When John Hawkins ran his poll among right-of-center bloggers to compile a list of the 20 favorite editorial columnists I put in the Daily Telegraph’s Barbara Amiel fairly high on Peaktalk’s list of candidates. She is a pretty unique and good columnist, yet she did not make it onto the final 20. She probably lacks the gravitas of a Sullivan, Hitchens or Steyn in North America, but I highly recommend her and her column in the Daily Telegraph today on Tony Blair (syndicated via the National Post) proves why.

Blair quickly saw that the Soviet Union's demise buried more than an empire. It demolished the myths of scientific socialism, syndicalism and any lingering notion of the superiority of planned economies over free enterprise. He knew Labour hadn't a chance in hell of being elected while it held on to any of those ruined orthodoxies.

She then continues about Blair’s stance on terrorism and the net result of it: Blair is now more isolated then ever in Britain which is probably a shame since he is absolutely right about the road he has chosen, and if he becomes the victim of a Labour coup it is not only Labour that’s toast but Britain too. Never a great fan of Blair’s politics myself; I admired him for his stance on Iraq and terrorism in general. When conservatives like Amiel pen down a genuine piece approving a third-way social-democrat, it’s worth taking notice. As they say, go read the whole thing.

At the peril of contradicting myself about economic freedom and cross-border mergers, I have to say that today’s conclusion of the Air France – KLM Royal Dutch Airlines deal does not get me very excited. The net result of this merger, which I discussed before, is Europe’s largest airline and it appears likely that Italy’s Alitalia will join the new combination later on. Again, market pressures have forced both firms to combine their operations; I just would have preferred an Anglo-Dutch link, that’s all.

The Economist this week comes out with a leading editorial on Canada under the heading “Canada’s New Spirit”. The Economist is a great resource in keeping you informed about issues that you are not up to speed with and I relish reading up on deregulation in Kazakhstan or elections in Rwanda. Having lived in Canada for four years I know a thing or two about the politics and markets of the place, so I can confirm that the Economist’s analysis nails it although the banner of a “cool Canada” is somewhat misleading. In a nutshell, Canada gets a compliment from the Economist for its progress on such issues as gay marriage and decriminalization of marihuana. In addition, it seems that for now the issue of sovereignty for the French-speaking province of Quebec has been neutralized, although there are probably many who would not consider that exactly as progress. But underlying these beautiful things are some serious disruptive factors that may yet take the country’s new spirit away in order to reveal some very unpleasant realities. The middle class is over-taxed, a divided opposition has turned the country into a one-party state, relations with the US are abysmal, the state of the Canadian armed forces is pathetic and the ways in which tax revenues are redistributed among the provinces is counter-productive. Add to that the many bright people who pack up their bags and head south, as well as a national healthcare system that is under serious pressure and you get a picture that is distinctly un-cool.

Although there are many sound explanations for Canada’ problems, the fundamental problem that the country has, is that it has erroneously started to believe that it is unique, that it is different from the Americans and that by perpetuating that myth it would be able to create a self-sufficient national identity that could weather political and economic storms and would allow it to prosper in its own right. Almost like North Korea’s belief in juche, self-reliance in order to reduce the influence of a powerful neighbor. In North Korea’s case it was the Soviet-Union, in Canada’s case the US. Am I hallucinating? No, a country that keeps foreign investors out of a lot of businesses is destructive to any idea of wealth creation, even the Europeans have figured that out. Protecting minority and workers rights are great but if they are able to prevent simple feats such as allowing commercial banks to merge then that is patently wrong as it flies in the face of economic logic and great achievements in that department in other Western countries. What to make of a government that interferes with “culture” by financing, regulating and overly influencing content production and distribution in order to protect some average homegrown writers and moviemakers? And while the national healthcare system is delivering decent services to most Canadians, the dogmatic approach to its existence has prevented any creativity to ensure that the very system itself can survive. I mean, how can anyone reasonably argue against private MRI clinics that can absorb the overflow from long-waiting lists and thus alleviate the pressure on these public facilities?

Again, some European countries (notably the British and the Dutch) have showed that taxes can be cut and that welfare can be reformed and that private healthcare can peacefully co-exist with a system of publicly funded health. Even the French have come to the realization that cross-border mergers are not necessarily harmful. All of these are simple economic truths and some in Europe are slowly adopting some liberal, American notions of economic freedom and wealth creation. Hey, I am getting perilously close to approving of the current political and economic trends in Europe to make an argument about Canada. The Canadians in the past ten years have done pretty much the same as the Americans under Clinton, the British under Blair and the Dutch under their purple coalition: dance in the middle in order to slowly shift gears to the right as a highly taxed welfare state simply does not work. But given their unusual geographic and historic conditions the Canadians have - in order to maintain the momentum - to take it one step further and make some drastic decisions in order to stay cool and distinctly Canadian. Relax foreign ownership rules, allow bank mergers, abolish wealth transfer payments, and allow some flexibility in healthcare. All of these are sweeping changes but they are necessary to ensure that the country sustains its newfound spirit and maintains and increases its wealth to stay self-reliant. If it doesn’t it will be relegated to the sidelines and become an impoverished and irrelevant nation.

And that would be a pity for the country has enormous potential, as an example the country’s migration from a resource based to an information driven society is - and I witness that on a daily basis – impressive. The daily influx of motivated immigrants from all over the world as well as the vast untapped natural resources puts the country in a very strong position to play an important role going forward and allows it to avoid the demographic and social pressures that are slowly undermining Europe. And now that the Russians have started to dither, maybe the Canadian government will finally and belatedly junk its commitment to the Kyoto protocol as an unworkable constraint on its economy. If it is able to step up to the plate on defense and security issues and work with the US to build a North American fortress this country could become the envy of the world.

