> From: Salim Virani
> Date: Tue Apr 15, 2003 3:54:33 PM US/Pacific
> To: Ian Bell
> Subject:
>
> You might find this interesting…
>
> http://www.jwt.com/
>
> 18 Mar 2003
>
> Proprietary Study Reveals Americans’ Purchasing Behaviors Based on
> Level of Anxiety , Not Attitudes Toward War
>
>
>
>
>
> Anxiety Affects Consumers’ Feelings About Ad Messages
>
>
> NEW YORK, March 18, 2003 — Are Americans as anxious as the media
> portrays them to be? According to a new study commissioned by J.
> Walter Thompson, and unveiled today by JWT North American President
> Bob Jeffrey, the answer is a resounding “YES.”
>
>
>
>
> So much so, that American companies may need to employ radical new
> strategies – both in marketing current products and in inventing new
> ones – to win the hearts, minds, and wallets of a fearful consumer.
>
>
>
>
> The proprietary study, called AnxietyIndex from JWT, probes consumers
> on various topics that may influence purchasing behaviors “during
> times of national crisis.” The Study will continue every eight weeks
> for the next six months to help corporate marketers assess the impact
> of heightened states of anxiety on marketing messages. (For complete
> data, please visit the “Data” tab at http://anxietyindex.jwt.com;
> Username: survey; Password: findings.)
>
>
>
>
> Mr Jeffrey said, “The AnxietyIndex Study offers irrefutable evidence
> that marketers today face an increasingly fearful audience whose
> purchasing behaviors are influenced, not by consumer attitudes toward
> war or political affiliations, but by their levels of anxiety during a
> time of crisis.”
>
>
>
>
> Data Yield Metrics to Gauge Consumer Sentiments Toward Ad Messages
>
>
> The current AnxietyIndex is 233. In terms similar to those of the
> Department of Homeland Security, an index of 233 represent a Code Red
> state of alert in terms of consumer behavior. Portraying consumers in
> a state of anxiety unprecedented in recent memory, the AnxietyIndex, a
> benchmark of consumer sentiment, is calculated by asking, on a scale
> of one to ten, about levels of anxiety. If an equal number of anxious
> and not-anxious consumers exist, the index reading is 100. If the
> index measures below 100, consumers are in a state of low anxiety. If
> the index is above 100, consumers are in a state of high anxiety.
>
>
>
>
> Anxiety Mounts, Consumers Expect Long-term Impact on Purchasing
>
>
> Most consumers (52%) are not anticipating a “Desert Storm” style war
> that is over quickly (e.g., 1 month or less). 42% believe it will be
> more than 3 months before their lives return to normal, a significant
> source of anxiety and strong indication that their purchasing behavior
> will change.
>
>
>
>
> Categories most likely to be negatively affected by America’s
> heightened sense of anxiety are the ones with larger ticket items such
> as, New Cars (-28%), Jewelry (-27%) and Appliances (-23%), as well as
> Travel (international, -43%).
>
>
>
>
> Familiar, American brands with established history have a distinct
> advantage over newer or imported ones. The majority of consumers (63%)
> feel they would prefer to hear advertising messages about American
> products versus 15% who are open to hearing about or purchasing
> imported products and brands.
>
>
>
>
> Aid Recovery: Consumers Want Facts Over Messages of Heritage
>
>
> During a national crisis, the majority of consumers surveyed look to
> advertising for reassurance. Few (11%) feel that advertising is
> inappropriate. Over half (51%) cite advertising as indication that
> life is returning to “normal.” The “anxious” consumer values humor and
> escapism in advertising, as long as it is done “with sensitivity to
> others’ feelings.”
>
>
>
>
> Although consumers prefer to purchase brands with a known history,
> they prefer that the brands’ advertising messages focus on day-to-day
> needs – security, hope, family, patriotism, news, facts – rather than
> on history, heritage, user imagery or innovation.
> Additionally, consumers note an increased value of content. The
> “anxious” consumer is looking for truth from advertisers, not opinion
> or hyperbole. Consumers will welcome advertising that includes facts
> and information about products. The study reveals that for advertising
> messages to cut through the “anxiety filter,” they must put the
> wants/needs/desires of consumers first.
>
> Connection without leaving home will be increasingly important:
> socialization at bars/restaurants (-13%), movies/theatres (-12%).
> Therefore, advertising messages related to “staying at home with
> family” (46%) were considered especially appropriate versus ones
> related to “going out/socializing” (19%).
>
>
>
>
> Of all media, the profile of print readers will see the most drastic
> shift (need stat about younger demo). Young people will increase their
> news media consumption more than any other group, creating new
> opportunities for advertisers to reach this audience.
>
>
>
>
> AnxietyIndex from JWT: The Methodology
>
>
> initial wave of AnxietyIndex data was compiled the weekend of
> February 15th, 2003 with an on-line survey (Insight Express) of 500
> consumers, age 18 and over, across the United States. The statistical
> reliability is +/- 3.7%. The AnxietyIndex survey will be conducted
> every eight weeks for the next six months. For more detailed data,
> particularly as it relates to varying categories, please visit
> http://anxietyindex.jwt.com
>
>
>
>
> About JWT,
>
>
> J. Walter Thompson, an agency of WPP, (NASDAQ: WPPGY), ranks as the
> fourth largest advertising agency in the world and the second largest
> in the United States.
>
> # # #
>
>
>
>
> ANTICIPATED CHANGES IN PURCHASING/BEHAVIOR
> Information (Newspapers/Magazines/TV) 36%
> Communication (Telephone/E-Mail) 25%
> Revisiting Investments 10%
> Purchasing Staples (Groceries/HBA/Drugs) 9%
> Purchasing Gasoline -7%
> Purchasing Fast Food -10%
> Purchasing Alcohol Beverages -11%
> Purchasing Cosmetic/Beauty Items -14%
> Going Out (Movies/Theater/Bar/Restaurant)-16%
> Purchasing/Shopping for Electronics/Appliances -23%
> Purchasing/Shopping for Jewelry -27%
> Purchasing/Shopping for a New Car -28%
> Traveling Outside the US -43%
>
>
> DURING A NATIONAL CRISIS…
> I appreciate a little humor in commercials 67%
> Commercials need to be sensitive to what people are feeling 62%
> Ads showing American patriotism make me feel better about sponsor
> 52%
> Commercials need to acknowledge the current crisis 31%
> I get angry with the sponsors of commercials 18%
> Commercials make me feel like everything will be OK 17%
> All advertising is inappropriate 11%
>
>
> News release index

Flying the unfriendly skies Mar 22nd 2003 From The Economist Global Agenda

America’s big airlines say the war in Iraq could make their current dire predicament turn catastrophic. But this may not be enough to win them further state aid

COULD President George Bush be forced to order the nationalisation of America’s airline network to save it from total collapse? A report on the dire state of the airlines’ finances, published last week by the Air Transport Association (ATA), which represents them, insists that such a dramatic scenario is “not unrealistic”. Since the terrorist attacks in America on September 11th 2001, its airlines have lost a combined $18 billion, in spite of the big aid package that Mr Bush granted the industry shortly afterwards. Now, with a war being waged in Iraq, passenger bookings falling sharply and airlines making heavy cuts in their schedules, America’s main carriers predict that their losses this year, given a fairly short war, will be almost $11 billion. If the war drags on or there are more terrorist attacks in America, the losses could reach $13 billion.

United Airlines, the world’s second-largest carrier, which is already in bankruptcy proceedings (as is US Airways, another big carrier), added to the gloom on March 18th by saying that it was a “distinct possibility” that it may soon close altogether unless it achieves further cuts in wage costs. Though its staff unions have agreed to temporary pay cuts worth $840m annually, the airline is seeking long-term savings on labour costs of around $2.6 billion a year. New forecasts from the Federal Aviation Administration (FAA) on the same day were rather less doom-laden than the industry’s own predictions. Even so, they suggest that passenger traffic will not return to 2001’s levels until perhaps 2006 (see chart).

The FAA admits that its forecast of a gradual recovery in air traffic is at risk from the war and from any further terrorist attacks. A reminder that such risks are real came on March 19th, when home-made bombs were found, and three men arrested under Britain’s Terrorism Act, at an apartment near London’s Gatwick Airport. This follows an incident last month in which a grenade was found in the luggage of a passenger arriving from Venezuela.

America’s transport secretary, Norman Mineta, said the government would be “ready to move very quickly” to provide further aid on top of the $15 billion package announced after the September 11th attacks; and a bill to be introduced in the House of Representatives on March 19th by James Oberstar, a Minnesota Democrat, proposes that the government compensate the airlines for any losses due to the Iraq war and reimburse some of the extra security costs they have suffered since the 2001 terrorist attacks. However, there does not seem much prospect of getting extra subsidies past sceptical White House officials, who are more preoccupied with the likely heavy costs of pursuing the war.

The ATA’s report argues that America’s airlines have already taken significant “self-help” measures to cut their costs and rationalise their schedules. Around 100,000 airline jobs have been cut since September 2001. A further 70,000-100,000 are forecast to go. On March 21st, Northwest Airlines, the world’s fourth-largest carrier, added 4,900 to the redundancy count and said it was cutting 12% of its flights.

This is partly due to the downturn in bookings caused by the expectations of a war in Iraq, and the rise in the cost of fuel, which has doubled in the past six months. But the airlines have also been suffering from a fall in business travel due to the collapse of the dotcom boom. In all, the crisis in the industry goes beyond what might be expected from “normal” market forces, they argue, so there is a strong case for the government to come to the rescue. What the airlines want especially is reimbursement for the $4 billion of extra costs they claim to have suffered due to the extra security measures imposed on them by the government after the September 11th attacks. They also want cuts in taxes on air travel, which they reckon have risen by 180% since 1991, about six times the rate of inflation.

The 1991 Gulf war, triggered by Iraq’s invasion of Kuwait, caused years of losses for America’s airlines. After operating profits of $1.8 billion in 1989, they suffered more than $6 billion of losses in the following three years. Four firms (Pan Am, Eastern, Midway and Markair) went into liquidation. Despite enjoying a period of prosperity in 1995-2000, the industry enters the second Gulf war in an even worse state: the combined debt of America’s big “network” airlines is $100 billion, compared with their combined stockmarket valuation of just $3.2 billion in February.

