By WILLIAM J. BROAD, JOHN MARKOFF and DAVID E. SANGER
This article is by William J. Broad, John Markoff and David E. Sanger.
The Dimona complex in the Negev desert is famous as the heavily guarded heart of Israel’s never-acknowledged nuclear arms program, where neat rows of factories make atomic fuel for the arsenal.
Over the past two years, according to intelligence and military experts familiar with its operations, Dimona has taken on a new, equally secret role — as a critical testing ground in a joint American and Israeli effort to undermine Iran’s efforts to make a bomb of its own.
Behind Dimona’s barbed wire, the experts say, Israel has spun nuclear centrifuges virtually identical to Iran’s at Natanz, where Iranian scientists are struggling to enrich uranium. They say Dimona tested the effectiveness of the Stuxnet computer worm, a destructive program that appears to have wiped out roughly a fifth of Iran’s nuclear centrifuges and helped delay, though not destroy, Tehran’s ability to make its first nuclear arms.
“To check out the worm, you have to know the machines,” said an American expert on nuclear intelligence. “The reason the worm has been effective is that the Israelis tried it out.”
Though American and Israeli officials refuse to talk publicly about what goes on at Dimona, the operations there, as well as related efforts in the United States, are among the newest and strongest clues suggesting that the virus was designed as an American-Israeli project to sabotage the Iranian program.
In recent days, the retiring chief of Israel’s Mossad intelligence agency, Meir Dagan, and Secretary of State Hillary Rodham Clinton separately announced that they believed Iran’s efforts had been set back by several years. Mrs. Clinton cited American-led sanctions, which have hurt Iran’s ability to buy components and do business around the world.
The gruff Mr. Dagan, whose organization has been accused by Iran of being behind the deaths of several Iranian scientists, told the Israeli Knesset in recent days that Iran had run into technological difficulties that could delay a bomb until 2015. That represented a sharp reversal from Israel’s long-held argument that Iran was on the cusp of success.
The biggest single factor in putting time on the nuclear clock appears to be Stuxnet, the most sophisticated cyberweapon ever deployed.
In interviews over the past three months in the United States and Europe, experts who have picked apart the computer worm describe it as far more complex — and ingenious — than anything they had imagined when it began circulating around the world, unexplained, in mid-2009.
Many mysteries remain, chief among them, exactly who constructed a computer worm that appears to have several authors on several continents. But the digital trail is littered with intriguing bits of evidence.
In early 2008 the German company Siemens cooperated with one of the United States’ premier national laboratories, in Idaho, to identify the vulnerabilities of computer controllers that the company sells to operate industrial machinery around the world — and that American intelligence agencies have identified as key equipment in Iran’s enrichment facilities.
Seimens says that program was part of routine efforts to secure its products against cyberattacks. Nonetheless, it gave the Idaho National Laboratory — which is part of the Energy Department, responsible for America’s nuclear arms — the chance to identify well-hidden holes in the Siemens systems that were exploited the next year by Stuxnet.
The worm itself now appears to have included two major components. One was designed to send Iran’s nuclear centrifuges spinning wildly out of control. Another seems right out of the movies: The computer program also secretly recorded what normal operations at the nuclear plant looked like, then played those readings back to plant operators, like a pre-recorded security tape in a bank heist, so that it would appear that everything was operating normally while the centrifuges were actually tearing themselves apart.
The attacks were not fully successful: Some parts of Iran’s operations ground to a halt, while others survived, according to the reports of international nuclear inspectors. Nor is it clear the attacks are over: Some experts who have examined the code believe it contains the seeds for yet more versions and assaults.
“It’s like a playbook,” said Ralph Langner, an independent computer security expert in Hamburg, Germany, who was among the first to decode Stuxnet. “Anyone who looks at it carefully can build something like it.” Mr. Langner is among the experts who expressed fear that the attack had legitimized a new form of industrial warfare, one to which the United States is also highly vulnerable.
Officially, neither American nor Israeli officials will even utter the name of the malicious computer program, much less describe any role in designing it.
But Israeli officials grin widely when asked about its effects. Mr. Obama’s chief strategist for combating weapons of mass destruction, Gary Samore, sidestepped a Stuxnet question at a recent conference about Iran, but added with a smile: “I’m glad to hear they are having troubles with their centrifuge machines, and the U.S. and its allies are doing everything we can to make it more complicated.”
In recent days, American officials who spoke on the condition of anonymity have said in interviews that they believe Iran’s setbacks have been underreported. That may explain why Mrs. Clinton provided her public assessment while traveling in the Middle East last week.
By the accounts of a number of computer scientists, nuclear enrichment experts and former officials, the covert race to create Stuxnet was a joint project between the Americans and the Israelis, with some help, knowing or unknowing, from the Germans and the British.
The project’s political origins can be found in the last months of the Bush administration. In January 2009, The New York Times reported that Mr. Bush authorized a covert program to undermine the electrical and computer systems around Natanz, Iran’s major enrichment center. President Obama, first briefed on the program even before taking office, sped it up, according to officials familiar with the administration’s Iran strategy. So did the Israelis, other officials said. Israel has long been seeking a way to cripple Iran’s capability without triggering the opprobrium, or the war, that might follow an overt military strike of the kind they conducted against nuclear facilities in Iraq in 1981 and Syria in 2007.
Two years ago, when Israel still thought its only solution was a military one and approached Mr. Bush for the bunker-busting bombs and other equipment it believed it would need for an air attack, its officials told the White House that such a strike would set back Iran’s programs by roughly three years. Its request was turned down.
Now, Mr. Dagan’s statement suggests that Israel believes it has gained at least that much time, without mounting an attack. So does the Obama administration.
For years, Washington’s approach to Tehran’s program has been one of attempting “to put time on the clock,” a senior administration official said, even while refusing to discuss Stuxnet. “And now, we have a bit more.”
Finding Weaknesses
Paranoia helped, as it turns out.
Years before the worm hit Iran, Washington had become deeply worried about the vulnerability of the millions of computers that run everything in the United States from bank transactions to the power grid.
Computers known as controllers run all kinds of industrial machinery. By early 2008, the Department of Homeland Security had teamed up with the Idaho National Laboratory to study a widely used Siemens controller known as P.C.S.-7, for Process Control System 7. Its complex software, called Step 7, can run whole symphonies of industrial instruments, sensors and machines.
The vulnerability of the controller to cyberattack was an open secret. In July 2008, the Idaho lab and Siemens teamed up on a PowerPoint presentation on the controller’s vulnerabilities that was made to a conference in Chicago at Navy Pier, a top tourist attraction.
“Goal is for attacker to gain control,” the July paper said in describing the many kinds of maneuvers that could exploit system holes. The paper was 62 pages long, including pictures of the controllers as they were examined and tested in Idaho.
In a statement on Friday, the Idaho National Laboratory confirmed that it formed a partnership with Siemens but said it was one of many with manufacturers to identify cybervulnerabilities. It argued that the report did not detail specific flaws that attackers could exploit. But it also said it could not comment on the laboratory’s classified missions, leaving unanswered the question of whether it passed what it learned about the Siemens systems to other parts of the nation’s intelligence apparatus.
The presentation at the Chicago conference, which recently disappeared from a Siemens Web site, never discussed specific places where the machines were used.
But Washington knew. The controllers were critical to operations at Natanz, a sprawling enrichment site in the desert. “If you look for the weak links in the system,” said one former American official, “this one jumps out.”
Controllers, and the electrical regulators they run, became a focus of sanctions efforts. The trove of State Department cables made public by WikiLeaks describes urgent efforts in April 2009 to stop a shipment of Siemens controllers, contained in 111 boxes at the port of Dubai, in the United Arab Emirates. They were headed for Iran, one cable said, and were meant to control “uranium enrichment cascades” — the term for groups of spinning centrifuges.
Subsequent cables showed that the United Arab Emirates blocked the transfer of the Siemens computers across the Strait of Hormuz to Bandar Abbas, a major Iranian port.
Only months later, in June, Stuxnet began to pop up around the globe. The Symantec Corporation, a maker of computer security software and services based in Silicon Valley, snared it in a global malware collection system. The worm hit primarily inside Iran, Symantec reported, but also in time appeared in India, Indonesia and other countries.
But unlike most malware, it seemed to be doing little harm. It did not slow computer networks or wreak general havoc.
That deepened the mystery.
A ‘Dual Warhead’
No one was more intrigued than Mr. Langner, a former psychologist who runs a small computer security company in a suburb of Hamburg. Eager to design protective software for his clients, he had his five employees focus on picking apart the code and running it on the series of Siemens controllers neatly stacked in racks, their lights blinking.
He quickly discovered that the worm only kicked into gear when it detected the presence of a specific configuration of controllers, running a set of processes that appear to exist only in a centrifuge plant. “The attackers took great care to make sure that only their designated targets were hit,” he said. “It was a marksman’s job.”
For example, one small section of the code appears designed to send commands to 984 machines linked together.
Curiously, when international inspectors visited Natanz in late 2009, they found that the Iranians had taken out of service a total of exactly 984 machines that had been running the previous summer.
But as Mr. Langner kept peeling back the layers, he found more — what he calls the “dual warhead.” One part of the program is designed to lie dormant for long periods, then speed up the machines so that the spinning rotors in the centrifuges wobble and then destroy themselves. Another part, called a “man in the middle” in the computer world, sends out those false sensor signals to make the system believe everything is running smoothly. That prevents a safety system from kicking in, which would shut down the plant before it could self-destruct.
“Code analysis makes it clear that Stuxnet is not about sending a message or proving a concept,” Mr. Langner later wrote. “It is about destroying its targets with utmost determination in military style.”
This was not the work of hackers, he quickly concluded. It had to be the work of someone who knew his way around the specific quirks of the Siemens controllers and had an intimate understanding of exactly how the Iranians had designed their enrichment operations.
In fact, the Americans and the Israelis had a pretty good idea.
Testing the Worm
Perhaps the most secretive part of the Stuxnet story centers on how the theory of cyberdestruction was tested on enrichment machines to make sure the malicious software did its intended job.
The account starts in the Netherlands. In the 1970s, the Dutch designed a tall, thin machine for enriching uranium. As is well known, A. Q. Khan, a Pakistani metallurgist working for the Dutch, stole the design and in 1976 fled to Pakistan.
The resulting machine, known as the P-1, for Pakistan’s first-generation centrifuge, helped the country get the bomb. And when Dr. Khan later founded an atomic black market, he illegally sold P-1’s to Iran, Libya, and North Korea.
The P-1 is more than six feet tall. Inside, a rotor of aluminum spins uranium gas to blinding speeds, slowly concentrating the rare part of the uranium that can fuel reactors and bombs.
How and when Israel obtained this kind of first-generation centrifuge remains unclear, whether from Europe, or the Khan network, or by other means. But nuclear experts agree that Dimona came to hold row upon row of spinning centrifuges.
“They’ve long been an important part of the complex,” said Avner Cohen, author of “The Worst-Kept Secret” (2010), a book about the Israeli bomb program, and a senior fellow at the Monterey Institute of International Studies. He added that Israeli intelligence had asked retired senior Dimona personnel to help on the Iranian issue, and that some apparently came from the enrichment program.
“I have no specific knowledge,” Dr. Cohen said of Israel and the Stuxnet worm. “But I see a strong Israeli signature and think that the centrifuge knowledge was critical.”
Another clue involves the United States. It obtained a cache of P-1’s after Libya gave up its nuclear program in late 2003, and the machines were sent to the Oak Ridge National Laboratory in Tennessee, another arm of the Energy Department.
