As Seen By Forbes
June 27, 2012
Via AJC
Aspirations
June 27, 2012
This image has been posted with express written permission. This cartoon was originally published at Town Hall.
How Obama Lost Canada: Botching Relations With the United States’ Biggest Trade Partner
June 27, 2012
Permitting the construction of the Keystone XL pipeline should have been an easy diplomatic and economic decision for U.S. President Barack Obama. The completed project would have shipped more than 700,000 barrels a day of Albertan oil to refineries in the Gulf Coast, generated tens of thousands of jobs for U.S. workers, and met the needs of refineries in Texas that are desperately seeking oil from Canada, a more reliable supplier than Venezuela or countries in the Middle East. The project posed little risk to the landscape it traversed. But instead of acting on economic logic, the Obama administration caved to environmental activists in November 2011, postponing until 2013 the decision on whether to allow the pipeline.
Obama’s choice marked a triumph of campaign posturing over pragmatism and diplomacy, and it brought U.S.-Canadian relations to their lowest point in decades. It was hardly the first time that the administration has fumbled issues with Ottawa. Although relations have been civil, they have rarely been productive. Whether on trade, the environment, or Canada’s shared contribution in places such as Afghanistan, time and again the United States has jilted its northern neighbor. If the pattern of neglect continues, Ottawa will get less interested in cooperating with Washington. Already, Canada has reacted by turning elsewhere — namely, toward Asia — for more reliable economic partners.
Economically, Canada and the United States are joined at the hip. Each country is the other’s number-one trading partner — in 2011, the two-way trade in goods and services totaled $681 billion, more than U.S. trade with Mexico or China — and trade with Canada supports more than eight million U.S. jobs. Yet the Obama administration has recently jeopardized this important relationship. It failed to combat the Buy American provision in Congress’ stimulus bill, which inefficiently excluded Canadian participation in infrastructure spending.
What’s more, by engaging in protectionism, Washington has violated the substance and spirit of the North American Free Trade Agreement, the trade bloc formed in 1994 among Canada, the United States, and Mexico. As a result, NAFTA, which was initially intended as a template for broader trade expansion by all three partners, has languished while each country has negotiated a spaghetti bowl of bilateral trade agreements with other countries. Trilateral economic summits among the NAFTA partners have become little more than photo-ops accompanied by bland communiqués. Bilateral meetings between U.S. and Canadian leaders, which were a regular feature of the Bill Clinton and George W. Bush eras, have also mostly fallen by the wayside. Meanwhile, the United States demanded upfront concessions from Canada as the price of entry to negotiations over the Trans-Pacific Partnership, a regional free-trade group, while preserving massive agriculture subsidies of its own. The protracted wrangling over a seat at the table does not augur well for meaningful progress.
After years of procrastination, Canada finally secured an agreement for a new Detroit-Windsor bridge — over which 25 percent of trade between Canada and the United States crosses — but only after it offered to cover all of the initial costs. The U.S. share is to be repaid over time by the tolls collected, but any shortfalls will rest with Canadian taxpayers. Canada was essentially forced to hold negotiations with Michigan; the U.S. federal government observed quietly from the sidelines.
The United States’ mistreatment of Canada extends beyond economic issues. Washington has also failed to trust and respect its loyal ally. To name one small but telling example, when Canada ran for a nonpermanent seat on the UN Security Council in 2010, the United States offered little support. For whatever reason, Portugal was a more compelling choice.
One would also think the United States and Canada could find common ground on security, economic, and environmental issues in the Arctic, an area of shared sovereignty and responsibility. Yet there has been little more than senseless bickering and public spats between Ottawa and Washington on who should attend what meeting of Arctic states. U.S. Secretary of State Hillary Clinton, for example, went out of her way to rake Canada over the coals for hosting a meeting of Arctic coastal nations in March 2010 and failing to invite other countries with “legitimate interests” in the region. But she was also taking a jab at Canada’s long-standing claims to the waters of the Arctic archipelago, including the Northwest Passage, which the United States rejects. While Canada and the United States squabble, Russia and China are aggressively asserting their own interests in the region…
Our underground future: Buried nuclear plants? Subterranean stadiums? The next great frontier may just lie beneath our feet.
