Finland is currently facing one of the most difficult government formation talks in decades and the greatest issue on the table is the EU bailout of Portugal. Majority of the current Parliament wouldn't accept the package in its current from. Of the three parties slated to form the government only the national coalition(Kokoomus) is in favor of the package while the Social Democrats and True Finns are against the package. Its a difficult and complex issue to resolve, if not even impossible.
At the core the issue is pretty simple, for the past few years the Portuguese governments have been spending more money than they had and to plug the deficit they borrowed from investors around to the world money. The global financial crisis not only rocked the Portuguese economy, making the deficit even larger and making repaying the loans difficult, but also made the debt markets more wary of investing in at risk economies making borrowing even more difficult. Now Portugal is in a situation where it has a massive budget deficit, ailing economy and no money the repay the existing loans.
The EU package is meant to take some of the burden of the Portuguese by borrowing money at cheap interest rates to it and by guaranteeing its loans to the investors, this means that if Portugal can't meet its obligations someone else will pick up the bill. Another logical way out of this mess is for Portugal to cut its deficit. This option however is politically intolerable, since the cut backs would have a devastating effect on the welfare system, that is now needed more than ever in the ailing Portuguese economy. The human cost of the cut backs would be high as poverty amongst the portuguese would without a doubt increase.
Another aspect of the crisis is investors responsibility. For financial markets to work properly investors who make stupid investments need to penalized. Constant bailouts would encourage investors to make high risk high return investments with impunity. It would effectively privatize good investments and socialize the losses. This is not how a free market economy should work, if you make risky investments you reap the losses as well as the profits.
But again this to simplifying a complex issue. It is good to remember who the much maligned investors actually are. They are not some cabal of rich white guys living in luxury mansions, they are ultimately you and me. The largest investors in the world are various pension, social security and insurance funds. Funds which provide vital services to our society. It might that your pension money has been borrowed to the Portuguese Government. Losses would hurt these funds that are so vital to our welfare.
The other much maligned institution in this mess is the bank. Banks have been borrowing money to the portuguese as well and again the ones who suffer is not the cabal of rich white guys, but you and me. A large chunk of the money that the banks lend to others come from deposits made by the public, meaning that it is your money that is on the line. More critically banks provide the critical financial infrastructure that keeps our economies together. I have seen first hand what happens when that financial infrastructure is momentarily shaken and it wasn't pretty. Imagine what would happen if your credit card no longer worked and your internet bank would be there either. You would be pretty much fucked. Therefor we cannot just let the banks collapse at will because the effect on our society would be simply but devastating.
My solution to this monumental problem would be to construct a massive CDS(a Credit Default Swap for those who don't speak finance), where the EU would guarantee Portugal's loans against a fee that would correlate the default risk. The fee would be collected from the investors who wish to secure themselves against default. The fee money could be used to help the people of Portugal, by investing it in to the Portuguese economy. The condition for this could be that Portugal makes an effort to cut spending and reduce the deficit.
perjantai 6. toukokuuta 2011
Libyans - Do we really want to help them?
The world's response to the Libya conflict has been inadequate at best and laughable at the worst. We have a real chance of getting rid off one tyrant and for the most part we are sitting on our hands. Everyone seems to agree that Gaddafi is a bad guy and needs to be removed but no one is really willing to do anything about.
The current effort in Libya is being limited to air strikes against Gaddafi's forces and various economic sanctions including an arms embargo. The first effort seems to be by and large used as a live fire training exercise for those air forces of the world that don't get to see action that often, like the Swedish Air Force which I believe is currently flying some of its first combat flights ever. This is helpful to the rebels in the sense that it makes harder for Gaddafi's forces to operate offensively, but it doesn't really help the rebels in taking Gaddafi's positions either.
In this age of high technology it is easy to focus on all the cool technical gadgets that for the most part are used by the air forces of the world and forget the fact that so far air power hasn't won a single war yet and taht in the end the ones who do put an end to a war are always infantrymen. The Second World War didn't end when the RAF bombed Berlin to ruins, but it sure as hell did when the foot soldiers of the Red Army put their flag over the Reichstag. Vietnam war is the ultimate example of the futility of bombing, more bombs were dropped on Vietnam than on Germany and Japan combined during WWII and still the Americans lost.