By early 2004, a variety of federal and private nuclear experts assembled by the Central Intelligence Agency were calling for the United States to build a secret plant where scientists could set up the P-1’s and study their vulnerabilities. “The notion of a test bed was really pushed,” a participant at the C.I.A. meeting recalled.
The resulting plant, nuclear experts said last week, may also have played a role in Stuxnet testing.
But the United States and its allies ran into the same problem the Iranians have grappled with: the P-1 is a balky, badly designed machine. When the Tennessee laboratory shipped some of its P-1’s to England, in hopes of working with the British on a program of general P-1 testing, they stumbled, according to nuclear experts.
“They failed hopelessly,” one recalled, saying that the machines proved too crude and temperamental to spin properly.
Dr. Cohen said his sources told him that Israel succeeded — with great difficulty — in mastering the centrifuge technology. And the American expert in nuclear intelligence, who spoke on the condition of anonymity, said the Israelis used machines of the P-1 style to test the effectiveness of Stuxnet.
The expert added that Israel worked in collaboration with the United States in targeting Iran, but that Washington was eager for “plausible deniability.”
In November, the Iranian president, Mahmoud Ahmadinejad, broke the country’s silence about the worm’s impact on its enrichment program, saying a cyberattack had caused “minor problems with some of our centrifuges.” Fortunately, he added, “our experts discovered it.”
The most detailed portrait of the damage comes from the Institute for Science and International Security, a private group in Washington. Last month, it issued a lengthy Stuxnet report that said Iran’s P-1 machines at Natanz suffered a series of failures in mid- to late 2009 that culminated in technicians taking 984 machines out of action.
The report called the failures “a major problem” and identified Stuxnet as the likely culprit.
Stuxnet is not the only blow to Iran. Sanctions have hurt its effort to build more advanced (and less temperamental) centrifuges. And last January, and again in November, two scientists who were believed to be central to the nuclear program were killed in Tehran.
The man widely believed to be responsible for much of Iran’s program, Mohsen Fakrizadeh, a college professor, has been hidden away by the Iranians, who know he is high on the target list.
Publicly, Israeli officials make no explicit ties between Stuxnet and Iran’s problems. But in recent weeks, they have given revised and surprisingly upbeat assessments of Tehran’s nuclear status.
“A number of technological challenges and difficulties” have beset Iran’s program, Moshe Yaalon, Israel’s minister of strategic affairs, told Israeli public radio late last month.
The troubles, he added, “have postponed the timetable.”
Sunday, January 16, 2011
Tuesday, June 17, 2008
LEGACY OF ASHES The History of the CIA.
Counter Intelligence
By EVAN THOMAS
Skip to next paragraph
LEGACY OF ASHES
The History of the CIA.
By Tim Weiner.
Illustrated. 702 pp. Doubleday. $27.95.
Correction Appended
America’s foes and rivals have long overrated the Central Intelligence Agency. When Henry Kissinger traveled to China in 1971, Prime Minister Chou En-lai asked about C.I.A. subversion. Kissinger told Chou that he “vastly overestimates the competence of the C.I.A.” Chou persisted that “whenever something happens in the world they are always thought of.” Kissinger acknowledged, “That is true, and it flatters them, but they don’t deserve it.”
A few years later, in 1979, Iranian revolutionaries seized the American embassy in Tehran. They captured a C.I.A. case officer named William Daugherty and accused him of running the agency’s entire Middle Eastern spy network while plotting to assassinate Ayatollah Khomeini. Daugherty, who had been in the C.I.A. for only nine months, tried to explain that he didn’t even speak the native tongue, Persian. The Iranians seemed offended that the Americans would send such an inexperienced spy. It was “beyond insult,” Daugherty later recalled, “for that officer not to speak the language or know the customs, culture and history of their country.”
The C.I.A. never did have much luck operating inside Communist China, and it failed to predict the Iranian revolution of 1979. “We were just plain asleep,” said the former C.I.A. director Adm. Stansfield Turner. The agency also did not foresee the explosion of an atom bomb by the Soviet Union in 1949, the invasion of South Korea in 1950, the popular uprisings in Eastern Europe in the 1950s, the installation of Soviet missiles in Cuba in 1962, the Arab-Israeli war of 1973, the Soviet invasion of Afghanistan in 1979, the collapse of the Soviet Union in 1989, Iraq’s invasion of Kuwait in 1990, the explosion of an atom bomb by India in 1998 — the list goes on and on, culminating in the agency’s wrong call on Iraq’s weapons of mass destruction in 2002-3.
Tim Weiner’s engrossing, comprehensive “Legacy of Ashes” is a litany of failure, from the C.I.A.’s early days, when hundreds of agents were dropped behind the Iron Curtain to be killed or doubled (almost without exception), to more recent humiliations, like George Tenet’s now infamous “slam dunk” line. Over the years, the agency threw around a lot of money and adopted a certain swagger. “We went all over the world and we did what we wanted,” said Al Ulmer, the C.I.A.’s Far East division chief in the 1950s. “God, we had fun.” But even their successes turned out to be failures. In 1963, the C.I.A. backed a coup to install the Baath Party in Iraq. “We came to power on a C.I.A. train,” said Ali Saleh Saadi, the Baath Party interior minister. One of the train’s passengers, Weiner notes, was a young assassin named Saddam Hussein. Weiner quotes Donald Gregg, a former C.I.A. station chief in South Korea, later the national security adviser to Vice President George H. W. Bush: “The record in Europe was bad. The record in Asia was bad. The agency had a terrible record in its early days — a great reputation and a terrible record.”
And yet the myth of the C.I.A. as an all-knowing, all-powerful spy agency persisted for years, not just in the minds of America’s enemies but in the imagination of many American television-watchers and moviegoers. Among those fooled, at least initially, were most modern presidents of the United States. The promise of a secret intelligence organization that could not only spy on America’s enemies but also influence events abroad, by sleight of hand and at relatively low cost, was just too alluring.
When presidents finally faced the reality that the agency was bumbling, they could be bitter. Reviewing the C.I.A.’s record after his two terms in office, Dwight Eisenhower told the director, Allen Dulles, “I have suffered an eight-year defeat on this.” He would “leave a legacy of ashes” for his successor. A fan of Ian Fleming’s spy stories, John F. Kennedy was shocked to be introduced to the man described by C.I.A. higher-ups as their James Bond — the fat, alcoholic, unstable William Harvey, who ran a botched attempt to eliminate Fidel Castro by hiring the Mafia. Ronald Reagan went along with the desire of his C.I.A. director, William Casey, to bring back the mythical glory days by “unleashing” the agency — and his presidency was badly undermined by the Iran-contra affair.
In Weiner’s telling, a president trying to use the C.I.A. resembles Charlie Brown trying to kick the football. The role of Lucy is played by scheming or inept directors. Dulles is particularly egregious, a lazy, vain con artist who watches baseball games on television while half-listening to top-secret briefings (he assesses written briefings by their weight). Casey mumbles and lies and may have been almost mad from a brain tumor by the end. Even the more honorable directors, like Richard Helms, can’t resist telling presidents what they want to hear. To fit the policy needs of the Nixon White House in 1969, Helms doctored a C.I.A. estimate of Soviet nuclear forces. In a draft of the report, analysts had doubted the Soviet will or capacity to launch a nuclear strike. Helms erased this crucial passage — and for years thereafter, until the end of the cold war, the C.I.A. overstated the rate at which the Soviets were modernizing their arsenal. The C.I.A.’s bogus intelligence on Iraq in 2002-3, based on the deceits of dubious sources like the one known as Curveball, was hardly unprecedented. To justify the Johnson administration’s desire for a pro-war Congressional resolution on Vietnam in 1964, the intelligence community manufactured evidence of a Communist attack on American destroyers in the Gulf of Tonkin.
Weiner, a reporter for The Times who has covered intelligence for many years, has a good eye for embarrassing detail. High-ranking officials, it appears, were often the last to know. When Iraq invaded Kuwait in August 1990, Robert M. Gates, who is now the secretary of defense but at the time was the first President Bush’s deputy national security adviser, was at a family picnic. A friend of his wife’s joined the picnic and asked him, “What are you doing here?” Gates asked, “What are you talking about?” “The invasion,” she said. “What invasion?” he asked. A year earlier, when the Berlin Wall fell, Milt Bearden, the leader of the C.I.A.’s Soviet division, was reduced to watching CNN and deflecting urgent calls from White House officials who wanted to know what the agency’s spies were saying. “It was hard to confess that there were no Soviet spies worth a damn — they all had been rounded up and killed, and no one at the C.I.A. knew why,” Weiner writes. (The American agents in Moscow had been betrayed by the C.I.A. mole Aldrich Ames.)
Weiner is not the first reporter to see that the C.I.A.’s golden era was an illusion. After the 1975 Church Committee hearings exposed the agency as “the gang that couldn’t shoot straight,” various authors began to deconstruct the myth of the C.I.A., most notably Thomas Powers in “The Man Who Kept the Secrets.” But by using tens of thousands of declassified documents and on-the-record recollections of dozens of chagrined spymasters, Weiner paints what may be the most disturbing picture yet of C.I.A. ineptitude. After following along Weiner’s march of folly, readers may wonder: Is an open democracy capable of building and sustaining an effective secret intelligence service? Maybe not. But with Islamic terrorists vowing to set off a nuclear device in an American city, there isn’t much choice but to keep on trying.
Evan Thomas, an editor at large at Newsweek, is the author of “The Very Best Men: The Daring Early Years of the C.I.A.”
Correction: August 5, 2007
A review on July 22 about “Legacy of Ashes: The History of the CIA,” by Tim Weiner, referred incorrectly to Defense Secretary Robert M. Gates. When Iraq invaded Kuwait in August 1990, Gates was George H. W. Bush’s deputy national security adviser, not his “top intelligence adviser”; he did not became the director of central intelligence until November 1991.
By EVAN THOMAS
Skip to next paragraph
LEGACY OF ASHES
The History of the CIA.
By Tim Weiner.
Illustrated. 702 pp. Doubleday. $27.95.
Correction Appended
America’s foes and rivals have long overrated the Central Intelligence Agency. When Henry Kissinger traveled to China in 1971, Prime Minister Chou En-lai asked about C.I.A. subversion. Kissinger told Chou that he “vastly overestimates the competence of the C.I.A.” Chou persisted that “whenever something happens in the world they are always thought of.” Kissinger acknowledged, “That is true, and it flatters them, but they don’t deserve it.”
A few years later, in 1979, Iranian revolutionaries seized the American embassy in Tehran. They captured a C.I.A. case officer named William Daugherty and accused him of running the agency’s entire Middle Eastern spy network while plotting to assassinate Ayatollah Khomeini. Daugherty, who had been in the C.I.A. for only nine months, tried to explain that he didn’t even speak the native tongue, Persian. The Iranians seemed offended that the Americans would send such an inexperienced spy. It was “beyond insult,” Daugherty later recalled, “for that officer not to speak the language or know the customs, culture and history of their country.”
The C.I.A. never did have much luck operating inside Communist China, and it failed to predict the Iranian revolution of 1979. “We were just plain asleep,” said the former C.I.A. director Adm. Stansfield Turner. The agency also did not foresee the explosion of an atom bomb by the Soviet Union in 1949, the invasion of South Korea in 1950, the popular uprisings in Eastern Europe in the 1950s, the installation of Soviet missiles in Cuba in 1962, the Arab-Israeli war of 1973, the Soviet invasion of Afghanistan in 1979, the collapse of the Soviet Union in 1989, Iraq’s invasion of Kuwait in 1990, the explosion of an atom bomb by India in 1998 — the list goes on and on, culminating in the agency’s wrong call on Iraq’s weapons of mass destruction in 2002-3.
