Militia comeback fear haunts Basra
 Most of the 4,100 UK troops in Iraq may be gone next year |
BBC Baghdad correspondent Crispin Thorold asks if Iraq's economic powerhouse really has changed that dramatically since government operations against the Mehdi Army earlier in the year.
In the days before the British officially handed over security control of Basra to the Iraqi government the House of Commons Defence Select Committee issued a damning condemnation of the state of Iraq's second city.
The MPs argued that the British army had failed to secure Basra.
"The relative security of Basra is said to owe more to the dominance of militias and criminal gangs, who are said to have achieved a fragile balance in the city," concluded the report.
'Fragile balance'
Since then there has been a major shake-up of the power structures in Basra.
 The estimated 60,000-strong Mehdi Army was created in 2003 |
The Iraqi security forces, with strong backing from the US and to a lesser degree from the British military, removed the Shia militia, the Mehdi Army, from the streets during operations in March and April.
Iraqi army checkpoints are in place throughout the city and locals say that the black-clad gunmen who terrified an entire population are nowhere to be seen.
"Basrawis realised what a nightmare, literally, that was," said Maj Gen White-Spunner.
"[Local people] have got better things to do now with their lives and I do not see Basra coming back under militia control. Those days are passed," he added.
Strolling couples
Many of the people we have spoken to in Basra agree with much of what the British general said.
Anecdotal reports suggest that violence against women has dropped dramatically.
 Iraqi soldiers patrol Basra amid huge strides towards normal life |
Couples are walking arm-in-arm and enjoying the local parks.
In the evenings restaurants are busy and there are now regular buses to Baghdad, including overnight services.
There are even suggestions that some shops selling alcohol have quietly reopened.
"The situation in Basra is very stable," said Falih Hamood, from the Iraqi Red Crescent.
"Sunnis, Christians and other religious minorities are coming back."
Since March's military operations the Iraqi army has been operating checkpoints all over the city.
Barbers attacked
Like Baghdad's residents, Basrawis complain of the traffic jams these create, not the chaos that once dominated.
 Hidden threat? Many fear the Mehdi Army is simply waiting in the wings |
Some warn though that despite the undoubted improvements that this year has brought, there are still many reasons to remain concerned.
In the past few weeks gunmen travelling the city on motorcycles have attacked hairdressers (for shaving off men's beards) and alcohol shops.
"A few months ago some people tried to hold large parties in the city," said one young man.
"They had a band, which was playing music but they had to stop when they were attacked by the militias."
There are also fears that the provincial elections scheduled for later this year may bring political violence.
Widespread corruption
A local journalist warned that "there have already been a couple of assassination attempts against political and religious figures in Basra".
Throughout the country Iraqis argue that long-term stability can only be guaranteed when economic progress takes hold.
 The UK government says Basra is a success story |
The British government says that investors are returning to Basra encouraged by the city's strategic importance in a major oil-producing region and as Iraq's gateway to the Gulf.
But corruption is still widespread.
"All the local people have bad relations with the politicians," said a translator in the city.
"Everyone knows that they are stealing money. When the roads are resurfaced the quality [of the tarmac] is very bad. We are seeing a big robbery."
More than anything else it is the militias that most Basrawis fear.
The Iraqi security forces may be on the streets, as are American soldiers, but many local people remain convinced that one day the militias will once again control the city.
"The militias are still there, they are just hidden," said one man.
US demands Russian troop pull-out
President Saakashvili and the US secretary of state give a news conference
US Secretary of State Condoleezza Rice has demanded that Russian forces withdraw from Georgia immediately.
It comes after Georgia's president signed an EU-brokered ceasefire deal, after nearly five hours of talks.
In angry comments at a news briefing in Tbilisi, President Mikhail Saakashvili said his country would never accept the loss of any of its territory.
The crisis began when Georgia attacked the breakaway region of South Ossetia a week ago sparking Russian intervention.
Georgian forces launched a surprise attack on 7 August against separatist militiamen that it accused of attacking civilians in South Ossetia.
Scores of people have died since the fighting began and tens of thousands have been displaced.
"Cold-blooded killers"
President Saakashvili said he had signed the six-point ceasefire agreement - brokered by France - but that it was not a permanent solution.
It includes a pledge to pull all troops back to their pre-conflict positions, and a plan to begin international talks about the future status of South Ossetia and a second breakaway region, Abkhazia.
 | PEACE PLAN  No more use of force Stop all military actions for good Free access to humanitarian aid Georgian troops return to their places of permanent deployment Russian troops to return to pre-conflict positions International talks about future status of South Ossetia and Abkhazia  |
Mr Saakashvili denounced the Russian invasion, referring to its forces as "cold-blooded killers" and "barbarians" - he said that Georgia was now "looking evil directly in the eye".
He also accused the West - especially European countries - of inviting Moscow's military action by failing to offer his country Nato membership earlier this year.
Ms Rice said that Georgia's acceptance of the plan meant all Russian combat forces should now withdraw, and she called on Russia to co-operate in getting international observers in place.
