Thursday, March 31, 2016

Lebanon – Dream or Nightmare-in-Waiting

This is very personal blog for me. You see, I was a just boy, living with a divorced mom in Washington, D.C. when she wound up marrying a career American Foreign Service Officer. His next post Рat the U.S. Embassy in Beirut, Lebanon, as a commercial attach̩ (promoted later to Chief, Economic Section) Рwould change my life forever. I turned 13 on the ship heading across the Atlantic and the Mediterranean, and when we arrived in Beirut on January 10, 1960, I thought it was exotic and strange.
The cries of the muezzin (the singing voice calling the faithful Muslims to prayer from the towers above the neighborhood mosques), the voices street vendors – selling items like “kahyek” (a sesame/spice filled crispy bread), “artichokey” (guess what) or serving juice from a canister strapped to their backs, bending forward to create an arcing liquid into a cup to be sold to a thirsty customer – it was fascinating. The beaches were white sand and excellent (until the oil slick from a pipe rupture), the snow-capped mountains with great skiing resorts, friendly people, streetcars that I learned to jump off of when they were at full speed, and hospitality unbridled. I fell in love with this incredible land and welcoming people. A former French colony, Lebanese had a weird mix of Arabic heritage with a French joie de vivre. It was, to put it mildly, charming.
To this very day, I have never been received more graciously, treated with warmer hearts, than the Lebanese of my youth – Maronite Catholics, Sunnis, Shiites, Druze… you name it, they were extraordinary. I travelled to Syria, Jordan, Egypt, but nothing was as cheerful and welcoming as my new Lebanese home. When I left Beirut four years later to attend college back in the states, I looked over my shoulder as I boarded the Pan Am jet was about to take me away. I was sad.
I have never been back since. When I had the money to travel, Lebanon had unraveled. The richer folks, mostly Maronite and Sunni, had mostly moved to Dubai, France, a few to the States, a large contingent to start businesses in South America. Factions began to battle for turf in the 1970s and 80s (with a short explosion in 2008). Everything fell apart. Palestinians entered the southern part of Lebanon, and as the locals asked Israel for help to deal with these intruders, Israeli planes instead bombed the south indiscriminately. Civil war expanded, with Syria cackling in the background, financing its surrogates. Iran fomented a powerful surge of Hezbollah to reinforce what had once been a Shiite minority, now moving into political control of the country as a whole. The Lebanese in charge were puppets of foreign forces.
Explosions, shootings, bombings. Familiar buildings destroyed. My high school shot up (but still running). Lapses of peace and stability with an occasional resurgence of violence. Recently, the government was unable to pick a president. For over a year. The government simply failed to perform its most basic functions; garbage piled up in the streets, uncollected. But somehow, that little spark that drives Lebanese to enjoy life, to laugh and smile, endured. Hot sexy beaches, hotter bands playing on rooftop cafes, and a people born to work hard but cherish their friends and families still rose above it all, according to my Lebanese comrades… and play harder. Miracle of miracle, Lebanon stabilized… enough anyway.
