Only Skilled Workers Will Make It In The Global Economy

WASHINGTON – We can argue that in America may be about half the work force is doing alright because it is positively connected to the fast-moving global economy. For them globalization is good. Most of them are “knowledge workers”. They design the sophisticated technologies which power global or globally connected businesses, or at least are familiar with them and know how to work productively with them.

Some do well, many do not

If they are in high-tech, renewable energy, complex global logistics, medical science and diagnostics, digital design, supply chains creation, management and sustainability these American workers are probably doing alright.

However, most of the others –those who perform low value, repetitive tasks or who are engaged in manual labor — are or will soon be at the bottom of the skills pyramid. Unfortunately this means that their jobs are not and cannot become stepping stones to future employment in more challenging and more rewarding sectors. In many cases, the jobs that involve repetitive tasks will probably be outsourced, or will disappear altogether, as victims of the relentless automation wave.

Lack of skills, lack of opportunity

If you belong to the bottom half of the “old economy”, your current position is bad and likely to get worse. If you do not have and cannot acquire the skills that give you dexterity with machines that work with numbers, (most likely because you had a poor education and therefore you do not know how to work with these systems), you have no career future. You are or will soon be pushed down into dead end manual labor jobs like janitor, landscape worker, bus boy, or nursing home attendant.

The unlucky former manufacturing workers who lost their jobs due to globalization and automation are equally in bad shape. If they cannot be retrained so that they could aspire to the more sophisticated positions in new high-tech manufacturing or services, in most cases they will end up in one of those dead end, low paying occupations.

Getting the jobs back 

Of course, when then candidate Donald Trump came along in 2016 arguing that the only reasons these fine factory workers lost their jobs is the greed of their corporate employers seeking easy profits by exporting jobs overseas, along with unfair trade competition from China, Germany, South Korea, Japan, Mexico and everybody else, these displaced workers were eager to listen. And they were willing to believe that, indeed, all it takes to restore their old manufacturing jobs, (with all the perks and benefits), is a new President who really wants to help the little guy by turning things around in Washington.

Yes, they believed that a President can reverse the negative impact of globalization. Yes, he can force U.S. companies to stay at home and hire more American workers. Yes, he can re-negotiate unfair trade deals, so that the avalanche of cheap imports will stop, while American companies will find new markets abroad.

A nice dream 

This is unfortunately only a nice dream. No, no President, however well-intentioned, can stop, let alone reverse, globalization. Yes, he can strong arm corporations in order to slow down or stop the outsourcing process. But this is no long term solution.

In the end, American companies will succeed only if they can be and stay competitive. Forcing them to keep expensive or money-losing operations in America, so that workers can collect a pay check, while their nimble foreign competitors conquer markets leads only to eventual economic decline.

The way out

So, what is the proper way of addressing this crisis brought about by the competition of cheap labor (mostly from Asia) and the relentless march of automation?

The only way is for the unskilled to become skilled.

Those who are not employable today because they lack the knowledge and the basic understanding of how the high-tech knowledge economy works need to get those skills. And fast. Those who do not, are left behind. For them there is no upward mobility, no career ladder.

The old adage that “hard work” is the key ingredient to success in America is no longer valid. Yes, diligence and discipline still matter. But only when accompanied by the sophisticated knowledge that allows mastery of complex systems.

How is France doing? 

Well, if this is the rather gloomy picture for millions of Americans who may have missed the bus leading to the global economy, what about elsewhere? What about France, for instance?

France recently embarked in a an incredibly ambitious political experiment. The French voters ditched the established political parties, of the left and the right, and elected President the young and completely untested Emmanuel Macron. And the reason is that this investment banker turned politician, promised nothing less than economic renaissance.

While he phrased his campaign slogans differently, he promised the same end results promised by candidate and now President Donald Trump: a complete bottom-up economic transformation.

Newly elected French President Emmanuel Macron claims that his policies will kick-start France into high gear. This rather old and unimaginative country will become a “Start-Up Nation”. As a result of fresh pro-growth policies, there will be a fresh crop of entrepreneurs and innovators.

Reform labor laws 

Well, in principle this is possible. However, how do you make this happen? One good place to start is by reforming the antiquated French labor market. France is still prisoner of the old, pro-union leftist agenda which is all about the protection of workers rights. Nothing wrong with that, in principle.

The problem is however that by focusing on the protection of those who are employed, French labor laws make it much harder for employers to hire new workers. Indeed, when a new worker is hired, given all the protections he/she is entitled to, it becomes almost impossible or at least extremely costly to dismiss him/her when business is down.

In other words, by offering maximum protection to employed workers, French labor laws made sure that fewer workers would be hired, even in good times. In addition, the perks and benefits going by law to employees made French labor costs too high, this way making French companies less competitive in the global market place.

Bite the bullet

It seems that President Macron is willing to bite this bullet. His government wants to tackle labor laws reform.

But here is the political and psychological problem. Even if well designed and skillfully implemented, labor law reforms will threaten the job security of existing workers before they will be able to broaden the labor market, therefore offering new opportunities to those who cannot get into it today. Which is to say that there will be pain first (guaranteed), and (possible, hoped for) gains later.

Can Macron convince France? 

Can President Macron convince the French people that he can manage this complicated process well? Can he convince workers who may lose their jobs now, on account of more flexible labor laws, that in the future, given greater overall flexibility, more appealing jobs will sprout across the nation, this way creating brighter prospects for millions of old and new workers? This is going to be a tough sale.

In the end, it is obvious that a brittle French jobs market will not help advance Macron’s vision of France as a “Start-Up Nation”. Economic renaissance is very appealing until voters realize that change may entail threats to their current security. I am a bit pessimistic about the depth of France’s newly discovered enthusiasm for enterprise and innovation, once the French realize that this hoped for transformation is not pain free.

I doubt that Macron will have the ability to convince most of the country that a more fluid society with fewer protections is also a more flexible society that creates more opportunities. No doubt most French would like to see more competitive companies and more jobs created. But those who are employed now do not want to lose whatever job security they have.

