Month: Dec 2009

Remarkable people: General Sir Rupert Smith

Conform and/or reform?

Usually, people who have spent a long time in an organisation are steeped in its thinking and its received wisdom. Those who do not fit the mould have difficulty in rising far and may even end up leaving the organisation or being rejected by it.

However, there are people who avoid both outcomes, they fit the mould, and they challenge its thinking. They rise high in the organisation and yet emerge with views which run counter to the common understanding of its purpose. Perhaps they keep their views quiet, at least until they rise above some level where they have sufficient standing based on experience or reputation. To do so, they must very good at what they do and their criticism must be seen, at least on balance, as being constructive.

The utility of force

General Sir Rupert Smith is an impressive independent thinker who combines analysis with clear objectivity; and he has written an important book about it. He has been described as Britain’s foremost “thinking soldier”.

If you’d like to hear a man who has emerged from a substantial military career with a fascinating and important analysis of a major paradigm shift, then you might be interested in his presentation at the Carnegie Council.  He believes that this new era began in 1945 and the first effects were seen in Korea.

“War among the people”

As with so many presentations, the formal content covers the main points and creates the background for discussion; but the subject matter comes alive and the most valuable insights are communicated in the conversations which develop from questions or impromptu stories:

As a fairly young officer, I was in Belfast, responsible for a patch of West Belfast. A bus route came to my area, at the end of its route from Belfast city center. There was a roundabout, and the bus would sit there for twenty minutes and then turn round and go back down into Belfast.

Most Friday nights, somewhere around 9 o’clock in the evening, this bloody bus would get burned. There would be a riot, and people would throw stones at the fire brigade when it came, and then we’d all turn out and fire baton rounds and things at the hooligans throwing the stones, and then someone would shoot as us and we’d shoot back. A good time was had by all. The BBC and everyone were all in there. A burning bus can really get everyone going.

This was going on rather more than I was prepared to put up with. But I couldn’t stop it. I just wasn’t able to defeat this. Until we came up with a cunning wheeze, which involved me persuading two soldiers that it was in their interest to hide in a hidden box on the top of this bus, and when the hooligans appeared with the buckets of petrol and the box of matches, they would leap out before they lit the petrol and capture the hooligans with the petrol, and we would all rush in and help them.

These two soldiers agreed that this was a wizard wheeze and hid in the box. We drove the Trojan Horse in. And, sure enough, we got them.

A quiet conversation took place between the regimental sergeant major and these two little hooligans. It turned out that this thing that we had been treating as IRA terrorism, disrupting the streets, a come-on operation so that we would be pulled in so that then we could be sniped at—that was our complete logic and understanding of it—was wholly and totally wrong. This had nothing to do with terrorism at all. It was the black taxis, and they were paying these hooligans to burn the buses so they got more trade. We hadn’t been fighting anybody.

This story provides a clear example of the analysis in this presentation.

During a related interview by Jeffrey D McCausland, General Smith identifies some key questions:

Who are you supporting, to do what and what is military force’s contribution to achieve that?

Watch that the interview here.

On a comical note

In looking at more material, for this post, I ran across one item which you might be able to view, but I could not; this is due, apparently, to my being in the UK. The message that I am presented with at this location is particularly funny given the subject matter; it is:

Dear Great Britain,

We’re terribly sorry, but full episodes of The Daily Show with Jon Stewart are not available.

But please don’t send any Red Coats in retaliation at this time, as you CAN get your headlines at Channel 4.

(The style of the “Channel 4” text is flashing between white and underlined red. However clicking on it does not appear to have any effect. So does that mean that a gunboat of Red Coats would be acceptable after all?!)

By John Lewis

Son of Gaddhafi …..

Does international politics have to be this obtuse, to put it kindly?