In a telephone call, Russian President Dmitry Medvedev told his French counterpart, Nicolas Sarkozy, that his country would sign the ceasefire agreement, French officials said.
"[Mr Medvedev] confirmed that he would scrupulously respect its commitments to the accord, notably the pull-out of Russian forces," the statement said.
Meanwhile, the campaign group, Human Rights Watch, said it had evidence Russian aircraft attacked populated areas of Georgia with cluster bombs, which are banned internationally.
A senior Russian official denied the allegation, saying the report was a "well-prepared lie".
'Guarantor' of security
President George W Bush has accused Russia of "bullying and intimidation", saying it was an unacceptable "way to conduct foreign policy in the 21st Century".
Speaking at the White House, Mr Bush demanded that Moscow respect Georgia's territorial integrity and withdraw its troops - or risk international isolation.
President Bush: "Russia must respect the freedom of its neighbours"
"Only Russia can decide whether it will now put itself back on the path of responsible nations or continue to pursue a policy that promises only confrontation and isolation."
At the same time, after talks with President Medvedev in the Black Sea resort of Sochi, German Chancellor Angela Merkel described the Russian response as "disproportionate".
But Mr Medvedev said Russia was the "guarantor" of the interests and lives of those in South Ossetia and Abkhazia.
He said they trusted Russian troops, and that this had to be taken into account.
'Peacekeeping mandate'
Mr Medvedev said he did not want to damage relations with other countries but that Russia had to fulfil its peacekeeping mandate, and that it would respond in the same way to any future attack on its troops or citizens.
He added that a new deal to base part of a US missile defence system on Polish soil was aimed at the Russian federation.
Washington - which says the timing is not linked to the Georgian crisis - insists that the shield is to protect against "rogue states" such as Iran.
|  |
But, says the BBC's Jonathan Beale in Washington, the US is now likely to be less worried about Russian objections and more anxious to send signals to European allies like Poland that it is prepared to guarantee their protection.
Moscow's troops continue to operate deep inside the Caucasus republic, occupying parts of at least three major towns.
There were reports of Russian anti-personnel carriers moving closer towards the Georgian capital, setting up a new checkpoint about 35km (22 miles) outside Tbilisi.
The BBC's Richard Galpin, in the Georgian port of Poti, says Russian forces have taken control of the naval dockyard - with the apparent intent to destroy or remove Georgian military and naval equipment.
There was also a major Russian military contingent further inland, at Senaki, where Russia said it has seized a large depot of American-made arms.
Russian forces still control Gori, which lies some 15km (10 miles) from South Ossetia, but say they are holding talks with Georgian police on transferring control back to them.
The Kremlin's 'Protection' Racket
Russia's invasion of Georgia will be a defining moment for America's credibility and global stability. If the Medvedev (or, rather, Putin) regime succeeds in using force to topple a democratic and pro-Western government, based on spurious claims of "protecting" Georgia's population against its own government, the stage will be set for similar aggression against the other states -- from the Baltics to Ukraine -- that border Russia but look to the free West. The dangers of the post-September 11 World will be combined with the challenge of a new Cold War.
![[The Kremlin's 'Protection' Racket]](http://s.wsj.net/public/resources/images/OB-CB475_oj_riv_20080814184930.jpg) |
| Corbis |
| Some Czechs welcomed Hitler's invasion. |
Russia is fully aware of these ominous implications. It has accordingly sought to cloak this act of aggression in the raiment of modern international justice. Its officials and surrogates (including Mikhail Gorbachev) have falsely accused Georgian leaders of violating international law in the South Ossetia and Abkhazia regions, which have "Russian" populations on account of Russia's extralegal issuance of its passports in those areas.
President Dmitry Medvedev has called for the "criminal prosecution" of the perpetrators of these supposed abuses and Vladimir Putin has alleged that if "Saddam Hussein [was hanged] for destroying several Shiite villages," Georgian leaders are guilty of much more. Ruthless Kremlin realists have learned the language of global humanitarianism.
The language of "protection" was once a favorite pretext for Tsarist expansion in the 19th century. It is also the same rationale that Germany offered for absorbing the Sudetenland in 1938. The Kremlin's current claims are no more credible than its tattered justifications for invading Hungary in 1956, Czechoslovakia in 1968, and Afghanistan in 1979. Russian assertions that Georgian forces provoked the conflict by attacking Russian troops call to mind Hitler's story that his 1939 invasion of Poland was justified by Polish attacks on Germans. This is particularly ironic, given the Kremlin's penchant for comparing Georgian President Mikheil Saakashvili to Adolf Hitler.
Moscow's sudden embrace of a "limited sovereignty" for Georgia doesn't square with Russia's own previous protestations about the sanctity of its sovereignty and stubborn insistence that it was free to act on its own soil as it saw fit. Moscow's concern about alleged atrocities and genocide is also preposterous in light of the Russian government's callous indifference to the very real genocides conducted by its allies in Iraq and the former Yugoslavia, and in Rwanda and Darfur -- not to mention Moscow's own exceptionally brutal military campaigns in Chechnya.