Latin American airlines are also struggling. On March 21st, Colombia’s Avianca filed for bankruptcy protection in the American courts, as it sought to renegotiate debts of $130m. And Brazil’s heavily indebted flag-carrier, Varig, is seeking an operational merger with its local arch-rival, TAM.

Also on March 21st, KLM of the Netherlands became the latest European carrier to announce big cuts in continental and transatlantic flights. But in general Europe’s and Asia’s airlines are in a better position than America’s to withstand the slump in bookings caused by the war. Formerly troubled carriers like Lufthansa of Germany and Iberia of Spain are in better shape than they were, after making big cost cuts. Europe’s airlines are expected to share profits of $2.6 billion this year, reckons UBS, a bank, while Asia’s will make $3.2 billion.

Back in America, the FAA forecasts that, while the big network carriers will have a slow recovery, short-haul flights (dominated by leaner cut-price airlines) and air cargo will enjoy strong growth. United’s problems are partly the fault of its own staff, who got a stake in the airline in lieu of pay as part of a restructuring in 1994, and have used it to block painful but necessary cost cuts. The management’s threat to close the airline permanently is as much aimed at twisting its unions’ arms to make concessions as at pleading with the government for handouts.

The big airlines that are in bankruptcy proceedings are able to hold off their creditors and can thus try to grab market share by undercutting their rivals, forcing the whole industry to continue offering uneconomically low fares. Unless the government and the airline unions give in to the carriers’ demands, the industry’s crisis could well drag on until one or more of America’s main carriers is forced to close for good. In the meantime, hardy passengers who are prepared to brave the risks of air travel can enjoy fantastically cheap fares. The ATA reckons that tickets, before taxes, are cheaper in nominal terms than in the late 1980s, and therefore much cheaper in real terms. Enjoy it while it lasts.

Whatever the reasons, it is clear that this trend is growing. A government that doesn’t heed these warnings runs the risk of reaching a Tipping Point (hi Lance!) where insurgent ideas lead to insurgent behaviour, on a global scale. That would make 9-11-01 look like an appetizer.

-Ian.

—- http://people-press.org/reports/display.php3?ReportID5

What the World Thinks in 2002 How Global Publics View: Their Lives, Their Countries, The World, America

Released: December 4, 2002

Global Gloom and Growing Anti-Americanism

Despite an initial outpouring of public sympathy for America following the September 11, 2001 terrorist attacks, discontent with the United States has grown around the world over the past two years. Images of the U.S. have been tarnished in all types of nations: among longtime NATO allies, in developing countries, in Eastern Europe and, most dramatically, in Muslim societies.

Since 2000, favorability ratings for the U.S. have fallen in 19 of the 27 countries where trend benchmarks are available. While criticism of America is on the rise, however, a reserve of goodwill toward the United States still remains. The Pew Global Attitudes survey finds that the U.S. and its citizens continue to be rated positively by majorities in 35 of the 42 countries in which the question was asked. True dislike, if not hatred, of America is concentrated in the Muslim nations of the Middle East and in Central Asia, today’s areas of greatest conflict.

Opinions about the U.S., however, are complicated and contradictory. People around the world embrace things American and, at the same time, decry U.S. influence on their societies. Similarly, pluralities in most of the nations surveyed complain about American unilateralism. But the war on terrorism, the centerpiece of current U.S. foreign policy, continues to enjoy global support outside the Muslim world.

While attitudes toward the United States are most negative in the Middle East/Conflict Area, ironically, criticisms of U.S. policies and ideals such as American-style democracy and business practices are also highly prevalent among the publics of traditional allies. In fact, critical assessments of the U.S. in countries such as Canada, Germany and France are much more widespread than in the developing nations of Africa and Asia.

A follow-up six-nation survey finds a wide gap in opinion about a potential war with Iraq. This threatens to further fuel anti-American sentiment and divide the United States from the publics of its traditional allies and new strategic friends. But even on this highly charged issue, opinions are nuanced. Iraq is seen as a threat to regional stability and world peace by overwhelming numbers of people in allied nations, yet American motives for using force against Iraq are still suspect.

Souring attitudes toward America are more than matched by the discontent that people of the planet feel concerning the world at large. As 2002 draws to a close, the world is not a happy place. At a time when trade and technology have linked the world more closely together than ever before, almost all national publics view the fortunes of the world as drifting downward. A smaller world, our surveys indicate, is not a happier one.

The spread of disease is judged the top global problem in more countries than any other international threat, in part because worry about AIDS and other illnesses is so overwhelming in developing nations, especially in Africa. Fear of religious and ethnic violence ranks second, owing to strong worries about global and societal divisions in both the West and in several Muslim countries. Nuclear weapons run a close third in public concern. The publics of China, South Korea and many in the former Soviet Bloc put more emphasis on global environmental threats than do people elsewhere.

Dissatisfaction with the state of one’s country is another common global point of view. In all but a handful of societies, the public is unhappy with national conditions. The economy is the number one national concern volunteered by the more than 38,000 respondents interviewed. Crime and political corruption also emerge as top problems in most of the nations surveyed. Both issues even rival the importance of the spread of disease to the publics of AIDS-ravaged African countries.

These are among the principal findings of the Pew Global Attitudes survey, conducted in 44 nations to assess how the publics of the world view their lives, their nation, the world and the United States. This is the first major report on this survey. The second will detail attitudes toward globalization, modernization, social attitudes and democratization. The International Herald Tribune is our global newspaper partner and conducted in-depth interviews with citizens in five nations, some of which are quoted in this report.

The primary survey was conducted over a four-month period (July-October 2002) among over 38,000 respondents. It was augmented with a separate, six-nation survey in early November, which examined opinion concerning a possible U.S. war with Iraq.

Follow-Up Survey on Iraq

Huge majorities in France, Germany and Russia oppose the use of military force to end the rule of Saddam Hussein. The British public is evenly split on the issue. More than six-in-ten Americans say they would back such an action. But the six-nation poll finds a significant degree of agreement in Europe that Iraq is a threat to the stability of the Middle East and to world peace. More people in all countries polled say the current Iraqi regime poses a danger to peace than say the same about either North Korea or Iran.

Majorities in Great Britain, Germany and France also agree with Americans that the best way to deal with Saddam is to remove him from power rather than to just disarm him. However, the French, Germans and Russians see the conflict between the Israelis and Palestinians as a greater threat to stability in the Middle East than Saddam’s continued rule. The American and British publics both worry more about Iraq than the Israeli-Palestinian conflict.

Turkish respondents differ from Europeans about the danger posed by Iraq. They are divided on whether the regime in Baghdad is a threat to the stability of the region, and just a narrow 44% plurality thinks Saddam Hussein should be removed from power.

Fully 83% of Turks oppose allowing U.S. forces to use bases in their country, a NATO ally, to wage war on Iraq. Further, a 53% majority of Turkish respondents believe the U.S. wants to get rid of Saddam as part of a war against unfriendly Muslim countries, rather than because the Iraqi leader is a threat to peace.

While Europeans view Saddam as a threat, they also are suspicious of U.S. intentions in Iraq. Large percentages in each country polled think that the U.S. desire to control Iraqi oil is the principal reason that Washington is considering a war against Iraq. In Russia 76% subscribe to a war-for-oil view; so too do 75% of the French, 54% of Germans, and 44% of the British. In sharp contrast, just 22% of Americans see U.S. policy toward Iraq driven by oil interests. Two-thirds think the United States is motivated by a concern about the security threat posed by Saddam Hussein.

In addition, respondents in the five nations surveyed (aside from the U.S.) express a high degree of concern that war with Iraq will increase the risk of terrorism in Europe. Two-thirds of those in Turkey say this, as do majorities in Russia, France, Great Britain and Germany. By comparison, 45% of Americans are worried that war will raise the risk of terrorist attacks in the U.S.

Suspicions about U.S. motives in Iraq are consistent with criticisms of America apparent throughout the Global Attitudes survey. The most serious problem facing the U.S. abroad is its very poor public image in the Muslim world, especially in the Middle East/Conflict Area. Favorable ratings are down sharply in two of America’s most important allies in this region, Turkey and Pakistan. The number of people giving the United States a positive rating has dropped by 22 points in Turkey and 13 points in Pakistan in the last three years. And in Egypt, a country for which no comparative data is available, just 6% of the public holds a favorable view of the U.S.

The war on terrorism is opposed by majorities in nearly every predominantly Muslim country surveyed. This includes countries outside the Middle East/Conflict Area, such as Indonesia and Senegal. The principal exception is the overwhelming support for America’s anti-terrorist campaign found in Uzbekistan, where the United States currently has 1,500 troops stationed.

Sizable percentages of Muslims in many countries with significant Muslim populations also believe that suicide bombings can be justified in order to defend Islam from its enemies. While majorities see suicide bombing as justified in only two nations polled, more than a quarter of Muslims in another nine nations subscribe to this view.

U.S. image problems are not confined to Muslim countries. The worldwide polling conducted throughout the summer and fall finds few people, even in friendly nations, expressing a very favorable opinion of America, and sizable minorities in Western Europe and Canada having an unfavorable view. Many people around the world, especially in Europe and the Middle East/Conflict Area, believe the U.S. does not take into account the interests of their country when making international policies. Majorities in most countries also see U.S. policies as contributing to the growing gap between rich and poor nations and believe the United States does not do the right amount to solve global problems.

U.S. global influence is simultaneously embraced and rejected by world publics. America is nearly universally admired for its technological achievements and people in most countries say they enjoy U.S. movies, music and television programs. Yet in general, the spread of U.S. ideas and customs is disliked by majorities in almost every country included in this survey. This sentiment is prevalent in friendly nations such as Canada (54%) and Britain (50%), and even more so in countries where America is broadly disliked, such as Argentina (73%) and Pakistan (81%).