Those that don’t follow the British Press closely may have missed the news that Peter Mandelson, the unelected Lord appointed to run Britain’s Trade and Industry Department, was guest at  a shooting party with the son of Muammar Gaddhafi .  Here’s how the Guardian Newspaper ran the start of the article:

Peter MandelsonThe Spectator has reported that Peter Mandelson joined Colonel Muammar Gaddafi’s son at a country house shooting party. Photograph: Shaun Curry/AFP/Getty ImagesHe [Mandelson] talked of being “intensely relaxed” about the filthy rich, and no one could say that Lord Mandelson doesn’t like their company. After twice facing criticism for consorting with billionaires in Corfu, it emerged tonight that the business secretary joined Colonel Muammar Gaddafi‘s son at a country house shooting party.

Mandelson and Saif al-Islam al-Gaddafi were guests at Lord Rothschild’s Waddesdon Manor in Buckinghamshire, the Spectator said. The magazine reported that Cherie Blair was also in attendance, although neither she nor Mandelson are reported to have taken part in the shoot.

Let us be clear about this. The Gaddhafi regime is the antithesis of what the free world believes in, namely a dictatorship that has ruled by iron fist for decades and was indeed part of the axis of evil.

Of course, it suddenly became non-evil overnight, mostly because it gave up (or appeared to give up) trying to develop a nuclear bomb.

Leaving aside the fact that making a bomb does not per se make you evil, (unless we are to consider that the US, France, Britain, Russia, Israel are “evil”, too) the point is that the regime has not changed in its fundamentals since the old black and white days of George Bush.

So once again, the question arises, why are western leaders cosying up to these scum?  This  is a strong word, but do we or do we not agree that dictators are scum? Evil people who deny basic freedoms to their peoples?

Do you know any benevolent dictators? White-bearded philosophers out of the Plato/ Solomon mould? I sure don’t …..

Of course, these scum regimes are all in the UN, even though I had thought that all members had to sign up to the Universal Charter of Human Rights. Apparently not, however, another piece of humungous hypocrisy.

The Gaddhafi regime is the same one that is guilty of numerous terrorist offences, including Lockerbie (though there is distinct murkiness surrounding the whole saga) and in Britain the shooting by a Libyan Embassy staff member of Yvonne Fletcher, a British policewoman, for which nobody has been brought to justice even though the British police are said to know who was responsible.

However, leaving aside the question of how to deal with nasty dictatorships (and is joining shooting parties with the heir apparent really the right way?) I am fascinated by the apparent idiocy of Lord Mandelson in associating with these people.

Exactly which segment of the British population – let alone American – is he going to try to sell this to? America may not interest him overmuch, but one imagines that he wishes to prolong his career in British politics. If so, he has a funny way of going about it.

His image will take an enormous bashing, and Mandelson is, or used to be, totally focused on image, spin, PR and “the message”. What message does the thought of him jollying along with the son of the dictator of an evil regime convey to us? Has the spin guru of the British Labour Party lost his rudder?

Of course, there could be a hidden (or rather obvious) agenda. It could all be to do with sshhhhh ……MONEY. Is he therefore working tirelessly against his conscience (and knowing this will do him great personal damage) in the  financial if not moral interests of the British people (who weren’t of course asked if they want their country cosying up to dictators) or could it be – oh Dear, are we being too cynical? – that he has a more personal interest in mind?

Does he deep down seek to become as rich as the man he helped to sell to the British public, Tony Blair himself, who incidentally is about to be embroiled in a potentially-devastating enquiry into the Iraq war?

And unfortunately, the news broke on the day after we discovered that Abdelbaset Ali al-Megrahi, found guilty of the Lockerbie bombing and released because he was dying, has in fact survived for three months with no apparent end in sight. Yes, only three months ago Gaddhafi bambino was helping to arrange the hero’s welcome that Megrahi received in Libya. As is well-known, Mandelson met Gaddhafi’s son one week before the alleged deal was done for Megrahi’s release, so they are old jet-set mates.