There are days that I go without touching a Canadian newspaper as it very often disrupts my day and my good mood, so negative is some of the reporting on social, economic and political issues here. Negativity in the press breeds negative attitudes and often results in apathy. By branding Canada’s New Spirit as cool The Economist has taken the right approach to assist the Canadians in trying to maintain some of the momentum that has started in the past ten years. In order to preserve it and expand it will have to break with the suffocating dogmatism of the past. A tall order for the incoming Prime-Minister as his party embodies the very Canadian values that need to be changed in order to move forward.

This may be a storm in a glass of water, but I think it is not. The moderate forms of Islam that have been practiced in Indonesia for centuries are increasingly under pressure from fundamentalist schools of thought. If this draft legislation is enacted then Indonesia will have started down the slippery path of becoming a society exclusively governed by Sharia. True, the old Dutch laws needed some upgrading but if Sharia is the alternative then I know what I would prefer.

A monumental filmmaker passed away yesterday, Elia Kazan is dead at 94. His career will for always be tainted by him divulging names for the House Un-American Activities Committee in the 1950s, and I clearly remember how many in the audience during the 1999 Academy Awards refused to stand-up and applaud Kazan when he received the Oscar for Lifetime Achievement. From today’s (and 1999s) vantage point it is very hard to pass judgment onto Kazan’s actions, and I found the way that some Hollywood personalities treated the old master during that ceremony despicable. Martin Scorsese and Robert de Niro deserved praise for the way they supported Kazan during what must have been a difficult ceremony. Kazan in later life questioned the rightness of the decision to disclose names, but felt that at the time it was the correct one. As a former member of the Communist Party of the United States he knew first-hand of the top-down totalitarian practices of communism and he was rightly disgusted by them. That no doubt affected his difficult decision, a decision that haunted him for the rest of his life. His work however will forever stand as testimony to the unique filmmaker he was, irrespective of politics.

Wesley Clark’s announcement to run for the US Presidency unleashed the blogosphere into a quest to determine the man’s character and antics, especially Sullivan has done a great job at revealing the resume and motivations of the former NATO commander. But sometimes you need just one picture to put everything into the right perspective and American Realpolitik kindly shares with us a picture of Clark enjoying a moment of camaraderie with Serb war-criminal Ratko Mladic. There may be ways to exlain this away and many will rush to Wesley Clark's aid with regards to this, but a future Commander-in-Chief he ain't.

I have been thinking a lot over the weekend about Clark but I still fail to see how this man is credible presidential material. Some say he is used as a stalking horse to ensure Dean and Kerry run out of steam so that the field is clear for Hillary to enter the race, others see it as just an exercise in positioning Wes for the VP slot, beefing up the Dean or the Kerry ticket. Given the press coverage Clark has been getting it seems that the latter, while probably the right analysis, is not going to ensure the intended effect of having a "tough on terror former general" assisting in an attack on Bush from the right. Bush is vulnerable – just take a look at this week’s edition of Time – but if anyone thinks that Clark is the man to expose and exploit that vulnerability, they’re wrong. Clark’s unclear record on terror and security issues leaves him as pretty weak material to fight a major election battle with.

Yet, even in light of Clark’s shortcomings I still can not see how Hillary Clinton could jump in and launch a run at the White House. In a way I agree with Kevin Drum, she’s far too divisive a figure to ever become US president (although she could easily lock-up the Democratic nomination), and if Bush would really get into trouble over Iraq and the economy, the Democrats could gamble that some combination from the current field of candidates might do the trick in 2004. But don't count on Wes to lead the charge.

Interesting piece by David Warren over the weekend dealing with Iran. His basic point: the political capital used to invade Iraq, and the depletion of more of that capital to deflect ongoing criticism of the President and his approach to terror and rogue nations, may result in some reluctance to build a similar case that will seek to disarm Iran.

My sense is that neither the Bush administration nor any other has, after the international response before, during and after the invasion of Iraq, any stomach left for serious brinkmanship; and that U.S. domestic politics have also enquagmired President Bush. I am fairly certain that, at least, this is the Iranian (and the North Korean) view.

We may yet find out what’s left of Bush’s stomach, but the nuclear adventures undertaken in Iran should be taken very seriously. Saddam’s weapon development programs pale in comparison to the progress made by the terror masters in Tehran, and the latest reaction from Iranian authorities are further evidence that any form of co-operation or compliance from their side will probably not be forthcoming. Warren is right, they will gamble that the focus on Iraq and US domestic issues has provided them with a unique window to ignore whatever is being required in an international context and continue to build their nuclear capability.

Many believe the Dutch are overly tolerant, but in actual fact the Dutch themselves will interpret that qualification as nothing more than finding pragmatic solutions. When it comes to drugs the Dutch have learned that an all out war on the users is not something that will work, and they have therefore shifted their attention and decided to use the resources of the criminal justice apparatus to take on the producers and distributors of drugs. Not always with a lot of success I have to say, but many think it is better than locking up teenagers and other drug offenders for minor infractions which is often the approach in North America, although that is changing. Given the experiences to date it seems neither the Dutch nor the American approach is yielding any results as both countries continue to struggle with major drug related problems. US drug czar John Walters however is pretty displeased with the way the Dutch are approaching the distribution of ecstasy:

The Dutch insist they have pulled out all the stops against Ecstacy. But Walters' comments reflect U.S. frustration at the continuing flow of synthetic drugs from the Netherlands and Dutch reticence to employ the toughest tactics in the war on drugs.