Tim Weiner’s engrossing, comprehensive “Legacy of Ashes” is a litany of failure, from the C.I.A.’s early days, when hundreds of agents were dropped behind the Iron Curtain to be killed or doubled (almost without exception), to more recent humiliations, like George Tenet’s now infamous “slam dunk” line. Over the years, the agency threw around a lot of money and adopted a certain swagger. “We went all over the world and we did what we wanted,” said Al Ulmer, the C.I.A.’s Far East division chief in the 1950s. “God, we had fun.” But even their successes turned out to be failures. In 1963, the C.I.A. backed a coup to install the Baath Party in Iraq. “We came to power on a C.I.A. train,” said Ali Saleh Saadi, the Baath Party interior minister. One of the train’s passengers, Weiner notes, was a young assassin named Saddam Hussein. Weiner quotes Donald Gregg, a former C.I.A. station chief in South Korea, later the national security adviser to Vice President George H. W. Bush: “The record in Europe was bad. The record in Asia was bad. The agency had a terrible record in its early days — a great reputation and a terrible record.”
And yet the myth of the C.I.A. as an all-knowing, all-powerful spy agency persisted for years, not just in the minds of America’s enemies but in the imagination of many American television-watchers and moviegoers. Among those fooled, at least initially, were most modern presidents of the United States. The promise of a secret intelligence organization that could not only spy on America’s enemies but also influence events abroad, by sleight of hand and at relatively low cost, was just too alluring.
When presidents finally faced the reality that the agency was bumbling, they could be bitter. Reviewing the C.I.A.’s record after his two terms in office, Dwight Eisenhower told the director, Allen Dulles, “I have suffered an eight-year defeat on this.” He would “leave a legacy of ashes” for his successor. A fan of Ian Fleming’s spy stories, John F. Kennedy was shocked to be introduced to the man described by C.I.A. higher-ups as their James Bond — the fat, alcoholic, unstable William Harvey, who ran a botched attempt to eliminate Fidel Castro by hiring the Mafia. Ronald Reagan went along with the desire of his C.I.A. director, William Casey, to bring back the mythical glory days by “unleashing” the agency — and his presidency was badly undermined by the Iran-contra affair.
In Weiner’s telling, a president trying to use the C.I.A. resembles Charlie Brown trying to kick the football. The role of Lucy is played by scheming or inept directors. Dulles is particularly egregious, a lazy, vain con artist who watches baseball games on television while half-listening to top-secret briefings (he assesses written briefings by their weight). Casey mumbles and lies and may have been almost mad from a brain tumor by the end. Even the more honorable directors, like Richard Helms, can’t resist telling presidents what they want to hear. To fit the policy needs of the Nixon White House in 1969, Helms doctored a C.I.A. estimate of Soviet nuclear forces. In a draft of the report, analysts had doubted the Soviet will or capacity to launch a nuclear strike. Helms erased this crucial passage — and for years thereafter, until the end of the cold war, the C.I.A. overstated the rate at which the Soviets were modernizing their arsenal. The C.I.A.’s bogus intelligence on Iraq in 2002-3, based on the deceits of dubious sources like the one known as Curveball, was hardly unprecedented. To justify the Johnson administration’s desire for a pro-war Congressional resolution on Vietnam in 1964, the intelligence community manufactured evidence of a Communist attack on American destroyers in the Gulf of Tonkin.
Weiner, a reporter for The Times who has covered intelligence for many years, has a good eye for embarrassing detail. High-ranking officials, it appears, were often the last to know. When Iraq invaded Kuwait in August 1990, Robert M. Gates, who is now the secretary of defense but at the time was the first President Bush’s deputy national security adviser, was at a family picnic. A friend of his wife’s joined the picnic and asked him, “What are you doing here?” Gates asked, “What are you talking about?” “The invasion,” she said. “What invasion?” he asked. A year earlier, when the Berlin Wall fell, Milt Bearden, the leader of the C.I.A.’s Soviet division, was reduced to watching CNN and deflecting urgent calls from White House officials who wanted to know what the agency’s spies were saying. “It was hard to confess that there were no Soviet spies worth a damn — they all had been rounded up and killed, and no one at the C.I.A. knew why,” Weiner writes. (The American agents in Moscow had been betrayed by the C.I.A. mole Aldrich Ames.)
Weiner is not the first reporter to see that the C.I.A.’s golden era was an illusion. After the 1975 Church Committee hearings exposed the agency as “the gang that couldn’t shoot straight,” various authors began to deconstruct the myth of the C.I.A., most notably Thomas Powers in “The Man Who Kept the Secrets.” But by using tens of thousands of declassified documents and on-the-record recollections of dozens of chagrined spymasters, Weiner paints what may be the most disturbing picture yet of C.I.A. ineptitude. After following along Weiner’s march of folly, readers may wonder: Is an open democracy capable of building and sustaining an effective secret intelligence service? Maybe not. But with Islamic terrorists vowing to set off a nuclear device in an American city, there isn’t much choice but to keep on trying.
Evan Thomas, an editor at large at Newsweek, is the author of “The Very Best Men: The Daring Early Years of the C.I.A.”
Correction: August 5, 2007
A review on July 22 about “Legacy of Ashes: The History of the CIA,” by Tim Weiner, referred incorrectly to Defense Secretary Robert M. Gates. When Iraq invaded Kuwait in August 1990, Gates was George H. W. Bush’s deputy national security adviser, not his “top intelligence adviser”; he did not became the director of central intelligence until November 1991.
Friday, June 6, 2008
Commentary: The Saudi Design on Lebanon
by Ali Alyami
IPT News
May 28, 2008
In recent years, Hezbollah has been playing a dangerous game with the Lebanese government. By exploiting multiple pressure points simultaneously, Hezbollah is making remarkable advances in its radical Shia agenda. Earlier this month, Hezbollah seized the mostly-Sunni Muslim West Beirut by force. This ultimately forced the US-backed Lebanese government to join a new unity coalition that gives Hezbollah 11 seats out of 30 in the cabinet, giving them veto power over any decision of the Lebanese government. They were not pressured to disarm in return for this new political power. Additionally,they are allowed to keep their separate telecommunications network and surveillance equipment at Beirut's airport, and are allowed to reinstall the airport security chief linked to the group.[1]
Understandably, Washington has and will continue to bet on its own horse, Prime Minister Fouad Siniora. Meanwhile, the West is exacerbating the situation by aiding autocratic Arab regimes outside Lebanon who are playing Washington for a fool.
More so than any other Arab regime, the Saudi ruling family knows full well that if Hezbollah takes over Lebanon completely, it could form a united front with Iran, Syria, Hamas and Muqtada Al-Sadr's martyrs against Israel, the US and pro-American autocratic Arab regimes, especially the Saudi-Wahhabi alliance. In the long term, such an alliance poses a tremendous threat to Saudi Arabia and its traditional dominance of the Muslim world. But what would happen if this scenario actually played out, and who would inexorably benefit?
Despite the Saudi monarchy's public criticism of Iran's support for its proxies in Syria and Lebanon, a Hezbollah that controlled Lebanon both politically and militarily would further the ideological influence of Saudi Arabia's ruling theocrats. In the short term, the fact that Hezbollah is Shia and the Saudis are Sunnis is largely irrelevant. In fact, the Saudi government would prefer to see the democratically elected (mostly Sunnis and Christians) Lebanese government deposed and replaced by a Islamic system, modeled perhaps on the Wahhabis in Riyadh, the Alawites in Damascus, or the Mullahs in Tehran.
Granted, it is no secret that the Sunni monarchy in Saudi Arabia would like to see the Syrian-Iranian-Hezbollah alliance weakened or dismantled, but their favored method for weakening this alliance makes the Saudis a wild card, not a partner, in America's push for democracy in the Middle East. Specifically, the Saudis know what the Americans fool themselves into ignoring -- that only by force can extremist regimes and groups be countered.
In Saudi eyes, only after Hezbollah seizes all of Lebanon will the US abandon its fantasies of democratization in favor of military confrontation. The goal, then, is to ensure that such a confrontation between the West and the "Shia Crescent" is both imminent and ferocious. What's more, as long as this battle does not spill over Lebanon's borders, the Saudi royals can stoke and benefit from this battle without ever lifting a finger.
Given recent events, if Hezbollah uses the political gains made by its new unity government to consolidate a choke-hold over all of Lebanon (the northern half, as well), then the Saudis expect the Israelis (with US support) to react and, unlike in the summer of 2006, to deal Hezbollah and Syria a lasting, crippling defeat. Riyadh hopes to bait one enemy into fighting another, and in the process, the Saudi royals can ensure their security, survival and ideological reach. This became apparent as the Saudi government frankly blamed Hezbollah announcing that they should "bear the responsibility" for kidnapping two Israeli soldiers which initiated a military response by Israel in July 2006.[2] This is an unprecedented move by an Arab government, especially the Saudi government, which has always led anti-Israeli campaign. The Saudis wanted the Israelis to finish off Hezbollah, but that did not happen.
Now Hezbollah continues to seek the overthrow of Lebanon's legitimate government. However, if Hezbollah continues making gains through its various military and political tactics, then Israel may be forced once again to shape Lebanon to ensure its security, as it tried to do in the late 1970s and early 1980s. The Saudi royals are hoping that Israel will not make the same mistakes twice and thus eliminate Riyadh's theocratic competition for them in Lebanon and elsewhere.
Either way, no one should be deluded by Saudi statements and public charades if and when Israel launches such an assault on Hezbollah's infrastructure in Lebanon, Syria and takes out Iran's nuclear installations. The Saudi royal family will undoubtedly condemn the "Zionists" and the US for supporting them; Riyadh will certainly call for an urgent meeting of the insignificant Arab League, the UN General Assembly and the European Union to condemn Israel, which they will do given historical precedence. The Saudi ruling family also will send massive shipments of food, medicine, tents, doctors and nurses to Lebanon to aid victims of the war, and ultimately, to steal the glory from Hezbollah's remarkable social services programs.
But the real prize for Riyadh will come only after the dust settles. The Saudi government, directly and through prominent businessmen and Prince al-Waleed (the financier of Islamic study departments in prominent American and European universities), will invest heavily in the rebuilding of Lebanon's infrastructure. In doing so, the Saudi government will also invest energy in exporting Wahhabism among the Lebanese Sunni population, headed by the Hariri family, to represent Saudi interests in Lebanon. As with Pakistan, Bangladesh, Yemen, Afghanistan, Bosnia and other places, wherever Saudi largess goes, Wahhabism follows.
In the wake of Hezbollah's temporary siege of Beirut, many Sunnis have lost faith in their leaders and are increasingly likely to turn to militant Sunni militias for "protection." To put it lightly, however, the offensive nature of such "protection" is a Saudi specialty, and it seems unlikely that Washington has the same outcome in mind for Lebanon. Either way, the Saudi royal family and its Wahhabi religious extremists must not be trusted if anyone is serious about winning the "War on Terrorism."
Ali Alyami is the Executive Director of the Washington-based Center for Democracy and Human Rights in Saudi Arabia. http://www.cdhr.info
IPT News
May 28, 2008
In recent years, Hezbollah has been playing a dangerous game with the Lebanese government. By exploiting multiple pressure points simultaneously, Hezbollah is making remarkable advances in its radical Shia agenda. Earlier this month, Hezbollah seized the mostly-Sunni Muslim West Beirut by force. This ultimately forced the US-backed Lebanese government to join a new unity coalition that gives Hezbollah 11 seats out of 30 in the cabinet, giving them veto power over any decision of the Lebanese government. They were not pressured to disarm in return for this new political power. Additionally,they are allowed to keep their separate telecommunications network and surveillance equipment at Beirut's airport, and are allowed to reinstall the airport security chief linked to the group.[1]
Understandably, Washington has and will continue to bet on its own horse, Prime Minister Fouad Siniora. Meanwhile, the West is exacerbating the situation by aiding autocratic Arab regimes outside Lebanon who are playing Washington for a fool.
