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Tuesday, February 21, 2006

DUBAI PORTS WORLD AND ALL THAT

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Breakfast with Bwana

February 21, 2006





GENERAL MOTORS, DEFICITS, CHINA, DUBAI PORTS WORLD, HOMELAND SECURITY – WHICH OF THESE IS GOOD FOR AMERICA? ANY CONNECTIONS HERE?:





It was many moons ago, in 2003, when I wrote about GM’s placement of a bond offering of $17+ billion (an increase from an earlier target of $16 billion or so) and expressed my astonishment that people would buy those bonds. My concerns then were twofold: (i) GM was immediately going to put $14.4 billion into its pension plan, thus putting that money out of reach of the very creditors who had made the loan (by buying the bonds) and (ii) GM’s market capitalization at that time was about $21 billion, based on a stock price in the low 40s. It seemed bizarre to me that people would think lending more than 80% of the value of a company and then seeing more than 80% of the proceeds immediately disappear was a sensible idea. Yet, that is what happened.



I commented then that GM could well end up in bankruptcy. In the more than two years since, GM’s market capitalization has plummeted to $12.6 billion and there are unanswered questions about its pension liability. Bankruptcy is now openly discussed in the financial world. In a November 10, 2005 piece at CFO.com, Stephen Taub wrote: “GM maintains that its domestic pension plans were fully funded at the end of last year, according to the Journal, but the PBGC believes the plans are currently underfunded by roughly $31 billion. Why the discrepancy? The PBGC estimates liabilities based on the cost of paying retirement benefits if the plans were terminated today, explains the newspaper, while GM uses generally accepted standards for valuing assets and liabilities that can make its plan look stronger.”



What has this got to do with China, control of ports, Homeland Security and so on?



Let’s take a look at some numbers. Last year, the trade deficit was about $726 billion. With China it was $202 billion. This means that the rest of the world has accumulated $762 billion in US cash and China has $202 billion of that in just one year. For fiscal 2007, President Bush requested $42.7 billion for the Department of Homeland Security budget.



Dubai Ports World is buying the British company P&O that managed six US ports, for $6.8 billion.



For our Department of Homeland Security budgets which have already run into hundreds of billions of dollars, we have had one Secretary, Tom Ridge, whose only two major contributions were (i) to take a traffic signal and add two more colors to it, and (ii) to tell the nation’s homeowners to buy duct tape. The present Secretary has been sharply criticized for his department’s incompetence in the response to Hurricane Katrina and other matters. We still have no secure means of tracking millions of containers coming into the US through our ports. Our airport security consists of a laughable system of x-ray inspection that the DHS considers not reliable enough that they have to specially screen selected passengers, selected either because of their names, their profiles, or some random criteria that results in grandmothers and four-year olds being picked out. I will write more about my experiences in this regard in another column. Our DHS designated people have confiscated millions of pocket knives, scissors, nail clippers, lighters, and assorted items used by Americans in their daily lives on some theory that this enhances our security. They waste their time scanning iPods and laptop computers with testers designed to detect explosives, but only for selected victims of screening. Meanwhile, hundreds of thousands of iPods and laptop computers go through with just the x-ray screening. If that screening is effective, why do we need more? If it is not effective, why are we doing it? More importantly, why are we relying on it?



The replacement of the confiscated items probably does more good for China’s economy than ours since most of them are manufactured there.



I did not see China rush in, with the hundreds of billions of trade surplus dollars it has accumulated, to buy GM. It could have had GM for a mere $21 billion two years ago and around $11-13 billion in recent months depending on timing. China didn’t buy GM because it does not make money.



Dubai Ports World wants to buy P&O because it can make money. Also DP World has the money or, at least the credit rating to borrow the money. And it won’t put borrowed funds into a pension plan. Part of our trade deficit also comes from high-priced oil.



But, there is a downside. And it is one we should have recognized when six US ports were operated by P&O, also a foreign company albeit British. What we should have recognized and now need to recognize is that a foreign company (P&O) has had and a foreign company (DP World) will have knowledge of every container shipment from those ports into and out of America, all shipping schedules, all manifests, all contents, all shippers, all recipients.



Do we have any mechanism in place to ensure that this database of information will remain secure?