Similarly, despite widespread resentment toward U.S. international policies, majorities in nearly every country believe that the emergence of another superpower would make the world a more dangerous place. This view is shared even in Egypt and Pakistan, where no more than one-in-ten have a favorable view of the U.S. And in Russia, a 53% majority believes the world is a safer place with a single superpower.

The American public is strikingly at odds with publics around the world in its views about the U.S. role in the world and the global impact of American actions. In contrast to people in most other countries, a solid majority of Americans surveyed think the U.S. takes into account the interests of other countries when making international policy. Eight-in-ten Americans believe it is a good thing that U.S. ideas and customs are spreading around the world. The criticism that the U.S. contributes to the gap between rich and poor nations is the only negative sentiment that resonates with a significant percentage of Americans (39%).

Global Discontents

In most countries surveyed, people rate the quality of their own life much higher than the state of their nation; similarly, their rating of national conditions is more positive than their assessment of the state of the world. Even so, the survey finds yawning gaps in perceptions dividing North America and Western Europe from the rest of the world.

Americans and Canadians judge their lives better than do people in the major nations of Western Europe. But that gap is minimal when the publics of the West are contrasted with people in other parts of the world.

Asians, South Koreans excepted, are less satisfied with their lives than are Western publics. Personal contentment is especially low among Chinese and Indian respondents, and relatively few feel they have made personal progress over the past five years. Nevertheless, the Chinese and Indians are extremely optimistic about their futures. In fact, many people in Asia expect their lives to get better. This is the case in the Philippines, Vietnam, South Korea and Indonesia. The Chinese and the Vietnamese, in particular, have great confidence that their children will lead better lives than they have. By contrast, the Japanese are among the gloomiest people in Asia, whether reflecting on the past, present or the future.

[….]

———–

November 9, 2002 Global Trade Looking Glass: Can U.S. Have It Both Ways? By DANIEL ALTMAN

Policies adopted by the Bush administration to advance specific domestic and international goals are undermining the White House’s own efforts to open markets through trade’s global rule-making body, some foreign officials say.

In particular, new farm subsidies and other barriers to the American market have led some of America’s trading partners to doubt Washington’s commitment to free trade, in spite of its ambitious proposals to reduce distortions in world markets. Those doubts, combined with the United States’ pursuit of trade agreements outside the World Trade Organization, have also diminished the pre-eminence of the W.T.O., the critics say. That change may impede a crucial round of global trade negotiations begun substantially through American diplomacy last November in Doha, Qatar.

“The United States was very supportive of some of the positions that those of us from the developing countries took at Doha,” Kofi K. Apraku, Ghana’s minister of trade and industry, said in a telephone interview. “What happened at Doha gave us hope that we could work together.”

But the mood has changed in the last year, he added. “There is a lot of concern and a lot of worry in our country about the United States’ commitment to carry forward the momentum that was created in Doha,” Dr. Apraku said.

In response, Robert B. Zoellick, the United States trade representative, said that all negotiators have to balance domestic concerns with those of their trading partners. “Many countries had to stretch politically and then had to deal with sensitivities back home,” he said in an interview earlier this week, “so a pause for repositioning is understandable.” Mr. Zoellick added that he was optimistic that the talks would succeed on schedule. “We’re not refusing to discuss anything,” he said. “I believe we can get the Doha negotiation done by 2005, if key developed and developing countries make the effort.”

Chief among Ghana’s concerns is the Farm Security and Rural Investment Act of 2002, generally referred to as the farm bill. The law will protect American farmers from slumps in the business cycle, but critics say it may also encourage farmers to overproduce. That would depress world prices for crops. Ghana does not export all the same crops as the United States, but Dr. Apraku said the bill set a bad precedent.

“It is a major concern for us in Ghana,” Dr. Apraku said. “We are a developing country. Agriculture is very important to us.” Farming accounts for 36 percent of Ghana’s economy and 60 percent of its jobs.

Ghana is not alone. “It is clear that the United States farm bill is not very popular in Canada, either,” said Pierre S. Pettigrew, Canada’s minister for international trade. “It certainly requires more explanation on the part of the United States.”

Experts estimate the farm bill, signed by President Bush last spring, could increase federal spending on agriculture by 70 percent over the next six years, to as much as $180 billion, potentially violating limits for farm support set during the last round of global trade talks, but Mr. Zoellick’s office disputed that.

Supachai Panitchpakdi, the director general of the W.T.O., said the increase in subsidies under the farm bill had hampered the new round of global trade talks. “It has created some questions, some doubts in the mind of some countries,” he said, “and has sometimes been used to delay some of the proposals.”

Dr. Supachai also noted that the talks were behind schedule. Negotiators missed a deadline for submitting a report on trade preferences for poor countries to the W.T.O.’s general council. “When the members missed the July deadline,” he said, “the prevailing view of the developing countries was a bit of disappointment — that they were let down.”

Mr. Zoellick said that the deadline had come too soon, since the overall shape of the negotiations — whether they would apply to tariffs, subsidies, quotas or other items — was still unclear.

He also said critics were overstating concerns about the farm bill. “The farm bill does nothing in terms of tariffs or market access,” he said. “It doesn’t change our policy on export subsidies.” Additional annual appropriations to subsidize farmers, he asserted, could make the situation problematic.

In addition to complaints about specific policies, some critics have also objected to Mr. Zoellick’s simultaneous pursuit of trade pacts with individual countries, with regional bodies like the Free Trade Area of the Americas and with the W.T.O. While that approach ensures against any one set of talks collapsing, diplomats say it also puts some negotiating partners at a disadvantage. Small countries in particular often lack the expertise to engage in three sets of talks, and the comprehensive negotiations at the W.T.O. could be shortchanged.

“The fact that our trade negotiators are so busy with the W.T.O., with the F.T.A.A. and with the bilaterals, causes a problem for all of us, not only for smaller countries,” Mr. Pettigrew of Canada said.

The Workers’ Party of Brazil, which will soon govern that country’s economy, the biggest in South America, plans to make the Free Trade Area of the Americas — not the W.T.O. — a top priority. “The schedule is more urgent on that,” said Giancarlo Summa, a party spokesman, “and of course there will be much more diplomatic pressure.”

The Free Trade Area of the Americas would lower and eliminate tariffs on goods traded among 34 countries on the two continents, and could shape the rules for trade in services and foreign investment.

For Chile, by contrast, a long-awaited bilateral agreement with the United States is “in the front of the road,” said Osvaldo Rosales, the country’s top trade negotiator.

Though Mr. Rosales asserted that bilateral and regional trade agreements would serve as an important test for American leadership in the W.T.O., he also said that the existence of such pacts could make the negotiations at the W.T.O. more difficult.

Dr. Apraku was even blunter. “These negotiations will reduce the scope of the W.T.O.’s influence,” he said.

Though a proliferation of trade deals could enhance African countries’ negotiating skills and influence, it could also deflect attention from the overall effort to improve the living standards of the poorest countries by bringing them more fully into the global trading system.

Mr. Zoellick affirmed the United States’ commitment to seeing negotiations through at all levels. He said he intended to complete free trade agreements with Chile and Singapore by the end of this year, and the pan-American and W.T.O. negotiations by the end of President Bush’s current term.

Yet worries about populist governments in Argentina and Brazil seem to have made neighboring nations more eager to sign bilateral deals. Panama, the Dominican Republic, Bolivia, Colombia, Peru and other countries have approached the United States, Mr. Zoellick said.

“They don’t want to be left out,” he said.

That suits Mr. Zoellick. “We will work with Brazil because its participation is important,” he said, “but if it doesn’t work, we’ve got to have alternatives.”

Developing countries have also taken issue with Mr. Zoellick’s opinion of the United States’ importance to the global trading system.

“Doha wouldn’t have happened if it weren’t for the United States,” he said. “The United States has an added responsibility for the trading and international economic system as a whole,” he added later.

Rafidah Aziz, Malaysia’s minister of international trade and industry, said that view might be overblown. She predicted that Mr. Zoellick would be “tearing his hair out” if he tried to strong-arm smaller members of the W.T.O. “No one can force anyone to do anything there, least of all the United States,” she said.

Sherman E. Katz, a scholar of trade policy at the Center for Strategic and International Studies, a policy center here that Mr. Zoellick used to head, said that the United States still provided much of the intellectual energy behind talks on complex issues like intellectual property and trade in services. He concurred, though, with Ms. Aziz’s central point.

“We can’t throw our economic clout around on the W.T.O. table as much as we used to,” he said.

Poorer members of the W.T.O. do not face an easy task. At least 50 issues related to carrying out the last global trade pact — a primary concern of developing nations — are on the table to be discussed before the end of this year.

“We are mobilizing ourselves so that we can have some leverage, make some difference, in these meetings,” Dr. Apraku said. “We do not want to be marginalized.”

———–

Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety. – Ben Franklin (1706-1790) Historical Review of Constitution and Government of Pennsylvania.

On 27 October 2002

The Observer, London

The ENEMY WITHIN by Gore Vidal

On 24 August, 1814, things looked very dark for freedom1s land. That was the day the British captured Washington DC and set fire to the Capitol and the White House. President Madison took refuge in the nearby Virginia woods where he waited patiently for the notoriously short attention span of the Brits to kick in, which it did. They moved on and what might have been a Day of Utter Darkness turned out to be something of a bonanza for the DC building trades and up-market realtors.

One year after 9/11, we still don’t know by whom we were struck that infamous Tuesday, or for what true purpose. But it is fairly plain to many civil libertarians that 9/11 put paid not only to much of our fragile Bill of Rights but also to our once-envied system of government which had taken a mortal blow the previous year when the Supreme Court did a little dance in 5/4 time and replaced a popularly elected president with the oil and gas Cheney-Bush junta.

Meanwhile, our more and more unaccountable government is pursuing all sorts of games around the world that we the spear- carriers (formerly the people) will never learn of. Even so, we have been getting some answers to the question: why weren1t we warned in advance of 9/11? Apparently, we were, repeatedly; for the better part of a year, we were told there would be unfriendly visitors to our skies some time in September 2001, but the government neither informed nor protected us despite Mayday warnings from Presidents Putin and Mubarak, from Mossad and even from elements of our own FBI. A joint panel of congressional intelligence committees reported (19 September 2002, New York Times) that as early as 1996, Pakistani terrorist Abdul Hakim Murad confessed to federal agents that he was learning to fly in order to crash a plane into CIA HQ.

