Yesterday’s launch of the Palm Foleo probably did not yield the expected huzzahs and praise that normally heralds a product launch from one of Silicon Valley’s product design luminaries, especially one by Mr. Jeff Hawkins. Palm chose to use Mossberg‘s All Things Digital conference in San Diego as a springboard for its media assault, but what should have been a watershed product launch was rapidly overshadowed by a brief chat between two billionaires. The criticism of the Foleo since the buzz started yesterday … and has been nearly uniform in slamming the device.

In fact, the jeers from the peanut gallery are rising to a deafening roar. Carlo Longino @ TechDirt thinks that Palm is done like dinner with this abortion of a product. Even (the fake) Steve Jobs thinks it blows. Much more damaging, though, the mainstream tech press (whatever that is) is joining the chorus: PCmag questions who will buy the thing, InformationWeek calls it a yawn. Matt Hamblen questions whether they did their research. This is actually one of the worst product launches from a large company that I’ve seen in quite a while.

What’s wrong with Palm is difficult to pinpoint. I doubt that, if you did your standard market research, you’d be able to plumb much support for a product like this. However, that’s also true of the original Palm Pilot, which launched on the heels of the death of Apple’s Newton in 1996. And let’s not forget that the Treo practically catalyzed the SmartPhone market all on its own. With these two incredible successes, Jeff Hawkins hasn’t exactly been given the opportunity to learn from his mistakes in being ahead of the curve.

But this time he might. The product smacks of founder-itis. This is an affliction common to mature tech companies and/or startups created by rich tech executives, where the brains behind past successes begin to tinker and approach new design problems, rather than ask questions about what it is that people want. In other words, did Jeff Hawkins run amok and create a big white elephant, simply to amuse himself? Did he sell dazzled co-workers on his vision that the Foleo is the “next big thing”? It’s apparent that they believe it is, given that resources have clearly been diverted from such projects as putting linux on the treo and revving the Treo’s design, which is getting pretty long-in-the-tooth.

The reality is that a company like Palm can only really effectively market one, maybe two, product lines at a time. If there’s a market for the Foleo, the product would be better served by financing, developing, and marketing this proclaimed “mobile companion” externally from Palm, just like the Treo. The Folio’s audience is probably going to turn out to be a LOT different from the Treo’s (one potential market is folks who want email and web on a cheap easy-to-put-away computing device — like seniors) and probably a lot less sexy.

Besides, the Treo (despite the fact that it’s a great product) has yet to really hit it’s stride. This is hard to remember when you visit Silicon Valley, where the Treo is practically ubiquitous. But find someone using a Treo in Europe or Asia (or on the Eastern Seaboard) and you’re just as likely to get struck by lightning.

Either way, the launch of the Foleo (careful to spell it correctly) is not the watershed event that was the Pilot or the Treo… so maybe Hawkins will finally have a mistake from which to learn.

-Ian.

http://www.nytimes.com/2003/07/05/business/worldbusiness/ 05VOIC.html?pagewanted=all

CCRA, Ghana, July 3 — The Internet bubble has long since popped in the United States, Europe and Asia. But in parts of Africa the Internet is serving as a powerful force for change, primarily by allowing companies and individuals to make international telephone calls far less expensively than through conventional channels.

Calls in and out of sub-Saharan Africa have long been among the world’s most costly, strangling business opportunities and burdening ordinary people. Services have been tightly controlled by government-owned telephone companies, many of which are rife with corruption and incompetence. Governments also imposed high tariffs on international calls, seeing it as a lucrative source of revenue.

But now, thanks to what is called voice-over-Internet, phone alternatives are flourishing, sharply lowering costs and expanding opportunities for business and consumers in some of the poorest places on earth — even as they pose a competitive threat to government-sanctioned telephone companies.

Sending telephone calls over the Internet is gaining ground in Africa because it makes possible a range of new services, linking the sub-Saharan to the world’s major industrial centers in ways unimaginable only a few years ago. And better digital connections, mostly via satellite, are raising the hope that Ghana — the most peaceful country in a West African region besieged by civil wars and ethnic strife — may become the regional hub for an information-technology industry.

“As Ghana improves its connectivity to the outside world, it has the potential to become for Africa what Bangalore became for India,” said Paul Maritz, a former senior executive at Microsoft who recently visited Accra to survey the nascent high-tech scene here.

Last Thursday, at a United Nations conference in New York, the secretary general, Kofi Annan, delivered a message that developing countries also need to include wireless access, known as Wi-Fi, in building an Internet system.

“It is precisely in places where no infrastructure exists that Wi-Fi can be particularly effective,” Mr. Annan said, “helping countries to leapfrog generations of telecommunications technology and empower their people.”

As the movement advances, though, many government-owned telephone companies, which dominate wired service in most African countries, are fighting a rear-guard action.

Internet telephony “is presented as the salvation for business and society in Africa,” said Oystein Bjorge, chief executive of Ghana’s national telephone carrier. “It is not.”

Mr. Bjorge, a Norwegian telecommunications consultant hired recently to do battle against the Internet telephone services, said it wreaks havoc with the economics of phone companies. Here in Ghana, the national phone company is waging a sporadic campaign against its own citizens who use the Internet to make or receive telephone calls from America and Europe, periodically turning off the lines of those suspected of doing so.

Three years ago, the government even jailed the heads of some of Ghana’s leading Internet providers. Though later exonerated by a court, the dissidents fear another crackdown. “Internet telephony is changing the whole power structure,” said Francis Quartey, chief technology officer of Intercom Data Network and one of those jailed. “The dangerous thing is that the power elite is responding out of fear and ignorance.”

Despite this opposition, American companies are experimenting with new ventures in Ghana, seeing if enthusiasm for Internet telephony can transform local technology entrepreneurs into a force for genuine economic advancement.

For example, Rising Data Solutions, which is based in Gaithersburg, Md., introduced a call center here last month, where a dozen Ghanaians — trained in American-style English — are trying to sign up customers in the northeastern United States on behalf of a wireless phone company. At least three other call centers are expected to open in Accra later this year, all relying on Internet telephony instead of telephone carriers.

Internet telephony also aids companies like Newmont Mining , which is searching for gold in Ghana, the second-largest gold producer on the continent, after South Africa. To help manage its operation, Newmont plans to link its operations within Ghana to the wider world through the Internet.

Acquiring reliable phone service is essential, foreign investors say, which is why they bypass the government-owned telephone company. Ghana Telecom has an order backlog of more than 300,000 lines; bribery is the fastest — indeed, usually the only — way to obtain new service. Even those with service suffer from frequent failures and inaccurate bills. Roughly every other call results in a busy signal, an indicator of what Ghana Telecom calls “network congestion.”

Under the circumstances, Internet telephony — which has failed so far to make serious inroads into the American telephone market because of lower voice quality — seems positively fabulous to many weaned on Africa’s creaky systems.

“Internet gives me control over my destiny,” said Sambou Makalou, chief executive of Rising Data. “My business needs to be up 24-7; we can’t get a busy signal.”

Busy signals are common in Ghana because the public phone networks are overloaded. As recently as four years ago, a dial tone was among the scarcest resources in the country, which had fewer than 200,000 phone lines in a nation of 19 million.

Few people realized how much demand for phone service was waiting to explode until Ghana’s most successful wireless company, Spacefon, was introduced in 1996. Before it started, executives thought the potential customer base was probably 3,000 people, at most 12,000. Seven years later, Spacefon has more than 300,000 subscribers.

The country’s total phone lines are now approaching 750,000, roughly two-thirds of them wireless. But completing a call is still difficult, especially between rival networks (there are five), and neither Ghana Telecom, nor the country’s legal wireless operators offer a reliable connection to the Internet.

In response to these limitations, private businesses have built scores of data networks, relying on satellite- and radio-based Internet-access systems.

But telephone service became appealing because of the high network costs: Companies typically pay from $2,000 to $5,000 a month for a robust connection to the Internet, an enormous sum when economic output per person is only about $400 a year.

“I’m paying $2,000 a month for Internet access, so I want to use the technology to the fullest,” said Austin Addo, chief information officer of Ghana Link Network Services.

Mr. Addo’s company, which began operations here early this year, helps the government calculate duties on goods imported into the country, relying on frequent updates, via the Internet, of product values. The company’s partner is based in Madrid, so Mr. Addo uses a standard device to make international calls over his computer network. He is not billed for the calls, which would otherwise cost him roughly 75 cents a minute, including the cost of line.

His telephone calls are not really free, since he pays $2,000 a month for Internet access. But he is still saving lots of money because he can speak as long as he wants without worrying about the cost. “Five years ago to get this level of communication,” he said, “I’d have to fly to Spain — several times a week.”

Such productivity gains have been a cause for celebration almost everywhere in the world. But official anxiety over Internet telephony is widespread throughout Africa and particularly rife in Ghana. At a public meeting in May, held at the largest Internet cafe in Accra, a regulator defended the government’s latest campaign against those who use the Internet to bypass authorized telephone providers. “The players have been apprehended or will be apprehended soon,” said Bernard Forson, deputy director of the National Communications Authority of Ghana.

The government is not opposed to any particular technology, Mr. Forson explained, but merely wants “regulated entities to provide telephone service,” not unlicensed and untaxed wildcatters.

Other African countries face a similar quandary, aware of the appeal of Internet voice service but fearful of its damage to the state-owned telephone company.

Neighboring Togo, for instance, allowed Internet telephony until the end of last year, when the government cracked down on behalf of Togo Telecom. So many foreign calls in tiny Togo were being routed over the Internet that a small “com” center — ubiquitous in Africa, offering calls for a fee — took in $10,000 a month from just two phones.

But some African countries have embraced Internet telephony as a way to end decades of frustration. In Nigeria, for example, the government has not officially approved telephoning over the Internet but looks the other way, partly to ease congestion on its authorized networks.

Still, the legal confusion surrounding Internet telephony has prompted some to avoid it. Affiliated Computer Services , which is based in Dallas, set up shop in Accra two years ago, relying on a private satellite connection to the Internet that supports both a data and a telephone network. Today, it is one of Ghana’s largest private employers, with 1,200 people and plans to hire another 700.

While the company runs call centers in Jamaica, Mexico and India, it does not intend to do such telephone work in Ghana. “We can’t use satellite lines” because of the brief delay in hearing a response, said Tom Blodgett, the executive who started the Ghana operation. And for now, he adds, “there is no suitable wired alternative.” A legal one, anyway.

But for all their efforts to restrain the movement, African telecom companies are probably fighting a losing battle.

“Periodically the police confiscate equipment or the telco turns off phone lines,” said Russell Southwood, a London-based consultant and publisher of a weekly newsletter on Africa’s telecom scene, Balancing Act’s News Update. “But it’s about as hopeless as Canute trying to turn

-Ian.