June 27, 2012
A finished basement can be a beautiful thing. With the right accoutrements and enough effort, what might otherwise be a damp, empty space lined with concrete can be turned into a cozy playroom, or a den, or an office and gym. Properly planned, the basement can become an integral part of a household, even a kind of engine that powers it from below.
The same is true for the far larger basement that all of us share: that vast space that exists under our feet wherever we go, out of sight and out of mind. Those of us who are city-dwellers already keep a lot of stuff down there—subway stations, sewer pipes, electrical lines—but as our cities grow more cramped, and real estate on the surface grows more valuable, the possibility that it can be used more inventively is starting to attract attention from planners around the world.
“It used to be, ‘How high can you go up into the sky?’” said Susie Kim, of the Boston-based urban design firm Koetter Kim & Associates. “Now it’s a matter of, ‘How low can you go and still be economically viable?’”
A cadre of engineers who specialize in tunneling and excavation say that we have barely begun to take advantage of the underground’s versatility. The underground is the next great frontier, they say, and figuring out how best to use it should be a priority as we look ahead to the shape our civilization will take.
“We have so much room underground,” said Sam Ariaratnam, a professor at Arizona State University and the chairman of the International Society for Trenchless Technology. “That underground real estate—people need to start looking at it. And they are starting to look at it.”
The federal government has taken an interest, convening a panel of specialists under the banner of the National Academy of Engineering to produce a report, due out later this year, on the potential uses for America’s underground space, and in particular its importance in building sustainable cities. The long-term vision is one in which the surface of the earth is reserved for the things we want to see and be around—houses, schools, yards, parks—while all the other facilities that are needed to make a city run, from water treatment plants to data banks to freight systems, hum away underground.
Though the basic idea has existed for decades, new engineering techniques and an increasing interest in sustainable urban growth have created fresh momentum for what once seemed like a notion out of Jules Verne. And the world has witnessed some striking new achievements. The city of Almere, in the Netherlands, built an underground trash network that uses suction tubes to transport waste out of the city at 70 kilometers per hour, making garbage trucks unnecessary. In Malaysia, a sophisticated new underground highway tunnel doubles as a discharge tunnel for floodwater. In Germany, a former iron mine is being converted into a nuclear waste repository, while scientists around the world explore the possibility of building actual nuclear power plants underground.
Overall, though, the cause of the underground has encountered resistance, in large part because digging large holes and building things inside them tends to be extremely expensive and technically demanding. Boston offers perfect examples of the pluses and minuses of the endeavor: Putting the Post Office Square parking lot underground created a park and a beloved urban amenity, but the much more ambitious Big Dig turned out to be a drawn-out and unspeakably costly piece of urban reengineering.
And perhaps an even greater obstacle is the psychological one. As Ariaratnam put it, “Even in a condo tower, the penthouse on the top floor is the most attractive thing—everyone wants to be higher.” The underground, by contrast, calls to mind darkness, dirt, even danger—and when we imagine what it would look like for civilization to truly colonize it, we think of gophers and mole people. Little wonder that our politicians and urban designers don’t afford the underground anywhere near the level of attention and long-term vision they lavish on the surface. In a world where most people are accustomed to thinking of progress as pointing toward the heavens, it can be hard to retrain the imagination to aim downward…
Some countries fail spectacularly, with a total collapse of all state institutions, as in Afghanistan after the Soviet withdrawal and the hanging of President Mohammad Najibullah from a lamppost, or during the decade-long civil war in Sierra Leone, where the government ceased to exist altogether.
Most countries that fall apart, however, do so not with a bang but with a whimper. They fail not in an explosion of war and violence but by being utterly unable to take advantage of their society’s huge potential for growth, condemning their citizens to a lifetime of poverty. This type of slow, grinding failure leaves many countries in sub-Saharan Africa, Asia, and Latin America with living standards far, far below those in the West.
What’s tragic is that this failure is by design. These states collapse because they are ruled by what we call “extractive” economic institutions, which destroy incentives, discourage innovation, and sap the talent of their citizens by creating a tilted playing field and robbing them of opportunities. These institutions are not in place by mistake but on purpose. They’re there for the benefit of elites who gain much from the extraction — whether in the form of valuable minerals, forced labor, or protected monopolies — at the expense of society. Of course, such elites benefit from rigged political institutions too, wielding their power to tilt the system for their benefit.