The challenge

As noted above, even here in America, until not too long ago the quintessential “Start-Up Nation”, in many sectors of our society and economy we are failing to live up to the old and time-tested “can do” spirit of flexibility and quick adaptation to new circumstances.

We failed to build the education, vocational training and retraining structures that would have allowed millions of workers to have a relatively smooth transition from old-fashioned, large scale manufacturing to a new, complex and more demanding knowledge economy.

Can an even more ossified France do a better job? Can a young, optimistic President Macron inject a new vigor into a declining economy?

Time will tell.

 




How Will Macron Govern France?

WASHINGTON – Emmanuel Macron’s meteoric ascendance –literally from nothing prior to a short stint in the Hollande administration, to President of a major European country—is by itself a stunning political achievement. The very fact that obscure Macron saw an opening for himself as the leader of a brand new movement (he called it En Marche!) in a crowded field populated by seasoned politicians at least twice his age speaks volumes about Macron’s political instincts.

He was lucky

That said, we also know that Macron was very lucky. The center right party candidate,the Republican Francois Fillon, the favorite to win this presidential race according to most, suddenly imploded on account of the scandal related to fake staff jobs he offered to his wife and children. With Fillon sunk and a very weak Socialist party candidate running, Macron became the only credible alternative to Marine Le Pen, assuming that he could make it to the second round of the vote. Indeed there was a brief but all too real scare that grew as the first round got closer. It was all about Jean-Luc Melenchon, an unreconstructed Marxist who connected surprisingly well with the old French leftists (still many of them!) and with many young voters. Had Melenchon managed to overtake Macron in the first round, it would have been a disaster for Macron, the would-be new leader of a the newly reconstituted reformist center. (Imagine the scenario of a second ballot with Le Pen and Melenchon as the two finalists fighting for the French presidency).

Predictions were correct

In the end, as we now know, Macron managed to get to the second round, even though not by much. And then, after this critical first round semi-victory, everything happened according to most predictions. Macron won on May 7 by a large margin, (64%), while support for Marine Le Pen did not pass the symbolically significant 40% threshold. In fact she only got to 34%. Now she is defeated and humiliated, although still alive politically and –she says– willing to keep fighting.

Happy ending? 

So, happy ending? Not quite. France and the world dodged a major bullet. A Le Pen presidency, at least at the start, would have been very disruptive, given her very negative views on Europe, the Euro, trade relations, and the NATO Alliance. Not to mention the heavy and disturbing baggage of xenophobia, racism, anti-Semitism, and more.

How to rejuvenate France

That said, while Macron’s victory for sure is a precious reprieve, it is no guarantee that a severely weakened France, burdened by unaffordable social spending, unwieldy labor rules, and inefficient state owned corporations will become all of a sudden nimble, regain the enthusiasm needed to get out of the swamp of low growth and high unemployment; not to mention be able to overcome the unresolved issue of millions of (mostly Muslim) non assimilated immigrants, in many instance the breeding mix for radicalized youth who engage in acts of terror.

It is important to stress that Macron won on a positive message. He stated that France must embrace –not reject– globalization, foreign trade and strong relations with Europe. He forcefully argued that France is part of the global economy. Withdrawing behind protectionist walls is no solution.

Untested leader 

All true. The unknown here is whether this new –and completely untested— young president (the youngest leader of France since Napoleon) will be able to galvanize his country, while at the same time gathering the necessary parliamentary support to pass critical labor and tax reforms, the minimal policy preconditions to create the enabling environment for French business and enterprise to flourish.

In order to secure these reforms Macron needs a major win at the forthcoming parliamentary elections. He needs a workable majority in the National Assembly in order to govern. Can his brand new political party repeat the leader’s May 7 surprising victory?

The best choice?

Finally another somber consideration. The very fact that we applaud Macron’s victory as a major turning point in French and indeed European politics is in itself stunning. Macron is completely unknown, untested and inexperienced. Not that the establishment politicians inspire such great confidence.

However, the 64% obtained by this young new president is by itself a manifestation of a country adrift, grasping this modest straw (Macron) because this was the only way to avoid the abyss of a Le Pen victory.

When the  French elevated General De Gaulle to the presidency, at least they knew they got a proven leader with a long, distinguished, and very public record. Today Emmanuel Macron is the new occupant of the same Elysee Palace once occupied by De Gaulle. The difference is that the French people who voted for Macron in large numbers have no clue as to how he will perform, because he has no real record.




NATO Is Indeed Obsolete

WASHINGTON – The Atlantic Alliance, or NATO, is an old security arrangement (founded in 1949) that no longer has a clear purpose. In his habitual blunt style Donald Trump, the leading candidate for the Republican nomination in the upcoming presidential elections, recently said that NATO “is obsolete”. In fact, while Trump is certainly not a leading foreign and defense policy expert, he is mostly right.

No mission

Indeed, what is NATO’s mission today? And, related to that, what means does NATO have at its disposal to execute this mission? On the first question, now that the Soviet Union is gone, the mission of a military alliance created to face it is murky. On the second question, NATO has very few military means, as defense budgets in most members states have been shrinking, year after year. (In the US, despite cuts, the Pentagon’s budget is equal to 3.6% of GDP. Germany’s defense spending is 1.2% of GDP. In Belgium it is 0.9%, in Spain 0.9%, in Italy 1.0%)

The old rationale

The initial rationale for the creation of Atlantic Alliance, the very first peace time integrated military structure, was the Soviet threat against Western Europe at the beginning of the Cold War. Europe’s proximity to the expanded Soviet Bloc, (it included all of Eastern Europe and East Germany), combined with Europe’s economic and military weakness, (due to the lingering effects of the destruction caused by WWII), prompted America to commit itself to the defense of Europe. Hence the creation of NATO in 1949, with tens of thousands of US troops permanently stationed in West Germany and elsewhere in Europe, with tanks, guns, aircraft, and nuclear weapons.

No more Soviet Union 

But then the Berlin Wall came down in 1989, and the Cold War ended because the Soviet Union imploded shortly thereafter. The Warsaw Pact disappeared. The New Russian Federation lost control over all of Eastern Europe. Germany was reunified. Moscow also lost large pieces of the old Soviet Union, including Ukraine, Belarus and the three Baltic States.

