muslims to lead ever more disassimilated, segregated lives, immersed in an electronic pan-Islamic culture, to a degree that would have been impossible for their grandparents. To assume that Western technology in and of itself advances the cause of Western views on liberty or women’s rights or gay rights is delusional.

Consider, for example, the “good” news from Afghanistan. A 19-year-old woman sentenced to twelve years in jail for the heinous crime of being brutally raped by a cousin was graciously released by President Karzai on condition that she marry her rapist. A few weeks ago, you may recall, I mentioned that the last Christian church in the nation had been razed to the ground last year, as the State Department noted in its report on “international” religious freedom. But Afghanistan is not “international” at all. It is an American client state whose repugnant leader is kept alive only by the protection of Western arms. Say what you like about Egypt’s Muslim Brotherhood but at least their barbarous theocratic tyranny doesn’t require vast numbers of NATO troops to build it.

I am not a Ron Paul isolationist. The U.S. has two reasonably benign neighbors, and the result is that 50 percent of Mexico’s population has moved north of the border and 100 percent of every bad Canadian idea from multiculturalism to government health care has moved south of the border. So much for Fortress America. The idea of a 19th-century isolationist republic holding the entire planet at bay is absurd. Indeed, even in the real 19th century, it was only possible because global order was maintained by the Royal Navy and Pax Britannica. If Ron Paul gets his way, who’s going to pick up the slack for global order this time?

Nevertheless, my friends on the right currently fretting about potentially drastic cuts at the Pentagon need to look at that poor 19-year-old woman’s wedding to her cousin rapist and ponder what it represents: In Afghanistan, the problem is not that we have spent insufficient money but that so much of it has been entirely wasted. History will be devastating in its indictment of us for our squandering of the “unipolar” moment. During those two decades, a China flush with American dollars has gobbled up global resources, a reassertive Islam has used American military protection to advance its theocratic ambitions, the mullahs in Tehran are going nuclear knowing we lack the will to stop them, and even Russia is back in the game of geopolitical mischief-making. We are responsible for 43 percent of the planet’s military spending. But if you spend on that scale without any strategic clarity or hardheaded calculation of your national interest it is ultimately as decadent and useless as throwing money at Solyndra or Obamacare or any of the other domestic follies. A post-prosperity America will mean perforce a shrunken presence on the global stage. And we will not like the world we leave behind.