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March 18, 2008

Never Let Inconvenient Facts Screw With The Narrative

File under, "I hate to say I toad you so...."

The Spousal Unit and I were discussing the Bear Stearns debacle last night over a post-prandial glass of wine and he opined that it was only a matter of time before The Shrieking began. And Lo!, not twelve hours later the piteous wail of progressiva schadenfreudensius was heard in the land. For it doth well appear that We the People must now add failure to predict that greed is bad economic policy to the growing list of The Shrub's crimes:

The economic meltdown is beginning to sound like a bad rewrite of the Iraq occupation. The experts are staring in disbelief.

Former Treasury Secretary Robert Rubin was at a session at the Brookings Institution this morning at which said that "few, if any" people anticipated the sort of meltdown that we are seeing in the credit markets at present.

I've been predicting the Bushenomic house of cards was going to crash for at least three years now. Of course no one listens to me. I'm not a well credentialed policy wonk. I'm just a cranky old lady who has has an unimpeded view of the street from here in my bargain basement. Unfortunately it turned out I had clearer sightline than those so safely ensconced in their ivory towers.

Egad, but the BushReich has a lot to answer for. If only it had launched a recklessly illegal pre-emptive invasion of the free market system:

Dale Franks said...

Huh. And this has what, exactly to do with "Bushenomics"?

I remember president Bush pushing through some tax cuts. But, oddly enough, I don't remember him setting up structural credit problems in the housing market, leading to problems in housing price declines, and increased foreclosures.

You know, sometimes--just very occasionally--the economy does things that really have nothing at all to do with what the president does.

I know. I was just shocked when I learned that. I think I was in the tenth grade at the time.
3:17:00 PM
Blogger Libby Spencer said...

Oh, silly me. Here I thought high level presidential appointees who dictate policy, the wholesale evisceration of regulatory controls that would have prevented deceitful lending practices and the invention of convoluted investment instruments and the president's repeated assurances that the economy was just really great and everyone should keep on shopping might have had something to do with it.

Dale Franks said...

*sigh*

Bear Stearns is an investment bank. Always has been. So, even if Glass-Steagal hadn't been repealed--a repeal signed into law by ultra-conservative president Bill Clinton in 1999--it would have nod no effect whatsoever on the current problem.

Indeed, as far as regulation goes, the majority of the subprime loans originated from firms that are not, and never have been, subject to Federal regulatory scrutiny. In 2005, 52% of subprime mortgages were issued by firms who are not subject to any federal regulation at all. Another 25% were issued by firms with only an indirect regulatory relationship with the fed. As Fed Governor Susan Bies said, "What is really frustrating about this is [federal regulators] don't have enforcement authority to do anything with these state-licensed, stand-alone mortgage lenders."

You see, those mortgage brokers are regulated by the states. Not the Federal government.

So, it doesn't matter who the "presidential appointees" are, or what the federal regulatory environment is, when that regulatory environment doesn't apply to the mortgage brokerage.

In addition, "invention of convoluted investment instruments" simply wasn't covered by the regulations either, since no regulatory scheme can cover entirely new innovations that pop up in the derivatives market, and weren't even envisioned when the regulations were promulgated.

Moreover, many of the problems that are clear now, were simply masked by rising home prices. For instance, the FDIC--while not perfect--does tend to jump in when consumers complains about predatory lending. The trouble in this case was that...no one was complaining because as long as the homeowner had an asset whose value was appreciating, they could always sell the house, make a ton of money on the sale, and clear the mortgage. Once housing values started to decline...well, it was too late to look into the problem.

Moreover, if you're gonna require that much tougher regulation be imposed for loan standards, well, that's fine, but then no fair coming along later and complaining that low-income families can't get a mortgage, because you've implemented a regulatory regime that in effect dries up their access to credit.

It seems to me that the problem isn't that Bush is my guy, but rather that he's so not your guy that you are straining to blame Bush for things that he literally has very little to do with.

The president really isn't some economic czar, who can benevolently guide the economy by fiat.

But when all else fails, shift the goalposts:


Libby Spencer said...