—- http://www1.iraqwar.ru/iraq-read_article.php?articleId”11&lang=en

The Real But Unspoken Reasons For The Iraq War – OIL U$ Dollar vs. Euro 08.04.2003 [12:37]

Summary Although completely suppressed in the U.S. media, the answer to the Iraq enigma is simple yet shocking – it an an oil CURRENCY war. The Real Reason for this upcoming war is this administration’s goal of preventing further OPEC momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves. This lengthy essay will discuss the macroeconomics of the “petro-dollar” and the unpublicized but real threat to U.S. economic hegemony from the euro as an alternative oil transaction currency. THE REAL REASONS FOR THE UPCOMING WAR IN IRAQ A Macroeconomic and Geostrategic Analysis of the Unspoken Truth By W. Clark wrc92 [at] aol [dot] com “If a nation expects to be ignorant and free, it expects what never was and never will be … The People cannot be safe without information. When the press is free, and every man is able to read, all is safe.” Those words by Thomas Jefferson embody the unfortunate state of affairs that have beset our nation. As our government prepares to go to war with Iraq, our country seems unable to answer even the most basic questions about this war. First, why is there virtually no international support to topple Saddam? If Iraq’s WMD program truly possessed the threat level that President Bush has repeatedly purported, why is there no international coalition to militarily disarm Saddam? Secondly, despite over 300 unfettered U.N inspections to date, there has been no evidence reported of a reconstituted Iraqi WMD program. Third, and despite Bush’s rhetoric, the CIA has not found any links between Saddam Hussein and Al Qaeda. To the contrary, some analysts believe it is far more likely Al Qaeda might acquire an unsecured former Soviet Union Weapon(s) of Mass Destruction, or potentially from sympathizers within a destabilized Pakistan. Moreover, immediately following Congress’s vote on the Iraq Resolution, we suddenly became aware of North Korea’s nuclear program violations. Kim Jong Il is processing uranium in order to produce nuclear weapons this year. President Bush has not provided a rationale answer as to why Saddam’s seemingly dormant WMD program possesses a more imminent threat that North Korea’s active program? Strangely, Donald Rumsfeld suggested that if Saddam were “exiled” we could avoid an Iraq war? Confused yet? Well, I’m going to give their game away – the core driver for toppling Saddam is actually the euro currency, the â,. Although completely suppressed in the U.S. media, the answer to the Iraq enigma is simple yet shocking. The upcoming war in Iraq war is mostly about how the ruling class at Langley and the Bush oligarchy view hydrocarbons at the geo-strategic level, and the overarching macroeconomic threats to the U.S. dollar from the euro. The Real Reason for this upcoming war is this administration’s goal of preventing further OPEC momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves. This lengthy essay will discuss the macroeconomics of the “petro-dollar” and the unpublicized but real threat to U.S. economic hegemony from the euro as an alternative oil transaction currency. The following is how an astute and anonymous friend alluded to the unspoken truth about this upcoming war with Iraq… “The Federal Reserve’s greatest nightmare is that OPEC will switch its international transactions from a dollar standard to a euro standard. Iraq actually made this switch in Nov. 2000 (when the euro was worth around 80 cents), and has actually made off like a bandit considering the dollar’s steady depreciation against the euro.” (Note: the dollar declined 15% against the euro in 2002.) “The real reason the Bush administration wants a puppet government in Iraq – or more importantly, the reason why the corporate-military-industrial network conglomerate wants a puppet government in Iraq – is so that it will revert back to a dollar standard and stay that way.” (While also hoping to veto any wider OPEC momentum towards the euro, especially from Iran – the 2nd largest OPEC producer who is actively discussing a switch to euros for its oil exports). Furthermore, despite Saudi Arabia being our ‘client state,’ the Saudi regime appears increasingly weak/ threatened from massive civil unrest. Some analysts believe a “Saudi Revolution” might be plausible in the aftermath of an unpopular U.S. invasion of Iraq (ie. Iran circa 1979) (1). Undoubtedly, the Bush administration is acutely aware of these risks. Hence, the neo conservative framework entails a large and permanent military presence in the Persian Gulf region in a post Saddam era, just in case we need to surround and grab Saudi’s oil fields in the event of a coup by an anti-western group. But first back to Iraq. “Saddam sealed his fate when he decided to switch to the euro in late 2000 (and later converted his $10 billion reserve fund at the U.N. to euros) – at that point, another manufactured Gulf War become inevitable under Bush II. Only the most extreme circumstances could possibly stop that now and I strongly doubt anything can – short of Saddam getting replaced with a pliant regime.” Big Picture Perspective: Everything else aside from the reserve currency and the Saudi/Iran oil issues (i.e. domestic political issues and international criticism) is peripheral and of marginal consequence to this administration. Further, the dollar-euro threat is powerful enough that they’ll rather risk much of the economic backlash in the short-term to stave off the long-term dollar crash of an OPEC transaction standard change from dollars to euros. All of this fits into the broader Great Game that encompasses Russia, India, China.” This information about Iraq’s oil currency is censored by the U.S. media as well as the Bush administration & Federal Reserve as the truth could potentially curtail both investor and consumer confidence, reduce consumer borrowing/ spending, create political pressure to form a new energy policy that slowly weans us off middle-eastern oil, and of course stop our march towards war in Iraq. This quasi “state secret” can be found on a Radio Free Europe article discussing Saddam’s switch for his oil sales from dollars to the euros on Nov. 6, 2000 (2). “Baghdad’s switch from the dollar to the euro for oil trading is intended to rebuke Washington’s hard-line on sanctions and encourage Europeans to challenge it. But the political message will cost Iraq millions in lost revenue. RFE/RL correspondent Charles Recknagel looks at what Baghdad will gain and lose, and the impact of the decision to go with the European currency.” At the time of the switch many analysts were surprised that Saddam was willing to give up millions in oil revenue for what appeared to be a political statement. However, contrary to one of the main points of this November 2000 article, the steady depreciation of the dollar versus the euro since late 2001 means that Iraq has profited handsomely from the switch in their reserve and transaction currencies. The euro has gained roughly 17% against the dollar in that time, which also applies to the $10 billion in Iraq’s U.N. “oil for food” reserve fund that was previously held in dollars has also gained that same percent value since the switch. What would happen if OPEC made a sudden switch to euros, as opposed to a gradual transition? “Otherwise, the effect of an OPEC switch to the euro would be that oil-consuming nations would have to flush dollars out of their (central bank) reserve funds and replace these with euros. The dollar would crash anywhere from 20-40% in value and the consequences would be those one could expect from any currency collapse and massive inflation (think Argentina currency crisis, for example). You’d have foreign funds stream out of the U.S. stock markets and dollar denominated assets, there’d surely be a run on the banks much like the 1930s, the current account deficit would become unserviceable, the budget deficit would go into default, and so on. Your basic 3rd world economic crisis scenario. The United States economy is intimately tied to the dollar’s role as reserve currency. This doesn’t mean that the U.S. couldn’t function otherwise, but that the transition would have to be gradual to avoid such dislocations (and the ultimate result of this would probably be the U.S. and the E.U. switching roles in the global economy).” In the aftermath of toppling Saddam it is clear the U.S. will keep a large and permanent military force in the Persian Gulf. Indeed, there is no “exit strategy” in Iraq, as the military will be needed to protect the newly installed Iraqi regime, and perhaps send a message to other OPEC producers that they might receive “regime change” if they too move to euros for their oil exportsâ¤. Another underreported story from this summer regarding the other OPEC ‘Axis of Evil’ country and their interest in the selling oil in euros, Iran. (3) “Iran’s proposal to receive payments for crude oil sales to Europe in euros instead of U.S. dollars is based primarily on economics, Iranian and industry sources said. But politics are still likely to be a factor in any decision, they said, as Iran uses the opportunity to hit back at the U.S. government, which recently labeled it part of an “axis of evil.” The proposal, which is now being reviewed by the Central Bank of Iran, is likely to be approved if presented to the country’s parliament, a parliamentary representative said.”There is a very good chance MPs will agree to this idea …now that the euro is stronger, it is more logical,” the parliamentary representative said.” More over, and perhaps most telling, during 2002 the majority of reserve funds in Iran’s central bank have been shifted to euros. It appears imminent that Iran intends to switch to euros for their oil currency (4) “More than half of the country’s assets in the Forex Reserve Fund have been converted to euro, a member of the Parliament Development Commission, Mohammad Abasspour announced. He noted that higher parity rate of euro against the US dollar will give the Asian countries, particularly oil exporters, a chance to usher in a new chapter in ties with European Union’s member countries. He said that the United States dominates other countries through its currency, noting that given the superiority of the dollar against other hard currencies, the US monopolizes global trade. The lawmaker expressed hope that the competition between euro and dollar would eliminate the monopoly in global trade.” Indeed, after toppling Saddam, this administration may decide that Iran is the next target in the “war on terror.” Iran’s interest in switching to the euro as their standard transaction currency for oil exports is well documented. Perhaps this recent MSNBC article illustrates the objectives of the neo conservatives (5). “While still wrangling over how to overthrow Iraq’s Saddam Hussein, the Bush administration is already looking for other targets. President Bush has called for the ouster of Palestinian leader Yasir Arafat. Now some in the administration⤔and allies at D.C. think tanks⤔are eyeing Iran and even Saudi Arabia. As one senior British official put it: “Everyone wants to go to Baghdad. Real men want to go to Tehran.” Aside from these political risks regarding Saudi Arabia and Iran, another risk factor isactually Japan. Perhaps the biggest gamble in a protracted Iraq war may be Japan’s weak economy (6). If the war creates prolonged oil high prices ($45 per barrel over several months), or a short but massive oil price spike ($80 to $100 per barrel), some analysts believe Japan’s fragile economy would collapse. Japan is quite hypersensitive to oil prices, and if its banks default, the collapse of the second largest economy would set in motion a sequence of events that would prove devastating to the U.S. economy. Indeed, Japan’s fall in an Iraq war could create the economic dislocations that begin in the Pacific Rim but quickly spread to Europe and Russia. The Russian government lacks the controls to thwart a disorderly run on the dollar, and such an event could ultimately force and OPEC switch to euros. Additionally, other risks might arise if the Iraq war goes poorly or becomes prolonged, as it is possible that civil unrest may unfold in Kuwait or other OPEC members including Venezuela, as the latter may switch to euros just as Saddam did in November 2000. Thereby fostering the very situation this administration is trying to prevent, another OPEC member switching to euros as their oil transaction currency. Incidentally, the final “Axis of Evil” country, North Korea, recently decided to officially drop the dollar and begin using euros for trade, effective Dec. 7, 2002 (7). Unlike the OPEC-producers, their switch will have negligible economic impact, but it illustrates the geopolitical fallout of the President Bush’s harsh rhetoric. Much more troubling is North Korea’s recent action following the oil embargo of their country. They are in dire need of oil and food; and in an act of desperation they have re-activated their pre-1994 nuclear program. Processing uranium appears to be taking place at a rapid pace, and it appears their strategy is to prompt negotiations with the U.S. regarding food and oil. The CIA estimates that North Korea could produce 4-6 nuclear weapons by the second half of 2003. Ironically, this crisis over North Korea’s nuclear program further confirms the fraudulent premise for which this war with Saddam was entirely contrived. Unfortunately, neo conservatives such as George Bush, Dick Cheney, Donald Rumsfeld, Paul Wolfowitz and Richard Pearle fail to grasp that Newton’s Law applies equally to both physics and the geo-political sphere as well: “For every action there is an equal but opposite reaction.” During the 1990s the world viewed the U.S. as a rather self-absorbed but essentially benevolent superpower. Military actions in Iraq (90-91′ & 98′), Serbia and Kosovo (99′) were undertaken with both U.N. and NATO cooperation and thus afforded international legitimacy. President Clinton also worked to reduce tensions in Northern Ireland and attempted to negotiate a resolution to the Israeli-Palestinian conflict. However, in both the pre and post 9/11 intervals, the “America first” policies of the Bush administration, with its unwillingness to honor International Treaties, along with their aggressive militarisation of foreign policy, has significantly damaged our reputation abroad. Following 9/11, it appears that President Bush’s “warmongering rhetoric” has created global tensions – as we are now viewed as a belligerent superpower willing to apply unilateral military force without U.N. approval.Lamentably, the tremendous amount of international sympathy that we witnessed in the immediate aftermath of the September 11th tragedy has been replaced with fear and anger at our government. This administration’s bellicosity haschanged the worldview, and “anti-Americanism” is proliferating even among our closest allies (8). Even more alarming, and completely unreported in the U.S media, are some monetary shifts in the reserve funds of foreign governments away from the dollar with movements towards the euro (China, Venezuela, some OPEC producers and last week Russia flushed some of their dollars for euros) (9). It appears that the world community may lack faith in the Bush administration’s economic policies, and along with OPEC, seems poised to respond with economic retribution if the U.S. government is regarded as an uncontrollable and dangerous superpower. The plausibility of abandoning the dollar standard for the euro is growing. An interesting U.K. article outlines the dynamics and the potential outcomes (‘Beyond Bush’s Unilateralism: Another Bi-Polar World or A New Era of Win-Win?’)