NATO is still here 

However, NATO was not disbanded in response to the withering away of the old existential threat to Europe’s security. Perhaps it was prudent to keep the old institution in place, just in case. And may be it was a good idea to allow the former members of the Soviet Bloc to join NATO, even though the new Russian leaders saw this as an eastward expansion of NATO, and therefore a potential threat to them.

Still, be that as it may, an Alliance’s strength is based not on how many members it has, (28 countries), but on its shared purpose and on its ability to deploy the military tools to secure them. And here NATO shows its inherent weakness. No clear purpose, and drastically reduced military forces.

A new threat from Russia? 

If we fast forward to today, many will argue that NATO is still quite relevant because Putin’s Russia has demonstrated to have aggressive tendencies. in 2008 it went to war with Georgia. More recently it grabbed Crimea, a piece of Ukraine. Many say that, if unchecked by NATO, Russia would keep moving westward into Poland, the Baltic States, and may be beyond.

I believe that Russia is mostly interested in neighboring regions that historically were part of Russia. The idea that Ukraine is just the appetizer for a famished Russia, while Portugal or at the very least Germany will be the pudding seems quite preposterous.

Inadequate military means

But even if we assume that this unlikely theory of Russian resurgent expansionism were in fact correct, then where is NATO’s demonstrable military deterrent to counter it?

Indeed, if NATO is still standing and operational because Russia is a threat to its members, then we should also see robust defense spending aimed at creating a war fighting force that can credibly deter aggression by showing Russia that any threat to NATO members’ security would be met by a formidable force.

Unfulfilled commitments

Well, it is not so. Because of economic weaknesses and competing social spending priorities, most European countries have allowed defense spending to go into free fall. In theory, all NATO members are unequivocally committed to spend at least 2% of GDP on defense. In practice, only 5 countries, out of 28 NATO members, have honored this pledge. Most of the others spend around 1% of GDP on their military, or less. This is half of what they promised. If you take the U.S. out, The European members of NATO have only limited air power. Practically no sizable expeditionary forces. No meaningful airlift capabilities.

During the Libya mission, confronted with a third-rate enemy, the French and British air forces run out of smart bombs only a few weeks into the conflict. Even that limited operation could not have been executed without US support in key areas such as air defense jamming and suppression, and overall logistics.

Not serious 

Quite frankly, this reluctance to field credible military forces makes NATO into a joke. You cannot say that we have to keep NATO together and strong in order to face an aggressive Russia and then have a virtually disarmed military alliance on account of the fact that nobody wants to spend diminished revenue on defense in economically weak countries.

Limited support to US-led operations 

As far as what used to be called “out of area” (that is possible threats outside of Europe) NATO does not have clear objectives and a credible strategy to achieve them. Yes, NATO countries participated in the difficult Afghanistan and Iraq conflicts. NATO countries intervened in Libya. All true. But in all these efforts (Libya is a partial exception) the US was leading, and selected NATO countries followed.

At present, while the US (with little enthusiasm) is leading a military effort against ISIL in Iraq and Syria, some NATO countries are contributing some aircraft to the air war. But there is no clear NATO policy. And certainly no commitment by all NATO members to participate.

No clear purpose 

So, here is the thing. With the end of the Cold War, NATO lost its original purpose. What we have now is murky strategic objectives and lack of military means to accomplish even slightly ambitious missions.

The NATO Alliance is now mostly a talking shop with too many members who contribute almost nothing of value. While something may change after the US elections, it is unlikely that anybody will ask the hard questions about purpose, strategy and means.

No debate on difficult issues 

Nobody wants to have an open debate within NATO that would inevitably expose deep political divisions and embarrassing military vulnerabilities. For this reason, I suspect that the old institutional framework will be left as is, even though most analysts recognize that it is obsolete and virtually meaningless when it comes to core military capabilities.

In the future, if we are lucky, the US may be able to create ad hoc  “coalitions of the willing” and work selectively with the 4 or 5 NATO countries that still have modern armed forces.




After The French Vote, Is This The End Of Europe?

WASHINGTON – The triumph at the polls for French regional elections of the right-wing National Front led by Marine Le Pen is to be taken very, very seriously. This is not just a knee-jerk reaction to the Paris shootings perpetrated by a small group of Islamic terrorists. This victory of the far right is an indication of a profound spiritual and moral crisis within France, a country that until yesterday was considered a true democracy, and a pillar of the EU.

The National Front 

The National Front is now poised to get control over many French regions. Right now, based on the recent vote, it is the largest party in France, even though by a small margin. The Socialist Party is badly beaten, and almost dead. The “respectable” conservative party, the Republicans, is running second.

This electoral contest is not over yet. It is possible that in the second round an improbable coalition of Socialists and Republicans may be able to stop the National Front wave.

Xenophobia and nationalism 

Still, what we have now is that a very large segment of the French society voted for an openly xenophobic, anti-immigrant, anti-Muslim, anti Europe, and anti-Euro party.

Look, there is no depth to any of this. But there is a lot of emotional intensity. This is right-wing populism, with tinges of a regression to uncivilized barbarism. But this is unfortunately the way in which a despondent and frustrated French society is giving political expression to its despair.

The solution to all this 

The citizens look at French economic decline, and at what they perceive as societal deterioration created by millions of mostly Muslim immigrants who cannot be assimilated. In fact, some of them turn out to be terrorists.

It is a bad mix. Economic decline, diminishing opportunities, mediocre leadership, and the perception that “the enemy within” will destroy us. Hence the popularity of an openly xenophobic, nationalist force that promises to fix all this –quickly and with harsh methods, if needed.

Civilized people will say that this is impossible. This madness cannot last. Common sense will have to prevail. The National Front will disappear soon, as it should. Well, the fact is that as France became weaker, the National Front got stronger. The politics of despair work for those who promise “solutions”, however unrealistic they may be.

Impact on Europe 

Whatever the implications for France, from a European perspective this political development spells disaster. If you go back a few years broadly speaking there was some, although usually tepid, support for increased European integration.