Give me a break Dale. Don't pretend I'm blaming everything on Bush specifically. Bushenomics implies a systemic and deliberate incompetence that encouraged short term greed to the benefit of relative few over long terms gains that would benefit the many. Of course Bush is not personally responsible and I'm aware that economic trends build over units of time that span beyond single administrations, but to say that Bush and those he put in charge of the show had little to no effect sounds more like denial than neutral analysis to me.

Franks obviously needs to get a life before he goes off the deep end and starts sounding like a complete whack job:

This is, to me, the synthesis of this worldview with which I now found myself disenchanted: that everything is always wrong.

But in my life, a brief review revealed, everything was not always wrong, and neither was nor is always wrong in the community in which I live, or in my country. Further, it was not always wrong in previous communities in which I lived, and among the various and mobile classes of which I was at various times a part.

And, I wondered, how could I have spent decades thinking that I thought everything was always wrong at the same time that I thought I thought that people were basically good at heart? Which was it? I began to question what I actually thought and found that I do not think that people are basically good at heart; indeed, that view of human nature has both prompted and informed my writing for the last 40 years. I think that people, in circumstances of stress, can behave like swine, and that this, indeed, is not only a fit subject, but the only subject, of drama.

...I began to question my hatred for "the Corporations"—the hatred of which, I found, was but the flip side of my hunger for those goods and services they provide and without which we could not live.

And I began to question my distrust of the "Bad, Bad Military" of my youth, which, I saw, was then and is now made up of those men and women who actually risk their lives to protect the rest of us from a very hostile world. Is the military always right? No. Neither is government, nor are the corporations—they are just different signposts for the particular amalgamation of our country into separate working groups, if you will. Are these groups infallible, free from the possibility of mismanagement, corruption, or crime? No, and neither are you or I. So, taking the tragic view, the question was not "Is everything perfect?" but "How could it be better, at what cost, and according to whose definition?" Put into which form, things appeared to me to be unfolding pretty well.

Do I speak as a member of the "privileged class"? If you will—but classes in the United States are mobile, not static, which is the Marxist view. That is: Immigrants came and continue to come here penniless and can (and do) become rich; the nerd makes a trillion dollars; the single mother, penniless and ignorant of English, sends her two sons to college (my grandmother). On the other hand, the rich and the children of the rich can go belly-up; the hegemony of the railroads is appropriated by the airlines, that of the networks by the Internet; and the individual may and probably will change status more than once within his lifetime.

What about the role of government? Well, in the abstract, coming from my time and background, I thought it was a rather good thing, but tallying up the ledger in those things which affect me and in those things I observe, I am hard-pressed to see an instance where the intervention of the government led to much beyond sorrow.

But if the government is not to intervene, how will we, mere human beings, work it all out?

I wondered and read, and it occurred to me that I knew the answer, and here it is: We just seem to. How do I know? From experience. I referred to my own—take away the director from the staged play and what do you get? Usually a diminution of strife, a shorter rehearsal period, and a better production.

The director, generally, does not cause strife, but his or her presence impels the actors to direct (and manufacture) claims designed to appeal to Authority—that is, to set aside the original goal (staging a play for the audience) and indulge in politics, the purpose of which may be to gain status and influence outside the ostensible goal of the endeavor.

Strand unacquainted bus travelers in the middle of the night, and what do you get? A lot of bad drama, and a shake-and-bake Mayflower Compact. Each, instantly, adds what he or she can to the solution. Why? Each wants, and in fact needs, to contribute—to throw into the pot what gifts each has in order to achieve the overall goal, as well as status in the new-formed community. And so they work it out.

See also that most magnificent of schools, the jury system, where, again, each brings nothing into the room save his or her own prejudices, and, through the course of deliberation, comes not to a perfect solution, but a solution acceptable to the community—a solution the community can live with.

... I recognized that I held those two views of America (politics, government, corporations, the military). One was of a state where everything was magically wrong and must be immediately corrected at any cost; and the other—the world in which I actually functioned day to day—was made up of people, most of whom were reasonably trying to maximize their comfort by getting along with each other (in the workplace, the marketplace, the jury room, on the freeway, even at the school-board meeting).

And I realized that the time had come for me to avow my participation in that America in which I chose to live, and that that country was not a schoolroom teaching values, but a marketplace.