But states built on exploitation inevitably fail, taking an entire corrupt system down with them and often leading to immense suffering. Each year the Failed States Index charts the tragic stats of state failure. Here’s our guide to 10 ways it happens.
1. North Korea: Lack of property rights
North Korea’s economic institutions make it almost impossible for people to own property; the state owns everything, including nearly all land and capital. Agriculture is organized via collective farms. People work for the ruling Korean Workers’ Party, not themselves, which destroys their incentive to succeed.
North Korea could be much wealthier. In 1998, a U.N. mission found that many of the country’s tractors, trucks, and other farm machinery were simply unused or not maintained. Beginning in the 1980s, farmers were allowed to have their own small plots of land and sell what they grew. But even this hasn’t created much incentive, given the country’s endemic lack of property rights. In 2009, the government introduced a revalued currency and allowed people to convert only 100,000 to 150,000 won of the old currency into the new one (equivalent to about $35 to $40 at the black-market exchange rate). People who had worked and saved up stocks of the old currency found it to be worthless.
Not only has North Korea failed to grow economically — while South Korea has grown rapidly — but its people have literally failed to flourish. Trapped in this debilitating cycle, North Koreans are not only much poorer than South Koreans but also as much as 3 inches shorter on average than the neighbors from whom they have been cut off for the last six decades.
2. Uzbekistan: Forced labor
Coercion is a surefire way to fail. Yet, until recently, at least in the scope of human history, most economies were based on the coercion of workers — think slavery, serfdom, and other forms of forced labor. In fact, the list of strategies for getting people to do what they don’t want to do is as long as the list of societies that relied on them. Forced labor is also responsible for the lack of innovation and technological progress in most of these societies, ranging from ancient Rome to the U.S. South.
Modern Uzbekistan is a perfect example of what that tragic past looked like. Cotton is among Uzbekistan’s biggest exports. In September, as the cotton bolls ripen, the schools empty of children, who are forced to pick the crop. Instead of educators, teachers become labor recruiters. Children are given daily quotas from between 20 to 60 kilograms, depending on their age. The main beneficiaries of this system are President Islam Karimov and his cronies, who control the production and sale of the cotton. The losers are not only the 2.7 million children coerced to work under harsh conditions in the cotton fields instead of going to school, but also Uzbek society at large, which has failed to break out of poverty. Its per capita income today is not far from its low level when the Soviet Union collapsed — except for the income of Karimov’s family, which, with its dominance of domestic oil and gas exploration, is doing quite well.
3. South Africa: A tilted playing field
In 1904 in South Africa, the mining industry created a caste system for jobs. From then on, only Europeans could be blacksmiths, brickmakers, boilermakers — basically any skilled job or profession. This “color bar,” as South Africans called it, was extended to the entire economy in 1926 and lasted until the 1980s, robbing black South Africans of any opportunity to use their skills and talents. They were condemned to work as unskilled laborers in the mines and in agriculture — and at very low wages, too, making it extremely profitable for the elite who owned the mines and farms. Unsurprisingly, South Africa under apartheid failed to improve the living standards of 80 percent of its population for almost a century. For 15 years before the collapse of apartheid, the South African economy contracted. Since 1994 and the advent of a democratic state, it has grown consistently.
4. Egypt: The big men get greedy
When elites control an economy, they often use their power to create monopolies and block the entry of new people and firms. This was exactly how Egypt worked for three decades under Hosni Mubarak. The government and military owned vast swaths of the economy — by some estimates, as much as 40 percent. Even when they did “liberalize,” they privatized large parts of the economy right into the hands of Mubarak’s friends and those of his son Gamal. Big businessmen close to the regime, such as Ahmed Ezz (iron and steel), the Sawiris family (multimedia, beverages, and telecommunications), and Mohamed Nosseir (beverages and telecommunications) received not only protection from the state but also government contracts and large bank loans without needing to put up collateral.
Together, these big businessmen were known as the “whales.” Their stranglehold on the economy created fabulous profits for regime insiders, but blocked opportunities for the vast mass of Egyptians to move out of poverty. Meanwhile, the Mubarak family accumulated a vast fortune estimated as high as $70 billion…
Rising Sea Levels
June 27, 2012
Via Newsday
Radical Reagan
June 27, 2012
Via About