But now, with a decidedly anti-EU political force in a strong position in France, one of the key EU pillars, forget about any plans of further integration. Nothing important can happen within the EU without strong French support. All far-reaching initiatives are based on a prior agreement between France and Germany. The anti-EU National Front is now strong enough to make this agreement virtually impossible.

And bear in mind that the rise of the French National Front is not an isolated phenomenon. Indeed, if we review what is happening across Europe, we get an alarming picture.

Anti-EU sentiments on the rise 

In Hungary there is Viktor Orban, a would be dictator who talks about the need for an illiberal democracy. In Italy you have the Lega Nord, a nationalist, northern secessionist party now led by Matteo Salvini, and “5 Stelle”, a large anti-system party, led by Beppe Grillo. In Finland there are nationalists and xenophobes. In Denmark there is a growing anti-EU sentiment. In Greece you have the ultra right Golden Dawn party. In Poland the nationalists of the Law and Justice Party led by Jaroslaw Kaczynski just won the elections. Add to all this perennially undecided Great Britain that at some point will have to vote on whether to continue its membership in the EU or not.

And there is more. New parties on the left, like Syriza in Greece, led by Prime Minister Alexis Tsipras, and Podemos in Spain, while promoting a totally different political agenda, are certainly not pro-EU. Finally, consider the centrifugal impulses created by the strong support for independence in Catalonia and in Scotland, and “Europe” begins to look like a real political mess.

No real support for further EU integration 

What does all this mean? It means that the ideological and moral glue that kept Europe together, weak as it was, has gotten a lot weaker in the past couple of years.

The economic crisis, the EU-imposed austerity on profligate states, high unemployment, lower standards of living, the endless stream of refugees from Africa, and now Syria, coupled with more Islamic terrorism, created a sense of existential threat.

Hence the popularity of anti-system political forces that promise strong measures to fix all this, quickly. Whatever their vacuous agendas, these now stronger parties on the right and on the left share an anti-EU bias.

Shaky EU foundations 

Sure enough, there are strong, established, shared economic interests that keep Europe together. There is a large free trade area, a common currency, and a lot more. Yes, but “Europe” as a believable political entity does not exist.

At best, it is a “Supercharged Regional Chamber of Commerce”. This entity is held together by a myriad of agreements and binding rules. But these agreements are not understood or appreciated by the average European.

And now you have the emergence of powerful centrifugal forces that do not believe in the value of free trade and a common currency. They dream of rebuilding their own nations and protecting their economies. From their perspective, Europe is in fact a menace.

Yes, these are silly ideas. Regressing into protectionism in this era of globalization makes no sense. But it does not matter. These “political platforms”, such as they are, now have millions of believers.

A weaker Europe 

So, is it over for the Brussels technocrats, and all the EU supra national institutions? No, it is not over. But forget about any new momentum leading to further European integration. Above all, forget about all dreams of any process that will lead to a strong and assertive United Federal Europe. This will probably never happen.

May be Marine Le Pen and her opposite numbers across Europe are not strong enough to destroy all that has been created since 1957.

But they seem strong enough to make whatever Europe there is even weaker, and even more ineffective.




The Terror Threat Will Not End

WASHINGTON – Terror attacks hatched by crazy militants underscore the deep vulnerabilities of modern, open societies. They trigger an avalanche of emotional and sometimes useless reactions. After Paris was hit hard (yet again) by another cell of Islamic radicals, French President Francois Hollande declared passionately that France is clearly under military assault, and that this is “war”.

Hit them hard? 

Well, this being war, as a response to this ISIL-led “military operation” aimed at Paris, Hollande dispatched French jet fighters to hit targets in Raqqa, Syria, the de facto capital of the ISIL-led, “Caliphate”.

Does this response make any sense? Symbolically, may be. But as a military reaction, not a lot; unless Hollande intends to engage up to the end, namely until the complete annihilation of the Caliphate. Well, first of all, France does not have the military tools to do this. Besides, even complete success would only be a partial victory.

Destroy the Caliphate 

I have argued here, several times, that the destruction of the self-described Caliphate would help the “anti-Islamic radicalism” effort. Indeed, the very existence of this bizarre but quite real state, right in the heart of the Middle East, is a source of pride and inspiration for all Islamic militants, and a powerful tool to get more recruits willing to go there, and fight “for the cause”.

That said, I am under no illusion that even the complete and final destruction of the Caliphate will take care of the anti-Western terror problem. At least some of the more committed militants will melt away from the ISIL-controlled territories in Eastern Syria and Northern Iraq and will regroup somewhere else.

A difficult agenda

Well, so what is to be done? There is no simple answer. There is no clear recipe that will quickly lead the West to “victory”. Let’s be clear, even in this strange conflict, “victory” will take place only when all the known and unknown terrorists have been caught, and I mean all of them; and –most crucial– nobody else will be willing to follow their example and engage in any fresh terror plots.

In other words, as in all conflicts, large or small, all the enemy combatants and would-be combatants have to say clearly and unequivocally: “We lost. We are done. No more fighting”.

This is the strategic objective of any conflict, and the only possible definition of “victory”. This must be the goal.

But in this conflict against a variety of terror groups it is an extremely difficult goal. And here is why.

Many foot soldiers 

Whether we like it or not, there are thousands and thousands of people across the Muslim world, and within Muslim communities in Western countries, who now see the West as their mortal enemy. They are not going to change their mind on this any time soon. And there is not much we can do to about any of this.

It is easy 

Besides, planning and executing acts of terrorism targeting civilians in Paris, New York, or Berlin is very easy. Right now, it only takes a few motivated people willing to die in a suicide mission to hatch a terror plot. And, sadly, there seem to be plenty of them.

The idea that the Paris terror attacks are the result of a highly sophisticated command and control structure is nonsense. Sure enough, it takes some planning and coordination to plot and execute, simultaneously, multiple attacks. But it is not that complicated. The terrorists identified a number of unprotected, soft targets, (a soccer stadium, a concert hall, and restaurants). Going there and opening fire, indiscriminately, against unarmed civilians is not that difficult.