We believe in “freedom” and “democracy”, don’t we? We may have to share the planet with dictatorial scum, but do our representatives really have to grovel and sup with them?

It doesn’t feel good to be honest ….

By Chris Snuggs

Such patience!

What retired dentists get up to!

While dealing with children and their little models I can spend hours making and mending small plastic and wooden pieces to give them a few hours of fun and assist them in understanding what machinery is made up of.

Recently I saw a model of a galleon made by a prisoner of war. He would obviously have had many hours with which to spend his time, making a work of art, but now prepare to have your jaw dropped.

Young Park from Honolulu
Read more about this very clever man

The Future of the British National Health Service

Is Britain’s Health Service now terminally ill.

Near the end of November came more bad news from the British National Health Service, an institution that many Brits both love and hate at the same time.  The truth is that the NHS has simply become too big, too bureaucratic and is in many areas failing though over-regulation and poor management.

Not that it lacks managers of course;  I believe there are more managers per bed than in any other country of Europe.

Why is it that the more managers you have the worse the overall performance ends up? Too much working by committee and passing the buck for failure, perhaps?

It has to be broken up; vast organisations just don’t work. Smaller is beautiful. I feel confident the world will eventually understand this; already there are serious calls for the big banks to be split up after the credit fiasco and just recently we read about  calls for some of the big British supermarkets to be ‘smallered’. This is significant, coming from one of the “Neo-Conservative” gurus likely to have great influence in the next British government.

Have we passed through a period of worshipping size, power, takeovers, mergers, money, financial domination, vast stock options, fees for lawyers, obscene bonuses and instant gratification?

Economies of scale are one thing, but at some point other factors reduce their value to society as a whole. The bigger an institution of any kind the greater the possible abuse. And sadly, at some time or other there will be abuse, as we have seen so often.

The period of “Big is Beautiful” may be ending, and not before time.

By Chris Snuggs

Housing and the Economic Recovery

Perhaps the housing market is the best economic indicator?

As an economist, I am frequently asked for my predictions on when the economy is going to turn around.  Have we reached the bottom?  Have we begun to recover?  Might we go into a second, perhaps more severe recession?

Those are tough questions to answer.  Business cycles are notoriously difficult to predict.  In fact, about the only thing we know for sure is that no two business cycles are alike. Each is unique in some significant way.

Changes in the housing market may be one of the most meaningful indicators of a recovery, because housing stability is such a fundamental indicator of how households are budgeting their income.  Notice that I did not say that the level of homeownership was a useful indicator; instead, I look to changes in the housing market, either away from or toward an apparently sustainable and affordable supply of homes, for evidence of where in the business cycle the economy may be.

Despite record low mortgage rates and first-time home buyer credits, the U.S. housing market remains anemic.  Rising foreclosures in several major metropolitan areas will keep housing prices low for some time to come.

The U.S. currently has about 1.7 million excess housing units available.  Typically, about 1.3 million new households are formed in the U.S. per year.  But with the unemployment rate topping 10%, new household formation will fall to about 1 million per year.  If new home construction remains at its current level of about 600,000 units per year, it will take over 4 years (1.7 million/400,000) for the excess supply of housing to be absorbed and housing prices to recover.

Recovery rates will be much slower in some markets, such as in Florida, Nevada, and California, but I believe that the rest of the U.S. along with most other developed economies are looking at a three- to four-year period of time before housing and thus the overall levels of output return to their pre-recession levels.

By Sherry Jarrell

The Mystery of the Disappearing Ethics

The Dubai debt crisis raises fundamental questions.


UK banks account for half the £60billion of global loans to the debt-laden emirate, new statistics show.

Well done British banks ….. loads of loans built on sand … I suppose the words “conservative” and “prudent” didn’t get printed in the Banking Terminology dictionary?

So Britain, that Global Giant of the banking world, has half the dodgy loans? British banks are therefore as daft as the rest of the world put together? (Can someone check my maths!)