In other words, maybe this is all just the market's way of correcting a situation that could not have continued indefinitely. An economomist would think of it as a system seeking equilibrium: the proper balance between supply and demand, risk and reward, profit and and loss.

Maybe there is no sinister "system of greed" at work here, unless you consider the vast numbers of people who willingly signed mortagages for houses they could not realistically afford to be greedy and wish the federal government had stepped in earlier, against the law, to strip them of their ill-gotten gains?

Or perhaps you wish the government had forced lenders to take it in the shorts earlier, which loss would likewise have rippled through the economy in the form of layoffs, corporations going under and taxpayers feeling exactly the same stress they are now experiencing? Except, of course, many of the sufferers in that case would not even have had the comfort of ever having enjoyed said 'ill-gotten gains' first?

Ah. What could have been.

Posted by Cassandra at March 18, 2008 08:10 AM

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Comments

Please allow me to fly off of the handle here. The markets are behaving like undisciplined children do when the only thing that mommy and daddy do is feed them candy and clean up their messes. It ain't Bush who is supposed to be the disciplinarian, it's the Fed, and its not done a very good job parenting for a very long time. (Hey, Greenspan, write us another goddamned book about yourself!) Now that its hands are tied, Benny and the Boys are going to have to paper the street with your children's legacies in order to save the brats that repeatedly engaged in risky behavior and brazenly stepped over every line drawn by a timid federal reserve. There's no upside here, save that perhaps that the fed's program of economic socialism on a grand scale will finally awaken the dopes paying the bills.

Posted by: spd rdr at March 18, 2008 09:45 AM

It ain't Bush who is supposed to be the disciplinarian, it's the Fed, and its not done a very good job parenting for a very long time.

Unruly children need and want authority figures. To know what boundaries are acceptable to cross or not. To them the only authority is Bush since BUsh is the President, thus why they tend to seek to erode his power and authority so much. But when they complain that Bush isn't doing enough, what they really want, as all young children want, is for the authority figure to come and smack them around.

It's a little self-destructive for adults, yes, but then when has the Democrat party ever not been self-destructive?

Posted by: Ymarsakar at March 18, 2008 09:54 AM

Cass, please stop using words like prandial, you had me thinking this was going to be a very racy post until I looked up the definition and was sadly disappointed!!!

Posted by: Frodo at March 18, 2008 10:24 AM

On a serious note: "Moreover, many of the problems that are clear now, were simply masked by rising home prices. For instance, the FDIC--while not perfect--does tend to jump in when consumers complains about predatory lending. The trouble in this case was that...no one was complaining because as long as the homeowner had an asset whose value was appreciating, they could always sell the house, make a ton of money on the sale, and clear the mortgage. Once housing values started to decline...well, it was too late to look into the problem."

How true. The fact is that for years now, many people borrow over their ability to pay hoping that housing prices would continue to climb. When the Mrs and I went shopping for a home 15 or so years ago, we had a price range in which we figured we could afford the monthly payments ... the bank we went to cleared us for a significantly higher amount then that which in turn caused our broker to try and push higher priced houses. We however (to his disappointment) stood firm on the range we decided upon and eventually found a place we liked. We learned our lessons from the housing price drop just a few years earlier (late 80's early 90's) when my sister actually owed more then her house was valued. These dips happen all the time, and frankly in my area the cost of housing had spiked outrageously and it was obvious that a correction had to occur sooner or later. Now people who borrowed more then they could afford want to blame someone other then themselves; the government or evil corporate lenders ... ya it has to be them.

Posted by: Frodo at March 18, 2008 10:40 AM

Ah. What could have been.

I think it truly is a matter of free will. The enemies of humanity despise free will and the ability of individuals to decide for themselves what is best. Classical liberals value free will above all else, and seek to do everything to ensure that people's wills are truly free. Since that is, in the end, the only true defense against tyranny and human destruction.

Posted by: Ymarsakar at March 18, 2008 10:41 AM

I'm going to invoke Legends of the Galactic Heroes again found only via bit torrent.

The issue of whether democracy was superior to dictatorship was an interesting theme in that 80s war drama, Babylon 5 esque, Honor Harrington universe, anime series.