It is cheap

And it gets even worse. These type of attacks against soft targets are cheap. Very cheap. A recent Reuters story quoted some experts who calculated the up front cost of the Paris terror attacks: about 7,000 Euro, approximately US $ 7,500.

Well, this is next to nothing. Even if the real amount spent is higher, say 20,000 Euro, it is still a very low bar. So, here is the thing. The barrier to entry to be a terror group is extremely low. You need a few, motivated people who know how to handle fire arms, and some cash.

How to protect ourselves 

Having said all this, how do we protect ourselves? Sadly, a perfect shield does not exist. The main line of defense has to be more and better intelligence. Admittedly, this is a never-ending, thankless job.

There are millions of young, unhappy Muslims who may fit the profile of a would-be terrorist. How do you vet all of them? Impossible. Sure, we can get better at this. But we cannot become perfect.

In the meantime, we can extend police and intelligence services powers. But this creates a conflict with the need to protect our civil liberties. Therefore, here we have an issue. How far can we go? Do we want to become a police state, so that the police can better protect us? It is obvious that this can lead us down a dangerous road.

There is no strategy 

Anyway, here is the thing. Bombing Raqqa a couple of times is not a serious strategy. A serious strategy would have to include the complete destruction of IS and the Caliphate. But even this would not be enough.

A serious strategy would have to include the creation of an alternative message that could be embraced by those who now choose militancy and terror plots. This would be the real “silver bullet” that would defeat terrorism. But I doubt that anybody can come up with a new, more appealing “peaceful package” that would actually “sell”. The end game here is to convince young militants that there are better ways to get more opportunities in the societies they live in. Unfortunately, nobody is that smart. As yet, nobody developed a new message that can gain real traction.

Silly grandstanding, empty talk 

In the meantime, though, we waste time grandstanding with unproductive talk of “war”. Here in Washington, we waste time with stupid debates about how we should vet Syrian refugees who want to come to America. The idea that several US Governors and a majority of the members of the House have really nothing better to do other than demanding more stringent vetting of poor souls from Syria, in case some of them may be terrorists in disguise, is disheartening. Yes, potentially this may be an issue. But we already have a very stringent vetting process. Refugees do not just walk in. It takes several months of checks and re-checks.

In any event, is this all we can do? How about giving more resources to the FBI, the federal agency with the people who know something about the threat?  And how about getting serious about destroying the Caliphate?




The West Is Caught In Middle East Chaos

WASHINGTON – The Paris terror attacks lead to Syria, to the Arab Spring, to the Sunni-Shia conflicts, to al Qaeda, and to the rise of ISIL and of the Caliphate. This is a huge mess; and there are no quick solutions. The real issue is not about catching a few bad guys. The issue is in endless religious strife in which opposing militants in the Middle East have long lists of mortal enemies. The West is on many of them.  

Chaos 

Here is the sad truth. The Middle East and parts of North Africa are in total chaos. Within many societies there is a structural inability to chart a rational course towards modernity focused on education, enterprise, more gender equality, inclusiveness, genuine political freedoms, and religious tolerance.

No viable path to modernity 

This inability to choose and pursue modern, secular development models fuels economic stagnation, poverty and despair. Prolonged stagnation fuels resentment. A great deal of this resentment is now channeled into religiously inspired movements.

These movements preach violent actions against various enemies: rapacious and corrupt governments, other religious sects, Christians, you name it. According to the militants, only the physical destruction of their enemies will bring about true religious piety, peace, justice, and prosperity.

Of course, none of this is true. What is true is that, inspired by this folly, religious believers have created a disheartening cycle of violence that generates violent reactions, followed by more violence.

Enter the Caliphate 

Without exaggeration, this is chaos. At least in some parts of the region, (Syria, Lebanon, Iraq, and Yemen in the Middle East; Libya in North Africa), unmanageable chaos. The creation of the self-described Caliphate in parts of Syria and subsequently Iraq made this turmoil even worse, in as much as it created a tangible symbol of what is viewed by some Sunni militants as a successful religious revolution.

The West is caught in this mess 

Deep down, the West has really nothing to do with any of this. However both Europe and the US are caught into this trap because of old historic ties to the Middle East and more recent connections related to their dependence on oil and gas produced in the Region.

In the case of the US, there were also high-profile, complex relations with the discredited regime of the Shah in Iran. And then there were military interventions: the first Iraq war in 1991, and then the occupation of Iraq in 2003.

Europe is exposed 

In the case of Europe, there is a mix of old colonial ties and more recently a huge migration into Europe from the Middle East and North Africa. In France alone, (population almost 65 million), there are about 5 million Muslims, most of them of Arab descent. In Belgium, Muslim are 6% of the population, in Austria 5.7%, in the Netherlands 5.5%.

Anyway, you get the picture. Many of these immigrants, for whatever reasons feel discriminated against, marginalized, humiliated, or worse. Therefore, many of them look at the radical movements in the Middle East as an answer to their quest for meaning and belonging.

Disaffected young Muslims 

And so here you can see how the Middle East/North Africa religion-inspired chaos has been exported into Europe. There is a back and forth of French-born, Belgium-born, UK-born would-be militants who have traveled to Syria or elsewhere. They have been recruited. They now believe that exporting Jihad into Europe is a good way to advance their cause, because Europe is somehow responsible for the plight of the Arab World and beyond.

The road to Paris 

And this leads us to the tragic Paris massacres perpetrated by some young French and Belgians terrorists of Middle Eastern origin.

Sadly, because of all the above, it should be reasonably clear that there are no quick fixes to any of this. The Middle East will be in turmoil for who knows how long. The ISIL Caliphate can be attacked and destroyed. But, even assuming a successful operation, the attackers should have a workable game plan on how to reintegrate the Sunnis who lived under ISIL into the main stream. Good luck with that.

Mission Impossible 

As for “Combating Terror”, this is almost “Mission Impossible”. As I indicated above, in Europe there are tens of millions of Muslims. Even assuming that only a tiny fraction of them are potentially dangerous individuals willing to engage in acts of terror, police authorities and intelligence agencies simply do not have the resources to sift through millions of people and identify all the bad guys before they act.