(10) “The most likely end to US hegemony may come about through a combination of high oil prices (brought about by US foreign policies toward the Middle East) and deeper devaluation of the US dollar (expected by many economists). Some elements of this scenario: 1) US global over-reach in the “war on terrorism” already leading to deficits as far as the eye can see — combined with historically-high US trade deficits – lead to a further run on the dollar. This and the stock market doldrums make the US less attractive to the world’s capital. 2) More developing countries follow the lead of Venezuela and China in diversifying their currency reserves away from dollars and balanced with euros. Such a shift in dollar-euro holdings in Latin America and Asia could keep the dollar and euro close to parity. 3) OPEC could act on some of its internal discussions and decide (after concerted buying of euros in the open market) to announce at a future meeting in Vienna that OPEC’s oil will be re-denominated in euros, or even a new oil-backed currency of their own. A US attack on Iraq sends oil to â,40 per barrel. 4) The Bush Administration’s efforts to control the domestic political agenda backfires. Damage over the intelligence failures prior to 9/11 and warnings of imminent new terrorist attacks precipitate a further stock market slide. 5) All efforts by Democrats and the 57% of the US public to shift energy policy toward renewables, efficiency, standards, higher gas taxes, etc. are blocked by the Bush Administration and its fossil fuel industry supporters. Thus, the USA remains vulnerable to energy supply and price shocks. 6) The EU recognizes its own economic and political power as the euro rises further and becomes the world’s other reserve currency. The G-8 pegs the euro and dollar into a trading band — removing these two powerful currencies from speculators trading screens (a “win-win” for everyone!). Tony Blair persuades Brits of this larger reason for the UK to join the euro. 7) Developing countries lacking dollars or “hard” currencies follow Venezuela’s lead and begin bartering their undervalued commodities directly with each other in computerized swaps and counter trade deals. President Chavez has inked 13 such country barter deals on its oil, e.g., with Cuba in exchange for Cuban health paramedics who are setting up clinics in rural Venezuelan villages. “The result of this scenario? The USA could no longer run its huge current account trade deficits or continue to wage open-ended global war on terrorism or evil. The USA ceases pursuing unilateralist policies. A new US administration begins to return to its multilateralist tradition, ceases its obstruction and rejoins the UN and pursues more realistic international cooperation.” As for the events currently taking place in Venezuela, items #2 and #7 on the above list may allude to why the Bush administration quickly endorsed the failed military-led coup of Hugo Chavez in April 2002. Although the coup collapsed after 2 days, various reports suggest the CIA and a rather embarrassed Bush administration approved and may have been actively involved with the civilian/military coup plotters. (11) “George W. Bush’s administration was the failed coup’s primary loser, underscoring its bankrupt hemispheric policy. Now it is slowly filtering out that in recent months White Houseofficials met with key coup figures, including Carmona. Although the administration insists that it explicitly objected to any extra-constitutional action to remove Chavez, comments by senior U.S. officials did little to convey this.” “The CIA’s role in a 1971 Chilean strike could have served as the working model for generating economic and social instability in order to topple Chavez. In the truckers’ strike of that year, the agency secretly orchestrated and financed the artificial prolongation of a contrived work stoppage in order to economically asphyxiate the leftist Salvador Allende government.” “This scenario would have had CIA operatives acting in liaison with the Venezuelan military, as well as with opposition business and labor leaders, to convert a relatively minor afternoon-long work stoppage by senior management into a nearly successful coup de grace.” Interestingly, according to an article by Michael Ruppert, Venezuelan’s ambassador Francisco Mieres-Lopez apparently floated the idea of switching to the euro as their oil currency standard approximately one year before the failed coup attempt… Furthermore, there is evidence that the CIA is still active in its attempts to overthrow the democratically elected Chavez administration. In fact, this past December a Uruguayan government official recently exposed the ongoing covert CIA operations in Venezuela (12): “Uruguayan EP-FA congressman Jose Bayardi says he has information that far-reaching plan have been put into place by the CIA and other North American intelligence agencies tooverthrow Venezuelan President Hugo Chavez Frias” “Bayardi says he has received copies of top-secret communications between the Bush administration in Washington and the government of Uruguay requesting the latter’s cooperation to support white collar executives and trade union activists to “break down levels of intransigence within the Chavez Frias administration” Venezuela is the fourth largest producer of oil, and the corporate elites whose political power runs unfettered in the Bush/Cheney oligarchy appear interested in privatizing Venezuela’s oil industry. Furthermore, the establishment might be concerned that Chavez’s “barter deals” with 12 Latin American countries and Cuba are effectively cutting the U.S. dollar out of the vital oil transaction currency cycle. Commodities are being traded among these countries in exchange for Venezuela’s oil, thereby reducing reliance on fiat dollars. If these unique oil transactions proliferate, they could create more devaluation pressure on the dollar. Continuing attempts by the CIA to remove Hugo Chavez appear likely. The U.S. economy has acquired several problems, including as our record-high trade account deficit (almost 5% of GDP), $6.3 trillion dollar deficit (55% of GDP), and the recent return to annual budget deficits in the hundreds of billions. These are factors that would devalue the currency of any nation under the “old rules.” Why is the dollar still strong despite these structural flaws? Well, the elites understand that the strength of the dollar does not merely rest on our economic output per se. The dollar posses two unique advantages relative to all other hard currencies. The reality is that the strength of the dollar since 1945 rests on being the international reserve currency and thus fiat currency for global oil transactions (ie. “petro-dollar”). The U.S. prints hundreds of billions of these fiat petro-dollars, which are then used by nation states to purchase oil/energy from OPEC producers (except Iraq, to some degree Venezuela, and perhaps Iran in the near future). These petro-dollars are then re-cycled from OPEC back into the U.S. via Treasury Bills or other dollar-denominated assets such as U.S. stocks, real estate, etc. The “old rules” for valuation of our currency and economic power were based on our flexible market, free flow of trade goods, high per worker productivity, manufacturing output/trade surpluses, government oversight of accounting methodologies (ie. SEC), developed infrastructure, education system, and of course total cash flow and profitability. While many of these factors remain present, over the last two decades we have diluted some of these “safe harbor” fundamentals. Despite imbalances and some structural problems that are escalating within the U.S. economy, the dollar as the fiat oil currency created “new rules”. The following exerts from an Asia Times article discusses the virtues of our fiat oil currency and dollar hegemony (or vices from the perspective of developing nations, whose debt is denominated in dollars). (13) “Ever since 1971, when US president Richard Nixon took the dollar off the gold standard (at $35 per ounce) that had been agreed to at the Bretton Woods Conference at the end of World War II, the dollar has been a global monetary instrument that the United States, and only the United States, can produce by fiat. The dollar, now a fiat currency, is at a 16-year trade-weighted high despite record US current-account deficits and the status of the US as the leading debtor nation. The US national debt as of April 4 was $6.021 trillion against a gross domestic product (GDP) of $9 trillion.” “World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy. The world’s interlinked economies no longer trade to capture a comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies.To prevent speculative and manipulative attacks on their currencies, the world’s central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. This creates a built-in support for a strong dollar that in turn forces the world’s central banks to acquire and hold more dollar reserves, making it stronger. This phenomenon is known as dollar hegemony, which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil. The recycling of petro-dollars is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973.” “By definition, dollar reserves must be invested in US assets, creating a capital-accounts surplus for the US economy. Even after a year of sharp correction, US stock valuation is still at a 25-year high and trading at a 56 percent premium compared with emerging markets.””The US capital-account surplus in turn finances the US trade deficit. Moreover, any asset, regardless of location, that is denominated in dollars is a US asset in essence. When oil is denominated in dollars through US state action and the dollar is a fiat currency,the US essentially owns the world’s oil for free. And the more the US prints greenbacks, the higher the price of US assets will rise. Thus a strong-dollar policy gives the US a double win.” This unique geo-political agreement with Saudi Arabia has worked to our favor for the past 30 years, as this arrangement has raised the entire asset value of all dollar denominated assets/properties, and allowed the Federal Reserve to create a truly massive debt and credit expansion (or ‘credit bubble’ in the view of some economists). These current structural imbalances in the U.S. economy are sustainable as long as: 1)Nations continue to demand and purchase oil for their energy/survival needs 2)The fiat reserve currency for global oil transactions remain the U.S. dollar (and dollar only) These underlying factors, along with the “safe harbor” reputation of U.S. investments afforded by the dollar’s reserve currency status propelled the U.S. to economic and military hegemony in the post-World War II period. However, the introduction of the euro is a significant new factor, and appears to be the primary threat to U.S. economic hegemony. More over, in December 2002 ten additional countries were approved for full membership into the E.U. In 2004 this will result in an aggregate GDP of $9.6 trillion and 450 million people, directly competing with the U.S. economy ($10.5 trillion GDP, 280 million people). Especially interesting is a speech given by Mr Javad Yarjani, the Head of OPEC’s Petroleum Market Analysis Department, in a visit to Spain (April 2002). He speech dealt entirely on the subject of OPEC oil transaction currency standard with respect to both the dollar and the euro. The following exerts from this OPEC executive provide insights into the conditions that would create momentum for an OPEC currency switch to the euro. Indeed, his candid analysis warrants careful consideration given that two of the requisite variables he outlines for the switch have taken place since this speech in early 2002. These vital stories are discussed in the European media, but have been censored by our own mass media (14) “The question that comes to mind is whether the euro will establish itself in world financial markets, thus challenging the supremacy of the US dollar, and consequently trigger a change in the dollar’s dominance in oil markets. As we all know, the mighty dollar has reigned supreme since 1945, and in the last few years has even gained more ground with the economic dominance of the United States, a situation that may not change in the near future. By the late 90s, more than four-fifths of all foreign exchange transactions, and half of all world exports, were denominated in dollars. In addition, the US currency accounts for about two thirds of all official exchange reserves. The world’s dependency on US dollars to pay for trade has seen countries bound to dollar reserves, which are disproportionably higher than America’s share in global output. The share of the dollar in the denomination of world trade is also much higher than the share of the US in world trade. Having said that, it is worthwhile to note that in the long run the euro is not at such a disadvantage versus the dollar when one compares the relative sizes of the economies involved, especially given the EU enlargement plans. Moreover, the Euro-zone has a bigger share of global trade than the US and while the US has a huge current account deficit, the euro area has a more, or balanced, external accounts position. One of the more compelling arguments for keeping oil pricing and payments in dollars has been that the US remains a large importer of oil, despite being a substantial crude producer itself. However, looking at the statistics of crude oil exports, one notes that the Euro-zone is an even larger importer of oil and petroleum products than the US.” “From the EU’s point of view, it is clear that Europe would prefer to see payments for oil shift from the dollar to the euro, which effectively removed the currency risk. It would also increase demand for the euro and thus help raise its value. Moreover, since oil is such an important commodity in global trade, in term of value, if pricing were to shift to the euro, it could provide a boost to the global acceptability of the single currency. There is also very strong trade links between OPEC Member Countries (MCs) and the Euro-zone, with more than 45 percent of total merchandise imports of OPEC MCs coming from the countries of the Euro-zone, while OPEC MCs are main suppliers of oil and crude oil products to Europe.” “Of major importance to the ultimate success of the euro, in terms of the oil pricing, will be if Europe’s two major oil producers ⤔ the United Kingdom and Norway join the single currency. Naturally, the future integration of these two countries into the Euro-zone and Europe will be important considering they are the region’s two major oil producers in the North Sea, which is home to the international crude oil benchmark, Brent. This might create a momentum to shift the oil pricing system to euros.” “In the short-term, OPEC MCs, with possibly a few exceptions, are expected to continue to accept payment in dollars. Nevertheless, I believe that OPEC will not discount entirely the possibility of adopting euro pricing and payments in the future. The Organization, like many other financial houses at present, is also assessing how the euro will settle into its life as a new currency. The critical question for market players is the overall value and stability of the euro, and whether other countries within the Union will adopt the single currency.” Should the euro challenge the dollar in strength, which essentially could include it in the denomination of the oil bill, it could be that a system may emerge which benefits more countries in the long-term. Perhaps with increased European integration and a strong European economy, this may become a reality. Time may be on your side. I wish the euro every success.” Based on this important speech, momentum for OPEC to consider switching to the euro will grow once the E.U. expands in May 2004 to 450 