If 100% of the people vote in a dictator, is this democracy? And if democracy is the best system around, even with the corrupt leaders it might elect, doesn't this also imply that dictatorships are the worst form of government not because you can't have a good leader but because the successor to that leader is crazy and psychopathic? Think of Octavian and Nero+Caligula.

Obviously we can both recognize that democracy can produce corrupt and inefficient government while autocracy can produce efficient and benevolent rule with the right person in power.

So is the only reason democracy is better than all the others, representative government better than all the others, because democracy has a hope of electing a better leader sometime down the road via institutions and traditions of civilian control of the military?

No, was the answer I derived.

Democracy is not about majority rule, because there is no such thing as majority rule. If 51 percent can decide for 100% what they should then, who decides what the 51% thinks is right? 26% does. And who decides what that 26% thinks should be done? Another 14% of the entire population.

So it is not "rule of the majority", it is rule by the minority, the same as dictatorship (minority of one) and oligarchy.

Why is this not taught in American schools? I leave that for you to figure out.

Democracy and republics are the best form of government because it is rule by the people for the people. When people vote in a dictator, the responsibility is with the people, not the dictator. If the dictator comes to power via military juntas or other methods of violence, then the responsibility rests with the dictators and his supporters, not the people. The point of this is that democracy can only fall if the people no longer wish to rule themselves, if the people have found that ruling themselves required too much sacrifice to be worth it. A dictator coming to power via military force is forcing his will upon the people, regardless of what the people wanted.

Thus there is a great ethical difference between supporting republican values and autocratic values.

Which brings us back to the topic of this post and the comments some people made. When you see people willing and eager to divest responsibility for their actions upon an elite few, the government, or politicians like Hillary/Obama, what you are seeing is the entropic downslide of a republic into either empire or dictatorship.

When people are no longer willingly to take responsibility for their own actions, then a democracy begins to fail from the inside out.

If enough of those parasites exist, were made to exist, or comes to a position of power, the system truly will fail.

And this is not exactly new or even all that hard to do. All you have to do is to convince the individual that likes self-sufficiency and hates being run around in government bureaucracy, that if they put his faith in the One, the Obama of Hope and Audacity, that all these problems will go away for them.

Mussolini will make the trains run on time, you know.

Posted by: Ymarsakar at March 18, 2008 10:54 AM

To elaborate, there is an ethical difference because it is the difference between placing priority on free will as a state of being for human beings or placing priority on a Central Planning Authority as dictatorships do.

Free will means just that, like free speech: you are free to choose actions, but you are not free from the consequences of those actions. Free will doesn't mean you are free to will yourself a god and it should be made to happen by us.

If a people of a nation wants to vote in a dictator, we cannot truly tell them no or force them not to, otherwise we violate our own emphasis on free will. What we can do is to remove the physical reasons why people are choosing to vote for dictatorship. If they want security and order, then we, as proponents of republicanism, must provide them security and order above and beyond that which dictators and terrorists could offer. If this means nuking half of the nation in the process, then that is just how it has to be. We cannot deny the will of people; we can convince them to change their minds though. That is both allowed and ethical for those that value freedom and liberty.

Al Anbar Awakening is a good example of these principles put into action. And it also answers the question of what the US should do if the people of Iraq want to vote in a theocracy. We convince them not to by convincing them that theocracy is not a good thing for them. That means putting Mookie's head on a spike, well that will just be what is needed.

As for the reason why someone should place priority over free will and liberty over dictatorship and the "strong man", America gives a great example of why.

It is only through allowing people to choose what is best for themselves that you get the best possible of all worlds. No central planning authority, whether you call it communism, socialism, dictatorship, or British colonialism, can equal the positive results of a free people making choices in life free of fear and intimidation.

And that, ladies and gentlemen, is why democracy and republican values are the best things to govern humanity. That is why people should support free will over the will of an autocrat or over the will of an elite, rich, and powerful few like the Democrats.

Posted by: Ymarsakar at March 18, 2008 11:04 AM

Cass, please stop using words like prandial, you had me thinking this was going to be a very racy post until I looked up the definition and was sadly disappointed!!!