Predictably, Messrs. Putin and Medvedev also assert that their actions in Georgia are no different from Western behavior vis-à-vis Iraq and the former Yugoslavia. Accordingly, they have demanded Mr. Saakashvili's resignation.
Moscow's clear goal is to replace a pro-Western government with a new Russian satellite, both through military action and by discrediting Georgia's leadership through false war crimes and genocide accusations. Behind the hypocrisy, Russia may be trying to lock in a new set of international rules, by which Moscow will be free to intervene at will in its "near abroad" while the United States looks on. These claims, reminiscent of the Brezhnev doctrine which posited that Moscow had a right to use force to preserve its empire, ring particularly hollow in the 21st century.
Moscow's attack on Georgia is only part of a broader campaign against its real and perceived enemies, a mission that has been conducted without the least regard for settled principles of international law. This campaign includes the de facto annexation of South Ossetia and Abkhazia -- which must now be considered "Russia-occupied territory" protected by the Fourth Geneva Convention. It also encompasses cyber attacks against the Baltic states, state-ordered assassinations of individuals in Western countries, and economic intimidation, as in the recent cutoffs of Russian oil and gas shipments to Ukraine or the Czech Republic.
It is important that Moscow pays a concrete and tangible price for its latest aggression, at least comparable to the price it paid for the 1979 invasion of Afghanistan. Visa denials to all individuals connected to the Russian government and vigorous oversight and enforcement activities against Moscow's state-owned companies would be a good way to start. Given Russia's historic insecurities, and the desire of Russian plutocrats to travel freely throughout the world, educate their children in the West, and own property overseas, such modest measures would be quite effective. Russia's WTO membership should be blocked and its G-8 participation suspended.
The Bush administration should also make an assertive effort to deny the legitimacy of all Moscow's legal and policy claims, and defend Mr. Saakashvili without reservations. We should draw a sharp contrast between the American leadership in securing Kosovo's independence -- an infringement of Serbian sovereignty brought about by Belgrade's real genocide and war crimes -- and Moscow's cynical encouragement of secessionist movements in countries formerly a part of the Soviet Union, which was designed to reconstitute Russian imperial control. John McCain has already taken the lead on this, quickly reaching out to the Georgian president and condemning Russia's actions as a new form of empire building.
While rebutting Moscow's claims of today, the U.S. should also press for a historical accounting. Russia's history goes directly to its credibility. We should remind the world that Russia remains unrepentant for the sins of its past, not the least of which are its previous 1803 and 1922 invasions and annexation of Georgia, its 1939 partition of Poland with Hitler's Germany, and the Katyn massacre that claimed the lives of tens of thousands of captured Polish officers (which Moscow still falsely blames on Germany). Russia refuses to take responsibility for its past oppression of numerous non-Russian "captive nations" -- among them, of course, the Georgians.
American credibility is very much at stake here. If a true friend of the United States -- an ancient country already twice annexed by Moscow in the past two centuries, a democracy that has enthusiastically reached out to NATO and the European Union, and even sent troops to fight in Iraq -- can be snuffed out without concrete action by Washington, America's friendship will quickly lose its value and America's displeasure would matter even less. The repercussions would be felt world-wide, from the capitals of New Europe, to Jerusalem, Kabul and Baghdad.
How the West
Fueled Putin's
Sense of Impunity
Russia's invasion of Georgia reminded me of a conversation I had three years ago in Moscow with a high-ranking European Union official. Russia was much freer then, but President Vladimir Putin's onslaught against democratic rights was already underway.
"What would it take," I asked, "for Europe to stop treating Putin like a democrat? If all opposition parties are banned? Or what if they started shooting people in the street?" The official shrugged and replied that even in such cases, there would be little the EU could do. He added: "Staying engaged will always be the best hope for the people of both Europe and Russia."
The citizens of Georgia would likely disagree. Russia's invasion was the direct result of nearly a decade of Western helplessness and delusion. Inexperienced and cautious in the international arena at the start of his reign in 2000, Mr. Putin soon learned he could get away with anything without repercussions from the EU or America.
Russia reverted to a KGB dictatorship while Mr. Putin was treated as an equal at G-8 summits. Italy's Silvio Berlusconi and Germany's Gerhardt Schroeder became Kremlin business partners. Mr. Putin discovered democratic credentials could be bought and sold just like everything else. The final confirmation was the acceptance of Dmitry Medvedev in the G-8, and on the world stage. The leaders of the Free World welcomed Mr. Putin's puppet, who had been anointed in blatantly faked elections.
On Tuesday, French President Nicolas Sarkozy sprinted to Moscow to broker a ceasefire agreement. He was allowed to go through the motions, perhaps as a reward for his congratulatory phone call to Mr. Putin after our December parliamentary "elections." But just a few months ago Mr. Sarkozy was in Moscow as a supplicant, lobbying for Renault. How much credibility does he really have in Mr. Putin's eyes?