More so than any other Arab regime, the Saudi ruling family knows full well that if Hezbollah takes over Lebanon completely, it could form a united front with Iran, Syria, Hamas and Muqtada Al-Sadr's martyrs against Israel, the US and pro-American autocratic Arab regimes, especially the Saudi-Wahhabi alliance. In the long term, such an alliance poses a tremendous threat to Saudi Arabia and its traditional dominance of the Muslim world. But what would happen if this scenario actually played out, and who would inexorably benefit?
Despite the Saudi monarchy's public criticism of Iran's support for its proxies in Syria and Lebanon, a Hezbollah that controlled Lebanon both politically and militarily would further the ideological influence of Saudi Arabia's ruling theocrats. In the short term, the fact that Hezbollah is Shia and the Saudis are Sunnis is largely irrelevant. In fact, the Saudi government would prefer to see the democratically elected (mostly Sunnis and Christians) Lebanese government deposed and replaced by a Islamic system, modeled perhaps on the Wahhabis in Riyadh, the Alawites in Damascus, or the Mullahs in Tehran.
Granted, it is no secret that the Sunni monarchy in Saudi Arabia would like to see the Syrian-Iranian-Hezbollah alliance weakened or dismantled, but their favored method for weakening this alliance makes the Saudis a wild card, not a partner, in America's push for democracy in the Middle East. Specifically, the Saudis know what the Americans fool themselves into ignoring -- that only by force can extremist regimes and groups be countered.
In Saudi eyes, only after Hezbollah seizes all of Lebanon will the US abandon its fantasies of democratization in favor of military confrontation. The goal, then, is to ensure that such a confrontation between the West and the "Shia Crescent" is both imminent and ferocious. What's more, as long as this battle does not spill over Lebanon's borders, the Saudi royals can stoke and benefit from this battle without ever lifting a finger.
Given recent events, if Hezbollah uses the political gains made by its new unity government to consolidate a choke-hold over all of Lebanon (the northern half, as well), then the Saudis expect the Israelis (with US support) to react and, unlike in the summer of 2006, to deal Hezbollah and Syria a lasting, crippling defeat. Riyadh hopes to bait one enemy into fighting another, and in the process, the Saudi royals can ensure their security, survival and ideological reach. This became apparent as the Saudi government frankly blamed Hezbollah announcing that they should "bear the responsibility" for kidnapping two Israeli soldiers which initiated a military response by Israel in July 2006.[2] This is an unprecedented move by an Arab government, especially the Saudi government, which has always led anti-Israeli campaign. The Saudis wanted the Israelis to finish off Hezbollah, but that did not happen.
Now Hezbollah continues to seek the overthrow of Lebanon's legitimate government. However, if Hezbollah continues making gains through its various military and political tactics, then Israel may be forced once again to shape Lebanon to ensure its security, as it tried to do in the late 1970s and early 1980s. The Saudi royals are hoping that Israel will not make the same mistakes twice and thus eliminate Riyadh's theocratic competition for them in Lebanon and elsewhere.
Either way, no one should be deluded by Saudi statements and public charades if and when Israel launches such an assault on Hezbollah's infrastructure in Lebanon, Syria and takes out Iran's nuclear installations. The Saudi royal family will undoubtedly condemn the "Zionists" and the US for supporting them; Riyadh will certainly call for an urgent meeting of the insignificant Arab League, the UN General Assembly and the European Union to condemn Israel, which they will do given historical precedence. The Saudi ruling family also will send massive shipments of food, medicine, tents, doctors and nurses to Lebanon to aid victims of the war, and ultimately, to steal the glory from Hezbollah's remarkable social services programs.
But the real prize for Riyadh will come only after the dust settles. The Saudi government, directly and through prominent businessmen and Prince al-Waleed (the financier of Islamic study departments in prominent American and European universities), will invest heavily in the rebuilding of Lebanon's infrastructure. In doing so, the Saudi government will also invest energy in exporting Wahhabism among the Lebanese Sunni population, headed by the Hariri family, to represent Saudi interests in Lebanon. As with Pakistan, Bangladesh, Yemen, Afghanistan, Bosnia and other places, wherever Saudi largess goes, Wahhabism follows.
In the wake of Hezbollah's temporary siege of Beirut, many Sunnis have lost faith in their leaders and are increasingly likely to turn to militant Sunni militias for "protection." To put it lightly, however, the offensive nature of such "protection" is a Saudi specialty, and it seems unlikely that Washington has the same outcome in mind for Lebanon. Either way, the Saudi royal family and its Wahhabi religious extremists must not be trusted if anyone is serious about winning the "War on Terrorism."
Ali Alyami is the Executive Director of the Washington-based Center for Democracy and Human Rights in Saudi Arabia. http://www.cdhr.info
Wednesday, June 4, 2008
Great world socioeconomic and political analysis
This is a paper presented several months ago by Herb Meyer at the World Economic Forum in Davos, Switzerland, which was attended by most of the CEOs from all the major international corporations -- a very good summary of today's key trends and a perspective one seldom sees.
Meyer served during the Reagan administration as special assistant to the Director of Central Intelligence and Vice Chairman of the CIA's National Intelligence Council. In these positions, he managed production of the U.S. National Intelligence Estimates and other top-secret projections for the President and his national security advisers.
Meyer is widely credited with being the first senior U.S.Government official to forecast the Soviet Union's collapse, for which he later was awarded the U.S.National Intelligence Distinguished Service Medal, the intelligence community's highest honor. Formerly an associate editor of FORTUNE, he is also the author of several books.
WHAT IN THE WORLD IS GOING ON? A GLOBAL INTELLIGENCE BRIEFING FOR CEOs
by HERBERT MEYER
FOUR MAJOR TRANSFORMATIONS
Currently, there are four major transformations that are shaping political, economic and world events. These transformations have profound implications for American business leaders and owners, our culture and on our way of life.
1. The War in Iraq
There are three major monotheistic religions in the world: Christianity, Judaism and Islam. In the 16th century, Judaism and Christianity reconciled with the modern world. The rabbis, priests and scholars found a way to settle up and pave the way forward. Religion remained at the center of life, church and state became separate. Rule of law, idea of economic liberty, individual rights, human Rights-all these are defining points of modern Western civilization. These concepts started with the Greeks but didn't take off until the 15th and 16th century when Judaism and Christianity found a way to reconcile with the modern world. When that happened, it unleashed the scientific revolution and the greatest outpouring of art, literature and music the world has ever known.
Islam, which developed in the 7th century, counts millions of Moslems around the world who are normal people. However, there is a radical streak within Islam. When the radicals are in charge, Islam attacks Western civilization. Islam first attacked Western civilization in the 7th century, and later in the 16th and 17th centuries. By 1683, the Moslems (Turks from the Ottoman Empire) were literally at the gates of Vienna. It was in Vienna that the climatic battle between Islam and Western civilization took place. The West won and went forward. Islam lost and went backward. Interestingly, the date of that battle was September 11. Since them, Islam has not found a way to reconcile with the modern world.
Today, terrorism is the third attack on Western civilization by radical Islam. To deal with terrorism, the U.S. is doing two things. First, units of our armed forces are in 30 countries around the world hunting down terrorist groups and dealing with them. This gets very little publicity. Second we are taking military action in Afghanistan and Iraq.
These actions are covered relentlessly by the media. People can argue about whether the war in Iraq is right or wrong. However, the underlying strategy behind the war is to use our military to remove the radicals from power and give the moderates a chance. Our hope is that, over time, the moderates will find a way to bring Islam forward into the 21st century. That's what our involvement in Iraq and Afghanistan is all about.
The lesson of 9/11 is that we live in a world where a small number of people can kill a large number of people very quickly. They can use airplanes, bombs, anthrax, chemical weapons or dirty bombs. Even with a first-rate intelligence service (which the U.S. does not have), you can't stop every attack. That means our tolerance for political horseplay has dropped to zero. No longer will we play games with terrorists or weapons of mass destructions.
Most of the instability and horseplay is coming from the Middle East. That's why we have thought that if we could knock out the radicals and give the moderates a chance to hold power, they might find a way to reconcile Islam with the modern world. So when looking at Afghanistan or Iraq, it's important to look for any signs that they are modernizing.
For example, women being brought into the work force and colleges in Afghanistan is good. The Iraqis stumbling toward a constitution is good.
People can argue about what the U.S. is doing and how we're doing it but anything that suggests Islam is finding its way forward is good.
2. The Emergence of China
In the last 20 years, China has moved 250 million people from the farms and villages into the cities. Their plan is to move another 300 million in the next 20 years. When you put that many people into the cities, you have to find work for them. That's why China is addicted to manufacturing; they have to put all the relocated people to work. When we decide to manufacture something in the U.S., it's based on market needs and the opportunity to make a profit. In China, they make the decision because they want the jobs, which is a very different calculation.
While China is addicted to manufacturing, Americans are addicted to low prices. As a result, a unique kind of economic codependency has developed between the two countries. If we ever stop buying from China, they will explode politically. If China stops selling to us, our economy will take a huge hit because prices will jump. We are subsidizing their economic development; they are subsidizing our economic growth.
Because of their huge growth in manufacturing, China is hungry for raw materials, which drives prices up worldwide. China is also thirsty for oil, which is one reason oil is now over $100 a barrel. By 2020, China will produce more cars than the U.S. China is also buying its way into the oil infrastructure around the world. They are doing it in the open market and paying fair market prices, but millions of barrels of oil that would have gone to the U.S. are now going to China. China's quest to assure it has the oil it needs to fuel its economy is a major factor in world politics and economics.
We have our Navy fleets protecting the sea lines, specifically the ability to get the tankers through. It won't be long before the Chinese have an aircraft carrier sitting in the Persian Gulf as well. The question is, will their aircraft carrier be pointing in the same direction as ours or against us?
3. Shifting Demographics of Western Civilization
Most countries in the Western world have stopped breeding. For a civilization obsessed with sex, this is remarkable. Maintaining a steady population requires a birth rate of 2.1 In Western Europe, the birth rate currently stands at 1.5, or 30 percent below replacement. In 30 years there will be 70 to 80 million fewer Europeans than there are today. The current birth rate in Germany is 1.3. Italy and Spain are even lower at 1.2. At that rate, the working age population declines by 30 percent in 20 years, which has a huge impact on the economy. When you don't have young workers to replace the older ones, you have to import them.
The European countries are currently importing Moslems. Today, the Moslems comprise 10 percent of France and Germany, and the percentage is rising rapidly because they have higher birthrates. However, the Moslem populations are not being integrated into the cultures of their host countries, which is a political catastrophe. One reason Germany and France don't support the Iraq war is they fear their Moslem populations will explode on them. By 2020, more than half of all births in the Netherlands will be non-European.
The huge design flaw in the postmodern secular state is that you need a traditional religious society birth rate to sustain it. The Europeans simply don't wish to have children, so they are dying. In Japan, the birthrate is 1.3. As a result, Japan will lose up to 60 million people over the next 30 years. Because Japan has a very different society than Europe, they refuse to import workers. Instead, they are just shutting down. Japan has already closed 2,000 schools, and is closing them down at the rate of 300 per year. Japan is also aging very rapidly. By 2020, one out of every five Japanese will be at least 70 years old. Nobody has any idea about how to run an economy with those demographics.
Europe and Japan, which comprise two of the world's major economic engines, aren't merely in recession, they're shutting down. This will have a huge impact on the world economy, and it is already beginning to happen. Why are the birthrates so low? There is a direct correlation between abandonment of traditional religious society and a drop in birth rate, and Christianity in Europe is becoming irrelevant.