In the US the picture is a little better because there are far fewer Muslims, and therefore not so many individuals who may represent a potential threat.

Be prepared to absorb the consequences

Still, be that as it may, the West has to be prepared to absorb the violent consequences of an enormous crisis affecting many countries. Terrorism is the most unfortunate manifestation of the intellectual and moral chaos now rampant in the Middle East. And it is very hard to protect ourselves against it, in large part because there are too many potential suspects, and in part because we live in free societies in which individual liberties are protected and police powers are limited by the law.

Allow enhanced police powers? 

Of course, we could collectively and indefinitely do what France just did in the aftermath of the Paris attacks. Declare an open-ended state of emergency. This would allow law enforcement agencies to do pretty much all they want, including arrests without warrants, search and seizure operations, and what not. Forget about “probable cause”. But this is not doable. We love our freedoms.

Free but vulnerable

Therefore, as we want to stay free, we also have to accept our inherent vulnerability. Nobody from the outside can fix the Middle East. And its turmoil will go on and on. And terrorism aimed at Western targets is unfortunately a manifestation of this turmoil.




The Enormous Value Of Subsidized Child Care

WASHINGTON – Most advanced countries are experiencing low or very low fertility rates. Anything below 2.1 children per woman signals population decline. In some cases the fertility collapse has reached truly alarming proportions.

Elderly Asia

The absolute worst is Singapore. With a fertility rate below 1 child per woman, this rich, well-managed city-state will soon be a country of very few old, or very old people. Within Asia, Japan and South Korea are also doing poorly, with around 1.4 children per woman. (In China, with a mandated “one child policy”, the state created the declining population problem).

Declining birth rates in Europe 

In most of Europe, same story. Fertility rates are well below population replacement level. The steepest decline is in the East and in the South. Fertility rates in Italy and Greece are very close to Japan’s.

France is the only bright exception. And, according to The Economist, (Baby Love, July 25, 2015), this has mostly to do with public policy. The French state subsidizes child care services.

Either children or a career

Here is the story. The main reason why women in developed countries marry much later and have far fewer children is that many women who have entered the labor market are unable to successfully mix a job or career and motherhood. Not surprisingly, it is really difficult, in many cases impossible, to have both: a demanding job and children.

Therefore, as many women nowadays choose to have a career, this means fewer children. Of course, there may other reasons as well. But demanding work and children in many if not most cases tend to be mutually exclusive.

The result of women opting for work is fewer babies and declining populations. And declining populations create all sorts of problems. Among them: shrinking labor markets, and less economic dynamism.

Social security systems will have to be redesigned 

In developed countries we have to add another major public policy problem. Most Western nations adopted retirement systems in which the active working population pays into the national fund that delivers financial assistance to the retirees. This system was conceived a long time ago. It was based on the assumption that there would always be a large active population that pays into the fund, while the number of retirees would always be relatively small. Therefore, the fund would always be solvent. Well, not so anymore.

Due to declining fertility rates, now there are fewer workers paying into the system; and tomorrow there will be an even smaller number. At the same time, there are more elderly people who live much longer lives on account of health care improvements. So you have very few active workers who are supposed to provide the funds necessary for the retirement and health care needs of more older people who live much longer, and therefore cost more. This system cannot work anymore as originally designed.

Let’s follow the French example

Anyway, if we agree that falling birth rates create major problems, then let’s do what France has done. Subsidize nurseries and other child care services. When women realize that society will pay for their child care, they will no longer be forced to choose between a career or motherhood. Knowing that there will be good and reliable child care facilities available to them at no cost, or at a nominal cost, they will be able to have both a career and children.

A worthy investment 

Of course, taxpayers will have to absorb this significant new financial burden. But it will be worth it. There will be a great gain for society. Millions of women will be free to pursue job opportunities. Women who already work will not have to drop out in order to take care of their newborns. The economy will gain because of the added contributions coming from 50% of the population. And societies will be rejuvenated and enriched.

The alternative is to let this trend continue. Think of the consequences. Countries  composed mostly of old people are not appealing markets; and they are unlikely to be or become great laboratories of innovation and forward-looking ideas.

Let’s help women live productive and fulfilled lives; and they will help us all.




Nutella Causes Global Warming

WASHINGTON – Now we know it. Nutella, the popular hazelnut chocolate spread made by the Italian firm Ferrero, causes global warming. And we get this from a reputable authority: Segolene Royal, French Minister of the Ecology, Sustainable Development and Energy.

Deforestation, palm oil and Nutella

You see, it goes like this. Palm oil is a Nutella ingredient. And many countries, such as Indonesia, have cut down natural forests in order to obtain land for palm oil plantations. The loss of these forests is detrimental to the global environment. Therefore, if you want to be a good steward of the environment you should really stop eating all this Nutella.

Our palm oil is OK

Right after Ms. Royal uttered this warning, Ferrero, Nutella’s manufacturer, issued a statement that contradicts the French Minister. All the palm oil used by the company is sourced from environmentally safe plantations. (Whatever that means). Therefore, according to Ferrero, Royal’s comments do not apply to the palm oil the company used in its products, including Nutella.

Italian retaliation: Nutella for dinner

Following this “Nutella tempest”, Minister Royal apologized. Nutella is not such a big issue, after all. But it was unfortunately too late. The damage has been done.

In a polemic response, Luca Galletti, the Italian Environment Minister, announced that he was having Nutella for dinner. You see, finally we know that the “Nutella Issue” is at the heart of French-Italian relations. And now we know the meaning of “high stakes politics”.

Forgetting real problems

As the Nutella battle unfolds, both the French and the Italians forget that there is a genuine, ongoing tragedy at the Ventimiglia border between France and Italy. There are thousands of unhappy illegal immigrants from Africa who want to get into France. But France closed the border because it already has more than its share of illiterate, mostly Muslim, immigrants. Some of them have become Islamic radicals, killing French citizens. France does not want to take in more of them. Therefore these poor, stateless and homeless migrants are stuck there, on the Italian side of the France-Italy border. There have been riots, and more. This, I would suggest, is a real problem.

Is palm oil a big deal?