In reality, Mr. Sarkozy is attempting to remedy a crisis he helped bring about. Last April, France opposed the American push to fast-track Georgia's North Atlantic Treaty Organization membership. This was one of many missed opportunities that collectively built up Mr. Putin's sense of impunity. In this way the G-7 nations aided and abetted the Kremlin's ambitions.
Georgia blundered into a trap, although its imprudent aggression in South Ossetia was overshadowed by Mr. Putin's desire to play the strongman. Russia seized the chance to go on the offensive in Georgian territory while playing the victim/hero. Mr. Putin has long been eager to punish Georgian President Mikheil Saakashvili for his lack of respect both for Georgia's old master Russia, and for Mr. Putin personally. (Popular rumor has it that the Georgian president once mocked his peer as "Lilli-Putin.")
Although Mr. Saakashvili could hardly be called a model democrat, his embrace of Europe and the West is considered a very bad example by the Kremlin. The administrations of the Georgian breakaway areas of Abkhazia and South Ossetia are stocked, top to bottom, with bureaucrats from the Russian security services.
Throughout the conflict, the Kremlin-choreographed message in the Russian media has been one of hysteria. The news presents Russia as surrounded by enemies on all sides, near and far, and the military intervention in Georgia as essential to protect the lives and interests of Russians. It is also often spoken of as just the first step, with enclaves in Ukraine next on the menu. Attack dogs like Russian nationalist politician Vladimir Zhirinovsky are used to test and whip up public opinion. Kremlin-sponsored ultranationalist ideologue Alexander Dugin went on the radio to say Russian forces "should not stop until they are stopped." The damage done by such rhetoric is very slow to heal.
The conflict also threatens to poison Russia's relationship with Europe and America for years to come. Can such a belligerent state be trusted as the guarantor of Europe's energy supply? Republican presidential candidate John McCain has been derided for his strong stance against Mr. Putin, including a proposal to kick Russia out of the G-8. Will his critics now admit that the man they called an antiquated cold warrior was right all along?
The conventional wisdom of Russia's "invulnerability" serves as an excuse for inaction. President Bush's belatedly toughened language is welcome, but actual sanctions must now be considered. The Kremlin's ruling clique has vital interests -- i.e. assets -- abroad and those interests are vulnerable.
The blood of those killed in this conflict is on the hands of radical nationalists, thoughtless politicians, opportunistic oligarchs and the leaders of the Free World who value gas and oil more than principles. More lives will be lost unless strong moral lines are drawn to reinforce the shattered lines of the map.
Mr. Kasparov, leader of The Other Russia coalition, is a contributing editor of The Wall Street Journal.
Free Trade Can Fight Terror
When trade flares up as a political issue -- as it is likely to do in the presidential campaign this year -- one aspect of the debate is almost always neglected. There is a fierce competition among foreign countries to sell their products here, in the United States, the largest commercial market in the world.
Moreover, by opening up our market to Muslim countries, we could not only help American consumers, but also serve a larger strategic goal: that of boosting the economies which now produce large pools of unemployed, embittered youth. We can make trade an effective weapon against terrorism.
Our tariff regime puts many nations in the Middle East, whose young people are susceptible to the sirens of Islamic fundamentalism, at an unintended disadvantage. This works against our efforts to stamp out jihadism. Fortunately, the problem is easy to fix.
The U.S. buys about a fifth of all the goods and services traded world-wide -- importing $2.63 trillion worth of the world's products last year alone. Socks come in from the Caribbean, towels from Pakistan, cheese from France, and oil from Saudi Arabia.
But apart from oil, very little comes from the Muslim world. The 30 majority-Muslim states of the greater Middle East, from Morocco through Egypt to Pakistan and Central Asia, account for about 10% of the world's population. They provide about 1% of our manufactured imports, and an even smaller fraction of our farm imports.
The statistics hint at one of the least-studied but most ominous aspects of the modern global economy. Most of us frame the last quarter-century with narratives about globalization, the rise of China and the spread of the Internet. But for the Muslim countries of the Middle East, and their neighbors in Pakistan and Central Asia, it was a period of economic disaster rivaling our Great Depression.
Between 1980 and 2000, their share of world trade fell by 75%, and their share of investment fell even faster. The region's unemployment rate became the world's highest, rising to an average of 25% for young people. With the region's population rising by nearly a quarter-billion, the high unemployment rates mean a pool of perhaps 25 million jobless and sometimes hopeless young people, often easy targets for fundamentalists.
Will oil -- now selling at record prices -- put these legions to work? Historical experience is not promising. Oil can bring in money, but it also centralizes wealth and power. The effects mark a strong contrast with factory and farm exports, where revenue is spread more evenly through the working public.
Apart from gasoline, we rarely find consumer products from the Muslim world stocking our shelves (apart from the shirts and shoes trickling in from Turkey, Egypt and Pakistan). In part, that is because our tariff system makes life harder for developing countries. A Japanese car, for example, is subject to a mere 2.5% tariff, a Chinese TV 5%, and European medicines are subject to no import tax at all. Likewise, oil and natural gas get a nominal 0.1% tariff.