The second reason is economic. When the birth rate drops below replacement, the population ages. With fewer working people to support more retired people, it puts a crushing tax burden on the smaller group of working age people. As a result, young people delay marriage and having a family. Once this trend starts, the downward spiral only gets worse. These countries have abandoned all the traditions they formerly held in regard to having families and raising children.
The U.S. birth rate is 2.0, just below replacement. We have an increase in population because of immigration. When broken down by ethnicity, the Anglo birth rate is 1.6 (same as France) while the Hispanic birth rate is 2.7. In the U.S., the baby boomers are starting to retire in massive numbers. This will push the elder dependency ratio from 19 to 38 over the next 10 to 15 years. This is not as bad as Europe, but still represents the same kind of trend.
Western civilization seems to have forgotten what every primitive society understands-you need kids to have a healthy society. Children are huge consumers. Then they grow up to become taxpayers. That's how a society works, but the postmodern secular state seems to have forgotten that. If U.S. birth rates of the past 20 to 30 years had been the same as post-World War II, there would be no Social Security or Medicare problems.
The world's most effective birth control device is money. [I love this line!!] As society creates a middle class and women move into the workforce, birth rates drop. Having large families is incompatible with middle class living.
The quickest way to drop the birth rate is through rapid economic development. After World War II, the U.S. instituted a $600 tax credit per child. The idea was to enable mom and dad to have four children without being troubled by taxes. This led to a baby boom of 22 million kids, which was a huge consumer market. That turned into a huge tax base. However, to match that incentive in today's dollars would cost $12,000 per child.
China and India do not have declining populations. However, in both countries, there is a preference for boys over girls, and we now have the technology to know which is which before they are born. In China and India, families are aborting the girls. As a result, in each of these countries there are 70 million boys growing up who will never find wives. When left alone, nature produces 103 boys for every 100 girls. In some provinces, however, the ratio is 128 boys to every 100 girls. [I have read that this creates a potentially explosive situation. You have to keep all these potential sources of political instability contented. One way, historically often used, is war.]
The birth rate in Russia is so low that by 2050 their population will be smaller than that of Yemen. Russia has one-sixth of the earth's land surface and much of its oil. You can't control that much area with such a small population. Immediately to the south, you have China with 70 million unmarried men who are a real potential nightmare scenario for Russia.
4. Restructuring of American Business
The fourth major transformation involves a fundamental restructuring of American business. Today's business environment is very complex and competitive. To succeed, you have to be the best, which means having the highest quality and lowest cost. Whatever your price point, you must have the best quality and lowest price. To be the best, you have to concentrate on one thing. You can't be all things to all people and be the best.
A generation ago, IBM used to make every part of their computer. Now Intel makes the chips, Microsoft makes the software, and someone else makes the modems, hard drives, monitors, etc. IBM even out sources their call center. Because IBM has all these companies supplying goods and services cheaper and better than they could do it themselves, they can make a better computer at a lower cost. This is called a fracturing of business. When one company can make a better product by relying on others to perform functions the business used to do itself, it creates a complex pyramid of companies that serve and support each other.
This fracturing of American business is now in its second generation. The companies who supply IBM are now doing the same thing - outsourcing many of their core services and production process. As a result, they can make cheaper, better products. Over time, this pyramid continues to get bigger and bigger. Just when you think it can't fracture again, it does.
Even very small businesses can have a large pyramid of corporate entities that perform many of its important functions. One aspect of this trend is that companies end up with fewer employees and more independent contractors. This trend has also created two new words in business, integrator and complementor. At the top of the pyramid, IBM is the integrator. As you go down the pyramid, Microsoft, Intel and the other companies that support IBM are the complementors. However, each of the complementors is itself an integrator for the complementors underneath it.
This has several implications, the first of which is that we are now getting false readings on the economy. People who used to be employees are now independent contractors launching their own businesses. There are many people working whose work is not listed as a job. As a result, the economy is perking along better than the numbers are telling us.
Outsourcing also confused the numbers. Suppose a company like General Motors decides to outsource all its employee cafeteria functions to Marriott (which it did). It lays off hundreds of cafeteria workers, who then get hired right back by Marriott. The only thing that has changed is that these people work for Marriott rather than GM. Yet, the media headlines will scream that America has lost more manufacturing jobs.
All that really happened is that these workers are now reclassified as service workers. So the old way of counting jobs contributes to false economic readings. As yet, we haven't figured out how to make the
numbers catch up with the changing realities of the business world.
Another implication of this massive restructuring is that because companies are getting rid of units and people that used to work for them, the entity is smaller. As the companies get smaller and more
efficient, revenues are going down but profits are going up. As a result, the old notion that revenues are up and we're doing great isn't always the case anymore. Companies are getting smaller but are becoming more efficient and profitable in the process.
IMPLICATIONS OF THE FOUR TRANSFORMATIONS
1. The War in Iraq
In some ways, the war is going very well. Afghanistan and Iraq have the beginnings of a modern government, which is a huge step forward. The Saudis are starting to talk about some good things, while Egypt and Lebanon are beginning to move in a good direction. A series of revolutions have taken place in countries like Ukraine and Georgia.
There will be more of these revolutions for an interesting reason. In every revolution, there comes a point where the dictator turns to the general and says, Fire into the crowd. If the general fires into the crowd, it stops the revolution. If the general says No, the revolution continues. Increasingly, the generals are saying No because their kids are in the crowd.
Thanks to TV and the Internet, the average 18-year old outside the U.S. is very savvy about what is going on in the world, especially in terms of popular culture. There is a huge global consciousness, and young people around the world want to be a part of it. It is increasingly apparent to them that the miserable government where they live is the only thing standing in their way. More and more, it is the well-educated kids, the children of the generals and the elite, who are leading the revolutions.
At the same time, not all is well with the war. The level of violence in Iraq is much worse and doesn't appear to be improving. It's possible that we're asking too much of Islam all at one time. We're trying to jolt them from the 7th century to the 21st century all at once, which may be further than they can go. They might make it and they might not.
Nobody knows for sure. The point is, we don't know how the war will turn out. Anyone who says they know is just guessing.
The real place to watch is Iran. If they actually obtain nuclear weapons it will be a terrible situation. There are two ways to deal with it. The first is a military strike, which will be very difficult. The Iranians have dispersed their nuclear development facilities and put them underground. The U.S. has nuclear weapons that can go under the earth and take out those facilities, but we don't want to do that.
The other way is to separate the radical mullahs from the government, which is the most likely course of action. Seventy percent of the Iranian population is under 30. They are Moslem but not Arab. They are mostly pro-Western. Many experts think the U.S. should have dealt with Iran before going to war with Iraq. The problem isn't so much the weapons, it's the people who control them. If Iran has a moderate government, the weapons become less of a concern.
We don't know if we will win the war in Iraq. We could lose or win. What we're looking for is any indicator that Islam is moving into the 21st century and stabilizing.
2. China
It may be that pushing 500 million people from farms and villages into cities is too much too soon. Although it gets almost no publicity, China is experiencing hundreds of demonstrations around the country, which is unprecedented. These are not students in Tiananmen Square. These are average citizens who are angry with the government for building chemical plants and polluting the water they drink and the air
they breathe.
The Chinese are a smart and industrious people. They may be able to pull it off and become a very successful economic and military superpower. If so, we will have to learn to live with it. If they want to share the responsibility of keeping the world's oil lanes open, that's a good thing. They currently have eight new nuclear electric power generators under way and 45 on the books to build. Soon, they will leave the U.S. way behind in their ability to generate nuclear power.
What can go wrong with China? For one, you can't move 550 million people into the cities without major problems. Two, China really wants Taiwan, not so much for economic reasons, they just want it. The Chinese know that their system of communism can't survive much longer in the 21st century. The last thing they want to do before they morph into some sort of more capitalistic government is to take over Taiwan.
We may wake up one morning and find they have launched an attack on Taiwan. If so, it will be a mess, both economically and militarily. The U.S. has committed to the military defense of Taiwan. If China attacks Taiwan, will we really go to war against them? If the Chinese generals believe the answer is no, they may attack. If we don't defend Taiwan, every treaty the U.S. has will be worthless. Hopefully, China won't do anything stupid.
3. Demographics
Europe and Japan are dying because their populations are aging and shrinking. These trends can be reversed if the young people start breeding. However, the birth rates in these areas are so low it will take two generations to turn things around. No economic model exists that permits 50 years to turn things around. Some countries are beginning to offer incentives for people to have bigger families. For example, Italy is offering tax breaks for having children. However, it's a lifestyle issue versus a tiny amount of money. Europeans aren't willing to give up their comfortable lifestyles in order to have more children.
In general, everyone in Europe just wants it to last a while longer. Europeans have a real talent for living. They don't want to work very hard. The average European worker gets 400 more hours of vacation time per year than Americans. They don't want to work and they don't want to make any of the changes needed to revive their economies.
The summer after 9/11, France lost 15,000 people in a heat wave. In August, the country basically shuts down when everyone goes on vacation.
That year, a severe heat wave struck and 15,000 elderly people living in nursing homes and hospitals died. Their children didn't even leave the beaches to come back and take care of the bodies. Institutions had to scramble to find enough refrigeration units to hold the bodies until people came to claim them. This loss of life was five times bigger than 9/11 in America, yet it didn't trigger any change in French society.
When birth rates are so low, it creates a tremendous tax burden on the young. Under those circumstances, keeping mom and dad alive is not an attractive option. That's why euthanasia is becoming so popular in most European countries. The only country that doesn't permit (and even encourage) euthanasia is Germany, because of all the baggage from World War II.
The European economy is beginning to fracture. Countries like Italy are starting to talk about pulling out of the European Union because it is killing them. When things get bad economically in Europe, they tend to get very nasty politically. The canary in the mine is anti-Semitism.
When it goes up, it means trouble is coming. Current levels of anti-Semitism are higher than ever.
Germany won't launch another war, but Europe will likely get shabbier, more dangerous and less pleasant to live in. Japan has a birth rate of 1.3 and has no intention of bringing in immigrants. By 2020, one out of every five Japanese will be 70 years old. Property values in Japan have dropped every year for the past 14 years. The country is simply shutting down. In the U.S. we also have an aging population. Boomers are starting to retire at a massive rate. These retirements will have several major impacts:
Possible massive selloff of large four-bedroom houses and a movement to condos.
An enormous drain on the treasury. Boomers vote, and they want their benefits, even if it means putting a crushing tax burden on their kids to get them. Social Security will be a huge problem. As this generation ages, it will start to drain the system. We are the only country in the world where there are no age limits on medical procedures.
An enormous drain on the health care system. This will also increase the tax burden on the young, which will cause them to delay marriage and having families, which will drive down the birth rate even further.
Although scary, these demographics also present enormous opportunities for products and services tailored to aging populations. There will be tremendous demand for caring for older people, especially those who don't need nursing homes but need some level of care. Some people will have a business where they take care of three or four people in their homes. The demand for that type of service and for products to physically care for aging people will be huge.
Make sure the demographics of your business are attuned to where the action is. For example, you don't want to be a baby food company in Europe or Japan. Demographics are much underrated as an indicator of where the opportunities are. Businesses need customers. Go where the customers are.
4. Restructuring of American Business
The restructuring of American business means we are coming to the end of the age of the employer and employee. With all this fracturing of businesses into different and smaller units, employers can't guarantee jobs anymore because they don't know what their companies will look like next year. Everyone is on their way to becoming an independent contractor.
The new workforce contract will be: Show up at the my office five days a week and do what I want you to do, but you handle your own insurance, benefits, health care and everything else. Husbands and wives are becoming economic units. They take different jobs and work different shifts depending on where they are in their careers and families. They make tradeoffs to put together a compensation package to take care of the family.