So there does not appear to be a disagreement on the fundamental approach, but there may be some differences in how to apply specific solutions and in particular how to use force. Maybe the omission of the ‘toughest tactics’ is seen as a form of tolerance.

It has been a hectic week and I have had little time to sit down and write something comprehensive like I normally do. The news for some reason was also not very inspiring but hopefully next week things should be back on track. See you then.

Many businesses target specific demographic groups as a way to increase their business, while at the same time establishing some social credentials. As an example HSBC targets the Chinese community and nobody has ever raised any real concern about it. Least of all I, who after dealing for seven years with financially astute bankers with very poor English speaking skills, was relieved that I could continue this experience in North America without having the discomfort of dealing with obtuse bankers that are fluent in English, and I mean that. Yet, there is some social-demographic targeting that does not always get the seal of approval.

This week an ad-campaign by Canada’s largest credit union that underlines their commitment to service all lifestyles, including gays, drew the ire of the Catholic Church. Now the VanCity credit union may be using the omnipresent debate on gay marriage as a vehicle to promote their services or genuinely believe that they have a role to fulfill in an important debate, the Catholic Church did not miss a beat and instructed all Catholic schools that worked with VanCity on a youth-savings plan to suspend their ties with the credit union. Archbishop Exner reacted as follows:

He accused VanCity of engaging in an "objectionable cause," Exner said the credit union's pro-homosexual advertising campaigns and sponsorships display public support for "agendas which are worrisome and harmful to the church and to society."

That’s nothing new, but I found it discouraging to learn that a highly successful program that lets elementary school children get comfortable with the concept of financial responsibility gets axed just because some clerics are upset over the particulars of one advertising campaign. And I might add, if we want to teach our kids anything in relation to money matters it is financial responsibility through saving, especially in a society where rampant credit card use is taken for granted. On the issue over whether VanCity should target gays I believe they should if they feel it is right. Why not? If part of the idea of gay marriage is giving equal rights and equal protection to same-sex couples then such a campaign is laudable if it is done by an industry that over the years has profusely used the traditional family as the centerpiece of ad campaigns focusing on savings, mortgages and financial security. VanCity most likely knew they were going to stir up a controversy, even in Vancouver, and that they were probably going to lose an amount of business equal to what they maybe would gain. But they somehow thought they were supporting a just cause and rolled the dice. It’s a pity that children bear the brunt but I have no doubt that another shrewd credit union will step into the void.

Bush and Schroeder apparently had a good meeting and it is tempting to contrast the Bush-Schroeder dynamic with the Bush-Chirac interactions. In relation to Iraq a number of things strike me: the first one is that Schroeder probably senses that a huge Muslim population in his own country is something to worry about in the long run, as opposed to Chirac. But he also no doubt has come to the realization that the occupation and rebuilding of Iraq is very similar to the effort that was undertaken in Germany last century. By contributing to this effort under the UN flag Schroeder is not just following a sensible international effort, he is listening to that moral imperative: maybe we Germans should help others the way we were helped almost 60 years ago. Definitely interesting points, but the most compelling argument no doubt is the sheer pragmatism that is driven by the ballot-box, Schroeder’s Social-Democrats are toast if an election were held today and that is a dynamic that Chirac probably does not have to deal with for a while, if ever.

Walking past the newsstand yesterday the following headlines caught my attention:

Globe and Mail: “Bush won’t bend on Iraq”
National Post: “Help me rebuild Iraq: Bush”

The problem is that the Globe and Mail is the dominant newspaper here, propagating Canadian values and left-of-center wisdom. The National Post, despite Conrad Black sadly abandoning the paper and Mark Steyn’s departure, continues to provide a bit of independent thinking in the torrent of politically correct value dispensing that is prevalent here. And hey, they signed on a great blogger as a regular columnist: Colby Cosh.

This week's Carnival is hosted over at Pathetic Earthlings with a great design, and Peaktalk (with a small 't') contributing to the Economy. Go check it out.

Sorry for the light posting over the past two days but I have spent quite a bit of time categorizing all my past entries in order to ensure that all of Peaktalk’s Topics (on the left) are now fully organized and accessible. It is interesting to go through that exercise and note that American Politics, US-Canadian Relations, European Affairs, Hong Kong, Fortuyn, Iraq, Israel and Terror are the areas that received most coverage on this site, underlining my key interests, background, concerns as well as what has dominated the news internationally. Not scoring high in number of entries but ranking high on my personal preference list is Economic Freedom, not only interesting, but there’s still not enough of it in my opinion. With the addition of a Top Referrer section on the left the redesign is now pretty much complete.

My question really is if this slightly revised set-up works, from a reading as well as an aesthetic point of view. I have not had a lot of feedback, but you can always send me an e-mail and let me know what you think. Some have asked me for a comments section, but I prefer the e-mail route, interesting and challenging e-mails always get coverage on the site. So, unless I get an e-mail deluge asking me for comments, I will leave things as they are.

A reader asks to what extent Chirac is vulnerable and if he is not facing any election that would force him to tread a bit more carefully. Chirac served his first term from 1995 to 2002 after which an amendment was enacted that reduced presidential terms in France to five years. I am not sure if there’s a constitutional two-term limit in France, but if there is then Chirac has got another four years to go after which he will probably retire. The one thing on Chirac’s mind is carving out a legacy for himself and he has two unique opportunities in front of him that would ensure that, one being defining France’s role in Europe and the other one positioning France vis-à-vis the United States, formalizing France's role in the world at large. Chirac in other words has entered an important stage of his presidency and it is unlikely that he will be very flexible in dealing with the outside world if that would jeopardize his legacy. It should be noted that Chirac represents the right in France, just imagine what the world would have to put up with if it were a French socialist occupying the Elysee.