Why don’t we have the common sense to take $6.8 billion out of the Homeland Security budget currently spent on the idiotic alert level system and idiotic airport scanning of iPods and laptops, and have the US Government buy P&O? Why not make sure that one of the areas of our greatest vulnerability is made more secure than it ever has been?



We have here stark examples of what happens when US companies are mismanaged, or produce inferior goods, and what happens when we make our assets vulnerable to loss of control. And we will see more companies, including critical technologies companies, being bought by those holding large amounts of US dollars. You can darn sure bet they won’t be buying companies with unfunded pension liabilities running into the billions.



We spend billions of dollars on fluff and have none to solve a problem with a solution staring us in the face.



Given our commitment to free trade and public markets, all the noise in Washington is not likely to get much done. But if we can put our ports under the control of a Government managed company (even if contracted out to private management with supervision, but PLEASE, not Halliburton) we might start making sense of the security issues confronting us.



Cheerz...Bwana

www.breakfastwithbwana.blogspot.com
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Wednesday, February 08, 2006

A Caricature of Free Speech - A Caricature of Religion

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Breakfast with Bwana
February 9, 2006



A CARICATURE OF FREE SPEECH – A CARICATURE OF RELIGION:

My daughter constantly complains that her neighbors deposit their trash bags right by her window on the eve of trash collection days. What does this have to do with cartoons of the Prophet? Read on.

The story goes that Flemming Rose, culture editor of Jyllands-Posten, the Danish daily newspaper suspected that the western art world was self censoring out of fear of Islamic radicals. His suspicions grew out of removal of some works from British and Swedish museums deemed, by staff, to be offensive to Muslims. Also, he had heard from a comedian a Danish comedian that he felt free to desecrate the Bible but that he'd be afraid to do the same to the Koran. Then Rose read that a Danish children's book author couldn't find illustrators who dared draw Muhammad for a new book on Islam.

Based on this high-level research rivaling Merck’s studies on Vioxx, decided to hold a contest, challenging 25 newspaper cartoonists to draw Muhammad as you see him. Twelve responded with offerings, thirteen, perhaps exercising self censorship, self-restraint, or common sense, or sloth or worse, chose not to participate.

By the way, keep in mind that the “cartoons” were first published in September 2005.

Rose continues to justify his publication of the “cartoons” as an exercise of free speech. At first, I thought I understood that this was indeed free speech. Then I read about protests by many Muslims and I thought that they should be more tolerant of free speech. Then, I read that some newspapers in European countries decided last week, to republish the cartoons as a show of solidarity and support of the principle of free expression.

Then, I thought about this whole affair and, indeed, have wrestled with it for these many days. As Shakespeare wrote “vexed I am of late with passions of some difference.”

My final – at least of now – take on this is that while there is a component of “free expression” involved here, and mostly on the part of the newspapers that decided to show solidarity with Jyllands-Posten in view of the disproportionate hate-filled response by many claiming to be outraged in the name of Islam, the initial publication by Flemming Rose and Jyllands-Posten was an unforgivable error of judgment.

Let me interject that I am neither religious nor a Muslim. Not that it should matter for purposes of this discourse.

My objection is not to the idea that a Western cartoonist should not depict an image of Muhammad. After all, the right to do that is the essence of the right of freedom or speech and expression. Of course, one might ask if doing so is necessary to advance any purpose and, if not, refrain from doing so. Again, I emphasize that it is not fear of reaction, but RESPECT for the sensibilities of others that should be the guiding force. Somebody said that the right of free speech means nothing if not to give offense to others. One might well ask what is to be gained by a Danish newspaper in giving offense on this subject. But then, the reward of free expression should be in the expression itself, not in the degree of offense one might give.

As an aside, it is possible to interpret the cartoon showing Mohammed waving off suicide bombers and saying “Stop, stop, we have run out virgins” as not blasphemous at all, but highlighting the futility of the suicide bomber’s expectations of salvation. But that is way too subtle to attempt as a justification for something that may be funny to non-Muslims but is in pure bad taste to Muslims.

The more serious issue is that a larger battle has been lost. In his State of the Union speech last week, President Bush repeated his frequent assertion that some men rage against freedom: “And one of the main sources of reaction and opposition is radical Islam, the perversion by a few of a noble faith into an ideology of terror and death.”