million people with the inclusion of 10 additional member states. The aggregate GDP will increase from $7 trillion to $9.6 trillion. This enlarged E.U. will be an oil consuming purchasing population 33% larger than the U.S., and over half of OPEC crude oil will be sold to the EU as of mid-2004. This does not include other potential entrants such as the U.K., Norway, Denmark and Sweden. I should note that since this speech the euro has been trading at parity or above the dollar since late 2002, and analysts predict the dollar will continue its downward trending in 2003 relative to the euro. Further, if or when the U.K. adopts the euro currency, that development could provide critical motivation for OPEC to the make the transition to euros. It appears the final two pivotal items that would create the OPEC transition to euros will be based on if and when Norway’s Brent crude is re-dominated in euros, and when the U.K. adopts the euro. Regarding the later, Tony Blair is lobbying heavily for the U.K. to adopt the euro, and their adoption would seem imminent within this decade. Again, I offer the following information from my astute acquaintance who analyzes these matters very carefully regarding the euro: “The pivotal vote will probably be Sweden, where approval this next autumn of adopting the euro also would give momentum to the Danish government’s strong desire to follow suit. Polls in Denmark now indicate that the euro would pass with a comfortable margin and Norwegian polls show a growing majority in favor of EU membership. Indeed, with Norway having already integrated most EU economic directives through the EEA partnership and with their strongly appreciated currency, their accession to the euro would not only be effortless, but of great economic benefit. As go the Swedes, so probably will go the Danes & Norwegians. It’s the British who are the real obstacle to building momentum for the euro as international transaction & reserve currency. So long as the United Kingdom remains apart from the euro, reducing exchange rate costs between the euro and the British pound remains their obvious priority. British adoption (a near-given in the long run) would mount significant pressure toward repegging the Brent crude benchmark – which is traded on the International Petroleum Exchange in London – and the Norwegians would certainly have no objection whatsoever that I can think of, whether or not they join the European Union.” Finally, the maneuvers toward reducing the global dominance of the dollar are already well underway and have only reason to accelerate so far as I can see. An OPEC pricing shift would seem rather unlikely prior 2004 – barring political motivations (ie. motivations of OPEC members) or a disorderly collapse of the dollar (ie. prolonged high oil prices due to Iraq war causes Japanese bank collapse)- but appears quite viable to take place before the end of the decade.” In otherwords, around 2005, from an economic and monetary perspectivem, it will be logical for OPEC to switch to the euro for oil pricing. Of course that will devalue the dollar, and hurt the US economy unless it begins making some structual changes – or use its massive military power to force events upon the OPEC states… Facing these potentialities, I hypothesize that President Bush intends to topple Saddam in 2003 in a pre-emptive attempt to initiate massive Iraqi oil production in far excess of OPEC quotas, to reduce global oil prices, and thereby dismantle OPEC’sprice controls. The end-goal of the neo-conservatives is incredibly bold yet simple in purpose, to use the “war on terror” as the premise to finally dissolve OPEC’s decision-making process, thus ultimately preventing the cartel’s inevitable switch to pricing oil in euros. How would the Bush administration break-up the OPEC cartel’s price controls in a post-Saddam Iraq? First, the newly installed regime (apparently a U.S. General for the first several months) will convert Iraq back to the dollar standard. Next, with the U.S. military protecting the oil fields, the Bush junta will undertake the necessary steps to rapidly increase production of Iraq oil, quintupling Iraq’s current output – and well beyond OPEC’s 2 million barrel per day quota. Dr. Nayyer Ali offers a succinct analysis of how Iraq’s underutilized oil reserves will not be a “profit-maker” for the U.S. government, but it will serve as the crucial economic instrument used by the Bush junta to leverage and hopefully dissolve OPEC’s price controls, thus causing the neo conservative’s long sought goal of collapsing the OPEC cartel (15): “Despite this vast pool of oil, Iraq has never produced at a level proportionate to the reserve base. Since the Gulf War, Iraq’s production has been limited by sanctions and allowed sales under the oil for food program (by which Iraq has sold 60 billion dollars worth of oil over the last 5 years) and what else can be smuggled out. This amounts to less than 1 billion barrels per year. If Iraq were reintegrated into the world economy, it could allow massive investment in its oil sector and boost output to 2.5 billion barrels per year, or about 7 million barrels a day. Total world oil production is about 75 million barrels, and OPEC combined produces about 25 million barrels. What would be the consequences of this? There are two obvious things. First would be the collapse of OPEC, whose strategy of limiting production to maximize price will have finally reached its limit. An Iraq that can produce that much oil will want to do so, and will not allow OPEC to limit it to 2 million barrels per day. If Iraq busts its quota, then who in OPEC will give up 5 million barrels of production? No one could afford to, and OPEC would die. This would lead to the second major consequence, which is a collapse in the price of oil to the 10-dollar range per barrel. The world currently uses 25 billion barrels per year, so a 15-dollar drop will save oil-consuming nations 375 billion dollars in crude oil costs every year.” “The Iraq war is not a moneymaker. But it could be an OPEC breaker. That however is a long-term outcome that will require Iraq to be successfully reconstituted into a functioning state in which massive oil sector investment can take place.” The American people are largely oblivious to the economic risks regarding President Bush’s upcoming war. Not only is Japan’s economy at grave risk from a spike in oil prices, but additional risks relate to Iran and Venezuela as well, either of whom could move to the euros, thus providing further momentum for OPEC to act on their “internal discussions” and switch to the euro as the fiat currency for oil. The Bush administration believes that by toppling Saddam they will remove the juggernaut, thus allowing the US to control Iraqi’s huge oil reserves, and finally break-up and dissolve the 10 remaining countries in OPEC. This last issue is undoubtedly a significant gamble even in the best-case scenario of a quick and relatively painless war that topples Saddam and leaves Iraq’s oil fields intact. Undoubtedly, the OPEC cartel could feel threatened by the Bush junta’s stated goal of breaking-up OPEC’s price controls ($22-$28 per barrel). Perhaps the Bush administration’s ambitious goal of flooding the oil market with Iraqi crude may work, but I have doubts. Will OPEC simply tolerate quota-busting Iraqi oil production, thus delivering to them a lesson in self-inflicted hara-kiri (suicide)? Contrarily, OPEC could meet in Vienna and in an act of self-preservation re-denominate the oil currency to the euro. Such a decision by would mark the end of U.S. dollar hegemony, and thus the end of our precarious economic superpower status. Again, I offer the astute analysis of my expert friend regarding the colossal gamble this administration is about to undertake: “One of the dirty little secrets of today’s international order is that the rest of the globe could topple the United States from its hegemonic status whenever they so choose with a concerted abandonment of the dollar standard. This is America’s preeminent, inescapable Achilles Heel for now and the foreseeable future. That such a course hasn’t been pursued to date bears more relation to the fact that other Westernized, highly developed nations haven’t any interest to undergo the great disruptions which would follow – but it could assuredly take place in the event that the consensus view coalesces of the United States as any sort of ‘rogue’nation. In other words, if the dangers of American global hegemony are ever perceived as a greater liability than the dangers of toppling the international order (or, alternately, if an ‘every man for himself’ crisis as discussed above spirals out of control and forces their hand). The Bush administration and the neo conservative movement has set out on a multiple-front course to ensure that this cannot take place, in brief by a graduated assertion of military hegemony atop the existent economic hegemony. The paradox I’ve illustrated with this one narrow scenario is that the quixotic course itself may very well bring about the feared outcome that it means to preempt. We shall see!” Under this administration we have returned to massive deficit spending, and the lack of strong SEC enforcement has further eroded investor confidence. Regrettably, the flawed economic and tax policies and of the Bush administration may be exacerbating the weakness of the dollar, if not outright accelerating some countries to diversify their central bank reserve funds with euros as an alternative to the dollar. >From a foreign policy perspective, the terminations of numerous international treaties and disdain for international cooperation via the UN and NATO have angered even our closest allies. Lastly, and despite President Bush’s attempt to use the threat of applying military force to OPEC producers who may wish to switch to the euro for their oil payments, it appears their belligerent neo conservative policies may paradoxically bring about the dire outcome they hope to prevent – an OPEC currency switch to euros. The American people are not aware of such information due to the U.S. mass media, which has been reduced to a handful of consumption/entertainment and profit-oriented conglomerates that filter the flow of information in the U.S. Indeed, the Internet provides the only source of unfiltered “real news.” Synopsis: It would appear that any attempt by OPEC member states in the Middle East or Latin America to transition to the euro as their oil transaction currency standard shall be met with either overt U.S. military actions or covert U.S. intelligence agency interventions. Under the guise of the perpetual “war on terror” the Bush administration is manipulating the American people about the unspoken but very real macroeconomic reasons for this upcoming war with Iraq. This war in Iraq will have nothing to with any threat from Saddam’s old WMD program. This war will be over the global currency of oil. Sadly, the U.S. has become largely ignorant and complacent. Too many of us are willing to be ruled by fear and lies, rather than by persuasion and truth. Will we allow our government to initiate the dangerous “pre-emptive doctrine” by waging an unpopular war in Iraq, while we refuse to acknowledge that Saddam does not pose an imminent threat to the United States? We seem unable to address the structural weakness of our economy due to massive debt manipulation, unaffordable 2001 tax cuts, massive current account deficits, trade deficits, corporate accounting abuses, unsustainable credit expansion, near zero personal savings, record personal indebtedness, and our dependence and over consumption of cheap Middle Eastern oil. How much longer can we reliably import our oil from middle eastern states that dislike or despise us because of our biased foreign policy towards Israel? Lastly, we must bear in mind Jefferson’s insistence that a free press is our best, and perhaps only mechanism to protect democracy, and part of today’s dilemma lies within the U.S. media conglomerates that have failed to inform the People. Regardless of whatever Dr. Blix finds or doesn’t find in Iraq regarding WMD, it appears that President Bush is determined to pursue his “pre-emptive” imperialist war to secure a large portion of the earth’s remaining hydrocarbons, and then use Iraq’s underutilized oil to destroy the OPEC cartel. Will this gamble work? Undeniably our nation may suffer not only from economic retribution, but also from increased Al-Qaeda sponsored terrorism as well. Will we stand idle and watch CNN, as our government becomes an international pariah by discarding International Law as it wages a unilateral war in Iraq? Is it morally defensible to deploy our brave but naÃve young soldiers around the globe to enforce U.S. dollar hegemony for global oil transactions – via the barrel of their guns? Will we allow imperialist conquest in the Middle East to feed our excessive energy consumption, while ignoring the duplicitous overthrowing of a democratically elected government in Latin America? Shall we accept the grave price of an unjust war over the currency of oil? We must not stand silent and watchour country become a ‘rogue’ superpower, relying on brute force, thereby forcing the industrialized nations or OPEC to abandon the dollar standard – thus with the mere stroke of a pen – slay the U.S. Empire? Informed citizens believe this administration is pushing us towards that dire outcome. Remaining silent is not only misguided, but false patriotism. This need not be our fate. When will we demand that our government begin the long and difficult journey towards energy conservation, the development of renewable energy sources, and sustained balanced budgets to allow real deficit reduction? When will we repeal of the unaffordable 2001 tax cuts to create a balanced budget, enforce corporate accounting laws, and substantially reinvest in our manufacturing and export sectors to move our economy from a trade account deficit position back into a trade account surplus position? Undoubtedly, we must make these and many more painful structural changes to our economy if we are to restore our “safe harbor” investment status. Ultimately we will have to make sacrifices by reducing our excessive energy consumption that we have become accustomed to as a society. It is imperative that our government also begins economic and monetary reforms immediately. We must adopt our economy to accommodate the inevitable competition to the dollar from the euro as an alternative international reserve currency and oil transaction currency. The Bush administration’s seemingly entrenched political ideology appears quite incompatible with these necessary economic reforms. Ultimately We the People must demand a new and more responsible administration. We need leaders who are willing to return balanced, conservative fiscal policies, and to our traditions of engaging in multilateral foreign policies while seeking broad international cooperation. It has been said that all wars are fought over resources or ideology/religion. It appears that this administration may soon add “currency wars” as a third paradigm. I fear that the world community will not tolerate a U.S. Empire that uses its military power to conquer sovereign nations who decide to sell their oil products in euros instead of dollars. Likewise, if President Bush pursues an essentially unilateral war against Iraq, I suspect the historians will not be kind to his administration. Their agenda is clear to the world community, but when will U.S. patriots become cognizant of their modus operandi? “If you tell a lie big enough and keep repeating it, people will eventually come to believe it.” “The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.” – Joseph Goebbels, German Minister of Propaganda, 1933-1945 END OF ESSAY