The announcement earlier today that Dutch Foreign Minister De Hoop Scheffer will be the new NATO Secretary-General highlights the importance of strengthening the transatlantic links, which is discussed below in “French Europe”. The decision was apparently delayed as France was procrastinating and Canada was seeking to push it own candidate. The unwritten rule however is that NATO’s military leader is an American, and its political leader a European. With a Dutchman in that role we can probably expect a continued pragmatic approach to joint security issues, as opposed to the confrontational ways in which some European nations have recently exercised their transatlantic options.

I guess no one expected any miracles from the Blair-Schroder-Chirac summit, and in an interview with the New York Times today the French President underlines his position for a rapid transfer of power in Iraq by the US to a new Iraqi administration and his inflexibility to come to a swift agreement on Iraq.

The entire blogosphere jumped on the piece of Tom Friedman, also in the NYT, asserting that France is not a rival or an annoying ally, but an enemy that sees itself as an equal to the US. If Friedman is right, and I think he is, then what is even scarier is that the French have not only bullied many in Europe into their delusional vision of a European Union, but that they are undermining the vital security link that exists between the US and Western Europe. With assistance from Germany the French will no doubt push very hard for their agenda and try to intimidate especially the smaller countries by leveraging their strong position in the EU. For now, that force is getting some pushback from the UK (Blair), Spain (Aznar) and Italy (Berlusconi), but the moment that the latter two fail in their next elections and make way for pro-European forces then the British are alone. At that point the Anti-American sentiment in Europe will have the upper hand and it will be in a position to damage the long term security interests of all Europeans, and what is worse, it may undo all the achievements that post World War II Europe has made. No doubt you will remember that prior to the invasion of Iraq, Chirac reacted furiously to some smaller European countries that were willing to support the US, today in the NYT he has not taken back a word of that bullying attitude:

Mr. Chirac defended his outburst last February when he berated Central and Eastern European countries poised to join the European Union for missing an opportunity to "keep quiet" when they signed letters supporting American policy in Iraq before the war. "I don't regret it; I should regret it, but I don't," he said, adding, "You can take your own position if you want to, that's not the problem but at least warn us first so we don't look ridiculous." Such an approach, he said, is "not the way that Europe is made."

And the way Europe is being made is the way France wants it, and beware of taking an independent stance; it could make Chirac look ridiculous. This is episode is textbook lesson in what a unified Europe will unleash onto the free world.

Peaktalk has been upgraded. It all started with coming back on the “Category” issue, and they are now included on the new left sidebar under the title “Peaktalk’s Topics”. Bear with me, I will have to categorize all 380 entries to date and that will take a little while, but once it is done it will be easier for both the readers and myself to navigate the content on this site. The extra sidebar gives me some room to play around with and I think over the next few weeks I will throw in some new features. As usual, I could not have done this without the solid assistance and reliable support from Stacy over at Sekimori.

CalPundit analyses Senator Kennedy’s statement to the press which I also happened to discuss yesterday, and asks the question if the senator knows more about routing funds to foreign leaders, which is what Kennedy accuses the Bush team of. Maybe he does, and if he does he would most certainly not give us the answer as that would immediately undermine the other statement made during that same press conference:

Kennedy told the AP he also was worried the war in Iraq had drawn America's attention away from possible threats from al Qaeda, problems in Afghanistan and North Korea's nuclear program.

So, if Bush is routing funds to other countries to facilitate troop deployments, is that not part of the war on terrorism? Routing funds to the South Koreans, is that not related to what's unfolding in North Korea? The administration continues to spend money on fighting the war against terrorism and rogue nations, and that is probably evidenced by funding activities in Pakistan, Afghanistan, Turkey, Iraq and maybe even Saudi Arabia, to name a few. Maybe the senator will care to acknowledge the numerous arrests that recently have been made in Pakistan, Thailand, Indonesia and Afghanistan. It appears the senator is shooting off weird conspiracy theories, and I will add to that: shooting off theories for effect only.

Last week the Dutch media blew up a storm over the compensation package for the new CEO of troubled retailer Ahold. When economies hit troubled waters the search for culprits is an attractive way to cleanse the general consciousness, and what better way to do that then attack those whose compensation packages are out of the ordinary, or as we would say in Asia back in the 1990s, “unusually wealthy”. In New York this week New York Stock Exchange chairman Richard Grasso was forced out of a job as details of his $140 million package began to make it into the public realm, which was probably even a little too much for the influential chairmen of Goldman Sachs and Merrill Lynch, who assisted in the ouster of Grasso from the NYSE’s board.

Compared to Grasso’s package, Anders Moberg’s (formerly with IKEA and Home Depot) deal with Ahold is peanuts, but if ever there is a country where wealth, success and unrestrained capitalism are frowned upon it is The Netherlands, especially when the economic tide is turning. Check-out workers at Albert Heijn, Ahold’s Dutch retail subsidiary, were harassed over the CEO’s package, a boycott of the stores was called for, and the unions got involved, all of which individually could have been handled by the Ahold board but taken together it was enough for them to sit down with Moberg and calibrate the numbers a bit. Moberg’s package was adjusted and his bonus was more directly linked to certain performance criteria giving the unions and upset shoppers a pyrrhic victory and avoiding a loss of face for Moberg. It may be interesting to note for my American readers that Ahold operates about 1,600 retail outlets along the eastern seaboard in the US; if they operate your local store you can check that here.