Only CIA director George Tenet seemed to take the various threats seriously. In December 1998, he wrote to his deputies that “we are at war” with Osama bin Laden. So impressed was the FBI by his warnings that by 20 September 2001, “the FBI still had only one analyst assigned full time to al-Qaeda”.

From a briefing prepared for Bush at the beginning of July 2001: “We believe that OBL (Osama bin Laden) will launch a significant terrorist attack against US and/or Israeli interests in the coming weeks. The attack will be spectacular and designed to inflict mass casualties against US facilities or interests. Attack preparations have been made. Attack will occur with little or no warning.” And so it came to pass; yet Condoleezza Rice, the National Security Advisor, says she never suspected that this meant anything more than the kidnapping of planes.

Happily, somewhere over the Beltway, there is Europe-recently declared anti-semitic by the US media because most of Europe wants no war with Iraq and the junta does, for reasons we may now begin to understand thanks to European and Asian investigators with their relatively free media.

On the subject, “how and why America was attacked on 11 September 2001”, the best, most balanced report, thus far is by Nafeez Mossadeq Ahmed… Yes, yes, I know he is one of Them. But they often know things that we don1t-particularly about what we are up to. A political scientist, Ahmed is executive director of the Institute for Policy Research and Development “a think-tank dedicated to the protection of human rights, justice and peace” in Brighton. His book, The War on Freedom, has just been published in the US by a small, but reputable publisher.

Ahmed provides a background for our ongoing war against Afghanistan, a view that in no way coincides with what the administration has told us. He has drawn on many sources, most tellingly on American whistle-blowers who are beginning to come forth and bear witness ? like those FBI agents who warned their superiors that al-Qaeda was planning a kamikaze strike against New York and Washington only to be told that if they went public with these warnings under the National Security Act. Several of these agents have engaged David P. Schippers, chief investigative counsel for the US House Judiciary Committee, to represent them in court. That majestic Schippers managed the successful impeachment of President Clinton in the House of Representatives. He may, if the Iraqi war should go wrong, be obliged to perform the same high service for Bush, who allowed the American people to go unwarned about an imminent attack upon two of our cities as preemption of a planned military strike by the US against the Taliban.

The Guardian (26 September 2001) reported that in July 2001, a group of interested parties met in a Berlin hotel to listen to a former State Department official, Lee Coldren, as he passed on a message from the Bush administration that “the United States was so disgusted with the Taliban that they might be considering some military action the chilling quality of this private warning was that it came-according to one of those present, the Pakistani diplomat Niaz Naik-accompanied by specific details of how Bush would succeed…” Four days earlier, the guardian had reported that “Osama bin Laden and the Taliban received threats of possible American military action against them two months before the terrorist assaults on New York and Washington… (which) raises the possibility that bin Laden was launching a pre-emptive strike in response to what he saw as US threats.” A replay of the ‘day of infamy’ in the Pacific 62 years earlier?

Why the US needed a Eurasian adventure

On 9 September 2001, Bush was presented with a draft of a national security presidential directive outlining a global campaign of military, diplomatic and intelligence action targeting al-Qaeda, buttressed by the threat of war. According to NBC News: ‘President Bush’ was expected to sign detailed plans for a worldwide war against al-Qaeda but did not have a chance before the terrorist attacks… The directive, as described to NBC News, was essentially the same war plan as the one put into action after 11 September. The administration most likely was able to respond so quickly… because it simply had to pull the plans “off the shelf”.”

Finally, BBC News, 18 September 2001: “Niaz Naik, a former Pakistani foreign secretary, “was told by senior American officials in mid-July that military action against Afghanistan would go ahead by the middle of October. It was Naik1s view that Washington would not drop its war for Afghanistan even if bin Laden were to be surrendered immediately by the Taliban.”

Was Afghanistan then turned to rubble in order to avenge the 3,000 Americans slaughtered by Osama? Hardly. The administration is convinced that Americans are so simple minded that they can deal with no scenario more complex than the venerable lone, crazed killer (this time with zombie helpers) who does evil just for the fun of it ’cause he hates us, ’cause we’re rich ‘n and free ‘n he’s not, Osama was chosen on aesthetic grounds to be the frightening logo for our long-contemplated invasion and conquest of Afghanistan, planning for which had been “contingency” some years before 9/11 and, again, from 20 December 2000, when Clinton1s outgoing team devised a plan to strike at al-Qaeda in retaliation for the assault on the warship Cole. Clinton1s National Security Adviser, Sandy Berger, personally briefed his successor on the plan but Rice, still very much in her role as a director of Chevron-Texaco, with special duties regarding Pakistan and Uzbekistan, now denies any such briefing. A year and a half later (12 August 2002), fearless Time magazine reported this odd memory lapse.

Osama, if it was he and not a nation, simply provided the necessary shock to put in train a war of conquest. But conquest of what? What is there in dismal in dry sandy Afghanistan worth conquering? Zbigniew Brzezinski tells us exactly what in a 1997 Council on Foreign Relations study called The Grand Chessboard: American Primacy and its Geostrategic Imperitives.

The Polish-born Brzezinski was the hawkish National Security Adviser to President Carter. In The Grand Chessboard, Brzezinski gives a little history lesson. “Ever sense the continents started interacting politically, some 500 years ago, Eurasia has been the centre of world power.” Eurasia is all the territory east of Germany. This means Russia, the Middle East, China, and parts of India. Brzezinski acknowledges that Russia and China, bordering oil rich central Asia, are the two main powers threatening US hegemony in that area.

He takes it for granted that the US must exert control over the former Soviet Republics of Central Asia, know to those who love them as “the Stans”: Turkmenistan, Uzbekistan, Tajikstan and Kyrgyzstan all ‘of importance from the standpoint of security and historical ambitions to at least three of their most immediate and most powerful neighbors-Russia, Turkey and Iran, with China signaling’. Brzezinski notes how the world’s energy consumption keeps increasing; hence, who controls Caspian oil/gas will control the world economy. Brzezinski then, reflexively, goes into the standard American rationalization for empire. We want nothing, ever, for ourselves, only to keep bad people from getting good things with which to hurt good people. It follows that Americas primary interest is to help ensure that no single (other) power comes to control the geopolitical space and that the global community has unhindered financial and economic access to it.”

Brzezinski is quite aware that American leaders are wonderfully ignorant of history and geography so he really lays it on, stopping just short of invoking politically incorrect manifest destiny. He reminds the Council just how big Eurasia is. Seventy-five percent of the worlds population is Eurasian. If I have done the sums right, that means weve only got control, to date, of a mere 25 percent of the world1s folks. More! Eurasia accounts for 60% of the worlds GNP and three-fourths of the world1s known energy resources.”

Brzezinskis master plan for our globe has obviously been accepted by the Cheney-Bush junta. Corporate America, long over-excited by Eurasian mineral wealth, has been aboard from the beginning.

Ahmed sums up: Brzezinski clearly envisaged that the establishment, consolidation and expansion of US military hegemony over Eurasia through Central Asia would require the unprecedented open-ended militarisation of foreign policy, coupled with an unprecedented manufacture of domestic support and consensus on this militarisation campaign.

Afghanistan is the gateway of all these riches. Will we fight to seize them? It should never be forgotten that the American people in either of the twentieth century1s world wars but President Wilson maneuvered us into the first while Roosevelt maneuvered the Japanese into striking the first blow at Pearl Harbor, causing us to enter the second as the result of a massive external attack. Brzezinski understands all this and, in 1997, he is thinking ahead-as well as backward. “Moreover, as America becomes an increasingly multicultural society, it may find it more difficult to fashion a consensus on foreign policy issues, except in the circumstance of a truly massive and widely perceived direct external threat.” Thus was the symbolic gun produced that belched black smoke over Manhattan and the Pentagon.

Since the Iran-Iraq wars, Islam has been demonised as a Satanic terrorist cult that encourages suicide attacks – contrary, it should be noted, to the Islamic religion. Osama has been portrayed, accurately, it would seem, as an Islamic zealot. In order to bring this evil-doer to justice (“dead or alive”), Afghanistan, the object of the exercise, was made safe not only for democracy but for Union oil of California whose proposed pipeline from Turkmenistan to Afghanistan to Pakistan and the Indian Ocean port of Karachi, had been abandoned under the Taliban1s chaotic regime. Currently, the pipeline is a go-project thanks to the junta’s installation of a Unocal employee (John J. Maresca) as US envoy to the newly born democracy whose president, Hamid Karzai, is also, according to Le Monde, a former employee of a Unocal subsidiary. Conspiracy? Coincidence!

Once Afghanistan looked to be within the fold, the junta, which had managed to pull off a complex diplomatic-military caper, abruptly replaced Osama, the personification of evil, with Saddam. This has been hard to explain since there is nothing to connect Iraq with 9/11. Happily, “evidence” is now being invented, but it is uphill work, not helped by stories in the press about the vast oil wealth of Iraq which must ? for the sake of the free world- be reassigned to us and European Consortiums.

As Brzezinski foretold, “a truly and massive and widely perceived direct external threat made it possible for the president to do a war dance before congress. “A long war!” he shouted with glee. Then he named and incoherent axis of evil to be fought. Although Congress did not give him the FDR Special-a declaration of war-he did get permission to go after Osama who may now be skulking in Iraq.

Bush and the dog that did not bark

Post – 9/11, the American media were filled with pre-emptory denunciations of unpatriotic conspiracy theorists, who not only are always with us but are usually easy for the media to discredit since it is an article of faith that there are no conspiracies in American life. Yet, a year or so ago, who would have thought that the most corporate America had been conspiring with accountants to cook their books since ? well, at least the bright dawn of the age of Reagen and deregulation. Ironically, less that a year after the massive danger from without, we were confronted with an even greater enemy from within: Golden Calf Capitalism. Transparency? One fears that greater transparency will only reveal armies of maggots at work beneath the skin of a culture that needs a bit of a lie-down in order to collect itself before taking its next giant step which is to conquer Eurasia, a potentially fatal adventure not only for our frazzled institutions but for us the presently living.