This used to happen only with highly educated professionals with high incomes. Now it is happening at the level of the factory floor worker.
Couples at all levels are designing their compensation packages based on their individual needs. The only way this can work is if everything is portable and flexible, which requires a huge shift in the American economy.
The U.S is in the process of building the world's first 21st century model economy. The only other countries doing this are U.K. and Australia. The model is fast, flexible, highly productive and unstable in that it is always fracturing and re-fracturing. This will increase the economic gap between the U.S. and everybody else, especially Europe and Japan.
At the same time, the military gap is increasing. Other than China, we are the only country that is continuing to put money into their military. Plus, we are the only military getting on-the-ground military experience through our war in Iraq. We know which high-tech weapons are working and which ones aren't. There is almost no one who can take us on economically or militarily.
There has never been a superpower in this position before. On the one hand, this makes the U.S. a magnet for bright and ambitious people. It also makes us a target. We are becoming one of the last holdouts of the traditional Judeo-Christian culture. There is no better place in the world to be in business and raise children. The U.S. is by far the best place to have an idea, form a business and put it into the marketplace.
We take it for granted, but it isn't as available in other countries of the world. Ultimately, it's an issue of culture. The only people who can hurt us are ourselves, by losing our culture. If we give up our Judeo-Christian culture, we become just like the Europeans.
The culture war is the whole ballgame. If we lose it, there isn't another America to pull us out.
Meyer served during the Reagan administration as special assistant to the Director of Central Intelligence and Vice Chairman of the CIA's National Intelligence Council. In these positions, he managed production of the U.S. National Intelligence Estimates and other top-secret projections for the President and his national security advisers.
Meyer is widely credited with being the first senior U.S.Government official to forecast the Soviet Union's collapse, for which he later was awarded the U.S.National Intelligence Distinguished Service Medal, the intelligence community's highest honor. Formerly an associate editor of FORTUNE, he is also the author of several books.
WHAT IN THE WORLD IS GOING ON? A GLOBAL INTELLIGENCE BRIEFING FOR CEOs
by HERBERT MEYER
FOUR MAJOR TRANSFORMATIONS
Currently, there are four major transformations that are shaping political, economic and world events. These transformations have profound implications for American business leaders and owners, our culture and on our way of life.
1. The War in Iraq
There are three major monotheistic religions in the world: Christianity, Judaism and Islam. In the 16th century, Judaism and Christianity reconciled with the modern world. The rabbis, priests and scholars found a way to settle up and pave the way forward. Religion remained at the center of life, church and state became separate. Rule of law, idea of economic liberty, individual rights, human Rights-all these are defining points of modern Western civilization. These concepts started with the Greeks but didn't take off until the 15th and 16th century when Judaism and Christianity found a way to reconcile with the modern world. When that happened, it unleashed the scientific revolution and the greatest outpouring of art, literature and music the world has ever known.
Islam, which developed in the 7th century, counts millions of Moslems around the world who are normal people. However, there is a radical streak within Islam. When the radicals are in charge, Islam attacks Western civilization. Islam first attacked Western civilization in the 7th century, and later in the 16th and 17th centuries. By 1683, the Moslems (Turks from the Ottoman Empire) were literally at the gates of Vienna. It was in Vienna that the climatic battle between Islam and Western civilization took place. The West won and went forward. Islam lost and went backward. Interestingly, the date of that battle was September 11. Since them, Islam has not found a way to reconcile with the modern world.
Today, terrorism is the third attack on Western civilization by radical Islam. To deal with terrorism, the U.S. is doing two things. First, units of our armed forces are in 30 countries around the world hunting down terrorist groups and dealing with them. This gets very little publicity. Second we are taking military action in Afghanistan and Iraq.
These actions are covered relentlessly by the media. People can argue about whether the war in Iraq is right or wrong. However, the underlying strategy behind the war is to use our military to remove the radicals from power and give the moderates a chance. Our hope is that, over time, the moderates will find a way to bring Islam forward into the 21st century. That's what our involvement in Iraq and Afghanistan is all about.
The lesson of 9/11 is that we live in a world where a small number of people can kill a large number of people very quickly. They can use airplanes, bombs, anthrax, chemical weapons or dirty bombs. Even with a first-rate intelligence service (which the U.S. does not have), you can't stop every attack. That means our tolerance for political horseplay has dropped to zero. No longer will we play games with terrorists or weapons of mass destructions.
Most of the instability and horseplay is coming from the Middle East. That's why we have thought that if we could knock out the radicals and give the moderates a chance to hold power, they might find a way to reconcile Islam with the modern world. So when looking at Afghanistan or Iraq, it's important to look for any signs that they are modernizing.
For example, women being brought into the work force and colleges in Afghanistan is good. The Iraqis stumbling toward a constitution is good.
People can argue about what the U.S. is doing and how we're doing it but anything that suggests Islam is finding its way forward is good.
2. The Emergence of China
In the last 20 years, China has moved 250 million people from the farms and villages into the cities. Their plan is to move another 300 million in the next 20 years. When you put that many people into the cities, you have to find work for them. That's why China is addicted to manufacturing; they have to put all the relocated people to work. When we decide to manufacture something in the U.S., it's based on market needs and the opportunity to make a profit. In China, they make the decision because they want the jobs, which is a very different calculation.
While China is addicted to manufacturing, Americans are addicted to low prices. As a result, a unique kind of economic codependency has developed between the two countries. If we ever stop buying from China, they will explode politically. If China stops selling to us, our economy will take a huge hit because prices will jump. We are subsidizing their economic development; they are subsidizing our economic growth.
Because of their huge growth in manufacturing, China is hungry for raw materials, which drives prices up worldwide. China is also thirsty for oil, which is one reason oil is now over $100 a barrel. By 2020, China will produce more cars than the U.S. China is also buying its way into the oil infrastructure around the world. They are doing it in the open market and paying fair market prices, but millions of barrels of oil that would have gone to the U.S. are now going to China. China's quest to assure it has the oil it needs to fuel its economy is a major factor in world politics and economics.
We have our Navy fleets protecting the sea lines, specifically the ability to get the tankers through. It won't be long before the Chinese have an aircraft carrier sitting in the Persian Gulf as well. The question is, will their aircraft carrier be pointing in the same direction as ours or against us?
3. Shifting Demographics of Western Civilization
Most countries in the Western world have stopped breeding. For a civilization obsessed with sex, this is remarkable. Maintaining a steady population requires a birth rate of 2.1 In Western Europe, the birth rate currently stands at 1.5, or 30 percent below replacement. In 30 years there will be 70 to 80 million fewer Europeans than there are today. The current birth rate in Germany is 1.3. Italy and Spain are even lower at 1.2. At that rate, the working age population declines by 30 percent in 20 years, which has a huge impact on the economy. When you don't have young workers to replace the older ones, you have to import them.
The European countries are currently importing Moslems. Today, the Moslems comprise 10 percent of France and Germany, and the percentage is rising rapidly because they have higher birthrates. However, the Moslem populations are not being integrated into the cultures of their host countries, which is a political catastrophe. One reason Germany and France don't support the Iraq war is they fear their Moslem populations will explode on them. By 2020, more than half of all births in the Netherlands will be non-European.
The huge design flaw in the postmodern secular state is that you need a traditional religious society birth rate to sustain it. The Europeans simply don't wish to have children, so they are dying. In Japan, the birthrate is 1.3. As a result, Japan will lose up to 60 million people over the next 30 years. Because Japan has a very different society than Europe, they refuse to import workers. Instead, they are just shutting down. Japan has already closed 2,000 schools, and is closing them down at the rate of 300 per year. Japan is also aging very rapidly. By 2020, one out of every five Japanese will be at least 70 years old. Nobody has any idea about how to run an economy with those demographics.
Europe and Japan, which comprise two of the world's major economic engines, aren't merely in recession, they're shutting down. This will have a huge impact on the world economy, and it is already beginning to happen. Why are the birthrates so low? There is a direct correlation between abandonment of traditional religious society and a drop in birth rate, and Christianity in Europe is becoming irrelevant.
The second reason is economic. When the birth rate drops below replacement, the population ages. With fewer working people to support more retired people, it puts a crushing tax burden on the smaller group of working age people. As a result, young people delay marriage and having a family. Once this trend starts, the downward spiral only gets worse. These countries have abandoned all the traditions they formerly held in regard to having families and raising children.
The U.S. birth rate is 2.0, just below replacement. We have an increase in population because of immigration. When broken down by ethnicity, the Anglo birth rate is 1.6 (same as France) while the Hispanic birth rate is 2.7. In the U.S., the baby boomers are starting to retire in massive numbers. This will push the elder dependency ratio from 19 to 38 over the next 10 to 15 years. This is not as bad as Europe, but still represents the same kind of trend.
Western civilization seems to have forgotten what every primitive society understands-you need kids to have a healthy society. Children are huge consumers. Then they grow up to become taxpayers. That's how a society works, but the postmodern secular state seems to have forgotten that. If U.S. birth rates of the past 20 to 30 years had been the same as post-World War II, there would be no Social Security or Medicare problems.
The world's most effective birth control device is money. [I love this line!!] As society creates a middle class and women move into the workforce, birth rates drop. Having large families is incompatible with middle class living.
The quickest way to drop the birth rate is through rapid economic development. After World War II, the U.S. instituted a $600 tax credit per child. The idea was to enable mom and dad to have four children without being troubled by taxes. This led to a baby boom of 22 million kids, which was a huge consumer market. That turned into a huge tax base. However, to match that incentive in today's dollars would cost $12,000 per child.
China and India do not have declining populations. However, in both countries, there is a preference for boys over girls, and we now have the technology to know which is which before they are born. In China and India, families are aborting the girls. As a result, in each of these countries there are 70 million boys growing up who will never find wives. When left alone, nature produces 103 boys for every 100 girls. In some provinces, however, the ratio is 128 boys to every 100 girls. [I have read that this creates a potentially explosive situation. You have to keep all these potential sources of political instability contented. One way, historically often used, is war.]
The birth rate in Russia is so low that by 2050 their population will be smaller than that of Yemen. Russia has one-sixth of the earth's land surface and much of its oil. You can't control that much area with such a small population. Immediately to the south, you have China with 70 million unmarried men who are a real potential nightmare scenario for Russia.
4. Restructuring of American Business
The fourth major transformation involves a fundamental restructuring of American business. Today's business environment is very complex and competitive. To succeed, you have to be the best, which means having the highest quality and lowest cost. Whatever your price point, you must have the best quality and lowest price. To be the best, you have to concentrate on one thing. You can't be all things to all people and be the best.
A generation ago, IBM used to make every part of their computer. Now Intel makes the chips, Microsoft makes the software, and someone else makes the modems, hard drives, monitors, etc. IBM even out sources their call center. Because IBM has all these companies supplying goods and services cheaper and better than they could do it themselves, they can make a better computer at a lower cost. This is called a fracturing of business. When one company can make a better product by relying on others to perform functions the business used to do itself, it creates a complex pyramid of companies that serve and support each other.
This fracturing of American business is now in its second generation. The companies who supply IBM are now doing the same thing - outsourcing many of their core services and production process. As a result, they can make cheaper, better products. Over time, this pyramid continues to get bigger and bigger. Just when you think it can't fracture again, it does.
Even very small businesses can have a large pyramid of corporate entities that perform many of its important functions. One aspect of this trend is that companies end up with fewer employees and more independent contractors. This trend has also created two new words in business, integrator and complementor. At the top of the pyramid, IBM is the integrator. As you go down the pyramid, Microsoft, Intel and the other companies that support IBM are the complementors. However, each of the complementors is itself an integrator for the complementors underneath it.