But tariffs on the items that are most important to developing economies are much higher. Clothes are subject to an import tax that averages 14.5% and can run as high as 32%. Luggage is taxed just as heavily. Shoe tariffs rise to 48%.
Trade pacts like the North American Free Trade Agreement, and preference programs like the African Growth and Opportunity Act, exempt many imported goods from those tariffs. Jamaica, Peru, Jordan, Kenya, Mexico and dozens of other nations export towels, clothes and luggage here duty-free, so American stores can sell their products at a lower price -- or a higher profit margin. Nice for them -- but not so attractive to the nations not privy to a special trade agreement with the U.S., and whose citizens compete with Jamaicans, Peruvians, Kenyans and Mexicans for factory jobs.
Towels, for example, are Pakistan's top export. Each container full of towels exported to the U.S. brings in enough income to employ about 500 Pakistanis. But while Pakistani towels are subject to a 7.5% tariff, competing towels from the Dominican Republic or Costa Rica -- both of which benefit from the Central American Free Trade Agreement -- come in duty-free.
Likewise, luggage made in Indonesia is subject to a tariff that can rise to 22%, but competes with tariff-free suitcases manufactured in Mexico. Lebanon, which exports preserved fruits and vegetables, must compete with similar duty-free items exported from Peru.
Sen. Maria Cantwell (D., Wash.) has taken a step toward fixing this problem, by introducing a bill, the Afghanistan and Pakistan Reconstruction Opportunity Zones Act of 2008, to waive tariffs on many goods from Afghanistan and Pakistan's frontier provinces. The next president should follow up with a broad, tariff-exemption initiative to help the Muslim world break its downwards spiral, revive trade and put its young people back to work.
Of course, a comprehensive solution to Middle East economic problems will require efforts to stamp out corruption, improve schooling and end political oppression. But few things could do more to combat terrorist recruitment than draining the pools of angry and unemployed youth that are spread across this region. Fixing American trade policy would be a good start.
Mr. Gresser is director of the Trade and Global Markets Project at the Progressive Policy Institute. Mr. Dunkelman is the vice president for strategy and communication at the Democratic Leadership Council.
America the Uncompetitive
The new international tax rankings are out for 2008, and congratulations to Washington, D.C., are again in order. Our political class has managed to maintain America's rank with the second highest corporate tax rate in the world at 39.3% (average combined federal and state).
![[America the Uncompetitive]](http://s.wsj.net/public/resources/images/ED-AI063_1corpt_20080814182817.gif)
Only Japan is slightly higher overall, though if you are silly enough to base a corporation in California, Iowa, New Jersey, Pennsylvania, or other states with high corporate levies, your tax rate on business income is even higher than in Tokyo. For the first time, the U.S. statutory rate is now 50% higher than the average of our international competitors, continuing a long-term trend as the rest of the world keeps reducing corporate tax rates. (See nearby chart).
Economists argue over how much this tax penalty on corporate profits injures U.S. competitiveness and drives capital overseas. We've long believed that it hurts a lot. And now even the folks at the Paris-based Organization for Economic Cooperation and Development (OECD) say they agree.
A new OECD study, "Taxes and Economic Growth," examines national tax burdens and their impact on growth and incomes in member countries. It concludes that "corporate taxes are most harmful for growth, followed by personal income taxes, and then consumption taxes." The study adds that "investment is adversely affected by corporate taxation," and that the most profitable and rapidly growing companies tend to be the most sensitive to high business tax rates.
In Washington, meanwhile, the politicians are still living in their own populist alternative universe. Last week Senator Byron Dorgan of North Dakota waved around a new politically generated study by the Government Accountability Office (GAO) finding that 28% of large U.S. corporations paid no income tax in 2005. "It's time for big corporations to pay their fair share," Mr. Dorgan roared.
Well, the Tax Foundation looked at those numbers and found that, among the large companies that paid no taxes, 85% of them also made no profits that year. American Airlines and General Motors escaped income tax for 2005 through the clever tax dodge of losing $862 million and $10.5 billion, respectively. How unpatriotic.
The GAO data only add to the case for cutting U.S. corporate rates. America now has the worst of all worlds: high corporate tax rates, but also lots of loopholes passed by Congress at the behest of favored businesses to avoid the confiscatory rate. This imposes huge compliance costs as businesses scramble to exploit the loopholes, with the result of less revenue for the government.
The average European nation has tax rates on corporate income 10 percentage points lower than the U.S., but those countries on average raise 50% more as a share of GDP in corporate taxes than does the U.S., according to a 2007 study by the Treasury Department. Ireland with its 12.5% rate captures a higher share of its GDP (3.4%) in corporate taxes than the U.S. does (2.5%) with its 39.3% rate.