If we want to really help the rebels, we have two options, either send ground troops ourself to crush Gaddafi or help the rebels to become an effective fighting force in themselves. The first option requires us to think long and hard is getting rid of Gaddafi worth the blood, sweat and tears that a ground war eventually brings. Make no mistake in spite of all the technology we have fighting for the infantry man is as brutal as it ever was. Executing this option shouldn't be too hard. We have the EU Battlegroups that were, if I recall correctly, established to deal with stuff like this. But it seams that now that the moment has come to send our boys to fight and die, we hesitate.
The second option would be to send far limited number of people to train, equip and organize the rebels into more effective fighting units. This would require us to break the arms embargo that we have established and finding people to co-operate with amongst the rebels, because we sure as won't want to train some wannabe-Osama. This again might be more difficult than we think.
But whatever we do, we must deliberate the options carefully, make the decision that we think is the best and then see the thing through. If we want a ground war, then we must accept the fact that there will be body bags coming back from there. If we don't want a ground war we have to find alternative means to help rebels, if we even want to help them in the first place. But this sort willy nilly, lets try to eat the cake and save it at the same time mentality is not going to resolve this conflict, it will only prolong it. Unless Gaddafi is hit by a bomb, the current strategy of aerial bombing is only going to maintain the status quo, it will make Gaddafi too weak to crush the rebels, but not weak enough to be crushed by the rebels, making it impossible for either side to win.
The current effort in Libya is being limited to air strikes against Gaddafi's forces and various economic sanctions including an arms embargo. The first effort seems to be by and large used as a live fire training exercise for those air forces of the world that don't get to see action that often, like the Swedish Air Force which I believe is currently flying some of its first combat flights ever. This is helpful to the rebels in the sense that it makes harder for Gaddafi's forces to operate offensively, but it doesn't really help the rebels in taking Gaddafi's positions either.
In this age of high technology it is easy to focus on all the cool technical gadgets that for the most part are used by the air forces of the world and forget the fact that so far air power hasn't won a single war yet and taht in the end the ones who do put an end to a war are always infantrymen. The Second World War didn't end when the RAF bombed Berlin to ruins, but it sure as hell did when the foot soldiers of the Red Army put their flag over the Reichstag. Vietnam war is the ultimate example of the futility of bombing, more bombs were dropped on Vietnam than on Germany and Japan combined during WWII and still the Americans lost.
If we want to really help the rebels, we have two options, either send ground troops ourself to crush Gaddafi or help the rebels to become an effective fighting force in themselves. The first option requires us to think long and hard is getting rid of Gaddafi worth the blood, sweat and tears that a ground war eventually brings. Make no mistake in spite of all the technology we have fighting for the infantry man is as brutal as it ever was. Executing this option shouldn't be too hard. We have the EU Battlegroups that were, if I recall correctly, established to deal with stuff like this. But it seams that now that the moment has come to send our boys to fight and die, we hesitate.
The second option would be to send far limited number of people to train, equip and organize the rebels into more effective fighting units. This would require us to break the arms embargo that we have established and finding people to co-operate with amongst the rebels, because we sure as won't want to train some wannabe-Osama. This again might be more difficult than we think.
But whatever we do, we must deliberate the options carefully, make the decision that we think is the best and then see the thing through. If we want a ground war, then we must accept the fact that there will be body bags coming back from there. If we don't want a ground war we have to find alternative means to help rebels, if we even want to help them in the first place. But this sort willy nilly, lets try to eat the cake and save it at the same time mentality is not going to resolve this conflict, it will only prolong it. Unless Gaddafi is hit by a bomb, the current strategy of aerial bombing is only going to maintain the status quo, it will make Gaddafi too weak to crush the rebels, but not weak enough to be crushed by the rebels, making it impossible for either side to win.
tiistai 3. toukokuuta 2011
Of humans and ideas
Now that Osama Bin Laden is dead what has really changed? Not much I suspect, because behind al-Qaida there is more than just a bogeyman with a long beard and turban, who occasionally speaks to the world through Al-Jazeera, behind al-Qaida is an idea and ideas are bullet and bomb proof.