This has several implications, the first of which is that we are now getting false readings on the economy. People who used to be employees are now independent contractors launching their own businesses. There are many people working whose work is not listed as a job. As a result, the economy is perking along better than the numbers are telling us.
Outsourcing also confused the numbers. Suppose a company like General Motors decides to outsource all its employee cafeteria functions to Marriott (which it did). It lays off hundreds of cafeteria workers, who then get hired right back by Marriott. The only thing that has changed is that these people work for Marriott rather than GM. Yet, the media headlines will scream that America has lost more manufacturing jobs.
All that really happened is that these workers are now reclassified as service workers. So the old way of counting jobs contributes to false economic readings. As yet, we haven't figured out how to make the
numbers catch up with the changing realities of the business world.
Another implication of this massive restructuring is that because companies are getting rid of units and people that used to work for them, the entity is smaller. As the companies get smaller and more
efficient, revenues are going down but profits are going up. As a result, the old notion that revenues are up and we're doing great isn't always the case anymore. Companies are getting smaller but are becoming more efficient and profitable in the process.
IMPLICATIONS OF THE FOUR TRANSFORMATIONS
1. The War in Iraq
In some ways, the war is going very well. Afghanistan and Iraq have the beginnings of a modern government, which is a huge step forward. The Saudis are starting to talk about some good things, while Egypt and Lebanon are beginning to move in a good direction. A series of revolutions have taken place in countries like Ukraine and Georgia.
There will be more of these revolutions for an interesting reason. In every revolution, there comes a point where the dictator turns to the general and says, Fire into the crowd. If the general fires into the crowd, it stops the revolution. If the general says No, the revolution continues. Increasingly, the generals are saying No because their kids are in the crowd.
Thanks to TV and the Internet, the average 18-year old outside the U.S. is very savvy about what is going on in the world, especially in terms of popular culture. There is a huge global consciousness, and young people around the world want to be a part of it. It is increasingly apparent to them that the miserable government where they live is the only thing standing in their way. More and more, it is the well-educated kids, the children of the generals and the elite, who are leading the revolutions.
At the same time, not all is well with the war. The level of violence in Iraq is much worse and doesn't appear to be improving. It's possible that we're asking too much of Islam all at one time. We're trying to jolt them from the 7th century to the 21st century all at once, which may be further than they can go. They might make it and they might not.
Nobody knows for sure. The point is, we don't know how the war will turn out. Anyone who says they know is just guessing.
The real place to watch is Iran. If they actually obtain nuclear weapons it will be a terrible situation. There are two ways to deal with it. The first is a military strike, which will be very difficult. The Iranians have dispersed their nuclear development facilities and put them underground. The U.S. has nuclear weapons that can go under the earth and take out those facilities, but we don't want to do that.
The other way is to separate the radical mullahs from the government, which is the most likely course of action. Seventy percent of the Iranian population is under 30. They are Moslem but not Arab. They are mostly pro-Western. Many experts think the U.S. should have dealt with Iran before going to war with Iraq. The problem isn't so much the weapons, it's the people who control them. If Iran has a moderate government, the weapons become less of a concern.
We don't know if we will win the war in Iraq. We could lose or win. What we're looking for is any indicator that Islam is moving into the 21st century and stabilizing.
2. China
It may be that pushing 500 million people from farms and villages into cities is too much too soon. Although it gets almost no publicity, China is experiencing hundreds of demonstrations around the country, which is unprecedented. These are not students in Tiananmen Square. These are average citizens who are angry with the government for building chemical plants and polluting the water they drink and the air
they breathe.
The Chinese are a smart and industrious people. They may be able to pull it off and become a very successful economic and military superpower. If so, we will have to learn to live with it. If they want to share the responsibility of keeping the world's oil lanes open, that's a good thing. They currently have eight new nuclear electric power generators under way and 45 on the books to build. Soon, they will leave the U.S. way behind in their ability to generate nuclear power.
What can go wrong with China? For one, you can't move 550 million people into the cities without major problems. Two, China really wants Taiwan, not so much for economic reasons, they just want it. The Chinese know that their system of communism can't survive much longer in the 21st century. The last thing they want to do before they morph into some sort of more capitalistic government is to take over Taiwan.
We may wake up one morning and find they have launched an attack on Taiwan. If so, it will be a mess, both economically and militarily. The U.S. has committed to the military defense of Taiwan. If China attacks Taiwan, will we really go to war against them? If the Chinese generals believe the answer is no, they may attack. If we don't defend Taiwan, every treaty the U.S. has will be worthless. Hopefully, China won't do anything stupid.
3. Demographics
Europe and Japan are dying because their populations are aging and shrinking. These trends can be reversed if the young people start breeding. However, the birth rates in these areas are so low it will take two generations to turn things around. No economic model exists that permits 50 years to turn things around. Some countries are beginning to offer incentives for people to have bigger families. For example, Italy is offering tax breaks for having children. However, it's a lifestyle issue versus a tiny amount of money. Europeans aren't willing to give up their comfortable lifestyles in order to have more children.
In general, everyone in Europe just wants it to last a while longer. Europeans have a real talent for living. They don't want to work very hard. The average European worker gets 400 more hours of vacation time per year than Americans. They don't want to work and they don't want to make any of the changes needed to revive their economies.
The summer after 9/11, France lost 15,000 people in a heat wave. In August, the country basically shuts down when everyone goes on vacation.
That year, a severe heat wave struck and 15,000 elderly people living in nursing homes and hospitals died. Their children didn't even leave the beaches to come back and take care of the bodies. Institutions had to scramble to find enough refrigeration units to hold the bodies until people came to claim them. This loss of life was five times bigger than 9/11 in America, yet it didn't trigger any change in French society.
When birth rates are so low, it creates a tremendous tax burden on the young. Under those circumstances, keeping mom and dad alive is not an attractive option. That's why euthanasia is becoming so popular in most European countries. The only country that doesn't permit (and even encourage) euthanasia is Germany, because of all the baggage from World War II.
The European economy is beginning to fracture. Countries like Italy are starting to talk about pulling out of the European Union because it is killing them. When things get bad economically in Europe, they tend to get very nasty politically. The canary in the mine is anti-Semitism.
When it goes up, it means trouble is coming. Current levels of anti-Semitism are higher than ever.
Germany won't launch another war, but Europe will likely get shabbier, more dangerous and less pleasant to live in. Japan has a birth rate of 1.3 and has no intention of bringing in immigrants. By 2020, one out of every five Japanese will be 70 years old. Property values in Japan have dropped every year for the past 14 years. The country is simply shutting down. In the U.S. we also have an aging population. Boomers are starting to retire at a massive rate. These retirements will have several major impacts:
Possible massive selloff of large four-bedroom houses and a movement to condos.
An enormous drain on the treasury. Boomers vote, and they want their benefits, even if it means putting a crushing tax burden on their kids to get them. Social Security will be a huge problem. As this generation ages, it will start to drain the system. We are the only country in the world where there are no age limits on medical procedures.
An enormous drain on the health care system. This will also increase the tax burden on the young, which will cause them to delay marriage and having families, which will drive down the birth rate even further.
Although scary, these demographics also present enormous opportunities for products and services tailored to aging populations. There will be tremendous demand for caring for older people, especially those who don't need nursing homes but need some level of care. Some people will have a business where they take care of three or four people in their homes. The demand for that type of service and for products to physically care for aging people will be huge.
Make sure the demographics of your business are attuned to where the action is. For example, you don't want to be a baby food company in Europe or Japan. Demographics are much underrated as an indicator of where the opportunities are. Businesses need customers. Go where the customers are.
4. Restructuring of American Business
The restructuring of American business means we are coming to the end of the age of the employer and employee. With all this fracturing of businesses into different and smaller units, employers can't guarantee jobs anymore because they don't know what their companies will look like next year. Everyone is on their way to becoming an independent contractor.
The new workforce contract will be: Show up at the my office five days a week and do what I want you to do, but you handle your own insurance, benefits, health care and everything else. Husbands and wives are becoming economic units. They take different jobs and work different shifts depending on where they are in their careers and families. They make tradeoffs to put together a compensation package to take care of the family.
This used to happen only with highly educated professionals with high incomes. Now it is happening at the level of the factory floor worker.
Couples at all levels are designing their compensation packages based on their individual needs. The only way this can work is if everything is portable and flexible, which requires a huge shift in the American economy.
The U.S is in the process of building the world's first 21st century model economy. The only other countries doing this are U.K. and Australia. The model is fast, flexible, highly productive and unstable in that it is always fracturing and re-fracturing. This will increase the economic gap between the U.S. and everybody else, especially Europe and Japan.
At the same time, the military gap is increasing. Other than China, we are the only country that is continuing to put money into their military. Plus, we are the only military getting on-the-ground military experience through our war in Iraq. We know which high-tech weapons are working and which ones aren't. There is almost no one who can take us on economically or militarily.
There has never been a superpower in this position before. On the one hand, this makes the U.S. a magnet for bright and ambitious people. It also makes us a target. We are becoming one of the last holdouts of the traditional Judeo-Christian culture. There is no better place in the world to be in business and raise children. The U.S. is by far the best place to have an idea, form a business and put it into the marketplace.
We take it for granted, but it isn't as available in other countries of the world. Ultimately, it's an issue of culture. The only people who can hurt us are ourselves, by losing our culture. If we give up our Judeo-Christian culture, we become just like the Europeans.
The culture war is the whole ballgame. If we lose it, there isn't another America to pull us out.
Tuesday, May 13, 2008
New Israeli security system will read terrorists' minds
New Israeli security system will read terrorists' minds
An Israeli technology firm established in 2003 with the express purpose of developing a system to identify individuals intent on causing mayhem is close to releasing a deployable product.
WeCu (text messaging lingo for "we see you") was set up by leading Israeli researchers at the height of the Palestinian suicide bombing campaign in order to find a technological solution to Israel's growing security problems.
The company's new system, as reported by Ha'retz, can be set up in public areas where it would quietly and quickly scan people without their knowledge. The system uses biometric sensors to determine if an individual is planning to carry out a terror attack, even if the suspect is not carrying a bomb or other weapons at that time. Many terrorists case their targets at least once before carrying out an attack.
If successful, the system would greatly ease the pressure on Israel's security forces and private security firms hired to protect public and private establishments from schools to cafes.
An Israeli technology firm established in 2003 with the express purpose of developing a system to identify individuals intent on causing mayhem is close to releasing a deployable product.
WeCu (text messaging lingo for "we see you") was set up by leading Israeli researchers at the height of the Palestinian suicide bombing campaign in order to find a technological solution to Israel's growing security problems.
The company's new system, as reported by Ha'retz, can be set up in public areas where it would quietly and quickly scan people without their knowledge. The system uses biometric sensors to determine if an individual is planning to carry out a terror attack, even if the suspect is not carrying a bomb or other weapons at that time. Many terrorists case their targets at least once before carrying out an attack.
If successful, the system would greatly ease the pressure on Israel's security forces and private security firms hired to protect public and private establishments from schools to cafes.
Monday, May 12, 2008
How Syria hid its nukes
With forty 'developing countries' seeking nuclear capabilities (only for civilian energy purposes of course /sarc), the Washington Post reports today on how the Syrians managed to hide the construction of a nuclear plant from the world almost until the very end (Hat Tip: Hot Air).
U.S. and Israeli officials have said the facility was a nearly completed nuclear reactor built with North Korean help and fitted with a false roof and walls that altered its shape when viewed from above.
According to the ISIS report to be released this week, the fake roof was just the start. Syrian engineers went to "astonishing lengths" to hide cooling and ventilation systems, power lines and other features that normally are telltale signs of a nuclear reactor, authors David Albright and Paul Brannan wrote.