To correct this revenue dearth, Barack Obama and Democrats in Congress are proposing to pry more tax money out of U.S. companies that have profitable affiliates outside the U.S. Mr. Obama is also shamelessly taking the Byron Dorgan line that the problem is venal U.S. CEOs rather than the nutty U.S. tax code.
One proposal would tax foreign profits when they are earned, rather than waiting until the dollars are brought back to the U.S. This may raise more revenue in the short term, but it would also accelerate the trend of U.S. companies moving entirely offshore, or being bought out by Asians and Europeans so they can escape onerous U.S. taxes.
John McCain has proposed cutting the 35% federal corporate tax rate to 25%. That's a good start, but even that would leave the U.S. with a combined state and federal rate nearly five percentage points above the global average. With corporate tax rates falling around the world, and with its damage to investment increasingly obvious, abolishing the U.S. corporate income tax should be on the table. Senator Jim DeMint of South Carolina and Congressman Paul Ryan of Wisconsin have proposed replacing the corporate tax with a value-added consumption tax. We worry about a VAT turning into a runaway money machine for government, but something has to give on the corporate tax.
Every month that goes by without tax reform, America is a relatively less attractive place to do business. Over the past 18 months, nine of the 30 most developed nations and 20 countries world-wide -- from Israel to Germany to Turkey -- have cut their corporate tax rates. Nations are slashing rates to attract capital and jobs from the U.S., and the tragedy is that our politicians keep making it easy for them.
Russia's Ominous New Doctrine?
Russia has been justifying its rampage through Georgia as a "peacekeeping" operation to end the Tbilisi government's "genocide" and "ethnic cleansing" of South Ossetia. That terminology deliberately echoes U.S. and NATO language during their 1999 bombing campaign against Serbia, which resulted in the independence of Kosovo. Essentially, it's payback time for a grievance that Russia has borne against the West for nine years. The Russians are relying on the conceit that Georgian President Mikheil Saakashvili is today's equivalent of Slobodan Milosevic, and that the South Ossetians are (or were until their rescue by the latter-day Red Army last week) being victimized by Tbilisi the way the Kosovar Albanians suffered under Belgrade.This analogy turns reality, and history, upside down. Only after exhausting every attempt at diplomacy did NATO go to war over Kosovo. It did so because the formerly "autonomous" province of Serbia was under the heel of Belgrade and the Milosevic regime was running amok there, killing ethnic Albanians and throwing them out of their homes. By contrast, South Ossetia -- even though it is on Georgian territory -- has long been a Russian protectorate, beyond the reach of Saakashvili's government.
An accurate comparison between the Balkan disasters of the 1990s and the one now playing out in the Caucasus underscores what is most ominous about current Russian policy. Seventeen years ago, the Soviet Union came apart at the seams more or less peacefully. That was overwhelmingly because Boris Yeltsin insisted on converting the old inter-republic boundaries into new international ones. In doing so, he kept in check the forces of revanchism among communists and nationalists in the Russian parliament (which went by the appropriately atavistic name "the Supreme Soviet").
Meanwhile, Yugoslavia collapsed into bloody chaos because its leaders engaged in an ethnically and religiously based land-grab. Milosevic, as the best-armed of the lot, tried to carve a "Greater Serbia" out of the flanks of Bosnia and Croatia. If Yeltsin had gone that route, seeking to create a Greater Russia that incorporated Belarus and the parts of Ukraine, northern Kazakhstan and the Baltic states populated by Russian speakers, there could have been conflict across 11 time zones with tens of thousands of nuclear weapons in the mix.
A question that looms large in the wake of the past week is whether Russian policy has changed with regard to the permanence of borders. That seemed to be what Russian Foreign Minister Sergei Lavrov was hinting yesterday when he said, "You can forget about any discussion of Georgia's territorial integrity." He ridiculed "the logic of forcing South Ossetia and Abkhazia to return to being part of the Georgian state."
Lavrov is a careful and experienced diplomat, not given to shooting off his mouth. That makes his comments all the more unsettling. If he has given the world a glimpse of the Russian endgame, it's dangerous in its own right and in the precedent it would set. South Ossetia and Abkhazia might be set up as supposedly independent countries ("just like Kosovo," the Russians would say) -- but would in fact be satrapies of Russia. While Russia might see that outcome as proof of its comeback as a major power, the Balkanization of the Caucasus may not end there: Chechnya is just one of several regions on Russian territory that are seething with resentment against the Kremlin and that might hanker after a version of independence far less to Moscow's liking than what may be contemplated for Abkhazia and South Ossetia.
Among Secretary of State Condoleezza Rice's important tasks in the days ahead is to get clarity on whether a Lavrov doctrine has replaced the Yeltsin one of 16 years ago. If so, big trouble looms -- including for Russia. Moscow's action and rhetoric of the past week have highlighted yet another, potentially more consequential respect in which this episode could bode ill for all concerned. For the Bush administration -- and those of Bill Clinton and George H.W. Bush as well -- the fundamental premise of American policy has been that Russia has put its Soviet past behind it and is committed, eventually, to integrating itself into Europe and the political, economic and ideological (as opposed to the geographical) "West."