The War on Terror is a War of Ideas and the battlefield is the soul of human kind. War on Terror won't be won with bullets or bombs, since as said before ideas are bullet and bomb proof, it will be over only when the people involved see the true horror behind absolute ideas. The horror that comes when someone who, thinks differently, dresses differently, believes differently, speaks a different language, then you do is made into an enemy, that can be killed, maimed, butchered at will solely because they are different. That is the fundamental difference between militant islamists like al-Qaida and the western ideas of humanity and freedom. In the West we live in a society that is based on the idea that the differences which we have are valuable to the wellbeing of the society, while in militant islam dissent from the official rules carry the penalty of death.
Terrorism in its essence is not designed to defeat you, but to get reaction out of you. The reactions to 9/11 were mostly counter-productive to the war of ideas. Abu Ghraib, renditions and Guantanamo are the most obvious violations of what the west has stood for so many years. We suffered a catastrophic defeat with all of these. Al-Qaida won because we flinched, we gave up some of our most treasured ideals, such as due process, right to a fair trial, bans on torture and inhuman treatment of prisoners. This year marks the tenth anniversary of the War on Terror, this means that some of the prisoners in Guantanamo have been imprisoned for ten years without being convicted of a crime. The fundamental pillar of our legal system is that you have to commit a crime and be found guilty of it in a fair and open trial before you are imprisoned. We take a giant leap forward in the war of ideas on the day that suspects of terrorism are no longer sent to rot in some military base, but brought into trial in open court like any other criminal would.
Living up to the ideals of the West is not easy. You have to tolerate things that you find offensive. You have to live knowing that some day someone will take advantage of the fact that the police doesn't arbitrarily strip search people one the streets to harm you. That is the price of freedom. On the day that our governments find it more important to stand up to the ideals that our societies are built than to provide security, that is the day when al-Qaida will never win the war of ideas. We will on the day when you can walk proudly on the streets, thinking what you will, speaking what you want to say, believing what you want to believe, wearing the clothes of your own choosing regardless of what some extremist might do to you. It is up to you and no one else.
The War on Terror is a War of Ideas and the battlefield is the soul of human kind. War on Terror won't be won with bullets or bombs, since as said before ideas are bullet and bomb proof, it will be over only when the people involved see the true horror behind absolute ideas. The horror that comes when someone who, thinks differently, dresses differently, believes differently, speaks a different language, then you do is made into an enemy, that can be killed, maimed, butchered at will solely because they are different. That is the fundamental difference between militant islamists like al-Qaida and the western ideas of humanity and freedom. In the West we live in a society that is based on the idea that the differences which we have are valuable to the wellbeing of the society, while in militant islam dissent from the official rules carry the penalty of death.
Terrorism in its essence is not designed to defeat you, but to get reaction out of you. The reactions to 9/11 were mostly counter-productive to the war of ideas. Abu Ghraib, renditions and Guantanamo are the most obvious violations of what the west has stood for so many years. We suffered a catastrophic defeat with all of these. Al-Qaida won because we flinched, we gave up some of our most treasured ideals, such as due process, right to a fair trial, bans on torture and inhuman treatment of prisoners. This year marks the tenth anniversary of the War on Terror, this means that some of the prisoners in Guantanamo have been imprisoned for ten years without being convicted of a crime. The fundamental pillar of our legal system is that you have to commit a crime and be found guilty of it in a fair and open trial before you are imprisoned. We take a giant leap forward in the war of ideas on the day that suspects of terrorism are no longer sent to rot in some military base, but brought into trial in open court like any other criminal would.
Living up to the ideals of the West is not easy. You have to tolerate things that you find offensive. You have to live knowing that some day someone will take advantage of the fact that the police doesn't arbitrarily strip search people one the streets to harm you. That is the price of freedom. On the day that our governments find it more important to stand up to the ideals that our societies are built than to provide security, that is the day when al-Qaida will never win the war of ideas. We will on the day when you can walk proudly on the streets, thinking what you will, speaking what you want to say, believing what you want to believe, wearing the clothes of your own choosing regardless of what some extremist might do to you. It is up to you and no one else.
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