Complicity. The behavior of President George W. Bush on 11 September certainly gives rise to all sorts of not unnatural suspicions. I can think of no other modern chief of state who would continue to pose for warm pictures of himself listening to a young girl telling stories about her pet goat while hijacked planes were into three famous buildings.

Constitutionally, Bush is not only chief of state, he is commander-in-chief of the armed forces. Normally, a commander in such a crisis would go straight to headquarters and direct operations while receiving the latest intelligence.

This is what Bush actually did-or did not do-according to Stan Goff, a retired US Army veteran who has taught military science and doctrine at West Point. Goff writes, in The So-called Evidence is a Farce: “I have no idea why people arent asking some very specific questions about the actions of Bush and company on the day of the attacks. Four planes get hijacked and deviate from their plan, all the while on FAA radar.”

Goff, incidentally, like the other astonished military experts, cannot fathom why the government’s automatic ‘standard order of procedure in the event of a hijacking’ was not followed. Once a plane has deviated from its flight-plan, fighter planes are sent up to find out why. That is law and does not require presidential approval, which only needs to be given if there is a decision to shoot down a plane. Goff spells it out: The planes were hijacked between 7:45 and 8:10 am. Who is notified? This is an event already that is unprecedented. But the President is not notified and going to a Florida elementary school to hear children read.

By around 8:15 am it should be very apparent that something is terribly wrong. The President is glad-handing teachers. By 8:45 when American Airlines Flight 11 crashes into the North Tower, Bush is settling in with children for his photo op. Four planes have obviously been hijacked simultaneously and one has just dived into the twin towers, and still no one notifies the nominal Commander-in-Chief. ‘No one has apparently scrambled (sent aloft) Air Force interceptors either. At 9:03, Flight 175 crashes into the South Tower. At 9:05 Andrew Card, the Chief of Staff whispers to Bush (who) ‘briefly turns sombre’ according to reporters. Does he cancel the school visit and convene an emergency meeting? No. He resumes listening to second graders… and continues the banality even as American Airlines Flight 77 conducts an unscheduled point turn over Ohio and heads in the direction of Washington DC.

‘Has he instructed Card to scramble the Air Force? No. An excruciating 25 minutes later, he finally deigns to give a public statement telling the United States what they have already figured out ? that there1s been an attack on the World Trade Centre. There1s a hijacked plane bee-lining to Washington, but has the Air Force been scrambled to defend anything yet? No.

At 9:35, this plane conducts another turn, 360 degree over the Pentagon, all the while being tracked by radar, and the Pentagon is not evacuated, and there are still no fast-movers from the Air Force in the sky over Alexandria and DC. Now the real kicker: a pilot they want us to believe was trained at a Florida puddle-jumper school Piper Cubs and Cessnas, conducts a well-controlled downward spiral descending the last 7,000 feet in two-and-a-half minutes, brings the plane in so low and flat that it clips the electrical wires from across the street from the Pentagon, and flies it with pinpoint accuracy into the side of the building at 460 knots.

When the theory about learning to fly this well at the puddle-jumper school began to lose ground, it was added that they received further training on a flight simulator. This is like saying you prepared your teenager for her first drive on the freeway at rush hour by buying her a video driving game There is a story being constructed about these events.

There is indeed and the more it is added to the darker it becomes. The nonchalance of General Richard B. Myers, acting Joint Chief of Staff, is as puzzling as the Presidents campaigning-as-usual act. Meyers was at the Capitol chatting with Senator Max Cleland. A sergeant, writing later in the AFPS (American Forces Press Service) describes Myers at the Capitol. While in an outer office, he said, he saw a television report that a plane had hit the World Trade Centre. “They thought it was a small plane or something like that,” Myers said. So the two men went ahead with the office call.

Whatever Myers and Cleland had to say to each other (more funds for the military?) must have been riveting because, during their chat, the AFPS reports, the second tower was hit by another jet. “nobody informed us of that,” Myers said. “But when we came out, that was obvious. Then, right at that time, somebody said the Pentagon had been hit.” Finally, somebody thrust a cellphone in Myers hand and, as if by magic, the commanding general of Norad ? our Airspace Command ? was on the line just as the hijackers mission had been successfully completed except for the failed one in Pennsylvania. In later testimony to the Senate Armed Forces Committee, Myers says he thinks that, as of his cellphone talk with Norad, the decision was at that point to start launching aircraft, It was 9:40 AM. One hour and 20 minutes after air controllers knew that Flight 11 had been hijacked; 50 minutes after the North Tower was struck.

This statement would have been quite enough in our old serious army/air force to launch a number of courts martial with an impeachment or two thrown in. First, Myers claims to be uninformed until the third strike. But the Pentagon had been overseeing the hijacked planes from at least the moment of the strike at the first tower: yet not until the third strike, at the Pentagon, was the decision made to get the fighter planes up. Finally, this one is the dog that did not bark. By law, the fighters should have been up at around 8:15. If they had, all the hijacked planes might have been diverted or shot down. I don1t think Goff is being unduly picky when he wonders who and what kept the Air Force from following its normal procedure instead of waiting an hour and 20 minutes until the damage was done and only then launching the fighters. Obviously, somebody had ordered the Air Force to make no move to intercept those hijackings until… what?

On 21 January 2002, the Canadian media analyst Barry Zwicker summed up on CBS-TV: That morning no interceptors responded in a timely fashion to the highest alert situation. This includes the Andrews squadrons which are 12 miles from the White House Whatever the explanation for the huge failure, there have been no reports, to my knowledge, of reprimands. This further weakens the “Incompetence Theory”. Incompetence usually earns reprimands. This causes me to ask whether there were “stand down” orders.?? On 29 August 2002, the BBC reports that on 9/11 there were only four-fighters on ready status in the north-eastern US. Conspiracy? Coincidence? Error?

It is interesting how often in our history, when disaster strikes, incompetence is considered a better alibi than well, yes, there are worse things. After Pearl Harbor, Congress moved to find out why Hawaiis two military commanders, General Short and Admiral Kimmel, had not anticipated the Japanese attack. But President Roosevelt pre-empted that investigation with one of his own. Short and Kimmel were broken for incompetence. The truth is still obscured to this day.

The medias weapons of mass distraction

BUT PEARL HARBOR has been much studied. 11 September, it is plain, is never going to be investigated if Bush has anything to say about it. In January 2002, CNN reported that Bush personally asked Senate Majority Leader Tom Daschle to limit the Congressional investigation into the events of 11 September The request was made at a private meeting with Congressional leaders Sources said Bush initiated the conversation He asked that only the House and Senate intelligence committees look into the potential breakdowns among federal agencies that could have allowed the terrorist attacks to occur, rather than a broader inquiry Tuesdays discussion followed a rare call from Vice President Dick Cheney last Friday to make the same request

The excuse given, according to Daschle, was that resources and personnel would be taken away from the war on terrorism in the event of a wider inquiry. So for reasons that we must never know, those breakdowns are to be the goat. That they were more likely to be not break- but stand-downs is not for us to pry. Certainly the one-hour 20-minute failure to put fighter planes in the air could not have been due to a breakdown throughout the entire Air Force along the East Coast. Mandatory standard operating procedure had been told to cease and desist.

Meanwhile, the media were assigned their familiar task of inciting public opinion against bin Laden, still not the proven mastermind. These media blitzes often resemble the magicians classic gesture of distraction: as you watch the rippling bright colours of his silk handkerchief in one hand, he is planting the rabbit in your pocket with the other. We were quickly assured that Osamas enormous family with its enormous wealth had broken with him, as had the royal family of his native Saudi Arabia. The CIA swore, hand on heart, that Osama had not worked for them in the war against the Soviet occupation of Afghanistan. Finally, the rumour that Bush family had in any way profited by its long involvement with bin Laden family was ? what else? ? simply partisan bad taste.

But Bush Jrs involvement goes back at least to 1979 when his first failed attempt to become a player in the big Texas oil league brought him together with one James Bath of Houston, a family friend, who gave Bush Jr. $50,000 for a 5 per cent stake in Bushs firm Arbusto Energy. At this time, according to Wayne Madsen (In These Times ? Institute for Public Affairs No. 25), Bath was the sole US business representative for Salem bin Laden, head of the family and a brother (one of 17) to Osama bin Laden In a statement issued shortly after the 11 September attacks, the White House vehemently denied the connection, insisting that Bath invested his own money, not Salem bin Ladens in Arbusto. In conflicting statements, Bush at first denied ever knowing Bath, then acknowledged his stake in Arbusto and that he was aware Bath represented Saudi interests after several reincarnations, Arbusto emerged in 1986 as Harken Energy Corporation.

Behind the junior Bush is the senior Bush, gainfully employed by the Carlyle Group which has ownership in at least 164 companies worldwide, inspiring admiration in that staunch friend to the wealthy, the Wall Street Journal, which noted, as early as 27 September 2001, If the US boosts defence spending in its quest to stop Osama bin Ladens alleged terrorist activities, there may be one unexpected beneficiary: bin Ladens family is an investor in a fund established by Carlyle Group, a well connected Washington merchant bank specialising in buyouts of defence and aerospace companies Osama is one of more than 50 children of Mohammed bin Laden, who built the familys $5 billion business.

But Bush pere et fils, in pursuit of wealth and office, are beyond shame or, one cannot help but think, good sense. There is a suggestion that they are blocking investigation of the bin Laden connection with terrorism. Agence France Press reported on 4 November 2001: FBI agents probing relatives of Saudi-born terror suspect Osama were told to back off soon after George W. Bush became president According to BBC TVs News-night (6 Nov 2001), just days after the hijackers took off from Boston aiming for the Twin Towers, a special charter flight out of the same airport whisked 11 members of Osamas family off to Saudi Arabia. That did not concern the White House, whose official line is that the bin Ladens are above suspicion. Above the Law (Green Press, 14 February 2002) sums up: We had what looked like the biggest failure of the intelligence community since Pearl Harbor but what we are learning now is it wasnt a failure, it was a directive. True? False? Bush Jr will be under oath during the impeachment interrogation. Will we hear What is a directive? What is is?