Prominent Russians have said as much. In one of my first meetings with Vladimir Putin, before he became president, he spoke of his country's zapadnichestvo, its Western vocation. Yet it now appears that beyond the undisguised animosity that Putin bears toward Saakashvili, he and his government regard Georgia's pro-Western bent and its aspiration to join two Western institutions, NATO and the European Union, as, literally, a casus belli. If that is the case, the next U.S. administration -- the fourth to deal with post-Soviet Russia -- will have to reexamine the underlying basis for the whole idea of partnership with that country and its continuing integration into a rule-based international community.
Georgia: Europe wins a gold medal for defeatism
Sarkozy's ‘peace in our time' deal is a reminder of what could happen if the EU wins more clout
To some, China's muscular domination of the Olympic medal table is a powerful allegory of the shifting balance of global power. A far better and more literal testimony to the collapse of the West may be seen in the distinctly weak-kneed response to Russian aggression in Georgia by what is still amusingly called the transatlantic alliance.
Once again, the Europeans, and their friends in the pusillanimous wing of the US Left, have demonstrated that, when it come to those postmodern Olympian sports of synchronized self-loathing, team hand-wringing and lightweight posturing, they know how to sweep gold, silver and bronze.
There's a routine now whenever some unspeakable act of aggression is visited upon us or our allies by murderous fanatics or authoritarian regimes. While the enemy takes a victory lap, we compete in a shameful medley relay of apologetics, defeatism and surrender.
The initial reaction is almost always self-blame and an expression of sympathetic explanation for the aggressor's actions. In the Russian case this week, the conventional wisdom is that Moscow was provoked by the hot-headed President Saakashvili of Georgia. It was really all his fault, we are told.
What's more, the argument goes, the US and Europe had already laid the moral framework for Russia's invasion by our own acts of aggression in the past decade. Vladimir Putin was simply following the example of illegal intervention by the US and its allies in Kosovo and Iraq.
It ought not to be necessary to point out the differences between Saddam Hussein's Iraq and Mr Saakashvili's Georgia, but for those blinded by moral relativism, here goes - Georgia did not invade its neighbours or use chemical weapons on their people. Georgia did not torture and murder hundreds of thousands of its own citizens. Georgia did not defy international demands for a decade and ignore 18 UN Security Council resolutions to come clean about its weapons programmes.
And unlike Iraq under Saddam, Georgia is led by a democratically elected president who has pushed this once dank backwater of the Soviet Union, birthplace of Stalin and Beria, towards liberal democracy and international engagement.
The Kosovo analogy has a more resonant ring of plausibility to it and has been heavily exploited by the Russians in defence of their actions. But it too is specious. It is true that South Ossetia and Abkhazia, like Kosovo within Serbia, are ethnic-minority-majority regions within a state that they dislike. But that's where the parallel ends.
Unlike Serbia, Georgia has not been conducting a campaign of “ethnic cleansing” against the people of these provinces. In the 1990s Serbia had firmly established its aggressive intentions towards its minorities with ugly genocidal wars against Croatia and Bosnia. And in any case the two Georgian enclaves have been patrolled by Russian “peacekeepers” for the past 15 years.
We need to be morally clear about what is going on in Georgia. Perhaps Mr Saakashvili was a little reckless in seeking to stamp out the separatist guerrillas. But to suggest that he somehow got what he deserved is tantamount to saying that a woman who dresses in a miniskirt and high heels and gets drunk in a bar one night is asking to be raped.
If shifting moral blame won't relieve us of our responsibilities then surely defeatism will. Whoever is right or wrong, the critics say, we can't do anything about it. In the past week, the familiar parade of clichés has been rolled out to explain why it is all hopeless. The Russian bear, pumped up by all that oil wealth, is reasserting power in its own backyard. The US and Europe, their energy sapped by endless wars in Iraq and Afghanistan, can only stand by and watch.
There's something odd about listening to European governments speak about the futility of diplomacy. They are the ones who usually insist that military force alone can achieve little and who say that diplomacy must be given a chance. But now they seem to say that, since we can't stop Russia militarily, there is nothing else we can do.
But we can make life very uncomfortable for Mr Putin. Russia is not the Soviet Union. Its recent (relative) prosperity depends on its continuing integration into the global economy. It sets great store by the recognition that it gains from a seat at the high table with the great powers in the G8. It wants to elevate that status farther by joining the World Trade Organisation and the Organisation for Economic Co-operation and Development.
Punitive measures will hurt us too, of course: Russia could cause trouble over Iran and holds an alarmingly large quantity of US official debt. It could play havoc with the West's energy supplies.
The Europeans don't much like the idea of any of this. So this week they demonstrated the same sort of resolve that they showed in the Balkans in the early 1990s, when they stood by as genocide unfolded on their own continent.
Nicolas Sarkozy, the French President, in his capacity as head pro tempore of the EU, came back from a trip to Moscow and Tbilisi, waving a piece of paper and acclaiming peace in our time.