What now was the problem? The key was that the new CEO had negotiated an annual pay package of $1.7 million and a guaranteed bonus of $1.7 million annually, as well as an option package and a royal arrangement in case of early dismissal. The guaranteed bonus, it would be better to call it a ‘lock-in payment’, created most of the fury but in order to understand why I need to emphasize that Ahold is in deep trouble following some undisclosed accounting problems which caused the share price to tumble in January this year, and there is a risk that more misery is beneath the surface. If the company does not meet the September 30 deadline to produce audited accounts as required by a syndicate of lending banks there could be real trouble and the survival of Ahold has still not been secured. When the company had reached bottom pit earlier this year the appointment of Moberg brought hope and the share price rebounded sharply. Many argued that given Moberg’s track record in the industry and his relative youth he would have thought very carefully about taking the helm at Ahold and his acceptance of the job was viewed by many as a seal of approval that things were not that bad. And they probably aren’t, the company has always been profitable and continues to generate strong cashflows, accounting scandals can be cleared up and debt can be restructured. What was needed was a sign of confidence and Moberg was the man to bring that to the table. The surge in the stock price would by itself have paid for his package, but very few people will mention that, in fact left, right and center people have gone out of their way to bash Moberg and the supervisory board that appointed him. I haven’t. And I am not exactly a disinterested party as I do have some Ahold stock in my portfolio, but I think that his compensation package is far from outrageous.

First of all the numbers by themselves reflect a market level and are in line with what is paid to other key executives and we have to note that Moberg came from the US. In order to attract him his salary and bonus arrangement needed to be at least comparable to what he was getting at Home Depot. The ones who protest it argue that Ahold could not afford this given its precarious financial situation but nothing is farther from the truth. Ahold is cash rich and was in dire need to find someone to guide it through the drifting waters it had found itself in. It was next to impossible to find executive talent that was willing to take on such a task while at the same time putting their reputation on the line by assuming risks for a situation that was not entirely transparent. The risk-reward equation came into play and by agreeing to Moberg’s demands Ahold not only assured itself of the continued services of a CEO (the lock-in will keep Moberg on his seat for a while), it also sent a phenomenally strong signal to the investment community. Remember, if Ahold’s balance sheet has very serious holes, Ahold will have to tap the equity markets and what would existing shareholders have preferred, to raise it at $3 pre-Moberg or $10 post-Moberg’s appointment?

Simple economics are often lost in the emotion of decimated share portfolios and forced redundancies. The media are all too willing to up the ante and unions are just waiting for stuff like this to reclaim some of the territory they have lost during the 1990s. The net result is that such pressure could have seriously endangered the willingness of some individuals to put their necks on the lines and turn-around and save a troubled conglomerate, its shareholders, its employees. We can argue forever over the numbers, and yes the performance component should be substantial, but on balance as a shareholder I would say, let’s take a chance on Moberg and accept the package he has negotiated.

If the Democrats are serious about unseating Bush next year they will have to ensure that they will be making some inroads in the red states of the American heartland, I pointed out earlier this week that positioning Wesley Clark probably has something to do with that. Today’s comments by Ted Kennedy about the Iraq war being a fraud that was made up in Texas defy belief. It will only strengthen the notion that America’s security is in better hands with the Bush team and it will no doubt help rally the Texans in an even stronger fashion behind the President, a sentiment that will probably be replicated in other red states. Massachusetts bred arrogance does not go down well in the rest of America, here’s more from the senator:

Kennedy told the AP he also was worried the war in Iraq had drawn America's attention away from possible threats from al Qaeda, problems in Afghanistan and North Korea's nuclear program. "I think all of those pose a threat to the security of the people of Massachusetts much more than the threat from Iraq. Terror has been put on the sidelines for the last 12 months," Kennedy said.

So it is the security of the people of Massachusetts that's at stake? Whatever national platform the Democrats are trying to build for America’s security, Ted Kennedy can be counted on to destroy it. Even Democratic elder statesman Ed Koch underlined the importance of security last week by stating his support for the way Bush has handled things so far. At the same time Koch pointed out that Senator Kennedy’s predictions about Iraq had failed to materialize:

"Nobody wants [to see U.S.] casualties. But the fact that they were as minimal as this was miraculous," he contended, especially "when you had all the people like Kennedy predicting thousands of body bags." Then, broadening his criticism to include other anti-war Democrats, Koch complained, "It's an outrage that they conduct themselves the way they are."

If you will read my post below about how a ruling party has taken advantage of disarray among the opposition in Canada then it is not hard to see that serious divisions in the Democratic Party will most likely ensure another four years of Bush at the helm. With national security and the global war on terror being the issue that is a comforting thought.

For those of you who have missed it, Canada is slowly preparing itself for a new political era as the ruling party prepares to anoint Chrétien’s successor Paul Martin in the next few months. There are few democratic entities in the world where the changing of the guard takes such a long time, but those are the terms under which Chrétien agreed to make way for his longtime rival. I have been very skeptical of Martin, but for some reason he has captivated the majority of Liberal Party members, and thus the majority of the Canadian electorate. As Finance Minister he became the darling of the business elites and he thus ensured that the left-of-center Liberals could count on substantial support of corporate Canada, and when he cut taxes he became the instant hero of the middle classes. The fact of the matter though is that he hardly can be considered a reformer whose mission it was to break with Canada’s disastrous tax-and-spend tradition, but then he was part of the Chrétien team. So to be fair, while remaining unconvinced let’s give him the benefit of the doubt for now, but it was not until yesterday that he was willing to reveal anything, and I mean anything, about his platform. The term for that is dancing in the middle and that’s why I failed to see why so many people got excited about the man, it has not been clear at all what he stands for.