But even for those people who found joy amidst the turmoil around them, they were looking over their shoulders at the horrific conquest of vast portions of Syria and Iraq by ISIS. And with its magnificent harbors, particularly Beirut itself, Lebanon was and is an obvious target as ISIS seeks to enhance its access to the sea and control the Levant above Israel. People in Lebanon are worried as they should be. About 1.2 million Syrian refugees have recently fled to Lebanon, creating a migrant problem of enormous proportions. Until the past two years, Lebanon had a population of 4.3 million (including about 450 thousand Palestinians), but with the flood of people escaping ISIS, Lebanon now a country of 5.5 million. How would the US fare with an influx equal to a quarter of its population?
But maintaining stability in Lebanon is a precious commodity in troubled times, and even with all of that turmoil, Lebanon still represents hope to the rest of the region, if not the world. “Lebanon has weathered five years of Middle Eastern turmoil remarkably well but its stability should not be taken for granted and it needs long-term financial help to cope with a huge number of Syrian refugees, a senior U.N. official said.
“U.N. Special Coordinator for Lebanon Sigrid Kaag, speaking before a Syria donors' conference in London, said on [February 3rd] that the [Lebanese] refugee crisis must be recognized as long-term and the response must move beyond meeting humanitarian needs… ‘Our big message is really the need for sustainable, long-term predictable financing, and very much a focus on not only humanitarian but also what we call stabilization support ... job creation,’ Kaag told Reuters.
“With many Syrian children stuck indefinitely in refugee camps, education is also a major priority. ‘The first response of humanitarians is always protect and save lives. But we are now looking at a generation that needs to go to school,’ she said in an interview…
“While Lebanon has avoided its own conflict since the start of the Syrian war, its politicians are struggling to agree on anything. That has left the government largely paralyzed and the country without a president… ‘Let's really keep our eye on the ball on Lebanon, let's support Lebanon, let's be active for Lebanon, but Lebanon needs to be in the driver's seat,’ Kaag said.
“With a return of refugees to Syria unlikely for some time, Kaag said ‘we need to really look at the fragility and stability of Lebanon in holistic manner.’ ‘There's politics, there's security, and the socio-economic development side of Lebanon should really be propped up.’… The London donors' conference builds on previous such meetings in Kuwait. U.N. agencies are appealing for a total of $7.73 billion to cope with Syria's needs this year.
“The Lebanese government is expected to seek donor support for plans including infrastructure investment that will create jobs, and funds to support its public schools that are taking in Syrian children… ‘As the economy has suffered from the crisis, unemployment has risen ... particularly in poorer areas and amongst the young people, so the debate on employment has always been very sensitive, and there was a reluctance to address it,’ Kaag said.
“She acknowledged the risk of ill-feeling if Syrian refugees compete with Lebanese people for scarce jobs. Proposals from the Lebanese government would in any case allow them to work only in labor-intensive sectors such as construction and agriculture… ‘But now I think six years into the crisis there is a realization that there is a large potential workforce. It may benefit the economy and therefore Lebanon, but we need to look at job creation for Lebanese alongside vulnerable refugees.’” Reuters, February 3rd.
Mostly, we have talk about destroying ISIS. Without building hope for the future, all that destruction will guarantee is many generations of hateful people with nothing left to lose. Whatever is not spent today will come back to haunt us tenfold or worse in the future.
I’m Peter Dekom, and it is time to start thinking about all those folks struggling in the Middle East as human beings… vulnerable, scared and eager to live their lives in safety… someday.