It is not Cass's fault people thought it was post-coital.

Remember free will and personal responsibility now ; )

Posted by: Ymarsakar at March 18, 2008 11:10 AM

Ditto spd.

Ymar, you seem to have a lot of energy today. I'm still not sure what Muqtada al Sadr is meant to have to do with the financial crisis, but you may wish to rethink your stance on him.

In the middle of the Newsweek article called "Scions of the Surge," this little bombshell was reported without the paper recognizing its importance:

"Petraeus himself now speaks regularly to Sadrist political reps."

So the question you should be asking yourself is: what would it take to make JAM into a gravity well? And what would be the consequences to Iraq of disaggregating the elements who won't obey the ceasefire from JAM proper?

The Anbar Awakening achieved exactly that with JAI.

Posted by: Grim at March 18, 2008 11:17 AM

What seems to be lost in all this discussion (at least to me), is the fact that these "predatory loans", were in fact not just encouraged but nearly regulated to the lending institutions. I don't know how many of you remember a few years back when the government started sniffing around lenders for "red lining". The idea was, if you were buying a home or just seeking a loan, and you lived in a particular area, you were most likely going to be turned down. Why? Because you were a bad credit risk.

So the government was threatening to impose heavy fines for "discrimination" because of the practice. In response, the lenders caved and started issuing loans to borrowers who were bad risks. Now we discover (to everyone's great suprise) that when you loan to a bad risk, they might *gasp* not be able to cover the loan!! Who would have imagined that?

I can't be the only one who remembers this.

Posted by: MikeD at March 18, 2008 11:41 AM

G'morning Milady,

This excellent posting is a testament to all that is weak in the nature of the beast. The desire to want more without the sacrifice and the effort required to earn it... and... to sign a contract without fully reading and/or understanding the T's & C's or appreciating the associated risk. Then, when it blows up in your face, to point the finger of blame outward.

Markets like personal fortune, can with much preparation, effort and sometimes a smidgen of luck, go up. But they can also on occasion, go down. Being prepared by salting away a percentage of your labors, for the down times, is a lesson I would have thought was taught by every caring parent to their children, early on. Then when those times roll around and you think Ah. What could have been., it's not so bad. Not so bad if you did not overreach or fail to factor in and prepare for the possibility of lean times when times were phat.

"There's no upside here, save that perhaps that the fed's program of economic socialism on a grand scale will finally awaken the dopes paying the bills."
Unfortunately those dopes paying the freight are as awake as they will most likely ever be. And I'm beginning to think that we're outnumbered too.

"I can't be the only one who remembers this."
Nope, you're not the only one who remembers... Rock meet hard_place or damned if you do, damned if you do not.

Since I'm more preoccupied than usual with my Walkin' Boss assigned duties of late, I'll end with what pappy always said, what goes up, must come down.

Posted by: bt_Milburn Drysdale_hun at March 18, 2008 12:00 PM

And what would be the consequences to Iraq of disaggregating the elements who won't obey the ceasefire from JAM proper?

The Anbar Awakening achieved exactly that with JAI.

Posted by: Grim at March 18, 2008 11:17 AM

One notable difference was that Syria was not in a position to provide too much Baathist help to Sunnis, AQ, or their Baathist cousins in Iraq. That is not true of Iran and Al Sadr.

It is not exactly a winning strategy to assume that Sadr will make the same mistakes as Zarqawi nor that the Shia will make the same choice that the Sunni tribes eventually did.

Whatever cease fire the US benefited from in Al Anbar, was because the tribes there were too busy fighting AQ to worry about the US. So they prefered us to not interfere and thus they wouldn't attack us, resulting in a sort of unofficial ceasefire.

With the Shia controlled regions by Sadr's wing, there's no benefit to the cease fire other than giving Sadr time to think up new stuff. He has already been in government and walked out. How many second chances do evil people get, Grim?

As for his lieutenants that are rethinking their stance, there's no reason why they need to die along with Sadr. Sadr, however, will only be an impediment to progress, since he is not like the Sunni tribes who fought because of excessive pride and arrogance. This guy's interested in nothing but power and slaughter. Leaving him as a center of gravity to draw in Iranian support and what has been going on in Basra, should not be a price Petraeus has to agree to when he is speaking to Sadr's faction. Even if that faction is splintering.