Yesterday he revealed that he, without giving any specific details, would continue to cut taxes and keep spending under control in order to cut the national debt. Both the left and right reacted upset about these comments, but if someone in the middle is seriously talking about tax cuts and spending cuts then this country is moving in the right direction. It would seem that putting the knife in spending and paying down the debt makes him more of a conservative than Bush. There are two reasons why Martin needs to stay right-of-the centre. Firstly, the US has significantly cut taxes and that has added (let’s ignore the increasing deficits for a bit) to America’s competitiveness as well as to the wealth of the middle classes. Maintaining a high tax level in Canada’s is seriously counterproductive as it not affects growth prospects, it also has contributed in the past to many Canadians packing up their bags and moving south. Martin is not unaware of this and to the extent he is not, his corporate backers will have made it clear that an economy Trudeau-Chrétien style is no longer sustainable. The other reason is that the only electoral threat to the Liberals comes from the right. To date the right has been hopelessly disorganized (there are two right of centre parties, the Conservatives or 'Tories' and the Canadian Alliance) and the resulting vote splitting has resulted in some very easy victories for the Liberals. But that does not imply there’s no conservative force to speak of in Canada, there is. The moment they get organized they will start to affect the Liberal hold on the political process. Martin knows this and he knows that his dance in the middle needs to take account of the noise coming from the right. Let’s see if he’s really listening.

Wizbang is explaining how to best position your blog for an Instalanche, trying to see if there are any hard and fast rules that can help others getting huge instant traffic volumes. The Professor responds and clarifies the matter in very simple terms, although the concept of “the flow” was new to me. I have been Instalanched twice and am on Glenn’s blogroll, but in between the first avalanche and the second one there were quite a few e-mails from my side that were either unread or did not fit into the flow. Now that we have a better sense of how Glenn links maybe someone can tell me how, after various e-mails, links and generous contributions to his pledge weeks, I can get Andrew to finally get my counter going with a Sullivanche?

Without being too articulate about it, this piece which I posted on May 1 hinted at what is now being branded the Flytrap Strategy by Andrew Sullivan. The idea behind it is that by bringing the war to Iraq, we would attract terrorists to that country who would consider this the ideal battleground to take on the Great Satan. Terrorists flocking into Iraq like ants to a pot of honey required some expert terror management skills on the ground which is why a counter-terrorism expert was asked to head up the interim administration in Baghdad, and Paul Bremer is indeed someone who seemed to have the right qualifications for that. We may question his ability to put Saddam’s civil works department back in order but that is not his primary assignment, there are other people to handle that.

By staying in Iraq to help rebuild it we would achieve two key things: (1) stabilize and turn Iraq into a beacon of hope in the Middle East; (2) take on the Islamofascists and other armed radicals on home territory and deliver a crushing blow to their capabilities. The plan is ambitious but on the face of it, it makes sense and Mark Steyn supports the notion that the strategy could induce not just terrorists to flock to Iraq:

Here’s another interesting fact: in Syria, Boy Assad, head of the sole surviving Baathist regime, recently announced that his country would no longer be a one-party state. Apparently, he was worried that much of the business class would up sticks and move across the border to Iraq. It seems the place isn’t a magnet just for terrorists.

Good, defeat terrorists and bring in investors, but despite all the enthusiasm and Eureka-type behaviour over the Flytrap strategy there are a number of serious downsides that should be given some amplification. Firstly, taking the war to the land of two rivers does not guarantee that all other likely targets around the world are exempt from attack. On the contrary, whatever is left of al-Qaeda will regroup and try to hit there where its enemy is weakest and that is not in Iraq which is now swarming with US and coalition forces. Coalition presence will flush out some very undesirable enemies, but it will not end the risk everywhere else, remember this conflict is and remains asymmetrical. That brings me to my second point. If asymmetrical tactics do not work than it can be inferred that the enemy will almost automatically seek an additional territory where it can surprise the world while at the same advancing its agenda to create mayhem as a prelude to establish a Muslim caliphate. Neighboring Saudi Arabia is a much likelier battleground and terrorists can move freely there as they enjoy a measure of institutional (and that includes clerical) as well as popular support in a country that is under serious economic and demographic pressures. Crown Prince Abdullah’s efforts to help the US signal that the country’s rulers are far from comfortable with the risks that are currently manifesting themselves to the Saudi rulers. The changes in Iraq could lead to a push for democracy in Saudi Arabia, but it could equally result in a Muslim fundamentalist uprising and given the presence and infrastructure at al-Qaeda’s disposal and the nature of distress among the masses the latter is far likelier. The third comment I would make is that the Flytrap requires significant resources for an undetermined period of time. This is an obvious one but I add it for completeness sake.

The analogy with post-war Germany has been argued before on these pages, and in Germany the US was able to establish a flourishing and wealthy democracy on the ruins of what once was a totalitarian state. The US is still there today. The US and its coalition partners have taken the right direction by liberating Iraq and trying to establish a prospering nation, but the totalitarian force has not been defeated. On the contrary, that force has just started its attempts to destabilize the world in order to use the vacuum to gain power. If the Islamofascists are the Nazis, it’s only 1925 when a beaten and bruised Adolf Hitler had to rethink his strategy knowing that the discontent on which he would build his empire was right there to mobilize. Flytrap or not, we have only just started.