Wednesday, March 30, 2016

Coal in Transition

Hillary Clinton raised hackles when she told the world that shutting down coal-fired plants and reducing our dependence on coal generally was an inevitable part of her concern/platform for the environment. That she also proposed a massive influx in infrastructure and re-training dollars for the increasingly-displaced coal workers was shoved to the bottom of reports from her opponents. She was anti-miner, anti-growth, according to GOP pundits.
Yet the most conservative elements of the Wall Street community have come to the same conclusion. Coal is not and cannot be a growth industry, particular not in the United States. Iconic financial institution, Goldman Sachs, has issued a report stating that the use of thermal coal is an “irreversible” declining “long-term” trend. How times, and allies of old, have changed. An industry that has been plagued with pollution issues, black lung disease and a horrific safety record is facing the ultimate downsizing.
Back in 1902, when a coal miners’ strike threatened to shut down power generation (from trains, to heavy industry, to a nascent electrical power generating capacity), mega-financial giant, John Pierpont Morgan (yes, that JP Morgan), stepped in and negotiated a truce, earning him the gratitude of then-President Teddy Roosevelt. But today, the banking industry shares Goldman’s fear that coal is an industry with nowhere to go but down.
“Mr. Morgan’s bank, now JPMorgan Chase, announced two weeks ago that it would no longer finance new coal-fired power plants in the United States or other wealthy nations. The retreat follows similar announcements by Bank of America, Citigroup and Morgan Stanley that they are, in one way or another, backing away from coal.
“While coal has been declining over the last several years, Wall Street’s broad retreat is an ominous sign for the industry… ‘There are always going to be periods of boom and bust,’ said Chiza Vitta, a metals and mining analyst with the credit rating firm Standard & Poor’s. ‘But what is happening in coal is a downward shift that is permanent.’
“On [March 16th] the world’s largest private-sector coal company, Peabody Energy, said that it might have to file for bankruptcy protection, following a path already taken by three of the nation’s other large coal companies… Peabody has been trying to sell three of its mines in Colorado and New Mexico to raise cash. But the sale to Bowie Resource Partners appears to have stalled amid the difficult financing environment. Bowie did not comment. A Peabody spokesman said the company ‘stands ready to complete the sale of assets to Bowie.’
“Coal, like railroads, steel and other engines of the nation’s industrial expansion in the 19th and early 20th centuries, helped drive Wall Street’s profits for generations. More than a century later, the coal industry is in a free fall and the banks are pulling away… ‘Given the state of the coal industry today, I think Mr. Morgan himself might make the same decision,’ said Jean Strouse, a biographer of the banker.
“Some banks say they are trying to do their part to curtail climate change by moving away from coal projects and financing ventures that produce less carbon. But bankers also say there is a more basic reason for the shift: Lending to coal companies is too risky and could ultimately prove unprofitable… Coal companies are being squeezed by competition from less expensive energy sources like natural gas and by stiffer regulations — pressures that show no signs of letting up. New York Times, March 20th. Coal is still responsible for a third of America’s electrical power generating capacity, but the notion of “clean coal” is a myth where effluents are simply pumped underground for future generations to deal with the toxic pollutants.
There are issues as banks pull back, however: “[The] banks’ retreat could inflict collateral damage on an industry that employs tens of thousands of workers and needs financing not only to keep operating, but also to clean up coal mines after they close. If coal companies are unable to pay for the mine reclamation, taxpayers could be on the hook for the cleanup costs.
“As big American lenders pull back, a few foreign banks, like Deutsche Bank, have been willing to step in, industry officials say…In its latest annual corporate responsibility report, Deutsche Bank said it was phasing out financing for projects that employ so-called mountaintop removal mining, which environmentalists say is particularly harmful. But the bank’s policy statement did not commit to the type of broad reduction in coal exposure that many American lenders have made in recent months.” NY Times.
But what about the miners? Who cares for them? Is it a matter of “horse and buggy” economics? As former President Bill Clinton observed, since we’ve had a steady decline in mine employment since the 1920s, if we really cared about miners, we would have done something to benefit them a long, long time ago. Wikipedia: “In 1914 at the peak there were 180,000 anthracite [hard coal] miners; by 1970 only 6,000 remained. At the same time steam engines were phased out in railways and factories, and bituminous [soft coal] was used primarily for the generation of electricity. Employment in bituminous [coal mining] peaked at 705,000 men in 1923, falling to 140,000 by 1970 and 70,000 in 2003.” And the numbers have plunged from there as mines face a very uncertain future everywhere (not just the U.S.)… no matter who wins the elections this year.
I’m Peter Dekom, and seismic shifts in heavy industry can render an entire sector of labor vulnerable to massive unemployment; the answer lies not in trying to preserve that which cannot be sustained but to deal directly to support those displaced by the change.