Although the US had, for some years, fingered Osama as a master-mind terrorist, no serious attempt had been made pre-9/11 to bring him to justice dead or alive, innocent or guilty, as Texan law of the jungle requires. Clintons plan to act was given to Condoleezza Rice by Sandy Berger, you will recall, but she says she does not.

As far back as March 1996 when Osama was in Sudan, Major General Elfatih Erwa, Sudanese Minister for Defense, offered to extradite him. According to the Washington Post (3 October 2001), “Erwa said he would happily keep close watch on bin Laden for the United States. But if that would not suffice, the government was prepared to place him in custody and hand him over (US officials) said, “just ask him to leave the country. Just dont let him go to Somalia”, where he had once been given credit for the successful al-Qaeda attack on American forces in 93 that killed 18 Rangers.” Erwa said in an interview, “We said he will go to Afghanistan, and they (US officials) said, “Let him.”

In 1996 Sudan expelled Osama and 3,000 of his associates. Two years later the Clinton administration, in the great American tradition of never having to say thank you for Sudans offer to hand over Osama, proceeded to missile-attack Sudans al-Shifa pharmaceutical factory on the grounds that Sudan was harboring bin Laden terrorists who were making chemical and biological weapons when the factory was simply making vaccines for the UN.

Four years later, John ONeill, a much admired FBI agent complained in the Irish Times a month before the attacks, “The US State Department-and behind it the off lobby who make up President Bushs entourage ? blocked attempts to prove bin Ladens guilt. The US ambassador to Yemen forbade ONeill (and his FBI team) from entering Yemen in August 2001. ONeill resigned in frustration and took on a new job as head of security at the World Trade Centre. He died in the 11 September attack.” Obviously, Osama has enjoyed bipartisan American support since his enlistment in the CIA1s war to drive the Soviets out of Afghanistan. But by 9/11 there was no Soviet occupation of Afghanistan, indeed there was no Soviet Union.

A World Made Safe for Peace and Pipelines

I watched Bush and Cheney on CNN when the Axis of Evil speech was given and the long war proclaimed. Iraq, Iran and North Korea were fingered as enemies to be clobbered because they might or might not be harboring terrorists who might or might not destroy us in the night. So we must strike first whenever it pleases us. Thus, we declared “war on terrorism” ? an abstract noun which cannot be a war at all as you need a country for that. Of course, there was innocent Afghanistan, which was leveled from a great height, but then whats collateral damage ? like an entire country ? when youre targeting the personification of all evil according to Time and the NY Times and the networks?

As it proved, the conquest of Afghanistan had nothing to do with Osama. He was simply a pretext for replacing the Taliban with a relatively stable government that would allow Union Oil of California to lay its pipeline for the profit of, among others, the Cheney-Bush junta.

Background? All right. The headquarters of Unocal are, as might be expected, in Texas. In December 1997, Taliban representatives were invited to Sugarland, Texas. At that time, Unocal had already begun training Afghan men in pipeline construction, with US government approval. BBC News, (4 December 1997): A spokesperson for the company Unocal said the Taliban were expected to spend several days at the companys (Texas) Headquarters a BBC regional correspondent says the proposal to build a pipeline across Afghanistan is part of an international scramble to profit from developing the rich energy resources of the Caspian Sea. The Inter Press Service (IPS) reported: some Western businesses are warming up to the Taliban despite the movements institutionalization of terror, massacres, abductions and impoverishment. CNN (6 October 1996): The United States wants good ties (with the Taliban) but cant openly seek them while women are being oppressed.

The Taliban, rather better organized than rumoured, hired for PR one Leila Helms, a niece of Richard Helms, former Director of the CIA. In October 1996, the Frankfurter Rundschau reported that Unocal has been given the go ahead from the new holders of power in Kabul to build a pipeline from Turkmenistan via Afghanistan to Pakistan This was a real coup for Unocal as well as other candidates for pipelines, including Condoleezzas old employer Chevron. Although the Taliban was already notorious for its imaginative crimes against the human race, the Wall Street Journal, scenting big bucks, fearlessly announced: “Like them or not, the Taliban are the players most capable of achieving peace in Afghanistan at this moment in history.” The NY Times (26 May 1997) leapt aboard the pipeline juggernaut. The Clinton administration has taken the view that a Taliban victory would act as counterweight to Iran and would offer the possibility of new trade routes that could weaken Russian and Iranian influence in the region.

But by 1999, it was clear that the Taliban could never provide us the security we would need to protect our fragile pipelines. The arrival of Osama as warrior for Allah on the scene refocused, as it were, the bidding. New alliances were now being made. The Bush administration soon buys the idea of an invasion of Afghanistan, Frederick Starr, head of the Central Asia Institute at Johns Hopkins University, wrote in the Washington Post (19 December, 2000): The US has quietly begun to align itself with those in the Russian government calling for military action against Afghanistan and has toyed with the idea of a new raid to wipe out bin Laden.

Although with much fanfare we went forth to wreak our vengeance on the crazed sadistic religious zealot who slaughtered 3,000 American citizens, once that war was under way, Osama was dropped as irrelevant and so we are back to the Unocal pipeline, now a go-project. In the light of what we know today, it is unlikely that the junta was ever going to capture Osama alive: he has tales to tell. One Defense Secretary Donald Rumsfeld1s best number now is: “Where is he? Somewhere? Here? There? Somewhere? Who knows?” And we get his best twinkle. He must also be delighted ? and amazed ? that the media have bought the absurd story that Osama, If alive, would still be in Afghanistan, underground, waiting to be flushed out instead of in a comfortable mansion in Osama-loving Jakarta, 2,000 miles to the East and easily accessible by the Flying Carpet One.

Many commentators of a certain age have noted how Hitlerian our junta sounds as it threatens first one country for harbouring terrorists and then another. It is true that Hitler liked to pretend to be the injured ? or threatened ? party before he struck. But he had many great predecessors not lest Imperial Rome. Stephen Gowans War in Afghanistan : A $28 Billion Racket quotes Joseph Schumpeter who, “in 1919, described ancient Rome in a way that sounds eerily like the United States in 2001: “There was no corner of the known world where some interest was not alleged to be in danger or under actual attack. If the interests were not Roman, they were those of Romes allies; and if Rome had no allies, the allies would be invented The fight was always invested with an aura of legality. Rome was always being attacked by evil-minded neighbors.” We have only outdone the Romans in turning metaphors such as the war on terrorism, or poverty, or Aids into actual wars on targets we appear, often, to pick at random in order to maintain turbulence in foreign lands.

As of 1 August 2002, trial balloons were going up all over Washington DC to get world opinion used to the idea the Bush of Afghanistan had gained a title as mighty as his fathers Bush of the Persian Gulf and Junior was now eager to add Iraq-Babylon to his diadem. These various balloons fell upon Europe and the Arab world like so many lead weights. But something new has been added since the classic Roman Hitlerian mantra, they are threatening us, we must attack first. Now everyone is more or less out in the open. The International Herald Tribune wrote in August 2002: The leaks began in earnest on 5 July, when the New York Times described a tentative Pentagon plan that it said called for an invasion by a US force of up to 250,000 that would attack Iraq from the north, south and west. On 10 July, the Times said that Jordan might be used as a base for the invasion. The Washington Post reported, 28 July, that “many senior US military officers contend that Saddam Hussein poses no immediate threat” And the status quo should be maintained. Incidentally, this is the sort of debate that the founding fathers intended the Congress, not the military bureaucrats, to conduct in the name of we the people. But that sort of debate has, for a long time, been denied us.

One refreshing note is now being struck in a fashion unthinkable in imperial Rome: the cheerful admission that we habitually resort to provocation. The Tribune continues: Donald Rumsfeld has threatened to jail anyone found to have been behind the leaks. But a retired army general, Fred Woerner, tends to see a method behind the leaks. “We may already be executing a plan,” he said recently. “Are we involved in a preliminary psychological dimension of causing Iraq to do something to justify a US attack or make concessions? Somebody knows. That is plain.

Elsewhere in this interesting edition of the Herald Tribune wise William Pfaff writes: A second Washington debate is whether to make an unprovoked attack on Iran to destroy a nuclear power reactor being built with Russian assistance, under inspection by the International Atomic Energy Agency, within the terms of the Nuclear Non-proliferation Treaty of which Iran is a signatory No other government would support such an action, other than Israil’ (which) would do so not because it expected to be attacked by Iran but because it, not unjustifiably, opposes any nuclear capacity in the hands of any Islamic government.

Suspect states and the tom-toms of revenge

Of all the enemies to public liberty, war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. As the parent of armies, war encourages debts and taxes, the known instrument for bringing the many under the domination of the few. In war, too, the discretionary power of the executive is extended and all the means of seducing the minds, are added to those of subduing the force, or the people Thus, James Madison warned us at the dawn of our republic.

Post 9/11, thanks to the domination of the few, Congress and the media are silent while the executives, through propaganda and skewed polls, seduces the public mind as hitherto unthinkable centres of power like Homeland Defence (a new Cabinet post to be placed on top of the Defence Department) are being constructed and 4 percent of the country has recently been invited to join Tips, a civilian spy system to report on anyone who looks suspicious or who objects to what the executive is doing at home or abroad?

Although every nation knows how ? if it has the means and the will ? to protect itself from thugs of the sort that brought us 9/11, war is not an option. Wars are for nations not rootless gangs. You put a price on their heads and hunt them down. In recent years, Italy has been doing just that with the Sicilian Mafia; and no one has yet suggested bombing Palermo.

But the Cheney-Bush junta wants a war in order to dominate Afghanistan, build a pipeline, gain control of the oil of Eurasias Stans for their business associates as well as to do as much damage to Iraq and Iran on the grounds that one day those evil countries may carpet our fields of amber, grain with anthrax or something.