The President did not start all this and in fairness has often referred to the idea that the noble tenets of Islam are being perverted by a few. However, it is fair to say that this President and much of mainstream America equates terrorism with Islam and with Islamic fundamentalism. Somehow the suggestion is that there is some part of the Islamic faith that condones this kind of behavior and that our battle is not only with acts of terrorism but with that aspect of the faith. Nothing could be more wrong.

Before we talk more on that, here is an interesting parable as reported by Mohamed Nimer, Ph. D., Research Director of the Council on American-Islamic Relations: “There is a narrative in Islamic history that goes like this: The prophet had a neighbor who used to throw their garbage at his door. One day Muhammad comes out finding no garbage. He goes to check on the neighbor out of concern for him. Impressed by the great character, that person then converts to Islam. Obviously some Muslims need to be reminded of this lesson at this time.”

It seems to me that saying there is such a thing as “Radical Islam” or “Fundamentalist Islam” is to imbue the ideas that the nutcakes propagate with some semblance of legitimacy. If the ideas that are being pressed by the terrorists, agitators and the like are a “perversion” then they do not represent Islam. It seems incongruous to call it a “perversion” and still attach the label “Islamic” to it.

We need to get away from the idea that anything done in the name of religion is somehow protected expression. The corollary is that everything done to denigrate religion is not necessarily protected as free speech.

What I mean by this is that there are propositions we can all accept: encouraging someone to be a suicide bomber is NOT the exercise of religion; blowing oneself up as a suicide bomber in the name of Islam is NOT the exercise of religion; flying a hijacked plane into the World Trade Center is NOT the exercise of religion; killing doctors who perform abortions, even if the killing of the doctor is done in the name of Christ, is NOT the exercise of religion; Pat Roberston’s calling for the assassination of a foreign leader is NOT the exercise of religion.

So also, it seems to me, a cartoon showing the Prophet Mohammad with a bomb in his turban, is an expression of the idea that the entire religion is one of violence and terrorism. While one may be entitled to hold that view, it is undoubtedly false and profane. So, my objection is to falsehood and profanity, NOT to the idea that one may offend others. For me, such publication is NOT the exercise of free speech.

Now, perhaps the parable of the Prophet’s concern for his neighbor’s failure to deposit the daily garbage becomes more poignant. It is unlikely that a Prophet showing that level of concern for his neighbor would condone violence. He did not. And my daughter should take her neighbor’s regular deposits of trash as an indicator of continuing good health.

By taking this kind of approach, we do pit ourselves against Islam as the enemy … and yet, we say that Islam is not the enemy. If we are ever to get the leaders of the Islamic world to join with us in the battle against terror and the perversion of religion, we must be able to separate ISLAM from all of the other activities. Otherwise, in the delicate triangulation among the western world (read USA), the terrorists, and the Muslims (who generally reject violence) the common bond of Islam, as long as we allow it to be called into battle, will often tip the scales against us. It is only when we stop referring to terrorists with the label “Islamic” that we can say what they do has nothing to do with religion.

If we are ever to have the moderate leaders of Muslim countries and the moderate clerics speak with us, it must be because they feel WE are willing to understand that Islam as a religion does not condone the kind of violence we have seen. And they must understand that it is in their interest to condemn those who hijack ISLAM as a justification for evil.

The aforesaid Mohamed Nimer, went on to say:”The real offense here is not about the artistic depiction. It is the way the prophet was depicted -- a man of great violence.”

We have all read that for Muslims, ANY depiction of the Prophet is blasphemy. So I think Nimer is getting at what I said earlier – it is the falsity and profanity that is at issue.

I think Flemming Rose was wrong to publish the cartoons. They served no purpose and were akin to hate speech. I think that the violence and the protests in the Islamic world were way out of proportion and much of that can be traced to exploitation of the situation by radicals. I think that the republication of the cartoons by the European newspapers was a superficially valid gesture, by western standards, in recognition of the right of free expression. However, they failed to recognize that republication of hate speech is still hate speech.

What I do respect is the Danish Government’s response of apologizing for offense but saying that given a free press, they had no right to intervene. The subtlety might have been lost on those demanding apologies, but compare what Jyllands-Posten published to the statements that landed a Muslim cleric with a prison sentence for inciting murder in Britain.

Which all proves that given an opportunity to engage in bad taste, the press will take it. And yet, this poses a horrible dilemma for the rest of us who believe that they should be able to say and publish anything … almost. Anything but falsehoods and profanity.

Cheerz….Bwana

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