Retired General Wesley Clark has launched his bid for the presidential nomination today. It is an interesting move, but it does not seem that Clark is really presidential material, just yet. We have seen little of him outside his comfort zone of military and foreign affairs, and he does not have the broad appeal that Colin Powell had when he retired from the military. And his exploits in Kosovo will not appeal to the American public at large, they’re just on a different level, it’s not Desert Storm. You need to have some of that magnitude to capture the public’s imagination; think of Eisenhower, his military career put him in an excellent position to capture the White House. Clark’s move could be part of a broader realization among Democrats that they need to beef up the current field of candidates with someone that can play the national security card convincingly. And: although Clark’s born in Chicago he will be launched as a Southerner in the race and so far the Democrats have not found a Southern magnet, Edwards and Graham are hardly registering on the radar screen these days.

Clark will run for as long as he is able to do so financially, but he is being positioned as a running mate for the two Northeastern front-runners who are just too liberal and have too little cloud outside their geographical areas to have a real chance at momentum during 2004. Clark is bright enough to have figured this out, he would no doubt see a presidential nomination as a phenomenal and unexpected bonus. If he gets the slot on either the Dean or Kerry ticket he will be happy enough, and the Democrats will be able to put forward a reasonably credible ticket to challenge Bush.

I have received quite a few e-mails from US readers in the past that complained that Peaktalk’s mountain slowed the download for those on dial-in, and today Outside the Beltway alerts us to some interesting broadband numbers, noting that the US is not a world-leader in this field with a majority still using dial-in for internet usage. This is not entirely new but it is interesting that Hong Kong and Canada, two countries that could not be more different geographically, politically and economically are the respective numbers two and three in terms of broadband penetration. South Korea is leading the pack. I know that in Canada the government has been highly supportive of supporting broadband proliferation, but the implementation is largely executed by privately owned telcos and cablecos. Same for Hong Kong, although the city-state’s geographical lay-out probably has some definite advantages.

The low penetration rates of broadband have had a significant impact on content distribution and in the late 1990s many believed that video, DVD and game rental stores would disappear and be replaced by online distribution. They will eventually, but slow penetration of broadband is one of the factors that have delayed this distribution revolution. Stock market valuations for content plays were out-of-whack during the final stages of the technology boom, but for those who dare there are some very interesting opportunities with very low valuations to be had today. With steady broadband proliferation we are still on our way to a world in which all entertainment will one day be pumped into residential homes via broadband connections.

Today the Carnival of the Vanities celebrates its one-year anniversary and is appropriately hosted by its creator, Bigwig over at Silflay Hraka. As always: go over there and have a look at this week's goodies.

Looking around the blogosphere for a comprehensive round-up of the latest in California’s recall I came across Calblog and its BLAP, or, Blogosphere Loosely Applied Practices, which is an attempt to put together a code of conduct for bloggers I guess. Great initiative as it is not always clear what is acceptable behaviour among bloggers and what is not, and today for instance Calblog clarifies that there’s no issue with promoting your blog in others’ comments section. Good to know, but I do not plan to jump on that and start promoting Peaktalk, I rarely leave comments but from time to time I leave a trackback in order to react or link to something that is relevant to a particular topic being discussed here. The trackback has definitely some promotional value as I have discovered that readers will use it to check on what another blog is saying about that topic and in that manner quite a few newcomers have found this site. No doubt some Calblog readers will visit now following my trackback ping to “Blap Revisited”. To them I say: welcome, hope you like it and will return from time to time.

Evidence of the spell of bad weather that Europe’s economies have now entered today came from the Netherlands where the government revealed its plans for further spending cuts and raising taxes. The Dutch finance minister acknowledged that the country had gone from a miracle to a source of concern. The centre-right coalition is taking the necessary steps to ensure that government finances remain in control in order to, as opposed to the French and the Germans, adhere to the Euro’s stability and growth pact. The generous Dutch welfare state is being reformed gradually to reflect the new economic realities, but also to support a rapidly ageing population. In order to address the rising cost of healthcare the Dutch have taken the route of pragmatic solutions:

Patients will pay more for healthcare to prune rising costs, with the revenue used to reduce waiting lists. A standard insurance scheme will be introduced, run by competing private health insurance companies.

Now there’s a way to effectively use the private sector to help manage and reduce public sector problems. Nevertheless, the Dutch will be up for a long and difficult winter and the unions may abandon their compliant status and revert to the militancy of old.

Growing up in The Netherlands the NRC Handelsblad was the newspaper of choice for the more analytical right-of-centre minded, and the paper to some extent was comparable to The Times in Britain. As an evening newspaper it was the focal point of news gathering and discussion in our family, and as a teenager I was a delivery boy for a while bringing the paper around the suburbs of my hometown. Long after leaving The Netherlands I still read it: in Hong Kong I got a mailed edition focused on Dutch living abroad and these days I read it online. Yet, by today’s standards the paper has migrated to the left and has become very skeptical of America and its foreign policy and has taken a clear pro-European stance. These days I would rather compare it to The Independent than to The Times, but it’s still quite interesting to check in on them and I found yesterday’s editorial on Sweden’s rejection of the Euro worthy of note. Here’s an excerpt, just translated:

If economic uncertainty would have been compensated by clarity and unity on the political and economical front in Brussels, if Europe could convincingly show for what it stands even in less favorable times, then the Swedish no-voters would have had a harder time. But no one can argue that today there is something like a unified and forceful Europe. The pitiful performance with regards to the Euro’s Stability Pact, the latter intended to act as a mechanism to ensure the Euro’s value will not have escaped the Swedes. The political battles within Europe about Iraq and the divided attitude of the EU’s members with regards to America will also not have solidified trust in Brussels.