That said, let’s assume that there is indeed a clear correlation between Nutella consumption, bigger palm oil plantations in Malaysia, Brazil or Indonesia, and increased global warming. Let’s assume that it is indeed so. How big an issue can this be? Is this what a French Minister should be talking about in a TV show? Nutella?

France’s ongoing crisis

Indeed, leaving aside the African migrants at the border with Italy, let’s look at France and its really big problems. France is doing poorly. Its economy has been stuck in low gear since the Great Recession of 2008. The national debt was 63.9%  of GDP in 2006. Now it is 95%. There has been negligible economic growth, (most recently less than 1%), while unemployment remains stubbornly high, (10.5% in 2014). In recent elections, the far right, xenophobic (and pro-Russia) National Front scored major victories, while a 2014 poll indicates that 27% of French young people have a favorable opinion of ISIS, the brutal movement that created the Islamic State in parts of Syria and Iraq, while getting notoriety because of its barbaric methods. Well, you get the picture. France is a troubled country.

Royal to the rescue

In order to breath new life into his undistinguished government, Socialist President Francois Hollande called Ms. Segolene Royal, (once his unmarried partner, and mother of his four children), into the government as Minister of the Ecology. (Ms. Royal was the official Socialist Party candidate for the French presidency in 2007, and she was soundly beaten by Nicolas Sarkozy).

And now we see the results of this inspired choice. Yes, let France focus on the right priorities. Let’s have a war on Nutella, so that we can preserve the global environment. Brilliant idea.

Or may be not, since Royal retracted, and said that after all Nutella is no big deal.

Some leader.




Anti-Islam Movements Gaining Ground In Europe

WASHINGTON – As terrible as they are, the Paris terror attacks are not that surprising. There are several Islamic terror breeding networks scattered around the Middle East. Al Qaeda is still out there, probably operating from Western Pakistan. There is the (self-defined) Islamic State, (also known as ISIL, or ISIS), still very much in control of large parts of Syria and Northern Iraq. There are al Qaeda offshoots in  Yemen.

Jihad is popular

As we all know, this endless jihadi effervescence has captured the imagination of many young European, Australian and American Muslims. Feeling marginalized and disaffected in the Western countries where they were born or raised, they find the escapist millenarian ideology fostered by radical Islamic groups quite appealing. Probably many of them believe that, by joining this struggle, they will finally be able to give meaning to their lives.

Therefore, some of them travel to Syria to join what seems to them as a winning jihad. Others receive terror training elsewhere. Among all of these would be holy warriors, at least some decided to put their training into practice by killing the journalists of Charlie Hebdo and some of the customers at the Jewish market in Paris.

Sadly, while killings like these will not be that frequent, it is likely that we are going to see more of them. And this is simply because it is impossible to find a neat “solution” to this problem of young people who believe in crazy ideas (disguised as true religion) who turn into violent fanatics.

It is obvious that, in the short-term, main stream Islam is incapable of discrediting and therefore delegitimizing this violent offspring. Unfortunately, the bizarre notion that it is indeed noble and good to kill “the enemies” of the true faith “In the Name of God” has an extremely powerful appeal. Of course, as with all waves of fanaticism, at some point this one will also go away.

But, for the moment, its appeal is very strong. And it is here to stay.

Too many angry young Muslims

Indeed, there are simply too many young unhappy Muslims spread around several  countries. Obviously, only a fraction of them are up to no good, plotting their own mini-jihad. Still, this threat is spread all over; and therefore it is hard to contain it.

How can Western police and intelligence services, with limited resources, keep tabs on every possible suspect? This is impossible. By the same token, even when declaring a heightened state of alert, it is equally impossible to guard and protect every soft  target, in so many countries. There are just too many of them. As the Paris events have demonstrated, just a couple of young fanatics can kill people, while creating national chaos.

Be that as it may, these high-profile attacks perpetrated by just a few radical Muslims give strength to many growing xenophobic, anti-Islam political movements that are bubbling up all over Europe. The best known is the National Front in France. But there are many others, from the Netherlands to Sweden, Poland and Germany.

Anti-Muslim movement getting stronger in Germany

A German anti-Islam movement is becoming more organized. Here is a summary of a recent BBC report on Pegida, acronym for “Patriotische Europaer Gegen die Islamisierung des Abendlandes” , “Patriotic Europeans against the Islamization of the West”.

“A record 18,000 people turned out recently at one rally in Dresden. Thousands of people marched in Berlin, Cologne, Dresden and Stuttgart. Pegida was founded in Dresden by activist Lutz Bachmann in October 2014. It is an umbrella group for the German right-wing, attracting support from mainstream conservatives to neo-Nazi factions and football hooligans. Pegida holds street protests against what it sees as a dangerous rise in the influence of Islam over European countries. In a 19 points manifesto Pegida says the movement opposes extremism and calls for protection of Germany’s Judeo-Christian culture.

A poll of just over 1,000 people carried out by Germany’s Stern magazine found one in eight Germans would join an anti-Islam march if Pegida organised one near their home. Germany receives more refugees and asylum seekers than any other EU country. Many of those have come from war-torn Syria”.

Get rid of all the Muslims

So here are the ingredients for a dangerous escalation. In Europe there are now several grass-roots, anti-immigrant, and mostly anti-Islam movements whose members believe that Western societies will lose their identity, because of too many “alien elements” –mostly Muslims– immigrating there.

Now, in the aftermath of the Paris high-profile attacks, the leaders of these movements can claim that this terrorism is conclusive proof that they have been right all along: “Muslims are alien elements that as a minimum pollute Western civilization, while many of them are actively trying to destroy it”.

Hard to believe how in this poisoned climate it will be possible to welcome, let alone assimilate, the growing number of Muslims from the Middle East or North Africa who try to get to Europe, legally and illegally, every day. On the contrary, we can expect random attacks against Muslim communities in European countries, while political forces that want them expelled will gain strength.

Since this wave of (mostly Muslim) immigrants from poor countries in North Africa and from war-torn Syria is not about to end, the mix of openly unwanted newcomers and xenophobic movements who want them out is likely to become explosive.