For example, the main building appears small and shallow from the air, but it was evidently built over large underground chambers -- tens of meters in depth -- that were large enough to house the nuclear reactor, as well as a reserve water-storage tank and pools for spent fuel rods, the report said.
An extensive network of electrical lines appears to have been buried in trenches. Traditional water-cooling towers were replaced with an elaborate underground system that discharged into the Euphrates River. And, instead of using smokestack-like ventilation towers prominent at many reactor sites, the ventilation system appears to have been built along the walls of the building, with louver openings not visible from the air, the authors contended.
The ISIS report noted that early skepticism that Syria was building a reactor there was based partly on the observable absence of revealing features. "The current domestic and international capabilities to detect nuclear facilities and activities are not adequate to prevent more surprises in the future," the report warned.
Albright, a former U.N. weapons inspector, said his conclusions were based not only on photographs of the Syrian site but also on interviews with government officials who closely monitored the facility while it was under construction.
By the way, those forty countries aren't going to come as a surprise to most of you. Many of them are right here in this region:
Although the United Arab Emirates has a proven oil reserve of 100 billion barrels, the world's sixth-largest, in January it signed a deal with a French company to build two nuclear reactors. Wealthy neighbors Kuwait and Bahrain are also planning nuclear plants, as are Libya, Algeria and Morocco in North Africa and the kingdom of Jordan.
Even Yemen, one of the poorest countries in the Arab world, last year announced plans to purchase a nuclear reactor, which it says is needed to produce electricity; it is one of 11 Middle Eastern states now engaged in starting or expanding nuclear power programs.
Meanwhile, two of Iran's biggest rivals in the region, Turkey and Egypt, are moving forward with ambitious nuclear projects. Both countries abandoned any pursuit of nuclear power decades ago but are now on course to develop seven nuclear power plants -- four in Egypt and three in Turkey -- over the next decade.
...
"Why would these Gulf states want to go nuclear? Because they know their oil will only become more valuable as global demand increases," McDonald said. "It may be more cost-effective to sell oil to Americans driving SUVs than to burn it domestically."
You've got to be kidding. The amount of oil those countries use domestically is minimal compared with the amount of power a nuclear plant can produce.
But nuclear power can give a country the technological expertise and infrastructure that could become the foundation for a clandestine weapons program.
Such covert programs can be successfully hidden for years, as was demonstrated in recent months by U.S. and Israeli allegations that Syria was building a secret plutonium production reactor near the desert town of Al Kibar. Plutonium is an efficient fuel for nuclear explosions, as well as for power generation.
Both India and Pakistan built nuclear devices using an industrial infrastructure built ostensibly for nuclear power. Taiwan and South Korea conducted weapons research under cover of civil power programs but halted the work after being confronted by the United States.
Gee, ya think? Why would all those Persian Gulf countries want nuclear weapons? I wonder....
U.S. and Israeli officials have said the facility was a nearly completed nuclear reactor built with North Korean help and fitted with a false roof and walls that altered its shape when viewed from above.
According to the ISIS report to be released this week, the fake roof was just the start. Syrian engineers went to "astonishing lengths" to hide cooling and ventilation systems, power lines and other features that normally are telltale signs of a nuclear reactor, authors David Albright and Paul Brannan wrote.
For example, the main building appears small and shallow from the air, but it was evidently built over large underground chambers -- tens of meters in depth -- that were large enough to house the nuclear reactor, as well as a reserve water-storage tank and pools for spent fuel rods, the report said.
An extensive network of electrical lines appears to have been buried in trenches. Traditional water-cooling towers were replaced with an elaborate underground system that discharged into the Euphrates River. And, instead of using smokestack-like ventilation towers prominent at many reactor sites, the ventilation system appears to have been built along the walls of the building, with louver openings not visible from the air, the authors contended.
The ISIS report noted that early skepticism that Syria was building a reactor there was based partly on the observable absence of revealing features. "The current domestic and international capabilities to detect nuclear facilities and activities are not adequate to prevent more surprises in the future," the report warned.
Albright, a former U.N. weapons inspector, said his conclusions were based not only on photographs of the Syrian site but also on interviews with government officials who closely monitored the facility while it was under construction.
By the way, those forty countries aren't going to come as a surprise to most of you. Many of them are right here in this region:
Although the United Arab Emirates has a proven oil reserve of 100 billion barrels, the world's sixth-largest, in January it signed a deal with a French company to build two nuclear reactors. Wealthy neighbors Kuwait and Bahrain are also planning nuclear plants, as are Libya, Algeria and Morocco in North Africa and the kingdom of Jordan.
Even Yemen, one of the poorest countries in the Arab world, last year announced plans to purchase a nuclear reactor, which it says is needed to produce electricity; it is one of 11 Middle Eastern states now engaged in starting or expanding nuclear power programs.
Meanwhile, two of Iran's biggest rivals in the region, Turkey and Egypt, are moving forward with ambitious nuclear projects. Both countries abandoned any pursuit of nuclear power decades ago but are now on course to develop seven nuclear power plants -- four in Egypt and three in Turkey -- over the next decade.
...
"Why would these Gulf states want to go nuclear? Because they know their oil will only become more valuable as global demand increases," McDonald said. "It may be more cost-effective to sell oil to Americans driving SUVs than to burn it domestically."
You've got to be kidding. The amount of oil those countries use domestically is minimal compared with the amount of power a nuclear plant can produce.
But nuclear power can give a country the technological expertise and infrastructure that could become the foundation for a clandestine weapons program.
Such covert programs can be successfully hidden for years, as was demonstrated in recent months by U.S. and Israeli allegations that Syria was building a secret plutonium production reactor near the desert town of Al Kibar. Plutonium is an efficient fuel for nuclear explosions, as well as for power generation.
Both India and Pakistan built nuclear devices using an industrial infrastructure built ostensibly for nuclear power. Taiwan and South Korea conducted weapons research under cover of civil power programs but halted the work after being confronted by the United States.
Gee, ya think? Why would all those Persian Gulf countries want nuclear weapons? I wonder....
Thursday, May 1, 2008
Chinese build secret nuclear submarine base
By Thomas Harding, Defence Correspondent
Last updated: 3:32 PM BST 01/05/2008
China has secretly built a major underground nuclear submarine base that could threaten Asian countries and challenge American power in the region, it can be disclosed.
Satellite imagery, passed to The Daily Telegraph, shows that a substantial harbour has been built which could house a score of nuclear ballistic missile submarines and a host of aircraft carriers.
* Satellite image of the harbour: click to enlarge
In what will be a significant challenge to US Navy dominance and to countries ringing the South China Sea, one photograph shows China’s latest 094 nuclear submarine at the base just a few hundred miles from its neighbours.
Other images show numerous warships moored to long jettys and a network of underground tunnels at the Sanya base on the southern tip of Hainan island.
Of even greater concern to the Pentagon are massive tunnel entrances, estimated to be 60ft high, built into hillsides around the base. Sources fear they could lead to caverns capable of hiding up to 20 nuclear submarines from spy satellites.
The US Department of Defence has estimated that China will have five 094 nuclear submarines operational by 2010 with each capable of carrying 12 JL-2 nuclear missiles.
The images were obtained by Janes Intelligence Review after the periodical was given access to imagery from the commercial satellite company DigitalGlobe.
Analysts for the respected military magazine suggest that the base could be used for "expeditionary as well as defensive operations" and would allow the submarines to "break out to launch locations closer to the US".
It would now be "difficult to ignore" that China was building a major naval base where it could house its nuclear forces and increase it "strategic capability considerably further afield".
The development so close to the sea lanes vital to Asian economies "can only cause concern far beyond these straits".
Military analysts believe that China’s substantial build up of its forces is gaining pace put has remained hidden from the world in the build-up to the Olympics.
China has diverted much of its resources from the huge Peoples Liberation Army to the navy, air force and missile development.
An old Russian aircraft carrier, bought by Beijing for "leisure activities" has been picked over by naval architects who hope to "reverse engineer" the ship.
Within the next five to 10 years the Peoples Liberation Navy is expected to build up to six carriers which will also coincide with the Royal Navy’s construction of two major carriers.
The location of the base off Hainan will also give the submarines access to very deep water exceeding 5,000 metres within a few miles, making them even harder to detect.
Britain’s Trident submarines have to remain on the surface when they leave Faslane in north east Scotland and cannot dive to depth until outside the Irish Sea.
While it has been known that China might be developing an underground base at Sanya, the pictures provide the first proof of the base’s existence and the rapid progress made.
Two 950 metre piers and three smaller ones would be enough to accommodate two carrier strike groups or amphibious assault ships.
Christian Le Miere, editor for Jane's Intelligence Review, said the complex underlined Beijing’s plan “to assert tighter control over this region".
"This is a challenge to any hegemonic power, particularly the US which still remains dominant in the region."
So far China has offered no public explanation for its building at Sanya.
Last updated: 3:32 PM BST 01/05/2008
China has secretly built a major underground nuclear submarine base that could threaten Asian countries and challenge American power in the region, it can be disclosed.
Satellite imagery, passed to The Daily Telegraph, shows that a substantial harbour has been built which could house a score of nuclear ballistic missile submarines and a host of aircraft carriers.
* Satellite image of the harbour: click to enlarge
In what will be a significant challenge to US Navy dominance and to countries ringing the South China Sea, one photograph shows China’s latest 094 nuclear submarine at the base just a few hundred miles from its neighbours.
Other images show numerous warships moored to long jettys and a network of underground tunnels at the Sanya base on the southern tip of Hainan island.
Of even greater concern to the Pentagon are massive tunnel entrances, estimated to be 60ft high, built into hillsides around the base. Sources fear they could lead to caverns capable of hiding up to 20 nuclear submarines from spy satellites.
The US Department of Defence has estimated that China will have five 094 nuclear submarines operational by 2010 with each capable of carrying 12 JL-2 nuclear missiles.
The images were obtained by Janes Intelligence Review after the periodical was given access to imagery from the commercial satellite company DigitalGlobe.
Analysts for the respected military magazine suggest that the base could be used for "expeditionary as well as defensive operations" and would allow the submarines to "break out to launch locations closer to the US".
It would now be "difficult to ignore" that China was building a major naval base where it could house its nuclear forces and increase it "strategic capability considerably further afield".
The development so close to the sea lanes vital to Asian economies "can only cause concern far beyond these straits".
Military analysts believe that China’s substantial build up of its forces is gaining pace put has remained hidden from the world in the build-up to the Olympics.
China has diverted much of its resources from the huge Peoples Liberation Army to the navy, air force and missile development.
An old Russian aircraft carrier, bought by Beijing for "leisure activities" has been picked over by naval architects who hope to "reverse engineer" the ship.
Within the next five to 10 years the Peoples Liberation Navy is expected to build up to six carriers which will also coincide with the Royal Navy’s construction of two major carriers.
The location of the base off Hainan will also give the submarines access to very deep water exceeding 5,000 metres within a few miles, making them even harder to detect.
Britain’s Trident submarines have to remain on the surface when they leave Faslane in north east Scotland and cannot dive to depth until outside the Irish Sea.
While it has been known that China might be developing an underground base at Sanya, the pictures provide the first proof of the base’s existence and the rapid progress made.
Two 950 metre piers and three smaller ones would be enough to accommodate two carrier strike groups or amphibious assault ships.
Christian Le Miere, editor for Jane's Intelligence Review, said the complex underlined Beijing’s plan “to assert tighter control over this region".
"This is a challenge to any hegemonic power, particularly the US which still remains dominant in the region."
So far China has offered no public explanation for its building at Sanya.
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