Their assessment is right but the underlying rationale for their argument is not. They argue that a more forceful and unified European front would have put the Euro in a favorable light in Sweden and maybe that would have increased the chances of a “yes” vote. They think that the European institutions should get their act together in order to ensure a “buy-in” of the public at large as they continue to believe that a strong and unified Europe is for the general good. The argument should be reversed, as the public at large is reacting to what they see as a very questionable experiment and serious doubts have been raised about the experiment’s feasibility. We have been through a stage of unity and forcefulness, resulting in the adoption of the Euro in most European countries which in many cases was achieved without any direct democratic consultation. The divisions over foreign policy, the most recent example being Iraq, are not new. The Europeans for instance grossly mismanaged the civil war in the former Yugoslavia and it were the Americans that in the end neutralized and stabilized the conflicts in both Bosnia and Kosovo.

The European Union has failed during a number of crises, the introduction of the Euro has hardly been a success and Europeans are beginning to question the validity of transferring sovereign power to an entity in times of serious economic and political uncertainty. While a more unified stance probably could sway some skeptics, recent events have sowed doubt among many about the very feasibility of a forceful and unified Europe. Unity and force are not a panacea, on the contrary.

John Hawkins continues to find creative ways to attract traffic to his Right Wing News and today he interviews Nobel laureate Milton Friedman. Two things stand out in the interview, the first one that Milton Friedman debunks the notion that Clinton's policies were instrumental in establishing the platform for economic growth during the 1990s, a point that I have made very often with those that have an unfavorable view of Ronald Reagan as I strongly believe that fiscal decisions taken during the Reagan years were essentially the foundation on which the growth years of the 1990s were built. Friedman acknowledges that, but he also says that the Clinton years benefited from this phenomenon:

“ … and indication of the virtues of a President of one party and a House and Senate of the other. That's best combination for economic growth … the Clinton administration, in terms of the budget, has one of the best records of holding down spending. Spending went up less under Clinton than almost any other President “

Interesting. If that’s indeed the case then what we are seeing today in terms of unrestrained spending could well mean a cap on economic growth going forward. Here’s the other thing that struck me:

"I'd like to promote lots of things. I'd like to promote elimination of drug prohibition. I think that our policy with respect to drugs is fundamentally immoral and it's really disgraceful that we cause thousands of deaths in South America because we cannot enforce our own laws"

There’s a refreshing thought coming from someone on the right. Milton Friedman fits right into what we would call the conservative-libertarian school of thought and I believe that his views on drugs warrant further examination.

Update: If you want to balance your diet, go over to CalPundit who runs an intreresting interview with Paul Krugman.

The 9th Circuit Court of Appeals yesterday blocked and thus delayed the California recall as a result of a suit initiated by the ACLU arguing that voting machines in all precincts required to be upgraded. I reported on this in mid-August but felt at the time that this was a somewhat frivolous suit, but my view was that it definitely added some extra spice to an already highly charged recall process. Well, it looks like we’re in for another visit to the US Supreme Court as the man who initiated the recall effort in the first place, Darrel Issa, is more than a little upset and is preparing for an appeal. He also claims that the appeals court is disenfranchising the people of California:

Gray Davis all along, and Bustamante, have tried to prevent the will of the people. Huge amounts, more than 25 percent of the electorate, have signed saying they want an election.

The recall effort in itself, as I have argued before on these pages, is a basically flawed process that undermines the democratic process and the legitimacy of ballot-box political mandates and Mr. Issa’s numbers seem to underline that. It is however disappointing that a lawsuit with somewhat questionable legal grounds now derails an effort that would best have been derailed by the Californian electorate itself by keeping Gray Davis in place, no matter how much he may deserve to be booted out of Sacramento. But then, we may still go to the ballot box on October 7 but the plot thickens as a result of this suit that turned out to be far from frivolous.

As an aside, I wonder to what extent the ACLU has a valid case. Is it not the primary responsibility of the various precincts to ensure that they have state-of-the-art voting equipment, especially following the disastrous recount in Florida, now three years ago? A strong argument can be made that some precincts may delay upgrading voting equipment if they fear that an upcoming vote on a certain date may have an adverse outcome in their opinion. How’s that for rigging the vote and undermining the democratic process?

It seems I am beating the credit card companies at their own game. For a little while now they have been increasing my credit limit and this month they have even offered me to forego the monthly required minimum payment. The reason for this is simple. Irene and I use both our personal and business credit cards as a finance deferment tool and not as a tool to finance things we can’t afford and we therefore always pay the entire balance on the due date. The net benefit is that if you time your purchases correctly, you end up owning stuff for free for a little while and I personally do get some satisfaction out of using a new laptop for 7 weeks without having paid for it. Not everyone is gifted to use credit cards in this manner, but if you have some discipline they are unusually effective tools to defer payment without incurring interest payments. The credit card company caught on to that and they figured out that they are not making any money on us, and they are now testing us with increasing our limits, which is what we do not want and do not need. There are people who do, only last weekend weekend I met a couple that had leveraged itself to the hilt in order to build up a portfolio of revenue generating properties, but when they were not able to make the downpayment of the purchase price of a new property they simply put the $20,000 on their credit card. Now there’s the kind of client credit card companies love.

Update: A reader informs me that credit card companies do make money per transaction even on calculating clients like myself, but there is some break-even point.