The media, never much good at analysis, are more and more breathless and incoherent. On CNN, even the stolid Jim Clancy started to hyperventilate when an Indian academic tried to explain how Iraq was once our ally and friend in its war against our Satanic enemy Iran. None of that conspiracy stuff snarled Clancy. Apparently, conspiracy stuff is now shorthand for unspeakable truth.

As of August, at least among economists, a censensus was growing that, considering our vast national debt (we borrow $2 billion a day to keep the government going) and a tax base seriously reduced by the junta in order to benefit the 1 per cent who own most of the national wealth, there is no way that we could ever find the billions needed to destroy Iraq in a long war or even a short one, with most of Europe lined up against us. Germany and Japan paid for the Gulf War, reluctantly ? with Japan, at the last moment, irritably quarreling over the exchange rate at the time of the contract. Now Germanys Schroder has said no. Japan is mute.

But the tom-toms keep beating revenge; and the fact that most of the world is opposed to our war seems only to bring hectic roses to the cheeks of the Bush administration (Bush Snr of the Carlyle Group, Bush Jnr formerly of Harken, Cheney, formerly of Halliburton, Rice, formerly of Chevron, Rumsfeld, formerly of Occidental). If ever an administration should recluse itself in matters dealing with energy, it is the current junta. But this is unlike any administration in our history. Their hearts are plainly elsewhere, making money, far from our mock Roman temples, while we, alas, are left only with their heads, dreaming of war, preferably against weak peripheral states.

Mohammed Heikel is a brilliant Egyptian journalist-observer, and sometime Foreign Minister, On 10 October 2001, he said to the Guardian: Bin Laden does not have the capabilities for an operation of this magnitude. When I hear Bush talking about al-Qaeda as if it were Nazi Germany or the Communist Party of the Soviet Union, I laugh because I know what is there. Bin Laden has been under surveillance for years: every telephone call was monitored and al-Qaeda has been penetrated by US intelligence, Pakistani intelligence, Saudi intelligence, Egyptian intelligence. They could not have kept secret an operation that required such a degree of organization and sophistication.

The former president of Germanys domestic intelligence service, Eckehardt Werthebach ( American Free Press, 4 December 2001) spells it out. The 9/11 attacks required years of planning while their scale indicates that they were a product of state-organized actions. There it is. Perhaps, after all, Bush Jnr was right to call it a war. But which state attacked us?

Will the suspects please line up. Saudi Arabia? No, no. Why we are paying you $50 million a year for training the royal bodyguard on our own holy if arid soil. True the kingdom contains many wealthy well-educated enemies but Bush Snr and Jnr exchange a knowing look. Egypt? No way. Dead broke despite US baksheesh. Syria? No funds. Iran? Too proud to bother with a parvenu state like the US. Israel? Sharon is capable of anything. But he lacks the guts and the grace of the true kamikaze. Anyway, Sharon was not in charge when this operation began with the planting of sleepers around the US flight schools 5 or 6 years ago. The United States? Elements of corporate America would undeniably prosper from a massive external attack that would make it possible for us to go to war whenever the President sees fit while suspending civil liberties. (The 342 pages of the USA Patriot Act were plainly prepared before 9/11.) Bush Snr and Jnr are giggling now. Why? Because Clinton was president back then. As the former president leaves the line of suspects, he says, more in anger than in sorrow: “When we left the White House we had a plan for an all-out war on al-Queda. We turned it over to this administration and they did nothing. Why Biting his lip, he goes. The Bushes no longer giggle. Pakistan breaks down: I did it! I confess! I couldnt help myself. Save me. I am an evil-doer!

Apparently, Pakistan did do it ? or some of it. We must now go back to 1979 when the largest covert operation in history of the CIA was launched in response to the Soviet invasion of Afghanistan. Central Asia specialist Ahmed Rashid wrote (Foreign Affairs, November-December 1999): With the active encouragement of the CIA and Pakistans ISI (Inter Services Intelligence) who wanted to turn the Afghan jihad into a global war, waged by all Muslim states against the Soviet Union, some 35,000 Muslim radicals, from 40 Islamic countries joined Afghanistans fight between 1982 and 92 more than 100,000 foreign Muslim radicals were directly influenced by the Afghanistan jihad. The CIA covertly trained and sponsored these warriors.

In March 1985, President Reagan issued National Security Decision Directive 166, increasing military aid while CIA specialists met with the ISI counterparts near Rawalpindi, Pakistan. Janes Defence Weekly (14 September 2001) gives the best overview: The trainers were mainly from Pakistans ISI agency who learnt their craft from American Green Beret commandos and Navy Seals in various US training establishments. This explains the reluctance of the administration to explain why so many unqualified persons, over so long a time, got visas to visit our hospitable shores. While in Pakistan, mass training of Afghan (zealots) was subsequently conducted by the Pakistan army under the supervision of the elite Special Services In 1988, with US knowledge, bin Laden created al-Qaeda (The Base); a conglomerate of quasi-independent Islamic terrorist cells spread across 26 or so countries. Washington turned a blind eye to al-Qaeda.

When Mohammed Attas plane struck the World Trade Centres North Tower, George W. Bush and the child at the Florida elementary school were discussing her goat. By coincidence, our word tragedy comes from the Greek: for goat tragos plus oide for song. Goat-song. It is highly suitable that this lament, sung in ancient satyr plays, should have been heard again at the exact moment when we were struck by fire from heaven, and a tragedy whose end is nowhere in sight began for us.

Copyright Gore Vidal

www.karalla.com eme [at] karalla [dot] com 212 860 8900

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Push-Button Innovation In the Weeds   By Michael Schrage    September 2002

The telecom industry doesn’t need more bandwidth. It needs ways to get people to use the bandwidth they have.

Hello? Hello? Can you hear me now? The telecom sector seems badly disconnected. Analysis reports state that over two trillion dollars’ worth of its market value has evaporated in less than 30 months. The high-flying, high-tech visionaries of the high-bandwidth future—Global Crossing, Covad, Williams, XO, Teligent, et al—have vanished into bankruptcy or liquidation. The AT&Ts, WorldComs, Qwests and Sprints, as well as their counterparts overseas, have seen their bold ambitions for growth in billion-dollar gambits such as the third-generation wireless standard turn into mad scrambles for survival. A few dishonest telco execs may even be going to jail.

There are many good reasons for this sorry state beyond corrupt accounting. Here’s one of the best: America’s telecom companies are lousy innovators. They’ve been more comfortable experimenting with their debt financing than experimenting with new service offerings. Even worse, they appear married to hopelessly outdated definitions of innovation. Telecom equipment suppliers do a sensational job of creating new bandwidth and extending physical networks—sensational, but counterproductive, given the current capacity glut. Does new capacity that nobody is willing to use or able to afford truly count as innovative?

Innovation isn’t what companies do; it’s what customers adopt. In fact, the telecom sector remains a fabulous market for innovative uses of bandwidth. But innovation shouldn’t mean getting people to use more bandwidth; it should be about getting people to change their bandwidth behaviors.

Clever features like NTT DoCoMo’s i-mode Internet services and handheld wireless games (see The Wireless Arcade, TR July/August 2002) can be tremendously appealing and even successful. There is also no shortage of marketing campaigns—most notably AT&T’s mlife— that continue to promote telecommunications as a lifestyle revolution. But this revolution has created more casualties than converts. The multibillion-dollar bids to create bandwidth-based lifestyles via the cell phone failed.

Instead, telecom companies should focus on pushing buttons. Push-button innovation doesn’t ask customers to buy new equipment or learn how to program; it treats them as people who might be prepared to tap a few extra keys to get a little extra value for a small additional fee. Telephone companies need only get a certain small percentage of callers to push a few more buttons to generate hundreds of millions of dollars in cash flow.

The idea is to build on existing behaviors rather than attempt to create new ones. For the sake of argument, let’s define the problem as how to get an extra $120 a year from you, the high-margin cellular customer. Here are a few examples of what profitable push-button innovation might look like:

* Transcription/recording: Many professionals would cheerfully pay a premium for a transcript of conversations with clients and customers—local laws permitting, of course. Why not a push-button sequence that triggers a recording of the conversation? The recording would then be run through any of the rapidly improving voice recognition transcription programs on the market, time-stamped and e-mailed to the subscriber. How many conversations do you have in a week that you’d like to have transcribed? How much is that worth to you? * Improved operator services: Every cellular service will give you phone numbers and offer to connect the call. But sometimes you also want to record the number. Reprogram the 411 service so that— for an extra 35 or 40 cents—the operator sends the number directly to your phone, which can store it for future use. Each customer that used this service just two or three times a week could generate $50 a year in new revenue to the phone company. * E-mail records: Yes, you can go online now to survey your call records. But people on business trips might welcome the option to designate which records of which calls they want e-mailed to them at the end of the day for their expense reports. Tap #1 to designate that this is a call for which you want a receipt. * Teletificates: Bookstores, clothing stores and record stores all offer gift certificates. Phone companies should provide a toll-free number that people can call to buy “teletificates” worth a certain number of calling minutes for friends or family members. The teletificate is automatically credited to the account of the recipient, who gets a voice mail or e-mail telling him or her of your generosity.

What do these ideas have in common? They all lend themselves to automation and require only marginal investments in modifying existing networks. More importantly, they are all engineered around convenience and ease of use as opposed to paradigm busting. In fact, it is easy to imagine people paying for these services precisely because of their familiarity rather than their novelty.

The telecommunications business has every incentive to get more innovative. It should be deluging its customers with offers of new products and services. For some reason that’s not happening. The industry needs to start pushing their buttons.

-Ian.

—- http://press.nokia.com/PR/200203/852460_5.html

WLAN and GPRS data is now in the cards for on-the-go connectivity

(March 18, 2002) For the first time in the Americas, the Nokia D311 product incorporates widely available GPRS and 802.11b WLAN in one PC card

ORLANDO, FLA – Designed to free laptop and handheld users from wired Internet connections, Nokia today unveiled the Nokia D311 product, the first dual-mode GPRS/wireless LAN (WLAN) PC Card for the Americas. Taking advantage of the popularity of 802.11b WLAN networks in homes, offices and public areas, and the growth of GSM/GPRS networks across the Americas, the dual-mode capability of the Nokia D311 GPRS WLAN PC card allows for wireless connectivity at home, at work and places in between. Shipments are expected to begin during the 3rd quarter of 2002.