+

Background Information on Hydrocarbons To understand hydrocarbons and how we got to this desperate place in Iraq, I have listed four articles in the Reference Section from Michael Ruppert’s controversial website: ‘From the Wilderness.’ Although some of Ruppert’s articles are overwrought from time to time, their research detailing the issues of hydrocarbons, and the interplay between energy and the Bush junta’s perpetual “war on terror” is quite informative. Other than the core driver of the dollar versus euro currency threat, the other issue related to the upcoming war with Iraq appears related to the Caspian Sea region. Since the mid-late 1990s the Caspian Sea region of Central Asiawas thought to hold approx. 200 billion barrels of untapped oil (the later would be comparable to Saudi Arabia’s reserve base)(16). Based on an early feasibility study by Enron, the easiest and cheapest way to bring this oil to market would be a pipeline from Kazakhstan, through Afghanistan to the Pakistan border at Malta. In 1998 then CEO of Halliburton, Dick Cheney, expressed much interest in building that pipeline. In fact, these oil reserves were a *central* component of Vice President Cheney’s energy plan released in May 2001. According to his report, the U.S. will import 90% of its oil by 2020, and thus tapping into the reserves in the Caspian Sea region was viewed as a strategic goal that would help meet our growing energy demand, and also reduce our dependence on oil from the Middle East (17). According to the French book, The Forbidden Truth (18), the Bush administration ignored the U.N. sanctions that had been imposed upon the Taliban and entered into negotiations with the supposedly ‘rogue regime’ from February 2, 2001 to August 6, 2001. According to this book, the Taliban were apparently not very cooperative based on the statements of Pakistan’s former ambassador, Mr. Naik. He reports that the U.S. threatened a “military option” in the summer of 2001 if the Taliban did not acquiesce to our demands. Fortuitous for the Bush administration and Cheney’s energy plan, Bin Laden delivered to us 9/11. The pre-positioned U.S. military; along with the CIA providing cash to the Northern Alliance leaders, led the invasion of Afghanistan and the Taliban were routed. The pro-western Karzai government was ushered in. The pipeline project was now back on track in early 2002, well, sort… After three exploratory wells were built and analyzed, it was reported that the Caspian region holds only approximately 10 to 20 billion barrels of oil (although it does have a lot of natural gas) (16). The oil is also of poor quality, with high sulfur content. Subsequently, several major companies have now dropped their plans for the pipeline citing the massive project was no longer profitable. Unfortunately, this recent realization about the Caspian Sea region has serious implications for the U.S., India, China, Asia and Europe, as the amount of available hydrocarbons for industrialized and developing nations has been decreased downward by 20%. (Globalestimates reduced from 1.2 trillion to approx. 1 trillion) (18, 19). The Bush administration quickly turned its attention to a known quantity, Iraq, with it proven reserves totaling 11% of the world’s oil reserves. Our greatest nemesis, Bin Laden, was quickly replaced with our new public enemy #1, Saddam Hussein… For those who would like to review the impact of depleting hydrocarbon reserves from the geo-political perspective, and the potential ramifications to how this may ultimately create an erosion of our civil liberties and democratic processes, retired U.S. Special Forces officer Stan Goff offers a sobering analysis in his essay: ‘The Infinite War and Its Roots’ (20). Likewise, for those who wish to review the unspeakable evidence surrounding the September 11th tragedy, the controversial essay “The Enemy Within” by the famous American writer Gore Vidal offers a thorough introduction. Although published in Italy and a major UK newspaper, The Observer, you will not read Gore Vidal’s controversial essay in the U.S. media. Note: Gore Vidal’s latest book, ‘Dreaming War’ features this as the opening essay (21). Finally, ‘The War on Freedom” by British political scientist Nafeez Ahmed asks disconcerting questions about the 9/11 tragedy (22). FOOTNOTES (1)London, Heidi Kingstone, ‘Middle East: Trouble in the House of Saud’ (January 13, 2003) http://www.jrep.com/Mideast/Article-0.html (2)Recknagel, Charles, ‘Iraq: Baghdad Moves to Euro’ (November 1, 2000) http://www.rferl.org/nca/features/2000/11/01112000160846.asp (3)Gutman, Roy & Barry, John, Beyond Baghdad: Expanding Target List: Washington looks at overhauling the Islamic and Arab world (August 11, 2002) http://www.unansweredquestions.net/timeline/2002/newsweek081102.html (4)’Economics Drive Iran Euro Oil Plan, Politics Also Key’ (August 2002) http://www.iranexpert.com/2002/economicsdriveiraneurooil23august.htm (5)’Forex Fund Shifting to Euro,’ Iran Financial News, (August 25, 2002) http://www.payvand.com/news/02/aug/1080.html (6)Costello, Tom, ‘Japan’s Economy at Risk of Collapse’ (December 11, 2002) http://www.msnbc.com/news/845708.asp?0cl=cR (7) Gluck, Caroline, ‘North Korea embraces the euro’ (December 1, 2002) http://news.bbc.co.uk/1/hi/world/asia-pacific/2531833.stm (8) ‘What the World Thinks in 2002 : How Global Publics View: Their Lives, Their Countries, The World, America’ (2002) http://people-press.org/reports/display.php3?ReportID5 (9) ‘Euro continues to extend its global influence’ (January 7, 2002) http://www.europartnership.com/news/02jan07.htm (10) Henderson, Hazel, ‘Beyond Bush’s Unilateralism: Another Bi-Polar World or A New Era of Win-Win?’ (June 2002) http://www.hazelhenderson.com/Bush’s%20unilateralism.htm (11) Birms, Larry & Volberding, Alex, ‘U.S. is the Primary Loser in Failed Venezuelan Coup,’ Newsday (April 21, 2002) http://www.coha.org/COHA%20_in%20_the_news/ Articles%202002/newsday_04_21_02_us__venezuela.htm (12) ‘USA intelligence agencies revealed in plot to oust Venezuela’s President,’ (Dec 12, 2002) http://www.vheadline.com/0212/14248.asp (link now dead) (13) Liu, Henry C K, ‘US Dollar hegemony has got to go,’ (Asia Times, April 11, 2002) http://www.atimes.com/global-econ/DD11Dj01.html (14) ‘The Choice of Currency for the Denomination of the Oil Bill,’ Speech given by Javad Yarjani, Head of OPEC’s Marketing Analysis Department (April, 2002) http://www.opec.org/NewsInfo/Speeches/sp2002/spAraqueSpainApr14.htm (15) Dr. Ali, Nayyer, ‘Iraq and Oil,’ (December 13, 2002) http://www.pakistanlink.com/nayyer/12132002.html (16) Pfeiffer, Dale, ‘Much Ado about Nothing — Whither the Caspian Riches? ‘ (December 5, 2002) http://www.fromthewilderness.com/free/ww3/120502_caspian.html (17) Ruppert, Michael, ‘The Unseen Conflict,’ (October 18, 2002) http://www.fromthewilderness.com/free/ww3/101802_the_unseen.html (18) Jean Charles-Briscard & Guillaume Dasquie, ‘The Forbidden Truth: U.S.-Taliban Secret Oil Diplomacy, Saudi Arabia and the Failed Search for bin Laden’, Nation Books, 2002. (19) Ruppert, Michael, ‘Colin Campbell on Oil.'(October 23, 2002) http://www.fromthewilderness.com/free/ww3/102302_campbell.html (20) Golf, Stan, ‘The Infinite War and its Roots,’ http://www.fromthewilderness.com/free/ww3/082702_infinite_war.html (21) Vidal, Gore, ‘Dreaming War: Blood for Oil & the Cheney-Bush Junta,’ Nation Books, 2002. His essay, ‘The Enemy Within’ was first printed in the UK’s Observer (Oct 27, 2002) http://www.ratical.org/ratville/CAH/EnemyWithin.html (22) Ahmed, Nafeez, ‘The War on Freedom: How and Why America was Attacked, September 11, 2001’, Tree of Life Publications, 2002.