If a wing of Sadr's group splits away, they would need to kill Sadr even more than we do, simply to break up the leadership hierarchy that is standing in their way. And even if they didn't, if they acceded to tribal politics, they would still need US troop presences in Sadr city and Basra, if only to hunt down the Iranian elements providing supplies and agents into Iraq. So long as Sadr is alive, I do not believe he will accede to such necessities, necessities that would benefit his people but not him.

Without the people that once supported Sadr and his political group actually seeing who the Americans are and what they can do for them, any alliance on paper is just that. Words on paper. It means nothing to tribes that value blood and land.

I'm still not sure what Muqtada al Sadr is meant to have to do with the financial crisis

It's about 2 to 3 steps removed from the financial crisis.

Posted by: Ymarsakar at March 18, 2008 12:51 PM

How many second chances do evil people get, Grim?

If he is evil, as many as it benefits us to give him. Killing a man is easy; bringing him to life again is hard.

Sadr has held to his ceasefire, and it appears to me that the radicals are disaggregating from him on their own. He is left with a choice: get in front of them, or let them go.

He has more to lose by getting in front of them than he does by letting them go: and when they go, they will be easy to take down. The Iraqi Police, who are mostly former Badr brigade members, hate the radicals of the JAM faction.

Which means you're left with a Sadr organization that is a draw for young radicals, but one that is nonviolent. Sadr becomes more useful to us -- and profits more personally -- as a cultural and political figure than he would be at the head of an army, or as a dead man. Iran, to the degree that it can control him and his organization (which may be far less than you think -- Shiite Iraqis are very sensitive to Persian domination, valuing their Arab status at least as highly as they value their Shiite status) will gain more with him as an ally in the government than as an outlaw or an exile (or a martyr, of whom there are already plenty, if you wanted one).

I think that's exactly what you're going to see happen. In fact, I think I am watching it happen right now. If JAM sheds its radicals and goes green like JAI did, the war is over -- what will remain is the difficult proposition of nation building, but not war as we have seen it heretofore.

Posted by: Grim at March 18, 2008 01:03 PM

Killing a man is easy; bringing him to life again is hard.

That might matter if we actually needed him, but you haven't made the argument for why that is the case. Why do we or even his people or the people of Iraq, need Sadr alive, Grim?

which may be far less than you think

It is not a priority to me as to who controls whom, since any alliance of convenience is still something not good for us. It doesn't matter who is the senior or junior partner, given that it still makes both of them more dangerous and capable than if they were operating alone and separate.

Shiite Iraqis are very sensitive to Persian domination

Those sensitivities are just instincts, which can be easily manipulated. Just as the instincts of blacks in America to hate slave owners and the descendents of slave owners is easily exploited by the new slave masters of the 21st century.

Whether Shiites are sensitive or not, Persia can still quite easily gain control of that region or at least push it into ever lasting war like with Palestine.

How Sadr, being alive, will help us deal with that is still unclear from your comments, Grim.

Sadr has held to his ceasefire, and it appears to me that the radicals are disaggregating from him on their own. He is left with a choice: get in front of them, or let them go.

As far as I can decipher from your words, Grim, you advocate to keep Sadr alive in order for him to keep his organization together while giving the radicals a chance to break free to fight Americans and the central government, thus allowing us political and ROE freedom to engage and destroy them in detail.

If Iraq was a closed system, that would be a probable future you are painting. I still doubt that our enemies or Iraq's external enemies, will simply stand by and let that happen, thought. Especially given the uncertainty of the US elections and Iran's progress with the ultimate bargaining chip, in accordance with Russian or Chinese strategic alliances.

Posted by: Ymarsakar at March 18, 2008 01:54 PM

If I accept your analysis of the situation, Grim, then I would have to introduce the possibility that the radicals of JAM have had the same analysis. In which means their best course of action is to kill Sadr, blame it on the US, and use that martyr image to get as much support from Sadr's political wing as possible.