Oh, and why exactly were the banks lending money to SORDID DICTATORSHIPS? Would we have lent billions to Hitler’s Germany in 1937? What on earth happened to ETHICS in the financial world? I suppose lending to POOR countries who need it rather than the nasty, venal, corrupt dictatorships of the Middle East was right off the radar?

There is an obsession with the “Human Rights” of immigrants and others in Britain, but a complete and utter turning of  blind eyes to the slavery going on in the Middle East, as if it doesn’t concern us because it’s in “another far-off country of which we know little”. (Neville Chamberlain’s shameful explanation of his inaction over Hitler’s annexation of the Sudetenland in Czechoslovakia in 1936.)

Sorry, but “No Man is an Island” …. we can’t sign the UN Declaration of Human Rights on the one hand and then blithely lend money (the PEOPLE’S money) to countries that are treating people so terribly.

I hope Dubai goes bankrupt and our cretinous banks with it so that we can start again with people’s banks that have a modicum of honour and decency and are prepared to invest in democracies, not insanely greedy property developments based on dictators’ idle fantasies.

It wasn’t much different with Sadaam Hussein, whatever you think of the invasion. This was a man who – just to take one example – gassed to death 5,000 innocent men, women and children in one single village alone. Yet countries in the “free world” were secretly queuing up to do deals with him. One British government MP even went there and shook his hand, the hand that consigned hundreds of thousands of people to a horrible death.

Ecology? Apart from anything else, Dubai’s carbon emissions are pro rata 250% higher than the US, so much power goes into air-conditioning and desalination. Once again, the left hand doesn’t know or care what the right hand is doing. A British minister tells us to stop eating meat to save the world while British banks simultaneously rush to finance a humongously-profligate and obscenely-elitist project in the desert.

I sometimes wonder if we really deserve to survive Global Warming. Will it be God’s way of cleansing the Earth of an aberrant experiment in free will?

By Chris Snuggs

Commercial Real Estate and the U.S. Financial System

This is not over yet, folks

The U.S. banking system remains vulnerable to sizeable potential losses as the housing market struggles to recover.

Estimates of these losses range from $500 billion to $1 trillion (£312 bn – £625 bn). The Federal Reserve Board is especially concerned about the impact of commercial real estate on many regional and small banks across the country.  Occupancy and rental rates continue to decline dramatically as 2009 draws to a close, and the worst seems yet to come.

Commercial real estate loans on banks’ balance sheets total almost $1.1 trillion dollars.  With near-term commercial real estate losses topping $100 billion, the Wall Street Journal estimates that as many as one-third of small and mid-size U.S. banks could experience financial distress.



Troubled banks restrict lending until they can raise more capital.  In this illiquid market, expect banks to fight for survival by raising lending rates, shortening maturities, and lowering loan amounts.  Credit will continue to shrink in the U.S., which spells big trouble for any economic recovery.

By Sherry Jarrell

More French Anglo-Saxon Bashing

Pres. N Sarkozy

“Do you know what it means for me to see for the first time in 50 years a French European commissioner in charge of the internal market, including financial services, including the City (of London)? I want the world to see the victory of the European model, which has nothing to do with the excesses of financial capitalism.” (As quoted by The Daily Telegraph.)

“Victory”? So we were at  war, then? Oh dear ….. you are 60 years out of date old boy, or perhaps 500 years! Does Agincourt still hurt so much?

One has for some time had the feeling that Europe’s leaders are a mediocre lot, with “statesmen” being very thin on the ground. Unfortunately, this impression has just been reinforced by Nicholas Sarkozy’s outrageous, finger-wagging gloating about the appointment of Michel Barnier to the EU post of  Internal Markets Commissioner.

From this lofty position this mighty expert on world financial markets threatens to regulate the City to “European” (aka French) “‘standards”.  The rationale will be to avoid another financial crisis by “reining in” the banks. The not-so-hidden agenda will be to sap the vitality of London so that Paris and Frankfurt in particular can cream off some of the rich pickings.