SARS is scaring Canadians the way Terrorism scares Americans, though… when I recently coughed at Vancouver Airport, people looked at me in horror and another physically moved away from my immediate proximity. A few people on my YVR-SFO flight were even wearing surgical masks.

Hong Kong likes to put a brave face on things; and the widespread use of surgical masks has led to an outbreak of fashion trends. How very postmodern.

-Ian.

——- http://www.guardian.co.uk/sars/story/0,13036,929622,00.html?=foib

Fashion fad masks panic

Behind the surgical masks bearing Burberry and Louis Vuitton logos, people in Hong Kong are growing increasingly worried about the spread of the Sars virus, writes Arun Sudhaman

Friday April 4, 2003

On the streets of Hong Kong, a mask is fast becoming de rigeur. Always susceptible to fads, the city’s seven million-strong population has embraced the latest one with a fervour that reflects the fear which has gripped it.

The Sars virus has struck at the heart of Hong Kong’s increasingly fragile self-confidence, and as the number of infected cases continues to mount, the realisation is dawning among residents that the deadly disease is unlikely to recede any time soon.

One of the most densely populated regions on earth, Hong Kong has resembled nothing more than a ghost town over the past week. Residents stay at home under a self-imposed quarantine, and the normally hectic streets are eerily empty after office hours. Those who do venture out are invariably masked, and the city has begun to increasingly look like a giant outdoor hospital ward.

The situation has begun to take on a life of its own. A new language has sprung up to cover the events that now make up an average day. People question each other over the availability of the N95, a particularly popular industrial-strength mask.

Most make do with cheap surgical masks, known as “3-ply”, while others use a variety of items, among them handkerchiefs, napkins and even plastic files, to cover the mouth and nose. Still more, in a particularly poignant show of desperation, hold their hands over their faces, attempting to physically fight off the virus that has so far claimed 17 lives in Hong Kong.

The city’s legendary entrepreneurial spirit is however still intact. Barely a day of the health crisis had passed before masks bearing Burberry and Louis Vuitton logos were spotted in Central, the territory’s financial centre.

For the less highbrow, street vendors sell a range of masks adorned with popular cartoon characters. Pharmacies sell masks for up to five times their usual price and are doing a similarly brisk trade in disinfectants.

At office blocks, the usual cheerful disregard for cleanliness has been replaced by the obsessive quest for a sterile environment. At one property management company, staff sit masked and wearing latex gloves, while cleaners bleach all the available surfaces. Disinfectant wipes are distributed and workers are asked to wear a jacket whilst outside in the oppressive humidity, to be hung outside when entering the office.

Earlier this week, a 14-year-old succeeded in perpetrating a vicious hoax – that Hong Kong had been declared an infected port.

The city’s stock exchange immediately nosedived and people flooded grocery stores in a panic-buying frenzy. As blows were exchanged in supermarket aisles, the government was forced to send over six million text messages out to quell the rumour. But the sense of panic remains, and anyone exhibiting even the mildest symptoms of a cold is given a very wide berth.

Among the city’s more wealthy expatriate population, the fear is blended with a curious display of bravado. Many go mask-less, determined not to be swayed by tabloid hysteria.

The annual rugby sevens, a traditionally expatriate display of drinking hedonism, drew significant numbers of fans, despite questions from local doctors about the wisdom of staging such an event. As a spokesman for the event noted: “It’s more public opinion than reality.”

At a clinic in an upmarket residential neigbourhood, however, American parents demand tests for their children, before sending them back to the US, where Sars has less of a hold. Expatriate families are deserting the city in droves, leaving only the breadwinner behind.

But the majority of the population is not this lucky. More than 200 people have already been placed under strict quarantine in holiday camps, through the government’s invocation of little-used colonial powers. Many of them staged a sit-in when it became clear that they would have to share toilets between households at the quarantine camps, and successfully forced the government to open two more camps.

And despite the Hong Kong populace’s reputation for being apolitical, the government’s role in the crisis has come in for harsh criticism. At the daily press briefing, residents gather around television sets, voicing their opinions on the government’s handling of the crisis in no uncertain terms.

Initial attempts to downplay the crisis, with one senior official remarking that “there is no indication of any unusual pneumonia in Hong Kong”, have yet to be forgotten by the public. China, too, features heavily in daily conversation, with many at a loss to explain the mainland’s seeming refusal to acknowledge the scope of the problem.

The irony of the situation has also not escaped some of the city’s residents. Since its heady days as a financial powerhouse, the Hong Kong special administrative region has had to bear the brunt of a hellish economic downturn.

In addition the “bird flu”, an avian virus believed to have originated in Guangdong province, has killed seven to date.

With Hong Kong trying hard to recapture some of its former glory by recasting itself as the gateway to a booming China, the city’s proximity to the mainland has left it facing a health crisis of alarming proportions.

As one Hong Kong lawyer comments: “It’s just one bad thing after another. I know Hong Kong is supposed to be positioning itself as the entrance to China, but this is working the other way around.”

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.

washingtonpost .com

The Best Dissent Has Never Been Anti-American

By Michael Kazin

Sunday, February 9, 2003; Page B03

As the U.S. military prepares for war, millions of Americans are seeking a way to stop it. Hundreds of thousands of them have attended national demonstrations in Washington and San Francisco. Local protest — on campuses, in churches and by labor union members — is broader and louder than at any time since the Vietnam War, more than three decades ago. Most Democrats running for president, eager to keep step with the party’s base, have warned the White House against rushing into war.

But the American left, the natural vehicle for opponents of imperial overreach, remains a tiny persuasion — and a sharply divided one at that. The organizers of the recent Washington and San Francisco marches refuse to say anything critical of Saddam Hussein; many belong to the Workers World Party, whose stated goal is “solidarity of all the workers and oppressed against this criminal imperialist system.” That viewpoint dismays liberals such as philosopher and editor Michael Walzer, who calls for a “decent” left that would never apologize for tyrants. But whatever their views on Iraq, no one in the current peace movement has put forth a moral vision that might unite and sustain it beyond the precipice of war.

Progressives once had such a vision, and they derived it from unimpeachable sources — the Declaration of Independence and the Constitution. They articulated American ideals — of social equality, individual liberty and grass-roots democracy — and accused governing elites of betraying them in practice. Through most of U.S. history, this brand of patriotism was indispensable to the cause of social change. It made the protests and rebellions of leftists comprehensible to their fellow citizens and helped inscribe those movements within a common national narrative.

Thomas Paine, born in England, praised his adopted homeland as an “asylum for mankind” — which gave him a forum to denounce regressive taxes and propose free public education. Elizabeth Cady Stanton co-authored a “Declaration of Rights of Women” on the centennial of the Declaration of Independence and argued that denying the vote to women was a violation of the 14th Amendment. The Populists vowed to “restore the Government of the Republic to the hands of the ‘plain people’ with which class it originated” through such methods as an eight-hour day and nationalization of the railroads. In the 1930s, sit-down strikers proudly carried American flags into the auto plants they occupied and announced that they were battling for “industrial democracy.” Twenty years later, Martin Luther King Jr. told his fellow bus boycotters, “If we are wrong — the Supreme Court of this nation is wrong” and proclaimed that “the great glory of American democracy is the right to protest for right.”