The same as before, I don't particularly like waiting for my enemies to act in the perfect way that will allow us to destroy them. If they get ahead of us and take the initiative, we will be the ones on the defense trying to do damage control while they'll be the ones that hammer us politically and grassroots wise.

Posted by: Ymarsakar at March 18, 2008 02:00 PM

Why do we need him? Because he keeps together an organization that can serve as a gravity well.

What would these look like? Probably they would already exist, and therefore have an in-built legitimacy. They would be Muslim organizations for the most part, because the insurgency is so heavily committed to Islam. They would be able to reach out to the networks of young men who might otherwise be drawn into terrorism.

Maybe they would look like the Nahdlatul Ulama.

The NU is a gigantic Muslim organization in Indonesia. It has fully forty million members. While it is religiously conservative, and therefore able to speak to the deeply religious Muslims that might be drawn into al Qaeda or Jemmah Islamiyah, it is not hateful. It even has a paramilitary organization, the Banser.These organizations should ideally already exist, and already have legitimacy in the community. They work best if they are perceived as being an effective hedge against America, provided they can be persuaded not to be violent or to support terrorists -- because it is only organizations perceived as effective as a hedge against America that will draw young men who would otherwise join terrorists. JAM appears to be on the edge of a split between its radicals and those who want to work within the system -- and if so, it will be an ideal candidate.

All the complaints voiced against Sadr, except the Iranian connection, can be voiced as well against Sheikh Ali of the Duilami tribe -- the JAI leader, who fought Americans, who killed Shiites, who worked with al Qaeda and let them run his town. Yet he also fought a 24-hour battle against AQIZ, when he found he did not like being controlled by them; and now leads the Sons of Iraq in Hawr Rajab.

As for the Iranian relationship, no doubt it exists. I don't think they are "partners," though, junior or senior. They are allies, but allies with a deep division between them, and Sadr can neither trust them nor can he allow himself to be seen as being too close to them.

A relationship with America is a nice counterbalance for him, one that would allow him to maintain his appearance of independence -- as well as providing him with actual independence, as he would no longer be dependent on Iranian support if he could become accepted as a legitimate actor in Iraqi politics. He would be in a far stronger position.

Since we want to create a gravity well to draw angry young Shi'ites into a nonviolent method of expressing their anger, we also benefit. If the gravity well concept is valid, and emergent theory and counterinsurgency theory both suggest it, this is a wise course.

If both theories are wrong, well, he'll be easier to kill later for having been drawn out of hiding. Nothing wrong with having a plan B.

Posted by: Grim at March 18, 2008 02:08 PM

> You see, those mortgage brokers are regulated by the states. Not the Federal government.

In the immortal words of Wednesday Addams:
Wait.

.

Posted by: obloodyhell at March 19, 2008 03:46 PM

Yet he also fought a 24-hour battle against AQIZ, when he found he did not like being controlled by them; and now leads the Sons of Iraq in Hawr Rajab.

In reference to this slice comparison, the thing is that people don't necessary act the same way across the same culture or religion. Who can tell what is in a man's heart or which action he will take upon external stimuli. Models can predict and history can assure, but in the end, free will exists and thus so does uncertainty.

It is the pressure of war that reveals the inner depths of any individual and his priorities for himself, his people, and his nation. Sadr simply has not conducted himself in such a way during this war that would lead me to believe that his future actions will mirror those of the Sunnis.

For the Sunnis, the force of Al Qaeda really cracked through cultural or anti-American layers. There is no such force with Sadr, not even if all that you have said about his forces fragmenting became true.

Posted by: Ymarsakar at March 20, 2008 11:27 AM

I don't think anti-Americanism has much to do with Sadr's thinking. I think pro-Sadrism is his creed; and he has more to gain than lose here. Indeed, we can arrange it so that he has quite a lot more to gain than to lose, because we can affect both sides of that equation for him.

Posted by: Grim at March 20, 2008 11:37 AM

I mention anti-Americanism to describe the particular sort of nationalistic rhetoric used back when people saw America as the occupation force in Iraq. By stoking patriotic, national, or tribal fervor, parties like Sadr could direct people's angst towards us. I am not refering to the anti-Americanism ideology that Europe pionered.

Posted by: Ymarsakar at March 21, 2008 08:42 PM

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