Why Western Media Avoided Calling The Paris Mass Killing “Islamic Terrorism”?

WASHINGTON – The common feature of almost all the reporting about the Islamic terror attack against the magazine Charlie Hebdo in Paris, with 12 people killed and many others injured, is the deliberate omission of the adjective “Islamic”. In fact, in early reporting, some media even avoided calling this killing spree an act of “terror”, preferring the more neutral and politically unassailable expression “act of violence”, or “senseless violence”.

From “violence” to “terror”

After French President Francois Hollande called the shooting an act of terror, then most media felt on safe ground and changed from “violence” to “terror”. But hardly anyone calling this tragedy “Islamic terrorism”. This deliberate vagueness continued even after the news that the probable suspects have been identified as French citizens of Arab descent, while the police is pursuing them, (one of them surrendered).

Islamic terror?

All in all, for most media reporting on this event, the step from defining this very violent action “terror” to labeling it “Islamic terror” seems to be too long. And so, very few dared to call this mass killing by its proper name.

Among the few, Alexis Brezet of the daily French Le Figaro who wrote in an editorial: “C’est une guerre, une vraie guerre, qui nous a été déclarée: la guerre du fanatisme islamiste contre l’Occident, l’Europe et les valeurs de la démocratie”. “This is a war, a true war that has been declared against us: the war of Islamic fanaticism against the West, Europe and democratic values”. Well, let’s call a spade a spade.

But most media, especially immediately after the fact, did not feel the need to go as far as declaring the obvious: “Yes, there are some Islamic fanatics in France, and elsewhere in other Western countries, who believe it is their mission to  indiscriminately “punish” infidels through bombings, killings and other acts of terror”.

We know the facts

And therefore most media are just not going to venture as far as stating that this mass killing in Paris is the work of Islamic religious fanatics. And yet the facts we know (and this was before the identification of the possible culprits) do not allow much uncertainty.

The satirical magazine Charlie Hebdo has been a target of previous attacks by Muslim radicals and is under police protection on account of its policy to publish satirical material on Islam and the Prophet Mohammed, an editorial position that at least some Muslims consider to be a terrible offense that must be punished.

So, we know that Charlie Hebdo magazine is viewed as an enemy by Muslim radicals in France, and possibly beyond. The shooters who killed several staff members, while injuring many others, shouted that their action is their way to avenge the Prophet. And they did so while also shouting “Allah Akbar”, “God is Great”.

So, based on all we know, it is not wild speculation to assume that the French journalists were targeted and killed by terrorists inspired by their own interpretation of Islam, because of their “sin” of publishing (offensive) satire against Islam.

But no, we are not going to say that.

Why such restraint?

The question is “Why not?” Is it because (very responsibly) we do not want to fan the flames of violence? Is it because we do not want to encourage random retribution against thousands of possible Muslim/Arab targets in France or elsewhere?

Sure enough, it is possible that, by characterizing this murders as an act of an “all-out” war by Muslims against Christians, policy-makers and the media may become responsible for inciting chaos.

Indeed, if we start shouting that “Moslems” are attacking “us”, this may appear to some (Western) crackpots as a green light to engage in their own indiscriminate private revenge by bombing mosques or buildings where Arab families live.

This is true. Therefore I do agree that, even when faced with such shocking news, one should try to stay calm. And yet, I suspect that there is a lot more behind this media “restraint”.

Let’s not provoke them

I believe that behind all this there is an unconfessed fear that, by denouncing “Islamic terrorism”, we may make the terrorists “angry”, while inciting others to join the fight. And –you see– when they get really angry then they become more vicious and more aggressive. Therefore, if somehow we tone this whole thing down, for instance by omitting the plain fact that this is religion-inspired violence –which is to say that this is not about religion but may be something else– we may be able to avoid more trouble. I have no solid evidence to back this assertion up, but I feel that this is the real reason.

Fear of the unknown enemy

And this does not surprise me. And here is why. We have reasonably peaceful Western societies under occasional attack by assorted angry Islamic radicals (many of them home grown) who really believe that we are the source of all their problems. They also claim that in order to be true believers they have an obligation to retaliate against us.

We know that there are not that many of them. But their determination and their violent methods make them lethal. To make all this a lot more complicated, we do not know how may there are, where they are, and we are not sure that we can catch them, let alone prevent them from undertaking new attacks.

Can we wish this ugly thing away?

And therefore we cling to the totally irrational hope that, if we just tone down a bit what just happened, we may be able to avoid more such attacks. Look, I do understand that gratuitous inflammatory language is not helpful.

Indeed, if we go back a few years, George W. Bush’s almost daily repetition that after 9/11 America was engaged in an existential “War on Terror” that had to be waged against enemies who wanted to destroy us did not help much. In fact, major mistakes (think about the invasion of Iraq) were justified under the catch-all label of this “fight to the end” against “mortal enemies”.

However, while we do not want to fan the flames of violence, deliberate omissions just like those I observed amount to obfuscation and/or a flight into some delusional dream world in which, if we just call this religion-inspired violence something else, this threat somehow will vanish.

We do not know how to deal with terrorism

The problem about terrorism is that it is indeed a form of “asymmetrical warfare” in which the asymmetry always benefits the attacker. Just one action always gets an oversized echo. In this case, three gunmen in Paris, by killing a few journalists, managed to create national and internationals convulsions, with reactions and repercussions half a world away. President Obama made a public statement. The Police Commissioner of New York City made a statement.

The fact is that our societies are just unable to find the appropriate response to a (self-described) mortal threat whose nature, scope, intensity and staying power we cannot gauge and simply do not understand.

I have said in earlier pieces that probably the best approach would be to deliberately down play all terror acts in order to deny the terrorists what they want the most: “Headlines, and the Fame that comes with them”.

Fear invites more attacks

Clearly we do not have the discipline to deny the terrorists the headlines they crave and get after each action. Yet, by failing to call them what they truly are, we reveal how deeply afraid we are of them. And this palpable fear is probably interpreted by them as weakness.

Unfortunately, the perception that feeble societies will easily crack under pressure will encourage more attacks.