“By allowing users to access data wirelessly over both cellular networks and 802.11b wireless LAN systems, the Nokia D311 product offers the freedom to stay connected both in the office and at remote locations.” Said Paul Chellgren, vice president of business development and product management at Nokia. “In one simple device, the Nokia D311 GPRS WLAN PC card delivers true portability to users of laptops and handheld devices needing to access the Internet, e-mail and other data services.”

The Nokia D311 GPRS WLAN PC card operates in GSM 850/1900 networks offering GPRS coverage and wireless LAN coverage areas. While operating in GPRS coverage areas, already available in many areas across the Americas, the Nokia D311 GPRS WLAN PC card offers connection speeds of up to 40.2 kbps. Rather than using a dial-up connection, GPRS (General Packet Radio Service) networks allow for rapid connectivity to the Internet, sending data in short bursts, or packets. When connected to a WLAN access point, the Nokia D311 GPRS WLAN PC card offers connection speeds of up to 11Mbps.

Taking a cue from Nokia’s popular line of wireless phones, the Nokia D311 GPRS WLAN PC card includes an easy-to-use interface with user-defined profiles. By using profiles, users can quickly select the optimal connection method that is available at any given time, without having to remember different settings for each connection type.

The 802.11b WiFi compliant Nokia D311 GPRS WLAN PC card is compatible with a wide range of platforms which use a type II or III PC card slot, including Windows 98 SE, Me, 2000, XP, Windows CE 3.0 and Linux. For increased security and reliability, the Nokia D311 GPRS WLAN PC card is compatible with leading VPN (Virtual Private Network) clients over both GPRS and WLAN networks.

Note: Features and services are carrier and network dependent and subject to change. Please check with service provider for availability and description of services. This device has not yet been authorized as required by the rules of the Federal Communications Commission (“FCC”). This device may not be sold or leased, or offered for sale or lease, until FCC authorization is obtained.

About Nokia Nokia is the world leader in mobile communications. Backed by its experience, innovation, user-friendliness and secure solutions, the company has become the leading supplier of mobile phones and a leading supplier of mobile, fixed and IP networks. By adding mobility to the Internet, Nokia creates new opportunities for companies and further enriches the daily lives of people. Nokia is a broadly held company with listings on six major exchanges.

For more information: Media and Industry Analysts only please contact:

Keith Nowak Nokia Americas +1 972-894-4573 +1 214-680-6182 (at CTIA March 18 – March 20, 2002)

Virve Virtanen Nokia Americas +1 972-894-4573 +1 214-680-4705 (at CTIA March 18 – March 20, 2002)

communication.corp [at] nokia [dot] com

Copyright ©2002. All rights reserved. Nokia, Nokia Connecting People and the Nokia D311 GPRS/WLAN PC Card are trademarks or registered trademarks of Nokia Corporation. Other company and product names mentioned herein may be trademarks or trade names of their respective owners.

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-Ian.

——— http://www.msnbc.com/news/697962.asp?cp1=1#BODY

Time is running out for WorldCom

Sooner or later, company will almost certainly face liquidation

OPINION By Christopher Byron MSNBC CONTRIBUTOR

Feb. 1 ‹ There¹s been a lot of talk lately that the economy has turned the corner and that it will be pulling into the passing lane by spring. That may be true, but it is hard to see how we¹re really going to enjoy much more than a sub-par recovery until the last of the excesses are worked off the telecom space, and net new business spending can begin again.

 IN THAT SENSE, the crumbling stock prices throughout the telecom sector are actually good news. They show that investors are waking up to reality, and that instead of valuing this sector on the basis of its earnings capacity, they are now beginning to view the space as essentially a write-off, and are increasingly pricing the stocks in it on the basis of little more than the meltdown value of their balance sheets.

       That¹s something to bear in mind when WorldCom, Inc., the Clinton, Miss. communications conglomerate, releases its quarterly and full year earnings numbers next week. More than 20 Wall Street analysts follow the stock, and they¹re looking for a 26-percent decline in fourth-quarter earnings, to 18 cents per share. But they¹re not looking at what the market as a whole is looking at: a business that simply can¹t turn a profit on a cash-flow basis, and will sooner or later almost certainly face liquidation.         SECTOR SITUATION HORRID

       Yet before getting into any of that, let¹s first step back for a quick overview of the trouble in the sector as a whole. Simply put, the situation is horrid. Thanks to a decade of wild-eyed thinking about the future and vague but compelling talk of the ³wired world² of tomorrow, we¹ve transformed a large section of the U.S. economy into something that literally can¹t turn a profit.

       Ground Zero has become the telecommunications space, which thanks to all this has long since ceased being simply the nation¹s phone companies. Now the telecommunications space is, in a sense, the entire U.S. economy.

       Communications of one sort or another have become the engine driving defense spending. They are the revenue driver for much of the transportation sector. They are where the money is going in the computer and semiconductor industries. Communications spending is at the heart of the financial services sector, the utilities sector, the construction industry. Communications are literally all there is to the networking sector. They are why the fiber optics business even exists.

     It was, in short, the infinite promise of America¹s digital future, conjured by seers like George Gilder and Nicholas Necroponte, that drove capital spending in the 1990s, reshaping the U.S. economy from a world of tangible value into one of virtual opportunity. We wound up building the greatest field of dreams in the history of world capitalism, and alas, no one showed up to play.

       You remember the phrase ³see-through office buildings² that came into vogue in the S&L crisis and the real estate bust of twenty years ago? Well, that¹s what we have now ‹ at least in terms of the telecommunications space: a see-through economy.

       There are many ways to measure it, but the easiest and most meaningful for this capital-intensive sector of the economy, is the return that the companies in it now earn on their invested capital. And the best way to measure that is not to look at earnings, which really mean very little, or even at cash flow from operations ‹ which also mean little in capital intensive businesses.

       Instead, one needs to focus cash flow from operations minus the cash that has to be reinvested back in the business. If a business can¹t generate positive cash numbers by its own internal operations, and has to get the money from elsewhere ‹ which is to say, from Wall Street ‹ then the business is really is little more than a charity case, and over the fullness of one or two business cycles its financial underpinnings will drop away.

That is the problem facing the telecom space now, because its return on invested capital is, basically speaking, bupkis ‹ the most vivid example of which is WorldCom, Inc., one of the biggest house of cards ever erected by the financial engineers of Wall Street.

       Over the last 19 years, investors have poured more than $100 billion into this rural Mississippi telephone company, and basically, Worldcom has done nothing with the money except buy other phone companies. As a result, the company now sits, as of Sept. 30, 2001, with worthless goodwill on its balance sheet totaling more than $50 billion ‹ so far as I am aware, the biggest such mountain of fake assets in all of corporate America. Add to that some $30 billion of long-term debt, plus $10 billion of unpaid bills and other short-term obligations, and you¹ve pretty much got the whole WorldCom financial picture.

       And here¹s the really interesting thing: Over the course of the 1990s, this $100 billion Mont Blanc of waste has not been able to generate a single dime of net new cash for the business, with all free cash flow coming from stock sales and debt financings (the ³cash Flows From Investing² part of the company¹s financials). In other words, the second largest telecommunications carrier in the country hasn¹t actually been a sound business from Day One, but has only seemed to be so because the economy was growing and stock prices were rising.

       Now, investors in WorldCom stock are discovering the shocking truth that this entire business is no longer being valued on its ³growth story,² but rather, on a modest multiple of the tangible assets on its balance sheet.

       With roughly 3 billion shares outstanding, and tangible net worth of less than $8 billion, the whole company has a meltdown value of not much more than $2.50 per share, which is why WorldCom¹s stock price has fallen from $50 per share at the peak of the tech bubble, to a current price of less than $10 ‹ even though the company actually swung into the black in 1998 on an income basis.

       Simply put, investors no longer care about accrual earnings. The want instead to see companies that can stand on its own and generate cash by itself at the trough of a business cycle. There are almost no such companies in the telecom space, and one by one the losers are being taken out and shot. Two weeks ago we had Global Crossing. Sooner or later it will be the turn of WorldCom as well. It is the way Wall Street works.

Yes! After half-a-decade of music from the production line, it’s time for the return of the singer / songwriter. This new pop pleases me, though it’s still very much ribbed for our pleasure by the music industry.

Anyway, a good artist can still shine through his or her marketing. Here are some of my recommendations:

John Mayer, Web Site: http://www.johnmayer.com/

http://www.amazon.com/exec/obidos/ASIN/B00005JIZA

You can still find his pre-big-label-signing CDs in a few places, though he’s now signed on to Atlantic and the price of the CDs will go up. 🙂 Really good production and a great voice make him a stand out, and one song in particular, “Neon” has a groovy funk guitar lick, totally unique to the album. You seriously gotta have this album — it’s incredible.

Pete Yorn, Web Site: http://www.peteyorn.com/

http://www.amazon.com/exec/obidos/ASIN/B00005AREX

Kelly gave me this one for my birthday and it’s on regular rotation in my Saab (yikes! that was a yuppie sentence). While the album tends to meander into the melancholy once in a while nearly all the songs are totally solid and rockin’. I like the first one, “Life On a Chain”, though it starts with a cheesy scratchy record player (how many Hollywood yard sales did these guys cruise to find a record player and a dirty ol’ record to sample?).

Outlandos D’Americas, Web Site: http://www.ark21.com/outlandosdamericas.htm

http://www.amazon.com/exec/obidos/ASIN/B00000AETO

Oh YEAH! Sting and the Police have a huge following in Latin America. In Mexico my Dad once bought a Spanish version of “Dream of the Blue Turtles” recorded by Sting which just rocked. It’s a language made for music and these various tracks, which go from Ska to steamy Latin to out-and-out Rock, are great! In particular you have to hear Soraya’s cover “Todo Lo Que el Hace (Every Little Thing She Does Is Magic)”. Not exactly Singer/Songwriters but just Neato.

[So once in a while I feel like recommending music. Sue me.]

-Ian.