This is stupid and reprehensible for a number of reasons.

Firstly, any cutting-off of the City at the knees will not result in financial firms emigrating to sclerotic, over-regulated, pretentious, high-cost, overblown Europe but to the USA or elsewhere. True, the US is reeling at present, but I for one won’t bet on the mighty beast remaining on its knees for very long. And when it does rise up again, Europe will still be the same old bureaucratic, state-interfering, suffocating, high-tax business and financial environment that we know and hate.

Moreover, Sarko’s diatribe is extraordinarily partisan. If London’s City is a world financial centre, then this is to Europe’s advantage as much as Britain’s.  Sapping its vitality will hurt Europe, ensuring that more financial business flows elsewhere. In the electronic age, it is not fine French wines or German Wurst that will keep these companies in France or Germany.

And what sort of pro-Europe message are such comments going to send to ordinary British voters, who all polls suggest would actually vote to leave Europe if given a choice, which of course they will not be? Britain has lost almost all its once-mighty fishing industry, still pays to support French farming, has almost no indigenous motor industry any more … but at least we have the City. If Sarko’s hatchet-man gets his way, it will be regulated to its knees …..

Sarkozy’s comments were the most prattish, partisan, nationalistic and stupid comments ever made by one of the principal leaders of Europe. And apart from anything else, Barnier has to swear to uphold the interests of ALL EUROPE when taking up his post; the fact that he is French should be IRRELEVANT. The nationalistic cynicism of Sarkozy’s comments are breathtaking. There have  been frantic efforts by Barnier himself to backtrack in recent days, as London seethed at Sarko’s comments. But you can’t undo the past. Sarkozy said what he said; one has no reason to suppose he didn’t mean it.

Yes, there have been terrible excesses, but not all the City is to blame. And German and Franco banks hardly kept their snouts  out of the trough, almost ALL European banks having been clobbered,  so inter-connected is the banking world. And I for one haven’t forgotten the shameful fiasco at French Credit Lyonnais a few years ago, nor the recent £5 billion loss ($8 bn) by a rogue trader at Société Générale two years ago.

“The European Model”? It is laughable ……. Continental Europe has nothing to teach us about creating a healthy economy and sustainable jobs.

Sadly, Sarkozy’s narrow-minded nationalism have been matched by the stupefying incompetence of the British government in failing to block the appointment of Barnier, a well-known regulator à la française and the last thing Europe needs. We need reforms, yes, but throwing the baby out with the bathwater was never a good idea, and nor is it now.

And Mr President – less of that finger-wagging please …..

By Chris Snuggs

Let’s Introduce Obama’s Left Hand to his Right

To post or … what to post?

As I was perusing the business press this morning, an article caught my eye:  “That would make a great post!” I thought to myself.  I continued reading through the rest of the articles, intending to go back to the one that piqued my interest to compose a comment.  Of course, when I went back, I could not find it!

Trouble internally

But in the process of looking for that particular paragraph, I noticed something troubling. Something that, should my students’ papers include the same, would bring their score down by a full letter grade, if not more.

Read more of this Post

There are graveyards, and graveyards!

The almost surreal area where aircraft are ‘laid to rest’.

The Mojave Desert is one of the places in the world where aircraft, both military and civil, are placed when they are at the end of their life, whatever that means.

Anyway, came across some nice material and wanted to share it.

In an earlier copy of Mental Floss Magazine (seriously) there’s a very good article about this area.  Fabulous pictures, by the way. (Both pics in this Post are from that article.)

Next this is a YouTube video using Google Earth in flyover mode:

Finally, a reminder that it’s not all about dead aircraft.  The Mojave Air & Space Port is also the site of the privately backed SpaceShip enterprise.

All in all, not your average place.

By Paul Handover