But the one-sided ceasefire that he negotiated was more or less dictated to him by Mr Putin. It not only left the Russian military in place in the disputed enclaves. It allowed them free rein to continue operations inside the rest of Georgia.
That disastrous piece of European diplomacy finally seems to have stirred the US into tougher action. Goaded by John McCain, who has been brilliantly resolute in his measure of Russian intentions over the past few years, the Bush Administration at last dropped its credulous embrace of Mr Putin and upped the ante with direct military assistance to Georgia and threats of tougher diplomatic action.
But we should never forget what Mr Sarkozy and his EU officials got up to this week. There can be no clearer indication of the perils that threaten the West if the EU gets its way and wins more clout in the world.
This, remember, is the same EU that wants to take over foreign and security policy from member states, an institution that is always eager to pump itself up at the expense of democratic institutions in those member states, but which crumbles into puny submission when faced with authoritarian bullying overseas.
It was a great Frenchman, Baron Pierre de Coubertin, who founded the modern Olympic movement on the famous principle that “the important thing is not winning but taking part”.
The EU today seems to have adapted that slogan to fit its own desired global role - the important thing is taking part and not winning.
| Islamo-Fascism Week III: "Stop the Jihad on Campus" |
While America is finally winning the war in Iraq, the global effort against the Islamic jihad goes on. In Afghanistan, the war with al-Qaeda is still raging. In Gaza, Hamas continues to launch genocidal attacks against Israeli towns. Meanwhile, on American college campuses a coalition of organizations connected to the jihad network demonizes America and Israel. This coalition carries on its agendas of hate with the unwitting collaboration of student governments and university administrations.
In October 2007, more than one hundred campuses hosted Islamo-Fascism Awareness weeks to make university communities aware of the Islamist threat and the danger it poses.
In April 2008 a second Islamo-Fascism Awareness Week focused on the network created in America by the Muslim Brotherhood and that includes the Muslim Students Association and the Council on American Islamic Relations (CAIR).
This fall, during the week of October 13-17, students on more than 100 campuses will hold events under the banner of "Stop the Jihad on Campus," a campaign designed to make the university community aware of the support the Muslim Students Association, Students for Justice in Palestine and other leftist groups provide for the jihadists' hatred and agendas.
A focus of this campaign will be the genocidal nature of the jihad. Over one hundred Muslim Students Associations have refused to condemn the genocidal terror groups Hamas and Hizbullah, and have declined to repudiate the infamous Hadith or saying of the prophet which calls on Muslims to kill Jews to bring about the Day of Judgment.
The request to repudiate this incitement was sent to the Muslim Students Associations by the David Horowitz Freedom Center last spring. It has been re-sent recently. If the MSAs again refuse to condemn religious genocide and the organizations whose goal it is to carry it out, the “Stop the Jihad” movement will call for the defunding of MSA chapters who promote of ethnic hatred and refuse to condemn holy war.
The Muslim Students Association portrays itself as a religious and cultural organization, representing all Muslims. As a result, MSAs receive generous funding from student activities boards – often more than most other student groups. The University of Pennsylvania’s Muslim Students Association for example receives $20,000 from student government while college Republicans and Democrats receive nothing.
During May 2008, the Muslim Student Union at UC Irvine– a chapter of the Muslim Students Association -- specifically requested and received $6,500 for their “Palestine Awareness” program which called for the destruction of the Jewish state under the banner “Never Again? The Palestinian Holocaust.” The May 2008 Muslim Student Union hate-fest in support of terrorist groups like Hamas and Hezbollah at UCI included virulently anti-Israel and anti-American speakers such as imam Amir Abdel Malik Ali, imam Muhammad al-Asi and Norman Finkelstein.
The MSA is in fact an arm of the Muslim Brotherhood, a terrorist organization, which has created a network of “front” groups to conduct a stealth jihad in America, including CAIR, the Muslim American Society and the Islamic Society of North America.
“Stop the Jihad on Campus” will seek to make the academic community aware of the stealth jihad in its midst and end university support for the hate agendas – against women, gays and Jews – which MSA-sponsored speakers have brought to campus.
The national MSA has sponsored hate speakers such as Sheik Khalid Yasin who has called for the execution of gays and accuses Jews of orchestrating the 9/11 terror attacks. Last spring, the MSA brought Sheik Yasin to Penn State, Ohio State, Minnesota State, the University of Minnesota, St. Cloud College and Sinclair Community College. The MSA has named its student scholarship fund after a member of the Muslim Brotherhood network, and has sponsored “Nakba” celebrations to coincide with Israel’s birth date and whose agenda is the destruction of the Jewish state.
Student leaders will be asked to press their student governments to defund their respective MSA chapters for sponsoring ethnic hatred and violating university rules and regulations. Islamo-Fascism Awareness Week will raise consciousness in campus communities across the nation as to the nature and presence of the jihad in their midst. Americans need to wake up to the threat that confronts them, before it is too late.
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