Tuesday, March 29, 2016

Another Achilles Heel for Iran

The best positive scores for countries on Transparency International’s corruption index are 97 for Denmark, 91 for New Zealand, and 87 for Sweden. The United States fares an embarrassing but not terrible 74. You’d think that a nation with a strict religious government, where Islamic law is strictly enforced and the country is itself led by Ayatollahs would be clean and corruption free, but Iran gets a horrific 27 on that Transparency index (really bad). Even most African and Latin American nations do better.
Many within Iran blame the sanctions, which made imports prohibitively expensive and out of reach for virtually all government officials. The black market flourished, and religious prelates were clearly among those with their hands out. For Iran’s industrial giants, they were completely unable to build and operate major plants without importing major technology and specialized equipment from overseas. Religious leaders joined Revolutionary Guards and other government officials, willing to turn a blind eye to dealing with the enemy, for a price… a hefty price. Lots of money changed hands.
Now, with the sanctions fading, Iran’s leadership is trying to figure out how to get one of the most corrupt countries on earth on to a straight and narrow path. Iran offers miscreants convicted of corruption nasty prison sentences and even the death penalty.
The March 19 New York Times explains the conundrum: “The pastry shop, tucked away in an affluent west Tehran neighborhood and selling Disney-themed cakes and party hats, is not particularly notable except for one thing: It is owned and operated by Iran’s powerful Ministry of Petroleum.
“The shop — along with luxury cars, an airline and dozens of other pricey assets — was seized by the government from Babak Zanjani, a 43-year-old billionaire businessman who for over a decade was a major figure in Iran’s sanctions-busting network and this month received a death sentence for his dealings.
“Mr. Zanjani’s arrest in 2013, after President Hassan Rouhani came to power, was portrayed as a symbolic break with the high levels of corruption that defined the years under the presidency of Mahmoud Ahmadinejad, from 2005 to 2013. His conviction, by a lower court, was an attempt to show the Iranian public that, with the lifting of sanctions in January, the days of the sanctions-skirting middlemen are over.
“Reconnecting Iran to the world economy is a top priority for President Rouhani. But to fully reconnect, Iran needs to dismantle the network of thousands of intermediaries that was devised to get around the sanctions. The problem, economists and insiders say, is that enough sanctions remain in place that the Iranian economy still cannot function without the network.
“The government has taken some steps. The Ministry of Petroleum is working on a new, more competitive model for its oil contracts, and the Parliament signed a bill to fight money laundering, an important step toward more financial transparency.
“But there is only so much it can do. Regular financial transactions continue to be nearly impossible because the United States has designated the Islamic Republic a “state sponsor of terrorism,” stemming from its support for the Lebanese Hezbollah movement. International banks doing business with Iran can face up to a billion dollars in penalties if they violate regulations.
“‘The financial hegemony of the United States is so influential that European banks are scared to work with us,’ said Saeed Laylaz, an economist close to the Rouhani government. ‘We also don’t have enough dollars in foreign bank accounts, no international credit, so obviously some former sanction breakers continue to have an intermediary role.’
“Iran has another reason to not dismantle the network too hastily. The middlemen it funneled money to for purchases around the world are sitting on billions of unspent dollars. Getting that money back is proving to be extremely difficult, experts say, and will only get harder if the network is dismantled. One financial consultant who requested anonymity because of his dealings with Iranian banks said the problem was exacerbated by a lack of record keeping.
“Mr. Laylaz estimates that between 5,000 and 10,000 people worked in the network, handling deals worth between $300 billion and $400 billion over the past decade… ‘At least 10 percent was taken for commissions,’ he said, adding that that number did not include the money still controlled by those in the network, given to them by banks and even government institutions to do business.
“The chances that the government will ever see that money again are slim, Mr. Laylaz said. ‘There are no traces of this money, the people involved have disappeared, heads of institutions have changed,’ he said.” Before we going scoring our own backs with whips at the evil sanctions we imposed – that worked, apparently – it is really important to remember that Iran has a very long legacy that supports a culture of corruption. Thus, when it sought to do “work-arounds,” fell back, hard, on traditional habits.
Indeed, while the United States is number 16 on the Transparency International corruption list (one being the least corrupt), Iran is number 130 (out of 168 countries), and that is nothing short of terrible. How did those countries that we helped “liberate” do on the scale? Worse. Iraq chimes in at 161, and Afghanistan is near the very bottom at 166. Perhaps Iran will clean up, but it has dug itself into a really deep corruption hole.
I’m Peter Dekom, and sometimes those who scream religious purity the loudest have the vilest violation of morals and ethics to explain.

Monday, March 28, 2016

Flush and You’re Dead!