One could list analogous statements from pioneering reformers such as Jane Addams and Betty Friedan, industrial unionists John L. Lewis and Cesar Chavez, and the gay liberationist Harvey Milk. Without patriotic appeals, the great social movements that weakened inequalities of class, gender and race in the United States — and spread their message around the world — never would have gotten off the ground.

A self-critical sense of patriotism also led activists on the left to oppose their nation’s expansionist policies abroad. At the end of the 19th century, anti-imperialists opposed the conquest of the Philippines by invoking the words of Thomas Jefferson and comparing President William McKinley to King George III. Foes of U.S. intervention in World War I demanded to know why Americans should die to defend European monarchs and their colonies in Africa and Asia. When Martin Luther King spoke out against the Vietnam War, he explained simply, “I criticize America because I love her. I want her to stand as a moral example to the world.”

It’s difficult to think of any American radical or reformer who repudiated the national belief system and still had a major impact on U.S. politics and policy. The movement against the Vietnam War did include activists who preferred the Vietcong flag to the American one — and a few star-spangled banners were actually torched. But the antiwar insurgency grew powerful only toward the end of the 1960s, when it drew in people who looked for leadership to such liberal patriots as King, Walter Reuther and Eugene McCarthy rather than to Abbie Hoffman and the Weathermen.

Since then, however, many on the left have viewed national ideals as fatally compromised by the racism of the founders and the jingoism of flag-waving conservatives. Noam Chomsky derisively describes patriotism as the governing elite’s way of telling its subjects, “You shut up and be obedient, and I’ll relentlessly advance my own interests.” Protesters against the International Monetary Fund and World Bank echo Malcolm X’s description of himself as a “victim of Americanism” who could see no “American dream,” only “an American nightmare.” For such activists, fierce love for one’s identity group — whether black, Latino, Asian, Native American, gay or lesbian — often seems morally superior to devotion to a nation that long tolerated that group’s exclusion or abuse.

Progressives have certainly had some cause to be wary of those who invoke patriotism. After World War II, “Americanism” seemed to become the property of the American Legion, the House Un-American Activities Committee and the FBI. In the 1960s, liberal presidents bullied their way into Indochina in the name of what Lyndon Johnson called “the principle for which our ancestors fought in the valleys of Pennsylvania.” On the contemporary right, popular talk-show hosts routinely equate a principled opposition to war with a “hatred” for America.

Yet the left’s cynical attitude toward Americanism has been a terrible mistake. Having abandoned their defense of national ideals, progressives also lost the ability to pose convincing alternatives for the nation as a whole. They could take credit for helping to reduce the sadism of our culture toward homosexuals and racial minorities. But the right set the political agenda, in part because its activists were willing to speak forcefully in the name of American principles that knit together disparate groups — such as anti-union businessmen, white evangelicals and Jewish neo-conservatives — for mutual ends.

When progressives abandoned that vision at the end of the ’60s, they lost something precious and necessary. The left could no longer speak convincingly to individuals and groups who did not share its iconoclastic assumptions. The economic interests of many of those “Middle Americans” whom Richard Nixon and Ronald Reagan lured to the GOP clashed with those of the pro-business right. But the left’s grammar of protest, with its emphasis on rights for distinct and separate groups, failed to mobilize an aggrieved majority.

On the Mall last month, some protesters carried signs that read “Peace Is Patriotic.” If the left hopes to become more than an occasional set of demonstrators and grow, once again, into a mass movement, it will have to build on that sentiment and elaborate the wisdom behind it.

Since the attacks of Sept. 11, 2001, the stakes have been raised. Even if war against terrorism and against Iraq doesn’t continue to overshadow all other issues, it will inevitably force activists to clarify how they would achieve security, for individuals and the nation. How can one seriously engage in this conversation about protecting America if the nation holds no privileged place in one’s heart? Without empathy for one’s neighbors, politics becomes a cold, censorious enterprise indeed.

Progressives should again claim, without pretense or apology, an honorable place in the long tradition of those who demanded that American ideals apply to all and opposed the efforts of those, from whatever quarter, who tried to reserve them for privileged groups and ignoble causes. When the attorney general denies the right of counsel to a citizen accused of terrorism or a CEO cooks the books and fires workers who take him to task, they ought to be put on the defensive — for acting in un-American ways. A left that scorns the very notion of patriotism is wasting a splendid opportunity to pose a serious alternative to the arrogant, blundering policies of the current administration and its political allies. Now, as throughout its history, the most effective way to love our country is to fight like hell to change it.

Michael Kazin teaches history at Georgetown University. His latest book, co-authored with Maurice Isserman, is “America Divided: The Civil War of the 1960s” (Oxford University Press).

© 2003 The Washington Post Company

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.

[….]

———–

It’s scary to think that sophisticated 3G mobile systems may depend for their survival on Hello Kitty, that cutesy Japanese pink cat with whiskers but no mouth. But that’s what it might come down to.

Not long ago, a 3G content developer noted that backgrounds with the Hello Kitty design, which serves the same purpose as the Western world’s yellow smiley face, were one of the most popular downloads over i-mode, the mobile multimedia service offered by Japan’s NTT Docomo.

Such simple things are also trés chic in Taiwan. Sixty percent of the traffic on the proprietary i-mode service is for ring tones, background wallpaper like Hello Kitty and real-time news, according to the top executive at KG Telecom.

KGT, a relatively small operator in Taiwan, decided earlier this year to forgo its bid for a 3G license because it saw too many obstacles, such as a lack of applications, to the generation of cash in the short term. Instead, KGT turned to NTT Docomo because it offered a tip-to-toe solution. So far, Taiwan is one of only two export destinations for i-mode.

For the mobile industry, Taiwan and Japan represent interesting case studies that offer evidence of the services consumers want. Though such evidence is far from conclusive, network operators, equipment operators, equipment vendors, handset providers and content developers that are still uncertain about how to make 3G successful might well take note.

But among industry insiders, it seems, the only certainty is that data services — which require such things as licenses and network upgrades — also entail greater expenses, untested applications and a new round of experimentation with handsets and how they should be used. Of course a few operators are averaging more money per user, but that tends to be on more proprietary systems like those in Japan.

Natural communication?

The slowdown in the general telecom market also brought a sense of urgency, if not quite desperation, to those who gathered in Taipei for IEEE’s recent GlobeCom 2002. Operators, handset makers and content developers want to see data services enjoy the kind of success they are having in Japan and Korea.

Of the world’s 70 million mobile-data users, 80 percent are in Japan, noted Kurt Hellstrom, president of troubled mobile-phone giant Ericsson. “We are just starting to see the growth in mobile data. It starts with camera phones and sending pictures and one day this will be a natural way of communicating with each other,” Hellstrom said. “Nobody on the inside has ever expected that this [data services] technology shift would take place overnight.”

Yet it will happen a bit more quickly if the industry can pull itself together, observers said, and overcome political divisiveness on such issues as interfaces, protocols, formats and content billing.

For instance, 69 operators, mostly of General Packet Radio Service (GPRS) networks, have launched multimedia messaging services (MMS) based on 3GPP standards, said J.T. Bergqvist, executive vice president of Nokia Networks. In terms of network interoperability, he said, the technical issues have largely been solved, opening the service to a potential base of 300 million users. Now “it is a question of [business] agreements between the operators” that will slow things down.

And for 3G, Bergqvist said, “We as an industry have not, by and large, been able to create something that is transportable from one operator to another. We have not created something yet where two operator systems would be interoperable. We have not created open interfaces in those data-oriented systems, particularly in Japan and Korea.”

Such bottlenecks are, in some cases, causing frustrated operators to look for a shortcut to data services. That’s what happened with Taiwan’s KGT, which finally opted to purchase i-mode.

In December 1999 KGT was the first to launch the Wireless Application Protocol in Taiwan. Then in September 2000 it introduced GPRS, which was followed in August 2001 by an integrated GPRS over WAP portal called iGoGo. KGT launched i-mode in June 2002.

Executives at KGT believe the WAP protocol failed because it was primarily developed by a voice service community to help fill the gap of mobile data, making it a subset of voice.

WAP started as a value-added service and never took center stage where wireless data should have been, said Leslie Koo, chairman and chief executive officer of KGT. Handset consistency was an issue because each WAP handset had different versions of different browsers from different software vendors, so it was pretty much impossible for a carrier to provide consistent service to multiple handsets with various interfaces, Koo said.

“Sometimes your e-mail would work with Nokia handsets, but not with Ericsson’s. And once you fine-tuned it to Ericsson’s, then Motorola’s had a bug. So you are caught constantly running around and finding answers from no one because your vendor will tell you, ‘No, that’s not my problem, it’s the handsets.’ Then the handset manufacturer will tell you, ‘No, it’s not the handsets, it’s the browser.’ And the browser manufacturer will tell you, ‘Sorry, that’s an outdated version of the browser, which is no longer supported.’ ”

Meanwhile, customer complaints are rolling in, he said. This leaves the carrier wondering whether it should be a wireless-access provider, a portal provider or a service integrator of “all these very complex vendor solutions and software solutions and content platforms. It is almost impossible to manage. No wonder WAP never took off,” Koo said.

For better or worse, with i-mode, at least there are consistent standards for technical applications and business execution.

“These are not the best standards in the world, but they are standards that all i-mode service providers will follow,” he said. “They not only include the content format but also the specs to handset manufacturers. So this is the first time that the carriers can ask the handset manufacturers and also the system integrators to provide an end-to-end solution that will meet the service requirements of delivering a consistent, high-quality service.”

Common business sense suggests that the industry would learn from such a solution. So far, however, that remains questionable. “In the past, the industry, perhaps, has been guilty of just selling hardware. Glorious IDs,” said Brian Holmes, a product-marketing director for Motorola (China) Electronics.

“But in this future world I speak to, design no longer specifically speaks to just hardware. It is about understanding consumer experiences and how they want to use the product, and actually doing application design specifically around the mobile environment and targeted at specific consumers. If we don’t do that, as an industry we will disappoint.”

Nearly commonplace

Asia, in general, has had the best rollout of data services so far. In Japan and Korea, networks and, more importantly, services are nearly commonplace. And mobile-data networks are rolling out in places like Taiwan, Singapore and Hong Kong, where mobile penetration (measured by SIM card subscriptions) is nearly at or above 100 percent, which is far above many Western countries.

Even in Asia, however, some network operators think that trumpeted promises of video-streaming services won’t, in reality, pay the bills — at least not yet. In certain markets based on highly proprietary systems, such as i-mode in Japan, there could be some exceptions, of course.

During a visit to Taiwan, NTT Docomo president and chief executive officer Keiji Tachikawa told IEEE Communication Society members that in Japan even cats and dogs will eventually participate in mobile chic.