If you don’t believe in evolution, well, you probably don’t read my blogs anyway, but if you are wondering about the proliferation of antibiotic resistant bacteria – little nasty purveyors of pain, misery, and death – there’s a lot more to it than how they evolve. We know that folks who stop their trace of antibiotic treatments without finishing the full prescription give “clever” germs the ability to evolve against a weakened treatment option resulting in a new “bug” that is no longer impacted by that treatment. Once these superbugs form, it is very worthwhile to see how they spread.
We know that they love hospitals because of the myriad opportunities to grow, fester, infected weakened immune systems often found in hospitals, get into open surgical cavities, unhealed wounds and generally pass through instruments and surfaces with lots of chances to spread. But recent discoveries illustrate how germs find their way into the general environment, superbugs with startling mobility and infection potential… well beyond the human carriers they enlist in their deadly cause.
“Every day Southern California hospitals unleash millions of gallons of raw sewage into municipal sewers… The malodorous muck flows miles to one of the region's sewage plants, where it is treated with the rest of the area's waste and then released as clear water into a stream or directly to the Pacific.
“Scientists at the Environmental Protection Agency recently announced they had discovered a lethal superbug — the same one that caused outbreaks at UCLA and two other Los Angeles-area hospitals — in sewage at one of those plants. They declined to name the facility…
“But a growing number of studies show sewage plants can't kill the superbugs. Instead the facilities serve as ‘a luxury hotel’ for drug-resistant bacteria, a place where they thrive and grow stronger, said Pedro Alvarez, a professor of environmental engineering at Rice University, one of the scientists studying the problem.
“Alvarez and other researchers say the failure of sewage plants to eliminate the dangerous bacteria is one way they may be spreading from hospitals to the environment… ‘Chlorine is just not doing it,’ Alvarez said of the treatment used by most plants.
“The fear is that healthy people otherwise not at risk from the bacteria — including swimmers at the beach — could be infected… Already officials are worried about the surprising number of people sickened with CRE [carbapenem-resistant enterobacteriaceae] who have not recently visited a medical facility: 8%, according to an October study.
“Hospitals are not breaking laws by releasing the sewage. Laws regulate the overall level of disease-causing bacteria in the nation's surface waters, but there is no specific regulation of bacteria resistant to antibiotics… Deemed the ‘nightmare bacteria’ by federal officials, CRE survives nearly all antibiotics. It kills as many as half its victims.” Los Angeles Times, March 7th. And if you this this is only a Los Angeles-based problem, think again. California is ahead of the curve, but the issue is nationwide. And once the germs are out…
Generally, toxicity, in each of its forms, is a big issue across the nation and most certainly around the world. As the recent Democratic debates in Flint, Michigan emphasized, for example, drinking water is often contaminated by corroding lead, vestiges of very old water-pipe infrastructure build in a bygone era. And lead can cause serious medical problems, particularly in children, who are especially vulnerable.
According to a Texas A&M study: “[Over time, lead slowly] accumulates in the body and can cause lead poisoning. Even at low concentrations, when there are no outward symptoms, lead can damage the brain, kidneys, nervous system and red blood cells. Some effects of lead poisoning may diminish if the source of exposure is removed, but some damage is permanent.
“Symptoms of lead poisoning include tiredness, a short attention span, restlessness, poor appetite, constipation, headaches, sudden behavior change, vomiting and hearing loss. Adults with lead poisoning may be irritable and disoriented.
“Interestingly, most children with lead poisoning do not show any visible symptoms, even though young children, infants and fetuses absorb lead more quickly than adults and are vulnerable to even small amounts of it. Lead poisoning can cause a child’s mental and physical development to be irreversibly stunted.”
Estimates from both governmental sources to Fitch Ratings suggest that the cost to replace all those old lead water utility pipes range from $250 to $300 billion. When all of our infrastructure fixes are aggregated, the total costs exceed $2 trillion, money that is not remotely close to that level in any federal or state infrastructure budget. The numbers grow annually as “deferred maintenance” makes things much worse. In fact, we are seeing conservative legislators, state and federal, fighting to reduce budgets and mandates for environmental agencies, including the EPA, and limiting how much we re willing to invest to bring the United States infrastructure into the 21st century.
It really does come down to how much we care about ourselves and our future. We are stupidly living off the investments of past generations, apparently unwilling to continue such efforts under a notion of “fiscal responsibility.” But once again, our elected representatives do not seem to be able to differentiate between “spending” (which has no economic rate of return) and “investing” (generally, education, research and infrastructure) which does. We cannot make our nation “great again” without massive investment in those aspects of life that only a government can make, and there are no shortcuts or panaceas to the contrary.
I’m Peter Dekom, and we need to face up to reality or live with the consequences… which can be fatal.