Is such a scenario farfetched? Well, in a country that created the robotic dog, Aibo, it doesn’t seem so crazy to imagine that man’s best friend, if lost, would be found with the help of a GPS device that tracks an RF chip implanted in its collar. “The potential demand for mobile services is enormous if services could be applied to objects rather than people,” Tachikawa said.

But given the realities of today’s telecom slowdown, and the sensitive nature of the rollout stage for data services, where end users’ first impressions are long-lasting, many operators will not assume that Japan’s experience transfers easily.

If operators are to learn anything from Japan, it is that, to pay the bills, they should focus on the small stuff, such as Hello Kitty multimedia messages, rather than on the promise of video teleconferencing. “Trying to do full, 30-frame-per-second video, for example, on a GPRS network is probably not in the cards given the current level of compression technology,” said Motorola’s Holmes.

Yet, as the future shapes up video teleconferencing might actually be close to realization. Operators as well as handset providers and network equipment vendors are cozying up to the notion that IEEE 802.11 access should be a part of 3G. Ericsson’s Hellstrom called it a “complementary” technology. Bell Labs fellow Qi Bi said, “Incorporating Wi-Fi into the third-generation system is an important part of the system design. 3G can provide ubiquitous coverage and Wi-Fi can cover the hot spots.”

NTT Docomo’s Tachikawa also factored Wi-Fi into his company’s 4G plans. During his keynote to GlobeCom, Tachikawa revealed a few details of what NTT Docomo thinks 4G networks should do and how they will look. “We are thinking of using a cellular system because we plan to build it by extending the coverage and mobility of the 3G system,” he said. “On the other hand, in low-mobility areas, such as indoors and in hot spots, it may be necessary to introduce a solution that incorporates wireless LAN-type technology for data transmission at even higher speed.”

Fourth-generation systems should offer a peak speed of more than 100 Mbits per second in stationary mode, Tachikawa said, with an average of 20 Mbits/s when traveling. Network capacity should be at least 10 times that of 3G systems. In practical terms, that would quicken the download time of a 10-Mbyte file to one second on 4G, from 200 seconds on 3G, he said, enabling high-definition video to stream to phones and create a virtual-reality experience on high-resolution handset screens.

In the meantime, it’s a good bet that operators will focus on early returns on investment, no matter how unglamorous the application might be. Since operators are used to a more-traditional role as connectivity providers rather than content providers — let alone creators — they will likely look to MMS as a workhorse revenue provider for 2.5G/3G data services, just as SMS is for 2G data services.

Many will be conservative, suggested Herman Rao, vice president of service network and enabling technologies for Taiwan’s FarEastone Telecommunications Co. Ltd. “We know how to make money on connectivity, but we do not yet know how to make money on content. So the challenge for operators is on the content business and services model.”

Rao, too, suspects that such simple applications as location-based maps, entertainment services and news will be the key to early 3G success. “Bandwidth is not as critical as equipment vendors try to make us believe,” he said. “Video streaming won’t be that important.”

So like it or not, Hello Kitty and smiley faces may be the way forward. And that idea might not be such a stretch, since NTT Docomo is already moving on to enabling cats and dogs.

Copyright 2002 © CMP Media, LLC

———–

-Ian.

—— http://www.nytimes.com/2002/11/18/technology/18CELL.html

November 18, 2002 Success of Cellphone Industry Hurts Service By SIMON ROMERO

Americans’ use of cellphones has increased so quickly that wireless networks are becoming overloaded, causing a growing number of customers to complain about calls that are inaudible or are cut off or are never connected in the first place.

And things could get worse before they get better, industry experts say, because even as cellphone companies are rolling out fancy features like digital photography and Internet-based games, they are hard-pressed to spend the money needed to improve basic service.

“This is a situation in which the wireless industry is a victim of its own success,” said James D. Schlichting, a deputy chief of the wireless communications bureau at the Federal Communications Commission.

Many of the industry’s service problems are a result of a huge growth of new customers. In 56 percent of the nation’s households, someone now subscribes to wireless phone service, more than double the percentage in 1995.

The surge in users is overwhelming the capacity to handle calls on wireless systems — whether because local transmitters are too few or too small, or because the local airwaves have become too crowded and carriers are unable to obtain larger swaths of radio frequencies.

The problems are compounded by basic economics. Customers have been attracted by the plunge in prices for wireless service. The average per-minute cost has dropped to 11 cents this year from 56 cents in 1995. For the phone companies that has meant a decline in average revenue per customer to $61 a month, from $74 in 1995.

And so, just when the wireless companies need to invest more money to accommodate all those new users, the companies are under increased financial strain.

As a result, the complaints are piling up.

The F.C.C. tracks only the few hundred complaints it receives each quarter — it recently reported fewer than in past years — but acknowledges that an increase in subscribers had worsened service problems. And surveys conducted for the industry itself show that complaints are rising.

“If I make 10 calls, at least three have to be redialed because they don’t go through,” said Orville Mills, who lives near Van Cortlandt Park in the Bronx and recently switched carriers to Sprint from T-Mobile. “The new services are just a distraction from not having the basics down.”

The percentage of all wireless subscribers who have called customer-service centers at least once in the last year to complain about service or because they had other problems has climbed to 61 percent, from 53 percent in 2000, according to J. D. Power & Associates, a company that measures customer satisfaction in many industries and sells it to the companies being scrutinized.

The level of such calls is higher than for many other consumer-service providers, including land-line telephone companies, cable-television operators and stockbrokers, according to Power. About 30 percent of the calls to customer-service centers were complaints related to dropped calls, bad reception or calls not going through, up from 19 percent in 2000. Other reasons included complaints and questions about billing, equipment and services.

The author of the study, Kirk Parsons, said the wireless companies are aware of the problem. He said he expected complaints to grow as the companies add new services, contributing to stress on the networks and subscribers’ confusion.

“It’s important to remember that cellphones are glorified radios,” said Travis Larson, a spokesman for the Cellular Telecommunications and Internet Association, the wireless industry’s main trade group. “They’re subject to interference from a lot of things, from building walls to sunspots to the weather. There will always be a trade-off between mobility and call quality.”

Meanwhile, the stock prices of AT&T Wireless Services and Sprint PCS, the two largest stand-alone publicly traded carriers, are down more than 45 percent this year on investor concern about revenues. And the two largest carriers, Verizon Wireless and Cingular Wireless, which are controlled by regional Bell companies, are struggling to find and pay for additional swaths of airwaves to carry calls.

The industry received something of a financial reprieve last Thursday from the Federal Communications Commission, which ruled that wireless companies would not have to pay the $16 billion they had offered for additional airwave licenses during a bidding process that is now being contested. The licenses had been seized by the F.C.C. from NextWave Communications and auctioned after NextWave filed for bankruptcy protection. But the licenses, and the airwave capacity they represent, are tied up by NextWave’s appeal of that seizure, which is now pending before the Supreme Court.

Another industry problem is the sheer technical complexity of sending and receiving wireless calls. Unlike conventional telephone systems, in which every customer is hardwired to the network, wireless systems rely on a delicate mesh of thousands of antenna towers — which often face resistance from local governments — and cellular relay stations.

The stations can easily be flooded by an increase in calling volumes. That vulnerability became clear in the hours after the Sept. 11 terrorist attacks in New York and Washington, when the local wireless networks were effectively shut down by the surge of attempted calls.

Various new companies are trying to develop towers and other forms of transmission technologies that could handle such surges. But so far carriers remain reliant on systems that, in some ways, still resemble radio communications networks that were first developed in World War II.

Because of brisk demand, financial problems at wireless carriers are not as severe as those in other areas of telecommunications, where large companies like WorldCom and Global Crossing have sought bankruptcy protection. Even so, some investors think the only way to ensure industry stability will be to winnow the competing wireless players. Instead of six nationwide carriers, they say, a more economically feasible number might be three or four.

“Consolidation among wireless companies can’t fix these problems, but it can make them less severe,” said Frank J. Governali, an analyst at Goldman, Sachs.

For months, investors have been waiting for mergers that would shrink the number of large competitors. No deals have yet materialized, though, partly because of technical obstacles. Unlike nations in Europe and Asia with higher wireless usage rates, the United States does not have a single wireless technical standard that would make it easy for carriers with different systems to combine operations.

Verizon and Sprint, for instance, employ an American-designed standard called code division multiple access, or C.D.M.A. Meanwhile, AT&T Wireless, Cingular Wireless and T-Mobile, formerly known as VoiceStream, use the global system for mobile communications, or G.S.M. format, common in Europe and Asia. Another large American carrier, Nextel, uses its own technology, called Iden.

Carriers have also resisted measures that would make the industry more consumer-friendly. In response to industry lobbying, for example, the F.C.C. has postponed until next fall a deadline for companies to start allowing “number portability” — letting customers keep their cellphone numbers even when they switch providers. The companies are reluctant to implement the measure, fearing it will create new costs while also encouraging customer defections.

“I’ve had the same number for three years,” said Sarah Vanderslice, a student at the Benjamin N. Cardozo School of Law in New York who subscribes to Sprint’s service. “The fear of losing it is the only thing that keeps me from dropping my cellular company.”

The F.C.C. has also repeatedly extended the industry’s deadlines for improving emergency-call abilities for wireless phones. Calls from cellphones are still much more difficult for emergency officials to pinpoint than calls from land-line phones. And the issue has become more pressing as the number of emergency calls from cellphones has grown to the current rate of more than 30 percent of 911 calls.

“The wireless industry is in need of a stricter taskmaster,” said David Heim, the managing editor of Consumer Reports magazine, which publishes an annual feature each year on cellular service problems. Although the F.C.C. has jurisdiction on certain operational matters, the wireless industry remains largely unregulated.

But few people expect the Bush administration’s F.C.C. to try to exert significant new authority. And even a former F.C.C. chairman from the Clinton years says that, in the main, it would be prudent to avoid more regulation.

“We have a robustly competitive wireless industry,” said Reed E. Hundt, the former F.C.C. chairman, who is now a senior adviser on information technologies for the management consultant firm McKinsey & Company. “Younger people recognize this in opting for wireless over wire line and putting up with some flaws in exchange for freedom of movement.”

Like their counterparts in Europe, carriers in the United States are hoping new services like text messaging and transmission of digital photos will eventually generate the additional revenue they need to put their finances on stronger footing. But aside from a small but loyal following of mainly younger subscribers that exchange text messages, none of the new services have attracted a large number of users.

And anyone who expects competitive market forces to quickly improve cellphones may be overly optimistic, some experts say. They note that the conventional wired telephone system has been evolving for more than a century and became widely dependable only in recent decades.

“Don’t hold your breath,” said Jeffrey Kagan, an independent telecommunications analyst in Atlanta. “Service and the economic evolution of wireless are works in progress — it might be years before customers are truly satisfied.”